Residents Committee of Carey Bay Retirement Village v Anglican Care

[2019] NSWCATCD 37

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Residents Committee of Carey Bay Retirement Village v Anglican Care [2019] NSWCATCD 37

Hearing dates:

22 & 23 November 2018

Date of orders:

26 March 2019

Decision date:

26 March 2019

Jurisdiction:

Consumer and Commercial Division

Before:

J A Ringrose, General Member

Decision:

Pursuant to Section 63 of the Civil and Administrative Tribunal Act 2013, orders and reasons for decision published on 26 March 2019 are amended on 29 April 2019 to read as follows:

 

1. The application of the Residents Committee is dismissed.

 2. Each party shall bear their own costs.

Catchwords:

Retirement Villages – variation of services – whether the implementation of a new medical emergency call system constituted a variation of services or a withdrawal of services for the purposes of the Act – whether implementation of the variation was necessary having regard to other factors – whether the implementation of the varied service constitutes a breach of residents’ contracts – whether the Respondent was entitled to impose recurrent charges for the maintenance of the new service.

Legislation Cited:

Civil Liability Act 2002
Retirement Villages Act 1999 ss 59; 60; 62; 66; 128
Retirement Villages Regulation 2017 Reg. 26

Cases Cited:

Bennett v Georges Presbytery Aged Care (Retirement Villages) [2002] NSWCTT 897
Certain Loyd’s Underwriters v Cross (2012) 248 CLR 370)
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355

Category:

Principal judgment

Parties:

Residents Committee of Carey Bay Retirement Village (Applicant)
Anglican Care (Respondent)

Representation:

Counsel:
Mr I Griscti (Respondent)

  Solicitors:
Messrs Moray & Agnew (Respondent)
Mr Lollbach (Seniors Rights Service) (Applicant)

File Number(s):

RV 17/52883

Publication restriction:

Nil

reasons for decision

Application

1. By an application filed on 13 December 2017 the Applicants initially sought an order in accordance with Section 62 of the Retirement Villages Act (a) that the operator reinstate the original on site emergency system (b) that the operator pay compensation in relation to the withdrawal of the service including a refund to eligible residents of the annual service charge for Vitalcall from 2017/2018 going forward (c) in the alternative if the operator does not reinstate the service the operator to reduce the current charges for Vitalcall system payable by each of the eligible residents of the village (d) if the Tribunal orders reinstatement of the original on site system the operator refund a total of $9,406 being charge for the Vitalcall system.

2. It is noted that five residents, or residents from five units sought to be excluded from the present application in accordance with Clause 35(4) of the Retirement Villages Regulations.

3. On 1 June 2018 an application for amended orders was filed on behalf of the Applicant as follows:-

1. Under section 62(1)(a) the Respondent to reinstate the original on site emergency service which was operating at Carey Bay Retirement Village from 1995 until 7 December 2016.

2. Under section 62(1)(d) if the Tribunal orders reinstatement of the service then the Respondent is to pay the total annual recurrent charges paid by the eligible residents for the Vital Care system calculated from 7 December 2016 until the date the service is reinstated.

3. In the alternative to order (b) the Respondent to pay compensation in relation to the withdrawal of the service being the cost of providing an equivalent service including a registered nurse 24 hours per day 7 days per week from 7 December 2016 .

4. Pursuant to section to section 62 (1)(c) the Respondent to reduce indefinitely the recurrent charges payable by each of the eligible residents on the Vitalcall system.

5. Pursuant to section 66(3)(a) compensation for non-economic loss suffered as a result of the Respondent’s failure to comply with section 66 (2)(a).

4. The application was initially listed before the Tribunal on 18 January 2018 and was thereafter listed for directions on 15 February 2018 and 16 May 2018.

5. On 21 August 2018 the matter was listed for a 1 day hearing but the Applicants sought an extension of time and also suggested that the matter should probably be listed for 2 days. On 21 August 2018 the timetable was amended requiring documents to be provided up to the 21 September 2018 and it is noted that the Respondents filed submissions by 10 September and the residents committee provided further submissions up until 7 November 2018.

Applicants’ Evidence and Submissions

6. The parties have submitted an agreed chronology and it is appropriate to consider relevant dates contained therein to put the matters into perspective.

7. In 1985 Carey Bay Retirement Village was constructed and established and a Vital Care medical alert system was installed at that time. On 11 April 1995 Anglican Care acquired the Carey Bay Village from Intracare Pty Ltd.

