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they will be included in revised pages. The intention is
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as well as the nature and extent of any allegations
made. Material contained here represents my views
based on my study of the operation of the health
care marketplace and the material available to me.
It should not be assumed to represent the views of
any other individual or organisation. Links to Site
Comp Unlisted Comp.
The many extracts on these pages are from copyright material. They are owned by the reference given or its owner. They are reproduced here for educational purposes and to stimulate public debate about the provision of health and aged care. I consider this to be "fair use" in the common interest. They should not be reproduced for commercial purposes.
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Ramsay Hlth Care
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Unlisted Comp. Other
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This corporate web site addresses the issues of corporate health care within a broad framework. A web page describing this broad context should be considered as an introduction to each page on the web site. If you have not yet read it then CLICK HERE to open it in another tab or web page.
Founded by a very successful self made businesswoman this company was listed for a few years. Allegations were madeabout its nursing homes and it was claimed that staff levels were cut to boost profits. Claims were made that it was treated leniently and there were allegations about the relationship with the aged care minister and political donations. All of these were denied by the minister and the owner. Retirement Villages and other businesses run by the owners are also examined.
Retirement Villages - Urimbirra and Lindfield Manor
Nursing Homes - Ritz and Yagoona
LINKS CORPORATE MEDICINE WEB SITE
Every attempt is made to provide accurate and well written material. Your contributions, suggestions, additional information and advice sent to the web address at the foot of the page are welcome. Where possible they will be included in revised pages.
The intention is to show the general thrust of corporate practices as well as the nature and extent of any allegations made. Material contained here represents my views based on my study of the operation of the health care marketplace and the material available to me. It should not be assumed to represent the views of any other individual or organisation.
Links to Site
It has been suggested that this web page is defamatory. I believe that this is because the page has been read out of context instead of as part of a web site in which arguments and context are created. Clearly it would be excessively tedious for the reader and needlessly repetitive if I repeated all of the arguments on every web page. There are over 400 of them. I have therefore now written out a summary of these arguments. I am including a link to that introductory page on new and on older pages as I update them.
Readers who come to the web pages for the first time should consult that page. It will open in another window.
IF YOU HAVE NOT YET READ THAT PAGE YOU SHOULD CONSIDER IT TO BE PART OF THIS PAGE AND ITS INTRODUCTION.
Readers should consider it as an integral part of this and other pages. This should remove any doubts as to the intention of the web pages and their content.
Click Here to go to the introductory web page
The complaint about this web page was not specific:- No reason was given for the claim that this page was defamatory. To resolve the issue I have removed any comment of mine that might be considered judgemental lest it is what gave offence. I also apologise if the page gave the impression that it was the owner of the company rather than the marketplace health and aged care system which she and her company represent that I was criticising. To address this issue I have now included material about the owners retirement villages and other business operations in the wider marketplace in order to place aged care into this very different context.
I leave the reader to decide whether this sort of environment is an appropriate one for health and aged care and whether people who succeed in one can legitimately (and I don't mean legally) bring the same patterns of thinking into health and aged care - and whether this in fact happened. I argue that the market and health/aged care are essentially incompatible (pdf file).
The selection of material to quote:- Because the allegations made in the press reports were based on assessments made by statutory bodies protecting citizens and on allegations raised in parliament where there is a responsibility to be fair I did not include all denials and other statements made by the company and its staff in my original page. My comments were based on the probability that there was substance to at least some of the material.
It may be that the material was considered to be defamatory because of a biased selection. I have therefore reviewed all the material to ensure that the extracts are representative and have included more statements made by the company and its representatives. I have done the same for the new sections on Retirement Villages and on the owner's hotel businesses. As a consequence I have quoted from much more of this copyright material than I normally do as fair use.
I repeat here that one thesis of this web site is that likeable and charismatic people can be very successful in the marketplace where they may perform well for themselves and for society. I argue that these same people may perform poorly as providers of health or aged care when that care is provided in a marketplace context and is then evaluated in humanitarian terms. This is because the two contexts are incompatible and those who succeed do so by ignoring this incompatibility.
A good example of this is Peter Smedley and his role in Mayne Health. In the marketplace he was a hero but the application of his market thinking to health care was Mayne Health's undoing. I have therefore looked at the owner of Milstern's other successful business operations. I have included some material to illustrate that environment and the way success is achieved there. There are problems when operating in such very different sectors and I recognise the dilemma faced by those who try to do so.
The material is included for the reader to assess and make up his or her mind. I would welcome a response from Milstern and its owners in regard to this material and the selection of representative extracts. I ask them to put their perspective and respond to the concerns raised. This would be very valuable.
Clearly I am on one side of the divide in perceptions that I describe on another page on this web site. The arguments and assertions made are intended to stimulate debate. This site lacks input from the other side of the divide.
I am not in a position to clearly present the position and arguments of those on the other side as I am critical of them. I encourage Milstern to respond to the arguments on the web site. They are summarised in the link at the top of this page. I will include any comments they wish to make.
Milstern was a nursing home and retirement village operator founded in 1986.
Mrs Millie Phillips a self made businesswoman had made her fortune in mining. In the 1960s she developed an interest in nursing homes and retirement villages. She formed Milstern to acquire her health and aged care businesses and floated it on the share market. She became involved in the marketing of a diverse selection of products developed by an Israel researcher.
Mrs Millie Phillips, a survivor of the 1970s nickel boom, has again embarked on a public course with the proposed listing of Milstern Health Care Ltd which will seek 14 million $1 shares. At the launch of the prospectus yesterday, Mrs Phillips, the chairman, said she will take a "huge slice" of the float with Milstern Enterprises Pty Ltd, which she controls, taking 2.5 million shares as consideration.
Dec 1986 Milstern lists
Capital raised will be used to purchase, for $7.35 million, all nursing homes operated by the Milstern group; partly finance and purchase the land for the construction of a $6 million retirement village in the Hills district in Sydney; and provide working capital for the marketing and distribution of Omiderm - a semi-permeable dressing for wounds.
Apart from property interests, which include four nursing homes and three retirement villages, Milstern has purchased the rights to four medical products and other diagnostic tools used to detect bovine mastitis and antibiotics in milk.
Mrs Phillips founded the nursing home and retirement villages company in 1960 but is better known to the public for her long-standing association with the nickel exploration company International Mining Corp NL, of which she is chairman.
'Nickel Queen' On The Listing Trail Australian Financial Review December 3, 1986
After 10 years out of the limelight, housewife-cum-mining promoter Mrs Millie Phillips has re-emerged with a new company - this time a health care concern which is to raise $14 million from the public.
Dec 1986 The business
She hopes Milstern Health Care Ltd, the new retirement village and nursing home concern, will prove more profitable than her International Mining Corporation NL, which for the past five years has turned in consistent losses
The diminutive, Polish-born Mrs Phillips, whose net worth is said to be about $40 million, says she feels confident. Along with her mining activities, Mrs Phillips has "been in the health care business" for 20 years or so. And, she says, like IMC, she will "stick by the company until it makes money".
Australia's richest self-made woman earlier this year opened Rose Bay Towers as serviced retirement apartments - which ultimately will also be sold into Milstern along with other properties held by interests associated with Mrs Phillips, including The Ritz Nursing home at Leura.
To show she means business, Mrs Phillips will put up $4 million to take 4 million shares in Milstern, with a further 2.5 million shares allotted to her as consideration for medical products including Omiderm, the skin dressing developed in Israel for which a company controlled by Mrs Phillips has the exclusive Australasian agency.
Ultimately, she will emerge with about 39 per cent of the company.
MINER MILLIE EXPANDS IN HEALTH CARE Sydney Morning Herald December 3, 1986
Milstern Health Care Ltd had a lacklustre day, but its $1 shares did open at $1.05 before falling to $1.02 at close.
Feb 1987 The listing
FINANCIERS KIND TO STAGS Sydney Morning Herald February 13, 1987
However Mrs Phillips projects the bulk of Milstern Health Care's profits will come from the exploitation of the world-wide rights from research conducted by Professor Nathan Citri, a microbiologist from the Hebrew University of Jerusalem.
Mar 1987 Millie Phillips and Professor Citri
At least 10 per cent of the profits from nursing home operations will be ploughed back into the marketing of the health care products and the testing kits developed by Professor Citri.
Apart from the purchase of nursing homes and retirement villages and construction of an addition retirement complex, the capital raised from the listing and the some of the operating revenue from the retirement homes will go to developing and marketing test kits and wound dressings which Mrs Phillips hopes will be the company's major source of revenue by the 1988-89 financial year.
Since the prospectus was issued Milstern Health Care has signed an agreement with the CSIRO for contract research into the use of the Citri reagent in a field kit to detect bovine brucellosis.
An agreement has also been reached with the NSW Dairy Corp to undertake development work, laboratory and field trials for another Citri product which tests antibiotic residue in milk.
The prospectus estimates profit for the first six months as a listed company will be $448,000 with net profit in the year to June 1988 of $1.99 million.
As the architect of the new venture Mrs Philips confesses that she also does not fully understand the finer technical points of research despite the fact she has backed Professor Citri's work for the past few years.
