Levande Pty Ltd v Brady

NCAT Appeal Panel|2023-01-31

Solicitors: Thomson Geer Lawyers (Appellant) File Number(s): 2022/00350791 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: None cited Date of Decision: 07 November 2022 Before: G. Ellis SC, Senior Member File Number(s): RV 22/13898

REASONS FOR DECISION

This is an appeal from a decision of the Consumer and Commercial Division of the Tribunal dated 7 November 2022.
The dispute is between a resident of a retirement village and the operator of the village. The provisions of the Retirement Villages Act 1999 (NSW) ('the RV Act') apply to the dispute. The appellant is the operator and the respondent is the resident.
The salient issues that arise in the appeal involve the findings of the Tribunal that the closure of the serviced apartments building at the village constituted a variation or withdrawal of services or facilities within the meaning of ss 60 and 62 of the RV Act; and the finding of the Tribunal that the operator breached its obligation to repair the service apartments building under s 90 of the RV Act.

Background

The retirement village is located in a northern suburb of Sydney NSW. The village was constructed in 1982. In October 2008, the resident and the (then) operator entered into a retirement villages contract. The resident is currently 95 years of age. At all relevant times in the Tribunal proceedings and this appeal he has been represented by his daughter Ms C. Brady.
The village comprises of the following: 1. 108 independent living units ('ILU'); 2. 48 serviced apartments located within a building separate to the ILU's (' the serviced apartments building). 3. A community centre ('community centre'); and 4. A residential care facility ('nursing home') operated by a healthcare provider who is a separate legal entity to the operator.
The serviced apartments building also contained the resident's dining hall and kitchen, and housed the doctor, podiatrist and hairdresser.
The nursing home is governed by Commonwealth legislation (the Aged Care Act 1997 (C'th)), and the operation of the nursing home does not involve any issue in dispute pertinent to the disposition of this appeal.
The respondent has at all relevant times resided in an ILU at the village. At no time has he resided in the serviced apartment building. We were informed by his daughter at the appeal hearing that for health reasons he is not currently residing at the village. However, there is no dispute that the respondent had standing to bring the Tribunal proceedings that has led to this appeal.
In 2010 the appellant by its former corporate name ('Stockland') became operator of the retirement village.
Since about 2015 the operator has been seeking to redevelop the village. In 2018 the operator submitted a planning proposal to the local council which was rejected. In 2018 the operator sought a rezoning of the land which was unsuccessful.
In 2020 the operator put forward a further planning proposal to the local council. That proposal did not include any serviced apartment building.
In October 2021, the area manager of the operator informed residents the operator did not intend to have any serviced apartments in the redeveloped village.
In late 2021 or early January 2022 the operator organised a termite inspection of the serviced apartment building.
On 5 January 2022, Mr Jackson of Expert Pest Control issued a report after a visual inspection of the building. The report identified that there were live termites present in the ceiling joists, roof bearers and top plates of the roof structure, and that termite damage was "extensive too severe."
In early 2022, the serviced apartment building was damaged by heavy rain, including water ingress from the roof.
In March 2022, the operator obtained a dilapidation report from Ms Tse of J.C. Engineers Pty Ltd. The report states that Mr Refalo of J.C. Engineers Pty Ltd performed a "visual inspection" on 10 March 2022.
The report stated that there was tarpaulin on a section of the roof, with sandbags locating the tarpaulin. The report also stated that there were areas of the roof where termite damage was visible; and there were areas of rotted timber roof frame affecting the structural integrity of the roof.
The report stated as follows (at p 13): 8. Recommendations This report presents site photographs and a summary of the defects found during this dilapidation inspection. The following recommendations are proposed for the above-mentioned defects: 1. The roof truss needs to be designed compliant with the Building Codes of Australia by qualified Structural Engineer. 2. The damaged timber members of the roof need to be replaced by a qualified builder. 3. The timber members are to be stored carefully before installing them, in a climate controlled area where there is zero affinity to get attacked by termites. 4. Treated timber wood is to be used for construction. 5. The opening is to be covered with tiles or any material similar to the existing roof. This would prevent rainwater pouring into the roof space and causing mould formation on the timber. 6. All possible points for termite entry should be treated and closed off. 7. It is highly recommended to note the changes in defects and should the dynamics or severity of these defects change in any way, please contact an engineer as soon as practicable to undertake further investigation. 8. Prior to opening the dining hall and kitchen, termite inspection to be undertaken. Review from JCE for review and to advise re-opening.
On 15 March 2022, the operator obtained a further pest inspection report from Mr Jackson which involved an inspection using equipment including thermal imaging equipment. The report again stated that there was "extensive to severe" termite damage in the roof void above the dining area of the building, with live termite activity present. There was also termite activity and damage in other areas of the building, including above Units 1-6 and that termites had "accessed the structure from the Stanhope Drive elevation of the serviced apartments (units 1-17) damage from old and current infestations is extensive". The report recommended measures including a termite treatment and further inspections every 3 months.
The pest inspection report of Mr Jackson dated 15 March 2022 had not been filed and served in the Tribunal proceedings (Tribunal's reasons at para. [36]).
On 23 March 2022 Mr Nielsen of J.C. Engineers Pty Ltd sent a "letter of advice" to the operator, which is 2 pages in length. The letter states that reference documents include the pest inspection report dated 5 January 2022; the site photos taken during the site visit of J.C. Engineers Pty Ltd dated 10 March 2022; and the dilapidation report. The letter states as follows: Recommendations Vacate the premises as soon as possible. Remove the hazards that that are attracting the termites, such as; -Block all holes near the wall penetrations. -Dry the moist timber -Replace the damaged timber affected by termite attack after getting a qualified Structural Engineer design. -Remove the vegetation near the structure. Conclusions IMPORTANT: Any remediation works are to be carried out after the place has been vacated by the persons living there. Based on the inspection conducted and report provided by Expert Pest Control, it is essential to carry out the rectification as soon as practicable. If there is a severe weather activity in the future the building could fail causing injuries and high expenses. …
On 25 March 2022, the operator wrote to residents in respect of the serviced apartment building. The letter relevantly stated as follows: … A structural engineer assessed the dining room and hallway and reported severe water damaged caused by the extreme weather event in Sydney last week. We were also advised that the apartment roof is not sound and the building is unsafe for ongoing habitation. Since then, Stockland (sic) has been working closely with the 15 affected residents and their families to relocate residents to alternative accommodation with minimal disruption. It has been a busy week, and we are pleased to confirm that all residents will be set up in their new homes. Services apartment residents relocated within Lourdes will continue to receive the same level of service and dining facilities will be set up in the community centre. The serviced apartment building will be closed and made secure. We will now consider the next steps as part of our broader village redevelopment plans. As you know Stockland (sic) has been working with Lourdes residents and various authorities since 2016 on plans to redevelop the village. We continue to work with the Department of Planning and Environment (DPE), and we expect a determination over the coming months so the Planning Proposal can be placed on public exhibition for community feedback. At that time, the project team will start detailed discussions with interested residents regarding the inclusions in the redeveloped village. This feedback would then be incorporated, where possible, into the more complex Development Application (DA). We will make residents aware of the DPE determination as soon as we receive their advice. …
From about March 2022 the operator commenced relocating residents in the serviced apartments. Approximately 15 residents were in the serviced apartments. Some were relocated to ILU's within the village. Others were relocated to other villages of the operator or nursing homes.
On 30 March 2022, the resident filed proceedings in the Tribunal.
The application asserts that since 2017 the operator had adopted a policy of not "re-selling" units (sic) in the village, leading to there being 10 residents in the serviced apartments out of 48 individual residences; and occupancy of the ILU's being approximately 60%. The resident asserts that the operator was not maintaining the village and was allowing it to "die on its feet" with a view to making it easier to redevelop and/or sell the village.
The application states that the applicant had objected to the proposed demolition of the serviced apartment building and that the building should be repaired. The applicant asserted that the operator was obliged to repair the serviced apartment building under ss 62 and 93 of the RV Act; with the failure to repair the serviced apartment building constituting an unlawful variation of services or facilities under s 62 of the RV Act.
The application also referred to the owner's obligations if a residence contract was terminated by frustration under s 132 of the RV Act.
On 1 April 2022, the operator wrote to residents with a letter entitled "Resident Update-The Serviced Apartment Closure & Ongoing Service Provision". That letter stated, in summary: 1. The operator had "investigated the possibility of performing urgent rectification works" to allow residents to continue to reside in the serviced apartments, but had decided not to perform rectification works. The reasons provided were length of time to perform the rectification of the building and the intention of the operator to redevelop the village. 2. For safety reasons involving the lack of structural integrity of the building the operator was no longer going to provide services from the serviced apartment building. 3. Residents in the serviced apartments had been relocated. 4. The same level of services would be provided to serviced apartment residents who had relocated within the village. Such services included meals that would now be provided "in the newly located dining room next to the servery in the community centre." Washers and dryers would be provided in the ILU's to which the serviced apartment residents were relocated. 5. A golf buggy would transport residents from the ILU's to the community centre. 6. If residents - which included the respondent - did not wish to consume meals at the community centre, meals would be delivered to their rooms. 7. The doctor, podiatrist and hairdresser would be relocated from the serviced apartment building to an ILU until. 8. Cards, scrabble and other games would now be in the billiards room of the community centre. 9. Residents would be transported by golf buggy throughout the village based on availability of staff.
On 11 August 2022, the operator obtained a report from Mr Akil, structural engineer, of JCE Structural. The report states that a site inspection was performed on 10 August 2022; and Mr Akil also referenced the J.C. Engineering dilapidation report of March 2022.
The report states that the staff room of the nursing home was attached to the serviced apartment building. The staff room building and units 1-4 were observed to have sagging and waterlogged ceilings. It was asserted that the building had deteriorated since March 2022. The report stated: … Conclusions and Recommendations from the Inspection Based on the abovementioned details, considering the combination of suspected footings differential settlement, the observations mentioned in the "Review of Inspection," along with the lack of information regarding the subsurface conditions in the footings, residual strength of existing structure (sic). Furthermore, the re-distribution of stresses due to the above-mentioned sag/bow, broken member, changes in support/lateral restraint for existing structural members would generate additional load stresses due to the updated behaviour of the structure due to load path change (for gravity and lateral loads). Accordingly, it is determined that the extent of the damage to the members of the structure and the rate of progressive deterioration is unsafe for occupancy and requires immediate demolition. Given the nature and critical conditions of these damages, the potential collapse would be unpredictable. However, the direction and manner are uncertain. As an immediate measure, the Killara Glades Aged Care staff room should be evacuated and no longer be occupied. It is recommended that the entire structure be demolished, redesigned and rebuilt by a suitable engineer and building contractor in accordance with relevant Australian Standards. A controlled demolition would ensure the safety of the occupants. Exclusion zones should also be implemented to ensure all residents and staff are away from the site in the instance of a catastrophic failure of the building at the time of demolition. The proposed demolition plan is shown in Figure 10 below. …
On 16 August 2022, the local Council issued an emergency order under s 121D of the Environmental Planning and Assessment Act 1979 (NSW). The terms of the order directed the operator to: 1. Cordon off and secure the section of the serviced apartment building and perform remedial/repair work to the roof in accordance with the J.C. Engineers Pty Ltd reports of March 2022 and 10 August 2022. 2. Upon completion of the remedial/repair works, provide a certificate of structural adequacy for the roof structure from a structural engineer. 3. A development application must be lodged for any demolition and reconstruction work for the building as the property is "located in a heritage conservation area and identified as containing biodiversity."
On 30 August 2022, the operator filed a Development Application with the local Council to demolish the serviced apartment building. The estimated cost of the work is identified in the Development Application as $925,345. As at the time this appeal was heard no Development Consent has been granted.
After a procedural directions hearing in the Tribunal where directions were relevantly made for the parties to file and serve documentary evidence, the Tribunal hearing occurred on 14 October 2022. The decision was reserved, and a written decision was published on 7 November 2022.

