We have decided that the appeal should be allowed for an error on a question of law and that it is appropriate to remit the proceedings to the Tribunal for fresh hearing by the same member who has heard the matter to date, if that member is available.
Given the outcome, and the condition on the appellant's grant of leave for legal representation, we have not made any costs order, to the effect that each party bears its or his costs of the appeal.
[2]
Background, primary decision, procedural
The primary proceedings concerned a residential community of over 300 sites, with community amenities, in Windang on the shores of Lake Illawarra on the south coast of NSW. The community was described by its operator, who is the present appellant (the operator), as being separated into waterfront and mid-section sites. The mid-section sites, in which the relevant site was located, were said by the operator not to vary in substance of amenity or outlook but did vary in size.
The site holder, the respondent to the appeal (the site holder), purchased a home on the relevant site and joined the community on 25 July 2021 and entered into a new site agreement with the operator of the community. There was no dispute that the site was within a residential community as defined in the Residential (Land Lease) Communities Act 2013 (NSW) (the RLLC Act).
The new site agreement set the site fee at $195.64pw. The accompanying disclosure statement had given this figure and stated that the site fee at the time of disclosure was $139.52pw with the range for mid-section sites being $110.76 to $215.75pw. There was provision for annual site fee increases at a stated percentage.
The site holder then located and set out seven neighbouring site fees as at 23 July 2021 in the range $152pw to $168.83pw. His immediate neighbour paid $152pw and the next nearest paid $155.94pw.
In RC 22/33608, filed 26 July 2022, the site holder sought that his site fees be assessed, and re-calculated, with a methodology different from that used by the operator and that there be a reimbursement of any overpayment following that re-calculation. The site holder said that the methodology used by the operator did not accord with the relevant provisions of the RLLC Act.
On 17 October 2022 the following primary orders were made (in summary) on the substance of the proceedings, with written reasons:
1. Time was extended under s 41 of the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act) for the bringing of the application to its date of filing;
2. Pursuant to s 157 of the RLLC Act, the operator was ordered by 31 October 2022 to calculate the average of the site fees payable at 25 July 2021 for residential sites with a size of 209sqm plus or minus 10% and with the location mid-section rather than waterfront and to inform in writing the site holder of the average; and
3. Permission to re-list was granted to determine any dispute in respect of matters in para 64 of the primary reasons. Those matters were any dispute about whether the operator had done the calculation correctly or whether the ledger had been properly corrected, including with any credit against future fees.
The notice of appeal was filed within time from the primary decision, on 3 November 2022, under r 25(4)(c) of the Civil and Administrative Tribunal Rules 2014 (NSW).
However, the site holder initially said that leave was required because the primary decision was interlocutory by reason of the re-listing permission: s 80(2)(a) of the NCAT Act.
The operator resisted that submission but, in the alternative, applied for leave since the matter of statutory interpretation was a matter of principle and of public importance, and there was at least one other matter set down for hearing on 3 May 2023 that involved the same issue.
The operator said that a re-listing was likely to test whether the site holder's list of sites that were said to be within the primary order, supplied on 21 October 2022, in fact was congruent with that order.
After discussion of the rationale for a grant of leave to appeal if the primary decision was classed as interlocutory, the self-represented site holder (who said that he was a former union industrial officer) withdrew any contest to a grant of leave to appeal.
We grant leave to appeal to the extent that leave is required. Our view is that leave is required because the primary decision was interlocutory in character. The primary decision did not finally determine the matter in dispute that the site holder had brought to the Tribunal - namely, the amount of site fees that the site holder was liable to pay under the new site agreement between him and the operator. Rather, the primary decision made findings on the central issue of statutory interpretation underpinning assessment of the amount of site fees and made orders to provide information congruent with those findings and to re-list the matter to determine any further disputes. A further order or orders would have been required to finalise the proceedings, irrespective.
On 18 November 2022 leave was granted to the operator to have legal representation in the appeal on condition that the operator not seek to recover costs of that representation. Leave without that condition was granted to the site holder but not exercised. Oral reasons were given for these decisions.
No stay of the primary decision was sought.
[3]
Grounds of appeal
The notice of appeal was prepared with legal assistance. It sought setting aside of the second and third orders as summarised above and the dismissal of the primary application on the following substantive grounds, which were all said to show errors on a question of law in the primary decision and its supporting reasons:
Ground 1: The primary decision erred in finding that "residential sites of a similar size and location within the community" within the meaning of s 109(6)(b) of the RLLC Act are those which are "plus or minus 10%" of the size of the subject site (primary reasons (PR) at [52], [54]).
Ground 2: The primary decision erred in finding that identification of "the site fees currently payable for residential sites of a similar size and location within the community" within the meaning of s 109(6)(b) of the RLLC Act requires: (a) "identification of a single value describing the plurality by identifying a central position within it" (PR [58]), and (b) the site fees currently payable for all residential sites of a similar size and location within the community to be averaged (PR [58]).
Ground 3: The primary decision ought to have found that the identification of "the site fees currently payable for residential sites of a similar size and location within the community" within the meaning of s 109(6)(b) of the RLLC Act requires: (a) identification of residential sites which are of a similar size and location within the community, if any, and (b) identification of the site fees payable for each such residential site.
