K M Sons Pty Ltd v Bonovas [2014] NSWCATCD 111 | Case summary

NCAT Consumer and Commercial|2014-06-20|Before: Mr P

Introduction 1An application was filed on 17 June 2014 on the Tribunal form concerning Retail Lease disputes. The application contained no information as to the orders being sought but in response to the form's requirement to state reasons for requesting orders the applicant had written: " Trying to get key from the owners who has been paid all the rent in arrears story attached in rent form". 2Where an applicant seeks an interim order, the Tribunal's practice is to require the applicant to file a separate form called a "Request for interim order". The applicant completed and lodged such a form on the same day as the above application (17 June 2014). In the request for an interim order form the applicant stated that the interim order requested was as follows: "requesting to get key for property". The address of the property at Blacktown was identified. In addition, in response to the question as to the reasons for requesting the interim order the applicant had written: "We are the tenants in [XXX]. Due to the business not going well we were behind in rent. On 11 June when I came to open office there was notice by the property agent not to enter the premises. I called them and find out the owner has locked the premises as we were behind in rent. This was done without any notice. Then the agent told us until and unless we pay the whole amount of $39,900 this is $24,662 in arrears plus rent month advance they are not allowing us to get in". 3The applicant provided some further information concerning the background to the dispute in attachments to the application form. 4On 18 June 2014 the applicant's application for an interim order was dismissed on the basis that there was no evidence of a retail lease and no evidence in relation to the nature of the business being conducted and whether or not it falls within the definition of a retail shop. 5On 19 June 2014 the Tribunal received a further application for interim orders to allow the applicant possession of the property the subject of the dispute. The Tribunal made orders requiring the applicant to file and serve points of claim and evidence. In addition the Tribunal listed the matter for hearing of the application for interim relief on Friday 20 June 2014. 6On 18 June 2014 the applicant lodged further documents with the Tribunal. These were:

The hearing on 20 June 2014 8The application came before the Tribunal on 20 June 2014 for the purposes of dealing with the application for interim relief and for the purposes of making directions for the preparation of the proceedings for a final hearing. The applicant appeared at the hearing in person and the respondents were represented by a solicitor. The parties had agreed between them that the applicant could have access to the premises over the weekend of 20, 21 and 22 June 2014. The applicant indicated that he did not need access again to the premises until 3 July 2014. The respondents submitted that the Tribunal had no jurisdiction to deal with the dispute between the parties because the lease concerned premises which were used for the conduct of functions and wedding receptions and that such a use was not governed by the provisions of the Act. The Tribunal reserved its decision as to whether it had jurisdiction in respect of the dispute and ordered that both parties may, if they wish, make any further submissions on the question of whether the Tribunal has jurisdiction by 5pm Monday 23 June 2014. Submissions have been received from the applicant. 9This is the decision concerning jurisdiction.

Legislative background 10The Act regulates the leasing of certain retail shops. Section 3 of the Act defines a retail shop as premises that: (a) are used, or proposed to be used, wholly or predominantly for the carrying on of one or more of the businesses prescribed for the purposes of this paragraph (whether or not in a retail shopping centre), or (b) are used, or proposed to be used, for the carrying on of any business (whether or not a business prescribed for the purposes of paragraph (a)) in a retail shopping centre. Note 1. Section 5 limits the retail shops to which this Act applies. Note 2. Clause 17 of Schedule 3 provides that the businesses specified in Schedule 1 are taken to be prescribed for the purposes of paragraph (a) of this definition until regulations prescribing businesses and repealing Schedule 1 are made. 11Clause 17 of Schedule 3 of the Act provides that businesses specified in Schedule 1 of the Act are taken to be prescribed for the purposes of paragraph (a) of the above definition until regulations prescribing businesses and repealing schedule 1 are made. Regulations have not been relevantly made and accordingly the businesses described in Schedule 1 determine whether the Act applies. 12The Act contains provisions which have the effect of excluding certain retail shops from the operation of the Act or excluding certain types of leases from the operation of the Act. In these proceedings only one objection to jurisdiction was raised by the respondents namely that none of the businesses described in Schedule 1 are applicable to the lease of these premises. The respondents said that these premises are used for the purposes of conducting functions, particularly wedding receptions. The applicant agreed. It was common ground that the premises include a kitchen and occupy an area of approximately 864 square metres. The respondents submitted that schedule 1 does not contain any description which would incorporate the conduct of functions or wedding receptions. The respondent noted that Schedule 1 included the following category: "Restaurants, cafeteria, coffee lounges, food courts and other eating places", and submitted that this description and in particular the reference to the other "eating places" does not incorporate a function centre or a centre for the purposes of conducting wedding receptions.

The lease 13Clause 6 of the lease provides that the lessee must use the property for the purposes stated in item 17 of the Schedule and not for any other purpose. Item 17 described the permitted use as "function and catering centre".

Applicant's submissions 14The applicant's submission contains the following statements:

"The leased premises known as [XXX] is set up as a restaurant with restaurant-type tables and chairs".
"Each table is set up and decorated like a restaurant table after each function has concluded".
"The premises comprise a very large kitchen which, inter alia, contains: (a)2 fixed cool rooms; (b)A fixed large walk-in freezer; (c)1 X 6-burners stove; (d)1 X 2-burners stove; (e)1 pizza oven; (f)2 X fryers; (g)1 earthen oven; and (h)2 X large preparation tables". "With such a large kitchen and facilities, it is evidence that a great deal of food will be prepared and served in the Premises. The emphasis is predominantly on food much more than anything else".
"The Premises were exclusively used for engagement celebrations, wedding celebrations, anniversary celebrations, in-house catering, birthday parties, and other milestone parties. In all of these celebrations, the main emphasis is on food. Without food and liquor being served, the Business will have absolutely no customers / patrons at all". Decision 15For the Act to govern the relationship between the parties it must be established that the premises are used wholly or predominately for the carrying on of one or more of the businesses described in Schedule 1 and that, in this case, the conduct of the function and catering centre is a use included within Schedule 1. 16In the opinion of the Tribunal the predominant activity of this function and catering centre is to provide food and drinks for consumption by those attending. The fact that those attending are doing so for the purposes of celebrating a particular event such as a wedding is not relevant. The purpose of a function may be to celebrate a wedding or some other celebration but the primary business activity being conducted is the provision of food and drinks for the consumption of those attending. In the opinion of the Tribunal the predominant business being conducted pursuant to the lease between the parties falls within Schedule 1 because the function and catering centre is an eating place. 17In Akora (Bondi Junction) Pty Ltd v Buttrose [2008] NSWADT 275 (13 October 2008) the Administrative Decisions Tribunal dealt with a similar objection to jurisdiction. The lease concerned a catering business. The Tribunal held that it had jurisdiction. The Member said that one needs to look at the actual use to which the premises were put. In that case although the lesee operated a catering business the premises were in fact being used as a bakery and as a take-away shop (both of which activities are included in schedule 1). Following the same approach I am of the view the premises in this case were in fact used as an eating place. 18The Tribunal will make a declaration that it has jurisdiction to determine the dispute the subject of these proceedings. Orders were made on 20 June 2014 to list the proceedings again for further directions. On that occasion the Tribunal may deal with any further application for interim relief and also make directions for the preparation of this case for a final hearing. S Westgarth Deputy President Civil and Administrative Tribunal of New South Wales 26 June 2014

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 04 September 2014

K M Sons Pty Ltd v Bonovas

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