Kelson v Tricare (Aspley) Ltd
[2014] QCAT 5
| CITATION: | Kelson v Tricare (Aspley) Ltd [2014] QCAT 005 |
| PARTIES: | Marion Jean Kelson (Applicant) |
| v | |
| Tricare (Aspley) Ltd (Respondent) |
| APPLICATION NUMBER: | OCL038-13 |
| MATTER TYPE: | Other civil dispute matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Member White |
| DELIVERED ON: | 8 January 2014 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. The Application is dismissed. |
| CATCHWORDS: | Whether the appropriate Maintenance Reserve Fund contribution should align with the annual quantity surveyor’s recommendation – Whether there is an obligation on part of Scheme Operator to publish annual gardening, cleaning and painting schedules – Calculation of interest accruing has been paid into Maintenance Reserve Fund Retirement Village Act 1999 ss 98(4), 99, 100 |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act).
REASONS FOR DECISION
INTRODUCTION
Ms Kelson is a resident in a retirement village operated by Tricare (Aspley) Limited. On 21 May, 2013 She lodged an Application seeking Orders as a result of alleged contraventions of the Retirement Village Act 1999 (RVA) by Tricare. She also alleges contraventions under the Australian Consumer Law (Queensland) (ACL).
The retirement village operated by Tricare (Aspley) Limited is known as Compton Gardens Retirement Village and is located at 97 Albany Creek Road, Aspley, Queensland. The village comprises 264 independent living units and 26 serviced apartments.
Ms Kelson resides in Villa 195 at the village.
MATTERS FOR DETERMINATION
Following a Compulsory Conference on 23 August 2013, the Tribunal ordered by consent, that the only issues which were required to be determined by the Tribunal were as follows:
a) Whether the appropriate Maintenance Reserve Fund contribution should align with the annual quantity surveyor’s recommendation.
b) Whether Tricare (Aspley) Limited is obliged to publish annual gardening, cleaning and painting schedules.
c) If Tricare (Aspley) Limited is obliged to publish annual gardening, cleaning and painting schedules, whether Ms Kelson is entitled to compensation for schedules not published for the financial year 1 July 2012 to 30 June 2013.
d) Whether the correct amount of interest accruing on the fixed interest account has been paid into the Maintenance Reserve Fund.
e) If the correct amount of interest accruing on the fixed interest account has not been paid into the Maintenance Reserve Fund, whether Tricare (Aspley) Limited has an obligation to pay any difference.
(A)Whether the appropriate Maintenance Reserve Fund contribution should align with the annual quantity surveyor’s recommendation.
Ms Kelson submits in her Statement of Evidence of 2 September 2013 (Ms Kelson’s Submissions) that her appropriate maintenance reserve fund contribution should align with the Annual Quantity Surveyor's report/recommendation (AQSR) for maintaining and repairing Compton Gardens capital items because $280,403.00 was levied in the year 2012/13 when $223,610.00 was recommended in the 10 Year Plan and Contributions Optimization Chart. In the year 2013/14, $280,403.00 was again levied despite $234,790.00 being recommended in the Year Plan and Contributions Optimization Chart. She alleges a pattern of management of under spending by Tricare of approximately $175,000 in 2012/13, which explains an accumulation of more than $1M over and above the $300,000 recommended balance of $300,000 for 2026.
Ms Kelson relies upon a number of documents which were attached to her submission. These documents include tax invoices for July 2013; copy of the Maintenance Reserve Fund for the year ended 30 June 2012 and for the Quarter ended September 2012; for the period ended December 2012; March 2013 and June 2013; the Summary of the Contribution of the Year Plan, the Maintenance Revenue Fund Budget 2013/2014; Statement of Income and Expenditure – General Services for the period ended June 2013; Draft Budget Service Reports 2013/2014; and various letters, Committee Meeting Minutes.
Ms Kelson relies upon s 98(4) of RVA[1] and s 21(4)(b)[2], s 62 ACL[3] which relate to common protection and fair trading, and acting unconscionably in the supply of services to residents. She complains that Tricare has not adequately attended to some gardening and maintenance issues such as allowing weeds to grow knee high, lack of pressure cleaning of external walls, dirty letter boxes, unpainted tarnished roofs and painting schedules.
