Beales & Wood v Kenmont Investments Pty Ltd t/as Ruby Gardens Residential Resort; Ballard & Ors v Kenmont Investments Pty Ltd t/as Sapphire Gardens Lifestyle Resort [2014] QCAT 127

CITATION: Beales & Wood v Kenmont Investments Pty Ltd t/as Ruby Gardens Residential Resort; Ballard & Ors v Kenmont Investments Pty Ltd t/as Sapphire Gardens Lifestyle Resort [2014] QCAT 127 PARTIES: Mrs Laurie Beales and Mr Anthony Wood (Applicants) v Kenmont Investments Pty Ltd t/as Ruby Gardens Residential Resort (Respondent) And Mr James Ballard, Mr Graham Ludlow and Mr Eric Bonwick (Applicants) v Kenmont Investments Pty Ltd t/as Sapphire Gardens Lifestyle Resort (Respondent) APPLICATION NUMBER: OCL116-11 OCL127-11 MATTER TYPE: Other civil dispute matters HEARING DATE: 24 February 2014 HEARD AT: Brisbane DECISION OF: Member Rogers DELIVERED ON: 4 April 2014 DELIVERED AT: Brisbane ORDERS MADE: 1. That the respondent reimburses the charges imposed for the cost of the supply and installation of the EM 1000 single phase interval meter to Mrs Laurie Beales, Mr James Ballard, Mr Graham Ludlow and Mr Eric Bonwick within 14 days. 2. That all other applications be dismissed. 3. That there be no order as to costs. CATCHWORDS: MANUFACTURED HOMES - where home -- 1 of 12 -- 2 owners installed solar power generators - whether park owner obliged to offset power produced against power supplied – whether park owner should pay cost of new electricity meters. Manufactured Homes (Residential Park) Act 2003 (Qld) ss 99A, 92 Queensland Civil and Administrative Tribunal Act 2009 (Qld) ss 46,88 Emmetlow Pty Ltd (trading as Colonial Village) v Pomroy and Ors [2013] QCATA 186 APPEARANCES and REPRESENTATION (if any): APPLICANT: Mrs Laurie Beales and Mr James Ballard appeared for all applicants RESPONDENT: Kenmont Investments Pty Ltd by Mr Vlatko Puljich, Manager of Ruby Gardens Residential Resort and Sapphire Gardens Lifestyle Resort REASONS FOR DECISION [1] These applications relate to two different manufactured home parks however they raise the same issues and have been heard together. The parties have made the same submissions in relation to each application. [2] In each case the applicant home owners have entered a site agreement with the respondent park owner. [3] There are two issues in dispute between the parties. The first is how should the charge for electricity supplied by the park owner to the home owners each month be calculated? The second issue is who should pay for the cost of new electricity meters? History of the Dispute [4] The long history of this dispute informs the current orders sought. [5] In 2010 many home owners in Ruby and Sapphire Gardens, including the five named applicants, installed solar panels. The panels allowed them to produce electricity for their own use. Electricity generated surplus to their needs was discharged into the private grid of the park owner. When they required electricity in excess of what they were producing it was supplied to them by the park owner through the grid. [6] The electricity meters in use at the time of the installation of the panels were bi-directional. This means they spun one direction when electricity -- 2 of 12 -- 3 was being consumed and in the opposite direction when the solar panels were sending power to the grid. So the reading on the meter was a net consumption reading. [7] At that time there was no prohibition on the park owner putting a mark up on the amount it charged home owners for electricity, so it was making a contribution to its costs, or perhaps a profit, on the supply of electricity. The park owner took the view the net consumption method of calculation meant it was paying the same amount for electricity being supplied to it as it was charging the home owners. This method denied it the opportunity to impose the mark up. [8] An application by Mr Robert Reginald Clark against Ruby Developments Pty Ltd OCL193-10 was lodged with the Tribunal on 23 December 2010. This application sought an Order to ‘Stop Park Owner from installing new electrical meters at residences of those who have PV Solar generating systems with existing net flow meters and who do not want to participate in Park Owners proposed buy back scheme. Allow residents a choice of whether they want to remain on existing no buy back electricity scheme and therefore not need new meters, or choose to participate in a proposed buy back scheme and have new meters installed at a cost of around $200’ [9] Following that application, an agreement was reached between the park owner of Ruby Gardens and some home owners with solar panels (referred to in the agreement as ‘the dispute group’) to have a new meter fitted at a cost to home owners of $100 which measured both the electricity consumed and the electricity sent back to the grid. The park owner also agreed to a feed in tariff equal to 60% of the regulated