Moweno Pty Ltd v Stratis Promotions Pty Ltd

[2003] NSWCA 376

CITATION:	Moweno Pty Ltd v Stratis Promotions Pty Ltd [2003] NSWCA 376
HEARING DATE(S):	26/11/03
JUDGMENT DATE:	17 December 2003
JUDGMENT OF:	Hodgson JA at 1; Ipp JA at 22; Young CJ in Eq at 25
DECISION:	Appeal dismissed with costs.
CATCHWORDS:	LEASE- Whether retail shop lease- Whether purpose of lease found in lease document or actual use of premises- Approach to construction of Retail Leases Act 1994.
LEGISLATION CITED:	Retail Leases Act 1994, ss 3, 5, 6, 8, 22, 79, 80
CASES CITED:	Barrett v Hardy Brothers (Alnwick) Ltd [1925] 2 KB 220 Ex parte Bernat; Re Le Brocque (1960) 61 SR (NSW) 877 Brikom Investments Ltd v Seaford [1981] 1 WLR 863 CAC Pty Ltd v Diamond Hill International Pty Ltd (1996) 7 BPR 14,754 Gee v Hazleton [1932] 1 KB 179 Horlick v Scully [1927] Ch 150 Randi Wixs Pty Ltd v Pokana Pty Ltd [2002] NSWADT 205 Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 Thompson v Easterbrook (1951) 83 CLR 467 Westropp v Elligott (1884) 9 App Cas 815 Williams v Perry [1924] 1 KB 936 Wolfe v Hogan [1949] 2 KB 303
PARTIES :	Moweno Pty Limited (Appellant) Stratis Promotions Pty Limited (Respondent)
FILE NUMBER(S):	CA 41207/02
COUNSEL:	G Segal (Appellant) J B Whittle SC and J A Hammond (Respondent)
SOLICITORS:	Charles G Roth & Co (Appellant) Clinch Neville Long (Respondent)

LOWER COURTJURISDICTION:	Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S):	4685/01
LOWER COURT JUDICIAL OFFICER :	Barrett J

41207/02

HODGSON JA
IPP JA
YOUNG CJ in EQ

Wednesday 17 December 2003

MOWENO PTY LTD v STRATIS PROMOTIONS PTY LTD

Judgment

1 HODGSON JA: By its Amended Summons filed on 31 January 2002, the landlord of the premises 588-590 Princes Highway, Rockdale sought a declaration “that upon its proper construction, the Lease between the plaintiff and the defendant is not a retail shop lease within the meaning of the Retail Leases Act 1994”. On 2 December 2002, Barrett J decided that the landlord was not entitled to that declaration, and dismissed the summons with costs. The landlord appeals to this Court on the following grounds:

1. His Honour erred in law in construing the combined effect of the definitions of the phrases, "retail shopping centre” and "retail shop" contained in Section 3 of the Retail Leases Act 1984 ("the Act").
2. His Honour erred in law in failing to give effect to the words “are used" contained within the definition of "retail shop" in the Act.
3. His Honour erred in law in seeking to "paraphrase" the combined effect of the definitions of the phrases, "retail shop lease" and "retail shop" in that he failed to adequately paraphrase the true effect of the definitions of those phrases (paragraph 7 of His Honour's Reasons).
4. His Honour erred in law in that he applied to the construction of the relevant definitions in the Act the decision of the High Court in Thompson v. Easterbrook (1951) 83 CLR 467, a case concerned with the definition of the phrase "dwelling house" in the Landlord & Tenant Amendment Act 1948, which definition contained the words "leased for the purposes of a residence".
5. His Honour erred in law in failing to give effect to his findings at paragraphs 23 and 24 of his Reasons to the effect that the business conducted by the Respondent consisted largely of catering for functions.
6. His Honour erred in finding the premises were a retail shop within the meaning of the relevant definitions contained in the Act.


The Notice of Appeal sought the same declaration as did the Amended Summons.