The Decision of the Tribunal

Relevantly, the Tribunal made the following orders: 1. The operator rectify roof damage and termite damage to the serviced apartment building in accordance with the scope of works contained in the J.C. Engineering Pty Ltd report dated 23 March 2023 and the bullet points set out at the foot of page 2 of the report of JCE Engineers Pty Ltd dated 11 August 2022, and upon completion of that work, obtain a certificate of structural adequacy from JCE Engineers Pty Ltd for the damaged roof structure. 2. By 5 December 2022, the operator convene a meeting of the residents for the purpose of considering (a) whether they consent to the serviced apartment building being closed and, if so (b) whether they consent to any resulting variation in the services provided by the operator. 3. If the meeting of the residents opposes the close or the serviced apartments building, the operator is to reinstate the facilities and services of that building. 4. Clause 15.1 of Mr Brady's Deed of Loan Licence dated 24 October 2008 be amended to replace the words 'Hostel A' with 'Hostel B'.
In a written decision the Tribunal set out the provisions of ss 60, 61, 93, 128 and 132 of the RV Act. At paragraphs [13]-[34] of the decision the Tribunal set out the evidence of the parties; and the submissions of the parties. At para [35]-[36] the Tribunal noted that both parties had attempted to file evidence and make submissions after the conclusion of the hearing. Both parties were refused leave to re-open their cases and adduce further evidence.
Part of the evidence sought to be adduced by the operator that had not been filed and served in the proceedings was the pest inspection report of Mr Jackson dated 15 March 2022.
At paragraph [44] of the reasons the Tribunal set out conditions 8 and 9 of the Development Consent the Local Council had issued in respect of the original construction of the village. Relevantly, condition 9 stated: … (b) Occupiers of Self-Care Units shall be given priority to purchase or reside in Hostel Units as they become available. … (d) Domiciliary assistance such as meals, laundry and home help shall be available to all residents as and when required including in Self-Care Units. … (f) Prior to the occupation of any part of the development, documentary evidence shall be furnished to Council of the existence of a Contractual Commitment by the proprietor or operator of the development, to provide the facilities referred to in this condition, to residents on a continuing basis.
At paragraphs [45]-[50] of the reasons the Tribunal set out the relevant terms of the contract between the resident and the operator (described as a "Deed of Loan Licence").
Part 6 of the contract relevantly stated as follows: General Services 6.1.1 The Company shall provide to all residents of the Retirement Village the following general services: (a) management and administrative services, (b) gardening, (c) continuously monitored emergency call system, (d) removal of refuse and garbage. Optional Personal Services 6.1.2 The Company shall provide to the Resident the following additional or optional services available to the Resident on a "user pays" basis: (a) electricity for the use of the approved appliances in the unit; (b) weekly cleaning of common areas; (c) the use of the village bus for recreational activities and outings. … Facilities 6.1.3 The Company shall provide the following facilities within the village which are available to all residents of the retirement village during times as may be determined by the Company; (a) chapel; (b) amenities centre; (c) craft room; (d) library; (e) medical consulting rooms. Reduction, Withdrawal or Removal of Services 6.1.3 (sic) Services and facilities may be reduced, withdrawn or otherwise varied but only if the residents of the retirement village pass a special resolution to the relevant effect in accordance with the Act. If services or facilities are so reduced, withdrawn or otherwise varied, the Resident may not claim compensation against the Company.
The Tribunal noted in its reasons that the evidence the operator was relying upon was predominantly documentary evidence attached to a witness statement of Mr Ross (Regional Manager of the operator) dated 2 June 2022. Mr Ross was cross examined at the Tribunal hearing. The Tribunal stated at para. [24] of its reasons: Cross-examination of Mr Ross revealed that the remaining SA residents were currently being housed in ILU's. Although he said there was an intention to continue to provide the relevant services despite the closure of the SA building, questioning revealed that those residents had been placed on rental agreements and would be leaving in April 2023, at which time they would need to find accommodation elsewhere. On the question of how services would be provided for ILU residents if there were no residents and no staff, Mr Ross suggested third party home care providers would be used and that the "operations team would help to provide those services." When asked how the operator would continue to comply with conditions 8 and 9 of the 1982 development approval, Mr Ross said that would be "through home care from third party providers" but accepted that there was a need to confer with residents.
Sections 60-62 of the RV Act state as follows: 60 Variation in services or facilities provided at village (1) The operator of a retirement village must propose a variation in the services and facilities provided at the village if - (a) a minimum of 5 residents, or 10% of the residents, (whichever is the greater) of the village (or, if the village has fewer than 10 occupied residential premises, residents from a majority of the occupied residential premises), or (b) the Residents Committee of the village, requests the operator in writing to do so. (2) The operator may propose a variation in the services and facilities provided at the village even if there has been no request under subsection (1). (3) The services and facilities provided at the village are not to be varied as proposed unless the residents of the village, by a special resolution, consent to the variation. If consent is given, the operator may vary the service or facility in accordance with the consent as soon as is practicable (unless the resolution provides that the variation is to take effect on a specified later date). (4) An operator who receives a request under subsection (1) must call a meeting of the residents of the village, to be held no later than 28 days after the receipt of the request, for the purpose of considering a special resolution concerning the proposed variation. (5) A resident is not entitled to vote on the special resolution unless the service or facility concerned is (or is proposed to be) available to the resident. (6) Regardless of the terms of any village contract, the operator does not breach the contract by varying services or facilities in accordance with this section. (7) If the operator considers that a proposed variation in services or facilities under this section will impose a cost on the operator additional to that allowed for in the approved annual budget, the operator must seek the residents' consent to an amendment to the approved annual budget. (8) Section 115 does not apply to or in respect of a consent sought under this section. (9) If the residents refuse to consent to the amendment, section 53 (3)-(5) applies to such a refusal in the same way that it applies to a refusal under that section. (10) In this section - services and facilities means services and facilities provided by or on behalf of the operator. variation in a service or facility includes the following - (a) a reduction in the service or facility, (b) the withdrawal of a service or facility, (c) an increase in a service or facility, (d) any other change in a service or facility, (e) the provision of a new service or facility. 61 Operator not to reduce or withdraw certain services and facilities If a development consent for a retirement village requires that a particular service or facility be provided for the life of the village, the operator of the village must not reduce or withdraw that service or facility (despite any consent of the residents) unless the development consent is amended so as to omit or vary that requirement. 62 Consequence of unlawful variation in services or facilities (1) If an operator reduces or withdraws, or permits the reduction or withdrawal of, a service or facility otherwise than in accordance with section 60, a resident of the village concerned may apply to the Tribunal for an order for any one or more of the following - (a) the reinstatement of the service or facility concerned, (b) the payment of compensation in relation to the reduced or withdrawn service or facility, (c) a reduction in the recurrent charges payable by any one or more of the residents, (d) the payment of the whole or part of those recurrent charges to the Tribunal until the service or facility concerned is reinstated. (2) In determining an application made under this section, the Tribunal may make the order sought or any other order of a kind set out in subsection (1).

