Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Dennis Wallis & Ors v Gennacker Pty Ltd [2014] NSWCATCD 165 Hearing dates: 25 June 2014 Decision date: 05 September 2014 Before: J McMillan, General Member Decision: 1.The rent shall not exceed the sum per week as shown in the schedule below as from 1 April 2014 to 31 March 2014. SCHEDULE SITE RENT SITE RENT SITE RENT 1 $169.20 39 $227.20 89 $168.00 4 $168.00 42 $192.00 105 $172.70 6 $168.00 43 $190.90 109 $169.20 7 $168.00 47 $174.20 117 $168.00 8 $175.40 60 $169.20 120 $169.20 9 $175.40 64 $168.00 124 $168.00 14 $174.20 65 $168.00 127 $168.00 15 $174.20 66 $168.00 132 $185.80 17 $174.20 74 $169.20 133 $186.50 18 $174.20 80 $168.00 134 $187.80 19 $174.20 82 $168.00 137 $186.70 35 $227.20 83 $168.00 200 $168.90 84 $168.00 2.The increase of 3.3% and charged from 1April 2013 to 31 March 2014 is to be refunded to the applicant(s). 3.The rent for site 136 is not be increased because the agreement is under a fixed term for the period 1 February 2014 and ending on 31 March 2016 and there is no provision in the agreement for increasing the rent during the fixed term. Catchwords: Nil Legislation Cited: Residential Parks Act 1998 Cases Cited: Nil Texts Cited: Nil Category: Principal judgment Parties: Dennis Wallis & Ors (applicants) Representation: Nil Nil File Number(s): RP 14/11730 Publication restriction: Unrestricted or Nil reasons for decision APPLICATION 1An order for repayment of overpaid rent An order that a proposed rent increase is excessive 2The park owner challenged the standing of a number of the applicants to bring the applications. It was argued that they were not under the Residential Parks Act 1998 because they had signed agreements, prepared by the park owner, and titled Occupation Agreement. These agreements, it was argued, were made under the Holiday Parks (Long-term Casual Occupation) Act 2002. The park owner tendered seven residential site agreements under the Residential Parks Act 1998 and 19 other agreements titled occupation agreement. The occupation agreements comprised a front sheet, a copy of the park rules and attached was an occupational agreement that had in bold letters "Park Owner's Copy" which were blank. A perusal of these show that six provided for a term of more than 12 months, three provided for a term of 6 months, one provided for a term of 2 months and five provided for a term of one month and one did not provide for any fixed term. The agreement for site 136 provided for a fixed term commencing on 1 February 2014 and ending on 31 March 2016. 3Residents who signed occupational agreements gave evidence before the Tribunal. None had a principal place of residence other than the park. They had their address at the park for mail drivers' licence and the electoral roll. All conceded that they were not given approval by the park owner to occupy their site as a principal place of residence. Some received rent assistance from Centrelink that was given on the basis that the residence they occupied in the park was their principal place of residence. It is noted the park owner denied that the residents had presented forms to it for them to apply to Centrelink for rental assistance. The park owner in its submissions denied that it knew the number of nights the resident occupied the premises. 4One or two owned residences at the time they entered into the agreements but these have been sold or assigned to family members. 5All had occupied the sites continuously since they commenced occupation and stayed for a period of more than 180 days in a 12 month period. 6Section 5 of the Holiday Parks (Long-term Casual Occupation) Act 2002 provides; 5 Act applies to long-term casual occupants (1) This Act applies to any occupation agreement in relation to a site: (a) entered into by an occupant who has a principal place of residence somewhere other than the site, and (b) under which the occupant installs the occupant's own moveable dwelling on the site and leaves it there all of the time that the occupation agreement continues in force, and (c) under which the occupant can occupy the site for no more than 180 days in any 12-month period (in a continuous or broken period), and (d) under which: (i) the occupant agrees, with the consent of the park owner, to be an occupant on a casual basis for at least 12 months, or (ii) the occupant has, with the consent of the park owner, been an occupant on a casual basis for at least 12 months. (2) This Act applies whether the relevant occupation agreement was entered into before or after the commencement of this section, unless a particular provision provides otherwise. (3) Subject to sections 14 and 16, if this Act applies to an occupation agreement, it so applies despite the terms of any such occupation agreement or any other contract, agreement or arrangement, whether made before or after the commencement of this section. 