Pomroy and Ors v Emmetlow Pty Ltd
[2012] QCAT 492
•9 October 2012
| CITATION: | Pomroy and Ors v Emmetlow Pty Ltd [2012] QCAT 492 |
| PARTIES: | Gregory Pomroy Malcolm Thomas Stigwood Arnold Reginald Taylor Ilma Anne Taylor Colleen Pelling Aileen Rita Bennett John Greaves Ella Clegg Robbins Raye Shirley Mawhinney Marlene June Lawrence Peter Ron Langdon Norma Isabella Brown Thomas William Gant Doreen Vance Wayne William Adcock Grace Appleton Christine Ann Capper Patrick Mitchell Patrice Biasse Eveline Biasse Margaret Tebb Trevor Archibald Valentine Aurora Jolliffe Gary Walter Lucadou-Wells Delfine Valentine (Applicants) |
| v | |
| Emmetlow Pty Ltd ACN 010408429 (Respondent) |
| APPLICATION NUMBER: | OCL095-11 |
| MATTER TYPE: | Other civil dispute matters |
| HEARING DATE: | On the papers |
| DECISION OF: | Fiona Fitzpatrick, Member |
| DELIVERED ON: | 9 October 2012 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. The application to amend the definition of “utility” in the Act to include “telephone” is dismissed. 2. At the same time as the park owner gives home owners their utility bills, it must make copies of its supplier’s utility invoices available for inspection at the park office, provide a copy to the home owner’s association, and post a copy on the park notice board free of charge. Individual owners are entitled to obtain their own copy either from the home owners’ association or from the park owner, without a fee, but on payment of a photocopying charge calculated at commercial rates. |
| CATCHWORDS: | Utility charging in manufactured home park – “utility” Manufactured Homes (Residential Parks) Act 2003, ss 4, 25, 92, 99, 99A, 73 Bates v Seachange (Land) Pty Ltd as trustee [2012] QCAT 289 |
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 dispute
Emmetlow Pty Ltd, ACN 010408429, is the owner of Colonial Village, a mixed-use tourist park and manufactured home village at 351 Beams Road Taigum. Emmetlow opened Colonial Village in January 1986 and has operated the park since then. The first applicant, Mr Pomroy, has been a resident of Colonial Village since 21 September 2004.
Mr Pomroy and 24 other home owners have applied to the Tribunal for rulings on:
a) whether utility charges levied on home owners in Colonial Village comply with s 99A of the Manufactured Homes (Residential Parks) Act 2003 (“the Act”);
b) whether the park owner can charge pensioners for processing utility rebates;
c) whether the home owners are entitled to copies of tax invoices for each of the utilities paid by the park owner; and
d) “directions”, that “telephone” be included as a utility under the definition of “utility” in the dictionary to the Act.
The park owner has sought orders that the applications be dismissed.
Application of the utility charging provisions
Sections 99 and 99A do not apply to all Colonial Village residents. They regulate how the park owner can charge home owners for utilities. They apply to home owners who:
a) are parties to site agreement in a manufactured home park or mixed use park; and
b) purchase utilities from the park owner under an “on supply” arrangement.
They do not apply to:
a) caravan residents; or
b) tenants who rent a manufactured home.
The park owner does not have a legislative obligation to follow the charging rules for these residents. However it may choose to adopt them as fair trading guidelines and standardise utility charging in Colonial Village.
The focus of this decision is s 99A, which affects home owners who pay separately for utilities, in addition to their site rent.
Definition of “utility”
The utility charging regime only applies to utilities which fall within the definition of a “utility” in the Act. The schedule to the Act defines a “utility” as any of the following services—
i)electricity;
ii)gas;
iii)sewerage;
iv)water;[1]
[1] Includes waste water: Bates v Seachange (Land) Pty Ltd as trustee [2012] QCAT 289.
v)another service prescribed under a regulation.
The utility charging provisions do not apply to telephone services, as they do not qualify as a “utility” for the purposes of the Act.
Jurisdiction
The Act gives the Tribunal jurisdiction over “site agreement disputes”, including disputes between the parties to a site agreement about the parties’ rights and obligations under the agreement or this Act. The tribunal may make any order it considers appropriate to resolve these disputes.[2]
[2] Manufactured Homes (Residential Parks) Act 2003, s 140.
The home owners and the park owner disagree about how the utility charging provisions of the Act should be interpreted and about how they operate in practice in manufactured home parks. There is a dispute between the parties about their rights and obligations under the Act.
Is this dispute between “parties to a site agreement”?
The park owner says that there are three versions of site agreements in operation at the park.[3] Agreement between a park owner and a home owner on site rent, the positioning of a manufactured home; and the home owner’s use of the park’s common areas and communal facilities is sufficient to establish a “site agreement.”[4]I am satisfied that most of the applicants are parties to a site agreement.
[3] Page 28 park owner’s submissions.
[4] Manufactured Homes (Residential Parks) Act 2003, s 14.
The legislation
The applicant home owners have asked the Tribunal to rule on whether utility charges in Colonial Village comply with the utility charging provisions, and in particular:
a) what types of utility charges can be levied as a separate charge under s 99A; and
b) whether the park owner’s method of calculating or assessing separate utility charges complies with s 99A.
Part 14 of the Act is headed “Residential park operations”. It sets out the “basic responsibilities” of park owners and home owners. Division 2 sets out home owners’ obligations, including their obligation under s 99 to pay separately for utilities if certain preconditions are satisfied. Although s 99A is self contained and does not depend on s 99 for its meaning, s 99 warrants a brief mention to put s 99A in context.
