Miller v Regal Waters Retirement Community Pty Ltd t/as Regal Waters
[2014] QCAT 22
•13 January 2014
| CITATION: | Miller v Regal Waters Retirement Community Pty Ltd t/as Regal Waters [2014] QCAT 22 |
| PARTIES: | Paul Miller (Applicant) |
| v | |
| Regal Waters Retirement Community Pty Ltd t/as Regal Waters (Resondent) |
| APPLICATION NUMBER: | OCL080-12 |
| MATTER TYPE: | Other civil dispute matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Member Ryan |
| DELIVERED ON: | 13 January 2014 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. That the Applicant be granted an extension of time to 17 July 2012 in which to file the Application initiating this proceeding. 2. That the site rent increase sought by the Respondent to commence on 1 July 2011 under clause 3 of the site rent agreement is to commence on that date and is to apply to the site rent increase made in accordance with the order of this Tribunal made on 12 December 2012. 3. That the site rent increase sought by the Respondent to commence on 1 July 2012 under clause 3 of the site rent agreement is to commence on that date and is to apply to the site rent increase made in accordance with the order of this Tribunal made on 12 December 2012. |
| CATCHWORDS: | Manufactured Homes – Site rent increase under site agreement – increase for CPI once per year – whether CPI increase applicable to a back dated s 71 increase – notice under s 69 – application out of time – whether extension of time should be granted - amount involved not significant Manufactured Homes (Residential Parks) Act 2003 ss 19, 24, 69, 70, and 71 Martin v Gosdschan [2011] QCATA 71 |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act).
REASONS FOR DECISION
Background to the Application
The applicant, Mr Miller, together with his wife, is a resident of Regal Waters, a relocatable home park at Bethania.
Mr Miller's Residence Agreement (site agreement) with Regal Waters Retirement Community Pty Ltd (Regal Waters), the respondent, provided that on 1 July each year ‘the rental shall be varied and shall be increased by..’ the CPI as described in the clause. Regal Waters purported to give written notice of a CPI increase under s 69 of the Manufactured Homes (Residential Parks) Act 2003 (the Act) to Mr Miller and other residents on 31 May 2011 (with respect to a CPI increase to commence on 1 July 2011) and on 31 May 2012 (with respect to a CPI increase to commence on 1 July 2012).
Prior to the issuing of these notices, on 27 April 2011, Regal Waters had given notice of a proposed increase under s 71 of the Act to Mr Miller and the other residents. That increase was to take effect from 1 July 2011, and was based on increased operational costs.
The s 71 increase was not accepted by Mr Miller and a minority of other residents. Regal Waters sought approval for the increase by making an application to the Queensland Civil and Administrative Tribunal (the Tribunal) under s 71(1)(c)(i) of the Act. The application was successful, the Tribunal finding on 12 December 2012 the increase sought was justified, and dismissing a counter application by Mr Miller and other residents for a reduction in rent.
Before the application in respect of the s 71 notice was decided, Mr Miller had lodged this application in his name alone in on 17 July 2012. After the Tribunal decided the s 71 notice matter, Mr Miller and his wife alone amongst the residents applied to appeal or seek leave to appeal that decision. At a compulsory conference on 25 January 2013 in the current matter, the Tribunal directed that a directions hearing be listed after the decision on Mr Miller’s application for leave to appeal had been made. On 31 May 2013, a Tribunal Judicial Member, Hon J Cullinane AM QC, decided the matter and refused leave to appeal. At the subsequent directions hearing, the Tribunal directed the parties to exchange written submissions on a timetable for a determination of the application on the papers.
Grounds of the application and Applicant's submissions:
Mr Miller’s main contentions were set out in his submissions in reply to the respondent's submissions, and can be summarised as follows:
· Notice provided to Mr Miller did not comply with s 69(2) of the Act because the amount and timing of any increase was dependant on the outcome of the s 71 application to the Tribunal and was therefore not specified in the notice.
