Randi Wixs Pty Ltd v Pokana Pty Ltd

[2002] NSWADT 205

CITATION:	Randi Wixs Pty Limited v Pokana Pty Limited [2002] NSWADT 205
DIVISION:	Retail Leases Division
PARTIES:	APPLICANT Randi Wixs Pty Limited RESPONDENT Pokana Pty Limited
FILE NUMBER:	025026
HEARING DATES:	24/06/02, 04/07/02, 26/08/02, 25/09/02
SUBMISSIONS CLOSED:	09/25/2002
DATE OF DECISION:	10/18/2002
BEFORE:	Molloy GB - Judicial Member
APPLICATION:	Jurisdiction
MATTER FOR DECISION:	Preliminary matter
LEGISLATION CITED:	Retail Leases Act 1994
CASES CITED:	Taylor v Courage [1993] 44EG116
REPRESENTATION:	APPLICANT E Cohen, barrister RESPONDENT S Jacobs, barrister
ORDERS:	1. Declaration that the premises are, on the evidence, used predominantly as a restaurant or other eating place.; 2. Consequent declaration that the Tribunal has jurisdiction to hear and determine the Application.; 3. Matter to be relisted on Monday 18 November 2002 at 10-00am to hear submissions on outstanding matters, with liberty to the parties to approach the Registrar to vary the date to suit the convenience of the parties.

1 By Application filed 22 May 2002 the Applicant sought firstly, certain interim relief and secondly, various declarations and consequent orders.

2 The Applicant is the occupier of premises 123-125 Avoca Street, Randwick, which premises are owned by the Respondent and the Applicant alleges that it occupies those premises pursuant to a retail lease. There is no need at this time to delve into the factual details and legal arguments relating to the substance of the Application because the Respondent has challenged the Applicant’s entitlement to seek relief in this Tribunal.

3 The Respondent submits that this Tribunal does not have jurisdiction to determine the issues between the parties simply because it submits that there is no retail lease as defined in the Retail Leases Act 1994 having regard to the nature of the business carried out by the Applicant at the premises.

4 I have thought it appropriate to deal with the jurisdiction argument by way of a separate decision. If the Tribunal does not have jurisdiction then that is the end of the matter; if it does then I will hear submissions on the evidence put before me on the primary issue. The Respondent’s submission has been strongly put, and on more than one occasion, and as such it demands a discrete determination.

5 Before embarking upon a consideration of the issues relating to jurisdiction, I wish to make two points:

(a) It was put to me by the Respondent that there were issues of credit such that the evidence given on behalf of the Applicant should be looked at in the light, so it was submitted, that he was not an impressive witness, was reluctant to admit various facts, was misguided in his views, was ‘patently wrong’ in a particular respect and otherwise as set out in the written submissions on behalf of the Respondent, paragraphs 66-72 inclusive. I wish to make it plain that in respect of no witness who gave oral evidence in the hearing am I prepared to conclude otherwise that the evidence was given honestly and I am not prepared to make any adverse findings relating to credit.

(b) There were some fairly vague submissions as to who bore the burden of proof where there is a challenge to jurisdiction. In my view, and having regard to the way in which the parties conducted the hearing, all matters being fully and frankly ventilated, it is not beneficial to ruminate on this matter further simply because all factual material is before me which enables me to make a decision on jurisdiction. Indeed, upon an analysis of the material and taking into account all of the oral and written submissions made, I have formed a clear view as to jurisdiction such that it would be futile to consider whether one or either party bore a particular onus.

6 The best way to approach the question is by taking the Respondent’s objections to jurisdiction and analyse those objections with reference to the material in evidence. Mr Jacobs for the Respondent has been kind enough to prepare detailed written submissions and those relating to jurisdiction are numbered 52 through to 65.

7 The primary starting point is the Retail Leases Act 1994. That Act defines (Section 3) a retail shop as, relevantly ‘premises that are used wholly or predominantly for the carrying on of one or more of the businesses specified in Schedule 1’. (There is no need to refer to the second portion of the definition which deals with retail shopping centres.) Schedule 1 prescribes a list of retail shop businesses. Relevantly, for the purposes of these proceedings, the prescribed business is ‘Restaurants, cafeterias, coffee lounges and other eating places’. Reference was also made to the prescribed business ‘Beer, wine and spirit shops (except where goods are for consumption on the premises)’. It was not suggested that any other prescribed business was relevant, neither was it suggested that the premises were subject to any exclusion under Section 5.