8. From 1995 until November 2009 the Vital Care system operated a 24 hour service in part monitored by staff at the Residential Aged Care Hostel located about 50 metres from the village. The system operated on wireless technology between the village and the aged care home and the first available staff member from the home would respond to emergency call outs from the village. That staff member would not always be clinically trained but could be a resident liaison officer, receptionist or care service employee.

9. In December 2009 Anglican Care implemented new procedures for emergency call outs in the village after dark owing to concerns about the safety of staff responding to a call out. In October 2010 at a self care meeting there were some complaints about the Vital Care system when it was noted that buzzers were not working and residents were required to walk to the nursing home for assistance. In November 2010 there were concerns expressed by the Nurses Association regarding nurses’ safety after dark which then prompted Anglican Care to undertake a risk assessment and to determine that no staff member was to leave the home after dark.

10. In May of 2012 some concerns were expressed regarding response time from the home, and in July 2012 residents were reminded of the Vitalcall procedure.

11. At a Self Care Annual General Meeting held on 23 October 2013 residents were informed that after dark call outs by staff at the home were no longer an option due to WH&S issues.

12. In September 2014 Anglican Care, a recommendations report identified that the Vitalcall system was reaching the end of its life span and that report was amended and resubmitted in 2016.

13. In May 2016 Anglican care sought advice from NSW Fair Trading as to whether an upgrade of the Vitalcall system constituted a change of services facilities within the meaning of the Act and the advice was that it did not constitute a change. Later in May 2016 Anglican Care entered into an agreement with Vitalcall to upgrade the call systems at all relevant villages including Carey Bay Village.

14. In September 2016 Anglican Care Distributed a report to residents advising that a new Vitalcall system monitored off site would be rolled out. A meeting was then called on 28 November 2016 to answer questions of the residents. Residents were then advised on 1 December 2016 that the new Vitalcall rollout was scheduled to commence on 7 December 2016. Over this period Mrs Denise Rickman, the Retirement Living Coordinator for Anglican Care communicated regularly with Ms Joyce Clarkson who was the president at the time for the Residents Committee. By 22 December 2016 Mrs Rickman confirmed with Ms Clarkson that the home no longer had any involvement in responding to emergency calls.

15. On 23 January 2017 Mr Lollbach from Seniors Rights Service became involved at the invitation of Ms Clarkson.

16. On 29 September 2017 Anglican Care received an advice that the Vitalcall system could not continue to be serviced or maintained and on 27 November 2017 the Residents Committee passed a motion to bring an application to the Tribunal.

17. The Residents Committee Points of Claim disclose that as at 7 December 2016 there were 24 residents living at the village under a contract entered into after 11 April 1995 who were not excluded from the present application. It was claimed that according to Schedule 1 of the service and facilities the residents were entitled to have the operator provide an emergency call system and the cost of response thereto. Some residents had disclosure statements which noted that the service was to be provided on site by an operator or an employee of an operator and that the service was monitored 24 hours per day 7 days per week. It was claimed that the Vitalcall system introduced on 7 December 2016 amounted to a variation and specifically a withdrawal of service by the operator which was provided for in the residents contract and disclosure statements. It was claimed that the operator failed to comply with the provisions of section 60(3) of the Act and did so without the consent of residents which was to be obtained by a special resolution.

18. The Residents Committee claimed that the withdrawal of services thereby amounted to an unlawful variation of the service entitling them to apply for orders under section 62 of the Act. It was claimed that when a resident buzzed the nursing home a staff member would phone back as soon as possible to check with the resident as to the nature of the emergency. If there was no answer then the nursing home would immediately send over at least one of its nurses to check on the resident. The nurse always carried a key to gain access to the unit and on entry the nurse would triage the resident and if necessary call for an ambulance.

19. It was claimed that under the new Vitalcall system each unit had a remote monitor and when the alarm was activated the Vitalcall switch board alerted an operator on duty to answer via intercom. There were concerns that the person answering may not be a medically qualified person and that there may be delays in having an ambulance attend.

20. By reason of these breaches the Applicants sought compensation.

21. The evidence provided by the Applicant consisted of a number of affidavits together with a copy of an occupancy agreement and a disclosure statement. Communications regarding the proposed budget for the year ending 30 June 2017 were attached along with letters between the parties and the minutes of the Annual Operators Meeting held on 10 October 2016.

