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  • {solid} Appeal Determined (QCA)

Haraba Pty Ltd v Castles

 

[2007] QCA 206

Reported at [2008] 1 Qd R 151

 

SUPREME COURT OF QUEENSLAND

  

CITATION:

Haraba P/L v Castles [2007] QCA 206

PARTIES:

HARABA PTY LIMITED ACN 010 502 468 as trustee for THE HARABA TRUST trading as GATEWAY VILLAGE RESORT
(applicant/appellant)
v
DOROTHY CASTLES
(respondent)

FILE NO/S:

Appeal No 10612 of 2006

DC No 4121 of 2005

DIVISION:

Court of Appeal

PROCEEDING:

Application for Leave s 118 DCA (Civil)

ORIGINATING COURT:

District Court at Brisbane

DELIVERED ON:

22 June 2007

DELIVERED AT:

Brisbane

HEARING DATE:

10 May 2007

JUDGES:

Williams and Holmes JJA and Philippides J

Separate reasons for judgment of each member of the court, each concurring as to the orders made

ORDER:

1.Grant leave to appeal

2.Allow the appeal and set aside the orders of the Tribunal that the application be dismissed and of the District Court that the appeal to that court be dismissed

3.Remit the matter to the Commercial and Consumer Tribunal for the application to be heard and determined according to law

4.Set aside the order of the District Court that the applicant pay the respondent's costs of the application and appeal to that court

5.Order that the respondent pay the applicant's costs of the application and appeal to the District Court and of the application and appeal to this court to be assessed

6.Grant the respondent an indemnity certificate pursuant to the Appeal Costs Fund Act with respect to the costs ordered to be paid to the applicant

CATCHWORDS:

STATUTES – ACTS OF PARLIAMENT – INTERPRETATION – INTERPRETATION OF ACTS AND CLAUSES – PARTICULAR ACTS AND ORDINANCES – QUEENSLAND – where applicant was owner of resort consisting of manufactured home sites, holiday cabin sites, caravan sites and communal facilities – where respondent entered site agreement with applicant for use of site 42 as a manufactured home site – where agreement under ambit of Manufactured Homes (Residential Parks) Act 2003 (Qld) – where under the Act the "owner's" rights under the agreement continue until terminated – where right's conferred are contractual in nature – where applicant applied to the Commercial and Consumer Tribunal for an order terminating the agreement – where applicant proposed a change of use of site 42 from a manufactured home site to a holiday cabin site – whether a particular site was "part of the park" for purposes of s 38(1)(f) of the Act – whether the applicant intended to use a defined part of the park for "another purpose" – whether s 38(3) mandates a new town planning approval – whether leave should be granted

Appeal Costs Fund Act 1973 (Qld)

Commercial and Consumer Tribunal Act 2003 (Qld), s 100

Manufactured Homes (Residential Parks) Act 2003 (Qld), s 8, s 10, s 11, s 13, s 14, s 16, s 17, s 23, s 26, s 36, s 37, s 38

COUNSEL:

M Hinson SC for the appellant

A J H Morris QC, with G D Bassett, for the respondent

SOLICITORS:

Hopgood Ganim Lawyers for the appellant

Tenants' Union of Queensland Incorporated for the respondent

  1. WILLIAMS JA:  This is an application for leave to appeal from a decision of a judge of the District Court substantially dismissing an appeal from a decision of the Commercial and Consumer Tribunal dismissing an application seeking an order pursuant to s 38(1)(f) of the Manufactured Homes (Residential Parks) Act 2003 (Qld) ("the Act").  This Court has a general discretion to grant or refuse leave to appeal pursuant to s 118(3) of the District Court of Queensland Act 1967 (Qld) and it was submitted for the applicant, Haraba Pty Ltd, that leave should be granted because the issues in this case raised questions as to the proper construction of provisions of the Act which would have impact upon both the management and occupation of residential parks.  The application for leave was treated at the hearing of the appeal and in consequence it is desirable to deal with the issues raised on the merits.
  1. The applicant is the owner of the Gateway Village Resort ("the Resort") at Rochedale. It contains a mix of 93 manufactured home sites (see s 10 and s 13 of the Act), 36 holiday cabin sites, 24 caravan sites, and communal facilities.  That part of the Resort containing the 93 manufactured home sites and associated common areas is a "residential park" for purposes of the Act (s 12).  The applicant is a "park owner" as defined in s 11 of the Act and from time to time enters into a "site agreement" as defined in s 14, with a "home owner" as defined in s 8.  Such a "site agreement" must comply with Part 5 Division 1 of the Act.  Such an agreement may not contract out of the application or operation of a provision of the Act about the terms of a site agreement (s 23).  Section 26 is of significance for present purposes and it provides:

