Hill v Hampshire

Applicants' submissions

In the initial submissions dated 28 July 2022, filed on behalf of each of the applicants, Mr Hill provided a cover letter referring to the various attachments which included the ASIC extract for the respondent company, along with the relevant page of his lease. The Notice of Fee Increase issued by the respondent dated 30 July 2021 was included together with extracts from the Australian Bureau of Statistics Act 1975 and material relating to CPI Australia methodology for March, June and December 2021. Mr Hill submitted that each of the three applicants had received a non-compliant increase of substantially the same kind, and he pointed out that the applicants' leases called for an annual site increase in accordance with the Sydney CPI increase for the period of 12 months from March in each year. He thereafter referred to the examples of the Australian Bureau of Statistics showing CPI figures rounded to one decimal place, and he referred to an email sent to the respondent on 2 August 2021 explaining the Australian Bureau of Statistics rounding of the CPI.
Copies of each of the three applications were included in his initial submissions. In attaching the relevant page of his lease document, Mr Hill noted that the rent was to be increased on 1 October each year by the amount of the Sydney CPI as at 30 June. A further note indicated that in 2017 the CPI period was changed to March in each year.
On 30 July 2021 Mr Hill and his wife received a Notice of Increase in Site Rents in accordance with s.66 of the Residential (Land and Lease) Communities Act 2013. It was claimed that the site rent increased by $1.50 from $159.27 to $160.77 in accordance with the fixed method. It was claimed that this increase was equivalent to an increase of 0.94% in the CPI.
Attachment 4 to the documents provided by Mr Hill included a compilation from the Australian Bureau of Statistics on 3 May 2019, which referred to ss.6 and 7 of the Act. This was accompanied by a Notice in respect of the Consumer Price Index for Australia as at March 2021. That index clearly showed that Sydney recorded an annual rise of 0.9%.
In a document described as "Attachment 6" explanatory notes were provided together with an analysis of CPI changes. Particular attention was drawn to the following entry in that document:- Rounding Published index numbers except for the underlying trend series are rounded to on decimal place. Percentage change movements are calculated from the index numbers and then rounded to one decimal place. Rounding errors can occur causing discrepancies (e.g. when calculating percentage rates of aggregates and their components) underlying trend series, trimmed mien and weighted mien index numbers are published to four decimal places. Percentage change movements are calculated from the published index numbers and rounded to one decimal place.
On 2 August 2021 Mr Hill wrote to Mr Back in the following terms: Dear Richard I acknowledge the receipt of your letter dated 30 July 2021 in which you advise that the rent increase for the next period commencing 1 October 2021. There is only one group in Australia who is authorised to calculate and publish the official CPI rate for each year. That group is the Australian Bureau of Statistics, and their official figure for the period June 2020 to June 2021 is 0.9%. It was noted that the official figure of 0.94% was not recognised. It would appear that Mr Hill referred to a period June 2020 to June 2021, whereas the material provided clearly related to March 2020 to March 2021.
In a reply dated 23 September 2021, Mr Black wrote to Mr Hill in the following terms: We refer to your emails 2 August and 22 September 2021 and the rent increase notice we issued to you and advise that we are at a loss to understand your statement that "your unofficial figure of 0.94% is not recognised". As stated in the Increase Notice the fixed method represents the percentage movement in CPI between March 2020 and March 2021 quarters. The specific index number has increased from 117.4 to 118.5 over the specified 12 months. This equates to an increase of 0.94%. Added is a print out of the Table the ABS website which confirms the index numbers detailed are correct. The percentage increase in their index numbers has been correctly calculated as 0.94%. We also do not understand why your email of 2 August 2022 refers to the period June 2020 to June 2021, rather than March 2020 to March 2021. We note the increase in the CPI (Sydney all groups) for the 4 quarters ended June 2021 was 4.1%. Your assertion that the Increase Notice is not valid is incorrect and without foundation. We require you to comply with the terms of your Site Agreement by paying rent in accordance with the Notice.
