Hall v Bremer Waters P/L
[2010] QCAT 22
•19 January 2010
| CITATION: | Hall & Ors v Bremer Waters P/L [2010] QCAT 22 |
PARTIES: Geoffrey Hall and Others
v
Bremer Waters Pty Ltd
APPLICATION NUMBER: MH020-09
MATTER TYPE:
HEARING DATE: Heard on the Papers
HEARD AT: Brisbane
DECISION OF: Ms M Howard
DELIVERED ON: 19 January 2010
DELIVERED AT: Brisbane
ORDERS MADE: As attached
CATCHWORDS: Manufactured Homes (Residential Parks) Act 2003 –s 69 – calculation of variation of site rent – interpretation of site agreement – components ‘y’ and ‘x’ in the rental increase formula
APPEARANCES and REPRESENTATION (if any):
The proceeding was decided on the papers by agreement of both parties
REASONS FOR DECISION
History of Application
The applicants are some of the home owners of Bremer Waters Pty Ltd (Bremer Waters). Bremer Waters provides accommodation for people over 50 which is subject to the Manufactured Homes (Residential Parks) Act 2003 ('the Act').The applicants' claim concerns a notice of increase in site rent dated 22 May 2009 to take effect as of 25 June 2009, which was delivered to residents on 26 May 2009 by the respondent, Bremer Waters.
The application originally sought orders for the increase in site rent to be set aside for non-compliance of the notice with the Act. Later, the applicant also sought to raise issues regarding market rent review: however, the issue of market rent review was struck out by an order of the Consumer and Commercial Tribunal on 9 October, 2009. At the time of this decision, the applicants' sought a determination as to the correct value to be used as 'Y' in the formula prescribed under the site agreement for CPI rent reviews, relevant to calculation of increases in local government charges, and for increased charges calculated accordingly to be backdated to 25 June 2009. Further, an order was sought in essence that Bremer Waters provide details of the calculations regarding any future local government charge increases. The respondent seeks the dismissal of the applicant's claim either because it is premature (as dispute resolution processes under the site agreement had not been exhausted), or alternatively because the site rent increase is calculated in accordance with the site agreement.
The application was filed in the Commercial and Consumer Tribunal on 22 June 2009. The Queensland Civil and Administrative Tribunal Act 2009 (the QCAT Act) section 243 abolished the Commercial and Consumer Tribunal (the former tribunal) effective 1 December 2009. Under the transitional provisions of the QCAT Act, in particular section 271, the Queensland Civil and Administrative Tribunal (QCAT) must deal with the proceeding in accordance with QCAT procedures, but when doing so, has only the functions and powers of the former tribunal. The powers of the former tribunal and QCAT as provided under the legislation discussed below are unchanged.
The Legislation
The Act provides in s 13 that ' A site is land that is available for rent under a site agreement.' Further, s 14 provides that a 'site agreement' is an agreement between a park owner and a home owner that provides, among other things for rental by a home owner of particular land in a 'residential park.' A 'residential park' is defined in section 12. It is an area of land which includes 'sites'; 'common areas'; and 'facilities for the personal comfort, convenience and enjoyment of persons residing in manufactured homes' occupying sites.
Section 69 of the Act relevantly makes provision about site rent increase under a site agreement. It provides as follows:
1) This section applies if a site agreement--
(a) provides for an increase in the site rent payable under the agreement; and
(b) states how the amount of the increase is to be calculated.
(2) If the park owner wishes to increase the site rent under this section, the park owner must give the home owner a notice stating the following--
(a) the amount of the increased site rent;
(b) how the increased site rent has been calculated;
(c) the day the increased site rent is first payable (the increase day);
(d) if the home owner considers the increase is excessive, the home owner may apply to the tribunal, within 28 days after receiving the notice, for an order reducing the amount of, or setting aside, the increase.
(3) The increase day must not be earlier than 28 days after the notice is given.
(4) The increased site rent is payable from the increase day.
