Winter and Salvation Army (WA) Property Trust
[2012] WASAT 17
•27 JANUARY 2012
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM: COMMERCIAL & CIVIL
ACT: RETIREMENT VILLAGES ACT 1992 (WA)
CITATION: WINTER and SALVATION ARMY (WA) PROPERTY TRUST [2012] WASAT 17
MEMBER: MR T CAREY (MEMBER)
MS C WALLACE (MEMBER)
HEARD: 22 AND 23 AUGUST 2011
FINAL WRITTEN SUBMISSIONS FILED
31 OCTOBER 2011
DELIVERED : 27 JANUARY 2012
FILE NO/S: CC 61 of 2011
BETWEEN: MARYMAUDE WINTER
Applicant
AND
SALVATION ARMY (WA) PROPERTY TRUST
First RespondentRETIREMENT CARE AUSTRALIA (HOLLYWOOD) PTY LTD
Second Respondent
Catchwords:
Retirement Villages Act 1992 (WA) Alleged breach of service contract Whether diminution of community facilities Alleged implied terms Whether obligation to relet independent living units Whether obligation to operate as a 'retirement village' Claim for specific performance
Legislation:
Fair Trading (Retirement Villages Code) Regulations 2009 (WA)
Retirement Villages Act 1992 (WA), s 13(1)(c), s 15, s 16, s 18, s 19, s 22(1), s 56(1), s 56(4), s 56(4)(a), Pt 4
State Administrative Tribunal Act 2004 (WA), s 87(1)
Result:
Application partially successful
Orders for specific performance made
Category: B
Representation:
Counsel:
Applicant: Mr J Birman and Mr J Chong
First Respondent : N/A
Second Respondent : Mr M Howard and Mr N Ekanayake
Solicitors:
Applicant: Birman & Ride
First Respondent : N/A
Second Respondent : Ilberys Lawyers
Case(s) referred to in decision(s):
BP Refinery (Western Port) Pty Ltd v Shire of Hastings (1977) 180 CLR 2066
Breen v Williams (1996) 186 CLR 71
Byrne v Australian Airlines Ltd (1995) 185 CLR 410
Clark and The Owners of Waterfront Mews - Strata Plan 14082 [2011] WASAT 110
Constan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Aust) Ltd (1986) 160 CLR 226
Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10
Galashiels Gas Co Ltd v O'Donnell [1949] AC 275 at 286
Hospital Products v United States Surgical Corporation (1984) 156 CLR 41
JC Williamson Ltd v Lukey [1931] 45 CLR 282
Liverpool City Council v Irwin [1977] AC 239
White v Australian and New Zealand Theatres Limited (1943) 67 CLR 266
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision
Mrs MaryMaude Winter, a resident of Hollywood Senior Citizens' Village, being a retirement village in the suburb of Nedlands, commenced proceedings in the Tribunal under s 56(1) of the Retirement Villages Act 1992 (WA) seeking various orders primarily relating to specific performance of Mrs Winter's service contract with Retirement Care Australia (Hollywood) Pty Ltd.
Mrs Winter alleged a number of breaches of her service contract in relation to the provision and maintenance of village facilities and services, as well as asserting the breach by Retirement Care Australia (Hollywood) Pty Ltd of alleged implied terms of the service contract to the effect that Retirement Care Australia (Hollywood) Pty Ltd had an obligation to relet independent living units of the retirement village as and when they became unoccupied, and to operate the village as a 'retirement village'.
On the basis of the evidence produced, the Tribunal determined that Retirement Care Australia (Hollywood) Pty Ltd had breached the express provisions of its service contract with Mrs Winter for failing to fulfil its contractual obligation to provide, in proper and usable condition, a swimming pool and spa, and also for failing to provide a barbeque facility and outdoor settings in close proximity to the pool and spa area of the village. It reached a similar conclusion in relation to a separate contractual obligation to properly maintain in good and serviceable repair parts of the grounds and gardens of the village. The Tribunal made orders for specific performance in respect of those breaches.
The Tribunal found against the claims for breach of contract in respect to the provision of an auditorium, facilities formerly available in an area of the village known as Withnell Cottage, and a communal dining room, on the basis that the evidence demonstrated that equivalent facilities and amenities continued to be available to village residents.
The claim, based upon a breach of implied terms to the effect that Retirement Care Australia (Hollywood) Pty Ltd had an obligation to relet independent living units as they became vacant and to operate the village as a 'retirement village', was unsuccessful because the Tribunal determined that no such obligation existed.
The grounds relied upon for the implication of such terms were that such a term ought to be implied in law as a legal incident of all contracts of a particular class which answers a particular description; ought be implied by course of dealing or custom; and/or ought be implied as a matter of fact.
Essentially, the Tribunal found that it was not necessary, by reason of the nature of the contract between the parties, that the size of the retirement village, in terms of its population and physical facilities, be maintained as at a particular point in time; Mrs Winter's contracts with Salvation Army (WA) Property Trust and Retirement Care Australia (Hollywood) Pty Ltd worked without the implication of the alleged terms; there was no evidence of any course of dealing between the parties which would lead to the finding of a custom or usage, and there already existed within the relevant service contracts terms which covered the same or similar subjects as the asserted implied terms.
Introduction
The applicant, Mrs MaryMaude Winter (Mrs Winter), is a resident of an independent living unit (ILU) in a retirement village in Nedlands known as the Hollywood Senior Citizens' Village (village). Mrs Winter commenced her time in the village in early 2005, pursuant to a residence contract with the first respondent, Salvation Army (WA) Property Trust (SA). In 2007, subsequent to the sale of SA's interest in the village to the second respondent, Retirement Care Australia (Hollywood) Pty Ltd (RCA), two things happened:
1)Mrs Winter agreed to relocate to her current ILU; and
2)Mrs Winter entered a fresh residence contract with RCA.
It is fair to say that, during the period of Mrs Winter's residence at the village, it has undergone a significant transformation.
Previously, ILU accommodation at the village consisted of:
•Crossleigh, comprising 94 units;
•Wyvern, consisting of three separate buildings, comprising 169 units;
•Withnell Place, comprising 12 units; and
•Centennial Close, comprising approximately 100 units.
In late 2009 demolition works commenced, as a result of which Crossleigh and Withnell Place were demolished. A deliberate campaign to divest Wyvern of its occupants, preparatory to its demolition, has been successful, to the extent that only six of its ILUs remain occupied. Further, no effort has been made to obtain replacement residents in those cases where existing residents died, moved to other accommodation in the village, or left the village. The result has been that the number of residents living in ILUs in the village has decreased from about 270 to 78 at the time of the hearing.
In addition to the demolition of buildings designed for accommodation of residents, some other physical amenities have been removed, and large areas of the grounds of the villages are vacant and boarded up.
Mrs Winter contends for a failure by both SA and RCA to meet certain express obligations under their respective residence contracts regarding provision and maintenance of amenities and facilities. More fundamentally, she argues that SA and RCA have breached a term or terms to be implied in their contracts with her that each would operate the village as a retirement village, and in order to do so, would endeavour to re-licence any ILU which becomes vacant.