Ground 4: The primary decision ought to have found that fair market value within the meaning of [s 109(5) with] s 109(6) of the RLLC Act is the highest site fees of those referred to in s 109(6)(a) and (b). Ground 4 was amended at final hearing to substitute that the finding ought to have been "that the site fees under a new site agreement would not exceed fair market value within the meaning of s 109(5) of the RLLC Act if those site fees did not exceed the site fees payable at one or more of the residential sites of a similar size and location within the community, within the meaning of s 109(6)(b), and that the site fees in the site agreement between the [operator and the site holder] did not do so". There was no objection to the amendment which in substance was within the ambit of the existing appeal.
Leave to appeal was not otherwise sought because the grounds were put forward as errors on a question of law not requiring such grant of leave. We agree with that characterisation of at least the grounds which are the basis of our determination, being ground 2 and amended ground 4. To the extent that we are later found to be wrong in that characterisation, we indicate that we would have granted leave to appeal on the test set out below and come to the same conclusion on outcome. For the reasons we have given any alternative conclusion would not have been fair and equitable, may have resulted in a substantial miscarriage of justice and at least involves questions of public importance or matters of administration or policy which might have general application.
The operator did not maintain its challenge to the Tribunal's jurisdiction to hear and determine this dispute. The primary decision at [34] to [38] found jurisdiction. In our view, the reasons there given were correct in identifying one source of jurisdiction within the RLLC Act.
There was also, correctly in our view, no challenge to the extension of time to bring the primary application for at least some of the reasons in [43] to [46] of the primary decision.
In his reply to the appeal filed 11 November 2022 the site holder supported the challenged primary orders and primary reasons.
[4]
Scope and nature of internal 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) Civil and Administrative Tribunal Act 2013 (NCAT Act).
In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 the Appeal Panel set out at [13] a non-exclusive list of questions of law, including relevantly:
1. Whether the Tribunal identified the wrong issue or asked the wrong question;
2. Whether a wrong principle of law had been applied;
3. Whether the Tribunal took into account an irrelevant consideration.
For completeness, the circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited by cl 12(1) of Sch 4 to the NCAT Act. In such cases, the Appeal Panel must first 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, the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) in 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 has satisfied the requirements of cl 12(1) of Sch 4, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b).
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; or
(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."
[5]
Alleged errors of law
The meaning of the relevant statutory provision and its elements must be considered in its context, which takes into account the object and purpose of the RLLC Act: Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 esp at [78] and later authority.
Section 109 of the RLLC Act, relevantly, provides as follows:
"109 Operator to enter new site agreement
(1) This section applies if a purchaser or prospective home owner under a contract, or proposed contract, for the sale of the home (the sale contract) requests the operator of the community to enter into a new site agreement (the new site agreement) for the residential site with the purchaser or prospective home owner.
(2) …
(3) …
(4) ...
(5) The site fees under the new site agreement must not exceed fair market value.
(6) Fair market value is the higher of the following -
(a) the site fees currently payable by the home owner who is selling the home,
(b) the site fees currently payable for residential sites of a similar size and location within the community.
(7) … ."
On appeal, the operator did not argue that the primary decision erred in law on any of the following aspects of interpreting s 109(5) and (6) of the RLLC Act: size and location were the only factors in choosing the "bucket" (as that term was used by the parties) of sites within s 109(6)(b) (as was implicitly found in [51] of the primary decision); a valuation exercise to find comparable sites restricted to those factors was not required; the sites in the s 109(6)(b) "bucket" were objectively determined, not at the subjective choice of operator, seller or buyer (the primary decision implicitly said the same at [20] - [23]); "higher" governed the comparison between paras (a) and (b) in s 109(6) and did not govern selection within s 109(6)(b) (in accordance with the primary decision at [57]).
Rather, the operator submitted that, "on the proper construction of s 109(5) and (6), the site fees under the new agreement will not exceed fair market value if they do not exceed the site fees payable at one or more of the residential sites of a similar [size and] location within the community".
This was said to be because s 109(6) defined fair market value for the purpose of setting the maximum in s 109(5). "Sites" was in the plural in s 109(6)(b), as was site fees. This inherently recognised that the ceiling of fair market value was not restricted to being set by any one site fee for any one site.
Nor was there any reference, or need for reference, to resolving a range of site fees and sites within s 109(6)(b) to a single calculated figure (however that figure was derived, by averaging or other formula) as the primary reasons had done and considered necessary: R v Young (1999) 46 NSWLR 681 at [5]-[15]. This was because all the current site fees and sites that on objective assessment of the statutory criteria fell within s 109(6)(b) were within the range that could be considered for the purpose of the statutory exercise. So long as the new fees for the site did not exceed the highest site fees within the "bucket" of sites captured by s 109(6)(b), and that site fee was higher than the seller's current site fee brought into consideration by s 109(6)(a), then s 109(5) was not contravened.
Indeed, if one read in the calculation of an average then one contradicted the plain words of the text of s 109(6)(b), which required reference to actual site fees currently payable, not a number derived from a mathematical formula.
