Coolstore Corporation Pty Ltd v Haybor Investments Pty Ltd [2002] VCAT 446

Coolstore Corporation Pty Ltd v Haybor Investments Pty Ltd [2002] VCAT 446 - VCAT 2002 case summary — Zoe

[39]

15. It is noteworthy that this letter fails to identify the purchaser, hence, in a letter dated 11 October 2001 Messrs Wright Smith stating that they acted for RMCO said "Before we can consider the contents of your facts would you please identify and provide full particulars of the purchaser". By a letter dated the 12th of November 2001 Eales and MacKenzie furnished particulars of Coolstore's Hotels and enquired as to whether the standard Law Institute Transfer of Lease would be satisfactory. By facsimile dated the 28th of November 2001 Wright Smiths on behalf of the landlord agreed to the use of the Law Institute form of transfer but sought references for the assignee in accordance with Clause 4.3.2 of the lease. They sought "two financial references and two business references". The final sentence of the letter stated "the current tenant did not exercise their option to renew the lease and our client requires vacant possession upon the expiry of the lease on 14 February 2002". The facsimile of 6 December 2001 from Eales and Mackenzie referred to two "private" referees and two "business" referees giving their contact particulars. As to the last point of the letter, Mr Riccioni of Eales and Mackenzie asked Mr Nicholson to contact him and discuss the matter. By facsimile of 7 December 2001 Wright Smiths said that their client required written references rather than the names of the referees. By letter dated 23 January 2002 Eales and Mackenzie enclosed "three references as requested". By facsimile of 6 February 2002 Wright Smiths complained that only three references, two financial and one business had been furnished and there was one reference to come. They also raised queries as to one of the references that had been furnished. The letter concluded "we might add in the meantime that none of the references supplied by you to date show that the new tenant has either the financial backing or business experience to successfully run the hotel". Under cover of a further letter of 12 February 2002 Eales and Mackenzie furnished a fourth reference. By facsimile dated 14 February 2002 Wright Smiths denied that the Retail Tenancies Reform Act applied to the premises, asserted that the references were unsatisfactory and stated that "if your client does not properly vacate the premises in accordance with the covenants of the lease by midnight tonight then our client reserves its rights to re-enter the premises as previously advised". On the same date R.G. Hicks and Associates sent a facsimile to Wright Smiths stating that they acted for Mr Blair Freeman. It accused Mr Schaedler of RMCO of having impugned Mr Freeman's character by alleging that he was "not a fit and proper person with respect to the assignment of the lease". They demanded "a reasonable explanation as to the basis of such allegations forthwith" and reserved their client's rights as to defamation. In a facsimile of the following date Wright Smiths declined to enter into debate on the point. R.G. Hicks and Associates complained about threats of eviction and the landlord's failure to contact any of Mr Freeman's referees. The letter concluded "please note that unless your client forthwith desists from such action then our client will hold your client personally, together with RMCO Pty Ltd, Haybor Investments Pty Ltd and its directors jointly and severally responsible for the damage being incurred by our client's business." By facsimile of 25 February 2002 Wright Smiths reiterated that the lease had expired, stated that a writ for possession had been issued and suggested "that to save the parties from further cost and disappointment the tenant and your client vacate the property immediately." Meanwhile, on 23 February 2002 Eales and Mackenzie stated that a survey plan indicated that the leased premises were subject to the Retail Tenancies Reform Act and continued: "therefore your client has failed, pursuant to the Act, to prove written notice of our client's right to renew. Until your client provides the appropriate notice required pursuant to the Act the period for which our client is required to exercise its option has not commenced, and the lease continues."

[66]

28. In Lyle Cash I had considered that the consequences of a lease changing its status during its term from regulated to unregulated or vice versa were too chaotic to have been intended by Parliament. A landlord acting upon proper legal advice may enter into a lease in unregulated terms and conduct itself on the basis that it is not bound by the terms of the Retail Tenancies Reform Act. Nevertheless action taken by the tenant to change its corporate status by "privatisation" as in Hungry Jack's case and perhaps unknown to the landlord may subject the landlord to new statutory obligations of which it has no knowledge and perhaps no means of knowledge beyond a day-by-day monitoring of the returns kept by the Australian Securities and Investments Commission as corporate regulators. Clauses in the lease may be invalidated, unintended and uncontemplated extensions of lease by way of statutory options may arise under provisions such as Section 15, Section 18 of the Act and so forth. Conversely a tenant with relatively large premises close to the 1,000 sq m limit may enter into a lease enjoying the protection of the Retail Tenancies Reform Act and lose that protection during the terms of the lease by, for instance, adding a mezzanine floor creating a net increase in floor area which causes the total to exceed 1,000 sq m. Whilst there might be some room to argue that the remarks of O'Bryan J in Towercom with respect to paragraph (a) of the definition are obiter, they represent the considered view of the Supreme Court and whether ratio or dictum should be applied by the Tribunal unless overruled or disapproved by some further decision of the Court of Appeal or Supreme Court. Mr Strang submitted that I should regard His Honour's remarks with regard to paragraph (a) as mere dictum and apply the approach that I adopted in Lyle Cash. He said this because according to Mr Costello's affidavit a significant part of the demised premises were because of their state at the commencement of the lease "unavailable".