The relief sought by Mrs Winter reflects acceptance that it is no longer possible or appropriate to replicate the buildings which have been demolished, and adopts, in part, a proposal by RCA for the construction of a new 'community centre'. However, it contemplates a centre which is much larger, replete with the amenities said to have been foregone through the demolitions. She seeks orders restraining RCA from withdrawing any existing services, and that it maintain existing facilities to a reasonable standard. She seeks an order that RCA make reasonable efforts to let or license all ILUs which are presently, or which may become, unoccupied. She also formally seeks damages.
RCA rejects Mrs Winter's claim and opposes the granting of any relief. SA has not played any active role in the proceeding.
Issues to be determined
Based upon the written documents filed by the parties and submissions made at the hearing, we have identified the following as the issues for determination:
1)Has there been a diminution of community facilities or amenities for which Mrs Winter has a contractual right to relief?
2)Where such an entitlement arises, what is the appropriate relief?
3)Has there been a failure to maintain community facilities giving rise to a contractual right to relief?
4)In the case of any such entitlement, what is the appropriate relief?
5)Are there to be implied into Mrs Winter's contracts with SA and RCA terms requiring them to continue to operate the village as a retirement village and to relet or relicense any ILU becoming vacant?
6)If 'yes', does the breach of the term to relet or relicense fall within the Tribunal's jurisdiction to deal with disputes arising between parties to a service contract?
7)If 'yes', what is the appropriate relief?
8)What is the appropriate order for costs, in light of the parties' competing applications for costs?
Has there been a diminution of community facilities or amenities giving rise to a right to relief?
The community facilities available to the ILU residents, and, in particular, to Mrs Winter at the time that she moved into the village, included:
•an auditorium with a capacity of 200250 and fully equipped kitchen;
•Withnell Cottage, including recycling shop, library, lounge area, meeting room with piano, kitchen and restroom;
•a communal dining room for 40;
•Wyvern, including a ground floor common area with lounges and tables, library on the second floor, exercise room with two pool tables on the third floor, common room on the fourth floor with a capacity of approximately 70 and containing television, tables, piano and kitchen; and
•a swimming pool, spa and builtin barbeque with three or four outdoor settings.
As we have said, the auditorium and Withnell Cottage have been demolished, as has the communal dining room. The demolished buildings have been fenced off, preventing residents having access to them.
In addition, according to Mrs Winter, RCA:
•has allowed the pool and spa facilities and surrounds, including a bricked barbeque facility, to deteriorate;
•has reduced the number and quality of common areas;
•engages in 'interim measures' such as transporting residents to nearby venues for social and administrative activities, due to the inadequacy of the onsite facilities; and
•intends to demolish Wyvern, leading to the removal of the facilities currently provided in that building.
The first topic for consideration in determining the current issue is the extent of the contractual obligations upon the respondents regarding provision of communal facilities and amenities.
There are two separate contracts of relevance: the 'residence contract' between SA and Mrs Winter dated 31 March 2005 (SA contract), and the 'residence contract' between RCA and Mrs Winter dated 30 May 2001 (RCA contract). There also exists a 'deed poll', executed by RCA on 1 July 2005 (deed poll), which has some bearing on the matter.
SA contract
The SA contract incorporates a number of schedules. As indicated in Schedule 1 concerning financial matters, Mrs Winter paid an entry contribution of $275,000. She was also liable to pay a standard fortnightly fee (maintenance fee) of $196.20, which was subject to annual Consumer Price Index (CPI) adjustments.
Schedule 2 of the SA contract is headed 'Charter Resident's Rights and Responsibilities'. Included within a long list of residents' rights are:
…
•To be involved in the activities, associations and friendships of his/her choice, both within and outside The Village.
•To have access to the services and activities which are available generally in the Community.
•To be consulted on, and choose to have an input into decisions about the living arrangements of The Village.
…
Schedule 3 'Regulations of the Village' includes Part A cl 3, which provides:
All residents are entitled to use all rooms (other than personal units) and buildings (other than administrative or service areas) and the premises generally, including amenities, facilities and common areas.
Part B of Schedule 3 sets out the residence rules. Rule 12 states:
Wyvern lounges and Withnell Cottage are available to any ILU residents for personal/family functions by prior arrangement/booking.
Rule 14 of Part B states that the residents have priority use of the swimming pool and nominates swimming times of 7 am to 10 pm.
Schedule 5, which is described as a 'Disclosure Statement', contains a number of pertinent clauses. Clause 5.6 makes clear that payment of the standard fortnightly fee entitles the resident a number of 'services and amenities', specifically including maintenance of village property and replacement of the same when and where necessary, and the use of amenities including grounds, heated swimming pool and spa, lounges, libraries, function and recreation areas and the chapel.
RCA contract
The RCA contract, in cl 1.1, recites the parties' agreement for Mrs Winter to relocate from ILU 436 to ILU 500 in or about mid 2007. Her ongoing contribution remained at $275,000, and her 'service fee' (the equivalent of the maintenance fee of the SA contract, now payable monthly) commenced at $5,475 per annum, or $456.25 per month, with CPI adjustment.
Clause 7 provides for the use of, and changes to, 'Community Facilities'. The definitions section of the RCA contract, cl 2, contains the following definition:
Community Facilities means the buildings and surrounding facilities, lawns, gardens and other areas that we or our related corporations own or lease and that we make available from time to time for use by Residents of the Village excluding your Unit and, any other Units and the Management Facilities. As at the date of this residence contract the Community Facilities include communal laundry facilities, swimming pool, barbeque, auditorium, amenities building, and residents' library.
Clause 7.1 provides Mrs Winter and her guests the right to use the community facilities, so defined, whilst Mrs Winter remains a resident of the village.
Clause 7.2 provides the circumstances in which the second respondent is able to effect changes to the provision of the community facilities, as follows:
We may from time to time:
(a)make alterations to the Community Facilities;
(b)close all or part of the Community Facilities for refurbishment, repair and maintenance purposes;
(c)introduce and change user charges for the use of facilities in the Community Facilities; and
(d)reduce or withdraw facilities if it would be necessary to levy a Service Fee greater than the Adjusted Service Fee in order to keep providing them and that greater Service Fee is not approved by the Residents (see clause 14.9).
Clause 12.12 relevantly provides:
We may:
(a)alter or extend the Community Facilities; and
(b)close the Community Facilities so that we can do repair work or other work we are allowed to do under this residence contract.
If we do work in the Community Facilities then we must do the work promptly so that the Community Facilities can be reopened as soon as reasonably possible.
We may expand the Village or redevelop parts of the Village. If we do this then we must do our best to minimise inconvenience to you.
Clause 12.13 relevantly provides:
We must keep the Community Facilities, including lawns and gardens, reasonably clean and tidy.
We will use our best endeavours to ensure that the buildings, equipment, paths and driveways that are Community Facilities are kept in good condition and repaired or replaced when necessary.
…
Clause 14 deals with the service fee. Clause 14.1 describes the service fee as a contribution to the operating costs of the village.