electricity supply tariff.1 This agreement was lodged with the Tribunal on 17 February 2011 with an application for an Order by Consent. One of the current applicant home owners, Mr Wood was a party to this agreement. [10] It is not clear if this agreement was also available to home owners at Sapphire Gardens, however it is evidence an agreement was reached with some home owners. [11] On 1 March 2011 the new provision s 99A of the Manufactured Homes (Residential Park) Act 2003 (Qld) came into operation. This meant the park owner could no longer claim a mark up. Around this time it also became aware that some electricity was leaking from the park’s private grid back into the public Energex system. This meant under the previous agreement it was crediting the home owners for electricity supplied to its grid but was not necessarily getting the benefit of that electricity. This was 1 Agreement dated 17 February 2011 signed by Robert Reginald Clarke and Ruby Developments Pty Ltd contained in Attachment 1 to the Application OCL 116-11 filed 30 August 2011. -- 3 of 12 -- 4 confirmed in a report from Evans Peck dated 22 November 2011.2 The park owner suspended the agreement on the basis of the change in circumstances and started to charge the home owners for the electricity provided to them with no adjustment for the amount returned to the grid. Neither the applicants nor the park owner are seeking to have the previous agreement re-instated. The QCAT proceedings [12] The applicant home owners brought their applications to QCAT in August and September 2011. [13] On 14 March 2013 a QCAT decision was made on the papers, which suggested a fair estimate formula to calculate the chargeable consumption of electricity and gave directions about the future conduct of the application. The applicants appealed the decision. On 23 July 2013 their application for leave to appeal was dismissed by Judicial Member Cullinane on the basis that no final orders had been made in respect of the dispute between the parties and no decision which would give rise to a right to appeal existed. In relation to the directions, it was found they had been made to progress the matter, and there was no basis for the grant of leave to appeal in respect of the directions3. [14] When these applications came before me for hearing on 24 February 2014 I advised the parties at the outset that as a result of the appeal decision of Judicial Member Cullinane I was hearing the matter afresh and was not bound by any previous purported decisions or findings of fact. Orders Sought [15] Both parties were granted leave to amend their request for orders. Accordingly the orders now sought by the parties are as follows: Applicant home owners That the park owner complies with s 99A by ceasing to profit from the sale of energy to home owners from his private grid. That the respondent comply with section 99A by charging the applicants for the quantity of electricity used at their site which is the difference between what is supplied to the site and what is exported from the site. That the park owner pays the relevant home owners retrospectively back to 1 May 2011 when he ceased to comply with the agreement he had with the relevant home owners. 2 Attachment 35 to the Statement and Submissions of Mr Vlad Puljich received 29 November 2011. 3 Decision of Hon K Cullinane AM QC, Judicial Member in APL 140-13 Mrs Laurie Beales and Mr Anthony Wood v Kenmont Investments Pty Ltd t/as Ruby Gardens Residential Resort paras 18, 21. -- 4 of 12 -- 5 That the park owners reimburse home owners for the charges imposed on them for changing the meters at his insistence – as per our original claim. Respondent park owner An Order dismissing the Applicants claims. An Order confirming the Respondent’s conduct with respect to Sections 99A and 92 of the Manufactured Homes (Residential Park) Act 2003 are [is] lawful. Any other Order QCAT considers appropriate. An Order requiring the Applicant to pay to the Respondent the full cost of the “smart” electricity meter fitted at his home (being $250.00). An Order that requires the Applicants to bear any and all costs associated with installing devices that enable the Respondent to measure the flow of surplus electricity from the Respondent’s private electricity grid into the public electricity grid from time to time. An Order that requires the Applicants to reimburse the Respondent [on a monthly in arrears basis] any and all costs that might be incurred by the Respondent in relation to acquiring or obtaining information regarding the quantity of surplus electricity that might flow into the public electricity grid from the Respondent’s private electricity from time to time. An Order that requires each Applicant to pay to the Respondent a monthly [and indexed] Service Fee [equal to $15.27 plus GST as at 17 February 2014] as prescribed by the