Willoughby Retirement Community Association v Frey

[2007] NSWSC 613

Reported Decision: 212 FLR 104

New South Wales

Supreme Court

CITATION:	WILLOUGHBY RETIREMENT COMMUNITY ASSOCIATION v FREY [2007] NSWSC 613
HEARING DATE(S):	1 and 13 June 2007
JUDGMENT DATE :	15 June 2007
JURISDICTION:	Equity
JUDGMENT OF:	Hall J at 1
DECISION:	I have concluded that the answers to the questions set out in paragraph [3] should answered as follows: (a) Yes, (b) No, (c) No
CATCHWORDS:	Licence agreement - Entitlement to termination of licence agreement as a result of breach - Promise as to accuracy of information provided prior to entry into the agreement - Accuracy to the best of one’s knowledge - Extent to which knowledge distinguishable from belief - Aged Care Act 1997 (Cth) - User Rights Principles 1997 (Cth) -
LEGISLATION CITED:	Aged Care Act 1997 (Cth) User Rights Principles 1997 (Cth)
CASES CITED:	Luna Park (NSW) Limited v Tramways Advertising Pty Limited (1938) 61 CLR 286 Associated Newspapers Limited v Bancks (1951) 83 CLR 322 Mangrove Mountain Quarries Pty Limited v Barlow [2007] NSWSC 492
PARTIES:	WILLOUGHBY RETIREMENT COMMUNITY ASSOCIATION v FREY, Shirley Rae
FILE NUMBER(S):	SC No. 1513 of 2007
COUNSEL:	P: F Kunc D: T E F Hughes QC/T D F Hughes
SOLICITORS:	P: Lindy Kearns D: Johnson Winter & Slattery

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

HALL J

FRIDAY 15 JUNE 2007

No. 1513 of 2007

WILLOUGHBY RETIREMENT COMMUNITY ASSOCIATION v SHIRLEY RAE FREY

JUDGMENT

1 HIS HONOUR: The plaintiff commenced proceedings by way of summons filed on 16 February 2007 in which the following relief was claimed against the defendant:

“1. A declaration that the Resident Agreement between the Defendant and the Plaintiff dated 12 August 2005 has been validly terminated.

2. An order that the Plaintiff have possession of Townhouse 18, 1 Warrah Street, Chatswood, New South Wales.

3. An order that the Defendant vacate Townhouse 18, 1 Warrah Street, Chatswood, New South Wales within seven (7) days of the making of these Orders.

4. Damages
5. Costs.
6. Such further or other Orders as the Court deems fit.”

2 On 21 May 2007, the plaintiff made application by way of a notice of motion in which a number of orders were sought including an order that there be a separate hearing on particular questions specified in the application.

3 By order made on 23 March 2007, this Court (Windeyer J) ordered the separate determination of three questions:-

“(a) Whether the Defendant breached clause 14.04 of the Hostel Resident Licence Agreement entered into between the parties and dated 12 August 2005 (the Agreement).

(b) Whether the Plaintiff was entitled to terminate the Agreement by reason of the breach referred to in Order 2(a).

(c) Whether the Plaintiff is entitled to vacant possession of Townhouse 18, 1 Warrah Street, Chatswood.”
PART A

(1) The parties

4 The plaintiff association provides residential care, accommodation and services to retired persons. It conducts a hostel residence at the above address in Warrah Street, Chatswood.

5 The defendant is presently aged 84 years of age (date of birth 14 January 1923). She is still currently resident at the above hostel residence. The plaintiff association is providing health and personal care and meal services to her in the townhouse, which she occupies on a daily basis and cleaning services on a weekly basis. The plaintiff has been assessed as needing assistance with showering, shopping and meals and according to Dr Brazier, her current general practitioner, she has been assessed as best accommodated in a non-community setting, such as her own unit with a Community Aged Care Package. The plaintiff has physical and other infirmities.

(2) The termination grounds

6 The defendant became a resident of the hostel residence (the “Agreement”) pursuant to a Hostel Resident Agreement. The Agreement entitles the defendant to occupy a townhouse on a concessional basis under the Aged Care Act 1997 (Cth). This means that she does not pay for her accommodation, although she makes contributions towards the provision of her health and personal care and meal and cleaning services.

7 The present proceedings arise out of what the plaintiff contends was the valid termination of the Agreement on 1 December 2006. The plaintiff has brought the proceedings on two alternative bases which are said to constitute valid grounds for the termination of the Agreement:-

(a) The first basis is the plaintiff’s contention that in the course of entering into the Agreement, and when applying for concessional status and for a Hostel Outreach place, the defendant stated that she did not have any assets beyond the amount of $5,000. The plaintiff contends that, contrary to that representation, the defendant was and is the registered proprietor of a property in Cammeray valued at over $400,000. Reliance is placed by the plaintiff upon the provision of clause 14.04 of the Agreement. Reference to that clause and its construction will be discussed later in this judgment.

(b) The second basis relied upon by the plaintiff concerns the alleged conduct of the defendant. In this respect, the plaintiff has alleged she has confronted and harassed residents and staff. Such conduct, if established, the plaintiff contends, constitutes a breach of the Charter of Residents’ Rights and Responsibilities (Schedule B to the Agreement). Reliance is placed upon clause 12 of the Agreement to give the charter contractual force. Reliance is also placed upon an alleged breach of the provisions of the Handbook for Hostel Residents (clause 13.02).

8 By reason of the order made by Windeyer J for separate determination of the questions referred to in paragraph [3], it is only the first of these two alternative grounds that falls for determination at this stage of the proceedings.

(3) The events leading to the Agreement

9 The plaintiff relied upon the evidence of Ms Lindy Kearns who swore an affidavit on 22 March 2007 and of Ms Annette Duthie who swore on affidavit on 22 March 2007.

