South Canberra Holdings Pty Ltd ACN 606 747 602 v Saunders (Residential Tenancies)
[2021] ACAT 109
•11 November 2021
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
SOUTH CANBERRA HOLDINGS PTY LTD ACN 606 747 602 v SAUNDERS (Residential Tenancies) [2021] ACAT 109
RT 319/2021
Catchwords: RESIDENTIAL TENANCIES – whether licence to occupy a serviced site in a residential park for the purpose of placing a mobile home (owned by the occupant) on the site and using it as the occupant’s permanent place of residence is an ‘occupancy agreement’ for the purposes of part 5 of the Residential Tenancies Act 1997 – where occupant’s period of occupation in the order of twenty years – where operator gave six months’ plus one week notice of termination of the occupancy agreement for no cause – whether at the relevant time the operator had a statutory right to terminate the agreement on reasonable notice – whether notice period was reasonable in the circumstances – whether amendments to part 5 of the Residential Tenancies Act 1997 that commenced on 3 March 2021 affected the operator’s accrued right to terminate the occupancy agreement on reasonable notice – notice of termination found to be valid
Legislation cited: Legislation Act 2001 ss 75B, 84
Residential Tenancies Act 1997 (Republication No 40) ss 6A, 6B, 6D, 6E, 6F, 71C, 71D, 71E, 71F, 71G, 74
Residential Tenancies Act 1997 (Republication No 66) s 71E,
Residential Tenancies Act 1997 (Republication No 71) ss 71C, 71D, 71E, 71EA, 71EK, 71H, 71N, 71O, 83(1)
Residential Tenancies Amendment Act 2020 (No 2)
Cases cited:Australian Blue Metal Ltd v Hughes 36 ALJR 139
Australian Broadcasting Commission v Australasian Performing Rights Association Ltd (1973) 129 CLR 99
BP Refinery (Westenport) Pty Ltd v Shire of Hastings (1997) 180 CLR 266
Commissioner for Social Housing in the ACT v Cotsell [2012] ACAT 25
Grundel v Registrar General (1990) BPR 11217
Lucas v Mok (1983) 9 Fam LR 180
Olde v Metro Surf Australia Pty Ltd [2012] NSWSC 618
Rogangardiner v Woolworths Ltd [2012] WASCA 31Southside Canberra Holdings Pty Ltd v Hanel [2019] ACAT 62
Texts cited:J.D. Heydon, Heydon on Contract (Thomson Reuters, 2019) J.W. Carter, Contract Law in Australia (LexisNexis Butterworths, 7th ed, 2018)
Macquarie Dictionary (8th ed, 2020)
Tribunal: Senior Member M Orlov
Date of Orders: 11 November 2021
Date of Reasons for Decision: 11 November 2021
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) RT 319/2021
BETWEEN:
SOUTH CANBERRA HOLDINGS PTY LTD
ACN 606 747 602
Applicant
AND:
KAYE SAUNDERS
Respondent
TRIBUNAL:Senior Member M Orlov
DATE:11 November 2021
ORDER
The Tribunal orders that:
The separate question whether the applicant’s notice of termination dated 22 September 2021 is valid, is answered in the affirmative.
The application will be listed for directions on a date notified to the parties by the Registry.
………………………………..
Senior Member M Orlov
REASONS FOR DECISION
The applicant, South Canberra Holdings Pty Ltd, is the Crown lessee and operator of the Canberra South Motor Park in Fyshwick (Southside Village). The respondent, Ms Saunders, is a long-term occupant of site no. 195 under a written ‘licence to occupy’ dated 25 January 2013, which was granted to her by the applicant’s predecessor in title. The respondent owns a mobile home[1] which was installed on the site at the time of her purchase. The date on which she became the owner is not established by the evidence, but the respondent’s submissions suggest that the home has been her principal place of residence for about 20 years. The applicant purchased the residential park in August 2015 and, by a notice of attornment, became the grantor under of the respondent’s ‘licence to occupy’.
[1] When the ‘licence to occupy’ was granted, ‘mobile home’ was defined in the Dictionary to the Act as a dwelling (whether on wheels or not) that can be transferred from place to place and re-erected. Following amendments to the Act that commenced on 3 March 2021, ‘mobile home’ now means a motor vehicle, caravan or other trailer, or other registerable vehicle under the Road Transport (Vehicle Registration) Act 1999 that is used as a home. A new term has been introduced – namely ‘manufactured home’ which is defined as a structure, other than a caravan or tent that (a) has the character of residential premises; and (b) is designed, built, manufactured to be transported from one place to another for use as a home; and (c) is not permanently attached to the land.
