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I think there are some matters which are not adequately covered in the Bill. 

In relation to the review of decisions, which is the opportunity for challenging, if necessary, the decisions of  the medical practitioners, a person who may bring the matters before the Tribunal includes [definition of  ‘eligible applicant’ s.108]: 

(a) a patient who is the subject of a decision [by the Tribunal under] section 109(1)(a)–(d), or (b) an agent of a patient … or 

(c) a person who the Tribunal is satisfied has a special interest in the medical care and treatment of  [the person]. 

The matters which are the subject of the application for review are [s.109]: 

(a) a decision of a patient’s coordinating practitioner in a first assessment that the patient— (i) … [residence qualification]; 

(ii) has or does not have decision-making capacity in relation to voluntary assisted dying, or

(iii) is or is not acting voluntarily and not [acting -rl] because of pressure or duress, 

(b) a decision of a patient’s consulting practitioner in a consulting assessment that 

the patient—

… 

(iii) is or is not acting voluntarily and is or is not acting because of pressure or duress, 

(c) a decision of a patient’s coordinating practitioner to make a statement in a final review form  certifying that [s/he] is satisfied the patient— 

(i) has or does not have decision-making capacity in relation to voluntary assisted dying, or (ii) … is or is not acting voluntarily and is or is not acting because of pressure or duress, 

(d) a decision of the Board to refuse an application for a voluntary assisted dying 

substance authority in relation to a patient. 

The identity of an ‘agent’ is in my opinion, obscure, in this context. It means ‘a person who acts on  behalf of the patient’ [Schedule 1-Dictionary]. 

It is unclear from the legislation who may be an “agent”. We have broad legal definitions of who may  be an agent, but here we have someone who may be so ill and focussed on unbearable pain, as to be  unable to make those kinds of decisions.  

Since the Bill is concerned only with capacity to understand ‘voluntary assisted dying’, the capacity  to understand who an agent is and their delegated functions, will likely be different. It is the same  capacity required to understand the making of a power of attorney [see Szozda v Szozda [2010] NSWSC  804].  

Will a written agency appointment be required? Is a solicitor an agent? Will a solicitor be denied  leave to appear if capacity to instruct is in doubt? The Bill makes a point about the capacity which  the person is required to have and that is, to understand the nature and effect of voluntary assisted  dying.  

In my experience in the Guardianship Division of NCAT and the Guardianship Tribunal before that, it  is sometimes essential, in the interests of the subject person and in the interests of justice and 

fairness to hear from family members who seek to be heard, especially when they have views and  experience which are not necessarily shared by the rest of the family. Family members seem to have  no status in this Bill, yet are among those whose views may be critical as to whether there is present,  any pressure or duress. 

Consider the circumstances which might exist and which may lead a medical practitioner to overlook  or mistake conduct by another person impacting upon the subject person, in the manner described  as pressure or duress. The definition found in the Bill of those words is “abuse, coercion,  intimidation, threats, undue influence from another person or other pressure or duress”. 

The Bill makes no attempt to guide the medical practitioners in how they may discover the facts and  circumstances which might show that any pressure and duress may have occurred. There is no  reference to making inquiries or the necessity or otherwise of consulting with family members. 

For those reasons, I suggest that an extra qualifying definition of an ‘eligible applicant’ should  include ‘any person who has a genuine interest in the welfare of the person’. That will enable not  only family but in cases where there is no family, others such as friends to make an intervention if  they have evidence of ‘pressure or duress’.

On 25 October 2021, a bill entitled the Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 (“Bill”) passed the House of Representatives and within a few hours the government presented further amendments including a proposal for legal immunity for aged care providers.

The terms of the 9th schedule adding s 54-11 to the Aged Care Act are as follows:

54-11 Immunity from civil or criminal liability in relation to the use of a restrictive practice in certain circumstances
(1) This section applies if:
…
(b) a *restrictive practice is used in relation to the care recipient; and
(c) the care recipient lacked capacity to give informed consent to the use of the restrictive practice.
(2) A *protected entity is not subject to any civil or criminal liability for, or in relation to, the use of the *restrictive practice in relation to the care recipient if:

(a) informed consent to the use of the restrictive practice was given by a person or body specified in the Quality of Care Principles made for the purposes of this paragraph; and
(b) the restrictive practice was used in the circumstances set out in the Quality of Care Principles made for the purposes of paragraph 54-1(1)(f).

Effectively, the Bill proposes to provide legal immunity to aged care providers in the event an aged care resident wishes to bring a civil claim or make a criminal charge when they consider they have been unlawfully chemically or physically restrained. It imposes a precondition that they must show that provisions of subordinate legislation, such as the Quality of Care Principles 2014, have not been complied with. This imposition is not required of other litigants and, further, Quality of Care Principles already qualifies the access to immunity by requiring that the restrictive practices “meets the requirements [if any] of the law of the State or Territory in which the restrictive practices are used”. So, when regard has had to the common law on unlawful restraint, the circularity of the measure becomes absurd.

The rationale for proposing legal immunity was to allow providers to avoid having to make decisions about restrictive practices where the governing federal laws are not consistent with the state laws.

However, although different state and government guardianship laws are not uniform in relation to decisions regarding restrictive practices, the reforms to unify these law may take many years and, in the meantime, the vulnerable or frail aged, who are subject to the Bill, will be left as the only cohorts subject to the removal of the civil and criminal protections which protect all other Australians [although regrettably there is already similar legislation in S.A., W.A. and a proposal in NSW applying to the NDIS sector].

Ultimately, the proposed Bill seeks to strip aged care residents’ of their fundamental dignity and personal rights to freedom, including under the common law of Habeas Corpus, an ancient prerogative writ and an irreplaceable foundation to universal prima facie rights to personal liberty, the most important of all common law rights.

Sydney, 2 December 2021

Elderlaw Legal Services, a division of Foulsham & Geddes Pty Ltd, acted for the plaintiff in Supreme Court proceedings last Christmas 2020 regarding funeral arrangements.

An attorney appointed by Power of Attorney has, in law, significant financial responsibilities to the principal which must be complied with¹. The appointment of an attorney under a Power of Attorney is really the appointment of an agent to attend to matters of business or personal financial management, such as dealing with third parties, on behalf of the person appointing the agent, otherwise known as the principal  or donor of the power.

The case of Watson: father, son and fiduciary duty

In a case involving the grant of a power of attorney by a father to his son, one of four children, the son withdrew $55,000 from the bank account and transferred to himself the title to the family home. The power was given five days before the father had made his will dividing his property between all of his children, subject to a right to occupy the family home in favour of the (defendant) son ².

In the judgment, the Court referred to the financial obligations which were involved:-

“Pursuant to the grant of the enduring power of attorney, the defendant had vested in him the powers given to an attorney pursuant to s 163B of the Conveyancing Act 1919. The granting of the power of attorney places the defendant in a fiduciary duty in relation to the deceased, and he is required to accord priority to the interests of the deceased where there is a conflict between the interests of the two.

The use of the power of attorney by the donee contrary of the known wishes and directions of a donor is a breach of trust …The powers of attorney are specifically directed at the management of the principal’s affairs: “it is not open to attorneys to either obtain an advantage for themselves or to act in a way which is contrary to the interests of their principles.”

The case of K: father, daughter and conflict of interest

The South Australian Supreme Court in Klotz v Neubauer,³ made some observations on the duty of attorneys and restated the importance of those obligations:-

It is well established that an agent owes his principal a fiduciary duty: (see the case of Hospital Products Ltd v United States Surgical Corp) … in this case the defendants were subject to fiduciary duty given that their father was elderly and prone to periods when he was not competent to manage his affairs. Thus, as attorneys for their father, the defendants had a duty as fiduciaries to him and his estate.

As fiduciaries, the defendants had an obligation not to profit from their father’s estate and, if they do profit, they are liable to account for the profit:

As fiduciaries, the defendants had the burden of proving that money expended by them on fees for their father’s accommodation at rest homes were properly incurred:

The defendants, and in particular Mrs N, had a conflict of duty and interest. Mrs N and her husband had been paid $40000 in order to provide accommodation for Franz Klotz. That payment enabled them to create an asset which they could use and enjoy when Margaret N no longer lived at the house… Mrs N had a clear duty to permit her father, Mr K to reside in the extensions and not to do anything to prevent his quiet and peaceful occupation. Mrs N and her brother incurred fees payable from their father’s estate for accommodation at rest homes … In the absence of any explanation, the defendants must account for the profit.

