Hood v Harley Kismet Pty Ltd t/as Kismet Riverside Lodge

Evidence

1. The Home Owners, Mr and Mrs Hood, appeared in person and gave evidence under affirmation. They were represented by Ms Maybin from Verto, Tenants Advocacy Service.
2. Mr Bailey, the Park Operator appeared and gave evidence under affirmation. Mr Murdoch appeared on behalf of Mrs Bailey, the Park Operator and gave evidence under affirmation.
3. Each party was provided with an opportunity of submitting documents in support of their case, an opportunity of giving oral evidence and cross examining each other in relation to the evidence presented to Tribunal.
4. All of the evidence and written submissions have been taken into account by the Tribunal in reaching its findings and decision.

Jurisdiction

1. The Tribunal has jurisdiction to hear and determine the application under sections 156 and 157 of the RLCC Act and sections 28 and 29 of the Civil and Administrative Tribunal Act 2013.

Home Owner's submissions

1. The Home Owners claim that the criteria for the application of the HP Act to a site agreement have not been satisfied in accordance with section 5 the HP Act. The Home Owners sold their principal place of residence in September 2014 prior to purchasing the moveable dwelling on site in November 2014. The Home Owners claim that this dwelling was being used as a residence at the time of purchase. Further, they have been residing at the property on a continual basis. The Home Owners dispute the claim by the Park Operator that their site and surrounding site locations are designated for short term occupation only, providing a statutory declaration from a neighbouring resident who occupies their site on a permanent basis.
2. The Home Owners rely on previous proceedings between the parties before the Tribunal whereby the Park Operator made written submissions asserting that that the parties had entered into an oral agreement under the RP Act and had not raised the issue of the application of the RLCC Act in any previous proceedings before the Tribunal, including an appeal hearing in early 2018.
3. Further, the Owners submit that the Park Operator has regularly served notices pursuant to the RLCC Act, such as notices for site fee increases, including a notice served subsequent to the commencement of these proceedings.
4. The Home Owners claim that the conduct of the Park Operator confirms that the agreement between the parties is governed by the RLCC Act and that estoppel and/or res judicata should prevent the Park Operator from asserting otherwise.

Park Operator's submissions

1. The Park Operator contends that site 17 where the Home Owners reside is approved by the local council as a short term site. The Park Operator's evidence was that Mrs Bailey was shown lot 88 initially in 2014 and was provided with details of local builders of manufactured homes for placement on the site. However, approval was never sought for the purchase of site 17 and occupation of the site on a long term basis. The Park Operator's evidence was that had they known that the Home Owners intended to purchase a unit on this site, it would have communicated the designation of the site to the Home Owners prior to purchase. The Park Operator claims that the Home Owners have not provided any evidence that the previous occupant permanently resided at the site.
2. The Park Operators claim that the Home Owners have not established that site 17 was their principal place of residence at the time of their commencement of occupation.
3. The Park Operators refute that there has been any agreement entered into by the parties under the RLCC Act.

