MENTONE GARDENS AGED-CARE FACILITY

Written on the 6 August 2014

The PRESIDENT -- Order!

I advise the house that pursuant to an order of the Council on 5 August, general business orders of the day 1 and 2 are to be moved and debated concurrently.Ms MIKAKOS (Northern Metropolitan) -- I move:

    That the house takes note of --

(1) the Minister for Health's answers to a question without notice and supplementary question on 28 May 2014 relating to Mentone Gardens liquidation;

(2) the Minister for Health's answers to a question without notice and supplementary question on 29 May 2014 relating to a Mentone Gardens liquidator FOI request.

 

Thank you, President, for allowing this concurrent debate. It is sensible that we consider these two take-note motions in a cognate debate, as they relate in substance to the same matter. It is useful to give a bit of background to this matter in coming to the questions that were posed to the minister and the minister's response to those questions.

The motions relate to the collapse last year of the supported residential service (SRS) Mentone Gardens and specifically to the extraordinary lack of cooperation shown by the Minister for Ageing, Mr David Davis, throughout the entire process of the liquidation and his lack of response to the house and, ultimately, to the bondholders, who have been severely affected by the collapse of this SRS.

Mr Lenders has spoken eloquently in the past about the plight of his local constituents. He has taken the trouble to meet with them and has had numerous discussions with them. He has received correspondence, pleas and requests for assistance in this matter. We are talking about some individuals who are very advanced in age. In some cases some of the bond holders who lost their money when Mentone Gardens collapsed have passed away, and it is now the family members who are seeking to pursue these issues and get some explanations from the government and from the department.

By way of background, on 12 June 2013 Parklane Assets Pty Limited, trading as Mentone Gardens, was placed in voluntary administration with debts of more than $4 million. The company subsequently went into liquidation on 18 September 2013, leaving around 32 elderly residents at risk of losing security deposits that in some cases were as much as $400 000. I have subsequently raised these issues many times in the house through questions to the minister. I have done so because I remain concerned about those 32 elderly residents who have been affected by this collapse. As I said, some of these residents have since passed away, but there are nevertheless families who remain affected.

These former residents and family members have not been getting any detailed response to their requests for information, so in October last year I asked the minister when he first became aware of the financial troubles at Mentone Gardens.

I received his response one month later by way of a letter in which he advised that on 11 January 2013 his department had been notified by a family of a deceased resident that they were pursuing a refund from the proprietary company. There were media reports at the time in which the department indicated that it had been investigating Mentone Gardens prior to it having gone into voluntary administration, so I subsequently sought to extract this information from the minister.

On 28 May I asked the minister whether his department had any reason to investigate Mentone Gardens or its proprietary company in respect of their financial operations prior to 11 January 2013. The minister failed to respond in any substantive way, so we still do not know whether there was contact with the department prior to 11 January 2013. We do not know whether the department took any action to ensure that the residents of Mentone Gardens did not lose their security deposits. We do not know whether there was any action taken before January 2013. These are very important issues that the government needs to make clear when responding to the former residents about the circumstances of the collapse of Mentone Gardens.

I understand that the residents' security deposits were not placed in a trust account, as is required under the Supported Residential Services (Private Proprietors) Act 2010. This is now a criminal offence under the act and something that I imagine would need to have been monitored by the department.

In a letter dated 17 September 2013 the minister wrote to Mr Alan Lorraine, one of the former residents of Mentone Gardens, who has lost $400 000 and who I understand has also had quite extensive discussions and correspondence with the minister's department. That letter stated that authorised officers at his department:

    ... conducted a review of the service in respect of money management, and identified areas of non-compliance to the act in relation to the keeping of trust account records and the preparation of residential and services agreements.

Yet when asked whether anyone had been prosecuted by his department for any breaches of the act, the minister said, 'This is a complex scenario'. This may well be a complex scenario, but the minister would have been provided with advice from his department.

If he has not been provided with advice from his department in respect of these matters, then he should be seeking this information.

As I have said, I have asked the minister numerous questions about this issue. It is not an adequate response for the minister to come in here and say that this is a complex scenario and that he cannot advise the house or those who have been affected by this issue as to whether there have been any prosecutions to date and whether matters are leading up to action being taken in respect of anyone involved with the company that has since gone into liquidation. It is very disappointing that the minister was not able to respond to a very direct question with a straightforward answer.

