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Golding v Lusping Pty Ltd[2020] QCATA 134

Golding v Lusping Pty Ltd[2020] QCATA 134

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Golding v Lusping Pty Ltd [2020] QCATA 134

PARTIES:

PAUL HENRY GOLDING

(applicant)

v

LUSPING PTY LTD

(respondent)

APPLICATION NO:

APL340-19

ORIGINATING APPLICATION NO:

OCL075-18

MATTER TYPE:

Appeals

DELIVERED ON:

10 September 2020

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Senior Member Howard

Member Lumb

ORDERS:

  1. Leave to appeal is granted.
  2. Each of the parties must file with the Tribunal and serve on the other party within 28 days of delivery of these reasons:
  1. (a)
    written submissions, no longer than 10 pages, addressing the following issues only:

(i) whether the Appeal Tribunal has power to make orders under s 191 of the Retirement Villages Act 1999 (Qld) consequent upon the findings in the Reasons for Decision that, save for the categories of payment referred to in subclauses 3.1.1(ii), (iii) and (iv) of the Residence Contract, all amounts payable by the Applicant under clause 3.1.1 of the Residence Contract may not be increased above the CPI increase stipulated by clause 3.1.3 of the Residence Contract (‘the Findings’); and

(ii) what orders should be made, including the amount of compensation (if any) payable to the Applicant, consequent upon the Findings; and

  1. (b)
    any expert accounting evidence in relation to the question of the amount of compensation, if any, payable to the Applicant, or, alternatively, a detailed calculation (showing workings) of the amount of compensation the party submits is payable (if any) to the Applicant, consequent upon the Findings.
  1. Each of the parties may file in the Tribunal and serve on the other party written submissions, no longer than 10 pages, responding to the other party’s submissions and the expert accounting evidence or detailed calculation, within 14 days of service of the other party’s submissions and material pursuant to Order 2.
  2. The costs of the Application are reserved until final orders are made on the appeal.

CATCHWORDS:

APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – whether leave to appeal should be granted – where error of law by misstating submissions – whether error of law material to decision – whether error of law in failing to apply correct version of statutory provision

REAL PROPERTY – RETIREMENT VILLAGES – whether scheme operator gave resident document containing information known to be false and misleading in breach of s 86 of the Retirement Villages Act 1999 (Qld) – meaning of ‘service fee’ in residence contract – whether ss 106 and 107 of the Act permit increase in service fee in excess of express provision in residence contract – whether relief available under the Act

Acts Interpretation Act 1954 (Qld), s 14A.

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 32, s 142, s 146, s 147.

Retirement Villages Act 1999 (Qld), s 3, s 21, s 22, s 37, s 71, s 86, s 97, s 100, s 103, s 106, s 107, s 170, s 191, s 209 and s 210.

Trade Practices Act 1974 (Cth), s 52.

Alafaci v Queensland Building and Construction Commission [2015] QCATA 23.

Applicant WAEE v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 236 FCR 593.

Australian Competition & Consumer Commission v Dateline Imports Pty Ltd [2015] FCAFC 114.

Australian Retirement Homes Ltd v Ash [2013] QCA 355.

Briginshaw v Briginshaw (1938) 601 CLR 336

Chancellor Park Retirement Village Pty Ltd v Retirement Villages Tribunal & Ors [2004] 1 Qd R 346.

Commissioner State Revenue v Harrison [2019] QCA 50.

Golding v Lusping Pty Ltd [2019] QCAT 352

Marcolongo v Chen (2011) 242 CLR 546.

McConnel v Queensland Police Service (Weapons Licensing Branch) [2019] QCATA 156.

Mirvac Queensland Pty Ltd v Wilson [2010] QCA 322.

Oakey Coal Action Alliance Inc v New Acland Coal Pty Ltd & Ors [2019] QCA 184.

Paradise Produce NT Pty Ltd v Arnolds Fibreglass Repairs Pty Ltd [2010] QCATA 32.

Pickering v McArthur [2005] QCA 294.

Seymour v Racing Queensland Ltd [2013] QCATA 179.

The Sands Gold Coast Pty Ltd v The Body Corporate for the Sands [2018] QCATA 160.

REPRESENTATION:

 

Applicant:

Self-represented

Respondent:

Butler McDermott Lawyers

APPEARANCES:

 

This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld).

REASONS FOR DECISION

Introduction

  1. [1]
    Mr Golding filed an application for leave to appeal or appeal on 12 April 2019 (‘the Appeal Application’).  He applies for leave to appeal a decision (‘the Decision’) made by the learned Member below (‘the Member’) on 21 November 2019.[1]  By the Decision, the Member dismissed Mr Golding’s Originating Application filed 19 November 2018.
  1. [2]
    Mr Golding is a resident at the Laurel Springs Retirement Village (‘the Village’) situated at Nambour in the State of Queensland.  The scheme operator of the Village is the Respondent (‘the Operator’).  Mr Golding resides in accommodation unit number 10 in the Village, which he acquired from a previous resident for a consideration of $175,000.00, with his tenure being described as ‘freehold’.[2]
  2. [3]
    Mr Golding and the Operator entered into a written agreement headed ‘Residence Contract and Service Agreement’ dated 22 November 2016 (‘the Residence Contract’).  Mr Golding was also provided with a document identified as a ‘Public Information Document’ (‘the PID’).  Full copies of the Residence Contract and the PID were filed by Mr Golding below.  An extract from the PID indicates that Mr Golding received the PID on 22 November 2016.[3]
  3. [4]
    The Originating Application:
    1. (a)
      alleged a contravention or failure to comply with the following provisions of the Retirement Villages Act 1999 (Qld) (‘the RVA’): s 86 (described as ‘False or misleading documents’); ss 103 and 106 (described as ‘Charges for general services’); and ss 97 and 100 (described as ‘Maintenance reserve fund’);
    2. (b)
      sought the following orders:
      1. an order to have the Residence Contract set aside;
      2. any orders necessary to cancel the mortgage and caveat associated with the Residence Contract;
  4. (c)
    set out the following reasons by which Mr Golding considered that the orders sought should be made:
    1. in the PID, the Operator knowingly provided misleading information about the financial viability of the Village, and failed to mention that ‘GS Fees’ (general services fees) would need to be increased at a rate greater than CPI;
    2. in the Residence Contract, the Operator knowingly provided false information that General Services Fees would be increased with CPI, and that all terms must be strictly complied with, and failed to mention that such fees could or would be increased at a rate greater than CPI;
    3. in 2017-2018, funds from the ‘MRF’ (Maintenance Reserve Fund) were unlawfully used to pay for general services;
    4. in 2018-2019, the Operator unlawfully increased the general services fees by > 3 times CPI;
    5. at the 2018 AGM, to justify the unlawful increase in general services fees of minimum 5% per year, the Operator stated that the fees would need to be a lot higher to be a self-funding budget; and
    6. it would not be credible to claim that the Operator was not aware of the true financial position, and that it would need to increase fees far above CPI increase, when the PID was provided.
  • [5]
    The Originating Application was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘the QCAT Act’).
  • [6]
    In the Reasons for Decision (‘the Reasons’), the Member set out, at [11], the relevant issues he had identified as requiring determination.  The Member concluded that Mr Golding had failed to establish any of the matters raised by him and dismissed the Originating Application.
  • [7]
    By the Appeal Application, Mr Golding seeks the following orders:
    1. (a)
      the decision of the Member be set aside;
    2. (b)
      the Residence Contract be set aside;
    3. (c)
      the mortgage that forms part of the Residence Contract be released;
    4. (d)
      the caveat that forms part of the Residence Contract be removed from the title;
    5. (e)
      all monthly ‘Services Fees and Maintenance Reserve Fund Contributions’, as per section 3.1.1 of the Residence Contract, be repaid by the Operator to Mr Golding;
    6. (f)
      the ‘Incoming Payment’ of 2% of the purchase price, as per section 3.3.1 of the Residence Contract, be repaid by the Operator to Mr Golding;
    7. (g)
      the Operator to pay to Mr Golding the filing fee for the Originating Application; and
    8. (h)
      the Operator to pay to Mr Golding the filing fee for the Appeal Application.
  • [8]
    In Part D of the Appeal Application, Mr Golding states that the Member made numerous errors of law, and some errors of fact or of law and fact, throughout the Reasons and reference is made to ss 3 and 4 of the accompanying ‘Submission by Applicant in Support of Appeal’ (‘the Appeal Submission’)[4].  Sections 3 and 4 are set out at pages 7-37 inclusive of the Appeal Submission.  While acknowledging the specific individual contentions raised by Mr Golding, we would summarise the grounds raised by him as involving the following broad categories:
    1. (a)
      the Member ‘misrepresented’ or made incorrect statements about Mr Golding’s submissions below;
    2. (b)
      the Member failed to identify major issues;
    3. (c)
      the Member misinterpreted the RVA or applied the wrong law;
    4. (d)
      the Member made wrong findings of fact or misinterpreted the evidence or relied on irrelevant material; and
    5. (e)
      the Member breached the rules of natural justice.[5]

Jurisdiction

  1. [9]
    The following provisions of the RVA are relevant to the Tribunal’s jurisdiction in this matter:

209 Tribunal’s function

The tribunal’s function is to hear retirement village issues that—

  1. (a)
    are within the tribunal’s jurisdiction; and
  1. (b)
    it is appointed to hear.

