Fashion retailer Sportsgirl back in court over Covid rent dispute

A fashion retailer is using the city’s lockdown to avoid paying $2.4m in rent at its Melbourne flagship store.

Sportsgirl argues Melbourne’s lockdowns prevented customers from accessing its store. Picture: David Crosling.

Sportsgirl has been forced back into court as it seeks to avoid paying $2.4m in rent and interest at its Melbourne flagship store by arguing the city’s lockdown prevented customers from accessing it.

A successful win by the fashion retailer, backed by Melbourne rich lister Naomi Milgrom, could spark a rush of similar claims given many commercial leases contain clauses which provide compensation if access to the property is prevented.

Sportsgirl in July won a court bid to have its claim for a Covid rent reduction at its Centrepoint Mall store on Bourke St heard via commercial arbitration.

But its landlord, Great Union, won an appeal against that decision with Victoria’s Court of Appeal ruling the commercial arbitration process referenced in Sportsgirl’s lease limits it to ruling on the size of a proposed rent reduction rather than disputes over whether one should be granted in the first place.

Sportsgirl is a women’s fashion label.

The win for Great Union means the Supreme Court will now rule on the question of whether Melbourne’s lockdowns altered the “means of access” to the Sportsgirl store.

The retailer has argued they did and as such it is entitled to a rent reduction.

Great Union is arguing the access clause was designed to cover blockage to the store caused by physical damage or alteration to the building.

SBA Law partner Andrew Green, who acts for Great Union, said a win by Sportsgirl on its rent abatement claim could trigger other similar cases against landlords.

“In the event the court concludes the restrictions imposed by the Covid-19 pandemic altered the means of access to the premise leased by Sportsgirl, this may have wide ramifications, as rent abatement clauses are fairly common in commercial leases,” Mr Green said.

An early judge hearing the matter noted “one could foresee these issues going right up the hierarchy and possibly to the High Court”.

A final trial date has not been set.