VCAT Opens Door to $500k Land Lease Utilities Claim

The latest VCAT ruling has paved the way for a water company to take a developer to tribunal over utilities bills at a land lease development it said went unpaid for five years. Aviva Communities owned a retirement community at 1-31 Furness Street in Victoria’s Kangaroo Flat, 5km from Bendigo CBD and 145km north of Melbourne CBD. It was acquired by Spring LP T12 Pty Ltd in 2022, and both are listed as respondents in the Victorian Civil and Administrative tribunal (VCAT) case. The latter is associated in ASIC documents with directors Ben Hindmarsh and Nick Collishaw, the director and chairman respectively of land lease retirement community developer and operator Lincoln Place. Bendigo land lease community The Kangaroo Flat estate in question has around 200 self-contained, detached homes, according to Coliban Water, a north-central Victorian water authority. The estate owners and developers attended VCAT last month for a case which decided whether Coliban Water could take Aviva and Lincoln Place to tribunal over a massive utilities bill Coliban Water claimed they had racked up. The water authority said that as of August 2023, the water and sewerage fees imposed under a tariff for separate occupancies, totalled $493,001.23, having been accrued since July 2019. ▲ Lincoln Place has been upgrading the Kangaroo Flats development since it acquired the project from Aviva in 2022. By February 2024, it said, unpaid fees in total were $543,724.55. Coliban Water is seeking a declaration that it is entitled to impose the fees on Aviva and Lincoln Place. It also wants to have each home on the estate recognised as a separate occupancy. This changes how the authority can charge its tariffs for the same parcel of land, in comparison to grouping them together, and could have implications for retirement, land lease communities, build-to-rent and even student living. Latest VCAT hearing The early-stage VCAT hearing concerned an application by Lincoln Place and Aviva for a summary dismissal of the case, saying that the tribunal lacked jurisdiction to consider Coliban Water’s application because it did not have the power to take others to tribunal. However, VCAT ruled against the developers and estate operators in a determination that should have developers sitting up and taking note. The interlocutory ruling was an interesting move by VCAT and may have opened the door for other water authorities to consider the tribunal route, according to Holding Redlich partner Andrew Iser. ▲ Holding Redlich partner Andrew Iser. “Rather than a final decision by VCAT, this is an interim decision to get to the final outcome,” Iser said. “Coliban Water sought a declaration that they can pursue these debts, and Aviva has tried to stop that by arguing that VCAT has no jurisdiction to grant the declarations. “[They are arguing that this is] because Coliban Water was not a person for the purposes of the Water Act and separately, because the subject matter of the declarations was not something that could be the subject of a proceeding. “You can’t just go to a court or VCAT and say, I’d like a decision about anything, a declaration for example, that blue is the best colour. “But if it’s something that could be the subject of a dispute, you might want a declaration on a discrete issue to set up a coming dispute.” The case Aviva and Lincoln Place attempted to stop the declarations being made by saying VCAT had no jurisdiction and the subject matter of the declarations could never be brought as the subject matter in litigation. “But the tribunal, however, disagreed in two key respects,” Iser said. “The tribunal said that just because Coliban Water is a water authority doesn’t mean it’s not also a person, who can sue and be sued. This means that Coliban Water is an entity which can bring litigation under the Water Act. “Secondly, VCAT said that because they’re not just an authority, they are also a person, the dispute around money owing could be brought in litigation, and Coliban Water would have standing to bring it to the tribunal. “What’s going to be interesting is to what extent Aviva and all of these individual lots, all the individual lots covered within this estate are going to be liable to pay all of these bills dating back several years. “We don’t know the answer to that question, but what we do know from this decision is that this question can be asked,” Iser said. Lasting implications This, however, poses more than just an interesting procedural question. “VCAT rejected Aviva’s narrow approach to identifying the status of the water authority,” Iser said. “So the tribunal has, by holding that it is an entity which can sue and be sued, unlike something like a trust fund, possibly teased open the door to any other water authority considering how they might approach future litigation.” Lincoln Place chief executive Paul Yeo said that given the matter is currently in proceedings, he could not provide any further comment. “This is a legacy matter that we inherited from the previous community operator, and we have been actively seeking a resolution for a number of years,” Yeo said. Coliban Water said it would not comment while the matter is before the tribunal.

VCAT Opens Door to $500k Land Lease Utilities Claim

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