S 99 “Separate payment by home owner for use of utility at site
(1) This section applies if, under a site agreement, the home owner is required to pay the park owner for the use by the home owner of a utility at the site.
(2) The home owner may be required to pay for the use only if the use is separately measured or metered.”
In 2011, the Act was amended and s 99A was added to s 99.[5] Section 99A sets out park owners’ responsibilities when charging separately for utilities.[6]
S 99A “Separate charge by park owner not to be more than cost of supply for use of utility
(1) This section applies if—
(a) under a site agreement, the home owner is required to pay the park owner for the use by the home owner of a utility at the site; and
(b) the use is separately measured or metered.
(2) The park owner must not charge the home owner an amount for the use of a utility that is more than the amount charged by the relevant supply authority for the quantity of the service supplied to, or used at, the site. Maximum penalty—20 penalty units.”
[5]Section 99A introduced by Manufactured Homes (Residential Parks) Amendment Bill 2010.
[6]Sections 99 and 99A are co located in the part of the Act dealing with home owners’ obligations, but 99A is about park owners’ obligations.
Utility charging provisions to be given their “natural and ordinary meaning”
The first step in statutory interpretation is to consider the “natural and ordinary meaning” of a provision, having regard to
a) the purpose of the Act; and
b) its legislative context.[7]
[7] Acts Interpretation Act 1954, s 14B.
The purpose of the Act
The “main object” of the Act is to “regulate, and promote fair trading practices in residential parks—
a) to protect home owners from unfair business practices; and
b) to enable home owners, and prospective home owners, to make informed choices by being fully aware of their rights and responsibilities in their relationship with park owners.”
The Act promotes ”fair trading practices”, for example by:
a) “declaring particular rights and obligations of the park owner, and home owners, for a residential park”; and
b) “facilitating the disclosure of information about a residential park, and this Act, to a prospective home owner for a site”.
Other “important objects” of the Act include:
a) “encouraging the continued growth and viability of the residential park industry in the State”;
b) “providing a clear regulatory framework to ensure certainty for the residential park industry in planning for future expansion”.[8]
[8] Manufactured Homes (Residential Parks) Act 2003, s 4.
The latter objects recognise the contribution manufactured home parks make to the provision of low cost housing to vulnerable Queenslanders.[9] However, they are subject to the main objects of the Act which make it clear that the commercial viability of manufactured homes parks must be based on fair business practices.
[9] Explanatory notes Manufactured Homes (Residential Parks) Bill 2003, p.2.
The purpose of section 99A
The explanatory notes for s 99A say that it:
a) “clarifies that park owners must not charge home owners more than the actual cost of providing a utility service (for example, water or electricity) to the home owner where the home owner’s use of the utility service is separately measured and metered”[10]
b) imposes a “...maximum penalty of 20 penalty units if the park owner charges the home owner an amount for the use of a utility that is more than the amount charged by the relevant supply authority when a home owner is required to pay separately for the supply of the utility. The maximum penalty of 20 penalty units in this instance is considered appropriate to provide a disincentive penalty amount higher than the potential profit to be made from charging higher fees for the on-supply of utilities”.[11]
c) Clause 29 inserts new section 99A which complements section 99....New section 99A provides that where a home owner’s use of a utility is separately measured and charged for (and not paid for as a component of site rent) the park owner must not charge the home owner more than the amount charged by the relevant supply authority. This amendment reflects the Residential Tenancies and Rooming Accommodation Act 2008 which provides that the tenant of a movable dwelling premises must not be required to pay an amount for the outgoings, for a service charge, that is more than the amount charged by the relevant supply authority for the quantity of the thing, or the service or facility, supplied to, or used at, the premises.[12]
[10]Explanatory notes, Manufactured Homes (Residential Parks) Amendment Bill 2010, p.13.
[11]Explanatory notes, Manufactured Homes (Residential Parks) Amendment Bill 2010, p.29.
[12]Explanatory notes, Manufactured Homes (Residential Parks) Amendment Bill 2010, p.39.
Section 99A is a remedial provision. The mischief it seeks to remedy is profit making by park owners, where the profit is part of a separate utility charge to a home owner.
The parties’ submissions
The home owners say that “we only need to look to s 4 of the Act where it plainly sets out the objects of the Act (including) “to protect home owners from unfair business practices.”[13] The home owners consider that “service fees, connection fees and excessive utility fees charged by the respondent, are prohibited by s 99A.”[14]
[13] Para 25 page 7 of the applicants’ submissions.
[14] Para 40 page 9 of the applicants’ submissions.
The home owners support the interpretation given to s 99A by the Director General of the Department of Communities (the Department) in an undated letter sent to “numerous park owners.”[15] The park owner says it did not receive this letter until November 2011, approximately 8 months after s 99A commenced. I agree with the park owner that this letter is “not a statement of the Government’s intention at the time s 99A was enacted, but is merely a subsequent statement as to what the Department thinks s99A means. It should be disregarded for the purposes of statutory interpretation.”[16]The letter is only relevant to the extent that the home owners have expressly adopted the Department’s interpretation of s 99A to explain how they think it should operate. In any event, the Department’s letter is of limited assistance in determining the meaning of the utility charging provisions. While it outlines its views on how the s 99A should operate, it does not explain how it arrived at its interpretation.
