D. & V.A. Allen and the Sundown Village Housing Association Inc v Flagship Leisure Parks Ltd t/as Best Western Sundown
[2007] ACTRTT 26
•26 October 2007
AUSTRALIAN CAPITAL TERRITORY
RESIDENTIAL TENANCIES TRIBUNAL
CITATION:D. & V.A. Allen and the Sundown Village Housing Association Inc v Flagship Leisure Parks Ltd t/as Best Western Sundown [2007] ACTRTT 26
RT 222of 2007
Catchwords: Excessive rent increases for occupancy agreements; res judicata, issue estoppel, electricity charges.
Tribunal:A. Anforth , Member
Date: 26 October 2007
AUSTRALIAN CAPITAL TERRITORY )
RESIDENTIAL TENANCIES TRIBUNAL ) No: RT 222 of 2007
RE: D. & V.A. Allen
(The First Applicant)
The Sundown Village Housing Association Inc
(the Second Applicant)
AND:Flagship Leisure Parks Ltd t/as Best Western Sundown
(Respondent)
DECISION
Tribunal : A. Anforth , Member
Date : 26 October 2007
Decision : The application is dismissed
…………………………….
Member
REASONS FOR DECISION
Background:
This application concerns a proposed increase to site rental at the Sundown Village mobile home park at Narrabundah in the ACT and a dispute over the method of recovery of electricity consumption charges from the residents. The proposed increase in site rental is from $88.50pw to $107.00 per week. The electricity charges levied by the Respondent/landlord in accordance with the ACTEWAGL domestic tariff for standard consumer contracts, were based on the reading of a separate electricity meter at each site in the park.
The relationship between the First Applicants and the Respondent is governed by the “occupancy” provisions of Part 5A Residential Tenancies Act 1997 (RTAct 1997).
The First Applicant is composed of the husband and wife combination of Mrs and Mr Allen. The site agreement is in fact only in the name of Mrs Allen. At the time the site agreement was entered in 1992 Mr Allen was the park manager and the director of the company that owned the park at that time. He apparently did not think it prudent that he should appear on the site agreement. In so far as Mrs Allen is a party to the site agreement nothing turns on the presence of Mr Allen as a nominated applicant in the present matter.
The standing of the Second Applicant is more problematical as this Association is not a party to any site agreement. This issue is discussed below.
The parties have filed an Agreed Statement of Facts which is set out at para 12 below. This statement sets out some of the history of the dispute. The dispute underpinning the present application appears to be a continuation of the same dispute dealt with by the Tribunal in Allan v Flagship Leisure Parks P/L trading as Sundown Motel [2006] ACTRTT 3. In fact two of the orders sought by the Applicants in the present matter, namely those at para 6(b) and (c) below, raise the same issues of law as were dealt with in the previous decision. Whether any res judicata or issue estoppel arises from the terms of the previous decision is dealt with below. A copy of the previous decision was annexed to the application filed in this matter and is further annexed to these reasons for decisions.
The present application:
On 13 April 2007 the Applicants lodged an application with the Tribunal seeking orders:
(a) “disallowing the site rental rate increase to be effected from 1 May 2007 in relation to all sites at the Sundown Village site operated by the Respondent;
(b) “that the practice of Lessor in passing on charges for water, electricity and other government charges is in breach of the agreement between the parties”
(c) “that no increase in the site rental rate be effected until such time as this matter has been determined by the Tribunal (sic) the practice of the landlord for charging rent increases on CPI”.
There is an obvious clerical error in order (c) above sought by the Applicant. The Tribunal understands there to be two separate requests, namely a request for a stay on any site rental increase until the application is determined by the Tribunal; and a request for a ruling on the landlord’s practice of automatically charging rent increases based on CPI without carryout the calculation of the average increase in ACT taxes and charges required by clause 15 of the site agreement.
The stay order sought in relation to the notified rent increase follows automatically from section 66 RTAct 1997 without the need for any order of the Tribunal. The Respondent implemented the stay during for the duration of proceedings before the Tribunal. The effect of the stay was spent at the time the Tribunal delivered its decision on 13 July 2007.
The application annexed a copy of the notice from the Respondent notifying the rent increase to Mr and Mrs Allen to take effect on 1 May 2007. The rent increase was to the weekly sum of $107.00 per week. Subsequence evidence disclosed that the current rent is $88.50 per week and therefore the proposed increase was $18.50pw which is a 21% increase. The letter read:
“On the 8th February 2005 your site rent increased to $88.50 per week.
Subsequently our company was required to attend the Residential Tenancies Tribunal of the Australian Capital Territory, to dispute the practice for charging rent increases based on CPI.
It is clear that the current Agreement of Occupancy states:
RENT INCREASE Clause 15.
“An amount decided by increasing the current rent by the same proportion as the average increase in ACT Government charges for the property in the period since the last review: OR the comparable market rate in Canberra.”
After much deliberation and consideration could increase the rent under Act Government charges which have risen by an average of 47% to $130.00 per week.
As of 1st May 2007 your site rent adjusted as per the ACT Government charges is $130.00 per week: but reduced down to $107.00 per week.”
10. On 16 May 2007 the Respondent filed a Response to the Applicant’s claim. The Response was filed on behalf of the Respondent by Meyer Vandenberg, solicitors and amounted to a bare denial.
11. The matter was listed before the Tribunal on 17 May 2007. Mr O’Neil, solicitor appeared for the Applicants and Mr Brackenreg , solicitor appeared for the Respondent. The matter was adjourned to 28 June 2007 for hearing with the following procedural orders:
1.That is matter is adjourned for further hearing on Thursday the 28th day of June, 2007 at 2.00 pm.
2. That an agreed statement of facts is to be filed by the 31st day of May 2007.
3. That the Applicant is to file and serve their Statement of Facts and Contentions by the 31st day of May 2007.
4. That the Respondent is to file and serve its Statement of Facts and Contentions by the 7th day of June 2007.
5. That the Applicant is to file and serve its reply by the 14th day of June 2007.
6. That the Statement of Facts and Contentions are to annex any witness statements, expert reports, photos or other evidence relied upon.
IT IS NOTED:
A requirement to file and serve means that the submission must be given to both the Tribunal and the other party prior to the required date. Service by hand, post or facsimile is acceptable.
12. On 27 June 2007 the parties filed an Agreed Statement of Facts which read:
AGREED STATEMENT OF FACTS
1. In 1988, Sundown Village opened as an 80 unit motel with restaurant, swimming pool, tennis court and conference centre.
2. A Residential Village for relocatable homes has since been added to Sundown Village.
3. The Residential Village for relocatable homes now comprises 88 relocatable dwelling sites.
4. The Motel component of Sundown Village comprises 100 motel sites.
5. By an agreement between the 'landlord' and each of the 'owner tenants' at Sundown Village (first adopted in April 1992) the landlord gives the 'owner tenant' the right to take up occupancy on a designated site in the Residential Village ('the Agreement').
