e declined in respect of one claim for refund - whether fair and just in the exercise of the Tribunal's discretion
Legislation Cited: Retirement Villages Act 1999
Retirement Villages Regulation 2009 (repealed)
Retirement Villages Regulation 2017
Civil and Administrative Tribunal Act 2013
Cases Cited: Armee v Brealey [2017] NSWCATAP 141
Category: Principal judgment
Parties: David Au & Joseph Briffa (Applicants)
Freedom Aged Care Fairways Operations Pty Ltd trading as Freedom Aged Care Tweed Heads (Respondent)
Representation: Applicants - David Au (on behalf of both applicants)
Respondents: Simon Brodie & Douglas Borrows
File Number(s): RV 17/29869
Publication restriction: Unrestricted
[2]
OVERVIEW
By this application lodged with the Tribunal on 5 July 2017, the applicants, who are residents of "Freedom Fairways" Retirement Village, Tweed Heads New South Wales (the "Village"), seek orders in or to the effect that variations to General Services Recurrent Charges (hereinafter referred to as "recurrent charges") made by the respondent as Operator of the Village, on or about 1 June 2016 and 1 April 2017, respectively, are invalid and of no effect.
In addition, the applicants seek an order, pursuant to s 109 of the Retirement Villages Act 1999 NSW (the "RV Act") directing the respondent Operator to refund overpaid recurrent charges. As such application for refund is made by this application lodged on 5 July 2017 in respect of a variation of recurrent charges which took effect on 1 June 2016 (i.e. outside the 12 month period as required by s 109(3) of the RV Act), a further issue arises as to whether the time within which this application insofar as it relates to an order under s 109 of the RV Act in respect of the increase of recurrent charges taking effect on 1 June 2016, may be extended to 5 July 2017, pursuant to the Tribunal's discretion in s 41 of the Civil and Administrative Tribunal Act 2013 NSW (the "NCAT Act").
A particular complaint of the applicants is that the variations in the recurrent charges were not made in accordance with CPI; that is, by reference to the Consumer Price Index (All Groups) for Sydney as published by the Australian Bureau of Statistics.
The Tribunal has had regard to the sworn evidence of the applicant, Mr Au, and also to the sworn evidence of the respondent's representatives, Mr Brodie and Mr Borrows. Further, the Tribunal has considered the parties' written submissions and supporting documents as well as the parties' oral submissions at the formal hearing. The Tribunal determines that the Village Contracts made pursuant to the RV Act between the applicants as residents and the respondent as Operator permit the Operator to vary the recurrent charges payable by the applicant residents otherwise than in accordance with a fixed formula and also allow for variations to exceed the prescribed CPI Variation for the purposes of s 102A of the RV Act.
However, the Tribunal further determines for reasons other than those advanced by the applicants in their written submissions, that the variations to the recurrent charges made by the Operator are invalid and of no effect. In essence, such finding arises because the Tribunal is not satisfied on the evidence before it for this application that the procedures mandated by the RV Act (see, in particular, sections 104, 106 and 107) and the Retirement Village Regulation 2009 NSW as then in force (see, in particular, the requirements of Regulation 24) were followed by the Operator in respect of the variations purporting to take effect on 1 June 2016 and 1 April 2017, respectively.
The Tribunal's reasons for these determinations are more particularly set out in the following paragraphs.
[3]
THE NATURE OF THE APPLICANTS' CLAIM
The applicants argue that the increase in recurrent charges from $114.00 per week to $141.00 per week was 'unjustifiable' in circumstances where the increase was 24%, while the CPI increase was less than 1.5%. The applicants submit that the Operator has not complied with the RV Act, and that any variation of recurrent charges for the Village should be in accordance with CPI only.
The applicants also press their claim for a refund to residents of the Village of all overpaid recurrent charges: see s 109 of the RV Act.
The applicants further submit that there has been an absence of transparency by the Operator in respect of the information provided to residents about the need for increases in the recurrent charges (see, in particular, the submissions under section 9 of the applicants' written submission at pages 13 to 16).
The applicants further point out that in the events which occurred the Operator did not comply with s 118 of the RV Act by providing quarterly accounts and obtaining the residents' consent to the appointment of an auditor of the Village accounts.