22. Of the affidavits relied upon by the Applicant the Respondents’ counsel sought to cross examine 3 deponents, namely Joyce Clarkson, Fay Badman and Rebecca Norman. In cross-examination Ms Clarkson conceded that the original Vitalcall system needed a hand set and a land line to operate. She accepted that there was a change in the system in 2009 and there was no attendance from staff members from the nursing home in the hours of darkness. Ms Clarkson agreed that there were complaints about the system and that she knew there were a number of occasions when residents had walked to the nursing home for assistance. She conceded that residents were advised to call 000 in any event.

23. Ms Clarkson noted that since the implementation of the new system she had not been required to use it in an emergency but she had used it when testing was required. Ms Clarkson agreed in cross-examination that if equipment could not be properly maintained then it would be dangerous to keep using it.

24. Ms Badman stated that she had never used the system and she didn’t have any knowledge of a change in the procedure for callouts after dark. She claimed that she had not needed the system and that it was common sense to call 000 rather than use the Vitalcall system. Ms Badman also conceded in cross-examination that if the supplier of the equipment had said they could not maintain it any more it would be dangerous to keep using it but she noted that it was in fact still working in her view.

25. Ms Rebeca Norman stated that she had never used the old system and she had no cause to use it and she had no cause to use the new system to date. She didn’t know if there was any change and she was not aware of any complaints about the old system. Ms Norman conceded in cross-examination that it was important that the emergency system be properly maintained and if the supplier said they could not maintain the equipment probably it would be dangerous to keep using it.

26. In his submissions Mr Lollbach referred to a sample Residents Contract and Disclosure Statement and claimed that the operator provided and made available an onsite emergency system which was effectively free of charge as detailed in Schedule 1 of the Residents Contract. It was monitored 24 hours per day by an employee of the operator. He claimed that the Vitalcare alert when activated by a resident was attended upon by a registered nurse, on duty at the nursing home immediately adjacent to the village, who immediately contacted the resident by telephone and if necessary attended the resident to triage the injuries. He submitted that the operator failed to comply with the provisions of section 60(3) of the Retirement Villages Act 1999 as it had varied a service in operation at the village without the consent of the residents of the village obtained via a Special Resolution. In particular he noted that the operator had failed to put a resolution to the residents and failed to get at least 21 days written notice of the meeting providing all details as required. Mr Lollbach claimed further that the operator withdrew the existing service and replaced it with the existing on site Vitalcare with remote emergency system provided by Vitalcall. That service required each resident to enter into a separate contract with Vitalcall for the provision of services and there was no longer any on site visit by medically qualified employees. He also claimed that the emergency services now involved annual service charges which were included in the village budget.

Respondent’s Submissions

27. The Respondent relied upon an affidavit of Denise Rickman sworn 10 September 2018 with a large number of annexures attached thereto.

28. In cross-examination Mrs Rickman noted that the roll out of the new callout system was completed on 7 December 2016 and that it was an upgraded form of the original Vitalcall. It was not operated through the nursing home but it was operated through an operational centre off site which was still manned 24 hours per day for emergency calls. She stated that residents were required to enter into an agreement with the new system and there was an associated charge as the monitoring and communication was not dependent upon a phone in the village. She noted that the cost of the callouts had been included in the recurrent charges under the budget where the cost was otherwise to be provided by the village. She conceded that it was different in that it was no longer monitored by the operator or an employee of the operator but she did not consider it to be a reduction of the service referred to in the handbook. She stated that the response times of the ambulance were standard times and he pointed out that the previous system was at the end of its life and she referred to an email from the supplier saying that it would be unable to maintain it in the future. It was pointed out however that the person at the call centre had the qualifications to enable the emergency to be triaged and for proper steps to be taken even though there was no attendance at the resident’s home.

29. Mr Griscti of counsel for the Respondent noted that the Vital Care system had been in use in the Carey Bay Retirement Village since 1985 and that it had continued in use in the village for more than 20 years after Anglican Care took over the management of the village in 1995. He pointed to the evidence that in 2016 Anglican Care was advised that the medical call system was at the end of its time and would not be supported or maintained very far into the future. At that time the Respondent decided to upgrade the system and implemented the new Vitalcall system at the village in December 2016. He noted that the heart of the Applicant’s complaint was a contention that the upgrade was a variation in services within the meaning of section 60 (3) of the Retirement Villages Act 1999 and he accepted that orders may only be sought under section 62 of the Act where there has been a reduction or withdrawal of the service or facility otherwise than in accordance with section 60 of the Act.