prevailing Ready Reckoner from time to time in relation to administering each Applicant’s solar electricity account OR , in the alternative, an Order which prescribes a monthly Service Fee that the Tribunal considers appropriate. An Order that requires each Applicant to reimburse the Respondent for any operational costs incurred by the Respondent in relation to administering the Applicant’s solar electricity account. An Order that the Respondent is not required to reimburse the Applicants any monies in relation to the Applicants’ claims pursuant to Section 92 of the Act. Applicants’ submissions and evidence [16] The applicant home owners submit they should be charged for the quantity of electricity they use at the site, not the quantity of electricity supplied to the site.4 They argue this is what is required by s 99A. They say they are currently at a disadvantage to those home owners who have no solar panels. 4 Applicant’s Final Submissions dated 17 February 2014 para 3. -- 5 of 12 -- 6 “Home owners who have PV solar panels installed, (approximately 103 sites) are currently charged for the quantity of electricity supplied to the site while home owners without solar panels installed (approximately 137) are charged for the quantity of electricity they use at the site”5 [17] The applicants submit that nothing has changed since the solar panels were installed except the method of metering. At the time of the installation of the panels the meters then installed, which were bi- directional, measured the electricity consumption in the way now being proposed by the applicants. The applicants submit the usage remains the same and it is this usage figure that the applicants should be charged.6 [18] They submit that is it implicit in the respondent giving permission to install solar systems that it accepted that electricity would be exported from their solar panels to the park grid.7 [19] The applicants submit the respondent is benefiting in two ways. Firstly by purchasing less electricity. It is therefore paying a lower amount to its supplier than it would have to if no electricity was being exported to its grid by the home owners. Secondly by charging home owners for electricity it is not being charged for.8 They submit the intent of s 99A is that the respondent is not to benefit from the sale of utilities and by having the opportunity to sell electricity it is not paying for it is profiting from the sale of utilities.9 [20] The second issue relates to the installation of the new meters. The applicants submit they should not have been charged for the cost of the new meters. They say the applicants in OCL116-11 were charged $100 and the applicants in OCL127-11 were charged $160. They say no evidence has been provided to justify these claimed but contradictory amounts.10 [21] It is also submitted that only Mr Wood was a party to a previous application OCL193-10 and that application related to a different matter and does not prevent Mr Wood from agitating this issue in these proceedings. The agreement reached in those proceedings can not be binding on any other applicant. Respondent’s submissions and evidence [22] The park owner is of the view that it is not required to pay the home owners a feed-in tariff for surplus solar generated electricity returned to the grid. 5 Applicant’s Final Submissions dated 17 February 2014 para 7. 6 Applicants Final Submissions dated 17 February 2014 para 6. 7 Applicant’s Response to Respondent Submission dated 4 January 2012 para 27. 8 Applicant’s Response to Respondent Submission dated 4 January 2012 para 1. 9 Applicant’s Response to Respondent Submission dated 4 January 2012 para 35. 10 Applicants Final Submissions dated 17 February 2014 para 16. -- 6 of 12 -- 7 [23] The park owner says it is willing to adopt the fair estimate formula11 to avoid charging home owners for the surplus electricity generated. However it raises many difficulties which would need to be addressed.12 [24] It submits that it is complying with its obligations under s 99A and has been since 1 March 2011. [25] The park owner says it initially prohibited the installation of solar panels because it was concerned about voltage spikes, the interaction of solar generated electricity with conventional generated electricity and the reaction of Energex.13 However it ‘eventually capitulated to home owner demands and overturned the installation prohibition’14 [26] The park owner states it did not consider it would have to pay home owners for surplus solar generated electricity and at no point did the home owners request or demand that it do so. It goes further to say that the consent to installation did not include consent to the home owners interfering with the park owner’s spinning disk electricity meters and expressed surprise when told the meters were spinning backwards. This meant the home owners were