6. The Agreement includes the following definitions:
"landlord" means the person who grants the right to occupy sites under this Agreement and includes the landlords heirs, executors, administrators and assigns;
"site" means a site on which a relocatable dwelling is situated or is intended to be situated;
"tenancy" means the right to occupy the site under this Agreement;
"owner tenant" means the person/s who owns the relocatable dwelling and who has the right to occupy the site under this Agreement.
7. It is a term of the Agreement that the 'landlord' agrees to pay A.C.T. general rates; water rates; land tax; and any other charges set out in the additional terms of this agreement, which are payable by the landlord.
8. It is a term of the Agreement that the 'owner tenant' agrees to pay site rental on time; electricity to the site as metered at a rate not greater than the published domestic tariff of the electricity supply authority; gas as metered by the gas supply company; and any other charges set out in the additional terms of this agreement, which are payable by the owner tenant.
9. Clause 15 of the Agreement provides as follows:
RENT INCREASE
15. The landlord must give the owner tenant sixty (60) days notice in -writing of
any increase in the rent. The landlord agrees not to increase the rent more than once
each calendar year.The increase, as determined by the landlord, will be either -
(a) An amount decided by increasing the current rent by the same
proportion as the average increase in A.C.T. Government charges for the property in the period since the last review; or
(b) The comparable market rate in Canberra;
•whichever is the greater.
10. From 22 April 1991 the Site Rent was $60.00 per week.
11. The Respondent purchased Sundown Village in 1999 and became known as the Best Western Sundown Village.
12. The rental rate of $70.00 per week was increased to $77.00 per week with effect from 10 October 2000. This increase was based on CPI increases since the last rent increase in July 1997 plus GST costs.
13. The rental rate of $77.00 per week was increased to $81.60 per week with effect from 5 February 2002. This increase based on increases in the CPI since the date of the last increase in the rental rate.
14. The site rent of $81.60 per week was increased to $83.90 per week with effect from 4 February 2003. This increase based on increases in the CPI since the date of the last increase in the rental rate.
15. The site rent of $83.90 per week was increased to $86.08 per week with effect from 3 February 2004. This increase based on increases in the CPI since the date of the last increase in the rental rate.
16. The site rent of $86.08 per week was increased to $88.50 per week with effect from 8 February 2005. This increase was based on increases in the CPI since the date of the last increase in the rental rate.
17. By a letter to each 'owner tenant' dated 28 February 2007 the Landlord advised of an increase in the site rent from $88.50 to $107.00 per week with effect from 1 May 2007. This increase was said to have been based on average increases of 47% in government charges.
13. On 27 June 2007 the Respondents files its Statement of Facts and Contentions which read as follows:
FACTS
1. The Respondent adopts the agreed statement of facts.
CONTENTIONS
2. The Respondent is subject to the following ACT Government charges.
a) Water and sewerage.
b) Land tax.
c) General rates.3. The Respondent pays a private contractor for the removal of garbage.
4. For convenience, the Respondent sets out in table form below the increase in charges it is subject to and liable to pay for the period 1 July 2004 to 30 June 2007.
ACT Government Charges
1 July 2004 to 30 June 2005
1 July 2005 to 30 June 2007
Increase
Water & Sewerage
$87,619.00
$123,277.00
40.7%
Land Tax
$6,906.36
$11,605.72
68%
General Rates
$5,698.59
$12,845.19
125.4%
Garbage
$60.00 a tonne
$80.00 a tonne
33.3%
Total
$100,226.95
$147,727.91
47.39%
5. The Respondent contends the rental rate increase is not excessive and is in accordance with Clause 15(a) of the Agreement.
6. The Respondent further contends that there is no similar mobile home park within the ACT in order to prepare a valid comparison of market rent for the purposes of Clause 15(b) of the Agreement.
6. The Respondent contends the relevant CPI number for the period 8 February 2005 to 28 February 2007 is 7.4%. By virtue of Section 68 (2) of the Act, a rent review based on CPI increase in rent from $88.50 per week results in a rent of $96.35 per week as follows:
$88.50 x (7.4% x 1.2) = $96.357. The Respondent contends that an increase only in accordance with CPI as above is unfair after taking into account the increase in government charges the Respondent is required to meet.
8. In comparison, the Respondent contends a rent increase in accordance with Clause 15(a) of the Agreement could result in a rent increase of $41.94 to $130.44 per week as follows:
$88.50 + ($88.50 x 47.39%) = $130.449. The Respondent provides the following services and amenities to the members of the Applicant;
· General store
· Swimming pool and Tennis Court
· Restaurant - 20% discount and special function rates off usual prices
· Community Hall
· Pets allowed
· Security Patrols
· Ground and Road maintenance
· Visitor Parking
· Garbage collection
· Staff assistance in times of need
10. The Respondent contends that after taking into account the government charges payable by the Respondent, the actual rent increase applied and the services and amenities provided by the Respondent, the rent increase to $107.00 per week is not excessive and ought to be allowed.
14. Both in their Statement of Facts and Contentions and during the hearing of the matter it was conceded by the Applicants that the 47.30% increase in the relevant taxes and charges shown in the table was accurate. The content of this tale is not without its ambiguities which was addressed at the hearing.
15. On 28 June 2007 the Applicants file their Statement of Facts and Contentions which read:
1. The Applicant adopts the Agreed Statement of Facts.
CONTENTIONS
2. The Applicant accepts paragraphs 2, 3, 4 and 6 of the Respondent's Statement of Facts and Contentions.
3. The Applicants acknowledge that the notice of the increase in the site rent dated 28 February 2007 provided the requisite 60 days notice in accordance with clause 15 of the Occupancy Agreement.
4. The Applicant contends that the reference in clause 15(a) to the 'average increase in government charges for the property' should be read as a reference to the property occupied by the owner tenants. The definition of ^property' in the Occupancy Agreement refers to the whole of the land situated at Jerrabomberra Avenue, Narrabundah .... and its improvements known as Sundown Village'. The Applicants contend that the reference to Sundown Village' is a reference to that part of the property upon which the relocatable homes occupied by the Owner Tenants are situated (as distinct from that part of the property upon which the motel and conference facilities are located).
5. The Applicants contend that the part of the property upon which the relocatable homes are located represents approximately 35% of the property.
6. The Applicants contend that the proposed rental rate increase of $18.50 per week will generate income of $84,656.00 per annum to offset increases in government charges totalling $35,658.00 for the period since the last increase in the site rental rate.
