Mi-Ok Pty Ltd v Shaul

[2011] NSWADT 281

Administrative Decisions Tribunal

New South Wales

Medium Neutral Citation:

Mi-Ok Pty Ltd v Shaul [2011] NSWADT 281

Hearing dates:

24 November 2011

Decision date:

01 December 2011

Jurisdiction:

Retail Leases Division

Before:

K Rickards, Judicial Member

Decision:

(1)1. The application is dismissed.

(2)2. Each party is to pay its own costs unless either party files and serves written submissions within 14 days as to why a costs order should be made. If written submissions are filed and served in accordance with this order, the other party is to file and serve any written submissions in reply within 14 days and the issue of costs will then be determined upon the basis of the papers filed without the need for any further hearing pursuant to section 76 of the Administrative Decisions Tribunal Act 1997 .

Catchwords:

Retail tenancy dispute; jurisdiction

Legislation Cited:

Retail Leases Act 1994

Cases Cited:

Wood & Wilson v Bergman [2003] NSWADT 82
Moweno Pty Ltd v Stratis Promotions Pty Ltd [2003] NSWCA 376

Category:

Interlocutory applications

Parties:

Mi-Ok Pty Ltd (Applicant)
Marilyn Shaul (Respondent)

Representation:

Counsel
A Fernon (Respondent)
R Luck (Applicant, agent)

File Number(s):

115144

REasons for decision

1. These proceedings relate to premises located at Unit 12/53 Myoora Road, Terry Hills NSW ("the premises"). The premises form part of a larger complex of units from which various other types of business activities are conducted. There is a common car park used by all occupiers of the complex. There is no issue between the parties that the premises are used by the Applicant lessee as an administration office, for storage, assembly and display of variant models of an electrical bicycle, and for storage and display of a sealant and caulking gun called a "Topgun". The extent to which the premises are also used for the retail sale of these items, and whether any such use is a predominant use of the premises, are issues in dispute in the present proceedings.

1. The Applicant lessee has sought urgent interim orders to stay or prevent the Respondent from re-taking possession of the premises. Hearing of this interim Application took place on 24 November 2011, following a directions hearing where the Respondent lessor had indicated that she wished to pursue a preliminary contention that the Tribunal did not have jurisdiction to determine the proceedings, because the proceedings do not involve a "retail tenancy dispute".

1. The provisions of section 72 of the Retail Leases Act 1994 ( "RLA") give jurisdiction to this Tribunal to make orders relating to any "retail tenancy claim" which is in turn defined by section 70 of RLA to be any "claim in connection with a liability or obligation with which a retail tenancy dispute is concerned ..."; relevantly, the term "retail tenancy dispute" is defined by section 63 of RLA to be:

(a)   "any dispute concerning the liabilities or obligations ... of a party ... to a retail shop lease ..., being liabilities or obligations which arose under the lease ... or which arose in connection with the use or occupation of the retail shop to which the lease ... relates ..."

1. A "retail shop lease" is defined by section 3 of RLA to be:

"any agreement under which a person grants or agrees to grant to another person for value a right of occupation of premises for the purpose of the use of the premises as a retail shop."

1. Finally, a "retail shop" is then defined by section 3 of RLA to be:

"premises that: ... are used, wholly or predominantly, for the carrying on of one or more of the businesses prescribed for the purposes of this paragraph ...",

1. Schedule 1 to the RLA sets out a list of the prescribed businesses which are taken to be a "retail shop". This list includes "bicycle shops", "bicycle accessories shops" and "building supplies shops", which are the activities in these proceedings that the Applicant says together constitute the predominant use of the premises.

1. The Respondent lessor correctly submits that the appropriate method which the Tribunal must adopt in order to consider whether there is a "retail tenancy dispute" over which it has jurisdiction is set out within the decisions of the Appeal Panel in Wood & Wilson v Bergman [2003] NSWADT 82, and of the Court of Appeal in Moweno Pty Ltd v Stratis Promotions Pty Ltd [2003] NSWCA 376.

1. The primary and fundamental starting point is to look at what the parties agreed to as being the use to which the leased premises were to be put. If the agreement clearly defines what the use of the premises is to be, then the question as to whether or not the premises are a "retail shop" will be determined by whether or not that use appears within Schedule 1.

