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Back to "Leasing and Property Newsletter – July 2017"


Dalmatino Pty Ltd v Creative Laser Pty Ltd [2017] VCAT 875

This case is interesting primarily as an example of delays and to serve as encouragement for parties to resolve their disputes without going to Courts or Tribunals. It concerns rent for a lease that commenced in 2012, and the option lease that commenced in 2015. The case was heard in February 2016, and the decision was made by the Tribunal in June 2017. The decision ordered the parties to go back and obtain new valuations of the rent from July 2012.

A restaurant held a 3 year lease with 4 further option terms each for 3 years. The tenant exercised its option for the first further term, that commenced on 1 July 2012. That further term ended on 30 June 2015 and the next option commenced.

When the tenant exercised its first option, it also included a valuation of the rent as $75,000 per annum. The landlord did not agree, and instead invoiced rent as $101,238.00 per annum. The tenant paid as invoiced throughout the term of that 3 year lease. The tenant now argues that it did not agree to that rent, but just paid as invoiced. The Tribunal agreed that there had been no agreement. The lease provided that without agreement, the rent was to be determined by a valuer.

When the tenant exercised the second option, the parties did not agree on the rent so a valuer determined the rent to commence on 1 July 2015 as $85,000 per annum.

The landlord objected to that valuation on the grounds that the valuer did not consider enough premises is a similar area with similar uses. The Tribunal agreed and set aside that valuation.

The result of the case is that the rent payable from July 2012 and July 2015 needs to be determined by new valuations.

Matthew Rafferty, Partner

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