Nossiter v Hometown Australia Parklea Operations Pty Ltd

[2021] NSWCATCD 139

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Nossiter v Hometown Australia Parklea Operations Pty Ltd [2021] NSWCATCD 139

Hearing dates:

5 October 2021

Date of orders:

11 October 2021

Decision date:

07 October 2021

Jurisdiction:

Consumer and Commercial Division

Before:

G Blake AM SC, Senior Member

Decision:

(1)   The proceedings are dismissed.

Catchwords:

LEASES AND TENANCIES — Legislation protecting tenants — Residential (Land Lease) Communities Act 2013 (NSW) – whether the Tribunal has power to vary the increase in the site fees under a site agreement which provides for increases in site fees by a fixed method - the Tribunal has no such power – proceedings dismissed

Legislation Cited:

Civil and Administrative Tribunal Rules 2014 (NSW)

Residential (Land Lease) Communities Act 2013 (NSW)

Cases Cited:

Nil

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Leanne Nossiter (Applicant)
Hometown Australia Parklea Operations Pty Ltd (Respondent)

Representation:

B Bavin (Applicant)
J Sirec (Respondent)

File Number(s):

RC 21/31373

Publication restriction:

Nil

REASONS FOR DECISION

Overview

1. In these proceedings the applicant, Leanne Nossiter, seeks against the respondent, Hometown Australia Parklea Operations Pty Ltd, relief under the Residential (Land Lease) Communities Act 2013 (NSW) (RLLC Act) arising out of her ownership of a site in a community which is operated by the respondent.

2. I have decided that the proceedings should be dismissed.

The background

3. The applicant is the home owner of site 26 within a residential land lease community within the meaning of the RLLC Act at Stanhope Gardens known as "Myrtle Glen Stanhope Gardens" (the community).

4. The respondent is the operator of the community which consists of 360 sites.

5. On 19 August 2020, the respondent provided the applicant with a disclosure statement for site 26 (the disclosure statement), which relevantly disclosed:

1. a range of site fees in the community of $145.95 to $217.00 per week;

2. proposed the applicant's site fees would be $217.00 per week;

3. the applicant's site fees would increase by the “fixed method” by 3.75% for 5 years beginning on the date of the first increase, after which the “notice (non-fixed) method” would apply.

6. On 3 September 2020, the applicant and the respondent entered into a residential site agreement (the site agreement) whereby the respondent granted the applicant the right to occupy site 26, and the applicant relevantly agreed to pay:

1. site fees of $217.00 on time and fortnightly in advance;

2. any increase in site fees by the “fixed method” by 3.75% for 5 years beginning on the date of the first increase, after which the “notice (non-fixed) method” would apply, with the first increase on 22 January 2021.

7. On 22 November 2020, the respondent provided the applicant with a notice of site fee increase which provided that her site fees would be $450.28 per fortnight commencing on 22 January 2021 (the 22 November 2020 notice).

8. The great majority of residential site agreements apply the notice (non-fixed) method for increases in site fees, with a small minority applying the fixed method.

The history of the proceedings

9. On 21 July 2021, Brian Bavin (Mr Bavin) commenced proceedings against Myrtle Glen. Parklea Operations Pty Ltd by filing an application in which he relevantly:

1. sought the following orders:

1. an order that Myrtle Glen Stanhope Gardens is not a residential land lease community within the meaning of the RLLC Act;

2. an order that the site agreement is not a site agreement within the meaning of the RLLC Act;

3. an order that the respondent is in breach of s 74 of the RLLC Act;

2. provided the following reasons for seeking these orders:

“In September 2020 Mrs. L Nossiter purchased site no 26 in the Land Lease Community located at 30 Majestic Drive Stanhope Gardens. The former owner was paying $391.00 per fortnight for site fees (the block of land his home was located on). Mrs. Nossiter's starting rate was $417.00 per fortnight, in November 2020 she was advised that her site fees would increase to $450.00 per fortnight within fourteen days' notice. There are over 180 homes in the area of the park Mrs. Nossiter lives in the average rate of fees is $391.00 per fortnight. Mrs. Nossiter is paying $59.00 more per fortnight than her fellow residents.