[15] Annexure CV3 to the applicants’ submissions.
[16] Para 46 page 12 of respondent’s submissions.
The park owner considers that the meaning of s 99A is unclear and that the explanatory notes do not clarify its “meaning, purpose or intention”.[17] It says that the introduction of the section was unexpected, which has led to “impracticalities and impossibilities”[18] in the application of the section to the on-supply of utilities in manufactured home parks.
[17]Para 36 page 10 of respondent’s submissions.
[18] Para 32 page 9 of respondent’s submissions.
The park owner’s “fallback argument” is that if the meaning of s 99A can be discerned, the section only caps separate charges for the “quantity” of the utility service supplied to or used at the home owner’s site. It does not “regulate fees or charges that relate to the supply of a utility service generally”[19] (I will refer to these latter charges as “ancillary” utility charges.)
[19] Para 5 page 3 of respondent’s submissions.
It argues that s 99A does not:
a) prevent park owners from charging home owners separately for “ancillary” charges; or
b) restrict the amount of these ancillary charges.
For example the park owner argues that its practice of charging owners a service fee based on the amount prescribed in the ready reckoner under the Electricity Act 1994[20] is “..valid and consistent with s 99A of the Act.” It says that the service fee is charged to home owners “for their use of a utility generally during the relevant period”. It argues that this charge “..does not relate to the quantity of electricity used ...but only to the general provision of the service to home owners.”[21]
[20] Tariff 11.
[21] Para 74 page 20 of respondent’s submissions.
The more detailed submissions from the park owner will be addressed as they become relevant.
Reasons
The section headings are the key to the purpose and role of ss 99 and 99A in the legislative scheme.[22]
Section 99 is headed “Separate payment by home owner for use of utility at site”[23]
[22] Section headings are part of the Act: Acts Interpretation Act 1954, s 14(2).
[23] Emphasis added.
“Separate payment”
The words “separate payment” are not defined in the Act. However, it is evident that they refer to payments which are separate from, (or in addition to) site rent.
“for use of utility at the site”
Section 99 applies to separate payments for the “use of the utility at the site”. The words “at the site” in the section heading, and the requirement for separate measuring or metering which underpins s 99, indicate that the purpose of the section is to establish preconditions which must be satisfied before a home owner is obliged to pay separately for their consumption of a utility at their site.
When can home owners be required to “pay separately” for their utility consumption?
Section 99(1) says that the section only applies
a) if a home owner is required to pay the park owner for the use of a utility at their site “under a site agreement”.
b) “if the (utility) use is separately measured or metered.”
Section 99A is headed “Separate charge” by park owner not to be more than cost of supply for use of utility”[24]
[24] Emphasis added.
“Separate charge”
The words “separate charge” are not defined in the Act. However, the explanatory notes make it clear that they refer to utility charges which are “not paid for as a component of site rent.” In other words, park owners are only obliged to comply with s 99A when they charge “separately” for utilities. It does not affect how and what park owners can charge for utilities when those charges form part of the site rent.
“Use of utility”
The meaning of this term will be considered later.
When can a park owner “charge separately” for the “use of a utility”?
The preconditions to the application of s 99A are effectively the same as the preconditions to the application of s 99. It applies if:
a) under a site agreement, the home owner is required to pay the park owner for the use by the home owner of a utility at the site; and
b) the use is separately measured or metered.
Section 99A(2)
Section 99A(2) is the operative part of the section and the focus of the dispute between the parties. When s 99A(2) and the section heading are read together, s 99A(2) should be interpreted as though it reads:
“The park owner must not (“separately”) charge the home owner an amount for the use of a utility that is more than the amount charged by the relevant supply authority for the quantity of the service supplied to, or used at, the site. Maximum penalty—20 penalty units”
The park owner argues that s 99A(2) means that the park owner must not charge the home owner an amount for the quantity of the service supplied to, or used at, the site that is more than the amount charged by the relevant supply authority.In other words, it argues that the cap on utility charging in s 99A(2) only applies to separate charges for the quantity of the service supplied to, or used at, the site. However, this is not what s 99A(2) says.
Meaning of section 99A(2)
Section 99A(2) refers to charges levied by the:
a) park owner; and
b) “relevant supply authority”
in the same sentence.
The viability of the park owner’s argument depends on which of these entities is charging “for the quantity of the service supplied to, or used at, the site” in the context of the section. To arrive at the park owner’s interpretation, the entity charging for the “quantity” of the service would have to be the park owner. However, this requires the Tribunal to give the words of s 99A(2) a strained construction, which is at odds with their natural and ordinary meaning. In order for the park owner’s reading of the section to be arguable, the subsection should stand alone and still make sense with the words “more than the amount charged by the relevant supply authority” removed, and it does not.
The “relevant supply authority” is charging for the quantity of the service in s 99A(2). The park owner is charging for the “use of a utility”. The following breakdown of s 99A(2) highlights its natural and ordinary meaning:
a) “The park owner must not charge the home owner an amount for the use of a utility that is
b) more than the amount charged by the relevant supply authority for the quantity of the service supplied to, or used at, the site.”[25]
[25] Emphasis added.
Section 99A (2) regulates separate charges for the “use of a utility”
“use of a utility” / “use of the utility at the site”
“A court construing a statutory provision must strive to give meaning to every word of the provision. ..... no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent".[26]
[26]Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355; McHugh, Gummow, Kirby and Hayne JJ.
