Mehevi Pty Limited v Stromboli Pty Limited [2005] NSWADT 29 (21 February 2005)

Last Updated: 21 February 2005

NEW SOUTH WALES ADMINISTRATIVE DECISIONS TRIBUNAL RETAIL LEASES DIVISION

CITATION: Mehevi Pty Limited v Stromboli Pty Limited [2005] NSWADT 29


PARTIES: APPLICANT
Mehevi Pty Limited
RESPONDENT
Stromboli Pty Limited



FILE NUMBERS: 045053

HEARING DATES: 11/02/2005

SUBMISSIONS CLOSED: 11/02/2005



DECISION DATE: 21/02/2005

BEFORE: Fox R - Judicial Member





LEGISLATION CITED: Retail Leases Act 1994

CASES CITED: Goodlink Pty Limited v Sing & Others [1999] NSWADT 71

APPLICATION: Jurisdiction

MATTER FOR DECISION: Preliminary matter


APPLICANT REPRESENTATIVE: APPLICANT
J de Greenlaw

RESPONDENT REPRESENTATIVE: RESPONDENT
S Stanton

ORDERS: 1.The premises at 142 Cox’s Road, North Ryde, being ground floor shop and upstairs office leased to the Applicant by the Respondent pursuant to Lease dated 1 July 2002 are a Retail Shop in accordance with sub section (b) of the definition in section 3 of the Retail Leases Act 1994.


Reasons for Decision:

REASONS FOR DECISION

1 I am asked to decide a preliminary point of jurisdiction.

2 The Applicant, an LJ Hooker Real Estate franchisee, is the Lessee of street level shop and upstairs office premises at 142-144 Cox’s Road, North Ryde. The Respondent is the head Lessee of the shop, and of eight (8) other shops and four (4) other upstairs offices, all adjacent. These shops and offices are actually in two (2) buildings side by side, built some twenty five (25) years ago. Decoration and general appearance of the buildings are similar and they are properly regarded as the one (1) Development. At least seven (7) of the shops in the Development are occupied for purposes which come within the Schedule of the Retail Leases Act 1994, and two (2) of the shops (the Applicant’s and one (1) other) are occupied and used as real estate agencies, a use which does not fall within the Schedule. It follows that the Tribunal has no jurisdiction in this matter unless it be proven that the quite narrow gateway effected by the definition of Retail Shop Premises in Section 3 of the Retail Leases Act 1994 is available to the Applicant.

3 The effect of Sections 63 and 70/72 of the Act is to give the Tribunal jurisdiction to determine a Retail Tenancy Claim. A Retail Tenancy Claim is:-

"a claim in connection with a liability or obligation with which a retail tenancy dispute is concerned",

and a Retail Tenancy Dispute is:-

"any dispute concerning the liabilities or obligations (including an obligation to pay money)"

of a party or former party to a retail shop lease.

4 Section 3 defines a Retail Shop to be:-

"premises that:

(a) are used wholly or predominantly for the carrying on of one or more of the businesses specified in Schedule 1 (whether or not in a retail shopping centre), or

(b) are used for the carrying on of any business (whether or not a business specified in Schedule 1) in a retail shopping centre".

5 A Retail Shopping Centre is defined to mean:-

"a cluster of premises that has all of the following attributes:

(a) at least 5 of the premises are used wholly or predominantly for the carrying on of one or more of the businesses specified in Schedule 1,

(b) the premises are all owned by the same person, or have (or would if leased have) the same lessor or the same head lessor, or comprise lots within a single strata plan under the Strata Schemes (Freehold Development) Act 1973 or the Strata Schemes (Leasehold Development) Act 1986 ,

(c) the premises are located in the one building or in 2 or more buildings that are either adjoining or separated only by common areas or other areas owned by the owner of the retail shops,

(d) the cluster of premises is promoted as, or generally regarded as constituting, a shopping centre, shopping mall, shopping court or shopping arcade."

6 The parties agree that the Respondent’s Development falls within subsections (a), (b), (c) but not (d). The question I have to decide is whether the Respondent’s Development

"is promoted as or generally regarded as constituting a shopping centre...".

7 In order to consider this matter I have briefly perused the Applicant’s Affidavits of Peter Hinton dated 19 August 2004, S Cox dated 19 August 2004, and the Respondent’s undated statement of Joe Babko filed 13 October 2004, and the Affidavit of Onofreo Norm Cerreto dated 11 October 2004, but none of these contain anything which appears to be relevant to the jurisdiction issue before me.

