Murphy v Trustees Catholic Aged Care Sydney - [2017] NSWCATAP 139 - NSWCATAP 2017 case summary — Zoe

NSWNSWCATAP

Murphy v Trustees Catholic Aged Care Sydney

[2017] NSWCATAP 139

NCAT Appeal Panel|2017-02-06

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At a glance

Source facts

Court

NCAT Appeal Panel

Decision date

2017-02-06

Source

Original judgment source is linked above.

Judgment (54 paragraphs)

[1]

Background

This is an appeal from a decision published by the Tribunal on 22 September 2015 (which we will refer to as the Decision). Although the Notice of Appeal was not filed until 30 August 2016 leave to extend the time for filing of the appeal has previously been granted and there is no issue therefore between the parties that the appeal should not proceed on the basis that it was filed beyond the time regulated by the Civil and Administrative Tribunal Regulation 2013 (the Regulation).
At the appeal hearing the respondent tendered the following folders without objection from the appellant: 1. A bundle of documents constituting the respondent's evidence and submissions at the first instance hearing (marked Exhibit 1): 2. Three folders containing the appellant's evidence (including the amended application) tendered at the first instance hearing (Exhibit 2); 3. A title search in respect of the land upon which the retirement village is located (Exhibit 3); and 4. A draft order proposed by the respondent (Exhibit 4).
In addition to the Notice of Appeal, the Appeal Panel was provided with the following documents: 1. The Reply to Appeal filed by the respondent; 2. A document filed by the appellant headed "Grounds for Appeal"; 3. The respondent's submissions in reply to the appellant's grounds of appeal; 4. A transcript of the first instance hearing prepared by the respondent (we note that at the appeal hearing the appellant indicated that he had no objection to the transcript and that it accurately recorded the first instance hearing); and 5. The appellant's reply submissions.
The dispute between the parties arises out of the agreement which was entered into between the parties by which the appellant, as resident, and the respondent, as operator, provided for the appellant to reside in a retirement village. Their relationship is governed by the Retirement Villages Act 1999 (RV Act). We shall refer to the appellant as Mr Murphy and to the respondent as the Operator.

[13]

Order 1

Mr Murphy relied upon s 51 of the RV Act. That section deals with amendments to the village rules and sets out the procedures which are to be followed in the event that either the operator or the residents wish to amend the village rules. Mr Murphy submits that there was no evidence that the section was complied with when the village rules were amended on 17 November 2014. Mr Murphy submitted that there was evidence before the Tribunal concerning the procedures adopted at the meeting of 17 November 2014, which demonstrated that s 51 had not been complied with and nor had the requirements set out in the Retirement Villages Regulation 2009 (the RV Regulations) been followed. Mr Murphy asserted that what happened at the meeting of 17 November 2014 was as follows: 1. The acting chair Mr O'Brien appointed an individual as the returning officer. Mr Murphy stated that that individual was not eligible to hold the position and was also listed as an apology for the meeting; 2. The returning officer did not comply with the RV Regulations in that the returning officer must be a resident who is not a member of the residents' committee and must be selected by a show of hands; and 3. The requirements of s 51(3A) were not complied with. This provision requires the Operator to notify residents of the outcome of any vote taken to amend village rules.
We interpret Mr Murphy to be submitting that the Decision was in error in finding that the village rules were amended by special resolution passed at a meeting on 17 November 2014. We interpret the Notice of Appeal to raise also another ground, namely that the Decision was in error in finding that the amended village rule was not in conflict with s 59A of the RV Act. That section, in summary provides that the operator must take all reasonable steps to ensure that emergency and home care service personal have unimpeded vehicular access to the residential premises in the village at all times.
A further ground of appeal with respect to order 1 appears to be that the Decision was in error in failing to mention Mr Murphy's complaint concerning a resident who has parked his car in visitor parking for the past four years with the consequence that this resident has deprived the family of Mr Murphy of a place to park their vehicles on numerous occasions.
A further ground of appeal with respect to order 1 is that the Decision was in error in declining to make an order to the effect that the Operator should prevent changes to the village rules which are detrimental to the residents' future.