[4]
FACTUAL BACKGROUND
The Village consists of a three storey complex with 72 independent living units, common, leisure and service areas, hard standing visitor parking, soft landscaping and all services to and from the buildings.
The common property consists of communal/community, allied health and service areas and all exterior elements to the buildings complete with all exterior fittings and fixtures, driveways, car parking, landscaping and all services to and from the buildings.
In or about June 2015, the respondent purchased the Village and its facilities from a prior Operator.
There were no variations or terminations of existing resident agreements (i.e. Leases and/or Village Contracts). The Tribunal is satisfied that the respondent complied with s 29 and s 40 of the RV Act.
The respondent purchased the Village and its facilities in circumstances where the respondent knew that the prior Operator was running significant deficits and underspending on maintenance. This is supported by the financial statements of the Village for the financial years ended 30 June 2011, 2012 and 2013, respectively.
[5]
SUMMARY OF THE RESPONDENT'S POSITION
The respondent says that it was entitled under the Leases and Village Contracts with each resident of the Village (including the applicants) to increase recurrent charges otherwise than in accordance with a fixed formula and in amounts exceeding CPI.
It further submits that there was an imperative for it to increase recurrent charges as such charges are cost recovery only. Recurrent charges that fund general services (including maintenance) provided to the Village but at below cost brings the consequence that the Operator has to subsidise (out of its profit margin) any shortfall between the cost of providing the services to residents of the Village and the recurrent charges the Operator collects from the residents. It took the view that if it operated the Village at such deficits as prevailed under the prior operator this would not be sustainable in the long term.
The respondent argues that it acted in good faith at all material times in that it provided information (including budgets, financial statements and reports as regards the ongoing maintenance requirements of the Village) to residents and that it met with residents on a number of occasions commencing on 3 September 2015 and culminating in a vote of residents in April 2016 which produced a result of 43 residents in favour of the increase from $114.00 per week to $141.00 per week and 5 residents (including the applicants) opposed. The respondent submits that this was a genuine attempt to return the Village to a 'break even' status and that it has acted reasonably in all the circumstances.
The respondent concedes that the second increase (i.e. from $141.00 per week to $143.80 per week, taking effect in April 2017) was otherwise than in accordance with the RV Act, because the RV Act does not allow two increases of recurrent charges within a twelve month period: see s 104(2).
The respondent also concedes that it did not comply with s 118 of the RV Act by providing to residents quarterly accounts as and when required and obtaining the consent of residents to its appointment of an auditor of the Village accounts
At the time when the respondent purchased the Village and facilities from the prior operator, unaudited profit and loss accounts for the ten month period from 1 July 2014 to 30 April 2015 disclosed a loss from ordinary activity before income tax of $234,154.00 (see appendix 8 of the respondent's documents).
[6]
JURISDICTION
The Tribunal's jurisdiction to hear and determine the matters in dispute on this application is contained in the RV Act and the Regulations made under the RV Act including the Retirement Village Regulation 2009 (RVR 2009) as then in force. Where a dispute arises between a resident or residents and the operator of a retirement village, the parties may apply to the Tribunal for an order in respect of the dispute: s 122 of the RV Act.
The range of orders which the Tribunal may make include: an order directing compliance with the RV Act or the Regulations made pursuant to the RV Act, an order for payment of an amount of money, an order for compensation and an order directing performance of work or to remedy a breach of a village contract or a village rule: s 128 of the RV Act. The Tribunal may make ancillary orders (s 126 of the RV Act) and there is no monetary limit on the Tribunal's jurisdiction: s 127 of the RV Act.
[7]
RELEVANT LEGISLATIVE PROVISIONS
The legislative scheme regulating any retirement village dispute facilitates the provision of social benefits and standards as regards the living arrangements for retired persons. Further, the legislative scheme also recognises the potential financial and other possible vulnerabilities of retired persons. In this regard the scheme contains significant elements of consumer protection: Hansard, Retirement Villages Bill 1999, Second Reading.
