A recent decision of the Victorian Supreme Court of Appeal serves as an important reminder of the broad application of the Retail Leases Act 2003 (Vic) (RLA).
In IMCC Group (Australia) Pty Ltd v CB Cold Storage Pty Ltd  VSCA, the Victorian Supreme Court of Appeal upheld an earlier decision of the Victorian Supreme Court, finding that premises used for a cold and cool storage business fell within the definition of ‘retail premises’ for the purposes of the RLA. The case turned on whether the premises were used for the ‘retail provision of services’.
In 2012, CB Storage Pty Ltd (the Tenant) entered into a lease with IMCC Group (Australia) Pty Ltd (the Landlord) for a lease of a property in Laverton (the Lease). The permitted use defined in the Lease was ‘Cold and cool storage warehouse and transport facility’.
In accordance with the provisions of the Lease, the Tenant made payment of outgoings to the Landlord including land tax. Notably, under section 50 of the RLA, a provision of a retail lease is void to the extent that it makes the tenant liable to pay an amount for tax for which the landlord is liable under the Land Tax 2005 (Vic). The Tenant initiated proceedings seeking to recover the land tax and other payments it had paid to the Landlord that are prohibited under the RLA.
At first instance, the Victorian Civil and Administrative Tribunal (VCAT) found that the premises were not retail premises for the purposes of the RLA. VCAT came to this conclusion on the basis that the ultimate consumer of the goods or services must use the goods or services to satisfy their own personal needs. Whereas the Tenant’s customers used the goods and service for a business or other purpose.
On appeal, the Victorian Supreme Court overturned VCAT’s decision by adopting a broader approach, ruling that a consumer could be a person who uses the goods or services for business purposes or other purposes other than for personal needs, provided that the consumer in question was the “ultimate consumer” of the goods or services.
The Landlord appealed that decision to the Victorian Supreme Court of Appeal. The key issue in dispute was the application of the ‘ultimate consumer test’ in relation to the provision of retail services, specifically whether business-to-business transactions could satisfy this test for the purposes of the RLA.
The Victorian Supreme Court of Appeals decision
The Victorian Supreme Court of Appeal held that a detailed analysis of the goods or services being provided is required when considering whether premises are used for the retail provision of services and whether business-to-business transactions could satisfy the ‘ultimate consumer test’. In particular, the Court held that the following are all relevant considerations to be taken into account when determining the ‘ultimate consumer test’:
In applying the above considerations to the matter in dispute, the Court of Appeal supported the view that the Tenant was providing retail services from the cold storage facility given:
Accordingly, the RLA applies to the Lease as the Tenant is providing retail services.
The key takeaways from this case include:
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Published by Richard Skopal, Nick McConnell