CITATION: Wilson v Sydney Markets Limited [2009] NSWADT 256 DIVISION: Retail Leases Division Applicant: William Wilson PARTIES: Respondent: Sydney Markets Limited FILE NUMBER: 095163 HEARING DATES: 17 September 2009 SUBMISSIONS CLOSED: 18 September 2009 DATE OF DECISION: 30 September 2009 BEFORE: Fox R - Judicial Member CATCHWORDS: Jurisdiction – Retail Leases Act, Section 6 Retail Leases Act 1994 LEGISLATION CITED : Sydney Market Authority (Dissolution) Act 1996, Administrative Decisions Tribunal Act 1997, Conveyancing Act 1919 Conoid Pty Ltd v International Theme Park Pty Ltd [1999] 9BPR17, 369 CASES CITED: Thai Star Video Limited v Walpole [2007] NSW ADT 193 Helau & Ors v Bong Bong Pty Limited & Anor trading as Regional Retail Properties [2006] NSW ADT 128 Applicant Representative: David Williams SC REPRESENTATION: Respondent Representative: Middletons Solicitors ORDERS: 1. My declaration is that the Applicant's stalls 234, 235 and 236 are occupied by him pursuant to a Retail Shop Lease in a Retail Shopping Centre. 2. The matter is listed for directions at 2.00pm on 1 October 2009. REASONS FOR DECISION 1 The Applicant is a stallholder in Paddy's Markets Sydney. The Respondent is an entity to which the Sydney Market Authority (Dissolution) Act 1996 transferred the business formerly conducted by the Sydney Market Authority. Amongst other things it conducts the Haymarket enterprise known as Paddy's Markets. 2 The terms of the Applicant's right to occupy his three stalls are presently found in an Occupancy Agreement dating from 1 February 2003. In so far as that document (which was in evidence) applies to Paddy's Markets, it requires stallholders to trade on Thursday, Friday, Saturday and Sunday. The Respondent now intends to commence to trade on Wednesdays as well, and so proposes to change the Occupancy Agreement to require stallholders to trade on that day. 3 The Applicant contends that the Occupancy Agreement falls within the Retail Leases Act and that Section 61 imputes into the Occupancy Agreement the following provision:- (1) … that a lessor is not entitled to change the core trading hours of the retail shopping centre of which the shop forms part except with the approval in writing of the lessees of a majority of the retail shops in the shopping centre (whether or not those retail shops are retail shops to which this Act applies). The initial fixing of trading hours in a new shopping centre is not a change to core trading hours and is not affected by this subsection … (4) The "core trading hours" of a retail shopping centre are the times when retail shops in the shopping centre are required to be open for business, whether the requirement is imposed by or under a lease or by or under some other agreement, arrangement or understanding between lessors and the lessees. 4 He seeks as substantive relief:- "A declaration that the promotion, advertising and introduction of Wednesday trading between 9.00am and 5.00pm at Paddy's Market Haymarket without the approval in writing of the lessees of the majority of the retail shops in the shopping centre known as Paddy's Market Haymarket is contrary to the Applicant's occupancy agreement with the Respondent". 5 However, that is not the matter now before me, what is before me is the application for:- "An interim order pursuant to Section 70(a)(ix) of the Retail Leases Act 1994… that Section 61(1) of the Retail Leases Act 1994 operates to prevent the Respondent from changing the core trading hours of Paddy's Market Haymarket to include Wednesday trading between 9.00am and 5.00pm, except with the approval in writing of the lessees of a majority of the retail shops in the shopping centre". 6 As it perhaps not unusual in urgent applications relating to substantial issues, three matters of jurisdiction arose as preliminary points. These are best described as: 1. Length of lease. 2. Legislative exclusion. 3. Monetary limit. The Legislation 7 The relevant parts of the legislation are Section 6(1)(b) and (c) and Section 73(1) of the Retail Leases Act and Section Clause 4(3) of Schedule 2 of the Sydney Market Authority (Dissolution) Act. Retail Leases Act 6 Leases to which Act does not apply (1) This Act does not apply to any of the following leases of retail shops: … (b) leases for a term of 25 years or more (with the term of a lease taken to include any term for which the lease may be extended or renewed at the option of the lessee), (c) leases entered into before the commencement of this section, 73 Monetary limit on Tribunal's jurisdiction (1) The Tribunal has no jurisdiction to make an order or orders in respect of a particular retail tenancy claim or an unconscionable conduct claim if the total of: (a) the amount or amounts (if any) of money to be paid, and (b) the amount or amounts (if any) of money to be declared not to be due or owing, and (c) the value or values (if any) of the work to be done or the services to be performed, under or by virtue of the order or orders would exceed $400,000 or such other amount as may be prescribed by the regulations, whether on a balance of account or after set-off or otherwise. Sydney Market Authority (Dissolution) Act, Schedule 