Supreme Court decides fate of abandoned retirement village
- Eight-year battle: Court orders derelict retirement village sold
- Residents lose: Apartment owners forced to surrender properties
- Little left: $8.55m asset faces claims exceeding $28m
- Refund hopes fade: Most former residents' estates unlikely to recover funds
One of Victoria’s longest-running retirement village disputes has taken another significant step.
The Supreme Court of Victoria has ruled the abandoned Berkeley Retirement Village can be sold, paving the way for the next stage of a legal battle that has dragged on since the village closed in 2017.
Consumer Affairs Victoria (CAV) brought the proceedings on behalf of the estates of 43 former residents seeking refunds of their in-going contributions.
The village was last valued at $8.55 million, well below the roughly $28 million claimed by secured creditors over the site.
Final orders covering the sale process and the distribution of proceeds are still to be made. However, Justice Peter Gray outlined how the funds are likely to be allocated when delivering his judgment.
Justice Gray found there was insufficient evidence to support refund claims made on behalf of 37 former residents. Only six estates remain eligible for refunds, with the total amount expected to be about $800,000 once the final figure is determined.
The judgment also means apartment owners who hold titles over parts of the site will be required to surrender their properties, while many former residents’ families are unlikely to recover their in-going contributions.
Despite hearing what he described as “harrowing and pitiable evidence” of 18 years of “financial stress, uncertainty and hardship”, Justice Gray ruled the apartment owners would not be “adequately, let alone fully” compensated for the loss of their properties.
“For the most part they are ordinary people who worked hard to save up funds to purchase their respective units,” Justice Gray said.
“Some of them purchased their unit with the intention of living in it upon their retirement. Many of these people spent their life savings on these transactions.”
Justice Gray concluded that not selling the land would likely leave the apartment owners in an even worse financial position.
He said the proceeds from any sale would first be used to cover more than $2 million in Consumer Affairs Victoria’s legal costs, before outstanding debts to Kingston City Council, South East Water and the State Revenue Commissioner were paid ahead of other claims.
The retirement village closed in 2017 following safety concerns, prompting Consumer Affairs Victoria to pursue legal action on behalf of former residents seeking refunds of their in-going contributions.
Consumer Affairs Victoria previously prosecuted former operator Stephen Snowden, who was convicted of breaching the Retirement Villages Act 1986 after being involved in managing the village while insolvent and within five years of a previous conviction for fraud-related offences.