Nevertheless, the social policy behind the legislative scheme does not seek to impose an unfair burden on operators of retirement villages, as it recognises that the business of providing facilities for retired persons should be permitted to be profitable for operators: Hansard, Retirement Villages Bill 1999, Second Reading. This is manifested in legislative requirements which focus upon the obligation of residents to pay for certain defined categories of expenditure which are incurred by operators, subject to compliance by operators with particular information answering, reporting, auditing and other processes as identified in the RV Act and the Regulations made pursuant to the RV Act.
The objects of the legislation as set out in s 3 of the RV Act are to set out particular rights and obligations of residents and operators of retirement villages; to facilitate resident input, where desired by residents, into the management of retirement villages; to establish appropriate mechanisms for the resolution of disputes between residents and operators of retirement villages; and to encourage the retirement village industry to adopt best practice management standards
A recurrent charge means any amount (including rent) payable under a village contract, on a recurrent basis, by a resident of a retirement village (s 4).
Where an operator of a retirement village seeks to vary recurrent charges otherwise than in accordance with a fixed formula and in an amount which exceeds CPI there are particular requirements set out in Part 7 Division 4 of the RV Act.
CPI is defined in s 4 of the RV Act as follows:
"Consumer Price Index" means the Consumer Price Index (All Groups) for Sydney as published by the Australian Statistician."
A prescribed CPI variation in recurrent charges is defined (s 102A) as follows:
(1) In relation to a proposed variation in recurrent charges that is the first variation under a village contract, the "prescribed CPI variation" is, for the purposes of this Division, the variation that would result from the recurrent charges being increased in proportion to the difference between:
(a) the Consumer Price Index published most recently before the village contract was entered into, and
(b) the Consumer Price Index published most recently before the written notice of the proposed variation is given,
rounded to the nearest dollar.
The RV Act in s 104 makes specific provision for variation of recurrent charges by operators as follows:
(1) A village contract may provide that any recurrent charges payable under it:
(a) are to be varied at specified intervals (or on specified dates) according to a fixed formula (for example, in proportion to variations in the Consumer Price Index), or
(b) may be varied otherwise than according to a fixed formula.
(2) If a village contract provides for any recurrent charges payable under it to be varied otherwise than according to a fixed formula, the recurrent charges must not be varied more than once in any 12 month period. Any second or subsequent purported variation within that 12 month period is of no effect.
(3) A village contract must not provide for more than one method of variation of the recurrent charges payable under it.
(4) If a village contract provides for more than one method of variation of recurrent charges in contravention of subsection (3), the method that results in the lowest increase in recurrent charges is the applicable method.
As regards a variation otherwise than in accordance with a fixed formula and exceeding CPI (in accordance with s 104(1)(b) of the RV Act), the relevant provision is s 106, which states:
(1) This section applies to a variation of recurrent charges payable under a village contract if:
(a) the contract provides that recurrent charges are to be varied otherwise than in accordance with a fixed formula, and
(b) the variation exceeds the prescribed CPI variation.
Note: A provision to the effect that recurrent charges may be varied by "up to" a certain percentage is an example of such a provision.
(1B) The operator of a retirement village must give the resident concerned notice in accordance with this section at least 60 days before any proposed variation.
(2) The notice must:
(a) specify the amount of the proposed recurrent charges, and
(b) specify the date from which it is intended that the proposed recurrent charges are to be payable, and
(c) contain a brief explanation of the reasons for the proposed variation exceeding the prescribed CPI variation or the prescribed rate or amount (if any), and
(c1) include details of any action taken to minimise the proposed variation in recurrent charges, and
(d) state that the variation will not take effect unless the residents concerned consent to the variation or the Tribunal orders that it take effect, and
(e) contain such other information as may be prescribed by the regulations.
(3) A notice given under this section may be cancelled by a later notice or a later notice may provide for a lesser increase than the increase specified in the earlier notice.
(4) For the purposes of the date from which the proposed variation is to take effect, a later notice is taken to have been given on the date on which the earlier notice was given.
(5) However, the period of 30 days specified in section 107 (2) commences, in relation to a later notice, on the date on which the later notice is actually given.
(6) An operator who is the operator of more than one retirement village must deal with each village separately under this section.