The terms “use of a utility” and “use of the utility at the site” in s 99A(2) refer to different types of utility charges. This methodology makes both terms “useful and pertinent” to the meaning of s 99A.
Charges for “the use of a utility” are broad enough to cover a wide range of costs and outlays incurred by park owners in the course of on supplying utilities. As the park owner says in its submissions, charges for the use of a utility “are not restricted to the quantity of (the utility) used ...but to the general provision of the service to home owners, such as service fees, connection fees, water access fees etc (“ancillary charges”)”.
Charges for the “use of the utility at the site” have a more limited application to charges for utility consumption.[27]
[27]The words “use (by the home owner) of the utility at the site” appear in s 99A(1), however that part of the section is self contained and its purpose is to clarify when the section applies, not how it functions.
This distinction is significant because the broader the definition of “use of a utility”, the greater the range of utility charges captured and limited by s 99A.
The practical implication of this difference in terminology is that s 99A(2) prohibits separate utility charges, unless they are charges for the “quantity of the service supplied to, or used at, the home owner’s site.” Section 99A outlaws separate charges for any infrastructure, service fees or administrative costs related to the supply of a utility.
Does the section heading support this interpretation of s 99A(2)?
“Separate charge by park owner not to be more than cost of supply for use of utility”
“Cost of supply”
The term “cost of supply” is not defined. However, it refers to costs incurred by park owners as on-suppliers of utilities to home owners. It introduces the concept of limiting the separate charge to what it costs the park owner to supply the utility. On their own, the words are broad enough to cover a range of ancillary costs incurred by park owners in supplying utilities to home owners. However the words of s 99A(2) demand that the term “cost of supply” must equate to “the amount charged by the relevant supply authority for the quantity of the service supplied to, or used at, the site.”
This distinction between the terms “use of a utility” and “use of the utility at the site” leads to a loose end because of the words “use of utility” at the end of the heading to s 99A. Again, there are two types of charges referred to in the heading, namely charges by both the park owner and the relevant supply authority. The body of the section states plainly that it is the park owner who is charging for the “use of the utility”. The heading should be read as though it says “separate charge by park owner for use of a utility not to be more than cost of supply.” It can be read this way as the sentence still makes sense with the words “not to be more than the cost of supply” removed. The alternative construction, that the relevant supply authority is charging for the use of the utility, is at odds with s 99A(2).
Meaning of “the amount charged by the relevant supply authority for the quantity of the service supplied to, or used at, the site”
Separate utility charges for the “quantity of the service supplied to, or used at, the (home owner’s) site” comply with s 99A(2) if:
a) the park owner has been charged for the utility by a “relevant supply authority” for the purpose of on supply to home owners; and
b) the charges to the home owner do not exceed the amount charged by the relevant supply authority for the quantity of the service supplied to, or used at, the site.
In other words, separate utility charges must be calculated using the following formula:
The quantity of the utility used at the site (multiplied by) the amount the park owner has been charged by the utility supplier for that quantity of the utility.
Is this meaning of 99A consistent with the other utility charging provisions in the Act?
“The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute.....A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals.[28]
[28]Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355; McHugh, Gummow, Kirby and Hayne JJ.
Utility costs in site rent – s 73
The parties do not refer to s 73 of the Act, however it warrants consideration as it sets out the circumstances in which utility charges must be removed from site rent and charged separately under s 99A. The sections must give effect to “harmonious goals” if the utility charging provisions are to function effectively. A consideration of s 73 allows s 99A to be read in context.
The Act regulates how site rent can be varied.[29] Section 73 is in the part of the Act which deals with “Reducing site rent”.[30] It is headed “utility cost in site rent” and the relevant parts are as follows:
[29]Division 4.
[30] Part 11.
(1) This section applies if—
(a) the use by the home owner under a site agreement of a utility at the site is not separately measured or metered; and
(b) .... (a change event) happens—
(i) the home owner’s use of the utility becomes separately measured or metered and the cost of the use becomes payable by the home owner;
(ii) .....
(2) The park owner must within 14 days ... give the home owner ...a utility cost notice stating
(a) the utility cost factored into the site rent payable under the agreement and how the utility cost has been worked out;.....Maximum penalty—10 penalty units.
(3) The site rent payable from the day the change event happens ....is the site rent payable immediately before the change event day, reduced by the utility cost stated in the utility cost notice.
(4) Any overpayment of site rent, relating to the utility cost, from the change event day must be refunded by the park owner to the home owner within 14 days after the home owner received the utility cost notice. Maximum penalty—10 penalty units.
(5) An amount payable ..... under subsection (4) is recoverable as a debt.
Section 73 introduces the “utility cost”, which is defined as:
“a cost, for a utility supplied to or used at a site in a residential park, that the park owner incorporates into the site rent payable under a site agreement for the site, whether or not the cost is separately identified in the agreement.”
The concept of “utility cost” is peculiar to this section, so the definition does not provide any direct clarification of s 99A. However it does provide indirect support for my interpretation of s 99A.
When does s 73 apply?
Whereas sections 99 and 99A regulate separate charges for utilities, s 73 comes into operation where a “utility cost” is:
a) payable under a site agreement; and
b) incorporated into site rent.
It says that as soon as:
a) a manufactured home site becomes “separately measured or metered” to enable separate utility charges, and
b) the cost of consumption of the utility becomes (separately) payable by the home owner;
the park owner must identify and remove any utility cost from the site rent.
