Thursday, 28 November 2024

Retirement Villages Amendment Bill 2024

Statement of compatibility

Gabrielle WILLIAMS (Dandenong – Minister for Government Services, Minister for Consumer Affairs, Minister for Public and Active Transport) (12:01): In accordance with the Charter of Human Rights and Responsibilities Act 2006, I table a statement of compatibility in relation to the Retirement Villages Amendment Bill 2024:

Opening paragraphs

In accordance with section 28 of the Charter of Human Rights and Responsibilities Act 2006, (the Charter), I make this Statement of Compatibility with respect to the Retirement Villages Amendment Bill 2024 (the Bill).

In my opinion, the Bill, as introduced to the Legislative Assembly, is compatible with human rights as set out in the Charter. I base my opinion on the reasons outlined in this statement.

Overview

The Bill amends the Retirement Villages Act1986 (the Act) to –

• improve the regulation of retirement villages,

• further provide for the needs of the aging and diverse residents of retirement villages,

• further provide for consumer protection and additional mechanisms to support the interests of residents of retirement villages,

• provide for regulation that anticipates future growth and innovation in the retirement villages sector,

• provide further protection of the rights, interests and needs of current, and future residents of retirement villages and residents that are leaving retirement villages,

• providing processes for resolving disputes between residents, operators and proprietors of retirement villages, and

• make minor related amendments to that Act and other Acts.

Human Rights Issues

The human rights protected by the Charter that are relevant to the Bill are:

• Freedom of movement (section 12)

• Privacy and reputation (section 13)

• Freedom of expression (section 15)

• Protection of families and children (section 17)

• Property rights (section 20)

• Fair hearing (section 24)

• Rights in criminal proceedings (section 25)

Freedom of movement (section 12)

Section 12 of the Charter provides that every person lawfully within Victoria has the right to move freely within Victoria, to enter and leave it, and has the freedom to choose where to live. This right is, however, not an absolute right under the Charter and may be subject to such reasonable limitations as are demonstrably justified in a free and democratic society, including the property rights of others.

Clause 18 of the Bill engages the freedom of residents to choose where to live by providing a new framework for the termination of residence contracts in circumstances of a significant breach of contract (new section ‍16D) or for health and safety reasons (new section 16F). Termination of a residence contract will result in the eviction of a resident from their place of residence, removing their ability to choose to continue to live in the retirement village.

The framework introduced by clause 18 clarifies the existing framework that governs the termination of residence contracts that is necessary for the proper operation of the Act. The new framework seeks to balance the competing objectives of respecting an individual resident’s right to choose where to live, and the broader protection of providers, contractors and neighbours, as well as the resident themselves by:

• Clarifying what a ‘substantial breach’ of a residence contract that engages the termination of contract process,

• Provides for an extension of time for residents to remedy an alleged breach of contract,

• Introducing clear criteria for when termination of contract for health and safety reasons may be required, including where there is a ‘substantial risk’ to the health and safety of any person,

• Requiring an operator to seek VCAT approval to terminate a contract on health and safety grounds, and

• Introducing a ‘reasonable and proportionate’ test before a residence contract can be terminated for any reason, with regard to the retirement village principles, the effect on the resident and whether alternative course of action is reasonably available.

For these reasons, I am of the opinion that these provisions are compatible with the right in section 12 of the Charter.

Privacy and reputation (section 13)

Section 13 of the Charter provides that a person has the right not to have their privacy, or home unlawfully and arbitrarily interfered with. An interference will be lawful if it is permitted by a law which is precise and appropriately circumscribed, and will be arbitrary only if it is capricious, unpredictable, unjust or unreasonable, in the sense of being disproportionate to the legitimate aim sought.

Application of the Director of Consumer Affairs Victoria’s powers

Clause 58(1) inserts new subsection 40(1AA) into the Act to provide that Part 6.2 of the Australian Consumer Law and Fair Trading Act 2012 (the ACLFT Act) applies to the Act. Part 6.2 of the ACLFT Act sets out a range of powers for the Director of Consumer Affairs Victoria (Director CAV), including:

• receiving complaints about the supply of goods and services,

• institute proceedings in relation to a dispute about the supply of goods and services,

• issuing show causes notices, and

• require the provision of information or documents to assist in investigating a contravention of the ACLFT Act, or in monitoring compliance with its provisions.

Specifically, under section 126 of the ACLFT Act, the Director CAV may compel a person, whom the Director believes is capable of assisting in the investigation of a contravention of the ACLFT Act, to provide information, documents, or give evidence on oath or affirmation. It is an offence for a person to refuse or fail to comply with a request under section 126, punishable by a fine of up to 60 penalty units.

To the extent that this clause 58(1) engages the right to privacy but requiring the disclosure of information of a private nature under section 126 of the ACLFT Act, I consider that any interference with the right to privacy and reputation resulting from section 40(1AA) provisions will be neither unlawful nor arbitrary. The Bill engages powers the scope of which are clearly defined and exercisable in circumstances set out in the ACLFT Act. Access to material evidencing non-compliance with or breach of the Act allows the Director CAV and inspectors to effectively and efficiently exercise their regulatory functions in relation to the retirement villages sector. Section 126 is circumscribed in its scope and can only operate to compel the provision of material necessary to monitor compliance with, or investigate a breach of, the Act. This provision is necessary to ensure that other residents do not continue to suffer loss or damage as a result of a breach of the residence contracts or the Act. Any information that is provided to the Director CAV under section 126 is not admissible in evidence against the person who disclosed the information, except in any criminal proceedings relating to a failure to disclose the information requested.

