Whether a Market Rent Determination is Invalid Due to Failure to Provide Detailed Reasons for Repair Deductions and Mischaracterization of Lease Terms?

Retail Lease Market Rent Review Dispute: Can a Specialist Valuer’s Determination Be Set Aside When It Fails to Explain Major Repair and Maintenance Assumptions and Misstates the Rent Basis?

Based on the authentic Australian judicial case Applicant v Respondent (Building and Property) [2025] VCAT 436, VCAT Reference No BP1080/2024, this article disassembles the Court’s judgment process regarding evidence and law. It transforms complex judicial reasoning into clear, understandable key point analyses, helping readers identify the core of the dispute, understand the judgment logic, make more rational litigation choices, and providing case resources for practical research to readers of all backgrounds. :contentReference[oaicite:0]{index=0}

Chapter 1: Case Overview and Core Disputes

Basic Information

Court of Hearing: Victorian Civil and Administrative Tribunal, Civil Division, Building and Property List

Presiding Judge: Senior Member L Forde

Cause of Action: Application to set aside a market rent review determination under a retail premises lease, involving s 37 and s 52 of the Retail Leases Act 2003 (Vic)

Judgment Date: 14 May 2025

Core Keywords:

Keyword 1: Authentic Judgment Case
Keyword 2: Retail Leases Act 2003 (Vic)
Keyword 3: Specialist retail valuer determination
Keyword 4: Detailed reasons requirement
Keyword 5: Repair and maintenance responsibility
Keyword 6: Net rent versus gross rent error

Background

This proceeding arose from a familiar commercial flashpoint: a tenant exercised an option to renew a long-running hotel lease, which triggered a market rent review. The parties did what retail leasing regimes often require them to do when they cannot agree on rent: they ended up with a specialist retail valuer appointed through the Victorian Small Business Commission process to determine the current market rent. The valuer issued a written determination stating a headline figure for rent. But the landlord said the determination could not be trusted as a binding outcome because it did not transparently explain key assumptions, and it included at least one major internal contradiction about whether the rent was net or gross. The Tribunal was required to decide whether the determination complied with the valuer’s statutory and contractual task, and whether it should remain binding on the parties.

Core Disputes and Claims

Core legal focus: Whether the specialist retail valuer’s market rent determination complied with the valuer’s charter and the statutory requirements of s 37 of the Retail Leases Act 2003 (Vic), including the obligation to provide detailed reasons, such that it could bind the parties as the rent outcome for the renewed term.

Applicant’s claim or relief sought: A declaration that the determination does not bind the parties and should be set aside because it was vitiated by error and or failed to provide detailed reasons as required by s 37(6).

Respondent’s position: The determination should stand and bind the parties, relying on the valuer’s expertise, compliance statements within the determination, and the proposition that some issues were typographical or capable of benign explanation.

Chapter 2: Origin of the Case

The relationship began as a conventional commercial leasing arrangement for hotel premises in South Melbourne. The original lease commenced in 2008, granting a base term followed by multiple options for further terms. Over time, commercial assets and obligations changed hands: the landlord became the registered proprietor in 2011, and the tenant took over the lease interest by assignment in August 2019, stepping into a lease that had already passed through renewal cycles.

Two later deeds of variation altered the practical shape of the bargain, including extending the second renewed term to 19 May 2023 and setting that date as the anchor for the market rent review for the next renewal period. As the option date approached, the statutory machinery under the Retail Leases Act 2003 (Vic) came to the forefront. In November 2022, the landlord gave notice of exercise of option under s 28. Shortly afterwards, the tenant invoked an early rent review process under s 28A, which can accelerate the market rent determination procedure so the parties can know the rent outcome early rather than drifting into uncertainty close to commencement of the renewed term.

A specialist retail valuer was appointed in February 2023. After a lengthy lead time, the determination was sent to the parties on 19 March 2024, determining the market rent as at 19 May 2023 on a gross basis, expressed as AUD $400,000 exclusive of GST.

