Norma Farah t/as Luscious Food Catering v Nelmeer Ashfield Pty Ltd

NCAT Consumer and Commercial|2014-08-01|Before: Windeyer J

Application 1 The applicant asserts that an agreement first entered into between the parties on 14 October 2011 is a retail lease pursuant to the Retail Leases Act 1994 ("the Act"). The respondent denies this. The matter has been listed for a hearing on the papers to determine this preliminary issue. Both parties have provided written submissions in relation to this preliminary issue. 2 The question to be resolved is thus whether the agreement in question is a "retail shop lease". Section 3 of the Act defines such as a lease as follows: retail shop lease or lease means any agreement under which a person grants or agrees to grant to another person for value a right of occupation of premises for the purpose of the use of the premises as a retail shop: (a) whether or not the right is a right of exclusive occupation, and (b) whether the agreement is express or implied, and (c) whether the agreement is oral or in writing, or partly oral and partly in writing. "Retail shop" is defined as: retail shop means 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. Certain shops are excluded by s 5 of the Act: 5 Certain retail shops excluded from the operation of this Act This Act does not apply to any of the following retail shops: (a) shops that have a lettable area of 1,000 square metres or more, (b) shops that are used wholly or predominantly for the carrying on of a business by the lessee on behalf of the lessor, (c) … Those sections are particularly referred to by the respondent in its submissions, as discussed below. It is also appropriate to extract part of s 16: Section 16 - Minimum 5 year term (1) The term for which a retail shop lease is entered into, together with any further term or terms provided for by any agreement or option for the acquisition by the lessee of a further term as an extension or renewal of the lease, must not be less than 5 years. An agreement or option is not taken into account if it was entered into or conferred after the lease was entered into. (2) If a lease is entered into in contravention of this section, the validity of the lease is not thereby affected but the term of the lease is extended by such period as may be necessary to prevent the lease contravening this section. Note. For example, if a lease is entered into for a term of 3 years, its term is extended by 2 years to 5 years. if a lease is entered into for a term of 2 years with an option for a further 1 year after that initial 2 years, the term of the lease is extended to 4 years (with the option for a further 1 year after that initial ,4 years). (2) This section does not apply to a lease if a lawyer, or a licensed conveyancer, not acting for the lessor certifies (before, or within 6 months after, the lease was entered into) in writing that (a) (a) the lessee or prospective lessee requested the lawyer or conveyancer to give the certificate, and (b) (b) the lawyer or conveyancer has explained to the lessee or prospective lessee the effect of subsections (1) and (2) and that the giving of the certificate will result in this section not applying to the lease. If the certificate is given within 6 months after the lease was entered into, then, without affecting the validity of the lease, subsection (2) ceases to apply to the lease and the extension of the term of the lease effected by that subsection accordingly ceases to be operative. (3A) … 3 There were in fact two agreements entered into by the parties: the first is dated 14 October 2011 ("the first agreement") and states that the period of engagement shall commence on 18 October 2011 and run for a consecutive period of twelve months. The parties entered into a second agreement in similar, almost identical terms, dated 19 October 2012 and expressed to commence on the same date ("the second agreement"). (These agreements have certain hand-written amendments not included in both agreements, but neither party takes any issue in that regard.) 