[87]

39. In popular Australian parlance the words "pub" and "hotel" are synonymous. The old licensing laws did not generally permit the conduct of public liquor bars except in association with the provision of accommodation. The Licensing Act 1958 provided that a victualler's licence should not be granted in the City of Melbourne unless the "house" contained "at least six bedrooms for public accommodation" or for establishments built after 1 March 1954 "such greater number of bedrooms as the licensing court thinks necessary ...". Establishments outside the City of Melbourne were required to have not less than three bedrooms or in the case of those built or re-built after 1 March 1954 "such greater number of bedrooms as the licensing court thinks necessary". The Liquor Control Act 1968 replaced the "Victualler's licence" with an "Hotelkeeper's Licence". The requirement to provide accommodation was retained but could be waived in the case of a "restricted licence". See Sections 48 and 48. Without tracing all the legislative changes that have taken place since those far off days, the Liquor Control Reform Act 1998 no longer provides for "hotel" licences or "victualler's licences" but rather (a) general licences and (b) on-premises licences. These licences do not require the provision of accommodation. It would also seem that the word "hotel" is not one which has a fixed legal meaning. I accept Dr Croft's submission that this establishment including as it does two bars for the consumption of liquor and as I was told from the bar table, a packaged liquor licence for the "Wooden Bar" could properly be regarded as either a tavern or an hotel. I am however unable to accept Dr Croft's submission that the reference in Chapter 1 of the 1998 guidelines to "shopping centres" should be restricted in the manner which he contends. First the expression "shopping centre" is not the defined term in the Retail Tenancies Reform Act, namely "retail shopping centre". The expression is therefore more likely used in its popular sense, though if it matters, I believe that the Coolstore complex as a whole, answers both the description of both "shopping centre" in the popular sense and "retail shopping centre" in the defined sense in the Retail Tenancies Reform Act. There is nothing in Chapter 1 of the guidelines or elsewhere which directly confines the reference to "shopping centres" to "shops" in shopping centres. As Dr Croft rightly observed shopping centres frequently do include premises which are retail premises within the meaning of the 1998 Act but are not "shops". For instance post office agencies, small law offices and accountancy practices with "store fronts" and so on. In Lyle Cash I concluded that a "free-standing" country hotel was not within the 1998 guidelines at all. In my view that conclusion by no means leads to the view that an "hotel" or "tavern" in a shopping centre ought not to be regarded as covered by Chapter 1 of the guidelines. The word "shop" is not a defined term in any of the statutes or guidelines to which I have been referred. It is certainly not a term defined in the guidelines themselves. I see nothing to imply the restriction in the meaning of "shopping centre" for which Dr Croft contends. Whilst it is conceivable, it is in my view hardly likely that there would be a "cluster" of warehouses or industrial buildings which would answer the definition of "retail shopping centre" in the Retail Tenancies Reform Act. Even if there were, that factor in itself would not necessarily mean that the "cluster" would be regarded as a "shopping centre" for the purposes of the guidelines. If however there were a shopping centre of warehouses or perhaps a more conventional shopping centre which included one or more warehouses, there would be a question as to which chapter of the 1998 guidelines would apply to a particular retail premises/warehouse. It may be that the twin maxims "generalia specialibus non derogant" and "generalibus specialia derogant" would refer one to the special provisions in Chapter 2 rather than the more general treatment of "shopping centre" in Chapter 1; or alternatively and perhaps more probably warehouse and industrial buildings in shopping centres would be dealt with in Chapter 1 and freestanding warehouse and industrial building in the later chapter; but that question does not arise today. In the present case there is nothing dealing specifically with hotels, taverns, or inns in the 1998 guidelines. In my view a hotel, tavern or inn that is located in a shopping centre is dealt with by Chapter 1.

[92]

43. In my view there is no serious question to be tried as to any entitlements which Coolstore's Hotels Pty Ltd claims to have as tenant under the letter from RMCO dated 17 August 2001. The inclusion of the note "the above is subject to our solicitors approval to the final terms and conditions" is in my view sufficient to indicate that the letter did not constitute an offer which Coolstore's Hotel could simply accept resulting in a binding contract and hence an agreement to lease. As Dr Croft has submitted, the inclusion of words such as "subject to contract" as to which the note in the present letter is cognate, has generally been regarded as sufficient to deprive any apparent agreement of contractual force or deprive any apparent offer of the character which would allow it simply to be accepted as leading to the formation of a contract. Dr Croft referred to the joint judgment in Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353, 360-2 and 363; Darebin Court Properties Pty Ltd v Fortress Pty Ltd and Anor [2001] VSC 256 at [8] and [15] - [24]; Seventh Shar Nominees Pty Ltd and Anor v Hortico Pty Ltd [2000] VSC 155 per Mandie J especially at paragraph [27] and [31]. Moreover the actions of Mr Freeman and his company since the making of the alleged agreement to lease by pursuing a purchase of the entire business from Coolstore's Corporation and seeking to take an assignment of the lease to the entire premises is inconsistent with their having been a binding agreement to lease part of the premises directly to Coolstore's Hotel Pty Ltd. It is however quite consistent with that matter's having been discussed and been the subject of inconclusive negotiations not leading to any binding agreement. The actions of the parties to a contract after the contract is made are generally not admissible as to the proper construction of the contract: see Ryan v Textile, Clothing and Footwear Union of Australia [1996] VicRp 67; [1996] 2 VR 235 and FAI Traders Insurance Co Limited v Savoy Plaza Pty Ltd [1993] VicRp 76; [1993] 2 VR 343. When the question is whether a contract has been made at all the actions of the party after the making of the alleged contract are admissible to assist in determining whether a contract has indeed been made. Brambles Holdings Limited v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153, 163-4 per Heydon JA and the cases there cited.

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Coolstore Corporation Pty Ltd v Haybor Investments Pty Ltd [2002] VCAT 446 (11 June 2002)

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Legislation Cited (7)

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