As a landlord, do I have to comply with the Retail Leases Act 2003?

As a general rule, landlords, particularly landlords of commercial properties, enjoy superior bargaining power when it comes to leasing their properties.  The terms and conditions of leases are set by the landlord and, subject to market conditions and the bargaining power of a potential tenant, are often non-negotiable.  In these circumstances, the only option for a potential tenant may be to walk away from the transaction.

The Retail Leases Act 2003 (Act) addresses this imbalance in bargaining power for leases of retail premises in a number of ways, for example by providing that:

• a landlord cannot pass on to a tenant the cost of preparing and negotiating the lease; 
• a landlord must consent to a tenant's request for assignment of the lease except in limited circumstances;
• a tenant has a right to a minimum term of 5 years, even if the lease provides for a shorter term.  However, a tenant can contract of out this right if the tenant obtains a certificate from the Small Business Commissioner under s 21(5) of the Act and gives the landlord a copy of the certificate; and
• a landlord is responsible for undertaking certain repairs and maintaining the premises in certain ways.

What are 'retail premises'?

The Act applies to leases of 'retail premises' entered into or renewed after 1 May 2003.
'Retail premises' are premises that, under the terms of the lease, are used wholly or predominantly for:

• the retail sale or hire of goods;
• the retail provision of services; or
• the carrying on of a specified business or specified kind of business as determined by the Minister.

Exemptions to the Retail Leases Act 2003

Not all retail tenancies are leases of 'retail premises'.  Some types of leases are exempt from the application of the Act, and the Minister for Small Business, Innovation and Trade has the power to exempt further kinds of business, premises, tenant or leases.
In Government, some of the more commonly encountered categories of exempted leases are:

• Local council premises used wholly or predominantly for public or municipal purposes;
• Leases for premises used wholly or predominantly for public or municipal purposes with a rent of $10,000 or less;
• Premises where occupancy costs under the lease are more than $1,000,000 p/a;
• Premises where the tenant carries on the business as the landlord's employee or agent;
• Premises where the tenant is a listed corporation or its subsidiary;
• Premises located above the first three storeys in a building used for retail purposes; and
• Leases 15 years or longer in duration that impose substantial obligations on the tenant.

Why does it matter?

The Act alters the balance of power between tenants and landlords by imposing a number of obligations on landlords and creating various tenant rights.  In order to understand their rights and obligations, landlords and tenants must know whether their lease is governed by the Act.  Departments and Agencies proposing to grant a lease of retail premises should always check whether an exemption applies.
As property law experts within Government, the VGSO Property Team is well placed to assist you with land use arrangements and other property issues.  For further advice and assistance, please contact:

Anthony Leggiero
Managing Principal Solicitor
9947 1430

Elizabeth Wortley
Senior Solicitor
9947 1433

Sweet child o’ mine

Birth registration is important. It is the first step in the process of formal recognition of an individual by the state. But for some in the community, the process of registering a birth is difficult (and not just because filling out a three page form is tough for anyone on two hours sleep per night).

Whilst getting bubs to sleep is beyond the State Government’s control, it recently asked the Victorian Law Reform Commission to look into the process for birth registration.

The Commission heard from different sections of the community about their experiences of obtaining a birth certificate, including some adults whose birth was never registered. It examined whether the current process makes getting a certificate difficult, particularly for already marginalised groups.

The Commission handed down its report in November.

The report identified reasons for failing to register a birth or apply for a certificate, including:

• a lack of awareness of the requirement to register;
• a poor understanding of the importance of registration;
• the cost of obtaining a birth certificate; and
• other issues such as mental illness or family violence concerns.

In short, disadvantaged background is a common theme for late registration or non-registration of a birth.

The Commission made 26 recommendations, 23 of which relate to changes in procedure at the Births Deaths and Marriages Registry.

The recommendations include:

• Changing the way in which the particulars of birth notification are collected and how, and by whom, a birth can be registered.
• Changing procedure where family violence may be a barrier to the registration of a birth.
• Better facilitation of the birth registration process and access to birth certificates for cross-border Indigenous communities.
• Streamlining birth registration with applications for services by the Commonwealth.
• Broadening who may certify identity documents as well as the type of proof of identity documents the Registrar will accept to support an application.
• Clarifying the fee exemption policy.

Whilst the recommendations relate to the birth registration and birth certificate application process, the report is useful reading for any government officer designing a policy that balances the need for consistency (or certainty of public records) with the flexibility to ensure that a program can actually work across diverse groups in society.

Flexibility is a fundamental aspect of good government decision-making. Where there is discretion in a decision-making process, there should be a policy to ensure decisions are made consistently and fairly. But that policy must be sufficiently flexible to cover a range of circumstances. This report by the VLRC provides a good concrete example of how an agency can tailor its policies and guidelines to achieve flexibility without compromising on certainty or consistency in program implementation.

