MADDEN and VILLAGE MANAGEMENT LIMITED - [2005] WASAT 158

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: COMMERCIAL & CIVIL

ACT: RETIREMENT VILLAGES ACT 1992

CITATION: MADDEN and VILLAGE MANAGEMENT LIMITED [2005] WASAT 158

MEMBER: MR M SPILLANE (MEMBER)

HEARD: DETERMINED ON THE PAPERS

DELIVERED : 7 JULY 2005

FILE NO/S: RET 6 of 2004

BETWEEN: JEAN MADDEN
Applicant
AND
VILLAGE MANAGEMENT LIMITED
Respondent

Catchwords:

Retirement village - Residence contract - Alterations to premises

Legislation:

Retirement Villages Act 1992 (WA), s 3(1), s 56(4)
State Administrative Tribunal Act 2004 (WA), s 7, s 11, s 167
State Administrative Tribunal Regulations 2004 (WA), reg 28
Strata Titles Act 1985 (WA), s 7(5)

Result:

Order to specifically perform the service contract

Category: B

Representation:

Counsel:

Applicant: Self-represented
Respondent: Mr Christopher Harrison (as Agent)

Solicitors:

Applicant: N/A
Respondent: N/A

Case(s) referred to in decision(s):

Parker and Timberside Villas Management Pty Ltd, unreported;– Strata Titles Referee; 1 August 2004

Case(s) also cited:

Nil

REASONS FOR DECISION OF THE TRIBUNAL:

Application

This is an application under the Retirement Villages Act 1992 (WA) ("the Act").
In these reasons, unless otherwise specified, all references to sections are references to sections of the Act.

Applicant

The applicant, Jean Madden, is the occupier of Villa 78 of "Parkland Villas ‑ Woodlands ("the Village"), a retirement village situated at 52 ‑ 54 Leige Street, Woodlands.

Respondent

The respondent, Village Management Limited, is the "administering body", as defined in s 3(1) of the Act and the manager of the Village.

Jurisdiction

This application was originally made to the Retirement Villages Dispute Tribunal ("RVD Tribunal"). On 1 January 2005, the State Administrative Tribunal ("the Tribunal") commenced pursuant to s 7 of the State Administrative Tribunal Act 2004 (WA) ("SAT Act"). By virtue of s 167 of the SAT Act, this matter was transferred to the Tribunal and I have been nominated to constitute the Tribunal pursuant to s 11 of the SAT Act.
In accordance with the transitional provisions in reg 28 of the State Administrative Tribunal Regulations 2004 (WA), the matter is taken to have commenced in the Tribunal. The Tribunal may have regard to any record of the former adjudicator.
On 1 November 2004, a hearing occurred before Mr R Kronberger, who was then referee of the RVD Tribunal. The applicant represented herself and the respondent was represented by its manager Mr Christopher Harrison.
Mr Kronberger was not able to complete his determination and publish a decision prior to the cessation of his authority. Since the Tribunal commenced operations, it has had a number of transitional matters, including this, with which it has been required to deal.
The hearing before the former referee was concerned with the substantive application and a transcript of the hearing is among the papers to which I have had regard.

Applicant’s occupancy rights

The applicant’s right to reside in her Villa 78 is based on her ownership of 1 undivided 240^{th "}purple title" share in the whole of the land comprised on the Village, coupled with an exclusive right to occupy Villa 78, pursuant to a residency deed to be referred to below.