7. The Applicants contend that for the purposes of sub section 68(3) of the Residential Tenancies Act that the Respondent has not identified or quantified:
(a) Any outgoings or costs of the Respondent in relation to the premises occupied by the Applicants, other than the increase in government charges identified;
(b) Any Services provided by the Respondent to the tenant;
(c) The value of any work performed or improvements carried out to the Property by the Respondent; or
….
(i) Any other matters which would justify the increase in the rental proposed.
8. The Applicants contend that the services and amenities to which the Respondent refers at paragraph 9 of the Respondent's Statement of Contentions are either not used or minimally used by the Applicants and are provided also for the amenity of guests of the Motel and Conference facility operated by the Respondent. The Applicants contend further that any increase in costs associated with the provision of these services and amenities (which have not been identified) should be apportioned between the occupants of the sites to whom the site rental rate applies and the motel and conference facilities operated by the respondent.
9. The Applicants contend that there is no comparator in the ACT from which any comparable market rate can be defined for the purposes of clause 15(b) of the Agreement.
10. The Applicants contends that notwithstanding clause 15 of the Agreement all rental rate increases since 1999 have been effected by reference to the Consumer Price Index. (CPI)
11. The Applicants contend that the only method applied for rental rate increases since the Respondent assumed ownership of the sites occupied by the Owner Tenants has been by reference to increases in the Consumer Price Index (CPI).
12. The Applicants contend that the Australian Bureau of Statistics All groups index numbers for Canberra indicate a change of 6.4% (including the March 2005 Quarter) for the period March 2005 - March 2007. Refer Attachment A summarised Below
Australian Bureau of Statistics CPI, All groups index numbers and percentage changes - Canberra
March Qtr 05 0.5%
June Qtr 05 0.5%
September Qtr 05 1.3%
December Qtr 05 0.8%
March Qtr 06 0.9%
June Qtr 06 1.8%
September Qtr06 0.7%
December Quarter 06 -0.3%
March Qtr 07 0.2%13. The Applicants contend that CPI increases of 6.4% for the period since the last increase in the site rental rate ($88.50 x 6.4% = $5.66) which increase the site rental rate to $94.16 is not unreasonable. Applying the criteria described at sub section 68(2) of the Residential Tenancies Act 1997 an increase in the site rental rate which is 20% greater than any increase in the index number over the period since the last rental rate increase is presumed to be excessive. For the purposes of subsection 68(2)(b) of the Residential Tenancies Act 1997 an increase in the site rental rate is presumptively excessive if it exceeds $6.79 (increasing the site rental rate to $95.29).
14. The Applicants contend that a rental rate increase in accordance with the CPI will generate income of $25,900.16 (or $31,071.04 if the criteria described at subsection 68(2)(b) of the Residential Tenancies Act is applied. The Applicants further contend that this amount represents a more than reasonable proportion (62.64%) of the total cost of the increase in government charges (in the sum of $35,658.00) when apportioned against the motel and conference facility operated by the Respondent over approximately 65% of the property.
15. The Applicants contend that the increase in the site rental rate from $88.50 to $107.00 per week is excessive.
16. On 28 June 2007 Mr O’Neil appeared for the Applicants and Mr Brackenreg appeared for the Respondent.
17. Mr Brackenreg helpfully provided aerial photographs of the park site and photographs of the First Applicants house on the site..
18. The parties tendered a copy of the Site Agreement dated 22 April 1992 pertaining to the First Applicant’s site. The Agreement is in the name of V.A. Allen and relevantly reads:
1. The landlord agrees to pay:
A.C.T. general rates; water rates; land tax; and any other charges set out in the additional terms of this agreement, which are payable by the landlord.The owner tenant agrees to pay:
Site rental on time; electricity to the site as metered at a rate not greater than the published domestic tariff of the electricity supply authority; gas as metered by the gas supply company; and any other charges set out in the additional terms of this agreement, which are payable by the owner tenant.
…
15. The landlord must give the owner tenant sixty (60) days notice in writing of any increase in the rent. The landlord agrees not to increase the rent more than once each calendar year.
The increase, as determined by the landlord, will be either -
(a) An amount decided by increasing the current rent by the same proportion as the average increase in A.C.T. Government charges for the property in the period since the last review;
OR
(b) The comparable market rate in Canberra;
Which ever is the greater.
….18. This Agreement, except as amended in writing and signed by both the landlord and the owner tenant, comprises the whole agreement between the landlord and the owner tenant. Neither the owner tenant nor the landlord is entitled to rely on any oral representation or any implied condition, in determining the respective rights and obligations of both the tenant and the landlord under this Agreement.
Additional terms (Including rules) may be included in this Agreement if they do not conflict with the standard terms of this Agreement.
….
Ending the agreement:
Where a breach of this agreement has occurred: The landlord may give a notice to the owner tenant ending the agreement by:
· delivering it personally to the owner tenant or a person who appears to be 16 years or older who usually pays the rent on behalf of the owner tenant; or
· delivering it to the residential premises occupied by the owner tenant and leaving it there for the owner tenant with some person who appears to be 16 years or older; or
· sending it by post to the residential premises occupied by the owner tenant.
An owner tenant may give notice to the landlord ending the agreement by:
· delivering it personally to the landlord, the landlord's agent or person who appears to be 16 years or older who usually receives the rent on behalf of the landlord; or
· sending it by post or facsimile transmission to the landlord's usual place of residence or business or employment; or
· sending it by post or facsimile transmission to the landlord's agent at the agent's usual place of business.
Immediate notice may be given to end this agreement where:
· the owner tenant has not paid the rent for 28 days; or
· the landlord or the owner tenant or sub-tenant breaks the agreement; or
· the landlord or the owner tenant wants to give vacant possession a the end of the fixed term set out in the agreement.
If notice is given for these reasons, 28 days notice must be given.
19. The hearing on 28 June 2007 was conducted in an informal manner. Mr Allen was invited to participate and to give any evidence or make such statements as he wished. Mr Allen informed the Tribunal that he had been a principle player in the drafting of the site agreement and that it was a deliberate choice not to include a CPI clause in the site agreement. He said his company deliberately determined to use the percentage increase in government charges as the basis for rent increases because he considered that to be in the best interests of the company at the time.
20. Mr Nunn, director of the Respondent, helpfully clarify the ambiguity attaching to the table at para 4 of the Respondents Statement of Facts and Contentions which sets out the table of ACT government charges over three financial years 2004-2005, 2005-2006, 2006-2007.
