By David McMullen and Ryan Hewitt
Background
The Retirement Villages Act 1992 (WA) (“RV Act”) gives the State Administrative Tribunal (SAT) jurisdiction to terminate a residence contract on application from a retirement village operator in limited circumstances, due to:
- transfer of a resident to another accommodation (s 57);
- medical grounds (s 58);
- breach of residence contract or village rules (s 59);
- serious damage or injury by the resident (s 62); and
- undue hardship on the operator (s 63).
These types of application are not common; and rarely do they go to a final hearing with a reported decision by the Tribunal to terminate a residence contract.
In 2022, we analysed the decision in Co-operation Housing and Tramsak [2022] WASAT 1. Our article can be found here.
On 29 July 2024, the Tribunal again took the rare step of terminating a residence contract, publishing its reasons for decision in The Bethanie Group Inc and Kinnane [2023] WASAT 136.
The Bethanie Group Inc and Kinnane [2023] WASAT 136
Facts
Ian Kinnane was a resident at Bethanie Elanora Retirement Village in Bunbury, operated by the Bethanie Group Inc (the Operator).
Mr Kinnane occupied an independent living unit in the village from March 2018 under two consecutive short-term residence agreements. Upon expiry of the further agreement, Mr Kinnane continued to live in the unit.
While living in the Village Mr Kinnane took issue with the noise created by a neighbouring resident’s leatherworking, as it involved using a small hammer to work pieces of leather, which resulted in multiple confrontations.
Argument One: Aggression to other residents
The Operator applied to SAT to terminate Mr Kinnane’s residence contract relying on an alleged breach of the residence contract and residence rules — namely rule 10 of the rules which prohibits a resident from causing nuisance or objectionable behaviour towards any other Residents.
The Operator relied on an incident between Mr Kinnane and his neighbour where it was found that Mr Kinnane had become close to committing acts of violence against the other resident but could not do so as their security screen was locked (at [59]-[60]).
This aggressive behaviour to another resident was considered serious objectionable behaviour in breach of the rules and engaging s 59(2) of the RV Act. It also satisfied SAT that Mr Kinnane was likely to intentionally or recklessly cause injury to other residents (due to the same aggressive conduct) which engaged s 62(2)(a) of the RV Act. SAT relied on these sections to terminate the residence contract under the RV Act.
Argument Two: Expiry of short fixed-term resident contract
The Operator also argued that it was an implied term of the short-term residence agreement Mr Kinnane would vacate within a reasonable time after the expiry of the tenancy term (at [37]); the SAT chose not to reach a view on this issue and instead relied on the other arguments from the Operator.
It is a notable irregularity of the RV Act that it creates a scheme for short-term residency contracts of 12 months of less (in contrast to life-term residence contracts) but does not prescribe how Operators are to obtain vacant possession of a unit upon expiry of a fixed term.[1] The decision notes it would be a surprising outcome if [people who have not paid the premium that long term residents paid] could not be required to leave the retirement village at the end of the contract term.[2]
Outcome
SAT ordered that the residence contract was terminated, and Mr Kinnane was to vacate the unit at a fixed date.
In exercising its discretion, SAT considered a number of factual matters including Mr Kinnane’s lack of insight into his behaviour (at [92]), the Operator’s attempts to engage in dispute resolution including offering $20,000 for him to vacate the unit (at 96]–[97]), the fact the residence contract did not provide the expectation of security of tenure for life (at [90]), and Mr Kinnane’s personal circumstances meaning the consequences of the termination are potentially devastating (at [87]).
Comment
It is inherently difficult for a retirement village operator to terminate a residence contract. Testament to this is the rarity with which (in the history of the RV Act) applications have been made to the SAT, and then gone as far as an order to terminate.
The retirement villages legislation is consumer-centric by design; and the rights of the operator must be weighed against the rights and protections enjoyed by the resident.
Nevertheless, it remains the case that serious objectionable behaviour from a resident can be grounds for SAT to terminate a residence contract.
If you require legal advice or assistance about the termination of residence contracts, retirement village disputes, or any other aspect of seniors living, please contact David McMullen.
[1] The Bethanie Group Inc and Kinnane [2023] WASAT 136, [32].
[2] The Bethanie Group Inc and Kinnane [2023] WASAT 136, [33].