The relevant documents

On 16 August 2004, under a covering letter dated 28 July 2004, the applicant provided the Tribunal with copies of the following documents:
(a)"Parkland Villas‑Woodlands Trust Deed" ("the Trust Deed"), undated but with a note at the foot of each page that the form of the document, apparently a "standard" document, was "updated" on 13 October 1999. The parties to the Deed are Parkside Villas Management Pty Ltd (referred to as "Parkland Trustee"), Keith Roddick Bales (referred to as "the Trustee") and the respondent, Village Management Limited (referred to as "the Manager");
(b)"Disclosure Booklet", undated but also noted as having been "updated" on 13 October 1999, as provided to the applicant on 19 November 2000;
(c)"Parkland Villas ‑ Woodlands Residency Deed", ("the Residency Deed") undated and unsigned. The parties are Parkside Villas Management Pty Ltd, the applicant (referred to as "the Resident") and the respondent (referred to as "the Manager"). There is a date, "Nov 19, 1999", pencilled on the cover of the document. At the foot of pages 2 ‑ 12, inclusive, and pages 13 ‑ 41, inclusive, there is notation "updated ‑ 13 October, 1999", but between pages 12 and 13 are inserted pages numbered 12, 22 and 23, each of which has a notation "updated ‑ 10 February 2000".
However, cl 8.10 and cl 9.2, to be referred to below, which appear in both the 1999 and 2000 "versions" of the Residency Deed are in the same respective terms in both "versions";
(d)"Parkland Villas Sale Contract", undated and unsigned, but also noted as having been "updated" on 13 October 1999;
(e)An undated, unsigned "Sale and Relocation Agreement";
(f)An undated, unsigned "Carport Licence"; and
(g)"Special Purpose Financial Statement" for the years ended 30 June 1999 in respect of Parkland Villas – Woodlands Trust.
In her letter of 23 July 2004, the applicant referred to the copies of the Residency Deed and Trust Deed as being "complete and fully executed", when in fact they are not. Despite the lack of executed copies of most of the documents, there has been no dispute between the parties as to the respective terms, nor has there been any question about the presumption that the occupier of Villa 76, adjacent to the applicant’s Villa 78, was bound by documents containing the same covenants.

Relevant clauses

The Trust Deed includes:
1) Clause 3.5(a)
"Powers of Board
The rights and duties of the Advisory Board include the power:
(a)to give directions to the Manager regarding performance of the Manager's duties under this Deed and under the Residency Deed;"
2) Clause 3.6
"Manager to Comply with Directions
The Manager must, subject to cl 8.3, comply with a direction given by the Advisory Board under cl 3.5(a). Any dispute between the Manager and the Advisory Board whether the Manager must comply with a direction, must be promptly referred to the Trustee, whose decision is final subject to the Retirement Villages Act and the powers of the Tribunal."
3) Clause 8.1 (c)
"The Manager must ensure that the Residents comply with the provisions of the Residency Deed and the Carport Licence."
4) Clause 8.3
"Proper Efficient Management
The Manager agrees with the Trustee to use its best endeavours to carry on and conduct its business in a proper and efficient manner, to ensure that the Parkland Villas‑Woodlands Trust is carried on and conducted in a proper and efficient manner."
The Residency Deed includes:-
1) Clause 8.10
"The Resident must not without the consent in writing of the Manager, attach or cause to be attached, any awning or similar attachment to the exterior of the Unit."
2) Clause 9.2
"The Resident may only with the prior written consent of the Manager (consent not to be unreasonably withheld), make any structural alteration or addition to the Unit or interfere with the Fittings."
3) Clause 10.2
"After first obtaining the Resident's consent (which may not be unreasonably withheld) and giving two days prior notice to the Resident, the Manager may at all reasonable times enter the Unit with its employees, agents, contractors and architects and with necessary materials and equipment:
(a)to carry out any works or make any repairs, alterations or additions to the Unit which the Manager considers necessary or desirable.
(b)…
(c)to exercise any other powers and authorities of the Manager under this Deed."
4) Clause 18.8
"The Parkland Trustee and the Manager agree with the Resident that they must each comply with the provisions of the Woodlands Trust Deed which apply to them."