The separate measuring or metering which triggers s 73 and the words “cost, for a utility supplied to or used at a site” in the definition of “utility cost” indicate that the section is concerned with charges for the consumption of a utility. So the site rent must be reduced by the amount which represents the cost of the home owner’s utility consumption. In other words, the park owner cannot “double dip” by charging both the new separate charge for utility consumption and the original charge for utility consumption incorporated into the site rent.
When the utility cost is removed from the site rent it can be charged separately under s 99A and is subject to the charging rules set out in that section.
As s 73 does not apply to “ancillary” utility charges, park owners can continue to include these costs in the site rent, even when utility consumption at a site is metered or measured. This leads to a fair result for the park owner. If the definition of “utility cost” had been broader:
a) on metering, the park owner would have been obliged to remove all utility charges from the site rent, including infrastructure charges, service fees or administrative costs; and
b) given that those costs cannot be recovered as a separate charge, park owners would not have an avenue for recovering these charges.
In summary, when the distinction between the terms “use of a utility” and “use of the utility at the site” is applied to s 73, it assumes a meaning that aligns with and complements the operation of s 99A.
The way in which s 73 operates is compatible with the finding that charges for utility consumption are the only utility charges which home owners can be required to pay as a separate charge over and above the site rent.
The park owner maintains that electricity charges should be calculated according to the rules in the Electricity Act 1994, and are not caught by s 99A
“S 99A of the Act confirms the existing position under the Electricity Act 1994 (Qld), which permits park owners to use the Queensland Government’s ‘ready reckoner’, and the tariff rate and the service fee set out therein, to charge home owners for electricity.”[31]
[31] Para 5 page 3 of respondent’s submissions.
When calculating home owners’ electricity charges the park owner uses the notional rates prescribed as “maximum charge rates” in the ready reckoner. It seems that use of the reckoner is widespread in the industry despite the commencement of s 99A on 1 March 2011.
Firstly, the park owner says that the meaning of “relevant supply authority” in s 99A(2) is unclear and that the explanatory notes do not provide any guidance. It points out that the Electricity Act 1994 uses different words to s 99A when referring to a supplier of electricity. The park owner examines the words used in sections 167 and 170 of the Residential Tenancies and Rooming Accommodation Act 2008, namely “relevant supply authority” and “supplying entity.” It concludes that an “authority” and a “retail entity” are “clearly two very different organisations”. After considering the dictionary definition of “authority” it concludes the meaning of “relevant supply authority” in the context of electricity means “the relevant Government Department and authority which issues the ..ready reckoner …under the Electricity Act.”[32] It argues that s 99A does not prevent park owners from continuing to use the reckoner issued by the Department as the “relevant supply authority”, as the basis for tariff rates for electricity.
[32] Para 42 page 11 of respondent’s submissions.
The plain meaning of “relevant supply authority” outlined earlier is evident from its context and it is not necessary to resort to other legislation to determine its meaning. In any event, the Department is not an entity which “charges” for electricity. It merely prescribes maximum rates which can be charged by on-suppliers of electricity.
The park owner goes on to argue that neither s 99A nor the explanatory notes give any indication as “to whom the amount is charged by the relevant supply authority…Is it the park owner or the home owner?” Again, it compares s 99A with the legislative scheme in ss 167 and 170 of the Residential Tenancies and Rooming Accommodation Act 2008, and concludes that “from the use of different words, Parliament clearly intended for the meaning of s 170 of the RTRAA to be different to s 99A and s 167 of the RTRAA.” It argues that in the absence of specific words in s 99A, the person to whom the amount is charged by the relevant supply authority can only be the home owner.[33]
[33] Para 43 page 12 of respondent’s submissions.
Although the words of s 99A(2) can be manipulated to contemplate the park owner’s preferred meaning, it is not a convincing argument. The plain words and context of s 99A(1)(a) indicate that the home owner is required to pay the park owner for the on-supply of a utility. Section 99A is targeting those charges, not charges by the relevant supply authority. It is unnecessary to resort to other legislation to clarify its meaning.
Finally, the park owner says that “Although using different terminology than S 99A… the meaning of the Electricity Act provisions is in practical terms, the same. That is, the on-supplier cannot charge for the usage of electricity at a rate any higher than the home owner would have been charged if the home owner obtained his/her electricity direct… from the retail entity…That rate equates to the maximum rate ...set out in the Tariff 11 ready reckoner ”[34]
[34] Para 42 page 11 of respondent’s submissions.
Section 99A purports to regulate separate charges for electricity in manufactured homes parks, as “electricity” is defined as a utility in the schedule.
After comparing the rules for electricity charging under the Act and the rules under the Electricity Act 1994, I do not agree that s 99A “confirms the existing position under the Electricity Act”.
Section 99A introduced specific rules for the on supply of electricity in manufactured homes parks, which differ from the requirements in the Electricity Act 1994 in two ways:
a) it seems that under the Electricity Act 1994, on-supply does not have to be metered; and
b) the formula for determining the maximum charge for metered electricity consumption under the Electricity Act 1994 is different to the formula in the Act for determining the maximum amount of any separate charge.
The effect of the park owner’s submission would be that the park owner does not have to pass on the “cost of supply” of electricity as required by s 99A, but can continue to charge up to the maximum tariff sanctioned by the ready reckoner.
