We encourage you to try and resolve your dispute directly with the other party prior to submitting an application for assistance with the VSBC. If you are unable to recover your debts or resolve your dispute after these steps, we request that you include documentation of the attempts that you have made with your application.
For some tips about resolving your dispute directly with the other party, click here.
The VSBC will first attempt to resolve a dispute through preliminary assistance and some 'shuttle negotiation' between the parties. Where this is not possible, the VSBC will determine if mediation is appropriate for the particular dispute. Factors taken into account include the amount in dispute, and whether the nature of dispute lends itself to a negotiated outcome.
No. The VSBC can assist with any amount in dispute, ranging from hundreds of dollars to millions of dollars.
The VSBC can determine not to deal with an application if the dispute appears trivial, vexatious or not within the VSBC jurisdiction. Otherwise, the VSBC accepts disputes from all types and sizes of businesses. There is usually a small or medium sized business involved in any dispute.
No. There is no statutory obligation for general commercial disputes to come to the VSBC. But they can be. Resolution rates for these types of disputes is high, keeping both parties out of expensive and distracting litigation.
There is no cost to the parties to use the VSBC’s email or phone information services, or if a dispute is resolved prior to mediation by a VSBC staff member working with the parties.
For most business disputes, each party currently pays $195 per session for mediation, making it a very low-cost alternative to litigation. The exceptions are Owner Driver and Forestry Contractor, and Taxi Driver and Operator disputes, which currently cost $95 per party. The VSBC subsidises the majority of the costs and provides the venue free of charge.
If either side wants to bring along their own lawyer they can do so, but at their own cost.
Note: Payment must be made on the day of mediation, prior to mediation taking place.
If the mediation is successful, the parties sign Terms of Settlement.
The Terms of Settlement are legally enforceable – that is if either party breaches the agreement (for example, by not paying money as per the agreement), the other party may take the agreement to VCAT or the Courts for enforcement.
Yes, within reason (medical reasons, for example).
It should be noted, however, that if a mediation session is arranged and you cannot participate on the day appointed, or do not want to proceed, the VSBC must be notified at least five working days prior to the scheduled date. For any notice period of less than five days, you will be invoiced the mediator’s fee for that day ($900).
Occasionally this will happen. In most cases, a certificate is issued stating that this is the case. The mediator engaged for the session will invoice the party who has not attended the full cost of the mediation ($900).
Mediation usually takes place at the new temporary mediation rooms at:
Victorian Small Business Commission
Level 2, Conference Centre
1 Spring Street
However, for disputes in regional areas, mediations can be arranged in a location that suits both parties.
The VSBC will arrange for a mediator to travel to regional locations and organise the venue. Some VSBC mediators are regionally based.
The answer to this question depends on what type of dispute you have. In general the VSBC has the capacity to issue a certificate stating that the mediation was unsuccessful. This certificate can enable a party to progress the matter to litigation for some disputes. For more information, see:
- What happens if my business dispute is not resolved at mediation?
- What happens if my owner driver and forestry contractor dispute is not resolved at mediation?
- What happens if my farm debt mediation dispute is not resolved at mediation?
- What happens if my retail lease dispute is not resolved at mediation?
- What happens if my taxi dispute is not resolved at mediation?
If you have any documents in addition to the ones already provided to the VSBC and you plan to refer to those during the mediation, either send them to the mediator or have them available on the day of the mediation.
You don’t have to share documents with the other party, but this occurs in most cases as it can aid the mediation. Sometimes, for example, a party may only provide documentation to the dispute resolution officer or mediator as background information only.
If you need to clarify any issues about the delivery of the documents, please feel free to contact the mediator using the contact information provided in the invitation.
Reference documents relevant to the dispute may be provided to all parties prior to mediation.
The average length of mediation is around three to four hours, but it can sometimes take longer. Please take this into consideration when making your plans for the day and, if you travel by car, be sure to make appropriate parking arrangements.
It is very important that you are well prepared to make the most of the mediation as it may be your last opportunity to meet with the other party to try and resolve the matter before litigation.
Here are some tips on how to prepare:
- Prepare a short statement. This should tell your side of the story. Restrict your statement to the key issues. Try not get caught up in the minor issues that often arise in disputes.
- Think about the outcome you would like to achieve. If you could get the other party to agree to whatever you wanted, what would that be?