4 It is agreed that the provisions of the Retail Leases Act 1994 prevail over the terms of any lease agreement and that contracting out of the legislative provisions is prohibited, any term purporting to, or having the effect of, doing so, being void. 5 The agreements referred to above are headed: "Bistro Contracting Agreement/Statement". Clause (1) is as follows: (1) GRANT OF LICENSE AND ENGAGEMENT (a) "The Company" [here, the respondent] hereby grants a license to, and engages "The Bistro Contractor" [here, the applicant] to provide food and kitchen services and provide wait staff to service the hotel dining and/or eating areas during the Term. These tasks are to be performed to the complete satisfaction of the "The Company". (b) The parties expressly agree that no relationship of landlord or tenant is intended to be created by this agreement or the matters contemplated by this agreement, and further that the licence granted to "The Bistro Contractor" is not a licence to occupy any part of the premises owned by "The Company". 6 The belief or intention of the parties as to whether or not the provisions of the licence agreement might constitute a retail lease is irrelevant to the determination of such issue: Sean Lytton v North Bondi RSL Club Limited [2011] NSWADT 86 per Rickards JM at [9]. 7 Clause 2 of the agreement includes inter alia: (2) TERM (a) The period of engagement shall commence on …………and shall run for a consecutive period of twelve (12) months subject to clause seven (7) of this agreement. (b) It is an essential term and a condition of this agreement that "The Bistro Contractor" provides "The Company" with a certificate signed by a suitably qualified legal practitioner pursuant to section 16 of the Retail Leases Act 1994 (c) In the event that "The Bistro Contractor" continues to provide food and kitchen services and provide wait staff to service the hotel dining and/or eating areas after the expiration of the term and with the consent of "The Company" it shall do so as if the other provisions of this agreement were to apply, and either party may terminated this agreement for any reason after providing 14 days written notice. 8 In accordance with Clause (2)(b), a certificate headed "Retail Lease Agreement" in the appropriate form compliant with s16 of the Act, dated 15 October 2011 and signed by Mr Garry Neville Penhall was provided with the 2011 agreement. No such certificate was provided in relation to the 2012 agreement. 9 The conditions of operation of the bistro are set out in Clause 5), headed "Bistro Contractor's Covenants", as follows: (5) BISTRO CONTRACTOR'S COVENANTS (c) "The Bistro Contractor" will provide to The Company" certificates of currency for all the insurance policies noting the interest of the company including but not limited to, workers compensation and public liability prior to commencement. "The Bistro Contractor" is to keep all policies up to date and provide up to date certificate of currency as requested by "The Company". (d) "The Bistro Contractor" is responsible for all payments associated with the operation of the kitchen and dining area under this agreement including but not limited to all food costs, staff wages, taxes, workers compensation, superannuation, sick and accident and/or life insurance. (e) "The Bistro Operators" [sic] is to operate the kitchen and dining and/or eating areas on the following minimum agreed days and hours. MONDAY - SUNDAY Lunch & Dinner (d) "The Bistro Contractor" must provide meals and services to meet a standard of quality that is acceptable to "The Company". The determination of what is an acceptable standard of quality to "The Company" is at the absolute discretion of "The Company". (e) "The Bistro Contractor" is able to use all existing equipment as per the agreed signed inventory (attached to this contract). (f) "The Bistro Contractor" is not to sell any drinks. (g) "The Bistro Contractor" is responsible for the supply of the following items including but not limited to:-

