Christina Mary Steel & Ors v Sea Winds Village Pty Ltd

Facts and statutory context

1. As a consequence of individual site agreements each of the appellants have rights of occupancy (and obligations) in respect of specified sites at the residential park upon which relocatable homes or movable dwellings owned by the appellants are located. Those rights are also regulated by the Act and by regulations, currently the Residential Parks Regulation 2006.
2. The dispute about the rent increase did not proceed on the basis that it was necessary to examine each of the individual site agreements. The Tribunal below found, and it was not disputed on appeal, that separate written site agreements were signed by each of the appellants with the park owner following the standard form as provided for under Schedule 1 of the Residential Parks Regulation 1999: at [26].
3. According to the written site agreements such standard form was that applicable: "(where the tenancy is for a term of 3 years or less)": see title on first page of the agreement with Ms Steel.
4. Relevantly, this standard form site agreement included the typewritten provisions pertinent to the current dispute set out in the Appendix to these reasons (this does not include all of the written terms). The most important provisions concerning the current dispute were: TERM: The term of this agreement is ................ , beginning on ...... / ....... / ........ and ending on .... ../ ...... ./. ....... CONTINUATION: At the end of the term the resident can stay on the residential site at the same rent (or at an increased rent if the rent is increased in accordance with the Residential Parks Act 1998) and otherwise under the same terms unless or until the agreement is ended in accordance with the Residential Parks Act 1998.
5. Under the standard form, in the absence of agreement upon an additional term, the rent may be increased during the "Continuation" stage as regulated by the Act so that increases can occur by notice in writing, which operates to vary the site agreement, subject to control by the Tribunal concerning excessive increases: s 53, s 55 and s 58 of the Act.
6. In accordance with s 53(6) of the Act no such right exists during the fixed term stage of the tenancy. During that stage, rent increases are prohibited unless there is specific agreement in the site agreement as to the amount of the increase or the method of its calculation.
7. Unsurprisingly, on the limited evidence presented, there are differences in approach to dealing with the fixed term section of the standard form. In the case of Ms Steel, a fixed period of 4 months was specified commencing on 8 March 2002. In the case of Ms Black and Ms Wilson, the word "Continuation" has been handwritten after the words "The term of this agreement is…" in the section concerning "TERM" and a date has been specified for commencement but not for the ending.
8. We do not, however, know the precise extent to which short or no fixed periods were agreed with the appellants.
9. Had there been no provision in the agreements for continuation, the residential site agreement would have continued, nevertheless, because s 14(1) of the Act provides that it does. That section also provides that it continues on the same terms as last applying before the day on which the fixed term ends and also that it continues on the basis that the resident is holding over under a periodic tenancy. In such a situation, the park owner or the resident may apply to the Tribunal to modify these same terms: s 14(3). Hence, where an agreement is made for a fixed term with no provision for continuation and the agreement contains a rent review clause providing for CPI increases that clause would continue to apply during the continuing period subject to any application for modification: Strathmore & Anor v Kathryn Emerson t/as The Rocks Village [2014] NSWCATAD 104, a case referred to by the Tribunal below at [27]-[28].
10. However, s 14(3) does not apply to the residential site agreements in issue in this case.
11. It is common ground that 61 appellants have an additional term specified as clause 10 contained within their written agreement providing for annual rent reviews on 1 July: "10 Rent Review 10.1 The rent payable by the resident to the park owner during the initial term of this agreement and any further term shall be reviewed on each anniversary of the 1st July (the Review Date) and increased in accordance with the Consumer Price Index in the manner set out in clause 10.2. 10.2 Consumer Price Index 10.2.1 The rent from and including each Review Date shall be increased by the proportion that the increase (if any) in the Index Number at the 31st March (of the year in which the rent is being reviewed) bears to the Index Number at the 31st March (of the year immediately preceding the year in which the rent is being reviewed) or in respect of the first review at the Commencement date of the term. 10.2.2 In this agreement the words "Index Number" shall mean "The Consumer Price Index (All Groups) Sydney" published from time to time by the Australian Statistician. In the event that the Australian Statistician shall update the reference base of such Index Number due conversion shall be made to preserve the intended continuity of calculation by using the appropriate factor determined by the said Statistician. 10.2.3 In the event of the discontinuance or suspension of the Consumer Price Index then the method of adjustment of rental hereunder in relation to the Index Number as defined and thereafter the basis of any increase in lieu of the said Index Number shall be as decided by the President for the time being of the Australian Institute of Valuers and Land Economists, New South Wales Division or his nominee who shall be acting as an expert and not an arbitrator whose decision as to such basis shall be binding on the parties hereto. 10.3 Notwithstanding anything hereinbefore contained in this subclause 10, no review as herein provided for shall thereafter reduce the rent from that payable by the resident to the park owner at the Review Date.
12. In Ms Steel's case Clause 10 is contained on one typewritten page, initialled by the parties. That page also includes a clause 11 concerning goods and services tax. Why these clauses should be specified as clauses 10 and 11 is unclear given that the standard form already includes clauses so numbered dealing with different subjects.
13. The appellants argue that in the case of the other 26 appellants, clause 10 was an implied or oral term: paragraphs 8.1 and 8.2 of the appellants' written submissions dated 16 April 2015. Various facts are advanced in support of such submissions concerning dealings with the park owner. No findings of fact were made by the Tribunal below concerning such dealings. Indeed, the Tribunal below seems to have proceeded on the basis that all the site agreements contained the clause 10 rent review clause: at [26].
14. We are not in any position to determine the facts and the consequent argument concerning the applicability of the clause 10 rent review provision concerning these 26 appellants. If any dispute remains with respect to these appellants following this decision it will have to be determined by the Tribunal below.