Abuse of delegated powers –compliance with instructions

General limits on power always include the instructions of the principal.  In the case of Dynayski  v Grant⁴ the principal directed that the proceeds of sale of his house be divided equally between his son and daughter. The attorney was married to the daughter. A dispute arose about the division and whether the attorney had followed the principal’s instructions.

These were the background facts described by the NSW Supreme Court:

• This was a dispute between family members all of whom are related by blood or marriage (son claiming against sister and brother-in –law in relation to father’s property);
• The defendants were Mr & Mrs G and Mr G prior to the date of death of the father was appointed his attorney;
• The father had made a will in which he left his estate to the son and daughter in equal shares;
• Some time prior to the father’s death it was agreed that his house would be sold and the proceeds, less whatever was necessary to maintain him, would be divided between the son and daughter in accordance with their entitlements under the will;
• Mr G as the father’s attorney sold the house;
• The dispute concerns the application of the proceeds from that sale.

The Court, in dealing with the relevant principles, reviewed the case precedents on directions conveyed by principal to attorney (which includes limitations and instructions written and verbal) thus:-

(It has been) held⁵ that the use of a power of attorney by the donee, contrary to the known wishes and directions of the donor is a breach of trust. This principle was approved by the Victorian Supreme Court⁶ (in this way):

“It is not the law that an attorney given power by instrument under seal may, so long as the instrument remains unrevoked, exercise the power it confers in disregard of any subsequent orders of his principal conveyed to him… Subject to any contrary sense of the instrument there always resides in the donor the right later to instruct the donee not to act on the power, or to act only in a stated way”.

That the effect of a power of attorney, even if given under seal, may be modified (verbally) is made clear by the decision of The Margaret Mitchell … There, a power of attorney was given under seal by the owner of a ship to her (captain) …who purported to sell her under authority conferred by the power of attorney. The (English) High Court of Admiralty, found as a fact that:

’… though the power of attorney was not formally revoked, yet that Captain Stiles, long before the sale, received letters informing him that he was to be dismissed, and of the owner’s intention to dispose of the ship; the whole contents of those letters show that the owner did not desire that Stiles should sell this ship under this power of attorney, and Captain Stiles’s letter shows that he was about to sell the ship not in accordance with the wishes and directions of the owner, but in despite of them …’.

‘…as a general rule, the grantee of a power of attorney is bound to follow the directions and wishes of the grantor; as, for instance, with respect to a power of attorney to sell stock, the grantee must exercise that power according to the orders of the grantor. I conceive, that to use a power of attorney contrary to the known wishes and directions of the grantor is a breach of trust.’

So here is found an important statement of the relevant law. There were two parcels of money which the attorney was found to be liable to repay, with interest, in the case.

Acting in the best interests of the principal

The prescribed form of Power of Attorney in New South Wales has attached to it notes which include this –

4. An attorney must always act in the best interests of the principal. Unless the attorney is expressly authorised, the attorney cannot gain a benefit from being an attorney.

An appointment of an agent gives rise to a fiduciary relationship. There are duties to avoid a conflict of interest and  to account to the principal for any profit or gain.

The case⁷ of Re R assists us to understand what ‘acting in the best interests of the principal’ means was an appeal from the Guardianship Tribunal (the “Tribunal”) in respect of its decision to make a financial management order under the Guardianship Act 1987 subjecting the estate of the first defendant to management under the Protected Estates Act 1983 and committing the management to the Protective Commissioner of New South Wales. In the course of its judgment the Tribunal said:

“The issue for the Tribunal was whether the Power of Attorney executed by the first defendant …should remain in place with the plaintiff continuing to act as his father’s attorney in relation to the management of the first defendant’s finances or whether the circumstances relating to the plaintiff’s conflict of interest warrants suspending the Power of Attorney and putting in place a management order.”

The tribunal came to its conclusion as follows:

“It is not in dispute that the first defendant is incapable of managing his financial affairs. On the available evidence the Tribunal was satisfied that it is in the best interests of the first defendant that the Power of Attorney executed by him on 17 November 1997 naming his son, the plaintiff, as his attorney, should be suspended and that the first defendant’s affairs be placed under a formal management order.

It was in this context that His Honour Justice Young came to look at what is meant by ‘best interests’.

… On 17 November 1997 the (principal) executed a general power of attorney in favour of the (his son). The power of attorney would, unless the Court made an order, continue after any loss of capacity. The power of attorney included a provision referred to in section 163B(2)(b) of the Conveyancing Act 1919, authorising the donee to execute an assurance, as a result of which a benefit could be conferred on the donee appointed by the power of attorney.

The actions of the Agent/ attorney came under legal challenge. The Judge addressed the issue of best interests in a full discussion of the meaning of that phrase and with relevance to powers of attorney:

“…One then turns to the words “best interests”. Here there was quite a debate as to what the words meant. …I (have) said (in a previous judgment) that “It is hard to find a good definition of the words ‘best interests’ …I would agree, …that the “best interests” must include the welfare, health and well-being of the person in a wider sense than is suggested by protection from neglect, abuse or exploitation (Re Mc (1989) 3 VAR 87).

“…in the recent English case of Re W [2000] 1 All ER 175. …a power of attorney was given to Mrs X. Mrs X took advice and she found that it would be very tax effective if the estate of the donor of the power of attorney (her mother) was reduced below a certain figure. She then gave gifts to each of her brothers and sisters and herself of 20,000 pounds. The English Chancery Division said that although Mrs X did not portray a picture of greed or sought to do anything that was not within the best interests of the family, she acted misguidedly and not in the interests of her mother. So, there is a case right in point where a person with the best will in the world, who shares things equally between herself and her brothers and sisters, and acts in what she thinks are the interests of her mother, yet the Court says she is not acting in the best interests of her mother. Indeed, cases like Re W show that there is a good argument that a person who is given a power of attorney cannot give money away, and in particular cannot give money to themselves.

…It was not at all relevant that the (son) had power under the power of attorney to make gifts to himself. He may have had that power, he may not have had that power, it does not matter. The question was whether it was in the best interests of the incapable person that that situation be permitted to continue.

… the English Court of Appeal (in a 1928 case- ed.) points out that a power of attorney may give a person authority to rob the donor, but that does not make robbing the donor something that he should not be accountable for. (One of the  judges) said, “It is a fraud if the attorney uses his power to rob his principal, but if he does rob him by doing the very thing he is empowered to do, it is immaterial”.

I want you to have my house

If attorneys are bound to act on the directions of the principal, what then should an attorney do when faced with an instructions like this:

“When I am mentally incapable I want my three girls, Sharyn, Gayle, Antoinette, to have my house, 64 John Street, Yeppoon.”⁸

In this case Mr C. had appointed two of his daughters to be his attorneys just eight days before writing the letter. It was addressed to one of them.

In a second letter written just a day before, he wrote to his other daughter and attorney –

“PS I have given Gayle, Sharyn, Antoinette my house at 64 John Street, Yeppoon as they are my loving daughters. Gayle, take this to a solicitor as I give you three girls my house.”

Three months later Mr C. was certified as mentally ill and incapable of managing his estate under the mental Health Act 1974 (Qld). Shortly beforehand, the attorney daughters executed a transfer of the title to the house to themselves and their sister which they subsequently registered.

The Public Trustee, appointed to manage the estate, sought to set aside the transfer because of the breach of s 175E(1)(a) of the Proerty Law Act. That section provides –

“Without affecting any other obligation imposed by law in exercising powers under an enduring power of attorney the donee must not, unless the power of attorney expressly authorises it, enter into a transaction if the donee’s interests and duty in relation to the transaction could conflict with the donor’s interests and duty in relation to the transaction.”

S175E(1) also requires the donee to keep the donee’s property and money separate from the donor’s.

The attorneys argued they were complying woth their father’s wishes which were contained in the two letters. They accepted however, that the letters did not complete the gift which was otherwise unenforceable. They claimed to have the right and the power to so what their father had not done to perfect the gift.