210 Tribunal’s jurisdiction

  1. (1)
    The tribunal has jurisdiction to hear retirement village issues, other than a retirement village dispute –
  1. (a)
    about an issue between the parties that—
  1. (i)
    is the subject of arbitration; or
  1. (ii)
    has been the subject of an award (interim or final) in an arbitration proceeding; or
  1. (iii)
    is before, or has been decided by, a court; or
  1. (b)
    if the amount, value or damages in dispute is more than the monetary limit of the District Court within the meaning of the District Court of Queensland Act 1967, section 68.
  1. (2)
    For subsection (1)(a)(i), a retirement village dispute is only the subject of arbitration if the arbitration proceeding has started.

21  What is a retirement village dispute

  1. (1)
    A retirement village dispute is a dispute between a scheme operator and a resident of a retirement village about the parties’ rights and obligations under the resident’s residence contract or this Act.
  1. (2)
    For subsection (1), a retirement village dispute includes a dispute about compliance by a scheme operator or a resident with this Act, whether or not a particular failure to comply is an offence against this Act.
  1. (3)
    In this section—

resident includes a former resident.

Note

In some provisions of this Act there is no means of enforcement apparent on the face of the provision but enforcement by the dispute resolution process is available because of this section.

22  What is a retirement village issue

A retirement village issue is—

  1. (a)
    a retirement village dispute; or
  1. (b)
    an application for an order under sections 169 to 171 or 173.

Leave to appeal and appeal

  1. [10]
    An appeal, insofar as it concerns a question of law, can be brought without leave.  However, to the extent that the appeal raises questions of fact or questions of mixed law and fact, leave of the Appeal Tribunal is required.[6]
  2. [11]
    While the QCAT Act draws a clear distinction between the powers of the Appeal Tribunal pursuant to s 146 (appeal on a question of law only) and s 147 (appeal on a question of fact or mixed law and fact), it has been said that this distinction will lose significance in cases involving both a question of law and also a question of fact or mixed law and fact where leave to appeal is granted.[7]
  3. [12]
    The matters relevant to a consideration of an application for leave to appeal concern whether there is a reasonably arguable case of error in the primary decision and either the grant of leave is necessary to correct a substantial injustice to the applicant,[8] or some point of principle of public importance arises.[9]

The dispute

  1. [13]
    In our view, the dispute between the parties, as framed by the Originating Application, involves conduct arising in respect of the provision of the original documents being the PID and the Residence Contract (‘the Initial Conduct’) and alleged conduct on the part of the Operator occurring after Mr Golding became a resident of the Village (‘the Subsequent Conduct’).
  2. [14]
    Having regard to the Originating Application, the alleged Initial Conduct, in broad terms, involved:
    1. (a)
      the provision of the PID which, to the knowledge of the Operator, contained misleading information:
      1. about the financial viability of the Village;[10]
      2. by failing to mention that the general services fees would need to be increased at a rate greater than CPI;[11]
    2. (b)
      the provision of the Residence Contract which, to the knowledge of the Operator, contained false information in that the general services fees would be increased with CPI (which term was to be applied strictly) without mentioning that such fees could or would be increased to rate greater than CPI.[12]
  3. [15]
    The alleged Subsequent Conduct, in broad terms, involved:
    1. (a)
      in 2017-2018, the Operator unlawfully using funds from the maintenance reserve fund to pay for general services;[13]
    2. (b)
      in 2018-2019, the Operator unlawfully increasing the general services fees by more than 3 times CPI.[14]
  4. [16]
    As we read Mr Golding’s material below and also the Reasons, both Mr Golding[15] and the Member proceeded on the basis that there was a relationship between the issues identified in paragraphs 14(a)(ii) and 15(b) above.

The issues identified by the Member

  1. [17]
    At Reasons [11], the Member identified seven relevant issues to be determined as follows (which we will refer to as the first to seventh issues as indicated below):
    1. (a)
      Was Mr Golding misled and deceived when entering into his residence contract by the PID because it failed to state general service charges would need to increase at a rate greater than CPI? (‘the first issue’).
    2. (b)
      Were the general services charges wrongly increased by increasing them by 3 times CPI in the financial year ending 30 June 2018? (‘the second issue’).
    3. (c)
      Was Mr Golding misled and deceived when entering into his residence contract about the financial viability of the Village because the scheme operator knowingly failed to disclose that the general services charges would need to be increased at a rate greater than CPI to ensure its budget was self-funding? (‘the third issue’).
    4. (d)
      Was Mr Golding misled and deceived when entering into his residence contract about the financial viability of the Village because the scheme operator knowingly failed to disclose that the general services charges were insufficient to cover the true cost of employing a professional village manager? (‘the fourth issue’).
    5. (e)
      In respect of ‘the financial year ending 30 June 2018’, was money from the maintenance reserve fund wrongly used to pay for general services? (‘the fifth issue’).
    6. (f)
      Was Mr Golding misled or deceived about the estimated increases of the monthly maintenance reserve fund stated in the quantity surveyor’s report attached to the PID provided to him in 2016 given the monthly maintenance reserve fund contributions for the financial year ending 30 June 2018 increased from $22 to $33? (‘the sixth issue’).
    7. (g)
      Was the increase in the maintenance reserve fund for the year ending 30 June 2018 invalid because there was no special resolution to pass the increase as required by s 106(2) of the RVA? (‘the seventh issue’).
  2. [18]
    We consider it convenient to address the matters raised in the Appeal Application by reference to the respective headings adopted by the Member in the Reasons.

Increasing the general service charges by more than CPI (the first and second issues)

  1. [19]
    The Member addressed the first and second issues together at Reasons [12]-[17].  The Member said the following at Reasons [14]-[17]:

[14] With retirement villages there may be need for increases greater than CPI for a number of reasons as time goes by. The Act recognises this by allowing increases above CPI in a number of situations. One is where there are increases in such things as rates, insurance premiums, wages and an increase in the maintenance reserve fund. The other is where an increase is agreed upon and approved by a majority of the residents by way of special resolution.

[15] There is no requirement that the residence contract or the PID set out a warning for residents that there are exceptions to the general requirement that increases of general services charges be limited to CPI. The exceptions are set out in the Act.

[16] The increase Mr Golding complains about is one of those exceptions to the requirement that general service charges not increase by greater than CPI. In the 2018 financial year the charge for the maintenance reserve fund was increased from $22 per month to $33. This was far greater than the increase under CPI. However it comes within one of the stated exceptions to the rule that the general services charges not be increased by more than CPI.

[17] The increase in 2018 was not invalid simply because it was greater than CPI.

(footnote omitted)

  1. [20]
    In our view, the Member’s rejection of Mr Golding’s case in relation to the first and second issues (as framed by the Member) involved, and Mr Golding’s challenge to those findings raises, at least in part, a question of mixed law and fact, namely:
    1. (a)
      whether the PID or Residence Contract contained information the Operator knew was false or misleading; and
    2. (b)
      whether the general services charges were wrongly increased (by 3 times CPI) in the financial year ending 30 June 2018.
  2. [21]
    For the reasons that follow, we are of the view that it is appropriate that Mr Golding be granted leave to appeal the Decision insofar as the first and second issues are concerned.  In particular, we consider that there is a reasonably arguable case of error in the Decision and there are questions of general importance upon which further argument, and a decision of the Appeal Tribunal, would be to the public advantage: namely, the issue concerning s 86 of the RVA; the issue of the intersection between the terms of a residence contract and ss 106 and 107 of the RVA; and the availability of relief under s 191 of the RVA.
  3. [22]
    We make the following observations in relation to Reasons [12]-[17].
  4. [23]
    First, it appears implicit in the Reasons that the Member has accepted that:
    1. (a)
      the provisions of ss 106 and 107 of the RVA permit a retirement village operator to include in the total of the general services charges the actual amounts for the particular components of such charges mentioned in subsections 107(a)-(d) even if they have increased by more than the relevant CPI percentage increase, regardless of the terms of the Residence Contract (or PID); that is, in the present case, those provisions effectively ‘override’ (to use Mr Golding’s reference) the express terms of the Residence Contract; and
    2. (b)
      such a conclusion determined the answer to both issues in favour of the Operator.
  5. [24]
    Second, although the Member framed the first issue in terms that necessarily raised the question of whether there was conduct of the Operator which was misleading or deceptive in the manner stated, the Member makes no express reference to s 86 of the RVA and does not expressly analyse the issue in terms of misleading conduct.  This can be contrasted with the reasons addressed under the following heading ‘Misleading or deceptive conduct’.  Under that heading, the Member refers to a number of instances of misleading and deceptive conduct including, in particular, those mentioned at Reasons [20] and [21] which are discrete matters from the first issue.  Even if it were assumed that the Member considered the operation of s 86 of the RVA in the context of the first issue, Mr Golding contends that the Member relied on the incorrect version of s 86.  In our view, if the first issue was not answered by the matters referred to in paragraph 23 above, the Member ought to have addressed whether (the correct version of) s 86 applied.  Given that s 86 of the RVA is also relevant to at least the third and fourth issues, it is convenient to consider this issue first.

