What is a retail premises

Another Victorian Civil & Administrative Tribunal (Tribunal) decision was recently handed down that widens the scope of what is a ‘retail premises’ under the Victorian Retail Leases Act 2003.

In NSW, the definition of a retail premises is limited to those premises that “are used, or proposed to be used, wholly or predominantly for the carrying on of one or more of the businesses prescribed for the purposes of this paragraph” or “are used, or proposed to be used, for the carrying on of any business in a retail shopping centre”: section 3, Retail Leases Act 1994 (Act). Helpfully, Schedule 1 of the Act lists those businesses that are taken to be “prescribed for the purposes of this paragraph”. While this seems a very protracted definition, it promotes a great deal of certainty by prescribing what is a retail premises. Any business not on the list is simply not a retail premises and therefore not governed by the Act.

In Victoria, there are two limbs to the definition of retail premises; only one of which needs to be satisfied in order to amount to a retail premises. The first is similar to NSW, the second element provides that a retail premises is premises that are used wholly or predominantly for the sale or hire of goods by retail or the retail provision of services. There is no definition of ‘premises’. This second element has generated a great deal of uncertainty.

In Phillips v Abel [2019], the tenant argued it did not have to pay certain outgoings levied by the landlord because the landlord had not complied with its obligations relating to the provision of a statement of outgoings. The landlord argued that the Act did not apply because there was no retail shop operating on the land. The dispute made its way to the Tribunal to determine if the land was a retail premises for the purpose of the Act.

The tenant operated a sand quarry from the land, extracting sand, clay, gravel from the land and selling it to customers who then went on to use the material to make concrete, tiles or building blocks. It was essentially vacant land. The Tribunal applied the ‘ultimate consumer test’ from its 2017 decision of IMCC Group (Australia) Pty Ltd v CB Cold Storage Pty Ltd. Relevant factors include a consideration of who is the ‘end-user’ of the goods or services, is a fee paid for the goods or services, can anyone acquire these goods or services for a fee and did the tenant’s customers pass these goods or services on to anyone else? The lease was found to be a lease of retail premises because its business amounted to a retail provision of goods and services.

The interesting take-away point from this decision and the IMCC decision is that it is unnecessary to have a shop, building or other structure erected on the land in order to constitute a retail ‘premises’. The focus is on what the tenant actually does on the land, not the nature and character of the land itself. The other important thing to note is that a lease of premises that would traditionally have been excluded from the operation of the Act may now fall within its reach.

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