Clause 14.8 deals with limits on increases in the service fee. Clause 14.8(a) provides for increases higher than CPI in a case:
…
where that increase has been approved by resolution of a majority of the Residents at a meeting of the Residents or by a resolution of the Residents Committee; …
…
By cl 14.9, if RCA requests an increase in the service fee higher than CPI and it is not approved under cl 14.8, RCA may reduce the goods, services and facilities provided at the village, provided that it considers the increase in the service fee is necessary and it has acted reasonably.
Deed poll
The village was sold by SA to RCA on 1 July 2005. On the same date, the deed poll, naming RCA and its parent company as parties, was executed. The deed poll recites, as the purpose of the deed poll, '[to provide] certain covenants in favour of the Residents relating to their rights of residence'. In the context, 'Residents' is a reference to the then current residents of the village.
By clause 1(a), RCA undertook to comply with the core principles as set out in Schedule 1 of the deed poll.
Clause 1(d) states:
Nothing in this Deed Poll limits the rights of a Resident under his or her Residence Agreement. If a Resident's Residence Agreement contains a more favourable provision than the Core Principles, the Resident will continue to have the benefit of that provision.
Turning to the core principles in Schedule 1, the following commitments and obligations are noted:
•to comply with the law and the Charter of Residents' Rights and Responsibilities set out in Schedule 1 of the User Rights Principles 1997;
•to be bound by the terms of the existing agreements that residents have to reside in a village; and
•the identical disclaimer of limitation of residents' rights under the deed poll given in cl 1(d) is given with respect to the core principles.
We turn to consider the evidence relied upon of breach of contractual obligations to provide particular facilities and amenities, in order to determine whether any actionable breach has been made out.
Auditorium
The applicant's evidence, supported by that of other village residents, was that the auditorium was used for a variety of purposes including:
a)as the residents' main meeting room (at para 21.2 of Exhibit A);
b)concerts and fashion parades (at para 11.3.3 of Exhibit I); and
c)functions and events such as Christmas dinners, Easter lunches, Melbourne Cup Day, Australia Day and Anzac Day (at para 31.6 of Exhibit A).
It is noted that at the time of its demolition, the auditorium was one of the facilities specifically listed as being included within the definition of 'Community Facilities' in cl 2 of the RCA contract, in respect of which Mrs Winter had a user right (cl 7.1 of the RCA contract). It is, however, difficult to imagine any physical facility possessing unique characteristics which make it indispensible. All buildings, other than those dating back to antiquity, have a limited lifespan and will be due for replacement at some time. That this consideration applies to the demolished auditorium is reflected in the relief being sought by Mrs Winter, who seeks not to have it rebuilt, but, rather, the incorporation of a facility performing the same purposes, and of the same scale, in RCA's proposed new centre.
The auditorium, with fully equipped kitchen, had the capacity to accommodate approximately 250 residents. In other words, the auditorium had sufficient capacity for virtually the entire village population as at the time Mrs Winter commenced living there. As indicated by the minute filed by her indicating the relief now being sought, Mrs Winter considers that any new community centre should include a multipurpose meeting room large enough to accommodate meetings of up to 260 residents.
Leaving for later discussion the claim based upon an implied term broadly designed to preserve the size of the village population, the question for the Tribunal is whether RCA was obliged, by the express contractual terms to which we have referred, to continue to provide a facility of a capacity of the auditorium, or whether, as RCA contends, the purposes served by the auditorium are now being met sufficiently by current facilities, given the current size of the village.
It can be accepted that the obligation of RCA, under its contract with Mrs Winter in respect of the former auditorium, is capable of compliance by the provision of one or more other facilities fulfilling the purposes of the auditorium, namely, to accommodate meetings, concerts, functions and the like. Further, we do not consider that, absent the implied term being asserted, the fulfilment of those purposes is subject to a further condition regarding capacity. Whether or not the purposes are being catered for is a factual matter which is to be assessed having regard to current circumstances, including the present population of the village. We do not accept that the express contractual provisions regarding the provision of an auditorium as part of the communal facilities require RCA to go any further than that.
Various accounts of the availability of facilities analogous (or not) to the auditorium have been given by different witnesses. The accounts are unanimous, however, in their reference to a common room or meeting room on the fourth floor of Wyvern which can accommodate approximately 70 people. Given the current village population of 78, this is comparable with a capacity of the auditorium of 250 at a time of the village population standing at 270. The meeting room has a kitchen as the auditorium did. In addition, an ILU in Centennial Close is used by ILU residents for meetings: see statement of Ms Vivian Josephine Zotti, Personal Assistant to the State Operations Manager WA of RCA's parent company (Exhibit T) at para 18.
Regarding the use of outside facilities, Ms Zotti's statement (at paras 20 and 21) is to the effect that since the demolition of the auditorium, the Nedlands Bowling Club has been hired for large functions such as AGMs, budget meetings and a meeting for announcement of plans for the village. According to Ms Zotti, she understands that the same arrangement will be made in the future to cater for large functions, meetings or events.
The Tribunal is satisfied that the purposes previously catered for by the auditorium are currently being served satisfactorily by a combination of the fourth floor of the Wyvern building, an ILU in Centennial Close and, for less frequent and larger assemblies, the hiring of the Nedlands Bowling Club. It does, however, also seem clear on the evidence that those facilities operate at or near full capacity and that, when the population of the village increases in the future in line with statements by RCA's witnesses before us, it is likely that a new dedicated facility will be required.
In the circumstances, therefore, we find against the claim of a breach of any express term of the RCA contract resulting from the demolition of the auditorium.
Facilities formerly available in Withnell Cottage
Mrs Winter gave evidence of the following amenities provided in Withnell Cottage:
a)recycling shop operated by volunteer residents;
b)large library;
c)lounge area;
d)meeting room with piano;
e)kitchen; and
f)restroom.
As in the case of the auditorium, the question we must determine is whether, subsequent to the demolition of Withnell Cottage, the purposes which it served are being met satisfactorily elsewhere in the village. This is necessary in order to apply the contractual provisions regarding communal facilities in both the SA and RCA contracts, recalling the express term in the SA contract concerning the availability of Withnell Cottage for residents' personal or family functions, and RCA's undertakings under the deed poll.
It strikes the Tribunal that none of the amenities referred to by Mrs Winter are necessarily unique to Withnell Cottage. No doubt, having all those amenities within one building made it an interesting and productive place to go, but it is clear on the evidence that Mrs Winter still has available to her a library (first floor of the Wyvern building), various lounge areas/meeting rooms, a piano (fourth floor of the Wyvern building) and kitchens (ground and fourth floors of the Wyvern building and in the Weston building). Apart from the possibility that some of these amenities are inadequate to meet the requirements of 270 residents, there is no concrete evidence, as opposed to suggestion or assertion, that they are inadequate, insufficient or fail to meet reasonable expectations. Although the recycling shop appears to have not reopened in a new location, there is no suggestion that this has been the result of the unavailability of any alternative accommodation, as distinct from other factors such as lack of ongoing volunteers to run it. The evidence suggests that ample alternative venues exist, perhaps in the Wyvern building. The restrooms formerly provided in Withnell Cottage were no doubt used in the main by residents and others who were at the cottage to take advantage of its other amenities.