STATUTORY PROVISIONS

2 The case turns on the provisions of the Retail Leases Act 1994 (the Act).

3 Part 1 of that Act contains a number of provisions particularly relevant to the issues. First, the definitions in s.3 of “lessee”, “lessor”, “party”, “retail shop” and “retail shop lease or lease”. Those definitions are as follows:

3. Definitions
In this Act:
…
lessee means the person who has the right to occupy a retail shop under a retail shop lease, and includes a sublessee and a lessee’s or sublessee’s heirs, executors, administrators and assigns.

lessor means the person who grants or proposes to grant the right to occupy a retail shop under a retail shop lease, and includes a sublessor and a lessor’s or sublessor’s heirs, executors, administrators and assigns.

party means the lessor or the lessee under a retail shop lease.

retail shop means premises that:
(a) are used wholly or predominantly for the carrying on of one or more of the businesses specified in Schedule 1 (whether or not in a retail shopping centre), or
(b) are used for the carrying on of any business (whether or not a business specified in Schedule 1) in a retail shopping centre.

retail shop lease or lease means 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:
(a) whether or not the right is a right of exclusive occupation, and
(b) whether the agreement is express or implied, and
(c) whether the agreement is oral or in writing, or partly oral and partly in writing.

4 Sections 5-8 of Pt.1 are as follows:

5 Certain retail shops excluded from the operation of this Act
This Act does not apply to any of the following retail shops:
(a) shops that have a lettable area of 1,000 square metres or more,
(b) shops that are used wholly or predominantly for the carrying on of a business by the lessee on behalf of the lessor,
(c) any shop within premises where the principal business carried on on those premises is the operation of a cinema, bowling alley or skating rink and the shop is operated by the person who operates the cinema, bowling alley or skating rink,
(d) any premises in an office tower that forms part of a retail shopping centre,
(e) premises of a class or description prescribed by the regulations as exempt from this Act.

6 Leases to which Act does not apply
(1) This Act does not apply to any of the following leases of retail shops:
(a) leases for a term of less than 6 months without any right for the lessee to extend the lease (whether by means of an option to extend or renew the lease or otherwise), and for this purpose a provision for holding over by the lessee at the end of the term of the lease is not considered to confer a right on the lessee to extend the lease if it operates effectively at the discretion of the lessor,
(b) leases for a term of 25 years or more (with the term of a lease taken to include any term for which the lease may be extended or renewed at the option of the lessee),
(c) leases entered into before the commencement of this section,
(d) leases entered into under an option granted or agreement made before the commencement of this section,
(e) any other lease of a class or description prescribed by the regulations as exempt from this Act.
(2) This Act does not apply to any lease referred to in this section that is assigned to another person after the commencement of this section.

7 This Act overrides leases
This Act operates despite the provisions of a lease. A provision of a lease is void to the extent that the provision is inconsistent with a provision of this Act. A provision of any agreement or arrangement between the parties to a lease is void to the extent that the provision would be void if it were in the lease.

8 When the lease is entered into
(1) For the purposes of this Act, a retail shop lease is considered to have been entered into when a person enters into possession of the retail shop as lessee under the lease or begins to pay rent as lessee under the lease (whichever happens first).
(2) However, if both parties execute the lease before the lessee enters into possession under the lease or begins to pay rent under the lease, the lease is considered to have been entered into as soon as both parties have executed the lease.

5 Parts 2-8 deal with certain rights and obligations of lessors and lessees, and also with the terms of retail leases. I will refer to some particular aspects of these provisions later.

6 Part 9 of the Act is headed “Ancillary Interpretation Provisions”, and includes ss.79 and 80, which are as follows:

79 Leases partly for retail shops and partly for other premises
If a retail shop lease applies to a retail shop as well as to other separate or adjoining premises that are not a retail shop, this Act applies to the lease only to the extent that the lease is a lease of a retail shop.

80 Meaning of “renewal” of lease
A reference in this Act to the renewal of a retail shop lease ( the current lease ) is a reference to the lessor and the lessee under the current lease entering into a new retail shop lease for the retail shop to which the current lease relates (whether or not on the same terms as the current lease).

ISSUES ON APPEAL

7 Before the primary judge, and initially on appeal, the argument of the appellant landlord was that, in order to satisfy the definition of “retail shop lease”, it was not sufficient that the right of occupation under the lease be for the purpose that premises be used as a retail shop: it was submitted that, because the statutory definition of “retail shop” required actual use of a specified kind, that use must exist for there to be a retail shop lease. In my opinion, the argument so stated has no merit, for reasons given by the primary judge and by Young CJ in Eq.

8 However, following discussion at the hearing of the appeal, the appellant sought to rely on a new argument, based on the definitions of “lessee” and “lessor” and on some other sections set out above, to the effect that the Act displayed the intention that it should only apply to the extent that premises are actually used as a retail shop; and that this intention reflected back into the definition of “retail shop lease”. That argument had more substance, and requires careful consideration.