The decision of the Tribunal below

1. Following written notification by the park owner of proposed rent increases, the appellants lodged an application with the Tribunal seeking orders that the proposed increases were excessive. As appears from the reasons for decision of the Tribunal below, at the listing of the matter for conciliation and hearing on 5 December 2014 the Tribunal was requested to interpret the clause 10 rent review provision as a preliminary matter. The Tribunal proceeded to do so and, apparently, gave its interpretation orally that day. In the light of that determination the hearing was adjourned and completed on 23 January 2015 following which the Tribunal conduct a view of the residential park.
2. The reasons for decision of the Tribunal below, provided on 6 February 2015, deal with the issue concerning the construction of the clause 10 rent review provision (at [25]-[30]) and also the issue whether the rent increases were excessive. No issue has been raised as to the procedural or jurisdictional aspects of the Tribunal proceeding as it did to determine the construction of the rent review clause.
3. The Tribunal below was of the view that the clause 10 rent review provision was only intended to apply to fixed terms and as such intended to satisfy the requirements of s 53(6) of the Act. It reasoned that the clause made no reference to the continuing period and that the reference in the clause to "any further term" did not apply to the continuation stage of the agreements because such stage did not have a beginning or end date: at [30].

Construction of clause 10

1. On the appeal the respondent sought to uphold the construction of clause 10 adopted by the Tribunal below. It supported that construction by submissions including that: 1. the meaning of "term" where used in clause 10 is dictated by the fact that the core provision concerning the "Term" of the agreement, on the second page of the standard form, is a fixed term, 2. the construction of the Tribunal below is supported by the Oxford dictionary definition of "term" which includes: "a fixed or limited period", 3. it was illogical or made no sense that the park operator would deliberately identify an "initial" term in a rent review clause only to want to implement the same method of determining a rent increase once the site agreement was in the continuation stage, all the more so since the park operator cannot predict when the tenancy will end, 4. the purpose of the rent review clause in the context of the site agreements was to allow the rent to be increased during the fixed period as necessitated by s 53(b) of the Act, and the continuation clause thereafter permitted the rent to be increased as provided for in s 53 (1) to (5) of the Act, 5. the fact that some agreements do not specify any fixed term and are "continuation" from the start is not significant. It just means that clause 10 has no application to such agreements, 6. the fact that there are a number of residential site agreements with short fixed terms is also not significant because clause 10 does not mean that the park owner has to increase the rent during the fixed period.
2. We do not agree with the construction of clause 10 adopted by the Tribunal below and the various submissions advanced by the respondent in support of it.
3. In our opinion the intention of clause 10 is that it should regulate rent increases throughout the duration of the agreement including any continuation stage. In our opinion, the use of the expression "initial term" and "any further term" is sufficiently apt to cover the distinction between the fixed term and the continuation stages of the agreements, especially in the context where the agreements expressly deal with these two stages and do not make any reference any further fixed term.
4. It seems to us that if it was intended that the rent review clause only applied to a further fixed term then that would have been expressly stated.
5. If the intention was solely to satisfy the requirement in s 53(6), in which the phrase fixed term is specifically used, one would have expected that phrase to be used in the rent review clause. There would also have been no need in such a clause to deal with both an initial term and any further term since it would have been sufficient to use in clause 10 language similar to that in s 53(6) so that it provided that "during the currency of any fixed term" the rent shall be reviewed and increased.
6. There is no inconsistency between the operation of clause 10 during the continuation phase and the references to an increased rent in the section concerning "CONTINUATION". So construed the two provisions operate in harmony and in the manner contemplated by s 53 of the Act so that no increase in accordance with clause 10 may occur unless the notice provisions in s 53(1) and (2) are complied with.
