Strathmore & Anor v Richard & Kathryn Emerson t/as The Rocks Village [2014] NSWCATCD 104

Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Strathmore & Anor v Richard & Kathryn Emerson t/as The Rocks Village [2014] NSWCATCD 104 Hearing dates: 1 May 2014 Decision date: 18 June 2014 Before: M Gilson, General Member Decision: 1.Pursuant to section 58 of the Residential Parks Act 1998, the rent payable by the applicants is not to exceed the following sums: a)RP 13/59430 - Maureen Strathmore, $120.75pw from 15 December 2013 for a period of 12 months; b)RP13/59431- Brian Whyley and Audrey Whyley, $121.00pw from 2 January 2014 for a period of 12 months; c)RP 13/53498- Pat McDermott and Margaret McDermott, $120.75pw from 15 December 2013 for a period of 12 months; d)RP 13/59433- Bev Gannaway and Ian Gannaway, $122.40 pw from 15 December 2013 for a period of 12 months. e)RP 13/59437- Geoff Schofield and Trish Schofield, $118.50 pw from 1 January 2014 for a period of 12 months; f)RP 13/59441- Beverley Hedger, $122.40 pw from 15 December 2013 for a period of 12 months. Catchwords: Excessive rent increases Legislation Cited: Residential Parks Act 1998, sections 14,53,57 and 58 Category: Principal judgment Parties: Maureen Strathmore and others (applicants) Richard & Kathryn Emerson t/as The Rocks Village (respondent). File Number(s): RP 13/59430 RP 13/54931 RP 13/59432 RP 13/59432 13/59433 13/59437 13/59441

reasons for decision 1 These reasons are provided pursuant to section62 (2) of the Civil and Administrative Tribunal Act 2013 (the "NCAT Act") at the request of the applicants and the respondents. The Tribunal gave oral reasons on 1 May 2014. The applicants and their representative were present as well as the respondents' representative. The hearing was sound recorded, however the reasons are produced from the Member's notes and recollections. 2 The Tribunal received six applications which claimed that proposed rent increases for sites at The Rocks Village at South West Rocks were excessive. The applications were listed for hearing at Kempsey on 6 February 2014 and 1 May 2014. 3 Most of the applicants appeared in person and Alan Wilkinson of the Affiliated Residential Park Residents Association was granted leave to represent the applicants. The respondents did not attend the hearing, however leave was granted for them to be represented by Roman Tarnawsky. 4 The parties were given an opportunity on 1 May 2014 to reach agreement pursuant to section 37 of the "NCAT Act". Although the parties put considerable effort into the conciliation process they could not reach agreement and the matter proceeded by way of an informal hearing. 5 The applicants each occupy a site within The Rocks Village upon which is located their own relocatable home and which is occupied as their principal place of residence. The parties have each entered into a residential site agreement under the "RP Act". 6 Schedule 4, Part 3 of the "NCAT Act" establishes that the functions of the Tribunal in relation to the "RP Act" are allocated to the Tribunal's Consumer and Commercial Division. The present matters proceeded in this division. 7 There are 51 permanent sites in the park and six of these residents have made applications to the Tribunal. The applications are of a pro forma type and each seeks the same orders. The orders sought are poorly constructed, and in fact, some refer to incorrect sections of the "RP Act". However the orders sought are; * an order under section 53(3) of the "RP Act" that the rent increase is excessive * an order under section 55 of the "RP Act" that the rent increase is excessive * an order under section 56 of the "RP Act" that the rent increases is excessive. * an order under section 57 a-k of the " RP Act" that the rent increase is excessive when considering a-k * an order under section 58 of the "R P Act" that the rent increase is excessive. 8 The parties provided submissions and documents pursuant to the procedural directions issued by the Tribunal on 6 February 2014. 9 On 12 December 2013 the Tribunal issued an interim consent order that pending a further order of the Tribunal; " the rent increase notice of 7 October 2013 shall not take effect." 10 The notice of the increased rent payable under each residential site agreement was dated 7 October 2013 however of the six matters before me, the increased rent was payable from three different dates. The increased rent was payable not earlier than 60 days after the notice was given, as required under section 53(2) of the "R P Act". 