By an email dated 28 September 2021, Mr Hill again responded in the following terms: I received your latest offering about rent increases which you put in my letterbox late on 24 September 2021. Richard Black, or the person who is sitting in his chair and rubberstamping his letters does not appear to understand the State and Federal legislation. The Australian Bureau of Statistics is the only group with the authority to calculate and publish CPI figures in Australia, not Richard Black, Casino Lifestyle Village, Hampshire Casino Pty Ltd and Hampshire Property Group. From the attachment "Consumer Price Index, Australia" at page 22 "percentage change from corresponding quarter of previous year" you will see that the official CPI for Sydney increases for the March period 2020 to March 2021 is 0.9% not 0.94% as you have incorrectly stated. The reason for the difference between the official ABS number and your incorrect number is as follows. Rounding Published index numbers, except for the underlying trender series, are rounded to one decimal place. Percentage change movements calculated from the index numbers and then rounded to one decimal place. Rounding errors can occur, causing discrepancies e.g. when calculating percentage changes of aggregate and their components). Underlying trends series, trend miening, weighted mien and index numbers are published to four decimal places. Percentage change movements are calculated from the published index and numbers rounded to one decimal place." As of this date they have not received legitimate notice in accordance with the Residential (Land Lease) Communities Act, notifying me of an increase.
On 5 October 2021 Mr Hill referred to a rent receipt dated 5 October 2021 and requested that $1.50 be credited to his account.
On 28 September 2022 Mr Hill provided a further statement noting that he was the applicant who was also representing Ms Lenette Hall and Mr David Binskin. He noted that he owned a house at 150/69 Light Street Casino, and that he had leased a parcel of land on which his house was located.
Mr Hill stated that he had already demonstrated that the Sydney CPI rate for determination of annual site fees was rounded to one decimal point and he went on to note that the three applicants were aged pensioners and all pensioners struggled financially when they signed their respective leases, noting however, that the site fee would change each year in accordance with the Sydney Consumer Price Index.
He claimed that the applicants knew they would be able to budget for site fees increases because the government adjusted pensions also increased in line with changes to the CPI. The operators put in their own financial strain onto the increases arising from their attempt to strike own "CPI figure".
Attached to this material was a copy of rent increase notice dated 29 July 2022 for the 2022/23 year, which purported to increase the rent from $160.77 to $167.83 per week in accordance with the fixed method. It is noted that for the purposes of issuing the notice the respondent has assumed that the increase in 2021/22 to $160.77 was a valid increase from a valid notice.
In response to directions made on 24 October 2022, Mr Hill, Ms Hall and Mr Binskin provided further evidence in relation to the calculation of the alleged overcharges.
In his statement Mr Hill noted that he moved into the village and signed a lease on 24 August 2015. Under that lease the site fee was increased in October of each year in line with the Sydney CPI. He claimed that in October 2021 the site fee was increased from $159.27 to $160.77 under a notice which did not comply with s.66 of the Residential (Land Lease) Communities Act 2013. Mr Hill therefore claimed a refund of $78.00 for the period from 1 October 2021 to 30 September 2022.
In a statement dated 1 November 2022 Lenette Hall stated that she owned a house at 142/69 Light Street Casino. She moved into the village in October 2013 and signed a lease which provided for an increase in the site fee each October in line with the Sydney CPI.
She claimed that in October 2021 the site fee was increased from $159.27 to $160.77 representing an increase of $1.50 per week. She noted that the increase did not comply with s.66 of the Residential (Land Lease) Communities Act 2013, and as a result she claimed a refund of $78.00.
David Binskin of 152/59 Light Street Casino stated that he moved into the village in December 2014 under a lease dated 10 September 2014. In accordance with his lease the site fee was increased in October of 2021 from $159.27 to $160.77 representing an increase of $1.50 per week. Mr Binskin also claimed that the increase did not comply with s.66 of the Residential (Land Lease) Communities Act 2013, and as a result he had been charged a sum of $78.00 for a period from 1 October 2021 to 30 September 2022.
The parties attached a Schedule detailing the amounts they had each paid under the Site Agreements and indicating that over a 52 week period an increased rent of $78.00 was paid.
In a further statement dated 1 November 2022, Mr Morris Hill purported to address a fee increase notice dated 29 July 2022 in relation to the October 2022 to September 2023 proposed increase. The present application was filed prior to the service of a fee increase notice for 2022/2023 and accordingly the Tribunal does not propose to address any issues in relation to that notice or that increase.

