New South Wales Supreme Court CITATION : WILLOUGHBY RETIREMENT COMMUNITY ASSOCIATION v FREY [2008] NSWSC 870 HEARING DATE(S) : 10 December 2007; 7 and 14 March 2008 JUDGMENT DATE : 26 August 2008 JURISDICTION : Equity JUDGMENT OF : Hall J at 1 DECISION : Judgment to be entered for the plaintiff. Cross-claim to be dismissed. Minutes of orders to be drafted to give effect to judgment. Damages in accordance with MFI 2 subject to leave to apply with respect thereto. CATCHWORDS : CONTRACT – Resident Agreement for occupancy of aged care premises – requirement to disclose assets – concessional status granted on basis of limited assts – inaccurate information – failure to disclose title/ownership to home unit – contractual provision that concessional status no longer applies if inaccurate information provided – - STATUTORY INTERPRETATION – prospective or retrospective operation of amendments to the Aged Care Act 1997 (Cth) – changes to the aged care system by the Aged Care Amendment (Transitional Care and Assets Testing) Act 1005 – determinations made by Secretary of Department of Veterans' Affairs pursuant to amendments granting concessional status after defendant entered into aged care facility– whether amendments operated retrospectively such that Secretary's determinations applied from date of entry – whether amendments override existing contractual rights – no retrospectivity – Secretary's determinations did not disentitle the plaintiff to residents fees and interest on accommodation bond otherwise payable – calculation of damages re such contractual entitlements LEGISLATION CITED : Aged Care Act 1997 Aged Care Amendment (Transitional Care and Assets Testing) Act 2005 Baker v Regina (2004) 223 CLR 513 Ho v Professional Services Review Committee No 295 [2007] FCA 388 CASES CITED : Maxwell v Murphy (1957) 96 CLR 261 Regina v Kelly (Edward) [2000] QB 198 Wenham v Ella [1972] 172 CLR 454 Willoughby Retirement Community Association v Frey [2007] NSWSC 63 PARTIES : WILLOUGHBY RETIREMENT COMMUNITY ASSOCIATION v SHIRLEY RAE FREY FILE NUMBER(S) : SC No 1513 of 2007 COUNSEL : P: F Kunc SC/J S Emmett D: T D F Hughes SOLICITORS : P: Lindy Kearns D: Johnson Winter & Slattery IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION HALL J TUESDAY 26 AUGUST 2008 No 1513 of 2007 WILLOUGHBY RETIREMENT COMMUNITY ASSOCIATION v SHIRLEY RAE FREY JUDGMENT The first proceedings 1 HIS HONOUR: Proceedings were originally commenced by the plaintiff by Summons against the defendant filed on 16 February 2007. On 23 March 2007, Windeyer J ordered that there be a hearing of three questions arising in the proceedings. 2 Judgment delivered on 15 June 2007 dealt with the separate determination of the following questions:- "(a) Whether the Defendant breached clause 14.04 of the Hostel Resident Licence Agreement entered into between the parties and dated 12 August 2005 (the Agreement). (b) Whether the Plaintiff was entitled to terminate the Agreement by reason of the breach referred to in Order (2)(a). (c) Whether the Plaintiff is entitled to vacant possession of the Townhouse 18, 1 Warrah Street, Chatswood." 3 The questions were respectively answered as follows:- "(a) Yes. (b) No. (c) No." The second proceedings 4 The plaintiff, Willoughby Retirement Community Association (referred to as "the plaintiff" or "WRCA"), by statement of claim filed on 29 August 2007 in the present proceedings, claimed damages based upon the Hostel Resident Agreement in respect of an accommodation bond, monthly retention amounts, interest on both the bond and retention monies, daily resident fees and interest thereon. The claim was subsequently quantified in a schedule (MFI 2). 5 On 19 September 2007, the defendant, Mrs Frey, filed a defence. On 17 October 2007, the plaintiff filed a Reply which joined issue on the following matters: - (1) Mrs Frey's liability under a loan agreement which she entered into with her son and its effect on the value of her assets as at the date of the Hostel Resident Agreement. (2) Whether two determinations made on 15 November 2005 and 14 August 2007 on behalf of the Secretary of the Department of Veterans' Affairs abrogated the plaintiff's rights under the abovementioned Resident Agreement to an accommodation bond. 6 On 19 September 2007, a cross-claim was filed on behalf of Mrs Frey in which she sought damages including aggravated damages from the plaintiff/cross-defendant. 7 In the cross-claim it was contended that, since December 2006, the plaintiff had failed to provide services to her as particularised in paragraph 9 of the cross-claim and, additionally, it was alleged (paragraph 10) that the plaintiff had denied her access to communal areas and facilities and amenities of the care facility. It was further maintained that the plaintiff was responsible for publishing accusations against her on 30 March 2007, 8 May 2007 and 26 June 2007. It was claimed that these acts and omissions constituted breaches of the Hostel Resident Agreement and certain provisions of the Aged Care Act 1997 ("the Act"). 8 Mrs Frey claimed that, in consequence of the alleged breaches, she suffered mental anguish and distress and seeks damages in respect thereof. Overview 9 Mrs Frey became a resident of a townhouse facility provided by the plaintiff pursuant to the abovementioned Hostel Resident Licence Agreement made on or about 28 September 2005 (but incorrectly dated 12 August 2005) ("the Resident Agreement"). The date of her entry into the plaintiff's care facility was 28 September 2005 and she vacated it on 18 February 2008. Apart from the plaintiff's claim for interest, its claim for debt or damages under the agreement was confined to the period of occupancy of the facility, namely, a period of approximately two years and five months or, more precisely, two years and 142 days. 10 The plaintiff and defendant made the Resident Agreement upon the basis that Mrs Frey had "concessional status" (see Item 5 of the Summary of Main Issues in the Agreement and Schedule E). The parties also entered into an accommodation bond agreement which was contained in a schedule to the Resident Agreement (Schedule D, Accommodation Bond). 11 An accommodation bond agreement has the meaning given in s.57-9 of the Act. Subdivision 57-C – Accommodation bond agreements which includes s.57-9 specifies the contents of such agreements which are stated to include "such other matters as are specified in the User Rights Principles", s.57-9(1)(l). Section 57-12 specifies the maximum amount of an accommodation bond. 12 Mrs Frey was classified by the plaintiff as a concessional resident upon the basis of information supplied by her as to her assets. That information was incorrect: Willoughby Retirement Community Association v Frey [2007] NSWSC 63 at [64] and [98]. 13 Mrs Frey's concessional resident status under the Resident Agreement was linked by the terms of the Agreement to the issue as to whether an accommodation bond was payable. If at any time after Mrs Frey entered the care facility she was found not to meet the concessional criteria under the then Act, it was agreed between the parties that Mrs Frey would pay the accommodation bond specified in Schedule D to the Resident Agreement or such lesser amount as specified in Item 5 of the Summary of Main Items. See also Schedule E, Concessional or Assisted Resident Status, clause E1.02. 14 The relevant provisions of the Resident Agreement that determine Mrs Frey's liability in such circumstances to pay an accommodation bond are contained in Item 5 of the Summary of main items and Schedule E, clauses E1.02(d) and E1.03. 15 On the findings made in the judgment of 15 June 2007, the basis for Mrs Frey's concessional status did not exist at the time she made the Resident Agreement. The information that had originally been supplied by Mrs Frey was the subject of inquiry by the plaintiff's staff and was found on or about 27 November 2006 to be incorrect. In the plaintiff's written submissions at [7], it is acknowledged that, at the very latest, Mrs Frey ceased to be a concessional resident when the information was obtained on or about that date. 16 The plaintiff submitted that, having regard to the definition of "minimum permissible asset value" in s.57-12(3) of the Act, Mrs Frey was obliged to pay WRCA an accommodation bond equal to the difference between the value of her assets and $20,500 which is the minimum permissible asset value ($8,114.60 x 2.5 = $20,286.50). 17 On the basis of the matters referred to in paragraphs [79] to [80], the maximum bond WRCA could have demanded in September 2005 was $180,806.65 (being the difference between $20,500 and $201,306.65) and the maximum bond it could have demanded in June 2007 was $210,806.65 (being the difference between $20,500 and $231,306.65). 18 By clause D3.01 of the Accommodation Bond Agreement (Schedule D to the Resident Agreement), the plaintiff is entitled to income earned from the investment of the amount(s) paid by residents in respect of accommodation bonds. On that basis, it claims to be entitled to interest payable under clause D5.01 or D5.02 of the bond agreement "because it will suffer a loss of income if the accommodation bond is not paid by your entry date": clause D3.01. The interest rate payable under clause D5.02(b) is to be "… calculated at the rate mentioned in D5 of the Summary …": clause D5.02(b). 19 Mrs Frey's defence was, in part, based upon the abovementioned determinations made on behalf of the Secretary of the Department of Health and Ageing ("the Department) under amendments that came into force on 1 July 2005 to the Act. Mrs Frey relied in her defence upon the concessional status conferred upon her by those determinations. 20 The 2005 amendments to the Act introduced several important changes to the aged care system. These included the introduction of a process under which the Secretary of the Department of Health and Ageing would determine the value of a person's assets and his or her eligibility for confessional resident status or assisted resident status rather than those matters being by way of an assessment by approved care providers. The amending legislation introduced a 12 month transitional period. The Explanatory Memorandum on the Aged Care Amendment (Transition, Care and Assets Testing) Bill 2005 (p.4) (Exhibit 11) recorded that the transitional period permitted approved providers to continue to take asset assessments in certain circumstances. The transitional period was introduced to prevent delays for people seeking to enter into residential care and to avoid the situation where there was a high volume of assessments to be completed on the commencement of the new arrangements (Explanatory Memorandum, p.4). 21 The Explanatory Memorandum recorded (p.12) that during the transitional period, residents or potential residents may choose to obtain assets assessments from either an approved provider or Centrelink/ Department of Veterans' Affairs. It went on to state:- "… if a person requests an assessment from both Centrelink/DVA and an approved provider, the Centrelink/DVA assessment will override the assessment undertaken by the approved provider for the purpose of determining concessional or assisted resident status." 