Corp of the City of Adelaide v Nemo Nominees P/L No. DCCIV-98-4 Judgment No. D9

[1999] SADC 9

THE CORPORATION OF THE CITY OF ADELAIDE
V NEMO NOMINEES PTY. LTD.
[1999] SADC 9

Judge Bishop

Civil

In the Adelaide Magistrates’ Court on 13 November 1996, the Corporation of the City of Adelaide (“the plaintiff”) claimed the amount of $7,000 from Nemo Nominees Pty. Ltd. (“the defendant”),

“being for monthly licence fee [from] April 1996 - October 1996, full particulars whereof the Defendant has had.”

In this court on 2 July 1998, by amended defence and amended counterclaim, the defendant denied that the plaintiff was entitled to recover those licence fees and counterclaimed, inter alia, the amount of $33,351.35 from the plaintiff for loss and damage suffered in consequence of not having access to “the Licensed Area” at the times specified in the licence.

The claim

In proof of the plaintiff’s claim, Dr. Robert Baxter sought to tender at trial, and rely solely upon, a typewritten document of five pages entitled, “LICENCE PURSUANT TO SECTION 370a OF THE LOCAL GOVERNMENT ACT”, under the name of the plaintiff and above this typewritten name and title:

“RAY THORNE
Manager, Administrative Support
Urban Services”.

For the defendant, Mr. Neil Strawbridge objected to the tender of that document (which was received de bene esse as exhibit P1 and shall here be referred to as “the licence”).  In his submission (T2),

“we are a party to the licence, but the dispute in the matter turns upon whether the licence is, if I might call it loosely, a licence to occupy land at a commercial rental or whether it’s something else, which my friend, I’m sure, will tell you about, so if my friend seeks to tender the document on the basis that the issues as to whether it’s a licence to occupy land currently raised, then I object to it, because under the Evidence Act, this would be an appropriate case where a witness should be called to prove the document to deal with the circumstances in which it arises.”

(My emphasis.)

Having regard to the pleadings (to which reference shall later be made), clearly, in my view, the dispute between the parties is not as to whether the licence was validly issued and here relevant, but as to the proper construction and legal effect of the licence and whether the licence conferred upon the defendant an interest in the land to which the licence related. In the circumstances of this case, I am not of the opinion, pursuant to sections 45a and 45b of the Evidence Act, that the person by whom, or at whose direction, the licence was prepared, could and should have been called by the party tendering the licence so as to give evidence of the matters contained therein (section 45a) or to depose of his own knowledge to the statements that are contained or implicit in, or may be inferred from, the contents of the licence (section 45b). In the circumstances which here emerged and shall be later related, I am also not of the opinion that the evidentiary weight of the licence was slight and outweighed by the prejudice that might result to the defendant from the admission of the licence in evidence, or that it would be otherwise contrary to the interests of justice to admit the licence in evidence (cf. section 45a (2)(b) and (c) and section 45b (3)(b) and (c)).

For these reasons, in my view, the licence (exhibit P1) is here admissible in evidence without further proof and, as provided in section 45a (1)(b) of the Evidence Act,

“shall be evidence of any fact stated in the [business] record, or any fact that may be inferred from the record (whether the inference arises wholly from the matter contained in the record, or from that matter in conjunction with other evidence).”
(My emphasis.)

While the defendant objected to tender of the licence (exhibit P1) in proof of the plaintiff’s claim, there was tendered, without objection, in support of the defendant’s amended defence to that claim and in proof of the defendant’s amended counterclaim, a signed ‘copy’ of that licence which, together with the annexed plan depicting the “Licensed Area”, here became exhibit D8.  Furthermore, although the defendant pleaded (in paragraph 7 of the amended defence) that,

“The plaintiff is in breach of the licence, which breach amounts to anticipatory breach of contract, whereby the plaintiff has repudiated the licence, which the defendant accepts”
(my emphasis),

in paragraph 9.2 of the amended counterclaim the defendant pleaded that,

“As a consequence of the defendant not having access to the Licensed Area at the times set out in the licence, the defendant has suffered loss and damage”

(my emphasis),

which were particularized (in paragraph 9.2A) as being:

“The defendant’s loss in trading for the period from 1 February 1996 to 31 May 1997 is the amount of $33,351.35, such loss appearing in the financial statements for the business known as ‘Anto’s Diner’ for the 16 month period from 1 February 1996 to 31 May 1997.”

From the evidence presented in respect of the counterclaim, it is apparent that the defendant continued to make use of the licensed area until 11 February 1997. By thus affirming the licence, the defendant can hardly be heard to say that it had accepted a repudiation of the licence by the plaintiff.

Conditions of the licence (which commenced on 1 April 1996) provided that the licence fee shall be $12,000 per annum, subject to review on each and every anniversary date in accordance with rises in the CPI (condition 2) and that the licence fee shall be paid to the plaintiff in equal instalments of $1,000 each, subject to annual review, on the first day of each and every month (condition 3).  When the claim was filed on 13 November 1996, licence fees in respect of eight months and amounting to $8,000 were payable by the defendant, of which amount, upon the evidence (T90) of Mr. Anthony Schmidt (a director of the defendant), the plaintiff accepted that two payments of $1,000 had been made (T4, 5, 170) and $6,000 were outstanding (T172).

