Jenkins v Barrack Point Holdings Pty Ltd

[2021] NSWCATCD 72

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Jenkins v Barrack Point Holdings Pty Ltd [2021] NSWCATCD 72

Hearing dates:

19 November 2020; 4 May 2021

Date of orders:

02 June 2021

Decision date:

02 June 2021

Jurisdiction:

Consumer and Commercial Division

Before:

G Bassett, General Member

Decision:

1 The respondent, Barrack Point Holdings Pty Ltd, is to pay the applicant, Lee Jenkins, the sum of $2,845.80 immediately.

Catchwords:

RESIDENTIAL COMMUNITIES — Interference with right to sell home — Compensation — Sub-letting residential site

Legislation Cited:

Residential (Land Lease) Communities Act 2013 (NSW)

Probate and Administration Act 1898 (NSW)

Cases Cited:

Nil

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Lee Jenkins (Applicant)
Barrack Point Holdings Pty Ltd (Respondent)

Representation:

Solicitor:
Lough & Wells Lawyers (Applicant)

File Number(s):

RC 20/30192

Publication restriction:

Nil

REASONS FOR DECISION

Application and procedural history

1. By the time of the hearing this matter had been reduced to a claim by the applicant, Mr Jenkins, for compensation due to alleged interference by the community operator in the sale of a resident’s home, being that of his father. A claim by the community operator and this cross-claim had been part-heard at hearing on 19 November 2020. After that part-heard hearing the community operator withdrew its claim (RC 20/22889).

2. At the end of the hearing on 19 November 2020 the cross-examination of Mr Jenkins was still on foot. That cross-examination was continued on 4 May 2021, though limited to the cross-claim for compensation. In addition, evidence from a person who gave an expert report on property valuation was taken and tested under cross-examination. That evidence related to letting value of the residential premises. In addition to the written submissions and other documentary evidence of the parties, at the final hearing on 4 May 2021 oral submissions were taken from each of the representatives as to the orders sought.

3. In the closing submissions of Mr Jenkins’ legal representative, Mr Frater, the relief sought did not turn on any diminution in value of the sale price of the home due to alleged interference with the sale.

Evidence of the party’s in relation to compensation

4. Documentary evidence of the parties and submission included:

1. Affidavit and annexures of Lee Jenkins sworn 13 July 2020

2. Affidavit of Timothy Frater, solicitor for Mr Jenkins sworn 18 November 2020

3. Affidavit of agent sworn 27 October 2020

4. Community operator’s written submission lodged 18 November 2020

5. list of Community operator’s exhibits – listed Exhibits A to N and lodged 11 June 2020

6. modified community operator’s exhibits – listed Exhibit A to R and lodged 18 November 2020.

Interference with sale

5. Mr Jenkins was executor of his father’s estate. Under section 104 of the Residential (Land Lease) Communities Act 2013 (NSW) he said he was a home owner as the definition of a home owner includes an executor, administrator or beneficiary of the estate of a deceased home owner. Mr Jenkins’s father, Mr Alvis Jenkins (“Alvis”), was a community resident. He died between 7 and 16 March 2019. Mr Jenkins, who was unknown to the community operator prior to his father’s death, provided a copy of the will of Alvis. Clause 2 shows he was executor and sole beneficiary of his father’s estate.

6. The central point of contention between the parties was whether Mr Jenkins could act on the property prior to the grant of probate for his father’s estate. Mr Jenkins sought to deal with the property in his capacity as executor and sole beneficiary. Mr Jenkins swore in his affidavit that on, or about 20 March 2019 he met with a manager of the park and showed a certified copy of the will. He was told by that manager that he needed probate before he could sell the property. Mr Jenkins said he told that manager that he had been advised by his solicitor he did not need probate to act on a sale of the property. The manager of the community confirmed in an email exchange of 14 April 2019 that Mr Jenkins could not sell absent probate grant. After that point a stand-off ensued. Due to costs, Mr Jenkins set about applying for probate himself but was not successful in doing so. On 4 August 2019 probate was granted after Mr Jenkins engaged a solicitor.