Tribunal's Findings As To Whether Closure of the Serviced Apartment Building Was a Variation Of Services of Facilities At the Village

The Tribunal made a series of factual findings at para [57]-[61] of the decision. Such factual findings included that the Emergency Order of the local Council dated 16 August 2022 was not evidence the serviced apartment building was incapable of repair, because the order stated that repairs should be performed; and, if the operator sought to have the building demolished, it would need to obtain a Development Consent. Rather, the Tribunal interpreted the order to mean that the building was capable of repair; and the order was not in substance an order that the building be demolished.
The Tribunal also noted that the reports of J.C. Engineers Pty Ltd that the operator relied upon were not reports compliant with Practice Note 3 Expert Witness Code of Conduct of the Tribunal. The Tribunal stated at paragraph [60] that to the extent there was any conflict between the report of J.C. Engineers Pty Ltd that the building should be demolished and the terms of the Emergency Order the Tribunal "preferred the view (sic)" of the local Council.
The Tribunal found at para [64] that there was "no evidence that it would be more cost effective" to "replace" the serviced apartment building.
The Tribunal found at paras [71]-[76] of the decision that: 1. To perform repair work on the serviced apartment building would do no more than already ordered by the local Council. 2. The operator committed a "deliberate delay" in the period between March and August 2022 which "permitted the damage to increase to a point where an engineer who had previously recommended rectification suggested demolition". It was "undesirable" that the Tribunal would decline to make an order under s 128 of the RV Act, "where the evidence suggests delay motivated by a desire to avoid the maintenance obligation imposed by the RVA and instead to bolster the case for redevelopment". 3. The letters sent to residents on 25 March 2022 and 1 April 2022 "included statements for which the evidence does not reveal there was a reasonable basis at that time". A "reasonable inference" to be drawn from this is that the operator "gave redevelopment a higher priority than maintenance and did not let accuracy get in the way of the redevelopment objective." 4. The affected area of the roof of the serviced apartment building was not sufficiently damaged that it could not be repaired. 5. The local Council Emergency Order was focussed upon the repair of the serviced apartment building, not its demolition. 6. Even if the pest inspection report of 15 March 2022 was admitted into evidence it would make no difference to the factual findings or outcome.
In respect of withdrawal of services, the Tribunal noted at para [77] that "there are two aspects that need to be considered; whether the applicant has a right to transfer to the serviced apartment building, and the consequence of the closure of the that building".
The issue of the right to transfer arose because the operator argued that Mr Brady had not sustained any variation, withdrawal or reduction of services personally, as he resided in an ILU and his contract only referred to "transfer to Hostel A," which is the part of the village that is now the nursing home.
Mr Brady asserted that he may, at some point in time in the future, seek to transfer to the serviced apartment building, and consequently he was affected by the close of the serviced apartment building and the associated facilities and services that were contained in that building.
On this issue, the Tribunal found as follows at paras [79]-[85] of the decision: 1. Condition 8 of the Development Consent for the village required the village to be used for providing aged care accommodation "for the life of the development" and Condition 9 (b) required that occupiers of self-care units be "given priority to purchase or reside in Hostel Units as they become available". 2. By reason of s 61 of the RV Act, the operator could not reduce or withdraw the facility of "hostel accommodation" without amendment of the Development Consent, irrespective of whether residents consented to the reduction or withdrawal. The original Development Consent of the village had not been amended. 3. Clause 6.1.3 of Mr Brady's contract required a special resolution of residents be passed before any facility was withdrawn, and no special resolution of residents had been passed. 4. If there was a withdrawal of a facility, s 62 (1) (a) of the RV Act permits the Tribunal to make an order for the reinstatement of the service or facility concerned. Section 128 (1) (b) of the RV Act permits the Tribunal to make an order that varies the provisions of the village contract which conflicts with the RV Act. 5. The Tribunal rejected the operator's submission that the right to transfer under the terms of Mr Brady's contract was "subject to availability" and that "availability" was extinguished if the serviced apartment building was no longer available because the building was uninhabitable or demolished. The Tribunal found the word "available" in Clause 15.1.1 of the village contract referred to "whether there is a vacancy in the hostel and not whether the hostel is operating or exists." In any event, s 61 of the RV Act applied as did Clause 6.1.3 of the village contract. The Tribunal found that Mr Brady was "entitled to an order made to vary his contract by changing the words "Hostel A" in Clause 15.1.1 to read "Hostel B" which would "achieve compliance with conditions 8 and 9 (b) of the development consent (sic)".
The "second" issue regarding whether services had been withdrawn concerned whether the operator was providing equivalent services despite the serviced apartment building being closed and residents of that building relocated.
The Tribunal dealt with that issue at para [92]-[98] of the decision. The Tribunal found that depriving Mr Brady of the contractual right to apply for a transfer to the serviced apartment building amounted to a variation of the facilities provided at the village. The operator could only close the serviced apartment building if it had complied with the requirement in s 60 (3) of the RV Act that a resolution had been passed by residents (with a 75% majority) consenting to the proposal. As this had not occurred, the Tribunal found that an order should be made under s 128 (1) (a) of the RV Act that the operator hold a meeting to consider whether the residents approve of the serviced apartment building not being repaired.
The Tribunal considered whether the "current arrangements" were a variation of services at para [98] of the decision. It did not make any finding on this issue, because s 60 (3) of the RV Act applied to any "proposed variation" and whether or not there is a variation to services will be dependent upon the outcome of the meeting to approve the closure of the serviced apartment building.
The Tribunal stated at para [100]-[101] that there was no sufficient reason not to make an order under s 60 (1) (a) of the RV Act for the operator to reinstate services and facilities by repairing the building. The Tribunal stated at para [101]: …The fact that residents were evacuated from the SA building on a permanent basis, when it was only necessary for them (and perhaps, even only some of them) be relocated on a temporary basis while maintenance work was undertaken, does not constitute a valid reason for the Tribunal not to make an order of the kind sought by the applicant…

Failure to Perform Capital Maintenance

Section 93 of the RV Act states as follows: 93 Obligations of operator with respect to certain capital maintenance or replacement (1) The operator of a retirement village is to maintain each item of capital for which the operator is responsible in a reasonable condition having regard to the following - (a) the age of the item, (b) the prospective life of the item, (c) the money paid to the operator by the residents under a village contract (including ingoing contributions). (2) If it is not practical to maintain an item of capital in accordance with this section, the operator may replace the item. (3) The operator of a retirement village must carry out the maintenance of, or replace, an item of capital for which the operator is responsible within a reasonable time after becoming aware of the need for the maintenance or replacement of the item.
"Item of capital" is defined in s 4 of the RV Act as follows: item of capital means - (a) any building or structure in a retirement village, and (b) any plant, machinery or equipment used in the operation of the village, and (c) any part of the infrastructure of the village, and (d) any other item prescribed by the regulations, but does not include any item excluded from this definition by the regulations.
Regulation 5 of the Retirement Villages Regulation 2017 (NSW) ('the RV Regulation') further defines "item of capital" as including: 5 Definition of "item of capital" For the purposes of paragraph (d) of the definition of item of capital in section 4 (1) of the Act, the following items in a retirement village or residential premises within a retirement village are prescribed to be items of capital - (a) fixtures (for example, bench tops, built-in cupboards and wardrobes, floor coverings, hot water systems and stoves), (b) fittings (for example, light fittings, taps and sanitary fittings), (c) furnishings (for example, curtains and blinds), (d) non-fixed items (for example, whitegoods, portable air conditioners, fans, tables and chairs).
At paragraphs [64]-[76] of the Tribunal's reasons it made findings in respect of the operator breaching its obligation under s 93 of the RV Act and why it was exercising its discretion under s 128 of the RV Act (which contains the type of remedies the Tribunal may order for breach of the Act or the village contract) that the operator repair the serviced apartment building.
The factual findings regarding breach of s 93 of the RV Act are summarised as follows: 1. There was no evidence that it would be more cost effective to replace the serviced apartment building rather than repair it, or for it to be demolished without replacement (para [64]); 2. The reference in the pest inspection report of 5 January 2022 that there was "old damage" was evidence of a longstanding failure to keep and maintain the building in a reasonable state of repair; and the operator had not conducted repairs after the report of 5 January 2022 (para [65]); 3. Seven months after the structural engineer had recommended repairs "as soon as practicable" no repairs had been performed; and although there was no evidence of the cost of repairs it was "inconceivable" the costs of repairs would be greater than the cost of demolition in the amount of $925,345 identified by the operator in the Development Application to the local Council (para [66]). 4. Although there was no evidence regarding the time to repair, there was also no evidence to suggest that redevelopment would be achieved more quickly than repair. The local Council's emergency order had given a timeframe for repairs of 30 days (para [67]). 5. The operator did not intend to repair the serviced apartment building and allowed it to fall into a state of disrepair as part of its longstanding intention to redevelop the village without the serviced apartment building (paras [68]; [71]).
As discussed previously, the Tribunal at paragraphs [70]-[76] set out its reasons as to why it was not only satisfied the operator was in breach of its obligation to maintain and repair an item of capital under s 93 of the RV Act, but why it was exercising its discretion under s 128 to order repairs of the existing building. Those reasons were, in summary, that there was no reason why the operator could not repair the existing building and claims by the operator that it was not financially viable to do so were not supported by any evidence. The operator had, by its inaction in performing repairs, sought to advance its intention to redevelop the village.
The Tribunal also made brief reference to ss 132 and 136 of the RV Act. Section 132 of the RV Act allows a resident or operator to issue a notice of termination of the village contract if residential premises in a retirement village become wholly or partially uninhabitable, or are destroyed, or cease to be able to be lawfully used, or are acquired by an authority by way of compulsory process. However, the Tribunal pointed out that s 132 of the RV Act only applies to uninhabitability "otherwise than as a result of a breach of a village contract" and the contract between the parties contained the obligation to keep capital items in a state of good repair. In any event, s 132 of the RV Act involved termination of a village contract, not a resident seeking that repairs be performed.
Section 136 of the RV Act involves an operator applying to the Tribunal to terminate a village contract in circumstances where, for the purpose of improving the village, substantial works are required such that vacant possession should be given; or it is appropriate the land of the village be used for a purpose other than a retirement village. However, that provision requires the village to give the resident a minimum of 12 months' notice and, as the Tribunal pointed out, involves termination of the contract not an order sought by an existing resident that repairs be performed.

