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Retirement village disputes: Who decides?

Many people may not realise that there is a separate process for dealing with retirement village disputes.  This process is set out in the Retirement Villages Act 2003 (the Act) and the Retirement Villages (Disputes Panel) Regulations 2006 (the Regulations).  Essentially, certain types of retirement village disputes can be dealt with under this process.  The decision-maker(s) is a disputes panel, appointed by the operator of the relevant retirement village (“disputes panel”).

This article summarises some key information regarding the retirement village dispute process, such as: the types of disputes that can be dealt with by a disputes panel; how to initiate a retirement village dispute; the appointment and role of a disputes panel; and information on timeframes and costs.  The article concludes with comments on some of the issues with the current process, which may be addressed following a review of the Act currently being conducted by the Retirement Commissioner.

Types of disputes

There are particular types of disputes that qualify for the retirement villages disputes process, which are set out in the Act.  These can be disputes between retirement village residents (a “resident”) or between a resident and a retirement village operator (an “operator”).  

Examples of disputes between residents that qualify for the retirement village disputes process are disputes affecting a resident’s right to occupy their unit.  It appears, however, that the majority of disputes that are contemplated for the retirement villages disputes process are disputes that arise from decisions made by an operator.  Examples include decisions relating to or affecting:

  • A resident’s occupation right or right to access services or facilities;
  • Charges for outgoings that are payable under the resident’s occupation right agreement; and
  • Charges or deductions imposed because the resident’s right to live in the unit has ended.

A dispute notice relating to those types of decisions can be issued by a resident or an operator.  A resident can include a former resident and the personal representative of a resident, such as a family member or a friend.

A resident can also issue a dispute notice regarding an alleged breach of a right referred to in the Code of Residents’ Rights (which is set out in the Act) or the Retirement Villages Code of Practice 2008 (which has been published by the Ministry of Business, Innovation and Employment). A resident cannot issue a dispute notice if the dispute concerns any health or disability services.

There is no monetary limit on disputes that can be taken to a Disputes Panel, as long as the dispute satisfies the criteria set out in the Act. 

Initiating the disputes process

To initiate the disputes process, the initiating party issues the other party with a dispute notice.  A dispute notice must be in writing and must include the following:

  • The decision(s) or matter(s) that the dispute notice relates to;
  • The person(s) the dispute notice is issued against;
  • The grounds on which the dispute notice has been issued; and
  • The efforts that have been made to resolve the dispute. 

There are no fees for issuing a dispute notice. 

There are specific timeframes that need to be followed in issuing a dispute notice.  Generally:

  • If the initiating party is an operator, a dispute notice cannot be issued unless the resident concerned has first been notified, reasonable efforts have been made by the operator to resolve the dispute and 20 working days have passed since the resident was notified.  The dispute notice also needs to be given within six months after the resident concerned was first notified of the dispute; and
  • If the initiating party is a resident, a dispute notice cannot be issued until the dispute has first been referred to the complaints facility and 20 working days have passed since that referral.  The complaints facility is a facility that must be run by an operator for dealing with complaints by the residents.  Where the initiating party is a resident the dispute notice generally needs to be issued within six months after the 20 working day timeframe.

The six month timeframe can be extended by agreement.

Appointment of the disputes panel

Once a dispute notice has been issued, the operator has 20 working days from the date of receiving or giving the dispute notice to appoint one or more independent people to sit on the disputes panel.  The operator must consult the other parties to the dispute before making an appointment.

The Disputes Panel members are chosen from a list of persons approved by the Retirement Commissioner.  There are particular rules around the appointment of a disputes panel in what are called disposal disputes.  These are disputes concerning an operator’s breach of a resident’s occupation rights agreement or code of practice in disposing of a residential unit.  With disposal disputes:

  • the operator must appoint at least three members to the panel; and
  • the chair must be a retired Judge or have held a practising certificate as a barrister or solicitor for at least seven years. 

Other than that, there are no rules around the numbers of members that must be appointed to determine a retirement village dispute.         

What happens next?

After the Disputes Panel has been appointed, the operator must provide the Retirement Commissioner with a copy of the dispute notice and copies of all of the documents relating to the appointment of the Disputes Panel members.  The operator must also provide a copy of the dispute notice to the village’s statutory supervisor in certain circumstances.

Once appointed, the Disputes Panel then conducts the whole dispute resolution process.  The panel is responsible for:

  • Deciding what additional information they need;
  • Holding a pre-hearing conference with the parties;
  • Making arrangements for a hearing, including giving the notice of hearing to the parties;
  • Conducting a hearing;
  • Reaching a decision and notifying that decision in writing;
  • Providing all the relevant papers, documents and other material to the Retirement Commissioner.

The Disputes Panel must hold a hearing unless the applicant withdraws the dispute notice, the parties agree not to have a hearing or the Panel refuses to hear the dispute.  A Disputes Panel can only refuse to hear a dispute if it considers that:

  • The dispute is frivolous or vexatious or an abuse of process;
  • The dispute should be heard by a Judge; or
  • It has “any other sufficient reason” not to hear it.  In this case the operator must appoint another Panel to hear the dispute.

The operator is responsible for paying the costs incurred by the Disputes Panel, including their fees and expenses, such as a travel costs.  Each party has to pay for their own legal costs and is also responsible for paying for the costs and expenses of their witnesses.  The Disputes Panel may, however, award some or all of the costs and expenses incurred to any party, or to the operator if there is a dispute between residents.

The decisions of Disputes Panels are enforceable in the Courts.  They can also be appealed within 20 working days of the decision to either the District or High Court.  The appeal is a rehearing and the decision of the Court hearing the appeal is final.

Comments on process

There are a number of issues with the retirement villages disputes process.  The main issue in my view is the jurisdiction of a disputes panel, which, in a monetary sense, is limitless - beyond that of a District Court.  This is quite unusual and is problematic without additional protections being put in place, such as minimum requirements for panels deciding higher value disputes.

Another issue is the power imbalance between an operator and a resident.  In every retirement village dispute the operator is responsible for appointing the disputes panel.  Yes, the operator must consult with the other party(s) before appointing the panel, but there are no rules around what that means in the Act or Regulations, and there is no requirement for an agreement to be reached.  This is a huge advantage for operators, who can choose whichever panel member(s) they want to decide a dispute that they are involved in.

That said, there are some provisions that disadvantage operators too, such as the requirement that they pay all of the costs of the disputes panel.  There is the possibility that another party with be ordered to pay those costs, but there are no guarantees of that.  Even so, this does not negate the huge disadvantage to a resident in the appointment of the disputes panel.  Residents would likely prefer to share the disputes panels’ costs if the appointment of disputes panels had to be by agreement. 

The Retirement Commissioner is apparently investigating some of the issues with the current system so changes may be on the horizon.

If you would like further information please contact Gerard Rennie on 07 958 7429.


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