The trial Judge disagreed.

This, then, is a power which is the creature of statute and consequently its exercise is determined by that statute. The words of s175E(1)(a) are clear. What the attorneys have attempted to do here is to act in a way which is in conflict with the donor’s interests because they have transferred his property out of his hands into their own. Such a transfer cannot be sustained because it is beyond the powers that the attorneys have.

In the circumstances, it seems to me that the matter should pass fully into the control of the Public Trustee. The material placed before me shows that there is conflict within the family, and in those circumstances the power of attorney given to Antoinette Margaret Camilleri and Sharyn Anne Tolson should be revoked and the Registrar should be directed to transfer the property back to Mr Campbell.

You are my only daughter – fiduciary duty modified

Although the evidence in Smith v Glegg was that the plaintiff mother had three adult daughters, at the time she gave away her house, she would describe the defendant as her ‘only’ daughter. That was the outcome not only of the affection which she had for the defendant (at the time) but also for the animosity she had for her other daughters9.

This case involved claims of undue influence and evidence that at the time of the relevant transactions, documented by a contract for sale at $150,000, a transfer and a deed of gift, the plaintiff was also blind.  In this discussion paper reference is made only to the use of a power of attorney which the defendant held from her son as principal, and to whom the title to the house in questions had been transferred.

It was the evidence that there was no consideration for the transfer to the son. About twelve months after that transfer, the defendant daughter sold the house and applied the proceeds for her own benefit. Here is how the Court approached the problem:-

The statement of claim alleges that the defendant owed the plaintiff a fiduciary duty not to obtain a profit for herself or a related party in conflict with the interests of the plaintiff. By the Defence, the defendant admits that “the Defendant owed the Plaintiff fiduciary duties but the extent of those duties were identified and modified by the contents of the Enduring Power of Attorney and in particular cl 3 thereof”.

Clause 3 provided as follows:

I expressly allow and authorise my attorney to enter into transactions on my behalf where my interests and duty could conflict with my attorney’s interests and duty in relation to the transaction even though my attorney might derive a direct or indirect benefit therefrom.

The transactions to which cl 3 applied were those entered into by “my attorney … on my behalf”. By the terms of cl 3, the content of any fiduciary duty was affected only in that context. It was not in terms which affected a transaction such as this one. The effect of cl 3 was to widen the circumstances in which the attorney could enter into a transaction on the principal’s behalf. It did not affect the content of any fiduciary duty in circumstances which do not involve such a transaction.

Apart from her argument based upon cl 3, the defendant correctly concedes that she owed to the plaintiff fiduciary duties. The plaintiff was totally dependent upon her assistance, and specifically upon her exercise in good faith of her very extensive powers under the power of attorney. That required the defendant to avoid any dealing or transaction by which her own interest could conflict with her duty to the plaintiff. A critical part of her responsibilities as an attorney was her management of the plaintiff’s money and property. If the defendant was to be free to accept a gift of the plaintiff’s only substantial asset, then her interest in maximising the value of what she would receive would conflict with her duty to manage and apply the plaintiff’s property only for the support, health and comfort of the plaintiff, even if that involved some substantial expenditure. The existence of such a conflict between duty and interest was not challenged in the defendant’s case.

n the breach of fiduciary duty the Court found that “the defendant profited in the amount which she received when she sold the house ($180,000)”. The judge also found for the plaintiff on the claim for undue influence.

Endnotes

1 See the High Court case of Hospital Products Limited v United States Surgical Corp., (1984)156 CLR 41.

2 Watson & ors v Watson, [2002] NSWSC 919.

3 Butterworths Lexis Nexis Unreported Judgments, SCSA, BC200108267

4 [2004] NSWSC 1187

5 The Margaret Mitchell (1858) Swab 382; 166 ER 1174

6 R v Holt (1983) 12 Aust Crim Rep 1

7 Re R, [2000] NSWSC 886 (17 August 2000)

8 Demack,J., In The Matter Of The Estate Of Campbell, QSC  BC9700793

9 Smith v Glegg, [2004] QSC 443

Many people are apparently confused – including aged care providers, residents and their family members, about their respective rights to withhold and to have access to information which may have been accumulated about a particular person while that person has been in a residential care facility.

This short article attempts to provide all sides with some of the necessary information with which to make informed decisions about disclosure of information in records kept about aged care residents.

First, let’s be clear about the law which applies to this area. The sources of law are to be found in the Aged Care Act 1997 and the Privacy Act 1998 and in the various State and Territory laws which apply to medical record keeping. I shall just confine this discussion to the Commonwealth laws.

There are better rights to access available under the laws of New South Wales, Victoria, and the ACT.

Name of law	Jurisdiction	Right to access records	Representative’s right to access
Privacy Act 1988 and the  National Privacy Principles (NPP)	Commonwealth law: – applies to all health service providers	National Privacy Principle (NPP) 6: Consumers have a general right of access to their own health records. Access can only be denied in certain circumstances – for instance, where access can pose a serious risk to a person’s life or health.	Limited – see below
Aged Care Act 1997	Commonwealth law: – applies to all aged care facilities which are funded by the Commonwealth	Sect 62.1 Aged Care Act – personal information …must not be disclosed to any other person…except with the written consent of the person…	Nil unless the written consent (or direction) of the resident is submitted to the Residential Care Facility (RCF)

In addition, the Privacy Commissioner has released a Public Interest Determination (PID) in relation to the NPP 10, which deals with collection of information.

“PIDs 10 and 10A clarify that third party health information can also be collected from ”a person responsible’ for an individual where the individual lacks the capacity to provide that informational themselves. The expression ”responsible person’ has the same meaning as in the Privacy Act…”

In NPP 2, the circumstances under which information is disclosed (as opposed to collected) are stated. However, the Privacy Commissioner takes the view that –

Subclause 2.1 (which contains the defined circumstances for disclosure) does not override any existing legal obligations not to disclose personal information. Nothing in subclause 2.1 requires an organisation to disclose personal information; an organisation is always entitled not to disclose personal information in the absence of a legal obligation to disclose it. (more information)

The NPP goes on to state that a health service provider may disclose health information to a person who is responsible for the individual, if:

(a) the individual:

(i) is physically or legally incapable of giving consent to the disclosure; or

(ii) physically cannot communicate consent to the disclosure; and

(b) a natural person (the carer) providing the health service for the organisation is satisfied that either:

(i) the disclosure is necessary to provide appropriate care or treatment of the individual; or

(ii) the disclosure is made for compassionate reasons; and

(c) the disclosure is not contrary to any wish:

(i) expressed by the individual before the individual became unable to give or communicate consent; and

(ii) of which the carer is aware, or of which the carer could reasonably be expected to be aware; and

(d) the disclosure is limited to the extent reasonable and necessary for a purpose mentioned in paragraph (b).

A person is responsible for an individual, according to the Privacy Act, if the person is:

(a) a parent of the individual; or

(b) a child or sibling of the individual and at least 18 years old; or

(c) a spouse or de facto spouse of the individual; or

(d) a relative of the individual, at least 18 years old and a member of the individual’s household; or

(e) a guardian of the individual; or

(f) exercising an enduring power of attorney granted by the individual that is exercisable in relation to decisions about the individual’s health; or

(g) a person who has an intimate personal relationship with the individual; or

(h) a person nominated by the individual to be contacted in case of emergency.

The problem which these sections present becomes important, where the Residential Care Facility (RCF) may have its own concerns about the way in which care has been provided in the particular case, and the family, carer or person responsible may also be worried that something has happened to affect the health and wellbeing of the person concerned which has not been fully discussed or disclosed. In the absence of a request for health records by the person themselves (for example if they lack capacity to make the request), there may indeed be a problem, which their carer or near relative will need to confront, if they wish to see the records.

In such a case, as will be seen from the information given above, there needs to be a legal obligation in order to be sure that the RCF will provide all necessary information to the carer, relative, guardian or attorney.

IMPORTANT: The only way to be sure that the information will be forthcoming at the time it is needed, is to have the requirement inserted into the RCF Residential Care Agreement at the time it is made. This is so, under both the Privacy Act and the Aged Care Act.

