Commissioner for Fair Trading v Tschannen - [2004] NSWSC 67

No judgment structure available for this case.

CITATION: Commissioner for Fair Trading v Tschannen & Ors [2004] NSWSC 67

HEARING DATE(S): 22-26, 29 September 2003
3, 8 & 10 October 2003

JUDGMENT DATE:
18 February 2004

JURISDICTION:
Common Law

JUDGMENT OF: Sperling J at 1

DECISION: Counsel should bring in short minutes of order, including as to costs.

CATCHWORDS: Consumer protection - fair trading - power to make declarations and grant injunctions based on breaches of the Residential Parks Act 1998 - whether breaches of that statute - declarations - other relief refused

LEGISLATION CITED: Consumer, Trader & Tenancy Tribunal Act 2001, s52
Corporations Act 2001
Fair Trading Act 1987, s4, s42, s43, s65, s66, s72
Residential Parks Act 1998, s3, s5, s8, s9, s10, s11, s20, s30, s41, s48, s53, s54, s61, s62, s63, s64, s67, s80, s82, s85 s87, s88, s89, s90, s98, s99, s100, s101, s102, s113, s121, s127, s128, s143, s144, s147
Residential Tribunal Act 1998 (repealed), s47A

CASES CITED: Australian Competition & Consumer Commission v Goldy Motors Pty Ltd [2000] FCA 1885
Australian Competition & Consumer Commission v IMB Group Pty Ltd [1999] FCA 313

PARTIES :
Commissioner for Fair Trading
Warren Eric Tschannen
Blackington Pty Ltd
Caraco Pty Ltd

FILE NUMBER(S): SC 13202/02

COUNSEL: Ms JAD Needham for the Plaintiff
Mr IM Wales SC for the Defendants

SOLICITORS: Office of Fair Trading for the Plaintiff
Graham Cochrane, Solicitor for the Defendants

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

Sperling J

Wednesday, 18 February 2004

13202/02 Commissioner for Fair Trading v Warren Eric Tschannen & Ors
Judgment

1 His Honour: These proceedings relate to a caravan park at Banora Point on the north coast of the state.

Parties

2 The proceedings are brought by the Commissioner for Fair Trading as plaintiff.

3 Caraco Pty Limited, the third defendant, is the owner of the land on which the caravan park is situated and is the proprietor of the business. It owns all of the assets of the business as well as the land.

4 Blackington Pty Limited, the second defendant, has been described as the management company associated with the business. It is, in effect, a service company which employs the staff who conduct the business for Caraco.

5 The first defendant, Mr W E Tschannen, is employed by Blackington. He is the general manager of the business. He is also the sole director and sole shareholder of Caraco and the director of Blackington. He is, in effect, the owner and operator of the enterprise.

6 At the hearing before me, Ms J Needham of counsel appeared for the plaintiff and Mr I Wales of senior counsel appeared for the defendants.

Strike out application

7 Shortly before the trial, the defendants filed a notice of motion seeking orders that paragraphs 13, 16, 17 and 18 of the summons be struck out. A written argument was submitted by counsel for the defendants in support of the notice of motion. A written argument in response was submitted by counsel for the plaintiff.

8 I stood the notice of motion over to the hearing of the cause. On the first day of the hearing, I decided not to determine the notice of motion before the hearing of the cause, with the consequence that the motion would not be dealt with as a strike out application but that the arguments advanced in relation to it would be available for use in the cause. Those arguments are referred to in this judgment.

Background facts

9 A convenient way of presenting the background of the case in further detail is to quote from the document “Plaintiff’s contention of fact”, submitted by counsel for the plaintiff in final address. In doing so, I have edited out some passages which prove not to be material and other passages which are contentious or are better treated as argument. I apprehend that what is now quoted is common ground.

The Park

· Banora Point Caravan Park (also known as Tweed Waters Tourist Park) (“the Park”) is located at 2 Pacific Highway, Banora Point, on the banks of the Tweed River and comprises some 10 acres. It is a “residential park” within the meaning of the Residential Parks Act 1988, in that it is a “caravan park”. It is made up of a mixture of relocatable housing, cabins and caravans. Some 39 residents own their own homes which are installed on sites at the Park, and the balance of the total of 200 sites are occupied by people who rent cabins and vans belonging to the Park.

· The Park is laid out on a narrow strip of river-front land at Banora Point. At the southern, road-front section, is the Park entrance, office, caretaker’s cottage and boom gates. There is a low brick wall about three-quarters of the way along the park which marks the boundary of what is referred to in the evidence as the “relocatable section” – that is, a section of the park which was formerly comprised mainly of relocatable homes owned by permanent residents. The relocatable section takes up the most northerly quarter of the Park. The balance of the Park is made up of internal roads, along (and upon) which are placed caravans, cabins, and some relocatable homes. A map of the Park became Exhibit A.

The Parties

· The plaintiff was formerly known as the Director-General of the Department of Fair Trading, but that Department has, since the commencement of these proceedings, been subsumed into the Department of Commerce. The plaintiff is now known as the Commissioner for Fair Trading. The consents required by the provisions of the Fair Trading Act for the orders sought in these proceedings are annexed to an affidavit of Michael Robert Finch made on 3 February 2003. The Minister for Fair Trading administers both the Fair Trading Act and the Residential Parks Act, and the plaintiff is able therefore to bring these proceedings with the consent of the Minister.

· The first defendant, Warren Eric Tschannen, is sole director and secretary of Blackington Pty Ltd (“Blackington”), the second defendant. Blackington Pty Ltd is the entity which manages the Park. Ms Helen Randell, who took no part in the proceedings, is the owner of the shares of Blackington.

· The third defendant, Caraco Pty Ltd, (“Caraco”) owns the land upon which the Park Is located. Mr Tschannen is sole director, shareholder and secretary of Caraco.

· It is common ground that the second and third defendants are each Park Owners within the meaning of that term as defined in s 3(1) of the Residential Parks Act.

· … … … Mr Tschannen is the Operations Manager, an appointment which appears to come within the definition of “Park Manager” in s 143(1) of the Act.

The Residents

· The residents of the park hold either residential tenancy agreements or are “casual” occupants of the Park. Those who hold residential site agreements are those persons who own their own relocatable homes or caravans with rigid annexes, and these were referred to during the hearing as “owners”. The balance of occupants, most of whose occupancies are subject to the Residential Tenancies Act, were referred to as “tenants”. There are 39 persons, plus the Park gardener, who hold residential site agreements. When Mr Tschannen bought the park in 1997, there were 148 owners, some 20 vacant sites and about 32 tenants. The downturn in numbers of owners is consistent with Mr Tschannen’s expressed desire to free up the sites occupied by owners to give him more flexibility to redevelop the Park as an “eco sports resort”. If such a resort were approved – and the evidence is that it is not anywhere near achieving planning approval from the Tweed local council and/or Planning NSW – the Park Owner would have to pay compensation as set out in the Act to those residents holding residential site agreements.

Park Rules

· In addition to the terms of the agreements between the residents of the Park and the defendants, the Park Owner is able to regulate his relationship with the residents by way of Park Rules. A bundle of the relevant Park Rules (with the omission of some repetitive removals and insertions of the same rule) was Exhibit G in these proceedings. A summary of that exhibit is as follows:-

1.1. 1996 Park Rules

• These rules were inherited from the previous owner when Mr Tschannen bought the park.

1.2. 1999 Park Rules

• An amendment to the 1996 Park Rules was issued on 27 July 1999, to take effect as from 1 October 1999.

• Amendments included provisions about parking and garbage.

• Under this amendment, visitors in the relocatable section were required to park their vehicle “on the road directly in front of the resident’s site they are visiting or in the designated visitor parking areas within the park” (“the relocatable section visitor parking rule”).

1.3. 2002 Amendments

• An amendment to the Park Rules of 1 October 2002 was issued on the 31 May 2002, to take effect on 2 August 2002.

• In this amendment there was a provision prohibiting parking on the road at any time.

• Included in this document is a section entitled “Amendment to Park Rules of 29.07.02” which purported to take effect on 29 July 2002. A provision herein stipulates that “No fences are permitted”.

• A further amendment to the Park Rules was promulgated on 9 August 2002 in the Village News. The amendment purported to come into effect on 18 October 2002. This amendment repealed the relocatable section visitor parking rule.

• An addition to Park Rules of 2 August 2002 took effect on 8 September 2002. This addition involved changes to the use of the gym.

• An amendment promulgated on 18 October 2002 in the Village News reinstated the relocatable section visitor parking rule.

• On 20 December 2002 a further amendment to the Park Rules once again repealed the relocatable section visitor parking rule.

1.4. 31 March 2003 Park Rules

• This is the most recent set of park rules as produced on subpoena. These rules include the relocatable section visitor parking rule again. Mr Tschannen gave evidence that he had attempted to exclude this rule three times, but on each occasion the rule had been disallowed by the Tribunal.

Litigation concerning the Park

· It is fair to say that the Park is responsible for a great deal of litigation. Deirdre Dowsett, a Tenants’ Advocate, gave evidence that since January 2001, 108 of the 161 appearances of the Northern Rivers Tenants Advice and Advocacy Service (operated under the auspices of the Northern Rivers Community Legal Centre) in relation to caravan park matters have been matters arising out of the Park. There are approximately 70 caravan parks in the area. About 75% of Ms Dowsett’s time over the last 3 years has been taken up with dealing with matters arising from the park operated by the defendants. Mr Murphy, of the Tweed Heads Fair Trading Centre, gave evidence of the workload engendered by the Park. Neither of these witnesses were cross-examined.

· The litigation started early in Mr Tschannen’s involvement in the Park and continues to the present day. [...] Mr Tschannen admitted that he was usually the author of the “Village News”, a newsletter which contained both news and management opinions, occasionally expressed in very strong terms. […]

· A list of the matters before the Tribunal which form part of the evidence in these proceedings shows the number, width of subject, and success rate of the proceedings taken by the residents:-

• Mr Adams – orders on 10 December 2001 for access to the Park for himself and medical and community service visitors; and on 7 August 2002, setting aside a Park Rule and reinstating the former rule allowing visitor parking in the relocatable section of the Park;

• Ms Bishop – orders on 19 October 2001 that the Park Owner consent to the assignment to her of the

• Mr Flanagan – order on 16 May 2001 that the Park Owner had failed to comply with an order of the Tribunal that the 1999 rent increase not be enforced, and on 10 December 2001, an order that he be granted an access card; and on 27 December 2002, an order that he be provided with an access card that operated to open the boom gates (since the one provided in accordance with the previous order did not, in fact, work);

• Mr Heskey – order on 23 May 1999, residential site agreement relating to site 88;

• Mr Dumbleton – orders on 5 March 2001, that the Park Owner consent to the transfer to the Jacksons of the residential site agreement relating to site 233;

• Eleven residents, including witnesses Mr Tacke, Mr Kelly, Mr Flanagan, Mr Skennar, Mrs Knight and Mrs McGowan – orders on 6 December 2000 that the 1999 rent increase was excessive;

• Six residents, including witnesses Mr Pollard, Mr Hogg, Mr Shepherd, Mr Jones and Mr Dumbleton – orders on 6 December 2000 that the 2000 rent increase was excessive;confirmed on rehearing on 7 June 2001, that he be granted compensation by way of rent reduction for loss of use of a portion of his site by the Park Owner placing a cabin’s carport over part of the site. On 5 September 1001 the Tribunal made an order of $347.00 in lieu of rent reduction as Mr Heskey had then moved;

• Mr and Mrs Hill – order in 11 August 2000 that the Park authorise alterations approved by Council to the carport on site, and on 7 February 2001, an order that the Park compensate the Hills. On 10 December 2001 an order that the Park issue them with an access card. On 27 September, 2002 – that the Park complete plumbing work;

• Mr and Mrs Hogg – order on 13 December 1999 that the park owner consent to an assignment from the Hendersons to them of residential site agreement in relation to site 240. Order on 10 December 2001 that they be provided with an access card. Order on 27 February 2002 that visitors to the Hoggs be allowed to enter and to park within the relocatable section of the site. On 22 September 2002 Mr and Mrs Hogg obtained an order for compensation for interference with their peace and enjoyment of their site. They obtained payment by way of a garnishee order after a Local Court examination of Mr Tschannen. On 7 August 2002, the Tribunal set aside a Park Rule relating to visitor entry. On 17 April 2002, the Tribunal ordered that a rent increase was excessive;

