What is a ‘retail tenancy dispute’? Navigating the statutory regime

Disputes regarding retail tenancies are typically the exclusive province of the Victorian Civil and Administrative Tribunal (‘VCAT’), with jurisdiction being conferred by the Retail Leases Act 2003 (Vic) (the ‘RLA’). Nonetheless, the Supreme Court of Victoria in the recent case of AMJE Pty Ltd v Mobil Oil Australia Pty Ltd[1] held that the Court possesses jurisdiction in circumstances where, turning on a point of statutory interpretation, the plaintiff had made a claim that was not in fact a ‘retail tenancy dispute’ in the strict sense.

The facts

The plaintiff was registered proprietor of land comprising a petrol station in Niddrie, Victoria. The plaintiff was a successor to the original lessor, the lease having commenced some three years prior.

The defendant was at all times the tenant and, during the term of the lease, was a subsidiary of a foreign listed entity. This fact was relevant to the nature of the lease insofar as the application of the RLA was concerned.

The duration of the lease was 15 years, with two options to renew at 5 years apiece. The parties elected not to renew the lease, and instead by further written agreement resolved that the defendant would continue to occupy the premises for the purposes of undertaking ‘remediation’ works pursuant to the terms of the lease prior to a new tenant taking over (the ‘remediation agreement’). The task of remediation was to include cleaning of the premises to ensure they were free from contamination.

In May last year, the plaintiff alleged the defendant had not obtained necessary environmental audit sign-offs for the remediation work and commenced proceedings in the Supreme Court seeking specific performance and damages.

The defendant applied to the Court for summary dismissal or stay of the plaintiff’s claim on the basis the Court lacked jurisdiction. The defendant reasoned that the parties’ dispute was a ‘retail tenancy dispute’ under section 81 of the RLA, and that because section 89(1) empowers VCAT ‘to hear and determination an application … seeking resolution of a retail tenancy dispute’ and because section 89(4) excludes the Supreme Court’s jurisdiction (subject to a few exceptions), the plaintiff’s claim could not proceed in the Supreme Court.

The Court’s reasoning

The defendant’s application was heard before Derham AsJ, who articulated the questions for determination as follows:

  1. Were the premises which were subject to the lease between the parties ‘retail premises’ for the purposes of the RLA?
  2. If the premises were ‘retail premises’, were they captured by any exclusion under the RLA?
  3. Was the dispute between the parties a ‘retail tenancy dispute’ such that the dispute resolution provisions of the RLA applied?

As the defendant had sought summary dismissal of the proceeding, his Honour considered first the relevant test under section 62 of the Civil Procedure Act 2010 (Vic). Consistent with established principles, his Honour held that the power to summarily dismiss a proceeding ought be exercised with caution and that:

‘The power to summarily determine a proceeding will be exercised when it is particularly clear or the Court has a high degree of certainty about the ultimate outcome of the proceeding, namely that it is untenable’.[2]

Whether or not the plaintiff’s claim was in this case ‘untenable’ hinged in large part on an issue of statutory interpretation, namely whether the parties’ dispute was a ‘retail tenancy dispute’ for the purposes of the RLA and the application of VCAT’s exclusive jurisdiction. To qualify as such, it needed first to be shown that the premises in question were ‘retail premises’.

Were the premises ‘retail premises’?

The expression ‘retail premises’ is defined in section 4 of the RLA in a manner that first describes what retail premises are and then sets out exclusions to that definition.

Derham AsJ considered that the defendant’s continued occupancy of the premises pursuant to the remediation agreement was not for retail purposes but instead ‘for the purposes of undertaking remediation’.[3] His Honour considered this to be the ‘natural and ordinary meaning of the terms of the [remediation agreement]’,[4] comprising a letter from the plaintiff to the defendant and subsequent correspondence between the parties, when read in light of the terms of the lease.