Here is yet another example of important inclusions in the residential care agreement which are almost never discussed or addressed and which need to be made at the time of entry into care. The alternative is to rely upon the goodwill of the RCF and to hope that the need to see the records (in circumstances where there is real doubt about poor care and attention) does not arise.

Glossary

• RCF – Residential Care Facility
• NPP – National Privacy Principle
• PID – Public Interest Determination

Useful links:

• ComLaw (Commonwealth Law) website
• ComLaw website: Aged Care Act 1997
• ComLaw website: Privacy Act 1988
• Office of the Privacy Commissioner
• Aged care legislation – links to related principles and Act

Aged Care residents are also consumers

Although significant resources are devoted to dealing with complaints by residents and their families and representatives under the aged care system in Australia, it is undeniable that very many of those complaints, even though a minority, are unable to be resolved under the Commonwealth scheme. That is because the complaints scheme deals with systemic failure and is not capable of dealing satisfactorily with serious claims of service failure and negligence leading to trauma and injury.

The usual remedies for those kinds of issues are to be found in the ordinary common law courts around Australia. These are the Local and District courts and in very serious cases, the Supreme Courts of the States and Territories.

However to bring a claim in a court of law is to take significant risks especially regarding liability for legal costs in the event of a lost claim. There are almost no claims discoverable in the decided case databases which refer to claims by residents for serious harm arising from poor care delivery service in an Australian aged care facility. That may be due in part to the risk of taking the claim to a hearing with its consequent risks.

If claims can be brought in the various consumer claims tribunals around the country, relying upon the service guarantees now found in the Australian Consumer Law, it may be that a new era of empowerment has arrived to the advantage of aged care residents and others who receive aged care services at home.

The object of this article is to point the way for those who are looking for another more satisfactory pathway for the resolution of their complaints.

Consumer claims tribunals are no ‘El Dorado’ for claimants because limits are placed on claims. However, the prospect of making claims may become far less daunting and in addition, may provide some leverage in negotiations over claims provisions in the residential care contracts which must be offered to all aged care recipients.

The Aged Care Act and its Complaints Scheme

The Aged Care Act 1997 contained from its commencement provisions relating to the establishment of an elaborate complaints system. The legislation has always emphasised the need for complaints first to be taken to the Aged Care Provider (ACP).

The Departmental pamphlets, brochures and other communications have always contained that message and that is an obviously logical and proper approach to the resolution of complaints. However, if there is no agreement between the parties themselves, namely the resident, or more commonly the resident’s close family, and the ACP, generally speaking there are no further steps suggested for the resident to take, in a complaint which has either not been upheld or perhaps found to be ‘out of scope’, externally to the Department of Health and Ageing’s (DOHA, or the “Department”) own system for complaints. That is the understanding that most people have who are either engaged by or receive benefits under the Aged Care Act 1997.

This current scheme is the third reincarnation of the complaints scheme and is named the “Aged Care Complaints Scheme” (the Scheme, OR ACCS). The first two schemes were the Complaints Resolution Scheme and the Complaints Investigation Scheme. One might be forgiven for thinking that both the resolution and investigation aspects proved to be too hard and we must now settle for plain vanilla.

The elaborate complaints scheme is established by the (recently updated) Complaints Principles, which are made as statutory instruments under the Aged Care Act 1997. The Scheme is also urged upon residents and imposed upon ACPs by the User Rights Principles which require that all residential care contracts must contain provision for the resolution of disputes.

It has been this writer’s invariable experience over more than a decade of practice in this area that the combined effect of the history, development and departmental resources and of the provisions of the Aged Care Act have produced a mindset among ACPs, their staff, residents and families, that if there is a problem with care delivery, the only way to solve it is to complain to the Department. Complaints are then quickly put on the prescribed regulatory track and it may be many months before a decision is produced by the Scheme.

In 2011 there were more than 13,500 contacts handled by the ACCS. Many thousands of hours have been spent in information collection, enquiries, interview, assessment and decision-making by the people employed for the task of evaluation of complaints.

For those who are dissatisfied with the complaints process there are departmental decision reviews in the first instance, appeals to the Aged Care Commissioner (within a fixed timeframe), and to the Commonwealth Ombudsman. In both cases there is no power to overturn a decision, only to require a reconsideration by the Department decision-makers. A new decision cannot be substituted. The Department maintains complete control of the process.

Moreover, the pathways for review and appeal are bewildering to anyone who is not well versed in interpreting and understanding Commonwealth legislative instruments and a legalistic approach to administrative decision-making.

The reason why the Department maintains control is to be found in the ways in which recourse or remedy may find expression in the Complaints Scheme. The only “tools” for behaviour modification which can be employed against an ACP are –

• sanctions;
• directions (formally notices of required action, or NRA’s);
• a direction for the refund of money paid for services;
• agreements with Providers made by the Department against the threat of sanctions.

The process is therefore all about penalising the ACP rather than compensating the resident or focusing upon the particular individual and that person’s problems and possible injury. In particular the remedies for non-compliance make it clear that there are no circumstances in which a resident may receive compensation only a reduction in fees by reason of a failure in service delivery on the part of the Provider.

In dealing with a complaint the Complaints Principles require the decision maker to take one of three possible actions namely –

• to take no further action (sec 13A.7 Complaints Principles);
• quickly resolve the matter by giving assistance and advice to the complainant (section 13 A.5);
• undertake a resolution process (Part 2, Complaints Principles).

What is covered – home care, hostel and nursing home?

The Aged Care Complaints Scheme applies to Commonwealth funded home care, and both low-level and high-level care. It has been estimated by the Productivity Commission that by 2016-17 there will be 747,000 over 65 receiving supported home care and 208,000 in residential care (high and low care) [Trends in Aged Care Services: Some implications, Productivity Commission, Canberra, Sept 2008].

Because funding is provided by the Commonwealth under several aged care schemes, the complaints system applies to them all. They are residential aged care, Home & Community Care HACC, community aged care packages (CACP), extended aged care at home pages (EACH) and extended aged care at home – dementia packages (EACHD).

Who can make a complaint?

Almost anyone can make a complaint under the ACCS, but the consumer claims regime is much more exclusive:

Table of comparison- persons entitled to refer complaints – complainants & consumer claims

Claimant	ACCS	Consumer claim
care recipients	YES	YES
their representatives	YES	YES
family members	YES	NO
Friends	YES	NO
legal representatives	YES	NO
aged care staff	YES	NO
Volunteers	YES	NO
health professionals	YES	NO

Advocacy services

There are Commonwealth funded advocacy services available for telephone advice and referral to other advice or advocacy service providers when necessary, in all States and Territories. As the Department puts it –

An advocate can:

• provide you with information about your rights and responsibilities
• help you resolve your problem with the service provider, including speaking for you if you want them to
• listen to your concerns about the complaints process.

So it is evident that there are important limits on the extent to which the advocacy services can support a serious claim involving an impact on health, or injury.

What happens if there is a problem about service?

Whether deliberately or otherwise, an aged care home resident is everywhere encouraged to deal with any complaint either by taking it up directly with the Provider or making a written complaint to the aged care complaints scheme.

The pamphlets, brochures, the residential care contract and almost everybody associated with the aged care scheme produce a mindset which seems to allow for only one pathway when complaints arise in relation to service. That is, that the aged care complaints scheme is the way to go and if a person is dissatisfied with the way their complaint is dealt with, there is always a departmental review, an appeal to the ombudsman, or appeal to the Aged Care Commissioner.

However, a closer scrutiny of the powers of each of these appeal pathways reveals that nobody actually has the authority to second-guess the Scheme and its decision by substituting another decision. The only possible way to do that under Commonwealth law is to take a complaint to be administrative appeals Tribunal. But that is not an option either because no appeals can be taken to the AAT from the Complaints Scheme (AGED CARE ACT 1997 – SECT 85.1 )

What kind of service problems could there be?

Here is a list of just some of the service delivery problems which can arise in the course of caring for aged persons and which may in some cases be due to inadequate staffing leading to poor quality care–

• Pressure sores
• Infected pressure sores
• Severe dehydration
• Severe malnutrition
• Aspiration pneumonia
• Medication error
• Falling & injury
• Scalding
• Toileting – delay and neglect

Many problems that arise from service delivery are actually a function of lack of supervision, which in turn arises from inadequate staffing. This is a chronic issue in aged care nursing and leads to problems, complaints and occasionally to injury and trauma.

