Estate of Bovaird v Milstern Retirement Services Pty Ltd [2022] NSWCATAP 75 | Case summary

NCAT Appeal Panel|2021-10-14

JA Ringrose (General Member) File Number(s): RV 20/18490 RV 20/54009

Background

These appeals arise out of two decisions made in the Consumer & Commercial Division of the Tribunal when the Tribunal was exercising its jurisdiction under the Retirement Villages Act 1999 (NSW) (the RV Act). The first decision was published on 21 January 2021 when an order was made dismissing the Appellant's application (to which we will refer for convenience as the Dismissal Decision). The second decision was published on 16 April 2021 when the Tribunal made orders concerning the distribution of monies held as a consequence of the sale of Unit 41 in the Lindfield Manor Retirement Village (for convenience we will refer to that decision as the Primary Decision).
The background facts leading to the proceedings before the Tribunal are not disputed (although some of the consequences of the facts are subject to differing submissions) and we will refer to those facts in the following paragraphs.
On 26 July 2002 Mrs Bovaird (now deceased), Maxwell Walter Frost (Mr Frost, also now deceased) and Margaret Esther Frost (Mrs Frost, also now deceased) entered into a retirement village contract (the contract) for a retirement village unit with the first respondent Milstern Retirement Services Pty Ltd (Milstern) as the operator of the village. They also entered into a 99 year lease with Milstern Retirement Living Pty Ltd as the lessor (the Lease).
On 3 August 2002 Mrs Bovaird moved into the unit. Neither Mr nor Mrs Frost moved in.
On 26 November 2002, Mr Frost died.
On 29 May 2005 Mrs Bovaird, then aged approximately 85, suffered a fall and was admitted to hospital. On 24 September 2005, Mrs Bovaird's son, Leon visited the retirement village and hand-delivered a letter to the operator indicating that Mrs Bovaird was not likely to return. A few months later, on 18 November 2005, a document was executed by which the interest in the lease then held by Mrs Bovaird and Mrs Frost as joint tenants was severed and converted to a tenancy in common in equal shares.
There was litigation in the Supreme Court between the Bovairds and the Frosts which appears to have commenced in 2004. A judgment of his Honour Justice Brereton was published on 30 April 2009. Mr Leon Bovaird is the Executor of the Estate of the Late Mrs Bovaird. Mr Robert Frost is the Executor of the Estate of Mrs Frost.
On 29 November 2011 Mrs Bovaird died (having not occupied the unit since May 2005) and on 13 January 2014 Mrs Frost died (having never occupied the unit).
In 2015 the unit was sold and Milstern issued an exit statement on 12 August 2015 detailing the exit fee payable to it on settlement of the sale of the unit. That amount was stated to be $234,650.29.
From August 2015, the Appellant and the two Respondents were in negotiation as to the entitlement of each to the proceeds of the sale.
On 2 April 2020 Milstern filed an application in the Tribunal. That application (which we will refer to as Milstern application) sought an order as to the amount owing to Milstern on settlement of the sale of the unit in accordance with s 128(e) of the RV Act. The Second Respondent (the Frost estate) also sought an order that the amount to be paid to Milstern be determined by the Tribunal and that the balance be split between the Appellant (the Bovaird estate) and the Frost estate in equal shares.
On 30 November 2020 Leon Bovaird (on behalf of the Bovaird estate) wrote to Milstern indicating that he had formed the opinion that the exit statement issued by Milstern concerning the monies to be split between the three parties had not been calculated in accordance with the RV Act or the contracts between the parties. In December 2020 an application was lodged by Leon Bovaird on behalf of the Bovaird estate (the Bovaird application) which sought an order under s 180(5)(a) of the RV Act directing Milstern to recalculate certain amounts in accordance with the RV Act and pay any additional amount to him as executor of the Bovaird estate. He disputed the calculation of the departure fee, recurrent charges, reinstatement costs and in so doing relied upon various provisions of s 180 of the RV Act. He also claimed an order for the payment of interest.
On 21 January 2021 both of the above applications were heard together. The Bovaird application was dismissed on the day of hearing with brief recorded reasons to this effect: the Tribunal has no jurisdiction to determine the application. The applicant seeks to challenge payments from 2003 and sought to adjust entitlements following the sale of the premises in 2015. The extent of the delay has not been explained and the Tribunal has not seen fit to extend time to bring the application by more than five years. The distribution of the balance of the proceeds of sale is to be dealt with in the related proceedings between the same parties (Dismissal Decision).
The Tribunal's decision in the Milstern application was reserved following the hearing on 21 January and the decision was published on 16 April 2021 (namely the Primary Decision).
On 23 February 2021 Leon Bovaird lodged a Notice of Appeal with respect to the Dismissal Decision. On 30 April 2021 Mr Bovaird lodged an appeal with respect to the Primary Decision. Orders were subsequently made for both appeals to be heard together.

The Primary Decision

In the paragraphs that follow we summarise the Primary Decision which also amplifies on the reasons for the Dismissal Decision.
The relevant parts of the Primary Decision (ignoring the facts already recorded above) may be summarised as follows: 1. The unit was sold in April 2015 for a price of $240,000 [10(12)]. In August 2015 the parties agreed that $74585.50 was to be paid to Milstern and that the remaining amount of $159946.79 was to be held in trust by Milstern's solicitors pending resolution of the dispute [10(13)]. 2. The Frost estate did not file any material objecting to the orders sought by Milstern but claimed 50% of the money to be finally distributed on the basis that Mrs Frost was a tenant in common of the unit [23]. The Bovaird estate filed submissions which were described as generally addressing the Bovaird application (which had been dismissed) and which was described as an application seeking recalculation of contributions made between 2002 and 2006 [24]. 3. The Tribunal recorded that all the monies that had been paid to Milstern were paid by the estate of the late Mr Frost and nothing had been paid by Mrs Bovaird or Mrs Frost [26]. We were informed at the hearing of the appeal that Mr & Mrs Frost were estranged and that Mr Frost was the brother of Mrs Bovaird. 4. The Milstern application relied upon an affidavit of Koreen Partridge, a solicitor acting for Milstern [32]. Initially Milstern claimed $235,870.29 from the two estates. This was calculated on the basis of commission earned by Milstern on the sale of the unit as agreed, together with a departure fee of $60,000 and a claim for recurrent charges of $167,940.29 for the period from 1 August 2005 to 1 August 2015 [34]. 5. Thereafter, a number of settlement offers were made by Milstern. The first was on 15 June 2017, the second on 6 April 2018 and a further one occurred on 5 November 2019. Finally, Ms Partridge's affidavit contained another offer by which the commission remained the same ($7,920), the departure fee was reduced from $60,000 to $18,986.40 and the recurrent charges were reduced by applying a 25% discount said to be in accordance with clause 20.4 of the Lease. 6. The Primary Decision records the competing submissions of the parties concerning the calculation of the amounts claimed by each of the parties. The dispute largely concerned the calculation of recurrent charges. The decision records that the commission and the departure fee were not in dispute. That has been confirmed at the hearing of this appeal. 7. The Tribunal found that the parties had entered into a retirement village contract and a 99-year lease on 26 July 2002. As stated earlier, Mrs Bovaird resided in the unit from August 2002 until she left due to her fall. She died in 2011 and Mrs Frost died on 13 January 2014. The unit was put up for sale on 26 March 2015 [57]. The unit was sold for $240,000 [58]. 8. Mr Bovaird submitted that the recurrent charges should not have accrued from the time shortly after the time Mrs Bovaird permanently left the unit. He submitted that when his communication was made surrendering possession of the unit in September 2005, Mrs Frost had concurred with that surrender. At [85] the Tribunal found that there was no evidence to support that proposition and that the operator was required to provide Mrs Frost with an opportunity to reside in the unit until she either surrendered the property herself or died [85]. 9. The Tribunal found that the definition of "former occupant" contained in s 4 of the RV Act includes a resident or former resident who continues to have rights or liabilities under a village contract [87]. The Tribunal found that the definition of permanently vacating premises is limited to circumstances where a registered interest holder dies or moves out of the premises. Clause 19 of the contract had given Mrs Frost a resident's right pursuant to the RV Act and that right remained after Mrs Bovaird vacated the premises and after she died [87]. Further, the Tribunal found that both Mrs Bovaird and Mrs Frost were entitled to quiet enjoyment of the unit during the term of the lease until the unit was permanently vacated in accordance with s 4(c) of the RV Act which did not occur until 13 January 2014 when Mrs Frost died [88]. 10. The Tribunal recorded that it was satisfied that the calculation of the recurrent charges should be from 1 August 2005 to 1 July 2015 with a 25% discount in accordance with clause 20.4 and with no allowance for services [91]. It follows that the recurrent charges were allowed in the sum of $79,001.25, meaning that Milstern was entitled to the sum of $105,907.66 [92]. By arrangement between the parties' legal representatives Milstern had already been paid $74,685.50 as well as a sum of $1,200 and that the total balance payable by the two estates to Milstern is the sum of $30,022.16 (payable out of the balance of the exit fee held by the legal representatives on trust). The remaining balance was ordered to be distributed between the two estates in equal shares.

