Tootill v Parklea Operations Pty Limited trading as Gateway Lifestyle Stanhope Gardens

[2019] NSWCATCD 89

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Tootill v Parklea Operations Pty Limited trading as Gateway Lifestyle Stanhope Gardens [2019] NSWCATCD 89

Hearing dates:

8 July 2019

Date of orders:

2 August 2019

Decision date:

02 August 2019

Jurisdiction:

Consumer and Commercial Division

Before:

G Blake AM SC, Senior Member

Decision:

1. The time for the making of each of the applications referred to in Schedule 1 is to the extent necessary extended until 26 October 2018.

2. The time for the making of each of the applications referred to in Schedule 2 is to the extent necessary extended until 26 March 2019.

3. The time for the making of each of the applications referred to in Schedule 3 is to the extent necessary extended until 12 April 2019.

4. The time for the making of each of the applications referred to in Schedule 4 is to the extent necessary extended until 15 May 2019.

5. The respondent is to pay each of the applicants within 14 days the sum of money referred to in Schedule 1, 2, 3 or 4 by way of a refund of overpaid electricity charges up to the date specified in the applicable Schedule.

Catchwords:

RESIDENTIAL COMMUNITIES – Recovery by home owners of monies paid under a mistake of law to Park operator for electricity charges

Legislation Cited:

Australian Consumer Law

Civil and Administrative Tribunal Act 2013 (NSW)

Civil and Administrative Tribunal Rules 2014 (NSW)

Fair Trading Act 1987 (NSW)

Residential (Land Lease) Communities Act 2013 (NSW)

Residential (Land Lease) Communities Regulation 2015 (NSW)

Cases Cited:

Bavin v Parklea Operations Pty Ltd [2019] NSWCATAP 120

David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353

Reckless v Silva Portfolios Pty Ltd [2017] NSWCATCD 57

Reckless v Silva Portfolios Pty Ltd t/as Ballina Waterfront Village and Tourist Park [2018] NSWCATAP 80

Silva Portfolios Pty Ltd trading as Ballina Waterfront Village & Tourist Park v Reckless [2018] NSWSC 1343

Stewart v Raythel Holdings Pty Ltd t/as Colonial Tweed Holiday Home Park [2019] NSWCATCD 48

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Nerida Tootill (Applicant) and the 92 persons referred to in Schedules 1, 2, 3 and 4.
Parklea Operations Pty Limited trading as Gateway Lifestyle Stanhope Gardens (Respondent)

Representation:

P Batley (Applicant)
D Fernandez (Land Lease Living Industry Association of NSW) (Respondent)

File Number(s):

RC 18/46379

Publication restriction:

Nil

REASONS FOR DECISION

Summary

1. In these proceedings the applicant, Nerida Tootill (Ms Tootill), and in 92 other proceedings each of the applicants referred to in Schedules 1, 2, 3 and 4, seeks an order pursuant to s 85(3) of the Residential (Land Lease) Communities Act 2013 (NSW) (RLLC Act), or alternatively s 79N of the Fair Trading Act 1987 (NSW) (FT Act), against the respondent, Parklea Operations Pty Limited trading as Gateway Lifestyle Stanhope Gardens (the Operator), for the recovery of the monies paid under a mistake of law for electricity charges because the Operator charged more than the amount to which it was entitled under s 77(3) of the RLLC Act at Gateway Lifestyle Stanhope Gardens, 30 Majestic Drive, Stanhope Gardens NSW 2768 (the Community).

2. I have decided to make an order pursuant to s 41 of the Civil and Administrative Tribunal Act 2013 (NSW) (CAT Act) extending time for the applicants to make their application as follows:

1. to the extent necessary for the applications referred to in Schedule 1 until 26 October 2018;

2. to the extent necessary for the applications referred to in Schedule 2 until 26 March 2019;

3. to the extent necessary for the applications referred to in Schedule 3 until 12 April 2019;

4. to the extent necessary for the applications referred to in Schedule 4 until 15 May 2019.

3. I have decided to make an order pursuant to s 85(3) of the RLLC Act that the Operator is to pay each of the applicants within 14 days the sum of money referred to in Schedule 1, 2, 3 or 4 by way of a refund of overpaid electricity charges up to the date specified in the applicable Schedule.

Background

4. Each of the applicants is, or was, a “home owner” within the meaning of the RLLC Act at the Community since 1 November 2015 and under their site agreement is required to pay utility charges including electricity to the Operator: 79 since 1 November 2015 and the remaining 14 from various times between 1 November 2015 and April 2019.

5. The Operator is the “operator” of the Community which is a “community” or “residential community” within the meaning of the RLLC Act.

6. Since 1 November 2015 the Operator has been supplied electricity by Origin Energy Electricity Limited (Origin) from 1 November 2015 to 31 August 2017, and from 1 September 2017 to 30 April 2019 by AGL Sales Pty Limited (AGL).

7. The Operator has received monthly invoices for the supply of electricity. The Origin invoice from 1 to 31 January 2017 includes the following components:

1. charges measured in “kWh” which encompass “Energy Charges” (“Peak”, “Off Peak” and “Shoulder”), “Network Charges” (“Peak”, “Off Peak” and “Shoulder”), and “Other Charges” (“ESC Charge”, “LREC Charge”, “AEMO Charge”, “AEMO Ancillary” and “SREC Charge”);

2. charges measured in “kVa” which is a “Demand” charge;

3. charges measured on a daily or monthly basis which encompass “Access Charge”; “Meter Provider/Data Agent Charge” and Service Charge”.