reselling their electricity back to the park owner on a non-commercial basis without the park owner’s consent.15 [27] Once told the meters were spinning backwards it demanded the affected home owners agree to immediately replace their spinning disk meters with a new meter and contribute $160 to the cost of supply and installation of the new meter. The new meters instantly terminated the home owners’ ability to sell their surplus electricity to the park owner at the full tariff rate because they measured the amount of electricity going in to each home from the grid and the amount being produced and returned to the grid. [28] The park owner submits that the spinning disk meters were operational and workable, it did not encourage the home owners to install solar panels, the fact they did unlawfully interfered with the spinning disk meters by making them spin backwards in an authorised (sic) fashion. It states by their actions the home owners changed the way electricity was generated, metered, charged and administered at the site. It submits it is only reasonable for the park owner to expect the home owners to pay the cost of installing the new meters and it never agreed to bear the costs of installing the new meters.16 [29] Without making submissions in relation thereto the park owner has drawn my attention to the ‘Emmetlow case and the Wilson case in which the issue of jurisdiction was considered.’ Jurisdiction 11 Hearing submission for the Respondent dated 24 February 2014 para 31. 12 Respondent’s Final Submissions dated 17 February 2014 para11 and The Respondents Further Statements of Evidence Pursuant to the Tribunal’s Decision dated 14 March 2013 received 26 March 2013. 13 Statement and Submissions of Mr Vlatko Puljich received 6 February 2012 para 18. 14 Statement and Submissions of Mr Vlatko Puljich received 6 February 2012 para 22. 15 Statement and Submissions of Mr Vlatko Puljich received 6 February 2012 para 39. 16 Statement and Submissions of Mr Vlatko Puljich received 6 February 2012 para 71. -- 7 of 12 -- 8 [30] Under s140 of the MH (RP) Act 2003 if there is a site agreement dispute either party may apply to the Tribunal for an order. S14A (1) provides ‘a site agreement dispute is a dispute between the parties to a site agreement about the parties’ rights and obligations under the agreement or this Act. [31] It is accepted the parties have entered a site agreement, the issue is whether the parties have raised a ‘dispute’. [32] In the case of Emmetlow17 the learned Member states in para 9 ‘The expression “dispute” does not enliven a general advisory jurisdiction whenever parties have different views on what an Act requires. There must be a concrete dispute, such as a money claim.‘ He goes on to say ‘In the absence of a concrete dispute, the questions raised by the Owners (and by Colonial) about the meaning and proper application of section 99A are hypothetical. There is considerable authority that a declaratory power, flexible as it is, does not usually warrant the expression of advisory opinions on hypothetical questions……The pressure upon the Tribunal’s already- stretched resources would be intolerable if were to become a bureau for legal advice and advisory decrees.’18 [33] In this case it is clear there is a concrete dispute. The park owner has taken a certain approach to the calculation of electricity charges and acted on it. The applicants are challenging its right to do so and are proposing a different basis for the calculation. They have applied to the Tribunal with a dispute about their rights and obligations. The learned Member in Emmetlow was using a money claim as an example of a concrete dispute rather than restricting the jurisdiction of the Tribunal to those disputes involving a money claim. [34] The Tribunal does have jurisdiction over the dispute as framed. Consideration of s 99A Manufactured Homes (Residential Park) Act 2003 [35] The applicants are seeking an order that the park owner complies with s 99A which provides as follows: S 99A “Separate charge by park owner not to be more than cost of supply for use of utility (1) This section applies if— (a) under a site agreement, the home owner is required to pay the park owner for the use by the home owner of a utility at the site; and (b) the use is separately measured or metered. (2) The park owner must not charge the home owner an amount for the use of a utility that is more than the amount charged by the relevant supply authority for the quantity of the service supplied to, or used at, the site. Maximum penalty—20 penalty units.” 17 Emmetlow Pty Ltd (trading as Colonial Village) v Pomroy and Ors [2013] QCATA 186. 18 [2013] QCATA 186 at para 13. -- 8 of 12 -- 9 [36] The applicants argue they should only be charged for the electricity ‘used at’ the site, which they define as ‘the difference between what is supplied to the site and what is exported from the site.’ They draw the distinction between home owners without panels who are being charged for what is used at the site and home owners with panels who are being charged based on what is supplied to the site. [37] The fact that for the home owners without panels group the amount supplied and the amount used is the same does not change the method of calculation. It is clear both groups are being charged equally for what is being supplied to their site through the grid. [38] There is no method of calculating how much electricity is being ‘used at’ the site of the home owners with solar panels. This results from the fact that there is no measurement of the electricity that is being consumed at the same time it is being generated. The amount of electricity being ‘used at’ the site must be the sum of the amount simultaneously generated and consumed and the amount supplied to the site from the grid. [39] The electricity generated from the solar panels and exported back to the grid does not impact on the calculation of the amount ‘used at’ the site. [40] In this circumstance, of the options offered in s 99A, the only basis for calculation is to consider the amount supplied to the site. Because there is no evidence the park owner is charging the home owner more than it is being charged by the relevant supply authority for the quantity of the service supplied to the site the park owner is not in breach of s 99A. [41] I cannot make the second order sought by the applicants. [42] The third order sought by the home owners is as follows: That the park owner pays the relevant home owners retrospectively back to 1 May 2011 when he ceased to comply with the agreement he had with the relevant home owners. Both parties have made it clear in their submissions that they do not seek a reinstatement of the agreement. They accept the agreement is no longer on foot. Having formed the view the park owner is not in breach of s 99A I cannot make the third order requested by the applicants. [43] The first order sought by the applicants is as follows That the park owner complies with s 99A by ceasing to profit from the sale of energy to home owners from his private grid. This order appears to go to the crux of the application. The applicants are concerned that, having paid for the installation of the solar panels, electricity generated at their cost is being distributed to the park owner who is then in a position to on sell it with out paying for it in the first place. This is notwithstanding a provision which they say is designed to ensure the park owner does not profit from the sale of electricity. [44] This contention is supported by the explanatory notes for s 99A which say that it: “clarifies that park owners must not charge home owners more than the actual cost of providing a utility service (for example, water or electricity) to -- 9 of 12 -- 10 the home owner where the home owner’s use of the utility service is separately measured and metered” 19 [45] The solution to this situation proposed by the applicants was to ensure that electricity returned to the grid was credited to their consumption, not the park owners. [46] It is not argued the electricity that is being fed into the grid is then being returned to the household which generated the power in the first place. This is not how the grid system works. It is simply argued by the applicants they should be credited with the amount of excess electricity they produce. This ignores the park owner’s entitlement to charge for electricity being ‘supplied to’ the home owner. It is also forcing the park owner to give value to the applicants for the electricity being fed into the grid from their solar panels. [47] The origin of the supplied electricity to any particular home site cannot be ascertained. It could be solar electricity fed into the grid or it may have been purchased from the relevant supply authority. However it cannot be established the park owner is charging more for electricity than the ‘amount charged by the relevant supply authority for the quantity of the service supplied to, or used at, the site.’ [48] The wording of s 99A, restricted as it is to regulating the sale of a utility to ‘the amount charged by the relevant supply authority’ cannot be extended to achieve the outcome desired by the applicants. It does not envisage the situation where the park owner would have access to a utility, in this case electricity, from a source other than ‘the relevant supply authority’. [49] The orders sought by the park owner for the most part have been made unnecessary as a result of this decision. The applicant home owners’ meters will be read in the same way as all other meters in the park and no extra costs will be incurred. [50] Because no agreement was reached before the installation of the solar panels for the applicants to sell their excess electricity to the park owner, the park owner will experience a windfall as a result of this decision. In some way this benefit will be shared by all home owners. The reduced purchase of electricity will be reflected in maintaining lower costs to be passed on to all home owners. The applicants will benefit from reduced consumption from the grid. [51] It is concerning the orders sought by the park owner appeared punitive and an attempt to frighten the home owners by inflating the possible consequences of their application. Consideration of s 92 Manufactured Homes (Residential Park) Act 2003 [52] This provision provides: 92 Separate measurement or metering of supply of utility 19 Explanatory notes, Manufactured Homes (Residential Parks) Amendment Bill 2010, p.13. -- 10 of 12 -- 11 (1) This section applies if— (a) the use by the home owner under a site agreement of a utility at the site is not separately measured or metered; and (b) the park owner wishes to separately measure or meter the use of the utility at the site. (2) The park owner must pay the cost of installing a measuring device or meter to measure the use of the utility at the site. Maximum penalty—100 penalty units. [53] While both parties referred to s 92 in their submissions it is clear s 92 does not apply to this application because it is restricted to those circumstances where a site is not separately measured or metered. It is common ground that each of the applicant home owners had a working meter before the new meters were installed. [54] Therefore the question reverts to who should pay for the cost of new electricity meters? [55] It is submitted by the park owner the question of the cost of the meter was before the Tribunal as part of Application No. OCL193-10 and can’t be re agitated without leave under s 46(2) of the QCAT Act. 20 The only applicant in these proceedings who was also a party to that application was Mr Wood. The agreement reached in that application cannot be binding on the home owners who were not a party to it. [56] However Mr Wood was party to a dispute relating to the installation of water meters and, in settlement of that dispute, entered an agreement on 17 February 2011, which addressed the question of who should pay for the cost of the water meters. That agreement was filed in this Tribunal and a consent order was made. Section 88 of the QCAT Act provides An order under this division giving effect to a settlement for a proceeding has the same effect as if it were an order made by the tribunal after deciding the proceeding. [57] Accordingly, because it has the effect of an order of this Tribunal and it provides an answer to the question of ‘Who should bear the cost of the new water meter?’ Mr Wood must now remain bound by the agreement reached and filed in this Tribunal in finalisation of application OCL193-10. [58] The applicant home owners have incurred costs associated with the installation of the solar panels. The home owners and the park owner share the benefits of this investment. The park owner required the installation of the new meters to avoid being forced to acquire, or grant a credit for, the electricity being generated by the solar panels. [59] The park owner claims $250 for the cost of the installation and supply but provided Invoices showing the cost to be $200.21 20 Hearing submission for the Respondent dated 24 February 2014 para 43.6. 21 Statement and Submissions of Mr Vlatko Puljich received 6 February 2012 Annexure 14. -- 11 of 12 -- 12 [60] The assertion by the park owner that it gave permission to the home owners to install the solar panels but not to interfere with the existing spinning disk meters is disingenuous. It was clear electricity would be returned to the grid. [61] What was not addressed or negotiated at the time of installation was “Who will benefit from the electricity generated in excess of the immediate needs of the home owners?” I have found the park owner cannot be forced to purchase or account for the electricity that is being fed to its grid. So it is the park owner, and to some extent all home owners who share in the benefit. [62] By the same reasoning no agreement was reached to determine the question of who should bear the cost of the new meters. It was the decision of the park owner to install the new meters. [63] On balance I have decided the cost of the new meters should be borne by the park owner in relation to each applicant with the exception of Mr Wood [64] As no party had legal representation I decline to make an order as to costs. [65] I order 1. That the respondent must meet the cost of the supply and installation of the EM 1000 single phase interval meter for Mrs Laurie Beales, Mr James Ballard, Mr Graham Ludlow and Mr Eric Bonwick. 2. That all other applications be dismissed. 3. That there be no order as to costs. -- 12 of 12 --