22 The plaintiff, in its submissions in reply, addressed, firstly, the question as to whether the amendments apply to this case and, secondly, whether, in any event, the Secretary's determinations can operate as contended on behalf of Mrs Frey. Issues 23 The following issues arise on the plaintiff's statement of claim:- (1) Was the plaintiff entitled to receive an accommodation bond from Mrs Frey? That issue depends upon:- (a) The terms of the Resident Agreement. (b) Mrs Frey's entitlement to be classified as a concessional resident, having regard to the monies owed by her under the loan agreement with her son (which in turn raises a question of construction as to the meaning and effect of the loan document). (c) The operation of the 2005 amendments. (2) What effect, if any, did the two determinations made by or on behalf of the Secretary of the Department on 15 November 2006 and 14 August 2007 have upon the plaintiff's entitlement to receive an accommodation bond from Mrs Frey? The answer to that question calls for a close consideration of the Aged Care Amendment (Transitional Care and Assets Testing) Act 2005 ("the Amending Act"), assented to on 21 March 2005, and the operation of the amendments having regard, in particular, to the following matters:- (a) The fact that the Amending Act came into operation on 1 July 2005. (b) Mrs Frey's initial entry into the plaintiffs residential facility on 28 September 2005. (c) The request made by Mrs Frey to the Department of Health and Ageing after her entry to the facility on 14 November 2005 for an "Assets Assessment" (Exhibit 6) and the determination by the Secretary of the Department of Veterans' Affairs dated 15 November 2005 that Mrs Frey's status was "a concessional resident" and that the value of her assets was $5,000 (Exhibit 1). 24 The plaintiff, in reply, argued:- (1) The amendments operated prospectively and not retrospectively to override existing contractual rights of the plaintiff to receive an accommodation bond. Accordingly, the plaintiff contended, the Act did not permit the Secretary to value a resident's assets for a retrospective purpose. To do so in respect of a person already in residential care would give rise to an unjust result in depriving the plaintiff of an accrued contractual right to the accommodation bond under the Accommodation Bond Agreement. (2) That, in any event, it had not been established on the evidence in this case that the Amending Act applied to Mrs Frey's case. 25 The accommodation bond issue, that is, Mrs Frey's liability to pay such a bond, on WRCA's case rests upon two propositions:- (1) That the parties' rights and liabilities depend upon the contractual terms of the Resident Agreement and that WRCA's rights to such a bond are not affected by any determination made by the Secretary under the Act. (2) That Mrs Frey's legal interest in the Cammeray property was not relevantly eroded or removed by the loan agreement with her son. 26 In Mrs Frey's case, it was contended:- (1) The Resident Agreement did not determine the rights of WRCA to an accommodation bond but that the plaintiff's rights or entitlement were restricted and were subject to the provisions of the Act and by the determinations made by the Secretary as to her concessional status. (2) That the determinations of the Secretary (15 November 2005 and 14 August 2007) conferred upon her as at the date of entry on 28 September 2005 into the WRCA facility concessional resident status within s.44-7 of the Act. That determination effectively overrode the contractual right of WRCA. 27 By reason of the reliance placed by Mrs Frey upon the Amending Act and the determinations made by the Secretary of the Department, it will be necessary to examine the terms of the Agreement, the Act, the 2005 amendments and the determinations in some detail. 28 In relation to the quantum of damages, the plaintiff claims that its entitlement arises from the terms of the Agreement, in particular, by Schedule E to the Agreement. Insofar as it alternatively relies on a breach of warranty or a breach of contract, the question on damages is whether the plaintiff is entitled to damages upon the basis that the accommodation bond would have been properly chargeable against Mrs Frey under the Agreement. Reliance in this respect was placed upon the findings made in the judgment in the first proceedings dated 15 June 2007. Evidence 29 In the present hearing, the following affidavits were served and relied upon by the parties:- (1) Affidavit of Lindy Kearns sworn 22 March 2007. (2) Affidavit of Annette Duthie sworn 22 March 2007. (3) Affidavit of Shirley Rae Frey sworn 25 May 2007. (4) Affidavit of Robin Dwight Frey sworn 25 May 2007. (5) Affidavit of Lindy Kearns sworn 1 November 2007. (6) Affidavit of Annette Duthie sworn 30 October 2007. (7) Affidavit of Sandra Brooks sworn 25 October 2007. (8) Affidavit of Maryanne Thoms sworn 30 October 2007. (9) Affidavit of Shirley Rae Frey sworn 5 November 2007. (10) Affidavit of Doreen Gertrude Phillips sworn 5 November 2007. (11) Affidavit of Pauline Louise Henry sworn 5 November 2007. (12) Affidavit of Lindy Kearns worn 26 November 2007. (13) Affidavit of Maryanne Thomas sworn 26 November 2007. 30 A number of documents were tendered and marked as exhibits in the proceedings. 31 Mr T D F Hughes, on behalf of the defendant, also tendered documents separately exhibited to Mrs Frey's affidavit sworn 25 May 2007 (and marked Exhibit A). Findings in judgment 15 June 2007 32 In the judgment delivered on 15 June 2007, the following findings were made:- (1) Information supplied by the defendant in answer to the question "do you own your own home or have you owned your own home within the last two (2) years?" was incorrect. (2) In answer to question 8 "do you own any other real estate?" , the information supplied by the defendant was inaccurate. (3) The inaccurate answers to the above questions constituted a breach of clause 14.04 of the Agreement. 33 The above findings are recorded at [82] to [84] and at [85] of the judgment. 34 In the plaintiff's written submissions, the following issues for determination were identified:- "(a) Is Mrs Frey a concessional resident for the purposes of the HRA? (b) If the answer to question (a) is 'no', what accommodation bond, if any, is WRCA entitled to demand from Mrs Frey? (c) If the answer to question (a) is 'no', is WRCA entitled to the money that WRCA would have received, had Mrs Frey been treated as a non-concessional resident from September 2005? (d) Is WRCA entitled to the resident fees referred to in clause 10.03 of the HRA ( Resident Fee ) for the period from 1 December 2006 to the present? (e) Has WRCA breached the HRA or a duty of care in its treatment of Mrs Frey? (f) Does any breach by WRCA entitle Mrs Frey to refuse to pay any money owing under the HRA? (g) Does any breach by WRCA entitle Mrs Frey to damages?" The Resident Agreement 35 The Resident Agreement incorporated a number of schedules. These included Schedule A – Care and Services, Schedule B – Charter of residents' rights and responsibilities, Schedule C – Complaints and dispute resolution, Schedule D – Accommodation bond and Schedule E – Concessional or assisted resident status. 36 Item 5 in the Summary of main items to the Agreement contained the question "Is an accommodation bond payable?" to which the answer "no" was inserted. It stated that, in the event that the answer was no, "… read Schedules D and E". It then states:- "… where concessional status is proposed at the time of entry, if the Resident subsequent to the first 7 days after admission, is at any time thereafter not to meet to concessional criteria under the Aged Care Act, notwithstanding any provision to the contrary elsewhere contained in this Agreement, the Resident will then pay the accommodation bond specified in Schedule D or such lesser amount so as [sic] ensure that the value of the Resident's remaining assets after payment of such accommodation bond, satisfy the provisions of the Aged Care Act." 37 By item 4, the agreed date of entry referred to in clause 4.01 was 28 September 2005. 38 Clause 4.01 – Agreed date of entry, states:- "You can begin living in your accommodation at the Care Facility on the proposed entry date referred to in item 4 of the Summary. You must take up residence in the Care Facility not more than seven (7) days after the proposed entry date." 39 In clause 5 – Accommodation bond, provided that, if the answer to the question in Item 5 of the Summary is "yes", the Agreement includes the accommodation bond agreement which is set out in Schedule D. 40 Schedule E contains the following provisions:- "E1.01 This Schedule applies if you are classified by the Organisation as a concessional resident … at the applicable time under the Aged Care Act, and subsequently you cease to be a concessional resident … for the purposes of this Agreement because one of the circumstances mentioned in clause E1.02 occurs. E1.02 You will cease to be a concessional residential … for the purposes of this Agreement if, subsequent to your entry:- (a) the Secretary, in determining your eligibility for a concessional resident supplement or for any other reason, makes a determination to the effect that you were not at the applicable time, a concessional resident … ; or (b) a determination by the Secretary that you must not be charged an accommodation bond because payment of the bond would cause you financial hardship, ceases to be in force or is revoked; or (c) a determination by the Secretary that you must not be charged an accommodation charge because payment of the charge would cause you financial hardship, ceases to be in force or is revoked; or (d) the information on the basis of which the classification was made is found to be incorrect or the classification was made in error." 41 WRCA contended that, on the basis of findings made against Mrs Frey, the information provided was incorrect. Such incorrect information had formed the basis upon which she was classified as a concessional resident. WRCA, accordingly, submitted clause E1.02(d) applied in this case and on that basis Mrs Frey was not entitled to concessional status. 42 Clause E1.03 provided that, if an accommodation bond is specified in the Agreement and the recipient ceases to be a concessional resident pursuant to clause E1.02, then the resident will pay the accommodation bond at the time and in the manner specified in Schedule D, subject to detailed provisions as to the amount of payment specified in that clause. 43 Accordingly, it was contended on behalf of the plaintiff that Mrs Frey ceased to be a concessional resident from at least the time its staff discovered in November 2006 that the information furnished by her as to her assets was incorrect. 