One-Eyed Richmond Forum
Football => Richmond Rant => Topic started by: one-eyed on September 18, 2011, 12:11:09 AM
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Richmond Football Club in a stalemate with pokies club landlord
Sue Hewitt
From: Sunday Herald Sun
September 18, 2011
THE Richmond Football Club has taken legal action against the landlord of its pokies club, claiming it has mistakenly paid more than $200,000 for the landlord's land tax and rates.
The club claims it was no longer liable to pay the taxes and rates when it renegotiated the lease on the Wantirna Club in 2004, but hadn't realised it.
But the landlord, Mario Abbotto - an apparent Tigers fan and a patron of the club's Jack Dyer Foundation, who donated more than $5000 to a 2002 fundraiser - insists the club is responsible for the taxes and rates.
The stalemate is now being heard by the Victorian Administrative and Civil Tribunal after the club lodged an application for the tribunal to rule that the disputed charges were not its responsibility.
The club's chief operating officer, Michael Stahl, in a letter to the tribunal last month, said the club became aware of the mistake only in December 2009 when told by its solicitors it was not responsible for land tax or rates.
By then the club had paid $124,623 in land tax, almost $82,000 in council rates and almost $4000 in water rates since the new lease was negotiated in 2004 and wanted a refund.
Mr Stahl said Mr Abbotto's company, Verraty Pty Ltd, had refused to carry out repairs and maintenance.
He claimed the main bar needed a complete overhaul - the timber was rotting and fungus was growing out of holes, while the external walls had severe cracks.
In its application lodged last October, the club said it originally entered a 10-year lease in 1998 with rent starting at $714,000 a year.
It said when the lease was varied in 2004 and extended to a 20-year lease it became a "retail premises lease" under which the club was no longer liable to pay land tax or rates.
The tribunal is yet to make a finding.
http://www.heraldsun.com.au/news/more-news/richmond-football-club-in-a-stalemate-with-pokies-club-landlord/story-fn7x8me2-1226139979628
Updated: Nov 19, 2011
Tigers get a land-tax windfall from pokies venue
RICHMOND Football Club has had a win, but not on the field. A tribunal has ordered the landlord of its eastern suburbs pokies venue to repay the Tigers $125,000 in land taxes that the club had mistakenly paid over several years.
Richmond took Verraty Pty Ltd to VCAT after a dispute arising from the renegotiation of the Wantirna Club lease in 2004.
Verraty's owner is Mario Abbotto, who donated more than $5000 to the footy club's Jack Dyer Foundation in 2002.
VCAT was told that Richmond paid $714,000 rent in the first year of the original lease, with payments to increase 4 per cent a year over 10 years.
Last year the Victorian Commission for Gambling Regulation allowed the Wantirna Club to increase its number of poker machines by 10 to 87.
It was reported that pokies players lost $30 million at Tiger venues in Wantirna and Richmond from 2006-09.
http://www.heraldsun.com.au/news/more-news/tigers-get-a-land-tax-windfall/story-fn7x8me2-1226199366090
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dodgerama
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Ive never beeen a supporter of us being at the Wantirna Club. That we are there for another 12 years isnt a positive IMHO.
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Ive never beeen a supporter of us being at the Wantirna Club. That we are there for another 12 years isnt a positive IMHO.
It's a poxy little pokies joint too. Probably has the fewest machines bringing in cash in the whole of Melbourne.
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Im amazed that the club did a deal where the starting rent was $714,000 a year. For that - they should have taken out a big loan and purchased a freehold pub and put the $714,000 a year rent towards paying for an asset the club would own rather than just leasing it and giving someone else the money.
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gee your making good sense today 10fl...that sounds to me an extraordinary rent to pay...Id suggest there's alot more to this than meets the eye :shh
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sure is, glad this came out before the AGM, let me guess, CC signed onto it...someone should see how fair dinkum a tiger supporter this fella is, if so, he'd have us on a peppercorn rent like Matthieson and the Blues :shh
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when your landlord is named Mario Abbotto,...Money talks and ............
is the lessee being expected to pay rates and land tax normal, in a commercial lease?
It's unheard of in a domestic one.
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when your landlord is named Mario Abbotto,...Money talks and ............
is the lessee being expected to pay rates and land tax normal, in a commercial lease?
