Haraba Pty Ltd v Castles[2006] QDC 388

DISTRICT COURT OF QUEENSLAND

Introduction

1. [1]
   The respondent, Dorothy Castles, occupies site 42 at the Gateway Village Resort at Rochedale. She is entitled to live on what is described as a manufactured home site which caters for permanent residents. She purchased the right to occupy that site on 28 April 1995 for $42,000.00. The resort consists of a mixture of sites for touring caravans, motor-homes and campers,^[1] holiday cabins^[2] and manufactured home sites.^[3]

2. [2]
   On 17 February 2005, the respondent gave a Notice of Proposed Sale and Assignment to the appellant’s agent. Subsequently, the appellant gave to the prospective purchasers, a copy of the Home Owners’ Information Document which contained a statement that the appellant intended to use site 42 as holiday accommodation once the respondent ceased to be a resident.

3. [3]
   By an application dated 11 March 2005, the appellant applied to the Commercial & Consumer Tribunal for termination of the of the Home Owner’s Site Agreement pursuant to s 38(1)(f) of the Manufactured Homes (Residential Parks) Act 2003.^[4]  The Tribunal refused to terminate the agreement.  The practical effect of a successful application would be that the respondent would not be able to sell her entitlement to the site on which is her manufactured home.  She would be entitled to compensation to remove the home pursuant to s 40 of the said Act.  The appellant appeals against the decision of the Tribunal. 

4. [4]
   The basis of the application is that the appellant says that it wishes to use that part of the park where site 42 is located for a purpose other than a manufactured home. The effect of that would be to remove that piece of land from the purview of the Act. The appellant believes that it would be difficult for it to meet its obligations to provide quiet enjoyment for the occupier of site 42 given that holiday accommodation is close by. The appellant has progressively changed the use of various sites as the owners of those sites have indicated that they will no longer occupy those sites as residents.

Legislative provisions

5. [5]
   The following sections of the Act are of relevance:

s 4

(2) The following are also important objects of this Act –

(a) encouraging the continued growth and viability of the residential park industry in the State;

(b) providing a clear regulatory framework to ensure certainty for the residential park industry in planning for future expansion.

s 10 What is a manufactured home

A manufactured home is a structure, other than a caravan or tent, that—

(a) has the character of a dwelling house; and

(b) is designed to be able to be moved from one position to another; and

(c) is not permanently attached to land.

s 38 Termination of site agreement by tribunal

(1) On application by the park owner under a site agreement, the tribunal may make an order (a termination order) terminating the agreement on any of the following grounds—

(a) the home owner—

(i) has contravened a term of the agreement; and

(ii) has failed to remedy the contravention after being given by the park owner a notice, in the approved form, requiring the home owner to remedy the contravention within 28 days after the notice is given;

(b) the home owner has assaulted a person who was lawfully in the residential park;

(c) the home owner has wilfully destroyed property, other than the home owner’s property, on the residential park or site;

(d) the home owner is not occupying the manufactured home positioned on the site as the home owner’s principal place of residence;

(e) the home owner, or the home owner’s tenant or guest—

(i) repeatedly interferes, or has repeatedly interfered, with the quiet enjoyment of the residential park by the park’s residents; and

(ii) continues, or has continued, the behaviour mentioned in subparagraph (i) after the park owner gives the home owner a notice, in the approved form, requiring the home owner to stop the behaviour;

(f) 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).

(2) However, the ground mentioned in subsection (1)(d) does not apply if the home is occupied by a tenant of the home owner.

(3) 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.

s 86 Quiet enjoyment

(1) The park owner for a residential park must take reasonable steps to ensure a home owner has quiet enjoyment of the home owner’s site in the park and the common areas.

(2) The park owner, or park manager, for a residential park must not interfere with the reasonable peace, comfort or privacy of a home owner in using the home owner’s site in the park or the common areas.

Maximum penalty for subsection (2)—20 penalty units.

Original Town Planning Approval

6. [6]
   The original order was made by what was then the Local Government Court. The order dated 16 October 1986, gave permission to use the land “for the purpose of a caravan park and a caretaker’s flat”. It was conceded in argument that the appellant has the appropriate approval for holiday cabins. It was pointed out in argument, that the approval allows the appellant to use the land in the manner it is being used viz. for a mixed purpose. The make up of the various uses was originally the decision of the appellant. As long as the purpose was for a caravan park, it included the various uses such as manufactured homes, holiday cabins and caravans etc. It was a decision for the appellant as to what area was given over to any particular use.