However Mrs Philips remains very confident that her new venture will be a big success.
Millie Phillips Takes A Healthy Look At Profits Australian Financial Review March 3, 1987
The research aims to develop a new detector of the AIDS virus invented by Professor Nathan Citri of the Hebrew University of Jerusalem.
May 1987 A new Citri test for AIDS
Milstern has funded Professor Citri's research for the past 18 months and holds the world rights to the Citri patents and potential franchises for pharmaceuticals companies that would later market the device.
MILSTERN TO DEVELOP AIDS KIT Sydney Morning Herald May 28, 1987
Milstern Health Care Ltd will fund the development of its new AIDS test in conjunction with St Vincent's Hospital in Sydney. This development has the potential to put AIDS testing kits in pharmacies.
May 1987 AIDS Test
Yesterday's announcement explains the huge increase in Milstern's share price.
Milstern's resident medical specialist, Dr M. Garvan, said yesterday that if the test kits did not reach the stage where they were on sale to the public it would be for political rather than practical reasons.
Milstern Will Fund AIDS Diagnostic Kit Australian Financial Review May 28, 1987
Takeovers, share sales and delisting from stock market:- There was no more mention of the Israeli professor and his many research inventions. In 1988 Milstern wrote off a large sum and was taken over at 65c a share by Namark of which Mrs Phillips son was managing director. Following this Mrs Pillips owned 92.2 percent of Milstern. To keep the company listed she sold some of her shares.
The company suffered during the market collapse of the 1980s and came into dispute with the Commonwealth, about fees. In 1993 the companies shares were suspended and it was then delisted. Information about the company became scanty for some years.
Milstern Health Care Ltd posted a maiden net profit of $278,000, which was below the projections made in the company's prospectus.
Oct 1987 Not meeting projections
However, the group's operations started two months later than anticipated, and the results took into account only five months of trading.
MILSTERN MAIDEN RESULT Australian Financial Review October 1, 1987
In its second full year of operation, Milstern Health Care Ltd has posted a 42 per cent increase in pre-tax profit to $725,000, on turnover of $16.32 million.
Sep 1988 A loss and write off of research
However, Milstern suffered extraordinary losses of $3.5 million, taking the company's total consolidating operating loss to $3.22 million.
In accordance with a decision made in the first half of the year, Milstern wrote off all capitalised research, distribution and prospectus costs as extraordinary items.
MILSTERN EARNS MORE BUT OMITS DIVIDEND Australian Financial Review September 8, 1988
Unlisted Mamark Holdings Pty Ltd has increased its offer for nursing home and retirement village developer Milstern Health Care Ltd to 65 a share.
Sep 1988 Takeover by a family company.
The managing director of Mamark, Mr Robert Phillips, said that the revised offer, which values Milstern at about $10.75 million, was more than fair, considering the rapid increase in Milstern's share price.
Mamark has already taken control of Milstern with 48.9 per cent of issued capital.
MAMARK LIFTS ITS OFFER FOR MILSTERN TO 65 A SHARE Australian Financial Review September 1988
Millie Phillips has sold down her commanding shareholding of Milstern Health Care Ltd in an effort to keep the nursing home and retirement village development company listed.
Apr 1989 What is this relationship?
Yesterday Milstern Enterprises Pty Ltd announced that it had reduced its stake in Milstern, floated by Mrs Phillips in 1986, from 92.2 per cent to about 89.12 per cent by selling 2.5 million shares for 65c each or about $1.6 million.
Mrs Phillips' son and Milstern's managing director, Mr Robert Phillips, yesterday said that the private company had sold down its stake to keep Milstern Health listed, and would continue to sell to reduce the stake to 85 per cent.
The extra shares now held by Milstern Enterprises appear to have been gained through a takeover bid of 65c a share made last year by Manmark Holdings Pty Ltd.
PHILLIPS REDUCES HER MILSTERN HEALTH CARE STAKE Australian Financial Review August 11, 1989
Milstern's nursing home and retirement villages have been operating satisfactorily. It benefited from the buoyant Sydney residential market and settled a number of fee disputes with the Commonwealth during the year.
Aug 1989 Fee disputes
MILSTERN UP BUT SHORT OF FORECAST Australian Financial Review August 31, 1989
Millie Phillips' Milstern Health Care Ltd has been affected by the poor residential property market and high interest rates, with its pre-tax profit falling to just $62,000 for the half to December 31.
Apr 1990 Downturn of late 1980s
That almost break-even result, recorded on sales which fell by 7 per cent to $16.2 million, compares poorly with the $1.2 million pre-tax profit reported for the previous corresponding half.
PROPERTY PROBLEMS AFFECT MILSTERN Australian Financial Review April 3, 1990
A substantial drop in interest charges has helped Mrs Millie Phillips'Milstern Health Care Ltd report an improved pre-tax profit for the six months to December 1990, up from $64,000 to $568,000.
Feb 1991 Profits up
INTEREST CUT BOOST FOR MILSTERN Australian Financial Review February 13, 1991
"The above company whose securities are already suspended have not paid their Annual Listing Fees for the year commencing 1 July 1993."
Aug 1993 Removed from stock exchange
MILSTERN HEALTH CARE LIMITED: ASX MARKET RELEASE - UNPAID ANNUAL LISTING Australian Stock Exchange Company Announcements August 24, 1993
Millie Phillips was clearly a remarkable and forceful woman. Her efforts deserve our admiration. Left destitute with two children, she borrowed and then made her fortune in Nickel before turning to health and hotels.
From a standing start - a marriage break-up had left her with two children- she had made her first million within five years.
Dec 1986 Mrs Phillips career
Over the years, IMC has had its ups and downs - mostly downs - with a low point coming when Mrs Phillips was charged with insider trading. She bought 4,000 shares a fortnight before the Trough Wells assays were announced, adding to the 2 million she already held.
The charges were dismissed, but Mrs Phillips never sold those shares, watching their price plummet from $10 to 10c. And neither has she sold down her holding or relinquished her role as chairman of IMC, although the company has been in and out of gold, nickel, uranium and a variety of other commodities.
MINER MILLIE EXPANDS IN HEALTH CARE Sydney Morning Herald December 3, 1986
Millie Phillips, is not on the BRW list but is often cited as Australia's richest self-made businesswoman, and possibly the only woman to forge a career in the largely male-dominated investment sector. Phillips borrowed from a bank in 1961 to buy a small boarding house in Sydney's Ashfield. She had just separated from her husband and had three children to support.
Aug 1991 Australia's richest woman
Phillips also runs International Mining Corporation, a gold and metals exploration company.
Polish-born Phillips, the first woman to be charged with insider trading in Australia in 1974 (the charges were later dismissed), is said to be worth over$40 million.
AUSTRALIA'S RICHEST WOMEN Sun Herald August 25, 1991
After Phillips separated from her husband in the early 1960s, she took a bank loan to open a boarding house in Sydney while supporting her two children. She made her first million within five years. International Mining Corporation was listed in 1970, on the day that shares in the nickel mining company Poseidon hit $200. The company was delisted in 1997; at the time, Phillips was still running it.
Aug 1999 More about Phillips
In the 1990s, Milstern opened Rose Bay Towers in Sydney, a block of serviced apartments, and the Ritz Nursing Home at Leura, New South Wales, plus several retirement villages in New South Wales and Queensland. As well as her involvement in the mining and health-care industries, Phillips was the owner of Castle Hotel Group and chaired the hotel group Flag International.
Where Are They Now? MILLIE PHILLIPS Business Review Weekly August 13, 1999
Two of Canberra's largest and most prestigious hotels were acquired by Mrs Phillips and her son Robert's other companies. They were also a catering business which provided catering to the old parliament and to the National Library. The conflicts, and the ups and downs in the hotel marketplace are described in the press as are staffing issues. One of the concerns on these web pages is the consequence for sick or aged citizens when health and aged care markets experience similar conflicts, ups and downs, as well as the disruption when they are traded from one owner to another in the marketplace. What would have happened to aged care residents had nursing homes been involved in the sort of dispute described in the press reports in this section?
Of interest is the relationship between owners/management and staff. Care in health and aged care is heavily dependent on the dedication and motivation of the staff. Relationships need to be different to those in the wider marketplace. Staff also need greater security and continuity. Problems can arise in the provision of care if management does not share the humanitarian mission in the same way as their staff.
The Canberra International Hotel
The Canberra International Hotel opened in 1981. It was acquired by the McGauran family business in 1988. Father and two son's were prominent conservative National Party politicians. Peter McGauran has been a minister in the Howard government for some time. His brother Senator Julian McGauran created some political flack when he defected from the National party to join John Howard's liberal party.
The hotel was purchased by Mrs Phillips and her son Robert when the McGaurin company restructured by going into receivership. It was turned into 162 strata units. These were sold independently.
The McGauran Group, motel and hotel owner, has paid $16.25 million for the Canberra International Hotel.
Apr 1988 McGauran family buy hotel
The Canberra International, which fronts Northbourne Avenue, was opened in 1981 and extended in 1984. It has 152 rooms, including five suites, 36 guest apartments and an inground swimming pool.
