Penshurst Street Holdings Pty Ltd v Robert Barker and Joan Barker

[2014] NSWCATCD 209

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	Penshurst Street Holdings Pty Ltd v Robert Barker and Joan Barker and others [2014] NSWCATCD 209
Hearing dates:	9 July 2014 and 29-30 September 2014
Decision date:	25 November 2014
Jurisdiction:	Consumer and Commercial Division
Before:	J Smith, Senior Member
Decision:	Each application is dismissed. The Tribunal notes the undertaking that the parties would not seek costs.
Catchwords:	Change of land use, termination of village contracts, “appropriate” that land use be changed, “obtained (or made available) alternative accommodation” whether at greater financial outlay.
Legislation Cited:	Civil and Administrative Tribunal Act 2013 (NCAT Act), Retirement Villages Act 1999 (RV Act)
Category:	Principal judgment
Parties:	Applicant: Penshurst Street Holdings Pty Ltd (in all six applications) Respondents: Mr Robert Barker and Mrs Joan Barker (application RV 14/ 16133), Ms Jennifer Gee (application RV 14/ 16149) Ms Helgi Wilson (application RV 14/ 16141) Mr Douglas Little (application RV 14/ 16164) Ms Linda Yeo (application RV 14/ 16167) Ms Mary Kelly (application RV 14/ 16138)
Representation:	Counsel: Mr Allan for the respondents Solicitors: Mr Koumoukelis for the applicant
File Number(s):	RV 14/ 16133, RV 14/ 16149, RV 14/ 16141, RV 14/ 16164, RV 14/ 16167, RV 14/ 16138
Publication restriction:	Nil

REASONS FOR DECISION

APPLICATION

1. These six applications were filed in the Tribunal on 19 March 2014. At that time application RV 14/ 16134 raising the same issues was also filed but has since been withdrawn. The applications were listed for a directions hearing before me on 8 April 2014 at which time leave for the parties to be legally represented was granted and directions were made for exchange of documents.

2. The applications were listed before me for a one day hearing on 9 July 2014. At that hearing the applicant’s case was commenced but it became apparent that insufficient time had been allocated to complete the matter on that day. In addition, in order to fully understand the applicant’s submissions in regard to its claimed attempts at provision of alternate accommodation for the respondents and the respondent’s submissions in reply, the parties were directed to exchange further material in the form of a schedule setting out the submission and the evidence to be relied on by the applicant and a response from each of the respondents.

3. The matters were then listed for further hearing on 29, 30 September 2014. At the commencement of the hearing on 29 September 2014 and at the conclusion of the hearing on 30 September 2014 the parties’ attention was drawn to the potentially serious consequences for the unsuccessful party(ies) of a decision of the Tribunal and they were invited to engage in settlement discussions. At the time of conclusion of the hearing the parties had been unable to resolve their dispute by agreement. They were however encouraged to have further discussions with a view to resolution by consent prior to publication of this decision.

4. All six applications sought orders pursuant to the Retirement Villages Act 1999 s 136 for the termination of the village contract of each respondent and for possession of their respective premises to be handed back to the applicant. The applications were based on a proposed change of land usage.

5. At the commencement of the hearings on 9 July 2014 it was determined that all matters were to be heard together and that the evidence in one would be treated as evidence in all. Neither of the parties’ representatives took exception to that way of proceeding.

JURISDICTION

6. It was not disputed that the Tribunal has jurisdiction to hear and determine the applications. The Tribunal’s jurisdiction to do so is founded in the Civil and Administrative Tribunal Act 2013 (NCAT Act) s 29 and Schedule 4, clause 3 and the Retirement Villages Act (RVAct) s 136

SUMMONS

7. On 22 September 2014, on request of the respondents’ representative, a summons was issued on the liquidator of the previous operator of the retirement village for the production of certain financial records. There was no appearance of the summonsed party on 29 September 2014 and the summons was stood over to the following day.

8. On 30 September 2014 the summonsed party appeared and advised that he had never been properly served with the summons, had only heard about it on the previous afternoon and was unable to readily comply with the summons due to his records being in storage.

9. No request was made to adjourn the proceedings and the summons was set aside and the summonsed party was excused.

ISSUES

10. During the course of the hearing the following issues were identified by the Tribunal and the parties were invited to address the issues in their submissions and to refer to their evidence in relation to the issues.

1. Whether it is “appropriate” that the land on which the village is situated should be used for a purpose other than a retirement village. (RV Act s 136(1)(b))

2. Whether the operator of the village has given each of the residents at least 12 months’ notice in writing of the operator’s intention to make an application to the Tribunal pursuant to s 136. (RV Act s 136(2)(a)).

