How the RVU carries out enforcement

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Monitoring compliance with legislation is an essential component of the Retirement Villages Unit’s (RVU) regulatory role. It provides an essential bridge between compliance support and enforcement.

The RVU proactively monitors activities which include, but are not limited to:

• registration of retirement village schemes and associated change of operators
• receiving reports or concerns relating to alleged non-compliance
• auditing or reviewing of reporting requirements
• conducting desktop review of data and
• other assessment or monitoring processes.

Monitoring compliance assists the RVU to:

• detect possible non-compliance and identify where action may be required to avoid or mitigate harm
• identify whether, and what type of, education campaigns or enforcement action may be required, and
• assess the effectiveness of its operations and programs and identify opportunities for improvement.

The RVU may also detect possible non-compliance via concerns and direct reports.

If alleged non-compliance is identified or reported, the Retirement Villages Unit will conduct an initial assessment.

The purpose of an initial assessment is to:

• determine whether there actually is potential non-compliance and
• if so, determine appropriate next steps (including priority).

The outcome of an initial assessment may be:

• non-compliance is not identified (no further action required)
• the information available at the initial assessment indicates suspected non-compliance but further information, assessment or investigation is required (gather information and proceed to assessment of findings)
• the information available at the initial assessment demonstrates non-compliance has occurred (gather further information and/or proceed to assessment of findings).

The Retirement Villages Unit will prioritise instances of actual or suspected non-compliance based on several factors, including severity, impact on others and public interest.

The Retirement Villages Act 2016 provides that the registrar may require a person to provide specified written information, or information of a specified kind, if the registrar reasonably requires the information for the performance of the registrar’s functions under the Act.

The Retirement Villages Act 2016 also gives authorised officers express powers to gather information for the purpose of administering or enforcing the Act. This can include, but is not limited to:

• entering and inspecting premises, places or vehicles connected to the management of or carrying on of the business of a retirement village
• requiring a person to produce documents or records for inspection or seizure
• inspecting, taking copies of or extracts from, or making notes from, any documents or records produced and, for that purpose, taking temporary possession of any such documents or records
• taking photographs, films and audio, video and other recordings
• requiring persons to answer questions or otherwise furnish information in relation to the carrying on of the business of a retirement village and
• issuing written notices requiring information connected to the management of or carrying on of the business of a retirement village or a breach of the Act or Regulations.

Not every instance of suspected non-compliance may require comprehensive information gathering or a formal investigation. Information gathering may range from an examination of available information, for example a desktop review, to a full investigation utilising legislative powers given to authorised officers.

The greater the consequence or impact of the non-compliance, the more serious the response action will be. Therefore, consideration may be given to:

• the seriousness of the actual or potential harm to the rights of the affected parties (for example the resident) caused by the alleged violation
• whether the non-compliance has a significant impact on residents’ financial affairs, the amenity of the retirement village or residents’ way of life
• the benefit the alleged offender stands to gain from non-compliance
• whether the harm is damaging to the community or retirement village industry
• whether the impact is difficult to remedy and / or will require a significant amount of resources to rectify and
• whether the non-compliance placed the safety of residents or persons in the village at risk of harm.

Circumstances and behaviours surrounding non-compliance will vary and must be considered on a case-by-case basis. Circumstances and behaviours the Retirement Villages Unit (RV) will consider when undertaking an assessment of findings include but are not limited to the following.

Co-regulation

Co-regulation refers to situations where industry develops and administers its own arrangements, but the government provides legislative backing to enable the arrangements to be enforced.

The RVU monitors co-regulated operators to ensure that a village’s policies, quality management systems, standards and codes are still effectively regulating and consistent with the Retirement Villages Act 2016. However co-regulated operators and individuals generally have systems present (for example village dispute resolution process, internal audits of disclosure statements, residence contracts and related documents) and implemented that adequately manage and rectify non-compliance pro-actively.

If the RVU becomes aware of non-compliance by a co-regulated operator, it will apply this framework to determine whether the non-compliance has been adequately managed and rectified or if there is need for measures additional to what the operator has already have in place.

Unintentional non-compliance

Unintentional non-compliance is generally where the contravention is a mistake or accident because of lack of understanding of the obligation or how to meet the obligation. It may also occur where a party is not able to access the required information.

Ineffective compliance

Ineffective compliance is generally where the systems are ineffective to deal with or prevent non-compliance or where compliance has not been fully achieved and where opportunities for improvement exist. This may include:

• poor communication between staff or third parties
• financial or economic issues
• faulty or missing procedures and
• failure to provide training or training is deficient.

Continual non-compliance

Continual non-compliance is generally where the business or individual will continually disregard their obligations or fail to implement adequate compliance measures.

Intentional or opportunistic non-compliance

Intentional non-compliance is where a business or individual has knowingly been non-compliant.