44 WRCA also contended that whether the Department classified Mrs Frey as a concessional resident for other purposes, was not relevant. The question of its entitlement was simply one of contract between it and Mrs Frey. The Aged Care Act 45 The aged care system in Australia is regulated by the Aged Care Act 1997 and the accompanying Aged Care Principles 1997. Under the Act, the Australian Government pays a residential care subsidy to approved providers for providing residential care to care recipients. Such providers may claim a concessional resident supplement from the Government in respect of care recipients who meet the criteria for concessional or assisted resident status as specified in the Act. 46 The Act is divided into seven chapters. Chapter 3 – Subsidies – provides for a number of subsidies including residential care subsidies which are payments by the Commonwealth to approved providers for providing residential care to care recipients: s.41-1. 47 Section 42-1(1), inter alia, provides that an approved provider is eligible for residential care subsidy in respect of a day if the Secretary is satisfied that, during that day:- "(b) the approved provider provides residential care to a care recipient in respect of whom an approval is in force under Part 2.3 as a recipient of residential care …" (emphasis added) 48 Under Part 2.3 – Approval of care recipients – there is provision that a person must be approved under Part 2.3 to receive, inter alia, residential care before an approved provider can be paid residential care subsidy for providing that care. 49 The question of "approval" of a person as a care recipient under Division 22 of the Act is a matter referred to in the discussion below in relation to s.27 of the Amending Act. 50 Division 57 of Chapter 4 of the Act is entitled What are the responsibilities relating to accommodation bonds? Section 57-1 states that if an approved provider charges an accommodation bond for the entry of a care recipient to a residential care service, several rules must be followed. These are said to relate particularly to prudential arrangements, accommodation bond agreements, the amount of the bond and its payment, treatment of income derived from the bond, deductions from the bond and refunding the bond. 51 Section 57-9 – Contents of accommodation bond agreements, contains detailed provisions as to the terms of accommodation bond agreements including the amount of an accommodation bond that will be payable and other details including the care recipient's proposed date of entry. 52 Section 57-12 prescribes the maximum amount of an accommodation bond for the entry of a person as a care recipient to a residential care service. However, s.57-12(5) (which was added by the Amending Act) provides that subsections (1), (2) and (3) of that section are modified as described in the Table and subsection (4) does not apply:- "However, subsections (1), (2) and (3) are modified as described in the table, and subsection (4) does not apply, if, before entering the accommodation bond agreement, the care recipient gives the approved provider a copy of a determination that:- (a) is a determination under s.44-8AB of the value of the care recipient's assets at a time (the valuation time ) that is before or at the time (the entry time ) the care recipient enters the residential care service or flexible care service; and (b) is in force at the entry time, if that is after the valuation time." 53 I will refer below to this provision on the issue of the claimed retrospective effect of the Amending Act. 54 In the submissions on behalf of WRCA's, emphasis was given to the following:- (1) The fact that the Act does not link the right to receive an accommodation bond to whether or not a person has concessional status under the Act. (2) The fact that s.57-12(1) to (4) gives the right to charge an accommodation bond by reference to the value of a person's assets, and WRCA's reliance upon the Resident Agreement. (3) Section 57-12(5) which, as noted above, provides for accommodation bonds to be charged in accordance with its provisions. (4) The fact that, apart from the question of retrospectivity, s.57-12(5) does not apply as no determination was provided to the plaintiff before entering into the accommodation bond agreement. (5) That s.57-12(5) does not have a retrospective operation. In particular, it does not affect the contractual entitlement of WRCA to an accommodation bond which entitlement it acquired by contract prior to the Secretary's abovementioned determinations. Mrs Frey's submissions 55 Mr Hughes, on behalf of Mrs Frey, based his submissions in relation to Mrs Frey's defence of the claim largely upon the following matters:- (1) The determinations by the Secretary (by his/her delegate) of the Department as to Mrs Frey's concessional status based upon an asset assessment of Mrs Frey's assets. (2) The provisions of the Amending Act. (3) The Request by Mrs Frey for an Assets Assessment dated 11 November 2005 to Veterans' Affairs, the Department of Health and Ageing (Exhibit 6) (forwarded onto and received by the Department of Veterans' Affairs on 14 November 2005). (4) The letter from the delegate of the Secretary of the Department of Veterans' Affairs dated 15 November 2005 addressed to Mrs Frey (Exhibit 1). The letter advised her as to a Residential Status Determination whereby she was "… eligible to be a concessional resident" and as to an "Asset Value Determination" , namely, "the net value of your assets as defined in the Aged Care Act 1997 is $5,000.00" . 56 In relation to the above determinations, the letter from the Secretary's delegate advised:- "These determinations come into force on the date of this letter or the date you enter care, whichever is the earlier. They replace any previous determinations …" 57 Before turning to the 2005 Amending Act, I note a number of matters in relation to Mrs Frey's abovementioned Request for an Assets Assessment. 58 The application (Exhibit 6) required Mrs Frey to provide information, in particular, in relation to "your home" (p.4-6). In relation to the question of home ownership, the standard application required information "if you (and/or your partner) transferred your home. When did this take place? What was the market value of your interest in the home at the time of transfer?". 59 In handwriting against these questions appears the comment:- "Son's home when I could not manage stairs etc." 60 In response to E4 as to loans and money, a handwritten note reads "over the years son has helped us". 61 No information was supplied in response to G4 which sought details of any outstanding debts. 62 Exhibit 6 contains an internal departmental record which includes references to the "Registration date" and "Notification date" as 27 October 2005 and "effective date" as 28 September 2005. The "notification" was recorded as having been by telephone. Under the heading "event text" appears an "SPS in low level aged care 28/9/05, transferred title of former home to son years ago". The title to the Cammeray unit was, in fact, registered in Mrs Frey's name. 63 Exhibit 6 also includes a copy of a handwritten minute of a phone conversation between a departmental officer and Mrs Frey. The minute, inter alia, records:- "… re her former home she said that she and her husband had accrued large debts with their son a long time ago at a time when [sic] interests were high. As a result, they were unable to repay these debts to the son, and had transferred their home to the son to try to make amends for the large debts. As a result, I am reasonably satisfied that Mrs Shirley acquired a granny flat interest several years ago, with this interest now discharged by her admission to aged care …" 64 Mr Hughes observed that the 2005 amendments shifted responsibility for asset testing from approved providers of residential aged care to Centrelink/Department of Veteran Affairs with the amendments in this respect taking effect from 1 July 2005. A 12 month transitional period permitted providers to undertake such assessments in certain circumstances. However, he contended, during the transitional period, residents or potential residents had a choice of obtaining an asset assessment from either an approved provider or from Centrelink or the Department. If that choice was made, the assessment, he observed, would override an assessment made by an approved provider. 65 Mr Hughes, accordingly, relied upon the "request" in Exhibit 6 and emphasised the delegate's letter (Exhibit 1) which stated that the determination was to "come into force on the date of this letter, or the date you enter care, whichever is earlier". Mr Hughes submitted, "The determination therefore takes effect from the date of the defendant's entry into WRCA on 28 September 2008." 66 He contended that the "DVA's assessment":- "… overrides the assessment undertaken by the approved provider for the purpose of determining concessional residency status." 67 Mr Hughes set out in his written submissions dated 3 March 2008 (paragraphs 24 to 28) the following summary of events after the abovementioned determination of 15 November 2005:- "24. On 12 December 2006 the DVA wrote to the defendant stating that as she was still the registered owner of Cammeray Unit 13/15 Morden St Cammeray ( Cammeray Unit ), the defendant's concessional status as determined on 15 November 2005 may be incorrect. The DVA in its letter requested that the defendant provide supporting documentation in respect of the debts owing against the Cammeray Unit. (See exhibit 2) 25. On 5 January 2007 Mr Robin Frey wrote to the DVA enclosing all relevant documentation in respect of the encumbrances on the Cammeray Unit. 26. On 22 February 2007 the DVA wrote again to the defendant, confirming that, by reason of her debts against the Cammeray unit, 'the value of the Cammeray Unit at $325,000 would have been offset by debts and family loans of at least $347,725' and that therefore 'its net value would be nil '. (See exhibit 2) 27. Specifically, the letter reads on page two that:- 'In assessing your assets as at 11 November 2005 even if only the original loan now $370,620.83 is applied against the value of the Cammeray Unit property your equity would be nil and therefore under the home owner test you would be regarded as a concessional resident. Also your net assets would be less than $30,500 therefore under the assets test you would be regarded as a concessional resident.' 