District Court New South Wales Medium Neutral Citation: Boele v Rinbac Pty Ltd [2014] NSWDC 111 Decision date: 21 March 2014 Before: Cogswell SC DCJ Decision: (1) Appeal disallowed and decision of Consumer, Trader and Tenancy Tribunal affirmed. (2) Order the plaintiff to pay the defendant's costs as agreed or assesed. Catchwords: CIVIL LAW - Appeal - decision by Consumer, Trader and Tenancy Tribunal to terminate a lease - retirement village unit – property became strata titled - retirement village went into liquidation - 2 step inquiry – whether Tribunal decided a "question with respect to a matter of law" - Tribunal's decision was not tainted by error - consideration of "circumstance of the case" under s 134(3)(a) of the Retirement Villages Act 1999 (NSW). Legislation Cited: Consumer, Trader and Tenancy Tribunal Act 2001 (NSW) ss 28, 67, 134. Retirement Villages Act 1999 (NSW) ss 11, 112, 113. Uniform Civil Procedure Rules 2005 (NSW) r 42.1. Cases Cited: Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32; 241 CLR 390. Category: Principal judgment Parties: Pieter Boele (plaintiff) Rinbac Pty Limited (defendant) Representation: Counsel: JL Glissan QC, DH Nagle (plaintiff) G Lucarelli (defendant) File Number(s): DC 2013/00276281 Judgment Introduction 1In 1992 a man and his mother entered into a lease for a unit in a retirement village. The man paid nearly $150,000 to a trust company. About five years later the property became strata titled. The lease was not relevantly varied. A retirement village was operating at the time that the man's mother moved in and it comprised 31 strata units. Unfortunately, the retirement village went into liquidation and was deregistered. No retirement village has been conducted at the property since 2005. The retirement village operator went into liquidation, a mortgagee took possession and sold all of the units. A company purchased the unit over which the man had his lease. His lease was for 99 years expiring in 2091. 2The company has taken proceedings to terminate the man's lease. The lease was terminated by the Consumer, Trader and Tenancy Tribunal and the man has appealed to this Court. The man's name is Pieter Boele and the company which now owns the unit is Rinbac Pty Ltd. Mr Boele is the plaintiff in this Court because he has appealed from the Tribunal's decision. Rinbac Pty Ltd is the defendant in this Court. Legislation 3There are two important pieces of legislation that are relevant to this case. The first is the Retirement Villages Act 1999 (NSW) which applies to the property, even though there is no longer a retirement village operating there. (See s 11 of the Retirement Villages Act.) The second is the Consumer, Trader and Tenancy Tribunal Act 2001 (NSW) under which Mr Boele brings his appeal. Appeal 4The owner of Mr Boele's unit, Rinbac Pty Ltd, was successful in obtaining from the Tribunal an order under s 134(3)(a) of the Retirement Villages Act terminating Mr Boele's residence contract. It satisfied the Tribunal that Mr Boele had breached the residence contract and that "the breach, in the circumstances of the case" was "such as to justify termination of the contract." That provision of the Retirement Villages Act and the decision of the Tribunal under that provision are principally what this case is about. 5Mr Boele appeals to the District Court because he is given a right of appeal under the Consumer, Trader and Tenancy Tribunal Act. Section 67(1) provides as follows - "If, in respect of any proceedings, the Tribunal decides a question with respect to a matter of law, a party in the proceedings who is dissatisfied with the decision may, subject to this section, appeal to the District Court against the decision." Issues 6I have to decide two issues in this case. The first is whether the Tribunal has decided "a question with respect to a matter of law". If the answer to that issue is yes, then the second issue for me is whether I agree with Mr Boele's argument that I should allow his appeal because the Tribunal's decision on that question was tainted by error. A "question with respect to a matter of law" 7I turn to the first issue. It is important to clearly identify the "question with respect to a matter of law" decided by the Tribunal. This is important because Rinbac Pty Ltd challenges this step in the appeal. I am not sure that either party has articulated clearly what the decision was. I think that this issue is answered by reviewing the passages in the relevant part of the Tribunal's reasons. 8Over [40 - 41] the Tribunal resolves some factual issues. The Tribunal agrees at [40] "with Member Peter Smith in his finding in paragraph 21 of his reasons". That was a factual finding of Member Peter Smith. The Tribunal goes on in the same paragraph to say that the "evidence in respect of any 'satisfactory arrangement' for the purposes of clause 3.2.3 is vague and not compelling." At [41] the Tribunal found that it is "clear [Mr Boele] has not and he has therefore breached the lease." I cite these examples because they are clearly factual findings relevant to this case and they provide a convenient contrast to the Tribunal's reasoning commencing at [42]. At that paragraph the Tribunal proceeds to consider a separate question, "has the lessor satisfied the provisions of s 134 of the Act"? The Tribunal correctly added the rider whether it is "satisfied those provisions have been satisfied." 