Lifestyle Vehicles Pty Ltd v Car City Minchinbury Pty Ltd [2008] NSWADT 195

CITATION: Lifestyle Vehicles Pty Ltd v Car City Minchinbury Pty Ltd [2008] NSWADT 195

DIVISION: Retail Leases Division

APPLICANT Lifestyle Vehicles Pty Limited PARTIES: RESPONDENT Car City Minchinbury Pty Limited

FILE NUMBER: 085082

HEARING DATES: 19 May 2008

SUBMISSIONS CLOSED: 19 May 2008

EXTEMPORE DECISION DATE: 7 July 2008

DATE OF DECISION: 18 July 2008

BEFORE: Olsson E SC - Deputy President; Griffiths G - (Advisory) Non Judicial Member ; Tyler T - Non Judicial Member

CATCHWORDS: Jurisdiction

MATTER FOR DECISION: Jurisdiction of the Tribunal

LEGISLATION CITED : Retail Leases Act 1994

Moweno Pty Ltd v Stratis Promotions Pty Ltd [2003]nswca 376 CASES CITED: Manly Council v Malouf [2004] 61 NSWLR 394 Rylands Brothers (Aust) Ltd v Morgan (1927) 27 SR (NSW) 161

J Keogh, barrister REPRESENTATION: S Burchett, barrister

ORDERS: The Tribunal has jurisdiction to hear and determine the matter.

