Caplick one Executor of The Estate of Caplick v Milstern Retirement Services Pty Ltd and Anor [2012] QCAT 147

CITATION: Caplick one Executor of The Estate of Caplick v Milstern Retirement Services Pty Ltd and Anor [2012] QCAT 147 PARTIES: Lindsay Caplick one Executor of The Estate of Hazel Millicent Caplick v Milstern Retirement Services Pty Ltd Milstern Retirement Living Pty Ltd APPLICATION NUMBER: VH008-09 MATTER TYPE: Other civil dispute matters HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Dr John Forbes, Member DELIVERED ON: 12 April 2012 DELIVERED AT: Brisbane ORDERS MADE: 1 The Applicant shall forthwith list the estate’s right to Unit 13 for sale with at least three (3) local estate agents, instructed by him alone. 2 If Unit 13 is not sold at a price acceptable to the Applicant by 30 June 2012, the Applicant shall within 21 days thereafter arrange an auction of the right of residence in the unit with a reserve, if any, at the discretion of the Applicant. 3 The Respondents shall use their best endeavours to assist the Applicant to comply with Orders 1 and 2 above. 4 The second Respondent shall pay the Applicant’s costs of an incidental to the sale, by auction or otherwise, of the subject property within 21 days of completion of the sale. 5. In response to the quotation of Chardy’s Complete Home Maintenance dated 11 October 2011 Lindsay Caplick one Executor of The Estate of Hazel Millicent Caplick may obtain the quotation of an appropriate tradesman of his choice and file in the Tribunal two (2) copies and give Milstern Retirement Services one (1) copy -- 1 of 6 -- 2 of same by 4pm on 1 May 2012, together with any submissions in relation thereto. The Respondents may file in the Tribunal two (2) copies and give Lindsay Caplick one Executor of The Estate of Hazel Millicent Caplick one (1) copy of submissions in reply, limited to the issue of repairs, by 4 pm on 15 May 2012. 6 On or after 15 May 2012 the Tribunal will determine, on the papers, the amount payable by the Applicant to the second Respondent for repairs. 7 Any application for costs (other than those already ordered) is adjourned until after sale of Unit 13, to be enlivened upon 7 days notice in writing by either party to the other, and to the Tribunal. CATCHWORDS: Application for payment of exit entitlement based on independent valuation – section 171 ground not established – whether order sought available under s 191 Retirement Villages Act 1999, ss 67, 171, 191 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). REASONS FOR DECISION [1] In December 1989 Reinhold Otto Caplick and his wife Hazel Millicent Caplick leased Unit 13 in “Urimbirra” Retirement Village from the second Respondent, then known as B & B Retirement Holdings Pty Ltd. They paid $62,000 for their interest. [2] After the death of her husband, Mrs Caplick vacated the unit on 20 May 2006. Since then her son Lindsay Caplick (as executor of her estate) has been trying to realise the nett value of her residence right. Essentially, he wants the second Respondent, Milstern Retirement Living, to buy back the unit, by paying an “exit entitlement”1 based on an independent valuation. The second Respondent has repeatedly refused to repurchase the estate’s interest at a price acceptable to Mr Caplick. Unfortunately, as I shall explain, my power to bring this protracted dispute to a tidy, satisfactory conclusion is limited. 1 As defined in s 16 of the Retirement Villages Act 1999. -- 2 of 6 -- 3 [3] The history of the case and the applicable law are fully set out in Ms Fitzpatrick’s reasons for her decision delivered on 19 July 2011.2 [4] Mr Caplick relies, principally, on sections 67, 171 and 191 of the Retirement Villages Act 1999. Section 67 comes into play when an “accommodation unit” is not sold within 6 months of the end of occupancy. After that period, and every 3 months at least, the owner and the former resident must try to agree the resale value of the right to reside. Failing agreement, the owner is to obtain a valuation within 14 days. [5] If the owner fails to comply with s 67, and the failure materially prejudices the former resident, the latter may ask this Tribunal to order payment by the owner of the former resident’s “exit entitlement” as defined in section 16, less the “exit fee” as defined in section 15. [6] In her decision of 19 July 2011 the learned Member found that the second Respondent was in breach of section 67, but, while the Respondents have been uncooperative and the Applicant dilatory, she rejected the submission that there was “material prejudice” to the estate. That point is res judicata. I am bound by it, and so the estate is not entitled to the benefit of section 171.3 [7] However, the Member employed section 191 to order a valuation and a compulsory conference. Whether that section could be used to achieve the same result as section 171, notwithstanding an absence of “material prejudice”, is