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Scouller v Stockland Property Services Pty Ltd[2018] QCAT 308

Scouller v Stockland Property Services Pty Ltd[2018] QCAT 308

QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL

CITATION:

Scouller v Stockland Property Services Pty Ltd [2018] QCAT 308

PARTIES:

JOHN LESLIE SCOULLER

(applicant)

 

v

 

STOCKLAND PROPERTY SERVICES PTY LTD

(respondent)

APPLICATION NO/S:

OCL079-17

MATTER TYPE:

Other civil dispute matters

DELIVERED ON:

11 September 2018

HEARING DATE:

On the papers

HEARD AT:

Brisbane 

DECISION OF:

Member Kanowski

ORDER:

Stockland Property Services Pty Ltd must, with effect from 21 September 2018, cease invoicing residents of Fig Tree Village for the cost of the services of Network Energy Services for meter reading, invoice preparation and associated tasks, other than as part of a general services charge.

CATCHWORDS:

REAL PROPERTY – RETIREMENT VILLAGES – whether electricity and water meter reading is a general service – whether a charge is adequately disclosed in the Public Information Document

Retirement Villages Act 1999 (Qld), s 76, s 102A, s 106

Nielsen v Runaway Bay Village Pty Ltd [2011] QCAT 658, applied

Nolan v Kawana Island Retirement Village Pty Ltd [2009] QCCTRV 6, applied

Scouller and Anor v Stockland Property Services Pty Ltd [2017] QCAT 347, considered

REPRESENTATION:

 

Applicant:

Self-represented

Respondent:

Minter Ellison

APPEARANCES:

 

This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld).

REASONS FOR DECISION

Introduction

  1. [1]
    This case is about certain costs associated with the supply of electricity and water to residents of a retirement village, Fig Tree Village, run by Stockland Property Services Pty Ltd (‘Stockland’). The costs in question were said to total $23,573 for 2017/2018. I do not have the anticipated 2018/2019 figure. It is convenient to refer to the costs as the Network Energy Services costs. They are for services carried out by a firm called Network Energy Services in reading the electricity and water meters, preparing invoices for residents for their electricity and water consumption, collecting the amounts charged, and so on.
  2. [2]
    The parties to the case are Mr Scouller, a resident of the village, and Stockland.
  3. [3]
    The services in question are provided under a contract between Stockland and Network Energy Services.
  4. [4]
    It is undisputed that in the 2016/2017 year, Stockland anticipated that the Network Energy Services costs would be $23,196. Stockland made provision for this anticipated expenditure in its general services budget. Half of the anticipated cost was included in the estimated expenditure of $129,000 shown for ‘Water Rates/Charges’, while the other half was included in the estimated expenditure of $80,600 for ‘Electricity’.
  5. [5]
    The affairs of retirement villages such as Fig Tree Village are regulated under the Retirement Villages Act 1999 (Qld) (‘the Retirement Villages Act’). In a retirement village, the cost of providing ‘general services’ is to be recouped by the village operator from residents through the general services charge.
  6. [6]
    In Fig Tree Village literature, the general services charge is referred to as the ‘Residence Charge’.
  7. [7]
    Effectively, then, in Fig Tree Village in 2016/2017, residents met the costs of the Network Energy Services costs, along with numerous other operating costs, through their Residence Charges.
  8. [8]
    It appears that those figures of $129,000 for water and $80,600 for electricity were estimated total expenditures for the village, for both use by residents in their villas and use by the village in common areas. It seems, though, that residents were billed for consumption of electricity and water in their villas by way of utilities invoices, based on metered usage, rather than through the Residence Charges.
  9. [9]
    Stockland’s treatment of the Network Energy Services costs in the 2016/2017 Fig Tree Village general services budget, and some other aspects of that budget, were considered by QCAT in a previous proceeding.[1] In that proceeding Mr Scouller argued that the Network Energy Services costs should have been shown as a separate item in the budget, but QCAT was not persuaded that this was necessary.
  10. [10]
    The present proceeding relates to a change introduced with the 2017/2018 budget. In that budget Stockland adopted a quite different way of dealing with electricity and water costs. It removed the estimated cost of electricity and water to be used by residents in their villas, leaving only estimates for use in common areas.
  11. [11]
    Further, and of significance to this proceeding, Stockland removed the anticipated Network Energy Services costs expenditure from the general services budget. Instead, Stockland decided, it would bill the residents for the cost via their electricity and water invoices (‘utilities invoices’). It is this change which Mr Scouller challenges in the current proceeding.
  12. [12]
    Mr Scouller’s concerns revolve around the fact that the Retirement Villages Act places controls on general services charges. Broadly speaking, an increase in a general services charge by more than the consumer price index increase is permitted only in restricted circumstances, for example where there has been approval by special resolution at a residents’ meeting.[2] Further, a village operator is obliged, before increasing the charge for a particular general service, to ‘consider whether there is a more cost-effective alternative to the general service’.[3] Mr Scouller is therefore concerned that safeguards will be lost by Stockland reclassifying the Network Energy Services costs such that they are no longer part of general services costs.
  13. [13]
    Stockland, in response, says that it reviewed its practices in light of the previous QCAT proceeding, and other developments, and decided to adopt the new approach. Stockland contends that the new approach is appropriate. Stockland submits that the Network Energy Services costs charge is not a general services charge, and so the costs and their recoupment have no place in the general services budget.
  14. [14]
    I have not seen the 2018/2019 budget but presumably the approach adopted in 2017/2018 has been continued.