11 Although the rent increase notices were dated 7 October 2013, they were posted by the park owners at varying dates after this date. The applications were lodged together on 11 November 2013 and within the time allowed under section 55 of the "RP Act" 12 The six residents were on three different rent levels and three different rent increase amounts were notified to the residents, ranging from $3.50 pw to $5.30 pw. 13 Three applicants, being Maureen Strathmore (RP 13/59430) Pat and Margaret McDermott (RP 13/59432) and Geoff and Trish Schofield (RP 13/59437) have a rent increase clause in their residential site agreements. The clauses are; * Strathmore: "Rent will be reviewed annually on 1 November and increased accordingly with CPI and /or government and local council increases." * McDermott: "Rents will be reviewed annually on 1 July and may be increased accordingly with CPI." * Schofield: "Rent will be reviewed annually on 1 November and may be increased accordingly with CPI." 14 I understand there have been previous consent orders made by the Tribunal in regards to these applicants, in 2004 and 2006. The agreed rent increase allegedly exceeded the prevailing CPI and were not in line with the review dates. The residents argue that the rent increase clauses in the residential site agreements are undisturbed by the previous consent orders. The park owners maintain that these rent increase clauses have been varied by the previous Tribunal orders. 15 Section 14 (1) of the "RP Act" establishes that at the expiration fo the fixed term, the residential site agreement is to continue to apply on the same terms as were applying before the end of the fixed term. The Tribunal has held on a number of occasions that such rent increase terms do continue to apply after the end of the fixed term. 16 Section 14(3) of the "RP Act" provides that a park owner or a resident may apply to the Tribunal to modify the terms of a residential site agreement, excluding statutory terms implied by the "RP Act" 17 It is my position that the previous consent orders made by the Tribunal, as to rent increases, do not act to extinguish the specified rent increase clause/term in the subject residential site agreements. In conciliation, leading to consent orders, parties can and often do, move away from the strict application of the evidence and the law, so as to achieve an agreed position. Such action and the resultant consent orders, do not then set aside the terms of the residential site agreement. 18 Should a park owner seek to modify the terms of the residential site agreement, then it can seek to do so by an order under section 14(3) of the "RP Act". No such orders have been sought or made in the previous consent orders regarding the three subject applicants. 19 Therefore, I hold that the rent increase clauses/terms in the three subject agreements continue to apply. 20 There was little argument before me as to the application of the clauses/terms. All three clauses say that the rent will be reviewed annually on either 1 July or 1 November. They do not state that the increases are to take place on 1 July or 1 November. I find no inconsistency with the dates in the clauses and the rent increase notices presently before the Tribunal. 21 In relation to the clause in the residential site agreement of Strathmore, no evidence was put to the Tribunal as to, "government and local council increases." It was generally agreed by the parties, that if the three clauses were found to still apply, then the applicable CPI would be the measure on which the rent increases would be determined. 22 I now turn my attention to the other three applications. The "RP Act" under section 57 sets out the factors to which the Tribunal may have regard in determining whether the rent increase is excessive. 23Section 57 (a) General market level of rents for comparable premises. Within The Rocks Village there is a large range in rents and a large number of rent levels within the range. Following the present rent increases the rents will range from $118.50 pw to $165.00 pw with some 22 rent levels within this range. 24The applicants suggest comparable parks to be: * Valla Beach Village -$101.00 pw * Flynn's Beach Caravan Park (Port Macquarie) -$103.00 pw including water 25The respondents suggest the following parks to be comparable: * White Albatross (Nambucca Heads ) - $128.00 pw to $130.00pw * Nambucca River Tourist Park -$129.00 pw * Newport Village Resort (Port Macquarie) - $136.00 pw * Valla Beach Village - $90.00 pw to $135.00 pw 26 There clearly is some conflict in the alleged weekly rents at some of the above parks, such as Valla Beach Village. Further the applicants contend that the rents at Newport Village Resort actually range up to the suggested rent of $136.00pw, and therefore are not all $136.00 pw. 27 I disregard Flynn's Beach Caravan Park as a comparable park, as the facilities at the park appear to be significantly fewer than those provided at The Rocks Village. There are obviously some discrepancies between the other parks and The Rocks Village, however the other parks do not provide a reasonable comparison to The Rocks Village. 