REASONS FOR DECISION Introduction 1 The applicant sought declaratory relief to the effect that it was the sub-lessee of a retail shop lease from the respondent, that the lease commenced around July 2006, was confirmed on 27 March 2008, is continuing and is in respect of land described as Lot 10, 591 Carlisle Avenue, Minchinbury, 2770, and a small surrounding area. 2 The applicant also sought declaratory relief as to the terms and conditions of the retail shop leased as expressed in an unsigned sub-lease, together with a signed 'Appendix to Lease Agreement' dated 27 March 2008 from the respondent to the applicant. 3 The applicant also sought specific performance of the sub-lease and appendix, damages, costs, and interest. 4 In a separate application the applicant sought urgent interim orders that it be entitled to continue in occupancy of an area known as "the point" which is adjacent to the premises occupied under the agreement for lease. 5 Since the Application (in part) alleged unconscionable conduct by the respondents the Tribunal is constituted in these proceedings in accordance with Clauses 1 and 4 of Part 3B of Schedule 2 of the Administrative Decisions Tribunal Act 1997. It is constituted by a Deputy President who is a member of the Retail Leases Division, assisted by two appropriately qualified members (Non Judicial Members Griffiths and Tyler), acting in an advisory capacity only. 6 The matter came before the Tribunal on 19 May 2008 when the respondent (without admission as to the existence of a lease) indicated that it disputed the jurisdiction of the Tribunal to hear and determine the matter on the basis that the subject lease did not fall within the provisions of the Retail Leases Act 1994 (the Act) because (inter alia) it did not grant a right of occupation of premises for the purposes of their use for the carrying on of any business prescribed by Schedule 1 to the Act. 7 The parties requested the Tribunal to proceed and determine the question of jurisdiction with respect to the right of occupation of premises and the operation of Schedule 1 in advance of any other matters. 8 Both parties provided the Tribunal with written submissions. Background 9 591 Carlisle Avenue, Minchinbury is occupied by a multi-dealer vehicle sales complex. According to Annexure "A" to the Affidavit of Frank John Boitano read on behalf of the applicant (sworn 7 May 2008), the complex was a 10 acre site situated on the corner of the Great Western Highway and Carlisle Avenue, Minchinbury, New South Wales and was set up to cater for up to 41 independent car yards. 10 The car yards sell used cars. 11 Mr Charlton Dallasen, the owner and director of the applicant company, made a statement dated 24 April 2008 which was filed in the proceedings, and upon which the applicant relied. 12 Inter alia, Mr Dallasen said that approximately half of the lots on the premises at 591 Carlisle Avenue, Minchinbury are occupied in a retail style complex in which each car retailer occupies premises of less than 1000m2. 13 There was no dispute that the premises in question occupied less than 1000m2. 14 The retail complex also has a café, car accessories and warranty shop, and a finance/brokerage shop. 15 In order to consider whether or not these premises are retail premises for the purposes of the Act, it is necessary to consider the factual background in some detail. Mr Dallasen gave evidence that using one entity or another he had been at the centre for approximately the last seven years, and that he had a lease over Lot 10 in the plan, and had been in continuous occupation of that Lot for the past seven years. He said that in 2006 he entered into a new tenancy agreement with the owner, Auto City Group Pty Limited, in the name of his company, Lifestyle Vehicles Pty Limited. The terms of that lease are not clear, but nothing turns on that for present purposes. 16 Mr Dallasen gave evidence that on 27 March 2008 he was given a copy of a document headed "Appendix to Lease Agreement" by a representative of the respondent and asked to sign it. The document was in evidence. It was headed "Appendix to Lease Agreement Between Car City Minchinbury Pty Limited" [sic] and was signed, apparently on behalf of Car City Minchinbury Pty Ltd. The name of the other party to the lease was missing, but nevertheless Lot 10 was clearly identified. The Appendix related to the amount of rent payable, together with some terms relating to the payment of rent. Mr Dallasen said that at the time he was given the document he was also given a hard copy of the Respondent's website, together with the disclosure statement. The disclosure statement was in evidence. It plainly identified the lease as a retail lease; it referred to s.16 of the Retail Leases Act (relating to a minimum term of five years for a retail lease) and contained a schedule in the standard form of lessee information for retail shop leases. It also included a lessee's disclosure statement, referring to s.11A of the Act which requires a statement to be provided to the lessor within seven days of the lessee receiving the lessor's disclosure statement. 17 It was not contested that the respondent provided this document to the applicant on or about the date alleged. Plainly, at that time the respondent considered the Retail Leases Act applied to the Lots at 591 Carlisle Avenue, Minchinbury although this opinion is, of course, is not determinative of the matter. The Applicant's Submissions 18 The Applicant submitted that the premises contain a shop which sells second hand motor vehicles, and therefore falls within the prescribed list in Schedule 1 to the Act under the category "second hand goods shops". 19 Section 3 of the Retail Leases Act defines "retail shop" in this way:- "Retail shop means premises that:- (a) Are used, or proposed to be used, wholly or predominantly for the carrying on of one or more businesses prescribed for the purpose 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." 