Upon the material here presented, in my judgment the plaintiff has established entitlement against the defendant in the amount of $6,000 for outstanding licence fees in respect of the period of time for which the claim was made.  I shall now consider the more contentious counterclaim.

The counterclaim

The licence, which was granted by the plaintiff to the defendant, pursuant to section 370a of the Local Government Act, 1934, as amended (“the Act”) , was described (in the licence) as being ‘a mobile diner licence’, by which, for the period of three years from 1 April 1996,

“The [plaintiff] hereby Licences [the defendant] to carry on the business of a mobile diner in accordance with the information described above subject to the conditions attached hereto.”

(My emphasis.)

The ‘information described above’ included the defendant’s name and business address, the location of the mobile diner (“Light Square, Adelaide”) and the dates of commencement and expiration of the licence.

Section 370a, which is contained in Part XVII (“Streets, Roads and Public Places”), Division XIV (“Various Matters”) of the Act under the heading, “Roadside restaurants and cafes, etc.” provides:

“370a.(1)... A council may grant a licence permitting any person -

(a)to use portion of a public street, public road or public place for the supply of food and drink;

and

(b). to place in the public street, public road or public place tables, chairs and other furniture for the convenience of persons consuming food or drink.

(2)... A licence under this section is subject to such conditions as the council thinks fit and includes in the licence.

(3)... A fee fixed by resolution of the council is payable for a licence under this section.

(4)... No action lies against the holder of a licence under this section for the obstruction of a public street, public road or public place arising from any act or omission authorized by the licence.”

........ (My emphasis.)

Pursuant to section 369 of the Act, any person who unlawfully obstructs a street or road, in specified respects (which are not here relevant), so that the public is hindered in the free and proper use of the street or road longer than is necessary, is guilty of an offence and liable to the penalty of $200.  (No pleading or submission was here made that this grant of licence was ultra vires the plaintiff (cf. the powers contained in section 36 (3)(c)).)

The conditions, subject to which the licence was granted, were relevantly as follows (with my added emphasis):

“MOBILE DINER LICENCE - LICENCE CONDITIONS

PURSUANT TO SECTION 370A OF THE LOCAL GOVERNMENT ACT

CONDITIONS

1.The Licensee acknowledges that the Licensee will have no claim whatsoever for an extension or renewal of the Licence, it being the express basis of the issue of this Licence that it shall be for the period of the Licence and for no longer period.

2.The Licence Fee shall be ..... ($12,000) per annum, subject to review ......

3...... The Licence Fee shall be paid .... in equal instalments of .... ($1,000) each, subject to annual review ....

4.The Licensee shall only occupy the Licensed Area between the following hours:-

............. Monday to Friday [except Public Holidays] - 6.00 p.m. to 6.00 a.m.

Saturday, Sunday & Public Holidays - 12:00 noon to 6:00 a.m.

5......... All persons, equipment and activities associated with the operation of the mobile diner shall remain wholly within the defined Licensed Area.

6.The Licensee shall comply in all respects with the By-laws of the Corporation and with the provisions of the Acts of Parliament, regulations and rules, including the Public and Environmental Health Act and the Food Act, and all other orders or directions which may be made or given .... in respect of all aspects of the mobile diner.

7......... The [plaintiff’s] officers, servants or agents may .... enter upon the Area [N.B. not ‘the Licensed Area’] for the purpose of inspection, and .... may give the Licensee notice .... to repair or rectify .... any defect or other matter in need of rectification .... and the Licensee shall comply with such notice ....

8.[The costs and expenses of compliance with the requirements of a notice referred to in condition 7 shall be borne by the licensee.]

9......... No extension of the Licensed Area or any alteration to the amount, design and placement of furniture, or the equipment, appliances, fixtures and fittings is permitted without prior approval in writing from the [plaintiff], which approval shall not be unreasonably withheld, and shall be at the Licensee’s expense.

10.Playing of music, whether live or pre-recorded, is subject to written approval from the [plaintiff].

11...... The Licensee shall not do or suffer or permit to be done within the Licensed Area, any act, matter or thing whatsoever which may or could be to the annoyance, nuisance, grievance, damage or disturbance of the public or to any of the occupiers or owners of premises nearby the Licensed Area.

12.The Licensee shall cleanse and keep clean the pavement of the Licensed Area, the tables, chairs and umbrellas and, also, shall keep the footway and roadway in the vicinity of the mobile diner clear of litter and waste materials and remove all sweeping and wash-down wastes from the street.  ....

13...... The Licensee must ensure that sufficient mobile bins are provided within the Licensed Area for the containment of all refuse generated, such bins to be removed from the Licensed Area outside the times of operation for the mobile diner as set out in Condition 4 of this Licence.

14.The Licensed Area shall be cleared of obstructions as required by the [plaintiff] for pavement maintenance and repair work.  Except in emergencies, at least twenty four (24) hours notice will be given of this requirement.