3. Whether the development consent and any other necessary approvals to use the land for another purpose have been obtained by the operator. (RV Act s 136(2)(b)).

4. Whether the operator has obtained (or made available) for each of the residents alternative accommodation that is of approximately the same standard and requires no greater financial outlay on the part of the resident, than the residential premises the subject of the village contract. (RV Act s 136(2)(c)(i)).

5. Whether any alternate accommodation obtained or made available by the operator is acceptable or ought reasonably be acceptable to the resident (RV Act s 136(2)(c)(ii)).

6. Whether the respondents are entitled to compensation pursuant to the provisions of the RV Act s 136(3)(d).

APPLICANT’S CASE

11. The applicant’s case was to the following relevant effect.

12. The village had originally been established and operated by the Fair Havens Association for Christian Scientists Incorporated. That charitable organisation had become insolvent and a liquidator was appointed in October 2010. The liquidator continued to operate the village but could not operate it as a financially viable concern and was unable to sell it as a retirement village. The liquidator then proceeded to sell the land on which the village is situated for a purpose other than a retirement village.

13. In 2012 the land was rezoned by council to permit higher density residential development than had previously been the case.

14. On 15 October 2012 the liquidator had entered into a contract for the sale of the land and promptly advised the residents of the sale and of the fact that the purchaser (the applicant in these proceedings) did not intend to operate the property as a retirement village but would redevelop the site. The residents however, were advised that the applicant would operate the village pursuant to the RVAct until such time as the re-development took place.

15. On 23 November 2012 the operator of the village (the liquidator) together with the applicant had notified the residents in accordance with the RVAct s 136(2)(a) of the intention of the operator to seek the orders of the Tribunal to terminate the village contracts of the then 21 residents.

16. On 14 February 2014 the applicant was granted development consent by council to redevelop the land upon which the village stands.

17. The applicant has subsequently re-located all residents except the seven being the subject of these six applications into alternate accommodation.

18. The applicant has, in respect of each of the respondents, located or made available alternate accommodation that ought reasonably be acceptable to them.

19. The operator has gone to considerable lengths to assist the residents to find alternate accommodation and has engaged two staff members specifically for that purpose. Those staff members have researched alternate retirement villages and other accommodation and have communicated their findings to the residents by meetings of residents, letters, telephone calls and discussions. The operator has on occasion assisted residents to visit prospective alternate accommodation and has in several cases provided financial assistance to other residents to assist them to re-locate.

20. Ultimately it is the residents’ decision on whether to move to one of the locations provided for alternate accommodation; however the applicant has met all of its obligations pursuant to s 136 and now seeks orders for termination of the village contracts.

RESPONDENTS’ CASE

21. The respondents’ case was to the following relevant effect.

22. Originally the village was established to accommodate members of the Christian Scientist religion but due to dwindling numbers of residents the operator accepted people who were not of that faith.

23. Each of the respondents had paid a deposit of $500 and had entered into a rental agreement with the village operator in respect of their residence. A copy of the village contract entered into by each of the respondents with the exception of Mr and Mrs Barker and Ms Kelly was provided by the applicant. In respect of the Barkers it was not in dispute that an order of the Tribunal made on 29 September 2011 (RV 10/ 48967) had the effect of implying a village contract. In respect of Ms Kelly the village contract had been misplaced.

24. In any event there was no dispute between the parties that each of the respondents occupied their respective residences within the village as tenants pursuant to a retirement village contract.

25. Little information was provided to the residents during the time the liquidator operated the village. However, it was acknowledged that the liquidator had advised the residents during that period that the village could not continue to operate and that his intention was to sell the land. It was submitted however, that notification of prospective sale of the land did not give rise to any obligation on the residents to find alternate accommodation.

26. In regard to the notice given by the liquidator on 23 November 2012 it was the respondents’ case that because of its wording the notice did not fulfil the obligation under s 136(2)(a) to give the residents 12 months’ written notice of the operator’s intention to seek orders for termination under s 136.

27. Further, it was the respondents’ position that the operator had not met its obligation to obtain or make available alternate accommodation by its actions of simply providing a list of alternate retirement villages, some of which had no vacancies or for which a large deposit was required or for other reasons were entirely unsuitable to individual residents.

28. Each of the respondents gave an explanation of their particular circumstances that were relevant to whether any alternate accommodation was reasonably acceptable to them.

