Robert and Lynette Hancock v R V Parks Australia Ltd [2014] NSWCATCD 134

Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Robert and Lynette Hancock v R V Parks Australia Ltd [2014] NSWCATCD 134 Hearing dates: 25 July 2013 Decision date: 20 February 2014 Before: G Bassett, General Member Decision: The application is dismissed because having considered the material placed before it, the Tribunal is not satisfied (at the civil standard of proof) that the grounds required to make the orders have been established. Catchwords: Commission, effective cause, contract, assignment, site agreement Legislation Cited: Property, Stock and Business Agents Act 2002 ("PSBAA"); s 85 Residential Park Act ("the Act") Cases Cited: Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; Haraba P/L v Castles [2007] QCA 206 Harmer Casino Village RV Resort (Residential Parks) [2009] NSWCTTT (20 April 2009 Western Export Services Inc v Jared International Pty Ltd [2011] HCA 45 Category: Principal judgment Parties: Robert and Lynette Hancock (Applicants) R V Parks Australia Ltd (Respondent) File Number(s): RP 13/5389

reasons for decision 1The application was lodged on 25 January 2013. 2A park owner or a resident of a residential park may apply to the Tribunal for the resolution of any dispute concerning the sale of a moveable dwelling while it is installed in a residential park. The Tribunal has jurisdiction to hear the matter. 3Reasons for requesting the orders as set out in the initiating application were set out as follows: "Disputed commission demanded on sale of manufactured home. Refer to detailed attachments totalling 48 pages." 4In the following 48 pages the applicants relied on the following documents: (a)Letter dated 29 August 2012 from the Hancocks noted without prejudice and "To Whom it May Concern"; (b)Appointment to Act 30 March 2012; (c)Letter JJ to RH 28 March 2012; (d)Full colour page advertisement in Motor Home and Caravan Park Trader magazine; (e)Quarter page ad in the CMCA Wanderer magazine; (f)Random ad displayed around the village; (g)Promotional sale material displayed at the front of the house; (h)3 page list of features inclusions; (i)Floor plan; (j)Site plan; (k)Village brochure for our house; (l)Letter to management from Jeff Gibson (purchaser) dated 21 August 2012; (m) Agreement to purchase; (n)Contract of Sale; (o)Payment of commission direct deposit receipt, 22 August 2012; (p)Village management Home Sales Advice; (q)Request for assignment of Lease, 22 August 2012; (r)Letter of consent to assignment of Lease, 24 August 2012; (s)Various emails from 14 August 2012 to 24 August 2012. 5On 2 April 2013 the respondent also lodged with the Tribunal various documents. These included: (a)Written submissions and timeline; (b)Standard form Residential Site Agreement; (c)A letter dated 23 March 2012 from the Park Management to the Hancocks regarding proposed sale of manufactured home; (d)Email dated 13 March 2012 from the Hancocks to Park Management; (e)Appointment to act in sale of manufactured home; (f)Email from Hancocks to park dated 4 April 2012; (g)Various other emails; (h)Manufactured home Sales Advice; (i)Schedule 6 Deed of Assignment dated 22 August 2012; (j)Banking records showing payments from Hancocks to the park; (k)Letter of consent to assignment of Lease dated 24 August 2012; (l)Tenant status report; (m)Various records in relation to water payments and usage. 6Various dates for hearing were adjourned due to requests from both parties at respective times. 7Dr Martin as the representative for the applicants stated that a clause of the Residential Site Agreement contained additional terms appointing the park owner as agent in the sale of the dwelling. That agreement indicated the commission to be charged. It was a non-exclusive agency agreement. 8The applicant also indicated to their representative that they relied on the letter they wrote on 29 August 2012 as a detailed outline of their case. 9The Hancocks signed an Appointment to Act on 30 March 2012 nominating Julie James, a manager of the park, as a person who would handle the listing and sale of the property. 10They said Ms James visited their house and took particulars for a listing on the village website and also for a brochure to be displayed at the reception office for the park alongside all the other houses listed for sale. 11In April 2012 Ms James contacted the Hancocks and informed them she was having trouble with the listing as the park website had been hacked. The park IT people were working to resolve the problem. The Hancocks also said that when the site was operational, incorrect information was listed. The Hancocks said it was not until Wednesday 15 August 2012 that Ms James sent 2 emails informing them that the correct information for the listing had been updated on the website as well as in the promotional brochure. They claimed this was an unreasonable delay of almost 5 months since the first attempt to list the property. 