Bennett v Kenmont Investments Pty Ltd [2013] QCATA 176

CITATION: Bennett v Kenmont Investments Pty Ltd & Ors [2013] QCATA 176 PARTIES: Colin Bennett (Applicant) V Kenmont Investments Pty Ltd t/as Sapphire Gardens Residential Resort Dalma Plastering Pty Ltd t/as Sapphire Gardens Residential Resort (Respondents) APPLICATION NUMBER: APL112-13 MATTER TYPE: Appeals HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: K Dodds, Judicial Member DELIVERED ON: 20 June 2013 DELIVERED AT: Brisbane ORDERS MADE: The appeal is dismissed. CATCHWORDS: APPEAL – LEAVE TO APPEAL – MANUFACTURED HOMES – INTERLOCUTORY APPLICATION – where park owner applied to Tribunal under s 71 of the Manufactured Homes (Residential Parks) Act 2003 to increase site rent – where park owner claimed rent increase necessary to cover significant increased operational costs – whether park owners‟ claim confined to increased operational costs in previous site rent period Manufactured Homes (Residential Parks) Act 2003 (Qld) s 69, s 70(3)(j), s 70(6), s 71(1), s 71(2), s 71(3), s 71(9) APPEARANCES and REPRESENTATION (if any): This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act). -- 1 of 5 -- 2 REASONS FOR DECISION [1] This is an application filed 13 March 2013 for leave to appeal a decision of the Tribunal given on 20 February 2013. The decision was made in an interlocutory application in OCL082-12 by residents of the Sapphire Gardens Residential Resort, a residential park within the meaning of that term in the Manufactured Homes (Residential Parks) Act 2003 (the Act). Background [2] OCL082-12 is an application by the respondent to the Tribunal pursuant to section 71(8) of the Act for an order of the Tribunal about a proposed site rent increase because the respondent and home owners in the resort had not been able to agree about a proposed rent increase. A notice had been given by the park owner pursuant to s 71(3) of the Act to the appellant and others who, it may be understood, are residents of Sapphire Gardens Residential Resort. [3] Section 71(1) of the section limits the operation of the section. The section applies if: (a) the park owner wishes to increase the site rent payable under a site agreement [defined in the dictionary to the Act to mean an agreement between a park owner and a home owner]; and (b) section 69 of the Act does not apply to the proposed agreement; and (c) the proposed increase in site rent is necessary for the park owner to cover – (i) significant increased operational costs in relation to the park including significant increases in rates taxes or utility costs for the park; or (ii) unforseen significant repair costs in relation to the park; or (iii) significant facility upgrades in relation to the park. [4] Section 71(2) provides that the proposed increase in rent cannot be based on a market review of site rent. [5] Section 71(3) provides: The park owner must give the home owner for the site a notice stating the following – (a) the amount of the increased site rent; (b) the basis for the proposed increase; (c) the day the proposed increased site rent is first payable… [6] Section 71(8) provides that if the park owner and home owner(s) do not agree on the proposed rent increase the park owner may apply to the Tribunal. [7] Section 71(9) of the Act provides: -- 2 of 5 -- 3 In deciding the application the tribunal may have regard to the matters mentioned in section 70(3)(d) to (l). [8] Section 70(3)(d) to (l) of the Act provides: (d) the increased site rent compared to the previous site rent; (e) the frequency and amount of past increases in the site rent payable under the agreement; (f) any increase in the CPI number during the previous site rent period; (g) the amenity or standard of the common areas and communal facilities; (h) any withdrawal of a community facility or service previously provided at the park; (i) any addition of a community facility or service not previously provided at the park (j) any increase in the park owners operating costs for the park during the previous site rent period; (k) whether the increase is fair and equitable in all the circumstances of the case; (l) anything else the tribunal considers relevant. The applicant’s contention [9] The interlocutory issue involved section 71(1)(c)(i) of the Act. It arose because the park owner in stating the basis for the proposed increase required under section 71(3)(b) used four financial years from 1 July 2008 to 30 June 2012 as a basis for the increase proposed (referred in argument as the relevant rent period). [10] The applicant contended before the Tribunal and contends on this application that was incorrect and contrary to the Act, That the „relevant rent period‟ was the „previous site rent period‟ which, section 70 (6) of the Act says “means the period commencing on the first day the previous site rent was payable and ending on the day the tribunal decides the application.” That was a period commencing on 1 July 2011. [11] The Tribunal did not agree. It ordered that the application to restrict „the relevant rent period‟ to the „previous site rent period‟ as defined in section 70(6) was denied. [12] The applicant‟s