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[2001] VCAT 2438
respondent. Application dismissed. The applicants must pay the respondent's costs of the injunction application to be taxed in default of agreement in accordance with County Court Scale 'C'.
Tenants (assignees) claimed the landlord failed to give required disclosure statements when the lease was assigned and renewed, and sought an interim injunction to prevent the landlord referring the rent dispute to a valuer. The Tribunal held the assignment did not invoke the 'new lease' disclosure obligation (s8) but that s23 (assignments) and s17 (renewals) are the relevant provisions. Even if disclosure statements had not been given, the statutory consequences affect rent liability but do not prevent the landlord from asking a valuer to fix the market rent. The applicants failed to show a serious issue to be tried or that the balance of convenience favoured an injunction. The application was dismissed and costs awarded to the respondent.
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1,742 words · generated 05/07/2026
This dispute arose under a retail lease for premises at 328 Toorak Road, South Yarra. The lease began on 1 September 1998 for three years and granted the tenant two further two-year options (para [1]). The original tenants assigned the lease to the present applicants by a Transfer of Lease dated 27 January 1999 (para [1]). The term expired on 31 August 2001 and, under the option and the lease's Clause 12, a renewed term was to commence from 1 September 2001 with rent to be determined according to Clause 11 (the contractual rent-review mechanism), which provides for valuation by a registered valuer if the parties cannot agree (para [2]).
3 cited instruments linked from this judgment.
The applicants swore they had never been given disclosure statements. Their solicitor submitted this was a breach of the Retail Tenancies Reform Act 1998 (the Reform Act), specifically arguing that section 8 applied (para [3]). The landlord relied on a solicitor's letter (exhibited) saying "Our clients do not require the disclosure statement under the Retail Tenancies Reform Act 1998" (para [7]). The landlord proposed a 33.3% rent increase and referred the question of current market rent to a valuer under Clause 11 (para [9]). The applicants sought interlocutory relief from VCAT to restrain that referral until the disclosure statement(s) were provided. The Tribunal dismissed the interlocutory application and ordered costs against the applicants (Order; para [12]).
The Tribunal's reasoning rests on three linked points.
Statutory framework and which section applies to assignment and renewal. The Reform Act contains three disclosure provisions: s8 (new lease), s17 (renewal), and s23 (assignment). The applicants argued s8 applied to the assignment; the Tribunal rejected that, holding that s23 is the specific provision creating an assignee's protection on assignment (paras [3]–[6]). The Tribunal distinguished prior authority under the 1986 Act (Bradbun v Bobo) because the 1998 Reform Act imposes a different and more penal regime, for example s8(2) can forfeit rent for periods in which the disclosure was not given (para [5]).
Effect of statutory consequences on the rent-review process. The statutory consequences for failing to give disclosure statements are primarily about liability to pay rent: s17(2) and s23(4) allow withholding of rent and relieve the tenant of liability for rent attributable to periods prior to provision of the statement (paras [6], [8]). The Tribunal concluded these consequences do not expressly or impliedly prevent a landlord from proceeding to obtain a valuation of market rent under a contractual clause; determining the market rent in advance does not injure the tenant's statutory rights to withhold payment (para [9]).
Traditional interlocutory injunction test. The Tribunal applied the customary equitable test: undertaking as to damages, serious issue to be tried, and balance of convenience. Although the applicants offered the undertaking, the Tribunal found they had not shown a serious issue on the interlocutory question of restraining referral to a valuer, and that even if the disclosure questions were later resolved in the tenants' favour, fixing the rent earlier would not cause irreparable harm; indeed it may be advantageous to have rent fixed so the parties know their positions when statutory consequences are sorted (paras [9]–[11]). On this basis the interlocutory injunction was refused (para [12]).
Before this decision, the decision in Bradbun v Bobo under the earlier Retail Tenancies Act 1986 had held that an assignment could be equivalent to entering into a lease for the purposes of disclosure obligations. The Tribunal in Lu & Shu observed that the Reform Act is materially different and that the Bradbun reasoning does not carry over. The Tribunal referenced its own prior decision in Happy Century v Nezville to the same effect (para [5]).