Once again, Mrs Winter does not seek the rebuilding of Withnell Cottage, but the inclusion in the proposed community centre of a kitchen, library and craft room. Although it makes sense to locate different amenities in one building, particularly where further demolition works are proposed in respect of an older building where the same or similar amenities are currently provided, our powers are limited in the first instance to determining whether any contractual term has been breached. Based on the analysis set out above, we find against any breach arising from the demolition of Withnell Cottage.
Communal dining room
According to Mrs Winter, a separate communal dining facility with a capacity of 40 was part of the demolition works. For reasons which are not entirely apparent, little emphasis has been placed on this part of her claim. This may be because the proposal advanced for a community centre incorporates a kitchen, which would enable the meeting room, being the centrepiece of the community centre, to be used as a dining room.
It may also be that Mrs Winter is not dissatisfied with the dining facilities which are available to her and other residents in the Weston building, described in para 32 of Ms Zotti's statement (Exhibit T).
In any event, on the basis that dining facilities continue to be available to Mrs Winter through the Weston building, we find that no contractual breach by RCA has occurred.
Swimming pool, spa and barbeque facility
The RCA contract definition of 'Community Facilities' contains specific references to the swimming pool and barbeque. Although there is no specific reference to a spa, the evidence is that the spa existed as at the time that the RCA contract was entered into. As such, the spa is picked up by the following words of the definition:
[T]he building and surrounding facilities, lawns, gardens and other areas that we or our related corporations own or lease and that we make available from time to time for use by Residents of the Village …
The same applies to the three or four outdoor settings which formed part of the barbeque facility at the time of the contract.
As such, RCA was contractually obliged to provide the applicant with the use of a swimming pool, spa and barbeque facility.
The Tribunal notes that the minute of proposed orders seeks the inclusion in the proposed community centre of a 'heated' swimming pool and 'sundeck'. Undertaking the same exercise, we find that there is no contractual obligation that any pool be heated, nor that a sun deck be provided. No such express provisions are contained in the 'Community Facilities' definition, nor has such a facility been provided since Mrs Winter's residence commenced. That being the case, no entitlement to relief dependent upon a breach of the RCA contract arising from RCA's omission to provide these facilities exists.
Although a swimming pool, spa and barbeque have continued to form part of the landscape of the village, Mrs Winter contends that none of those facilities are in good repair, fit for purpose or able to be used.
The applicant's evidence was that the swimming pool area is not easy to access, the swimming pool lining is peeling off and contains cracks in the concrete floor and the spa is mouldy. The bricked barbeque is no longer able to be used, is surrounded by overgrown grass and is no longer accessible from the swimming pool or spa (at paras 74.7 and 76 of Exhibit A; applicant's bundle of photographs 13, 2326 and 2737; at para 18.1 of Exhibit I; and at para 37 of Exhibit G).
The photographs filed by the applicant depicting the spa, swimming pool and barbeque portray an area which appears difficult to access due to temporary fencing which has been installed, and which is generally derelict, in disrepair or unsightly. Based on the photographs, which Mrs Winter said in her oral evidence on 22 August 2011 were taken the preceding week, it is clear that the facilities are difficult to access and are not fit for immediate use.
RCA submits that the photographic evidence was taken at a time when the swimming pool and spa are not in use by reason of the weather, and that prior to summer they are brought up to standard.
In relation to the bricked barbeque, RCA accepts that it is no longer able to be used, but says that residents have access to mobile barbeques 'for any event' (para 13 of Exhibit U). Presumably, these would be used in parts of the village other than the immediate vicinity of the bricked barbeque, and without the benefit of the outdoor settings which have been removed (para 76.4 of Exhibit A).
It is not clear to the Tribunal how long the swimming pool and spa have been in a state of disrepair. It may well be that they have been in this state during the winter months only, or for a more extended period. However, in our view, it is not a complete answer to say that they are being 'winterised'. Although perhaps more accurately a matter of maintenance of, rather than a failure to, provide a facility, the effect of the level of maintenance applied has been to render the swimming pool and spa both unsightly and unusable.
In Clark and The Owners of Waterfront Mews - Strata Plan 14082 [2011] WASAT 110 (Clark), in the context of a residential strata titles dispute, although the Tribunal found the strata company to have acted within its power to control and manage the common property for the benefit of the proprietors by winterising a common property swimming pool, it observed that it was still necessary, consistent with its duty to properly maintain the swimming pool, to keep it in a clean condition, and to ensure that it remained in balance chemically (at [25] and [37]). Similarly, in relation to a second swimming pool which had been closed for more than a year, the Tribunal held (at [27]) that the duty to maintain extended to carrying out necessary work to return the swimming pool to a condition such that it could be used, with the result that the swimming pool adds to the amenity of the development, rather than detract from it. The duty was found to have been breached based upon evidence that, in between professional swimming pool inspections, falling debris, leaves and other matter result in it becoming uninviting and unusable essentially, the same conclusion to which we have come in relation to the swimming pool and spa in the village.
Both findings in Clark were predicated upon a meaning of 'maintain' in the sense of the process involving acts of maintenance in the course of ensuring a particular standard, being the second of the meanings referred to by Lord MacDermott in Galashiels Gas Co Ltd v O'Donnell [1949] AC 275 at 286. The Tribunal considers the same meaning to be apposite here, the applicable standard being that appearing in cl 12.13 of the RCA contract in the following terms:
We must keep the Community Facilities, including lawns and gardens, reasonably clean and tidy.
We will use our best endeavours to ensure that the buildings, equipment, paths and driveways that are Community Facilities are kept in good condition and repaired or replaced when necessary.
We therefore find that a breach by RCA of its obligation to maintain the swimming pool and spa has been established.
In relation to the barbeque facility, RCA contends, in effect, that its express obligation regarding provision of the barbeque existing at the time of the RCA contract is now being met by way of mobile barbeques (Exhibit U at para 13). What this overlooks, in our view, is the additional features which pertained at the time of the RCA contract and added to the amenity of the barbecue itself: the proximity of the barbeque to the swimming pool and spa area and the existence of three or four permanent outdoor settings. No doubt, the village residents enjoyed those facilities together.
The evidence in relation to the mobile barbeques is scant. It does not extend to where they are housed, nor what parts of the grounds are allocated or permitted for their use. Further, the reference by Mr Zambuni, the WA State Operations Manager of RCA's parent company, in Exhibit U, to residents' right of access to the mobile barbeques 'for any event' indicates their availability is restricted to 'events', presumably upon request, and that they are not, or not readily, accessible otherwise.
The Tribunal finds, based on the evidence, that there has been a breach by RCA to fulfil its contractual obligation to provide a barbeque facility, comprising barbeque(s) and outdoor settings in proximity to the swimming pool and spa area.
What is the appropriate relief for diminution of the community facilities or amenities in breach of contract?