On 22 September 2020, the applicant served a ‘Notice of Termination of Occupation Agreement’ on the respondent stating:
TAKE NOTE THAT South Canberra Holdings Pty Limited (ABN 53 837 450 170) gives you notice of termination of the 7 day licence to occupy between us dated the 25/1/2013.
You are required to provide vacant possession of the site (including removal of all structures and degree on the site) by close of business on the 31/3/2021 being 6 months plus 1 week. You are required to ensure all occupancy fees and service availability charges are paid up to the date of vacant possession.
On 12 April 2021, in response to an enquiry by the respondent’s solicitor as to the reasons for issuing the notice, the applicant advised:
The Termination notice is issued without reason.
The relevant legislation that applies is Part 5A of the ACT Residential Tenancies Act.
The 6 months notice is a reasonable timeframe in this instance.
The front page of the ‘licence to occupy’ states:
APPLICATION FOR LICENCE TO OCCUPY ON A WEEKLY BASIS
The Concessional Tariff is based upon payment of two or four weeks in advance on arrival. To maintain this Concessional Tariff, your account must remain in advance by at least (1) week at all times. If the duration of your stay is less than (2) weeks in Motel or Cabin accommodation, or (4) weeks powered site the tariff is reverted to tourist nightly rate.
FULL NAME (S) OF ALL OCCUPANTS:
…
…
ONE WEEKS NOTICE IS REQUIRED PRIOR TO TERMINATION OF THE ABOVE ACCOMMODATION
Refund of key deposit (Cabin and Motel accomm.,) Are paid in cash on departure providing the unit is in order. Cheque payment can be arranged.
I, ACKNOWLEDGE THAT I HAVE RECEIVED A COPY OF THE “CONDITIONS” TO BE OBSERVED BY PARK RESIDENTS.
Printed on the back (or possibly on a separate page) under the heading ‘LICENCE TO OCCUPY’ is a list of 18 conditions. Presently relevant is the following:
This licence is granted subject to the following conditions:
1. Park Management has the right to determine this licence, upon giving 1 hours notice, which may be given at any time.
The respondent did not give vacant possession of the site by 31 March 2021, and, on 15 April 2021, the respondent filed an application for resolution of a dispute under the Residential Tenancies Act 1997 seeking an order for termination and vacant possession.
On 1 July 2021, the Tribunal ordered that the question whether the notice of termination dated 22 September 2020 is valid should be decided by the Tribunal on the papers as a separate question, in advance of the determination of the remaining issues, if any.
Before I refer to the parties’ submissions it is necessary to explain the legislative context in which the dispute arises.
Relevant legislation
Part 5A of the Act Residential Tenancies Act 1997 (RT Act) applies to occupancy agreements.
Part 5A, as in force on 25 January 2013[2] when the applicant granted the ‘licence to occupy’, was amended substantially by the Residential Tenancies Amendment Act 2020 (No 2) (Amendment Act), the relevant parts of which commenced on 3 March 2021. As well as amending and adding to the provisions of Part 5A, the amendments included a new Part B that applies to residential parks.
[2] Revision 40 of the Residential Tenancies Act 1997 applies.
The amendments were intended to:
(a)clarify the difference between an occupancy agreement and a residential tenancy agreement;
(b)mandate that certain occupancy principles would form part of an occupancy agreement;
(c)amend the complex legal framework applicable to people who resided in caravan parks and manufactured home parks to provide greater clarity and certainty when a resident seeks to sell the dwelling they own while erected within a residential park.[3]
Part 5A and other relevant provision of the Act (as in force on 25 January 2013)
[3] Australian Capital Territory, Parliamentary Debates, Legislative Assembly, 13 February 2020 (Gordon Ramsay, Attorney-General), “Residential Tenancies Amendment Bill 2020” (Amendment Bill) pages 213 – 214
Prior to the amendments, section 71C(1) set out the requirements for an agreement to be an ‘occupancy agreement’:
(a)under the agreement the ‘grantor’[4] must give the ‘occupant’[5] the right to occupy stated ‘premises’;[6]
(b)the premises are for the occupant to use as a home (whether or not with other people);
(c)the right is given for value; and
(d)the agreement is not a residential tenancy agreement.
[4] Section 71A defines a ‘grantor’ as a “person who grants a right of occupation under an occupancy agreement” (and did so when the ‘licence to occupy’ was granted).
[5] Section 71B defines an ‘occupant’ as a person who “has a right of occupation under an occupancy agreement” (and did so when the ‘licence to occupy’ was granted).
[6] ‘premises’ is defined in the Dictionary to the RT Act to include: “(a) any habitable structure, whether it is fixed to the land or not; (b) part of any premises; and (c) any land, buildings or structures belonging to the premises” (and did so when the ‘licence to occupy’ was granted).