• Mr and Mrs Jackson, in addition to the assignment of lease from the Dumbletons, obtained orders on 10 December 2001 for an access card and on 28 February 2002 to restrain the Park from restricting visitors to his site;

• Mr Jones – orders on 27 February 2002 for an access card for himself, and for an access card for his carer;

• Mr Kelly, orders on 6 December 2000 relating to a rent increase; on 16 May 2001 in relation to non-compliance with that order; and on 6 September 2002 in relation to payment of rent to the Tribunal;

• Mrs Knight, orders on 27 February 2001 in relation to an excessive rent increase; on 16 May 2001 in relation to the non-compliance with that order; and payment of rent into the Tribunal;

• Mr Luback, orders 5 June 2002 relating to visitor parking in the relocatable section;

• Mr McGowan, order on 5 March 2001 for the assignment of a site agreement from Mr McKenzie to him; on 30 May 2001 for correction of rent receipts and payment of rent to the Tribunal, and 19 July 2001 for excessive rental increase, on 10 December 2001 for an access card;

• Mrs McGowan, order on 10 December 2001 for an access card, on 28 May 2002 dismissing the Park’s application that she not be allowed to park on the road, and on 20 August 2002 restoring her access to her ensuite;

• Mr Duncombe obtained an order on 9 September 2002 that the lease be assigned to Mr Vallance by 5 pm 13 September 2003;

• Mr Pollard - orders on 26 July 1999 and 27 February 2001 that rent increases were excessive; on 28 June 2001, that a rent increase was not payable and that the Park comply with the Act in relation to rent increases, and on 17 June 2002 that his rent be paid into the Tribunal trust account;

• Mr and Mrs Shepherd obtained orders in relation to rent on 18 May 1999, rent receipts on 23 February 2001, on 10 December 2001 in relation to an access key, on 26 August 2002 for breach of peace and quiet enjoyment, for enforcement of parking restrictions on 26 August 2002, for compliance with park rules and for the payment of a money order on 16 June 2003;

• Mr Skennar, order on 6 December 2000 that a rent increase was excessive; that the resident pay rent into the Tribunal on 16 May 2001, that a rent receipt was excessive on 5 November 2001;

• Mr Tacke, orders that rent increases were excessive on 18 April 2000 and 8 June 2000; orders for compliance with the rent orders on 6 December 2000 and 12 June 2001, and an order that the residential site agreement held by Mr Tacke be transferred to Mr Wadley on 2 March 2001;

• Mrs Winch, order on 28 August 1997 that a rent increase was excessive.

· Blackington Pty Ltd … (was) … convicted of 19 offences under the Residential Parks Act after a two-day hearing (in the Local Court). [...]

· A number of Tribunal orders have been appealed from by Mr Tschannen to the Supreme Court. He agreed in cross-examination that he had not had a good success rate there, in fact, he had not won one appeal.

The Park Staff

· The Park employs a number of staff. Their duties are as follows.

1.5. Warren Tschannen – operations manager.

• Mr Tschannen currently carries out the duties of Operations Manager. Currently, Mr Tschannen manages the park and works there four days a week, 9.30 to 3.30. Mr Tschannen deals with correspondence, reviews reports from members of staff and reviews occupancy. Mr Tschannen also has appointments with residents, tradespeople, social workers and government officials as part of park administration. He can be contacted by the caretaker after-hours by telephone.

• Whilst Michael Freire was employed as Operations Manager, Mr Tschannen usually worked two days at the park. He spent about four hours at the park on each of those two days. Mr Tschannen instructed Mr Freire on acceptance of a tenant that was outside his parameter to approve, any expenditure items exceeding a certain sum, and staff management issues relating to the changing of rosters, approving of leave, and the dismissing or employing of staff. Currently, and while Mr Freire was working, Mr Tschannen approved of any expenditure, discussed accounting issues with Janelle, the book-keeper, and instructed Sharon, the compliance officer. These are the regular duties he performed while Mr Freire was Operations Manager.

1.6. Michael Freire – former Operations Manager

• Mr Freire was employed by the Park as an Operations Manager. He worked Monday to Friday, 7.30 to 4.30 and Saturday mornings, 7.30 to 12.00. He lived off-site. His day-to-day duties included supervising all staff, interviewing prospective tenants and dealing with complaints from owners and tenants. Mr Freire was called to give evidence.

1.7. Lynda Tschannen (Gorham)

• Ms Tschannen, sister of Warren Tschannen, works as a part-time cashier. She was not called to give evidence. It is … alleged by … witnesses for the plaintiff that she relayed or provided information as to conditions on sale of homes, park policy on assignments, boom gate access and rent issues. [She was not called as a witness.]

1.8. Rosa Freire

• Mrs Freire, wife of Michael Freire, works as a part-time cashier.

1.9. Bill and Anne Frost

• Mr Frost is the caretaker who lives on site with his wife, Mrs Anne Frost at the Park. Either Mr or Mrs Frost remain on site at all times. Mr Frost is an upholsterer by trade and makes repairs to furniture in the caravans. Mrs Frost acts as a part-time cleaner. Mr Frost was not called to give evidence...

1.10. Sharon Muschialli

• Ms Muschialli is employed by the Park as a compliance officer. She works three days a week. Ms Muschialli’s duties consist of preparing and conducting Tribunal hearings. She also alerts staff to Tribunal orders and familiarises staff with the Residential Parks Act, the Residential Tenancies Act and relevant sections of the Local Government Act. Ms Muschialli’s position will be vacant in the near future and the Park is currently trying to find a replacement. She was not called to give evidence...

1.11. Peter Davies

• Mr Davies is employed as a full-time security officer. He handles security issues including liaising with authorities.

1.12. Janelle

• Janelle takes care of book-keeping on Wednesdays.

1.13. Jeff

• Jeff is a full-time carpenter on contract.

1.14. Dave

• Dave is a full-time gardener who is also a resident at the park. He has worked there for the past seven years.

1.15. Mark

• Mark works part-time gurning (pressure cleaning) vans. He also assists Dave with an intensive clean-up of rubbish once a week.

· In July 2001, the Park engaged International Protection Agency (“IPA”) as security provider for the Park. Tim Kafer was employed by IPA in about August 2001 and he took on day-to-day responsibility for the Park from that time, until the termination of the agreement with IPA in mid-January 2002.

Residential Parks Act 1998

10 The Act provides as follows, so far as is relevant.

Pt 1: Preliminary

11 The following definitions appear in s3.

12 The phrase “residential park” is defined as meaning a caravan park (defined as including land on which caravans and other moveable dwellings are placed) or a manufactured home estate (defined as including land on which manufactured homes are placed).

13 The phrase “manufactured home” includes a moveable dwelling which is not registrable as a vehicle.

14 The phrase “moveable dwelling” includes a caravan or other van used for human habitation and also includes a manufactured home.

15 The phrase “relocatable home” includes a moveable dwelling that is not registrable as a vehicle.

16 The phrase “park owner”, in relation to a residential tenancy agreement, means any person who grants the right to occupy residential premises under the residential tenancy agreement and, when used in s30 or in Pts 6-11, in relation to a residential park, means any person who is entitled to the land comprising the residential park for any estate of freehold in possession. Section 143 provides that a park owner may appoint a park manager with responsibility for day-to-day management including the letting of residential premises.

17 The phrase “residential tenancy agreement” includes any agreement under which a person grants to another for value a right of occupation of residential premises for the purpose of use as a residence.

18 The phrase “residential site” means a site within a residential park that is used or is intended to be used for the installation of a moveable dwelling.

19 The phrase “residential site agreement” includes a residential tenancy agreement under which the park owner grants to the resident a right to install on a residential site a relocatable home and a right to use the home as a residence; and the resident occupies the premises as the residents’ principle place of residence. (A residential site agreement is a species of residential tenancy agreement.)

Pt 2: Application of Act

20 Section 5 provides that the Act applies to a residential tenancy agreement under which the residential premises consist of a residential site or a moveable dwelling on a residential site and the resident occupies the premises as the resident’s principle place of residence. The section further provides that the Act applies to such a residential tenancy agreement irrespective of the terms of the agreement or any other agreement.

Pt 3: Residential tenancy agreements relating to residential parks

21 Under s8, there is a standard form of residential tenancy agreement relating to residential parks. Sections 9, 10 and 11 provide, in effect, that the prescribed form of a residential tenancy agreement relating to a residential park and the Act and any other Act take priority over any inconsistent or non-compliant wording in the agreement.

Pt 4: Rights and obligations of park owners and residents

Div 1: Rights and obligations

22 Section 20 implies a term that the resident must have quiet enjoyment of the residential premises without interruption by the park owner and that the park owner or park manager must not interfere, or cause or permit any interference, with the reasonable peace, comfort or privacy of the resident. The section further provides that a park owner or a park manager under a residential tenancy agreement must not contravene or fail to comply with that provision. A penalty for contravention is prescribed.

23 Section 30 implies a term in residential tenancy agreements in respect of residential premises in a residential park that, if the park owner has installed any security device such as boom gates to restrict entry, the park owner must give a copy of any opening device or information required to open the security device to the resident. The section further implies a term to the same effect if the park owner installs such a security device during the term of an agreement. No penalty for contravention is prescribed.

Div 3: Change of park owner or resident

24 Section 41 implies a term that the resident may, with the prior consent of the park owner, assign the resident’s rights and obligations under the agreement, and that the park owner may not unreasonably withhold or refuse consent. No penalty is prescribed for contravention.

Pt 5: Rents

Div 1: General matters

25 Section 48(1) provides that a rent receipt be provided without delay. A penalty for non-compliance is prescribed.

26 Section 48(3) provides that a receipt for rent is not a receipt for the purposes of the section unless it includes certain particulars, including (b) whether the resident is in debt or credit as at the date of payment and (c) by what amount and the period for which the rent is paid.

Div 2: Rent increases and excessive rents

27 Section 53 permits rent being increased by 60 days’ notice. The rent may also be increased by an order of the Consumer, Trader and Tenancy Tribunal (hereafter “the Tribunal”).

28 By s54 the Tribunal may order the refund of overpaid rent on the ground that the rent increase was not properly notified; or, under s55, on the ground that the rent increase is excessive. Under s58, orders may be made by the Tribunal accordingly.

29 Section 61 provides that a park owner must not wilfully contravene or fail to comply with an order that rent must not exceed an amount specified by the Tribunal, nor demand or receive rent exceeding an amount specified by the Tribunal. A penalty for contravention is prescribed.

Pt 6: Park rules for residential parks

30 Section 62 provides that a park owner may make park rules. By s63, the park rules constitute terms of every residential tenancy agreement in respect of residential premises in the residential park. In the case of an inconsistency with a residential tenancy agreement, the agreement takes priority. A copy of the park rules must be provided to a resident or prospective resident at the time of entering into the residential tenancy agreement. A penalty for non-compliance is prescribed.

31 Section 64 provides for amendment to the park rules by the park owner on 60 days’ notice to residents.

Pt 7: Community aspects of residential park living

32 Section 67 provides that residents have a right to participate in any organisation of residents of the residential park and that the park owner or park manager must not unreasonably interfere with a resident’s rights under the section. A penalty for non-compliance is prescribed.

Pt 10: Sale of moveable dwellings and manufactured homes

Div 1: Sale of moveable dwellings in residential parks

33 Section 80 implies a term that, where the residential premises consist of a residential site only, that the resident is entitled to sell the relocatable home or other moveable dwelling installed on the residential site while the dwelling is in place, unless the agreement expressly provides that on-site sales are prohibited.

34 Section 82(1) provides that a residential tenancy agreement may include restrictions on the sale of a relocatable home or other moveable dwelling while it is installed on the residential site, but that any other such restriction that the park owner purports to impose is unenforceable.

35 Section 82(2) provides that a park owner must not interfere with the sale of a moveable dwelling while it is installed on a residential site unless permitted to do so under the agreement. A penalty for infringement is prescribed.