8 The relevance of the prescribed business is that it is the Respondent’s contention that the business of the Applicant is that of a nightclub such that it is not wholly or predominantly used for the carrying on of a prescribed business.

9 In my view there are three very important words that are used in the definition of ‘retail shop’. Those words are: ‘used’, ‘wholly’ and ‘predominantly’. During the course of argument I expressed the view that it really does not matter (for the purpose of jurisdictional argument) what are the terms of the Lease or the permitted use (if any) under the Lease – what matters is the use to which the premises are actually put. Although one may obtain some guidance from looking at the Lease documentation, in my view that is not determinative of the question simply because the legislation makes it plain that one needs to look at the actual use to which the premises are put. And the tense is the present tense, ie, the use to which the premises are put at the relevant time such that the use to which they might have been put at some previous time is also not determinative, but may be of assistance.

10 In the instant case there is no argument that the premises are not wholly used for the purposes of a restaurant, a cafeteria, a coffee lounge or an eating place of whatever description. There was no argument put to me that the premises were used in any fashion as a cafeteria or coffee lounge so that in order to be caught by the Act, the premises would have to be predominantly used as a restaurant or other eating place. The question is: on the evidence can that conclusion be drawn on the balance of probabilities?

11 In order to answer that question it is necessary yet again to look at some of the quite specific words that are used. The Applicant as Lessee submits ‘that the premises are used predominantly for the carrying on of the business of a restaurant’. There are two words that require further analysis, namely ‘predominantly’ and ‘restaurant’.

12 ‘Predominantly’ is defined in the Australian Oxford Dictionary (1999) as, ‘being the strongest or main element’. It is not helpful in my view to analyse that by way of some percentage, even if it was possible to so analyse. Obviously, it must be more than 50% but in order to predominate, it seems to me that the use must be ‘the most conspicuous or effective’ portion of the use to which the premises are put.

13 Without at this stage disregarding the words ‘other eating places’ the next word that requires analysis is ‘restaurant’. There are a number of helpful definitions of this word:

(a) in the Roads Act 1993 ‘restaurant’ is defined as ‘premises in which food is regularly supplied on sale to the public for consumption on the premises’;

(b) in the Macquarie Dictionary Second Edition it is defined as ‘an establishment where meals, especially main meals are served to customers’;

(c) in the Australian Concise Oxford Dictionary, Third Edition, it is defined as ‘public premises where meals or refreshments may be had’;

(d) in the Collins Universal Dictionary 1977, it is defined as ‘ a place where customers are provided with meals on payment; an eating-house; a tea-room; a café.’

(e) In Taylor v Courage [1993] 44EG116 the Court there held that where a tenant of a public house provided the facilities of a restaurant he was ‘carrying on’ a restaurant within the meaning of the relevant section of the English Landlord and Tenant Act 1954.

14 The significance of these definitions is that it would not be appropriate to conclude that a restaurant was limited to the provision of food refreshments only. In other words, and notwithstanding the words ‘other eating places’ it seems to me that the word ‘restaurant’ is wide enough to include the provision of refreshments without the provision of food. There is no need to make a final determination on this question because on the facts as adduced, and as I have concluded below, food was in fact provided by the Applicant. However, I do agree with the written submissions of Ms Cohen to the effect that there is no suggestion on any definition of a restaurant that the provision of refreshment must always be food.

15 Nextly, and in any event, the permitted business definition includes ‘other eating place’ – it seems to me the inclusion of those words are wide enough to catch premises that may not necessarily require a member of the public to have a sit-down meal; rather it may be sufficient to simply provide (for example) hot dogs, and provided that that use was the predominant use to which the premises were being put then the premises are caught by the Act. And in any event the business definition includes ‘coffee lounge’. It is not necessary to have a meal or to eat whilst drinking coffee in a coffee lounge yet the legislature has seen fit to include ‘coffee lounge’ in the permitted business definition coupled with the use of the word ‘other’ such that it is plain (in my view) that to fall within this particular aspect of Schedule 1, it is not necessary to have a meal or to eat. Finally, it was not contended that the premises fell within the prescribed business “Beer, wine and spirit shops (except where goods are for consumption on the premises)” – certainly the evidence shows clearly that liquor was sold for consumption on the premises.