After Lu & Shu, practitioners should note:
"I reject that submission [that the assignment created an obligation under section 8 of the statute]." (para [5])
Quotation of s23(4): "The assignee is not liable to pay rent attributable to the period during which the landlord has not given the tenant a copy of the disclosure statement." (para [6])
"It is not obvious to me how [failure to give a disclosure statement] would prevent or block or obstruct in any way the reference to a valuer to determine the current market rental of the premises." (para [9])
"It is axiomatic ... the rules for the grant of an interlocutory injunction are the same ... namely ... undertaking ... serious issue to be tried ... balance of convenience." (para [9])
"In the circumstances therefore, ... neither of the fundamental requirements for interlocutory relief ... has been made out. Accordingly, I dismiss the application." (para [12])
This decision is directly relevant where:
Under Lu & Shu, a tenant in that position faces an uphill task unless the tenant can show the absence of disclosure statements creates a legal impediment to the valuation process itself or can otherwise demonstrate that the balance of convenience and the seriousness of the issue favour an injunction.
This deep dive is confined to this judgment's content. The Tribunal in Lu & Shu expressly distinguished Bradbun (1986 Act era authority) and followed its own prior reasoning in Happy Century. The decision should be read as a Tribunal-level application of the Reform Act and equitable principles. Practitioners should check subsequent Victorian Tribunal and Court decisions for any authoritative overruling or development. Within the judgment, the Tribunal did not finally rule on whether a solicitor's letter could waive or oust statutory obligations (para [8]); that remains an open point the Tribunal declined to decide.
Does a private letter or agreement (such as a solicitor's letter asserting no disclosure statement is required) have any legal efficacy to displace statutory disclosure obligations under the Reform Act? The Tribunal noted the question (para [8]) and considered s47 but did not decide whether such a letter could remove a statutory obligation; that remains unresolved.
If a disclosure statement has not been given and statutory rent-liability consequences apply, what is the precise interaction between the landlord's contractual rent-review rights and the tenant's statutory right to withhold rent? Lu & Shu says the absence of disclosure does not, on its face, prevent a valuation reference, but it does not exhaustively analyse every possible practical or legal consequence that might arise in a differing factual matrix.
If a valuer fixes a market rent during a period in which the tenant is not liable to pay rent due to statutory non-disclosure, can the landlord enforce the fixed rent forward of the disclosure event, and will that valuation be binding where the failure to disclose is later held to be material? Lu & Shu suggests fixing rent earlier will not cause irreparable injustice (para [11]), yet the judgment does not consider appeals or enforcement steps that might test the interaction of valuation outcomes and statutory rent-waiver periods.
How will courts treat a tenant's attempt to recover rent already paid if a disclosure statement is later found to be obligatory and absent? The Tribunal observed such claims might be vulnerable if the tenant had knowledge (para [11]), but did not decide a claim for restitution or mistake.
To what extent is the Tribunal's approach dependent upon the specific wording of the lease (Clause 11 valuation mechanism) and the exact statutory provisions of the Victorian Reform Act? Different lease clauses, different valuation regimes, or amendments to the Act could produce different outcomes.
Conclusion
Lu & Shu v Sedclo is a focused Tribunal decision applying the retail-tenancies disclosure regime and the equitable test for interlocutory relief. It stands for the propositions that assignments fall principally under s23 (not s8), that statutory non-disclosure principally affects liability to pay rent rather than the landlord's contractual ability to obtain a valuation, and that an interlocutory injunction to restrain a valuation reference will be refused where the applicant cannot establish a serious issue or a favourable balance of convenience (paras [3]–[12]). Practitioners facing similar fact patterns should plan applications for interlocutory relief carefully, addressing whether non-disclosure truly disables valuation and marshaling evidence to show real risk of irreparable harm and a favourable balance of convenience.
Retail Tenancies List; Retain Tenancy Assigned; No Disclosure Statement Assignees Having Stated it Was Not Required; Whether Reference to Valuer to Fix Market Rent for New Term Should be Restrained; No Arguable Question; Application Dismissed
Medium Neutral Citation [2001] VCAT 2438
2. The applicants must pay the respondent's costs of the injunction application to be taxed in default of agreement in accordance with County Court Scale "C".