2, Clause 4 4 Short-term licences and permits (1) This clause applies to any licence or permit that is not a long term licence or permit. (2) A short-term licence or permit may be varied or revoked in either or both of the following ways: (a) by agreement between the holder of the licence or permit and the approved purchaser, (b) in accordance with the terms and conditions to which the licence or permit is subject. (3)The terms and conditions of a short-term licence or permit may be varied by the approved purchaser by notice in writing served on the holder of the licence or permit". The Occupancy Agreement 8 The resolution of these three jurisdiction matters require the current Occupancy Agreement to be considered in some detail. It dates from 1 February 2003 and was at the time described by the Respondent as a new plain English Occupancy Agreement which "represents an update of the previous Conditions of Occupancy. It uses plain English which clearly defines your rights and obligations. These have not changed in any substantive way and essentially, it is business as usual". The brochure goes on to say that the agreement both has been developed in accordance with the Constitution (which appears to refer to the constitution of the Respondent) and terms of the Sydney Market Authority (Dissolution) Act 1997. The previous Conditions of Occupancy were (presumably) referred to in Schedule 2 of that Act and these which may well, prior to the operation of the Retail Leases Act, have been licences strictly so called. 9 The present Agreement contains the following: 2.1 Existing Occupiers If You commenced your occupation and use of the Premises before the Effective Date then: (a) You agree any conditions of occupancy, standholders' guide or other agreement with SML in respect of your use and occupation of the Premises are revoked and replaced with this Occupancy Agreement as at the Effective Date; and (b) You acknowledge that You received, read and understood this Occupancy Agreement prior to the Effective Date. 4.1 Right to occupy Subject to the terms of this Occupancy Agreement, SML grants You the right to: (a) use and occupy the Premises; and (b) enter and remain in the Markets, during Access Hours. 22.2 Termination by You You may terminate this Occupancy Agreement and surrender your Licence to SML at any time by 30 days notice in writing to SML. You acknowledge and agree that if You surrender your Licence to SML pursuant to this clause You will not be entitled to any compensation or payment by SML for your Licence. You further acknowledge that termination of this Occupancy Agreement by You will be without prejudice to the rights of SML against You in respect of anything done or omitted under this Occupancy Agreement prior to such termination or in respect of any sums or claims outstanding at the time of termination. Definitions Licence means your right to use and occupy the Premises and to Sell Goods in the Markets pursuant to the terms set out in this Occupancy Agreement. 5.4 Death If You are a natural person then in the event of your death, SML will (subject to clause 5.5): (a) deem You to have surrendered your Licence and the Premises; (b) grant to your executor or administrator a Licence effective for the period of time between your death and the grant of a Licence pursuant to paragraph (c) below; and (c) grant to the person: (1) entitled by your will to the Premises; or (2) determined by y our executor or administrator, a Licence in respect of the Premises. 19 Relocation 19.1 Right to relocate SML may relocate the Premises or the Markets or any part of the Markets or any part of the Markets from Flemington and/or Haymarket to an alternate location (Relocation). 19.2 Relocation Notice SML must give You written notice of the Relocation (Relocation Notice) . This Relocation Notice will: (a) provide details of the Relocation; (b) offer You a licence at the new location; and (c) require You to surrender your current Licence and vacate the Premises on a specified date (which must be at least 90 days after the date of the Relocation Notice). SML will offer you new premises that are, as a minimum, reasonably comparable to the Premises. In this case, SML will charge you rent at the same rate per square metre. In the event the new premises provide you with enhance facilities (in the reasonable opinion of SML), SML reserves the right to set the rent at a higher level. 19.3 Surrender of current Licence The surrender of your current Licence under clause 19.2(c) applies whether or not You accept an offer of a licence at the new location. 19.4 Acceptance of new licence You must give notice in writing to SML within 30 days of receiving the Relocation Notice if You wish to accept SML's offer of a licence at the new location and if You fail to do so, the offer of a licence at the new location will no longer be open to you. 19.5 Costs of Relocation SML will pay your reasonable costs of relocating from your existing Premises to your premises at the new location, including fitting out your new premises to substantially the same standard as your existing Premises at the date of the Relocation Notice. 