A Broad Approach to the Definition of a Retail Premises
The Retail Leases Act 2003 (Vic) (“Act”) governs retail leases in Victoria. To determine the application of the Act, consideration must be given to whether a lease constitutes a retail lease pursuant to its provisions. To do so, the Act’s definition of Retail Premises must be read in conjunction with relevant cases.
In the recent decision of CB Cold Storage Pty Ltd v IMCC Group (Australian) Pty Ltd VCAT 1866, VCAT held that a lease where the tenant operated a business supplying logistics and cold storage was not governed by the Act as it did not fall within the scope of a “retail lease”. However, this decision was subsequently appealed by the Tenant and heard in the Supreme Court of Victoria where the Court found that the premises was a retail premises, and therefore governed by the Act. The Landlord appealed the Supreme Court decision, which was dismissed by the Court of Appeal.
This case demonstrates the broad application of the Act in regard to the scope of what may constitute a retail premises.
In determining whether the premises leased by CB Cold Storage Pty Ltd (“CB Cold Storage”) fell within the scope of a retail premises pursuant to the Act, the Court examined the application of the “ultimate consumer test” where consideration is given to whether the provision of goods and services are provided to an ultimate consumer. Ultimately, it was held by the Court that CB Cold Storage was providing services to an ultimate consumer and therefore, the leased premises constituted a retail premises, despite CB Cold Storage providing services to businesses rather than individuals.
Parties to, or considering entering into, a lease of a retail or commercial nature, should consider the application of the Act as it may apply to leases previously considered outside its scope. Such leases may include premises supplying goods or services business to business, provided the goods or services supplied are used as an input into the other business and not on supplied.
If you are unsure of the application of the Act to your lease or wish to discuss further, please call Tom White, Managing Principal and Head of Corporate & Commercial or Harriet Burton, Lawyer, Corporate & Commercial on 03 5273 5263.