Jomal Pty Ltd v Commercial & Consumer Tribunal
[2009] QSC 3
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- Notable Unreported Decision
- Appeal Determined (QCA)
- Jomal Pty Ltd v Commercial & Consumer Tribunal[2009] QSC 3
- Add to List
Jomal Pty Ltd v Commercial & Consumer Tribunal[2009] QSC 3
Jomal Pty Ltd v Commercial & Consumer Tribunal[2009] QSC 3
SUPREME COURT OF QUEENSLAND
CITATION: | Jomal P/L v Commercial & Consumer Tribunal & Ors [2009] QSC 3 |
PARTIES: | JOMAL PTY LTD ABN 33 010 896 468 |
FILE NO/S: | BS3924 of 2008 |
DIVISION: | Trial Division |
PROCEEDING: | Application |
ORIGINATING COURT: | Supreme Court at Brisbane |
DELIVERED ON: | 06 February 2009 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 15 August 2008 |
JUDGE: | Douglas J |
ORDERS: |
|
CATCHWORDS: | ADMINISTRATIVE LAW – JUDICIAL REVIEW – REVIEWABLE DECISIONS AND CONDUCT –DISTINCTION BETWEEN ADMINISTRATIVE AND JUDICIAL FUNCTIONS – whether decision of Commercial and Consumer Tribunal was a decision of an administrative character – whether decision can be set aside for lack of jurisdiction. ADMINISTRATIVE LAW – JUDICIAL REVIEW –REVIEWABLE DECISIONS AND CONDUCT –DISTINCTION BETWEEN ADMINISTRATIVE AND JUDICIAL FUNCTIONS – whether decision of Commercial and Consumer Tribunal attended by jurisdictional error – error in construction of legislation ADMINISTRATIVE LAW — Prerogative order — Review of decision of member of Commercial and Consumer Tribunal — Whether or not errors identified amounted to jurisdictional error — Error of law — Characterisation of tribunal Commercial and Consumer Tribunal Act 2003, s 8, s 9, s 11, s 40, s 46, s 47, s 50, s 71, s 91, s 93, s 100(1), s 101, s 108, s 114, s 153 Judicial Review Act 1991, s 12(b), s 47, Pts 3 and 5 Retirement Villages Act 1999, s, 20, s 37, s 42, s 45, s 74, s 76, s 90, s 91, s 92, s 94, s 97, s 98, s 99, s 102A, s 103, s 109, s 110, s 191, s 215 Bermingham v Corrective Services Commission of New South Wales (1988) 15 NSWLR 292, 302 considered Brandy v Human Rights and Equal Opportunities Commission (1995) 183 CLR 245, 268-269 considered Chancellor Park Retirement Village Pty Ltd v Retirement Villages Tribunal [2004] 1 Qd R 346 considered Craig v State of South Australia (1995) 184 CLR 163 considered and discussed Duperouzel v Cameron [1973] WAR 181, 182-183 considered Haydon v Kent County Council [1978] 2 All ER 97, 108-109 applied John Burke Ltd v Insurance Commissioner [1963] Qd R 587 considered Medical Board of Queensland v Lip [2007] QSC 271 considered R v Brisbane City Council, ex parte Read [1986] 2 Qd R 22 followed Re Carey; ex parte Exclude Holdings Pty (2006) 32 WAR 501 discussed and distinguished Returned & Services League of Australia (Victorian Branch) Inc v Liquor Licensing Commission [1999] 2 VR 203 applied Scott v WorkCover Queensland [2000] QSC 414 considered State of Queensland v Epoca Constructions Pty Ltd [2006] QSC 324 considered Webster v McIntosh (1980) 32 ALR 603 considered |
COUNSEL: | R M Derrington SC with J Payne for the applicant No appearance for the first respondent D C Rangiah SC for the second respondents apart from the respondent named Sally Hanrahan, deceased |
SOLICITORS: | Minter Ellison for the applicant No appearance for the first respondent David Wise for the second respondents |
- The issue in this application is the identification of the appropriate method of payment for repairs to water heaters in or affixed to units in the Sunnymeade Park Retirement Village. The second respondents live in the Village pursuant to residence contracts. The Village is operated by the applicant. The first respondent, the Commercial and Consumer Tribunal, has decided that the applicant should pay for certain repairs to the heaters from a maintenance reserve fund established pursuant to the Retirement Villages Act 1999 (“the Act”).
- The applicant, in seeking to review that decision, argues that the Tribunal erred because the maintenance reserve fund can only be used for maintaining and repairing the Village’s capital items, which are defined under the Act to exclude items that, under the residence contract, are to be maintained, repaired and replaced by the resident. The applicant’s case is that the residents have bound themselves contractually to be personally liable for the costs of repairing the heaters with the result that they are not capital items.
- The residents’ case is that their residence contracts, on their proper construction, do not make them personally responsible for the maintenance, repair and replacement of the heaters. Alternatively they argue that the Act does not allow a residence contract to make a resident personally liable to maintain, repair or replace certain items of a capital nature other than those installed by the resident and removable by the resident at the termination of the residence contract.
- The issue is one with ramifications that extend beyond this particular dispute and may affect many other similar contracts in other Queensland retirement villages.
