Dennison Investments Pty Ltd v Consumer Trader and Tenancy Tribunal of New South Wales & Ors [2003] NSWSC 259

Reported Decision : 57 NSWLR 410

New South Wales Supreme Court

CITATION : Dennison Investments Pty Ltd v Consumer Trader and Tenancy Tribunal of New South Wales & Ors [2003] NSWSC 259 HEARING DATE(S) : 20/03/03 JUDGMENT DATE : 3 April 2003

JUDGMENT OF : Cripps AJ DECISION : Decision of the Tribunal dated 8 October 2002 to be set aside and 2nd & 3rd defendants to pay plaintiff's costs.

CATCHWORDS : Retirement Villages Act (Part 10 Division 5) - executor of estate wishing to sub-let a unit previously occupied by the deceased LEGISLATION CITED : Retirement Villages Act 1999 s150(1)(b) s179 s174(1) s175,s129(2)(e) PARTIES : Dennison Investments Pty Limited v Consumer Trader & Tenancy Tribunal of New South Wales & Ors FILE NUMBER(S) : SC 12991/02 COUNSEL : Plaintiff - Mr T G R Parker Defendant - Mr G A Moore SOLICITORS : Plaintiff - Michie Shehadie & Co Defendant - I V Knight, Crown Solicitor

LOWER COURT Consumer Trader & Tenancy Tribunal JURISDICTION : LOWER COURT RVO2/18681 FILE NUMBER(S) : LOWER COURT JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

CRIPPS AJ

Thursday 3 April 2003

12991/02 - Dennison Investments Pty Ltd (ABN 55085836102) v Consumer Trader and Tenancy Tribunal of New South Wales – 1st Defendant; Anita Watson – 2nd Defendant & Kitty Hurley – 3rd Defendant