Section 71C(2) provided that the agreement may be express or implied, or in writing, oral, or partly in writing and partly oral. Section 71C(3) provided that the right to occupy may be exclusive or not, and may be given with a right to use facilities, furniture, or goods. Section 71C(4) provided that the occupier may be a boarder or lodger, or someone prescribed by regulation for this section.
Section 6A(1) set out the requirements for an agreement to be a residential tenancy agreement in identical terms to section 71C(1). Section 6A(2) and (3) was identical to section 71C(2) and (3). To this point, the requirements for an agreement to be a residential tenancy agreement or occupancy agreement were indistinguishable. However, section 6A(4) stated that section 6A was subject to the exceptions in sections 6D, 6E and 6F.
Section 6D referred to agreements arising under a mortgage and is not relevant to this discussion.
Section 6E provided that a residential tenancy agreement does not include an agreement for the right to occupy premises if the occupier is a party to an agreement for the sale or purchase of the premises, or a boarder or lodger, or a person prescribed by regulation.
Section 6F provided that a residential tenancy agreement does not include an agreement for the right to occupy premises if the premises are, among other things, a caravan or ‘mobile home’ in a ‘mobile home park’. A ‘mobile home’ was defined in the Dictionary to the Act to mean a dwelling (whether on wheels or not) that can be transferred from place to place and re-erected. A ‘mobile home park’ was defined to mean land lawfully used for the purpose of accommodating mobile homes or caravans, and includes a caravan park or camping ground.
However, section 6B provided that despite section 6A(4), an agreement is a residential tenancy agreement if it complies with section 6A(1) to (3), is in writing, and expressly states that it is a residential tenancy agreement.
If an agreement was properly classed as an occupancy agreement, rather than a residential tenancy agreement, section 71D provided that the occupancy agreement started on the earliest of:
(a)the day stated in the agreement;
(b)the first day both parties signed the agreement and received a copy signed by the other;
(c)the day the occupant took possession of the premises; or
(d)the first day the grantor received rent from the occupant.
There was no provision for when an occupancy agreement ends.
Section 71E provided in part:
(1) In considering a matter, or making a decision, under this Act in relation to an occupancy agreement for premises, a person must have regard to the following principles (the occupancy principles):
…
(c)an occupant is entitled to the certainty of having the occupancy agreement in writing if the occupancy continues for longer than 6 weeks;
…
(g)an occupant is entitled to know why and how the occupancy may be terminated, including how much notice will be given before eviction;
(h)an occupant must not be evicted without reasonable notice;
Section 74 provided that in considering a matter, or making a decision under part 6 of the Act in relation to an occupancy dispute, the ACAT must have regard to the occupancy principles.
Section 71F provided that regulations may make provisions in relation to occupancy agreements, including prescribing standard occupancy terms.
Section 71G provided that an occupancy agreement:
(a)must contain, and is taken to contain, terms to the effect of the standard occupancy terms prescribed by regulation; and
(b)may contain any other terms that is consistent with the standard occupancy terms, and the occupancy principles.
However, standard occupancy terms were never prescribed.
Part 5A and other relevant provision of the Act on and after 3 March 2021
Upon commencement of the Amendment Act,[7] section 71C(1) provided that an agreement was an occupancy agreement if:
(a)pursuant to subsection 71C(1)(a), the grantor gives the occupant a right to occupy stated premises; and the premises are for the occupant to use as a home (whether or not with other people); and the right is given for value (i.e. the same as the previous section 71C(1) requirements); and
(b)additionally, pursuant to subsection 71C(1)(b), the agreement is one of six species of agreement.
[7] Residential Tenancies Act 1997 (Republication No 71) part 5A
Relevant to this case, subsection 71C(1)(b)(vi) includes an agreement to occupy premises provided by the grantor in a ‘residential park’,[8] or a site in a residential park, for the purpose of the occupant placing a manufactured home or a mobile home on the site, except if section 6B applies. Relevantly, section 6B(c) provides that an agreement is a residential tenancy agreement if it expressly states that it is a residential tenancy agreement. There are other requirements, but they need not be considered here.
[8] ‘residential park’ is now defined in the Dictionary to the RT Act as “(a)...land that includes – (i) sites for accommodating manufactured homes mobile homes; and (ii) common areas and facilities for the use of people occupying the manufactured homes or mobile homes; and (b) includes a caravan park camping ground”.
Section 71C(2) and (3) remains unchanged. A note inserted below subsection 71C(2) states that “After 6 weeks, the occupancy agreement should be in writing (see s 71E(c))”. There is no longer a section 71E(c). Instead, the note should refer to section 71EA(1)(b), which I discuss later.
