Landlord wins in fight with deed administrator

Who’d be a landlord? That’s the question that came to mind as iNO read about Centuria Property Funds No 2 Limited (CCPF) in its battle with a tenant who didn’t pay which then became a battle with the insolvency practitioner appointed the day after the tenant failed to comply with a court ordered deadline for payment to CCPF of $1,037,289.31c.

“Regardless of the prism through which Centuria’s interests are to be assessed, they are not adequately protected by the terms proposed by the deed administrator.” Justice Michael Osborne.

Much to CCPF’s undoubted frustration, Hamilton Murphy Partner Stephen Dixon has turned out to be as uncooperative as his appointor by refusing to pay sums agreed in a licensing arangement; refusing to vacate CCPF’s cold storage facility in Keysborough, Victoria and refusing CCPF and its agents access to the facility.

In Vincent Cold Storage Pty Ltd v Centuria Property Funds No 2 Limited (No 2) [2023] VSC 314 we learn that Dixon has a DoCA to effectuate and being forced to vacate the facility would very likely extinguish any likelihood of that.

According to CCPF the DoCA – which it voted against – was proposed on the understanding that the company would find an alternate cold storage venue so CCPF could install a new tenant.

The DoCA requires the enterprise to continue in operation. In evidence put before the court Dixon described the near impossibility of finding alternative cold storage anywhere in Victoria for the thousands of pallets worth of perishable goods Vincent Cold Storage Pty Ltd (VCS) has in its possession at Keysborough, many of which are owned by third parties.

Whilst that evidence of scarcity was contradicted without corroboration by the Vincent director’s son, Christopher Vincent, the judgment was concerned with determining CCPF’s application for orders for possession of its own property and whether Dixon had made the case that CCPF’s interest would be protected by maintaining the status quo, something CCPF argued would only be achieved if it was paid all arrears upfront. Justice Osborne wasn’t having it.

“VCS was aware on 13 December 2022 that its application for injunctive relief restraining Centuria from taking possession had been dismissed and that its application for relief against forfeiture required it to remedy the outstanding arrears, comply with the Lease for the period from November 2022 to the end of January 2023 onwards by making substantial payments to Centuria by 30 January 2023 or else the forfeiture of the Lease affected by the notice served 27 October 2022 would take effect,” he said.

“Not only did it not pay any sum whatsoever to Centuria during the period prior to 31 January 2023, it made no attempt at all to either wind down its business, move to alternate premises, or apparently communicate with the third parties that its occupancy rights at the Premises would cease on 31 January 2023, and that the third parties needed to make alternate arrangements for their product.

“Remarkably, even after the expiry of the Licence Agreement, on 15 May 2023, VCS (now a trespasser) sent notices to all of its customers that it would be increasing rates effective immediately.

“VCS by its manager, Mr Vincent, notwithstanding the execution of the DOCA, was purporting to increase the rates payable for storage by its customers in circumstances where it had no right to occupy the Premises at all and where there was an extant proceeding on foot by Centuria to recover possession of the Premises which were being occupied without Centuria’s consent or without any lawful entitlement.”

His honour dismissed Dixon’s application and granted CCPF possession of its property. The Landlord at last found a friend and the almost inevitable battle over costs should be enlightening.