This is an appeal against orders of the Tribunal below made on 18 February 2016:
1. Order pursuant to s. 134(3) of the Retirement Villages Act, 1999, that the residence contract between the Applicant and the Resident dated 21 June 2006 is terminated.
2. Order pursuant to s. 134(4) of the Retirement Villages Act, 1999, that the Respondent vacate the premises the subject of the said residence contract on or before 31 March 2016.
3. There is no order as to costs.
The relevant facts as found by the Tribunal below are, as we understand it, for the most part uncontentious:
a. On 21 June 2006, the Respondent commenced to occupy her unit within the retirement village complex conducted by the Applicant under a residential tenancy agreement, with a fixed term expiring on 21 January 2007 (the "Agreement") and which was a 'residence right' within the meaning of that defined term in the Retirement Villages Act 1999 (the Act).
b. On 22 January 2007, after the conclusion of the fixed term, the basis for the Respondent's occupancy of the premises was under a continuing agreement, by reason of the further operation of the provisions of the Act.
c. On 14 November 2013 the Applicant acquired all of the land from the former operator of the retirement village, Frank Whiddon Masonic Homes of NSW ("Whiddon").
d. In February 2014, the Applicant took the decision to convert the land holding which constitutes the retirement village into a strata scheme.
e. On 5 March 2014, time expired for village residents to accept an offer to convert their continuing agreements into new leases with fixed terms in consideration of the payment of $5,000.00.
f. On 6 March 2014, the Respondent elected not to accept such offer to convert her continuing agreement into a new lease.
g. In May 2015, the Applicant determined to sell residential units within the strata scheme.
h. On 14 May 2015, the Applicant served a Notice to Vacate upon the Respondent under the provisions of the Agreement.
i. On 16 May 2015 the Respondent notified the Applicant in writing that she declines to give vacant possession of the residence in which she resides.
j. On 25 May 2015, the Applicant lodged a plan of strata sub-division of Lot 1 in Deposited Plan 1209327 with the Land & Property Information unit of the NSW Department of Finance and Services.
k. On 10 July 2015 the plan of sub-division was registered as Strata Plan 91299.
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m. On 18 August 2015 a Notice of Intention to seek Termination was served by the Applicant upon the Respondent pursuant to s. 131(1) of the Act.
n. On 20 August 2015, the Applicant filed its application with the Tribunal.
A number of provisions of the Retirement Village Act 1999 (RV Act) are relevant to this case:
4 Definitions
(1) In this Act:
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Residential Contract means a contract that gives rise to a residence right.
Residential Right of a person means the person's right to occupy residential premises in a retirement village, being a right arising from a contract:
(a) under which the person purchased the residential premises, or
(b) under which the person purchased shares entitling the person to occupy the residential premises, or
(c) in the form of a lease, licence, arrangement or agreement of any kind, other than a residential tenancy agreement in the form prescribed under the Residential Tenancies Act 2010 :
(i) that is entered into under Division 5 of Part 10, or
(ii) that contains a term to the effect that this Act does not apply to the residential premises the subject of the agreement, or
(d) in the form of any other contract of a kind prescribed by the regulations,
or any other right of a kind prescribed by the regulations.
Residential tenancy agreement has the same meaning as it has in the Residential Tenancies Act 2010 .
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Tenant means a person who has the right to occupy residential premises under a residential tenancy agreement in the form prescribed under the Residential Tenancies Act 2010 :
(a) that is entered into under Division 5 of Part 10, or
(b) that contains a term to the effect that this Act does not apply to the residential premises the subject of the agreement.
Note: A tenant is not a "resident"
Village contract means:
(a) a residence contract, or
(b) a service contract, or
(c) a contract under which a resident of a retirement village obtains the right to use a garage or parking space, or a storage room, in the village, or
(d) any other contract of a kind prescribed by the regulations for the purpose of this definition.
Note : A residence contract, a service contract and any other village contract may be contained in a single document.