20 Section 33 of the Interpretation Act 1987 directs a Court or Tribunal that is endeavouring to construe a provision of an Act to prefer a construction that promotes the purpose or object underlying the Act. The applicant referred to the second reading speech of the Minister for Small Business and Regional Development in respect of the passage of the bill in April 1994. The Minister said at paragraph 4:- "I eluded earlier to the coverage of the Bill, and its coverage of all retail establishments, not only shopping centres. ……. All the evidence presented to me suggests that the problems are widespread, whether the premises be stand alone shops, strip shops, or metropolitan shopping centres. Nor can I see that there is a logical reason why bad leasing behaviour would be restricted to regional shopping centres. If it is appropriate to put in place a basic system which will facilitate negotiation of leases on the basis of full disclosure, then surely it is appropriate if the system should be available to all leases." 21 The Act itself provides that it is an Act to "make provisions with respect to the leasing of certain retail shops, and the rights and obligations of lessors and lessees of those shops, and for other purposes". The applicant suggests that as a result of the comments made by the Minister, together with the broad definition, it is plain that the Act is intended to promote inclusiveness in respect of the types of retail activities to be covered by the Act, rather than exclusiveness. 22 The applicant further says that the form and nature of shopping centres is changing, and increasingly one finds specialist shopping centres which contain a number of individual traders. The applicant cited for example homemaker centres, or whitegoods centres. Mr Keogh argued that Car City was no different in principle to these types of centres. 23 There being no challenge for present purposes that as 591 Carlisle Avenue contains (potentially) 41 individual used car dealerships, all of which occupy less than 1000m2, the real question for determination is whether or not used cars can properly be called "second hand goods". 24 Citing the Interpretation Act (s.34) the applicant argued that it was possible to consider the lexicon of language to interpret the meaning of "second hand goods". He referred to:- a) The Fair Trading Act 1987 (NSW) in which s.4 defines "goods" to include "ships, aircraft and other vehicles" [emphasis added]; b) The Sale of Goods Act 1923 (NSW) in which s.5 defines "goods" to mean "all chattels personal or other than things in action and money"; c) A New Tax System (Goods & Services Tax) Act 1999 (Cth) in which s.195.1 defines "goods" as meaning "any form of tangible personal property". 25 The applicant also referred to the definition of "second hand" in the Macquarie Concise Dictionary , the Pawn Porkers & Second Hand Dealers Act 1996 (NSW), the Drug Misuse & Trafficking Act 1985 (NSW), and Words and Phrases Legally Defined (4th Edition) . In each of those definitions, there is nothing to suggest a limitation such as that contended by the respondent – that is, that "second hand goods" does not include vehicles. For example, s.3 of the Pawn Brokers & Second Hand Dealer's Act 1996 (NSW) defines second hand goods to mean "any goods of a class or description prescribed that have been used or that are represented by a vendor of the goods to be goods purchased (otherwise than by the vendor previously) but unused." 26 Schedule 1 to the Retail Leases Act contains a list of prescribed businesses. It contains only two references to motor vehicles. The first reference is "battery shops", which is qualified by the words "other than motor vehicle batteries" and the second is "motor vehicle and motor cycle accessory shops excluding tyre shops and battery shops". The applicant argues that if the legislature had wanted to exclude second hand motor vehicles from the prescribed list, it would have been simple to do so, and the fact that it has not moved to exclude used car or cars or second hand motor vehicles affirms the interpretation that "second hand goods" is a term that is meant to be interpreted broadly. Respondent's Submission 27 The respondent made a number of forceful submissions. 28 Whilst not admitting that the applicant is a party to any lease, the respondent says that the alleged sub-lease is not a retail shop lease because it does not grant a right of occupation of the premises for the purpose of their use for the carrying on of any business prescribed by Schedule 1. Citing Moweno Pty Limited v Stratis Promotions Pty Limited (2003) NSW CA 376 at para 49, the applicant says the Court must look to the use reasonably contemplated by the parties when they entered into the lease, and that applying that principle to the present case, the Tribunal must give full weight to the width of the purpose alleged to have been agreed in the new lease, rather than utilised, which encompasses both new and used cars, neither "predominantly". 29 In oral submissions Mr Burchett agreed that there was a significant dispute between the parties as to whether there was a lease and if so, its terms. He said the fundamental question for the Tribunal was whether it has jurisdiction over second hand vehicles assuming that is found as a matter of fact [emphasis added]. 