K M Sons Pty Ltd v Bonovas

[2014] NSWCATCD 111

NSW Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	K M Sons Pty Ltd v Bonovas [2014] NSWCATCD 111
Hearing dates:	20 June 2014
Decision date:	26 June 2014
Before:	S Westgarth, Deputy President
Decision:	1.The Tribunal declares that the lease between the parties is a retail shop lease and, accordingly, the Tribunal has jurisdiction to determine the dispute.
Catchwords:	Definition of retail shop Function or catering centre
Legislation Cited:	Retail Leases Act 1994 (NSW) (the Act)
Category:	Principal judgment
Parties:	K M Sons Pty Ltd (applicant) Con and Lynne Bonovas (respondents)
Representation:	Applicant (self-represented) Respondent by their solicitor Mr P Skouteris, Andresakis and Associates
File Number(s):	COM 14/31085
Publication restriction:	-

reasons for decision

Introduction

1. An application was filed on 17 June 2014 on the Tribunal form concerning Retail Lease disputes. The application contained no information as to the orders being sought but in response to the form's requirement to state reasons for requesting orders the applicant had written:

" Trying to get key from the owners who has been paid all the rent in arrears story attached in rent form".

1. Where an applicant seeks an interim order, the Tribunal's practice is to require the applicant to file a separate form called a "Request for interim order". The applicant completed and lodged such a form on the same day as the above application (17 June 2014). In the request for an interim order form the applicant stated that the interim order requested was as follows:

"requesting to get key for property".

The address of the property at Blacktown was identified. In addition, in response to the question as to the reasons for requesting the interim order the applicant had written:

"We are the tenants in [XXX]. Due to the business not going well we were behind in rent. On 11 June when I came to open office there was notice by the property agent not to enter the premises. I called them and find out the owner has locked the premises as we were behind in rent. This was done without any notice. Then the agent told us until and unless we pay the whole amount of $39,900 this is $24,662 in arrears plus rent month advance they are not allowing us to get in".

1. The applicant provided some further information concerning the background to the dispute in attachments to the application form.

1. On 18 June 2014 the applicant's application for an interim order was dismissed on the basis that there was no evidence of a retail lease and no evidence in relation to the nature of the business being conducted and whether or not it falls within the definition of a retail shop.

1. On 19 June 2014 the Tribunal received a further application for interim orders to allow the applicant possession of the property the subject of the dispute. The Tribunal made orders requiring the applicant to file and serve points of claim and evidence. In addition the Tribunal listed the matter for hearing of the application for interim relief on Friday 20 June 2014.

1. On 18 June 2014 the applicant lodged further documents with the Tribunal. These were:

• A deed of consent to assignment of lease dated 21 August 2012
• A lease dated 14 December 2009

1. The Tribunal received an email from the applicant late on 19 June 2014 attaching the points of claim required by the Tribunals directions.

The hearing on 20 June 2014

1. The application came before the Tribunal on 20 June 2014 for the purposes of dealing with the application for interim relief and for the purposes of making directions for the preparation of the proceedings for a final hearing. The applicant appeared at the hearing in person and the respondents were represented by a solicitor. The parties had agreed between them that the applicant could have access to the premises over the weekend of 20, 21 and 22 June 2014. The applicant indicated that he did not need access again to the premises until 3 July 2014. The respondents submitted that the Tribunal had no jurisdiction to deal with the dispute between the parties because the lease concerned premises which were used for the conduct of functions and wedding receptions and that such a use was not governed by the provisions of the Act. The Tribunal reserved its decision as to whether it had jurisdiction in respect of the dispute and ordered that both parties may, if they wish, make any further submissions on the question of whether the Tribunal has jurisdiction by 5pm Monday 23 June 2014. Submissions have been received from the applicant.

1. This is the decision concerning jurisdiction.

Legislative background

1. The Act regulates the leasing of certain retail shops. Section 3 of the Act defines a retail shop as premises that:

(a) are used, or proposed to be used, wholly or predominantly for the carrying on of one or more of the businesses prescribed for the purposes of this paragraph (whether or not in a retail shopping centre), or

(b) are used, or proposed to be used, for the carrying on of any business (whether or not a business prescribed for the purposes of paragraph (a)) in a retail shopping centre.

