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Mitchell is the Managing Principal of Sharrock Pitman Legal. He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate and can answer all your questions related to probate.

For further information, contact Mitchell on his direct line:


CALL: (03) 8561 3318

This article looks at the definition of 'retail provision of services' in the matter of IMCC Group (Australia) Pty Ltd v CB Cold Storage Pty Ltd [2017] VSCA 178.

In the case of IMCC Group (Australia) Pty Ltd v CB Cold Storage Pty Ltd [2017] VSCA 178, the definition of ‘retail provision of services’ was considered in the context of retail versus non-retail leases, in relation to a lease for the provision of cold storage facilities.

The majority of the services provided by CB Cold Storage were to other businesses, not to the general public. CB Cold Storage argued that a lease for business-to-business services was not a retail lease but a commercial lease and, as such, was not required to comply with the Retail Leases Act 2003.

Ultimately, this argument was rejected and the Court of Appeal instead endorsed a broad definition of ‘retail lease’.

Many leases not previously considered to be ‘retail’ are likely to fall within this definition, involving significant potential consequences for landlords and tenants alike.

What is a retail lease?

A retail lease is a lease of premises which are used predominantly for the sale or hire of goods or the retail provision of services.

Whether or not a premises is used for the sale or hire of goods is generally self-explanatory.

Whether or not it is used for the retail provision of services may be more difficult to determine.

In the case discussed above, the Court held that this question could be determined with reference to an ultimate consumer test which asks the following:

Are the services used by the person to whom they are sold, or are the services passed on by the purchaser in an unaltered state to some third party?

In other words, is the tenant’s customer the ultimate consumer of the service? In the above case, the service was the provision of cold storage facilities. The consumers were therefore those who used the facilities for storage and not, as CB Cold Storage contended, the public who bought the products that had been stored there.

There are however exceptions to this definition of a retail lease. For example, the following leases are not classified as retail leases in Victoria:

  • Leases where the annual occupancy costs, such as rent and outgoings, are greater than $1 million
  • Leases where the tenant carries on a business on behalf of the landlord
  • Leases where the tenant is a listed corporation (or subsidiary of such)
  • Leases where the tenant is a body corporate listed on a stock exchange (or a subsidiary of such)
  • Leases on premises located within the Melbourne Markets
  • Leases of 15 years  
  • Leases used for charity and community purposes.

Why does it matter?

Retail leases are governed by the Retail Leases Act 2003 (Vic). This Act imposes certain obligations on tenants and landlords that are not imposed for non-retail leases.

Some of the relevant differences between retail and non-retail leases include:

  • The landlord is required to provide a tenant under a retail lease with a Disclosure Statement containing a summary of key information under the lease
  • A landlord cannot refuse the transfer of a retail lease except in accordance with the Act. A non-retail lease can only be transferred in accordance with the reasonable terms of the lease itself
  • A retail lease has to be for a minimum of 5 years unless the tenant signs a ‘5 year waiver certificate’
  • The landlord has to pay the legal costs of executing the lease and obtaining the mortgagee’s consent, if relevant. In a non-retail lease, this is a matter for negotiation between the parties
  • If the landlord and tenant cannot agree to a rental increase, a specialist retail valuer must be appointed
  • Most disputes regarding retail leases must be brought to the Victorian Small Business Commissioner prior to commencing any proceedings in VCAT
  • The landlord is prohibited from recovering land tax under a retail lease. This matter has been the subject of multiple cases in recent years, including the CB Cold Storage case. Where a landlord has required tenants to pay land tax under a lease which is later determined to be a retail lease, tenants have in some cases been able to recover the amount paid to the landlord through litigation.

It is important to note that the Retail Leases Act 2003 only applies to retail leases granted following 2003.

Landlords and tenants should also review leases granted prior to the enactment of the Act in 2003 to ensure that the lease has not been surrendered and re-granted post-2003, as occurred in Richmond Football Club Limited v Verraty Pty Ltd (ACN 076 360 079) (Retail Tenancies) [2011] VCAT 2104.

Landlords who fail to comply with the Act may be subject to penalties.

How can Sharrock Pitman Legal assist?