It's unheard of in a domestic one.
thought the same thing Al, sounds like extortion to me :lol...no wonder they leaked it to the media
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sure is, glad this came out before the AGM, let me guess, CC signed onto it...someone should see how fair dinkum a tiger supporter this fella is, if so, he'd have us on a peppercorn rent like Matthieson and the Blues :shh
club said it originally entered a 10-year lease in 1998
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The club claims it was no longer liable to pay the taxes and rates when it renegotiated the lease on the Wantirna Club in 2004, but hadn't realised it.
Wouldn't you get Club solicitors to go over any contract and check all the details and aspects of it before allowing the Club to agree to it? ???
Sounds like amatuer hour :P.
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Im amazed that the club did a deal where the starting rent was $714,000 a year. For that - they should have taken out a big loan and purchased a freehold pub and put the $714,000 a year rent towards paying for an asset the club would own rather than just leasing it and giving someone else the money.
I don't think any bank would've allowed us to take out a big loan back then? IIRC given our million dollars loses at the time the AFL had to come in and go guarantor for our existing overdraft (which still exists). Having said that I agree Ramps that $714k per annum is a massive amount to pay in rent :P.
ps. Aren't we writing off $180k per year for the remaining life of the contract (until 2018)?
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Im amazed that the club did a deal where the starting rent was $714,000 a year. For that - they should have taken out a big loan and purchased a freehold pub and put the $714,000 a year rent towards paying for an asset the club would own rather than just leasing it and giving someone else the money.
I don't think any bank would've allowed us to take out a big loan back then? IIRC given our million dollars loses at the time the AFL had to come in and go guarantor for our existing overdraft (which still exists). Having said that I agree Ramps that $714k per annum is a massive amount to pay in rent :P.
ps. Aren't we writing off $180k per year for the remaining life of the contract (until 2018)?
Maybe so but $714,000 a year is massive money. For that they could have purchased one property around Melbourne every year and now that portfolio of properties would have been worth $8 to $10 million. What a complete waste :help
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Im amazed that the club did a deal where the starting rent was $714,000 a year. For that - they should have taken out a big loan and purchased a freehold pub and put the $714,000 a year rent towards paying for an asset the club would own rather than just leasing it and giving someone else the money.
I don't think any bank would've allowed us to take out a big loan back then? IIRC given our million dollars loses at the time the AFL had to come in and go guarantor for our existing overdraft (which still exists). Having said that I agree Ramps that $714k per annum is a massive amount to pay in rent :P.
ps. Aren't we writing off $180k per year for the remaining life of the contract (until 2018)?
Maybe so but $714,000 a year is massive money. For that they could have purchased one property around Melbourne every year and now that portfolio of properties would have been worth $8 to $10 million. What a complete waste :help
funny how some people love taking pot shots from the cheap seats when they have no idea on the facts or the details.
You probably be first in line in calling for the boards head if what happened to collingwood and their pub and pokie disaster had happened to richmond. Most of the time the club whatever it does can't win. :thumbsup
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ps. Aren't we writing off $180k per year for the remaining life of the contract (until 2018)?
No; not necessarily - it is a an extremely difficult one explain
However, the club would be following accounting standards, which means they are required by law to value the impairment value of the contract on a yearly basis. Yes they wrote down an amount a couple of years back an amount but if circumstances (trading conditions) were to change that write off could be reversed back to the P&L. As I said extremely difficult to explain
is the lessee being expected to pay rates and land tax normal, in a commercial lease?
It's unheard of in a domestic one.
It is becoming more common in commercial leases al
Maybe so but $714,000 a year is massive money. For that they could have purchased one property around Melbourne every year and now that portfolio of properties would have been worth $8 to $10 million. What a complete waste :help
Hindsight is a great thing isn't it?
I would argue that when they entered the original agreement, the business modelling would have shown that the club would have made the initial investment back easily as well the yearly rent as gaming revenues were going to be the great saviour of so many sporting clubs. Sadly, as the revenues grew so did the govt's take in the form of the pokie taxes.... which meant the club's revenue's decreased therefore overall profits
RFC are not the only clubs who have been bitten....