8. The other invoices of Origin and the invoices of AGL contain similar components which have a variety of names.

9. The Operator has been supplied electricity at two connection points which are identified and metered by a separate electrical meter called a NMl (National Metering Identifier), and are interval or smart meters. These types of meters are able to record electricity usage (kWh) at 30 minute intervals and can also record electricity demand in real (kWh) and apparent power (kVA). Resident sites 2 to 190 are on NMI NEEE0008153. Resident sites 191 to 254A are on NMl NEEE0008161.

10. Each of the applicants has been supplied with electricity at 32 amps and has had accumulation meter which can only measure the total energy usage between meter readings.

11. Most of the applicants have been charged for utilities including electricity by the Operator fortnightly up to December 2018 and monthly from January 2019 up to 30 April 2019, and paid for those charges as follows:

1. from about 4 November 2015 to about 6 September 2017, an amount for “Electricity Usage” and an amount for “Electricity Access Fee” which was the amount for supply of electricity to retail customers under the standing offer from time to time of Origin;

2. from about 6 September 2017 to 13 November 2018, an amount for “Electricity Usage” and an amount for “Electricity Access Fee” which was the amount for supply of electricity to retail customers under the standing offer of AGL;

3. in the period between 14 to 26 November 2018, no amount;

4. since 27 November 2018, an amount for “Electricity Usage” which is the proportionate amount of the amount it has paid to AGL.

12. The following applicants have paid the Operator for electricity up to the following dates:

1. Rita Adomian: up to 31 January 2019;

2. Terry Hoskinson: up to 12 March 2019;

3. Carol Anne Meyrick: up to 8 August 2018;

4. Ron Anthony Nicholls: up to 30 October 2018;

5. Patricia Starks: up to 3 October 2018;

6. Heather Schiliro: up to 12 March 2019.

Procedural history

13. On 26 October 2018, each of the 51 applicants referred to in Schedule 1 commenced proceedings in the Tribunal.

14. On 19 February 2019, the Tribunal made directions including for the filing of points of claim and for the hearing of all applications at the same time.

15. On 26 March 2019, each of the 5 applicants referred to in Schedule 2 commenced proceedings in the Tribunal.

16. On 12 April 2019, each of the 23 applicants referred to in Schedule 3 commenced proceedings in the Tribunal.

17. On 15 May 2019, each of the 14 applicants referred to in Schedule 4 commenced proceedings in the Tribunal.

The issues

18. The following four issues arise out of the points of claim filed on 17 May 2019 by Ms Tootill and the Operator’s submission dated 14 June 2019:

1. whether each of the proceedings has been brought in time, and if not whether an order extending the time to bring the proceedings should be made;

2. what is the correct methodology to determine, and calculation of, the amount of the refund under s 77(3) of the RLLC Act;

3. whether the Operator has a defence of change of position to the whole or part of the claim of each of the applicants under s 85(3) of the RLLC Act;

4. whether the position is different if considered as a consumer claim under the FT Act.

The hearing

19. At the hearing:

1. the parties were agreed as to the following facts:

1. that under their site agreement each applicant is required to pay electricity charges to the Operator for the use by the home owner of electricity at the residential site within s 77(1) of the RLLC Act;

2. that the use of electricity by each applicant is separately measured or metered within s 77(2)(a) of the RLLC Act;

3. the Operator gives each applicant an itemised account for electricity charges and allows at least 21 days for the payment to be made within s 77(2)(b) of the RLLC Act;

2. the parties tendered a Joint Tender Bundle which relevantly included:

1. the applicants’ expert witness report of Mr Rohan Harris (Mr Harris) of Oakley Greenwood dated 3 May 2019;

2. the Operator’s expert witness report of Ms Marija Petkovic (Ms Petkovic) of Energy Synapse dated 14 June 2019;

3. the joint report of Mr Harris and Ms Marija Petkovic dated 24 June 2019;

4. the monthly invoices for the supply of electricity of Origin from 1 November 2015 to 31 August 2017, and of AGL from 1 September 2017 to 30 April 2019, received by the Operator;

5. the statutory declaration of Ian Finlayson (Mr Finlayson) dated 26 June 2019.

3. the Operator also tendered a bundle of invoices referable to the improvements, repairs and maintenance at a total cost of $133,942.12 carried out at the Community since 1 November 2015; and

4. oral evidence was given by Mr Harris and Ms Petkovic together, and Mr Finlayson.

Jurisdiction

20. Section 85 of the RLLC Act relevantly provides:

85 Recovery of amounts paid under a mistake of law or fact

1. A home owner is entitled to recover an amount paid under this Part to the operator under a mistake of law or fact.

…

1. The Tribunal may, on application by a home owner or operator, make an order resolving a dispute concerning the operation of this section in the circumstances of a particular case.

   21. Section 157 of the RLLC Act specifies the orders that the Tribunal may make including “an order for the payment of an amount of money” (subs (1)(d)).

   22. Part 6A Division 1 of the FT Act confers jurisdiction on the Tribunal in relation to consumer claims and relevantly provides:

   1. “consumer” means a natural person to whom a supplier has supplied services: s 79D(a);

   2. a “consumer claim” means a claim by a consumer for the payment of a specified sum of money that arises from a supply of services by a supplier to the consumer: s 79E(a);

   3. “services” is a reference to the provision of electricity: s 79F(b);

   4. the supply of services includes providing, granting or rendering services for valuable consideration: s 79G(2)(a);

   5. the Tribunal has jurisdiction to hear and determine a consumer claim only if the services to which the claim relates were supplied in New South Wales:  79J(1)(a);

   6. the Tribunal does not have jurisdiction to hear and determine a consumer claim if the cause of action giving rise to the claim first accrued more than 3 years before the date on which the claim is lodged:  79L(1)(a).