A spokesman for the group said that the Canberra International would be substantially refurbished.
MCGAURAN BUYS CANBERRA INTERNATIONAL Australian Financial Review April 5, 1988
Peter McGauran is assured of at least one vote in any spill as his brother Julian is a senator. Young Peter and his brother Jules, from the Western Districts of Victoria, are reputed to be the wealthiest men in Parliament.
Aug 1988 Politics and the McGauran family background
Peter, Jules and their dad handed over $17 million for the Canberra International Hotel on the weekend, which may bring in a few more votes among the waverers.
BLUNT AND SHARP WAIT IN THE WINGS Sydney Morning Herald August 2, 1988
The McGauran family's Rathdowne Melbourne and Downtowner hotels and their Canberra International hotel have gone into receivership, with the ANZ bank this week appointing an agent as mortgagee in possession for the hotels.
Apr 1993 McGauran group in receivership
The outgoing co-manager of the McGauran group of companies and newly elected National Party senator, Julian McGuaran, said yesterday that the company had negotiated the receivership with the ANZ.
Mr McGauran said the company's decision to restructure had also been shaped by his return to politics, which would effectively take him out of the running of the companies and reduce its management team.
The group will be run by Mr Gauran's father, John McGauran, and brother, John junior, when Mr McGauran moves to Canberra soon.
Mr McGauran was a Victorian National Party senator from 1987 to 1990.
ANZ Steps In At McGauran Hotels In Debt Rejig The Age April 3, 1993
The sales of 95 out of 162 strata units in the Canberra International Hotel at 242 Northbourne Ave brought in about $13.5 million for Sydney hotel investors Mrs Millie and Mr Robert Phillips.
Mar 1994 Hotel bought by Mrs phillip and her son. Strata units sold to investors
Their vehicle, Jaywood Pty Ltd, bought the hotel for about $11 million in May last year. The remaining units are on the market at between $123,950 and $219,950.
HOTEL STRATA UNIT SALES TOTAL $13.5M Australian Financial Review March 24, 1994
Canberra Times threatened:- The Canberra Times was threatened with legal action when they reported on concerns about profitability and staff cuts. Business Sydney reported that others were doing better. By 1998 the hotel was reported to be fully booked. Subsequent developments and a legal dispute suggest that there was substance to the Canberra Times report. The Australian Financial Review reported in 2002 that what "is not in dispute is that the units have proved an ugly investment".
The Canberra Rex and the Canberra International Hotel have been laying off staff because of heavy losses.
Mar 1997 Profit and staffing problems - Defamation threat
The Canberra Times has obtained documents to this effect and statements from former and current employees. These indicate that the hotels are ex-periencing difficulties, though the owner says they are going better than ever.
The hotels with 156 rooms each and about 300 permanent and casual employees have been operating with minimum staff.
A letter from former general manager Michael Toomey, dated February 19, explains how he was instructed by the owner, Millie Phillips, to change the Canberra operations.
"The heavy losses the group have experienced of late have forced the inevitable streamlining of our Canberra operations," Mr Toomey told the employees.
"We regret we have no alternative but to make your position redundant effective immediately and enclose two weeks' pay in lieu of notice plus accrued annual leave and the like."
Mr Toomey has since left the company, which trades in Canberra as Castle Group Canberra. The Castle Catering Group also provides catering at Old Parliament House and the National Library.
Mr Toomey has confirmed that more than 15 employees have been made redundant. Former and current employees confirm this, and say many more have since left.
Staff say the hotels are running without a general manager but are achieving 50 to 80 per cent occupancy.
The hotels are understood to be being downgraded from 4-star to 3-star and staff have been told the difficulties are short-term.
Asked about the information from staff, Ms Phillips said hotel operations were not changing and were going "better than ever".
"If they are unhappy about getting redundancies they should work a little harder," she said.
She referred questions to her Canberra solicitors, Vandenberg Reid, but the firm did not return telephone calls. Instead, the solicitors threatened legal proceedings against The Canberra Times.
The Rex is one of Canberra's historic hotels and its guests have included former United States president Lyndon B. Johnson.
Some employees have been told that death and disability benefits attached to their superannuation cover are at risk because the company has not paid January's contributions. Ms Phillips and her lawyers have declined to comment on this.
A letter from HostPlus Superannuation Fund to an employee said insurance cover for death or permanent disability was unavailable if the employer missed payments, and the employer, Milstern Health Care Ltd (Canberra Travelodge), had not paid the contribution.
Canberra Hotels In Trouble, Staff Lay-offs Canberra Times March 19, 1997
Canberra, Australia's Capital, is seeing positive developments in its tourism and accommodation industry. - - - - Subsequently, employment in the market has also risen, from 221 staff members to a remarkable 2,354.
Apr 1997 Hotel feeling the decline in bookings
The Canberra International Hotel is one hotel that is feeling the brunt of a decline in bookings, although in general, its occupancy rate remains steady.
Three star hotels lead growth in ACT accommodation Business Sydney April 7, 1997 FROM ABSTRACT by ABIX (Business Intelligence Australia Pty Ltd)
Canberra's tourism industry is experiencing its busiest time in three months with major events in the city forcing some hotels to turn away guests. - - - - the Canberra International Hotel also are fully booked.
Feb 1998 Now fully booked
Boom Time For Hotels Canberra Times February 4, 1998
The Strata Title Investors precipitate a dispute:- In 1999 a crisis was precipitated by the strata title owners who elected to terminate Millie Phillips company as manager. They claimed profitability was way below what they expected. They appointed another manager. Mrs Phillips still owned 42 of the units. She rejected the majority decision and continued to manage these units through her company.
As a consequence two hotels were run in the same premises. A six year very costly court battle followed. At the end of this the judges ruled that although the original brochure had contained "glowing puffery" that should have been ignored, the financial losses were due to the market and could not be blamed for this. He indicated that management deficiencies had contributed to the losses but indicated that the investor's claims had not been made on this basis.
The court decided in favour of Mrs Phillip's companies and huge costs were awarded against the investors. The saga is interesting in what it reveals about marketplace disputes. Had this been nursing homes or hospitals would these payments have placed pressure on the funding for patient care? Would management's focus have been diverted from care to market concerns? Would "glowing puffery" have been recognised as such by anxious seniors and their families? Would the law view this in the same way?
Guests at the 156-room Canberra International Hotel in Northbourne Avenue, Dickson were shown the door last weekend when management walked out, leaving no-one to run the hotel and threatening its short-term future.
May 1999 Precipitate closure when owners installed a new manager
The walkout follows a decision by the 109 owners of the rooms at the Canberra International to replace its management company with the Premier Hotel Group, which runs the Diplomat.
The changeover has not been smooth.
The Canberra International was strata-titled in 1993 when individual rooms were sold to investors at a guaranteed annual return of up to 10.5 per cent for five years.
The guarantee period ended last December and unit owners have not been happy with arrangements since.
"But we certainly expected to do better under new managers than was offered by the old management." The owners did everything they could to ensure a smooth transition from the previous managers to the new. "We were still negotiating [last] Saturday night."
Paul Green, of law firm Meyer Clapham, which represents the former management company and its principal, Millie Phillips, said the unit owners had not thought through the changeover arrangements.
"The management was given an ultimatum to get out by 10am he said.
"They own the business name, the phone lines, the fax lines and, I think, every stick of furniture except those in individual rooms. They own the paintings on the walls."
Mrs Phillips, who also ran the Canberra Rex, had put a lot of money into painting and maintaining the hotel. She owned 42 Canberra International units as well as most of the public spaces, including the reception area, manager's office, restaurant, dining room, conference rooms and kitchens.
"She feels she's been harshly treated," Mr Green said.
These public areas might have to be sold. "Whoever buys them controls the hotel," he said.
The hotel is expected to reopen on May 24, trading as the Pavilion on Northbourne.
Management Out, So Guests Told To Leave City Hotel Canberra Times May 8, 1999
The 16 investors - whose numbers could soon swell to more than 30 - are suing Filaria Pty Ltd, the company which sold them units, and the Independent Group, which handled the sales on Filaria's behalf.
Nov 1999 The court saga commences
Some of the investors are also suing individual sales representatives employed by the Independent Group and the solicitors they, the investors, engaged to handle purchases on their behalf.
Filaria Pty Ltd is associated with the owner of the Canberra Rex, Millie Phillips. Mrs Phillips owns 42 of the Canberra International's units. Another related company, Jaywood Pty Ltd, which held a lease over the public areas of the hotel, managed the serviced apartments until May this year when the 109 unit holders terminated the arrangement.
One (Canberra law firm) has issued a number of notices under the corporations law asserting that the contracts between investors and Filaria are voidable because of Filaria's alleged failure to issue a prospectus when the units first came on the market. The prospectus issue also figures in the Supreme Court claims.
The claims lodged with the Supreme Court allege misrepresentation, misleading and deceptive conduct and false representations on the part of Filaria, the Independent Group and various sales representatives.
The false or misleading representations allegedly relate to the use to which units could be put and their long-term investment potential, among other things.