[14]

Order 2

Mr Murphy's ground of appeal is that the Decision misunderstood an important fact, namely describing Mr Murphy's complaint as being that the source of funds used by the Operator to fund the 2013/2014 deficit came from a capital works fund when, in fact, Mr Murphy's concern was that there had been a "misdirection of funds" from the Vaughan Village Special Account. Mr Murphy submitted that there was no evidence that there was a capital works fund established. Mr Murphy submitted that the Vaughn Village Special Account constituted a fund established from monies paid by the Operator in "reparation for not providing ongoing care originally advertised to the early residents". Mr Murphy further submitted that the Decision did not deal with the fact that the fund (being a fund that represented "reparation money") had been misused by the Operator for the purposes of funding deficits.
Mr Murphy further submits that the Decision was in error in failing to have regard to RV Regulation 33(2) which provides that for the purposes of cl 20(5) of Sch 4 of the RV Act an operator is prevented in all circumstances from making a proposal under cl 20(1)(b)(i) or (ii) of that schedule that residents make good the whole or any part of any outstanding deficit except in circumstances where the deficit or the relevant part of the deficit resulted from a request by the residents for an additional item of capital or service.
In essence, Mr Murphy's submissions is that the effect of cl 33(2) of the RV Regulations when read with cl 20 of Sch 4 of the RV Act and s 120C, in the absence of the lawful consent of the residents, is that an operator must make up the deficit from its own funds and is prevented from seeking the consent of residents that the residents pay. There is an exception in the case where the deficit resulted from a request by residents for an additional item of capital or service.
Accordingly, the effect of Mr Murphy's submission with respect to order 2 is that the Decision was in error in concluding that Mr Murphy had not made out a case justifying the proposed order 2.

[18]

Order 6

Mr Murphy contends that the Decision was in error in deciding that the claim for compensation was unnecessary or premature. Mr Murphy relied upon s 128 of the RV Act which gives power to the Tribunal to vary a provision of a village contract. He also relied upon s 25 which provides that to the extent that any term in a village contract is inconsistent, to the detriment of the resident concerned, with the information contained in the disclosure statement provided to the resident concerned, the contract is construed as if it contained the information in the statement instead of the inconsistent term. Further, Mr Murphy contends that the Decision was in error in stating that the effect of s 25 is to bring about a deemed alteration of any village contract to provide consistency with the disclosure statement and that, accordingly, there was no need for any order. Mr Murphy further contends that the Decision was in error in finding that Mr Murphy has not demonstrated any loss for which he is entitled to compensation because the amount to be charged does not arise until he leaves the village and, until then, no loss has occurred.
A further ground of appeal concerning order 6 was Mr Murphy's submission that the Tribunal ought to make orders by reason of the apparent confusion concerning the owner of the land upon which the village is situated. Mr Murphy referred to ss 182A, 182B, 182C and 182D of the RV Act. Those provisions refer to the creation of a charge over all of the land within the retirement village for the purposes of securing the entitlement to a refund to be paid to the resident. Although Mr Murphy referred to the amended application for the purposes of identifying the orders he sought, our examination of the amended application does not reveal the orders which Mr Murphy seeks. At a practical level, it appears as if Mr Murphy merely wishes the Operator to disclose the real owner of the land upon which the village is situated. We will revert to this aspect later in these reasons.

[22]