   23. Section 79N(a) of the FT Act provides that in determining a consumer claim wholly or partly in favour of a claimant, the Tribunal may, subject to Div 3, make an order that requires a respondent to pay to the claimant a specified amount of money.

   24. I am satisfied that the Tribunal has jurisdiction to hear and determine the claim of each of the applicants for a refund of overpaid electricity charges under ss 28 and 29(1) of the CAT Act when read with ss 85(3) and 157(1)(d) of the RLLC Act.

   25. I am also satisfied that the claim of each of the applicants is a “consumer claim” with Pt 6A Div 1 of the FT Act by reason that each of the applicants is a natural person to whom the Operator has supplied services in New South Wales in the form of the provision of electricity for valuable consideration. Accordingly, the Tribunal has jurisdiction to hear and determine this claim of each of the applicants under ss 28 and 29(1) of the CAT Act when read with Pt 6A Div 1 and s 79N(a) of the FT Act. However, the Tribunal’s jurisdiction is limited to overpayments made in the period of 3 years preceding the filing of their application.

Whether each of the proceedings has been brought in time, and if not whether an order extending the time to bring the proceedings should be made

26. Section 156 of the RLLC Act relevantly provides:

156 Applications to Tribunal relating to disputes

1. A home owner, former home owner or operator of a community may apply to the Tribunal for determination of any of the following:

(a)   a dispute relating to a right or obligation under this Act,

(b)   a dispute arising from, or relating to, a site agreement or collateral agreement,

…

1. An application to the Tribunal must be made within the period (if any) specified in this Act or prescribed by the regulations.

   27. Clause 16 of the Residential (Land Lease) Communities Regulation 2015 (NSW) (RLLC Reg), which read with Schedule 3 prescribes the period within which an application to the Tribunal must be made, does not prescribe any period for an application under s 85(3) of the RLLC Act.

   28. Section 41 of the CAT Act provides:

41 Extensions of time

1. The Tribunal may, of its own motion or on application by any person, extend the period of time for the doing of anything under any legislation in respect of which the Tribunal has jurisdiction despite anything to the contrary under that legislation.

2. Such an application may be made even though the relevant period of time has expired.

   29. Rule 23 of the Civil and Administrative Tribunal Rules 2014 (NSW) (CAT Rules) relevantly provides:

23 General applications

…

1. Unless the Tribunal grants an extension under section 41 of the Act, an application must be made:

(a)   in the case where enabling legislation specifies the period within which the application is to be made—within the period specified, or

(b)   in any other case—within 28 days from the day on which the applicant became entitled under the enabling legislation to make the application.

30. The Tribunal has held in relation to similar claims by home owners against operators for a refund of overpaid electricity charges that time began to run from the time that the home owners were “in dispute” with the operator: Bavin v Parklea Operations Pty Ltd [2019] NSWCATAP 120 at [46]-[48]; Stewart v Raythel Holdings Pty Ltd t/as Colonial Tweed Holiday Home Park [2019] NSWCATCD 48 at [23]-[32].

31. In Bavin v Parklea Operations Pty Ltd [2019] NSWCATAP 120 at [52] the Appeal Panel held that the dispute of the appellants who were home owners at the Community with the respondent who is the Operator concerning overcharging for electricity at arose approximately three months after 21 July 2017 when the appellant’s application had been lodged. This finding applies equally to the dispute between the applicants and the Operator.

32. The nature of the claims of the applicants is that there has been a continuing breach of s 77(3) of the RLLC Act in respect of each fortnightly payment up to December 2018 and each monthly payment from January 2019.

33. The application of each of the applicants should have been made within 28 days of the dispute arising as specified in cl 23(3)(b) of the CAT Rules. The applicants referred to in Schedules 1, 2, 3 and 4 do not require an extension of time for making their application under s 156(1)(a) of the RLLC Act for their excess payments made since the date being 28 days before they made their application, but do require an extension of time for their excess payments made before then.

34. The following circumstances warrant an extension of time for the applicants to make their application under s 156(1)(a) of the RLLC Act:

1. they did not become aware of the overpayments until approximately late October 2017;

2. the Operator does not object to such an extension of time; and

3. the absence of any evidence of prejudice to the Operator.

35. I am satisfied that it is appropriate to make an order pursuant to s 41 of the CAT Act extending time for the applicants to make their application as follows:

1. to the extent necessary for the applications referred to in Schedule 1, until 26 October 2018;

2. for the applications referred to in Schedule 2, until 26 March 2019;

3. for the applications referred to in Schedule 3, until 12 April 2019;

4. for the applications referred to in Schedule 4, until 15 May 2019.

36. The cause of action of each of the applicants under Pt 6A Div 2 of the FT Act arose when they made each fortnightly payments up to December 2018 and each monthly payment from January 2019. The application of each of the applicants has been made within the time specified in s 79L(1)(a) of the FT Act.

What is the correct methodology to determine, and calculation of, the amount of the overpayment under s 77(3) of the RLLC Act

The applicable statutory provisions

RLLC Act

37. Section 6 relevantly provides:

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.

   38. Section 77 provides:

77 Utility charges payable to operator by home owner

1. This section applies if, under a site agreement, the home owner is required to pay utility charges to the operator for the use by the home owner of a utility at the residential site.

2. The home owner cannot be required to pay for the use unless:

   (a)   the use is separately measured or metered, and

   (b)   the operator gives the home owner an itemised account and allows at least 21 days for the payment to be made.

3. The operator must not charge the home owner an amount for the use of a utility that is more than the amount charged by the utility service provider or regulated offer retailer who is providing the service for the quantity of the service supplied to, or used at, the residential site.