[1] RVA s 98(4):
[2] ACL s 21:
[3] ACL s 62:
Tricare submits in its Statement of Evidence of 17 October 2013 (Tricare’s Submission):
a) That Ms Kelson mistakenly believes that the recommendations in the AQSR must be adhered to in all respects. Tricare submits that s 98 of RVA states that the Scheme Operator (Tricare) must decide the amount to be held in the Maintenance Reserve Fund for the village having regard to the Fund’s purpose and the AQSR.
b) That Tricare must use the Scheme Operator’s best endeavours to implement the AQSR in the context of the objects of the RVA and any circumstances relevant to the retirement village that apparently were not considered by the AQSR.
c) That the time in quantity and financial outlay on any item contained in the AQSR is designed to be flexible. This would allow for issues such as technology change, plant and equipment, life expectancy, accelerated wear and tear, manufacturer’s recommendations and general repairs in maintenance of normal inclusions may be and are often dependent upon circumstances not considered by the AQSR.
d) That through accelerated wear and tear, items that are contained in the AQSR may have already been captured by the Building Maintenance Audit and therefore replaced early. Also, an item may outlive the expected manufacturer’s recommended usage and the Building Maintenance Audit may therefore recommend a delay in maintenance.
e) That s 99 of the RVA provides ‘the Scheme Operator must adopt a budget for each financial year for the Maintenance Reserve Fund’ and ‘the Maintenance Reserve Fund budget must fix the amount to be raised by a contribution to cover the estimated recurrent expenditure’.
f) That taking into consideration the AQSR, Tricare prepared a budget for each financial year ensuring sufficient funds for necessary and reasonable spending and for future expenses. Any surplus or deficit is carried forward at the end of the financial year.
Tricare seeks the Tribunal to find that it has used his best endeavours in deciding on the amount to be held in the Maintenance Reserve Fund taking into account the AQSR, the objects of the Act and the other relevant circumstances.
Tricare relies upon the same or similar documents which Ms Kelson relies upon, that is, budget documents and correspondence exchanged between the relevant parties.
As this is a hearing on the papers, the Tribunal doesn’t have the benefit of any further evidence, particularly in regard to the specific nature of Ms Kelson’s maintenance complaints. Despite the lack of specific evidence, it appears from the documents which have been filed, that Tricare and the residents have regular meetings to discuss maintenance issues. Residents have the opportunity to voice their concerns, and have done so. Tricare responds to these concerns. The Tribunal concludes after a review of the documents each party have filed that there are robust and comprehensive reviews of the maintenance schedules which are agreed upon by Tricare and the residents at these meetings.
There is no evidence put by Ms Kelson that there is a pattern of under spending by Tricare. Her complaint is more directed at the level of actual maintenance and servicing which is carried out by Tricare, and as stated earlier, the residents are actively consulted on a regular basis. The Tribunal doesn’t intend to make any finding on this issue. The Tribunal does however encourage the continuation of regular reviews by all concerned.
In regard to the extent to which Tricare adopts the AQSR, Tricare have provided a fair and reasonable explanation concerning the way in which the AQSR are dealt with. The Tribunal accepts that such recommendations should be flexible because, as submitted by Tricare, new technological changes, varying degrees of life expectation of plant and equipment and wear and tear and the maintenance audit may have dealt with a particular maintenance or servicing issue differently given the manufacturers recommendations, usage or may have been overlooked by the AQSR.
There is no evidence which would indicate that Tricare have deliberately ignored the AQSR in a significant way.
The Tribunal accepts that it is for Tricare (the scheme operator) to decide the amount held in the Maintenance Reserve Fund.[4]
[4]RVA s 98.
Taking the above matters into account the Tribunal finds that Tricare have used its best endeavours in deciding the amount to be held in the Maintenance Reserve Fund and that it took into account the recommendations of the AQSR.
It also follows that the Tribunal finds that there has not been breach by Tricare of s 98(4) of the RVA or s 21 or s 62 of ACL.
(B)Whether Tricare (Aspley) Limited is obliged to publish annual gardening, cleaning and painting schedules.
On a perusal of Ms Kelson’s Submission, there does not appear to be any specific submission in regard to whether the annual gardening, cleaning and painting schedules should be published other than reference to s 94(2)(b) of the Residential Tenancies and Rooming Accommodation Act 2008 (RTRAA).[5]
[5]RTRAA s 94(2)(b):
Tricare submits, there is no directional obligation on the part of Tricare to publish annual gardening, cleaning and painting schedules in either the RTRAA, RVA or the ACL. Notwithstanding this submission, Tricare submits that it keeps Ms Kelson and other residents informed by communicating the value of initiatives and maintenance programs with all residents via resident notice boards, newsletters and regularly convened coffee chats.
The Tribunal does not accept the submission that the RTRAA applies to this matter. The RTRAA applies to “Rooming Accommodation” which is defined under s 15 of RTRAA.[6] There is no evidence sufficient to exclude the presumption that Compton Gardens Retirement Village provides self-contained units, as such are excluded under the RTRAA.
[6]RTRAA s 15:
The Tribunal finds that there is no statutory obligation for a Scheme Operator to publish annual gardening, cleaning and painting schedules. Notwithstanding the lack of statutory obligation the Tribunal considers that the release of this information would be a useful exercise to ensure transparency in managing retirement villages and may very well foster and build trust in the relationship between the parties.
(C)If Tricare (Aspley) Limited is obliged to publish annual gardening, cleaning and painting schedules, whether Ms Kelson is entitled to compensation for schedules not published for the financial year 1 July 2012 to 30 June 2013.