5 Meaning of "retirement village"
(1) For the purposes of this Act, a retirement village is a complex containing residential premises that are:
(a) predominantly or exclusively occupied, or intended to be predominantly or exclusively occupied, by retired persons who have entered into village contracts with an operator of the complex, or
(b) prescribed by the regulations for the purposes of this definition.
(2) It does not matter that some residential premises in the complex may be occupied by employees of the operator or under residential tenancy agreements containing a term to the effect that this Act does not apply to the premises the subject of the agreement (instead of being occupied under residence contracts), or that those premises do not form part of the retirement village.
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11 Application of Act
(1) This Act applies to all retirement villages (whether established before or after the commencement of this section) and so applies despite the terms of any contract, agreement, scheme or arrangement (whether made or entered into before or after the commencement of this section).
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13 Effect of Act on other legislation
(1) This Act is to be construed as being in addition to, and not in derogation of, any other law of the State, except as otherwise provided by this Act.
(2) The Landlord and Tenant Act 1899, the Landlord and Tenant (Amendment) Act 1948 and Part 8 of the Residential Tenancies Act 2010 do not apply to or in respect of residential premises the subject of a residence contract under this Act.
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29 Variation or replacement of village contracts
(1) A purported variation of a village contract, and a purported termination of a village contract and entry into a new village contract by the same parties in relation to the same residential premises, is of no effect (and the contract continues as in force before the purported variation or termination) unless the resident who is a party to the contract obtains a written certificate in accordance with this section.
(1A) An operator must not purport:
(a) to vary a village contract, or
(b) to terminate a village contract and enter into a new village contract in relation to the same residential premises,
unless the resident who is a party to the contract has obtained a certificate in accordance with this section.
Maximum penalty: 100 penalty units.
(2) The certificate:
(a) must be signed by an Australian legal practitioner of the resident's choosing, and
(b) must contain a statement to the effect that:
(i) the Australian legal practitioner explained to the resident the effect of the proposed variation of the contract (or the proposed new contract, as the case may be), and
(ii) the resident appeared to understand the explanation and to consent to the variation (or to the new contract).
(3) Sections 27 and 28 apply in respect of a variation of contract as if the variation were a new contract.
(4) This section does not apply if the resident requested the variation or new contract.
(5) A resident is not obliged to agree to a variation or replacement of his or her village contract because of the enactment of this Act (or for any other reason).
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129 How and when residence right or contract is terminated
(1) A residence right arising from a contract relating to residential premises in respect of which the resident is a registered interest holder (other than a person referred to in section 7 (1) (c)) terminates only on the completion of the sale of the premises.
(1A) A residence right arising from a residence contract that is in the form of an assignable lease terminates on the assignment of the lease.
(2) A residence contract (other than a contract referred to in subsection (1) or (1A)) and the residence right under the contract, terminate:
(a) on the date on which the resident permanently vacates the premises, being a date that is (except as otherwise provided under this Part) at least one month after the date on which the resident gives the operator written notice of intention to vacate the premises (or such earlier date as the residence contract may allow), or
(b) on the date on which the resident permanently vacates the premises, or
(c) on the date on which the resident permanently vacates the premises after receiving notice of the operator's intention to apply to the Tribunal for an order terminating the resident's residence contract, or
(d) on disclaimer (for example, on renunciation by the resident accepted by the operator), or
(e) on the death of the last surviving resident under the contract, or
(f) on the date specified by the Tribunal in an order under section 143 declaring that the resident has abandoned the premises, or
(g) on the date on which the contract is terminated by the Tribunal, or
(h) if the contract is frustrated:
(i) on the eighth day after the date specified in the notice of termination given under section 132, unless application is made to the Tribunal within the time allowed by that section (or the notice of termination is withdrawn within that time), or
(ii) on the date specified by the Tribunal, if the Tribunal determines that the contract is frustrated.
(3) Termination of a residence contract does not affect any other right or obligation of the parties under a village contract.