Maximum penalty: 20 penalty units.

1. The regulations may:

   (a)   provide for a maximum utility charge payable by home owners to the operator, and

   (b)   create an offence for an operator to request or receive more than that maximum charge (if any).

2. The regulations may provide that a service availability charge for electricity payable by home owners to the operator of a community is to be discounted in accordance with the regulations where less than 60 amps are being supplied.

   39. In s 4, “utility” is defined to include “electricity” (para (a)); “utility charge” is defined to mean “a usage charge or service availability charge for the provision of a utility”.

RLLC Reg

40. Clause 13 relevantly provides:

13 Maximum service availability charge—electricity

1. The maximum service availability charge payable, in respect of any period, by a home owner to the operator for the supply of electricity at a residential site is the amount that would have been payable for the period if the electricity had been supplied to a small customer under a standard retail contract of the applicable local area retailer at standing offer prices.

2. Despite subclause (1), the service availability charge payable by a home owner to an operator of a community for supply at a residential site of less than 60 amps of electricity is to be discounted in accordance with subclause (3).

1. The maximum service availability charge payable by a home owner to an operator for supply at a residential site of less than 60 amps of electricity is:

…

(c)   if 30 amps or more but less than 60 amps of electricity is supplied to the residential site—70 per cent of that service availability charge.

1. In this clause, local area retailer, small customer, standard retail contract and standing offer prices have the same meanings as in the National Energy Retail Law (NSW).

The interpretation and application of the applicable statutory provisions

41. The RLLC Act commenced on 1 November 2015.

42. Section 77 of the RLLC Act, which changed the way operators could charge home owners for electricity, has been considered in a number of recent decisions in the Tribunal and in the Supreme Court.

43. On 24 February 2017, an application for reimbursement of overpaid electricity charges was lodged by a Mrs Reckless. That application was dismissed by the Tribunal on 3 August 2017: Reckless v Silva Portfolios Pty Ltd [2017] NSWCATCD 57.

44. Mrs Reckless appealed that decision successfully to the Tribunal’s Appeal Panel. On 3 April 2018 the Appeal Panel found Mrs Reckless had been charged in excess of what was permitted in s 77, upheld the appeal, and re-mitted the matter to the Tribunal’s Consumer and Commercial Division for determination of the amount that Mrs Reckless should be refunded: Reckless v Silva Portfolios Pty Ltd t/as Ballina Waterfront Village and Tourist Park [2018] NSWCATAP 80. The Appeal Panel at [36]-[38] held that by virtue of s 6(1) and (2) of the RLLC Act s 77 applies to a site agreement entered into before 1 November 2015. The Appeal Panel at [42] said “Although s 77(3) is not drafted particularly well, it is clear that it is trying to prohibit overcharging of residents”.

45. The Appeal Panel’s decision was appealed to the Supreme Court by the operator, and a stay placed on the Appeal Panel’s orders. On 9 September 2018, the Supreme Court dismissed the appeal, and the stay on the Appeal Panel’s orders was lifted: Silva Portfolios Pty Ltd t/as Ballina Waterfront Village and Tourist Park v Reckless [2018] NSWSC 1343. Davies J at [53] held:

[53] On the proper construction of s 77(3) of the RLLC Act, the plaintiff is not entitled to charge the defendant any more than the plaintiff has been charged for the supply or use of the electricity consumed by the defendant.

46. On 9 January 2019, Mrs Reckless’ application was finally determined by the Tribunal, and orders made to reimburse her monies that she had been overcharged in contravention of s 77(3): Reckless v Silva Portfolios Pty Ltd t/as Ballina Waterfront Village and Tourist Park [2018] NSWCATCD 59. The operator’s supplier was Origin whose invoices included the same components as the invoices from Origin received by the Operator. The Tribunal at [20]-[34] rejected the three different methods proposed by Mrs Reckless to calculate what amount she should have been charged which were based on “Energy Charges” in Origin’s invoices. The Tribunal accepted the evidence of Ms Petkovic that all the various charges of Origin, or components in the invoices of Origin, are “the cost of electricity”, and in terms of s 77(3) are included in “the amount charged by the utility service provider…..for the quantity of the service supplied to, or used at, the residential site”. The Tribunal at [39] held that the most accurate method to use to compensate Mrs Reckless is to determine the overall cost of the electricity to the operator, divide that amount by the total kilowatts used, and apply that figure to the total kilowatts used by Mrs Reckless. The Tribunal in so finding at [37]-[38] acknowledged that this method may not be completely accurate:

[37] Ms Petkovic acknowledges that this method is not perfect, as is outlined in the assumptions she has made in her report. The difficulties arise because the meter at Mrs Reckless’ home is not a “smart meter”, and cannot precisely identify when Mrs Reckless consumed electricity. Consequently it is not possible to say how much electricity Mrs Reckless used for which the respondent was charged at the off peak rate, rather than the peak rate or shoulder rate. Therefore, if Mrs Reckless has consumed more electricity at the off peak rates than the respondent has, she will be charged a greater amount for the use of electricity than the respondent has been charged by Origin. However in this case, there is no evidence that has occurred, and it seems the only way such evidence could be obtained in future, would be by the installation of a smart meter at Mrs Reckless’ home. It appears on the evidence just as likely Mrs Reckless might on occasions, be charged less than the respondent was, because her usage of electricity at “peak” rates, was greater than the respondent’s. As Ms Petkovic says in her report, such discrepancies, if they occurred are likely to be minor, and to even out over time.

