Luke v Aveo Group Limited

Federal Court of Australia|2022-09-12|Before: Mr P, Mr J, Anderson J

The date fixed pursuant to section 33J of the Federal Court of Australia Act 1976 (Cth) (Act) as being the date before which a group member may opt out of the proceeding is 4:00 pm AEDT on 7 November 2022 (the Opt Out Deadline).
Pursuant to sections 33X and 33Y of the Act, the terms of the notices set out in: (a) Annexure A to these Orders (Opt Out Notice); (b) Annexure B to these Orders (Cover Letter); and (c) Annexure C to these Orders (Newspaper Notice), (collectively, the Notices), are approved.
Pursuant to section 33Y of the Act, the Notices be given to group members according to the following procedure: (a) by 26 September 2022, the Respondent (Aveo) shall deliver to IVE Group (or another suitable entity with agreement of the Applicants) (Mailing House) to the extent available to Aveo, a list of names, email addresses and postal addresses of all persons who match the following description of eligible group members: (i) any current freehold or non-Aveo Way leasehold residential unit owner at the villages listed in Annexure D to these Orders (Aveo Village); or (ii) any former owner or holder of a freehold or non-Aveo Way leasehold interest in a residential unit in an Aveo Village, who sold their interest in their unit under or subject to The Aveo Way contract; or (iii) any executor or co-executor of the estate of a person described in this subparagraph (ii) above; and who has not entered into a release (Release) of all of their claims against Aveo arising out of the conduct of Aveo described in the Third Further Amended Statement of Claim (Assumed Group Member); (b) by 3 October 2022, Aveo shall cause the Mailing House to send the Cover Letter and Opt Out Notice, by post and email, to each person identified as an Assumed Group Member in accordance with order 3(a); (c) by 26 September 2022, the Applicants shall cause a copy of the Cover Letter and Opt Out Notice to be sent by post and email, to the extent such details are available to the Applicants, to each person who has entered into a funding agreement with Galactic Aveo LLC (a New York Corporation) (Galactic Aveo) for the purposes of this proceeding or identified themselves to the Applicants' solicitors as a potential group member (even if they have not entered into a funding agreement with Galactic Aveo for the purposes of this proceeding), and for whom the Applicants' solicitors hold a current postal and/or email address; (d) by 26 September 2022, the Applicants shall cause a copy of the Opt Out Notice to be displayed on the following websites: (i) the Applicants' solicitors website at under the "Current Class Actions" and then "Aveo"; and (ii) the Class PR website at , up to and including the Opt Out Deadline or until further order (whichever is earlier); (e) by 26 September 2022, the Applicants shall arrange for the Newspaper Notice to be published in the legal notices section or the equivalent of one week day edition of : (i) The Australian Newspaper (appearing both online and in print); and (ii) The September 2022 edition of The Senior in NSW/ACT, Victoria, Queensland, South Australia and Tasmania (appearing both online and in print); (f) by 26 September 2022, the Applicants shall cause the Cover Letter and Opt Out Notice to be sent to each person who has registered with the Applicants' solicitors (regardless of whether that person or entity has retained them), with the Cover Letter and Opt Out Notice to be sent by email where an email address is available, or otherwise by ordinary mail; (g) by 26 September 2022, the Applicants shall arrange for an advertisement using the text of the Newspaper Notice to be published through an advertising campaign on the Facebook website until the Opt Out Deadline or until further order, reaching an estimated audience of not less than 10,000 people targeted at persons who: (i) are located in Australia; and (ii) are residents or former residents of an Aveo-branded or Aveo-operated retirement village (Aveo Village); (iii) are persons who may know of residents or former residents of an Aveo Village; and (iv) are above the age of 50 years old; (h) by 26 September 2022, the District Registrar of the Victorian Registry of the Federal Court of Australia shall cause a copy of the Opt Out Notice, together with copies of these Orders, the Third Further Amended Statement of Claim and Aveo's Defence to the Third Further Amended Statement of Claim to: (i) be displayed on the Federal Court website at an address beginning ; and (ii) be available for inspection at the District Registry of the Federal Court in Melbourne, Sydney, Canberra, Brisbane and Perth; and (iii) remain continuously so displayed and available up to and including the Opt Out Deadline.

Other 11. Costs be costs in the proceedings. 12. The parties have liberty to apply. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. ANNEXURE A

Federal Court of Australia Proceeding VID 996 of 2017

Michael Robert Luke (in his capacity as the co-executor of the estate of Robert Colin Luke, deceased) and others v Aveo Group Limited ACN 010 729 950

A. Why is this notice important? 1 A class action has been commenced in the Federal Court of Australia in Melbourne by Michael Robert Luke and three others named below under Section D against Aveo Group Limited (Aveo). 2 If you bought, leased or held a licence to occupy a residential unit (Unit) in a retirement village that was or has become an Aveo-branded retirement village, and the "Aveo Way" contract has been introduced in that village, you should read this notice carefully. 3 Aveo is an owner, developer and operator of Aveo-branded retirement villages in Australia. (Aveo Villages). Aveo Villages include retirement villages that Aveo (or a related entity) purchased and has since operated under the name and brand "Aveo". 4 This Notice contains important information about: (a) What a class action is. (b) Whether you are a group member in this class action. (c) What the class action against Aveo is about. (d) Whether you will be responsible for paying for the class action, and how it is funded. (e) Your right to "opt out" of the class action, what opt out is, and how you can opt out of this class action. 5 The class action is brought against Aveo on behalf of certain current and former residents of Units within Aveo Villages who hold, or once held, a Unit in an Aveo Village where a contract known as the "Aveo Way" has been introduced. For former residents who have passed away, the class action is brought on behalf of the executors or administrators of their estate. 6 The Federal Court has ordered that this notice be published for the information of persons who might be members of the class on whose behalf the action is brought and who may be affected by the action. Under the Court's rules, Aveo, its managers, and staff are not able to discuss the opt out notice with you. Any questions you have concerning the matters contained in this notice should not be directed to the Court. If there is anything in the notice that you do not understand, you should seek legal advice or contact Levitt Robinson at aveo@levittrobinson.com (see further at paragraphs [60] and [61] below). B. What is a class action? 7 A class action is a legal proceeding that is brought by one person (Applicant) on their own behalf and on behalf of a class or group of people (group members) against another person (Respondent) where the Applicant and the group members have similar claims against the Respondent. 8 Group members in a class action are not individually responsible for any legal costs associated with bringing the class action if the class action is unsuccessful. You may only be required to pay legal costs if the class action is successful. Any legal costs you may be required to pay will not exceed the amount of compensation or the assessed value of any benefits you may receive by being a part of the class action. The manner of any assessment of the value of any non-monetary benefits received by group members who do not sign funding agreements will be subject to the Court's direction or approval. 9 Group members are "bound" by the outcome in the class action, unless they have opted out of the proceeding. This means that if you do not opt out: (a) You may be able to share in any compensation or other benefit arising from a settlement; and (b) If the class action proceeds to a trial and is successful, then: (i) If you have already sold or surrendered your Unit, you may be able to share in any Court-awarded damages; and (ii) If you have not sold or surrendered your Unit, you will not be able to share in any Court-awarded damages but you may have the benefit of Court orders that state what Aveo may or may not do in relation to the sale or surrender of Units (see paragraph 19 below); and (c) You will be bound by the dismissal of the case if the class action fails; and (d) You will not be able to sue about the matters that are the subject of the class action in separate legal proceedings. 10 A result that is binding on group members can happen in two ways, either by a judgment following a trial, or a settlement at any time. 11 In a judgment following trial, the Court will decide various factual and legal issues in respect of the claims made by the Applicant and group members. Unless those decisions are successfully appealed, they bind the Applicant, group members and the Respondent. 12 Importantly, if there are other legal proceedings between a group member and the Respondent, it may be that neither of them will be permitted to raise arguments in that proceeding which are inconsistent with a factual or legal issue decided in the class action. 13 In a settlement of a class action, if the settlement provides for compensation or other benefits to group members then the settlement terms may also extinguish all rights to compensation which a group member might have against the Respondent which arises in any way out of the events or transactions which are the subject-matter of the class action. 14 If you consider that you have claims against Aveo which are based on your individual circumstances, or that you have claims in addition to the claims described in the class action, then it is important that you seek independent legal advice about the potential binding effects of the class action before the deadline for opting out (see below). C. Are you a group member? 15 Central to this class action is the introduction by Aveo of a form of contract (the Aveo Way Contract) under which Aveo leases Units in certain Aveo Villages. The Applicants in the class action allege that Aveo introduced the Aveo Way Contract pursuant to a programme (the Aveo Way Programme) that was rolled out in certain Aveo Villages from 2014. 16 Group members in the class action are those who hold, or once held, an interest in a Unit at an Aveo Village where the Aveo Way Programme was introduced (Residential Owners). 17 A list of the Aveo villages which are the subject of the class action, including the date the Aveo Way Programme was introduced at each relevant village, is set out at Schedule 2 to this notice. 18 You are eligible to participate as a group member in the class action if you fall within the Group Definition, defined as follows: (a) You: (i) currently hold, a freehold interest in a Unit in an Aveo Village listed in Part 1 of Schedule 2 and you are subject to the terms of a non-Aveo Way Management Agreement (Pre-Aveo Way Freehold Interest), or you are an executor, administrator or lawful assignee of a person who has a freehold interest of that type; OR (ii) previously held a freehold interest in a Unit in an Aveo Village listed in Part 1 or Part 2 of Schedule 2 and you were subject to the terms of a non-Aveo Way Management Agreement (Pre-Aveo Way Freehold Interest), or you are an executor, administrator or lawful assignee of a person who had a freehold interest of that type; and (b) You have not settled your claims the subject of the proceedings, (Freehold Group Members); OR (c) You: (i) currently hold a leasehold interest in relation to, or a licence to occupy, a Unit in an Aveo Village listed in Part 1 of Schedule 2 and you are subject to the terms of a non-Aveo Way Management Agreement (Pre-Aveo Way Leasehold Interest), or you are an executor, administrator or lawful assignee of a person who has a leasehold interest of that type; OR (ii) previously held a leasehold interest in relation to, or a licence to occupy, a Unit in an Aveo village listed in Part 1 or Part 2 of Schedule 2 and you were subject to the terms of a non-Aveo Way Management Agreement (Pre-Aveo Way Leasehold Interest), or you are an executor, administrator or lawful assignee of a person who had a leasehold interest of that type; and (d) You have not settled your claims the subject of the proceedings, (Leasehold Group Members). 19 The Freehold Group Members and the Leasehold Group Members fall into two principal subgroups: those who have sold or surrendered their Unit and seek compensation and damages, and those who have not yet sold or surrendered their Unit and who seek declarations and injunctions only. If judgment is entered in favour of the Applicants, group members who have not yet sold are entitled only to any declarations and injunctions the Court makes, and not to damages, although the declarations and injunctions may be of financial value to group members who have not yet sold. 20 Aveo has provided a list of all Aveo Way sales to Levitt Robinson. If you are a former resident, Levitt Robinson will be able to advise if you have sold under Aveo Way. 21 If you are unsure whether or not you are a group member, you should contact Levitt Robinson Solicitors on 02 9286 3133 or email aveo@levittrobinson.com or seek your own legal advice without delay.