16 What is the point of all this discussion? The Respondent submits that the Applicant’s business is that of a nightclub and that the evidence does not establish that the predominant use of the premises is that of a restaurant or other eating place. What are the facts that are determinative of this issue?

17 The evidence seems to show that the premises were being operated as at least a restaurant as far back as 1985 and probably as far back as 1972. In 1985 Mr Alex Ostrovsky and his brother purchased the business for about $180,000.00 from interests associated with the Respondent. The Respondent remained the owner of the premises. In about 1992 Mr Ostrovsky through his company, the Applicant, bought out his brother and continued to pay rent to the Respondent. The premises were subject to a registered Lease W745957 from the Respondent as Lessor to Votraint No. 227 Pty Limited (owned by Mr Ostrovsky) as Lessee for a period of 10 years commencing 7 October 1986 and terminating 6 October 1996 and subject to a further 5 year option. The permitted use was ‘a Restaurant and/or Disco’ (Clause 3.K) and the Respondent as Lessor acknowledged that ‘any licence or permit under the Liquor Act …. is the absolute property of (the Applicant’) (clause 3.L). By further Lease executed by the parties the Respondent leased the premises to the Applicant for a further term of 5 years commencing 7 October 1996 and terminating 6 October 2001 together with an option to renew for a further term of 5 years. This Lease (‘the Second Lease’) provided that the permitted use of the premises was that of ‘night club and restaurant’. Mr Ostrovsky was the guarantor.

18 Certain difficulties arose between the parties – there is no need to refer in detail at this stage to those difficulties – there was a dispute relating to the exercise or non-exercise of the option, various negotiations took place and under cover of letter 29 January 2001, the Solicitors for the Respondent submitted to the Solicitors for the Applicant a Lease document. Again, that Lease document had as the permitted use ‘night club and restaurant’ and again Mr Ostrovsky was to be the Guarantor. It was submitted on behalf of the Applicant that the use of those words ‘night club and restaurant’ amounted to an adverse admission by the Respondent as Lessee. I am unable to agree with that submission. Whatever may have been the permitted use does not tell me what in fact the premises were used for. The words may have some persuasive value or may be a factor to take into account when considering the actual use to which the premises are put. In my view, the best interpretation is simply that the use of those words is a factor that I can take into account in determining the actual use – in other words it is part of the jigsaw puzzle of evidence. In any event, the use of the words does not tell me what is the predominant use.

19 The evidence also establishes that the premises were for many years used as a place of ‘public entertainment’. Mr Ostrovsky held an On-Licence (Restaurant) licence for the premises endorsed pursuant to the Liquor Act Sections 32(1) and 32 (3) with extended trading hours. I have assumed that at all material times the premises were subject to appropriate local council planning consents. There was no evidence to the contrary.

20 On 27 August 1997 Mr Ostrovsky applied to the Licensing Court for a Nightclub Licence in respect of the premises. In support of his application he deposed on oath that he had 11 years experience in the liquor industry, that he already had on display in the premises appropriate posters pursuant to liquor law, that he was a member of the local Liquor Consultative Committee and that he had in place a house policy relating to, inter alia under age drinking, intoxication and drink driving, that he already employed licensed security personnel for the premises and had a disc jockey. In my view, these revelations to the Licensing Court are consistent with his oral evidence to this Tribunal to the effect that there was effectively no change in the operations of his business from the premises prior to and after the ultimate grant of the Nightclub Licence. Furthermore, in support of his Nightclub Licence Application, Mr Ostrovsky swore a detailed Affidavit of Evidence, which clearly satisfied all the relevant authorities, including the Liquor Administration Board, the Department of Gaming and Racing and ultimately the Randwick City Council. There is no need to go through the Affidavit of Evidence in detail. Suffice it to say that it demonstrates that the premises in 1997 consisted of a bar area, an entertainment area, dining areas, two commercial kitchens, sanitary and office facilities. In paragraph 7 Mr Ostrovsky stated:

“As in the past, in relation to the restaurant licence, there are sufficient facilities to supply meals at the one and the same time for in excess of 50 persons.”

21 He observed (paragraph 12) that:

“The premises have been trading until 2.00am since the Section 32(3) endorsement was granted on 27th September 1991.”

