Gennacker Pty Ltd t/as Homestead Holiday Park v Bennett

Notice of Appeal

1. Although the Decision was published on 1 August 2019 (and received by the Appellant on 7 August 2019) the Notice of Appeal was not lodged until 3 September 2019. That period is outside the period laid down by r 25(4)(b) of the Civil and Administrative Tribunal Rules 2014 (NSW) (the Rules). Notwithstanding that non-compliance, the Appellant did not seek an extension of time in the Notice of Appeal.
2. The grounds of appeal may be summarised as follows: 1. The Tribunal erred in law (alternatively in mixed law and fact), in finding that the Tribunal has jurisdiction to determine the application. The Respondents did not occupy their sites pursuant to the Act and in earlier Tribunal proceedings, decided on 18 October 2016, Member Hennings found that the Tribunal had no jurisdiction in respect of Mr Bennett because his agreement did not satisfy the provisions of the RP Act. Therefore, Mr Bennett had no standing to bring the proceedings alone or in any representative capacity. 2. The Tribunal erred in law, or alternatively in mixed law and fact, in finding that the increase in site fees by 3.5% was excessive and in finding that the increase was not fair and equitable. There was evidence that the operating expenses incurred by the Appellant were 3.86% higher than the previous year. 3. The Tribunal erred in law, alternatively in mixed law and fact, in rejecting the evidence of the Appellant concerning outgoings and operating expenses or alternatively in giving no weight to that evidence in circumstances where the Appellant's accountant was unchallenged and ought to have been accepted. 4. The Tribunal erred in law, alternatively in mixed law and fact, in finding that the Respondents lodged their application for mediation in time, or erred in extending time.
3. The Appellant sought orders that the appeal be allowed, that the orders made at first instance be set aside and that the proceedings at first instance be dismissed. The Appellant also sought costs.

Reply to Appeal

1. The Respondents have filed a Reply to Appeal generally opposing the grounds of appeal brought by the Appellant. In addition, the Reply states that the Appellant's appeal is out of time.