30. Mr Griscti submitted that the upgrade was not a variation of services within the meaning of section 60 nor was it a reduction or withdrawal of services within the meaning of section 62 and both before and after the upgrade Anglican Care had continued to provide the residents at the village with a 24 hour emergency response system.

31. Mr Griscti pointed out the previous system which operated on the landline telephone line would no longer be supported after the planned implementation of the NBN at the village. The previous system was approximately 30 years old was at the end of life status.

32. He argued that an upgrade was indeed required in order for Anglican Care to comply with its obligations under section 93 of the Act given that the componentry of the previous system constituted items of capital for the purpose of the act under Retirement Villages Regulations 2017. It was not practical to maintain the previous system due to it reaching the end of life status and the Respondent was accordingly obliged to replace or upgrade the previous system in accordance with its capital maintenance obligations under Section 93.

33. Mr Griscti of counsel then referred to key elements of the factual background by reference to the chronology contained in the joint tender bundle. He noted that between 1995 and 2009 the previous system operated with a 24 hour service monitored by staff at the residential aged care home located 50 metres away from the village. That system was operated on wireless technology between the village and the nursing home and an available staff member from the home would respond although this staff member would not always be clinically trained but could be a resident liaison officer, receptionist or care service employee.

34. A new procedure was implemented after call outs to the village from the home after dark were discontinued for health and safety concerns. A staff member would respond to a call by telephone rather than in person and that staff member would determine whether the situation warranted contacting an after hours GP or an ambulance.

35. When the upgrade of the system occurred in the week of 7 December 2016 the cost of supply and installation of the upgraded system was wholly borne by Anglican Care. Under the new system each resident has a base unit installed in their unit together with a pendant or wrist band to wear. A safe outside each unit holds a key so emergency services are able to enter if necessary. If help was to be required a resident would hold the pendant wrist band or the red button on the base unit for 3 seconds. The outer rim or button would illuminate to inform the resident that a call has been sent and the system would dial the Vitalcall monitoring centre, where it would be answered and triaged by the operator as necessary. The operator would then speak to the resident to assess the situation and one of the resident’s nominated responders would be contacted and, if necessary, an ambulance summoned.

36. Mr Griscti noted that since the upgraded system had been operating all costs associated with it had been included in a separate emergency call system line item in keeping with advice from NSW Fair Trading. Cost of installation was described as a capital expense incurred in accordance with Section 93 of the Act and there are no additional maintenance costs as these are the responsibility of Vitalcall and are covered by the monthly monitoring fee.

27. It was claimed that there were no additional costs to residents as a result of the implementation of the upgraded system. The resident’s fees or recurrent charges are set out in the fixed formula set by the legislation and to the extent that the expenses of the Villages are such that accounts are in deficit and this must be met by Anglican Care. It was further submitted that as with the previous system, there are no costs to a resident arising from the utilisation of the upgraded system for an emergency response.

28. Mr Griscti then considered whether the upgrade constituted a variation of services for the purposes of Section 60 of the Retirement Villages Act 1999. He noted that a variation in a service or facility included a reduction, withdrawal, increase or other change in a service or facility and the provision of a new service or facility. He noted that there was no further definition of facilities under the Act and that it was the duty of a court or tribunal to give the words of a statutory provision the meaning that the legislation is taken to have intended them to have. He noted that Section 60 did not appear to have been relevantly considered in other cases available for the review.

29. Mr Griscti submitted that the evidence did not support the proposition that there had been a reduction or withdrawal to the emergency call system at the village but to the contrary a 24 hour emergency call system remained in the village in accordance with Anglican Care’s residents contracts with the residents. The call system had been upgraded and it had not been decreased or changed. Mr Griscti pointed out further that Anglican Care’s actions in upgrading the previous system, with which it bore the expense of installation of the upgraded system was in accordance with its obligations under Section 93 of the Act. He pointed out that under subsection (1) if having regard to the age of the item or prospective life of the item it was not practical to maintain an item of capital in accordance with the section, the operator may replace that item.

30. He pointed out from the affidavit of Denise Rickman that an emergency call was not always attended by a qualified nurse or health professional. This issue was determined by availability. He noted that there had not been a reduction of services in this regard.