Section 71D now provides not only when an occupancy agreement starts, but also when it ends. Under section 71D(2)(b), if the agreement is not for a fixed term, the agreement ends on a day agreed by the grantor and occupant, or the day the agreement is terminated under section 71EK. The parties to the present dispute have focused their attention on the operation of that section. However, as I will explain, section 71EK is irrelevant to the outcome.
It is convenient at this point to digress briefly to mention relevant provisions of the new part 5B of the RT Act.
Section 71H contains the following definitions:
operator, of a residential park, means the person who manages, controls or otherwise operates the residential park, including by granting rights of occupancy under a residential park agreement, whether or not the person is the owner of the residential park.
residential park agreement means a residential tenancy agreement or an occupancy agreement in relation to a manufactured home or a mobile home that is located in a residential park and includes a site agreement.
site agreement means an agreement under which an operator grants another person, for value, a right to occupy a site in the operator’s residential park, for the purpose of placing a manufactured home or a mobile home on the site for use as a home.
Division 5B.3 provides for assignment of a tenant’s or occupant’s interest in a residential park agreement subject to the operator’s consent.
Division 5B.4 provides for the sale of manufactured homes and mobile homes located in a residential park under a site agreement. Section 71N includes provisions prohibiting the operator from hindering a person’s sale of premises. Section 71O includes provisions requiring the buyer of a manufactured home or mobile home to remove it from the residential park within a specified time unless the seller has assigned the site agreement to the buyer and the buyer has entered into a new site agreement with the operator.
Returning to part 5A, the old section 71E was replaced by a new section 71E, which provides, in subsection 71E(1), that an occupancy agreement is taken to contain the ‘occupancy principles’ as in force from time to time. The ‘occupancy principles’ are now set out in a new section 71EA.
Section 71E(1) provides that an occupancy agreement may contain ‘occupancy rules’[9] and ‘additional terms’. ‘Additional terms’ is not defined. As an occupancy agreement may, rather than must, contain ‘additional terms’, I interpret the words to mean any term of the agreement, other than a term that is essential for the agreement to meet the minimum requirements for an occupancy agreement in section 71C(1)(a) and (b), and may include a term providing for matters covered or required by any one or more of the occupancy principles in section 71EA.
[9] ‘occupancy rules’ as defined in section 71E(1)(b)(i) are “rules about occupying the premises”.
Section 71E(2) states that an occupancy rule or additional term is void if it inconsistent with the occupancy principles, the Act, or another territory law.
The Revised Explanatory Statement for the Residential Tenancies Amendment Bill 2020 makes it clear that section 71E is intended to apply to all existing occupancy agreements. Thus, on and from 3 March 2021, all existing occupancy agreements are taken to include the occupancy principles in section 71EA. Any occupancy rules or additional terms of an existing occupancy agreement that are inconsistent with the occupancy principles are void.
Relevant to the present case are the occupancy principles in subsections 71EA(1)(b), (l) and (m).
The occupancy principle in subsection 71EA(1)(b) provides that where the agreement is for a fixed term of more than six weeks or the total time the occupant occupies the premises under the agreement is more than six weeks, the grantor must ensure that the occupancy agreement is in writing. Although it follows from section 71C(2) that an additional term of an occupancy agreement may be implied, written, oral, or partly written and partly oral, where section 71EA(1)(b) applies, all the terms of the agreement must be in writing. Where the agreement is not for a fixed term of more than six weeks, under section 71EA(1)(b)(ii) the grantor must ensure that the occupancy agreement is in writing only after the period of occupation under the agreement has extended beyond six weeks. Implicitly, the grantor must have a reasonable time after the expiry of the six-week period within which to comply. A consequence if the grantor fails to comply with section 71EA(1)(b) is that the occupant may have a right to terminate the agreement under section 71EK (to which I will come shortly) for breach of an occupancy principle.
The occupancy principle in subsection 71EA(1)(l) provides that a party to the occupancy agreement must not terminate the agreement otherwise than in accordance with section 71EK.
The occupancy principle in subsection 71EA(1)(m) states that an occupant must vacate the premises when the agreement ends.
Section 71EK provides the only means by which the grantor or occupant can terminate an occupancy agreement. Relevantly, subsections (1) to (3) state:
(1) The grantor must ensure an occupancy agreement states –
(a)under what circumstances the occupancy agreement may be terminated; and
(b)a reasonable period of notice must be given by a party before the agreement is terminated.
(2) For subsection (1) (a), the occupancy agreement may only allow a party to terminate the agreement under circumstances that are reasonable having regard to the nature of the occupancy.
