Armstrong v Kawana Island Retirement Village [2010] QCAT 703

CITATION: Armstrong v Kawana Island Retirement Village [2010] QCAT 703 PARTIES: Mr Les Armstrong v Kawana Island Retirement Village APPLICATION NUMBER: VH010-09 MATTER TYPE: Other civil dispute matters HEARING DATE: 26 July 2010 HEARD AT: Maroochydore DECISION OF: Ms Louise McDonald, Member DELIVERED ON: 25 August 2010 DELIVERED AT: Brisbane ORDERS MADE: 1. That the General Services Charge increase in line items pertaining to Administration; Audit fees; Cleaning; Salaries and Wages; Office Expenses; Miscellaneous Expenses in the Scheme Operator’s 2009/10 budget is invalid. 2. That the Respondent allow residents to vote separately on each s 106 item that has increased more than the CPI percentage increase for the purposes of determining the “total general services charges’’ in accordance with s 106(2). 3. That in the event that the budget is not passed, the Operator recalculate the general services charge subject to an offset amount (that being contributions the Operator has paid on behalf of residents by way of the funded deficit). 4. The parties have liberty to apply to the Tribunal for further orders in the event that they cannot agree on the offset amount under Order 3. CATCHWORDS: General Services Charges – Residence Contract Retirement Villages Act 1999, ss 106, 107 APPEARANCES and REPRESENTATION (if any): -- 1 of 14 -- 2 APPLICANT: Mr Les Armstrong RESPONDENT: Kawana Island Retirement Village represented by Christine Osgood REASONS FOR DECISION 1 ISSUES 1.1 The relevant facts in this application are not disputed. At issue is the interpretation of s 106 and the validity of the general service charge passed in the 2009/2010 budget where six line items within the budget for general services exceeded the CPI increase, and therefore required s 106 Special Resolution in order to pass the budget. Whether the process adopted to do this made the general services charge budget valid is the core issue in this dispute. 1.2 A Scheme Operator is only able to increase the total general services charge where increases are for items noted in s 107, or have been passed by Special Resolution at a Residents’ Meeting. The question posed by the current dispute is whether the Special Resolution in s 106 requires a Special Resolution for each line item in the General Services Charge or can these items be covered in one Special Resolution aggregating all items which increase in excess of CPI. 1.3 The Applicant submits that the resolution of 7 July 2009 did not operate to remove the six items from the total general services charge as within s 106(1) and therefore the Operator was not permitted to increase the general services charge under, and under s 107 are not required to pay the same. 1.4 Further he submitted that the Respondent purported to backdate the increase in the General Service Charge to 1July 2009, in breach of the Residence Contract. Clause 14.9 of the Residence Contract required general services charges to be payable by equal monthly instalments in advance. He submitted that the general services charge is not payable until the requirements are met, and this clause meant that any new charge would be payable one month after compliance with s 106 is met. 1.5 His written application pursued two other issues. The first was that the budgetted costs of the previous financial year rather than the actual cost was the incorrect basis for assessing the total of general services charges. The second was that the Respondent did not provide adequate information to enable the residents to properly consider the Resolution, or the increases in certain s 107 items. He sought, and was granted, leave to withdraw these two issues at the hearing. 1.6 The Respondent submitted that s 106 operates to require a Special Resolution on each operating cost that is increased in excess of CPI separately and individually for the purposes of determining the “total services charge” in accordance with s 106(2). Not withstanding this, the Special Resolution of 7 July was not invalid because it was implicit that -- 2 of 14 -- 3 approval was obtained for the increase in charges in each of the Operating Costs included in the resolution as if there was objection to a particular Operating Costs, the resident was entitled to reject the resolution. The Respondent submitted that this option was evident in the outcome wherein 71 residents voted in favour of the resolution while 11 were against and five abstained. The Respondent indicated that they did not oppose another vote on the issue if the Tribunal interpreted s 106 in terms argued by the Applicant. 1.7 The Respondent further submitted that it was not in breach of the residence contract having given the Applicant was given one month notice of increase in general service charge and that the Applicant was liable to pay these charges by virtue of the Special Resolution on 7 July 2009. 2 STATUTORY PROVISIONS 2.1 Sections 106 and 106 set out how increases may be made to the general services charge and the basis of residential responsibility for payment of increased general services charges. 