Pyrmont Point Pty Ltd v Westacott

1. [1]

   HER HONOUR: On 5 June 2015 I refused leave to the plaintiff in these proceedings to appeal against a decision of the Internal Appeal Panel of the NSW Civil and Administrative Tribunal. The Summons filed by the plaintiff seeking that leave was dismissed, with costs in favour of the defendant.

2. [2]

   These are my reasons for making those orders.

3. [3]

   The plaintiff in these proceedings, Pyrmont Pty Ltd (“Pyrmont”), seeks leave to appeal against a decision of an Appeal Panel of the NSW Civil and Administrative Tribunal (NCAT) made on 16 December 2014, and cited at Pyrmont Point Pty Ltd v Westacott [2014] NSWCATAP 106. That decision was itself a determination of an appeal against a decision of a single member of the Tribunal, Pyrmont Point Pty Ltd (ACN 145199784) trading as “Red Bottle” v Westacott [2014] NSWCATCD 40. The decision of the Appeal Panel dismissed Pyrmont Point’s appeal against the first decision, made by Senior Member Mullane on 25 March 2014.

4. [4]

   By Summons filed in this Court on 12 January 2015 Pyrmont Point Pty Ltd seeks leave to appeal against the decision of the Appeal Panel. The defendant, Mr. Westacott, opposes a grant of leave.

5. [5]

   Pursuant to s 83(1) of the Civil and Administrative Tribunal Act 2013 and s 75A Supreme Court Act 1970, the Supreme Court has power to hear the plaintiff’s appeal. Section 83(1) provides that an appeal lies by leave on a question of law against any decision made by the Tribunal in internal appeal proceedings.

6. [6]

   The application to this Court for leave to appeal centres on the proper construction of s 6(1)(b) of the Retail Leases Act 1994 (“the Act” or “RL Act”), this being a question of law: Brutus v Cozens [1973] AC 854.

Brief history of the relevant facts

1. [7]

   The lease at the centre of the dispute between the parties concerns retail premises that were originally leased for a term of 5 years, from 19 March 2004 to 18 March 2009, with 4 options of 5 years each (“Original Lease”). The lease with all options exercised was for a term of 25 years. An issue arose between the lessee and lessor as to the manner of determining the rent payable for the premises, and the lessee made an application to the Tribunal for a resolution of the issue. The question of the interpretation of s.6(1)(b) of the Act and the jurisdiction of the Tribunal arose in that context.

2. [8]

   The facts surrounding the tenancy of the premises, a liquor outlet, are not in dispute. The outline of the facts set out below is extracted from the decision of the Appeal Panel (at [5] – [24], [26]-[27],[29]).

NCAT Proceedings

1. [9]

   On 25 March 2014 in an application dealt with on the papers, the Tribunal (constituted by Senior Member Mullane) determined that, because the lease between the parties fell within the scope of s 6(1)(b), the Act did not apply to the issue between the parties, and the Tribunal lacked jurisdiction to determine the dispute over rent (Pyrmont Point Pty Ltd (ACN 145199784) trading as "Red Bottle" v Westacott [2014] NSWCATCD 40.)

2. [10]

   Although the reasons for it are unclear, the Tribunal, constituted by Senior Member Rickard, determined the matter again on 8 April 2014, reaching the same decision. This second decision of the Tribunal was later declared null and void, as the Tribunal was functus officio at the relevant time.

3. [11]

   On 17 April 2014 Pyrmont Point filed a Notice of Appeal, seeking orders setting aside both decisions of the Tribunal. That appeal was heard by an NCAT Appeal Panel on 11 November 2014, with judgment given on 16 December 2014, dismissing the appeal.

4. [12]

   The Appeal Panel agreed with the interpretation of s.6(1)(b) of the Act given by the Tribunal at first instance,

Supreme Court Proceedings

1. [13]

   The plaintiff filed a summons seeking leave to appeal in the Supreme Court on 12 January 2015. Primarily the plaintiff seeks to appeal order 1 in the proceedings below which dismissed the appeal against the Tribunal’s decision of 25 March 2014.

2. [14]

   The grounds advanced by the plaintiff are akin to arguments in support of the appeal, rather than grounds of appeal proper. They are lengthy, and I do not propose to set them out in full here.

3. [15]

   Suffice it to say that, at the hearing of the application for leave to appeal in this Court, the plaintiff accepted that at the heart of the appeal was the complaint that the Appeal Panel had erred in its interpretation of s.6(1)(b) of the Act. The parties agreed that this was the issue to be determined in deciding the question of leave and, should leave be granted, the appeal itself.

The Arguments of the Parties

1. [16]

   Consistent with that approach, the parties focused in submissions upon the meaning of s.6(1)(b) and how the provision should be understood.

2. [17]

   In the context of a lease with options for renewal or extension, the plaintiff contends that the provision is intended by its wording to refer only to the period of renewal or extension which is current at the material time.

3. [18]

   Applied to the lease that was current at the time the matter was referred to the Tribunal for resolution of the rental dispute, the term “lease” or “leases” in s.6(1)(b) could only mean, in the plaintiff’s submission, the five year lease renewal option then current or, at most, that five year option with one further option, making a ten year lease in total.

4. [19]

   It argues that, once a lease renewal or extension option is exercised, only that new lease exists, with all that had gone before or which may come after irrelevant. On that basis, the plaintiff contends that the Tribunal and the Appeal Panel were both in error in having regard to the whole of the lease, from its origins as a lease for five years with four further five year options available by which to extend the lease.

