Sheahan v Coolah Tourist Park Pty Ltd

[2025] NSWSC 447

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:

Sheahan v Coolah Tourist Park Pty Ltd [2025] NSWSC 447

Hearing dates:

8 April 2025

Date of orders:

12 May 2025

Decision date:

12 May 2025

Jurisdiction:

Common Law

Before:

Basten AJ

Decision:

(1)   Allow the appeal and set aside the judgment and orders in the Local Court entered on 14 August 2024.

(2)   Dismiss the proceedings commenced in the Local Court by the defendant.

(3)   Order that the defendant pay the plaintiffs’ costs in the Local Court and in this Court.

Catchwords:

APPEALS – appeal jurisdiction – Supreme Court – appeal as of right from Local Court under Local Court Act 2007 (NSW), s 39 – appeal only on a question of law – notice of contention available under Uniform Civil Procedure Rules 2005 (NSW), r 50.11 – limits on fact-finding on appeal – whether defendant can agitate issue of fact on a notice of contention – scope of appeal under Supreme Court Act 1970 (NSW), s 75A – whether scope expanded by Uniform Civil Procedure Rules 2005 (NSW), r 50.16 – rules subject to statutory limit on jurisdiction

COURTS AND JUDGES – jurisdiction of Local Court – scope of “debt, demand or damage (whether liquidated or unliquidated)” in definition of “money claim” – power to grant equitable compensation or monetary relief – historical basis of jurisdiction - Local Court Act2007 (NSW), ss 29A, 30

CONTRACTS – novation – owner/operator of retirement village entered into village contracts with residents – land sold to new owner/operator – new operator did not enter into written contracts with existing residents – existing contracts not novated – contracts not enforceable against residents

EQUITY – unjust enrichment – unpaid site fees – quantum meruit – mistake not basis for claim of restitution – factual premise for claim not open on evidence

STATUTORY INTERPRETATION – ordinary meaning – absence of ambiguity – purposive construction – retirement villages legislation protective of vulnerable retirees – residence contracts to be enforceable “against” a new operator – whether court justified in reading that as a two-way provision – Retirement Villages Act 1999 (NSW), s 40

Legislation Cited:

Courts of Petty Sessions (Civil Claims) Act 1970 (NSW), s 12

Civil Procedure Act 2005 (NSW), s 9, Sch 1

Interpretation Act 1987 (NSW), ss 33, 34

Local Court Act 2007 (NSW), s 29A, 30, 39

Retirement Villages Act 1999 (NSW), ss 3, 4, 11, 40

Small Debts Recovery Act 1899 (NSW), s 7

Small Debts Recovery Act 1912 (NSW), s 7

Supreme Court Act 1970 (NSW), ss 68, 75A

Uniform Civil Procedure Rules 2005 (NSW), rr 50.11, 50.16

Cases Cited:

ALH Group Property Holdings Pty Ltd v Chief Commissioner of State Revenue (2012) 245 CLR 338; [2012] HCA 6

Amaca Pty Ltd v State of New South Wales [2003] HCA 44; 77 ALJR 1509

Carricks Ltd v Pizzaro (1995) 38 NSWLR 274

Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297; [1981] HCA 26

David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353; [1992] HCA 48

Fu Tian Fortune Pty Ltd v Park Cho Pty Ltd [2018] NSWCA 282

Ken Wolf Real Estate Pty Ltd v O'Halloran [2012] NSWSC 993

Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390; [2010] HCA 32

Lumbers v W Cook Builders Pty Ltd (in liq) (2008) 232 CLR 635; [2008] HCA 27

Melesco Manufacturing Pty Ltd v Thompson (1996) 40 NSWLR 525

Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221; [1987] HCA 5

Vezitis v McGeechan [1974] 1 NSWLR 718

Texts Cited:

American Law Institute, Restatement of the Law of Restitution (1937)

J D Heydon, M J Leeming, P G Turner, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies (5th ed, 2015, LexisNexis)

DC Pearce, Delegated Legislation in Australia (6th ed, 2023, LexisNexis)

Category:

Principal judgment

Parties:

John Daniel Sheahan (First Plaintiff)
James Terence James (Second Plaintiff)
David Arthur Darch (Third Plaintiff)
Sietske Elisabeth Brown (Fourth Plaintiff)
Christine Margaret McMillan (Fifth Plaintiff)
Geoffrey Ian McMillan (Sixth Plaintiff)

Coolah Tourist Park Pty Ltd (Defendant)

Representation:

Counsel:
T Bagley (Plaintiffs)
T Bateman (Defendant)

Solicitors:
K Liu, The People’s Solicitors (Plaintiffs)
P N Parker, Bridges Lawyers (Defendant)

File Number(s):

2024/328761

Publication restriction:

N/A

 Decision under appeal 

Court or tribunal:

Local Court of New South Wales

Jurisdiction:

Civil

Date of Decision:

9 August 2024

Before:

Brender LCM

File Number(s):

2023/219838

JUDGMENT

1. BASTEN AJ: The six plaintiffs appeal from a judgment in the Local Court ordering each to pay the defendant, Coolah Tourist Park Pty Ltd, an amount for site fees for rights of occupancy of caravan sites in a tourist park. Although the magistrate (Brender LCM) found that there was no contractual relationship between the plaintiffs and the defendant, he concluded that the defendant, having taken over ownership and operation of the park from its former operator, Coolah Home Base Pty Ltd (CHB), was entitled to enforce the obligations to pay site fees against the residents under village contracts entered into between the residents and the former operator, pursuant to s 40(1) of the Retirement Villages Act 1999 (NSW).

2. The plaintiffs contended that s 40 provides for a village contract to be enforced “against” any operator for the time being of the village, but does not provide a reciprocal right of enforcement against residents. That is the primary issue raised on the appeal, and constitutes a question of law for the purposes of the Local Court Act 2007 (NSW), s 39(1).

3. In the course of his reasons, the magistrate rejected a claim by the defendant that the village contracts with the former operator had been novated in favour of the defendant. Further, the magistrate declined to deal with a claim based on “unjust enrichment”, relied on by the defendant as a third basis of entitlement to recover the site fees. The defendant filed a notice of contention seeking to reagitate the issue of novation and assert its claim based on unjust enrichment.

Jurisdictional issues

Appeal jurisdiction

4. Section 39 of the Local Court Act confers a right of appeal to this Court on parties to proceedings before the Local Court sitting in its General Division who are dissatisfied with a judgment or order of the Court, “but only on a question of law”. There is no doubt that the plaintiffs’ appeal, which turns on a proper construction of the Retirement Villages Act, is an appeal only on a question of law. The defendant did not appeal, because it is not dissatisfied with the order made in the Local Court.