Section 86 of the RVA

  1. [25]
    At [6] of the Reasons, the Member set out what he considered to be the relevant provisions of the RVA, including subsections (1) and (2) of s 86.  The extract cited by the Member reflected the form of the provision as effective from 1 February 2019.  The Operator contends that the Member correctly relied on that version of s 86 on the basis that it ‘was relevant at the time of assessing [Mr Golding’s] allegations and therefore [the Member] does not need to apply the legislation retrospectively’.[16]
  2. [26]
    Mr Golding submits that the relevant version of s 86 was the one that was current at the time of the Residence Contract.  The provision at that time provided, relevantly:
  1. (1)
    A scheme operator must not give the chief executive or a resident a document containing information the scheme operator knows is false or misleading. Maximum penalty—200 penalty units.

  1. [27]
    We accept Mr Golding’s submission.  The prohibition against knowingly giving false or misleading information necessarily fixes on the time at which the information was provided.  In our view, the operative time for application of s 86 was at the time of provision of the relevant document (in this case, in November 2016).  This involves no issue of ‘retrospectivity’ as the Operator contends.  In our view, the Member erred in law in failing to apply the version of s 86 as it applied at the date of the PID and Residence Contract.  The consequential question is whether the evidence justifies a different conclusion if the correct version of s 86 is applied.
  2. [28]
    We now turn to the impact of ss 106 and 107 of the RVA on Mr Golding’s case.

Sections 106 and 107 of the RVA

  1. [29]
    As at 16 November 2016, s 106 of the RVA provided, relevantly:
  1. (1)
    A scheme operator must not increase the total of general services charges for a retirement village for a financial year by more than the CPI percentage increase for the financial year.

 Maximum penalty—200 penalty units.

  1. (2)
    In this section—

 CPI means the all groups consumer price index for Brisbane published by the Australian statistician.

 CPI percentage increase, for a financial year, means the percentage increase between—

  1. (a)
    the CPI published for the quarter ending immediately before the start of the financial year; and
  1. (b)
    the CPI published for the quarter ending immediately before the end of the financial year.

total of general services charges, for a financial year, means the sum of all charges for general services for the financial year, other than the following charges—

  1. (a)
     a charge for a general service that has been increased by more than the CPI percentage increase for the financial year and that the retirement village residents, by special resolution at a residents meeting, have approved;
  1. (b)
     a charge for a general service that has been increased by more than the CPI percentage increase for the financial year and that is allowed under section 107.
  1. [30]
    As at 16 November 2016, s 107 of the RVA provided, relevantly:

A resident is not required to pay a charge for a general service under a residence contract to the extent that the charge is more than that payable under the contract and increased under section 106, unless the excess is attributable to an increase in—

  1. (a)
    rates, taxes or charges levied under an Act in relation to the retirement village land or its use; or
  1. (b)
    the salary or wages of a person engaged in the retirement village’s operation and payable under an award, certified agreement, enterprise flexibility agreement, industrial agreement, Queensland workplace agreement or other industrial agreement made, approved, certified, or continued in force under—
  1. (i)
    the Industrial Relations Act 1999; or
  1. (ii)
    a Commonwealth Act; or
  1. (c)
    insurance premiums, or insurance excesses paid, in relation to the retirement village or its use; or
  1. (d)
    maintenance reserve fund contributions.
  1. [31]
    By the date of the filing of the Originating Application, s 107(b) had been amended to read:
  1. (b)
    the salary or wages of a person engaged in the retirement village’s operation and payable under an award, certified agreement or other industrial instrument made, approved, certified, or continued in force under—
  1. (i)
    the Industrial Relations Act 2016; or
  1. (ii)
    a Commonwealth Act;

  1. [32]
    The operation of these provisions was considered by the Queensland Court of Appeal in Australian Retirement Homes Ltd v Ash,[17] where it was said:[18]

[27] There are several features of this legislation which, in my view, suggest with some force that in the composite term the expression “general services charges” is intended to have the meaning of amounts demanded by a scheme operator for the provision of general services. Firstly, there is the definition of the term “services charge” in the Dictionary Schedule. As noted, it means a charge payable by a resident for a general or personal service under a residence contract. This definition reflects the ordinary meaning to which I have referred. It precludes any meaning referable to expenditure incurred by the scheme operator. There is good reason to expect that the legislature intended that services charges to which the expression “general services charges” refers, be the same charges as are defined as such in the Schedule.

[28] Secondly, s 106(1) is concerned with a category of charges which lie within the power of the scheme operator to increase. Clearly, the amount that it demands be paid to it for the provision of a general service is within that category. On the other hand, the expenditure that the scheme operator incurs in order to acquire a general service is not. Whether there is an increase in expenditure to acquire a particular service depends more upon whether or not the supplier of the service demands an increased price for provision of it and whether there are competitor suppliers who might offer a comparable service at a lower price, matters which are clearly beyond the power of the scheme operator to control.

[29] Thirdly, s 107 speaks of a charge for a general service as a charge that a resident is required to pay under a residence contract. Significantly, it identifies such a charge as the type of charge that s 106(1) comprehends as liable to increase by the scheme operator. It is also significant that it describes the charges that may be increased under it beyond the s 106(1) cap as those for which an excess above the cap is attributable to an increase in an expenditure item listed in paras (a)–(d) thereof. In this way, the section makes a clear distinction between, on the one hand, the charge for a general service which is increased by the scheme operator, and on the other, an increase in expenditure that the scheme operator incurs to acquire the general service which results in an increase in the charge to the resident for the general service.

  1. [33]
    In our view, the starting point for a consideration of the first and second issues is the proper construction of clause 3 of the Residence Contract; in particular 3.1.3, which was relied upon by Mr Golding.  In our respectful view, Mr Golding’s case required a consideration of: first, whether the Residence Contract made provision for calculating increases in ‘general services fees’; secondly, if so, whether the Operator was entitled to increase such fees in a greater amount by operation of ss 106 and 107 of the RVA; and thirdly, if so, whether the information contained in the Residence Contract (or the PID) contained false or misleading information in that regard.  In relation to this third point, we are of the view that even if the RVA permitted the Operator to increase some or all of the general services fees over and above any contractually stipulated amount, it would not necessarily follow (as we apprehend the Member implicitly found) that the Residence Contract (or the PID) did not contain false or misleading information.

The proper construction of the Residence Contract and the PID

  1. [34]
    Mr Golding’s case below in this regard was that he construed clause 3.1.3 as referring to increases in ‘general services fees’[19] and that nowhere in the PID or the Residence Contract was there any statement that the increase in general services fees could or would be increased by any amount greater than the CPI increase provided for in clause 3.1.3 of the Residence Contract.[20]  The precise ambit of ‘general services fees’ is unclear but it appears to be based on the Operator’s description as contained in its tax invoices (see e.g. the tax invoice issued to Mr Golding in 2018 seeking payment of two separate fees; a ‘General Service Fee’ and a ‘Maintenance Reserve Fee’.[21]
  2. [35]
    We consider that the following parts of the PID and the Residence Contract are material to these issues.
  3. [36]
    First, clauses 1.2.20 and 1.2.21 of the PID distinguish between the obligations of a resident to pay a proportion of ‘service charges’ and an obligation to make contributions to, relevantly, the maintenance reserve fund.  There appears to be no definition of ‘service charges’ in the PID.  However, clause 1.2.20 provides that details of the services charges, including how ‘general services charges’ are calculated in relation to the Village’s total operating costs, are set out in Part 3 and Part 5, Chapter 2.  In our view, this is ambiguous.  Clause 1.2.20 could be construed as meaning that ‘general services charges’ are a component of ‘service charges’ or as meaning that those charges are one and the same.
  4. [37]
    Second, Part 1, Chapter 3 of the PID is headed ‘Residents’ Contributions Information’ and contains a subheading ‘General Services Charge’.  Clause 1.3.8 of the PID provides that a ‘general services charge, is payable for services supplied or made available to all residents’.  Clause 1.3.9 provides that ‘General services’ include management and administration, gardening and minor maintenance, shop or other facilities for supplying goods to residents, and recreation or entertainment facilities.  However, clause 3.17, which purports to be specific to Mr Golding’s accommodation unit, does not refer to ‘shop or other facilities for supplying goods to residents’ but does include a reference to a ‘24 hr Emergency call System’.  Clause 5.2.2 is in similar terms to clause 3.17.  Clause 5.2.2 appears under the heading ‘Residents’ Contributions Information’ in Part 5, Chapter 2.
  5. [38]
    Third, clause 3.19 of the PID provides that the ‘general services charge is calculated as a proportion of the total General Services Budget’ for the operating expenses of the retirement village scheme and is divided proportionally by the number of single (57) and double (19) units.  A copy of the General Services budget is annexed as ‘Attachment 2’.  Clause 5.2.4 provides: ‘The current general services charge by accommodation type is: see Attachment 2’.  Attachment 2 comprises a number of documents purporting to be ‘Audited financial statements and the 2015-2016 Budget’.  On the document provided to the Tribunal, we cannot identify a separate ‘Budget’ in addition to the Financial Statements.  We note that in the ‘Introduction’ to the PID, at page 5 of that document, reference is made to the PID being accompanied by various documents including ‘a copy of the audited financial statement for the retirement village for the previous financial year (if applicable) or a copy of the budget for the current year of operation (Attachment 2)’ (underlining added).  With respect to the Attachment 2 Financial Statements, the Income Statement for the year ended 30 June 2016 includes a reference to ‘Village General Services Account Transfer’.  However, on our reading of those documents, we cannot identify a specific reference to the (then) current ‘general services charge’ by ‘accommodation type’ as identified in clause 5.2.2.
  6. [39]
    Fourth, clause 3 of the Residence Contract, a draft of which appears as Attachment 1 to the PID, is headed ‘Obligations of the Owner’ and provides:

