Jones v Pun
[2024] VCC 1167
•5 August 2024
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. CI-23-01584
| SHANE MICHAEL JONES | First Plaintiff |
| and | |
| BUILDSURE PTY LTD (ACN 084 353 211) | Second Plaintiff |
| v | |
| YONG PUN | First Defendant |
| and | |
| ASCENSION NO 2 PTY LTD (ACN 620 026 002) | Second Defendant |
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JUDGE: | HIS HONOUR JUDGE WISE | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 23 and 24 July 2024 | |
DATE OF JUDGMENT: | 5 August 2024 | |
CASE MAY BE CITED AS: | Jones & Anor v Pun & Anor | |
MEDIUM NEUTRAL CITATION: | [2024] VCC 1167 | |
REASONS FOR JUDGMENT
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Subject:Retail tenancies
Catchwords: Agreement for lease over kitchen area of hotel – dispute over whether valid and enforceable – alleged promissory estoppel – alleged misleading and deceptive conduct – whether genuine controversy that premises are “retail premises” under Retail Leases Act 2003 (Vic) (“RLA”) – consideration of nature of the business to be conducted from the premises – whether this court deprived of jurisdiction to hear the dispute by reason of s89(4) of the RLA.
Legislation Cited: Competition and Consumer Act 2010 (Cth); Retail Leases Act 2003 (Vic); County Court Civil Procedure Rules 2018 (Vic); Trade Practices Act 1974 (Cth)
Cases Cited:Hazeldell Ltd v Commonwealth (1924) 34 CLR 442; Thurin v Krongold Constructions (Aust) Pty Ltd (2022) 407 ALR 187; Citta Hobart Pty Ltd v Cawthorn (2022) 276 CLR 216; IMCC Group (Australia) Pty Ltd v CB Cold Storage Pty Ltd [2017] VSCA 178; Perlman v Perlman (1984) 155 CLR 474; Australian Liquor Marketers Pty Ltd v Twenty 12 Pty Ltd & Ors [2014] VCC 688
Judgment: Genuine controversy exists that premises are “retail premises” under the RLA and this court has no jurisdiction to hear the dispute.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr J McIntyre | Verduci Lawyers |
| For the Defendants | No appearance |
HIS HONOUR:
A. Introduction and summary of decision
B. Course of the proceeding and pleadings
B.1 The Plaintiffs’ pleaded claims
B.2 The Defences
B.3 The Plaintiffs’ reply
B.4 The claims for damage (quantum)
C. The question of jurisdiction to be determined first and issues raised
D. Background
E. Statutory landscape
F. Plaintiffs’ submissions
G. Analysis
G.1 Is there is genuine controversy about whether the premises the subject of the alleged agreement for sublease are “retail premises” within the meaning of s4(1) of the RLA?
G.2 If so, is the alleged agreement for a sublease a retail premises “lease” within the meaning of s3 of the RLA?
G.3 If the answer to those questions is “yes”, is the effect of s89(4) of the RLA that this dispute is not justiciable in this court?
H. Disposition
A. Introduction and summary of decision
1In this proceeding the first plaintiff (“Mr Jones”) and the second plaintiff (“Buildsure”) (“plaintiffs”) claim that they reached an agreement with the first defendant (“Mr Pun”) and the second defendant (“Ascension”) (“defendants”) to carry out a fit-out of a kitchen at the Queen Victoria Hotel (“VH”) in Carlton. They say that the defendants agreed that Ascension would grant to Buildsure a sublease[1] of the fitted-out kitchen from which Buildsure would cook to order and provide meals to the patrons of the hotel. A key to the kitchen was given by Mr Pun to Mr Jones, who then completed the fit-out. After Buildsure carried out the fit-out, but before it had started operating the kitchen, the parties fell into dispute about the terms upon which the agreement to grant the sublease was reached.
[1]The plaintiffs use the terminology “sublease”. Whether it is a sublease, or in truth an agreement for a sublease enforceable by reason of part performance, is a matter I need not decide now. I will use the terms “sublease” and “agreement for sublease” interchangeably in these reasons.
2The plaintiffs claim that the agreement for the sublease is enforceable and complete. They allege that the agreement was repudiated by the defendants for which they seek damages. They also make claims based on promissory estoppel and for misleading and deceptive conduct by way of certain misrepresentations made by the defendants contrary to s18 of the Australian Consumer Law (“ACL”), Schedule 2 and Competition and Consumer Act 2010 (Cth) (“CCA”).