5. A notice of contention is permitted by the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 50.11, where a defendant wishes to have a judgment affirmed on grounds other than those relied on by the court below. However, three issues arise as to the scope of the jurisdiction of this Court to consider a matter raised by way of contention.

6. First, where the matter has been raised before the magistrate and rejected, the rejection may have been on a basis not limited to a question of law. Where the appellant is limited to relying on a question of law, it is unlikely that the Parliament intended that a defendant could seek to defend the decision below on broader grounds. The better view is that that course is not available, and the constraint imposed by s 39(1) should apply equally to a contention, absent a grant of leave pursuant to s 40(1), if that provision can be relied on by the party responding to the appeal. Whether it can seek to do so in circumstances where the appellant does not seek to rely upon that provision need not be addressed in this case because neither party sought such leave.

7. Secondly, if the contention relies on a ground not addressed by the magistrate it may require findings of fact not made or conceded below. Similar reasoning would suggest that this Court does not have jurisdiction to make additional findings of fact. Authority supporting these conclusions will be addressed below.

8. Thirdly, there is a general issue as to the nature of the appeal in this Court, which may affect the answers to the first two issues. It is convenient to commence with this issue, which will lead into the other issues.

9. An appeal to this Court is governed by Pt 50 of the UCPR. The conduct of an appeal is governed by r 50.16:

50.16   Conduct of appeal

(1)   If the decision under appeal has been given after a hearing, the appeal is to be by way of rehearing.

(2)   The higher court has the powers and duties of the court, body or other person from whom the appeal is brought, including powers and duties concerning–

(a)   amendment, and

(b)   the drawing of inferences and the making of findings of fact, and

(c)   the assessment of damages and other money sums.

(3)   The higher court may receive further evidence.

(4)   Despite subrule (3), where the appeal is from a judgment after a trial or hearing on the merits, the higher court may not receive further evidence except on special grounds.

(5)   Subrule (4) does not apply to evidence concerning matters occurring after the trial or hearing.

(6)   The higher court may make any finding or assessment, give any judgment, make any order or give any direction which ought to have been given or made."

10. This provision, providing for an appeal by way of rehearing with power to make findings of fact, is inconsistent with the limited nature of the appeal provided by s 39(1) of the Local Court Act. Rule 50.16 mirrors s 75A(5)-(10) of the Supreme Court Act 1970 (NSW), which also applies generally to appeals to the Court (as well as to appeals in the Court). However, s 75A(4) states that “[t]his section has effect subject to any Act”, thus giving primacy to any statutory provision limiting an appeal in a manner inconsistent with s 75A. Rule 50.16 contains no express provision to that effect, but it should be read down to avoid such inconsistency. That is not achieved by reliance on so much of the empowering provision in s 9 of the Civil Procedure Act 2005 (NSW), which requires that the rules not be inconsistent with that Act. However, in its broadest aspect, the rule-making power in s 9 covers matters that are “necessary or convenient to be prescribed by rules for carrying out or giving effect to this Act”. The subject-matter of the Act is procedure governing the exercise of civil jurisdiction by the courts listed in Schedule 1 to the Act; it is not the conferral of jurisdiction. Accordingly, the UCPR should not be read as expanding the jurisdiction of any court.

11. This reasoning conforms to that of Beech-Jones J, reaching the same conclusion, in Ken Wolf Real Estate Pty Ltd v O'Halloran. ^[1] It is also consistent with the general law principle that delegated legislation does not override the general law or other statute law, including earlier statutes, at least absent express reference. ^[2]

    1. [2012] NSWSC 993 at [50].

    2. DC Pearce, Delegated Legislation in Australia (6th ed, 2023, LexisNexis) [19.19]-[19.21]; De L v Director-General, New South Wales Department of Community Services (No 2) (1997) 190 CLR 207, 212 (Brennan CJ and Dawson J); [1997] HCA 14.

12. In that case, Beech-Jones J also addressed and rejected an argument that s 75A itself permitted fact-finding once error of law had been established, in order to decide on appropriate relief. That issue is material here because, if correct, it could support a broader exercise in determining a contention than in determining the ground of the appeal. The reasoning was as follows: ^[3]

“[51]   In Kostas v HIA Insurance Services Pty Ltd ^[4] French CJ identified s 75A as a source of power for this Court to make at least some findings of fact, but only in circumstances where the Court determined an error of law on the part of the inferior tribunal, stating at [30]:

‘Invocation of the ancillary jurisdiction and/or power conferred by s 75A(6) of the Supreme Court Act enables the court, inter alia, to draw inferences from facts found by the Tribunal or to find facts on materials before the Tribunal which were not in dispute. An occasion for the use of that power would arise, as in this case, where limited fact finding would avoid the need for a remitter to the Tribunal and the imposition upon the parties of additional expense and delay.’

[52]   This is very different form of a review to there being an appeal by way of rehearing. It only enables fact finding at the point in which the Court has found legal error and is determining the outcome of the appeal. In any event, these comments were obiter as the plurality in Kostas expressly left open this question ^[5] as had the High Court in Amaca Pty Ltd v State of New South Wales. ^[6] Further, the Court of Appeal before, in and after Kostas has consistently held that the establishment of legal error in the decision appealed from does not enable an appellate court to make findings of fact for the purposes of determining what orders should be made (HIA Insurance Services Pty Ltd v Kostas; ^[7] Edyp v Brazbuild Pty Ltd; ^[8] Brennan v New South Wales Land and Housing Corporation. ^[9] However, something similar to the approach outlined by French CJ in Kostas may still be appropriate in a case where the Court has granted leave under s 40(1) of the Local Court Act.”

3. References have been extracted in footnotes.

4. (2010) 241 CLR 390; [2010] HCA 32 at [30]-[32].

5. At [88] (Hayne, Heydon, Crennan and Kiefel JJ).

6. [2003] HCA 44; 77 ALJR 1509 at [22] (McHugh, Gummow, Kirby, Hayne and Callinan JJ).

7. [2009] NSWCA 292 at [120]-[128] (Basten JA).

8. [2011] NSWCA 218 at [53] (Allsop P), and [109], [124], [127] (Giles JA).

9. (2011) 83 NSWLR 23; [2011] NSWCA 298 at [123]-[127] (Handley JA).