Scope and Nature of Appeals

Internal appeals may be made as of right on a question of law, and otherwise with leave (that is, the permission) of the Appeal Panel: s 80 (2) of the Civil and Administrative Tribunal Act 2013 (NSW) ('the NCAT Act').
Internal appeals involve consideration of whether there has been any error of law; or any error other than an error of law sufficient to grant leave to appeal under cl. 12 of sch. 4 of the NCAT Act.
An appeal is not simply an opportunity for a dissatisfied or aggrieved party to re-argue the case they put at first instance: Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 at [10].
In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 ('Prendergast') the Appeal Panel set out at [13] a non-exclusive list of questions of law: 1. Whether there has been a failure to provide proper reasons. 2. Whether the Tribunal identified the wrong issue or asked the wrong question. 3. Whether a wrong principle of law had been applied. 4. Whether there was a failure to afford procedural fairness. 5. Whether the Tribunal failed to take into account relevant (i.e., mandatory) considerations. 6. Whether the Tribunal took into account an irrelevant consideration. 7. Whether there was no evidence to support a finding of fact; and 8. Whether the decision is so unreasonable that no reasonable decision-maker would make it.
The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl. 12 (1) of sch. 4 of the NCAT Act. In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that: 1. The decision of the Tribunal under appeal was not fair and equitable; or 2. The decision of the Tribunal under appeal was against the weight of evidence; or 3. Significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
In Collins v Urban [2014] NSWCATAP 17 ('Collins v Urban'), the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of Cl. 12 (1) of Sch. 4 may have been suffered where: … there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance.
Even if an appellant from a decision of the Consumer and Commercial Division requiring leave to appeal has satisfied the requirements of cl. 12 (1) of sch. 4 of the NCAT Act, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80 (2) (b) of the NCAT Act.
In Collins v Urban, the Appeal Panel stated at [84] that ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed.
Even if the appellant establishes that it may have suffered a substantial miscarriage of justice in the sense explained above, the Appeal Panel retains discretion whether to grant leave under s 80 (2) of the NCAT Act. The appellant must demonstrate something more than the Tribunal was arguably wrong (Pholi v Wearne [2014] NSWCATAP 78 at [32]).

Grounds of Appeal

The appeal was filed on 21 November 2022, and is within the time period prescribed under r 25 of the Civil and Administrative Tribunal Rules 2014 (NSW) for the filing of an appeal from a decision of the Consumer and Commercial Division of the Tribunal.
A stay of the order of the Tribunal that the operator repair the serviced apartment building was granted by the Appeal Panel on 21 December 2022, subject to various conditions.
In its written submissions of 22 December 2022, the operator identified that it was on pressing two grounds of appeal that were identified in the Notice of Appeal. No leave was sought to appeal under cl. 12 of sch. 4 of the NCAT Act.
The appeal grounds are based on a question of law in respect of the Tribunal's findings and interpretation of ss 93 and 62 of the RV Act.
The operator's submissions are summarised as follows:

-The Tribunal erred by: 1. Reversing the onus of proof. The resident bore the onus of proving on the balance of probabilities that the operator had breached s 93 of the RV Act. The Tribunal acknowledged that there was no evidence of the cost of repairs; the cost of replacing the serviced apartment building; the time that it would take to perform repairs; and the practicality of "maintaining" (sic) the serviced apartment building. The Tribunal had reversed the onus of proof by, in effect, taking the position that the operator had to provide evidence and prove it was not in breach of s 93. 2. Failing to take into account the matters prescribed by s 93 of the RV Act and cl. 8.1.1. of the village contract. Those provisions required the Tribunal to have regard to the age and prospective life of the serviced apartment building and the money paid to the operator by the residents under the village contract. The Tribunal did not consider such mandatory considerations. The Tribunal failed to take into account: 1. The evidence of the operator regarding the age and prospective life of the serviced apartment building. 2. The contributions that could have been made by residents of the village as a whole and, in particular, the 15 residents of the serviced apartments who had vacated the building. 1. Finding that the serviced apartment building was a "facility." The serviced apartment building is "a complex containing residential premises." The "facilities" offered by the operator are what is identified in the village contract. The RV Act distinguishes between "residential premises" (e.g. s 5 of the RV Act) and "services or facilities that are made available to residents" (e.g. s 17 of the RV Act). The closure of the serviced apartment building was not a variation of a service or facility, and s 60 of the RV Act did not apply. If there was no breach of s 60 of the RV Act, there was no basis for making an order under s 128 (1) (a) of the RV Act. 2. Finding that the resident was entitled to an order under s 62 of the RV Act. There was no withdrawal or reduction of a service or a facility. The closure of the serviced apartment building cannot be characterised as the reduction or withdrawal of a service or a facility as the serviced apartment building was not a service or facility. The Tribunal had no power to order the reinstatement of the building under s 62 of the RV Act. Further, the dining room and activities room facilities were not withdrawn or reduced, they were merely relocated.

In its submissions in reply, the operator also submitted that the serviced apartment building itself did not form part of the conditions in the Development Consent, but that the conditions involved (a) a "contractual right to receive priority to enter into a and reside in a Hostel Unit subject to availability;" and (b) "a right to receive domiciliary assistance" but not that the serviced apartment building would exist for the duration of the life of the village.

Admission of Fresh Evidence

At the appeal hearing, both parties sought to rely upon fresh evidence. The operator relied upon an affidavit of Ms Fiona Russell, Area Manager of the operator, dated 24 November 2022. The resident relied upon an email from his daughter (who represented him in the proceedings before the Tribunal and in the appeal) dated 31 January 2023 in response to the affidavit of Ms Russell
The fresh evidence sought to be relied upon involved the budget of the village; the expenditure of the village; and the number of staff that would be required to be present if the serviced apartment building remained open. That evidence was sought to be relied upon by the operator to support its argument that it was not in the financial interests of residents to repair or replace the serviced apartment building.
We are not satisfied that such evidence is significant new evidence that was not reasonably available to either party as at the date of the Tribunal hearing under cl. 12 (1) (c) of sch 4 of the NCAT Act applying the principles set out in Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111 at [19]-[26]. Leave to admit the evidence is not granted.
In any event, even if the evidence was admitted, it would not have changed our views about the legal issues that are the subject of this appeal.