3The defendants deny that an agreement was formed. They say that the parties were still negotiating an agreement, and in the alternative, that if any agreement was reached, it is both uncertain and unenforceable.
4The defendants deny the claims of promissory estoppel and for liability for misleading and deceptive conduct.
5Significantly, the defendants also claim that the current dispute is a retail tenancy dispute under the Retail Leases Act 2003 (Vic) (“RLA”) and pursuant to s89(4) of that Act is not justiciable in this court.
6For the reasons which follow, I have determined:
(a) the question of whether this court has jurisdiction to entertain this claim must be determined before any other questions;
(b) by reason of the nature of the business to be conducted by the plaintiffs from the premises, there is a genuine controversy about whether the premises is a retail premises within the meaning of s4(1) and s81(1)(a) of the RLA;
(c) a dispute between a landlord and tenant over whether there is a valid and enforceable sublease over alleged retail premises is a dispute in relation to a retail premises lease and therefore a “retail tenancy dispute” within the meaning of s81(1)(a) of the RLA;
(d) as a consequence, pursuant to s89(4) of the RLA, this court does not have jurisdiction to deal with this claim.
7Having determined that this court does not have jurisdiction to determine the dispute between the parties there is no further determinative role for this court, save to determine what should now be done with the proceeding.
B. Course of the proceeding and pleadings
8The defendants advised the Court that they did not intend to appear at the trial of this proceeding. Mr Pun filed an affidavit on 12 June 2024 in which he sought to have the trial “to commence on 23 July 2024 vacated”. I am therefore satisfied that the defendants were aware that the matter was fixed for trial to commence that day. The defendants were called by name both inside and outside the Court, but they did not appear. The trial therefore proceeded undefended, as provided for in Order 49.02 of the County Court Civil Procedure Rules 2018 (Vic) on 23 and 24 July 2024.
9The plaintiffs only called one witness, Mr Jones. They tendered a number of documents which were contained in a Court Book. The documents actually tendered are those contained in a table prepared by the plaintiffs’ solicitor, which has been marked as an exhibit.
10During the course of final submissions, Mr McIntyre of counsel, who appeared for the plaintiffs, addressed me on all claims that were pressed, including quantum.
11He provided to the Court written closing submission dated 24 July 2024 and a further written submission dated 25 July 2024 at the Court’s request.
12Having considered all of that material and evidence, I have formed the view that the defendants’ reliance on the RLA must be considered and determined by the Court before any other findings are made. The reason for this is that, if I determine that the agreement for lease alleged by the plaintiffs is arguably a retail premises lease under the RLA, then this proceeding constitutes a retail tenancy dispute within the meaning of the RLA. If that is so, then this court will have no jurisdiction to determine the dispute by reason of s89(4) of the RLA.
13In order to determine this question, I only need to have regard to the pleaded cases and some limited evidence given by Mr Jones describing the nature of the business the plaintiffs intended to be conducted from the kitchen.
14As a result, in these reasons I will confine my recitation of the facts and evidence to those matters necessary to decide that jurisdictional question.
B.1 The Plaintiffs’ pleaded claims
15The plaintiffs’ claims are raised in its further amended statement of claim filed 22 November 2023.
16They allege that:
(a) between about 6 and 10 February 2021, the parties agreed that the defendants would sublease the kitchen to the plaintiffs once fit-out was complete for a fixed rental of $3,000 per calendar month all inclusive, with rent to commence upon the kitchen becoming operational and commencing to trade. The term was to be three years, with a five-year option. The plaintiffs were to be permitted to complete the fit-out, and thereafter to operate the kitchen as a standalone business separate from the hotel, and all revenue to be retained by the plaintiffs;
(b) they also allege that the defendants made two representations to them during the course of their discussions in that period and on about 31 March 2021:
(i)that the defendants would sublease the kitchen to the plaintiffs and that the monthly rental, including any allowance for proportionate share of the outgoings would be capped at $3,000 (“the sublease representation”);
(ii)that the defendants’ landlord would give its consent to the sublease agreement once the landlord could see that the kitchen fit-out had been completed satisfactorily (“the kitchen fit-out representation”).
17The plaintiffs allege that by a series of conversations, text messages and emails the agreement to grant a sublease was validly formed and is enforceable.
