Is the deed a " retail shop lease "?
66 This issue remains relevant due to the fact that the Roads Act does not affect those parts of the licensed areas located in Rialto Place. The critical question therefore is whether, assuming the deed applies severally to each of the two licensed areas in Rialto Place, those areas, either individually or combined, constitute "premises" within the meaning of the definition of "retail shop" s 3 of the RL Act.
67 Before dealing with this issue, I should say something about the Council's submission that even if the licensed areas are "premises", they are not used wholly or predominantly for the carrying on of one of the business specified in Schedule 1. It will be recollected that the submission was that the relevant business (restaurant) was carried on in the restaurant itself and that the licensed areas were merely ancillary to that business so that "the business" was not relevantly carried on upon those areas.
68 In my opinion this submission should be rejected for the following reasons. Firstly, there can be no doubt that the licensed areas are predominantly used for the purpose of the restaurant. Although the deed provides in clause 15(q) that chairs, tables and other equipment are not to be placed within the licensed areas after 12 midnight and before 7 am during which time those items are to be removed therefrom, it is clearly contemplated that the period between those hours would be when the restaurant business was not open to the public for service. Clearly, in terms of the predominant use of the licensed areas, it is for the purpose of Mr Malouf's business.
69 Secondly, I do not consider that the licensed areas are used merely for purposes ancillary to the restaurant. In its written submissions, the Council exemplified ancillary activities such as parking, the loading or unloading of delivery vehicles, storage of refuse bins and other forms of storage, as the type of the ancillary activities which were not intended by the legislature to be part of the premises, the subject of a retail shop. In my view, the uses of the licensed areas contemplated by the deed are of an entirely different nature to those so exemplified by the Council. The recital to the deed makes it clear that the licensed areas are to be used for the purpose of the establishment of outdoor eating areas for the restaurant and to which table service from the restaurant is to be extended. In these circumstances, the licensed areas are to be used for the purpose, and as an integral part, of the restaurant business. That business is, therefore, to be carried on, at least in part, upon the licensed areas and that, in my view, is sufficient satisfaction of sub-paragraph (a) of the definition of "retail shop".
70 That leaves the question of whether the licensed areas are "premises" within the meaning of the definition. The Council placed reliance upon the following passage of the judgment of Sir Owen Dixon in Turner where, at 75, his Honour said:
"The word 'premises' is no doubt a vague one but in legislation of this sort there are great advantages in a test of its application which is objective and consists in a readily ascertainable physical fact. Having regard to the history of the provision and the dictionary meaning of the word 'premises', I think that we should adhere to the rule laid down that bare land without buildings, if let for the purpose of occupation as bare land, does not constitute premises. If land is let upon terms that the tenant shall or may erect buildings which are not removable by him but will pass with the freehold, then I should say that the land and building when erected would form premises."
71 Mr Malouf relied upon the following passage from the judgment of Williams J in the same case where his Honour observed (at 83):
"… The word 'premises' is used in a popular sense and in this sense has a wide meaning. It is widen enough to include bare land. Its true meaning in any particular statute must be ascertained from the context in which it appears and from an examination of the scope and purpose of the statue as a whole. If the word 'premises' in the present definition is intended to include bare land that part of the definition which refers to any leased with any premises would be otiose."
72 Turner dealt with the definition of "prescribed premises" in s 8 of the Landlord & Tenant (Amendment) Act 1948. The following year the same provision was the subject of the unanimous decision of the High Court in Bonnington & Co Pty Limited v Lynch (1952) 86 CLR 259 where, in a joint judgment, Dixon CJ, McTiernan, Williams, Webb and Kitto JJ, said in respect of a lease of vacant land which the tenant intended to use as a junkyard (at [264]):
"The definition of 'prescribed premises' in s.8 of the Landlord & Tenant (Amendment) Act has been taken to show that on the land there must be some building or structure or perhaps artificial work, which colloquially might be described as 'premises', and that accordingly vacant or bare land cannot constitute 'prescribed premises'. Such a view was adopted in the Supreme Court of more than one State and to it this Court subscribed in York Motors Pty Limited v Turner. "
73 Mr Malouf's submission misunderstood, with respect, what Williams J was saying in Turner. His Honour was correct in opining that the word "premises" when used in its popular sense is wide enough to include bare land. Equally, he was correct in saying that its true meaning in any particular statute must be ascertained from the context in which it appears and from an examination of the scope and purpose of the statute as a whole. In the case with which his Honour was dealing, like Sir Owen Dixon, he held that the word "premises" in the definition in s 8 did not include bare land because of the exclusion from the definition of "prescribed premises" of land leased with any premises.
