Mitchell Centre sues Chatime over abandoned shopfront, but bubble tea shop claims false promises

Rental rivalry between a Darwin shopping centre and bubble tea store has spilled into court amid claims of false promises about big name franchises and big dollars lost on both sides. DETAILS.

The lessee of the Mitchell Centre, Randazzo Investments has claimed Chatime owed $295,197.92 after abandoning their shopfront. Picture: Pema Tamang Pakhrin

A Taiwanese bubble tea chain is claiming a Darwin shopping centre lured them in with false promises about their neighbours, leading Chatime to abandon its Mitchell St shopfront.

A battle over the bubble tea store has entered the Supreme Court, with the Mitchell Centre and Chatime making rival compensation claims totalling $832,000.

Last week Justice Sonia Brownhill ruled both the centre and bubble tea business had “reasonable” rival compensation claims, and the rental spat should continue to be heard in the Supreme Court.

The lessee of the Mitchell Centre, Randazzo Investments has claimed Chatime owed $295,197.92 after abandoning their shopfront for three of their seven-year lease.

The court heard in April 2018, Chatime signed up to move into the Mitchell St complex for seven years, paying a base rent of $43,000 a year.

Chatime is among the vacant spaces at Mitchell Centre at Mitchell Street, Darwin. Picture: Pema Tamang Pakhrin

Conditions of the rental agreement included the bubble tea store had to be open for specific trading hours, and at the end of the lease it would make repairs and remove their fixtures and fittings.

But within six months, Chatime shut down its Darwin city venue.

“Without giving notice to Randazzo, the business ceased trading from the premises, rent was no longer paid and the other obligations under the sublease were no longer performed,” Justice Brownhill said.

Chatime alleged they were lured into the rental contract at Mitchell Centre under false promises. Picture: Pema Tamang Pakhrin

Three years and four months later, in March 2022 Randazzo issued Chatime a notice of termination and notice to quit, demanding the company remove its fixtures and fittings and repair damage.

“Chatime Leasing did not do so,” Justice Brownhill said.

She said the bubble tea company “essentially admits” it did not comply with those obligations, pay rent and that it vacated its store.

But in its counterclaim, Chatime alleged they were lured into the rental contract under false promises.

Chatime alleged they were lured into a rental contract at Darwin’s Mitchell Centre under false promises.

Chatime representatives claimed the property manager told them in 2016 that “major retail food brand” businesses – including Grill’d, Schnitz and Soul Origin – would also be tenants at the Mitchell Centre.

Justice Brownhill said it was alleged those promises were “made without reasonable grounds in that none of the identified prospective tenants became tenants”.

Chatime argued that those representations “constituted misleading and deceptive conduct”, and have counterclaimed the $537,120.26 spent to set up the Mitchell Centre store.

Vacant spaces inside Mitchell Centre at Mitchell Street, Darwin. Picture: Pema Tamang Pakhrin

The company also said Mitchell Centre should have terminated the sublease after Chatime abandoned the store, claiming the three-year wait was “ unconscionable conduct”.

In her interlocutory decision, Justice Brownhill said both parties had arguments with a “reasonable prospect of success” and should proceed to trial.

A direction hearing in the Supreme Court has been set for September 1.