Can I add that $714K a year rental isn't that much.... trust me ;D
As I said hindsight is a wonderful thing
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Im amazed that the club did a deal where the starting rent was $714,000 a year. For that - they should have taken out a big loan and purchased a freehold pub and put the $714,000 a year rent towards paying for an asset the club would own rather than just leasing it and giving someone else the money.
I don't think any bank would've allowed us to take out a big loan back then? IIRC given our million dollars loses at the time the AFL had to come in and go guarantor for our existing overdraft (which still exists). Having said that I agree Ramps that $714k per annum is a massive amount to pay in rent :P.
ps. Aren't we writing off $180k per year for the remaining life of the contract (until 2018)?
Maybe so but $714,000 a year is massive money. For that they could have purchased one property around Melbourne every year and now that portfolio of properties would have been worth $8 to $10 million. What a complete waste :help
funny how some people love taking pot shots from the cheap seats when they have no idea on the facts or the details.
You probably be first in line in calling for the boards head if what happened to collingwood and their pub and pokie disaster had happened to richmond. Most of the time the club whatever it does can't win. :thumbsup
Blaisee I'm not going to get into a massive debate with you about this. All I want you to do is answer one question - do you think that paying $714,000 as a starting rent for the Wantirna Club was a good thing to do?
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Im amazed that the club did a deal where the starting rent was $714,000 a year. For that - they should have taken out a big loan and purchased a freehold pub and put the $714,000 a year rent towards paying for an asset the club would own rather than just leasing it and giving someone else the money.
I don't think any bank would've allowed us to take out a big loan back then? IIRC given our million dollars loses at the time the AFL had to come in and go guarantor for our existing overdraft (which still exists). Having said that I agree Ramps that $714k per annum is a massive amount to pay in rent :P.
ps. Aren't we writing off $180k per year for the remaining life of the contract (until 2018)?
Maybe so but $714,000 a year is massive money. For that they could have purchased one property around Melbourne every year and now that portfolio of properties would have been worth $8 to $10 million. What a complete waste :help
funny how some people love taking pot shots from the cheap seats when they have no idea on the facts or the details.
You probably be first in line in calling for the boards head if what happened to collingwood and their pub and pokie disaster had happened to richmond. Most of the time the club whatever it does can't win. :thumbsup
Blaisee I'm not going to get into a massive debate with you about this. All I want you to do is answer one question - do you think that paying $714,000 as a starting rent for the Wantirna Club was a good thing to do?
$714k really isn't that much in the grand scheme of things, a decent pokie venue can almost make that in 1 night and then some.
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Im amazed that the club did a deal where the starting rent was $714,000 a year. For that - they should have taken out a big loan and purchased a freehold pub and put the $714,000 a year rent towards paying for an asset the club would own rather than just leasing it and giving someone else the money.
I don't think any bank would've allowed us to take out a big loan back then? IIRC given our million dollars loses at the time the AFL had to come in and go guarantor for our existing overdraft (which still exists). Having said that I agree Ramps that $714k per annum is a massive amount to pay in rent :P.
ps. Aren't we writing off $180k per year for the remaining life of the contract (until 2018)?
Maybe so but $714,000 a year is massive money. For that they could have purchased one property around Melbourne every year and now that portfolio of properties would have been worth $8 to $10 million. What a complete waste :help
funny how some people love taking pot shots from the cheap seats when they have no idea on the facts or the details.
You probably be first in line in calling for the boards head if what happened to collingwood and their pub and pokie disaster had happened to richmond. Most of the time the club whatever it does can't win. :thumbsup
Blaisee I'm not going to get into a massive debate with you about this. All I want you to do is answer one question - do you think that paying $714,000 as a starting rent for the Wantirna Club was a good thing to do?
You and I are both unqualified and uneducated in the facts to have a worthwhile opinion on this.
Is $714k alot of money? Yes
is it alot of money in an organisation turning over $35 million? less so
Would it have been better to invest $10 million in owning a pub to avoid the rent? IMHO no, go ask Collingwood and Eddie Mcguire why.
It just amazes me how flabbergasted some people get about decisons being mad when they don't have any idea about what the facts are, just crazy.