- There is a potential appeal available to the applicant under s. 100(1) of the Commercial and Consumer Tribunal Act 2003 (“the CCT Act”) by appeal to the District Court but only with that Court’s leave and then only on the grounds of error of law or excess, or want, of jurisdiction. Because of the limitations of that avenue of appeal, the fact that the time limit for such an appeal had expired and the potential ramifications of the application for the parties and others, the applicant came to this Court seeking to invoke its powers of judicial review under the Judicial Review Act 1991 (“the JR Act”). That course was not resisted by the second respondents although they did argue that the decision appealed against was not one of an administrative character but rather of a judicial nature, precluding relief under Pt 3 of the JR Act and limiting the nature of any relief available under Pt 5. The parties are true contradictors, however, and were treating this, in effect, as a test case and had agreed among themselves about the payment of costs no matter what they result of this application should be.
- In the circumstances it seems appropriate to me to treat this application on its merits, disregarding the discretion to dismiss it under s. 12(b) of the JR Act. I shall deal with the arguments relevant to the nature of the relief available under the JR Act later.
Background
- The relevant contracts were leases referred to by the parties as the 1995 and 1998 residence contracts and the 2001 residence contracts. Pursuant to all of the residence contracts under consideration, the residents covenanted with the applicant to maintain their villas or apartments, and the items within them, in good repair.
- The 1995 residence contracts and the 1998 residence contracts each included the following covenants:
“3.OBLIGATIONS OF LESSEE.
The Lessee hereby covenants with the Lessor
…
3.2 At all times during the continuance of this Agreement to keep and maintain the glass windows, locks, latches, fasteners and the whole of the interior of the Demised Premises occupied by the Lessee in a clean condition and good repair having regard to its condition at the commencement of the term hereby granted damage by fire, flood, lightning, earthquake, storm and tempest without default on the part of the Lessee excepted and at the termination of this Lease to deliver up the Demised Premises in accordance with his obligations herein contained.” (emphasis added)
- In the 2001 residence contracts, the covenants of replacement and repair were in the following form:
“7.The Resident undertakes and agrees with the Scheme Operator:
…
7.5.2 To regularly maintain and properly repair or replace (with items of the same or similar quality to those in use when they were last replaced any fixtures, fittings, equipment, appliances, furniture, furnishings and other property in and on the Accommodation Unit that are made available by the Scheme Operator.
…
9.6.2 Nothing requires the Scheme Operator to maintain, repair or replace anything that is the responsibility of the Resident under the Lease or the Act or the responsibility of other residents of the Retirement Village under their leases or the Act.” (emphasis added)
- The learned tribunal member found that the hot water heaters were all internal fixtures within the units governed by the 1995 and 1998 residence contracts and, in respect of cl. 7.5.2 of the 2001 residence contracts, that the lease provided that the resident was responsible for repair, maintenance and replacement of fixtures fixed to the interior or exterior of the unit, and that there was no dispute that a hot water heater was a fixture and legally part of an accommodation unit.[1]
- In May 2006 a serviceman from a business called Anode Technology inspected the hot water heaters and a number of sacrificial anodes were found to be corroded and in need of replacement. That was done and the parties are agreed that the work done is properly described as “repair” or “maintenance”. Nine residents have paid the invoices from Anode Technology but others remained unpaid pending the reference of the matter to the tribunal.
The operation of the Act
- The Village and the relevant residence contracts are governed by the Act. The applicant’s counsel usefully summarised its operation as follows:
- In return for paying an ingoing contribution and entering into a residence contract, persons (aged 55 years and older) obtain a right to reside in the retirement village and receive services. Depending upon the terms of their contract, a resident may acquire freehold title to the unit or be granted a lease or licence over the unit. In this case, the residents were granted a lease.
- Further, the Act entitles residents to enter into a variety of different arrangements with the scheme operators. In particular, residents can negotiate to acquire an interest in the increase in the capital value of their unit or lease; this is part of their “exit entitlement.” That is, they can negotiate that on the termination of the lease they will acquire a portion of any increase in the value of their unit or right to reside. Some residents may be entitled to receive 100 per cent of the gain, some receive none, and others might receive 50 per cent. In respect of the 1995, 1998 and 2001 residence contracts, residents receive 50 per cent. Whether or not the resident participates in capital gain, and to what extent a resident participates in capital gain, is purely a contractual arrangement between the operator and the resident.
- capital improvement (Division 3) – where there is to be an enhancement to the village capital by way of “an improvement”, the operator of the scheme is solely responsible for the cost of the enhancement from its own funds;[2]
- capital replacement (Division 4) – the scheme operator must establish and keep a Capital Replacement Fund (CRF) which is only to be used for replacing the capital items of the village.[3] The operator is solely obliged to contribute money (‘the capital replacement fund contribution’) to this fund.[4] No amounts are contributed by the residents. The amount contributed by the operator is calculated as a proportion of the amounts received by the operator by way of ingoing contributions. If there is any shortfall at any time that shortfall is met by the operator;[5]
- capital maintenance (Division 5) – the scheme operator must establish a maintenance reserve fund (MRF) which is to be used only for maintaining and repairing the capital items of the village.[6] The fund is not to be to be used for capital improvement or replacement or “day-to-day maintenance of the village.”[7] This fund, which is a trust fund, is contributed to by residents of the village by paying the general services charge, a portion of which is deducted and placed into the MRF.[8] The amount of the maintenance reserve fund contribution is set annually by reference to a quantity surveyor’s report, and any shortfall temporarily remedied by an interest free loan from the operator;[9]
- general services (Division 7) - in addition to the maintenance reserve fund contribution, the scheme operator imposes charges for general services that are supplied, or made available, to all residents of a retirement village, such as management and administration of the village, gardening and day-to-day maintenance, a village shop or a communal recreation area;[10] and
- personal services – by agreement, the scheme operator may provide optional services to an individual resident such as laundry, meals or cleaning.