31. It was pointed out further that the previous system was aged and the supplier had informed Anglican Care that due to the unavailability of parts Vital Care could no longer service or maintain these controllers and must therefore declare them “end of life”. Allied to this the system was not NBN compliant and whilst it ran on wireless to the nursing home, the nursing system in the home was landline and on that basis it was not NBN compliant. The new system is compatible with NBN.

32. It was argued that there had not been a breach of the residents’ contracts as Anglican Care continued to provide an emergency call system at the village and the cost of response thereto.

33. In relation to the obligations imposed under a Disclosure Statement pursuant to Section 18 of the Act Mr Griscti argued that the operator of a Retirement Village was required, in a disclosure statement, to provide specific details in respect of the residential premises. If, in accordance with this requirement, an operator provided specific details in respect of services and facilities it did not follow that these specific details were not intended to define the precise nature of the services and facilities. The Disclosure Statement, he argued, was a separate document to a Residents Contract and there was nothing in the Act that suggested the Disclosure Statement was incorporated into the contract. He noted that it would be inconsistent with the intention of the Act to prescribe services and facilities in such a manner as to require an operator to seek consent from the residents every time there was to be a change in the manner in which services and facilities were to be delivered, as distinct from a change in the essential nature of the services or facilities themselves.

34. It was argued on behalf of the Respondent that Anglican Care had not interfered with caused or permitted interferences with the reasonable peace, comfort or privacy of residents as a result of the upgrade in contravention of Section 66 of the Act.

35. In supplementary submissions Mr Griscti addressed an issue which arose during the hearing as to whether Anglican Care would be entitled to pass on to residents the costs associated with the emergency response system by way of recurrent charges. He referred to the affidavit of Denise Rickman where it was noted that various maintenance and service related costs associated with the previous system had been included in the recurrent charges budget for the village. It was pointed out that not all residents agreements were identical and that the contents changed from time to time.

36. Reference was made to the agreement referred to in the affidavit of Joyce Clarkson wherein Schedule 1 set out the list of services and facilities including disparate matters such as insurance, maintenance, bus services, welfare services and “emergency call system and the cost of response thereto”.

37. He noted that the agreement at Clause 15.09(b)(ii) stated

The income of the operator from the recurrent charges shall normally be used to meet or make reasonable provision for the costs of operating the village which shall without limit and without limiting the generality of the expressions costs of operating the village shall be taken to include costs and provisions relating to (ii) provision for services to residents excepting to the extent that the costs of personal services are met from fees paid on a user pays basis.

48. He referred to Regulation 26 of the Retirement Villages Regulations 2017 which lists a number of items that cannot be financed by way of recurrent charges and noted that an emergency call system was not such an item. Additionally he referred to Section 59 of the Act which contemplated the inclusion of the cost of an emergency call system in the annual budget as well as providing in Section 59(5) that a resident may, at their own expense, arrange their own system.

49. Mr Griscti noted finally that it was not part of the Applicant’s case expressed in the Points of Claim that Anglican Care breached its agreement by passing the cost of the emergency call system on by way of recurrent charges to the extent that such a concern has arisen it was submitted that the matters set out earlier in submissions were sufficient to dispose of any such concern.

Decision

50. The Points of Claim on behalf of the Applicant note that as at 7 December 2016 there were 24 residents living at the Village under a Residents Contract entered into after 11 April 1995 who were not excluded from the present application. It is claimed that according to Schedule 1 of the Schedule of Services and Facilities the contract for those residents was to provide an emergency call system and cost of response thereto.

51. The Disclosure Statements for those residents inferred that the service was to be provided on site by the operator or an employee of the operator and that it was to be monitored 24 hours per day 7 days per week.

52. Residents were notified on 26 September 2016 of a plan to replace the existing call system in the financial year 2016/17 and in December 2016 the medical alarm service was transferred to a new provider.

53. It is claimed that the introduction of the Vitalcall system amounted to a variation, specifically a withdrawal of the service by the operator which was provided for in the Residents Contract and Disclosure Statements. It was claimed that before withdrawing the service the operator failed to comply with the provisions of Section 60(3) of the Act and did so without the consent of the residents of the village obtained by a special resolution in accordance with Schedule 7 of the Retirement Villages Regulation 2009.