28. The DVA has not altered its assessment of the defendant as a concessional resident at any time during the defendant's residency at the plaintiff's facility. In fact, exhibits 3 (22 February 2007) and 5 (14 August 2007) confirm it." 68 Mr F Kunc SC, who appeared with Mr J Emmett of counsel, submitted that Exhibit 1 was irrelevant. In his primary submissions, Mr Kunc relied upon a number of matters including the following:- (1) The entitlement to charge an accommodation bond is dependent upon contract (the Resident Agreement) and the operation of relevant provisions of the Act. (2) The 2005 amendments do not have a retrospective operation. (3) A determination by the Secretary on 15 November 2005 under the 2005 amendments cannot operate with respect to Mrs Frey's entry into the facility provided by WRCA on and after 28 September 2005. (4) The terms of the letter written by the Secretary's delegate on 15 November 2005 (Exhibit 1) cannot contradict the terms of the 2005 amendments so as to give its provisions a retrospective operation. (5) Section 48-8AA which relates, inter alia, to s.44-7 (meaning of concessional resident ) is another provision that ensures that the 2005 amendments do not have retrospective effect. Section 44-8AA(3) and (4) provide:- "3. The resident status determination comes into force on the day it is made or an earlier day stated in the determination to be the day on which the determination comes into force. 4. However, if the determination is made after the person enters the residential care service mentioned in subsection 44-7(1A) or s.44-8(1A), the date stated must not be before the day the determination is made unless the Secretary is satisfied that exceptional circumstances justify the determination coming into force on the day stated." (my emphasis) (6) Exhibit 1 as to the resident status determination does not indicate or refer to any evidence that would establish "exceptional circumstances" justifying the determinations coming into force on a day before the making of the respective determinations. The loan agreement with Mr Frey (1) The terms of the loan 69 Mr Robin Dwight Frey, the defendant's son, gave evidence in relation to an agreement made between him and his mother, the defendant and his late father made in September 1990: Mr Frey's affidavit sworn 25 May 2007. The agreement was in respect of a loan of monies by him to his parents in the amount of $40,000. Mr Frey claims to be an unregistered mortgagee of the Cammeray unit pursuant to the loan agreement, the title to which, as mentioned above, is registered in his mother's name. A caveat was lodged by him on 7 March 2007 based on the loan agreement. 70 That agreement was documented in handwritten form over two pages, a copy of which was in Exhibit RDF-1 to Mr Frey's affidavit sworn 25 May 2007 (Tab 1). The document contained, inter alia, the following details:- "THE LOAN WILL BE REPAID TO SONIA AND ROBIN ON THE FOLLOWING AGREED BASIS 1) IF THE UNIT IS SOLD OR 2) ON THE DEATH OF THE LAST SURVIVING SPOUSE THE PAYMENT OF LOAN WILL BE AS FOLLOWS 16% UNIT SOLD AFTER 1 YEAR REPAYMENT TO BE $46,400 PLUS PRE PAID TAX 2ND YEAR " " " $53,800 " " " " 3RD YEAR " " " $62,400 " " " " 4TH YEAR " " " $72,400 " " " " 5TH YEAR " " " $84,000 " " " " 6TH YEAR " " " $97,400 " " " " 7TH YEAR " " " $113,000 " " " " 8TH YEAR " " " $131,000 " " " " 9TH YEAR " " " $152,000 " " " " 10TH YEAR " " " $176,400 " " " " ROBIN AND SONIA WILL PAY THE COSTS OF ARRANGING FOR THE MORGTAGE DOCUMENTS AND FORMALISATION OF THIS AGREEMENT. THE TERMS AND CONDITIONS OF THIS AGREEMENT CAN BE ALTERED OR VARIED AT ANY TIME BY MUTUAL CONSENT OF ALL PARTIES CONCERNED. CASH MANAGEMENT A/C BRANCH ACCOUNT NO 082 212 34 820-6712 NATIONAL BANK 52 WILLOUGHBY RD, CROWS NEST AGREEMENT TO THE ABOVE DATED: (Signed) (Signed) RUDOLPH FREY SHIRLEY FREY (Signed) (Signed) ROBIN FREY SONIA FREY" 71 It was contended for the plaintiff that the reference to the rate of 16% was not inserted in any operative way but, rather, it was inserted to explain the calculations set out in the document and which applied when the unit was sold. In this respect, it was submitted that the fact that the table has been included (there being no general interest provision) was a clear indicator that if the Cammeray unit was not sold (for whatever reason) until after 10 years, then the repayment amount was capped at $176,400. 72 The plaintiff also contended that the document on its face did not give Mr Frey any right to interest accumulated after 10 years. 73 It was submitted on behalf of Mr Frey that interest continued to accrue until the loan was repaid. On that basis, the figure for repayment would have amounted to approximately $500,000 by the year 2007 and the loan amount (with interest) would have consumed the whole of the value of the property within 16 years. 74 The plaintiff contended that the Court would be slow to construe an agreement for compound interest as operating for an indefinite period in the absence of express words to that effect. The consequence otherwise would be that Mr Frey's parents would, in due course, lose all equity in the property, the initial amount of the loan being comparatively small. It was submitted, that the Court should find that such consequences would be contrary to the parties' intention. 75 On 30 July 1992, Mr Frey made a further loan to Mrs Frey. This was in the amount of $72,293.35. No interest was said to be applicable to this loan (Exhibit SRF-1 to Mrs Frey's affidavit, Tab 5). 76 The parties agreed that the unencumbered value of the Cammeray unit in September 2005 was $445,000 and in June 2007 was $475,000. On the basis of an amount of $176,400 owing by Mrs Frey in respect of the first loan, the value to Mrs Frey of her interest in the unit in June 2007 was said to be $298,600 (that is, agreed value of the unit $475,000 minus $176,400 which leaves the amount of $298,600). 77 The evidence additionally indicates that in September 2005, the value of Mrs Frey's assets was $201,307 made up as follows:- • $268,600 (value of the Cammeray unit), (agreed value of $445,000 less $176400). • Plus $5,000 (money in Mrs Frey's bank account). • Less $72,293.35 (in respect of the loan in 1992). 78 In June 2007, the value of Mrs Frey's assets was $231,306.65 being the above net value of her interest in the unit, $298,600, plus the money in her bank account, $5,000, less $72,293.35. 79 On the above approach, the maximum bond which the plaintiff could have received in September 2005 was $180,807, being the difference between $20,5000 and the above value of Mrs Frey's assets (rounded up), $201,307. 80 The maximum bond that the plaintiff could have demanded in June 2007 was $210,806.65, being the difference between $20,500 and $231,306.65. (2) Conclusions on the loan agreement 81 The agreement between Mrs Frey and her son was expressly stated to relate to a loan of monies and it contemplated that there was to be repayment as set out on p.2 of the agreement and that the loan was to be secured by a registered first mortgage over the unit. The agreement did not provide for transfer of the ownership of or title to the property. 82 I am of the opinion that, as submitted on behalf of the plaintiff, the agreement is to be construed as effectively capping the obligation of Mrs Frey and her late husband at $176,400. I am also of the opinion that there was no basis to imply a term into the agreement that required Mrs Frey and her late husband to pay any additional amount over and beyond that provided for in the agreement itself at the expiration of 10 years. 83 The above conclusions depend upon the proper construction that is to be given to the terms of the loan agreement. In that respect, I have had regard to the following matters:- (1) The agreement was expressed in relatively informal terms to reflect a transaction between family members and is not to be construed as a formal agreement drafted by lawyers. (2) There is a specific contrast between the indefinite period of the loan expressed as "… for an indefinite period of time …" and the repayment schedule which was restricted to a 10 year period. (3) That contrast in itself points against an intention by the parties that there be an indefinite continuing liability to pay interest beyond the period of 10 years if the unit remained unsold. (4) There is no basis in the handwritten agreement or otherwise for the implication of a term to the effect that interest at a rate of 16% would continue to operate on the loan indefinitely after 10 years. (5) The fact that the loan was a comparatively small one ($40,000) and that, if interest continued indefinitely to accrue at a rate of 16%, it could, over time, erode the whole of Mr and Mrs Frey's equity in the property. Such a result is not lightly to be inferred as having been an intended consequence if the unit remained unsold after 10 years. The parties must be taken as being aware that, should either or both Mrs Frey and her late husband survive beyond 10 years from the date of the agreement, then there may then be a need for them (or either one of them) to rely upon or realise their equity in the unit to provide for their support including nursing or other residential care. 84 Accordingly, as at the date of Mrs Frey's entry into the plaintiff's residential facility, the value of her interest in the Cammeray Unit would have been of the order of $268,600 (that is, $445,000 less $176,400 leaving $268,600 equity in the unit). The Amending Act 2005 85 The Explanatory Memorandum to the Aged Care Amendment (Transition, Care and Assets Testing) Bill 2005 (Exhibit 11) recorded that the then proposed amendments to the Act resulted from a recommendation of the Review of pricing arrangements in residential aged care that assessment of residents' or prospective residents' assets should be the responsibility of the Australian Government, and not an approved provider (a person approved under the Act to provide an aged care service) "preferably undertaken prior to entry into residential care" (p.3). 86 The Explanatory Memorandum recorded that, following the review, the Australian Government made a decision that responsibility for asset testing would be transferred from approved providers of residential aged care to Centrelink and the Department of Veterans' Affairs (DVA) in the case of veterans. 87 The Explanatory Memorandum recorded that the asset testing to be done by the new procedure would:- ".. add integrity and fairness. Providers will be relieved of the administrative burden of conducting assessments. Residents would be better placed to make decisions about their care needs because they will have greater certainty about their financial situation prior to entry." (p.3) 88 The Explanatory Memorandum (at p.12) explains the purpose behind the changes to be made to assets assessments as including the fact that approved providers would have a greater certainty as to their income due to Centrelink's or DVA's ability to conduct more accurate assessments. It recorded:- "… this will result in a reduction in the number of incorrect determinations in respect of concessional and assisted status, and the reduced incidence of having these determinations overturned by the Department and the overpaid concessional supplements being recovered." 