Submissions and evidence

The applicant summarised what she was seeking and her reasons, as follows:
"Clause 18.8 of the Residency Deed requires the Manager to comply with the Trust Deed. The Laserlite awning is unsightly, projects above my patio floor and reduces the value of my villa. The Administering Body persuaded me to accept a compromise. The Administering Body subsequently repudiated the compromise agreement. The Order which I am seeking is an order for specific performance of the Residency Deed which is also a service contract."
The applicant initially made reference to s 7(5) of the Strata Titles Act. That section relates to structural alterations or additions to a lot in a strata scheme. However, as the Village is not strata titled, that reference was not relevant to this application. It was clarified that the applicant's interest in the Village was based on a "purple title" which gave her and each other resident an undivided share in the entire parcel of land upon which the Village is constructed, coupled with a right to occupy her Lot 78 to the exclusion of the other co-owners of the Village land.
The applicant first raised the issue of the Laserlite roofing in a letter dated 28 February 2003, to Anne Egan, the Manager of the Village. The letter stated:
"…When I bought my villa I was firmly told the outside appearance was to stay in unison with the other villa’s appearances.
I came home one afternoon approx 3 weeks ago to see an ugly, tacky glaring metal staring through my window at me. I am NOT HAPPY WITH THIS APPEARANCE FROM MY LOUNGE ROOM, nor did I buy such a view.
When outside and driving toward the village it looks unattractive and, contrary to what I was advised it does NOT CONFORM TO OTHER APPEARANCES OF OTHER VILLAS.
This lowers the valuation of villas. I remind you, I renovated my villa before moving in and I am appalled at the distraction this has. Why was such an eyesore ever agreed too? And as far as I know, no consulting the owners before installing this, especially those residents who would be affect by such a decision…"
There was no response until 7 May 2003 when Ms Egan wrote advising that:
"…I wish to apologise for the delay in responding to your letter dated 28^th February 2003.
The issue raised by you was taken to the executive committee who gave no comment.
For the moment this issue will have to remain unresolved but will be reviewed at a later date.
I am aware that this does not address your complaint. Unfortunately no action will be taken in the short term…"
On 18 December 2003, Ms Egan wrote to Mrs Phyllis Hutchinson, the occupant of Unit 76, in the following terms:
"It is with regret that I must inform you that due to the fact you did not receive written authority to put up your patio sheeting and the complaints received regarding your patio I have no alternative but to request you consider one of the two following options:
1.Remove the sheeting and replace with the colour authorised by this office;
2.Have shade-cloth put over the existing panels.
Could you please notify this office of which of the two options you will be considering."
A copy of that letter was sent to the applicant on the same day.
Mrs Hutchinson’s reply, in a letter dated 31 January 2004, to Mrs Egan included:
"…I would like to explain why I had the shade cloth on my pergola replaced with Laserlite sheeting. My upstairs neighbour, Mrs Jean Madden, has a shelf extending from her balcony. On this shelf are large pots containing plants. These pots are vigorously over-watered on a regular basis. The dirty overflow was running straight down to the area outside my door and on me if I was unfortunate enough to be there at the time. I was continuously cleaning my outdoor setting and courtyard floor as a result. This happened for many months.
I noticed someone working at the complex and asked him to remove the shade cloth and replace it with non-porous sheeting. He recommended this particular colour and type of sheeting as it had been used elsewhere in the complex. I did go to see you, Ann, to ask permission for the roof to be replaced, but unfortunately you were on leave at the time.
It is not metal, as mentioned in Mrs Madden’s letter, but a cream Laserlite sheeting which blends in with the exterior of the complex. It is not visible as one drives towards the complex, as the roof is quite flat. The past months have been much easier, knowing that I can walk outside my door without being showered with dirty water, and that I do not have to clean my outdoor area so often. In response to the request to keep the sheeting clean, the old and sagging shade cloth was trapping leaves and refuse much more than the sheeting does now.
Mrs Madden mentions in her letter the renovations she has done to her unit before she moved in. I am fully aware that she has renovations done because the jackhammer worked regularly for two days while the spa was being installed. The installers came down to inspect my villa during this time as they were concerned about cracks appearing in my walls and ceiling..."