The arrangements in Fig Tree Village

  1. [15]
    There are 187 villas in Fig Tree Village. Each resident signs a long-term lease with Stockland, which entitles the resident to occupy his or her villa. Rent is only $1 per year, as the mechanism for recouping the operating costs is not rent but the Residence Charge levied on residents. As mentioned earlier, the Residence Charge is the ‘general services’ charge.
  2. [16]
    According to the village’s Public Information Document, the village offers no ‘personal services’.
  3. [17]
    The documents filed by the parties indicate that Stockland obtains the electricity used in the village, in both common areas and villas, from a supplier. There is a ‘parent meter’. Stockland on-supplies electricity to residents, with their consumption monitored through individual meters. A similar system operates, I gather, for water.
  4. [18]
    Stockland advises that midway through the 2017/2018 year ‘residents became able to procure electricity from third party suppliers’.[4] Apparently it had become mandatory under national energy rules to ensure that all consumers can choose their supplier. Residents choosing a third party supplier would have to arrange for connection and for a ‘smart meter’ (which can be read remotely) to be installed in their villa. However, Stockland advises, residents in fact do not exercise their right to procure electricity from third party suppliers ‘because the Village supplies electricity at a much lower cost than market suppliers because it generates no profit from supply’.[5]

Public Information Documents

  1. [19]
    One of the objects of the Retirement Villages Act is to ‘promote consumer protection and fair trading practices’ in retirement villages, by facilitating the disclosure of information to prospective residents to ensure that ‘the rights and obligations of the residents and scheme operator may be easily understood’.[6]
  2. [20]
    Every retirement village is required to have a Public Information Document, and to provide a copy to prospective residents.[7] The Public Information Document is to include information about ‘the nature of the amounts a resident may be required to pay …’.[8] The Public Information Document forms part of each resident’s ‘residence contract’.[9]
  3. [21]
    The Public Information Document for Fig Tree Village is dated 20 July 2009. It runs to some 51 pages. Additionally, there are six attachments including the standard lease which residents sign.

The utilities invoices

  1. [22]
    Network Energy Services prepares the utilities invoices that are issued in the name of Fig Tree Village to residents. It appears that invoices are issued approximately every two months. Each invoice details the charged amount for ‘Electricity Usage’ by the resident for the relevant period, based on the number of kilowatt hours of electricity used in the resident’s villa. Similarly, each invoice details the charged amount for ‘Water Usage’ based on the number of kilolitres of water used in the villa. There is then an ‘Electricity Supply’ charged amount, calculated on a daily rate. This is, at least partly, for the Network Energy Services costs. ‘Electricity Supply’ seems to be something of a misnomer given that the charge relates also to water supply: part of the fee paid to Network Energy Services is for reading the water meters and invoicing for water consumption.
  2. [23]
    Mr Scouller says that while the supply charge originally was calculated to recoup the amount of $23,573 mentioned in paragraph 1 above, at some point Stockland added 16 cents per day to the supply charge for additional electricity charges not allowed for in the 2017/2018 budget.[10] He says that he will address this ‘when the decision is known on the current dispute’.[11] Accordingly, I have not dealt with that alleged increase.

What charges are permitted under the Retirement Villages Act?