Appellant's Submissions

1. In the following paragraphs we summarise the written and oral submissions of the Appellant.
2. The first submission was that the Tribunal did not have jurisdiction to hear and determine the Respondents' Application given that the Respondents did not establish that they occupied their sites pursuant to the provisions of the Act. The Application had been brought by Mr Don Bennett on his own behalf and in a representative capacity on behalf of a group of occupants. The Appellant submits that there is uncertainty as to who the other Applicants were. Page 6 of the Application (being a document attached to the form of Application identifying the participating homeowners) contains 11 names. Two of those names had not signed in the space provided for a signature and Mr Sawden withdrew his application. The Appellant submits that Mr Bennett was not eligible to be part of the proceedings due to "prior binding Tribunal decisions". According to the Appellant that leaves only seven Applicants in the proceedings. The Appellant notes that two additional occupants' names have been added to the Reply filed in this appeal.
3. The Appellant submits that the Tribunal's jurisdiction to make an order under s 26 of the Act only arises if it is established that the Act applies to the arrangements between the park owner and each occupant. That is because s 7(1) of the Act provides that the Act does not apply to an arrangement in respect of an occupation agreement to which the Casual Occupation Act applies. Accordingly, the Appellant submits that the threshold question was whether each of the Respondents were subject to the provisions of the Act or some other arrangement. There was no finding in the Decision in relation to any of the other Respondents, save Mr Bennett. The onus was on the Respondents to establish that each of them came within the jurisdiction of the Tribunal. In relation to Mr Bennett there were Tribunal proceedings resulting in a decision of Member Hennings published 18 October 2016 in which the Tribunal found that it had no jurisdiction in respect of Mr Bennett because his agreement did not satisfy the provisions of the RP Act. The principle of res judicata prohibits Mr Bennett from bringing further action in respect of the same subject matter and the principle of issue estoppel also prevents Mr Bennett from asserting in these proceedings a claim to a right which was asserted in earlier proceedings between the same parties and in relation to which a final decision was made. The Appellant also relies in respect of Mr Bennett upon the principle of estoppel referred to in Port of Melbourne Authority v Anshun (1981) 147 CLR 589. The Appellant submits that Mr Bennett has never had the approval of the park owner (ie the Appellant) to occupy the site as his principal place of residence. The Appellant has accepted occupation fees paid in accordance with the terms of the agreement between it and Mr Bennett. Mr Bennett is in breach of his agreement, in particular, cl 47.9. He is required to comply with the terms of "the Long-Term Casual Occupation Agreement" he has with the Appellant.
4. The next submission brought by the Appellant concerns the assertion that the time limit imposed by s 69 of the Act was not complied with. The Notice of Site Fee Increase was received by the Respondents on 18 December 2018 and the Appellant submits that the 30 day period referred to in s 69(2) (being the period for lodging an application for mediation in respect of an objection to an increase in site fees) expired on 17 January 2018. The application for mediation was lodged with the Department of Fair Trading seven days later - on 24 January 2019. Section 69(2) provides that the application for mediation is to be signed by at least 25% (or a lower percentage prescribed by the Regulations) of the homeowners who received the Notice within the first 30 days of the notice period, and not otherwise. The Appellant submits that s 41 of the NCAT Act cannot be used to circumvent the clear requirement of s 69 of the Act. The Appellant further asserts that it has suffered prejudice by the Tribunal extending time. The prejudice is the fact that the Appellant has been forced to invest "massive time and costs" in defending the Respondents' Application and in this appeal.
5. The Appellant's written submissions also take issue with the Decision insofar as it placed no weight on the evidence of Ms Hinkling. The Appellant asserts (and there was no evidence to the contrary) that Ms Hinkling is a qualified practising accountant with in excess of 20 years' experience and a director of the Appellant, who had unimpeded and unfettered access to the books and records of the Appellant. Her evidence as an expert was disregarded without any basis for doing so, other than that she was not independent.
6. The Appellant further submits that there was no evidence in support of the claims made by the Respondents. Mr Bennett gave evidence concerning tree maintenance but there was no evidence that the trees were dangerous. There was evidence of wage increases as a result of the Fair Work Commissioner's annual wage review and the Tribunal erred in giving that evidence no weight.
7. The Appellant submits that the Respondents carried the onus of proof and they produced very little in the way of evidence in respect of their claims and assertions. The Act only requires the operator to provide "an explanation of the increase" and does not require monetary values, documents or accounts to be provided to the Respondents who are customers of the Appellant.
8. The Appellant submits that the directors of the Appellant were entitled to make a decision to withhold information in the best interests of the Appellant. Specifically, the Appellant relies upon s 180 of the Corporations Act, 2001 (Cth) (which requires a director to exercise duties with the degree of care and diligence that a reasonable person would exercise and that a director is entitled to make a business judgment if it is rationally made in the best interests of the corporation). The Appellant submits that its directors were entitled, indeed obliged, to act in the best interests of the company by withholding information concerning the expenses of the Appellant.
9. At the hearing of the appeal the Appellant's submissions raised the following matters: 1. Those Respondents who have not participated in the proceedings at first instance (ie all residents other than the 11 who lent their names to the Application) have effectively "opted out". They are not part of the collective Application. We understood the Appellant's representatives to acknowledge that this issue was not raised at first instance. 2. Mr Bennett's agreement is not an agreement under the Act and was not an agreement under the RP Act. The terms of the agreement which he entered into required him to occupy the premises each year for a period not exceeding 180 days. 3. The Appellant's representatives acknowledged that they had misunderstood the number of days permitted to lodge an appeal and therefore now apply to the Appeal Panel for extension of time under s 41 of the NCAT Act to enable the appeal to be lodged out of time.