In s 107 of the RV Act, there are further requirements for residents' consent to a s 106 variation, as follows:
(1) A variation does not take effect under section 106 unless:
(a) the residents whose recurrent charges will be affected by the variation consent to the variation, or
(b) the Tribunal orders under section 108 that the variation take effect.
(2) The residents concerned must, within 30 days after receiving a notice under section 106:
(a) meet, consider and vote on the proposed variation, and
(b) advise the operator that they consent, or do not consent (as the case may be) to the variation.
(3) If the operator is not advised as required by subsection (2) (b), the residents are taken to have refused consent to the variation.
(4) The operator must provide such information in relation to the proposed variation as the Residents Committee (or, if there is no Residents Committee elected for the village, any resident) reasonably requests for the purpose of deciding whether consent should be given to the variation.
(5) If the operator of a retirement village fails to provide information requested under subsection (4) within the time prescribed by the regulations, the Residents Committee (or a resident of the retirement village) may apply to the Tribunal for (and the Tribunal may make) an order requiring the operator to provide the residents with the information specified in the order.
(6) The regulations may prescribe:
(a) the period within which information requested under subsection (4) must be provided, and
(b) information that the operator of a retirement village is not required to provide despite a request under subsection (4).
There is provision (in s 108) for applications to the Tribunal in the event that residents do not consent to a proposed variation, as follows;
(1) An operator of a retirement village may apply to the Tribunal for (and the Tribunal may make) an order in respect of a proposed variation of recurrent charges if:
(a) the consent of the residents of the retirement village is required before the proposed variation can take effect, and
(b) the residents do not consent to the proposed variation under section 107.
(2) The Tribunal may, on application by the operator:
(a) order that the proposed variation is to take effect, with or without modification, or
(b) order that the proposed variation is not to take effect.
(3) An order under subsection (2) (a) may:
(a) specify the date from which the variation is to take effect (which may be a date other than the date specified by the operator in the notice given under section 106), and
(b) order that the recurrent charges are not to be further varied for a specified period, being a period that does not exceed 12 months.
(4) In determining an application made under this section, the Tribunal may have regard to the following:
(a) the general market level of recurrent charges paid at similar retirement villages in the locality of the retirement village concerned or a similar locality,
(b) the level and cost of services and facilities provided for in the proposed annual budget or approved annual budget (as the case may be),
(c) any proposed variations (including additions) to those services and facilities, being variations to which the residents have consented,
(d) the cost of general services required to be provided by the operator,
(e) the frequency and amount of past variations of the recurrent charges,
(f) if the retirement village is subject to a community land scheme or strata scheme--the amounts of levies and other contributions payable by the residents under the Community Land Management Act 1989 or the Strata Schemes Management Act 2015,
(g) any other relevant matter.
In the event that recurrent charges come into effect otherwise than in accordance with Division 7 Part 4 of the RV Act, there is provision (s 109) for residents to apply to the Tribunal for a refund of 'overpaid' recurrent charges subject to a time limitation:
(1) A resident of a retirement village may apply to the Tribunal for an order directing the refund of overpaid recurrent charges on any grounds, including the ground that an increase in the charges came into effect otherwise than in accordance with this Division.
(2) The Tribunal may make an order directing a refund of all such overpaid recurrent charges.
(3) An application under this section must be lodged no later than 12 months after the increase in the charges came into effect.
The Retirement Village Regulation 2017 ("RVR 2017") came into effect on 1 September 2017 (Reg 2 of RVR 2017). RVR 2017 repeals RVR 2009; however, there is a saving provision for RVR 2009 so that any act, matter or thing that, immediately before the repeal of RVR 2009, had effect under that Regulation, continues to have effect: see Reg 53 of RVR 2017.