D. WHAT IS THIS CLASS ACTION ABOUT? 22 This class action is brought by the following Applicants: (a) Michael Robert Luke and (b) Meredith Anne Luke, in their capacity as the co-executors of the estate of their late father, Robert Colin Luke, known as the Luke Lead Applicants, who represent the Freehold Group Members; and (c) Ann Mary Stroud and (d) Neil Bernard Colombari, in their capacity as co-executors of the estate of their late mother, Joan Mary Colombari, known as the Colombari Lead Applicants, who represent the Leasehold Group Members. 23 A summary of allegations made in the class action by the Applicants appears in the following three paragraphs. 24 The Applicants allege that: (a) In the case of a Pre-Aveo Way Freehold Interest, when an incoming resident for the Unit was found, Aveo (or a related body corporate) acquired the freehold title to the Unit held by the outgoing Residential Owner and Aveo then leased the Unit to the incoming resident under the Aveo Way Contract; (b) In the case of a Pre-Aveo Way Leasehold Interest, when an incoming resident for the Unit was found, Aveo (or a related body corporate) leased the unit to the incoming resident under the Aveo Way Contract; (c) The sale price or resale price paid to the outgoing Residential Owner would be the ingoing contribution paid by the incoming resident under the Aveo Way Contract; and (d) The outgoing Residential Owner paid fees to Aveo (or its related entity) in relation to the sale of the Unit in accordance with the Residential Owner's existing management agreement with Aveo. 25 The Applicants allege that the interest in the Unit obtained by the incoming resident under the Aveo Way Contract was less valuable than the interest that the outgoing Residential Owner held, because the Aveo Way Contract, in some or all cases: (a) Included a faster rate of accrual and higher ceiling in relation to the "Deferred Management Fee" associated with the Unit; (b) (In respect of the interest held by freehold Residential Owners) Provided a leasehold interest to the incoming resident rather than a freehold interest; (c) Denied to the incoming resident the possibility of receiving any capital gain upon the lease of the Unit to a subsequent incoming resident; and/or (d) Imposed membership fees upon incoming residents that did not apply to Pre-Aveo Way Freehold Interests or Pre-Aveo Way Leasehold Interests. 26 The Applicants also allege that: (a) In relation to outgoing Residential Owners who have sold or surrendered their Pre-Aveo Way Interests, acquiring the Pre-Aveo Way Freehold Interests and Pre-Aveo Way Leasehold Interests had particular value to Aveo, such that Aveo would have been willing to acquire the outgoing Residential Owner's Unit for more than other potential purchasers; (b) Aveo did not inform outgoing Residential Owners of the matters in subparagraph (a) above; (c) Outgoing freehold Residential Owners were required to use, or enticed into using, Aveo (or a related entity) as the selling agent for their Unit when there was no need to appoint a selling agent because Aveo (or a related entity) would, under the Aveo Way Programme, be acquiring the freehold title to the Unit from the outgoing Residential Owner (rather than an incoming resident acquiring that freehold title to the Unit from the outgoing Residential Owner ); (d) Aveo engaged in misleading or deceptive conduct, and unconscionable conduct, by representing to outgoing Residential Owners that they would be "no worse off" as a result of the Aveo Way Programme; and (e) Aveo engaged in an unconscionable system or scheme by introducing and implementing the Aveo Way Programme. 27 The claims against Aveo summarised in paragraphs 24 to 26 above are set out in the third further amended statement of claim, a copy of which can be obtained from Levitt Robinson via email sent to aveo@levittrobinson.com. 28 Aveo denies the Applicants' allegations and is defending the claims against it. Aveo's position is that the Applicants and Group Members have not, or will not, receive less monies by selling under the Aveo Way Programme. Aveo also says that Freehold Group Members are not obliged to sell under the Aveo Way Programme. 29 Pursuant to the current timetabling orders, the class action is set down for a Mediation to occur no later than 14 December 2022. 30 If the matter does not settle at the Mediation, a trial is scheduled for March 2023. This will be a hearing of the Applicants' cases, the claims of any sample group members, as well as certain common questions that affect all group members. 31 The claims of other group members will not be determined at this initial trial. No orders for compensation for other individual group members would be made at this point. 32 If the outcome of the trial warrants the consideration of the claims of other individual group members, and their claims have not been settled or resolved with Aveo, there may be a second stage trial or some other process for the assessment of the claims of the other group members after judgment in the first trial.

E. WILL YOU BE LIABLE FOR LEGAL COSTS IF YOU REMAIN A GROUP MEMBER? 33 You may become liable for legal costs by remaining as a group member for the determination of the common questions. However, the amount of these legal costs will not exceed the amount of compensation and, or alternatively, the assessed value of any other benefit you receive by being a part of the class action. You will only become liable for legal costs if any of the following circumstances arise: (a) Your personal claim may require work to be done in relation to issues that are specific to you, in which case you may be liable for those costs (but see paragraph 46 below). You can ask Levitt Robinson Solicitors or other lawyers to do that work for you. A copy of the terms on which Levitt Robinson Solicitors are acting in the class action may be obtained from them by calling 02 9286 3133 or emailing aveo@levittrobinson.com. If the class action settles out of court, which often happens, then you may be able to claim from the settlement amount without retaining a lawyer; (b) In the case of group members who have already sold or surrendered their units, if any compensation becomes payable to you as a result of any order, judgment or settlement in the class action, the Court may order that some of that compensation be used to help pay for the costs which were incurred by the Applicants in running the class action (as described at Section F below), including legal costs; and (c) In the case of group members who have not sold or surrendered their Unit, if you receive a benefit (such as an increase in the value of your Unit because of the class action) or any compensation becomes payable to you as a result of any settlement in the class action, the Court may order that some of that compensation or the assessed value of the benefit be used to help pay a share of the costs which were incurred by the Applicants in running the class action (as described at Section F below), including legal costs.