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130 Tribunal cannot terminate certain residence contracts
The Tribunal does not have jurisdiction under this Act:
(a) to terminate a residence contract if the resident is a registered interest holder (other than a person referred to in section 7 (1) (c)) in respect of the premises concerned, or
(b) to determine any question as to the title to any land.
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133 Termination on medical grounds
(1) The operator of a retirement village or a resident of the village may apply to the Tribunal for an order terminating the residence contract of the resident if the operator or resident concerned is of the opinion that residential premises occupied by the resident are unsuitable for occupation by that resident because of his or her physical or mental incapacity.
(2) The Tribunal may, on application under this section, make an order terminating the residence contract, but only if:
(a) it is of the opinion that the residential premises occupied by the resident are unsuitable for occupation by the resident because of the resident's physical or mental incapacity, and
(b) having considered the circumstances of the case, it is of the opinion that it is otherwise appropriate to make an order terminating the residence contract.
(3) The Tribunal must not form an opinion under subsection (2) (a) unless it has considered a medical report with respect to the resident prepared by a medical practitioner nominated by the resident or, if such a report is not supplied or a nomination is not made, has given the resident a reasonable opportunity to supply such a report or make such a nomination.
(4) The Tribunal is entitled to form an opinion under subsection (2) regardless of who made the application for the order to terminate the residence contract.
(5) In determining whether to terminate a residence contract under this section, the Tribunal may:
(a) with the consent of the resident, request the Director-General of the Department of Health or any other person or any body to prepare a report with respect to the resident's physical or mental capacity, and
(b) have regard to any such report and any other report prepared on behalf of the resident or the operator, and
(c) have regard to any terms of the residence contract relating to the transfer of the resident to other residential premises.
Note. A report referred to in paragraph (a) might be requested, for example, from a body known as an Aged Care Assessment Team.
(6) If the Tribunal makes an order terminating a residence contract under this section, the Tribunal must fix in the order a date by which the resident must vacate the residential premises concerned.
134 Termination on grounds of breach of village contract or rules
(1) The operator of a retirement village may apply to the Tribunal for an order terminating the residence contract of a resident of the village who breaches any village contract between the resident and the operator or breaches a village rule.
(2) A resident of a retirement village may apply to the Tribunal for an order terminating his or her residence contract if the operator breaches any village contract between the resident and the operator or breaches a village rule.
(3) The Tribunal may, on application made under this section, make an order terminating the residence contract, but only if it is satisfied that:
(a) the breach, in the circumstances of the case, is such as to justify termination of the contract, or
(b) persistent breaches by the resident or operator concerned are, in the circumstances of the case, such as to justify termination of the contract.
(4) If the Tribunal makes an order terminating a residence contract under this section, the Tribunal must fix in the order a date by which the resident must vacate the residential premises concerned.
(5) If the Tribunal forms the opinion, in the course of proceedings under this section, that a village rule is unjust, unconscionable, harsh or oppressive, it may make an order:
(a) setting aside the rule, or
(b) modifying the operation of the rule, either in its application to the operator or to a resident (or to some or all of the residents) of the retirement village concerned.
135 Termination on grounds of resident's causing serious damage or injury
(1) The Tribunal may, on application by the operator of a retirement village, make an order terminating a residence contract if it is satisfied that the resident has intentionally or recklessly caused or permitted, or is likely intentionally or recklessly to cause or permit:
(a) serious damage to any part of the village, or
(b) injury to the operator or an employee of the operator or any other resident.
(2) If the Tribunal makes an order terminating a residence contract under this section, the Tribunal must fix in the order a date by which the resident must vacate the residential premises concerned.
(3) An application under this section may be made whether or not the operator has given notice of his or her intention to apply to the Tribunal under this section for an order terminating the residence contract.