Respondent's Submissions 10 The respondent has summarised the history of the parties' relationship in uncontroversial terms and goes on to summarise the source or sources of the Tribunal's jurisdiction. The respondent summarises the essence of the statutory provisions as being that there must be a defined "premises" which is used to carry on a prescribed business and there must be an agreement granting occupation of the premises [for value] for the purpose of carrying on the prescribed business. 11 The respondent contends that the agreement between the parties in this case is not a retail shop lease for the purposes of the Act. First, the respondent points out the necessity of there being "a defined 'premises' " to carry out a business being a prescribed business and there being an agreement granting occupation of such premises to carry out the defined business. 12 The respondent then submits that in the event the agreement is determined to be a retail shop lease, then the Act does not apply to this retail shop lease because of the operation of s5(b) of the Act. 13 The respondent submits that the applicant deposes to conducting a "catering business" which is not a prescribed business, and that the Agreement is merely a services agreement. The respondent states that: "it does not follow that the provision of catering services to certain areas of … an hotel as in the current case, equate to the carrying on of business of a restaurant, cafeteria, coffee lounge, food court or other eating place." 14 The respondent asserts that the applicant cannot demonstrate any specific "premises" used wholly or predominantly for the carrying out of any business. The crucial submission in this regard is that there is no evidence that the dining areas of the hotel are wholly or predominantly used for the conduct of the applicant's business. In fact, says the respondent, the applicant's affidavit clearly suggests otherwise: "It is described as an open plan area containing tables and chairs with toilets on one side and a bar area accessible from the other side. There is no evidence that the applicant exercises any control over this area or that patrons of the Ashfield Hotel who do not order food from the kitchen servery are not permitted to use the dining area for the consumption of beverages obtained from the bar accessible on the other side of the dining area. It therefore cannot be said that the dining area is used wholly or predominantly for the carrying on of the applicant's business." 15 The respondent summarises the well-known features of the definition of "retail shop lease" examined by Barrett SCJ in Moweno v Stratis [2002] NSWSC 1151. This discussion is non-controversial and there is no need to repeat it here. 16 The largest proportion of the respondent's submissions relate to the issue of the right to occupy granted by the second agreement. Relying on Clause (1)(b) of the agreement, the respondent submits that the second agreement confers no right to occupy "any part" of the premises. 17 The respondent relies heavily on an analysis of two decisions: Constantinos Trembelas v Cyprus Community of NSW (unreported), Supreme Court of NSW, 02 June 1998, Windeyer J, and Sean Lytton v North Bondi RSL Club Limited [2011] NSWADT 86 (per Rickards, JM), upheld on appeal in Lytton v North Bondi RSL Club [2012] NSWADTAP 8. 18 The respondent submits that the facts in Trembelas are "not dissimilar factual circumstances to the present case". It is stated by the respondent that: "In Trembelas, it was determined that there was a written agreement for a 12 month term (which had expired) granting the plaintiff a licence to provide exclusive food catering rights for the bistro, and non-exclusive rights to cater in the auditorium of the defendant club's premises." The respondent states that Windeyer J found in respect of the agreement in Trembelas that the agreement was not a right to occupy but a right to conduct an operation on certain premises upon certain terms and conditions, and that it is a licence to operate only part of the business. 19 The respondent submits that: "A licence granting rights to provide catering services to certain areas of a club premises (as in Trembelas) or an hotel as in the current case does not constitute the granting of a right to occupy any part of the premises in question. 20 In relation to Lytton, the respondent submits that Trembelas was distinguished by the Tribunal at first instance (and upheld on appeal) by a finding that whereas in Trembelas His Honour found that the business operated by the applicant in that case was jointly operated by the parties, in Mr Lytton's case there was nothing in the agreement or the evidence to indicate the business was jointly operated. Also, in Lytton, the agreement expressly granted the applicant a right of occupation. 21 The respondent submits that there were in fact three bases on which the application was dismissed in Trembelas: (i) the agreement was no more than a catering concession which did not grant a right of occupation; (ii) (the plaintiff was not granted a licence to operate a business, but only part of a business; and (iii) if the areas in question were to be considered as part of the lettable area of the premises, the premises would be excluded by operation of s5(a) of the Act. However, submits the respondent, the decision in Trembelas does not mean that a finding of joint conduct of the business is necessary to demonstrate that no right of occupation is granted by the agreement. In fact in this case, the second agreement expressly provides to the contrary. Also, "[a]ccess to areas of the Ashfield Hotel and use of certain facilities to enable the delivery of a catering service does not equate to a right to occupy". 22 In this case, the respondent submits, the "business" in this application is that of a licensed hotel: "… including the multitude of aspects of that type of business that exist including the sale, supply and consumption of alcoholic and non-alcoholic beverages (including packaged beverages intended to be consumed away from the premises), the sale, supply and consumption of meals [NO], the operation of gaming machines, totalisator agency facilities, entertainment and functions. The provision of services by the applicant under the Second Agreement amount to the operation of part of the business of the Ashfield Hotel." 23 Finally, the respondent submits that to the extent that the applicant may contend her business is conducted throughout the entire premises of the hotel, then any right of occupation would be over an area which exceeds the threshold in s5(a) of the Act.