APPLICATION OF THE ACT

9 The Act appears to impose obligations or restrictions on “lessors” as defined (for example, in ss.9, 11, 13, 14, 25A, 25B, 39, 40, 41A, 44 and 45), to impose obligations on and give rights to “lessees” (for example, in ss.11A, 22, 30 and 48), and to regulate and adjust the terms of retail shop leases (for example, in ss.15-20, 23, 24B, 26-29, 31-38, 41-43, 46 and 47). The Act is also expressed as not applying to certain “retail shops” (s.5), certain “leases of retail shops” (s.6) and certain persons, retail shop leases and retail shops (s.82). However, the Act is not expressed as applying to retail shops as such, although, as mentioned above, certain retail shops are or can be excluded from the application of the Act; and the actual existence of a retail shop seems to be pre-supposed in many provisions, for example ss.8(1), 23, 24B, 25(e), 25A, 26, 30, 33, 34A(c), 36(3A) and (4), 41, 41A and 63.

10 The definitions of “lessor” and “lessee” incorporate the expression “retail shop lease”, and the Act is not expressed as applying to retail shops as such; and accordingly, in my opinion, the basic requirement for the application of the Act is the existence of a retail shop lease.

11 As suggested earlier, prima facie this definition applies so long as the right of occupation granted by the lease is for the purpose of use of premises as a retail shop: it does not in terms require the actual use of the premises as a retail shop. However, the definitions of lessor and lessee can be considered as pointing in the other direction: under the definition of “lessee”, the lessee must have “the right to occupy a retail shop”; and that tends to suggest that there must exist a retail shop of which the lessee is given a right of occupation.

12 On the other hand, s.8(2) suggests strongly that “lessor” and “lessee” cannot be so narrowly construed. It contemplates that a retail shop lease may be executed by a lessor and lessee before occupation of a shop. In my opinion, the intention is clear that, if use as a retail shop only commences on occupation, the circumstance that the right of occupation is granted by the lease for the purpose of a use as a retail shop would be sufficient to bring s.8(2) into play and thus to make the lease a retail shop lease; and s.8(2) itself makes it clear that the parties to this lease can be a lessor and lessee for the purposes of the Act, before that use commences.

13 Accordingly, in my opinion the definition of “lessee”, for example, must be read as extending to cases where the right of occupation may be of something which is not a retail shop, at least so long as it is intended or has the potential to be a retail shop. This approach would accord with the provisions of Pt.2 of the Act (ss.9-16) dealing with the obligations and rights of prospective lessors and lessees prior to entry into a lease.

14 A difficult question arises where there is a lease giving a right of occupation for the purpose of use as a retail shop, but the lessee does not actually use the premises as a retail shop. This may of course give rise to questions about breach of the lease by the lessee, and as to whether any claim by the lessor based on such an alleged breach might be met by the lessee claiming consent or acquiescence or estoppel; but leaving those questions aside, there is also the question of how the Act applies in that situation. If it be the case that the premises the subject of the lease are not a retail shop, by reason of the actual use, does the Act still apply so as to impose obligations or restrictions on the lessor, to give rights to the lessee, and or to adjust the terms of the lease?

15 One view would be that the lease is still a retail shop lease, and that the definitions of lessor and lessee can be read sufficiently widely so as to continue to apply, and that there is nothing in the Act that says that the Act is to cease to apply if there is not actual use of the premises as a retail shop. However, it seems to me that there are some problems with that approach.

16 Suppose that there were a retail shop lease for a term of 25 years of more, but that the premises were never actually used as a retail shop. It would seem that the lease would not be a lease of a retail shop, within the meaning of s.6(1), because the premises never became a retail shop. Accordingly, s.6(1)(b) would not be effective to exclude the lease from the application of the Act, because s.6(1) only applies in respect of “leases of retail shops” and not to “retail shop leases”.

17 To take another extreme case, suppose there was a lease granting a right of occupation for the purpose of use as a retail shop of a shop that had a lettable area of over 1,000sq.m., but this shop was never used as a retail shop. It would seem absurd to say that the Act applied because this was a retail shop lease, and s.5(a) was ineffective to exclude the application of the Act because the subject premises did not satisfy the definition of “retail shop”, as required for application of s.5.

