ATMA Investments Pty Limited v The Astor Pty Limited [2001] NSWADT 15 (16 November 2001)

Last Updated: 16 May 2002

NEW SOUTH WALES ADMINISTRATIVE DECISIONS TRIBUNAL RETAIL LEASES DIVISION

CITATION: ATMA Investments Pty Limited -v- The Astor Pty Limited [2002] NSWADT 15

PARTIES: APPLICANT

ATMA Investments Pty Limited

RESPONDENT

The Astor Pty Limited

FILE NUMBERS: 015106

HEARING DATES: 16/11/2001

SUBMISSIONS CLOSED: 16/11/2001

DECISION DATE: 16/11/2001

BEFORE: Donald B - Judicial Member

LEGISLATION CITED: Retail Leases Act 1994

CASES CITED:

APPLICATION: Claim for assignment of rights under a lease/ declaration lessor not entitled to withhold consent to an assignment of rights

MATTER FOR DECISION: Preliminary matter

APPLICANT REPRESENTATIVE: APPLICANT

S Taylor, agent

RESPONDENT REPRESENTATIVE: RESPONDENT

G Burton, solicitor

ORDERS: 1. Declare that the permitted use of the premises under the lease as a licensed restaurant includes the pizza oven and associated takeaway business

2. Declare that it was unreasonable for the respondent to have withheld consent to the proposed assignment

3. Declare that the respondent is deemed to have consented to the proposed assignment of the lease

4. Matter stood over as directed.

Reasons for Decision:

Delivered ex tempore

1 This is an application for urgent interim orders, the hearing of which was expedited. I will deal first with the application for an adjournment which is pressed. I am of the view that the Tribunal ought to proceed now to consider the question whether or not there is a deemed consent to an assignment of the lease within the terms of the lease and the Act in this matter.

2 The principal argument put in favour of an adjournment related to the need for further evidence as to whether or not the permitted use of these premises included use of them for the purposes of the proposed assignee's business, namely to incorporate a pizza oven within the licensed restaurant. The basis upon which that further evidence was said to be relevant was that the situation was not clear from the documents placed before the Tribunal, particularly the Development Application and an undated letter from the respondent to the proposed assignee concerning its approval of the lodging of the development approval.

3 Those documents were said to be unclear as to the connection of proposed ducting work in association with the pizza oven to ensure a proper exhaust system. The argument was put that this material would be relevant as it may demonstrate that work needed to be done beyond the leased premises to achieve a successful outcome. In my opinion that evidence is not relevant to the issue of the permitted use of the premises as such.

4 It may be relevant to whether or not the proposed use is able as a matter of law or commercial implementation to be achieved but I do not think that I ought to delay determining the consent to assignment issue because of the need to consider evidence.

5 The other bases upon which the application to vacate the hearing date was put relate to the need for further evidence relevant to the question of damages. However, for reasons which I will state when dealing with the issue of consent, those concerns do not constitute a basis on which I should, considering the interests of both parties, refuse to proceed at least to determine the consent issue.

6 Therefore, I now propose to deal with the consent issue.

7 The dispute arises in the context of a lease between the respondent and the applicant, Atma Investments Pty Limited dated 3 July 1998. This lease contains in clause 6.5 the familiar provisions permitting assignment which reflect the statutory regime that also applies in that regard in sections 39 to 41 of the Retail Leases Act 1994.

8 The applicant by memorandum dated 15 August 2001 and faxed on that date to the respondent (receipt of which was acknowledged by the solicitor for the respondent on the first hearing of this matter). That memorandum in my opinion constitutes a valid notice seeking consent to the proposed assignment by the applicant to a Mr David Cowdrill as the proposed assignee of the lease.

9 An issue has arisen between the parties as to whether in terms of both the lease and the statute, it is established that the proposed assignee does not propose to change the use of the premises, being the permitted use in terms of the lease.

10 The lease in item 7 of the schedule is expressed as "coffee shop". Since the entering into the lease the premises were subsequently the beneficiary of a liquor licence and, accordingly, their use includes the sale of liquor. It is not disputed that the use as licensed premises is consented to by the respondent. The dispute arises as to whether the respondent has consented to the proposed additional use of the licensed restaurant to incorporate a pizza oven.

11 In my opinion the respondent by executing the Development Application to the City of Sydney for development approval of the proposed assignee has consented in writing to the use of the premises to include the pizza oven and the associated take away business. Accordingly, to that extent, in my opinion it is established that the proposed assignee does not propose to change the use to a non-consented use and, accordingly, the provisions of both 39(1)(a) of the Statute and clause 6.5(b) of the lease are satisfied.

12 It is not contested that the respondent has otherwise approved the proposed assignee in terms of his financial skills. Accordingly, the sole questions remains as to whether either the consent has been deemed to have been given by lapse of time or if that were not to be the case whether a purported refusal by the respondent would in the circumstances be unreasonable.

13 In my opinion the application of 15 August 2001 was a valid application for consent and by virtue of the lapse of time consent is deemed to have been given. In addition, with no response from the lessor, in the circumstances of this matter, since the applicant had satisfied all the requirements of the lease and the Act for consent, it would have been unreasonable for the respondent to withhold its consent.

14 Accordingly, in my opinion the consent is deemed to have been given in terms of both the lease and section 41 of the Act.

15 It is not necessary to make the orders sought by the applicant ordering the respondent lessor to execute an assignment of the lease. That is deemed to have happened as a matter of law and therefore, subject to what happens between the parties whether or not the lessor signs the relevant document the assignment is in a position to proceed without any execution by or on behalf of the respondent.

16 Further directions will be given for the management of the matter consequent upon this interim determination.

Orders

1. Declare that the permitted use of the premises under the lease as a licensed restaurant includes the pizza oven and associated takeaway business.

2. Declare that it was unreasonable for the respondent to have withheld consent to the proposed assignment.

3. Declare that the respondent is deemed to have consented to the proposed assignment of the lease

4. Matter stood over as directed.