Counsel also contended that s 14A(2)(a) looks to the "mechanism" for consultation, not the actual process of consultation.
26 However, this interpretation is without foundation. In my opinion, when determining whether "all budget consultation processes under any applicable code have been complied with", the Tribunal is entitled to consider the budget consultation processes that have occurred and to assess whether, as a matter of fact, the statutory prescription has been satisfied. There is nothing in the Code which suggests that the administering authority may lay down a legally binding process for consultation or that the process of consultation which actually occurs should be disregarded.
27 Counsel for Overton also contended that the Tribunal did not have jurisdiction to consider whether the structure for consultation which Overton established was a structure which accorded with the Code. Counsel submitted that that matter must be raised in accordance with s 78A of the Fair Trading Act, 1987. I do not accept that view. In my opinion, the Tribunal has jurisdiction to determine such an issue provided that the issue is properly before it. When the question arises in the context of a budget impasse, it can be determined in an application brought under s 14A of the Retirement Villages Act.
28 This discussion perhaps complicates unduly the question which was before the Tribunal. In my opinion, if, in pursuance of the procedures enunciated in cl 40 of the Code, the administering authority has made available to the residents the accounts of actual expenditure, a draft budget and details of the changes and other matters proposed, if there has been consultation on the budget, and if the consultation has concluded, the Tribunal is entitled to conclude, if it thinks fit to do so, that the budget consultation processes under the Code have been complied with. That is because it is the substance of the matter, not the technicalities, that determines the decision. The Code is not to be read as a list of technicalities each of which has specific legal effect.
29 In my opinion, the Tribunal was correct in its findings of fact and, on those findings, was correct in law in its finding that there was budget impasse. I do not necessarily agree with the Tribunal's adoption of para (b) of s 14A(2) rather than para (a). The finding with which I agree, that Pannell Kerr Forster's letter of 11 June 1999 did not necessarily require individual responses, the fact that there was a joint letter signed by eighty-one residents which detailed the comments which those residents and impliedly the Residents' Committee wished to make, the fact that there was a reply to that letter from Pannell Kerr Forster on behalf of Overton and the finding that reasonable consultation had occurred, seem to me to justify a finding that s 14A(2)(a) was satisfied. The ruling of the Tribunal arrives at basically the same conclusion, although by a different route.
30 The Tribunal specifically found that "the actual process of consultation was not in accordance with the code". However, it appears to me that that finding was directed to the point that the budget consultation processes did not achieve the standard which the Code expected and not to the issue as to whether, as a matter of substance, the budget consultation processes under the Code had been complied with, which is a different matter. The Tribunal appears to have dealt with the facts relating to that issue in its consideration of s 14A(2)(b) and in its findings that the budget was the subject of reasonable consultation and that the residents had had a reasonable time to consider it.
31 I agree with the Tribunal that, if Overton set up a structure for consultation which precluded input from the Residents' Committee, that structure did not comply with the provisions of cl 39 of the Code. Where a large number of residents are concerned, it is appropriate that a residents' committee should act on behalf of the residents or some of them, if the residents so wish. Paragraph (a) of cl 39 requires that residents' input into the management of retirement villages is to be facilitated. If residents desire to have an input into management, and to do so through a residents' committee, that is appropriate, as the Commercial Tribunal earlier found. The Commercial Tribunal, in its determination on 19 December 1997, directed Overton to create an appropriate structure for resident input, in consultation with current residents. The Commercial Tribunal made it clear that the existing structure for consultation did not meet the requirements of the Code and that that matter must be addressed. The Commercial Tribunal itself directed that a copy of Overton's quarterly report be provided to the President of the Residents' Committee, thus impliedly approving of the existence of the Residents' Committee.
32 It would seem that Overton is seeking to establish that the letter of Pannell Kerr Forster, which said, "Any reply not received by 30 June 1999 will be assumed to be in agreement", binds the residents from contending that they did not agree to the budget. That contention is based on the terms of the letter which set out a structure for consultation and the fact that no challenge has been made to that structure by application under s 78A of the Fair Trading Act. In my opinion, it is for the Tribunal to determine whether "the residents in a retirement village fail to agree to a proposed budget". That is a question of fact for the Tribunal. The terms of the structure created by the administering body under cl 40 of the Code and any deeming clause contained therein are relevant factors in the determination of the issue but do not foreclose it.
33 The submissions of counsel for Overton do not challenge the factual findings of the Tribunal that reasonable consultation had occurred, that the residents had been given reasonable time in which to consider the budget, and that the residents had not approved of the budget. Counsel for Overton contended that, "The residents refused to comply with the obligations laid out in the management structure created by Overton; the residents 'opted out' of the consultation process". It is clear that the Tribunal rejected such a view. In my opinion, the Tribunal was correct in doing so. As a matter of fact, the residents did not opt out of the consultation process.
34 In my opinion, there was, in the present case, substantial compliance with the conditions of s 14A(2). Section 14A(2) looks to the situation where there has been negotiation as a matter of substance and a reasonable opportunity for the administering authority and the residents to put forward their views. The section does not require, in my opinion, that the views expressed on either or both sides must have been reasonable. The section does not intend to preclude an approach to the Tribunal because there may be, and in the present case there obviously were, people on one or both sides who were not reasonable.