The conflict foreshadowing was built into the structure of market rent reviews themselves. A rent figure is not just a number; it is the output of assumptions. In hotel leases, repair obligations, outgoings structure, and the practical condition of the building can materially affect what a hypothetical tenant would pay and what a hypothetical landlord would accept. Here, the parties were already in dispute about water ingress into parts of the hotel. Once the determination arrived, the landlord scrutinised the document and said it could not see, in a detailed and intelligible way, how the valuer reached key components of the analysis. The landlord also identified a stark contradiction: the determination concluded the rent was on a gross basis, despite the parties’ common understanding that the lease was net. These became the decisive moments that escalated a commercial disagreement into formal litigation.

Chapter 3: Key Evidence and Core Disputes

Applicant’s Main Evidence and Arguments

The determination document itself, including:
- The rent figure stated as AUD $400,000 per annum exclusive of GST.
- The conclusion stating the rent was on a gross basis, with the lessor responsible for outgoings.
- The internal analysis of profitability and assumed expenses, including a repairs and maintenance expense of AUD $200,000 per annum described as 10.4% of turnover in an EBITDAR-style assessment.
The lease provisions forming the valuer’s charter, including:
- The clause requiring the valuer to consider written submissions and apply s 37(2) criteria of the Retail Leases Act 2003 (Vic).
- The lease’s net structure and the allocation of outgoings to the tenant.
Statutory framework:
- Retail Leases Act 2003 (Vic) s 37, particularly the requirement for detailed reasons and specification of matters considered.
- Retail Leases Act 2003 (Vic) s 52, dealing with landlord responsibilities for maintaining structure, fixtures, plant and equipment, and service-related appliances, fittings and fixtures.
The landlord’s legal submission: the determination was vitiated by error and or failed to comply with the statutory requirement for detailed reasons, particularly because it did not explain how AUD $200,000 repairs and maintenance was derived or reconciled with s 52 and the lease covenants.

Respondent’s Main Evidence and Arguments

Reliance on the determination’s compliance statements, including the valuer stating that the determination was made in accordance with the lease and the Retail Leases Act 2003 (Vic).
Reliance on the valuer’s expertise and role as a specialist retail valuer, arguing that the Tribunal should not readily disturb an expert determination.
Explanation offered for repairs and maintenance:
- The tenant asserted the AUD $200,000 repairs and maintenance figure was calculated by reference to an industry standard percentage of turnover, namely 10.4%.
Explanation offered for gross basis language:
- The tenant argued the gross basis statement was an obvious typographical error.
- The tenant relied on other parts of the determination using the word net in different contexts, suggesting the analysis overall proceeded on a net basis.

Core Dispute Points

Detailed reasons: Whether the determination contained detailed reasons that disclosed the steps of reasoning, rather than simply asserting compliance.
Repairs and maintenance allocation:
- Whether the valuer incorrectly attributed AUD $200,000 per annum repairs and maintenance to the hypothetical tenant without explaining the source, logic, and interaction with statutory and lease responsibilities.
- Whether failure to explain this assumption meant the valuer did not properly apply s 37(2)(a) and (c), and or did not comply with s 37(6)(b).
Rent basis:
- Whether concluding the rent was gross, when the lease was net, amounted to a vitiating error.
- Whether later private email clarification to one party could cure the defect.

Chapter 4: Statements in Affidavits

In a VCAT setting, affidavits are not merely a procedural formality. They are the structured vehicle by which parties assemble the narrative, attach the documents, and define what the tribunal must decide. In rent review challenges, the affidavits commonly do three strategic things.

First, they fix the chronology and identify the triggering contractual and statutory events: option exercise, early rent review request, appointment of a specialist retail valuer, issue of the determination, and subsequent communications.

Second, they translate technical valuation issues into legally reviewable questions: not whether the rent is high or low, but whether the valuer complied with the charter, applied the statutory criteria, and provided detailed reasons.

Third, they highlight specific passages of the determination as the battlefield. Here, the core affidavit contest would naturally centre on:
– The table showing AUD $200,000 repairs and maintenance and the 10.4% proportion.
– The passages asserting compliance with the Retail Leases Act 2003 (Vic).
– The conclusion line describing rent as gross, and the internal references elsewhere to net concepts.