Retirement Village Contract and Lease

Before we deal with the issues raised in the appeal it is of assistance to set out the relevant parts of the contract and of the Lease. Those terms are set out in the following paragraphs.
The cover page of the contract describes the "Resident/Lessee" as Mr & Mrs Frost and Mrs Bovaird (it includes their full names). All three signed that page as "Resident".
Clause 2 provides that the RV Contract is subject to the provisions of the RV Act and the Retirement Villages Regulation.
Clause 4 deals with recurrent charges and clause 4(e) provides that the resident is liable to continue to pay recurrent charges "after permanently vacating the residential premises" until the first to occur of five dates or events identified in subclauses (i) to (v). The first of these is the date on which the operator (Milstern) enters into a contract with an incoming resident. The second is the date on which a person takes up residence in the residential premises with the consent of Milstern. The third and fourth are not applicable to this appeal. The fifth is the date six months after the date on which the resident otherwise delivered up vacant possession of the residential premises to the operator.
Clause 13 provides that the contract terminates in certain circumstances. One circumstance is the date on which the resident delivers up vacant possession "being a date that is (except as otherwise provided under this Clause) at least one month after the date on which the resident gives the village operator written notice of intention to vacate the premises". A further date is the date of the death of the last surviving resident under the contract. Clause 13(b) provides that termination of a resident's contract does not affect any other right or obligation of the parties under a village contract.
Clause 17 provides that any capital gain or increase in "ingoing contribution paid by the incoming resident" is to be solely to the account of the resident.
Clause 19 provides that the provisions of the Lease are incorporated into the contract and that "in consequence this contract gives rise to the resident's right to occupy the residential premises pursuant to the Act".
The provisions of the Lease relevant to this appeal are summarised in the following paragraphs.
The cover page of the Lease provides that the lease is for 99 years from 26 July 2002 and identifies the Lessee as Mr & Mrs Frost and Mrs Bovaird. Their signatures appear on the Lease.
Clause B of the Special Conditions provides that the provisions in the Lease incorporate the Residents Contract, that is the contract earlier referred to.
Clause 1.1.15 provides that the term Lessee includes executors, administrators and assigns.
Clause 1.1.26 defines a "resident" as a "Qualified Person" and "any person living with him in the same Residence". Clause 1.1.22 defines "Qualified Person". Essentially that means a person who has attained the age of 55 years or the spouse or de facto partner of any deceased Qualified Person who reside in the residence at the date of death of the qualified person, and has provided the manager with a medical certificate prior to taking up occupation to the effect that the resident is/will be able, to live independently in the residence. It is not in dispute that Mrs Frost did not at any time reside in the unit and nor did she provide the requisite medical certificate.
Clause 6.2 contains provision for the Lessees to have quiet enjoyment of the premises and 6.5 provides that the Lessor shall lease residences within the village "only to Qualified Persons or corporations or natural persons (not being Qualified Persons) that grant a life sub-tenancy to a Qualified Person".
Clause 20.2 makes provision for the Lessees to pay operating expenses. Clause 20.2.2 requires the manager to forward to the lessee each year a statement of actual operating expenses.

