Excess Pty Ltd & ors v LLCP Pty Ltd & ors

[2008] NSWSC 419

CITATION:	Excess Pty Ltd & ors v LLCP Pty Ltd & ors [2008] NSWSC 419
HEARING DATE(S):	29 February 2008
JURISDICTION:	Equity Division Expedition List
JUDGMENT OF:	Brereton J
EX TEMPORE JUDGMENT DATE:	29 February 2008
DECISION:	Stay declined. Costs to follow the event.
CATCHWORDS:	REAL PROPERTY – residential park – encroachments on neighbouring property – order for removal not opposed by park owner or tenants – stay – whether stay should be granted pending outcome brought by tenants against owner in Consumer Trader and Tenancy Tribunal – where defendants are tenants of residential park – whether proposed orders might affect rights under residential parks legislation – whether adjacent owner is “person having superior title” to park owner – whether adjacent owner “becomes entitled to possession” as a result of proposed order – discretionary considerations.
LEGISLATION CITED:	(NSW) Residential Parks Act 1998, ss 16, 95(c), 122, 126, 134
CATEGORY:	Consequential orders
PARTIES:	Excess Pty Ltd (first plaintiff) Venturin Nominees Pty Ltd (second plaintiff) David Eric Walker (third plaintiff) Danielle Marie Pokorny (fourth plaintiff) Robert Charles Wilson (fifth plaintiff) Sharon Frances Wilson (sixth plaintiff) Kirkham Investments Australia Pty Ltd (seventh plaintiff) Edwards Investments Australia Ltd (eighth plaintiff) LLCP Pty Ltd t/as Seabreeze Caravan Park (first defendant) David John Holmes (second defendant) Arthur Barry Judd (third defendant) Robyn Anne Judd (fourth defendant) Fay Lees (fifth defendant) Jacqui Judd (sixth defendant)
FILE NUMBER(S):	SC 5893/07
COUNSEL:	Mr F Kunc SC (plaintiff) Ms A R Finnerty (solicitor agent) (first, second, third, fourth, sixth defendants) Mr N M Eastman (fifth defendant)
SOLICITORS:	De Vere Lawyers (plaintiffs) Dakim Law Solicitors (first defendant) Parker & Kissane (second, third, fourth, sixth defendants) Legal Aid Commission (fifth defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
EXPEDITION LIST

BRERETON J

Friday 29 February 2008

5893/07 Excess Pty Ltd & Ors v LLCP Pty Ltd t/as Seabreeze Caravan Park & 5 Ors

JUDGMENT (ex tempore)

1 HIS HONOUR: The first defendant LLCP Pty Limited carries on business as Seabreeze Caravan Park on and about land owned by it at South Ballina. The plaintiffs are the registered proprietors of land which adjoins the caravan park. The second, third, fourth, fifth and sixth defendants – which I shall call the tenant defendants – occupy sites in and about the caravan park under Residential Tenancy Agreements from the first defendant. They have installed on the sites that they occupy improvements which encroach on to the plaintiffs' land. By summons filed on 7 December 2007, the plaintiff brought these proceedings to compel the removal of the encroachments.

2 The proceedings were previously set down for an expedited final hearing on 11 April, but in circumstances that none of the defendants asserts any defence to the claim for substantive relief, or opposes the grant of that relief, it has been possible to deal with the matter today. The proceedings between the plaintiffs and LLCP have been settled upon terms of undertakings to be given by LLCP – on whose behalf Mr F Kunc SC, who appears for the plaintiffs, mentioned the matter today – to the plaintiffs and to the Court, with the proceedings as against LLCP to be otherwise discontinued. I will formally attend to the recording of those undertakings and the making of the appropriate consequential orders in due course. In substance, the result is that LLCP will co-operate in facilitating of the removal of the encroachments. The tenant defendants do not oppose orders being made in the terms of the draft orders now sought by the plaintiffs, save as to costs and save as to the time within which they are to be required to remove the encroachments. Again, I shall deal with the formalities in due course. Accordingly, the issues which remain for decision are, first, whether (as the tenant defendants submit) the operation of the orders should be stayed until further order and/or the tenant defendants allowed more time than the 28 days that would be permitted by the proposed orders and, secondly, the question of costs.

