South Veterinary Group Pty Ltd and Sharpe and Anor
[2006] WASAT 222
•28 July 2006
SOUTH VETERINARY GROUP PTY LTD and SHARPE & ANOR [2006] WASAT 222
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2006] WASAT 222 | |
| COMMERCIAL TENANCY (RETAIL SHOPS) AGREEMENTS ACT 1985 (WA) | |||
| Case No: | CC:1102/2006 | 27 JULY 2006 | |
| Coram: | DR B DE VILLIERS (MEMBER) | 28/07/06 | |
| 11 | Judgment Part: | 1 of 1 | |
| Result: | The interim application is granted | ||
| B | |||
| PDF Version |
| Parties: | SOUTH VETERINARY GROUP PTY LTD ROBERT SHARPE JILLIAN SHARPE |
Catchwords: | Commercial tenancies – Interim order – Criteria for grant of interim order – Question arising from a lease – Predominant use of a business involved in the sale of goods |
Legislation: | Animal Welfare Act 2002 (WA) Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA), s 3, s 16, s 16(1), s 26(1), s 26(1)(b) Property Law Act 1969 (WA) |
Case References: | Sharp and Anor v O'Driscoll and Anor (Unreported, Supreme Court of Western Australia; Library No 97011A-C; 1997) Nil |
Orders | 1. The application for interim relief succeeds.,2. Until further orders, the respondents is restrained pursuant to s 26(1)(b) of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) from entering the premises, or determining the lease, or changing the locks.,3. There be liberty to apply for costs.,4. In regard to the questions, dated 19 July 2006 arising from the lease, the applicant must, by 11 August 2006, file with the Tribunal and give to the respondents the following documents:,(a) a Statement of Issues, Facts and Contentions it says arise in the proceedings; and,(b) an indexed and paginated bundle in chronological or other logical order of the documents on which it proposes to rely in the proceedings.,5. Within 21 days of receiving the applicant's Statement of Issues, Facts and Contentions, the respondents must file with the Tribunal and give to the applicant their own Statement of Issues, Facts and Contentions setting out:,(a) by reference to each paragraph number in the applicant's statement whether the respondents accept or reject the issues, facts or contentions identified by the applicant; and,(b) any other issues, facts and contentions it says arise in the proceedings.,6. The respondents must, at the time they files and gives their Statement of Issues, Facts and Contentions file with the Tribunal and give to the applicant an indexed and paginated bundle in chronological or other logical order of any documents on which it proposes to rely in the proceedings not in the applicant's bundle.,7. The matter is listed for mediation to commence at 10 am on 13 September 2006 for a duration of one day.,8. If any party proposes to give evidence or call any witness to give evidence at the hearing it must, no less than seven days before the mediation, file with the Tribunal a signed statement of the witness' evidence and give a copy of the statement to the other party. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : COMMERCIAL & CIVIL ACT : COMMERCIAL TENANCY (RETAIL SHOPS) AGREEMENTS ACT 1985 (WA) CITATION : SOUTH VETERINARY GROUP PTY LTD and SHARPE & ANOR [2006] WASAT 222 MEMBER : DR B DE VILLIERS (MEMBER) HEARD : 27 JULY 2006 DELIVERED : Delivered extemporaneously on
28 JULY 2006 FILE NO/S : CC 1102 of 2006 BETWEEN : SOUTH VETERINARY GROUP PTY LTD
- Applicant
AND
ROBERT SHARPE
JILLIAN SHARPE
Respondents
Catchwords:
Commercial tenancies – Interim order – Criteria for grant of interim order – Question arising from a lease – Predominant use of a business involved in the sale of goods
Legislation:
Animal Welfare Act 2002 (WA)
(Page 2)
Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA), s 3, s 16, s 16(1), s 26(1), s 26(1)(b)
Property Law Act 1969 (WA)
Result:
The interim application is granted
Category: B
Representation:
Counsel:
Applicant : Mr R Griffiths
Respondents : Mr D South
Solicitors:
Applicant : Griffiths & Godecke
Respondents : South Legal
Case(s) referred to in decision(s):
Sharp and Anor v O'Driscoll and Anor (Unreported, Supreme Court of Western Australia; Library No 97011A-C; 1997)
Case(s) also cited:
Nil
(Page 3)
Summary of Tribunal's decision
1 The applicant sought an interim order to prevent the respondents from entering the premises and changing the locks. The applicant contended that it is not in breach of the lease and that unless the interim order is granted, the welfare of the animals would suffer. The applicant referred to the criteria that should be taken into account when an interim application is sought and concluded that the facts support the grant of the interim relief.
2 The respondents opposed the interim application. The respondents contended that the lease does not fall within the jurisdiction of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) and that the State Administrative Tribunal therefore did not have jurisdiction over the matter. In addition the respondents contended that the applicant was in breach of the lease, that it had been slow to bring the application and that it was not coming to the proceedings with clean hands.
