The Randy River Health and Beauty Aid Co Pty Limited trading as Middle Rock Village Park v Consumer Trader & Tenancy Tribunal & Ors

DECISION : The Summons is dismissed. The plaintiff is to pay the costs of the Summons.

CATCHWORDS : Residential park - factors to be considered in determining whether an increase of rent is excessive - role of s 57 of the Residential Parks Act

Consumer, Trader and Tenancy Tribunal Act 2001 (NSW) Legal Profession Act 2004 (NSW) LEGISLATION CITED : Limitation Act 1969 (NSW) Residential Parks Act 1998 (NSW) Residential Tenancies Tribunal Act 1986 (NSW)

CASES CITED : Kilpatrick v Gresser BC8701375, 13/05/1987, unreported, NSWSC

The Randy River Health and Beauty Aid Co Pty Limited trading as Middle Rock Village Park (Pl) PARTIES : Consumer Trader & Tenancy Tribunal (1st Def) Mr Robert Russell (40th Def as representative of the 2nd to 53rd Def's)

COUNSEL : Mr G. W. McGrath (Pl) Ms P. A. Horvath (40th Def as representative of 2nd to 53rd Def's)

Tesoriero Henderson Cotter (Pl) SOLICITORS : Crown Solicitor (1st Def) (submitting appearance) Tenants' Union of NSW Co-op Ltd (2nd to 53rd Def's)

LOWER COURT JURISDICTION : Consumer Trader and Tenancy Tribunal

LOWER COURT JUDICIAL OFFICER : Tribunal Member Moore

• 2 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

30040/07 The Randy River Health and Beauty Aid Co Pty Limited trading as Middle Rock Village Park v Consumer Trader & Tenancy Tribunal & Ors

JUDGMENT 1 HIS HONOUR: The plaintiff is the owner of a residential park. By notice dated 22 June 2006, it purported to increase the rent payable by residents of the park (from 1 September 2006 by $26.00 per week). 2 Applications were made in the Consumer Trader and Tenancy Tribunal (the Tribunal) seeking orders that the purported rent increase was excessive. There were fifty-two applicants. The applications were made in respect of thirty-five sites. The applications were made pursuant to s56 of the Residential Parks Act 1998 (NSW) (the RP Act). 3 The applications were heard together. This took place on 7 September and 20 October 2006. A decision was made on 20 October 2006. 4 On 25 October 2006, the plaintiff sought reasons for the decision. The reasons were not given until 19 March 2007. These written reasons were before this Court. 5 The Tribunal Member was Mr Moore. The hearing of the proceedings was not sound recorded. There is dispute as to what happened during the hearing (including as to exhibits placed in evidence). This problem has presented a formidable obstacle for both the plaintiff and this Court. 6 The defendants were the successful parties (the increase was found to be excessive). The plaintiff now brings proceedings in this Court to challenge the decision of the Tribunal. The proceedings have been brought out of time and they are only maintainable if an extension of time is granted. 7 The Consumer, Trader and Tenancy Tribunal Act 2001 (NSW) (the Act) provides two avenues of challenge. Section 65 enables the granting of relief or remedy, inter alia, where there has been denial of procedural fairness. Section 67 provides an appeal where the Tribunal decides a question with respect to a matter of law. 8 The plaintiff proceeds pursuant to s67 only. The ambit of appeal cannot be equated with error in point of law. It is regarded as being narrower. It is restricted to where there has been a decision on a question and that question is with respect to a matter of law. The view has been expressed that the restriction is to a decision that concerns a pure question of law. 9 The challenge was heard on 12 October 2007. Counsel appeared for the plaintiff and most of the defendants. The parties relied on written submissions, supplemented by oral argument. The application for extension of time and the appeal itself were heard together. The view was taken that an extension of time would not be granted if the appeal was lacking in merit. 10 The Court has a discretionary power to extend time. It is exercised having regard to the relevant circumstances of the particular case and so that the dictates of justice are best served. The onus rests with the applicant. 11 The defendants rent residential sites. Each have installed their own relocatable home pursuant to a residential site agreement. The increase in rent sought by the plaintiff related to site rental only. 12 Whilst the Summons sets out a number of grounds, broadly speaking, there are three areas of appeal. They concern the construction of s57 of the RP Act and in particular (a), (b) and (g) thereof. 13 The relevant provisions are as follows:- "57 Matters to be considered in determining rent applications