136 Termination on grounds of upgrade or change of use
(1) The Tribunal may, on application by the operator of a retirement village, make an order terminating a residence contract if it is satisfied that:
(a) for the purpose of improving the village, the operator intends to carry out such substantial works in the village as require vacant possession of the residential premises concerned, or
(b) it is appropriate that the land on which the village is situated should be used for a purpose other than a retirement village.
(2) However, the Tribunal is not to make an order terminating a residence contract under this section unless it is also satisfied that:
(a) the operator has given the resident at least 12 months' written notice of the operator's intention to make an application under this section, and
(b) development consent and any other necessary approvals to carry out the works or use the land for the other purpose have been obtained, and
(c) the operator has obtained (or made available) for the resident alternative accommodation:
(i) that is of approximately the same standard as, and requires no greater financial outlay on the part of the resident than, the residential premises the subject of the residence contract, and
(ii) that is acceptable to the resident or reasonably ought to be acceptable to the resident.
(3) If the Tribunal makes an order terminating a residence contract under this section, the Tribunal:
(a) must fix in the order a date by which the resident must vacate the residential premises concerned, and
(b) must specify in the order the penalty that the operator will incur if the works are not substantially commenced, or action to facilitate the use of the land for the other purpose not taken, within 6 months after the date fixed under paragraph (a), and
(c) may order the operator to allow the resident to return to the residential premises, under a contract identical to the contract being terminated, on completion of the works, and
(d) may make such other orders (including an order that the operator pay to the resident compensation for the resident's loss of rights under the residence contract) as it thinks fit.
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139 Operator not to recover possession of premises except by order
(1) A person must not (whether acting on his or her own behalf or on behalf of another):
(a) enter, or attempt to enter, residential premises within a retirement village, or
(b) remove, or attempt to remove, a resident from residential premises within a retirement village, or
(c) take any other action that is intended, or is likely, to cause a resident to vacate residential premises within a retirement village,
for the purpose of recovering possession of the residential premises otherwise than in accordance with this or any other Act or law.
Maximum penalty: 200 penalty units.
(2) (Repealed)
(3) A court before which proceedings for an offence under this section are brought may (in addition to any other penalty) order the person who committed the offence or any person on whose behalf that person acted to pay to the person entitled (or formerly entitled) to occupy the premises concerned such compensation as it thinks fit.
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149 Application of Part
(1) This Part extends to apply in respect of a former occupant of a retirement village whose residence contract was in force immediately before the commencement of this Part, except as otherwise provided by this Part.
(2) For the purposes of this Part, a former occupant referred to in Division 4 of Part 6 is taken to have permanently vacated his or her residential premises in the retirement village on the date on which he or she died or moved out of the village, and nothing in that Division affects any rights or obligations of the resident under this Part.
(3) This Part has effect despite the provisions of any village contract.
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199 Contracting out prohibited
(1) The provisions of this Act and the regulations have effect despite any stipulation to the contrary in any agreement, contract or arrangement, and no agreement, contract or arrangement, whether oral or wholly or partly in writing, and whether made or entered into before or after the commencement of this section, operates to annul, vary or exclude any of the provisions of this Act or the regulations.
(2) Subsection (1) applies in relation to the constitution of a corporation in the same way as it applies in relation to an agreement, contract or arrangement.
(3) A person must not enter into any agreement, contract or arrangement with the intention, either directly or indirectly, of defeating, evading or preventing the operation of this Act.
Maximum penalty: 100 penalty units.
(4) However, the operator of a retirement village may enter into a residential tenancy agreement, in the form prescribed under the Residential Tenancies Act 2010, that contains a term to the effect that this Act does not apply to the residential premises the subject of the agreement, and, in entering into the agreement, the operator and the tenant under the agreement are taken not to contravene this section.
The residential tenancy agreement referred to in the facts recited above is dated 20 June (presumably 2006, as the tenancy commences from 21 June that year.) It purports to be made under the Residential Tenancy Act 1987 (RT Act). It provides for a term of 7 months and for a continuation of the tenancy in the following terms:
At the end of the term the tenant can stay in the residential premises at the same rent (or at an increased rent if the rent is increased in accordance with the Residential Tenancies Act 1987) but otherwise under the same terms unless or until the agreement is ended in accordance with the Residential Tenancies Act 1987.
