Retail Lease Jurisdiction Showdown: When a lease permits “Massage and Beauty”, how does the Tribunal decide whether the business is a protected “beauty shop” under the Retail Leases Act 1994 (NSW) or an unprotected “massage” use that defeats the claim?

Introduction (Mandatory Fixed Text) Based on the authentic Australian judicial case Pioneer Eagle Pty Ltd v Basha [2025] NSWCATCD 124, this article disassembles the Court’s judgment process regarding evidence and law. It transforms complex judicial reasoning into clear, understandable key point analyses, helping readers identify the core of the dispute, understand the judgment logic, make more rational litigation choices, and providing case resources for practical research to readers of all backgrounds. :contentReference[oaicite:0]{index=0}

Chapter 1: Case Overview and Core Disputes

Basic Information

Court of Hearing: NSW Civil and Administrative Tribunal, Consumer and Commercial Division

Presiding Judge: Senior Member

Cause of Action: Retail lease dispute and statutory claims under the Retail Leases Act 1994 (NSW), with alternative misleading or deceptive conduct claims under the Australian Consumer Law

Judgment Date: 12 August 2025

Core Keywords:

Keyword 1: Authentic Judgment Case

Keyword 2: Retail Leases Act 1994 (NSW) jurisdiction

Keyword 3: Schedule 1 prescribed business

Keyword 4: Predominant use test

Keyword 5: Evidence credibility and corroboration

Keyword 6: Retail bond and disclosure obligations

Background

The Applicant was the former lessee of a shopfront premises in suburban Sydney. It entered a lease for a three-year term, paid a substantial security deposit, renovated the premises, and operated a customer-facing service business. The lease ended early when the Applicant sold the business and vacated. After the relationship between the parties deteriorated, the Applicant commenced proceedings seeking money back: the security deposit, outgoings, and damages. The First Respondents, as owners and lessors, denied liability. The dispute quickly crystallised into a threshold question that would decide everything: whether the Tribunal even had power to hear the claim under the Retail Leases Act 1994 (NSW).

Core Disputes and Claims

The central legal focus was jurisdiction under the Retail Leases Act 1994 (NSW). The Applicant alleged breaches of lease and breaches of the Act, including outgoings disclosure failures and bond lodgement issues, and sought monetary orders and declarations. The First Respondents’ primary position was that the lease was not a “retail shop lease” because the premises were not used wholly or predominantly for a “prescribed business” in Schedule 1 at the time the lease commenced. If that position was correct, the Tribunal would lack jurisdiction to determine the claim and the proceeding would end without any examination of the substantive allegations.

Relief sought by the Applicant included, in substance:

1. Return of the security deposit in full.

2. Refund of outgoings paid during the tenancy.

3. Damages for lost opportunity and other damages.

4. Declarations and statutory orders under the Retail Leases Act 1994 (NSW), plus alternative relief under the Australian Consumer Law.

Relief sought by the First Respondents included dismissal of the application and, consequentially, consideration of costs.

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Chapter 2: Origin of the Case

The dispute began in a familiar commercial pattern: an older landlord couple engaged a property manager to find and manage a tenant, a business operator negotiated the deal through an agent, and the paperwork was produced with professional assistance. In the lead-up to the lease, the Applicant’s director negotiated with the leasing agent, and solicitors were involved in circulating a disclosure statement and draft lease. The identity of the lessee changed before execution, and a fresh disclosure statement matching the changed lessee name was not produced.

From the beginning, the lease documentation carried a legally significant ambiguity. The permitted use was recorded as “Massage and Beauty”. On one reading, this could describe a beauty salon that provides massage as part of beauty treatments. On another, it could describe a massage clinic that offers some beauty services on the side. That difference is not merely semantic: at the relevant time, “beauty shops” and “beauty therapists” appeared in Schedule 1 of the Retail Leases Act 1994 (NSW), but “massage” did not. The legal protection of the retail leasing regime depends on whether the business fits within a prescribed category.

In parallel, the financial and practical interweaving of the relationship intensified. The Applicant renovated the premises with the lessor’s consent. The renovation documentation repeatedly used “massage” descriptors and proposed rooms consistent with massage treatment layouts. The business then traded. As time progressed, payment issues emerged. A statutory notice about arrears was sent. At around the same time, the Applicant sought to transfer or sell the business. Email exchanges show the agent insisting that sale or assignment could not occur until arrears were paid and the incoming operator was vetted and formally approved.

