Kenmont Investments Pty Ltd & Delma Plastering Pty Ltd v Residents of Sunstone Gardens
[2010] QCAT 519
•18 October 2010
CITATION:Kenmont Investments Pty Ltd & Delma Plastering Pty Ltd v Residents of Sunstone Gardens [2010] QCAT 519
| PARTIES: | KENMONT INVESTMENTS PTY LTD & DELMA PLASTERING PTY LTD ATF MOSTAR TRUST TRADING AS LIVING GEMS |
| v | |
| RESIDENTS OF SUNSTONE GARDENS |
APPLICATION NUMBER: OCL023-10
| MATTER TYPE: | Other Civil Dispute Matters |
HEARING DATE: 25 August 2010
HEARD AT: Brisbane
| DECISION OF: | Mr K R Geraghty |
DELIVERED ON: 18 October 2010
DELIVERED AT: Brisbane
ORDERS MADE: The applicant’s proposed increase in site rent to $134.00 per week in respect of each of the respondents is confirmed.
| CATCHWORDS : | Manufactured Homes (Residential Parks) Act 2003 - section 69 and 71 – market rent review outside the express terms of the site agreement. |
APPEARANCES and REPRESENTATION:
| APPLICANT: | Mr Vlatko Puljich (the General Manager for the Applicant) |
| RESPONDENT: | Mr Errol Way |
REASONS FOR DECISION
Introduction
The applicants, at all material times have been and are the registered owners of a residential park called “Sunstone Gardens Residential Resort” located at 23 Macadamia Drive, Maleny in the State of Queensland. This park is a residential park as defined in s.12 of the Manufactured Homes (Residential Parks) Act 2003 (“the Act”), and at all material times the applicants are and were the “park owner” of that residential park as defined in s.11 of the Act.
There are 32 respondents as referred to in Annexure “A” to these Reasons. These persons are owners of “manufactured homes” as defined in s.10 of the Act. They are “homeowners” as defined in s.8(1)(a) of the Act. Each of the respondents entered into a site agreement pursuant to Part 5 of the Act with the applicants.
On or about 19 February 2010 the applicants caused to be served on each of the respondents a Notice of Increase in Site Rent based on a review of the site rent payable to market that was conducted outside of the terms of the respondents site agreements and therefore notified pursuant to s.71 of the Act.
The respondents have each provided the applicants with a written response indicating that they do not accept the increase pursuant to s.71(4) of the Act.
Accordingly, pursuant to s.71(7) of the Act, the applicants have applied to the Queensland Civil and Administrative Tribunal for an order that the proposed increase pursuant to s.71(7) of the Act.
Background
At the outset of the hearing, I was informed by both parties that there were no factual disputes and that there was just the one legal issue, namely the proper interpretation of Part 11 of the Act and in particular s.69 and s.71 (to which I shall refer later). In particular, I was informed by Mr Way that he was not pursuing the allegation made in the Response that the increase suggested by the applicant was excessive and accordingly should be set aside or reduced.
I admitted into evidence as exhibit 1 a statement of Mr Vlatko Puljich dated 12 July 2010 with annexures which contained details reasons supporting the increase in site rent to $134.00 per week for each of the respondents. The annexures included a valuation report from qualified valuer, Mr Jamie S. Brown dated 28 October 2009 and a further report of Mr Brown dated 12 July 2010. Mr Brown concludes that the market rent of each site is $134.00.
In the absence of any evidence to the contrary, and in view of the concession made by Mr Way on behalf of the respondents, I do not consider it necessary for me to refer to this issue in any greater detail than I have, and I am satisfied that the proposed increase is not excessive.
The respondents contended however that the Notices by the applicants pursuant to s.71 of the Act were invalid because the applicants should have given the respondents a Notice pursuant to s.69 if they wished to increase the site rent.
At this point I set out the terms of ss. 69 and 71.
Section 69 Notice of Increase in Site Rent
(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.
Section 71 Notice of Proposed Increase in Site Rent
(1) This section applies if--
(a) the park owner for a residential park wishes to increase the site rent payable under a site agreement; and
(b) section 69 does not apply to the proposed increase.
(2) The park owner must give the home owner for the site a notice stating the following--
(a) the amount of the proposed increased site rent;
(b) the basis for the proposed increase;
(c) the day the proposed increased site rent is first payable (the increase day);
(d) the home owner must, within 28 days after receiving the notice, give the park owner a written response indicating whether or not the home owner agrees to the proposed increase.
(3) The increase day must not be earlier than 2 months after the notice is given.
(4) The home owner must within 28 days after receiving the notice give the park owner a written response indicating whether or not the home owner agrees to the proposed increase.
(5) If the response indicates the home owner agrees to the proposed increase, the proposed increased site rent is first payable on the increase day.