For more information about this report, designing flexible decision-making policies or working Gunners references into your professional writing, please contact:

Elsie Loh
Principal Solicitor
t 8684 0144 
elsie.loh@vgso.vic.gov.au

Occupy Melbourne – lessons for decision makers

27 December 2013 update: the VGSO newsletter on this case is now online. Happy holiday reading!

Remember the 'Occupy Melbourne' protests?  The Federal Court recently handed down its decision in the 'Occupy Melbourne Case' – Muldoon v Melbourne City Council.  We note that the protestors have just lodged an appeal to the Full Federal Court, so watch this space...

In Muldoon, members of the 'Occupy Melbourne' protest failed in their constitutional challenge to the response by public authorities to their occupation of public gardens.  The decision is a win for equitable use of public space and reasonable regulation.  It also guides administrative decision makers seeking to protect their decisions from constitutional challenges based on free speech.

Facts

Muldoon arose from the 2011 occupation of public gardens in the City of Melbourne by a group of protestors called 'Occupy Melbourne' and the response by public authorities to those actions.

Two protestors challenged the exercise of enforcement powers by officers of the Melbourne City Council. The exercise of these enforcement powers prevented Occupy Melbourne from continuing its protest through constant occupation of public space.

The relevant enforcement powers were located in Melbourne City Council Activities Local Law 2009 and Melbourne Parks and Gardens (Joint Trustee Reserves) Regulations 1994. 

The laws prohibited:

• a person camping, without a permit, in a public place in a tent or any type of temporary or provisional form of accommodation; and
• erecting signage in a public place, without a permit.

The Council issued a number of Notices to Comply to Occupy Melbourne for the removal of tents, temporary accommodation and signage from the gardens, and, with police assistance, removed tents and other accoutrements of the occupation.

Arguments

The Muldoon decision considered the constitutionality of both the enforcement provisions and the specific exercises of powers under those provisions, in light of the constitutional implied freedom of political communication.

The applicants also unsuccessfully argued that the Local Laws and Regulations were incompatible with their rights to freedom of expression or peaceful assembly or freedom of association under the Charter of Human Rights and Responsibilities Act 2006.

Reasons

In Australia, whether a law infringes the implied constitutional freedom of political communication depends on the answers to two questions.

• First, whether the law in its terms, operation or effect, burdens the freedom of communication about government or political matters?
• Secondly, if the law does burden the freedom of communication it will be invalid unless it is reasonably appropriate and adapted to serve a legitimate end in a manner that is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government.

 

First limb - did the law burden the implied freedom of communication?

The applicants won the first limb, the Court finding that the Local Law and Regulations did burden the implied freedom of political communication.  This was because the tents and banners were symbols of the cause of the Occupy Movement, conveying a message about political matters.

The fact that the Local Laws and Regulations were found to burden the implied freedom is not a surprising result.  When applying the implied freedom courts almost always reach this outcome.  Indeed, this led Heydon J to observe in early 2012 that

[t]his common practice of concession or assumption that the first [implied freedom of communication] limb is met tends to generate an insidious belief that it will always be met.  

Lawmakers and decision-makers should therefore focus on the second stage of the required analysis: what is reasonable regulation?

 

Second limb - was the law reasonably appropriate and adapted to a legitimate end?

Justice North held that the Local Law and Regulations were valid as they were reasonably appropriate and adapted to the legitimate end of providing for the preservation, care, and maintenance of the gardens and for the equitable use of them.  His Honour found:

First, the extent to which the provisions restricted political communication was limited.  They prohibited camping in tents without a permit and bringing certain items into the gardens without a permit.  But the impugned provisions left open a wide range of other forms of political protest in the gardens.

Secondly, the extent of the restriction on political communication was not absolute.  Protesters could apply to the Council for a permit to camp in tents in the gardens or bring specific items into the gardens.  The ability for the Council to grant or refuse such a permit must be exercised in accordance with the purpose of the power, namely, to preserve the gardens and ensure accessibility to them (including taking account of rights of free expression). 

Thirdly, the applicants failed to demonstrate how the Council could have protected the gardens with any less restriction on the freedom of political communication.  In reaching this conclusion, North J rejected the argument that the Local Law and Regulations could be drafted to exclude political communication, as defining this concept was not practical.

Finally, North J rejected the argument that the Local Law enforcement procedure was immunised from judicial scrutiny due to the haste in which enforcement could occur.  His Honour noted that the courts were 'available every day and for 24 hours in each day, including during holiday periods and on public holidays'.

 

The intersection between constitutional law and administrative decision-making

The decision of North J in Muldoon demonstrates how the implied constitutional freedom of political communication affects administrative decision-making.  More specifically, the decision is important for at least three reasons.