  1. [24]
    The Retirement Villages Act provides for charges for general services and for personal services. ‘General services’ and ‘personal services’ are defined in the ‘Dictionary’ Schedule to the Retirement Villages Act. General services are ‘services supplied, or made available, to all residents of a retirement village’. Examples given in the definition are management and administration, gardening and general maintenance, a shop or other facility for supplying goods to residents, and a service or facility for the recreation or entertainment of residents. Personal services are ‘optional services supplied or made available for the benefit, care or enjoyment of a resident …’. Examples given in the definition are laundry, meals and cleaning the resident’s accommodation unit.
  2. [25]
    A difficulty in distinguishing the two types arises because both definitions use the expression ‘supplied or made available’, which might suggest that both types are optional. A resident might, for example, opt out of using a service that is made available to all residents.
  3. [26]
    In my view, the intended distinction is as follows. A general service is one routinely provided to all residents even though some residents might choose not to use it. A personal service, on the other hand, is one provided only upon request.
  4. [27]
    There are two previous cases which have examined whether it is open to a retirement village to impose a ‘third category’ of charge for a service that is neither a ‘general service’ nor a ‘personal service’. It was decided in those cases that a third category of charge can be imposed, despite not being provided for in the Retirement Villages Act.
  5. [28]
    In Nolan v Kawana Island Retirement Village Pty Ltd,[12] the Queensland Commercial and Consumer Tribunal considered a case where a retirement village included both apartment buildings and villas. There were communal hot water systems in the apartment buildings, and individual hot water systems in the villas. The third category charge that was challenged by an apartment resident was a charge levied by invoice on apartment residents, and not on villa residents, for the cost of providing the communal hot water to the apartments. The Tribunal found that this would have been a contractually-binding charge had it been properly disclosed in the village’s Public Information Document. 
  6. [29]
    In Nielsen v Runaway Bay Village Pty Ltd,[13] QCAT upheld a ‘serviced apartment fee’ for infrastructure and similar costs relating to the serviced apartments. The fee was levied only on the residents who lived in serviced apartments, and not on the residents who lived in independent living units. Additional ‘personal services’ fees were imposed for the use of particular services in the serviced apartments. QCAT considered that the serviced apartment fee had been adequately disclosed in the Public Information Document.
  7. [30]
    Neither party in the present case has argued against the proposition that third category charges can be levied (at least in some circumstances). Indeed, there is no challenge to the practice of Fig Tree Village charging residents by way of the utilities invoices for metered electricity and water consumption (as distinct from the Network Energy Services cost), and such a charge is an instance of a third category charge. I will proceed on the basis that third category charges are permissible. However, as stressed in both of the cases discussed above, a third category charge must, to be contractually enforceable, be properly disclosed in the retirement village’s Public Information Document.

Is the charge in question a third category charge disclosed in the Public Information Document?

  1. [31]
    Stockland submits, in effect, that the charge for the Network Energy Services costs, by way of the supply charge in a utilities invoice issued to a resident, is a ‘third category charge’, and that it is disclosed in the Public Information Document.
  2. [32]
    Stockland relies on the ‘Other Fees’ part of the Public Information Document which includes:[14]

Rates and charges separately metered for the accommodation unit and any unusual rates, taxes or charges for the accommodation unit, refer clause 6.2 and clause 7.1 & 7.3 of Schedule 2 of the Lease.

  1. [33]
    Firstly, Stockland argues that the charge in question is part of the charges separately metered for the accommodation unit. Stockland submits that the cost of meter reading is merely an incidental part of providing a metered service. Stockland relies on comments made by QCAT in the previous proceeding:[15]

… meter reading is not an end in itself and should not be regarded [as] a separate general service. The cost of the meter reading is part of the cost of providing the metered service.

  1. [34]
    I note that the comments were made in a discussion of whether the meter reading costs should be separately itemised in the general services budget, rather than simply being unitemised components of ‘Water Rates/Charges’ and ‘Electricity’ figures. The comments did not address the question of whether the meter reading cost was other than a general services cost, as that issue was not raised.
  2. [35]
    The amounts of electricity and water supplied to a villa are metered, but the reading of meters is not itself a metered service. The cost comes not from a meter but from price negotiations between Stockland and its chosen service provider. In my view, therefore, the charge for the Network Energy Services costs clearly does not come within the category of ‘charges separately metered’ for the accommodation unit.
  3. [36]
    Alternatively, Stockland argues that the charge is an ‘unusual charge’: it differs from the usual practice in the community where there is no separate charge on bills for meter reading and billing. Stockland submits:[16]

Placed in the context of a prospective resident entering into a retirement village and not having any experience with a retirement village …, a charge from a village operator for reading a water or electricity meter is highly unusual.