The Retirement Villages Act 1999

Provisions of the RV Act relevant to this appeal are set out in the following paragraphs.
Section 4 contains a definition of "former occupant" and is in the following terms: "former occupant" of a retirement village means a resident, or a former resident, of the village-- (a) who has permanently vacated any residential premises in the village, and (b) whose residence contract has been terminated (unless the resident is a registered interest holder (other than a person referred to in section 7 (1)(c)) in respect of the residential premises concerned), and (c) who continues to have rights or liabilities under a village contract relating to the village, and includes, except in Part 10AA, the executor or administrator of the estate of such a person.
Section 4 also contains a definition of "residence contract" as follows: "residence contract" means a contract that gives rise to a residence right.
Section 4 contains a definition of "residence right" as follows: "residence right" of a person means the person's right to occupy residential premises in a retirement village, being a right arising from a contract-- (a) under which the person purchased the residential premises, or (b) under which the person purchased shares entitling the person to occupy the residential premises, or (c) in the form of a lease, licence, arrangement or agreement of any kind, other than a residential tenancy agreement in the form prescribed under the Residential Tenancies Act 2010 -- (i) that is entered into under Division 5 of Part 10, or (ii) that contains a term to the effect that this Act does not apply to the residential premises the subject of the agreement, or (d) in the form of any other contract of a kind prescribed by the regulations, or any other right of a kind prescribed by the regulations.
Section 4 contains a definition of "resident" as follows: "resident" of a retirement village means a retired person who has a residence right in respect of residential premises in the village and includes the following persons (each of whom is taken also to have a residence right in respect of the residential premises concerned)-- (a) the spouse of the retired person, if the spouse occupies the residential premises with the retired person, (b) if the retired person is in a de facto relationship--the other party to that relationship, if the other party occupies the residential premises with the retired person, (c) any person or class of persons prescribed by the regulations for the purpose of this definition, (d) in Parts 6, 7 and 8 and Division 5 of Part 10--a former occupant of the retirement village.
Section 4(2) provides as follows: For the purposes of the definition of "residence right" in subsection (1), it does not matter that the person who obtains the right-- (a) is a corporation, if the premises concerned are intended for use as a residence by a natural person, or (b) obtains it for the purpose of allowing another person to live in the residential premises (instead of the person who obtained the right), and in those cases, a retired person who lives in the premises with the consent of the corporation or of the person (as the case may be) is taken to have the residence right. Note : Subsection (2) would apply in the case, for example, of a person who buys a strata-titled unit in a retirement village for the person's parent to live in.
Section 7 contains a definition of the term "registered interest holder" as follows: 7 Meaning of "registered interest holder" (1) For the purposes of this Act, a person is the "registered interest holder" with respect to residential premises in a retirement village if-- (a) the person is-- (i) the registered proprietor of land, or (ii) the owner of a lot in a strata scheme, or (iii) the proprietor of a lot in a community land scheme, within a retirement village and as such has a residence right in respect of residential premises within the retirement village, or (b) the person is the owner of shares in a company title scheme that give rise to a residence right in respect of residential premises within a retirement village, or (c) the person's residence contract is in the form of a registered long-term lease that includes a provision that entitles the person to at least 50% of any capital gain.
Section 8 gives meaning to the expression "permanently vacated" as follows: 8. "Permanent vacation" of residential premises For the purposes of this Act, a person is taken to have "permanently vacated" residential premises in a retirement village when-- (a) the person (or another person on behalf of the person) delivers up vacant possession of the person's residential premises to the operator of the village following the person's vacation of the premises, or (b) the executor or administrator of the person's estate delivers up vacant possession of the person's residential premises to the operator of the village following the person's death, or (c) the Tribunal makes an order under section 143 declaring that the person's residential premises were abandoned by the person (and the person is taken to have permanently vacated the premises on the day specified in the order), or (d) if the person is a registered interest holder in relation to residential premises or is taken to be a resident of the premises by the operation of section 4 (2)-- (i) the person dies or moves out of the premises, or (ii) for the purposes of the payment of recurrent charges under section 152--the person moves out of the premises or the executor or administrator of the person's estate delivers up vacant possession of the person's residential premises to the operator of the retirement village following the person's death.
Section 129 concerns the circumstances by which a residence right or contract is terminated. Its provisions are as follows: 129 How and when reside nce right or contract is terminated (1) A reside nce right arising from a contract relating to re sidential premises in respect of which the resid ent is a register ed interest holder (other than a person referred to in secti on 7 (1) (c)) terminates on whichever occurs first-- (a) the completion of the sale of the premises, or (b) if an exit entitlement order is made by the Secret ary in relation to the premises under sec tion 182AC--the date on which the ope rator pays the resident the amount required under the order. (1A) A residen ce right arising from a reside nce contract that is in the form of an assignable lease terminates on the assignment of the lease. (2) A residence co ntract (other than a contract referred to in subsection (1) or (1A)) and the residenc e right under the contract, terminate-- (a) on the date on which the resident permanently vacates the premises, being a date that is (except as otherwise provided under this Part) at least one month after the date on which the resident gives the operator written notice of intention to vacate the premises (or such earlier date as the residence contract may allow), or (b) on the date on which the resident permanently vacates the premises, or (c) on the date on which the resident permanently vacates the premises after receiving notice of the operator's intention to apply to the Tribunal for an order terminating the resident's residence contract, or (d) on disclaimer (for example, on renunciation by the resident accepted by the operator), or (e) on the death of the last surviving resident under the contract, or (f) on the date specified by the Tribunal in an order under section 143 declaring that the resident has abandoned the premises, or (g) on the date on which the contract is terminated by the Tribunal, or (g1) if an exit entitlement order is made by the Secretary in relation to the premises under section 182AC--on the date on which the operator pays the resident the amount required under the order, or (h) if the contract is frustrated-- (i) on the eighth day after the date specified in the notice of termination given under section 132, unless application is made to the Tribunal within the time allowed by that section (or the notice of termination is withdrawn within that time), or (ii) on the date specified by the Tribunal, if the Tribunal determines that the contract is frustrated. (3) Termination of a residence contract does not affect any other right or obligation of the parties under a village contract.
Section 152 deals with the liability for recurrent charges and provides: 152 Recurrent charges in respect of general services: registered interest holders (1) This section applies to a former occupant of residential premises in a retirement village who is a registered interest holder in respect of the premises. (2) The former occupant's liability to pay recurrent charges (being recurrent charges in respect of general services) that arise after the former occupant permanently vacated the residential premises ceases on whichever occurs first-- (a) the date on which the operator of the retirement village enters into-- (i) a village contract with an incoming resident, or (ii) a residential tenancy agreement with an incoming tenant, in relation to the premises, or (b) the date on which a person takes up residence in the premises with the consent of the operator, or (c) if the operator buys the premises from the former occupant--the date on which contracts for the purchase are exchanged, or (d) if the former occupant is a person referred to in section 7 (1) (c)-- (i) if the Tribunal terminated the residence contract--the date on which the former occupant permanently vacated the premises, or (ii) if the former occupant permanently vacated the premises after receiving notice of the operator's intention to apply to the Tribunal for an order terminating the residence contract--the date on which the former occupant permanently vacated the premises, or (e) if the former occupant is a person referred to in section 7(1)(c)--the date that is 42 days after the date on which the former occupant permanently vacated the premises, including by returning to the operator all keys to the premises, or (f) if the contract between the former occupant and the operator provides for a cessation of the liability--the date provided in the contract. (3) The operator of the retirement village must not increase the recurrent charges payable by the residents of the retirement village as a result of any liability that may be incurred by the operator once the former occupant's liability to pay recurrent charges ceases under subsection (2), unless the regulations otherwise provide.
Section 180 concerns the obligations of an operator to make payments to former occupants following the sale of the premises. Section 180 provides: 180 Payments to former occupants who were registered interest holders Note : This section deals with payments to such former occupants of residential premises following the sale of the premises. The sale of premises includes-- (a) in the case where the former occupant was the registered proprietor of land, the owner of a lot in a strata scheme or the proprietor of a lot in a community land scheme and as such had a residence right in respect of residential premises--the sale of that land or interest in that land, and (b) in the case where the former occupant was the owner of shares in a company title scheme that gave rise to a residence right in respect of residential premises-- the sale of that residence right (see section 4 (3)), and (c) in the case where the former occupant's residence contract was in the form of a registered long term lease that included a provision that entitled the former occupant to at least 50% of any capital gain--the sale of that residence right (see section 150). (1) This section applies to a former occupant of residential premises in a retirement village who is, or was, a registered interest holder in respect of the premises. (1A) However, this section does not apply to a former occupant of residential premises in a retirement village who is, or was, a registered interest holder in respect of the premises if the Secretary makes an exit entitlement order for the former occupant under section 182AC. (2) The operator of a retirement village must make any payment required to be made to the former occupant following the sale of the premises within 14 days after the earliest of the following-- (a) the date on which the operator receives full payment under a residence contract with an incoming resident of the premises, (b) the date on which the operator enters into a village contract with an incoming resident of the premises, (c) the date on which the operator enters into a residential tenancy agreement with an incoming tenant of the premises, (d) the date on which a person takes up residence in the premises with the consent of the operator, (e) if the operator buys the premises from the former occupant--the date on which the operator completes the purchase, unless the contract between the operator and the former occupant provides for earlier payment. : Maximum penalty--100 penalty units for a corporation or 50 penalty units for an individual. (3) At the same time as the payment is made, the operator must give the former occupant a statement setting out the following and showing how the amounts were calculated-- (a) the departure fee, if any, payable by the former occupant, (b) accrued or outstanding recurrent charges, if any, payable by the former occupant, (c) any amount payable by the former occupant in relation to the sale of the residential premises concerned, (d) any other amount payable by the former occupant under a village contract, (e) in the case of a former occupant referred to in section 7 (1) (c)--the sale price of the premises, (f) in the case of a former occupant who is required to pay for the cost of the refurbishment of his or her residential premises (as referred to in section 165)--the cost of that refurbishment, (g) the amount of the payment to the former occupant. : Maximum penalty--10 penalty units. (4) If a payment is not made to the former occupant within the time required by subsection (2)-- (a) the former occupant may apply to the Tribunal for (and the Tribunal may make) an order directing the operator to make the payment, and (b) interest is payable, at the rate prescribed by the regulations, on that unpaid amount on and from the date that the amount becomes overdue. (5) If, in the opinion of the former occupant, the amount of a payment made under this section was not calculated in accordance with this Act or any relevant village contract, or the conduct of the operator has unfairly had a negative financial impact on the former occupant-- (a) the former occupant may apply to the Tribunal for (and the Tribunal may make) an order directing the operator to recalculate the amount in accordance with the directions of the Tribunal and pay any additional amount due to the former occupant as a result of the recalculation, and (b) if the Tribunal considers it appropriate, the Tribunal may order the payment of interest on that additional amount at the rate prescribed by the regulations. (6) Without limiting subsection (5), conduct of the operator that may unfairly have a negative impact on a former occupant includes entering into a village contract with a subsequent resident that contains terms that-- (a) are substantially different from those contained in the village contract to which the former occupant was a party, and (b) will have a negative financial impact on the former occupant to the benefit of the operator.

The Judgment of Brereton J

In 2009, his Honour Justice Brereton delivered judgment in proceedings commenced by Mrs Bovaird against the Frost estate and related persons Bovaird v Frost [2009] NSWSC 337. Some of the facts referred to in that judgment relate to the contract and Lease the subject of this appeal and the findings of fact made by his Honour were not disputed in this appeal. These facts included the fact that the executors of Mr Frost's estate continued to pay the accounts of Mrs Bovaird at the retirement village until 12 July 2005 but not thereafter. His Honour noted at [62] that since Mrs Bovaird vacated the village charges of $46,016 have been incurred in respect of the unit and they continue at the rate of $963 per month. At [64], his Honour considered how account should be taken of the benefit Mrs Bovaird had received in the form of her one half interest in the unit (ie. following Mr Frost's death), which Mrs Bovaird no longer needs for accommodation. In the opinion of his Honour when the unit was held by Mr & Mrs Frost and Mrs Bovaird as joint tenants it enabled Mr Frost to provide not only for Mrs Bovaird's aged care accommodation but also in due course for Mrs Frost or himself and it conferred no real capital benefit on Mrs Bovaird (since, in the event of her prior death, it would pass to Mr Frost and Mrs Frost). His Honour held that Mrs Bovaird has a right of contribution against Mrs Frost as co-owner for half of the past and ongoing liabilities to the proprietor of the village and Mrs Bovaird has an asset in the form of her interest in the unit which is no longer required for her accommodation from which those liabilities can be satisfied [66]. At [67], his Honour found that the failure to pay the outgoings associated with the village after Mrs Bovaird vacated it was not a breach of an arrangement for her care entered into during her life on her behalf with Mr Frost. His Honour held that Mrs Bovaird was not entitled to damages in respect of the outstanding and ongoing fees due in respect of the village.

The Notices of Appeal

There are two appeals under consideration made by the Bovaird estate. The Bovaird application (RV 20/54009) was dismissed by the Dismissal Decision and the appeal bears number 2021/00056129 formerly AP 21/08632 (the Dismissal Appeal). The Frost Estate is not a party to the Dismissal Appeal. The Milstern application (RV 20/18490) was determined as recorded in the Primary Decision and is now the subject of appeal 2021/00122743 (the Primary Decision Appeal).
We will deal with the grounds of appeal in each appeal separately and in the following paragraphs.

The Dismissal Appeal

The grounds of appeal may be summarised as follows: 1. The tribunal erred in dismissing the application, did not consider the orders sought and/or misconstrued them. 2. The tribunal beached s36(1) of the Civil and Administrative Tribunal Act 2013 NSW ( the NCAT Act ) by not considering the real issues. 3. The Tribunal erred in stating that the application sought to challenge recurrent charges between 2002 and 2014 whereas the Appellant had sought orders giving confirmation of the parties entitlements in accordance with s180.