The investors are seeking unspecified damages and declarations that their 1993 contracts with Filaria are void.
Hotel Unit Holders Hone Legal Swords Canberra Times November 19, 1999
Wrangling over the once great Canberra International Hotel in Northbourne Avenue steps up a level this week when 42 of the 156 studio apartments split off to become a separate motel-within-a-motel.
Nov 1999 Conflicting views
The owner of the breakaway 42 units and former manager of the Canberra International, Millie Phillips, is to launch the Budget International Motel offering her rooms for $55 a night.
The going rate for other rooms at the hotel is $115.
Now trading as the Pavilion on Northbourne, the hotel has struggled to attract business as Mrs Phillips took with her the registered name, phone numbers and client records, all of which she owned.
As the hotel struggles, small investors who depend on the apartments say they are suffering. Unit owner Iain Blackadder said he and his fellow investors were "bleeding".
"We have had no income from our investment since April and some of us are on interest-only loans."
He said the unit owners spent more than $100,000 on refurbishments after Mrs Phillips left. "It was very rundown."
A spokesman for Mrs Phillips, Paul Green, of law firm Meyer Clapham, said, "When Mrs Phillips ran the hotel, the unit holders received a return.
"Since she was removed, they have received no payments.
"Everybody's a loser."
The chief executive officer of the Premier Hotel Group, Peter Barter, questioned whether Mrs Phillips would be permitted to run the Budget International Hotel from Studio 101 of the hotel.
"It's not in the lease purpose clause," he said.
Mrs Phillips was unmoved.
"The new managers are there illegally anyway," she said.
Mrs Phillips claims ownership of the common areas of the hotel including the restaurant, reception, office areas and function rooms.
"They haven't paid for its use yet." Many of the unhappy unit owners have launched legal action.
They claim they would not have invested in the units had they known how it would all turn out.
Hotel's Woes Continue As Ex-manager Opens Motel Canberra Times November 28, 1999
The long-running dispute between the owner of the former Canberra International Hotel and investors in what is now the Pavilion on Northbourne has seen the ACT Supreme Court refuse to place the latter in the hands of an administrator to end a two-year impasse. The dispute between Millie Phillips's company, Filaria Pty Ltd, and the large number of owners of units at the Pavilion has led to the bizarre situation of having two unrelated and rival hotels operating in the one building.
Mar 2002 A small win for the investors
The upshot was that Filaria began operating the Budget International Hotel, while Premier managed the Pavilion on Northbourne, both from the same premises.
Claiming the arrangement was intolerable and that the original concept of the Canberra International Hotel had been destroyed, Filaria instituted proceedings seeking the appointment of an administrator of the body corporate representing the investors, which the investors resisted. Chief Justice Miles said the present situation was essentially of Filaria's making. Neither the investors nor the body corporate had asked for Budget International to be established.
Hotels in bizarre legal impasse Canberra Times March 11, 2002
Ms Phillips is embroiled in what could be the largest and most complex series of cases yet heard in the ACT as many of the owners of units in the Pavilion on Northbourne Hotel & Serviced Apartments battle to recover their investments.
Jul 2002 The dispute and its implications
The cases could have dramatic implications for the broader real estate industry, for they pose the question of whether developers, agents or owners should be liable for misrepresentation if a property which is described simply as a "good investment" ultimately proves otherwise.
Fifty-nine of the investors have actions against one of Ms Phillips's companies, alleging misrepresentation over how their units could be used and over how profitable they would be.
At the same time, a smaller group of investors in the hotel have launched their own action arguing that because no prospectus was provided at the time they bought their units, the sales breached Corporations Law.
(Today such a scheme would unquestionably require a prospectus but these units were bought before the introduction of the Managed Investments Act.)
All the defendants deny the allegations. What is not in dispute is that the units have proved an ugly investment.
But when the guarantee expired the trouble started. At a memorable meeting, Ms Phillips told investors that the Canberra hotel market was in the doldrums and, with new competitors coming into the market, she could no longer meet their expectations. The investors revolted and terminated the management agreement.
Most signed new agreements with a new operator; some elected to manage their own. Ms Phillips, who owns 42 units in the building as well as the nearby Rex Hotel, went her own way.
First the hotel closed altogether. And since reopening, it has been plagued by disputes between the investors and Ms Phillips over basic hotel necessities, such as the telephone system, the restaurant, the office and the function rooms.
Worse, Ms Phillips is undercutting the investors by offering her rooms at a base $55 a night.
For investors, the results have been disastrous. One owner, who had been banking $1,000 a month in income is now receiving just $320. Sure, they earned big incomes while the guarantee was in place but many, who financed the properties up to the hilt, are today battling to fund the mortgage.
Another investor, a former school teacher in his late 70s, has gone back to work to maintain the units that were supposed to maintain his retirement.
Values have been savaged. One investor believes her unit - for which she paid $123,000 - might now be worth $60,000.
"This case is chewing up huge legal resources and potentially very high costs millions of dollars to the loser," said Ms Phillips' solicitor, Myer Clapham managing partner Paul Green.
Property - Hotel row evolves into legal saga. Australian Financial Review July 13, 2002
In October, the investors failed to convince the court that the transactions they had entered into should be set aside because of breaches of Corporations Law provisions designed to protect investors from dubious investment schemes. The ACT Court of Appeal dismissed last week their appeal against the October ruling. However, the investors' claims of misrepresentation and misleading and deceptive conduct remain alive and have been the subject of a lengthy but unresolved Supreme Court hearing this month. The investors were ordered by the Court of Appeal to pay the costs of Filaria and Jaywood.
Nov 2003 A win for Mrs Phillips
Court dismisses appeal by apartment investors Canberra Times November 1, 2003
A large number of investors in a serviced- apartment project in north Canberra have suffered a second expensive defeat in the ACT Supreme Court in their bid to recover their losses from the developer and a real-estate agency. The court has dismissed claims by four investors that they were the victims of misrepresentation and false and misleading by Filaria Pty Ltd, a company associated with developer Millie Phillips, and the Independent Group Pty Ltd. Several months ago the ACT Court of Appeal dismissed claims by 11 investors that their transactions should be set aside because of breaches of Corporations Law provisions designed to protect investors.
Jun 2004 An expensive defeat for investors - Judges conclusions and criticisms
Justice Crispin said it was understandable that investors were acutely disappointed at the poor returns on their investment. However, their losses - which occurred in and after 1999 - were not attributable to misrepresentation or false or misleading conduct in 1993 or at all.
Allegations that rents had been set at unsustainably high levels and that profit projections had been unrealistic and wrong had not been established. ''The losses which the plaintiffs have sustained seem to have occurred substantially because of management decisions taken in 1999 and a failure to provide the necessary funds to adequately maintain the hotel,'' the judge said. ''The events of 1999 seem to have left the plaintiffs with considerable resentment against Ms Phillips but no cause of action based upon those events was pleaded.'' Instead, the plaintiffs had sought to disclaim responsibility for both the decision to purchase the units in the first place, and for management and maintenance decisions, and to attribute their losses in 1999 ''to some fault on the part of one or other of the defendants in 1993''. ''No adequate basis for these contentions has been demonstrated.''
Case lost against units developer Canberra Times June 16, 2004
Four of the 60 investors in a serviced apartment project in Braddon have been hit with a crushing costs order over their failed litigation against developer Millie Phillips and a real-estate agency, the Independent Group.
Dec 2004 Punitive costs awarded against investors
The four investors and their lawyers, Gillespie-Jones & Co, were criticised yesterday by the ACT Supreme Court for unreasonably refusing to negotiate a settlement of claims the lawyers should have known were at best tenuous.
An indemnity costs order is punitive in nature and is the highest the court can make. The four plaintiffs will have to pay something approaching the full legal costs incurred by their opponents since May last year, including those of a 28-day hearing in the Supreme Court. Hundreds of thousands of dollars are likely to be involved.
In May 2003, Filaria offered to settle all claims against it by buying out each investor for $60,000 and paying everyone's legal costs. The offer was rejected.
A second offer to settle, a few days after the hearing began, was also rejected.
Investors to pay hundreds of thousands, judge rules Canberra Times December 18, 2004
Investors in a serviced apartment project in Braddon may be facing a legal bill of more than $4million as a result of unsuccessfully taking their case to the ACT Court of Appeal.
May 2005 Investors lose on appeal
Canberra businesswoman Millie Phillips, one of the successful defendants, said the case should never have gone to court.
Her company had paid its lawyers $1.3 million. A substantial proportion of this might now be recoverable from the investors. She estimated the investors' own legal costs to be about $3.6million. ''The only worthwhile aspect were the legal fees,'' she said.
The Court of Appeal has now dismissed an investors' appeal against Justice Crispin's legal rulings. It is yet to decide whether his costs orders were justified.
The court said that an investment report prepared on behalf of the defendants, in which various assertions on profitability were made, had ''clearly contained glowing puffery that was appropriately to be ignored''. However, the investors' losses were the result of a depressed market and a falling out with Filaria, not what was contained in the brochure.