Applicant's Submissions 24 The application that the Tribunal has no jurisdiction to determine this claim, the applicant's submissions are responsive to the previously provided by the respondent and just summarised above. 25 The applicant first submits in relation to the determination of "purpose" and asserts that the purpose is that the applicant is operating a restaurant (or bistro) and is not "merely" a caterer. 26 The applicant next considers the effect of the s16 certificate and asserts that the requirement for such a certificate "is an unequivocal acknowledgement of a retail lease". The certificate was not provided in relation to the second agreement and there being no termination for breach of this "essential term" the respondent "may be assumed", says the applicant, "waived the non-compliance". 27 The applicant also submits that extrinsic evidence may be relied upon as the agreement does not contain an "entire agreement" clause and in that regard relies on the monthly tax invoices (a small sample being provided) which refer to "Monthly rental of bistro". The applicant submits that "[s]ince 'rent' is definitive of a lease and occupation, if follows that the intention, on the whole of the written evidence, was to create a lease, being a retail lease, because a restaurant of bistro is within the Schedule 1 definitions". 28 The applicant next refers to the various terms in the agreement intended to expressly deny "occupation" or the existence of a lease and submits those clauses must be declared void and severed. 29 There is then a lengthy submission in relation to distinguishing between "occupation" and "use". With great respect to the applicant, much of this passage is of little assistance in this particular matter. However, the applicant, relying on dictionary definitions of "occupy", submits that: "[t]he applicant was given the right to take up or fill a space comprising the kitchen and restaurant areas and to operate a bistro business for reward from those premises to the exclusion of all comers". 30 The submissions in relation to "use", although interesting, are, again with great respect to the applicant, generally of little assistance. However, the applicant does assert that the necessary power to "use" the kitchen and restaurant (pursuant to Clause 4 of the agreement), is "equivalent to the applicant operating same".