Disclosure of certain information

Clause 19 introduces a new framework for pre-contractual disclosure, requiring operators to provide certain information to prospective residents in the form of an information statement. Clause 19 engages the right to privacy by requiring the disclosure of personal information in the information statement:

• including the proprietor’s their name and address,

• the operator’s name, address and telephone number, and

• the name of the operator’s representative at the retirement village.

The operator must publish the information statement, with offences for failing to do so (new section 20). The Bill also includes an offence for failure to update the information statement (new section 21), an offence for failure to provide an information statement to a person proposing to become a resident (new section 22), and an offence for knowingly providing false information (new section 25).

Clause 12 inserts new section 11A into the Act which requires the operator of the retirement village to give a notice to the Director CAV that includes personal information, including the name and address of the operator of the retirement village, upon the lodgement of a retirement village notice under section 9. New section 11A replaces section 38L of the Act (repealed by clause 55), which currently requires the name and address of the ‘manager’ of the retirement village to be provided upon the lodgement of a retirement village notice under section 9.

Although clauses 19 and 12 of the Bill engage the right to privacy, I consider that these provisions are compatible with the Charter as they do not unlawfully or arbitrarily interfere with the right to privacy. The new provisions clearly articulate the personal information that must be disclosed and the circumstances in which it must be disclosed. The disclosures are considered reasonable and a non-invasive method to ensure proprietors and operators of retirement villages are held accountable via the public register of retirement villages, and to support prospective residents to make informed decisions about entering into and living in a retirement village.

External Dispute Resolution Scheme

Clause 57 of the Bill establishes a new alternative dispute resolution scheme for retirement village disputes (the Scheme) in the Department of Government Services (DGS). It is proposed that the Scheme will deliver complaint handling and conciliation services for disputes under the Act. Responsibility for the administration of the Scheme and all the necessary powers to deliver dispute resolution services will vest in the Secretary to DGS (the Secretary).

New section 38ZH provides that the Director CAV may refer matters to the Secretary for conciliation and is to be treated as an application for conciliation made by a party to the dispute. A referral to the Secretary must include a range of information that can include personal information, including identifying the parties to the retirement village dispute, identifying the grounds of the dispute, and specifying the particulars of the dispute.

New section 38ZK also enables the Secretary to request information and documents for the purpose of inquiring into and assessing the suitability of village disputes for conciliation. New section 38ZO provides a similar power to request information for the purpose of conducting conciliation. The Secretary may disclose information obtained to all parties to the dispute with the consent of the person who has provided that information under new section 38ZP. This may require the collection and disclosure of personal information.

New section 38ZU(2) provides that the Secretary DGS may issue a ‘no resolution’ certificate. New section ‍38ZV provides that a ‘no resolution’ certificate must include information specifying:

• whether conciliation was conducted on an application or referral from the Director CAV,

• the Secretary assessed the dispute as suitable,

• that the matter has not been resolved by conciliation, including reasons why the matter remains unresolved,

• the terms of any recorded agreement issued and a summary of why the recorded agreement was terminated, and

• any other prescribed information.

New section 38ZU(3) provides that the Secretary DGS may include information specifying:

• that the Secretary is satisfied that a party to the dispute did not participate or did not participate in good faith in conciliation,

• a statement setting out an outcome to the dispute that the Secretary considers is a fair and reasonable outcome, and the particulars and terms of that outcome,

• advice on any further available options for the parties to resolve the dispute, including any application that may be made to VCAT or a court, and

• any other prescribed information.

To the extent that the provisions of the Bill outlined above constitute an interference of the right to privacy under section 13, I consider that these provisions are compatible with the Charter as they do not unlawfully or arbitrarily interfere with this right. Information can only be collected by the Secretary for specific purposes outlined in the relevant provisions, being to inquire into and assess suitability of disputes and for the purpose of conciliating disputes.

The provision of information by the Director CAV, and by a person upon request of the Secretary, is necessary for the proper functioning of the Scheme, to ensure conciliation is delivered effectively and to help manage power imbalances between the parties to the dispute. Without the information to be provided, the Secretary would be unable to contact parties to assess their willingness to participate in conciliation in good faith, understand the issues that are in dispute, formulate approaches for the resolution of disputes, and recommend fair and reasonable outcomes to disputes. The Bill does not compel a person to provide the information requested by the Secretary or impose penalties for a failure to do so.

Disclosure of information by the Secretary as part of a record of agreement or no resolution certificate is also necessary for the transparent and effective operation of the Scheme. The information to be included is the minimum required to ensure appropriate record-keeping of services provided under the Scheme, to promote effective compliance with agreements reached in conciliation, and to encourage parties to continue attempts to resolve their dispute on the basis of an agreed background and facts of the dispute.