A critical comparison technique for readers is to notice how the same fact can be framed differently:
– The landlord frames the AUD $200,000 as unexplained, possibly inconsistent with statutory repair allocation, and therefore a sign the valuer did not do the mandated reasoning work.
– The tenant frames the AUD $200,000 as an industry-standard assumption, implying it is a normal valuation judgement.

The boundary between untruths and facts in affidavits in cases like this is often not about lying; it is about whether the affidavit can point to where in the determination the reasoning is actually articulated. If the determination does not show the reasoning, an affidavit saying there must have been an industry standard operating in the valuer’s mind cannot substitute for the statutory requirement that the determination itself disclose the steps.

Strategic Intent Behind Procedural Directions Regarding Affidavits

Procedural directions in a determination challenge are designed to compress the dispute into a manageable set of review questions. The Tribunal needs a clean record: the lease and statutory framework, the determination, the parties’ submissions to the valuer if relevant, and a clear articulation of what is said to be wrong. Affidavits also serve to prevent later movement of the goalposts. In this matter, directions would predictably aim to ensure:
– The grounds of challenge are particularised.
– The exact determination document is exhibited.
– Parties do not attempt to reconstruct reasons after the event through oral evidence that was not contained in the determination.

Chapter 5: Court Orders

Before the final hearing, the Tribunal’s procedural arrangements in a matter of this kind commonly include:
– Orders requiring the filing and service of witness statements or affidavits.
– Orders requiring the production of the lease, deeds of variation, and the valuation determination.
– A timetable for written submissions identifying statutory provisions relied upon, including s 37 and s 52 of the Retail Leases Act 2003 (Vic).
– Listing for a hearing to determine validity of the determination and, if necessary, directions for any subsequent steps concerning rent review.
– Orders reserving costs and setting a deadline for costs applications after the substantive decision, reflecting that costs are not automatic and must be pursued by application.

Chapter 6: Hearing Scene: Ultimate Showdown of Evidence and Logic

The hearing posture was not a valuation merits review. The Tribunal’s function was to decide whether the determination was legally and contractually valid within the framework governing expert determinations and the specific statutory overlay of the Retail Leases Act 2003 (Vic).

Process Reconstruction: Live Restoration

In the forensic exchange, the landlord’s strategy would be to keep pulling the Tribunal back to a simple point: show the steps. For each contested assumption, the landlord would press: where does the determination explain how the figure was derived, and how does it reconcile lease obligations with statutory obligations? Any cross-examination or adversarial testing would focus on the text of the determination itself, because the Tribunal was examining whether the determination answers the contractual description of what the expert was required to determine.

The tenant’s strategy would be to emphasise the expertise of the specialist valuer and to argue that the Tribunal should be slow to upset a commercial rent determination absent fraud, collusion, or a mistake taking the determination outside the parties’ contemplation. The tenant would attempt to show that the determination, read as a whole, conveyed enough to understand the rent basis, and that any gross wording was accidental.

Logical inconsistencies emerged at two points.

First, the repairs and maintenance expense: the determination included a precise number and percentage, but did not show the reasoning chain that explains its source, why that percentage is appropriate, and how it interacts with s 52 repair obligations and lease covenants.

Second, the rent basis: the determination concluded the rent was gross, even though the lease was net. The tenant’s effort to treat this as a harmless template remnant created a credibility problem of a different kind: if the conclusion uses the wrong rent structure, the parties cannot safely assume the valuer’s output is actually the rent they agreed to have determined.

Core Evidence Confrontation

The most decisive evidence was the determination’s own content. The Tribunal did not need to choose between competing valuation philosophies; it needed to decide whether the determination, on its face, complied with s 37 and the charter.

The confrontation over repairs and maintenance became decisive because:
– It was a material figure.
– It was expressed as an adopted expense in a profitability assessment.
– It interacted with a live dispute about water ingress, which the valuer said should be resolved between the parties rather than by adjusting rent, while still embedding a large repairs and maintenance expense without transparent explanation.

The confrontation over gross versus net became decisive because:
– The lease was net, agreed by both parties.
– The determination stated gross at the critical conclusion section where rent is being set.
– A private email to one party almost a year later purported to correct gross to net, but it was not part of the determination and was not provided as a formal supplement.