Discussion and Conclusion 31 In order to set out my findings, it will be helpful to consider first the meaning of "occupy". The Shorter Oxford English Dictionary [OUP 1973] defines this word as follows: Occupy …

trans. To take possession of, seize. Obs. in gen. sense. -1014. b. spec. To take possession of (a place) by settling in it, or by conquest, etc. ME.
To hold possession of; to hold (a position or office). late ME. b. To reside in, tenant. late ME. 4-c. intr. or absol. To hold possession or office; to dwell, reside; to stay, abide -1535.
trans. To take up, use up, fill (space or time); also in weakened sense, To be in or at (a place or position) ME.
To employ, busy, engage (a person, or the mind, attention, etc.). Often in pass.; also refl. ME.
To make use of, use (a thing) -1774.
trans. To employ oneself in, carry on; to follow or ply as one's business or occupation -1660. Also intr.. -1653.
trans. To employ (money or capital) in trading; to lay out, invest, trade with; to deal in. [L. occupare pecuniam.] -1773. b. intr. To trade, deal -1650.
trans. and intr. To deal with sexually; to cohabit -1600. [Reformatted for clarity.] The word "occupation" relevant to the definition of retail shop lease in s3 of the Act is to be given its ordinary meaning derived from the appropriate definition of "occupy". Of the eight meanings listed above, I consider 1, 4, 7 and 8 are not relevant. Of the remaining meanings, I consider 2 above to be limited to the situation of having a legal right to reside in a property. There is no suggestion of "residence" in a retail shop lease, in my view. Meaning 6 is limited to the use of "occupation" as a trade or business or profession. To so define "occupation" in this case is to settle the issue without consideration of the factual circumstances. That is what has to be decided by applying the facts to the law, not by defining the question without regard to the facts. Meaning 5 above results in a circular argument. If "occupy" means use and "occupation" has the derivative meaning, the definition in s3 would read: "a right of use of premises for the purpose of the use of the premises as a retail shop". The appropriate meaning is the simplest of those above: to take up space, or fill, or simply "to be in". In that case, the s3 definition would be "a right to be in premises for the purpose of the use of the premises as a retail shop". 32 This excursion into the dictionary is necessary because the terms of the agreement appear to assert that no "legal right" of occupation is given by the agreement: see Clause (1)(b) above. By the reasoning in the last paragraph, that clause is meaningless. It is plainly necessary to give effect to the agreement to allow the applicant into the premises (the kitchen and dining area) in order to provide the services covered by the agreement. As the applicant points out in her submissions, the applicant could not use the premises at all if there is no right to "occupy" the premises and that this is clear by consideration of Clause (4)(c) [see below] which specifically does provide for the applicant to have "the use of the kitchen and dining areas under this agreement". That is, so long as the applicant complies with the terms of the agreement and pays the rent, or the monthly licence fee, on time, she does have a legal right to be in the premises for the purpose of operating her business (whatever that turns out to be). 33 In my opinion, the terms of the agreement, particularly Clause 5, show that the applicant was given, and was intended by the parties to be given, a right of occupation of the kitchen. The right of occupation is not expressed to be "exclusive" (nor is it required to be for the agreement to be found to be a lease pursuant to the Act) but that is in fact the effect of the Clause. The applicant is not only permitted to use the kitchen equipment but the agreement provides for a security deposit covering, inter alia, replacement or repair costs of that equipment and specifies that the applicant is responsible for the repair or replacement of non-wear and tear damage to the equipment (but that provision is not applicable until twelve months after the commencement of the agreement). Clause (5)(c) of the agreement has the effect also that the applicant is the exclusive operator of the kitchen and dining and/or eating areas ("the premises") during the agreed minimum days and hours for the preparation and serving of food. It should be noted that the Clause requires the applicant to provide the meals 7 days per week. There is no room or provision for any other person or "operator" to use the premises during those periods. The right of occupation and use must therefore be exclusive, even if not expressly stated to be so. 34 The second section of Clause (1)(b), 'and further that the licence granted to "The Bistro Contractor" is not a licence to occupy any part of the premises owned by "The Company" ', is not effective to displace the finding that the agreement in fact gives a right of occupation of the premises to the applicant. It is clearly the draftsperson's attempt to remove the agreement from the scope of the Act and is therefore void. 35 This right of occupation of the premises is for value per Clause (4)(c) of the agreement: (4) FACILITIES FEES / OUTGOINGS (a) DEPOSIT At the commencement of this agreement, "The Bistro Contractor" must pay to "The Company" as security for payment of the Licence Fee and for any loss or damage to inventory items or other equipment owned by "The Company" a refundable deposit of $5000.00. At the conclusion of this contract the deposit will be refunded, less the replacement cost price of inventory items missing from the initial signed inventory list (attached to this contract) and less the cost of any damage to the inventory items or other equipment owned by "The Company" and less the amount of any unpaid Licence Fee. (b) CONTRIBUTION TO OUTGOING "The Bistro Operators" contribution to the following outgoings will be nil.