8 The Affidavits of 27 October 2004 and 16 November 2004 of Onofrio Norm Cerreto and the Affidavit of Richard Green dated 21 September 2004 for the Respondent and the Affidavits of P Hinton, S Cox, and L Vignati dated 10 November 2004 and the Affidavit of Hinton dated 6 December 2004 for the Applicant either directly address the issue before me, or are relevant to it.

9 The Cerreto Affidavit of 27 October 2004 fully sets the scene of the locality, and appears not be challenged in that regard. From that Affidavit it is clear that the Development cannot be described as a "court" or a "mall" or an "arcade", the Development consists of conventional lock up shops facing a street front – generally described as "strip shops".

10 The Development is on the south western side of Cox’s Road, somewhat to the south of the intersection of Cox’s Road with Lane Cove Road. Immediately to the north of the Development, on the same side of Cox’s Road, is a Council carpark, and the North Ryde Golf Course is generally behind the Development. To the south of the Development, on the same side of Cox’s Road, in separate conventional lockup street-front shops, are a video store, a hairdresser, a real estate agent, a pharmacy, a medical centre, an antique shop, a takeaway and a hairdresser and then there are residences. Opposite to the development, on the north eastern most side of Cox’s Road is a Church, a Denominational School, and a St Vincent De Paul Office. There is no further commercial development to the south of the Church, but, to the north, on that same side of Cox’s Road, there are a Commonwealth Bank, a Council Library, and a shopping mall (properly so described) called the Cox’s Road Mall, containing a Franklins Supermarket, a Liquor Store, and eighteen (18) other speciality shops. The North Ryde Primary School is opposite the Cox’s Road Mall, and so is on the same side as the Respondent’s Development, but to the north of it.

11 It follows that what is best described as the "Cox’s Road Shopping Centre, North Ryde" is not a conventional gathering of shops facing one another across a single road; as you go along the road there are shops to the right and school to left, immediately followed by shops to the left and school and Church to the right. The only point where the shops appear to oppose one another is at the northern end of the Respondent’s Development, it faces the Commonwealth Bank across the street.

12 It is alleged in the November Affidavits of Mr Hinton and Ms Cox that the Respondent’s Development has been called "the Links Shopping Centre" a name which I presume to arise from the fact that the Golf Course adjoins the parking area to the rear of the Development, and presumably also the rear of the Council carpark next door to the Development.

13 I was referred to the matter of Goodlink Pty Limited v Sing and Others [1999] NSWADT 71. It is relevant to refer to the opening words of Donald JM:-

"This matter illustrates the limited and, in my view, overly precise way in which the Retail Leases Act 1994 operates so as not to be available in what I think most ordinary people would consider to be a Retail Lease environment".

14 I must first have regard to the plain ordinary meaning of the words used in the definition of Retail Shopping Centre in Section 3. If the Respondent’s Development were located in Cox’s Road adjoined or surrounded only by the Golf Course, the Schools and Churches and other residential uses, and not by other shops, then clearly it would be a shopping centre, and could not possibly not be "generally regarded as constituting" such. However, situated as it is, with a number of shops beside it, on the one side of the road, and, a large number of shops on the other side of the road not quite immediately opposite, but very close by, it can not be said, on any view of the matter, that the Respondent’s Development by itself constitutes a shopping centre. Obviously, there is a shopping centre, which is properly called the Cox’s Road Shopping Centre, of which, on the one hand, the Respondent’s Development constitutes a substantial part, and, of which on the other hand, the nearly opposite Cox’s Road Mall forms a larger substantial part.

15 The Applicant referred me to the second reading speech of the relevant Minister to argue that I should give a wide interpretation to the concept of Shopping Centre. The Minster’s words certainly appear open to that interpretation; but there is no ambiguity, I am bound by the plain and clear words used in the Act.

16 I note the sworn evidence of Mr Hinton and Ms Cox, to the effect that they "generally regard [the Development] as a Shopping Centre" but that takes the matter no further in the face of the clear facts. The Affidavit of Mr Vinati is totally equivocal in that he says "I have always referred to the premises [which appears to refer his own restaurant within the Development] as part of a Shopping Centre". It is not clear whether he refers to the totality of the shops gathered around Cox’s Road, or whether he is simply referring to the Respondent’s Development, and so his evidence is not persuasive either.

17 Mr Hinton’s 6 December Affidavit establishes that his "yellow pages" advertising reads "LJ Hooker North Ryde, Cox’s Road Shopping Centre", but that takes the matter no further. Whether or not the shop is located within the Cox’s Road Shopping Centre is not in issue.

18 I have no persuasive evidence to establish that the development is generally regarded as a shopping centre and I find that it is not.