Furthermore, another very important issue which arises in the course of service delivery, care and supervision is the issue of restraint which in turn gives rise to the question when and whether the restraint is lawful or unlawful.

We shall see that even in such cases, there is a remedy beyond that offered by the Aged Care Complaints Scheme.

Where else can a complainant go – what are the alternatives?

There are at least four possible alternatives for taking of action in the event of a claim for a injury or damage which has been experienced or sustained by a resident of an aged care home or indeed in the course of delivering care and treatment under a funded home care scheme or package of home care services.

1. First there is the possibility of a common law claim for negligencewhich arises from the failure to deliver an appropriate standard of care where there is a pre-existing duty of care to the care recipient.
2. Second there is a potential common law claim for trespass to the person which may arise in the case of treatment or supervision involving physical handling of the resident but in circumstances where lawful consent has not been given. This can arise for example in cases involving persons who do not have full capacity for decision making and where lawful consent can only be given by their duly authorised delegate, such as an appointed guardian, but that consent has either not been sought or has not been given in the particular case.
3. Thirdly in cases where a residential care contract has actually been made at the time the service has commenced or the person has entered into residential care, and assuming that the contract includes promises to render care to a certain defined standard as described in the contract, it may be possible for a claim to be brought for a breach of contract.
4. Finally, there is a cause of action which arises from consumer type transactions in which there are implied guarantees of a certain quality of service. These kinds of claims have arisen from legislation which was the preserve of the States and which historically were contained in statutes providing for the sale of goods.

Since 2011 however, and as a result of cooperative arrangements between the Commonwealth and the States, the Australian Consumer Law has commenced to apply in all states and territories. In that law may be found certain guarantees for the delivery of services which are implied in every contract made within the Commonwealth of Australia, including a contract for residential aged care and the delivery of home care.

Even in cases where there is no written contract, a contractual responsibility for care services may be found to exist and the implied guarantees will also be present and will be enforceable.

The first three alternatives involve bringing a claim in the common law courts. There is a hierarchy for these courts which is partly defined by the amount involved in the claim. In aged care claims the Local or Magistrates Court, often geographically distributed throughout the States and Territories and mandated to deal quickly and efficiently with legal claims, is the most obviously suitable to seek any kind of compensation or damages at law.

The fourth alternative involves a consumer claim for which a special tribunal can normally be identified in every State or Territory, set up to enforce fair trading laws for the benefit of consumers. Those tribunals are now authorised to enforce the Australian Consumer Law which commenced in early 2011.

The Australian Consumer Law (ACL)

A very important feature of the ACL is the provision of service delivery guarantees which apply to every contract in which provision is made for sale of goods and/or the delivery of services in Australia. In the particular case of aged care that means that every residential aged care contract which is made under the Aged Care Act contains a number of guarantees which are implied by force of the law, even if they cannot be found or are not expressed in the document itself.

The ACL also applies to verbal agreements and accordingly, even if no residential care contract was signed when the resident entered into care, nevertheless the basic elements of an agreement for the delivery of care services and accommodation in return for the payment of consideration either directly by the resident or by the Commonwealth government by way of subsidy would be necessary and basic elements in the agreement. Now however, the ACL implies certain basic service guarantees as well.

Service guarantees

The implied guarantees are to be found in the Second Schedule to the Competition and Consumer Act 2010. There are four guarantees and they can be shortly summarised as follows: –

1. sect. 60 Guarantee as to due care and skill

If a person supplies, in trade or commerce, services to a consumer, there is a guarantee that the services will be rendered with due care and skill.

2. Sec 61 Guarantees as to fitness for a particular purpose etc.

(1) If:

(a) a person (the supplier) supplies, in trade or commerce, services to a consumer; and

(b) the consumer, expressly or by implication, makes known to the supplier any particular purpose for which the services are being acquired by the consumer;

there is a guarantee that the services, and any product resulting from the services, will be reasonably fit for that purpose.

3. Sec 61 Service to achieve reasonably expected result

There is a second part to the last guarantee (above) with a slightly different result, namely, If the consumer makes known to the supplier the result that the consumer wishes the services to achieve;

there is a guarantee that the services, and any product resulting from the services, will be of such a nature, and quality, state or condition, that they might reasonably be expected to achieve that result.

The guarantee is not available if the circumstances show that the consumer did not rely on, or that it was unreasonable for the consumer to rely on, the skill or judgment of the supplier.

4. Sec 62 Guarantee as to reasonable time for supply

If:

(a) a person (the supplier) supplies, in trade or commerce, services to a consumer; and

(b) the time within which the services are to be supplied:

(i) is not fixed by the contract for the supply of the services; or

(ii) is not to be determined in a manner agreed to by the consumer and supplier;

there is a guarantee that the services will be supplied within a reasonable time.

The implied guarantees are mandatory

Section 64 of the ACL provides that the guarantees cannot be excluded from a contract and cannot change them.

In a written contract it is possible for a Provider of services to limit the impact of the guarantees by for example re-supplying the services, or paying for them to be re-supplied again. However that can only apply where it is fair and reasonable (for the determination of which there are tests) and where the services are not ordinarily for personal, domestic or household use or consumption. In the case of accommodation and care delivery services, it would be hard to argue that these were not for personal use or consumption.

How do the implied consumer guarantees fit with the Aged Care system?

Here is a table which suggests how the consumer guarantees might apply to some of the more serious issues arising under aged care service care delivery. These are only suggested and any person contemplating a claim must see their lawyer for advice and consider their particular circumstances or those of the particular family member concerned.

Care delivery complaint	(1) Due care & skill	(2) reasonably fit	(3) achieve desired result	(4) supplied in a reasonable time
Pressure sores	x
Infected pressure sores	x	x	x	x
Dehydration	x		x	x
Malnutrition	x		x	x
Aspiration pneumonia	x
Medication error	x		x
Falls/ injury	x
Scalding	x	x
Toileting – delay & neglect				x
Restraint – without consent(see below)	x

The claim of restraint has historically been made under the common law . However it may be possible to present it as a consumer claim on the basis that there has been a failure of care delivery in respect of supervision, staff training and adherence to the rights of residents under the common law, the User Rights Principles made under the Aged Care Act and the protocols for applying restraint as representing best practice in aged care service delivery.

Consumer Claims – Limits on claims

In New South Wales, the Consumer Claims Act limits claims to $30,000. The situation varies from each State and Territory so it is necessary to check on that limit in making a decision about whether or not to go down the pathway which the Australian Consumer Law allows.

This is a general comment about the current state of information available to intending residents and their families and supporters in the aged care system in Australia. I have been moved to think about these issues by the campaign which has begun on the Aged care crisis website.

There is much which is lacking in the system and which is very important to intending residents to know about. Also there is an unsatisfactory system of complaints which also lacks some of the important elements of an open information system so important to consumers of these services. – Rodney Lewis, Solicitor

Transparency, accountability and disclosure under the Australian aged care system – some comments

So what do I mean by these terms, transparency, disclosure and accountability? Here are my definitions which I think are applicable to the context of aged care.

Transparency is an important tool in helping outsiders understand how a system or an organisation works. That is, the rules by which they are governed and how they are expected to operate. In a democracy there are laws available for all to discover and read on how government and its agencies must conduct their affairs. Companies likewise are governed by organisational rules and by law. These are also open to public scrutiny. In Australia, they are the company constitution and the Corporations Act 2001.

Accountability is the process by which organizations are judged when they fail to conform to their obligations. Governments are accountable to Parliament and to the people, at an election. Companies are accountable to the official company regulators, to its shareholders and to the general community through laws such as environment, work safety and so on. In serious breaches the law requires penalties, including fines and even imprisonment for serious offenders. That is what is generally understood by being ‘accountable’.

Disclosure is an important foundation for and a tool to implement transparency. In a company for example, disclosure is mandated for annual reports to shareholders. In a publicly listed company disclosure is driven by public interest and the right to know on the part of intending or potential investors and there is an obligation to keep the public informed continually, by publishing market sensitive information.