18 To take another example, suppose there was a lease of two shops, both initially used as retail shops. Suppose then that the use of one of the shops changes so as to be no longer a retail shop. It would appear that s.79 would have the effect that the Act would apply to the lease to the extent that the lease was a lease of the one shop that continued as a retail shop, but not to the extent that it was lease of the other shop which was not a retail shop. On the other hand, if the use of both shops changed, so that neither was a retail shop, s.79 would not apply; and on the approach being considered, it appears that the Act would continue to apply to the lease in respect of both premises.

19 In my opinion, the solution to these problems is not to adopt an interpretation of the definition of “retail shop lease” which strains the language of the definition section; but rather to consider whether the Act discloses an intention to apply when premises that were intended to be used as a retail shop, and are the subject of a lease giving a right of occupation for that purpose, come to be used by the lessee for some other purpose. The answer may depend upon the detailed facts of the case, and the particular provisions which are under consideration.

DECISION ON APPEAL

20 It will be seen that the discussion has strayed some distance from the question actually raised by the Summons and the Notice of Appeal, namely whether the lease in this case was a retail shop lease. In my opinion, the discussion supports the view that the considerations raised both in the original argument and in the new argument are insufficient to displace the ordinary meaning of the words of the definition. However, for the reasons I have given, it may be that if the premises are not in fact used as a retail shop, some or all of the provisions of the Act will not apply.

21 In those circumstances, it seems to me that the appropriate course is that proposed by Young CJ in Eq., namely to dismiss the appeal. If the landlord wishes to litigate the question whether some particular provisions of the Act do not apply or did not apply at some particular time, or indeed whether none of the provisions of the Act apply or applied at specified times, that should be done by fresh proceedings. Those issues are too remote from those raised in these proceedings to justify keeping these proceedings alive for the benefit of the landlord.

22 IPP JA: I agree with Young CJ in Eq, for the reasons expressed by his Honour, that the appellant’s primary argument should be rejected. That argument is that, in order for premises to come within the definition of “retail shop lease”, there has to be actual use of the premises as a retail shop.

23 I agree with Hodgson JA, for the reasons expressed by his Honour, that the “new” argument, referred to in [8] of his reasons should also be rejected.

24 I agree that the appeal should be dismissed with costs.

25 YOUNG CJ in EQ: This is an appeal from the refusal by Barrett, J to make a declaratory order that a lease between the parties is not a retail shop lease within the meaning of the Retail Leases Act 1994.

26 The lease is with respect to premises 588-590 Princes Highway, Rockdale. These premises were leased by the appellant to the respondent on or about 24 August 1998 for ten years commencing on 1 February 1999.

27 Each party notified the trial judge as to the issue as it saw it. The appellant said the issue for determination was “Whether the lease between the plaintiff and the defendant as originally executed or subsequently varied was, or became, a retail shop lease within the meaning of the Retail Leases Act (NSW) 1994”. The respondent put the issue in similar terms, viz “is the lease… a ‘retail shop lease’ within the meaning of the Retail Leases Act 1994?”

28 The definition of "retail shop lease" in the Retail Leases Act 1994 is:

"' retail shop lease ' or ' lease ' means 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:
(a) whether or not the right is a right of exclusive occupation, and
(b) whether the agreement is express or implied, and
(c) whether the agreement is oral or in writing, or partly oral and partly in writing."

29 As the learned trial judge noted the vital words in that definition for the purposes of solving the present dispute are ”for the purpose of the use of the premises as a retail shop”.

30 The term "retail shop" is also defined in s 3 of the Act which provides that:

"' retail shop ' means premises that:
(a) are used wholly or predominantly for the carrying on of one or more of the businesses specified in Schedule 1 (whether or not in a retail shopping centre), or
(b) are used for the carrying on of any business (whether or not a business specified in Schedule 1) in a retail shopping centre."

31 That definition refers to Schedule 1 which contains a large list of enterprises. However, for present purposes it is sufficient to note that “restaurants, cafeterias, coffee lounges and other eating places“ are listed. Premises used for wedding receptions and functions are not.

32 Thus, the basal question on this appeal is whether the premises are leased for the purpose of use as a restaurant.

33 Before there was a variation to the lease in January, 1999, the lease contained a covenant that the appellant would not use the premises otherwise than as a Reception Lounge/Function Centre (Licensed).

34 Whilst the lease remained unvaried, it was clearly not a retail shop lease.

35 By Variation of Lease executed in January 1999, the covenant was changed so that it read, “The Lessee shall not without the written authority of the lessor use or occupy the premises otherwise than as a licensed restaurant with ancillary Function and Reception facilities.”