[38] The fact the methods proposed by the respondent may not be 100% accurate, does not mean they cannot be used to determine the amount of compensation that is to be paid to the applicant. As Brooking J said in JLW (Vic) Pty Ltd v Tsilogou [1994] 1 VR 237 at 241 “[T]he plaintiff must prove what he has suffered and will suffer and what is fair and reasonable compensation in respect of that. It is often said the amount of the damage must be proved with certainty, but this only means as much “certainty” as is reasonable in the circumstances. Where precise evidence is obtainable, the court naturally expects to have it; where it is not, the court must do the best it can”.

47. In Stewart v Raythel Holdings Pty Ltd t/as Colonial Tweed Holiday Home Park at [41] the Tribunal held that the correct method for calculating the refunds is stated in Reckless (No.2) being to determine the overall cost of the electricity to the respondent charged by its provider, divide that amount by the total kilowatts used, and apply that figure to the total kilowatts used by each of the applicants.

The evidence as to the correct methodology to determine and calculation of the amount of the refund

48. There were differing opinions by Mr Harris and Ms Petkovic as to the correct methodology to determine the amount of the refund. Consequently, there were differing calculations of the amount of the refund by Mr Finlayson and Ms Petkovic.

49. In his expert witness report Mr Harris:

1. provides an explanation of the terminology that is used in the invoices of Origin and AGL to the Operator;

2. expresses the following opinions in relation to s 77(3) of the RLLC Act:

If one considers that the quantity of the service supplied to, or used at, the residential site only relates to the consumption of electricity that is measurable at that site, then only charges that are denominated in kWh (e.g., energy charges, peak shoulder, off-peak network charges, LRET and SRES charges) would definitely be related to the quantity of the service supplied to, or used at, the residential site.

If one considers that the service supplied to or used at the residential site not only relates to the actual consumption of electricity at that individual site, but also to the other services that are provided to the embedded network operator by the retailer (and which, one way or another, allow the operator to in turn provide electricity services to each individual site), then this would mean that all of the charges (on the invoices of Origin and AGL) would be related to the quantity of the service supplied to or used at the residential site.

Having regard to the above, our reading of the Act is that because the service must be supplied to, or used at, the residential site, and this is defined as a "site in a community. ..... used as a residence by an individual', then the costs that relate to the provision of services to the embedded network operator, which are not directly related to or attributable to an individual site's usage, should be excluded from the calculation. This would appear to be further supported by the reference in the Act that "the home owner cannot be required to pay for the use unless ... (a) the use is separately measured or metered'. This indicates to us that there is a direct nexus between "use by the home owner of a utility at the residential site' and the ability to actually "separately measure or meter'' usage. (footnote omitted)

3. expresses the following opinion in relation to the most appropriate methodology that is compliant with s 77(3) of the RLLC Act:

Assuming no change in metrology at customers' premises, and on the assumption that implementing a load profiling approach, as outlined in the last section of this report, is not adopted, we believe that the most appropriate methodology for calculating electricity usage charges that is compliant with s77(3) of the RLLC Act and the RLLC Regs would be to:

. Total all of the per kWh30 denominated components of the operator's retail bill, and divide that by the kWh's recorded on the operator's meter (which will be in the operator's retail bill), over the time period that aligns with when each homeowners accumulation meter is read (e.g., if homeowners' meters are read every month, then the calculation would be done over that same period); and

. Apply the results of the above calculation (which effectively gives an average cost per kWh for kWh denominated retail components) to the usage recorded on each homeowner's accumulation meter over that same period.

50. In her expert witness report Ms Petkovic:

1. expresses the following opinion as to the methodology for charging electricity to home owners:

After considering the unique characteristics of the Stanhope community, my expert opinion is that the methodology that I developed for the Reckless matter (and that has been further accepted in the Bell and Stewart matters) is the most appropriate here as well. There is one small variation for the Stanhope community to account for the two connection points to the grid. This is explained further in the next section.

The aim of the methodology is to allow the Community Operator to pass through the cost of the use and supply of electricity to the home owners' sites within the embedded network, and to divide this cost as fairly as practical among each of the sites.

The methodology is designed to reflect the actual costs incurred by the Community Operator, and hence the Community Operator will neither profit nor lose out from the methodology.

Note that due to the differences in metering equipment described in the next section, it is not possible to create a methodology that guarantees a cost neutral pass through to any individual site. However, what the proposed methodology can achieve is a cost neutral pass through across the total portfolio of sites within the embedded network. My expert opinion is that a methodology that achieves cost neutrality on an aggregate basis is the most fair and reasonable approach in this situation for all parties involved.

4.1   Formula for the methodology

The methodology involves a two-step process:

Step 1: Calculate the relevant rate to be charged to home owners on each NMI

First, we need to calculate the electricity charge rate (dollars per kWh) that should be charged to home owners on each NMI. For each NMI, we need to separately calculate the rate as follows:

Electricity charge rate for individual home owners ($/kWh)

Total dollar value of current charges in electricity bill for Community Operator (for the relevant NMI)

- any credit card or late payment fees

= Total energy usage (kWh) metered by the relevant NMI in the same bllling period

Step 2: Calculate the dollar amount to be charged to each individual home owner

In Step 2, we need apply the relevant rate from Step 1, to each individual home owner within that particular NMI.

Dollar amount charged to each home owner

= Electricity charge rate calculated in Step l for the relevant NMI

x Energy usage metered at the home owner's site for the same billing period

2. sets out the amount of compensation payable to each applicant using this methodology for each of the following time frames:

1. from April 2018 to April 2019 (inclusive);

2. from November 2015 to April 2019 (inclusive).

51. At the hearing oral evidence was given by Mr Harris and Ms Petkovic together, and Mr Finlayson. Mr Harris and Ms Petkovic essentially repeated their opinions. Mr Finlayson explained the methodology he used for the calculation of the amount of compensation payable to each applicant.