19.6 SML liability SML will not be liable to You for any claims for damages, including claims for consequential or economic loss and loss of profits, arising from or as a result of any Relocation (other than those costs SML agrees to pay under clause 19.5) For the avoidance of doubt, SML will not be liable to pay You any compensation or payment if you do not accept a licence at the new location. 19.7 Shareholding (a) If you accept SML's offer of a licence at the new location in accordance with clause 19.4, your Share will be stapled to the premises at the new location and a replacement Share certificate issued to you pursuant to clause 2.15 of the Constitution. (b) If you do not accept SML's offer of a licence at the new location in accordance with clause 19.4, you will cease to be entitled to remain a member of SML pursuant to clause 3.2 of the Constitution and your Share will be dealt with pursuant to clauses 2.4 and 3.5 of the Constitution. 18. Redevelopment 18.1 Right to redevelop SML may demolish, refurbish, repair, redevelop or extend the Premises or the Markets or any part of the Markets (Redevelopment). For the avoidance of doubt, a Redevelopment does not include the Markets relocating to an alternate site. This is dealt with at clause 19. 18.2 Redevelopment affecting the Premises and/or the Markets If the Redevelopment will affect the Premises and/or the Markets: (a) SML may require You to move temporarily to an alternative Stand or Store; or (b) If there are no suitable alternative Stands or Store available, and provided SML has made reasonable efforts to make available suitable alternative Stands or Stores, SML may suspend the rights and obligations under your Licence (including but not limited to the right to use and occupy the Premises and Sell Goods in the Markets) for the necessary period required for SML to complete the Redevelopment, by issuing to You a Redevelopment Notice. 18.3 Redevelopment Notice SML will provide you with a Redevelopment Notice, which will: (a) give You at least 60 days notice in writing of: (1) the date upon which the rights and obligations under your Licence will be suspended; or (2) the date by which You will be required to move to an alternate Stand or Store; (b) provide details of: (1) the estimated period of time for which the rights and obligations under your Licence will be suspended; or (2) the alternate Stand or Store to which You will be moving and the estimated period of time you will be required to occupy the alternate Stand or Store; and (c) detail the Redevelopment as it affects the Premises, including notification that in the event the rights and obligations under your Licence are suspended pursuant to clause 18.2(b) then during this suspension period: (1) You will not be able to use and occupy the Premises or Sell Goods in the Markets; and (2) You will not be liable for the Rent and the Dues. 18.4 Estimate and return For the avoidance of doubt: (a) the suspension period referred to in the Redevelopment Notice is an estimate only and SML may continue the suspension period until such time that it has completed the Redevelopment; and (b) if you are moved to an alternate Stand or Store you will be required to return to the Premises at the date set out in the Redevelopment Notice or such other date advised by SML with 30 days notice. 18.5 SML liability SML will not be liable to You for any claims for damages, including claims for consequential or economic loss and loss of profits, arising from or as a result of any Redevelopment. 18.6 Shareholding Nothing in this clause will affect your right to hold the Share or your rights under the Constitution. 5. Dealing with the Premises 5.1 No assignment You must not assign, sublet, licence, part with possession of or otherwise deal with your Licence or the Premises unless you have the written approval of SML. You may mortgage or charge your Licence with the approval in writing of SML. 5.2 Sale of your business If You wish to sell the business You conduct from the Premises, SML may, in its absolute discretion, accept a surrender of your Licence and grant to your purchaser a Licence for the Premises. 5.3 Fee (b) SML may charge your purchaser the Administration Fee as a condition of its granting to your purchaser a Licence pursuant to clause 5.2. Applicability of Retail Leases Act 10 These provisions, taken together, establish a regime for occupancy by the stallholder for life (and longer). They clearly create a tradeable interest in a particular market stall. In my view, if Section 6(1)(b) does not oust jurisdiction because of the possible length of occupancy, then there can be no doubt that the provisions amount to the kind of agreement envisaged by the Section 3 definition of a retail shop lease. 11 "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. 12 The plain words of Clause 22.2 (especially when considered with Clause 5.4) create an interest for life, terminable at the option of the stallholder. Length of Lease Term 13 Mr Carruthers argued on behalf of Sydney Markets Limited that the fact that the Occupancy Agreement "confers a right of occupation that exceeds a 25 year term" ends the matter. On the other hand, Mr Williams identified five kinds of terms of lease recognised by the common law, being: (a) tenancy for a fixed term; (b) tenancy from year to year; (c) periodic tenancy for less than a year; (d) tenancy at will; (e) tenancy at sufferance. 