3 The State Administrative Tribunal found that the applicant has established a prima facie case that the questions arising from the lease fall within the ambit of the Commercial Tenancy (Retail Shops) Agreements Act 1985 and that State Administrative Tribunal therefore does have jurisdiction to hear the matter. The State Administrative Tribunal utilised the criteria for grant of interim relief and concluded that when all the facts are considered there is justification for the interim relief to be granted until such time as the main questions arising from the lease are determined.
Application
4 The applicant applied for an interim order on 20 July 2006 pursuant to s 26(1) of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) (CTRSA Act).
5 The main application was filed on 19 July 2006 and contains a list of nine questions that according to the applicant arise from the lease pursuant to s 16(1) of the CTRSA Act.
Issues
6 At the hearing held on 24 July 2006, the interim application was considered. Programming orders will be made in due course, if necessary, for the main application to be heard.
(Page 4)
7 Four issues are at stake in determining the interim application, namely:
1. Does the State Administrative Tribunal (SAT) have jurisdiction to consider the application?
2. Is there a prima facie case that the lease falls within the ambit of the CTRSA Act?
3. If "yes" on 1 and 2 above, does the applicant's alleged breaches of the lease deprive him of the injunctive relief?
4. If "no" to 3 above, are the requirements for injunctive relief fulfilled?
8 The Tribunal requested the respondents at commencement of the hearing, if they were willing, to give an undertaking that the premises would not be re-entered until such time as the main questions are determined. The respondents indicated that they would not be willing to grant such an undertaking but did nevertheless give an undertaking that they would not re-enter the premises until such time as the interim application is dealt with.
Facts
9 The facts are set out in detail in the respective submissions and I have taken it all into account in making the decision. For purposes of the reasons for decision, the main facts of relevance to the interim application are briefly as follows.
10 The applicant runs a veterinary practice from the premises. Mr South also runs a legal practice from the premises. Mr South is a shareholder and a director of the applicant. According to the evidence of Mr South, the practice is currently housing approximately 60 animals and is fully occupied. Any effort to relocate the animals would, according to him, be very costly, time consuming, stressful to owners and animals, and might lead to some of the animals dying due to the state of their condition. He further contends that the respondents, and not the applicant, are in breach of the lease.
11 The respondents gave notice to the applicant on 6 July 2006 that the applicant was in breach of the lease, that it had failed to remedy the breaches and that the respondents intended to re-enter the premises on 20 July 2006 unless the breaches were remedied. The respondents made submissions and referred to several attachments enclosed to the affidavit
(Page 5)
- of the applicant to support its contention that the applicant was in breach of the lease.
12 The alleged breaches highlighted by the respondents relate to the non-payment of operating expenses, late payment of rent, occupation by a legal practice of part of the premises without agreement from the respondents and assignment of the lease to South Veterinary Hospitals Pty Ltd without the necessary approval of the respondents.
13 The applicant sought an interim order to prevent the respondents from re-entry of the premises until such time as the questions arising from the lease are determined by the Tribunal.
Contentions regarding the main issues
1. Does the SAT have jurisdiction to consider the application for interim relief?
14 The applicant contended that SAT has jurisdiction to deal with the interim relief pursuant to four grounds, namely the CTRSA Act, its inherent jurisdiction, the Animal Welfare Act 2002 (WA) and the Property Law Act 1969 (WA).
15 In support of the contention that the jurisdiction of SAT is vested under the CTRSA Act, the applicant relied on s 16(1) of the CTRSA Act that provides for a party to a retail shop lease to refer a question "between the parties which he [applicant] believes to be a question under the lease" to the Tribunal for determination. He further contends that the lease the subject of the application falls within the ambit of the CTRSA Act since the business operates as a retail shop pursuant to s 3 of the CTRSA Act. According to the applicant, the premises is "predominantly used for carrying on a business involving the sale of goods by retail". He provided a table of income for the financial years 2003, 2004 and 2005, in which approximately 75% of income is derived from what the respondents call selling of goods such as dog food, over the counter medications and medications associated with treatment of pets during and after surgery.
16 The applicant concluded that all he needs to show for purposes of the interim application is that there is a prima facie case that the lease falls within the ambit of the CTRSA Act in order to establish the jurisdiction of SAT. Serious questions to be tried can be dealt with at the main hearing.
17 The respondents contended that the lease does not fall within the ambit of the CTRSA Act since the business cannot be classified as a retail
(Page 6)
- business under s 3 of the Act. The respondents provided the Tribunal with a photograph to illustrate what it believes is an indication that the predominant business of the applicant is the provision of services and not goods for retail. The respondents further referred to the absence of any provision in the lease to the CTRSA Act – for example, no tenant guide is included in the lease. The respondents also referred to the outlay of the premises to support its contention that by far the majority of floor space is used for services related to the treatment of animals and not the sale of goods for retail. Part of the premises is also used as a legal practice which again offers services and not goods.
