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  4. Roth v Redland Park Operations Pty Ltd - [2023] QCAT 199

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Roth v Redland Park Operations Pty Ltd[2023] QCAT 199

Roth v Redland Park Operations Pty Ltd[2023] QCAT 199

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Roth & Anor v Redland Park Operations Pty Ltd [2023] QCAT 199

PARTIES:

MANFRED ROTH and TERESE ROTH

(applicants)

v

REDLAND PARK OPERATIONS PTY LTD

(respondent)

APPLICATION NO:

OCL 097-21

MATTER TYPE:

Other civil dispute matters

DELIVERED ON:

6 June 2023

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Member Scott-Mackenzie

ORDERS:

The proceeding is dismissed.

CATCHWORDS:

REAL PROPERTY – MANUFACTURED HOMES – SITE AGREEMENT DISPUTE – market review of site rent – whether site agreement permits market review of site rent – whether site agreement excludes market review of site rent – whether site agreement states when site rent may be varied

Manufactured Homes (Residential Parks) Act 2003 (Qld), s 4(1), s 14A, s 63, s 64, s 65, s 66, s 69A, s 69B, s 69C, s 69D, s 69E, s 70, s 116, s 117, schedule 2

Queensland Civil and Administrative Tribunal Act 2008, s 32(2)

Emmetltow Pty Ltd v Pomroy [2015] QCATA 131

REASONS FOR DECISION

Introduction

  1. [1]
    The applicants, Manfred Roth and Theresa Roth, are parties to a residential park dispute.  On 13 October 2021 they applied to the Tribunal for an order to resolve the dispute (application).  The application named the park manager, Hometown Australia Communities (park manager), as respondent.
  2. [2]
    The order of the Tribunal, for the reasons following, is that the proceeding is dismissed.

Background

  1. [3]
    The respondent, Redland Park Operations Pty Ltd (park owner), is the owner of a residential park at 22 – 28 Collingwood Road, Birkdale known as Redlands Birkdale (formerly Gateway Lifestyle Redlands).
  2. [4]
    On 19 November 2018 the park owner and the applicants entered a manufactured homes - site agreement granting the applicants the following rights:
  1. (a)
     the right to occupy site number RL 129;
  1. (b)
     position a manufactured home on the site; and
  1. (c)
     non-exclusive use of the park’s common areas and commercial facilities

(site agreement).

  1. [5]
    The site agreement is in four parts:
  1. (a)
     Part 1: Schedule (detailing the site, rent, and terms and conditions of use);
  1. (b)
     Part 2: Terms of the site agreement;
  1. (c)
     Part 3: Special terms of the site agreement; and
  1. (d)
     Part 4: Acceptance of the site agreement.

The relevant provisions of the site agreement are referred to below, under the heading “Site agreement”.

  1. [6]
    On 5 January 2020 the park owner gave to the applicants a notice of general increase in site rent proposing to increase the site rent from $335.70 per fortnight to $350.00 per fortnight (general increase notice).  The notice is referred to below, under the heading “General increase notice”.

Application

  1. [7]
    The applicants challenge the validity of the notice on the following grounds:
  1.  The site agreement of the applicants does not allow for market review increases.
  1.  The site agreement does allow for a CPI increase annually.
  1.  The respondent gave a market review increase advice to the applicants on 5 January 2020.
  1.  This increase was for the amount of $14.30 per fortnight payable from 9th February 2020.
  1.  The relevant CPI increase would have been $7.92 per fortnight.
  1.  The applicant [sic.] has made the incorrect payment since 9th February 2020.
  1. [8]
    The orders sought by them are:
  1.  That the market review increase be set aside.
  1.   That a refund be made to the Applicants of the incorrect amount taken by the respondent.
  1.   Any other orders that the tribunal deems appropriate.

Response

  1. [9]
    The respondent, in its response filed 15 December 2021 (response), asserts the site agreement, in section 10 of part 1, provides for a market review of the site rent.[1]  The general increase notice, it further asserts, complies with section 69E of the Manufactured Homes (Residential Parks) Act 2003 (Qld) (MHRP Act).[2]
  2. [10]
    Submitted with the response are the following documents:
  1. (a)
     the site agreement;
  1. (b)
     the general increase notice; and
  1. (c)
     a market valuation prepared by John Watt & Associates dated 4 January 2020.