36 Pursuant to s85, a park owner or a resident may apply to the Tribunal for resolution of any dispute concerning the sale of a moveable dwelling while it is installed in a residential park, and the Tribunal may make orders relating to the payment of commission or an order preventing interference with the sale of the moveable dwelling.

Pt 11: Dispute resolution

37 Sections 87 to 89 relate to resolution of disputes concerning amendment to park rules, including processes involving a park disputes committee.

38 Section 90 provides for an application to the Tribunal concerning any dispute relating to the legal validity of a park rule, to be made by not less than five residents in the ordinary case. The Tribunal may then make an order setting aside a park rule or modifying its operation.

Pt 12: Termination of residential tenancy agreements

Div 2: Grounds for termination of a residential site agreement

39 Division 2 of Pt 12 of the Act deals with grounds for termination of a residential site agreement. These include termination by the park owner for non-payment of rent (s98); because the dwelling is dilapidated (s99); serious or persistent breach of the agreement (s100); vacant possession required in order to comply with a legal obligation to carry out works (s101); or on the ground that the site is to be used for a purpose other than that of a residential site (s102), the resident then being entitled to compensation in accordance with s128.

Div 5: Termination of residential tenancy agreements by Tribunal

40 Under s113, application may be made to the Tribunal for determination of a residential tenancy agreement.

Div 6: Recovery of possession of residential premises

41 By s121, exclusive jurisdiction is given to the Tribunal to make orders for possession.

Div 7: Compensation for termination of a residential site agreement

42 Section 127 authorises a park owner to require a resident under a residential site agreement to relocate to a different residential site, on 90 days’ notice. A resident who relocates in accordance with such notice is entitled to be paid compensation in accordance with s128.

43 Section 128 provides that the amount of compensation that a resident is entitled to be paid by a park owner under the division is to be fixed by an order of the Tribunal on application of the park owner or the resident. In fixing the amount of compensation in connection with the relocation of a dwelling under s127 or otherwise, the Tribunal is to have regard to certain specified matters, including disconnection of services, transport, reinstallation and landscaping the new site.

44 The section further provides that, in fixing the amount of compensation otherwise than in connection with relocation to which a resident is otherwise entitled, the Tribunal must have regard to the same suite of considerations, with the exception of landscaping.

45 Compensation is not payable for an amount in excess of the value of the dwelling.

Pt 14: Miscellaneous

46 Section 144 prohibits contracting out of the provisions of the Act and the regulations made under the Act. A penalty for non-compliance is prescribed.

47 Section 147 provides that any contravention or failure to comply with a provision of the Act for the breach of which a penalty is not specified does not give rise to an offence.

The Fair Trading Act 1987

Pt 5: Fair trading

48 Section 42(1) proscribes conduct, in trade or commerce, that is misleading or deceptive or is likely to mislead or deceive. The phrase “trade or commerce” is defined in s4(1) as including any business activity.

49 Section 43(1) provides that a supplier shall not, in trade or commerce, in connection with the supply or possible supply of services, engage in conduct that is, in all the circumstances, unconscionable.

50 The word “services” is defined in s4(1) as including any rights or benefits conferred under a residential tenancy agreement (within the meaning of the Residential Parks Act 1998) under which the residential premises consist of a residential site in a residential park or a moveable dwelling on such a residential site.

Pt 6: Enforcement and remedies

51 Section 65 provides, so far as it is relevant, as follows:

65 Injunctions

(1) Where, on the application of the Minister, the Director-General or any other person, the Supreme Court is satisfied that a person has engaged, or is proposing to engage, in conduct that constitutes or would constitute:

(a) a contravention of a provision of Part … 5 …

the Court may grant an injunction in such terms as the Court determines to be appropriate.

…

(6) The power of the Supreme Court to grant an injunction restraining a person from engaging in conduct may be exercised:

(a) whether or not it appears to the Court that the person intends to engage again, or to continue to engage, in conduct of that kind,

(b) whether or not the person has previously engaged in conduct of that kind, and

(c) whether or not there is an imminent danger of substantial damage to any person if the first-mentioned person engages in conduct of that kind.

(7) The power of the Supreme Court to grant an injunction requiring a person to do an act or thing may be exercised:

(a) whether or not it appears to the Court that the person intends to refuse or fail again, or to continue to refuse or fail, to do that act or thing,

(b) whether or not the person has previously refused or failed to do that act or thing, and

(c) whether or not there is an imminent danger of substantial damage to any person if the first-mentioned person refuses or fails to do that act or thing.

52 The section provides that an application for such an injunction may be made by the Director-General. That office is defined in s3 as meaning the present plaintiff.

53 Section 66(1) provides that, where the Supreme Court is satisfied that a person has engaged or is proposing to engage in conduct that constitutes or would constitute the contravention of a provision of any other legislation of “administered by the Minister”, the court may grant an injunction in such terms as the court determines to be appropriate.

54 The subsection provides that an application for such an injunction may be made by the Director-General (that is, by the present plaintiff) with the consent of the Minister. The consent is common ground.

55 It is also common ground that the Residential Parks Act is legislation “administered by the Minister” within the meaning of s66(1).

56 There is no provision in s66 corresponding with s65(2), s65(6) or s65(7).

57 Section 72(4) provides that, where proceedings are instituted by the Minister or the Director-General (now the Commissioner) under s65 and a person is found to have engaged in conduct in contravention of a provision of Pt 5, the Director-General (now the Commissioner) may make an application on behalf of a person who has suffered loss or damage or is likely to do so, with the consent in writing given by each such person. Such an application for compensation then proceeds pursuant to s72(2) which provides for applications for compensation made by a person who has suffered or is likely to suffer loss or damage.

Tribunal statutes

58 It is an offence to wilfully contravene or fail to comply with an order of the Tribunal: Residential Tribunal Act 1998, s47A (since repealed); Consumer, Trader and Tenancy Tribunal Act 2001, s52.

The summons

59 The further amended summons as amended on 10 October 2003, reads as follows:

The pl a intiff claims:-

1. A DECLARATION that the defendants have contravened the provisions of the Residential Parks Act (“the Act”) by:-
(a) breaching s 20 of the Act;
(b) breaching s 30 of the Act;
(c) breaching s 41 and s 82(1) of the Act,
(d) breaching s 48 of the Act;
(e) breaching s 61 of the Act; and
(f) breaching s 82 of the Act
the particulars of which breaches are Schedule A to this Summons.

2. A DECLARATION that the Second Defendant is the “park owner” of the Banora Point Caravan Park (also known as Banora Point Tourist Caravan Park and/or Banora Point Residential Park) located at 2 Pacific Highway, Banora Point (“the Park”).

3. A DECLARATION that the Third Defendant is a “park owner” of the Park as defined in s 3(1)(b) of the Act .

(d) directing employees of the second and/or third defendants except as required to comply with order 5 below;

Residential Parks Act

Act

;

A

Act

Fair Trading Act;

Fair Trading Act.

Fair Trading Act;

Fair Trading Act.

Act

Schedule B

Fair Trading Act;

Fair Trading Act.

11. AN ORDER that the Defendants and each of them, their servants and agents comply with orders made by the Consumer Trader and Tenancy Tribunal and the Residential Tribunal, as listed in Schedules B and C to this Summons.

(i) the area of the Park designated for relocatable or resident owned vans (and which is marked on the plan attached to this Summons); and

(i) within the area of the Park designated for relocatable or resident owned vans; and

16. AN ORDER that the rent paid by Margaret Knight for residential site number 236 since the dwelling became unoccupied on 21 April 2001 be refunded within 28 days of the making of this order.

17. AN ORDER that the rent payable by Margaret Knight for residential site number 236 be suspended until such time as the dwelling is reoccupied.

18. AN ORDER that compensation be paid, within 28 days of the making of this order, to those residents who have left the Park since 1 January 2002, such compensation to be the difference in value between the value of the relocatable homes or registrable moveable dwellings as at the date when the resident left the Park, as assessed by a licensed real estate agent agreed on by the parties or, if no agreement is reached, appointed by the President of the Real Estate Institute and the amount paid by the defendants and all costs paid by the resident associated in moving from the Park.

20. Any other order that the Court sees fit.

60 Schedules A, B and C (referred to in the summons) follow.

SCHEDULE A

Folio

Section

Contravention

Date of Contravention

Nature of Conduct

Resident

Site No.

3

20
Interfere with right to quiet enjoyment
02/04/2002
Blackington changed the lock on the ensuite door & refused to provide a key Grace McGowan
25

5

20
Interfere with right to quiet enjoyment
26/04/2001
Park manager Friere kicked resident Alan Shepherd
115

8

20
Interfere with right to quiet enjoyment
11/02/2002
Restrict vistor's access to permanent resident's site Vincent Flanagan
205

9

20
Interfere with right to quiet enjoyment
11/02/2002
Restrict vistor's access to permanent resident's site George Jones
206

10

20
Interfere with right to quiet enjoyment
12/02/2002
Restrict vistor's access to permanent resident's site Darrell Jackson
233

11

20
Interfere with right to quiet enjoyment
13/02/2002
Restrict vistor's access to permanent resident's site John Luback
226

12

30
Restrict entry of resident
28/11/2001
Blackington refused to issue keycard which effectively operates the boomgate Grace McGowan
25

13

30
Restrict entry of resident
28/11/2001
Blackington refused to issue keycard which effectively operates the boomgate Gary McGowan
26

14

30
Restrict entry of resident
28/11/2001
Blackington refused to issue keycard which effectively operates the boomgate Warren & Jennifer Hill
29

15

30
Restrict entry of resident
28/11/2001
Blackington refused to issue keycard which effectively operates the boomgate Darrell Jackson
233

16

30
Restrict entry of resident
30/11/2001
Blackington refused to issue keycard which operates the boomgate Vincent Flanagan
205

17

30
Restrict entry of resident
16/02/2002
Blackington refused to issue keycard which operates the boomgate Margo Knight
236

18

30
Restrict entry of resident
11/02/2002
Blackington did not provide working keycard for boomgate Yvonne Hughes
213

19

41
Right to assign rights
06/03/2001
Blackington failed to comply with order of Tribunal to assign rights Barry & Lorraine Dumbleton
233

20

41
Right to assign rights
02/03/2001
Blackington failed to comply with order of Tribunal to assign rights Gerhard Dieter Tacke
61

21

41
Right to assign rights
09/03/2001
Blackington failed to comply with order of Tribunal to assign rights Bruce McKenzie
26

22

41
Right to assign rights Blackington failed to comply with order of Tribunal to assign rights Leonard Duncombe
222

23

48(3)(b)
Rent receipts
04/03/2001
Rent receipt did not indicate if rent is in debit / credit as at payment date & by what amount. A. Shepherd
115

25

48(3)(b)
Failure to provide rent receipts
30/7/00 & 27/8/00
Rent receipt did not indicate if rent is in debit / credit as at payment date & by what amount. Alan Shepherd
115

26

48(3)(c)
Fail to issue detailed rent receipts.
18/03/2001
Blackington gave rent receipts which did not include the period for which rent is paid. A. Shepherd
115

27

48(3)(c)
Fail to issue detailed rent receipts.
16/04/2001
Blackington gave rent receipts which did not include the period for which rent is paid. A. Shepherd
115

28

61
Rent not to exceed amount specified by Tribunal
6/12/00 - 11/5/01
Blackington debited rent in excess of amount Tribunal specified. Clifford Kelly
221

29

61
Rent not to exceed amount specified by Tribunal
6/12/00 - 11/5/01
Blackington debited rent in excess of amount Tribunal specified. Grace McGowan
25

31

61
Rent not to exceed amount specified by Tribunal
6/12/00 - 3/5/01
Blackington debited rent in excess of amount Tribunal specified. Raymond Skennar
92

34

61
Rent not to exceed amount specified by Tribunal
8/12/00 - 11/5/01
Blackington debited rent in excess of amount Tribunal specified. Margo Knight
236

35

61
Rent not to exceed amount specified by Tribunal
8/12/00 - 23/2/01
Blackington debited rent in excess of amount Tribunal specified. Gerhard Dieter Tacke
61

36

61
Rent not to exceed amount specified by Tribunal
1/12/00 - 18/5/01
Blackington debited rent in excess of amount Tribunal specified. Vincent Flanagan
205

37

82(2)
Owner must not interfere with a sale
16/09/2002
Blackington tells potential buyers that residence will have to be removed from the park in circumstances where such interference is not permitted Leonard Duncombe
222

38

82(2)
Owner must not interfere with a sale
23/11/2001
Blackington tells potential buyers that residence will have to be removed from the park in circumstances where such interference is not permitted Brian & Annie Northcote
88

39

82(2)
Owner must not interfere with a sale Blackington tells potential buyers that residence will have to be removed from the park in circumstances where such interference is not permitted Fred & Shirley Fredson
212

SCHEDULE B Rent Records

Folio No.
Residents

Site No.