The Primary Decision Appeal

The grounds of appeal in the Further Amended Ground of Appeal (lodged on 29th July 2021) may be summarised as follows: 1. The Tribunal erred in law by not accepting and failing to properly address the Appellant's well-settled and articulated cross-claim as the defence to the claim by Milstern, which amounts to procedural unfairness or failure to exercise the jurisdiction of the Tribunal in relation to the defence of the claim. 2. The Tribunal erred in construction and in the application of s 180(5)(a) of the RV Act in determining that the Appellant's action sought to go behind transactions which were 18 years earlier and well out of time, and in the operation and effect of s 180. 3. The Tribunal erred in the application of s 154(1) of the RV Act in determining that the calculation of recurrent charges should be from 1 August 2005, in assessing the recurrent charges, in finding that the unit was not permanently vacated in accordance with s 4(c) of the RV Act until 13 January 2014 (the date of Mrs Frost's death) and in awarding Milstern more than the six months allowed under the RV Act and the RV Contract of recurrent charges that arise after the former occupant permanently vacated. 4. The Tribunal erred in the application of s 154(2) of the RV Act in allowing the discharge of the liability for recurrent charges from the proceeds of the sale of the unit in circumstances where the former occupant did not notify the operator in writing of the option chosen as soon as practicable after permanently vacating the premises. 5. The Tribunal erred in the application of s 152(2) of the RV Act, clause 4(e)(v) of the RV Contract, clause 20.2.2 of the Lease and clause 20.4 of the Lease. 6. The Tribunal erred in making the following findings: 1. calculation of recurrent charges should be from 1 August 2005 to 1 July 2014 with a 25% discount; and 2. recurrent charges should be allowed in the sum of $79,001.25. 1. The Tribunal erred in the application of s 4 of the RV Act by finding that the Frost estate is a former occupant having rights or liabilities under the RV Contract and that the legal position required the operator to provide Mrs Frost with an opportunity to reside in the premises until she either surrendered the property herself or died. 2. The Tribunal erred in failing to consider s 4 of the RV Act, clauses 6.5 and 1.1.22 of the Lease in deciding who was a former occupant. 3. The Tribunal erred in the application and construction of ss 4 and 8 of the RV Act by finding that the unit was not permanently vacated in accordance with s 4(c) of the RV Act until 13 January 2014. 4. The Tribunal erred in finding that the estates of the late Monica Bovaird and Margaret Frost hold shares in the proceeds of sale as tenants in common in equal shares. 5. The Tribunal erred in fact and law by accepting the calculations in the affidavit of Ms Partridge where Milstern failed to provide a detailed statement in accordance with s 180(3) of the RV Act. 6. The Tribunal erred in finding there were obligations of Milstern to retain the premises for Mrs Frost until she died (at [86]) and that they were both entitled to quiet enjoyment during the term of the Lease (at [88]) given that entitlement to quiet enjoyment is only due to the lessee paying the rent under clause 6.2 of the Lease.

Replies to Appeal

Both Milstern and the Frost estate have filed Replies to Appeal effectively supporting both the Primary Decision and the Dismissal Decision.
Milstern's Reply may be summarised as follows: 1. The Bouvaird application was brought out of time and an application to extend time was required. A decision extending time under s 41 of the NCAT Act is an interlocutory decision (see Armee v Brealey [2017] NSWCATAP 141 at [136]-[141]). Leave to appeal is therefore required. However, the Appellant has not complied with clause 12 of schedule 4 of the NCAT Act in that the Appellant has not demonstrated that the decision involved procedural unfairness, was against the weight of evidence, was prejudiced by new evidence which is available now but which was not reasonably available at the hearing in January 2021 and leave to appeal should therefore be refused. 2. With respect to the appeal against the Primary Decision, the Appellant has not identified an error of law. However, the Appellant states that appeal grounds 6, 8 and 11 are mixed grounds of fact and law. To the extent leave is required it should be refused. 3. To the extent that the Appellant alleges procedural unfairness an examination of the transcript demonstrates that the Appellant was given every opportunity to make submissions and place relevant material before the Tribunal. 4. With respect to the second, third and fourth grounds of appeal the Tribunal did not fall into error by determining that it had no jurisdiction to determine that the Appellant's s 180 application as the Appellant sought to challenge charges from between 2002 and 2014. The transcript reveals that the Appellant was seeking to challenge payments going back to 2003 for recurrent charges and conceded that he was asking for a recalculation of accounts from before 2005. The Tribunal did not fail to correctly apply s 14(1) of the Limitation Act 1969 (NSW) (the Limitation Act). The Tribunal correctly interpreted Rule 23(a) of the Civil and Administrative Tribunal Rules 2014 (NSW) (the NCAT Rules) to not include the Limitation Act. 5. Even if the Tribunal accepts the Appellant's submission that the dispute between the parties in regard to the payment of monies arose after the sale of the unit on 31 August 2015, the Bovaird application was still time-barred by Regulation 23(3)(b) of the NCAT Rules as the application was not made within 28 days from the day on which the application became entitled under the enabling legislation to make the application. The Bovaird application is time-barred because it was not made within 28 days of 31 August 2015 and an extension of time has not been granted nor should one be granted. 6. With respect to the first ground of appeal to the Dismissal Decision and the second and fifth grounds of appeal to the Primary Decision, Milstern submits that it provided an exit statement in or about 12 August 2015 setting out the payments which Milstern said were owing to it, following the sale of the unit. On 17 August 2015 Milstern provided the Appellant with a customer ledger which contained a month-to-month breakdown of recurrent charges which it said had accrued since August 2005 up until August 2015. Milstern complied with s 180(3) of the RV Act by providing the exit statement and the customer ledger. On or around 27 August 2015, the Appellant confirmed the receipt of the customer ledger and agreed $74,685.50 being paid to Milstern out of the sale proceeds on the basis proposed in the letter issued by the Appellant's solicitor. That proposal reflected agreement being reached with respect to: 1. the retention amount payable pursuant to clause 17.4.1 of the Lease ($60,000); 2. recurrent charges for personal services up until 26 June 2005 and for general services up until 31 March 2006 ($6,380.50); 3. management fee pursuant to clause 16.1 of the Lease ($7,920); and 4. legal fees pursuant to clause 15.2.2 of the Lease ($385). 1. There was an ongoing dispute between the Appellant and Milstern as to the amount owing for recurrent charges for general services from 2006 onwards. The judgment of Brereton J states that in or around February 2009 charges of $46,016 had been incurred and that recurrent charges were continuing at the rate of $963 per month plus interest at the rate of $380 per month. Such findings run counter to the Appellant's allegations with respect to permanent vacation being effected in 2005 and recurrent charges not being owed to Milstern from 2006 onwards. 2. By the Bovaird application the Appellant seeks to renege on the previous agreement. He took no steps to form an opinion in relation to s 180 until after he was sued by Milstern in July 2020. He did not raise clause 20.2.2 of the Lease at the hearing in January 2021 and should not be permitted to do so now. 3. In answer to grounds 5, 7, 8, 10 and 12 of the Notice of Appeal lodged 29 July 2021, Milstern submits that the Tribunal correctly identified that the late Mrs Frost had a right of residence pursuant to s 4 the RV Act which remained in place after the late Mrs Bovaird left the premises in 2005. The Tribunal correctly identified the late Mrs Bovaird and the late Mrs Frost to each have been registered interest holders in their own right who were entitled to quiet enjoyment of the unit up until it was permanently vacated in accordance with the RV Act. The Appellant's allegation that Mrs Frost was not a "Qualified Person" was not raised by Mr Bovaird at the hearing in January 2021. As a party to the contract and a registered leaseholder in her own right, there was nothing preventing Mrs Frost from providing a medical certificate and moving into the unit prior to her death in 2014 (and in doing so complying with clause 6.5 of the Lease). Mrs Frost did not require consent to live in the unit as the Appellant contends. 4. The Tribunal did not fall into error by characterising the late Mrs Frost or the late Mrs Bovaird as "former occupants". The term "former occupant" under s 4 of the RV Act extends to residents who have permanently vacated a premises which Mrs Frost did by dying in January 2014. 5. In response to ground 9 Milstern submits that the Tribunal correctly identified the late Mrs Frost as a resident, registered interest holder and former occupant when she was named in her own right as a party to the contract and the Lease. The Tribunal correctly identified the date of permanent vacation as 13 January 2014 (the date of Mrs Frost's death). The submissions of the Appellant with respect to keys having been returned on behalf of Mrs Bovaird in 2006 overlooks the Tribunal's findings with respect to furniture being left at the unit by Mrs Bovaird for some years after she had moved out. The submissions also overlook the entitlement which the late Mrs Frost had to take up residence at the unit at any time prior to her death. The Appellant's proposal of an alternate date for permanent vacation occurring on 3 February 2010 when Mrs Frost communicated an intention to sell the unit was not raised by Mr Bovaird at the January hearing. Mr Bovaird is not permitted to now raise such an alternate date on appeal. Further, communicating an intention to sell premises does not discharge the requirements of s 8 of the RV Act and overlooks the fact that Mrs Bovaird and Mrs Frost did not appoint Milstern to sell the unit until around August 2014. 6. In answer to the third, fifth, sixth and eleventh grounds of appeal, Milstern submits that Mr Bovaird did not make submissions at the January hearing with respect to the calculation of recurrent charges despite being afforded the opportunity to do so. It was open to the Tribunal to rely upon the calculations contained in the affidavit of Koreen Partridge when that affidavit was read at the January hearing and its calculations were based on the exit statement and the customer ledger. Mr Bovaird did not object to any part of the affidavit at the January hearing. It was open to the Tribunal to award Milstern $70,001.25 for recurrent charges based on his finding with respect to permanent vacation having occurred on 13 January 2014 and the evidence available to him at the January hearing. 7. With respect to the correct operation of s 152, Milstern draws attention to submissions made at the first instance hearing and in particular submits that s 152(2)(e) of the RV Act as currently in force was brought in by way of amendments which commenced on 1 January 2021. They are not retrospective and are not available to the Appellant. Relevantly, s 152 provided for Mrs Bovaird and Mrs Frost remaining liable for recurrent charges for general services until Milstern entered into a village contract with an incoming tenant. Pursuant to s 152(2) the former occupant remained liable for recurrent charges for general services for 42 days after the date of permanent vacation with the former occupant then being liable for recurrent charges for general services from that point onwards in the same proportion as their entitlement to any capital gain. In the case of Mrs Bovaird and Mrs Frost such provision required that each be liable jointly and severally for 100% of any recurrent charges for general services which accrued more than 42 days after permanent vacation. 8. In answer to the third and fourth grounds of appeal, Milstern submits that s 154 was not raised by Mr Bovaird at the January hearing. He should not now be permitted to raise s 154 in the appeal. In the alternative, the allegations that Milstern breached s 154(2) of the RV Act are erroneous. By agreeing to the payment proposal earlier described Mr Bovaird confirmed his agreement to certain recurrent charges being paid out of the sale proceeds of the unit.
The Reply of the Second Respondent, the Frost estate, may be summarised as follows: 1. The decision the Tribunal is correct in all respects including the decision relating to the entitlement of the parties pursuant to s 180 of the RV Act. 2. With respect to ground 7, the Tribunal correctly applied s 4 of the RV Act in finding that the Frost estate is a former occupant having rights and liabilities under the RV Contract. 3. With respect to ground 8 the Tribunal correctly applied s 4 the RV Act and did not err by failing to consider clauses 6.5 and 1.2.22 of the Lease in deciding who is a former occupant. 4. With respect to ground 10, the Tribunal was correct to find that the Frost estate and the Bovaird estate held shares in the proceeds of sale as tenants in common in equal shares. 5. With respect to ground 12 the Tribunal did not err in finding that Milstern had an obligation to retain the premises for Mrs Frost until she died and both Mrs Bovaird and Mrs Frost were entitled to quiet enjoyment during the term of the lease.

