Amje Pty Ltd v Mobil Oil Australia Pty Ltd

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION

S CI 2015 2785

AMJE PTY LTD (ACN 082 193 682)	Plaintiff
v
MOBIL OIL AUSTRALIA PTY LTD (ACN 004 52 984)	Defendant

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JUDGE:	Derham AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	12 April 2016
DATE OF JUDGMENT:	13 December 2016
CASE MAY BE CITED AS:	AMJE Pty Ltd v Mobil Oil Australia Pty Ltd
MEDIUM NEUTRAL CITATION:	[2016] VSC 777

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RETAIL LEASES – Whether lease is a lease of retail premises for the purposes of Part 10 of the Retail Leases Act 2003 (‘RLA’) – Whether disputes in proceeding in the Supreme Court of Victoria are a ‘retail tenancy dispute’ within the meaning of s 81 of the RLA – Whether disputes are justiciable in the Supreme Court – Section 89(4) of the RLA – State of Victoria v Tymbook Pty Ltd [2005] VSC 267 distinguished – Plaintiff has a real prospect of establishing that the disputes the subject of the proceeding are not a retail tenancy dispute – Thus there is a real prospect of the plaintiff establishing that the Supreme Court has jurisdiction to adjudicate the disputes.

PRACTICE AND PROCEDURE – Application to dismiss proceeding under s 62 of the Civil Procedure Act 2010 on basis that Part 10 of the RLA excludes the jurisdiction of the Court – Whether there is no real prospect of the plaintiff successfully claiming the Court has jurisdiction – Plaintiff has a real prospect of establishing that the disputes the subject of the proceeding are not a retail tenancy dispute – Thus there is a real prospect of the plaintiff establishing that the Supreme Court has jurisdiction to adjudicate the disputes – Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [2013] VSCA 158; Mandie v Memart Nominees Pty Ltd [2016] VSCA 4.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr I G Waller QC	Best Hooper
For the Defendant	Mr P J Booth	Holman Renwick Willan

TABLE OF CONTENTS

Introduction......................................................................................................................................... 1

The Lease............................................................................................................................................. 2

The Proceeding................................................................................................................................... 3

Defendant’s Submissions................................................................................................................. 5

Extension of the Lease.................................................................................................................. 6
Status of Defendant....................................................................................................................... 7
Jurisdiction under the Retail Leases Act................................................................................... 8
Retail Tenancy Dispute.............................................................................................................. 10

Plaintiff’s Submissions................................................................................................................... 14

Extension of the Lease................................................................................................................ 14
Status of Defendant..................................................................................................................... 15
Retail Tenancy Dispute.............................................................................................................. 16

Applicable Law................................................................................................................................. 19

Summary Dismissal.................................................................................................................... 19
Statutory Interpretation.............................................................................................................. 22

Consideration.................................................................................................................................... 23

Extension of the Lease................................................................................................................ 24
Status of Defendant..................................................................................................................... 25
Jurisdiction under the Retail Leases Act................................................................................. 26
Retail Tenancy Dispute.............................................................................................................. 29

Conclusion......................................................................................................................................... 35

HIS HONOUR:

Introduction

The defendant applies to stay or dismiss the proceeding on the grounds that this Court has no jurisdiction to hear the disputes raised in this proceeding by virtue of provisions of the Retail Leases Act 2003 (Vic) (‘RLA’ or ‘the Act’).[1] The defendant maintains that the Lease is subject to the dispute resolution sections Part 10 of the RLA with the result that the jurisdiction of the Supreme Court is excluded and the disputes arising are justiciable only in the Victorian Civil and Administrative Tribunal (‘VCAT’).
[1]The defendant applied by summons filed on 30 March 2016 for the Statement of Claim to be struck out, and for other relief. The defendant’s submissions make clear, however, that the relief sought is as I have stated it.

The defendant submitted that there are three questions for determination. Bearing in mind that the questions for determination arise in the context of an application to stay or dismiss the plaintiff’s proceeding as having no real prospect of success; the questions, as rephrased by me, together with my short answers, are as follows:

(a) were the premises the subject of the Lease (referred to below) retail premises within the meaning of s 4(1)(a) of the RLA at the relevant time? Answer – yes;

(b) if the premises were retail premises within the meaning of s 4(1)(a) of the RLA at the relevant time, were they excluded from that definition by reason of s 4(2)(d) of the RLA; Answer – yes; and

(c) is the dispute between the parties in this proceeding a ‘retail tenancy dispute’ and does Part 10 of the RLA apply? Answer – no.

In consequence, there is a real prospect of the plaintiff establishing that the Supreme Court has jurisdiction to adjudicate the disputes in the proceeding and that its jurisdiction is not excluded by the RLA.

The Lease

By a Lease dated 19 September 1996, (effective from 8 July 1996) the then registered proprietor of the premises at 294-296 Keilor Road Niddrie, Victoria (‘the Premises’), Federal Holdings Pty Ltd, leased the Premises to the defendant, then known as Mobil Oil Australia Limited (‘Mobil’),[2] for a term of 15 years, with two options to renew each for a further term of 5 years (‘the Lease’).
[2]Affidavit of Robert Desmond sworn 30 March 2016 (‘Desmond Affidavit’), [2].

By a Deed of Variation dated 27 November 1997, the rental terms under the Lease were varied, with effect from the date of the deed, so that the rental was varied from a base plus turnover rent to an increased base rental with no turnover component.[3]
[3]Desmond Affidavit, [3].

On 17 May 1999, the plaintiff became the registered proprietor of the Premises and successor in title as lessor.[4]
[4]Desmond Affidavit, [4].

The Lease demised the Premises to defendant for the purpose of conducting ‘a petrol station and/or convenience shop and/or any other associated development relating to the marketing of petroleum products for motor vehicles.’[5]
[5]Clause 1(a)(i)(i) of the Lease – Exhibit RJD-1 to the Desmond Affidavit.

It is common ground that there was no exercise of the option to renew the Lease.

By agreement recorded in a letter dated 6 July 2011, signed on behalf of the parties (which was during the term of the Lease), the plaintiff and defendant agreed to extend the term of the Lease for a period of 3 months until 7 October 2011 so as to enable discussions regarding the assignment of the defendant’s interest under the Lease.[6] The agreement provided that if the assignment did not occur, the defendant would at the end of the term as extended continue to occupy the Premises under clause 3(f) of the Lease for the purpose of undertaking remediation of the Premises in accordance with clause 5(d) of the Lease. The defendant remained in occupation of the Premises for the purposes of conducting remediation of the Premises from 7 October 2011 to 18 December 2014.[7]
[6]It is not made clear how this could occur without the exercise of an option to renew.
[7]Desmond Affidavit, [10]-[14].

Throughout the term of the Lease as extended, until 7 October 2011, the Premises were used as a petrol service station, with ancillary salesroom and/or shop, by or on behalf of the defendant.[8]
[8]Desmond Affidavit, [14].

The Proceeding

This proceeding was commenced by writ and statement of claim (‘the Statement of Claim’) on 29 May 2015. The relief claimed centres upon specific performance of obligations alleged to arise under the Lease to ‘remediate’ the Premises, a former service station at which petroleum products were stored on or under the Premises. The plaintiff claims that the defendant is obliged to perform remediation works to clean up the Premises so as to be free from contamination at the expiration or prior determination of the Lease.

The Statement of Claim relies on express terms in the Lease and on an implied term.[9] It is alleged that Mobil breached the Lease and the implied term[10] giving rise to the plaintiff’s entitlement to specific performance of the obligation to remediate the Premises, including the obtaining of necessary ancillary environmental audits and reports. The plaintiff also claims damages in addition to specific performance under s 38 of the Supreme Court Act 1986(Vic).[11]
[9]Statement of Claim, [6] –[7]. In summary, the implied term is to produce reports verifying that the Premises had been cleaned up so as to be free from contamination as required by the Lease within a reasonable time after expiration of the Lease.
[10]Statement of Claim, paras 12-13.
[11]Statement of Claim, para 15.

The defendant filed a holding defence on 1 July 2015, merely admitting, not admitting and denying allegations without elaboration. It was preceded by extensive correspondence between solicitors regarding alleged deficiencies in the Statement of Claim and a request for further and better particulars. No part of the defence raised any question about this Court’s jurisdiction to try the claims.

On 10 July 2015, the plaintiff applied by summons to strike out the defence and for judgment to be entered against the defendant. In its effect, it was an application for summary judgment. The summons was returnable on 7 August 2015. On 5 August 2015, the defendant responded with its own application for orders that the plaintiff give further and better particulars of its Statement of Claim and file and serve an amended statement of claim (‘ASOC’).