13. In any event, French CJ limited his suggestion to the drawing of inferences based on primary factual findings made by the court or tribunal in the decision under appeal, or based on matters not in dispute. The functional justification for such an approach no doubt reflects the overriding guiding principle of just, quick and cheap resolution of the real issues in dispute, ^[10] but that principle is not thought to expand the jurisdiction or powers available to a court, but merely to guide their exercise. The result may need to be remittal, as Beech-Jones J concluded in Ken Wolf, in circumstances not dissimilar to the present case:

“[54]   One matter raised by the notice of contention was a defence under the Contracts Review Act. Mr Duggan invited this Court to determine it de novo or at least as an appeal by way of rehearing. As this defence requires findings of fact, this is an invitation that must be rejected. However, if the plaintiff had succeeded on its construction argument, the fact that there was a defence that raised questions of fact that was not resolved by the Local Court would be a matter requiring the remittal to that court of at least so much of the matter as involved that issue rather than entering a verdict for the plaintiff.”

10. See Civil Procedure Act, Pt 6.

Jurisdiction of Local Court

14. There is a further jurisdictional issue raised by the contention based on unjust enrichment. The issue concerns the jurisdiction of the Local Court, rather than this Court. If the Local Court does not have jurisdiction to consider such a claim, this Court would not have jurisdiction to consider such a claim on an appeal from the Local Court. (This Court could, of course, set aside a judgment of the Local Court based on a claim which was outside its jurisdiction.) The relevant jurisdiction of the Local Court was that conferred by s 30 of the Local Court Act, which relevantly provides:

30   Conferral of jurisdiction

(1)   Subject to this Part, the Court sitting in its General Division has jurisdiction to hear and determine–

(a)   proceedings on any money claim, so long as the amount claimed, whether on a balance of account or after an admitted set-off or otherwise, does not exceed the jurisdictional limit of the Court when sitting in that Division ….

15. The term “money claim” is defined in s 29A as meaning “a claim for recovery of any debt, demand or damages (whether liquidated or unliquidated)”. Limited attention was paid on this appeal to the nature of that language or the limits of the Local Court’s jurisdiction. However, it may be accepted for present purposes that the Local Court has jurisdiction to deal with the claim in quantum meruit by way of payment for services rendered, although, for reasons explained below, it is not necessary to determine that question.

16. The reference to “unjust enrichment” in the notice of contention suggested that the claim made was equitable. This not being a claim for restitution of moneys had and received (a common law count) the issue cannot be disposed of on that basis. However, authority establishes that the statutory phrase is used to describe the nature of the relief and not the nature of the cause of action. Indeed, the limit to the jurisdiction expressed in monetary terms tends to confirm that approach. On that approach, the Local Court does not have jurisdiction to grant equitable relief in the nature of declarations or injunctions, but could award compensation or damages. Monetary relief could also arise as a result of a statutory cause of action.

17. In Carricks Ltd v Pizzaro ^[11] there was discussion of the right of an employer to recover from a worker overpaid workers’ compensation. The right to compensation was then determined in the Compensation Court, but that Court did not have jurisdiction to order restitution. The question was whether the Local Court had such a jurisdiction. If it did, the entitlement arose under a statute and no issue of a cause of action in equity arose. Nevertheless, Cole JA expressed his reasons for upholding the jurisdiction of the Local Court in the following terms: ^[12]

“There is no express provision depriving an employer who has overpaid a worker of the right to sue on usual principles of common money counts or constructive trust for recovery of the overpaid sum. The right to recover moneys overpaid, being a common law or equitable right (David Securities Pty Ltd v Commonwealth Bank of Australia ^[13] ) may only be removed by clear statutory enactment ….

In my opinion a claim for moneys overpaid in purported compliance of an award is not a matter ‘arising under this Act’ …. It is a claim for moneys recoverable at common law, and in accordance with equitable principles. It follows, in my view, that the Local Court was not deprived of jurisdiction.”

11. (1995) 38 NSWLR 274.

12. Carricks Ltd, at 280.

13. (1992) 175 CLR 353 at 376; [1992] HCA 48.

18. In Melesco Manufacturing Pty Ltd v Thompson,^[14] a similar conclusion was reached by Sheller JA and Powell JA. Sheller JA recounted the reasoning of Cole JA in Carricks Ltd, set out above, and expressed his entire agreement. ^[15] However, he then referred to the claim which Melesco brought in a Local Court as one “for moneys recoverable at common law”.

    14. (1996) 40 NSWLR 525.

    15. Melesco at 533D.

19. Despite the reference in Cole JA’s reasons to a passage in the judgment of High Court in David Securities, there was no suggestion in that passage that an equitable claim was at stake. The only reference in David Securities to restitution being granted as an equitable remedy for mistake of law or fact was in an extract from the American Law Institute’s Restatement of the Law of Restitution. ^[16]

    16. Until the 19th century, such relief was “freely granted both in law and in equity” in respect of payments made under a mistake of law: David Securities at 370, quoting the Restatement (1937) at 179.

20. There can be no doubt that the Local Court has no power to grant equitable remedies, such as declarations, injunctions or accounts. Such relief would not fall within the phrase “debt, demand or damage (whether liquidated or unliquidated)” in the definition of “money claim”. What is less clear is whether that language encompasses claims for equitable compensation for breach of a purely equitable application, such as a remedy for breach of trust or for breach of a fiduciary obligation. ^[17] That seems implausible. A separate question arises with respect to claims for damages which may be available in lieu of other equitable relief. ^[18] The fact that Lord Cairns’ Act of 1858 is now to be found in s 68 of the Supreme Court Act 1970 (NSW) may suggest that Local Courts do not have power to grant damages in lieu of other equitable relief.

    17. J D Heydon, M J Leeming, P G Turner Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies (5th ed, 2015, LexisNexis) at [23-105].

    18. Ibid at [24-120].

18. The terminology used in the Local Court Act, was to be found in s 12(1) of the Courts of Petty Sessions (Civil Claims) Act 1970 (NSW) in force at the time of cases referred to above. However, the history is somewhat confused because that language was also employed in earlier legislation, including the Small Debts Recovery Act 1912 (NSW) ^[19] which, in s 7(1) conferred jurisdiction on courts of petty sessions:

“… to hear and determine in a summary way, and according to equity and good conscience … all actions whatsoever–

(a)    for the recovery of any debt or liquidated demand not exceeding thirty pounds …;

(b)    for the recovery of any unliquidated debt to an amount in any case not exceeding thirty pounds;

(c)    for the recovery of any demand or damage, other than debt, whether liquidated or unliquidated, to an amount in any case not exceeding ten pounds, or (where the party intended to be sued by writing under his hand consents thereto) to an amount not exceeding thirty pounds.”

19. And its predecessor, the Small Debts Recovery Act 1899 (NSW), s 7.

22. Both the history and construction of provisions directing a court to act “according to equity and good conscience” were explored in Daley v SAS Trustee Corporation ^[20] in considering the scope of s 142J of the District Court Act 1973 (NSW). These matters need not be reagitated here. There may, however, be a constraint implicit in the reference to “actions”. In Vezitis v McGeechan,^[21] Taylor J held that an application for a declaration did not fall within a limitation provision applying to an “action or claim for damages”.

