Eureka Funds Management Limited & Anor v Freehills Services Pty Ltd

[2008] VSCA 156

Victorian Court of Appeal

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For Australian Law.

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Interrogate

Catchwords

1. Landlord and Tenant
2. › Lease
3. › Rent review provisions
4. › Interpretation of rent review clause
5. › Whether 'current annual market rental' and 'current annual market rental value' synonymous
6. › Face rent versus effective rent
7. › Role of incentives in rent determination
1. Contract
2. › Construction and interpretation
3. › Commercial leases
4. › Use of different expressions in same instrument
5. › Presumption that different words bear different meanings
6. › Commercially sensible construction
1. Landlord and Tenant
2. › Lease
3. › Expert determination
4. › Valuer appointed under lease
5. › Whether determination made in accordance with lease
6. › Validity of expert determination
7. › Non-compliance with contractual description of task

Quick Take

Where a commercial lease uses both 'current annual market rental' and 'current annual market rental value' in its rent review provisions, the expressions should not be treated as synonymous. 'Rental value' connotes an assessment of the true or effective rent taking account of incentives and inducements, while 'rental' without 'value' connotes the face rent. A valuer who treats the expressions as synonymous and conducts an effective rent review where a face rent review is required has not complied with the contractual description of the task and the determination is invalid. The precise methodology for a 'face rent' review under such provisions remains to be determined.