22 In paragraph 30 he stated:

“We have two commercial kitchens capable of serving meals to the number of persons permitted on the premises at any one time (120 persons per document 24 in Exhibit 13). We intend having food available at all times if sought whilst the premises are open for trading as a nightclub.”

23 Randwick City Council initially opposed, by Amended Notice of Objection dated 17 November 1997, the grant of a Nightclub Licence to Mr Ostrovsky. The primary ground of opposition was that:

“The premises do not have development consent for use of the premises as a nightclub or to trade for the hours permitted pursuant to S. 35C of the Liquor Act. Unauthorised use of the premises for the purposes of a nightclub would be in breach of the Environmental Planning and Assessment Act 1979.”

24 Their Solicitors informed the Applicant’s Solicitors by letter dated 30 January 1998 that:

“It has always been Council’s position that the use of the premises as a nightclub is a substantially different use, in planning terms, from a Bistro (licensed restaurant) for which development consent is extant.”

25 As it turns out, and after negotiations, Mr Ostrovsky lodged with the Council a Development Application seeking consent for the use of the premises as a nightclub, the Council objection was withdrawn and I have assumed that the Development Application was subsequently approved.

26 Subsequently, the Liquor Administration Board granted the Nightclub Licence to Mr Ostrovsky on 26 February 1998.

27 On 3 February 1998 the Applicant’s then Solicitors, informed the Board that in relation to the On-Licence (Restaurant), Mr Ostrovsky:

“will not be surrendering the licence but redefining it into a storage area within the building so that in the event the Nightclub Licence is ever removed then the On-Licence (Restaurant) can be redefined and restored to the premises. Accordingly the licence will be held in a dormant capacity.”

28 That application was also approved by the Board which observed (document 28 in Exhibit 13) the ‘licence to be held in a dormant capacity’. In paragraph 70 of his written submissions, Mr Jacobs sought to attack the credit of Mr Ostrovsky when in answer to questions about this On-Licence (Restaurant) Mr Ostrovsky expressed the view that the licence could be revived by him at his will. It was submitted that response was patently wrong. With respect, I am unable to reach that conclusion. Mr Ostrovsky’s evidence in this regard may have been a trifle confusing – indeed, some technical legal jurisdictions are confusing – but in my view he did his best consistent with the submission made by his then Solicitors and the approval granted by the Board which demonstrates quite clearly that the licence was held in a dormant capacity and then, should the Nightclub Licence be ever removed, the On-Licence (Restaurant) could be redefined and restored to the whole of the premises.

29 The Nightclub Licence itself is dated 26 February 1998 and is subject to various terms two of which are, relevantly:

(i) Liquor must not be sold or supplied between 12.00 noon and 08.00pm on any day that is not a restricted trading day, or between 12.00 noon and 10.00pm on a restricted trading day, except with ancillary to a meal consumed at a table on the premises.

(ii) Liquor must not be sold or supplied unless:

(a) the liquor is sold or supplied with or as ancillary to entertainment and at least a light meal is available, with or without charge, for consumption by persons to whom liquor is sold or supplied, or,

(b) the liquor is supplied with or an ancillary to a meal consumed at a table on the licensed premises.”

30 It is plain from those terms that, as Ms Cohen submits,

“In order to be a nightclub the premises must be a restaurant or an eating place.”

31 In addition, the penultimate paragraph of the licence itself states:

“Food must be available whenever liquor is consumed on the licensed premises.”

32 Great play was put by each party on the existence of the Nightclub Licence as compared to the On-Licence (Restaurant). I am unable to draw any conclusion adverse to the Applicant by the fact that he was granted a Nightclub Licence on 26 February 1998 and that the On-Licence (Restaurant) was declared dormant in relation to the premises. The relevant lease in existence at that time was the Second Lease commencing 7 October 1996 and terminating 6 October 2001. Subsequently, as I have stated above, on 29 January 2002 (Exhibit IG11) the Respondent through its Solicitors submitted a fresh Lease with exactly the same permitted use and it would be not unreasonable to assume that the Respondent, being the owner of the premises, was aware of the use to which the premises were being put and had no objection. I have also assumed, absent evidence to the contrary, that the Respondent must have been aware of the grant to Mr Ostrovsky of a Nightclub Licence in February 1998 and that in January 2002 he continued to hold that Licence. Both the dormant restaurant licence and the Nightclub Licence arise out of the provisions of the Liquor Act. It would seem that, as Ms Cohen points out in her written submissions,

“The difference between a Restaurant Licence and a Nightclub Licence is only that there are different controls on the service of alcohol at the premises. The licence does not relate to the use of the premises, but only the conditions under which the patrons may be served alcohol ….. the fact that the sale of alcohol is controlled by law does not mean the premises which allow the service of alcohol without food are not eating places or restaurants.”