21. On its face para 4 of the Respondent’s Statement of Facts and Contentions is difficult to understand. It states that the total of charges for the 2004-2005 year was $100,226.95 which was an agreed fact at the hearing of the matter. The third column purports to include the total of taxes and charges for two financial years, being those of 2005-2006 and 2006-2007 but gives only one figure of $147,727.91. The immediate inference is that the one figure is the cumulative total of the taxes for both years. If this interpretation were adopted then it would follow that the average of the taxes and charges for the 2005-2006 and 2006-2007 financial years was only $73863.95 which represents a decrease in taxes and charges over those charged in the 2004-2005 financial year.
22. At the hearing Mr Nunn said that the $147,727.91 was in fact the total of taxes and charges paid for the 2005-2006 year. He said he assumed that the same amount would be paid for the 2006-2007 financial year which had not yet ended at the time the Statement of Facts and Contentions was prepared.
23. The Tribunal finds this explanation credible. It was not challenged by the Applicants at the hearing and therefore the Tribunal accepts that there was a 47.3% increase in the taxes and charges in the 2005-2006 financial year which was expected to remain static in the 2006-2007 financial year.
24. Mr Nunn complained to Mr Allen that the terms of the site agreement gave the residents an indefinite security of tenure which was becoming a problem for the Respondent.
25. At the hearing some rough calculations were engaged in by the parties. The Applicants urged that because the taxes and charges were levied on the Respondent’s property as a whole, which included both the motel and mobile home sites, there should be some notional apportionment of the taxes and charges between the two modes of use of the property. Mr Nunn said that the sites occupied about 60% of the total property and this figure was adopted as the basis of the apportionment.
26. If the increase in taxes and charges of $47,500 (with no allowance for garbage disposal) is apportioned on this 60% basis then the share attributable to the mobile sites is $28,500.00. This contrasts with an annual increase in rent from the mobile sites of $84,656.00 (being $18.50 per week x 88 sites x 52)
27. On this premise the Applicants argued that the rent increase was excessive. The Tribunal noted that the cost of government taxes and charges was only one of the overheads for the Respondent. There were staff costs, costs of retaining the security guards, pool maintenance etc in addition to some return to the Respondent on their investment. The Tribunal noted that the Village was not an exercise in social housing by the government and was a fully commercial venture by the Respondent.
28. At the hearing there was a general discussion of the scope of the Tribunal’s power to hear and determine excessive rent increase applications in the case of occupancy agreements. These issues are dealt with below.
29. Following the hearing matter was adjourned for decision.
30. On 13 July 2007 the Tribunal gave a decision dismissing the application. No reasons were given on that occasion.
31. On 10 Augsut 2007 the Applicants applied to the Supreme Court for leave to appeal from the above decision.
32. On 4 September 2007 the Applicants requested a statement of reasons for the Tribunals decision. The present reasons for decision are a response to that request.
Legislation:
Rent increase provisions:
33. The provisions government rent increases are sections 66-70 RTA 1997:
66 Freezing rents
If an application for review of a rental rate increase has been made but not decided, no increase in the rental rate happens unless allowed by the tribunal.
67 Orders
The tribunal may make the following orders in relation to an application for review of a rental rate increase:
(a) an order allowing the increase applied for or the other increase that the tribunal considers just;
(b) an order disallowing the increase;
(c) an order disallowing part of the increase.68 Guideline for orders
(1) The tribunal must allow a rental rate increase that is in accordance with the standard residential tenancy terms unless the increase is excessive.
(2) For subsection (1)—
(a) unless the tenant satisfies the tribunal otherwise, a rental rate increase is not excessive if it is less than 20% greater than any increase in the index number over the period since the last rental rate increase or since the beginning of the lease (whichever is later); and
(b) unless the lessor satisfies the tribunal otherwise, a rental rate increase is excessive if it is more than 20% greater than any increase in the index number over the period since the last rental rate increase or since the beginning of the lease (whichever is later).
(3) If a tenant or lessor proposes that a rental rate increase is or is not excessive, the tribunal, in considering whether it is satisfied about the proposal, must consider the following matters:
(a) the rental rate before the proposed increase;
(b) if the lessor previously increased the rental rate while the relevant tenant was tenant—
(i) the amount of the last increase before the proposed increase; and
(ii) the period since that increase;
(c) outgoings or costs of the lessor in relation to the premises;
(d) services provided by the lessor to the tenant;
(e) the value of fixtures and goods supplied by the lessor as part of the tenancy;
(f) the state of repair of the premises;
(g) rental rates for comparable premises;
(h) the value of any work performed or improvements carried out by the tenant with the lessor’s consent;
(i) any other matter the tribunal considers relevant.
(4) If the tribunal considers a proposed rental rate increase is excessive but a lesser increase would not be, it may disallow so much of the increase as is excessive.
(5) In subsection (2):
index number means the rents component of the housing group of the Consumer Price Index for Canberra published from time to time by the Australian statistician.
69 Effect of orders
(1) If the tribunal makes an order under section 67 (a) or (c), the rental rate increase takes effect from the date when the proposed increase would, apart from section 66, have taken place.
(2) The tribunal may, on application, grant a tenant time to pay rent owed because of the operation of subsection (1).
(3) If—
(a) the tribunal makes an order mentioned in section 67 (b) or (c); and
(b) despite section 66, the tenant has paid the lessor the full amount of the rental rate increase proposed by the lessor;
the tribunal may order the lessor to pay to the tenant the difference between the amount the tenant paid to the lessor and the amount that was payable.
70 Further increases
If a proposed rental rate increase has been reviewed by the tribunal, any further purported increase in the rental rate for a period of 12 months after the day the proposed increase was to take effect is void.
34. The provisions governing “occupancy agreements” are sections 71A-71G of Part 5A RTA 1997:
71A Who is a grantor?
(1) A person is a grantor if the person grants a right of occupation under an occupancy agreement.
(2) Grantor includes a prospective grantor.
71B Who is an occupant?
(1) A person is an occupant if the person has a right of occupation under an occupancy agreement.
(2) Occupant includes a prospective occupant.
71C What is an occupancy agreement?
(1) An agreement is an occupancy agreement if—
(a) a person (the grantor) gives someone else (the occupant) a right to occupy stated premises; and
(b) the premises are for the occupant to use as a home (whether or not with other people); and
(c) the right is given for value; and
(d) the agreement is not a residential tenancy agreement.
(2) The agreement may be—
(a) express or implied; or
(b) in writing, oral, or partly in writing and partly oral.
Note After 6 weeks, the occupancy agreement should be in writing (see s 71E (c)).
(3) The right to occupy may be—
(a) exclusive or not;
(b) given with a right to use facilities, furniture or goods.
(4) The person given the right to occupy the premises may be—
(a) a boarder or lodger; or
(b) someone prescribed by regulation for this section.
Note This Act does not apply to retirement villages, nursing homes, hostels for aged or disabled people or other prescribed premises (see s 4).
71D When does an occupancy agreement start?