Examples–nature of occupancy
1whether the occupancies of the premises are usually long-term or short-term
2whether the agreement is for a fixed term or is periodic
3whether the accommodation is provided by a commercial provider or is in someone’s residence
(3) A party may only terminate an occupancy agreement if –
(a)all parties to the agreement agree; or
(b)the agreement allows the party to do so and the party has given notice in accordance with the agreement; or
(c)the other party has –
(i)breached an occupancy principle or the occupancy agreement; and
(ii)the breach justifies the termination of the agreement.
NoteAn occupant may also terminate that agreement if the grantor gives notice of a change to the occupancy rules, fees, charges or penalties (see s 71EG(3)).
The parties’ submissions
Both parties submitted that the ‘licence to occupy’ is an occupancy agreement.
The applicant’s case
The applicant did not rely on clause 1 of the conditions, which allows the applicant to terminate the licence on one hour’s notice. Instead, the applicant submitted that the agreement granted the respondent a licence to occupy the site on a weekly basis and provided expressly for the licence to be terminated by either party on one week’s notice. This met the requirements of clause 71EK(1).
Alternatively, if it did not, the applicant submitted that the right to terminate under section 71EK(3) is not conditional on compliance with section 71EK(1).
In the further alternative, the applicant submitted that if the Tribunal finds that the express term providing for termination on one week’s notice is void for inconsistency with section 71EK(1), a term should be implied allowing either party to terminate the agreement on reasonable notice. The applicant gave examples of cases where courts have held that a licence to occupy premises may be terminated upon reasonable notice.[10]
[10] Olde v Metro Surf Australia Pty Ltd [2012] NSWSC 618, at [12] (Windeyer AJ); Lucas v Mok (1983) 9 Fam LR 180, at 185 (McLelland J); Grundel v Registrar General (1990) BPR 11217, at 11222 (McLelland J).
The applicant submitted that the length of the required notice period is a question of fact to be decided considering the objective circumstances as they exist at the time notice is, or should have been, given.[11]
[11] Rogangardiner v Woolworths Ltd [2012] WASCA 31, at [49]
The applicant referred to the observations of the Privy Council in Australian Blue Metal Ltd v Hughes (1963) 36 ALJR 139, at 143 (Australian Blue Metal) in relation to the considerations that are relevant to whether a period of notice is reasonable:
The implication of reasonable notice is intended to serve only the common purpose of the parties… The reasonable time for the fulfilment of the purpose is a matter to be determined as at the date of the notice. The common purpose is frequently derived from the desire that both parties may be expected to have to cushion themselves against sudden change, giving themselves time to make alternative arrangements of a sort similar to those which are being terminated.
The applicant submitted that seven days’ notice is reasonable in the circumstances (although, in fact, the applicant gave a much longer period of notice) because:
(a)the agreement provided for a week-to-week arrangement;
(b)the only consideration paid or payable by the respondent was a weekly charge;
(c)no fee or consideration was ever payable to secure occupation rights beyond one week at a time;
(d)the Supplementary Explanatory Memorandum for the Amendment Bill explained that section 71EK was intended to allow termination in circumstances that are reasonable having regard to the nature of the agreement, which in this case is a weekly licence.
In the alternative, the applicant submitted that six months’ notice was reasonable because:
(a)rule 94 of schedule 1 of the Act, provides that a residential tenancy agreement may be terminated without cause by the lessor giving 26 weeks’ notice. The same period of notice should be considered reasonable for the purpose of terminating an occupancy agreement without cause;
(b)the Supplementary Explanatory Memorandum for the Amendment Bill explained that section 71EK is intended to protect occupants against arbitrary or otherwise unreasonable termination. Six months’ notice could not be considered arbitrary or unreasonable; and
(c)the respondent had sufficient time to cushion herself against the change and had time to make alternative arrangements because, so the applicant claimed, the respondent has not resided at the site for three years and the site has become damaged, not fit for habitation, dilapidated, and run down.
I should say at this point that there was no evidence before me to support the last-mentioned claim. Depending how the separate question is decided, these issues may become relevant to the Tribunal’s discretion to make a termination and possession order under section 83 of the RT Act.
The respondent’s case
The respondent submitted that the clause providing that “one weeks [sic] notice is required prior to termination of the above accommodation” does not expressly confer a termination power on either party. If it was intended to confer a right of termination on the grantor, the term would be expected to say something like “the grantor or the lessor may terminate this agreement for any reason on the provision of 7 days’ notice to the other party”.