1. This proceeding concerns leased premises at 328 Toorak Road, South Yarra. They were the subject of a lease by the respondent landlord Sedclo Investments Pty Ltd in favour of Po Wen Chen and Wei Zhu Qian, which lease commenced on the 1st of September 1998 for a period of three years expiring on 31st August this year. The lease included provision for the tenant to have the option of two further terms of two years in accordance with the provisions of Clause 12 of the lease. The lease was assigned by a document styled "Transfer of Lease" and dated 27 January 1999 by the original tenants to the present applicants.
2. As a result of the term of the lease it expired on 31 August of this year and accordingly consideration then had to be given to its renewal in accordance with Clause 12. That provision of the lease stipulates in Clause 12.3 that the renewed lease would "be at a rental determined in the manner set out in Clause 11 of the lease". Clause 11 deals with rent reviews and provides for the initial ability of the parties to agree upon the reviewed rent and in default of that agreement to have the current market rent determined by a valuer registered under the Valuation of Land Act 1960. Clause 11.13 sets out a series of rules which are to govern the valuer's assessment of the current market rental.
3. In an affidavit sworn in support of today's application for interlocutory relief the applicants jointly swear that they were never provided with a disclosure statement. Mr Tse, their solicitor submits that this was in breach of Section 8 of the Retail Tenancies Reform Act 1998. Section 8 is one of three provisions in the statute which provide for the giving of disclosure statements. Section 8 deals with the grant of a new lease. Section 17 deals with the renewal of a lease and Section 23 deals with the giving of disclosure statements upon the occasion of an assignment.
4. Under the terms of the Retail Tenancies Act 1986 there was a decision of O'Bryan J in the matter of Bradbun v Bobo Pty Ltd (1994) V ConvR 54-501 in which His Honour held that the taking of an assignment of a lease of retail premises was equivalent to entering into a lease of a retail premises. The result in the matter before His Honour was that a lease previously unregulated by the 1986 Act [viz. the Retail Tenancies Act 1986] became regulated by that Act after its assignment. The 1986 Act had no equivalent provision to Section 23, no specific stipulation for the provision of disclosure statements to assignees and whilst it provided for a regime of disclosure for a variety of reasons the requirement to provide a disclosure statement was found in practice to be a brutum fulmen, that is, a matter ultimately of neither legal nor practical significance assuming that a tenant took possession and desired to remain on the premises.
5. The regime under the Retail Tenancies Reform Act 1998 is significantly different. The most swingeing of all penalties is imposed upon a landlord where no disclosure statement is given. Section 8(2) provides that if the disclosure statement is not given prior to the entering into of the lease, no rental is payable by the tenant until seven days after the disclosure statement is given. This is not a provision which suspends the obligation to pay rent so that when the disclosure statement is given as it were, back rent becomes payable, it forfeits the rental for the period during which the disclosure statement should have been given and was not given. For these and other reasons I concluded in the matter of Happy Century Pty Ltd v Nezville Pty Ltd (2000) V ConvR 58-536 that the reasoning of O'Bryan J in Bradbun v Bobo did not apply to the Retail Tenancies Reform Act. Accordingly in so far as Mr Tse submits that the assignment already described created an obligation to give a disclosure statement under Section 8 of the statute, I reject that submission.
6. As it is however, Section 23 of the statute clearly did create an obligation to give such a disclosure statement and sub-section (4) of that section creates a sanction upon the landlord of similar severity to the one imposed by Section 8(2). It provides, inter alia:
"The assignee is not liable to pay rent attributable to the period during which the landlord has not given the tenant a copy of the disclosure statement."
7. It may be that as between the two sections the matter is as long as it is broad. I have however been referred to an affidavit sworn by Ms Charney, a director of Sedclo Investments Pty Ltd in which she exhibits a letter from MSC Legal Services, a firm of solicitors which Mr Tse admits acted for both assignor tenant and his clients at the time. The penultimate paragraph of that letter states:
"Out clients do not require the disclosure statement under the Retail Tenancies Reform Act 1998."
