In brief - North Bondi RSL Club forced to extend caterer's
term to five years
The Administrative Decisions Tribunal recently determined that
when North Bondi RSL Club Limited engaged a caterer to provide
catering for its patrons and entered into a one year licence
agreement, the caterer had in fact entered into a retail shop lease
by virtue of this licence. This meant that the caterer's
licence was automatically extended to five years.
North Bondi RSL Club engages caterer for one year term
North Bondi RSL Club engaged a caterer and entered into a one
year licence agreement which commenced on 1 November 2009. The
caterer was engaged to use the kitchen at the club and serve food
and drink to the club's patrons.
When the one year term ended, the club asked the caterer to
leave. The Administrative Decisions Tribunal determined that the
caterer had entered a retail shop lease by virtue of its licence.
One of the prescribed retail shop businesses is "restaurants,
cafeterias, coffee lounges, food courts and other eating
Licence extended and capital costs recovered
The licence which had commenced on 1 November 2009 was
automatically extended to five years, to end in 2014 rather than
2010. The club was ordered not to interfere with the caterer's
Under the licence, the caterer had been required to contribute
towards capital costs of the garbage compound at the club. As this
was declared to be a retail shop lease, the tenant was able to
recover any capital costs from the club and was awarded the sum of
Implications for owners of premises
The lesson to be learned from this case is that where owners of
premises licence them to a caterer for a food service and give the
caterer occupation rights of the kitchen and serving areas, that
could be a retail shop lease. If you are the owner of such
premises, you may have to consider complying with
Retail Leases Act 1994 (NSW) whenever you put in place
occupation rights for caterers or managers.
If in doubt, the licence should be treated as a retail shop
lease. It is prudent to have the caterer provide a section 16
certificate to waive the automatic five year term.
Implications for caterers
If you are a caterer or have occupation rights in relation to
retail parts of premises, you may in fact be entitled the many
benefits of the Retail Leases Act 1994 (NSW).
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