"A home owner's right under a site agreement to position a manufactured home on a site continues until the agreement is terminated."

  1. Prima facie that means that a site agreement is for an indefinite term. The argument in the present case proceeded on the basis that a site agreement had to be for an indefinite term, and could not be for a fixed term.
  1. The home owner pursuant to a site agreement obtains no interest in the land constituting the site; no capital sum is paid for the acquisition of a site. The rights conferred are contractual only; the home owner has the responsibilities set out in s 16, and the park owner has those set out in s 17.  The home owner must, of course, pay the rent and other charges payable under the site agreement. 
  1. The home owner must acquire a manufactured home to be positioned on the site, and that would be by a separate agreement to the site agreement. The home owner remains at all times the owner of the manufactured home, and retains the right to remove it upon termination of the site agreement.
  1. Termination of a site agreement is provided for by s 36, s 37 and s 38 of the Act. Section 36 provides for termination by agreement between the home owner and park owner. A park owner who coerces a home owner to enter into an agreement to terminate commits an offence against the section. Section 37 confers upon a home owner the right to terminate the site agreement by notice, in the approved form, given to the park owner. Then s 38 provides for termination of a site agreement by the Tribunal (defined in the dictionary as the Commercial and Consumer Tribunal) consequent upon an application made by the park owner. The section then specifies a number of grounds upon which the Tribunal may make such an order. It is clear that the Tribunal has a discretion whether or not to make the order even if one of the grounds was strictly made out. Grounds (a) to (e) all involve some conduct on the part of the home owner which would constitute a breach of the home owner's responsibilities set out in s 16. Then comes s 38(1)(f) which is the provision in question in this case; the Tribunal may make an order terminating the agreement on the ground that:

"the park owner wishes to use the residential park land, or a part of the park in which the site is located, for another purpose stated in the application (the stated purpose)."

Where an order is made under s 38(1)(f) the Tribunal may make a compensation order pursuant to s 40.  In the present case the applicant offered an amount by way of compensation, and the quantum of compensation was in issue before the Tribunal.

  1. Section 38(3) should also be noted; it provides that:

"An application for a termination order on the ground mentioned in subsection (1)(f) must be accompanied by a document certified by the local government for the local government area in which the residential park is situated stating it is lawful for the park land, or a part of the park in which the site is located, to be used for the stated purpose."

  1. The respondent, Dorothy Castles, is the home owner pursuant to a site agreement over site 42 in the Resort. She entered into a site agreement with the applicant on 20 March 1997; that agreement was made under the repealed Mobile Homes Act 1989 (Qld) and under the transitional provisions of the Act is deemed to be a site agreement under the Act. 
  1. Pursuant to a separate agreement on or about 28 April 1995 the respondent purchased a manufactured home for $42,000, and that manufactured home is located on site 42.
  1. On or about 17 November 2004 the respondent informed a director of the applicant that she was interested in selling her manufactured home and assigning her interest under the site agreement pursuant to Part 7 of the Act. In the month of February 2005 documents were prepared and delivered evidencing an intention on the part of the respondent to assign the site agreement to people by the name of Sergeant and also to sell to them the manufactured home.
  1. That resulted in the applicant applying to the Commercial and Consumer Tribunal on 11 March 2005 seeking termination of the site agreement pursuant to s 38(1)(f) of the Act. The basis on which that order for termination was sought was set out in an affidavit of R V Holland, a director of the applicant, filed in support of the application. Relevantly it was said therein:

"Haraba Pty Ltd has a strategic plan to expand the holiday resort component of Gateway Village Resort in parts of the park that are considered suitable for that purpose.  The primary intent of this plan is to meet the growing demand for holiday resort cabins and strengthen the profitability of the holiday resort component of the business. 

