W.G.Z Pty Ltd atf the W.G.Z Family Trust v Arva Investments Pty Ltd
[2024] VCC 1777
•11 November 2024
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised (Not) Restricted Suitable for Publication |
Case No. CI-24-03778
| W.G.Z Pty Ltd (ABN 75168309699) as trustee of the W.G.Z Family Trust | Plaintiff |
| v | |
| Arva Investments Pty Ltd (ACN 130 939 847) | Defendant |
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JUDGE: | HER HONOUR JUDGE KIRTON | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 22 August 2024 | |
DATE OF RULING: | 11 November 2024 | |
CASE MAY BE CITED AS: | W.G.Z Pty Ltd atf the W.G.Z Family Trust v Arva Investments Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2024] VCC 1777 | |
RULING
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Subject:Retail Leases Act 2003 (Vic), nature of tenancy
Catchwords: Tenancy dispute – whether premises were ‘retail premises’ within the meaning of the Retail Leases Act 2003 (Vic) – claim for arrears of rent and outgoings allegedly due under a lease – premises used for tenant’s business of providing services of warehousing and transporting of customers’ goods –meaning of ‘wholly or predominantly’ used in s 4 Retail Leases Act 2003 (Vic) – whether plaintiff’s claim is a ‘retail tenancy dispute’ as defined by s 81 of the Act – whether claim not justiciable in this Court, pursuant to s 89(4) of the Act – whether summons should be adjourned.
Legislation Cited: Retail Leases Act 2003 (Vic); Civil Procedure Act 2010 (Vic)
Cases Cited:Wellington v Norwich Union Life Insurance Society Ltd [1991] 1 VR 333; IMCC Group (Australia) Pty Ltd v CB Cold Storage Pty Ltd [2017] VSCA 178; Global Tiger Logistic Pty Ltd Unreported, Victorian Civil and Administrative Tribunal (24 October 2012); Fitzroy Dental Pty Ltd v Metropole Management Pty Ltd [2013] VSC 344; Wellington v Norwich Union Life Insurance Society Ltd [1991] 1 VR 333; Richmond Football Club Ltd v Verraty Pty Ltd [2019] VSC 597; Cambridge Co-ordinates Pty Ltd v Vikings Press Pty Ltd [2000] VCAT 2646; Elmer v Minute Wit Enterprises Pty Ltd [2002] VCAT 1101; Eastcombe Pty Ltd v Fagersta Steels Pty Ltd [2022] VCAT 780;
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | J McKay | Northan Legal Pty Ltd |
| For the Defendant | L Virgona | Eastern Bridge |
HER HONOUR:
Background
1The plaintiff’s claim in this proceeding is for arrears of rent and outgoings allegedly due under a lease dated 15 February 2023 (Lease) in respect of the premises at Warehouses 3 and 4, 71-73 Pipe Road, Laverton North (the Premises). The defendant was the tenant and the plaintiff was the landlord under the Lease.
2Under the permitted use provision of the Lease, the defendant was entitled to use the Premises for the “warehousing and distribution of general freight”. There is no dispute that the actual activities conducted by the defendant fell within the permitted use provision.
3Shortly after the plaintiff issued this proceeding, the defendant filed a summons[1] to determine if the Premises were ‘retail premises’ within the meaning of the Retail Leases Act 2003 (Vic) (the Act).
[1]Dated 7 August 2024.
4If it is found that the Premises are retail premises, the plaintiff conceded that the plaintiff’s claim is a ‘retail tenancy dispute’ as defined by s 81 of the Act, and the claim is not justiciable in this Court, pursuant to s 89(4) of the Act.
5For the reasons set out below, I am satisfied that the services provided by the defendant at the Premises are wholly or predominantly retail within the meaning of s 4(1) of the Act. Accordingly, the plaintiff’s claim is a ‘retail tenancy dispute’, and the claim is not justiciable in this Court.
The evidence of the use of the Premises
6The defendant operates a transport and logistics business. Its sole director, Augustinus Arief deposed to the following matters,[2] which were not disputed.
[2]Affidavit of Agustinus Arief, dated 30 July 2024, 1-3, [5] - [6], [11] - [14] (‘Arief Affidavit’).