3 So far as a stay is concerned, the tenant defendants' argument is to the following effect. First, (NSW) Residential Parks Act 1998, s 95(c), has the effect that a Residential Tenancy Agreement terminates if a person having superior title to the park owner becomes entitled to the possession of the residential premises. “Residential premises” is defined as meaning any premises or part of premises – including any land occupied with the premises – used or intended to be used as a place of residence, and includes a residential site on which a removable dwelling is situated if the movable dwelling is used or intended to be used as a place of residence [s 3]. “Residential site” means within a site within a residential park that is used or intended to be used for the installation of a movable dwelling [s 3]. The second step in the argument is that if the tenant defendants’ Residential Tenancy Agreements are brought to an end, by the making of the proposed orders, then that may affect their remedies available to them against the park owner LLCP under the Residential Parks Act in the Consumer Trader and Tenancy Tribunal (“CTTT”). On that basis, it is submitted that the justice of the case requires a stay, in order to permit the defendants to prosecute proceedings they have brought in the CTTT and which are set down for hearing, at least in the case of some of the tenant defendants, on 7 and 8 April next.

4 I have already referred to s 95(c). One concept in s 95(c), of a person having superior title to that of the park owner, is very difficult to relate to land to which the park owner has no title at all – such as the land from which the encroachments are to be removed, which is not land to which the park owner LLCP has any title. In my view, the concept of a person having superior title to that of the park owner is concerned with, for example, a head lessor where the park owner is a lessee, or a park owner's mortgagee (although that is separately dealt with by s 95(e)). It would be extraordinary if this Act had the effect of modifying, limiting or excluding rights at law of persons on adjoining land in respect of encroachments on that land by a residential park. At least, very plain words would be required to evince such an intention. Reference was made to s 126, for example, which provides that where a person is or was in possession of residential premises as a resident under a Residential Tenancy Agreement at the time when proceedings of the recovery for possession were commenced before a court or tribunal by a person other than the park owner, then the tenant may apply to the court or tribunal for an order vesting a tenancy over the residential premises. While that makes some sense in the context of a mortgagee or a head lessor of a residential park, it would be extraordinary if that were intended to authorise an order vesting a tenancy over adjoining land held by a stranger to the park, on which a park tenant had encroached. That, to my mind, supports the conclusion that the concept of superior title was not intended to relate to an adjoining owner in respect of encroachments; rather, it was intended to relate to the title to the land of the park owner.

5 Another concept in s 95(c) is that of “becoming entitled to possession”, in which is implicit a change of status so far as entitlement to possession is concerned. To my mind, it concerns an entitlement to possession as a matter of right, as distinct from the exercise of that entitlement to possession in fact. It was submitted that, in the light of s 122, which prohibits any person – except in accordance with a judgment, warrant or order of a Court or tribunal – entering residential premises or any part of them, of which another has possession under a Residential Tenancy Agreement, for the purpose of recovering possession, there is no entitlement in a person to re-enter or enter premises unless and until a judgment, warrant or order issues. But any judgment, warrant or order for possession reflects a pre-existing entitlement to possession, rather than creating that entitlement. A mortgagee may become entitled to possession when there is an event of default under the mortgage; it is those material facts, rather than the subsequent order or judgment of the Court that creates an entitlement to possession. But in this case, the plaintiffs have always been entitled to possession of the relevant parts of the tenant defendants’ premises, which encroach on the plaintiffs’ land.

6 Accordingly, it cannot be said that this is a case in which the plaintiffs have become entitled to possession of the residential premises; they have always been entitled to possession of the relevant parts of them.

7 For those reasons, the better view is that s 95(c) is not attracted in the present circumstances. But lest I be wrong, what would be the consequences, if it were attracted?

