This Exhibit referred to in the Affidavit of Thanasis Raptis sworn / affirmed Before me this ..... day of .................. 2016
.................................................... Signature of J. P.
Level 21 333 Collins Street Melbourne Victoria 3000 Australia DX38455 Melbourne www.abl.com.au
15 July 2015
Telephone 61 3 9229 9999 Facsimile 61 3 9229 9900
Your Ref Our Ref PJM File No. 011863427
Bruce McNab AMC Law & Associates 400 Burnley Street Richmond VIC 3121
Contact Phillip Mathers Direct 61 3 9229 9705 Facsimile 61 3 9229 9995
[email protected]
Dear Sir Renewal of Lease by Thanasis Raptis Cafe at Rear Ground Floor 333 Collins Street, Melbourne We refer to your letter of 8 July 2015 and advise that we have now taken our client’s instructions with regard to your propositions on behalf of your client. We advise that our client disagrees with your claim that the letter of 8 May 2015 from Alberto Rice to Mr Raptis did not constitute a notice for the purposes of clause 19.2. In fact, to the contrary, our client believes that the terms of the letter are perfectly clear in that it states in plain language that the net annual rent will be $128,975.00 plus GST followed by 4% annual increases. In our client’s views, this could not be put in any clearer language. Our client believes that the Landlord cannot be blamed if the tenant does not understand his rights and obligations under the lease or if he fails to follow the appropriate process laid down in clause 19 of the Lease. As you are obviously well aware, the Lease provides that once the Landlord has notified the Tenant of the rental it requires the Tenant then has the period of 14 days within which to notify the Landlord of any objection. If no objection is delivered to the Landlord within that 14 day period then rent notified by the Landlord becomes the rent payable from the relevant review date. Our client has also instructed us to inform you on behalf of the Tenant, that prior to despatching the letter of 8 May 2015 which notified the Tenant of the Landlord’s requirement for the new rent, the Landlord did undertake proper due diligence and sought the advice of an independent valuer as to the appropriate market rental value of these premises which amply supports the figure which was notified to your Tenant. Our client would like to emphasise that this was not an “ambit claim” and that the figure notified was an accurate reflection of the market rental value of the premises.
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Partners Mark M Leibler AC Henry D Lanzer AM Joseph Borensztajn Leon Zwier Philip Chester Ross A Paterson Stephen L Sharp Kenneth A Gray Kevin F Frawley Michael N Dodge Jane C Sheridan Leonie R Thompson Zaven Mardirossian Jonathan M Wenig Paul Sokolowski Paul Rubenstein Peter M Seidel Alex King John Mitchell Ben Mahoney Sam Dollard Andrew Silberberg Jonathan Milner John Mengolian Caroline Goulden Matthew Lees Genevieve Sexton Jeremy Leibler Nathan Briner Jonathan Caplan Justin Vaatstra Clint Harding James Simpson Susanna Ford Tyrone McCarthy
Senior Litigation Counsel Robert J Heathcote
Senior Associates Sue Kee Benjamin Marshall Teresa Ward Christine Fleer Nancy Collins Kimberley MacKay Andrea Towson Daniel Mote Laila De Melo Anetta Curkowicz Damien Cuddihy David Robbins Krystal Pellow Jeremy Lanzer Neil Brydges Gia Cari John Kim Tanya Bastick Katharine McPherson Albert Ounapuu Emily Simmons Liam Thomson Jason van Grieken Elyse Hilton Amelia Smith Anna Parker Richard Janko Meagan Grose Ben Podbury Bridget Little Charles Gardiner
Consultants Allan Fels AO
Bruce McNab AMC Law & Associates
Arnold Bloch Leibler Page: 2 Date: 15 July 2015
In any valuation of the rent, the valuer must take into account the total occupancy costs which, in this case, are a combination of the net rent and the outgoings recoverable from the tenant under the lease. What your client’s valuer may not have been aware of is the fact that the outgoings which are actually recoverable from the Tenant in respect of these premises will be somewhat less than the amount previously estimated and in addition are actually at a lower level than those charged in comparable buildings and as a consequence the gross occupancy cost (and consequently the appropriate amount of the net rent) ought not be so vastly different. In addition, on review of your valuer’s valuation, it appears that he has not properly taken into account that it is not just the bare premises which is being valued. The landlord is the owner of not only essentially the entire fitout of the premises (including all tables and chairs) but also the vast majority of the other essential food handling equipment required for the preparation and consumption of the food and beverage business right down to items such as the cutlery and crockery. One other considerable benefit and unusual feature of this tenancy that must be taken into account in assessing the rent is the tenant’s right under the lease to an exclusivity for the takeaway food and beverage use in the Building. Again, it is not obvious from your client’s valuation that this has been taken into account. Consequently, it is our client’s view that, even if your proposition were found to be correct (which the Landlord strongly denies) and a fresh market rental valuation were undertaken by an independent valuer then, having regard to the gross occupancy cost and comparable evidence, the Landlord’s figure would still be justified and confirmed as the correct market rental value of the premises as at the review date. From this you would appreciate that even if your client sought and obtained a mediation at the Small Business Commissioner and perhaps subsequently took a case to VCAT then our client is confident that ultimately the result would turn out to be the same justifying the appropriate level of rent specified by the Landlord. In the circumstances and in order to avoid unnecessary waste of time and expense the Landlord recommends that your client reconsider his objection and proceed to execute and return the renewal documents without further delay. Yours faithfully Arnold Bloch Leibler
Phillip Mathers Legal Executive
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