Generally, damages will be the preferred remedy where a breach of a contractual obligation is made out. However, where it is considered that damages is an inadequate remedy, an order for specific performance is commonly made: (see JC Williamson Ltd v Lukey [1931] 45 CLR 282 at [294] per Starke J, and at [297] per Dixon J). The Tribunal notes, in relation to this claim and also that based on the alleged failure to maintain, that damages have not been included in the relief sought in respect of the failure to provide community facilities, on the basis that damages would not be an adequate remedy.
In this case, we agree that damages would not be an adequate remedy. The loss suffered is the loss of enjoyment of facilities in relation to which damages would be difficult, if not impossible, to assess. It is the failure to provide, or failure to provide in a fit and proper condition, particular facilities with which the relevant claims are made. That failure having been made out in certain respects, it is appropriate that there be an order for specific performance in accordance with cl 7 and cl 12.13 of the RCA contract, by requiring RCA to use its best endeavours to ensure that the existing swimming pool, spa and bricked barbeque are maintained in good condition, that at least three outdoor settings are reestablished, and that adequate access to the whole area is given. The extent of the maintenance works required to bring the facilities to the required standard in the short to medium term is likely to be tempered by any long term provision of the same or similar facilities as part of any new development.
Has there been a failure to maintain community facilities giving rise to a right to relief?
Mrs Winter claims that RCA has breached the obligation to clean and maintain the community facilities by:
a)failing to maintain lawns and gardens and pathways;
b)failing to maintain various parts of the Wyvern building;
c)failing to maintain the swimming pool and spa and provide adequate access to that area; and
d)failing to maintain the paved barbecue area.
We have already sufficiently dealt with the allegations regarding the swimming pool, spa and barbecue area.
The general thrust of the claim in relation to the gardens and surrounds is that they have not been well maintained since the demolition of various buildings in 2009 and 2010. Mrs Winter contends that they are overgrown, rundown and generally not aesthetically pleasing as they once were (at para 18.2 of Exhibit I; at para 49 of Exhibit G; at para 84 of Exhibit A; and T:109, 22.08.2011 Mr Minchin). Included in Mrs Winter's bundle of documents Exhibit C is a number of photographs depicting the lawn and garden areas at the village. Photographs 4 17, taken at the same time as the photographs of the pool and spa, depict a none too flattering picture of the village grounds. Many of these photographs are of areas adjacent to those which have been fenced off.
RCA raises the following responses to the claims that the grounds are poorly maintained:
a)The grounds are well maintained. The views of Mrs Winter, and other residents who gave evidence at the hearing in support of her contentions, are entirely subjective and contrary to those of other residents and witnesses. An example appears in the statement of Ms Zotti that upgrade works in the areas of Centennial Close and Wyvern in 2010 have made the area 'a truly beautiful place' (para 41 of Exhibit T).
b)The grounds suffered considerable damage as a result of the serious hailstorm which occurred in March 2010, and required RCA to undertake significant remedial work involving the investment of a large amount of resources (para 44 of Exhibit T and paras 35 38 of Exhibit P).
c)RCA undertakes regular maintenance of the grounds, and spends considerable amounts in that regard. During 2010, significant upgrades occurred to the grounds in the vicinity of Centennial Close and Wyvern (paras 33 and 34 of Exhibit T).
d)Mrs Winter's own witnesses pointed to a recent improvement in the gardens (T:98, 22/08/2011 Dr Stevenson; para 23 of Exhibit N and para 24 of Exhibit I; T:109, 22/08/2011 Mr Minchin).
As we have said, the photographic evidence supports Mrs Winter's claim of a failure to maintain parts of the village grounds. The obligation under cl 12.13 of the RCA contract applies to all lawns and gardens in the village. Accepting that the photographs were taken towards the end of winter, when gardens are not at their best, a number of areas depicted look unkempt, overgrown and shabby. Further, whilst we accept that a major storm event occurred in March 2010, this does not explain the parlous condition of the areas shown in the photographs taken in August 2010, nor detract from RCA's obligations under the RCA contract.
Ms Zotti's glowing endorsement is limited to the areas improved as a result of the 2010 upgrade. Although it appears that there was a special effort undertaken to generally improve some areas of the grounds and gardens, and some improvement has been acknowledged, including by Mrs Winter's own witnesses, this does not absolve RCA of its maintenance obligation. We specifically reject RCA's submission that the only question for us is whether RCA has taken reasonable steps to maintain the community property in the village, not whether the maintenance reaches any particular standard. We do so for the reasons we gave in our consideration of the complaint regarding the swimming pool and spa.
The Tribunal also accepts statements by representatives of RCA that the village is in the course of redevelopment stage, with a number of buildings having been demolished and plans afoot to build new facilities. However, again, this does not alter the contractual obligations imposed on RCA to maintain village facilities. The applicant and other residents are entitled to expect to live in a village that is well maintained, tidy and in good repair. For the reasons we have given, we do not consider that this is currently the case in relation to a number of the gardens, lawns and pathways in the village.
In relation to the contentions regarding the condition of the Wyvern building, we are alive to the continued importance of Wyvern to the outcome of Mrs Winter's application, given that it will continue to fulfil the role of providing some facilities and amenities which RCA is contractually bound to deliver, a matter confirmed by Mr Zambuni in his evidence before us (T:88, 23/08/2011).
The Tribunal detected a shift in Mrs Winter's position in relation to Wyvern. As part of her preparation for the hearing, she went to the extent of obtaining a statement from Mr Teede, a site supervisor experienced in the building and construction industry, which presented a picture of endemic problems with Wyvern, but the cost of rectification would be in a similar range to the cost of demolition (Mr Teede's statement is Exhibit D, the tendering of which was strongly opposed). However, the only reference to maintenance issues concerning Wyvern in Mrs Winter's written outline of closing submissions is a claim that RCA failed to properly maintain Wyvern's laundry and elevators. The minute of proposed orders accompanying the outline includes, relevantly, that pending the construction of a community centre to certain specifications, RCA maintains to a reasonable standard communal facilities at the village, including the Wyvern common rooms.
We have regarded the complaint regarding Wyvern as being limited to the condition of the common room and the lifts.
The evidence before us suggests that all the common areas in the Wyvern building, including the common room on the fourth floor, continue to be used fairly extensively for a variety of reasons. Although the common room is now in less than pristine condition, that is to be expected given the age of the building. It is certainly not uninhabitable and continues to fulfil its function.
The issue which does concern us in relation to Wyvern is the evidence of one of the two lifts in the building having been out of service and unable to be used for four to six months (T: 97 22/08/2011 Dr Stevenson). Given that the fourth floor common area is currently being used for the purposes of meetings and functions, possibly for groups of people as large as 75, we regard the extended unavailability of one of the two lifts as constituting a clear breach of RCA's obligations pursuant to the RCA contract to provide access to the common room and other facilities currently being provided in Wyvern.
What is the appropriate relief for the failure to maintain community facilities in breach of contract?
Going on Mrs Winter's written outline of closing submissions, she seeks an order under s 56(4)(a) of the Retirement Villages Act 1992 (WA) (RV Act) for specific performance of the contractual terms breached on the basis that damages would be an inadequate remedy. For largely the same reasons as we gave in relation to the first head of claims, we accede to this request.
