Targeted Property Investments Pty Ltd v Look Up Technologies Pty Ltd (No 2)

1. [1]

   The applicant seeks leave to appeal from a decision dated 7 October 2022 of the Appeal Panel of the NSW Civil and Administrative Tribunal (NCAT). The proposed appeal relates to the applicant’s claim that the NCAT lacked jurisdiction to entertain the parties’ substantive dispute, which relates to a lease agreement executed on or about 18 April 2014 and which commenced on 18 April 2014 in respect of premises in Rockdale.

2. [2]

   The parties were agreed that the application for leave to appeal and any consequential appeal should be heard together.

3. [3]

   On 19 February 2022, the now respondent (the lessee) applied to the Consumer and Commercial Division of the NCAT claiming that the applicant lessor had improperly terminated the lease and re-entered the premises. Under s 72(4) of the Retail Leases Act 1994 (NSW), the lessee sought interim relief against forfeiture and repossession of the premises. The application for final relief sought a money order and a work order in respect of the lessor’s alleged failure to repair the roof of the premises. It is unnecessary to describe the lessee’s other claims for final relief.

4. [4]

   In opposing the lessee’s application for interim relief, the lessor challenged the NCAT’s jurisdiction, claiming that the lease was not regulated by the Retail Leases Act. The NCAT addressed the challenge to jurisdiction before hearing the substantive dispute. On 22 March 2022, ex parte orders in summary form were made on the interim relief application (requiring, inter alia, that the lessor not interfere with the lessee’s quiet enjoyment). These orders continued until 5PM on 8 April 2022, on which day a further hearing was scheduled. On 8 April 2022, directions were made in summary form scheduling the issue of jurisdiction to be determined at the next hearing and continuing the interim orders. On 4 May 2022, a further hearing took place before the NCAT regarding its jurisdiction. In opposing the interim orders and challenging the NCAT’s jurisdiction, the lessor filed written outlines of submissions dated 6 April 2022, 22 April 2022 and post-hearing submissions dated 11 May 2022. The lessor’s principal contention was that the NCAT lacked jurisdiction because the lease was not a retail lease.

5. [5]

   The lessee filed written submissions on 1 April 2022, 13 April 2022 and submissions in reply on 13 May 2022.

6. [6]

   In a decision published on 29 June 2022, the NCAT dismissed the challenge to jurisdiction (see Look Up Technologies PL v Targeted Property Investments PL (NSW Civil and Administrative Tribunal, Senior Member Burton SC, 29 June 2022, unrep)). The NCAT also granted interim relief again restraining the lessor from interfering with the lessee’s quiet enjoyment of the premises.

7. [7]

   By a notice of (internal) appeal filed on 27 July 2022, the lessor both sought leave to appeal and appealed from the NCAT’s decision, both in respect of jurisdiction and the grant of interim relief. On 7 October 2022, the Appeal Panel dismissed the appeal on both these matters (see Targeted Property Investments Pty Ltd v Look Up Technologies Pty Ltd [2022] NSWCATAP 318) (Appeal Panel’s decision). I will return below to summarise the Panel’s reasons.

Supreme Court proceedings

1. [8]

   By a summons filed in this Court on 12 October 2022, the applicant seeks leave to appeal against the Appeal Panel’s decision on jurisdiction. It also seeks urgent relief, including a stay of the Appeal Panel’s decision on jurisdiction. The proceedings in this Court had some urgency because the hearing of the parties’ substantive dispute was listed to commence in the NCAT on 18 October 2022 (with an estimate of 2 days). The application for urgent relief was heard and determined by Hamill J on 14 October 2022. His Honour refused to stay the Appeal Panel’s decision and refused the lessor’s application to vacate the NCAT hearing (see Targeted Property Investments Pty Ltd v Look Up Technologies Pty Ltd [2022] NSWSC 1465).

2. [9]

   The hearing of the substantive dispute in the NCAT proceeded on 18 and 19 October 2022 and the decision is presently reserved.

3. [10]

   This history of the proceedings is relevant to the issue of leave to appeal in this Court.

4. [11]

   The lessor’s summons in this Court raises the following proposed grounds of appeal in relation to the Appeal Panel’s decision (without alteration):

   1. (1)

      The Appeal Panel erred in law at D[65] in concluding that it was open to the Senior Member to make the following findings of facts which were made in the absence of evidence supporting such findings:

   2. (2)

      The Appeal Panel erred in law at D[67] that the area of the Property which the Defendant had sub-leased appeared to be less than fifty percent of the total leased area as it was made in the absence of evidence supporting such a finding.

   3. (3)

      The Appeal Panel erred in law in failing to find that the Defendant had not established that the Tribunal had jurisdiction to determine the First Instance Proceedings.

