Appeal to District Court
33In the District Court, the judge identified four errors relied on taken from the applicant's written submissions at pars 22 and 23, namely:
(1) the Tribunal failed to consider the following matters:
(a) the respondent purchased the unit with knowledge of the applicant's non-occupation;
(b) the respondent failed to respond to the applicant's reasonable request to be permitted to sublet the unit;
(c) the applicant would lose the entire amount of $148,000 paid for the lease due to the insolvency of the trustee company which was a party to the lease; and
(2) the Tribunal purported to take into account the non-payment of outgoings by the applicant in circumstances where he was not occupying the unit, but did have regard to the inability of the respondent to collect outgoings unless it furnished a recurrent charge statement in accordance with ss 112 and 113 of the Retirement Villages Act, no such statement having been furnished.
34In his District Court submissions at par 26, the applicant identified five matters which he said the Tribunal had failed to take into account, namely that:
(a) the respondent knew there was a lease on title and purchased the property at a significant discount because of the lease;
(b) the applicant was being asked to occupy the unit in circumstances where the respondent would not be in a position to offer the services which should be available under the Village rules;
(c) the applicant cannot recoup the $148,000 paid for the lease if the lease were to be terminated;
(d) the applicant has been denied the opportunity to sublet the unit until he is ready to move in, and
(e) no recurrent charges schedule has at any time been provided by the respondent.
35The errors identified at [33] above were addressed by the District Court: the Court did not expressly address the matters set out at par 26, which were not in identical terms. Thus (a) at 26 relied upon the respondent's knowledge of the lease and the discount obtained because of the lease. By contrast, the allegation at par 22 was that the respondent purchased the unit with knowledge of the applicant's non-occupation: there was no express claim that it was the non-occupation which led to the discount. Further, the second matter referred to, at (b) of par 26, namely that the services required under Village rules would not be available, was not identified in pars 22 and 23 and was not in terms dealt with by the District Court.
36In dealing with the first matter, the primary judge said, at [16], that the Tribunal had dealt with the question at [20] and accepted that the respondent had bought the premises at a discounted price "because they were burdened by a lease". He then treated the Tribunal's factual finding as a rejection of the proposition that the lessor had purchased the unit "with the knowledge of the lessee's non-occupation of the unit".
37This was a misreading of the Tribunal's reasons. It was not submitted to the Tribunal that non-occupation was the issue, but rather that the respondent had purchased in knowledge of the existence of a long lease and had obtained a discount on the market value of the premises without the lease. The complaint was that the Tribunal failed to take that fact into account in considering whether the lease should be terminated. This complaint was squarely raised in the District Court at par 26(a): the trial judge simply did not address that submission. Whether the respondent's knowledge of non-occupation was a matter relied upon by the Tribunal may be put to one side: the factor which was relied upon before the Tribunal was dealt with by it at [20], but not in respect of the power to order termination. This complaint, which had substance, was apparently misunderstood by the primary judge and therefore not addressed.
38The second matter dealt with by the primary judge was the complaint that it was not non-occupation of the unit which was causing the respondent loss, but its failure to furnish a recurrent charge statement.
39The reasoning of the District Court judge in respect of this matter is not entirely clear, as set out at [19] in the following passage:
"The first step is occupancy. I do not agree with the submission put on behalf of Mr Boele that he would not be liable for the outgoings without provision of the document. In other words, I do not accept that he would be liable under the statute."
40It may be that there is a "not" missing from the last statement: in other words, the primary judge did not consider the provision of a recurrent charge statement to be a precondition to the liability of the applicant. In any event, no argument was put to this Court as to the operation of the Retirement Villages Act in respect of recurrent charges, so that that issue need not be considered further.
41What appears to have decided the point for the primary judge was the first sentence set out above referring to occupancy. That passage in the reasons of the primary judge commenced:
"It seems to me that Mr Boele would liable, if he was occupying the unit, to contribute to outgoings by virtue of clause 4 of the lease."
42That was the effect of additional cl 4.9 set out at [20] above. That conclusion is not challenged.
43The third matter, dealt with by the primary judge, referred to as the "final error" relied on by the applicant, was the loss of the entire amount of the premium: at [20]. The primary judge accepted that the Tribunal "clearly attributed little weight to the fact that Mr Boele would lose his almost $150,000 in that context", the context being the applicant's complaint that certain rules were unjust, unconscionable, harsh or oppressive. The judge then noted the applicant's submission that the Tribunal should have had regard to that factor in exercising its discretion under s 134.