On 11 February 2004, following a meeting between the applicant and Ms Egan and a Mr Phil Thompson "of Fini" (that is, Fini Villages Pty Ltd, a company associated with the Manager), the applicant wrote to Mrs Egan, referring to:
"…the difference in the height of the #76 new pergola roofing, with/to the level of #78 deck is no longer flush. #76 roof is approx twice the height higher that it was in the past. It no longer comes flush with my floor, which leaves quite a large gap between the two.
I would very much appreciate that this gap between #76 new pergola roof be made flush to #78, as it previously was…"
In a letter of 20 February 2004 to "the Village Manager", the applicant referred to the earlier correspondence and the meeting. Her letter included:
"… the appearance of my patio has been detrimentally affected by the unsightly and inappropriate appearance of the awning and I believe that unless matters are remedied, the resale value of my unit will be diminished. If the owner of Villa 76 covers the Laserlite sheeting with green shade cloth, this will partially improve the unsightly appearance of the awning. To fully remedy matters, it will be necessary for the Laserlite sheeting to be lowered so that the top of the awning is approximately flush with the floor of my patio to thereby remove the ugly gap. By way of a compromise I might be prepared to accept green shade cloth being used to cover the Laserlite sheeting subject to the condition that the owner of Villa 76 finds some method of lowering the awning so that the top of her awning is flush with the floor of my patio…"
On 23 March, after further correspondence, Mr Thompson of Fini Villages Pty Ltd, wrote to the applicant, stating:
"…Yesterday the Carpenter contacted our office and recommended the manufacture and fitting of appropriate timber to sit at floor level in-between the timber uprights of the balcony fence.
I understand that you discussed all of the options put forward with this one being your preferred choice.
The cost of this work, including labour, will be approximately $300.00, a cost that neither yourself nor the Village will have to bear.
If you are happy for us to proceed with the recommendations made by the Carpenter please sign below and forward a copy onto our office. Upon receipt we will contact the Carpenter who will in turn liaise directly with you to arrange a date a time for the work to be carried out…"
The applicant altered the last line to read, "I reluctantly compromise for the work to proceed" and signed it on 23 March 2004.
A letter dated 20 April 2004 from Mr Thompson to the applicant included:
"…I understand from those involved that the carpenter attended your villa and carried out the work originally agreed to from your meeting with him however on completion you deemed this to be unsatisfactory. The carpenter contacted me and we discussed further carpentry works, that he had previously suggested to you and that you had agreed that this would be a better solution to that work already completed. The carpenter was authorised to proceed and has now completed the work.
All that remains to be completed is the painting and having spoken to the painting contractor earlier today he informed me that he has arranged with you to attend to this on Wednesday 21 April 2004.
Further to the shade cloth, I have discussed this with the General Manager who is of the opinion that the shade cloth over the existing pergola roof covering is not required and therefore will not be completed.
I have been asked to advise you that if, after the completion of the agreed carpentry and painting work you still remain unsatisfied, you may wish to direct your complaint to the Village Disputes Committee which has been set up to deal with such disputes between Resident…"
During the hearing on 1 November 2004 the correspondence outlined above was referred to and photographs of the issues in question were submitted and discussed.
The applicant confirmed that the dispute was with the management and in particular the decision not to put shade cloth on top of the Laserlite as she believed they had agreed to do.
It was common cause that the respondent had organised work to be carried out to the applicant's patio in order to address the issues raised, however the failure/refusal to put the shade cloth in place brought the parties to this point.
It was also acknowledged by the respondent that the resident who put up the Laserlite did not do the right thing in the first place by not seeking approval.
However it was clear from the evidence that a number of the areas in the complex had similar Laserlite coverings to the one complained of in this case. Mr Harrison who gave evidence on behalf of the respondent stated:
"This pergola existed previously. The pergola had shade cloth over it. The resident changed the shade cloth to Laserlite, which would have been approved under normal circumstances anyway, like has been done elsewhere in the village. Mrs Madden wasn't happy with the outcome. Both the Manager and I tried to deal with it, tried to find some solutions, including organising a carpenter to come and do the work for Mrs Madden, and it hasn't worked out to Mrs Madden's satisfaction."