Transparency

Lets have a look at the aged care industry. The Commonwealth Aged Care Act 1997 and its accompanying Principlesare assumed to form the entire body of rules which apply to it. This is not so however, because State and Territory law also applies to such important matters as, for example, food preparation through to regulation of health care professionals (nurses, physiotherapists, doctors).

In a sense there is transparency because of the easy access to the aged care laws which are the main rules applying to the industry. The Principles also allow access at all times to the aged care service by the resident’s representative. The resident has access to her/his records. There is more serious concern however about the stage at which a person (an intending resident) is considering entry into and choosing a residential aged care home (RACH) and also when there is a complaint by a resident.

Consider the position of an intending resident. They or their family supporters are about to enter a lifetime commitment for care and accommodation. To make that kind of commitment and choice requires ample and reliable information to enable proper assessment and comparisons. However, at this time in the development of the system in Australia, that kind and quality of information is absent.

There are (currently) three official websites available to those who are computer literate, with information on making a decision about where to make that lifetime commitment. They are the Aged Care Australia website; the Aged Care Standards and Accreditation Agency (ACSAA) website and the Department of Health and Ageing (DOHA) website.

What do each of these official websites tell us?

The Aged Care Home Finder feature on the Aged Care Australia website assists in the selection of a RACH on a geographical basis. Information provided includes the number of high/low care places in each home, whether or not it is certified and the aged care provider accredited under the law, and whether there are sanctions or notices of non-compliance, but no indication that the breaches are current or historical or both.

In both cases the stated advice is for the inquirer to make further investigations and satisfy themselves. This presumably means asking the aged care provider directly. This is just like buying a second hand car…”caveat emptor” or “buyer beware”!

The ACSAA website responds to inquiries for particular establishments and provides reports on inquirer nominated RACHs. Intending residents are entitled to rely upon them. Accreditation reports are published. The bulk of the reports published are a result of the cyclical three yearly Site Accreditation audits. No references appear on this website to sanctions and notices except that if there are any such, and an accreditation report has been done in the meantime, reference is made in the report.

The currency of these reports can be seen in the table below, and it can clearly be seen that this is simply not good enough:

*Source: information sourced as at 10 March 2010 – Aged Care Standards and Accreditation Agency

Facility name	State	Report date (most current published)	Report age (days)
Abbey Gardens	QLD	1 Oct 2007	891
Bellhaven Aged Care Facility	NSW	17 Apr 2007	1,058
Bethsalem Care	SA	6 Jun 2007	1,008
Bupa Dural	NSW	27 Mar 2007	1,079
Christies Beach Residential Care Service	SA	17 May 2007	1,028
City of Bayswater Hostel	WA	27 Mar 2007	1,079
Corumbene Hostel	TAS	30 Jan 2007	1,135
Eventide Homes (Stawell) Inc	VIC	19 Jun 2007	995
Goodhew Gardens	NSW	13 Feb 2007	1,121
Margaret Hubery House	WA	11 Jul 2007	973
Miroma Residential Care Facility	SA	2 May 2007	1,043
Noble Gardens Residential Aged Care	VIC	12 Jun 2007	1,002
Raynbird Place	QLD	31 May 2007	1,014
Regis Corinya	QLD	24 Jul 2007	960
San Carlo Homes for the Aged	VIC	3 Sep 2007	919
Uniting Aged Care – Aldersgate Village	TAS	10 Jul 2007	974

In one random case which I have looked at, the DOHA website disclosed a current set of sanctions. However the ACSAA website report included only the most recent accreditation report, which happened to be dated in the middle of the six month term of sanctions for three apparently serious breaches of standards including health and personal care.

The accreditation report devotes two lines in a 28 page report in which it is stated “the Agency has considered the Home’s recent history of non-compliance and the actions taken…to address (them)”. Since that amount of information is risible and only barely enough to put a reader upon notice, could it be that the vital missing information is available on the Departmental website for this RACH?

The DOHA website provides information on sanctions and notices of non-compliance. This is only right and proper because it is DOHA which issues them (although that is no reason for the ACSAA not to carry the information). If we look at the same RACH as noted above on the ACSAA website, we find that with the details of the Provider are given the “reasons for sanction”. These ‘reasons’ are barely reasons at all, but rather they are references to a ‘serious risk‘ of breach of particular Standards including Management systems, staffing and organisational development” and “Health and personal care“.

These ‘reasons’ could be as trivial as a nurse discovered smoking on duty (‘staffing’), to a failure of proper nursing care leading to serious infection, or perhaps unbearable pain for a resident (‘Health & personal care’). The point is, we are not told. Once again the onus is on the intending resident to make further inquiries and the official regulator of the industry has failed to provide essential information on which to base the decision of choice.

This lack of information and transparency at the critical stage of entry into residential care is matched in some ways by its absence in the complaints handling scheme.

The DOHA website contains the following statement:

“The information, complaint or concern may be about anything regarding the care and services provided to aged care recipients. For example care, catering, financial matters, hygiene, equipment, security, activities, choice, comfort and safety”

(see http://www.health.gov.au/internet/main/publishing.nsf/Content/ageing-complaints-index.htm).

Note that the list does not include health care. It is carefully and deliberately omitted, but the omission is not disclosed.

This is because the Provider is not obliged to provide health care except on the advice and at the direction of the treating health professional. The nursing staff provide health care in accordance with the treatment plan developed in consultation with the resident’s doctor. Accordingly, contrary to all expectations, the CIS will not investigate any complaint about negligent medical treatment. This has come as a shock to some complainants.

The much promoted and well resourced Complaints Investigation Scheme (formerly described as the Complaints Resolution Scheme – resolution being presumably a faint hope in some cases) has many flaws and shortcomings which are not part of or featured in the promotional material which is sponsored by DOHA. These all have a bearing on transparency for the complainant who enters the scheme with unwarranted expectations of results for the individual . These shortcomings include the following:

(i)	There is an insufficient flexibility in the system to cope with serious complaints of individuals. For example, there is no power to make orders to do or to cease doing things which affect the resident, and no compensation for loss, damage, pain and suffering. Yes, there are notices of non-compliance and sanctions at the end of which the Provider may lose its licence, but nowhere in that process is there any satisfaction for an individual complainant;
(ii)	There is a bewildering array of administrative appeals (Aged Care Commissioner, Ombudsman, Administrative Appeals Tribunal) but they are only able to deliver results confined by the CIS Scheme itself, which addresses systemic fault and dysfunctional processes, not individual satisfaction;
(iii)	There is an inability to address actively and satisfactorily complaints about medical carelessness and negligence springing from the actions or omissions of health professionals (see above). There appears to me to be an unannounced dividing line beyond which the CIS will not trespass into matters of professional misconduct, indiscipline and negligence. This is a line drawn by the Constitution but which is by no means an insurmountable barrier to policymakers if they are paying proper attention to the needs of residents first.

Accountability

Lets again look at a couple of areas where accountability is lacking. The first is in accommodation bonds.

When an accommodation bond is taken by a Provider, the Provider is obliged to issue a ‘guarantee’ to the resident, to the effect of confirming intention to repay. As I have written before, this is merely a second promise to pay, since the guarantor in this instance is the Commonwealth of Australia and its taxpayers.

The Australian government by legislation has committed itself to reimburse residents who have paid bonds and have not, or their representatives have not been repaid. The government will seek repayment from the Provider but if the company has been liquidated, and there are no other causes of action against others, such as directors of the company , it will be the taxpayer who pays. The government is then entitled to recover its loss through a levy upon other Providers. Until now no levy has been made, and perhaps there has been no need for one. However, it is likely in my view that some Providers have invested in financial securities which have been devalued or lost in the recent financial crisis. Those losses have yet to come to attention – or have they?

In October 2008 a register of “Homes of Concern” was established by the DOHA. That coincided with the height of the global financial crisis. One may fairly wonder on the grounds of lack of transparency and disclosure whether those “Homes of Concern” appear on any of the websites referred to above, and whether or not they ought to do so. It is precisely because of the lack of transparency that observers of the industry are unable to say.