    20. (2016) 91 NSWLR 525; [2016] NSWCA 111 at [96]-[107].

    21. [1974] 1 NSWLR 718.

23. The reason why this issue might have required resolution, had it not been necessary to dismiss the contention on other grounds, arises from a difficulty in characterising the cause of action on which the defendant sought to rely. It was not a money claim in the sense of a claim for money had and received to which it was entitled by way of restitution, which would be characterised as a cause of action at common law, and clearly within the jurisdiction of the Local Court. Rather, the claim was for some form of compensation from the residents on the basis that they had enjoyed, gratuitously, rights of exclusive occupation of allotments in circumstances where the right of occupation was not intended to be available gratuitously. If such a claim were available, it might well found in equity and not be justiciable in a Local Court.

Background circumstances

24. In early 2012, Janet Kelly and her partner, Graeme Booker, decided to set up a business of providing a “home base” for itinerant caravaners, sometimes referred to as “grey nomads”. The site of the business was to be Coolah in central New South Wales. They incorporated a company, Coolah Home Base Pty Ltd (“CHB”) which purchased a property in Cunningham Street, known as the Coolah Caravan Park (“the Park”). The constitution of the company provided that class A shareholders would have a right to exclusive occupation of a specific site or allotment in the Park, subject to payment of site fees and levies. ^[22] (Two ordinary shares were also issued when the company was registered, and held by the promotors. ^[23] ) Further, in the event of the sale of the whole of the land, the class A shareholders were entitled to share in the proceeds, subject to apportionment according to the size of their respective allotments.

    22. Constitution, Sch 2, cl 3.

    23. Constitution, Sch 2, cl 2.

25. Schedule 5 to the constitution was headed “By-laws and shareholder/residential site agreement”. CHB was identified as the owner of the Park, part of which was used as Coolah Home Base and part of which was a standard caravan park for tourists. Relevantly for present purposes, the bylaws provided:

“Site fees and other payments

The shareholder/resident agrees:

1   to pay the site fees as nominated by the ownership company [CHB] from time to time.

…

3   to pay for electricity and gas supplied to the residential site

4   to pay for any reasonable expense incurred for maintenance on their behalf

…”

26. Site fees were to be paid weekly in advance, and “the shareholder site fee is payable for occupation of their purchased allotment only”.

27. In late 2019 CHB entered a deed of company arrangement (DOCA) and administrators were appointed. The land owned by CHB was sold for $430,000 to a new company, Coolah Tourist Park Pty Ltd, the directors of which were Ms Kelly and Mr Booker. There were a number of special provisions attached to the standard clauses of the contract of sale. Importantly, cl 51 contained a number of acknowledgments by the purchaser (i) as to the current operation of the Park by the vendor and the use of the property as a “home base”; (ii) that the occupants were shareholders of the vendor; (iii) that the shareholders had constructed or placed improvements on their allotments, in which the vendor had no interest; and (iv) that the vendor was the owner of the common property. Clause 52 read as follows:

“52    Lease

52.1   The purchaser acknowledges and agrees that the sale of Land is subject to the rights of Shareholders to occupy, let or use part of the Land including Common Property and the purchaser is not entitled to nor will the purchaser obtain vacant possession on the Date of Completion.

52.2   The purchaser agrees that on or before the Date for Completion the purchaser will enter into a Residential Site Agreement including the conditions disclosed in the form attached hereto with each Shareholder of an Allotment (Lease) who irrevocable [sic] and unconditionally agrees to enter into the Lease.”

28. The date for completion was 18 December 2019. The special conditions included indemnities given by the purchaser to the deed administrators in relation to any claims arising from “a Shareholder’s right and or entitlement to exclusively use of [sic] Allotments”: cl 33.3.2(i) .

29. There has been extensive litigation between the shareholders of CBH and occupants of the allotments over the last 6 years, including proceedings in this Court and in the Civil and Administrative Tribunal (NCAT). Those proceedings included an appeal to the Court of Appeal. However, none of those proceedings determined the present dispute, nor did the parties consider that they bore upon the resolution of the present dispute in any material way. There is, therefore, no need to address those proceedings, decisions or judgments further.

30. Relevantly, for present purposes, the plaintiffs in this Court were the owners of six allotments and were (and continue to be) class A shareholders of CBH. Each of the plaintiffs had entered into a share purchase agreement in respect of an allotment when CBH was the owner of the property, during a period from March 2012 to July 2014. They did not enter into leases with the purchaser, Coolah Tourist Park. The present proceedings were commenced in the Local Court by Coolah Tourist Park, seeking judgments against each of the plaintiffs for unpaid “shareholder’s site fees”, together with interest. Each was ordered to pay a specified amount by way of site fees, being an amount which fell short of the amount calculated by the Coolah Tourist Park. (The total amount of the claims (without interest and legal fees) was in the order of $47,000.) There is no challenge to the quantifications.

31. The primary case pleaded by Coolah Tourist Park was that the terms of the shareholders’ agreements provided in schedule 5 to CBH’s constitution were enforceable as between Coolah Tourist Park and the plaintiffs.

Judgment of Local Court

32. The hearing in the Local Court ran for two days on 11 April and 20 May 2024, with written submissions filed by the principal parties. Magistrate Brender delivered his decision on 9 August 2024, orders being entered on 14 August 2024.

33. There was reference in the judgment to payments being made to a management company, Home Base Solutions Pty Ltd. Although the occupants on various occasions referred to it as the “operator” of the Park, it was in fact a separate company, operating under an agreement with CHB as the manager and as the entity to which site fees were paid. According to the liquidator, it was controlled by the same two directors as CHB, namely Ms Kelly and Mr Booker. ^[24] The liquidator recorded the management agreement having been dated 22 April 2012, noting advice from Ms Kelly that Home Base Solutions had ceased trading on 17 December 2019. It had no contractual relationship with the plaintiffs at any time.

    24. Liquidator’s “Report to Creditors”, 7 October 2022, p 7.

34. An earlier dispute, resolved in the appeal panel of NCAT, was whether the Park, insofar as it provided allotments to the shareholders of CHB, was a “retirement village” within the terms of the Retirement Village Act. An appeal panel determined that it was. ^[25]

    25. Coolah Home Base Pty Ltd v Tait [2022] NSWCATAP 324 (A Suthers and G Burton SC).

35. The magistrate identified the principal issue before him in the following terms:

“43   The question … is whether by reason of the sale agreement, to which the [residents] are not parties, the [residents] are now contractually bound to pay the site fees to the plaintiff (the new owner (and operator)) …. There was no express novation of the contract between the [residents] and Home Base [sic ^[26] ]. I can’t see how the contractual obligation of the [residents] to pay Home Base on behalf of CHB, the former owner, could have survived the sale of the property by CHB.

