ZW2 Pty Ltd v Stadthaus and 100 others

reasons for decision Introduction 1More than one hundred residents of Lake Munmorah Residential Resort applied to the Civil and Administrative Tribunal for an order that a rental increase by the park owner was excessive: Residential Parks Act 1998 (NSW), s 55. The Tribunal, in effect, decided that the rental increase was not excessive and made the following order: (1)In consideration of the evidence before it the Tribunal finds that the rent increase is allowed but introduced in two stages as per the attached schedules. 2The schedules referred to in the orders provided for specific rent to apply in respect of each of the applicants for two specified periods of time that varied for different applications. 3The park owner, ZW2 Pty Ltd, has appealed against the Tribunal's decision on the basis, among other things, that the Tribunal did not have power to add a condition that the rent increase be introduced in two stages. We agree. The appeal is upheld on that basis. Legislative scheme 4Under s 55 of the Residential Parks Act a resident may apply to the Tribunal for an order that a rent increase is excessive. In determining such an application the Tribunal may have regard to the matters listed in s 57. The Tribunal's powers when determining such an application are set out in s 58: 58 Orders as to excessive rent increases or rents (1) The Tribunal may, on application by a resident under section 55 or 56, and after considering any matters it considers appropriate under section 57, determine that a rent increase or rent is excessive. (2) If the Tribunal determines that a rent increase is excessive, the Tribunal may order that from a day specified by the Tribunal, not being earlier than the day from which the increased rent was payable, the rent must not exceed an amount specified by the Tribunal and may make such other orders as it thinks fit. (2A) A rent increase that does not exceed any increase in the Consumer Price Index (All Groups) for Sydney, as published from time to time by the Australian Statistician, during the period since the rent was previously fixed may not be determined to be excessive unless, during that period, there has been a reduction or withdrawal, by the park owner, of any goods, services or facilities provided with the residential premises. (3) If the Tribunal determines that a rent is excessive having regard to the reduction or withdrawal by the park owner of any goods, services or facilities provided with the residential premises, the Tribunal may order that from a day specified by the Tribunal, not being earlier than the date of that reduction or withdrawal, the rent must not exceed an amount specified by the Tribunal and may make such other orders as it thinks fit. (4) An order made by the Tribunal specifying a maximum amount of rent: (a) has effect for such period, not exceeding 12 months, as is specified in the order, and (b) binds only the parties to the residential tenancy agreement or the proposed residential tenancy agreement under which the rent is payable. Grounds of Appeal 5The Notice of Appeal did not seek to challenge the Tribunal's decision that the rent increase was not excessive. Rather, the appeal was against that part of the order that provided that the rent increase be introduced in two stages in accordance with the schedules. 6The grounds of appeal relied on by the appellant were to the following effect: (1)The Residential Parks Act 1998 s 58(2) provides that the Tribunal may make "such other order as it thinks fit" only after having determined that the rent increase is excessive. In this case, as the rent increase was not found to be excessive the Tribunal had no power to make the order relating to introduction of the increase in two stages. (2)In regard to eleven of the respondent residents, the rent increase did not exceed the Sydney (All Groups) CPI for the period since the last rent increase and, pursuant to the Residential Parks Act 1998 s 58(2A), the Tribunal may not determine a rent increase to be excessive in those circumstances unless there has been a reduction or withdrawal of services by the park owner. (3)In the alternative, the appellant argued that as the rent increase was not found to be excessive there was insufficient ground to justify postponement of the rent increase in full. In determining that the increase be introduced in two stages the Tribunal had failed to take into account the appellant's evidence relevant to considerations under the Residential Parks Act s 57(f) in regard to the amount of outgoings to be borne by the park owner. 7The appellant submitted that each of the three grounds amounted to a question of law giving rise to a right of appeal, but in respect of ground (3) the appellant also sought leave to appeal on the basis that the decision was not fair and equitable: Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), s 80(2)(b). 8The appellant has a right to appeal on a question of law. The question of whether the Tribunal had power to make an order allowing the rent increase but introducing it in two stages is a question of law: Craig v South Australia (1995) 184 CLR 163 at 176; Cain v New South Wales Land and Housing Corporation [2014] NSWCA 28 at [26]. 9The Reply to the Appeal on behalf of the residents included the submission that the appellant had had every opportunity at the hearing to provide evidence in regard to CPI increases for the nominated residents but had not done so. In addition the submission maintained that the rent increase was excessive and the Tribunal was entitled, pursuant to s 58(2), to make the additional order introducing the increase in two stages. 10Further, the submission in reply was that the Tribunal is not obliged to take into account those matters set out in s 57 but may do so at its discretion. Call over and hearing 11A call-over was conducted by telephone on 16 October 2014. At that time the Appeal Panel granted leave for the parties to be represented by lawyers, the appeal was accepted out of time (without objection) and the matter was set down for a further short hearing by telephone. 12At the hearing on 5 November 2014 the Appeal Panel expressed its preliminary view that the ground of appeal that the Tribunal lacked jurisdiction to make an order that the rent be increased in two stages was correct. If that view is correct, it is not necessary to determine whether any of the other grounds of appeal had been made out. 13We directed the respondent to file and serve any written submissions in response to the issue of jurisdiction by 19 November 2014 and indicated that we would determine the appeal after that date. 14As well as making submissions in relation to jurisdiction, the respondent purported to introduce new evidence in accordance with s 80(3)(b) of the NCAT Act and sought to call the Member below as a witness in relation to his intention in the drafting of the original orders. Decision of the Appeal Panel 15The respondents did not appeal against the Tribunal's decision and we do not need to consider their purported grounds of appeal. The submission that the rent cannot be increased during the currency of a fixed term tenancy ought to have been raised before the Tribunal at first instance or as a ground of appeal by the respondents from the Tribunal's decision. While it is not necessary to determine this issue, the Appeal Panel is of the view that if a fixed term tenancy has expired and the tenancy continues pursuant to a continuation clause, there is no impediment to the park owner increasing the rent in accordance with s 53. 16We do not accept the respondents' submission that the use by the Member of the word "but" in the order demonstrates the Member's intention to limit the rent increase to an amount that is less than that sought and in that sense he has found that the rent increase is excessive. It is inappropriate to call a Member before the Appeal Panel to explain his decision. In any case, the order and the reasons given for it make it clear that the Member did not find the rent increase to be excessive. However, having reached that decision the Member went on to impose conditions which are now the subject of this appeal. 17The first part of the Tribunal's decision below was that "the rent increase is allowed". There was no determination that the rent increase was "excessive" but the effect of the order was that the rent increase was not excessive. Having decided that the rent increase was not excessive, s 58(2) of the Residential Parks Act does not give the Tribunal power to impose conditions on the extent or timing of the increase. In particular, there is no power for the Tribunal to order that the rent increase be introduced in two stages. 18In those circumstances the appellant's submission that the Tribunal lacked jurisdiction to make the second part of the order is correct. 19The Appeal Panel is satisfied that, having determined that the rent increase was not excessive, the only order the Tribunal could make was to dismiss the applications. I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Principal Registrar