a moot point. [8] Sub-section 191(1) provides that this Tribunal may make the orders the tribunal considers to be just to resolve a retirement village issue. Sub- section 191(2) proceeds to give several examples of orders that may be made, including a “payment order”, without limiting the generality of sub- section 191(1). However, it is said, in several decisions of this Tribunal and its predecessor that section 191 is not an independent or substantive source of jurisdiction, but merely a machinery provision in aid of powers conferred elsewhere in the Act – for example in section 171.4 One wonders whether sufficient attention has been directed to the rubric “Tribunal Orders Generally”, and to sub-section 191(4): “Without limiting subsection (1), this section applies if a resident applies for a tribunal order under ... section 2 Caplick one Executor of The Estate of Caplick v Milstern Retirement Services Pty Ltd and Anor (No 1) [2011] QCAT 720. 3 Caplick one Executor of The Estate of Caplick v Milstern Retirement Services Pty Ltd and Anor (No 1) [2011] QCAT 720 at [107]. 4 Smith v Chancellor Park Retirement Village Pty Ltd [2003] QCCTRV 1 at [11]-[12]; Squire v Chancellor Park Retirement Village Pty Ltd [2004] QCCTRV 1 at [9]; Chancellor Park Retirement Village Pty Ltd v Barlag & Anor [2005] QCCTRV 6 at [30]; Galletly v Carlyle Villages Pty Ltd [2009] QCCTRV 1 at [54]; Filmer & Ors v Carlyle Gardens Retirement Village Pty Ld [2009] QCCTRV 2; Residents of Wishart Christian Village v Wishart Christian Village Association [2004] QCCTRV 5 at [15]. Somewhat more robust approaches appear in Bach & Anor v Diocesan Synod of North Queensland [2007] QCCTRV 2 at [46]-[47] and Gilbert & Ors v Jodaway Management Pty Ltd [2006] QCCTRV 2 at [39]; Holland v Milstern Retirement Services Pty Ltd & Anor QCAT VH007-09, 19 July 2011 at [108], but they do not go so far as the present Applicant invites the Tribunal to go, namely, to order the owner to pay the Applicant an exit entitlement based on the valuation of a valuer appointed by the Tribunal. -- 3 of 6 -- 4 171.” Nevertheless, in the absence of higher authority, I defer to the decisions and dicta to which I have just referred. [9] It follows that there is no immediate solution to the protracted stalemate in this case. Despite valuation after valuation the parties remain far apart. I reject the Applicant’s submission that Clause 8.2.2 of the lease requires the second Respondent to purchase the interest of the estate. Clause 8.2.2 applies where an owner terminates the lease on grounds such as bankruptcy or commission of a criminal offence. There are different provisions in Clause 8.1, regarding termination by notice or by death of the resident. [10] In April 2006 D G Cupitt, a valuer engaged by Milstern, valued the Caplick interest at $55.000. That “payout figure” was not acceptable to the Caplicks, so in September 2006 a government-appointed5 valuer was engaged; his estimate was $109,500, subject to some repairs. The Caplicks maintained that the second Respondent should buy back the unit at that price.6 Milstern rejected that proposal.7 [11] In June 2007 Milstern suggested an auction. None eventuated, and the dispute dwelt in limbo for nigh on eighteen months. [12] Milstern’s valuer, Cupitt, produced another report in April 2009, again valuing the estate’s interest at $55,000. [13] These proceedings commenced in August 2009. [14] In July 2011 valuer Cupitt reported that the property was then worth $45,000. In the following month a valuer appointed by this Tribunal arrived at a figure of $120,000. But according to Cupitt, the opinion of the Tribunal- appointed valuer was “not reflective of the market ... not supported by factual evidence of recorded sales”. [15] The perceived limitations of section 191 did not deter the Tribunal from (i) appointing an independent valuer; (ii) ordering a compulsory conference, and (iii) directing Milstern to produce an exit entitlement calculation within 7 days of receiving the valuer’s report.8 Some two months later, Milstern obeyed that direction, stating that, upon the sale of Unit 13, the following deductions should apply: Exit fee: $15,200.00 O/S levies $3,327.83 Repairs to unit: $14,037.109 TOTAL: $32,564.93 5 RV Act, s 70. 6 Letter from Applicant’s solicitor 2 February 2007. 7 Letters Respondents’ solicitor to solicitor for Applicant 14 February 2007. 8 Caplick one Executor of The Estate of Caplick v Milstern Retirement Services Pty Ltd and Anor (No 1) [2011] QCAT 720 at [108]. 9 As per quotation of Chardy’s Complete Home Maintenance 11 October 2011. -- 4 of 6 -- 5 [16] The amount claimed for repairs is large. According to the Applicant the unit was left in good repair, fair wear and tear excepted.10 Milstern’s claim for repairs was not crystallised until October 2011, some 5 years after the unit was vacated. Milstern has offered no evidence of the condition of the unit in May 2006. [17] Acting within the limitations that prevail, I shall allow Mr Caplick, if he wishes, to obtain another quotation from a reputable renovator, bearing in mind the provisions of Clause 9.1 of the lease: “The resident shall maintain the apartment ... all fixtures, fittings and furnishings ...”