The Tribunal may, in determining whether or not a rent increase or rent payable under a residential tenancy agreement or a proposed residential tenancy agreement for residential premises is excessive, have regard to each of the following factors: (a) the general market level of rents for comparable premises in the same residential park and in other residential parks in the locality or a similar locality, (b) the value of the residential premises, … (g) the estimated cost of any services provided by the park owner or the resident under the residential tenancy agreement or proposed agreement,"

14 The role of s57 is to set out factors which are regarded by the legislature as having relevance when the Tribunal performs the function of determining, inter alia, whether or not a rent increase under a residential tenancy agreement for residential premises is excessive. 15 The plaintiff has relied on the decision of Foster J in (Kilpatrick v Gresser BC8701375, 13/05/1987, unreported, NSWSC) as authority for the proposition that "may" should be read as "shall". The judgment in that case was not placed before me and the correctness of the decision was not argued by the parties. What was considered was a similar provision then appearing in the Residential Tenancies Tribunal Act 1986 (NSW). 16 It seems to me that if the Court was to approach the section without the assistance of authority I would be attracted to a different view. In current legislation the word "may" can be found to have been deliberately chosen by the legislature to have its natural meaning (as opposed to "must" or "shall"). This approach is consistent with what has been done by the legislature in various statutes that set forth matters to be considered in the making of determinations (see, inter alia, s363 of the Legal Profession Act 2004 (NSW) and s60E of the Limitation Act 1969 (NSW)). 17 It seems to me that the purpose of s57 is to enable the Tribunal to have regard to those of the specified factors which have relevance to the particular case being considered by it. The factors enumerated therein are not intended to be exhaustive (see (k)). The effect of the section is to confer on the Tribunal a function of making determinations having regard to relevant factors. 18 In approaching his task in this case, the Tribunal Member proceeded to address each and every one of the enumerated factors (including "any other relevant matter"). 19 In the case of factor (a), the section enables the Tribunal a look at the general market level of rents for comparable premises. The Tribunal is thereby enabled to consider such premises in three specified localities (in the same residential park, other residential parks in the locality and a similar locality). 20 In the present case, the Tribunal had before it material in respect of twelve other residential parks. Some of them had been relied on by both sides. The written reasons show that an analysis was made of those residential parks. A conclusion was reached that three of them were in the locality. 21 The written submissions relied on by the plaintiff contain, inter alia, the following:- "8. The CTTT wrongly decided that a geographical nexus with the subject park is necessary or desirable for other residential parks to be considered as "comparable premises in the locality of a similar locality" within the meaning of that expression of s.57 (a) of the RP Act (see reasons for decision, p4). The decision of the CTTT in Hunter v Tenbury Pty Ltd t/as Darlington Beach Resort (Residential Parks) [2003] NSWCTTT 165 (with respect to this issue) constrained its determinations in the present and is wrong and should not be followed. The legislation does not make parks in the same locality any more desirable for comparison purposes than comparable parks in similar localities elsewhere, no doubt with a view to having similar rents throughout the State for comparable residences." 22 The written reasons contain the following [at p4]:- "The park owner said that there was no residential park in the locality enjoying the same geographical advantages as Middle Rock. The park owner relied upon a number of residential parks on the Central, North and South Coasts as comparable to Middle Rock. The Tribunal finds the residential parks relied upon by the park owner may have access to a coastal beach, but this circumstance alone is not sufficient to establish that they are in a similar location to Middle Rock. The Tribunal looks to a desirability of a geographical nexus between residential parks as there may be many extraneous considerations which determine a preference for one locality over another in a different region. The Tribunal notes that the applicants also relied upon Bayway Village, near Stockton, as being in a similar locality to Middle Rock. The Tribunal regards the proximity of the former to the City of Newcastle as placing it in an entirely different geographical setting. The Tribunal regards the three residential parks in the same locality as Middle Rock as comparable to it. Of these, the most comparable residential park in the locality is that of Birubi Holiday Park." 23 My reading of the written reasons does not support the argument advanced on behalf of the plaintiff. It seems to me that the exercise conducted by the Tribunal Member was to have regard to material before him and to determine which of it was the most comparable to the premises that were the subject of the rental increase. In so doing, he was engaged in a task of evaluation of the material before him. He reached the result that the three in the locality were comparable and that one of them (Birubi Holiday Park) was the most comparable. 24 I am not satisfied that there was any error. Each case is going to depend on its own particular circumstances. As in this case, premises located nearby may well provide what are the comparable premises. 25 In dealing with this factor, the Tribunal also expressed the view that it was unable to rely upon a valuation report. The substance of that view was that the Tribunal Member did not find it helpful for the reasons expressed by him and this led him to not giving it any significant weight. I see no error in what was done. In any event, he was merely evaluating a piece of evidence. If there had been error, I do not consider that it would have fallen within the narrow ambit of s67. 26 There is also a bald allegation that the Tribunal Member wrongly refused to accept the experts addendum valuation of September 2006. As I understand the position, whether or not this happened is a matter of dispute and cannot be determined in these proceedings. In any event, a refusal to admit such a report into evidence is unlikely to give rise to appealable error within the ambit of s67. 27 There was also said to be error in the manner in which the Tribunal Member dealt with factor (b). In the written reasons, he observed as follows [at p5]:- "The park owner points to the realised gains in capital value in past sales of relocatable homes upon sites within Middle Rock. The applicants rent the site only from the park owner. The evidence of a capital increase in the value of the resident's home is to some extent, a result of its location. The extent to which the capital gain is a consequence of location is not easily determined. The park owner argues that it suffers because the rents are at a low commercial value, thus undermining the value of the residential park. I understand the park owner to be saying that it is not receiving a commercial rate of return upon the current value of Middle Rock. Although not the subject of evidence, it would appear reasonable to infer that any decline in the rate of return (as rents have not fallen), is a consequence of an increase in capital value of the residential park. This conclusion would contradict the park owner's claim that the value of Middle Rock is being undermined. The Tribunal finds the evidence under this paragraph to be of no significance to the determination of the applications." 28 It needs to be emphasised (as appears from the abovementioned observations) that the plaintiff was relying on the increase in value of the defendants' own relocatable homes.