Similar to intentional non-compliance, opportunistic non-compliance will typically involve being non-compliant because there is belief that there is a low chance of being detected and / or not penalised for the non-compliant action.

These circumstances are also generally considered to be reckless or negligent, as the responsible party understood and appreciated the inherent risk but engaged in the behaviour regardless of the risk. The circumstances may include, but are not limited to, criminal intent, wilful non-compliance, failure to follow statutory notices and directions and concealment of the offence.

To consider whether non-compliance prevents, degrades or delays the objects of the Retirement Villages Act 2016, the Retirement Villages Unit will take into account the objects, purpose and obligations set out in the Retirement Villages Act 2016 and Retirement Village Regulations 2017. It may also consider information that's relevant to the subject matter, scope and purpose of the section that has been contravened.

No enforcement action will be taken when:

• no breaches of the legislation are identified
• the complaint is frivolous or vexatious or there is insufficient evidence and
• the alleged non-compliance is outside the Retirement Villages Unit’s area of authority.

Where a decision is to take no enforcement action, the decision and reasons will be recorded on the Retirement Villages Unit Case Management System.

Where applicable and appropriate, other avenues to address the matter may be taken and communicated to relevant parties. Where a matter is out of scope for the Retirement Villages Unit, this may include referring the matter to another regulatory body with responsibility for the matter, such as the Consumer and Business Services (SA) or the Australian Securities and Investments Commission (Commonwealth).

Where appropriate, the Retirement Villages Unit will concentrate its efforts on cooperative methods to improve compliance. Guidance involves a cooperative, practical and open approach through education, support, advice, and reviews to encourage best practice.

Guidance aims to build and strengthen relationships between the Retirement Villages Unit and operators or individuals. Examples may include

• information bulletins
• publications, or
• proactive discussions between authorised officers and operators or individuals including, for example, retirement village forums and information sessions.

Administrative tools may be used for circumstances where the non-compliance is assessed to be minor, administrative or technical in nature. In these instances, the Retirement Villages Unit may assist the non-compliant business or individual by focusing on factors such as knowledge and understanding in order to increase awareness and understanding of obligations and the consequences of failing to comply.

Examples of administrative actions include:

• verbal warnings
• letters that raise concerns, warnings or reminders of obligations (which may seek assurances and undertakings from the operator to perform certain tasks or refrain from certain activities)
• non-statutory requests to fix the non-compliance and
• seeking to engage the operator in acknowledgement of non-compliance.

Circumstances where assurances and warnings may be appropriate include where:

• the act or omission is not serious enough to warrant more severe action
• the past history of the individual or business reasonably suggests that administrative action will secure compliance
• confidence in the individual or entity is high
• the consequences of non-compliance will not pose a significant risk
• advice and warnings may prove more effective than a more punitive approach and
• advice and warnings are considered to be fair and appropriate in the circumstances.

If the Retirement Villages Unit accepts an assurance given following the exercise of an administrative tool, the Retirement Villages Unit will not proceed against the operator for the matter to which the assurance relates unless the operator fails to comply with an assurance given. In these cases, the Retirement Villages Unit will only take further action that is necessary to achieve compliance.

A voluntary enforceable undertaking is a written, legally binding agreement proposed by a business or individual following an alleged contravention of an Act.

A voluntary enforceable undertaking will generally try to:

• address the conduct that led to the alleged contravention
• rectify the consequences of the conduct
• stop the conduct from happening again and
• deliver benefits for or protect the interests of affected persons, the village, and/or the industry generally.

The Retirement Villages Unit may recommend that the Minister accept a voluntary enforceable undertaking where it is assessed to be the most effective and appropriate regulatory outcome in the circumstances, having regard to:

• the nature of the alleged non-compliance
• whether the alleged non-compliance is best remedied primarily through behaviour change or penalty
• any impacts of the alleged non-compliance on residents, the village, the industry and the community
• the compliance history of the operator involved
• the likely outcome should the matter be dealt with through legal proceedings and
• any other matters the Minister or the Retirement Villages Unit considers relevant.

For example, a voluntary enforceable undertaking may be assessed as the most appropriate course of action in circumstances where the focus of enforcement activities is to affect a change of behaviour or rectify a matter rather than adopt a punitive or deterrent approach.

Any application to enter into a voluntary enforceable undertaking will be considered on a case-by-case basis and a decision to accept or reject an enforceable undertaking in a particular set of circumstances will not be regarded as a binding precedent for future decisions.

If necessary, the Retirement Villages Unit may negotiate with the business or individual proposing the enforceable undertaking regarding the inclusion of specific terms.

Voluntary enforceable undertakings and prosecutions

Prosecution proceedings or other enforcement action do not need to have commenced for consideration to be given to a voluntary enforceable undertaking proposal. If a prosecution has not commenced and an enforceable undertaking is accepted, prosecution proceedings will not be considered or initiated unless, after accepting the undertaking, new additional information relating to the contravention is identified that significantly increases the seriousness or extent of the contravention.