106 Increasing charges for general services (1) A Scheme operator must not increase the total of general services charges for a retirement village for a financial year by more than the CPI percentage increase for the financial year. Maximum penalty--200 penalty units. (2) In this section-- CPI means the all groups consumer price index for Brisbane published by the Australian statistician. CPI percentage increase, for a financial year, means the percentage increase between-- (a) the CPI published for the quarter ending immediately before the start of the financial year; and (b) the CPI published for the quarter ending immediately before the end of the financial year. total of general services charges, for a financial year, means the sum of all charges for general services for the financial year, other than the following charges-- (a) a charge for a general service that has been increased by more than the CPI percentage increase for the financial year and that the retirement village residents, by special resolution at a residents meeting, have approved; (b) a charge for a general service that has been increased by more than the CPI percentage increase for the financial year and that is allowed under section 107. s107 Resident's responsibility for paying increased general services charge A resident is not required to pay a charge for a general service under a residence contract to the extent that the charge is more than that payable under the contract and increased under section 106, unless the excess is attributable to an increase in-- -- 3 of 14 -- 4 (a) rates, taxes or charges levied under an Act in relation to the retirement village land or its use; or (b) the salary or wages of a person engaged in the retirement village's operation and payable under an award, certified agreement, enterprise flexibility agreement, industrial agreement, Queensland workplace agreement or other industrial agreement made, approved, certified, or continued in force under-- (i) the Industrial Relations Act 1999; or (ii) a Commonwealth Act; or (c) insurance premiums, or insurance excesses paid, in relation to the retirement village or its use; or (d) maintenance reserve fund contributions. 2.2 The tribunal is empowered to make orders under s 191 of the Retirement Villages Act 1999: 191 Tribunal orders generally (1) The tribunal may make the orders the tribunal considers to be just to resolve a retirement village issue. (2) For example, the tribunal may make any 1 or more of the following orders-- (a) an order for a party to the issue to do, or not to do, anything (an enforcement order); (b) an order requiring a party to the issue to pay an amount (including an amount of compensation) to a specified person (a payment order); (c) an order that a party to the issue is not required to pay an amount to a specified person; (d) if the issue is a retirement village dispute-- (i) an order setting aside the mediation agreement between the parties to the dispute; or (ii) an order giving effect to a settlement agreed on by the parties to the dispute. (3) An order may specify a time for compliance with it. (4) Without limiting subsection (1), this section applies if a resident applies for a tribunal order under section 169, 170 or 171. 3 FACTS 3.1 The relevant facts are: 3.2 On 27 May 2009 the Scheme Operator issued a notice to all residents advising of the Statement of Annual Proposed Expenditure for the 2009/2010 financial year. This letter advised of a proposed increase in the general services charge referred to as their “general services charge”. The letter advised that the budget would be presented at a meeting on 17 June 2009. 3.3 On 1 June 2009 Mr Trestrail, Chairman of the Residents Committee provided a notice to all residents which encouraged the passing of the budget. Specifically he stated “The proposed General Service Charge seems modest… some people say we should oppose the budget but -- 4 of 14 -- 5 there would seem to (sic) little on which to base any opposition or to demand a vote on it.” 3.4 The parties agree that increase in the six line items noted in paragraph 3.5 in the general services budget exceeded the CPI of 3.1%. 3.5 On 13 June 2009 the Operator sent a letter to the Residents Committee advising a Special Resolution was to be put in terms: “That the increases in excess of CPI of the following Operating Costs be approved for the financial year 2009/10: Operating Cost Budget Amount Administration Expenses $43,383 Audit fees $1600 Cleaning $3620 Salaries and Wages $237,704 Office Expenses $18,930 Miscellaneous Expenses $7,300”. 3.6 On 14 June 2009 the Scheme Operator advised the Residents Committee that a separate Special Resolution was required for each line item. 3.7 On 15 June 2009 the Residents Committee met and a special meeting of the residents was agreed to be held on 7 July 2009 to approve a Special Resolution in different terms to that proposed by the Operator: specifically: “That the increase in excess of CPI following the Operating Costs be approved for the financial year 2009/10 subject to the Scheme Operator making a contribution to cover the full amount of the deficit so that we can achieve a balanced budget: Administration Expenses $43,383 Audit fees $1600 Cleaning $3620 Salaries and Wages $237,704 Office Expenses $18,930 Miscellaneous Expenses $7,300”. 3.8 On 25 June 2009 the Operator wrote to the residents advising that they were required to have a Special Resolution for each individual service charge that exceeds CPI Increase, and stated that the meeting to do this was scheduled on 17 July 2009 in order to comply with the written notice periods specified in the Act. Included with this letter was a notice of the Special Resolutions to be put and residents were asked to vote as a separate Special Resolution for each line item. 3.9 During early July a notice in the following terms was distributed by the Residents Committee: -- 5 of 14 -- 6 “Special Meeting 7 July 2009 at 10 am. To clarify any confusion and contrary to the notice from Living Choice the committee has not cancelled the above meeting which will go ahead as planned.” 