JUDGMENT 1 HIS HONOUR: By summons Dennison Investments Pty Ltd (the plaintiff) seeks an order that the decision of the Consumer Trader and Tenancy Tribunal of New South Wales (the Tribunal) in proceedings RVO 2/18681 dated 8 October 2002 be set aside and in lieu thereof it be declared that the plaintiff is not obliged to consent to the sub-lease of Unit 68/33 Bernard Road, Padstow Heights proposed in the letter dated 26 April 2002 from Sanders Oatley First National Real Estate to the plaintiff. 2 Unit 68 was formerly occupied by Gertrude Hulscher who died on 27 October 2000. Probate of her will was granted to her executors Anita Watson and Kitty Hurley on 2 May 2001, the second named defendants in the proceedings (the executors). The second named defendants kept the key to the subject premises and retained Sanders Oatley First National Real Estate to find a tenant who could sub-let. 3 The second named defendants resist the making of the declaration. The first named defendant (the Tribunal) has filed a submitting appearance except as to costs. 4 As will be seen the Retirement Villages Act 1999 (the Act) makes provision for the resolution of village disputes between residents and former residents on the one hand and operators on the other. These proceedings are concerned with a dispute between the executors of the estate of the late Ms Hulscher and the plaintiff. 5 The plaintiff made application to the Tribunal for an order that its decision not to consent to the sub-tenancy was reasonable in the circumstances. It also sought an order that a sum of money be paid by the executors to the plaintiff. There is no longer any issue between the parties concerning the amount, if any, owed to the operator. 6 Before the Tribunal it was contended that the Tribunal had no jurisdiction to entertain the matter because the executors did not have the status of "resident" within the meaning of the Act entitling them to sub-lease the premises. That is to say the plaintiff purported to invoke the jurisdiction of the Tribunal to argue that it had no jurisdiction. However nothing turns on this because there is now before this court an application for a declaration that the plaintiff is not obliged to consent to the sub-lease of Unit 68. 7 Part 10 of Division 5 of the Act makes provision for the sale or letting of premises by residents as former residents. 8 S 166 relevantly provides; "this Division applies only to a resident of a retirement village who owns his or her residential premises in the village." 9 "Owner" is defined as a person who is either the registered the proprietor of the premises or the owner of shares which gives rise to a residence right in respect of the premises. The executors are not the "owners" as defined. 10 S 150(1) of the Act provide that for the purposes of Part 10 of the legislation the owner is taken to be a "resident" or "former occupant" of the premises: (a) … (b) who does not own the premises but whose residence contract includes a provision to the effect that the amount of any payment required to be made by the operator to the resident after the resident permanently vacates the premises is wholly dependant on the amount paid by the next incoming resident for the residence right in respect of the premises". 11 S 174(1) provides; " a resident of residential premises in a retirement village may let (or, in the case of a resident referred to in s 150(1)(b), sublet) the premises under the residential tenancy agreement in accordance with this Division". 12 S 174 also provides that a residential tenancy must not exceed three years and that the sub-tenant must be a retired person. As well it provides that the premises cannot be sub-let unless the operator has been given written particulars of the proposed tenancy and the operator has consented in writing to the agreement. S 174(6) provides that if the operator decides not to consent to a residential tenancy agreement it must, no later than seven days after receiving the written particulars referred to above, advise its decision and apply to the Tribunal for an order declaring that it is not obliged to consent to the agreement. If the operator does not apply for such an order within time the operator is taken to have consented to the residential tenancy agreement. 13 S 175 provides that the Tribunal has the jurisdiction to determine whether the operator's decision not to consent to the residential tenancy agreement is reasonable in the circumstances having regard to a number of matters not relevant to the present issue. 14 The principal submission before the Tribunal, and the one which is repeated in these proceedings is that the executors of the estate of the late Gertrude Hulscher did not have the status of "resident" within the meaning of s 174 of the Act. 15 S 4 provides; " resident of a retirement village means a retired person who has a residence right in respect of the residential premises in the village and includes the following persons (each of whom is taken to have a residence right in respect of the residential premises concerned): (a) the spouse of the retired person, if the spouse occupies the residential premises with the retired person, (b) if the retired person is in a de-facto relationship – the other party of that relationship, if the other party occupies the residential premises with the retired person, (c) any person or class of persons prescribed by the regulations for the purpose of this definition, (d) in Parts 6,7 and 8 and Division 5 of Part 10 – a former occupant of the retirement village." 16 S 129(2)(e) relevantly provides; " a residence contract relating to premises other than premises owned by the resident (and the residence right under the contract) terminates: (a) … (b) … (c) … (d) … (e) on the death of the last surviving resident under the contract". 17 The plaintiff has submitted that by operation of s 129(2)(e) the executors do not have a "residence right in respect of the residential premises in the village" because that right terminated on the death of Ms Hulscher. 18 In its submission, in order to qualify as a resident the executors must bring themselves within the definition of "former occupant" of a retirement village. 19 "Former occupant" of a retirement village is defined to mean a resident or former resident of the village; (a) who has permanently vacated any residential premises in the village, (b) whose residence contract has been terminated (unless the resident owns the residential premises concerned) ( c) who continues to have rights or liabilities under a village contract relation to the village, and includes the executor or the administrator of the estate of such person. 20 The Tribunal found that the second named defendants had not relevantly "permanently vacated" the residential premises because they retained the keys and had not given up vacant possession. 21 It is submitted by the plaintiff that although Ms Hulscher was a person who did not own the subject premises (because her interest was in a 99 year lease) her estate was not relevantly a "resident" or "former occupant" not withstanding that the resident contract entered into by Ms Hulscher was of the type referred to in sub-par (b) of par 1 of s 150 of the Act. 22 The plaintiff's submissions were, generally speaking accepted by the Tribunal. However the Tribunal concluded that by operation of s 179 of the Act (also in Part 10 Division 5) the executors had the power to sub-let the premises. 23 S 179 provides; (1) For the purpose of this Division and despite the termination of the resident's residence contract, a resident referred to in s 150(1)(b) is taken to possess a legal estate in his or her residential premises in the village such as to enable the resident to lease the premises to another person under a residential tenancy agreement". 24 The Tribunal was of the opinion that s 179 was an independent source of entitlement allowing the executors to sub-let the premises and for the Tribunal to determine whether refusal by the plaintiff to consent was reasonable. That was because, in the opinion of the Tribunal, s 179 applied to "persons who came within the provisions of s 150(1)(b) and whose residence contract has terminated". So understood the executors of the estate had the status of "resident". 25 To fall within the definition of "owner" it is necessary to establish that a person was a "resident" or "former occupant". The executors of the estate of the late Ms Hulscher are neither. They do not have a residence right in respect of the residential premises nor are they "former occupants" because they have not delivered up vacant possession. 26 Mr Moore of behalf of the defendants has submitted that the premises have been permanently vacated and that the words "permanently vacated" are not synonymous with the giving up of vacant possession. However s 8 of the Act, which defines "permanent vacation" would seem to put an end to that submission. It provides that a person is taken to have permanently vacated residential premises when that person or someone else on his or her behalf delivers up vacant possession. 27 There is, in my opinion, substance in the defendant's submission that the words "the resident referred to in s 150(1)(b)" is a reference to a person who would have been a "resident" but for the absence of a residence right and that person would include the estate of a deceased person. 28 But does that mean that s 179 is an independent source of entitlement allowing the second defendants to sub-let the premises or is it, as has been submitted by Mr Parker for the plaintiff, simply a conveyancing provision. 29 Although s 179 commences with the words "for the purpose of this Division" it does not, in terms, deem a person who has no residence rights to be a "resident" by reason of that person being bound by contractual terms referred to in s 150(1)(b). Rather it provides that such a person is "taken to possess a legal estate" in the residential premises such as "to enable the resident to lease the premises to another person…." 30 I am of the opinion s 179s is not an independent source of entitlement allowing persons who are not "residents" within the meaning of s 174 to sub-let premises and to invoke, albeit indirectly, the jurisdiction of the Tribunal. I accept Mr Parker's submission namely that the purpose of s179 is to enable a person who would have been a "resident" but for the absence of a resident's residence contract to be able to give good title. 31 I have come to the above conclusions with reluctance because, as it would seem to me, the interpretation contended for by the defendants and adopted by the Tribunal is one that more generally accords with the policy of the legislation and the mischief to which it was directed. But however that may be in my opinion the second named defendants were not relevantly a "resident" within the meaning of s 174. 32 It appears to have been accepted by the parties that if I came to the conclusion that the second named defendants did not have the status of "resident" entitling them to seek the operator's consent pursuant to s 174 the appropriate course was for me to make the following orders: