1. G8 is a listed corporation (as defined in s 9 of the Corporations Act 2001 (Cth)) and has been listed since 7 February 2007.
2. By written lease ('Lease') commencing 1 October 2008, Tiba as landlord leased premises in Thornbury to Samuel Whiskers Pty Ltd ('Whiskers') as tenant, for a term of five years with five options of five years each.
3. The permitted use under the Lease is child minding centre.
4. By written transfer of lease dated 30 January 2015, Whiskers assigned the Lease to G8. At the time, the Lease was in its first five year period optional term (1 October 2013 - 30 September 2018).
5. By renewal of lease dated 5 June 2018, Tiba granted G8 a renewed lease for the second optional term commencing 1 October 2018 and ending 30 September 2023.
6. By notice of exercise of option dated 26 June 2023 G8 exercised its option to renew the Lease for its third optional term commencing on 1 October 2023 and ending on 30 September 2028.
7. G8 proposed a commencing rent for the third optional term in its notice of exercise.
8. Around two and a half months later, G8 received an email from Tiba's managing agent advising that Tiba did not agree with G8's proposed rent and that the rent would increase immediately to $285,000 per annum (plus GST).
9. Over the course of the following fortnight, G8 and the managing agent exchanged several emails setting out their respective positions. Tiba asserted that the RLA applied to the renewed Lease with the effect that, unless the parties agreed on the commencing rent for the renewed term, a valuer must be appointed to determine the market rent in accordance with s 37 of the RLA.
10. G8 maintained that the renewed Lease was not subject to the RLA because at the time the renewed Lease commenced on 1 October 2018, G8 was a listed corporation with the effect that the renewed Lease was not subject to the RLA by operation of s 4(2)(c)(i) of the RLA. G8 has remained a listed corporation including at the time the second renewed Lease commenced.
    1. G8 says it follows that that cl 11 of the Lease will determine how the commencing rent for the renewed term will be determined. By operation of that clause, G8's proposed rent was fixed as rent under the renewed Lease commencing on 1 October 2023 because Tiba failed to object to the proposed rent in writing within 14 days of service of the Notice.

REQUIREMENTS OF SECTION 75

1. A proceeding can be dismissed under s 75(1) of the VCAT Act if, in my opinion, the proceeding is frivolous, vexatious, misconceived or lacking in substance or is otherwise an abuse of process.
2. The general principles relating to the operation of s 75 are well established. In forming my opinion, I must have a high degree of satisfaction that one of the grounds in s 75(1) is established. The claim must be obviously unsustainable in fact or in law or bound to fail. G8 bears the onus of proof.[2]

1. Counsel for G8 accurately summarised the relevant terms in the Lease in the following way:-

(a) the rent payable in the first year of each rent term will be market rent (item 16 of the schedule and cl 11 of the Lease)

(b) a party may initiate a review by giving the other party a written notice stating the current market rent which it proposes for the first year of the renewed term (cl 11.1.2)

(c) unless the RLA applies, if the party receiving the notice does not object in writing to the proposed rent within 14 days, it becomes the rent for the first year of the renewed term (cl 11.1.2)

(d) if:

(i) the RLA does not apply and the party receiving the notice serves a written objection to the proposed rent within 14 days and the parties do not agree on the rent within 14 days after the objection is served; or

(ii) the RLA applies and the parties do not agree on the rent for the first year of the renewed term

• the parties must appoint a valuer to determine the market rent, (cl 11.1.3)

1. The effect of cls 11.1.2 and 11.1.3 is that if the RLA applies, unless the parties agree on the market rent, it must be determined by a valuer.
2. If the RLA does not apply, the two outcomes are:-

(a) if the party that received the notice of proposed rent does not object to the rent in writing within 14 days that party will be bound by the proposed rent; or

(b) if the party that received the notice of proposed rent objects to the rent in writing within 14 days, then unless the parties agree on the rent, it must be determined by a valuer.