29 In my view, it is erroneous to contend that he failed to have regard to factor (b). I also consider that he gave sufficient reasons. It may be added that a question of sufficiency of disclosure of reasoning process is not appealable error within the ambit of s 67. 30 It seems to me that the Tribunal Member evaluated what had been put before him in respect of this factor and came to the view that it was not of significance in determining the matter before him. 31 The final matter concerned factor (g). The written reasons contain the following [at p6]:- "Consideration has been given elsewhere to connection to Council's sewer. There was no other evidence as to the cost of any other services to be considered under this paragraph." 32 The Tribunal Member was being asked to take into account the cost of connecting the park to town sewerage (he had given regard to this cost when dealing with factors (f) and (h)). This cost was one that had been incurred "in a past year" and had been the subject of consideration in earlier Tribunal proceedings concerning rental increase. 33 This aspect of the appeal is doomed by reason of evidentiary problems. There is dispute between the parties as to what was in evidence before the Tribunal Member. It is common ground that such a dispute cannot be resolved in these proceedings. 34 Leaving that matter aside, it seems that the costs had in mind may not have fallen within what is contemplated by factor (g). This factor contemplates the "estimated cost" as opposed to "actual costs". The estimated costs need to be of services provided by the park owner under the residential tenancy agreement. The residential tenancy agreement was not before the Court however, it would seem that the connection costs may not fall within the compass of such services. 35 I have carefully considered what was put on behalf of the plaintiff both in written submissions and in oral argument. I have not been satisfied that there was any error demonstrated that fell within the ambit of s67. Accordingly, I have come to the view that the appeal is without merit. 36 In those circumstances, it would be futile to grant an extension of time. Therefore, I reject the application to extend time for the bringing of the appeal. 37 The Summons is dismissed. The plaintiff is to pay the costs of the Summons. **********

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