There will be an order for specific performance referable to cl 12.13 of the RCA contract by requiring RCA to properly maintain the lawns and gardens in reasonable condition, in light of our criticisms in these reasons. RCA shall also be ordered to take necessary steps to ensure that both lifts in Wyvern are kept in working order.
Are terms to be implied that RCA continues to operate the village as a retirement village and to relet or relicense any ILU becoming vacant?
Mrs Winter submits that the contracts between Mrs Winter on the one hand, and both the SA and RCA on the other, gave rise to the following twofold obligation:
1)to operate Hollywood Village 'as a retirement village'; and
2)to undertake all reasonable efforts to relet or relicense ILUs as they became vacant, so long as Mrs Winter remained licensed to occupy her ILU.
The second of these obligations is said to be 'included' within the first. Based on the arguments advanced by Mrs Winter, the two obligations are inextricably linked to each other. In essence, Mrs Winter submits that the retirement village is defined by reference to the size of the village population at the time Mrs Winter entered into her retirement village contract, with a concomitant level of ambience, vitality, amenities and facilities.
Although Mrs Winter's outline of submissions filed shortly prior to the hearing suggested that these obligations arose directly from 'the express terms of the [RCA] contract', the preponderance of Mrs Winter's contentions are directed at considerations going to the implication of terms. We think that this is appropriate, as the obligations which Mrs Winter urges us to find are not included within any express term of either the SA contract or the RCA contract, nor by way of necessary inference on our reading of them.
Three legal grounds are asserted in support of the alleged implied terms.
The first ground is that the terms are to be implied in law, as a legal incident of all contracts of a particular class which answer a particular description. Relying on High Court authority (Byrne v Australian Airlines Ltd (1995) 185 CLR 410 (Byrne) at [448] [452]), the implication of the term contended for is required lest the enjoyment of rights conferred by the contract would or could be rendered nugatory, worthless or seriously undermined. Mrs Winter draws an analogy with the relationship of landlord and tenant, in respect of which the courts have been prepared to imply obligations on the part of the landlord in order to secure the tenant's basic rights as the tenant.
Mrs Winter points out that the class of contract with which this matter is concerned retirement village contracts is well recognised, governed by specific legislation and capable of clear distinction. Perhaps more controversially, Mrs Winter refers to the following 'essential' incidents of the 'concept of a retirement village':
•maintenance of the population for which it was designed,
•continuous relicensing of premises, allowing for the constant turnover of residents to militate against a diminishing and ageing population, and
•provision of services and amenities at the level contemplated by residents at the time of their admission.
According to Mrs Winter, absent the alleged term for the licensing of vacant units, RCA would not have any contractual obligation to relicense units. It would then be free to downsize to an extent that the village is no longer a retirement village. This, submits Mrs Winter, would be inconsistent with the nature of the relationship between the parties, the intentions of Parliament in enacting the RV Act, the Charter of Resident's Rights and Responsibilities, public policy and community expectations. As such, it would undermine the resident's contractual position. It would also be abhorrent to the policy objectives of the legislature.
The second ground relied upon by Mrs Winter for the implication of the two terms is by a course of dealing or custom.
According to Mrs Winter, a term may be implied by a course of dealing or custom where, among other things:
•evidence exists that the custom relied upon is so well known and acquiesced in that everyone making a contract in the same circumstances can reasonably be presumed to have imported that term into the contract; and
•the implied term is not contrary to the expressed terms of the contract.
Mrs Winter observes that the existence of a custom or usage to justify the implication contended for is a question of fact.
Relevantly to this case, according to Mrs Winter, it is customary for retirement village populations to be replenished or increased, thereby ensuring that the community atmosphere and vibrancy is maintained and the retirement village operator has sufficient revenue to maintain the facilities and amenities of the village. Such a custom is said to be supported by RCA's own evidence, and is consistent with provisions of the Fair Trading (Retirement Village Code) Regulations 2009 (WA) (FT Regulations) dealing with retirement village operators' obligation of prudential management and marketing of residential premises.
The third ground advanced for the alleged implied terms is as a matter of fact, consistent with the classical formulation in BP Refinery (Western Port) Pty Ltd v Shire of Hastings (1977) 180 CLR 2066 (BP Refinery) at [282] and [283] that the asserted terms:
•be reasonable and equitable;
•be necessary to give business efficacy to the contract;
•be so obvious as to 'go without saying';
•be capable of clear expression; and
•not be inconsistent with any express term.
We paraphrase Mrs Winter's submissions in respect of each of these factors successively:
a)RCA was aware of the extent of its obligations on entering its contract with Mrs Winter and the deed poll with SA. Its costs of compliance will be offset by residents' service fees and entry fees of new residents.
b)RCA's obligations to manage and operate the village, of necessity, require it to allow new residents to occupy vacant ILUs, and to continue to collect fees at a consistent level to enable the same services and amenities to be provided.
c)In the context of a retirement village operating in Australia, the terms were obvious at the time the parties entered the contract.
d)The terms are capable of clear expression.
e)Rather than contradicting any express term, they are consistent with the parties' obligations and expectations.
Consideration of arguments for implication of alleged terms
Terms may be implied into contracts in a number of circumstances. They may be implied as a matter of fact in order to give business efficacy to the contract. They may be implied as a matter of law from the nature of the contract itself or by statute. They may be implied by construction of the contract. They may also be implied by a course of conduct or by custom or usage: see Carter on Contract, LexisNexis Australia, Service 30 October 2011, Pt 11 Chpt 11.
We deal first with Mrs Winter's contention for implied terms by operation of law. Where, as in this case, there is no evidence of an asserted term having been implied previously into the same type of contract, it is for the party alleging the implied term to show that it is necessary that the term be implied in the novel situation: Byrne at [450], Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10 (Plowman) at [31].
Consideration of the case law sheds some light on where implication by law might arise. In Hospital Products v United States Surgical Corporation (1984) 156 CLR 41 (Hospital Products), an obligation was implied, in an exclusive distributorship agreement, on the part of the supplier to use 'best efforts' to supply the goods, and on the part of the distributor to use 'best efforts' to promote their sale, but not that the distributor would not do anything inimical to the market in Australia for the products to be distributed. In Plowman, it was held that an arbitration agreement incorporates obligations of privacy and confidentiality implied by law. In White v Australian and New Zealand Theatres Limited(1943) 67 CLR 266, it was held that a term is implied by law in a contract to employ an artist or entertainer obliging the employer to provide reasonable opportunities of performance and publicity.
However, in Byrne, it was held that there is no inherent or implied term in a contract of employment precluding harsh, unjust or unreasonable dismissal, given the presence of award provisions offering at least limited protection. In Breen v Williams (1996) 186 CLR 71, it was held that there is no implied term in a contract between doctor and patient conferring on the patient a right of access to medical records.
The necessity said to arise in respect of Mrs Winter's retirement village contract is that, absent a term for the reletting of units which become vacant, the rights and interests of continuing residents would be significantly diminished, because:
•the number of other residents would decrease, with a consequential reduction in the amenity and vitality of the village;
•the average age of the resident population would increase, with the same consequence; and
•the facilities and amenities would necessarily be reduced, by reason of the reduced revenue base resulting from a reduction in fee paying residents.