If a prosecution has commenced, all reasonable steps will be taken to discontinue the proceedings as soon as possible after the voluntary enforceable undertaking has been accepted.

A voluntary enforceable undertaking isn't an admission of guilt by the person or business giving it in relation to the contravention or alleged contravention to which the undertaking relates.

Find out how to propose or apply for an Enforceable Voluntary Undertaking (EVU).

Where an expiation fee is available, the Retirement Villages Unit may issue an expiation notice in accordance with the Expiation of Offences Act 1996 as an alternative to prosecution. Specific breaches of legislation are expiable with a fee set at a much lower level than the maximum penalty that may be imposed by the Court.

A person who receives an expiation notice may choose to pay the expiation fee or elect to be prosecuted in court. This means there must be substantial, reliable and admissible evidence that an identifiable person or organisation has committed the alleged offence. There must be sufficient evidence to enable a conclusion to be reached that there is a reasonable prospect of being able to prove an offence beyond reasonable doubt.

While the decision must be made on a case-by-case basis with reference to the specific circumstances of the alleged non-compliance, the following factors are taken into account when determining whether to issue an expiation notice:

• failure to correct an identified problem after having been given reasonable notice to do so by an authorised officer
• failure to comply with an undertaking
• confidence in the individual or entity is low
• a written warning has previously been given to the individual or entity for similar non-compliance
• a deliberate breach of the law that placed the safety of residents or persons in the village at harm, albeit not necessarily to the extent to justify prosecution.

Prosecution aims to stop illegal conduct and, through sentencing, to act as a deterrent to further breaches of the law. Decisions to prosecute must be in the public interest.

The legislation administered by the Retirement Villages Unit prohibits certain conduct and behaviour and establishes financial penalties for breaches.

In line with the Director of Public Prosecutions (DPP) Statement of Prosecution Policy and Guidelines (PDF 988KB) for prosecution of criminal offences, the Retirement Villages Unit will only recommend the prosecution of offences if:

• there is sufficient evidence
• there is reasonable prospect that an offence can be proven beyond reasonable doubt and
• the public interest test is satisfied.

In considering the public interest, the following additional factors will be considered:

• whether the offence was premeditated
• the need to influence the offender’s future behaviour
• the effect on the offender’s or witness’ physical or mental health, balanced against the seriousness of the offence
• the availability and efficacy of any alternatives to prosecution
• the prevalence of the alleged offence and the need for deterrence, both personal and general
• the likely length, expense and outcome of a trial.

In some cases, prosecution may not achieve the desired broader outcomes that legislation is seeking. The ability to negotiate alternative outcomes that may more effectively advance these outcomes may be available for consideration as an alternative to prosecution (such as a voluntary enforceable undertaking).

When is prosecution likely to be warranted

Prosecution is likely to be warranted when any of the following circumstances occur:

• a deliberate breach of the law such that the non-compliance placed the safety of residents or person in the village at harm
• the alleged breach is too serious or the risks too great to be dealt with by means of expiation
• a failure to correct an identified serious problem after having been given reasonable opportunity and training or information to do so
• a failure to comply with the requirements of an undertaking
• an established and recorded history of similar offences and
• unwillingness, on the part of the individual or entity, to prevent recurrence of a problem.

Where circumstances warrant a prosecution all relevant evidence and information will be considered to enable a consistent, fair and objective decision to be made. Before prosecution there must be substantial, reliable and admissible evidence that an identifiable person or organisation has committed the offence.

When making a decision relating to non-compliance, the Retirement Villages Unit will ensure it:

• has the power to act and exercise discretion with respect to the legislation and decision
• follows the statutory and administrative procedures
• avoids actual or perceived bias or discrimination (such as, but not limited to, ethnicity, nationality, political association, religion, sexuality or beliefs)
• avoids actual or perceived conflict of interest
• has detailed and proper reasons for making the decision
• exercises procedural fairness where applicable and
• keeps proper records of the decision.

In determining how to respond to non-compliance, the Retirement Villages Unit is guided by the principles, behaviours and processes stated in this framework. It may also consider the following factors:

• the likely effectiveness of a response action achieving the appropriate enforcement outcome
• if there is an alternative compliance response that would better address or rectify the matter
• whether there is a need to deter the offence
• whether the compliance response is in the public interest to pursue, for example, whether there is public concern about the non-compliance and
• whether the non-compliance can be easily remedied.

Authorised officers are also assisted by compliance guidance material when determining appropriate compliance enforcement actions.

The Retirement Villages Unit will only make decisions relating to non-compliance that sit within its scope of responsibilities. Where responsibility for decision-making sits at a higher level, such as the minister, the RVU will advise the decision-maker of the matter in writing along with any relevant recommendations regarding response actions.

Contact the Retirement Village Unit

Email: retirementvillages@sa.gov.au