The Bill ameliorates interferences with a person’s right to privacy by ensuring that evidence of anything said or done in conciliation is not admissible in any proceeding before VCAT or any other legal proceeding before a court or tribunal unless all the parties to the dispute agree in writing to the giving of the evidence. Any interference with a person’s privacy as a result of these reforms is further ameliorated by the requirement that information collected and held by the Secretary in accordance with the information privacy requirements of the Privacy and Data Protection Act 2014 and the Public Records Act 1973.

For these reasons, I am of the view that these amendments do not limit the right to privacy. To the extent that the Bill does interfere with a person’s right to privacy, the interference is lawful and not arbitrary, as clauses 12, 19, 57 and 58(1) are clearly articulated in law, specific, necessary for the operation of the Scheme, and are reasonable and proportionate to achieving that objective.

Right to protection from unlawful and arbitrary interference with a person’s home (section 13)

Section 13(a) of the Charter provides a right to protection from arbitrary or unlawful interference with a person’s home.

Termination of resident contracts

Clause 18 of the Bill provides for residents to be issued with termination notices in circumstances of breach (new section 16D) or health and safety (new section 16F), which may have the effect of interfering with a resident’s home.

As outlined above in the discussion relating to the right to freedom of movement, the circumstances in which residents may be issued with termination notices are clearly set out in the Bill and are appropriately circumscribed. The provisions seek to balance the competing objectives of respecting residents’ rights to continue to live in their home in a retirement village, and the broader protection of providers, contractors and neighbours, as well as the resident themselves. The new framework for the termination of residence contracts inserted by clause 18 provides a more clearly defined process with specified criteria than what is currently provided for in section 16 of the Act.

Modification of fixtures and fittings by non-owner resident

New section 37B (clause 44) provides that a non-owner resident must not add, remove or alter any fixtures or fittings on their premises unless the addition, removal or alteration is prescribed, or they have first made an application to the operator, and the operator has given consent.

These amendments may be considered an interference with a person’s home, as the resident is precluded from making any such alterations to their home without consent. The Bill sets out clearly defined processes for obtaining an operator’s consent for a proposed addition, removal or alteration. The purpose for introducing this framework is to provide clarity for both non-owner residents and operators about their responsibility for reinstating the retirement village premises upon a resident’s exit from the village, including the condition to which the premises must be reinstated. The impact of this right is mitigated by the requirement that an operator must not unreasonably withhold consent to an addition, removal or alteration of a fixture in a non-owner resident’s premises. Further, the Bill also enables the creation of regulations to prescribe additions, removals or alterations to fixtures that do not require an operator’s consent.

In my view, clauses 18 and 44 of the Bill does not limit the right to protection from unlawful and arbitrary interference with a person’s home as any interference with that right will not be unlawful or arbitrary.

Freedom of expression (section 15)

Section 15(2) of the Charter provides that every person has the right to freedom of expression. Section 15(3) of the Charter provides that special duties and responsibilities are attached to the right to freedom of expression and that the right may be subject to lawful restrictions reasonably necessary to respect the rights of other persons and for the protection of national security, public order, public health or public morality.

Information statements

Clause 19 introduces a new framework for pre-contractual disclosure, requiring operators to provide certain information to prospective residents in the form of an information statement. Clause 19 engages the right to privacy by requiring the disclosure of personal information in the information statement:

• including the proprietor’s their name and address,

• the operator’s name, address and telephone number, and

• the name of the operator’s representative at the retirement village.

The operator must publish the information statement, with offences for failing to do so (new section 20). The Bill also includes an offence for failure to update the information statement (new section 21), an offence for failure to provide an information statement to a person proposing to become a resident (new section 22), and an offence for knowingly providing false information (new section 25).

I consider that these provisions are necessary to protect retirement village residents by supporting prospective residents to make informed decisions about entering into and living in a retirement village, through accessible and truthful pre-contractual disclosure.

To the extent that the freedom of expression is engaged, these provisions fall within the exception in section ‍15(3) of the Charter, as reasonably necessary to respect the rights of other persons.

Protection of families and children (section 17)

Section 17(1) of the Charter provides that families are the fundamental group unit of society and are entitled to be protected by society and the State. Section 17(2) of the Charter provides that every child has the right, without discrimination, to such protection as is in their best interests and is needed by them by reason of being a child. Section 17(2) recognises the particular vulnerability of children due to their age and confers additional rights on them. Its scope is informed by the United Nations Convention on the Rights of the Child, which requires that in all actions concerning children, the best interests of the child shall be the primary consideration.

Currently, there are many people who co-habit with residents in a retirement village who may not be residents themselves, in accordance with a resident contract. This includes carers, friends and family members (in addition to resident’s spouses and domestic partners who are defined under the Act as residents themselves). Clause 9 introduces a new provision to formalise the status of people living with residents in a retirement village and recognises the diversity of families in the community, including in relation to residents who may have caring responsibilities for younger family members.

New section 6 (substituted by clause 9) engages the protection of families and children by providing that, on application by a resident, an operator may give permission for a person other than a retired person, who is of or under the age of 55 years, to live in the retirement village with a resident. The operator must not unreasonably withhold permission for the other person to live with the resident. New section 6A provides a right to a person who lives with a resident in a retirement village to continue to occupy the premises for a period of three months following the death of a resident, providing protection for children or family members to make any necessary alternative arrangements in a difficult time.