12There was an ongoing email exchange between the Hancocks and Ms James in which the Hancocks asserted the park did not actively promote the sale of pre-loved homes. Ms James replied that the market was very quiet and there were very few "lookers". The Hancocks asserted that in this period, on almost a daily basis, they would see prospective future residents and buyers wandering around the village with promotional papers in their hands but only in the area of the new display homes. They alleged they saw the village red minibus conducting promotional tours of the new houses for sale. However, they also stated that the bus of prospective buyers passed their own home. They saw Ms James waving the attention of the prospective purchasers towards the golf course. The purpose of this, the Hancocks submitted, was to distract the occupants of the bus from seeing the 'For Sale' sign on their own home. The bus did not stop or slow down to allow an inspection of their home. 13Having lost faith in the park management's willingness to promote the home, the Hancocks then organised their own active marketing and promotion campaign and carried out extensive and expensive advertising. They placed full colour page advertisements in various publications including magazines in the park market. They provided copies of these advertisements in their documents. They also provided an information pack via email to prospective buyers who responded to their advertisement. That email contained a fully detailed 3-page list of features and inclusions, including the floor plan, site plan and a photo gallery. They said they had a reasonable amount of response and enquiry to their own promotions as opposed to the lack of response to the park owners. 14In August 2012 a complex email trail arose between the parties. These emails were in the evidence supplied by the parties. 15On 10 August 2012 the Hancocks wrote to Ms James, commenting on impressive features of the web listing of their residence. Never the less, pointed out things that had not been done. They complained about the length of time it took for alleged deficiencies of the web site listing to be rectified. 16On 14 August the Hancocks alleged in an email that the web site was unaltered since their request for changes on 10 August. On the same day Ms James indicated the web site corrections were being attended to and it was rectified that day. Despite that email, in her oral evidence Ms James said that the problems with the website listing of the premises had been rectified by 4 April 2012. Attachment 8 of her documents was a signed approval by Mr Hancock of the changes to be made to the listing. She said that a copy of the brochure was also put as a PDF file on the website and made available in hard copy form in the office. 17On 15 August 2012 the Hancocks were first introduced to a prospective buyer by the park management. That same day, they had 3 inspections. One purchaser was accompanied by a local real estate agent that was responding to the Hancocks' own promotions. Another was in response to an advertisement the Hancocks had put in a magazine. 18The third inspection was by the eventual purchasers. While showing one of their purchasers around the house, the Hancocks received a telephone call from Ms James who said that she had a potential purchaser who had asked to be shown their house. An appointment was made for at 3.00pm that day. The Hancocks asserted that that request specifically asked for those purchasers to be only shown the Hancocks' house. 19The purchasers arrived at the property at 3.00pm with Ms James who introduced them. The Hancocks gave the prospective purchaser the details and explanation of the house. The Hancocks alleged Ms James did nothing to promote the desirable features of the house. Mr Hancock says that after viewing their home, the prospective purchasers were shown another pre-owned home by Ms James and then also taken to the area containing new homes. 20On 17 August 2012, the prospective purchasers attended another inspection without Ms James being present. They made an offer of $265,000 to purchase the premises, which was accepted. Mr Hancock drew up a preliminary agreement for purchase. 21On 19 August the Hancocks emailed Ms James saying they had put promotional material around the park during its Bushman's Festival. They indicated an offer for the property had been made to them on 18 August 2012. The question of any commission payable was raised. It was conceded that some commission may be payable. 22That preliminary agreement for purchase was signed on 19 August 2012. 23By email on 20 August 2012, Ms James, on behalf of the park stated: "I believe that the company would be considered the effective cause of sale and commission would be payable as per the agreement signed on 30/3/12." 24On 20 August Ms James emailed the Hancocks and informed them of the second inspection. She indicated the purchasers were given the documents to effect the sale including draft site agreement, by-laws of the park and a copy of the booklet in relation to the Act. Ms James indicated in that email that park management considered it was the effective cause of sale. However, the email said the purchasers were only considering making an offer, perhaps unaware of what had taken place between the purchasers and the Hancock. The purchasers had asked Ms James what commission wold be payable on the sale. 25Later on 20 August the Hancocks replied to the email of Ms James. They dispute commission was payable. They indicated there was no requirement for a deposit to be paid. The park management was asked to arrange assignment of the Hancocks' site agreement to the purchasers. The Hancocks suggested the purchasers be invoiced for the commission. Commission on a sale price of $265,000.00 was noted at $7,287.50 GST inclusive. 