Project's investors facing $4m legal bill Canberra Times May 28, 2005
Investors in a Canberra serviced apartment project have rescued something from disastrous litigation against a developer and a real-estate agency, but only to the extent that their losses are not as bad as they might have been.
Aug 2005 Costs for investors reduced by appeal court
But the ACT Court of Appeal has now overturned the judge's ruling. The three judges said that while the settlement negotiations had been confused and ''a mess'', they had been continuing.
The court's order means the plaintiffs must still pay the defendants' costs, but not at the close to full-cost recovery level previously ordered.
Court ruling eases 'crushing' losses for Pavilion investors Canberra Times August 11, 2005
The Rex Hotel
The Rex hotel was not involved in similar controversy. When it was time to pull it down and rebuild, it was decided to redevelop the site for apartment blocks. The project elicited some environmental objections and an outcry about asbestos. A compromise was reached. Then it was bought by someone else, refurbished and expanded.
The Rex was built in 1960 at a site that looked out over empty paddocks and was the first significant building for visitors driving in to the national capital along Northbourne Avenue. Its guests have included United States president Lyndon B. Johnson, Prince Charles and many of the world's best-known leaders, personalities and entertainers, including Shirley Bassey, Sir Robert Helpmann, David Frost, Dame Margot Fonteyn, James Mason and The Seekers.
Dec 2002 The story of the Rex Hotel
Canberra Rex enjoys its final festive feast Canberra Times December 26, 2002
One of Canberra's best-known hotels, the Canberra Rex, sold last week for$12.75 million to Rebenta Pty Ltd, a company associated with Mrs Millie Phillips, the founder of the Milstern Group of companies.
Dec 1988 Bought by Mrs Phillips company
REBENTA IN $12M CANBERRA REX BUY Australian Financial Review December 29, 1988
A $40 million plan to redevelop the historic Canberra Rex hotel into a nine-storey 287-apartment complex has been unveiled for public comment.
Mar 2002 Plan to build apartments - objections
Proposed by Sydney developer Millie Phillips, the one-and two-bedroom apartments would be sold as long-term residences, not serviced apartments, at prices between $180,000 and $240,000.
The plan for the Rex requires Mrs Phillips to surrender her Crown lease over the Braddon hotel site and apply for a regrant. The hotel would be demolished.
The Braddon representative on the Local Area Planning Advisory Committee, Peter Conway, has objected to the proposal on heritage, traffic and occupational-safety grounds.
But he said the major concern was the possibility that the 42-year-old building contained asbestos and he called for certification from Commonwealth and ACT safety authorities that the site was asbestos-free. - - - - - - - - The hotel was fined $5000 in the ACT Magistrates Court in 1997 for exposing employees to asbestos.
$40m redevelopment plan for Canberra Rex unveiled. Canberra Times March 20, 2002
Hotel owner Rebenta Pty Ltd has submitted a development application to Canberra City Council seeking to demolish the Rex and construct 287 residential apartments.
Apr 2002 Development application
The Rex is located on a prime three hectare site on 150 Northbourne Avenue at Braddon in the heart of Canberra's CBD.
Rebenta, which is lead by national hotel owner Mrs Millie Phillips, bought the 31/2 star hotel in December 1988 for $12.75 million. The property previously traded for $2.395 million in 1983.
The Rex was built in 1964 and at six-storeys, was one of the earlier multistorey buildings in Canberra.
It became famous as a stopover for visiting dignitaries, including the then United States President Mr Lyndon Johnson during his visit to Australia in 1966.
Flats For Canberra Rex Site Australian Financial Review April 9, 2002
Turner Residents' Association president Mac Dickins said he feared the proposed 287-unit development would add to Northbourne Avenue becoming a "canyon of buildings". "It's going to be a very big, massive building, and there's very little open space. It's nearly all hard surface, and at the front the set-back is lacking in soft landscaping," Dr Dickins said. "It is out of character with the garden nature of the city and local people are very concerned about the build-up of traffic in the area."
June 2002 Objections
Braddon Residents' Association acting chairman David Gordon said plans presented to the Inner-North Local Area Planning Advisory Committee last September by the developers had been largely acceptable, but the ones proposed now were very different. "The development is significantly more massive and covers the site to a much greater degree," Mr Gordon said. "The number of units is grossly excessive."
Neither the developer, Millie Phillips, nor architect Tom Kean were available to comment. However, Rex Hotel general manager Don Yourell reiterated that Mrs Phillips had not yet decided to proceed with the project and was first seeking development approval.
Locals baulk at Rex Hotel development Canberra Times June 2, 2002
The Rex Hotel on Northbourne Avenue will be demolished early next year to allow for the construction of a 267-apartment complex, due to be completed by the end of 2004. Rex owner Millie Phillips said yesterday the hotel, built in 1960, would be demolished 'as soon as possible'. Approval for the development to proceed was granted by Planning and Land Management on August 28. The building will close early in 2003 and residual asbestos will be removed before the demolition work begins.
Sep 2002 Compromises and approval - to be demolished
- - - - the number of proposed apartments has been reduced to 267. Architect Tom Kean said the change was made to allow for more open space within the complex and the retention of some existing trees. The redesign was prompted by inner-north residents groups who had concerns about the original proposal.
Rex demolition to begin next year. Canberra Times September 7, 2002
Local icon the Canberra Rex Hotel is to double in size with a nine-storey addition costing up to $40million to be built on its site in Braddon. The development will see the Rex increase from 156 rooms to just over 300. Rex Hotel general manager Ray Palmer quashed suggestions from a caller on local radio yesterday that the 1960 Northbourne Avenue building was to be demolished.
Nov 2007 The Rex sold, refurbished and enlarged - Not demolished
The former owner of the Rex, Sydney businesswoman Millie Phillips, proposed in 2002 to demolish the original building to make way for a nine-storey, 287-apartment development estimated to be worth $40million.
Development to see Rex rise and shine Canberra Times November 22, 2007
Favouratism but not for Mrs Phillips:- During this period there were allegations of favourable treatment of Milstern nursing homes because of political donations and ministerial support. There was no sign of this with the Rex. Mrs Phillips was critical when a minister stepped in to fasttrack another operator's project and overrule her objection to this nearby development.
The western area of Civic received a long-awaited boost yesterday with the ACT Government's announcement that the $140 million residential development on Section 6 had been given the go-ahead. Planning Minister Simon Corbell used his call-in powers to short-circuit objections to the development, saying further delays would not be consistent with community benefits.
Dec 2002 Government steps in to helps competitor.
The project hit a sour note with developer Millie Phillips, who wondered why the trees on the Metropolitan site were worth less than the 'six scungy conifers' which had cost her 16 apartments at the 260-unit Rex Hotel development on Northbourne Avenue. 'In the end I sacrificed the units there because I did not want to put in another application and waste two more years,' she said yesterday. 'But I really would like to know why the minister can wave his magic wand for this development but not for mine.'
City West $140m plan gets go-ahead Canberra Times December 20, 2002
Allegations about breeches of the equal opportunities regulations in 2001 elicited an angry response by almost all those who were named. It seems that the regulations required excessively onerous documentation and these companies had refused to fill in the forms. Mrs Phillips who employed large numbers of women was outspoken.
They are among 29 companies in the retail, transport, manufacturing and food and beverage sectors named in the annual report of the Equal Opportunity for Women in the Workplace Agency.
Nov 2001 Mrs Phillips refuses to fill in forms
"Those companies named for non-compliance will have to suffer the stigma of public exposure and the scrutiny of prospective employees who may regard them as being adversarial to women and equal opportunity," Ms Krautil said.
Managing director of one recalcitrant company, Millie Phillips of Milstern Health Care in NSW, said she did not have time to fill in the agency's forms. "It is not appropriate for a company such as mine to have to spend hours and hours and hours of filling in those forms. I've never done it," she said.
"I'm a self-made businesswoman, all my chiefs are women and 95 per cent of my staff is women. If anyone has a complaint, it's men in my organisation ... how much more womanised can I be? "I have told them every year, `I refuse, do whatever you want, name me, shame me' ."
Equal rights file shames firms Courier Mail November 1, 2001
Milstern Health Care, which operates the notorious Yagoona Nursing Home, is among 29 Australian companies named by the Equal Opportunity for Women in the Workplace Agency for its failure to obey the law.
Nov 2001 The act
Milstern Health Care employs about 800 people around NSW and runs Yagoona, Leura and The Ritz nursing homes.
The Act requires companies to report on programs and strategies aimed at employing women and improving opportunities in the workplace for women.
Home in breach of equal jobs Sunday Telegraph November 4, 2001
ORGANISATIONS named in a government equal opportunity "shame file" have hit back, claiming they have been unfairly targeted simply because they refused to complete mountains of paperwork.
Nov 2001 Others support Mrs Phillip in her objections
Four of the five Queensland organisations named said they had active equal opportunity programs but did not have the time to return the paperwork demanded each year.
Shame on YOU - Companies hit back over `outing' in equal opportunity report. Sunday Mail November 11, 2001
The Equal Opportunity for Women in the Workplace Agency announced details of 28 companies in breach of equal opportunity legislation.
