Yuen's Family Investments Pty Ltd v Advance Chinese Massage Pty Ltd (Building and Property) [2025] VCAT 682

1. The proceeding is dismissed.
2. Costs reserved. Any application for costs is to be made by 22 August 2025. The principal registrar is directed to list any application for costs for a hearing of one hour's duration before me.

1. Yuen's Family Investments Pty Ltd ("YFI") leased a building comprising a shop and dwelling in Carnegie, a few doors away from another building in which YFI operated a retail fruit shop. YFI built a cool room in an area at the back of the ground floor of that shop and dwelling, and it leased the front of the ground floor to the operator of a hairdressing salon. Therefore, YFI was a tenant which had a head landlord, and in its relations with the operator of the hairdressing salon, it was a sub landlord.
2. In 2011 Advance Chinese Massage Pty Ltd ("ACA") took over the hairdressing salon. According to Mr Richard Yuen, who gave evidence for YFI, the owner of the hairdressing salon left behind a good deal of the salon equipment, as well as rubbish, and ACA used at least some of that equipment in its business. Mr Yuen did not have the details of how ACA acquired the equipment - whether ACA bought the hairdressing business, or bought the salon operator's chattels, or simply took possession of abandoned equipment. In acquiring the salon business, ACA became YFI's tenant of the front of the ground floor. Mr Yuen did not give evidence as to the basis of ACA taking possession of the shop - whether it executed a formal lease or occupied the premises on an informal basis - perhaps because 2011 is so long ago and is now considered irrelevant.
3. YFI's claim in this proceeding is that it entered a formal lease of 5 years duration on 25 May 2014, and that ACA owes it $19,015 .92 in unpaid rent and outgoings, and also including an amount of some $300.00 for the service provided by YFI in cleaning up rubbish for ACA.
4. ACA denies liability. ACA relies on several provisions of the Retail Leases Act 2003 (Vic) and the Commercial Tenancy Relief Scheme. ACA did not give evidence in the hearing, because it admitted it had executed the document evidencing the lease and it relied on submissions to the effect that YFI's evidence did not establish the facts necessary to give rise to a claim. ACA's director Mr Jiageng Wang submitted that his signature appearing on the lease document did not amount to execution of a personal guarantee - which was the basis of YFI's claim against him - and that as ACA was not liable to YFI, he could not be liable to YFI under a guarantee.
5. The document recording the lease was a document of 2 pages, headed "Schedule". It was literally the Schedule to a lease document, which had been torn or extracted from that document and simply filled in. As such, it identified its date, the parties, the premises, the amount of rent expressed as per calendar month and annually, the commencement date, the amount of the security bond, an item dealing with outgoings which I quote below, the term, and it contained spaces for parties to sign. Needless to say, it did not contain very much text in the nature of "terms and conditions".
6. The clause about outgoings was this:

item 10: Insurance premium: Lessee to pay $2000 per year for outgoings, insurance, glass, street promotion and anything else.

1. The text dealing with the alleged guarantee was this:

item 15: Tenant's guarantor: Jiageng Wang [address]

1. There was no clause actually setting out the guarantee.
2. There was some text dealing with rent reviews, under the heading "Special conditions" on the second page. It said:
   1. Rent review: 4% (FOUR) increases as per schedule below.
3. There was then a list of years and the rent expressed as per calendar month and annually. The amounts grew each year. For example the first and second items listed were:

Term 25/05/14-24/05/15. Rent $4,454.45 + GST $445 .45 = $4,899.90 inc GST per calendar month. Or $58,798.80 including GST - per annum

Term 25/05/15-24/05/16. Rent $4,632.63 + GST $463.26 = $5,095.89 inc GST per calendar month. Or $61,150.68 including GST - per annum

1. Reading this text together, it is clear that YFI sought to have 4 years x 4% rent increases. The words " Rent review: 4% (FOUR) increases..." simply means that in the second, third, fourth and fifth anniversaries, the rent would increase by 4%.
2. Spaces for signatures were there twice on the second page, the second being at the end of the second page and therefore below the "Special conditions". The two spaces relating to ACA were as follows:

Signed by the Lessee Jiageng Wang as Director for and on behalf of Advance Chinese Massage Pty Ltd

1. There was no execution clause which contained words such as "Jiageng Wang as guarantor of Advance Chinese Massage Pty Ltd".
2. Section 94 of the Retail Leases Act 2003 (Vic) says:
   1. The Act prevails over retail premises leases, agreements etc.