10 Ms Kearns is the solicitor and Chief Executive Officer of the plaintiff. In her affidavit she gave evidence as to the application made by the defendant for admission to the Chatswood premises and the circumstances leading to the Agreement. Ms Kearns, whose evidence I accept, stated that on 23 September 2005, the defendant completed an application form for admission to the Association seeking accommodation in a Hostel Care Outreach Self-Contained Unit. The relevant documentation is to be found in Exhibit “LK-1” to Ms Kearns’ affidavit. (hereinafter simply referred to as Exhibit “LK-1”).

11 The defendant had previously contacted Ms Duthie in about mid-July 2005 when she inquired as to the availability of a concessional unit. The defendant then was a concessional resident at Georgian House.

12 The defendant attended and met Ms Duthie on 20 September 2005 when she was given a tour of facilities and an explanation as to the available level of care and assistance. She was also given an explanation as to the procedures required in order to complete an application for admission.

13 According to Ms Duthie, she stated to the defendant on 20 September 2005:-

“A concessional resident is one who hasn’t owned their own home in the last two years and their only means of income is the pension.”

14 According to Ms Duthie, the defendant replied to the effect, “that’s right. I don’t have a home, just a small amount of money in the bank and that’s what I’m putting in the form”.

15 There was then a discussion concerning a statutory declaration required to be completed.

16 On Friday 23 September 2005, a meeting was arranged for the defendant. She brought with her a female friend. They were introduced to a Ms Navin and Ms Kearns. Ms Navin asked the defendant some questions about her family history and the defendant advised that she had a son, Mr Robin Frey, who lived in Queensland but who travelled to Sydney from time to time.

17 Ms Kearns advised the defendant that a Hostel Resident Agreement would be prepared for her signature and that she could get legal advice before signing it.

18 Ms Duthie advised the defendant that she had been assessed as a suitable resident and forms were completed in front of her. The defendant signed her name at the bottom of a particular form and she completed parts of a statutory declaration in front of her and gave it to Ms Duthie.

19 On Monday 26 September 2005, Ms Duthie advised the defendant that the Agreement was ready for her collection. Ms Duthie offered to drop the papers off to her at Georgian House, which she did. Ms Duthie took some time, in accordance with her normal procedure, to take the defendant through the Agreement and explain to her what it said. She left two copies with her and suggested that she contact her son about it.

20 Subsequently, the defendant advised that the Agreement was satisfactory. Subsequently, on 28 September 2005, Ms Duthie met the defendant in her office. The defendant gave her two copies of the signed Agreement.

21 A copy of the partly completed statutory declaration completed by the defendant is included within Exhibit “LK-1” referred to above (at pp.41 to 42).

22 The statutory declaration was not solemnly declared and affirmed. The declaration form otherwise contained relevant information. I accept the evidence led on behalf of the plaintiff that the information was inserted by the defendant. In it, she identified her pension type and pension number. She then marked “no” in respect of a series of questions set out in the declaration form. The particular questions and answers on which reliance is placed by the plaintiff are questions 2, 6, 7 and 8, all of which were answered in the negative. In combination, these questions were directed to establishing whether or not the defendant, as applicant, owned her own home or whether she had owned her own home within the previous two years. Question 2 in that respect was answered in the negative. Question 8 sought information as to ownership of any real estate. Again, the defendant indicated in the negative.

23 The declaration indicated that the defendant had an account balance of $5,000.

24 Ms Kearns’ evidence was that she prepared the Agreement with the date of it being 28 September 2005 with no accommodation bond payable and a discounted rate for accommodation and care on a concessional basis in accordance with the Aged Care Act 1997 (Cth).

25 Ms Kearns noted that the agreement was incorrectly dated 12 August 2005 for reasons explained by her. Ms Kearns stated that she allocated the defendant one of the concessional hostel units based upon the statements she had made in her Application for Admission and the Financial Information Questionnaire.

(4) The defendant’s ownership of property

26 Ms Kearns’ abovementioned affidavit established that the plaintiff was, at the time of making the application for admission, and still is, the owner of a home unit. The unit is known as Apartment 13 in a residential strata complex adjacent to Cammeray Golf House situated at 15 Morden Street, Cammeray. According to real estate estimates adduced in evidence, apartments have sold in the area in the previous 12 months within the price range of $300,000 to $500,000.

27 Ms Kearns stated in her affidavit (paragraph 16), that if she had been aware that the defendant was the registered proprietor of a strata unit in Cammeray at the time of her Application, she would have rejected her application for a concessional unit. Ms Kearns observed that there is currently a waiting list for concessional accommodation. She also stated that as soon as she realised that the defendant was the proprietor of the Cammeray property, she proceeded to draft a Notice of Termination.

(5) Termination of Agreement by the plaintiff

28 By letter dated 1 December 2006, the plaintiff gave notice to the defendant to vacate the townhouse on or before 18 December 2006. A copy of the notice is included within in Exhibit “LK-1” (pp.66 to 68).

29 The notice of termination of the Agreement referred to the terms of the Agreement and the terms and conditions therein. The notice asserted that “… As a result of a fundamental breach of the Agreement by you, the Agreement is hereby revoked and you are put on notice that you are required to quit the premises within fourteen (14) days of service of this notice upon you”.

30 It is not necessary here to set out the full details of the notice of termination, other than stating that it provided the reasons for termination on p.2 (paragraphs (a), (b) and (c)). In paragraph (a), it was asserted that the defendant was in “… fundamental and continuing breach of clause 14.04 of the Agreement in that she deliberately provided false financial information to WRCA as particularised below, thereby inducing WRCA to enter into the Agreement when, if full and proper disclosure was made by you, WRCA would not have entered into the Agreement with you …”.