29. In some cases the respondents felt that their particular medical condition required that they stay in an area proximate to the Royal North Shore Hospital where they were obtaining treatment, or proximate to their medical team that was treating them. Other residents had particular conditions that made train travel difficult or in one case required their residence in close proximity to a daughter for whom they were carer.

30. In all cases the respondents claimed to have taken positive action to find alternate suitable accommodation and, for reasons of proximity, transport, availability, size, facilities or financial considerations had been unable to do so.

31. In the event that the respondents’ arguments did not persuade the Tribunal and it was found necessary that the respondents move out of their residences, the respondents also sought orders for compensation pursuant to the RV Act s 136(3)(d).

THE EVIDENCE

32. The applicant relied on the following evidence

• Written statement of Mr Stephen Abolakian, general manager of the applicant company dated 30 July 2014. In addition Mr Abolakian gave evidence on affirmation and was cross examined on his evidence,

• Written statements of Mr Ian Longbottom, consultant retained by the applicant, dated 3 June 2014 and 30 July 2014. In addition Mr Longbottom gave evidence on affirmation and was cross examined on his evidence.

• Written statements of Mr Kaylar Michaelian, consultant retained by the applicant, dated 3 June 2014 and 20 June 2014. In addition Mr Michaelian gave evidence on affirmation and was cross examined on his evidence.

• Correspondence from Willoughby Council dated 8 July 2014 in explanation that changes to zoning for the subject land did not provided for higher density than was previously provided (exhibit 1),

• Copy of the transfer of the subject land to the applicant dated 11 December 2013 (exhibit 2),

• E-mail correspondence and attached copy of pro-forma letter sent to residents in October 2012 and notifying them of the sale of the retirement village to the applicant together with copy of additional clauses to the contract of sale (exhibit 3),

• Documents attached to application RV 14/16138 numbered 1 to 76,

• Documents attached to application RV 14/16141 numbered 1 to 78,

• Documents attached to application RV 14/ 16149 numbered 1 to 79,

• Documents attached to application RV 14/ 16167 numbered 1 to 80,

• Documents attached to application RV 14/ 16164 numbered 1 to 76,

• Documents attached to application RV 16133 numbered 1 to 79,

• In addition, and in compliance with directions made on 9 July 2014, the applicant provided a schedule setting out in respect of each respondent the date and mode by which alternate accommodation was made available to the respondent together with information relating to the rental cost of the alternate accommodation, whether or not an ingoing contribution was required and a description of the proposed alternate accommodation. Attached to each schedule was the evidence relied on by the applicant to establish the veracity of the information set out in the schedule.

33. The respondents relied on the following evidence.

• In application RV 14/ 16167, a Statutory Declaration of the respondent dated 16 April 2014 and a reply to the schedule filed by the applicant,

• In application RV 14/ 16141, a Statutory Declaration of the respondent dated 11 April 2014 together with a list of alternate accommodation investigated by the respondent and a reply to the schedule filed by the applicant,

• In application RV 14/ 16164, a Statutory Declaration of the respondent dated 16 April 2014 together with a witness statement dated 28 August 2014 with supporting documents attached and a reply to the schedule filed by the applicant,

• In application RV 14/ 16138, a Statutory Declarations of the respondent dated 20 June 2013 and 23 April 2014 with attachments (but excluding attachment “F” that was withdrawn) and a reply to the schedule filed by the applicant,

• In application RV 14/ 16149 a Statutory Declaration of the respondent dated 23 April 2013 attaching correspondence between the respondent and the applicant dated 14 March 2013 and 26 March 2013, material related to the respondent’s medical conditions a schedule of alternate accommodation researched by the respondent and a reply to the schedule filed by the applicant,

• In application RV 14/ 16133 a Statutory Declaration of the respondents dated 16 April 2014 attached witness statement and correspondence relating to the respondents’ daughter’s medical condition and related issues, and a response to the schedule filed by the applicant,

• A computer print-out of internet advertising for rental of residences within the retirement village dated 29 September 2014 (exhibit 4).

34. Each of the respondents gave evidence on affirmation and was cross examined on their evidence, with the exception of Mrs Barker.

RELEVANT LAW

“Appropriateness” of change of land usage

35. The RV Act s 136 provides

136 Termination on grounds of upgrade or change of use

(1) The Tribunal may, on application by the operator of a retirement village, make an order terminating a residence contract if it is satisfied that:

(a) for the purpose of improving the village, the operator intends to carry out such substantial works in the village as require vacant possession of the residential premises concerned, or

(b) it is appropriate that the land on which the village is situated should be used for a purpose other than a retirement village.