7. [7]
   Under the Act there are three grounds for termination of the site agreement:

1. Termination by agreement^[5]
2. Termination by the home owner^[6]
3. Termination by the Tribunal.^[7]

8. [8]
   It has been argued by the respondent that under the provisions of s 38(1)(a) to (e), the only basis upon which the Tribunal can order termination is for a serious reason. Those include breaches of the site agreement and a failure to remedy, unlawful assault, wilful destruction of property, non-occupation of the site as the home owner’s principal residence and interference with the quiet enjoyment of the park’s residence after notice to stop is given. Therefore, it is argued that for there to be a termination based upon s 38(1)(f), it must be more than an arbitrary decision of the appellant to change the use from manufactured home site to use as a holiday cabin which is the suggested intention.

Issues for Determination

9. [9]
   It is not in dispute that there is a document certified by the local government that allows site 42 to be used to accommodate a holiday cabin.^[8]  In any event a certificate issued under s 5.7.10 of the Integrated Planning Act 1997 was exhibited.^[9]  The original approval referred to 146 caravan sites without further particulars.  The appellant decided the mix of the various uses.  The question now for determination is:  by stating an intention to use site 42 for a holiday cabin, whether the appellant is going to use part of the park “in which the site is located, for another purpose”.  In other words, by stating a wish to do so, does it merely refer to another use rather than another purpose within the meaning of s 38(1)(f) of the Act.

10. [10]
    The main ground of appeal is that the member of the Tribunal erred in her interpretation of s 38(1)(f) of the Act. That is the only ground relied upon for termination. The learned member held that the appellant had failed to establish “another purpose” within the meaning of s 38(1)(f) of the Act. It is clearly a point of law and so leave is granted.^[10]  There was a further order ancillary to the refusal to terminate made by the Tribunal.  The appellant submits that that order was unnecessary. 

Site Agreement

11. [11]
    That part of the resort which is a ‘residential park’ as defined by s 12 of the Act, includes sites, common areas and facilities for those persons residing in manufactured homes. A ‘site’ is defined as land that is available for rent under a site agreement.^[11]  A site agreement is defined by s 14.  It relates specifically to the agreement between the park owner and the home owner being the appellant and the respondent respectively.  It covers such topics as rental, the positioning on the land of the manufactured home and the non-exclusive use by the home owner of the common areas and communal facilities.

12. [12]
    Any part of the site agreement which purports to “exclude, change or restrict” a provision of the Act is void to that extent.^[12]  In the present case the appellant is attempting to avoid the site agreement by reliance upon the right, it asserts, to terminate under the Act. 

Objects of the Act

13. [13]
    One of the main objects of the Act is to regulate and promote fair trading practices in the operation of residential parks by regulating the assignment and ending of a site agreement.^[13] Can it be said that by arbitrarily changing the use of the land from manufactured home site to a holiday cabin that s 4(1) is being promoted?  It is necessary to set out fully the explanatory notes to put ss 4 and 38(1)(f) into context.^[14]

An underlying problem is the basic tension between home owners and park owners largely caused by differing social and economic perspectives. Home owners are generally on low and/or fixed incomes. They have invested substantial amounts of money in purchasing homes, often for retirement purposes, and need security of tenure for the siting of the home in a residential park at a rent level commensurate with their capacity to pay. Many of these home owners have chosen this lifestyle to maintain their independence rather than seeking access to public housing. On the other hand, park owners have invested significant resources in both time and money in acquiring the land and developing their businesses. Different parks have different income and expenditure streams and park owners are not only seeking a return on their investment but also need to ensure the economic viability of their business. The Bill recognises these competing concerns and endeavours to provide certainty for both parties.

Essentially, the Bill retains all of the existing rights and responsibilities of both parties and introduces new provisions to enhance home owner protection through such measures as upfront disclosure of information on the park, written contracts, new definitions, input into park rules, establishment of home owner committees, new offence provisions and access to an improved dispute resolution process. Where the parties are unable to agree on certain issues, applications may be made to the Commercial and Consumer Tribunal to make appropriate determinations.