3.1.1 Payment of Services fees and Maintenance Reserve Fund Contributions

When requested in writing by Lusping, the Owner will pay Lusping at its offices at The Retirement Village or at another place as directed in writing:-

  1. (i)
    the adjustment concerning general services supplied or made available to all residents of The Retirement Village which includes service fees and operating expenses in favour of Lusping from the previous accounting period;
  2. (ii)
    rates, taxes, charges and assessments for gas, electricity, telephone, excess water and other utilities concerning the Owner’s accommodation unit;
  3. (iii)
    any money payable to the Body Corporate under the Body Corporate Act or Body Corporate Regulation Module;
  4. (iv)
    maintenance reserve fund contributions payable monthly bi-monthly or quarterly as determined by Lusping from time to time.

3.1.2 Lusping may vary the Maintenance Reserve Fund Contribution in accordance with the provisions of the Retirement Villages Act 1999.

3.1.3 The service fee shall be increased as of the first day of each quarter throughout each year in accordance with the following formula:-

SFB = $(C2 x SFA)

C1

Where SFB is the Service fee to be determine.

Where SFA is the Service fee payable during the immediately preceding quarter.

Where C2 is the Consumer Price Index (All Groups) for the City of Brisbane last published prior to the date on which the determination is to be made.

Where C1 is the Consumer Price Index (All Groups) for the City of Brisbane last published prior to the commencement of the immediately preceding quarter.

PROVIDED that the service fee is never reduced.

  1. [40]
    On our reading of those provisions (our following references are to clauses in the Residence Contract unless otherwise stated):
    1. (a)
      on its face, clause 3 does not reflect the operation of ss 106 and 107 of the RVA (as explained in Ash);
    2. (b)
      clause 3.1.1 is headed ‘Payment of Services fees and Maintenance Reserve Fund Contributions’ and appears to contemplate two categories of payments;
    3. (c)
      consistently with this, clause 3.1.4 provides for the payment of interest on any unpaid ‘service fees’ and unpaid ‘maintenance reserve fund contributions’ (or any part thereof);
    4. (d)
      however, clause 3.1.1 provides for four categories of payments in subclauses (i) to (iv).  In our view, subclause 3.1.1(i) is unclear.  It refers to the ‘adjustment’ concerning ‘general services’ (supplied or made to all residents of the Village) which includes ‘service fees’ and ‘operating expenses’.  There is no definition of any of those terms or phrases (or ‘service fees’) and we consider that the Residence Contract does not make clear what adjustment is being referred to or the distinction, if any, between ‘service fees’ and ‘operating expenses’.  In our view, subclause (ii) does not reflect s 107(a) of the RVA which refers to rates, taxes or charges levied under an Act in relation to the retirement village land or its use.  Subclause (ii) refers to rates, taxes et cetera in relation to various utilities concerning Mr Golding’s unit.  Subclause (iii) deals with any money payable to the Body Corporate, which phrase is not defined but appears to pick up Recitals I and J.  Subclause (iv) deals with maintenance reserve fund contributions;
    5. (e)
      clause 3.1.2 makes express reference to the Operator being permitted to ‘vary’ the ‘Maintenance Reserve Fund Contribution’ in accordance with the provisions of the RVA;
    6. (f)
      clause 3 makes no other reference to the RVA and, in particular, there is no reference (other than clause 3.1.3) to any ability on the part of the Operator to vary (or increase) contributions or charges other than contributions to the maintenance reserve fund;
    7. (g)
      clause 3.1.3 provides that the ‘service fee’ shall be increased in accordance with the formula set out therein which is referrable to the Consumer Price Index (All Groups) for the City of Brisbane (and that such fee shall never be reduced).
  2. [41]
    The initial question is how clause 3.1.3 should be construed.
  3. [42]
    In our view, there is no obvious meaning of the phrase ‘service fee’ to be discerned from clause 3 itself or the Residence Contract as a whole (or to be gleaned from the terms of the PID).  However, we consider that the Residence Contract distinguishes maintenance reserve fund contributions from other payment obligations.  This is sufficiently clear from subclause 3.1.1(iv) and clause 3.1.2 (and Recital G) (we note that in the PID, the ‘maintenance reserve fund contribution’ is stated to be part of the ‘general services charge’ (clause 3.22)).  As noted above, clause 3.1.2 expressly provides that maintenance reserve fund contributions may be varied in accordance with the RVA.
  4. [43]
    In our view, the next issue is whether the phrase ‘service fee’ (in clause 3.1.3) encompasses all amounts other than maintenance reserve fund contributions, or whether it also excludes the categories of payment referred to in subclauses 3.1.1(ii) and (iii).  The answer is not straight forward because there is, in our view, an inconsistency between the references to two categories of payment as evidenced by the heading to clause 3.1.1 and the content of clause 3.1.4, and the reference to the four categories of payment set out in clause 3.1.1.  On balance, we consider that the phrase ‘service fee’ encompasses all amounts other than the categories of payment referred to in subclauses 3.1.1(ii), (iii) and (iv).  We prefer this construction on the basis that, first, the phrase ‘service fees’ is contained in subclause (i) (but not subclauses 3.1.1(ii) and (iii)) and, second, subclauses 3.1.1(ii) and (iii) are concerned with separate amounts directly referable to Mr Golding’s ownership and occupation of his own unit, rather than amounts attributable to the operation of the Village as a whole.
  5. [44]
    In our view, on the proper construction of clause 3 of the Residence Contract:
    1. (a)
      clause 3.1.3 applies to the charges in subclause 3.1.1(i) but not the other charges referred to in clause 3.1.1;
    2. (b)
      clause 3.1.1(i) encompasses charges levied by the Operator for general services under the Residence Contract (including those contemplated by s 107(a) to (c) of the RVA) (‘the subclause 3.1.1(i) charges’) (but excludes maintenance reserve fund contributions);
    3. (c)
      clause 3.1.3 governs increases in the subclause 3.1.1(i) charges.  In this regard, we conclude that by stipulating the specific basis for increasing such charges (and by not providing for any additional increase in such charges), the Residence Contract, on its proper construction, limits any increase to such charges in the manner set out in clause 3.1.3.
  6. [45]
    The next issue is whether the operation of ss 106 and 107 of the RVA permitted the Operator to charge Mr Golding amounts for general services charges which exceeded the amount chargeable by the Operator calculated by limiting the increases to the subclause 3.1.1(i) charges and the additional maintenance reserve fund contributions otherwise chargeable in accordance with the RVA.  In other words, do ss 106 and 107 override the contractual provisions?