Next, the respondent submitted that the term does not meet the requirements of section 71EK(1), which establishes a clear distinction between the concept of the “circumstances” under which the occupancy agreement may be terminated (in subclause (a)) and a “reasonable notice period” that must be given before the agreement is terminated (in subclause (b)). The respondent accepted that a term of an occupancy agreement could provide for termination without cause but, to comply with section 71EK(1), the term would have to say so specifically. The term in question did not meet that requirement.
Further, if the term is considered to give the applicant the right to terminate the agreement on one week’s notice, the period of notice was not reasonable having regard to the nature of the occupancy. The respondent submitted that the occupancy had been on foot for many years and related to a plot of land upon which is constructed a substantial, permanent structure, which is her manufactured home. The home is plumbed into utilities operated by the applicant and is, in part, concreted into the ground. The respondent submitted that the notion that the structure could reasonably be expected to be dismounted and removed from the site in the space of one week was divorced from reality.
In response to the applicant’s submission that a term should be implied permitting termination by either party on reasonable notice (without cause), the respondent submitted that such a term could not be justified applying the principles established by the Privy Council in BP Refinery (Westenport) Pty Ltd v Shire of Hastings (1997) 180 CLR 266, at 283 (BP Refinery).
Finally, the respondent submitted that the decisions on which the applicant relied for the proposition that a licence to occupy premises may be terminated on reasonable notice (Olde v Metro Surf Club, Lucas v Mok, and Grundel v Registrar – General)[12] did not assist the applicant’s case because they were decided on the basis that the occupancy agreements were simply contracts at common law that were not regulated by legislation, unlike the occupancy agreement in this case.
The issues
[12] Referred to at paragraph 47
I consider the following issues arise for determination.
(a)Is the ‘licence to occupy’ an occupancy agreement?
(b)If it is, can the applicant terminate the agreement on reasonable notice?
(c)Is six-months plus one week reasonable notice?
(d)Does section 71EK affect the result?
Consideration
Is the ‘licence to occupy’ an occupancy agreement?
The right granted to the respondent by the applicant’s predecessor in title is a right to exclusive possession of site no. 195 for the purpose of placing a mobile home on the site and using it as her permanent place of residence. The ‘premises’ is the land, which the applicant owns. The mobile home sits on the applicant’s land, but is owned by the respondent. Does that amount to an agreement for a person to occupy “stated premises”, where the ‘premises’ are for the occupant to “use as a home”, within the meaning of section 71C(1) as in force on 25 January 2013? The primary meaning of ‘home’ is “a house, or other shelter that is the fixed residence of a person, a family, or a household”.[13] It is similar to ‘dwelling’, which means “a place of residence or abode; a house”.[14] It is odd to speak of land being used ‘as’ a home, rather than ‘for’ a home, where the land and the mobile home sitting on the land have different owners.
[13] Macquarie Dictionary (8th ed, 2020) ‘home’
[14] Macquarie Dictionary (8th ed, 2020) ‘dwelling’
The appeal tribunal, constituted by General President Crebbin, Senior Member Anforth and Senior Member Lennard, considered this issue in Commissioner for Social Housing in the ACT v Cotsell [2012] ACAT 25 (Cotsell). The tribunal concluded that:
31. In regulating a residential tenancy matter as it does, the Act clearly intends that a residential tenancy agreement will arise if, and only if, the lessor owns both the land and the dwelling.
32. The intention is reinforced by the occupancy principles set out in s 71E of the Act. Section 71E (2) provides that if an occupant occupies a mobile home on land in a mobile home park and the mobile home is not provided by the grantor, the occupancy principle in 1(e) applies to the land and any fixtures provided by the grantor, but not to the mobile home [emphasis added].
33. This evinces a clear intention that those parts of the Act that concern occupancy agreements, apply in situations where the land is owned by the grantor and a mobile home on the land is owned by the occupier or grantee. The land and home are in those circumstances properly described as premises for the purposes of the definition of occupancy agreement in s 71C.
34. Reading sections 6A, 6F(1), 71C and 71E of the Act together, the tribunal concludes that if an agreement between the parties relates to a mobile home on land in a mobile home park, where the land is owned by one party and the mobile home is owned by a second party and the second party has the right, under the agreement, to place the mobile home on the land of the first party then:
a.‘Premises’ will include both the land and the mobile home, and
b.The agreement will be an occupancy agreement, subject to the occupancy principles as limited by section 71E(2).
The present circumstances are relevantly indistinguishable from those considered by the appeal tribunal in Cotsell. Accordingly, I consider that the ‘licence to occupy’ dated 25 January 2013 was an ‘occupancy agreement’ under part 5 of the RT Act and, following the commencement of the Amendment Act, is an ‘occupancy agreement’ under part 5A of the RT Act.
Can the applicant terminate the agreement on reasonable notice?