A new concern is that recent rapid increases in land prices have placed added pressure on the industry as parks located in prime real estate locations becoming attractive to developers. Generally, these parks are more likely to be mixed accommodation caravan parks, in seaside resort locations rather than purpose built residential parks. The Bill recognises the park owner’s right to use the land, subject to local government consent, for other purposes. Home owners are protected by the provisions in the Bill which are similar to those in the Mobile Homes Act 1989 in that they provide for the Commercial and Consumer Tribunal to make orders in relation to the payment of compensation for relocation where the purpose of the land is changed to permit redevelopment.^[15]

14. [14]
    The Explanatory Notes refer to a need to recognize “the park owner’s right to use the land, subject to local government consent, for other purposes”. The Tribunal is empowered to terminate a site agreement and to order “the payment of compensation for relocation where the purpose of the land is changed to permit redevelopment”. “Redevelopment” is not defined under the Act. “Development” is defined under the Integrated Planning Act 1997.  Section 1.3.2 sets out the meaning of development and it includes “making a material change of use of premises”.  It could be said that by changing from a site within the meaning of the Act to a use outside the Act is a material change of the use.  For example, if the appellant purchased an adjoining manufactured home itself, it could then rent it as a holiday cabin.  It would be difficult to describe it as a “redevelopment”. However, it could be argued that the “purpose” might remain the same viz. the provision of accommodation within a caravan park. For example, if the appellant purchased site 42 with the home, it would physically look the same but would not be subject to the Act. The park owner cannot contract with itself. Counsel for the appellant accepted that proposition. 

“Use” or “Purpose”

15. [15]
    The appellant contends^[16] that the words “a part of the park in which the site is located” include a part of the park consisting of the site.  It was further submitted the words “another purpose” mean a purpose other than the purpose for which the site is being used.  It was submitted that in that context, “another purpose” is a purpose other than the purpose of renting the site to a home owner for the purpose of positioning a manufactured home on the site.

16. [16]
    It was submitted by the appellant that the Tribunal had erred in finding that there was not “another purpose” where there is a rearrangement of permitted uses within a mixed use park. The two grounds relied upon for that submission were that “another purpose” required a local government approval for a new use. This is not really an issue in the case now. Secondly, that the Tribunal misconstrued and misapplied the passages from the Explanatory Notes. The appellant in the written submissions stated:^[17]

“…The (Explanatory) Notes acknowledged that different parks have different income and expenditure streams and that park owners need to ensure the economic viability of their business.  That supports a construction of “another purpose” which embraces a rearrangement of uses in a residential park so as to replace a site with communal facilities or another type of accommodation such as a holiday cabin or caravan site.  The Tribunal also appears to have construed the word “redevelopment” as being confined to the commencement of an entirely new use instead of a change to the form of layout or relative intensities of already approved and lawful uses.”

17. [17]
    In some ways, s 38(3) may invite the approach taken by the Tribunal on the latter point. The “new use” point was not relied on in argument by the respondent. The respondent says that the use as a caravan park is the purpose. It includes both a manufactured home and holiday cabin and so there is not “another purpose”. The appellant contends that it is sufficient that the appellant desires to use part of the park for another purpose, and that the site be located in that part. The site itself may be the part or part of a larger park. It is noted, however, that s 38(3) talks of “a part of the park in which the site is located” not “on” which.  The difference is that the park owner may designate an area in the park for a different purpose but not be discriminatory about a particular site.  The contrary argument is that there may be a designation of a manufactured site for a public amenity.  That, of course, may still be for the purpose of a caravan park.

18. [18]
    The cases relied upon by the respondent are illustrative. The leading case of Council of the City of Newcastle v Royal Newcastle Hospital^[18]  was concerned with the issue as to whether virgin bushland around a tuberculosis hospital and owned by the hospital was “used” by the hospital for the “purposes” of the hospital.  The hospital wanted to ensure that the patients received fresh air, peace and quiet.  If the land was for the purposes of the hospital, it was exempt from council rates.  The land was acquired and owned for the purposes of a hospital.  The question was whether it was relevantly used for that purpose.   The Privy Council held that it was “used” for the “purposes” of a hospital.  In the present case, there are various uses of the caravan park.  The land at Rochedale was approved for the purpose of a caravan park and caretaker’s cottage.  The use to which it was put was a mixture of manufactured homes, holiday cabins, caravans and camping.  In other words, the respondent argues, the purpose has not changed.  There is no “other purpose” within the meaning of s 38(1)(f).  The appellant contends that s 38(1)(f) talks about “another purpose” in the context of a purpose other than “use” as a site which is limited to a place where a manufactured home is located.