15...... The Licensee must ensure that the Area [N.B. not ‘the Licensed Area’] is adequately lit during the times of operation and that such lighting does not pose a hazard to passing motorists.

16.Any work done by or on behalf of or at the request of the Licensee concerning either the preparation of the Licensed Area for use by the Licensee or cessation of use of the Licensed Area by the Licensee shall be carried out at the Licensee’s expense.

17...... The Licensee shall bear the cost of all pavement repairs carried out by the [plaintiff] within the defined area of the mobile diner which in the opinion of the [plaintiff] result from the activities of the mobile diner.  ....

18.The Licensee is responsible for installing one, 100A electricity supply to the Licensed Area, such installation to be at the Licensee’s expense.

19...... The Licensee agrees to indemnify .... the [plaintiff] in respect of or arising from the mobile diner .... or by reason of the non-observance or non-performance by the Licensee of these conditions.

20The Licensee shall effect and keep effected an insurance policy in the joint names of the Licensee and the [plaintiff] in respect of the Licensed Area, insuring the Licensee for a sum being not less than .... ($10,000,000) in respect of any one occurrence ....

21...... The Licensee shall, in respect to the policy of insurance referred to in Clause 18 herein [sic], produce to the [plaintiff] a certificate showing that such policy is currently in force.

22.The Licensee shall not at any time during the said term do permit or suffer to be done any act matter or thing whereby any insurances in respect of the Licensed Area may be vitiated or rendered void or voidable ....

23...... The Licensee must not assign or transfer any of its rights or obligations under this Licence without the written consent of the [plaintiff], which the [plaintiff] may withhold in its absolute discretion.

24.If there is any change in effective control of the mobile diner, the Licensee will be treated as having assigned its rights and obligations under this Licensee [sic] ....

25...... Any notice to be served under this Licence must be served by sending it to the usual business address of the recipient ....

26.References to money in this Licence are references to Australian currency.

27...... This Licence and all disputes arising out of it is [sic] governed by the law of South Australia and the parties submit to the jurisdiction of the Courts of that State.

28.Headings .... do not form part of this Licence.

29...... The [plaintiff] may .... by notice in writing to the Licensee .... delete any condition, impose additional conditions or alter any condition of this Licence but the [plaintiff] may not exercise its power under this condition so as to materially impair the Licensee’s conduct of the mobile diner ....

DEFINITIONS

30...... In these conditions:

30.1.......... .....

30.2“CORPORATION” means [the plaintiff].

30.3.......... “LICENSEE” means [the defendant].

30.4“LICENSED AREA” means the area of Light Square, Adelaide, which measures 10 metres x 6.4 metres, defined and depicted on the plan “Light Square Mobile Diner Licensed Area” DRG No. A2/95/2 dated 30/6/95, a copy of which is annexed hereto.”

The word “Area”, which appears in conditions 7 (entry) and 15 (adequate lighting), but not in 18 (cost of lighting) is not there defined (quaere whether ‘Area’ was intended to include the mobile diner).

In the amended defence and counterclaim, the defendant pleaded, inter alia (with my added emphasis):

·.. that by the licence, the plaintiff purported to licence the defendant “to occupy premises” at Light Square, Adelaide (the licensed area)(para. 2);

·.. that the licensed area in fact comprised four car parks which were made available to the general public for parking purposes (para. 3);

·.. that by condition 4 of the licence, the defendant “was entitled to occupy” the licensed area between 6.00 p.m. and 6.00 a.m. Monday to Friday (except public holidays) and 12.00 p.m. [sic] to 6.00 a.m. on Saturday, Sunday and public holidays (para. 4);

·.. that at no time since the commencement of the licence had the plaintiff made “vacant possession” of the licensed area available to the defendant at the commencement of the time whereby the defendant “was entitled, by the licence, to occupy” the licensed area (para. 5);

·.. that the plaintiff took no steps to remove cars which were parked in or on a part of the licensed area before 6.00 p.m. and 12.00 p.m. [sic] on the relevant days despite repeated requests from the defendant (para. 5.1);

·.. that by its action the plaintiff was in breach of its obligations pursuant to the licence “to provide” the licensed area to the defendant (para. 6);

·.. that the plaintiff knew, or ought to have known, that the defendant “required” the licensed area “for the purpose of parking its mobile diner from which to serve meals and other facilities to the public, within the hours and on the terms as set out in the licence” (para 9.1);

·.. that as a consequence of the defendant “not having access” to the licensed area at the times set out in the licence, the defendant had suffered loss and damage (para 9.2); and

·.. that the defendant’s “loss in trading for the period from 1 February 1996 to 31 May 1997 [was] the amount of $33,351.35, such loss appearing in the financial statements for the business known as ‘Anto’s Diner’ for the 16 month period from 1 February 1996 to 31 May 1997” (para. 9.2A).