- Think about your bottom line. What is the minimum you can really afford to accept?
- Think outside the square. Consider the different ways that you may be open to settling the dispute and be ready to discuss them. For example, can you compromise about accepting or paying an amount of money?
- Consider the position of the other party. Think about what the other party may want to achieve and consider your position in relation to that – would you be able to offer part of what they want in order to reach a compromise? No matter how convinced you are as to the strength of your position, be prepared to accept there may be potential weaknesses in your case – even if your case looks to you to be very strong, nobody has an entirely bullet-proof case.
- Have an open mind. Come to the mediation in good faith – be prepared to listen to the other party's version of events with an open mind and be prepared to compromise.
- Settlement agreement. If the dispute is resolved, be prepared to sign a written settlement agreement at the end of the mediation.
- Consider payment. You will have to pay the mediation fee before the commencement of the mediation. The amount of the fee and the payment instructions will be advised in the mediation invitation you will receive.
- Consider the alternative. If you can't reach a negotiated settlement the dispute is likely to progress to litigation, with delays, costs and disruption to your business.
If you believe you might have some language difficulties, please contact the VSBC and ask for an interpreter to be provided at the mediation. The VSBC will provide this service free of charge. You may also have a friend or family member present to translate, if needed.
Yes, you may wish to have a support person to either attend mediation with you, or be contactable during the process.
You may wish to have legal or other professional representation. If you believe you will need such representation, make sure you can afford it and, if you can, make all the arrangements well in advance so that these representatives can prepare and make themselves available for the mediation.
Please note that there is no requirement for you to be represented – you make the decision.
The process of mediation works better if the parties themselves are present. However, you can have representatives in your place, as long as those representatives can make a decision on your behalf.
Mediations are generally held around 6-8 weeks after the dispute is referred to the VSBC. It can be organised much faster if both parties are agreeable, or the matter is urgent.
This is very much dependent on the issues and the nature of the parties’ dispute. Sometimes, in the case of small amounts of money, or where the legal obligations of one or both parties are clear, preliminary assistance may take place.
Equally, the respondent may receive the letter from the VSBC and decide to fix the problem upon receipt of the letter and the tenant’s application. For example, a landlord who has ignored a tenant’s request to fix a leaking roof may decide to address the issue immediately rather than go through the dispute resolution process with the VSBC.
The VSBC may refuse to deal with a complaint that it considers vexatious, trivial, unlikely to be resolved, or more appropriately handled by another body. We will assess this upon receiving an application for dispute or during a preliminary phone call with one or both of the parties.
The VSBC has no definition of 'small business' and can deal with any dispute between businesses, with local or state government bodies or not-for-profits.
If a landlord is registered for GST then GST is payable on rent and outgoings. However, often there can be confusion regarding whether a lease is inclusive of exclusive of GST. It is therefore important that a lease specifies whether GST is inclusive or exclusive.
It should be noted that the landlord's disclosure statement for new leases (Schedules 1 and 2) makes provision for the landlord to outline whether GST is inclusive or exclusive, so it should be clear to the tenant what the situation is for the lease.
More information about how GST applies to outgoings for retail leases can be found on the Australian Taxation Office (ATO) website or by contacting the ATO on 13 28 66.
If a landlord deems that a tenant has breached the lease, the landlord may issue a notice of default to the tenant. Default notices are often given to tenants for non-payment of rent. The process for issuing a notice of default will usually be what is outlined in the lease, i.e. the lease may state that if a tenant is behind in rent, the landlord may issue a breach notice to the tenant giving the tenant 14 days (or another time period reflected in the lease) to remedy the breach, otherwise the landlord may re-enter the premises.
Relevant legislation is Section 146 of the Property Law Act 1958 which covers restrictions and relief against forfeiture of leases and under-leases.
If a tenant has concerns that the landlord may re-enter the premise, the matter can be referred to VCAT for an urgent injunction.
If no option exists, the landlord must notify the tenant in writing within 6-12 months of lease expiry whether the landlord will offer a lease renewal or not, and if so, the terms of any renewal.
- If an option exists, the landlord must notify the tenant of the last date the tenant can exercise the option, 6-12 months prior to that date.
- An option may not be exercisable by the tenant if the tenant has not remedied any notified lease default or has persistently defaulted throughout the lease term.
