By Russell Cocks, Solicitor

First published in the Law Institute Journal

The meaning of ‘retail premises’ continues to occupy the attention of the Courts.

The ‘length & breadth’ of the phrase ‘retail premises’ has occupied the Courts on a number of occasions since the introduction of the original retail tenancies legislation in 1986. Indeed, this column considered some of those cases in July 2012, specifically in relation to whether the retail use of the premises was the ‘predominant use’ of the premises as required by the Act.

CB Cold Storage Pty Ltd v IMCC Group (Australia) Pty Ltd [2017] VSC 23 decided on 7 February 2017 by Croft J is the latest of these considerations and, in some eyes, continues the widening of the application of the Retail Leases Act 2003 beyond what has been regarded by some as the traditional application of the Act.

Retail sales and services have a colloquial connection with transactions between business as a supplier and members of the public as consumers. The traditional distinction was between a retailer who sold or supplied to the public and a wholesaler who chose to service a more limited clientele and transacted with retailers who then transacted with the public. But the retail leases legislation was never this simplistic and whilst references to ‘dictionary’ meanings were occasionally made, the true meaning of the legislation was more nuanced than this.

As early as Wellington v Norwich Union Life Insurance Society Ltd [1991] VicRp 27 the Courts were considering ‘the ultimate consumer’ as the appropriate test for the application of the Act, rather than any requirement that the consumer be a member of the public. Thus that case held that the office of a patent attorney was retail premises as the business conducted therein was the provision of retail services. That the public could access those services conducted from those premises was a fact, but not a necessary component of the definition of ‘retail premises’. Reviewed in the light of the cases discussed below, the premises would have been retail premises even if the patent attorney excluded the public from the premises and only serviced qualified lawyers or, as appears to have been the case, multinational companies. To regard a multinational company as a ‘consumer’ is perhaps a challenging concept but in the context of the retail tenancy legislation it is the ‘consumption’ of the goods or services that is important, not the identity of the consumer.

Croft J referred to his decision in Fitzroy Dental Pty Ltd v Metropole Management Pty Ltd & Anor [2013] VSC 344, a case involving not the retail supply of dental services as the name might suggest but rather the supply of conference space. The tenant provided conference services, generally to business operators who might use those services for internal consumption or provide services to the public. The landlord appeared to believe that the imposition of a business between the landlord and the public meant that the premises were not ‘retail premises’ but Croft J found to the contrary and that there were, potentially, two transactions involving the retail provision of services – the provision of the premises by the landlord to the tenant and then the provision of conference facilities by the tenant to other businesses or the public. Only the first transaction was subject to the retail tenancies legislation as the second transaction did not involve the provision of retail premises, but rather the provision of retail services. It is the use of the premises as part of the supply by the tenant to the consumer that is the key to determining whether the premises are ‘retail premises’.

In the light of Fitzroy Dental it is perhaps not surprising that Croft J found that the supply by IMCC Pty Ltd of cold storage facilities to CB Cold Storage for the specific purpose of ‘cold and cool storage warehouse and transport facilities’” was the provision of retail premises within the meaning of the Retail Leases Act 2003. The tenant did not, nor was it required to, limit its use of the premises to its own business. Its business was to offer the use of the facilities to third parties, generally other businesses, ranging from large companies to small owner-operators. Whether the premises were available to or accessed by members of the public was not relevant as ‘consumers’ can be ‘persons who use a service for business or a purpose other than personal needs’.

Croft J was cognisant of the intention that the retail tenancy legislation be ‘ameliorating and remedial’ and that the intent was to provide protection to tenants who provide goods and services to ‘consumers’. The fallacy is to equate ‘consumers’ with the general public. Goods and services can be provided for consumption within the meaning of the Act irrespective of the involvement of the general public and if the tenant’s premises form part of that supply then the premises will be ‘retail premises’.

Tip Box

Whilst written for Victoria this article has interest and relevance for practitioners in all states.

‘Ultimate consumer’ includes both the general public and other businesses.

Any supply that involves the use of the premises by a third party is likely to be ‘retail premises’.