- The applicant’s submission was that there is logic to the division of expenses under the Act as it requires operators to pay the cost of capital improvement (which results in an accretion to the capital wealth of the operator), and for residents to meet the cost of maintaining the village, thereby preserving both the functionality of the village where the residents reside and, ultimately, the resale value of their right to reside.
- The expression ‘capital items’ is a defined term in the Dictionary of the Act, and the definition includes the following:
“(a)all buildings and structures located in the retirement village and owned by the scheme operator, including the communal facilities, amenities and accommodation units, other than items that, under the residence contract, are to be maintained, repaired and replaced by the resident.” (emphasis added)
- Other relevant provisions of the Act include the following sections:
“13What is a public information document
A public information document, for a stated retirement village scheme, is a document, in the approved form under section 74, giving details about the retirement village scheme.
...
17What is a capital replacement fund
A capital replacement fund is a fund established under section 91 for replacing the retirement village’s capital items.
18What is a capital replacement fund contribution
A capital replacement fund contribution is a percentage of the new resident’s ingoing contribution, decided by the scheme operator and described in the public information document as a contribution to the capital replacement fund.
19What is a maintenance reserve fund
A maintenance reserve fund is a fund established under section 97 for maintaining and repairing the retirement village’s capital items.
20What is a maintenance reserve fund contribution
A maintenance reserve fund contribution is that part of the general services charges, decided by the scheme operator and described in the public information document as a contribution to the maintenance reserve fund.
...
37Public information document forms part of residence contract
(1)A public information document for each resident is taken to form part of the resident’s residence contract to which the public information document relates.
(2)A notice given to the chief executive and a resident under section 36 is taken to form part of the resident’s residence contract.
(3)If a provision of a public information document is inconsistent with a provision of any other part of the residence contract, the provision that is more beneficial to the resident prevails.
(4)If a provision of a public information document is inconsistent with a provision of this Act, the provision of this Act prevails.
...
42Purpose and intention of [Part 3]
(1)The purpose of this part is to state minimum requirements for residence contracts.
(2)However, it is not the intention of this part to prevent a scheme operator agreeing in a residence contract or otherwise to conditions that are more beneficial to a resident or former resident than the provisions of this part.
...
45Content of residence contract
...
(2)A provision of a residence contract is of no effect to the extent that it is inconsistent with this Act or purports to restrict or exclude the operation of a provision of this Act.
(3)Also, a provision of a residence contract is of no effect to the extent that it purports to restrict or exclude the operation of a public information document, or a provision of a public information document, taken to form part of the contract under section 37.
...”
- Each of the residence contracts was accompanied by a public information document (PID) in the form required by the Act at the relevant time. Clause 3.17(D) of the PID in respect of the 1995 and 1998 residence contracts contained this statement:
“In addition to the Monthly Fee, you are personally responsible to arrange and to pay all costs associated with:
Internal maintenance and repairs other than normal wear and tear.”
- An issue that was not canvassed in the evidence before the tribunal was whether the replacement of a sacrificial anode in a water heater amounted to normal wear and tear or was better described as the use of a part of the hot water system in its operation such as the use of oil in a car. The tribunal pointed out, however, that there was no evidence that the corrosion of the sacrificial anode was the result of accelerated wear and tear and found that the need for their replacement was the result of normal wear and tear.[11]
- Clauses 1.1.9 to clause 1.1.11 of the PID with the 2001 residence contracts said:
“1.1.9 The capital replacement fund is for the replacement of the retirement village’s capital items. Unless it is provided for in an existing residence contract, the scheme operator is solely responsible for contributions to the capital replacement fund.
1.1.10Capital items include:
(a)buildings and structures owned by the scheme operator such as:
…
(iii) accommodation units
1.1.11 Capital items do not include accommodation units and communal facilities that are owned individually by residents or by the body corporate under a community title scheme of which the residents are members. In such cases, the resident or the body corporate is responsible for the replacement of these capital items.”
The Tribunal findings that are challenged
- The following findings made by the Tribunal were challenged by the applicant as containing errors of law:
- Clause 3.2 of the lease in the 1995 and 1998 residence contracts purports to exclude the operation of ss 91 and 94 of the Act and, pursuant to s 45(2) of the Act, is of no effect;[12]
- Clause 3.2 of the lease in the 1995 and 1998 residence contracts is inconsistent with cl 3.17(D) of the PID in the 1995 and 1998 residence contracts and cl 3.2 disadvantages the resident. Clause 3.2 is therefore of no effect on the ground specified in s 37(3) of the Act;[13]
- Clause 7.5.2 of the lease in the 2001 residence contracts purports to exclude the operations of ss 91 and 94 of the Act and, pursuant to s 45(2) of the Act is of no effect;[14]
- Clause 7.5.2 of the lease in the 2001 residence contracts is inconsistent with cl 1.1.9 and 1.1.10 of the PID in the 2001 residence contracts and cl 7.5.2 disadvantages the resident. Clause 7.5.2 is therefore of no effect on the ground specified in s 37(3) of the Act;[15]
- a hot water heater is a ‘capital item’ in terms of each of the 1995, 1998 and 2001 residence contracts;[16] and
- the cost of repair and maintenance of the hot water heater is under each of the applicant residents’ residence contracts required to be paid out of the MRF.[17]
The applicant’s arguments
- The applicant attacked those findings on the basis that they contained errors of law in that the tribunal:
- misconstrued the expression “capital items” as that expression is defined in the Act and, in so doing, erred in failing to determine that the hot water heaters in the accommodation units at the Village were not “capital items” within the meaning of that expression as it is used in the Act;
- wrongly identified the legal obligations of the parties to the relevant residence contracts by applying an incorrect construction of the expression “capital items” as it is used in the Act; and
- erred in holding that the costs of repairing or maintaining the hot water heaters in the accommodation units at the Village should be paid out of the MRF with respect to that Village.
