Administrative Decisions Tribunal New South Wales Medium Neutral Citation: Kim v Kim [2011] NSWADT 92 Hearing dates: On the papers Decision date: 04 May 2011 Before: D Patten, Deputy President Decision: Application for summary dismissal on ground of lack of jurisdiction refused Catchwords: Jurisdiction - Whether premises a retail shop - Insufficient evidence to permit summary finding Legislation Cited: Retail Leases Act 1994 Cases Cited: Nil Texts Cited: Nil Category: Separate question Parties: Kwang Sun Kim (Applicant) Young P Kim, Kyung Suk Kim and Paul Mercedes Kim (Respondents) Representation: Mr W Carney (Counsel for the Applicant) Mr AC Hoang (Solicitor for the Applicant) Mr S Allen, Norris Allen (Solicitor for the Respondents) File Number(s): 105200 Publication restriction: Nil Judgment 1The parties have agreed that the jurisdiction of the Tribunal should be determined as a preliminary issue in the case on the papers. 2The papers comprise two affidavits by the applicant, Kwang Sun Kim, respectively sworn 23 December 2010 and 2 February 2011, two affidavits of the respondent, Kyung Suk Kim, respectively sworn 18 January 2011 and 16 February 2011, written submissions by Mr William Carney, counsel for the applicant, and written submissions by Mr S Allen, solicitor for the respondents. 3The issue is whether the premises which are the subject of dispute between the parties constitute a retail shop as defined in the Retail Leases Act 1994 (the Act). 4In his earlier affidavit, the applicant deposed that from an unspecified date he "ran a business known as Park and Kim Enterprises which was a Karaoke Bar from premises situated at level 2, 41 Beecroft Rd Epping" (hereafter "the premises"). He annexed to his affidavit a copy of a lease of part of the premises for a term of 3 years from 8 October 2009 with an option for renewal for a further term of 3 years. 5Provisions in the lease relevant for present purposes are: Clause 6.1 The lessee must 6.1.1 Use the property for the purpose stated in item 17 in the schedule and not for any other purpose SCHEDULE ITEM 17 - PERMITTED USE KARAOKE CLAUSE 35 OPERATING TIMES The Lessee will only operate the premises for the hours permitted in the liquor licence and the Development Approval and will not open the Karaoke lounge before 8.00 pm on any night that the Karaoke lounge is open. CLAUSE 36 LICENCE OF BUSINESS AND USE OF EQUIPMENT AND FITTINGS The Lessee shall be entitled to operate the Lessor's business on the premises and to use the Lessor's fittings and fixtures located in the premises under licence provided that the Lessee shall be responsible for any damage to those fittings and fixtures occurring during the term of the lease of the premises and he shall be responsible for all repairs and maintenance of the fittings and fixtures required to keep them in good and operational order. The fixtures and fittings are as follows:- 1. Furniture: tables, chairs and banquet seats; 2. Kitchen fittings and drink equipment; 3. Karaoke Sound System including: a) KY Karaoke Machine; b) Amplifier; c) Speakers; d) Wireless Microphone and Unit; e) Wire Microphone; f) Transformer; 4. TV Monitors. CLAUSE 37 TRANSFER OF LIQUOR LICENCE The Lessor agrees that subject to the terms of this lease as more fully set out below and during the currency of the lease the Lessor will allow the Lessee to operate the Karaoke lounge business under licence and agrees to transfer the liquor licence to the Lessee. The Lessee subject to the following terms will indemnify the Lessor in respect of any liability, penalty or other loss resulting from a breach of the terms of the licence by the Lessee during the period prior to transfer of the licence. INTERPRETATION (a) "Licence" means the on-premises licence for a karaoke venue, licence number LIQ0624015681 attached to the Premises. (b) "Licensed karaoke venue" means the land and buildings as identified and approved by the Authority and premises trading as a karaoke venue and any other ancillary or permitted activity, trade or business that can lawfully be conducted at such premises. LICENCE (7) Trading (a) The Lessee must: (i) exercise and carry on (or procure the exercise and carrying on of) the trade and business of a licensed karaoke venue and any subsidiary trade and business on the Premises in a commercial and business like manner, and in a way which, to the best ability of the Lessee and Licensee, preserves, maintains and develops the attaching goodwill; (ii) keep the Premises open and used (or cause them to be kept open and used) for the trade and business of a licensed karaoke venue and any subsidiary trade and business during the hours and for the purposes, which are customary or permitted in respect of the Licence; (iii) manage and conduct the trade and business of a licensed karaoke venue and any subsidiary trade and business (or cause them to be managed or conducted) in a quiet, orderly and business-like manner; (iv) do (or procure the doing of) anything which is necessary to keep the Premises licensed and carry on the trade and business of a licensed karaoke venue and any subsidiary trade and business. 6The expressions Karaoke, Karaoke Venue and Karaoke Lounge are not defined in the lease. The Macquarie Dictionary 3 rd Edition indicates that the word Karaoke is derived from two Japanese words "Kara" meaning "absent" and "ohe" meaning "orchestra". The dictionary defines the word karaoke in these terms: "Noun 1. Access to a karaoke machine: "That restaurant offers karaoke" - adjective 2. (of bars, restaurants etc.) equipped with a karaoke machine". The expression karaoke machine is defined to mean "a music system which plays simultaneously a video clip of a song with subtitled lyrics and the backing tape of the song and which is equipped with microphones for the use of a singer". 7The earlier affidavit of Kwang Sun Kim was silent as to the precise nature of the business carried on in the premises which he simply described as a "Karaoke Bar". His later affidavit however contained these paragraphs: 4. All the time that I have operated the Karaoke bar there has been a Chicken Shop operating on the ground floor which sells take away food. 5. In all the time that I have operated the Karaoke Bar I have always sold food to patrons that food has been on a menu in the restaurant on the wall above the bar and on paper. 