Supply of gas to the kitchen
Supply of water to the kitchen
Removal of trade waste from the grease trap
Removal of own rubbish and/or waste
Supply of electricity
Contribution towards to Council rates
Exhaust filters (hand-written addition) (c) LICENCE FEE In consideration for "The Company" granting "The Bistro Contractor" a licence to provide food and kitchen services and provide wait staff to service the hotel dining and/or eating areas and the use of the kitchen and dining areas under this agreement, "The Bistro Operators" will pay "The Company" a Licence Fee of $I,200.00 (one thousand two hundred dollars) plus GST per calendar month. The Licence Fee shall be payable monthly in advance. "The Company" agrees that the Licence Fee shall be waived for the first month of the term. 36 Further, I find that the business operated by the applicant pursuant to the agreement falls within the description of "Restaurants, cafeterias, coffee lounges, food courts and other eating places" contained in Schedule 1 "Retail Shop Businesses" to the Act: see Lytton v North Bondi RSL Club [2012] NSWADTAP 8 at [15]. 37 On that basis, the agreement constitutes a retail shop lease. 38 However, the respondent raises additional issues which must also be considered before coming to a final decision on that issue. 39 As noted above, the respondent submits that the terms of this agreement closely resemble the situation in Trembelas, while there are features which distinguish this case from Lytton. I am unable to accept that submission. 40 His Honour Justice Windeyer found there were two questions to be answered: (i) whether the lease was a retail shop lease; and (ii) (whether "the premises" relates to both bistro and auditorium. His Honour answered the second question very succinctly: [10] The second question is whether the premises relates to both bistro and auditorium. To answer the second question first, the document refers to a licence arrangement for the bistro and auditorium catering. Either it is a retail lease of those premises or it is not. I do not consider the operation can be severed. 41 The answer to the first question was also succinct: [11] To come to the first question, ... The agreement in question here is, I consider, no more than a catering concession arrangement which gives exclusive food catering rights for the bistro and non-exclusive rights to cater in the auditorium. [12] It is not a right of occupation but a right to conduct an operation on certain premises upon certain terms and conditions. Clause 3.2 of the licence agreement supports that view. [13] It is also a licence which is not to operate a business but to operate part of a business. In other words, we are talking about a business. The business must be the auditorium and bistro business, but part of that business, namely, the provision of drinks, waiters for drinks and cleaning is conducted by the defendant club. The findings in [12] and [13] were the basis on which the Appeal Panel in Lytton distinguished Trembelas: 1 We should add that in our respectful opinion the Tribunal correctly distinguished the decision of Windeyer J in Trembelas (which of course on a matter of law would bind us) in light of his Honour's finding of fact that the business conducted in the bistro was conducted jointly by the plaintiff and the club and that the relevant licence (contrary to the express terms of the licence in the present case) did not give the plaintiff occupation of the bistro. I respectfully point out that Justice Windeyer did not use the words "conducted jointly": His Honour said that the licence was not a licence to operate a business "but to operate part of a business", and the defendant club also operated part of that business. 42 His Honour did not analyse the meaning to be given to "right of occupation". It is not clear if His Honour considered that phrase to be a term of art, or, if it was not a term of art, what is the precise meaning of "right to occupy" in the Act, or indeed if there is any significant difference between the phrases "right of occupation" and "right to occupy". In the absence of such analysis I apply the reasoning in paragraphs 24 to 27 above. 43 Similarly, in relation to His Honour's finding that the plaintiff and defendant both operated "part of the business", there is no clear description of the exact nature of the applicant's business. Obviously, His Honour found that it included serving drinks and cleaning areas of the club. With great respect to His Honour, that is not clear from the details provided in the brief decision. Indeed, in paragraph [11] of His Honour's decision, it is notable that His Honour summarises the business as "exclusive food catering rights for the bistro and non-exclusive rights to cater in the auditorium" [emphasis added]. Drinks are not mentioned. If the licence in Trembelas provided only for food and excluded drinks (as the agreement in the instant matter does) then by providing drinks and drink waiters, the defendant is not operating part of "the business" but is operating its own business. His Honour does not appear to me to be suggesting that "catering" is part of the overall business of the club - it is separate from the club and His Honour's reasons are based upon the finding that the defendant was operating part of the catering business. On the same basis, in my opinion, it is not clear that "cleaning" was part of the services to be provided pursuant to the licence. 