Sokach v Byron Holiday Park

[2017] NSWCATCD 78

Civil and Administrative Tribunal

New South Wales

• Amendment notes

Medium Neutral Citation:	Sokach v Byron Holiday Park [2017] NSWCATCD 78
Hearing dates:	13 July 2017
Decision date:	12 September 2017
Jurisdiction:	Consumer and Commercial Division
Before:	W Priestley, General Member
Decision:	1. The application is dismissed.
Legislation Cited:	Residential (Land Lease) Communities Act 2013
Category:	Principal judgment
Parties:	Pamela Sokach (applicant) Byron Holiday Park Pty Ltd (respondent)
File Number(s):	RC 17/15085
Publication restriction:	Nil

Reasons for Decision   

Background

1. The applicant is the owner of a home located on a residential site at a residential community operated by the respondent at Byron Bay.

2. Since 2002, the applicant has had a site agreement with the respondent, in respect of that site. From 2005, the applicant has periodically entered into residential tenancy agreements with various people, under which the site has been used as residential premises.

3. On 1 November 2015 the Residential (Land Lease) Communities Act (“the Act”) commenced. Shortly after that, a residential tenancy agreement the applicant had with a tenant for the residential site, ended after a period of two years. The applicant then sought the respondent’s consent to enter into another tenancy agreement for the site, and at the end of January 2016, that consent was given. The subsequent tenancy agreement was for 12 months, ending on 10 February 2017. The respondent refused to consent to the tenancy agreement being extended, or a new tenancy agreement being entered into with the same or a different tenant.

The application

4. On 24 March 2017, the applicant lodged an application seeking orders the respondent be directed to consent to further subletting of the home; that she be paid compensation for the loss of rent sustained as a result of the respondent’s delay and refusal to consent to the tenancy agreement; that the respondent be ordered to expedite interviewing of proposed tenants; that a Mr Michael Poling be appointed as the applicant’s agent and representative in relation to her site, and to have access to it; and finally an order for her costs associated with the application, including the costs of travelling from the United States and back.

The hearing

5. At hearing the applicant represented herself. The respondent was represented by Mr G McBurney, a solicitor from Sommerville, Laundry Lomax, in Lismore. The parties relied on documents lodged with the Tribunal, and given to each other in accordance with directions made by the Tribunal. All of those documents have been considered by the Tribunal in reaching its decision, along with supplementary oral evidence given at the hearing. At the conclusion of the hearing, the applicant was given leave to lodge and serve further written submissions within 14 days, and the respondent was given leave to file any submissions in reply, within 14 days thereafter. Further submissions were received from the applicant but not the respondent. All submissions have been considered.

Jurisdiction

6. The Tribunal has jurisdiction to hear and determine the application under sections 45 (6) and 157 of the Act, and sections 28 and 29 of the Civil and Administrative Tribunal Act.

Findings of fact

7. The essential facts are not in dispute, rather the interpretation of section 45, as it relates to tenancy agreements, and the transitional provisions of the Act, are in dispute.

8. The applicant has had a residential site agreement in respect of site 89 of the respondent’s residential community at Byron Bay since 1 July 2002. The initial term is stated to be “3 x 3 x 3”. A clause headed “CONTINUATION” says at the end of the term the resident can stay on the residential site on the same terms. Clause 20 says the resident can sublet the residential site with the written consent of the park owner, and the park owner cannot unreasonably refuse that consent.

9. The applicant is a resident of the United States, where she spends most of her time. Since 2005, the applicant has sublet the site. In November 2015, and after the commencement of the Act, the site was vacant after the expiration of a two year tenancy.