   4. (4)

      The Appeal Panel erred in law in failing to uphold the appeal from the decision of Senior Member Burton SC.

5. [12]

   Given the requirements of s 83 of the Civil and Administrative Tribunal Act 2013 (NSW) (CAT Act), an important issue is whether the applicant has identified a question of law for the purposes of this appeal.

6. [13]

   Prior to the hearing in this Court, the parties were invited to make oral submissions on the need to identify a question of law, with particular reference to the recent decision of the Court of Appeal in Thomaz and Naaz Pty Ltd v Chief Commissioner of State Revenue [2023] NSWCA 40 at [31]–[32] (and the cases referred to therein) per Leeming JA (with whom Meagher JA and Griffiths AJA agreed). This invitation was made in circumstances where the applicant’s summons stated four grounds of appeal (see at [11] above) without any attempt to formulate any question(s) of law to which those proposed grounds of appeal related.

7. [14]

   Before summarising the Appeal Panel’s reasons for rejecting the challenge to jurisdiction, it is desirable to outline the statutory framework.

Statutory framework summarised

1. [15]

   As is made clear in the long title to the Retail Leases Act, the Act makes provision “with respect to the leasing of certain retail shops and the rights and obligations of lessors and lessees of those shops” (and for other purposes).

2. [16]

   Part 8 concerns dispute resolution. Section 71 deals with the lodging of retail tenancy claims with the NCAT. It provides:

3. [17]

   A “retail tenancy claim” is defined in s 70 and includes a claim in connection with a liability or obligation with which a retail tenancy dispute is concerned.

4. [18]

   A “retail tenancy dispute” is defined in s 63 as meaning:

5. [19]

   The notion of a “retail shop lease” is central to the operation of s 71 (as well as other provisions). It is defined in s 3 as follows:

6. [20]

   Reference must also be made to the definition of “retail shop”, having regard to the fact that the definition of “lease” involves the relevant premises having the purpose of use as a retail shop. The definition of “retail shop” in s 3 is as follows:

7. [21]

   Note 2 of the definition refers to cl 17 of the Sch 3 of the Act. That clause provides that, until regulations are made for the purposes of para (a) of the definition of “retail shop” in s 3, businesses specified in Sch 1 of the Retail Leases Act are taken to be prescribed for that purposes. It may be interpolated that the lease here identified the “permitted use” in Item 13 of Annexure A as “Retail and general offices for computers and associated products” in printed text and “Repairs, General offices, Storage and warehousing of computers and associated products” in handwritten annotations. (It is unnecessary to refer to the Retail Leases Regulation 2022 (NSW), which commenced operation on 1 January 2023, as neither party suggested it was relevant in the circumstances of this case).

8. [22]

   The lessee relied upon the following businesses prescribed in Sch 1 in support of its argument before the NCAT at first instance that the lease was a retail shop:

9. [23]

   The NCAT’s powers relating to retail tenancy claims are set out in s 72 of the Retail Leases Act and include a power to make an order for the payment of money by way of debt, damages or restitution or refund, and a power to grant relief against forfeiture. The NCAT also has the power to make an interim order pending a final determination of a claim.

10. [24]

    There is a monetary limit on the NCAT’s jurisdiction, as set out in s 73.

11. [25]

    Various provisions deal with the relationship between court proceedings and the NCAT where there is a retail tenancy dispute. The NCAT’s jurisdiction in relation to such matters is effectively given paramountcy by the operation of ss 75 and 76. The effect of s 75(1) is that, where civil proceedings are pending in a court and involve a retail tenancy dispute, the court must on application of any party transfer the whole or the relevant part of the proceedings to the NCAT to be dealt with as a claim under Pt 8 Div 3 of the Act if the court is satisfied of the circumstances set out therein. Sub-section 75(2) explicitly states that, when a court determines whether or not it is appropriate that a matter be dealt with by the NCAT, regard must be had “to the general principle that retail tenancy disputes should be dealt with by the Tribunal rather than by a court”. Sub-section 75(5) makes plain that this provision does not apply to proceedings by way of an appeal. The paramountcy of the NCAT’s jurisdiction in relation to retail tenancy claims is further underlined by s 76, which deals with the subject of a jurisdictional overlap between claims lodged in the NCAT and a civil proceeding before a court.

12. [26]

    Finally, it is relevant to note the explicit direction given in s 78 regarding the interpretation of the Retail Leases Act, the effect of which is to oblige a court (as defined in s 63 and includes a tribunal) to have regard “to accepted practices and interpretations within the industry concerning the leasing of retail shops”.

