Posted on August 14, 2017 by Megan Hawley

‘Retail Premises’ need not involve direct sales to the public

The Court of Appeal has confirmed that in order for a development to comprise ‘retail premises‘ the development does not need to involve sales direct to the public.

The issue came up in a case regarding the purpose for which a building occupied by the Randwick Rugby Club (Club) had been constructed.

A provision of the applicable local environmental plan (LEP) applied if the building was constructed for the purpose of ‘commercial premises’.

Under the LEP (and also under the Standard Instrument – Principal Local Environmental Plan) ‘commercial premises’ are defined to include ‘business premises‘ and ‘retail premises‘.

The definition of ‘business premises‘ refers to the provision of services ‘directly to members of the public’.

In contrast, the definition of ‘retail premises‘ does not include any reference to sales direct to members of the public, but does refer to selling items ‘by retail’.

The Club contained a bistro and bars and sold food and drink to its members and their guests.

The Court referred to the definition of ‘retail‘ in the Macquarie Dictionary which was ‘the sale of commodities to household or ultimate consumers, usually in small quantities (opposed to wholesale)’.

The Court held that the selling of food and drink to Club members and their guests fell within that dictionary definition, as it involved sales to the ultimate consumer, and the food and drink was not intended to be on-sold.

Because there was no additional wording in the definition of ‘retail premises’ requiring sales direct to the public at large the Court of Appeal concluded that the building was constructed as ‘retail premises‘.

On the basis of this decision, when determining whether any particular development involves retail sales, the key question to consider is not whether there are sales to the public, but whether the goods are being sold to a household consumer or the ultimate consumer.

The decision can be read here.