· As it took longer than 28 days from the date of the s 69 notice (31 May 2012) to determine the actual amount of the increase, Mr Miller had no opportunity to object to the s69 notice. Notice with respect to s 69 was in effect no notice with respect to a CPI increase on the s 71 rental increase, as it did not meet the requirements of s 69. The notice was effectively no notice and Mr Miller was materially prejudiced by being denied the opportunity to seek the Tribunal's intervention under s 69(4) and s 70 of the Act.
· The notice provided to Mr Miller did not comply with s 69(3) or (4) because the ‘increase day’ (the day on which the increase is to commence) cannot be earlier than 28 days after the provision of the notice.
· Section 69(1)(b) required that a site rent increase was supported by a provision in the site rent agreement of a method for calculating the increase. The only method in the site rent agreement was a narrow one, occurring on 1 July of a year and applying only to the rent as at 30 June of that year. Having made that increase at that time, to change it after the Tribunal decision on the s 71 increase was to make a second increase in the year.
· Mr Miller did not understand from the s 69 notices provided to him that it was the intention of Regal Waters to apply a back dated CPI increase to the s 71 increase.
· Mr Miller may also contend, although it was unclear, that there can only be one of either a s 71 increase or an increase under the site agreement in any year, although he expressly accepts the validity of the s 71 increase for 2011 and 2012 as ordered by the Tribunal, and also accepts the validity of the CPI increase for those years, albeit applied only to the original site rental amount.
· Mr Miller appeared also to challenge the s 69 notice of 2011 on the same basis.
Respondent's submissions:
Regal Waters' submissions can be summarised as follows:
· The application is out of time. The application disputing the 2012 s 69 rent increase was filed on 17 July 2012, and was therefore out of time, by over two weeks. To the extent that Mr Miller appears to also be challenging the 2011 notice, the application was manifestly out of time, well over twelve months having elapsed since the notice period had expired. Consequently an application under s 70 was statute barred with respect to both notices.
· Mr Miller had adequate notice and explanation of the impact of a s 71 rent increase on the s 69 rent increase. He had been advised on four occasions in writing of the interaction between the two. These communications explained that should the s 71 notice be confirmed by the Tribunal, the rate increase pursuant to that notice would apply from 1 July 2011 and 1 July 2012 respectively, and the CPI increase would be levied on that higher amount. The actual payments were applicable in the event that the s 71 increase was allowed to stand were set out in the accompanying letter.
· The dispute was initiated by one home owner from a park comprising 202 sites.
· The proceeding was effectively concerning an amount of 5c per week or $2.60 per year (taking into account rent assistance).
· Regal Waters has applied the s 71 increase and adjusted the two s 69 notices in a way which is a necessary consequence and proper application of the Tribunal decision and which is consistent with previous Tribunal decisions.
Consideration
Should the Tribunal consider Mr Miller’s application?
The first issue for the Tribunal to consider is whether the application is indeed statute barred as argued by Regal Waters. Mr Miller disputes the s 69 notices, saying they were no notice. He does not dispute that notice purporting to set out the s 69 requirements has been provided to him. For the Tribunal to consider the matters raised by Mr Miller, an extension of time is required, as the application has not been filed within a required 28 day period described in s 70(2) of the Act on either party's view.
The Tribunal can extend the time for lodgement of an application in certain circumstances. S 61 of the QCAT Act provides the Tribunal may make an order extending a time limit for the start of a proceeding if to do so would not cause prejudice or detriment, not able to be remedied by an appropriate order for costs or damages, to a party or potential party to a proceeding.
S 61(4) provides the Tribunal may initiate an extension of time. Justice Wilson, the immediate past President of the Tribunal, has made it clear that the Tribunal must focus on issues of fairness and justice in considering this issue.[1] The factors to be taken into account when considering whether to grant an extension of time have been canvassed in previous Tribunal decisions [2] and may be summarised as follows:
· is there an acceptable explanation for the delay and length of delay, including any action by Mr Miller to notify his intention to apply;
· prejudice to other parties;
· strength of Mr Miller’s case;
· whether it is in the interests of justice to grant an extension.