26The actual purchaser wrote an email to park management dated 21 August 2012 questioning whether the park had been the effective cause of sale. This email was actually sent by the eventual purchasers to the Hancocks and it said it is what they intended to give to park management. It sought comments from the Hancocks. In that email, the purchasers said: (a)they looked at the Hancocks' property on the recommendation of a friend that it was the best value for the house; (b)they were motivated by information from the village newsletter and on the front of the list of pre-loved homes to arrange inspection through Park Management; (c)after the inspection of the Hancocks' premises, they were also shown display homes on the site they had not previously seen; (d)after the inspection, that they went back to management and were provided with a copy of the Residential Site Agreement and other forms and information about residential park and living; (e)that they arranged to inspect only one house, being the Hancocks' house when they first visited the management office; (f)they asserted that the only role of the Park Management in the sale was to arrange the appointment to inspect the Hancocks' house. 27On 21 August Ms James indicated in an email that the purchasers had not returned the site agreement. She had received an email from them disputing the commission park management said was payable. Ms James informed the Hancocks of the commission. 28On the same day the Hancocks replied to the email and asked Ms James to prepare the sale contract and the site agreement. However, Mr Hancock in his oral evidence said he had prepared this. The Hancocks asserted to Ms James that the purchasers would be paying the commission they had been told about the day before and if bank details were supplied the amount would be paid immediately. The purchasers were then to pay the Hancocks $2,565.00 on Wednesday 22 August to complete the sale. No objection to the commission was raised in this email. 29On 22 August Ms James email a sales advice and indicated the settlement would occur on Friday, 24 August 2014. The email of Ms James indicated: "You will need to complete the attached deed as necessary and return it to me so that I can obtain Board approval before the planned settlement on Friday." 30Bank details were given for payment of the commission. Despite alleging the purchasers would pay the commission, the Hancocks paid it later that day. Mr Hancock said they reluctantly paid because they were fearful they would lose the purchasers if there was delay over the site agreement not being assigned with the sale. They sent an email to Ms James indicated they disputed whether they should pay the commission. A Deed of Assignment for the site agreement was also prepared. 31The Hancocks submitted that the entire sale process for their premises was completed in 9 days and commenced on Wednesday 15 August 2012 and concluded on Friday 24 August 2012. Approval of the site agreement was received on Friday 24 August and the settlement transaction between the vendor and the purchaser was also completed on that day. 32The Hancocks asserted that park management listed their premises for sale as a pre-loved house but that management in fact directed its preferences to the sale of new homes when people made enquiries. They said that Park Management received large cash payments from builders of these new homes. They said that "it is rumoured" that cash payments on these new homes could be as high as $50,000.00 per house, whereas commission on the sale of a pre-loved house was only 2.75%. 33The Hancocks said Ms James was incompetent for only arranging Board approval of the site agreement on Thursday 23 August 2012 when the sale was meant to be on the Friday. Further, the park management was insisting on payment of the commission prior to any settlement having taken place and in the situation where the sale may not even proceed. 34Mr Hancock submitted that the Appointment to Act dated 30 March 2012, stated in the second last paragraph that "commission will be payable at the time of settlement". He had noted below on that document that "commission is payable in accordance with paragraph 2 of management confirming written advice dated 28 March 2012". Management's written advice 28 March signed by Julie James, says at paragraph 2, "to be eligible for commission the village needs to be the effective cause of sale". 