Mrs Winter's analogy with the landlord and tenant relationship relied upon the following passage from Lord Wilberforce's judgment in Liverpool City Council v Irwin [1977] AC 239 at [254]:
The relationship accepted by the corporation is one of landlord and tenant: the tenant accepts obligations accordingly, in relation inter alia to the stairs, the lifts and the chutes. All these are not just facilities, or conveniences provided at discretion: they are essentials of the tenancy without which life in the dwellings, as a tenant, is not possible. To leave the landlord free of contractual obligation as regards these matters, and subject only to administrative or political pressure, is, in my opinion, inconsistent totally with the nature of this relationship. The subject matter of the lease (high rise blocks) and the relationship created by the tenancy demand, of their very nature, some contractual obligation on the landlord.
His Lordship found in favour of the defendant's counterclaim for damages based on an implied term that the plaintiff would keep the common parts of a tower block housing estate in repair. The reason for such an implied term was stated succinctly, immediately prior to the passage relied upon by Mrs Winter, as follows:
[Such] obligation should be read into the contract as the nature of the contract itself implicitly requires, no more, no less: a test, in other words, of necessity.
What, then, is the nature of a retirement village contract, and what, if any, implied terms are required?
We start with the definition of 'retirement village' in the RV Act:
retirement village means a complex of residential premises, whether or not including hostel units, and appurtenant land, occupied or intended for occupation under a retirement village scheme or used or intended to be used for or in connection with a retirement village scheme[.]
'Retirement village scheme' is defined in the RV Act to mean a scheme established for retired persons or predominantly for retired persons under which (among a number of alternatives) residential premises are occupied under a lease or licence, excluding where no resident pays a premium upon admission as a resident.
'Residence contract' is defined as a contract, agreement, scheme or arrangement which creates or gives rise to a right to occupy residential premises in a retirement village, and may take the form of a lease or a licence. Any residence contract must be in writing: s 13(1) of the RV Act.
Prior to a person entering into a residence contract, the owner is required to give to the person various documents, including a statement containing information regarding the proposed arrangement as prescribed, a copy of the residence rules of the village and a copy of any applicable code (in Mrs Winter's case the FT Regulations).
The obligation of the owner of retirement village land to lodge a memorial recording the fact that the land is to be used as a retirement village is contained in s 15 of the RV Act. Of some significance to this case, an application by the owner to cancel the registration of the memorial will be granted where the Registrar of Titles is satisfied that no part of the land to which the memorial relates is still used, or proposed to be used, as a retirement village.
No invitation for applications to enter a contract having the effect of creating or giving rise to a right to occupy residential premises in a retirement village, and no contract having such an effect, is permitted unless a memorial has been lodged under s 15: s 16 of the RV Act.
The treatment of premiums paid to the administering body prior to a potential resident entering into occupation or deciding against doing so is dealt with in s 18 of the RV Act.
Section 19 of the RV Act deals with contractual rights of residence under service contracts.
Section 22(1) of the RV Act provides that a retirement village scheme cannot be terminated without the approval of the Supreme Court while any resident remains.
Part 4 of the RV Act (comprising s 42 s 67) is concerned with resolution of disputes, including by applications made to the Tribunal.
Based upon the provisions of the RV Act to which we have referred, the following essential requirements for a 'retirement village' exist:
•a complex of residential premises;
•occupation of the premises substantially by retired persons pursuant in each case to a written contract;
•at least some residents pay a premium upon commencement of their residency, and
•use of the land as a retirement village recorded on the title.
We acknowledge, as pointed out by Mrs Winter, that various other statutory instruments impact upon the management and occupation of retirement villages. However, in terms of defining what a retirement village is, it is not, in our view, necessary, or even permissible, to stray outside the above essentials.
In particular, to say, as Mrs Winter does, that it is essential to the concept of a retirement village that the village population be maintained at the level for which the original buildings catered and that the premises be continuously relicensed is, in our view, to overstate the position.
Retirement villages may be large or small. They may be replete with facilities or be minimal in that regard. There is simply no basis, in our view, to restrict the ability of the administering body to oversee decreases, or indeed increases, in population sizes, based upon a notional fixed village population as at an arbitrary date (the date contended for by Mrs Winter being when she entered her contract with either SA or RCA).
This is not to say that any impact of a decrease in population size on provision of facilities and amenities to the detriment of continuing residents will go unchallenged. Residents would be entitled to invoke the terms Mrs Winter has in this case.
What the legal authorities make clear is that the threshold for implication of terms as a matter of law is a high one, particularly where, as here, the term has not previously been recognised as a normal incident of the type of contract under consideration.
We also note that the content of the alleged implied terms are identical to the incidents claimed to be essential to the concept of retirement villages. As such, the contention for the implication of the terms is selffulfilling. It would be an extreme case in which such a contention might be justified. Contrast this with the examples alluded to above, in which the implication of terms by law occurred, not by any identity of the terms to be implied and factors underpinning the relationship between the contracting parties, but in order to cater for unanticipated consequences of complying with the principal contractual obligations, or to ensure that those obligations are carried out in a way consistent with the parties' reasonable expectations.
For the above reasons, we are unable to accept that the alleged implied terms are necessarily to be implied in the RCA or the SA contracts. Therefore, the claim for their implication by operation of law fails.
We can deal with Mrs Winter's submission that the alleged terms are to be implied by a course of dealing or custom quite shortly.
Given there is no evidence of any course of dealing between the parties, Mrs Winter's submission is limited to one that the alleged implied terms arise by reason of a custom or usage.
As Mrs Winter has observed, the following propositions apply to this category of implied term:
a)the existence of a custom or usage that will justify the implication of a term into a contract is a question of fact;
b)there must be evidence that the custom relied on is so well known and acquiesced that everyone making a contract in that situation can reasonably be presumed to have imported that term into the contract;
c)the custom need not be universally accepted;
d)an implied term based on custom must not be contrary to an expressed term of the agreement; and
e)a person may be bound by a custom notwithstanding the fact that he had no knowledge of it.
Constan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Aust) Ltd (1986) 160 CLR 226 (ConStan) is cited as the authority for these propositions.
There is no evidence to the effect of the second of the ConStan propositions. The closest Mrs Winter gets is to refer to some of RCA's own evidence disclosing its intention to substitute 100 new ILUs on the old Crossleigh site, and its acceptance of propositions, put to it in crossexamination, that the general objective of any proprietor of a retirement village is to maximise the occupancy of the village and to create a community that is attractive to residents. These references are not sufficient to demonstrate the existence of a well established custom to the effect of the alleged implied terms which is known to proprietors and residents in the retirement village context. Rather, they disclose motivations for owners of retirement villages to maximise resident numbers, and their manifestation in this case.
In these circumstances, we reject Mrs Winter's claim based upon implication of the alleged terms by custom or usage.
We turn to the third ground advanced for implication of terms, that they are to be implied as a matter of fact in order to give the contract business efficacy.