Orders

Corrective Action

10 SHEPHERD, Alan
115
Respondent to provide rent receipts Provide rent receipts indicating whether the resident is in debit or credit as at the date of payment and by what amount and reflecting the proper rent payable with reference to orders of the Tribunal

SCHEDULE C Tribunal Orders

· Paragraph 1: Declaration, breaches of Residential Parks Act

· Paragraphs 2 and 3: Declarations, second and third defendants park owners

· Paragraphs 4 and 5: Orders, appointment of manager in place of first defendant

· Paragraphs 6 and 8: Orders and declaration, access

· Paragraph 7 and 7A: Order and declaration, interference with sales

· Paragraphs 9 and 10: Order and declaration, rent receipts

· Paragraph 11: Order, compliance with orders

· Paragraph 13: Order, quiet enjoyment

· Paragraphs 16, 17 and 18: Orders, compensation

62 In paragraph 1 of the further amended summons, the plaintiff asserts breach by the defendants of the following provisions of the Residential Parks Act. The alleged breaches are specified in Schedule A to the summons. A declaration is sought that the breaches have been committed.

· s20 (right to quiet enjoyment)

· s30 (access)

· s41 (right to assign)

· s48 (rent receipts to be supplied)

· s61 (contravention of rent orders)

· s82(2) (interference with sales)

63 All such breaches are relied upon for orders under paragraphs 4 and 5 for appointment of a manager in place of the first defendant.

64 Breaches of s20 (quiet enjoyment) are relied on for the order sought in paragraph 13.

65 Breaches of s30 (access) are relied on for the orders and declaration sought in paragraphs 6 and 8.

66 Breaches of s48 (rent receipts) are relied on for the order and declaration sought in paragraphs 9 and 10.

67 Breaches of s82(2) (interference with sales) are relied on for the order and declaration sought in paragraphs 7 and 7A.

68 The declarations sought in paragraph 2 that the second and third defendants are park owners within the meaning of the Act are consented to.

69 Paragraph 11 seeks an order that the defendants comply with certain orders of the Consumer Trader and Tenancy Tribunal and of the previously constituted Residential Tribunal (compendiously referred to hereafter as “the Tribunal”). The orders of the Tribunal are specified in Schedules B and C to the summons.

70 Paras 16, 17 and 18 seek orders for compensation and suspension of rent in the case of a specified resident (Mrs Knight), and an order for compensation for other unspecified residents.

71 The declarations sought include declarations that the defendants’ conduct constituted breach of s42(1) and / or s43(1) of the Fair Trading Act in relation to interference with sales (paragraph 7A), access (paragraph 8) and rent receipts (paragraph 10).

72 The alleged breaches of s42(1) and / or s43(1) in those respects are then relied upon as activating the power of the court to make the orders pursuant to s65 for the appointment of a manager in place of the first defendant (paragraphs 4 and 5); and orders in relation to access (paragraph 6), interference with sales (paragraph 7) and rent receipts (paragraph 9).

73 Orders pursuant to s66 are sought in the alternative to orders sought pursuant to s65.

74 Additionally, orders are sought pursuant to s66 requiring compliance with Tribunal orders (paragraph 11) and in relation to quiet enjoyment (paragraph 13).

75 The orders in relation to compensation (paragraphs 16, 17 and 18) are sought pursuant to s72 of the Fair Trading Act.

76 A diagram illustrating the scheme of the summons, as amended, follows.

Witnesses

77 Affidavits by the following witnesses were read in the plaintiff’s case in chief and in reply:

Deponent	Sworn
D Dowsett	20 November 2002
M Finch	3 February 2003
T Kafer	21 March 2003
23 May 2003
J Ottaway	21 March 2003
B Wheatley	24 March 2003
M Adams	29 January 2003
S Bishop	9 September 2003
T Brown	31 January 2003
28 May 2003
O Burkitt	30 January 2003
R Clark	2 January 2003
23 May 2003
L Dowds	30 January 2003
B Dumbleton	29 January 2003
V Flanagan	30 January 2003
26 May 2003
F Fredson	31 January 2003
22 May 2003
K Gehrig	26 February 2003
C Heskey	30 January 2003
23 May 2003
J Hill	30 January 2003
23 May 2003
L Hogg	27 November 2002
6 December 2002
9 September 2003
23 May 2003
Y Hughes	7 February 2003
H Iden	30 January 2003
D Jackson	30 January 2003
22 May 2003
G Jones	29 January 2003
C Kelly	30 January 2003
M Knight	30 January 2003
8 September 2003
23 May 2003
J Luback	31 January 2003
23 May 2003
Garry McGowan	31 January 2003
Grace McGowan	28 November 2002
H Mistler	24 March 2003
M Molloy	7 February 2003
23 May 2003
B Northcote	30 January 2003
27 May 2003
D Pollard	31 January 2003
26 May 2003
A Shepherd	31 January 2003
8 September 2003
30 May 2003
R Skennar	29 January 2003
G Tacke	30 January 2003
22 May 2003
H Vallance	29 January 2003
J Wadley	5 September 2003
I Winch	24 March 2003
P Murphy	18 September 2003
C Jackson	26 May 2003

78 Of these, the following witnesses were called to give supplementary evidence in chief or for cross-examination or both:

79 Affidavits by the following witnesses were read in the defendants’ case:

Deponent	Sworn
W Tschannen	19 December 2002
W Tschannen	16 April 2003
W Tschannen	18 September 2003
M Freire	16 April 2003

80 Both witnesses were called.

The scheme of this judgment

81 At the conclusion of the evidence, counsel on each side submitted a detailed written and oral argument, directed to the further amended summons, paragraph by paragraph. In the sections of this judgment which now follow, I record, by reference to the paragraphs in the further amended summons, the written arguments on each side, including the submissions in relation to the strike-out application to which I have earlier referred.

82 I have altered the order in which topics were dealt with in counsels’ submissions. The order in this judgment is as follows. Paragraph numbers relate to paragraphs in the summons.

· Second and third defendants park owners (paragraphs 1-3)

· Quiet enjoyment (paragraphs 1(a) and 13)

· Access (paragraphs 1(b), 6 and 8)

· Assignment and interference with sales (paragraphs 1(c) and (f), 7 and 7A)

· Rent receipts (paragraphs 1(d), 9 and 10)

· Contravention of rent orders (paragraph 1(e))

· Breaches compendiously (paragraph 1)

· Appointment of manager in place of first defendant (paragraphs 4 and 5)

· Compliance with Tribunal orders (paragraph 11)

· Compensation (paragraphs 16, 17 and 18)

83 Paragraph 1 of the summons asserts breaches as specified. I will deal with the asserted breaches, substantially in the order in which the topics appear in paragraph 1. Assignment and interference with sales will be dealt with together because that is the way counsel for the plaintiff has dealt with them.

84 In dealing with a topic in paragraph 1, I will also deal with the relief sought separately in relation to each topic. (For example, in relation to quiet enjoyment, breaches are alleged in paragraph 1(a) and an order is sought in paragraph 13.)

85 The claim for appointment of a manager in place of the first defendant will then be dealt with. (The conduct alleged in paragraph 1 and the alleged breaches of s42(1) and s43(1) of the Fair Trading Act – which related to some of the topics in paragraph 1 – is relied upon by the plaintiff in support of that claim.)

86 The claim for orders in paragraph 11 and in paragraphs 16, 17 and 18 is unrelated to the conduct alleged in paragraph 1, and will be dealt with separately.

The law

87 Special considerations apply to a claim for a declaration of breach of provisions in legislation which protect a public interest, for example, where a large number of members of the public may be affected by breach of legislation such as the Trade Practices Act: ACCC v IMB Group Pty Limited [1999] FCA 313, per Drummond J at [14] and [21], ACCC v Goldy Motors Pty Limited [2000] FCA 1885, per Carr J at [30].

88 I would not regard the Residential Parks Act as being legislation of that kind, at least in those respects involved here. The Act creates statutory obligations in favour of residents and prescribes penal sanctions for breach. Infringement occurs when the rights of a resident, so created, are not complied with. The legislation is to do with private rights.

89 It may be, however, that a declaration of breach should be made if, in the circumstances of the case, that would serve some practical purpose. This may be so where the meaning or effect of a provision has not been understood and needs to be for ongoing purposes, or where there is some other reason for establishing the ground rules for future conduct such as where there has been a course of conduct in contumelious breach of a provision in the legislation and the existence and importance of the obligation needs to be brought home.

90 Section 65 of the Fair Trading Act, in its relationship with ss42 and 43, has to be analysed to appreciate its true scope and effect. Under subs (1), the court must be satisfied that the person either has engaged in or is proposing to engage in conduct of the relevant kind.

91 Subsection (6) provides that a mandatory or restraining injunction may be granted whether or not the person intends to engage again or continue to engage in such conduct and whether or not the person has previously engaged in such conduct. To read subs (6) conformably with subs (1), subs (6) has to be construed disjunctively, so that where a person has engaged in such conduct in the past, the threat of future conduct is not essential; and where there is a threat of future conduct, past conduct is not essential.

92 Of these two situations, only the first is relevant to the present case. If past conduct of the relevant kind is established, a threat of continuance or repetition is unnecessary.

93 That is a modification of the general law. It should be recognised, however, that, absent a threat of continuance or repetition, there would have to be some other reason for granting an injunction. Past conduct of the relevant kind does not automatically require the exercise of the court’s discretion to grant an injunction.

Second and third defendants park owners (paragraphs 2 and 3)

94 This section of the judgment deals with paragraphs 2 and 3 of the Further Amended Summons.

Summons

2. A DECLARATION that the Second Defendant is the “park owner” of the Banora Point Caravan Park (also known as Banora Point Tourist Caravan Park and/or Banora Point Residential Park) located at 2 Pacific Highway, Banora Point (“the Park”).

3. A DECLARATION that the Third Defendant is a “park owner” of the Park as defined in s 3(1)(b) of the Act.

Plaintiff’s outline

95 The following is an extract from the plaintiff’s “Outline” document.

Declarations as to the status of the defendant (orders 2 and 3)

These orders are consented to.

Defendants’ outline

96 The following is an extract from the defendants’ “Outline” document.

Paragraphs 2 and 3

These are to be made by consent.
Claim for declarations

97 This section of the judgment deals, in a general way, with the claim for declarations made in paragraph 1 of the summons. More particular treatment follows in relation to the relief sought in each of the following respects.

Summons

1. A DECLARATION that the defendants have contravened the provisions of the Residential Parks Act (“the Act”) by:-
(a) breaching s 20 of the Act;
(b) breaching s 30 of the Act;
(c) breaching s 41 and s 82(1) of the Act,
(d) breaching s 48 of the Act;
(e) breaching s 61 of the Act; and
(f) breaching s 82 of the Act
the particulars of which breaches are Schedule A to this Summons.

Plaintiff’s outline

98 The following is an extract from the plaintiff’s “Outline” document.

Declarations as to past conduct (order 1)

· There are several areas in which declarations are sought. These are set out in sub-paragraphs (a) to (f) of paragraph 1, The conduct relied upon, and the specifics of the breaches proven by the plaintiff, are set out in the Contentions of Fact.

· The proceedings are public interest litigation. Drummond J, in ACCC v. IMB Group Pty Ltd, supra, said:-

Trade Practices Act

· See also, ACCC v. Goldy Motors Pty Ltd 2001 ATPR 41-801, and an adoption of the above dicta by Grove J in Commissioner for Fair Trading v. HMS Direct, [2003] NSWSC 415 in the context of the Fair Trading Act.