52. Ms Petkovic gave evidence that for the purpose of her methodology she had converted all charges in the invoices of Origin and AGL to the Operator to a kWh measurement.

The submissions as to the correct methodology to determine, and calculation of, the amount of the refund

53. In their written submissions dated 8 July 2019 the applicants contend that:

1. s 77(3) of the RLLC Act is concerned with the usage charges permitted under the RLLC Act. The inelegant expression "supplied to, or used at" does not expand the reach of s 77(3) into "supply charges" or service availability charges. Rather, "supplied to" enables s 77(3) to operate effectively to allow charges for a quantity of a utility, such as bottled gas, which is measured at the time of supply, not the time of use. This interpretation is consistent with the right of the operator to impose a service availability charge on the home owner for electricity which may exceed the amount payable by the operator to the electricity service provider as countenanced by cl 13 of the RLLC Reg;

2. the judgment of the Supreme Court in Silva Portfolios Pty Ltd trading as Ballina Waterfront Village & Tourist Park v Reckless does not deal with the distinction between usage charges and supply charges, and should not be understood as bundling up service availability charges with usage charges;

3. s 77(3) of the RLLC Act restricts operators to charging home owners no more than the electricity supplier charges for the quantity of electricity used at each individually metered site. This means that electricity charges imposed by a retailer with reference to quantity may be passed on to home owners provided the quantity used by each home owner is measured so as to allow the amount charged by the electricity retailer to be accurately passed on. The prohibition in s 77(3) on charging more than the retailer charges for the amount used means that, where the electricity retailer's charge varies with time of use, but time of use is not measured at the site, no more than the retailer's minimum time of use charge may be passed on to the home owner;

4. the only method of charging for electricity in the Community that is consistent with s 77(3) of the RLLC Act is:

1. home owners are charged for electricity used at their sites by their individual meters at the off peak kWh rate plus the kWh rates for items that do not vary with time of use;

2. home owners are not charged as part of the usage component of their electricity bill any amount of fixed charges or demand charges; and

3. home owners may be charged a service availability charge based on the amount that would have been payable under a standing retail contract offered to a small customer consistent with cl 13 of the RLLC Reg (discounted for 32 amps supplied to each site).

54. In its submission dated 14 June 2019 the Operator contends that:

1. despite the drafting of s 77(3) of the RLLC Act the legislature did not intend to change the way that home owners are charged for electricity in residential land lease communities;

2. s 77(3) of the RLLC Act allows it to pass through the full cost of electricity it has incurred to the sites within its embedded network, and to divide this cost reasonably and practically among each of the sites;

3. the categories of energy charges in the proposed methodology outlined by Ms Petkovic cover all of the recognised costs to the Operator for the use by the applicants of the quantity of the service supplied to, or used at, the residential site.

55. If the correct methodology to determine the amount of the refund is as contended for by the Operator, then the applicants accept the calculations of Ms Petkovic as to the amount of the refund of each of the applicants.

56. If the correct methodology to determine the amount of the refund is as contended for by the applicants, then the Operator accepts the calculations of Mr Finlayson as to the amount of the refund of each of the applicants.

Consideration

57. Having regard to the definitions of “utility” and “utility charge” in s 4(1) the expression “utility charges to the operator for the use by the home owner of a utility at the residential site” in s 77(1) of the RLLC Act may refer to one or both of a usage charge and a service availability charge for the provision of electricity. The word “use” in this subsection may apply equally to the usage, or the availability, of electricity. If this expression were limited to a usage charge, then the operator would not be entitled to charge a service availability charge for electricity which is contemplated by s 77(5). The words “for the use” in s 77(2) clearly refer back to the expression “utility charges to the operator for the use by the home owner of a utility at the residential site” in s 77(1). Similarly, the words “for the use of a utility” in s 77(3) clearly refer back to this same expression. This means that the expression “the amount charged by the utility service provider or regulated offer retailer who is providing the service for the quantity of the service supplied to, or used at, the residential site” in s 77(3) must refer to the total amount charged by the applicable provider or retailer for both the usage and availability of electricity at the residential site. I do not consider that the presence of the word “quantity” in s 77(3) requires a different interpretation. Quantity refers to “a particular, indefinite, or considerable amount of anything”; “amount or measure”: Macquarie Dictionary. It makes sense to refer to a “quantity” of electricity whether measured in “kVa”, on a daily or monthly basis, and in “kWh”. Clause 13 of the RLLC Reg provides a further limitation on the maximum amount an operator can charge a home owner for a service availability charge. For these reasons I reject the interpretation of s 77(3) of the RLLC Act submitted by the applicants.

58. It follows that I accept the methodology used by Ms Petkovic rather than the methodology used by Mr Harris to calculate the amount of the overpayment by each of the applicants.

59. By reason of the operation of s 6(1) and (2) of the RLLC Act each of the applicants who entered into a site agreement with the Operator prior to 1 November 2015 is entitled pursuant to s 85(3) of the RLLC Act to recover electricity charges paid under a mistake of law because the Operator charged more than the amount to which it was entitled under s 77(3) of the RLLC Act.

60. The amount of overpayment of each applicant is set out in Schedule 1, 2, 3 or 4.

Whether the Operator has a defence of change of position to the whole or part of the claim of each of the applicants under s 85(3) of the RLLC Act

61. This issue is limited to the applicants’ claim under s 85(3) of the RLLC Act.

62. The Operator contends that it has a defence of change of position from 1 November 2015 to 3 April 2018 by reason of improvements, repairs and maintenance at a total cost of $133,942.12 carried out at the Community since 1 November 2015.