The decisive moment was the business sale and departure. The Applicant sold the business and vacated. The lessor side treated the departure as an abandonment without notice. The premises were secured, arrears were addressed through the incoming operator’s payment, and the security deposit later became the next flashpoint. The Applicant alleged irregularities with the bond process. The First Respondents asserted entitlement to apply the bond to rectification costs and other amounts. Once lawyers were involved, the Applicant’s claims expanded into a multi-headed statutory and contractual complaint, but all of it depended on whether the Tribunal had retail lease jurisdiction in the first place.

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Chapter 3: Key Evidence and Core Disputes

Applicant’s Main Evidence and Arguments

1. Lease and disclosure material

• The lease recorded a permitted use of “Massage and Beauty”.

• The disclosure statement recorded outgoings in a manner the Applicant argued was misleading or non-compliant, including “$0.00” entries across multiple outgoing items while also ticking “yes” to outgoings obligations and referencing a 100% apportionment.

• The lease also contained security deposit provisions referring to the bond being held in accordance with the Retail Leases Act 1994 (NSW).

1. Renovation and concept documentation

• Design emails and concept plans, including the project naming and signage concepts, were relied upon by the parties as contemporaneous indicators of intended business use.

1. Email communications about arrears and transfer

• Emails from the property manager’s employee to the email address nominated for the guarantor, including a notice indicating arrears.

• A chain of emails about “transferring business ownership” and the agent’s insistence on proper assignment and payment.

1. Affidavits and statements

• Affidavits affirmed by the Applicant’s director, including assertions about the nature of the business and allegations concerning bond lodgement and signature authenticity.

• A statement from the Applicant’s electrician describing the premises as a “remedial massage centre”.

1. Heads of claim and pleaded statutory breaches

• Assertions that outgoings were undisclosed contrary to statutory requirements.

• Allegations of misleading or deceptive conduct, including under the Retail Leases Act 1994 (NSW) and, alternatively, the Australian Consumer Law.

• Allegations concerning bond lodgement timing and alleged signature irregularity on bond documentation.

Respondent’s Main Evidence and Arguments

1. Jurisdiction challenge based on Schedule 1 prescribed business

• “Massage” not being a prescribed business at lease commencement meant the lease was not a “retail shop lease” unless actual use was predominantly “beauty shop” or “beauty therapist”.

1. Reliance on contemporaneous documents

• Renovation plans, signage and project naming were said to overwhelmingly indicate a massage business rather than a beauty salon.

1. Challenge to “beauty predominance” assertions

• The Applicant’s assertions about “over 90%” beauty treatments were said to be unsupported by any objective evidence, such as appointment records, service menus, invoices, marketing materials, or contemporaneous business documents.

1. Oral evidence concessions

• A critical concession in oral evidence about approximate percentages of massage and beauty work.

Core Dispute Points

1. Jurisdiction gateway question: Is the premises a “retail shop” under section 3 of the Retail Leases Act 1994 (NSW) because it was used wholly or predominantly for a Schedule 1 prescribed business?

2. Predominant use: Was the actual business use predominantly “beauty shop/beauty therapist” or predominantly “massage”?

3. Evidence quality: Where affidavits and oral evidence conflict or lack corroboration, how should weight be assessed?

4. Consequence: If jurisdiction fails, none of the substantive statutory and contractual claims can be determined by the Tribunal under the Retail Leases Act pathway.

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Chapter 4: Statements in Affidavits

Affidavits are not just containers of facts. They are litigation instruments designed to construct a coherent story that aligns evidence, legal elements, and the relief sought. In this case, the credibility and reliability of affidavit material became a central issue because the jurisdiction contest depended on what the business actually did at the premises.

The Applicant’s affidavits attempted to do two things simultaneously:

1. Build a statutory case under the Retail Leases Act 1994 (NSW) by presenting the lease as a retail shop lease and emphasising “beauty services” as the predominant business activity.

2. Support broader allegations about disclosure, outgoings, bond handling, and conduct said to be misleading or improper.

However, the Tribunal drew a sharp line between allegations and proof. The reasons highlight that affidavit evidence is given weight when it is either inherently reliable or corroborated by contemporaneous documents. Where a witness has limited English proficiency, the Tribunal expects clear transparency about how the affidavit was prepared, interpreted, and verified. When an affidavit purports to recount precise English conversation in the first person, despite the deponent’s minimal English comprehension, the Tribunal treats that as a serious red flag.