Statement by Ms Cochrane

  1. [11]
    The respondent, on 29 April 2022, filed a statement by Ms Wendy Cochrane.  She is a sales consultant employed by the respondent and, on 19 September 2020, following payment of a deposit, gave to the applicants a park disclosure document (form 1).[3]  The document, on page 15, states the basis for working out the amount of an increase in the site rent.

Applicants reply to the respondent’s response

  1. [12]
    The applicants, on 16 March 2022, filed a reply to the response (reply).  The applicants assert the site agreement provides for an increase in the site rent as a percentage of the site rent worked out by reference to the CPI number[4] but not a market review of site rent, and does not state when the site rent may be varied.

Legislation

  1. [13]
    The MHRP Act provides for the positioning and occupancy of manufactured homes in residential parks, and for other purposes.  Redlands Birkdale is a residential park within the meaning of the Act.[5]
  1. [14]
    The main object of the Act is spelt out in section 4(1).  It is to regulate, and provide fair trading practices in, the operation of residential parks:
  1. (a)
     to protect home owners from unfair business practices; and
  1. (b)
     to enable home owners, and prospective home owners, to make informed choices by being fully aware of their rights and responsibilities in their relationship with park owners.
  1. [15]
    The main object is achieved by, inter-alia, regulating the variation of site rent and providing ways of resolving a residential park dispute.[6]
  2. [16]
    Site rent is the rent payable under a site agreement.[7]  How site rent is paid and where it is paid are provided for in sections 63 and 64 of the MHRP Act.  Section 65 provides for the giving of a receipt for the payment of site rent and the making of an electronic or written record of the payment in the site rent payment record.  Requirements for the keeping of records of a payment of site rent under a site agreement are found in section 66.
  3. [17]
    Part 11 of the MHRP Act is important in the context of the application before the Tribunal.  It provides for the variation of site rent under a site agreement.
  4. [18]
    Division 2 of part 11 applies if a site agreement provides for an increase in the site rent and the park owner proposes to increase the site rent.[8]  Importantly, the site rent cannot be increased unless the park owner complies with sections 69A – 69E.[9]
  5. [19]
    The park owner is required to ensure the site agreement states the basis for working out the amount of an increase in the site rent.[10]  The examples sub-joined to the section are:
  1. (a)
     a percentage of the site rent worked out by reference to the CPI number for a stated period;
  1. (b)
     a market review of site rent.
  1. [20]
    Section 69B contains restrictions on increasing the site rent under a site agreement.  The park owner must not work out an increase in the site rent using more than 1 basis at one time.[11]  The example subjoined to section 69B(1) reads:

A site agreement provides for increases in site rent on the bases of an increase in the CPI number and market review of site rent.  An increase in site rent under the agreement based on a market review of site rent could not include an increase in the CPI number even though provided for in the agreement.

  1. [21]
    If the site rent has been increased under the division, the park owner must not increase the site rent under the division on any basis provided for in the site agreement within 1 year after the day the site rent was last increased under the division.[12]
  2. [22]
    The park owner, by virtue of section 69C, is required to nominate a general increase day when the site rent payable under the site agreement for all eligible sites in the residential park will be increased on the relevant basis.
  3. [23]
    Section 69D applies if the site agreement for an eligible site provides for an increase in the site rent on the basis of a market review of the site rent and the park owner proposes to increase the site rent on that basis.  The section imposes on the site owner a requirement to consult with, or arrange for a registered valuer to consult with, interested entities for preparing the market valuation.[13]
  4. [24]
    Requirements for the general increase notice are found in section 69E of the MHRP Act.
  5. [25]
    Section 70 provides for dispute resolution and applications to the tribunal about a general site increase.  The section, however, only applies if the home owner disputes the amount of the proposed increase on the basis it is excessive.
  6. [26]
    Subject to section 116 of the MHRP Act, a party to a residential park dispute may apply to the tribunal for an order to resolve the dispute. Residential park dispute is defined in section 14A of the Act in wide terms.  It includes a dispute between the park owner and home owner about the rights or obligations under the site agreement or Act or another matter provided for under the Act.[14]
  7. [27]
    A party to a residential park dispute, subject to section 116 of the Act, may apply to the tribunal for an order to resolve the dispute.[15]  Section 116 contains requirements for attempting to resolve the dispute.  The orders the tribunal may make are found in section 117 of the Act.

Directions given on 30 November 2021

  1. [28]
    On 30 November 2021 the Tribunal directed that the park owner be substituted for the park manager as respondent to the proceeding.