Haraba Pty Ltd has already changed the use of several manufactured home sites to holiday cabin sites in that part of the park near site 42, being sites 35, 37, 38 and 40 …

Changes to the above sites have occurred progressively since April 2002 and only at a point when the home owners on those sites indicated an intention not to continue with residency in the park, or in one case, indicated a desire to move to another site.  In each case the site agreement was terminated by mutual agreement between the home owner and park owner.

Site 42 is one of those parts of the park that is considered suitable for change from a manufactured home site to a holiday cabin site. 

In addition to being in the same street as other sites which have changed use from manufactured home sites to holiday cabin sites, site 42 is considered a suitable site for use as a holiday cabin site for the following reasons …

In implementing the plan change of use on site 42, as in the case of other sites mentioned … Haraba Pty Ltd considers that the least disruptive approach is to seek the change of use when the home owner indicates an intention not to continue with residency on their site.

Complaints are sometimes received by the park manager from home owners whose sites are close to sites occupied by holidaymakers.  Complaints … are mostly about noise or bad behaviour …

It makes sense from a park management point of view to alleviate the above types of conflicts wherever possible by separating incompatible activities.  Changing the use of site 42 to a holiday cabin site would help accomplish this."

  1. The consequence of the applicant's proposal would be that site 42 would be removed from the "residential park" whilst remaining part of the Resort and would no longer be subject to the Act.
  1. The applicant has approval in the form of a Local Government Court Order, dated 16 October 1986, permitting all of its land in question to be used for the purpose of a caravan park and caretakers flat; that entitles it to use all the land for purposes of the Resort. It is not disputed that the term "caravan park" in that approval covers the use of sites for caravans, holiday cabins and manufactured homes. The proposed change of use for site 42 from a manufactured home site to a holiday cabin site would not involve a change in the use of the land for town planning purposes.
  1. It is against that background that the matter came on for hearing before the Commercial and Consumer Tribunal on 8 September 2005. The Tribunal member delivered reasons for judgment on 11 October 2005 and relevantly ordered that the application for a termination order be dismissed.
  1. The Tribunal member in her reasons set out those passages from the evidence of Holland which indicated the applicant's desire to use the site for another purpose and the reasons therefor.  She also recorded the evidence of Holland to the effect that the applicant wished to adopt the least disruptive approach to a change of use; that is why it was considered appropriate to seek the order only after a home owner had indicated an intention to discontinue residency.
  1. The Tribunal member then dealt at length with the evidence of the respondent and the material she had placed before the Tribunal. She was a 75 year old single woman in poor health who had to move out of the park to live with her daughter because of poor health. She had no desire to terminate the site agreement but wished to sell her manufactured home and assign the site agreement to the purchaser. The Tribunal member recorded in her reasons that the respondent claimed that the applicant wanted her site for tourist accommodation but refused to purchase it from her at market value.
  1. The reasons then noted the submission made on behalf of the respondent that the word "another" in s 38(1)(f) does not mean "the same purpose as the original purpose for which approval currently exists. The section is meant to apply to the situation where a park owner has to go to a local government body for a new approval." It was noted that that was contrary to the submission made on behalf of the applicant that paragraph (f) also covered the situation where there was a change of use of a particular site from one of the approved uses in the park to another. The Tribunal member noted that the words of paragraph (f) were capable of being construed either way, and after referring to the Explanatory Notes to the Act the reasons went on:

"The Explanatory Notes make it clear in my view that an order for termination is contemplated where the purpose of the park is changed to permit redevelopment, and not where there is simply a re-arrangement of permitted uses within a mixed use park.

It is proper to ascertain the meaning of words in a particular section of an Act by having regard to the context in which the words appear.  Here sub-section 38(3) provides that an application for a termination order on the ground mentioned in sub-section 38(1)(f) must be accompanied by a document certified by the local government for the local government area in which the residential park is situated stating that it is lawful for the park land, or a part of the park in which the site is situated, to be used for the stated purpose.