(6) If the home owner does not give a written response under subsection (4) within the 28 days, the home owner is taken to have not agreed to the proposed increase.
(7) If the park owner and home owner do not agree on the proposed increase within the 28 days, the park owner may apply to the tribunal for an order about the proposed increase.
(8) In deciding the application, the tribunal may have regard to the matters mentioned in section 70(3).
(9)Also, in deciding the application, the tribunal may make any of the following orders –
(a) an order reducing the amount of the proposed increase by a stated amount;
(b) an order setting aside the proposed increase;
(c) an order confirming the proposed increase on the conditions, if any, the tribunal considers appropriate;
(d)another order the tribunal considers appropriate.
(10) If the tribunal makes an order mentioned in subsection (9)(a) or (c), the order must also state the day from which the increased rent is first payable.
I note that there were a number of different types of site agreements which were entered into at different dates. However, all of those agreements had provisions in them relating to increases in site rent and which stated how the amount of the increase was to be calculated. There were differences between the agreements as to the method of calculating the amount of the increase in site rent and the dates upon which such increases were to be calculated, but both parties agreed that those differences were irrelevant to the issue, a conclusion with which I agree. I only note that the applicant could have given all the respondents a Notice of increase in site rent pursuant to s.69 had the applicant desired to do so.
Submissions
The applicant submitted that the legal issue raised by the respondents had already been decided by the District Court on appeal from the Queensland Commercial and Consumer Tribunal (which has now been absorbed into the Queensland Civil and Administrative Tribunal, in the case of Palmpoint Pty Ltd v The Residents of Bribie Pines Island Village and Others [2007] QDC 130, a decision of His Honour Judge Dearden DCJ. He referred to some subsequent decisions of the Queensland Commercial and Consumer Tribunal and a decision of the Queensland Civil and Administrative Tribunal which he said confirmed the Palmpoint decision. In particular, he referred to Billiet and Others v Gray [2009] CCT MH013-08.
Mr Way in his submission sought to distinguish the Palmpoint case and the other Tribunal cases referred to by the applicants. He said it was not a fair comparison to look at the Palmpoint decision and he stated that that decision referred to site agreements which had no provisions for market rent reviews, or may have antiquated or impractical mechanisms for managing market rent reviews. He also sought to draw comparisons between the percentages of site agreements in the cases cited by Mr Puljich as having market review provisions as compared to the percentage of site agreements which had provision for market reviews in the present case.
Mr Way further submitted that the Act was specific in stating what s.69 and s.71 covers and pointed out that the interpretation put on s.71 in the Palmpoint case meant that the park owner could change the terms of agreement at will and that people entering into the agreement would not know that the park owner could change them.
Findings
As requested by Mr Way (who is not a lawyer) I have examined the Palmpoint case carefully to see if it is applicable to the present case and I have also examined the Tribunal cases referred to by the applicant.
After having made that examination, I have come to the clear conclusion that the Palmpoint decision does decide the issue raised by the respondents and that decision is binding upon me. I do not consider that the decision depends in any way upon the proportions of site agreements which contain market review clauses; His Honour’s reference to antiquated or impractical mechanisms for managing market rent reviews was simply by way of giving an example supporting his conclusion and his decision was not dependent upon any site agreements in fact being antiquated or having impractical mechanisms.
His Honour in paragraph 17 of his decision made a finding that s.69 “provides for park owners who seek to increase the site rent pursuant to a site agreement that contains provisions for increasing the site rent, whereas s.71 is a provision which enables park owners to seek to increase site rent either outside the terms of any such site rent increase provision, but also covers the unlikely event of a park owner seeking to increase site rent either where no written site agreement exists, or where there is a written agreement but it does not contain a site rent increase provision. His Honour had previously in his decision referred to the situation that the Act itself mandated that all site agreements include provisions as to how and when the site rent may be varied, and that therefore it would be absurd to interpret s.71 as only applying to park owners who were in breach of mandatory provisions of the Act in s.25.
I have already made the finding that the proposed increase of site rent to $134.00 per week is not excessive and if it is further necessary to do so, I also find that the increase is fair and equitable. I find that the issuing of the Notices of increase in site rent pursuant to s.71 of the Act which were served on each of the respondents on or about 19 February 2010 are valid. The applicants were entitled pursuant to s.71 to serve those notices.
Accordingly, I order that the applicant’s proposed increase in site rent to $134.00 per week in respect of each of the respondents is confirmed.
The applicants have flagged an intention to seek costs if the decision should be in their favour. Accordingly, I give leave to the applicants to provide to the Tribunal written submissions on costs within fourteen (14) days of notification of this decision; and I give leave to the respondents to provide written submissions to the Tribunal with respect to costs within seven (7) days after delivery to them to the applicant’s written submissions with respect to costs (if any).
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