Findings

1. The parties agree that there is no written site agreement in place.
2. Section 5 of the HP Act states: 1. This Act applies to any occupation agreement in relation to a site: 1. entered into by an occupant who has a principal place of residence somewhere other than the site, and 2. under which the occupant installs the occupant's own moveable dwelling on the site and leaves it there all of the time that the occupation agreement continues in force, and 3. under which the occupant can occupy the site for no more than 180 days in any 12-month period (in a continuous or broken period), and 4. under which: 1. the occupant agrees, with the consent of the park owner, to be an occupant on a casual basis for at least 12 months, or 2. the occupant has, with the consent of the park owner, been an occupant on a casual basis for at least 12 months. 1. This Act applies whether the relevant occupation agreement was entered into before or after the commencement of this section, unless a particular provision provides otherwise. 2. Subject to sections 14 and 16, if this Act applies to an occupation agreement, it so applies despite the terms of any such occupation agreement or any other contract, agreement or arrangement, whether made before or after the commencement of this section.
3. In Bennett v Gennacker Pty Ltd [2016] NSWCA 89 at [36] per Basten JA with whom Basten P and Ward JA agreed, the relevant time to consider whether the Home Owners had a principal place of residence other than site 17 was on the date the agreement was entered into.
4. The Tribunal accepts the evidence from the Home Owners that they sold their property in Perth in September 2014 and commenced occupation of site 17 in December 2014. The Park Operator has not provided any evidence to refute that the Home Owners did not have a principal place of residence other than site 17 from December 2014.
5. In Hacienda Caravan Park Pty Ltd v Dodge [2018] NSWCATAP 108, the Appeal Panel found: [84] It is clear that the Tribunal's findings of an agreement in this case was based upon the conduct of the parties at the time and subsequently. [85] In the present case the respondent paid rent which was accepted by the appellant for some eight years. The appellant did not and has not demanded the respondent vacate the site and remove his dwelling. In two proceedings brought by the respondent (and others) in relation to excess rent (and which depended upon the RLCC Act applying) the appellant did not contend that the Tribunal lacked jurisdiction to determine that issue because of the absence of any agreement between it and the respondent and to which the RLCC Act applied. The respondent has occupied the site permanently, that is for more than 180 nights in any one year, and for more than 28 continuous nights in any one period without seeking the appellant's permission to do so. Further, site 120 was only approved as a long term site, and was not approved as a long term site.
6. The Park Operator sought to distinguish the application of Hacienda as site 17 was not approved as a long term site. However, the approval from Federation Council dated 6 April 2017 provides for the number of short term and long term site approvals. There is no map attached to the approval to verify which sites are approved as designated for long term occupation. There is no evidence before the Tribunal of the current approval to operate the community or evidence of the approval at the commencement of the Resident's initial occupation of the site.
7. Further, the Tribunal finds that the evidence of a written site agreement for the long term occupation of site 12 inconsistent with the Park Operator's evidence in relation to which sites are designated for long term occupation.
8. The Residential Parks Act 1998 (Parks Act) which was in force at the commencement of the occupation of site 17 by the Home Owners provided: 16A What if there is no written agreement? … (3) A residential tenancy agreement that is not in writing is taken to include the following standard terms: each term set out in the relevant prescribed standard form of residential tenancy agreement (with the blank spaces filled in with appropriate details),each term prescribed by the regulations. (4) …
9. The Tribunal finds that the Home Owners had an agreement under the Parks Act and pursuant to s 6(1) of the RLCC Act, the Home Owners have a site agreement pursuant to the RLCC Act. The Tribunal finds that the Park Operator's acceptance of rent for a period of almost four years, together with numerous proceedings before the Tribunal whereby the Park Operator confirmed the application of the RLCC Act are factors consistent with the application of the Act to the site agreement.
10. Section 5(c) of the RLCC Act confirms that the Act applies whether or not any relevant approval has been obtained under the Local Government Act 1993.

Is the Application brought within time?

1. The Park Operator contends that should the Tribunal make any orders for reimbursement of electricity usage charges; this should be limited to a 12 month period. The Home Owners claim that as there is no time frame under the Act, they should be able to recoup for overcharging from 1 November 2015 to date.
2. There is no prescribed time limit for bringing an application pursuant to ss 85 or 157 of the RLCC Act. The Tribunal therefore has regard to Regulation 23(3) of the Civil and Administrative Tribunal Rules 2014: (3) Unless the Tribunal grants an extension under section 41 of the Act, an application must be made: (a) in the case where enabling legislation specifies the period within which the application is to be made - within the period specified, or (b) in any other case - within 28 days from the day on which the applicant became entitled under the enabling legislation to make the application.
3. The relevant principles applicable to whether or not an extension of time should be granted are set out in Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22. These include: 1. The length of the delay; 2. The reason for the delay; 3. The appellant's prospect of success; 4. The extent of any prejudice suffered by the respondent
4. The Home Owners made the application to the Tribunal on 12 July 2018. This was immediately following receipt of the letter from the Park Operator advising them of a readjustment of the previous nine months of billing for electrical usage.
5. The parties had previous litigation in relation to the Supply Access Charge (SAC) before the Tribunal in late 2017 with a determination handed down on 29 January 2018.
6. The issue relating to electricity charges pursuant to 77(3) has been unsettled until the more recent case of Silva Portfolios Pty Ltd trading as Ballina Waterfront Village & Tourist Park v Reckless [2018] NSWSC 1343 (Reckless) wherein the Supreme Court handed down its decision on 4 September 2018.
7. The length of delay in bringing proceedings in respect of energy bills dated November 2015 is almost three years and therefore significant. However, the Park Operator has been aware of the issue in relation to what electricity usage charge should be as the Park Operator had on their own accord made retrospective adjustments to the Resident's accounts.
8. The Tribunal finds that time should be extended to 12 August 2017 which would allow the Home Owners to recover any overcharging for a 12 month period.

Electricity charges

1. The Park Operator receives a monthly bill from its energy provider, currently Origin Energy. The Origin Energy bill applies differential rates per kWh according to peak, off peak and shoulder use using a "smart meter". The Park Operator in turn issues monthly accounts to the Home Owners using an arbitrary rate applied by the usage ascertained by meter readings at the individual site.