18They allege that, induced by and in reliance on both sets of representations, Buildsure carried out the fit-out of the kitchen between 7 April and 29 May 2021.
19They allege that from about 2 July 2021, the defendants demanded payment of rent prior to the kitchen becoming operational and commencing to trade, repudiated the agreement, denied the plaintiffs access to the kitchen by installing a key-locked door to the kitchen and did not provide a key to the plaintiffs, and took over the kitchen fit-out that had been installed by the plaintiffs.
20The plaintiffs allege that, by this conduct, they have suffered loss and damage.
21The plaintiffs allege that on 18 August 2021, the defendants notified the plaintiffs they did not intend to proceed with the sublease on the terms agreed, including rental, and that the plaintiffs would no longer have access to the kitchen. Therefore, they say that the representations made were false.
22They say that, by reason of the representations referred to above, the defendants induced in the plaintiffs an assumption that a sublease would be provided to them in the terms agreed, upon satisfactory completion of the kitchen fit-out. They say that the defendants contributed to the plaintiffs’ adoption of the assumption that the plaintiffs would now suffer detriment if the plaintiffs are permitted to resile from the assumption that it would be unconscionable to permit them to so resile, and that the defendants are estopped from doing so.
23They also allege that, in making the representations, Ascension engaged in conduct in trade or commerce that was misleading or deceptive, or likely to mislead or deceive, contrary to s18 of the ACL. They allege that Mr Pun was involved in that contravention for the purposes of s75B of the CCA. They seek damages for their losses suffered by reason of that conduct under s236 of the ACL.
24They also pleaded a breach of copyright claim, which was not pursued at trial.
B.2 The Defences
25The defendants filed an amended defence on 22 December 2023.
26They deny that an agreement to grant a sublease was finalised between the parties and say that the parties were still in the process of negotiating the same. They deny that any offer to sublease was made and was capable of forming the basis of a legally-enforceable sublease. They say that any such agreement was conditional upon the essential terms of a sublease being agreed, was recorded in writing and required the consent of the landlord, and that the requirement of a written agreement was known to Mr Jones.
27The defendants say that the terms of the offer and acceptance alleged by the plaintiffs was void for uncertainty. They say that the offer alleged was an agreement to enter into a further agreement, the essential terms of which were lacking.
28They also deny the sublease representations were made and say they entered into discussions only, which did not conclude with a legally-enforceable sublease.
29The defendants deny that the fit-out representations were made and say that the head lessor’s agent would seek the head lessor’s consent once a form of sublease was submitted.
30They say that between January and July 2021, they engaged in good-faith negotiations to conclude the sublease.
31They deny they gave possession of the kitchen to the plaintiffs and say they were given a licence only to undergo preparatory works, which were done at the plaintiffs’ insistence and at their own risk, and that no agreement would ever be reached.
32They admit that the fit-out works were conducted by Buildsure, but deny they were completed satisfactorily.
33They admit they sought payment of rent on about 16 June 2021.
34The defendants allege that the plaintiffs repudiated the sublease agreement (if it existed) by attempting to introduce further terms into a proposed written sublease agreement, which repudiation was accepted.
35They admit they installed a lockable door to the kitchen, but say that the door itself was installed, as agreed between the parties.
36Finally, as referred to in paragraph 5 above, they allege this claim is not justiciable in this court by reason of s89(4) of the RLA.
B.3 The Plaintiffs’ reply
37The plaintiffs filed a reply, in which they denied that they would operate a “retail” food service. They say, rather, they would provide a “cooking service” to the VH to enable VH to provide meals to its guests from a menu provided by the VH. They say that the kitchen was not open to or accessible to the public, or by telephone or email. They say there was no dining facility in the kitchen.
B.4 The claims for damage (quantum)
38During the course of the hearing, the plaintiffs filed further particulars of loss and damage, slightly reducing their claims for damage.
39They claimed $130,361.18 for special damages as follows:
(a) kitchen construction costs ꟷ $70,515.18;
(b) appliances and equipment installed in the kitchen ꟷ $54,698;
(c) stock costs ꟷ $2,337.63;
(d) wages paid ꟷ $1,584.00
(e) out-of-pocket expenses ꟷ $1,226.37.