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The facts according to the article are that we agreed to pay $714,000 as a starting rental for the Wantirna Club. What more is there to say? This issue is not about us owning 5 or 6 pubs which is what Collingwood tried to do and for what they massively overpaid, we are talking about our situation thats all. Its got nothing to do with Collingwood.
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The facts according to the article are that we agreed to pay $714,000 as a starting rental for the Wantirna Club. What more is there to say? This issue is not about us owning 5 or 6 pubs which is what Collingwood tried to do and for what they massively overpaid, we are talking about our situation thats all. Its got nothing to do with Collingwood.
Seriously Flags, without knowing the details of the full business plan,CB anaylsis and the the actuall terms & consitions of the lease it really is too hard to say whether it is a reasonable number or not.
Remember though that the location was chosen based on the clubs data telling them that; that area (region) had a high level of RFC members & supporters
However, based on what other clubs had to do then when all clubs were establishing gaming facilities then you could argue (easily) that $714k p.a. was a reasonable number
ANd BTW "the facts according to the article" ..... really you should know better with the media ;D
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All we can talk about is the contents of the article. If the contents are not correct then that is not our fault.
All any of us can do is comment on the article as presented. Thats all I have done.
Not here to be popular all I've done is give an opinion and as we all know opinions can be right or wrong. Some people get upset at the slightest criticism of the club, whether it be recruiting someone like Jordan McMahon or whether someone questions whether or not $714,000 in rent is too much.
Its just a forum and all of us should be allowed to put forward our opinions based on articles etc. as long as we dont defame or harrass anyone. I havent done that. :cheers
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ps. Aren't we writing off $180k per year for the remaining life of the contract (until 2018)?
No; not necessarily - it is a an extremely difficult one explain
However, the club would be following accounting standards, which means they are required by law to value the impairment value of the contract on a yearly basis. Yes they wrote down an amount a couple of years back an amount but if circumstances (trading conditions) were to change that write off could be reversed back to the P&L. As I said extremely difficult to explain
Cheers for the explanation WP. I guess the question then is is there any realistic chance of trading conditions changing for the better in the next few years?! :-\
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All we can talk about is the contents of the article. If the contents are not correct then that is not our fault.
All any of us can do is comment on the article as presented. Thats all I have done.
Not here to be popular all I've done is give an opinion and as we all know opinions can be right or wrong. Some people get upset at the slightest criticism of the club, whether it be recruiting someone like Jordan McMahon or whether someone questions whether or not $714,000 in rent is too much.
Its just a forum and all of us should be allowed to put forward our opinions based on articles etc. as long as we dont defame or harrass anyone. I havent done that. :cheers
Flags, I used to work in Camberwell at a gaming venue, the weekly turnover of cash was $1m+ in a week, and that was only with about 25 machines.
Now not all of that is profit, as the venue still has to pay fees and everything else that comes along with owning a venue, so in the grand scheme of things a once off $714k rent payment is not really a lot a decent gaming venue will make that back quite easily.
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Cheers for the explanation WP. I guess the question then is is there any realistic chance of trading conditions changing for the better in the next few years?! :-\
I think at this stage the realisitic and conservative answer would be NO based on the continual drop in gaming revenue over the last few years... but if they win this case that may very well change
And BTW I have just looked at the 2010 Fin reports and the Club has made 2 allowances (2010 & 2009) @ $160k each year for "provisions of onerous lease"
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for all intents and purposes it looked to be an appalling business decision, for the money committed there we could have bought 2 or 3 cafes and made more $$$ than this white elephant but hey what would I know, im only a salesman :lol
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for all intents and purposes it looked to be an appalling business decision, for the money committed there we could have bought 2 or 3 cafes and made more $$$ than this white elephant but hey what would I know, im only a salesman :lol
Actually, at the time it would of been a very good business decision as Pokie Revenues have gone through the roof since then.
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for all intents and purposes it looked to be an appalling business decision, for the money committed there we could have bought 2 or 3 cafes and made more $$$ than this white elephant but hey what would I know, im only a salesman :lol
Actually, at the time it would of been a very good business decision as Pokie Revenues have gone through the roof since then.
well how is it then that it has turned an operating loss just about ea year since inception. i live nearby and rarely is the carpark even half full. I recommended some time back they needed to advaerise specials on the banner as in tues pot and parma night $9.90 and they would have been queing from belgrave to get in
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Actually, at the time it would of been a very good business decision as Pokie Revenues have gone through the roof since then.