Appeal Panel’s reasons summarised

1. [27]

   It is common ground that the NCAT’s jurisdiction in this matter depends upon whether there is a lease with respect to a “retail shop”, as defined in the Retail Leases Act. As noted, s 71 of that Act permits a party or former party to a retail shop lease to lodge a retail tenancy claim in respect of such a lease for determination by the NCAT.

2. [28]

   In dismissing the lessor’s appeal, the Appeal Panel noted at [58] that the NCAT’s jurisdiction depended upon findings of fact that the lessee was a party to a retail lease. The Appeal Panel then turned its attention to the findings of fact made by the NCAT at first instance and the evidence supporting those facts. It made particular reference at [60] to the following NCAT findings in concluding that it had jurisdiction (noting that the internal paragraph cross-references are to NCAT’s decision at first instance):

3. [29]

   The Appeal Panel rejected the lessor’s submission that there was insufficient evidence to establish the existence of a shop at which sales occurred. It found at [62] that the three witness statements by the lessee’s chief executive officer (Mr Peter Kantarelis), which it summarised at [62] to [64], were sufficient to justify the NCAT’s findings of fact in support of its conclusion that the premises involved a shop at which retail sales occurred.

4. [30]

   The Appeal Panel also rejected the lessor’s contention that the NCAT had erred in not taking into account the fact that a portion of the premises was regarded by Mr Kantarelis as surplus to requirements and had been sublet. The Appeal Panel reasoned at [67] that, even if it were assumed that this area constituted a significant percentage of the leased area and was not used for retail shop purposes, the area appeared to be less than 50% of the total leased area. It concluded at [67] that “[t]he presence of a surplus area and a subleased area does not conflict with the findings of fact made by the Tribunal or its conclusion that the premises were being used as a retail shop within the meaning of the RL Act”.

5. [31]

   The Appeal Panel did not refer to the fact that, when the lease was executed in April 2014, the lessor provided a Disclosure Statement as required by Sch 2 of the Retail Leases Act. As will be developed below, the provision of the Disclosure Statement suggests that, at least when the lease was executed in 2014 and the Disclosure Statement was made, the parties (including the then lessor) considered the lease to be a retail shop lease.

The significance of s 83(1) of the CAT Act and the need to identify a question of law

1. [32]

   Section 83 of the CAT Act relevantly provides as follows:

2. [33]

   There are several important points to make about this provision:

   1. (1)

      There is no appeal to this Court from a decision of the Appeal Panel as of right. The applicant must persuade the Court that leave should be granted.

   2. (2)

      An appeal is limited to “an appeal on a question of law”.

   3. (3)

      As was recently emphasised in Thomas and Naaz at [32], “it is not sufficient merely to assert that the Tribunal erred in law in order to satisfy the limited conferral of jurisdiction”. (To similar effect, see Ferella v Chief Commissioner of State Revenue [2014] NSWCA 378; (2014) 96 ATR 875 at [6] and [22]; and Schwartz Family Co Pty Ltd v Capitol Carpets Pty Ltd [2017] NSWCA 223 at [13]). Accordingly, it is well-settled that a challenge which is wholly or partly factual cannot be converted into a question of law merely by asserting that a question of law is involved or merely by asserting error itself.

   4. (4)

      What constitutes a question of law is “vexed and context dependent” in the sense that the distinction between matters of fact and of law may turn on the circumstances in which the question arises (see Thomas and Naaz at [52] and Da Costa v The Queen (1968) 118 CLR 186 at 194; [1968] HCA 51).

   5. (5)

      Although there is no clear test of what constitutes a question of law for the purposes of s 83 of the CAT Act, it is important not to lose sight of the continuing binding authority in this State of the Court of Appeal’s decision (by majority) in Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139. Azzopardi stands for the proposition that a particular finding which is alleged to be “perverse” or “unreasonable” or “not reasonably open” is not ordinarily a question of law. At pp 155–156, Glass JA (with whom Samuels JA agreed, Kirby P dissenting) said:

   6. (6)

      Furthermore, at p 157, Glass JA said:

   7. (7)

      It is unnecessary to decide for the purposes of this appeal whether a “question of law” encompasses a mixed question of fact and law (see generally, at the federal level, the decisions of the Full Court of the Federal Court in Haritos v Commissioner of Taxation (2015) 233 FCR 315; [2015] FCAFC 92 and May v Military Rehabilitation and Compensation Commission (2015) 233 FCR 397; [2015] FCAFC 93 and contrast the position at the State level, which is reflected in cases such as Attorney-General for the State of New South Wales v X (2000) 49 NSWLR 653; [2000] NSWCA 199 at [44]; Orr v Cobar Management Pty Ltd (2020) 103 NSWLR 36; [2020] NSWCCA 220 at [60]; and Hanave Pty Ltd v Nomad Sydney Pty Ltd (formerly Wine Nomad Pty Ltd) [2023] NSWSC 265 at [45] per Chen J).

