New South Wales Supreme Court CITATION : Elliot Tuthill Nominees Pty Ltd v Boele [2010] NSWSC 103 HEARING DATE(S) : 11 - 12 February 2010 JUDGMENT DATE : 12 February 2010 JURISDICTION : Equity Division JUDGMENT OF : Rein J 1. Pursuant to s 23(2)(a) of the Consumer, Trader and Tenancy Tribunal Act 2001, proceedings 289611 of 2009 are to be transferred to the Consumer, Trader and Tenancy Tribunal. DECISION : 2. Pursuant to s 23(2)(b) of the Consumer, Trader and Tenancy Tribunal Act 2001, proceedings 289611 of 2009 are to continue in the Tribunal as if they had been instituted in the Tribunal. 3. Leave is granted to the cross-claimant, Elliot Tuthill Nominees Pty Limited, to amend its pleadings in the form annexed to these orders, and leave is granted to file in court the second further amended Statement of Cross-Claim. CATCHWORDS : LANDLORD AND TENANT – lease, "residence contract" – Retirement Villages Act 1999 – resident not in occupation – purported termination of tenancy by landlord – whether s 129 of Retirement Villages Act 1999 exhaustive – whether disclaimer under s 129(2)(d) established Civil Procedure Act 2005 Consumer, Trader and Tenancy Tribunal Act 2001 LEGISLATION CITED : Retirement Villages Act 1999 Retirement Villages Act 1989 Uniform Civil Procedure Rules 2005 CATEGORY : Principal judgment CASES CITED : Re Teller Home Furnishers Pty Ltd [1967] VR 311 TEXTS CITED : A J Bradbrook & C E Croft, Commercial Tenancy Law in Australia (2nd ed, 1997), Butterworths, Sydney PARTIES : Elliot Tuthill Nominees Pty Limited (Plaintiff) Pieter Boele (Defendant) FILE NUMBER(S) : SC 2009/289611 COUNSEL : C Bova (Plaintiff) D Nagle (Defendant) SOLICITORS : Kells The Lawyers (Plaintiff) Pryor Tzannes & Wallis Solicitors (Defendants) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION Rein J 12 February 2010 2009/289611 Elliot Tuthill Nominees Pty Limited v Pieter Boele JUDGMENT (EX TEMPORE) 1 REIN J: These proceedings concern apartment 17, a one-bedroom apartment in a retirement village known as Woollcott Court Village. The cross-claimant, Elliot Tuthill Nominees Pty Limited, which I will refer to as "ETN", became a mortgagee in possession and subsequently took over the role of the operators of Woollcott Court Village in managing the village. Mr Boele, the cross-defendant, is the son of a former resident of the village. 2 Mr Boele and his mother were joint sublessees of the apartment from the mortgagor, Woollcott Village Pty Limited ("Woollcott Village"), which defaulted on its loan to ETN, went into liquidation and subsequently was deregistered. It was accepted by both parties that: 1) ETN stands in the shoes of the original sublessor and operator of the village, Woollcott Village, and has the same rights and obligations in relation to the sublease as Woollcott Village; 2) ETN is to be treated as lessor and Mr Boele treated as lessee in considering whether the lease was validly terminated by ETN in 2004, as ETN maintains; and 3) the lease is a "residence contract" within the meaning of the Retirement Villages Act 1999 , which I shall refer to as " the RVA ", and the RVA and regulations made under the RVA govern the lease. 3 Proceedings originally were commenced by reason of a caveat having been lodged by Mr Boele and the receipt by him of a lapsing notice. It was agreed by both parties that the caveat proceedings are no longer of any significance, and that the questions to be determined now are whether the lease was validly terminated and whether Mr Boele owes ETN money in respect of expenses or outgoings in relation to the apartment (the answer being dependant in part on whether the lease was validly terminated). 4 I was informed that ETN has entered into a contract of sale to a third party, which contract is conditional upon the termination of the Boele lease. The matter is therefore of some urgency, as under the contract of sale, 5 March 2010 is the date by which the ETN is to have had the matter of the termination of the lease determined. 5 The circumstances of the case are somewhat bizarre. At no time prior to his mother's death or since has Mr Boele ever resided in the apartment. Indeed, until he reached the age of 55, he was not permitted to reside in the apartment because of minimum age requirements relevant to retirement villages. 