7The transport arm of the business involves the defendant using trucks to cart goods on behalf of customers, for a fee. The logistics arm involves the defendant providing warehousing storage to customers, also for a fee.
8The defendant operated its business from the Premises in Melbourne and also in Brisbane.
9The defendant commenced occupying the Premises approximately 4 months before the written Lease was executed on 15 February 2023.
10For much of the time the defendant was in occupation of the Premises, it occupied almost all of Warehouse 4 to store the goods of one customer. That customer paid a storage fee based on the number of pallets the goods occupied.
11The defendant occupied part of the space in Warehouse 3 in the same way, to store the goods of up to 7 or 8 customers at any one time. The defendant used another part of Warehouse 3 for parking of the defendant’s trucks and the storage of the defendant’s equipment.
12Mr Arief believed that customers were aware of the warehousing service offered via the defendant’s website and word-of-mouth. The defendant also displayed signage at the front of the Premises, displaying their name, phone number and website.
13There was a portable office at the Premises, occupied by staff of the defendant during business hours. This was accessible to members of the public. Customers could walk in to the office and book available storage space. Customers could also book warehousing space by telephoning, emailing, or via a link on the website defendant’s website.
14Once space was allocated, the customers could access the warehouses to drop off and collect their goods. About 70% of customers accessed the warehouse and dropped their goods off to be stored this way. About 30% of customers arranged for the defendant to collect their goods from elsewhere using the defendant’s trucks.
15Customers paid a fee for storing their goods in the warehouse, calculated based on the number of pallets occupied and on a per week basis.
16After the defendant had been in occupation of the Premises for several months, the parties executed a written Lease of Real Estate in a standard form prepared by the Law Institute of Victoria. It was apparently prepared by the plaintiff’s then solicitors. Additional Provision 1 of the Lease states that the parties “agree that this Lease is subject to the Retail Leases Act 2003 (Vic)." The defendant said that they did not ask for this clause and the plaintiff did not discuss it with them.
17The Lease was terminated by the plaintiff on or about 1 July 2024 and they commenced this proceeding claiming arrears of rent and outgoings.
The Law
18Section 4 of the Act provides a definition of ‘retail premises’. So far as relevant, s 4(1) provides:
Meaning of retail premises
(1)In this Act, retail premises means premises, not including any area intended for use as a residence, that under the terms of the lease relating to the premises 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; …
19In other words, a ‘retail premises’ is one that under the terms of the lease relating to the premises, are used, or are to be used, wholly or predominantly for the sale or hire of goods by retail or the retail provision of services.
20Under s 81, a ‘retail tenancy dispute’ means a dispute between a landlord and tenant arising under or in relation to a retail premises lease, while s 83 extends the definition of landlord to include a former landlord, and the definition of tenant to include a former tenant.
21The phrase ‘the retail provision of services’ is not defined in the Act. Its meaning has been considered in a number of cases. In deciding whether the sale of goods or the provision of services is ‘retail’ in nature, the Court has relied on the ‘ultimate consumer test’ derived from Nathan J’s findings in Wellington v Norwich Union Life Insurance Society Ltd,[3] where his Honour stated:
The essential feature of retailing, is to my mind, the provision of an item or service to the ultimate consumer for fee or reward. The end user may be a member of the public, but not necessarily so. In support of this conclusion, I call in aid not only commonsense but the Macquarie Australian Dictionary which defines retail as being a sale to an ultimate consumer, usually in small quantities. When the verb is used in the transitive form, it is to sell directly to the consumer.
[3][1991] 1 VR 333.
22How the ‘ultimate consumer test’ can be used to define what activities are ‘retail’ for the purposes of the Act was outlined by the Court of Appeal decision in IMCC Group (Australia) Pty Ltd v CB Cold Storage Pty Ltd[4] (CB Cold Storage). The Court of Appeal stated:
In summary, the services were used by the Tenant’s customers who paid a fee. Any person could purchase the services if the fee was paid. The Tenant’s business was open during normal business hours. The Tenant’s customers have not passed on the services to anyone else. They were the ultimate consumers of the Tenant’s services. In isolation, none of these features would suffice to constitute the premises as retail premises. Conversely, the absence of one or more of them, would not necessarily result in a finding that the premises were not retail premises. However, in the circumstances of this case, when all of those features are taken together, the conclusion must be that the premises are retail premises.