31 Particulars were set out in the letter as to the representation said to have been made by the defendant as to her assets.

32 Paragraph (b) of the notice of termination made reference to the defendant’s alleged conduct towards residents and staff.

33 Paragraph (c) of the notice referred to clauses 17.04(b) and (c) of the Agreement. These were described as providing a procedure for termination which commences with the defendant being assessed by an Aged Care Assessment team. It noted that the defendant had refused to be assessed by such a team. It was alleged that her conduct had frustrated the performance of the Agreement and was a breach of it.

34 The notice of termination had enclosed with it a copy of a letter written to the defendant also dated 1 December 2006. That letter referred to the fact that a copy had been sent to her son.

(6) Medical assessment of the defendant

35 Exhibit LK-1 contains a copy of a report from Dr Brazier dated 4 December 2006. That report stated that the defendant suffered from hypertension, hyperlipidemia and non-insulin dependent diabetes. A medical condition in 1999 and related events had left the defendant with some slight mobility problems. It was noted that she walked with a stick and had a slight imbalance.

36 Dr Brazier’s report also refers to the fact that the defendant has “… an unfortunate personality problem. She can become very aggressive and manipulative. She is also known to slander both residents and staff. This has caused problems with other residents in the several residential facilities, in which she resided over the years. The early dementia residents find the situation most difficult to cope with. Unfortunately she has no insight into the results of her behaviour, and denies any impropriety …”.

37 Dr Brazier further stated in the report:-

“It would be worthwhile for her to consider a move to Queensland, to be near her son and his family, as the attention that she would receive from her relatives may help reduce her aggression.”

38 Ms Kearns wrote to the defendant on 14 December 2006 in respect of an assessment. The letter confirmed an Aged Care Assessment Team as having assessed her long-term care needs. Information was provided as to hostels that were available at Hunters Hill and Mosman. The letter refers to the fact that the reasons for termination “… include your deliberate provision of false financial information to us …”.

39 The letter advised that the defendant give serious consideration to the option of returning to her home in Cammeray on 18 December 2006. It was stated in the letter that the Aged Care Assessment Team were in favour of such a move and that a Community Care Package for her in her home could be arranged.

(7) The terms of the Hostel Resident Agreement

(a) General matters

40 The Agreement is in a form apparently sanctioned by the Aged Services Association of NSW and ACT Inc and is styled as a “Model Hostel Resident Agreement”. The form of the Agreement was apparently settled in February 1999 and contains a note that it was “reviewed by WRCA January 2004” (Exhibit “LK-1” at p.11).

41 The Agreement contains standard conditions divided into 27 sections with five schedules. The issues in the present proceedings are primarily concerned with the following sections of it:-

Section 14, “Personal information and records”
Section 17, “Ending the agreement”

42 It is necessary, however, for attention also to be given to certain other terms of the Agreement. Under it the accommodation granted to the defendant was in the nature of a licence of a personal nature that could not be transferred. It was not a tenancy agreement (see clause 6.01).

43 In addition, attention has been given to clause 6.06 of the Agreement which provides:-

“Your right to live in your accommodation in the Care Facility will continue for your life unless it is terminated in accordance with the provisions of this Agreement. Sections 17 and 18 of these Standard Conditions specify the circumstances in which it may be terminated.”

(b) Clause 14 – the promise as to accuracy of information

44 Clause 14.04 is a clause of the Agreement included with other provisions under the heading “Personal information and records”. It is in the following terms:-

“14.04 You make the following promises to the Association regarding information which has been given or may hereafter be given by you or on your behalf to the Association relating to you or your assets or income:-
(a) the information is accurate to the best of your knowledge or the knowledge of and belief of the person who gives the information on your behalf after making such enquiry as is reasonable to ensure that the information is accurate;
(b) you will provide any verification of the information which the Association may reasonably require but the Association will be under no obligation to verify or require verification.” (emphasis added)

45 Clause 14.04 is to be read in context with clause 14.05 which is in the following terms:-

“14.05 You agree that when it enters into this Agreement the Association can rely on the accuracy of information which has been given by you or on your behalf.”

46 In relation to the application of Clause 14.04 in the present proceedings, the following matters are noted:-

(a) Clause 14.04 operates as a contractual term in the nature of a warranty as to the accuracy of information provided either prior to the formation of the Agreement and/or information provided at a later time.

(b) The information supplied in the present case was provided directly by the defendant to the plaintiff and not by another on her behalf.

(c) The relevant information for the purposes of the present proceedings consists of the answers indicated by the defendant in the statutory declaration form (Exhibit “LK-1”, pp.41-42).

(d) The construction of the provision in clause 14.04(a) “… the information is accurate to the best of your knowledge …” is central to the determination of the first of the three questions (a) reproduced in paragraph [3] above.

(c) Clause 17 – “Ending the Agreement” – provisions concerning “termination” and the power to request a resident to leave a Care Facility

47 Clause 17 is entitled “Ending the Agreement”. The following matters are noted in relation to that clause:-

(a) Clause 17.01 provides that the Agreement may be “terminated” by mutual consent.

(b) Clause 17.02 provides that occupancy under the Agreement may be “terminated” upon a number of events specified in (a) to (f). These include the death of the resident, abandonment of the accommodation, the making of an order by “the Tribunal” terminating the Agreement and “the expiry of a notice given pursuant to clause 17.05 or 17.08 subject to any relevant law” (sub-clause (f)).