33 In this particular case it is plain from the grant of the Nightclub Licence that food must be available – in other words at the very least the premises must continue to be some sort of “eating place” and at most a “restaurant”.

34 The strongest portion of the Respondent’s submission is that there are significant features of the conduct of the business at the premises that one would not normally associate with a restaurant or an eating place that was predominantly used for one or either of those purposes.

35 The Respondent’s Counsel has set out those features in paragraph 59 of his written submissions and I shall deal with them but not necessarily in the same order. Before so doing however it is important to have reference to the evidentiary material relating to the use of the premises as put forward by the Applicant.

36 Firstly, and importantly, there was a bundle of photographs (Exhibit E) of the premises. In summary, the façade of the premises demonstrates the premises described as “Randi Wixs Restaurant” and (on the illuminated sign) “Randi Wixs Licensed Restaurant”. Just inside the doorway one finds a sign “Randi Wixs Nightclub … Restaurant on premises ….” . Inside there is a bar with appropriate licensing notices, there is a sign “Hot Food” specifying various items of available hot food including nachos, hot dogs and toasted sandwiches. There are various photographs of the downstairs kitchen, tables and chairs and over the bar area there is a form of strobe lighting.

37 Secondly, there was material, which was really unchallenged, which indicates that the Licensee (Mr Ostrovsky) does in fact provide meals at all of the hours when the restaurant is open, there is a menu available on the letterhead “Randi Wixs Wine Bar & Licensed Restaurant” and there are a number of menus available for private functions. The evidence demonstrates that Mr Ostrovsky conducts quite a number of private functions at the premises. Importantly, the evidence also demonstrates that because of the current litigation in this Tribunal, Mr Ostrovsky has not conducted the business on the premises in the way that he would normally so conduct it. For example, he tells me that he has been reluctant to hire staff because he is simply not sure as to the outcome of these proceedings having regard to the approach taken by the Respondent.

38 The Respondent hired a private inquiry agent, a Mr Mark Mullen. He received instructions on 14 June 2002, which instructions required that he attend the premises “for the purpose of determining the use of the premises”. With respect, and as I have observed above, it is extraordinary that the Respondent, being the owner of the premises, and having leased these premises to the Applicant or his predecessors for many, many years, and having prepared and sent out a proposed Lease contract on 29 January 2002 (IG 11) which in itself stated the permitted use to be (consistent with the previous permitted uses) as “Night Club and Restaurant”, found it necessary to somehow determine, by use of a private inquiry agent, the use of the premises as late as 14 June 2002. However, the Respondent relies upon Mr Mullen’s evidence, but only as to part. Some parts of his evidence, namely that there was a sign above the bar which displayed the following words:

“It is a condition of entry that all patrons must order a meal with their drinks”

and a sign outside the premises specifying the details of a

“party menu” were not relied on.

39 Mr Mullen’s evidence shows that he attended the premises on 14 June 2002. He then describes the premises in a way not inconsistent with the evidence of Mr Ostrovsky, and then he refers to a bar person operating DJ equipment, he ordered a beer from another bar person and then deposed that at 10.34pm he spoke to the female bar person again and asked to order some food and did she have a menu. In short, the response was that there was no food, no snack food, no chips or nuts.

40 Mr Ostrovsky in his evidence says that the cook was not well on that evening and because of this litigation he was unable to give anyone a permanent job and there will continue to be difficulties in the operation of the business until the litigation is resolved.

41 Mr Mullen’s further evidence is that on the following day (15 June 2002) he returned to the subject premises at 11.00pm. There was a doorman present, loud music was emanating from the premises and he was told by the doorman that there was a private party taking place that would not finish until 12.30pm. He asked the doorman:

“Can I get in after 12.30?”