36 The Variation of Lease also added the following clause to the lease:

"The parties hereby agree that the use of the premises by the Lessee shall be in accordance with the development consent (as varied) issued by Rockdale City Council ('Council') under application number DA33/98 for the premises. The Lessee shall comply with all requirements of the Council as they pertain to the fitout and use of the premises and in particular but not limited to conditions 9 and 19 of the said Development consent and any related Building consent."

37 Clause 9 of the development consent referred to hours of operation. Clause 19 read as follows:

“Any functions or receptions are to be limited in number such as they are ancillary to restaurant use.”

38 The learned judge heard evidence and found facts as to the actual use of the premises. He said at [24]:

"The defendant's business conducted at the premises consists very largely of catering for functions such as wedding receptions, birthday parties and Rotary meetings which are not open to the public, as well as providing staged entertainment for paying patrons on occasions arranged either by the defendant itself or by some independent entrepreneur who hires the venue for the occasion. The premises include a kitchen. They are set up with a number of round dining tables (with chairs) each accommodating perhaps eight to ten persons. There is also a stage and a dance floor. Without exception, the functions and occasions on which groups of persons attend the premises involve the consumption of food and drink by those persons. Although the defendant has advertised the venue as a restaurant in the local press and in handbills, it was conceded that the occasions on which persons attend unannounced or by appointment for a meal unrelated to a function or other gathering of the kind I have described are infrequent; also that such small, independent groups of diners cannot be accommodated when the premises are being used for a function such as a wedding reception (which, of its nature, is confined to a self-contained group of invited guests) or when they are being set up for such a function."

39 As to whether the restaurant is the predominant use of the premises, the learned judge said this at [30]:

"There can be no doubt, as I see it, that the agreed use defined by the combination of the description 'a licensed restaurant with ancillary Function and Reception facilities' and the development consent compliance clause is a use 'predominantly for the carrying on of' the business of a 'restaurant'. The fact that the aspect involving 'Function and Reception facilities' is declared by the parties to be 'ancillary' means, of necessity, that the 'restaurant' aspect ('restaurant' being the word used in both Schedule 1 to the Act and the parties' document) is agreed by them to be 'predominant'. There is no reason to think that 'restaurant' does not have the same meaning in both the variation of lease and Schedule 1 to the Act. It follows that, whatever may have been the status of the lease in its original form, the agreement between the parties as it now stands (that is, since the variation of January 1999 which evidenced the parties' new agreement as to use) is a 'retail shop lease' as defined by the Act."

40 There is no challenge to these findings.

41 The appellant says that the trial judge erred in making his finding as to the purpose for which the premises are used based on the varied lease of January 1999. The principal arguments for the appellant are that the terms of the original lease once and for all fixed the use or, alternatively, that the current use in fact was what governed.

42 On the appeal Mr G Segal of counsel appeared for the appellant and Mr JB Whittle SC and Mr J Hammond appeared for the respondent.

43 Mr Segal submits that the purpose of the Act is to protect tenants who carry on certain types of activities on premises. A purposive construction of the Act would thus lead a person seeking to ascertain what was the purpose of the lease to pay prime attention to how the premises were in fact being used (or in fact being used with the acquiescence of the landlord) rather than there being prime reliance on the words of the lease.

44 He says that this submission is reinforced by the words “are used” at the commencement of the definition of “retail shop”.

45 Mr Segal puts that the whole purpose and structure of the Act is to consider the reality, the actuality of what happens on the ground: not merely the wording of the lease.

46 I should note here that Mr Whittle submits that even if this were so, the trial judge would have reached the same conclusion as he in fact reached. However, because he took the view of the legislation he did, the judge did not deal with this matter.

47 Mr Segal also puts that Barrett J overemphasize the word “purpose” in the definition of retail shop lease and should have given greater emphasis on the words “premises are used”. I would reject this criticism on the plain construction of the definitions which I have already quoted.

48 In my view, the learned judge was correct in the approach he took.

49 It follows that his Honour was also correct in being guided by the decision of the High Court in Thompson v Easterbrook (1951) 83 CLR 467, 481 following the speech of Lord Watson in the House of Lords in Westropp v Elligott (1884) 9 App Cas 815, that when looking for the purpose of a lease, a court looks to the use reasonably contemplated by the parties when they entered into the lease (except when they have varied that intention). Further, if the lease actually states the use that is conclusive.