54. It was alleged that the nursing home adjacent to the village had sufficient qualified nurses on duty so that when a resident buzzed they could phone back as soon as possible and then respond to the resident’s home. It was claimed that a nurse always carried a key to gain access to the unit. The nurse would then triage the resident if that was necessary.

55. It is claimed that under the replacement system the call centre is located off site and if medical attention is required an ambulance is contacted.

56. The Applicants claim that the residents under contract referred to in the Points of Claim consider the original service to be a superior service to that presently provided and orders are sought for the reinstatement of the original service and/or for compensation in relation to the withdrawal of the service as well as a reduction in recurrent charges.

57. Compensation is also sought in the Points of Claim for non-economic loss, loss of amenity and loss of quiet enjoyment as a result of a withdrawal of the service. That application made pursuant to section 66 of the Act fails to consider the implications of the Civil Liability Act 2002.

58. The Points of Defence filed on behalf of Anglican Care argue that the operator was at all times under an obligation to maintain and upgrade service and facilities as required. It is argued that the implementation of the new Vitalcall system was not a variation of service within the meaning of Section 60 of the Retirement Villages Act 1999 as the operator continued to provide the residents with the service of an emergency call system which was in fact an upgrade on the existing emergency call system in that (a) it addressed the residents’ privacy and confidentiality concerns; (b) it was designed to improve the response time; (c) it was an emergency service which was NBN compliant and would continue to be operational once the Retirement Village and the Residents Aged Care Home at Carey Bay were upgraded to the NBN.

59. With reference to some but not all of the Disclosure Statements provided to the residents, the Respondent noted that the system in the past involved a distress button in the resident’s premises and in common areas and that the system was monitored on site by the operator or an employee of the operator and that the system was monitored 24 hours per day 7 days per week.

60. It was submitted on behalf of the Respondent that the purpose of the disclosure statement was to provide details of the residential premises to prospective residents to enable comparisons with other retirement villages. It did not form part of the contractual terms between the parties and did not operate to limit Anglican Care’s ability and obligations to upgrade the services provided.

61. It was pointed out that residents were notified of the proposed upgrade to the emergency call system on 26 September 2016 and at the Annual General Meeting held on 10 October 2016 the residents were addressed concerning the proposed upgrade to the Vitalcall system. It was claimed that the implementation of the Vitalcall system would ensure residents’ privacy and the best practice response in the event of an emergency. It was submitted that in such circumstances a Special Resolution in accordance with section 60(3) of the Act was not required.

62. The submissions provided on behalf of the Applicant claimed that under the earlier system, when the Vitalcall alert was activated, a registered nurse at the adjoining nursing home immediately contacted the resident by telephone and if necessary attended on the resident, to triage the resident and provide appropriate first aid then call an ambulance if required. That submission did not take into account the position after December 2009 when a new procedure was implemented preventing staff from the nursing home attending the village after dark as a result of Occupational Health and Safety concerns. After that time a staff member would determine whether the situation warranted contacting the GP after hours or the calling of an ambulance. Concerns were expressed after 2009 that buzzers were not working and residents had been required to walk to the nursing home for assistance. Concerns were also recorded in 2012 about the emergency response times which involved complaints about the manner in which the previous system operated, in particular after the hours of darkness.

63. Advice was received by the Respondent in September 2014 to the effect that the existing system was reaching the end of its life and that there was a potential risk of failing as it had been in place for almost 30 years. It was noted that the existing system could not continue to be serviced or maintained as the old hardware components were either not supported or difficult to locate. This information was clearly detailed in a document from the National Sales Director of Vital Care Pty Ltd to the Respondent. It was noted further that the existing system would not be compliant with the rollout of the NBN. It was also pointed out that staff had been prevented from responding in person to an after dark emergency since 2010.

64. The Applicant provided a number of affidavits from residents but only three of those deponents were required to attend for cross-examination. Mrs Clarkson who was a former president of the Residents Committee agreed that there had been complaints about the previous system but she could not remember a problem specifically because residents were always advised to call 000 in the event of an emergency. She agreed that since the implementation of the new system she had not used it apart from testing purposes but she agreed that if the old equipment could not be properly maintained it would be dangerous to keep using it in any event.

65. Ms Fay Badman was also cross-examined and she admitted that she had never had a cause to use the system and that she didn’t have any knowledge of a change in the procedure for callouts after dark. She had not needed to use the system but she suggested that it was common sense to call 000 rather than persist initially with the Vitalcare system.