44   … CHB was no longer entitled to site fees, formerly collected by Home Base on its behalf, as it was no longer the owner and no longer providing any site services.

45   The site fee contracts (the By Laws) were not novated. [Coolah Tourist Park], the incoming owner (and operator) no doubt intended to enter new site fee agreements with the [residents], but they were unable to do so. [The residents] thus have no direct contractual agreement with the new owner nor remaining operative agreement with the former owner or operator.”

26. “Home Base” was defined as referring to Home Base Solutions Pty Ltd: at [11].

36. The contractual entitlement of Coolah Tourist Park to payment of the fees having been rejected, the magistrate turned to the operation of s 40 of the Retirement Villages Act, which states:

40   Contractual rights of residents against new operator

(1)   A village contract between a resident and a former operator of a retirement village may be enforced against any operator for the time being of the village.

(2)   However, proceedings do not lie against the owner of land in a retirement village (not being a person involved in the management or control of the village) for the enforcement of rights under subsection (1) unless—

(a)   the owner is a party to the contract, or

(b)   the owner is a close associate of an operator involved in the management or control of the village, and

an operator other than the owner has failed to satisfy a judgment given for the enforcement of those rights.

Coolah Tourist Park submitted that this provision made the residence contracts enforceable as between it and the residents. The residents argued, in their defence, that the section only provided for enforcement of the contract “against” the operator for the time being.

37. The magistrate upheld the submission of Coolah Tourist Park. The reasoning, in full, was as follows:

“49 The [residents] submit that the language is deliberate and was aimed at a particular mischief – preventing adverse variations of or replacement of retirement village agreements without agreement. I don’t see how prevention of that mischief would be advanced by construing s 40 to mean that a resident can enforce (receive the benefit of) the terms of an original agreement against a subsequent operator, but is not obliged to pay to that new operator the consideration that he or she agreed to pay to the former operator for the rights he is enforcing. I don’t read s 40 as a one way provision. While the emphasis is on protecting the resident by allowing enforcement by him of his original rights, there is no reason why, in an appropriate case, he shouldn’t pay the agreed upon price for those rights to the new person providing the benefit being enforced. It would not make sense in cases like this one to insist that the benefits be only payable to the former operator who is no longer providing any service or making any claim to be paid.

50 For that reason I find that the site fees are owing to [Coolah Tourist Park] by way of enforcement by it under s 40.”

38. Having determined the case in favour of Coolah Tourist Park on that basis, the magistrate referred to the question of “unjust enrichment” and observed that it was “unnecessary to decide that issue as I have found a contractual entitlement”: at [51].

Appeal ground: statutory entitlement

39. Despite referring at [51] to having found a “contractual entitlement”, the magistrate in fact expressly rejected the existence of a contractual entitlement, and was correct to do so. What he in fact upheld was an entitlement arising under s 40 of the Retirement Villages Act.

40. However, the reasoning in relation to s 40(1) conferred on it an expanded operation inconsistent with the express language of the provision. The word “against” does not, in its ordinary meaning, mean “in favour of or against”. Two observations may be made in relation to the magistrate’s approach. First, there is nothing in the statutory context, including surrounding provisions, to warrant the conclusion that the one-way provision was meant to be a two-way provision. To rewrite a statute in this manner requires a strong justification based either upon a patently absurd result or upon an apparent clerical error. The Interpretation Act 1987 (NSW) does not support such an approach. The Act permits the reading of words other than in accordance with their ordinary meaning in s 34(1), which provides:

34   Use of extrinsic material in the interpretation of Acts and statutory rules

(1)   In the interpretation of a provision of an Act or statutory rule, if any material not forming part of the Act or statutory rule is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material—

(a)   to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule …), or

(b)   to determine the meaning of the provision—

(i)   if the provision is ambiguous or obscure, or

(ii)   if the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule …) leads to a result that is manifestly absurd or is unreasonable.

41. The defendant’s purpose would not have been served by relying upon extrinsic material to confirm the ordinary meaning conveyed by the text, within par (a). As the language is not ambiguous or obscure, par (b)(i) would not have been relied upon. One is left with par (b)(ii), namely that the ordinary meaning leads to a result that is “manifestly absurd or is unreasonable”. In fact there was no attempt to support the reasoning in the Local Court by reference to any extrinsic material. Even on the assumption that s 34(1) is permissive and does not limit the scope of legitimate reliance on extrinsic material, it does not assist the defendant.

42. Secondly, the first sentence of [49] set out above referred to the “particular mischief” to which s 40(1) was directed. That invokes the concept of statutory purpose, which requires identification of a “purpose or object underlying the Act”, determination of which is itself an exercise in statutory construction. That was not an exercise undertaken in the Local Court but is required by s 33 of the Interpretation Act, which states:

33   Regard to be had to purposes or objects of Acts and statutory rules

In the interpretation of a provision of an Act or statutory rule, a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule …) shall be preferred to a construction that would not promote that purpose or object.

43. The reasoning of the magistrate appeared to be based solely on the proposition that the ordinary meaning of the statute created an entitlement in residents for the provision of services for which they did not have to pay. However, it is clear from the Retirement Villages Act, read as a whole, that its singular purpose is to provide protection to residents. It will be appropriate to expand on that proposition shortly.

44. In Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation,^[27] Mason and Wilson JJ noted that a judge would apply the ordinary meaning of the text if there was no “reasonable alternative construction … because (a) the language is intractable or (b) although the language is not intractable, the operation of the statute, read literally, is not such as to indicate that it could not have been intended by the legislature”. ^[28] The joint reasons continued:

“On the other hand, when the judge labels the operation of the statute as ‘absurd’, ‘extraordinary’, ‘capricious’, ‘irrational’ or ‘obscure’ he assigns a ground for concluding that the legislature could not have intended such an operation and that an alternative interpretation must be preferred. But the propriety of departing from the literal interpretation is not confined to situations described by these labels. It extends to any situation in which for good reason the operation of the statute on a literal reading does not conform to the legislative intent as ascertained from the provisions of the statute, including the policy which may be discerned from those provisions.”

Having concluded that the literal construction of the provision in question would result in an operation of the operative provision which is “capricious and irrational”, the judgment concluded that “the entirety of the situation to which [the provision] was directed was apparent from the legislative scheme viewed as a whole, as indeed was the purpose or object of the provision itself”. ^[29] The conclusion was that there had been an “oversight” on the part of the drafter.