· The defendants have not, to this point, admitted their culpability in what are fairly clear-cut examples of incorrect conduct. The declarations will be judicial recognition of the breaches by the defendants.

· The declarations are also necessary for the jurisdictional basis of injunctive relief under s 65 of the Fair Trading Act.

Defendants’ outline

99 The following is an extract from the defendants’ “Outline” document.

Paragraph 1

· The Court is not required to make declarations, even if satisfied that the defendants have breached some or all of the enumerated sections of the Residential Parks Act. The declaration must have some utility.

· In any event, it remains unclear how the plaintiff proposes to prove many of the alleged breaches. In a number of instances, the plaintiff appears to wish to take advantage of Tribunal reasons in a manner going beyond the limited basis upon which they were received into evidence.

· The defendants have proffered undertakings which, for all purposes, are as effective as the orders which the plaintiff seeks. The Court should not be required to pore through the detail of the plaintiff's evidence, to make individual findings in respect of each of the alleged 39 contraventions.

Quiet enjoyment (paragraphs 1(a) and 13)

100 This section of the judgment deals with paragraphs 1(a) and 13 of the summons.

Summons

(a) breaching s 20 of the Act

…

the particulars of which breaches are Schedule A to this Summons.

13. AN ORDER that the defendants and each of them, their servants and agents be restrained from breaching the quiet enjoyment of each of the residents in accordance with s 20 of the Act and in particular by:-

(a) within 7 days of the making of this order, moving (at the second defendant’s expense) all vans, cabins, relocatable homes or registered movable dwellings and any other accommodation owned or leased by any of the defendants, or in which the defendants or any of them have any legal or equitable interest, from:-

(i) the area of the Park designated for relocatable or resident owned vans (and which is marked on the plan attached to this Summons); and

(ii) any roadways within the Park;

(b) being restrained from placing further vans, cabins, relocatable homes or registered moveable dwellings or any other accommodation:-

(i) within the area of the Park designated for relocatable or resident owned vans; and

(ii) on any roadways within the Park;

(c) being restrained from removing any further fences from relocatable home sites;

(d) being restrained from placing bollards, boulders or other devices to prevent resident access to onsite or adjacent parking to premises.

101 In Schedule A to the summons in its final form, six breaches of s20 are specified, being –

Contravention	Date of Contravention	Nature of Conduct	Resident
Interfere with right to quiet enjoyment	02/04/2002	Blackington changed the lock on the ensuite door & refused to provide a key	Grace McGowan
Interfere with right to quiet enjoyment	26/04/2001	Park manager Friere kicked resident	Alan Shepherd
Interfere with right to quiet enjoyment	11/02/2002	Restrict vistor's access to permanent resident's site	Vincent Flanagan
Interfere with right to quiet enjoyment	11/02/2002	Restrict vistor's access to permanent resident's site	George Jones
Interfere with right to quiet enjoyment	12/02/2002	Restrict vistor's access to permanent resident's site	Darrell Jackson
Interfere with right to quiet enjoyment	13/02/2002	Restrict vistor's access to permanent resident's site	John Luback

Defendants’ submissions on strikeout application

102 The following is an extract from the defendants’ “Submissions on Strikeout Application” document.

Paragraph 13:

· Section 20 of the Residential Parks Act states:

(1) It is a term of every residential tenancy agreement that:

(a) the resident must have quiet enjoyment of the residential premises without interruption by the park owner or any person claiming by, through or under the park owner or having superior title to that of the park owner, and
(b) the park owner or the park manager must not interfere, or cause or permit any interference, with the reasonable peace, comfort or privacy of the resident in using the residential premises.

(2) A park owner or a park manager under a residential tenancy agreement must not, during the currency of the agreement, contravene or fail to comply with subsection (1).

· It seems to be common ground that the area "designated" on the plan is not an area which, by virtue of any law, regulation or contractual term, is required to be set aside for permanent residents: see page 16, paragraph 8, and page 19, paragraph 8, 9 of the attached correspondence. It will be noted that there are permanent residents whose sites are outside the designated area

· The judgement of Shaw J upon which the plaintiff relies [Department of Housing v CTTT (unreported, Supreme Court, 31 March 2003)] is a quite different case: even if the Tribunal decision which his Honour declined to set aside is correct (a matter which the defendants respectfully dispute), it is a case of a landlord failing to take action against an identified tenant who has proven to be disruptive.

· The approach taken by the plaintiff in these proceedings is quite different: it appears to contend that a particular class of occupant is required to be kept segregated from the permanent residents, otherwise the owner is in breach of the covenant. This is, with respect, simply wrong

· If it is a breach of the covenant for quiet enjoyment to fail to segregate the occupants of the park, what, it may be asked, are the defendants' obligations to those permanent residents whose sites are outside the designated area, and to the casual residents of the park, who are also entitled to the benefit of a covenant for quiet enjoyment in similar terms, by virtue of section 22 of the Residential Tenancies Act. Why is it that only permanent residents, and some of them at that, are entitled to segregation from the casual residents? It is a notorious fact that residential parks are a form of housing to which many people who are poor, or in receipt of social security, have resort. Yet, upon the plaintiff's contentions, no park owner could safely allow any such person into his park.

Plaintiff’s response to defendants’ submissions on strikeout application

103 The following is an extract from the plaintiff’s “Response to Defendants’ Submissions on Strikeout Application” document.

Paragraph 13 of the Summons

· Paragraph 13 of the Summons does not, as the defendant submits, involve a segregation of “a particular class of resident” in any way which is not reflected in the Residential Parks Act (“the Act”). The Act provides that there are various classes of occupiers of residential parks and that differences in the class of tenancy accords the tenant differing rights. A “residential tenancy agreement” (s 3(1)) reflects the definition of the same concept in the Residential Tenancies Act and is, in effect, what is commonly referred to as a “residential lease”. A sub-species of “residential tenancy agreement is a ‘”residential site agreement”. Holders of “residential site agreements” (s 3(1)) have the right to:

i. ...install, on a residential site, a relocatable home, or a registrable moveable dwelling with a rigid annexe attached to it (being a relocatable home or registrable moveable dwelling owned by the resident”, and

ii. a right to use the home or dwelling as a resident; and

iii. the resident occupies the premises as the resident’s principal place of residence ...”

· A residential park such as Banora Point also houses persons who occupy cabins or vans on a casual or temporary basis, be they holiday makers or what are referred top in the affidavits to as “emergency housing” tenants, as well as those who hold occupation agreements under the Holiday Parks (Long-term Casual Occupation) Act 2002.

· The holders of residential site agreements in effect own their own home which is then placed upon the defendant’s land. As will be clear if there is a view of the site, relocatable homes or moveable dwellings (each of which are defined in the Act) are often substantial. A number of residents give evidence of the purchase price of their homes which are in the five figures. A person holding a residential site agreement is assured, unless the residential tenancy agreement specifies otherwise, that:-

Conveyancing Act)

· A residential site agreement is, clearly, a valuable right and one which is more than simply a right to occupy a van in a caravan park. It is a strange statutory creature, being a lease of land with the right to install a residence upon the land. The affidavits make it clear that many of the residents who are currently located in the “relocatable” section of the Park (and other permanent residents, who do not live in that section) have lived there a long time. Many are elderly. Many are ill. They wish to live as permanent residents in the Park, and object to the change of use which the first defendant has imposed upon them by:-

· The orders sought in paragraph 13 are based on s 20 of the Act. The covenant of quiet enjoyment under the Act differs from the covenant of the same name implied by the general law of leases. The general law covenant relates only to peaceful enjoyment in the sense of being free from interruption by adverse claimants to title of the property, or interruption with the peaceful occupation of the property. The covenant may be breached by the landlord cutting off gas and electricity supplies[2] or by removing doors and windows in an attempt to coerce the tenant into giving up possession.[3] In Browne v. Flower [1911] 1 Ch 219, Parker J said that there was no breach of the covenant of quiet enjoyment by “a mere interference with the comfort of persons using the demised premises by the creation of a personal annoyance such as might arise from noise, invasion of privacy or otherwise” (at 228).

· The common law position has been altered by the provisions of s 20(1) of the Act, where the “right to quiet enjoyment” (see section heading) is assured by forbidding the park owner or the park manager from interfering, or causing or permitting any interference, with “the reasonable peace, comfort or privacy of the resident in using the residential premises”. The decision in Department of Housing v. CTTT [2003] NSWSC 150 is an example of the breadth of the actions which may constitute a breach of sub-s 20(1)(b), and illustrates the point that the landlord has active duties when it comes to protection of another tenant’s peace, comfort and privacy In this case, many of the tenants complain of the downturn in those important factors when casual or non-permanent residents were housed in sub-standard housing. Given Mr Tschannen’s stated purpose of not issuing any new residential site agreements, and his and his employees’ undoubted conduct in failing to acknoweldge rights of transfer and assignment, it is open to the Court to find that such conduct was done with the intention of making life difficult for the permanent residents.

· The orders sought in s 13 of the Act seek to recognise the differences between permanent residents holding under “residential site agreements”, and other residents of the Park, and to enable a return to the situation when there was a “relocatable” section of the Park which was, in practical terms, immune from the vagaries of some of the difficulties of “caravan park” life. There is nothing discriminatory or irregular in the orders sought, as appears to be suggested; nor do the proposed orders make it impossible for casual residents to be “allowed into the Park”. As Mrs Molloy puts it in paragraph 8 of her affidavit, “the sense of community is gone”.[4] The “sense of community” is what the provisions of the Act and the orders sought in the Summons is seeking to achieve.

Plaintiff’s outline

104 The plaintiff’s “Outline” document repeats earlier written submissions in relation to paragraph 13 of the summons.

Plaintiff’s contentions of fact

105 The following is an extract from the plaintiff’s document “Plaintiff’s contention of fact”.

· On 30 April and 1 May, 2002, Environmental Health officers of the Tweed Shire Council, the local government authority for the Park, inspected the Park in response to complaints from residents. Mr Wheatley was one of the officers who inspected the Park. He gave evidence that the Park breached a number of Local Government Act provisions, and required a number of works to be undertaken for continuance of the “Approval to Operate” to the Park issued by the Council’s Environment and Health Services Unit. The report identified issues such as the provision of toilet facilities, visitor parking spaces, and the use of caravans for which sites were not approved.

· The caravans were originally placed upon Crown land within the Park and there were complaints by the residents about the lack of proper sewage and water connections, resulting in sullage flowing into the wetlands. These were moved onto a paved road within the Park days before a Council inspection and remain there, occupied, although not being approved for that purpose. They block one of the main parts of the “ring road” around the Park.

· The caravans comprise both a loss of amenity for the residents, and a breach of the Local Government Act. Mr Tschannen has criticised a number of residents for parking partly on the road and partly on their own sites, yet has blocked a major part of the access to the Park by his use of unapproved and unsewered caravans.

· There have been breaches of quiet enjoyment (as found by the Tribunal and as listed in Schedule A to the Amended Summons), and in matters such as removal of the fence behind the Hoggs in breach of the Park Rules current at the time. Mrs McGowan is entitled to sole occupancy of her ensuite (see Council report annexed to affidavit of Mr Wheatley) but the defendant acknowledges it changed the locks to give another site access to her ensuite.

Plaintiff’s further submissions and contentions

106 The following is an extract from the plaintiff’s document “Further submissions and contentions”.

Further Factual Contentions – order 13 of the Amended Summons

· The plaintiff seeks to have reinstated the “relocatable section” of the Park which was, until 2001 or 2002, comprised of owner-occupied housing exclusively. The first defendant gave evidence (T pp 271 ff) that he intended this section to be occupied only by persons holding residential site agreements, and that he tried to get people with residential site agreements who were located elsewhere in the Park to move there. He did not succeed – as Ms Bishop said in evidence, a riverfront site elsewhere was better than a “back” site in the relocatable section – but was nevertheless willing to have empty spaces in that section rather than move in other tenants. In the Village News (exhibit L) of (date), the first defendant expressed dissatisfaction at something which he alleged Mr Hogg had said in the Tribunal, and opened up the relocatable section to HV (“hire vans”) and placed tourist cabins in the site. He denied (Tr 295) that there were caravans there, something which was visible during the view.