This amendment promotes the protection of families and children, by allowing a resident’s family member to reside with them promoting family unity. Clause 7 of the Bil supports this reform by providing that residents can access internal and external dispute resolution processes in relation to an operator’s failure to give permission for a person to live in a retirement village under new section 6.

Property rights (section 20)

Section 20 of the Charter provides that a person must not be deprived of their property other than in accordance with law. This right requires that powers which authorise the deprivation of property are conferred by legislation or common law, are confined and structured rather than unclear, are accessible to the public, and are formulated precisely. In considering whether this right has been limited, a court will consider whether the relevant law deprives a person of property, and whether deprivation is in accordance with law.

While the Charter does not define ‘property’, case law indicates that the term should be interpreted ‘liberally and beneficially to encompass economic interests’. This right requires that powers which authorise the deprivation of property are conferred by legislation or common law, are confined and structured rather than unclear, are accessible to the public, and are formulated precisely. Existing authority also suggests that the laws that permit or require a deprivation of property should not operate arbitrarily. Accordingly, an assessment of compatibility will depend upon the extent to which a deprivation of property does not operate arbitrarily, and is sufficiently clear and certain to be considered ‘in accordance with the law’.

Payment of exit entitlements

New section 32I (clause 34) may engage property rights as it increases the maximum time for payment of an exit entitlement to a vacating resident, from 6 months after the non-owner resident has delivered up vacant possession (section 26(2)(b)(iii) of the Act) to 12 months after the day on which the resident permanently vacates the residential premises.

Although this amendment permits a longer timeframe for vacating residents to be paid their exit entitlement, the previous 6-month maximum period was not practical and often not achievable. There are many factors that may impact the turnover of premises in a retirement village, including delays due to probate where a resident has died, complex arrangements in relation to deceased estates, debt financing prior to settlements of sale or lease, and any required renovation or reinstatement works that may be required before re-leasing or selling the premises. While retirement village units in Victoria take on average approximately 6.4 months to sell, some units can take significantly longer including in some, taking up to several years to sell.

In many cases, repayment of an exit entitlement is contingent on the sale of a unit or the right to occupy a residence. Depending on the residence contract, exit entitlements may be more than one hundred thousand dollars. The delay in repayment of those entitlements to former residents or their estate can cause significant hardship and uncertainty. Conversely, a requirement for retirement village operators to repay exit entitlements to residents within a short period time, including before the premises has been re-occupied by a new resident, may also have significant impacts on the existing business model and liquidity of retirement villages, with the potential to cause an increase in costs to residents this additional financial burden.

Clause 34 of the Bill strikes a balance between the rights and interests of residents and operators by imposing a maximum period for payment to 12 months after the day on which the resident permanently vacates the premises. The Bill does not permanently deprive residents of their property rights to an exit entitlement, but rather only extends the time by which operators are required to pay the exit entitlement. The impact on the property rights of residents to the use and control of their exit entitlement is mitigated by:

• an ability to agree with an operator to an exit entitlement period that is less than 12 months,

• introducing an offence for an operator’s failure to repay an exit entitlement within the required time, punishable by a fine of up to 60 penalty unit for an individual or 300 penalty units for a body corporate,

• jurisdiction to apply to VCAT for an order as to payment of an exit entitlement, including payment of interest for the period for which payment is overdue, and having regard to any hardship caused to former resident by reason of the delay (new section 32N).

To the extent that clause 34 does deprive a resident of their property, I consider that the deprivation is in accordance with law as the framework for repayment is structured, accessible to the public, and formulated precisely. It is my view that the amendments are reasonable and proportionate, and they appropriately balance consumer protection and industry viability.

Termination of residence contracts

Clause 18 of the Bill provides for residents to be issued with termination notices in circumstances of breach (new section 16D) or health and safety (new section 16F). Clause 18 may engage the property rights of residents by permanently depriving them of their right to occupy the retirement village premises under a lease or a licence interest in that property.

As outlined above in the discussion relating to the right to freedom of movement, the circumstances in which residents may be issued with termination notices are clearly set out in the Bill and are appropriately circumscribed. Currently, section 16 of the Act outlines a process for terminating a contract for breach, including providing the resident with an opportunity to remedy the breach withing 28 days. Clause 18 promotes property rights under this framework by introducing a definition of ‘substantial breach’ to further clarify the circumstances when a residence contract may be terminated. Clause 18 promotes property rights further by introducing additional processes that must be followed for the termination of a residence contract for health and safety reasons, including by requiring consideration of the availability of care services under the Aged Care Act 1997 (Cth) and the National Disability Insurance Scheme, introduces a ‘substantial risk’ threshold, and requiring VCAT approval to terminate a residence contract on health and safety grounds.

Clause 18 further promotes property rights by introducing a ‘reasonable and proportionate’ test for the termination of residence contracts, requiring consideration of:

• the retirement village principles (set out in new section 1A),

• the effect the notice will have on the health, safety or wellbeing of the resident,

• whether any other course of action is reasonably available,

• in the case of a notice of termination of contract for breach, the risk to any other relevant persons if the contract is not terminated, and

• any other prescribed matters.

The provisions governing the termination of residence contracts are necessary for the proper operation of the Act. The reforms introduced by clause 18 seek to balance the competing objectives of respecting an individual resident’s right to occupy premises at the village, and the broader protection of providers, contractors and neighbours.

