Queensland Judgments
Authorised Reports & Unreported Judgments
  • sclq logo
  1. Caselaw
  2. QCAT
  3. 2023
  4. Leonard v INA Operations Pty Ltd - [2023] QCAT 128

Authorised Reports & Unreported Judgments
Exit Distraction Free Reading Mode
  • Unreported Judgment

Leonard v INA Operations Pty Ltd[2023] QCAT 128

Leonard v INA Operations Pty Ltd[2023] QCAT 128

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Leonard & ors v INA Operations Pty Ltd [2023] QCAT 128

PARTIES:

KAREN FAY LEONARD AND OTHER

(applicant)

v

INA OPERATIONS PTY LTD ACN 159 195 632 ATF

INA OPERATIONS TRUST NO 3 INGENIA

COMMUNITIES

(respondent)

APPLICATION NO/S:

OCL 021-21

MATTER TYPE:

Other civil dispute matters

DELIVERED ON:

3 April 2023

HEARING DATE:

15 August 2022

HEARD AT:

Brisbane

DECISION OF:

Member Holzberger

ORDERS:

  1. The application filed on 18 March 2021 is dismissed.

CATCHWORDS:

MANUFACTURED HOMES – market rent review – where the valuation on which market review was based is challenged – where independence of the review is challenged

Manufactured homes (Residential Parks) Act 2003 s 69, 70

APPEARANCES &

REPRESENTATION:

Applicant:

Karen Fay Leonard

Respondent:

Stuart Fallis, Operations Manager

REASONS FOR DECISION

  1. [1]
    INA operations Pty Ltd (INA) owns and operates a manufactured home residential park at 41 Radke Road, Bethania under the name Ingenia Bethania (the park) which at all times relevant to these proceedings park contained 154 homes.
  2. [2]
    On 3 January 2020 INA issued 255 homeowners notices of site fee increase by market rent review brackets the (notices) pursuant to section 69A Manufactured Homes (Residential Parks) Act 2003 (the Act) and the terms of the respective site agreements.
  3. [3]
    Each notice was accompanied by a copy of a Site Rental Assessment Report (the Report) prepared on 28 November 2019 by Jason Cleary, a certified practicing valuer then employed by Heron Todd White (HTW)
  4. [4]
    Rental rates within the park prior to the market review ranged between $140 to $179 per week, the current site rent for new residents being $179.
  5. [5]
    The report assessed market rent at:

“Site rentals where the site rental includes mowing the front lawn. The site rental does not include charges for water, sewerage, electricity, gas, telephone and gardening. Water usage is re-charged to the tenant on a monthly basis.

$170 per week

Site rentals where the rate includes mowing and water charges (up to a limit recommended by the local authority) but does not include charges for electricity, gas, telephone or gardening. Water consumption in excess of the recommended amount will be charged to the homeowner at the rate charged by the local authority.

$165 per site per week[1]”

  1. [6]
    On 18 March 2021 Karen Leonard filed an application in the tribunal on behalf of the owners of 45 of the homes their names being listed in an attachment to the application.
  2. [7]
    In the application she asks for the following:
    1. (a)
      the market rent review be set aside pursuant to section 70 (4)(b) of the act;
    2. (b)
      in the alternative the increase be limited to a CPI increase pursuant to section 70 (4)(a) of the act;
    3. (c)
      in all future market reviews INA provide evidence related to the relevant factors listed in section 70 (5); and
    4. (d)
      any other orders are tribunal considers relevant.
  3. [8]
    On 9 September 2021 Ms Leonard filed her evidence marked as annexures A to W which included four affidavits by Hubert van Hoof and four affidavits by her and various other materials.
  4. [9]
    On 5 January 2022 she filed further evidence marked as annexures A-I and a document prepared by Mr Van Hoof titled “Evidence by professional expert Hubert Van Hoof” with responses to INA's evidence in response to the application.
  5. [10]
    On 16 July 2022 INA filed a document titled response submission with annexures A-K which included Mr Cleary's report and a peer review of the report prepared by Magann O'Rourke Loader. On 5 April INA filed further materials including an affidavit by its investment manager Nicola Du. On 31 January 2022 INA filed response submissions to Ms Leonard's material and further documents.
  6. [11]
    Ms Leonard represented the applicants at the hearing. INA were represented by Stuart Fallis its operations manager.