The tenancy agreement contains standard terms and conditions, and a section headed "Notes", which we think should be regarded as part of the agreement, as they appear above the signatures. The Notes inter alia describe procedures for terminating the tenancy replicating as it seems the provisions of the RT Act. One clause of the tenancy agreement merits special mention because it was fundamental to the decision below:
TERMINATION OF AGREEMENT
31. The tenant agrees to return all keys and operating devices when the agreement terminates and give vacant possession of the premises to the landlord or the landlord's agent as soon as possible providing at the same time a forwarding address.
In seeking to evict the appellant from the premises the respondent served two notices upon her. The first, served 14 May 2015, provided:
Notice To Vacate
14 May, 2015
Stella Wei
Unit 12
1 Fabos Place
Croydon Park NSW 2133
You are required by the landlord/operator to give vacant possession of Unit 12, 1 Fabos Place Croydon Park no later than 17 August 2015, that being more than 90 days after the date of this notice.
The fixed term of your agreement has ended and the landlord/operator requires vacant possession in accordance with clause 31 on page 3, notes clause 7 entitled "How To End A Continuing Agreement" and notes clause 8 entitled "Vacant Possession" on page 6 of your lease agreement (contract), which commenced on 21 June 2006.
This notice was delivered in person by Armando Errichiello of Rich and Oliva Real Estate on 14 May 2015
Signed,
[SIGNATURE]
Armando Errichiello
Rich and Oliva Real Estate
For and on behalf of
Croydon Park Apartments Pty
The second notice was purportedly served under s 131 of the RV Act on or about 18 August 2015. It was in this form:
Notice of intention to seek termination (from an operator to a resident)
Retirement Villages Act 1999, section 131
Stella Wei
Unit 12, 1 Fabos Place
Croydon Park NSW 2133
This notice is to advise you that it is our intention to apply to the Consumer, Trader and Tenancy Tribunal or the Civil and Administrative Tribunal for an order terminating your residence contract.
This notice does not require you to vacate the premises. The decision as to whether your contract is terminated rests solely with the Tribunal. You will have an opportunity to argue your case at a hearing of the Tribunal. The Registry of the Tribunal will notify you regarding the date and venue of the hearing.
If, however, you choose to move out after receiving this notice your contract will terminate on the date on which you deliver up vacant possession of the premises. You will not be liable to pay any rent or recurrent charges that arise in respect of the premises after that date, and any refund of your ingoing contribution must be made no later than one month after that date.
The reason for seeking an order to terminate your residence contract is as follows:
☐ in our opinion the premises you currently occupy are no longer suitable for your continued occupation on the grounds of your physical or mental incapacity
☑ You have breached clause 31 on page 3, Clause 7 and Clause 8 on page 6 of your village contract by not vacating your premises within the period specified in your notice to vacate dated 14 May 2015.
☐ you have breached village rule number [insert rule number] by [insert details of alleged breach]
Note: If notice is given on the grounds of a breach of a village contract or the village rules, the Tribunal may refuse to make an order terminating the residence contract if the breach is remedied. The Tribunal may also refuse to make an order if it does not agree that the breach was serious or persistent enough to justify terminating the contract.
☐ you have intentionally or reaklessly caused or permitted, or are likely to intentionally or recklessly cause or permit [delete whichever not applicable]:
(a) serious damage to any part of the village [diagonal line drawn from (a) to (d)]
(b) injury to the operator
(c) injury to the employee of the operator
(d) injury to any other resident
☐ it is our intention to carry out such substantial works in the village that we require vanct possession of your residential premises
☐ it is our intention to use the land on which the village is situated for a purpose other than a retirement village
Signature of operator or operator's nominee:
[signature of Armando Errichiello]
Printed name of operator or nominee: Croydon Park Apartments Pty Ltd
Armando Errichiello
Date of signature: 18 August 2015
This notice was delivered by hand by Armando Errichiello on 18 August 2015.