It is sometimes said that a term implied by law gives effect to the presumed intention of the parties, whereas a term implied in fact reflects the parties' actual intention: see Carter on Contract at paras 11 130. The asserted terms must be critical to the sensible operation of the contract. Putting this slightly differently, a term is to be implied where, without the term, the contract would be unworkable: see Hospital Products at [66].
Under the RCA contract, RCA is required to allow Mrs Winter to occupy her unit (being the unit within the village to which Mrs Winter was relocated, with her consent, subsequent to the closure of Centennial Close) and to provide the amenities and facilities referred to in the contract, for which a service fee is payable. We accept, for all the reasons advanced by Mrs Winter, that, from her perspective, it would have been the preferred course of action for RCA to relicense ILUs whenever the licensee departed. The question is whether it is necessary to imply into the terms of her contract with RCA, as a matter of fact in accordance with the principles set out earlier in BP Refinery, that RCA do so.
The requirement that the asserted term be reasonable and equitable extends to both parties. Without being a determinative factor, the alleged term constitutes a significant impost upon the freedom of RCA to manage the village in the way it sees fit, well beyond any obligation arising under the contract. We consider this factor militates against the implication of the alleged terms.
The requirement that the term is necessary to give business efficacy is central to the implication of terms as a matter of fact. It represents the genesis of the workability test. If the contract will work in the business sense without the alleged term, no implication will arise: see Carter on Contract at paras 11 70.
We believe that the retirement village contract can work, and has worked, in its essential requirements, without the terms asserted by Mrs Winter. She has enjoyed the occupation of her unit, and had the benefit of the communal facilities and amenities, such as they are. We will return shortly to the alleged diminution of those facilities and amenities. For reasons we gave in relation to the alleged implied term by operation of law, we do not regard the maintenance of the village population as at the date of the contracting between RCA and Mrs Winter, which is the central theme of Mrs Winter's case, to be a necessary or essential feature of the contract.
Bound up with our findings on the first and second BP Refinery factors, it cannot, in our view, be said that the alleged terms are so obvious as to go without saying. This is particularly so given, as we have said, the significant limitation that the terms would represent for RCA. Any contractual term fettering the ability of an administering body to adjust the size of a retirement village consistently with the alleged terms should, in our view, be in express and unambiguous terms.
We have not laboured under the difficulty that RCA indicates it has in relation to the next requirement, that the alleged terms be capable of clear expression, at least not to the same extent. We consider that a term that RCA uses its best endeavours to relet or relicense ILUs in the circumstances described is tolerably clear. We do have some doubt about the clarity of the first limb, or term, that RCA operate the village 'as a retirement village'. In the event that Mrs Winter had succeeded in her arguments, it might be that this would have been excised from any order made.
Finally, we note the parties' disagreement over whether or not the alleged terms are inconsistent with any express terms of the contract. The respondent identified three separate cases of inconsistency:
•the definition of 'village', which includes 'the improvements on [the land included in the village] from time to time';
•cl 13.1(b) and cl 13.1(c), providing that, if the resident's unit is destroyed, RCA may relocate the resident to another comparable unit or terminate the residence contract; and
•cl 20.4, dealing with the administering body's intention to cease operating the village.
We consider that the definition of 'village' does tend to reinforce our earlier observation concerning the potential for the village to vary in size over time, whereas acceptance of the alleged terms would fix the village size to that existing at the time of the contract. The other examples relied upon could properly be regarded as exceptions to, and therefore not inconsistent with, an obligation to maintain resident numbers through the reletting obligation.
The provision of the contract which, in our view, militates most strongly against the alleged implied terms is cl 7, dealing with 'Community Facilities', as defined in cl 2. This is because the alleged implied terms are posited as the means by which Mrs Winter's rights to continued enjoyment of facilities and amenities will be preserved, when cl 7 itself is concerned with that matter. As demonstrated in Hospital Products and other cases, the scope for implication of terms is drastically reduced where the terms asserted cover the same or similar subject as the express terms of the contract. Here, Mrs Winter was able to invoke her contractual rights in respect of alleged omissions to provide the village facilities which RCA was obliged to provide, and she has done so.
For the above reasons, we find that the essential requirements for the implication of the alleged terms as a matter of fact have not been satisfied.
Does any breach of the alleged implied terms fall within the Tribunal's jurisdiction? If so, what is the appropriate relief?
In light of our findings in relation to the alleged applied terms, it is not necessary for us to deal with the parties' competing arguments concerning whether the alleged terms fall within any 'service contract', and therefore within the jurisdiction of the Tribunal under s 56(1) of the RV Act, or are part of a 'residence contract', with the opposite result. Similarly, although there is no dispute that RCA has not endeavoured to relet or relicense ILUs becoming available, our finding that there is no implied term requiring it do so means that the occasion for us to consider the appropriate remedy does not arise.
Costs
Both parties have indicated their desire for a costs order. Of course, they did so prior to the outcome becoming known. As these reasons make clear, neither party has been completely successful, nor completely unsuccessful. To the extent that it is necessary to do, we remind the parties that the rebuttable presumption in the Tribunal, based upon s 87(1) of the State Administrative Tribunal Act 2004 (WA), is that each party bears its own costs, even where one party is entirely successful.
The order issued by the Tribunal will provide a time limited opportunity to pursue an application for costs and fix the conditions for doing so.
Order
The Tribunal will issue an order in the following terms:
1.Pursuant to s 56(4) of the Retirement Villages Act 1992 (WA), the second respondent shall:
a.ensure that on or before 29 February 2012 the existing swimming pool, spa and bricked barbeque are brought up to such a standard that they are usable and visually presentable, and thereafter are maintained to the same standard;
b.on or before 29 February 2012 reestablish a minimum of three outdoor settings in the vicinity of the barbeque; and
c.ensure that adequate access to the abovementioned facilities is available at all times.
2.Pursuant to s 56(4) of the Retirement Villages Act 1992 (WA), the second respondent shall ensure that on or before 15 February 2012 the gardens, lawns and pathways are brought up to such a standard that they are in good condition and reasonably neat and tidy, and thereafter are maintained to the same standard.
3.Pursuant to s 56(4) of the Retirement Villages Act 1992 (WA), the second respondent shall at all times use its best endeavours to ensure that both lifts installed in the Wyvern building are in good and workable condition and repaired when necessary.
4.Both the applicant and the second respondent shall have liberty to apply for their costs of the proceeding, by filing with the Tribunal and giving to the second respondent or applicant, as the case may be, on or before 17 February 2012, the following documents:
a.a bill of costs;
b.a statement of the basis on which costs have been included in the bill of costs and providing any relevant factual support for the application; and
c.written submissions supporting the application.
5.If either named party makes an application for costs, the other named party may, on or before 24 February 2012, file with the Tribunal and give to the applicant or the second respondent, as the case may be, written submissions opposing the application.
6.If either named party makes an application for costs, the Tribunal shall determine the application on the documents after 24 February 2012, and if costs are awarded, shall fix the amount of such costs.
I certify that this and the preceding [149] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
MR T CAREY, MEMBER
2
7
3