Judicial Reasoning: How Facts Drove the Result

The Tribunal applied established principles about when expert determinations can be set aside and combined them with the statutory command that a specialist retail valuer must provide detailed reasons. The Tribunal treated the statutory requirement as not optional and not satisfied by broad compliance assertions. The Tribunal held that the determination must disclose the reasoning steps and specify the matters to which the valuer had regard.

It is clear that it is not sufficient for a valuer to leap to a judgment: the valuation must disclose the steps of reasoning.

This proposition was determinative because it explains why the landlord’s challenge did not depend on proving the correct rent. Instead, the landlord succeeded by showing that the determination did not transparently reveal how it arrived at key conclusions, and therefore did not comply with the statutory and contractual task.

Chapter 7: Final Judgment of the Court

The Tribunal made declarations and orders that the determination was set aside and did not bind the parties. The Tribunal also reserved costs and directed that any application for costs must be made by 6 June 2025, with any such application to be referred to Senior Member Forde for further directions.

Chapter 8: In-depth Analysis of the Judgment: How Law and Evidence Lay the Foundation for Victory

This chapter disassembles the Tribunal’s logic using the required sequence:
Special Analysis → Judgment Points → Legal Basis → Evidence Chain → Judicial Original Quotation → Analysis of the Losing Party’s Failure.

Special Analysis

This decision illustrates an important and sometimes counter-intuitive feature of retail lease market rent review regimes. Parties often assume that once a specialist valuer has spoken, the number is final unless you can prove fraud or an extreme blunder. That assumption is incomplete. Where Parliament requires detailed reasons, the determination becomes more than a number: it must be an intelligible reasoning product that allows parties to understand how statutory criteria and the lease were applied.

The case also exposes a practical commercial risk: template-based valuation reports can create legal vulnerability. If a determination includes a template remnant that contradicts the lease structure, it can move from a minor drafting issue to a vitiating error, because it goes to whether the determination answers the contractual description of what the expert was required to determine.

Finally, the case shows that disputes about repair obligations are not merely operational conflicts; they can directly affect market rent assumptions and therefore must be handled with clarity when included in valuation modelling. When a valuation includes a significant repairs and maintenance expense, the determination must explain how that expense sits with statutory repair responsibilities and lease covenants. Silence is not neutrality; silence is non-compliance with the detailed reasons requirement.

Judgment Points

The Tribunal framed the review question correctly: validity, not correctness.
The Tribunal asked whether the determination complied with the charter and statute, not whether AUD $400,000 was the objectively correct market rent.
The valuer’s charter mattered and was identified with precision.
The charter came from the lease clause requiring the valuer to determine current market rent as an expert, considering submissions, and applying s 37(2) matters of the Retail Leases Act 2003 (Vic).
The detailed reasons obligation had real teeth.
The Tribunal treated s 37(6) as requiring the determination to disclose the steps of reasoning and specify matters considered, not merely to recite statutory phrases or assert compliance.
A material unexplained assumption can be an error capable of vitiating a determination.
The repairs and maintenance assumption was not a trivial line item; it was large, expressed as a precise amount and percentage, and central to the rent modelling. The Tribunal found the reader could not be satisfied of the reasoning behind the figure.
A misstatement of rent basis can be a vitiating error, even if other parts of the document suggest the correct basis.
The conclusion section stating gross basis was decisive. The Tribunal held that earlier net references did not cure the defect because they did not squarely address the rent structure that the valuer was required to determine.
Private post-determination communications could not cure the defect.
A later email to the tenant claiming gross should have read net was not part of the determination, not a supplementary report, and not a formal clarification, and therefore could not be treated as amending the binding product.
The Tribunal did not need to decide all grounds once vitiating error was found.
Having found the determination vitiated on grounds 1 and 2, the Tribunal did not need to consider the remaining shortcomings ground.