27. (1981) 147 CLR 297; [1981] HCA 26.

28. Cooper Brookes at 320.

29. Cooper Brookes at 321, 323.

45. The Retirement Villages Act states its primary objects in the following terms:

3   Objects of Act

The objects of this Act are—

(a)   to set out particular rights and obligations of residents and operators of retirement villages, and

(b)   to facilitate the disclosure of information to prospective residents of retirement villages, and

(c)   to require contracts between residents and operators of retirement villages to contain full details of the rights and obligations of the parties, ….

46. The Act is evidently intended to be protective of the interests of “retired persons” occupying residential premises in a retirement village, under a contract. ^[30] A “residence contract”, is a contract which gives rise to a “residence right”, and includes a “right to occupy residential premises in a retirement village, being a right arising from a contract … under which the person purchased shares entitling the person to occupy the residential premises”. ^[31]

    30. Section 4(1) residence right; resident.

    31. Ibid.

47. The application of the Act is provided in s 11:

11   Application of Act

(1)   This Act applies to all retirement villages (whether established before or after the commencement of this section) and so applies despite the terms of any contract, agreement, scheme or arrangement (whether made or entered into before or after the commencement of this section).

(2)   This Act extends to apply to and in respect of—

(a)   a retired person who continues to occupy residential premises in a former retirement village that was a retirement village when the retired person took up residence in the premises, and

(b)   a retired person who has a right to occupy residential premises in a former retirement village that was a retirement village when the right was obtained, and

(c)   a former resident of a former retirement village who continues to have rights or liabilities under the contract, agreement or arrangement under which he or she occupied (or had the right to occupy) the residential premises in the former retirement village when it was a retirement village, and

(d)   the person who is the other party to the contract, agreement or arrangement under which the retired person occupies or occupied (or has or had the right to occupy) the residential premises in the former retirement village,

even though the former retirement village is no longer a retirement village.

48. The operation and management of retirement villages is highly regulated, not to protect owners and operators, but to protect the interests of vulnerable retired persons; evidently, owners and operators were expected to be able to look after their own interests. Thus, pre-contract representations and information about retirement villages are regulated in Pt 3; the formal content of village contracts in Pt 5; the general management of retirement villages through village rules in Pt 6 (which sets out particular rights of residents); the financial management of retirement villages in Pt 7 (including constraints on the variation of recurrent charges) and the termination of residence contracts in Pt 9.

49. The Act provides (in Pt 6, Div 6) for the appointment of an administrator of a retirement village to exercise the functions of the operator of the retirement village. The administrator is given wide powers, including a power to vary village contracts: s 87B. The Act also provides for the circumstances in which a receiver or a receiver and manager is appointed to the operator of a retirement village, and requires that the person so appointed must “comply with the operator’s obligations under this Act as if that person were the operator”: s 89(1).

50. Without seeking to deal comprehensively with the Retirement Villages Act as a whole, it must be accepted that the coverage is extensive. However, it does not purport to be a code, and there will be circumstances which it does not address. Nevertheless, to conclude that some particular provision is deficient in that it could have not been intended to operate in precisely the way in which the language suggests is not a conclusion to be reached lightly. Nor can it be assumed that conferral of a right enforceable “against” another party is intended to pick up the whole of a contract and make it enforceable by all parties.

51. There are numerous sections which are clearly not intended to operate in that manner. For example, s 26 provides that, unless in writing, a village contract is not enforceable “against” a resident of the village. Part 10A provides protection for residents who have paid an “ingoing” contribution, a term defined in s 6. Section 182B creates a charge over land within the retirement village to secure a refund under the contract. That charge is said to be “binding on, and is enforceable against, the owner of the land from time to time”: s 182D. Section 197B confers power to make regulations dealing with the provision of “relevant village information”, a term including “any enforcement or disciplinary action taken against the operator of a retirement village”. Section 198 protects residents of retirement villages from liability to pay legal costs incurred by the operator, with exceptions, including where costs are awarded “in favour of the operator and against a resident”. In all these cases, the term “against” is used to identify the party on whom liability is imposed or against whom the proceeding may be taken: in no case could it be substituted by the phrase “against or in favour of”. Section 40(1) is not exceptional, and the inference that the drafter failed to use different language through oversight is not available. Accordingly, the magistrate’s conclusion that the new operator had a right of action against a resident under a contract to which it was not a party was an error. The error arising from an incorrect construction of a statutory provision is an error of law and the plaintiffs are entitled to succeed in their appeal.

Notice of contention

Contention 1 - novation

52. As noted above, the magistrate expressly rejected the proposition that the residence contracts had been novated. Coolah Tourist Park challenged that finding, contending that there was a direct contractual relationship between the residents and it, because the residence contracts had been novated. The result was that the residents were entitled to continue to occupy their allotments but that, as the new operator, Coolah Tourist Park, was entitled to charge site fees for as long as the residents chose to continue to reside at the property.

53. The defendant accepted the statement in ALH Group Property Holdings Pty Ltd v Chief Commissioner of State Revenue ^[32] that a novation “refers to a circumstance where new contract takes the place of the old”. However, there was more to it than that, as appears from the whole of the paragraph from which the first sentence has been taken, which reads:

“12   A novation, in its simplest sense, refers to a circumstance where a new contract takes the place of the old ^[33] .  It is not correct to describe novation as involving the succession of a third party to the rights of the purchaser under the original contract.  Under the common law such a description comes closer to the effect of a transfer of rights by way of assignment.  Nor is it correct to describe a third party undertaking the obligations of the purchaser under the original contract as a novation.  The effect of a novation is upon the obligations of both parties to the original, executory, contract.  The enquiry in determining whether there has been a novation is whether it has been agreed that a new contract is to be substituted for the old and the obligations of the parties under the old agreement are to be discharged.”

32. (2012) 245 CLR 338; [2012] HCA 6 at [12] (French CJ, Crennan, Kiefel and Bell JJ).

33. Olsson v Dyson (1969) 120 CLR 365 at 389; [1969] HCA 3.

54. ALH Group and a later case referred to by the parties in which the Court of Appeal applied the principles in ALH Group, Fu Tian Fortune Pty Ltd v Park Cho Pty Ltd,^[34] were cases involving the substitution of a purchaser under a contract for the sale of land. This case involved a sale of land, but the supposed substitution occurred not in the contract of sale, but in the contract between the vendor and the residents. Translated to that circumstance, it would not be sufficient to describe the purchaser (Coolah Tourist Park) as undertaking the obligations of the vendor (CHB) under the contracts with the residents. Rather, the obligations of both CHB and the residents must have been discharged and new residence contracts entered into between the residents and Coolah Tourist Park.

