Trying to avoid the Retail Leases Act – and the severe consequences

A recent decision in the Victorian Supreme Court highlights the severe consequences that can be paid by parties who try and avoid the Retail Leases Act. In this case, the landlord/vendor lost about $90,000.00 to which they thought they were entitled to receive under the lease.

Facts

• Mr & Mrs Spirovski owned a hotel premises in Fitzroy. In January 2008, an agreement was entered into to lease the premises to Univest Asset Merchants Syndicators Pty Ltd.
• The agreement provided that Univest would pay $90,000.00 to the Spirovski's on signing the lease, and a further $90,000.00 upon exercising the option (if this occurred). This payment was not expressed in the lease, but was expressed in a contract for the sale of business, although no business was being sold.