[1]Martin v Gosdschan [2011] QCATA 71.
[2]Hunter Valley Developments Pty Ltd v The Honourable Barry Cohen, Minister for Home Affairs (1984) 3 FLR 344, Cavalier Homes Brisbane Pty Ltd v Queensland Building Services Authority [2012] QCAT 6, Crime and Misconduct Commission v Chapman and Anor [2011] QCAT 229.
Mr Miller submits that the increase referred to in the letters accompanying the s 71 notice and each of the s 69 notices was ‘purely speculative’ because the s 71 increase was not finalised, and the 28 day period in which to challenge a s 69 notice could not therefore have commenced at the date of the notices.
Mr Miller does not concede delay, arguing there was no notice at all. Neither does he explain the eventual timing of his application, 17 July 2012 when, in his own terms, the increase was still ‘speculative’ as the s 71 issue had not been decided by the Tribunal. The delay was, with respect to the 2012 notice short, but with respect to the 2011 notice, protracted. Regal Waters opposes the granting of leave to file the application largely on the basis of the ‘insignificant’ monetary amount involved and delay. It has not pointed to any particular prejudice suffered as a result of the delay.
The objects of the QCAT Act in s 3 include that matters are dealt with by the Tribunal in a way that is accessible, fair, just, economical, informal and quick. S 28(3) requires that in conducting a proceeding, the Tribunal must observe the rules of natural justice, is not bound by the rules of evidence, may inform itself in any way it sees as appropriate, and must act with as little formality and technicality as the legislation and a proper consideration of the issues before the Tribunal permit.
Mr Miller foreshadowed his challenge to the 2012 s 69 notice in a letter to Regal Waters dated 30 June 2012, a copy of which is attached to his application, and the application was filed just over two weeks later. In these circumstances, whilst acknowledging the small monetary consequences, the Tribunal considers that to refuse an extension of time would be unreasonable, and that it is in the interests of justice to do so. The Tribunal extends the time for the filing of the application to the date of filing, 17 July 2012. Whilst the Tribunal accepts that the delay with respect to the 2011 notice is protracted, it is also satisfied that an extension of time should be provided to allow it to also consider the 2011 increase under the site agreement, as the issues are essentially the same.
Both parties have made submissions on the substantive issues of the application and the Tribunal is satisfied no further evidence is required for it to be able to decide on the application.
The requirements of s 69
S 68 of the Act provides that site rent may only be varied by the ways set out in the Act, an increase as provided for in a site agreement (s 69) and an increase not provided for in the site agreement (s 71). An application may be made to this Tribunal for an order under s 70 by the home owner with respect to a s 69 or by the park owner under s 71(8) with respect to a s 71 increase.
For an increase under the site agreement, s 69(2) provides a park owner must give the home owner a notice stating the amount of the increased site rent, how it has been calculated, and the day it will be first payable (the increase day, which cannot be earlier than 28 days after the notice is given). The park owner must also inform the home owner that if he or she considers the increase is excessive, the home owner may apply to the Tribunal, within 28 days after receiving the notice, for an order about the increase: s 69(3).
The District Court[3] considered the issue of the interaction of s 69, the structurally similar predecessor to the current s 71 and site agreements, in dealing with an argument that a s 71 increase could not be claimed if an increase falling within s 69 was capable of being made. Dearden DCJ found that both types of increases were eligible to be made under the Act, it was not a case of either/or, and he said there was not ‘...any ambiguity in the structure or wording of the legislation’. The Tribunal follows this decision, and is also guided by general principles of statutory interpretation (canvassed in a recent decision of the Tribunal[4] on s 69(2)(b)), in interpreting the section according to its ordinary meaning in its context.
[3]Palmpoint Pty Ltd v The Residents of Bribie Pines Island Village & Ors [2007] QDC 130 (10 May 2007) at [13].
[4] Forsyth & Ors v Haraba Pty Ltd t/a Brisbane Gateway Resort [2013] QCAT 375.