63. The applicants contend that a defence of change of position is not available to the Operator for the following reasons:

1. the entitlement to restitution given by s 85(1) of the RLLC Act is not the same as the common law principle of restitution for unjust enrichment by mistake of fact or law;

2. alternatively, if the change of position defence is available, the Operator has not demonstrated that it has changed its position in a way that would enliven the defence.

64. In David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 385 the majority of the High Court recognised that if payments made under a mistake of law should be prima facie recoverable, in the same way as payments made under a mistake of fact, a defence of change of position is necessary to ensure that the enrichment of the recipient is prevented only in circumstances in which it would be unjust. The central element of the defence of change of position is that the defendant has acted to his or her detriment on the faith of the receipt.

64. Change of position may also operate as a partial rather than full defence, to an action for recovery of money paid under a mistake: Stewart v Raythel Holdings Pty Ltd t/as Colonial Tweed Holiday Home Park at [38].

65. There are inconsistent decisions of the Tribunal as to the availability of a defence of change of position to a claim to recover overpayment of utility charges paid under a mistake of law under s 85(3) of the RLLC Act.

66. In Stewart v Raythel Holdings Pty Ltd t/as Colonial Tweed Holiday Home Park at [39]-[40] the Tribunal, having referred to David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 385 and other authorities, held that the operator had a partial defence of change of position from 3 April 2018:

[39] To require the respondent to repay all of the monies the applicants have paid by mistake, when the respondent has accepted the money in good faith and spent a significant portion of it in 2017 and more afterwards, would create an injustice that outweighs the injustice of the applicants not being able to recover all of the mistaken payments.

[40] However it would not be unjust to require the respondent to repay all mistaken payments since 3 April 2018, as that was when the Appeal Panel’s decision in Silva was published, and the applicants’ entitlement to recover was made clear. Even though that decision was appealed to the Supreme Court, the decision of the Appeal Panel would have alerted all prudent operators to at least make provision for the possibility the Appeal Panel’s decision would be upheld in the Supreme Court, even if, as asserted by the respondent, advice from Fair Trading was still inconsistent with the Appeal Panel’s decision.

68. in Bavin v Parklea Operations Pty Ltd [2019] NSWCATAP 120 at [73]-[76] the Appeal Panel doubted that the defence of change of position is available to claim of a home owner under s 85 of the RLLC Act to recover an amount paid under Part 7 of the RLLC Act to the operator under a mistake of law or fact.

69. I do not consider that s 85(1) of the RLLC Act should be interpreted as excluding a defence of change of position to a claim of a home owner to recover an amount paid to the operator under a mistake of law or fact. Section 85 should be understood as creating a statutory right to recover mistaken payments that is already available under the general law. There would be no coherence in the law if an operator sued under the general law could rely on a defence of change of position, but if sued under s 85 of the RLLC Act could not rely on a defence of change of position.

70. The Operator has not established a partial defence of change of position because it adduced no evidence that its expenditure on improvements, repairs and maintenance at a total cost of $133,942.12 carried out at the Community since 1 November 2015 was undertaken in reliance on the payments for electricity charges made by the applicants.

Whether the position is different if considered as a consumer claim under the FT Act

71. There were no submissions addressed to the claim of each of the applicants if considered as a consumer claim under the FT Act.

72. While I accept that an operator who charges a home owner for the supply of electricity more than the amount to which it is entitled under s 77(3) of the RLLC Act has engaged in unconscionable conduct in connection with services in contravention of s 21(1)(a) of the Australian Consumer Law, a consumer would not be entitled to a greater amount in an order pursuant to s 79N(a) of the FT Act than in an order under s 85(3) of the RLLC Act. While there may be a question as to whether a defence of change of position would be available to an operator to a consumer claim, any such defence is not available to the Operator in each of these proceedings. Due to the limitation upon the jurisdiction of the Tribunal imposed by s 79L(1)(a) of the FT Act, the amount recoverable by each applicant would be the total of the overpayments made in the 3 years prior to the date on which they commenced their proceedings. It is unnecessary to calculate this amount for each applicant.