There would be no sense, in my view, in requiring an application for a termination order to be accompanied by the current approval which would generally be in respect of approval of a caravan park including use of the caravan park for the siting of manufactured homes thereon.  The only purpose of section 38(3), in my view, is to ensure that a home owner is not evicted before a new lawful use is approved …

Paragraph (f) of sub-section 38(1) refers to 'residential park land, or a part of the park in which the site is located'.  The applicant's interpretation of paragraph (f) involves in my view, a straining of the meaning of 'a part of the park' to mean the subject site only.  The applicant's strategy in converting manufactured home sites to holiday cabin sites involves acquiring single sites on which manufactured homes are currently located, which sites are not necessarily contiguous with sites on which holiday cabins are currently located.  I consider that the use of the words 'part of the park' is more consistent with an interpretation which envisages a new use of one part of a park, which is larger in area than the current site, while the current use or mixed use continues in other parts of the park.

Upon consideration of the Explanatory Notes, and of the context in which paragraph (f) of sub-section 38(1) appears, I have reached the conclusion that the proper meaning of the words 'another purpose' in paragraph (f) of sub-section 38(1) is that the Tribunal may make a termination order where the park owner wishes to use the residential park for a new use which will involve redevelopment of the park, or a part of the park, and where the park owner has obtained approval from the relevant local government authority for the new use which is a different use from the current approved use."

  1. For those reasons the application was dismissed. The Tribunal also made a consequential order particulars of which are not now material.
  1. Relying on s 100 of the Commercial and Consumer Tribunal Act 2003 (Qld) the applicant sought leave to appeal to the District Court; relevantly it had to rely on the ground of "error of law" in the judgment of the Tribunal.  The learned District Court judge granted leave to appeal, allowed the appeal to the extent of deleting the consequential order made by the Tribunal, but otherwise dismissed the appeal with costs.  (It should be noted that on the application for leave to appeal to this Court each party was in agreement that it was appropriate for the District Court judge to delete the consequential order, and in consequence it is not necessary to consider the implications of that order initially made by the Tribunal.)
  1. 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.
  1. Towards the end of his reasons, the learned District Court judge said that a number of findings were "open" and he then proceeded to list them. Though the learned judge used the term "open" I will proceed on the basis that the findings stated in the ensuing paragraphs were in fact made by him; otherwise there is no real basis for his decision.
  1. The District Court judge said that "given the substantive grounds for finding a termination under s 38(1)(a) to (e), it should not be open to the appellant to subscribe a potential use to site 42 in an arbitrary or whimsical fashion thereby depriving her of her rights to assign her interest." It appears that the District Court judge concluded that the applicant was acting in an "arbitrary or whimsical fashion" in putting forward its proposal for a change of use of part of the park. No reasons were given for making that finding and no such finding was made by the Tribunal member. Reasons were advanced on behalf of the applicant for the proposed change in use of part of the park and regardless of whether or not those reasons were held to be good grounds for terminating the site agreement, they cannot, in my view, be described as "arbitrary or whimsical". That is particularly so when one has regard to the fact that a home owner does not have any interest in the site other than a contractual right to place a manufactured home on it subject to complying with the obligations imposed on the home owner by the site agreement.
  1. Critically, the learned District Court judge agreed with the Tribunal member that "another purpose" had to be some purpose other than one permitted by the current town planning approval. He specifically held that a change in user of the site within the existing local government approval would not be "another purpose" for purposes of s 38(1)(f).
  1. On the hearing of the application for leave to appeal to this Court, it was submitted on behalf of the applicant (as it was in the proceedings below) that a particular site (in this instance, site 42) was a "part of the park" for purposes of the section in question. It was submitted that both the Tribunal member and the District Court judge erred in holding to the contrary.
  1. Section 38(1)(f) speaks of "a part of the park in which the site is located" and that to my mind indicates that something more than one particular site is required to constitute "part of the park". For purposes of the section, each site cannot be said to be a relevant part of the park. That submission made by senior counsel for the applicant must be rejected.
  1. The decision of the Tribunal member and the District Court judge, and perhaps the ultimate submissions of the legal representatives, concentrated on site 42 as being the relevant part of the park. But the material placed before the Tribunal, particularly in the affidavit of Holland, is arguably capable of supporting a finding that the applicant intends using a defined part of the park (containing a number of sites) for another purpose, namely holiday cabins, but given the policy and philosophy underlying the legislation only intends to implement that proposal upon a site by site basis when a home owner indicates an intention to no longer exercise the contractual rights conferred by the site agreement. If a finding was made that the "park owner" intended to use a defined "part of the park" for such other purpose and was implementing that intention by seeking to terminate a particular site agreement pursuant to s 38(1)(f) then there would be a basis on which the Tribunal could, in the exercise of its discretion, terminate the site agreement.
  1. In my view, there is no reason for concluding that "another purpose" does not include a purpose which involved removing a site from the "residential park" and thereafter using it for a purpose covered by the existing town planning approval for the land in question. Section 38(3) does not mandate that there must be some new town planning approval. In many instances where there was a change of use that would be required and in those circumstances s 38(3) mandates that the new approval must accompany the application. But where the proposed new use is covered by the existing approval there is no reason why the existing approval cannot accompany the application. The Explanatory Notes referred to by both the Tribunal member and the District Court judge are broad enough to cover both scenarios.
  1. In my view both the Tribunal member and the District Court judge erred in concluding that for there to be "another purpose" the proposal had to involve using the land for a purpose which required some new town planning approval.
  1. As neither the Tribunal member nor the District Court judge approached the matter on the basis I have indicated, there is no alternative but to send the matter back to the Tribunal for further hearing.
  1. On that hearing it would be for the Tribunal to make findings of fact as to whether or not the park owner wished to use "part of the park" in which site 42 was located for another purpose, namely holiday cabins. If such a finding was made the intended use would be for "another purpose" notwithstanding that the intended use was within the existing town planning approval. If that finding was made it would then be for the Tribunal to determine whether or not, in the exercise of its discretion, an order terminating the site agreement should be made. If an order terminating the site agreement was made the Tribunal would have to go on and consider the question of compensation under s 40.
  1. In the circumstances the orders of the Court should be:
  1. Grant leave to appeal;
  1. Allow the appeal and set aside the orders of the Tribunal that the application be dismissed and of the District Court that the appeal to that court be dismissed;
  1. Remit the matter to the Commercial and Consumer Tribunal for the application to be heard and determined according to law;
  1. Set aside the order of the District Court that the applicant pay the respondent's costs of the application and appeal to that court;
  1. Order that the respondent pay the applicant's costs of the application and appeal to the District Court and of the application and appeal to this Court to be assessed;
  1. Grant the respondent an indemnity certificate pursuant to the Appeal Costs Fund Act 1973 (Qld) with respect to the costs ordered to be paid to the applicant.
  1. HOLMES JA:  I have read the judgment of Williams JA.  I agree with his reasons and the orders proposed.
  1. PHILIPPIDES J:  I have read and agree with Williams JA’s reasons for judgment and the orders proposed.