Not at the RFC they haven't
Been steadily decreasing the last 4 years and the nett profit from them due to the increase in govt taxes have decreaed as well
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for all intents and purposes it looked to be an appalling business decision, for the money committed there we could have bought 2 or 3 cafes and made more $$$ than this white elephant but hey what would I know, im only a salesman :lol
Actually, at the time it would of been a very good business decision as Pokie Revenues have gone through the roof since then.
well how is it then that it has turned an operating loss just about ea year since inception. i live nearby and rarely is the carpark even half full. I recommended some time back they needed to advaerise specials on the banner as in tues pot and parma night $9.90 and they would have been queing from belgrave to get in
Obviously the area in which they purchased these machines were a mistake but they had the right idea in mind.
Actually, at the time it would of been a very good business decision as Pokie Revenues have gone through the roof since then.
Not at the RFC they haven't
Been steadily decreasing the last 4 years and the nett profit from them due to the increase in govt taxes have decreaed as well
Sorry, I should have worded it better, what I meant was Pokies Revenue in Australia has gone through the roof, not necessarily that the RFC had made large profits from these machines.
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Cheers for the explanation WP. I guess the question then is is there any realistic chance of trading conditions changing for the better in the next few years?! :-\
I think at this stage the realisitic and conservative answer would be NO based on the continual drop in gaming revenue over the last few years... but if they win this case that may very well change
And BTW I have just looked at the 2010 Fin reports and the Club has made 2 allowances (2010 & 2009) @ $160k each year for "provisions of onerous lease"
Ta WP. Here's the links to the Financial reports from 2004-2010 btw for those interested.
2010 - http://oneeyed-richmond.com/forum/index.php?topic=12217.0
2009 - http://oneeyed-richmond.com/forum/index.php?topic=10387.0
2007 - http://oneeyed-richmond.com/forum/index.php?topic=6251.0
2006 - http://oneeyed-richmond.com/forum/index.php?topic=4168.0
2005 - http://oneeyed-richmond.com/forum/index.php?topic=2492.0
2004 - http://oneeyed-richmond.com/forum/index.php?topic=1127.0
CONSOLIDATED INCOME STATEMENT
Provision for Wartirna Club onerous lease
$
2008 (1,540,000)
2009 160,000
2010 160,000
REVENUE
Receipts from gaming and social operations
$
2003 6,280,807
2004 5,815,571
2005 6,268,598
2006 6,397,903
2007 5,824,755
2008 5,771,663
2009 5,518,281
2010 5,371,647
Net Gaming revenue
$
2004 105,000
2005 326,000
2006 450,000
No further mentions of net gaming revenue in later reports. Smoking ban came in 1st July 2007 IIRC.
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Provision for Wartirna Club onerous lease
$
2008 (1,540,000)
2009 160,000
2010 160,000
Thanks MT
So what this means is that in 2008 applying the required Acct Std the club wrote off $1.54mil as a provn against estimated future loss against the lease over the remaining life of the lease. Then in 2009 & 2010 again appyling the required std (which they must do every year) they have written back to profit 2 lots of $160K as they have reviewed lease and the performance of the Wantirna club and assessed that they are less likely to make the original esitmate of the losses
And before anyone starts jumping up and down and saying they are making up numbers. I can assure they are not. They are following the required laws pertaining to Acctg Stds & Corp Law with regard to long term debt :thumbsup
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I found this on the VCAT site dated "THURSDAY, 3 NOVEMBER 2011"
RETAIL TENANCIES LIST
Decision
Ground Floor (for collection) - Senior Member E. Riegler
9:30 AM R203/2010 Richmond Football Club Ltd v Verraty Pty Ltd
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Does anyone know what came out of this VCAT decision? Did the Club show it was paying land tax unneccessarily and win its case?
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Tigers get a land-tax windfall from pokies venue
by: Herald Sun
From:Herald Sun
November 19, 2011
RICHMOND Football Club has had a win, but not on the field. A tribunal has ordered the landlord of its eastern suburbs pokies venue to repay the Tigers $125,000 in land taxes that the club had mistakenly paid over several years.