If you believe you are a party or may become a party to a retail lease, it is important that you familiarise yourself with the Act or consult a lawyer regarding your obligations under the Act. Call Accredited Specialist in Property Law Andre Ong on (03) 8561 3317, for further information regarding retail leases.

The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

Liability limited by a scheme approved under Professional Standards Legislation.

Written by a member of our Legal Team

,

.

For further information contact

Andre Ong

Andre is a Principal of Sharrock Pitman Legal.

He heads our Property Law Group and is an Accredited Specialist in Property Law (accredited by the Law Institute of Victoria).  He also deals with Commercial Law. For further information, contact Andre Ong on his direct line (03) 8561 3317.

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Property Law

This article looks at the definition of 'retail provision of services' in the matter of IMCC Group (Australia) Pty Ltd v CB Cold Storage Pty Ltd [2017] VSCA 178.

However, in this article we will set out the factors that influence how long it will take to obtain a Grant of Probate and to administer an estate in Victoria.

The basics

First things first: what is a Grant of Probate? A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will. Without Probate, the asset holders (say a bank or share registry) cannot be satisfied as who has the correct authority to receive the deceased's assets and may refuse to pay out.

Sometimes, for smaller estates or if assets are mostly jointly owned with a surviving spouse, asset holders might agree to release payment without requiring a Grant of Probate. This is usually on the basis that the person who receives payment promises to repay (or Indemnify) the asset holder if it turns out they paid to the wrong person.

If there is no Will, then you cannot obtain a Grant of Probate. Instead you obtain Letters of Administration. This is effectively the same, in terms of authorising someone to administer the estate, and would usually be obtained by the person who is the closest next-of-kin to the deceased.

“A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will.”

Timeframes for Probate in Victoria

In order to obtain a Grant of Probate, the Supreme Court needs to be given information about the assets and liabilities of the estate, the deceased person, the witnesses to the Will, the executors and the Will itself. An advertisement of your intention to apply for Probate must also be published on the Supreme Court website for at least 14 days prior to any application being lodged.

Often, making enquires to obtain all the necessary information can take a number of weeks. Also, you will need the Death Certificate for the application for Grant of Probate and possibly for making proper enquires regarding the assets and liabilities. Waiting for the Death Certificate to issue can therefore add a few more weeks to the process. Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.

The Court itself usually does not take long to process the application (maybe another 1 to 2 weeks) and this is completed using the electronic Supreme Court filing system. This means you do not have to go to a Court hearing. The timeframe for processing applications for Letters of Administration is even less, given that there is no Will document for the Court to consider. There is also a general discretion for the Court to raise a 'Requisition' asking for more information before they review the application - this can sometimes delay matters.

“Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.”

So, here we are a few months after death and you finally have a Grant of Probate or Letters of Administration. It is important to remember that this is the start of the estate administration and not the end. For a very simple estate, you might only need a further month or so to cash the assets and pay them to the correct beneficiaries. However, it can often be more complex than that. Factors that determine the timeframe to administer the estate include:-

  • Some assets will take time to cash or transfer. For example, if selling a property, final settlement might be 60/90/120 days from the day of sale.
  • There is a 6 month period for challenges to be brought against the estate and executors must wait until this period expires before distributing the estate, if there is any risk that a disgruntled family member might come forward.
  • There might need to be final tax returns for the deceased or for the estate. Failing to wait for the ATO to process these could leave the executor personally liable for a tax bill.
  • You might need to advertise for creditors to come forward and wait for a period of months while this advertising timeframe expires. This protects the executor if they are unsure of all of the deceased's financial dealings and creditors.
  • It might not always be a good time to immediately cash estate assets. For example, the shares just took a nose-dive, do you still sell regardless of available price?

There is a general rule that executors have an 'executor's year' to complete the estate administration. This means that you should be aiming to have the estate finalised and distributed within 12 months from the date of death.

The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

Liability limited by a scheme approved under Professional Standards Legislation.

Need help with Probate?

Our expert legal team is ready to take your call!

Mitchell is the Managing Principal of Sharrock Pitman Legal. He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate and can answer all your questions related to probate.

For further information, contact Mitchell on his direct line:

DIRECT LINE: 
(03) 8561 3318

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For fifty years Sharrock Pitman Legal has made a significant and long term contribution to meeting the legal needs of business owners and residents in the City of Monash and greater Melbourne area.