Aesbacher v Nambucca Villiage Pty Ltd

background

1. All of the Home Owners entered into site agreements with the Operator at various times, either under the Residential (Land Lease) Communities Act 2013 or the previous Residential Parks Act 1998 (now repealed) ("RPA").
2. From the time that the applicants entered into their respective site agreements (and up until February 2020), the Operator on-sold electricity to the Home Owners through an embedded electricity network, and the Home Owners paid the Operator for the supply of electricity.
3. From 1 February 2019, the Operator adopted the "Reckless method" (named after the method of calculation which was used by the Tribunal in the matter of Reckless v Silva Portfolios Pty Ltd t/as Ballina Waterfront Village and Tourist Park (No. 2) [2018] NSWCATCD 59) to calculate the amount each home owner was to be charged for electricity. Consequently, home owners were not to be charged a separate service availability charge ("SAC") and, following application made to the Tribunal by the Home Owner, the Tribunal ordered repayment by the Operator of amounts that had been paid for SAC (RC19/53176).
4. From 5 February 2020, the Home Owners were charged for their electricity supply by Humenergy. The amount charged include a usage charge (and also a Daily Supply Charge ("DSC"). The overall amount charged therefore is now higher than it was immediately prior to February 2020, when the electricity was supplied by the Operator.
5. The Home Owners say that the decision by the Operator to cease supplying electricity and to engage Humenergy to supply electricity to them as unilateral and that they were not consulted, and did not agree to that change. The Home Owners say that they made attempts to seek an alternative supplier but none were interested in supplying electricity to home owners in an embedded network. Further, any such change would also have required the Home Owners to incur significant costs in upgrading their energy meters.
6. There have been a number of decisions made by the Tribunal that relate to this matter. These matters include Chapman v Nambucca Village Pty Ltd [2021] NSWCATCD 18 and a decision of Senior Member Ross on 8 September 2021 in matter RC21/16698. Both of these decisions were referred to by the parties in their submissions to the Tribunal in the present matter.

JURISDICTION

1. As noted above the Home Owners have entered into site agreements with the Operator under both the Residential (Land Lease) Communities Act 2013 and / or the previous Residential Parks Act 1998 (now repealed). Schedule 2 clause 5 of the of the RLLC Act says that any site agreement which was entered into under the RPA continues under the RLLC Act.
2. In addition section 6 of the RLLC Act says that it applies to all current site agreements whether entered into before or after the commencement of that act (unless a provision of the RLLC Act provides otherwise).
3. The applications in these matters were filed in the Tribunal on 10 September 2021 seeking orders under section 64(1) of the RLLC Act. It appears that the applications have been filed within the time required by Schedule 3 of the Residential (Land Lease) Communities Regulation 2015 ("RLLC Regs") being the period during which the site agreement is in force.
4. The Tribunal is therefore satisfied that it has jurisdiction to hear and determine this matter.

the law

1. The relevant sections of the RLLC Act applicable in this matter are set out below.
2. Section 37 of the RLLC Act provides, relevantly: 37 Operator's responsibilities (1) The operator of a community has the following responsibilities - … (f) to the extent that it is within the operator's control, to ensure the continuity of supply of utilities to residential sites occupied by home owners,
3. Section 64 of the RLLC Act provides, relevantly: 64 Power of Tribunal to reduce site fees 1. The Tribunal may, on application by the home owner under a site agreement, make an order that the site fees payable under the agreement be reduced by an amount the Tribunal considers appropriate if it is satisfied - 1. the amenity or standard of the community's common areas has decreased substantially since the agreement was entered into, or 2. a communal facility or service provided at the community when the agreement was entered into has been withdrawn or substantially reduced, or 3. a communal facility or service as follows has not been provided at the community - 1. a communal facility or service described in advertising, done by or for the operator, of which the home owner was aware before the site agreement was entered into, 2. a communal facility or service described in a document made available to the home owner by the operator before the site agreement was entered into. 1. The Tribunal may consider any of the following documents for the purposes of subsection (1) - 1. the site agreement, 2. a disclosure statement or other document containing information about the community and provided to the home owner by the operator, 3. any relevant advertising made available to the home owner by the operator before the site agreement was entered into, 4. any other document that the Tribunal considers is relevant.
4. Section 77 says: 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. (4) 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). (5) 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.
5. Section 157 of the Act provides, relevantly: 157 Orders that may be made by Tribunal (1) The Tribunal may, on application by a party to a dispute or other matter before the Tribunal, or in any proceedings under this Act, make one or more of the following orders - (a) an order that restrains an action in breach of this Act or a site agreement or collateral agreement, (b) an order that requires a person to comply with an obligation under this Act or a site agreement or collateral agreement, … (d) an order for the payment of an amount of money, (e) an order for the payment of compensation, … (j) an order for anything else necessary or desirable to resolve a dispute. (2) An order under subsection (1)(a) or (b) may be made even though it provides a remedy in the nature of an injunction or order for specific performance in circumstances in which such a remedy would not otherwise be available.