42 He was told that he could but he would not be able to get something to eat at that time because ‘it’s a nightclub’. He said that he looked through the open doorway into the inside of the premises, observed that the premises were almost filled to capacity with many young people of the age 20-25 years, ‘standing around drinking and talking’ and that he did not observe any persons eating food. It is plain on this evidence that the premises were in fact being used as a private party and although Mr Mullen did not observe any persons eating food, I am unable to conclude on that evidence that there were no persons eating food or that persons had not been eating food. Indeed, the evidence of Mr Ostrovsky is to the contrary.

43 Mr Mullen swore yet a further Affidavit stating that he went back to the premises on 20 June 2002 at 7.30pm and 8.40pm and found the premises closed and the neon sign turned off. That, it seems to me, is not inconsistent with the evidence given by Mr Ostrovsky. Mr Mullen further stated that he returned to the premises at 11.15pm on Friday 21 June 2002. Why it was that Mr Mullen seemed to attend the premises at such late hours was never truly explored. He found both front doors closed but the neon light was lit up but one of the front doors was unlocked. He entered the premises and made some observations. Without going into them in detail (paragraphs 7-11 of his Affidavit 24 June 2002) none of those observations really takes this matter further. Curiously, Mr Mullen did not approach the two bar persons, did not ask for a meal and left the premises at 12.05pm!

44 On the following day 22 June 2002 at 8.06pm he again attended the subject premises and found displayed a sign ‘Private Function. No admittance until 12 midnight.’

45 It was submitted that evidence, taken in total and in the context of Mr Ostrovsky’s conviction by the licensing court on 24 October 1992 for selling liquor otherwise than with a meal, is a factor that should weigh heavily against the Applicant and demonstrates that the premises were not used predominantly as a restaurant or other eating place. I reject that submission. It flies in the face of the evidence of Mr Ostrovsky, it flies in the face of commonsense and in my view that evidence is just not sufficient in order to draw the conclusion for which it was advanced. In any event, the fact that Mr Ostrovsky was the subject of a conviction some 10 years ago in my view is absolutely irrelevant.

46 The next feature relied upon is the floor space allocated to the bar, the dance area and the manager’s residence. The plans were in evidence but I am unable to reach any conclusion adverse to the Applicant from the plans. It was put strongly that there was a room upstairs – described as a ‘refuge’ where Mr Ostrovsky could sleep over when he had, or felt he had, too much to drink. So what?

47 Nextly, it was suggested that because of the hours of operation as a nightclub (said to be 11.00pm to 3.00am) and after 11.00pm there is a full-time DJ, somehow from that I am to conclude that the premises are not predominantly used as a restaurant or other eating place. Quite frankly I do not think that takes the matter any further, particularly having regard to the terms of the grant of the nightclub licence. Some importance was placed on the fact that the On-Licence (Restaurant) was dormant and made so at the specific request of Mr Ostrovsky. Again, I am unable to reach any conclusion from that fact other than to say that one would not unreasonably conclude that the holding of an On-Licence (Restaurant) is probably inconsistent with the holding of a Nightclub Licence and to further observe that it was Mr Ostrovsky’s evidence, unchallenged, and supported by the continuation and content of the lease documentation, that the actual operation of the business had not changed. That evidence was not challenged, is consistent with the continuation of the Lease contracts over many years and the description of the permitted use in these Lease contracts and there has not been the slightest suggestion in the past that the operations/business conducted by the Applicant from these premises was not otherwise than in accordance with the permitted use and not otherwise caught by the Retail Leases Act 1994. I say that because the evidence demonstrated that the Lease which commenced 7 October 1996 was a Lease supported by a Disclosure Statement as required by the Retail Leases Act 1994. It must have been that the Respondent thought that the operations of the Applicant from the premises were at least predominantly those of a restaurant or other eating place and if I accept the evidence of Mr Ostrovsky to the effect that the method of conducting the business has not substantially changed since the grant of the Nightclub Licence in 1998, then whatever business he is conducting today is similar to that he conducted back in 1996 subject to his statement that due to this litigation he is unable to give anyone a permanent job and there will continue to be difficulties with the operation of the business until this litigation is resolved. I accept that evidence.