40They further claimed the sum of $1,118,313 as of July 2024 by way of lost profits for the period from 1 August 2021 (when they say they would have commenced operating the kitchen if not for the defendants’ alleged repudiation to the trial).
C. The question of jurisdiction to be determined first and issues raised
41It is trite law that a court or tribunal’s first obligation is to ensure that it has jurisdiction to entertain the dispute before it.[2]
[2] Isaacs ACJ in Hazeldell Ltd v Commonwealth (1924) 34 CLR 442 at 446.
42In a different (although not unrelated) context, the Court of Appeal in Thurin v Krongold Constructions (Aust) Pty Ltd,[3] discussed whether a federal matter was in contest in a proceeding by reason of a pleaded defence alleging a breach of a Commonwealth law, namely the Trade Practices Act 1974 (Cth). The Court said:
“… For that purpose, it is enough that the claim or defence be ‘genuinely in controversy and that it give rise to an issue capable of judicial determination’; that is, it is ‘enough that the claim or defence be genuinely raised and not incapable on its face of legal argument’.”[4]
[3] (2022) 407 ALR 187 at [55] (per McLeish, Niall and Walker JJA).
[4]Citing Citta Hobart Pty Ltd v Cawthorn (2022) 276 CLR 216 at [31] (per Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ).
43As a consequence, to the extent that the jurisdictional question in this proceeding arises as a result of a pleaded matter such as reliance on s89(4) of the RLA, as long as the pleading is as described in the passage immediately above, then the jurisdictional question will be engaged with whatever statutory consequences follow.
44In this case, if the pleaded jurisdictional issue is “genuinely in controversy” and not “incapable on its face of legal argument”, then the consequence of s89(4) of the RLA is that this proceeding is not justiciable before this court.
45The question of whether this court has jurisdiction to determine this matter was first raised in the defendants’ Defence filed 7 August 2023 and responded to by reply filed 4 September 2023. Both parties were represented at those times.
46In the ordinary course, a defendant who wishes to challenge the jurisdiction of the Court to hear a matter, the subject of a proceeding has a number of options. Before filing an appearance they could apply to set aside the Writ under Rule 8.09 of the County Court Civil Procedure Rules. After filing an appearance, a defendant could apply for summary dismissal of the claim or summary judgment under Rule 22 or Rule 23 of the County Court Civil Procedure Rules.
47It is unfortunate that the defendants took none of those courses and left the question of jurisdiction to be determined at trial.
48Nevertheless, I must now determine this question in the context of the trial having been run and evidence having been heard and taken.
49Under those circumstances, it is my view that I must have regard to the pleadings filed and may also consider any evidence that was led, to the extent that it is required to determine the question of jurisdiction.
50The following issues must be determined in order to arrive at a conclusion on whether the plaintiffs’ claims are justiciable before this court. Is there a genuine controversy:
(a) That the premises the subject of the alleged agreement for sublease are “retail premises” within the meaning of s4(1) of the RLA?
(b) If so, that the alleged agreement for a sublease is a retail premises “lease” within the meaning of s3 of the RLA?
(c) If so, that the dispute between the parties in this proceeding is a “retail tenancy dispute” within the meaning of s81(1)(a) of the RLA?
(d) If the answer to those questions is “yes”, is the effect of s89(4) of the RLA that this dispute is not justiciable in this court?
D. Background
51Mr Jones gave evidence for the plaintiffs. He canvased his dealings with Mr Pun of the defendants and their discussions, text messages and emails that the plaintiffs relied on in support of their claim that a valid and enforceable agreement for sublease was entered into.
52Except for one matter, I do not set out that evidence, as it is not strictly necessary for me to determine the jurisdictional questions.
53Mr Jones did give evidence about the service that he intended to operate from the kitchen to provide meals to patrons of the VH.[5] The patrons would have no access to the kitchen at any time. There would be no separate signage indicating that the meals were provided by any business other than the VH. The orders for meals would be taken at the main bar by staff employed by the VH. Payment for meals would be made by patrons through a dedicated till and point-of-sale electronic funds transfer hardware (“POS”) run by the bar staff. The till and POS would be owned by the plaintiffs. In this way, the patrons ordering meals would pay the plaintiffs directly for their meals. The orders would be transmitted electronically to a reader in the kitchen. The kitchen staff would then prepare the meals and they would be collected and delivered to the patrons by staff employed by the VH.
[5] Transcript (“T”) 91-93.