(c) Clause 17.04 reflects the terms of s.23.5 of the Aged Care Act 1997 (Cth) . It states that the Aged Care Act provides that the Association may “ask you to leave the Care Facility” in the circumstances specified in (a) to (f) of that clause. The clause does not employ terminology of “termination” found elsewhere in the Agreement but reflects the language of s.23.5 and 23.6 of the User Rights Principles 1997 made under s.96.1(1) of the Aged Care Act . It is noted that none of the sub-clauses of clause 17.04 are applicable to the present matter.

(d) Clause 17.05 provides for the procedure where “the Association decides to require you to leave the Care Facility” . That is an apparent reference back to the circumstances dealt with in clause 17.04 and the clause also reflects the statutory language of clause 23.6(1) of the User Rights Principles 1997 .

(d) Clause 17.06 refers to statutory safeguards and protections and states:-

“17.06 The Aged Care Act provides that the Association will not take action to make you leave, or imply that you must leave , before suitable alternative accommodation is available that meets your assessed long term needs (see clause 17.07) and is affordable by you.” (emphasis added)

(e) Clause 17.07 refers more particularly to beneficial safeguards and states:-

“17.07 The Aged Care Act provides that your long term needs must be assessed by:-
(a) an Aged Care Assessment Team; or
(b) in any case other than mentioned in clause 17.04(c), at least two medical or other health care practitioners who meet the following criteria (criteria is then specified).”

(f) Both clauses 17.06 and 17.07 set out above merely record what is provided for by the Aged Care Act , but do not in express terms confer rights upon residents under agreements.

48 I will return below to consider the construction and application of the relevant provisions of the Agreement.

(8) User Rights Principles 1997 (Cth)

49 Part 2 of the User Rights Principles is entitled “User rights and responsibilities for Residential Care”. Division 1 of that Part is entitled “Security of tenure”. Part 2 is comprised of s.23.4 to s.23.19.

50 Section 23.4 in Part 2 states:-

“This Division specifies the arrangements for providing security of tenure for a care recipient’s place in the residential care service.”

51 Section 23.5(1) is entitled “Leaving residential care service”. The clause provides that the approved provider may ask the care recipient “to leave the residential care service” only if sub-section (2), (3) or (4) applies.

52 The circumstances of the present matter do not fall within s.23.5 (2)(a) (closure of a residential care service) nor s.23.5(2)(b) (concerned with suitability of care – as to which see below) nor within s.23.5(3)(a), (b), (c) or (d).

53 Section 23.6 is entitled “Requiring care recipient to leave residential care service”. The provisions of that section are of importance to the present proceedings. They, accordingly, are reproduced in full below:-

“ 23.6 Requiring care recipient to leave residential care service
(1) If the approved provider decides to require the care recipient to leave the residential care service, the approved provider must give the care recipient a written notice that includes the following information:-
(a) the decision;
(b) the reasons for the decision;
(c) when the care recipient is to leave;
(d) the care recipient’s rights about leaving, including the right of access to:-
(i) the complaints resolution mechanisms; and
(ii) independent complaints processes; and
(iii) one or more representatives of an advocacy service.
Note For complaints resolution mechanisms, see s.56-4 of the Act.
(2) The approved provider must give the notice to the care recipient at least 14 days before the care recipient is to leave.
(3) The approved provider must not take action to make the care recipient leave, or imply that the care recipient must leave , before suitable alternative accommodation is available that meets the care recipient’s assessed long-term needs and is affordable by the care recipient. (emphasis added)
[This restriction reflects the terms of clause 17.06 of the Agreement extracted above (paragraph [47(3)])]
(4) For subsection (3), the long-term needs of the care recipient must be assessed by:-
(a) an aged care assessment team; or
(b) at least two medical or other health practitioners who meet the following criteria:-
(i) one must be independent of the approved provider and the residential care service, and must be chosen by the care recipient or the care recipient’s representative;
(ii) both must be competent to assess the aged care needs of the care recipient.
(5) The approved provider must give the care recipient a notice stating that the care recipient is no longer required to leave if:-
(a) the decision to require the care recipient to leave was based on the care recipient’s behaviour; and
(b) the approved provider has, since giving the original notice, agreed with the care recipient that, because of a change in the behaviour, the care recipient should stay.”

(9) The parties’ contentions in relation to s.23.5 and s.23.6 – User Rights Principles

54 In his submissions on behalf of the plaintiff, Mr F Kunc of counsel contended that the provisions of s.23.5(3) (relating to the four specified reasons for asking a care recipient to leave) have no application to the present proceedings, a submission which is plainly correct. Mr Kunc submitted that apart from the statutory basis entitling an approved provider to ask a care recipient to leave a residential care service in accordance with s.23.5 there also existed contractual rights under the Agreement in the plaintiff to effect a termination of the Agreement where a breach of it is established.

55 Mr Kunc conceded that, for the purposes of the present proceedings, s.23.6 of the User Rights Principles should be taken as prescribing the procedural safeguards and protections which are applicable either to the circumstance where a resident or “care recipient” is requested to leave in accordance with s.23.5 of the User Rights Principles or in the circumstance where a Hostel Resident Agreement is validly terminated on the basis of a breach of condition of the Agreement.

56 I will return below to consider the nature of the obligation and the procedures that are required to be implemented to give effect to the provisions of clause 23.6 in circumstances where a Hostel Resident Agreement has been validly terminated.

57 The primary submission made by eminent senior counsel for the defendant, Mr. T E F Hughes QC, was that there had been no breach of clause 14.04 of the Agreement (question (a)). In relation to questions (b) and (c), Mr Hughes submitted that there was no entitlement in the plaintiff to terminate the Agreement in the circumstances of the present case, even if the Court were to determine that the defendant was in breach of the Agreement. On that basis, it would not be entitled to possession.