APPLICANTS' CASE

1. The applicants were represented at the hearing by Ms Chapman. The applicants relied upon a bundle of documents which were entered into evidence and marked as "Exhibit 1". In addition Ms Chapman gave oral evidence in support of the applicants' case.
2. It was the applicants' case that the respondent withdrew or substantially reduced a service provided at the commencement of the agreements, which should entitle them to a site fee reduction under s 64(1)(b) of the RLLC Act. As a result they had been forced into a contract with an electricity retailer and required to pay higher charges than those previously payable to the Respondent under the RLLC Act. They relied on the fact that their electricity charges had increased and were no longer regulated by s 77 of the RLLC Act demonstrated that the service had been substantially reduced or withdrawn.
3. The applicants also argued that there was a breach of a contractual promise made by the respondent when the parties entered into their respective site agreements and therefore the respondent should be liable to compensate the applicants under s 64 of the RLLC Act.
4. The applicants' submitted that the decision by Member Hanstein in the matter of Chapman v Nambucca Village Pty Ltd [2021] NSWCATCD 18 was persuasive in the current matter.

RESPONDENT'S CASE

1. The respondent was represented at the hearing by Mr Tarnawsky. The respondent relied upon a bundle of documents which were entered into evidence and marked as "Exhibit 2". In addition Mr Tarnawsky gave oral evidence in support of the respondent's case.
2. The respondent sought for the application to be dismissed for a number of reasons. Firstly the respondent argued that there had been no withdrawal of the supply of electricity by them, that they had ensured continuity of supply with the change to Humenergy. Further that there was no compulsion under s 77 of the RLLC Act for the operator to resell electricity, only that they can in compliance with the conditions set out in s 77 of the RLLC Act.
3. Secondly, there was an estoppel created by a decision in matter RC21/16698 by Senior Member Ross as any cost increase to the homeowners since their previous increase to the one on 27 May 2021 was considered in that matter.