The Notices to the Applicant
Mr Miller did not dispute that he had received letters and notices relating to the increase under the site agreement, but contended that those notices did not comply with s 69 and were ineffective in one aspect, the application of the CPI site rent increase to the s 71 site rent increase.
Regal Waters contends that there were four communications to Mr Miller (Annexures A to D to the respondent's summary of submissions) which contained detailed explanations of the intention of Regal Waters to backdate CPI increases under the site agreement once the s 71 notice issue was determined.
The Tribunal does not accept the construction of s69 Mr Miller urges upon it. The letter of 16 March 2011 (Annexure A to the respondents submissions) related to the s 71 increase. It gave information in advance of the s 71 notice, setting out the proposed increase of $3.90 per week for Mr and Mrs Miller, and including information about a proposed CPI increase. Copies of relevant provisions of the Act were apparently enclosed and it was noted that a copy of the Act had been placed in the library. Regal Waters set out the difference between the two forms of site rent increases and stated specifically: ‘The CPI increase from 1 July 2011 will be based on the current site rent plus the $3.90 for significant operational costs as mentioned above’. It gave information about the potential for an increase in rent assistance, and to refer to plans for a meeting with home owners in May 2011.
The second letter, dated 27 April 2011, which accompanied the s 71 notice, showed the impact of increased rent assistance from pension providers would reduce the net effect of the s 71 increase from $3.90 to $1.00 and again noted that the s 69 CPI increase would also take effect from 1 July 2011. Mr Miller has provided a copy of a letter he wrote to Regal Waters on 9 May 2011 seeking clarification after receiving notice of the s 71 increase. In that letter, after acknowledging the $3.90 increase proposed, he asks: ‘Could you please advise how much in total will be the increase per fortnight including the $3.90...’. The letter contains hand written notes signed by M Arnold, who is the community manager dated 9 June, showing the application of the CPI to the s 71 increased amount.
Each s 69 notice provided to Mr Miller provided information of a CPI increase based on the site rent excluding the s 71 increase, and each notice was accompanied by a letter which set out in some detail an explanation of the use of this figure, and the fact that, in the event that the Tribunal application with respect to s 71 was successful, the site rent agreement CPI increase would be applied to the increased amount. A calculation of the CPI applied to the increased amount was included. It showed that, for 2011, the CPI increase without the s 71 increase raised the site rent to $130.15, and with the s 71 increase to $134.20. The CPI multiplier for the period was 1.036. Similar information was provided with the 2012 s 69 notice, showing the increase for 2012 based on the s 71 increase together with the s 69 CPI multiplier of 1.013 resulted in and amount of $135.95. This represented the application of the CPI once for the year to the site rent. The letters indicated that these amounts would be payable back to 1 July of the relevant year (the increase day required by s 69(2)(c)). This day was not earlier than 28 days after the date of the respective notices, 31 May 2011 and 31 May 2012.
A number of previous decisions on s 69 by the Commercial and Consumer Tribunal (the CCT), subsequently subsumed by this Tribunal, were considered in a recent Tribunal decision[5] on the degree of detail required to satisfy s 69(2)(b) of the Act, and the learned Member concluded that despite some changes to the Act since, those decisions remained relevant to a current consideration of the section. A CCT decision[6], (which related to a site agreement increase on market rent rather than a CPI increase), was cited in which the learned Member said:
...the Act does not require disclosure in the notice of any mathematical formula or breakdown of figures. In my opinion section 69 must be read in its entirety. Section 69(1)(b) states that the section applies if a site agreement states 'how the amount of the increase is to be calculated.' Section 69(2)(b) then provides that the notice must state 'how the increased site rent has been calculated'. In my opinion the notice will satisfy the provision in section 69(2)(b) if it states that the increase has been calculated in accordance with the identified provisions in the site agreement as to how the increase is to be calculated. I do not think anything more is required.
[5]Forsyth & Ors v Haraba Pty Ltd t/as Brisbane Gateway Resort [2013] QCAT 275.