(1) A provision of a retail premises lease or of an agreement (whether or not the agreement is between parties to a retail premises lease) is void to the extent that it is contrary to or inconsistent with anything in this Act (including anything that the lease is taken to include or provide because of a provision of this Act).

(2) A provision of a retail premises lease or of an agreement (whether or not the agreement is between parties to a retail premises lease) is void to the extent that it purports -

(a) to exclude the application of a provision of this Act; or

(b) to limit the right of a party to the lease to seek resolution of a retail tenancy dispute under Part 10 or otherwise to limit the application of that Part.

(3) A provision contained in any other agreement or arrangement (whether or not between parties to a retail premises lease) is void if that provision would be void under this Act if it were contained in a retail premises lease.

1. The words in section 94(1) "anything that the lease is taken to include or provide because of a provision of this Act" reflects the fact that some sections of the Act have the effect of deeming a lease to contain certain provisions. In the absence of that concept, the Schedule signed by the parties in this case would have the effect of giving ACA the right to possession of the premises in exchange for the payment of rent, but many of the "terms and conditions" which one might expect to be in the lease would be missing. Theoretically, if the parties had only signed a document which contained even less information than the Schedule, that document might be unenforceable altogether.
2. The issue caused to YFI by section 94 rendering some provisions of a lease "void" if they are inconsistent with the Act, is that YFI is seeking to rely on such void provisions.
3. For example, sub sections 46(2) & (3)(a) of the Act provide that a landlord must give their tenant a written estimate of the outgoings to which the tenant is liable to contribute under the lease that itemises those outgoings before the lease is entered into, and sub section (4) provide that the tenant is not liable to contribute to any outgoings of which an estimate is required to be given to the tenant as set out in this section until the tenant is given that estimate.
4. YFI did not give ACA an estimate of outgoings. Mr Yuen gave somewhat vague evidence about having had discussions with Mr Wang in relation to which outgoings were mentioned, but even taking his evidence at its highest, it is clear that ACA did not comply with sub sections 46(2) & (3)(a).
5. Additionally in relation to outgoings, the legal practitioner for ACA made submissions about the Commercial Tenancy Relief Scheme which applied during the Covid 19 lockdowns. The policy goal underlying this Scheme was that commercial landlords and their tenants would share the financial burdens brought about by Covid 19, by the rent being reduced in proportion to the reduction in the tenant's business turnover. The Government financially supported the scheme by providing land tax relief to landlords. For the Scheme to apply, a proper application with supporting financial information had to be made. I will not set out the details here, but the evidence given by Mr Yuen was that there was no attempt by either party to make a proper application. Instead, YFI having secured a rent reduction from its head landlord by agreement, sought to offer a lesser rent reduction to ACA. The arrangement was not documented. Then, when the Commercial Tenancy Relief Scheme came to an end when the Covid 19 lockdowns were lifted, YFI said to ACA that the rent reduction which it had offered was not a permanent discounting of the rent, but was only a cash flow arrangement, so that ACA was now indebted to YFI for the rent which it had not been called on to pay during the operation of the Scheme. The evidence produced by YFI was that ACA attempted to pay this alleged debt, by making small irregular payments of cash when it was able. However eventually ACA engaged its legal practitioners and was advised that it was not obliged to pay the alleged debt, because in all the circumstances YFI was estopped from claiming it.
6. YFI's claim for $300.00 in relation to cleaning was explained by Mr Yuen in unclear and rather confused terms. YFI stopped renting the shop and dwelling from which ACA ran its massage business, and ACA began leasing the building from ACA's head landlord. Mr Yuen's primary point was to assert that ACA demanded that YFI clean up the rubbish when it vacated. Even though Mr Yuen considered that it belonged to the operator of the hairdressing salon which should have removed the rubbish in 2011, or that ACA was responsible for the rubbish because it had acquired it from the hairdresser, or that YFI was not responsible for it, he cleaned it up. Mr Yuen said that ACA demanded that he clean it up, and that he did. He has not rendered an invoice, but he recalled having rented a truck or van and he thinks YFI is entitled to $300.00.