For these reasons I am of the opinion that these provisions are compatible with the right in section 20 of the Charter, and to the extent that a termination notice may constitute a deprivation of property, any such deprivation will be in accordance with law and therefore compatible with the right to property.

Application of the Director of Consumer Affairs Victoria’s powers

As discussed above in relation to the right to privacy, the Bill provides that Part 6.2 of the ACLFT Act applies to the Act (clause 59(1)). Clause 59(1) will enable the Director CAV to require a person to provide information or documents, if the Director believes that a person is capable of providing information, producing documents or giving evidence relating to a matter that constitutes, or may constitute, a contravention of the Act (see section 126 of the ACLFT Act). The Director CAV will also be able to seize documents produced, if the Director considers that the documents necessary to obtain evidence for proceedings under the Act or regulations, or if the Director believes on reasonable grounds that it is necessary to prevent the documents being concealed, lost or destroyed.

Clause 59(1) may engage property rights by requiring any person to relinquish custody or control of documents or evidence to the Director CAV. However, the powers available to the Director CAV are governed by a comprehensive framework under Part 6.2 of the ACLFT Act, providing for the return of document copies to the person from whom the documents have been seized and the return of seized documents within 3 months. The framework also does not permanently deprive any person of their property rights in relation to the documents.

For these reasons I am of the opinion that these provisions are compatible with the right in section 20 of the Charter, and to the extent that provision and seizure of information and documents may constitute a deprivation of property, any such deprivation will be in accordance with law and therefore compatible with the right to property.

Fair hearing (section 24)

Section 24(1) of the Charter provides that a person who is a party to a civil proceeding has the right to have the proceeding decided by a competent, independent and impartial court or tribunal after a fair and public hearing. The term ‘civil proceeding’ in section 24(1) has been interpreted as encompassing proceedings that are determinative of private rights and interests in a broad sense, including some administrative proceedings.

External Dispute Resolution Scheme

Clause 57 of the Bill introduces new Part 6E to the Act to establish a scheme for the resolution of specific retirement village disputes. The Bill supports the establishment of the scheme within the Department of Government Services, led by the Secretary to DGS, with powers to deliver conciliation services to resident, operators and proprietors of retirement villages.

The scheme does not constitute a court or a tribunal as it does not have the power to hear civil or criminal proceedings, nor the ability to make orders to resolve disputes. While the scheme will operate to deliver conciliation impartially, in accordance with the Australian Government Benchmarks for Industry-based Customer Dispute Resolution, the scheme is not a body established independent of government.

New section 38ZI provides that the Secretary to DGS may assess the suitability of the dispute for conciliation, and reject the application is satisfied that the matter is not suitable. The Secretary must not assess the dispute as suitable if:

• the dispute does not fall within the definition of village dispute, or

• the application or referral was made outside any required time, or

• the application or referral is vexatious, frivolous, lacking in substance or was not made in good faith, or

• the dispute has been resolved.

The requirement that a dispute must be suitable for conciliation ensures that the village dispute can be reached through the most appropriate resolution method for the dispute, including where an application to VCAT or to a court may be more appropriate. The requirement to assess applications for their suitability and eligibility also allows potential limitations to the effectiveness of ADR, such as power imbalances between parties, to be managed effectively, and the parties to be triaged to the right type of proceeding.

New section 38ZN provides that the Secretary may decide to conciliate the dispute under new Division 4 of Part 6E. The participation of parties in conciliation does not limit their right to a fair hearing. If parties are unable to successfully reach an agreement through conciliation, the option to have the dispute heard as proceeding at VCAT or a court, and have the matter heard and decided by a competent tribunal, remains available to the parties. New section 38ZZG provides that evidence of anything said or done in the course of a conciliation conducted by the Secretary is not admissible before VCAT, a court or a tribunal unless all parties to the dispute that was the subject of the conciliation give written agreement to the giving of the evidence. This provision ensures that the participation of parties in the conciliation does not limit procedural fairness if the matter progresses to a subsequent hearing.

Rights in criminal proceedings (section 25)

Section 25(2)(k) of the Charter provides that a person charged with a criminal offence is entitled not to be compelled to testify against themselves or to confess guilt. This right under the Charter is at least as broad as the privilege against self-incrimination protected by the common law. It applies to protect a charged person against the admission in subsequent criminal proceedings of incriminatory material obtained under compulsion, regardless of whether the information was obtained prior to or subsequent to the charge being laid. It is also an aspect of the right to a fair trial protected by section 24 of the Charter. Consequently, it is necessary to consider the proportionality or justification of the limitation on this right, by reference to its purpose. Section 7(2) of the Charter provides that Charter rights may be subject under law only to such reasonable limits as can be demonstrably justified in a free and democratic society based on human dignity, equality and freedom, taking into account all relevant factors.

Right not to be compelled to testify against oneself and the right to a fair trial

As discussed above in relation to the right to privacy, and property rights, the Bill provides that Part 6.2 of the ACLFT Act will apply to the Act (clause 59(1)). Clause 59(1) will enable the Director CAV to require a person to provide information, documents and evidence, if the Director believes that a person is capable of providing information, producing documents or giving evidence relating to a matter that constitutes, or may constitute, a contravention of the Act, including by appearing to give evidence on oath or affirmation (see section 126 of the ACLFT Act). A person is not excused from answering a question, providing information or producing or permitting the inspection of a document on the ground that the answer, information or document may tend to incriminate that person.