The second area where accountability is lacking is in the matter of consequences for serious breach. The Aged Care Act 1997 is notable among Commonwealth Acts of Parliament for the absence of any criminal penalties, whether fines or imprisonment, for egregious breach. Such a breach might involve gross misconduct, avoidance or even concealment of acts or omissions, in non-compliance with the Principles, or the Act. There are no mechanisms established, for example a Tribunal which has power and authority, for the claiming of damages, or other orders which might be helpful to a resident who has been injured or has suffered loss or damage in a residential aged care home – high or low care. It is time these issues were addressed. If anyone is in any doubt, have a look at the sad case recently brought to my notice.

Disclosure

In New South Wales there is a requirement to make information available in a formal disclosure statement to a person intending to enter into a retirement village contract. These statements include information on management, legal compliance, services, financial issues and previous breaches of the relevant law. There is no similar requirement in the aged care law and it is left to the individual intending resident or their family and carers to make their own inquiries. However they can only do so by looking at the websites which we have already briefly reviewed. They are for internet computer and English speaking literate people.

To improve the level of disclosure the aged care system requires a carefully designed disclosure statement which not only includes references to breaches but also some reasonably informative details rather than generalities to enable a reasonable understanding of them and thus an informed choice.

They might include details of breaches leading to notices of non-compliance or sanctions which enable an intending resident to discover in respect of each incident over the past three years –

• What were the circumstances of the breach?
• What were the consequences of the breach for the resident?
• What conciliation or mediation has taken place and with what result?
• If there was injury or damage to the resident what arrangements for compensation or resident satisfaction have been made?
• Have there been complaints of a serious nature capable of provoking a notice of non-compliance(NNC), sanction, or a breach of the aged care provider’s responsibilities under the Aged Care Act 1997 which have not been disclosed or reported but have been resolved with the resident or her/his representative?

This last point in the list (above) would cover the situation which apparently has occurred in the case referred to earlier in the article but as a result of which, although leading to a death, no public disclosure of the breaches or events occuring in this facility have apparently been made.

It is still possible for a home to breach their responsibilities as an approved provider, as well as having serious complaints substantiated against the facility, and avoid any public scrutiny whatsoever.

A short review of some ‘granny flat’ cases

In each of the real examples that follow it is interesting to consider whether any or all of them or any part of the conflict which they illustrate, might have been avoided had the parties considered entering into a clear agreement which attempted to contemplate some of the risks and the vagaries of life which eventually brought them into litigation.

These cases emphasise the recurring theme underlying arrangements which, for the most part, fail to take account of the risks, hazards and unforeseen outcomes of personal relationships and personal challenges which ill health, financial difficulty and ultimately death, present to the best of intentions.

There are many such cases and they will continue to occur between elders and their family and friends while ever communications are poor about the mutual intentions of the people concerned and how they intend to deal with the issues which life produces.

The case of M

The elder plaintiff then aged 72, engaged his only son as one of the defendants in litigation over funds which had been contributed to the extension of a house in which the family had lived.

In 1978, the plaintiff who was then aged 69 discussed with his son the possibility of selling his unit, having recently being widowed, and moving into the home owned by his son and daughter-in-law, and in which they were living with their two sons.  The proposal was that the proceeds of sale of the home unit would be used to pay for the construction of a second storey extension to the house which would be occupied by the father.  It was intended he would become a part of the family household, eat with them, do some household chores and help them with their business activities.  It was not proposed that he would have any responsibility for rates or taxes or other household outgoings.

There was no discussion about the living arrangements or what would happen if the relationship broke down or if the son and daughter-in-law wanted to sell the house.  There was no discussion about whether the proceeds of the sale of the unit were meant to be a gift or were characterized in any other way.

From the sale of the unit, an amount of $28,000.00 was put into an account which was eventually paid to the builder who completed the new second storey extension.  Regrettably, soon after the extensions were completed, a breakdown occurred in the marriage between the son and daughter-in-law resulting in the departure of the son from the house.  That was followed by a serious deterioration in the relationship between the father and daughter-in-law as a result of which he also left the house.  A divorce followed and the son remarried and went to live in Melbourne.

The Supreme Court stated:

“… wide(r) equitable principles operate in the present case.  The plaintiff spent money on the defendants’ property in the expectation, induced or encouraged by the defendants that he would be able to live their indefinitely as a member of their family.  This expectation has been defeated by the occurrence of events which were not in contemplation when the money was spent and as a result of which any subsisting right of residence by the plaintiff in the property is now of no practical consequence.  In my opinion, on the facts of this case, it would be unconscionable and inequitable that the defendants should now retain the benefit of the expenditure by the plaintiff of his money on their property free of any obligation of recoupment to him.”

In the event, the court ordered that the plaintiff father have an equitable charge over the house property in the amount which he had invested with interest and in that way, the demands of justice and good conscience were satisfied.

The case of Mrs G

A few years after the case of M, the Supreme Court dealt with a similar case involving mother and daughter. The plaintiff, Mrs G, had only one child who was the first defendant, Mrs C.  Mrs C’s father was Mrs G’s first husband and shortly after separating from him, Mrs G purchased jointly with Mrs C a house in suburban Sydney.  They lived together in the house for about three years until Mrs C was married.

His Honour found that both parties made contributions to mortgage repayments and other outgoings for the house and that they were in fact joint beneficial owners of the property.  Mrs G remarried in 1968 and lived in the house with her husband for many years thereafter.  However, her health began to deteriorate and she had a number of psychiatric illnesses during the 1980’s.

In 1987 Mr and Mrs C purchased a 25 acre property in a rural area south of Sydney where they lived with their four children.  Mrs G’s mental condition however deteriorated in 1991 and Mrs C contemplated the possibility that both her mother and Mr G should move into a nursing home and sell the house.  However, she had a conversation with her mother shortly afterwards to the following effect:

Mrs G:  “Please, do not put me in a home.”
Mrs C:  “Mum, I do not have any room for you.”
Mrs G:  “Well, we should sell the property and build something on your property if you will take care of me.”

In the event, the house was sold and not long afterwards an order was placed for the supply and construction of a demountable home on Mrs C’s rural property.

In all, Mrs C received approximately $150,000.00 of which $38,000.00 was spent on purchasing the demountable home and $36,000.00 on the supporting services and environment including a new sewerage system, water tanks, fences, gates, water and electricity connections, landscaping, furnishings, furniture and removal expenses.

Mrs and Mrs G lived in the demountable home for about 18 months during which Mr and Mrs G suffered ill health. Mrs C incurred expenses in the purchase of a new lawnmower to maintain the grounds of the property including the demountable home together with the construction of additional toilet and shower facilities.

At the end of 1992, Mr and Mrs G moved from the demountable home to another house which they rented and gave as the reason for leaving:

“We had to leave because the relationship between my daughter and myself had deteriorated.”

By then Mrs G was 78 years of age.  The demountable home remained unoccupied thereafter and up to the time of the claim brought by Mrs G against her only child.

After reviewing a number of issues including a claim of undue influence and finding that Mrs G was in fact the sole beneficial owner of the Rozelle property, His Honour then dealt with the claim. The Judge found that the agreement under the Contracts Review Act 1980 between mother and daughter in relation to the use of the mother’s share of the proceeds of sale of the house property was unjust in the circumstances at the time it was made.  In making the finding, His Honour did not intend to be critical of Mrs C.

This is what the Court judgement said:

“In the circumstances existing in May 1991, could there have been a feasible alternative to the course which was taken, if Mrs G had then been represented by some notional independent and informed adviser?

I consider that one such alternative might have been for the costs associated with the demountable home to be funded out of the proceeds of sale of the house property before the division of those proceeds between Mrs G and Mrs C:  in other words, for them to have equally borne those costs, on the basis that Mrs C was obtaining the advantage of improvements being erected on the … property and Mrs G was obtaining the advantage by right of residence for herself and Mr G there with ready access to Mrs C’s assistance.”

The case of Mr M2

This case illustrates the problems involved in the gift of property by a father to his son resulting in alterations and rebuilding to accommodate the father.  The father had a number of children one of whom was the defendant and he invited his son together with his wife and four children to come and live with him.  They lived in a house in Sydney for three years until 1996 when there were discussions about rebuilding the property as a result of which, for reasons partly involving the borrowing of money, the title to the house was put into the son’s name as the sole owner.