7. It does not seem to us that the construction we favour is illogical. The reference to initial term in clause 10 in the context of the structure of the site agreements makes it sufficiently clear that in a case where a fixed term is specified rent increases can occur during such period given the terms of s 53(6).
8. Nor does it seem to us that such construction lacks commercial sense, such that it cannot have been intended, having regard to the fact that the duration of the site agreements is unpredictable and may continue for a long time. In the context of sites in a residential park which provides inexpensive housing such a provision is understandable and also has the advantage of providing rental predictability.
9. No satisfactory argument has been advanced by the respondent in relation to the two situations referred to above - one where the site agreement is only ever a "continuation" agreement and the other where a short fixed period is specified. As to the latter, in the case of Ms Steel's site agreement, the fixed period specified starts and ends before 1 July. Hence, on the construction advanced by the respondent, clause 10 is completely otiose, as it is in the case of the "continuation" tenancies. Clearly, a construction should be avoided that renders clause 10 otiose.
10. The construction that we favour does not involve adopting an unknown, unusual or strained meaning of term as it is used in clause 10. The further term is an indefinite one dependent upon termination in accordance with the Act. That includes the right of the resident (but not the park owner) during the continuation period to terminate by notice of termination specifying a date no earlier than 30 days after the date on which notice was given. Other rights to terminate are specified. We have already referred to the Act's treatment of the continuing relationship (where not provided for in the agreement) as a periodic tenancy: s 14(1)(b). The right of the resident to terminate by notice is consistent with such a relationship.
11. By analogy with the approach to periodic tenancies: "… the "term" of the tenant continues indefinitely until it is properly determined." per Ormiston J in Klewett Pty Ltd v Lawson [1989] VR 969 at 979.4 , and also: "A periodic tenancy can properly be described as a tenancy for a "term", in the sense that it is a tenancy for the first term, extended for a longer term, and yet a longer term, and so on, until determined by the appropriate notice." Butt, Land Law 10th ed ( at 15 36.1).
12. As with a periodic tenancy, the situation here is one where there is a "letting for a period determinable by notice to quit" per Latham CJ in Amad v Grant [1947] 74 CLR 327 at 336.
13. Here, term takes on the meaning of the duration of relationship with the park owner in respect of the residential site. In this respect, we note that amongst the definitions in the Macquarie Dictionary the following are pertinent: "3 the time or period through which something lasts … and 12b the duration of an estate …".
14. We were referred to a number of authorities but none dealt with the construction issue with which we are specifically concerned.

Timing of a CPI rent review increase

1. There remains to be dealt with an issue raised by four appellants concerning the timing of a CPI rent increase. This issue was not dealt with by the Tribunal below. No doubt this was because it found that clause 10 was no longer applicable given that the site agreements were in their continuation stage.
2. These appellants point to the consensual resolution of a dispute with the park owner in 2010 in which proceedings in the Tribunal were commenced. The dispute was about the size of a CPI increase. The resolution resulted in the park owner amending the rent increase to reflect the correct CPI amount effective from 4 December 2010 and the consequent withdrawal by the residents of their application to the Tribunal. These appellants also point to the written statement by the park owner in correspondence in this context that the next rent increase will not fall due until 4 December 2011. They point out that since 2010 their yearly CPI increases have commenced on 4 or 5 December.
3. These appellants argue that clause 10 allows for a rent review and increase once yearly and that the notified increase in October 2014 "would be outside the yearly time frame of clause 10."
4. The short answer to this argument is that it is contrary to the language of clause 10. That clause does not say that increases may occur yearly from the date of the last increase". The clause permits an increase each July regardless of the date when the last increase first commenced. Of course, there still has to be compliance with the notice requirements of s 53 of the Act and, accordingly, yearly increases will post date 1 July in each year.
5. To the extent that these appellants contend for some other legally enforceable agreement or estoppel binding upon the park owner about the timing of future increases the facts relied upon and which we have summarised above are insufficient to establish such a result.