35The Hancocks alleged the eventual purchasers were travelling around the country in a motor home at the time. A desirable feature of their home was that it had a purpose-built and designed RV port incorporated into the house structure. The purchasers had been staying in the village at the time and only had become aware of the sale of the Hancocks' house by accident, or, on the recommendation of one of the other site occupants of the park, not the park owner. The Hancocks indicated that the eventual purchasers saw some printed material displayed around the park, which indicated that enquiries should be made through the office. It was those displays the purchasers responded to when they made the enquiries with Ms James. It was the Hancocks' case that given their evidence that has been outlined above, that the park was not the effective cause of sale. 36They said no money had changed hands between the buyer and the seller at this time despite the fact that the Appointment to Act said that commission would only be payable at the time of settlement. Management demanded payment of fees before a site agreement could be issued to the purchaser. 37The Hancocks submitted park management played little at all in being an effective cause of sale. The Hancocks sought an Order that they be refunded 90% of the disputed commission in the sum of $6,558.75. 38During Mr Hancock's oral evidence, it was clear that the purchasers wanted a quick sale and no deposit was lodged. The sale was to go through to a full settlement. Mr Hancock admitted that he had made the decision that no deposit was to be lodged. 39There was no cross examination of Mr Hancock. 40In her oral evidence, Ms James relied on her diary notes showing that she arranged an inspection for the eventual purchasers. The property was also advertised in a magazine called Wanderer Monthly. This was a general advertisement for houses available in the park. She admitted that on 15 August, she took the eventual purchasers to the Hancocks' home as well as another pre-loved home and some display houses. She said that when she attended with the buyers to do the inspection, the Hancocks insisted she be present. She said that Mr Hancock took up her role during the inspection and that she stepped back. She gave the purchasers a copy of the brochure and went through the floor plan of the premises with them. After the inspection, park management was also asked about a building inspection report available for the Hancocks' property. She said the reason the demand was put on the Hancocks for payment of their fees was that Mr Hancock had agreed with the purchasers that no deposit was to be paid. Normally, the agent's fees would be taken from this deposit amount. 41In the closing submissions, park management submitted it did everything it could to support the sale. The property was advertised extensively. The eventual buyer was introduced. There was assistance at the inspection. The respondent provided all documents to enable the purchase. It took all steps necessary to ensure the assignment of the site agreement to the purchasers. 42This sale is not governed by the traditional legislation pertaining to real estate agents when they sell properties. As the Hancocks said in one of their emails, and as the Queensland Court of Appeal said in its decision Haraba P/L v Castles [2007] QCA 206, a manufactured home or structure on a residential site in a residential site at a park is a chattel, not real property. That case considered whether rights conferred under a site agreement are contractual in nature. At [20] Williams JA commented on the District Court finding that was being appealed: "At the very outset of his reasons for judgment the learned District Court judge made a serious error. He said that the respondent "purchased the right to occupy that site on 28 April 1995 for $42,000." As noted above, a home owner does not purchase a site. A site agreement merely confers a right to place a manufactured home on the site upon payment of the rental and otherwise complying with the terms of the site agreement. By a separate agreement the respondent purchased her manufactured home for $42,000 in April 1995, and on termination of the site agreement she remains the owner of that home. That error permeated the judge's reasons because subsequently he referred to the fact that termination of the site agreement as sought by the applicant would have the consequence of "excluding the respondent from recovering her investment after ten years." That was again repeated when he said that compensation pursuant to the Act would not "compensate her for the lost equity of some $13,000 accrued over the past 11 years". It needs to be repeated that pursuant to a site agreement under the Act a site is not "purchased". Nor, of course, is it appropriate to speak of an "equity" of a home owner in a site." 43The PSBAA, amongst other things, regulates the sale of real property between vendor and purchaser. That defines a type of non-exclusive agreement as existed between the parties in this case as: sole agency agreement means an agency agreement under which an agent agrees to act for the seller or buyer (the client) on the sale or purchase of property and that provides for the agent to be entitled to commission on the happening of an event (whether or not the agent is the effective cause of the happening of the event) unless the client is the effective cause of the happening of the event. 