Orders Appeal Panel Should Make

Mr Murphy has supplied a document setting out the orders which he submits the Appeal Panel should make. In summary they are these: 1. Order the Operator to enforce village rules and to prevent changes which will be detrimental to the villagers' future; 2. Order the Operator to comply with the requirements of the RV Act and Regulations and order monies withdrawn from the Vaughan Village Special Account to balance the deficit budget for the year 2013/2014 be made good to the Vaughan Village Residents Funds; 3. Order the Operator to refund monies charged for capital works and renovating units and providing security for the year 2013/2014 and that this matter be referred to the Director - General under s 189(d) and an investigator be appointed; 4. Order the Operator to carry out capital replacement in respect of the fountain, entrance steps, retaining wall, grill around base of tree in courtyard and carpets and fixtures in units, such replacement being to their original standard; 5. Order the Operator to conform to the RV Act in presenting proposed annual budgets and obtaining proper consent and further give an order directing a refund of overpaid recurrent charges for the year 2013/2014; 6. Order the Operator to amend the licence between the Operator and J and G Murphy so it is consistent with the Disclosure Statement. Also order compensation to ameliorate the financial and physical disadvantage they have suffered from this defective licence by reducing the annual departure fee to 1.5% and reducing the number of years the annual departure fee is charged to five years; 7. Order that the Tribunal direct the Director - General to investigate and report as to whether the Operator will be able to pay departure fees out of ongoing contributions and whether the Operator has given false or misleading information to residents; 8. Order the Operator to be aware that the body calling itself the Vaughan Village Residents' Committee is in fact a subcommittee of a non-existent residents' committee and that it is a committee which is not a residents' committee as contemplated by the RV Act; and 9. The Tribunal order that costs of the respondent not be paid by Mr Murphy, that the Minister be asked to intervene and fund the provision of advisory and advocacy services to Mr Murphy and that an investigator be appointed in accordance with the provisions of the RV Act and Regulations.
Mr Murphy did not specifically identify which of his grounds of appeal were said to raise questions of law and which were said to constitute grounds identified in cl 12 of Sch 4 of the NCAT Act. However, he did attach written submissions to the effect he had suffered a substantial miscarriage of justice because: 1. he was denied a fair hearing; 2. the Decision of the Tribunal was not fair and equitable; 3. the Decision was against the weight of evidence; and 4. the Member erred in making his decision in relation to the orders sought.
Mr Murphy submitted that he was denied a fair and equitable hearing and suffered procedural injustice. The basis for these submissions were: 1. He was not supplied with a hearing loop, was limited to two hours to present his case and was not allowed to present his case as he wanted; and 2. He was not allowed to add new material and was not allowed to complain that he could not hear.

[24]

Appellant's Written Submissions

The appellant filed a document headed "Appellant's Grounds for Appeal" in which he elaborated upon the matters raised in the Notice of Appeal.
In support of the submission that he was denied a "fair and equitable hearing and procedural justice", Mr Murphy submitted: 1. He had been denied a working hearing loop; 2. He had been denied procedural fairness by being denied a reasonable opportunity to present his case which concerned nine orders and 660 pages of evidence; 3. He was given the right to reply to the case presented by the Operator without being told beforehand that he would have such an opportunity. He did not take notes and could not hear a lot of what was said and therefore the right to reply was not fairly available; 4. He was "continually harassed" when presenting his case by the Senior Member's interruptions; 5. He was told to keep to the point when addressing the Tribunal; 6. He was told that he could not deal with matters concerning the ownership of the village as opposed to its operation; 7. He was told that there was no power given to the Tribunal to direct the Director General to do anything; 8. He was told he was wasting the Tribunal's time; 9. He was told to keep quiet when he tried to complain that he could not hear; 10. He was told by the Senior Member that he had had a meeting with the respondent before the hearing to ascertain who was the Operator and who owned the village. Mr Murphy submitted that he was not at that meeting and that such meeting was inappropriate; and 11. He was made aware during the hearing that the Senior Member had not read the application.
Under the heading that the Decision was against the weight of evidence, Mr Murphy stated that the Operator provided very little evidence.
The submissions then dealt with the Decision in respect of each of the orders sought. Mr Murphy's submissions have been incorporated into these reasons where we summarise the submissions contained in the Notice of Appeal.

[25]