30 By that comment, the Tribunal took him to mean that the point raised in paragraph (28) above was not to be agitated for the purposes of the present issue since it would require evidence as to the existence and terms of any lease. If the Tribunal were required to decide the point, I incline to the view that notwithstanding the general use referred to in the unsigned lease document (annexure B to the affidavit of Mr Boitano) the use of the premises was dictated by the nature of the Car City business. On the limited evidence available, it would appear that the nature of the business was used cars. I refer to paragraph 9 of the affidavit of Mr Dallasen and to annexure A to the affidavit of Mr Boitano, which contains a hard copy of the Car City website. The website plainly refers to the business as "the largest Used Car Complex in the Southern Hemisphere" and elsewhere asserts that the complex has "the most comprehensive range of quality pre-owned vehicles" and the on line search facility permits easy searching of "thousands of Car City quality pre-owned cars". I also note that Mr Keogh, in submissions, said that apart from a café, car accessory and warranty shop and a finance broker, the small businesses in the complex are "all retailers of second-hand motor vehicles (used cars)." Mr Burchett did not challenge this submission. 31 The respondent then argued that the business contemplated by the Act as a second hand goods shop is of the character commonly known as such, that is, a shop which sells second hand goods in general, and not a particular type of second hand good. By contrast, says the respondent, the list of businesses itself reveals a clear intention to exclude motor vehicle sales from the Act. The respondent says the list specifically identifies the type of business related to motor vehicles which are included in the coverage, and it is limited to accessory shops, and even that excludes tyre shops and battery shops. The respondent says it is a basic principal of construction that an express reference to one matter indicates the exclusion of other matters. 32 The respondent also says that motor vehicle businesses are regulated by other legislation, for example, the Motor Dealers Act 1974, whereas second hand goods businesses are regulated by the legislation, for example, Pawn Brokers & Second Hand Dealers Act 1996. Mr Burchett pointed out that various types of licences under the Motor Dealers Act are required for the wide range of motor vehicle related businesses which are not mentioned at all in the Retail Leases Act. He also notes that clause 5 of the Regulation to the Pawn Brokers & Second Hand Dealer's Act prescribes various types of goods as second hand goods including car accessories, and watercraft, but not motor vehicles, and indeed excludes some small motorised equipment. In identifying these legislative requirements the respondent says that they reflect the differences between the two types of business, namely the type of business commonly understood in the community as a 'second hand goods shop' and a used car yard. 33 The respondent also says that the submissions of the applicant rely on assertions of fact concerning the alleged tenancy which are not supported by evidence. Specifically, Mr Burchett points out that the draft standard form of lease document and the disclosure document were not signed by any party, nor were they completed documents. He submitted that even if used car sales is a business within the common placement of the Act, the lease of a car yard with merely an ancillary office building could not be a retail lease (Manly Council v Malouf [2004] 61 NSWLR 394), and therefore for that reason also the application should be dismissed. Decision 34 I accept Mr Burchett's caution that care must be taken in relying on definitions in other legislation to interpret legislation under consideration and do not find specific definitions of 'goods' in other legislation persuasive. 35 The Retail Leases Act (s.3) defines "retail shop" as follows:- "'Retail Shop' means premises that:- (a) are used or proposed to be used, wholly or predominantly for the carry 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)." 36 Section 5 of the Act excludes certain retail shops from the operation of the Act as follows:- "This Act does not apply to any of the following retail shops:- (a) shops that have a lettable area of 1000m2 or more; (b) shops that are used wholly or predominantly for the carrying on a business by the lessee on behalf of the lessor; (c) any shop within premises where the principal business carried on on those premises is the operation of a cinema, bowling alley or skating rink, and the shop is operated by the person who operates the cinema, bowling alley or skating rink; (d) any premises in an office tower that forms part of a retail shopping centre; (e) premises of a class or description prescribed by the Regulations as exempt from this Act." 37 Schedule 1 of the Act describes retail shop businesses for the purposes of s.3. The descriptions of shops are quite specific. The Schedule includes such things as:- "bicycle shops, building supplies shops, chandler shops, equipment hire shops, hardware shops, motor vehicle and motor cycle accessory shops (excluding tyre shops and battery shops), plumbing supply shops, pools and spas shops, and second hand goods shops." 38 Plainly, the legislature considered that the provisions of the Retail Leases Act would have a wide operation over a wide variety of shops. The respondent says that the general meaning understood in the community as a "second hand goods" shop is very different from the type of business understood as being a used car yard. That is certainly true, but it does not mean that, properly construed, vehicles sold in a used car yard are excluded from the provisions of the Act, as long as the shop complies in other respects. 39 The Tribunal accepts the observations made by counsel that it is probably unusual for a used car yard to occupy less than 1000m2 and it may be that the legislature did not contemplate that used cars would or could be sold from a lot which was less than the prescribed size. 40 The respondent says that motor vehicle businesses are regulated by the Motor Dealer's Act 1974, just as second hand goods businesses are regulated by the Pawn Brokers & Second Hand Dealer's Act 1996. It is said that various types of licences under the Motor Dealer's Act are required for the wide range of motor vehicle related businesses which are not mentioned in the Retail Leases Act. This is certainly true, but the same may be said for a number of other businesses included in Schedule 1, for example, "beer, wine and spirits shops" which require a licence under the Liquor Act, and "firearms shops" which require certain other specific licences. 