    34. [2018] NSWCA 282 at [30]–[32] (Barrett AJA, Macfarlan and Gleeson JJA agreeing).

55. As the defendant accepted, whether there had been a tri-partite novation depended on the intention of the parties which, it was submitted could be inferred from conduct. Reliance upon inference from conduct was necessary, there being no documented contract between the residents and the new operator and there being no statement as between the new operator and CHB demonstrating such an intention.

56. The defendant relied upon three factors, the first being that CHB ceased to own the property and operate the Park “in late 2018 or early 2020”. It was further stated that the residents had not made any payment to CHB in relation to the site fees since late 2019, nor had CHB made any claim for such payment.

57. Secondly, it was submitted that CHB had sold its business, being the administration and management of the plaintiffs’ allotments, “as part of the sale of the land to the defendant”. That was said to be inferred from the fact that the sale was expressed to be “subject to the plaintiffs’ existing rights to occupy” the allotments and CHB’s disclaimer of any ongoing responsibility or liability in relation to residence rights.

58. Thirdly, the defendant relied on the fact that the plaintiffs had continued to occupy and enjoy exclusive rights to their allotments since the purchase of the property by the defendant. The residents had also accepted benefits of the services performed by the defendant and some had made payments of site fees to the defendant from time to time, but not all site fees claimed to be owing.

59. These submissions were bold but untenable, for a number of reasons.

60. First, the submissions paid no regard to the statutory scheme of the Retirement Villages Act. Thus, there was no attempt to determine whether the residence contracts between residents and CHB had been terminated in accordance with Pt 9. Assuming that they had been terminated in accordance with the Act, there was no new contract in writing and hence no contract enforceable by the operator against the residents, pursuant to s 26. Even if all other matters fell away, the defendant could have not sued on a new contract resulting from a novation.

61. Secondly, the contract of sale between CHB and Coolah Tourist Park did not demonstrate an intention to novate the residence contracts, but indeed quite the contrary. Thus, the contract of sale expressly recognised the rights of the residents (referred to as “shareholders’ rights”) to exclusive use of the allotments. The contract of sale expressly excluded any liability of the administrators to the purchaser arising out or in connection with the shareholders rights. ^[35] The contract further dealt with improvements and shareholders’ rights in the following provisions:

    35. Contract of sale, cl 33.3.2(i).

“51   Improvements and Shareholder rights

51.1   The purchaser acknowledges that the vendor operates a caravan park and home base on the property.

51.2 The occupants of the caravan park and home base are Shareholders (or authorised occupations of the Shareholders of the vendor and in accordance with the vendor Constitution, the Shareholders have exclusive use of a portion of the property (Allotment).

51.3   The purchaser acknowledges that each Shareholder has constructed or holds, parks or places improvements on their Allotment. The vendor has no interest in the Shareholder improvements (Shareholder Improvements) and the Shareholder Improvements are expressly excluded from the sale of the property.

51.4   The purchaser acknowledges and agrees that there may be other improvements or personal property, fittings and fixtures other than the Shareholder Improvements on the property that do not belong to the vendor;

…

52   Lease

[See 52.1 and 52.2 set out at [27] above.]

52.3   The purchaser agrees to indemnify the Deed Administrators against any claim or claims made by any Shareholder or authorised occupant against the vendor or the Administrators or Deed Administrators in respect of a breach by the purchaser of the purchaser’s agreement under clause 52.2 to enter into a Lease with each Shareholder of an Allotment.”

62. The residents were not party to this contract. Further, it is common ground that none of the plaintiffs entered into a “residential site agreement, including the conditions disclosed in the form attached hereto”, pursuant to cl 52.2. Further, cl 52 acknowledged (i) the existing rights of the residents (ii) the fact that there were no new contracts in place and (iii) that the residents might not agree to the new proposed agreements, against which eventuality, the deed administrators obtained an indemnity from the purchaser (the defendant).

63. If it were open to this Court on the appeal to make a finding of fact with respect to the intention of the parties, which, in my view, it is not, the evidence relied upon could not support a finding of intention on the part of the residents to novate the existing agreement. Arguably, that is an available conclusion because the finding that an essential fact is not open on the evidence is a finding of law. In any event, ground 1 in the notice of contention must be rejected.

Contention 2 – unjust enrichment

64. The second ground in the notice of contention sought to rely upon a case presented in the Local Court but not determined by the magistrate. As will be explained, it requires findings of fact which the magistrate did not make and which, for reasons noted above, are not within the jurisdiction of this Court determining an appeal on the question of law. The ground was expressed on the following terms in the notice of contention:

“2   If site fees are not payable by the Plaintiffs to the Defendant pursuant to a contractual entitlement or under the Retirement Villages Act 1999 (NSW), each of the Plaintiffs [has] been unjustly enriched and ought to make restitution to the Defendant, in the amount of the site fees.”

65. There are two concepts invoked in this ground, namely “unjust enrichment” and “restitution”, the latter being a form of relief dependent on establishing the former.

66. As the residents submitted, this aspect of the defendant’s case has similarities with the facts in Lumbers v W Cook Builders Pty Ltd (in liq). ^[36] That case involved a construction of a house for Messrs Lumbers. They entered into an oral agreement with W Cook & Sons Pty Ltd (referred to as “Sons”). Without the knowledge of the Lumbers, the work in fact carried out on the house (including the engagement of subcontractors and supervision of their work) was performed by W Cook Builders Pty Ltd (in liq) (referred to as “Builders”). During the course of the construction, progress payments were made to Sons, as requested, which Sons on-paid to Builders. The dispute related to a final payment which the Lumbers had not made. The contract was not terminated, nor novated. There was a claim based on assignment, but it was dismissed by the courts below and not pursued in the High Court.

    36. (2008) 232 CLR 635; [2008] HCA 27.

67. One issue in Lumbers was whether Builders could bring a claim in quantum meruit on the authority of Pavey & Matthews Pty Ltd v Paul. ^[37] In Pavey & Matthews the claim based on quantum meruit was necessary because the contractual arrangement was unenforceable by the builder, not being in writing. A claim in quantum meruit was held to be available, consistently with the statutory prohibition on enforcing the contract. Gleeson CJ dealt in Lumbers with a claim in quantum meruit in the following terms:

“39   The present was not a case of the performance by Builders of services for the Lumbers at the request of the Lumbers; or of acquiescence in the provision of services by Builders knowing that the services were not being rendered gratuitously; or of the provision of services necessary for the protection of the Lumbers' property.  The majority, however, [in the court below] identified the case as one ‘where the service conferred incontrovertible benefit on the defendant, and it would be unconscionable for the defendant to keep the benefit of the service with paying a reasonable sum for it’ ^[38] .  There are, they said, ‘three basic elements of unjust enrichment’, subject to any available defence.  The first is that the defendant must receive a benefit.  The second is that the benefit must be received at the plaintiff's expense.  The third is that it would be unconscionable for the defendant to retain the benefit.  They discussed ‘incontrovertible benefit’ and ‘free acceptance’.”