Therefore, Regulation 24 of the RVR 2009 applies as regards the content required for Notices under s 106 of the RV Act, as follows:
For the purposes of section 106 (2) (e) of the Act, a notice of variation of recurrent charges given under section 106 of the Act must include the following:
(a) the name of the resident and the address of the residential premises concerned,
(b) the following statement as the first line of the notice and in at least 14 point bold Arial font:
This is a notice of a variation of recurrent charges (otherwise than in accordance with a fixed formula). The increase in those charges exceeds the increase in the Consumer Price Index (
(c) the following statements:
(i) you are not required to pay any increase in your recurrent charges unless this notice complies with the requirements of section 106 of the Retirement Villages Act 1999 and any regulations made under that section,
(ii) any increase in recurrent charges cannot commence until at least 60 days after this notice is received by you,
(iii) this notice may be cancelled by a later notice and the later notice may provide for a lesser increase than any increase specified in this notice,
(iv) the operator of the village must not increase (or attempt to increase) the recurrent charges beyond any upper level specified in the relevant village contract,
(v) the variation in the charges does not take effect unless the residents whose recurrent charges will be affected by the variation consent to it (or the Tribunal orders that the variation take effect),
(vi) the residents concerned must, within 30 days after receiving the notice, meet, consider and vote on the proposed variation and advise the operator whether or not they consent to it,
(vii) if the operator is not advised one way or the other within that 30 day period, the residents are taken to have refused consent,
(viii) the operator must provide such information in relation to the proposed variation as the Residents Committee (or, if there is no such Committee established in the village, any resident) reasonably requests for the purpose of deciding whether consent should be given to the variation,
(ix) if the residents do not consent to the proposed variation the operator may apply to the Tribunal for an order in respect of the proposed variation,
(x) you may apply to the Tribunal for an order directing the refund of overpaid recurrent charges on the grounds that an increase in the charges came into effect otherwise than in accordance with Division 4 of Part 7 of the Retirement Villages Act 1999 (which includes section 106),
(xi) any application for such an order must be lodged no later than 12 months after the increase came into effect,
(d) the signature of the operator of the retirement village (or an agent or employee of the operator) and the date of that signature.
Further, the provision for s 106 notices in RVR 2017 (i.e. in respect of increases in recurrent charges taking effect on or after 1 September 2017) is as follows:
For the purposes of section 106 (2) (e) of the Act, a notice of variation of recurrent charges given under section 106 of the Act must include the following statement as the first line of the notice:
This is a notice of a variation of recurrent charges (otherwise than in accordance with a fixed formula). The increase in recurrent charges does not take effect until at least 60 days after the date of this notice. The increase in those charges exceeds the increase in the Consumer Price Index (
For more information about your rights and responsibilities under the retirement village laws contact NSW Fair Trading by visiting www.fairtrading.nsw.gov.au or calling 13 32 20.
[8]
CONSIDERATION - OPERATOR'S CONTRACTUAL ENTITLEMENT TO VARY RECURRENT CHARGES OTHERWISE THAN IN ACCORDANCE WITH A FIXED FORMULA & IN AN AMOUNT EXCEEDING CPI
The Tribunal finds that the Operator is entitled under the Leases and Village Contracts with the applicants to vary recurrent charges otherwise than in accordance with a fixed formula and in amounts exceeding CPI.
The Operator's contractual entitlement in this respect is to be found in Clause 10.2(a) of the Leases which provide that recurrent charges can be varied in accordance with s 106 of the RV Act. Consistent with the requirements of s 106, the clause in the Leases (clause 10.2(c)) further states that the amount of the recurrent charges cannot be varied unless affected residents consent to the variation as required by the RV Act or the Tribunal orders (under s 108) the variation to take effect.
Further, the Village Contract for the applicant, Mr Briffa, specifically provides in Item E for Variation of recurrent charges on the basis of a 'non-fixed formula' which states:
"We may vary the amount of recurrent charges payable from time to time (no more than once in a 12 month period):
(a) By giving you 14 days' notice in writing, if the increase does not exceed the variation in CPI, or
(b) By giving you at least 60 days' notice in writing and seeking and obtaining the consent of residents affected by the proposed increase or an order of the Tribunal, if the increase exceeds the variation in CPI".
The Tribunal accepts that these provisions in the Leases and the Village Contract with Mr Briffa, respectively, are entirely consistent with the statutory provisions as set out above in respect of increases in recurrent charges otherwise than in accordance with a fixed formula and where the amount of the increase exceeds the CPI.
The real issue for the Tribunal's determination on this application is whether the increase in recurrent charges, which came into effect on 1 June 2016, was made in accordance with the RV Act and the Regulations made under the RV Act. There is no doubt that the second increase in recurrent charges (which was made in April 2016) was ineffective because it was, in contravention of s 104(2) of the RV Act and the provisions in the Leases and the Village Contract with Mr Briffa, a further increase in recurrent charges made within a 12 month period.