Section 93 of the RV Act-The Obligation to Repair or Replace

Interpretation of s 93 of the RV Act involves the application of principles of statutory interpretation. In Project Blue Sky v ABA [1998] HCA 28; 194 CLR 355, Brennan CJ stated at [78]: However, the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction[56] may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning. In Statutory Interpretation, Mr Francis Bennion points out[57]: "The distinction between literal and legal meaning lies at the heart of the problem of statutory interpretation. An enactment consists of a verbal formula. Unless defectively worded, this has a grammatical meaning in itself. The unwary reader of this formula (particularly if not a lawyer) may mistakenly conclude that the grammatical meaning is all that is of concern. If that were right, there would be little need for books on statutory interpretation. Indeed, so far as concerns law embodied in statute, there would scarcely be a need for law books of any kind. Unhappily, this state of being able to rely on grammatical meaning does not prevail in the realm of statute law; nor is it likely to. In some cases the grammatical meaning, when applied to the facts of the instant case, is ambiguous. Furthermore there needs to be brought to the grammatical meaning of an enactment due consideration of the relevant matters drawn from the context (using that term in its widest sense). Consideration of the enactment in its context may raise factors that pull in different ways. For example, the desirability of applying the clear literal meaning may conflict with the fact that this does not remedy the mischief that Parliament intended to deal with." (footnotes omitted)
By reason of the definition of "item of capital" in s 4 of the RV Act, the serviced apartment building was an item of capital. It is clearly a "building or structure" in the village.
The operator had an obligation under s 93 (1) of the RV Act to "maintain" the serviced apartment building "in a reasonable condition" having regard to the (a) age of the building; (b) the prospective life of the building; and (c) the money paid to the operator by the residents under a village contract (including ingoing contributions).
That obligation to maintain is qualified by s 93 (2) of the RV Act. If it is "not practical to maintain" the item of capital, the operator may replace the item.
However, s 93 (2) of the RV Act does not refer, at any point, to the operator refusing to repair or replace the item of capital. The discretion in the operator to "replace" the item of capital only arises if it is "not practical" to maintain the item of capital "in accordance with this section."
Further, in respect of the obligation to keep an item of capital in a state of "reasonable condition" s 93 (3) of the RV Act states that the operator "must" carry out the maintenance or replacement of the item of capital "within a reasonable time after becoming aware of the need for the maintenance or replacement of the item".
Section 93 involves the item of capital being "repaired" or "replaced". In the context of the serviced apartment building, that means the building either needed to be repaired, or if by reason of s 92 (2) it fell within the discretion of the operator to replace the building. By reason of s 93 (3) of the RV Act, the repair or (if s 93 (2) was applicable) replacement of the building had to occur within a reasonable period of time of the operator becoming aware of the need to repair or replace.
The definition of "capital maintenance" in s 4 of the RV Act includes repair. The relevant definitions are as follows: capital maintenance means works carried out for the purpose of repairing or maintaining an item of capital and includes works prescribed by the regulations as being capital maintenance, but does not include works that are prescribed by the regulations as not being capital maintenance. capital replacement means works carried out for the purpose of replacing an item of capital, but does not include capital maintenance.
The operator did not repair the serviced apartment building, nor did it replace it. Moving services or facilities such as the dining room and games room within the serviced apartment building to another part of the village is not "repair" or "replacement" of the building. At no point in time has the operator ever asserted that it intended to demolish the serviced apartment building and rebuild it with an equivalent building. It is clear from the evidence before the Tribunal and the submissions of the operator at both the hearing before the Tribunal and in the appeal hearing that the operator has no intention at any relevant time of replacing the serviced apartment building, with the building to remain "closed" and a Development Application on foot to demolish the building.
Moving residents out of the building and relocating services from the building is not a "replacement" of the item of capital, being the serviced apartment building itself. Reconstruction of an equivalent building would be a "replacement," but that has not occurred nor does the operator propose for it to occur.
The Tribunal in its decision did not refer to s 96 of the RV Act. That provision states: 96 Tribunal may make orders for capital maintenance and replacement (1) If a resident of a retirement village is of the opinion that the operator of the retirement village is not maintaining or replacing items of capital for which the operator is responsible when necessary, the resident may apply to the Tribunal for (and the Tribunal may make) an order directing the operator - (a) to carry out specified maintenance of an item of capital within the time specified in the order, or (b) to replace a specified item of capital within the time specified in the order. (2) If the operator of a retirement village is of the opinion that a resident of the retirement village has caused damage to an item of capital for which the operator is responsible, the operator may apply to the Tribunal for (and the Tribunal may make) an order directing the resident to reimburse the operator for the cost of the maintenance or replacement of the item of capital as a result of the damage. (3) Subsection (2) does not apply to damage caused by fair wear and tear.
There are similarities with the obligation under s 93 of the RV Act and the obligation of a landlord to keep residential premises in a state of reasonable repair under s 63 of the Residential Tenancies Act 2010 (NSW) ('the RT Act').
Section 63 of the RT Act states: 63 Landlord's general obligation (1) A landlord must provide and maintain the residential premises in a reasonable state of repair, having regard to the age of, rent payable for and prospective life of the premises. (2) A landlord's obligation to provide and maintain the residential premises in a reasonable state of repair applies even though the tenant had notice of the state of disrepair before entering into occupation of the residential premises. (3) A landlord is not in breach of the obligation to provide and maintain the residential premises in a reasonable state of repair if the state of disrepair is caused by the tenant's breach of this Part. (4) This section is a term of every residential tenancy agreement.
Section 93 (1) of the RV Act states the operator "is" to maintain items of capital in a reasonable condition. Although s 63 of the RT Act uses the word "must", we do not regard the use of the word "is" rather than "must" as imposing a lower duty on an operator of a retirement village to maintain items of capital than a landlord to keep premises in a reasonable state of repair. The chapeau to s 93 of the RV Act uses the words "Obligations of an operator". "Maintaining" an item of capital includes keeping it in a state of good repair.
What is meant by "maintenance," "repair" and "replacement" of capital items in a retirement village was considered by the Tribunal in Alloura Waters Retirement Village Residents Committee v Living Choice Australia Pty Ltd [2014] NSWCATCD 68 (although in the context of an application by residents of a village under s 116 (4) of the RV Act to have certain recurrent charges refunded). The Tribunal stated at [85]-[91]: The definition of "capital maintenance" (s 4(1) RVA) refers to "works carried out for the purpose of repairing or maintaining ..." (emphasis added). Apart from the definition in s 4(1), reg 5(1)(b) of the RVR offers further elucidation of the meaning of "capital replacement" by indicating that: "(i) work done to substantially improve an item of capital beyond its original condition, (ii) work done to maintain or repair an item of capital in circumstances where it would have been more cost effective to replace the item of capital" (emphasis added) will not constitute capital maintenance. In Smith v Sakkara Investment Holding Pty Ltd [2011] CTTT 162 (20 August 2011) Senior Member G Meadows, after noting that the legislation does not define 'replace', 'repair', 'maintain' or 'improve' in the context of capital maintenance and capital replacement, said he was required to consider what is the normal or everyday meaning of those terms. I respectfully agree. According to Osborn's Concise Law Dictionary 8th edition, 'repair' is defined as: "the making good of defects in property which has deteriorated from its original state. The work required may involve curing defects arising from defective design or construction of the building, but it must fall short of effectively reconstructing the premises or improving them." Similarly, 'replacement' is defined in the Concise Oxford Dictionary, 6th Edition as: "replacing or being replaced; person or thing that takes the place of another". On the other hand, the ordinary meaning of 'improvement' according to that Dictionary is: "improving or being improved; the addition or alteration that adds to value". A repair involves restoring the efficiency of function of the property without changing its character and may include restoration to its former appearance, form, state or condition. A repair replaces something or corrects something that is already there and has become worn out and dilapidated by ordinary wear and tear, by accidental or deliberate damage, or by the operation of natural causes. A minor incidental degree of improvement, addition or alteration may be done to property and still constitute a repair; however, if the work amounts to substantial improvement, addition or alteration it will be capital replacement: as Senior Member Meadows observed in Smith v Sakkara, supra, a new door is capital replacement but fixing the mesh and preserving the insect repellent function of the door is capital maintenance. I am also satisfied that the facts matters and circumstances bearing upon, or relating to, 'repairs and maintenance', and not only 'repairs', are to be considered for the Tribunal's enquiry as to whether or not there is a capital maintenance item for the purposes of the legislation. To proceed otherwise is at odds with the intent of the legislation which expressly refers to 'repairs and maintenance'. It necessarily follows, in my opinion, that in adverting to whether there is a capital maintenance item, the Tribunal must apply the word 'maintenance' separately from the word 'repair'; that is, both words are not to be applied interchangeably to the characterisation of a capital maintenance item as the applicant submits. The Oxford paperback dictionary definition of 'maintain' is: "1. To cause to continue, to keep in existence; 2. To keep in repair, 'the house is well maintained'". Similarly the definition of 'maintenance' is the noun defined as: "1. Maintaining, being maintained; 2. Keeping equipment etc. in repair". Accordingly, to maintain an item of capital in a retirement village is not necessarily the same thing as to repair it. Maintenance is work done to keep an item of equipment functioning efficiently or to extend its economic life by enhancing or improving it. Ordinarily 'maintenance' involves repair work which is performed to prevent defects' damage or deterioration; but in some contexts including in the context of a retirement village, 'maintenance' may take on a wider meaning that includes repairing as well as other operations which are apt to enhance an item of capital. So long as the work done does not substantially improve the item of capital beyond its original condition it is to be treated as a capital maintenance item and not a capital replacement item: see, for example, Carey Bay Retirement Village Residents Committee v Anglican Care (Retirement Villages) [2011] NSWCTTT 497 (24 October 2011), where Senior Member R Connolly (at paragraph 21) found that the costs incurred in the labour and materials for obtaining and replacing a defective WC Cistern improved an item of capital beyond its original condition and that it must therefore be treated as a capital replacement item
There is also a broadly analogous (although not identical) duty under s 106 of the Strata Schemes Management Act 2015 (NSW) that an owners corporation keep and maintain common property in a state of good repair. That duty includes renewal or replacement of fixtures or fittings comprised in the common property. Relevantly, that duty includes taking measures to prevent common property falling into a state of disrepair, and the duty is not merely to take reasonable steps or use best endeavours to repair (Seiwa Pty Ltd v Owners-Strata Plan 35042 [2006] NSWSC 1157; Ridis v Strata Plan 10308 [2005] NSWCA 246; The Owners Strata Plan No 50276 v Thoo [2013] NSWCA 270; and Glenquarry Park Investments Pty Ltd v Hegyesi [2019] NSWSC 425).
From the above principles, it is clear that determination of whether an operator has failed to "maintain" an item of capital is a question of fact that involves consideration of the original and current condition of the item of capital, and whether it has fallen into a state of disrepair and requires repair.
The operator submits that the Tribunal did not consider the "mandatory considerations" in s 93 (1), being: 1. The age of the item, 2. The prospective life of the item, 3. The money paid to the operator by the residents.
In Kelly v NSW Land and Housing Corporation [2018] NSWCATAP 154 ('Kelly') the Appeal Panel considered the concepts of "mandatory considerations" and "relevant considerations" in the context of interpreting ss 87 and 154E of the RT Act.