Schedule 1

Applicant(s)	File	Refund	End date
Milica Almasi	RC 18/46509	$663.99	30 April 2019
Sharon Aspinall	RC 18/46250	$986.05	30 April 2019
Damien Barbara	RC 18/46234	$1,145.24	30 April 2019
Kenneth Bernard	RC 18/49949	$1,007.63	30 April 2019
Janet Brown	RC 18/46283	$898.64	30 April 2019
Deborah Buckley	RC 18/46367	$755.59	30 April 2019
Choong Chaim	RC 18/46531	$755.61	30 April 2019
Jill Clarke	RC 18/46268	$1,089.15	30 April 2019
Patricia Cook	RC 18/46445	$1,114.78	30 April 2019
Saviour D'anastasi	RC 18/46388	$576.02	30 April 2019
Ralph Day	RC 18/46262	$1,079.28	30 April 2019
Dusica Debeljak	RC 18/46465	$609.21	30 April 2019
Betty De Roo	RC 18/46489	$713.77	30 April 2019
Lorraine Dixon	RC 18/46286	$811.12	30 April 2019
Robyn Eishauer	RC 18/46373	$979.72	30 April 2019
Pauline Elkhaligi	RC 18/46238	$531.93	30 April 2019
Cheryl Francia	RC 18/46497	$670.08	30 April 2019
Melva George	RC 18/46393	$697.93	30 April 2019
Nick Giarratano	RC 18/46537	$1,104.62	30 April 2019
Hedley Hall	RC 18/46255	$857.01	30 April 2019
Christine Histon	RC 18/46500	$647.61	30 April 2019
Andrew Horvath	RC 18/46241	$756.05	30 April 2019
Terry Hoskinson	RC 18/46342	$1,117.03	12 March 2019
Janet Jones	RC 18/46382	$664.79	30 April 2019
Clifford Kopp	RC 18/46143	$732.90	30 April 2019
Christine Luxford	RC 18/46533	$1,184.94	30 April 2019
Colleen McDonald	RC 18/46253	$936.00	30 April 2019
Susan McIvor	RC 18/46176	$709.09	30 April 2019
Gloria McNamara	RC 18/46457	$697.03	30 April 2019
Marija Meissner	RC 18/46246	$845.22	30 April 2019
Joseph Micallef	RC 18/46521	$663.00	30 April 2019
Ron Anthony Nicholls	RC 18/46216	$757.57	30 April 2019
Karen O'Donohue	RC 18/46186	$697.61	30 April 2019
Betty Pether	RC 18/46295	$1,122.02	30 April 2019
Phillip Polson	RC 18/46506	$635.54	30 April 2019
Mary Preston	RC 18/46480	$744.55	30 April 2019
Kathleen Richards	RC 18/46161	$791.58	30 April 2019
Geoff Ridley	RC 18/46470	$732.35	30 April 2019
Heather Schiliro	RC 18/46438	$701.41	12 March 2019
Bevan Shepherdson	RC 18/46275	$1,082.65	30 April 2019
Pauline Sheppard	RC 18/46229	$671.72	30 April 2019
Lex Stanford	RC 18/46450	$687.83	30 April 2019
Patricia Starks	RC 18/46544	$724.31	3 October 2018
Barry Stevens	RC 18/46516	$688.40	30 April 2019
Nerida Tootill	RC18/46379	$979.64	30 April 2019
Victoria Tork	RC 18/46362	$644.98	30 April 2019
Patricia Veliz	RC 18/46364	$144.95	30 April 2019
Eva Warhurst	RC 18/46542	$843.02	30 April 2019
Susan West	RC 18/464-	$638.57	30 April 2019
Sylvia Woodhurst	RC 18/46526	$1,188.60	30 April 2019
Ken Yates	RC 18/46453	$482.93	30 April 2019

Schedule 2

Applicant	File	Refund	End date
Christopher Jones	RC 19/14831	$1,250.55	30 April 2019
Lynette Ann Martin	RC 19/14841	$917.88	30 April 2019
Brenda Mortlock	RC 19/14837	$729.75	30 April 2019
Pauline Sattler	RC 19/14836	$1,055.44	30 April 2019
Leone Elizabeth Wiskens	RC 19/14840	$824.47	30 April 2019

Schedule 3

Applicant(s)	File	Refund	End date
Rita Adomian	RC 19/17810	$915.90	31 January 2019
Anne Avard	RC 19/17828	$970.39	30 April 2019
Rhonda Beach	RC 19/17765	$864.60	30 April 2019
Dawn Bennett	RC 19/17824	$821.50	30 April 2019
Margaret Cameron	RC 19/17830	$1,003.70	30 April 2019
Alfred John Degiorgio	RC 19/17795	$738.69	30 April 2019
Mary Eggmann	RC 19/17836	$739.29	30 April 2019
Carol Garaty	RC 19/17821	$735.97	30 April 2019
Alan Gollan	RC 19/17782	$1,111.12	30 April 2019
Ruth Grosseibl	RC 19/17794	$803.75	30 April 2019
June Maree Harris	RC 19/17788	$820.61	30 April 2019
Margaret Ingrey	RC 19/17833	$687.00	30 April 2019
Edgar Jones and Sheila Jones	RC 19/17793	$1,138.70	30 April 2019
Sue Kerewaro	RC 19/17841	$1,045.26	30 April 2019
Ronald MacDonald	RC 19/17764	$1,014.06	30 April 2019
Lee Maris	RC 19/17778	$777.48	30 April 2019
John Gordon Mazlin	RC 19/17768	$917.34	30 April 2019
Keven Newbery	RC 19/17798	$1,083.32	30 April 2019
John O'Brien	RC 19/17773	$1,037.16	30 April 2019
Dieter Pospisek	RC 19/17785	$1,018.01	30 April 2019
Gary Sanchez	RC 19/17827	$764.26	30 April 2019
Monica Whittles	RC 19/17806	$752.03	30 April 2019
Samuel Alan Young	RC 19/17835	$1,130.90	30 April 2019

Schedule 4

Applicant(s)	File	Refund	End date
Valerie Beck	RC 19/22700	$863.72	30 April 2019
Suzanne Bradshaw	RC 19/22717	$703.58	30 April 2019
Jennifer Carver	RC 19/22721	$858.14	30 April 2019
Dorothy Dunn	RC 19/22718	$825.04	30 April 2019
Phillippa Fogg	RC 19/22707	$848.25	30 April 2019
Mariana Hartley	RC 19/22688	$696.01	30 April 2019
Barbara Hines	RC 19/22698	$1,008.40	30 April 2019
Nik Iliadis	RC 19/22726	$781.89	30 April 2019
Valarie King (De Loas)	RC 19/22696	$678.29	30 April 2019
Jeanne Majurey	RC 19/22708	$1,033.00	30 April 2019
Carol Anne Meyrick	RC 19/22739	$538.13	12 March 2019
Melva O'Donnell	RC 19/22714	$838.52	30 April 2019
Samar Rafidi	RC 19/22691	$990.39	30 April 2019
Colin Tennant and Sheila Tennant	RC 19/22732	$1,228.09	30 April 2019

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

Registrar

Decision last updated: 29 March 2022