8. There may be room for debate as to whether it is possible by such a means to remove the obligation which the statute imposes. Section 47(1) of the Retail Tenancies Reform Act renders void a provision in a retail premises lease which excludes or limits the operation of the Act and sub-section (2) avoids a provision in the retail tenancies lease which is contrary to or inconsistent with the Act. Of course the letter is not and does not purport to be a provision in the retail premises lease. In the event and in the view that I take, it is unnecessary to resolve this interesting question. I should note that whilst it was not the subject of any particular submission on behalf of Mr Tse or any direct evidence it appears that upon the renewal of the lease, that is the creation of a new term of years in exercise of the option with affect from the 1st of September this year, no disclosure statement was provided. Section 17 of the Retail Tenancies Reform Act 1998 provides if:
"(1) (a) A tenant has an option under a lease for a further term; or
(b) A landlord proposes to renew a retail premises lease
the landlord must give to the tenant at least seven days before the end of the current term of the retail premises lease a disclosure statement in the form of a schedule providing information about the matters set out in the schedule that is current as at a date within the period of three months before the statement is given.
(2) If the tenant has not been given a disclosure statement before the retail premises lease is renewed
(a) the tenant may withhold payment of the rent until seven days after the landlord gives a tenant a copy of the disclosure statement; and
(b) the tenant is not liable to pay rent attributable to the period before the landlord gives the tenant a copy of the disclosure statement."
9. The present tenants however are not seeking to withhold rent or for that matter to recover any rent that has already been paid; rather they seek to block, on an interlocutory basis today, and ultimately presumably finally, until the necessary disclosure or disclosure statements are given, the reference pursuant to Clause 11 of the lease of the issue of what is the current market rent for the premises to a valuer. The tenants are paying, according to Mr Tse, the contractual rental under the old lease. The landlord has proposed that the rental be increased 33.3 percent. The tenants have not acceded to that, hence the reference to the valuer. If Mr Tse is correct and a disclosure statement or disclosure statements were required and were not given and if there has been no effective dispensation of the obligation to give those disclosure statements, the effect is that no rent is at present payable. If that is true however, it is not obvious to me how that would prevent or block or obstruct in any way the reference to a valuer to determine the current market rental of the premises. Even if the landlord has no entitlement to be paid any rent now, there is, one would have thought, good reason for it to have the issue of rental review completed even before an entitlement to pay rent comes into existence as a result of the giving of the disclosure statement. If the current market rental has been determined, then when the entitlement to pay rent does come into existence it will be at the rate which the landlord will ultimately require, rather than leaving him to make do with interim arrangements pending the fixation of the rent for the second term. There is simply nothing in any of the sections to which I have referred which appears to disable a landlord from proceeding in a way that this landlord seeks to proceed. It is axiomatic that in this Tribunal the rules for the grant of an interlocutory injunction are the same as they have traditionally been in courts of equity, namely that the grant of an interlocutory injunction is to be made generally first only if the applicant proffers the usual undertaking as to damages and Mr Tse has done that; secondly, that it is shown that there is a serious issue to be tried as to the relief sought on an interlocutory basis and thirdly, that the balance of convenience favours the grant of this relief upon an interlocutory basis.
10. What I have said already indicates that I cannot see that there is a serious issue to be tried as to the applicants' entitlement to the relief now sought on an interlocutory basis.
11. What I have said also indicates that there are serious issues to be tried as to other matters, but not so far as I can see for this. This in itself would be fatal to the grant of the injunction; but even if I were wrong it is not obvious to me even assuming that a serious issue to be tried were demonstrated to exist if the parties do resolve their disputes as to disclosure statements at some time, it will be necessary for the rent for the renewed term to be fixed. Therefore to the extent that it is done earlier rather than later, no irreparable injustice is done. Moreover, if the tenant is correct in its contentions about the disclosure statements it may be that the tenants can simply stop paying rent altogether. They may even, according to one view be entitled to recover some of the money that they have already paid, though the letter that I have already quoted indicating the knowledge of the statutory requirements for disclosure statements might be fatal to any claim for the recovery of moneys paid under a mistake of fact or law.
12. In the circumstances therefore, it seems to me that neither of the fundamental requirements for interlocutory relief, namely the demonstration of a serious issue to be tried as to the interlocutory relief sought or demonstration of the balance of convenience favours the grant of the interlocutory relief has been made out. Accordingly, I dismiss the application.
Lu & Shu
Sedclo Investments Pty Ltd [2001] VCAT 2438
Application dismissed. The applicants must pay the respondent's costs of the injunction application to be taxed in default of agreement in accordance with County Court Scale 'C'.