In the amended reply and defence to the counterclaim, the plaintiff pleaded, inter alia (with my added emphasis):

·.. that the plaintiff did grant to the defendant a licence pursuant to section 370a of the Act relating to that portion of Light Square described as the licensed area (para. 1.1, 1.2);

·.. that the licence was not a licence “to occupy” the premises described or any premises at all (para. 1.3);

·.. that the licence was a licence “to use” the licensed area, subject to the conditions attached to the licence (para. 1.4);

·.. that the defendant was not “entitled to occupy” the licensed area as alleged or at all (para. 3.1);

·.. that ‘limited use’ of the licensed area was “permitted to the defendant” between the times specified (para. 3.3); and

·.. that the plaintiff was not in breach of any “obligations to provide” the licensed area to the defendant (para. 4.4).

As litigated at trial, the entitlement of the defendant to succeed on the counterclaim depended upon the resolution of one issue, that is, whether the defendant had been granted exclusive possession of the licensed area between the times specified in the licence.  For the defendant, Mr. Strawbridge contended that,

·.. the defendant was entitled to occupy the licensed area between the times specified, for the commercial purpose permitted by the plaintiff and paid for by the defendant (T24, 25);

·.. the commercial considerations surrounding grant of the licence clearly indicated that there was conferred upon the defendant, “anything other than some immunity from prosecution” for obstructing a public place (T117-119);

·.. there was no immunity from prosecution required in the occupation of the licensed area (that is, four car parking positions) between the times specified (T118);

·.. upon all the surrounding commercial circumstances or considerations relating to grant of the licence, clearly, “what was intended and what was meant was that [the defendant] would have exclusive possession of this site between certain hours and would pay a fee for that privilege” (T126);

·.. conditions of the licence which strongly suggested that the licence did grant to the defendant exclusive occupancy of the licensed area within specified times, for the purpose of operating a mobile diner in return for a commercial rent, included condition 4 (the defendant shall only “occupy” the licensed area between the times specified), condition 7 (the plaintiff may “enter upon the Area” for the purpose of inspection), condition 9 (no extension of the licensed area without prior approval), condition 13 (sufficient mobile bins to be provided within the licensed area and to be removed “outside the times of operation for the mobile diner”), condition 14 (the licensed area to be cleared of obstructions for pavement maintenance and repair work), condition 17 (cost of all pavement repairs which result from activities of the mobile diner to be borne by the defendant), conditions 23 and 24 (which refer to the “rights” of the defendant) and condition 29 (power of the plaintiff to delete or change any conditions, but not so as materially to impair the defendant’s conduct of the mobile diner);

·.. the five normal requirements of a right to occupy land here exist, that is, a landlord, a tenant, a defined piece of land, a determinate term and a specified rent;

·.. exclusive possession of the licensed area had been granted to the defendant as evidenced by the area having been rezoned and sign-posted, thus indicating that the area was reserved for permit parking (T68, 188, 189); and

·.. the plaintiff was obliged to make the licensed area available to the defendant and, by its failure to do so, the defendant had suffered loss.

For the plaintiff, Dr. Baxter contended that,

·.. the licence permitted the defendant “to use” and “to occupy” the licensed area (subject to conditions), but did not grant to or confer upon the defendant “an entitlement to occupy” that area (T6, 7, 13) or a “right of exclusive possession or occupation or use” of the area during the relevant period of time (T149);

·.. the licence was “in the nature of a privilege or a permission to do something which otherwise would not be permitted” (T6) and, by payment of the licence fee, the defendant was relieved of the penal consequences which might otherwise have resulted from the obstruction of a public place (cf. section 370a (4)) (T14);

·.. exclusive possession or occupation implies the right or ability to exclude other persons from the place possessed or occupied, and that right or ability was not here granted to or conferred upon the defendant in relation to the licensed area (T153-154, 164, 168);

·.. the intention of the parties was not to grant or confer exclusive possession of the licensed area to or upon the defendant (T155); and

·.. because exclusive possession was not granted to or conferred upon the defendant, there was no obligation upon the plaintiff to ensure that the defendant obtained such possession.

Dr. Baxter conceded that, if exclusive possession or occupation of the licensed area had been granted to or conferred upon the defendant, then there were occasions when such possession or occupation was not provided or available to the defendant and, subject to proof of the loss resulting therefrom, damages were recoverable by the defendant from the plaintiff (T149, 151, 175, 187, 188).

Although this case is not directly concerned with the well recognized legal distinction between a licence and a lease (indeed both counsel, perhaps advisedly, seemed to eschew use of that word), because counsel agreed (as do I) that entitlement of the defendant to succeed on the counterclaim is dependent upon determination of whether the defendant was granted exclusive possession of the licensed area between the times specified, and because the legal right of exclusive possession for a determinate period may be decisive of the relationship of landlord and tenant having been created, reference to legal considerations relating to a lease may here be relevant and instructive.