58 In this latter respect, Mr Hughes submitted that under s.23.6(3) of the User Rights Principles established under s.56.1 of the Aged Care Act 1997, an approved provider such as the plaintiff must not take action to make a care recipient such as the defendant to leave, or imply that the care recipient must leave before:-

(a) suitable alternative accommodation is available that meets the care recipient’s assessed long-term needs; and

(b) such suitable alternative accommodation is affordable by the care recipient.

59 The issue of a notice of termination without the required assessment having been made and in circumstances where the conditions of s.23.6(3) have not been met, Mr Hughes contended, renders a notice of termination ineffective at law and therefore invalid.

60 In support of this argument, it was submitted that the plaintiff intended that the letter dated 1 December 2006 (the notice of termination) be understood by the defendant as a requirement that she leave her accommodation. Mr Hughes relied, in this respect, upon the terms of the notice and upon the evidence at transcript pp.22, line 55, and p.23, lines 10-15.

61 Mr Hughes accordingly submitted that the plaintiff was not entitled to give the notice contained in the letter before suitable alternative accommodation affordable by the defendant was available to meet the defendant’s assessed long-term needs. The plaintiff, he submitted in that respect, carried the onus of proof on this issue as it was a condition precedent to obtaining an order for possession. As discussed below, Mr Hughes’ contention was that the evidence indicated that there had been a failure to comply with the requirements of s.23.6.

PART B

(1) The first question – question (a) – “Whether the defendant breached clause 14.04 of the Hostel Resident Licence Agreement entered into between the parties and dated 12 August 2005 (the Agreement)”

62 The answer to this question is to be resolved by establishing the proper construction to be given to the relevant terms of clause 14.04(a) and to then relate its provisions to the facts established by the evidence in the proceedings.

63 The key provision in the relevant clause is the phrase “… the information is accurate to the best of your knowledge …”. It was argued on behalf of the defendant that the qualifying words “to the best of your knowledge” imports the concept of “belief” and “perception” of the person providing the information.

64 There was no dispute that the information conveyed by the defendant by the ticking of the relevant entries to the questions set out in the statutory declaration form was incorrect information. Accordingly, the information was inaccurate. The evidence plainly established that at the time of completing the form, the defendant was the registered proprietor of a unit known as 13/15 Morden Street, Cammeray contained in Certificate of Title 13/SP5665 (Exhibit B).

65 Mr Hughes, in his written submissions contended (written submissions, 7 June 2007, paragraph 5):-

“… a reference to information being accurate to the best of the knowledge of the supplier of the information is a reference to the supplier’s perception of the accuracy of the information , ie, a perception that the information is accurate to the best of ones’ belief. In this area of discourse, knowledge and belief are concomitant and inseparable concepts. The perception of ‘accuracy of information, to the best of a person’s knowledge’ imports a reference to a belief, held by the person supplying the information, in its accuracy. The reference to the ‘best of the supplier’s knowledge’ imports that such knowledge (ie, ‘perception’) is based on a subjectively genuine thought process in which the supplier has engaged with respect to the information leaving him/her to an honest conclusion that the information is accurate. If the relevant criterion were the objective accuracy of the information supplied, the requirement of accuracy ‘to the best of the supplier’s knowledge’ would be otiose.”

66 Mr Kunc, on the other hand, submitted that the word “best” must be given weight and it implies a fullness or completeness in imposing an obligation to make some reasonable inquiry if necessary. He contended that it also supports the submission that what is required is objective rather than subjective knowledge (plaintiff’s written submission, 8 June 2007, paragraph 37).

(2) Consideration of question (a)

67 In determining the correct construction and operation of clause 14.04, the following matters, in my opinion, are of importance:-

(a) Clause 14.04(a) has two limbs. The first is directed to the accuracy of the knowledge of the applicant himself or herself and is concerned with accuracy of information to the best of that person’s knowledge. On the other hand, the second limb is directed, not to the applicant himself or herself, but to the knowledge of one who acts on behalf of an applicant for accommodation.

(b) In relation to a person who is acting as agent or delegate on behalf of an applicant, the terms of clause 14.04(a) are different to the terms that apply to the person who is the applicant, in that it imports not only the concept of “knowledge” but also that of “belief” in the phrase “… the knowledge of and belief of the person who gives the information on your behalf …” .

(c) In relation to information supplied by an applicant personally, there is no reference to the question of “belief” or, for that matter, by implication, to the “perception” of a person. The phrase “the information is accurate” is followed only by the expression “to the best of your knowledge” . This latter phrase does not, in my opinion, import notions of belief or perception. That very phrase is, in fact, defined in the Shorter Oxford English Dictionary, 5th ed., as “… to the furtherest extent of one’s … knowledge” . Accordingly, the phrase refers, in effect, to the inner and outer limits of a person’s knowledge in relation to particular information. It does not qualify the requirement for accuracy of information by terms such as “belief” as appears in the second limb of clause 14.04(a).

(d) Finally, the term “knowledge” means “the fact of knowing a thing” or to “acquaintance with a fact or facts” : Shorter Oxford English Dictionary, 5th ed.

68 On the above basis, I am unable to accept the submission made by Mr Hughes, which has been extracted above or his further submission that clause 14.04(a) has been complied with where information supplied by an applicant, though objectively wrong, is subjectively made in the honest belief of the supplier of the information.

69 Although the notice of termination dated 1 December 2006 did assert that there had been a deliberate provision of false financial information, I do not consider that of itself would invalidate the notice of termination in circumstances in which there is express reference made to a breach of clause 14.04 of the Agreement based upon the failure to inform the plaintiff of the fact that the defendant was the registered proprietor of the home unit. The important matter was whether or not there existed, at the time the notice of termination was given, a ground for termination: Carter on Contract, Butterworths at [37-030].