The main house on the property was demolished and a new house was constructed after the son raised a substantial amount of funds by way of mortgage.  The father meanwhile declined an offer to live in the house and remained living in quarters attached to the garage.  The residential arrangements continued for a few years when the relationship broke down and the father was ejected from the property and did not return.

In an affidavit sworn by the solicitor who acted on the property transfer and mortgage transactions, reference was made to a conversation which dealt with the intentions of the father and son and why they did not want to put the arrangements in writing:

“The father told me this was a family arrangement and he wanted to transfer the property to his son for free.  The defendant son then told me that the house was very old and in a very poor condition.  He had put in much labour and work to put the house in a livable condition since he moved in to live with his father.  The house still required lots of maintenance and work and he wanted to pull it down, build a new house on the land to get a new car for his father.  The way to carry out this plan was to have the property transferred to his name so that he could apply to the bank for finance with the property as a security.  He also mentioned that he would carry out this arrangement as his father so wished only if the property would be under his sole name.

Both father and son expressed that they did not want to put the family arrangement in writing as they wanted to save costs and being one family living under one room, a Deed of Family Arrangement will not be required.”

The Court found that the elements of the relationship and the arrangement in this case were as follows:

• The father would give his property to the son as a gift;
• The son would demolish the house with funds he borrowed to erect a new house on the property;
• A new house would include a bedroom and ensuite bathroom for the father;
• The father would on completion of reconstruction have the use of bedroom and ensuite and would reside with the son’s family in the house.

The judgment stated that :

“If one adopts a somewhat conservative view of what was said (there is) a need to find some appropriate triggering situation in order to attach a constructive trust.”

In Muschinski (a 1985 High Court case) Justice Deane found the triggering situation was the analogy between the failed personal relationship and a joint venture which failed without attributable blame …

(and in another case in 1994) Bryson, J had the following to say about the expression “attributable blame”:

“A breakdown in personal relationships among the persons who were to share occupancy of a dwelling is the kind of event which can remove the substratum of the whole arrangement.  There were such circumstances in Morris v Morris ((1982) NSWLR 61).”

In the circumstances the Court found that this was an appropriate case where there should be the imposition of a constructive trust in making an order which involved the requirement of a payment of $20,000.00 by the son to the father. This is what the Court said:

“… it should usually be understood … that where personal relationships deteriorate and the sharing of a dwelling becomes intolerable to some or all of those concerned, there is, …, no attributable blame and the case is one for an equitable adjustment.  It is a sadly occurring judicial experience to see that family relationships do deteriorate and become intolerable, and that the persons involved did not foresee that this might happen.”

The best way to take precautions to avoid such outcomes is to carefully consider the risks and the options and then to commit the agreement to writing, preferably with the assistance of a lawyer.

Here are some ideas which should be considered before signing the contract which you must be offered before entering a residential care facility (RCF).

Don’t just say ‘yes’

A residential care agreement should be offered by the approved provider before the care recipient enters residential care. The terms of the agreement are specified by the Aged Care Act (ACA). However, because it is an agreement, and because the agreement must allow the parties to be on equal terms, the terms are not limited by the ACA and it is always possible to make additional suggestions and arrangements which, if agreed, must be included.

What must be included in the contract

• a description of the residential care service, that is the name, address and other identifying features;
• the levels of care and services which the approved provider is capable of providing;
• the fee setting policies and practices of the provider
• respite care arrangements (if applicable)
• termination of residential rights and assistance which will be provided if that occurs;
• complaint resolution arrangements;
• resident’s responsibilities
• any other matters required by the User Right Principles (URP)

The process of making and signing the contract

There are a number of matters which are prescribed for the process of entering a residential care agreement-

Who signs?

• the agreement must be in writing and signed by each party (or the residents representative);

You can change your mind

• there is a ‘cooling off’ period of 14 days within which the care recipient may withdraw in writing;

Who will explain the contract ?

the care recipient (or representative) ‘must be told of and helped to understand’ the terms of the agreement including rights and obligations, services, fees and other charges, by the Provider.

Understanding –not just assurances

The requirement to help the intending resident to understand the agreement is not a requirement for independent advice, much less for legal advice. Perhaps it was thought by the drafter of this provision that being ‘told of and helped to understand’ was all that was necessary.

However, especially in a case where there is a ‘cooling off’ period, lawyers especially would know that it is essential to convey the meaning of the provision and the formal requirements for taking advantage of it. Remarkably, although the right to rescind within 14 days exists, there is no special obligation to be told of it, in the Aged Care Act or Principles.

Being helped to understand does not include advice about what issues are not dealt with and which should be in the agreement, for example, a concept with which lawyers are more familiar with. This is an important issue – see below.

Can I stay in this room permanently?

The agreement must provide for the care recipient’s right to occupy a place at the residential at the residential care service either for a stated period or the remainder of the person’s life time. The term ‘place’ is defined as ‘a capacity within an aged care service for provision of residential care (or community or flexible care) to an individual’.

A contract may refer to ‘Room 4, bed A’ for example, but the ACA does not require it.

Security of tenure

One of the important responsibilities of providers is to provide security of tenure. Indeed, this is a most significant commitment to the care recipient and not to be treated lightly. The right to remain in the residential care service, which is what security of tenure means, is profoundly important for the health and well-being and state of mind of the care recipient.

It is anecdotally claimed that removal of an aged person from their familiar surroundings can seriously adversely affect their health and feelings of security and must be approached with great care.

To be moved for example, from a room with a view of the trees to a room with a view of the neighbor’s back wall, may be distressing to some people.

What issues are not dealt with in the agreement?

There are some important omissions which support the resident and his/her status as a consumer of services, which are not present in the mandatory inclusions in the residential contract. They are clauses which make it possible for residents to bring their own legal proceedings for failure to provide the stipulated rights and services which the Aged Care Act mentions.

Unless these matters are in the contract they are generally not enforceable except by the Department of Health and Ageing, its officers and inspectors. That allows for delays, refusal to deal with the complaint and at the end of it all, if the complaint is upheld, sanctions imposed upon the Provider, rather than compensation to the resident who may have suffered difficulty, discomfort, grievance or even neglect leading to injury or health problems.

Some of the important additional clauses should deal with rights and also with the quality of services. These are only some of the possible additions – there may be many more in each particular contract circumstance.

Read me my rights! What does the contract say?

The Aged Care Act states that everyone who is a resident has rights. The problem is that they are not enforceable unless they are in the resident’s contract. They include-

• Full & effective legal and consumer rights;
• Quality care
• Full health information
• Dignity and respect
• Personal privacy
• Live in a homelike environment
• Move freely within and outside the facility
• Free from reprisal for taking action on rights

How can a resident get “full and effective legal and consumer rights” if complaint is their only option?

What are the meals like?

The Quality of Care Principles contain a detailed description of certain types of services which must be available to residents as appropriate to their health and accommodation status in the Facility. Those services are –

• Hotel services
• Personal care services
• Health care services
• Lifestyle services

It is of little use for a complaint to be made, for example, that meals are always cold by the time they are served, or that there is insufficient nutrition in them to sustain continued health over time, if all that happens is that extra staff are employed after a period of delay and inquiry. It means that nothing is done to ‘right the wrong’ which has occurred.

How to get action on your complaint

To be able to take any action as an individual these matters must be referred to in the residential care agreement as being obligations owed to the resident signing the contract.

The Aged Care Provider should accept that the obligations in the Aged Care Principles which are enforceable by sanction by the Department of Health and Ageing should also be enforceable by the resident themselves, if they choose to take action. That is after all one of the Resident Rights, in any event.

Therefore the Provider should be asked to negotiate changes to the agreement to achieve the Resident’s full and effective legal rights. Doubtless reasonable Providers will agree to reasonable changes.

Arbitration and damages

In the event of a dispute arising over the performance of the Quality of Care commitments or the Resident Rights, the contract should also contain a clause allowing the Resident to call for mediation and if that fails, arbitration. The arbitrator will be authorised, in the normal way, to award compensation for loss and injury. Limits on claims may also be agreed.