Bondi Beach Astra Retirement Village Pty Ltd v Jean Edith Hohman as Executor of the Estate of the late Rita Doreen Borthwick - [2009] NSWSC 340

No judgment structure available for this case.

CITATION: Bondi Beach Astra Retirement Village Pty Ltd v Jean Edith Hohman as Executor of the Estate of the late Rita Doreen Borthwick [2009] NSWSC 340

HEARING DATE(S): 23 March 2009

JUDGMENT DATE :
30 April 2009

JUDGMENT OF: Harrison J

DECISION: Amended Summons dismissed

CATCHWORDS: ADMINISTRATIVE LAW – Consumer, Trader and Tenancy Tribunal Act, 2001 s 67 – appeal against decision of Tribunal on a question of law - whether operator of a retirement village failed properly to exercise options to purchase a unit from the owner/occupier of the unit in the retirement village contained in two deeds made between it and the occupier – whether owner/occupier had permanently vacated the unit – Retirement Villages Act 1999 s167 – whether the section applied to the options in favour of the operator in circumstances where the specified events triggering a right to exercise the options had not occurred – no error of law

LEGISLATION CITED: Civil Procedure Act 2005
Consumer, Trader and Tenancy Tribunal Act 2001
Retirement Villages Act 1999

CATEGORY: Principal judgment

PARTIES: Bondi Beach Astra Retirement Village Pty Ltd (Plaintiff)
Jean Edith Hohman as Executor of the Estate of the late Rita Doreen Borthwick (First Defendant)
Consumer Trader and Tenancy Tribunal (Second Defendant)

FILE NUMBER(S): SC 30110 of 2008

COUNSEL: R J Brender (Plaintiff)
M Holmes (First Defendant)

SOLICITORS: Stephen Wawn & Associates (Plaintiff)
Manion McCosker (First Defendant)

LOWER COURT JURISDICTION: Consumer Trader and Tenancy Tribunal of NSW

LOWER COURT FILE NUMBER(S): RV 06/59456

LOWER COURT JUDICIAL OFFICER : Member Balding

LOWER COURT DATE OF DECISION: 13 November 2007 and 22 July 2008

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

HARRISON J

30 April 2009

30110/2008 Bondi Beach Astra Retirement Village Pty Ltd v Jean Edith Hohman as executor of the estate of the late Rita Doreen Borthwick and the Consumer Trader and Tenancy Tribunal
JUDGMENT

1 HIS HONOUR: By its amended summons the plaintiff seeks an order, among other orders, that a decision of the Consumer Trader and Tenancy Tribunal ("the Tribunal") made on 13 November 2008 be set aside. The plaintiff is the operator of a retirement village situated at 34 Campbell Parade, Bondi Beach. The defendant is the executor of the estate of the late Rita Borthwick who died on 24 December 2005 ("the deceased"). At the date of her death the deceased was the proprietor of unit 23 in the retirement village ("the unit"). This case is about whether or not the plaintiff validly exercised an option to buy back the unit from the deceased before she died in accordance with the terms of certain agreements between them or whether the option had lapsed before that occurred. The dispute arises because the option price is lower than the market value of the unit.

2 The proper meaning and effect of certain terms of the agreements and their relationship, if any, to the provisions of the Retirement Villages Act 1999 ("the Act") are at the heart of the present dispute. Those issues arise in the context of an essentially uncontested factual matrix. An understanding of that factual background is therefore critical and is dealt with first.

Background

3 The deceased purchased the unit by agreement for the sale of land dated 13 October 1987 and became registered as the proprietor of the unit approximately six weeks later.

4 The deceased and the plaintiff entered into two deeds on 18 December 1987. The deceased is referred to as both the Proprietor and the Occupant in each deed. They are respectively the Buy Back Deed and the Occupancy Deed. The Buy Back Deed contains the following relevant terms:

(a) The Proprietor shall give to the [plaintiff] one month's notice in writing of his [sic] intention to sell, transfer or otherwise dispose of his [sic] unit. Such notice once given shall not be withdrawn or revoked without the consent in writing of the [plaintiff]

(i). . .

(c) The Occupant and the Proprietor hereby acknowledge that the rights conferred on the [plaintiff] or its nominee pursuant to this Clause 1 hereof constitutes an interest in land entitling the [plaintiff] to register [sic] a Caveat against the folio of the Register in the Land Titles Office relating to the unit.

5 The Occupancy Deed contains the following relevant terms:

"3. In consideration of the covenants and agreements on the part of the Occupant and the Proprietor herein contained . . . the [plaintiff] hereby grants to the Occupant during the currency of this agreement the right to the reasonable use and enjoyment in common with all other residents . . . at the Astra [of] the Communal Areas of the Astra . . .

. . .