The Dismissal Appeal

The Appellant's submissions in respect of the Dismissal Appeal were incorporated into the Notice of Appeal (referred to earlier in this decision). The Appellant submitted that the Tribunal erred in determining that it had no jurisdiction to determine the application. Rather the effect of the Limitation Act is to provide a defence. The Limitation Act was not pleaded by Milstern and if that Act was to operate as a defence it should have been pleaded.

The Primary Decision Appeal

The Appellant's submissions may be summarised as follows: 1. Grounds 1, 2 and 11 arise from the construction of s 180 of the RV Act which deals with the payment to a "former occupant" after the sale of premises. The Bovaird estate is a "former occupant" and was a "registered interest holder" under ss 4(1), 4(2) and 7(c) of the RV Act. Following the sale of the unit on 31 August 2015, the Bovaird estate received payment of $2,427.60, such payment being regulated by the s 180(3)(g) of the RV Act. Section 180(3) obliges the operator to give a detailed statement to the "former occupant" setting out how amounts were calculated concerning departure fees, recurrent charges and any other amount payable by the former occupant. No statement has been provided detailing or explaining the above requirements regarding departure fee details, accrued or outstanding recurrent charges and reinstatement costs. Milstern has not provided a statement setting out how they calculated monies owing by residents other than in the affidavit of Ms Partridge detailing the Calderbank offers. The affidavit of Ms Partridge and these offers do not comply with the requirements of s 180(3). 2. In the Bovaird application, the Appellant sought orders under s 180(5)(a) directing the operator to recalculate amounts in accordance with the RV Act. The Tribunal erred when summarily dismissing the proceeding on 21 January 2021 in holding that the limitation or delay goes to the jurisdiction of the Tribunal and also in applying s 41 of the NCAT Act when it was unnecessary to apply that provision or alternatively in applying it unfairly against the Appellant. 3. The Appellant's submissions in both applications were to the effect that under s 180 the "former occupant" by its agent, Mr Bovaird, had formed an opinion under s 180(5) relating to the relevant matters including under s 180(3) that the amount of a payment made under that section was not calculated in accordance with the RV Act or the relevant village contract. The time under s 180(2) was 14 days after 31 August 2015 when the sale of the unit was settled. 4. Turning to ground 2 under s 180(2) and (5) of the RV Act and s 128 the Tribunal has jurisdiction to order the operator to recalculate relevant amounts for the period in which they have arisen. The Tribunal erred in rejecting the provisions of s 180 as an essential part of the defence to Milstern's application. 5. With respect to ground 1 the Tribunal erred in not allowing the Appellant's defence by confusing it with the Bovaird application based upon the Tribunal's erroneous understanding that the Bovaird application was out of time. In short, not only did the Tribunal fail to exercise the jurisdiction of the Tribunal under the RV Act, but also deprived the Appellant of the right to be heard. The Tribunal did not engage with the claim articulated in the Bovaird application or the submissions by way of defence to the Milstern application. The failure to address a clearly articulated claim can amount to procedural unfairness: Dranichnikov v Minister for Immigration & Multicultural Affairs [2003] HCA 26; (2003) 77 ALJR 1088 at [24]-[25] and [95]. By failing to address the Appellant's claim, the Appellant suffered procedural unfairness. 6. With respect to grounds 7 and 8, any payment to a former occupant should be regulated under s 180 of the RV Act and payment should accompany a statement indicating how the calculations were done in order to calculate the proper amount to be paid. It was essential for the Tribunal to determine who is the "former occupant", the amount of the recurrent charges which requires determination of the date of permanent vacation of the premises. 7. Further with respect to grounds 7 and 8, the Tribunal erred in finding that the Frost estate is a former occupant. The terms "former occupant", "resident" and "residence right" are defined in s 4(1) of the RV Act. Section 4(2) confirms who is taken to have the "resident's right" in circumstances were a person acquires the right "for the purpose of allowing another person to live in the residential premises". 8. Under s4(1) of the RV Act, a "residence right" is a "right arising from a contract". However, clause 6.5 of the Lease provides that the lessor shall lease residences only to Qualified Persons or corporations or natural persons (not being Qualified Persons) that grant a life subtenancy to a Qualified Person …". A "Qualified Person" is defined in clause 1.2.22 of the Lease and there is a requirement that such a person provide a medical certificate concerning the person's ability to live independently. Mrs Frost did not provide such a certificate and was not a "Qualified Person" and therefore did not have a "residence right arising from a contract" and was never a "resident". 9. Under s 4(2) of the RV Act Mrs Bovaird is taken to have the "residence right" and conversely Mrs Frost cannot be taken to have the "residence right". The Bovaird estate is the only former occupant. The Tribunal erred in characterising the co-lessees ( Mrs Bovaird and Mrs Frost) as former occupants. The Bovaird was the only former occupant. 10. With respect to ground 9 the Tribunal erred in the application and construction of ss 4 and 8 of the RV Act by finding that the unit was not permanently vacated in accordance with s 4(c) of the RV Act until 13 January 2014 when Mrs Frost died. The definition of "Permanent vacation" is contained in s 8 of the RV Act. Mrs Bovaird surrendered the premises on 23 September 2005. There was evidence that Mrs Frost had no interest in becoming a resident and that she concurred with the surrender of the premises. 11. The Appellant submits that the handing over of the keys to the operator by Mr Bovaird, with the concurrence of the co-lessee, constitutes a surrender of vacant possession, enabling the operator to enjoy the right of possession without impediment. 12. The Tribunal erred in stating at [87] that the definition of the former occupant under s 4 of the Act is relevant in considering whether or not vacant possession was surrendered. Further, the Tribunal erred in stating that the definition of permanently vacating the premises is limited to circumstances where a registered interest holder dies or moves out of the premises. 13. The Tribunal erred in stating at [87] that clause 19 of the contract gave Mrs Frost a residence right pursuant to the RV Act. However, clause 19 states that the provisions of the Lease are incorporated by reference into this contract. Thus clause 6.5 of the Lease is included. A right to residency was limited to a "Qualified Person" as defined by clause 6.5. Mrs Bovaird permanently vacated under s 8(a) of the RV Act. Alternatively, under s 8(d) she moved out either as a registered interest holder or as a resident under s 4(2). Mrs Frost was not a Qualified Person and so could never move in and, so consequently, could not move out. 14. Contrary to the Tribunal's finding at [85] there was considerable evidence as to Mrs Frost's non-interest in taking up residence in the village and her concurrence with the surrender of the premises in 2005. The submissions make reference to evidence of discussions occurring in 2005 about the possibility of the unit being sold and the fact that recurrent charges ceased to be paid. 15. Further, the submissions make reference to evidence concerning Mr Bovaird returning keys to the premises and surrendering vacant possession. There was no obligation upon Milstern to retain the premises for Mrs Frost. Milstern did not send out statements of recurrent charges between March 2006 and 13 August 2015. On 3 February 2010 Mrs Frost's solicitors wrote to Milstein giving them written notice of her intention to sell the property. We divert to make the observation that that letter (at page 98 of the appeal book) states that Mrs Frost is one of the tenants in common of a leasehold interest in the unit and that Mrs Frost "is contemplating" selling the property. It indicates that Mrs Frost's solicitors will write to Mrs Bovaird to inform her of Mrs Frost's request in the anticipation that the sale will proceed on a consensual basis. In our view that letter would seem to confirm that Mrs Frost held the view in 2010 that she had a continuing interest in the unit. 16. The Appellant submits that, in the alternative, vacant possession occurred on 3 February 2010 when the solicitors for Mrs Frost wrote to the Appellant's solicitors and advised them of Mrs Frost's intention to sell the unit. The Appellant submits that vacant possession was delivered on 23 September 2005 and that the Tribunal, against the weight of evidence, erred in deciding that the unit was not permanently vacated in accordance with s 4(c) of the RV Act until 13 January 2014 when Mrs Frost died because s 4(c) has no role in deciding vacant possession under the RV Act. 17. The Appellant's submissions then deal with appeal grounds 3, 4, 5 and 6 concerning how recurrent charges are calculated. This involves a consideration of ss 152 and 154 of the RV Act and provisions of the contract. Section 154 provides that a former occupant may, at his or her option, either discharge his or her liability for recurrent charges as the liability arises, or from the proceeds of the sale of the premises or from money payable to the former occupant by the operator. The section requires the former occupant to notify the operator in writing of the option chosen as soon as practicable after permanently vacated the premises. The Appellant submits that the Tribunal erred in allowing discharge of the liability for recurrent charges from the proceeds of sale in circumstances where the former occupant did not notify the operator in writing of the option chosen. 18. The Appellant submits that there is no provision in the RV Act to defer recurrent charges that arise before the premises are permanently vacated. Section 154 concerns only a "former occupant". The submission by Milstern that a resident is allowed to defer payment of recurrent charges until the sale of the premises leads to the extraordinary position that Milstern is entitled to seek payment of nine years of recurrent charges from the proceeds of sale. 19. As indicated in appeal ground 3 the Tribunal erred in the application of s 154(1) in determining that the calculation of recurrent charges should be from 1 August 2005 because such date includes recurrent charges that have arisen before the date when the premises were permanently vacated (13 January 2014) and further erred in awarding Milstern more than six months of recurrent charges that arise after the former occupant permanently vacated the premises. 20. Relevant to appeal ground 4, the Tribunal erred in the application of s 154(2) of the RV Act in allowing the discharge of the liability for recurrent charges from the proceeds of sale in circumstances where the former occupant did not give the notification required under the section. 21. With respect to appeal grounds 5 and 6, which concerns the calculation of recurrent charges, the method of calculation is set out in clause 20 of the Lease. Clause 20.2.2 of the Lease requires preparation of annual accounts. The audited accounts were qualified for 2012 and there were no audited accounts for 2003, 2004, 2005, 2006, 2010 and 2011. 22. The Appellant submits that its calculations (provided at first instance) disclose that the correct amount of the lessee's contribution to operating expenses totals $37,853.37 to which there should be a 25% allowance as well as an allowance with respect to payments previously made. These calculations are set out in detail in the Appellant's submissions and the end result is that the Appellant claims that Milstern should pay it the sum of $222,461.69. 23. With respect to appeal ground 10, the Appellant submits that the Tribunal erred in finding that the Bovaird estate and the Frost estate hold shares in the proceeds of sale as tenants in common in equal shares. 24. With respect to appeal grounds concerning mixed questions of fact and law, the Appellant requests leave in relation to grounds 6, 8 and 11, subject to the proviso that the Appellant submits that leave is not necessary because the rejection of the key elements of the Appellant's case was founded on errors of law.
In conclusion, the Appellant submits that the appeals in both matters should be allowed, the amounts due and owing to the Appellant should be recalculated and awarded to the Bovaird estate or, alternatively, both applications should be remitted to the Tribunal differently constituted for rehearing.

Respondents' Submissions

Milstern's submissions are encapsulated in the Reply which has already been described.
The submissions of the Frost estate may be summarised as follows: 1. The Tribunal was correct in finding at [79] of the Primary Decision that a "resident" includes persons who are retired and have a residence right. There is no requirement that a resident ever lived in the premises. The residence right arises from the contract. Clause 19 incorporates the Lease into the contract and gives rise to the resident's right to occupy the premises. The Tribunal was correct at [81] in stating that the nature of the right is the interest in the proceeds of sale as tenants in common in equal shares. Mrs Frost was at all times a Qualified Person pursuant to clause 6.5 of the Lease because she had attained the age of 55 and as she had not expressed an immediate intention to take up residency, she was not required to provide a medical certificate within 42 days of taking up occupation. The certificate was only required if she expressed an intention to occupy in which case it must be provided no less than 42 days before occupation. Grounds 7 and 8 should be rejected. 2. With respect to ground 10, the Tribunal correctly found that the two estates held the proceeds of sale as tenants in common in equal shares. Neither Mrs Frost nor Mrs Bovaird contributed funds to the Lease, and thus the proceeds of sale is to be distributed equally between them as correctly found by the Tribunal. This is consistent with the judgment of the High Court in Muschinski v Dodds (1985) 62 62 ALR 429. 3. With respect to ground 12 the Tribunal correctly found that Milstern had an obligation to retain the premises for Mrs Frost until she died and that both Mrs Frost and Mrs Bovaird were entitled to quiet enjoyment during the term of the Lease subject to the payment of rent and the observation of other covenants in the lease. 4. The appeal should be dismissed.

Appellant's Submissions in Reply.

