Definition of a Retail Shop

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A recent decision of the Administrative Decisions Tribunal of New South Wales has highlighted the arbitrary distinctions that can arise in relation to the definition of a Retail Shop under the Retail Leases Act 1994.

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  • A recent decision of the Administrative Decisions Tribunal of New South Wales has highlighted the arbitrary

    distinctions that can arise in relation to the denition of a Retail Shop under the Retail Leases Act 1994.

    In Kwon v Kim, Judicial Member Fox had to determine if the Tribunal had jurisdiction to deal with a claim for damages

    for failure to repair under a lease which permitted the premises to be used as an Internet Caf.

    Legislation

    Retail Shop is dened in Section 3 of the Act as premises that are used wholly or predominantly for the carrying on

    of one or more of the businesses specied in Schedule 1 (whether or not in a retail shopping centre).

    If the premises are not a Retail Shop, the occupancy cannot be the subject of a Retail Shop Lease and the Tribunal

    would have no jurisdiction.

    Schedule 1 lists 134 descriptions of shops, some of which are given in multiples, so that more than 150 separate and

    distinct uses are named. This is in contrast to Parliaments usual approach of dening concepts in general terms

    rather than trying to list particular examples.

    There was no listing in Schedule 1 for Internet Cafs which is perhaps not surprising since such establishments did

    not exist when the legislation commenced in 1994. The Member described the use of an Internet Caf as the hire, in

    situ, of computers to either give access to the internet, email or otherwise to use the available programs to process

    information or play games. (In situ means in its situation or position.)

    Schedule 1 contained only two uses that appeared relevant: Equipment Hire Shops or Games and Hobby Shops.

    GAMES AND HOBBY SHOPS

    The Member held that even if the listing could be read as a game shop or a hobby shop, the term game shop meant

    a shop selling games. It did not cover, for example, a site such as a pinball arcade which hired out the use of games

    machines. It followed that the listing did not cover an Internet Caf.

    EQUIPMENT HIRE SHOPS

    The Member considered that this listing required a taking away of goods and not a hiring of computer equipment.

    An Internet Caf could best be described as the hire of the use of the machine rather than the hire of the machine

    itself.

    Definition of a Retail Shop

    1 TURKSLEGAL

    by Paul Anderson | October 2006

  • There were four other listings that specically referred to a hiring, namely bridal wear sales and hire shops; costume

    and formal wear hire shops; television, video equipment and other domestic appliances hire shops; and video tape

    and music libraries.

    None of the above listings could possibly involve a use on the premises of the goods hired. For that reason, an

    equipment hire shop was also limited to equipment which is truly packed up and taken away.

    The Member found support for this approach by comparing the situation with a laundromat which is not a listing in

    Schedule 1. In the case of a laundromat there is traded a temporary right of access to a machine for it to carry out

    its functions. This was similar to the situation with an Internet Caf and only strengthens the Members view that an

    equipment hire shop required the taking away of hired items.

    The result was that an Internet Caf was not a Retail Shop and the Tribunal had no jurisdiction to hear the dispute.

    Fine Distinctions

    The Member highlighted how arbitrary the inclusion of a use can be in the denition. For example, the Member

    pointed out the bridal wear sales and hire shops applied to sales as well as to hires but costumes and formal wear hire

    shops were limited to hires. It is difcult to see the logic or the rationale for the distinction.

    The Member also referred to a previous decision of Justice Young in Chathay Developments Pty Limited v Laser

    Entertainment Pty Limited 1998 where a video tape library was held to fall within the Schedule but a shop that sold

    video tapes did not.

    Conclusion

    A layman would probably regard an Internet Caf as a Retail Shop. Certainly, Parliament thought so because shortly

    after this decision it amended the Schedule to included Internet Cafs.

    Many of the ne distinctions referred to in the case could be avoided if there was a general denition of a retail shop,

    e.g. premises from which goods and/or services are provided by retail to the public. There could be a listing of any

    exclusions or exceptions which Parliament has decided upon for policy reasons. It would then be left to the courts

    to determine in each case whether the use of the premises was a Retail Shop. In discharging this function, the courts

    would need to bear in mind the purpose of the legislation, namely to provide additional protection to tenants of

    premises providing retail goods and/or services to the public.

    A general denition avoids the arduous task of going through some 150 uses in order to determine whether a

    particular lease is covered by the legislation. A general denition has the added advantage that if new types of stores

    emerged with technological change, e.g. an Internet Caf, such a new type of store may still come within the general

    denition without the necessity to add it to the Schedule by amendment.

    2 TURKSLEGAL

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