Two Court cases have clarified the question of ‘What are retail premises?’ in considering the coverage of the Retail Leases Act 2003 (the Act).

The Victorian Court of Appeal decision in IMCC Group (Australia) Pty Ltd v CB Cold Storage Pty Ltd  [2017] VSCA 178.

has interpreted the Act to confirm that premises used for supplying commercial services to other businesses are covered by the Act.  The County Court’s decision in the case of  Access Solutions International Pty Ltd v Gamet Pty Ltd [2017] VCC 1563, following the CB Cold Storage Decision.

The decisions held that the premises in those cases are used for supplying services to other businesses as ‘ultimate consumers’  of those services and as such are covered by the the Act.

Landlords and tenants who have a commercial lease may be unaware of the effect of the decisions as they clarify the Act may have greater coverage than first thought in applying to premises used for selling goods to an end user which can be another business.

For example, premises used for the sale of flour to a bakery which uses that flour to make bread may be covered by the Act. Premises used for selling mixed concrete to a builder for used by the builder to construct a driveway may also be covered.

The coverage provided by the Act is important as there are key differences between a commercial and retail lease. Examples include under a retail lease, a tenant cannot be required to pay land tax or capital costs. A further example is that a tenant does not have to pay outgoings unless they are provided with an annual estimate of outgoings beforehand.

For more information, refer to the VSBC’s guidelines, What are Retail Premises?

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