Rolet v Baron

[2002] NSWADT 136

CITATION:	Rolet -v- Baron [2002] NSWADT 136
DIVISION:	Retail Leases Division
PARTIES:	APPLICANT Eddy Sylvian Marcel Rolet t/a Survivors of Child Abuse-Supporters Survivors RESPONDENT Ken Baron
FILE NUMBER:	015102
HEARING DATES:	21/06/02
SUBMISSIONS CLOSED:	06/21/2002
DATE OF DECISION:	08/09/2002
BEFORE:	Fox R - Judicial Member
APPLICATION:	Claim for payment of money
MATTER FOR DECISION:	Jurisdiction
LEGISLATION CITED:	Retail Leases Act 1994
CASES CITED:	Cathay Developments Pty Ltd v. Laser Entertainment Pty Ltd Matter No 4697/97 [1998] NSWSC 82 (25 March 1998)
REPRESENTATION:	APPLICANT In person RESPONDENT G Gordon, solicitor INTERVENER K Carlsund, registrar of Retail Tenancies Unit
ORDERS:	1. Application dismissed - no jurisdiction - Section 6 (1)(a) Retail Leases Act.; 2. No order for costs.

1 The hearing in these proceedings was limited to the question of jurisdiction, it being apparent that Section 6 (1)(a) might well apply to place the letting outside of the ambit of the Act.

2 Mr Rolet appeared for himself, and Mr Baron was represented by Mr Gordon, Solicitor of E H Tebbutt and Sons.

3 The Registrar of Retail Tenancy Units intervened pursuant to Section 65(2)

4 I had before me affidavit evidence from Mr Rolet and Mr Baron, and both gave oral evidence and were subject to cross-examination.

5 I am satisfied that both Mr Rolet and Mr Baron are witnesses of truth, and I accept their evidence as honestly given.

6 There was no controversy about the term of the tenancy, it commenced on 18 April 2000 and was terminated by lock out on 22 December 2000.

7 In order to place to whole matter in context it is appropriate to first observe that there was a dispute in relation to a payment to $400.00 alleged to have been made around 18 April 2000, but there was no dispute in relation to subsequent payments of rent at a rental of $100.00 per week as follows:-

Date Of Payment	Amount	Date Paid To
4 August 2000	$200.00	18 August 2000
18 August 2000	$200.00	1 September 2000
1 September 2000	$400.00	14 September 2000
15 September 2000	$200.00	29 September 2000
6 October 2000	$200.00	13 October 2000
13 October 2000	$200.00	27 October 2000
30 October 2000	$200.00	10 November 2000
16 November 2000	$200.00	24 November 2000
27 November 2000	$200.00	8 December 2000

8 It should be noted that the payment on 1 September was $400.00, but the receipt noted the rent to be paid to 14 September only, not 28 September as would have been expected. Mr Baron’s explanation was that, although, in April he had asked for $200.00 as two week’s rent in advance, and another $200.00 by way of bond, he never actually received any payment at all until the payment of $200.00, evidenced by the first (4th August) receipt. The receipt of 1st September in the sum of $400.00, covered $200.00 rent for occupation for two weeks only (between the 1 September and 14 September), and established the payment of the required $200.00 “bond”. This “bond” was the reason why, after the last payment, which covered occupation up to 8 December, he allowed a further two weeks to pass until 21 December before he locked the premises, because that was the entitlement resulting from $200.00 held.

9 Against this it was Mr Rolet’s evidence that he made a payment in April in the sum of $400.00 but he received no receipt for that. This was denied by Mr Baron.

10 In view of my conclusions in the matter, it is not necessary that I make a finding whether or not the initial $400.00 payment was ever made, and it appropriate to indicate that my findings would not be any different if it were to be positively established, by reference to bank records, that the particular $400.00 payment was received by Mr Baron.

11 It is clear that there was a “free” occupancy from April until August whilst repairs were being carried out to the premises. The repairs are acknowledged between the parties, although the adequacy thereof is not.