The submissions of the Appellant in reply may be summarised as follows: 1. The Exit Statement dated 12 August 2015 provides no details of the recurrent charges and did not comply with s 180(3). Nor did the statement provided the following day, 13 August 2015. 2. A person's right to occupy the residential premises arises from clauses 6.5 and 13.1 of the Lease wherein the Lessor covenants to lease the premises only to Qualified Persons and the Lessee accepts that they shall "use the premises solely for the purposes of a permanent residence" and that "no person shall be entitled to reside in the premises unless… such person is a Qualified Person". Mrs Bovaird was a Qualified Person until July 2005 but Mr & Mrs Frost were never a "Qualified Person". The Lessee comprised natural persons (not being Qualified Persons) and to comply with clause 6.5 of the Lease those persons have granted a "life subtenancy to a Qualified Person", namely Mrs Bovaird. According to clause 1.1.26 Mrs Bovaird, being a Qualified Person living in the residence was the Resident. Under s 4(2) of the RV Act Mrs Bovaird "is taken to have the residence right". 3. On 29 May 2005 Mrs Bovaird was hospitalised and did not return to reside at the premises. She was no longer able to live independently and ceased be a Qualified Person. On 12 July 2005, the Lessee paid the final instalment of the Lessee's contribution to outgoings in accordance with clause 20.2 of the Lease. Recurrent charges were not paid from 1 August 2005. Under clause 6.2 of the Lease the Lessee was no longer performing the conditions on his/her part to be performed and was no longer entitled to quiet enjoyment. There was no subsequent grant of a life subtenancy to a Qualified Person. Mrs Bovaird did not consent to any sublease arrangement with Mrs Frost. The Respondents have ignored the provisions of s 4(2). 4. In the present circumstances where the Lessee comprised three persons and the Lease was obtained for the purpose of allowing Mrs Bovaird to live in the premises, s 4(2)(b) applies. She is taken to have the residence right. 5. Had Mrs Frost wanted to take up residency she would have had to acquire Mrs Bovaird's interest in the unit. 6. Section 180 of the RV Act requires payments to be made to the former occupant. The Bovaird estate submits that the Tribunal has no jurisdiction to decide the equitable interests between the parties to the matter. 7. Contrary to the finding by the Tribunal, Mrs Frost had no entitlement to take up residence at the unit at any time prior to her death in 2014. When the property was surrendered on 23 September 2005 neither of the Lessees were "Qualified Persons". Mrs Bovaird had become unable to live independently in the residence and Mrs Frost had no interest in establishing such an ability. 8. With respect to the calculation of recurrent charges Koreen Partridge deposed that she was instructed that Milstern was "now prepared to accept a total payment of $105,891.10." That is meaningless and irrelevant. The Tribunal erred in placing any weight on such evidence. The Appellant agrees that pursuant to clause 4(e) of the Contract, the former occupant is liable for recurrent payments up until six months after the resident has otherwise delivered up vacant possession. 9. With respect to the submissions concerning s 154 of the RV Act, it is clear that that section only permits deferment of the liability for recurrent charges that arise after the former occupant permanently vacated the residential premises. In conjunction with the operation of s 152, six months of recurrent charges can be deferred. 10. With respect to the assertion that the Appellant needs leave to appeal with respect to the application to extend time, the Appellant submits that the Tribunal erred in holding that the Tribunal has no jurisdiction. The Tribunal dismissed the application erroneously reasoning that the application sought to challenge and adjust entitlements between 2002 to 2014 by bringing an application under s 180(5)(a) of the RV Act. The decision is an internally appealable decision of an ancillary decision as defined in s 80(2) and s 4(1) the NCAT Act. 11. With respect to the concern of the Tribunal that the Appellant had not brought the Appellant's application between 2015 and 2020, the Appellant alleges that previous requests had been fruitless and on 7 October 2020 the Tribunal made directions for Milstern to provide evidence and particulars. After receiving those particulars, the Appellant formed the opinion under s 180(5). That opinion was formed on 30 November 2020 after examination of the further particulars received from Milstern. The Appellant's application (referred to as a cross-claim) was lodged on 16 December 2020 "well within the time period under the RV Act". The cross-claim application was lodged within 28 days of the Appellant forming an opinion. No extension of time was necessary. 12. The appeal should be allowed and the sum set out in the schedule attached to the submissions should be allowed. That sum is $293,042.04. The Appellant also seeks costs.