The Appeal Panel stated at [29]-[30]: The ground of failure to take into account a relevant consideration is only made out if a decision-maker fails to take into account a consideration he or she is bound to take into account in making that decision: Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 34 at 39. Aronson, Dyer & Weeks Judicial Review of Administrative Action and Government Liability 6th ed, 2017, at [5.30] distinguish between considerations which are forbidden, that is, irrelevancies whose consideration invalidates the decision; considerations which are permissive, that is, considerations that may be taken into account, but their oversight does not invalidate the decision; and considerations which are mandatory, that is those matters that are relevant and their oversight results in invalidity. A failure to take into account a mandatory consideration is an error of law, and in some circumstances, may constitute jurisdictional error: Craig v State of South Australia (1995) 184 CLR 163 at 179. Determining when a particular consideration is a mandatory consideration requires interpretation of the applicable legislation: first, any express statement of the mandatory factors; and if not expressly stated, by implication from the subject matter, scope and purpose of the statute: Peko-Wallsend at 39-40. Not every consideration that a decision-maker is bound to take into account but fails to take into account will justify a court on judicial review setting aside the decision: Peko-Wallsend at 40. In the absence of statutory indication of the weight to be given to various considerations, and subject to consideration of whether the decision is unreasonable in the Wednesbury sense, the weight to be given to the relevant considerations is a matter for the decision-maker: Peko-Wallsend at 41. These general principles were adopted by the Appeal Panel in Director General, Department of Finance & Services v Porter [2014] NSWCATAP 6, which went on to say: 28 Whilst the question of weight is one for the Tribunal, the Tribunal will not have given adequate attention to a relevant consideration where its process is merely a formulaic reference: see Azriel v NSW Land & Housing Corporation [2006] NSWCA 372 at [49] per Basten JA (with Santow and Ipp JJA agreeing). Instead what is required can be described as a proper, genuine and realistic consideration of the relevant consideration: Bruce v Cole (1998) 45 NSWLR 163 at 185-6 per Spigelman CJ. However, as Basten JA warned in Azriel at [51] referring to Spigelman CJ in Bruce at 186, assessing whether the decision-maker has given a proper, genuine and realistic consideration to a mandatory matter must be approached with caution, with care to avoid an impermissible reconsideration of the merits of the decision. 29 In assessing a purported failure to take into account a relevant consideration a mere failure to refer expressly to a matter will not necessarily justify an inference that there has been a failure to take into account a relevant consideration. Despite this, such an inference is still open to be drawn by the Tribunal in those circumstances: see Australian Conservation Foundation v Forestry Commission (1988) 19 FCR 127 at 132 per Burchett J. In determining whether or not to draw the inference that failure to deal at all or in detail with a relevant consideration gives rise to an error by the decision-maker, the extent to which the facts and circumstances of the particular matter engage that consideration will be relevant and often determinative. Further, in the context of an appeal from a decision of an administrative review tribunal, such as this appeal, the nature and scope of the submissions put to the tribunal at first instance may also inform that process of determination.
The concept of "mandatory" and "relevant" considerations was also explored in Hollins v NSW Land and Housing Corporation [2019] NSWCATAP 132 as follows at [64]-[71]: In Kelly, at [33], it was accepted that 'the circumstances of the case' was 'mandatory' in the Tribunal's evaluation of that case as to whether the tenant's breach was sufficient to justify termination under that section. Section 87(5) also prescribes what matters the Tribunal 'may' consider in regard to 'the circumstances of the case'. It was the meaning of this phrase which was at issue in that case and whether the Tribunal was bound to take into account any or all of the matters identified by the appellant as 'the circumstances of the case.' The Appeal Panel found that the matters prescribed in s 87(5) were 'permissible considerations' in determining the 'the circumstances of the case' and were not 'mandatory', unlike those prescribed in ss 154B and 154E. Section 154B of the RT Act sets out the matters the Tribunal 'must' have in determining whether a social housing tenancy should or should not be terminated on an application of a landlord under s 87 for breach of agreement. As noted in Kelly, at [29], in the absence of a statutory indication of what weight is to be given to the consideration, be it 'mandatory', or 'permissible' and subject to whether the decision is unreasonable in the Wednesbury sense, the weight to be given to the relevant consideration, be it 'mandatory' or 'permissive' is a matter for the decision-maker. In Yonan v NSW Land and Housing Corporation [2017] NSWCATAP 37 at [48] the Appeal Panel said that s 154E(1) did not require the Tribunal to enquire into and consider each of the matters prescribed in that subsection, 'but rather to deal with matters that have weight, significance or relevance'. In Aboriginal Housing Office v Blacklock [2019] NSWCATAP 51, at [40], the Appeal Panel accepted that the Tribunal was not required to consider each of the criteria in s 154E(1), but in that case, the Appeal Panel went on to find that the matters referred to in subparagraphs (d) and (e) of s 154E(1) were clearly necessary in that case. We do not understand the Appeal Panel in Yonan or Blacklock to have used the word 'relevant' in the context of the Tribunal not being required to consider each of the factors in s 154E(1), but rather a reference to the weight and significance the Tribunal has given to a factor based on the evidence of the case that is before it. We note from the transcript of the hearing, the landlord and the tenant addressed the Tribunal on each of the factors in s 154E(1). In our view, while the Tribunal did not, in its reasons for decision, refer to each factor in s 154E(1) or the specific arguments of the parties in regard thereto, it cannot be said that it failed to take each factor into consideration when determining whether or not to make the order sought by the landlord.
In our view, it is sufficient if the Tribunal has regard to the age of the item of capital; the prospective life of the item and the money paid to the operator by residents when determining whether the operator had breached its obligation under s 93 (1) of the RV Act. What weight, significance, or relevance is to be ascribed by the Tribunal to those matters depends on the particular circumstances of the case. In the present case it is evident from reading the decision as a whole that the Tribunal was aware of and took into account in its decision making each of the factors set out in s 93(1) of the RV Act. The Tribunal was not required to have regard to each of them in order: New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231 per Bell P (as he then was), with whom Ward JA and McCallum JA agreed (on the adequacy of reasons question), at [67] to [77]; Housing Commission of NSW v Tatmar Pastoral Co Pty Ltd (1983) 3 NSWLR 378 at 386 per Mahoney JA; Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247. It was sufficient that the Tribunal had regard to them.
Section 93 (1) of the RV Act should not be interpreted as meaning there must be evidence adduced about each of those items by a resident who asserts breach of s 93 (1) of the RV Act; nor that the Tribunal must make factual findings on each of the matters in s 93 (1) (a)-(c). If such an interpretation were adopted, it would be fundamentally inconsistent with the statutory purpose of s 93 in the context of balancing the rights and obligations of operators and residents in a retirement village.
If a resident of a retirement village had to prove (a) how old the item of capital was; (b) its prospective life; and (c) the monies paid by residents to the operator to establish breach of s 93 of the RV Act, that would lead to manifestly illogical and unreasonable outcomes. For example, a resident of a retirement village may have to obtain the business records of the operator; records of the local Council; and a report by an expert building consultant or other appropriate expert witness to prove that an operator was in breach of its obligation under s 93 of the RV Act to repair a burst water pipe flooding into the dwelling of the resident. Some evidence (such as the age of the item of capital and its prospective life) may be difficult and expensive to obtain.
Further, the authorities dealing with s 63 of the RT Act have not asserted that a tenant must prove the age of the premises and the prospective life of the premises as a condition of proving that a landlord has failed to comply with its duty to keep residential premises in a reasonable state of repair.
In this matter, the Tribunal did have evidence of the approximate age of the serviced apartment building. It also had some evidence regarding the monies paid to the operator, in respect of having before it a copy of Mr Brady's village contract. The evidence relating to the need for repairs and the dilapidated state of the serviced apartment building, provided clear evidence of the limited prospective life of the serviced apartment building at that time.
In light of the evidence that the there was substantial termite and water ingress damage to the serviced apartment building, the Tribunal clearly had sufficient evidence to be satisfied that the operator was in breach of its obligation under s 93 (1) of the RV Act with regard to the matters set out in s 93 (1) (a)-(c).
The operator submits that the Tribunal "reversed the onus of proof" and adopted a position that the operator had to prove it was not in breach of s 93 of the RV Act rather than the resident providing it was in breach.
At para [64] of the decision, when finding that it would not be more costs effective to replace the building, rather than repair it, the Tribunal said: There is nothing to suggest that any aspect of s 93(1) applies nor is there any evidence that it is not practical to maintain the SA building such that s 93(2) would apply.
We do not accept that the Tribunal "reversed the onus of proof." When the Tribunal's reasons are read fairly and in their full context, it is clear that the Tribunal was cognizant that the resident bore the onus of proving breach of s 93 of the RV Act. Comments by the Tribunal regarding the lack of evidence of the operator on certain issues were relevant to the weight to be given to the evidence before the Tribunal in the context of making factual findings. As the Appeal Panel stated in Wojciechowska v Blue Mountains City Council [2022] NSWCATAP 299 at [52]-[55]: In Manly Council v Byrne & Anor [2004] NSWCA 123 at [44]-[45] under the heading "Jones v Dunkel" Campbell J considered the authorities subsequent to Jones v Dunkel [1959] HCA 8 [1959]; 101 CLR 298 and said at 51 that: "If a witness is not called two different types of results might follow. The first is that the tribunal of fact might infer that the evidence of the absence witness, if called, would not have assisted the party who failed to call that witness. The second is that the tribunal of fact might draw with greater confidence any inference unfavourable to the party who failed to call the witness if that witness seems to be in a position to cast light on whether that inference should properly be drawn." His Honour further said at 55 that: "If the evidence which has been admitted is enough to prove the case of the party who has not called the witness, the tribunal of fact could be justified in not counting the failure of that party to call that witness as something that reduces the strength of that case." In Bell IXL Investments Limited v Life Therapeutics Limited [2008] FCA 1457, Middleton J said at 93 that: "The failure to call evidence may, not must, lead to an inference that the uncalled evidence would not have assisted a party's case. The application of the principles in Jones v Dunkel must be applied in the context of the evidence that is presented to a court." As the authorities make clear, the failure to call a witness whose evidence might have been relevant to a fact in issue, without more, and there was no more in this case, simply means that the decision maker can more readily accept evidence of the fact in reliance upon the evidence of the other party to the proceedings.
No error of law has been established in respect of the Tribunal's findings that the operator had breached its obligation under s 93 of the RV Act by failing to repair the serviced apartment building. We also note that there is no evidence that suggests the appellant was relying on s 93 when it made the decision to close the service apartment building.
Section 128 of the RV Act relevantly states: 128 Order of Tribunal (1) The Tribunal may, on application by a resident (or residents) or an operator under this Act, make one or more of the following orders - (a) an order directing the resident (or residents) or operator to comply with a requirement of this Act or the regulations, (b) an order that varies or sets aside a provision of a village contract that conflicts with this Act or the regulations, (c) an order that - (i) restrains any action in breach of any village contract or village rule, or (ii) requires the performance of any village contract or village rule, (d) an order directing the resident (or residents) or operator to perform such work or take such other steps as the order specifies to remedy a breach of a village contract or village rule, … (l) any other order prescribed by the regulations for the purposes of this section. (2) Nothing in this section limits the orders that the Tribunal may make under this Act.
To the extent that Mr Brady's contract contained a provision that required the operator to maintain items of capital equipment, the Tribunal would also have had power to make the same order.
It is unnecessary to further consider this issue in circumstances where the breach of the obligation to repair was argued under s 93 of the RV Act rather than the terms of the contract. The operator's reference to cl. 8.1.1. of the contract falls away because the same considerations arise under s 93 (1) (a)-(c) of the RV Act and we are satisfied that the Tribunal correctly applied s 93 (1) of the RV Act.
Although Mr Brady had not sought an order under s 96 of the RV Act, we do not regard that as material. He clearly sought an order that the serviced apartment building be repaired. He had standing to bring such an application under s 128 (1) (a) of the RV Act as a resident of the village irrespective of whether he was living in the serviced apartment building; or whether he intended at any stage in the future to transfer into the building. The failure to refer to s 96 of the RV Act did not affect the substance of the application before the Tribunal. The Tribunal had the power to make the order sought under s 128 (1) (a) of the RV Act.
Having found that the operator was in breach of its obligation under s 93 (1) of the RV Act, it had the discretion to make orders that the serviced apartment building be repaired. It clearly set out why it was exercising its discretion to make a repair order, and the exercise of that discretion does not contain any error of law falling within the principles of House v The King [1936] HCA 40; (1936) 55 CLR 499.
No ground of appeal was raised that the terms of the repair order were too vague or uncertain to be complied with (see Glenquarry Park Investments Pty Ltd v Hegyesi [2019] NSWSC 425 in the context of remedial orders under the SSM Act). In any event, we are satisfied the repair order contains a sufficiently detailed scope of works for the operator to be able to ascertain and comply with the order.
The grounds of appeal based upon s 93 of the RV Act are dismissed. That is, of itself, sufficient to dispose of the appeal against the order that the operator repair the serviced apartment building.