37. (1987) 162 CLR 221; [1987] HCA 5.

38. Monks v Poynice Pty Ltd (1987) 8 NSWLR 662.

68. The facts in the present case differ from those in Lumbers: it will be necessary to say how more precisely in due course. It may be accepted that the residents were conversant with the change in ownership of the land, and sought to assert their rights of occupation, which differs from the position of the Lumbers who did not know of, nor acquiesce in the provision of services by Builders. Nevertheless, at one level the defendant’s case is that the residents have obtained an ongoing benefit which was not intended to be provided gratuitously.

69. One other common factor was the possibility that the Lumbers remained indebted to Sons for the balance of the costs of constructions. ^[39] It is true that the residents in the present case have taken different stances at different times, but in this Court they accepted that they had continuing obligations to CHB, which was not a party to the litigation (just as Sons was not a party to the Lumbers’ litigation).

    39. Lumbers at [3] (Gleeson CJ).

70. The restitutionary claim in Lumbers failed, for reasons more fully explained in the joint judgment of Gummow, Hayne, Crennan and Kiefel JJ. The joint reasons noted that in the absence of any proof of a request by the Lumbers to Builders, the matter proceeded on the basis that “acceptance of a benefit, without a request, would be sufficient, at least in this case, to found an action by Builders for work and labour done or money paid”. ^[40] Pavey & Matthews was relied upon for the proposition that “the right to recover on a quantum meruit does not depend on the existence of an implied contract but on a claim to restitution or one based on unjust enrichment”. ^[41]

    40. Ibid at [82].

    41. Ibid at [83].

71. Having observed that the issue in Pavey & Matthews was whether such a claim was defeated by a requirement that the agreement be in writing, the joint reasons continued:

“85   The second point to be noted is that unjust enrichment was identified as a legal concept unifying ‘a variety of distinct categories of case’ ^[42] . It was not identified as a principle which can be taken as a sufficient premise for direct application in particular cases. Rather, as Deane J emphasised ^[43] in Pavey & Matthews, it is necessary to proceed by ‘the ordinary processes of legal reasoning’ and by reference to existing categories of cases in which an obligation to pay compensation has been imposed. ‘To identify the basis of such actions as restitution and not genuine agreement is not to assert a judicial discretion to do whatever idiosyncratic notions of what is fair and just might dictate.’ ^[44] On the contrary, what the recognition of the unifying concept does is to assist ‘in the determination, by the ordinary processes of legal reasoning, of the question whether the law should, in justice, recognise such an obligation in a new or developing category of case’ (emphasis added). ^[45] ”

42. Pavey & Matthews at 257 per Deane J.

43. Ibid at 257.

44. Ibid at 256 per Deane J.

45. Ibid at 257 per Deane J.

72. In the final analysis, Builders reliance on unjust enrichment required the Court to disregard the existence of the contractual relationship with its allocation of risks and obligations. The joint reasons identified the position accepted by Builders as sufficient, namely that it did the work and, if it were not paid for the work, the Lumbers would obtain the benefit of the work without paying for it. In rejecting that argument, two passages in the reasons are significant:

“107   To say, in these circumstances, that Builders ‘did the work’ obscures what were the legal relationships that brought about the result described. The end result described is as consistent with Builders having performed or procured performance of the work in satisfaction of an obligation it owed to Sons, as it is with Builders performing or procuring performance of the work in satisfaction of an obligation it understood that it owed to the Lumbers. And if Builders performed or procured performance of the work in satisfaction of an obligation it owed to Sons, Sons thereby procured the performance of the obligation it owed the Lumbers.

…

117   The majority in the Full Court treated the fact that Sons has made no claim for further payment from the Lumbers as bearing upon whether allowing a claim in restitution by Builders ‘interferes with the contractual relationship between Sons and the Lumbers’ ^[46] . But the absence of any claim by Sons against the Lumbers does not, without more, say anything about the nature or the content of the contractual relationship between Sons and the Lumbers. And the absence of a claim by Sons does not demonstrate, as the majority in the Full Court assumed, that the Lumbers would obtain some ‘windfall’ unless the Lumbers were found liable to Builders.”

46. (2007) 96 SASR 406 at 416 [45].

73. The defendant relied upon an entitlement flowing from its “mistake”. (This reflected the approach taken in the Local Court.) The defendant’s written submissions in this Court stated:

“46   If it is found that there is no entitlement of the defendant to recover site fees from the plaintiffs for their exclusive right to enjoy and occupy allotments at the Property, the defendant will have mistakenly allowed the plaintiffs to continue to enjoy such rights pursuant to the constitution and by-laws.”

74. The concept of “mistake” as a basis for a claim for restitution is misconceived. First, the magistrate made no finding as to a “mistake”. Secondly, given the agreement entered into between the defendant and CHB, including the critical terms set out above, such a finding was simply not open. The defendant “knew” and expressly agreed in writing that it would have to enter into new agreements with the residents. It was not able to do that. There was no evidence that the defendant “believed” that if it failed to enter into new agreements, the old agreements would simply lapse. Such a belief would not have been consistent with its contractual undertaking to CHB; it would have been based upon a legal misconception. The factual premise for the claim was not open on the evidence.

75. Ground 2 in the notice of contention must be rejected.

Conclusions

76. For the reasons set out above, the appeal must be allowed and the judgment in the Local Court set aside. The defendant must pay the plaintiffs’ costs in this Court and in the Local Court.

77. This result will probably not quell the disputes between the residents and the present operator of the Park. The history of unsuccessful attempts to resolve the disputes suggests that the parties have not been well served by their legal advice. The residents remain in occupation of their allotments subject to statutory protections. Subject to uncertainty as to the party entitled to recover any occupation fees, the residence contracts continue in force. It might be thought self-evident that the final resolution of the disputes is most likely to be achieved through a mediation involving a mediator familiar with the operation of the Retirement Villages Act.

78. The Court makes the following orders:

1. Allow the appeal and set aside the judgment and orders in the Local Court entered on 14 August 2024.

2. Dismiss the proceedings commenced in the Local Court by the defendant.

3. Order that the defendant pay the plaintiffs’ costs in the Local Court and in this Court.

**********

Endnotes

Decision last updated: 12 May 2025