[4][2017] VSCA 178 (‘CB Cold Storage’)
23CB Cold Storage concerned warehousing services. The parties are not aware of any reported decisions involving the service of transporting goods for customers. The Court of Appeal in CB Cold Storage referred to the unreported decision of the Victorian Civil and Administrative Tribunal (VCAT) in Global Tiger Logistic Pty Ltd v Chapel Street Trust,[5] (Global Tiger) which they summarised as follows:[6]
Finally, in Global Tiger Logistic Pty Ltd v Chapel Street Trust, the Tribunal found that premises which were let as an office and warehouse from which a logistic services business was operated were retail premises. The logistic services business essentially consisted of shipping/transport and storage/warehousing. Having referred to Wellington, the Tribunal held that the provision of logistic services is a retail activity as it is a sale of services to an ultimate consumer.
[5]Unreported, Victorian Civil and Administrative Tribunal (24 October 2012) (Member L Rowland).
[6]CB Cold Storage (n 4) 7 [22].
The issues in dispute
24The question is whether the warehousing and transport services provided by the defendant at the Premises mean that the premises were used wholly or predominantly for the retail provision of services.
25The parties agreed that where the Premises were used for the operation of a warehouse business, this did amount to a retail use. The plaintiff conceded that that part of the defendant’s business is on all fours with the usage in CB Cold Storage.
26However the plaintiff contends that the defendant’s transport services either did not amount to a retail use; alternatively it may not have amounted to a retail use, and further evidence is required before that question can be determined. The questions for determination are therefore:
(a) Whether usage of the Premises should be assessed based on the defendant’s income or the floorspace used;
(b) Whether the defendant’s transportation business amounts to a retail activity; and
(c) Whether it is of significance that the parties agreed that the Act applied to the Lease.
The plaintiff’s submissions
27The plaintiff opposed the defendant’s application on a number of grounds, some of which were put in the alternative.
28They conceded that the warehousing and storage activities conducted for a fee on the Premises are retail, in accordance with the authorities including CB Cold Storage.[7] Accordingly, their arguments focused on the transport services provided by the defendant.
[7]CB Cold Storage (n 4).
29First, they contended that it has not been decided if transportation businesses are ‘retail’ within the meaning of s 4(1) of the Act. They referred to Global Tiger as cited by the Court of Appeal in CB Cold Storage,[8] and said it addressed the question of whether supply of services to a business can be ‘retail.’ They say it is not authority for a general presumption that transportation services are retail.
[8]Ibid, 7 [22].
30The plaintiff then argued that if it is accepted that the defendant’s transportation services are not retail in nature, then the evidence shows that the business conducted at the Premises is not wholly or predominantly retail. The evidence relied on by the plaintiff in making this submission was the defendant’s financial statements for 2021 and 2022. The statements show that in the 2022 financial year, the defendant’s income from the warehousing component of its business was only $250,749.35, whereas the income derived from transportation was $14,566,525.15. A similar split between transportation and warehousing revenue occurred in the 2021 year.
31On that basis, the plaintiff contended that the warehousing component of the business comprises only a minuscule portion of the defendant’s business conducted from the Premises. While the warehousing service is retail, because this service makes up only 1-2% of the defendant’s turnover, it cannot be said that the Premises were used wholly or predominantly for the retail provision of services.
32When confronted with the defendant’s evidence that almost all of Warehouse 4 and a part of Warehouse 3 had been used for storage, they contended that floorspace is not the measure of how the Premises are ‘wholly or predominantly’ used, within the meaning of s 4. Instead, the Court should assess the value of the transportation services to the defendant’s revenue.
33They submitted: [9]
… assuming the transportation services performed by the defendant outside of the Premises are non-retail, and assuming further that those services comprise virtually the whole of the defendant’s revenue, is the lease nonetheless regulated by the RLA merely because 50-60% of the floorspace is used for retail warehousing, when that warehousing comprises a very small component of the overall business? … [I]f the premises are used to operate a warehouse and transport business, and the non-retail transport component of the business is by far the predominant aspect of the business, the lease should be treated as non-retail.
[9]Plaintiff’s Outline of Submissions dated 22 August 2024, 3 [2(d)(i)].