Legal Basis

Retail Leases Act 2003 (Vic) s 37:
– Defines the mechanism for market rent review and specifies what the current market rent is taken to be, including having regard to the provisions of the lease, the rent reasonably expected if the premises were unoccupied but offered for the same or similar permitted use, the landlord’s outgoings to the extent the tenant contributes, and rent concessions and benefits for prospective tenants.
– Excludes goodwill and tenant fixtures and fittings from the market rent calculation.
– Requires the specialist retail valuer to take into account the s 37(2) matters and to provide a written determination with detailed reasons and specification of matters to which the valuer had regard.

Retail Leases Act 2003 (Vic) s 52:
– Implies a covenant that the landlord is responsible for maintaining, consistent with the condition at lease commencement, the structure and fixtures, plant and equipment, and service-related appliances, fittings and fixtures provided under the lease.

Expert determination principles applied in a retail lease context:
– A determination may be set aside where there has been fraud, collusion, or a mistake showing the valuation is not in accordance with the contract.
– Error review depends on whether the determination answers the contractual description of the task, and whether the error takes the determination beyond what the parties can be supposed to have intended to be final and binding.

Evidence Chain

Victory Point 1: Pinning the Tribunal to the document, not assumptions about expertise
Evidence: The determination contained compliance statements but did not explain the AUD $200,000 figure’s derivation or its interaction with s 52 and lease covenants.
Law: s 37(6) requires detailed reasons and matters considered.
Conclusion: If the determination does not disclose the reasoning steps, it fails the statutory standard.

Victory Point 2: Treating the AUD $200,000 repairs and maintenance line as a legal fault line
Evidence: The determination adopted AUD $200,000 repairs and maintenance at 10.4% of turnover in a profitability assessment.
Law: s 37 requires regard to lease provisions and outgoings; s 52 allocates certain repair responsibilities to the landlord; the valuer must show what was taken into account and why.
Conclusion: Unclear sourcing and unclear reconciliation with statutory and lease responsibilities amounted to vitiating error.

Victory Point 3: Neutrality about a live repair dispute does not excuse an embedded expense assumption
Evidence: The valuer stated the water ingress dispute should be resolved between parties rather than by adjusting rent, yet still embedded a large repairs and maintenance expense.
Law: Detailed reasons obligation requires explanation of how repair responsibilities were treated in the modelling.
Conclusion: The determination left the reader wondering and therefore failed the detailed reasons standard.

Victory Point 4: The gross basis statement went to the heart of the charter
Evidence: The determination concluded rent was on a gross basis; parties agreed the lease was net; the determination itself noted net structure elsewhere.
Law: The valuer’s charter required a net basis determination consistent with the lease and s 37(2)(c) regarding outgoings to the extent of tenant contribution.
Conclusion: Stating gross at the decisive conclusion was an error in the task outcome and vitiated the determination.

Victory Point 5: Rejecting informal repair of the determination by private email
Evidence: A later email to one party claimed gross should have been net, attributed to a template oversight, and was not shared as part of a formal supplementary report.
Law: The binding product is the determination itself; a non-formal communication cannot retrospectively change the determination’s content for both parties.
Conclusion: The defect remained uncured.

Victory Point 6: Using authority to frame what detailed reasons require
Evidence: The determination did not explain why an industry standard percentage was used, did not cite it, and did not show the reasoning steps.
Law: Authorities state the valuation must disclose steps of reasoning and cannot leap to a conclusion; the statute requires more than sufficient reasons.
Conclusion: The statutory requirement was not met.

Victory Point 7: Keeping the Tribunal within the permissible review lane
Evidence: The landlord did not need to prove an alternative rent; it proved non-compliance and error within the charter.
Law: Review is available where the determination fails to answer the contractual description and statutory requirements.
Conclusion: The Tribunal could set aside without re-valuing.

Victory Point 8: Strategic narrowing once vitiating error was established
Evidence: The Tribunal did not proceed to consider other shortcomings once core defects were found.
Law: A decision-maker need not decide unnecessary issues once dispositive grounds are resolved.
Conclusion: Efficient resolution avoided collateral disputes.

Judicial Original Quotation

The Determination must show what was and what was not taken into account and why.