Respondent's Submissions

The Operator filed written submissions (in addition to the Reply to Appeal) opposing Mr Murphy's grounds of appeal. The following paragraphs summarise the effect of the Operator's submissions: 1. Mr Murphy was provided with a hearing loop. It was not compatible with Mr Murphy's hearing device. It was open to him to make enquiries with the Tribunal before the hearing to ensure that his device was compatible; 2. In any event, Mr Murphy interacted with the Member at the hearing consistent with him being able to hear the proceedings. He also made some oral submissions suggestive of his ability to hear. Further, he interjected from time to time, again consistent with him being able to hear and there was no complaint by him during the hearing suggesting that he could not hear; 3. The time limitation imposed by the Tribunal was reasonable and consistent with the obligations contained in s 38(6) of the NCAT Act. The time allocated to both parties was equal. Mr Murphy has not identified further submissions that he would have made had he been given more time and has not demonstrated how he was disadvantaged by the restriction imposed; 4. The transcript reveals that the Member was doing no more than exercising reasonable case management procedures; 5. In relation to the assertion that the Member had a meeting with the Operator before the hearing, the Operator states that that did not occur and that there is no foundation or basis for the allegation; 6. In relation to the assertion that the Member had not read the application, the Operator states that the Member indicated at the commencement of the hearing that he had reviewed the documents provided by the parties. The assertion by Mr Murphy has no foundation; and 7. The assertions made by Mr Murphy that the Decision was made against the weight of evidence has not been supported by any evidence put forward by Mr Murphy.
In addition, the Operator replied to each of the submissions made by Mr Murphy in respect of the nine orders which he had sought. We will deal with each of the respondent's submissions in turn.

[26]

Order 1

The Operator submitted that Mr Murphy has not identified any error of law and it was open to the Senior Member to find on the evidence that the relevant meeting complied with the requirements of Sch 7 of the RV Regulation and s 51(3) of the RV Act. There was a finding to that effect in the Decision: see par 55. The Operator submitted that Mr Murphy's application (see page 15 of the amended application) demonstrated that the Residents' Committee proposed the amendment per s 51(1)(b) of the RV Act. The Operator submitted that Mr Murphy did not file any evidence in support of his assertion that the Operator was in breach of s 59A of the RV Act. The Operator submitted that the finding by the Senior Member at par 56 of the Decision (to the effect that there was no evidence that the amended village rule concerning temporary parking had any untoward effect on access of emergency vehicles) was open on the evidence.
The Operator further submitted that Mr Murphy did not raise or refer to s 51(3A) of the RV Act in the proceedings below. That subsection requires the operator to notify the residents of the village of the outcome of any vote taken to obtain the consent of the residents within 7 days after the operator becomes aware of the outcome of a vote amending the village rules.
The Operator submitted that, in any event, the failure to comply with s 51(3A) does not invalidate the special resolution passed by the residents.
The Operator referred to Mr Murphy's submission that the Tribunal erred in not considering any other breach of the village rules brought to the attention of the Tribunal in the application and the Operator submitted that Mr Murphy has not identified any error in the Senior Member's exercise of discretion: see House v King (1936) 55 CLR 499. The Operator submitted that order 1 of Mr Murphy's application sought an order under s 128 of the RV Act directing the Operator to comply with the Act or an order restraining a breach of the village rules or contract.

[36]

Order 1

Insofar as order 1 is concerned, Mr Murphy repeated that the minutes of the meeting of the residents association dated 17 November 2014 did not conform with the requirements of the RV Act. He casts doubt on the efficacy of including the postal votes as the returning officer (P Hansen) was not present at the meeting to certify the authenticity of the voting papers. Mr Murphy submitted that the resolution concerning car parking shows a different number of votes for and against compared with the resolution in respect of the quarterly report. Mr Murphy concludes that the special resolution concerning car parking failed. Mr Murphy further submitted that the returning officer was not eligible and he relies upon the definition of returning officer contained in cl 1 of Sch 7 of the RV Act. That definition provides that a returning officers means a resident who is not a member of the residents committee and who is selected by a show of hands at the meeting of the residents;
Further, in respect of order 1, Mr Murphy submitted that the finding by the Tribunal that the amended village rule has not had any untoward effect on access of emergency vehicles was not based upon any evidence and that the Operator had the opportunity to demonstrate that the new rule did not impede the obligations set out in s 59A but failed to provide such evidence; and
A further point made by Mr Murphy concerning order 1 (this was not referred to in his written submissions in reply but was referred to in his oral submissions at the appeal hearing) was that in his application for an order, he referred to the fact that other users of units do not comply with obligations not to hang out washing so that it is visible from the outside. Mr Murphy's submission is that those matters were not dealt with in the Decision.
At the hearing of the appeal, counsel for the Operator made submissions with respect to order 1 and it is convenient to summarise the effect of those submissions at this point as follows: 1. Counsel submitted that there was evidence of a special resolution having been passed by the residents on 17 November 2014. The Tribunal was entitled to take into account that some level of informality is to be permitted about the way meetings occur. If, for example, there was a complaint about the fact that there was no returning officer, the minute, on its face, indicates substantial support well beyond 70% for the resolution to be passed. If the complaint concerns the fact that the resolution was not circulated to owners after the meeting, there is evidence of the proposed changes to the resolution before the meeting and that at a subsequent meeting the residents became aware by reason of confirming the accuracy of the prior minutes of 17 November 2014; 2. In relation to the issue of washing, the Operator proposed to consent to an order and during the course of the appeal hearing a draft order was handed up for consideration by the Appeal Panel (this was marked Exhibit 4). The Operator indicated it had no objection to the Appeal Panel making an order in the terms proposed by the Operator.