(2) However, the Tribunal is not to make an order terminating a residence contract under this section unless it is also satisfied that:

(a) the operator has given the resident at least 12 months' written notice of the operator's intention to make an application under this section, and

(b) development consent and any other necessary approvals to carry out the works or use the land for the other purpose have been obtained, and

(c) the operator has obtained (or made available) for the resident alternative accommodation:

(i) that is of approximately the same standard as, and requires no greater financial outlay on the part of the resident than, the residential premises the subject of the residence contract, and

(ii) that is acceptable to the resident or reasonably ought to be acceptable to the resident.

(3) If the Tribunal makes an order terminating a residence contract under this section, the Tribunal:

(a) must fix in the order a date by which the resident must vacate the residential premises concerned, and

(b) must specify in the order the penalty that the operator will incur if the works are not substantially commenced, or action to facilitate the use of the land for the other purpose not taken, within 6 months after the date fixed under paragraph (a), and

(c) may order the operator to allow the resident to return to the residential premises, under a contract identical to the contract being terminated, on completion of the works, and

(d) may make such other orders (including an order that the operator pay to the resident compensation for the resident's loss of rights under the residence contract) as it thinks fit.

36. The applications are brought pursuant to s 136 (1)(b) and therefore the threshold issue for consideration by the Tribunal is whether it is “appropriate” that the land upon which Fair Havens retirement village is situated should be used for a purpose other than as a retirement village.

37. The applicant’s position was that “the primary and initial enquiry (of the Tribunal) is looking at the operator’s purpose and the land upon which the village is situated”.

38. In that regard it was submitted by the applicant that the object of the initial operator of the village (The Fair Haven Association for Christian Scientists Incorporated) was “to establish and maintain homes principally but not exclusively for Christian Sciences so as to provide affordable rental accommodation for the members as specified in the Retirement Villages Act 1989[sic]”.

39. I do not recall that objective of the Association being provided in the evidence but I accept that it is not in dispute that the statement is in accord with the understanding of all parties of the manner in which the initial village operator conducted the village.

40. Further, it was submitted and the evidence supported the applicant’s position on this point, the village was not always run in accordance with the Retirement Villages Act. Accordingly it was argued Fair Haven was a retirement village in name only. I do not accept that proposition.

41. The Retirement Villages Act 1999 at s 5 provides the meaning of “retirement village”,

5 Meaning of "retirement village"

(1) For the purposes of this Act, a "retirement village" is a complex containing residential premises that are:

(a) predominantly or exclusively occupied, or intended to be predominantly or exclusively occupied, by retired persons who have entered into village contracts with an operator of the complex, or

(b) prescribed by the regulations for the purposes of this definition.

(2) It does not matter that some residential premises in the complex may be occupied by employees of the operator or under residential tenancy agreements containing a term to the effect that this Act does not apply to the premises the subject of the agreement (instead of being occupied under residence contracts), or that those premises do not form part of the retirement village.

(3) However, a "retirement village" does not include any of the following:

(a) any building or any part of a building used or intended to be used for the provision of residential care, within the meaning of the Aged Care Act 1997 of the Commonwealth, by an approved provider under that Act, Paragraph (a) excludes from the definition of "retirement village" buildings that are commonly known as Commonwealth-subsidised hostels and nursing homes.

(b) a nursing home within the meaning of the Public Health Act 1991,

(c) any building or part of a building intended to be used for the provision of respite care (within the meaning of Aged Care Act 1997 of the Commonwealth),

(d) a residential park (within the meaning of the Residential Parks Act 1998),

(e) any residential premises the subject of a residential tenancy agreement to which the NSW Aboriginal Housing Office or the New South Wales Land and Housing Corporation is a party,

(f) a boarding-house or lodging house,

(g) any accommodation provided in a complex for employees of the complex who are not residents of the retirement village,

(h) any residential premises the subject of a residential tenancy agreement in the form prescribed under the Residential Tenancies Act 1987 to which the operator of a retirement village is a party and that contains a term to the effect that this Act does not apply to the residential premises the subject of the agreement,

(i) any other place or part of a place excluded from this definition by the regulations.

42. Clearly, Fair Haven comes within that definition as a “complex containing residential premises that are predominantly or exclusively occupied or intended to be predominantly or exclusively occupied by retired persons who have entered into village contracts with an operator of the complex”. It matters little in my view, for the purpose of defining the complex and in determining this application whether the initial village operator met all of its obligations under the RVAct.