74 Of course, the objective of the Landlord & Tenant legislation was to protect tenants and it might well be said that the RL Act has a similar objective. As the primary judge observed, the RL Act was "beneficial legislation". Accordingly, it should not be construed narrowly.
75 One can accept for present purposes that most of the definitions in legal and general dictionaries equate the word "premises" with a building or some form of built structure. Equally, a "shop" is generally defined in a manner which connotes a built structure. Whether that is so in the present case depends upon a consideration of scope and purpose of the RL Act.
76 The only decision that relates directly to this aspect of the RL Act is that of Simos J in Conoid Pty Limited & Anor v International Theme Park Pty Limited [1999] NSWSC 1138; (1999) 9 BPR 97802. In that case, the plaintiffs entered into agreements with the defendant for the grant of concessions to enable the former to operate certain photographic activities. The premises housing the concessions consisted of wooden structures with the exception of one, which was a converted VW Kombi van, which rested on wheels with metal stands next to each wheel. One of the issues was whether concessions were retail shops within them meaning of the RL Act.
77 Simos J held (at [53]) that, with the possible exception of the VW Kombi van, the premises in which the plaintiffs carried on their businesses were "shops" within the ordinary, natural meaning of that word. That was because the word "shop" was generally defined as "a building where goods are sold retail" and his Honour was of the view that the structures within which the businesses were carried on were properly described as "buildings".
78 Simos J was also of the view that the VW Kombi van could also be described as a "building" for the purpose of the definition of "shop" contained in the Macquarie Dictionary, 3rd ed. He then said (at [59]):
"The van is plainly used as a permanent fixed structure or room with roof and walls providing protection from the elements in which photographs are sold by retail. In those circumstances, in my opinion, it is appropriate for present purposes , that is, for the purposes of the Act, to regard the van as a "shop". In my opinion the legislative purpose underlying the Act is, relevantly, in this context, that the Act should cover all enclosed places (cf. stalls) in which goods and/or services are sold by retail, and which are the subject of leases or licences, regardless of whether those places may be strictly called "buildings" or not. This underlying legislative purpose is, in my opinion, manifested, inter alia, in the definition of "retail shop" in section 3 of the Act which incorporates Schedule 1 to the Act from which definition and Schedule it is plain that the legislature's principal relevant focus of attention in this connection was the (retail) business being carried on, and not the particular nature of the premises in which it was being carried on. Accordingly, I find that the V.W. Kombi van used to operate the Beastie Ride Photo concession is a "shop" within them meaning of the definition of "retail shop" contained in section 3 of the Act." (original emphasis)
79 In Conoid his Honour was not of course concerned with a vacant area dissociated from any structure as in the present case. Accordingly, he did not have to directly address the issue with which I am concerned. His statement in [59] of his judgment that the legislative purpose underlying the RL Act was that it should cover all enclosed spaces in which goods and/or services were sold by retail was, in effect, prefaced by the expression "relevantly, in this context, ". There can be no doubt that the legislative purpose referred to by his Honour is correct; the question is whether it is confined to enclosed places.
80 Of more moment is his Honour's statement that the legislature's principal relevant focus of attention is the business being carried on rather than "the particular nature of the premises in which it was being carried on", which I take to be a reference to the physical state of the premises. The definition of "retail shop lease" is concerned with the occupation of premises for a particular purpose. The definition of "retail shop" is also principally concerned with the use of the premises for the carrying on of one or more of the businesses described in Schedule 1. On one view, provided that the premises are occupied for the purpose of the relevant use and that use is wholly or predominantly for the carrying on of a Schedule 1 business, it matters not whether it is carried on within a building or other structure or upon a vacant parcel of land. When one considers the provisions of the RL Act, they are generally concerned with the conditions of the agreement constituting the retail shop lease by either deeming provisions to be included in the lease or rendering conditions void which contravene the relevant provisions of the Act.