6 Some time after his mother's death, a bed and other items of furniture not owned by the operator (with the exception of a few items, according to Mr Boele, and with no exceptions, according to ETN) were removed by Mr Boele or other relatives from apartment 17. On ETN's case, Mr Boele almost never visited the property. On Mr Boele's case, he did so sporadically and never for more than a few hours during the day. ETN claims that Mr Boele had "permanently left" the premises within the meaning of clause 3.2.3 of the lease. Alternatively, it claims that even if that requirement was not met, he is deemed to have permanently left the premises within the meaning of clause 3.2.3, because by its terms it provides that: "If the premises are left vacant without prior arrangement with the lessor or his agent for a period of not less than 3 months and the lessor is not able after reasonable enquiry to locate the lessee or does locate the lessee and the lessee does not reoccupy the premises or make arrangements satisfactory by 2 weeks after notice by ordinary prepaid post to the lessee at such location he will be deemed to have permanently left the premises." 7 ETN also argues that the lease was validly terminated at common law. 8 There are a number of issues relating to the terms of the lease, including clause 4.9, which is in the following terms: "Notwithstanding the provisions of clause 4 the lessee will not be obliged to contribute to the outgoings of the Serviced Apartments whilst the premises remain unoccupied by the Lessee or any Sub Lessee. The presence of the Lessee's furniture and effects in the premises in itself shall not constitute occupation thereof." There are also issues about the rules relating to occupation of the apartment, which are to be found as part of the lease and which can be seen in the memorandum at pages 306 to 324 of Exhibit A. 9 Mr Boele disputes the various claimed bases of termination asserted by ETN. At the forefront of his submissions is his contention that the lease can only be terminated by, in the circumstances of this case, the Consumer, Trader and Tenancy Tribunal ("the Tribunal"), given the terms of s 129 of the RVA, which provides: "(1) A residence right arising from a contract relating to residential premises that are owned by the resident terminates only on the completion of the sale of the premises. (1A) A residence right arising from a residence contract that is in the form of an assignable lease terminates on the assignment of the lease. (2) A residence contract relating to premises other than premises owned by the resident or premises that are subject to an assignable lease (and the residence right under the contract) terminates: (a) on the date on which the resident delivers up vacant possession of the residential premises to the operator, being a date that is (except as otherwise provided under this Part) at least one month after the date on which the resident gives the operator written notice of intention to vacate the premises (or such earlier date as the residence contract may allow), or (b) on the date on which the resident delivers up vacant possession of the residential premises, with the prior consent of the operator, to the operator, or (c) on the date on which the resident delivers up vacant possession of the residential premises to the operator after receiving notice of the operator's intention to apply to the Tribunal for an order terminating the resident's residence contract, or (d) on disclaimer (for example, on renunciation by the resident accepted by the operator), or (e) on the death of the last surviving resident under the contract, or (f) on the date specified by the Tribunal in an order under section 143 declaring that the resident has abandoned the premises, or (g) on the date on which the contract is terminated by the Tribunal, or (h) if the contract is frustrated: (i) on eighth day after the date specified in the notice of termination given under section 132, unless application is made to the Tribunal within the time allowed by that section (or the notice of termination is withdrawn within that time), or (ii) on the date specified by the Tribunal, if the Tribunal determines that the contract is frustrated. (3) Termination of a residence contract does not affect any other right or obligation of the parties under a village contract." 10 ETN disputes that s 129 is a comprehensive code, but alternatively submits that if, contrary to its submission, s 129(2) is equivalent to a code, s 129(2)(d) is applicable. Section 129 is contained within Part 9 ("Termination of Residence Contract") of the RVA. Regard must be had to all of the provisions of that Part and also, as I will mention, to s 3 of the RVA, which sets out the objects of the Act. 11 Mr Bova of counsel, who appeared for ETN, submitted that s 129 does not preclude other means of termination in circumstances other than those set out in s 129 of the Act, and that his argument was supported by: 1) the fact that s 129(1) uses the word "only", but that word does not appear in s 129(2), so section 129(2) is not couched in mandatory terms; and 2) the fact that s 134(1) deals with termination on the grounds of breach of contract or rules, which subsection is in the following terms: "(1) The operator of a retirement village may apply to the Tribunal for an order terminating the residence contract of a resident of the village who breaches any village contract between the resident and the operator or breaches a village rule." and so provides that the order "may" be sought by operator. Further, Mr Bova referred to the fact that s 129 deals with topics that do not require determination by the Tribunal, and submitted that the balance of those matters dealt with in s 129 should be seen as providing an option to the relevant party to obtain certainty by applying to the Tribunal. 