Section 99A is firmly based on the amount the supplier of electricity actually charges the park owner as the on-supplier. This bears little resemblance to the notional amount prescribed under the Electricity Act 1994. The Electricity Act 1994 may regulate the on-supply of electricity in Queensland generally, however in manufactured home parks, the “maximum charge” provisions of the Electricity Act 1994 regime are displaced by the more recent and more specific maximum charge provisions in s 99A, to the extent of any inconsistency.
Section 99A prohibits the use of ready reckoners to calculate separate utility charges. The park owner must use the “cost of supply” formula in s 99A.
Does this interpretation of s 99A give rise to numerous practical impossibilities, problems and adverse effects in relation to electricity tariffs, such that Parliament could not have intended that it should be interpreted in this manner?
The park owner says that if s 99A requires all utility tariffs to be based on the amount actually charged by the supplier of the utility, this interpretation:
“..would give rise to “adverse consequences” for both park and home owners and would be impossible to comply with.[35]
[35] Heading to para 51 page 13 of respondent’s submissions.
Calculating tariff rate to be applied to the “quantity” of a utility consumed
The park owner has raised an important issue about how the s 99A(2) charging formula will operate in practice.
If a park owner pays a flat rate tariff for the supply of a utility with a view to on supply to home owners, the formula in s 99A(2) for calculating separate utility consumption charges is fairly straight forward.
Where the tariff fluctuates, the park owner is concerned that the calculations become more complex. “Section 99 requires a precise calculation of each owner’s liability to be made at the site as opposed to an average price being ascertained.“ and “if home owners ... use electricity in off peak times, they must obtain the benefit of those measures.”
The park owner is particularly concerned about how it should calculate electricity tariffs, which it says vary according to considerations such as time of use, peak demand, network charges and the need to accurately apportion a part of the costs to general usage areas and powered tourist sites.
The park owner is also concerned that s 99A obliges it to install “smart meters” to determine owners’ peak and off peak consumption, as standard meters only measure general consumption. It says the majority of parks do not have smart meters and the cost of installing them would cause significant detriment to park owners, if it was indirectly required by s 99A.
The park owner concludes that in light of the above arguments “it would therefore be impossible for park owners to strictly comply with s 99A and correctly calculate and pass on electricity charges to home owners”[36] and “no legislation should be read as imposing a duty impossible of performance…unless the language cannot be given any other meaning.”[37]
[36] Para 55 page 15 of respondent’s submissions.
[37] Hinton Demolitions Pty Ltd v Lower (no 2) [1971] 1 SASR 528, Wells J.
However it acknowledges that:
“the fact that a particular statutory provision is not of easy application, or that it admits of disputes in its application to the facts of particular cases, is not a reason for saying that it is so unworkable, that it should be, in effect, disregarded.”[38]
[38] Boxvale Holdings Pty Ltd v FCT (1989) 2 ATC 4, Wilcox J at 4931.
According to the park owner, the Department administering the Act has suggested that park owners adopt an “averaging calculation” when calculating the “cost of supply” in accordance with s 99A, as follows:
a) “Obtain the total bill for electricity to the park owner for the period;
b) Divide the amount of the total bill by the total quantity of electricity consumed, which results in a per kilowatt price; and
c) Apply that price to all metered points in the park.”
The park owner considers that this averaging calculation does not strictly meet its obligations under s 99A to pass on exactly what it pays the utility supplier for each home owner’s utility consumption.
There is no evidence from the Department to confirm their support of the “averaging” of utility charges to ascertain the applicable tariff rate under s 99A(2). In any event, the Tribunal must come to its own conclusions about whether this approach satisfies the requirements of s 99A.
Section 99A imposes a requirement for “separate measurement or metering” in order to ascertain the “quantity” of the utility provided to each site. It does not direct park owners to use meters which can differentiate between on and off peak charges. It is not prescriptive about how the “amount charged by the relevant supply authority” should be assessed.
The explanatory notes say the purpose of s 99A is to prevent park owners making a profit on home owners’ utility consumption.[39] Provided the averaging calculation is based on the “cost of supply” as reflected in the park owner’s invoice from the utility supplier it will not be charging owners “more than the amount charged by the relevant supply authority”. The wording of s 99A is general enough to permit park owners to adopt the averaging calculation outlined above to determine the “amount charged by the relevant supply authority”.
[39]Explanatory notes, Manufactured Homes (Residential Parks) Amendment Bill 2010, p.29.
Averaging tariff costs across the park will give park owners access to a workable and cost effective way of passing on the amount charged by the relevant supply authority on to home owners.
Smart meters
The park owner raises the possibility of installing “smart meters.” There is no evidence before the Tribunal about the capabilities or cost of “smart meters”. Home owners and park owners can of course agree to install smart meters, and if they are installed park owners would be obliged to calculate utility consumption charges on the more detailed information these meters can supposedly provide. The Act requires park owners to pay for meters if they are being installed for the first time.[40] However it does not contain any provisions allocating responsibility for payment for replacement or upgraded meters. The cost of installing smart meters is a cost that could arguably be passed on to home owners through increases in site rent, so home owners may have to weigh up the cost against the potential savings in terms of off peak rates or other benefits.
[40]Section 92 Manufactured Homes (Residential Parks) Act 2003, Separate measurement or metering of supply of utility.