54This evidence is important in informing the question of whether the premises were to be used “wholly or predominantly for the sale of goods by retail” within s4(1)(a) of the RLA.
E. Statutory landscape
55The following provisions of the RLA are relevant to the jurisdiction question.
56Section 81(2) of the RLA provides:
“However, retail tenancy dispute does not include a dispute solely relating to the payment of rent or a dispute that is capable of being determined by a specialist retail valuer under section 34, 35 or 37 of this Act or under s12A or s13A of the Retail Tenancies Reform Act 1998 or section 10 or 11A of the Retail Tenancies Act 1986.”
57Section 89(1) of the RLA provides:
“89 Jurisdiction of Tribunal
(1) The Tribunal has jurisdiction 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;
(b) a guarantor of a tenant's obligations under a retail premises lease;
(c) a person who has given an indemnity to a landlord for loss or damage arising as a result of a breach by a tenant of a retail premises lease;
(d) a specialist retail valuer.”
58Section 89(4) of the RLA provides:
“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.”
59Section 4 of the RLA provides:
“4 Meaning of retail premises
(1) In this Act, retail premises means premises, not including any area intended for use as a residence, that under the terms of the lease relating to the premises are used, or are to be used, wholly or predominantly for—
(a) the sale or hire of goods by retail or the retail provision of services; or
(b) the carrying on of a specified business or a specified kind of business that the Minister determines under section 5 is a business to which this paragraph applies.
(2)However, retail premises does not include the following premises—
(a) …
(b)premises that are used wholly or predominantly for the carrying on of a business by a tenant on behalf of the landlord as the landlord's employee or agent;
(c) … ;”
60Section 3 of the RLA provides the following defined meanings:
“…
dispute arising under or in relation to a retail premises lease includes a dispute arising under or in relation to the lease under a provision of this Act.
…
lease”—
(a)means a lease, sub-lease, or an agreement for a lease or sub-lease, whether in writing or not; and
(b)… ;”
61The scheme of the RLA appears to be this. If a dispute is between a landlord and tenant and “arising under or is in relation to a retail premises lease” (s81(1)), including an agreement for a sublease, and is not solely over the payment of rent (s81(2)), it is justiciable before VCAT (s89(1)) and not before any other court (s89(4)).
62If these provisions apply to this case, it will mean that the current dispute is not justiciable before this court and can only be determined by VCAT.
63In order to attract these provisions, the relevant lease (including an agreement for a sublease whether or not in writing (s3) must be in respect of “retail premises” as defined under s4.
64In order to be a “retail premises” under s4, the premises must be:
“… used, or are to be used, wholly or predominantly for—
(a) the sale or hire of goods by retail by retail or the retail provision of services … ;”
F. Plaintiffs’ submissions
65The plaintiffs’ submissions on this question were quite short. They relied on CB Cold Storage (see paragraph 68 below) and argued that the following factors meant that the kitchen premises was not a “retail premises”:
(a) the plaintiffs were providing a “cooking service” only;
(b) no fee was paid directly to the plaintiffs by the public;
(c) it was limited to guests of the VH only;
(d) the kitchen was not open to the public and could not be accessed by the public; and
(e) it was not to be seen as a separate business to the defendants’ business.
G. Analysis
66I turn now to the issues identified in the preceding paragraph.
G.1 Is there is genuine controversy about whether the premises the subject of the alleged agreement for sublease are “retail premises” within the meaning of s4(1) of the RLA?
67In order to answer this question, it is necessary to understand what is meant in s4(1) of the RLA by the expression “sale … of goods by retail …”.
68In IMCC Group (Australia) Pty Ltd v CB Cold Storage Pty Ltd,[6] the Court of Appeal had to determine whether cold storage services provided by a tenant to its customers (usually involved in the food business) were provided “by retail” and thus attracted the provisions of the RLA. The Court said this:
“[3] In summary, the phrase ‘retail provision of services’ has long been interpreted by reference (at least in part) to an ultimate consumer test; that is, are the services used by the person to whom they are sold or are the services passed on by the purchaser in an unaltered state to some third person? No distinction has been drawn between commercial and non- commercial users of the service.
…
[4]Other relevant considerations that inform whether the service is ‘retail’ in nature include the type of service that is provided and whether it is generally available to any person for a fee.