- If an option is exercised or the lease is to be renewed, the landlord must provide a disclosure statement at least 21 days prior to the end of the lease.
- The landlord must return the security deposit plus interest as soon as practicable after the lease ends provided the tenant has performed all of its obligations under the lease.
During the term of a lease:
- If the lease provides for a rent review, it must state when the review is to take place, and the basis on which the review will be made.
- A lease cannot prevent the reduction of the rent when rent is reviewed or adjusted.
- A tenant is only liable to pay outgoings specified in the estimate of outgoings and the lease.
- The landlord must provide estimates of outgoings and statements of outgoings during the course of the lease.
- Capital costs relating to the premises are not recoverable from the tenant.
- Land tax is not recoverable from the tenant.
- The landlord is responsible for maintaining in a condition consistent with the condition of the premises when the lease was entered into the structure and fixtures, plant and equipment; and appliances, fittings and fixtures relating to specified services.
- The tenant may arrange for urgent repairs, subject to complying with prescribed procedures.
- The landlord must notify the tenant in writing at least 60 days prior to any proposed alterations or refurbishments that may affect the tenant’s business. The tenant may be entitled to compensation.
- A landlord may be liable to pay a tenant compensation for loss or damage resulting from the landlord’s actions or in-actions affecting the tenant’s trading at the retail premises.
See the Retail Tenants and Landlords section for more information.
If you are selling the business and assigning the lease:
- A landlord is only entitled to withhold consent to the assignment of a lease in certain, limited circumstances.
- An assignment of a lease is taken as a continuation of that lease.
- A landlord can recover from the tenant reasonable legal and other expenses incurred in connection with an assignment (or sublease).
See Assigning a retail premises lease for more information.
Before entering into any contractual leasing arrangement, you should understand your rights, responsibilities and expectations. If you are unsure, seek legal advice. Be aware, too, of the following:
- A copy of the lease must be provided to the tenant at negotiation stage, together with a copy of the VSBC Information Brochure.
- A Disclosure Statement must be given to the tenant at least seven days before entering into the lease.
- A lease must be in writing and signed by all the parties to it, and the landlord must provide the tenant a copy signed by both parties.
- The landlord cannot pass onto the tenant the cost of preparing the lease or disclosure statement.
- A lease term under the Retail Leases Act 2003 (including any options) must be at least five years, although a tenant may request a shorter term.
- However, the Act (other than the dispute resolution provision) does not apply to a lease with a term of less than one year and where the tenant has not been in continuous occupancy for more than one year.
- Money paid as a security deposit must be held by the landlord in an interest bearing account. Interest forms part of the security deposit.
See Retail Tenants and Landlords section for more information.
For disputes under the Retail Leases Act 2003, if mediation at the VSBC is unable to resolve the dispute, a certificate can be issued to enable a party to proceed to the Victorian Civil and Administrative Tribunal (VCAT) for a determination to be made.
The VSBC can also certify that a party has refused to participate in the mediation or alternative dispute resolution process and this may have cost implications at VCAT for the party that refuses to participate.
No, provided none of the limited grounds in section 60 of the Retail Leases Act 2003 exist on which a landlord may withhold consent to assignment.
Section 61 of the Act contains the procedure that a tenant must follow in order to obtain consent to assign the lease. The landlord has an obligation to act reasonably in consenting to a transfer of lease (section 144 of the Property Law Act).
See Assigning a retail premises lease for more information.
Yes, if this is what the tenant has agreed to in the lease. It is very important that tenants check a lease’s ‘make good’ and maintenance requirements. Wherever possible, tenants and landlords should agree on a Condition Report at the start of a lease to avoid future disputes.
This depends on the use of the premises under the terms of the lease. If the use is wholly or predominantly for the retail provision of services and the premises are wholly located within the ground, first and second storey, then yes.
A service business on the third storey (where there is a ground, first and second storey) and above is not covered by the Act, though the dispute resolution provisions do apply (Part 10 of the Act).
See VSBC Guidelines 'What are "retail premises"? for more information.
This depends on the variation involved. In certain circumstances a variation can constitute a new lease, but it would depend on the variation in question.
A variation of lease occurs when a substantial change to the original lease is made.
Many variations will not necessarily cause a surrender and re-grant of a lease. If it is not the intention of the parties to create a new lease, legal advice should be obtained before a lease is varied, especially if such variations are to be extensive.