89 The Explanatory Memorandum included an explanation of the rationale for the extension of the seven day period to a 21 day period for approved providers and residents to enter into an accommodation bond or charge agreement (namely to cater for those cases where it was not possible for an assets assessment to be completed prior to a person's entry to care as, for example, in the case of care in an emergency). The emphasis of discussion in this respect was on obtaining an assets assessment prior to the point at which approved providers and residents enter into an accommodation bond or charge agreement. The point in the discussion was that that would provide those parties with the assets assessment prior to an accommodation bond or charge agreement being made. This is reflected in the observation in the Explanatory Memorandum (at p.13) "this will enable the residents and prospective residents to be better placed to make decisions about their care needs because they will have greater certainty about their financial situation and status prior to entry". 90 The Act was amended in accordance with Schedules 1 and 2 to the Amending Act. Schedule 2, the relevant schedule for the purposes of the present case, is entitled "Assets testing" and it amended the Act in the following respects:- (1) Amendment to s.44-7(1) and (2). (2) Amendment to s.44-8(1) and (2). (3) Introduction of s.44-8AA – "Determination for s.44-7 and s.44-8" . (4) Introduction of s.44-8AB – "Determination of value of person's assets" . 91 In addition to the above, a number of other amendments were made which need not be considered for the purposes of the present case. 92 The amendments made by Schedule 2 operated according to s.27, "Application of amendments, of the Amending Act. I am of the view that s.27(2) applied to the present case. 93 As noted above, in the submissions for Mrs Frey, Mr Hughes relied upon the amendments as providing the statutory basis for the Secretary's determinations of 15 November 2005 and 14 August 2007 and as having thereby conferred upon Mrs Frey concessional status for the purposes of both the Act and the Accommodation Bond Agreement. If the Secretary's determinations were operative from the date of Mrs Frey's entry into the plaintiff's residential care facility, then that could only be by virtue of the amendments having a retrospective operation back to 28 September 2005, the date of Mrs Frey's entry into the care facility. 94 The plaintiff's case, as the overview in paragraphs [9] to [22] indicates, was that the amendments, properly construed, were not retrospective in their operation. In order to resolve that question, being one fundamental to Mr Hughes' submissions, it is necessary to examine the relevant provisions of the Amending Act in some detail. 95 Section 44-7 sets out the criteria for a person to be classified as a "concessional resident". The amendments to that section came into effect on 1 July 2005. Section 44-7, as amended, authorised the Secretary of the Department to make determinations (a "resident status determination"). 96 However, the question is whether the 2005 amendments to s.44-7 applied at all to this case. The answer to it depends upon the provisions of s.27(2) of the Amending Act, in particular, whether the amendments could apply to Mrs Frey after her entry into the residential care service or, as the plaintiff argued, whether the terms of s.27(2) and (3) indicate that they only applied prospectively, that is, before or at the time of entry into a residential care service and not after entry. It is noted that Mrs Frey's "request" for a determination did not pre-date the Resident Agreement but post-dated both it and her entry into the care facility by about two months (that is following her entry on 28 September 2005). 97 Section 27 is in the following terms:- "27. Application of amendments Entry and approval on or after 1 July 2005 (1) The amendments made by this Schedule apply in relation to the entry of a person into a residential care service (whether for the first time or not) if:- (a) the entry occurs on or after 1 July 2005; and (b) the person is approved under s.22-1 of the [Aged Care Act] on or after 1 July 2005 as a recipient of residential care. Entry on or after 1 July 2005, approval before 1 July 2005 (2) The amendments also apply in relation to the entry of a person into a residential care service (whether for the first time or not) if:- (a) the entry occurs on or after 1 July 2005; and (b) the person was approved under s.22-1 of the [Aged Care Act] before 1 July 2005 as a recipient of residential care; and (c) the approval had not expired, lapsed or been revoked under Division 23 of that Act by the time of entry; and (d) the person chooses that the amendments apply. (3) The person is taken to have made such a choice if he or she has applied in the approved form for the Secretary to determine the value of the person's assets at a time that is before or at the time of entry. This does not limit the ways in which the person may make such choice. …" 98 I accept, as submitted by Mr Kunc, that the provisions that are potentially relevant to resolving the issue in the present case are those contained in s.27(2). The first point raised by the plaintiff was the absence of evidence of any "approval" of Mrs Frey as a care recipient under Division 22 of the Act as required by s.27(2)(b). However, Mr Kunc fairly conceded that it may be possible to infer, by reason of Mrs Frey having been a resident of Georgian House, that she, at some earlier time prior to 1 July 2005, had been approved under s.22(1) of the Act. 99 The plaintiff's next point was that the condition expressed in s.27(2)(d) required that a choice be made by the person concerned before, not after, entry into a residential care service. That is an issue of construction of that provision. It was correctly contended for the plaintiff that there was no evidence of a choice by Mrs Frey having been made before her entry into the plaintiff's care facility. 100 Accordingly, it was submitted that the 2005 amendments had not been engaged. In support of its submissions as to s.27(2), the plaintiff pointed to the method prescribed by s.27(3) for a person to make a choice within s.27(2)(d). That method was said to be expressly prospectively, that is, it must be made before or at the time of entry into a residential care service. 101 Reliance was also placed by the plaintiff upon the principle that statutes are presumed not to have a retrospective operation: Maxwell v Murphy (1957) 96 CLR 261, 267 per Dixon CJ. 102 I consider the 2005 amendments, on their proper construction, have a prospective and not a retrospective operation. If the legislature had intended the relevant provisions to be retrospective, one would have expected that that intention would have been expressed especially in such detailed and complex legislation as the Aged Care Act. There are no express terms in the Amending Act to that effect. To give the amendments a retrospective operation would result in many cases to the setting aside of bond accommodation agreements made prior to the determinations and after a person had entered a care facility. That would represent a significant interference with existing contractual rights and potentially would give rise to significant administrative issues. Such consequences are not readily to be inferred. 103 Even if, contrary to what I have stated, it be assumed that the Secretary could make a resident status determination under s.44-8AA on 15 November 2005 such that it operated with respect to a person whose entry into residential care service commenced on 28 September 2005, there still remains a question as to whether either determination made had that effect. 104 I have extracted s.44-8AA(3) and (4), enacted in 2005 in paragraph [68]. It is a significant provision. 105 Section 44-8AA(3) is intended to apply to cases where a person has not, as at the time a determination is made, entered a residential care service. There is no restriction on what day the determination comes into force in such cases. 106 However, the position is otherwise where a person has entered into such a care service. In those cases (of which the present case is one), s.44-8AA(4) provides that:- "… the day stated must not be before the day the determination is made unless the Secretary is satisfied that exceptional circumstances justify the determination coming into force on the day stated." (emphasis added) 107 There is no evidence of "exceptional circumstances" in the present case and there is no evidence of the Secretary having considered whether there were or if he/she did undertake such consideration, that he/she was "satisfied" that such circumstances existed. I do not, with respect, accept the submission made by Mr Hughes in this respect that it is open to me to infer that the Secretary was so satisfied. It may, in certain circumstances, be possible to infer that a decision-maker was satisfied of a particular matter not expressly referred to in the decision being a matter that may be expected to exist on a certain set of facts as a matter of course. It is another to infer that something "exceptional" was considered and determined without an express statement to that effect or without evidence of a particular combination of facts or matters that point in that direction. In Baker v Regina (2004) 223 CLR 513 at 573, [173], Callinan J referred with approval to what Lord Bingham of Cornhill CJ had said in Regina v Kelly (Edward) [2000] QB 198 at 208, namely:- "We must construe 'exceptional' as an ordinary, familiar English adjective and not as a term of art. It describes a circumstance which is such as to form an exception, which is out of the ordinary course, or unusual, or special, or uncommon. To be exceptional, a circumstance need not be unique, or very rare; but it cannot be one that is regularly, or routinely or normally encountered." 108 See also Ho v Professional Services Review Committee No 295 [2007] FCA 388 per Rares J at [23] to [27]. 109 There is no indication in my opinion in the letter by the Delegate of the Secretary (Exhibit 1) that any special, exceptional or unusual circumstances arose for the delegate's determination. The letter of 15 November 2005 is expressed in what appears to be reasonably standard or conventional terms. 110 Section 44-8AA(4), in my opinion, resonates or reflects the presumption against retrospectivity and provides, in a case where a person has entered into residential care before a determination, for a quite narrow "exceptional circumstances" case. 111 The responsibilities relating to accommodation bonds and accommodation charges are set out under Divisions 57 and 57A respectively. These include provisions that agreements entered into by an approved provider with respect to an accommodation bond or an accommodation charge is to be made within a number of days of the resident's entry to care. 112 The provisions of s.57-12(5) as to the maximum amount of an accommodation bond, introduced as part of the 2005 amendments, is also consistent with the proposition that existing accommodation bond agreements should not be made subject to subsequent determinations as to the value of a resident's assets provided for by the Amending Act. That section provides:- "(5) However, subsections (1), (2) and (3) are modified as described in the table, and subsection 94) does not apply, if, before entering the accommodation bond agreement, the care recipient gives the approved provider a copy of a determination that :- (a) is a determination under s.44-8AB of the value of the care recipient's assets at a time (the valuation time ) that is before or at the time (the entry time ) the care recipient enters the residential car eservice or flexible care service; and (b) is in force at the entry time, if that is after the valuation time." (my emphasis) 113 Subsection (5) emphasises the need to give notice of a determination before an accommodation bond agreement is made. To override an accommodation agreement after it is made and after entry would, in my opinion, only be achieved by clear statutory provisions to that effect. The very terms of s.57-12(5) point against the amendments operating to affect agreements made before a Secretary's determination. 