[5]Here, there is nothing in the nature of the services provided that would exclude them from being considered retail services. The services were used by the Tenant’s customers who paid a fee. Any person may purchase the services if the fee is paid. The Tenant’s customers do not pass on the services to anyone else. They are the ultimate consumers of the Tenant’s services.”
[6] [2017] VSCA 178 (per Warren CJ, Ferguson and Kaye JJA).
69The court then canvassed a number of authorities which considered the meaning of “retail premises” or “the retail provision of goods” or “the retail provision of services.” No distinction need be drawn between these, as the touchstone of each of them is the meaning of the word “retail”.
70After considering those authorities the court said:
“What can be seen from the authorities is that the concept of the ‘retail provision of services’ in the Retail Leases Act and its predecessor legislation is that it involves close consideration of the service that is offered, whether a fee is paid, whether it is a service that is generally available to anyone who is willing to pay the fee and whether the persons who use the service are the ‘ultimate consumer’. On one view, to talk of an ultimate consumer of services may appear strained. Most services that are purchased are not susceptible to being passed on to a third person. This may be contrasted with a sale of goods where the difference between wholesale and retail is easily discernible. Nevertheless, the authorities that apply an ultimate consumer test as one indicia of the retail provision of services, are of long standing.”[7]
[7]Ibid at [23].
71The parties have plainly joined issue on the pleadings on the question of whether the premises are retail premises for the purposes of the RLA.
72The defendants plead that the discussions between Mr Pun and Mr Jones were around the possibility of Mr Jones providing “retail food services” from the kitchen. They also directly allege that the kitchen are retail premises within the meaning of s4(1) of the RLA.
73In their amended reply, the defendants deny that the plaintiff would provide a “retail” food service and plead material to support that the cooking service would be provided by the plaintiffs to the VH as a “subcontractor”, rather than to customers themselves. They allege that Mr Jones said he would provide a cooking service to the VH as a subcontractor to enable the VH to provide meals to its guests. They say that the public would have no access to the kitchen physically, by telephone, or email. They say there was no dining space within the kitchen and that meals would be prepared in the kitchen from a VH menu and consumed by patrons in the dining room of the hotel. They deny that the premises were retail premises and in substance repeat the matters alleged at paragraph 1 of the Reply.
74On the face of the pleading, the question of whether the meals produced by the kitchen were provided to the VH to on-provide to its customers, or by the plaintiffs to the customers themselves, was in dispute.
75Therefore, on the face of the pleadings, the question of whether the cooking services to be provided from the kitchen was the “retail supply of goods” was “not incapable on its face of legal argument” and “genuinely in controversy”.
76I note that the Full Court in CB Cold Storage said that close consideration must be given to the service that is offered.
77The matters pleaded by the plaintiffs left a few gaps in describing the manner in which the business would be conducted. Resort may be had to some other material so as to enable a fuller understanding of whether the business they intended to conduct would predominantly or wholly constitute the sale of goods by retail.
78First, although it was not expressly said, I readily infer that the VH bar was open to members of the public and those patrons were able to order a meal for the price on the published menu. Indeed, a PDF copy of the menu is incorporated in the plaintiffs’ Reply which, under the hotel’s logo says “Victoria Hotel – Public Bar”. Under those circumstances, I infer that members of the public were able to enter the hotel and order a meal from the menu, subject to paying the published price. This is sufficient to satisfy me that the goods sold by the plaintiffs from their kitchen was intended to be available to members of the public.
79Secondly, the evidence given by Mr Jones about the business, referred to in paragraph 53 above, filled in the remaining gaps.
80The evidence of Mr Jones makes clear that, although the public would not place their orders for meals directly with the plaintiffs, those orders would be transmitted by the bar staff of the VH to the kitchen using an electronic printing device, and the ultimate consumers of the meals would pay the plaintiffs directly for those meals. Those meals, as prepared, would then be served to the ultimate consumers for consumption by the customer.
81I do not regard the fact that orders are placed for meals with a party other than the plaintiffs, and the meals are collected from the kitchen by the bar staff and served to the consumers, to affect the question of whether the meals are sold by the plaintiffs to the ultimate consumers. Clearly they are.
82The consumers place an order which is transmitted to the kitchen. The plaintiffs receive those orders and fulfill them. The plaintiffs receive payment directly from the consumers by way of cash into their dedicated till or by electronic funds transfers. The meals are then delivered to the consumers in precisely the same form that they are produced by the kitchen. In this way, it is clear that the plaintiffs use the kitchen to produce and sell meals to the ultimate consumer.