Consideration

Under Pt 6 headed "Dispute Resolution" the Code of Fair Practice for Retirement Villages 1993 opens by stating:
"It is recognised that in any communal living situation such as a retirement village where facilities are shared, disputes between residents and an administrating body may arise from time to time."
Unfortunately this has happened in this case. I accept that the applicant was unexpectedly confronted by a situation where the outlook from her unit was changed by what she perceived to be an unsightly roof treatment.
At the same time the problem was initially not one of management's making and they did make efforts, which included carrying out work on the applicant's unit, at no cost to the applicant, to address the situation.
However while keeping in mind that the manager must ensure that the residents comply with the provisions of the Residency Deed (Trust Deed cl 8.1(c)) that onus needs to be balanced against cl 8.3 of the Trust Deed which states:
"The Manager agrees with the Trustee to use its best endeavours to carry on and conduct its business in a proper and efficient manner, to ensure that the Parkland Villas – Woodlands Trust is carried on and conducted in a proper and efficient manner."
In the present case the manager was faced with a situation where an elderly resident had something erected without approval in breach of cl 8.10 and cl 9.2 of the Residency Deed, while at the same time recognising that if approval had been sought it would have been given.
The manager, did not stand by and do nothing. Pro‑active moves were made and works undertaken in an effort to address the concerns.
To that extent I am satisfied the manager endeavoured to find a solution, however it was unfortunate the shade cloth was not fitted as had been discussed.