RES JUDICATA AND/OR ISSUE ESTOPPEL

1. The principles of res judicata and issue estoppel were explored by the Appeal Panel in Pearson v Clark [2016] NSWCATAP 134. The relevant passages , which explain the two principles, are below: 63 In order to understand the correctness of the October Decision it is necessary to understand the circumstances in which the principle of res judicata apply. In Effrem Foods v Trawl Industries 115 ALR 337 the Full Court of the Federal Court of Australia Northrop and Lee JJ said at p380 line 10: In principle, res judicata is a defence to a claim in a legal proceeding. Traditionally it is a technical defence allowing no discretion in the court. The defence, if made out, is a complete bar to the claim. Unfortunately lack of a clear dichotomy between the defence of res judicata and similar defences based upon estoppel can give, and has given, rise to confusion in Australia, England and the USA. 64 Their Honours, at p380 then referred to the High Court decision in Jackson v Goldsmith (1950) 81 CLR 446 in which the principles of res judicata and issue estoppel arose for consideration. In that case, Fullagar J set out the applicable rules of law. As noted by Northrop and Lee JJ in Effrem, "(a)lthough Fullagar J dissented in the judgement of the High Court, his exposition on this aspect of the matter can be treated as authority since his dissent was based upon the application of the principle to the facts of that case". 65 In Jackson, Fullagar J said at 4668: The rule as to res judicata can be stated sufficiently for present purposes by saying that, where an action has been brought and judgement has been entered in that action, no other proceedings can thereafter be maintained on the same cause of action. This rule is not, to my mind, correctly classified under the heading of estoppel at all. It is a broad rule of public policy based upon the principles expressed in the maxim "all". The rule as to issue estoppel is generally stated in the words of Lord Ellenborough in Outram v Morewood (1803) 3 Beast 346 at 355 102 ER 630 at 633. His Lordship said that the parties and privies are "precluded from contending to the contrary of that point, or matter of fact, which having been once distinctly put in issue by them ... has been, on such issue joined, solemnly found against them". This is I think, a true case of estoppel, analogous to estoppel by deed and estoppel by representation. The same rule was concisely stated by Dixon J in Blair v Curran (1939) 69 CLR and 531 where his Honour said "A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies." It is unnecessary here to discuss these two principles further beyond noting two points. In the first place, if A sues B to judgement and in subsequent proceedings between them a plea of res judicata is raised, the primary question is whether the cause of action in the later proceedings is the same as that which was litigated in the former proceedings. This was the question which arose in the wellknown case of Brunsden v Humphrey (1884) 14 QBD 141. It was held there that the causes of action were not the same. The injuria was the same but the damnum was different, and, since damage was "of the gist" of the particular action, the causes of action were not the same. The plea therefore failed. On the other hand, if A sues B to judgement and in subsequent proceedings between them a plea of issue estoppel is raised, the plea may succeed although the causes of action in the two cases are entirely different. The question will be whether an issue of fact or law which is raised in the later proceedings was an issue of fact or law which was also raised in the earlier proceedings and therefore determined."
2. In the matter of Gleeson v The Owners - Strata Plan No 48226 [2018] NSWCATAP 204, the Appeal Panel considered the legal doctrines of res judicata and issue estoppel. That case considered whether the Tribunal is bound to hear a dispute in circumstances where a Tribunal adjudicator had previously determined a similar issue.
3. The Appeal Panel decision cited Halsburys (online) at [190-45] which says: res judicata is the principle of law which prohibits a party from bringing a further action in respect of a subject matter raised and determined in a prior final judgment before a competent tribunal between the same parties or their privies litigating in the same capacity; if made out, res judicata is a complete bar to the claim; res judicata is founded on the necessity of avoiding re-agitation of issues and of preventing the raising of issues which could have been and should have been decided in earlier litigation; res judicata is not restricted to courts of record. It applies to judicial decisions of a final nature of any court or tribunal upon any matter over which it has jurisdiction to give a final judicial decision, including arbitral tribunals and a consumer claims tribunal: Maganja v Arthur [1984] 3 NSWLR 561 at 563; in order to establish a plea of res judicata, it must be shown that the cause of action in the later proceedings is the same as that which was litigated in the former proceedings. "Cause of action" means (i) the series of facts which the plaintiff must allege and prove to substantiate a right to judgment, (ii) the legal right which has been infringed, and (iii) the substance of the action as distinct from its form: Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 610; res judicata applies where there is an identity of parties. This occurs where the parties are literally the same or there is privity of interest or capacity. The determination of identity between litigants for the purpose of establishing privity is a question of fact. There are three classes of privies, blood, title and interest.
4. In relation to issue estoppel Halsburys says the principle is "a final judgment by a competent tribunal forever binds the parties and all those who claim through them in respect of any issue of fact or law which was legally indispensable to that decision". The Appeal Panel said "for the doctrine to apply in a second set of proceedings: the same question must have been decided the judicial decision which is said to create the estoppel was final and the parties were the same persons as the parties to the proceedings in which the estoppel is raised."
5. What is the difference between res judicata and issue estoppel? Issue estoppel broadens the scope of a claim being disallowed because "the plea of issue estoppel may succeed although the causes of action in the two cases are entirely different (see Halsburys at [190-100])."
6. The Tribunal does not consider that either issue estoppel operates in the present matter. This is for a number of reasons. Firstly, these current proceedings were filed in the Tribunal on or about 10 September 2021. At that time there had been no final determination in matter RC21/16698. The decision in matter RC21/16698 was given on 28 September 2021.
7. Secondly, the issues for determination by the Tribunal in matter RC21/16698 were different to the present matter. In the previous matter the Tribunal considered whether a site fee increase was excessive having regard to section 74 of the RLLC Act. That application did not fully determine and dispose of the issue of the withdrawal of electricity under s 64 of the RLLC Act.