70 It follows from the above analysis that the expression “the information is accurate to the best of your knowledge” is:-

• An expression that looks at the objective quality of the information in terms of its accuracy and not according to the subjective belief or perception of the supplier of the information.

• An expression that is directed to whether or not the information was in fact accurate or not. It does not include, for example, the intention or belief of the person supplying the information.

• The question posed by the contractual term as to whether or not the information is accurate or not is to be judged at the time the defendant conveyed the information, in this case in the statutory declaration form which, on Ms Duthie’s evidence, which I accept, was on 23 September 2005.

• An expression that does not require the plaintiff to establish that the defendant intentionally or deliberately omitted to inform it of her ownership of the home unit.

71 I will, notwithstanding the conclusion I have reached on the construction of clause 14.04(1), refer to the evidence underpinning Mr Hughes’ contentions and submissions.

72 The defendant gave evidence as to the circumstances in which she had acquired the strata unit and subsequent borrowings from her son, Mr Robin Frey, and the entry into a loan agreement with him on 29 September 1990 (Exhibit 2). The defendant stated that she had borrowed money from her son and that he paid “… all the levies on my unit …”.

73 On 25 September 1990, the defendant and her late husband and her son signed a handwritten agreement. This recorded a loan of $40,000 to Mr Frey’s parents “for an indefinite period of time secured by a registered 1st mortgage over the unit at 13/15 Morden Street, Cammeray”.

74 The agreement contained various provisions concerning interest and the provision of funds. It also recorded that:-

“The loan will be repaid to Sonya and Robin (referring to Mr Frey and his former wife) on the following agreed basis (1) if the unit is sold or (2) on the death of the last surviving spouse.”

75 The agreement then set out a repayment of the loan. It incorporated a schedule in the following terms:-

16%

If unit sold after	1 year	Repayment to be	$46,400	Plus pre paid tax
2nd year	“ “	$53,800	“ “ “
3rd year	“ “	$62,400	“ “ “
4th year	“ “	$72,400	“ “ “
5th year	“ “	$84,000	“ “ “
6th year	“ “	$97,400	“ “ “
7th year	“ “	$113,000	“ “ “
8th year	“ “	$131,000	“ “ “
9th year	“ “	$152,000	“ “ “
10th year	“ “	$176,400	“ “ “

76 The evidence of Mr Frey was that no formal mortgage was ever executed over the unit. I should note in passing that an agreement based on a rate of 16% for debts in question operating indefinitely so as to approach the value of the unit may raise questions as to its enforceability.

77 In cross-examination, the defendant stated that she understood what a mortgage was and that she thought that a mortgage previously on the title to the unit had been paid of “before 1990”. The defendant asserted many times that she did not regard the property as her unit. She added:-

“Well, it’s his unit (referring to her son), it’s not mine, and, I mean, he has every right to save his money. I owed it to him.”

78 The defendant stated on a number of occasions that she and her husband did not own the unit, and that later she did not own the unit and that “… it was my son’s unit”.

79 In giving these answers, I take the defendant as conveying her assertion that, by reason of the initial loan of $40,000 and a subsequent loan of $70,000 a year later with interest accruing on the loans and the fact of those loans not having been repaid, her son, in effect, had acquired an interest in the unit, even if the title to it had not been registered in his name. The defendant, however, acknowledged in cross-examination the fact that she was the registered proprietor or owner of the unit.

80 The defendant was shown the application for admission to the Willoughby Retirement Community Association (Exhibit LK-1, p.39) in cross-examination. However, she did not concede that the signature on the document was her own. She was then shown the statutory declaration forming part of Exhibit LK-1 at pp.41-44. She stated it was not her signature or writing on the document.

81 Notwithstanding the evidence of the defendant in these respects, it is clear from the evidence, and there was no submission to the contrary, that the defendant did sign the application for admission and I accept the evidence that it was she who supplied information indicated by the ticking of the appropriate answers on the statutory declaration form.

82 Whether or not the defendant, by some means, held a belief, notwithstanding that she was registered as the proprietor of the home unit, that she in fact did not own it, the evidence, of course establishes the contrary. Accordingly, the information provided by her on 23 September 2005 was incorrect and therefore inaccurate within the meaning of clause 14.04 of the Agreement.

83 Given what I consider to be the proper construction as discussed earlier, I am unable to accept the submission that, on the fact, there was not a breach of clause 14.04(a). In particular, in answering “No” to the question “question 2” on the statutory declaration “do you own you own home or have you owned your own home within the last two (2) years?”. The answer was clearly wrong and inaccurate.

84 Similarly, in answering “No” to question 8 “Do you own any other real estate?”, the information supplied by the defendant was inaccurate. The inaccurate answers breached clause 14.04.

85 Although I have determined that there was a breach of clause 14.01(a), it is necessary to determine the significance of the breach. In other words, whether a breach of a contractual term relates to a trivial or substantive matter is relevant in determining whether there has been a valid exercise of any right of termination. That is a matter considered below.

PART C

The second question – (b) – whether the plaintiff was entitled to terminate the Agreement by reason of the breach referred to in (a)

86 As to a contractual right to terminate, the plaintiff has submitted that whilst the statutory regime, in particular s.23.5 and s.23.6 appear as part of the statutory regime to provide “security of tenure” under the User Rights Principles, there is nothing in the Aged Care Act itself or the User Rights Principles which states or indicates that an approved provider cannot terminate a licence agreement on contractual grounds, that is, for breach of contract. In this respect, emphasis was given to the importance of the provision of accurate information for concessional status and government assistance.