81 On the other hand, a number of provisions were referred to as suggesting that the RL Act was concerned only with shops in buildings. Section 22 of the RL Act deals with the obligation of the lessee under a retail shop lease to pay amounts to the lessor in respect of "outgoings". That word is defined in s 3 to mean the expenses directly attributable to the operation, maintenance or repair of
"the building in which the retail shop is located or (in the case of a retail shop in a retail shopping centre) of any building in the retail shopping centre or any area used in association with any such building."
82 A number of other provisions refer to "the building in which the retail shop is located": see, ss 23, 24B(2)(a), 25A(2), 25B(2), 26(2), 33 and 35(1). Sections 19(1)(d) and (3) and 31(1)(d) and (3) refer, in the context of reviews to current market rent, to the lessor suppling relevant information about leases for retail shops situated "in the same building", thus assuming that the shop in respect of which the rent is to be reviewed is situated in a "building": see also s 17(1)(b).
83 With the foregoing provisions, one can compare s 25(e) which deals with a sinking fund for major repairs and maintenance and refers to the repair and maintenance
"of a building, or plant and equipment of a building, in which the retail shop is situated." (emphasis supplied)
84 Sections 24B and 26(2) warrant particular mention. Section 24B(1) provides that a provision in a retail shop lease is void to the extent that it requires a lessee to pay an amount in respect of rent associated with "unrelated land". Section 24B(2) defines that expression to mean
"land other than:
(a) land on which the building … of which the retail shop forms part is situated; or
(b) land of the lessor used by or for the benefit of the lessees conducting business in that building …"
85 Section 26 limits recovery of land tax from a lessee. It provides that the lessee's liability is not to exceed the amount of land tax payable by the lessor on the basis that the "land concerned" is the only land owned by the lessor. Section 26(2) defines the expression "land concerned" as the
"land on which the building … of which the retail shop forms part is situated, together with all other land the lessor used or available for use by or for the benefit of the lessees conducting business in that building …"
86 It will thus be seen that there are a number of provisions of the RL Act which clearly contemplate that the "retail shop" is situated or located in a building. Mr Malouf submitted that that did not matter: it just meant that those provisions of the RL Act only applied to a retail shop lease of the whole or part of a building and did not apply to a retail shop lease of vacant land. However, I do not think that the provisions to which I have referred can be so easily dismissed.
87 It seems to me that where a retail shop lease extends to a shop which is located partly in a building but also includes land associated with the building (such as an outdoor eating area), then the "premises" which are used wholly or predominantly for the carrying on of the relevant business will be constituted by the space used for that purpose both within and without the building. In other words, the "premises" constituting the "retail shop" will include the whole of the area devoted to the retail business. This assumes that the lease extends to both areas. The problem in the present case is that the deed extends only to vacant land.
88 With some hesitation, I have come to the view that the licensed areas are not "premises" within the meaning of the definition of "retail shop" in s 3 of the RL Act. As I have said, the position would have been different had the deed extended to the restaurant as well as the licensed areas. It was uncontested that a "shop" in ordinary parlance is referrable to the sale of goods within the whole or part of a building. There are sufficient indications in the RL Act and, in particular, in the provisions which I have identified above and in the nature of the retail businesses listed in Schedule 1, which provide a context which requires that the "premises" referred to in the definition of "retain shop" and "retail shop lease" be construed as confined to a shop being located within a building or similar structure.
89 In my opinion it follows that the licensed areas do not constitute "premises" and, therefore, the deed is not a "retail shop lease" within the meaning of the RL Act. Accordingly, the Tribunal does not have jurisdiction to entertain a "retail tenancy claim" as defined in s 70 of that Act insofar as such a claim is based upon the deed.