43. The applicant relied on the filed statement of one of the respondents (Mr Little) in its submission to support the proposition that by 2010 there was an emerging financial constraint due to the declining number of residents who were Christian Scientists, the aging buildings that did not meet “modern day requirements”, the need for a substantial upgrade and the resources to carry it out and the need to re-direct the support of Christian Scientists to other areas.

44. It was the conclusion of the Association, it was submitted, that it lacked the financial strength, organisational structure, objectives and governance depth and it was not practical for it to continue to operate as a village. For those reasons the Association went into voluntary liquidation.

45. The applicant further submitted that from the time of appointment of the second operator of the village (the liquidator, Mr Hedge) it had been determined that the village could not continue to operate as a village. The liquidator had made clear to the residents that the land upon which the village operates was to be sold and the use would consequently change.

46. The respondents’ submission was that the process of determining whether the proposed change of land use is or is not “appropriate” involves something more than simply looking at “the operator’s purpose and the land” as submitted by the applicant.

47. The legislation, it was submitted for the respondents, “contains an emphatic requirement that the Tribunal be persuaded there is something better out there for this land”.

48. At the commencement of the hearing on 9 July 2014 during the applicant’s opening remarks the Tribunal sought clarification of the issue of whether or not it was appropriate in this case to change the land use. It was noted that the legislation did not provide any assistance in understanding the term “appropriate” and it was suggested that the dictionary definition of “appropriate” may be a good starting point and then to see whether the evidence demonstrated that it was appropriate in this case to change the land use.

49. Submissions for the applicant at that time were that the village could not be run on a commercial footing, which was demonstrated by the fact that it went into liquidation, and that as a result it was appropriate for the operator to change the land usage. That is, it is necessary to change the land use because the village cannot operate on a commercial footing.

50. As suggested by the Tribunal on 9 July 2014, the dictionary meaning of “appropriate” connotes a concept of being “fitting” or “proper”. The Macquarie dictionary provides the following definition relevant to a consideration of “use”,

Suitable or fitting for a particular purpose, person, occasion, etc.

51. I accept the argument that by demonstrating it is necessary to change land use because operation as a village cannot be maintained on a financially viable footing would suffice to meet the test of whether the proposed change is appropriate.

52. However, regardless of what the previous two operators of the village considered appropriate and regardless of what their objectives were in operating of village, there is insufficient evidence before the Tribunal to demonstrate that it is necessary for the current operator of the village to change the land use because it is unable to operate the village on a commercial footing.

53. The applications in recounting the history of Fair Haven claimed that the liquidator could not operate the village as a financially viable concern and was unable to sell it as a retirement village and he then proceeded to sell the land upon which the village is situated.

54. That proposition is simply incorrect. There is no evidence that the liquidator ever attempted to operate the village on a financial footing by applying different objectives to those set out above as being the objectives of the initial operator. The evidence discloses that there are a great number of retirement villages operating in close proximity to Fair Haven and further afield. There is no evidence that those villages operate with the financial constraint necessarily imposed by the initial operator’s objectives. All charge more for the services they provide than Fair Haven (which is one of the reasons it has been so difficult to re-locate the respondents).

55. Had the liquidator applied different charges (bearing in mind that by 2010 only seven of the 30 residents were Christian Scientists) and had the liquidator invited new residents to take up occupation of Fair Haven on a different financial footing to the existing residents it is by no means clear that the village could not have continued to operate on a financially viable footing.

56. Further, the liquidator did not sell the land upon which the village stands he sold the village and the land, as is clear from the evidence (exhibit 3 annexures).

57. However, the capacity of the liquidator to operate the village on a commercial footing is not the issue. The issue is whether or not the applicant was able to operate the village and if not whether it is “appropriate” (“fitting” or “suitable”) to change the land use to something else.

58. There is no evidence that the applicant has seriously considered operation of the village as a retirement village. Mr Abolakian, general manager of the applicant company, gave evidence on affirmation on 9 July 2014 that he was personally involved in the purchase of the retirement village. He gave evidence that it was the liquidator’s decision that Fair Haven could not operate viably as a retirement village and that he bought it knowing it did not work as a retirement village. Under cross examination Mr Abolakian acknowledged that he had not considered operating Fair Haven as a retirement village.

59. Mr Abolakian sought to modify the above evidence with a witness statement filed subsequently on 30 July 2014. That witness statement did refer to reviewing the financial reports for the village as part of the due diligence process and stated that consideration was given to continued operation of the village. The statement also noted that the advertisement and information package did not make any reference to Fair Haven being subject to the RV Act.