19. [19]
    Under the provisions of the former legislation, the Mobile Homes Act 1989, there seemed to be a distinction between a site and a purpose other than a site.  Site was defined as land made available for mobile homes. Section 4(f) which related to termination by a park owner and which is the counter part to the present s 38(1)(f) provided:

“(f) the relevant Local Authority has granted its approval of the use of the site for a purpose other than as a site.”

20. [20]
    The Explanatory Notes^[19] comment about the Mobile Homes Act in the following terms:

“One of the main policy objectives of the Mobile Homes Act 1989 was to limit the grounds on which the agreement to site the mobile home in a park and to reside in the home as the person’s principal place of residence may be terminated.

Complaints have been received from home owners that the Mobile Homes Act 1989 does not address issues which have emerged since the commencement.  In particular home owners have complained about high rents, inadequate contracts…”

21. [21]
    It would seem that the present Act has broadened the requirement of another purpose to “part of the park in which the site is located” not just the site itself i.e. the land on which the site is located. That meaning would prevent an arbitrary change by the park owner in relation to a specific lot as distinct from part of the park. Regard must be had to s 14C of the Acts Interpretation Act 1954 which states that ideas must not be taken to be different merely because different words are used.  However, the Explanatory Notes do make it clear that there were some new provisions “to enhance home owner protection” and to “permit redevelopment.^[20] The repealed provision 4(f) seemed to be more in line with the appellant’s case.

22. [22]
    Some assistance can be gleaned from other cases cited in argument by the respondent. In Parramatta City Council v Brickworks Ltd^[21] Gibbs J. with whom Barwick C.J. agreed cited with approval the following passage from City of Newcastle v Royal Newcastle Hospital:

“The uses to which property of any description may be put are manifold and what will constitute ‘use’ will depend to a great extent upon the purpose for which it has been acquired or created.  Land, it may be said is no exception and s. 132 [of the Act] itself shows plainly enough that the ‘use’ of land will vary with the purpose for which it has been acquired and to which it has been devoted…But where an exemption is prescribed by reference to use for a purpose or purposes it is sufficient, in my opinion, if it be shown that the land in question has been wholly devoted to that purpose even though, the fulfilment of the purpose does not require the immediate physical use of every part of the land”.

23. [23]
    The land acquired by the appellant in the present case was for the purpose of a caravan park. The uses made of the land included use for manufactured homes, holiday cabins etc. It cannot be said the “another purpose” has been created apart from the original purpose. It is clear that cases such as the Parramatta City Council v Brickworks Ltd and City of Newcastle v Royal Newcastle Hospital distinguish between “use” and “purpose”.  The observations by Denning L.J. who delivered the reasons in the latter case provide examples to clarify the issues:^[22]

“An owner can use land by keeping it in its virgin state for his own special purposes.  An owner of a powder magazine or a rifle range uses the land he had acquired nearby for the purposes of ensuring safety even though he never sets foot on it.  The owner of an island uses it for the purposes of a bird sanctuary even though he does nothing on it, except prevent people building there or disturbing the birds.  In the same way this hospital gets, and purposely gets, fresh air, peace and quiet which are no mean advantages to it and its patients.”

24. [24]
    That passage was cited with approval more recently the in The State of Western Australia v Ward.^[23]   It was submitted by the respondent that it is the “purpose” for using the land rather than the specific way in which the land is used to achieve that “purpose” which is the focus of attention.  It was further submitted that the appellant is entitled to put the land to distinct “uses” to achieve the “purpose”.  There may be areas left uncleared to provide a buffer between residents or neighbours, other parts of the land may be for different amenities.  Whatever the “uses”, they are directed to one ultimate “purpose” viz. to run a caravan park.  It was submitted that a change in the way a particular part of the park is used does not change the purpose, if the new use fulfils the existing purpose.  The example was given that if the appellant wished to construct an ablutions facility on a site as defined by s 13, it would still be part of a “residential park” as defined by s 12 and so falling within the “purpose” of a caravan park. The arguments put forward by the respondent are compelling.  It was submitted that the authorities referred to do not allow an interpretation of s 38(1)(f) as referable to “another purpose” which allows the appellant to change the way a specific site is used, as part of an overall purpose of operating a residential park, or more relevantly the caravan park.