50 Indeed this view has been taken in virtually all the leading cases on the point; see eg Williams v Perry [1924] 1 KB 936, 938; Barrett v Hardy Brothers (Alnwick) Ltd [1925] 2 KB 220, 227 and Gee v Hazleton [1932] 1 KB 179, 185. That is also the view taken by Denning, LJ in Wolfe v Hogan [1949] 2 KB 203, 205.

51 Of course there may be cases where the circumstances of the actual user of the premises with the acquiescence of the lessor may show that there has been some variation of the lease and that the purpose of the letting has changed. There may even be an oral arrangement which operates by way of estoppel, see Thompson v Easterbrook (supra) at pp 482-3.

52 The present case does not raise the matter mentioned in the previous paragraph. It was not raised before the trial judge and the principle in Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 prevents it being raised on appeal.

53 Mr Segal also relies on the decision of the Full Court of this Court in Ex Parte Bernat; Re Le Brocque (1960) 61 SR (NSW) 877. However, once one has rejected Mr Segal’s emphasis on “use” rather than “purpose”, not only does this case not assist his argument, actually, as Mr Whittle points out, it runs against him.

54 Mr Segal’s alternate submission that the lease at the time of its commencement once and for all determines the purpose for which the premises are to be used is destroyed by what the High Court said in Thompson v Easterbrook at page 482.

55 The argument attacking the trial judge’s decision seemed doomed to fail until, during the appellant’s counsel’s closing address the Presiding Judge drew attention to the definition of “lessee” and “Lessor” in section 3 of the Act. He noted that it could be said that there are two requirements namely a retail shop and a retail shop lease. This then led to further discussion of other parts of the Act particularly ss 5, 8, 22, 79 and 80.

56 At least some of these sections appeared to give some support to the proposition that one cannot have a retail shop lease unless there is actually a retail shop (as defined) to which it currently applies.

57 The court then adjourned so that both sets of counsel could make further submissions on the fresh matters on the basis that the time limits for submissions were to be strictly adhered to and that the Court would take no account of submissions received late. Counsel duly made further submissions in writing.

58 The main point that troubled the Court towards the conclusion of the oral hearing was that the definitions of “lessee” and “lessor” seemed to be predicated on the assumption that there was an actual retail shop in existence which the lessee had the right to occupy. Thus, if there was no retail shop in actuality (because the shop was in the course of erection or for the time being it was being used for a purpose other than prescribed or otherwise) there could not be a lessee or lessor as defined and that it is difficult to contemplate a lease without either a lessee or a lessor.

59 “Lessee” and “Lessor” are defined in section 3 of the Act as follows:

“ lessee means the person who has the right to occupy a retail shop under a retail shop lease, and includes a sublessee and a lessee’s or sublessee’s heirs, executors, administrators and assigns”
“ lessor means the person who grants or proposes to grant the right to occupy a retail shop under a retail shop lease, and includes a sublessor and a lessor’s or sublessor’s heirs, executors, administrators and assigns.”

60 The Act defines “party” as meaning the lessor or the lessee under a retail shop lease.

61 It is difficult to classify these definitions within the sixfold classification adopted by Bennion. (Bennion on Statutory Interpretation, 4th ed (Butterworths, London, 2002) s 199 p 479, classes definitions as, clarifying, labelling, referential, exclusionary, enlarging or comprehensive). However, the most appropriate category sees these definitions as enlarging definitions.

62 The prime purpose of the definitions seems to be enlarging in that the definitions may pick up situations where the occupier does not have exclusive possession or have privity of contract with the owner of the property; cf Brikom Investments Ltd v Seaford [1981] 1 WLR 863, 867, which, though on a different point, illustrates how this sort of definition is approached.

63 It seems to me that this is the focus of the definitions rather than there being a focus on the actual use of the premises.

64 In any event, as Mr Whittle points out, as definitions only apply if the context does not otherwise require, it is often unwise to place too much store on them.

65 However, the terms “lessee”, “lessor” and “party” are used consistently throughout the Act as it gives rights or imposes obligations on such people. The terms are thus extremely significant. The legislature has used some care in crafting the definitions. It would be most odd if there could be a retail shop lease without a lessor or lessee.

66 Mr Segal says that many difficulties surrounding the use of “lessee” and “lessor” disappear if his submissions are accepted. I must confess I find this hard to accept.