The Respondent has stated that the fees are based in part on the size of the site and the home's proximity to various amenities. This argument is not valid as there are a number of former tourists cabins that are considerably smaller than the other sites, yet they are also required to pay $391.00 per fortnight. In terms of available amenities, the Respondent is referring to a swimming pool, spa, and library (it's worth noting that the Residents created the library including painting the walls and stocking the shelves). Of the total number of 360 sites in the community, a total of eleven are being charged at the rate of $450.00 per fortnight. The general consensus within the community is that the Respondent is taking unfair advantage of new Residents by charging them at a rate that far exceeds the amount being paid by the majority of Residents. All of the community's 360 sites are located in close proximity to various amenities.”

10. On 16 August 2021, the Tribunal made procedural directions including that the applicant’s name be amended to Leanne Nossiter, and the applicant and the respondent provide all documents that they intended to rely on at the hearing by 30 August 2021 and 13 September 2021 respectively.

11. On 27 August 2021, the applicant provided a bundle of documents to the Tribunal (the applicant’s bundle of documents).

12. On 13 September 2021, the respondent provided a bundle of documents to the Tribunal (the respondent’s bundle of documents).

The hearing

13. On 5 October 2021 at 10.45am, the hearing took place by telephone. Mr Bavin appeared for the applicant and Mr J Sirec (Mr Sirec) appeared for the respondent.

14. At the commencement of the hearing, I made an order amending the name of the respondent to Hometown Australia Parklea Operations Pty Ltd.

15. The applicant relied on the applicant’s bundle of documents which was admitted into evidence without objection (Ex A1).

16. The respondent relied on the respondent’s bundle of documents which was admitted into evidence without objection (Ex R1).

17. There was no oral evidence on behalf of the applicant or the respondent.

18. Each of the applicant and the respondent made oral submissions.

19. During the hearing the issues between the parties narrowed. The applicant conceded that the only issue in dispute is the increase in the site fees of the applicant.

20. At the conclusion of the hearing I reserved my decision.

The issues

21. The following issues arise for decision:

1. whether the Tribunal has power to vary the increase in the site fees of the applicant set out in the 22 November 2020 notice;

2. whether the Tribunal should exercise any power to vary the increase in the site fees of the applicant set out in the 22 November 2020 notice.

22. Before considering these issues it is appropriate to set out the applicable statutory provisions, and the evidence and submissions of the parties.

The applicable statutory provisions

RLLC Act

23. Part 6 Division 3 (ss 65-68) contains provisions dealing with the increase of site fees. Section 65 deals with how site fees may be increased, and provides:

65 How site fees may be increased

(1) Site fees payable under a site agreement can be increased only if the increase is made in accordance with this Division.

(2) A site agreement may provide that site fees payable under it may be increased in accordance with either of the following procedures—

(a) at specified intervals (or on specified dates) by a fixed method, which may be either—

(i) by fixed amounts, or

(ii) by a fixed calculation (for example, in proportion to variations in the Consumer Price Index or in the age pension),

(b) by notice (otherwise than by a fixed method).

24. Section 66 deals with the increase of site fees by the fixed method, and relevantly provides:

66 Increase of site fees by fixed method

(1) This section applies to a site agreement that provides for the increase of the site fees by a fixed method.

…

(3) The operator must not increase (or attempt to increase) the site fees that are to be increased according to a fixed method otherwise than in accordance with that method and this section.

Maximum penalty—50 penalty units.

(4) The operator must give at least 14 days’ written notice to the home owner of any increase in site fees, even if the timing of the increase is specified in the site agreement.

(5) The notice must—

(a) specify the amount of the increased site fees, and

(b) specify how the increased site fees have been calculated, and

(c) specify the day on and from which the increased site fees are payable, and

(d) include such other information as may be prescribed by the regulations, and

(e) be in the approved form (if any).

(6) The home owner is not required to pay any increase in the site fees until notice of the increase is given as required by this section.