9The Tribunal over [43 - 48] proceeds to consider that question by reference to analogous provisions in another statute, decisions of the Tribunal, the District Court and the Supreme Court, the Second Reading Speech in respect of the Retirement Villages Act and an application of s 134(3) to the facts of the case as found by the Tribunal. The Tribunal's conclusion at [47] is that "pursuant to s 134(3)(a) of the Act, I am satisfied that the breach is, in the circumstances of this case, sufficient to justify termination." 10Rinbac Pty Ltd at [44] of its written submissions (which I mark for identification 3) argues that "it is not clear how resort to a traditional ground of judicial review fits the description of an error 'with respect to a matter of law'." I think that argument is misconceived. The question is not whether there has been an error with respect to a matter of law. The question is whether the Tribunal has decided "a question with respect to a matter of law." The nature of any error is the next stage and no doubt the grounds of Mr Boele's argued dissatisfaction. 11In my opinion the question on the decision posed by the Tribunal at [42] whether "the lessor satisfied the provisions of s 134 of the Act" was clearly a decision "with respect to a matter of law". Its resolution required consideration of case law, statute law and a reference to the Second Reading Speech of the Minister introducing the legislation. The decision was unfavourable to Mr Boele, who is clearly dissatisfied with it and has a proper basis, in my opinion, to appeal to the court. Leave 12Mr Boele has sought leave to appeal. Rinbac Pty Ltd is not sure why leave is needed. The only possible reason seems to be a time limit and Rinbac Pty Ltd does not oppose leave. If necessary, I grant leave to Mr Boele to appeal to this Court. Erroneous Tribunal decision? 13I turn now to the second issue for me to resolve which is whether I agree with Mr Boele's argument that I should allow his appeal because the Tribunal's decision was tainted by error. I was very helpfully assisted by written submissions prepared by junior counsel for Mr Boele, Mr DH Nagle, and by the oral submissions presented by his senior counsel, Mr JL Glissan QC. In those written and oral submissions Mr Boele, through his counsel, articulated his dissatisfaction with the Tribunal's decision. He asserted that the Tribunal fell into error in deciding the question of law under s 134 of the Retirement Villages Act. 14Broadly speaking, it seems to me that Mr Boele argues that the Tribunal has fallen into four errors in determining the question of law and those four errors form the basis for his argument that I should allow his appeal. Three of the errors are set out in [22] of the written submissions prepared by Mr Boele (which I mark for identification 2). They claim that the Tribunal failed to consider three matters referred to in that paragraph. The fourth error is developed over [23 - 25] of those written submissions and claim that the Tribunal took into account an irrelevant consideration. 15I will consider first the error articulated in sub cl (b) of [22] of the written submissions. It is claimed that the Tribunal "failed to consider" that the "lessor [that is, Rinbac Pty Ltd] had failed to respond to the lessee's reasonable request to be permitted to sub-let the unit." The Tribunal considered this question at [29] of its reasons and concluded that it "is clear the lessee has not previously made any determined attempt to come to such an agreement with the lessor." I agree in that regard with Member Peter Smith's decision. The "agreement" refers to a sub-letting which would become an arrangement satisfactory to Rinbac Pty Ltd. It is not an error for the Tribunal to fail to take account of a proposition which it had previously rejected as a finding of fact. In other words, in my opinion it was not an error for the Tribunal to fail to take into account the assertion that the "lessor had failed to respond to the lessee's reasonable request to be permitted to sub-let the unit." 16Turning to the error asserted in sub cl (a) in [22] Mr Boele, through his counsel, argues that the Tribunal "failed to consider", in applying s 134(3) of the Retirement Villages Act, the matter that the "lessor purchased the unit with knowledge of the lessee's non-occupation of the unit." The Tribunal dealt with this question at [20]. The Tribunal found that Rinbac Pty Ltd agreed that when it bought the unit it paid a discounted price which was about one-third in dollar terms "because they were burdened by a lease". However, the Tribunal went on to find in the following sentence that the "lessor agrees that there was a discounted price but there was no evidence put before me as to the reasons for such a discount being offered." The Tribunal went on to say that there were "remarks as to the fact that the lessor...was closely associated with [another entity], at least in its dealings with the lessee, prior to purchasing the premises. That may be so, but there is no evidence that the purchase of the premises was anything other than an arm's length business transaction." It is clear, in my opinion, from the Tribunal's factual findings that I have just referred to, that the assertion that the lessor "purchased the unit with knowledge of the lessee's non-occupation of the unit" was not accepted as a fact and therefore it was not necessary for that to be taken into account. 