Note: If a new retail lease is created via a variation, the landlord must provide the tenant with a new Disclosure Statement.
The landlord can only force a tenant to move premises if a there is a relocation clause in the lease.
If the lease does not contain a relocation clause, the landlord cannot move the tenant.
If the lease does contain a relocation clause, it should specify the conditions under which the landlord can relocate the tenant.
Under the Retail Leases Act 2003 certain conditions for relocation apply to the lease. For example:
- the new premises must be ‘reasonably comparable’ to the existing premises;
- the rent for the new premises is to be generally the same as for the existing premises;
- the landlord must pay the tenant's reasonable costs of the relocation.
In addition to the lease, the Act also provides that the Disclosure Statement (provided by the landlord to the tenant) must specify whether the lease contains a relocation clause and if the landlord has any plans for the building in which the premises are located during the term of the lease which may invoke the relocation clause.
Section 55 of the Act covers the issue of relocation of the tenant's business.
Under the Retail Leases Act 2003, a tenant can claim reasonable compensation for interference from a landlord under the following circumstances:
- if a landlord inhibits the tenant's access to the premises;
- unreasonably taking action that causes significant disruption to the tenant's trading at the premises;
- failing to rectify as soon as is practical any breakdown of plant or equipment that is not under the tenant's care or maintenance.
Furthermore, Section 54 of the Act covers the issue of relocation of the tenant's business. Disputes over compensation can be referred to the VSBC for dispute resolution.
For new retail premises leases, the rent will be negotiated and decided upon by the landlord and prospective tenant.
For existing leases, the rent will be determined by the rent review provisions in the lease and specifications in the lease.
Rental increases may occur throughout the lease – if the lease provides for it – by a fixed percentage or amount, or by a certain figure determined by the consumer price index (CPI).
If renewing a lease, the lease usually provides for a market review of the rent to determine the value. In this case a range of factors are considered, for example, the location, size and condition of the premises. If the parties cannot agree on the rental for the new term, the parties may require a valuer to determine the rent. If the parties cannot agree on the valuer's appointment, the VSBC can assist parties in appointing a Specialist Retail Valuer.
The VSBC has the capacity to handle a dispute if the parties are seeking urgent mediation.
However, if you are seeking an urgent injunction (an order requiring one party to do, or stop doing, certain things), you may need to go directly to VCAT or the Courts.
If you decline to participate in dispute resolution or the mediation process, the VSBC can issue a certificate stating that you have refused to participate. The outcome of this differs depending on which legislation your dispute falls under.
For retail leasing, owner driver and forestry contractors, and taxi driver and operator disputes, the VSBC may issue a certificate stating that reasonable attempts have been made to arrange mediation or another form of alternative dispute resolution but have been unsuccessful because the:
- applicant/respondent refused to take part in mediation;
- applicant/respondent withdrew from mediation;
- applicant/respondent cannot be contacted;
- respondent agreed to mediate but was unavailable for mediation for an extended period of time;
- applicant/respondent failed to attend scheduled mediation session
This certificate is necessary for the matter to be referred to VCAT.
In the case of disputes relating to small businesses, if a party refuses to engage with the VSBC in trying to resolve the complaint and the VSBC determines that refusal is unreasonable, we may issue a certificate to that effect and publish details of that certificate in the VSBC’s Annual Report to Parliament.
The certificate may be admitted in evidence in proceedings before the Victorian Civil and Administrative Tribunal (VCAT) or a court.
In the case of farmers in default on a farm debt, if the farmer seeks mediation through the VSBC, the creditor requires a certificate from the VSBC to enable it to take enforcement action.
If a certificate relating to retail leasing, owner driver/forestry contractor dispute or taxi driver and operator dispute states that a party refused to mediate or withdrew from mediation, VCAT has the discretion to award costs against that party if the matter proceeds to VCAT.
If you have received an initial letter or email from the VSBC in regards to a complaint, you will be requested make contact with the VSBC by the date specified in the correspondence.
If you are unsure about the letter or the complaint, Contact Us.
The VSBC can help if you are a small or medium business operator and need assistance on any matter relating to unfair market practices or commercial dealings. At least one party to the dispute needs to be in Victoria.