41 Section 33 of the Interpretation Act requires regard to be had to the purposes or objects of Acts and statutory rules, thus a construction that would promote the purpose or object underlying the Act or statutory rule should be preferred to a construction that would not promote that purpose or object. 42 The preamble to the Retail Leases Act 1994 does not shed any light on the purpose or object of the Act other than to make provision with respect to the leasing of certain retail shops, and the rights and obligations of lessors and lessees of those shops, and for other purposes. 43 However, the Tribunal is persuaded by s.5 of the Act which plainly identifies the types of shops which are not intended to enjoy the protection afforded by the Act. The terms of s.5 suggests that the legislation is not concerned with shops operated by people who have access to what might be considered strong bargaining power. The passage extracted from the second reading speech suggests strongly that one of the purposes of the Act is to put in place a basic system which will facilitate negotiation of leases, provided that they otherwise fall within the definition of the Act. The Tribunal is inclined to accept the submission of the applicant that the Act is intended to promote inclusiveness in respect of the types of retail activities to be covered by the Act, and adds that considered overall, the Act seeks to protect the operators of retail businesses. 44 In that sense it is beneficial legislation: Manly Council v Malouf (supra) at 405 and 410. At 405, Tobias JA referred to the decision of the trial judge and said: "His Honour then noted that the Retail Leases Act was "beneficial legislation" and that, although it envisages the possibility of penalties, it should be given a broad construction. He then concluded in these terms "it seems to me that any ambiguity in the use of that term should be resolved in favour of giving the possibility of a remedy before a tribunal rather than to deny it, and accordingly I would uphold the submission that the tribunal does have appropriate jurisdiction to hear and determine on its merits the claim brought by Mr Malouf"". 45 At 410, Tobias JA said "As the primary judge observed, the Retail Leases Act was "beneficial legislation". Accordingly, it should not be construed narrowly." 46 The Tribunal accepts the applicant's submission that s.34(1)(b)(i) of the Interpretation Act permits it to consider material not forming part of the subject Act to be used in interpretation where the provision is ambiguous or obscure. The Tribunal is not of the view that the provision is so ambiguous or obscure that it needs to rely on extrinsic material, but nevertheless notes that "second hand goods shop" defined in other legislation, for example The Fair Trading Act 1997, and the Sale of Goods Act 1923 would include vehicles as second hand goods. 47 The respondent argued that the list of businesses in the Schedule evidences a clear intention to exclude motor vehicle sales from the Act. Mr Burchett said the list specifically identifies the type of business related to motor vehicles which are to be included and that it is limited to "accessories shops". He referred to the 'expressio unius est exclusio alterius' rule. I note however, the learned author of Pearce on Statutory Interpretation (6th edition) observes that the rule is applied by the courts with extreme caution and is used more often as a bolster to a predetermined interpretation than as a rule which produces a result in itself: paragraph 4:28. As Long Innes J said in Rylands Brothers (Aust) Ltd v Morgan (1927) 27 SR (NSW) 161 at 168-9: "I feel that it would be unsafe in this case to place too much reliance upon a canon of construction which must always be applied with caution and only in appropriate cases. In Colquhoun v Brooks (19) QBD 400 at 406 Wills J…said: '..the method of construction summarised in the maxim expressio unius exclusio alterius [sic] is one that certainly requires to be watched. Perhaps few so-called rules of interpretation have been more frequently misapplied and stretched beyond their due limits. The failure to make the expressio complete very often arises from accident, very often from the fact that it never struck the draftsman that the thing supposed to be excluded needed specific mention of any kind'" 48 I am not persuaded by the respondent's argument, citing Manly Council v Malouf (supra) that the applicant's business involves the lease of a yard with an ancillary office and therefore is not a 'retail lease'. In that case, the Council did not have power to grant a licence over the vacant land but even if it had, a grant over vacant land which was separate to the business of the restaurant did not bring the footpath in question within the Retail Leases Act. In the present case, the yard and office were one premise for the purposes of the lease and I note the comments of His Honour Tobias JA at page 413 of Malouf . 49 Moreover, other businesses in Schedule 1 would be in a similar position to that of a used car yard, for example, a pool and spa shop and equipment hire shops. The wares of such shops would, one would think, more often than not occupy land outside and about the actual shop where the transactions are undertaken. 50 It follows from the foregoing that in my opinion, the premises in question come within the meaning of the Retail Leases Act. This may be an unintended consequence of the way in which Schedule 1 is drafted, but that is a matter for the legislature.