(7) The terms of a site agreement fixing the method of future increases of site fees cannot be challenged under this Act. However—

(a) the terms of the agreement may be varied if the parties enter into a written agreement to do so, and

(b) this subsection does not affect any right that the home owner has, apart from this Act and the Civil and Administrative Tribunal Act 2013, to challenge any of the terms.

Note. A home owner may be able to take action over unfair contract terms under the Australian Consumer Law of the Commonwealth.

(8) A fixed method of increase may—

(a) be for a specified period or for the duration of occupancy of a residential site by a home owner, and

(b) have effect for longer than the term of a site agreement for a fixed term.

25. Section 68 deals with the refund of overpaid site fees, and relevantly provides:

68 Refund of overpaid site fees if increase not compliant

(1) A home owner under a site agreement may apply to the Tribunal for an order directing the refund of overpaid site fees on the ground that the increase of site fees did not comply with a requirement of this Division.

(2) The Tribunal may make any of the following orders—

(a) an order directing a refund to the home owner,

…

(3) An application under this section must be lodged no later than 12 months after notice of the increase was given to the home owner.

26. Part 6 Division 5 (ss 70-75) contains provisions dealing with applications to the Tribunal about increases in site fees by notice (otherwise than by a fixed method).

NCAT Rules

27. Part 6 (rr 23-26) of the Civil and Administrative Tribunal Rules 2014 (NSW) (NCAT Rules) contains provisions dealing with the commencement of proceedings in the Tribunal. Rule 23 deals with general applications, and relevantly provides

23 General applications

…

(3) Unless the Tribunal grants an extension under section 41 of the Act, an application must be made—

(a) in the case where enabling legislation specifies the period within which the application is to

be made—within the period specified, or

(b) in any other case—within 28 days from the day on which the applicant became entitled under the enabling legislation to make the application.

…

The evidence of the parties

The evidence of the applicant

28. The applicant’s bundle of documents includes the following documents:

1. the 22 November 2020 notice;

2. the email from Mr Bavin to Mr Sirec sent on 14 July 2021 at 5.40pm (the 14 July 2021 at 5.40pm email) which relevantly provides:

“I have agreed to assist Mrs Leanne Nossiter in submitting an application to NCAT. The application relates to the excessive site fees, currently being paid by Mrs Nossiter, as you may be aware she is paying $450.00 per fortnight, her neighbour is paying $391.00 per fortnight. This equates to $59.00 per fortnight more than Mrs Nossiters near neighbours. In fact the difference between sites is 15% per fortnight, or 50% of the single age pension ($1100.00).

…. The reduction gained for Homeowners by Mary and Myself, makes the gap between Mrs Nossiter and her neighbour's even greater. If the matter proceeds to NCAT. I will include in my submission Stat Dees from Homeowners who have been unable to sell their homes due to the prospective buyer, being unwilling/ unable to pay the excessive site fees being charged by Hometown.

I ask that you reconsider your policy regarding, increasing site fees when a home is sold. This issue is high ion (sic) the agenda of the review of the Residential Land Lease Act. They have recieved (sic) a large number of submissions (160 from this community alone) detailing Hometowns practice of increasing fees by an excessive amount.”

3. the letter from Mr Sirec to Mr Bavin sent on 19 July 2021 by email in response to the 14 July 2021 at 5.40pm email (the 19 July 2021 letter) which relevantly provides:

“…. We provide the following response to the various items raised:

…

2. Excessive site fees.

We currently have 11 sites (including site 26) paying the site fee of $450.28 per fortnight. The average lot size of these sites is 177.8m2 with the smallest 140m2 and largest 230m2. Site 26 at 196m2 is similar to a number of sites that were already paying the highest site fee in the community when Leanne came into the community in September 2020. Site 26, as with a number of these other sites, are of a similar location with proximity to amenities. Based on the two elements above and various sites paying Mrs Nossiter's entry site fee prior to entering the community, we do not agree the site fees are excessive.