34They then submitted there is not enough evidence before the Court to determine the usage of the Premises, and that it is not appropriate to make such a determination on an interlocutory summons. They contended that this is a matter that should be determined at final hearing, after they have had the opportunity to call for further discovery and to test the defendant’s evidence. They sought orders adjourning the summons, requiring pleadings and discovery and then fixing the proceeding as a whole for hearing with an estimate of two days’ duration.
35Further or alternatively, they contended that the Premises must be used wholly or predominantly for the provision of a retail service. In other words, the provision of the services must occur at the Premises. They said that if the provision of the transport services is a retail service, it is nevertheless not relevant to the question of the usage of the Premises, as the service was predominantly conducted out on the roads and not at the Premises.
36They referred to authorities including Fitzroy Dental Pty Ltd v Metropole Management Pty Ltd,[10] Wellington v Norwich Union Life Insurance Society Ltd,[11] and CB Cold Storage[12] as authority for the proposition that the entire service must be performed at the premises that it is provided from. They submitted that none of these decisions holds that a lease to a business that provides the services offsite is engaged in retailing within the meaning of s 4(1).
[10][2013] VSC 344.
[11][1991] 1 VR 333.
[12]CB Cold Storage (n 4).
37In the present matter, the plaintiff contended that because the majority of the transport business was conducted elsewhere (i.e. at the pick-up and drop-off destinations, and on the road between these locations and the Premises), this is not a service provided at the Premises.
38Next, in response to the defendant’s argument that the parties had agreed in the Lease that the Act applies, they submitted that parties cannot choose to buy into the Act. They submitted there is no case which has held that parties can choose to apply the Act to a particular lease where it does not apply. The application of the Act depends on s 4(1), not a private contract.
39Lastly, as a fallback position, the plaintiff suggested that if this Court does not have jurisdiction to hear the proceeding, I should nevertheless hear it in my capacity as a Vice President of the Tribunal. When I explained to the plaintiff that I could only hear a matter in that capacity if it had been issued in the Tribunal, and then only if the Tribunal has jurisdiction (a certificate from the Small Business Commissioner being a prerequisite to issuing in the Tribunal), the plaintiff withdrew this submission.
The defendant’s submissions
40The defendant acknowledged that the question whether usage should be determined based on floor space or financial turnover has not been definitively decided. However, they said that it need not be decided in the present matter, as this is not a relevant issue.
41The defendant’s primary submission relied on their evidence that both warehouses are approximately the same size, being approximately 3,249m2 each. All of Warehouse 4 and part of Warehouse 3 was used for storage. That means that more than 50% of the Premises were used for storage and this satisfies the test of ‘wholly or predominantly used’ in s 4.
42The defendant relied on the analysis in CB Cold Storage and said it is entirely apposite to the matters now before this Court.
43In the present matter, the evidence established that the customers of the defendant could access the Premises during normal business hours, and pay a fee to purchase the warehousing services provided by the defendant. The only available conclusion therefore is that the defendant was using the Premises wholly or predominantly for the retail provision of services, as in CB Cold Storage. As noted above, the plaintiff conceded this point, in relation to warehousing services.
44If the defendant is not successful on that point, and it is necessary to consider the defendant’s transport services, then the defendant argued that whichever way the plaintiff put its argument, it was illogical or misconceived.
45The defendant said that these services would also be defined as the ‘retail provision of services’, applying the relevant authorities discussed by the Court of Appeal in CB Cold Storage. As in Global Tiger, the defendant’s transport and logistics services were a retail activity, as it was a sale of services to an ultimate consumer. The services were provided to consumers from the Premises, in that trucks used in the transport business were stored and maintained at the Premises, bookings were taken and invoices and purchase orders were generated at the Premises, and fees were charged to the ultimate consumer from the Premises.
46Further or alternatively, if the contention is that the use of the Premises should be assessed on financial or income basis, rather than floor space, then this finding is not open based on the evidence. The financial statements for 2021 and 2022 refer to the defendant’s business as a whole across Australia. The income from the Premises alone cannot be identified from those documents. Further, the plaintiff’s request for the defendant to discover all financial documents from a national company is unnecessary, because those documents will not show the income generated on a day-to-day usage of the Premises, nor will it show information such as what customers’ goods were being stored, and how many of the defendant’s trucks were on-site at any given time.