   8. (8)

      The existence of a question of law is not merely a qualifying condition to the statutory right of appeal; rather, the question of law alone is the subject matter of the appeal (see Osland v Secretary to the Department of Justice (No 2) (2010) 241 CLR 320; [2010] HCA 24 at [21] per French CJ, Gummow and Bell JJ and Davis v NSW Land and Housing Corporation [2016] NSWCA 325; (2016) 18 BPR 36,459 at [77] per McColl JA, with whom Meagher and Leeming JJA agreed).

   9. (9)

      Whether or not an appeal is on a question of law should be approached as a matter of substance and not merely form. As the Full Court of the Federal Court said in Haritos at [107], if, as a matter of substance, there exists a question of law, the Court has “a procedural discretion, to be exercised judicially and where it is in the interests of justice to do so, to direct its formal identification in an amended notice of appeal even where the question of law has not been identified before the primary judge”. It is notable that the Court there viewed this approach as consistent with that of the Court of Criminal Appeal in R v JS [2007] NSWCCA 272; (2007) 175 A Crim R 108 at [57]–[69] per Spigelman CJ (with whom Mason P, McClellan CJ at CL, Hidden and Howie JJ agreed). Where an appellant is unrepresented, it may be appropriate to adopt a more generous or benevolent approach in assessing whether the notice of appeal identifies a question of law (see, for example, Avetmiss Easy Pty Ltd v Australian Skills Qualifications Authority [2014] FCA 314 at [75]–[77] per Mortimer J, as approved in Haritos at [104] and see also Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [12]).

   10. (10)

       A s 83 appeal to this Court is confined to a decision of the Appeal Panel and does not extend to the NCAT at first instance (see Bronze Wing International Pty Ltd v Safework NSW [2017] NSWCA 41 at [10]).

3. [34]

   With the Court’s leave, after the hearing, the applicant provided the following formulation of the question of law the subject of the proposed appeal:

4. [35]

   This formulation appears adequately to identify a question of law, having regard to what Hayne, Heydon, Crennan and Kiefel JJ said in Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390; [2010] HCA 32 at [91].

Principles guiding the issue of leave

1. [36]

   The relevant core principles are well-settled. They were helpfully summarised by Gleeson JA (with whom Macfarlan and Payne JJA agreed) in Secretary, Department of Family and Community Services v Smith (2017) 95 NSWLR 597; [2017] NSWCA 206 at [28]:

2. [37]

   Other helpful guidance is provided by the observations of Basten JA (with whom Tobias AJA agreed) in Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [32]–[37]:

3. [38]

   An applicant for leave under s 83 must demonstrate something more than that the impugned decision of the Appeal Panel is arguably wrong. Ordinarily, leave will only be granted where there is a matter that involves an issue of principle, a question of general public importance or an injustice which is reasonably clear in the sense of going beyond what is merely arguable.

4. [39]

   Where leave is sought in order to challenge an interlocutory decision, it is relevant to take into account the fact that it is an interlocutory, as opposed to a final, decision, and to consider whether the grant of leave will unduly disrupt the orderly despatch of the NCAT’s business (see Grygiel v Baine [2005] NSWCA 218 at [78] per Basten JA, with whom Mason P agreed).

5. [40]

   I am satisfied that this is an appropriate case in which to grant leave notwithstanding that the subject matter is an interlocutory decision. Significantly, the interlocutory decision relates to the threshold issue of jurisdiction and raises an issue of principle concerning the NCAT’s authority to determine the parties’ dispute. I am conscious that the case is a little unusual in the sense that the NCAT has now conducted a hearing regarding the parties’ substantive dispute and its decision is reserved. If the ultimate decision proves to be unfavourable to the lessor, it will be open to it to seek to challenge the decision by way of an internal appeal to the Appeal Panel or possibly by way of judicial review. It is in the interests of finality of litigation, however, that the issue of jurisdiction be determined now.

Consideration and determination

1. [41]

   The lease was originally executed on 18 April 2014. It was for a term of five years with an option to renew for three further periods of five years each. The first option was exercised and the lease was varied relevantly to increase the term to ten years (ie to 17 April 2024).

2. [42]

   Item 13 of Annexure A of the original lease described the permitted use and included the handwritten annotations referred to at [21] above.

3. [43]

   Clause 21 of the lease dealt with “Compliance with Retail Leases Act 1994”. Under cl 21.1, the lessee acknowledged that it “received a Disclosure Statement under the Act at least seven (7) days before it entered into this Lease”.