1. YFI's claim against Jiageng Wang for payment under a purported guarantee must be dismissed. There is no guarantee. The words next to item 15 in the Schedule, describing Jiageng Wang as ACA's guarantor are ineffective. The way in which Jiageng Wang signed the Schedule was as a director of ACA. It was not a signing by Jiageng Wang in a personal capacity.
2. YFI's claim for outgoings must be dismissed, because YFI did not comply with sections of the Retail Leases Act 2003 (Vic).
3. YFI's claim for $300.00 for cleaning is unsustainable. Mr Yuen's evidence does not establish that ACA "hired" YFI to clean up the rubbish in any way, thus requiring ACA to pay for the service. At its highest, Mr Yuen's evidence is that he cleaned up some rubbish even though he thought YFI was not responsible for it. But does not establish a legal claim. If it did, Mr Yuen's evidence does not prove that the proper charges $300.00.
4. YFI's rent review provisions in the Schedule are sufficient and enforceable. They do not offend section 35 of the Retail Leases Act 2003 (Vic) because they state when the reviews are to take place and the basis on which the reviews are to be made. Section 35(2)(a) & (c) allow a rent review to be a fixed percentage or fixed annual amount. The text setting out the years and the rent expressed as per calendar month or annually are consistent with these sections. The question then arises whether YFI is estopped from claiming rent, after having given ACA a rent reduction informally during Covid lockdowns. I am satisfied that YFI is so estopped. Because neither YFI or ACA properly engaged the procedures under the Commercial Tenancy Relief Scheme, there is no basis on which YFI can say that the rent reduction was a cash flow measure, and that once the Scheme ended with the Covid 19 lockdowns, that YFI was entitled to treat the rent reductions as temporary. The evidence given by Mr Yuen was such that any tenant would believe that the rent reduction was permanent - that YFI had reduced ACA's rent in that period of the lockdowns, and that while the reduction ceased for the period after the lockdowns ended, the reduction did not retrospectively evaporate.
5. It follows that none of YFI's claims against ACA have been proven and that the proceeding must be dismissed.
6. The hearing of this proceeding was listed for one hour, on the basis of a "rule of thumb" assumption, but it took around 2.5 hours, which necessitated the hearing of another proceeding being deferred and commencing later than its scheduled time. At the end of the hearing, I told the parties that a written decision was needed because there was no time to decide the dispute on the day. In the course of giving this advice I said that I would reserve costs.
7. In effect, that meant that I was reserving the respondents' costs, because YFI was self-represented. We will see whether ACA and/or Jiageng Wang apply for costs. I take the opportunity to draw the parties' attention to section 92 of the Retail Leases Act 2003 (Vic) which relevantly provides that
   1. Each party bears its own costs

(1) Despite anything to the contrary in Division 8 of Part 4 of the Victorian Civil and Administrative Tribunal Act 1998, each party to a proceeding before the Tribunal under this Part is to bear its own costs in the proceeding.

(2) However, at any time the Tribunal may make an order that a party pay all or a specified part of the costs of another party in the proceeding but only if the Tribunal is satisfied that it is fair to do so because -

(a) the party conducted the proceeding in a vexatious way that unnecessarily disadvantaged the other party to the proceeding; or

(b) the party refused to take part in or withdrew from mediation or other form of alternative dispute resolution under this Part.

(3) In this section, costs includes fees, charges and disbursements.