(i) if the Occupant shall die;

6 On 9 June 2004 Stephen Wawn and Associates ("the plaintiff's solicitor") wrote to the deceased at the unit in the following relevant terms:

"You will recall that you purchased the abovementioned property from our client pursuant to a Contract dated the 13th October 1987 and on or about the 18th December 1987 completed that purchase and entered into a Buy-Back Deed and Occupancy Agreement with our client.

7 Upon receipt of a copy of that letter, the deceased's niece, Julie Hohman, telephoned the plaintiff's solicitor and spoke to Stephen Bray. According to Mr Bray, on 21 June 2004 Ms Hohman said to him at least the following:

"We promised [the deceased] that she can move back into the unit. We have a lot of papers to sort through and there is too much to deal with. We want to continue to pay levies and leave everything as is because [the deceased] wants to move back in and so we don't want to do anything at the moment. We want to leave things as they are."

8 On 9 August 2004 the plaintiff's solicitor wrote to the manager of Raine and Horne Real Estate Bondi Beach in the following terms:

"We enclose a copy of our letter to Mrs Rita Borthwick of 9 June 2004.

As discussed Mrs Borthwick has been admitted to a nursing home over 6 months ago. Her affairs are being looked after by her niece whose contact details are as follows:

Julie Hohman

** Bay Road Malabar NSW 2036

Tel **** ****

9 Mr Jaeger gave a statement that included reference to a telephone conversation with Ms Hohman in or about mid to late August 2004 in which she is alleged to have said to him at least the following:

"We don't know what's happening at the moment or whether or not [the deceased] is coming back to the unit. We will let you know."

10 Mr Jaeger also said that on or about 16 November 2004 he had a further conversation with Ms Hohman in which she said to him at least the following:

"We still do not know whether or not [the deceased] will be returning to the unit. We are not sure what we are going to do. We might want to move in ourselves."

11 On 20 December 2004 the plaintiff's solicitor wrote to the deceased care of Julie Hohman at the Bay Road, Malabar address in the following relevant terms:

"We refer to the above matter and note your advice that you have been granted a Power of Attorney to act on behalf of Mrs Rita Borthwick who was previously a resident of the Bondi Beach Astra Retirement Village and who remains the owner of Unit 23.

We note your advice that Mrs Borthwick now resides in a nursing home and she has been absent from the Bondi Beach Astra Retirement Village for over six months.

We are instructed by our client that at the time Mrs Borthwick purchased the unit from our client she entered into an Occupancy Agreement and Buy-Back Agreement which provided that in the event that Mrs Borthwick was absent from the Retirement Village and was admitted to a nursing home for over six months that our client would have the option to buy back her unit for $95,000.00.

Our client is of the opinion that the current market value of the unit is $350,000.00 and rather than requiring Mrs Borthwick to transfer the unit to our client for $95,000.00, our client is prepared to release its rights to buy back the unit for the difference between the current market value and the value at which our client is entitled to buy back the unit, ie: current market value = $350,000.00 less the buy back price of $95,000.00 = $225,000.00.

Our client is prepared to discount by $5,000.00 the amount it is prepared to accept in order to release its rights to buy back the unit. Therefore if Mrs Borthwick is prepared to pay our client the sum of $250,000.00 our client shall release its rights to buy back the unit.

This offer is open for acceptance until 5.00pm on Friday 14 January 2005. In the event that Mrs Borthwick wishes to proceed then we would be pleased if you could advise acceptance of this offer in writing to our office no later than 5.00pm on 14 January 2005 in order that the parties can settle the matter on Monday 31 January 2005.

12 On 21 January 2005 Manion McCosker ("the defendant's solicitor") wrote to the plaintiff's solicitor in the following terms:

"We act for Rita Borthwick and have been instructed to reply to your letter dated 20 December 2004 addressed to our client.

We confirm that our client is a patient of the Eric Callaway Nursing Home on a permanent basis and has not resided at the above premises [i.e. the unit] for more than 18 months.

13 On 4 May 2006 the defendant's solicitor wrote to the plaintiff's solicitor in the following relevant terms:

"We refer to our letter of 21 January 2005 and wish to advise that we are acting for Jean Edith Hohman the executrix of the will of Rita Doreen Borthwick deceased who died on 24 December 2005.

We note that your client failed to give notice to the deceased pursuant to section 167(1) of the Retirement Villages Act 1999 within the time allowed by that sub-section and that the option granted by the deceased to your client has therefore lapsed.

14 On 5 May 2006 the plaintiff's solicitor wrote to the defendant's solicitor in the following terms:

"We refer to your letter dated 4 May 2006. In your letter reference is made to your previous letter dated 21 January 2005. We confirm that we did not receive the aforementioned letter and request that you provide a copy to us at your earliest convenience. Please note that until recept of your letter our client was not aware that Ms Rita Doreen Borthwick had passed away.