If you are unsure if our services are right for you, fill out the email form under Contact Us or call us on 13 VSBC (13 8722).
You can discuss your concerns with a dispute resolution officer who may suggest that you make an application, or suggest other means for resolving the dispute or problem.
A respondent is someone who receives notification from the VSBC asking that they engage with the VSBC to resolve a dispute. It is important to remember that, even if you are the respondent the VSBC does not take sides. Our aim is to assist the parties to find a resolution that is acceptable to both parties.
An applicant is a person or business applying for dispute resolution services.
Under Section 52 of the Retail Leases Act 2003 the landlord is obliged to maintain the premises in a condition consistent with the condition of the premises at the start of the lease, and this overrides any lease provisions to the contrary.
It is the landlord’s responsibility to repair the premises so that the tenant can carry on their business uninterrupted.
See Repairs and Maintenance for more information.
A retail lease is a legal document and is binding to all parties who sign it.
If a tenant must still fulfil obligations under the lease, but has left the premises without notifying the landlord and is no longer paying rent, then the landlord has:
- a legal right to re-enter and terminate the lease on the grounds that the tenant has abandoned the premises;
- the right to take action against the tenant to recover any money lost because of the tenant's departure.
Contact the VSBC to discuss your options. We may suggest taking part in mediation with the tenant, or obtaining an order from the Victorian Civil and Administrative Tribunal (VCAT) that the tenant pay the outstanding money.
If mediation takes place and a dispute is not resolved, the VSBC can issue a certificate stating that alternative dispute resolution has been attempted but has been unsuccessful. For some disputes, this certificate is necessary for the matter to proceed to litigation.
The VSBC cannot compel a party to engage under any Act, but if a party refuses to engage with the VSBC in trying to resolve the complaint and the VSBC determines that refusal is unreasonable, we may issue a certificate to that effect and publish details of that certificate in the VSBC’s Annual Report to Parliament.
The certificate may be used before the Victorian Civil and Administrative Tribunal (VCAT) or a court.
The VSBC has developed Operational Guidelines on what it deems as ‘unreasonable refusal.
A retail lease is a legally binding document and therefore both parties must agree to end a lease.
If the landlord does not wish to end the lease, the tenant may be responsible for the landlord's reasonable out-of-pocket expenses in finding a new tenant.
The actual amount the tenant is responsible for is a matter of negotiation between the parties, but the costs may include rent until the premises are re-let and the agent's re-letting fees.
If you are a franchisee and you have a dispute, the VSBC can help you by offering low-cost, speedy and high quality mediation services.
Under the Franchising Code of Conduct, mediation of a dispute is mandatory. The VSBC mediation service satisfies the requirements of the Code.
You can find out more about our mediation services here.
If the issue relates to your lease agreement read this article to work out who your landlord is.
A general business or commercial dispute can be described as a conflicts arising from any commercial agreement between businesses, or between businesses and government or not-for-profits.
Under the Retail Leases Act 2003 a landlord must give the tenant a copy of the lease signed by both parties within 28 days of the date of the tenant giving the signed lease to the landlord.
If this does not happen with the 28-day timeframe, a tenant may give the landlord notice to terminate the lease.
See the Retail Leases Act 2003 Information Brochure for more information.
The VSBC is not constrained by any legislated definition of ‘small business’. We receive complaints from businesses about all forms of commercial dealings with other businesses, not-for-profits, and local and state government entities and can resolve dispute that do not fall under the jurisdiction of the other Acts administered by the VSBC. These may involve franchises, non-retail leases, buying a business, intellectual property, distribution agreements, licences, supply chains, partnership break-ups, etc.
A landlord or real estate agent must return a tenant’s bond if the tenant has performed all his/her obligations under the lease. This usually happens once the tenant vacates the premises.
Subject to this, the landlord or real estate agent should return the bond as soon as possible after the lease ends.
If the bond (and any accrued interest) is not returned, or only part of the amount has been returned and the tenant feels entitled to receive the bond back in full, the matter can be referred to the VSBC for dispute resolution.
See Security deposits for more information.
For disputes under the Owner Drivers and Forestry Contractors Act 2005, if mediation at the VSBC is unable to resolve the dispute, a certificate can be issued to enable a party to proceed to the Victorian Civil and Administrative Tribunal (VCAT) for a determination to be made.
