In brief

In the decision of Phillips v Abel (Building and Property) [2019] VCAT 1031, VCAT determined that a quarry was governed by the Retail Leases Act 2003 (Vic) (‘Act’).

What you need to know

In granting a lease for a quarry, or other vacant land, this can still be subject to the Act. Importantly, land tax will not be payable by the tenant. Please ensure that in granting any such lease or reviewing any such rent, consideration is given as to whether the Act applies.

Background

VCAT found that most of the sand, gravel and clay extracted from the leased land, was used by customers for their own purposes such as making other products or using it on their own properties. VCAT found that a retail business could be conducted on bare land, including a car park, horse agistment or a racetrack. The Act does not limit retail premises to buildings. The Act looks at the purpose of occupation, namely whether retail goods and services are provided rather than the character of the premises.

Conclusion

The ambit of the Act has expanded and careful consideration needs to be given as to whether a lease is governed by the Act.