Oct 2002 A repeat "offender"
Agency director Fiona Krautil said the number of companies ignoring the needs and rights of women were declining, but many were repeat offenders.
In NSW, 13 companies had failed to comply with federal Equal Opportunity legislation. They are: - - - - - - - - Milstern Health Care Limited [Sydney]; - - - - .
Women take on bosses over rights Daily Telegraph October 29, 2002
Milstern has been active in the Retirement Village marketplace. This sector suffered during the late 1988 economic downturn and investors were slow to return to it.
The chairman of Milstern Health Care, Mrs Millie Phillips, said she had developed four retirement villages, the newest being Windsor Gardens at Chatswood.
Sep 1993 Retirement villages
"The reluctance to lend to industries such as ours follows the badly considered loans made by banks during the excesses of the '80s," Mrs Phillips said.
LENDERS SHUT VILLAGE GATES Sydney Morning Herald September 25, 1993
Windsor Gardens in Mowbray Road, Chatswood is Milstern's newest retirement village. Milstern has a chain of nine villages, providing all levels of care.
Mar 1996 Owns nine villages
Villages Can Improve Quality Of Life For The Elderly Sydney Morning Herald March 16, 1996
Urimbirra Village - "The worst village" (Rewritten and updated Jan 2009)
Residents who have purchased retirement units from one owner whom they have researched and believe will care for them responsibly in their declining years may find themselves and their services sold off to an owner who behaves very differently. This can have an enormous impact on their lives and on the quality of their final years. This is simply another situation where the market fails in aged care.
The Urimbirra Village in Hervey Bay (Queenssland) was referred to as "The Worst Village" in a 2004 report from the Association of Residents of Queensland Retirement Villages. What happened there illustrates just how powerless residents are in the marketplace, and the consequences of aggressive commercialism for residents.
A bitter dispute between Milstern and the residents at Urimbirra Village has dragged on for 15 years. During this time their numbers steadily dwindled as the new owner, whom residents claim wished to redevelop the increasingly valuable property, bought out units as they were vacated and induced other residents to sell. Residents claim they were put under pressure to sell for a fraction of their unit's real value and for much less than they had originally paid.
A nucleus of thirteen 80 and 90 year olds held out and battled on alone, receiving very little assistance from the bodies set up to protect their interests. It was only in December 2008 that a decision in their favour was made by the Commercial and Consumer Tribunal (CCT)vindicating their position. The tribunals findings were damning of Milstern and Ms Phillips, but they do not require Milstern to either continue operating the facility or to pay a fair price for these units, let alone one which compensates them for the disruption in their planned retirement - so the battle continues.
Milstern purchased the Urimbirra retirement village in a bulk deal as part of a package of mostly NSW facilities in 1994. The residents were soon in dispute with the new owner. There was correspondence with the office of fair trading about Milstern's conduct as early as 1998.
Residents claim that Ms Phillips did not want the facility, claimed she could not make a profit from it, took little interest in it, and that she has blamed the residents for problems there. Residents claimed that the property was not well maintained, was allowed to deteriorate, there was little if any consultation with residents, few replies to correspondence, and that little effort was made to sell empty units. Property in the area was booming. The residents believe she wanted to get them out and redevelop the site to make more money from it.
Relationships deteriorated further in 2000 when Milstern sent residents a demand that they pay an extra $90 a month. Some paid but others refused because of inadequate financial documentation for this charge and because of unresolved tax issues relating to the payment of GST. The residents had difficulty in getting these matters to the tribunal because of legal jurisdictional difficulties resulting from a recent change in the act.
number 49 of December 2004 from the The Association of Residents
of Queensland Retirement Villages had a section near the bottom of the
page headed "The Worst Village". This described the concerns
had about the way in which Milstern dealt with units at Urimbirra village
when the residents departed, and also residents complaints
They believed Milstern was in breach of the conditions under
village was registered as a retirement village and was unlawfully defying the Retirement Villages Act. Authorities took no action.
The residents were also concerned about the retrospective removal of a large sum from the sinking fund. Even though there was still money in the sinking fund a levy was then raised from the residents to pay for a new call system else this would have been refused by Milstern. The residents felt that Milstern advertised this in its brochures and should have paid for it. They gave in because of its urgency for many elderly residents.
The Office of Fair trading was approached in 2001 and again in 2003 about Milstern's accounting practices, but despite many promises, the residents were disappointed by their inaction.
The residents were dissatisfied with Milstern's accounting practices and believed they were a breach of the act. There were a multitude of financial and accounting matters they took issue with. They believed that Milstern was not disclosing accounts to them that they were required to disclose. Residents refused to approve the villages accounts because they felt Milstern supplied insufficient detail. There were disputes about what Milstern rather than residents should be paying for.
Milstern increased general services charges by 7% when the regulations specified that they could not be increased above the CPI (2.6%) without the approval of residents. The residents had not agreed to this and had not approved the budget. The budget they claimed gave insufficient information and did not conform with the act. They maintained their stance even when Milstern claimed that the company might have to be wound up.
Urimbirra staff dismissed (Added July 2010)
There is an interesting snippet available on the web. It seems that in response to a complaint by the residents, an inspector from the Department of Fair Trading attended the village. Mr Crossland, the manager signed consent forms to allow him on site and also provided confidential documents to him. He failed to notify Milstern and did not seek their authority. He was promptly dismissed by Milstern, and at the same time his de facto who also worked at the complex was also fired.
The matter came to the Queensland Industrial Relations Commission in February 2004. They found that there were grounds for dismissing Mr Crossland as he had not told his employer about this. The commission found that the de facto had been dismissed on the grounds of marital status only and awarded damages of $9000, almost the maximum allowable.
The 2005/6 Tribunal Decision
Milstern applied to the Commercial and Consumer Tribunal (CCT) in 2005 asking them to approve the budget which the residents had rejected. In rejecting Milstern's application on 11 December 2006 the tribunal was critical of Milstern's management and its breaches of the act. It expressed concerns that the manager of the home had made an implied threat to get residents to do what Milstern wanted. They were concerned about future "detriment to residents at the hands of the applicant as a result of their action in rejecting the budget and defending this application".
CLICK HERE to download the 2006 tribunals findings
Dec 2006 CCT rejects Milstern's application
1: - - - - - - - - The order sought is that the budget for the village for the 2005/2006 financial year which has been presented to residents of the village, but not passed by them, be approved by the Tribunal. John W Sheppard and Vince Royce (“the first and second respondents”) are co-spokespersons for the residents and they seek orders that the application be dismissed on the basis that the proposed budget for 2005/2006 is in contravention of the Act.
7: - - - - - - It is clear upon an examination of the material before the Tribunal that both the budget and account keeping records do not comply with the Act. The figures in the proposed budget show that the applicant has increased general service charges by seven percent. This figure is above the CPI figure and therefore is non- compliant with the Act. There is provision for the increase to be approved by the residents, however this would require the increase to be approved by special resolution and no special resolution meeting has been called.
14: The Tribunal is satisfied that the proposed budget for 2005/2006 has not been prepared in accordance with section 106(2) of the Act as it stood in 2005, and that there has also been non-compliance with section 97 of the Act in the way in which the maintenance reserve fund is dealt with in the budget. The Tribunal is unable to approve the budget in its present form and the application must be dismissed. The budget must be reworked and presented again to the residents in a form which complies with the Act.
15 The applicant has demonstrated lack of care and responsibility in constructing the budget. Mr Garven appears to have adopted the attitude that it was the responsibility of the residents to advise the applicant if the budget was in contravention of the Act, rather than the applicant accepting its clear obligation to prepare a budget which complied with the Act. Mr Garven has made an implied threat that retribution may be exacted on the residents of the village for their refusal to pass the budget. He has said that as a result of the residents’ action the management company may have to be wound up. We are concerned about the potential for detriment to residents at the hands of the applicant as a result of their action in rejecting the budget and defending this application. The applicant must address the legitimate concerns raised by the residents. The delay in having the 2005/2006 budget passed is in no way the fault of the residents, but is the result of the applicant’s unacceptable conduct in preparing a budget which does not comply with the Act.
Commercial and Consumer Tribunal : Application No:VH012-05 Delivered at Brisbane December 11, 2006
Dec 2008 Summary of 2006 CCT finding by 2nd 2008 CCT hearing
53 It must be noted that the Tribunal refused to approve the proposed budget for the village for 2005/2006 in an application brought by the respondent in 2005. The Tribunal found that the budget was in contravention of sections 97 and 106 of the Act.
Commercial and Consumer Tribunal : Decision/VH009-07 December 18, 2008
Costs were awarded against Milstern but it took some time to pay them. No action was taken against Milstern, by authorities, for breaching the act. Milstern ignored the criticism of its accounting practices and the residents continued to reject the budgets.
(Added July 2010) They sought help from their local MLA, Tim Nichols and a reporter from the local paper. The Association of Residents of Queensland Retirement Villages reported in April 2007 that according to the chronicle reporter village manager Jim Garven verbally abused her and ordered them off the property. When the MLA refused to leave Garven threatened to call the police.