17I accept also the submissions made on behalf of Rinbac Pty Ltd, through its counsel, Mr G Lucarelli, at [27] that there "was no evidence before the CTTT that at the time the lessor purchased the Unit, the lessor actually knew the appellant was not in occupation of the Unit." Mr Lucarelli referred to p 43 of the transcript before the Tribunal pointing out that there had been an invitation to counsel for Mr Boele to elicit evidence from the lessor about what it knew, but that invitation was not taken up. 18I will deal next with the argument developed on behalf of Mr Boele that the Tribunal had taken into account an "irrelevant consideration by having regard to outgoings in circumstances where the lessee would not be liable for the payment of outgoings even if he were in occupation of the unit." I was quoting from [23] of Mr Nagle's written submissions. Those submissions refer to ss 112 and 113 of the Retirement Villages Act and argue that to "date and continuing the lessee has never been provided with a recurrent charges schedule." The submission goes on to argue that the Tribunal "had regard to the terms of the contract between the parties and determined that because the lessor could not collect outgoings if Mr Boele was not in occupation the failure to reoccupy constituted a sufficiently serious breach to permit termination." The argument is that "it is the statutory provisions relating to the collection of outgoings (recurrent charges)" under the Retirement Villages Act "which provides the mechanism by which the operator could collect moneys due and payable." 19It seems to me that Mr Boele would be liable, if he was occupying the unit, to contribute to outgoings by virtue of cl 4 of the lease. It seems to me, as argued by Mr Lucarelli, that neither s 112 or s 113 of the Retirement Villages Act makes that liability conditional. There may be issues regarding variations under the Retirement Villages Act, but that is a matter for the lessor and the lessee to sort out. The first step is occupancy. I do not agree with the submission put on behalf of Mr Boele that he would not be liable for the outgoings without provision of the document. In other words, I do not accept that he would be liable under the statute. I do not think that the Tribunal has made an error in taking that factor, as articulated in Mr Nagle's written submissions, into account. 20The final error asserted on behalf of Mr Boele is that the Tribunal "failed to consider" that Mr Boele, according to sub cl (c) in [22] of the written submissions "would lose the entire amount paid for the lease due to the insolvency of the Trustee Company who was originally a party to the lease." The Tribunal took this factor into account earlier in relation to another matter. The other matter was an application by Mr Boele for an order claiming that certain rules were unjust, unconscionable, harsh or oppressive. 21The Tribunal clearly attributed little weight to the fact that Mr Boele would lose his almost $150,000 in that context. However, Mr Glissan QC urged me to give separate consideration regarding this factor in its application to the question I have to decide regarding s 134 of the Act, and that I should be careful not to adopt the earlier reference. As Mr Glissan QC emphasised a number of times, his submission is that the Tribunal "had to engage with" s 134 of the Retirement Villages Act and had failed to do so. 22It is this asserted error which has caused me the most concern. The issue of Mr Boele losing his money paid for the lease was clearly a factor urged upon the Tribunal to consider by Mr Nagle in its application of s 134. (See for example the transcript at p 47.) The Tribunal did not refer to this as a circumstance in applying s 134. Whilst clearly expressing the view that the sympathy one might feel for Mr Boele losing his money "does not translate into an amendment to the lease making this lessor (or any other lessor) responsible for reimbursing those funds", the Tribunal does not expressly take into account the fact of the loss in applying s 134 of the Retirement Villages Act. 23Mr Lucarelli argues at [33] of his written submissions that this "is an irrelevant consideration" and that what the appellant paid to the original registered proprietor for the lease in 1992 can have no bearing on whether, over 20 years later in 2013, the appellant's breach warranted termination by a subsequent registered proprietor. 24In resolving this issue, it is of primary importance, in my opinion, to have regard to the provisions of s 134 of the Retirement Villages Act. That is the provision by reference to which Rinbac Pty Ltd purported to act. I repeat, it provides that the "Tribunal may, on application made under this section, make an order terminating the residence contract, but only if it is satisfied that...the breach, in the circumstances of the case, is such as to justify termination of the contract". The consequence of the breach - which, in my opinion, is an important factor - is, as found by the Tribunal, to deprive Rinbac Pty Ltd of any opportunity of retrieving its outgoings. The question in one sense involves an issue of how wide the expression "the circumstances of the case" are meant to extend. The section itself concerns the termination of a resident's contract. The relevant ground in the provision under consideration is breach of that contract. Residents' contracts can be terminated in other circumstances. Examples are if they are frustrated because the premises have become inhabitable; if the premises become unsuitable because of the resident's incapacity; if a resident has intentionally damaged the village; or if substantial works are to be carried out in the village. 