argument focuses on the words „increased operational costs‟ in section 71(1)(c)(i), ”the park owners operating costs for the park for the previous site rent period” in section 70(3)(i) and the definition of „previous site rent period‟ in section 70(6). It was contended that the “significant increased operational costs in relation to the park” in section 71(1)(c)(i) are restricted to those for the previous site rent period. -- 3 of 5 -- 4 Discussion [13] It is useful to notice the scheme in sections 69, 70 and 71 of the Act. Section 70 applies if: (a) the park owner for a residential park gives a home owner notice, under section 69, of an increase in the site rent payable under the site agreement between the parties; and (b) the home owner considers the increase is excessive [14] Subsection (2) provides for the home owner to make an application to the Tribunal within 28 days after receiving the section 69 notice. The Tribunal may make orders reducing the amount of the increase, setting aside the increase, confirming the increase on conditions it deems appropriate or another order it considers appropriate. [15] Section 70(3) provides: „In deciding the application the tribunal may have regard to the following…‟. (Subparagraphs (a) to (l) then follow.) [16] Section 69 applies: (1) … if a site agreement- (a) provides for an increase in the site rental payable under the agreement; and (b) states how the amount of the increase is to be calculated. [17] It goes on to provide: (2) If the park owner wishes to increase the site rent under this section, the park owner must give the home owner a notice stating the following – (a) the amount of the increased site rent; (b) how the increased rent has been calculated (c) the day the increased rent is first payable… [18] The scheme of the sections then is that section 69 applies in the circumstances provided. Section 70 applies when a section 69 notice has been given, the home owner considers the increase in site rent excessive and an application is made to the tribunal by the home owner. It also defines in subsection (6) what is meant by ‟previous site rent‟ and ‟previous site rent period‟ for the purpose of the section. Section 71 applies when a park owner wishes to increase site rent payable under a site agreement and section 69 does not apply to the proposed increase. [19] The 2010 amendments to the Act did away with the pre amendment position that in a section 71 application to the Tribunal, increase in site rent could be based upon a market review of site rent. [20] Since then, the tribunal, in its consideration of a section 71 application, is required to be satisfied by an applicant that any increase in site rent is -- 4 of 5 -- 5 necessary because of significant increased operational costs, significant unforseen repair costs or significant facility upgrades. The section does not otherwise mandate the matters the Tribunal must have regard to in its task. It simply provides in section 71(9) that it may have regard to the matters in section 70(3)(d) to (l). While subparagraph (j) provides the Tribunal may have regard to “any increase in the park owners operating costs for the park during the previous site rent period”, subparagraphs (k) and (l) provide respectively the Tribunal may have regard to ”whether any increase is fair and equitable in all the circumstances of the case” and “anything else the tribunal considers relevant”. [21] I do not think the appellant‟s argument is correct. The Act does not tie the Tribunal‟s consideration of a section 71 application to the matters in section 70(3)(d) to (l).They are simply matters which may be considered. The central question for the Tribunal is whether the applicant has discharged its onus of establishing what is sought is necessary in terms of significant increased operational costs, unforseen repair costs, facility upgrades. If it be the case the park owner wishes to attempt to do that by referring to four previous financial years, the Act does not prevent that and the Tribunal may consider what, if any, relevance or weight the evidence has to the essential question; viz. is the increase necessary to cover significant increased operational costs, significant unforseen repair costs or significant facility upgrades in relation to the park. [22] To the extent financial years extending back beyond the previous site rent period at the time of the application are before the Tribunal in evidence, their relevance to the essential question may be assessed; for instance, to what extent did rent increases related to previous site rent periods take account of increased and what costs. Decision [23] Leave is required to appeal an interlocutory decision of the Tribunal pursuant to section 142(3)(a)(ii) of the Queensland Civil and Administrative Tribunal Act 2009. Leave will only be given in appropriate circumstances, for instance, there is a reasonably arguable case of error by the Tribunal. Leave is necessary to correct a substantial injustice. Having considered the appellant‟s submissions and the Act I am not satisfied there is any basis upon which leave should be given. [24] The appeal is dismissed. -- 5 of 5 --