19 In order to fully resolve the matter, I now turn to the question of whether the Respondent’s Development is "promoted as ... a shopping centre".

20 In this regard I again refer to the Affidavits of Mr Hinton and Ms Cox who both depose that "there was a sign above the premises of 142-148 Cox’s Road, North Ryde which said "The Links Shopping Centre". Against this, Mr Cerreto, on 16 November states that the building has never had such a sign on it. The 2 December Affidavit of Peter Hinton, which appears to respond to that of Mr Cerreto of 16 November, states "a very large sign was attached to the fence overlooking the carpark at Cox’s Road Shopping Centre". There is nothing to indicate that this is the carpark of the Defendant’s Development, or whether it is the Council carpark next door, nor does the Affidavit in any way indicate whether the words "The Links Shopping Centre" appeared on the sign or whether this was yet another sign.

21 The oral evidence of 11 February 2005 expanded the Affidavits of Mr Hinton and Mr Cerreto. He corrected his earlier assertions:- there was no sign on the building, but there was a sign bearing thew words "The Link Centre" and it was actually affixed to a fence on the rear boundary of the carpark. This fence consisted of a lower section of concrete block and an upper section of chain wire, and the sign was affixed to the chain wire. Mr Cerreto adhered to his position – there was never a sign either on the building or on the fence.

22 Having heard it all I am not satisfied that the evidence establishes on the balance of probability that there was any sign on the fence of the carpark in issue. However, the evidence and argument before me on 11 February 2005 then raised the prospect that the Development may have been promoted within the terms of the Act by the words used in the Disclosure Statement upon which the Lease was based.

23 The prescribed Disclosure Statement has several sections which apply to all Retail Shops, and one (1) section which applies only to Retail Shopping Centres. As I understand the practice, it is usual, in the case of Retail Shops which are not part of a Shopping Centre, leave the "Retail Shopping Centre part" of the Disclosure Statement within the documents, and simply either not fill it out, or alternatively formally strike a line through it.

24 The Lease document in these proceedings appears to have been drawn on the assumption that the premises fell within the Retail Leases Act, and had a full disclosure statement prepared before hand, and attached to the document. This appears to be no different to the Lease document which was in issue in Goodlink v Singh [1999 NSWADT71] (see paragraphs 2 and 9). However that fact alone (the apparent initial assumption of the parties) does not bring the matter within the jurisdiction of the Tribunal. I note that the issue of "promotion" as used in the definition of Retail Shopping Centre was not considered in Goodlink.

25 In the Disclosure Statement before me the "Retail Shopping part" was fully completed, starting with the prompt:-

"name of the Retail Shopping Centre"

to which the response was:-

"The Links Shopping Centre".

26 Other prompts responded with address and similar details etc, gave the full tenancy mix, and ended with:-

"Tenants Association"

"no"

and:-

"contribution to Retail Shopping Centre Association and Promotion"

"None".

27 I am satisfied from the evidence of Mr Cerreto that there was no promotion of the development, whether paid for by the tenants or otherwise, and further I am quite satisfied that each and every incoming tenant was told that in the initial negotiations, well before they might see the Disclosure Statement. I find that the Respondent did not ever promote the Development as a Shopping Centre, and I am further satisfied that what little evidence was placed before me in relation to advertising promotion by either Mr Hinton, or other occupants of the Development that the general reference in such promotions was to the Cox’s Road Shopping Centre (being all the shops facing Cox’s Road, rather than the Respondent’s development).

28 All that said, Mr De Greenlaw’s cross examination of Mr Cerreto did satisfy me to the relevant standard that all of the current lettings of the Development were based on very similar Disclosure Statements, each having the same name "The Links Shopping Centre" inserted in it. I note in this regard that the unchallenged Affidavit of the Reverend Green, filed on behalf of the Lessor, which opens with the words "I have been a tenant of the building known as "Links Shopping Centre" is some further evidence of the building being promoted to tenants by that name. Mr Stanton argued that, it being accepted that there has been no advertising promotion, it cannot be said that the building was promoted to the general public. I accept that:- the Development was not promoted to the general public as either "The Links Shopping Centre", or as any other "Centre". However I find that Disclosure Statement amounted to a promotion to prospective tenants of the Development as "The Links Shopping Centre" and that in my view is sufficient to comply with the Act.

29 I find that there is jurisdiction in this Tribunal to hear this matter because I am satisfied, as a matter of fact that the premises occupied by the Applicant fall within the definition of "Retail Shopping Centre", having been so promoted.

30 I make no Order in relation to the costs of this particular Application, but do make the observation that the matter at hand was a very moot point indeed, and was proper to be argued.