44 In my view, Trembelas is to be distinguished from the current agreement, not on the basis of "joint operation" but on the basis that in this case the respondent does not operate "part of the business". The "business" in this case in my opinion is described and confined with clarity in the agreement. The applicant is to provide food and kitchen services and provide wait staff to service the hotel dining and/or eating areas during the term of the agreement. The applicant is not to sell any drinks. Clause 5(g)(5) requires some consideration. Either it is included in error, and the draftsperson forgot the inclusion of Clause 5(f), or the applicant's wait staff may serve drinks through some arrangement with the respondent. There is insufficient evidence to decide that point. This detail is unclear but in my view is not sufficient to render the agreement not a retail lease. The agreement provides for the applicant's business to be running the kitchen in order to prepare and provide meals (even though the agreement does not specify "preparation" that must be the intent and meaning of the agreement) and to serve those meals in the dining and/or eating areas of the respondent's premises. So far as the agreement is concerned, the applicant has effective exclusive use of and responsibility for the kitchen and kitchen equipment in the preparation of food and intermittent but regular and unhindered access to the dining and/or eating areas. There is no provision in the agreement for the respondent to operate part of this business, and on that basis Trembelas must be distinguished. 45 The respondent has also submitted that this agreement is an excluded agreement by virtue of s5(b) of the Act. That section excludes the situation where a retail shop is "used wholly or predominantly for the carrying on of a business by the lessee on behalf of the lessor". In this case, the respondent has submitted that the business includes the sale, supply and consumption of alcoholic and non-alcoholic beverages (including packaged beverages intended to be consumed away from the premises), the sale, supply and consumption of meals, the operation of gaming machines, totalisator agency facilities, entertainment and functions. The provision of services by the applicant under the Second Agreement amount to the operation of part of the business of the Ashfield Hotel. There is no evidence that the submission is correct in fact. It is not necessary to consider whether this particular hotel includes all those functions just mentioned, but on the evidence available to me, it appears the hotel does not provide meals: does not prepare meals does not sell meals and merely provides an area (the dining area) where meals may be consumed (and making no distinction in this regard between "food" as the agreement has it, and "meals" as the respondent's submission has it). Furthermore, although it is not necessary to decide this issue, even if the respondent did provide "meals" (perhaps from vending machines, for example) that does not mean the respondent is operating part of the applicant's business. On the evidence available and on the basis of the agreement, only the applicant operates the applicant's business. 46 In addition, it cannot be maintained, if that is what the respondent intends to do by invoking s5(b), that the applicant is carrying on a business on behalf of the respondent. There is simply no such suggestion in this matter. The applicant appears to be operating the business for herself. She presumably prepares and provides food for a price which is designed to cover her costs and leave her with a reasonable profit. There is no suggestion the respondent is operating or having the business operated on its own behalf. The respondent is entitled only to the rent, or in the terms of the agreement, the monthly licence fee. 47 The respondent also relies on s5(a) of the Act. There is no evidence to suggest that the kitchen and dining areas, or other eating areas which may exist (but are not mentioned in the evidence) exceed an area of 1,000 square metres. This information would be peculiarly within the knowledge of the respondent but there is no actual submission made, or evidence provided, by the respondent as to the size of those areas. That submission must therefore be rejected. 48 The respondent submits that the premises (for the purpose of the definition of retail shop) are not used wholly or predominantly for the operation of the applicant's business. There is no doubt that the submission is incorrect so far as the kitchen is concerned. However, the respondent specifically refers to the lack of evidence that the dining area is used wholly or predominantly for the carrying on of the applicant's business. Certainly there is no evidence that the dining room is used wholly for carrying on the applicant's business, but in my opinion, given the lack of any evidence (or suggestion) that anyone else provides food to be consumed in the dining area, and that the dining area is called "the dining area" I find that it is used predominantly for the carrying on of the applicant's business. I repeat my previous remarks that evidence to the contrary is peculiarly within the knowledge of the respondent but such evidence has not been provided. 49 I therefore find that the second agreement is a retail shop lease. 50 It is also necessary to consider the effect of the provision or otherwise of a s16 certificate. As noted above, the first agreement required a s16 certificate and one was provided. Even if the first agreement was a lease, the s16 certificate had the effect of limiting the term to 12 months. 51 The second agreement had the same essential term, but the s16 certificate was not provided. As noted in paragraph 26 above, the applicant submitted that this essential term must be taken to have been waived by the respondent. The respondent does not refer to this issue in its submissions. 52 I agree with the applicant's submission in this regard. I note that by s16(3) the respondent could have insisted the certificate be provided up to 6 months into the life of the lease but that on the evidence available to me, nothing was done. I therefore find s16 applies to the lease, and that the term of the lease is 19 October 2012 to 18 October 2017. 53 The application is to be listed for directions at the earliest available opportunity.

Civil and Administrative Tribunal of New South Wales

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: 11 September 2014

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (6 paragraphs)

Parties

Cases Cited (1)

Cited By (2)