15 A copy of the letter requested was provided on 10 May 2006.

16 On 18 May 2006 the plaintiff's solicitor wrote to the defendant's solicitor in the following terms:

"We note that in our letter dated 20 December 2004 addressed to the late Rita Borthwick's power of attorney, Ms Julie Hohman, our client offers the late Mrs Borthwick a release from her buy back agreement with BBA in consideration of $250,000. In the last paragraph of that letter we write:

"In the event that this offer is not accepted our client will exercise its rights under the Occupancy and Buy Back Agreement and require the unit to be re-sold to our client for the sum of $95,000.00."

17 The defendant's solicitor replied the following day in these terms:

1. At the time when the notice was given the deceased had permanently vacated the premises for more than 28 days.

2. The notice was not given to the deceased but to her attorney.

18 On 26 May 2006 the plaintiff's solicitor wrote to the defendant's solicitor in the following relevant terms:

"Your client has not permanently vacated the unit in accordance with section 8 of the Retirement Villages Act."

19 The defendant's solicitor replied by letter dated 21 June 2006 as follows:

"By virtue of section 8(d), where a person owns residential premises, the person is taken to have permanently vacated the premises, for the purposes of the Act, when the person dies or moves out of premises."

20 That letter prompted relevantly the following reply on 23 June 2006:

"Your reading of the Act is incorrect as that part of section 8(d) applies only to a person who 'owns the premises or is taken to be a resident of the premises by the operation of section 4(2) or is taken to be an owner because of section 150(1)(b).

Neither, the late Mrs Borthwick, nor the estate of the late Mrs Borthwick, [falls] into the categories referred to in [section] 4(2) or section 150(1)(b).

21 The defendant's solicitor replied by letter dated 23 June 2006 as follows:

"We do not dispute the statement in the third paragraph of your letter that section 8(d) applies only to a person who owns (emphasis added) the premises or (emphasis added) is taken to be a resident by the operation of section 4(2). Nor do we dispute that section 150(1)(b) extends the meaning of 'owner' (within part 10) to include certain persons who are not otherwise owners.

22 The penultimate letter in this series was dated 28 June 2006, written by the plaintiff's solicitor, in these terms:

"Our client asserts that the late Mrs Borthwick has not 'permanently vacated' the unit pursuant to section 8(d) as that sub-section only operates with respect to 'owners' or 'residents' who do not have ownership rights with respect to the unit. Otherwise, section 8(b) would be rendered nugatory."

23 The solicitor for the defendant concluded this exchange of correspondence with a letter dated 6 July 2006 as follows:

"It is clear that section 8(b) applies only to residents who do not own residential premises since an owner (as defined in s.7) or his or her legal personal representative does not have any obligation to deliver vacant possession of the residential premises to the operator of the retirement village. Our client denies that she is required to give vacant possession of the unit to your client as claimed in your letter."

24 Correspondence that followed related to the subject matter of mediation and then to proceedings in the Tribunal.

The Retirement Villages Act 1999

25 Both parties have emphasised the provisions of the Act. The following provisions should be noted:

" 4 ' residence contract' means a contract that gives rise to a residence right

' residence right ' of a person means the person's right to occupy residential premises in a retirement village, being a right arising from a contract:

(a) under which the person purchased the residential premises, or

(b) under which the person purchased shares entitling the person to occupy the residential premises, or

(i) that is entered into under Division 5 of Part 10, or

(d) in the form of any other contract of a kind prescribed by the regulations,

or any other right of a kind prescribed by the regulations.

' service contract ' means a contract under which a resident of a retirement village is provided with general services or personal services in the village.

' village contract ' means:

(a) a residence contract, or

(b) a service contract, or

(c) a contract under which a resident of a retirement village obtains the right to use a garage or parking space, or a storage room, in the village, or

(d) any other contract of a kind prescribed by the regulations for the purpose of this definition."

*****

" 7 ' Owner ' of residential premises

(a) the registered proprietor of the premises, or

*****

" 8 ' Permanent vacation' of residential premises

(a) the person (or another person on behalf of the person) delivers up vacant possession of the person's residential premises to the operator of the village following the person's vacation of the premises, or

(b) the executor or administrator of the person's estate delivers up vacant possession of the person's residential premises to the operator of the village following the person's death, or

(c) the Tribunal makes an order under section 143 declaring that the person's residential premises were abandoned by the person (and the person is taken to have permanently vacated the premises on the day specified in the order), or

*****

" 128 Order of Tribunal

(a) . . .

*****

" 150 References to 'owner' and sale of 'residential premises'

(a) who is taken to have a residence right in respect of the premises in accordance with section 4 (2), or

(i) is in the form of a registered long-term lease, and

(2) In this Part, a reference to the sale of "residential premises" occupied under a residence contract referred to in subsection (1) (b) is taken to include a reference to the sale of the residence right in respect of the premises.