44But, as stated, the Hancocks' structure was a chattel, not real property. The PSBAA is not determinative of obligations to apply in the transaction that occurred between the park and the Hancocks. This is not a transaction that involved a standard form selling agency agreement between the Hancocks and a licensed real estate agent. Neither the park, nor Ms James are licensed real estate agents. This point of law has already been addressed in my judgement Harmer v Casino Village RV Resort (Residential Parks) [2009] NSWCTTT (20 April 2009 at [38]-[39] 45Their transaction is determined by Part 10 of the Act. At s 83 the Act states: 83 Park owner may act as agent in sale on-site (1) A park owner may act as a selling agent at the request of a resident or former resident of a residential park who wishes to sell a moveable dwelling that is installed on a residential site if the owner and the resident or former resident have made an agreement in writing for the park owner to do so. (2) A park owner who acts as such a selling agent is entitled to be paid a reasonable commission by the resident or former resident when the moveable dwelling is sold. (3) The amount of the commission, or the method of calculating the commission, is to be specified in the written agreement made between the owner and the resident or former resident before the sale. (4) However, no commission is payable if the moveable dwelling is sold otherwise than as a result of the park owner acting as selling agent. 46The Act also states at s 85: 85 Disputes relating to sale (1) A park owner or a resident of a residential park may apply to the Tribunal for the resolution of any dispute concerning the sale of a moveable dwelling while it is installed in a residential park, in particular: (a) any dispute about whether a commission or any other cost is payable to the park owner in relation to the sale of the moveable dwelling, and (b) any dispute about the amount of commission or any other cost payable or paid to the park owner in relation to the sale of the moveable dwelling, and (c) any dispute about interference by the park owner or other person with the sale of the moveable dwelling. (2) The Tribunal may make the following orders: (a) an order that the resident pay commission or any other cost of a specified amount to the park owner, (b) an order that the park owner refund any commission or cost paid by the resident, or any part of such a commission or cost, (c) any order preventing interference with the sale of the moveable dwelling. 47Section 83 without equivocation states that what determines the obligations between the parties in a sale is the written agreement between them. 48What was the agreement between the parties? First, the agreement to sell is partly found in the site agreement. Clause 25 indicates a park owner cannot unreasonably withhold consent to assignment of a site agreement to a purchaser. That agreement also clearly indicated the agreement between the parties was not exclusive to the park. The Hancocks, could, and did, market the property themselves. 49Through the letter of 23 March 2012 from park management to the Hancocks, the parties agreed commission would be 2.75% of the sale price plus GST. Park management undertook to market the Hancocks' property through brochures placed in the village, on the web site and with signs displayed at the property. 50The third piece of evidence constituting the agreement between the parties was the Appointment to Act dated 30 March which confirmed the commission payable. The Hancocks undertook to pay any commission from "a cheque payable for the balance to be made payable to Casino Village RV resort" if a deposit was not sufficient to cover the amount. At the bottom of that Appointment was a notation indicating that paragraph 2 of an advice written by the park management on 28 March 2102 would apply. That advice clearly stated that the park owner would only be paid commission if it was the effective cause of sale. 51Taken together those documents formed the contract between the parties. They are not ambiguous. They are clear on their face once a determination is made as to who was the effective cause of sale. 52The Hancocks assert that even if the park was in part an effective cause of sale his interpretation of the agreement was that commission could only be paid on settlement and not before as required by the park. But it was Mr Hancocks' undertaking to the purchasers that no deposit was required that activated the clause in the Appointment to Act which, with absolute explicitness, addresses the issue of what was to occur if not enough money was available at settlement from the deposit to cover commission. 