An occupancy agreement starts on the earliest of the following days:
(a) the day stated in the agreement;
(b) the 1st day both parties have signed the agreement and received a copy signed by the other;
(c) the day the occupant takes possession of the premises;
(d) the 1st day the grantor receives rent from the occupant.71E Occupancy principles
(1) In considering a matter, or making a decision, under this Act in relation to an occupancy agreement for premises, a person must have regard to the following principles (the occupancy principles):
(a) an occupant is entitled to live in premises that are—
(i) reasonably clean; and
(ii) in a reasonable state of repair; and
(iii) reasonably secure;
(b) an occupant is entitled to know the rules of the premises before moving in;
(c) an occupant is entitled to the certainty of having the occupancy agreement in writing if the occupancy continues for longer than 6 weeks;
(d) an occupant is entitled to quiet enjoyment of the premises;
(e) a grantor is entitled to enter the premises at a reasonable time on reasonable grounds to carry out inspections or repairs and for other reasonable purposes;
(f) an occupant is entitled to 8 weeks notice before the grantor increases the amount to be paid for the right to occupy the premises;(g) an occupant is entitled to know why and how the occupancy may be terminated, including how much notice will be given before eviction;
(h) an occupant must not be evicted without reasonable notice;
(i) a grantor and occupant should try to resolve disputes using reasonable dispute resolution processes.
(2) If an occupant occupies a mobile home on land in a mobile home park and the mobile home is not provided by the grantor—
(a) the occupancy principle in subsection (1) (e) applies to the land and any fixtures provided by the grantor, but not the mobile home; and
(b) the grantor is entitled to enter the mobile home only with reasonable notice, at reasonable times, on reasonable grounds and for reasonable purposes.
71F Regulations about occupancy agreements
(1) A regulation may make provision in relation to occupancy agreements, including, for example, standard occupancy terms.
Note 1 Power under an Act to make a regulation includes power to make different provision for different classes of matters (see Legislation Act, s 48 (1) (a)).
Note 2 An example is part of the Act, is not exhaustive and may extend, but does not limit, the meaning of the provision in which it appears (see Legislation Act, s 126 and s 132).(2) A regulation about standard occupancy terms must be consistent with the occupancy principles.
71G Standard occupancy terms
An occupancy agreement—
(a) must contain, and is taken to contain, terms to the effect of the standard occupancy terms prescribed by regulation; and
(b) may contain any other term that is consistent with—(i) the standard occupancy terms; and
(ii) the occupancy principles.
35. There currently are no regulations or standard occupancy terms made pursuant to sections 71F and 71G.
36. The Tribunal’s power to entertain disputes over occupancy agreements is found in sections 71I, 71J and 73 which read:
71I What is an occupancy dispute?
A dispute is an occupancy dispute if it—
(a) is between the parties to an occupancy agreement; and
(b) is about, or relates to, the agreement.71J Tribunal to have regard to occupancy principles
In considering a matter, or making a decision, under this part in relation to an occupancy dispute, the tribunal must have regard to the occupancy principles.
73 Applications for resolution of dispute
(1) A party to a residential tenancy agreement may apply for a resolution of a tenancy dispute.
(2) A party to an occupancy agreement may apply for a resolution of an occupancy dispute.
(3) An application must—
(a) be in writing; and
(b) contain the prescribed particulars; and
(c) for an application that relates to a rent increase—subject to section 65 (1), be made not less than 2 weeks before the date the rent increase is proposed to take effect; and
(d) be lodged with the registrar.
37. At the time the previous matter was determined between these parties section 71C(1)(d) was framed in the following terms:
An agreement is an occupancy agreement if-
…
(d) the grantor may lawfully terminate the agreement, without cause, by giving less than 6 months notice
38. This form of section 71C(1)(d) was repealed by Part 1.12 of the Justice and Community Safety Legislation Amendment Act 2006 and the present form of the section was substituted.
39. Section 137 RTA 1997 provides that Part 5A applies to occupancy disputes that start on or after the day that part 5A commenced which was on 1 January 2006.
40. In the previous matter the Tribunal held that the presence of former section 71C(1)(d) took the site agreement outside the scope of an “occupancy agreement”. The repeal of that provision now resolves that issue and the Tribunal has jurisdiction to hear the present dispute.
Consideration of the issues:
The standing of the Second Applicant:
41. The Second Applicant is an association incorporated under the Associations Incorporation Act 1991 to represent the interests of the residents at the park. The Association is not itself “an occupant” in accordance with the definition in section 71B and hence is not a party to an occupancy agreement per section 71C.
42. Because the Association is not an “occupant” any grievance raised by the Association cannot be an “occupancy dispute” within the meaning of section 71I. Therefore the Association itself cannot make application to the Tribunal under section 73 for a resolution of an occupancy dispute.
43. Nevertheless sections 102(d) and 88 RTAct 1997 provides for the joinder of “any person” as a party to the dispute. Section 160 Legislation Act 2001 provides that a “person” includes a “corporation” which is further defined in the Dictionary to the Legislation Act 2001 to include a “body corporate”. Section 22 Associations Incorporation Act 1991 defines an Association to be a “body corporate”. Accordingly the Second Applicant is “a person” for the purposes of section 102(d) and 88 RTAct 1997.
44. The Association has a valid and useful role to play in the present dispute. The Association appeared through Mr O’Neil to represent the remainder of the residents (other than the First Applicants) and thus obviated the necessity for each of those 87 other residents to lodge a personal application and appear.
45. The involvement of the Association in this manner does however raise its own issues:
(a) If the present application by the Association had been successful then presumably the Respondent would have reduced the rent increase for all residents who were members of the Association. But what of any resident who was not a member of the Association?
(b) What if the Respondent declined to implement a successful application by the Association in favour of residents other than Mrs and Mr Allen. Would a decision by the Tribunal in the name of the Association have been enforceable in favour of the residents other than Mr and Mrs Allen?
(c) What if a resident other than Mrs and Mr Allen were to now lodge a further application to oppose the rent increase for a second time. Is the present decision binding on those other residents who are members of the Association to raise any form of res judicata?
46. These issues were not raised and hence not argued in the present matter. They are best left to be dealt with if and when the issue is raised. For the purposes of these proceedings the parties and the Tribunal accepted the participation of the Association and in so doing the Tribunal implicitly ordered the joinder of the Association as a party.
The effect of the previous decision:
47. In the previous decision the Tribunal determined at para 35 that:
(a) the use of CPI as a basis for rent increases was lawful. In the previous matter, as in the present matter, the application of the CPI produces a lesser rent increase than does the application of “the average increase in A.C.T. Government charges for the property in the period since the last review” provided for in clause 15 of the site agreement.