12 Mr Bova also drew my attention to the fact that previous legislation concerning retirement villages, namely the Retirement Villages Act 1989, by s 15 which dealt with the right to occupy residential premises, did include the word "only": "A resident of a retirement village who is entitled to occupy a residence under a residence contract has a right of occupation that terminates only in one of the following circumstances: (a) when the resident dies; or (b) if the residence contract is terminated by the resident in accordance with the residence contract; or (c) if the resident abandons the residential premises; or (d) if the residence contract is terminated by the Tribunal under this Act." 13 So far as the first point is concerned, I accept the submission of Mr Nagle of counsel, who appeared for Mr Boele, that s 129(1) deals with a different species of residential right to s 129(2), that is, one which arises from the contract where the residential premises are owned by the resident. This seems to be a separate category of ownership or occupation (see also s 130), so I think this makes the absence of the word "only" in s 129(2) less significant, but I do not think it completely undermines Mr Bova's point that s 129(2) does not use the word "only". 14 It was accepted by Mr Bova that the provisions of the superseded legislation cannot govern the construction of the new legislation. However, the fact that "only" was used in the previous Act further underlines the need for caution in determining whether s 129(2), when properly construed in the context of the RVA and particularly Part 9, requires all cases of termination other than those specified in s 129(a)-(e) to be heard and determined by the Tribunal. In my view, notwithstanding the absence of the word "only" in s 129(2), the legislative intention which is to be gleaned from the RVA is to permit termination only in one or other of the circumstances in s 129(2)(a)-(e) or by decision of the Tribunal, having regard to: 1) the detailed list in s 129(2) of circumstances in which a residence contract might come to an end; 2) the specific enumeration in s 129(2)(a)-(d) of species of termination that depend upon the party other than the operator no longer wishing to be bound, and s 129(e), the very special and obvious case where there are no surviving residents; 3) the "catch-all" form of s 129(g), which refers to the date of termination by the Tribunal, and implicitly, therefore, deals comprehensively with the issue of termination in all circumstances other than those already dealt with by s 129(a)-(e); 4) the requirement in s 131 for written notice of intention to seek termination to be given, and the detailed provisions in s 134 regarding the applications that may be made for termination on the grounds of breach of the village contract or the rules; 5) the requirement for notice to be given in the terms now found in regulation 55, but previously and relevantly, it was agreed, in Schedule 7 to the current regulations; 6) the exclusion of any right in the operator to seek orders for possession in the Supreme Court, District Court or Local Court (see s 138) and the making of recovery of possession without an order of the Tribunal an offence (see s 139); and 7) s 3(e) of the RVA which provides that it is an object of the Act: "to establish appropriate mechanisms for the resolution of certain disputes between residents and operators of retirement villages". 15 The degree of detail and specificity in the RVA is, in my view, inconsistent with the proposition that the legislature intended to permit termination to be dealt with outside of the Tribunal in any of the matters other than those specifically enumerated in s 129(a)-(e). 16 Section 129(2)(d) cannot, in my view, be relied on by ETN, as there has been no disclaimer by Mr Boele. On receiving the letter of 12 October 2004, upon which ETN seemed to rely to establish a deemed permanent departure from the apartment, Mr Boele responded immediately, claiming that he was not required to reside in the apartment. Whether what occurred between 1999 and 2004 and beyond amounted to a repudiation will need to be determined, but "disclaimer" requires some renunciation or disavowal of the lease and involves a direct repudiation of the relation of landlord and tenant: see Re Teller Home Furnishers Pty Ltd [1967] VR 311 at 317 per Gowans J and A J Bradbrook & C E Croft, Commercial Tenancy Law in Australia (2nd ed, 1997), Butterworths, Sydney at [16.25]. ETN argues that repudiation was sufficient, but whilst an express repudiation may amount to a disclaimer, in my view, a repudiation based on conduct without a clear disavowal of the lease or a refusal to accept that it is binding is insufficient. 