The park owner says s 99A will have adverse consequences for home owners which include:
a. “S 99A will not achieve its purpose as park owners may simply no longer purchase electricity for the purpose of on supplying it to home owners....‘If park owners …do not receive any recompense for these responsibilities …they will ..extricate themselves from such arrangements”[41]There is no basis for giving s 99A an artificial construction in anticipation of this response by park owners. Special term 3 in the Colonial Village site agreement contemplates that home owners can purchase utilities either direct from a supplier or through the park owner. It is clear however that park owners’ responsibilities in relation to a home owner under s 17 of the Act include “to the extent it is within the park owner’s control, to ensure the continuity of supply of a utility to the park and the site”.
b. “Park owners may not participate in the pensioner rebate scheme if they can’t use the ready reckoner, ..they will not wish to spend the time and effort to engage in this process for their home owners for no reward”.[42] Administrative fees for processing pensioner rebates do not appear to be specified in the ready reckoner. The park owner is currently charging this fee in addition to the service fee in the ready reckoner. This fee must be agreed between the parties.
c. “In some parks the tariff rate at which electricity is purchased is actually higher than the tariff rate in the ready reckoner, so those owners are better off by the use of the ready reckoner.”[43] If this can be established, it is an unfortunate and probably unintended consequence of the way the section is drafted. If a minority of home owners are better off under the ready reckoner, this does not mean that Parliament intended the majority of owners should pay more for electricity under the ready reckoner.
d. “Home owners would be confused by the line items that appear on electricity bills.”[44] The purpose of s 99A is to encourage transparency in utility charging in manufactured homes parks and to allow home owners to make informed decisions.
[41] Heading Para 56, para 57 page 15 of respondent’s submissions.
[42] Para 55 page 15 of respondent’s submissions.
[43] Para 60 page 16 of respondent’s submissions.
[44] Para 60 page 16 of respondent’s submissions.
The park owner says s 99A will have adverse consequences for park owners and that “the residential parks industry will be placed at risk” as park owners will not invest capital in electrical networks when they will not receive a return on their investment.[45]
[45] Para 61 page 17 of respondent’s submissions.
Section 99A does not prevent park owners recovering ancillary utility costs as part of the home owner’s site rent, either:
a. by agreement; or
b. pursuant to an order of the Tribunal, provided the increase satisfies the requirements of either s 69 or s 71 of the Act. (As s 71 predates s 99A, it does not expressly contemplate increases in site rent as a result of the operation of 99A.)
In other words, the purpose of s 99A is to prohibit “hidden” ancillary utility costs. The Act requires these costs to be charged “up front” as part of the site agreement, so that they are transparent.
How does s 99A apply in practice to utility charges in manufactured home parks?
In addition to electricity, it seems that in Colonial Village, the park owner charges separately for the following:
a. Water “tariffs”;
b. Access charges for water;
c. A charge for gas;
d. Rental of gas bottles;
e. Telephone charges; and
f. Telephone line rental charges.
Does section 99A restrict separate charges for water?
Section 99A governs separate charges for water, as “water” is included in the definition of a “utility” in the schedule to the Act. For the reasons outlined above, the park owner can only recover the amount it has paid the relevant supply authority for the quantity of water used by a home owner.
Water access charges
Some charges are obviously for the quantity of a utility, such as charges for quantity x tariff. Charges such as water access charges are harder to categorise, and fall into a grey area.
While s 99A is designed to prevent park owners making a profit on utility consumption charges, it does not appear to target legitimate outlays, provided they are charged by the relevant supply authority to supply a quantity of a utility to a home owner. An important object of the Act is “encouraging the continued growth and viability of the residential park industry in the State.”
[100]While water access charges are not strictly for the quantity of a utility, provided they must be paid to the supply authority to get the quantity of the utility to the site, (as opposed to an administrative charge imposed by the park owner), I consider that they can be recovered as a separate charge.
[101]This treatment of access charges accords with the Tribunal’s approach prior to the introduction of s 99A. When conducting an earlier review of a utility cost notice under s 74 of the Act the Tribunal has taken the view that:
“The 30% Council access charge is appropriately factored into the calculation, in my view, as this charge is imposed on all users of water that are separately measured or metered, and is not a cost to be borne by the respondent”[46]
[46]Residents Of Colonial Village v Emmetlow Pty Ltd [2007] QCCTMH 22 (22 August 2007).
Does section 99A restrict separate charges for gas and the rental of gas bottles?
[102]Gas” is defined as a “utility” in the schedule to the Act. However the park owner argues that s 99A does not regulate the way it charges for the on-supply of gas in gas bottles.[47] It considers that:
[47] Page 23-24 of respondent’s submissions.
a) the section only applies where home owners are forced to use (sic) a specific utility as they cannot obtain the utility “from other providers on better prices or terms than those offered by the park owner”.
b) s 99A only comes into operation “when a home owner is required to use(sic) the gas service offered by the respondent.”
[103]Section 99A applies if, as part of a site agreement, the home owner is required to pay the park owner for the use by the home owner of a utility at the site. The precondition to the application of the section is clearly a requirement to “pay” and not a requirement to “use” a utility.