18 The respondents concluded that the applicant failed to meet a basic threshold question namely to demonstrate that the lease falls under the CTRSA Act and that SAT therefore does not have jurisdiction to deal with the interim application under the CTRSA Act.
19 Both parties referred the Tribunal to the decision of the full court of Western Australia in Sharp and Anor v O'Driscoll and Anor (Unreported, Supreme Court of Western Australia; Library No 97011A-C; 1997). In this matter, the Court considered the question of what is meant by "retail shop" and premises "used wholly or predominantly for the carrying out of a business involving the sale of goods by retail". The Court took into account submissions regarding the income derived from other activities than retail and the volume of retail sales, the nature of the business, and the floor space used for the generation of income in order to determine what is meant by the word "predominantly". The Court concluded "somewhat reluctantly" that a hotel, tavern or restaurant with a floor space of less than 1000 square meters does constitute a retail shop to which the CTRSA Act applies (page 24). This case illustrates how complex it can be to determine whether a specific activity falls within the ambit of the Act. Where on face value a hotel or restaurant would not be regarded as a retail shop, the Court nevertheless found that it can constitute a retail shop.
20 Although the Tribunal is not required to make a final determination as to whether the lease does indeed provide for a retail shop or whether the activities the applicant are engaged in can be classified as a "retail shop", I am satisfied that an arguable case has been made for purposes of the interim application that the lease should be treated as a retail shopping lease under the CTRSA Act. The preliminary figures provided by the applicant show that, according to his calculations, at least 70% of income is derived from the selling of goods rather than the selling of services. Although the respondents questioned the reliability of the figures and the
(Page 7)
- accuracy in the way in which the percentages have been allocated between goods and services, I am satisfied that the applicant has done what he needs to do in light of the urgent circumstances that gave rise to the application. This provides to the Tribunal an arguable case to attract the jurisdiction of the CTRSA Act and hence the Tribunal's. It is clearly not a matter where the applicant is grasping at a straw to support his contention.
21 The applicant demonstrated prima facie that s 3 of the CTRSA Act may apply to the lease for purposes of the interim application. Whether the lease is ultimately held to fall within the context of s 3 of the CTRSA Act remains to be determined.
22 The Tribunal is therefore satisfied that (a) there is a prima facie case for the lease be treated under the CTRSA Act and (b) that the SAT has jurisdiction pursuant to s 26(1)(b) of the CTRSA Act to hear the interim application.
23 There is no need for the Tribunal to make a finding in regard to the other three options listed by the applicant to justify the jurisdiction of SAT.
2. Does the applicant's alleged breaches of the lease deprive it of the injunctive relief?
24 The respondents contended that even if the lease falls within the CTRSA Act, the applicant does not deserve interim relief on the grounds that it had breached the lease, it has had ample time and opportunity to rectify the breaches, that it had been slow in bringing the application and that it does not bring the proceedings with clean hands.
25 The respondents referred the Tribunal to the several letters between the applicant and respondents to illustrate the alleged breaches of the lease, the delay in bringing the application and the adequate notice that was given to the applicant to rectify the alleged breaches. Examples of alleged breaches referred to by the respondents are the occupation of part of the premises for purpose of a legal practice, the late payment of rent, the non-payment of certain outgoings, and the assignment of the lease.
26 The applicant contended that it is in fact the respondents who are in breach of the lease and not the applicant – hence the decision of the applicant to bring the application. The applicant attempted in his final submissions to rebut each of the alleged breaches highlighted by the respondents. The alleged breaches of the lease as set out by the respondents cannot, according to the applicant, be dealt with in detail at
(Page 8)
- the interim hearing since further evidence and submissions are required, and the purpose of the interim proceedings is not to make a final determination of questions arising from the lease. The applicant stressed that its attempt to rebut the allegations by the respondents is indicative of the questions to be determined by the Tribunal. It is therefore not a clear cut case for either party to conclude with confidence that its view will prevail.
27 The applicant concluded that several questions, as listed in his application dated 19 July 2006, arise from the lease and that the existence of such questions does not justify a refusal to grant interim relief. The very purpose of s 16 of the CTRSA Act is for parties to bring questions arising from a lease to the Tribunal for a determination.
28 The Tribunal finds in favour of the applicant. The mere fact that questions have arisen from the lease or that there is the potential of a breach of the lease, does not automatically disqualify the applicant from obtaining interim relief. It would be improper, unless the facts are glaringly clear, for the Tribunal to find at the interim stage that a party had breached the lease and is therefore automatically not entitled to interim relief.