3. Difference between neighbour - rent disparity.

The neighbour referred to may have been a home owner at Myrtle Glen for a significantly longer period causing them to enter the market under different conditions. The home owner of site 26 moved into the community in September 2020 with 5 other home owners moving in immediately prior to Site 26 at the same rent as Mrs Nossiter. This explains why rent disparity exists amongst home owners moving into the community under current market conditions at the current rent.

4. Difficulty with home owners selling their homes.

In 2021 there have been 6 new move-ins at the current market rate of $450.28. The feedback is based on asking prices and condition of homes and that their transactions are dependent on the sale of their existing homes, and not dependent on the amount of site fee. The Sydney market is achieving record prices providing potential home owners greater options.

We realise your concern of rent disparity for Mrs Nossiter, however, this is considered due to people entering the community at different times, under different market conditions and that the Site 26 site fee was at market upon entry based on those site of a similar size and location being in place prior to her entry into the community. We encourage Leanne to make a time to meet with us so that we can discuss a payment plan that can assist during her current employment transition.”

4. a list of the site fess and area of each site in the community.

The evidence of the respondent

29. The respondent’s bundle of documents includes the disclosure statement, the site agreement, the 22 November 2020 notice, the 14 July 2021 at 5.40pm email, and the 19 July 2021 letter.

The submissions of the parties

The submissions of the applicant

30. The applicant made the following submissions:

1. the site fees paid by new homeowners are excessive;

2. the respondent is taking advantage of the sales of sites to unfairly increase the rate of site fees by only offering site agreements containing increases to site fees by the fixed method.

The submissions of the respondent

31. The respondent made the following submissions:

1. section 70 of the RLLC Act states Part 6 Division 5 only applies to site fee increase methods that are by notice and therefore, does not apply to the applicant. The applicantion has no basis and the applicant is not entitled to seek an order under s 74 of the RLLC Act, or any section under Part 6 Division 5;

2. section 66(7) of the RLLC Act does not allow the applicant to challenge the site fee increase method or to claim the site fee increase is excessive;

3. the application has not been made within 28 days of the applicant becoming entitled to do so as specified in r 23(3)(b) of the NCAT Rules.

Whether the Tribunal has power to vary the increase in the site fees of the applicant set out in the 22 November 2020 notice

32. I am satisfied that the Tribunal has no power to vary the increase in the site fees of the applicant set out in the 22 November 2020 notice for the following reasons:

1. the site agreement provides for an increase in site fees by the fixed method within s 65(2)(a)(ii) of the RLLC Act;

2. the 22 November 2020 notice satisfied the requirements for an increase specified in s 66(4) and (5) of the RLLC Act;

3. there is no basis on the evidence for a finding that the applicant has overpaid site fees and it follows that she is not entitled to make an application for a refund of overpaid site fess under s 68(1) of the RLLC Act;

4. by reason of the operation of s 66(7) of the RLLC Act the terms of the site agreement fixing the method of future increases of site fees cannot be challenged under the RLLC Act.

33. The application is misconceived because it proceeds on the incorrect basis that s 74 of the RLLC Act is available to challenge the increase in the site fees of the applicant set out in the 22 November 2020 notice. Section 74 is located within Part 6 Division 5 which contains provisions dealing with applications to the Tribunal about increases in site fees by notice (otherwise than by a fixed method). There has been no increase in site fees of the applicant by notice (otherwise than by a fixed method) because the site agreement provides for an increase in site fees by the fixed method.

34. It is unnecessary to consider the application of r 23(3)(b) of the NCAT Rules because the applicant has not become entitled to make an application under the RLLC Act in relation to the increase in the site fees set out in the 22 November 2020 notice.

Whether the Tribunal should exercise any power to vary the increase in the site fees of the applicant set out in the 22 November 2020 notice

35. In view of my finding that I am not satisfied that the Tribunal has power to vary the increase in the site fees of the applicant set out in the 22 November 2020 notice, this issue does not arise for decision.

Order

36. I make the following order:

1. the proceedings are dismissed.

**********

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: 15 February 2022