The right of occupation that the respondent has enjoyed since 25 January 2013, and for many years prior to that,[15] is a right to exclusive possession of site no. 195 for the purpose of placing and maintaining a mobile home on the site for use as her permanent place of residence, subject to paying a weekly concessional tariff. Implicitly, the right to exclusive possession of the site for that purpose includes a right to connect to, and use, the services provided by the park operator (power, water, and sewerage) for as long as the mobile home remains on the site.
[15] According to the respondent’s submissions, she purchased the already standing manufactured home and moved to the Canberra South Motor Park in the early 2000’s.
The ‘licence to occupy’ does not, in express terms, confer any right on the respondent to occupy site no. 195 for that purpose. Yet that clearly is the evident purpose of the agreement and the basis upon which the parties (including the applicant’s predecessor in title) have conducted their relationship for somewhere in the order twenty years.
The ‘licence to occupy’ and the accompanying conditions appear to be a pro-forma document. The pro-forma terms provide for the occupant to apply for, and be granted, a licence to occupy motel or cabin accommodation, or a powered site on a weekly basis. Powered sites typically are provided for use by caravans and motorhomes.[16] The Concessional Tariff is predicated on payment of two or four weeks in advance depending on whether the licence relates to motel or cabin accommodation or a powered site. If the duration of the stay is less than two weeks for motel or cabin accommodation, or four weeks for a powered site, the tariff reverts to the tourist nightly rate. One week’s notice must be given “prior to termination of the above accommodation” and refund of the key deposit for cabin and motel accommodation will be paid in cash on departure provided the unit is in order. Further, park management reserves the right to determine the licence upon one hour’s notice, which (prior to the commencement of the Amendment Act) could well have been appropriate where short-term residents are found to be disruptive, violent, or otherwise engage in anti-social behaviour that disturbs the peace and quiet enjoyment of other residents of the park.
[16] Clause 14 of the conditions of the pro-forma ‘licence to occupy’ states that “All sites and accommodation to be vacated by 10.00am or another days tariff will be charged”.
It is a long-standing principle of construction that a commercial contract should not be construed in such a way as to produce an absurd result unless the language of the contract demands it.[17] Obviously it would be unreasonable and completely impractical for the applicant to be permitted to terminate the agreement by giving the respondent one week’s notice. At the end of the notice period the respondent would have to give vacant possession of the site, requiring removal of the mobile home and restoration of the site to its pre-installation condition. Selling the mobile home would not be an option, not only because the time to do so would be impossibly short, but also because a buyer would have to commit to removing the mobile home from the site in time to give vacant possession at the end of the week. In my opinion, to construe the terms of the agreement in that way would be contrary to its evident purpose to which I have referred earlier and would produce an absurd result.
[17] J.D. Heydon, Heydon on Contract (Thomson Reuters 2019) [8.650], [8.690]; J.W. Carter, Contract Law in Australia (LexisNexis Butterworths, 7th ed., 2018) at [12.26]
Of course, if the language of a commercial contract is unambiguous, even an absurd or plainly unreasonable result cannot be avoided.[18] However, in my opinion the language of the ‘licence to occupy’ is not so clear as to produce that result. In my opinion, ‘above accommodation’ means motel and cabin accommodation and powered sites for caravans and motorhomes used for temporary stays. On its proper construction, the term providing for “termination of the above accommodation” does not apply to the respondent’s licence to occupy site no. 195, which is of a different nature to a licence to occupy the ‘above accommodation’. Viewed objectively, it cannot have been intended to apply to the occupancy of a serviced site on which the grantor permits a person to place a mobile home to live in as their permanent place of residence.
[18] Australian Broadcasting Commission v Australasian Performing Rights Association Ltd (1973) 129 CLR 99 page 109 (Gibbs J)
That does not mean that the licence was intended to operate in perpetuity. In the absence of an agreement for a fixed term, the licence necessarily must be able to be terminated by either party on reasonable notice. In my view, that result obtains without the need to resort to an implied term.
When the agreement was made, part 5 of the RT Act contemplated that an occupancy agreement must contain standard occupancy terms. However, such terms were not prescribed. Thus, the only statutory modification of the express and any implied contractual rights of a grantor and occupant under an occupancy agreement, was the requirement in section 71E that a person considering or deciding a matter under the RT Act in relation to an occupancy agreement, must have regard to the occupancy principles. Section 74 applied that requirement to the ACAT.