On 6 August 2016, the defendant purported to file another defence, this time setting out in some detail its responses to plaintiff’s claims. Again, no part of this defence raised any question about this Court’s jurisdiction to try the claims.

The plaintiff and defendant’s summonses came on for hearing on 7 August 2015, and after argument it was ordered that the plaintiff file and serve and Amended Statement of Claim, followed by a defence and any reply.

On 3 September 2015, the plaintiff filed an ASOC. The ASOC descends to greater detail and is not pleaded at such a high level as the initial Statement of Claim, but relies upon the same Lease,[12] the same term of the Lease[13] and the same implied term.[14] It alleges various breaches of the Lease and the implied term, giving greater content to the breaches than previously.[15] As with the Statement of Claim, damages are claimed in addition to specific performance under s 38 of the Supreme Court Act 1986 by reason of the breaches of the Lease and implied terms.[16] The ASOC also refers to breaches of the Environment Protection Act 1970 (Vic) and the State Environment Protection Policy (Prevention and Management of Contamination of Land)(‘the Land SEPP’), which in turn give rise to breaches of the Lease (there being allegations that the terms of the Lease require compliance with aspects of that legislation).[17]
[12]ASOC, [4].
[13]ASOC, [6].
[14]ASOC, [7].
[15]ASOC, [19], [20], [31] and [32].
[16]ASOC, [34].
[17]ASOC, [19(a) and (b)].

The defendant filed an amended defence in response to the ASOC on 23 September 2015 and the plaintiff filed its reply on 12 October 2015. On 15 October 2015, the proceeding came before the Court for further directions. It then appeared that the defendant had very recently given disclosure of a CUTEP report,[18] which the plaintiff maintained should have been previously disclosed and which could impact the plaintiff’s ASOC and the relief claimed. Directions were given enabling amended pleadings. There were delays in compliance with the directions because of consideration by the Environment Protection Authority of a recent CUTEP report. The dates for filing and service of any amended pleadings were altered by order on 27 November 2015 and a further directions hearing set for February 2016.
[18]CUTEP is an acronym for ‘Clean Up To the Extent Practicable.

By letter dated 22 December 2015, the defendant’s solicitors asserted, for the first time, that this Court lacked jurisdiction to hear and determine this proceeding by reason of ss 89 and 98 of the RLA. In February 2016, the Court was informed of the disputed jurisdiction issue.[19]
[19]Affidavit of Andrew Walter Kaspen sworn 11 April 2016 (‘Kaspen Affidavit’) [13], Exhibit AWK-31.

On 30 March 2016, the defendant filed it summons seeking to strike out the Statement of Claim and for other relief, returnable on 12 April 2016.

In the meantime, on 5 April 2016 the plaintiff filed a further amended statement of claim (‘FASOC’) and further and better particulars of loss and damage.

Defendant’s Submissions

The defendant’s submissions contained a number of elements, namely, that the disputes the subject of the proceeding:

(a) are a retail tenancy dispute within the meaning of s 81 of the RLA, notwithstanding that during the term of the Lease it was not a lease of retail premises; and

(b) arose under a lease which became a lease of retail premises so that the disputes are a retail tenancy dispute by reason of that fact. That turns on the status of the defendant as the subsidiary of ‘a body corporate whose securities are listed on a stock exchange, outside Australia and the external territories, that is a member of the World Federation of Exchanges’[20] within the meaning of s 4(2)(d) of the RLA.

[20]which I shall call a ‘listed foreign entity’.

To understand these submissions it is necessary to deal with the effect of the extension of the Lease, the status of the defendant, jurisdiction under the RLA, the meaning of retail tenancy dispute in s 81 of the RLA and the consequences if the disputes are a retail tenancy dispute.

Extension of the Lease

On or about 6 July 2011, the Lease was extended, prior to its expiration, for a period of three months. Thereafter, Mobil remained in occupation as a periodic tenant until 18 December 2014.[21]
[21]Desmond Affidavit, [10]-[16].

The defendant contended that the effect of the extension was the surrender of the Lease and the grant of a new lease at law on the same terms save that the period of tenancy is three months.[22] The consequence of Mobil remaining in occupation and paying rent on a three monthly basis is that after 29 October 2013 by reason of s 12(2) of the RLA, it applied from 29 October 2014 to confer tenure under the general provisions of the Act for a period of five years commencing on 29 October 2013.[23]
[22]Richmond Football Club Limited v Verraty Pty Ltd [2011] VCAT 2104.
[23]see s 21(2A) of the RLA.

The defendant contended that the disputes the subject of the proceeding arose under this statutory lease and that because:

(a) by s 82 of the RLA, Part 10 applies to a lease of retail premises that are retail premises at any time during the lease; and

(b) the plaintiff ceased to be a subsidiary of a foreign listed entity in October or November 2013 and thereby ceased to be excluded from the definition of retail premises-

the disputes the subject of the proceeding are a retail tenancy dispute within the meaning of s 81 of the RLA and Part 10 applies to exclude the jurisdiction of the Court.

Status of Defendant

When the Lease was executed on 19 September 1996, the defendant was a subsidiary of Mobil Petroleum Co., Inc. Mobil Petroleum Co., Inc. was, in turn, a wholly owned subsidiary of Mobil Oil Corporation, an entity listed on the New York Stock Exchange (‘NYSE’).[24]
[24]Desmond Affidavit, [7].

Exxon Corporation and Mobil Oil Corporation merged in November 1999, and the defendant became a wholly owned subsidiary of ExxonMobil Australia Pty Ltd, which in turn, is a wholly owned subsidiary of Exxon Mobil Corporation. Both Mobil Oil Corporation and ExxonMobil Corporation were listed on the NYSE at the time of the merger. ExxonMobil Corporation remains listed on the NYSE.[25]
[25]Desmond Affidavit, [7]-[8].

On 22 March 2000, defendant converted to a proprietary company known as Mobil Oil Australia Pty Ltd (‘the defendant’).[26]
[26]Desmond Affidavit, [6] and exhibit RJD-4.

Until 2013 the NYSE, then known as NYSE Euronext, was a member of the World Federation of Exchanges (‘WFE’). NYSE Euronext was acquired by Intercontinental Exchange Group Inc. (‘ICE’) on 13 November 2013.[27] The NYSE is not a member of WFE as the WFE ceased to exist on or about 29 October 2013.[28] Subsequently, Intercontinental Exchange, Inc., a subsidiary of ICE, became a member of a differently constituted company called The World Federation of Exchanges Limited.[29] Intercontinental Exchange, Inc. was also previously a member of the entity previously known as WFE. In summary, therefore:

(a) WFE ceased to exist on or about 29 October 2013. From that date, section 4(2)(d) of the RLA could not operate and the Act applied; and

(b) alternatively, if the subsequent entity The World Federation of Exchanges Limited is to be read as WFE for the purposes of s 4(2)(d) of the RLA, then from 13 November 2013 the NYSE was not eligible to be a member of WFE. From that date, s 4(2)(d) of the RLA could not operate and the RLA applied to the Lease.

[27]Desmond Affidavit, [17]-[18].

[28]Desmond Affidavit, [17]-[21].

[29]Desmond Affidavit, [17]-[21].

It is not in dispute that the defendant is a subsidiary of its ultimate parent, Exxon Mobil Corporation, for the purposes of the Corporations Act2001(Cth) and s 4(2(d) of the RLA.[30]
[30]Through the operation of ss 9, 46(b) and 49 of the Corporations Act 2001. Note that the references in the RLA to the Corporations Act is defined by s 38A of the Interpretation of Legislation Act 1984 to mean the Commonwealth Corporations Act 2001.

Jurisdiction under the Retail Leases Act

The defendant contends that the jurisdiction of this Court is excluded in this case because the issues or disputes in the proceeding constitute a retail tenancy dispute as defined in s 81 of the RLA, so that by the operation of ss 89 and 98 of the RLA the jurisdiction of the Supreme Court is excluded.

By s 3 of the RLA, retail premises is defined to have the meaning given by s 4. Section 4(1)(a) defines the phrase to mean ‘…premises … that under the terms of the lease relating to the premises are used, or are to be used, wholly or predominantly for … the sale or hire of goods by retail or the retail provision of services…’

Despite the absence of dispute as to the Premises being retail premises within this meaning during the term of the Lease, the defendant advanced argument as to the approach to be taken to determining whether a lease is a lease of retail premises, as follows:

(a) the focus of the enquiry in determining whether a lease is subject to the provisions of the Act is to have regard to the terms of the lease in issue, and whether the terms provide for the premises to be used wholly or predominately for the sale of goods by retail or for the retail provision of services. However, the actual use to which the premises are put under the lease will often also inform the enquiry into whether the relevant lease is subject to the RLA. The nature of the activity carried on in the leased premises is to be characterised by taking into account the activities actually performed on the premises together with those actually permitted under the terms of the lease;[31] and

(b) in construing the terms of the lease, to determine whether its terms provide that the premises are to be used for the requisite retail purpose, the court should look to the substance of the arrangements between the landlord and the tenant where the permitted use under the Lease is not sufficiently specific to enable the court to determine, on the face of the lease, whether the retail use is permitted.[32]

[31]Fitzroy Dental Pty Ltd v Metropole Management Pty Ltd & Anor [2013] VSC 344 at [37] and [38] per Croft J and Wellington v Norwich Union Life Insurance Society Limited [1991] 1 VR 333 at 335 per Nathan J.