His Honour held that although the remediation agreement effectively extended the lease to a periodic tenancy, the purpose for which the lease was extended was for remediation of the premises rather than the ongoing operation of the premises on a retail basis. His Honour, in paraphrasing the section 4 definition of ‘retail premises’, considered that the premises ‘were not to be used wholly or predominantly for the sale or hire of goods by retail or the retail provision of services’.[5]

The defendant’s corporate status

Within the definition of ‘retail premises’ in section 4 of RLA, section 4(2)(d) excludes from that definition premises where the tenant is:

‘(i) a body corporate whose securities are listed on a stock exchange, outside Australia and the external territories, that is a member of the World Federation of Exchanges; or
(ii) a subsidiary (as defined in section 9 of the Corporations Act) of such a body corporate …’

During the term of the lease, the defendant was a subsidiary of a foreign listed entity. At a point in time after commencement of the remediation agreement, the defendant ceased to be the subsidiary of a foreign listed entity due to changes in its corporate holding structure and the stock exchange on which shares were listed. As a consequence, the premises the defendant occupied were liable to escape the exclusion from the definition of ‘retail premises’ in section 4(2)(d) of the RLA, hence qualifying as retail premises and therefore becoming subject to VCAT’s jurisdiction.

On this point, the Court held that what mattered was that the plaintiff’s claim for specific performance of the remediation agreement had been brought pursuant to the original lease, being a ‘former lease’ for the purposes of application of the dispute resolution clauses in Part 10 of the RLA; section 83 in that Part states that the dispute resolution provisions apply to both current and former leases.

Returning to the test for summary dismissal under the Civil Procedure Act, his Honour went on to hold:

‘There is, therefore, a real prospect of the plaintiff establishing that the disputes arising in this proceeding are not within the meaning of retail tenancy dispute as that term is defined in s 81 of the RLA. It is only after the expiration of the Lease that the defendant ceased to be a subsidiary of a foreign listed entity’.[6]

His Honour held, then, that the plaintiff's claim ought not be summarily dismissed in circumstances where the plaintiff's argument about the application of the Supreme Court's jurisdiction had merit. 

A point about statutory interpretation

A point of significance arising in this case centred around statutory interpretation and the often-seen statutory expression ‘despite anything to the contrary in this Act’. That expression caps the definition of ‘retail tenancy dispute’ in section 81(1).

In the present case, the petrol station premises had fallen foul of the definition of ‘retail premises’ because of the nature of what had been carried on at the premises during the course of the remediation agreement and because of the corporate identity of the defendant. Nonetheless, the defendant argued, in an effort to bring the plaintiff’s claim within the RLA, that the effect of the ‘despite anything to the contrary’ expression was to exclude the meaning otherwise given to the expression ‘retail premises’ in section 4 of the RLA.

Responding to this point, Derham AsJ held that:

‘Although this argument is not devoid of merit, it gives too much work to do to that expression [that is, the expression “despite anything to the contrary in this Act”] and flies in the face of a defined meaning which is not expressed to be subject to exceptions’.[7]

Conclusion

The decision in AMJE Pty Ltd v Mobil Oil Australia Pty Ltd is noteworthy for the way it navigates some of the key dispute resolution provisions of the RLA while providing a useful example of the application of principles of statutory interpretation.

In its decision, the Court explored the dispute resolution provisions of the RLA as well as definitions of the expressions ‘retail premises’ and ‘retail tenancy dispute’ and, in the context of an application for summary dismissal for want of jurisdiction, reached a conclusion that ultimately afforded a party the right to pursue its claim in a superior court.


[1]: [2016] VSC 777.

[2]: Ibid [80].

[3]: Ibid [87].

[4]: Ibid [88].

[5]: Ibid [89].

[6]: Ibid [107].

[7]: Ibid [111(e)]. In reaching this view, his Honour distinguished the earlier decision in State of Victoria v Tymbook Pty Ltd [2005] VSC 267 and held that the case was not authority for the proposition that the 'despite anything to the contrary' phrase could exclude the section 4 definition of 'retail premises'.