How to Resolve a Retail Lease Dispute in New South Wales

Disputes can arise at any point during the term of a retail lease or after its expiration. Retail Leases in New South Wales (NSW) are subject to a dispute resolution procedure set out in the Retail Leases Act 1994 (NSW) (the Act). We set out below the procedure that parties must adhere to when resolving a dispute. 

Negotiation

Direct negotiation can be a practical and cost-effective approach for both parties as they are most familiar with the facts and can retain control over the process. Negotiation can be formal or informal. However, it’s helpful to give the negotiation some structure and for each party to provide position statements as well as the outcome they are seeking. 

Mediation

Parties should mediate a retail lease dispute before making an application to the NSW Civil and Administrative Tribunal (NCAT) or a court. 

Either party can arrange for mediation by referring the dispute to the NSW Small Business Commissioner, who acts as the Registrar for Retail Tenancy Disputes under the Retail Leases Act. Parties share the cost of mediation equally or as otherwise agreed. 

Mediation is a formal dispute resolution process that takes place outside of court. It involves the parties meeting, in a confidential setting, to discuss the dispute and attempt to reach a suitable outcome.

The mediator facilitates this meeting by providing both parties with the opportunity to explain their position. She or he will ask follow-up questions, help explore possible options and clarify the issues in dispute. The mediator does not, however, make a decision – instead, the parties must agree on a resolution. It’s a good idea to put the resolution in writing and have both parties sign. This ensures that the terms of the agreement are clear and helps parties formalise the agreement later if necessary.

Apply to NCAT

The NCAT deals with retail lease disputes in its consumer and commercial division. A party must meet the threshold requirements set out by the Act to make an application to NCAT:

• A certificate from the NSW Small Business Commissioner must accompany the application stating either:
  • mediation was unsuccessful, or
  • mediation was unlikely to resolve the dispute. 
• The application must be either:
  • a retail tenancy claim,
  • or an unconscionable conduct claim.
• The conduct that is the subject of the claim must have taken place within the last three years; and
• The claim cannot exceed $400,000. 

NCAT does not follow all of the strict procedural rules of a court. Also, lawyers do not have an automatic right to represent their clients at NCAT. Rather, a party must request this and the tribunal grants permission.

Initiate Court Proceedings

Courts rarely deal with retail lease disputes. In fact, the Act states that as a general principle, the Tribunal (i.e. NCAT) and not a court should address these issues. 

When a party makes an application to another court relating to a retail lease dispute, the court must transfer the matter to the Tribunal unless it’s convinced it is in the ‘interests of justice’ to hear the matter. However, making an application to the court may be necessary in certain circumstances. For example, where a party requires an urgent court order preventing the other party from taking certain action, such as terminating the lease (also known as urgent interlocutory relief).

Key Takeaways

When parties to a retail lease dispute can’t resolve the matter among themselves, they will ordinarily be required to attempt mediation before applying to NCAT for a hearing. If you have any questions about your options or need assistance preparing your application, get in contact with LegalVision’s dispute resolution lawyers on 1300 544 755.