48 It was put to me that somehow the cross examination of Mr Mullen demonstrated an acceptance by the Applicant that the use of the premises was not as a restaurant. This submission was based upon two statements of Mr Mullen. Both of these statements were predicated on the basis that Mr Mullen went to the premises late at night and then when he attended the premises they were not at a time in which a restaurant would normally operate, alternatively at a time when in the normal course people would have had their dinner. I would have thought, with respect, that one could not draw any conclusion adverse to the Applicant from that cross-examination.

49 The most telling features relied upon by the Respondent were:

(i) the use of a specific term “nightclub” by the Liquor Administration Board, in contradistinction to the use of the term “restaurant” and the necessity to submit a separate Development Application to the Randwick City Council in respect of a nightclub.

(ii) The cost of the Nightclub Licence, being $50,000.00.

(iii) The fact that the cost of liquor for the premises exceeded the cost of food by more than a factor of four or five.

50 It was never really explained by Mr Ostrovsky why it was that he found it necessary to apply for a Nightclub Licence when he already had an On-Licence (Restaurant), having regard to his statement that the actual operations of his business did not change as a result of the grant of the former licence. As I understand the evidence (T.4/7/02 at 59) a Nightclub Licence is portable whereas an On-Licence (Restaurant) remains with the premises. However, the explanation is available from Exhibit ‘12’, document ‘1G18’, which makes it plain that the law changed in that by the Liquor Amendment (Nightclub Licences and Trading Hours) Act 1996 restaurant licences with a section 32(3) endorsement were abolished with regard to the endorsement subject however to the holders of such licences being able to apply for a Nightclub Licence no later than 31 August 1997. Mr Ostrovsky so applied on 27 August 1997. Certain provisions enabled the holder of a section 32(3) endorsement to have a less rocky path towards the grant of a Nightclub Licence. These recognised the commercial effect of a section 32(3) endorsement as distinct from an Applicant for a new Nightclub Licence. However, I do not think it is correct to conclude that the section 32(3) endorsement is in any way definitive of the actual use of the premises, rather such an endorsement is permissive. Indeed the On-Licence (Restaurant) (Exhibit ‘3’) demonstrates on its face ‘Seating in Restaurant for … 113 persons (Varied on 02 May 1988)’ and this is supportive of the view that the premises operated as a restaurant with section 32(3) permissive extension. And in any event and as I have observed above the Nightclub Licence itself requires the holder not to sell liquor ‘except with ancillary to a meal consumed at a table’ or ‘at least a light meal is available’ (depending on the hours of operation).

51 There was no evidence as to the cost of an On-Licence (Restaurant) as distinct from the cost of the Nightclub Licence but whatever be the view it is plain that Mr Ostrovsky regarded the holding of a Nightclub Licence as commercially appropriate and as commercially advantageous. The On-Licence (Restaurant) was itself in evidence before me (Exhibit 13, Document 3) and demonstrates two important factors. Firstly, extended trading hours pursuant to endorsements under Liquor Act Sections 32 (1) and 32 (3). Those endorsements were approved (in relation to Sunday) on 12 February 1998 and in relation to the other days of the week, on 27 September 1991. Secondly, not only was the On-Licence (Restaurant) granted to Mr Ostrovsky on 8 August 1980, but it makes it plain in its terms that the Licensee ‘is authorised to sell and dispose of liquor for consumption on the licensed premises’.

52 No comparative analysis was made by either party. However, it is plain that both licenses permitted the Licensee to sell and dispose of liquor for consumption, both licenses indicate clearly on their respective faces that the premises are open for late trading and both licences indicate plainly that meals must be available. There is no argument on this ground in respect of the On-Licence (Restaurant) and neither can there seriously be advanced an argument to the contrary with respect to the Nightclub Licence. The premises themselves are clearly identified as a “restaurant” on the outside of the building and there is no argument that in order to be a nightclub (under the relevant licence) the premises must be a restaurant or an eating place.

53 It was not contended that I should view the word “nightclub” in a manner other than by reference to the actual licence issued by the Liquor Administrations Board. Its use is therefore constrained by the status and it follows that its use in common parlance is probably irrelevant. However, the Macquarie Dictionary, 2nd Edition, defines ‘nightclub’ as being ‘a place of entertainment, open until late, offering food, drink, cabaret, dancing etc’, and the Australian Concise Oxford Dictionary, 3rd Edition, defines it as ‘a club that is open at night and provides refreshment and entertainment’. In my view, if common parlance is relevant, both descriptions in any event fall within the Schedule 1 parameters.

