High Court Refuses Special Leave. The “Ultimate Consumer Test” Is Here To Stay In Determining Whether Premises Are “Retail”

By Evelyn Marcou, Senior Associate, MST Lawyers

Last Friday, the High Court of Australia refused special leave to appeal the decision of the Victorian Court of Appeal in IMCC Group (Australia) Pty Ltd v CB Cold Storage Pty Ltd [2017] VSCA 178.

For a discussion of this case, see my earlier articles here.

The result of special leave being refused is that the “ultimate consumer” test is cemented as part of the test of whether a premises is deemed to be a retail premises under the Retail Leases Act 2003 (Vic) (“RLA”) for the foreseeable future (unless Parliament intervenes).

What this means

  1. A substantial number of leases in Victoria are likely to be retail leases without the parties realising.  It is likely that we will see increased litigation in this area, for example, tenants may seek to recover the payment of land tax and other outgoings made under the mistaken belief that the RLA did not regulate their lease.
  2. All landlords and tenants should reassess whether, based on the “ultimate consumer” test, the RLA applies and if so, take the necessary steps to ensure that the parties comply with its provisions.  For example, if it is determined that the RLA applies, landlords should cease charging land tax to tenants and should consider providing tenants with at the very least, annual estimates of outgoings if not a full Disclosure Statement.  If you are a tenant, you may wish to request a Disclosure Statement from the Landlord and refuse to pay land tax if it has been charged by the landlord previously.

If in doubt, you should seek legal advice to see whether, based on the “ultimate consumer” test the RLA applies to your lease and if so, the resulting implications.  We expect to see a lot of activity in the coming months resulting from this case.

For more information, please contact Evelyn Marcou from the Property & Leasing team by email or call on Ph: +61 3 8540 0200.