Richmond took Verraty Pty Ltd to VCAT after a dispute arising from the renegotiation of the Wantirna Club lease in 2004.
Verraty's owner is Mario Abbotto, who donated more than $5000 to the footy club's Jack Dyer Foundation in 2002.
VCAT was told that Richmond paid $714,000 rent in the first year of the original lease, with payments to increase 4 per cent a year over 10 years.
Last year the Victorian Commission for Gambling Regulation allowed the Wantirna Club to increase its number of poker machines by 10 to 87.
It was reported that pokies players lost $30 million at Tiger venues in Wantirna and Richmond from 2006-09.
http://www.heraldsun.com.au/news/more-news/tigers-get-a-land-tax-windfall/story-fn7x8me2-1226199366090
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Here's the full judgement from VCAT:
http://www.austlii.edu.au/au/cases/vic/VCAT/2011/2104.html
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As a business you wouldn't of even written this off? That was if you knew about it to begin with I presume.
So as good as extra cash. NICE
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It just shows you need to have your legal wits about you or a solicitor who knows the land/lease laws inside out and any recent changes to them before heading into or varying a lease agreement.
If I am reading it right, the Club won its case because when it varied the original 1998 lease in 2004 (most importantly extending the lease from 2010 to 2018), it legally meant the original lease became void and as this "new" varied lease was done after the new Retail Lease laws were enacted in 2003 we no longer had to pay land-tax. On top of that the original lease prevented any rent reductions which is not allowed under the Retail Lease Act 2003 and that also made the original lease void. The only way Verraty could have claimed the original lease was still in effect was if they had put it in writing that the varied lease was still the original lease. They didn't so the old lease and the condition for the Club to pay land-tax post-2004 was considered void and the Club won the case :clapping.
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It just shows you need to have your legal wits about you or a solicitor who knows the land/lease laws inside out and any recent changes to them before heading into or varying a lease agreement.
If I am reading it right, the Club won its case because when it varied the original 1998 lease in 2004 (most importantly extending the lease from 2010 to 2018), it legally meant the original lease became void and as this "new" varied lease was done after the new Retail Lease laws were enacted in 2003 we no longer had to pay land-tax. On top of that the original lease prevented any rent reductions which is not allowed under the Retail Lease Act 2003 and that also made the original lease void. The only way Verraty could have claimed the original lease was still in effect was if they had put it in writing that the varied lease was still the original lease. They didn't so the old lease and the condition for the Club to pay land-tax post-2004 was considered void and the Club won the case :clapping.
Wantirna Club hasnt been a success IMHO and if it wasnt a valid lease or was voided by incorrect terms in the original agreement why do we have to continue with it going forward?
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It just shows you need to have your legal wits about you or a solicitor who knows the land/lease laws inside out and any recent changes to them before heading into or varying a lease agreement.
If I am reading it right, the Club won its case because when it varied the original 1998 lease in 2004 (most importantly extending the lease from 2010 to 2018), it legally meant the original lease became void and as this "new" varied lease was done after the new Retail Lease laws were enacted in 2003 we no longer had to pay land-tax. On top of that the original lease prevented any rent reductions which is not allowed under the Retail Lease Act 2003 and that also made the original lease void. The only way Verraty could have claimed the original lease was still in effect was if they had put it in writing that the varied lease was still the original lease. They didn't so the old lease and the condition for the Club to pay land-tax post-2004 was considered void and the Club won the case :clapping.
Wantirna Club hasnt been a success IMHO and if it wasnt a valid lease or was voided by incorrect terms in the original agreement why do we have to continue with it going forward?
Because Ramps there's still a lease agreement in place up until 2018. This VCAT decision was just about determining whether the 2004 renegotiation of the terms of the lease superceded the original 1998 lease and made the original lease and any conflicts with the Retail Lease Act 2003 such as paying land-tax void. The judgement found it did. Apart from that the current lease is still in place and will be up until at least 2018.
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Nice kick start for 2012's bottom line ;D
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They should put it on the roulette wheel at Crown. 50% chance of doubling up quick smart. ;D
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48.65% chance of doubling your money, ramps.
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48.65% chance of doubling your money, ramps.
:lol
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Pokies are great.