This statement was determinative because it captures the legal minimum for a specialist retail valuer’s written product under the Retail Leases Act 2003 (Vic). It is not enough that the valuer is qualified or that the number seems plausible; the determination must reveal the reasoning chain so parties can understand how statutory criteria and lease obligations were applied.

Analysis of the Losing Party’s Failure

The respondent’s defence was structurally weak in three ways.

First, it attempted to substitute expertise for explanation. Relying on the valuer’s status and a compliance statement did not meet the statutory requirement for detailed reasons.

Second, it tried to fill gaps in the determination with after-the-fact narrative, such as asserting that AUD $200,000 was an industry standard percentage of turnover. The problem was not whether industry standards exist; the problem was that the determination did not explain, within its own text, how and why that standard was used and how it sat with statutory and lease repair responsibilities.

Third, it attempted to cure a major defect by private email. The Tribunal treated this as incapable of amending the determination because it was not part of the determination, not a supplement, and not a formal clarification provided to both parties.

Implications

If you are a tenant or landlord, treat a market rent determination like a building inspection report: you need to see the reasoning, not just the conclusion. A number without a pathway is hard to rely on and harder to challenge intelligently.
When repairs and maintenance are a live dispute, do not assume the valuer can park the dispute to one side while still embedding large repair assumptions. The determination must show how statutory repair responsibilities and lease covenants were applied.
Template mistakes are not harmless when they alter the structure of the bargain. A single word like gross can change who pays outgoings and can destabilise the validity of the outcome.
If you want to challenge a determination, focus your case on the valuer’s charter and statutory obligations, not on arguing about fairness. Courts and tribunals are more persuaded by demonstrated non-compliance than by dissatisfaction.
If you want to preserve the determination, insist on formal corrective mechanisms. Informal emails and private explanations tend to be high risk because they do not become part of the binding written determination for both parties.

Q&A Session

Q1: Does this decision mean a party can always set aside a market rent determination if it seems brief?
A: Not always. The pathway is relatively stronger where legislation requires detailed reasons and the determination fails to disclose steps of reasoning on material assumptions. A brief determination can still be valid if it clearly explains what was considered and how the conclusion was reached.

Q2: Why did the gross versus net wording matter so much if the determination used net language elsewhere?
A: The decisive point is the conclusion where rent is actually determined. If the determination states a rent basis inconsistent with the lease, the output may fail to answer the contractual description of the task, and earlier references may not cure that contradiction.

Q3: If a valuer realises they made a template mistake, can they fix it?
A: A correction tends to be safer when issued as a formal supplementary determination or clarification that becomes part of the valuation product and is provided to both parties, rather than as a private email to one party.

Appendix: Reference for Comparable Case Judgments and Practical Guidelines

1. Practical Positioning of This Case

Case Subtype: Retail Lease, Market Rent Review, Application to Set Aside Specialist Valuer Determination for Failure to Provide Detailed Reasons and Error in Rent Basis

Judgment Nature Definition: Final Judgment

2. Self-examination of Core Statutory Elements

This case belongs to Property, Construction and Planning Law in the sense that it concerns a leasehold interest, rent setting, outgoings structure, and repair responsibility allocation under a statutory retail leasing regime.

Core Test Standards to Self-check in Similar Matters, for reference only and to be applied to the specific facts of the case:

######1. Statutory Charter Identification
– Identify whether the lease is a retail premises lease and whether the relevant retail leasing statute applies.
– Identify the rent review mechanism and whether it is market rent based.
– Identify whether the statute deems specific terms into the lease for market rent review, including detailed reasons obligations and the matters the valuer must have regard to.

######2. Current Market Rent Criteria Application
– Confirm the valuer must have regard to the provisions of the lease.
– Confirm the valuer must have regard to the rent reasonably expected if the premises were unoccupied but offered for the same or substantially similar permitted use.
– Confirm the valuer must have regard to landlord outgoings to the extent the tenant is liable to contribute.
– Confirm the valuer must have regard to rent concessions and benefits offered to prospective tenants.
– Confirm the valuer must not take into account goodwill created by the tenant’s occupation or the value of the tenant’s fixtures and fittings.