7Sections 6 and 7 provide; 6 Agreements and sites to which Act does not apply (1) This Act does not apply to an occupation agreement of a class prescribed by the regulations for the purposes of this subsection. (2) This Act does not apply to: (a) any site ordinarily used or intended to be used for tourist arrangements or other holiday purposes other than long-term casual occupation of the kind described in section 5 (1), or (b) any site, or part of a site, prescribed by the regulations for the purposes of this paragraph. 7 Residential Parks Act 1998 has no application (1) The Residential Parks Act 1998 does not apply to an agreement to which this Act applies. (2) Nothing in this Act has the effect of entitling an occupant under an occupation agreement to which this Act applies to be regarded as a resident under a residential tenancy agreement to which the Residential Parks Act 1998 applies. 8Sections 5, 6 and 6A of the Residential Parks Act 1998 (the Act) relevantly provide; 5 Application of Act (1) This Act applies to residential tenancy agreements under which: (a) the residential premises consist of a residential site, or a moveable dwelling on a residential site, and (b) the resident occupies the residential premises as the resident's principal place of residence, and (c) in the case of an agreement entered into after the commencement of this section, the resident has the approval of the park owner or park manager to occupy the premises as the resident's principal place of residence. (1A) A person does not cease to occupy residential premises as the person's principal place of residence by reason only that the person is absent from the premises for the purpose of receiving medical, nursing or domestic care. (2) This Act applies whether the relevant residential tenancy agreement was entered into before or after the commencement of this section, unless a particular provision provides otherwise. (3) Where this Act applies to a residential tenancy agreement, it so applies despite the terms of any such residential tenancy agreement or any other contract, agreement or arrangement, whether made before or after the commencement of this section. 6 Agreements and premises to which Act does not apply (2) This Act does not apply to: (c) any premises ordinarily used for holiday purposes, or 6A Act does not apply to long-term casual occupation This Act does not apply to an agreement or to a site to which the Holiday Parks (Long-term Casual Occupation) Act 2002 applies. 9The Tribunal in consideration of the evidence is satisfied the residents do not have another place as their principle place of residence. They have occupied the sites for more than 180 days in a twelve month period. The park owner has dealt these residents as if they were under the Act and has given notices of rent increase in accordance with the Act. The park owner has not given approval in writing for any resident to occupy their site on a permanent basis but has not sought to enforce provisions of the occupation agreement particularly when being aware that the sites were occupied for more than 180 days of a 12 month period. He has not sought to claim an occupation fee for the overstayed period but continued to collect site fees. It is the view of the Tribunal that the park owner is well aware of the period of time people occupy their sites. 10The distinction between the two acts is the location of the resident's principal place of residence. The residents have not acted in any other manner than as permanent residents of the park and their relationship with the park owner has been consistent with the relationship provided under the Residential PRKS Act 1998. In consideration of the evidence before it the Tribunal finds the residents who applied to the Tribunal have their principal place of residence in the park and are therefore under the Residential Parks Act 1998. OVERPAID RENT 11The Tribunal on 19 April 2012 in matter No RP 12/09297 made orders by consent of the parties. That matter was the "master file" number for applications made by residents of the respondent residential park. The orders included an order that stated; "The rent payable per week by the applicants for a period of 12 months from 1 April 2013 will increase by a further 3.3%." The park owner duly increased the rents by 3.3% but did not issue a notice of rent increase and the applicant residents now seek to have any money paid refunded. 