4. [44]

   A copy of the lessor’s Disclosure Statement was annexed to a copy of the lease adduced in evidence by the lessor. It described the lettable area of the premises as 644sqm. It contained a narrower description of the permitted use than that in the lease itself. Clause 2.1 of the Disclosure Statement described the permitted use as “Retail and general offices for computers and associated products” (ie it did not include the handwritten annotations which were included in the lease).

5. [45]

   It is evident from these matters that, when the lease was originally executed in 2014, the parties proceeded on the basis that the lease was a retail shop lease for the purposes of the Retail Leases Act. That is not, however, determinative in circumstances where, as noted above, it is common ground that the relevant date for determining the existence of the jurisdictional fact is 19 February 2022 (when the lessee lodged its claim in the NCAT) and consideration needs to be given to the actual use of the premises in the particular circumstances here.

6. [46]

   Whether or not the lease here is a “retail shop lease” raises a question of law which is central to the issue whether or not the NCAT had jurisdiction to determine the lessee’s retail tenancy claim lodged with the NCAT on 19 February 2022.

7. [47]

   An alternative way of characterising this threshold jurisdictional issue is to use the terminology of “jurisdictional fact”. That expression must not be confused with ordinary findings of fact (which generally do not raise a question of law). As the High Court stated in Gedeon v Commissioner of the New South Wales Crime Commission (2008) 236 CLR 120; [2008] HCA 43 at [43]:

8. [48]

   The applicant’s senior counsel accepted in oral address that the question whether or not there was a retail shop lease is a jurisdictional fact.

9. [49]

   The parties agreed that the lessee carries the onus of establishing that the NCAT has jurisdiction to determine what it characterises as a retail tenancy claim. This necessarily brings to the forefront of the argument the definitions of “retail shop lease” and “retail shop” in s 3 of the Retail Leases Act (see at [19] and [20] above).

10. [50]

    In view of the central importance of those definitions, it is convenient to focus on some relevant authorities in determining whether a lease is a retail shop lease within the meaning of the Retail Leases Act.

11. [51]

    There are two relevant issues:

    1. (1)

       What is the relevant date to which the jurisdictional fact relates?

    2. (2)

       In the circumstances of this case, does the existence of the jurisdictional fact fall to be determined solely by reference to the permitted uses in the lease or is there a need to determine what the premises were being actually used for as at the relevant date?

12. [52]

    As to the first of those issues, and as noted above, the parties were agreed that the relevant date is 19 February 2022, being the day on which the lessee lodged its notice of appeal in NCAT. I agree with that common ground.

13. [53]

    The second issue is less straightforward. At least superficially there appears to be some tension in the relevant authorities. There are authorities which stand for the proposition that in determining whether or not a retail shop lease exists in a particular case the correct approach is generally not to proceed directly to an examination of actual use; rather, the focus should be on the use which the parties reasonably contemplated when they entered into the lease (see Moweno Pty Ltd v Stratis Promotions Pty Ltd [2002] NSWSC 1151; (2002) 11 BPR 20,565 at [14] and [25]–[26] per Barrett J, whose decision was upheld on appeal in Moweno Pty Ltd v Stratis Promotions Pty Ltd [2003] NSWCA 376, particularly at [49] per Young CJ in Eq with whom Ipp JA agreed). In Moweno at first instance, Barrett J said at [25] that evidence of actual use “would be useful only if the written agreement of the parties was uncertain or there was some suggestion that the true terms of their bargain were to be gathered from their conduct, as distinct from the written word”.

14. [54]

    The central issue in the Moweno litigation was whether or not a lease was a “retail shop lease” in circumstances where the permitted use was as “a licensed restaurant with ancillary Function and Reception facilities” (emphasis added). One of the prescribed businesses in Sch 1 of the Retail Leases Act at the relevant time was “[r]estaurants, cafeterias, coffee lounges and other eating places”. At [30], Barrett J said that the fact that the parties to the lease had themselves described the permitted use as involving “ancillary Function and Reception facilities” meant that, of necessity, the restaurant aspect of the permitted use was agreed by the parties to be predominant.

15. [55]

    Barrett J’s approach in Moweno was adopted by White J in Dee-Tech Pty Ltd v Neddam Holdings Pty Ltd [2012] NSWSC 251; (2012) 16 BPR 31,089. The permitted use of the premises under the original lease there was described as “Computer Sales, Internet Cafe & Games”. On 28 May 2002, the parties executed a variation of the original lease. Under it, the permitted use was replaced with the words: “Computer Sales, Service, Games, Internet Cafe, Laundry/Laundromat and associated usages”.