Still a leading Australian authority upon the subject is, I believe, Radaich v Smith (1959) 101 CLR 209 (see Mason J. (as he then was) in Goldsworthy Mining Ltd v Federal Commissioner of Taxation (1973) 128 CLR 199, at 212; affirmed in (1975) 132 CLR 463). The judgment of Windeyer J. in Radaich v Smith (supra) was recently referred to (with apparent approval) in Wik Peoples v Queensland (1996) 187 CLR 1, by Brennan C.J. (at 75-76), Toohey J. (at 116), Gaudron J. (at 152), Gummon J. (at 195) and Kirby J. (at 229) (see, also, the speech of Lord Templeman for the House of Lords in Sweet v Mountford [1985] 1 AC 809, at 827).

The headnote to Radaich v Smith (supra) states:

“In determining whether an instrument creates a lease as opposed to a licence, the decisive factor in favour of a lease is whether the right which the instrument confers is one to the exclusive possession of the premises for a term.”
(My emphasis.)

Of that headnote, Toohey J. remarked in Wik (supra) (at 116):

“Put that way, the point is not so much that a “lease” confers exclusive possession; it is that the conferring of exclusive possession is an indication that the arrangement in question is a lease rather than, say, a licence”.

Windeyer J. began his judgment in Radaich v Smith (supra) by observing (at 221) that the distinction between a lease and a licence is clear:

“ “A dispensation or licence properly passeth no interest, nor alters or transfers property in anything but only makes an action lawful which without it had been unlawful”: Thomas v Sorrell (1673) Vaugh. 330 [124 ER 1098].”

His Honour then considered (at 222) (in a passage which Brennan C.J. cited in Wik (supra) (at 75-76)) whether a transaction creates a lease or a licence:

“Whether the transaction creates a lease or a licence depends upon intention, only in the sense that it depends upon the nature of the right which the parties intend the person entering upon the land shall have in relation to the land.  When they have put their transaction in writing this intention is to be ascertained by seeing what, in accordance with ordinary principles of interpretation, are the rights that the instrument creates.  If those rights be the rights of a tenant, it does not avail either party to say that a tenancy was not intended.  And conversely if a man be given only the rights of a licensee, it does not matter that he be called a tenant; he is a licensee.”

(My emphasis.)

Windeyer J. then addressed (at 222) (in a passage cited by Toohey J. in Wik (supra) (at 116) and by Lord Templeman in Street v Mountford (supra)(at 827)) “the fundamental right” which distinguishes the position of a tenant from that of a licensee:

“It is an interest in land as distinct from a personal permission to enter the land and use it for some stipulated purpose or purposes.  And how is it to be ascertained whether such an interest in land has been given?  By seeing whether the grantee was given a legal right of exclusive possession of the land for a term or from year to year or for a life or lives.  If he was, he is a tenant.  And he cannot be other than a tenant, because a legal right of exclusive possession is a tenancy and the creation of such a right is a demise.  ....  A reservation to the landlord, either by contract or statute, of a limited right of entry, as for example to view or repair, is, of course, not inconsistent with a grant of exclusive possession.  Subject to such reservations, a tenant for a term or from year to year or for a life or lives can exclude his landlord as well as strangers from the demised premises.”
(My emphasis, but not italics.)

In answering the question whether at law a document created a lease or a licence, in Radaich v Smith (supra) Windeyer J. said (at 223),

“the proper touchstone still is:  did it give the so-called licensee a legal right to the exclusive possession of the premises during the term?  The question must of course, be resolved by considering the terms of the deed.  But they are to be read in relation to the relevant surrounding circumstances, in particular the nature of the premises; for this deed, like any other instrument, is to be interpreted having regard to its subject matter.”

(My emphasis.)

(His Honour also there observed (at 223) that, because the parties had reduced their agreement to writing, they could not by parol evidence explain their deed.) 

To similar effect, in Street v Mountford (supra) Lord Templeman said (at 826),

“the only intention which is relevant is the intention demonstrated by the agreement to grant exclusive possession for a term at a rent.  Sometimes it may be difficult to discover whether, on the true construction of an agreement, exclusive possession is conferred.  Sometimes it may appear from the surrounding circumstances that there was no intention to create legal relationships.  Sometimes it may appear from the surrounding circumstances that the right to exclusive possession is referable to a legal relationship other than a tenancy.”
(My emphasis.)

So also, in A.G. Securities v Vaughan; Antoniades v Villiers [1990] 1 AC 417, Lord Jauncey said (at 475),

“What effect is then to be given to the agreements?  If they are construed solely by reference to their terms and without regard to surrounding circumstances the conclusion must be that there was no intention to confer exclusive possession ....  However, it would not be right to look at the agreements without regard to the circumstances which existed at the time when they were entered into.  ....  Accordingly, although the subsequent actings of the parties may not be prayed in aid for the purposes of construing the agreements they may be looked at for the purposes of determining whether or not parts of the agreements are a sham in the sense that they were intended merely as “dressing up” and not as provisions to which any effect would be given.”

(My emphasis.)

