FEDERAL COURT OF AUSTRALIA Brasington v Overton Investments Pty Ltd [2000] FCA 1573 RITA BRASINGTON v OVERTON INVESTMENTS PTY LIMITED & JOHN EDWARD JAMES N 878 OF 1999 NEVILLE CARNEGIE v OVERTON INVESTMENTS PTY LIMITED N 857 OF 1999 EMMETT J 25 OCTOBER 2000 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 878 OF 1999 BETWEEN: RITA BRASINGTON APPLICANT AND: OVERTON INVESTMENTS PTY LIMITED FIRST RESPONDENT JOHN EDWARD JAMES SECOND RESPONDENT JUDGE: EMMETT J DATE OF ORDER: 25 OCTOBER 2000 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The hearing fixed for 4 December 2000 be vacated. 2. The respondent be granted leave to file a cross-claim substantially in the form of annexure A to the notice of motion filed in court on 25 October 2000. 3. The respondent file and serve the cross-claim no later than 27 October 2000. 4. The cross-defendants, assuming they appear, file and serve defences by 3 November 2000. 5. The parties consult with each other through their legal advisers with a view to filing a joint statement of issues no later than 15 November 2000. 6. If the parties cannot agree on a joint statement of issues, each party file a separate statement of issues no later than 15 November 2000. 7. The matter be stood over for directions on 17 November 2000 at 10.15 am. 8. Costs of the notice of motion filed in Court on 25 October 2000 be the parties' costs of the cross-claim. 9. Costs of the notice of motion filed 6 October 2000 be the parties' costs of the proceedings. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 857 OF 1999 BETWEEN: NEVILLE CARNEGIE APPLICANT AND: OVERTON INVESTMENTS PTY LIMITED RESPONDENT JUDGE: EMMETT J DATE OF ORDER: 25 OCTOBER 2000 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The hearing fixed for 4 December 2000 be vacated. 2. Costs of the notice of motion filed 6 October 2000 be the parties' costs of the proceedings. 3. The matter be stood over for directions 17 November 2000 at 10.15 am. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 878 OF 1999 BETWEEN: RITA BRASINGTON APPLICANT AND: OVERTON INVESTMENTS PTY LIMITED FIRST RESPONDENT JOHN EDWARD JAMES SECOND RESPONDENT N 857 OF 1999 BETWEEN: NEVILLE CARNEGIE APPLICANT AND: OVERTON INVESTMENTS PTY LIMITED RESPONDENT JUDGE: EMMETT J DATE: 25 OCTOBER 2000 PLACE: SYDNEY REASONS FOR JUDGMENT 1 I have before me two motions in proceedings N 878 of 1999 in which the applicant is Mrs Rita Brasington. The respondents are Overton Investments Pty Limited ("Overton") and Mr John Edward James, the managing director of Overton. The proceedings are related to other proceedings which I have heard and determined, the main reasons for which were delivered on 15 June 2000 in the matter of Murphy v Overton Investments Pty Limited [2000] FCA 801 ("Murphy"). Following the determination of the Murphy proceedings, I fixed Mrs Brasington's proceedings for hearing to commence on 4 December 2000. 2 The first motion before me is by Mrs Brasington for the vacation of that hearing. The other motion is by Overton, seeking leave to file a cross-claim. Overton proposes to join, as cross-respondents, not only Mrs Brasington, but all of the other residents of the Heritage Village, as defined in my earlier reasons of 15 June 2000. Overton claims that outgoings payable by residents under leases granted by Overton remain unpaid and seeks to recover those outgoings. Overton also claims that other outgoings, charges and liabilities for which the residents are liable are also unpaid and seeks their recovery. 3 Counsel for Mrs Brasington, who also appears for the other residents each of whom have brought proceedings in the Court, has foreshadowed that there will be answers to the claim foreshadowed in the proposed cross-claim, which will raise questions as to the proper construction of the lease which is in a common form, together with factual matters as to the reasonableness of certain of the outgoings, charges and liabilities that Overton seeks to recover from residents. Counsel for Mrs Brasington also indicated that two further questions would be raised, or could arise, in relation to any claim by Overton to a judgment against the residents. 4 In the Murphy proceedings, I determined that this Court has no jurisdiction under the Contracts Review Act 1980 (NSW)to make any order that might affect the obligations to Overton of Mr and Mrs Murphy. That question will arise in an appeal from my decision to the Full Court, which is fixed for hearing in early November. If my decision is confirmed by the Full Court, it will be necessary for the question of relief under the Contracts Review Act 1980 (NSW)to be resolved in the Supreme Court of New South Wales. Counsel for Mrs Brasington and the other residents pointed to the inconvenience of having to await the outcome of those questions before resolving the matters that would be raised by the cross-claim. In addition, counsel for Mrs Brasington referred to other proceedings between the parties brought in the Residential Tribunal of New South Wales. 