  1. [37]
    I agree that it would be an unanticipated cost. That being so, one would expect an explicit description of the charge in the Public Information Document before it could be said that there was adequate disclosure of ‘the nature of the amounts a resident may be required to pay’.[17] A mere reference to ‘unusual’ charges would leave prospective residents quite uninformed about a meter reading fee. The clauses in the lease referred to in the ‘Other Fees’ section of the Public Information Document are no more illuminating. They give no hint that a meter reading fee will be charged.
  2. [38]
    It is not obvious what is meant by ‘unusual charges’, but presumably the expression might cover, for instance, some charge levied on a particular unit by a third party for some peculiar reason. Perhaps a statutory charge under a pension loan scheme might be an example.
  3. [39]
    I am not satisfied that the charge for the Network Energy Services costs is a charge disclosed in the Public Information Document. In other words, the charge is not a permissible ‘third category’ charge of the type upheld in Nielsen v Runaway Bay Village Pty Ltd.[18]
  4. [40]
    Accordingly, there is no contractual obligation on a resident to pay the ‘Electricity Supply’ charge that appears in their utilities invoices for the Network Energy Services costs.

Is the charge in question a charge for a general service or a personal service?

  1. [41]
    Neither party contends that the Network Energy Services service is a ‘personal service’. I consider that it is not a personal service.
  2. [42]
    Mr Scouller contends that the service is a general service. Stockland contends that it is not, on the basis that the service in question is the reading of Mr Scouller’s meter, not the reading of all meters in the village.[19] Further, Stockland submits that the examples of general services given in the definition in the Retirement Villages Act are services that cannot be separated or attributed to any particular resident.[20]
  3. [43]
    I do not accept Stockland’s submissions on this point. Mr Scouller has not engaged Network Energy Services to read his meters. Nor has Stockland engaged Network Energy Services to read Mr Scouller’s meters in particular. Stockland has engaged Network Energy Services to read all the meters in the village, to prepare all the bills, and so on.
  4. [44]
    It is possible, of course, to fairly apportion the cost of Network Energy Services’ fee amongst the residents by dividing the total fee by 187, but that is equally possible for ‘management and administration’ and the other examples given in the definition in the Retirement Villages Act.
  5. [45]
    It is also worth noting that in a letter sent by Stockland to residents on 14 June 2017 about the 2017/2018 budget, Stockland said that the ‘Daily Supply Charge’ covers the costs of providing a legal bill, reading meters, managing the parent meter bills, and managing resident payments:

… by the provision of multiple payment methods, hardship provisions and delivery of reconciled bi-monthly reports including pass-back of any surplus funds to FTV.

  1. [46]
    It can be seen, then, that some of the tasks performed by Network Energy Services relate to village-wide matters rather than individual metering and bill preparation. Overall, Network Energy Services is providing a service for Stockland to assist it in recouping costs from residents and to manage other aspects of Stockland’s utility supply functions.
  2. [47]
    Stockland argues that classifying the Network Energy Services costs as a general service would have an undesirable outcome. If any residents opted out of the current electricity arrangement, and started purchasing electricity from outside suppliers, those residents would be forced to contribute, through their Residence Charge, to the cost of meter reading for residents who have not opted out. I accept that this would be undesirable, but it appears highly unlikely to eventuate. Opting out is not financially attractive. 
  3. [48]
    Classifying the Network Energy Services costs as other than general costs also could have undesirable outcomes, as outlined in paragraph 12 above.
  4. [49]
    Ultimately, though, the question turns on whether the service provided by Network Energy Services is a general service as defined in the Retirement Villages Act. I accept Mr Scouller’s submission that the service is a general service. It is made available to all residents. The anticipated cost of that service should have been shown in the 2017/2018 general services budget, and the cost recouped (to the extent permissible) through the general services charge which, as mentioned earlier, is called the Residence Charge at Fig Tree Village.

What orders should QCAT make?