114 I, accordingly, am of the opinion that the amendments do not operate to enable the Secretary's abovementioned determinations to operate retrospectively from the date of Mrs Frey's entry into the plaintiff's care facility. The Secretary's determinations made under the amending provisions, accordingly, were not effective to affect the plaintiff's contractual entitlement to a maximum accommodation bond provided for in the Resident Agreement. 115 I therefore, am unable to accept the submission made by Mr Hughes that the Secretary's determinations "overrode" the assessment made by the plaintiff as to Mrs Frey's residential status. There is certainly no provision in the Amending Act that states that effect nor, in my opinion, has such an effect. The Act in its form following the 2005 amendments, still envisaged the possibility that an approved provider may determine whether a care recipient is a concessional resident: see, in particular, s.44-9(b). The plaintiff was entitled under the transitional agreements to undertake an assessment of the value of Mrs Frey's assets as at the date of the Resident Agreement (12 August 2005) and as at the date of her entry into the care facility on 28 September 2005. There was no request made by Mrs Frey for a determination under the amendments until 14 November 2005. 116 On the conclusions I have reached and expressed above, Mrs Frey did not meet the concessional criteria under the Act. By operation of clause E1.02 of Schedule E of the Resident Agreement, she, in accordance with the terms of that clause, ceased to be a concessional resident by reason of the fact that, as specified in clause E1.02(d), subsequent to her entry the information on the basis of which the classification was made was found to be incorrect. 117 The condition contained in clause E1.02 having been met, the obligation on Mrs Frey to pay an accommodation bond arose in accordance with clause E1.03. 118 I, accordingly, do not accept the submission made on her behalf that WRCA had no power to classify Mrs Frey or that any classification made by it was overridden by the Amending Act. Whether the Resident Agreement creates binding obligations 119 In the written submissions for Mrs Frey dated 3 March 2008, it was contended that no contractual obligation arose from the Resident Agreement requiring the defendant to pay an accommodation bond: paragraph [47]. 120 It was further submitted that s.57-9(1) of the Act sets out the matters necessary for there to be an accommodation bond agreement. Insofar as is relevant, s.57-9, Contents of Accommodation Bond Agreements, provides:- "57-9(1) An agreement between an approved provider and a person proposing to enter, or having entered, as a care recipient to a residential care service, … through which the approved provider provides care is an accommodation bond agreement if it sets out the following:- … (h) whether agreeing to pay the accommodation bond entitles the care recipient to specific accommodation or additional services within the residential care service or flexible care service." 121 Mr Hughes' submission was that it was a statutory requirement that each of the matters referred to in s.57-9(1)(a) to (l) must be set out for there to be an accommodation bond agreement. It was contended that there was no compliance in this respect with s.57-9(1)(h). In those circumstances, it was submitted that the accommodation bond agreement in the present case did not comply with the prescribed requirements under s.57-9. It was noted that s.57-11 provided that:- "The requirements of this Division apply despite any provision of an accommodation bond agreement, or any other agreement, to the contrary." 122 Mr Hughes, in his written submissions, then contended:- "49. In circumstances where the plaintiff's 'Accommodation Bond Agreement' … does not qualify as an ABA under the Act, it is submitted that the plaintiff would have no entitlement to charge the defendant an accommodation bond, even if the defendant was not a concessional resident. 50. The answer to question D is that an accommodation bond is not payable by the defendant, nor was an accommodation bond ever payable. As such, no associated amount (interest, retention amounts, interest on the retention amounts) is payable." 123 The plaintiff contended that the requirements of s.57-9(1)(h) had been satisfied. In this respect, it was submitted:- (1) The Resident Agreement stated the specific accommodation to which Mrs Frey would be entitled under the Agreement, namely, Townhouse 18, reliance being placed upon item 6 in the "Summary of Main Items" referring to that townhouse. (2) The services were clearly stated in the Resident Agreement. In that respect, reliance was placed upon Schedule A, "Care and Services" . 124 It was submitted on behalf of the plaintiff (written submissions, 14 March 2008, paragraph 46(b)) that as a matter of construction, s.57-9(1)(h) creates a positive obligation, namely, a requirement to spell out for an aged care recipient any additional benefits that flow from paying an accommodation bond. It was also argued it did not impose the corresponding negative obligation and did not require the agreement to spell out that there were no additional consequences flowing from the payment of an accommodation bond. 125 I do not consider that there has been a failure to comply with s.57-9(1)(h). The agreement properly identified the specific accommodation that Mrs Frey would be entitled to occupy as a care recipient and it did set out in reasonable detail the particular care and services to which she would be entitled. Parts 1 and 2 of Schedule A operate in accordance with clause 8, "Services and Facilities of the Resident Agreement". 126 The Schedules, including Schedule A, "Care and Services" and Schedule D, "Accommodation Bond" are all stated to form part of the agreement (second paragraph, p.2 of the agreement). Section 57-10 of the Act permits accommodation bond agreements to be incorporated into other agreements. Read together, I consider that the accommodation bond agreement does make provision for the matters to which s.57-9(1)(h) is directed and, accordingly, I do not accept the submission that the accommodation bond agreement relied upon by the plaintiff fails to qualify under s.57-9. 127 In the submissions for Mrs Frey, there was a further matter which was said to constitute a breach of s.57-9(1)(l). That provision provides that an agreement between an approved provider and a person proposing to enter or who has entered as a care recipient to a residential care facility is an accommodation agreement if it sets out, inter alia:- "(l) Such other matters as are specified in the User Rights Principles." 128 It was contended for Mrs Frey that there was an obligation on the provider to provide a care recipient with information about the prudential arrangements applying to the accommodation bond balance. 129 Part 4, Accommodation Bonds in the User Rights Principles 1997 made under s.96-1(1) of the Aged Care Act contains provisions concerning the requirements as to payment and protection of accommodation bonds: s.23.27A. Division 1 of Part 4 specifies information about accommodation bonds that an approved provider must provide to a care recipient before the care recipient enters the provider's residential care service: s.23.27. 130 Section 23.28(2) provides that if the residential care service charges an accommodation bond and the person is not a concessional resident, the approved provider must give the care recipient the information about the accommodation bond set out in that section. One of the matters about which information is to be given is expressed as follows:- "(i) The prudential arrangements applying to the accommodation bond balance;" 131 Schedule D to the Resident Agreement (D6) deals with the plaintiff's entitlement to deduct monthly retention amounts from the accommodation bond balance and clause D7 provides for a refund of the accommodation bond balance in circumstances referred to in D7.01. 132 In D12, provision is made as follows:- "The Association will comply with the prudential requirements of the Aged Care Act 1997 relating to accommodation bonds including a requirement to provide a written statement regarding its compliance to you within four (4) calendar months after the end of each financial year." 133 Section 57 of the Act sets out the general prudential requirements: see, in particular, s.57-4. Part 4 Division 3 of the User Rights Principles refers to the prudential standards for the purposes of s.57-4 of the Act. 134 The provisions of s.23.28(2)(i) of the User Rights Principles relied upon by Mr Hughes does not, in terms, require a care provider to provide a copy of the prudential standards set out in the User Rights Principles. The agreement in question in D12 of Schedule D plainly enough states that the prudential requirements under the Act will be complied with. The prudential standards, by reference to the principles, are those picked up by the provisions of s.57-4 to which I have referred. 135 In those circumstances, I do not consider that it can be validly contended that the plaintiff did not "provide information" as to the prudential arrangements that apply to the accommodation bond balance. Resident fees 136 The Resident Agreement contains provisions entitling the plaintiff to charge interim resident fees in accordance with clause 10.02 of the Agreement (at the specified rate set out in the Summary of main items, that is, $780.08 per 28 days (payable in advance). 137 Clause 10.03 provided the plaintiff with the right to charge Mrs Frey "the maximum daily amount worked out and charged from time to time in accordance with the Aged Care Act". 138 On 1 December 2006, the plaintiff purported to terminate the Resident Agreement. In the judgment of 15 June 2007, it was determined that the plaintiff was not entitled to terminate it, having regard to the provisions of clause 23.6(1) of the User Rights Principles and clause 17.06 of the Resident Agreement. 139 On 18 December 2006, Mrs Frey offered to pay a resident fee due under the Agreement. The plaintiff refused to accept that fee, it was said, by reason of its mistaken view that it had validly terminated the Resident Agreement. 