Consideration

In deciding the issues between the parties, the starting point requires consideration of the agreements they entered into, namely the Lease and the contract.
By the Lease, Milstern warranted that the Lessee shall have quiet enjoyment of the premises on the basis of the Lessee observing the covenants, conditions and restrictions contained in the Lease (clause 6.2). By clause 6.5, Milstern agreed to lease residences within the village only to "Qualified Persons" or to corporations or natural persons (not being Qualified Persons) that grant a life subtenancy to a Qualified Person. Clause 1.1.22 defines a Qualified Person. It is common ground that Mrs Bovaird was a Qualified Person until she left the premises.
Clause 20.2 of the Lease requires the Lessees to pay a contribution to the operating expenses on a monthly basis, subject to annual adjustment under clause 28.2.2.
Clause 1.1.15 defines a Lessee. It includes, where the Lessee is a person, his/her executors, administrators or assigns. Where the Lessee is more than one person it includes each and every one of them and their successors and permitted assigns.
Clause 1.1.26 defines a resident to mean a "Qualified Person and any person living with him in the same Residence".
Paragraph A of the contract acknowledges that the resident (named on the cover page of the contract as Mrs Bovaird, Mr Frost and Mrs Frost) has acquired or is in the process of acquiring the leasehold interest in the residential premises, subject to the provisions of the Lease. Clause 2(b) states that the contract is subject to the provisions of the RV Act and Regulation.
Clause 4 of the contract contains provision for recurrent charges. Clause 4(e) provides that the resident is liable to continue to pay recurrent charges for general charges after permanently vacating the residential premises until one of the five dates described in subclauses (i) to (v). The date stipulated in subclause (v) is the date that is six months after the date on which the resident otherwise delivered up vacant possession of the residential premises.
In the present case the Lease gave Mrs Bovaird and Mr and Mrs Frost a right to reside in the residential premises provided they were a Qualified Person or were residing in the premises with a Qualified Person: see cl 13.1. As such the Lease gave to each of those parties a "residence right" as defined in s 4 of the RV Act because it gave to those persons a right to occupy residential premises arising from the Lease (s 4(1) definition (c) of residence right). The fact it was qualified, does not alter this position.
The acquisition of such rights under the RV Act is not dependent upon the person who has a residence right first occupying the residential premises. Indeed, where the residence right is acquired by a corporation, the corporation would never occupy the premises as "residential premises" as defined in the RV Act.
This view is supported by s 4(2) which provides that in addition to "the person who obtains the [residence] right" (emphasis added), which may be a corporation or natural person, a person who lives in the residential premises with the consent of the corporation or person is also "taken to have the residential right". This view is also supported by the note at the foot of s 4(2) which refers, as an example, to a person who buys a strata-titled unit in a retirement village for the person's parent to live in. In this case, the parent has a residence right in addition to the residence right of the owner.
Consequently, each of the Lessees had a residence right by s 4(1) and it did not matter that Mr and Mrs Frost acquired the residence right for the purpose of allowing Mrs Bovaird to live in the residential premises even if they did not then reside there themselves.
In this regard Brereton J found (as between Mr and Mrs Frost and Mrs Bovaird) that it was the intention of the parties that the Lease and contract was to provide accommodation for Mrs Bovaird and, in due course, to provide accommodation for Mr Frost or Mrs Frost (in the event of the prior death of Mrs Bovaird).
As Mrs Frost was a lessee and had a residence right, we are in agreement with the Tribunal where it found at [85] of the Primary Decision that the "legal position" was that the operator was required to provide to Mrs Frost with an opportunity to reside in the premises until she either surrendered the property herself or died. On this issue the Tribunal found that when Mrs Bovaird gave up possession in September 2005 and returned the keys those facts did not constitute evidence that Mrs Frost concurred with the surrender so far as she herself was concerned [85]. We are of the view that the finding of fact by the Tribunal that there was no evidence to support the proposition that Mrs Frost surrendered her interest in the premises, was correct. The fact that two months later (ie. November 2005) Mrs Bovaird and Mrs Frost executed a transfer of their joint tenancy interest in the Lease to an interest as tenants in common in equal shares is indicative that both parties asserted a continuing interest as lessees under the Lease and inconsistent with the view Mrs Frost had previously concurred with any surrender or had authorised Mr Bouvaird to act on her behalf for the purpose of surrendering the Lease. Also his Honour Brereton J found that charges were accruing against the unit. That finding of fact was not disputed in the Tribunal and is consistent with the proposition that the Lease remained on foot entitling the operator to impose recurrent charges upon the remaining Lessees.
We are also in agreement with the Tribunal in its conclusion at [88] that both Mrs Bovaird and Mrs Frost were entitled to quiet enjoyment during the term of the Lease and that the premises were not permanently vacated until Mrs Frost died. As the Tribunal reasoned, this conclusion involves a consideration of the definition of "former occupant" contained in s 4 of the RV Act. Relevantly, that definition means a resident or a former resident who has permanently vacated any residential premises. Further, as the Tribunal reasoned it is necessary to consider the definition of "permanent vacation" contained in s 8 of the RV Act. Section 8 provides that a person is taken to have permanently vacated residential premises when, if the person is a registered interest holder in relation to residential premises, the person dies (see s 8(d)). Mrs Frost was a former occupant because she was a resident (meaning a retired person who has a residence right) and she was a person who was also a "registered interest holder" under s 7. That definition includes a person whose residence contract is in the form of a registered long-term lease that includes a provision that entitles the person to at least 50% of any capital gain: see s 7(1)(c) and (2). The definition of "former occupant" in s 4 contains cumulative provisions and Mrs Frost, on her death, satisfied those provisions. She continued to have rights and obligations under the contract and, although she had never been in occupation, she nevertheless satisfied the definition of having permanently vacated the residential premises contained in s 8(d)(i). This view was also the view of the Tribunal at [87].
It follows that Mrs Frost had residential rights being a right to occupy the residential premises and the residential contract did not terminate until the premises were permanently vacated which occurred on the death of Mrs Frost. Accordingly appeal ground 7 is rejected.
Ground 8 concerns the contention that the Tribunal failed to consider s 4 or clauses 6.5 and 1.1.22 of the Lease. For the reasons that we have rejected ground 7 we also reject this ground as well. Further, Clause 6.5 provides that the Lessor shall lease residences only to Qualified Persons or to those that grant a life sub-tenancy to a Qualified Person. It is an obligation on the Lessor, not the Lessee. As stated above, cl 13.1 of the Lease regulates use by the Lessees. In any event, these provisions properly construed, obliged Ms Frost to provide the requisite medical certificate if she wished to occupy the residential premises.
Consequently, Ground 8 is rejected. It follows for the same reasons that ground 9 is also rejected.
By reason of the conclusions we have reached concerning grounds 7, 8 and 9 it also follows that Milstern was entitled to claim recurrent charges for the entire period claimed (1 August 2005 to 1 July 2014) as recorded in [38] and [39] of the Primary Decision.
We now turn to consider the Dismissal Decision before returning to the Primary Decision.
We are of the view that the Tribunal did not err in dismissing the Bovaird Application. To the extent that that application sought to recover charges claimed by Milstern since 2003 the claim was made outside the period for the recovery of monies claimed under the Limitation Act. To the extent that the claim concerned recurrent charges claimed up until 1 July 2014, the claim is still precluded by the provisions of the Limitation Act because the Appellant's application was not made until more than six and a half years after the last period claimed for recurrent charges (being the period concluding on 1 July 2014). We are not in agreement with the Appellant's submission that the Limitation Act cannot be relied upon unless specifically pleaded. Proceedings in the Tribunal do not require pleadings. The Appellant is, of course, entitled to procedural fairness and in our view the conduct of the hearing does not reveal that the Appellant suffered procedural unfairness. The transcript reveals (for example see page 1008 of the appeal bundle) that Mr Bovaird was aware of the defence under the Limitation Act being an issue in the proceedings.