67 Mr Segal places emphasis on the fact that as circumstances change, so from time to time the lease may be of premises that come within the definition of ‘retail shop’ and at other times do not. Thus, he says, it is important to look to the actuality of what is happening on the ground.

68 Indeed, as he states in his written submissions, “there is no role for a consideration of the intention of the parties as gleaned from their Agreement and the only matter that requires to be demonstrated is actual user.”

69 As will appear from these reasons, the submission just quoted is an overstatement of the position and must be rejected. Even if actual user has a greater role to play than the trial judge recognized, it could not be that the sole matter to be taken into account in this type of case is actual user.

70 Mr Segal seeks to draw comfort from s 5 which provides that the Act is not to apply to certain retail shops, such as shops that have a lettable area of 1,000 square metres or more. However, as section 5 only applies if the shop was a retail shop under the definition and then makes the Act not applicable to the excluded shops, I do not consider that the section is relevant to the present point.

71 Mr Segal also refers to various other sections in the legislation which employ the term “premises are used” or an equivalent. He cites the definition of “retail shopping centre" in s 3.

72 There is no doubt that there are parts of the definitions and sections to which I have recently referred which appear to support Mr Segal’s proposition.

73 The prime provisions in this category (apart from the definitions to which I have already referred) are sections 8, 79 and 80 of the Act. These are as follows:

"8. (1) For the purposes of this Act, a retail shop lease is considered to have been entered into when a person enters into possession of the retail shop as lessee under the lease or begins to pay rent as lessee under the lease (whichever happens first).
(2) However, if both parties execute the lease before the lessee enters into possession under the lease or begins to pay rent under the lease, the lease is considered to have been entered into as soon as both parties have executed the lease.
79. If a retail shop lease applies to a retail shop as well as to other separate or adjoining premises that are not a retail shop, this Act applies to the lease only to the extent that the lease is a lease of a retail shop.
80. A reference in this Act to the renewal of a retail shop lease ( the current lease ) is a reference to the lessor and the lessee under the current lease entering into a new retail shop lease for the retail shop to which the current lease relates (whether or not on the same terms as the current lease)."

74 Section 8 does not, to my mind advance the position as it is made clear in sub-section (2) that if a lease is entered into prior to the occupation of a retail shop, the retail shop lease commences on execution.

75 Section 79 seems to contemplate that a retail shop lease only exists so long as there is a retail shop in existence to which it can apply.

76 However, it is noteworthy that s 79 only seems to deal with the situation where a lease affects two sets of premises, one a retail shop and the other not. The section does not cover the case where there is a letting of one set of premises whose actual use changes from time to time from retail shop to non-retail shop.

77 Section 80 seems to suggest that one must always have a lessor and lessee with respect to a retail shop lease so that in the absence of either, there is no retail shop lease.

78 Mr Segal also referred to the definition of “Specialist retail valuer” and to ss 19, 19A and 40, but these to my mind do not increase the effectiveness of his general proposition. He also briefly referred to ss 16(5), 22, 80B and 82.

79 Thus, it is argued that it is implicit in the reading of the Act as a whole that the Act will not apply where, even though there is a retail shop lease as defined, with the consent of the parties, the shop is not actually a retail shop.

80 Thus, in the present case, if the parties had agreed that the use of the premises would be as a Reception Lounge/ Function Centre then, despite the lease fulfilling the definition of "retail shop lease", it would not be such so long as the premises were not in fact being used as a retail shop.

81 However, one must not overlook the actual issue that was before the trial judge. That issue was not whether the plaintiff was the lessor of a retail shop lease, but whether the lease was, or became, a retail shop lease within the meaning of the Retail Leases Act (NSW) 1994.

82 Mr Segal submits that it would be contrary to the interests of justice to see this litigation come to futility because of the way in which the question was posed in the form of the summons.

83 It is certainly true that, nowadays, there is considerable scope for a judge to reframe the relevant question during the trial. However, where the plaintiff has stated the question in its summons, the plaintiff has again stated the question in a statement of issues filed after direction from the court and the trial has proceeded on that question, it is not in the interests of justice that, on appeal, some other question should be substituted.

84 Thus, neither the trial judge or we ourselves need to consider the question as to whether, if there was a retail shop lease, the Act currently applies to the lease or the premises because of the actual use currently being made of those premises.