3.10 On 7 July 2009 the Special Meeting of the residents approved the Special Resolution in the terms proposed at paragraph. Seventy-one voted in favour, 11 against and 5 abstained. The Chairman advised the Operator by way of letter of 8 July 2010 that there was no need to hold a further meeting proposed for the 17 July 2009. 3.11 On 8 July 2010 the Scheme Operator sought legal advice and was advised that although the Act contemplated a separate Special Resolution for each item, the Special Resolution was not invalid, as it was implicit that approval was obtained for each of the Operating Costs proposed within the budget. On the basis of this advice, the Scheme Operator cancelled the Special Meeting proposed for the 17 July and advised the residents of this via correspondence of 10 July 2009. 3.12 Consequent to this a number of letters were received from residents, refusing to pay the increased general services charge, given a non compliance with s 106. 3.13 In his evidence to the Tribunal, Chairman, Ray Trestrail stated that residents had been confused by the two special meetings. He believed that it was for the residents to call and decide issues in a budget, where there was danger that the Operator may appear to be manipulating the budget. He had undertaken the necessary enquires, and believed that it was permissible to move the Special Resolution as a collective of the aggregate items. He noted that the Retirement Queensland Newsletter of July 2009 gave guidance which suggested one resolution was necessary for multiple items. He indicated that the residents did not want to be tied down in extensive budget discussions, but wanted to “pass the budget and get on with it”. They were not interested in legal discussion. He indicated that in his view there was objection amongst the residents to a further meeting being called so close together, and he considered that had a second meeting been held the motions would not have been likely to have passed due to the resentment at having to deal with the issue again. 3.14 He commented that it would be horrifying if the deficit was to be carried forward and the result would be a reduction of services. He stated that the general consensus amongst residents is that there are insufficient services, and they particularly do not want to lose staff. 3.15 He noted that the line by line resolutions in 2009/10 year's special meeting wherein the budget was passed despite some large increases, demonstrated that a had a line by line approach been taken in 2009/10, in his view, there would have been little difference in the outcome. 3.16 It would appear from the events that transpired that the residents group had an underlying political opposition to the proposed meeting by the Scheme Operator, and sought to hold their ground by continuing with the -- 6 of 14 -- 7 meeting irrespective of the clear indications from the Operator that the motion should be moved as separate resolutions for each item. It would appear that the residents resented the intervention in what they deemed to be a resident issue, and stubbornly held their position to continue with the motion that had been moved. Mr Trestrail indicated that the notice of the special meeting convened by the residents preceded that planned to be convened by the Operator. 3.17 I think it can be seen that the Operator made attempts to comply with the Act’s requirements, but had difficulty because of the idiosyncrasies of resident / Operator politics in practically achieving that outcome, and abandoned the issue once they had legal advice that the resolution was not invalid, making another Special Meeting pointless. 4 DISCUSSION ISSUE 1: Did the Special Resolution of the Residents Committee conducted on 7 July 2010 which posed line items of the budget as a collective satisfy the requirements of s 106? 4.1 The Applicant argued that the resolution of 7 July 2009 did not operate to remove the six items from the total general services charge within s 106(1) and therefore was not permitted to increase the general services charge, and under s 107 are not required to pay the same. 4.2 Although a valid motion was validly passed in terms of procedural requirements pertaining to special residents’ meetings, it did not remove the six line items from the “total services charge” for the purpose of s 106(1) because it did not satisfy the requirements of paragraph (a) of the definition in s 106(2) which contemplates a Special Resolution for each line item. 4.3 Under s 106(2) total of general services charges excludes a charge for a general service that has been approved by a Special Resolution at a residents’ meeting, meaning that an approved item can be increased by more than CPI. The Applicant’s submission suggests that the reference to the singular nature of a charge implies it is requirement for the Special Resolution to posed for each item which exceeds the CPI or a separate Special Resolution. 4.4 The total general services charge, being the sum of all general services charges for the financial year does not include a charge for a general service that has been increased by more than the CPI percentage increase for the financial year and that the retirement village residents, by Special Resolution at a residents meeting have approved. 