140 The plaintiff contended that it did not say or do anything to suggest that it waived its rights under clause 10 of the Resident Agreement in respect of resident fees and that, so long as the Agreement was on foot, it was entitled to such fees. 141 Following the judgment of 15 June 2007, the plaintiff, having appreciated that it had not validly terminated the Agreement, sought a Resident Fee from Mrs Frey for the period since 18 December 2006. 142 In MFI 2, the daily resident fees were calculated as follows:- (1) From 18 December 2006 to 19 March 2007 ( first period , being 92 days), the daily fee was $29.98 (that is, $2,750.80 over that period). (2) From 20 March 2007 to 19 September 2007 ( second period , being 185 days), the daily fee was $30.77 (that is, $5,831.20 over that period). (3) From 20 September 2007 to 17 February 2008 ( third period , being 151 days), the daily fee was $31.52 (that is, $4,759.52 over that period). 143 According to MFI 2, the total resident fees claimed as payable amounts to $13,341.52. The plaintiff also claims interest on the daily Resident Fees. The total interest as set out in MFI 2 in respect thereof is the amount of $293.69. 144 MFI 2, however, revealed two incorrect calculations. Accordingly, the corrected mathematical calculations are as follows:- (1) From 18 December 2006 to 19 March 2007 (first period, being 92 days), the daily fee was $29.98 (that is, $2,758.16 over that period). (2) From 20 March 2007 to 19 September 2007 (second period, being 185 days), the daily fee was $30.77 (that is $5,692.45 over that period). (3) From 20 September 2007 to 17 February 2008 (third period, being 151 days), the daily fee was $31.52 (unchanged as $4,759.52 over that period). 145 Consequently, the total resident fees that may be claimed by the plaintiff as payable amounts to $13,210.13. 146 In the written submissions on behalf of the plaintiff (paragraphs [92] to [94]), it was contended that, so far as the breaches alleged by Mrs Frey against the plaintiff are concerned, that its entitlement to Resident Fees exists upon the basis that Mrs Frey's obligation to pay money to the plaintiff is conditional only on substantial compliance by the plaintiff with the Resident Agreement. 147 The plaintiff's claim for Resident Fees is set out in paragraphs [16] to [25] inclusive of its submissions. In paragraph [17], the plaintiff states that, from 18 December 2006 to 15 June 2007 (the date of judgment), it was under the mistaken impression that the plaintiff had validly terminated the Resident Agreement and did not seek or accept payment of the Resident Fees in respect of that period. The plaintiff claimed that Mrs Frey had, from December 2006 to the date of the statement of claim, freely accepted the accommodation and services provided by the plaintiff. 148 The plaintiff further contended that, for the period 14 December 2006 to 15 June 2007, Mrs Frey knew the basis upon which the plaintiff did not seek or accept payment of the Resident Fees in respect of the period of the claim. Reference was made in that regard to Ms Kearns' evidence as to information conveyed to Ms June Rollestone as to the basis upon which Resident Fees had not been claimed from Mrs Frey. 149 Following the judgment of 15 June 2007, the plaintiff, on or about 25 June 2007, informed Mrs Frey that the plaintiff was agreeable to maintaining the Resident Fee for her at the rate permitted by the Act while she remained in its care looking for alternative suitable accommodation. 150 The plaintiff's contractual right to Resident Fees in accordance with clause 10 of the Resident Agreement was not the subject of any dispute in submissions made on behalf of Mrs Frey. That is understandable in light of Exhibit 12, a letter of 7 December 2007 written by Mrs Frey's solicitors to Ms Kearns in relation to the various claims made in the statement of claim. It is conceded in that letter that what is referred to as "Daily care fees" was a claim to which the plaintiff had prospects of success in recovering in the proceedings. The solicitors for Mrs Frey estimated that the total amount from December 2006 up to the date of that letter was approximately $10,000. Mrs Frey's solicitors contended that any daily fees found to be due and owing to the plaintiff would be set off against the alleged non-compliance by the plaintiff with statutory and other requirements for the provision of care of a particular standard. That non-compliance was particularised in Mrs Frey's cross-claim. 151 In the circumstances, I consider that the plaintiff did not waive its right to charge resident fees and was not estopped from claiming such fees in accordance with clause 10 of the Resident Agreement. Its reason for not having previously claimed them from her were explained by Ms Kearns in her evidence. No material detriment to Mrs Frey based on any reliance by her on any conduct by WRCA was established. In those circumstances, no estoppel, in my opinion, arises. I, accordingly, propose to allow the claim for Resident Fees as set out in MFI 2 (but with arithmetic corrections having been made) and the interest thereon. The cross-claim 152 The cross-claim filed on behalf of Mrs Frey on 19 September 2007 proceeded upon the basis that, since December 2006, the plaintiff was in breach of the Resident Agreement in failing to provide the services identified in paragraph 5 of the cross-claim. The alleged breach was said to relate to the obligation for the provision of meals of adequate variety, quality and quantity for each resident, the provision of laundry services and other matters particularised in paragraph 5. In particular, it was alleged by Mrs Frey in the cross-claim that the plaintiff had failed in the following respects:- (1) Failed to provide three hot meals per day to her on a regular basis, including on one occasion failing to provide her with a meal or drink for 20 hours after she returned to the care facility from hospital. (2) On several occasions, failed to provide proper eating utensils with her meals so that Mrs Frey was unable to eat her meals. (3) Failed to provide Mrs Frey food of an adequate variety. (4) Serving Mrs Frey's meals by leaving them on her bed rather than on a table. (5) Removed Mrs Frey's mailbox so that she was unable to receive mail. (6) Failed to promote Mrs Frey's dignity and actively diminished her dignity by:- (a) Publicly humiliating her in Bulletins circulated to residents and staff of the care facility from time to time. (b) Permitting staff to treat Mrs Frey in an undignified manner, including by remaining uncommunicative in the presence of her or behaving in a rude manner towards her. 153 In respect of the publications, the plaintiff particularised WRCA Bulletins to residents and staff dated 30 March 2007, 8 May 2007 and 26 June 2007. 154 In addition, the cross-claim alleged (in particular, paragraph [10]) that since 1 December 2006 and in breach of clause 6.05 of the Resident Agreement, that Mrs Frey was denied access to communal areas, facilities and amenities of the care facility and refused her entry into the communal dining room. In this respect, Mrs Frey relied upon a letter from the plaintiff to her dated 1 December 2006 and submissions made by Mrs Frey to the Department. 155 Mrs Frey claimed (paragraph 11 of the cross-claim) that she had been harassed and publicly humiliated by the plaintiff who had published accusations including, in particular, that she had lied about her financial situation and misled the plaintiff in her assessment as a concessional resident. 156 In support of the cross-claim, Mr Hughes relied, in part, upon the User Rights Principles 1997. He specifically referred to s.23.25, Rights of care recipients. In particular, s.23.25(1)(f) provides that a care recipient has the right:- "(f) to be able to take part in social activities and community life as the care recipient wishes." 157 Mr Hughes contended that the rights provided for in Division 3 of the User Rights Principles:- "… were not fully accorded to the defendant and the instances are referred to in the affidavit material. They might be regarded as trivial by some but in the context of a woman of this age who has rights and is said to have this charter of rights and responsibilities … she wasn't accorded those rights and all we say about that in the cross-claim is put very shortly, residency fees were tendered, refused by Ms Kearns … and in the cross-claim what, in effect, we're saying is there may be some offset against the residency fees by the breaches found of those rights that she should have enjoyed in circumstances where everything got a bit heated and the correspondence became vitriolic." (transcript p.93 to 94) 158 In her affidavit sworn 5 November 2007, Mrs Frey addressed the specific subject matters in relation to the cross-claim. In respect of "meals of adequate variety, quality and quantity", Mrs Frey provided limited information confined to two particular occasions. First, on 23 July 2007 when she came out of hospital, she said that there had been no food brought to her that night. She did not receive any food until the next morning. She also referred to an occasion when she came out of hospital on 16 October 2007 when she says that no food had been provided to her upon her return. Mrs Frey also stated that she had never been brought supper. 159 Apart from these instances, general allegations were made concerning limited issues. It is sufficient to say here that, having regard to the fact that the plaintiff was a resident of the care facility for some two years and 142 days, the complaints made by Mrs Frey in that context do not, in my opinion, establish any substantive or ongoing breach by the plaintiff of its obligations to the defendant. That does not mean that I do not accept Mrs Frey's account of the particular occasions she identifies (23 July 2007 and 16 October 2007). However, even accepting that evidence, it does not, in my opinion, in light of the evidence of Ms Thomas referred to below constitute a breach of the Resident Agreement or of the User Rights Principles and certainly not a substantive one. 160 In respect of "social activities and community life", Mrs Frey refers to her having not been invited to the Melbourne Cup function in November 2007. Beyond that matter, her affidavit does not provide any sound basis for a finding that she was prevented for any length of time from entering onto common property of the care facility or enjoying the communal areas. 161 In relation to the issue of "public humiliation", I have examined the Bulletins attached to her affidavit dated 30 March 2007, 8 May 2007 and 26 June 2007. It is sufficient to say that I do not consider that the statements contained within those Bulletins amount to an attack upon Mrs Frey. In their terms, I do not consider that the statements made impugn or ridicule Mrs Frey in the way in which she contends. I do not consider that there was any breach by the publications of the plaintiff's obligations to treat Mrs Frey with dignity. 