Tabcorp Loses Dispute With Landlord

The High Court of Australia has ordered Tabcorp to pay $1.38 million in damages – for undertaking a major renovation of the foyer at an office building at 5 Bowen Crescent in South Melbourne – without first obtaining the landlord’s written consent, something it was supposed to do, according to the small print in the lease.

Tabcorp undertook the renovations in mid 1997, months after signing a 10-year lease for building. The gaming giant threw out fixtures and fittings imported by Bowen Investments a year earlier, including San Francisco Green granite, Canberra York Grey granite and sequence-matched crown-cut American cherry timber.

On appeal, the High Court ordered Tabcorp to pay $580,000 for the cost of restoring the foyer to its original condition, and $800,000 for rental losses Bowen Investments would incur, during the restoration period.

A previous Federal Court decision ordered Tabcorp pay just $34,820 in damages, being for the floor area Bowen Investments was unable to lease as office space. Bowen appealed that calculation.

Ben Spicer, director of business lawyers Scanlan Carroll acted for Bowen Investments. He said the landlord didn’t pursue Tabcorp for damages when the refurbishment first occurred in 1997 “as a result of the new long term tenancy relationship”.

However Tabcorp would have seen this coming, having continued the work of altering the foyer despite written warnings and protests from the owner.

Mr Spicer said his client first pursued litigation in 2004 when it became clear Tabcorp had no plans to restore the foyer to its original condition.

“For an individual to take on the might and resources of a large public company requires a great deal of courage and determination,” said Mr Spicer. “The High Court’s decision vindicates our client’s courage of its convictions.”

Tabcorp, which is now led by new management, recently signed a new lease at the Bowen Crescent building. A Tabcorp representative was unavailable for comment when contacted.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of realestatesource.com.au.

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