[32]Melbourne Home Depot Pty Ltd v All Pavings Co Pty Ltd [2011] VCAT 1775 per Senior Member Walker and Croft and Hay, Retail Leases in Victoria at [30,60].

There are, however, a number of exclusions to the definition of retail premises contained in s 4(2) of the RLA. Only one exclusion is relevant here, that contained s 4(2)(d), which provides as follows:

(2) However, retail premises does not include the following premises-
…
(d) premises the tenant of which is –
(i)a body corporate whose securities are listed on a stock exchange, outside Australia and the external territories, that is a member of the World Federation of Exchanges; or
(ii)a subsidiary (as defined in section 9 of the Corporations Act) of such a body corporate;[33]

[33]I shall call such a subsidiary a ‘subsidiary of a foreign listed entity’ and this exclusion as the ‘foreign listed entity exclusion’.

The defendant maintained, without any dispute from the plaintiff, that whilst the defendant was the subsidiary of a foreign listed entity within the meaning of s 4(2)(d) of the RLA, the Premises were taken out of the definition of retail premises.

Retail Tenancy Dispute

Regardless of whether the foreign entity exclusion applies, the defendant contended that the RLA dispute resolution provisions in Part 10 apply by reason of s 81 of the RLA. Part 10 of the RLA, which refers to ‘Dispute Resolution’, has independent operation to the remainder of the Act. The second reading speech of the Retail Leases Bill 2003 and the Explanatory Memorandum make it clear that Part 10 extends the jurisdiction of VCAT to enable it to hear and determine disputes arising under or in relation to retail premises leases, whether or not the dispute arose under leases subject to the common law or which were not subject to the substantive provisions of the 1986 Act, the 1998 Act or the 2003 legislation.[34] It is not in dispute that s 81(1)(a)(i) and (ii) of the RLA do not apply to the Lease in this case.
[34]Hansard, Legislative Council 27 March 2003 at p. 652, M.R. Thomson MLC; Hansard, Legislative Assembly 27 February 2003 at p. 230-233, J. Brumby; Explanatory Memorandum cl. 81.

Pursuant to s 11(2) of the RLA:

Except as provided by Part 10 (Dispute Resolution) this Act only applies to a lease of premises if the premises are retail premises (as defined in section 4) at the time the lease is entered into or renewed.

The defendant submitted, that unless anything different is provided in Part 10 of the Act, the effect of s 11(2) of the RLA is such that if the provisions of s 4(2)(d) applies, then there is no jurisdiction.[35] Section 81, contained in Part 10, alters that presumption. The displacement of the effect of s 11(2) is to be found in s 81(1)(c) which provides that a retail tenancy dispute means:

…a dispute between a landlord and tenant arising under a lease that provides for the occupation of retail premises in Victoria to which none of the identified Acts apply or applied despite anything to the contrary in this Act (apart from s 81(2) and s 119(2)).

[35](sic) Defendant’s written Outline of Submissions, [60]. It is probably meant that there is jurisdiction in the Court.

The effect of s 81(1)(c) of the RLA is that for the purposes of Part 10 of the Act, the relevant criteria is only that the dispute arises under a lease that provides for the occupation of retail premises in Victoria ‘…despite anything to the contrary in this Act…’ Accordingly, s 81 broadens the ambit of the Act, for dispute purposes, and renders s 4(2)(d) otiose for the purposes of a dispute only.[36]
[36]Ibid.

Support for this view is found in State of Victoria v Tymbook Pty Ltd,[37] where Byrne J considered the jurisdiction of the Act and in particular the relationship between s 11 and Part 10 and said that:[38]

…The Scheme of the 2003 Act appears to be that the dispute resolution procedures of Part 10 have a far wider application that the rest of the Act. Accepting that s 11 limits the application of the Act generally to certain leases entered into after 1 May 2003, the wide definition of ‘retail tenancy dispute’ in s 81 clearly extends to disputes arising under other leases and to retail premises other than the premises referred to in s 11(2). The jurisdiction of the Tribunal under s 89(1), which depends upon an application seeking the resolution of a retail tenancy dispute, is similarly extensive. The consequences of this, having regard to s 89(4) is that, subject to the stipulated exceptions, such a dispute is not justiciable in this Court.
It is true that this creates a certain terminological awkwardness in the Act. For example, the undefined expressions ‘retail premises lease’ or ‘lease of retail premises’ in Part 10 may have a meaning different from those words in the rest of the Act. Furthermore, the conclusion which I have preferred means that the whole of s 11 should be qualified so as not to apply to Part 10. It may be thought surprising, therefore, that the introductory qualification in s 11(2) was not located before sub-s(1) and ss 1 and 2 were prefaced by ‘except as provided by Part 10’. But these difficulties cannot detract from the extensive terms in s 81(1).

[37][2005] VSC 267 (‘Tymbook’).

[38]Tymbook, [11]-[12].

The extended operation the RLA by reason of s 81(c) was made clear in Kallara Care Pty Ltd v A & M Meeuwesen Pty Ltd,[39] and in Burd & Cooper Pty Ltd v C&P Cooper Pty Ltd & Ors (Retail Tenancies).[40]
[39][2009] VCAT 2476 at [9]-[14] per Deputy President C. Aird.
[40][2011] VCAT 1416.

Accordingly, whether Part 10 of the RLA applies (by reason of s 81(1)(c)) does not turn on whether the Lease in question is a lease of retail premises within the meaning of the definition of retail premises in s 4 of the RLA. After 29 October 2013, the exemption in s 4(2)(d) no longer applies and the RLA applies, both as to the general provisions and Part 10.

Insofar as Part 10 is concerned, it applies by reason of s 82 of the RLA. That is to say, the Lease was a lease of retail premises at any time during the lease. The loss of the exemption pursuant to s 4(2)(d) is irrelevant for the purposes of Part 10 but even if it is relevant, the applicability of the RLA and Part 10, for even a short time, invokes the jurisdiction.

In support of this submission, certain differences in expression in s 81(1)(c) compared with other sections of the RLA were pointed out. In particular:

(a) section 81(1) provides that in Part 10 (Dispute Resolution) retail tenancy dispute means, rather than includes, a dispute between a landlord and tenant;

(b) section 81(1)(c) only applies where neither s 81(a) nor (b) is applicable to the Lease. That means it must not be a dispute between landlord and tenant arising under:

(i) or in relation to a retail premises lease to which the RLA applies or applied because of Part 3 of the RLA;

(ii) or in relation to a retail premises lease to which the retail Tenancies Reform Act 1998 (‘1998 Act’) or the Retail Tenancies Act 1986 (‘1986 Act’) applies or applied; and

(iii) a provision of the 1998 Act or the 1986 Act in relation to a lease to which that Act applies or applied;

(c) given that none of those Acts applies or applied to the Lease, why would the legislature nevertheless be using the term retail premises in the sense defined by s4? Having exhausted the application of ‘those Acts’, it does not make sense that in s 81(1)(c) the meaning of retail premises is the defined meaning;

(d) section 81(1)(c) uses different language to the other provisions, like ss 11 and 12, being the expression ‘arising under a lease that provides for occupation of retail premises’;

(e) section 81(1)(a) uses the expression retail premises lease whilst s 81(1)(c) does not;

(f) if the language was meant to have the same meaning as in ss 11 or 12, or in s 81(1)(c), the Parliament would have used the same terms;

(g) the expression at the end of s 81(1), ‘despite anything to the contrary in this Act (apart from subsection (2) and section 119(2))’, means despite anything other than Part 10 and excludes the defined meaning of retail premises in s 4. This reinforces the view that the definition in s 4 is irrelevant; and

(h) this reveals that there is a contrary intention disclosed in s 81 as to the meaning to be ascribed to retail premises, so that the defined term in s 4 does not apply.