60. Under cross examination on the additional statement Mr Abolakian acknowledged that the applicant is a property developer whose prime concern is to make a profit and that by September 2013 the applicant was already selling residences in the proposed new development “off the plan”. Mr Abolakian also acknowledged that he had calculated the cost of constructing the development before ever he exchanged contracts on the purchase.

61. From the outset, even before the sale of the village to the applicant, the applicant’s actions were clearly directed at redeveloping the land upon which the village stands and in order to do so it was necessary to get the residents out of Fair Haven. The then operator, together with the applicant, served the notice on the residents upon which the applicant now relies on 23 November 2012. Mr Abolakian acknowledged under cross examination that by the following June he had already had brochures printed for his proposed development. Two consultants were engaged by the applicant in October 2012 to assist the residents to move out (witness statement of Mr Longbottom dated 30 July 2014) and application was made to Council for development consent.

62. I am satisfied that the actions of the applicant from the outset are entirely consistent with a plan to close the retirement village and to re-develop the site.

63. There is no evidence of any cost/benefit analysis or other procedure being conducted by the applicant to assess whether, by encouraging new residents and requiring substantial deposits and/or higher charges the applicant could not conduct the village on a sound commercial footing.

64. The applicant does not operate any other retirement village and I accept that operation of a village does not form part of its core business.

65. However, I do not accept that it has been demonstrated that it is appropriate to change the use of the land upon which Fair Haven stands. Rather, I am persuaded, the applicant does not wish to operate Fair Haven as a retirement village but seeks to re-develop the land for residential accommodation because it is financially more attractive to do so.

66. That is, the proposed land use is a matter of preference for the applicant without having demonstrated that it is a necessary and therefore appropriate course to adopt.

67. As I have determined that the applicant has not demonstrated the necessary pre-condition provided under the RV Act s 136(1)(b) for the Tribunal to make the orders sought that is sufficient to dispose of the applications. However, for completeness I will consider the other matters necessary to satisfy the provisions of s 136 (2).

Has the operator given each resident at least 12 months’ notice?

68. The RV Act s 136(2)(a) provides that the Tribunal cannot make an order terminating the village contract unless it is satisfied that the operator has given “at least 12 months’ written notice of the operator’s intention to make an application under (the) section”.

69. The notice relied on by the applicant was that filed with each application, which was set out on a “Fair Havens Association for Christian Scientists Incorporated (in Liquidation)” letterhead and dated 23 November 2012.

70. The notice was signed by the then operator Mr Hedge (the liquidator). The notice was also signed by Mr Abolakian on behalf of the applicant. The notice was given after the applicant and the liquidator had exchanged contracts of sale but before completion of the sale. Whether the applicant had the right to give that notice because of the authority provided by the liquidator in the notice itself or whether it arises pursuant to the contract of sale, I am satisfied that the notice was given by the (then) operator and the fact that there is now a different operator is of no relevance to the validity of the notice.

71. It was not disputed that each of the respondents had received the notice which was said to have been hand delivered in each case.

72. The notice made reference to earlier correspondence dated 15 October 2012 giving notice of the intention to sell the property (exhibit 3). The earlier notice was referred to by the applicant as the “first notice” but it does not appear the applicant seriously suggested that it complied with the provisions of s 136(2)(a). The first notice was tendered in a “pro forma” format but was sufficiently complete to note that no notice of an intention to make application under s 136 was mentioned.

73. The notice of 23 November 2012 authorised the applicant to issue notices and correspondence on behalf of the liquidator and to meet residents to discuss the proposed change of land usage. It was that notice upon which the applicant relied in order to demonstrate compliance with s 136(2)(a).

74. The notice relevantly contained the following words

“This notice is to advise you that at the time contemplated under the Act, it will be our intention to apply to the Consumer, Trader and Tenancy Tribunal under section 136 of the Act for an order terminating your residence contract.

This notice does not require you to vacate the premises. The decision as to whether your contract is terminated rests solely with the Tribunal.”

75. It was the applicant’s position that this notice constituted 12 months’ written notice of intention as required under s 136(2)(a).

76. The respondents’ position was that the notice was defective on its face as it failed to provide sufficient information as required by s 136(2)(a) but simply referred to “the time contemplated by the Act”.

77. It is clearly the intention of s 136(2)(a) to ensure that a notice given under that provision puts the resident on notice that in not less than 12 months from the date the notice is given the operator intends to make application to the Tribunal to terminate the residence contract.