· There have been breaches of quiet enjoyment (as found by the Tribunal and as listed in Schedule A to the Amended Summons), and in matters such as removal of the fence behind the Hoggs in breach of the Park Rules current at the time. Mrs McGowan is entitled to sole occupancy of her ensuite (see Council report annexed to affidavit of Mr Wheatley) but the defendant acknowledges it changed the locks to give another site access to her ensuite.

· For these reasons, and for the long and continued breaches of the Residential Parks Act which have been proven by the plaintiff, Mr Tschannen is not suitable to act as manager of the Banora Point Caravan Park.

· The plaintiff seeks both order 4 (orders restraining Mr Tschannen from personal involvement in the Park) and order 5 (appointment of an independent manager) with the powers and duties as set out in the Amended Managers’ Powers tendered to the Court. It is considered that Mr Tschannen should have input to decisions such as those he had during the time Mr Freire was Operations Manager – that is, approval of expenditure, bookkeeping, and the like, in order to reflect his interest in the Park. The intent of the imposition of the manager between the first defendant and the management of the Park is to impose a “top-down” approach of compliance with statutory responsibilities which have not been demonstrated in the past. Many important issues have been cleared up as a result of the bringing of this litigation; however, it is not sufficient to show that the first defendant now intends to comply with the Act in the future.

262 The following is an extract from the plaintiff’s document “Further submissions and contentions”.

Submissions as to Mandatory Injunction for appointment of a manager.

· The order seeking appointment of a manager is in effect a “last resort”. The defendants have been the subject of significant and continued litigation for quite some time at the instigation of the residents, most of which litigation has been unsuccessful on the part of the defendants. The Department has successfully prosecuted the second defendant on important matters arising out of its management of the Park. It is really only since the instigation of these proceedings that the defendants have made any substantial attempt to rectify long-standing problems and fix up difficulties in the administration of the Park. Notwithstanding this, it is clear that the first defendant has not changed his attitudes, merely his acceptance of advice that things had to change.

· The plaintiff does not seek, in the first instance, to enforce a manager of its choice on the defendants, but merely to be able to approve the plaintiff’s choice. This avoids the imposition on the first defendant of employing a person of whom he does not approve. The learned authors of Spry, Equitable Remedies, 6th edition at p 545, note that the Court may, in making a mandatory order, make clear that it is the “change in the material circumstances … rather than the manner in which that change occurs (Kennard v. Cory Brothers & Co Ltd , [1922] 2 Ch 1).” The authors go on to say:-

Kennard

· The rule against “injunctions in aid of contracts of personal service” is one derived from the unsuitability of contracts of employment for specific performance. It is submitted that this case is not within the rule that equity will not force a contractual personal relationship upon unwilling participants. The cases in which that rule is stated are those where particular employment relationships are sought to be enforced – for example, that a particular builder be ordered to complete a building, or that an employer re-employ a particular person sacked unfairly. In CH Giles & Co v. Morris [1972] 1 WLR 307 at 318-9, Megarry J said:-

“But I do not think that it should be assumed that as soon as any element of personal service or continuous services can be discerned in a contract the court will, without more, refuse specific performance. Of course, a requirement for the continuous performance of services has the disadvantage that repeated breaches may engender repeated applications to the court for enforcement. But so may many injunctions, and the prospects of repetition, although an important consideration, ought not to be allowed to negative a right. As is so often the case in equity, the matter is one of balance of advantage and disadvantage in relation to the particular obligations in question, and the fact that the balance will usually lie on one side does not turn this probability into a rule”.

· On proper analysis, an order to remove oneself from personal management and to impose a third person as an insulating layer between the first defendant and the residents of the Park is not an order akin to specific performance of a contract for personal services, but a means of ensuring that the restraining order sought in order 4 of the Amended Summons is not used as a further weapon against the residents of the Park by removing all management services from them. The policy reason for the rule against injunctions enforcing personal services is the “undesirability, as a matter of policy, that unwilling persons should, despite their opposition, be obliged to maintain confidential and intimate relationships” (Spry, p 123).

· If it is considered that the rule should ordinarily apply to an appointment of a manager by the defendants in conjunction with a restraining order, the “exceptional circumstances” exception should be brought into play for the reasons above stated. The fact that these proceedings are brought by the Commissioner is a factor which should be considered as an additional circumstance.

General Submissions on Injunctive Relief.

· The Court has indicated that there is some concern about the effectiveness of the orders if the defendants are able to transfer the assets of the park to another company or set up another company to operate the park. Should the Court see fit to make an order appointing a manager, it may be appropriate to make the following orders:-

· An order that the assets, operations and undertakings or any of them of the park not be assigned, sold, exchanged or transferred to or encumbered by any related entity. (‘Related entity’ having the same meaning as in the Corporations Law).

· An order that the defendants give not less than 60 days notice in writing to the plaintiff of any arrangement for the assets, operations or undertakings or any of them of the park to be assigned, sold, exchanged or transferred to or encumbered by any person.

· Residential parks are not regulated through a licensing regime. Therefore, the pinnacle of regulatory action is to seek injunctive relief through the Fair Trading Act. The plaintiff has taken this course due to the lack of compliance with Tribunal orders and the limited value of prosecution action.

· Injunctive relief is the final course of action available to the plaintiff and provides for an appropriate means of regulatory intervention to secure future compliance by the defendant.

· The power of the Court to grant injunctions whether or not the Court is satisfied that the person has engaged in the conduct in the past or is proposing to continue the conduct recognises the place of injunctive relief under the Fair Trading Act as a means of regulatory intervention. The injunctive relief available provides the regulator with a means of securing future compliance and provides for severe consequences should there be non-compliance with the orders of the Court.

Defendants’ outline

263 The following is an extract from the defendants’ “Outline” document.

Paragraphs 4 and 5

· These paragraphs raise what is probably the most contentious issue in these proceedings: the proposed appointment of a manager.

· As is now apparent from the evidence, the defendants have no problem with the tenants, who occupy the great majority of sites in the Park. Further, the majority of owners have sworn no affidavit, and those who have, in most cases, depose to matters which are either inconsequential or matters of history (often, disputed history).

· The defendants make two main attacks on these paragraphs. One is that, for a variety of reasons, the orders sought are impractical, or unworkable. However, there is a more fundamental objection: ie that the proposed orders misconceive the basis upon which the Court will take powers of management of a business out of a person's hands.

· The plaintiff's letter of 10 September 2003 (ex 1, page 18-19) contends that the orders sought " do not differ in any meaningful way from other forms of involuntary management, such as a receiver and manager".

· This proposition is manifestly incorrect. A receiver and manager appointed by the Court is an agent of the Court. His remuneration is fixed by the Court. His appointment is for a specific purpose: see the attached extract from O'Donovan on Receivers. Here, the plaintiff puts forward no sound reason why a manager should be appointed, and does not describe the purpose which the appointment is supposed to fulfil.

· Further, as the attached extract makes clear, the appointment of a receiver and manager will be for a limited duration. Here, the plaintiff seeks a two year appointment, although it does not explain why the two year period is required.

· On the issue of impracticability, the defendants say:

· The summons seeks the appointment of a person or corporation who is the holder of a Strata Managing Agent licence. No evidence has been advanced to show that the holder of such a licence has any qualifications relevant to the running of a residential park.

· As has become obvious in the course of these proceedings, the plaintiff itself has been utterly unable to put forward a candidate for the position, and has called no evidence to explain why it has been unable. It has called no evidence about why Mr Grove was withdrawn. The logical inference (in the light of the correspondence about his duties, the fact that he was required for cross examination, and the concession that a further affidavit to be sworn by him was in the course of preparation) is that his unsuitability was recognised, either by himself or by the plaintiff.

· The plaintiff has made numerous attempts to formulate the powers of the manager, culminating in the amended statement of manager's powers it now relies upon.

· The following comments are made about that document:

· Paragraph 1 (b)(i) provides that in the event of a shortfall, "the manager may request the first, second or third defendants to pay [the Park's] … expenses". The document is silent upon the consequences of the defendants declining to make the payment. In any event, the extent to which the first defendant underwrites the park is surely a matter for him. The court cannot impose upon him an obligation to lend money to the second or third defendants.

· As to paragraph (c), many criticisms can be made of the proposed powers. The evidence discloses that there has been no problem of any consequence so far as the tenants (as opposed to the owners) are concerned. Why, then, should be the manager be involved in determining the rent for tenants (sub-paragraph (i)), deciding who may be a tenant (sub-paragraph (ii)), executing residential tenancy agreements (sub-paragraph (iii)), determine the composition of tenancies (sub-paragraph (iv)) and so on? Why should the manager seek the advice of a solicitor about the commencement of or the defending of proceedings: sub-paragraphs (vi) and (vii)?

· Paragraph (d) provides that the manager is to "consult with, and take into account, the views of the first defendant" in regard to the long term future of the Park, or expenditure of sums over $500. What obligation does this impose upon the manager? What does it mean?

· Paragraph (e) is fatally flawed. Not only is it impracticable to provide for the mediation of every dispute which may arise – and they may arise frequently – the proposal confuses the role of a mediator and a referee. How can a mediator make a decision which is binding? The role of a mediator is to facilitate a settlement, not to impose a decision upon the parties. That is the role of a referee or arbitrator. And, in any event, by reference to what legal criteria does the mediator, or referee, or arbitrator, make a determination? Does he, ultimately, do any more than impose his personal opinion upon the parties?

· As to paragraph 1A, how can a manager's rights under the proposed appointment be reconciled with the proposition that he owes the second defendant and third defendant duties as an employee? What employee has the right to decline to accept his employer's direction?

Evidence and findings

264 It is the plaintiff’s perception that if Order 4 were made without Order 5, the consequence would be that the park would be closed, to the detriment of residents. Order 4 is, accordingly, not sought without Order 5.

265 Mr Tschannen, who is the alter ego of the defendant corporations which own and control the park, and fulfils the role of general manager of the enterprise. The gist of the arrangement proposed is that he would cease to have authority in the conduct of the business. He would be replaced as manager by his approved nominee or, failing approval by the plaintiff of his nominee, by the plaintiff’s nominee.

266 The new manager would be engaged on the terms specified.

267 Under the proposed terms, the new manager would be employed by the incorporated defendants and owe duties to them as an employee, but would not be amenable to direction by Mr Tschannen. The companies could, however, with Mr Tschannen’s complicity, appoint some other person with authority to give directions to the manager pursuant to the contract of employment with them.

268 The manager would be bound to take account of Mr Tschannen’s views when a decision might involve the long-term future of the park, expenditure over $500 or expenditure on infrastructure or of a capital nature. There is the prospect of uncertainty as to whether a particular decision would be covered by this rubric.

269 The manager may consult Mr Tschannen on other matters.

270 In the event of a dispute between the manager and Mr Tschannen, the matter would go to mediation and, if necessary, would be decided by the mediator (in effect, as an arbitrator). But what of a difference of opinion between the manager and a person appointed by the companies to exercise the companies’ rights under the contract of employment, and what of a dispute between the mediator and that person?

271 The end result would be appointment of a manager, with control over the assets and business of the corporate defendants, who would not be amenable to direction by their alter ego, but who might be amenable to direction by some other person appointed by the companies for the purpose. In the event of a dispute in the class of instances mentioned, authority would pass to a person appointed as mediator, who is not amenable to direction by the owners or by anyone, and whose decision might be in conflict with directions given by some other person appointed by the companies to exercise the companies’ role as employer.

272 It was suggested that the manager’s role is analogous to that of a manager under the Corporations Act 2001. It is not.

273 No provision is made for funding the running expenses of the park if rental income is inadequate at any time. The manager may request funds from the defendants but there is no obligation to fund. Nor should there be. What are the manager’s responsibilities in that event?

274 The legal incidences of the relationship between the manager and the companies – including responsibilities and potential liabilities – are uncharted and uncertain.

275 The proposed arrangement is so novel and so uncertain as to its legal implications that I see no reasonable prospect that anyone would accept the appointment. It is known that, prior to the hearing and during the hearing, the plaintiff attempted to find a candidate to proffer for appointment and failed. That is no surprise. It confirms my expectation.