Ms Kelson submits that if Tricare is obliged to publish gardening, cleaning and painting schedules then she is entitled to compensation. As the Tribunal has found there is no such obligation, therefore it follows, based on Ms Kelson’s case, no compensation is payable.
By way of comment, upon a perusal of Ms Kelson’s submission, she goes on to refer to her earlier complaint about the lack of garden, cleaning and painting schedules and seeks compensation as a result of the loss of amenity and standard of the exterior of her premises and facilities. She relies on the provisions of the RTRAA although no specific section is referred to. It is not necessary for the Tribunal to make any findings on this point as the Tribunal has already found that it is satisfied in the way Tricare manages the retirement village. The Tribunal finds no basis for an order for compensation.
(D)Whether the correct amount of interest accruing on the fixed interest account has been paid into the Maintenance Reserve Fund.
Ms Kelson submits her own calculations of the interest on investment of the Maintenance Reserve Fund (MRF). She submits that Tricare’s calculation of interest for the period June 2012 – September 2012 to March 2013 – June 2013 amounts to $57,602. Her calculation at the rate of 4% amounts to $47,263. Accordingly, the accrued interest component should be corrected. She doesn’t rely upon any independent expert accountant’s evidence to support her own calculations. In any case she relies upon what appears to be an average interest rate over the specified period. She doesn’t provide any evidence to support that the 4% rate of return is fair and reasonable
Tricare submits and relies on s 100 of the RVA[7] and submits that the residents have always been informed about the amount invested and the rate of return on investment.
[7]RVA s 100: The scheme operator must ensure that the following amounts are paid into the maintenance reserve fund: (a) the resident’s maintenance reserve fund contributions; (b) interest received on investments belong to the fund.
Tricare provides in its submission quite an exhaustive explanation of how the interest is calculated, taking into account fixed and variable percentage investments and the varying dates of maturity. It appears to be a complex process to attain the actual annual rate return. It is not a simple calculation of adopting an annual 4% return on investment as submitted by Ms Kelson. It is also noted that Tricare accepts a clerical error occurred in calculating the percentage rate, but this doesn’t effect the determination which is sought from the Tribunal.
From a perusal of the submissions, the Tribunal doesn’t find that Tricare has acted inappropriately in the way the funds are invested.
Taking the above matters into consideration the Tribunal finds the correct amount of interest was paid into the MRF.
(E) If the correct amount of interest accruing on the fixed interest account has not been paid into the Maintenance Reserve Fund, whether Tricare (Aspley) Limited has an obligation to pay any difference.
Given the Tribunals finding in Item D above, it is not necessary to make any finding on this issue.
For the reasons set out above, the Application is dismissed.
In having regard to the quantity surveyor’s report, the scheme operator must use the scheme operator’s best endeavours to implement the surveyor’s recommendations in the context of—
(a) the objects of this Act; and
(b) any circumstances relevant to the retirement village that apparently were not considered by the quantity surveyor.
Unconscionable conduct in connection with goods or services
(1) A person must not, in trade or commerce, in connection with:
(a) the supply or possible supply of goods or services to a person (other than a listed public company); or
(b) the acquisition or possible acquisition of goods or services from a person (other than a listed public company);
engage in conduct that is, in all the circumstances, unconscionable.
...
(4) It is the intention of the Parliament that:
(a) this section is not limited by the unwritten law relating to unconscionable conduct; and
(b) this section is capable of applying to a system of conduct or pattern of behaviour, whether or not a particular individual is identified as having been disadvantaged by the conduct or behaviour; and
(c) in considering whether conduct to which a contract relates is unconscionable, a court's consideration of the contract may include consideration of:
(i) the terms of the contract; and
(ii) the manner in which and the extent to which the contract is carried out;
and is not limited to consideration of the circumstances relating to formation of the contract.
Guarantee as to reasonable time for supply
If:
(a) a person (the supplier ) supplies, in trade or commerce, services to a consumer; and
(b) the time within which the services are to be supplied:
(i) is not fixed by the contract for the supply of the services; or
(ii) is not to be determined in a manner agreed to by the consumer and supplier;
there is a guarantee that the services will be supplied within a reasonable time.
This section also applies if—
(a) services, facilities or goods to be provided to the tenant under the agreement are no longer available or are withdrawn other than because the tenant failed to meet the tenant’s obligations under the agreement; or
(b) the amenity or standard of the premises decreases substantially other than because of malicious damage caused by the tenant.
Rooming accommodation is accommodation occupied or available for occupation by residents, in return for the payment of rent, if each of the residents—
(a) has a right to occupy 1 or more rooms; and
(b) does not have a right to occupy the whole of the premises in which the rooms are situated; and
(c) does not occupy a self-contained unit; and
(d) shares other rooms, or facilities outside of the resident’s room, with 1 or more of the other residents.
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