State of Victoria v Tymbook Pty Ltd

[2005] VSC 267

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

PRACTICE COURT

No. 6854 of 2005

STATE OF VICTORIA	Plaintiff
v
TYMBOOK PTY LTD (ACN 006 387 659)	Defendant

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No. 6997 of 2005

STATE OF VICTORIA	Plaintiff
v
TYMBOOK PTY LTD (ACN 006 387 659)	Defendant

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JUDGE:	BYRNE J
WHERE HELD:	Melbourne
DATE OF HEARING:	21 July 2005
DATE OF JUDGMENT:	29 July 2005
CASE MAY BE CITED AS:	Victoria v Tymbook Pty Ltd
MEDIUM NEUTRAL CITATION:	[2005] VSC 267

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Landlord and Tenant – retail tenancy – lease of a theatre – landlord’s disputed claim to access – whether retail tenancy dispute - whether retail premises – whether dispute justiciable in the Court.

Retail Leases Act 2003, ss. 4(1), (11), 81(1), 89(4)

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr G H Garde QC with Mr Peter Fox	Victorian Government Solicitor
For the Defendant	Mr Jack D Hammond QC with Mr B Reilly	Cornwall Stodart

HIS HONOUR:

1. The Palais Theatre in St Kilda has for many years served as a cinema, theatre and live music venue.  In fact, the building dates from the 1920s and represents part only of an entertainment complex that includes Luna Park and, for many years, the Palais de Danse.  The land on which the Palais Theatre stands is Crown land owned by the plaintiff, the State of Victoria (“the Landlord”).

1. By lease dated 1 April 1956 the Landlord leased the land to Palais Pictures Pty Ltd for a term which expires on 31 March 2006.  The lessee in 1985 or thereabouts assigned the balance of the term to the defendant, Tymbook Pty Ltd (“the Tenant”).  Under cl.1(c), of the lease, the Tenant covenanted to use the premises “as a site for Amusement and Recreation and (unless with the prior consent of the Board [of Land and Works] for no other purpose whatsoever”. 

1. Now that the lease is about to expire the Landlord wishes to inspect the premises with a view to commencing building or other development works soon after March 2006.  Since the Tenant is not prepared to permit the Landlord the access which it seeks, the Landlord has commenced these proceedings seeking orders compelling the Tenant to give access.

1. As a preliminary point, the Tenant contends that the subject matter of these premises is not justiciable in this Court. It relies upon s. 89(4) of the Retail Leases Act 2003 ("the 2003 Act") which  is in these terms:

“(4)Subject to section 23(4)[1] (key-money and goodwill payments prohibited), a retail tenancy dispute other than -

(a)an application for relief against forfeiture;  or

(b)a claim under Part 9 (Unconscionable Conduct) –

is not justiciable before any other tribunal or a court or person acting judicially within the meaning of the Evidence Act 1958.”

[1]This section is not relevant for present purposes.

1. A retail tenancy dispute is defined in s. 81(1) of the 2003 Act.

“(1)In this Part, ‘retail tenancy dispute’ means a dispute between a landlord and tenant –

(a)arising under or in relation to a retail premises lease to which –

(i)this Act applies or applied because of Part 3;  or

(ii)the Retail Tenancies Reform Act1998 or the Retail Tenancies Act 1986 applies or applied;  or

(b)arising under a provision of the Retail Tenancies Reform Act 1998 or the Retail Tenancies Act 1986 in relation to a lease to which that Act applies or applied; or

(c)arising under a lease that provides for the occupation of retail premises in Victoria to which none of those Acts apply or applied –

despite anything to the contrary in this Act (apart from sub-section (2) and section 119(2)).”

1. Counsel for the Tenant contends that the question as to the Landlord’s disputed right of access is a dispute between a landlord and a tenant arising under a lease which provides for the occupation of retail premises to which none of the 2003 Act nor the Retail Tenancy Act 1986 nor the Retail Tenancies Reform Act 1998 applies or applied within the meaning of part (c) of s. 81(1). Accordingly, it is a retail tenancy dispute.