(b) the electricity charges imposed at the level of ACTEW’s domestic tariff was lawful even if it produced a surplus for the Respondent/landlord over the charges actually paid by the Respondent to ACTEW.
48. The issue arises as to whether the previous decision gives rise to any res judicata or issue estoppel preventing the Applicants from raising the same points in the present matter.
49. The governing principles of an issue estoppel were stated by Dixon J in Blair v. Curran (1939) 62 CLR 464 at 531–2:
“A judicial determination directly involving an issue of fact or of law disposes once and for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. The estoppel covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion ... Nothing but what is legally indispensable to the conclusion is thus finally closed or precluded. In matters of fact the issue estoppel is confined to those ultimate facts which form the ingredients in the cause of action, that is, the title to the right established.”
50. The distinction between res judicata and issue estoppel was expressed by Dixon J at 532:
“[I]n the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence, while in the second, for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order.”
51. There have been a range of decision in the NSW jurisdiction in which decisions of the former NSW Residential Tenancies Tribunal and its successor, the Consumer Trader and Tenancy Tribunal have been held to give rise to both res judicata and issue estoppel. See for example R & P Ranga v. Marriott (1997) NSWRT 204 where the Tribunal declined to allow a matter to be relitigate relying on the res judicata doctrine, saying:
“[T]he application is misconceived in two respects. First the application seeks to raise issues previously argued and determined by a consent agreement between the tenant and the applicant’s agent. Secondly the applicant seeks to raise the issue of pianola. The case for compensation has been heard by Ms Steer. Once a matter in issue between the parties has been litigated and decided it cannot be raised again between the same parties. The principle of Res Judicata applies. A party to proceedings may appeal only to the Supreme Court ...
Tribunal members are equals. They operate on the same tier of jurisdiction. If it were open to the Tribunal member to hear again an issue already decided by a colleague then litigation would never end. The ‘loser’ of the second hearing would want a third hearing and so on. Litigation before the Tribunal is a match, not a series ..."
52. In Todd v Todd [2006] NSWSC 864 the Barr J in the Supreme Court held that a determination of the Tribunal to the effect that no tenancy existed in a particular case raised a res judicata preventing the same party relying upon the existence of a tenancy in proceedings in the Supreme Court. Barr J said the appropriate remedy was for the aggrieved party to appeal the decision of the Tribunal for error of law (if one could be identified).
53. On the other hand there is compelling authority that the doctrines of res judicata and issue estoppel do not apply in the Commonwealth Administrative Appeals Tribunal (Kowalski -v- Trustee Mitsubishi Motors Australia Ltd Staff Superannuation P/L 2003 FCAFC 18; Bramwell -v- Repatriation Commission 158 ALR 623; Minister for Immigration & Multicultural Affairs v Ali [2000] FCA 1385; Plumb-v-Comcare (1992) 17 AAR 1; Australian Postal Commission -v- Oudyn 2003 FCA 318; APC -v- Mowbray 2003 FCA 1258)
54. The distinguishing difference between the NSW and Commonwealth tribunals in determining whether res judicata and issue estoppel applies or not, is whether the tribunal in question is seen to be exercising judicial or administrative power. Per Dixon J in Curran, res judicata and issue estoppel apply only in respect of determinations:
(a) of a judicial nature
(b) between the same parties
(c) on the same issue
55. In the Commonwealth sphere the separation of powers doctrine preclude the exercise of judicial power by the Administrative Appeals Tribunal or the Industrial Relations Commission and hence the rulings of the Federal Court that res judicata and issue estoppel do not arise in these forums. In NSW there is no equivalent separation of power doctrine leading to a somewhat ambiguous status of the power exercised by the NSW tribunals.
56. In Re Residential Tenancies Tribunal of NSW & Henderson; Ex parte Defence Housing Authority (1997) 146 ALR 495; (1997) 71 ALJR 254, the High Court considered the issue of whether leases by citizens to the Defence Housing Authority (“the DHA”) were caught by the NSW Residential Tenancies Act. The High Court ruled that the Act did apply to the DHA whether or not the DHA formed part of the Commonwealth. In the course of the hearing it seems that counsel for the Tribunal conceded that proceedings before the Tribunal were not a “suit” within the meaning of ss 56 and 64 of the Judiciary Act 1903 (Cth) (at 546). McHugh J addressed the issue of the Tribunal’s status and commented that the Tribunal is a quasi-legislative body, as opposed to a judicial body:
“However, the proceeding in the tribunal is not a suit in a court. For the purposes of the present proceedings, the tribunal is a quasi-legislative body. It makes, not declares rules. It has no power to finally declare the rights of the parties for the purpose of the proceedings. Instead, it is being asked to make orders, breaches of which give rise to offences against the Act” (at 525; 1278 at B–C).
57. Gummow J took a similar view except that he described the Tribunal’s powers as “administrative” (at 536; 1286 A–B). His Honour’s reasoning in this regard was essentially the same as that of McHugh J.
58. The decision of the Supreme Court in Aavelaid v. Residential Tenancies Tribunal (unreported, Supreme Court, NSW, 1 September 1995, Dowd J) is difficult to reconcile with the obiter comments in Henderson notwithstanding the different statutory contexts involved. In Aavelaid, the Supreme Court held that the Tribunal was a “court” for the purposes of the Suitors Fund Act 1951 for the following reasons:
“The Tribunal operates to determine rights between parties. It has a power to enforce its orders, it takes evidence and carries out procedures in the nature of a court; it vested in it powers through the Registrar of the Tribunal for the conduct of its proceedings, in the manner of a court.”
59. In Pluteus Pty Ltd v. Hughes (1997), the Tribunal sought to distinguish Henderson and said:
“I refer to the tribunal as a court for the purposes of the decision notwithstanding the decision of the High Court in Re: Residential Tenancies Tribunal of NSW and Ex parte Defence Housing Authority (1997) 71 ALJR 1254 which held that the Tribunal was not a court, for the purposes of the Judiciary Act 1903 (Cth). The nature of the orders sought by the parties to those proceedings are quite different to the orders sought here, namely for payment of compensation following abandonment by the tenant. Further it appears that some concessions may have been made in respect to the nature of the Tribunal’s role. In my view it is therefore appropriate to distinguish the High Court’s decision given the significant difference in the type of application being determined. Reliance is placed on a decision as to the nature of the Tribunal of the NSW Court of Appeal in State Rail Authority of NSW v. Consumer Claims Tribunals and Ors (1988) 14 NSWLR 473 which, in dealing with a body with a constitution, jurisdiction and powers similar in many respects to this Tribunal decided that it was a court exercising judicial power despite the informality of many of its procedures.”
60. In Hamilton v. Consumer Claims Tribunal of NSW (1999 NSWSC 847) Davies AJ held that the former Consumer Claims Tribunal was a Court and not an administrative tribunal. The Consumer Claims Tribunal was subsumed into the Consumer Trader and Tenancy Tribunal (CTTT).