The strategic impact is straightforward. The Applicant needed the Tribunal to accept the “beauty predominance” narrative. The Tribunal was not prepared to do so without objective support. Once the affidavit reliability was undermined and the corroborating documents pointed in the opposite direction, the Applicant’s jurisdiction foundation weakened.

Strategic Intent: Procedural Directions About Affidavits

The Tribunal’s approach illustrates a common procedural principle: affidavits are not immune from forensic testing. Directions for cross-examination and the sequencing of submissions serve a strategic purpose: they force parties to confront the gap between pleaded allegations and provable facts. Here, the cross-examination of the Applicant’s director, assisted by an interpreter, was not a formality; it was the mechanism through which the Tribunal obtained the critical admissions and assessed the evidence that decided the jurisdiction question.

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Chapter 5: Court Orders

Before the final determination, the Tribunal made procedural arrangements typical of complex retail lease disputes:

1. Orders joining a property manager’s employee as a respondent because the Applicant asserted a cause of action under the Retail Leases Act 1994 (NSW) against that individual.

2. An order dismissing the application against the property management company after the Applicant withdrew the claim against that party.

3. Directions for the hearing to proceed over multiple days with affidavit evidence, cross-examination, and then written submissions.

4. Post-hearing directions for the filing of written submissions and reply submissions, enabling the jurisdiction issue to be fully addressed after the hearing.

These procedural steps matter because they show the Tribunal treating jurisdiction as a live issue capable of being raised and determined by the Tribunal itself, regardless of whether the parties initially pleaded it.

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Chapter 6: Hearing Scene: Ultimate Showdown of Evidence and Logic

The hearing unfolded with a dynamic familiar to anyone who has watched civil litigation pivot from broad allegations to one decisive point: when jurisdiction is questioned, the case stops being about what went wrong and becomes about whether the forum has power to decide anything at all.

Process Reconstruction: Live Restoration

The Applicant’s director was cross-examined through a Mandarin-speaking interpreter. That detail is not merely procedural. It affects how the Tribunal evaluates the reliability of narrative evidence, particularly affidavits in English. The Tribunal’s reasons indicate concern about whether the affidavits truly reflected the witness’s evidence, and whether the witness could reliably attest to English-language events and communications.

A pivotal moment occurred when the Tribunal asked a direct question: roughly what proportion of the business was massage and what proportion was beauty. The answer, given orally in the hearing environment rather than in crafted written submissions, supplied an approximate split. That split was then compared against the Applicant’s later submission that beauty services constituted more than 90% of services.

Where those two pictures diverged, the Tribunal did not fill the gap by inference. Instead, it looked for corroboration and found the contemporaneous documents pointed strongly to massage.

Core Evidence Confrontation

The decisive confrontation was between two kinds of proof:

1. Retrospective characterisation: the Applicant’s submission that it was primarily a beauty business and that massage was ancillary.

2. Contemporaneous indicators: renovation documents, project naming, signage concepts, and third-party descriptions describing the premises as a massage shop or massage centre.

In practical terms, it was like claiming your café is mainly a bakery, but your sign says “Coffee Bar”, your interior plans show espresso counters, and your supplier invoices are almost entirely coffee beans. When the Tribunal asks what you actually did day to day, the documents around you speak loudly.

Judicial Reasoning: How the Facts Drove the Result

The Tribunal applied a structured method drawn from authority about retail lease jurisdiction: first look at the lease, then, if the permitted use is unclear or mixed, examine the actual use to determine the predominant use and whether that use falls within Schedule 1.

The Tribunal was explicit that the onus to establish jurisdiction lay on the Applicant. The First Respondents did not have to prove the Tribunal lacked power; the Applicant had to persuade the Tribunal that it had power.

The Court’s determinative reasoning can be captured in its own words:

The onus for persuading the Tribunal that it has jurisdiction and the evidentiary burden that goes with it falls squarely on the applicant.

That sentence is decisive because it identifies the legal burden that controlled how uncertainty would be resolved. Where the evidence was ambiguous or uncorroborated, the Applicant did not receive the benefit of the doubt.