Respondents' Submissions

1. In the following paragraphs we summarise the Respondents' submissions.
2. The Respondents do not oppose the Appeal Panel extending time for the Appellant to lodge its appeal and acknowledge that the Respondents have not suffered any prejudice by reason of the delay in the filing of the appeal.
3. The powers of the Tribunal are set out in s 73 of the Act.
4. Section 7 of the Act provides that it does not apply to an occupation agreement to which the Casual Occupation Act applies. Mr Sawden withdrew because his agreement fell under the Casual Occupation Act. Section 4 of the Act defines a "site agreement" as an agreement under which the operator of a community grants to another person, for value, a right of occupation of a residential site in the community. Section 5 provides that the Act applies to all communities (as defined in s 4) unless an arrangement falls within s 7 (in which case the Act does not apply). Thus, there is no gap in the sense that, if there is a site agreement, that agreement falls within the Act unless it is an arrangement under s 7.
5. The Tribunal did not need to determine the matter relying upon the transitional provisions and could have come to the same decision by relying upon ss 4, 5, 6 and 7 of the Act.
6. Even if Mr Bennett's agreement is not an agreement under the Act, no issue was taken with respect to the other Applicants (now Respondents) and the Decision and orders remain enforceable in respect of those others.
7. There is no issue that s 69 was complied with in the sense that 25% or more of the residents brought the Application.
8. There was no error by the Tribunal in determining that it had power to extend time under s 69 utilising the power given to it in s 41 of the NCAT Act.
9. The application of s 41 of the NCAT Act in the context of s 69 of the Act is the only question of law raised by the Appellant. All other points are not questions of law.
10. The Respondents submit that they do not bear the onus of establishing that the increase in site fees was excessive but rather, the Appellant bore the onus of establishing that the increase in site fees was justified by the increase in outgoings and operating expenses - see s 73(4) of the Act.

Submissions in Reply

1. Ms Hinkling made oral submissions in reply which we have considered.

Decision

1. Appeals from decisions made in the Consumer & Commercial Division of the Tribunal are regulated by s 80 of the NCAT Act and cl 12 of schedule 4 of the same Act. In brief, an appeal lies as of right on any question of law or with leave of the Appeal Panel in the terms provided by cl 12.
2. The Notice of Appeal sought to argue three points which were not considered in the Decision or raised in the first instance hearing.

Appeal Points not raised below

1. The first of these points is that the Appellant submits that the applicants named in the schedule attached to the document which initiated the proceedings in the Consumer & Commercial Division (namely the Residential Communities Collective Application dated 5 March 2019) do not occupy their sites pursuant to the Act. This point was raised with respect to Mr Bennett and Mr Sawden (whose application was withdrawn) but does not appear to have been raised with respect to the other named applicants. It is clear from the language contained in the Residential Communities Collective Application that the applicants sought to invoke perceived rights under the Act. The Application is stated to be a collective application under s 71 of the Act. We have been provided with the transcript of the hearing at first instance and we cannot see evidence that the Appellant questioned the status of the applicants (now the Respondents) other than with respect to Mr Bennett and Mr Sawden.
2. To the extent that the Appellant seeks to argue that the other Respondents (ie other than Mr Bennett) were not parties to agreements under the Act, we reject those submissions because the point was not raised previously and the proceedings at first instance proceeded upon the basis that the only live objection was with respect to Mr Bennett. Paragraph 2 of the Decision expressly states that no submissions were made about whether the Tribunal lacked jurisdiction in relation to any of the other applicants (ie other than Mr Bennett and Mr Sawden). Nor have we been provided with any evidence in support of the Appellant's proposition that the agreements with the other Respondents are not regulated under the Act.
3. The second point not raised at the hearing at first instance or in the Decision is that the Appellants submit that those residents in the residential community who are not named in the collection application are to be treated as having "opted out" of that application. The Decision contained a statement that the Tribunal's orders do not apply to homeowners who have opted out. However in neither the Decision nor in the transcript is there any consideration of whether a homeowner who has not lent his or her name to the application should be treated as having opted out.
4. Section 69(5) of the Act states that a homeowner may opt out of the mediation and agree to pay the increase (in site fees) but only if the homeowner follows the process set out in the Regulations. The Regulations do not appear to provide for a process. There was no evidence either before the Tribunal or before us as to who had opted out and paid the increase. We reject the submission that homeowners who have not put their name in the application (ie whose names do not appear in the attachment to the application) have opted out. In our view it is now too late for the Appellant to raise this point and were we to allow it there would be the potential for residents who have not lent their names to the tribunal proceedings to be disadvantaged if they had not intended to opt out .
5. We also reject the Appellant's related submission that those applicants named in the collective application but whose signatures do not appear on the collective application, namely Dot Skinner and Bob Kaine, were not applicants. It is clear from the transcript that Mr Bennett held himself out as the representative of the applicants being those named in the collective application, and there is no evidence that that representation was disputed. Indeed, attached to the Respondents' Reply filed in this appeal is a list of the applicants and it appears that both Dot Skinner and Bob Kaine have signed beside their names on that list.
6. Section 71(2) of the Act deals with an application made by affected homeowners to the Tribunal for an order concerning an increase in site fees and states that such an application "must be made on behalf of all of the affected homeowners (other than those who opt out of the application) by one or more of them appointed as the representative or representatives by the participating homeowners". With the exception of the position concerning Mr Bennett (and Mr Sawden who withdrew), the Appellant did not, in our view question the tribunal's power to make orders affecting the site fee increase payable by other applicants.
7. We will now turn to the grounds of appeal set out in the Notice of Appeal.

