Retirement village operators should monitor the progress of a matter before the New South Wales Civil and Administrative Tribunal (NCAT) to understand the extent to which NCAT may find that Village Rules are unjust, oppressive or harsh

The Appeal Panel of the NCAT commenced 2023 with a decision about a resident keeping budgies contrary to the Village Rules at B'nai B'rith, a Jewish retirement village in Rose Bay.

Whilst the budgies will be blissfully ignorant of it, the decision calls into question the enforceability of Village Rules which are clearly communicated to residents prior to entering into and consistent with Village Contracts. 

Mr Kary entered into a Village Contract in 2018 to reside at Princess Gardens Retirement Village at Rose Bay. Clause 26 of the Village Contract stated "apart from (fish which you keep in your premises) you must not keep or allow any pets or other animals in your premises… (which include) but are not limited to birds, cats, dogs, and any other companion animal." 

The Village Contract also contained Village Rules which included at Rule 5:

No dogs or cats allowed. You may keep fish in your premises at any time, without the need to let us know or get our consent. For safety of other residents, no other animals (including birds, cats, or dogs) are to be kept in your premises or brought onto common areas at any time. 

In the initial Tribunal proceedings, Mr Kary sought an order under Section 54(2)(b) of the Retirement Villages Act 1999 (Act) modifying the operation of Rule 5 to enable him to keep a maximum of two budgerigars on certain conditions, including that he must keep the birds in their cage.

Under Section 54(1) of the Act:

The operator of a retirement village or a resident of the village may, at any time, apply to NCAT for an order in relation to either or both of the following--

(a) a dispute concerning the legal validity of a village rule in force in the village,

(b) a village rule in force in the village that the operator or resident considers to be unjust, unconscionable, harsh or oppressive.

Under Section 54(2) of the Act, NCAT may make an order:

(a) setting aside the village rule concerned, or

(b) modifying the operation of the rule in its application to a resident or to some or all of the residents of the village, or

(c) upholding the rule.

The initial Tribunal proceedings were decided in favour of the Operator because the Tribunal Member held Mr Kary did not have reasonable grounds to believe that Rule 5 was unjust, oppressive or harsh. 

In Paragraph 74 of the initial determination of the Tribunal, the Member held "In considering whether the belief held by the applicant is reasonably held, it is necessary to consider the relationship in contract between the applicant and the respondent (that the resident was a non-registered interest holder) and the basis upon which the applicant is entitled to believe that the terms of the contract he signed in 2018 have now become harsh or oppressive…It could not be said that the (Village) Rules inhibit unreasonably the right to enjoy the occupation of the Village which (Mr Kary) expected in 2018." 

The initial decision essentially turned on the fact that as an unregistered interest holder (with rights similar to a tenant) who signed a Village Contract clearly prohibiting the keeping of birds, Mr Kary could not reasonably consider that it was unjust, oppressive or harsh for him to be prohibited from keeping birds.

The initial Tribunal Member never considered whether or not Rule 5 was unjust, oppressive or harsh because they determined that Mr Kary did not have reasonable grounds to believe it was. 

The Appeal Panel allowed the appeal because Section 54 of the Act does not require a resident to have reasonable grounds for their belief that a village rule is unjust, oppressive or harsh. As long as the resident considers that the village rule is unjust, oppressive or harsh, the resident has the right to commence proceedings. 

The Appeal Panel held "the resident did assert that the Rule was unjust, and/or that it was oppressive or harsh, as it applied to him. There were questions of fact in the application of (section 54 of the Act) to the case before the Tribunal, which were simply not answered by the Tribunal Member, or dealt with adequately, or at all, in his Reasons. These were errors on questions of law. The Tribunal Member did not consider whether Village Rule 5 was, in fact, unjust. The Tribunal Member may have considered whether, or not, a belief was reasonably held by the resident that the Rule as it applied to him, was harsh or oppressive, but this was the wrong question."

The Appeal Panel sent the matter back to NCAT's Consumer and Commercial Division for a differently constituted Tribunal to reconsider Mr Kary's application.

Retirement village operators should be mindful that as long as a resident considers that a village rule is unjust, oppressive or harsh, the resident has the right to seek orders setting aside or modifying the application of the rule to them. 

When residents raise concerns about Village Rules, operators should look beyond the language of the rules and village contract and consider whether or not the rule applies generally, or to the particular resident in a way that is unjust, oppressive or hash.

We will follow this matter through its remission to NCAT for reconsideration, and provide an update in due course.

Stay tuned for episode 2 of Budgie Battle at B'nai B'rith…