Therefore, clause 59(1) may limit the privilege against self-incrimination. However, the powers that may limit the privilege against self-incrimination are part of a comprehensive framework of powers already in effect under the ACLFT Act and includes direct use immunity by prohibiting the use of answers, information, and documents from being admissible in evidence against the person in any other criminal proceedings (see section 126(5)).

I am of the view that any such limitation is reasonable under section 7(2) of the Charter. The privilege against self-incrimination prohibits the state from compelling an individual to assist in proving that they have committed an offence, prevents oppressive government conduct, ensures the reliability of evidence, and protects privacy. However, the purposes for the limit to the right against self-incrimination in clause 59(1) is to enable the Director CAV to monitor compliance with, and to investigate potential contraventions of, the Act. These powers are integral to the Director CAV’s effectiveness in regulating the retirement villages sector which is necessary to adequately protect residents from detriment.

The direct use immunity provides appropriate safeguards to justify the limitation. It would not be appropriate to include a derivative use immunity in response to the Director CAV’s compulsory information-gathering powers as that would severely inhibit the Director’s ability to monitor compliance with and investigate contraventions of the Act. It follows that there are no less restrictive means reasonably available to achieve the purpose of this limitation. Therefore, I am of the opinion that clause 59(1) of the Bill is compatible with the Charter right of a person not to be compelled testify against themselves or to confess guilt.

I consider that the Bill is compatible with the Charter because it does not limit any rights under the Charter, and to the extent that there is limitation, it is reasonable and justified.

The Hon. Gabrielle Williams MP

Minister for Consumer Affairs

Second reading

Gabrielle WILLIAMS (Dandenong – Minister for Government Services, Minister for Consumer Affairs, Minister for Public and Active Transport) (12:01): I move:

That this bill be now read a second time.

I ask that my second-reading speech be incorporated into Hansard.

Incorporated speech as follows:

The Retirement Villages Amendment Bill is the culmination of years of work and advocacy from residents and operators to reform the Retirement Villages Act 1986 and make retirement villages fairer for older Victorians. This Bill will drive a more equitable and sustainable retirement village sector. This Bill will introduce stronger protections around mandatory exit entitlements to be paid back to residents, as well as clarity on how operators must calculate and disclose fees to residents. The Bill will substantially improve the information that older Victorians are provided before they enter a retirement village so they can make informed choices about their next stage in life.

A strong and comfortable retirement village sector is a core component of Victoria’s housing make-up, providing older Victorians opportunities to live and age in home. Retirement villages offer an opportunity not just for Victorians to age with dignity and with the supports and social activities and connections they deserve.

Listening to consumers in the growing retirement villages industry

This Bill reflects the Victorian Government commitment to making living in a retirement village a fairer and comfortable choice for older Victorians. The needs and demographics of Victorians is changing. Victoria’s population is expected to reach 10.3 million by 2051. As Victoria’s population grows, so too will its older population, with estimates that one in four Victorians will be aged 60 years and over by 2046. It is important that Victoria’s housing solutions includes appropriate accommodation option for older Victorians that support them to live a full and supported life, with dignity and choice. Retirement villages offer a long-term accommodation option for older Victorians to remain independent and support residents to age well by delivering safe and secure accommodation and social inclusion, as well as access to recreational activities, amenities, and personal supports.

The makeup of residents entering retirement villages is also changing. Victorians are entering villages later in life, with an average entry age of 76 years old when, and the average length of tenure in a retirement village is 8.4 years. Many residents are also receiving more home care services to support their continued stay in villages. As reported by the Property Council of Australia and in the PwC 2023 Retirement Living Census, 61 per cent of operators in Australia reported providing regulated home care services to residents, an increase from 46 per cent in 2022. The Bill is designed to reflect this change in resident needs.

The Bill is informed by detailed reviews and public consultation and has been shaped by the feedback we have received from residents, operators, industry stakeholders and consumer advocates. In 2016–17, the Legislative Council’s Legal and Social Issues Committee undertook an inquiry into the operation and regulation of the retirement housing sector (the Inquiry). The Inquiry highlighted concerns about contract complexity, unfair fees, and dispute resolution mechanisms, recommending that the Retirement Villages Act be reviewed.

In response to the Inquiry, the Government committed to undertaking a comprehensive review of the Retirement Villages Act 1986. While several significant changes to the Act have occurred since 1986, the Act had not been the subject of a comprehensive review since 2004. The government launched the Review in October 2019 releasing an Issues Paper for public consultation. More than 150 submissions were received from retirement village owners, retirement village residents and their families, researchers, and other interested parties. In addition, community forums were conducted across Victoria and an Options Paper was subsequently released for public consultation in mid-2021. Over 260 submissions to the Options Paper were received, with approximately 90 per cent of submissions coming from residents, their families and residents’ committees, emphasising the need for reform.

The Review culminated in the release of an Exposure Draft Retirement Villages Amendment Bill in 2022. Public consultation on the Exposure Draft during October 2022 and from April to May 2023 generated a total of 112 submissions. This Bill reflects the detailed feedback and engagement that took part in the public review and consultation.

