If a park owner proposes to increase the site rent based on a market review specified in the site agreement, Section 69D of the Manufactured Homes (Residential Parks) Act 2003 (Qld) (Act) provides:
“(2) At least 63 days before the next general increase day for the site, the park owner must consult with, or arrange for a registered valuer to consult with, the interested entities for preparing a written valuation for the market review of site rent (a market valuation).”
In Hammond Village Operations Pty Ltd v Richard Homans & Ors [2023] QCATA 142, the Queensland Civil and Administrative Appeal Tribunal (Appeal Tribunal) considered the issue of whether a failure to consult in accordance with Section 69D(2) meant that the site rent increase was automatically invalid. Anthony Pitt, Partner at HopgoodGanim Lawyers, appeared for the park owner and argued the case on appeal.
At first instance, the Tribunal decided that there was a failure to consult under Section 69D(2) because the park owner invited all home owners to a morning tea at which one of the agenda items was the forthcoming market review. While there was evidence of the invitation to this event and the fact that approximately 120 home owners, including some members of the homeowners committee, attended, there was no evidence of any specific invitation to the committee or as to any quorum of the committee being present.
The Tribunal then decided that compliance with Section 69D(2) was mandatory, such that a failure to consult meant that the site rent increase is invalid and must be set aside.
Notably, the Tribunal considered all other aspects of the case and found in favour of the park owner, including that the Tribunal accepted the registered valuer’s evidence of the market rent. The site rent increase was set aside for the sole reason of failing to consult.
The park owner appealed the decision to the Appeal Tribunal and obtained a stay of the Tribunal’s decision at first instance. The basis of the appeal was that the Tribunal made an error of law in finding that the failure to consult meant that the site rent increase was invalid.
In this regard, it was argued that the Tribunal’s approach failed to consider the Act as a whole and, in particular, did not consider the Tribunal’s powers under Section 70A of the Act, which relevantly provides:
“(2) The tribunal may appoint an appropriately qualified and independent registered valuer to help the tribunal in relation to the application including, for example, by—
(a) giving the tribunal a written valuation for a market review of site rent; or
(b) giving expert evidence in a proceeding for the application.
(3) The tribunal may appoint a valuer under subsection (2) if satisfied—
(a) at least 1 of the following applies—
(i) consultation for preparing a market valuation for the market review of site rent was not carried out as required under section 69D or was not adequate;
… and
(b) for a general increase
notice for the same general increase day given to the home owners for at least
5 sites in the residential park (the notified sites)—the home owners for the
threshold number of the notified sites have applied to the tribunal under
section 70(3).”
The park owner argued that while Section 69D(2) was expressed in mandatory terms due to the use of the word “must”, Section 70A allowed such an invalidity to be remedied in certain circumstances, and that the Tribunal should have considered Section 70A (which it did not do) before setting aside the increase.
The Appeal Tribunal agreed with the park owner’s arguments and stated that “it ought to have been considered by the Tribunal whether on the valuation evidence it accepted the invalidity could be remedied or, alternatively, to seek further independent valuation evidence and submissions from the parties” and that “the Tribunal fell into appellable error in not considering the engagement of s70A of the Act and how the Tribunal’s discretion thereunder was to be exercised”.
As a result, the Appeal Tribunal allowed the appeal and remitted the matter back to the Tribunal for hearing and consideration as to the matters relevant to Section 70A of the Act.