The Report

  1. [12]
    Ms Leonard challenges the independence of the report and the peer review by Magen O'Rourke Loader as well as its contents and conclusions.
  2. [13]
    In paragraph 1.3 Mr Cleary discloses that HTW “undertakes valuations and provides other general property advice services to [INA] on a number of their properties within the portfolio.”
  3. [14]
    It is Ms Du's evidence that it is part of her duties to recommend a valuer from the panel (usually of four or five valuers) approved by the group's banking syndicate to INA's CFO.
  4. [15]
    She selected HTW because they had not been involved in an earlier valuation for financial reporting and mortgage services, had previously demonstrated a “robust knowledge” of the market review process and had the capacity to undertake the work at a difficult time of the year. She also recommended Magen O'Rourke Loader to undertake the peer review.
  5. [16]
    She is not aware of any conflicts of interest between her, INA, HTW and Magen O'Rourke loader.
  6. [17]
    It seems reasonable if not inevitable in a very specialised area that an owner operator will have more than one dealing with its consultants. I'm not persuaded in the absence of evidence to the contrary that the previous dealing alone is sufficient to call the independence of the expert into question.
  7. [18]
    Ms Leonard also takes issue with the reporting so far that it does not relate its content to the factors listed in the various subsections of section 70 (3).
  8. [19]
    While section 70 (3) provides a non-comprehensive list of factors relevant to the determination of a market rent it does not expressly or impliedly impose on a valuer a template for valuer's report.
  9. [20]
    If it is evident from the report that a valuer has not considered a factor which ought to have been considered that will go to the weight the tribunal gives to the report.
  10. [21]
    I am satisfied that Mr Cleary's qualifications and experience qualify him as an expert in this field. The peer review by Magen O'Rourke Loader is a desktop review but it does corroborate at least Mr Cleary's methodology and generally supports this conclusion.
  11. [22]
    Mr Cleary lists the factors he has taken into account including the location size and nature of the park, its age and amenity and the quality and extent of the of the community facilities and in particular the current state of the Bowling Green. It then compares them to 6 other parks which he says are comparable and which are rated as being superior, inferior or similar.
  12. [23]
    Ms Leonard is critical of the selection of the comparators and Mr Cleary's assessment of them compared to the park.
  13. [24]
    In this regard she relies largely on the evidence of Mr Van Hoof and in particular his “evidence by professional expert" report.
  14. [25]
    Mr Fallis says that Mr Van Hoof, an architect by profession, is not an expert valuer nor is he independent
  15. [26]
    Both are true. The tribunal however is not bound by the rules of evidence. Mr Van Hoof is qualified in my view to make observations about the physical characteristics of the various parks considered and he is entitled to express his opinion about the superiority or inferiority of them.
  16. [27]
    In carrying out such a comparison however there is there is bound to be some disagreement as to the comparative quality of the park.
  17. [28]
    While I will allow Mr Van Hoof's evidence there is a limit to the weight I can attach to it. As I have said he is qualified to make observations but what is not qualified to do is to take the next step and determine market rental.
  18. [29]
    Ms Leonard submits that INA has failed to adequately maintain certain parts of the park including a lake or dam and claims rental relief in respect of the Bowling Green while it was under repair.
  19. [30]
    The evidence does not in my view establish any breach of the various site agreements or the Act. In the general maintenance of the park residents will no doubt be inconvenienced. I'm not satisfied that such an inconvenience has been unreasonable and is capable of quantification as a rental reduction.
  20. [31]
    While I accept that the substantial cost of obtaining her own independent expert report was prohibitive in all circumstances it was in my view necessary to establish an error in Mr Cleary's conclusion.
  21. [32]
    It is noted that Mr Cleary's evidence was not challenged in cross-examination by Ms Leonard. I also note that Mr Cleary is evidence is that thirty residents entered the park during 2019. Twenty-six of those new residents entered into agreements at $169 per week and two new residents entered into agreements of $179 per week. That evidence is not contested by Ms Leonard. It is in my view evidence of rent between a willing lessor and willing lessee in an arms length transaction and supports the valuation Mr Cleary has made.
  22. [33]
    The tribunal accepts the contents of the Mr Cleary’s report and finds that the market review increase is in all circumstances fair and reasonable.

Footnotes

[1] Site rental assessment report para 8.

Close

Editorial Notes

  • Published Case Name:

    Leonard & Ors v INA Operations Pty Ltd

  • Shortened Case Name:

    Leonard v INA Operations Pty Ltd

  • MNC:

    [2023] QCAT 128

  • Court:

    QCAT

  • Judge(s):

    Member Holzberger

  • Date:

    03 Apr 2023

Appeal Status

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

Cases Cited

No judgments cited by this judgment.

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

Require Technical Assistance?

Message sent!

Thanks for reaching out! Someone from our team will get back to you soon.

Message not sent!

Something went wrong. Please try again.