[9]
CONSIDERATION - WHETHER THE OPERATOR'S VARIATIONS ON 1 JUNE 2016 COMPLES WITH THE REQUIREMENTS FOR VARIATIONS MADE UNDER S 106 OF THE RV ACT
The Tribunal is not satisfied that there has been compliance with the provisions required as regards a Notice under s 106 of the RV Act and the Regulations made pursuant to the RV Act.
The Tribunal does not accept the Operator's argument that the series of communications during the period from in or about September 2015 to in or about April 2016 (including meetings and correspondence with residents) and which is more particularly set out in the Chronology of Events put in Sections 4, 5, 6 & 8 of the respondent's written submissions, establishes compliance with the requirements as to content of notices under s 106 of the RV Act, particularly the requirements as set out in Reg 24 of RVR 2009.
The consequence of this finding is that the increase purporting to take effect on 1 June 2016 is invalid and of no effect.
[10]
THE APPLICANTS' APPLICATION FOR AN EXTENSION OF TIME IN RESPECT OF AN ORDER DIRECTING A REFUND OF OVERPAID RECURRENT CHARGES UNDER S 109 OF THE RV ACT
The applicants seek orders of the Tribunal which direct the Operator to refund overpaid recurrent charges which were made by residents otherwise than in accordance with the RV Act.
There is no doubt that there should be an order directing a refund in respect of the second increase taking effect in April 2017. This application was brought within the 12 month period specified in s 109(3) of the RV Act. It was also made within 12 months of the first increase and therefore ineffective by reason of s 104(2) of the RV Act.
However, the application by the applicants for a refund in respect of the increase made on 1 June 2016 is out of time (i.e. it was made more than 13 months after that increase purported to take effect).
Accordingly, the Tribunal has to consider whether this is an appropriate case to exercise its discretion to extend time: see s 41 of the NCAT Act. The discretion in s 41 is wide and unfettered but it must be exercised judicially. As the Appeal Panel recently highlighted, for an applicant to obtain an extension of time he must show that it is fair and just for the extension to be given: Armee v Brealey [2017] NSWCATAP 141 at [138]. Matters relevant to the exercise of the Tribunal's discretion under s 41 of the NCAT Act include the reasons for the delay in bringing the application, the prejudice to the applicant if the extension is not granted, the prejudice to the respondent if an extension is granted and the applicant's prospects of success if leave is granted.
An order under s 109 of the RV Act is discretionary. This is indicated by the use of the word 'may' in s 109(2). The Tribunal has found that the increase of recurrent charges purporting to come into effect on 1 June 2016 was otherwise than in accordance with Division 7 of Part 4 of the RV Act; however, it does not necessarily follow that the Tribunal must make an order directing a refund by the Operator.
In the Tribunal's determination, the applicants could have lodged an application for refund under s 109 of the RV Act on or before 31 May 2017. It is plain on the evidence that as early as April 2016 the applicants opposed the increase; i.e. they were among the 5 residents who did not consent to an increase in recurrent charges from $114.00 per week to $141.00 per week. The evidence at the hearing clearly established the applicants held the view at the time of the increase that the increase in recurrent charges from $114.00 to $141.00 did not comply with the RV Act because the 24% increase demonstrably exceeded CPI. Even if it is accepted that the applicants were not aware of the time limitation contained in s 104(2) of the RV Act, the Tribunal is not persuaded that there is sufficient explanation for the applicants' failure to bring proceedings for a refund within 12 months.
The Tribunal further observes that any order it makes directing a refund of overpaid recurrent charges is for the benefit all residents of the Village. The Tribunal is satisfied on the evidence brought by the Operator at the hearing that a sufficient number of residents (i.e. 43 in favour, 5 not in favour) indicated their 'consent' within the meaning of the RV Act (see s 9) to the increase from $114.00 to $141.00. It would be a strange result if such residents who had indicated their consent some 18 months ago were now afforded the benefit of a refund of charges which they had previously accepted should be paid. The Tribunal is satisfied that the funds collected by the Operator from residents since 1 June 2016 by way of increased recurrent charges have been used for necessary general services (including maintenance) to the benefit of all residents of the Village including the applicants.