8 The proceedings in the CTTT are authorised by s 16 of the Act. Section 16(6) confers on the CTTT jurisdiction to make various orders, including an order requiring an action in performance of the agreement, an order for the payment of an amount of money, an order as to compensation, and an order that a party perform such work or to take such other steps as may be specified to remedy a breach. Section 16(7) provides that such an order may be made, even though it may provide a remedy in the nature of an injunction or specific performance in circumstances in which such a remedy would not otherwise be available. Critically, for present purposes, section 16(8) provides that an application under the section may be made during the currency of or after the termination of a Residential Tenancy Agreement. It follows that, even if s 95(c) were to operate in the present circumstances to terminate the relevant residency agreements, that would not affect the jurisdiction of the CTTT to grant relief of the type which the tenant defendants seek, or would seek, in it.

9 It is put that, as a matter of discretion, termination may affect the readiness of the CTTT to grant relief. I am far from convinced that that is so, in circumstances where the tenant defendants may well be able to establish that they were, in a sense, the innocent victims of being allocated sites by LLCP, against whom their CTTT applications lie.

10 Reference was also made, albeit faintly, to s 134, as to the fate of goods left by the residents on the premises if the agreements are terminated. But even if this were otherwise of much significance, it is entirely up to the defendants whether or not they choose to leave their goods on the premises or not.

11 Accordingly, I am unpersuaded that significant prejudice would be occasioned to the tenant defendants in respect of their standing and ability to obtain relief from the CTTT, even if (contrary to my opinion) the proposed orders have the effect of terminating their Residential Tenancy Agreements.

12 Moreover, it is necessary to consider the position of the plaintiffs. While in proceedings for possession and for mortgagee sales, it is always easy to see practical hardship to a person suffering an order for ejectment or sale, nonetheless one has to consider the legal rights of the parties. A fundamental question on an application for a stay in any such case is whether any good reason has been shown for holding the successful plaintiff any longer out of its legal rights, which it has already been forced to come to court to vindicate. Particularly in the absence of a valuable undertaking as to damages – but I venture to think even if such an undertaking were offered in this case – I cannot see any good reason for holding the plaintiffs out of their legal rights for any longer than a reasonable time necessary to permit the defendants to comply with the order. I infer – from the circumstance that, as has been freely disclosed to the Court, the defendants are legally aided – that an undertaking as to damages is unlikely to be of meaningful value.

13 Accordingly, I do not propose to grant a stay, or to extend the time for compliance, as sought by the tenant defendants.

14 So far as the question of costs is concerned, the plaintiffs have succeeded, and virtually entirely so. They were compelled to resort to litigation to vindicate their rights, after having sent a letter of demand which did not produce an acknowledgment or acceptance that the encroachments would have to be removed. The defendants never have had a defence to the plaintiffs' claim. Their chief response has been that they wished to litigate their position as against LLCP in the CTTT, and I do not see how that is any answer to the plaintiffs' claim.

15 I do not regard the tenant defendants as having acted so unreasonably as to justify an indemnity costs order. But to found an ordinary costs order, it is not necessary that they have acted unreasonably at all; defendants who act reasonably but unsuccessfully still, ordinarily, suffer an adverse costs order.

16 Accordingly, I do not propose to grant a stay or extend time as sought by the tenant defendants. In my opinion, no reason has been shown why the ordinary position under the rules, that costs follow the event, should not apply.

17 My orders are:

(1) Note the undertaking of the first defendant LLCP Pty Limited contained in the document initialled by me, dated this day and placed with the papers, which I have entitled "Undertaking", which undertaking I note has been conveyed on behalf of the first defendant to the Court by counsel for the plaintiff.

(2) Grant leave to the plaintiff to discontinue the proceedings against the first defendant, without prejudice to the ability of the fifth defendant to seek an apportionment of costs against the first defendant.

(3) Make orders in terms of paragraphs 1-7 inclusive of the document entitled Draft Judgment/Order initialled by me, dated this day and placed with the papers.

(4) Direct that the fifth defendant, if so advised, file and serve any motion by which it seeks an order for the apportionment of costs between the defendants, including the first defendant, by 14 March 2008, the appointment for hearing of such motion to be arranged with my Associate if that leave is availed of.

(5) Grant leave to all parties to apply by arrangement with my Associate on 48 hours notice, in the event of any difficulty arising in the implementation of the foregoing orders, any such notice to specify the relief to be sought.

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