16. [56]

    At the relevant time, the list of prescribed businesses in Sch 1 of the Retail Leases Act for the purposes of (a) of the definition of “retail shop” in s 3 included “internet cafes”, “games and hobby shops”, “shops selling … software, electronic games, computers or computer products” and “… collection centres for … laundry services”. The use for the purpose of “laundry/laundromat” or “associated usages” was not a prescribed business unless it fell within the expression “collection centres for … laundry services”.

17. [57]

    In determining the purpose for which the parties had agreed the premises could be used and the intended predominant use, White J said at [36] that it was “necessary to have regard to the objective facts known to the parties as to the intended use of part of the premises as a laundry”. His Honour had regard to a statement in a development application lodged in 2001 that the rear portion of the premises was to be used as a commercial laundry.

18. [58]

    In determining the predominant purpose for which the parties agreed that the premises could be used, White J identified at [40] two contemplated uses. Part of the premises was to be used for computer sales, games and internet cafe and the other part as a commercial laundry.

19. [59]

    His Honour noted at [41] that the plaintiffs led no evidence of any budgeted revenues as at 2002 when the lease was varied. His Honour said that the total leased area was approximately 505sqm: the computer store and internet cafe occupied approximately 210sqm, whereas the laundry occupied approximately 295sqm.

20. [60]

    Taking these and other matters into account, White J concluded at [46] that the commercial laundry business was the principal or predominant business carried on upon the site and that, in 2002, when the lease was varied, the parties’ expectation was that the commercial laundry business, once established, would be the principal or predominant business. Accordingly, his Honour concluded that the Retail Leases Act did not apply.

21. [61]

    In the present proceeding, the lessor submitted in oral address that where the permitted use of a lease falls wholly within the prescribed uses of Sch 1 of the Retail Leases Act, that is conclusive. But “in circumstances where the permitted use goes beyond the Schedule 1, one needs to look at what it’s (sic) being actually used for”. It cited the NCAT’s decision on jurisdiction in Diamond Certification Laboratories Pty Ltd v The Trust Company Ltd [2015] NSWCATCD 122 in support of that submission. The lease in Diamond related to a suite on the first level of Piccadilly Tower in Castlereagh St, Sydney. The main business conducted at the premises was the purchase and sale of second-hand goods, including the buying and selling of gold and other similar precious items. The premises had previously been leased and used for many years as a retail jeweller. The permitted use in the subject lease was for “Commercial Offices”. The lessor argued that the lease was a retail shop lease because its business comprised either a pawnbroking or a second-hand goods shop, which businesses were included in Sch 1 to the Retail Leases Act at the relevant time.

22. [62]

    In Diamond, in determining whether the lease comprised a retail shop lease or a lease of commercial premises, the NCAT did not view the permitted use as identified in the lease as pivotal and determinative (as referred to in the Moweno litigation). Rather, the NCAT stated at [36] that “the context in the present circumstances is quite different. In Moweno, the issue was whether a restaurant comprised a ‘shop’ for the purposes of determining the permissible use”.

23. [63]

    At [37] of Diamond, the NCAT described the critical question as follows (emphasis added):

24. [64]

    The NCAT then pointed at [38] to a range of facts which indicated that the subject premises constituted a business, rather than a retail shop. Those factors included that the permitted use was “Commercial Offices”, that the premises were not configured as a conventional shop, and that the evidence of retail sales was “virtually non-existent” (including that no articles were displayed for sale and the premises were not configured for retail sales).

25. [65]

    In the present proceeding it is evident from [12] of the Appeal Panel’s decision that it applied the same approach as in Diamond when it described (without criticism) the NCAT’s decision at first instance (emphasis added):

26. [66]

    Neither party suggested that this approach was wrong in the particular circumstances of this case.

27. [67]

    Finally, it might be noted that the lessor also relied upon Manly Council v Malouf t/as Fusion Point (2004) 61 NSWLR 394; [2004] NSWCA 299. That case raised issues concerning the scope of the Retail Leases Act and its relationship with the Roads Act 1993 (NSW). Manly Council had granted a licence to the respondent to use public space adjoining the respondent’s restaurant in the Corso for the purpose of its restaurant business. Handley JA (with whom Mason P agreed) said at [10] that the word “shop” had to be given its ordinary and popular meaning, which, according to the Macquarie Dictionary was “a building where goods are sold retail”.

28. [68]

    The lessor contended both before the Appeal Panel and this Court that there was an absence of evidence that the lessee operated at the relevant premises a shop at which retail goods were sold.

