A Ministerial Determination dated 12 August 2016 made pursuant to Section 5(1)(d) of the Retail Leases Act 2003 (Act) was published in a Special Gazette last week. The Ministerial Determination was made in response to the increasing uncertainty surrounding the application of section 4(2)(d) of the Act which excludes from the definition of "retail premises" and therefore the Act "premises the tenant of which is – a body corporate whose securities are listed on a stock exchange, outside Australia and the external territories, that is a member of the World Federation of Exchanges". Section 4(2)(d)(ii) also excludes subsidiaries of such bodies corporate.
The fluctuating membership of the World Federation of Exchanges and the uncertain status of stock exchanges who are not members of the World Federation of Exchanges in their own right but are subsidiaries of member exchanges has posed an ongoing problem in determining the application of the Act. The Ministerial Determination dated now operates to exclude from the Act premises the tenant of which is a body corporate listed on a Stock Exchange outside of Australia or a subsidiary of such a body corporate.
Holding Redlich first raised concerns about the fluctuating membership of the World Federation of Exchanges with the Shopping Centre Council of Australia in 2011 when we became aware that the New Zealand Stock Exchange had resigned its membership. After lobbying by the Shopping Centre Council of Australia the Ministerial Determination dated 20 December 2011 was made which excluded from the operation of the Act leases to tenants who are companies whose securities are listed on the New Zealand Stock Exchange or tenants who are subsidiaries of such companies. Ironically, the New Zealand Stock Exchange has subsequently re-joined the World Federation of Exchanges. The latest Ministerial Determination revokes the 2011 Ministerial Determination.
In early 2015 we alerted the Shopping Centre Council of Australia to the resignation of the London Stock Exchange and the uncertain status of stock exchanges who are not members of the World Federation of Exchanges in their own right but are subsidiaries of member exchanges such as New York Stock Exchange. The outcome of this was that a number of major tenants, including McDonalds, had the protection of the Act which was clearly contrary to the policy objectives of the Act.
The Ministerial Determination dated 12 August 2016 finally addresses the problems associated with the practical application of Section 4(2)(d) of the Act which means that landlords and tenants can negotiate lease terms with certainty. A copy of the Ministerial Determination can be found here.
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