The VSBC can also certify that a party has refused to participate in the mediation or alternative dispute resolution process and this may have cost implications at VCAT for the party that refuses to participate. More information can be found here.
Under the Owner Drivers and Forestry Contractors Act 2005 owner drivers and forestry contractors who have been in an ongoing engagement for more than three months are entitled to a minimum period of notice of termination of their contracts (except in cases of serious and willful misconduct). The period of notice may be worked out, or paid in lieu.
The minimum period required to be given by either party to terminate a contract is:
- Three months' notice for vehicles in excess of 4.5 tonnes gross vehicle mass;
- One month's notice for other vehicles.
If this notice requirement does not suit the owner driver or forestry contractor, the requirement can be waived by the owner driver or forestry contractor obtaining a certificate from the VSBC.
To apply for waiver, download the Waiver Request Form.
Section 50 of the Retail Leases Act 2003 states that a landlord cannot pass on land tax to a tenant.
The Owner Drivers and Forestry Contractors Act 2005 provides basic protections for small business owner drivers, forestry contractors and haulage contractors and a framework for the effective resolution of commercial disputes between these contractors and their hirers, and vice versa.
The legislation outlines provisions concerning owner drivers, forestry contractors, haulage contractors and hirers in Victoria. Together with the legislation, there is also:
- an Owner Drivers and Forestry Contractors Code of Practice;
- an Information Booklets for contractors;
- Rates and Costs Schedules for contractors;
- Model Contracts (developed by the Transport Industry Council and the Forestry Industry Council).
Retail premises are more than just ‘shops’. The Retail Leases Act 2003 also covers premises used for consumer, business, trade services or hire of goods (for example, estate agents, doctors and mechanics). This excludes any area intended for use as a residence.
Premises that do not constitute retail premises are defined in Ministerial Determinations.
See VSBC Guidelines 'What are "retail premises"? for more information.
If the mediation was conducted under the Farm Debt Mediation Act 2011, a creditor may request an exemption certificate to commence debt recovery proceedings if the VSBC considers satisfactory mediation has occurred.
However, if the VSBC considers a creditor has refused to mediate, or failed to mediate in good faith, it can issue a prohibition certificate, which prohibits the creditor from taking further recovery action for up to six months.
If the VSBC considers a farmer has refused to mediate, or failed to mediate in good faith, it can issue an exemption certificate to the creditor enabling it to commence recovery action.
Retail leases legislation applies to premises that are used wholly or predominantly for the sale or hire of goods by retail or the retail provision of services, and where the occupancy cost is less than $1 million per year (the occupancy cost of retail premises is the combined cost of rent and outgoings).
Retail leases legislation does not apply to:
- tenants in the business of wholesaling, manufacturing or storage;
- tenants that are listed corporations or subsidiaries of listed corporations; leases for a term of less than one year unless consecutively renewed;
- premises or businesses that are excluded under Ministerial Determinations.
See VSBC Guidelines 'What are "retail premises"? for more information.
All details relating to the process for mediation under the Act can be found on the Department of Economic Development, Jobs, Transport and Resources website.
The farm debt mediation scheme is administered by the Department of Economic Development, Jobs, Transport and Resources -- please contact the Farm Debt Mediation Officer on 136 186 with any questions. For further information about the mediation process, contact the VSBC.
The VSBC mediates farm debt disputes under the Farm Debt Mediation Act 2011.
The legislation seeks to resolve farm debt disputes efficiently and equitably by requiring a creditor to provide a farmer with the option to mediate before taking possession of property or other enforcement action under a farm mortgage.
There are two types of mediation available under the Act. The first is creditor-initiated mediation, which results from a creditor issuing a notice under section 8 of the Farm Debt Mediation Act 2011. The second is farmer-initiated mediation, where a farmer takes the initiative to request mediation with their creditor.
Read more about the VSBC's farm debt mediation role here.
Applications must be lodged with the VSBC within 30 days of a certificate being issued by the Taxi Services Commission (TSC). The application form must be accompanied by a copy of the TSC certificate.
Disputes between taxi drivers and taxi operators over a Driver Agreement must first be lodged with the Taxi Services Commission (TSC). If the TSC is unable to resolve the dispute and it is amenable to mediation, the TSC will issue a certificate for the parties enabling them to lodge an application for mediation with the VSBC.