162 Mrs Frey refers to certain residents who she said made unpleasant remarks to her. There is no suggestion in the evidence that any such persons were speaking on behalf of or with the knowledge or approval of the plaintiff. 163 The evidence of Ms Phillips and of Ms Henry are limited to one or two isolated occasions and, in the context of the whole period of the defendant's residency, I do not consider they constitute evidence of a breach of the Resident Agreement by the plaintiff. 164 By clause 8.01 of the Resident Agreement, the plaintiff's obligation was to provide "the care and services required by the Aged Care Act according to your needs, as assessed from time to time". 165 Section 54-1(1)(a) of the Act also required the plaintiff to provide the care and services specified in the Quality of Care Principles 1997. 166 Schedule 1 set out the services to be provided to a resident who requires the services in question and the plaintiff was bound by clause 18.6(1) of the Quality of Care Principles to provide for such services. 167 The plaintiff relied upon the affidavit evidence of Annette Duthie sworn 30 October 2007, the affidavit of Sandra Brooks affirmed 25 October 2007 and the affidavit of Maryanne Thomas sworn 30 October 2007. 168 The evidence in the affidavits establishes the practice followed by the plaintiff in its conduct of the facility. It was argued on behalf of the plaintiff that this practice, if followed, satisfied the services required to be provided by the plaintiff by the Resident Agreement and by the Act. 169 The plaintiff addressed each of the specific allegations made by Mrs Frey in its written submissions in paragraph 79. It was contended that none of the allegations disclose a breach of the agreement and that the evidence, in any event, did not show that Mrs Frey's needs were not met. 170 In Ms Thomas' affidavit, each of the complaints made by the defendant is addressed. It is unnecessary to set out all of the details of the matters contained in her affidavit sworn on 26 November 2007. Ms Thomas does specifically address the occasions when Mrs Frey came out of hospital. She states that, in relation to the occasion, in July 2007, neither she nor, so far as she was aware, were any member of staff advised of Mrs Frey's expected return to the care facility from Royal North Shore Hospital. She stated that the first time that any staff member realised that Mrs Frey had returned from her hospital stay in July was when she telephoned a staff member at approximately 6.45 pm on the day of her arrival back at her townhouse. A copy of a hostel diary note of 20 July was annexed to her affidavit which confirmed the phone call from Mrs Frey at 18.45 hours. Ms Thomas stated that, so far as she was aware, breakfast was delivered to Mrs Frey the following morning and her normal routine resumed. 171 In relation to the occasion in October 2007, Ms Thomas said that Mrs Frey was in hospital between 9 October and 16 October 2007. She stated that from the time of Mrs Frey's return from hospital, she was offered meals but refused to refused to accept them other than potato and gravy as she had specifically requested and this was duly provided for her. A copy of the progress notes made on 18 October 2007 notes the food delivered. Ms Thomas added that she personally delivered bread, butter and vegemite to Mrs Frey as she had requested. 172 In relation to general activities, Ms Thomas stated that Mrs Frey was encouraged to walk to assist in general health and lifestyle. Copies of progress notes showing 15 examples of assisted walks and offers to walk with her in the grounds were annexed to her affidavit. 173 In relation to social activities, Ms Thomas stated that she had never told Mrs Frey that she was not welcome to attend WRCA activities. She stated, however, that she did not encourage her to attend WRCA social activities because of continuing complaints by the residents to her and her staff concerning Mrs Frey's behaviour. 174 The affidavits concerning the matters in dispute on the cross-claim were not the subject of cross-examination. The parties were content to leave the evidence as it appeared from the affidavits rather than embark upon what I believe would have been an unproductive exercise of detailed analysis by cross-examination. Having reviewed the various matters raised by Mrs Frey and the evidence adduced on behalf of the plaintiff, I do not consider that Mrs Frey has established the breaches alleged by her in the cross-claim. Damages (1) The bases for the damages claimed 175 In the event that the plaintiff was found to be entitled to claim on the basis that Mrs Frey had breached the terms of the Resident Agreement, Mr Kunc indicated that the plaintiff provide short minutes of orders to give effect to the findings and conclusions expressed in the judgment. A number of matters concerning the plaintiff's entitlement to damages and the quantum of damages are referred to below. 176 The plaintiff's case on damages was, as noted above, argued on two bases. The first, or primary basis, relied upon the provisions of the Resident Agreement and, in relation to its entitlement to interest, upon Schedule E, in particular in that respect, clause E1.03. That clause provides for a requirement to pay an accommodation bond in accordance with its terms in the event that a care recipient ceased to be a concessional resident pursuant to clause E1.02. It provided that:- "You will cease to be a concessional resident … if subsequent to your entry:- … (d) the information on the basis of which the classification was made is found to be incorrect or the classification was made in error." 177 The second or alternative basis was a claim for damages by reason of a breach of clause 14.04(a) of the Resident Agreement. This provided, in part:- "You make the following promises to the Association regarding information which has been given by you … relating to your assets … (a) the information is accurate to the best of your knowledge …" 178 It was contended that in this latter respect that any damages would be awarded on a similar basis to that applicable to the plaintiff's entitlement on the first or primary basis relied upon under clause E1.03. 179 The plaintiff claimed that damages should be calculated in relation to the monthly retention amounts and the interest calculated on the accommodation bond from the date of entry, 28 September 2005 for the period of two years and 142 days (that is up to 18 February 2008). The damages claimed and set out in MFI 2 have been calculated on this basis. 180 I note that the claim based on the asserted entitlement to interest on the accommodation bond and monthly retention amounts is calculated and recorded in MFI 2 in the amount of $40,326. The claim, in that respect, is based upon the provisions of D5.02 and D5.03 of Schedule D and clause 16.01 of the Resident Agreement (which deals with interest on default in payment) and the cross reference in that clause to item 8 in the Summary of Main Items set out in the Resident Agreement which specified an interest rate of 9.68% per annum. 181 The contractual provision governing the plaintiff's entitlement to interest on the accommodation bond and monthly retention amounts is set out in clause D5.02 of Schedule D which provides, inter alia, that interest is payable:- "… for a period commencing on the first day of the month in which your entry day occurs and ending on the last day of the month during which you cease to be provided with care at the Care Facility." 182 Section 57-18 of the Act provides that an approved provider may retain income derived from the investment of an accommodation bond balance in respect of an accommodation bond paid to the provider. Section 57-18(2) provides:- "Despite s.57-16, if a care recipient pays an accommodation bond to an approved provider after the due date (see subsection (6)), the care recipient may be required to pay to the approved provider an amount representing the income the approved provider could be expected to have derived, through investing the accommodation bond balance, during the period:- (a) beginning on the due date; and (b) ending on the day on which the accommodation bond was paid." (2) Calculation of damages 183 I have earlier referred to the plaintiff's schedule of damages (MFI 2) which seeks total damages on the basis set out in the schedule in the amount of $62,062.74 (although this figure will now need to be altered to take into account the mathematical corrections in respect of the daily resident fees and any consequential amendments flowing from this). 184 As to damages payable at common law in the event of breach of contract, in the present case the breach or broken promise arose in terms of clause 14.04(a) of the Resident Agreement, which in part, is reproduced in paragraph [177]. 185 The parties, by that Agreement, contemplated that, in return for performing its obligations that where a bond was payable, the plaintiff would be entitled to receive income by way of interest generated by an investment of the bond. The plaintiff's loss in not having received a bond during Mrs Frey's period of residence in the amount referred to earlier in this judgment, therefore, not only gave rise to a foreseeable loss of revenue but it was one that was contemplated by and provided for in the Agreement. On this basis, the damages to which the plaintiff is entitled would include the loss of the income by way of interest on the bond: see Wenham v Ella [1972] 172 CLR 454, 460. This entitlement, however, would, however, be subject to any limiting statutory and/or contractual provision including a limit on the interest rate specified in the event of breach. 186 I am of the opinion that the plaintiff has established an entitlement to damages under the particular heads of claim set out in MFI 2. 187 In evidence, a pre-contractual document in Exhibit "LK-1" to the affidavit of Ms Kearns sworn on 22 March 2007 (p.40) is entitled Financial Information and was addressed to Mrs Frey. It refers, in the event of incorrect information being provided by an applicant to the plaintiff, to the contractual and other consequences of such incorrect information. These are stated to include "… an administrative charges [sic] will be levied, together with the appropriate interest for the period of occupancy of three (3) months, whichever is the greater". 188 I have referred to the document in the context of damages for more abundant precaution, but, in doing so, I also note that there have been no submissions made about the document in the course of the submissions on liability. 189 I direct the parties to confer with a view to agreeing upon short minutes of orders to give effect to this judgment. 190 In the event that the parties are unable to agree on the basis or bases for the calculation of damages, then liberty is granted to either party to apply to have the matter re-listed on short notice. 191 I will hear any submissions made on the question of costs. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.