10. In November 2015, the applicant engaged the assistance of a Ms Mather, to locate potential new tenants. The applicant alleges 10-12 potential tenants were denied interviews by the respondent which would enable it to decide whether to provide consent for the proposed tenancy agreement. This allegation is supported by a statutory declaration of Ms Mather dated 1 May 2017. Ms Mather was not available for cross examination at the hearing. Mr Gerald Searle, the operator of the community, gave oral evidence that only two or three potential tenants approached him, and none of them completed and submitted the formal application the respondent requires to decide whether to provide consent. The respondent’s evidence was that the only formal application he received was from a Ms Scott, and this was approved in late January 2017. On the evidence before it, the Tribunal is unable to be satisfied on the balance of probabilities the respondent unreasonably refused to consent to any request by the applicant to sublet the site.

11. Ms Scott’s tenancy agreement commenced on 10 February 2016, and was for a period of 12 months. At the end of that period, or shortly before the end, Ms Scott asked Mr Searle if she could extend the tenancy agreement. Mr Searle told her she could not, as under the Act he was not required to do so.

12. Consequently, Ms Scott vacated the site shortly after the tenancy agreement expired on 10 February 2017.

13. The respondent has made it clear to the applicant, both before and after 10 February 2017, that it did not believe it was required to give consent for any new tenancy agreement to be granted, and could refuse such consent for no reason.

14. There was no evidence the applicant had sought the respondent’s consent to her entering into a tenancy agreement with any particular person after Ms Scott vacated the site at the end of her tenancy.

The positions of the parties

15. Essentially the applicant’s case is that her right to sublease the site under her site agreement continues after the Act commenced, because of the “Continuation” clause in the site agreement, and the transitional provisions of the Act. Accordingly, the applicant says the respondent cannot unreasonably refuse to consent to a sublease.

16. The respondent contends, that since the Act commenced, it cannot be compelled to consent to a sublease more than once in a 3 year period, and only in respect of a sublease for 12 months or less.

The law

17. The relevant provisions of the Act are as follows.

Section 6 - Application of Act to site agreements

(1) This Act applies to all site agreements, whether existing immediately before or coming into existence after the commencement of this section, unless a provision of or under this Act provides otherwise.

(2) Where this Act applies to a site agreement, it so applies despite the terms of the agreement or any other contract, agreement or arrangement, whether made before or after the commencement of this section.

(3) This Act applies to a site agreement until it is terminated in accordance with this Act.

Clause 5 of Schedule 2 to the Act

Existing agreements

(1) Agreements entered into under the repealed Act that have not been terminated remain valid after the commencement of the relevant provisions of this Act.

Section 45 Sub-letting residential site or assignment of site agreement

(1) A home owner may, with the written consent of the operator of the community:

(a) enter into a tenancy agreement for, or otherwise sub-let, the residential site or the home located on it, or

(b) assign the site agreement.

(2) The operator must not unreasonably withhold or refuse consent for a tenancy agreement or other sub-lease that is proposed to be entered into or granted once during any 3-year period in which the site agreement has effect and is for a term of 12 months or less.

(3) The operator must not unreasonably withhold or refuse consent to the assignment of a tenancy agreement.

(4) Section 133B of the Conveyancing Act1919 does not prevent the operator from withholding or refusing consent, for any or no reason, for a tenancy agreement or other sub-lease if it is for a term exceeding 12 months.

(5) This section has effect despite the terms of the site agreement and does not prevent the home owner from selling the home on site or from having additional occupants as contemplated by section 44.

(6) The Tribunal may, on application by the home owner or operator, make orders to settle a dispute arising under this section, including but not limited to:

(a) a dispute arising where consent was withheld or refused, and

(b) a dispute arising where the term of a tenancy agreement or other sub-lease exceeds 12 months.

