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HG Alert: Retirement Villages Case Tests CCT Jurisdiction - Apr 2009

Retirement Villages Case Tests the Jurisdiction of the Commercial and Consumer Tribunal

A decision of the Commercial and Consumer Tribunal handed down in March reinforces the monetary limit of the Tribunal in hearing applications and also confirms the inability of the Tribunal to grant injunctive relief.

In the recent case of Filmer & Ors v Carlyle Gardens Retirement Village Pty Ltd, James and Patricia Filmer and a number of other residents of Carlyle Gardens Retirement Village, Bargara who collectively leased nine units at the village sought orders that the current operator provide a 60 bed aged care facility, and until that facility was operational, that their exit fees be reduced to 0% each. This was to provide compensation for the inflated ingoing contribution paid by the applicants in the belief that the village would contain such a facility. The applicants alleged that representations were made to all of them before they entered into their respective residence contracts, and that the facility was to be constructed within the village in 2007.

The current operator of Carlyle Gardens Retirement Village is AMP Capital Meridien Lifestyle (ACML) who opposed the orders principally on the ground that the Tribunal did not have jurisdiction to make the orders sought.

ACML at the direction of the Tribunal filed written submissions on the jurisdiction issue and both parties consented to the issue of jurisdiction being determined as a preliminary issue.

Issues considered by the Tribunal

The Tribunal considered the relevant provisions in both the Commercial and Consumer Tribunal Act 2003 (CCT Act) and the Retirement Villages Act 1999 (RV Act) in determining whether it had jurisdiction to hear the application.

Under the RV Act, the Tribunal’s jurisdiction is limited to less than the monetary limit of the District Court of Queensland, which limit is $250,000.00.

In response to the orders sought for ACML to construct the facility, ACML submitted that such an order is effectively a mandatory injunction and outside the jurisdiction of the Tribunal. Of the nine applicants, four had public information documents (PID) that made no reference to a proposed facility and were in effect seeking a mandatory injunction. The remaining five applicants that held PIDs that referred to a proposed aged care facility were seeking in effect, specific performance of that term, which was part of their residence contract.

Findings of the Tribunal

Whilst considering the relevant provisions under the RV Act, the Tribunal commented that the inference from such provisions is that the Tribunal has no general power to grant an injunction when determining a retirement village issue.

In considering the applicants’ claim that misrepresentations had been made about the facility before they entered into their residence contracts, the Tribunal held that:

“a claim based upon misrepresentation in the course of pre-contractual negotiations is not a dispute about ‘the parties’ rights and obligations under the residence contract’. It is a claim relating to, or involving, a residence contract but not a claim ‘under’ the residence contract, and is thus not within the definition of ‘retirement village dispute’…

The Tribunal determined that it did not have jurisdiction to grant either the orders sought by the applicants on the grounds that:

  • in respect of the order to construct the facility, the Tribunal had no power to make the order and even if it did the order would be in excess of its monetary jurisdiction; and
  • in respect of the order that the applicants’ exit fee in their residence contracts be reduced to 0% until the facility was constructed, there existed no power in the RV Act to vary a residence contract to reduce the amount of an exit fee, and there was no power to do so in the general and specific grants of jurisdiction under the RV Act.

Message for retirement village operators

The powers of the Tribunal in hearing retirement village applications are limited and specific and will always be subject to the monetary limit of its jurisdiction.

In considering any applicants made by residents, operators should always bear in mind the scope of the Tribunal’s jurisdiction and its monetary-limited jurisdiction.

A copy of the full decision can be located at www.tribunals.qld.gov.au/RV/rvDecisions.shtm.  

For further information regarding legal issues associated with retirement villages, please contact HopgoodGanim’s Retirement Village specialists.