In addition to contending that Part 10 applies to the Lease regardless of whether at the relevant time it is a lease of retail premises as defined, the plaintiff submitted that because the WFE ceased to exist on 29 October 2013, the exemption contained in s 4(2)(d) no longer applied after that date and the RLA, including Part 10, was applicable by reason of s 82. That is to say, the Lease was a lease of retail premises at any time during the Lease. If the loss of the exemption pursuant to s 4(2)(d) is relevant (which it was not according to the primary submission of the defendant), the applicability of the Act and Part 10, for even a short time, invokes the jurisdiction under Part 10 of the RLA.

The consequence of Part 10 of the Act applying is that VCAT has exclusive jurisdiction to hear and determine the issues alleged in the ASOC.

This is made clear by s 89(1), s 89(4) and s 98 of the RLA. In ABC Developmental Learning Centres Pty Ltd v BM Children Services Pty Ltd,[41] Pagone J described the effect of s 89(4) and s 98 of the Act as follows:

Section 98 makes clear that s 89(4) was intended to alter the jurisdiction of this Court by preventing this Court from hearing a retail tenancy dispute other than an application for relief against forfeiture or a claim for unconscionable conduct under Part 9 of the Act. Section 98 of the Act provides that it was the intention of s 89(4) ‘to alter or vary’ s 85 of the Constitution Act 1975 (Vic). Section 85 of the Constitution Act 1975 (Vic) confers upon this Court its jurisdiction as the superior Court of Victoria ‘with unlimited jurisdiction’.

[41][2010] VSC 262 [3].

His Honour went on to say:[42]

…the jurisdiction of this Court was expressly removed by s 89(4) of the Act through the Parliament’s deliberate and conscious intention to adopt the process required by s 85(5) of the Constitution Act 1975 (Vic) for the specific purpose of limiting the jurisdiction of this Court. In my view the jurisdiction expressly excluded by the legislature is not reconferred, re-enlivened or reactivated by a litigant bringing an action which is within jurisdiction. To hold otherwise would, in my view, be to act contrary to a clear dictate of Parliament. That may produce an undesirable policy outcome from one point of view (namely, that this Court cannot decide all of the matters and disputes between the parties) but such an outcome may be thought to be in furtherance of the broader policy outcome of channelling all disputes of this kind, including the forfeiture of claim, to VCAT. Indeed, counsel for the plaintiff candidly, and rightly, conceded that the proceeding commenced in this Court could wholly have been brought in VCAT (including the relief against forfeiture claim).

[42]Ibid [5].

Accordingly, it is contended that the proceeding is beyond the jurisdiction of the Supreme Court of Victoria and should be dismissed or forever stayed.

Plaintiff’s Submissions

The plaintiff’s submissions were a response to the defendant and I will use the same headings.

Extension of the Lease

The plaintiff maintains that a periodic tenancy arose during which time the defendant occupied the Premises for the purposes of undertaking remediation and not for retail purposes.[43] The plaintiff also contended that the disputes the subject of the proceeding arise under the Lease. That is, the Lease that expired at the time of the expiry of the extension. At all times, that Lease was not a lease of retail premises because of the foreign entity exclusion.
[43]Plaintiff’s Written Outline, [19].

Status of Defendant

It is clear and undisputed that at all material times during the term of the Lease as extended,[44] the defendant was a subsidiary of a foreign listed entity.[45] The Lease was therefore a lease of Premises excluded as retail premises by the foreign entity exclusion.[46]
[44]by the letter agreement of 6 July 2011, eg until 7 October 2011.
[45]Desmond Affidavit [7], [8] and [17–35].
[46]Section 4(2)(d) of the RLA.

The plaintiff does not dispute the evidence advanced by the defendant as to the changes in the WFE and accepts for the purposes of the argument in this application that by 29 October 2013 the original WFE had ceased to exist, or in the alternative, that the NYSE ceased to be a member of the WFE on 13 November 2012, by reason of which the defendant ceased to be a subsidiary of a foreign listed entity on one or the other of those dates.[47]
[47]The absence of a dispute as to these matters was for the purposes of this application only.

The plaintiff submits that these concessions do not affect the basis on which it says the RLA applies, and Part 10 does not apply in the circumstances of the dispute raised in this proceeding. That is because the plaintiff’s claims are made under the Lease (which expired on 7 October 2011). It is a ‘former lease’ under Part 10 of the RLA.[48]
[48]See s 83 of the RLA.

Retail Tenancy Dispute

The plaintiff submits that at no relevant time to the disputes the subject of this proceeding were the Premises, retail premises within the meaning of section 4 of the RLA. Thus the RLA, including Part 10, does not apply to the Lease. The disputes the subject of the proceeding arise under the provisions of the Lease, being, for the purpose of the application of Part 10 of the RLA, a former lease.

By virtue of the letter of 6 July 2011, the Lease was extended for 3 months until 7 October 2011, following which a periodic tenancy arose, during which time the defendant occupied the Premises not for retail purposes, but for the purposes of undertaking remediation of the property. This arises because of the express terms of the letter of 6 July 2011 and subsequent correspondence between the plaintiff and defendant exhibited to the Kaspen Affidavit.[49] During the periodic tenancy, the defendant occupied the Premises ‘under clause 3(f) of the Lease for the purpose of undertaking remediation of the Premises’.[50] The Premises were not occupied as or used as retail premises. Clause 1(i)(i) of the Lease, which set out the permitted use, expressly applied only during the term of the Lease. Thus, the occupation during the periodic tenancy was not within s 4(1)(a) of the RLA because under the terms of the Lease (being the periodic tenancy, assuming it to be a lease to which the RLA applied) the Premises were not used or to be used wholly or predominantly for the sale or hire of goods by retail or the retail provision of services.
[49]Kaspen Affidavit exhibits AWK-23, AWK-24, AWK-25 and AWK-26.
[50]These are the words of the letter agreement of 6 July 2011, see Desmond Affidavit, exhibit RJD-6.

The wide application of s 81(c) of the RLA advanced by the defendant depends on the effect of that section being: that even if the Lease is not caught by the 1986 Act, the 1998 Act or the RLA, the dispute resolution provisions in Part 10 of the RLA nevertheless apply to the Lease, because it is a retail tenancy dispute within the meaning of section 81. That in turn depends on the term retail premises where it appears in the words in s 81(1)(c) not being used in its defined sense.

The contrast with s 11 of the RLA is easily explained. That section is in the Part of the RLA dealing with the application of the Act as a whole. Section 11, properly understood, defines the application of the Act by reference to temporal matters, that is, when a retail premises lease is entered into or renewed. Subsection 11 (1) provides for the application of the Act to retail premises leases entered into after the commencement of the Act or renewed after that commencement. Subsection 11(2) clarifies that application by making clear that except in Part 10 the RLA only applies to those retail premises leases. The words in parenthesis in subsection 11(2), namely, ‘(as defined in section 4)’, do not bring with them the implication that the use of the references to retail premises in the phrase ‘retail premises lease’ in subsection 11(1) of the RLA is employing a different meaning for the defined term retail premises.

The decision in Tymbook should be distinguished as Byrne J did not contemplate a broader meaning being given to the expression retail premises in s 81(1)(c) than it bears, in terms of its primary application provisions and exceptions, in s 4 of the RLA. This is apparent from Byrne J’s express reference to the s 4 definition[51] and this also accords with the prime rule of construction of legislative/other instruments that where possible, and absent some very strong reasons to the contrary, words or expressions should be given the same meaning throughout the legislation or other instrument.[52]
[51]Tymbook, [14].
[52]See, for example, Craig Williamson Pty Ltd v Barrowcliff [1915] VLR 450 (Hodges J); Simpson v Nominal Defendant(1976) 13 ALR 218 at 224 (Foster J); and see Pearce and Geddes, Statutory Interpretation in Australia (6th ed), LexisNexis, Sydney, 2006, at [4.6], [4.7] and[6.62].

The plaintiff referred to the learned authors of Croft and Hay, Retail Leases Victoria, where it is said:[53]

A very broad scope (hence very broad VCAT jurisdiction, by reference to s 89) is given to the meaning “retail tenancy dispute”. It means a dispute between a “landlord” and “tenant” arising “under or in relation to” a retail premises lease to which the 2003 Act, the 1986 Act or the 1998 Act applies or applied: see s 81(1)(a); ... Alternatively it may mean a dispute between a “landlord and tenant” “arising under” a provision of the 1986 Act or the 1998 Act in relation to a lease to which one of those Acts applies (s 81(1)(b)) or “arising under” a lease “that provides for the occupation of retail premises in Victoria to which none of those Acts apply or applied” (s 81(1)(c)). The latter is also a significant extension of the meaning of “retail tenancy dispute” in terms of VCAT jurisdiction. It would seem that these provisions must mean or apply to leases which are “retail premises leases” under the provisions of the 2003 Act as they are not otherwise already caught by the 1986 Act or the 1998 Act. This would mean pre-1986 Act leases would be caught as would post-1986 and post-1998 Act leases which would or would have been caught by the 2003 Act definition of “retail premises lease”. Thus, for example, a lease of premises with a floor area in excess of 1000 m² which would otherwise be caught by the 2003 Act definition but which was excepted by the 1986 Act or the 1998 Act would now be caught by Pt 10.