83I also note that the plaintiffs’ submission that members of the public did not pay the plaintiffs directly[8] is directly contradicted by the evidence of Mr Jones as to the payment system he intended to install.
[8] See paragraph [67] above.
84Similarly, insofar as the plaintiffs submit that the plaintiffs’ meals were not to be provided to the public, this is contradicted by the fact that the main bar was apparently a public bar where members of the public could enter and place their orders for the kitchen to fulfill.[9]
[9] See paragraph [80] above.
85The fact that, as the plaintiffs’ submitted, the parties had agreed that the plaintiffs’ business was not to be seen as a separate business to that of the VH, is no answer. The issue is whether, objectively, the business conducted by the plaintiffs from the premises would wholly or predominantly involve the sale of goods by retail.
86At this stage, I only need to decide that there is a genuine dispute between the parties as to whether the kitchen was to be used for the sale of goods by retail. I am satisfied that there is such a dispute.
G.2 If so, is the alleged agreement for a sublease a retail premises “lease” within the meaning of s3 of the RLA?
87The definition of “lease” in s3 of the RLA contemplates an agreement for a sublease, whether or not in writing.
88The parties are in dispute as to whether a valid and enforceable sublease was entered into. The plaintiffs make this allegation, which the defendants deny.
89This is sufficient to establish that there is a genuine controversy between the parties as to whether there is a sublease or not.
90This dispute is between the alleged tenant and alleged landlord of a sublease alleged by the plaintiffs to have been consummated.
91The words “in relation to” in s81(1)(a) are of wide import. Mason J in Perlman v Perlman[10] said:
“… the expression ‘in relation to’ is one of wide and general import and should not be read down in the absence of some compelling reason for so doing. … .”
[10](1984) 155 CLR 474 at [489].
92Giving those words their widest application, I see no reason why a dispute about the subsistence of a lease, which would be a retail premises lease if held valid, is not a dispute “in relation to a retail premises lease” for the purposes of s81 of the RLA.
93I note that in Australian Liquor Marketers Pty Ltd v Twenty 12 Pty Ltd & Ors,[11] Judge Lacava stayed a proceeding on jurisdictional grounds, notwithstanding that the claim sued upon was solely for rent. It was common ground that the premises were retail premises under the RLA. However, the defendant had indicated that it would defend the proceeding on the ground that no lease had been entered into. His Honour concluded that the dispute as to whether there was a valid lease at all was a retail tenancy dispute under s81 of the RLA. I infer that his Honour concluded that a dispute as to the validity of a lease that would be a retail lease if held valid, is a dispute “in relation to a retail premises”.
[11][2014] VCC 688.
94Given that I have found there to be a genuine controversy between the parties as to whether there was a valid sublease at all, and as to whether this is a retail premises lease, I conclude that there is a dispute “in relation to” a retail premises lease. In that way, the claims and defences in this proceeding raise a “retail tenancy dispute” within the meaning of s81(1)(a) of the RLA.
G.3 If the answer to those questions is “yes”, is the effect of s89(4) of the RLA that this dispute is not justiciable in this court?
95Given my answers to the foregoing issues, s89(1) gives the exclusive jurisdiction to hear and determine this dispute to VCAT and by reason of s89(4) of the RLA, it is not justiciable before this court.
H. Disposition
96Having reached the conclusions that I have, before disposing of the proceedings I wish to hear from the plaintiffs as to whether it is open to me to transfer this proceeding to VCAT, bearing in mind that they have pleaded a federal matter – misleading and deceptive conduct under the ACL – which would deprive VCAT of jurisdiction, or to the Magistrates Court of Victoria under Part 3A of the Victorian Civil and Administrative Tribunal Act 1998 (Vic). They may also consider whether to abandon their claim under the ACL or replead it to claim under the Australian Consumer Law and Fair Trading Act 2012 (Vic) in order not to deprive VCAT of jurisdiction.
97I will make orders setting the matter down a further short hearing on these matters.
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Certificate
I certify that these 19 pages are a true copy of the Reasons for Judgment of His Honour Judge Wise delivered on 5 August 2024.
Dated: 5 August 2024
Associate to His Honour Judge Wise
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