Authorised officers within the department are appointed under the Supported Residential Services (Private Proprietors) Act 2010 to monitor compliance of the act and regulations by undertaking inspections, investigating complaints and imposing sanctions. It is important to note here that despite authorised officers performing this regulatory function, it may well be that the department was not exempt from the coalition government's sustainable government initiative, which has seen 4200 jobs lost from the public service. Again I seek some clarity from the government and a response in relation to that. I would like the government to advise whether these authorised officers were in fact exempted from the sustainable government initiative, because the minister has failed to provide any clarity in response to my questions on this issue. He particularly took issue with my quoting from the Office of the Public Advocate's community visitors annual report 2012-13, which on page 57 notes:

    there was a massive loss of staff and corporate knowledge from the department, particularly in the eastern and southern regions, which have the majority of SRS.On page 68 the report goes on to single out the southern metropolitan region as being:

    ... without the support of a department manager as well as a reduction in the number of permanent authorised officers because of resignations and government policy. This puts enormous pressure on staff to support and regulate the SRS sector ...

The public advocate has identified issues around a lack of resources within the department to adequately regulate supported residential services.

I pursued these issues with the minister in the last parliamentary sitting week when I asked him a series of questions about the number of audits and inspections conducted by authorised officers of his department of SRSs in the 2012-13 financial year. I asked him in particular how many audits were conducted in the southern metropolitan region, and I asked him how many audits and inspections had been conducted at Mentone Gardens during this term of government and whether an audit of the finances of Mentone Gardens was conducted by the department prior to a receiver being appointed and on what date this occurred.

In the last sitting week the minister took all these questions on notice. At the time he did so, Mr Lenders, as Leader of the Opposition, took a point of order and sought an indication from the minister as to when we might expect a timely response to the questions that I posed, because the minister had said he was going to provide this information to me and he had taken these matters on notice.

At the time, the President indicated to the house and to the minister that a 30-day period would be a reasonable time frame and that he expected that I would receive a response from the minister within that 30-day period, as is consistent with the standing orders that apply to questions on notice more broadly. These were questions without notice, but the President indicated to the minister that 30 days would be a reasonable time period.Those 30 days have since expired, and I am still waiting for a response to those particular questions. I will be pursuing this matter with the President quite separately,-- perhaps an appropriate time might be after question time -- unless government members or the minister come into this house during the course of this take-note debate and respond to these questions today, because we still do not have any response to those issues I pursued prior to the winter recess of the Parliament.

On 28 May I also asked the minister about Mentone Gardens and in particular his cooperation with the liquidator, Mr Roger Darren Grant, in the course of his investigation.

Despite the minister's assurances last year that his department had 'sought to do everything that it can to assist', I was advised by the liquidator that the minister's department had not released all the relevant documentation and that the matter is now the subject of a complaint with the FOI commissioner. The liquidator has further advised me that when the minister wrote to him on 13 November last year seeking a copy of the liquidator's report the liquidator provided his report to the department, yet when the liquidator wrote to the minister on 13 March and 20 April this year outlining the difficulties the liquidator was experiencing in obtaining a response to his FOI request he did not receive a response.

This is an extraordinary show of arrogance on the part of this minister. In fact in a letter sent to me on 28 May the liquidator noted that he had:

. . .  reasonable grounds to question whether the above request for details of my investigation are in good faith in circumstances where I am unable to obtain timely responses from the Department of Health.It is important that the liquidator have access to all the relevant information in order to be able to meet his statutory obligations to do a thorough investigation into the circumstances of this company's collapse and liquidation and to be able to recover funds for those creditors who are owed funds.

The lack of response and the fact that we now have a liquidator having to resort to a complaint with the FOI commissioner is a very unfortunate turn of events. I speak with a bit of experience here, having also had FOI requests rejected and having to go through the FOI commissioner on numerous occasions myself.

We all know that the FOI commissioner is under-resourced and that there are many delays there, so I am concerned as to how Mr Grant is going to obtain a timely response, not just from the department but also from the FOI commissioner, to enable him to complete his investigations.

We are seeing a continual refusal by the minister to release the relevant documents to assist the liquidator in his investigation. This is not a cooperative approach, as the minister claimed last year. In fact the minister even sought to shift responsibility for furnishing those documents to the liquidator himself when he said that it was a 'challenge' for documents to be released from the liquidator to the department. I hope the minister will be able to provide some further information today as to the current status of this matter and in particular the FOI request and whether the department will be furnishing those documents to the liquidator, as has been requested.