Real Property Act 1900

(a) has a term of at least 50 years (inclusive of any option to renew), or

*****

" 167 Options

(1) An operator of a retirement village who holds an option to purchase any residential premises from a resident of the village must decide whether or not to exercise the option, and must give the resident written notification of that decision, no later than 28 days after the resident permanently vacates the premises (or, if the resident has not lived in the premises, 28 days after the resident notifies the operator in writing that the premises are for sale).

(2) If the operator does not give the notification required by subsection (1) within the time allowed by that subsection, the option lapses.

26 The parties also referred me to certain other sections of the Act. It is unnecessary to record these.

Grounds of Appeal

27 The plaintiff raised six grounds of appeal against the decision of the Tribunal. They were as follows:

(1) The Tribunal erred in law in holding that the Tribunal had jurisdiction in circumstances where the applicant below sought only declaratory relief.

(2) The Tribunal erred in law in holding that the Buy Back Agreement between the plaintiff and the deceased dated 18 December 1987 was a "village contract" as defined within s 4 of the Act and consequently that the Tribunal had jurisdiction under s 128(1)(b) of the Act to set aside a provision of that agreement.

(3) The Tribunal erred in holding that the plaintiff had not validly exercised its option to purchase the unit in accordance with the Buy Back Agreement by way of notice dated 18 May 2006 to the solicitors for the defendant in response to the defendant's intention to sell the unit dated 4 May 2006.

(4) The Tribunal erred in finding that the deceased "moved out" of the unit in 2002 in circumstances where her goods remained in the unit and representations were made by the holder of her power of attorney on her behalf that she might return and wished that possibility to remain .

(I note that the italicised portion of this ground of appeal is for all practical terms identical to the sixth ground of appeal and I will disregard it for the purposes of my consideration of this ground of appeal).

28 Although these proceedings were originally commenced by summons filed in this Court, they were transferred to the District Court of New South Wales by order made on 2 October 2008. By notice of motion filed in the District Court of New South Wales on 20 October 2008 the plaintiff sought an order pursuant to s 144 of the Civil Procedure Act 2005 that the proceedings be transferred to this Court. That motion was apparently heard on 31 October 2008 and the order was made.

29 Section 67 of the Consumer, Trader and Tenancy Tribunal Act 2001 provides relevantly as follows:

" 67 Appeal against decision of Tribunal with respect to matter of law

(1) If, in respect of any proceedings, the Tribunal decides a question with respect to a matter of law, a party in the proceedings who is dissatisfied with the decision may, subject to this section, appeal to the District Court against the decision.

(2) An appeal is to be made in accordance with the rules of the District Court. The rules of the District Court may provide that an appeal (or such classes of appeal as may be specified in the rules) may be made only with the leave of the Court.

(a) make such order in relation to the proceedings in which the question arose as, in its opinion, should have been made by the Tribunal, or

30 Section 67 formerly provided for appeals on a question of law to be heard in this Court. The decision of the Tribunal was delivered on 22 July 2008, which was prior to amendment of the section later that year. Presumably that is why the parties agreed to the transfer of the proceedings to this Court. I was not asked to determine any issue concerning the appropriateness or otherwise of this Court as the proper forum, but instead was asked to deal with the matter in accordance with s 67 in its original terms.

The Tribunal decision

31 The Tribunal posed for itself the following issues for determination:

(1) When did [the deceased] permanently vacate the premises within the meaning contemplated by s 167?

(2) Did [the plaintiff] give written notice no later than 28 days after [the deceased] so vacated?

32 Dealing with the first issue the Tribunal referred to s 8 for the meaning of "permanent vacation". It observed that there was no dispute that the deceased was an owner within the meaning of s 7 and therefore an owner for the purposes of s 8. The Tribunal's reasoning was thereafter as follows:

"The [plaintiff's] case is that [the deceased] had not 'moved out' of the premises prior to her death. At all relevant times [the deceased] had left her goods in the premises and had made it known through her attorney Ms Hohman 'that she might return and wished that possibility to remain'.

In the alternative the case was that the estate of [the deceased] was precluded from making any statement to the contrary as a result of the representations that were made to that effect upon which the [plaintiff] relied.

Dealing with the second point first, I am not satisfied that it can be said that [the deceased's] estate is precluded from claiming that she has moved out as a result of the conversations Ms Hohman had either with Mr Jaeger or Mr Bray. Even on the [plaintiff's] submissions the highest it was put was that [the deceased] wished to return and therefore there was a possibility that she may return. This is not sufficient in my view to create some type of barrier or estoppel. The nature of the statement is not strong, the effect is vague, and there is no evidence from any officer of the [plaintiff] to support any assertion that the [plaintiff] changed its position in reliance on the statement.

It was submitted that the reference to moving out cannot be given such a broad construction to allow it to apply in these circumstances. To do so would mean that someone would be taken to have moved out, whether it was temporary or permanent, whether or not the [plaintiff] was told, and whether or not they intended or wished to return.