5 Section 14A of the Retirement Villages Act 1989 (NSW) provides that: "(1) A resident… may apply to the Tribunal for the purpose of resolving a budget impasse" I will assume for present that there was in fact a "budget impasse" arising between Overton and the residents. Under section 14A(5), if an application is made, the Tribunal may, amongst other things, make an order that the residents' fees must not exceed an amount specified by the Tribunal. Under section 14A(6) an order of the Tribunal made under that provision fixes the maximum residents' fees payable by residents whose residence contracts give the administering authority a discretion in setting residents' fees. 6 However, under section 14A(7) the Tribunal cannot make an order under section 14A(5)(d) fixing the maximum fees of residents whose residence contracts specify the residents' fees that are payable (including by reference to a fixed formula). Further, section 31(1)(b) of the Act provides that the Tribunal must not make orders under the Act that are inconsistent with "a residence contract". A residence contract would include the leases that exist between Overton and the residents, including Mrs Brasington. The question of the possible application of section 14A(7) and section 31 is a matter that, it seems to me, could be resolved in this Court in determining whether or not there should be a judgment against residents in favour of Overton concerning the amount payable under their leases. 7 However, the Retirement Villages Act 1989 (NSW) has been repealed. There is currently a proceeding in the Supreme Court of New South Wales between residents and Overton in which Overton seeks to establish that the effect of the repeal is to deprive the Tribunal of any jurisdiction to make an order under section 14A. Clearly, that question would need to be resolved before this Court embarked on any determination of the effect if any that any order under section 14A might have on the rights of Overton under the leases. 8 It has been suggested that if the issues raised by the proposed cross-claim could be got ready, they would be appropriate for hearing during the time already fixed for the hearing of the Brasington proceeding. In addition to the Brasington proceeding, I have also fixed for hearing proceedings brought by another resident, Mr Neville John Carnegie. That proceeding is part-heard before me. The parties accept that there would be utility in resolving the questions that arise under the lease both as to the interpretation of the lease and the factual matters to which I have briefly referred, since those matters must be resolved irrespective of the outcome of the appeal. 9 Counsel for Mr Carnegie accepts that if the appeal to the Full Court is dismissed, then Mr Carnegie's proceedings must also be dismissed. It seems to me to be undesirable, therefore, for me to continue the hearing of Mr Carnegie's proceedings in early December, since it seems unlikely that the appeal will have been resolved by then. On the other hand, even if the appeal is dismissed, there are still issues that would be required to be resolved in relation to Mrs Brasington's proceeding. While her claims under the Trade Practices Act 1974 (Cth) would be barred if the appeal is dismissed, she also has claims in fraud and negligence, which would require resolution, irrespective of the outcome of the appeal. 10 Of course, if the appeal is upheld, it is possible that she would also be entitled to bring claims under section 52 of the Trade Practices Act 1974 (Cth). It seems to me to be undesirable to embark on a hearing of Mrs Brasington's proceeding in circumstances where I would not know precisely what issues would have to be determined. If I did resolve the matter, I would resolve it consistently with my decision in Murphy. 11 If I decided the Brasington proceedings consistently with the Murphy proceedings and the appeal in the Murphy proceedings was successful, there would automatically have to be an appeal in the Brasington proceeding which would be successful. I consider that it is undesirable to run the risk of having to have two hearings in relation to Brasington. It is therefore preferable, in my view, to vacate the hearing fixed for 4 December 2000 for both the Brasington and Carnegie proceedings. 12 However, it is desirable to maintain those dates if possible for the resolution of the issues that would arise on the cross-claim if they can be got ready for hearing. Both parties accept that it would be feasible, and that there would be utility in doing so, to determine the questions that arise as under the lease without regard to the possible effect of an order under the Contracts Review Act 1980 (NSW) or the consequences of an order by the Residential Tribunal. The contractual questions could be resolved by declaration, and the proceedings then stood over to await the outcome of any Contracts Review Act 1980 (Cth)application either in the Supreme Court or, in the event of a successful appeal, in this Court and also to await the outcome of the jurisdictional question and, if need be, the substantive hearing before the Residential Tribunal. 13 Accordingly, I propose to give directions with a view to having the cross-claim heard on 4 December 2000 and following days. Accordingly, I propose to give leave to Overton to file a cross-claim substantially in the form of Annexure A to the notice of motion filed in court on 25 October 2000. While my intention is to maintain the proposed hearing date of 4 December 2000, I will treat that fixture as provisional until 17 November 2000. If the parties tell me at that time that it is not feasible for the hearing to take place then the provisional fixture will be vacated. If in the meantime other proceedings are ready for hearing in that time and I consider it appropriate to give the date to other parties then I will notify the parties in this proceeding beforehand. 14 The costs of the motion filed by Overton should be the parties' costs of the cross-claim. The costs of the motions filed by Mrs Brasington and Mr Carnegie should also be the parties' costs of those proceedings. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. Associate: Dated: 3 November 2000 Counsel for the Applicants: Mr G A Moore Solicitor for the Applicants: The Aged Care Rights Service Counsel for the Respondents: Mr A J McInerney Solicitor for the Respondents: Gadens Lawyers Date of Hearing: 25 October 2000 Date of Judgment: 25 October 2000