Sadly, the minister's unsatisfactory responses, or the lack of response to my questions has also extended to the very residents who are at the heart of this matter. I know they were very disappointed that the minister did not participate in the previous general business debate we had on this matter on 11 June.

I have received copies of many letters that residents have sent to the minister about their individual situations. What is most evident throughout is the hurt and anger they feel at the minister and his department's treatment of their plight. I do not propose to quote extensively from the voluminous correspondence I have received, correspondence of which I think the minister is very well aware, but I want to touch on a couple of individuals. Ms Sue Higgins has said in a letter to the minister:

    What distresses and disgusts me more so is your total lack of interest, Mr Davis, in the Mentone Gardens/Parklane Assets matter.

    . . .  a minister for health and ageing with no heart.

I referred earlier to Mr Lorraine. In his most recent letter to the minister, dated 23 June, he notes the following:

    . . .  there has not been the slightest genuine expression of empathy from you, for the continued duress and other suffering daily affecting the lives of the now 5 centenarian ladies and the other 20 or so nonagenarian males and females (leaving aside the 10 or so people who have passed on), while awaiting your genuine display of interest in helping to recover so much of their hard-won life savings . . .

The minister might be hoping that this matter is going to go away, but I can assure him that it will not. These individuals are absolutely determined to get some answers from this government as to what has happened and what the department knew. They are wondering what the minister is hiding and why he is refusing to release documents or participate in a debate about these matters and respond to questions in the house about when his department knew that Mentone Gardens was in financial trouble. They want to know whether Mentone Gardens was properly audited. They want to know whether any action has ever been taken against the proprietary company in relation to its non-compliance with the act. These are all very important questions that deserve answers.I know that Mr Lenders is a very passionate advocate on behalf of his constituents. As I said earlier, he has met with individuals and devoted a lot of time and energy to researching these issues and looking at all the correspondence in great depth. He has lodged questions on notice with the minister about these issues and tried to assist those who are affected to get some answers from the government.

We have to wonder when the minister is going to be forthcoming with some more detailed responses. To date, we have put a number of questions and had very few answers.

The minister keeps referring residents to the liquidator, who is struggling to complete his investigation due to obstacles put in place by the minister himself. This is a farcical situation where the department and the minister say, 'Go off and pursue these issues with the liquidator', and then the liquidator says, 'Well, I'm stymied in my investigations because the department and the minister are not providing me with the documents that I need to complete the investigation'. It is a very sad situation where people's lives and their financial futures are in limbo until the liquidator is able to complete his investigations and provide some advice back to the creditors, the security holders, about these issues.

I want to touch on one bit of correspondence that the department sent Mr Lorraine on 9 July this year. This is a letter from Paul Smith, deputy secretary of the Department of Health, to Mr Lorraine. In that correspondence he said:

    The department has no authority under the legislation to audit the financial statements of private companies registered under the commonwealth's Corporations Act 2001.

I hope that the minister will be able to shed some light on this comment in his contribution -- if he chooses to make one, and I hope that he does -- in particular as to whether the financial statements of private companies registered as support residential services under the Victorian Supported Residential Services (Private Proprietors) Act 2010 are within the domain of authorised officers to be able to audit and monitor compliance of the SRS. If this is not the case, then it would seem there is a glaring gap in the legislation.

I will just finish by saying that we are seeing continuous deflection and blame-shifting from the minister -- nothing is ever his fault or responsibility. I am accustomed to getting that response from him every time I ask about his privatisation agenda in relation to public aged care. He has ripped $75 million in funding out of this area, and he has never sought to accept responsibility for the subsequent closures and contracting out of these facilities.

We are seeing this again with respect to this SRS.

As I said at the outset, some very elderly people have been affected by the collapse of Mentone Gardens. In many cases they have been significantly affected in terms of the amount of money they have lost from their security deposits. These residents deserve some answers. I am very disappointed that we have had to bring on a take-note debate due to the fact that we have not had any proper answers from the minister not only to those questions to which the minister provided very flippant and non-responsive replies but also in his failure to respond to my most recent questions that I raised in the last sitting week before the winter recess about audits and inspections of SRSs and of Mentone Gardens in particular.

After all of these questions and because this is now the second general business debate the opposition has devoted to Mentone Gardens, it is time the minister himself came into the house and provided answers not to me or the opposition but to the security holders and former residents who have lost money. They expect answers. They want the minister to come into the house and provide a fulsome response to all the questions he has been asked and to which he has refused to respond. I am calling on the minister. I hope he is listening from his office because he has not been in the house during the course of my contribution. I hope he will come in here and respond to this debate.