66. Ms Badman agreed that if suppliers said they could not maintain that equipment any more that it would be dangerous to keep using it.

67. Ms Rebecca Norman stated that she had never used the old system and never had any cause to use the new system up to date. She didn’t know if there was any change and she was not aware of any complaints about the old system. She agreed that it would be important that the emergency equipment be properly maintained and that if a supplier said they could not maintain the equipment it would probably be dangerous to keep using it.

68. It is necessary to consider whether the upgrade constituted a variation in services for the purposes of section 60 of the Retirement Villages Act 1999. Section 60 of the Act relevantly provides as following:-

1. The operator of a retirement village must propose a variation of the services and facilities provided at the village if (a) a minimum of 5 residents or 10% of the residents (whichever is the greater) of the village (if the village has fewer than 10 occupied residential premises, residents from a majority of the occupied premises) or (b) the Residents Committee requests the operator in writing to do so.

2. The operator may propose a variation in the service and facilities provided at the village even if there has been no request under subsection (1)

3. The services and facilities provided at the village are not to be varied as proposed unless the residents of the village, by special resolution, consent to the variation, if consent is given, the operator may vary the service or facility in accordance with the consent as soon as is practicable (unless the resolution provides that the variation is to take effect on a specified later date).

4. In this section “services and facilities” means services and facilities provided by or on behalf of the operator.

“Variation” in a service or facility includes the following:

1. a reduction in the service or facility

2. withdrawal of a service or facility

3. an increase in the service or facility

4. any other change in the service or facility

5. the provision of a new service or facility

69. Section 4 of the Act provides a definition for general service and optional services. General services are defined to mean services provided or made available by or on behalf of the operator to all residents of the retirement village and includes such services as may be prescribed by the Regulations for the purposes of the definition.

70. There is no definition of the term “facilities” in the Act. The definition of the term “services and facilities” leaves open the question as to what is actually a service and/or facility. The Tribunal is to give the words of a statutory provision the meaning that the legislature is taken to have intended (see Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 and Certain Loyd’s Underwrites v Cross (2012) 248 CLR 370).

71. In Bennett v Georges Presbytery Aged Care (Retirement Villages) [2002] NSWCTT 897 the Tribunal considered the meaning of the terms and held

From the various definitions of “service” and “facility” it is possible in the context to deduce that a facility is more the nature of a structure or inanimate advantage e.g. swimming pool, common amenities room, gym, car wash bay . Service (whether general or personal) appears to relate to a helpful or advantageous activity or commodity required or demanded, to meet a particular need. These appear to be more in the nature of active or inanimate process provided by a person or persons.

72. The Residents Contract between Anglican Care and Joyce Clarkson refers to services and facilities in Section 7 and clause 7.01 states that the services provided or made available to the resident are listed and described in Schedule 1. The list of services and facilities includes emergency call system and the cost of response thereto. It would appear that the majority of the Residents Contracts or Occupancy Agreements include words to that effect.

73. To the extent that it has been argued by the Applicants that there has been a variation of the service within the definition of Section 60 it has been submitted that the appropriate context is a consideration of whether there has been a reduction or withdrawal of the service. It has been submitted on behalf of the Respondent that it would be onerous and impractical for an operator of a retirement village to require a special resolution every time there was a change in the manner that a service was delivered. The Tribunal accepts that submission as it would not, having regard to the principles of statutory interpretation, be consistent with the objectives of the Act and more particularly of Section 60.

74. The Tribunal is satisfied that the evidence does not support the proposition that there has been a reduction or withdrawal to the emergency call system at the village as it remains a 24 hour emergency call system provided at the village in accordance with Anglican Care’s Residential Contracts.

75. The evidence suggests that the service has, in fact, been upgraded because the previously available service had reached a point where it could no longer be supported or maintained.

76. There is no evidence that there is a cost to a resident arising from the use of the emergency call system and Anglican Care continues to provide that service and the cost of response thereto. The Respondent has upgraded the previous system and has accepted the full expense of installation of the upgraded system in accordance with its obligations under Section 93 of the Act which provides :-

1. The operator of a retirement village is to maintain each item of capital for which the operator is responsible in a reasonable condition having regard to the following:

1. The age of the item

2. The prospective life of the item

3. The money paid to the operator by the residents under a village contract (including ongoing contributions)

2. If it is not practical to maintain an item of capital in accordance with this section then the operator may replace that item.