12Section 53 of the Act relevantly provides; 53 Increase of rent (1) The rent payable by a resident under a residential tenancy agreement must not be increased except by notice in writing given to the resident specifying the amount of the increased rent and the day from which the increased rent is payable. (2) A day specified as the day from which increased rent is payable must not be earlier than 60 days after the day on which notice of the increase was given under this section. (8) A rent increase .......... is not payable by a resident under a residential tenancy agreement unless the rent is increased in accordance with this section or by an order of the Tribunal. (9) A park owner must not contravene or fail to comply with this section. Maximum penalty: 10 penalty units. 13Section 54 of the Act provides; 54 Tribunal may make orders for refund of overpaid rent where rent increase was not properly notified (1) A resident under a residential tenancy agreement may apply to the Tribunal for an order directing the refund of overpaid rent on the ground that the rent increase was not properly notified. (2) The Tribunal may make an order directing the refund. (3) An application under this section must be lodged no later than 12 months after the relevant notice was given to the resident. 14These applications were lodged on 20 February 2014 which is within 12 months of the rent being increased. 15The park owner argued that the rent increase was provided for in the orders made by consent on 12 April 2012. The Tribunal under the provisions of section 58(4)(a) is limited to making a rent order for period that does not exceed 12 months. The order made by the Tribunal is therefore not notice of a rent increase but a notation of what the parties agreed. Even if it had stated the amount of rent for each site this does not satisfy the requirement of the Act in respect notice. Notwithstanding this section 53(1) uses the word "must" making it mandatory for a notice of rent to be issued when the rent is being increased and that notice must include the amount of the increased rent and the date from which the increased rent is payable. 16The Tribunal makes orders relating to rent increases where there is a finding that a rent increase is excessive. The Act limits that period that the rent increase applies to 12 months. The Tribunal finds the park owner has not complied with section 54 of the Act and any payments received are to be refunded to the residents. EXCESSIVE RENT INCREASE 17The park owner issued a notice of rent increase to the applicants dated 17 January 2014. No challenge was made as to the validity of the notice or the time frame in which the applications were lodged with the Tribunal. The residents lodged applications with the Tribunal on 20 February 2014 seeking orders; (i)Pursuant to sections 55 and 56 of the Residential Parks Act 1998 (the Act) that the proposed rent increase is excessive; (ii)Pursuant to section 56 of the Act that the current rent is excessive due to the withdrawal of or reduction of services and facilities; and A total of 39 applications were lodged and they came before the Tribunal on 17 March 2014 when they were adjourned and orders were made for the exchange of documents between the parties that were intended to be relied upon at the hearing. The matters were heard on 22 May 2014 and 25 June 2014. The member reserved his decision. 18Section 57 of the Act provides; 57 Matters to be considered in determining rent applications The Tribunal may, in determining whether or not a rent increase or rent payable under a residential tenancy agreement or a proposed residential tenancy agreement for residential premises is excessive, have regard to each of the following factors: (a) the general market level of rents for comparable premises in the same residential park and in other residential parks in the locality or a similar locality, (b) the value of the residential premises, (c) the frequency and amount of past rent increases under the residential tenancy agreement or previous residential tenancy agreements between the same park owner and resident, (d) a general price index (such as the Consumer Price Index), (e) the conduct of the parties, (f) the amount of any outgoings in respect of the residential premises required to be borne by the park owner under the residential tenancy agreement or proposed agreement, (g) the estimated cost of any services provided by the park owner or the resident under the residential tenancy agreement or proposed agreement, (h) the value and nature of any fittings, appliances or other goods, services or facilities provided with the residential premises, (i) the accommodation and amenities provided in the residential premises and the state of repair and general condition of the premises, (j) any work done to the premises by or on behalf of the resident, to which the park owner has consented, (k) any other relevant matter. I shall deal with each of these separately. (a)the general market level of rents for comparable premises in the same residential park and in other residential parks in the locality or a similar locality, 19The applicants nominated ten other parks as being