CITATION: Ron Breach Farm Machinery Pty Ltd v MRL Properties Pty Ltd & anor [2008] NSWADT 321 DIVISION: Retail Leases Division APPLICANT Ron Breach Farm Machinery Pty Limited PARTIES: FIRST RESPONDENT MRL Properties Pty Limited SECOND RESPONDENT Palroz Pty Limited FILE NUMBER: 085115 HEARING DATES: On the papers SUBMISSIONS CLOSED: 30 October 2008 DATE OF DECISION: 20 November 2008 BEFORE: Fox R - Judicial Member Interpretation Act 1987 LEGISLATION CITED : Retail Leases Act 1994 Road Transport (General) Act 2005 Sassine v McGlinn MC & Anor t/as Westland Produce (RLD) [2008] NSWADTAP 54 CASES CITED: Manly Council v Malouf [2004] 61NSW Law Reports 394 Lifestyle Vehicles Pty Limited v Car City Minchinbury Pty Limited [2008] NSWADT 195 APPLICANT C Bianchino, solicitor REPRESENTATION: FIRST RESPONDENT P Tipper, solicitor SECOND RESPONDENT P James, solicitor 1. Applicant's evidence does not establish that Tribunal has jurisdiction 2. (a) Grant Applicant 28 days to file and serve further evidence to establish nature of business(b) If filed, matter to be listed for further directions on 22 January 2009 at 12pm ORDERS: 3. If such evidence not filed:- (a) Applicant has until 15 January 2009 to file and serve submissions in relation to costs (b) Respondent has until 30 January 2009 to file responses in relation to costs (c) Decision of costs to be made on the papers. REASONS FOR DECISION 1 The Applicant is the Lessee of industrial premises at 2/151 Orlando Street, Coffs Harbour, pursuant to Lease dated 19 July 2006 for a term of 3 years. The First Respondent, MRL Properties Pty Limited is the original Lessor and the Second Respondent, Palroz Pty Limited is the Assignee of the First Respondent and so is the present Lessor. The Applicant traded (as the name indicates) in the "sale and service of new and used farm machinery, tractors, lawnmowers and all associated equipment and accessories". (This description is drawn from a Lease which was said to the predecessor to the Lease in issue). The Applicant no longer occupies the premises and now claims compensation of approximately $311,000.00 from the First Respondent and release from the Lease from the Second Respondent. That is not the issue now before me, the issue at hand is jurisdiction. 2 The Respondents deny that the Applicant's business conducted in occupancy fell within the business as listed in Schedule 1 of the Retail Leases Act. 3 For the Tribunal to have jurisdiction there has to be a retail tenancy dispute:- Section 63:- "retail tenancy dispute" means any dispute concerning the liabilities or obligations (including any obligation to pay money) of a party or former party to a retail shop lease or former lease, being liabilities or obligations which arose under the lease or former lease or which arose in connection with the use or occupation of the retail shop to which the lease or former lease relates….." If that is not resolved by mediation a party to the dispute may proceed to make a retail tenancy claim for determination by the Tribunal. The definition of "retail tenancy claim" in s70 is as far as relevant, any of the following: "(a) a claim in connection with a liability or obligation with which a retail tenancy dispute is concerned, being: (i) a claim for payment of money (whether or not stated to be by way of debt, damages, restitution or refund), (ii) a claim for relief from payment of a specified sum of money,…. (ix) a claim for a declaration of the rights, obligations and liabilities of the parties under a lease,…." "Retail Shop Lease" and "Retail Shop" are defined by section 3:- ""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" 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…." 4 In circumstances where the jurisdiction is questioned, it may be appropriate that the issue be determined as a preliminary point, so saving the parties the trouble and the expense of preparing and calling the evidence necessary for determination of the substantial matter. That course is, however, not without its own difficulties as illustrated by the matter of Sassine v McGlinn MC & Anor t/as Westland Produce (RLD) [2008] NSWADTAP 54 which was delivered on 18 August 2008, some time after this matter was put on its course for preliminary determination. 5 There is evidence from the Applicant, being the Affidavit of Ron Breach dated 29 July 2008. There is no evidence in response, because the Respondents assert that the Affidavit did not establish jurisdiction. 6 The Affidavit stated that, for the trading year ending 30 June 2006, the business had gross income of just over $600,000.00, which broke up as approximately 17% labour, 19% used tractor sales and "parts and accessories" 64%. The next financial (ye June 2007) grossed just over $490,000.00, of which 13% was labour, 15.5% was used tractor sales and 71.5% was parts and accessories. 7 The Applicant's difficulty is that the Schedule reference is to accessories only:- " motor vehicle and motorcycle accessory shops (excluding tyre shops and battery shops) ". Resolution of that question held a strong prospect of finally resolving the issue between the parties as far as this Tribunal is concerned. 8 This perhaps worth noting that the matter was set on its course on much the same time as the publication of the decision in Lifestyle Vehicles Pty Limited v Car City Minchinbury Pty Limited [2008] NSWADT 195, which may have alerted the Applicant to another aspect of business use within the Schedule. 9 The parties all made written submissions, and this decision was based on those (and the Affidavit of Ron Breach). 10 The Applicant argues that in many instances parts and accessories are indistinguishable. So a replacement part like an air filter may be an accessory if it be of a higher specification than that which the manufacturer lists as appropriate for the engine. Thus the same element may be part for engine 'A' and an accessory for engine 'B'. 