Lifestyle appeal refused

The Lifestyles appeal (discussed here) was dismissed by the Court of Appeal today. 

The Court of Appeal held that the provisions for calculating a Deferred Management Fee in the four Site Agreements before the Court did not comply with s 206S of the Residential Tenancies Act 1997 (Vic) because the Deferred Management Fee was calculated by reference to either the sale price of the home, or the average of all sale prices over the last year or the market value of the dwelling as determined by a valuer.  As a result, the amount of the Deferred Management Fee could not be determined even when the resident became liable to pay that fee, and the Site Agreements did not disclose the amount of that fee as required by s 206S(1)(b) of the RT Act.

Although the Court’s reasoning was different to the reasoning of Justice Woodward, who heard the original case while sitting as the President of VCAT, the outcome of the case was the same in that the Deferred Management Fees in those Site Agreements are not payable.

While the case only considers the four Site Agreements that were before the Court, those four Site Agreements were put forward as a form of test case and, in the absence of a successful appeal to the High Court, the Court of Appeal’s decision is expected to stand as a precedent for all site agreements that adopt that format for calculating a Deferred Management Fee.  The usual time period for an appeal from the Court of Appeal to the High Court is 28 days.

I have been contacted by a number of people who are concerned about whether they will be required to pay a Deferred Management Fee under their site agreements or who are interested in recovering a Deferred Management Fee paid in the past.  If you would like further information about those issues, please contact the residents’ group in VCAT and the Court of Appeal at dmfenquiries@gmail.com

For those who are interested in the Court of Appeal’s reasoning, a copy of the decision is available here.

Sam Hoper SC and Eli Fryar