 

 

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Editorial Notes

  • Published Case Name:

    Haraba P/L v Castles

  • Shortened Case Name:

    Haraba Pty Ltd v Castles

  • Reported Citation:

    [2008] 1 Qd R 151

  • MNC:

    [2007] QCA 206

  • Court:

    QCA

  • Judge(s):

    Williams JA, Holmes JA, Philippides J

  • Date:

    22 Jun 2007

Litigation History

Event Citation or File Date Notes
Primary Judgment [2006] QDC 388 17 Nov 2006 Allowing appeal in part from decision of Commercial and Consumer Tribunal; appellant failed to show that the Tribunal member erred in finding that the application be dismissed; it was not established that it is entitled to termination of the Site Agreement based upon s 38(1)(f) Manufactured Homes (Residential Parks) Act: Forde DCJ.
Appeal Determined (QCA) [2007] QCA 206 [2008] 1 Qd R 151 22 Jun 2007 Application for leave to appeal granted and appeal allowed remitting the matter back to Commercial and Consumer Tribunal; both the Tribunal member and the District Court judge erred in concluding that for there to be "another purpose" in s 38(1)(f) of the Manufactured Homes (Residential Parks) Act the proposal had to involve using the land for a purpose which required some new town planning approval: Williams and Holmes JJA and Philippides J.

Appeal Status

{solid} Appeal Determined (QCA)