Smith Murray: Retirement Villages Bill — Second Reading 
Smith Murray: Retirement Villages Bill — Second Reading 
[Volume:609;Page:7023] 
MURRAY SMITH (United Future) 
: Jackson Mews is a small retirement village located in Petone. It comprises 34 units all of which are unit-titled and in individual ownership. The village was created in 1994 by one John Gilbert effectively as a retirement fund. His company Jackson Mews Management Ltd is appointed under the terms of an encumbrance that he as manager put on all the titles for a period of 40 years. It is secured by the encumbrance and all residents and new purchasers must sign up to that contract which gives him the exclusive right to manage the village. 
In return for that right which residents pay $3000 per year for John Gilbert receives $94000 per annum from the village. In order to justify that he provides—or is meant to provide—a 24-hour personal paging service by a resident manager the maintenance and upkeep of the exteriors and common areas the collection of prescriptions for the elderly people who occupy the village the payment of rates for a few of the units and the payment of the insurance. My calculations are that after employing the manager at $31000—and I must say that $10500 of that goes back to Mr Gilbert by way of rental for the unit that the manager occupies but I will leave that aside—the village costs Mr Gilbert $44000 a year leaving a profit of $50000 a year from the residents for the convenience of having him oversee the village. 
 The residents accept that; they have gone into the village with their eyes open. Many are elderly and need the personal paging service that Mr Gilbert provides. If Mr Gilbert’s company was faithfully fulfilling the agreement there would be no problem; the difficulty is that it does not. The residents have a list of complaints of inadequacies in Mr Gilbert’s fulfilling of his side of the bargain: a lack of maintenance a lack of mowing of lawns the failure to replace plants and bark although that was promised 2 years ago no maintenance schedule to cover exterior painting or clearing of gutters—all of which are overdue—the failure to pay for repairs caused by leaking windows and water tanks the lack of coverage for the resident caretaker when he is absent by way of illness or holidays the investment of some of the corporate body funds in Jackson Mews Management Ltd without authority and a failure to provide audited accounts. 
The residents have long tried to contact Mr Gilbert and lay their complaints; they have written to him and tried to get some answers. Mr Gilbert is a hard-headed businessman. The complaints of the residents are that he has bullied and threatened elderly residents and has refused to answer their correspondence. One of them described John Gilbert at a meeting 2 weeks ago by saying he walks all over them and does as he pleases. They have tried to sue him but there is an arbitration provision that requires it to go to arbitration and when they did that the arbitration was drawn out. There was a dispute as to whether the body corporate’s disputes were different from the residents’ disputes and the outcome of the arbitration was that they had to be separated. The costs to the residents meant that they simply could not afford to pursue the matter. 
The manager has taken Mr Gilbert to the Employment Relations Authority because I understand that he is owed $7000 that has not been paid. He has recently gone into hospital for a spinal operation that needed 3 days in hospital for the operation and 5 to 6 weeks for his convalescence. 
In his conversations with the manager Mr Gilbert refused to accept that the manager should be off work for more than the 3 days in hospital but now having taken some advice the manager has told Mr Gilbert that he must be off work for 5 to 6 weeks. Currently there are difficulties in having the manager’s position filled while he is away. 
How will this bill help the Jackson Mews residents? In a number of ways they will be extremely helped by this legislation. Firstly a statutory supervisor will have to be appointed. Under clause 37 the statutory supervisor will be appointed at the expense of Jackson Mews Management Ltd to look after the interests of the residents and to ensure under clause 38 that the financial position of the retirement village remains secure. The statutory supervisor will report annually to the Registrar of Companies and to the residents on the performance of the operator’s duties and exercise of its powers. The statutory supervisor will perform any other duties imposed by the legislation. The statutory supervisor will have considerable powers. If he or she believes that the financial position of the retirement village the security of the interests of the residents or notably the management of the retirement village is inadequate the statutory supervisor may direct the operator to supply all residents with information that he or she may specify. The statutory supervisor may direct the operator to operate the retirement village in a specified manner or he or she could apply to the court under section 49 of the Securities Act which could lead to the putting of the retirement village into receivership or management or to the imposing of restrictions. 
So the statutory supervisor has considerable power to step in where there is a situation like the example I have given to ensure that the residents of the village receive the services they have contracted to receive. I am pleased to say that effectively the costs of the statutory supervisor with regard to Jackson Mews will not be passed on to the residents. Under the terms of the contract the operator is entitled only to a consumer price index increase each year so any costs of the statutory supervisor will come off the $50000 that John Gilbert is pocketing each year. 
Secondly there is a complaints facility provided in the bill. Mr Gilbert will have to have somebody who can respond to complaints and if that person does not respond within 20 working days after a dispute notice is provided then the operator will have to provide a panel of one or more independent persons who have been sanctioned by the Office for Senior Citizens to resolve the complaints. Again that is at the operator’s expense—in the case of Jackson Mews Mr Gilbert. There is provision for hearings before the disputes panel and it has a wide power to make orders. The operator is responsible for meeting all the costs incurred under clause 53 and even for costs incurred in resolving disputes between residents. 
I plan to introduce a Supplementary Order Paper during the Committee stage of the debate on this bill to strengthen the statutory supervisor’s responsibilities even more. It seems to me that the statutory supervisor should be notified where there is a dispute that affects a significant number of residents or the general operation of the retirement village where the outcome may affect the rights and obligations of the operator under the deed of supervision that he has with the statutory supervisor or where there is a dispute concerning the disposal of a residential unit. I think those strengths are necessary so that the statutory supervisor is well aware of what is happening in a village particularly in so far as the residents’ interests are concerned. 
However I am also pleased to say that this legislation has been effective even before it has been passed. Today I met with Mr Gilbert and his lawyer in my office and finally succeeded in getting him and his lawyer to talk to me about the problems at Jackson Mews and to agree to a meeting with the residents to sort the problems out. That will happen in a few weeks’ time. I received an ongoing commitment from Mr Gilbert to accept monthly reports and to respond within 7 days to any written complaints that are made to him. I indicated to him that it would be worth his while to do that because if he can sort these things out before the statutory supervisor is appointed it will save him a great deal of money in terms of the cost if a disputes panel has to be brought in at his expense to resolve the ongoing grievances. If Mr Gilbert does not restore his goodwill with the residents of Jackson Mews it will prove to be very expensive to him. 
So I think this is an excellent bill and I look forward to advising the House in future of progress as we endeavour to resolve the problems concerning Jackson Mews. I endorse this bill and say United Future will certainly support it through the House.