comparable. The table below stets out both the differences and common aspects of these parks. The particulars were tendered to the Tribunal in the documents of the applicants. Ski Lodge park has been deleted as there three items not included in the table. These were total number of sites, permanent sites and metered power. HOMESTEAD HOLIDAY PARK HACIENDA HOLIDAY PARK PYRAMID HOLIDAY PARK DRIFTERS HOLIDAY VOLLAGE RIVER RETREAT COLONIAL TWEED HOLIDAY & HOME PARK BILLABONG THE PALMS ROYAL PACIFIC CHINDEREH LAKES SITE FEES $173.75 $178.70 $146.50 $163.00 $123.50 $135 $150.00 $140 $150 $135 $234.90 $268.50 $126.00 $159.00 TOTAL SITES 172 196 192 94 88 171 226 50 78 PERMANENT SITES 97 124 37 78 68 226 50 65 METERED POWER YES YES YES NO YES YES YES YES YES YES MANAGE ON SITE SHARED YES YES YES YES YES YES YES YES YES BBQ AREA ON COUNCIL LAND YES YES YES YES YES YES YES YES NO SWIMMING POOL YES YES YES YES YES YES YES YES NO YES WATERFRONT YES YES NO NO YES YES NO YES NO YES DOG FRIENDLY NO NO NO YES NO NO NO NO YES SHOP YES YES NO NO NO NO NO NO YES 20The park owner tendered a letter the rent in the adjacent park which is Hacienda Holiday Park. That park although owned by a different company has common directors with Homestead Holiday park. The letter states that the rents in Hacienda Holiday Park range from $178.70 per week for internal sites without on-suites to $268.50 for waterfront sites and water is not separately metered. No other aspects of the park were identified. 21The park owner argued that the park is away from highway noise and well situated to other facilities in the area such as clubs, hospitals, golf, medical practitioners. The park owner disputed the meaning of permanent sites as no definition is provided. 22It noted that Pyramid Holiday Park is under the flight path of Coolangatta airport. Also in the flight path is Colonial Tweed Park. A road lies between it and the river frontage Drifters backs directly onto the M1 motorway. 23The range of rents within the park is set by their locality within the park. Other factors affecting these rents are determinations of the Tribunal in the past and negotiations between the parties. The park owner claimed that premises in the park are "readily saleable" and those entering the park establish the general market level for rent. 24From the evidence tendered the Tribunal finds that the comparable parks are Homestead and Hacienda. The Tribunal has found that there is distinction between the two on the grounds that there is a tourist component with Hacienda that does not apply to Homestead and therefore the difference. It is noted that the applicants claim there is tourists allowed along the river bank but there is no evidence or comment from the park owner on this matter. 25It is noted that the park has 172 sites. No particulars were furnished by the park owner as to the breakdown of these sites in terms of permanent sites. (b)the value of the residential premises, 26No evidence was tendered by the applicants on this sub-section. (c)the frequency and amount of past rent increases under the residential tenancy agreement or previous residential tenancy agreements between the same park owner and resident 27Both parties tendered evidence on this sub section. The applicants tendered a table of increases as did the park owner. The applicants table had figures that were different to the park owners. These were corrected at the hearing and appear in the table below. YEAR WEEKLEY RENT INCREASE % INCREASE CPI 2005 $103.80 $6.80 7.05 2.8% 2006 $111.90 $8.10 7.80 3.3% 2007 $121.80 $9.90 8.8 3% 2008 $127.25 $5.45 4.4 3.7% 2009 $134.65 $7.40 5.8 2.1% 2010 $142.90 $8.25 6.1 2.7% 2011 $152.20 $9.30 6.59 3.1% 2012 $162.55 $10.35 6.8 2.5% 2013 $167.90 $5.35 3.3 (AGREED) 2.8% The average increase for the period 2005 to 2013 is 6.3%. (d)a general price index (such as the Consumer Price Index) 28No evidence was tendered by the applicants on this sub-section but it is general knowledge that it is 2.24% for the period commencing 31 March 2013 - 31 December 2013 Sydney All Groups. (e)the conduct of the parties 29The applicants claim that the electricity mushrooms have been replaced and residents have not been provided with keys for these. The mushrooms house the circuit breakers for each residence and when they "trip" the resident needs to reset them. With the mushroom being locked they cannot do this but need to have park management come and open the mushroom. 30The park owners' position on this is that the mushrooms are the property of the park and the manufacturer's specification require that they remain locked. The purpose of this it to minimise dust and the elements form causing damage. The park owner also maintains that it prevents one resident from accessing the power of another. It also assists in managing the devices that are fitted to the power outlet contained in the mushroom. Residents have a number to call for assistance. (f)the amount of any outgoings in respect of the residential premises required to be borne by the park owner under the residential tenancy agreement or proposed agreement 31No evidence was tendered by the residents on this sub section. 