Withdrawal of Variation of Services or Facilities-ss 60-62 of the RV Act

Sections 60 and 62 of the RV Act

Much of the operator's oral submissions in the appeal and written submissions focused upon arguing that the closure of the serviced apartment building was not a withdrawal or variation of a service or facility because there was no practical reduction in services or facilities. Those arguments were raised by the operator before the Tribunal.
However, what those submissions fail to take into account is the narrow ambit of the findings made by the Tribunal in respect of withdrawal of variation of services or facilities.
In paragraph [98] of the decision, the Tribunal gave no concluded view as to whether the closure of the serviced apartment building was a variation of services, in circumstances where services to residents that occurred within the serviced apartment building were now being provided elsewhere in the village.
What the Tribunal found at paragraph [93] was that the closure of the serviced apartment building was a withdrawal or variation of a "facility" and that the loss of the right that Mr Brady had under the terms of his village contract to apply to transfer in the future to the serviced apartment building was sufficient to give him "standing" to apply to the Tribunal.
We do not understand why it was necessary to make a finding that Mr Brady had a right under his contract to make an application to transfer to the serviced apartment building, for him to have standing to bring an application in the Tribunal. If the operator was failing to comply with its obligations under ss 60-62 of the RV Act, Mr Brady had standing under s 128 (1) (a) of the RV Act to seek an order of the Tribunal to direct the operator to comply with its statutory obligations under the RV Act. Debate about whether or not Mr Brady had a right under his contract to apply for a transfer is extraneous.
The RV Act and its Regulations do not define what are "facilities."
The definition of "facility" in the Macquarie Dictionary 6th edition is as follows: Facility. 1. Something that makes possible the easier performance of any action; advantage: transport facilities, to afford someone every facility for doing something. 2. Freedom from difficulty; ease: facility of understanding. 3. Readiness because of skill or practice; dexterity: compose with great facility. 4. An easy-flowing manner: facility of style. 5. Ready compliance. 6. (in electronic devices) a specific capability or function. 7. (pl) Also, toilet facilities, bathroom and toilet. 8. A building or complex of buildings designed for a specific purpose, as for the holding of sporting contests, launching of rockets etc [L]
The plain meaning of "facility" includes a building designed for a specific purpose. The serviced apartment building clearly falls within that definition.
Mr Brady's contract referred to various "facilities" that were to be provided, being (a) chapel; (b) amenities centre; (c) craft room; (d) library;(e) medical consulting rooms.
However, there is no reference in the village contract to such facilities being the only facilities to be provided. The statutory reference to "facilities" is not to be read down by reason of the clause of the village contract that refers specifically to some facilities. To do so would have the effect of contracting out of the provisions of ss 60-62 of the RV Act.
Further, an operator and a resident cannot contract out of the provisions of the RV Act or the standard form contract prescribed in sch. 2 of the Retirement Villages Regulation 2017 (NSW) and its statutory predecessors (which date back to the Retirement Villages Regulation 2000 (NSW) - the legislative history being discussed in Bondi Beach Retirement Village Pty Ltd v Assem [2020] NSWSC 1814 at [59]-[60] and [127] - to limit the meaning of "facilities" by reason of the operation of ss 43 and 128 (1) (b) of the RV Act.
In respect of what is a "facility" in the context of the provisions of the RT Act where a tenant may be awarded a rent reduction if a landlord reduces or withdraws "any goods, services or facilities provided with the residential premises" at the commencement of the tenancy under s 44 (1) (b) of the RT Act, a landlord's failure to keep any part of the building in a reasonable state of repair will allow a rent reduction to be awarded (see, for example, Roberts v NSW Aboriginal Housing Office [2017] NSWCATAP 9 at [124]; Eliezer v Residential Tribunal [2001] NSWSC 1092; (2001) 53 NSWLR 657 at [37] and Pan v Malveholm [2021] NSWCATAP 101).
We are not satisfied that the Tribunal's finding that the serviced apartment building was a "facility" within the meaning of s 60 of the RV Act was in error. The building itself, rather than the services which emanate from it, is a "facility" within ss 60 and 62 of the RV Act.
The failure to repair the building and the eventual closure of the building was a "variation" because it "reduced" the facility (s 60 (10) (a) of the RV Act); and was a "withdrawal" of the facility (s 60 (10) (b) of the RV Act) and (if either of those provisions do not apply), otherwise a "change" in the facility (s 60 (1) (d) of the RV Act). The factual finding made at para [93] of the Tribunal's decision does not contain legal error.
The letters of the operator to residents that the serviced apartment building was not going to be repaired and was to be closed was a proposal by the operator to vary a facility under s 60 (2) of the RV Act. The operator was prevented from effecting that proposed variation until residents of the village had approved the proposed variation by passing a special resolution at a meeting in accordance with s 60 (3) of the RV Act. No such meeting had been held as of the date of the Tribunal's decision.
It is unnecessary to comment upon whether it was necessary or appropriate for the Tribunal to order that such a meeting occur, as the order sought by Mr Brady was seeking an order that the serviced apartment building be reinstated under s 62 (1) (a) of the RV Act; not that a meeting be held to consider the proposed variation under s 60 (3). It has not been directly challenged on appeal.

