Legal costs under s 92 of the RLA 2003 when lease less than 1 year

VCAT recently held that s 92 of the RLA 2003 prevents recovery of costs in a dispute between landlord and tenant of a retail premises lease of less than one year.

Section 12 of the RLA 2003 states that the Act does not apply to retail premises leases of less than 1 year.

However, the finding relies on s 81(1)(c) of the RLA 2003, which states that a retail tenancy dispute under part 10 of the Act includes a dispute between a landlord and a tenant:

arising under a lease that provides for the occupation of retail premises in Victoria to which none of those Acts apply or applied

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The reference to “those Acts” is a reference to the RLA 2003, the Retail Tenancies Act 1986 or the Retail Tenancies Reform Act 1998.

The decision is worth noting because disputes arising out of leases with a term of less than one year are likely to be relatively small claims where the impact of costs is significant.

The discussion is located in Burd & Cooper Pty Ltd (ACN 119 808 034) v C & P Cooper Pty Ltd (ACN 119 813 133) and Ors (Retail Tenancies) [2011] VCAT 1416 at [44] to [69].

The operation of s 81(1) was also discussed in State of Victoria v Tymbook Pty Ltd [2005] VSC 267.

Thanks to Jamie Bedelis of Cornwalls for alerting me to this judgment.