Service contract

An issue which must be considered is whether the "Residency Deed" entered into between the applicant and respondent is in fact a "service contract".
Service contract is defined in s 3(1) of the Act as:
"A contract between an administrating body or former administrating body of a retirement village and a resident for the provision to the resident of:
(a)hostel care;
(b)infirmary care;
(c)medical or nursing services;
(d)meals;
(e)administrative and management services;
(f)maintenance and repair services;
(g)recreation services; or
(h)any other services;
or any collateral agreement or document relating to the provision of any such service."
The applicant claimed that the Residency Deed is a "service contract" which, as defined above, includes a contract between an administrating body and a resident, for the provision of a number of listed services. The list includes administrative and management services and extends to any collateral agreement or document relating to the provision of any such services. In this case there was no evidence that there was any separate service contract and the management provided by the administering body is provided under the terms of the Residency Deed.
This is important because s 56 of the Act under which the order is sought provides that where a dispute arises between the parties to a service contract either party may apply to the Tribunal in relation to the matter.
Section 56(4) states:
"(4) The State Administrative Tribunal may upon application made under this section order ¾
(a)specific performance of the service contract;
(b)the payment of a sum of money,
and make such other orders as the State Administrative Tribunal considers appropriate …"
The relevant document in this case is described on its cover as a Residency Deed.
"Residency Contract" is defined in s 3(1) of the Act as being;
"A contract, agreement, scheme or arrangement which creates or gives rise to a right to occupy residential premises in a retirement village, and may take the form of a lease or license."
The Residency Deed in this case appears in the main to be what is described under s 3(1) of the Act as a residency contract, however it also has elements which come within the definition of service contract. For example cl 18 is headed Management of Operations of the Village which would appear to fall within par (d) of the definition of a service contract. Furthermore cl 6 is headed "Services and Facilities Provided by Management" and cl 6.1 refers to Sch 2 which lists "Standard Services and Facilities".
In a decision delivered 31 August 2004 titled Parker and Timberside Villas Management Pty Ltd, unreported;– Strata Titles Referee; 1 August 2004, the previous Retirement Villages Referee held that because the Residency Deed in that case contained provisions which related to the provision of services rather than the provision of accommodation, it could and should be regarded as a service contract, and, in the context of that application granted orders sought under s 56(4) of the Act.
On the basis of the evidence before me and as the issue was not challenged and there is no separate service contract I find that in this case the Residency Deed is also "a service contract" for the purposes of s 56 of the Act and from here‑on will be referred to as the "Residency Deed/Service Contract".
In the present case, cl 8.10 and cl 9.2 of the Residency Deed/Service Contract outlined earlier, place an onus on a Resident to obtain the written consent of the manager before carrying out work to a unit.
There is also an onus on the manager to ensure that the resident complies with the provisions of the Residency Deed/Service Contract and the manager is obliged to conduct its business of management in a proper and efficient manner. Furthermore, cl 10.2 of the Residency Deed/Service Contract gives the manager the right of entry to a unit to carry out works it considers necessary or desirable.
It should be noted that the patio structure was already in place and no allegation has been made that it was there without approval. What was changed by the resident was the roof covering which was originally shade‑cloth and was replaced by Laserlite.
By letter of 18 December 2003 (the contents of which have been set out earlier) Mrs Egan, the Village Manager wrote to Mrs Henderson the occupant of villa 76 who had erected the Laserlite confirming that one of the two conditions set out in that letter was to be complied with.
The two conditions of which one had to be chosen were:
"1.Remove the sheets and replace with the colour authorised by this office; or
2. Have shade‑cloth put over the existing panels."
It was clear from the evidence that the applicant was aware of that conditional approval. It was the applicant's acceptance and reliance on the manager enforcing one of the conditions set out in the letter of 18 December 2003 that she, in her own words "reluctantly compromised" for the work outlined in the letter of 23 March 2004 from Mr Thompson to proceed. In her evidence the applicant stated that it was a "firm agreement".
In the circumstances it was not unreasonable for the applicant to rely on the manager to ensure that one of the conditions contained in the letter of 18 December 2003 was complied with and that if necessary cl 10.2 of the Residency Deed/Service Contract could be utilised.
It was not until the letter of 20 April 2004, that the applicant was informed that the manager had unilaterally decided not to enforce the conditions.
Based on my findings that the residency deed in the present case also operates as a service contract and that the applicant "reluctantly compromised" based on her legitimate expectation that the manager would in properly performing its management duties under the Residency Deed/Service Contract ensure the enforcement of one of the two conditions referred to. I believe positive orders need to be made.
However, the form of the orders is important. The applicant in her evidence commented that she brought the matter to the Tribunal to get finality. However, to order the removal of the Laserlite would not in my opinion bring finality, as once removed, the owner of Villa 76 could simply seek approval from the manager to re‑erect it and as the respondent clearly stated at the hearing it would have been approved under normal circumstances anyway, like has been done elsewhere in the village.
It is clear that an agreement to finalise the issue had been reached and what brought the parties to this point was the respondent's decision not to ensure that one of the two conditions in the letter of 18 December 2003 was complied with by enforcing the terms of the Residency Deed/Service Contract. This should have been done.
Section 56(4) of the Act states:
"(4)The State Administrative Tribunal may upon application made under this section order ¾
(a)specific performance of the service contract;
(b)…,
and make such other orders as the State Administrative Tribunal considers appropriate …"

Orders

I order that the respondent specifically perform its duties under the Parkland Villas – Woodlands Residency Deed/Service Contract by:
1.ensuring that one of the two conditions set out in its letter to the occupant of Villa 76 dated 18 December 2003, namely, either "remove the sheeting and replace with the colour authorised by this office", or "have shade‑cloth put over the existing panels" are complied with; and
2.as to the colour of either the replacement Laserlite sheeting or the covering shade‑cloth (depending on which option is chosen) the respondent is to seek the direction of the advisory body pursuant to cl 3.5(a) and cl 3.6 of the Trust Deed to ensure that the colour chosen is in keeping with the overall plan for the village.
I certify that this and the preceding [61] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
MR M SPILLANE, MEMBER