Interaction between the Residence Contract provisions and ss 106 and 107 of the RVA

  1. [46]
    In our view, although the language of those provisions is not wholly clear, we are of the view that the increases permitted by ss 106 and 107 are subject to, and do not override, any contractual provision which caps increases of the relevant charges in an amount less than that permitted by those provisions.
  2. [47]
    We consider this to be the proper interpretation of the RVA for the following reasons.
  3. [48]
    First, s 107 is framed in language that a resident is ‘not required to pay’ a charge for a general service to the extent that the charges are more than that payable under the contract and increased under s 106 ‘unless’ the excess is attributable to an increase in the items set out in that provision.  While one interpretation of this language it suggests that a scheme operator may charge more than the amount specified in the residence contract, we consider that the language also supports an interpretation that the provision provides a cap on the amount by which such charges may be increased but does not permit a scheme operator to charge an amount in excess of that specified under the residence contract.  Section 107 is not framed in language that a resident ‘is’ required to pay a charge increased in the manner provided ‘if’ the excess is attributable to an increase in the items set out in that provision.  We prefer the latter interpretation above which promotes the consumer protection and fair trading practices objects in s 3(1)(a) of the RVA and best achieves the purpose of the RVA.[22]  It is a straightforward matter for a scheme operator to put a prospective resident on express notice of potential increases of relevant charges under those provisions.
  4. [49]
    Second, s 71 of the RVA provides for enforcement of a residence contract against, relevantly, a scheme operator.  This provision does not limit the extent to which a provision in the contract may be enforced (for example, as in this case, a provision such as clause 3.1.3).  The operation of the provision would be diminished if an express term can be overridden by the operation of ss 106 and 107 of the RVA.
  5. [50]
    Third, s 103 of the RVA provides, relevantly, that an amount a resident of a retirement village may be charged for general services under a residence contract must be worked out in the way stated in the public information document and a scheme operator must not charge a resident of a retirement village for general services an amount more than the amount worked out under subsection (1).  In our view, ss 106 and 107 should be read subject to s 103 and we discern that the intent of the legislature is that ss 106 and 107 are not intended to have primacy over that provision or an express contractual provision enforceable under s 71.  In our view, although the matter is not clear, s 103 has no direct application to the present case because, at the date of the Residence Contract, s 103 was concerned with a public information document and, in the present case, while a draft of the Residence Contract ‘accompanied’ the PID, it does not appear to form part of the PID itself.[23]
  6. [51]
    In our view, the Operator was bound by the terms of clause 3.1.3 (as construed above), notwithstanding ss 106 and 107 of the RVA, and the Operator was contractually bound not to increase the subclause 3.1.1(i) charges payable by Mr Golding above the CPI increase stipulated by clause 3.1.3.

Relief

  1. [52]
    We consider that because the Operator was contractually bound not to increase the subclause 3.1.1(i) charges payable by Mr Golding above the CPI increase stipulated by clause 3.1.3, Mr Golding’s remedy in this regard is a contractual one (being a dispute about the about the parties’ rights and obligations under the Residence Contract) rather than under s 86 of the RVA.
  2. [53]
    Subsection 170(2) of the RVA provides that the Tribunal may set aside a residence contract.  If such an order is made, the Tribunal is empowered under subsection 193(2) to make such further orders it considers appropriate including an order that the scheme operator refund to the resident the ingoing contribution or another amount paid under the contract.  In our view, an order setting aside the Residence Contract would not be appropriate even if it be the case that the Operator has subsequently charged Mr Golding more than it was contractually entitled to charge him because such (subsequent) conduct does not affect the validity of the Residence Contract.
  3. [54]
    However, s 191 the RVA provides:
  1. (1)
    The tribunal may make the orders the tribunal considers to be just to resolve a retirement village issue.
  1. (2)
    For example, the tribunal may make any 1 or more of the following orders—
  1. (a)
    an order for a party to the issue to do, or not to do, anything (an enforcement order);
  1. (b)
    an order requiring a party to the issue to pay an amount (including an amount of compensation) to a specified person (a payment order);
  1. (c)
    an order that a party to the issue is not required to pay an amount to a specified person;
  1. (d)
    if the issue is a retirement village dispute—
  1. (i)
    an order setting aside the mediation agreement between the parties to the dispute; or
  1. (ii)
    an order giving effect to a settlement agreed on by the parties to the dispute.
  1. (3)
    An order may specify a time for compliance with it.
  1. (4)
    Without limiting subsection (1), this section applies if a person applies for a tribunal order under section 169, 170, 171 or 171A.
  1. [55]
    In light of our conclusion, the questions that arise are whether relief is available under s 191 and, if so, what relief ought be granted.  For example, is it appropriate to order that the Operator pay to Mr Golding any amount by which the total amount paid by him by way of general service fees between 16 November 2016 and, say, 19 November 2018 exceeds the amount that was payable by Mr Golding for general services fees calculated by applying the CPI increase set out in clause 3.1.3 of the Residence Contract to the subclauses 3.1.1.(i) charges and adding the amount of maintenance reserve fund contributions calculated in accordance with ss 106 and 107 of the RVA?  On our reading of the material, the particular amount of any compensation payable is not readily identifiable.
  2. [56]
    We consider it appropriate to make the following directions:
    1. (a)
      each of the parties must file in the Tribunal and serve on the other party within 28 days of delivery of these reasons:
      1. written submissions, no longer than 10 pages, addressing the following issues only:
  1. (A)
    whether the Appeal Tribunal has power to make orders under s 191 of the Retirement Villages Act 1999 (Qld) consequent upon the findings in the Reasons for Decision that, save for the categories of payment referred to in subclauses 3.1.1(ii), (iii) and (iv) of the Residence Contract, all amounts payable by the Applicant under clause 3.1.1 of the Residence Contract may not be increased above the CPI increase stipulated by clause 3.1.3 of the Residence Contract (‘the Findings’); and
  1. (B)
    what orders should be made, including the amount of compensation (if any) payable to the Applicant, consequent upon the Findings;
  1. (ii)
    any expert accounting evidence in relation to the question of the amount of compensation, if any, payable to the Applicant, or, alternatively, a detailed calculation (showing workings) of the amount of compensation the party submits is payable (if any) to the Applicant, consequent upon the Findings; and
  1. (b)
    each of the parties may file in the Tribunal and serve on the other party written submissions, no longer than 10 pages, responding to the other party’s submissions and the expert accounting evidence or detailed calculation, within 14 days of service of the other party’s submissions and material pursuant to the previous order.

The s 86 aspect

  1. [57]
    As is evident from item 2 of Part E, 2 of the Originating Application, Mr Golding’s case also raised the question of whether the Operator knowingly provided false information in the Residence Contract by providing that the general services fees would be increased with CPI and failing to mention that such fees ‘could or would’ be increased at a rate greater than CPI.  In this context we also note, amongst others, AB 108 (paragraph 2.1) and AB 112 (paragraph 4.8) of Mr Golding’s statement dated 11 December 2018 (‘the December 2018 statement’).
  2. [58]
    If, contrary to our primary conclusion, the Operator was entitled to increase the charges for general services in excess of that stipulated by clause 3.1.3, we consider that it would follow that the information contained in clause 3, and in particular clause 3.1.3, was false or misleading in that it would have impliedly (falsely) represented that the Operator was only entitled to increase the subclause 3.1.1(i) charges in the manner specified in clause 3.1.3 and not otherwise.  In our view, the provisions of the PID do not alter this conclusion.
  3. [59]
    In that event, further issues would arise for determination, which issues were not addressed in the Reasons because of the primary findings made by the Member as discussed  above.  Such issues are as follows.
  4. [60]
    First, whether the Operator knew that that the information in clause 3 was false or misleading.  Section 86 requires proof of actual knowledge.  That section is effectively concerned with discourag­ing and punishing fraudulent misstatements to residents or prospective residents; it prohibits a scheme operator disseminating information it knows to be false or misleading.[24]  Actual knowledge can be inferred.[25]  In our view, the standard of proof would be on the balance of probabilities in accordance with the Briginshaw standard (given the seriousness of the finding sought).[26]
  5. [61]
    Second, a further precondition to seeking relief under s 170 would be proof that Mr Golding had been materially prejudiced by the contravention.[27]
  6. [62]
    Third, a further issue would be whether the relief sought should be granted.  The Originating Application sought to have the Residence Contract set aside and any orders necessary to ‘cancel’ the mortgage and caveat associated with the Residence Contract.[28]  In the matter below, the Operator made written submissions as to why such relief should not be granted.[29]  The submissions primarily relied upon the (undisputed) fact that Mr Golding wishes to continue residing in his unit which, as noted above, he holds by way of freehold.  Mr Golding submitted that this was not an impediment to the relief sought if the proposals he suggested were adopted.[30]  We express no view on this issue save to note that the submissions raised by the Operator are relevant to the issue of relief given that Mr Golding was seeking to remain in his unit within the Village but not be bound by the Residence Contract.
  7. [63]
    In the absence of any findings in relation to the above matters by the Member, it had been relevant to allow the appeal on this alternative ground, we consider that the appropriate order would have been to return the matter to the Tribunal for reconsideration under s 147(3)(c) of the QCAT Act (as inserted in s 147 as an amendment effective from 1 September 2019).  If such findings had been made, it would have been appropriate to proceed by way of rehearing.

Misleading or deceptive conduct (the third and fourth issues)

  1. [64]
    These issues are addressed in the Reasons at [19]-[45].
  2. [65]
    We have addressed above the Member’s error in applying the wrong version of s 86.
  3. [66]
    The questions that arise are: first, whether the application of the correct version of s 86 dictates a different result have regard to the findings made by the Member; and second, whether the decision should otherwise be set aside for the reasons raised by Mr Golding.
  4. [67]
    The first issue is whether the Operator knowingly provided misleading information, in the PID, ‘about the financial viability of the village’.  In our view, this is expressed in the Originating Application with a degree of generality.  Further details are provided in the December 2018 statement.  For example, paragraphs 3.1 and 3.2 provide:

3.1 In the PID for Unit 10, provided to me on 22 November 2016, the scheme operators knowingly provided misleading information about the financial viability of the village. In the signed Statement by Management for the year ended 30 June 2016, provided with Attachment 2 to the PID, is the following misleading declaration:

In the opinion of management the financial report:

 1 Presents a true and fair view of the financial position of Laurel Springs Retirement Village as at 30 June 2016 and its performance for the year 1 July 2015 to 30 June 2016.