The Tribunal then explained the essential conclusion-driving facts:

By her own admission, the applicant’s sole director and shareholder said in evidence that massage represented 60% of the applicant’s business. Of itself, that means the predominant use of the premises was massage.

This mattered because Schedule 1 did not include massage at the relevant time. Once predominant use was found to be massage, the Tribunal’s jurisdiction under the Retail Leases Act 1994 (NSW) pathway failed, regardless of the Applicant’s broader allegations.

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Chapter 7: Final Judgment of the Court

The Tribunal dismissed the application against the First Respondents and the Third Respondent. The Tribunal then made procedural directions regarding costs submissions, including a timetable for written submissions and reply submissions and an indication that costs may follow the event if no submissions were filed.

In effect, the proceeding ended at the jurisdiction gate. The Tribunal did not determine whether the alleged outgoings breaches, bond issues, or conduct allegations were made out. The reason was not that those allegations were necessarily wrong; it was that the Tribunal found it had no jurisdiction to determine them as a retail tenancy claim under the Retail Leases Act 1994 (NSW) in the circumstances.

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Chapter 8: In-depth Analysis of the Judgment: How Law and Evidence Lay the Foundation for Victory

Special Analysis

This case is jurisprudentially valuable because it demonstrates how retail leasing protection can turn on a deceptively practical question: “What business did you actually run?” The Retail Leases Act 1994 (NSW) confers special protections, but it does not confer them on every shopfront business. It confers them on “retail shops” as defined, which in many cases requires the business to be a Schedule 1 prescribed business. The case shows the Tribunal applying a disciplined, evidence-based approach to prevent parties from retrospectively re-labelling the business to obtain statutory protections.

It also highlights a warning for litigants and practitioners: where the statutory jurisdiction depends on a factual characterisation, the evidence must be objective, contemporaneous, and consistent. Unsupported submissions, even well-argued, are vulnerable when they clash with documents created at the time of events.

Judgment Points

1. Jurisdiction is not waived by silence

Even though jurisdiction was not raised in the points of defence, the Tribunal made clear that it cannot ignore a jurisdiction problem. Jurisdiction is not a tactical choice. It is a legal limit on power. When jurisdiction is in doubt, the Tribunal must confront it. This prevents parties from obtaining orders that the Tribunal has no authority to make.

1. The “two-step” approach is not optional

The Tribunal adopted a structured method: first examine the lease’s permitted use; if the permitted use is unclear, mixed, or includes non-prescribed use, then examine actual use to determine predominant use. This ensures that jurisdiction is not determined by mere labels or convenient phrasing. It is determined by the real commercial substance of the operation.

1. The meaning of “predominant” is practical, not rhetorical

The Tribunal treated “predominant” as the “most conspicuous or effective portion of the use”. A specific percentage is not automatically determinative, but it can be highly influential. If the evidence shows one activity exceeds 50%, and everything else does not materially displace it, the Tribunal is entitled to treat that activity as predominant.

1. Corroboration is the currency of credibility

The Tribunal expressly gave little weight to affidavit assertions not corroborated by contemporaneous documents. This is a standard evidentiary principle, but its power is amplified in jurisdiction disputes. If jurisdiction turns on “what you did”, records like signage, concept plans, service menus, booking records, merchant transaction descriptors, marketing, and invoices often outweigh generalised recollection.

1. Language proficiency can become a forensic issue

Where a deponent has minimal English proficiency, an English affidavit that reads fluently can trigger scrutiny. The Tribunal treated that as a serious concern, particularly where the affidavit purported to recount precise English conversation in the first person. The lesson is procedural as well as substantive: ensure affidavits transparently record interpreter assistance and translation processes, and ensure the affidavit content aligns with the witness’s true capacity and evidence.

1. Renovation documents can decide a statutory classification battle

The contemporaneous design package, naming conventions, and signage concepts were treated as strong indicators of intended and actual use. This is commercially intuitive. Fit-out and branding commonly track the core revenue activity of the premises.

1. Submissions are not evidence

The Applicant’s submissions included detailed descriptions of beauty services and asserted that beauty constituted over 90% of services. The Tribunal rejected those submissions where there was no evidence to support them. This is a reminder that a persuasive narrative still requires proof.

1. Once jurisdiction fails, substantive claims do not get heard in that forum

The Tribunal did not decide the merits of the outgoings, bond, and conduct allegations. The case is a sharp example of how jurisdiction is a threshold that can end a dispute without a merits decision. That does not necessarily foreclose all legal avenues, but it ends the retail tenancy claim pathway in that Tribunal proceeding.