Home Owner's submissions

1. The Home Owners claim that they are being overcharged and not in accordance with s 77(3) of the RLCC Act. The Home Owners claim a refund of all overpaid electricity charges from 1 November 2015 to 30 September 2018 in the amount of $2058.94. In the alternative, the Home Owners claim that they are entitled to a full refund for the period from 1 November 2015 to 31 January 2017 as the Park Operator was not an authorised on-seller at that time. The Home Owners claim that as "Retail Law requires a person to hold a retailer authorisation for retail exemption in order to sell energy and that the Respondent [Park Operator] did not hold an exemption until 31 January 2017": page 6 of Home Owner's submission.
2. The Home Owners suggest two alternative methods for the calculation of usage charges by Home Owners who do not have a "smart meter". The first method was to add the three rates charged by the Park Operator (inclusive of GST and energy losses) and to divide it by three to provide a single rate. The second method proposed was to divide the operator's total energy charge (inclusive of GST and energy losses) by the total number of kWh consumed.
3. The Home Owners submitted that method 1 was the preferred method as it required calculation only once rather than each month as required with the second method. Further, the second method would also have the Home Owners contributing to electricity usage of the common areas of the community.
4. The Home Owners claim that s77(3) only provides for usage charges and network charges, demand charges and renewable energy charges are not to be included in calculating electrical usage. The Home Owners rely on Bavin & Raczkowski v Parklea Operations Pty Ltd trading as Gateway Lifestyle Stanhope Gardens [2018] NSWCAT where the Tribunal adopted this method.

Park Operator's submissions

1. The Park Operator conceded that while it had previously charged the Home Owners the standing offer rate from Origin Energy, as the designated retailer, this was incorrect. In early April 2018 the Park Operator amended the charge to a designated rate, being the peak rate. On 22 June 2018, the Park Operators caused a letter to be sent to the Home Owners advising them of the error in its calculation and advising that "we will be readvising [sic] your previous nine months of your electricity accounts".
2. The Park Operator's submission was that the Home Owners should be charged for usage at the peak rate as it was unable to be determined when the Home Owners used the electricity and that the Home Owners had the option of installing a smart meter which would provide them with similar benefits but had chosen not to do so. The Park Operators submits that this is consistent with the "charge for use" as held by Davis J in Silva Portfolios v Reckless and that the application of any other method as the averaging method suggested by the Home Owners was not fair.
3. The Park Operator's evidence was that they no longer charge capacity and demand charges. However, the Park Operator contends that in accordance with s 77(3) of the RLCC Act the regulator and environmental charges are charged to the Home Owners.
4. The Park Operator's evidence was that they are able to charge network access charges which are different to supply access charges. The Park Operator refers to a document produced by the Independent Pricing and Regulatory Tribunal (IPART). The report has not been produced in full. The report refers to: Electricity- Why is there a service availability charge? Is this a network charge? Many of these costs incurred in supplying small retail customers are fixed. This means that they do not vary with the amount of electricity used by the customer. For example, these include the costs of: Operating a 24-hour-a-day control centre providing an emergency and technical response team operating a billing and accounting systems providing access to the network infrastructure. The service availability charge is not the same as network charges. The network charges include both fixed and variable costs components, so they are incorporated into the service availability charge and the consumption chargers you pay the retailer.
5. The Park Operator canvassed the view of other residents in the residential community and maintains that nine of the eleven residents agree to the current billing method.
6. The Park Operator has provided table of charges to the Home Owners for the period 1 December 2014 to 1 September 2018. This table includes usage and SAC.