What I am required to do is determine on the facts before me when viewed objectively it can be said that [the deceased] permanently vacated the premises. This involves a determination of whether [the deceased] can be said to have moved out. The term, unlike so many others is not defined in the Act. I have not been able to locate a 'legal' definition of the term. Dictionary definitions of 'move' include 'to change one's abode'… and 'move from one residence to another' …

The evidence is clear that [the deceased] had not 'lived' at the premises since 2002 when she moved in with her sister and niece at their home. From that time until her death she lived with her sister and niece, spent some time in a private hospital until she moved into a nursing home in 2004 where she lived until she died. She had changed her abode in 2002. This is sufficient in my view to permit a finding that she had moved out of the premises. This is the case regardless of what her intentions or wishes were about moving back to the premises regardless of what may have been said to the [plaintiff] in this regard.

33 Dealing with the second issue the Tribunal said the following:

"The evidence does not establish the date on which [the deceased] moved out. It was said to be in 2002. If I am required to, given the state of the evidence, it would be open to me to find that she permanently vacated the premises as late as 31 December 2002. Pursuant to s 167, the [plaintiff] must decide whether or not to exercise the option and must give the resident written notification of that decision not later than 28 days after the resident permanently vacates the premises.

The [plaintiff] submits that they gave notice of intention to exercise the option by the letter of [the plaintiff's solicitor] of 18 May 2006. That notice was sent within the requisite 28 days from when the [plaintiff] received notice of [the deceased's] death, as notified in the letter of [the defendant's solicitor] of 5 May 2006. The [plaintiff] submits that the reference to 'decide' and 'decision' means that the village operator must know that the time of the exercise of the option has come. Clearly they would have to have some knowledge of the happening of the event in order to exercise the option, however how they gain that knowledge is not something I am required to address in determining the matter before me. The effect of s 167 is to fix a time by which notice must be given which runs from one of the events specified in the section, in this case when the resident permanently vacates the premises. The section does not make any reference to the state of knowledge of the village operator of such an event.

It was submitted it cannot have been intended by the legislature that the executrix take advantage of her own wrong in suppressing details of the death until four months later and presumably thereby preclude the [plaintiff] from exercising its rights.

The submission is not accepted. There is no evidence to establish that any steps were taken by Mrs Hohman to suppress details of [the deceased's] death. I accept for reasons of practicality a village operator may be in a difficult position to protect its interests in relation to such matters however there is nothing in the Act or otherwise to suggest that Mrs Hohman as executrix or otherwise was under any sort of obligation to notify the [plaintiff] of [the deceased's] death, the fact that time may start to run from such an event for purposes of the Act does not in my view create a positive obligation for disclosure.

34 Finally the Tribunal was able to deal with the third issue in a single paragraph as follows:

"Having been satisfied that the [plaintiff] did not give notice of its decision to exercise the option no later than 28 days after [the deceased] permanently vacated the premises as required by s 167(1) then s 167(2) operates so that the option contained in the Occupancy Agreement and Buy Back Agreement lapses."

35 The orders that were made by the Tribunal on 22 July 2008 were ultimately in these terms:

"(a) The rights conferred by sub clauses 1(b) and 1(c) of the Deed dated 18 December 1987, the buy back deed made between Bondi Beach Astra Retirement Village Pty Ltd and Rita Borthwick have lapsed, the clauses are therefore void and are set aside.

Plaintiff's submissions

36 The first and second grounds of appeal, challenging the jurisdiction of the tribunal, were not pressed. This is recorded in the following discussion appearing at pages 8 and 9 of the transcript:

"HIS HONOUR: So you don't take issue that there was a dispute joined between the parties, which was [within the] jurisdiction [of] the tribunal? Or do you?

*****

"HIS HONOUR: I just had a look at the summons. What prayers for relief do you press, if not all of them? Or do you press all of them?

37 The plaintiff's submissions did not deal individually with the remaining four grounds of appeal. To some extent the plaintiff's submissions were not referable to the grounds of appeal as formulated at all. The plaintiff submitted that s 167 of the Act did not apply to the Buy Back Deed. It next contended that, in relation to the Occupancy Deed, and the Buy Back Deed if applicable, the deceased never permanently vacated the unit within the meaning of s 167 and s 8 of the Act. Alternatively, if the deceased did permanently vacate the unit, it occurred in the circumstances of this case only upon the death of the deceased and not otherwise. The plaintiff says that it gave notice to the deceased (or her legal personal representative) within 28 days of the first possibility of doing so in accordance with s 167. Accordingly, as far as I can determine, the plaintiff's expanded submissions, when allocated to the individual grounds of appeal, were effectively as follows.