[53]Retail Leases Victoria, loose-leaf, LexisNexis at [240,020].

The plaintiff pointed in particular to the sentences as showing that in the opinion of the authors, the definition of retail premises continues to apply where the expression is used in s 81(1)(c):

“…these provisions must mean or apply to leases which are “retail premises leases” under the provisions of the 2003 Act as they are not otherwise already caught by the 1986 Act or the 1998 Act. This would mean pre-1986 Act leases would be caught as would post-1986 and post-1998 Act leases which would or would have been caught by the 2003 Act definition of “retail premises lease”.

Thus, premises which would otherwise be excluded under the RLA definition of retail premises would still fall outside the ambit of Part 10 of that Act. In this case, because the dispute is in respect of a lease of Premises, the tenant of which is a subsidiary of a foreign listed entity, the dispute is not be caught by Part 10 of the RLA.

That is because the Lease under which the dispute the subject of this proceeding arises is the Lease that was entered into in September 1996 and which expired on 7 October 2011. That Lease is not a lease that provides for the occupation of retail premises in Victoria as the definition of retail premises in section 4(2)(d) of the RLA expressly excludes premises the tenant of which is a subsidiary of a foreign listed entity.

Put another way, at all material times during the term of the Lease under which the dispute arises, the defendant was a subsidiary of a foreign listed entity. The dispute arises under that Lease, and its term expired on 7 October 2011. Because the definition of lease includes a former lease, it is the Lease the term of which has expired that gives rise to the dispute. Because that Lease was at all times during its term subject to the foreign entity exclusion it is not a ‘lease that provides for the occupation of retail premises’ within the meaning of s 81(1)(c) of the RLA.

In A.B.C. Developmental Learning Centres Pty Ltd v B.M. Children’s Services Pty Ltd,[54] Pagone J considered a situation where, at the time the lease was entered into, the tenant was a subsidiary of a listed corporation but during the term of the lease the parent company was delisted from the stock exchange. He said:[55]

… In 2006 the plaintiff entered into a lease with the first defendant of a child care centre at Euroa for a term of 10 years and with the second defendant for a child care centre at Riddells Creek for a term of 10 years. At that time the plaintiff was a subsidiary of A.B.C. Learning Centres Ltd which at the time was a listed corporation within the meaning of s 9 of the Corporations Act 2001 (Cth). A consequence of that relationship was to exclude the leases from the meaning of “retail premises” under the Retail Leases Act 2003 (Vic) [56] (“the Act”) and not to enliven the application of its provisions.[57] ABC Learning Centres Ltd was, however, delisted from the stock exchange on 31 August 2009. The delisting of the parent company had, as one of its consequences, the effect of enlivening the provisions of the Act. That is because s 82 of the Act provides that Pt 10 applies to a lease of premises that are “retail premises at any time during the lease…

[54][2010] VSC 262.

[55]Ibid at [2].

[57]Section 11 of the 2003 Act.

That is not the situation in the present case. Here, the tenant plaintiff was a subsidiary of a foreign listed entity at all material times during the term of the Lease.

In the circumstances the dispute the subject of this proceeding is not caught by Part 10 of the RLA and is justiciable before the Supreme Court of Victoria.

Applicable Law
Summary Dismissal

Part 4.4 of the Civil Procedure Act 2010 (‘CPA’) sets out the test for summary judgment: a court may give summary judgment if satisfied that a claim, a defence or a counterclaim or part of the claim, defence or counterclaim, has no real prospect of success.[58]
[58]Section 63 of the CPA.

This liberalises the rules governing summary judgment in Victoria, such that it is easier to dispose of unmeritorious claims or defences summarily. The Court of Appeal has stated that the test:

[S]hould be construed as one of whether the respondent to the application for summary judgment has a ‘real’ as opposed to a ‘fanciful’ chance of success; that the ‘real chance of success’ test is to some degree a more liberal test than the ‘hopeless’ or ‘bound to fail’ test; and that, as the law is at present understood, the real chance of success test permits of the possibility that there may be cases, yet to be identified, in which it appears that, although the respondent’s case is not ‘hopeless’ or ‘bound to fail’, it does not have a real prospect of succeeding.[59]

[59]Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [2013] VSCA 158 [29] per Warren CJ and Nettle JA (Neave JA agreeing).

The test must be applied according to its own terms and not according to considerations of whether the proceeding is ‘hopeless’ or ‘bound to fail’. To adopt ‘an unduly constrained, historical approach to the construction of s 63’ would ‘subvert the purpose of the provision’.[60]
[60]Ibid [25] per Warren CJ and Nettle JA (Neave JA agreeing).

Courts must, however, continue to exercise the power to terminate proceedings summarily with caution. Courts should therefore only exercise the power if it is clear that there is no real question to be tried. This is so irrespective of whether an application for summary judgment is made on the basis that:

(a) the pleadings do not disclose a reasonable cause of action, and no amendment could cure this error; or

(b) the action is frivolous, vexatious or an abuse of process; or

(c) the application for summary judgment is supported by evidence.[61]

[61]Ibid [35].

The power to give summary judgment must be exercised in accordance with the overarching purpose of the CPA and taking into account the fact that, if granted, a party will be deprived of the chance to pursue its claim or defence.[62]
[62]Ibid [42] per Neave JA).

These principles were confirmed by the Court of Appeal in Mandie v Memart Nominees Pty Ltd[63] where Kyrou, Ferguson and McLeish JJA observed:

According to Lysaght: a prospect which is not ‘real’ is ‘fanciful’; although the ‘no real prospect of success’ test in s 63(1) of the CP Act is more liberal than the common law test of ‘hopeless’ or ‘bound to fail’, there may not be much difference between them in practice; and, properly understood, a real question to be tried is one which realistically might result in the respondent to an application for summary judgment succeeding in the proceeding.[Footnote omitted].

[63][2016] VSCA 4 [45].

If there is no real prospect of success, a court may nevertheless allow a matter to proceed to trial if:

(a) it is not in the interests of justice to summarily dispose of the proceeding;[64] or

(b) the dispute is of such a nature that only a full hearing on the merits is appropriate.[65]

[64]Section 64(a) of the CPA.

[65]Section 64(b) of the CPA.

Whether a proceeding should be allowed to go to a full hearing on the merits must be determined according to the circumstances of each case.[66]
[66]Barber v State of Victoria [2012] VSC 554 [15].

The Court may stay a proceeding, either pursuant to its inherent power or pursuant to s 30 of the Supreme Court Act, to prevent an abuse of the processes of the Court.[67]
[67]Victoria v Day Neilson Jenkins & John (a firm) [1993] VR 545 at 559.

The inherent jurisdiction to stay an action as vexatious is to be exercised only when the action is clearly without foundation and when to allow it to proceed would impose a hardship upon the defendant which may be avoided without risk of injustice to the plaintiff.[68]
[68]Cox v Journeaux (No. 2) (1935) 52 CLR 713 at 720-1 per Dixon J.

The principles for determining whether a proceeding should be determined summarily under r 23.01 of the Rules are the same whether the application is made under the rules or the inherent jurisdiction of the Court.[69]
[69]Day v Victorian Railways Commissioner (1948) 78 CLR 62; General Steel Industries Inc. v Commissioner for Railways (1964) 112 CLR 125 at 129.

The power to summarily determine a proceeding will be exercised when it is particularly clear or the Court has a high degree of certainty about the ultimate outcome of the proceeding, namely that it is untenable.[70]
[70]Optus Networks Pty Ltd v Horman [2010] VSC 108 per Kaye J at [20].

Statutory Interpretation

The fundamental object of statutory construction in every case is to ascertain the legislative intention. The rules of interpretation are no more than rules of common sense, designed to achieve this object.[71] The discovery of the legislative intent, however, is an objective process ascertained by interpreting the statute.[72] That is, the objective intention of the legislation is revealed by its proper construction.[73] The reach and operation of the law is determined by reference to the language, purpose and scope of the law, viewed as a whole within its context, as well as by reference to considerations of consistency and fairness.[74] The plurality of the High Court in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue summarised the approach as follows:[75]
[71]Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297, 320 (Mason and Wilson JJ).
[72]Wenn v Attorney-General (Vic) (1948) 77 CLR 84 at 122 per Dixon J; Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252 [31]; Momcilovic v R (2011) 245 CLR 1, 136 [327] (Hayne J) (‘Momcilovic’).
[73]Momcilovic, 136 [327] (Hayne J).
[74]Ibid, [315], referring to Project Blue Skye Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-2 [69]-[70] (‘Project Blue Skye’).
[75](2009) 239 CLR 27; [2009] HCA 41 [47] (Hayne, Heydon, Crennan and Kiefel JJ).

