The landlord, Austral Properties, claims the operators have not properly paid rent, failed to properly insure the premises, failed to paint the hotel and failed to pay legal and capital works costs.
But the tenant, Austral Hotel (SA) Pty Ltd, claims it has met and exceeded its obligations under the lease and that the landlord owes it more than $270,000 in unnecessarily-paid land tax.
It argues that either the land tax was “paid under a mistake of law (or) fact”, or that the owner was not entitled to the payment because the Retail and Commercial Leases Act prevents landlords from passing on the cost of land tax to tenants.
The current operators have been running the hotel since at least 2008, when the lease was granted.
They told the court they had exercised their right of renewal on the lease in April last year.
But in June this year, Austral Properties served them with a notice claiming a breach of lease.
Last month, the District Court granted an injunction to prevent the tenant from being kicked out, at least until the matter is resolved.
Now, District Court Judge Paul Slattery has ordered that lawyers represent Austral Properties at a court-ordered mediation later this month, ahead of a trial.
Austral Hotel (SA) is seeking orders that the landlord repay $272,422 in land tax and grant a five-year renewal of the lease.
They are also seeking orders to extend a deadline for painting the premises because they are waiting on an approval from the Adelaide City Council relating to repair works.
The landlord denies the operators’ allegations and argues their failure to meet the terms of the lease means it cannot be renewed.
The trial is listed in December.
According to records held by corporate regulator ASIC, the director of Austral Hotel (SA) is Hannah Michell, of Aldgate, and the director of Austral Properties is Malgosia Schild, of Wayville.
InDaily has been unable to contact the parties.
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