The December 2008 Tribunal Hearing
The residents applied to the tribunal seeking orders requiring Milstern to prepare its accounts in accordance with the act and to pay them additional GST refunds they believed Milstern still owed. This was followed by almost 2 years of fruitless tribunal required mediation before the tribunal finally took evidence.
Milstern meanwhile attempted to force the acceptance of the accounts by threatening to use the votes of the majority number of units they owned if the residents did not approve the accounts. Milstern was not a resident and not entitled to vote and the residents refused to back down to this threat. Ms Phillips response to a press report about what was happening was typically aggressive.
June 2008 Still a bitter dispute.
THE owner of a Hervey Bay retirement village has been accused of offering one of its unit owners, who is sick and infirm, less than half what government-approved valuers say her property is worth.
Four cases involving Urimbirra Village, relating to service and maintenance fees and alleged failures by Milstern to provide accounting records, are before the Commercial and Consumer Tribunal.
Urimbirra residents claim Milstern has bought back the leases of at least 30 of the 49 units in the complex. Some believe Milstern may want to buy all the leases so the site can be redeveloped.
But Milstern's owner, Millie Phillips, said some residents had affected the village's reputation through complaints to the State Office of Fair Trading and Minister for Justice Kerry Shine.
``There is a mile of documents of complaints and the complaints have no basis and now no one wants to buy there. They are like the animal that eats its own entrails and now they want me to come in and buy their places from them. I'm not obligated to look after their financial affairs,'' Ms Phillips said.
The property of a 98-year-old dementia patient is at the centre of one dispute with Milstern. Eunice Holland and her late husband James bought a 99-year lease in Urimbirra village in 1993 for $76,000.
Although property values in the area have soared, Milstern offered $55,000 for Mrs Holland's unit in 2006, according to her son, Jim. An independent valuation by a valuer approved by the Office of Fair Trading in March 2005 had estimated the property to be worth as much as $120,000, documents show.
Buyback is unfair, says son - Woman, 98, offered half price for retirement unit Sunday Mail June 8, 2008
Residents believe that not only has Milstern breached the regulations but that the regulations do not adequately protect residents. They have pressed politicians and the minister to make changes but without any success.
The residents believe that for many years Milstern has wanted to deregister the village and then cash in on the Hervey Bay property boom by developing the site. They believe that they have been put under pressure to induce them to sell out. Milstern has made little effort to sell vacant units. It has made the village unattractive for buyers by not maintaining it.
Residents received an offer of purchase which they considered an unrealistically low figure, well below market value. They believed that the purchaser was Milstern itself. Some residents agreed to sell the units to Milstern and then rented them from Milstern to live in. By 2008 only 13 resident owners remain as Milstern purchased almost all of the remaining units and rented them out. Tenants were given access to all of the complex's facilities and services but were not bound by the community's rules.
The Tribunal's December 2008 Decision
The residents have fought these issues through a multitude of tribunal required but fruitless mediations and directed hearings prior to evidence being heard by the Commercial and Consumer Tribunal (CCT) in August 2008. In December 2008 the CCT handed down a decision in which virtually all of the orders sought by the resident owner's were upheld. The residents have applied for costs against Milstern.
The comments made by the tribunal in its decision speak for their view of the sort of person Ms Phillips is, the sort of people who work with her, and the way in which the company Milstern operates. These comments, when seen in the context of many other reports over the years go to the heart of the problem of suitability and of probity of aged care operators and owners.
Consider the tribunal's comments. Set these against Ms Phillips' comments only 6 months earlier and decide for yourself whether these are the sort of people who should be caring for the frail elderly in their final years. To explore the resident's story in greater depth and read the tribunal's comments download their decision. by clicking the link.
June 2008 Ms Phillips criticises residents
"There is a mile of documents of complaints and the complaints have no basis and now no one wants to buy there. They are like the animal that eats its own entrails and now they want me to come in and buy their places from them. I'm not obligated to look after their financial affairs,'' Ms Phillips said.
Buyback is unfair, says son - Woman, 98, offered half price for retirement unit Sunday Mail June 8, 2008
Dec 2008 The CCT decision and criticisms
EXTRACTS ONLY. For a complete copy of the decision click here
Nature of the petition
2 The amended statement of claim filed I November 2007 raised three broad claims against the respondent: a refund of GST, breaches of the lease and/or residence contract and a failure to provide financial documentation. The amended statement of claim sought orders as restated in a document handed to the Tribunal at the commencement of the hearing. The orders the applicants seek are: “
(1) That the respondent refund the sum of $1,000.65 to each resident
(2) That the respondent provide to the applicants a copy of the financial records (including copies of invoices) for each of the financial years commencing from 1 July 2000 30 June 2008 relating to each of the accounts being general services fund, maintenance reserve fund and capital replacement fund.
(3) That the respondent provide to the applicants a reconciliation for each of the financial years commencing from 1 July 2000 to 30 June 2008 in respect of the Ledger account and the bank balance for each of the accounts being the maintenance reserve fund and the capital replacement fund.
(4) That the respondent provide to the applicants a reconciliation of maintenance reserve fund and the capital replacement fund accounts plus copies of bank statements showing operating and closing balance and transactions for each of the financial years between the period 1 July 2000 and 30 June 2008.
(5) That the budgets for the period 2003/2004 to 2006/2007 be set aside as invalidly passed.
(6) That the respondent complies with its duties under the Retirement Villages Act, and the public information documents and releases.”
6 This claim followed a long period of disputation between the applicants and the respondent regarding the financial accounts of the village and an alleged failure by the respondent to provide documentation to prove expenditure that the respondent claimed the applicants were obliged to pay.
7 In or about May 2005, the applicants served on the respondent a Notice of Dispute pursuant to section 154 of the Act. On the 8 July 2005 a mediation conference was held, an agreement was reached and this agreement became an order of the Tribunal on the 15 December 2005. The applicants alleged that the terms of this agreement have been breached.
9 The respondent denied that the financial statements were inadequate, said the statutory requirements were complied with and that copies of all documents have been provided.
Observations and Findings
Order 1: GST – that each resident should receive a GST refund of $1,065.00
20 Furthermore, the applicants submitted that the calculations undertaken by the accountant, Mr Thomson (auditors for Milstern), were flawed and contained numerous inaccuracies. We find that the methodology used to calculate the refunds contained inconsistencies, was arbitrary and the Tribunal also has no confidence that the calculations by Mr Barnes, the respondent’s (Milstern) accountant, were accurate.
23 As the GST money was paid pursuant to a mistake, it should be refunded in full: per David Securities Pty Ltd v Commonwealth Bank (1992) 175 CLR 353
Orders 2 - 4: Financial records
27 - - - - - -These orders arise from the complaints about the financial records especially the GSF, MRF and the CRF. The applicants are seeking copies of financial records for each of the financial years 2000 through to 2008 for the GSF, MRF and CRF; a reconciliation in respect of the ledger account and the bank balance for the MRF and the CRF for the same period and a reconciliation of the MRF and CRF; plus copies of the bank statements showing opening and closing balances for the relevant periods.
30 Mr Barnes conceded that a balance sheet listing the assets and liabilities including accumulated debts had not been prepared for the village. He made the surprising statement that the village did not have any assets to record. This is an extraordinary statement in light of the statutory requirements to have a MRF and CRF, which are assets, and the village has many smaller items such as lawn mowers, garden equipment and office equipment. Even in the absence of assets, section 113 (1) (c) of the Act mandates that such a document be prepared. Also, an income and expenditure statement for the CRF and MRF, (section 113 (1)(a)) and an expenditure statement for the GSF, (section 112 (2) (b)), must be prepared. Profit and loss accounts and balance sheets were prepared by the respondent for its entire operation in both New South Wales and elsewhere, but a compliant profit and loss statement and balance sheet were not created for the village as required by section 113 of the Act.
36 - - - - - - Mr Barnes had difficulty following his own accounts and he could not explain many of the items listed. It is no wonder Mr Sheppard and the residents could not understand the accounts.
38 We have closely examined the accounts of the MRF and CRF and confirm that they were difficult to understand, were not self-explanatory and they did not follow one year to the next as the closing balance was not carried forward to be the opening balance for the next year. The amount in the accounts varied from year to year without explanation.
39 The evidence about how decisions were made and communicated to head office about the allocation of expenses to the GSF, the MRF or CRF was extraordinary. - - - - - .
41 This procedure was amateurish, unprofessional and confusing. The mixing of MRL accounts and other accounts was unsatisfactory, improper and a breach of the provisions of the Act.
43 - - - - - - Mr Barnes initially said these accounts were styled trust accounts but after he was shown bank statements without this style he conceded the accounts were general bank accounts and not trust accounts. He conceded that he had no knowledge of the requirements of the Trusts Act 1973 and was not aware of the requirements of sections 95 and 101 of the Act: that a scheme operator must not invest an amount standing to the credit of the CRF and MRF other than in authorised investments under the Trusts Act 1973.