4.5 The Applicant submitted that the reference to the singular charge refers to a resolution for each charge is necessary to constitute approval of the charge by the residents. -- 7 of 14 -- 8 4.6 He referred to Tew & Kelly v Masonic Care [2008] CCT VH005-08 at paragraph 31 which specifically noted that the Act had been amended to contemplate resolutions on a line by line basis. 4.7 He argued that because a resolution which covered multiple charges could have the effect of the resident who opposed one of the charges losing all of the services under s 73. The Respondent argues that the provisions of s 73 have a cumulative effect and the Operator must be seen to have acted reasonably in the circumstances. 4.8 Certainly s 73 operates to not require the provision of services that have not been approved and this may influence voting in this regard. There is a real risk of disincentive to voting against. 4.9 Added to this consideration, it was apparent from that correspondence from the Chairman prior to the meeting raised the possibility of this occurring. 4.10 The chairman’s report of 1 June 2009 states: “Some people may state that we should oppose the budget but there is little on which to base any opposition or demand a vote on it. We must always bear in mind that if the operator does not cover the deficit we will have a vastly diminished service or pay an additional $100 (minimum) extra in monthly levies.” 4.11 I note correspondence identifying the residents’ objection to paying the increased general services charge following the meeting, included references to the impact of the Chairman’s representations during the meeting. 4.12 Correspondence from Derek and Katherine Smith dated 13 July 2009 suggested that they deemed statements made by the chairman (that a no vote would mean an immediate withdrawal of the budget subsidy) as “blackmail” and felt that some may have been influenced by this. 4.13 Further, the Applicant’s letter to the Operator of 16 July 2009 objecting to payment of the general services charge increase, stated: “You should also be aware that during the presentation of the motion the meeting was advised that a no vote would result in the Operator removing the subsidy thus increasing monthly levies by approximately $112. Consequently many residents voted with their wallets rather than their intellect.” 4.14 These communications are relevant considerations potentially influencing the outcome of the aggregate Special Resolution of 7 July 2009. 4.15 The Former Commercial and Consumer Tribunal has commented on the interpretation of s 106(2) in Tew & Kelly v Masonic Care Queensland -- 8 of 14 -- 9 [2008] QCCT VH005-081 clearly interpreting section 106, as amended, requires that s 106 items be separately identified in a Proposed Special Resolution. “It is not possible for residents to assess whether a budget complies with section 106 as amended unless items that have increased more than by CPI in accordance with s107 are separately identified from this that may require a separate resolution under s 106. A Section 106 as amended does not require a Special Resolution to approve any increase in the total of the charges instead it contemplates any such resolutions being on an item by item basis( s106 2(a).” 4.16 The earlier case of Phillips v Prime CRS Pty Ltd and Eden lea Retirement Village Pty Ltd (2004) QCCT V001-04 was decided before s 106 was amended by the Retirement Villages Amendment Act 2006. Although the wording is considerably different it is relevant to consider the deliberations on the legislative intent of the provision in light of the subsequent amendments. 4.17 In Phillips (04) the Tribunal expressly rejected the earlier consistent approach of the Retirement Villages Tribunal in the cases of Schintler v Chancellor Park Retirement Village Pty Ltd (2001) V001-04; Phillip Phillips and Ors v Eden Lea Retirement Village Pty Ltd (2002) QRVT3 and Carr and ors v Chancellor Park Retirement Village (2002) QVRT1. These cases found that s 106 imposed a cap on the aggregate general services charge, rather than its component parts. 4.18 In Schintler’s case, the Tribunal stated at paragraph 56: “Sections 106 and s 107 by implication require Operators to increase their budgets in such a way that will separately identify percentage increases in the uncapped items in s 107 and the percentage increases in the capped items in s 106 so where the latter exceed CPI, residents approval is required and obtained”. 4.19 In Phillips (2004) the CCT referred to the 2001 case of Schintler and stated while it could be implied from the Schintler comments that the CPI cap applied to percentage increases in individual items, the comments in the Phillips (2002) case specifically state that subsection 106(2) “imposes a CPI cap on the General Services Charge and not its component parts.” They refused to follow this approach. 4.20 The CCT in Phillips expressly rejected the concept that the reference to a singular general service charge under the former legislation referred to the aggregate charge, but the general services charge referred to individual or particular charges. 4.21 The legislation since these decisions has been amended and a reference to a general services charge being approved by Special Resolution appears to respond to the contradictory interpretations to the wording of the former provision. 