[6]The Residents of Gateway Village Resort v Haraba Pty Ltd ATF the Haraba Trust t/as Gateway Village Resort [2005] CCT MH006-04 at [38].
In any event, the terms of the Act undermine a narrow construction. The Act provides wide powers to the Tribunal in s 70 in considering increases under s 69, including under s 70(2)(d), that it may make an order it considers appropriate. The Act also gives the Tribunal the option of taking into account certain listed matters under s 70(3), whilst providing under s 70(3)(l) it may take into account anything else it considers relevant.
The Tribunal finds that taken together, the letters and the notices provided Mr Miller with ample information about the intentions of Regal Waters with respect to back dating the CPI increase once the s 71 question was decided by the Tribunal, and that he in fact had that information. He was advised of the method of calculation and the exact amount payable in the event that the Tribunal ‘confirmed’ the s 71 increase. The contingency arose from the exercise of parties rights under the Act to challenge a site rent increase, and was within narrow parameters. It did not demonstrate a cavalier or pernicious approach to the duty of Regal Waters to inform the residents of its intentions. The Tribunal does not accept that the information provided was unduly complex. In fact, significant effort had been made to concisely explain relevant aspects of the proposed increases, and their impact on Mr Miller. The Tribunal is satisfied that the notice and the substantial collateral information satisfied the requirements of s 69(2).
‘Site rent’, the site agreement and ‘retrospectivity’
Mr Miller contends that the site agreement provides a method for calculating a CPI increase in site rent once per year, based on the amount at 30 June of that year. By implication it seems he contends that backdating of the s 71 increase to 1 July 2011 excluded it from being included in the CPI site rent increase for 2011 because it was the site rent at 30 June 2011 which was the relevant figure for the increase under the site agreement. In fact, 30 June is nominated in the site agreement as the date in the first year, 2005, but thereafter Clause 3 does not specify a date: ‘On 1 July 2005 and annually on 1 July in each year thereafter, the rental shall be varied and shall be increased by the same percentage increase as the all groups consumer price index....’.
He also contends that the term ‘site rent as at 30 June of the year in which a CPI increase is sought’ excludes a capacity to include any retrospective CPI increase. The term ‘site rent’ is not defined according to its context but is used interchangeably in the Act and in the site agreement. The Act uses the same term under Part 11, Division 2 which contains ss 69 and 70 and is headed ‘Increase in site rent provided for in site agreement’, and in Division 3, containing s 71, and headed ‘Other way of increasing site rent’. The Tribunal finds the term ‘site rent’ includes site rent no matter how it is calculated.
The necessary conclusion is that a CPI increase provided for in Clause 3 of the site agreement is to apply to ‘site rent’ however it is arrived at. There is no basis for excluding from ‘site rent’ which is amenable to an increase for CPI under s 69, an increase made pursuant to s 71. Neither can the Tribunal see any logical or legislative basis for Mr Miller’s acceptance that one can be backdated to the ‘increase day’ set out in the notice, whereas the other cannot be backdated to the ‘increase day’ set out in the notice. The increase based on CPI will have been made only once in the year i.e. the CPI will not have been applied to itself by a second CPI increase in that year.
As canvassed above, the Tribunal’s powers with respect to site rent are wide under the Act. More generally, s 24(1) of the Act provides that if there is any inconsistency between the Act and a term of the site agreement, the Act prevails to the extent of the inconsistency. S 19(e) provides that the terms of a site agreement are taken to include, amongst other things, duties (other than those specifically listed in the section) ‘..imposed on, or entitlements given to the park owner or the home owner under the Act’. For these reasons, the Tribunal’s view is that once the threshold s 70 requirements are met, the Tribunal’s powers not restricted in the way Mr Miller suggests.