- In developing their arguments, counsel for the applicant submitted that there were four major errors in the tribunal’s reasoning. The first was said to be the approach adopted by the learned tribunal member to the construction of the expression “capital items.” The second they described as the “PID issue”, dealing with whether those public information documents could be used to construe the clauses in the residence contracts defining what were capital items. The third they described as the “freedom of contract issue” and related to the provision in s. 76(a) of the Act requiring a PID to make provision for information about the nature of the amounts a resident may be required to pay, for example: “an ingoing contribution, an exit fee, services charges, and contributions to particular funds.” The tribunal treated this as suggesting that Parliament did not intend that residents could be made personally liable for maintenance, repair and replacement cost of fixtures within a unit. The fourth error suggested was that the finding that the repairs to the hot water heaters should be paid from the MRF was contrary to s. 97 of the Act, which, relevantly, prevents the operator from paying amounts from the MRF for purposes other than maintaining and repairing the village’s capital items. An operator faces a pecuniary penalty if it breaches this section.
The proper construction of “capital items”
- The contractual obligations of the residents the subject of the 2001 residence contracts to repair, maintain and replace their hot water heaters, on their face, read with the definition of capital items in the dictionary of the Act, lead, prima facie, to the conclusion that the replacement of the sacrificial anodes was an obligation undertaken by the residents under their residence contracts.
- The same conclusion is not quite as obvious in respect of the 1995 and 1998 contracts as their wording did not refer explicitly to the replacement of items such as a sacrificial anode but rather to the keeping and maintaining of the premises in good repair. The PID relevant to those contracts also said that the residents were personally responsible to arrange and to pay all costs associated with internal maintenance and repairs “other than normal wear and tear”. Neither of those obligations explicitly covers the replacement of a sacrificial anode unless that were to be regarded as maintenance of the hot water systems, a valid conclusion and one which I adopt. The ordinary meaning of “maintain” is “to keep something in existence in a state which enables it to serve the purpose for which it exists”.[18]
- The PID’s reference to normal wear and tear could also comprehend the replacement of an anode, however, and the effect of that document is something that I shall deal with later.
- Assuming, therefore, that the hot water system anodes were not capital items because they were the resident’s contracted responsibility, why should they not pay for them personally? The tribunal approached the problem in two ways, by inserting additional words into the definition of capital items and by concluding that the natural meaning of the definition was inconsistent with s 94 and s 110 of the Act, dealing with insurance of the village, and s 92 and s 98 which cover the provision of a quantity surveyor’s report.
- The words inserted mirrored some language used in s 109 which defines the word “building” in the division of the Act dealing with insurance as follows:
“building includes improvements and fixtures forming part of the building, but does not include fixtures installed by a resident removable by the resident at the termination of a residence contract.”
- The words “installed by a resident removable by the resident at the termination of a residence contract” were inserted by the tribunal notionally into the definition of capital items so that it would be construed as follows:
“All buildings and structures located in the retirement village and owned by the scheme operator, including the communal facilities, amenities and Accommodation Units, other than items installed by a resident removable by the resident at the termination of a residence contract that, under the residence contract, are to be maintained, repaired and replaced by the resident.”
- The approach appears to have been influenced by some general language used by the Minister in her second reading speech which does not, in my view, justify the insertion of those words. The insertion of the words was validly criticised for the applicant as redundant and inappropriate in context as the words “other than” necessarily referred to an exception to the class of assets owned, not by residents, but by the scheme operator. Nor could it be said that parliament would have used these words if its attention had been drawn to an alleged omission in the definition.[19]
- The tribunal also took the view that the insurance provisions of the Act required this approach to the definition of “capital items” because the scheme operator was obliged to insure the village by s 110 and, by s 94(1)(a), to pay into the capital replacement fund amounts received under insurance policies for the distribution of “items of a capital nature”. The argument was that no amount in that fund could be used other than to replace capital items.[20] The tribunal’s concern was that, if a hot water heater was not a capital item, then it could not be replaced from the proceedings of an insurance policy taken out by the scheme operator. That reasoning was attacked on several grounds. It was said to be an error to assume that the words “capital items” had the same meaning throughout the Act so that it was wrong to search the Act to find a possible contrary intention which should then by used to alter the true meaning of the defined expression.[21] The words actually used in s 94(1)(a) were also “items of a capital nature” rather than “capital items” which is the phrase used elsewhere in the Act, such as in s 97(3)(a), and the applicant’s submission was that the exceptional words should not be used to govern the proper construction of the defined words in this context.
- The applicant also submitted that there was no need to alter the construction of “capital items” because of the insurance provisions of the Act because the scheme operator’s obligation to insure the village against damage arising from “earthquake, explosion, fire, lightning, storm, tempest or water or glass damage or damage from impact, malicious act or riot” led, in context, to the more logical conclusion for the purposes of the insurance provisions that all the buildings in the village other than those owned by the residents or the body corporate would be capital items, payment for which would be made properly from the capital replacement fund.