[37]

Order 2

In his reply submissions, Mr Murphy submitted that he had not submitted that the relevant fund in question was a capital works fund as defined by the RV Act. He submitted that the Operator agreed that the relevant fund was not a capital works fund. Rather, his submission was that the fund consisted of money "of the residents". He submitted that the money was a "reparation" payment from the Operator paid some years ago because "the original ongoing care Vaughan Village originally advertised could not be provided". The money constituted 50% of the departure fees of the original residents. Mr Murphy's case was that over the years the Operator had used those funds as if they were the Operator's funds.
Mr Murphy's submission is that over the years, the budget has operated in deficit and that the deficit has been made up by the Operator drawing down on the fund of money owned by the residents. Mr Murphy submitted that the RV Act states that if the final accounts show a deficit then the operator's obligation is to make up the deficit from its own funds. At the hearing, Mr Murphy acknowledged that he could not produce documentary evidence concerning the establishment of the fund or documentary evidence concerning who owned the fund.
Counsel for the Operator submitted that the fund described by Mr Murphy as a reparation fund represented monies returned to the residents to be able to be used for funding various things in the village. Counsel submitted that over the years, the Operator, in conjunction with the residents, proposed budgets that have contained deficits and with the agreement of the residents, monies from the fund had been used to fund the proposed deficit. The residents have benefited because the recurrent charges have been kept at a lower level than otherwise would have been required. In relation to the year in respect of which Mr Murphy requires the budget deficit to be made up by the Operator (namely 2013/2014) the Operator presented a budget which was approved by the residents. The evidence for this is contained in the minutes of the meeting of residents held 20 May 2013 which was chaired by Mr Murphy. That meeting records that the residents approved the proposed budget.

[39]

Order 4

During the appeal hearing, Mr Murphy agreed that he had no complaint concerning the order made for the fountain to be repaired or replaced. Rather, his complaint is that the Operator has not fully complied with that order. We informed Mr Murphy that if he maintains the view that the order has not been complied with, he needs to lodge a fresh application with the Tribunal. His remedy is not one which can be dealt with by way of an appeal.
Mr Murphy then made submissions concerning other aspects which were the subject of his proposed order 4 which, he submitted had not been dealt with in the Decision. Mr Murphy referred to the replacement of a collapsed retaining wall by substandard work. He referred to photographs which formed part of his evidence before the Tribunal to demonstrate the inferiority of the work. Mr Murphy submitted that he should have an order from the Tribunal that the wall match the rest of the bricks and is brought up to the standard of the rest of the walls on the property.
In addition, Mr Murphy submitted that he should be entitled to an order in respect of a steel grate which had been removed. Tree roots had caused the grate to be elevated (creating a danger) and rather than fixing the ground levels, the Operator elected to remove the grate. A danger remains. Mr Murphy conceded that this matter was not the subject of his application before the Tribunal and acknowledged that therefore the Appeal Panel could not make an order with respect to that matter.
Mr Murphy said that in respect of repairs and maintenance, the Operator was operating pursuant to a letter dating 22 August 2014 published by Bishop Comensoli. Mr Murphy submitted that the policy described in that letter was not consistent with the Operator's obligations under the RV Act.
Counsel for the Operator submitted that the letter from the Bishop outlined the Operator's policies with respect to the up keep and maintenance of the units and the associated cost. Counsel submitted that Mr Murphy is seeking orders in respect of replacement of carpets and fixtures in units generally. However, there is no evidence before the Tribunal that the carpets or fixtures in any unit and, particularly his own unit, need replacing. Further, if they do need replacing, the cost is irrelevant because if they are items of capital, the Operator must pay for them. Counsel submitted that there was no evidence before the Tribunal that Mr Murphy's unit required capital replacement in relation to carpets and fixtures and accordingly, there was no need for an order.
Counsel for the Operator submitted that the evidence concerning the grate was that the residents required the grate to be removed and that until the hearing of the appeal there had been no complaints about the uneven levels at ground level.
With respect to the retaining wall, counsel for the Operator submitted that where the wall has been renewed, it is of a different colour because it is of a younger age than the balance of the wall. Counsel submitted that there was no evidence that the wall was structurally unsound.
Mr Murphy also made a submission that the Decision failed to address the issue of entrance steps but during the hearing of the appeal conceded that that matter did not form part of form part of his application.