Sub-letting

7. In early November Mr Jenkins contacted the manager by phone and asked to sub-let the property. Mr Jenkins said his father-in law was the only person to put in a request to sub-let the premises. On 12 November 2019 the community operator stated he would not allow sub-letting until all outstanding site fees were paid. In January and February 2021 there were various communications between Mr Jenkins’s solicitor and the operator asking for site fees to be discontinued and for the home to be sold. The operator indicated it would seek termination of the site agreement given the site fee arrears. From that point the parties resorted to relief through applications to the Tribunal. Mr Jenkins gave oral evidence that when the home was eventually sold he lost a significant percentage of the sale price due to site fees. Mr Jenkins said it took between 3 to 6 months to sell the property from the time he acquired probate. Neither party gave evidence of the actual sale date of the home. On 26 May 2021, the Tribunal asked the parties to provide this date. As it eventuated, that date was not essential in coming to this decision.

The loss evidence

8. To support the loss claim for inability to sub-let, Mr Jenkins relied on a report from a person opining as to market rent in the area for two similar properties (Affidavit of agent). The Tribunal does not give significant weight to this report. In cross-examination the reporter admitted she was not a licensed valuer. Though the report purported to be given under the Tribunal’s guidelines for expert reports, the reporter was the agent who sold the home for Mr Jenkins. She did not give the report at arm’s length but as a person in a commercial relationship with the party in whose benefit the report was being given. The report was only prepared as a document in that commercial relationship as a commercial advice. It was not a sworn valuation given in the role of an expert assisting the Tribunal. The Tribunal finds that a more adequate measure of loss, if any loss arose, was related to the site fees incurred by Mr Jenkins due to the delay of his sale of the home because of the park operator’s insistence on probate being obtained.

9. Section 45 of the Act allows an application to the Tribunal to settle a dispute where consent to sub-letting was unreasonably withheld or refused. In his closing submission the legal representative for Mr Jenkins merged the claim for unreasonable withholding of consent to sub-let with the loss claimed for orders due to interference with the sale. In the order for compensation sought, Mr Frater submitted that Mr Jenkins should be put back in the position he would have been but for the interference with the sale. He did not claim that Mr Jenkins should be put back in the position he would have been but for an alleged unreasonable consent to sub-letting. Mr Frater said relief ought to be an abatement of site fees from 16 March 2019 (or 25 March 2019 as stated in oral closing submissions) when probate was unreasonably first demanded to the date of the order (or the date of sale as stated in oral closing submissions) or 12 months market rental at the amount of market rent as stated in the expert report of the agent, in the sum of $11,166.81. As indicated above the Tribunal has found that site fees are a more applicable measure of loss.

The law in relation to the application

10. Under section 115(1)(d) of the Act a home owner such as the applicant may apply to the Tribunal for the resolution of a dispute concerning the sale of a home with respect to interference by the community operator with the sale of the home.

11. When there has been interference by the operator with the sale, whether by action or inaction, section 115(2)(f) of the Act states the Tribunal may make an order for compensation. Under section 115(2)(g) the Tribunal may also make any ancillary order that the Tribunal, in the circumstances, thinks appropriate.

12. The Residential (Land Lease) Communities Act2013 (NSW) sets out the legislation with respect of sale of a home as follows:

107   Interference with right to sell home

(1)  The operator of a community must not cause or permit any interference with, or any attempt to interfere with—

(a)  a home owner’s right to sell a home, or

(b)  a home owner’s right to display a “for sale” sign in or on a home.

Maximum penalty—100 penalty units.

(2)  Without limiting subsection (1)—

(a)  interference with a home owner’s right includes hindering the exercise of the right, and

(b)  interference with a home owner’s right to sell a home includes unreasonably restricting prospective home owners from inspecting the home or any common area of the community, and

(c)  interference includes making false or misleading statements about the community that affect or may affect either right, and

(d)  interference includes taking any action to require the home owner to comply with any requirement made by or under the Local Government Act 1993 after becoming aware that the home owner is seeking to sell his or her home (unless the matter has been the subject of previous action).

(3)  An operator does not interfere with the right to sell the home if the operator declines to enter into a site agreement with a prospective home owner and does so on reasonable grounds.

(4)  Without limiting subsection (3), reasonable grounds can be established on—

(a)  the basis of unfavourable information about the prospective home owner contained in a residential tenancy database referred to in the Residential Tenancies Act 2010, other than a database referred to in section 210 of that Act, or

(b)  the basis that the prospective home owner has been evicted from the community or another community within the past 5 years for a breach of a site agreement by the prospective home owner.