1. At its commencement on 1 October 2008 the Lease was a retail premises lease for the purpose of the RLA.
2. Section 11 of the RLA provides that the RLA applies to a retail premises lease that is entered into after the commencement of the section or renewed after the commencement of the section.
3. Croft J held in Richmond Football Club v Verraty Pty Ltd [3] ('Verraty') that a lease cannot cease to be a retail premises lease to which the RLA applies during its term. Whether a lease will be subject to the RLA is determined at the time the lease is entered into and that determination will remain fixed for the entire term of the lease regardless of any change in circumstances that occur during the lease period.
4. G8 contends that upon each renewal of the Lease the question of whether the RLA applies must be considered.
5. Verraty did not determine whether the RLA continues to apply to a lease in the event of renewal regardless of a change in circumstances. Croft J in Verraty specifically said that whether or not the position continued in the event of renewal is another question and one which was not before him to decide.[4]
6. G8 accepts that upon the commencement of the initial term of the Lease on 1 October 2008, the Lease was a lease over retail premises to which the RLA applied.
7. G8 also accepts that when that Lease was renewed for its first optional term commencing on 1 October 2013 it remained a lease over retail premises and the RLA applied. G8 took an assignment of the lease in January 2015 being part way through that first optional term.
8. G8 is a listed corporation. Notwithstanding that s 4(2)(c)(i) of the RLA provides that premises whose tenant is a listed corporation is not retail premises under the RLA, the renewed lease in force at that time remained subject to the RLA for the remainder of the term. This is because, as established by Verraty, coverage under the RLA does not change during a lease term. In other words a lease cannot drop in or out of the RLA during the term of the lease or renewed lease.
9. However, G8 contends and I agree, that whether the RLA applies became subject to review at the time of renewal when G8 renewed the Lease for its second optional term commencing on 1 October 2018.
10. G8 was a listed corporation at that time the second option term commenced. As such the renewed Lease commencing on 1 October 2018 was not a lease over retail premises and the RLA did not apply.
11. The RLA did not apply throughout the term, including on 26 June 2023 when G8 exercised the option to renew the Lease for its third optional term.
12. The third optional lease commencing on 1 October 2023 is not a lease over retail premises and the RLA does not apply.

WAS S 11 OF THE LEASE RENDERED VOID BY OPERATION OF S 94 OF THE RLA?

1. Section 94 of the RLA contains voiding provisions. It provides that a provision in a retail premises lease is void to the extent that it is contrary to or inconsistent with anything in the RLA.
2. As stated, the Lease was originally subject to the RLA and consequently s 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 cl 11.1.3 (b) of the Lease.
3. Clause 11.1 of the Lease addresses rent reviews to market upon renewal of the Lease. It specifically contemplates and provides for when the RLA does and does not apply to the Lease.
4. Verraty held that once the RLA applies, its provisions avoiding inconsistent provisions in a 'retail premises lease' apply to the lease for the remainder of its term.
5. Croft J in Verraty at [78] stated:

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.

1. 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.
2. 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.
3. 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.
4. Accordingly, by operation of cl 11.1.2 of the Lease, because Tiba did not object in writing to G8's proposed rent for the term commencing on 1 October 2023 within 14 days of 26 June 2023, the rent is fixed at $222,672.36 per annum (plus GST).

1. Tiba's claim is dependent upon the lease being a lease to which the RLA applies. For the reasons stated I have found that the RLA does not apply to the second renewed Lease.
2. Tiba's claim is misconceived and lacking in substance. It is unsustainable and bound to fail. The rent has been fixed by operation of cl 11.1.2 and Tiba is not entitled to the relief it seeks. Therefore orders will be made dismissing the application.

[1] Tiba was not legally represented and understandably the managing agent was unable to contribute to the legal argument raised to support the s 75 application.

[2] See Owners Corporation No. 1 PS537642N v Hickory Group Pty Ltd [2015] VCAT 1683, Axicom Pty Ltd v Melton CC [2020] VCAT 190.

[3] [2019] VSC 597; Affirmed on appeal in Verraty Pty Ltd v Richmond Football Club [2020] VSCA 267.