25Returning to s 134(3)(a), the focus is on the breach of the resident's contract. The grounds of termination, in that instance, concern an existing breach and the relationship between the existing resident and the operator, even though the operator is now the owner and lessor. In my opinion "the circumstances of the case" by reference to which the breach is assessed, should be seen in the same context. It is, after all, the current breach of the current legal relationship which is being assessed. I regard the circumstance that the resident lost a lot of money some two decades before when the original operator went into liquidation as being too remote to constitute a relevant "circumstance of the case" by reference to which the breach should be assessed as to whether the termination is justified or not. It is a regrettable event which occurred in the past and is a circumstance personal to Mr Boele rather than, in my opinion, relevant to his current legal relationship with his lessor, Rinbac Pty Ltd. 26The Retirement Villages Act charges the Tribunal with determining what the circumstances are. The Tribunal in this case obviously took the view that the loss of the money, though regrettable, was a thing of the past. The Tribunal was charged by s 28(3) of the Consumer, Trader and Tenancy Tribunal Act with acting "according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms". The High Court in Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32; 241 CLR 390 at [73] clearly regarded the provisions contained in Part 4 of the Consumer, Trader and Tenancy Tribunal Act relevant to the procedure of the Tribunal as important. 27I should add at this point, in my respectful opinion the Tribunal which comprised Senior Member Geoffrey Meadows delivered a decision which was clear and very carefully reasoned. I do not regard the Tribunal as being in error in not taking into account as part of the circumstances of the case the lost money. To my mind its omission was not only a proper rejection of an irrelevant circumstance, but was also consistent with the Tribunal dealing with the case in accordance with its "substantial merits". Conclusion 28For those reasons I am not satisfied that the Tribunal's decision was tainted by error and I propose to disallow Mr Boele's appeal. Order 29The formal order which I make under s 67(3) of the Consumer, Trader and Tenancy Tribunal Act is that I affirm the decision of the Tribunal. HIS HONOUR: Mr Nagle I'm not sure what happens so far as costs are concerned. Is costs an issue in these appeals? NAGLE: Yes, your Honour. HIS HONOUR: I guess I shouldn't determine it in the absence of a representative for the defendant. NAGLE: I'm not telling your Honour to award costs to the defendant but they were the successful party. 42.1 was applied in the last appeal and Mr Boele got his costs then. I couldn't make any submissions to your Honour as to why the usual order as to costs would not apply. HIS HONOUR: Thank you, yes. NAGLE: Save and except for your Honour's reasoning wasn't any of the arguments of the defendant, but just because they do a Steven Bradbury doesn't mean they don't get their costs with respect. So rather than bring you back for another time to argue costs, at which time it would be likely, if not certain, that your Honour would follow the usual order under 42.1, to save Mr Boele having to pay-- HIS HONOUR: When you say 42.1 of? NAGLE: The Uniform Civil Procedure Rules your Honour. HIS HONOUR: And what's that, that costs follow the event? NAGLE: Indeed your Honour. As per Judge Gibb's order of the last District Court appeal in this matter. There'd be no warrant for indemnity costs, and if the defendant wanted to apply for indemnity costs for some reason-- HIS HONOUR: I could give liberty to apply? NAGLE: Your Honour the rules would provide for 14 days to make application to displace the usual order in any event. HIS HONOUR: Do they? NAGLE: From memory, yes. HIS HONOUR: Thank you Mr Nagle and thank you for discharging your duty to the Court in that regard. NAGLE: As I said, Mr Boele is actually overseas. I don't have instructions to consent to a costs order but I don't think I need instructions one way or the other. HIS HONOUR: No. What I would do is-- NAGLE: Quite frankly I can't think of why the usual order wouldn't apply. HIS HONOUR: What I will do is make the usual order as to costs but grant - how long is he overseas for? NAGLE: Mr Boele? HIS HONOUR: Yes. When will you be able to get instructions is what I mean. NAGLE: I think I'll be talking to him in the next couple of hours. HIS HONOUR: Fine. I will give the parties liberty to apply over a week so that if either you get contrary instructions for some reasons there's some hitch there, or the defendant wants to make an application on some other basis, there's a hitch there, I'll allow the parties, I'll make it conditional. NAGLE: Your Honour I can't see that the other party will rely on it but-- HIS HONOUR: I agree with you. NAGLE: And if we could have 14 days. HIS HONOUR: By all means. Costs 30I order that the plaintiff pays the defendant's costs as agreed or assessed. That order is not to be entered until Monday, 7 April 2014. Both parties have liberty to apply within that period in respect of the costs order. HIS HONOUR: Does that deal with it? My associate is typing out the order, I'll settle it in chambers. She will email it to you and Mr Lucarelli so that you can see what the order is and if you can explain to him the basis of it. Then, as I say, I direct that a transcript of this judgment be prepared and made available to me for revision and in due course I will revise the transcript and my associate will send a copy to you and Mr Lucarelli. ********** 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. Decision last updated: 23 July 2014