47In any event, it is not clear why the plaintiff seeks production of documents relating to floor space usage when their primary submission is that floor space is not relevant to assessing use.
48The defendant further argued that the plaintiff’s focus on income is misconceived. If the plaintiff says that the transport services were not provided at the Premises, because the trucks and drivers were out on the roads when providing the transport, then no question arises. Section 4 requires an examination of the nature of the services provided under the terms of the Lease at or from the Premises. If the plaintiff is correct, then the transport services are not relevant as they are not a commercial enterprise being conducted from the Premises.
49Alternatively, if the argument is that a majority of the floor space of the warehouses was used to run its transportation business, or to store its own equipment, then such data (even if it were available, which it is not) is not relevant to the determination of the question. The authorities have established that usage is to be assessed when a lease started.[13] In the present matter that was February 2023. If the use later changed, or if the warehouses were empty after that date, that is irrelevant. Accordingly, requiring production of the defendant’s business records after February 2023 is of no utility.
[13]Richmond Football Club Ltd v Verraty Pty Ltd [2019] VSC 597 (affirmed on appeal); Retail Leases Act 2003 (Vic) s 11(2).
50Lastly, the defendant pointed out that the parties had agreed that the Lease was governed by the Act. The defendant acknowledged that it is not permitted to extend the operation of the Act simply by saying it applies. However, it is relevant that the plaintiff (who drew the Lease) understood and agreed that their rights and liabilities created by the Lease are governed by the Act.
Discussion and conclusion
51Applying the law to the facts in this matter, I am satisfied that the services provided by the defendant under the terms of the Lease are wholly or predominantly retail in nature, for the following reasons.
A. The predominant use is warehousing and storage
52I accept the defendant’s evidence that by floor space, the Premises were predominantly used for the provision of warehousing or storage services. All of Warehouse 4 and part of Warehouse 3 were occupied with stored goods for the defendant’s customers. This constitutes more than 50% of the Premises. The plaintiff conceded that the warehousing or storage services are retail and that where the Premises were used for that, it was a retail service. Accordingly, I am satisfied that the Premises were predominantly used for the provision of a retail service. It is not necessary to consider the nature of the transport services.
53I do not accept the plaintiff’s contention that the use must be assessed by income rather than floor space. There is no binding authority to that effect. The defendant referred me to the decision of Deputy President Macnamara (as his Honour then was) in Cambridge Co-ordinates Pty Ltd v Vikings Press Pty Ltd[14] (Cambridge Co-ordinates) and to other cases which took the contrary view.
[14](2001) V ConvR [58]–[553]; [2000] VCAT 2646, 12 [32].
54In Cambridge Co-ordinates, then Deputy President Macnamara rejected the argument that the concept of predominance must be judged spatially rather than by reference to the volume of sales. The permitted use under that lease was “storage, warehouse and ancillary wholesale clothing outlet with retail to public”. He said:[15]
I should also note a submission made by [the landlord] in reply to the effect that the concept of predominance if it must be judged according to actual user must be judged spatially rather than by reference to the volume of sales. In my view the predominant nature of business is to be determined by reference to the activities involved in the business and where a business entails as one invariably does the sale of goods or services that activity is best judged by reference to the volume of sales in dollar terms.
[15]Ibid.
55In that case his Honour was considering the definition of ‘wholly or predominantly’ in the context of the whether the activity carried on in the premises was 'business' rather than a retail sale. He concluded:[16]
I am inclined to think therefore that the effect of the definition is to require a predominance at least of sale of goods or services by retail not merely a predominant business use …
[16]Ibid, 11 [30].
56His comments about assessing use spatially or by volume of sales must therefore be considered in that context. It is not authority for a broader proposition that the income from a service, rather than the floor space occupied for delivering that service, is the appropriate measure for assessing the use of a premises.
57In the later decision of Elmer v Minute Wit Enterprises Pty Ltd,[17] Senior Member R Davis was considering premises used as "retail shop/showroom, storage and residence". The argument was how to measure the retail usage as opposed to the residential usage. The area of the premises occupied and used by the applicant for retail was less than that part used as a dwelling, and the rent payable under the residential tenancy agreement was more than half of the total rent payable for the whole of the premises.