In Radaich v Smith (supra) (as the headnote also recites), the High Court was concerned with a deed which granted to Mrs. Radaich (the appellant) “as licensee” for a term of five years, “the sole and exclusive license [sic] and privilege to supply refreshments to the public admitted to” a certain lock-up shop “and to carry on the business of a milk bar therein”. The court held (as the headnote recites) that the substance and effect of the deed was [sic] to grant to Mrs. Radaich a right to the exclusive possession of the lock-up shop and the deed thereby created a leasehold interest in her and the relationship of lessor and lessee between the parties thereto. McTiernan J. said (at 215),

“The preamble recites that the respondents [sic] are “to carry on the business of a milk bar” in the subject premises.  I think that such a business could only be carried on in reasonable convenience by persons having the exclusive possession of the premises.  Nothing in the deed suggests that the parties did not recognise this as an implication of their agreement embodied therein.”
(My emphasis.)

(Compare the terms of the licence in this case, “to carry on the business of a mobile diner [on the licensed area] .... subject to the conditions attached hereto.”)  Taylor J. there said (at 216),

“it is readily discoverable upon examination of the deed that it contemplated that the so-called licensee would carry on upon the premises the business of a milk bar and cafe subject to the restriction which is imposed ....  Obviously it was contemplated that she was to occupy the subject premises and that, subject to her obligations .... she was to have the control of the premises in the sense that she was to close them and open them at the appropriate times.”
(My emphasis.)

Taylor J. also there said (at 217) (in a passage which, to my mind, is here apposite),

“The deed obviously contemplated that the appellant should have the right to occupy the premises for the purposes of her business and the business was to be carried on upon the premises at all times when they might lawfully be kept open.  The character of the business was such that it could only be effectively carried on if the appellant had exclusive occupation”.
(My emphasis.)

Menzies J. said (at 220-221),

“When looked at as a matter of both form and substance, the deed seems to me to speak with two voices, but what I regard as decisive in favour of its creating the relationship of landlord and tenant is that it gives the “licensee” the right of exclusive possession of the premises for the term granted thereby.

The conclusion that it does this flows from the provisions which require the appellant to conduct a cafe and milk bar in the shop and upon the expiration or sooner determination of the “license”, to “give up possession of the said building occupied by her for the purpose of the said business”.  ....  These obligations to occupy a shop, to carry on a business there that needs plant and stock, and to give up possession at the end of the term, taken together, seem to me to require the conclusion that the occupier has, during the term, the right of exclusive possession.”

(My emphasis.)

Windeyer J. said (at 224-225),

“I imagine all concerned would have been astounded if they had been told that the appellant had no right to exclude persons from her shop; that the respondent might, if he wished, license other people to carry on any activity there other than the sale of refreshments, provided their presence did not prevent her selling refreshments or conducting the milk bar; and that, although she might lock the shop up .... , the respondents could not only enter it themselves ....but could admit as many persons as they chose, .... and license them to use the premises in the absence of the appellant for any purpose of pleasure or business they liked, provided only that they did not sell refreshments.  If the matter is to be tested by the apparent intention of the parties arising from the circumstances, that clearly was not their intention.  If it is to be tested, as I consider it is, by their intention as reflected in the words of their deed with knowledge of the nature of the subject premises, then, in the words of Blackburn J. (as he then was) in Roads v Overseers of Trumpington (1870) LR 6 QB 56, at 63 “the whole nature of the agreement shews that the appellant was intended to have exclusive possession of the land””.

(My emphasis.)

(When reading that passage in relation to this case, the words “shop” and “premises” could, I think, be substituted with “the licensed area”.)

The “right of occupation may be exclusive, though the right of user for certain purposes may be restricted to certain times” (per Macfarlan J. in Radio Theatres Pty Ltd v City of Coburg [1948] VLR 84, at 86, citing R v St. Martin’s-in-the-Fields [1842] 3 QB 204 (the case of a lease of a box in a theatre for use during public performances), which was approved by Blackburn J in R v Morrish [1863] 32 LJ MC 245).  In Lewis v Bell [1985] 1 NSWLR 731, in an instructive judgment with which Kirby P. (as he then was) and Samuels JA. agreed, Mahoney JA. analysed the relevant principles. His Honour there referred to these considerations:

·.. that the right to exclusive possession involves the lessee in having the general right to exclude others, including the lessor, from the premises, subject at least to such specific provisions for entry as may be particularly provided for in the document (734);

·.. that whether a particular document grants such a right to the grantee depends upon the construction of the document, having regard to all the terms of the document considered in their context (734-735);

·.. that when it is not clear what is being granted, other aspects of the transaction must be looked at to determine, by the process of construction, whether what is granted is mere occupation or use or is possession in the relevant sense and also whether it is exclusive possession (735);

·.. that in determining whether what has been granted is the right to exclusive possession, the court, in the process of construction, has in practice looked, inter alia, to two things: the nature of the rights which, in terms, have been granted and the intention of the parties (735);

·.. that the nature of the rights which have been granted is of significance because, if the grantee has been granted such rights, it may be inferred that he was (or was not) granted the right to exclusive possession (735);

·.. that where the rights granted are inconsistent with the right to exclusive possession, it may be proper to infer that the rights do not carry by implication the grant of exclusive possession (735);