[44]

Order 1

The Decision accurately states that Mr Murphy sought an order that the Operator enforce village rules and prevent changes detrimental to the residents' future. In our view, a Tribunal cannot make an order in the terms requested. There are two reasons for this. First, an order requiring an Operator to enforce village rules goes beyond the power provided to the Tribunal under s 128 of the RV Act. That section provides that the Tribunal may make an order directing the Operator to comply with a requirement of the Act or Regulations, or an order that restrains any action in breach of any village contract or rule, or an order that requires the performance of any village contract or rule. There is a need, in our view, to identify the subject matter of the order so that the subject matter requiring compliance, or restraining action or requiring performance is identified. An order to enforce the Act or Regulations generally lacks sufficient particularity. Such an order does no more than repeat the effect of the Act, the Regulations or the village rules insofar as they impose obligations on the Operator.
Secondly, an order to prevent changes detrimental to the residents' future is in our view beyond the scope of the orders which the Tribunal may make under s 128 of the RV Act. In addition, such an order suffers from ambiguity because some changes may arguably be beneficial to some residents and detrimental to others.
Mr Murphy asserted that the village rule as amended would put the Operator in breach of s 59A of the RV Act. The amended village rule modified the prohibition on residents and overnight guests using visitor parking spots by allowing some residents (i.e. those waiting to purchase a space) to do so if in the judgment of the Operator there was no "great pressure for spaces in the visitor parking section".
In the Decision the Tribunal found that there was no evidence that the Operator breached s 59A of the RV Act. Mr Murphy was not able to take us to evidence demonstrating a breach of s 59A. Mr Murphy had the onus of demonstrating a breach. We do not accept Mr Murphy's submission that the Operator has the onus of demonstrating that there has been no breach of s 59A.
Mr Murphy also submitted that the amended village rule had not been approved lawfully. On its face, the minutes of the meeting of 17 November 2014 raise questions as to whether the special resolution was passed lawfully. It appears that 21 residents voted for the rule amendment and 4 against. That would constitute more than 75% and therefore satisfy the requirements for a special resolution. However, Mr Murphy submitted that the returning officer was absent from the meeting. That person is listed as an apology in the minutes of the meeting. Mr Murphy submitted that the returning officer did not satisfy the definition of returning officer as contained in cl 1 of Sch 7 of the RV Regulation. That definition describes a returning officer as a resident who is not a member of the residents committee and is not standing for election to the residents committee selected by a show of hands at a meeting of the residents. Clause 7 states that the result of the vote is to be ascertained by the returning officer and that the returning officer is to count the votes.
In our view, the fact that the returning officer was not present at the meeting must lead to the conclusion that the vote was not counted by the returning officer. The question then arises as to the source of the information contained in the minute, namely that there were 21 votes and 4 against. Some of the votes were postal votes and a question arises as to who took responsibility for the counting of postal votes.
In all of the circumstances, these irregularities cannot be passed off as mere informalities. Rather, they go to heart of the effectiveness of the resolution. In our view, the minutes of the meeting of 17 November 2014 disclose that the special resolution amending village rule 4 concerning parking was not passed validly. In the Decision, the Tribunal found that the village rules were amended by the special resolution purportedly passed on 17 November 2014. In our view, that finding constitutes an error of law in that the Tribunal failed to take into account a relevant consideration (i.e. the absence of the returning officer).
It follows from this that Mr Murphy is entitled to an order that restrains any action in breach of village rule 4 (in the form it was in immediately prior to the purported amendment). The appropriate form of the order consistent with the Tribunal's powers in s 128 of the RV Act is to make an order in these terms: 1. The Operator is directed to take all reasonable steps to ensure residents comply with village rule 4 (in the form it was in immediately prior to 17 November 2014).
To the extent that Mr Murphy asserted that there were other aspects required under order 1 but ignored by the Tribunal, the only matter to which our attention was drawn was that concerning the display of washing. The Operator has proposed an order (a copy of which was handed up at the hearing and marked Exhibit 4) and we propose to make an order in terms of the order proposed. The form of the order as proposed requires the Operator to restrain the breach of village rules 8(b) and 9(a). We think it appropriate to recast the order to make it consistent with our powers under s 128(c)(ii) of the RV Act to read: Pursuant to s 128(c)(ii) of the RV Act, the Operator is ordered to take all reasonable steps to ensure that the occupants of unit 20 comply with the following rules: 8(b): you must not obstruct or permit the obstruction of walkways, entrances, stairways, corridors, fire escapes, light, windows or other parts of the common areas (for example, pot plants, hoses, brooms, racks and other items may present a hazard if left on common areas). 9(a): you must not hang any washing, towels, bedding, clothing or other article on any balcony or other part of your unit in such a way as to be visible from the outside. Such items may be hung on any lines provided in the common areas but only for a reasonable period.

