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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<ul><li><p>A recent decision of the Administrative Decisions Tribunal of New South Wales has highlighted the arbitrary </p><p>distinctions that can arise in relation to the denition of a Retail Shop under the Retail Leases Act 1994.</p><p>In Kwon v Kim, Judicial Member Fox had to determine if the Tribunal had jurisdiction to deal with a claim for damages </p><p>for failure to repair under a lease which permitted the premises to be used as an Internet Caf.</p><p>Legislation</p><p>Retail Shop is dened in Section 3 of the Act as premises that are used wholly or predominantly for the carrying on </p><p>of one or more of the businesses specied in Schedule 1 (whether or not in a retail shopping centre).</p><p>If the premises are not a Retail Shop, the occupancy cannot be the subject of a Retail Shop Lease and the Tribunal </p><p>would have no jurisdiction.</p><p>Schedule 1 lists 134 descriptions of shops, some of which are given in multiples, so that more than 150 separate and </p><p>distinct uses are named. This is in contrast to Parliaments usual approach of dening concepts in general terms </p><p>rather than trying to list particular examples.</p><p>There was no listing in Schedule 1 for Internet Cafs which is perhaps not surprising since such establishments did </p><p>not exist when the legislation commenced in 1994. The Member described the use of an Internet Caf as the hire, in </p><p>situ, of computers to either give access to the internet, email or otherwise to use the available programs to process </p><p>information or play games. (In situ means in its situation or position.)</p><p>Schedule 1 contained only two uses that appeared relevant: Equipment Hire Shops or Games and Hobby Shops.</p><p>GAMES AND HOBBY SHOPS</p><p>The Member held that even if the listing could be read as a game shop or a hobby shop, the term game shop meant </p><p>a shop selling games. It did not cover, for example, a site such as a pinball arcade which hired out the use of games </p><p>machines. It followed that the listing did not cover an Internet Caf.</p><p>EQUIPMENT HIRE SHOPS</p><p>The Member considered that this listing required a taking away of goods and not a hiring of computer equipment. </p><p>An Internet Caf could best be described as the hire of the use of the machine rather than the hire of the machine </p><p>itself.</p><p>Definition of a Retail Shop</p><p>1 TURKSLEGAL</p><p>by Paul Anderson | October 2006</p></li><li><p>There were four other listings that specically referred to a hiring, namely bridal wear sales and hire shops; costume </p><p>and formal wear hire shops; television, video equipment and other domestic appliances hire shops; and video tape </p><p>and music libraries.</p><p>None of the above listings could possibly involve a use on the premises of the goods hired. For that reason, an </p><p>equipment hire shop was also limited to equipment which is truly packed up and taken away.</p><p>The Member found support for this approach by comparing the situation with a laundromat which is not a listing in </p><p>Schedule 1. In the case of a laundromat there is traded a temporary right of access to a machine for it to carry out </p><p>its functions. This was similar to the situation with an Internet Caf and only strengthens the Members view that an </p><p>equipment hire shop required the taking away of hired items.</p><p>The result was that an Internet Caf was not a Retail Shop and the Tribunal had no jurisdiction to hear the dispute.</p><p>Fine Distinctions</p><p>The Member highlighted how arbitrary the inclusion of a use can be in the denition. For example, the Member </p><p>pointed out the bridal wear sales and hire shops applied to sales as well as to hires but costumes and formal wear hire </p><p>shops were limited to hires. It is difcult to see the logic or the rationale for the distinction.</p><p>The Member also referred to a previous decision of Justice Young in Chathay Developments Pty Limited v Laser </p><p>Entertainment Pty Limited 1998 where a video tape library was held to fall within the Schedule but a shop that sold </p><p>video tapes did not.</p><p>Conclusion</p><p>A layman would probably regard an Internet Caf as a Retail Shop. Certainly, Parliament thought so because shortly </p><p>after this decision it amended the Schedule to included Internet Cafs. </p><p>Many of the ne distinctions referred to in the case could be avoided if there was a general denition of a retail shop, </p><p>e.g. premises from which goods and/or services are provided by retail to the public. There could be a listing of any </p><p>exclusions or exceptions which Parliament has decided upon for policy reasons. It would then be left to the courts </p><p>to determine in each case whether the use of the premises was a Retail Shop. In discharging this function, the courts </p><p>would need to bear in mind the purpose of the legislation, namely to provide additional protection to tenants of </p><p>premises providing retail goods and/or services to the public.</p><p>A general denition avoids the arduous task of going through some 150 uses in order to determine whether a </p><p>particular lease is covered by the legislation. A general denition has the added advantage that if new types of stores </p><p>emerged with technological change, e.g. an Internet Caf, such a new type of store may still come within the general </p><p>denition without the necessity to add it to the Schedule by amendment.</p><p>2 TURKSLEGAL</p></li><li><p>For More Information Please Contact:</p><p>Paul AndersonPartnerT: 02 8257 5742 paul.anderson@turkslegal.com.au</p><p>Sydney | Level 29, Angel Place, 123 Pitt Street, Sydney, NSW 2000 | T: 02 8257 5700 | F: 02 9239 0922</p><p>Melbourne | Level 10 (North Tower) 459 Collins St, Melbourne VIC 3000 | T: 03 8600 5000 | F: 03 8600 5099</p><p>Business &amp; Property | Commercial Disputes &amp; Insolvency | Insurance &amp; Financial Services </p><p>Workers Compensation | Workplace Relations</p><p>www.turkslegal.com.au</p><p>This Turk Aler t i s current at i ts date of publ icat ion. Whi le ever y care has been tak en in the preparat ion of this Turk Aler t i t does not const i tute legal advice and should not be re l ied upon for this purpose. Speci f ic legal advice should be sought on par t icular matters . TurksLegal does not accept responsibi l i t y for any errors in or omiss ions f rom this TurkAler t . This TurkAler t i s copyr ight and no par t may be reproduced in any form without the permiss ion of TurksLegal . For any enquir ies, p lease contac t the author of th is TurkAler t .</p></li></ul>