Accordingly, the applicants were entitled to bring the application when they did, and did so in compliance with the time frames prescribed by the Act. Accordingly, it was not brought prematurely.When an application is made to the tribunal about site rent increase under section 69, the tribunal may make orders under section 70(2) including, reducing the amount of the increase; setting aside the increase or another order the tribunal considers appropriate. The tribunal may have regard to the matters set out in section 70(3), which include (i) whether the increase is fair and equitable in all the circumstances of the case; and (j) anything else the tribunal considers relevant.
The Evidence
Both parties filed written statements upon which they relied.
Extracts of the site agreement are in evidence. In accordance with sections 10 and ST2 of the site agreement, rental may be increased under a CPI rent review by applying a specified formula namely, R x C + (X/Y) + (Z/Y) in which ' "Y" represents the total number of Sites in the Park' and ' "X" represents the increase in Local Government Charges'. The other components of the formula are not relevant for discussion in relation to this proceeding.
The notice of increase in site rent dated 22 May 2009, advises residents of an increase in site rent in accordance with the CPI of $3.39 per week 'Plus Distributed Local Government Charges per week = $5.43'. On or about 15 September 2009, Bremer Waters advised the applicants' representative that there had been an error in the calculation of local government charges and that an amendment notice would be provided to all residents and refunds made for overcharged amounts. As a result of the amendment the local government charges were to decrease by $0.48 per week. Bremer Waters clarified that the calculations nominate Y as 138. The applicants contend that Y is 184.
It is accepted by both parties that Bremer Waters has approval for 184 sites under its development approval from Ipswich City Council. The respondent's evidence was that only 138 had been developed and were available for rent under a site agreement. The respondent's statement of evidence attaches correspondence dated 16 June 2009 from George England, Secretary of the Home Owners Committee which refers to an increase in the number of occupied sites from the commencement to the conclusion of the rent review period from approximately 92 to 138. The applicants' evidence, through the statement of Mr Geoffrey Hall dated 18 August 2009, was that all 184 sites were available for rent, although his statement is clear that Bremer Waters is still under development. A copy of correspondence attached to his statement, from George England, Secretary of the Home Owners Committee to all residents of Bremer Waters dated 4 June 2009 refers to there being 138 sites occupied at the date of the calculation. In a further statement of 2 October 2009, Mr Hall refers to there being 152 rental agreements disclosed by Bremer Waters in a September 2009 Newsletter, but provides no other evidence regarding the number of sites developed and available for rent at the time of the calculation. Accordingly, on the evidence available, it is common ground and I am satisfied that there were what may be described as 138 occupied sites, but 184 licensed sites at the relevant time. It remains to be considered which of these figures is Y for the purposes of the calculation of the site rent increase.
Copies of the original invoices demonstrating the increase in local government charges have not been provided. However, calculations have been provided by the respondent showing increases in local government charges between 2005-2006 and 2008-2009. These calculations have not been disputed by the applicants. They demonstrate that, of the increase totalling $38, 966.65 for the 08/09 year, that $23200 is for sewerage charges; $9768 for is waste removal wheelie bin charges; total water consumption charges increased by $7810.35 whereas resident's metered water consumption charges increased by $4777.10. General rates increased by $288.40. The calculations demonstrate a steady increase in local government charges since 2005-2006.
Submissions
The applicants submit in essence that since Bremer Waters is a development site, that it is inequitable to expect residents to pay a share of the local government charges for costs to construct new homes. They argue that using 138 as Y, instead of 184, results in an additional surcharge to residents.
The respondent argues that 'available' in section 13 has the Macquarie Dictionary meaning of 'suitable or ready for use'. Accordingly the respondent contends that Y is 138 on the basis that this number represents the actual income-producing sites available for entering into a site agreement. Both parties rely upon Alex Beach Homeowners Committee v W & T Enterprises (Qld) Pty Ltd T/A Alex Beach Top Tourist Park [2005] QCCTMH 8 (16 May 2005) (the Alex Beach Case) to support their arguments. In that matter, the residential park was licensed for 128 sites. The tribunal concerned found that there were 133 sites available for rent in terms of section 13. However, it considered that there had not been more than 128 sites occupied on any night, and that the reasonable intention of the parties in agreeing to the formula in the site agreement was that Council rates and land tax should be apportioned equitably between occupiers of the sites of the park. Further, it considered that the correct number of sites was the number of sites permitted by the Council to be occupied at any one time, namely 128.