276 The proposal is unacceptable and impracticable.

277 Nor am I satisfied that any such orders are warranted. Mr Tschannen has, I believe, turned over a new leaf. I refer to the following passages in Mr Tschannen’s evidence.

Q. You have in the past effectively accused various residents, particularly Messrs Shepherd and Hogg, of playing games with you?
A I can't recall that I've actually said that.

Q. But you take the view that the tribunal applications by them are not, generally speaking, serious applications; they have been taken with a view to upsetting you or making your life difficult?
A. I do accept that, yes.

Q. Is it the case a number of your actions have been in the same vein, is that right?
A. I have to say yes.

Q. It's not necessarily a one-way street?
A. I'd accept that, yes. [Tr 276]

…

Q. It was put to you on a number of occasions that there had been areas of noncompliance with tribunal orders and the like which have only been remedied after the commencement of these proceedings; do you recall those questions?
A. Yes.

Q. Had you taken or was it your intention to take any steps to sorting out these compliance or noncompliance issues before the commencement of these proceedings?

A. Some of them I put on the back-burner. The proceedings motivated me to really tidy up these things, to bring them forward.

278 There is no currently unresolved problem in relation to the management of the park. In these circumstances, there is no warrant for such a scheme as has been proposed.

Compliance with Tribunal orders (paragraph 11)

Summons

11. AN ORDER that the Defendants and each of them, their servants and agents comply with orders made by the Consumer Trader and Tenancy Tribunal and the Residential Tribunal, as listed in Schedules B and C to this Summons. [Schedules B & C are annexed.]

12. [Not pressed]

279 In Schedule B to the Summons in its final form one item only is specified, being –

SHEPHERD, Alan

Provide rent receipts indicating whether the resident is in debit or credit as at the date of payment and by what amount and reflecting the proper rent payable with reference to orders of the Tribunal.

280 In Schedule C to the Summons in its final form one item only is specified, being –

Applicants: A & S Shepherd

Order, 26/8/2002: Quiet enjoyment of premises – Blackington to pay applicant $700 compensation

Plaintiff’s further submissions and contentions

281 The following is an extract from the plaintiff’s document “Further submissions and contentions”.

· Convictions for failing to comply with Tribunal orders:

· Bruce McKenzie (26) - consent to assignment to Garry McGowan 9/3/2001;

· Barry & Lorraine Dumbleton (233) - consent to assignment to Jacksons 6/3/2001;

· Gerhard Tacke (61) - consent to assignment to Wadley 2/3/2001;

· Alan Shepherd (115) - proper rent receipt 23/2/2001.

· The list was compiled by Michael Finch, an investigator in the employ of the plaintiff, with reference to the Murwillumbah Local Court files produced on subpoena in these proceedings.

Defendants’ outline

282 The following is an extract from the defendants’ “Outline” document.

Paragraph 11

Evidence and findings

283 There were earlier matters. They are referred to in the written submissions. But the law has run its course in relation to them with convictions in the Local Court.

284 The item in Schedule B has been effectively resolved by the agreement to accept an accountant’s certificate.

285 There appears to be a slip in Schedule C. On 26 August 2002, the Tribunal published orders limiting the rent payable by Mr and Ms Shepherd until a garbage skip was moved from opposite their site, and for refund of $14.70 overcharged for a letterbox. I believe that the order intended to be referred to is one made on 16 June 2003, being for $540 as compensation for breach of the statutory covenant for quiet enjoyment. There was delay in payment of that order. The order was registered in the Local Court and an application was made for a garnishee order. The order was paid before that went into effect. According to Mr Shepherd’s uncontested evidence, another garnishee order had to be taken out in order to recover Mr Shepherd’s costs of $148. The figure of $700 appears to have come mistakenly from a different order under which Mr Shepherd was ordered to pay $700 for damage to property when he drove over a garden bed.

286 There is now no unsatisfied order of the Tribunal except for Mr Shepherd’s rent order mentioned in Schedule B, which is subject to appeal but is effectively resolved.

287 A case for relief has not been made in relation to this topic.

Compensation (paragraphs 16, 17 and 18)

288 This section of the judgment deals with paragraphs 16, 17 and 18 of the Further Amended Summons.

Summons

16. AN ORDER that the rent paid by Margaret Knight for residential site number 236 since the dwelling became unoccupied on 21 April 2001 be refunded within 28 days of the making of this order.

17. AN ORDER that the rent payable by Margaret Knight for residential site number 236 be suspended until such time as the dwelling is reoccupied.

18. AN ORDER that compensation be paid, within 28 days of the making of this order, to those residents who have left the Park since 1 January 2002, such compensation to be the difference in value between the value of the relocatable homes or registrable moveable dwellings as at the date when the resident left the Park, as assessed by a licensed real estate agent agreed on by the parties or, if no agreement is reached, appointed by the President of the Real Estate Institute and the amount paid by the defendants and all costs paid by the resident associated in moving from the Park.

Defendants’ submissions on strikeout application

289 The following is an extract from the defendants’ “Submissions on Strikeout Application” document.

Paragraphs 16 and 17:

· No legal or factual basis for these orders is made out.

· The affidavit of Mrs Knight does not disclose that a single offer was made to her, passed on to the defendants, and rejected by them. It does not disclose one potential assignee rejected by the defendants. As has been pointed out by the defendants in correspondence, her affidavit contains a number of explanations why she cannot sell her home for the price she wishes, many of which could not, on any view, give rise to a legal liability on the part of the defendants: see page 3 of the bundle, between paragraphs 14 and 15. In any event, if Mrs Knight (which is not conceded) has a valid complaint, the proper measure of her damages is not the amount which she has been legally obliged to pay for rent.

Paragraph 18

· The "residents who have left the Park since 1 January 2002" are not a class of whom it could be said that they all have claims for damages against the defendants, or claims of the same kind.

· There may even be such persons who are not deponents, and the proposed order is not limited to deponents. The deponents who have left the Park since 1 January 2002 seem to be Thelma Brown, Frederick George Fredson, Myrtle June Molloy, Hans Mistler, Brian Northcote and Iris Mary Winch.

· Mr Fredson's affidavit of 31 January 2003 discloses that he entered into an agreement by which he (and his wife) on the one hand and the park owner on the other gave up claims against the other: see annexure H to the affidavit.

· Mrs Molloy's affidavit of 23 May 2003 discloses that she when she put her home on the market, it was then inspected by one person who she did not regard as a genuine applicant: see paragraph 5 (which refers to an annexure to her earlier affidavit). She then negotiated a deal with Mr Tschannen: see paragraph 7. No prospective assignee was put forward by her.

· Mr Northcote's affidavit of 30 January 2003 discloses that, after a dispute with the defendants about a proposed assignment, he entered into a deed of settlement in which each party gave up all claims etc. against the others.

· Mrs Winch's affidavit of 24 February 2003 discloses that she sold her home for the same price as she paid for it, and left the park because of her declining health: see paragraph 8

· From this it is clear that the category of "residents who have left the Park since 1 January 2002" includes persons who have no claim at all, and persons who have entered into agreements by which they have formally compromised their claims against one or other of the defendants. For any claim for damages to succeed, these compromise agreements would have to be set aside. No basis for such orders is made out, and no such order could be made without those persons being parties to the proceedings.

Plaintiff’s response to defendants’ submissions on strikeout application

290 The following is an extract from the plaintiff’s “Response to Defendants’ Submissions on Strikeout Application” document.

Paragraphs 16 and 17

· The orders sought on behalf of Mrs Knight are based on a breach of s 44(k) of the Fair Trading Act which provides:-

· It is contended that Ms L. Tschannen, an employee of the second defendant and for whose acts the second defendant is vicariously liable, stated that Mrs Knight would not be able to transfer the lease and that any buyers would have to move the home from the site (see par 24 of Mrs Knight’s affidavit, 30 January 2003).

· Mrs Knight deposes that she is elderly, unwell and in a nursing home. The misrepresentation as to her rights caused her distress (par 25). She has had to reduce the price of her home, but has been unable to sell.

· The Court has power under s 72(2) and (4) to order compensation be paid by the defendants for breaches of the Act. Each person seeking compensation has signed a consent (see the exhibit to the affidavit of Mr Finch) and the statutory bases of the orders are so satisfied.

Paragraph 18

· The orders sought are, of necessity, limited to the persons who have given their consent for the Commissioner to take action on their behalf for compensation (see sub-ss 72(2), (4) of the Fair Trading Act). It is not a wide-ranging order in the sense proposed by the defendants.

· The preponderance of evidence is that the inevitable approach of the defendants was:-

to inform residents that no assignment of lease, or sale of the home on-site, was possible;

Plaintiff’s outline

291 The following is an extract from the plaintiff’s “Outline” document.

Orders for compensation under s 72 of the FT Act (orders 16, 17 and 18).

· The orders sought on behalf of Mrs Knight are based on a breach of s 44(k) of the Fair Trading Act which provides:-

“A person shall not, in trade or commerce, in connection with the supply or possible supply of goods or services ...

(k) make a false or misleading representation concerning the existence ... of any ... right ..;

(l) make a false or misleading representation concerning a person’s rights or obligations under a residential tenancy agreement (within the meaning of the Residential Parks Act 1998) under which the residential premises consist of a residential site in a residential park …”.

· It is contended that Lynda Tschannen, an employee of the second defendant and for whose acts the second defendant is vicariously liable, stated that Mrs Knight would not be able to transfer the lease and that any buyers would have to move the home from the site (see par 24 of Mrs Knight’s affidavit, 30 January 2003).

· Mrs Knight deposes that she is elderly, unwell and currently living in a retirement village. The misrepresentation as to her rights caused her distress (par 25). She has had to reduce the price of her home, but has been unable to sell.

· The Court has power under s 72(2) and (4) to order compensation be paid by the defendants for breaches of the Act. Each person seeking compensation has signed a consent (see the exhibit to the affidavit of Mr Finch) and the statutory bases of the orders are so satisfied.

· The orders sought are, of necessity, limited to the persons who have given their consent for the Commissioner to take action on their behalf for compensation (see sub-ss 72(2), (4) of the Fair Trading Act). It is not a wide-ranging order in the sense proposed by the defendants.

· The preponderance of evidence is that the inevitable approach of the defendants was:-

• to inform residents that no assignment of lease, or sale of the home on-site, was possible;

• to offer to purchase the relocatable home;

• if the resident took proceedings in the Tribunal, to defend such proceedings; and

• on a number of occasions, to appeal (in all cases unsuccessfully) to the Supreme Court.

· By the time the above processes had been completed, the residents had either sold their homes to the park owner, or their buyers had, not incomprehensibly, walked away from the purchase. It would be an incorrect approach for the Court to deal with each deponent as if they, individually, were presenting a case for compensation on their own behalf. The plaintiff is the Commissioner, not each of the individual deponents, and on ascertaining whether a person has “sustained ... loss or damage” by the conduct of the defendants the Court is entitled to have regard to the whole of the evidence and the whole of the conduct.

Plaintiff’s contentions of facts

292 The following is an extract from the plaintiff’s “Contentions of Fact” document.

Purchase of homes and vans by the park

· Mr Tschannen made a number of offers to purchase vans or relocatables after sales had, to his knowledge, fallen through elsewhere and the sellers were more than merely willing to leave the Park. Mr Gehrig accepted an offer of $5,000 from the Park to sell their vans. Mrs Molloy was told by Mr Tschannen that he would not pay more than $5,000 after telling her that any buyers would have to “take it out of the park”. Mr Freire gave evidence in cross-examination that that sum was the most Mr Tschannen was willing to pay for a van, even though the sellers invariably were asking more on the open market. The persons whose consents are annexed to the affidavit of Mr Freire are the persons on whose behalf compensation is sought for the circumstances of the sale of vans where no other buyers were available.

· The plaintiff seeks orders that this matter be referred for external assessment to establish whether the sale of vans were at an under value, and if so, by how much. There is sufficient evidence to suggest that the sales occurred in a context of unequal bargaining power and acceptance of the standard $5,000 was as a last resort on the part of the vendors.