######3. Detailed Reasons and Matters Considered
– Confirm whether the statute requires the determination to contain detailed reasons and to specify the matters to which the valuer had regard.
– Check whether the determination explains the steps of reasoning rather than merely asserting conclusions.
– Check whether material assumptions are explained, including the source of adopted figures and how statutory and lease responsibilities were treated.

######4. Repairs and Maintenance Responsibility Allocation
– Identify statutory maintenance obligations imposed on the landlord and their scope.
– Identify the lease clauses imposing cleaning, minor repair, refurbishment, and compliance obligations on the tenant.
– Compare how the determination treats these obligations, particularly if the determination includes significant repairs and maintenance expenses in modelling.

######5. Rent Basis Consistency
– Confirm whether the lease is net or gross.
– Confirm whether the determination’s conclusion matches the lease structure on outgoings responsibility.
– Treat internal contradictions as high risk because they can undermine whether the determination answers the contractual description of the task.

######6. Challenge Threshold for Expert Determinations
– Consider whether the alleged mistake or omission demonstrates that the determination was not made in accordance with the parties’ agreement and statutory charter.
– Distinguish dissatisfaction with the rent amount from non-compliance with the charter and statutory requirements.
– Treat fraud and collusion as special categories but recognise that error can still be relevant where it takes the determination outside contractual contemplation.

3. Equitable Remedies and Alternative Claims

In retail lease disputes, statutory pathways often dominate, but equity and common law doctrines can remain relevant, particularly where statutory mechanisms do not fully resolve the commercial harm.

Promissory or Proprietary Estoppel
– Consider whether one party made a clear and unequivocal representation about rent, repair responsibility, or renewal terms, such as an assurance that certain capital works would be undertaken by the landlord, or that rent would not exceed a particular range.
– Consider whether the other party relied on that representation to their detriment, such as committing to refurbishment, staffing, or business expansion based on the renewal expectation.
– Consider whether it would be unconscionable for the representor to resile from the representation.
– Practical note: Estoppel claims tend to be fact-heavy and relatively high risk if the representation is vague or if reliance is not clearly evidenced.

Unjust Enrichment or Constructive Trust
– Consider whether one party received a benefit at the other’s expense, such as the tenant funding structural repairs that were arguably the landlord’s statutory responsibility, or the landlord receiving value uplift without accounting.
– Consider whether retention of that benefit is against conscience in the circumstances.
– Consider restitutionary relief or declarations of beneficial interest where the facts support it.
– Practical note: These claims tend to be determined by careful analysis of the lease terms, statutory repair obligations, and the factual record of expenditure and benefit.

Procedural Fairness Style Arguments in Statutory Processes
– Where the dispute involves an appointed expert under a statutory regime, focus on whether the process and output complied with the mandated reasoning requirements.
– The principle is not abstract fairness; it is compliance with the statutory conditions that make the determination binding.

4. Access Thresholds and Exceptional Circumstances

######Regular Thresholds
– Retail lease market rent review disputes tend to require a lease that triggers market rent review and engages the statutory scheme.
– Challenges tend to require identification of a charter breach: failure to consider mandatory matters, failure to provide detailed reasons, or an error that demonstrates the determination was not made in accordance with the agreed and statutory task.
– Costs applications often have strict filing deadlines set by the tribunal after judgment, and missing them can be relatively high risk for recovery of costs.

######Exceptional Channels
– Where the determination is internally contradictory on a structural feature such as net versus gross rent, a challenge tends to be stronger because the defect goes to whether the determination answers the contractual description of the task.
– Where the determination embeds a material assumption without revealing the reasoning steps, a challenge tends to be stronger in jurisdictions where the statute mandates detailed reasons.
– Where a party seeks to cure defects after the event by informal communications rather than formal supplementary determination provided to both parties, that curing attempt tends to be treated as unreliable.

######Suggestion
Do not abandon a potential challenge simply because the rent figure seems commercially plausible. If the determination does not show how it applied the statutory matters and lease provisions, and if it contains material contradictions, those features can be decisive. Carefully compare your circumstances against the statutory requirements and the determination’s actual text.