87 I consider this submission to be a sound one. Whilst the evident legislative purpose was to provide a measure of security of tenure by prescribing the circumstances in which an approved provider may either ask a care recipient to leave or require such a recipient to leave a residential care service, there is no statutory exclusion of ordinary common law rights to terminate a contract where, for example, there has been a breach of a substantial or fundamental term of an agreement. In this respect, the provisions of s.59.1 of the Aged Care Act specifies the matters which a Resident Agreement must specify. There is no provision in that section which precludes the operation of ordinary contractual principles that apply in the event of breach of an important term of an agreement.

88 Additionally, s.23.85 of the User Rights Principles, “requirements for a Resident Agreement”, provides, in sub-paragraph (h):-

“The Agreement must include any other matters negotiated between the approved provider and the care recipient (including, if applicable, costs).”

89 It is clear that that provision envisages that the parties are free to negotiate and agree upon contractual terms and conditions. Section 14.04 in the Agreement is one such permitted condition.

90 I turn to the question as to whether or not the breach by the defendant which I have found to have occurred entitles the plaintiff to terminate the Agreement. The parties have made submissions in this respect, in particular, having regard to the provisions of both clauses 14.04 and 14.05.

91 The evidence does establish the significance and importance of evaluating applications including, in particular, the financial status of applicants. The provision of information in relation to that matter is plainly a matter of importance. A person applying for accommodation and, in particular, for concessional status, if accepted, will not be required to pay for accommodation. This occurs in the context in which the evidence establishes a long waiting list for concessional government assisted places. An additional benefit is that a concessional resident obtains a contribution from the Federal Government (said to amount to $45.02 per day).

92 A term of the contract will be regarded as a condition of the contract where it is open to a Court to characterise a term as going to the very substance of the contract: Luna Park (NSW) Limited v Tramways Advertising Pty Limited (1938) 61 CLR 286.

93 Further, a condition will appear, either from the general nature of the contract considered as a whole, or from its own provisions, to be of such importance to the promisee that he or she would not have entered into the contract unless its performance was assured, and this ought to have been apparent to the promisor: Luna Park (NSW) Limited (supra) per Jordan CJ at 641-642. See also Associated Newspapers Limited v Bancks (1951) 83 CLR 322.

94 As to the application of termination of a contract for material breach in the context of a licence agreement, see Mangrove Mountain Quarries Pty Limited v Barlow [2007] NSWSC 492 (Windeyer J).

95 The evidence in the present matter is that the defendant was allocated one of the concessional hostel units based upon her statements made in the Application for Determination and the Financial Information Questionnaire (Ms Kearns’ affidavit sworn on 22 March 2007, paragraph 13).

96 Ms Kearns also gave evidence that had she been aware that the defendant was the registered proprietor of a strata unit in Cammeray at the time of her application, she would have rejected an application for a concessional unit in circumstances where there has been a waiting list for concessional accommodation.

97 It has also been accepted that breach of an intermediate term, as distinct from a breach of a condition, may give rise to a right of determination:-

“An intermediate term exists between a condition and a warranty in the scale of its importance, such that a breach of an intermediate term will give rise to a right to terminate only if it results in sufficiently serious consequences: Ankar Pty Limited v National Westminster Finance (Aust) Limited (1987) 162 CLR 549 at 562.”

98 Accordingly, an intermediate term will, according to the gravity of the breach, be said to operate either as a condition or a warranty. In the circumstances of the present case, I consider that the provisions of clause 14.04 may be classed as a condition or an intermediate term where the information in question and its accuracy was fundamental to the assessment of the eligibility of the defendant as a person for concessional accommodation in circumstances where such accommodation is subsidised from public funds. However, the answer to question (b) is to be determined in relation to the matters considered in relation to question (c).

PART D

The third question (c) – whether the plaintiff is entitled to vacant possession of Townhouse 18, 1 Warrah Street, Chatswood

99 Whilst the plaintiff has established a breach of a condition or an intermediate term of the Agreement on the basis earlier discussed, there is an issue as to the validity and/or enforceability of the notice of termination based upon that breach and the plaintiff’s entitlement to possession.

100 A demand or requirement for an aged person who suffers from infirmities to leave residential care is plainly a matter attendant with some difficulty and it is for this reason that safeguards and requirements are spelled out in s.23.6 on the User Rights Principles.

101 On the findings made, namely, that there had not been, prior to the service of the notice of termination, an assessment of the defendant’s long-term needs and in the light of such assessment a determination that suitable alternative accommodation was available, there was, in my opinion, a contravention of the provisions of s.23.6(3) in that the notice of termination implied that the defendant, a care recipient, was required to leave her hostel accommodation in 14 days after the 1 December 2006, that is 15 December 2006.

102 Although there is evidence that the defendant was not initially co-operative in participating in proposals for her to be assessed, she, in due course, did agree to be assessed and it cannot, in the circumstances, on the evidence before me, be determined that her earlier refusals to participate were unreasonable. There was simply no exploration as to the reasons behind those earlier refusals.

103 The plaintiff was required to establish that:-

(a) The defendant had breached the Agreement in a fundamental or substantive respect.

(b) That before the plaintiff either took steps to have the defendant leave or before it implied that the defendant must leave:-

(i) there had been an assessment of the defendant’s long-term needs in accordance with s.23.6(4) of the User Rights Principles ; and
(ii) that suitable alternative accommodation was available that met such needs of the defendant and which was affordable by her.

104 The plaintiff relied upon the evidence in Exhibit “LK-1” (in particular pp.69 to 79) as establishing that the above pre-requisites had been met.

105 The important date by which such evidence is to be assessed is the date of the notice of termination, namely, 1 December 2006. The question is what had been done before 1 December 2006 to meet the procedural requirements in s.23.6 of the User Rights Principles?