. See also the Public Information Document Clauses 1.4.3 and 1.4.4. [18] However, it does not necessarily follow that items that remain serviceable, albeit no longer “state of the art”, should be charged to the resident. And as Milstern’s valuer points out11, units left vacant for long periods inevitably tend to deteriorate. Milstern’s advertised plans to close the facility12, albeit gradually, can hardly have enhanced the prospects of people in the executor’s position. Meanwhile, the second Respondent continues to receive rents from occupants in some or all of the 33 units it repurchased by mid-2011.13 [19] The compulsory conference ordered on 19 July was held on 17 November 2011. Milstern represented by its director Mrs Phillips, attending by telephone link to Sydney. [20] While the conference was in session, Mrs Phillips abruptly terminated the telephone link, and left her office without notice to, or leave of the Tribunal. After an adjournment of 90 minutes Mrs Phillips was still unaccountably absent.14 No explanation or excuse has been offered for this discourtesy, not to say contempt of the Tribunal. The estate was given an order for costs thus thrown away.15 On 22 March 2012 they remained unpaid. That order relates to the several matters listed for the conference on 17 November 2011, and enforcement cannot, of course, be duplicated. [21] I do not believe that the interests of justice would be served by further delays and disputation, or yet another round of valuations. It is to be hoped that prompt action, and selection of suitable agents, will yet see this property sold at a price closer to the valuation of the independent expert, than to the estimate of the respondents’ adviser. [22] The longer this saga continues, the more the unit, and the interests of the Caplick estate, are likely to deteriorate. A resolution is overdue, but ultimately that is in the hands of the applicant. In the light of the law, the evidence, and the decision of 19 July 2011, it cannot be imposed by the 10 Submissions 27 July 2010. 11 Cupitt report 24 July 2011, section 12. 12 Public Information Document 5.4.3. 13 Cupitt report 24 July 2011. 14 As described in Caplick one Executor of the Estate of Caplick v Milstern Retirement Services Pty Ltd and Anor (No 2) [2011] QCAT 588 at [6]-[10]. 15 Caplick one Executor of the Estate of Caplick v Milstern Retirement Services Pty Ltd and Anor (No 2) [2011] QCAT 588 at [12]-[13]. -- 5 of 6 -- 6 Tribunal. The Applicant is not entitled to an order that Milstern buy the unit, at either of the most recent valuations. I see no point in piling valuation upon valuation, or in attempting to convene further conferences. I am precluded by the decision of July 2011 from making an order under s 171, but I respectfully share the view of my colleague that section 191 enables the Tribunal to make machinery or procedural orders in the interests of justice. In the circumstances of this case I consider it just to order, pursuant to s 191(1) of the Retirement Villages Act 1999, that the second Respondent pay the Applicant’s costs of and incidental to the sale, by auction or otherwise, of the subject property. Orders [1] Accordingly, I order as follows. 1 The Applicant shall forthwith list the estate’s right to Unit 13 for sale with at least three (3) local estate agents, instructed by him alone. 2 If Unit 13 is not sold at a price acceptable to the Applicant by 30 June 2012, the Applicant shall within 21 days thereafter arrange an auction of the right of residence in the unit with a reserve, if any, at the discretion of the Applicant. 3 The Respondents shall use their best endeavours to assist the Applicant to comply with Orders 1 and 2 above. 4 The second Respondent shall pay the Applicant’s costs of an incidental to the sale, by auction or otherwise, of the subject property, within 21 days of completion of the sale. 5 In response to the quotation of Chardy’s Complete Home Maintenance dated 11 October 2011 the Applicant may obtain the quotation of an appropriate tradesman of his choice and file and serve a copy of same by 4pm on 1 May 2012, together with any submissions in relation thereto. The Respondents may file and serve submissions in reply, limited to the issue of repairs, by 4 pm on 15 May 2012. 6 On or after 15 May 2012 the Tribunal will determine, on the papers, the amount payable by the Applicant to the second Respondent for repairs. 7 Any application for costs (other than those already ordered) is adjourned until after sale of Unit 13, to be enlivened upon 7 days notice in writing by either party to the other, and to the Tribunal. -- 6 of 6 --