In brief – Unsigned occupancy agreement for stall holder held to be a retail shop lease

In the recent case of Sydney Markets Limited v Wilson, the NSW Court of Appeal found that stall holders had made their space indistinguishable from a retail shop, making them eligible for all the protections of the Retail Leases Act.

Change in days when stall holder should occupy market stall

The case of Sydney Markets Ltd v Wilson [2011] NSWCA 201 concerned the occupation of three adjacent stalls, stalls 234, 235 and 236 at Sydney's Paddy's Markets. Pursuant to an unsigned occupancy agreement, the stall holder occupied the stalls on a part time basis a few days per week.

When Sydney Markets decided to change the days on which the stall holder should occupy the stalls, the stall holder decided to examine whether the occupancy agreement was in fact a regulated retail shop lease under the Retail Leases Act 1994, thereby affording various protections to the stall holder.

Stall holder in long-term occupancy with fixed signage and furnishings

The use the stall holder was putting the three stalls to was wholly or predominantly as a gift shop for gifts and stationery, which were businesses specified in Schedule 1 to the Act and accordingly, retail uses.

Mr Wilson had occupied the three stands since 1997. He had not signed the occupancy agreement submitted to him in 2003, but it was common ground that the terms of the proposed occupancy agreement had regulated the relationship between the parties.

Mr Wilson occupied the stands on the times and days allotted to him, which was between the hours of 9am to 5pm each Thursday, Friday, Saturday and Sunday.

The stall was equipped and furnished with signage, cupboards, display cabinets and counters. When not using and occupying the stalls, the stall holder had left the furnishings in place with the express or implied consent of Sydney Markets.

Dispute over Wednesday trading proposal requiring stall holder to vacate stalls

A dispute broke out as to whether Sydney Markets could introduce Wednesday trading by others, requiring Mr Wilson to vacate stalls 234, 235 and 236 on Wednesdays.

If the unsigned occupancy agreement was a regulated retail shop lease under the Retail Leases Act, it would import all of the provisions of that Act, including section 61 of the Retail Leases Act, which provided that the landlord is not entitled to change the core trading hours of the retail shopping centre of which the shop forms part, except with the approval in writing of the tenants of a majority of the retail shops in the shopping centre.

Were the three market stalls a retail shop lease?

In the Administrative Decisions Tribunal and before the Appeal Panel of the Administrative Decisions Tribunal and before the New South Wales Court of Appeal, there were arguments as to whether this unsigned occupancy agreement for the three stands would be a retail shop lease within the meaning of the Act.

One argument which caused a lot of difficulty was whether the stall holder's stand was in fact used for one of the retail shop businesses in Schedule 1, or in the alternative, was the whole of the Sydney Markets taken to be a retail shopping centre and therefore, if there were at least five retail shop businesses, then all the other businesses which were under 1,000 square metres could also be regulated by the Act.

Occupation agreement granted a right of occupation over "premises"

To answer the last question first, in deciding whether Paddy's Markets was a retail shopping centre, it was held that it was not a retail shopping centre as defined in section 3 of the Act, but merely a cluster of premises that were not promoted or generally regarded as constituting a shopping centre, a shopping mall, a shopping court or a shopping arcade. They were in fact a cluster of stalls regarded purely as a market.

The court decided that the use of the stall was gifts and stationery, both of which were in the schedule 1 list of uses and so if the stall could be the subject of "premises", then it may be regulated by the Act.

The court held that the stalls were not a shop as they were not a built structure based on the character of permanence. However, because the occupation agreement granted a right of occupation for the purpose of a gift shop, that right of occupation was over "premises".

"Shop premises" do not need to be an actual shop

The NSW Court of Appeal determined that shop premises do not need to be strictly an actual shop in the ordinary meaning of that word. The court relied on a clear line of authority from many past cases that the word "premises" cannot mean just vacant land, but must be something more, such as a building or part of a building or similar structure.

Market stalls constitute a retail shop under the Retail Leases Act

The judges found from looking at various cases and past authorities that the word "premises" in the Retail Leases Act should not be given a restrictive meaning and that a stall was an area within a building which was intended and in fact was used for the sale of goods by "retail shop" premises.

The stall holders had erected display cases, counters and signage and rendered the space indistinguishable from a retail shop. The intention of the parties for a shop for retail was in accordance with the occupancy agreement and so did constitute a retail shop within the meaning of the Retail Leases Act.

This case is authority for an unsigned occupancy agreement for a stall holder in a market being held to be a retail shop lease and regulated by the Retail Leases Act.

Caterer’s licence agreement found to be a retail lease

In another interesting recent decision of the NSW Appeal Panel of the Administrative Decisions Tribunal, a caterer's licence agreement for a period of only one year to provide food service from a kitchen and a servery inside a club premises was found to be a retail shop lease for the purposes of the Retail Leases Act.

The premises in that case were held to be the use of the servery area and the kitchen for the purposes of carrying on a café or restaurant type usage. (For more information about this case, please see our recent article Unexpected leasing liabilities flow from rights to work in parts of premises.)

This article is an excerpt from Gary Newton’s new book, Annotated Conveyancing & Real Property Legislation New South Wales 2012-2013 edition, co-authored with Peter Young and Anthony Cahill.