Reduction in site fees

1. The applicants in this matter seek a reduction in their site fees for the period from 5 February 2020 to 7 May 2021 at $10 per week. The total amount sought by each applicant is $650 ($10 x 65 weeks) on the basis that the respondent withdrew or reduced the service.
2. In order to determine whether the applicants are entitled to a reduction in their site fees the Tribunal must first determine whether in fact the respondents had withdrawn or reduced a service as is set out in s 64(1)(b) of the RLLC Act.
3. In the matter of Chapman v Nambucca Village Pty Ltd [2021] NSWCATCD 18 the Tribunal said at 28-31: "I am satisfied that "A communal facility or service provided at the community when the agreement was entered into has been withdrawn or substantially reduced" for the purposes of section 64 of the Act, by the Operator ceasing to on-sell electricity to the Home Owner. My reasons are as follows. Electricity is "a service". If confirmation were necessary, that is provided by the definition of the term "utility" in section 4 of the Act: utility means any of the following services - (a) electricity, (b) gas, (c) sewerage, (d) water, (e) another service prescribed by the regulations. Prior to February 2020, the Operator provided electricity to each home owner in the park through the embedded network. That can be considered a "communal service". That service has been withdrawn or substantially reduced by the Operator no longer providing electricity by way of on-selling it to home owners within the park. It is true that electricity is provided, but that is now done by an external provider rather than being an on-selling by the Operator. I am satisfied it is a withdrawal of the service by the Operator which has been replaced by a different service, being a supply of electricity by an external provider. The supply is on different terms - it is now governed by a contract between the Home Owner and the external provider rather than by the Act. Had the Home Owner not entered into a contract with the external provider, it may be the supply of electricity would not continue. An example of the different terms for the supply is that the Home Owner is now charged the DSC, for which no equivalent appears to have been payable to the Operator immediately prior to February 2020, and the Home Owner's costs for electricity have increased approximately by that amount."
4. In the present matter the Tribunal is similarly satisfied that there has been a withdrawal (or in the alternative a substantial reduction) of a communal facility or service provided at the community when the applicants entered into their various site agreements for the same reasons as set out in the above matter.
5. Having made a finding that there has been a withdrawal (or substantial reduction of a communal facility or service provided the next issue is whether the Tribunal should exercise its discretion to reduce the site fees, and if so the amount of any such reduction.
6. The applicants argued that the Tribunal should apply a reduction of site fees in the amount of $10 per week. This was because the respondent in no longer supplying the applicants with electricity had led to additional costs of approximately $10 per week which they would not have had to pay if the respondent had continued to be their energy supplier. The applicants said that this fee reduction should apply from 5 February 2020 when the service was withdrawn (or reduced) and continue for the duration of the applicant's tenancy, until the service was restored or until a new site fee was applied on 7 May 2021.
7. The respondents argued that in determining any reduction in the site fees that the Tribunal should consider the time that it took for the applicants to make the application from the time that change in supply took place (that is from February 2020 to August 2021). Secondly the value placed on the withdrawal of service when calculating a site fee increase in mater RC21/16698. Finally that the Tribunal ought to consider the "actual reduction" in service. That is that the only reduction in service was that the operator no longer invoiced the home owners, there was no interruption to supply, the operator still maintains the embedded network, the operators staff still read the meters, there has been no break in the continuity of the electrical supply and that the operators staff on site are still able to assist with any queries.
8. In all of the circumstances the Tribunal is satisfied that it should exercise discretion to reduce the Home Owners site fees by the amount of $5 per week from 5 February 2020 until the site fee increase on 7 May 2021. The Tribunal is not satisfied that the site fee reduction should be made on an ongoing basis after this date as the site fee increase from this date takes account of the reduction in service.
9. The Tribunal has decided that the amount should be $5 per week rather than the $10 per week sought by the applicants for a number of reasons. Firstly, it appears that the applicants have obtained some benefit from the decision in matter RC21/16698 in that they have had their site fees reduced by $5 per week taking into account (along with other factors) that the Operator had withdrawn a service (provision of electricity) resulting in an increase in costs to the applicants.
10. Secondly, the Tribunal has considered the length of time that it has taken to bring these proceedings. The applicants have a duty to mitigate their losses as set out in section 157(4) of the RLLC Act which relevantly states: "(4) An order for the payment of compensation to a party is not to be made for loss or damage to the extent the loss or damage could have been avoided or limited by taking reasonable steps to mitigate the loss or damage".

BREACH OF SITE AGREEMENTS

1. An alternative claim of a breach of the applicants' site agreements was put in addition to the claim for a withdrawal / reduction of services. It is not necessary to consider this portion of the claim due to the findings with respect to the issue of the withdrawal / reduction in services. The Tribunal is not persuaded that even if this claim were successful that further relief other than that already given would have been appropriate.

CONCLUSION

1. For the reasons outlined above the Tribunal makes the following orders: 1. The site fees payable by each affected applicant home owner under their respective site agreements are reduced by an amount of $5 per week from 5 February 2020 to 7 May 2021. 2. To give effect to order (1) above, the operator is to pay to each affected Home Owner the sum of $325 on or before 27 March 2022.

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 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 14 March 2022