[45]

Order 2

In our view, Mr Murphy's submissions with respect to proposed order 2 must be rejected. Essentially both Mr Murphy and the Operator agree that the source of funds to make up the proposed budget deficit for 2013/2014 (and perhaps some prior years as well) was the fund which came about as a consequence of the Operator offering reparations to the residents. On Mr Murphy's view, the residents are the beneficial owners of the fund and on the Operator's view, as expressed by counsel during the hearing, the ownership of the fund is a matter of some complexity and controversy. It may be a fund held on trust for the benefit of those in residence from time to time. It is not necessary for us to determine who owns the fund except to say that both sides assert that the fund is not the property of the Operator. It follows from that position (i.e. that the fund is not the property of the Operator) that the onus falls to the Operator to establish that it had the residents' authority to use the fund to finance the deficit. The Operator relied upon the meeting of 20 May 2013.
In our view, Mr Murphy's submissions with respect to proposed order 2 must be rejected. Essentially both Mr Murphy and the Operator agree that the source of funds to make up the proposed budget deficit for 2013/2014 (and perhaps some prior years as well) was the fund which came about as a consequence of the Operator offering reparations to the residents. On Mr Murphy's view, the residents are the beneficial owners of the fund and on the Operator's view, as expressed by counsel during the hearing, the ownership of the fund is a matter of some complexity and controversy. It may be a fund held on trust for the benefit of those in residence from time to time. It is not necessary for us to determine who owns the fund except to say that both sides assert that the fund is not the property of the Operator. It follows from that position (i.e. that the fund is not the property of the Operator) that the onus falls to the Operator to establish that it had the residents' authority to use the fund to finance the deficit. The Operator relied upon the meeting of 20 May 2013.
In view of the Operator's concession that the fund was not the property of the Operator, which does not appear to have been made in the proceedings below, we are of the view that the question of whether that fund may be utilised to fund deficits has not been fully considered. In particular, the impact of s 120C(1) and 120C(2)(b) of the RV Act have not been considered. Section 120C provides: 120C Making good of deficit (1) A deficit is to be made good by the operator of the retirement village. (2) Except as provided by the regulations referred to in subsection (3), an operator of a retirement village must not: (a) carry forward a deficit to a subsequent financial year, or (b) request or receive from the residents of the retirement village any special additional payments for the purpose of making good a deficit, or (c) increase or purport to increase recurrent charges payable by the residents of a retirement village in any financial year for the purpose of making good a deficit, or (d) use the whole or any part of the recurrent charges collected by the operator in a financial year to make good a deficit, or (e) use the whole or any part of the capital works fund for the retirement village to make good a deficit. (3) The regulations may prescribe circumstances in which the operator of a retirement village may: (a) increase the recurrent charges payable by the residents of a retirement village for the purpose of making good a deficit, or (b) use the whole or any part of the recurrent charges collected by the operator for the purpose of making good a deficit, or (c) carry forward a deficit to a subsequent financial year. (4) The operator of a retirement village must not charge the residents of a retirement village interest in respect of a deficit.
In the circumstances of what has been conceded by the Operator, the appropriate course is to make an order remitting the application back to the Consumer and Commercial Division of the Tribunal for a rehearing limited to the question of whether the Tribunal should make an order that the deficit of $23,960.00 in respect of the 2013/2014 year paid from the account variously described as the village special account or the reparation account be repaid by the Operator to that account. In our view, the parties should be free to file fresh evidence on this issue. If the parties resolve this aspect of the dispute or if Mr Murphy does not wish to proceed to take advantage of the remittal order, the Tribunal should be so advised so that steps can be taken to set aside the remittal order.