1 Paragraph 31. -- 9 of 14 -- 10 4.22 A comparison of the earlier provision and the amended s 106 would suggest that it was the intention of parliament to clarify the confusion about the nature of the approval needed, consistent with the interpretation in Phillips (2004). 4.23 The interpretation in Tew, following the amendment is also consistent with this reading. 4.24 Secondary sources may assist with considering legislative intent. 4.25 The Explanatory Memorandum to the Retirement Villages Amendment Act 1996 states that the amending provision clause 46 of the Amending Act, the new s 106 “clarifies how general services may be increased. The concept of “total general services Charges is introduced, meaning the sum of all general services charges for the year, except charges above CPI that have increased due to a Special Resolution or which fall within s 107. The total of general services charges must not be increased above the CPI percentage for the year- in other words; the CPI percentage increase is applied to the total of general services charges instead of calculating CPI percentage increases for individual service charges. The total of general services charges as increased as a whole by applying the CPI, is then added to general services charges which have been validly increased above CPI to give a grand total of general services charges for the year.” 4.26 This is of limited assistance in interpreting whether they have been validly increased. 4.27 The Second Reading Speech of the Retirement Villages Amendment Bill 2006 identified consumer protection as a major object of the Act, and the introduction of greater involvement in the village budget setting process, with stricter guidelines for the increase in fees. “… the Bill provides certainty for residents in terms of their financial obligations, and brings greater transparency, consistency and accountability to Operators budgeting decisions. The Bill prescribes that there will be two primary objects of the Act the first being consumer protection and the second the continued viability of the retirement village industry. This will ensure that these key matters are taken into account in how provisions of the act are to be interpretation the future.” 4.28 The provision, amended by this Act, therefore needs to be read in light of the two primary objects of consumer protection and continued viability of the industry. It can be seen that the amendments were intended to bring greater certainty for residents in terms of their financial obligations and greater transparency and accountability. -- 10 of 14 -- 11 4.29 With this in mind, the intent is clear that a Special Resolution for each line by line item was necessary to take the charges out of the total general services charges, and it has not done so. 4.30 Consequently the charges fall within the total general services that are increased outside of s 106(a) and therefore not permitted increases within s 106(1). 4.31 The Tribunal has discretion under s 191 to make orders it considers just to resolve the dispute. The Operator has at all times acted reasonably to collaborate with the residents and has funded the deficit in the general services charges budget. Further, it is apparent that the Operator made attempts to comply with these processes but was undermined in this attempt by the residents group itself. The passage of the aggregate Special Resolution of the 7 July 2009 was carried with large vote in favour. Given these factors, it is not appropriate that the Tribunal order that monies are repaid without the opportunity for compliance. It is also noted that the 2009/10 budget vote ensured special resolutions for each item in excess of CPI were moved, whereupon significant increases were accepted by the residents, and the budget passed. 4.32 In the Tribunal’s view a fresh vote should occur with whereupon six separate Special Resolutions are made for each of these six individual items. In the event that items are not passed, the Operator should recalculate the levy and refund the difference to residents subject to allowance for the deficit funded by the Operator in the 2009/10 financial year. The parties have liberty to apply where this offset amount cannot be agreed between the parties. ISSUE 2 WHEN ANY INCREASE SHOULD BE PAID: CAN IT BE BACKDATED? 4.33 The Applicant argues that the budget presenting notice of the increase in general services charge was invalid and not payable because of non compliance with s 106. He submitted that any new general services charge is payable on month after compliance is achieved because of the wording of 14.9 of the General Services Charge. 4.34 Clause 14.9 reads: “How is the General Services Contract Payable? The General Services Charge is payable by equal monthly instalments in advance as described in Clause 14.9. We will notify you in writing of the monthly instalments and any changes to them when we give you the Operating Costs budget for each financial year and any budget changes. We must give you at least one month’s notice if we want to change to [sic] your instalments during a financial year. “ -- 11 of 14 -- 12 The Applicant submitted that this provision meant that any general services charge assessed under a compliant budget would be inconsistent because it would charge in arrears from July 2009, but can only be charged in advance. In this case, from one month in advance of compliance in August 2010, therefore charges from September 2010. 