·.. that where the nature of the rights which have expressly been granted can be enjoyed only by one who has been granted exclusive possession, it may be necessary to infer the grant of exclusive possession: Radaich v Smith (supra), (at 215, 217, 221, 223-225) (the “business efficacy test”) (735-737);

·.. that in the process of construction, the purpose is to determine, from the words used in their context, what was the intention of the parties as to what should be the rights granted (736);

·.. that once the intention has been ascertained, words which, for example, would in isolation convey a more limited right may be construed as granting exclusive possession, and vice versa    (736-737);

·.. that in the process of construction, an express statement of the parties’ intentions as to, for example, the nature of the relationship to be created, will be of substantial, though not necessarily conclusive, importance: it will, in accordance with the rules of construction, yield to the intention to be derived from the document as a whole (737);

·.. that an express statement of intention will also be relevant in the construction of the document for the purpose of deciding what terms are to be implied, for example, if the grant of the right to exclusive possession depends upon whether the business efficacy test requires its implication, an express statement by the parties of their intention may, in accordance with the established rules governing the implication of terms, operate to prevent such an implication (737);

·.. that once the nature of the rights granted is finally determined, the classification of the transaction (as lease or licence) will depend upon whether the rights are (or are not) of exclusive possession - in this sense expressions of intention are irrelevant: the parties cannot “escape the legal consequences of one relationship by professing that it is another”: Radaich v Smith (supra), (at 222) per Windeyer J. (737); and

·.. that, in determining the nature of a transaction (lease or licence), in the end it is for the parties to determine what rights they will grant and, accordingly, what is the nature of their transaction: if, on a proper construction, the relevant rights were intended to be granted, then the transaction is to be construed and classified accordingly (737).

Surrounding circumstances which, by consent, were here proved in evidence in consideration of the terms of the ‘licence’ and the intention of the parties, included documentary material discovered by the plaintiff.  The material indicated that, in approving grant of the licence, the plaintiff obtained advice from professional planners and resolved upon a licence fee commensurate with commercial rental rates in the vicinity.  While the relevance of most of that material was not disputed, I did not find it here to be of much assistance.

Applying the foregoing considerations to the present case, upon proper construction of the licence, by having regard to the conditions therein contained, in the context of relevant surrounding circumstances, including the nature of the business which was to be carried on and the rights and obligations which were granted and accepted, in my judgment the right to exclusive possession of the licensed area was thereby conferred upon the defendant, upon specified conditions.

By the licence, the defendant was granted the right to occupy the licensed area for the purpose of carrying on the business of a mobile diner, subject to the attached conditions.  Clearly, such a business could, I think, only be carried on in reasonable convenience by a person having the exclusive possession of the licensed area.  Nothing in the licence is suggestive that the parties did not recognise this as an implication of their agreement embodied therein (cf. McTiernan J. in Radaich v Smith (supra), at 215). Obviously it was contemplated that the defendant was to occupy the licensed area and that, subject to the obligations under the licence, the defendant was to have the control of the area, in the sense that the defendant was authorized to open and close the mobile diner at the appropriate times. “The character of the business was such that it could only be effectively carried on if the [defendant] had exclusive occupation” (Taylor J. in Radaich v Smith (supra), at 217). The implication that such occupation or possession was intended by the parties is, to my mind, compelling.

Features of the licence which, taken together, I regard as decisive of the right of exclusive possession of the licensed area having been conferred upon the defendant include -

·.. the grant to the defendant of the right there to carry on a business which required plant and stock (cf. Menzies J. in Radaich v Smith (supra), at 221);

·.. the grant to the defendant of the right of limited ‘occupancy’ of the licensed area (condition 4);

·.. the reservation to the plaintiff of the right to “enter upon” the area (condition 7) (cf. Windeyer J. in Radaich v Smith (supra), at 222);

·.. the obligation of the defendant to ensure that sufficient mobile bins were provided and removed (condition 13);

·.. the obligation of the defendant to clear the licensed area of obstruction as required for pavement maintenance and repair work (condition 14);

·.. the obligation of the defendant to ensure that the area was adequately lit (condition 15);

·.. the obligation of the defendant to bear the cost of all pavement repairs which resulted from the activities of the mobile diner (condition 17);

·.. the responsibility of the defendant for installing the supply of electricity to the licensed area at the defendant’s expense (condition 18); and

·.. the restriction upon the plaintiff to delete, add to or alter any conditions of the licence so as materially to impair the defendant’s conduct of the mobile diner (condition 29).

For these reasons, I am satisfied, on the balance of probabilities, that under the licence the defendant was granted the right to exclusive possession of the licensed area between the times specified in condition 4.  Upon the evidence presented (and the plaintiff’s concession), that right was clearly not always available and, subject to proof of resultant loss, the defendant is entitled to recover damages from the plaintiff for that loss.

To prove the resultant loss, two witnesses (Mr. Schmidt and Mr. Shillito) were called.  Documentary material also was tendered.  For the defendant, Mr. Schmidt had instructed professional planners to assist in the successful application for grant of the licence.  A mobile diner was then constructed.  Another vehicle was hired, with which the diner was towed, daily, to and from the licensed area.  Mr. Shillito was employed to operate the business.  Mr. Schmidt there attended when required.