61. In Woodcrest Homes P/L v. Fair Trading Tribunal and Tavaceen P/L 2002 NSWSC 552 Bell J in the Supreme Court upheld the former Fair Trading Tribunal’s power to order a party to lodge a security for costs for proceedings before the Tribunal. Bell J took the view that the Tribunal was exercising judicial power. The former Fair Trading Tribunal has been subsumed into the present Consumer Trader and Tenancy Tribunal.
62. Whether the separation of power doctrine applies to the characterisation of the power exercised by the Residential Tenancies Tribunals in the ACT depends on whether the territories power in section 122 Constitution is to be read subject to the constraints on Commonwealth judicial power found in the Constitution. This issue was reviewed at some length by the Australian Law Reform Commission in Discussion Paper 64 (December 2000) at 7.24-7.47. The Commission pointed to decisions either way on the point and concluded that the issue is unresolved by the High Court. The effect of the subsequent decisions of Western Australia v Ward 2002 HCA 28 and Bennett v Commonwealth 2007 HCA 18 is equally unclear.
63. In the present matter the Tribunal has determined not to apply either of the res judicata or issue estoppel doctrines for the following three reasons:
(a) The lack of clarity concerning the application of these doctrines to proceedings in the Tribunal:
(b) The fact that the Association has been joined as a party in a representative capacity on behalf of the other residents which puts to an end the strict identity of parties between the previous decision and the present matter;
(c) The previous decision was, at the request of the parties, made in circumstances beyond the power of the Tribunal as set out in the previous decision. In so far as the Tribunal, as a statutory tribunal cannot acquire jurisdiction by consent beyond that conferred in the Act (Multicon Engineering Pty Ltd v. Federal Airports Corporation (1997) 47 NSWLR 631 at 664; Cockle v Isaksen (1957) 99 CLR 155 at 161; Thomson Australian Holdings Pty Ltd v. Trade Practices Commission (1981) 148 CLR 150 at 163–165; National Parks and Wildlife Service v.Stables Perisher Pty Ltd (1990) 20 NSWLR 573 at 585; Household Financial Services Ltd v. Commercial Tribunal (NSW) (1995) 36 NSWLR 220 at 222), the previous decision could not in any circumstances amount to a valid judicial determination per the requirements in Curran.
64. In the absence of any issue estoppel arising out of the previous decision does not prevent the Tribunal having regard to evidence presented in the previous matter. Section 121(2)(b) RTAct 1997 provides that the Tribunal is not bound by the rules of evidence and may inform itself on any mater in any matter that it considers appropriate. In fact at the hearing the parties explicitly referred to the evidence in the previous matter.
Rent increases under the site agreement:
65. Clause 15 of the site agreement permits rent increases once each calendar year. Clause 15 is framed in terms of proportionate increases in the rent as opposed to increases in absolute dollar terms. The increase permitted is the greater of the proportionate (or percentage) increase in comparative rents in Canberra OR the proportionate increase in the “average … in the ACT government charges for the property for the period since the last review”.
66. It was common ground between the parties that there are no comparative premises in Canberra and thus it was not possible to identify any comparative rents. This left the sole basis for determination of rent increases to be the proportionate increase in the “average … in the ACT government charges for the property for the period since the last review”.
67. The last review took effect on 8 February 2005 and so the relevant increase in taxes and charges is that occurring since that date. The relevant proportionate increase in those taxes and charges since the last review is about 47.3%.
68. The rent increase proposed by the Respondent to take effect on 1 May 2007 from $88.50 pw to $107.00 pw is only 21% and is thus less than half of the permissible range of increase under the site agreement.
The relevance of Part 5 of the Act to occupancy agreements:
69. Part 5 of the Act contains sections 66-70 that deal with rent increases under residential tenancy agreement. The Respondent noted at the hearing that nothing in Part 5 purported to directly apply to occupancy agreements and the terms of section 68(1) suggested that the Part was not intended to extend beyond residential tenancy agreements.
70. Part 5 existed in the Act before the enactment of Part 5A that deals with occupancy agreements. It is therefore possible that the legislature never intended that Part 5 would apply to occupancy agreement. The alternative explanation is that following the enactment of Part 5A the drafts person simply omitted to made the necessary consequential amendments to Part 5.
71. Section 73 deals with applications to the Tribunal to resolve both residential tenancy and occupancy disputes and section 73(3)(c) explicitly envisages that such disputes could entail disputes over rent increases. It is clear from section 73 that the Tribunal has jurisdiction to hear a dispute over a rent increase in the context of an occupancy agreement and presumably to hear a complaint that the rent increase is excessive. The lack of clarity concerns the criteria the Tribunal is to use in undertaking that exercise. This task is not made easier by the absence of any prescribed standard occupancy terms the making of which is authorised by section 71F.
72. The terms of the site agreement itself are plainly a relevant consideration in this exercise; as are the “occupancy principles” set out in section 71E. The Applicants contended that the history of the past conduct of the parties was also a relevant consideration. In particular the Applicants submitted that the past history of levying only CPI increases was indicative of an informal agreement between the parties to that effect.
73. The parties were less clear in their submissions concerning the relevance of the factors set out in section 68(3). As the Tribunal understood it, both parties took the view that these factors may be considered as a guide to the assessment of whether a rent increase under an occupancy agreement was excessive, but were not binding in this exercise.
74. The Tribunal sees a difficulty in the above construction of Part 5 urged by both parties. Part 5A relating to occupancy agreement no where makes any provision for challenging any rent increase on any grounds, and therefore provides no explicit basis for challenge an otherwise lawful rent increase on the grounds that it is excessive. The only suggestion that this power in the Tribunal was intended by the legislature comes from the terms of section 73 which applies to both occupancy agreements and residential tenancy agreement. If section 73 intended to treat in an identical fashion rent increase applications for both residential tenancies and occupancy agreements then in order to give effect to this intention the legislature presumably also intended that section 68(3) would apply to both forms of application.
75. For this reason the Tribunal is prepared to assume the application of Part 5 to occupancy agreements. On this assumption the relevant test for reviewing the present rent increase is whether it is “excessive” having regard to the factors in section 68(3).
76. The Tribunal put to the parties that “excessive” in this context must incorporate some right for the landlord to cover all their outgoings and to make some profit. A rent increase could not be considered excessive simply because it resulted in a return to the landlord in excess of the landlords operating costs.
The relevance of the CPI:
77. There is no CPI option in the site agreement. The increase in CPI itself is only directly relevant to the issue of determining the onus of proof under section 68(2). Even then the index number referred to in section 68(2) is not the CPI rather it is the “rents component of the housing group” of the CPI for Canberra. There was no evidence of the later index number before the Tribunal and the parties acquiesced in the defacto substitution of the CPI as the relevant index.