F. HOW IS THE CLASS ACTION BEING FUNDED? 34 The class action against Aveo is an Opt-Out, "No-Win, No-Fee" class action, and is fully funded by a third-party litigation funder, Galactic Aveo LLC (the Funder). 35 The Funder pays all legal costs upfront, indemnifies group members for costs orders (in the event Aveo wins), and lodges security for Aveo's costs with the Court. This means that if Aveo wins, you will not be liable to pay for any legal costs. 36 Costs in court proceedings are usually paid by the losing party. If the class action is successful, a court order for costs against Aveo may substantially offset the costs outlaid by the Funder. However, the Funder is entitled under the funding agreements signed with some group members (Funding Agreements) to recover any difference from settlement or judgment verdict monies. 37 Should the claim be successful, the Funder is also entitled to the commission that "funded group members" (being those who have signed a Funding Agreement) have agreed to pay the Funder under their funding agreements. Group members who have signed Funding Agreements and who receive any monetary compensation from any settlement or judgment have agreed to pay 35% of that monetary compensation to the Funder. 38 For group members who do not receive any monetary compensation and still retain their pre-Aveo Way Programme interest in their Units, the current Funding Agreement says that those group members will have to pay to the Funder a portion equal to 25% of the assessed value of any benefit they receive from any settlement or judgment from the proceeds of any subsequent sale of the Unit. The value of any benefit, such as the increase in value of the Unit in consequence of the class action, will be assessed and determined in the manner set out in paragraphs 10 to 12 of Schedule 1. It is important that you read and understand those paragraphs. 39 A summary of the current Funding Agreement is set out in the Schedule to this Notice. A copy of the current Funding Agreement is available from Levitt Robinson Solicitors by calling 02 9286 3133 or emailing aveo@levittrobinson.com. If you have questions concerning the Funding Agreement or how it operates, you are encouraged to contact Levitt Robinson or to seek your own legal advice. Common Fund Order OR Funding Equalisation Order? 40 The Court may order that group members who benefit from a class action but who have not signed a Funding Agreement with the Funder should contribute equally with group members who have signed a Funding Agreement. There are two ways that the Court may order for this to happen. One is known as a Common Fund Order and the other is known as a Funding Equalisation Order. Common Fund Order 41 The Funder may seek a Common Fund Order. A Common Fund Order is an order of the Court that provides for the Funder to receive a percentage that the Court considers to be fair and reasonable of any sum agreed to be paid in settlement of a class action, or of any judgment monies awarded by the Court. The effect of such an order is that all group members will be required to contribute an equal percentage of any settlement or judgment monies that group members are entitled to receive from the class action, whether or not group members have signed a Funding Agreement. The percentage will be lower than the 35% provided for in the Funding Agreements but may be as high as 25%, and will be subject to Court approval. 42 This sum would then be deducted from any settlement sum or judgment monies before distribution to group members. An application for a Common Fund Order would only be made after the case settles or after judgment. What percentage is fair and reasonable would be considered by the Court in all of the circumstances at the time that the Funder seeks a Common Fund Order. Funding Equalisation Order 43 If the Court does not make a Common Fund Order, then at any settlement approval the Applicants will seek a Funding Equalisation Order in respect of any commission and any other costs (including any shortfall in legal costs) to which the Funder is entitled under the Funding Agreements that it has entered into with group members. 44 A Funding Equalisation Order is an order of the Court that requires the "unfunded group members" (being, those who have not signed a Funding Agreement with the Funder) to contribute equally to the commission and any other costs (including any shortfall in legal costs) that "funded group members" (being, those who have signed a Funding Agreement) have agreed to pay the Funder under their Funding Agreements. This means that all group members, both funded and unfunded, will contribute equally to the commission and any other costs that funded group members have agreed to pay to the Funder. 45 If the Court makes orders requiring group members to make a contribution from any compensation or other benefit(s) that they receive from the class action to the funding costs of the proceeding, this will not exceed the amount of compensation and, or alternatively, the assessed value of any benefit(s) you receive. The Court may make orders deferring contribution by group members if they have not sold or surrendered their Unit, including orders to ensure that group members make any required contribution from the sale proceeds of their Unit. 46 Some group members may need to take steps in the proceedings to have their individual claims determined. If that happens, the individual group members, and not the Applicants, will be liable for the costs associated with the determination of their individual claims. The Funder has agreed to fund those costs for group members that have signed Funding Agreements, so they will not have to pay anything unless they achieve a successful outcome. 47 The above information about the effect of a common fund order or a funding equalisation order is a summary only. If you want further information in relation to these matters or you want to inspect a copy of the Funding Agreement, you can contact Levitt Robinson Solicitors by calling 02 9286 3133 or emailing aveo@levittrobinson.com or you should seek your own legal advice.

G. WHAT IS 'OPT OUT'? 48 This is an Opt Out class action. This means that all individuals who fall within the Group Definition set out in Section C above are covered by the outcome of the class action. However, you will have an opportunity to opt out of the class action should you choose to. 49 The Applicant in a class action does not need to seek the consent of group members to commence a class action on their behalf or to identify a specific group member. However, group members can cease to be group members by opting out of the class action. An explanation of how group members are able to opt out is found just below, in Section H.

H. HOW CAN YOU OPT OUT OF THE CLASS ACTION AND WHAT WILL HAPPEN IF YOU DO? 50 If you opt out of the class action: (a) You will not be bound by, or entitled to share in any benefit of, any order, judgment or settlement in the class action; and (b) You will be able to bring your own claim against Aveo, provided that you issue court proceedings within the time limit applicable to your claim. If you wish to bring your own claim against Aveo, you should seek your own legal advice about your claim and the legal costs involved and the applicable time limit prior to opting out. 51 If you do not wish to remain a group member, you must opt out of the class action. 52 If you do not opt out, then as stated at [9] above: (a) You may be able to share in any compensation or other benefit arising from a settlement; and (b) If the class action proceeds to a trial and is successful, then: (i) If you have already sold or surrendered your Unit, you may be able to share in any Court-awarded damages; and (ii) If you have not sold or surrendered your Unit, you will not be able to share in any Court-awarded damages but you may have the benefit of Court orders that state what Aveo may or may not do in relation to the sale or surrender of Units; and (c) You will be bound by the dismissal of the case if the class action fails; and (d) You will not be able to sue about the matters that are the subject of the class action in separate legal proceedings. 53 If you wish to remain a group member, you must not opt out of the class action. 54 If you wish to opt out of the class action you must do so by completing an "Opt Out Notice" in the form attached to this notice and marked "A", then returning it to the Registrar of the Federal Court of Australia by email or at the address on the form. IMPORTANT: if you want to opt out the Notice must reach the Registrar by no later than 4:00 pm on 7 November 2022, otherwise it will not be effective. The notice may be sent to the Victorian District Registry of the Federal Court of Australia, either via email to vicreg@fedcourt.gov.au or by post to the Registry, Federal Court of Australia, 305 William Street Melbourne VIC 3000. 55 Each group member seeking to opt out should fill out a separate form. If you are opting out on behalf of a company or business, please provide your name, the name of the company or business and your position within the company or business (e.g. director or partner). 56 You are free to make up your own mind whether to give an Opt-Out Notice or do nothing. You can also take advice about your options and the information contained in this Notice. Further information can be obtained by contacting Levitt Robinson as set out below or any other lawyer of your choice.

I. WHAT WILL HAPPEN IF YOU CHOOSE TO REMAIN A GROUP MEMBER? 57 If you wish to remain a group member there is nothing you need to do at the present time. The Applicants will continue to bring the proceeding on your behalf up to the point where the Court determines those questions that are common to the claims of the Applicants and the group members. However, you are invited to contact the Applicants' lawyers, Levitt Robinson Solicitors, on (02) 9286 3133 and register as a group member so that future notices about the class action can be sent to your preferred address. You can also do this by completing the registration form, which is Annexure "B" below, and sending it to Levitt Robinson Solicitors by post or email. Completing this form is voluntary. It is not necessary in order to be part of the Class Action. 58 If you have not signed a Funding Agreement and the Court makes a common fund order or a funding equalisation order, then any compensation payable to you or the assessed value of any benefit(s) you receive will be reduced and will be subject to the terms of the common fund order or funding equalisation order. 59 If the action against Aveo is unsuccessful or is not as successful as you might have wished, you will not be able to sue Aveo on the same claim in any other proceedings.

J. WHERE CAN YOU OBTAIN COPIES OF RELEVANT DOCUMENTS? 60 Copies of relevant documents, including the third further amended statement of claim and defence filed by Aveo, may be obtained by: (a) Inspecting them between 9am and 5pm at the offices of Levitt Robinson Solicitors, contact details for which are available from www.levittrobinson.com or by e-mailing aveo@levittrobinson.com and requesting copies; (b) By contacting a District Registry of the Federal Court (contact details are available at www.fedcourt.gov.au) and paying the appropriate inspection fee; or (c) Inspecting them on the Federal Court website at http://www.fedcourt.gov.au/law-and-practice/class-actions/class-actions. 61 Please consider the above matters carefully. If there is anything of which you are unsure, you should contact Levitt Robinson Solicitors on 02 9286 3133 or aveo@levittrobinson.com or seek your own legal advice. You should not delay in making your decision.