Ground 1: the Bennett agreement was not regulated by the Act

1. The ground we will address first is that the Tribunal had no jurisdiction to determine the application because Mr Bennett did not have an agreement regulated by the Act. We have been referred to previous Tribunal and Court decisions concerning Mr Bennett and the Appellant. Those decisions, and a summary of what they decided, are as follows: 1. The Appeal Panel decision reported as Gennaker Pty Ltd v Bennett [2016] NSWCATAP 10 was published on 11 January 2016. Those proceedings also concerned a dispute over excessive "rent" (in respect of a period prior to the introduction of the Act). The Respondents to the appeal (the homeowners) argued that their agreements were regulated by the Residential Parks Act, 1988 (RP Act) whereas the operator (ie the Appellant) argued that the agreements fell under the Casual Occupation Act. The RP Act was repealed from 1 November 2015 at which time the Act took effect. The Appeal Panel referred to related proceedings in the Supreme Court and in particular to a decision of Hidden J, who had held that the agreement between Mr Bennett (and Mrs Bennett) and the Appellant, was subject to the Casual Occupation Act. The Appeal Panel held that it was bound by that decision with respect to the relationship between the Bennetts and the Appellant. 2. Mr & Mrs Bennett appealed the decision of Hidden J to the Court of Appeal and we were referred to the decision of the Court of Appeal: Bennett v Gennacker Pty Ltd [2016] NSWCA 89. The Court of Appeal upheld the Bennetts' appeal and held that the agreement was not one regulated by the Casual Occupation Act. The Court held that there is little doubt that the contract between the parties constituted an "occupation agreement" which is defined by that Act to mean "any agreement under which a person grants to another person for value a right to occupy a site" (s 3). The Court held that the Casual Occupation Act did not apply to the Bennetts' occupation agreement. This was based upon the Tribunal's finding of fact that Mr Bennett had not been the occupant "on a casual basis" for at least 12 months and had been an occupant on a continuous basis for a significantly longer period. The relevance of this finding of fact was that the Casual Occupation Act required the occupant to have been an occupant on a casual basis. 3. Later in 2016, the Tribunal published a decision which is unreported but is recorded as RP 15/10281 and RC 16/02031. It is a decision of Member Hennings and was published on 18 October 2016. The decision records that it is common ground that since March 2008, Mr and Mrs Bennett have lived in a moveable dwelling located at the park owned by the Appellant. In that decision the Tribunal was asked to consider whether, in light of the Court of Appeal decision that the Bennett agreement was not regulated by the Casual Occupation Act, the RP Act applied to that agreement. The Tribunal found that there was nothing that prevented a park owner and an occupant from entering into a "third type of occupation agreement to which neither Act applies". The Tribunal held that there was insufficient evidence to establish that there were subsequent events (ie events subsequent to the events that were under consideration before the Court of Appeal) that established that the Bennetts occupied the premises as their principal place of residence. The Tribunal was not satisfied that the Bennetts satisfied the provisions of the RP Act and that the agreement between the parties was not one to which the RP Act applied. The Tribunal decided that it had no jurisdiction to determine the matters in dispute.
2. It is important to note that the above decision of the Tribunal (ie the Hennings decision) concerned a dispute over rent increases in respect of the 12 month periods commencing 1 April 2013 and 1 April 2014. It is relevant to note that the Act came into effect on 1 November 2015. The provisions of the Act have not been considered in the three decisions referred to above.