 2 At the date of this statement, there are reasonable grounds to believe that Laurel Springs Retirement Village will be able to pay its debts as and when they fall due.

 

3.2 Nowhere in the PID is there any information that the general services fees were insufficient to cover the true cost of employing a professional village manager, or that the scheme operator would need to top up the budget in order to meet their commitments, and that there would therefore need to be an increase in these fees above the CPI increase allowed for in the Residence Contract and Service Agreement and in the Retirement Villages Act 1999.

  1. [68]
    As we understand Mr Golding’s material, the specific ‘information’ that was alleged to be misleading was the declaration identified in paragraph 3.1 set out in paragraph 67 above (‘the declaration’) with the accompanying financial statements.  The particular issues that the Member identified are set out in the Reasons [20] and [21].  Although the Member did not address the correct version of s 86, the Member did focus on whether the Operator had the requisite knowledge as at the date of the PID and Residence Contract.[31]
  2. [69]
    On its face, the declaration is an expression of opinion by management of the Operator that, first, the financial report (financial statements) presented a true and fair view of the financial position of the Village as at 30 June 2016 and its performance for the financial year ended 30 June 2016 and, secondly, that at the date of the statement there were reasonable grounds to believe that the Village would be able to pay its debts as and when they fell due.
  3. [70]
    In the context of s 52 of the Trade Practices Act 1974 (Cth), the Full Federal Court set out the following principles concerning an opinion or other statement which involves the state of mind of the maker:[32]
  1. (1)
    a statement which involves the state of mind of the maker ordinarily conveys the meaning (expressly or impliedly) that the maker of the statement had a particular state of mind when the statement was made and, commonly, that there was a basis for that state of mind;
  2. (2)
    a statement of opinion will not be misleading or deceptive or likely to mislead or deceive merely because it turns out to be incorrect, misinforms or is likely to do so; an incorrect opinion does not of itself establish that the opinion was not held by the person who expressed it or that it lacked any or any adequate foundation; an expression of an opinion which is identifiable as an expression of opinion conveys no more than that the opinion is held and perhaps that there is a basis for the opinion. If that is so, an expression of opinion however erroneous misrepresents nothing;
  3. (3)
    however, an opinion may convey that there is a basis for it, that it is honestly held and when it is expressed as the opinion of an expert, that it is honestly held upon rational grounds involving an application of the relevant expertise. If the evidence shows that the opinion was not held or that it lacked any or any adequate foundation, particularly if the opinion was expressed as an expert, a statement of opinion may contravene s 52 of the TPA.
  1. [71]
    When regard is had to the specific matters in relation to which the ‘opinion’ was expressed, we find that Mr Golding failed to demonstrate that such opinion was not honestly held by the governing minds of the Operator (as at 16 November 2016 or, if it were relevant, 22 November 2016 being the date of the Residence Contract) or that there was no basis for the expression of that opinion.
  2. [72]
    In relation to the contentions identified in paragraph 3.2 set out in paragraph 67 above, Mr Golding contended that nowhere in the PID was there any information that the general services fees were insufficient to cover the ‘true cost’ of employing a professional village manager, or that the scheme operator would need to top up the budget in order to meet their commitments (or that the fees would need to increase for the Village to be ‘self-funding’).  As we apprehend Mr Golding’s case below, he, in effect, contended that there was a failure on the part of the Operator to disclose the matters complained of, that such matters should have been disclosed in the PID, with the consequence that the PID was misleading in the absence of such disclosure.  As noted above, s 86 required proof that the PID or Residence Contract contained information which was false or misleading to the knowledge of the Operator.
  3. [73]
    In this context, it is convenient to address the particular issues that Mr Golding contends the Member erred in failing to consider.[33]
  4. [74]
    First, Mr Golding contends that it was not credible for the ‘scheme operators’ to claim that they were unaware that the Village was not ‘financially viable’.  There is an element of vagueness about the phrase ‘not financially viable’.  Further, as noted above, the declaration, in part, concerned the ability of the Village to pay its debts as and when they fell due.  Mr Golding did not demonstrate that this was untrue.  In our view, if the Village was able to pay its debts as and when they fell due, it would follow that it was financially viable.  In our view, to the extent that the Operator then contributed to the payment of general service charges (fees), it does not follow that the Village was not financially viable, at least absent evidence that the Operator then had no intention or financial ability to make financial contributions to make up any existing shortfall at that time.
  5. [75]
    Second, Mr Golding contends that it was not credible to claim that they were unaware that Ms Henkelman intended to resign as Village manager when her 6-year term expired in 2017.  There appears to be no dispute that the amount of wages paid to Ms Henkelman were accurately reflected in the financial statements.  The Member accepted that the Operator was unaware, as at 16 November 2016, that Ms Henkelman would be resigning as manager in 2018,[34] and we find that this factual finding was open to the Member having regard to the evidence set out at Reasons [29].  Mr Golding’s submissions[35] do not justify overturning the factual finding made by the Member based on evidence contained in Ms Henkelman’s Statutory Declaration. On the basis of the Member’s factual finding, there was no basis for finding that the information in the PID was misleading in that respect, much less that the Operator knew the information was misleading as at 16 November 2016.  We also note, for completeness, that Ms Henkelman did not, in fact, resign in 2017.
  6. [76]
    Third, Mr Golding contends that it was not credible to claim that the scheme operators were unaware of the consequences to the Village budget if Ms Henkelman resigned as manager.  Even if it were assumed that the Operator believed that it would cost more to engage a replacement manager in the future, we consider that this does not assist Mr Golding’s case.  In our view, it would not establish that the information contained in the PID, in particular the financial statements, contained information that was false or misleading. Further, it would raise the question as to what information should have been provided by the Operator.  In our view, at the relevant time it would have been speculation on the part of the Operator as to when Ms Henkelman would ultimately resign and what amount would be necessary to pay a replacement manager (and, in particular, whether that amount would exceed the then current amount of wages increased by the amount of the CPI increase provided by the Residence Contract at that future time).  We note that this would also have required speculation as to future CPI increases.  These observations also apply to the fourth point made by Mr Golding that it was not credible to claim that the scheme operators did not know that the going rate for a professional village manager was significantly more than the amount paid to Ms Henkelman.  There is no basis to interfere with the findings made by the Member.
  7. [77]
    Finally, Mr Golding contends that it was not credible to claim that the scheme operators were unaware that it was necessary or desirable for the general services budget to be ‘self-funding’. In our view, the declaration and the financial statements did no more than they purported to do on their face, namely set out the existing financial position of the Village at the relevant time (expressed as an opinion in the case of the declaration).   Mr Golding’s argument is met by the factual findings at Reasons [44] and we finding no basis for interfering with that finding.  As the Appeal Tribunal has previously said, a Tribunal is not a Court and its reasons are not to be scrutinised ‘with an eye keenly attuned to error’; it is ‘not necessary for the Tribunal to refer to every piece of evidence and every contention made by an applicant in its written reasons’.[36]  We further observe that even if it had been established that the operator then had a view that it was ‘necessary or desirable’ for the general services budget to be ‘self-funding’, it would not follow that Golding had established a contravention of s 86 as it then stood.
  8. [78]
    In our view, there is no reasonable prospect that Mr Golding would obtain substantive relief, regardless of the application of the wrong version of s 86.  The other grounds of the Application in respect of the third and fourth issues have not been made out.
  9. [79]
    Even if we had been satisfied that the Member erred in failing to find that the Operator had contravened the relevant version of s 86 of the RVA in relation to the financial viability of the Village, it would still have been necessary for Mr Golding to establish the suffering of material prejudice and an entitlement to the grant of relief as discussed in paragraphs 61 and 62 above.  If such a contravention had been established, we consider that appropriate course would have been for the matter to be returned to the Tribunal for reconsideration in relation to those issues.