[49]

Order 6

Mr Murphy sought an order which would provide a reduction in the departure fee from 3% to 1.5% and a further reduction in the maximum relevant period from 10 years to 5 years. The maximum reduction would therefore drop from 30% to 7.5%. The basis for this proposed order was that there was an inconsistency between the amounts of the ingoing contributions disclosed in the Disclosure Statement and the amounts Mr Murphy actually paid. There is clearly, in our view, no logical connection between the remedy being sought (the reduction in the departure fee) and the effect of any inconsistency arising by the fact that the departure fee might be based upon a higher figure than that disclosed in the Disclosure Statement. Accordingly, we see no basis for the order sought.
Mr Murphy sought to invoke s 25 of the RV Act which permits the Tribunal to determine a dispute concerning an inconsistency between a term in the village contract with information contained in the Disclosure Statement. The term must be to the detriment of the resident (see s 25(1)). Mr Murphy might be able to argue that he should have compensation for the difference between the departure fee calculated on the figure of $550,000.00 (the maximum stated in the Disclosure Statement) as opposed to the figure which he paid for his unit namely, $560,000.00. That would amount to a maximum of 3% of $10,000.00 or $300.00. However, we were not taken to evidence which demonstrated that the information in the Disclosure Statement operated to Mr Murphy's detriment. Indeed the Disclosure Statement makes it clear that the departure fee is calculated as a percentage of the ingoing consideration which in Mr Murphy's case was higher than the figures mentioned earlier in the context of describing the ingoing contribution. In other words, Mr Murphy paid more to enter than the range disclosed in the Disclosure Statement and the departure fee is to be calculated on what was actually paid. In our view, the appeal with respect to order 6 must be refused.
In addition, Mr Murphy's appeal concerned the Tribunal's findings in relation to the flooring to Mr Murphy's unit. The Tribunal found that the Operator partly paid for such flooring. The Operator's counsel pointed out that this matter was agreed as a special condition in the licence agreement. Mr Murphy was unable to point to any evidence which established a basis for the order which he sought. We cannot see any error in the Tribunal's rejection of this claim.
We refer to Mr Murphy's request for orders concerning the identity of the owner of the land upon which the village exists. At the hearing of the appeal, the Operator's counsel tendered a title search (marked Exhibit 3) which disclosed that the registered proprietor of the relevant land is the trustee of the Roman Catholic Church for the Archdiocese of Sydney. In any event, in the document filed by Mr Murphy in which he sets out the orders which the Appeal Panel should make, there is no reference to this matter and we see no basis for making any order concerning the registered proprietor.

Murphy v Trustees Catholic Aged Care Sydney

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Judgment (54 paragraphs)

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Cases Cited (1)

Cited By (2)