54 The submission that I should form a view adverse to the Applicant by the fact that Randwick Council required a development application in respect of a nightclub has, in my view, no merit. The Liquor Act had significantly changed (paragraph 50 above) and the Applicant really had no reasonable alternative but to apply for a Nightclub Licence (under the Liquor Act). The operation of a ‘nightclub’ may have been a different use, in planning terms, from that or premises holding an On-Licence (Restaurant) but in my view the terms of the Nightclub Licence did not differ significantly from those of the On-Licence (Restaurant) with its various endorsements such that, whatever may have been the planning view of the Council the actual use does not, on the evidence, appear to have changed. In any event, the Council granted the Applicants development application and imposed no terms that impeded the use of the premises consistent with the terms of the Nightclub Licence.

55 The real question, the nub or crux of the whole issue of jurisdiction, is the actual use to which these premises are put. When one looks at the Retail Leases Act 1994 the definition of ‘retail shop’ refers specifically to the actual use to which the premises are put. Although it is interesting, and no doubt educative, to examine all these other questions that were so urged upon me, in my view (and I made this plain during the course of the hearing) the real issue is the actual use of the premises. The question is in this case:

“Are the premises being actually used predominantly as a restaurant or other eating place?”

56 The Respondent, in addition to relying upon the evidence of Mr Mullen as to actual use, relies also upon an Affidavit of Mr Angus Fortheringham, a Solicitor who examined and categorised the various business invoice documents produced by the Applicant. He examined 172 documents and concluded that $5,575.11 was spent on food and other general expenses (but mainly food) out of a total expenditure of $27,965.95. In other words, the food side of the business absorbed something like 20% of the outgoings compared to the alcohol, which took up the other 80% of the outgoings. That is probably being a little generous to the Applicant because some of the 20% expenses related to matters other than food, eg, carpet cleaning, music etc. But taking a broad brush approach it would seem that by way of a comparison between the business expenses for food and alcohol, food takes up about 20% and alcohol about 80%.

57 Unfortunately, there was no material against which I could conduct any sort of comparison. Mr Fotheringham’s careful analysis of documentation commenced from a document 4 July 2001 so I was unable to compare those running expenses with the running expenses of the business prior to the date of the grant of the Nightclub Licence. However, Mr Ostrovsky has stated that the conduct of the business did not change such that I conclude that during the holding of the On-Licence (Restaurant) and the holding of the Nightclub Licence, the running expenses were somewhat similar.

58 What conclusion should I draw from this? Mr Ostrovsky’s evidence (unchallenged) was that it cost a great deal more to purchase liquor than it does to purchase food. One’s personal experience is indicative of that and of course it depends on the type of liquor purchased. Mr Ostrovsky in his evidence had no difficulty in admitting the substantial difference between the cost of liquor purchased and the cost of food purchased. He said, tellingly in my view, that the cost of 20kg of calamari was $20.00 but the cost of 3 bottles of spirits was $110.00. He said that he made more money out of food but there was a quicker turnover on liquor.

59 Should I form an adverse view from these bald facts? The evidence of Mr Ostrovsky, even during his cross-examination, I thought was given honestly although, on occasion, somewhat confusing. However, in substance, his evidence demonstrates that when the premises are open there is always a chef on duty (unless he is sick), there was no real challenge to his Affidavit sworn 26 August 1997 in support of his Application for grant of a Nightclub Licence (Exhibit 13 Document 12) and weighing up all the evidence, all fully put before me by both parties, I am not prepared to form an opinion adverse to that of the Applicant. Rather, I am of the view on the evidence that the premises are used predominantly as a restaurant or other eating place within the terms of Schedule 1 of the Retail Leases Act 1994 such that this Tribunal has jurisdiction to hear and determine the dispute relating to the occupation of the premises by the Applicant.

60 I therefore make the following declarations and orders:

1. Declaration that the premises are, on the evidence, used predominantly as a restaurant or other eating place.

2. Consequent declaration that the Tribunal has jurisdiction to hear and determine the Application.

3. Matter to be relisted on Monday 18 November 2002 at 10-00am to hear submissions on outstanding matters, with liberty to the parties to approach the Registrar to vary the date to suit the convenience of the parties.