Schedule 1 A. What is this Schedule? 1 This Schedule is a B. Terms of the Funding Agreement 2 The Funding Agreement 3 The Funding Agreement 4 Should the Funder 5 If the class action 6 The Additional Sum is: (a) 35% of any compensation (b) 25% of the value 7 The Funding Costs 8 If the Funding Costs 9 "Benefit" 10 The Funding Agreement 11 Levitt Robinson Solicitors 12 The Barrister's 13 Group members who 14 In relation to the Deferred Sum: (a) The Funder may bring (b) Interest accrues (c) This amount will Schedule 2 - list of Aveo villages Legend: ILU means 'Independent SA means 'Serviced Apartment' Aveo Village PART 1: VILLAGES WHERE Aveo The Parks, Earlville Aveo Lindsay Gardens, Buderim Aveo Lindsay Gardens, Buderim Aveo Peregian Springs Aveo Peregian Springs Aveo Albany Creek, Albany Creek Aveo Aspley Court, Aspley Aveo Aspley Court, Aspley Aveo Bridgeman Downs, Bridgeman Downs Aveo Bridgeman Downs, Bridgeman Downs Aveo Cleveland, Cleveland Aveo Cleveland, Cleveland Aveo Cleveland Gardens, Ormiston Aveo Durack, Durack Aveo Durack, Durack Aveo Manly Gardens, Manly Aveo Sunnybank Green, Sunnybank Aveo Taringa, Taringa Aveo Taringa, Taringa The Clayfield, Albion Aveo Amity Gardens, Ashmore Aveo Robertson Park, Robertson Aveo Robina, Robina Aveo Southport Gardens, Southport Aveo The Domain Country Club, Ashmore Aveo The Domain Country Club, Ashmore Aveo Tranquility Gardens, Helensvale Aveo Banora Point, Banora Point Aveo Bayview Gardens, Bayview Aveo Bayview Gardens, Bayview Aveo Camden Downs, Camden South Aveo Lindfield Gardens, East Lindfield Aveo Lindfield Gardens, East Lindfield Aveo Maple Grove, Casula Aveo Minkara Resort, Bayview Aveo Minkara Resort, Bayview Aveo Peninsula Gardens, Bayview Aveo Peninsula Gardens, Bayview Aveo Fernbank, St Ives Aveo Island Point, St Georges Basin Aveo Mountain View, Murwillumbah Aveo Mountain View, Murwillumbah Pittwater Palms, Avalon The Manors of Mosman, Mosman Aveo Ackland Park, Everard Park Aveo Carisfield, Seaton Aveo Crestview, Hillcrest Aveo Fulham, Fulham Aveo Fulham, Fulham Aveo Glynde Lodge, Glynde Aveo Gulf Point, North Haven Aveo Kings Park, Kings Park Aveo Kings Park, Kings Park Aveo Leabrook Lodge, Rostrevor Aveo Leisure Court, Fulham Gardens Aveo Manor Gardens, Salisbury East Aveo Manor Gardens, Salisbury East Aveo Melrose Park, Melrose Park Aveo Melrose Park, Melrose Park Aveo Riverview, Elizabeth Vale Aveo The Braes, Reynella Aveo The Braes, Reynella Aveo The Haven, North Haven Aveo The Haven, North Haven Aveo Westport, Queenstown Aveo Botanic Gardens, Cranbourne Aveo Cherry Tree Grove, Croydon Aveo Cherry Tree Grove, Croydon Aveo Domainé, Doncaster Aveo Edrington Park, Berwick Aveo Fountain Court, Burwood Aveo Hampton Heath, Hampton Park Aveo Kingston Green, Cheltenham Aveo Mingarra, Croydon Aveo Oak Tree Hill, Glen Waverley Aveo Roseville, Doncaster East Aveo Springthorpe, Macleod Aveo Sunbury, Sunbury Aveo Veronica Gardens, Northcote Aveo Hunters Green, Cranbourne East Aveo Derwent Waters, Claremont Aveo Derwent Waters, Claremont Aveo Mowbray Links, summary of the terms and effect of the current version of the Funding Agreement referred to in the Notice. It is a summary only, and not legal advice. If you have any questions or concerns, you should contact Levitt Robinson Solicitors on 02 9286 3133 or aveo@levittrobinson.com or seek your own legal advice. is an agreement executed as a deed between the Funder, Levitt Robinson and the group member (who becomes a client of Levitt Robinson). The Funding Agreement has been altered since it was originally prepared. What appears below concerns the current Funding Agreement that applies to group members who hold a freehold interest in their Unit. The current version of the Funding Agreement that applies to group members who hold a leasehold interest in their Unit is substantially the same, except where noted below. provides that the Funder will pay the costs of the class action in the first instance. If the class action is not successful against Aveo, then the group member is not liable to pay any costs. determine that it does not wish to continue to fund the class action, it will give 60 days' written notice to that effect. The Funder remains liable under the Funding Agreement up to the date of its withdrawal from the Funding Agreement. [This term is not part of the current version of the Funding Agreement that applies to group members who hold a leasehold interest.] is successful then the Funder is entitled to be reimbursed the costs of the class action that the Funder has paid ("Funding Costs") and the "Additional Sum". received by the group member from the class action; and of any "Benefit" received by the group member from the class action. and the Additional Sum are paid out of the total of the entitlement from the class action of all group members who have signed Funding Agreements ("the Final Amount"). If a group member who has signed a Funding Agreement opts out of the class action and subsequently obtains compensation from Aveo, that group member will still be liable to pay the Funder its entitlements, as prescribed by the Funding Agreement. and the Additional Sum is more than the Final Amount, then the Funder receives the Final Amount (rather than the Funding Costs and the Additional Sum). is defined in the Funding Agreement to include increases in property value in consequence of the class action, and may also include the value of any financial concession or non-monetary compensation or other remedy. The value is measured as at the date of settlement or court order, and these may be complex and difficult to assess. contains a binding process for assessing and determining the value of any "Benefit". This is particularly relevant to those group members who have not sold or surrendered their Unit when the class action settles or judgment is delivered by the Court following a trial. will, at their absolute discretion, appoint a barrister from Queensland of at least 12 years' seniority to undertake the valuation of the Benefit (Barrister's Determination). That barrister will have access to a written valuation prepared by an independent expert and any other further information or evidence that Levitt Robinson Solicitors may at their absolute discretion determine to be relevant, and will determine the value of the Benefit as at the date of judgment (or subsequent Court order) or settlement. Determination is binding unless the group member or the Funder seeks a review within 21 days of receiving the Barrister's Determination, and provides their evidence and submissions with their review application. The group member and Funder may seek a review of the Barrister's Determination from an independent barrister from New South Wales or Victoria of at least 12 years' seniority, which barrister will be appointed by Levitt Robinson Solicitors at their absolute discretion. The review application is binding on the group member and the Funder. have not sold or surrendered their Unitmay pay out of their own pocket an amount equal to the Barrister's Determination at the time the Barrister's Determination is made. If the payment is not made at that time, then those group members will become personally liable to the Funder for an amount equal to the Barrister's Determination which will be secured by a charge and caveat on the title of their Unit (Deferred Sum). an application to the Court on behalf of all group members (and therefore incur legal costs on behalf of all group members) regarding any charge or caveat over the Unit; at 2.0% per annum calculated daily with a cap of 10% until the Deferred Sum is paid to the Funder; and only be due and payable to the Funder at the time the Unit is sold or disposed of. Living Unit' Accom. Type State Date of first Aveo Way Sale THE AVEO WAY HAS BEEN INTRODUCED, AVEO WAY CONTRACTS ARE PRESENTLY OFFERED TO INCOMING RESIDENTS AND AN AVEO WAY SALE MAY TAKE PLACE IN THE FUTURE ILU Qld 16-Jul-15 ILU Qld 11-Sep-15 SA Qld 26-Oct-15 Country Club, Peregian Springs ILU Qld 29-Jun-15 Country Club, Peregian Springs SA Qld 30-Jun-15 ILU only Qld 29-Apr-15 ILU Qld 30-Jun-15 SA Qld 30-Jun-15 ILU Qld 10-Aug-15 SA Qld 30-Jun-15 ILU Qld 4-May-15 SA Qld 23-Apr-15 ILU only Qld 17-Jul-15 ILU Qld 31-Mar-15 SA Qld 21-Apr-15 ILU Qld 15-Apr-15 ILU Qld 1-Jul-15 ILU Qld 26-Jun-15 SA Qld 7-May-15 ILU Qld 30-Apr-14 ILU Qld 1-Jul-15 ILU only Qld 25-Sep-15 ILU Qld 25-Jun-15 ILU Qld 16-Oct-15 ILU Qld 22-Jun-15 SA Qld 24-Jun-15 ILU Qld 15-Jun-15 ILU NSW 9-Sep-15 ILU NSW 19-Nov-14 SA NSW 24-Aug-15 ILU NSW 11-Apr-16 ILU NSW 26-Nov-14 SA NSW 15-Dec-14 ILU NSW 5-Dec-14 ILU NSW 24-Nov-14 SA NSW 28-Apr-15 ILU NSW 4-Jun-15 SA NSW 16-Oct-15 SA only NSW 23-Dec-15 ILU NSW 10-Aug-15 ILU NSW 4-Sep-15 SA NSW 12-Feb-16 SA only NSW 29-Mar-22 SA only NSW 22-Dec-17 ILU only SA 28-Nov-16 ILU SA 27-Jan-16 ILU SA 14-Oct-15 ILU SA 24-Sep-15 SA SA 3-Jun-15 ILU SA 3-Nov-15 ILU SA 14-Nov-16 ILU SA 8-Apr-16 SA SA 16-Dec-15 ILU SA 27-Nov-15 ILU SA 17-Mar-17 ILU SA 22-Jul-15 SA SA 30-Jun-15 ILU SA 27-Jan-16 SA SA 6-Aug-15 ILU SA 28-Sep-15 ILU SA 24-Jun-15 SA SA 18-Jun-15 ILU SA 14-Aug-15 SA SA 21-Aug-15 ILU SA 31-Jul-15 ILU Vic 21-Mar-16 ILU Vic 1-Oct-15 SA Vic 11-Dec-15 ILU Vic 11-Jan-16 ILU only Vic 20-Aug-15 ILU only Vic 2-Nov-15 ILU Vic 21-Aug-15 ILU only Vic 17-Aug-15 ILU Vic 25-Sep-15 ILU only Vic 30-Oct-15 ILU only Vic 30-Oct-15 ILU Vic 17-Jun-16 ILU Vic 12-Feb-16 ILU only Vic 29-Apr-16 ILU Vic 17-Aug-18 ILU Tas 21-Sep-15 SA Tas 1-Jun-17 Mowbray (Previously known as Freedom Aged Care Launceston) ILU Tas 18-Aug-20