In Mr. Schmidt’s evidence, “just about every day” the defendant experienced difficulties in gaining access to the licensed area (T37), because motor vehicles were there improperly parked.  During the first few months, he thought that timely access would have been “definitely less than ten” (T39).  On numerous occasions, the plaintiff was telephoned and asked to tow away vehicles.  (Confirmation of those calls is contained in the extract from the plaintiff’s log of complaints (exhibit D7).)  Vehicles were ‘ticketed’, but the problem persisted.  Between about 6.00 p.m. and 8.00 p.m. each day was, potentially, the busiest trading period for the business.  Much of that trade was lost because of the inability of the defendant regularly to gain access to the area and the electricity supply.  Eventually, in frustration, the defendant left the diner in the licensed area all the time, until it was towed away by the plaintiff on 11 February 1997 and never returned.

On 30 April 1997, Mr. Schmidt wrote to the plaintiff a letter (exhibit D9) concerning the problems which had been encountered when access to the area was not available:

“This caused a huge problem for us, we could not set the dinner [sic] up on time (sometimes 11/2 hours delay, sometimes 21/2 hours), as no space was available.  When a space did become available the diner was often positioned into a single car parking space.  We were never able to set the diner up as we would have liked, we were not able to access all the four parking spaces.  The time delay cost us money in both wages and loss of turnover, and although we would eventually be able to set up, this still did not mean we had access to all four spaces, commonly we would occupy only two of the four spaces specified.

The time we spent operating out of Light Square we lost a lot of money due to the inefficiency of the site (as mentioned above), the loss of turnover and the money spent in staff costs meant that we were not able to run a successful small business.  The diner has the potential to be a good little business, and it is a shame that we were not able to capitalise on this.”

(My emphasis.)

The defendant’s solicitors also wrote to the plaintiff (on 7 May 1997) about problems of access to the area and confirmed that the defendant had lost trade, almost daily, between 6.00 p.m. and 8.00 p.m. on weekdays, that being “the major income earning period”.

Through Mr. Schmidt, for the period from 1 February 1996 to 31 May 1997, Trading and Profit and Loss Accounts were tendered (exhibit D12).  Those accounts, which related to a period of time commencing before 1 April 1996 (when the licence commenced) and after 11 February 1997 (when the diner was finally towed away), reflected that net loss of $33,351.35 which was referred to in the pleadings.  “Flow sheets” were also tendered (exhibit P2), on which the defendant’s accountant had recorded daily summaries of gross sales, expenses and net totals relating to the business.  Those records also extended beyond that period of time from when the licence was granted until the diner was towed away.

Mr. Shillito confirmed the problems which were experienced with access to the licensed area:

“There was a continuous problem for the entire period that I was operating the diner .... we would always have someone parking there .... on average [it was] about 7.30, 8 o’clock before I could get the diner in and set up ready to serve people” (T68-69).

(My emphasis.)

He also confirmed that the first two hours, each day, were important in relation to the custom that he was hoping to secure.  In Mr. Shillito’s estimate, about 20 or 25 per cent of daily takings were ‘missed out on’, or lost, by the defendant’s inability to gain access to the licensed area (T72) two or three days each week (T73).  He often parked at right angles to the area.  Numerous complaints were made to the plaintiff.  Although, initially, officers of the plaintiff did attend, after a month or so the attendances became less frequent.  Signs erected near the licensed area stated, in effect, ‘permit parking after 6 p.m.’.

In assessment of the plaintiff’s damages, the relevant period of time is between 1 April 1996 (when the licence commenced) and 11 February 1997 (when the diner was finally towed away), that is a period of about 10 months.  From the flow charts (exhibit P2), during those 10 months, on my calculation, the defendant’s net sales were about $60,000.  Accepting (as I do) Mr. Shillito’s evidence that, about two or three days a week, the loss of takings was between 20 and 25 per cent of the takings, because of the defendant’s inability to gain access to the licensed area, then (generously), about 40 per cent of the time, that loss was about 25 per cent of the takings; that is, about 10 per cent of the takings were lost during any period of time.  Upon that calculation, during the relevant 10 months, the plaintiff lost net takings of about $6,000, in addition to the payment of Mr. Shillito’s wages while he was unable to obtain access to the licensed area.

Upon the evidence, I also consider it reasonable to infer that, if the defendant had been able regularly to occupy the licensed area between 6.00 p.m. and 8.00 p.m., daily, and thereby establish a regular patronage during those hours, then the turnover of the business (which had the potential to succeed) would have increased during those 10 months.

Necessarily, a broad approach must here be adopted in assessment of the defendant’s damages.  In all the circumstances, I assess those damages in the amount of $14,000 (inclusive of interest).

For these reasons, upon the claim, there will be entered judgment for the plaintiff against the defendant in the amount of $6,000 (together with costs, to be agreed or taxed); and, upon the counterclaim, judgment will be entered for the defendant against the plaintiff in the amount of $14,000 (together with costs, to be agreed or taxed).