 

Ms HARTLAND (Western Metropolitan) -- My contribution will be quite brief. After having listened to a number of the questions Ms Mikakos has attempted to ask of the minister over several months as well as her contribution today, it has become quite clear to me that the Minister for Ageing should be answering these questions.

Considering these motions are about the minister's answers, I am quite surprised that he has not even bothered to come into the chamber. I am not quite sure whether he is listening, or how or even if he intends to respond. The Greens are very supportive of the action Ms Mikakos has taken today in attempting -- yet again -- to get the minister to be transparent and answer quite reasonable questions.

 

Ms CROZIER (Southern Metropolitan) -- On behalf of the government, I am pleased to rise to speak on Ms Mikakos's take-note motions this morning.

I note Ms Mikakos gave some background on these motions, which I will go through as well.

Ms Hartland's contribution was very brief. I note that it related to the minister's whereabouts. The minister has a number of areas of responsibility, so I will be speaking on behalf of the government in relation to Ms Mikakos's take-note motions. As I have said previously, it is very distressing for anybody who in their later years is facing financial difficulty. It is very concerning for their families.

I want to place on the record my concern for the difficulties that those various individuals and their families are experiencing in this matter. As has been highlighted, this is a complex matter -- it involves different jurisdiction-based law -- and we understand that. As Ms Mikakos stated previously, there have been a number of individuals and family members who have been embroiled in this issue.

By way of background I reiterate to the chamber that Mentone Gardens is a supported residential service (SRS) and as such is a private business governed in Victoria under the Supported Residential Services (Private Proprietors) Act 2010, otherwise known as the SRS act. Pursuant to the administration of acts general order dated 22 February 2011, the Minister for Ageing and the Minister for Community Services jointly and severally administer that act.

Ms Mikakos made a number of comments in relation to the minister's lack of interest and in relation to his ability to answer questions relating to the issues that have been surrounding Mentone Gardens. I have reviewed in Hansard the answers to the questions that have been raised. I note that in his last contribution Mr Lenders said that I said it is a complex issue. I reiterate that; it is a complex issue. It is governed by a number of acts -- criminal law and commonwealth law, amongst others.

I remind members that the SRS act received royal assent on 24 August 2010 under the Labor government. In the blame shifting that Ms Mikakos has just engaged in in the chamber it was stated that the minister should take some responsibility. I was not in Parliament in 2010, but my point is that that regulatory regime was put in place by the Labor government, of which Ms Mikakos was a member. I think some responsibility must be sheeted home to the Labor government, given what was done at the time by the government she served under.

In contrast, under the coalition government regulations were developed following extensive consultation with the sector to effect the act's provisions relating to financial and money management matters, including a requirement for any fees and deposits paid to be held in a trust account and a specification of retention and refund requirements in relation to fees and deposits.

The regulations were subject to a regulatory impact statement, submissions and consultation. A large number of stakeholders involved in the sector were consulted, including the Office of the Public Advocate, the SRS proprietors, residents, residents' families, guardians, medical healthcare practitioners, the Tenants Union of Victoria, the health services commissioner, the disability services commissioner, the Victorian Council of Social Services, State Trustees, the Royal District Nursing Service, VICSERV -- the peak body representing community-managed mental health services in Victoria -- the Law Institute of Victoria and the Office of the Chief Parliamentary Counsel.

They were all consulted for the purpose of making the proposed regulations.

I think members will all agree that that is an extensive list of very important stakeholders involved in the area that we are discussing today. It was most appropriate that they were consulted in the manner in which they were. The regulations came into effect on 1 July 2012 but do not apply to the full suite of payments made to proprietors prior to that date.

The objective and primary focus of the Supported Residential Services (Private Proprietors) Act 2010 is the protection of the safety and wellbeing of residents. Clearly, as we are discussing today, there have been some significant issues. The financial provisions under the SRS act do not replace the broader protections, penalties and remedies available under consumer law, criminal law and the Corporations (Victoria) Act 1990, which I have already referred to. Those are the three areas that make this matter somewhat complex.

To get back to the issue of Mentone Gardens, the bulk of payments made by the Mentone Gardens residents to the old proprietor Parklane Assets Pty Ltd were made under the Labor government's regime and are therefore not likely to be covered by the new regulations, and that is the issue at hand, which has not been fully understood by the residents or others. But they are the facts.