  1. [50]
    Section 102A of the Retirement Villages Act requires a village operator to adopt a budget for each financial year for charges for general services. Mr Scouller submits that Stockland breached that section in that it failed to provide in the 2017/2018 budget for the Network Energy Services costs.
  2. [51]
    Mr Scouller seeks orders to the effect that the Network Energy Services costs be ‘returned’ to the 2017/2018 general services budget, and that residents be given the opportunity to vote on whether, by special resolution, they approve budget increases which would then be pushed above the consumer price index cap. Mr Scouller also asks for a ruling ‘that no other service cost, incurred in the operations of the village, be charged as a daily rate charge on residents’ usage accounts’.[21]
  3. [52]
    QCAT can make the orders it considers to be just to resolve a dispute.[22]
  4. [53]
    Mr Scouller has been disputing the matter for quite some time. Presumably he put his point of view to Stockland soon after it provided the 2017/2018 budget. He then applied to QCAT for mediation in October 2017. After mediation was unsuccessful, he applied to QCAT, in December 2017, for the present hearing. I have accepted his argument that Stockland should not have shifted the Network Energy Services costs out of the general services budget.
  5. [54]
    Despite all that, I do not believe it would be just to make orders that operate retrospectively. While Mr Scouller has raised a matter of important principle which may be significant in the long term, the short-term financial implications are not large, especially as costs are split amongst 187 villas. If I were to order that the money collected under the supply charges in the utilities invoices be refunded, the 2017/2018 and 2018/2019 budgets be rewritten and voted upon, and the Residence Charges for 2017/2018 recalculated, a substantial administrative task would be imposed on Stockland for relatively little gain to residents. It would probably be a somewhat confusing exercise for the residents of the other 186 villas who have not challenged the change in practice, and may cause them anxiety as to what the final net result might be.
  6. [55]
    In my view the better course would be to leave alone the situation up to this point, but to require a change from now on (allowing a week or so for Stockland to digest and implement the decision). I consider it just to make an order that Stockland cease invoicing residents for the Network Energy Services costs, except as part of a general services charge.
  7. [56]
    Whether it is permissible for Stockland to recalculate the 2018/2019 Residence Charge now, part-way through a financial year, in order to collect an increased charge for the balance of this financial year, is not a topic addressed in the submissions. I express no view on it. If Stockland is not at liberty to do so, or chooses not to do so, it will have to bear the cost for the time being. In that event, Stockland can next address the matter in its 2019/2020 budget.
  8. [57]
    Finally, I do not consider it appropriate, in anticipation of future problems that might or might not arise, to make a general preventative order, as requested by Mr Scouller, ‘that no other service cost, incurred in the operations of the village, be charged as a daily rate charge on residents’ usage accounts’.[23]  

Conclusion

  1. [58]
    I have accepted Mr Scouller’s argument that the change introduced by Stockland in the 2017/2018 budget, about how the Network Energy Services costs are to be met, does not meet the requirements of the Retirement Villages Act. I consider that the matter should be corrected, but only prospectively.

Footnotes

[1] Scouller and Anor v Stockland Property Services Pty Ltd [2017] QCAT 347; [2017] QCAT 445.

[2] Retirement Villages Act, s 106.

[3] Ibid s 107A.

[4] Respondent’s submissions at paragraph 21.

[5] Ibid.

[6] Retirement Villages Act, s 3(1)(a)(ii).

[7] Ibid s 44, s 84.

[8] Ibid s 76(a).

[9] Ibid s 37(1).

[10] Mr Scouller’s submission dated 23 April 2018 at paragraph 6.

[11] Ibid.

[12] [2009] QCCTRV 6.

[13] [2011] QCAT 658.

[14] At page 35 of the Public Information Document.

[15] Scouller and Anor v Stockland Property Services Pty Ltd [2017] QCAT 347, [47].

[16] Respondent’s submission at paragraph 33.

[17] Retirement Villages Act, s 76(a).

[18] [2011] QCAT 658.

[19] Respondent’s submission at paragraph 14.

[20] Ibid.

[21] Mr Scouller’s submission dated 18 July 2018 at paragraph 34.

[22] Retirement Villages Act, s 191(1).

[23] See paragraph 51 above.

Close

Editorial Notes

  • Published Case Name:

    Scouller v Stockland Property Services Pty Ltd

  • Shortened Case Name:

    Scouller v Stockland Property Services Pty Ltd

  • MNC:

    [2018] QCAT 308

  • Court:

    QCAT

  • Judge(s):

    Member Kanowski

  • Date:

    11 Sep 2018

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Nielsen v Runaway Bay Village Pty Ltd [2011] QCAT 658
3 citations
Jump To
Cite 1 - [2011] QCAT 658
Cite 2 - [2011] QCAT 658
Cite 3 - [2011] QCAT 658
Nolan v Kawana Island Retirement Village Pty Ltd [2009] QCCTRV 6
2 citations
Jump To
Cite 1 - [2009] QCCTRV 6
Cite 2 - [2009] QCCTRV 6
Scouller v Stockland Property Services Pty Ltd [2017] QCAT 347
3 citations
Jump To
Cite 1 - [2017] QCAT 347
Cite 2 - [2017] QCAT 347
Cite 3 - [2017] QCAT 347
Scouller v Stockland Property Services Pty Ltd [2017] QCAT 445
1 citation
Jump To
Cite 1 - [2017] QCAT 445

Cases Citing

Case NameFull CitationFrequency
Stockland Property Services Pty Ltd v Scouller [2019] QCATA 11714 citations
1

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