Consumer Legislation Amendment Bill 2020
It is very pleasing to speak in support of such important legislation as is currently before the Assembly. The Bill contains far-ranging provisions designed to both ensure equity and to right system inadequacy for some of Victoria’s most disadvantaged citizens.
In ensuring that social and affordable housing continues to be available to as many of those eligible to benefit from it as possible and to regulate the proper allocation of such vital housing stock is fundamental to the values of the Andrews government.
Victoria under past Labor governments has a proud history of the provision of public housing. Vitally, our attitudes to social and affordable housing, to its provision for the most vulnerable in our midst has meant reform and innovation, eliminating old ways of thinking – which, in earlier days, had stereotyped the tenants and led to anomalies and inadequacies now sought to be remedied in the Bill before us.
An examination of the provisions of the Consumer Legislation Amendment Bill 2020, which seeks to amend the Residential Tenancies Amendment Act 2018 and the Retirement Villages Act 1986, reflects the wide-ranging scope of these reforms. Members may recall that on a previous occasion I noted that my wife and I have lived for some years in what many would identify as a retirement village. So, while there may be some subjectivity in the remarks to follow, one notes too, that many in the Chamber may be likely to follow a similar path in times to come!
It follows that I turn today to focus today upon the amendments proposed for the Retirement Villages Act 1986 (RV Act). Many will be aware of widespread community concerns as to ‘in-going’ contributions, as variously titled, paid by those seeking admission to one of Victoria’s many retirement villages. Whatever other criticisms may be made in regard to these in-going payments, very serious difficulties have arisen for former residents of those retirement villages which, regrettably, have ceased to operate through insolvency, in recouping their in-going contributions. It should be appreciated that the compulsory payment of these contributions, a condition precedent to village entry, involves in each case, amounts of several hundreds of thousands of dollars.
Under the RV Act presently, these refundable contributions are returned to the resident in the event the resident leaves the village, or to their estate in the event the resident passes away. The significant quantities of money involved are held by the proprietor as a charge against the land upon which the village is built. Where a previous resident is in dispute over the return of their in-going fee, s.31of the RV Act provides that that dispute be heard in the Supreme Court of Victoria. The current process requires the previous resident to make application for an Order of the Court which has the affect of assuring the previous resident’s contribution against the retirement village’s land.
Most regrettably, this arrangement has not proved effective for many of the previous residents of Berkeley Living, a retirement village previously located at Paterson Lakes. That retirement village, now in liquidation, closed in 2017 and its complex corporate structure has hindered the payment of the moneys to those previous residents. While the plight of these entirely innocent citizens is sought by this legislation to be put right, it should be appreciated that a more general protection is sorely needed, particularly when insolvency arises and the corporate veil proves an obstruction.
The Berkeley Living case has highlighted regrettable shortcomings in the legislative scheme. These include that under the RV Act, the Supreme Court is restricted in providing relief to such former residents. First, the prime RV Act remedy, a s.31 Order, is contingent upon an affected resident making application in the Court – which for many individuals would be a daunting and costly exercise. Second, the resident must, as the Minister’s Second Reading Speech makes clear, have already ‘been unsuccessful in enforcing a judgement debt’ as to the in-going contribution. Third, the Court must consider the s.31 Order to be in the interests of all residents, not just the applicant/s.
Amidst these obstacles for the previous resident, is the further proviso, that state assistance, by the supporting intervention in the Court by the Director of Consumer Affairs, Victoria, can occur only after the action has commenced in the Court.
Our approach has been to eliminate these technicalities – which served no evident purpose, other than to make unnecessarily burdensome and costly, the remedial steps for a former resident in recovering what was always their money. For many residents the $300,000 to $500,000 involved will represent the bulk of their superannuation or savings, without the benefit of which they will be in dire straits at a time when there will be very few available options.
Against all this is the Bill, not dissimilar to its NSW equivalent, which will no longer require an applicant to have unsuccessfully enforced a judgement debt before the Supreme Court can make a s.31 Order. Importantly too, the Court in considering the making of such an Order will be required to satisfy itself that doing so would be in the interests of a majority of residents, not all residents. (One can readily imagine, in a multi-unit village, the effect of a proprietor retaining a right or influence over one or more previous residents.)
The effect of the new scheme provided for in the Bill, will be to empower the Court to make the necessary orders, when it is in the interests of the majority to do so, if:
- the owners of the retirement village land are insolvent; or
- should there be more than one retirement village landowner, one, or more, of the owners is insolvent and the Court considers it to be just and equitable to grant the application; or,
- where even part of the village land is vested in ASIC or the Commonwealth – owing to previous ownership in a registered company.
Centrally important too is the Bill’s enablement for the Director of Consumer Affairs, Victoria, where it is in the public interest for the Director to do so, to make and advocate the application in the Supreme Court, for an Order enforcing the charge (against the land) in the favour of the previous residents. It will be abundantly clear that some, so unfortunately affected by their village being affected by insolvency, would not be in a financial position to commence such a proceeding as is currently required. And one might ask, why should there have been such obstacles in the way of redress? Whose interests were served by such legal form and technicality?
It is also proper in pursuing this vital reform, that regard be had for the cost to the public purse which may be incurred in taking the application in the Supreme Court, obtaining the Order, seeing to the sale of the land and executing the original order (over the land) by distributing the funds realised to the previous residents. To achieve this objective, and consistent with legal principle, the order in which funds realised is eventually distributed, will be headed by the State of Victoria.
It should be noted that in considering these matters that there has been consultation with Victorian residents of retirement villages and with the relevant peak councils, the Victorian Division of the Property Council of Australia, Land Use Victoria and the Consumer Action Law Centre.
I commend the Bill to the house.