1. Consideration of what the premises are actually used for, is only required if the agreement is unclear in specifying what the agreed use is to be.

1. Clause 14.1 of the subject lease agreement provides that "the lessee will not use the Premises ... other than for the use specified in Item 8", and Item 8 of the schedule within the lease agreement then defines this use to be "office/light commercial".

1. The meaning of the term "office" as a permitted use of the premises is, in the Tribunal's view, clear. Exactly what the term "light commercial" means is not so clear.

1. The Respondent lessor points to a section 149 certificate dated 18 November 2011 issued by Warringah Council as showing that use of the premises within its particular geographical area for the purposes of retail shop activities is not permitted by the terms of the applicable Draft Warringah Local Environmental Plan 2009; accordingly, it is argued that the term "light commercial" cannot include any type of retail activity.

1. The Respondent's contention that the section 149 certificate is relevant to determination of whether or not these proceedings relate to a retail tenancy dispute, would be capable of being accepted if such a certificate somehow formed part of the lease agreement originally entered into between the parties, but this is not the situation here. The certificate could also be relevant where it could be shown that the Applicant lessee has been made aware of Warringah Council's restrictions and has subsequently agreed, expressly or impliedly, not to conduct any retail activity at the premises; however, there is no evidence that this has occurred.

1. A significant portion of the submissions made by the parties dealt with the financial documents produced by the Applicant relating to its conduct of business activities at the premises. These documents do not support the contention that any significant retail trade has been carried out at the premises.

1. Given that the term "light commercial" is sufficiently unclear as to require assessment by the Tribunal of what the actual use of the premises is, consideration of all of the relevant evidence, including the photographs, affidavit material and financial material, leads to a clear conclusion that the predominant use of the premises is for storage, assembly and display of electric bicycles and the "Topgun" tool, and for office administration purposes.

1. The Applicant contends that the electric bicycles, the Topgun tool and related accessories are available and displayed for retail sale. It may well be the case that from time to time visitors to the premises inspect these items but it is by no means clear whether any subsequent sales are to retail customers. It is also apparent that these items are displayed in a showroom setting which forms only part of the premises, and that the premises are neither presented nor configured for retail activity. Additionally, as indicated above, the financial records produced by the Applicant do not support its contention that its predominant use of the premises is the conduct of a retail shop business.

1. In addition, the majority of the area of the premises is used for storage, workshop assembly and office purposes; the predominant use of the premises is therefore not as a retail shop.

1. Although the Tribunal is satisfied for the above reasons that the premises do not constitute a "retail shop", one additional factor which also emerges from the evidence is that the product described as an "electric bicycle" is of course motorised and can therefore be quite correctly considered to be a "motor cycle", regardless of the size of its motor or whether or not it is required by law to be registered. Premises which are used wholly or predominantly as "motor cycle accessories shops" are prescribed by Schedule 1 to be retail shop premises, but it is clear from the express inclusion of the word "accessories" into the foregoing legislative description that premises which are used wholly or predominantly as a "motor cycle shop" are not to be considered as retail shop premises.

1. The premises are not being used wholly or predominantly as a retail shop. If they were being used wholly or predominantly as a retail shop, the Tribunal would then, in order to decide whether it had jurisdiction, need to determine whether or not such use had been agreed to by the Respondent lessor. The Tribunal accepts the Applicant's contention that the Respondent has been well aware of, and has impliedly agreed to, the Applicant's actual use of the premises. However, this agreement does not signify that the Respondent has therefore agreed that the premises are used as a retail shop.

1. Given the above findings, there is no retail tenancy dispute to be determined and therefore the Tribunal has no jurisdiction.

1. For the above reasons, orders as set out below are made.

ORDERS

1)The application is dismissed.

2) Each party is to pay its own costs unless either party files and serves written submissions within 14 days as to why a costs order should be made. If written submissions are filed and served in accordance with this order, the other party is to file and serve any written submissions in reply within 14 days and the issue of costs will then be determined upon the basis of the papers filed without the need for any further hearing pursuant to section 76 of the Administrative Decisions Tribunal Act 1997 .

**********

Decision last updated: 01 December 2011