2. The operator of a retirement village must carry out the maintenance of or replace an item of capital for which the operator is responsible within a reasonable time after becoming aware of the need for the maintenance of the item.

77. The Tribunal is not satisfied that the upgrade of the Vitalcare system constituted a breach by the Respondent of its contract with the various residents as the Respondent continues to provide an emergency call system at the village at the cost of the Respondents and the system upgraded in accordance with the operator’s obligations under s93 of the Act. The Vitalcare system was destined to become inoperable with the introduction of NBN.

78. The Tribunal is not satisfied that the Disclosure Statement forms a part of the Village Contract. Section 18 of the Act provides :

(3) The operator of a retirement village must provide a Disclosure Statement to a prospective resident or person acting on behalf of a prospective resident who (a) requests a copy or (b) expresses an interest in particular premises within the retirement village within 14 days after the request is received or the expression of interest is made.

(3A) A Disclosure Statement is to give specific details of particular residential premises in the retirement village (including details of fees and charges that will be payable by the resident of the premises and must

1. be in the form prescribed by the Regulations

2. Contain the information prescribed by the Regulations

3. Be signed and dated by the operator of the retirement village

(4) The operator of the retirement village must annex a copy of the Disclosure Statement (or the Disclosure Statement as amended) in writing and endorsed with the consent of other parties to the Village Contract) to the first Village Contract that the other party enters into with the operator.

79. The Tribunal accepts that it would not be consistent with the intention of the Act to prescribe services and facilities in such a manner as to require an operator to seek consent from residents every time there was to be a change in the manner in which service and facilities are to be delivered as distinct form a change in the essential nature of the service or facilities.

80. The Applicants have included in their Points of Claim an assertion that Anglican Care is not entitled to pass on to residents the costs associated with the emergency response system by way of recurrent charges.

81. The cost of operating an emergency call system is part of the other services or outgoings which are normally incurred in the operation of a village. These costs are clearly distinct from the cost of response to an emergency call and is generally accepted that they are costs which should be recovered through the fee setting processing process.

82. Clause 15.09(b) (ii) provides

The income of the operator from the current charges shall be used to meet or make provision for the costs of operating the village which shall, without limiting the generality of the expression costs of operation of the village include costs and provisions relating to (ii) provision of services to residents excepting to the extent that the costs of personal services are met from fees paid on a user pays basis.

83. The Residents Handbook includes references to maintenance fees and charges and maintenance fees are taken to include a number of items including the emergency call systems. It would appear that residents are to pay an additional fee if the emergency service is utilised but the words “costs of response thereto” have the effect of extending the scope of the service being provided to not merely include an emergency call system but a response to that system.

84. It is argued that if it had been intended that the emergency response system be provided without cost it would not have included an express statements in the list of services and facilities that the costs are to be funded by recurrent charges.

85. Regulation 26 of the Retirement Villages Regulation 2017 lists a number of items that cannot be financed by way of recurrent charges but an emergency call system is not such an item. Section 59 of the Act contemplates the inclusion of an emergency call system in the annual budget as well as providing in Section 59(5) that a resident may, at their own expense, arrange their own system. The Tribunal is not satisfied that the Applicants have adduced evidence sufficient to entitle a refund of the sum claimed in the application. The limitation appears to relate to the costs of responding to a particular call and other items associated with the operation of the service have clearly not been excluded from the recurrent charges in this case.

86. It is necessary to consider whether the Respondent has caused or permitted interference with the reasonable peace comfort or privacy of the residents as a result of the upgrade. The evidence does not establish this as all those who have deposed to the position since the new system was introduced have stated they are not familiar with it or of any problems associated with its operation. The Respondent upgraded an older emergency response system which was no longer capable of being maintained in accordance with its obligations under section 93 or the Act. The Residents Committee has not detailed evidence which shows an entitlement to an order for compensation for non-economic loss particularly having regard to the provisions of the Civil Liability Act 2002.

87. The Residents Committee has not demonstrated an entitlement for an order for reinstatement of the previous system and the totality of the evidence suggests that the reinstatement of the previous system would probably constitute a breach of Section 93 of the Act in any event. There is no entitlement to an order for relief in accordance with Section 62 of the Act because the Residents Committee has not established that the Respondent is in breach of section 60 in the circumstances.

88. The application is accordingly dismissed in its totality and each party should bear its own costs.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 02 July 2019