Note: This notice lapses if the operator does not apply to the Tribunal for an order terminating your residence contract within 14 days after service of the notice.
Rich & Oliva P.TY L.T.D
129-133 Georges River Road, Croydon Pa.rk NSW 2133
Phone: 9716 6222 Fax: 9797 9760
The learned member below held correctly, we consider, that the notice of 18 August 2015 complied in all formal aspects with s 131. The notice seems to assume a pre-existing breach of the terms of the tenancy agreement and this hypotheses was accepted by the Tribunal below. There seems also to be an inherent assumption by the Tribunal that the rights of the appellant in this case cannot be terminated except under ss 132, 133, 134, 135, 136 and 136A of the RV ACT.
If the view be correct that a resident contract can only be determined pursuant to ss 132, 133, 134, 135, 136 and 136A of the RV Act, it would be odd that the protection seemingly assured by the RV Act to tenants could so easily be overcome by the device of establishing breach of a "notice of vacate".
This is in effect what the Tribunal found. The respondent through its counsel contends, as we understand the argument, that the RV Act does not interfere with the contractual relationships between the parties which notwithstanding the RV Act is capable of being terminated within the RT Act, the relevant provisions of which are set out under the heading "Notes" referred to above. The submission continued that as the notice was issued pursuant to contractual terms it was valid and enforceable.
Further it was submitted that s 199 of the RV Act does not apply because the termination rights created by the terms of the contract are ancillary to the rights and obligations set out in the RV Act.
We are unpersuaded by the respondent's submissions, which incidentally seem contrary to a section of the Minister's (Hon John Watkins) Second Reading Speech:
Importantly, the bill enshrines the right of residents to security of tenure. The last thing residents should need to worry about is the possibility of being, unwillingly evicted from their homes. A penalty of up to $22,000 will be imposed on anyone who illegally evicts a retirement village resident.
Unless a resident and operator agree to terminate a residence contract, an order will need to be obtained from the Residential Tribunal before a residence contract can end. Either party will be able to seek termination for persistent or serious breaches of a village contract or village rules, or if the premises become unsuitable for occupation by the resident because of his or her physical or mental incapacity. The tribunal will need to be satisfied that there is no other reasonable course of action before terminating a residence contract for these reasons.
In our opinion, where a residential tenancy agreement relate to premises within a retirement village it constitutes a residence contract within the RV Act unless it falls within the exclusionary provisions of para (c) or (d) of the definition of resident right. There is no suggestion that such exclusion applied in this case.
Part 9 of the RV Act provides for the termination of a residence contract in terms which in our view leave no room for the application of inconsistent contractual rights, a position reinforced by s 199. It follows that, in our opinion, a notice requiring a tenant to vacate or a notice purporting to terminate a contract is invalid unless given in accordance with Part 9 of the RV Act. To the extent that he found otherwise, the learned member erred in law.
Moreover, there is another basis for holding that the Tribunal erred. Clause 31 of the lease in terms predicates the obligation to give vacant possession following a prior termination. A residence contract is not in our view terminated by a notice to vacate, but by order of the Tribunal. Sections 129(g), 131(1), 133(1), 135(1), 136(1) etc make this clear. The exception in s 132 is explained by the exigencies of the situation which the section envisages. In other words, in our opinion, even if the notice to vacate was valid, its expiration did not of itself enliven the obligations imposed by cl 31.
In the result, in our view, the appeal should be allowed.
[2]
ORDERS:
1. Appeal allowed.
2. Orders 1 and 2 made by the Tribunal below quashed and in lieu order that the proceedings in the Tribunal be dismissed.
3. No order as to the costs of the appeal.
[3]
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: 28 July 2016