Business Law Specialist Tony Burke and Lawyer Rosy Roberts of our office appeared today in the Court of Appeal in Melbourne where an appeal by a Landlord against a decision of Supreme Court Justice Croft regarding the meaning of the words “Retail Premises” was dismissed with costs.
This superior court decision has significant implications for both Landlords and Tenants in commercial premises hitherto not regarded as subject to the Retail Leases Act.
The saga began in VCAT with our client Tenant seeking certain orders against the Landlord based on the contention that the relevant premises were retail premises within the meaning of the Retail Leases Act. VCAT then conducted what was effectively a hearing within a hearing as to whether the Act applied. It concluded that it did not.
The Tenant then appealed to the Supreme Court of Victoria where the appeal was heard by Justice Croft. He reached the contrary conclusion in a decision consistent with earlier decisions of single judges in the Supreme Court of Victoria and focused on what is known as the ultimate consumer test.
The Landlord, aggrieved by the decision of Justice Croft then appealed to the Court of Appeal comprised of Justices Ferguson and Kaye together with Chief Justice Warren.
The key part of the Court of Appeal judgment reads as follows:
“In summary, the phrase ‘retail provision of services’ has long been interpreted by reference (at least in part) to an ultimate consumer test; that is, are the services used by the person to whom they are sold or are the services passed on by the purchaser in an unaltered state to some third person? No distinction has been drawn between commercial and non-commercial users of the service. The Court should be slow to depart from the interpretation of the phrase given to it by the Court over many years. It would only be appropriate to do so if the interpretation was clearly wrong; but that is not the case. Moreover, the legislature has made amendments to the legislation, but has not made any changes to the phrase “retail provision of services.” Consequently, and while not conclusive, the Court may presume that the legislature adopted the interpretation consistently given to the phrase by the Court in the past.
Other relevant considerations that inform whether the service is ‘retail’ in nature include the type of service that is provided and whether it is generally available to any person for a fee.
Here, there is nothing in the nature of the services provided that would exclude them from being considered retail services. The services were used by the Tenant’s customers who paid a fee. Any person may purchase the services if the fee is paid. The Tenant’s customers do not pass on the services to anyone else. They are the ultimate customers of the Tenant’s services.”
Other outstanding matters will now be dealt with by VCAT as the jurisdictional issue has been decisively addressed.
This is a very significant decision in commercial leasing law in Victoria. Landlords and Tenants of larger commercial premises who have hitherto not regarded the Retail Leases Act as applying should carefully check their arrangements. We anticipate that there will be further litigation as between Landlords and Tenants as a consequence of this Court of Appeal decision.
The property law team at Burke & Associates Lawyers has been deeply immersed in these issues and stands ready to assist both Landlords and Tenants in addressing issues that may arise.
Tony & Rosy
Tony Burke and Rosy Roberts appearing in the Victorian Court of Appeal on 5 July 2017.