Aveo Village Accom. Type State Date of first Aveo Way Sale PART 2: VILLAGES WHERE THE AVEO WAY HAS BEEN INTRODUCED BUT AVEO WAY SALES WILL NO LONGER TAKE PLACE Aveo Albany Creek, Albany Creek / Freedom Aged Care Albany Creek SA only Qld 29-May-15 Freedom Aged Care Ormiston (previously described as Freedom Aged Care Cleveland or Aveo Cleveland Gardens) SA only Qld 11-Jun-15 Aveo Mosman Grove, Mosman SA only NSW 19-Dec-14 Aveo Edrington Park, Berwick / Freedom Aged Care Berwick, Berwick SA only Vic 11-Oct-16 Aveo Fountain Court, Burwood / Freedom Aged Care Burwood SA only Vic 25-Sep-15 Aveo Roseville, Doncaster East / Freedom Aged Care Doncaster SA only Vic 23-Dec-16 Freedom Concierge Balwyn, Balwyn (Previously known as Aveo Concierge Balwyn) ILU Vic 28-Sep-15 Freedom Concierge Bayside, Hampton (Previously known as Aveo Concierge Bayside) ILU Vic 10-Aug-15 Freedom Aged Care Sandringham, Sandringham (Previously known as Aveo The George) ILU Vic 6-Nov-15 Freedom Aged Care Sandringham, Sandringham (Previously known as Aveo The George) SA Vic 4-Sep-15

"A" Complete and return this form ONLY if you do NOT want to be a part of the class action Form 21 Rule 9.34 Opt out notice No. 996 of 2017 Federal Court of Australia District Registry: Victoria Division: General

Michael Robert Luke (in his capacity as the co-executor of the estate of Robert Colin Luke, deceased) and others

Respondent To: The Registrar Federal Court of Australia at Melbourne Owen Dixon Commonwealth Law Courts Building 305 William Street Melbourne VIC 3000 (Street and postal address) OR by Email: vicreg@fedcourt.gov.au The person named below as a group member in this representative proceeding, gives notice under section 33J of the Federal Court of Australia Act 1976 (Cth), that the group member is opting out of the representative proceeding. Name of group member: Capacity of group member (Are you an Owner, a former Owner, an Executor or an Administrator or do you hold a power of Attorney? Please specify: Unit No and Village

Capacity [eg group member, lawyer for group member, director of group member] "B" Complete and return this form if you want to register for the Class Action and receive updates form Levitt Robinson about the Class Action. Aveo Class Action Registration Form To: Levitt Robinson Solicitors Ground Floor, 167 Goulburn Street Surry Hills NSW 2010 aveo@levittrobinson.com Name of group member: Capacity (Are you an Owner, a former Owner, an Executor or an Administrator or do you hold a power of Attorney? Please specify. If you are an Executor, Administrator or hold Power of Attorney please provide your name, the name of the resident or former resident and the unit address Address: Email: Telephone:

ANNEXURE B Dear Sir/Madam You are receiving this letter because you have been identified as a group member or a possible group member in a class action that has been commenced in the Federal Court of Australia in Melbourne by Michael Robert Luke, Meredith Anne Luke, Ann Mary Stroud and Neil Bernard Colombari (Applicants) against Aveo Group Limited (Aveo). The Opt Out Notice enclosed with this letter contains important information about the class action against Aveo and group members' right to opt out of the class action if they wish. You should read the Opt Out Notice carefully. If there is anything of which you are unsure you should contact Levitt Robinson, the lawyers for the Applicants in the class action, or you should seek your own legal advice. Levitt Robinson Solicitors may be contacted on (02) 9286 3133 or by email at aveo@levittrobinson.com. Information is also available on their website at www.levittrobinson.com. ANNEXURE C

SUMMARY OF OPT OUT NOTICE FEDERAL COURT OF AUSTRALIA (VID 996 of 2017)

Michael Robert Luke (in his capacity as the co-executor of the estate of Robert Colin Luke, deceased) and others -v- Aveo Group Limited

A class action has been commenced in the Federal Court of Australia in Melbourne by Michael Robert Luke, Meredith Anne Luke, Ann Mary Stroud and Neil Bernard Colombari (Applicants) against Aveo Group Limited (Aveo). If you bought or leased a residential unit (Unit) in a retirement village that was or has become an Aveo-branded retirement village, and the "Aveo Way" contract has been introduced in that village, you should read this notice carefully. This document is a summary of a document titled Opt Out Notice that has been ordered to be published by the Federal Court. You can obtain a copy of the full Opt Out Notice and other documents in the proceedings from the Federal Court's website at https://www.fedcourt.gov.au/law-and-practice/class-actions/class-actions or by calling Levitt Robinson on (02) 9286-3133. This notice contains important information about the class action against Aveo and your right to 'opt out' of the class action. Under the Court's rules, Aveo, its managers, and staff are not able to discuss the opt out notice with you. Any questions you have concerning the matters contained in this notice should not be directed to the Court. If there is anything in the notice you do not understand, please seek your own legal advice. What is this class action? A class action is a legal proceeding that is brought by an Applicant on their own behalf and on behalf of a group of people (group members) against the Respondent. This class action is brought by the Applicants on their own behalf and on behalf of all persons who are group members. The Respondent is Aveo, an operator of retirement villages (Aveo Villages). Central to this class action is the introduction by Aveo of a form of contract (the Aveo Way Contract) under which Aveo leases Units in certain Aveo Villages. A list of the Aveo villages which are the subject of the class action, including the date the Aveo Way Programme was introduced at each relevant village, is set out at Schedule 2 to the full Opt Out Notice. You are a group member if: (d) You are or were a freehold or leasehold Unit owner in an Aveo Village where the Aveo Way Contract has been introduced and you are or were subject to the terms of a non-Aveo Way Management Agreement; or (e) You are the executor or co-executor or administrator of the estate, or lawful assignee, of a person described in subparagraph (a) above; AND You have not settled your claims the subject of the proceedings. How is the class action being funded? The class action is being funded by a third-party litigation funder. However, the funder may seek orders that group members who have not signed funding agreements with the funder contribute to the costs of the class action out of any compensation or other benefits arising out of settlement or judgment of the class action, which may affect you. If this occurs, group members who have not sold their Unit may be required to pay to the funder a percentage of the value of any non-monetary 'benefit' they receive from the settlement or judgment of the class action. Please see the full copy of the Opt Out Notice for further details. What is 'Opt Out'? The Applicant in a class action does not need to seek the consent of group members to commence a class action on their behalf or to identify a specific group member. However, group members can cease to be group members by opting out of the class action. If you do not wish to remain a group member you must opt out of the class action. If you wish to opt out of the class action you must do so by completing an "Opt Out Notice form". This form is included within the full copy of the Opt Out Notice. The methods for returning the form are specified in the form. You are free to make up your own mind whether to give an Opt Out Notice or do nothing, but you should not delay in making your decision. The deadline for opting out is 4:00 pm on …………………………2022. If there is anything of which you are unsure you should contact Levitt Robinson, the lawyers for the Applicants in the class action at the contact details below, or seek your own legal advice. Levitt Robinson Solicitors may be contacted on (02) 9286 3133 or by email at aveo@levittrobinson.com. Information is also available on their website at www.levittrobinson.com. Annexure D Legend: ILU means 'Independent Living Unit' SA means 'Serviced Apartment' Aveo Village Accom. Type State Date of first Aveo Way Sale PART 1: VILLAGES WHERE THE AVEO WAY HAS BEEN INTRODUCED, AVEO WAY CONTRACTS ARE PRESENTLY OFFERED TO INCOMING RESIDENTS AND AN AVEO WAY SALE MAY TAKE PLACE IN THE FUTURE Aveo The Parks, Earlville ILU Qld 16-Jul-15 Aveo Lindsay Gardens, Buderim ILU Qld 11-Sep-15 Aveo Lindsay Gardens, Buderim SA Qld 26-Oct-15 Aveo Peregian Springs Country Club, Peregian Springs ILU Qld 29-Jun-15 Aveo Peregian Springs Country Club, Peregian Springs SA Qld 30-Jun-15 Aveo Albany Creek, Albany Creek ILU only Qld 29-Apr-15 Aveo Aspley Court, Aspley ILU Qld 30-Jun-15 Aveo Aspley Court, Aspley SA Qld 30-Jun-15 Aveo Bridgeman Downs, Bridgeman Downs ILU Qld 10-Aug-15 Aveo Bridgeman Downs, Bridgeman Downs SA Qld 30-Jun-15 Aveo Cleveland, Cleveland ILU Qld 4-May-15 Aveo Cleveland, Cleveland SA Qld 23-Apr-15 Aveo Cleveland Gardens, Ormiston ILU only Qld 17-Jul-15 Aveo Durack, Durack ILU Qld 31-Mar-15 Aveo Durack, Durack SA Qld 21-Apr-15 Aveo Manly Gardens, Manly ILU Qld 15-Apr-15 Aveo Sunnybank Green, Sunnybank ILU Qld 1-Jul-15 Aveo Taringa, Taringa ILU Qld 26-Jun-15 Aveo Taringa, Taringa SA Qld 7-May-15 The Clayfield, Albion ILU Qld 30-Apr-14 Aveo Amity Gardens, Ashmore ILU Qld 1-Jul-15 Aveo Robertson Park, Robertson ILU only Qld 25-Sep-15 Aveo Robina, Robina ILU Qld 25-Jun-15 Aveo Southport Gardens, Southport ILU Qld 16-Oct-15 Aveo The Domain Country Club, Ashmore ILU Qld 22-Jun-15 Aveo The Domain Country Club, Ashmore SA Qld 24-Jun-15 Aveo Tranquility Gardens, Helensvale ILU Qld 15-Jun-15 Aveo Banora Point, Banora Point ILU NSW 9-Sep-15 Aveo Bayview Gardens, Bayview ILU NSW 19-Nov-14 Aveo Bayview Gardens, Bayview SA NSW 24-Aug-15 Aveo Camden Downs, Camden South ILU NSW 11-Apr-16 Aveo Lindfield Gardens, East Lindfield ILU NSW 26-Nov-14 Aveo Lindfield Gardens, East Lindfield SA NSW 15-Dec-14 Aveo Maple Grove, Casula ILU NSW 5-Dec-14 Aveo Minkara Resort, Bayview ILU NSW 24-Nov-14 Aveo Minkara Resort, Bayview SA NSW 28-Apr-15 Aveo Peninsula Gardens, Bayview ILU NSW 4-Jun-15 Aveo Peninsula Gardens, Bayview SA NSW 16-Oct-15 Aveo Fernbank, St Ives SA only NSW 23-Dec-15 Aveo Island Point, St Georges Basin ILU NSW 10-Aug-15 Aveo Mountain View, Murwillumbah ILU NSW 4-Sep-15 Aveo Mountain View, Murwillumbah SA NSW 12-Feb-16 Pittwater Palms, Avalon SA only NSW 29-Mar-22 The Manors of Mosman, Mosman SA only NSW 22-Dec-17 Aveo Ackland Park, Everard Park ILU only SA 28-Nov-16 Aveo Carisfield, Seaton ILU SA 27-Jan-16 Aveo Crestview, Hillcrest ILU SA 14-Oct-15 Aveo Fulham, Fulham ILU SA 24-Sep-15 Aveo Fulham, Fulham SA SA 3-Jun-15 Aveo Glynde Lodge, Glynde ILU SA 3-Nov-15 Aveo Gulf Point, North Haven ILU SA 14-Nov-16 Aveo Kings Park, Kings Park ILU SA 8-Apr-16 Aveo Kings Park, Kings Park SA SA 16-Dec-15 Aveo Leabrook Lodge, Rostrevor ILU SA 27-Nov-15 Aveo Leisure Court, Fulham Gardens ILU SA 17-Mar-17 Aveo Manor Gardens, Salisbury East ILU SA 22-Jul-15 Aveo Manor Gardens, Salisbury East SA SA 30-Jun-15 Aveo Melrose Park, Melrose Park ILU SA 27-Jan-16 Aveo Melrose Park, Melrose Park SA SA 6-Aug-15 Aveo Riverview, Elizabeth Vale ILU SA 28-Sep-15 Aveo The Braes, Reynella ILU SA 24-Jun-15 Aveo The Braes, Reynella SA SA 18-Jun-15 Aveo The Haven, North Haven ILU SA 14-Aug-15 Aveo The Haven, North Haven SA SA 21-Aug-15 Aveo Westport, Queenstown ILU SA 31-Jul-15 Aveo Botanic Gardens, Cranbourne ILU Vic 21-Mar-16 Aveo Cherry Tree Grove, Croydon ILU Vic 1-Oct-15 Aveo Cherry Tree Grove, Croydon SA Vic 11-Dec-15 Aveo Domainé, Doncaster ILU Vic 11-Jan-16 Aveo Edrington Park, Berwick ILU only Vic 20-Aug-15 Aveo Fountain Court, Burwood ILU only Vic 2-Nov-15 Aveo Hampton Heath, Hampton Park ILU Vic 21-Aug-15 Aveo Kingston Green, Cheltenham ILU only Vic 17-Aug-15 Aveo Mingarra, Croydon ILU Vic 25-Sep-15 Aveo Oak Tree Hill, Glen Waverley ILU only Vic 30-Oct-15 Aveo Roseville, Doncaster East ILU only Vic 30-Oct-15 Aveo Springthorpe, Macleod ILU Vic 17-Jun-16 Aveo Sunbury, Sunbury ILU Vic 12-Feb-16 Aveo Veronica Gardens, Northcote ILU only Vic 29-Apr-16 Aveo Hunters Green, Cranbourne East ILU Vic 17-Aug-18 Aveo Derwent Waters, Claremont ILU Tas 21-Sep-15 Aveo Derwent Waters, Claremont SA Tas 1-Jun-17 Aveo Mowbray Links, Mowbray (Previously known as Freedom Aged Care Launceston) ILU Tas 18-Aug-20