44The judge agreed that the loss of money paid for the lease "was clearly a factor urged upon the Tribunal to consider by [counsel for the applicant] in its application of s 134": at [22]. The judge also accepted that the Tribunal "did not refer to this as a circumstance in applying s 134", and did not expressly take into account the fact of the loss in applying the section.
45The judge then noted the respondent's submission that this was "an irrelevant consideration" and that "what the appellant paid to the original registered proprietor for the lease in 1992 can have no bearing on whether, over 20 years later in 2013, the appellant's breach warranted termination by a subsequent registered proprietor": at [23]. That submission was effectively accepted by the primary judge at [25] where he stated:
"Returning to s 134(3)(a), the focus is on the breach of the resident's contract. The grounds of termination, in that instance, concern an existing breach and the relationship between the existing resident and the operator, even though the operator is now the owner and lessor. In my opinion 'the circumstances of the case' by reference to which the breach is assessed, should be seen in the same context. It is, after all, the current breach of the current legal relationship which is being assessed. I regard the circumstance that the resident lost a lot of money some two decades before when the original operator went into liquidation as being too remote to constitute a relevant 'circumstance of the case' by reference to which the breach should be assessed as to whether the termination is justified or not. It is a regrettable event which occurred in the past and is a circumstance personal to Mr Boele rather than, in my opinion, relevant to his current legal relationship with his lessor, Rinbac Pty Ltd."
46That reasoning may be summarised in the following propositions:
(a) the applicant invited the Tribunal, in considering whether to exercise its power to make a termination order, to take into account the fact that upon termination, the applicant would not recover that part of the premium which had been paid and which should have been repayable (in part) according to the terms of the lease;
(b) the Tribunal did not take that matter into account;
(c) the matter was an irrelevant consideration, and
(d) therefore, the Tribunal did not err in law in failing to take it into account.
47In my view, the primary judge erred in law in dismissing the applicant's complaints in respect of the first and third matters he considered. The failure to consider the complaint with respect to the first matter was a material error. There is no doubt that the Tribunal treated the failure to comply with a notice requiring that the applicant occupy the premises as having caused prejudice to the respondent, not because there had been continuing failure to occupy (a proposition expressly rejected at [46] in the Tribunals' reasons), nor because the applicant was "failing to meet monetary obligations": at [47]. Rather, the lessee was "not required to meet monetary obligations unless he occupies the premises and the only means by which the lessor can protect its interests ... is to require the lessee to reoccupy the premises." The seriousness of the consequence for the respondent was, the Tribunal found, because, there being "no prospect of that situation changing while these circumstances continue" it "would not be likely, or even possible to sell the premises."
48This passage in the reasoning of the Tribunal was fraught with difficulties. First, it ignored the possibility of some arrangement as to subletting; secondly, it assumed that the situation (presumably non-occupancy) would continue indefinitely without considering whether that was in part caused by the intransigence of the respondent with respect to possible subletting. Thirdly, it assumed, apparently without evidence, that absent an occupant, the lease was virtually worthless. Even accepting all that to be so, the Tribunal failed to take into account any diminution of the prejudice caused to the respondent by obtaining the premises at a discount and the prejudice to the applicant in being deprived of property which he had obtained with a significant deposit of key money, which, it was assumed, would not be recoverable on termination.
49Further, in specific reference to the nature of the third matter, the payment made by the applicant may have been "remote" in a chronological sense, but it was of immediate relevance in a legal sense. The premium was not just the price for obtaining the lease on otherwise favourable terms: the premium was a payment which, subject to certain deductions, the applicant was entitled to recover on termination of the lease, in accordance with the terms of the lease. The assumed fact that he would not be able to recover that amount on termination of the lease was a matter which the Tribunal must have taken into account in determining whether to order termination.
50While it is true that that fact, together with loss of the right of residence, were the primary considerations affecting the making of the order, once a breach of the lease by the applicant had been identified, it was also a relevant circumstance in assessing the seriousness of the breach by the applicant and whether it warranted termination. If it did not, the power to terminate was not engaged. It may be that the judge did not mean to state that these were impermissible considerations (being the administrative law meaning of "irrelevant"), but he treated them as considerations deserving of so little weight as to make their non-consideration immaterial. What weight the Tribunal should have given to them, acting reasonably, would have been a matter for the Tribunal. It was undoubtedly open to the Tribunal acting reasonably, having considered all relevant matters, to conclude that the breach was not sufficiently serious to warrant termination. The true significance of a refusal to occupy the premises could only be properly evaluated in the context of the unusual features of the lease.