Orders

1. For the above reasons, we order that: 1. The appeal be allowed. 2. The decision of the Tribunal below be set aside. 3. Remit the proceedings to the Tribunal below for the making of final orders in accordance with the construction of the rent review clause as found on appeal and for the determination of any remaining dispute concerning the rent increases notified in October 2014 the subject of these proceedings.

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APPENDIX Residential Parks Regulation 1999 Standard form residential site agreement (where tenancy is for a term of Schedule 1 3 years or less) (Clause 7 (1 ) (a)) Schedule 1 Standard form residential site Agreement (where tenancy is for a term of 3 years or less) This agreement is in 2 parts: Part l - Sets out the terms of the agreement. Part 2 - Contains the condition report for the residential site. IMPORTANT NOTES ABOUT THIS AGREEMENT

1. The resident is entitled to have time to read this agreement (and the completed condition report referred to in this agreement) and to obtain appropriate advice if necessary.
2. The park owner or the park manager is required to give the resident a copy of "Residential Park Living". That book explains the resident's rights and obligations under this agreement.
3. The park owner is required to give the resident a copy of this agreement for the resident to keep.
4. The park owner is also required to provide the resident with a copy of the park rules and with a copy of other important information about this agreement (in the form of questions and answers) at or before the time that this agreement is entered into. Those park rules, and those questions and answers, must also be attached to this agreement when it is entered into. Part 1 Terms of agreement THIS AGREEMENT is made on ...... / ...... / ....... at ............................. NSW BETWEEN PARK OWNER: (Name/s) ............................................................................... (ACN) ................ (Address) .................................................................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (Name of park manager) ......................................................... (ACN) ................ (Address) ........................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Emergency contact No for park manager ............................................................. AND RESIDENT: (Name/s) ......................................................................................................... Other people who will ordinarily live at the residential site may be listed here (cross out if not needed) .............................................................................................. RESIDENTIAL SITE: The park owner gives the resident the right to occupy site No ............. at ............ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . and the following parking space and storeroom (cross out if not needed) ............. ...................................................................................................................... Size of site (dimensions or square metres) ........................................................... No more than ......... persons may ordinarily live at the residential site at any one time. RENT: The rent is $ .................... payable every .................... starting on ...... / ...... / ...... The resident must pay in advance on the ...................... of every ..................... The rent must be paid: (a) to the park owner, or the park manager, at .............................................. ............................................................................................................. ………................................................................................................... , or (b) at any other reasonable place the park owner names in writing, or (c) into the following account ...................................................................... , or any other account nominated by the park owner. Payment must be made by the following method (eg in cash, by cheque by bank account deposit or by any other method agreed to and .set out here) ................................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TERM: The term of this agreement is ................ , beginning on ...... / ....... / ........ and ending on .... ../ ...... ./. ....... CONTINUATION: At the end of the term the resident can stay on the residential site at the same rent (or at an increased rent if the rent is increased in accordance with the Residential Parks Act 1998) and otherwise under the same terms unless or until the agreement is ended in accordance with the Residential Parks Act 1998. RENTAL BOND (cross out if there is not going to be a bond) A rental bond of $ ................. must be paid by the resident to the park owner, or the park manager, on or before signing this agreement. THE AGREEMENT
5. The park owner agrees to give the resident: 1.1 a copy of this agreement (for the resident to keep) at or before the time that another copy of the agreement is signed and given by the resident to the park owner or the park manager, and 1.2 a copy of this agreement that has been signed by both the park owner and the resident, as soon as reasonably practicable after signing. RENT
6. The resident agrees to pay rent on time.
7. The park owner agrees to provide a receipt for any rent paid to the park owner or to ensure that the park manager provides a receipt for any rent paid to the park manager. If the rent is not paid in person, the park owner agrees only to make the receipt available for collection by the resident or to post it to the resident. (The park owner is not required to provide or make available a receipt if rent is paid into the park owner's account or if the owner is otherwise exempt from that obligation.) … NOTE: The following matter must be on a separate page ADDITIONAL TERMS ANY ADDITIONAL TERMS ARE NOT REQUIRED BY LAW AND ARE NEGOTIABLE. Additional terms may be included in this agreement if: (a) both the park owner and the residential agree to the terms, and (b) they do not conflict with the Residential Parks Act 1998 or any other Act, and (c) they do not conflict with the standard terms of this agreement. Park owner's signature ...................................................................................... Resident's signature.. ......................................................................................... (Sign this page even if there are no additional terms on it.) NOTES Definitions