INTRODUCTION 1 The Applicants, by an interlocutory application filed 19 April 2022 (Application), seek amongst other things, orders pursuant to ss 33X and 33Y of the Federal Court of Australia Act 1976 (Cth) (Act) approving the terms of the opt out notice, cover letter and newspaper notice to be given to group members. 2 On 17 June 2022, I ordered that Ms Meg O'Sullivan SC be appointed as an amicus curiae (amicus) to represent the interests of the Relevant Unfunded Group Members (meaning the interests of all of the Freehold Group Members and Leasehold Group Members as defined in the third further amended statement of claim filed 4 November 2021) in relation to the Application. Pursuant to my orders, the amicus filed and served an outline of submissions in response to the Applicants' Application. The Applicants and Respondent each filed and served responsive outlines of submissions to those filed by the amicus. On 8 August 2022, the amicus filed submissions in reply to the Applicants' submissions. I heard the application on 9 August 2022.

THE APPLICANTS' CLAIMS 3 This proceeding concerns the design and implementation of the Respondent's (Aveo) "Aveo Way programme", which commenced in 2014. Under that programme, residents took a freehold or leasehold interest in the real property underpinning their accommodation unit in Aveo retirement villages (Unit), and entered into "management agreements" in association with that accommodation and their residency within the village. 4 The management agreements provided (inter alia) for: (a) the quantum and speed of accrual of a "deferred management fee", which is a fee which residents pay upon their exit from their Unit in the Aveo retirement village, which is usually calculated as a percentage of their ingoing contribution (for the acquisition of a lease) or the sale price (whether of a freehold or leasehold interest in their Unit); and (b) whether the resident is entitled to participate in any capital gain upon the sale of the Unit. 5 Relevantly, the Applicants contend that: (a) the Aveo Way programme involved (and involves): (i) outgoing residents selling (or surrendering) their interest in their Unit to Aveo; (ii) Aveo leasing those resident's Units under the terms of an Aveo Way contract to an incoming resident; and (iii) the outgoing resident receiving, as the purchase price for their "Pre-Aveo Way interest" (Pre-AWI), the purchase price that an incoming resident paid to acquire their interest under an Aveo Way contract; (b) the Aveo Way contract provides that an incoming resident: (i) acquires a leasehold interest in a Unit; (ii) agrees to pay a deferred management fee that rises to a level of 35 percent after 3 years (which is faster, and for the most part higher, than under management agreements for Pre-AWIs); and (iii) does not share in any capital gain in the value of the Unit across the course of their tenure; (c) the value of Pre-AWIs in a Unit was (and is) greater than the value of an interest under an Aveo Way contract for the same Unit; and (d) in implementing the Aveo Way programme, Aveo engaged in misleading or deceptive, and unconscionable, conduct contrary to the Australian Consumer Law. 6 In respect of group members who have sold their Pre-AWI (sold group members), the relief sought includes damages or compensation, and interest: Further Amended Originating Application dated 5 February 2021 (FAOA) at [1.10], [1.16], [1.17], [1.22], [1.26] and [1.28]. 7 In respect of group members who have not sold their Pre-AWI (unsold group members), the major relief sought is injunctions restraining the implementation of the Aveo Way programme, and restraining the making of representations to the effect that those group members will be no worse off if they sell under the Aveo Way programme: FAOA at [1B]. 8 There are two major issues concerning the content of the opt out notice. 9 First, there is the concern that unsold group members are in a fundamentally different position to sold group members because it is asserted that: (a) unsold group members are not entitled to share in any monetary compensation; and (b) notwithstanding this, the Applicants have indicated that they may seek a Funding Equalisation Order (FEO). The FEO would require unsold group members who have not entered into litigation funding agreements with the Funder in this proceeding (unfunded unsold group members) to make a contribution towards the funding commission; and any shortfall in legal costs that group members who have entered into litigation funding agreements (funded group members) with the litigation funder (Funder) are liable to pay to the Funder. 10 Second, Aveo has expressed concern that, due to the age of the residents, the opt out notice should avoid informing group members of the potential for a FEO application. Aveo contends that the Court should order, of its own motion pursuant to s 33ZF of the Act, that the Applicants have until a specified date, prior to the issuing of any opt out notice, to apply for a FEO in respect of unfunded unsold group members. Aveo contends that such an order is required to avoid the potential harm that a FEO could cause unfunded unsold group members; and the consequent alarm and distress that the notice of a FEO may cause to such group members.