The consultation process was clear on the need to reform and clarify residents and operator rights and obligations, improve dispute resolution, and address information contract complexity and information asymmetries. The Bill seeks to address each of these concerns. It is critical that as Victoria’s population continues to grow, there is a strong and fair retirement village market. This Bill sets up a new regulatory framework to meet the needs of residents and industry and support growth of the sector. This Bill will reshape the framework for the retirement village sector and respond to community concerns. There will be more work to do. Key features of the new regulatory framework will be designed in regulations, in close consultation with residents and stakeholders. The amendments will be reviewed two years after introduction and no later than five, to assess the impact of the reforms and whether additional changes are required to continue to meet the needs of residents and the sector.

Enabling residents to make informed decisions about retirement living

Recent media has highlighted community concerns regarding the complexity of retirement village contracts and the difficulty in accessing information needed to make informed decisions about financial obligations and requirements for both operators and residents at departure from a retirement village.

To support greater resident understanding of retirement living, the Bill introduces a new requirement that contracts must be in a standard form, which will be prescribed in regulations. The Review heard that the variety, and technical nature, of retirement village contracts makes it difficult for residents to compare villages and to understand their obligations and overall costs. When drafting the regulations, the government will work with stakeholders and residents to meaningfully design standard form contracts that are expressed in plain English and are easy to understand. The Bill establishes offences and penalties for operators who use contracts that are not in the prescribed form, for failing to give a copy of a residence contract to a resident, and for contracts that contain prohibited terms.

The Bill will introduce targeted reforms to improve prospective residents’ access to relevant and clear information to ensure they are supported to make fully informed choices about entering, living in and exiting retirement villages. The Bill will streamline pre-contractual disclosure by requiring village owners to provide a single ‘information statement’ in a form approved by the Director of Consumer Affairs Victoria. Information statements will be required to include key information about a village, including the identity of the owner and operator, and specified contractual and financial matters. Information statements will be provided to prospective residents, published on the operator’s website and must be updated at least annually.

The Bill also introduces a framework for annual contract checks to be provided by village operators to support residents’ ongoing understanding of retirement village payment models. Contract checks will be required to include information about any requirements the resident must follow when terminating a contract, selling a residence and leaving the village. During the annual contract check, operators will also be required to provide residents with a reasonable estimate of their exit entitlements and liabilities, the likely sale price for their unit or residence right and how much the resident would be likely to be paid out by the operator if they vacated the retirement village at the time of the check.

Promoting best practice in the operation of retirement villages

The Bill introduces for the first time overarching principles to be used to guide interpretation and clarify the objectives of the Act. These principles will apply to operators in the operation of a retirement village, and particularly when providing accommodation and services in the village, and also to residents when living in a retirement village. Principles include that all residents should be treated with dignity and respect, villages should be kept safe and maintained in treasonable repair and that residents should have quiet enjoyment of their premises in the retirement village.

The Bill introduces a mandatory Retirement Villages Code of Practice (the Code) to be prescribed in regulations. The Code will be developed by the Director of Consumer Affairs Victoria (CAV) and approved by the Minister for Consumer Affairs to enshrine mandatory professional conduct obligations and provide guidance for operators of retirement villages. Development of the Code will be subject to consultation with industry stakeholders, including representatives of retirement village proprietors, operators and residents. To ensure the Code remains fit for purpose, the Bill will introduce a mandatory three-year review period to ensure that it continues to be effective in a dynamic industry context.

The Bill will introduce a new framework for the granting of exemptions to retirement village operators from complying with the Act or from compliance with specific provisions within the Act. Further rigour is required to ensure that exemptions, where required, are valid and thoroughly justified by operators to support the operation of the retirement villages regulatory framework. The Bill introduces clear criteria that the Director of Consumer Affairs must consider before granting an exemption. These include the impact that an exemption would have on village residents and whether they would be disadvantaged if the exemption was granted. Residents will also have the right to make a submission to the Director on a proposed exemption before any exemption can be granted.

To further increase transparency for residents, operators will be required to notify the Director of Consumer Affairs of information that must be displayed on the public register of retirement villages about their village and ensure it is kept up to date.

To enhance the ongoing safety of residents in their homes, the Bill will amend the Act to require emergency and evacuation plans be developed for all villages. Currently, emergency and evacuation plans are not compulsory in Victoria and residents have reported that some villages do not have them in place. This is of particular concern for villages located in areas with a high fire or flood risk. The Bill ensures all retirement villages are prepared by requiring an emergency plan to include procedures for emergency response, evacuation, procedures for emergency services notification and medical treatment, and communication protocols. Operators will also be required to undertake annual safety inspection and evacuation exercises. Such reforms are particularly important as it will ensure that emergency planning appropriately reflects the diverse and developing needs of residents, such as wheelchair access, 24-hour vehicle access, and the use of other auxiliary aids.

Supporting residents to resolve disputes effectively, fairly and accessibly

The Bill will enhance internal dispute resolution processes in retirement villages to ensure fairness for residents to reach a resolution at the local village level and where possible, reduce escalation of disputes. Residents’ committees will also no longer have a role in mediating disputes between residents. Where a dispute cannot be resolved internally at a retirement village, it is essential that there are effective external dispute resolution processes to allow residents and operators to resolve disputes and promote harmony in a village.