3. Are the requirements for injunctive relief fulfilled?
29 Mr South provided a useful summary of the principles to consider prior to the granting of interim relief.
30 In essence the Tribunal must be satisfied that –
a) There is a serious question to be tried: There is agreement between the parties that there are serious questions to be determined. Both parties allege the other is in breach of the lease. The parties have different views as to whether the business conducted by the applicant falls within s 3 of the CTRSA Act and whether breaches of the lease had occurred. The Tribunal is satisfied that the issues of dispute are not trivial but are serious, bona fide and clearly fall within the context of s 16 of the Act.
b) The interim proceeding is not aimed at determining the matter in substance: As concluded above, the Tribunal cannot deal with the questions of alleged breaches of the lease at the interim stage. The main question the Tribunal has to deal with is whether the CTRSA Act applies and whether the SAT
- has jurisdiction to hear the matter. The Tribunal held in the affirmative on both these questions. While I note the differences of opinion between the parties regarding the matters of substance, I am not required to make any determination at this stage on the merit of the respective positions. The questions raised by the applicant can only be dealt with at a hearing after further evidence is heard and submissions are made.
- c) Damages may not be a sufficient remedy to the applicant if the decision is ultimately in its favour: The premises that may be re-entered, if the interim application fails, houses approximately 60 animals that are subject to different forms of treatment. This was not disputed by the respondents. Many innocent members of the public may be affected if the animals are removed and the implications to the welfare of some of the animals may be severe. The practicality and cost to find alternative accommodation for all the animals must also be considered. The ability of the Tribunal to award damages at a later stage of the proceedings should the interim relief be refused, may not be a sufficient remedy to make good all damage that may be suffered by the applicant, the animals and the owners of such animals.
d) The balance of convenience of both parties: The Tribunal must take into account the convenience of both parties prior to granting interim relief. The respondents contend that they have acted reasonably by giving the applicant repeated notices of the alleged breaches of the lease and that no, or insufficient, action has been taken to rectify the breaches. The respondents are therefore entitled to re-enter the premises and to make it available for commercial use. The applicant contends that the inconvenience it may suffer would be substantial since animals would have to be removed, the business would basically come to a standstill and the trauma would be severe. The applicant further contends that although there are some disputes regarding payment of outgoings, he is up to date with his rent and no serious risk is being suffered by the respondents. The Tribunal finds that the applicant has made a convincing case why the balance of convenience should be in its favour. The practical, financial and emotional implications if re-entry occurs would indeed far outweigh the inconvenience that
- may be suffered by the respondents to wait until the questions arising from the lease are determined.
- e) Preserve the status quo: Even if all things were equal, the appropriate course of action would be for the status quo to be maintained until such time when the questions are determined. In this matter things are not equal. As discussed above the circumstances clearly favour the granting of interim relief.
f) An undertaking as to damages provided by the applicant: The applicant provided a written undertaking as to damages that may arise if the interim application is granted. The Tribunal is satisfied that it may address any concerns the respondents might have (although it did not raise any concerns) in regard to possible damages it may suffer.
Finding
31 The Tribunal therefore finds that interim relief should be granted to the applicant to restrain the respondents from re-entering the premises at 20 - 22 Dugdale Street, Warwick, or to change the locks until further orders.
Orders
1. The application for interim relief succeeds.
2. Until further orders, the respondents is restrained pursuant to s 26(1)(b) of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) from entering the premises, or determining the lease, or changing the locks.
3. There be liberty to apply for costs.
4. In regard to the questions, dated 19 July 2006 arising from the lease, the applicant must, by 11 August 2006, file with the Tribunal and give to the respondents the following documents:
(a) a Statement of Issues, Facts and Contentions it says arise in the proceedings; and
(b) an indexed and paginated bundle in chronological or other logical order of the documents on which it proposes to rely in the proceedings.
5. Within 21 days of receiving the applicant's Statement of Issues, Facts and Contentions, the respondents must file with
- the Tribunal and give to the applicant their own Statement of Issues, Facts and Contentions setting out:
(a) by reference to each paragraph number in the applicant's statement whether the respondents accept or reject the issues, facts or contentions identified by the applicant; and
(b) any other issues, facts and contentions it says arise in the proceedings.
- 6. The respondents must, at the time they files and gives their Statement of Issues, Facts and Contentions file with the Tribunal and give to the applicant an indexed and paginated bundle in chronological or other logical order of any documents on which it proposes to rely in the proceedings not in the applicant's bundle.
7. The matter is listed for mediation to commence at 10 am on 13 September 2006 for a duration of one day.
8. If any party proposes to give evidence or call any witness to give evidence at the hearing it must, no less than seven days before the mediation, file with the Tribunal a signed statement of the witness' evidence and give a copy of the statement to the other party.
- I certify that this and the preceding [31] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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DR B DE VILLIERS, MEMBER
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