Directions given on 15 August 2022

  1. [29]
    On 15 August 2022 the tribunal gave directions for the parties filing submissions and, by consent, the proceeding being decided on the papers pursuant to section 32(2) of the Queensland Civil and Administrative Tribunal Act 2008 (Qld).

Site agreement

  1. [30]
    As I have said, the site agreement was entered into by the parties on 19 November 2018.
  2. [31]
    General site rent increases are provided for in section 10 of part 1.  The part is a schedule.  The substantive terms of the agreement are in part 2.
  3. [32]
    The section is reproduced below:

Section 10 - General site rent increases

Method(s) of calculation and frequency

Site rent shall be increased annually by the percentage change in Brisbane All Groups consumer price index (CPI) published by the Australian Bureau of Statistics.

The Market Review site rent increase is determined by consideration of any or all of the following factors:

  1. (a)
    The range and average level of rents within the park;
  2. (b)
    The range of rents usually charged for comparable sites in comparable residential parks in the locality of the park or
  3. (c)
    If it is impractical to obtain data for the range of rents mentioned in paragraph (b) above or data is not available for that range, then the range of site rents usually charged for comparable sites in comparable residential parks in comparable localities to the locality the park is in or
  4. (d)
    If it is impractical to obtain data for the range of site rents mentioned in (b) or (c) or data is not available for that range, general trends in rent for residential accommodation in the locality the Park is in.

Frequency

(if applicable)

12 JANUARY ANNUALLY

Nextgeneral increaseday

(if known)

10/01/19

Notes

  • The park owner must not work out a general increase in the site rent using more than 1 basis at one time (for example, CPI, a fixed percentage or market review)
  • The park owner must not increase the site rent on any basis provided for in the site agreement within 1 year after the day of the last general site rent increase.
  • Site rent may also be increased to cover special costs.  For more information see part 2 section 4.
  1. [30]
    In part 2, the terms of the site agreement, site rent is provided for in section 4.  Clause 4.1 provides for how the site rent is to be paid, clause 4.2 where the rent is to be paid and clause 4.3 rent receipts.
  2. [31]
    Clause 4.4 provides for increasing the site rent.  Clause 4.4.1 provides that site rent may only be increased in the ways set out in part 11 of the MHRP Act.  The clause reflects section 68 of the Act.
  1. [32]
    General site rent increases are provided for in the clauses 4.4.2 – 4.4.8 of part 2 of the site agreement.  Relevantly, the clauses provide:

General Increases

4.4.1Where the rent increase is in accordance with part 1 section 10 of this site agreement, the park owner must give the home owner/s written notice at least 35 days before the general increase day.

4.4.2The general increase notice must state:

  1. (a)
    the amount of the proposed increase in site rent
  2. (b)
    the basis for increasing the site rent
  3. (c)
    how the amount of the proposed increase in site rent has been worked out using the basis.  For market reviews including a copy of a market valuation prepared by a registered valuer
  4. (d)
    the general increase day (being the day on which the increased site rent is payable)
  5. (e)
    the day the notice is given to the home owner.
  6. (f)
    that if the home owner disputes the amount of the proposed increase
    1. the home owner must, within 28 days after receiving the notice, give the park owner a dispute negotiation notice for the dispute
    2. the home owner must use the dispute resolution procedures under part 17, division 1 of the Act to try and resolve the dispute with the park owner
    3. the home owner may, subject to the requirements of the dispute resolution procedures in the Act, apply to the tribunal for an order reducing the amount of, or setting aside, the increase if the dispute cannot be resolved using the dispute resolution procedures.

4.4.3The increased rent is payable from the general increase day.

4.4.5Where a park owner proposes to increase site rent on the basis of a market review, the park owner must consult with, or arrange for a registered valuer to consult with the home owners committee when preparing a written valuation for the market review.  This must be done at least 63 days before the next general increase day.

...

4.4.16The tribunal may reduce, set aside or confirm the amount of the proposed increase, or make any other order considered appropriate.