Section 133B of the Conveyancing Act 1919 relevantly says

133B Covenants against assigning etc

(1) In all leases whether made before or after the commencement of the Conveyancing (Amendment) Act 1930 containing a covenant, condition, or agreement against assigning, underletting, charging, or parting with the possession of demised premises or any part thereof without licence or consent, such covenant, condition, or agreement shall, notwithstanding any express provision to the contrary, be deemed to be subject:

(a) to a proviso to the effect that such licence or consent is not to be unreasonably withheld, but this proviso does not preclude the right of the lessor to require payment of a reasonable sum in respect of any legal or other expenses incurred in connection with such licence or consent,

Application of the law to the findings

18. Clause 5 of schedule 2 of the Act preserves the existing rights of home owners, where those rights are contained in the terms of site agreements between them and operators, unless the Act specifically says those terms are over-ridden. The question then becomes, does section 45 override the applicant’s rights contained in clause 20 of the site agreement she has with the respondent, to sublet her home?

19. In the Tribunal’s view, section 45 does override the applicant’s rights in the site agreement to sublet the site. This is because of the wording in subsection 5 that “this section has effect despite the terms of the site agreement…..” The subsection specifically ousts the terms of the site agreement that have generally been preserved by clause 5 of schedule 2 of the Act, insofar as those terms relate to subletting. This is reinforced by subsection 2 of section 6 of the Act that “Where this Act applies to a site agreement, it so applies, despite the terms of the agreement……”

20. In reaching this conclusion, I have had regard to the second reading speech of the Bill. There is no specific mention of the changes to a resident’s right to sublet, and it provides no assistance in determining Parliament’s intention when enacting section 45. The speech does not support the respondent’s submission the section is intended to ensure communities in caravan parks are “for people who primarily live their home”, or to prevent home owners from earning income from their homes. However on a plain reading of section 45, it seems clear the section is intended to allow an operator to withhold or refuse consent to a sub-lease for any or no reason, except once in a 3 year period, and then only when the lease is for 12 months or less.

Conclusion

21. In relation to the application for an order that the respondent be directed to consent to further subletting of her home, the application is dismissed.

22. In relation to the application for compensation for loss of rent sustained as a result of the respondent’s delay and refusal to consent to the tenancy agreement, that application is dismissed. This claim is in two parts. The first is for compensation for lost rent because of an alleged unreasonable refusal or withholding of consent to Ms Scott’s tenancy. As the Tribunal was unable to be satisfied there was any such unreasonable withholding or refusal that part of the claim must fail. The second part of the claim is for rent lost because of the respondent’s refusal or withholding of consent to another tenancy after Ms Scott’s ended. As the Tribunal has found the operator is entitled to do so, this part of the claim for compensation should be also be dismissed.

23. In relation to the application for an order the respondent expedite interviewing of proposed tenants, as the Tribunal has found the operator is entitled to withhold or refuse consent to any proposed tenancy, this application should be dismissed.

24. In relation to the application for an order that Mr Michael Poling be appointed as the applicant’s agent and representative in relation to her site, the Tribunal agrees with the respondent that no such order is necessary, as it does not object to Mr Poling’s appointment. All that needs to be done is for the parties to follow the procedure in section 46 of the Act. Nor is there any need for an order that Mr Poling be given access to the site. As agent for the home owner, he is entitled to such access, and the respondent has stated it does not object to him having such access. This application should therefore be dismissed.

25. Finally, the applicant’s claim for her costs associated with the application, including the costs of travelling from the United States and back, should be refused on two bases. First, on the basis costs generally are not payable to an unsuccessful party. Secondly, even if the application had been successful, section 60 of the Civil and Administrative Tribunal Act says that parties are to pay their own costs, unless there are special circumstances. Subsection 3 of that section sets out a number of factors the Tribunal may consider in determining whether special circumstances exist, and those have been considered, along with the fact the applicant travelled from the United States to attend the hearing. The Tribunal finds there are no special circumstances that would have warranted an order for costs, even if the applicant had succeeded. The application for costs should be refused.

26. Accordingly, the application should be dismissed.

W Priestley

General Member

New South Wales Civil and Administrative Tribunal

12 September 2017

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Amendments

01 November 2017 - overwriting decision that was published in error

Decision last updated: 01 November 2017