28 Both parties have made considerable comment about the size of sites at the subject park, the variation in the site sizes and the classification of some sites as "premium" or "waterfront." There is nothing in the "RP Act" to prevent sites being so classified by the park owner, nor is there any impediment to the park owner charging a different rent for different sites within the park, irrespective of how they may be classified. 29Section 57 (b) Value of the residential premises. No evidence of relevance has been put by the parties on this and nothing really turns on this factor 30Section 57( c) Frequency and amount of past increases. The evidence is that rents have generally been increased annually. The actual rent increases have varied significantly with some approximating the prevailing CPI, while others have increased at rates well in excess of the CPI. 31Section 57 (d) A general price index. The parties agree that the relevant general price index is the CPI increase of 2.6%. 32Section 57 ( e) The conduct of the parties. The applicants submit no argument on this issue. The park owners' arguments on this factor do not directly impact upon the determination to be made. 33Section 57 (f) Amount of outgoings. As I have stated in previous decisions this is a factor into which the applicants can put little evidence. In the present matter the park owner submits no evidence to the Tribunal on this factor. 34Sections 57 (g) (h) (i) (j). Limited evidence has been put by the parties under these headings and such evidence would have little influence on the issue to be determined, being whether the notified rent increase is excessive. However I hold that the facilities at The Rocks Village, are in good order and are well maintained. 35Section 57 (k) Any other relevant matter. The issue raised by the applicants of the park owners allegedly measuring sites and the resultant possibility of the park owners seeking to amend existing residential site agreements, or enter into new agreements, appears to be without merit, and is not relevant to the determination of the matter before the Tribunal. 36Conclusions The "RP Act" sets out in section 57 a number of factors to which the Tribunal may have regard in determining whether the proposed rent increase is excessive. The factors are not ranked and none of the factors are predominate. The function of the Tribunal is to take into account the evidence submitted and to decide on balance whether the rent increase is excessive. What is under consideration is not the level of the rent itself, but the increase in the rent. 37 The onus is on the applicants to prove on the balance of probabilities that the rent increases is excessive. 38 On considering all the evidence adduced, the more relevant factors in my opinion are: * Comparable residential parks and sites range in rent from $90.00 pw to $136.00 pw. The majority of the rents are positioned well above $100.00 pw. * The relevant general price index is 2.6%. * The significant variation within The Rocks Village of site sizes, and the positioning of sites. * No details of the park's outgoings have been presented by the park owners. * The proposed rent increases are; (a)RP 13/59441, Beverly Hedger, $117.70 pw to $123.00 pw being an increase of $5.30 pw or 4.5% (b)RP 13/59433, Bev and Ian Gannaway, same as for Hedger above. (c)(c) RP 13/59431, Brian and Audrey Whyley, $116.50 pw to $121.00 pw being an increase of $4.50 pw or 3.9% 39 After having regard to the evidence, I do not consider the rent increase for Mr and Mrs Whyley to be excessive. The rent is to increase to $121.00 pw from 2 January 2014 for a period of 12 months. 40 On balance, I do however conclude that the rent increase for Mr and Mrs Gannaway, and Ms Hedger to be excessive. I determine the rent increase to be $4.70 pw which represents an increase of 4.0 %. These rents are to be $122.40 pw from 15 December 2013 for a period of 12 months. 41 In view of the interim order made by the Tribunal on 12 December 2013 it is not appropriate to make an order regarding over paid rent. 42Orders are made to give effect to the determinations above. M Gilson General Member Civil and Administrative Tribunal of New South Wales 18 June 2014