Legal Basis

The statutory foundation was the Retail Leases Act 1994 (NSW), particularly:

1. Section 71(1): a party or former party to a retail shop lease may lodge a retail tenancy claim with the Tribunal.

2. Section 3: definitions of “retail shop”, “retail shop lease”, and “retail shopping centre”, with emphasis on whether premises are used wholly or predominantly for a prescribed business in Schedule 1, or alternatively whether they are in a qualifying retail shopping centre.

The legal test applied was consistent with authority on identifying use: examine the lease; if the permitted use is mixed or unclear, analyse actual use to identify predominant use and then match it against Schedule 1.

Evidence Chain

Victory Point 1: The oral admission about business proportions

The Tribunal obtained oral evidence about approximate percentages. That evidence was treated as a direct indicator of predominant use and aligned with the broader documentary picture.

Victory Point 2: The affidavit references to remedial massage

The Applicant’s own affidavit contained statements describing the intended and actual use as remedial massage and describing the impact of losing massage rooms.

Victory Point 3: The renovation concept documentation

The renovation email subject line, project name, signage concept, and room layouts were all consistent with a massage business. Notably, “beauty” descriptors were absent in that contemporaneous bundle.

Victory Point 4: The third-party electrician statement

The Applicant’s electrician described the premises as a remedial massage centre, reinforcing massage as the core business identity.

Victory Point 5: The absence of corroboration for a beauty business

No service menus, price lists, booking records, marketing materials, receipts, merchant descriptions, staff rosters, or customer evidence were provided to substantiate the asserted predominance of beauty services. In a dispute where proof could reasonably be expected to exist, the absence of such proof was significant.

Victory Point 6: Failure to prove “retail shopping centre” pathway

The alternative pathway to be a retail shop under section 3 involves operating in a retail shopping centre meeting defined attributes, including common ownership or common lessor across at least five premises and promotion as a shopping centre. The evidence did not establish those attributes.

Judicial Original Quotation

The core ratio can be captured through two closely connected statements:

Having considered the evidence, the decision I have come to is that the predominant use of the premises is massage and not beauty shop or beauty therapist.

This statement is determinative because it is the factual finding that controls the statutory definition. Predominant use must match Schedule 1 for the premises to qualify as a retail shop under the relevant limb. Once the Tribunal found massage predominated, the statutory gateway closed.

Accordingly, I find that the premises are not a retail shop as defined, and consequently the Tribunal does not have jurisdiction to entertain the claim.

This statement is the legal consequence. It shows the Tribunal applying the statutory definition to the predominant use finding and concluding it has no power to decide the dispute as a retail tenancy claim.

Analysis of the Losing Party’s Failure

1. Over-reliance on labels rather than proof

The Applicant relied heavily on the lease phrase “Massage and Beauty” and on submissions asserting a beauty-service predominance. The Tribunal treated the descriptor “beauty” as ambiguous and required proof of actual use.

1. The critical mismatch between submission and oral evidence

The Applicant’s case was weakened by a divergence between the submission that beauty services constituted over 90% and the oral evidence suggesting massage constituted the majority.

1. Failure to produce expected business records

In a service business, evidence of service type and frequency is usually readily available: booking systems, payment records, advertising, menus, staff roles, training certifications, and photographs of fit-out use. The Tribunal noted the absence of corroboration.

1. The Applicant’s own documents pointed to massage

The renovation documents and third-party descriptions were generated at the time and reflected a massage identity. That evidence made it difficult to maintain a “beauty predominance” characterisation.

1. Affidavit credibility concerns reduced persuasive force

Where the Tribunal doubted whether affidavits truly reflected the deponent’s evidence and gave little weight to uncorroborated assertions, the Applicant lost the evidentiary platform needed to carry the onus.

1. Jurisdiction requires proof, not sympathy

Even where allegations are serious, jurisdiction is a legal boundary. The Tribunal treated the jurisdiction question as paramount and resolved it by reference to statutory definitions and the weight of evidence.

Reference to Comparable Authorities

1. Honings Bakery Pty Ltd v Cerialis Pty Ltd [2014] NSWCATCD 87

Ratio: The Tribunal applies a staged approach to jurisdiction: first examine the lease’s permitted use; if the use is not clear or includes multiple activities, assess the actual use to determine predominant use and whether it matches Schedule 1.