Maintenance reserve fund (the fifth issue)

  1. [80]
    This issue is addressed at Reasons [46]-[56].
  2. [81]
    Mr Golding’s first contention in relation to these findings is that, at Reasons [46], the Member ‘misrepresented’ Mr Golding’s submissions.[37]  At that paragraph, the Member stated that Mr Golding complained that in 2017-2018 money from the maintenance reserve fund was wrongly used to pay for general services.  Mr Golding contends that his case was that the increase in the maintenance reserve fund contributions for that period was a ‘de-facto’ increase in the general services charges and, therefore, contravened clause 3.1.3 of the Residence Contract.
  3. [82]
    In our view, the Member’s statement is consistent with the Originating Application.  First, Part D, section 3 stated that Mr Golding was alleging a contravention or failure to comply with a section of the RVA and the third line item listed, separately, ‘s 97 and s 100 - Maintenance reserve fund’.  Secondly, at Part E, section 2, the third item expressly stated ‘In 2017- 2018, funds from the MRF were unlawfully used to pay for general services’.  The Member’s framing of the complaint in Reasons [46] was plainly supported by the terms the Originating Application.
  4. [83]
    Insofar as Mr Golding refers to section 5 of the December 2018 statement,[38] we consider the submissions contained in section 5 are broadly consistent with the sections of the Originating Application set out above.[39]  We consider Mr Golding has not demonstrated any arguable error in the manner in which the Member dealt with Mr Golding’s case in this regard.  Further, as we apprehend his case, no separate relief was claimed in relation to the above matters.  In that event, and in light of the factual findings made by the Member, his conclusion, at Reasons [56], that ‘there is no matter here to be remedied’ is, in our view, unassailable.
  5. [84]
    We note that Mr Golding did refer to ‘de-facto’ increases in the general services fees.[40]  However, as noted above, we consider that such submissions were consistent with the ground of complaint as framed by the Member.  Further, the other basis upon which it could be contended that Mr Golding sought to make the so-called de-facto increases as otherwise relevant to his case concern paragraph 5.17,[41] where it appears (although it is not clear to us), that such matters supported the contention that the Operator knowingly provided false information in the Residence Contract.  Even if the underlying factual contention were accepted, we are of the view that the matters complained of in section 5 (which occurred subsequent to the Residence Contract) would not establish the alleged false or misleading conduct alleged in the Originating Application at the time of entering into the Residence Contract, much less that the Operator knew that such conduct was false or misleading at that time.
  6. [85]
    In our view, there was no error of law, nor any error of mixed fact and law that would warrant the grant of leave to appeal, arising from that part of the Reasons.

PID quantity surveyor’s report (the sixth issue)

  1. [86]
    This issue is addressed at Reasons [57]-[64].
  2. [87]
    Mr Golding’s primary complaints in relation to these findings by the Member assert that the Member misrepresented aspects of Mr Golding’s submissions and also ‘misinterpreted the evidence or made a wrong finding of fact’.[42]
  3. [88]
    The starting point is Reasons [57] where the Member said:

Mr Golding adds a further complaint in the body of his statement of evidence filed 12 December 2018 which is not mentioned in his initial application. It is a complaint that an increase in the monthly maintenance reserve fund contributions in the financial year ending 30 June 2018 from $22 to $33 per month is not consistent with the amount that the scheme operators could reasonably levy based on the quantity surveyor’s report he received as an attachment to the PID provided to him in 2016.

  1. [89]
    The Member did not cite the part of Mr Golding’s material where that contention was said to be made but the content appears to be consistent with the submission set out at paragraph 5.11 of the December 2018 statement.[43]  This submission is also relevant to the Member’s statement at Reasons [59] and his conclusion at Reasons [61].
  2. [90]
    We accept that Mr Golding raised the reference to the quantity surveyor’s report in relation to the de-facto increase in general services charges.  However, in our view, the Member’s factual findings at Reasons [58] and [62] remain relevant to the issue raised by Mr Golding.  Mr Golding contends that it ‘would not be credible’ to claim that the 50% increase in maintenance reserve fund contributions is genuinely coincidental to the declared shortfall in funds for general services in the absence of any shortfall in maintenance reserve funds, as announced at the 2017 AGM.[44]  On the material before the Member, we can see no basis that would justify the grant of leave to challenge factual findings made by the Member and we would refuse leave to appeal on the ground raised in relation to this issue.
  3. [91]
    A further matter that arises in respect of the sixth issue is the challenge to Reasons [63].  This is dealt with below under the heading ‘Forgery’.

Forgery

  1. [92]
    This issue is addressed at Reasons [65]-[71].
  2. [93]
    The Member said at Reasons [63]:

In Mr Golding’s submission filed 15 April 2019 entitled ‘In Reply to Second Submission by Respondent 12 April 2018’ he makes the claim that the quantity surveyors report of April 2017 is a forgery. He has no basis to make that allegation. He makes a further rather outrageous allegation in the alternative that if it is not a forgery then there has been collusion between the scheme operators and the quantity surveyors. I reject that accusation. It is simply conjecture without an evidential base.

  1. [94]
    In his Appeal Submission, Mr Golding states:[45]

I did not say that the quantity surveyors report of April 2017 is a forgery. I said that I have reasonable grounds to believe that the document is either a forgery or that there has been collusion in its preparation.

I did provide evidence to support my suspicions. Refer to my reply to Material to be relied on by Respondent – 7 in my submission of 12 April 2019.

Furthermore, I had reasonable grounds to suspect forgery of the 2017 QS report because the copy of the Financial Statements and Auditors Report, as provided to me by the scheme operators in October 2018, was certainly a forgery. I have proven this beyond reasonable doubt in my submission of 19 August 2019, refer to [66] below.

  1. [95]
    The Member said at Reasons [65]:

Mr Golding makes another claim about forgery which perhaps should be addressed, though its relevance is not explained. In his submission filed 15 April 2019 entitled ‘In Reply to Second Submission by Respondent 12 April 2018’ he makes a claim that the document entitled Financial Statements and Auditors Report for the year ended 30 June 2018 supplied to him and other residents by the scheme operators was not an authentic copy of the report.

  1. [96]
    In the Appeal Submission, Mr Golding contends that he did explain the relevance of the forgery.[46]
  2. [97]
    In our view, the allegations of forgery are interconnected.
  3. [98]
    Mr Golding’s contentions also relate, in part, to his further contention that the Member denied him natural justice and that there is a reasonable apprehension of bias to be concluded from the Member’s Reasons.[47]
  4. [99]
    We begin with Mr Golding’s submission (being an alternative submission) in relation to the ‘collusion’.  The Member described this submission as ‘rather outrageous’.  In our view, the allegation of ‘collusion’ necessarily involved the active participation of the quantity surveyors.  The quantity surveyors carried on the profession of quantity surveying, and were external third parties to these transactions.  On any view, the assertion of collusion was a serious allegation to make.  The Member found that there was no evidential basis for that allegation and we consider that this conclusion was justified.  In these circumstances, we see no basis for a conclusion that describing the allegation as ‘rather outrageous’ demonstrates that the test for reasonable apprehension of bias was satisfied.[48]  We note that the Member’s criticisms of submissions made were not one way.  A submission made on behalf of the Operator was described as a ‘strange’ submission.[49]
  5. [100]
    As we understand Mr Golding’s submissions, the allegation concerning the forgery of the quantity surveyors’ report of April 2017 is linked to the alleged forgery of the overall documents comprising the Financial Statements and Auditors Report for the year ended 30 June 2018.[50]  We consider that a critical finding by the Member was that the contents of the documents, regardless of signature, were apparently identical in substance.[51]  As we read Mr Golding’s material, that factual finding has not been challenged and, in any event, we have sighted no material that would cast doubt on the correctness of that finding.  In the face of that finding, we can see no relevance of the alleged forgery to the matters raised by the Originating Application even if that ‘forgery’ had been established.  While that matter, if established, would have provided a basis for criticising the conduct of the Operator (as appears to have been alleged in AB 159-160), we consider it to be a collateral issue and not one that, if proved, is material to establishing a right to the claimed relief.  We also note that the Member found, at Reasons [70], that he failed to see how the matter constituted a retirement village dispute for the purposes of the RVA.  As we read Mr Golding’s material, while he challenges the first sentence of Reasons [70], the Appeal Application does not contest the Member’s finding in relation to the absence of a retirement village dispute in relation to this issue.
  6. [101]
    For the above reasons, we reject the contention that there was a denial of procedural fairness to Mr Golding or that it can be concluded that there is a reasonable apprehension of bias on the part of the Member.
  7. [102]
    We find that Mr Golding has not established a relevant error of law nor any question of fact or a question of mixed fact and law which would justify the grant of leave.

No special resolution (the seventh issue)

  1. [103]
    This issue is addressed at Reasons [72]-[76].
  2. [104]
    Mr Golding contends that the Member ‘misrepresented’ his submissions as reflected in Reasons [11(g)] and [72].[52]
  3. [105]
    We accept that Mr Golding did not put his case as reflected in those paragraphs of the Reasons and that his submissions in relation to the absence of a special resolution were directed at any increase in the general services charges (as distinct from the maintenance reserve fund) over and above a CPI increase.[53]  We find that the Member erred in law in stating otherwise.
  4. [106]
    However, for the following reasons, we further find that this error was not material to the Member’s ultimate decision.
  5. [107]
    At Reasons [73] the Member stated:

The scheme operators respond that the Village residents were given 21 days’ notice prior to the holding of the 2018 AGM of the proposed increase in Village fees above CPI. They say, however, they are unable to provide any further material ‘at this stage’ as to whether the vote was passed by the residents to increase the fees above CPI by way of special resolution. That is a strange submission to make to the tribunal at the time of determination of the retirement village dispute. I take it to mean the scheme operators have no evidence that the increase was notified to residents as a special resolution to be voted upon at the AGM, which special resolutions must be.

