Nichols Global Enterprises Pty Limited v Biviano

[2003] NSWADT 134

CITATION:	Nichols Global Enterprises Pty Limited -v- Biviano & Anor [2003] NSWADT 134
DIVISION:	Retail Leases Division
PARTIES:	APPLICANT Nichols Global Enterprises Pty Limited RESPONDENTS Angela Biviano Guiseppe Biviano
FILE NUMBER:	025069
HEARING DATES:	08/04/2003
SUBMISSIONS CLOSED:	04/08/2003
DATE OF DECISION:	04/08/2003
BEFORE:	Fox R - Judicial Member
APPLICATION:	Jurisdiction
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Retail Leases Act 1994
CASES CITED:
REPRESENTATION:	APPLICANT J Rhodes, solicitor RESPONDENT R Ward, solicitor
ORDERS:	Application Dismissed

1 In these proceedings the Applicant Lessee alleged a breach of the covenant for Quiet Enjoyment, and sought orders for damages and termination of the Lease. The Respondent Lessor opposed the Application. Eventually the Lessee abandoned the premises, repudiated the Lease by returning the keys and withdrew the Application. The Lessor accepted repudiation and then made application now before me, for costs.

2 The premises, the subject of the Lease are an old warehouse converted for use as a restaurant and car park. The use authorised by the Lease is “Nightclub and Restaurant and Cabaret”, there being a noon to 3am restaurant on licence, with an entertainment permit. It is common ground that the liquor licence requires that persons be on the premises with the intention to dine.

3 Although at first blush, such premises may not appear to be a retail shop – they clearly fall within the definition in Section 3 of the Retail Leases Act.

Definitions

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
Included in Schedule 1 are:-
“restaurants, cafeterias, coffee lounges and other eating places”.
4 The Lease is “of the property described” being two identified parcels of Torrens Title land, defined in the document as “the Land”. Further “the Premises” are defined by reference to the street numbers. Both of these definitions include both the building and the car park.

5 The Lease, in 1993, required the Lessee to effect all manner of internal and external building improvements and repairs, and further required the Lessee to “repair surface of the car park”. It was accepted for the purposes of argument that the local Council approval for the use of the premises as a restaurant required that there be off street parking encompassing the whole of the car park.

6 In my view all of these factors indicate that both the building and the car park are part of the retail shop. Because of that conclusion, before considering the Respondent’s cost application, I asked if the premises fell within the area exclusion of Section 5(a) of the Retail Leases Act:-

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,
7 I was shown a survey of the parcels by Jonathan C. Keen & Co, commissioned for the purposes of establishing the Gross Lettable Area Retail (apparently to resolve a previous rent dispute). It showed, in relation to the building: -
1. Measurement of the internal part of the building was complicated by the fact that some areas of the restaurant and the mezzanine floor had a height of less than 1.5 metres, and so were excluded from the calculation of the gross lettable area (and appear not to have been measured).

2. The stairway, although measured, was also noted as excluded.

3. The end result is:-

Ground floor gross lettable area (retail)	470 Sq m
Mezzanine floor gross lettable area (retail)	104 Sq m
Toilets	28 Sq m
Stairway	11 Sq m
Car park	391 Sq m
Air conditioning unit	7 Sq m
Garden and planter boxes	24 Sq m
TOTAL	1035 Sq m

8. The legislation specifically refers me to the “lettable area”, a concept which seems clearly to be different to that of the “gross lettable area retail” calculated by the surveyor.

9. The “gross lettable area retail” is a concept promoted by the Property Council of Australia in its publication of March 1997 “Method of Measurement”. This aspect of the matter was not placed in evidence before me by either party, but of course under Section 78 of the Act I am entitled to have regard to industry practice. I note that the purpose of the publication is to

“promote consistency by providing a simple approach to floor space measurement that is both practical and cost effective”.
10. It goes on to indicate that gross lettable area retail, in commercial buildings, and free standing shops excludes stairs, access ways, fire stairs, toilets, plant and motor rooms and tea rooms and other service areas “where all are provided as standard facilities in the building”. Further, planter boxes should be measured but excluded. The survey certificate which was in evidence followed these guidelines by measuring the various areas proposed for exclusion. There are other comments within the publication which seemed to indicate that areas such as toilets and other service areas are excluded from a lettable area calculation if they are not for the exclusive use of the particular tenant.

11. All of this explains the surveyor’s calculations, but is of little assistance to me in putting some meaning to the concept of “lettable area”.

12. Simple logic dictates that whatever is used for the retail trading enterprise must be part of the lettable area. Although the surveyor excludes 39 square metres which encompass the toilets and the stairway in accordance with the Property Council recommendation, I am not satisfied that this is a proper exclusion from the statutory lettable area.

13. The whole of the building was occupied by the one tenant, who used the premises for a retail purpose which involves members of the public being within the premises for a long time, and so needing toilet and similar facilities. As indicated earlier, I am also satisfied that the car park forms part of this particular retail enterprise. I note that part of the car park is occupied by the air conditioning unit. I am satisfied that both air conditioning unit and toilets are essential pre-requisites for the conduct of a licensed restaurant and so it would be facile to attempt to exclude those from the calculation.

14. It is also the case that the garden boxes and planter boxes in the car park are part of the presentation of the restaurant, and so also form part of the retail enterprise.

15. Consequently the proper calculation of the lettable area of the parcel is the total shown above (1035 square metres).

16. Even if there is some question about the inclusions of the garden and planter boxes, the total still exceeds the permissible limit for jurisdiction.

17. It follows that the subject lease falls within the exclusion of Section 5(a), and the Tribunal has no jurisdiction because the Retail Leases Act does not apply. The application must be, and is, dismissed.