Issues for determination

13. In this case an issue for determination is whether the community operator has unreasonably interfered with the right to sell the home. It was not disputed that the community operator would not allow sale until Mr Jenkins could show probate. It follows that the main issue is whether this interference based on grant of probate was lawful within the confines of the Act, and, if so, whether it was reasonable.

14. The second issue arises if interference is found. What is the measure of Mr Jenkins loss, if any? Mr Jenkins abandoned any claim for diminution in the value of the home due to the delayed sale while he obtained probate.

Findings and determination

15. The Tribunal finds that the community operator prevented the applicant from placing the home for sale until probate was obtained. The community operator submitted that it could not allow sale as before “… the Grant of Probate, the Home and Site Agreement was deemed vested in the Public Trustee by operation of section 61 of the Probate and Administration Act”. Section 61 states:

PROBATE AND ADMINISTRATION ACT 1898 - SECT 61

Property of deceased to vest in NSW Trustee

61 Property of deceased to vest in NSW Trustee

From and after the decease of any person dying testate or intestate, and until probate, or administration, or an order to collect is granted in respect of the deceased person's estate, the real and personal estate of such deceased person shall be deemed to be vested in the NSW Trustee in the same manner and to the same extent as foretime the personal estate and effects vested in the Ordinary in England.

16. The claim of the community operator that the applicant needed probate first constitutes an interference with sale. There was no dispute that Mr Jenkins showed the operator a copy of will which identified him as executor of his father’s estate. Consequently, the park operator had no reasonable ground to assume it was an intestate estate under section 61. The Residential (Land Lease) Communities Act 2013 (NSW) specifically excludes any reference to the need for probate in its definition of a home owner at section 104 which states a home owner includes an executor [my emphasis], administrator or beneficiary of the estate of a deceased home owner. Nor is the community operator in the business of giving legal advice. Section 107 of the Act makes no mention whatsoever of the community operator providing legal advice to a potential vendor prior to not interfering with sale. Furthermore, Mr Jenkins requirement for probate would relate to a dealing on property in his capacity as executor such as transfer of the title of the home or registration of a mortgage on the home. These are registrable property interests. They are not something in which the community operator plays any part with regard to the sale of the home. If Mr Jenkins had no probate by the time he accepted an offer made by a prospective purchaser, his ability to deliver title on the sale would be between him and the purchaser, not the community operator. Under the Act the role of the community operator is not to interfere in activities such as advertising premises, putting up a sale sign, not restricting potential purchasers from inspecting the home or common areas of the community, providing copies of community rules to potential purchasers and negotiating any site agreement if necessary with a potential purchaser. None of these roles is a registrable dealing on property which would have required Mr Jenkins to have had probate. They are obligations under the Act with which a community operator is not to unreasonably interfere when a home is being sold.

17. There was unreasonable interference. What was the loss?

18. The operator indicated that it spent $3,000.00 to assist Mr Jenkins have the home cleaned up after the death of Elvis. The Tribunal does not accept that any serious application was made for sub-letting even by Mr Jenkins’s father-in-law. That request to sub-let did not occur until well after Mr Jenkins had probate. As the place was being sold it is more probable the not that it should be sold with vacant possession.

19. The question to consider is what would have happened if Mr Jenkins had not been deterred from sale by the demand for probate when he met with the manager on, or about 20 March 2019. The home would have been advertised. Prospective purchaser’s would have looked at it and community facilities. Mr Jenkins would have applied for probate. He may have had problems obtaining it and have had to get his solicitor to apply on his behalf. Mr Jenkins says the home took 3 to 6 months to sell once probate was granted. The delay caused was the delay from 20 March until Mr Jenkins obtained probate on 4 August 2019. He later had to pay site fees from sale funds. The fees would not have been payable for this period of delay. From March 2019 Mr Jenkins would have wanted to sell the home with vacant possession so there would have been no issue of sub-letting. Site fees would have been payable but the delay in the sale process caused site fees to be incurred in this period. Site fees during the period were $147.20 per week. Probate was granted on 4 August 2019. Consequently, site fees paid between 21 March 2019 and 3 August 2019 ought to be refunded. That is a period of 140 days at a daily rate of 21.08, being a sum of $2,845.80.

Order

20. The respondent, Barrack Point Holdings Pty Ltd, is to pay the applicant, Lee Jenkins, the sum of $2,845.80 immediately.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 03 September 2021