1. Targeted Property Investments Pty Ltd v Look Up Technologies Pty Ltd [2022] NSWCATAP 318

Ratio: Predominant use is assessed holistically. A strict percentage figure is not necessarily the sole determinant, but the Tribunal must still identify what use is predominant, including whether activities are ancillary to a prescribed business.

1. Robin Raju & Associates Pty Ltd v Kaplan Investments Pty Ltd [2021] NSWCATCD 90

Ratio: Where the permitted use includes both Schedule 1 and non-Schedule 1 activities, the Tribunal must examine actual use. Predominant use means the most conspicuous or effective portion of the use, and while a specific percentage is not always determinative, predominance requires more than 50%.

Key to Victory

The successful position was not built on a single clever argument. It was built on aligning law with evidence.

1. Pin the dispute to jurisdiction early and force the other party to prove it

Once jurisdiction became central, the Applicant carried the onus. The successful party’s strategy was to insist on the statutory gateway and highlight the absence of proof.

1. Use the Applicant’s own documents as the strongest evidence

The most persuasive evidence came from the Applicant’s contemporaneous renovation documents and the Applicant’s own descriptive references to massage.

1. Exploit the mismatch between oral evidence and written submissions

An inconsistency between what a witness concedes in the hearing and what submissions assert can be decisive when no corroboration exists.

1. Keep the statutory definition front and centre

The Retail Leases Act 1994 (NSW) defines the limits of protection. If the business is not a prescribed business and the shopping centre limb is not satisfied, the Tribunal’s retail tenancy jurisdiction does not arise.

Implications

1. Retail lease protection is not automatic

A shopfront lease does not become a protected retail shop lease merely because customers walk in. Protection depends on the statutory definition, including Schedule 1 categorisation and, in some cases, retail shopping centre attributes.

1. Your documents will later describe your business more honestly than your submissions

Fit-out plans, signage concepts, emails, and third-party contractor statements often reveal the true business identity. They tend to be more persuasive because they were created before litigation incentives existed.

1. If jurisdiction depends on predominant use, keep records from day one

Booking logs, service menus, receipts, merchant codes, marketing material and photographs can be decisive. Without them, a party may face a relatively high risk that the Tribunal will not accept a favourable characterisation.

1. Language and affidavit process must be handled with precision

If a witness has limited English, affidavits should transparently record interpreter assistance and translation. Otherwise, credibility damage can extend beyond a single paragraph and affect the whole case.

1. A loss on jurisdiction is not always the end of all remedies, but it is the end of that pathway

Jurisdiction failure means that forum cannot decide the merits under that statutory pathway. Parties must then consider alternative forums, causes of action, and procedural strategies.

Q&A Session

1. If the lease says “Massage and Beauty”, why was the Tribunal not satisfied it was a retail shop lease?

Because the permitted use included a non-prescribed activity and the descriptor “beauty” was ambiguous. The Tribunal therefore examined actual use and found massage predominated. Under the Retail Leases Act 1994 (NSW), the premises must be used wholly or predominantly for a Schedule 1 prescribed business unless the retail shopping centre limb is satisfied.

1. Could a business offering both beauty and massage still be protected under the Retail Leases Act 1994 (NSW)?

Yes, in many circumstances it can, but the risk increases when the evidence shows massage is the most conspicuous or effective portion of the use. Where activities are mixed, the Tribunal may treat objective records as decisive. A business that can prove beauty services predominate, with massage ancillary, tends to have a stronger jurisdiction foundation.

1. What is the most practical lesson for operators signing leases for mixed service businesses?

Choose permitted use wording carefully, align branding and fit-out documentation with the true primary business, and keep objective records of services provided. If there is a later dispute, the statutory classification can hinge on what your contemporaneous documents and records show as the predominant activity.

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Appendix: Reference for Comparable Case Judgments and Practical Guidelines

Chapter 9: Practical Positioning of This Case

1. Practical Positioning of This Case

Case Subtype: Commercial Leasing and Retail Lease Jurisdiction Dispute under the Retail Leases Act 1994 (NSW), with alternative misleading or deceptive conduct allegations

Judgment Nature Definition: Final Judgment on jurisdiction, resulting in dismissal without merits determination

2. Self-examination of Core Statutory Elements

Execution Instruction: The following standards are for reference only. Outcomes can vary depending on evidence quality, contemporaneous documentation, and the precise statutory framework engaged.