(Emphasis added)

General increase notice

  1. [33]
    The general increase notice is addressed to the applicants.  It gives them notice in the following terms:
  1. 1.
    The Park Owner wishes to increase the Site Rent payable from $335.70 per fortnight [“the Current Site Rent”] to $350.00 per fortnight [“the Proposed Increased Site Rent”].
  1. 2.
    The difference between the Proposed Increased Site Rent and the Current Site Rent is $14.30 per fortnight [“the Proposed Increase”].
  1. 3.
    The Park Owner has determined your Proposed Increased Site Rent based on a Market Rent Review clause in accordance with the terms of your Site Agreement.
  1. 4.
    Pursuant to Section 69E 2(a) of the Act, the Park Owner has also taken into consideration a ‘market review of site rent prepared by a registered valuer’ [“the Market Valuation”], attached hereto.
  1. [34]
    The general increase day stated in the notice is 9 February 2020.[16]  The notice then continues by spelling out the applicants’ right to dispute the amount of the proposed increase in the site rent.[17]

Applicants’ submissions

  1. [35]
    The applicants submit it is an accepted requirement the method and frequency of site rent increases be precisely conveyed by the wording of the site agreement.[18]  The respondent, the submissions continue, “... has been unable to show any precise wording to the effect that market review may be used to calculate a site rent increase for the applicant [sic.].”[19]
  2. [36]
    The site agreement, in stating an increase in the site rent as a percentage of the site rent worked out by reference to the CPI number annually eliminates, by virtue of section 69B of the MHRP Act, working out an increase using any other basis.[20]  Further, it is submitted, the site agreement does not specify when the site rent may be varied.[21]

Respondent’s submissions

  1. [37]
    The respondent submits the site agreement permits a market review of site rent, drawing attention to the second part of section 10 of part 1 of the site agreement.[22]  The frequency of the increases is specified in section 10 of part 1 of the agreement, it is further submitted by the respondent.[23]

Applicants’ further submissions

  1. [38]
    The applicant, on 11 October 2022, filed further submissions.  The submissions draw attention to the objects the MHRP Act and the decision of the appeal tribunal in Emmetltow Pty Ltd v Pomroy.[24]
  2. [39]
    Terms providing for when the site agreement may be varied and an increase on the basis of a market review of the site rent cannot be implied into the site agreement, it is submitted by the applicants.[25]

The issues

  1. [40]
    The issues to be determined by the Tribunal may be summarised in the following terms:
  1. (a)
     does the site agreement permit an increase in the site rent as a percentage of the site rent worked out on the basis of an increase in the CPI number and a market review of site rent;
  1. (b)
     does the first part of section 10 of part 1 of the site agreement exclude other bases for working out an increase in the site rent; and
  1. (c)
     does the site agreement state when the site rent may be varied?

Discussion

Does the site agreement permit an increase in the site rent as a percentage of the site rent worked out on the basis of an increase in the CPI number and a market review of site rent?

  1. [41]
    It is a requirement of that the MHRP Act that the site agreement state how and when the site rent may be varied, including that, under the Act, the tribunal may:
  1. (a)
     make an order increasing the site rent on application by the park owner; or
  1. (b)
     make an order reducing the site rent on application by the home owner.[26]
  1. [42]
    The drafting of the site agreement is unsatisfactory.  Notwithstanding, it is tolerably clear site rent may be varied on one of two bases.
  2. [43]
    The method of calculation of an increase in the site rent in section 10 of part 1 of the site agreement is in two parts.  Part one provides for an increase by a percentage of the site rent worked out by reference to the Brisbane all groups consumer price index published by the Australian Bureau of Statistics.
  3. [44]
    The second part of section 10 sets out matters to be taken into consideration in deciding a “... Market Review site rent increase ...”  However, it does not expressly state a market review of the site rent as a basis for working out of the amount of an increase in the site rent.
  4. [45]
    The attention given to section 10 of part 1 of the site agreement ignores clause 4.4 of part 2.  Clause 4.4.1, as I have said, expressly provides that site rent may only be increased in the ways set out in part 11 of the Act, reflecting section 68.  The section contemplates site rent may be varied in more than one way, but only a way stated in part 11 of the Act.
  5. [46]
    Part 11 does not state ways site rent may be varied other than in the examples subjoined to sections 69A and 69B(1).  Instead, the park owner is required to ensure the site agreement states the basis for working out the amount of an increase in the site rent.  It may state more than one basis but only one basis may be used at one time.
  6. [47]
    Clause 4.4.5 of the site agreement spells out what must be done by the park owner if it proposes to increase the site rent on the basis of a market review of site rent.  The clause reflects section 69D(2) of the Act.  Then, the matters in part two of section 10 of part 1 of the site agreement must be taken into consideration.
  7. [48]
    If the applicants’ submissions were accepted, they would render meaningless clause 4.4.5 of part 2 of the site agreement and the second part of clause10 of part 1.
  8. [49]
    The site agreement, in my opinion, expressly provides for two bases for working out an increase in the site rent; first, an increase a percentage of the site rent worked out by reference to the CPI number and, secondly, a market review of site rent.  In so doing, the site agreement complies with section 69A of the MHRP Act and either basis may be adopted for working out the amount of an increase in site rent.  On the occasion giving rise to the dispute, the basis chosen was a market review of site rent.