[17][2002] VCAT 1101.
58Senior Member R Davis considered Cambridge Co-ordinates and other cases, and stated:[18]
In my view, it is wrong to apply only a strictly mathematical test when determining the predominant use of premises. However, it is appropriate to take into account the amount of the premises that are used for retail purposes along with any other factors that may be relevant.
…
In my view, no single factor by itself is determinative, that is, one cannot just look at a spatial feature used for retail purposes, the trading hours, the proportion of rent paid, or precisely what is written in the lease. One must take all those matters as a whole and come to a factual conclusion of whether the premises described in the lease "are used, or are to be used, wholly or predominantly for the carrying on of a business involving the sale or hire of goods by retail or the provision of retail services".
[18]Ibid, 9, 11 [24], [29].
59In my view, the above authorities lead to the conclusion that the appropriate way to measure usage of a premises will depend on the circumstances of each case. In some cases it may be spatially (by floor space), in others it may be by volume of sales or income, in some it may be a combination of measures, and in others there may be some other measure not yet considered.
60Accordingly, in the present matter, I am satisfied that the predominant use of the Premises measured spatially is the provision of warehousing and storage services. It is therefore not necessary to consider the nature of the transport services.
B. Transportation services are retail
61If I am wrong in my conclusion that the warehousing and storage services provided at the Premises are the predominant use, I nevertheless find that the transport services provided under the Lease at and from the Premises are retail in nature.
62While Global Tiger is authority for the proposition that premises used as the base for transport services may be retail premises, it is well established that each case must be determined based on its own facts.
63Based on the authorities summarised by Senior Member Forde in Eastcombe Pty Ltd v Fagersta Steels Pty Ltd,[19] matters I should take into account when considering whether the Premises are a retail premises include;
(a) the nature of the goods or service offered;
(b) whether a fee is paid;
(c) whether the goods or service is generally available to anyone willing to pay the fee;
(d) whether the ultimate consumer test is satisfied;
(e) whether the premises are open to the public in the required sense; and
(f) whether the test is satisfied at the time the lease was entered into.
[19][2022] VCAT 780, 7 [24].
64Adopting those tests, I am satisfied that all those matters are answered in favour of the answer that the transport services provided at or from the Premises makes them a retail premises.
What was the nature of the service offered?
65As deposed to by Mr Arief, and not disputed, the transport arm of the business involved the defendant using trucks to cart goods on behalf of customers, for a fee, including to and from the warehouses at the Premises. The defendant’s trucks and equipment were kept in Warehouse 3 and the booking and invoicing were carried out from the Premises.
66I do not agree with the plaintiff’s view as to what the provision of services ‘at the premises’ amounts to. The plaintiff seems to be of the opinion that authorities such as Fitzroy Dental Pty Ltd v Metropole Management Pty Ltd[20] and CB Cold Storage are authority for the proposition that the entire service must be performed at the premises that it is provided from.
[20][2013] VSC 344.
67The plaintiff dismissed the storage of vehicles on the premises as being too remote from the end service (the transportation of goods), and therefore contended that the service was not provided on the premises.
68In my opinion the storage of vehicles, along with the potential for the warehouse’s use as a logistical base of the transport operations, is sufficiently essential to the ultimate ‘service’ such that it forms part of the chain of tasks which in sum make up the service. If we look at the fee that the ‘end consumer’ pays, the fee takes into account that the vehicles need to be parked somewhere, the cost of the warehouse that is used to store the vehicles, and importantly the cost of driving from and then returning to the warehouse. The travelling from the warehouse to the pick-up location, and then returning to the warehouse is part of the journey that is quoted to the end consumer, and therefore is part of the ‘service’ that is offered to them. It is not dissimilar to a ‘callout’ fee that other trades quote. Under this construction of the ‘service’, it is clear that the use of the warehouses played a central role, and in my view this supports the Premises as being considered ‘retail’.
69Further or alternatively, if the plaintiff’s contention is that the transport services were provided on the road and not at the Premises, and so are not relevant when assessing the use of the Premises, I do not agree. If I go to a bus station ticket office to purchase a ticket, there is no argument that that is a retail transaction and the office is a retail premises, even though I then board the bus and drive away from the ticket office. In the same way, the premises where I book and pay for a truck to transport my goods may be a retail premises, even though the truck then drives away. It is artificial to attempt to hive off one part of the defendant’s business from another.