3. On 1 November 2015, the Act came into effect. We consider the following provisions of the Act to be relevant to the issues in this appeal: 1. The Act applies to all communities, whether existing immediately before or coming into existence after the commencement of this section (s 5). "Community" is defined in s 4 to mean an area of land which comprises or includes sites on which homes are, or can be, placed, installed or erected for use as residences by individuals, being land that is occupied or made available for occupation by those individuals under an agreement or arrangement in the nature of a tenancy. 2. The Act applies to all site agreements, whether existing immediately before or coming into existence after the commencement of this section (s 6), unless a provision of the Act provides otherwise. A site agreement is defined in s 4 to mean an agreement under which the operator of a community grants to another person for value a right of occupation of a residential site in a community. 3. The Act does not apply to an occupation agreement to which the Casual Occupation Act applies (s 7). 4. Clause 5 of schedule 2 of the Act makes provision for existing agreements entered into under the RP Act ( now repealed) to continue to remain "valid". Clause 5(3) provides that a residential site agreement in force immediately before the repeal of the RP Act is taken on that repeal to be a site agreement between a resident and the park owner as operator of the community.
4. We are in agreement with the submissions of the Respondents to the effect that the Act applies to the agreement between Mr Bennett and the Appellants. The agreement with Mr Bennett constitutes a site agreement as defined under s 4 of the Act and the effect of s 6 of the Act is to make the agreement subject to the provisions of the Act (unless a provision of the Act provides otherwise). Section 7 does not apply because the Casual Occupation Act has been held not to apply: see para 46 of the Court of Appeal judgment referred to earlier.
5. Our conclusion that the Act applies to Mr Bennett's agreement is the same as the conclusion reached in the Decision, although, in our view, that conclusion can be based upon the sections of the Act referred to without relying upon the provisions of Schedule 2. However we also agree with the Decision in that : 1. The Decision relied upon the finding that the Bennett agreement was an agreement of the kind referred to in cl 5(1)(c) of the Residential Parks Regulation 2006 . That subclause refers to an agreement that creates a tenancy for a term of 3 years or less. Section 3 of the RP Act contained a definition of "residential tenancy agreement". It is clear that it is an agreement to grant a right to occupy premises or to occupy a site. That is also clear from the terms of the standard form of agreement to which cl 5(1)(c) refers and which is set out in Schedule 3 to the Regulation. 2. The Decision concluded that the Bennett agreement was one to which the Act applied by virtue of cl 5(3) of Schedule 2 to the Act. Clause 5(3) refers to a residential site agreement (which is a defined term in the RP Act) and to a "moveable dwelling agreement" (which is defined in cl 6 of Schedule 2 to mean an agreement of the kind referred to in cl 5(1)(c) or (d) of the above Regulation). In our view clause 5(3) of Schedule 2 is intended to provide for an agreement of that kind to become a site agreement under the Act on the repeal of the RP Act.
6. In short by reason of the provisions of ss 5, 6 and 7 of the Act and also the provisions of cl 5 of Schedule 2 of the Act, the Bennett agreement is now regulated under the Act. The Tribunal has jurisdiction and this ground of appeal is rejected.