6. Some of the food namely fruit and other cold items have been prepared on the premises while hot food like chicken and Sushi is brought in by us for customers that order it from nearby shops. A copy of the in-house menu is annexed and marked with the letter "A". 7. I consider that I have also in effect run a restaurant for the convenience and comfort of my customers. 8The menu annexed to the affidavit read as follows: IN HOUSE MENU FOR THE KARAOKE BAR J/BLUE $600.00 ROYAL SALUTE $600.00 HENNESSY XO $600.00 J/BLACK $200.00 CHIVAS $200.00 DIMPLE $200.00 BEER $10.00 LIGHT BEER $9.00 MIXED FRUITS TRAY $100.00 DRIED SQUIZZ WITH NUTS $100.00 HAM & CHEESE $100.00 9In the affidavit of Kyung Suk Kim sworn 16 February 2011, it was deposed: 2. The premises have been approved by the local council for use as a karaoke lounge. The conditions of the development approval, a copy of which is annexed hereto and marked "A", provide in condition 9 that no food is to be prepared on the premises. There has not been any approval sought to prepare food on the premises due to the inadequacy of the kitchenette for use as a restaurant. The kitchenette was designed and built as a kitchenette for an office not as a restaurant kitchen. 3. The menu annexed to the affidavit of the Applicant indicates that the premises are promoted as a karaoke bar and predominantly provides alcohol. The provision of some food brought in from external sources does not I would submit constitute the premises a restaurant and the lease of the premises was never intended as a restaurant and would not be permitted by the Council development approval. The provision and sale of such items may be in breach of the development approval. 4. The nature of the business as leased, as approved by the Council development approval and the liquor licence clearly demonstrate that the business is a licensed karaoke bar and not a retail shop as contemplated by the Retail Leases Act. 10The Development Approval referred to in para 2 of the Affidavit contained these restrictions: 9. No food shall be prepared on site for sale to the public without the prior consent of Council. Reason: To ensure the requirements of the Food Act 2003 are met. 10. No alcohol shall be consumed on-site without the prior consent of Council. Reason: To ensure the users of the site do not disturb the amenity of the local area. 11As the issue before me is being decided on the papers, there has been no cross examination of witnesses and I accept at face value the matters deposed to. 12Section 3 of the Act contains these relevant definitions: listed business means a business prescribed for the purposes of paragraph (a) of the definition of retail shop (including a business for the time being specified in Schedule 1). 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 (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. 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 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. 13There is no evidence to the effect that the premises are contained within a retail shopping centre and it seems to be common ground between the parties that they are not. 14In Schedule 1 to the Act many retail shop businesses are listed. Of possible relevance to this case are "Amusement and entertainment services", "Restaurants, cafeterias, coffee lounges, food courts and other eating places", "Snack bars", "Beer, wine and spirit shops (except where goods are for consumption on the premises)". 15The original submissions of both parties focussed on the reference to restaurants etc. On the facts before me however, I could not conclude that the premises are used wholly or predominantly for the carrying on of the business of an eating place. At most the supply of food would seem to be a minor incident to the provision of a karaoke facility and possibly the sale of liquor, given that the preparation for sale of food is prohibited by the Development Approval and the applicants concede that in any event they only buy in to order, hot food required by their customers. It is noteworthy that only apparently highly priced cold food appears on the menu. 16As any liquor sold is presumably for consumption on the premises, if that is the predominant use of the premises, the business is outside the schedule to the Act. However it seems to me arguable at least on the evidence before me that the retail shop business of "Amusement and entertainment services" may be applicable. 17As the matter had not been addressed in the previous submissions, I invited the parties to make further submissions if they were so minded. The respondents submitted that the phrase "amusement and entertainment services" referred to places known as an "amusement parlour" or "games parlour" where machines are provided on a "pay as you go" basis. However I see no reason to limit the expression "amusement and entertainment services" in that way. As it seems to me, the provision of a karaoke facility constitutes at least an entertainment within the ordinary meaning of that word. 18Whether or not the provision of a karaoke facility is the sole or predominant business conducted on the premises is a question of fact. It is the only business contemplated by the lease itself albeit very imprecisely expressed. However nothing in the evidence before me indicates that the provision of a karaoke facility as opposed to the supply of liquor is not the predominant business. In his submissions, the respondents' solicitor referred to a police report which is not in evidence and submitted without reference to any evidentiary support that the predominant business was the sale of alcohol on the premises. In the absence of evidence these submissions must be rejected. 19Although counsel for the applicant did not avail himself of the opportunity to make further submissions, I am not satisfied for the reasons given that it has been shown that the Tribunal has no jurisdiction even though after a full hearing that may prove to be the case. 20I refuse to dismiss the proceedings summarily and order that the matter be listed for directions before a Judicial Member on 26 May 2011 at 11.00am. 21There will be no order as to costs. ********** 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. Decision last updated: 04 May 2011