Aids to Construction

25. [25]
    An interpretation of an Act which will best achieve the purpose of the Act is the preferred interpretation.^[24]  The High Court in the Project Blue Sky case stated:^[25]

“A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions.  … Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.”

26. [26]
    Applying that approach to the present case, the following findings are open:

1. (a)
   Section 4(1) states that one of the main objects is to promote fair trading practices in the operation of residential parks.  It would not be fair trading for the appellant to ignore its responsibilities and obligations under the Site Agreement and the Act by arbitrarily designating a particular site as a potential holiday cabin holding thus excluding the respondent from recovering her investment after ten years.

2. (b)
   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.

3. (c)
   According to the Explanatory Notes, the Act “retained all of the existing right and responsibilities of both parties and introduced new provisions to enhance home owner protection …”.  To allow the appellant to succeed on this application would be contrary to that objective.  However, it should not be forgotten that the Explanatory Note also recognises the investment of a park owner and the need to develop their businesses. In my view, this is lower down the hierarchy of the objectives of the Act and its predecessor, the Mobile Homes Act 1989.^[26] The parks located in prime real estate areas make them attractive to developers. The Explanatory Note makes it clear that the park owner has a right to use the land, subject to council consent, for other purposes. 

4. (d)
   The Second Reading Speech^[27] referred to the government being “committed to ensuring security of tenure and appropriate consumer protection measures for a vulnerable segment of our population who, instead of seeking public housing, have chosen to provide for their retirement by living in residential parks”.  To allow the appellant to terminate the subject site agreement by a change in use would be contrary to “ensuring security of tenure” and moreover the right to assign such an interest.  A retired person might at some stage have to move into more intensive care.  The right to assign the licence to occupy and sell the manufactured home might allow such a move to be more affordable.

5. (e)
   The decision to make site 42 a holiday cabin holding would defeat the prime objects of the Act viz. to provide security of tenure, certainty under the Act and protection of a vulnerable sector of the community. It has been suggested that termination of the Site Agreement together with compensation for removal costs would adequately compensate the respondent as intended under the Act.  It is not suggested that it would compensate her for the lost equity of some $13,000.00 accrued over the past 11 years or that it would fully compensate her if a site had to be purchased to allow  her to remove her home elsewhere.

6. (f)
   To terminate the Site Agreement would for all practical purposes, deprive the respondent from selling her home on its present site.  This would be contrary to the intention of the legislature to allow her the right to sell, bequeath or gift the home.^[28]

The Second Order

27. [27]
    The learned member of the Tribunal made the following further order after dismissing the application to terminate the Site Agreement:

“2. The applicant must not state in any disclosure statement provided to a purchaser of the respondent’s home in accordance with section 45 of the Manufactured Homes (Residential parks) Act 2003, that the purchaser will not be provided with a site agreement, or that the purchaser will not be permitted to assign its site agreement.”^[29]

28. [28]
    The order made was somewhat pre-emptive. If the appellant fails to give effect to this order, then the respondent has various remedies. In the Home Owners Information Document,^[30] two additional paragraphs are included.  The first is an indication by the appellant that it proposes to use site 42 as a holiday cabin site or a caravan or camping site upon the respondent ceasing to be a resident. In effect, there would be nothing to assign as the Site Agreement would be at an end.  The second is that site 42 does not have a current engineer’s structural opinion.  Given that the effect of dismissing this appeal is that there is no termination of the Site Agreement allowable under s 38(1)(f), it would be contumacious of the appellant to include the first of those paragraphs in any Home Owner’s Information Document.   

Conclusions

29. [29]
    The appellant has not shown that the Tribunal member has erred in her finding that the application be dismissed. The appellant has failed to establish that it is entitled to termination of the Site Agreement based upon s 38(1)(f) of the Act.

Orders

1. Leave to appeal is granted.
2. The appeal is allowed in part whereby paragraph 2 of the orders of the Tribunal is deleted.
3. The appeal is otherwise dismissed.
4. It is ordered that the appellant do pay the respondent’s costs of this appeal to be assessed.