Category Selected: ④ Commercial Law and Corporate Law

Core Test 1: Contract Formation

1. Offer

• Identify whether one party made a clear proposal capable of immediate acceptance, including essential terms such as parties, premises, rent, term, permitted use, outgoings and security.

• In leasing contexts, draft leases and disclosure documents often evidence negotiations but may not be the final offer until execution.

1. Acceptance

• Determine whether the other party accepted the offer unequivocally, without introducing new terms.

• Execution and exchange of the lease commonly evidences acceptance.

1. Consideration

• Confirm that each party provided something of value: rent and covenants by the lessee, grant of possession and quiet enjoyment by the lessor.

1. Intention to create legal relations

• Commercial leases are generally presumed to involve intention, but disputes can arise where parties argue preliminary negotiations were not intended to be binding.

Core Test 2: Section 18 of the Australian Consumer Law

1. Conduct in trade or commerce

• Identify the conduct alleged: statements in disclosure documents, representations about outgoings, representations about bond handling, or representations about permitted use.

• Leasing transactions connected to commercial activity can constitute conduct in trade or commerce, but the precise characterisation depends on facts and the nature of the parties.

1. Misleading or deceptive conduct, or likely to mislead or deceive

• Identify the specific representation, the context, and whether it conveyed a misleading impression.

• Consider whether omissions, half-truths, or inconsistent documents could create a misleading impression.

1. Materiality and reliance

• Assess whether the representation was material to the decision to enter the lease or to pay amounts such as outgoings.

• Assess whether the claimant relied on the representation and whether that reliance was reasonable in the circumstances, noting professional advice, language assistance, and the content of the written contract.

1. Loss or damage caused by the conduct

• Quantify loss with evidence and show causal connection between the misleading conduct and the loss claimed.

Core Test 3: Unconscionable Conduct

1. Special disadvantage

• Identify whether a party suffered a special disadvantage affecting their ability to make a judgment in their best interests, such as limited English, lack of commercial sophistication, illness, urgent need, or significant power imbalance.

1. Knowledge and exploitation

• Consider whether the stronger party knew or ought to have known of the disadvantage and exploited it.

1. Conduct against good conscience

• Evaluate whether the transaction or enforcement is against good conscience, considering bargaining process, transparency, opportunity to obtain advice, and fairness of terms.

1. Remedies and relief

• Potential relief may include compensation, variation, or other orders depending on the forum and cause of action, but outcomes tend to be highly fact-specific.

3. Equitable Remedies and Alternative Claims

Execution Instruction: This section explores alternative paths where statutory avenues are unavailable or where jurisdiction is contested. These are for reference only and depend on proof and forum.

Promissory or Proprietary Estoppel

1. Clear and unequivocal promise or representation

• Identify whether a lessor or agent made a clear representation about critical matters such as outgoings, bond handling, permitted use acceptance, or future approvals.

1. Detrimental reliance

• Identify whether the lessee acted in reliance, such as paying money, investing in fit-out, taking on staff, or foregoing other opportunities.

1. Unconscionability in resiling

• Assess whether it would be unconscionable for the representor to depart from the representation, having regard to reliance and fairness.

1. Practical outcome

• Equity may prevent the representor from departing from the promise, or may award relief to avoid detriment, but relief tends to be tailored rather than automatic.

Unjust Enrichment or Constructive Trust

1. Benefit received at the claimant’s expense

• Identify whether the other party obtained a benefit such as improvements, fit-out value, or payments not legally owed.

1. Absence of juristic reason

• Consider whether there was a contractual or statutory basis for the benefit. If not, restitution may be arguable.

1. Against conscience to retain

• Evaluate whether retention without payment is against conscience, considering the contractual allocation of risk and any default or breach.

1. Potential remedies

• Restitutionary orders or recognition of an equitable interest can be possible in some scenarios, but the availability is fact-dependent and may be relatively constrained where a detailed contract governs the relationship.

Procedural Fairness

Although procedural fairness is more central in administrative decision-making, a closely related practical point in commercial disputes is whether the process by which key documents were prepared and presented was fair, transparent, and properly explained, especially where language barriers existed. Where a party asserts that their understanding was compromised, the evidentiary pathway tends to require objective proof, not merely assertion.

