In Richmond Football Club Ltd v Verraty Pty Ltd [2019] VSC 597 (Verraty), Justice Croft held that whether a lease was a ‘retail premises lease’ under the Retail Leases Act 2003 (RLA) was determined at the time the lease was entered into and, if the lease was a ‘retail premises lease’ at that time, the lease remained a ‘retail premises lease’ throughout its term.

As part of the obiter dictum, Justice Croft considered whether certain lease provisions which are voided by, or implied by, the RLA continue to apply to the lease notwithstanding that the lease may no longer be a ‘retail premises lease’ upon its renewal.

The findings the Court made on this point are set out in [69] – [80] of the Verraty judgment. In substance, the Court made the following findings:

1. If a lease was subject to the RLA during its initial term with the effect that some express terms of the lease are rendered void (including those referred to above), those provisions will remain void in the renewed lease (as though they had been struck through with a red pen) even though the renewed lease was not over ‘retail premises lease’ to which the RLA applied; and
2. Where a lease over retail premises had terms implied by operation of the RLA for its initial term – such as the terms implied by sections 52 to 58 (with respect to refurbishment, relocation and demolition, damage and refurbishing and liability for repairs more generally), or those implied by section 37 (Rent reviews based on current market rent) – those terms will continue to be implied into the renewed lease.

The obiter dictum in Verraty has been considered by Senior Member Forde in Tiba Kebab Pty Ltd v G8 Education Limited [2025] VCAT 987 (Tiba decision).

The Tiba decision related to an application made by G8 Education Limited (G8 Education) (the tenant) for orders under section 75 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) to dismiss an application filed by Tiba Kebab Pty Ltd (the landlord) for the appointment of a valuer to determine the market rent for the lease premises.

It was accepted that the Lease for the leased premises was originally subject to the RLA. This was because G8 Education took an assignment of the Lease during its original term and consistent with the finding in Verraty, a lease cannot cease to be a ‘retail premises lease’ to which the RLA applies during its term.

However, G8 Education maintained that the Lease upon its renewal was not subject to the RLA because at the time the renewed lease commenced on 1 October 2018, G8 Education was a listed corporation with the effect that the renewed Lease was not subject to the RLA by operation of section 4(2)(c)(i) of the RLA. The position maintained by G8 Education was not controversial or subject of dispute.

The central question was how the rent for the new term was to be determined.

Because the Lease was originally subject to the RLA, section 37 of the RLA which covers rent reviews was implied into the Lease. Section 37(3) requires the market rent to be determined by a valuer if a landlord and tenant do not agree on the market rent. The section is the same as clause 11.1.3(b) of the Lease.

However, clause 11.1 of the Lease addressed rent reviews to market upon renewal of the Lease and it specifically contemplated and provides for when the RLA does and does not apply to the Lease. Specifically, the Lease contained a mechanism for when the RLA applied and a mechanism for when the RLA did not apply.

Justice Croft in Verraty at [78] stated that:

There would not, however, appear to be any difficulty with the parties directing their minds to this possibility when the lease was first entered into if they contemplated the possibility of the RLA not applying at the time of renewal and, consequently, providing express terms to the effect that the provisions contained in any renewed term are to be those contained in the original lease unaffected by the operation of the RLA. There would be no problem with the application of s 94 of the RLA on this basis because, on renewal—the other point of time at which the operation of s 11(2) becomes relevant—the renewal is not a ‘retail premises lease’ and therefore there is nothing to attract the operation of s 94 of the Act.

In reaching her decision and by reference to Verraty, Senior Member Forde determined at [39] to [41] that:

[39] The parties here have done what Croft J anticipated. They contemplated the possibility of the RLA not applying. Clause 11.2 of the Lease is consistent with s 37(3) of the RLA. It does not seek to avoid its provisions but rather contemplates the possibility of the RLA not applying. Clause 11 was not rendered void by s 94 of the RLA.

[40] I find that cl 11 of the Lease, including 11.1.2, survived entirely intact upon the renewal of the Lease for the terms commencing on 1 October 2018 and 1 October 2023.

[41] Clause 11.1.2 makes plain that where the RLA does not apply the rent will be that proposed by a party to which the other party does not object in writing within 14 days. The parties have expressly agreed that the term implied by s 37(3) of the RLA will not operate in the event that the RLA does not apply.

The key takeaways from the Tiba decision and the obiter dictum in the Verraty are that:

1. Provisions in a lease which are voided or implied by operation of the RLA remain void or implied in the lease even if the RLA ceases to apply (for example, the ability of a landlord to recover land tax from the tenant will continue to remain void) unless:
   1. the parties to the lease have specifically contemplated the possibility of the RLA not applying and drafted the lease accordingly (see point 2 below);
   2. the renewal of the lease document (as opposed to the existing lease) specifically provides that clauses that were void or implied in the lease by the RLA are no longer void or implied in the lease on the renewal of the lease. However, it may not be possible for the parties to agree to such a term on renewal if the lease provides that the renewed lease must contain the same terms as the existing lease;
2. In preparing leases, the parties should contemplate the possibility of the RLA not applying and include relevant provisions in the lease for such a possibility so that the relevant voiding or implied terms in the RLA will not operate if the RLA does not apply. For example, like the lease in the Tiba decision, the lease should provide alternatives by using language such as ‘If the Act applies…’ or ‘If the Act does not apply…’ or ‘Unless the Act applies…’.

G8 Education was represented in the VCAT proceedings by HWLE Lawyers and Louie Hawas of Counsel.

This article was written by Rebecca Jaffe, Partner, and Simone Farrugia, Special Counsel.