12 The shop is quite small, is in a “difficult” area of Narooma, and had been vacant for a very long time when Mr Rolet, in response to a notice in the window of the shop, approached Mr Baron with a view to renting the premises. In those discussions there was no indication of any length of lease, Mr Baron simply said:-

“the rent is $100.00 per week, and I want two weeks in advance, and two weeks bond”.
13 Under cross examination by Mr MacDonald on behalf of the Registrar of Retail Tenancy Unit, Mr Baron conceded:-
“as long as they paid the rent every week, they could stay there for as long as they liked”.
14 Mr Rolet conceded that the question of the length of the tenancy never arose in any discussions; put it at its highest, his evidence was:-
“we indicated that we did not want to be there under a year”.
He further thought that his business partner (who was not available to give evidence at the hearing) may have mentioned a longer term to Mr Baron, but Mr Baron denied this.

15 It was Mr Rolet’s evidence that he did ask for a lease, and that Mr Baron indicated that he would talk to his Solicitor, but I note that Mr Rolet went on to say that the length of the term was up to Mr Baron:-

“we were waiting for the lease to be drawn up, we were waiting for his proposal which never occurred”.
16 It is clear that the agreement between the parties was a Retail Shop Lease as defined in Section 3:-
“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 expressed or implied, and

(c) whether the agreement is oral or in writing, or partly oral and partly in writing”.

17 The evidence satisfies me that, although there was request for a written lease, for an identified term, Mr Baron never agreed to that and, more importantly, there was never any request for any specific term of months or years, and consequently it is not possible to construe, out of the meetings and discussions between the parties, anything which might in any way indicate that there was to be a lease or occupancy for a period of more than 6 months.

18 I think it is abundantly clear, as a matter of law, that in the absence of such an indication, the term of the lease can only be established by reference to the payment of the rent. The rent was paid fortnightly, and it follows that the occupancy which occurred was a fortnightly tenancy, terminable at the will of either party, by a fortnight’s notice. Alternatively, Section 127 of the Conveyancing Act 1919 applies to render it terminable at one month’s notice.

19 Just as clearly, it seems to me, the retail lease or lease which resulted from this entirely oral agreement is excluded from the operation of the Act by Section 6:-

“ (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”,
20 There is not, in the agreement between the parties, any right of the Lessee to extend; it was terminable by either party on a fortnight’s notice. It follows that the right of occupancy or lease created was always outside the Retail Leases Act , and always outside the jurisdiction of this Tribunal. See the decision of Young J in Cathay Developments Pty Ltd v. Laser Entertainment Pty Ltd Matter No 4697/97 [1998] NSWSC 82 (25 March 1998).

21 In this regard it is appropriate to note that Section 63 does gives this Tribunal jurisdiction in relation to Retail Tenancy Units which arose in respect of leases affected by Section 6(1)(c)&(d) but Section 63 does not extend to section 6(1)(a).

22 The Registrar of Retail Tenancies argued that the correct approach in these circumstances is to say that, once there is a retail lease as defined by Section 3 it automatically, by Section 16, is created for a minimum term of 5 years because the agreement reached between the parties was not expressed to be for less than 6 months, and so by definition could have extended to more than 6 months, as indeed it did in these particular circumstances. He went on the expand this proposition by saying that to allow the Lessor’s argument in these circumstances gave rise to an unintentional method of evading the operation of the Act.

23 It is clear that short tenancies do evade the operation of the Act, but I am not at all sure that that is a result unintended by the legislature. It has always been clear that a retail shop lease created in writing, for a period of 5 months and expressed to be thereafter subject to a holding over, terminable by either Lessor or Lessee at one month’s notice, is placed outside the operation of the Act by Section 6 (1)(a).

24 Mr Rolet’s application fails because, whatever occupancy he had of the premises, despite the fact that it was clearly a Retail Lease, it was for a term of less than 6 months and so is not within the jurisdiction of this Tribunal.

25 Mr Gordon quite properly made an application for costs, he being the successful party. In order to grant that application I must find that there are special circumstances, and I am not satisfied that there are.

26 In the end the proceedings were relatively simple, and Mr Rolet’s conduct of them did not unduly extend them. The point at issue was important enough to have the Registrar of Retail Tenancy Units intervene, and I am satisfied that Mr Rolet’s claim was genuinely and not fraudulently made.

27 Yet another factor to take into account is the fact that the hearing was limited to the jurisdictional issue, and so the Respondent was saved the greater expense of a full hearing on all issues.