29. [69]

    For the following reasons, I consider that each of the four grounds of appeal (see at [11] above) should be dismissed. Ground 1 claims that the Appeal Panel erred in law in concluding that it was open to the NCAT at first instance to make certain findings of fact where the lessor claims that there was an absence of evidence to support those findings.

30. [70]

    I understand the appellant’s complaint is that there was no evidence to support these findings. It is well-established that there “is no error of law simply in making a wrong finding of fact” (see Waterford v The Commonwealth (1987) 163 CLR 54 at 77; [1987] HCA 25 per Brennan J), but it is equally well-established that it is an error of law to make a finding of fact for which there is no evidence (see Kostas at [90]–[91]).

31. [71]

    Before directly addressing each of the impugned findings of fact, it is important to emphasise that the Appeal Panel made clear at [65] of its reasons for decision that the contents of the three written statements of evidence of Mr Kantarelis provided a sufficient basis for the impugned findings. Importantly, Mr Kantarelis was not cross-examined on any part of these statements. Accordingly, while the lessee carried the onus of establishing jurisdiction, it was open to the Tribunal to act upon Mr Kantarelis’ evidence.

32. [72]

    In addition, although the lessor sought to diminish the significance of Mr Kantarelis’ evidence on the basis that large parts of it merely comprised “mere assertions”, neither the NCAT at first instance nor the Appeal Panel was bound by the rules of evidence. They were empowered to inquire into and inform themselves in any manner as they saw fit, subject to the rules of natural justice (see s 38(2) of the CAT Act). They were also bound to apply the guiding principle in s 36(1) of the CAT Act (namely “to facilitate the just, quick and cheap resolution of the real issues in the proceedings”).

33. [73]

    The first impugned finding of fact is the finding that the lessee sold customised computers at the relevant premises. The Appeal Panel noted at [60(1)] that it was common ground that the lessee was not a wholesaler and that the showroom and other activity “was ancillary to retail computer sales”. This included a consulting area office and management space, as well as a warehouse for storage of computers in their “customised or pre-customised form”. The Appeal Panel found the other activity and spaces were consistent with being ancillary to retail computer sales.

34. [74]

    These findings were supported by Mr Kantarelis’ evidence. For example, in his first witness statement, Mr Kantarelis described the activities on the premises as “management, administration, and operations, sales, training, receipt storage, assembly, configuration and dispatch of equipment” (at [42]). He also described how retail clients came to the showroom where point of sale and digital signage were demonstrated (at [44]).

35. [75]

    In his second witness statement, Mr Kantarelis said at [2] that the lessee sold “retail computer and information technology hardware and software from the premises”. He said at [5] that the majority of the company’s new business came from persons who visited the showroom where display solutions were demonstrated. He added that a “significant volume” of sales were “combination/packages of hardware and software configured for customized solutions” (at [8]). At [15], Mr Kantarelis described the following activities at the business:

36. [76]

    In his third witness statement, Mr Kantarelis said at [11] that the business did not operate wholesale but rather retailed to end customers. He said at [7] that the business offered a much greater range of products than straight off the shelf computers and software and further said at [8] that the sales were always “hardware, accessories and software”. He added that, like most retailers today, the business also conducted sales online (at [17]). He attached to his third witness statement some screenshots of the company’s webpage which described the retail products sold from the premises (which included tablets, tablet personal computers and laptops).

37. [77]

    Having regard to these matters, there is no substance in the appellant’s complaint of absence of evidence to support the first impugned finding of fact.

38. [78]

    The second impugned finding of fact is that retail sales occurred at the premises. There is no substance in this complaint. The Appeal Panel noted at [60(2)] the NCAT’s findings at first instance that the presence of open plan consulting desks and flexible space where sales took place confirmed that the NCAT had found that there were sales. Merely because the business did not conduct a traditional “counter sales” model was not viewed as determinative.

39. [79]

    Reference was also made to signage which referred to “sales” as well as to “repairs” and “recovery”, which were described as connected to the signage concerning sales. Reference was also made to Mr Kantarelis’ description of the business operations, which included sales to retail clients (see above). Not unimportantly, the Appeal Panel emphasised at [60(4)] that the Tribunal proceeded on the basis that Mr Kantarelis was not cross-examined. It was well open to the Appeal Panel to rely on Mr Kantarelis’ statements of evidence. This included his third statement of evidence (dated 22 April 2022), which was put on in response to a video taken of the premises on 8 April 2022 (which was played both in the proceeding below and in Court). Mr Kantarelis said in that statement that the video did not properly show all aspects of the premises and the business conducted thereon and he attached photographs of various items and aspects of the retail business at the premises which were missed in the video.