The Bovaird Application was also outside the time envisaged by regulation 23 of the Civil & Administrative Tribunal Regulation. There is no error in the Tribunal's reasoning in this respect, as recorded in the Dismissal Decision or in the further reasoning recorded in the Primary Decision at [54]. The Tribunal's refusal to extend time does not display any error of law and nor is there any basis for granting leave to appeal under clause 12 of schedule 4 of the NCAT Act.
To the extent that the Appellant's application is to be construed (as the Appellant contends) as an application under s 180 of the RV Act for an order directing the operator to recalculate the amount paid in accordance with directions of the Tribunal, the question arises whether that application was made outside the period of 28 days envisaged by regulation 23. The parties agreed in August 2015 to an arrangement by which a part payment would be made to Milstern and that the balance will be paid to Milstern's solicitor to be held in trust pending resolution of the dispute between the parties. In our view the Tribunal was not in error in determining that the Bovaird Application was brought more than five years after the date on which the Appellant had formed an opinion that the amount paid (or proposed to be paid) under s 180 was not calculated in accordance with the RV Act. The Tribunal's decision not to extend time does not display error. As the Tribunal recorded at [28] of the Primary Decision there was no explanation for the Appellant's delay of five years in lodging the application. The Appellant's contention that he did not form the requisite opinion until late 2020 after he had received further particulars from Milstern is rejected on the basis that it ignores the fact that the arrangement made in August 2015 for monies to be held in trust clearly is indicative of the fact that the Appellant had at that time formed the opinion envisaged by s 180(5) that the "amount of a payment made under this section was not calculated in accordance with this Act".
For the above reasons the grounds raised in the Dismissal Appeal are all rejected.
We now turn back to the remaining grounds of appeal concerning the Primary Decision Appeal.
For the reasons applicable to the Dismissal Appeal, grounds 1 and 2 of the Primary Decision Appeal are rejected because they concerned the Appellant's cross-claim (being the Bovaird Application lodged in December 2020) and whether the orders sought with respect to that application were initiated outside the requisite time periods.
With respect to ground 3 it follows from the conclusions we have reached above that the Tribunal did not err in its findings of fact as to the period in respect of which Milstern was entitled to make a claim for recurrent charges.
Ground 4 concerns s 154 of the RV Act. That section provides for a number of options by which a former occupant may discharge his or her liability for recurrent charges. Section 154(2) provides that the former occupant must notify the operator in writing of the option chosen as soon as practicable after permanently vacating the premises. The findings of fact recorded in the Primary Decision include that in March 2015 Milstern was appointed by the Respondents to sell the premises and that in August 2015 the parties agreed that a portion of the proceeds of sale would be paid to Milstern and the balance held in trust by Milstern's solicitors pending resolution of the dispute. It is clear in our view that by their conduct those representing the Bovaird estate and the Frost estate effectively chose the option of discharging any liability for recurrent charges from the proceeds of sale, that being the option described in s 154(1)(b)(ii) because the arrangement between the parties had the effect that the liability for recurrent charges was to be discharged from the proceeds of sale. Ground 4 is rejected.
With respect to ground 5, to the extent that that ground relies upon section 152(2) of the RV Act we have already given reasons for our conclusion that the Tribunal was not in error in its conclusions as to the date on which the former occupant permanently vacated the residential premises or the date on which the liability to pay recurrent charges ceased. It follows that there is no error in applying clause 4(e) of the contract. This ground also relied upon clause 20.2.2 of the Lease. That clause requires the operator to furnish to the lessee each year with a statement of details concerning actual operating expenses. It is not apparent that Milstern complied with those obligations but nor is there evidence that any non-compliance caused financial prejudice to the Appellant. This ground also relies upon clause 20.4 of the Lease which provides that where the lessee is absent for a period in excess of seven days a reduction of 25% should be made in the lessee's contributions to outgoings. Milstern's submissions state that despite being given an opportunity to do so Mr Bovaird did not make submissions at the hearing with respect to the calculation of recurrent charges. In our view, that submission is consistent with the finding at [90] of the Primary Decision. We agree with Milstern that it was open to the Tribunal to rely upon calculations contained in the affidavit of Ms Partridge. At [74] of the Primary Decision, the Tribunal noted the claim for recurrent charges made by Milstern which included applying a discount of 25% in accordance with clause 20.4 of the Lease. At [89] the Tribunal found that the calculation of recurrent charges "is appropriate having regard to the provisions of the lease". We reject the contention made by the Appellant that the Tribunal merely acceded to an offer put forward by Milstern rather than making a finding of fact that the claim was appropriate. In our view the Tribunal made a finding of fact as to the appropriateness of the claim and that that finding was open on the basis of the evidence and of the conclusions the Tribunal had reached as to the date when the premises were permanently vacated. Ground 5 is rejected.
For the above reasons, grounds 6 and 11 are also rejected.
Ground 12 is rejected. Although the right of quiet enjoyment could be said to be conditioned on the Lessees paying rent, it appears that Milstern took no steps to assert that the right to quiet enjoyment was at risk. Indeed at the time of the publication of the judgment of Brereton J the position was that charges due to the operator were accruing which suggests that Milstern was not asserting that the right to quiet enjoyment had been or would be lost. The Tribunal did not err in finding that the Lessees continued to have a right to quiet enjoyment.
Ground 10 concerns the contention that the Tribunal erred in finding that the two estates should share the proceeds of sale as tenants in common in equal shares. This ground is contingent upon the Appellant being successful in one or more of the earlier grounds entitling the Appellant to all or some of the proceeds not otherwise payable to Milstern. Having regard to the conclusions we have already reached there is no basis to depart from the usual principle that where there are two tenants having an interest in property as tenants in common in equal shares the proceeds of sale payable to them are payable to them in the same proportions as their interest in the property, namely in equal shares. That principle was followed by the High Court in Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583 (1985) 62 ALR 429. That case concerned the purchase of property by two people as tenants in common in circumstances where their respective contributions were not equal. The court held that the residue, after payment of joint debts and their respective contributions, was payable to them both in equal shares. Here neither estate paid contributions and the residue after payment of the monies due to Milstern should be payable to them in equal shares. The Tribunal did not err in making order 3 of the Primary Decision.
In conclusion, all grounds of appeal are rejected and both appeals are to be dismissed.

Orders

The Tribunal makes the following orders: 1. Both appeals dismissed. 2. If either or both of the Respondents seek costs of the appeal they must file and serve submissions in support of such applications within 14 days of today's date. 3. Within 14 days thereafter, the Appellant may file and serve submissions in response to the Respondent's submissions concerning costs of the appeal. 4. The submissions of the parties should include a submission as to whether the Tribunal may dispense with a hearing on costs and determine costs of the appeal on the papers.

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: 18 March 2022

Estate of Bovaird v Milstern Retirement Services Pty Ltd

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