8. In this agreement: park manager means a person appointed by the park owner of a residential park, with responsibility for the day to day management of the residential park, including the letting of residential premises. park owner means the person who grants the right to occupy a residential site under this agreement, and includes the person's heirs, executors, administrators and assigns. regulations means regulations under the Residential Parks Act 1998. rental bond means money paid by the resident as security to carry out this agreement. resident means the person who has the right to occupy a residential site under this agreement, and includes the person's heirs, executors, administrators and assigns. residential park means a caravan park or manufactured home estate. residential site means a site within a residential park that is used, or is intended to be used, for the installation of a moveable dwelling. tenancy means the right to occupy a residential site under this agreement. Termination of an agreement by the resident
9. This agreement can be terminated by the resident if the resident gives at least 30 days' written notice to the park owner. The notice cannot be given before the expiry of any fixed term period of this agreement. Termination of an agreement by the park owner
10. (1) This agreement can be terminated by the park owner but only in limited circumstances. (2) A notice of termination may only be given to a resident who rents a residential site for the following reasons: (a) if the resident is more than 14 days in arrears of rent (in which case the resident must be given at least 14 days to vacate the site), (b) if the resident seriously or persistently breaches any term of the tenancy agreement (in which case the resident must be given at least 14 days to vacate the site), (c) if the moveable dwelling is considered by the park owner to be in a seriously dilapidated condition (in which case the resident must first be given a warning notice to fix up the moveable dwelling within 90 days, and a second 30 days' notice if they do not comply with the first warning. If the moveable dwelling is still dilapidated, a termination notice with at least 60 days' notice may be given), (d) if the site is to be used, whether by the park owner or some other person, for a purpose other than as a residential site (in which case a minimum 180 days' termination notice must be given, or 12 months' for Crown reserves). A resident cannot be requested to move out for this reason before the end of any remaining fixed term period of this agreement, (e) if the park owner needs vacant possession of the site to comply with a requirement (eg by a local council) to carry out repairs or upgrading to the site (in which case the resident must be given at least 90 days' termination notice). A resident cannot be requested to move out for this reason before the end of any remaining fixed term period of this agreement. (3) A park owner may request that a resident relocate to another site within the residential park or some other residential park operated by the park owner close by, or the parties may agree to relocate. At least 90 days' notice must be given if a resident is requested to relocate, but it cannot be given before the end of any remaining fixed term period of this agreement. The resident relocates under the same terms and conditions (eg rent) that applied to the previous residential site. … Rent increases
11. (1) The park owner cannot increase the rent during the fixed term unless the agreement sets out the amount of the increase or the method of calculating the amount of the rent increase. (2) The resident must get 60 days' notice in writing if the park owner wants to increase the rent. This applies even when the agreement provides for, or permits, a rent increase. Where a notice of an increase has been given and the park owner and resident subsequently agree to a lesser increase than in the notice, the park owner does not need to give a further 60 days' notice. (3) The resident can apply to the Residential Tribunal within 30 days of getting the notice of the rent increase for an order that the rent increase is excessive. (4) If the park owner has reduced or withdrawn any goods, services or facilities, the resident can at any time apply to the Residential Tribunal for an order that the rent is excessive. THE PARK OWNER AND RESIDENT ENTER INTO THIS AGREEMENT (INCLUDING THE CONDITION REPORT) AND AGREE TO ALL ITS TERMS. SIGNED BY THE PARK OWNER in the presence of ..................................... (Name of witness) ................................................................ (Signature of park owner) .............................................................. (Signature of witness) ACKNOWLEDMENT BY RESIDENT The resident acknowledges that, at or before the time of signing this residential tenancy agreement, the resident was given a copy of each of the following documents: Initial each box if you have received the document. A statement of the costs of preparation of this residential tenancy agreement and of any other charges payable by the resident in respect of the agreement. The book entitled "Residential Park Living". A list of questions and answers about living in the residential park (which are also attached to this agreement). The park rules for the residential park (which are also attached to this agreement). SIGNED BY THE RESIDENT in the presence of ............................................ (Name of witness) .................................................. (Signature of resident) ...................................................... (Signature of witness) 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: 12 August 2015