- The tribunal also took the view that the definition of “capital items” needed amendment in the form referred to earlier because the Act’s provisions about quantity surveyor’s reports under s 92 and s 98, although requiring reports about the expected capital replacement costs for the village, did not refer to capital items, leading to the possibility in the view expressed in the tribunal, that the bulk of the fixtures in the village could be excluded from the capital replacement fund and the maintenance reserve fund. This conclusion was criticised by the applicant as based on an unwarranted assumption, namely that the bulk of the fixtures would be excluded from the operation of the funds. There does not appear to have been any reliable evidence on which such a conclusion could have been based.
- As the applicant also submitted, the quantity surveyor’s report can be used by the scheme operator to adopt the budget for the capital replacement fund required by s 93(1) by reference to the items in the quantity’s surveyor’s report which it is obliged to pay from the capital replacement fund.
- In my view the tribunal did err in law in purporting to read words into the definition of “capital item” and that approach cannot be justified because of the concerns expressed about the possible operation of the iusurance provisions of the Act or the provisions about quantity surveyors’ reports.
The PID issue
- Section 13 of the Act defines a PID as a document in the approved form under s 74 of the Act giving details about the retirement village scheme. It forms part of the residence contract and, if inconsistent with it, then the provision that is more beneficial to the resident prevails unless it is inconsistent with the Act when the provision of the Act prevails.[22]
- As I have already pointed out, the 1995 and 1998 PIDs were more beneficial than the contemporaneous residence contracts in imposing personal responsibility on the residents to pay all costs associated with internal maintenance and repairs “other than normal wear and tear”. That addition was consistent with the Act’s definition of capital items but inconsistent with and more beneficial than the residence contracts in excluding the residents from responsibility for payment of the costs associated with normal wear or tear. Although the issue whether the replacement of an anode was normal wear and tear was, apparently, not examined factually before the tribunal, the conclusion that it was, in the absence of evidence that it was the result of accelerated wear and tear,[23] seems rational to me and not one that would normally require review in this court.
- The same result does not follow in respect of the 2001 contracts where the relevant difference between them and their accompanying PIDs was that the PID stated that capital items include “accommodation units” without reference to the ability to quarantine items from those units which are required to be maintained, repaired or replaced by the resident. That, arguably, results in the PID being inconsistent with or at least a poor summary of the Act.
- It was submitted plausibly for the applicant that the PID was similar to delegated legislation because it was made in a form required to be approved by the chief executive and could not be used to interpret the Act itself.[24] When read with the Act and the 2001 residence contracts, also, the natural conclusion seems to me to be that the capital items described to include accommodation units in the PID should be read, consistently with the residence contract and the definition of “capital items”, to permit the exclusion of items to be maintained, repaired and replaced under the residence contract. To permit the PID to limit the statutory meaning of “capital items” in the Act in that fashion would be an example of the stream rising above its source and of inconsistency with the Act whose meaning should prevail under s 37(4).
The freedom of contract issue
- The tribunal took the view that while there was no express prohibition against contracting out of the Act, nevertheless the provisions in, for example, s 74(5)(b) and s 76(a) requiring a PID to provide residents’ contribution information without specifying whether they were personally liable for maintenance, repair and replacement of fixtures within a unit, suggested that parliament did not intend that residents could be made responsible for such costs because of the consumer protection focus of the Act.[25]
- That approach was criticised as an unwarranted gloss on the Act, inconsistent with the definition of “capital items” and with the fundamental principle of freedom of contract. Section 42(2) contemplates that the parties may agree to more beneficial conditions for a resident just as the definition of “capital items” permits them to agree that certain items are to be maintained, replaced or repaired by the residents. It was also submitted that the fact that it is the residents’ contributions to the maintenance reserve fund that would pay for the maintenance of such items on that analysis in any event, argues effectively against the view that the consumer protection focus of the Act requires such an approach to its construction.
- In my view those arguments are correct and the Act cannot be read to prevent the parties from agreeing that a resident may pay the costs of maintaining, repairing and replacing certain capital items.
The effect of s. 97 of the Act
- That conclusion is reinforced by the terms of s 97(3)(a) which penalises a scheme operator if it uses an amount in the maintenance reserve fund for a purpose other than maintaining an repairing the village’s capital items. The submission was that, to require the scheme operator to use the maintenance reserve fund to replace the anodes when, by agreement, they were not capital items, was an error of law. At least in respect of the 2001 residence contracts, that seems to be right.
Was the decision administrative or judicial?
- The second respondents’ submission was that the decision was one of a judicial rather than an administrative character and, therefore, not reviewable under Part 3 of the JR Act. They accepted, however, that the application could be treated as an application for review under Part 5 of that Act. The application was amended to include such relief on grounds including error of law, manifest unreasonableness and the taking into account of irrelevant considerations.