Ground 2: The time limit imposed by s 69

1. In our view the effect of s 69 of the Act is to set out the mechanism by which an objection to an increase in site fees may be made. The section requires the objectors to apply for mediation and to have the signatures of at least 25 per cent of homeowners, and for the mechanism to be invoked within the first 30 days of the notice period. The words "and not otherwise" are to be taken to mean that these requirements must be complied with. However, the wording of s 69 is not capable of being construed to mean that s 41 of the NCAT Act cannot be invoked to extend the time. Section 41 permits the Tribunal to extend the time "for the doing of anything under any legislation … despite anything to the contrary under that legislation". In our view there is nothing in the Act to indicate that the time set out in s 69 was to be construed as incapable of extension under s 41. This ground of appeal is rejected.

Ground 3: The Tribunal erred in rejecting Ms Hinkling's evidence

1. In our view the Decision does not display any error in rejecting Ms Hinkling's evidence partly on the basis of her lack of independence. She was a director of the Appellant with duties to act in the interests of the Appellant and the Tribunal was entitled to have supporting evidence to enable it to be reasonably satisfied that the Appellant's expenses had increased as asserted by Ms Hinkling. Her lack of independence was not the only basis for the tribunal being unpersuaded. The Tribunal's task in considering whether to make an order under s 73 of the Act (in this case whether to declare that the increase was excessive) was to consider the factors set out in s 74. It is clear from the Decision that the Tribunal did so, including specifically the factors under s 74(1)(b) (which concerns increases in outgoings and expenses) and under s 74(1)(h) (which concerns any explanation for the increase provided by the operator by notice in writing to affected home owners). The Tribunal was critical of the lack of detail of the increases by category of expense and the lack of supporting evidence. The Tribunal was also concerned about the lack of independence of the Appellant's main witness and concerned about the evidence concerning the apportionment of expenses between the residential community and the tourist operations. The Tribunal's approach does not display any error of law or a cl 12 leave ground.
2. The Appellant's submission that the respondents had the onus of proving that the increase was excessive is misconceived. It is clear from ss 67(4) and 74(h) that the operator must provide an explanation in the notice for the increase and that the Tribunal may have regard to the explanation. In addition the Tribunal may have regard to other factors referred to in s74, some of which constitute information known only to the operator. The Tribunal was entitled to consider the evidence provided by the operator and to determine that the increase in site fees was excessive because there was insufficient evidence explaining the increase in outgoings and expenses.
3. The Appellant sought to justify its decision to withhold information from the Tribunal on the basis that to disclose information concerning its expenses would not be in its best interests. Whilst the Appellant was entitled to decide what level of detail it provided, it would follow that it must also accept the consequences of its decision. We note in passing that the Appellant did not elaborate on how the Appellant's interests would suffer if it disclosed more detailed financial information. If the Appellant was concerned about confidential information coming to the attention of a competitor it could have considered an application under s 64 of the NCAT Act (by which the Tribunal may restrict disclosure of confidential information).
4. Finally, we consider whether we should extend the time for the filing of the appeal. The notice of appeal was filed almost 2 weeks outside the time permitted by the Rule. The reason for the omission was said by the Appellant to be based upon a misunderstanding as to the number of days permitted for the lodgement of an appeal in respect of residential proceedings (defined in r 3 of the Rules). The relevant considerations for the extension of time have been set out in previous appeal panel decisions. One consideration is the length of the delay. This was almost 2 weeks, which is not insubstantial when one considers the permitted period was 2 weeks from 7th August. The second consideration was prejudice to the Respondents. None was suggested. The third consideration was the reason for the delay which was ignorance of the relevant rule. This was not satisfactory given the level of experience of the Appellant and that it is reasonable to expect the Appellant to have a better understanding of its obligations. In our view the interests of justice marginally favour extending the time. An order to that effect will be made.
5. Our conclusion is that the appeal must be dismissed and we make the following orders; 1. The time for the filing of the appeal is extended to 3rd September 2019 2. The appeal is dismissed 3. If the Respondents seek costs of the appeal they must file and serve written submissions within 21 days of the publication of this decision. 4. The appellant must file and serve submissions in reply within 21 days thereafter 5. The submissions of the parties should address the question of whether the appeal panel may determine costs on the papers and dispense with a hearing on costs.

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: 21 January 2020