53Intention in a contract is ascertained objectively, that is, by reference to what a reasonable person (that is, the Tribunal) would consider was intended and not by what the parties say they intended (a subjective test). The Appointment to Act clearly says the vendors would pay the deposit immediately if insufficient deposit funds were available. In Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24, the High Court stated that evidence cannot be adduced about the circumstances extrinsic to the contract if the words used in the contract are clear and unambiguous. At 403 in Codelfa, Mason J opined: "When the court picks up a written contract in order to construe the writing, it must "place itself in thought in the same factual matrix as that in which the parties were" as his Lordship said in Reardon Smith Line v Hansen-Tangen. But, having construed the writing, the court cannot take its pen and add a clause merely because it thinks the addition would be reasonable or fair or prudent. Though the parties are assumed to be reasonable and that hypothesis governs the construction of the express terms on which they have agreed, their hypothetical reasonableness warrants no alteration in their contractual rights by imputing to them an agreement to an additional term to which they have not agreed in fact and which is not implicit in the terms to which they have agreed. The necessary foundation for the creation of contractual rights and obligations is the agreement of the parties, and their agreement is equally necessary to vary those rights and obligations prior to discharge. A term implied in a contract is stamped with a contractual character because it is a part of the contract. It cannot derive that character from extrinsic circumstances which do not evidence a contract. It would be inconsistent with the foundation of contractual obligations to find an implied term in facts extrinsic to a written contract unless the contract stands in need of rectification." 54Recently, the High Court strongly reaffirmed the law in Codelfa in a joint judgement of Gummow, Haydon and Bell JJ. In Western Export Services Inc v Jared International Pty Ltd [2011] HCA 45 at [3], the court affirmed that the task of a court is to give effect to the intention of the parties as expressed in the contract: "Acceptance of the applicant's submission, clearly would require reconsideration by this Court of what was said in Cordelia Construction Pty Ltd v State Rail Authority of NSW by Mason J, with the concurrence of Stephen J and Wilson J, to be the "true rule" as to the admission of evidence of surrounding circumstances. Until this Court embarks upon that exercise and disapproves or revises what was said in Codelfa, intermediate appellate courts are bound to follow that precedent. The same is true of primary judges, notwithstanding what may appear to have been said by intermediate appellate courts." 55 I find that the park was the effective cause of sale. The advertisement for the Hancocks' property on the web site as at 4 April 2012 did contained some errors but these were not significant in any way. The property was identified. The indicative price was as on the Appointment to Act. The alterations sought by the Hancocks were indicated in an email of 13 July 2012. These merely asked for it to reflect the property was air conditioned and for the words "interest above" to be removed from the asking price. An enlarged photo of the house would not show when a web site user made a request. In any event, the Hancocks pursued a vigorous sales campaign of their own. There was no evidence that they had any significant interest in the property until 15 August when, by some quirk of fate, 3 potential purchasers turned up on the same day. It is more probable than not that it was a flat market between March and August 2012. Lack of purchaser interest until August was more probably due to the market conditions rather than any minor deficiencies in the park advertising of the property. There was no evidence that the 2 that were interested on 15 August as a result of the Hancocks marketing made any offer or showed any interest. The outcome of this case may have been very different if they had. 56Even the purchasers admit they reacted to brochures in the park put up by park management to arrange the inspection of the property, even if they were told about the sale by other residents. I note that the purchasers did not become aware of the sale through any of the advertising campaign of the Hancocks. Ms James did attend. It was a matter for the Hancocks if they took over that inspection on that day. In other words, Ms James introduced the purchasers to the property. It is also significant that the Hancocks tried to shift liability for payment of the commission to the vendors once the Hancocks were advised by park management that commission was to be paid. Considering the purchasers asked Ms James what the commission would be, on the balance of probabilities the Hancocks must have led the purchasers it was payable by the purchasers in addition to the purchase price. It was a strange role for the purchasers to advocate for the vendors as to why commission might not be payable. This would be a most unusual state of affairs. Commission is paid by a vendor and comes from the purchase price. What is clear that in their email of 21 August the Hancocks led the MsJames to believe the purchasers would be paying the commission. They changed their mind after. 57Section 41(1)(b) of the Act states that a park owner must not make any charge for giving consent to an assignment of a site agreement. Given the findings above, it also follows that what the residents paid was a commission, not a fee for assignment of the site agreement. 58I also find that as the park was the effective cause of sale, in the circumstances of the case it would not be just under s 85(1)(b) to apportion commission between the parties. The park fully carried out its obligations so that it was entitled to full commission.