32The park owner tendered a statement of outgoings prepared by its accountant. Ms Tanya Hickling is the accountant of the company and she prepared the document. She appeared at the Tribunal and gave evidence before it. She stated that in the preparation of the figures she excluded costs attributable to the tourist operations of the park. As well as depreciation allowances and items that are capital in nature. She maintained that costs have increased in the park for the period 10 January 2013 to 9 January 2014 is 6.4%. No material was tendered that substantiated the figures. The table below shows those figures relied upon. EPENDITURE CATEGORY BASE PERIOD PERIOD INCREASE 10/01/12 - 09/01/13 10/01/13 - 09/01/14 DECREASE ACCOUNTANCY 100.00 107.14 7.14% BANK FEES AND CHARGES 100.00 110.41 10.41% CLEANING AND POOL SUPPLIES 100.00 113.09 13.09% COUNCIL RATES AND CHARGES 100.00 107.81 7.81% ELECTRICITY 100.00 110.05 10.05% FUEL 100.00 101.91 1.91% GAS 100.00 114.71 14.71% INSURANCE 100.00 107.03 7.03% LEGAL AND PROFESSIONAL FEES 100.00 145.46 45.46% LICENCES AND PERMITS 100.00 103.59 2.91% PRINTING AND STATIONERY 100.00 101.03 3.59% REPAIRS AND MAINTENANCE 100.00 107.30 7.30% SUNDRY GENERAL EXPENSES 100.00 110.95 10.95% TELEPHONE 100.00 103.22 3.22% WAGES AND ON-COSTS 100.00 106.28 6.28% WASTE REMOVAL 100.00 107.71 7.71% TOTAL 100.00 106.57 6.57% (g)(the estimated cost of any services provided by the park owner or the resident under the residential tenancy agreement or proposed agreement, 33No evidence was submitted on this sub-section. (h)the value and nature of any fittings, appliances or other goods, services or facilities provided with the residential premises 34No evidence was submitted on this sub-section. (i)the accommodation and amenities provided in the residential premises and the state of repair and general condition of the premises 35No evidence was submitted on this sub-section. (j)any work done to the premises by or on behalf of the resident, to which the park owner has consented 36No evidence was submitted on this sub-section. (k)any other relevant matter 37The applicants made submissions relating to the relationships of people employed by the park, and alleges breaches of the park owners' responsibilities under the terms of the agreement. The former are irrelevant and the latter are matters where remedies may be sought under section 16 of the Act and do not carry weight in this application. 38The task of the Tribunal is to determine whether the rent increase is excessive and in so doing it weighs those matters required in Section 57 of the Act. Homestead Holiday Park attracts a rent that is at the high end of rents for holiday parks in the area. The rent increase sought is 6.4 % of a rent that is invalid due the error of the park owner not issuing rent increase notices. The Tribunal notes the parties agreed to a rent increase of 3.3% for the period commencing 1 April 2013 but due to the park owner not issuing a notice of rent increase that increase is to be refunded. The Tribunal is of the view that this was an error by the park owner and not an attempt to circumvent the provisions of the Act. In determining whether the rent increase is excessive the Tribunal has regard to this increase not being received by the park owner. 39The Tribunal notes the CPI has increased by 2.24%, the average rent increase since 2005 is 6.3% pa and the park owner's claim that its costs have increased by an average of 6.57% in the past 12 months. It is also noted that Homestead Holiday Park has a rent band that is at the high end of general market rents and the rent increase as it stands would raise it still further. Weighing these factors and the evidence before it the Tribunal determines that the amount of the increase is excessive and determines the rent as per the following schedule. SCHEDULE SITE RENT SITE RENT SITE RENT 1 $169.20 39 $227.20 89 $168.00 4 $168.00 42 $192.00 105 $172.70 6 $168.00 43 $190.90 109 $169.20 7 $168.00 47 $174.20 117 $168.00 8 $175.40 60 $169.20 120 $169.20 9 $175.40 64 $168.00 124 $168.00 14 $174.20 65 $168.00 127 $168.00 15 $174.20 66 $168.00 132 $185.80 17 $174.20 74 $169.20 133 $186.50 18 $174.20 80 $168.00 134 $187.80 19 $174.20 82 $168.00 137 $186.70 35 $227.20 83 $168.00 200 84 $168.00 J McMillan General Member Civil and Administrative Tribunal of New South Wales 5 September 2014 ********** I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar 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: 31 October 2014