14 He went on to say "However it would be wrong to consider the lease [Market Stall Holders Occupancy Agreement] be a lease in perpetuity, subject to the termination rights as set out in Clause 22 [of the Occupancy Agreement]. The law does not recognise those types of lease but rather imputes an intention as to term. Here there would be no basis for imputing such a term beyond the period of the "head lease" which terminates in 2018. 15 I agree with Mr Williams – but perhaps not for the same reasons. Section 6 of the Retail Leases Act contemplates a lease for a term of 25 years or more and by way of explanation goes on to include in such term "any term for which the lease may be extended or renewed at the option of the lessee". It refers to the conventional situation where a lessor grants a term of years followed by one or more terms which the lessee (not the lessor) elects. The proper analysis is that (assuming full compliance with the other lease covenants and requirements) the lessor has given the term of years which is the sum of the initial term and the option terms. The only party who has a choice in the matter is the lessee, the lessor has no choice at all. 16 The situation now at hand is different in one critical aspect, being the fact that the head lease between Jens Marketing and the Respondent expires on 10 December 2018. It follows that if the Respondent elects not to negotiate a further term from Jens (which holds a 99 year lease of the site which has many decades to run) the Applicant's right of occupation will be at an end, having run for a term of no more than 21 or 22 years, calculated from the commencement of his occupancy. 17 If the Respondent does negotiate a further term for a substantial number of years, then S121(1) of the Conveyancing Act will bring about a situation where the Applicant has a Retail Shop Lease which is for a term of more than 25 years, but that will have been at the election of the Respondent, not the election of the Applicant. It is this difference which places the Occupancy Agreement outside of Section 6(1) of the Retail Leases Act, it is not a right of occupation which could run for more than 25 years at the sole discretion of the lessee. 18 I referred to the possible term of 21 or 22 years to state the matter at its highest. In fact, I am satisfied that the plain words of Clause 2.1 of the Occupancy Agreement mean that all of the occupancies in Paddy's Markets commence on or after 2 February 2003, being the date when the Respondent, in effect, cancelled all of the previous agreements, and brought into operation the Agreement now in issue. In this regard it is appropriate to refer to Section 8(1) of the Retail Leases Act. (1) For the purposes of this Act, a retail shop lease is considered to have been entered into when a person enters into possession of the retail shop as lessee under the lease or begins to pay rent as lessee under the lease (whichever happens first). and to note the decision in Helau & Ors v Bong Bong Pty Limited & Anor trading as Regional Retail Properties [2006] NSW ADT 128 at paragraph 69 and following where Deputy President Chesterman held that being in possession does not preclude an "entry" for the purposes of Section 8. 19 As the Retail Leases Act applies to the Occupancy Agreement, the Section 61 provision is imported into it. 20 I observe in passing that, despite the fact that the Occupancy Agreement is in quite plain English, its provisions must be read with great care because of the various provisions imported into it by the Retail Leases Act. Thus paragraphs 18 and 19 of the Occupancy Agreement cannot be read without reference to Sections 33/36 of the Retail Leases Act. Legislative Exclusion 21 Mr Carruthers argued that the policy evinced by the Sydney Market Authority (Dissolution) Act intended to create "the notion of self determination and self ownership" and "established a policy that Sydney Markets Limited would represent the interests of the market. That is, as a policy matter, not merely a matter of landlord and tenant. In fact, the Applicant is a shareholder in the Respondent. It is entirely consistent with that underlying policy analysis that the Sydney Market Authority (Dissolution) Act contains an intention to exclude the Retail Leases Act. Indeed, it would be surprising as a matter of policy if the Retail Leases Act had been thought to apply in those circumstances of self determination and self ownership. One must look at the intention of the legislation at the time of the enactment". 