The operator further submitted that the RLLC Act was not directed to site holder protection alone, as the statutory objects in s 3 demonstrated. It sought to balance the interests of site holders (sellers and purchasers) and operators through the setting of site fees: Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Qantas Airways Ltd (2020) 282 FCR 130 at [33]; Carr v Western Australia (2007) 232 CLR 138 at [5]. The protective element in the balance was, in the present case, the constraints of similar site size and location; purchasers gained protection from disclosure and conduct requirements imposed on operators elsewhere in the statute. This was evident from the other provisions within the immediate statutory context of Pt 10 which sought to facilitate the sale of homes by providing a safeguard on permitted site fees of fair market value with a prescribed mechanism for determining that value: Hometown Australia Lennox PL v Bullivant [2022] NSWCATAP 161 at [33]-[34].
The respondent focused his submissions on what was really the subject of the anticipated re-listing if the parties could not agree on how to apply the statutory provisions, such as a dispute on what sites were within the statutory "bucket" in s 109(6)(b).
When probed on the interpretation argument at the centre of this appeal, the respondent submitted that the primary decision at [57] was correct in not applying a concept of the "highest" price but, rather, finding a collective means of combining the sites within s 109(6)(b). That produced a fair result and protected the purchaser against the operator's management of site fees and choice of the highest.
The difficulty with this submission is that it does not grapple with the absence of any reference in the statutory provision itself to reducing the sites within s 109(6)(b) of the RLLC Act to a single figure, with the express recognition that the application of s 109(6)(b) may and is likely to encompass more than one site, and that everything within s 109(6)(b) as well as the single figure within s 109(6)(a) are within the formula for ascertaining the maximum in s 109(5).
It is trite law, consistent with the approach in Blue Sky and later authority to which we have adverted above, that one cannot read into a statutory provision words that are not there when there is meaning to be found in the ordinary meaning of the words that are there, in their context: FCT v Consolidated Media Holdings Ltd (2012) 250 CLR 503 at [39].
It follows that we consider that the operator's submissions support the correct interpretation, despite the somewhat opaque current drafting of RLLC Act, s 109.
The operator's grounds of appeal further challenged the primary decision's finding that "similar" in size meant +/- 10% from the site area being sold. When it was pointed out that this seemed to be a finding about the question of what was "similar" in size in the present proceedings rather than an interpretation mandating the range of statutory similarity, the operator did not press the challenge either as an error of fact requiring leave to appeal or as an error of law for inadequate supportive reasoning. In any event it does not matter on our decision concerning the correct interpretation of s 109(5) and (6) of the RLLC Act.
Since reserving our decision in the proceedings and drafting the foregoing, we have read the reasons of the Appeal Panel in a decision on a substantively similar point in Hometown Australia Lennox Australia PL v Schoenheimer [2023] NSWCATAP 128. We respectfully consider that the present reasons and those reasons are substantially similar on the main matter of interpretation that is the subject of this appeal.
[6]
Appropriate relief - the way ahead
Section 81 of the NCAT Act provides that, in determining an internal appeal, the Appeal Panel may make such orders as it considers appropriate in light of its decision on the appeal. The section sets out a list of available orders, which is not exhaustive. That list includes allowing the appeal, setting aside the primary decision and remitting the whole or any part of the case to the primary level of the Tribunal for reconsideration, either with or without further evidence and in accord with the Appeal Panel's directions.
The operator initially pointed out that the interpretative conclusion which we have reached meant that, on its selection of sites within the s 109(6)(b) "bucket", it had not contravened the requirements of RLLC Act ss 109(5) and (6) so the appeal could be dismissed. However, the operator fairly stated in closing submissions in reply that the dispute between the parties, strongly raised by the respondent, over the sites that went into the "bucket" meant that the appropriate order would be to declare the correct interpretation for s 109(5) and (6) and to remit the proceedings for a re-listing in the Tribunal to argue questions that arose concerning the application of that interpretation, including disputes over "size and location". We shall so order.
The Appeal Panel has recently and comprehensively reviewed the authority on when a matter should be remitted to a differently constituted Tribunal: Chapman v Nicolosi [No 2] [2023] NSWCATAP 73 at [5]-[26]. Applying what is said there, we consider that in the circumstances of this case the matter should be heard by the same primary member if available. The member has simply made a decision on uncontroversial facts and statutory interpretation.
[7]
Orders
We make the following orders:
1. 1. Grant leave to appeal to the extent that leave is required.
2. 2. The appeal is allowed.
3. 3. Remit RC 22/33608 to the Consumer and Commercial Division for hearing on such evidence as the parties file and serve in accord with directions and the rules for that hearing.
4. 4. Direct that the parties may rely without re-filing and re-service on documents already filed and served in RC 22/33608 that are clearly identified in a table that is filed and served in accord with directions and the rules for that hearing.
5. 5. Grant leave to the appellant to rely upon the amended grounds of appeal filed at the hearing and to the extent necessary extend the time for filing such amended grounds to and including date of these orders.
[8]
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: 17 May 2023