First, it shows how non-verbal methods of communication can be protected by the implied freedom.

Secondly, it reinforces that even broad powers are limited by:

• the implied freedom; and
• the requirement that administrative powers be exercised for a proper purpose. (Note: the Charter imposes similar limits on seemingly broad powers).

Thirdly, it explains how administrative decisions can be protected from constitutional challenges based on free speech. Lawmakers and decision-makers need to ensure:

• that administrative decision-makers exercise powers in accordance with the proper purposes for which they were conferred; and
• that evidence exists in each case as to why an administrative power was exercised in a particular manner.

If you are in the Victorian Government and require advice on whether administrative decisions or laws are consistent with the implied freedom of political communication, you can attend our client seminar on Monday, 11 November 2013.  Details of the seminar can be found here. 

Alternatively you may wish to contact:

Sky Mykyta
Managing Principal Solicitor
t 8684 0220
sky.mykyta@vgso.vic.gov.au

Nicholas Tiverios
Solicitor
t 8684 0430
nicholas.tiverios@vgso.vic.gov.au

The referendum we had to have?

A referendum on whether to amend the Constitution to give financial recognition to local government is set down for 14 September 2013.

Why has it been called? And if it is so necessary, why are people now asking for it to be postponed?  

The legal impetus for this referendum came from the 2009 High Court decision Pape (yep, the fellow who tried to take away our tax bonuses).  Before then, the Commonwealth Government had assumed it could make direct payments on any subject matter, regardless of whether it had a head of power to do so. Pape brought this into doubt, including the ability of the Commonwealth to directly fund local government programs, many of which are beyond the Commonwealth’s sphere of constitutional responsibility.  In 2012, Williams (which struck down the National School Chaplaincy Program) perpetuated this doubt, the High Court insisting that the Commonwealth could only directly fund programs that were, amongst other things, within its legislative powers.  

An independent expert panel (in December 2011) and a federal parliamentary committee (in March 2013) both recommended that a referendum on financial recognition of local government be put to Australian voters.  

On 16 May 2013, the Federal Government released a Bill containing the proposed text of a referendum. The proposed amendment gives the Commonwealth power to bypass the States and make payments directly to local government. At the moment, the Commonwealth’s grants power (s 96 of the Constitution) allows it to make payments to the States on such terms and conditions as the Parliament thinks fit.  The amendment extends that power to local governments.

Some have called for the referendum to be delayed until the Federal Government has properly educated the public on why this change is necessary. Public consultation is always important in ensuring civic engagement with legislative change.  But it takes on additional significance given that s 128 of the Constitution requires a referendum by the people to effect constitutional change. People need to be given proper explanations of both sides of the debate if a referendum is to be in the true spirit of s 128 and if they are to have any confidence in any proposed change.  The two-week consultation period allowed for the draft Bill was arguably inadequate given the significance of the issues.   

Further, the education process has not been conducive to voters making an informed choice come September 14.  

Firstly, it has been sold as a referendum to ‘recognise local government’, which is not quite right.  The 2011 expert panel identified four types of local government constitutional recognition: symbolic recognition (e.g. in a preamble), financial recognition, democratic recognition (i.e. changing the Constitution to guarantee that local councils are elected bodies) and recognition through federal cooperation (i.e. changing the Constitution to explicitly encourage cooperation between governments).  This referendum only progresses one type of recognition – financial.  Is this a genuine recognition of local government as a legitimate third tier of government?

Secondly, this referendum has been presented to the public as the closing of a technical loophole. ‘We don’t want to bore the Australian electorate to death with something that is essentially housekeeping,’ the then Minister for Local Government said when he was asked about the short period between the introduction of the Bill and the referendum. Yet the proposed change is a significant restructuring of the federal power balance established by the Constitution and is neither simple nor essential for the continued existence of local government programs.

Arguments are being made both for and against the proposed amendment.  In the meantime, the Constitution already provides a mechanism for funding to local government to continue.  Under s 96, the Commonwealth has the power to make grants to the States on the condition that all the money is passed on to local government. This is the way that the Commonwealth has provided funding to local government since the 1920s and it is constitutionally valid. 

It is still possible for the Federal Government to include in the pamphlet distributed to voters YES and NO cases that genuinely and comprehensively represent the true nature of this proposed amendment.  It is also possible for it to fund an education campaign that properly explains both cases to the public.  But only then can people genuinely engage in the process contemplated by s 128 of the Constitution.  And that is why people are calling for the September 14 referendum to be postponed.

What do you think about the timing of this referendum? About referenda in Australia generally?

If you are in the Victorian Government and would like advice about this referendum or on how your program fares as a result of the funding uncertainty caused by the Williams case, please contact:

Alison O'Brien

Assistant Victorian Government Solicitor

t  8684 0416  

alison.o'brien@vgso.vic.gov.au