The Tribunal is also satisfied that the Operator acted in good faith at all material times and that its actions in increasing the recurrent charges in June 2016 were directed by an imperative of ensuring that the Village and its facilities are properly and adequately maintained and that the Operator is as far as is reasonably practicable able to 'break even' on its recovery of general services (including maintenance) costs. The Tribunal's finding that the increase which purported to take effect on 1 June 2016 is invalid and of no effect arises not because of any impropriety or 'sharp practice' by the Operator; but rather because the Operator did not comply with all of the mandatory requirements as to the content of notices for the purposes of s 106 of the RV Act and RVR 2009.
In the circumstances, the Tribunal finds that the prejudice to the Operator (i.e. being required to refund over $110,000.00 to all residents of the Village) outweighs any prejudice to the applicants by refusing their application to extend time for relief by way of refund under s 109 in respect of the first increase.
The Tribunal, therefore, declines to extend time under s 41 of the NCAT Act in respect of the application for refund in respect of the first increase. The Tribunal notes that the intent of its findings is that the Operator will immediately reinstate recurrent charges for all residents at $114.00 per week pending the residents' consent to any increase in accordance with the requirements of the RV Act or in the absence of that consent, by order of the Tribunal.
[11]
ORDERS
The orders of the Tribunal are:
1. Declare that the Contracts made between the applicants as residents of 'Freedom Fairways' Retirement Village, Tweed Heads New South Wales (the Village) and the respondent as the Operator of the Village permit the Operator to vary the General Services Recurrent Charges (hereinafter referred to as 'recurrent charges') otherwise than in accordance with a fixed formula and exceeding the prescribed CPI Variation.
2. Declare that in the events which occurred the variations to the recurrent charges made by the respondent Operator as follows:
1. from $114.00 per week to $141.00 per week and purporting to take effect as of 1 June 2016; and
2. from $141.00 per week to $143.80 per week and purporting to take effect as of 1 April 2017;
came into effect on those dates otherwise than in accordance with Division 4 of Part 7 of the Retirement Villages Act 1999 NSW (the RV Act) and the Retirement Villages Regulation 2009 NSW as then in force.
1. Declare that the variations of the recurrent charges made by the respondent Operator on or about 1 June 2016 and 1 April 2017, respectively, and as referred to in paragraphs 2(a) and 2 (b) above, are invalid and of no effect.
2. Declare that the recurrent charges payable by each resident of the Village on and from 1 June 2016 are $114.00 per week, until any other variations take effect either in accordance with the procedure mandated by Part 7 Division 4 of the RV Act, or by order of the Tribunal pursuant to s 108 of the RV Act.
3. Within twenty eight (28) days of the date of these orders, order that pursuant to s 109 of the RV Act, the respondent Operator is to refund to each resident of the Village such amount of overpaid recurrent charges as relate to the increase in recurrent charges from $141.00 per week to $143.80 per week (purporting to take effect as of 1 April 2017).
4. In respect of the increase in recurrent charges from $114.00 per week to $141.00 per week (purporting to take effect as of 1 June 2016), the Tribunal declines to make any order directing the respondent Operator to refund overpaid recurrent charges as the application for orders under s109 of the RV Act was made out of time (that is, more than twelve months after the increase in the charges came into effect) and in circumstances where the Tribunal is not satisfied that it should exercise its discretion pursuant to s 41 of the Civil and Administrative Tribunal Act 2013 NSW, to extend the time within which the applicants may apply to the Tribunal for an order directing a refund of such overpaid recurrent charges.
5. Order that the respondent Operator must comply with s 118 of the RV Act by obtaining the consent of the residents of the Village (pursuant to s 118(2)(c) of the RV Act) to the appointment of an auditor qualified to audit the Village's accounts, and also by providing to the residents of the Village quarterly accounts within 28 days after the end of the quarter to which the quarterly accounts relate (as required by s 118(3) of the RV Act).
[12]
D G Charles
Senior Member
Civil and Administrative Tribunal of New South Wales
8 November 2017
[13]
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 30 January 2018