106 Firstly, any assessment made of the defendant’s needs by the defendant’s general practitioner, Dr Brazier, was not the subject of a report by her prior to the date of the notice of termination for he report was dated 4 December 2006. That report could not be taken as a comprehensive assessment of the defendant’s long-term needs. It was not expressed in terms of an assessment of need. I will return to Dr Brazier’s reports below.

107 The seven page Aged Care Record dated 4 December 2006 under the hand of ACAT Assessor, Melanie Hawthorne, was a post notice of termination assessment. Part 1, Client Registration, of that Record indicates that the defendant’s case was first referred for assessment on 4 December 2006, the date of Ms Hawthorne’s record itself.

108 I note that it was on or about 27 November 2006 that Ms Kearns caused an inquiry into the defendant’s ownership of real property. Four days later, the notice of termination was issued.

109 There had been an attempt earlier to assess the defendant’s needs. Ms Kearns refers in her affidavit to a meeting held on 24 August 2006 between Dr Brazier, Ms Navin, Ms Duthie, Ms Brooks, Ms Bowker and herself. According to Ms Kearns, Dr Brazier reported on the defendant’s long-term needs (there is no information as to the terms of such “report”) and referred the defendant to consulting psychogeriatrician, Dr Bob Russell, and Royal North Shore Hospital ACAT for “further assessment”.

110 On 17 November 2006, the defendant again advised that she would not see an ACAT team.

111 Ms Kearns further stated that the defendant refused to see Dr Russell and the Royal North Shore Hospital ACAT team member, Ms Hawthorne, when they visited her. Accordingly, an ACAT long-term needs assessment could not be completed. Subsequently, on 4 December 2002, the defendant agreed to be assessed by ACAT.

112 On an unspecified date in November 2006, Ms Kearns stated that the defendant was assessed by “the health practitioners” in accordance with the User Rights Principles. Those practitioners are not specifically identified but apparently included Dr Brazier and Ms Brooks, Acting Director of Resident Care.

113 Both Dr Brazier and Ms Brooks concluded that the defendant “was no longer suitable to be accommodated at WRCA but was suitable to be transferred to another residential care facility in Queensland to be near her son and his family (which may help to reduce her aggression) or to relocate back to her home unit in Cammeray …”. Reference is made to Dr Brazier’s opinion in her report of 4 December 2006 and 8 January 2007.

114 I have referred above to the first of those two reports. That report does not confirm that an assessment of the defendant’s long term needs was undertaken by Dr Brazier in accordance with the User Rights Principles. Even if I were to proceed upon the basis that one may imply that Dr Brazier did so, there are no particulars of what assessment was made with respect to both the defendant’s physical and other infirmities. That is not a reflection upon Dr Brazier. She evidently was not requested to provide an assessment report which laid out the findings and results of any assessments, testing and/or examinations that may have been undertaken. There is also no reference to the date or dates upon which any consultations were held in November or December 2006.

115 Dr Brazier’s report of 8 January 2007 repeats the first five paragraphs of her first report. The only new matter is the penultimate paragraph. That refers to “an alternative suggestion” which relates to a relocation back to the Cammeray unit with a Full Care Community Package “if assessed to be appropriate”.

116 The second report does not, in my opinion, constitute an assessment for the same reasons expressed above in relation to the first report. Given the defendant’s obvious physical infirmities and the difficulty of her accessing the Cammeray unit by the stairway to it, I would, with respect, concur with Dr Brazier’s comment as to the need for an assessment of any such re-location.

117 Mr Kearns, in her affidavit and oral evidence, provided details of the availability of other facilities. This evidence relies upon Mr Kearns’ inquiries by accessing internet web sites. I do not consider that such inquiry of itself takes the issue of an assessment of the defendant’s long-term needs very far. It is one thing to establish the availability of premises and another as to the “suitability” of the same which must depend upon a professional assessment involving a matching of a particular individual’s needs and consequent requirements to the premises, staff and support services available in particular facilities.

118 It was submitted on behalf of the plaintiff that the plaintiff was not entitled to give the notice of termination on 1 December 2006 before suitable alternative accommodation affordable by the defendant was available to meet her assessed long term needs. In this respect, it was submitted that the plaintiff had the onus of proof on this issue as a condition precedent to obtaining an order for possession. I accept that the plaintiff does have such an onus.

119 It was also submitted on behalf of the defendant that there was no evidence as to the availability to the defendant at any relevant time of suitable alternative accommodation that was affordable by the defendant to meet her assessed long-term needs. It was emphasised in this connection “assessed” means assessed pursuant to s.23.6(4) of the relevant principles. In this respect, reliance was placed upon Ms Kearns’ admission that as at 1 December 2006 there had been no assessment of her long term care needs by an Aged Care Assessment Team as required by s.23.6(4)(a) or by medical or other health care practitioner who met the criteria prescribed by s.23.6(4)(b).

120 Accordingly, I have concluded that the matters required by s.23.6(3) had not been undertaken prior to the notice of termination and that the notice was accordingly invalid and unenforceable. Accordingly, the plaintiff was not entitled to possession. That conclusion, of course, would not preclude the plaintiff from relying in the future upon the defendant’s abovementioned breach subject to fulfilment of the statutory pre-conditions.

121 Accordingly, given the invalidity of the notice, questions (b) and (c) must be answered in the negative.

122 I have accordingly concluded that the answers to the questions set out in paragraph [3] should answered as follows:-

(a) Yes
(b) No
(c) No

123 I will reserve to the parties the opportunity to make submissions on the question of costs.

124 I will permit the parties the opportunity or reading these reasons before determining the future course of the proceedings in terms of case management.

125 Accordingly, I stand the proceedings over for mention and directions, if required, to Thursday 12 July 2007 at 9.30 am. I grant leave in the interim to apply to the List Judge as necessary on one day’s notice.

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