40. [80]

    At [62] to [64], the Appeal Panel summarised some parts of Mr Kantarelis’ written statements. It is well to set out those paragraphs, which underpinned the Appeal Panel’s conclusion at [65] that Mr Kantarelis’ evidence was sufficient to enable the NCAT to have made the findings of fact described by the Appeal Panel at [60]:

41. [81]

    The third impugned finding is that the premises were a “retail shop” within the meaning of the Retail Leases Act. This complaint is without substance. As is evident from the Appeal Panel’s reasoning and findings described above, it rejected the lessor’s complaint that there was insufficient evidence of the existence of a shop at which sales occurred. The evidence to which it referred is set out in particular at [62] to [64] of its reasons, which are extracted above.

42. [82]

    Ground 2 claims that the Appeal Panel erred in law in finding at [67] that the sub-leased area appeared to be less than 50% of the total leased area and there was no evidence to support such a finding. In his first witness statement, Mr Kantarelis described at [31] how, when the lease was originally executed in 2014, the premises comprised 500sqm of office space and 150sqm of warehouse. The Disclosure Statement described the lettable area of the premises at 644sqm. In his first witness statement Mr Kantarelis also described at [53] how, in late 2020, the lessee sub-let one of two secured spaces as warehouse space for $500 per week. He said at [54] that the balance of the area which was surplus to the lessee’s own requirements was approximately 200 sqm and that he had been advised that this area could be rented in the range of $45,000 to $52,000 per annum. In oral address, the lessor sought to use these rental figures as a basis for estimating the total sub-leased area.

43. [83]

    I do not accept this ground. Contrary to the lessor’s submission, Mr Kantarelis did not claim that the area of approximately 200 sqm was in fact sub-let; rather, he simply described the advice which he had received that it could be let for approximately $45,0000 to $52,000 per annum. It is also important to note that the finding which is impugned by ground 2 relates to the Appeal Panel’s statement at [67] that the sub-leased area which was not used for retail shop purposes “appears” to be less than 50% of the total leased area. Mr Kantarelis annexed to his first witness statement a diagram described as “Existing Tenancy Plan”, which apparently identified the reconfiguration and fitting out of the premises after the lease was originally executed. It is unclear whether the diagram also reflects the further subdivision and partitioning carried out by the lessee during the COVID-19 pandemic, with a view to sub-leasing two newly created secured areas. It appears that the secured area which was in fact leased in late 2020 was a secured and enclosed space of what appears to be relatively modest dimensions (and evidently far less than 200 sqm).

44. [84]

    The precise dimensions of the surplus area are not clear on the evidence but the Appeal Panel’s finding that the area appeared to be less than 50% of the total leased area was open to it in circumstances where, when the NCAT proceedings were commenced, the evidence suggested that the only sub-leased area at that time was the relatively small lock-up room and not a wider area of approximately 200 sqm. Although that larger area was reconfigured in 2020 with a view to it being sub-let, there was no evidence that this had occurred at the relevant time. Nor was there any evidence that the lessee had an ongoing intention to sub-let that area when the NCAT proceedings were commenced.

45. [85]

    In its outline of written submissions, the lessor also complained that “another 150 square metres of the leased space was used for warehousing and therefore not a prescribed use”. This submission appears to refer to [31] of Mr Kantarelis’ first written statement, where he described the premises as comprising 500 sqm office space “and 150 square meters warehouse that we could fit 6 vehicles into securely”. It is difficult to see the relevance of the submission in circumstances where it is common ground that the relevant time for determining the issue of jurisdiction is 19 February 2022 (and not 2014 when the lease was first executed, which is the time addressed by Mr Kantarelis in [31] of his first witness statement).

46. [86]

    Finally, to the extent that the lessor criticised the Appeal Panel for not expressly finding that the premises were predominantly used as a retail shop, it seems to me that the Appeal Panel was plainly of that view, particularly when regard is had to the terms of both [11] and [57] of its reasons for decision.

47. [87]

    For these reasons, grounds 1 and 2 of the appeal are rejected. As was pointed out during oral address, the complaints raised by these grounds focused more on the sufficiency or adequacy of the evidence underpinning the impugned findings, even though they were presented (of necessity) as complaints of no evidence. The no evidence complaints have not been established.

48. [88]

    Grounds 3 and 4 may be dealt with together. In substance, they claim that the Appeal Panel erred in law in not concluding that the NCAT lacked jurisdiction to determine the dispute. As is made clear by the lessor’s written submissions in this Court, these grounds are dependent upon grounds 1 or 2 succeeding. For the reasons given above, neither ground 1 nor 2 has been established and grounds 3 and 4 must necessarily also be rejected.

Conclusion

1. [89]

   For all these reasons, leave to appeal should be granted, but the appeal will be dismissed, with costs.