17 I conclude that the lease can only be validly terminated, and that termination acted upon by ETN, in consequence of a determination made by the Tribunal. In those circumstances, I do not think it is appropriate, although ETN submitted to the contrary, for the Court to proceed to make any findings of fact based upon the material presented to the Court, nor is it appropriate to express opinions upon any of the other issues that were ventilated between the parties. I do not accept that it would be appropriate, quite apart from the question of utility, because I think it is clear that the legislature intended the Tribunal to determine the issues relevant to termination. 18 An application was made by ETN, in the event that the Court concluded that the issue of valid termination could only be dealt with by the Tribunal, that the Court should transfer the proceedings and make orders pursuant to ss 23(2)(a) and (b) of the Consumer, Trader and Tenancy Tribunal Act 2001 ("CTTTA"). This application was opposed by Mr Boele. 19 As I understood the opposition to the transfer of proceedings, it was based not upon a absence of power in the Court to be able to so direct, but rather claimed unfairness or prejudice to Mr Boele if such a course were taken. Mr Bova referred to s 56 of the Civil Procedure Act 2005. The overriding purpose of the Civil Procedure Act and the Uniform Civil Procedure Rules 2005 is to facilitate the just, quick and cheap resolution of the real issues in the proceedings: see s 56(1) of the Civil Procedure Act. Although that Act does not govern the CTTTA, a similar approach should be taken, in my view, when considering whether an order should be made pursuant to s 23 of the CTTTA. 20 I am mindful of the fact that the Court has reviewed evidence from various witnesses for ETN and from Mr Boele himself, and heard cross-examination of these witnesses, all of which has been recorded in a transcript. Documentary material, in the form of Exhibits A to E, presumably being all the documents relevant to this matter, have been provided to the Court. I think it would be most unfortunate and a waste of judicial and Tribunal resources if all of this needed to be recanvassed. 21 Mr Nagle, on behalf of Mr Boele, submitted that it would be unfair to his client if it was permitted, but no prejudice in my view was demonstrated by such a course. His claim that his client might wish to assert that terms of the residence contract were unfair has a hollowness given the variety of other issues that have been canvassed in the Amended Defence and Written Submissions. I do not in any way seek to constrain the Tribunal in its conduct of the matter and the Tribunal will have the power to determine what further steps need to be taken and to permit, if appropriate, further evidence to be led on behalf of either party, should that be sought. 22 Given that the issues, in large substance, have already been canvassed, not only with the benefit of exhibits and evidence but also with extensive written submissions, the appropriate course is to make an order in accordance with ss 23(2)(a) and (b) of the CTTTA. I indicated to Mr Bova, for ETN, that it would be appropriate, before such an order were made, that any proposed changes to the pleadings and relief sought be identified, and this has now been done. There are no changes to the pleadings, but changes have been made to the relief sought. 23 In the circumstances, I propose to make orders in accordance with the Short Minutes of Order initialled by me, dated with today's date and which will be placed with the papers, namely that: 1) Pursuant to s 23(2)(a) of the Consumer, Trader and Tenancy Tribunal Act 2001 , proceedings 289611 of 2009 be transferred to the Consumer, Trader and Tenancy Tribunal. 2) Pursuant to s 23(2)(b) of the Consumer, Trader and Tenancy Tribunal Act 2001, proceedings 289611 of 2009 are to continue in the Tribunal as if they had been instituted in the Tribunal. 3) Leave is granted to the cross-claimant, ETN, to amend its pleadings in the form annexed to these orders, and leave is granted to file in court the second further amended Statement of Cross-Claim. These orders are subject, however, to the question of costs, which I will deal with now. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.