Sportsgirl sued for $2.4m in unpaid rent at Melbourne CBD store

Fashion group Sportsgirl is being sued for refusing to pay rent at its flagship Bourke St Mall store during coronavirus lockdowns.

Fashion group Sportsgirl is being sued for $2.4m over unpaid rent at its flagship Bourke St Mall store in a case which is shaping up as a key test of the nation’s retail rent laws.

The legal claim against Sportsgirl follows the retail chain, owned by Melbourne rich lister Naomi Milgrom, refusing to pay rent during coronavirus lockdowns.

Just Jeans group, backed by retail billionaire Solomon Lew, is also being sued for $3.6m in unpaid rent at a number of its Sydney stores.

Both Milgrom and Lew – two of Melbourne’s leading business identities – have taken a hard line against landlords, refusing to pay rent last year amid rolling lockdowns and work from home orders.

The cases are set to be watched closely by retailers and commercial landlords which have begun to step up their actions against tenants.

At a Supreme Court hearing in the Sportsgirl case held last week, Justice Peter Riordan observed that “one could foresee these issues going right up the hierarchy and possibly to the High Court”.

Sportsgirl owner Naomi Milgrom.

Milgrom also owns the Sussan and Suzzane Grae fashion chains.

Great Union, which owns Melbourne’s Centrepoint Mall, is suing Sportsgirl saying it owes $2.31m in unpaid rent spanning April to December.

It is also claiming around $80,000 in interest and seeking costs.

Sportsgirl has returned fire, charging its landlord with unconscionable conduct and saying it is entitled to reduced rent as access to its store was blocked by COVID-19 restrictions.

In its counterclaim, Sportsgirl says its lease deal was struck under the “common assumption” that access to its store would be “free and unrestricted”.

COVID-19 restrictions and the need to protect worker and shoppers meant this was not the case, it argues.

Sportsgirl also says Great Union has engaged in unconscionable conduct by refusing to engage in good faith negotiations to provide rent relief.

The retailer’s counterclaim points out that foot traffic to its Centrepoint store fell by as much as 80 per cent in June last year as was still down 60 per cent last month.

Great Union denies that access to the store was blocked and says any such interpretation of access clauses in the lease would be unprecedented globally.

Both Sportsgirl and Great Union declined to comment.

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