78. In my view use of the words “at the time contemplated by the Act” does not properly and sufficiently notify the resident in accordance with the section. The resident, faced with such a notice would necessarily have to refer to the Act (presumably the Retirement Villages Act 1999, although that is not specified) in order to know what the notice meant.

79. The respondents further argued that the notice given by the applicant on 23 November 2012 was not in a proper form. The RV Act s 131(2) requires that a notice of intention to apply to the Tribunal for orders for termination must be in the form provided by the Regulations. The RV Regulations at Schedule 1 Part 4 and at Regulation 55 provide a format for a notice of the kind required to be given under s 136(2)(a).

80. The form provided in the Regulations is a “multi-purpose” form normally used for 14 day notice. It is necessary for the purpose of a s 136(2)(a) notice to vary the form. I am satisfied the notice provided generally follows the wording of the Regulation and the amendments made do not breach the requirements of s 131(2) in any significant way.

81. However, for the reasons expressed above I am not satisfied the applicant has met its obligation under s 136(2)(a) to provide at least 12 months’ notice and accordingly the Tribunal has no power to make the orders sought for termination of the residence contracts

Has the operator obtained all necessary development consent to the proposed change of land usage?

82. The RV Act s 136(2)(b) provides that the Tribunal may not make an order terminating the residence contract unless satisfied that the development consent and any other necessary approvals to use the land for the other purpose have been obtained.

83. It was not disputed by the parties that the necessary development consent had been obtained by the applicant. A copy of the “Notice of Determination of a Development Application” issued by Willoughby Council and dated 14 February 2014 was filed with each application.

84. There was no evidence that “any other approvals” were required.

85. I am satisfied the applicant has met its obligation under s 136(2)(b).

Did the operator obtain or make available for each resident alternate accommodation that met the criteria set out in s 136(2)(c)(i)?

86. The next condition precedent to the Tribunal making an order for termination under s 136 is set out at s 136(2)(c)(i) and (ii)

(2) However, the Tribunal is not to make an order terminating a residence contract under this section unless it is also satisfied that:

(a) the operator has given the resident at least 12 months' written notice of the operator's intention to make an application under this section, and

(b) development consent and any other necessary approvals to carry out the works or use the land for the other purpose have been obtained, and

(c) the operator has obtained (or made available) for the resident alternative accommodation:

(i) that is of approximately the same standard as, and requires no greater financial outlay on the part of the resident than, the residential premises the subject of the residence contract, and

(ii) that is acceptable to the resident or reasonably ought to be acceptable to the resident.

87. The applicant’s evidence was that at the time the applicant entered into the contract to purchase Fair Haven there were 21 residents remaining under residence contracts and prior to making these applications 12 residents had re-located.

88. The applicant had engaged the services of Mr Longbottom and Mr Michaelian to assist residents to re-locate. It is noted Mr Longbottom gave evidence that he and Mr Michaelian had been engaged in October 2012. A concerted effort was made from that time on to obtain information about alternate accommodation both locally and further afield.

89. Mr Michaelian and Mr Longbottom gave evidence that they had written to 155 named retirement villages as close as Lane Cove and Roseville and as far afield as Camden in an endeavour to find alternate accommodation. In addition (undisclosed) offers of compensation had been made to assist some residents to relocate.

90. Information about availability and cost of alternate accommodation was promptly communicated to the residents by meetings involving many, if not all of the residents, meetings and conversations with individual residents, letters, telephone conversations and in a newsletter.

91. It was the applicant’s submission that alternative accommodation that was approximately the same standard and that required no greater financial outlay on the part of the residents was identified.

92. The applicant submitted that the provisions of s 136(2)(c)(i) require only that the operator has obtained or made available alternate accommodation. It does not require the operator to negotiate for the resident or to attend to execution of any contract relating to the alternate accommodation and there is no obligation that the alternate accommodation be a retirement village.

93. The applicant, it was submitted, had exceeded the requirements of s 136(2)(c) by dedicating resources to assisting the respondents to re-locate, offering financial assistance, organising removalists and other logistical support, meeting with residents to determine their needs, driving the residents to inspect alternate accommodation and assisting the residents with completing forms and getting onto waiting lists.

94. The respondents’ submission was the actions employed by the applicant which included provision by the applicant of a “generic” letter to all residents, a letter to individual residents, telephone calls, communication with third parties, an offer to more than one resident of one particular residence and meetings with residents did not fulfil the obligation to make available the alternate accommodation.