Decision

It is appropriate to address the legislative provisions relevant to the present claims and it is clear that s.12 of the Residential (Land Lease) Communities Act 2013 prohibits (contracting out) and s.12(3) voids terms and site agreement to the extent that they are inconsistent with the Act or Regulations made under the Act.
Section 65 of the Act provides 65 How site fees may be increased 1. Site fees payable under a Site Agreement can be increased only if the increase is made in accordance with this Division 2. A Site Agreement may provide that site fees payable under it may be increased in accordance with either of the following procedures: a. At specified intervals (or on specified dates) by a fixed method which may be either i. By fixed amounts, or ii. By a fixed calculation (for example in proportion to variations in the Consumer Price Index or in the Aged Pension) b. By notice (otherwise than by a fixed method).
Section 66 provides 66 Increase of site fees by fixed method 1. This section applies to a Site Agreement that provides for the increase of the site fees by a fixed method 2. A Site Agreement must not provide that the site increase may be increased by more than one fixed method. If more than one method is specified, the method that results in the lower or lowest increase of site fees is the applicable method 3. The operator must not increase (or attempt to increase) the site fees that are to be increased according to a fixed method otherwise than in accordance the method and this section. Maximum penalty: 50 penalty points 4. The operator must give at least 14 days written notice to the home owner of any increase in site fees even if the timing of the increase is specified in the site agreement 5. The Notice must a. Specify the amount of the increased site fees and, b. Specify how the increased site fees have been calculated, and c. Specify the day on and from which the increased site fees are payable, and d. Include such other information as may be prescribed by the Regulations, and e. Be in the approved form (if any) 6. The home owner is not required to pay any increase in the site fees until notice of the increase is given as required by this section 7. The terms of the Site Agreement fixing the method of future increases of site fees cannot be challenged under this Act however ….
Section 67 of the Act provides for an increase of site fees by notice and that section applies to site agreements which provide for an increase of site fees by notice (otherwise than by a fixed method).
Section 157 of the Act details the orders which can be made by the Tribunal in determining a dispute relating to the rights or obligations under the Act or site Agreements.
In Palm Lake Resort Pty Ltd v King and Metcalfe [2021] NSWCATAP 195, the Appeal Panel addressed a dispute involving an increase by the CPI as compared to a term which provided an alternative method under the particular site agreement.
In that matter the Appeal Panel noted that the fixed method option specified in Schedule 1 of that particular lease, provided for one option which, in that case, applied the relevant CPI to one decimal place.
In his statement dated 28 September 2022, Mr Hill referred to evidence that the Australian Bureau of Statistics was the only body authorised under the Australian Bureau of Statistics Act 1975 to set official CPI rates and that these rates were rounded to only one decimal place.
He pointed out that the three applicants were aged pensioners who struggled financially when they signed their respective leases but were confident that they would be able to budget for site fee changes because the government adjusted pensions in line with changes to the CPI. When the operators increased site fees by striking their own CPI figure it was said to put financial strain and mental stress onto pensioner home owners.
A schedule provided by the applicants noted that an increase in accordance with the respondents CPI interpretation gave rise to fees which were $1.50 per week in excess of the appropriate amount claimed to be due. This constituted a variation from the appropriate increase to $159.27 to an inappropriate increase to $160.77. Based on this evidence each of the applicants has claimed that over the 52 week period an additional sum of $78.00 has been paid, and the refund of that sum is sought by each of the applicants.
In a further statement dated 1 November 2022 Mr Hill purported to address a Notice of CPI Increase for the 2022/23 year. In that statement he noted that, based upon the present applications, the site rent had remained at its level of $159.27. He conceded that the appropriate CPI figure for March 2022 was 4.4% and that until a compliant Site Fee Notice was received for the 2022/23 year, the new site fee should be in the order of $166.28.
It is not appropriate for the Tribunal to attempt to address the increase for 2022/23 but in the circumstances the Tribunal is satisfied that no compliant Notice to increase the fees in 2021/22 was served by the respondent and accordingly each of the applicants are entitled to a refund of $1.50 per week, or a sum of $78.00.
The submissions of the applicants have not been challenged in any way by the respondent in the hearing and accordingly the Tribunal makes the orders sought in each case. It is appropriate that a period of 21 days from the date of the order be allowed for payment of those sums.
Each party is to bear their own costs.

At a glance

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Decision date

Source

Judgment (8 paragraphs)

Parties

Cases Cited (1)