23/01/2008
Watch Your Space !!!

Westfield settles on dispute over 2.7sq m

Author: Tina Perinotto
Date: 19/02/2003 20:25:45
Words: 580
Publication: The Australian Financial Review
Section: Property
Source: AFR

The area under dispute could be as little as 2.7 square metres. Yet a hearing over a card and gift shop's tiny lease in a suburban North Rocks shopping centre in Sydney brought Westfield's powerful legal contingent out in force yesterday.

Barrister Robert Angyal, with considerable experience in tenancy matters, was assisted with a bevy of support and backed by a trolley-load of legal documents at the Administrative Decisions Tribunal.

The case was in its second day of a three-day hearing before tribunal member Robert Fox.

At stake for the tenant, Topaz Cards and Gifts, was what it alleged amounted to several thousand dollars a year in overpaid rent, outgoings and other costs charged since its lease started with Westfield in 1988.

Topaz believes it was paying rent for 2.67 sq m of space more than it actually occupied.

On the basis of average rental costs of about $1500 a sq m plus average outgoings of $300 a sq m a year, this would add up to about $70,000 - a sizeable amount for the husband and wife team who ran the shop, Allan and Sandra Burrows.

For Westfield, a $7.4 billion company, it might seem barely worth the trouble.

Topaz had alleged that Westfield had overshot the mark by about 2.7 sq m by including in the tenancy measurement the area beneath a bulkhead that protruded above the opening of the shop.

"The difference is a GLA [gross lettable area] of 2.7 sq m" an advocate for the tenant said.

Mr Burrows said he discovered the discrepancy on January 23 last year when he commissioned a survey by John Watson of Watson Buchan surveyors, following disagreements during discussions to renew the lease with Westfield.

"Prior to this we had no knowledge" Mr Burrows said.

Yesterday, however, the hearing was adjourned moments before the expert witnesses were to be called.

Mr Fox was subsequently informed the two parties had reached a confidential agreement and the matter was to be dropped.

Tenant advocacy sources told The Australian Financial Review there had been "scores" of such cases with shopping centre owners and small retailers and in each instance involving Westfield the issue had been settled out of court.

Tenant consultant Peter McAuley, of Victorian-based Lease Police, advised the Burrows. A spokesman from his office said there were four other disputes currently under way over similar issues in other NSW centres.

Lawyer Paul Tiernan of Hunt and Hunt, who handled retail disputes on behalf of tenants, said that most large retail tenants would routinely engage surveyors to check space, but that smaller retailers normally did not check measurements.

Accepted industry standards on measurement was from the centre of a shared wall to the centre of another shared wall and from the inner surface of any other wall or window, said Mr Tiernan. It would not normally include the area beneath a bulkhead.

Another retail specialist lawyer Sebastian Dimarco of Delaney Dimarco whose clients include large retail chains said his clients would routinely engage surveyors to check lease measurements.