5. [20]

   The defendant argues that ordinary principles of statutory construction apply to the interpretation of s.6(1)(b), and the words used in the provision are to be given their natural and ordinary meaning. Applying that approach, it is clear that the section provides its own definition of the leases to which it applies, where the “term” of a lease is taken to include any options for renewal or extension. The defendant’s submission is that the term of the lease between he and the plaintiff must be taken to be 25 years, since that includes the lease term of five years and each of the four options for renewal of five years each.

6. [21]

   The parties agree that there is no direct guidance in any authority decided by a superior court in which the meaning of s.6(1)(b) has been considered.

Consideration

1. [22]

   The Retail Leases Act 1994 is, according to the statute itself,

2. [23]

   The adoption of the word “certain” clearly indicates that not all retail leases and retail shops are intended to be covered by the operation of the Act.

3. [24]

   Sections 5, 6, and 6A are exclusionary provisions, which operate to remove some retail premises and some retail leases from the governance of the statute.

4. [25]

   Section 6(1)(b) provides:

5. [26]

   It is clear from the heading to and wording of s.6 that it is an exclusionary provision, intended to exclude certain leases from the operation of the Act. That is further confirmed by the explanatory note to the definition of “retail shop lease” or “lease” contained in s.3, the definitions section. The note is to the effect that s6, amongst other provisions, limits the retail shop leases to which the Act applies.

6. [27]

   Accepting that the provision is exclusionary, how wide is its scope?

7. [28]

   In construing the meaning and effect of a statute or statutory provision, the task of the courts is to ascertain the objective intention of the legislature and give effect to that intention. That purposive task is undertaken by determining the meaning of the language used, in accordance with principles of construction fixed by common law or statute: Wilson v Anderson [2002] HCA 29; (2002) 213 CLR 401 at [8]. Determining the meaning of the words used in the context in which they appear is fundamental to the exercise.

8. [29]

   An underlying principle of statutory construction is that ambiguity or uncertainty should not be read into a statutory provision by the courts; where the language employed by the legislature is clear it should be given its ordinary meaning: Maunsell v Olins [1975] AC 373 at p.394. Although individual words in the English language can often be used to convey many shades of meaning, statutes are not drafted as a demonstration of the beauty and richness of the language, and so it is the natural and ordinary meaning of the words used which is to be given primacy.

9. [30]

   Although the plaintiff contends that the Court must have regard to the Parliament’s assumed intention to protect lessees, rather than to benefit lessors, in passing the Act,

10. [31]

    On that basis I discount the “anecdote” the plaintiff referred to, to the effect that the Parliament intended by the passage of the Act to protect small businesses, which typically obtain short term retail leases, from their more powerful landlords.

11. [32]

    In any event, it has been held to be erroneous to have regard to extrinsic material before exhausting the ordinary rules of statutory construction: Saeed v Minister for Immigration and Citizenship [2010] HCA 23; (2010) 241 CLR 252 per French CJ, Gummow, Hayne, Crennan and Kiefel JJ, at [33]. Fidelity to the text is important and, where the meaning of the text is clear, it is not necessary to go beyond them.

12. [33]

    Setting aside for the moment such extrinsic material as may be available, and starting with the words of the section, the question is whether the section catches a lease which, cumulatively by reference to the available options for extension or renewal, has a term of 25 years or more.

13. [34]

    By reference to the ordinary meaning of the words of the section, it must, in my view, apply to such leases.

14. [35]

    The language used in the section is unambiguous, and can be read in a straightforward way. The sub-section contains an internal definition of what the phrase “lease for a term of 25 years or more” means in the context of the section, that being a lease for such a term, or a lease which may be extended or renewed at the option of the lessee.

15. [36]

    That is, where a lease includes options for renewal or extension that may be exercised by the lessee to a total of 25 years or more, it is relevantly categorised as a lease for 25 years or more.

16. [37]

    That is the plain meaning of the language used and, in accordance with the principles that ordinarily apply to statutory construction, those words should be given their usual meaning.

17. [38]

    The plaintiff contends that this cannot have been the intention of the Parliament, since such an interpretation would be contrary to logic.

18. [39]

    I do not consider that submission to be capable of being made good as I see no inherent flaw of logic in that interpretation.

19. [40]

    As a matter of logic, the provision – by including in the definition of a 25 year lease, those leases which contain an option for renewal or extension by the lessee only, and not by the lessor – clearly aims to achieve a balanced outcome. Without that exclusionary provision, lessors who provide a lease with options exercisable by the lessee capable of amounting to a lengthy tenancy would be bound by statutory provisions intended to regulate shorter term tenancies. Since the lessor has no control over the exercise of the option by the lessee under relevant leases, this could result in a situation of prejudice to lessors.

20. [41]

    The Parliament may be taken not to have intended that a whole class of persons or entities be prejudiced.

21. [42]

    Although the plaintiff relies upon the use of the of the singular in the reference to “term” to suggest that regard should not be had to more than one option to extend or renew, that approach is not consistent with the ordinary application of the Interpretation Act 1987 (NSW) which provides, at s.8,

22. [43]

    Accordingly, I do not regard that argument as persuasive of an interpretation which is contrary to the words used in s.6(1)(b) to define a lease of 25 years or more.

23. [44]

    On this analyses, the plaintiff cannot make good its appeal against the orders of the Appeal Panel of NCAT. Since the appeal to this Court could not succeed, I refused leave to appeal. The summons was dismissed.