(a) the task of statutory construction must begin with a consideration of the text itself;[76]
[76]Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (Vic) (2001) 207 CLR 72; [2001] HCA 49, [9] (Gaudron, Gummow, Hayne and Callinan JJ), [46] (Kirby J); Stevens v Kabushiki Kaisha Sony Computer Entertainment (2005) 224 CLR 193; [2005] HCA 58 [30] (Gleeson CJ, Gummow, Hayne and Heydon JJ), [167]-[168] (Kirby J); Carr v Western Australia (2007) 232 CLR 138, [6]; [2007] HCA 47 (‘Carr’) (Gleeson CJ); Director of Public Prosecutions (Vic) v Le (2007) 232 CLR 562; [2007] HCA 52 [85] (Kirby and Crennan JJ); Northern Territory v Collins (2008) 235 CLR 619; [2008] HCA 49 [99] (Crennan J).

(b) historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text;[77]

(c) the language which has actually been employed in the text of legislation is the surest guide to legislative intention;[78] and

(d) the meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision,[79] in particular the mischief it is seeking to remedy.[80]

[77]Nominal Defendant v GLG Australia Pty Ltd (2006) 228 CLR 529; [2006] HCA 11 [22] (Gleeson CJ, Gummow, Hayne and Heydon JJ), [82]-[84] (Kirby J). See also Combet v Commonwealth (2005) 224 CLR 494; [2005] HCA 61 [135] (Gummow, Hayne, Callinan and Heydon JJ); Northern Territory v Collins (2008) 235 CLR 619; [2008] HCA 49 [99] (Crennan J).

[78]Hilder v Dexter [1902] AC 474, 477-478 (Earl of Halsbury LC).

[79]Commissioner for Railways (NSW) v Agalianos (1955) 92 CLR 390 at 397; [1955] HCA 27 (Dixon CJ) quoted with approval in Project Blue Sky, [69] (McHugh, Gummow, Kirby and Hayne JJ).

[80]Re Heydon’s Case (1584) 3 Co Rep 7a at 7b ; 76 ER 637 at 638.

Extrinsic materials are admissible under s 35 of the Interpretation of Legislation Act 1984(Vic). As is well known, that section requires a construction that would promote the purpose or object underlying the Act, which is to be preferred to a construction that would not promote that purpose or object. The requirement to look to the purpose or object of an Act is more than an instruction to adopt the traditional mischief or purpose rule in preference to the literal rule of construction and s 35 of the Interpretation Act requires no ambiguity or inconsistency in a statutory provision before a court is not only permitted, but required to have regard to purpose.[81]
[81]Mills v Meeking (1990) 169 CLR 214 at 235; See also Tracey J in JJ Richards & Sons Pty Ltd v Fair Work Australia [2012] FCAFC 53, [52] and the cases there cited.

Consideration

I will deal with the submissions using the same headings as I have used to outline the parties submissions.

Extension of the Lease

The agreement in the letter of 6 July 2011 expressly provided for the defendant to continue to occupy the Premises under clause 3(f) of the Lease for the purpose of undertaking remediation. That remediation was expressed in the letter to be at such level as to render the Premises free from contamination within the meaning of clause 5(d) of the Lease.

Clause 3(f) of the Lease provides:

It is further agreed by the parties as follows:
(f)That if Mobil shall continue in occupation of the Premises beyond the expiration of the term then the tenancy shall be deemed a quarterly tenancy at a quarterly rent calculated by reference to the rent payable by Mobil at the expiration of the term and otherwise on the same terms and conditions as are contained in this Lease so far as they can be construed to apply to a quarterly tenant, which tenancy may be determined by either party by three months written notice to the other which may be given so as to expire at any time.

Clause 5(f) of the Lease provides:

At the expiration or prior termination of the term of this Lease or any renewal Mobil shall thereupon at its expense clean up the Premises so as to be free from contamination.

I agree with the plaintiff submissions that by virtue of the letter of 6 July 2011, the Lease was extended for 3 months until 7 October 2011, following which a periodic tenancy arose, during which time the defendant occupied the Premises not for retail purposes, but for the purposes of undertaking remediation.

This seems to me to be the natural and ordinary meaning of the express terms of the letter of 6 July 2011, and subsequent correspondence between the plaintiff and defendant exhibited to the Kaspen Affidavit,[82] when read with the terms of the Lease.
[82]Kaspen Affidavit exhibits AWK-23, AWK-24, AWK-25 and AWK-26.

It appears to be undisputed that during the periodic tenancy, the defendant occupied the Premises ‘under clause 3(f) of the Lease for the purpose of undertaking remediation of the Premises’[83] and the Premises were not occupied as retail premises. Clause 1(i)(i) of the Lease, which set out the permitted use, expressly applied only during the term of the Lease. Thus, the occupation during the periodic tenancy was not within s 4(1)(a) of the RLA because under the terms of the Lease (being the periodic tenancy, assuming it to be a lease to which the RLA applied) the Premises were not used or to be used wholly or predominantly for the sale or hire of goods by retail or the retail provision of services.
[83]These are the words of the letter agreement of 6 July 2011, see Desmond Affidavit, exhibit RJD-6.

In my view, however, it does not matter whether or not the periodic tenancy arising at the expiration of the term of the Lease is considered as a new lease or not. That is because it is clear, in my view, that the plaintiff has a real prospect of success in its claim that the disputes arise under the expired Lease, that is the former Lease the term of which expired on 7 October 2011.

Status of Defendant

The parties are in agreement that at all material times during the term of the Lease as extended by the letter agreement of 6 July 2011 (until 7 October 2011), the defendant was a subsidiary of a foreign listed entity.[84] It is therefore undisputed that the Lease was a lease of Premises excluded as retail premises by the foreign entity exclusion.[85] That is, the Lease was not a lease of retail premises as the definition in s 3 of the RLA makes clear, as does the wording of s 4(2), that to be a lease of retail premises it is necessary to take account of the meaning in s 4(1)(a) as well as the exclusions in s 4(2) of the RLA.
[84]Desmond Affidavit [7], [8], [17–35].
[85]Section 4(2)(d) of the RLA.

The plaintiff is right, in my view, that the fact that the defendant ceased to be the subsidiary of a foreign listed entity later (after the expiry of the term of the Lease) does not affect the basis on which the RLA is generally not applicable to the Lease, and in particular Part 10 does not apply, in the circumstances of the dispute raised in this proceeding. That is because it is under the Lease (which expired on 7 October 2011) that the plaintiff’s claims are made. It is a ‘former lease’ under Part 10 of the RLA.[86] It is also because under the periodic tenancy (or the new lease for which the defendant contended) that subsisted after the expiry of the term of the Lease that the Premises were not ‘used or to be used as retail premises as defined by s 4(1)(a) of the RLA.
[86]See s 83 of the RLA.

Jurisdiction under the Retail Leases Act

It is common ground that when the Lease was entered into in 1996 it was not subject to the Retail Tenancies Act 1986 (Vic) (‘RTA’), because, amongst other reasons, the Premises were in excess of 1,000 m² and excluded from the operation of the RTA pursuant to the definition of retail premises contained in s 3.[87]
[87]Desmond Affidavit, at [4], Exhibit RJD-3; Plaintiff’s Outline of Submissions, [10]-[12].

It is also common ground that the Retail Tenancies Reform Act1998 (Vic) (‘the 1998 Act’) provides that it applies to a retail premises lease that is entered into after the commencement of that Act.[88] Accordingly, the 1998 Act does not apply to the Lease because it was entered into before the commencement of that Act.[89]
[88]Section 4(1).
[89]Defendant’s Outline of Submissions at [24]; Plaintiff’s Outline of Submissions, [13].

As the defendant submitted, the jurisdiction of this Court is excluded by the operation of a series of sections of the RLA. Section 89(1) confers jurisdiction on VCAT:

…to hear and determine an application by any of the following persons seeking resolution of a retail tenancy dispute—
(a) a landlord or tenant under a retail premises lease;

Section s 89(4) of the RLA provides that the jurisdiction of VCAT is exclusive of the Supreme Court with some exceptions and provides as follows:

Subject to section 23(4) (key-money and goodwill payments prohibited), a retail tenancy dispute other than –
(a) an application for relief against forfeiture; or
(b) a claim under Part 9 (Unconscionable Conduct); or
(c) a retail tenancy dispute referred to in section 81(1A) -
is not justiciable before any other tribunal or a court or person acting judicially within the meaning of the Evidence (Miscellaneous Provisions) Act 1958.

