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BUSINESS SEEKS INJUNCTION FROM EVICTION CITING VICTORIAN COVID REGULATIONS

Yarraville Business Pty Ltd v Persico (Building and Property) [2021] VCAT 213 (12 March 2021)

This is an application by the applicant-tenant for an injunction to enjoin the respondent landlord from terminating the lease. The court here answers the issue of whether the tenant-applicant has protection from eviction under the  COVID-19 Omnibus (Emergency Measures) (Commercial Leases and Licences) Regulations 2020.

Facts:

The case involves premises in Somerville Road, Yarraville (the  Premises) which were the subject of the lease made between Yarraville Business Pty Ltd (Yarraville) as tenant and Maria Persico, Mr Faustino Persico (Mrs Persico’s late husband) and Giovanna Staffieri as landlords.

Like so many other retail tenants, Yarraville ran into headwinds when the COVID-19 pandemic struck. On or about 5 November 2020, Mrs Persico served a notice of breach asserting that Yarraville had failed to pay rent due of $15,253.32.

On 3 December 2020, Mrs Persico purported to terminate the lease by re-entering the premises, fixing a notice of re-entry to the front of the premises and changing the locks. Yarraville contends that the re-entry is unlawful.

Yarraville came to the Tribunal seeking an order to enable it to re-enter. The Tribunal asked for submissions because it relates to the interrelationship between the COVID-19 Omnibus (Emergency Measures) (Commercial Leases and Licences) Regulations 2020,  S.R. No 31/2020  made on 1 May 2020 (the  Principal Regulations) and the COVID-19 Omnibus (Emergency Measures) (Commercial Leases and Licences) Regulations 2020,  S.R.No 107/2020  made 29 September 2020 (the Amended Regulations).

The objectives stated in Regulation 1 of the Principal Regulations are to implement temporary measures to apply to tenants and landlords under certain eligible leases to mitigate the effects of measures taken in response to the COVID-19 pandemic and to implement dispute resolution mechanisms concerning eligible leases. A central feature of the regime is that a tenant under an eligible lease is entitled to avail itself of rent relief, and may in some circumstances be entitled to protection from eviction.

Yarraville’s primary argument for the granting of the injunction is that prior to 29 September 2020 it had done everything it needed to do under Regulation 10 of the Principal Regulations to enliven its entitlement to rent relief and that it had accordingly become entitled to the benefit of the moratorium against eviction available to commercial tenants under Subregulation 9(2).

The application for an injunction is opposed by Mrs Persico essentially on two grounds. The first is that no valid application for rent relief was made prior to 29 September 2020, and accordingly no entitlement to protection from eviction arose under the Principal Regulations.

Mrs Persico’s second argument is based on the operation of the Amended Regulations. She contends that even if Yarraville validly made an application for rent relief under the Principal Regulations, the benefit of the protection created by the Principal Regulations expired on 29 September 2020, and that in order to have protection from eviction under the Amended Regulations a new application had to be made. As none was made, Yarraville is no longer protected from eviction.

Issue: Should the court grant the injunction/ Is Yarraville protected from eviction?

Law:

Analysis:

The imposition upon a tenant by the September Amendments of a requirement to provide the information mandated by Regulation 10 as amended when making an application for rent review after 29 September 2020 does not necessarily mean that a new application has to be made.

Where a subordinate instrument is amended, the amendment shall not, unless the contrary intention expressly appears, affect the previous operation of that subordinate instrument nor affect any right or privilege acquired, accrued or incurred under that subordinate instrument nor affect any remedy in respect of any such right or privilege, and any such remedy may be instituted, continued or enforced as if that subordinate instrument or provision had not been amended.

The clear effect of S.28 of the Interpretation of Legislation Act 1984 is to protect a right that has been acquired under the subordinate instrument prior to its amendment. The court accordingly finds that Yarraville is entitled to the continued protection of the moratorium against eviction to which it had become entitled under Subregulation 9(2) of the Principal Regulations, even after the September Amendments came into operation.

Conclusion: Yarraville’s argument is sustained. Yarraville did not have to make a fresh application for review after 29 September 2020 in order to continue to enjoy protection from eviction under Subregulation 9(2) of the Principal Regulations.

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