Does the first part of section 10 of part 1 of the site agreement exclude other bases for working out an increase in the site rent?

  1. [50]
    The applicants submit the first part of section 10 of part 1 of the site agreement, when read with the frequency “annually”, excludes, by reason of section 69B of the Act, variation of the rent by other than an increase based on the CPI number.  The submissions are rejected.
  2. [51]
    The MHRP Act clearly contemplates a site agreement may include more than one basis for working out an increase in the site rent.  Here, as I have found, the site agreement includes two bases, an increase a percentage of the site rent worked out by reference to the CPI number and a market review of site rent.
  3. [52]
    Sections 69B(1) and (2) provides the park owner must not work out an increase in the site rent using more than one basis at one time and must not increase the site rent more than once in the site rent year.  The frequency “annually” in section 10 of part 1 of the site agreement reflects the prohibition in section 69B(2) of the Act.  It is not to be read as confined to part one of section 10 of part 1 of the site agreement thereby excluding any other basis for working out an increase in the site rent; it applies to the basis adopted by the site owner.

Does the site agreement state when the site rent may be varied?

  1. [53]
    The site agreement must state when the site rent may be varied.[27]  Here, the site agreement does so.
  2. [54]
    In section 10 of part 1 of the site agreement, against “Frequency”, it states “12 JANUARY ANNUALLY”.  In so doing, the agreement makes clear when the site rent may be varied.

Decision

  1. [55]
    The Tribunal, by virtue of the section 117 of the MHRP Act, is given a wide discretion in terms of the orders it may make to resolve a dispute.  For the foregoing reasons, the appropriate order is that the proceeding is dismissed.

Footnotes

[1] Paragraph 2 of attachment A to the respondent’s response.

[2] Paragraph 3 of attachment A to the respondent’s response.

[3] Annexure WC01 to the statement by Ms Cochrane.

[4] Defined in schedule 2 to the MHRP Act as the all groups consumer price index for Brisbane published by the Australian Statistician.

[5] Schedule 2 to the MHRP Act.

[6] Sections 4(2)(c)(iii) and (e) of the MHRP Act.

[7] Scheduled 2 to the MHRP Act.

[8] Section 69(1) of the MHRP Act.

[9] Section 69(3) of the MHRP Act.

[10] Section 69A of the MHRP Act.

[11] Section 69B(1) of the MHRP Act.

[12] Section 69B(2) of the MHRP Act.

[13] Section 69D(2) of the MHRP Act.

[14] Section 14A(1)(c) are of the MHRP Act.

[15] Section 115 of the MHRP Act.

[16] Paragraph 5 of the general increase notice.

[17] Paragraphs 6 and 7 of the general increase notice.

[18] Paragraph 3 of the applicants’ submissions.

[19] Paragraph 4 of the applicants’ submissions.

[20] Paragraph 5 of the applicants’ submissions

[21] Paragraph 6 of the applicants’ submissions.

[22] Paragraph 11 of the respondent’s submissions.

[23] Paragraph 15 of the respondent’s submissions.

[24] [2015] QCATA 131

[25] Paragraph 8 of the applicants’ further submissions.

[26] Section 25(4)(i)(iii) of the MHRP Act.

[27] Section 25(1)(i)(iii) of the MHRP Act.

Close

Editorial Notes

  • Published Case Name:

    Roth & Anor v Redland Park Operations Pty Ltd

  • Shortened Case Name:

    Roth v Redland Park Operations Pty Ltd

  • MNC:

    [2023] QCAT 199

  • Court:

    QCAT

  • Judge(s):

    Scott-Mackenzie

  • Date:

    06 Jun 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

Case NameFull CitationFrequency
Emmetlow Pty Ltd v Pomroy [2015] QCATA 131
2 citations
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Cite 1 - [2015] QCATA 131
Cite 2 - [2015] QCATA 131

Cases Citing

No judgments on Queensland Judgments cite this judgment.

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