- The predecessor to this tribunal was the Retirement Villages Tribunal. Chesterman J held in Chancellor Park Retirement Village Pty Ltd v Retirement Villages Tribunal [2004] 1 Qd R 346 that that tribunal was capable of judicial review because its decisions were administrative in character. The parties also drew my attention to the useful recent discussion of the authorities by Daubney J in Medical Board of Queensland v Lip.[26]
- The applicant relied on a number of matters suggesting that the power being exercised in this case was administrative rather than judicial. They were summarised in their written submissions as follows:
“18.Pursuant to section 8 of the CCT Act, the Tribunal has jurisdiction to deal with the matters it is empowered to deal with under this CCT Act or an empowering Act. (Commercial and Consumer Tribunal Act 2003 (Qld), s 8(1)). The tribunal may do all things necessary or convenient to be done for exercising its jurisdiction. (Commercial and Consumer Tribunal Act 2003 (Qld), s 9(1)) It may elect to conduct a hearing to decide a matter within its jurisdiction. (Commercial and Consumer Tribunal Act 2003 (Qld), s 114(1) (emphasis added).) It is not bound to do so. This entitlement to elect to conduct a hearing shows that the decision making process is necessarily not judicial in nature. (Cf State of Queensland v Epoca Constructions Pty Ltd [2006] QSC 324; [33]) The power of the Court cannot be the exercise of judicial power where the tribunal is entitled to determine the matter without hearing the parties.
- What is telling is that the members of the Tribunal do not have to be legally qualified. The conclusion that follows is that the Tribunal is not required to act judicially.
- In addition, any hearing which is held is not required to be in public. That is a matter entirely at the discretion of the Tribunal. Although s 46 of the CCT Act dresses up the procedure of the Tribunal as if a Court, the absence of a requirement that the hearing be in public unless certain objective factors exist shows that the proceeding are not judicial.
- In the present case, the power being exercised was 'a power to make an order the tribunal considers to be just to resolve a retirement village issue' under section 191 (1) of the RV Act. (By section 50 of the Commercial and Consumer Tribunal Act, the Tribunal makes directions which are "just, fair, informal and cost efficient".) Significantly, there is no obligation to do "justice according to law" nor to hear and determine the matter "according to law" as a judge is required to do. It is also in contrast to the administrative power of the AAT to make the "correct or preferable" decision. (Administrative Appeals Tribunal Act 1975 (Cth), s 43)
- In so determining a matter (whether by a hearing or by electing not to have a hearing), the Tribunal is not bound by the rules of evidence and is able to inform itself of any matter as it sees fit. (Commercial and Consumer Tribunal Act 2003 (Qld), s 47(2).) The Tribunal can also decide matters of law according to its own opinion (even though the member is not legally qualified) and is therefore not bound by the decision of any Court in a hierarchical system; i.e. the District Court. These are not the procedures usually found in a judicial act.
- There is an absence of any direction by the legislation which requires that the Tribunal hear and determine matters according to law. In fact the contrary is true. The CTT Act provides that the tribunal is to act "with as little formality and technicality and with as much speed as the requirements of this Act and a proper consideration of the matters before the tribunal permit." (Commercial and Consumer Tribunal Act 2003 (Qld), s 47(3)) The reference to technicality would include the technical application of the law such that there is no imperative that any determination proceed in the manner of a judicial hearing.”
- There were many consideration relied on by the second respondents to support the conclusion that this was a judicial rather than an administrative decision. The tribunal can decide questions of law and an appeal lies to the District Court on such questions of law.[27] It is bound by the rules of natural justice, proceedings involve pleadings and the tribunal can make directions regarding the conduct of proceedings.[28] Parties may be legally represented in certain circumstances although the general rule seems to be that parties should appear in person or through a non-lawyer.[29] Hearings are generally open to the public.[30] It can summon witnesses and order the production of documents.[31]
- It can also take evidence on oath, punish for contempt by certifying the contempt in writing to this court and make orders, give directions and do whatever is necessary for the just, fair, informal, cost efficient and speedy resolution of the proceeding.[32] The parties are also bound to comply with the orders of the tribunal.[33] It must give written reasons for its final decisions and may make orders for costs.[34] It can also make orders in the nature of injunctions.[35] Under the Retirement Villages Act it is also required to make the orders that it considers to be just to resolve a retirement village issue.[36] There were other characteristics relied on for the conclusion that the tribunal’s function was judicial rather than administrative, including its members immunity from liability, that it has both original and review jurisdiction, that matters commenced in a court may be remitted to the tribunal and the provision in the Retirement Villages Act that, after an application about a retirement village issue under parts 9 or 10 is given to the Registrar, the issue must not be referred to arbitration or heard by any court.[37] The fact that members are appointed under the CCT Act rather than the Public Service Act 1996 was also relied on.[38] One of the more significant features of the tribunal’s Act is that a party may register a decision by the tribunal in the registry of a court of competent jurisdiction. When that is done the decision has for the purposes of enforcement the same force and effect as if it had been originally given as a judgment of the court entered on the day of registration.[39]
- The fact that the tribunal may be constituted by members who are not lawyers under s 11(4)(b) of the CCT Act, even if the member in this case was a lawyer, is an indication, but not a conclusive indication, that the decision is not one of a judicial character. That the decision may be registered in the District Court and take effect as a judgment of that Court is a very significant pointer in the other direction, namely that it should be treated as a judicial decision.[40] It allows it to be characterised as an enforceable decision reached by applying the relevant principles of law to the facts as found.[41] That its obligation is to be just rather than to do justice according to law does not seem to me to weaken that conclusion. It is called on to decide a controversy between parties as to the existence or not of present, mutual rights and obligations.[42]
- Those considerations seem to me to justify the conclusion that the decision was judicial in its nature but still capable of judicial review under Pt 5 of the Judicial Review Act. That an alternative to judicial review may exist in the right to apply for leave to appeal to the District Court does not preclude the jurisdiction of this court from being exercised.[43] The question that then arises is whether there has been an identified jurisdictional error and, if so, whether it is reviewable. The range of errors by inferior courts rather than true administrative tribunals that may be reviewed was defined restrictively by the High Court in Craig v State of South Australia in these terms:[44]
“An inferior court falls into jurisdictional error if it mistakenly asserts or denies the existence of jurisdiction or if it misapprehends or disregards the nature or limits of its functions or powers in a case where it correctly recognises that jurisdiction does exist. Such jurisdictional error can infect either a positive act or a refusal or failure to act. Since certiorari goes only to quash a decision or order, an inferior court will fall into jurisdictional error for the purposes of the writ where it makes an order or decision (including an order or decision to the effect that it lacks, or refuses to exercise, jurisdiction) which is based upon a mistaken assumption or denial of jurisdiction or a misconception or disregard of the nature or limits of jurisdiction.