Section 98 of the RLA states that it is the intention of s 89(4) to alter or vary s 85 of the Constitution Act 1975 (Vic).

Section 3 of the RLA defines retail tenancy dispute in Part 10 as having the meaning given by s 81. That section provides:

81 Meaning of retail tenancy dispute
(1)In this Part, retail tenancy dispute means a dispute between a landlord and tenant -
(a)arising under or in relation to a retail premises lease to which
(i)this Act applies or applied because of Part 3; or
(ii)the Retail Tenancies Reform Act 1998 or the Retail Tenancies Act 1986 applies or applied; or

(b)arising under a provision of the Retail Tenancies Reform Act 1998 or the Retail Tenancies Act 1986 in relation to a lease to which that Act applies or applied; or
(c)arising under a lease that provides for the occupation of retail premises in Victoria to which none of those Acts apply or applied—

despite anything to the contrary in this Act (apart from subsection (2) and section 119(2)).

Sections 82 and 83 of the RLA provide:

82 Application of Part to retail premises
In this Part, a lease of retail premises includes a lease of premises that are retail premises at any time during the lease but before a referral under section 86 is made in relation to that lease (whether or not the premises are retail premises when that referral is made).[90]
83 Part applies to current and former leases
In this Part—
landlord includes a former landlord;
lease includes a former lease;
tenant includes a former tenant.

[90]Section 86 deals with referrals of retail tenancy disputes to the Small Business Commissioner for mediation.

It is also the case that s 3 of the RLA defines ‘landlord’ to include, in Part 10, a former landlord, because of s 83’. The term ‘tenant’ is defined similarly.

By s 82 of the RLA, Part 10 applies to a lease of premises that are retail premises at any time during the lease…’ That means, as the defendant rightly submitted, that if at any time during the term of the Lease the defendant ceased to be a subsidiary of a foreign listed entity, then s 4(2)(d) of the RLA ceases to operate to exclude the Premises from the meaning of retail premises.[91]
[91]A.B.C. Developmental Learning Centres Pty Ltd v B.M. Children’s Services Pty Ltd, [2010] VSC 262 [2].

The term retail premises lease where it appears in s 81 (and other sections) is not defined. Section 3 of the RLA, however, defines retail premises, as having the meaning given by s 4. Section 4(1)(a) defines retail premises to mean premises that under the terms of the lease relating to the premises are used, or are to be used, wholly or predominantly for the sale or hire of goods by retail or the retail provision of services. It is not in dispute that during the term of the Lease, the Premises satisfied the definition in s 4(1)(a) of the RLA.

Section 11 sets out the application of the Act generally as follows:

(1) This Act applies to a retail premises lease that is—
(a)entered into after the commencement of this section; or
(b)renewed after the commencement of this section, whether the lease was entered into before or after that commencement.

(2)Except as provided by Part 10 (Dispute Resolution), this Act only applies to a lease of premises if the premises are retail premises (as defined in section 4) at the time the lease is entered into or renewed.

It is common ground that s 11(1)(a) of the RLA does not apply by reason of the Lease being entered into prior to the operation of the Act and s 11(1)(b) does not apply because any extension of the Lease was not an extension of a retail premises lease (as required by s 9 of the Act[92]) by reason of s 4(2)(d) of the Act; that is to say, the Premises were excluded because Mobil was a subsidiary of a foreign listed entity. The defendant submitted, however, that the effect of sub-section 11(2) is that Part 10 of the RLA applies to the Lease notwithstanding the provision of s 11(1).
[92]Assuming, without deciding, that the extension of the lease was a renewal within s 9 of the RLA.

Retail Tenancy Dispute

In order to determine whether the dispute or disputes in this proceeding are within the meaning of retail tenancy dispute in s 81(1)(c) of the RLA, it is important to first focus on the dispute as revealed by the issues in the pleadings. As the defendant rightly put it, the plaintiffs’ claims are pleaded as arising under express and implied terms of the Lease, that is, the lease dated 10 September 1996 for a term of 15 years that commenced on 8 July 1996 and expired on 7 July 2011, or with the extension, expired on 7 October 2011.[93] It is alleged that the defendant breached those terms of the Lease giving rise to the entitlement of the plaintiff to specific performance of the obligation under the Lease to remediate the Premises, including the obtaining of necessary ancillary environmental audits and reports, and to damages in addition to specific performance.
[93]The defendant pleads in paragraph 14 of its most recent defence filed on 23 September 2015 that the Lease expired at the end of the extension on 7 October 2011 and the defendant remained in occupation under clause 3(f) of the Lease until 18 December 2014.

It seems to me that the cause of action pleaded by the plaintiff is predicated on the Lease having expired because the obligation under clause 5(f) of the Lease only arises at its expiration. It is common ground that the Lease has expired.

Thus, the Lease under which the cause of action arises is the former Lease that expired in October 2011. That Lease was not a lease of retail premises within the meaning of s 4 of the RLA because during the whole of the term of the Lease, s 4(2)(d) of the RLA applied to exclude the Premises from the definition of retail premises. There is, therefore, a real prospect of the plaintiff establishing that the disputes arising in this proceeding are not within the meaning of retail tenancy dispute as that term is defined in s 81 of the RLA. It is only after the expiration of the Lease that the defendant ceased to be a subsidiary of a foreign listed entity. It is common ground that the defendant ceased to be such a subsidiary at the latest in November 2013, long after the Lease had expired and when the defendant occupied the Premises solely for the purpose of remediation.

If it is necessary to consider what use the Premises were being put to, and whether or not they were still retail premises at a later point in time for the purposes of s 4 of the RLA, the evidence in the Kaspen Affidavit shows clearly that the Premises were not used or to be used for retail purposes after October 2011. The Premises were in occupation only for the purpose of remediation. That follows from a combination of the express terms of the letter agreement of 6 July 2011 and the application of clause 3(f) and 5(f) of the Lease. The periodic tenancy governed by clause 3(f) of the Lease was by the terms of that clause ‘the same terms and conditions as are contained in this Lease so far as they can be construed to apply to a quarterly tenant’. When that term is read with the letter of 6 July 2011 and the obligation arising under clause 5(f) of the Lease, the result is that there is a real as opposed to fanciful prospect that the permitted use provision of the Lease is no longer applicable to the periodic tenancy. The evidence is that after October 2011, the Premises were in fact not used as a petrol service station (and the other related activities allowed by clause 1(i)(i) of the Lease). The result is that if and in so far as the relevant ‘lease’ under which the dispute arises is the periodic tenancy in the period post October 2011, then the Premises were not retail premises under s 4(1)(a) of the RLA during that period.

The wide application of s 81(c) of the RLA advanced by the defendant depends on the term retail premises, where it appears in the words in s 81(1)(c), not being used in its defined sense.

The approach to the interpretation of the RLA to which I have referred above requires that I begin with a consideration of the text itself. The language which has actually been employed in the text of legislation is the surest guide to the legislative intention.

Contrary to the defendant’s submissions, in my view, there is a real as opposed to fanciful prospect that the plaintiff’s contention that in s 81 the term retail premises carries the meaning of the defined term in s 4 of the RLA, for the following reasons:

(a) section 3, the definitions section, commences ‘In this Act -’ without the usual qualification ‘unless the contrary intention appears’, or words to that effect. The term retail premises is defined, without distinction between any different Part of the Act[94] to have the meaning given by s 4;
[94]as some other definitions are, see for example landlord and tenant.

(b) there is a prime rule of construction of legislation that where possible, and absent some very strong reasons to the contrary, words or expressions should be given the same meaning throughout the legislation or other instrument;[95]
[95]See, for example Craig Williamson Pty Ltd v Barrowcliff [1915] VLR 450 (Hodges J); Simpson v Nominal Defendant(1976) 13 ALR 218, at 224 (Foster J); and see Pearce and Geddes, Statutory Interpretation in Australia (6th ed), LexisNexis, Sydney, 2006, at [4.6], [4.7] and[6.62].