85 In his written submissions after the oral argument had concluded, Mr Whittle reminded me of my decision in CAC Pty Ltd v Diamond Hill International Pty Ltd (1996) 7 BPR 14,754. Although the present problem was not in my mind, I said at 14,757:

“The premises were to be used as a takeaway food shop. However, they had never been used for that purpose at the time these proceedings were instituted. I think Mr Armfield, for the plaintiff, is right when he says that one must read into the definition of retail shop in s 3 premises which are used or are intended to be used for one of the business purposes specified in the schedule. This is because s 8 deems a lease to be entered into at the moment when a person enters into occupation of the retail shop under the agreement for lease, which may well be long before a formal lease is executed and registered. It would be absurd that the Act would apply in a situation where a person was operating a takeaway food shop in a store that previously was an umbrella shop (which is within the schedule) but not if that person was going to convert a shopfront solicitor’s office (which is not within the schedule) into a takeaway food store.”

86 Mr Segal does not quarrel with that passage: he merely says that I could have equally reached the same result by another route.

87 I adhere to what I said in the CAC case. On that approach, there is no is no difficulty in the application of the definitions or ss 79 and 80. This is because the purpose or intention to operate a retail shop is sufficient.

88 Likewise if there is an actual lease in respect of a shop that is being built, under s 8(2) there is a retail shop lease in existence even though there is not in actuality any retail shop to occupy.

89 Another approach which also produces sensible results is to realize that, in the definition of retail shop lease, the emphasis is on the right of occupation of premises for the purpose of a retail shop. The word which I have italicised again points away from there necessarily being an actual retail shop in esse.

90 The same phrase “the right of occupation” occurs again in the definitions of “lessee” and “lessor” though without the reference to premises. Here again, the emphasis is on the person who has the right to occupy rather than the exact nature of what is occupied or the actual use being made of what is occupied.

91 Furthermore, with certain exceptions, the Act attaches to leases (and deemed leases) rather than to premises. The heading of almost every section up to 15 includes the word “lease” or some variation of that word.

92 Again, the Act is plainly directed to protect the class of retail tenants. The interpretation that includes more scenarios within the definition rather than fewer is to be preferred.

93 Both counsel sought to gain strength for there arguments by looking to the phrase “predominant use” which occurs in the legislation. Mr Whittle says that this points to intention and purpose as the predominant actual use can change during the lease and a changing predominant purpose would make administration of and compliance with the Act very difficult. Mr Segal says that the term again is drawing attention to actual user. To my mind the point does not materially assist either side.

94 In my view the above shows that, whilst there are some arguments in support of the appellant’s case, the preponderance of discussion leads in favour of the view adopted by the trial judge who correctly determined the issue before him.

95 It follows that the approach to the topic by Member GB Molloy in Randi Wixs Pty Ltd v Pokana Pty Ltd [2002] NSWADT 205, which Mr Segal faintly relied upon, was wrong as the learned trial judge had held.

96 If Mr Segal’s contentions had been upheld, prima facie, the case would have had to be remitted to the Equity Division.

97 This raises the point as to whether there would be any utility in the remitter.

98 An ejectment action merely tries the title to the land only as at the date of the issue of the originating process. Can it be said that a suit for a declaration that a certain state of affairs exists tries the issue as at the date of the commencement of the suit?

99 There is no authority on the point as far as I am aware. However, the answer to this question is a matter of common sense. Where there is a changing set of circumstances, such as where the use of a shop can change with acquiescence during a lease, a declaration that on the facts a certain legal or equity status exists, must mean that that status exists as at the date of the issue of the originating process or possibly as at the date of decision at first instance. The former is the more traditional, the latter is the more sensible as the trial judge may well be considering the facts as they exist nearer that date. If, however, a plaintiff asks for a declaration that at some other date a state of affairs exists, then that will be the issue to be tried.

100 Thus, if a landlord seeks a declaration that a tenant is in breach of her obligation under a lease in allowing ornamental lakes to silt up (see Horlick v Scully [1927] 2 Ch 150) the facts are taken and the declaration made as at the relevant time and the declaration only has meaning as applying to the facts as they existed at that time.

101 In the instant case, had Barrett J made the declaration sought, it would have meant no more than that as at the end of 2001 when the suit was commenced or at the end of 2002 when the case was decided. The facts as to the use of the premises as at 2004, which would be the year when the hearing was resumed, if the matter was remitted, might well be quite different.

102 Thus, had the point arisen, I would have considered that there would have been no utility in remitting the matter for further hearing and left either party, had it so wished to commence fresh proceedings.

103 The appeal should thus be dismissed with costs.

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Last Modified: 12/18/2003