Jurisdictional error is at its most obvious where the inferior court purports to act wholly or partly outside the general area of its jurisdiction in the sense of entertaining a matter or making a decision or order of a kind which wholly or partly lies outside the theoretical limits of its functions and powers.”
- That limited definition of jurisdictional error may not necessarily apply to what have been described as anomalous tribunals analogous to a court. If this were simply an administrative tribunal, of course, the reviewable jurisdictional errors would be considerably wider in scope.[45]
- Here the applicant’s submission was that the tribunal erred in law and acted unreasonably but also took into account irrelevant considerations by adopting its own views of the nature and extent of the infrastructure owned by the applicant and other retirement village operators without proper regard for the evidence. In its submission that error affected the conclusion particularly about the construction of the Act relying on the effect of the provisions dealing with quantity surveyors’ reports. That criticism seems valid to me and prima facie justifies this Court’s intervention as do the errors of construction of the legislation and the contracts that I have already identified.
- If this tribunal should be treated as completely analogous to an inferior court, the difficult question would arise whether this tribunal was entitled to be incorrect in deciding questions of law, a view adopted in respect of the State Administrative Tribunal in Western Australian by their Supreme Court in Re Carey; ex parte Exclude Holdings Pty Ltd.[46] There the Court took the view, having analysed the High Court’s decision in Craig v State of South Australia[47] that the tribunal had been specifically invested with the power to determine questions of law, that particular procedures had been designated for the determination of those questions by legally trained personnel and that an appeal lay on such questions. Its conclusion was that their parliament intended that the tribunal was to be given jurisdiction to determine questions of law wrongly, and that error of law would not, of itself, take the tribunal outside jurisdiction.
- The applicant here submitted that, as the tribunal was not required to hold a hearing, its members did not necessarily have to be legally qualified, although the member here was, and as no appeal lay on questions of law as a matter of right, that there were significant distinctions between this tribunal and that considered by the Western Australian Supreme Court. For that reason they submitted, that the tribunal was one that was amenable to judicial review and not restricted to review of the narrow range of jurisdictional errors identified in Craig.
- There seems to be a half-way house available discussed in Re Carey; ex parte Exclude Holdings Pty Ltd in these terms:
“[109] On the other hand, in my opinion, there is much to be said for the view that, properly analysed, the decision in Craig only mandates the classification of bodies into either inferior courts or administrative tribunals where that process is necessary to infer the extent of the body's jurisdiction to determine questions of law, so that the process of characterisation is unnecessary if the extent of the body's jurisdiction to determine questions of law appears from the express terms of the legislation creating it. This is the approach I take to be exemplified in the following passage from the decision of Phillips JA in Returned & Services League of Australia (Victorian Branch) Inc v Liquor Licensing Commission [1999] 2 VR 203 at 214:
‘In short, it seems to me that, though critical in some cases (as was recognised by the High Court in Craig at 179), the distinction between a court of law and a true administrative tribunal is essentially of importance only if and in so far as the nature of the one or the other sheds any light on deciding the intention of the Parliament in committing the task at stake to the body in question — and in particular whether that task includes not only the power to decide but also the power to decide wrongly (and whether on questions of fact or law) without attracting prerogative relief … In Australia legislative experience is so diverse that there must be a danger in relying too quickly upon presumption, and especially a presumption which depends upon the nature and function of the body in question, even if it is unquestionably a court of law.’
Charles and Buchanan JJA concurred in these views.”
- The approach discussed in Returned & Services League of Australia (Victorian Branch) Inc v Liquor Licensing Commission,[48] in the absence of a requirement that the members of the tribunal be lawyers, the existence only of a limited ability to seek leave to appeal, the presence of the general right of judicial review under Pt 5 of the Judicial Review Act in Queensland under a regime which allows that Act to prescribe enactments to which that Act does not apply and provides this Court with wide powers on the application for review under s 47, all lead me to the conclusion that the jurisdictional errors susceptible of review in this case are not sufficiently described by the passage from Craig applying to inferior courts. Rather they should extend to errors of law of the type I have identified earlier which include an error of law arising partly from the taking into account of irrelevant considerations.
Remedy
- In the circumstances it appears to me appropriate to quash the tribunal’s decision and make declarations in respect of the second respondents’ obligations under the residence contracts. Because of my view that the 1995 and 1998 contracts fall into a different category than the 2001 contracts because their PIDs exempted the residents from responsibility from paying costs associated with normal wear and tear, I would make different declarations in respect of the two sets of contracts. It seems to me that the tribunal’s conclusion that the replacement of anodes in hot water heaters fell within normal wear and tear was not so unreasonable as to require review of that conclusion.