4.35 He submitted that the notice requirement applies before the financial year and if there are changes during which would occur where a budget is non compliant. He considered the rationale behind this was for certainty in residents’ financial planning and budgeting to meet their costs. 4.36 He argued that even if the responded had a compliant budget, soon the basis of the Special Resolution passed on the 7 July 2009, then that was the first date that the general services charge could have been fixed by virtue of clause 14.9, could be payable from 7 August 2009. He considered that the general services charge should be refunded where it is in breach of cl 14.9. 4.37 The Respondent submits that it has provided the notice within the necessary notice of increase in general services charge by way of the budget and letter advising of the general services charge increase on 26 May 2009. 4.38 They submit that the effect of clause 14.9 is that one month’s notice must be given if there are changes during the financial year by way of a secondary adjustment to the general services charge after it has been set and in effect. This was permissible by virtue of cl 14.9 of the Contract which provides: “[b]efore each financial year we will prepare a budget of Operating Costs. And the Amount to be into the maintenance Reserve Fund. During the financial year we may revise the budget to take into account changes in the Operating Costs.” 4.39 They further submitted that the Operating Costs was intrinsically linked with the general service charge, evidenced in clause 14.1 and that they were calculated as a single process. “Cl 14.1. The General Services Charge is the amount you must pay us each financial year as a contribution to the Operating Costs and maintenance reserve fund.” 4.40 The Applicant argues that where equally monthly instalments in advance are contemplated by clause 14.9, secondary adjustments are not applicable. 4.41 He further argues this is supported by s 102A which requires a budget (the general services charge budget for charges for the financial year.), and s 102A(2)(b) fix the amount to be raised. He argued that therefore this reference to a change in the instalment could therefore only apply where a noncompliant budget was delivered. In such circumstances, a revised charge based on a valid Special Resolution passed a budget -- 12 of 14 -- 13 during the financial year, required one month notice in advance of change under the Residence Contract. 4.42 Although the notice of the increase in the general services charge was given on 26 May 2009 and operated on the basis that this had been validly increased by the Special Resolution of 7 July 2009, it was not a valid budget. 4.43 The Tribunal considers clause 14.9 contemplates that the notice of the general services charge will be given when the Operator gives residents the operating costs budget for each financial year and any budget changes. This relates to changes from the previous budget. Changes during the financial year require a monthly advance notice. The Tribunal accepts the submission that s 102A, in light of the consumer protection objectives of the Act does not allow for a secondary adjustment of the general services charge. 4.44 The Tribunal accepts the Applicant’s submission to this extent. 4.45 However, the change brought about be a compliant budget in this case is not a change that the Operator “wishes to make” under clause 14.9, but one potentially imposed upon them as a result of the current dispute. The Tribunal considers that the advance notice with reference to change during a financial year that the Operator wishes to make represents a drafting error due to the misunderstanding of the effect of 102A, with respect to secondary adjustments. 4.46 The residents were notified of the proposed increase well in advance of a month before the financial year, and the general services charge has been raised within the requirements of clause 14.9. The general services charge was payable from 1 July 2009. 4.47 The Tribunal does not consider that the earliest date for payment is one month from actual compliance. This matter was subject to an application on 11 October 2009, several months after the charge was voted upon by the residents. The Operator was under the misapprehension, based on legal advice that not invalid. Notice of the proposed general services charge was given one month in advance of the implemented change. This was sufficient to afford certainty in residents’ budgeting, irrespective of compliance. In light of the objectives of the Act being also the ongoing viability of the retirement industry, the Operator’s need for certainty in the budget is an important consideration. 5 CONCLUSION 5.1 Although the increase in the six items of in the general services charge in the 2009/10 budget was invalid, in circumstances where the Operator made attempts to collaborate with the residents to ensure validity, and was obstructed in the meeting proposed for 17 July 2009 to do so, and the budget was passed with a large majority, it is not appropriate that the respondent be ordered to repay the invalid amount, without an opportunity for compliance. -- 13 of 14 -- 14 5.2 A further opportunity to gain compliance is to be afforded by way of a re- vote on the budgetary items in excess of CPI in the 2009/10 financial year. The levy is to be recalculated based on this vote, if any items are not passed, and excess repaid to the residents, subject to an allowance for the deficit funded by the Operator. -- 14 of 14 --