The Bill supports residents and operators to resolve disputes through introduction of a free, fair and accessible alternative dispute resolution scheme to be located within the Department of Government Services. The Scheme will also be supported by a close connection with Consumer Affairs Victoria as the retirement villages industry regulator, enabling information sharing and appropriate and timely regulatory action. The Scheme will be funded through the Victorian Property Fund in accordance with the provisions of the Estates Agents Act 1980.

The dispute resolution scheme will operate in accordance with the Australian Government Benchmarks for Industry-based Customer Dispute Resolution, ensuring staff adhere to the principles of accessibility, independence, fairness, accountability, efficiency and effectiveness when providing dispute resolution services. The Director of Consumer Affairs will also be empowered to take appropriate regulatory action against operators who fail to uphold an agreement. If a dispute cannot be resolved through conciliation, parties will receive a certificate verifying their good faith participation in conciliation and providing recommendations to support parties to continue negotiations.

In some cases, disputes may arise between residents and retirement village operators that are highly complex or may have serious implications for the lives of residents. In those cases, it is appropriate that residents can seek binding and authoritative resolution through the VCAT Civil Claims List. The Bill will expand VCAT’s jurisdiction allowing it to hear and determine the most complex retirement village contractual disputes. The Bill will replace existing arrangements for contract terminations with new, clearer provisions enabling operators to terminate contracts either following a substantial breach of the contract by the resident, or for health and safety reasons.

One of the most common dispute types between residents and operators relates to repairs, maintenance and maintenance fees. The Bill clarifies maintenance responsibilities and provides for residents to have oversight of and accountability for increases in maintenance charges. The Bill also introduces new requirements for village operators to complete capital maintenance works within a reasonable timeframe, to report annually to residents on capital maintenance plans and to establish capital maintenance funds. Reforms will also prohibit operators from charging maintenance charges and optional (‘personal services’) charges after the resident has left the village.

Easier, timelier and fairer settlement when exiting a retirement village

The Bill clarifies requirements for operators to pay exit entitlements to residents within 12 months after the resident has delivered vacant possession. The Bill also contains provisions for departing non-owner residents who transition into aged care to receive aged care payments and for non-owner or owner residents to receive alternative accommodation payments from their village operator during any interim period between the resident vacating and the sale of their home or residence right in the village. This means that residents and their families can have certainty of their entitlement upon exit and will not be left out of pocket at the time they transition into aged care or alternative accommodation.

The Bill also clarifies how operators must calculate exit entitlement payments and introduces requirements for operators to disclose all relevant departure fees and calculations to residents at the time they are entering a village.

The Bill includes requirements for how ‘deferred management fees’ must be calculated – with reference to the resident’s entry payment and detail on how that fee will increase annually. It is common for deferred management fees to accrue annually, and the Bill requires this to be clearly stipulated. It is also common for operators to provide a cap on deferred management fees, for example, after a resident has resided in a property for 5 to 10 years, their fees may be capped at 20 to 40 per cent of their entry payment. This Bill does not intend to limit or interfere with this contractual practice. Further requirements for the calculation of deferred management fees may be stipulated in the regulations. The Bill will include a new prescribed standard form contract, to be designed in regulations, which will provide operators clarity on how to calculate and communicate fees and will provide residents a consistent and simple way to compare exit fees and entitlements.

The Bill clearly outlines capital gain or loss requirements including that a residence contract must not provide for an arrangement where capital losses are shared between residents and a village in a higher proportion than capital gains.

The Bill provides an option for vacating residents to make an agreement with operators to share in equal proportion the costs of any renovation or reinstatement to be undertaken at the end of a residency and the capital gains resulting from a sale. The Bill adds a requirement for operators and non-owner residents to complete and agree on a condition report at the commencement of residency, which is to be used to assess the dwelling’s condition at the end of a residency.

Enhancing the monitoring and enforcement role of Consumer Affairs Victoria

The Bill will provide the Director of Consumer Affairs with enhanced compliance and enforcement powers to address serious forms of financial harm and misconduct, as well as new powers to collect and share data, conduct research, and publish reports on retirement village disputes. This new centralised data collection function will help to inform compliance activity and future reviews of the Act. The Bill also introduces new offences for serious non-compliance and increases the penalties for some existing offences.

An operator will be required to provide the Director of Consumer Affairs with a report detailing the number and nature of management complaints or resident disputes in the previous year, the outcome of each complaint or dispute, any action taken to resolve the complaint or dispute, and any changes made or proposed to be made to address the issues arising. The Bill clarifies that the full range of enforcement powers for the Director of Consumer Affairs under the Australian Consumer Law and Fair Trading Act 2012 apply to the Retirement Villages Act.

It is critical that Victoria’s regulatory framework remains at the forefront of ensuring the retirement housing sector provides safe and secure housing for residents and supports residents to age well and in comfort. This Bill supports consistent good practice in the administration of retirement villages across Victoria and will better protect the rights of resident.

I commend the Bill to the house.

James NEWBURY (Brighton) (12:01): I move:

That the debate be adjourned.

Motion agreed to and debate adjourned.

Ordered that debate be adjourned for two weeks. Debate adjourned until Thursday 12 ‍December.