THE FUNDING AGREEMENT 11 The Funding Agreement, as at 3 July 2020 is exhibit BRI-8 to the affidavit of Brett Richard Imlay sworn 4 August 2022 (Funding Agreement). 12 Under the terms of the Funding Agreement, if the class action is successful then the Funder is entitled to be reimbursed for the costs of the class action that the Funder has paid "Funding Costs" and the "Additional Sum". 13 The "Additional Sum" is defined, relevantly at cl 6.5 of the Funding Agreement, to mean: (a) 35% of any monetary compensation (other than a Benefit); and (b) 25% of the value of any Benefit, received in satisfaction of a client's claims (the client being a group member who has signed the Funding Agreement). 14 The Funding Costs and the Additional Sum are paid out of the total of the entitlement from the class action of all group members who have signed Funding Agreements (the Final Amount) (cl 6.2). If the Funding Costs and the Additional Sum together are more than the Final Amount, then the Funder receives the Final Amount (rather than the Funding Costs and the Additional Sum) (cl 6.4). 15 "Benefit" is defined broadly in the Funding Agreement, and extends to an increase in the value of a Pre-AWI on account of any declaratory or injunctive relief. 16 Any "Benefit" is valued by an expert having relevant expertise, and the value is then determined by a Queensland barrister of not less than 12 years' seniority, chosen by the Applicants' solicitors. There is a right of review (Review Application) by a member of the Victorian or New South Wales bar of not less than 12 years' seniority (Review Barrister) (cll 6.9.1- 6.9.4). The value that is determined by the Review Barrister in the Review Application is binding (cl 6.9.4). 17 The "Additional Sum" becomes payable on the sale, disposal, transfer, assignment, or encumbrance of the funded group member's interest (cl 6.9.5), with 2 percent interest per annum accruing up to a maximum of 10 percent (cl 6.10.3). In the meantime, the unsold group member agrees to certain matters, including the Applicants' solicitors bringing legal action on their behalf, designed to ensure that the Funder may lodge a caveat over the funded group member's interest in their Pre-AWI (cl 6.10.1).

AMICUS' SUBMISSIONS 18 The submissions of the amicus were confined to proposed order 4 of the Application and, in particular, the contents of the proposed opt out notice (in so far as it concerns a foreshadowed application for a Common Fund Order or a FEO), and associated obligations under the Funding Agreement available to group members. 19 The amicus submits that the text of the proposed opt out notice envisages group members falling into two principle sub-groups, namely, those who have sold or surrendered their Unit and seek damages, and those who have not yet sold or surrendered their Unit and who seek declarations and injunctions only. According to the affidavit of John Mitchell affirmed 31 May 2022 at [23], there are approximately 4,000 group members in this latter category. 20 There is a further division of group members, into those who have signed a Funding Agreement and those who have not. The amicus represents those group members who have not yet sold or surrendered their Unit and who have not signed a Funding Agreement. 21 The amicus submits that if successful in the proceeding, the unsold members (whether funded or not) will not obtain damages or compensation. The relief sought by the unsold members is limited to injunctions and declarations. The amicus submits that this feature of the relief sought by the unsold members is critical to the context and outcome of this application. 22 The amicus submits that one way of conceptualising the loss alleged to be suffered by the unsold members is to say that by reason of Aveo's unconscionable conduct and/or misleading or deceptive conduct, they have suffered a reduction in the present value of their property - being a paper loss or a non-crystallised loss in circumstances where the property is not yet sold. 23 The amicus submits that the structure of the Funding Agreement reveals that the Funder's position is that, by obtaining injunctions prohibiting Aveo from engaging in the unconscionable conduct or from making particular representations, the unsold members obtain a benefit - being the avoidance of a loss in the present value of their property. Under the Funding Agreement, the Funder is entitled to a commission on the value of that remedy or avoidance of loss. 24 The amicus submits that under the Funding Agreement, the obligations of unsold members are as follows: (a) the unsold group members agree to pay the Funder, on a deferred basis, 25% of the value of any "Benefit" received; (b) "Benefit" is defined, broadly, to include, inter alia, the value of any declaration or injunction; the value of any non-monetary compensation; the value of any financial concession; the value of any redress or relief; and is not limited to the value of any increase in the value of the group members' property; (c) upon settlement or judgment, the Applicants' solicitors may obtain a written valuation of the Benefit from the Review Barrister to make a written determination as to that value, with the right to a Review Application; (d) the quantum of that value (called a deferred sum) only becomes payable to the Funder upon sale or disposition (or assignment, encumbrance etc.) of the property, provided that certain conditions are met; (e) the deferred sum accrues interest at 2% per annum calculated daily with a cap of 10%; (f) the Funder obtains a charge over the group members' property and can lodge a caveat on the property title; and (g) if no consent to caveat is provided, the group member pays the deferred sum up front (i.e. there is no deferral). 25 The amicus submits that the structure of the Funding Agreement envisages that the unsold funded members suffering a paper loss, may obtain (by settlement or judgment) redress constituted by a paper gain (whether commensurate or not to the loss) and are bound in those circumstances to pay the Funder a 25% commission on the value of the paper gain. 26 The amicus submits that any benefits which may accrue to the unsold unfunded members in signing up to the Funding Agreement are outweighed by significant commercial risks and potential downsides. These potential risks and downsides include, in the amicus' submission, the prospect of the charge and/or caveat over the property deterring potential purchasers; the prospect that the value of the benefit is determined by reference to matters other than any increase to the value of the property; and the risk of the "benefit" valuation process resulting in a debt owed to the Funder, which is unrelated to the ultimate sale price of the Unit. The amicus further submits that a FEO carries the same commercial risks and downsides. 27 The amicus submits that the following aspects of the operation of the Funding Agreement have been omitted from the proposed opt out notice: (a) the charge on the property as security for the deferred sum (clause 6.10.1); (b) the caveat lodged on title in favour of the Funder (clause 6.10.1); (c) the prospect of further court proceedings (and therefore liability for legal costs) being brought on behalf of the group member regarding the priority of the charge (clause 6.10.2); (d) the fact that interest accrues on the deferred sum (clause 6.10.3); (e) the fact that the quantum of the "Benefit" is determined without input from the group member (clauses 6.9.1 and 6.9.2); (f) the limited review rights as to the value determination which, if exercised, require the group member to obtain and present evidence and submissions within a 21-day period (clause 6.9.3); (g) the fact that relevant persons involved in the benefit determination are chosen by the Applicants' solicitors at their sole discretion (clauses 6.9.1, 6.9.2, 6.9.3); (h) the fact that any increase in the value of the group members' property is determined as at the date of the court order or settlement, and that the value as at that date may have no relation to the ultimate sale price of the property; (i) the fact that the "benefit" is not limited to increases in property value, and can comprise an indeterminate (or difficult to determine or contest) value of any financial concession; and/or value of any non-monetary compensation or other redress or relief (definition of "Benefit"); (j) the precise quantum (25%) of the "portion"; and (k) whether the deferred sum relates to legal costs or commission or both. 28 The amicus further submits that other aspects not addressed by the proposed opt out notice include: (a) the prospect that by reason of legislative, commercial or other change, circumstances as at the date of sale may mean that group members can sell their Unit free from any detriment by reason of the alleged unconscionable conduct or misleading or deceptive conduct, in any event; (b) Aveo's contention that unsold members do not need to sell their Units via the Aveo Way program; and (c) the prospect of further litigation where Aveo materially alters the form of management agreement it offers to incoming residents and it is contested whether Aveo made such a change "as a result of the proceeding" (see definition of Benefit at (c)). 29 The amicus submits that the opt out notice should include reference to the above matters. 30 The amicus submits that the fact that the Funding Agreement is available for inspection does not adequately address the omission of the above identified information. 31 The amicus submits that the prospect of causing distress to the unsold unfunded members is not a reason for not notifying them of the risks of continuing to participate in the proceeding. 32 The amicus submits that the proposed opt out notice refers to the prospect of an application for a Common Fund Order or a FEO but that no meaningful explanation, at least as it concerns the unsold unfunded members, is given as to the differences between those two types of orders. 33 The amicus also submits that there are other, simpler solutions to redrafting the terms of the proposed opt out notice. This could be achieved in the following ways: (a) First, the class could be redefined to exclude unsold group members. (b) Second, the Applicants could be given a deadline (prior to issuing any opt out notice) by which they have to make a FEO. The benefit of this option, in the amicus' submission, is that the opt out notice could state with certainty, rather than foreshadow the prospect of, a FEO, including the consequences for the unsold unfunded group members. (c) Third, a separate notice could be drafted addressed to the unsold group members. As the unsold group members are current residents of Aveo villages, their identities and addresses can be ascertained. This option, in the amicus' submission, could reduce the length of the notices to both sub-groups, eliminate unnecessary parts not applicable to the particular sub-group, and permit more targeted and meaningful disclosure to unfunded unsold members. 34 The amicus submits that amendments should be made to paragraphs 9, 31, 50(a), 56 and 57 of the proposed opt out notice as identified in the amicus' written submissions. 35 The amicus, by reply submissions filed 8 August 2022, made the following further submissions: (a) That the interests of the unsold unfunded members are best served by not participating in the proceeding. (b) That it is unsatisfactory to proceed with an opt out notice which foreshadows the prospective application for a FEO, but without being able to properly describe it. This is because the recipients of the opt out notice cannot make an informed decision whether to opt-out if they do not know of, or cannot assess, the risks that the FEO will pose. (c) That one option involves issuing an opt out notice now, but on the proviso that there will be a second opt-out opportunity; alternatively, an extension to the period during which a group member may opt-out. The amicus submits that the Court has such a power under s 33J of the Act. (d) That certain amendments, additions and deletions to Schedule 1 to the opt out notice being the summary of the Funding Agreement in paragraphs 7-13 of the Schedule could be made.