Without considering in any detail the law relating to true ‘retrospectivity’, the Tribunal notes that there has been no change to the law with retrospective application in this case. The increase is ‘retrospective’ to the increase date contained in the original notices, and is only retrospective as a result of the effluxion of time during which the parties exercised their rights under the Act. The Tribunal derives some support for its approach from a decision under the Act by the CCT[7] to which Regal Waters referred it. Considering a s 71 increase, albeit under an earlier provision, the learned Member says:
The site rent increase date will be 6 October, which was the date specified in the increase Notices of 27 July 2005. The respondents will therefore be liable for arrears of site rent which will need to be calculated taking into account further CPI increases in 2006 and 2007.
[7]Palmpoint Pty Ltd T/A Bribie Pines Island Village v The Residents of Bribie Pines Island Village, Astbury, Hose [2008] CCT MH020-05. This matter was remitted to the CCT by Dearden DCJ.
Should the Tribunal make an order under s 70 of the Act?
Mr Miller has asserted in his application that he has been materially prejudiced because he has been denied the right to seek an order under s 70 of the Act by the flawed nature of the s 69 notice. This contention is obviated by the process of which he has availed himself, and the granting of that application.
An application under s 70 is available if a s 69 notice has been provided to a home owner, and the home owner considers the increase ’excessive’. The Tribunal has found that notice in the terms of s 69 was provided. Mr Miller does not expressly claim the increase is currently excessive, but he seeks that the Tribunal order that a refund be made to him by the site owners of the amount constituted by the CPI increase applied to the difference between the original rental amount and the increase under s 71. He also impugns as potentially significant the ‘compounding effect’ of small percentage increases over numbers of years.
The Tribunal has already canvassed the width of its powers under the Act with respect to decisions about site rent. It may consider a wide range of factors set out in s 70(3), including specific detail about the residential park and site rents, but is not required to do so. S 70(3)(k) of the Act provides the Tribunal may consider whether the increase is fair and equitable in all the circumstances of the case, and s 70(3)(l), anything else the Tribunal considers relevant.
The Tribunal acknowledges that it has limited information on many of the factors enumerated, but considers that the overwhelming factor here is the small sum involved. Regal Waters actual calculations of the site rent increase amounts[8] have not been disputed by Mr Miller, and the Tribunal accepts them as sufficient to the purposes at hand. Mr Miller objects to the CPI on the difference between the base rate of site rent and the s 71 increased amount. This amounts to 15c for 2011 and on the 2012 difference is 5c, making a total of $10.40 per year. Once the impact of rent assistance is taken into account[9], it is approximately 5c per week or $2.60 per year. The Tribunal is satisfied in all the circumstances that that sum will not have a significant effect on the capacity of Mr Miller to meet his site rent.
[8]Respondent's outline of submissions, [46].
[9]Palmpoint Pty Ltd t/as Bribie Pines Island Village v The Residents of Bribie Pines Island Village, Astbury, Hose [2008] CCT MH020-05 [40].
Mr Miller contends percentage increases made each year mean that a small amount in one year will compound to a large amount over time. The Act however, provides a remedy for Mr Miller, the remedy he has availed himself of. If in any year he believes that a proposed increase to which s 69 relates is ‘excessive’ he may apply to the Tribunal for an order he considers appropriate, as he has done in this instance. Similarly, he may disagree with a proposed increase under s 71, and attract the jurisdiction of the Tribunal.
For these reasons, and for the sake of clarity, the Tribunal orders pursuant to s 70(2)(c) of the Act that ‘site rent’ for the purposes of CPI increases under the site rent agreement includes the increase made under s 71 by earlier order of this Tribunal. The CPI increase days are 1 July 2011 and 1 July 2012 respectively. The effect of these orders is to confirm the increase Mr Miller sought to overturn. This means Mr Miller’s application is unsuccessful.
Costs
Turning to the issue of costs, neither party has requested costs in this matter. S 100 of the QCAT Act provides that each party must bear their own costs. S 102(3) sets out discretionary factors for consideration.
Both parties will have incurred costs in this matter. The application is as a result of Mr Miller home owner exercising rights provided to him by the Act and the QCAT Act. There has been no claim of extraordinary or unusual costs, and the Tribunal therefore will make no order as to costs.
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