Relevantly, the occupancy principle in section 71E(1)(h) prohibited an occupant from being evicted without reasonable notice. Regardless whether, contrary to my view, the terms of the ‘licence to occupy’ could be understood to give the applicant an express right to terminate the agreement on one week’s notice, or even one hour’s notice, section 71E(1) required that the applicant must have regard to the principle that an occupant must not be evicted without reasonable notice in considering what period of notice it should specify if it wished to terminate the agreement. If the applicant failed to give notice that the ACAT considered was reasonable in all the circumstances and, as a result, the tenant was evicted in contravention of the Act, the ACAT could make an order under section 83(f) restoring the agreement. Even where reasonable notice was given, a termination and possession order under section 83(i) would not necessarily follow as a matter of course.
In my view, prior to the commencement of the Amendment Act, where an occupancy agreement did not provide for a fixed term, section 71E(1)(h) permitted a grantor to terminate an occupancy agreement on reasonable notice, subject to the occupant’s right to dispute the termination, or proposed termination, in the ACAT under part 6 of the RT Act. The grantor’s right to terminate the agreement in those circumstances was statutory, rather than contractual. While it was open for the parties to expressly agree the circumstances in which termination could occur, ultimately the grantor could enforce a contractual right to evict an occupant only where the occupant was given reasonable notice of termination of the occupancy.
The applicant gave notice of termination of the occupancy agreement on 22 September 2020. Its right to do so was governed by section 71E(1)(h).[19] Provided the notice period was reasonable, the occupancy agreement would terminate at the end of the notice period, subject to the respondent’s right to seek relief under part 6 of the RT Act.
[19] The relevant version of the RT Act at that time was Revision No 66.
I consider later whether the commencement of the Amendment Act on 3 March 2021 changed this.
Was the notice period reasonable?
The period of notice was six months plus one week, requiring the respondent to give vacant possession of the site by 31 March 2021.
In Southside Canberra Holdings Pty Ltd v Hanel[20] the tribunal considered that three months’ notice was reasonable in circumstances where the respondent had occupied site no. 315 in Southside Village, and needed time to remove or sell the habitable structure erected on the site.
[20] [2019] ACAT 62 at [29]-[33] (Presidential Member Daniel)
I have some doubt whether three months’ notice would be reasonable where the occupant had occupied the site for some twenty years, but that issue does not arise for decision. The authorities referred to by the applicant show that what may constitute reasonable notice in one case may not necessarily be reasonable notice in another. It depends on the circumstances.
In the present circumstances the respondent does not dispute that six months plus one week was a reasonable period of notice. In the absence of evidence to the contrary, I am inclined to agree.
Does section 71EK affect the outcome?
The ‘occupancy principles’ in section 71EA of the RT Act commenced to apply to the occupancy agreement on 3 March 2021. From that date any additional terms of the occupancy agreement that were inconsistent with the occupancy principles, the RT Act, or any other territory law, became void pursuant to section 71E(2).
Thus, if the applicant wished to give notice of termination on or after 3 March 2021, the applicant could do so only in accordance with section 71EK.
Section 75B of the Legislation Act 2001 requires that there must be a clear indication in the legislation if a law is intended to commence retrospectively. There is nothing in the Amendment Act to indicate an intention for the amendments to operate retrospectively. The Amendment Act does not affect the previous operation of part 5 of the RT Act, or anything done or begun under part 5.[21] Further, pursuant to section 84(2) of the Legislation Act 2001, a remedy in relation to an existing right under part 5 may be exercised and the right may be enforced as if part 5 had not been amended by the Amendment Act.
[21] Legislation Act 2001 section 84(1)(b)
A notice of termination that was validly issued under part 5 of the RT Act, was not invalidated by the commencement of the Amendment Act. Section 71EK is irrelevant to the outcome in this case. The applicant is entitled to seek to enforce the termination of the occupancy agreement upon expiry of the notice period by applying to the ACAT for an order under section 83(1)(i) terminating the occupancy agreement and granting vacant possession of the site.
The only possible relevance of the Amendment Act is that on and from 3 March 2021 the respondent acquired new rights, and the applicant came under new obligations, in relation to the potential sale of the ‘occupant’s premises’ (i.e. the respondent’s mobile home) under Division 5B.4 of the Act, which may have a bearing on the exercise of the Tribunal’s discretion under section 83(1) of the RT Act. I need not say any more about that at this stage, beyond suggesting that the parties consider the issue before the resumption of the hearing.
Conclusion
The appropriate orders are:
(a)The question whether the applicant’s notice of termination dated 22 September 2021 is valid, is answered in the affirmative.
(b)The application will be listed for directions on a date notified to the parties by the Registry.
………………………………..
Senior Member M Orlov
| Date(s) of hearing: | 17 May 2021, 1 July 2021 |
| Applicant: | Ms K Hutcheson |
| Solicitors for the Respondent: | Mr O Morris, Canberra Community Law Mr J Park, Clayton Utz |
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