1. Neither the 1986 Act nor the 1998 Act were said by any party to apply to the premises the subject of this litigation.  This may be because the premises have a floor area that exceeds 1000 m² or for some other reason which is of no present concern.  It was said on behalf of the Tenant that the 2003 Act also did not apply to the premises because the lease was not entered into after 1 May 2003.[2] It follows from this, contended counsel for the Tenant, that the dispute the subject matter of the litigation in this Court is a retail tenancy dispute within the meaning of s. 81 so that s. 89(4) applied to remove it from the jurisdiction of this Court.

   [2]Section 11(1).

1. Counsel for the Landlord accepted that the 2003 Act did not apply to the demised premises or to this lease. They said, however, that it follows from this that Part 10, too, had no application to this lease or to this dispute. It is in Part 10, that part of the statute which is concerned with dispute resolution, that is found s. 89(4), so that this provision, too, has no application to the present litigation. Second they contended that the premises were not retail premises.

The application of Part 10

1. The basis for the first contention is s. 11 which provides as follows:

“11.     Application generally

(1)       This Act applies to a retail premises lease that is –

(a)entered into after the commencement of this section;  or

(b)renewed after the commencement of this section, whether the lease was entered into before or after that commencement.

(2)Except as provided by Part 10 (Dispute Resolution), this Act only applies to a lease of premises if the premises are retail premises (as defined in section 4) at the time of the lease is entered into or renewed.”

The lease in this case antedates 1 May 2003 when the section commenced.  So, it was said that the Act, including Part 10, does not apply to this lease.  Section 11(2) further restricts the application of the Act only to a lease of premises which were retail premises at the time that the lease was entered into or renewed.  And so, it was said, the Act[3], including Part 10, applied only where the lease was entered into[4] on a date after 1 May 2003 and where, on that date, the premises were retail premises.  The lease in question here was entered into in 1956.  Accordingly, Part 10 did not apply and jurisdiction remained with the Court. 

[3]Subject, of course, to s. 36 and s. 76(1) which are of no present relevance.

[4]See s. 7.

1. Counsel for the Landlord urged me to prefer this construction, relying upon well known authorities which direct the Court, where possible, to prefer a construction of a statute which does not take away common law rights[5] and which does not oust the jurisdiction of the Court.[6]  Furthermore, it was put, the acceptance of the Tenant’s submissions would effectively oust the long exercised summary jurisdiction of the Court under the Property Law Act 1958 s. 137 with respect to landlord and tenant disputes.

   [5]Sargood Bros v Commonwealth (1910) 11 CLR 258 at 279, per O’Connor J.

   [6]Magrath v Goldsborough Mort & Co Ltd (1932) 47 CLR 121 at 134, per Dixon J.

1. I am unable to accept these submissions.  The scheme of the 2003 Act appears to be that the dispute resolution procedures of Part 10 have a far wider application than the rest of the Act.  Accepting that s. 11 limits the application of the Act generally to certain leases entered into after 1 May 2003, the wide definition of “retail tenancy dispute” in s. 81 clearly extends to disputes arising under other leases and to retail premises other than the premises referred to in s. 11(2).[7] The jurisdiction of the Tribunal under s. 89(1), which depends upon an application seeking the resolution of a retail tenancy dispute, is similarly extensive. The consequence of this, having regard to s. 89(4) is that, subject to the stipulated exceptions, such a dispute is not justiciable in this Court.[8]

   [7]The concluding words of s. 82(1) serve to dispel any suggestion that s. 11 could be read to detract from this conclusion.  See also s. 119(1).

   [8]Or a tribunal other than VCAT or a person acting judicially within the meaning of the Evidence Act.

1. It is true that this creates a certain terminological awkwardness in the Act.  For example, the undefined expressions “retail premises lease” or “lease of retail premises” in Part 10 may have a meaning different from those words in the rest of the Act.[9]  Furthermore, the conclusion which I have preferred means that the whole of s. 11 should be qualified so as not to apply to Part 10.  It may be thought surprising, therefore, that the introductory qualification in s. 11(2) was not located before sub-s.(1) and ss.1 and 2 were prefaced by “except as provided by Part 10”.  But these difficulties cannot detract from the extensive terms of s. 81(1).