(c) in relation to s 11(2) of the RLA, I agree with the plaintiff’s approach to the interpretation of that section. It is in the Part of the RLA dealing with the application of the Act as a whole. Section 11, properly understood, is defining the application of the Act by reference to temporal matters, that is, when a retail premises lease is entered into or renewed. Subsection 11 (1) provides for the application of the Act to retail premises leases entered into after the commencement of the Act or renewed after that commencement. Subsection 11(2) clarifies that application by making clear that except in Part 10, the RLA only applies to those retail premises leases. The words in parenthesis in subsection 11(2) ‘(as defined in section 4)’, do not bring with them the implication that the use of the references to retail premises in the phrase ‘retail premises lease’ in subsection 11(1) of the RLA is employing a different meaning for the defined term retail premises;

(d) what s 11(2) of the RLA may do is make clear that Part 10 extends VCAT’s jurisdiction beyond leases to which the RLA applies generally by s 11 to the other categories of leases specified in s 81. These include leases to which the earlier Acts applied. It is also relevant to contrast the temporal application of s 11 and the non-temporal application of s 81, which may explain the careful use of words by the draftsperson in both sections; and

(e) the defendant’s argument ultimately depends on the expression at the end of s 81(1), ‘despite anything to the contrary in this Act (apart from subsection (2) and section 119(2))’, having the effect of excluding the meaning to be given to the defined term retail premises. Although this argument is not devoid of merit, it gives too much work to do to that expression and flies in the face of a defined meaning which is not expressed to be subject to exceptions.

Because the plaintiff does not claim under any lease arising after the expiry of the Lease, this interpretation is not affected by the contention by the defendant that the effect of the extension of the Lease is the surrender of the Lease and the grant of a new lease, nor is it affected by the contention that the consequence of Mobil remaining in occupation and paying rent on a three monthly basis is to confer tenure under the general provisions of the Act for a period of five years commencing on 29 October 2013.[96]
[96]See s 21(2A) of the RLA.

The reasons of Byrne J in Tymbook do not, in my view, support the submission that the phrase retail premises is not used in its defined sense. In Tybrook, there was a specific finding that the lease in question was a lease of retail premises. It is not authority for the proposition that the definition of retail premises in s 4 of the RLA is to be ignored in determining whether s 81(1)(c) is applicable. Some of his Honour’s remarks in the passage quoted above[97] are clearly obiter dicta particularly his observation that:

…this creates a certain terminological awkwardness in the Act. For example, the undefined expressions ‘retail premises lease’ or ‘lease of retail premises’ in Part 10 may have a meaning different from those words in the rest of the Act.

[97]At paragraph 41.

The decision in Tymbook is, in any event, distinguishable from the present case because in Tymbook, it was the timing of the entry into and renewal of the lease that took it outside the operation of the general provisions of the RLA, rather than its status as a lease of retail premises.

It is also relevant to note that in Fitzroy Dental Pty Ltd v Metropole Management Pty Ltd & Anor,[98] Croft J proceeded on the footing that:

If the Lease of the Premises is a lease of “retail premises” governed by the provisions of the Act, any “retail tenancy dispute” in relation to the Premises must be heard and determined by the Victorian Civil and Administrative Tribunal (“VCAT”), subject to any applicable exceptions, on the basis VCAT has exclusive jurisdiction to hear and determine a “retail tenancy dispute”.[99]

[98][2013] VSC 344 at [6].

[99]Retail Leases Act 2003 ss 81 and 89; and see State of Victoria v Tymbook [2005] VSC 267 (Byrne J); and Croft and Hay, Retail Leases Victoria (LexisNexis, Looseleaf) at [240,025].

It is express in this analysis that Croft J considered that Tymbook, properly understood, did not eschew the application of the definition of retail premises in s 4 of the RLA to the meaning of the expression in s 81(1)(c) ‘arising under a lease that provides for the occupation of retail premises in Victoria to which none of those Acts apply or applied’.

The VCAT decision in Kallara Care Pty Ltd v A & M Meeuwesen Pty Ltd,[100] supports this approach. In that case, the question was whether s 92 of the RLA applied to limit the availability of costs orders. That turned on whether the dispute was a retail tenancy dispute within the meaning of s 81 of the RLA. The decision is that of Deputy President Aird who held that:

It is clear that the provisions of the RLA regulating leases of retail premises do not apply to this lease which was entered into in 2001. However, the question is whether this is a retail tenancies dispute under s81((1)(c) of the RLA. Section 81(1)(c) extends the dispute resolution provisions of the RLA to disputes arising under all leases for the occupation of retail premises. [101]

[100][2009] VCAT 2476 at [9]-[14] per Deputy President C. Aird.

[101]Ibid at [8].

The exceptions in s 4(2) of the RLA were not relevant in that case. The Deputy President concluded:

…[C]ounsel for the applicant concedes that under the 2001 lease the ‘premises are used for the retail provision of goods and services’. In my view, it matters not whether the premises were ‘retail premises’ as defined in the RTRA[102] which I accept they were not. The dispute resolution procedures in Part 10 of the RLA extend to all leases for retail premises, as defined in s4 of the RLA.

[102]A reference to the Retail Tenancies Reform Act 1998.

These passages make quite clear that VCAT’s approach was to apply the definition of retail premises in the interpretation of s 81 of the RLA. Indeed, the case illustrates that there are leases that were not leases of retail premises under the earlier legislation which are specifically the subject of the dispute resolution procedures in Part 10 because of the operation of s 81(1)(c) of the RLA. This is an instance of the wider operation of Part 10 to which the extrinsic materials refer (as to which see below)

The decision in Burd & Cooper Pty Ltd v C&P Cooper Pty Ltd & Ors (Retail Tenancies)[103] in no way affects this interpretation of s 81(1)(c) of the RLA. That case also concerned so far as relevant to the argument in this case, the application of s 92 of the RLA to the costs of the proceeding in VCAT. The decision turned on the application of s 81(1)(c) to a lease that was contended to be excluded from the application of the general provisions of the RLA because it was a retail premises lease of less than one year and excluded from the application of the RLA by s 12(1). In that case, the Senior Member of VCAT concluded that:[104]

Section 12 of the RLA may operate to exclude the application of that Act as it would otherwise affect the rights and obligations of the parties under the Second Lease but does not exclude the operation of the Act in respect of the dispute between the parties. The RLA still operates to regulate the retail tenancy dispute, which exists between the landlord and tenant.
In other words, the application of the Act draws a distinction between regulating a retail tenancies lease for a term of less than one year and regulating a retail tenancy dispute, even where that dispute concerns a lease that provides for the occupation of retail premises in Victoria to which the Act does not otherwise apply. So much is clear by the express words, used in s 81(1), that it is to operate despite anything to the contrary in the RLA (apart from subsection (2) and subsection 119 (2) of that Act).
In my view, such an interpretation is entirely consistent with the operation of the RLA. In particular, although the Act does not operate to regulate certain retail premises leases which are for a period of less than one year, it does nevertheless maintain regulation over disputes between landlords and tenants, even if the dispute relates to a retail lease agreement that is not otherwise controlled by the operation of the Act. Consequently, those provisions that require a retail tenancies lease to be signed, provisions dealing with the need to provide a disclosure statement and other provisions dealing with the agreement between the parties may not apply where s 12 excludes the operation of the Act. However, that does not mean that those provisions that regulate a dispute between the landlord and tenant are no longer operative.

[103][2011] VCAT 1416.

[104]Ibid [57]-[59].

Nothing in the reasons for decision detracts from the application of the definition of retail premises in the interpretation of s 81(1)(c) of the RLA. It does, however, illustrate the wider application of Part 10 as expressed in the Second Reading Speech of the Treasurer:[105]

The Bill also extends the jurisdiction of the Victorian Civil and Administrative Tribunal to enable it to hear and determine disputes arising under or in relation to retail premises leases, whether or not those disputes arose under leases subject to the common law, the 1986 act (sic), the 1998 act (sic) of the Bill. This is of significant importance to tenants under pre-1998 leases, who currently cannot have disputes heard by VCAT.

[105]Hansard, Legislative Assembly, 27 February 2003, p 232.

In this case, to the extent that there is any lack of clarity in the text of s 81(1), the extrinsic materials do not displace the clear meaning of the text of s 81(1)(c) of the RLA as employing the expression retail premises in its defined sense.

Conclusion

For the reasons given, I consider that there is a real as opposed to a fanciful prospect that the jurisdiction of this Court is not excluded by the operation of s 89 of the RLA. For the same reason, it is neither an abuse of the process of the Court, nor is it vexatious for the plaintiff to have commenced proceedings in the Supreme Court of Victoria. Moreover, for the reasons discussed, it is not in the interests of justice to summarily dispose of the proceeding.[106]
[106]Section 64(a) of the CPA.

The defendant’s summons should therefore be dismissed. Unless there is some matter that the parties submit is relevant to change the usual costs consequences, the defendant should pay the plaintiff’s costs on a standard basis.

[56]Section 4(2)(c)(ii) of the 2003 Act.

[2016] VSC 777

13 December 2016