Retirement Village Consultation – Understanding the Obligation

The administering body of a retirement village has an obligation to establish appropriate procedures for consulting with residents on various matters under the Fair Trading (Retirement Villages Interim Code) Regulations (No. 2) 2018 (“RV Code”). These matters include: the future planning and budgeting of the retirement village and any other proposed change to the operating financial arrangements of the village; the day‑to‑day running of the retirement village and any issues or proposals raised by the residents. The administering body must also establish appropriate procedures for consulting with a residents’ committee.

The RV Code contains a statement intended to assist readers in understanding what it means to ‘consult’. The statement above is not part of the RV Code, and it provides only some non-exhaustive examples of effective consultation:

Consultation

For consultation between residents, residents’ committees and the administering body to be effective, it requires the provision of information, but this alone does not constitute effective consultation.

Examples of effective consultation include —

(a)       the administering body giving residents or residents’ committees the opportunity to express views on matters that affect the operation of, or experience of living in, the retirement village; and

(b)       the administering body listening to, and considering the views, comments and concerns of residents or residents’ committees before making a decision; and

(c)       the administering body responding in writing within a reasonable time to concerns raised by a majority of residents or the residents’ committee; and

(d)      the administering body giving reasons why requests can or cannot be carried out; and

(e)       the administering body taking steps, where appropriate and reasonable, to implement requests; and

(f)       if there is a dispute, the administering body documenting the concerns raised and actions taken to resolve the dispute; and

(g)      the administering body establishing processes for regular communication with residents about village matters.

The themes reflected above are a useful starting point. There are however likely to be occasions when administering bodies and village managers will be unsure what is required of them in order to meet their consultation obligations. For guidance in these instances, it is possible to supplement what is found in the RV Code by looking elsewhere; because legal obligations to ‘consult’ are by no means unique to retirement villages. Consider the following:

1. The Oxford English definition of ‘consult’ includes to simply ‘Have discussions with (someone), typically before undertaking a course of action’.
2. In a statutory context quite removed from the retirement villages legislation, the Fair Work Regulations 2009 (Cth) contain a model consultation term. The model term does exist for a specific (fair work-related) purpose. Nevertheless, it is still pertinent to note that under the model consultation term the employer is required amongst other things to have discussions with their employee, provide relevant information, invite employees to submit their views, and ‘give prompt and genuine consideration’ to matters raised by the employee. These are concepts consistent with general legal notions of ‘consultation’.
3. There is also relevant judicial commentary available on what it means to ‘consult’:

1. 1. ‘The requirement of consultation is never to be treated perfunctorily or as a mere formality. The [party being consulted] must know what is proposed; they must be given a reasonably ample and sufficient opportunity to express their views or to point to problems or difficulties; they must be free to say what they think’ (citing Port Louis Corporation v Attorney-General of Mauritius [1965] AC 1111 at 1124).
   2. ‘… any right to be consulted is something that is indeed valuable and should be implemented by giving those who have the right an opportunity to be heard at a formative stage of proposals — before the mind of the [decision maker] becomes unduly fixed’: Sinfield v London Transport Executive [1970] Ch 550 at 558.
   3. ‘A key element of [an obligation to “consult”] is that the party to be consulted be given notice of the subject upon which that party’s views are being sought before any final decision is made or course of action embarked upon. Another is that while the word always carries with it a consequential requirement for the affording of a meaningful opportunity to that party to present those views. What will constitute such an opportunity will vary according the nature and circumstances of the case. In other words, what will amount to “consultation” has about it an inherent flexibility. Finally, a right to be consulted, though a valuable right, is not a right of veto’: Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR [2010] FCA 591. In this same case the Court summed up by explaining: ‘There is a difference between saying to someone who may be affected by a proposed decision or course of action, even, perhaps, with detailed elaboration, “this is what is going to be done” and saying to that person “I’m thinking of doing this; what have you got to say about that?”. Only in the latter case is there “consultation”’.
   4. Picking up the above point that consultation is not a right of veto, it was further explained in CFMEU v BHP Coal Pty Ltd (2016) FCA 1009 that based on an ordinary understanding of ‘consultation’:

‘… the obligation to consult does not carry with it any obligation either to seek or to reach agreement on the subject for consultation. Consultation is not an exercise in collaborative decision-making. All that is necessary is that a genuine opportunity to be heard about the nominated subjects be extended to those required to be consulted before any final decision is made. …  It does not mean that one cannot approach consultation with a particular outcome in mind, only that one’s mind not be unduly fixed’.

Conclusions

‘Consultation’ will vary case by case; and indeed, as one of the above decisions put it, there is an ‘inherent flexibility’ around what can constitute appropriate ‘consultation’. Nevertheless, we recommend that when retirement village owners and administering bodies are required to consult with residents on a matter, some key guiding principles should be to focus on:

• having a two-way discussion, typically before undertaking a course of action, and in any case before your mind is made up;
• provision of information to the residents and establishing processes for communication;
• a genuine opportunity for the residents to be heard and to express views;
• listening to, and considering the residents’ views, and documenting concerns;
• responding in writing within a reasonable time to concerns raised; and
• taking steps to implement actions based on consultation and giving reasons for decisions.

We are able to advise  organisations requiring assistance in more complex consultation scenarios, including where disagreements, disputes or complaints arise or are likely to arise.