- Accordingly, reserving the rights of the parties to make submissions about their terms, I would make the following orders:
- An order in the nature of an order of certiorari quashing the decision of the first respondent;
- Declare that, upon its proper construction, the Retirement Villages Act 1999 does not preclude the applicant and the second respondents from agreeing in residence contracts that the resident is to maintain, repair and replace items owned by the applicant and which were within or affixed to their accommodation unit.
- Declare that the applicant is not liable to pay from the maintenance reserve fund the outstanding amounts owed to Anode Technology on account of repairs of hot water systems in the accommodation units of those second respondents who are parties to the 2001 residence contracts who have not paid the relevant accounts.
- Declare that the applicant is not liable to reimburse from the maintenance reserve fund those second respondents who are parties to the 2001 residence contracts who have already paid the Anode Technology account.
- Declare that the applicant is liable to pay from the maintenance reserve fund the outstanding amounts owed to Anode Technology on account of repairs of hot water systems in the accommodation units of those second respondents who are parties to the 1995 and 1998 residence contracts who have not paid the relevant accounts.
- Declare that the applicant is liable to reimburse from the maintenance reserve fund those second respondents who are parties to the 1995 and 1998 residence contracts who have already paid the Anode Technology account.
Footnotes
[1] Power & Ors v Jomal Pty Ltd [2007] CCT VH003-07 at [23].
[2] Retirement Villages Act 1999 s 90.
[3] Retirement Villages Act 1999 s 91(1), (3). It is acknowledged that there are other purposes specified (the payment of surveyors and tax) however, they are not relevant to the present issue.
[4] Retirement Villages Act 1999 s 94(1)(c).
[5] Retirement Villages Act 1999 s 92(6).
[6] Retirement Villages Act 1999 s 97(1)(a).
[7] Retirement Villages Act 1999 s 97(4)(a), (b).
[8] Retirement Villages Act 1999 ss 20, 97(2).
[9] Retirement Villages Act 1999 ss 98, 99.
[10] Retirement Villages Act 1999 ss 102A, 103, Schedule definition ‘general services’.
[11] Power & Ors v Jomal Pty Ltd [2007] CCT VH003-07 at [24].
[12] Power & Ors v Jomal Pty Ltd [2007] CCT VH003-07 at [51(a)].
[13] Power & Ors v Jomal Pty Ltd [2007] CCT VH003-07 at [51(b)].
[14] Power & Ors v Jomal Pty Ltd [2007] CCT VH003-07 at [51(c)].
[15] Power & Ors v Jomal Pty Ltd [2007] CCT VH003-07 at [51(d)].
[16] Power & Ors v Jomal Pty Ltd [2007] CCT VH003-07 at [51(e)].
[17] Power & Ors v Jomal Pty Ltd [2007] CCT VH003-07 at [51(f)].
[18] Haydon v Kent County Council [1978] 2 All ER 97, 108-109.
[19] See Bermingham v Corrective Services Commission of New South Wales (1988) 15 NSWLR 292, 302.
[20] See s 91(3)(a).
[21] See Duperouzel v Cameron [1973] WAR 181, 182-183.
[22] See s 37.
[23] Power & Ors v Jomal Pty Ltd [2007] CCT VH 003-007 at [24].
[24] See John Burke Ltd v Insurance Commissioner [1963] Qd R 587; Webster v McIntosh (1980) 32 ALR 603, 606 and Scott v WorkCover Queensland [2000] QSC 414 at [34].
[25] Power & Ors v Jomal Pty Ltd [2007] CCT VH 003-07 at [31], [32], [43] and [49].
[26] [2007] QSC 271.
[27] Commercial and Consumer Tribunal Act 2003 s 98, s 100.
[28] Commercial and Consumer Tribunal Act 2003 s 47(2), s 31, s 32, s 38, s 50.
[29] Commercial and Consumer Tribunal Act 2003 s 76.
[30] Commercial and Consumer Tribunal Act 2003 s 46.
[31] Commercial and Consumer Tribunal Act 2003 s 77.
[32] Commercial and Consumer Tribunal Act 2003 s 77, s 81, s 87, s 50(1).
[33] Commercial and Consumer Tribunal Act 2003 s 50(4) and Retirement Villages Act 1999 s 197.
[34] Commercial and Consumer Tribunal Act 2003 s 91, s 71.
[35] Commercial and Consumer Tribunal Act 2003 s 108.
[36] Retirement Villages Act 1999 s 191(1).
[37] Commercial and Consumer Tribunal Act 2003 s 153, s 8, s 101, s 40(1), and Retirement Villages Act 1999 s 215(1).
[38] Commercial and Consumer Tribunal Act 2003 s 11(6).
[39] Commercial and Consumer Tribunal Act 2003 s 93.
[40] See Brandy v Human Rights and Equal Opportunities Commission (1995) 183 CLR 245, 268-269.
[41] Brandy v Human Rights and Equal Opportunities Commission (1995) 183 CLR 245, 258-259.
[42] Medical Board of Queensland v Lip [2007] QSC 271 at [46].
[43] See R v Brisbane City Council, ex parte Read [1986] 2 Qd R 22, 25.
[44] Craig v State of South Australia (1995) 184 CLR 163, 177.
[45] Craig v State of South Australia (1995) 184 CLR 163, 179; Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323, 339-340 [41], 352 [84].
[46] (2006) 32 WAR 501, 523 at [110].
[47] (1995) 184 CLR 163.
[48] [1999] 2 VR 203.