[104]Even where a site agreement allows a home owner to purchase bottled gas direct from a supplier, when they elect to purchase the gas from the park owner they are ‘required to pay’ the park owner for the use of a utility. Special term 3 in the pro forma Colonial Village site agreement says that if gas is supplied by the park owner, the home owner must pay the gas charges within 7 days of being billed.
c) the home owner’s use of gas is not separately measured or metered in the sense that...a reticulated service is measured and metered, so s 99A does not apply
[105]Section 99A does not require bottled gas to be separately measured or metered in the same way as a reticulated service. A gas bottle qualifies as a separate “measure” of a utility.
d) the fee to purchase gas is not a charge which relates to ‘the quantity of the service supplied to, or used at, the site. The quantity acquired by the owner is a defined quantity that is not measured or metered. The fee for the contents of a gas bottle is a charge which is based on ‘the quantity of the service supplied to.... the site”.
[106]Gas bottles are priced according to the approximate quantity of the gas inside, and the price for different sized bottles varies accordingly.
e) There is no “relevant supply authority’ applicable to the gas service offered by the respondent.
[107]The “relevant supply authority” is the entity which supplies the gas to the park owner.
[108]Section 99A governs separate charges for gas, whether it be reticulated or sold by the bottle.
Rental fee for gas bottles
[109]The park owner argues that the rental fee for gas bottles is not a charge which relates to the quantity of the service supplied, so s 99A does not regulate these charges.
[110]Once again this fee cannot be levied separately unless it is a fee charged by the relevant supply authority. It is not clear whether the rental fee for gas bottles is in the form of a refundable deposit or whether it forms part of the cost of purchasing the gas. If it is the former it is cost neutral. If it is the latter, the rental fee is “an, amount charged by the relevant supply authority for the quantity of the service supplied to, or used at, the site,” as the rental fee is a component of the amount paid for a quantity of gas.
Telephone charges
[111]The definition of a “utility” in the Act does not include telephones, so s 99A does not regulate telephone charges. The Act does not require park owners to restrict their separate charges for telephones to “the amount charged by the relevant supply authority for the quantity of the service supplied to, or used at, the site”.
[112]The home owners have asked for an order that “telephone” be included as a utility under the definition of “utility” in the dictionary to the Act”. The Tribunal does not have the power to amend legislation.
Administration charges for claiming pensioner rebates on utilities
[113]The park owner claims pensioner rebates on rates, water and electricity charges for eligible home owners, in return for an administrative fee of $18.70 a year. Owners who not claim the rebates do not pay the fee on top of their utility charges, so the fee is not for the “use of a utility”. It is an administrative fee for claiming a rebate, so section 99A and the charging rules do not apply. It can be charged separately from site rent. In the absence of any statutory guidelines, this fee is a matter for agreement between the parties.
Are home owners entitled to copies of the park owner’s utility invoices?
[114]The Act does not require park owners to provide copies of utilities invoices to home owners. Nevertheless, one of the main objects of the Act is “to enable home owners.... to make informed choices by being fully aware of their rights and responsibilities in their relationship with park owners.” Park owners cannot satisfy themselves that s 99A is being complied with unless they have access to the invoices which are evidence of the “amount charged by the relevant supply authority for the quantity of the service supplied to, or used at, the site.”
[115]It seems reasonable to require that at the same time as it gives home owners their utility bills, the park owner should make copies of their supplier’s utility invoices available for inspection at the park office, provide a copy to the home owner’s association, and post a copy on the park notice board, free of charge.
[116]Individual owners are entitled to obtain their own copy either from the home owners’ association or from the park owner, without a fee, but on payment of a photocopying charge calculated at normal commercial rates.
Conclusion
[117]The respondent park owner’s obligations when charging for utilities depend on whether a home owner’s consumption of a utility is “separately measured and metered”.
Where the home owner’s consumption is measured or metered
[118]Section 99A allows the park owner to charge the home owner separately for utility consumption, provided the home owner is required to pay the park owner for the utility as a term of their site agreement. It also:
a. restricts separate utility charges by the park owner to charges for the quantity of the utility consumed by the home owner; and
b. requires park owners to calculate these separate utility consumption charges using the following formula:
The quantity of the utility used at the site (multiplied by) the amount the park owner has been charged by the utility supplier for that quantity of the utility.
[119]Section 99A prohibits the park owner from using “separate utility charges” to achieve a return on its investment in infrastructure or to recoup its costs of administering the on supply arrangement. However, the Act does not prevent the park owner from incorporating a component in the site rent to cover these “ancillary” costs, either:
a. by agreement with the home owner; or
b. provided the requirements of either s 69 or s 71 can be satisfied, pursuant to an order of the Tribunal.
Charging for utilities which are not separately measured or metered
[120]The park owner cannot charge separately for utilities and must incorporate both utility consumption and ancillary utility charges into the site rent, either:
a. by agreement with the home owner; or
b. pursuant to an order of the Tribunal.
[121]Utility charges in site rent are not subject to the charging rules in s 99A.
Miscellaneous issues
[122]The application to amend the definition of “utility” in the Act to include “telephone” is dismissed.
[123]Section 99A does not apply to fees for claiming pensioner rebates on utilities, as they are administrative charges, not utility charges.
[124]At the same time as the park owner gives home owners their utility bills, it must make copies of its supplier’s utility invoices available for inspection at the park office, provide a copy to the home owner’s association, and post a copy on the park notice board free of charge. Individual owners are entitled to obtain their own copy either from the home owners’ association or from the park owner, without a fee, but on payment of a photocopying charge calculated at commercial rates.
The home owners have sought refunds of separate utility charges which do not comply with s 99A
[125]It may be that the parties can reach agreement on refunds after considering this decision; however I have made directions for the future conduct of the matter in the event that agreement cannot be reached.
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