Mentone Gardens was placed into voluntary administration in June 2013 and a liquidator was subsequently appointed in September last year. Mentone Gardens was sold in September 2013 to a new proprietor, CPN Assets Pty Ltd, meaning that the 36 elderly residents did not need to be relocated. However, I am led to believe that a number moved facilities of their own accord.The liquidator, which has been the subject of quite lengthy discussion in this debate, is currently undertaking investigations, and the Australian Securities and Investments Commission, or ASIC, will determine any action under the commonwealth Corporations Act 2001 when these investigations conclude. Ms Mikakos made various comments about the liquidator. She said it has been stymied in its investigations and has not had access to all the relevant information to enable it to make a thorough investigation. But it is fair to say that the liquidator has not provided key information to the Department of Health to enable those investigations to proceed.

The minister again wrote to the liquidator on 31 July seeking its support in making available any analysis and/or company records that may assist the department to clarify whether there have been breaches of the SRS act. That is a quite appropriate requirement because it will assist the department to fully assess what is going on.

There has been some discussion around a number of residents' deposits being transferred to the bank account of another entity owned by the Mentone Gardens proprietors, Acacia Falls Pty Ltd. The Minister for Ageing recently wrote to ASIC seeking its cooperation in allowing the liquidator to pursue all available options, particularly with respect to expanding its investigations into Acacia Falls Pty Ltd. Significant and appropriate activity is occurring to try to get to the crux of this matter.

Ms Mikakos's take-note motions also refer to Mentone Gardens liquidator's freedom of information request. As members will be aware, decisions under the Freedom of Information Act 1982 (FOI act) are made by officers of the department with the appropriate delegation to perform this function. That is an appropriate function the department undertakes, and it is one that all members will be familiar with. The department's freedom of information unit received a request from the liquidator, Mr Roger Grant of Dye & Co, for documents under the FOI act. Mr Grant's request was processed in accordance with the act without interference and in a manner that will protect privacy in accordance with FOI legislation.

I understand the applicant has sought an independent review of this decision by the Freedom of Information Commissioner and that the review before the commissioner has not yet been finalised.

It would therefore be quite inappropriate for the Minister for Ageing to comment on the case before the commissioner, or indeed to interfere with established procedures and processes under the FOI act. Ms Mikakos said she had some experience in relation to the FOI process, so I think she will agree with that view.

This has been a difficult issue. A complex set of circumstances have arisen. The department and the minister have acted appropriately, and the questions that have been put to the minister on numerous occasions by Ms Mikakos have been answered thoroughly. With the further investigation I have outlined, and recent correspondence to the persons involved, hopefully we will get further information to assist with the investigation. With those words I conclude my contribution.

 

Ms MIKAKOS (Northern Metropolitan) -- I will be very brief in my response.

I record my extreme disappointment that the Minister for Ageing has not come into the house to respond to these matters. This is a take-note debate about his responses to particular questions, and Ms Crozier has drawn the short straw yet again and had to come in and defend the indefensible. She has been provided with notes by the minister's office to sledge the liquidator, because that is what we have heard today; we have heard an attack on the liquidator.

As recently as this morning I spoke with Mr Grant, and he advised that he is yet to receive the documents he is pursuing. Ms Crozier knows the department is able to provide those documents at any time. In fact there have been examples where applicants who have been unsuccessful in obtaining FOI documents have been heading to the Victorian Civil and Administrative Tribunal, when at the 11th hour the documents have been provided on the doorsteps of the tribunal. So those documents can be provided at any time.

It is not correct to say that because the matter is now being pursued by the Freedom of Information Commissioner -- and of course there is a process that is followed in such cases -- the documents cannot be provided.

We did not hear any substantive response from Ms Crozier to the questions that have been posed, the questions that are referred to by this take-note motion, the questions that I asked on 28 May and 29 May and subsequently in June as well -- those outstanding issues to which the Minister for Ageing is yet to respond. In the hour or so of this debate the minister has not turned up to participate in or contribute to it. He has not been in the house. That in itself is also disappointing. I hope the pleas for information and support for those affected security holders are not falling on deaf ears. I hope some members opposite will take it upon themselves to plead with the Minister for Ageing to do more in this case. Certainly on this side we will continue to ask questions of the minister until we get some satisfactory answers.Motion agreed to.


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