87. I am satisfied the evidence supports the proposition that the applicant, through its employed consultants and otherwise, went to considerable lengths to try to fulfil its obligations under s 136(2)(c)(i).

88. Whilst I accept the argument of the applicant that the obligation does not extend to negotiating a particular contract on behalf of the resident I am satisfied the concept of providing or making available the alternate accommodation involves something more than providing a list of possibilities, none of which may be immediately available.

89. The evidence of Mr Michaelian was that although in some cases the applicant had provided financial assistance to enable a resident to take up alternate accommodation, no general open offer of specific financial assistance was made to the residents. The residents were therefore not aware, when they approached a prospective alterative, whether any assistance would be forthcoming. It was therefore necessary for them to assess the comparative financial outlay by direct comparison with their current rental.

90. Some of the suggested alternate accommodation required a substantial ingoings contribution by residents (some in the tens of thousands of dollars and some over $100,000). Each of the residents of Fair Haven had paid only $500 ingoing contribution. Mr Michaelian’s evidence was that the residents were advised that the applicant would not pay any ingoing contribution. It follows that any alternate accommodation suggested by the applicant that involved an ingoing contribution of more than $500 would fall foul of the requirement that there be no greater financial outlay than for the current residence.

91. Further, Mr Michaelian gave unequivocal evidence that he and Mr Longbottom were unable to locate any alternate accommodation that was not at a greater financial outlay.

92. Mr Longbottom in his evidence acknowledged that although his brief was to find alternate accommodation of approximately the same standard as that currently enjoyed by the residents he had not inspected any of the respondents’ residences, with one exception. He also acknowledged that despite the ingoings charges and rentals of the proposed alternate accommodation he had not made any enquiry as to the capacity of the respondents to pay those charges.

93. In response to directions made by the Tribunal on 9 July 2014 the applicant filed a schedule of alternate accommodation. The purpose of requiring that schedule to be provided was so that a specific alternate accommodation that met the requirements of s 136(2)(c)(i) could be identified as having been provided or made available to each of the respondents.

94. A schedule was provided. I have examined that schedule in respect of each of the respondents.

95. In regard to Ms Wilson, it was said that on 42 separate occasions alternate accommodation had been made available to Ms Wilson. Of those 42 occasions 13 had been made in a general way by way of a newsletter sent to all residents and one had not been made to Ms Wilson at all. All those alternatives that required an ingoing contribution clearly fall foul of the requirement that the accommodation be no more expensive than the current accommodation. Of those that were rental accommodation only six provided an actual rental figure and of those, all were for a rental of more than the rent currently paid by Ms Wilson.

96. A similar analysis was made in respect of each of the other respondents.

97. Putting aside the issue of whether or not the applicant, by communicating to the respondents possible alternate accommodation in the way it has done, has satisfied the requirement of s 136(2)(c) to “obtain or make available”, I am not satisfied that any of the alternate accommodation meets the requirement that it require no greater financial outlay on the part of each of the respondents than each of them is paying under their current residence contract.

98. For these reasons I am not satisfied the applicant has met its obligation under s 136(2)(c)(i)

Did any of the respondents unreasonably decline to accept the alternate accommodation?

107. Much of the evidence and submissions by the parties went to the issue of whether or not the respondents had acted reasonably in not accepting alternate accommodation. However, in view of the determination that the applicant has not complied with s 136(2)(c)(i) that is now an irrelevant consideration.

Are any of the respondents entitled to compensation?

108. In view of the decision the issue does not arise.

CONCLUSION

109. The Tribunal may make orders pursuant to s 136 to terminate the residence contract but only (on these applications) if satisfied that it is appropriate that the land on which the village is situated should be used for a purpose other than a retirement village.

110. For the reasons expressed above I am not satisfied that it is appropriate and as a result all six applications must fail.

111. Even if I am wrong on that point and it is appropriate to change the land use the Tribunal is prevented from doing so because

1. The applicant has failed to give the respondents at least 12 months’ written notice in accordance with s 136(2)(a), and

2. The alternate accommodation said to have been obtained or made available for each of the respondents does not satisfy the requirement of s 136(2)(c)(i) that it require no greater financial outlay on the part of the resident than the residential premises the subject of the residence contract.

112. For these reasons each of the applications is dismissed.

COSTS

113. The parties agreed that none would seek costs.

Jeffery Smith

Senior Member

Civil and Administrative Tribunal of New South Wales

25 November 2014

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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: 05 February 2015