Section 61 of the RV Act

As we have rejected the operator's appeal grounds involving ss 93; 60; and 62 of the RV Act, it is strictly unnecessary to deal with s 61 of the RV Act.
However, for the sake of completeness, we will do so.
The salient condition in the Development Consent is cl.9 (b) which states as follows: Occupiers of Self-Care Units shall be given priority to purchase or reside in Hostel Units as they become available.
Self-Care Units are the Independent Living Units in which Mr Brady resided at all relevant times. Hostel Units include the units within the serviced apartment building.
In our view, the issue under s 61 of the RV Act is straightforward. Mr Brady could not be given priority to purchase or reside in a building that ceased to contain Hostel Units; or a village that did not contain Hostel Units.
Accordingly, by reason of s 61 of the RV Act, the existence of Hostel Units was required for the life of the village pursuant to the cl. 9 of the Development Consent, and the operator could not "reduce" or "withdraw" the facility that contained Hostel Units without amendment of the Development Consent to omit or vary cl. 9 (b).
No error of law is established in respect of the Tribunal's interpretation of s 61 of the RV Act or its findings pertaining to s 61 of the RV Act.

The Order to Vary Mr Brady's Village Contract

This issue falls within the grounds of appeal.
No order was sought by Mr Brady to vary the terms of his contract.
The basis for the Tribunal determining that it was appropriate to vary the terms of Mr Brady's village contract is that the terms referred to him being able to apply to be transferred to "Hostel A" and that the serviced apartment building was "Hostel B" according to the registered plan of the village and the plan attached to the village contract (at the page immediately after a copy of the Village Rules and immediately prior to the Disclosure Statement).
The relevant term of Mr Brady's village contract is as follows: PART 15-TRANSFERS RELOCATION OF RESIDENT 15.1.1 Subject to the availability of suitable alternative accommodation the Resident may, with the consent of the Company, transfer the unit to (a) The Nursing Home; or (c) Hostel A. … TRANSFER TO HOSTEL 15.3.1. The Resident may at any given time give to the Company not more than one month's notice in writing of the Resident's intention to transfer to Hostel A (herein called "the Hostel A Transfer Notice"). …
At the hearing before the Tribunal, the operator submitted that the "Hostel A" building identified in the plan attached to the village contract of Mr Brady was now the nursing home building (para [37] of the affidavit of Mr Ross, regional manager of the operator, dated 2 June 2022).
As discussed previously, Condition 9 (b) of the Development Consent of the village stated: (b) Occupiers of Self-Care Units shall be given priority to purchase or reside in Hostel Units as they become available.
By reason of Condition 8, Condition 9 (b) was an ongoing condition.
Condition 8 (b) does not distinguish between "Hostel A" and "Hostel B". It states that occupiers of Self-Care Units (which relevantly included Mr Brady) would be "given priority to purchase or reside in Hostel Units as they become available."
It was unnecessary to vary the terms of Mr Brady's village contract, because irrespective of the terms of the contract the condition of the Development Consent imposed a condition on the operator. That condition is not limited by the terms of the village contract. It was open to the Tribunal to find that the facility was "reduced" or "withdrawn" and the Development Consent condition needed to be amended before that could occur, which engages s 61 of the RV Act.
However, what is salient to this aspect of the appeal is that Mr Brady did not seek a variation to the terms of his contract. It was not part of his case that the contract needed to be varied.
Section 128 (1) (b) of the RV Act empowers the Tribunal to make an order that "varies or sets aside a provision of a village contract that conflicts with this Act or the regulations". It was never part of Mr Brady's case that Clause 15.1.1 and/or Clause 15.1.3 conflicted with the RV Act or its Regulations. That is clear from the following oral closing submission made at the Tribunal hearing on behalf of Mr Brady (p 33 transcript): And as I've said, we say that my father's Licence Loan Agreement gives him a right to transfer to Hostel B, being the serviced apartments.
In summary, an order was never sought that the village contract be varied; it was not raised at the hearing; the order was unnecessary; and there was no legal basis for making the order as it was not established that the terms of the village contract conflicted with the RV Act or its Regulations.
Accordingly, we are satisfied that an error of law has been established in respect of order 5 of the Tribunal dated 7 November 2022. It is appropriate to invoke our powers under s 81 of the NCAT Act to set-aside that order.

CONCLUSION

Other than in respect of order 5 of the Tribunal (being the order to vary the terms of the respondent's contract to replace the words 'Hostel A' with "Hostel B") the appeal is dismissed.
As discussed previously, the operator was not seeking leave to appeal under cl. 12 of sch 4 of the NCAT Act as all of its grounds of appeal involve purported errors of a question of law. However, for the sake of completeness, it is appropriate to identify that, if leave had been sought, we would not have granted leave as no error of a type under cl. 12 of sch. 4 of the NCAT Act exists.

Variation of the Tribunal's Orders Under s 81 of the NCAT Act

In its submissions, the operator pointed out that order 4 of the Tribunal (i.e. the order to repair the serviced apartment building) had been stayed and if that stay was lifted it would be impossible to comply with the order by the due date (31 January 2023).
We raised this issue during the appeal hearing and indicated that if the appeal failed in respect of order 4 of the Tribunal, then the order should be varied to give the operator a reasonable period of time to repair the building. We are satisfied the operator has been given a reasonable opportunity to be heard on this issue, in circumstances where it was raised by the operator in their appeal submissions.
The operator submitted that it should have a period of 12 months to conduct repairs.
We are not satisfied that it is necessary or appropriate to grant the operator 12 months to conduct repairs.
In our view, having considered the documents and submissions of the parties in the appeal, 4 months is an appropriate period of time to conduct repairs.
If the operator seeks to extend the time period for compliance with that order it is open to it to make an application to the Tribunal (not the Appeal Panel) to extend time for compliance under s 41 of the NCAT. We express no view about any jurisdiction issue pertaining to s 41, or the merits of any such application if it is made.
Order 6 of the Tribunal was that the operator call a meeting of residents by 5 December 2022. By reasons of orders of the Appeal Panel on 22 November 2022 and 2 December 2022 that order was stayed until 5.00 pm on 19 December 2022. The issue of a further stay was not raised before the Appeal Panel on 21 December 2022 when a conditional stay was ordered in respect of Order 4 of the Tribunal.
It is unclear to us whether the meeting has occurred and the order has been complied with. Under those circumstances, we are not prepared to invoke s 81 of the NCAT Act to further extend the time period to hold the meeting. If the meeting has not occurred the operator can call the meeting to achieve late compliance with the order and its obligations under the RV Act. If the meeting has occurred, then no further orders need to be made in regard to the time period to hold the meeting.

THE ISSUE OF COSTS

If either party seek to make a costs application, they must inform the Tribunal and the other party in writing within 14 days of the date of this decision that a costs application is being made.
If a costs application is made, we will issue further procedural directions regarding costs submissions and documents to dispose of the costs application.
If no costs application is made, there will be no order as to costs.

ORDERS 1. The appeal is allowed in part. 2. Order 5 of the Tribunal dated 7 November 2022 is set-aside. 3. Order 4 of the Tribunal dated 7 November 2022 is amended to change the date of "31 January 2023" to "17 November 2023". 4. The appeal is otherwise dismissed. 5. If either party seeks to make a costs application, they are to inform the Tribunal and the other party in writing by 14 days from the date of this decision.

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 July 2023

Villages Act 1999(NSW)

(C'th) Civil and Administrative Tribunal Act 2013(NSW)

Retirement Villages Regulation 2017(NSW)

Retirement Villages Regulation 2000(NSW)

At a glance

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Judgment (20 paragraphs)

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Legislation Cited (10)

Cases Cited (35)