Was a fee paid?
70It is not in dispute that customers paid a fee to the defendant for its transport services.
Was the service generally available to anyone willing to pay the fee?
71It is not in dispute that the services were generally available to anyone willing to pay the fee.
Were the premises open to the public?
72It is not in dispute that the Premises were open to the public.
Was the ultimate consumer test satisfied?
73Similarly, it is not in dispute that the transport services were provided for the ultimate consumer. As noted in CB Cold Storage, “to talk of an ultimate consumer of services may appear strained. Most services that are purchased are not susceptible to being passed on to a third person.”[21] That is the case here, and is on all fours with the findings in CB Cold Storage that, “[t]he tenant’s customers have not passed on the services to anyone else. They were the ultimate consumers of the tenant services.”[22]
[21]CB Cold Storage (n 4), 8 [23].
[22]Ibid, 18 [50].
Was the test satisfied at the time the lease was entered into?
74Further, the definition in s 4 refers to the usage of the premises under the terms of the Lease. The relevant point in time is the date the Lease was entered into, not on any date after that time. The defendant had already been in possession of the Premises for approximately 4 months before the Lease was prepared. The plaintiff knew the business being conducted from the Premises. The plaintiff described this in the Lease as the “warehousing and distribution of general freight”. The plaintiff does not dispute that as at February 2023 (the date of the Lease), these were the services being provided by the defendant.
C. Should the summons be adjourned?
75The plaintiff’s fall back argument was that it is not appropriate to make this determination on an interlocutory summons. They contended that this is a matter that should be determined at final hearing, after they have had the opportunity to call for further discovery and to test the defendant’s evidence. They sought orders adjourning the summons, requiring pleadings and discovery and then fixing the proceeding as a whole for hearing with an estimate of two days’ duration
76I do not accept the plaintiff’s suggestion that this matter should go to trial so they can test the defendant’s evidence. To have the parties incur the costs of completing pleadings, discovery, evidence and then attending a two day trial (the plaintiff’s estimate) in circumstances where the Court does not have jurisdiction is contrary to the Court’s and parties’ obligations under the Civil Procedure Act 2010.
77There is no prejudice to the plaintiff in this exercise of my discretion to refuse an adjournment. They can commence proceedings in VCAT, after they obtain a certificate from the Small Business Commission (SBC). The only costs incurred to date in this Court (other than this summons) have been the issuing of the proceeding and the preparing of a Statement of Claim. That document can be used in any VCAT proceeding.
78It is possible that the parties may resolve their dispute with the SBC. If not, the nature of this claim is of the kind dealt with every day in VCAT, by specialists in retail and commercial leases in the Building & Property List, ably headed by Deputy Head of List Senior Member Forde. The procedures in VCAT are usually cheaper and quicker than in the Court.
79Further, I note the plaintiff’s express agreement recorded in the Lease that the Act applies. While this agreement does not make the Act apply, it is relevant to the exercise of my discretion.
Conclusion
80For the reasons set out above, I am satisfied that the services provided by the defendant at the Premises are wholly or predominantly retail within the meaning of s 4(1) of the Act, the plaintiff’s claim is a ‘retail tenancy dispute’ as defined by s 81 of the Act, and the claim is not justiciable in this Court, pursuant to s 89(4) of the Act.
Costs
81The defendant also sought orders for costs against the plaintiff for the proceeding and the summons, as well as any other costs that the Court deems fit. Absent any objection from the plaintiff (to be submitted by email to [email protected] by 15 November 2024 at 4.00pm), it appears to me that the appropriate order is that the plaintiff pay the defendant’s costs of the proceeding, including the summons.
Orders
82Unless there is any objection in respect of costs, I will make orders dismissing the proceeding and that the plaintiff pay the defendant’s costs of the proceeding, including the summons.
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Certificate
I certify that these 18 pages are a true copy of the ruling of her Honour Judge Kirton delivered on 11 November 2024.
Dated: 11 November 2024
Jessica Meaney
Associate to Her Honour Judge Kirton
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