5. Guidelines for Judicial and Legal Citation

######Citation Angle
It is recommended to cite this case in legal submissions or debates involving:
– The meaning and operational force of detailed reasons requirements for specialist retail valuer determinations under retail leasing legislation.
– Challenges to expert determinations where the alleged error demonstrates the determination is not in accordance with the charter.
– Net rent versus gross rent errors and their impact on the validity of rent determinations.

######Citation Method
As Positive Support: When your matter involves a specialist retail valuer’s determination that fails to explain material assumptions or contains internal contradictions, citing this authority can strengthen an argument that the determination does not comply with statutory and contractual requirements and can be set aside.

As a Distinguishing Reference: If the opposing party cites this case, you should emphasise the uniqueness of your determination, such as the presence of clear step-by-step reasoning, correct rent basis, and explicit reconciliation of repair obligations, to argue that the precedent is not applicable.

######Anonymisation Rule
In submissions and summaries, use procedural titles such as Applicant and Respondent and avoid party names.

Reference to Comparable Authorities

Legal and General Life of Australia Ltd v A Hudson Pty Ltd (1985) 1 NSWLR 314
Ratio summary: Expert determinations are generally final unless fraud, collusion, or a mistake shows the determination was not made in accordance with the contract.

AGL Victoria Pty Ltd v SPI Networks (Gas) Pty Ltd [2006] VSCA 173
Ratio summary: Review on the ground of error depends on whether the determination answers the contractual description of what the expert was required to determine, and whether the error takes the determination beyond what parties can be supposed to have intended to be final and binding.

Redgum Developments Pty Ltd v G8 Education Ltd [2020] VSC 142
Ratio summary: Illustrates the contemporary application of the charter-based approach to challenging expert determinations, focusing on whether the determination complies with the task entrusted.

Bevendale Pty Ltd v Lucky Eights Pty Ltd [2020] VSCA 312
Ratio summary: Confirms that the permissibility of review depends on the charter and whether the alleged error demonstrates a failure to do the task contemplated as final.

Higgins Nine Group Pty Ltd v Ladro Greville St Pty Ltd [2016] VSC 244
Ratio summary: Explains that detailed reasons require more than sufficient reasons and must disclose the steps of reasoning; the valuer must actually deal with how statutory matters were considered.

Adwell Holdings Pty Ltd v Bourne (2007) NSW ConvR 56-188
Ratio summary: Detailed reasons require the evaluator to set out details as to how the determination was reached and to explain how the statutory matters were considered, not merely to recite them.

756 Glenferrie Road Pty Ltd v Mountford Shoes Pty Ltd (Retail Tenancies) [2013] VCAT 640
Ratio summary: The determination must show what was and what was not taken into account and why, enabling parties to understand the basis of the determination.

Commonwealth of Australia v Wawbe Pty Ltd & Pinebark Park Pty Ltd [1998] VSC 82
Ratio summary: Provides an analytical framework for determining whether a mistake is of a kind demonstrating the valuation was not made in accordance with the contract and therefore does not bind the parties.

######Conclusion

This case demonstrates a simple but powerful lesson: in statutory retail lease rent reviews, a market rent determination must be more than a number. It must be a transparent reasoning document that shows how the valuer applied the lease, applied the statute, and arrived at key assumptions. When the determination leaves parties wondering where a material figure came from, or when it contradicts the lease on net versus gross structure, it risks being set aside as non-compliant and erroneous.

Everyone needs to understand the law and see the world through the lens of law. The in-depth analysis of this authentic judgment is intended to help everyone gradually establish a new legal mindset: True self-protection stems from the early understanding and mastery of legal rules.

Disclaimer

This article is based on the study and analysis of the public judgment of the Victorian Civil and Administrative Tribunal, Building and Property List (Applicant v Respondent (Building and Property) [2025] VCAT 436), aimed at promoting legal research and public understanding. The citation of relevant judgment content is limited to the scope of fair dealing for the purposes of legal research, comment, and information sharing.

The analysis, structural arrangement, and expression of views contained in this article are the original content of the author, and the copyright belongs to the author and this platform. This article does not constitute legal advice, nor should it be regarded as legal advice for any specific situation.

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