Cummings & Ors v The Uniting Church in Australia Property Trust (Q) t/as Blue Care [2020] QCAT 424

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Cummings & Ors v The Uniting Church in Australia Property Trust (Q) t/as Blue Care [2020] QCAT 424 PARTIES: SUSAN CUMMINGS DENYSE ALLSOP LANCE KIRKMAN (applicants) v THE UNITING CHURCH IN AUSTRALIA PROPERTY TRUST (Q) TRADING AS BLUE CARE (respondent) APPLICATION NO/S: OCL034-20 MATTER TYPE: Other civil dispute matters DELIVERED ON: 12 November 2020 HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Member Cranwell ORDERS: The application is dismissed. CATCHWORDS: REAL PROPERTY – RETIREMENT VILLAGES – where audited financial statements differ from budget – where surplus higher than forecast – whether budget is required to be revised – whether residents entitled to reduction in fees or refund Retirement Villages Act 1999 (Qld), s 102A, s 113 Ash v Australian Retirement Homes Ltd [2013] QCATA 89 Australian Retirement Villages v Ash [2013] QCA 355 REPRESENTATION: Applicant: Self-represented Respondent: Self-represented APPEARANCES: This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) -- 1 of 3 -- 2 REASONS FOR DECISION [1] The applicants are residents of Carlyle Gardens (Mackay), a retirement village operated by the respondent. [2] Carlyle Gardens (Mackay) appears to have been performing better than expected financially. According to the applicants, the budgeted surplus for the 2018/2019 financial was $45,202. The audited surplus for the same financial year was $126,866. The applicants would like the difference between these two amounts, being $81,664, distributed to them in one form or another. The applicants have variously sought a reduction in their fees for balance of the 2019/2020 financial year or a lump sum refund. [3] The applicants rely on s 102A(7) of the Retirement Villages Act 1999 (Qld) (‘the Act’), which provides: At the end of a financial year for which a general services charge budget is adopted, any surplus or deficit in the fund must be carried forward and taken into account in adopting the general services charge budget for the next financial year. [4] The applicants’ argument is superficially attractive in isolation, but ignores the broader statutory context relating to the preparation of retirement village budgets. In particular, regard must be had to the preceding subsections of s 102A of the Act: (1) The scheme operator must adopt a budget (the general services charge budget) for each financial year for the general services charges fund. (2) The budget must be in the approved form. … (3) The general services charge budget must— (a) allow for raising a reasonable amount to provide the general services for the financial year; and (b) fix the amount to be raised by way of contribution to cover the amount. (4) The residents committee may, by written notice given to the scheme operator, ask the scheme operator to give the residents committee a copy of the draft general services charge budget for the financial year at least 14 days before the beginning of the financial year. (5) The notice must be given at least 28 days before the beginning of the financial year. (6) The scheme operator must comply with the notice. [5] In other words, the respondent is required to adopt a budget for each financial year commencing on 1 July. Upon receiving request by 2 June, a draft budget is to be given to the residents’ committee by 16 June. [6] On the other hand, s 113 of the Act provides that audited financial statements are not required to be given to residents until five months after the end of each financial year. In other words, the audited financial statements are due by 30 November of each year. -- 2 of 3 -- 3 [7] It is tolerably clear that the Act requires the budget for a next financial year to be prepared before the audited accounts for the previous financial year are available. Therefore, it was neither required nor possible for the respondent to have regard to the audited surplus from the 2018/2019 financial year for the purposes of preparing the budget for the 2019/2020 financial year. [8] The requirement to prepare a budget before audited financial statements are available is unremarkable. As Gotterson JA observed in Australian Retirement Villages v Ash [2013] QCA 355 at [41]: In ordinary usage, the word “budget” means an estimate of revenue and expenditure of an organisation. [emphasis added] [9] Had the Parliament intended for the contributions in the budget to be fixed on the basis of audited financial statements, it would have adopted different timeframes for the preparation of the budget and the audited financial statements. [10] The various forms of relief formulated by the applicants all have the substantive effect of altering their contributions fixed in the budget for the 2019/2020. I do not consider that any of these forms of relief are open to the applicants. As Judicial Member Thomas AM QC observed in Ash v Australian Retirement Homes Ltd [2013] QCATA 89 at [39]: It would seem that only one budget is contemplated for each financial year. The prospect of an amended or supplementary budget would seem to be ruled out by the requirement that a draft of the budget be supplied to residents at least 14 days before the commencement of the financial year. [11] Even if this statement is incorrect, there is no statutory obligation on the respondent to issue a revised budget following the availability of the audited financial statements. To require a budget to be revised to reflect changes in individual line items as further information becomes available during the course of a financial year would fail to have proper regard to the character of the budget as an estimate. [12] The application is dismissed. -- 3 of 3 --