Grounds 3 and 4

38 The Buy Back Deed operated to require or to oblige the deceased to give notice to the plaintiff, in the event that she intended to sell, transfer or otherwise dispose of the unit, of her intention to do so. The evidence establishes that the deceased did not form, or at least did not give notice of, such an intention at any time before on or about 4 May 2006 when the defendant's solicitor wrote to the plaintiff's solicitor advising, "[i]t is our client's intention to sell the property". (The importance of the plaintiff's response to this letter, presumably captured within the terms of ground (3), can be put to one side). The facts that give rise to the operation of the terms of cl 1 of the Buy Back Deed were therefore not engaged until 4 May 2006 at the earliest. The plaintiff identified the issue as being whether that agreement is a "village contract" as defined in s 4 of the Act so as to attract the powers exercised by the Tribunal in s 128(1)(b) of the Act.

39 The plaintiff would appear to submit that the Tribunal's finding must have been that the Buy Back Deed was both a village contract and that it conflicted with the Act or the regulations. This is said to follow from the terms of s 128(1)(b) which is the only source of power for the Tribunal to make orders setting aside a provision of a village contract. That submission needs to be considered in the light of s 128(2) of the Act that provides:

"(2) Nothing in this section limits the orders that the Tribunal may make under this Act."

40 That subsection is broad enough in terms to empower the Tribunal to determine that clauses in a village contract are void because they have lapsed and to set them aside for that reason without the limits that are attached to an exercise of power under s 128(1)(b) of the Act. In this respect the Tribunal made specific reference to a conflict between a provision of a village contract and the Act or the regulations in the following sentence on page 3 of its Reasons:

"Section 128 of the Act gives the Tribunal power to vary or set aside a provision in the village contract that conflicts with the Act or the regulations."

41 That conflict, however, is nowhere clearly identified in the reasons that are given. It does not to my observation appear in or emerge from the two paragraphs that follow immediately after the sentence just quoted that are themselves in these terms:

"The definition of 'resident' means a retired person who has a residence right in respect of residential premises in the village and includes a former occupant. I accept the submission of the [defendant] that the definition of former occupant is broad enough to cover both Mrs Borthwick and the executor of her estate Mrs Jean Hohman. This finding rests on a finding that Mrs Borthwick permanently vacated the premises as she owned the premises and had 'moved out' within the meaning of s 8(d) of the Act of which more will be said later.

42 However, subject to what is referred to below at par [49], the Tribunal does not seem to have decided the questions that it posed for itself by reference to s 128 at all. This is because the Tribunal would appear to have formed the view that the plaintiff's options "lapsed" by reason of the operation of s 167, so that a determination that any clause in either agreement was void or was to be set aside became otiose.

43 The plaintiff submitted that s 167 was not directed to the option in the Buy Back Deed because that option only arose in the event that the deceased or her estate decided to dispose of the unit and gave the requisite notice. This need not have any connection with vacation of the unit or death of the occupier and is in effect a right of first refusal that need never arise. The plaintiff submitted that the Act was not intended to require someone in its position to give notice of an intention to exercise an option in such circumstances.

44 The Tribunal proceeded upon the basis that s 167 applied to the Buy Back Deed. This seems to follow from the terms of the first issue for determination. The plaintiff's challenge would therefore appear to be directed to the Tribunal having taken that approach, upon the basis that even though s 167 refers to options generally, the section could not have been intended to operate, and in practical terms could not operate, without taking into account the time when the options might be exercised, or to the events that may give rise to the right to exercise them. In the case of the plaintiff's option contained in the Buy Back Deed, that was the giving of notice of intention to sell, transfer or otherwise dispose of the unit.

45 The relevant conclusion that the Tribunal arrived at was that the deceased moved out of the unit in 2002 and by reference to the answer to the second issue it found that this occurred no later than 31 December 2002. This is significant because the deceased did not on the evidence trigger the operation of the Buy Back Deed at any time prior to that date by giving notice of an intention to sell, transfer or otherwise dispose of her unit. In the events that occurred, therefore, the Buy Back Deed had nothing to do with what occurred prior to 31 December 2002.

46 The finding that the deceased was an owner of the unit who moved out of the premises in a way that satisfied the definition of "permanently vacated" in s 8(d) of the Act is a question of fact that was clearly open to the Tribunal. It is not a question of law and as such not something that can now be contradicted or otherwise challenged by the plaintiff in these proceedings. Moreover, that factual finding would appear to me to stand or fall unconnected to whether or not the ultimate issue was correctly decided by reference to the operation of s 167.

47 It is in these circumstances that the plaintiff then challenged the Tribunal's finding that, as a matter of law, s 167 could apply to an option that had not become capable of being exercised according to its terms. In other words, as I apprehend the submission, s 167 could not operate in a way that required the plaintiff to exercise an option within 28 days of the events referred to in that section if the particular option in question could not have been exercised at that time. Section 167 could not on this argument have any application to the option in the Buy Back Deed.

