Edmonds v Paultrus Pty Ltd

NCAT Consumer and Commercial|2016-07-26

reasons for decision

The applicant seeks an order under s 157(1)(b) of the Residential (Land Lease) Communities Act 2013 ('RC Act'), that the site increase in the notice dated 15 April 2016 is not payable on the basis that the notice does not comply with the requirements of s 67(4), because it did not contain an explanation for the increase, and because, she alleges, the explanation later provided was not genuine, and was misleading and deceptive. In addition the applicant argues that the letter of explanation cannot validate the notice of site increase which was found by the Tribunal on 11 May 2016 not to contain an explanation for the increase as required by s 67(4)(c).
The respondent argues that the application is misconceived as the Tribunal has determined the matter. The respondent says that the Tribunal did not declare the notice to be invalid, but ordered the respondent to provide an explanation for the increase. The respondent says that it has complied with that order. The applicant is estopped from having the Tribunal redetermine the issue. The respondent says that it will suffer particular disadvantage if the Tribunal is now to make the order sought by the applicant. If that order had been sought on 11 May 2016 and granted by the Tribunal, the respondent could have served a fresh notice then. If the order is made now, the respondent has lost a period of 2 1/2 months in increased site fees. In response the applicant says that her application is in response to the respondent's letter which did not cure the defect in the notice. Accordingly she is entitled to seek an order that the increase is not payable.

Res Judicata and/or issue estoppel

The principles of res judicata and issue estoppel have recently been explored by the Appeal Panel in Pearson v Clark [2016] NSWCATAP 134. The relevant passages , which explain the two doctrines, are set out 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."
In the current matter the issue which was argued and determined in the proceedings before Member Charles on 11 May 2016 is the same as that which the applicants now seek to raise. However, the cause of action is not the same, because in the current matter the applicants are arguing that the respondent's action in providing the explanation in a letter which postdates the notice cannot cure the defect which was found by the Tribunal in the earlier proceedings. The cause of action arises from the respondent's letter dated 26 May 2016, and not the notice itself dated 15 April 2016.
The Tribunal is satisfied that there is no res judicata or issue estoppel precluding the applicant from bringing these proceedings.
The effect of Division 3 of the Residential (Land Lease) Communities Act 2013 RC Act
Section 65 provides as follows: 65 How site fees may be increased (1) Site fees payable under a site agreement can be increased only if the increase is made in accordance with this Division.

Where the increase is by notice, ss 67 and 68 apply: 67 Increase of site fees by notice (1) This section applies to a site agreement that provides for the increase of the site fees by notice (otherwise than by a fixed method). (2) An increase in the site fees is not payable unless the fees are increased in accordance with this section. (3) The site fees must not be increased except by notice in writing given to all the home owners in the same community at the same time under site agreements to which this section applies. (4) The notice must: (a) specify the amount of the increased site fees, and (b) specify the day (the "effective day") on and from which the increased site fees are payable, and (c) include an explanation for the increase, and (d) include such other information as may be prescribed by the regulations, and (e) be in the approved form (if any). (5) The day specified as the effective day must not be earlier than 60 days after the day on which the notice was given. (6) Site fees must not be increased more than once in any 12-month period under this section. This is calculated by reference to the day from which the increased site fees are payable. (7) Increases under this section in site fees payable by home owners in the same community under site agreements to which this section applies must take effect on the same day (and not on different days). (8) A notice under this section may be cancelled. (9) A later notice may provide for a lesser increase than that specified in an earlier notice under this section. A later notice has effect instead of the earlier notice and takes effect from the date on which the earlier notice was to take effect. (10) If the site fees payable under a site agreement are increased under this section, the terms of the agreement are varied accordingly. (11) If a person becomes a home owner after a notice has been given under this section to other home owners in the community but before the date the increase takes effect: (a) the operator must notify the home owner of the notice and its contents and effect, and (b) the increase applies as if the notice had been given to the home owner at the same time as it was given to other home owners. 68 Refund of overpaid site fees if increase not compliant (1) A home owner under a site agreement may apply to the Tribunal for an order directing the refund of overpaid site fees on the ground that the increase of site fees did not comply with a requirement of this Division. (2) The Tribunal may make any of the following orders: (a) an order directing a refund to the home owner, (b) an order directing a refund to any other home owner in the community who the Tribunal becomes aware also had a non-compliant increase of substantially the same kind, (c) any ancillary order that the Tribunal, in the circumstances, thinks appropriate. (3) An application under this section must be lodged no later than 12 months after notice of the increase was given to the home owner.

There is no power in the Act for the Tribunal to waive a defective notice under s 67. The notice MUST include the information specified in s 67(4). There is no provision which allows some of the information to be supplied in the notice, and other information to be supplied later.
It follows that the respondent could not comply with the order dated 11 May 2016 except by reissuing the notice, and including the information required by s 67. This is implicit in the reasons given in the final paragraph of those orders.

The explanation provided

The applicant also complains that the explanation for the increase is misleading and not genuine. She argues that because the same explanation was used in different parks about different increases, it cannot be true. The Tribunal does not accept this submission. There is no evidence that the respondent's statement of increased costs in the areas nominated is false. Whilst the effect of such increases may vary across different parks, the fact of such increases may well be common. In order to prove the applicant's allegation, the applicant would need evidence that the listed costs had not increased as the respondent alleges. There is no such evidence before the Tribunal.
The Act does not require that the explanation be in any particular form, or provide any minimum amount of detail. It must simply be an explanation. The Tribunal is satisfied that the explanation is sufficient. However it must be contained within the notice as discussed above.
The Tribunal orders accordingly. K Ross General Member Civil and Administrative Tribunal of New South Wales 28 July 2016 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: 06 September 2016

At a glance

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Judgment (5 paragraphs)

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Cases Cited (2)

Cited By (1)