Discussion of Submissions and Decision
It is clear that the residential park under consideration in the Alex Beach Case was not a residential park under development, as is the case with Bremer Waters. Rather, the residential park concerned was completed at all relevant times.
The site agreement is clear that Y represents the total number sites in the park. However, under section 13, this can only refer to sites that are available for rent under a site agreement. Any as yet undeveloped sites could not reasonably be considered to be available for rent. Accordingly, Y is 138.
However, an issue arises in the proceeding regarding the figure properly used as 'X' in the calculation of the site rent increase.
It is apparent from the calculations of Bremer Waters that the most significant portion of the increase in local government charges relate to sewerage and waste disposal charges. These are likely to be charges reasonably and properly referable to the occupied sites. Of a total increase in water charges of $ 7810.35, some $3033.25 relates to water charges not metered to individual residents. The applicants suggest that it would be inequitable for them to bear a portion of local government charges associated with the ongoing development of sites. It is reasonable to infer that there are common areas and facilities at Bremer Waters which have un-metered water connections which are provided for the use and enjoyment of persons residing in manufactured homes positioned on sites. However, it is also reasonable to infer some un-metered water usage occurs in the development of new sites.
I consider that it cannot reasonably have been intended by the parties when entering into the site agreement that the home owners from time to time would be responsible for the payment of the local government charges relating to that portion of the park which is under development at the time of calculation of site rent increases for existing residents. Such a result would not be fair and equitable in all the circumstances. In any event, at this time, the undeveloped portion of land at Bremer Waters which does not consist of 'sites' as defined in section 13 of the Act, does not form a part of the 'residential park' as defined in section 12. The 'residential park' includes sites, common areas and facilities for the personal comfort, convenience and enjoyment of persons residing in manufactured homes positioned on sites. Local government charges which are not referable to the 'residential park' as defined, as opposed to the development site, cannot be properly included in 'X' in the calculations. It follows that only the increase in local government charges referable to the 'residential park' as defined, as opposed to the area under development, can properly be included in 'X'. Apportionment may be necessary regarding water use, sewerage charges, rates and other components of the local government charges. A similar view was taken in the decision in Lucadou-Wells v Emmetlow Pty Ltd Trading as 'Colonial Village' [2009] QCCTMH (6 May 2009) in which the tribunal considered that a motel and motel restaurant located on the relevant premises were not facilities for the comfort, convenience or enjoyment of the residents, and were instead commercial enterprises of the park owners. In that case, the tribunal observed that:
28. With respect to expression “the local authority charges applicable to the park” as designated by the letter “x” in the formula, it is necessary the local authority charges be apportioned between those charges that are applicable to the park and those that are not. The apportionment may have to be made with respect to water use, sewerage use, rates, pedestal use and other local charges.
Having reached this conclusion, it follows that I make orders to the effect that Y is 138 in the calculation. However, the figure used as the increase in local government charges in X must be incorrect as it represents the total increase in local government charges for the area of land which includes not only the 'residential park' as defined, but the development site. Accordingly, the site rent increase has been incorrectly calculated. I will make orders for its recalculation using the formula in the site agreement, and for refunds to be made to the applicants of any overpayments that have occurred.
Orders
That the site rent calculation notified on 26 May 2009 be set aside.
That Bremer Waters Pty Ltd recalculate the site rent to be applied from 25 June 2009 using the formula in the site agreement; in particular X shall be the amount of the increase in local government charges referable to the residential park, but excluding those referable to the development site.
That Bremer Waters Pty Ltd provide the applicants with a copy of the calculations undertaken in accordance with order 2 within 28 days of this order.
Bremer Waters Pty Ltd shall refund the applicants any overpayment of the site rent as a result of the recalculation in accordance with Order 2 within 42 days of this order.
That Bremer Waters Pty Ltd provide to residents with notification of future CPI rent increases a copy of the detailed calculations undertaken to calculate the increase.
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