  1. [108]
    The Member expressly found that there was no evidence to support the passing of a special resolution and, in our view, this finding applies to any increase in the proposed fees above CPI, whether they be in relation to the maintenance reserve fund or the general services fees.  Such a finding supports the submission made by Mr Golding as to the absence of a special resolution and is a finding consistent with Mr Golding’s case below that there was no special resolution that could justify any increase in general services fees over and above CPI.  The Member did not find that the increase in any of the fees or charges was justified by a special resolution.  The Member did not otherwise find that there was a special resolution which supported an increase in general services charges over and above CPI.  In light of the above matters, we find that the error correctly identified by Mr Golding in respect of this issue does not justify setting aside the Decision.

Orders

  1. [109]
    In light of the above reasons, we make the following orders:
  1. Leave to appeal is granted.
  2. Each of the parties must file with the Tribunal and serve on the other party within 28 days of delivery of these reasons:
    1. (a)
      written submissions, no longer than 10 pages, addressing the following issues only:
      1. whether the Appeal Tribunal has power to make orders under s 191 of the Retirement Villages Act 1999 (Qld) consequent upon the findings in the Reasons for Decision that, save for the categories of payment referred to in subclauses 3.1.1(ii), (iii) and (iv) of the Residence Contract, all amounts payable by the Applicant under clause 3.1.1 of the Residence Contract may not be increased above the CPI increase stipulated by clause 3.1.3 of the Residence Contract (‘the Findings’); and
  1. (ii)
    what orders should be made, including the amount of compensation (if any) payable to the Applicant, consequent upon the Findings; and
  1. (b)
    any expert accounting evidence in relation to the question of the amount of compensation, if any, payable to the Applicant, or, alternatively, a detailed calculation (showing workings) of the amount of compensation the party submits is payable (if any) to the Applicant, consequent upon the Findings.
  1. Each of the parties may file in Tribunal and serve on the other party written submissions, no longer than 10 pages, responding to the other party’s submissions and the expert accounting evidence or detailed calculation, within 14 days of service of the other party’s submissions and material pursuant to Order 2.
  2. The costs of the Application are reserved until final orders are made on the appeal.

Footnotes

[1] Golding v Lusping Pty Ltd [2019] QCAT 352.

[2]Appeal Book filed by the applicant on 20 January 2020, 211 (‘AB’).

[3]Ibid.

[4]Filed on 10 December 2019.

[5] Mr Golding now submits that there was also a reasonable apprehension of bias on the part of the Member.

[6]The Sands Gold Coast Pty Ltd v The Body Corporate for the Sands [2018] QCATA 160 at [26]; s 142 of the QCAT Act.

[7]Seymour v Racing Queensland Ltd [2013] QCATA 179 at [18]; Alafaci v Queensland Building and Construction Commission [2015] QCATA 23 at [21].

[8]Pickering v McArthur [2005] QCA 294 at [3].

[9] Commissioner State Revenue v Harrison [2019] QCA 50 at [66]; Paradise Produce NT Pty Ltd v Arnolds Fibreglass Repairs Pty Ltd [2010] QCATA 32 at [11].

[10] Originating Application, part E, paragraph 2, items 1 and 6.

[11] Ibid, part E, [2], item 1.

[12] Ibid, part E, [2], item 2.

[13] Ibid, part E, [2], item 3.

[14] Ibid, part E, [2], items 4 and 5.

[15] See e.g. AB 144, [23(1)].

[16] The Operator’s Appeal Submission filed on 28 February 2020, [10b].

[17][2013] QCA 355 (‘Ash’).

[18]Ibid at [27]-[29] per Gotterson JA, with whom Morrison JA and North J agreed.

[19]  AB [2.7] and [2.11].

[20]  Ibid 93, [2.7] and [2.11]; Ibid 111-12, [4.1]-[4.8].

[21]  Ibid 116.

[22]  See s 14A of the Acts Interpretation Act 1954 (Qld).

[23]  In our view, s 37 of the RVA, as it stood as at the date of the Residence Contract, does not affect this conclusion.  While a public information document was taken to form part of a residence contract (s 37(1)) it does not follow that, by virtue of that provision, the draft Residence Contract formed part of the PID; that is, the PID was a separate document for the purposes of s 103.

[24] Chancellor Park Retirement Village Pty Ltd v Retirement Villages Tribunal & Ors [2004] 1 Qd R 346 at [35] per Chesterman J (as he then was).

[25]  In an appropriate case, actual knowledge may be inferred as a matter of fact: e.g. Marcolongo v Chen (2011) 242 CLR 546 at [26].

[26] Briginshaw v Briginshaw (1938) 601 CLR 336 (‘Briginshaw’).

[27]  Section 170(1)(b) of the RVA.  As to the requirement of material prejudice: see Chancellor Park at [65]-[66]; see also Mirvac Queensland Pty Ltd v Wilson [2010] QCA 322 at [54], [58]-[59].

[28]  Mr Golding seeks further relief in the Appeal Application, including the repayment of all monthly service fees and maintenance reserve fund contributions.

[29]  AB at 303-5, [51]-[35] and 306, [38]; see also AB 290-1, [35]-[58].

[30]  See, e.g., Ibid 155-6, [54]-[58], also at 194, [2.4.1].

[31]  See Reasons [33] and [42]-[44].

[32]  Australian Competition & Consumer Commission v Dateline Imports Pty Ltd [2015] FCAFC 114 at [179] and the cases cited therein.

[33]See Mr Golding’s submissions dated 20 January 2020, [1.2.1] (‘Further Appeal Submissions’).

[34]  See Reasons at [33] and [42]-[44].

[35]  At AB 165, point 2.

[36]McConnel v Queensland Police Service (Weapons Licensing Branch) [2019] QCATA 156 at [25], citing Applicant WAEE v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 236 FCR 593, [46].

[37]  Appeal Submissions in AB at 29, [4.3.3].

[38]  AB 118-23.

[39]  We refer, in particular, to paragraphs [5.2] and [5.3] at AB 118.

[40]  See e.g. [5.1] at AB 118 and [5.16] at AB 123.

[41]  In AB at 123.

[42]  Appeal Submissions in AB at 29, [4.3.4].

[43]  AB 121-2, see also 123, [5.15].

[44]  Appeal Submissions in AB 32; see also Mr Golding’s submissions below at, in particular, AB 123.

[45]  At AB 60.

[46]  See Ibid 61.

[47]  Further Appeal Submission at [4.1] and [4.2].

[48]  See, e.g., Oakey Coal Action Alliance Inc v New Acland Coal Pty Ltd & Ors [2019] QCA 184 at [20] and the cases cited therein.

[49]  Reasons at [73].

[50]  See the third paragraph in the response to Reasons [63] at AB 60.

[51]  Reasons at [67].

[52]  Appeal Submissions, 19 and 36.

[53]  AB 114, [4.13]

Close

Editorial Notes

  • Published Case Name:

    Golding v Lusping Pty Ltd

  • Shortened Case Name:

    Golding v Lusping Pty Ltd

  • MNC:

    [2020] QCATA 134

  • Court:

    QCATA

  • Judge(s):

    Senior Member Howard, Member Lumb

  • Date:

    10 Sep 2020

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Alafaci v Queensland Building and Construction Commission [2015] QCATA 23
2 citations
Applicant WAEE v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 236 FCR 593
2 citations
Australian Competition & Consumer Commission v Dateline Imports Pty Ltd [2015] FCAFC 114
2 citations
Australian Retirement Homes Ltd v Ash [2013] QCA 355
3 citations
Briginshaw v Briginshaw (1938) 601 CLR 336
2 citations
Chancellor Park Retirement Village Pty Ltd v Retirement Villages Tribunal[2004] 1 Qd R 346; [2003] QSC 276
3 citations
Commissioner of State Revenue v Harrison [2019] QCA 50
2 citations
Golding v Lusping Pty Ltd [2019] QCAT 352
2 citations
Marcolongo v Chen (2011) 242 CLR 546
2 citations
McConnel v Queensland Police Service (Weapons Licensing Branch) [2019] QCATA 156
2 citations
Mirvac Queensland Pty Ltd v Wilson [2010] QCA 322
2 citations
Oakey Coal Action Alliance Inc v New Acland Coal Pty Ltd(2019) 2 QR 271; [2019] QCA 184
2 citations
Paradise Produce NT Pty Ltd v Arnolds Fibreglass Repairs Pty Ltd [2010] QCATA 32
2 citations
Pickering v McArthur [2005] QCA 294
2 citations
Seymour v Racing Queensland Ltd [2013] QCATA 179
2 citations
The Sands Gold Coast Pty Ltd v The Body Corporate for the Sands [2018] QCATA 160
2 citations

Cases Citing

Case NameFull CitationFrequency
Golding v Lusping Pty Ltd No 3 [2021] QCATA 41 citation
1

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