Findings

1. The Park Operator did not raise any objection to the amendment of the claim in relation to the issue of a refund of ancillary electricity charges, including the capacity, demand and environmental charges. The Home Owners had included submissions in this regard in the documents provided to the Tribunal and the Park Operator. The Tribunal considers the guiding principle in s 36(1) of the Civil and Administrative Tribunal Act 2013 is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. As the parties were afforded procedural fairness in being able to address the issue, the Tribunal considers that leave should be granted for the Home Owners to amend their claim to include the claim for a refund of the additional charges. Further, the issue relates directly to the issue of what the Park Operator is able to charge the Home Owners for electricity usage pursuant to s 77(3) of the RLCC Act.
2. Electricity charge issues under the RLCC Act are complex owing to the changes in regulation of the electricity market between the passing of the 2013 RLCC Act and its commencement on 1 November 2015: Reckless v Silva Portfolios Pty Ltd t/as Ballina Waterfront Village and Tourist Park [2018] NSWCATAP 80 at [48]-[53] and confirmed in Reckless at [32] .
3. Section 77(3) of the RLCC Act provides: The operator must not charge the home owner an amount for the use of a utility that is more than the amount charged by the utility service provider or regulated offer retailer who is providing the service for the quantity of the service supplied to, or used at, the residential site.
4. In Reckless, His Honour held that In my opinion, s 77(3) is intended to ensure that the operator may not pass onto the home owner a charge for electricity greater than that which the operator has effectively been charged in respect of that home owner. That is supported by the words "is more than the amount charged" in s 77(3). The words do not say "that is more than the amount that could be charged": [42]
5. The site is separately metered and the parties have had previous proceedings before the Tribunal in relation to the supply access charge (SAC) rate and this issue was not canvassed again in these proceedings.
6. In Reckless v Silva Portfolios Pty Ltd t/as Ballina Waterfront and Tourist Village (No 2) [2018] NSWCAT (Reckless (No 2)), the Park Operator obtained an expert report from Ms Maria Pektovic and she was called to give evidence at the hearing. Ms Pektovic was described in her report as a leading energy expert and has "extensive experience in energy management and electricity billing for commercial and industrial businesses". These qualifications were not challenged: para [9] Reckless (No 2).
7. In Reckless (No 2) the Tribunal found that the most accurate method to compensate the resident was to "determine the overall cost of the electricity to the respondent, divide that amount by the total kilowatts used, and apply that figure to the total kilowatts used by the applicant": para [39].
8. This method encompasses all the charges on the accounts that it has received from the utility provider: para [36] Reckless (No 2).
9. Ms Pektovic, the expert witness in Reckless (No 2) acknowledged that this method was not perfect as it is not possible to determine when the Home Owner consumes electricity in the absence of a smart meter. It may be that the Home Owner consumes more electricity at off peak rates than the Park Operator has, and therefore would be charged a greater amount for electricity usage than has been charged by Origin: paragraph [37].
10. in the absence of any accurate method of calculating what the operator has been charged for the owner's electricity usage and in the absence of legislative amendment to the legislation the Tribunal accepts this method.
11. The Tribunal does not have the benefit of any expert to comment on the relationship between the charges and usage, however, the Tribunal finds that as the retailer supplier is the same in this matter it is able to accept that network charges are a component of the cost of electricity. This includes 'Energy Charges', 'Network Charges', ''Regulated Charges', Environmental Charges', 'Metering Charges', 'Retail Charges' and 'Other' including 'AEMO Charge'.
12. From the electricity accounts provided for the Park Operator and the Home Owner's invoices contained in the Home Owner's submissions, the following is a table of this information: Date Overall cost to Park Operator Total kilowatt used Overall cost divided by total kilowatt used Total kilowatt used by resident Overall cost by resident Jun 2017 $3599.40 11,612.192 0.30996732 150 $46.49 Jul 2017 $3047.96 10,431.880 0.29217744 189 $55.22 Aug 2017 $2,917.61 9591.628 0.30418298 189 $57.49 Sep 2017 $2,553.01 7806.472 0.32703762 183 $59.85 Oct 2017 $3,114.45 7519.648 0.41417497 131 $54.26 Nov 2017 $3,518.44 8649.800 0.40676547 127 $51.66 Dec 2018 $3,777.04 9500.020 0.39758232 131 $52.08 Jan 2018 $4,923.78 12990.032 0.37904295 154 $58.37 Feb 2018 $2,374.59 7473.908 0.31771732 139 $44.16 Mar 2018 $3,149.86 10122.848 0.31116342 154 $47.92 Apr 2018 $2,416.32 7476.372 0.32319419 130.33 $42.12 May 2018 $2,631.08 7821.176 0.33640465 130.33 $43.84

1. The invoices from the Home Owners show that the following payments have been made: Date Usage(incl GST) Supply charge Total 1 Oct - 31 Dec 17 128.43 142.692 271.12 1 Jan 18- 31 Mar 18 162.99 139.59 302.58 1 Apr18- 30 Jun 18 142.549 141.141 283.69

1. The Home Owners bear the onus of proof in relation to establishing their claim for compensation. This needs to be supported by probative evidence that supports the monetary claim. The Home Owners have not provided to the Tribunal copies of the electricity accounts beyond May 2018 and have not provided their accounts issued by the Park Operator prior to October 2017. The Tribunal therefore is unable to be satisfied beyond reasonable doubt of overpayment in respect of these periods. The Tribunal limits the compensation claim to the period 1 October 2017 to 30 March 2018.
2. In Reckless (No 2) it was confirmed that the method proposed did not include a service availability charge. However, the "total of electricity charges imposed on the applicant, whether they be a combination of supply and usage charges and a service availability charge, or just supply and usage charges, cannot exceed what the respondent has been charged by Origin": para [31].
3. The Home Owners were charged $113.12 more than the formula for usage from 1 October 2017 to 31 December 2017 and $152.85 more for usage in the period 1 January 2018 to 30 March 2018.
4. The Park Operator is to pay the Home Owner the sum of $265.97 for the period 1 October 2017 to 30 March 2018.

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: 10 April 2019