On 13 March 2014, the Western Australia Supreme Court delivered its decision of Swancare Group Inc v Commissioner for Consumer Protection  WASC 80.
The case focused on s 15 of the Retirement Villages Act 1992(RV Act) and also considered whether a memorial may be corrected pursuant to s 188(3) of the Transfer of Land Act 1893(WA) (TL Act).
Swancare Group Inc (Swancare) owns land in Bentley (Bentley Land) and Carlisle (Carlisle Land). The Bentley Land and the Carlisle Land are the subject of one memorial lodged pursuant to s 15 of the RV Act.
In the past, the Bentley Land and the Carlisle Land were used for the purposes of separate retirement village schemes. Swancare no longer uses the Carlisle Land for a retirement village.
Swancare wants to remove the memorial from the Carlisle Land, whilst leaving the memorial in place for the Bentley Land.
The Court considered whether there was a retirement village on the Bentley Land and the Carlisle Land at the time the memorial was lodged and whether there was one or more retirement village schemes in regard to the Bentley Land and the Carlisle Land.
The definitions of a “retirement village” and “retirement village scheme” were considered.
Was there one or more “retirement villages”?
The court held that the definition of a “retirement village” makes it clear a complex of residential premises may constitute a retirement village even if the units in the retirement village are not (yet) occupied under, or used for, a retirement village scheme provided that the complex is intended for occupation under, or for use for or in connection with, a retirement village scheme.
At all times Swancare’s management and control treated the complex on the Bentley Land and the complex on the Carlisle Land as separate and distinct retirement villages and each retirement village had separate financial management, separate budgets, their own social clubs and own resident committees.
The court held that there were two separate retirement villages, one on the Carlisle Land and one on the Bentley Land.
Was there one or more “retirement village schemes”?
The court referred to the Hollywood decision1, when considering the meaning of “retirement village scheme” as a programme of action or plan or policy concerning the use of residential premises, which has three elements namely:
- the scheme is established for retired purposes or predominantly retired persons;
- that it pertains to the occupation of residential premises, which may be of a wide variety and which may be occupied pursuant to a wide variety of legal arrangements; and
- that at least one resident or prospective resident must pay a premium in consideration for or in contemplation of, admission as a resident under the scheme.
Even though the Carlisle Land qualified as a retirement village and satisfied the elements of a retirement village in the past, the current position was that no resident of the Carlisle Land had paid a premium for admission to the Carlisle village.
Swancare had redeveloped the Carlisle Land as a strata title development and entered into contracts to sell the proposed strata lots.
The court approved the termination of the Carlisle scheme. In doing so it considered s 22 of the RV Act. Under s 22 of the RV Act, the court clearly has discretion as to whether to approve the termination of the retirement village scheme but with such orders as the court thinks necessary to protect the interests of existing residents. However, because the current position was that there were no existing residents at the Carlisle Land who had been admitted to occupation under the scheme, there were no residents that required protection.
The court considered that to refuse approval to terminate the Carlisle scheme would have a likely adverse financial impact on Swancare in that it held property which was proved not attractive to retired persons, yet be unable to meet its contractual obligations to the purchasers of the proposed strata lots on the Carlisle Land.
The court did not accept that s 22(3) of the RV Act would permit the court to make orders requiring the rectification of the memorial. The removal of the memorial under s 15(8) of the RV Act is the necessary step to achieve this objective.
The RV Act does not permit a single memorial to be lodged in respect of different parcels of lands used for different retirement villages. The court reached the view that s 15(3) of the RV Act requires a memorial to be lodged whenever land is, or is proposed to be, used for the purposes of “a retirement village” and that should be understood to mean a “single retirement village”.
The Court held that having regard to s 15(3) of the RV Act:
- the memorial was incorrect because it referred to a single retirement village when in fact there were two retirement villages; and
- one memorial should have been lodged for each separate retirement village.
Therefore the memorial was incorrect in referring to more than one retirement village scheme and the appropriate means for correcting the memorial lies in the use of the power in s 188 of the TL Act. Section 188 of the TL Act provides that the Registrar may correct errors in the register upon direction of the Commissioner of Titles.
The court held that the memorial is an instrument that was incorrect and is liable to correction pursuant to s 188(3).
Retirement village owners may terminate a retirement village scheme when the owner of the land stops implementing the retirement village scheme (ie. a programme of action or plan or policy which involves all three elements of the definition of a retirement village scheme). It is only necessary to obtain the approval of the court for termination of a retirement village scheme if a resident admitted to occupation of residential premises under the retirement village scheme remains in occupation.
Retirement village owners should be aware that one memorial should be lodged in respect of the land in each separate retirement village, rather than using one memorial for a number of retirement villages over a number of parcels of land.