78. The CPI may be indirectly relevant as a consideration to be taken into account in assessing whether a rent increase is excessive. In Commissioner for Housing v Keys 2004 ACTCA 17 the Court of Appeal noted that the CPI may take on particular relevance in circumstances where no comparable premises exists, such as is the present case.
79. In the present case the proposed increase of 21% over two years (or 10.5% per year) exceeds the statutory threshold of 120% of CPI in section 68(2) and therefore the Respondent bears the onus of satisfying the Tribunal that the increase is not excessive.
80. The Respondent contended that the CPI increase in the period 8 February 2005 to 28 February 2007 was 7.4%. For approximately the same period the Applicants contended that the CPI increase was 6.2%. The Applicants CPI table showed the CPI for the March 2007 quarter to be 0.2%.
81. It is plain that a CPI increase of 6.2% or 7.4% is substantially less than the 47.3% increase in ACT government taxes and charges.
82. The fact that the Respondent is permitted to increase rents in line with the proportionate increase in ACT government taxes and charges does not mean that the Respondent is obliged to increase the rent to the full extent of that proportionate increase. The Respondent may elect to impose a lesser rent increase. This rather obvious point formed the basis of the Tribunal’s decision to reject the First Applicants challenge to the use of CPI in the previous decision insofar as the use of the CPI produced a lesser rent increase.
The application of Part 5 of the Act:
83. Section 67 of the RTAct 1997 empowers the Tribunal to review a proposed rent increase and to allow the proposed increase in whole or in part depending on what the Tribunal considers “just”. Section 68(1) provides that the Tribunal “must” allow the increase unless the increase is “excessive”. In determining whether the propose rent increase is excessive the Tribunal must consider the matters set out in section 68(3).
84. Section 68(3)(a) requires a consideration of the rental rate before the proposed increase. The rental rate was $88.50 per week which by ACT standards is a modest rent. The Tribunal notes that the site agreement relates only to the site and that the Applicants have built there own house on the site. The Applicant’s do however have the benefit of the facilities referred to in para 9 of the Respondent’s Statement of Facts and Contentions notwithstanding that they are shared facilities. These facilities are substantial and form part of the Tribunal’s conclusion that the present weekly rent of $8.50 is modest.
85. Section 68(3)(b) requires a consideration of the amount the amount of the last increase before the proposed increase; and the period since that increase. This issue is dealt with in the Agreed Statement of Facts. The last increase before the present proposed increase occurred on 8 February 2005 and increased the rent from $86.08 to $88.50 which is 2.8%.
86. The proposed increase of 21% to take effect on 1 May 2007 since the last increase on 8 February 2005 represents a 9.33% average annual increase in rent over this period.
87. An increase of 9.33% per annum in rent for both of the last two years is a modest increase in terms of the Canberra market. The modesty of the increase is further accentuated by the modest base rent upon which the increase was imposed.
88. In the period April 1991 to October 2000 the rent was frozen at $60.00 per week. A CPI increase alone through out this period would see the current rent well in excess of the $107.00 per week the Respondent now seeks.
89. In the period October 2000 to February 2005 the rent only increased from $77.00 per week to $85.50 per week which is an average annual increase of 2.5%.
90. Section 68(3)(c) requires a consideration of outgoings or costs of the lessor in relation to the premises. The Tribunal heard the evidence of the increase in government taxes and charges for the same period at the rate of 47.3%. The Respondent also pointed to increases in labour costs and the costs of providing the maintaining the services and facilities at the park.
91. Section 68(3)(d) requires a consideration of services provided by the lessor to the tenant. These services are set out para 9 of the Respondents Statement of Facts and Contentions and include security services, swimming pool, tennis court, a community hall etc. The Tribunal did not have evidence of the Respondents budget on each of the these items but common experience suggests that a 10% annual increase in these operating costs is not unexpected. particular given the 47.3% annual increase in government charges over this same period.
92. When each of these factors is taken into account the Tribunal is not satisfied that the proposed rent increase is excessive. That being the case the Tribunal is required to allow the increase (s68(1)).
Electricity charges under the site agreement
93. Clause 1 of the site agreement provides that the residents are to pay “electricity to the site as metered at the a rate not greater than the published domestic tariff of the electricity supply authority”.
94. This charge does not form part of the rent for the site and thus any dispute over the charges for electricity does not fall within the ambit of the Tribunals power under section 67 and 68 to review rent increases save to the extent that these charges are relevant for the purposes of section 68(3)(i). But the dispute over the electricity charges is an “occupancy dispute” in its own right over which the Tribunal has jurisdiction.
95. Each site in the park is separately metered for electricity. In addition to the electricity consumed per site electricity is consumed in running the services and facilities in the park eg the swimming pool, the street lights in the park, the community hall, cleaning etc.
96. The issue of the rate of charging for electricity supplied to each site in the park was considered in the previous decision. In that case evidence was led from The Independent Competition and Regulatory Commission concerning the operation of section 98 Utilities Act 2000 which permits the Respondent to pass on to the residents of the park the cost of their metered consumption at the rate charged by ACTEW under the standard customer contract provided for in the Utilities Act 2000. There was also evidence from ACTEW which showed that the electricity charged to the park sites by the Respondent did not exceed ACTEW’s domestic tariff rate and therefore did not constitute a breach of the site agreement. There was no suggestion in the present case that any different practice was now being applied in the park.
97. In the previous matter the Applicant’s argued that charging the permitted domestic supply rate was unfair because it provided a gain to the Respondent over and above the price paid by the Respondent to ACTEW for the power in the first instance. The Respondent actually obtain the electricity for ACTEW at a price less than the domestic tariff rate. In the previous matter the Tribunal noted that the total cost to the Respondent in supplying electricity was greater than just the cost pain by the Respondent to ACTEW for the power. The Respondent had costs associated with the maintenance of the meters, the reading of the meters, that part of the electricity supply consumed in the common property (eg the pool, lighting etc) and related staff costs. The Tribunal was not satisfied that it was unfair for the Respondent to pass on the permitted domestic tariff rate to the residents in order to met its other operating costs. Nothing new has been raised in this case on the point.
98. Insofar as the dispute over the electricity pricing practice is an occupancy dispute in its own right, the Tribunal found that no breach of the site agreement had occurred and therefore dismissed the dispute.
99. Insofar as the dispute over the electricity pricing practice was relevant to the rent increase issue, the Tribunal could see no reason why the payment by the residents of the same domestic supply rate as apply to all other houses in Canberra for consumption only, should give rise to any claim for a reduction in rent.
A. Anforth
0