48 Although the issue is to some extent moot, having regard to the view I have formed with respect to the operation of s 167 upon the option contained in the Occupancy Deed, it seems to me that the terms of s 167 are wide enough to be, and are, engaged as a matter of fact in the present case. This is discussed in more detail below, but the literal terms of the section are met and the section appears to operate without qualification. This is emphasised by the terms of s 167(3). The plaintiff held an option contained in the Buy Back Deed and even if it had not otherwise arisen for exercise by the plaintiff when the deceased permanently vacated the unit, the plaintiff was required to comply with the terms of s 167(1) and it did not do so. The option therefore lapsed.

49 It may be that the reference by the Tribunal to s 128 was directed to the apparent or possible conflict between the operation of s 167 in early 2003 and its operation upon the option in the Buy Back Deed, which had not by then arisen for exercise and which could not then have been exercised according to its terms. That would on one view explain the reference in the orders made by the Tribunal to setting aside the specified clauses in each agreement. It would not explain the reference to the finding that the clauses were void. It is unnecessary to resolve that question.

50 The plaintiff has not in my opinion established that the Tribunal made the error described in the third ground of appeal. The fourth ground of appeal challenges a finding of fact.

Ground 5

51 As already mentioned, the plaintiff was the operator of a retirement village that literally within the words used in s 167 held options to purchase the deceased's unit from her. The option under the Buy Back Deed did not arise for consideration until on or after 4 May 2006 as earlier discussed. The option under the Occupancy Deed could not have arisen until the happening of one of the events in cl 7. Upon the facts in the present case, the only events that could have triggered the plaintiff's obligation to give notice of exercise of its option under the Occupancy Deed would have been the death of the deceased (7(a)(i)) or her having become a permanent occupant of a nursing home (7(g)). Neither of these events had occurred within 28 days of the deceased permanently vacating the unit as found by the Tribunal or until some considerable time thereafter.

52 The terms of s 167 required the plaintiff to decide whether or not to exercise that option and to give notice to the deceased of that decision no later than 28 days after the deceased had vacated the premises. On the Tribunal's finding, that should have occurred no later than 28 days following 31 December 2002. That did not happen and the Tribunal concluded in accordance with s 167(2) that the option lapsed.

53 The burden of the plaintiff's complaint about that conclusion is encapsulated within the terms of the fifth ground of appeal. That is to say, the plaintiff appears to argue that it makes no sense to apply the literal terms of s 167 to the facts of this case because even though the plaintiff had an option under the Occupancy Deed to purchase the deceased's unit as anticipated by the section, it had not come into effect because she had neither died nor become a patient of a nursing home on a permanent basis. The terms of the option in the Occupancy Deed do not speak about the deceased permanently vacating the premises in the way that s 167 does. According to this argument, the section does not apply to the plaintiff's option in the first place, and the events of 2004 and following, such as the notification of the death of the deceased and the grant of probate on 4 May 2006, become the relevant events, rather than the events in the 28 days following 31 December 2002, in the second place.

54 The plaintiff's written submissions included the following:

"The evident purpose of s 167 is to give comfort to the resident that the [plaintiff] will not delay its decision about whether or not to exercise an option for a long time after cessation of occupation, and hence gives the resident some certainty that when she no longer wishes to reside in the village she will know quickly whether she needs to start the sale process or whether the [plaintiff] will be exercising the option. That is sensible in the case of an option that arises upon the resident vacating, like the Occupancy Agreement which conditions the option on the cessation of the right to reside (see clauses 7 and 8). The words of the section include 'no later than 28 days after the resident permanently vacates'."

55 The facts as found by the Tribunal, however, included that the deceased permanently vacated the unit. Those are also the words that trigger the operation of the section. The deceased was not required by the express terms of s 167 to give notice of that fact. Additionally, the implication is that she did not need to do so inasmuch as the section specifically refers to the giving of notice in limited circumstances that do not presently apply. It is not as if the section did not contemplate the giving of notice to the plaintiff in some circumstances. It clearly did not require the giving of notice to the plaintiff in the present circumstances. The Tribunal was correct in my opinion to observe that the "section does not make any reference to the state of knowledge of the village operator of such an event" – that is, when the deceased may have permanently vacated the unit.

56 The plaintiff submitted that the words "decide" and "decision" in s 167(1) contemplated the receipt by the plaintiff of knowledge or information upon or with the benefit of which the relevant decision might be made, even if there was no requirement for the deceased specifically to provide it by notice. In this case that would not be until the permanent vacation of the unit by the deceased came to the attention of the plaintiff in some way. For the reasons dealt with in the preceding paragraph I disagree with that submission. The section does not say so and it does not follow as a matter of necessary implication. I consider that the paragraph of the Tribunal's decision cited above containing the following extract, and that extract in particular, contains the proper emphasis:

"The effect of s 167 is to fix a time by which notice must be given which runs from one of the events specified in the section, in this case when the resident permanently vacates the premises. The section does not make any reference to the state of knowledge of the village operator of such an event."