AVEO'S SUBMISSIONS 36 Aveo adopts the submissions of the amicus save for correcting one factual matter. Aveo invites the Court to embrace the second option proposed by the amicus, namely, providing a deadline (prior to the issuing of any opt out notice) by which the Applicants have to make a FEO.

CONSIDERATION 37 The principles applicable to the content of opt out notices were not in dispute between the parties and may be conveniently summarised as follows: (a) The guiding purpose of an opt out notice is to provide group members with sufficient information about the proceeding to make an informed decision as to whether to stay in the class or whether instead to opt out of it: King v GIO Australia Holdings Ltd [2000] FCA 1869 (King) at [4] per Moore J and on appeal, King v GIO Australia Holdings Ltd [2001] FCA 270 at [15] per Sackville, Hely and Stone JJ; Courtney v Medtel Pty Limited [2001] FCA 1037 (Courtney) at [9]-[10] per Sackville J; Baker v Woolworths Group Ltd (Opt-Out Notice) [2021] FCA 223 (Baker) at [3] per Perram J. (b) The achievement of that guiding purpose necessarily requires the opt out notice to be comprehensible to its intended recipients. The opt out notice must therefore be in plain English and such that it will make sense to persons who are not lawyers: Komlotex Pty Ltd v AMP Ltd [2020] NSWSC 504 (Komlotex) at [160], [188] per Ward CJ in Eq; Courtney [10] per Sackville J; King at [10]; McMullin v ICI Australia Operations Pty Ltd (No 6) [1998] FCA 658; 84 FCR 1 at 5 per Wilcox J; Baker at [3] per Perram J. (c) There is tension between these two aims: too much information too densely expressed will result in a notice which, whilst accurate, will be unsuited to the delivery of its "payload"; see King at [4]. That said, the pursuit of brevity may result in there being no "payload" to deliver: see Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 4) [2010] FCA 749 (Pharma-a-Care) at [20]-[21] per Flick J; Baker at [4]. (d) The content of the notice should state its contents as precisely as possible, but with the objective of doing so simply; King at [10]. Despite the need for adequate information, a notice should not contain unnecessary information that has potential to either confuse or intimidate the person to whom it is addressed; Pharm-a-Care at [20] per Flick J. 38 Consistent with these principles, an attempt to summarise the content and effect of a complex legal document may result in more harm than good to the readability and digestibility of an opt out notice. As Moore J noted in King at [18]: The fee agreement is a lengthy document which contains many features. The danger in endeavouring to summarise the essence of the fee agreement is that the summary may highlight either attractive or unattractive features (or both). Attempting to create a balanced summary may involve reference to detail that destroys the summary's utility. I have made several attempts to do so as part of describing the position a group member may be in at a point, if it is ever reached, where individual reliance and loss must be proved. However each attempt has resulted in a summary that is either too complex or fails to deal, in a simple and straightforward way, with the various combinations and permutations that could arise. I have ultimately decided that the notice should not endeavour to explain to a recipient what the consequences are of not opting out other than the important legal consequence of the group member being bound by the judgment. I have, at the conclusion of the approved notice, repeated (and I hope emphasised) the legal significance of the notice and the desirability of a recipient getting advice if that is what the recipient was minded to do. 39 Drawing these threads together, an opt out notice should strive to give sufficient detail of important matters, but should invite the reader to seek legal advice where giving further detail may be counterproductive to the fundamental objects of the notice; the more so where several differing outcomes may arise depending on the circumstances. That caution extends to the content and effect of funding agreements; see Komlotex at [186]. 40 In Lenthall v Westpac Banking Corporation (No 2) [2020] FCA 423; (2020) 144 ACSR 573 (Lenthall), Lee J emphasised, at [27], the importance of giving "accurate and complete information as to the present funding arrangements …". 41 Relevantly, in Lenthall, Lee J also emphasised the importance of avoiding complexity, at [36], and at [44], endorsed Flick J's observations in Pharm-a-Care that it was "of importance to ensure that a notice does not contain unnecessary information which may simply have the potential to either confuse or intimidate the persons to whom it is addressed". With an eye to achieving those aims, Lee J re-drafted a proposed form of notice himself, as did Moore J in King. 42 On 15 August 2022 the parties forwarded to my chambers a further proposed opt out notice which incorporated many but not all of the amicus' and Aveo's suggested amendments and deletions to the proposed opt out notice. The draft opt out notice that was provided also did not contain the list of Aveo villages to be incorporated in Schedule 2 of the opt out notice and Annexure D to the orders of this judgment. 43 After a series of correspondence between the parties and my Associate, on 6 September 2022, I requested, through my Associate, that the parties provide an updated draft opt out notice which clearly set out, in mark-up: (a) all of the changes which are proposed by Aveo but which are not agreed to by the Applicants; and (b) the further changes which are proposed by the Amicus but which are not agreed to by the Applicants. 44 On 9 September 2022, the solicitors for Aveo forwarded to my chambers revised copies of the draft opt out notice and draft newspaper notice with proposed changes of Aveo and amicus identified in mark-up. I now turn to consider the proposed options advanced by the parties by reference to this draft opt out notice. 45 The first option advanced by the amicus was to invite the Applicants to redefine the class to exclude unsold group members. That option was rejected by the Applicants and I shall say nothing further about it. 46 The second option advanced by the amicus, which is supported by Aveo, is for the Court to fix a date prior to the issuing of any opt out notice by which the Applicants have to make application for a FEO. Putting to one side, and without determining whether the Court has the power to make a FEO at an interlocutory stage before settlement is reached or judgment obtained, it is not appropriate in the circumstances of this case, to make an order fixing a date by which the Applicants apply for a FEO: BMW Australia Limited v Brewster [2019] HCA 45; 269 CLR 574; 94 ALJR 51; 374 ALR 627 per Kiefel CJ, Bell and Keane JJ at [89] and [90] and per Gordon J at [143]. The latest proposed draft of the opt out notice adequately explains, in my view, to group members who have not signed a Funding Agreement that an application may be made to the Court for a Common Fund Order or a FEO. I do not accept the submissions of the amicus and Aveo of the potential harm to unsold unfunded members of a FEO. The Court's supervisory capacity to make sure that group members of treated fairly is very well-trodden ground. The Court, in considering whether to make a FEO and its terms, will ensure that such group members are fairly treated such that the concerns expressed by the amicus and Aveo are addressed in an appropriate manner so as to protect those group members' interests. 47 The third option advanced by the amicus is a separate opt out notice addressed to the unsold group members. I am not persuaded that the production of a second opt out notice directed to unsold group members would achieve anything and may serve to create at least some confusion. For that reason, I reject the amicus' proposed third option of a separate notice to unsold group members. 48 The amicus in her reply submissions suggested a further option of issuing an opt out notice now, but on the proviso that there will be a second opt out opportunity, alternatively, an extension to the period during which a group member may opt out. I reject this option as it is also likely to be productive of confusion in the minds of group members. 49 Having considered the various texts advanced by the Applicants, Aveo and the amicus I have settled the text of the opt out notice and the newspaper notice in the form annexed to the orders I have made today. I am satisfied that the settled text of the opt out notice meets the guiding purpose of an opt out notice in providing group members be they sold or unsold group members or funded or unfunded group members with sufficient information about the proceeding so as to make an informed decision as to whether to stay in the class or whether instead to opt out of it. The settled form of the opt out notice is, in my view, clear in its expression and accurately describes the proceeding; who are the group members; what the proceeding is about; a group member's liability for legal costs; the potential for a Common Fund Order or a FEO and the ability and consequences to opt out. I am also satisfied that Schedule 1 to the opt out notice accurately summarises the terms of the Funding Agreement and is expressed in terms which are most likely to be understood by the recipient.

DISPOSITION 50 I will make orders in the form published with this Reasons for Judgment. I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Anderson.

SCHEDULE OF PARTIES VID 996 of 2017 Second Applicant MEREDITH ANNE LUKE (IN HER CAPACITY AS THE CO-EXECUTOR OF THE ESTATE OF ROBERT COLIN LUKE, DECEASED)

Third Applicant ANN MARY STROUD (IN HER CAPACITY AS THE CO-EXECUTOR OF THE ESTATE OF JOAN MARY COLOMBARI, DECEASED)

Fourth Applicant NEIL BERNARD COLOMBARI (IN HIS CAPACITY AS THE CO-EXECUTOR OF THE ESTATE OF JOAN MARY COLOMBARI, DECEASED)

Federal Court Act 1976(Cth)

At a glance

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Judgment (33 paragraphs)

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Legislation Cited (2)

Cases Cited (9)