   [9]See also s. 82.

1. I mention, finally, the arguments which would prefer a construction of the Act so as to preserve or have a least impact upon the Court’s jurisdiction under the Property Law Act s. 137 or at common law. The difficulty with this submission and those of the Landlord generally, is that the words of the statute are overwhelmingly against it. I was not offered an alternative construction to that of the Tenant which would accommodate satisfactorily the words of the Act and which would provide a workable scheme for retail tenancy dispute resolution in terms of Part 10.

Retail Premises

1. The words "retail premises" are defined in s. 4(1) in these terms:

"(1)In this Act 'retail premises' means premises, or a part of premises, that under the terms of the lease relating to the premises or part are used, or are to be used, wholly or predominantly for –

(a)the sale or hire of goods by retail or the retail provision of services;  or

(b)the carrying on of a specified business or a specified kind of business that the Minister determines under section 5 is a business to which this paragraph applies."

The exclusionary provisions of sub-s. (2) are not here relevant.

1. The submission put on behalf of the Landlord was that the predominant use to which the premises are put or to be put under the terms of the lease are "amusement and recreation".  This does not necessarily mean the provision of services and, in fact, the Tenant in this case did not provide such services at all; its business was to manage the theatre and to arrange for others to provide amusement and recreational services in it.

1. The terminology of the introductory words of this definition are for present purposes identical with those of the 1986 Act and the 1998 Act.  In each case, the definition requires an examination of how the premises are in fact used and are to be used "under the terms of the lease".  In Wellington v Norwich Union Life Insurance Society Ltd[10], Nathan J said that the answer to the question whether premises were under the terms of the lease used or to be used for the purpose of carrying on a retail business, required the Court to characterise “the nature of the business carried on in the leased premises by taking into account the activities actually performed therein, together with those which are permitted under the terms of the lease. ”  This , however, was a case where the point at issue was whether a firm of patent attorneys which did not deal directly with the public were using the premises for the carrying on of a retail business.  His Honour concluded that the statutory definition might be satisfied if the evidence showed that the premises were in fact being used for the carrying of a retail business which was permitted by the lease or that it might be so used in the future.

   [10][1991] 1 VR 333 at 335.

1. In the present context there are two aspects of the statutory definition to be considered.  The first is the meaning of the expression, “under the lease”. It is sufficient to satisfy these words that the use in question is one which is permitted under the lease. 

1. The second aspect is a point raised by Dr Croft in his valuable work on this topic.[11]  Does the statutory definition require that the retail business be conducted on the premises by the lessee?  Is it sufficient that it be carried on by some other person under some arrangement with the lessee?  Dr Croft raises the question in the context of the lessee being a service company which provides the services, not to the public, but to the provider of retail services which in turn deals with the public.  In the present case the Tenant did not itself provide to the public amusement or entertainment services, but arranged with others to do so.  Its direct retail activities were restricted to selling tickets for this entertainment and selling refreshments and certain promotional articles to patrons. 

   [11]Retail Leases  4^th ed, 2004, Leo Cussen Institute at p. 71

1. The statutory definition is couched in terms, not of what the lessee does or may do under the lease, but of the use which, under the lease, is in fact made or which might be made of the demised premise.  The use in the present case is the provision of retail amusement services, namely, the presentation to the public for reward of films, theatre or music.  This is the retail provision of services.[12]  The provision of these services on the premises is permitted by the lease.  The demised premises therefore satisfy the statutory definition of retail premises.  There is no substance in this second submission.

   [12]See Swanston Street Pty Ltd v Harbut Pty Ltd (1983) V Conv R 54-324 (premises used as cabaret, restaurant and discotheque).

1. I conclude, therefore, that the subject of these proceedings is not justiciable in this Court.  The proceedings will therefore be dismissed.

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