Note 1. Section 5 limits the retail shops to which this Act applies.

Note 2. Clause 17 of Schedule 3 provides that the businesses specified in Schedule 1 are taken to be prescribed for the purposes of paragraph (a) of this definition until regulations prescribing businesses and repealing Schedule 1 are made.

1. Clause 17 of Schedule 3 of the Act provides that businesses specified in Schedule 1 of the Act are taken to be prescribed for the purposes of paragraph (a) of the above definition until regulations prescribing businesses and repealing schedule 1 are made. Regulations have not been relevantly made and accordingly the businesses described in Schedule 1 determine whether the Act applies.

1. The Act contains provisions which have the effect of excluding certain retail shops from the operation of the Act or excluding certain types of leases from the operation of the Act. In these proceedings only one objection to jurisdiction was raised by the respondents namely that none of the businesses described in Schedule 1 are applicable to the lease of these premises. The respondents said that these premises are used for the purposes of conducting functions, particularly wedding receptions. The applicant agreed. It was common ground that the premises include a kitchen and occupy an area of approximately 864 square metres. The respondents submitted that schedule 1 does not contain any description which would incorporate the conduct of functions or wedding receptions. The respondent noted that Schedule 1 included the following category:

"Restaurants, cafeteria, coffee lounges, food courts and other eating places",

and submitted that this description and in particular the reference to the other "eating places" does not incorporate a function centre or a centre for the purposes of conducting wedding receptions.

The lease

1. Clause 6 of the lease provides that the lessee must use the property for the purposes stated in item 17 of the Schedule and not for any other purpose. Item 17 described the permitted use as "function and catering centre".

Applicant's submissions

1. The applicant's submission contains the following statements:

• "The leased premises known as [XXX] is set up as a restaurant with restaurant-type tables and chairs".

• "Each table is set up and decorated like a restaurant table after each function has concluded".

• "The premises comprise a very large kitchen which, inter alia, contains:

(a)   2 fixed cool rooms;

(b)   A fixed large walk-in freezer;

(c)   1 X 6-burners stove;

(d)   1 X 2-burners stove;

(e)   1 pizza oven;

(f)   2 X fryers;

(g)   1 earthen oven; and

(h)   2 X large preparation tables".

"With such a large kitchen and facilities, it is evidence that a great deal of food will be prepared and served in the Premises. The emphasis is predominantly on food much more than anything else".

• "The Premises were exclusively used for engagement celebrations, wedding celebrations, anniversary celebrations, in-house catering, birthday parties, and other milestone parties. In all of these celebrations, the main emphasis is on food. Without food and liquor being served, the Business will have absolutely no customers / patrons at all".

Decision

1. For the Act to govern the relationship between the parties it must be established that the premises are used wholly or predominately for the carrying on of one or more of the businesses described in Schedule 1 and that, in this case, the conduct of the function and catering centre is a use included within Schedule 1.

1. In the opinion of the Tribunal the predominant activity of this function and catering centre is to provide food and drinks for consumption by those attending. The fact that those attending are doing so for the purposes of celebrating a particular event such as a wedding is not relevant. The purpose of a function may be to celebrate a wedding or some other celebration but the primary business activity being conducted is the provision of food and drinks for the consumption of those attending. In the opinion of the Tribunal the predominant business being conducted pursuant to the lease between the parties falls within Schedule 1 because the function and catering centre is an eating place.

1. In Akora (Bondi Junction) Pty Ltd v Buttrose [2008] NSWADT 275 (13 October 2008) the Administrative Decisions Tribunal dealt with a similar objection to jurisdiction. The lease concerned a catering business. The Tribunal held that it had jurisdiction. The Member said that one needs to look at the actual use to which the premises were put. In that case although the lesee operated a catering business the premises were in fact being used as a bakery and as a take-away shop (both of which activities are included in schedule 1). Following the same approach I am of the view the premises in this case were in fact used as an eating place.

1. The Tribunal will make a declaration that it has jurisdiction to determine the dispute the subject of these proceedings. Orders were made on 20 June 2014 to list the proceedings again for further directions. On that occasion the Tribunal may deal with any further application for interim relief and also make directions for the preparation of this case for a final hearing.

S Westgarth

Deputy President

Civil and Administrative Tribunal of New South Wales

26 June 2014

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 04 September 2014