Plaintiff’s contentions of facts

293 The following is an extract from the plaintiff’s “Contentions of Fact” document.

Purchase of homes and vans by the park

· Mr Tschannen made a number of offers to purchase vans or relocatables after sales had, to his knowledge, fallen through elsewhere and the sellers were more than merely willing to leave the Park. Mr Gehrig accepted an offer of $5,000 from the Park to sell their vans. Mrs Molloy was told by Mr Tschannen that he would not pay more than $5,000 after telling her that any buyers would have to “take it out of the park”. Mr Freire gave evidence in cross-examination that that sum was the most Mr Tschannen was willing to pay for a van, even though the sellers invariably were asking more on the open market. The persons whose consents are annexed to the affidavit of Mr Freire are the persons on whose behalf compensation is sought for the circumstances of the sale of vans where no other buyers were available.

· The plaintiff seeks orders that this matter be referred for external assessment to establish whether the sale of vans were at an under value, and if so, by how much. There is sufficient evidence to suggest that the sales occurred in a context of unequal bargaining power and acceptance of the standard $5,000 was as a last resort on the part of the vendors.

Defendants’ outline

294 The following is an extract from the defendants’ “Outline” document.

Paragraphs 16 and 17

The affidavit of Mrs Knight does not disclose that a single offer was made to her, passed on to the defendants, and rejected by them. It does not disclose one potential assignee rejected by the defendants. In any event, if Mrs Knight (which is not conceded) has a valid complaint, the proper measure of her damages is not the amount which she has been legally obliged to pay for rent.

Paragraph 18

· The defendants rely upon their written submissions concerning the strike out application. Those submissions are repeated, with some modifications, as follows:

· The "residents who have left the Park since 1 January 2002" are not a class of whom it could be said that they all have claims for damages against the defendants, or claims of the same kind.

· There may even be such persons who are not deponents, and the proposed order is not limited to deponents. The deponents who have left the Park since 1 January 2002 seem to be Thelma Brown, Frederick George Fredson, Myrtle June Molloy, Hans Mistler, Brian Northcote and Iris Mary Winch.

· Mr Fredson's affidavit of 31 January 2003 discloses that he entered into an agreement by which he (and his wife) on the one hand and the park owner on the other gave up claims against the other: see annexure H to the affidavit.

· Mrs Molloy's affidavit of 23 May 2003 discloses that no prospective assignee was put forward by her, and she negotiated a deal with Mr Tschannen: see paragraph 7 of her affidavit.

· Mr Northcote's affidavit of 30 January 2003 discloses that, after a dispute with the defendants about a proposed assignment, he entered into a deed of settlement in which each party gave up all claims etc. against the others.

· Mrs Winch's affidavit of 24 February 2003 does not disclose any misconduct on the part of the defendants.

· From this it is clear that the category of "residents who have left the Park since 1 January 2002" includes persons who have no claim at all, and persons who have entered into agreements by which they have formally compromised their claims against one or other of the defendants. For any claim for damages to succeed, these compromise agreements would have to be set aside. No basis for such orders is made out, and no such order could be made without those persons being parties to the proceedings.

· It would be unusual for this Court to refer damages questions to "a licensed real estate agent", and, in any event, the ordinary principle is that a Court will not proceed to an assessment of damages (separately from the principal proceedings) unless satisfied that a loss has been sustained. The evidence does not lead to this conclusion.

Evidence and findings

295 Ms Knight is elderly and unwell. She has moved to other accommodation. She has wanted to sell her dwelling and assign her tenancy agreement for some time. Her unchallenged evidence is that she was told by Ms Tschannen in June 2001 that a buyer would have to remove the dwelling. She says that she accordingly reduced her asking price. She has not found a buyer.

296 It is not known whether Ms Knight’s initial or current asking prices have been realistic.

297 There is no evidence as to whether she has been informed by officers of the plaintiff that the restriction on sale conveyed to her by Ms Tschannen is without legal justification. I would assume she was so advised at the time she swore her affidavit in January 2003 and possibly at an earlier time.

298 It is not open to be found, in these circumstances, that Ms Knight has suffered financial loss as a result of the false statement made to her by Ms Tschannen.

299 As for other potential claimants, the plaintiff does not ask for other cases to be referred out for assessment of an established entitlement to compensation but for the purpose of ascertaining whether any other person has such an entitlement. The court is not the appropriate agency to direct and supervise such an investigation.

300 No basis has been established for any order as claimed in this section of the summons.

Orders

301 There will be declarations pursuant to paragraphs 184, 222 and 238 of this judgment.

302 Counsel should bring in short minutes of order, including as to costs by a date I will specify.

303 I will list the matter for mention only at 9.15 am on a date I will specify for the purpose of making orders insofar as the form of orders is agreed. Counsel will inform my associate whether they wish to argue any matter relating to the form of orders or in relation to costs on that occasion or on a later date.

-o0o-

Last Modified: 04/22/2004

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Citations

Commissioner for Fair Trading v Tschannen [2004] NSWSC 67

Most Recent Citation

Blackington Pty Limited & 1 Ors v Leonard Hogg & 2 Ors [2007] NSWSC 266

Cases Citing This Decision

1

Blackington Pty Limited & 1 Ors v Leonard Hogg & 2 Ors [2007] NSWSC 266

Cases Cited

4

Statutory Material Cited

5

Australian Competition and Consumer Commission v IMB Group Pty Ltd [1999] FCA 313

Australian Competition and Consumer Commission v Goldy Motors Pty Ltd [2000] FCA 1885

Commissioner for Fair Trading v H.M.S. Direct Limited [2003] NSWSC 415

CITATION:	Commissioner for Fair Trading v Tschannen & Ors [2004] NSWSC 67
HEARING DATE(S):	22-26, 29 September 2003 3, 8 & 10 October 2003
JUDGMENT DATE:	18 February 2004
JURISDICTION:	Common Law
JUDGMENT OF:	Sperling J at 1
DECISION:	Counsel should bring in short minutes of order, including as to costs.
CATCHWORDS:	Consumer protection - fair trading - power to make declarations and grant injunctions based on breaches of the Residential Parks Act 1998 - whether breaches of that statute - declarations - other relief refused
LEGISLATION CITED:	Consumer, Trader & Tenancy Tribunal Act 2001, s52 Corporations Act 2001 Fair Trading Act 1987, s4, s42, s43, s65, s66, s72 Residential Parks Act 1998, s3, s5, s8, s9, s10, s11, s20, s30, s41, s48, s53, s54, s61, s62, s63, s64, s67, s80, s82, s85 s87, s88, s89, s90, s98, s99, s100, s101, s102, s113, s121, s127, s128, s143, s144, s147 Residential Tribunal Act 1998 (repealed), s47A
CASES CITED:	Australian Competition & Consumer Commission v Goldy Motors Pty Ltd [2000] FCA 1885 Australian Competition & Consumer Commission v IMB Group Pty Ltd [1999] FCA 313
PARTIES :	Commissioner for Fair Trading Warren Eric Tschannen Blackington Pty Ltd Caraco Pty Ltd
FILE NUMBER(S):	SC 13202/02
COUNSEL:	Ms JAD Needham for the Plaintiff Mr IM Wales SC for the Defendants
SOLICITORS:	Office of Fair Trading for the Plaintiff Graham Cochrane, Solicitor for the Defendants

SCHEDULE A
Folio	Section	Contravention	Date of Contravention	Nature of Conduct	Resident	Site No.
3	20	Interfere with right to quiet enjoyment	02/04/2002	Blackington changed the lock on the ensuite door & refused to provide a key	Grace McGowan	25
5	20	Interfere with right to quiet enjoyment	26/04/2001	Park manager Friere kicked resident	Alan Shepherd	115
8	20	Interfere with right to quiet enjoyment	11/02/2002	Restrict vistor's access to permanent resident's site	Vincent Flanagan	205
9	20	Interfere with right to quiet enjoyment	11/02/2002	Restrict vistor's access to permanent resident's site	George Jones	206
10	20	Interfere with right to quiet enjoyment	12/02/2002	Restrict vistor's access to permanent resident's site	Darrell Jackson	233
11	20	Interfere with right to quiet enjoyment	13/02/2002	Restrict vistor's access to permanent resident's site	John Luback	226
12	30	Restrict entry of resident	28/11/2001	Blackington refused to issue keycard which effectively operates the boomgate	Grace McGowan	25
13	30	Restrict entry of resident	28/11/2001	Blackington refused to issue keycard which effectively operates the boomgate	Gary McGowan	26
14	30	Restrict entry of resident	28/11/2001	Blackington refused to issue keycard which effectively operates the boomgate	Warren & Jennifer Hill	29
15	30	Restrict entry of resident	28/11/2001	Blackington refused to issue keycard which effectively operates the boomgate	Darrell Jackson	233
16	30	Restrict entry of resident	30/11/2001	Blackington refused to issue keycard which operates the boomgate	Vincent Flanagan	205
17	30	Restrict entry of resident	16/02/2002	Blackington refused to issue keycard which operates the boomgate	Margo Knight	236
18	30	Restrict entry of resident	11/02/2002	Blackington did not provide working keycard for boomgate	Yvonne Hughes	213
19	41	Right to assign rights	06/03/2001	Blackington failed to comply with order of Tribunal to assign rights	Barry & Lorraine Dumbleton	233
20	41	Right to assign rights	02/03/2001	Blackington failed to comply with order of Tribunal to assign rights	Gerhard Dieter Tacke	61
21	41	Right to assign rights	09/03/2001	Blackington failed to comply with order of Tribunal to assign rights	Bruce McKenzie	26
22	41	Right to assign rights	Blackington failed to comply with order of Tribunal to assign rights	Leonard Duncombe	222
23	48(3)(b)	Rent receipts	04/03/2001	Rent receipt did not indicate if rent is in debit / credit as at payment date & by what amount.	A. Shepherd	115
25	48(3)(b)	Failure to provide rent receipts	30/7/00 & 27/8/00	Rent receipt did not indicate if rent is in debit / credit as at payment date & by what amount.	Alan Shepherd	115
26	48(3)(c)	Fail to issue detailed rent receipts.	18/03/2001	Blackington gave rent receipts which did not include the period for which rent is paid.	A. Shepherd	115
27	48(3)(c)	Fail to issue detailed rent receipts.	16/04/2001	Blackington gave rent receipts which did not include the period for which rent is paid.	A. Shepherd	115
28	61	Rent not to exceed amount specified by Tribunal	6/12/00 - 11/5/01	Blackington debited rent in excess of amount Tribunal specified.	Clifford Kelly	221
29	61	Rent not to exceed amount specified by Tribunal	6/12/00 - 11/5/01	Blackington debited rent in excess of amount Tribunal specified.	Grace McGowan	25
31	61	Rent not to exceed amount specified by Tribunal	6/12/00 - 3/5/01	Blackington debited rent in excess of amount Tribunal specified.	Raymond Skennar	92
34	61	Rent not to exceed amount specified by Tribunal	8/12/00 - 11/5/01	Blackington debited rent in excess of amount Tribunal specified.	Margo Knight	236
35	61	Rent not to exceed amount specified by Tribunal	8/12/00 - 23/2/01	Blackington debited rent in excess of amount Tribunal specified.	Gerhard Dieter Tacke	61
36	61	Rent not to exceed amount specified by Tribunal	1/12/00 - 18/5/01	Blackington debited rent in excess of amount Tribunal specified.	Vincent Flanagan	205
37	82(2)	Owner must not interfere with a sale	16/09/2002	Blackington tells potential buyers that residence will have to be removed from the park in circumstances where such interference is not permitted	Leonard Duncombe	222
38	82(2)	Owner must not interfere with a sale	23/11/2001	Blackington tells potential buyers that residence will have to be removed from the park in circumstances where such interference is not permitted	Brian & Annie Northcote	88
39	82(2)	Owner must not interfere with a sale	Blackington tells potential buyers that residence will have to be removed from the park in circumstances where such interference is not permitted	Fred & Shirley Fredson	212

SCHEDULE B Rent Records
Folio No.	Residents	Site No.	Orders	Corrective Action
10	SHEPHERD, Alan	115	Respondent to provide rent receipts	Provide rent receipts indicating whether the resident is in debit or credit as at the date of payment and by what amount and reflecting the proper rent payable with reference to orders of the Tribunal