Retail tenant wins VCAT fight but gets nil damages and an adverse costs order

  • Author : Samuel Hopper - 14-05-2015

May 15, 2015

Here is an interesting post about a retail leasing case by my friend Paul Duggan.
The case illustrates problems that can be caused by a tenant’s unconventional corporate structure.
The case also has a useful list of considerations for the Tribunal in determining whether a party’s conduct was vexatious for the purposes of costs under s 92 of the RLA 2003.
Paul Duggan
VCAT’s no costs presumption is more elastic in some parts of the tribunal than in others.

In building cases, the losers commonly pay the winners’ costs. In retail tenancies disputes the losers very rarely do. But the winner paying the loser’s costs? Calderbanks and their equivalents aside, it is almost unheard of  anywhere at VCAT or beyond it.

So imagine the winner’s chagrin in the retail tenancies case of 24 Hour Fitness Pty Ltd v W & B Investment Group Pty Ltd [2015] VCAT 596 when it won the liability stoush, produced an expert report seeking just over $3m in damages and then received nothing but an order to pay the ostensible loser’s costs.
The case is an illustration of one of the hazards of compartmentalising a single business within separate corporate vehicles.
24 Hour Fitness Pty Ltd was the tenant. A gym operated on the premises. Unremarkably, the landlord understood that…
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Samuel Hopper

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