Ancillary Claims

If a retail tenancy statutory pathway fails due to jurisdiction, parties may consider:

1. Contractual claims in another jurisdictionally competent forum

• Breach of lease covenants, including repairs, quiet enjoyment, or outgoings clauses, depending on the contract terms and evidence.

1. Australian Consumer Law claims

• Misleading or deceptive conduct claims where the statutory elements can be established with evidence of representation, reliance and loss.

1. Tort-based claims in limited circumstances

• Negligent misstatement may be considered where representations were made carelessly and reliance was foreseeable, but outcomes depend on duty and causation.

4. Access Thresholds and Exceptional Circumstances

Execution Instruction: Identify hard thresholds and exceptional channels relevant to this dispute type. These are general reference points only.

Regular Thresholds

1. Retail lease jurisdiction threshold

• The premises must meet the statutory definition of “retail shop”. Where relying on the prescribed business limb, the premises must be used wholly or predominantly for one or more Schedule 1 prescribed businesses at the relevant time.

1. Predominant use threshold

• Predominance generally requires that the use is more than 50% and is the most conspicuous or effective portion of use, considered in the totality of evidence.

1. Retail shopping centre threshold

• If relying on the shopping centre limb, the statutory attributes must be satisfied, including the required cluster size, ownership or common lessor requirements, physical configuration, and promotion or general regard as a shopping centre.

1. Evidence threshold in mixed-use businesses

• Where a party asserts a prescribed business predominates, objective proof tends to be critical: records, marketing, menus, booking data, invoices, and contemporaneous communications.

Exceptional Channels

1. Mixed-use ambiguity may still permit jurisdiction if evidence supports a prescribed predominance

• If the permitted use is mixed and the actual use evidence strongly supports a prescribed business predominating, the Tribunal may be persuaded even where some non-prescribed activities occur.

1. Ancillary activity framing can succeed where supported by documents

• If massage is truly ancillary to beauty services, objective documentation should consistently portray beauty as the primary business. Without that, the argument tends to face a relatively high risk.

Suggestion

Do not abandon a potential claim simply because a threshold appears difficult. Carefully compare your evidence against the statutory definition and the predominant use indicators. In jurisdiction disputes, evidence planning often determines outcomes.

5. Guidelines for Judicial and Legal Citation

Citation Angle

It is recommended to cite this case in submissions involving:

1. Retail lease jurisdiction disputes under the Retail Leases Act 1994 (NSW), especially where permitted use is mixed and Schedule 1 coverage is contested.

2. Predominant use methodology, including the role of contemporaneous documents and concessions in oral evidence.

3. The onus of proof on the party asserting jurisdiction.

Citation Method

As Positive Support

Use this authority where your matter involves mixed-use descriptions in the lease and you need to argue that the Tribunal must examine actual use and determine predominant use by reference to evidence, including contemporaneous business documents.

As a Distinguishing Reference

If the opposing party cites this case, distinguish on facts by emphasising objective proof that your business is predominantly a Schedule 1 prescribed business, such as service menus, booking records, merchant transaction descriptions, marketing, staff qualifications, and fit-out consistent with the prescribed business.

Anonymisation Rule

When discussing party positions, use procedural titles such as Applicant and Respondent, consistent with the tribunal style, and avoid using real names.

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Conclusion

This judgment is a disciplined reminder that retail lease protection depends on statutory classification, and statutory classification depends on evidence. In mixed-use service businesses, your contemporaneous documents often decide whether you are inside or outside the protective regime. Everyone needs to understand the law and see the world through the lens of law. The in-depth analysis of this authentic judgment is intended to help everyone gradually establish a new legal mindset: True self-protection stems from the early understanding and mastery of legal rules.

Disclaimer

This article is based on the study and analysis of the public judgment of the NSW Civil and Administrative Tribunal (Pioneer Eagle Pty Ltd v Basha [2025] NSWCATCD 124), aimed at promoting legal research and public understanding. The citation of relevant judgment content is limited to the scope of fair dealing for the purposes of legal research, comment, and information sharing.

The analysis, structural arrangement, and expression of views contained in this article are the original content of the author, and the copyright belongs to the author and this platform. This article does not constitute legal advice, nor should it be regarded as legal advice for any specific situation.

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