22 As I understand the law, I cannot have reference to matters of policy or intent behind the legislation unless there is some doubt or ambiguity. If I understood the argument correctly, in this matter the doubt or ambiguity which I am to resolve is the reference to the "licence or permit" given the store holder by the Sydney Market Authority, which the Act transferred to the Respondent. This reference was in an enactment some years after the operation of the Retail Leases Act, and if the parliament intended the Retail Leases Act to apply (so it is argued) it would not have used the words "licence" for an arrangement which is in truth a Retail Shop Lease as defined by the Retail Leases Act. The terms of the permit or licence upon which the Sydney Market Authority (Dissolution) Act operated were not before me, and so I am not able to take that aspect further, other than to say that the very plain words of the definition of Retail Shop Lease are clear, and cover the licence or permit in question, being "any agreement". These words must be assumed to have been in the mind of the parliamentary draftsman when the word "licence" (which is an agreement) was used in the context of a facility which then would be used for trade of the kind envisaged by the Retail Leases Act. 23 Yet another aspect which renders Mr Carruthers' proposition untenable is the fact that in 2003 the Respondent appears to have taken it upon itself to either affirm or create a right of occupancy in stallholders, the terms of which fall squarely within the Retail Leases Act. Monetary Limit 24 Lastly, Mr Carruthers proposed that, because the matter before me affected every stallholder and because the Applicant in his Affidavit indicated that he was in charge of an unincorporated association of Paddy's Markets stallholders (and so brought the matter on behalf of that association), involves the possibility of an order in favour of the Applicant for an amount in excess of $800,000.00 per annum (being the rent received by the Respondent for Wednesday trading) and so was beyond my jurisdiction. That effect, taking all of the stallholders into account, may well be so, but the only application before me is by Mr Wilson, who holds three stalls, for which he paid a total of $3,046.62 for the month of September, which involved 16 trading days. I calculate that to be $190.42 per day. If Mr Wilson is forced to Wednesday trading he will, in a year, pay just over $9,900.00 which, during the term of the rest of his retail shop lease (to December 2018) assuming a rate of inflation of no more than 5%, would mean that the payment for the final year would be approximately $16,000.00, and that would mean that the whole of the "extra" amount paid by Mr Wilson for Wednesday trading would be no more than approximately $117,000.00. 25 The fact that other stallholders might have similar rights has absolutely nothing to do with Mr Wilson's application. Again, the fact that the other stallholders might instigate an application, in almost identical terms, seeking almost identical orders, has no relevance to the matter before me. Are Market Stalls Premises? 26 Mr Carruthers has also placed before me an advice and opinion of Gary Downes QC (as he then was) given in 1996, about the application of the Retail Leases Act (as it then was) to the Flemington Markets. In that opinion the following words appear: "I must say that I do not think that the individual stalls in the growers markets or Paddy's Market could be regarded as shops although some of then could be regarded as carrying on one or more of the retail businesses specified in the schedule [of the Retail Leases Act]. I do not think that there are any relevant premises representing a shop. I do not think that there is any shop itself. Very few (if any) of the business in the growers markets could be regarded, in any event, as retail businesses if a view is taken of the meaning of "retail", even if they were conducted from "premises" capable of being described as a "shop"." 27 That opinion was given before the decision of Simos J in Conoid Pty Ltd v International Theme Park Pty Ltd [1999] 9BPR17,369 whereby it was held that the focus of the Act is on the business being carried on, not on the nature of the premises. It has always been my view that any definable area being used for a business described in the Schedule of the Retail Leases Act will be premises for the purposes of that Act. See my reasons in Thai Star Video Limited v Walpole [2007] NSW ADT 193. Although I have been given no evidence in that regard, I think I can take judicial notice of my own less than annual (usually under protest) visits to the Haymarket site to say that the stallholders spaces are as well defined as those in Thai Star Video. 28 I think it was conceded by both parties that the Haymarket facility is a retail shopping centre as defined by the Act. The Act states: "retail shopping centre" means 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 listed businesses, (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". and obviously applies. Declaration 29 My declaration is that the Applicant's stalls 234, 235 and 236 are occupied by him pursuant to a Retail Shop Lease in a Retail Shopping Centre. 30 In view of the obvious commercial urgency involved, I listed the matter for further directions at 2.00pm on 1 October when there will be sufficient time to chart the urgent further steps which need to be taken to bring the matter to a final hearing. 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.