11 If I followed the argument correctly, this prospect raised an ambiguity, which needed to be resolved by reference to the rules and external sources authorised by the Interpretation Act 1987. The remarks Tobias JA in Manly Council v Malouf [2004] 61 NSW Law Reports at 394 at 405 ff, to the effect that the Retail Leases Act is beneficial legislation and so ambiguities should be "resolved in favour of giving a remedy before the Tribunal rather than to deny it" were called in aid. 12 The First Respondent adopted the rather wider submissions of the Second Respondent and the Second Respondent asserted that the plain meaning of the words in the Schedule allowed of no ambiguity. There is a clear difference between the meaning of the words, neither of which are defined by the Act and so the first port of call is the ordinary and popular meaning of those words. I was referred to the shorter Oxford and Macquarie Dictionaries. For an Australian context the Macquarie Dictionary seems to me to be the more appropriate. The Macquarie Dictionary define "part" to be:- "1. a portion or division of a whole, separate in reality, or in thought only, a piece, fragment, fraction or section, a constituent. 2. an essential or integral attribute or quality." Incidentally, the definition of "spare part" is:- "a part which replaces a faulty, worn, or broken part of a machine, esp. a motor vehicle." The same dictionary defines accessory to mean:- "1. a subordinate part or object; something added or attached for convenience, attractiveness, etc., such as a spotlight, heater, driving mirror etc. for a vehicle." 13 It seems to me that the latter part of the "accessory" definition is pertinent. 14 The first section of the "part" definition is helpful but not conclusive. In the context of motor vehicles, it seems to me that a part is something that is essential to the functioning of the whole, all as initially installed to create the whole. The Respondent put it correctly as:- "A part is a component of a larger thing and essential to the make up of the whole." A crankshaft or drive axle is a part, and things such as spotlights, sun canopies, cabins, radiators, etc. are not parts [presumably if not installed by the manufacturer] but are accessories "added to the tractor for convenience, comfort or attractiveness". 15 These are compelling submissions, the difference between the two words seems to me to be clear; there is no ambiguity, and I am bound by the plain meaning of the words. The fact that an item can be a part in one context and an accessory in another may raise a question of classification in the context of a particular sale for the purposes of the Schedule, but it does not, by that possibility, meld the two quite separate concepts into one, in merely demonstrates that there can be an area of overlap between the two concepts. 16 The Applicant's position seems to find its source in the fact that, in the motor vehicle context, the words "parts" and "accessories" usually come together. However only one of these terms is used in the Schedule and that term, I am satisfied has a separate and identifiable meaning in ordinary parlance. It follows that, if the Applicant is to succeed, it will have to demonstrate that its sales of accessories (perhaps together with the sales of second hand items whether they be tractor implements, parts or accessories) amount to a predominant use within the premises. 17 A second argument was that the Applicant sells:- "a large amount of tractor implements and parts and accessories to maintain those attachments. This includes slashers, front end loaders or scoops, fertiliser distributors, ploughs, variety of different rakes, boom poles, cultivators, diggers, utility trailers and so on." This raises the question whether an accessory for a fertiliser distributor (drawn by a tractor) is an accessory for a motor vehicle. That seems to me to be a much more difficult question. The Second Respondent argues that just because an implement (such as a slasher) is hauled by a tractor it does not become an accessory to a tractor, it remains an implement. However that suggestion seems not to take account of the fact that the slasher has no independent use, if it is not hauled by a tractor or is otherwise coupled to it to give it its necessary power, it is little more than a decoration in the farm machinery shed. I am satisfied that, in this context, an agricultural implement which has no internal facility for functional propulsion, but only fulfils its function when coupled to a tractor, is an accessory for that tractor and so is a motor vehicle accessory within the Schedule. 18 Lastly I have to take note of the fact that the First Respondent sought to reserve a position to argue that a tractor is not a motor vehicle. That is inappropriate. A party cannot seek to have it both ways. However, I am satisfied that this aspect should be put to rest as well. 19 The matter was not argued, but I can see no reason why the definition as found in the Road Transport (General) Act 2005 should not apply in this context. " Motor vehicle" means a vehicle that is built to be propelled by a motor that forms part of a vehicle. " This same Act goes on to define vehicle as:- " Any description of vehicle on wheels (including light rail vehicle) but not including any other vehicle used by tramway or railway ." The Act also states "combination" means:- " A group consisting of a motor vehicle connected to one or more vehicles ." "Vehicle" is not defined, but the Macquarie Dictionary gives the second meaning for vehicle to be:- " A carriage or conveyance moving on wheels or runners ." Clearly, anything with wheels and a motor that drives some of those wheels is a motor vehicle. 20 The issue at hand arose because the Applicant chose not to seek to further analyse his business income invoices. That is a course which turns out to be very unsatisfactory. In fact, in the end, that course may render the Applicant liable to a costs order. However, I do not at this time decide the question of costs, but I do address that in my Orders. 21 Although my ruling will clarify the issue for the parties, it does not have the desired effect of resolving it. It would be unfair to deny the Applicant an opportunity to reclassify and analyse his invoices, but of course it would be almost as unfair to put the Respondents to more expense in further curial attendances. 22 The Applicant has 28 days to file further evidence to establish that the predominant use of the premises falls within Schedule 1 of the Retail Leases Act. 23 If the Applicant does not file such evidence, the Applicant has an opportunity to file submissions on costs, and the Respondents can file their responses in relation to the submissions on costs. That decision (if it has to be made) is to be made on the papers. 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