57 The plaintiff's fifth ground of appeal ignores the fact that the Tribunal decided that the plaintiff lost its right to exercise the option contained in the Occupancy Deed in early 2003, or within 28 days of the deceased having permanently vacated the unit. The events of later years to which the plaintiff seeks to draw attention are beside the point. It is also in my opinion irrelevant that s 167 may operate to require the plaintiff to exercise its option in circumstances other than, or even at some time much earlier than, those that condition the operation of the right to exercise the option in the Occupancy Deed. By virtue of s 167(3), the section has effect "despite any term of the option". For whatever reason, the section obliges the holder of an option of the type in fact held by the plaintiff to exercise it within 28 days of the deceased permanently vacating the unit. Indeed, counsel for the plaintiff conceded, properly in my view, that s 167(1) on its face quite literally applied to any option held by the plaintiff to purchase the unit from the deceased contained in any agreement. There is no issue that as a question of fact the plaintiff did not exercise an option within 28 days of 31 December 2002. I am not satisfied that the Tribunal made an error of law in holding that s 167 operated in this way.

58 This is in my view sufficient to dispose of the fifth ground of appeal.

Ground 6

59 The sixth ground of appeal fails for related reasons. The so-called estoppel is based on separate conversations between Mr Jaeger and Ms Hohman and Mr Bray and Ms Hohman in 2004 to the effect that the deceased was contemplating moving back into the unit and that Ms Hohman had promised the deceased that she could do so. If any reliance were able to be placed on representations or statements such as these, the relevant period to which attention would need to be drawn would in fact be the period prior to the time when the Tribunal found that the options had lapsed. That was in early 2003. Nothing that the deceased or her representative may have done the following year could found an estoppel of the kind upon which the plaintiff appears to rely. The Tribunal also referred to the absence of any evidence that the plaintiff altered or changed its position to its detriment in reliance on these statements. That absence in unsurprising in the events that occurred.

60 This is in my view sufficient to dispose of the sixth ground of appeal.

Conclusion

61 I am not satisfied that the Tribunal made any of the errors of law contended for by the plaintiff.

62 It follows that the plaintiff's amended summons should be dismissed. I will hear the parties on the question of costs if thought necessary.

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Citations

Bondi Beach Astra Retirement Village Pty Ltd v Jean Edith Hohman as Executor of the Estate of the late Rita Doreen Borthwick [2009] NSWSC 340

Most Recent Citation

Bondi Beach Astra Retirement Village Pty Ltd v Hohman [2010] NSWSC 260

Cases Citing This Decision

2

Bondi Beach Astra Retirement Village Pty Ltd v Hohman [2010] NSWCA 38

Bondi Beach Astra Retirement Village Pty Ltd v Hohman [2010] NSWSC 260

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CITATION:	Bondi Beach Astra Retirement Village Pty Ltd v Jean Edith Hohman as Executor of the Estate of the late Rita Doreen Borthwick [2009] NSWSC 340
HEARING DATE(S):	23 March 2009
JUDGMENT DATE :	30 April 2009
JUDGMENT OF:	Harrison J
DECISION:	Amended Summons dismissed
CATCHWORDS:	ADMINISTRATIVE LAW – Consumer, Trader and Tenancy Tribunal Act, 2001 s 67 – appeal against decision of Tribunal on a question of law - whether operator of a retirement village failed properly to exercise options to purchase a unit from the owner/occupier of the unit in the retirement village contained in two deeds made between it and the occupier – whether owner/occupier had permanently vacated the unit – Retirement Villages Act 1999 s167 – whether the section applied to the options in favour of the operator in circumstances where the specified events triggering a right to exercise the options had not occurred – no error of law
LEGISLATION CITED:	Civil Procedure Act 2005 Consumer, Trader and Tenancy Tribunal Act 2001 Retirement Villages Act 1999
CATEGORY:	Principal judgment
PARTIES:	Bondi Beach Astra Retirement Village Pty Ltd (Plaintiff) Jean Edith Hohman as Executor of the Estate of the late Rita Doreen Borthwick (First Defendant) Consumer Trader and Tenancy Tribunal (Second Defendant)
FILE NUMBER(S):	SC 30110 of 2008
COUNSEL:	R J Brender (Plaintiff) M Holmes (First Defendant)
SOLICITORS:	Stephen Wawn & Associates (Plaintiff) Manion McCosker (First Defendant)
LOWER COURT JURISDICTION:	Consumer Trader and Tenancy Tribunal of NSW
LOWER COURT FILE NUMBER(S):	RV 06/59456
LOWER COURT JUDICIAL OFFICER :	Member Balding
LOWER COURT DATE OF DECISION:	13 November 2007 and 22 July 2008