44 The evidence of all the witnesses for the respondent was unsatisfactory when it came to compliance issues. It is clear that Mr Barnes, Mrs Phillips and Mr Garvin had limited knowledge of the requirements of the Act and it is clear the Act has not been complied with.
45 We find that Mr Sheppard (resident) was a reliable witness and we accept his evidence in its entirety.
46 We accept the evidence of Mr Sheppard that he had attempted to obtain copies of documents and these have not been provided and it is understandable why he could not understand the accounts on the information provided. We accept the evidence of Mrs Phillips that documents relating to financial years before 2003/2004 have been damaged, destroyed or lost and cannot now be produced, but we will order that a copy of the financial records for each financial year commencing from 1 July 2003 be produced to the solicitors for the applicants.
47 The applicants have raised issues other than those discussed that concern compliance with the Act. We have not considered all these issues as we are satisfied that there has been substantial non-compliance with the Act. The applicants are entitled to the orders sought for the year commencing I July 2003 and thereafter.
48 We find that the respondent has failed to provide to the applicants financial records for each of the years commencing 1 July 2003 to and including 30 June 2008 relating to each of the GSF, MRF and CRF, including copies of invoices and documents substantiating each item in the funds.
Order 5: Budgets
51 The credit of Mr Garvin and Mrs Phillips is seriously compromised when a letter dated 17 May 2007 and signed by Millie Phillips is considered. This letter provides:
“ I hereby give my proxy vote for each of the above units to Jim Garvin who has been instructed to vote in favour of passing budgets as presented to the village for the years 2003/2004, 2004/2005, 2005/2006, 2006/2007.”
52 This was a purported attempt by Mrs Phillips to give Mr Garvin her proxy vote with respect to all the units that were owned by MRL, in order to pass budgets for four (4) financial years in the face of the refusal of residents to pass those budgets. Both Mrs Phillips and Mr Garvin were at pains to submit that the vote was not taken and this document was not prepared as a proxy vote: Milstern Retirement Services Pty Ltd v Sheppard & Royce  CCT VH012-05. We reject their evidence in its entirety with respect to this issue as the document speaks for itself.
54 The applicants submitted that the budgets have been invalidly prepared. We accept this submission and find that the budgets are prepared inaccurately and incorrectly. For some items Mr Barnes adopted the proposed budget item and for other items it was based on the actual costs.
55 It is accepted that the budgets for the relevant years were not passed, so we do not consider it necessary to make an order that the budgets be set aside as being invalidly passed. We consider that the respondent is incapable of recasting the budgets and it will be necessary for an independent accountant to be appointed to undertake this task, and we will so order.
Order 6: That the respondent complies with its other duties under the Act
56 The applicants maintained that the respondent has infringed other provisions of the Act, has unlawfully tenanted the units and unlawfully claimed a management fee.
57 The respondent is obliged to comply with all the provisions of the Act - - - - .
58 Accordingly, it is not necessary to consider whether there has been compliance in these other regards with the Act.
59 The Tribunal orders will be:
1. The respondent will refund to respective applicants the sum of $396.70 in respect of each of the applicants’ units by, 4:00pm on 23 of January 2009.
2. The respondent will provide to the applicants’ solicitor a copy of the financial records (including copies of invoices) for each of the financial years commencing from 1 July 2003 to 30 June 2008 relating to each of the accounts, being General Services Fund, Maintenance Reserve Fund and Capital Replacement Fund by, 4:00 pm on 23 January 2009.
3. The respondent will provide to the applicants’ solicitor a reconciliation for each of the financial years, commencing from 1 July 2003 to 30 June 2008, in respect of the ledger account and the bank balance for each of the accounts, being the Maintenance Reserve Fund and the Capital Replacement Fund by, 4:00pm on 23 January 2009.
4. The respondent will provide to the applicants’ solicitor a reconciliation of the Maintenance Reserve Fund and the Capital Replacement Fund accounts plus copies of bank statements showing operating and closing balance and transactions for each of the financial years commencing from 1 July 2003 to 30 June 2008 by, 4:00 pm on 23 January 2003 (mistyped in original - should be 2009).
5. The applicants will appoint an independent accountant, as agreed by the parties, and failing agreement as appointed by the Tribunal, to re-cast, at the expense of the respondents, the budgets for each year commencing 1 July 2003 until today’s date.
6. The independent accountant will be provided by the applicants’ solicitors with the financial material referred to in orders 2, 3 and 4 above.
7. If the independent accountant requests a bond for security for its fees the security is to be paid forthwith by the respondent into the trust account of the solicitors for the applicants to be held by the applicants’ solicitor pending completion of the work of re-casting the budgets.
Commercial and Consumer Tribunal : Decision/VH009-07 Delivered at Brisbane December 18, 2008
(Added July 2010) The Association of Residents of Queensland Retirement Villages in September 2008 refer to trusting/gullible retirees being duped by an unscrupulous operator. At a June 2008 Ministerial Working Party, Aged Care Queensland (for operators), The Association of Residents, and the Office of Fair Trading united in an attempt to solve the problem at Urimbirra Village. They planned to develop a comprehensive case "against this recalcitrant operator, aimed at securing enforceable Orders - - - - which would mean severe financial penalties."
The importance and wider relevance of these criticisms
In spite of the repeated complaints by residents to a multitude of agencies and to politicians, in spite of the support of their representative body, and in spite of the findings of a previous tribunal, no action has been taken to penalise Milstern and its owner or to require them to meet their obligations to residents under the act. There have been no suggestions that authorities will act now. We may well ask how likely it is that Milstern will meet its requirements when there is no enforcement?.
Milstern also owns and operates nursing homes. One must question whether it is acceptable for owners like this to have control over the care of our frail and vulnerable citizens. Under the pre-1997 regulations such credible criticism would have gone to the suitability of the current owner, and the company's probity. As I understand it there were once powers that permitted the authorities to step in.and act to address such issues and protect residents. The department boasted to me about them in 1994. These were removed in 1997.
In 1999 Ms Alison Rosevear from the aged care department of health and ageing assured me that the aged care act 1997 was intended to ensure that only "suitable people" cared for the aged. It did not do so. In 2007 the then minister for health, the Hon Tony Abbott MP also undertook to make changes to ensure that this was so but lost power before doing so.
There have been multiple allegations and reports about Ms Phillips' activities, about her public statements, and about problems at Milstern owned facilities over many years. While they are representative of market practices. these must raise very serious concerns about the suitability of both to operate nursing homes and retirement villages.
As a community we should expect a track record like this to be investigated. If the criticisms are valid then we would expect the necessary steps be taken to protect residents by removing Milstern and its owner from the register of approved providers.
This would also send a clear message to other operators that the community will not tolerate operators who place commercial interests ahead of their responsibilities to the community and their humanitarian obligations to the elderly. Because of the inadequacy of our regulations and the failure of enforcement these operators have been getting the very opposite message for years. We need to make it very clear that competing fiduciary responsibilities to owners and shareholders must not override or compromise these responsibilities to the community and its members.
It is unconscionable that elderly citizens in their 80's and 90's, many of them frail and with declining mental capacity, should be treated like this; and then left to fight through a multitude of complex processes and regulatory bodies in order to establish their right to fair treatment. This imposes enormous stresses on them and destroys the quality of their lives. As a community we should hang our heads in shame.
The New Regulatory Morass
In December 2008 the aged care regulations were revised. The new minister claims that they give more attention to the suitability of owners as well as better regulation of managers and operators. I found this legislation confusing and difficult to understand. It is unclear to me whether it has now addressed the problems posed by "unsuitable" operators and who in the department has responsibility for this.
Milstern will be a critical test case for the new bill. If the federal department of health and ageing is unable to examine the damning Commercial and Consumer Tribunal's criticisms and mount an investigation into Milstern's suitability to be an approved provider then the revised legislation will be shown to be almost as ineffective as the act it amended. An applicants unsuitability is often not apparent when it enters the market in decrepitude. This only becomes evident later.
UPDATE February 2010 Urimbirra Village
Milstern and the approved provider process
In December 2008 the Minister for Ageing succeeded in passing amendments to the aged care act 1997 through parliament. These she claimed would give attention to the important role that owners played and so further protect nursing homes. How such complex legislation would work was far from clear. There seemed to be numerous loopholes which allowed unsuitable operators to be responsible for residents. To test the scope of this legislation an objection was lodged with the Nursing Home Approved Provider authority to both Milstern and Ms Phillips’ approved provider status.
From the response it can be deduced that the authorities were not empowered to consider any conduct except that directly related to nursing home ownership. Residents therefore continue to be at the mercy of people whose conduct elsewhere suggests that they might pose an unacceptable risk to residents.
CLICK HERE to read more and review the correspondence
MILSTERN’ RETIREMENT VILLAGE MAY BE LIQUIDATED
In spite of the damning findings of the Tribunal in December 2008 in the Urimbirra case Millie Philip and her company have continued to procrastinate and ignore deadlines and correspondence from the tribunal. Costs were awarded against her. Court deadlines for responding have gone by and the legal system has granted endless extensions. The authorities charged with protecting the rights and interests of residents seem to have fallen over backwards to protect Ms Phillips and allowed the dispute to drag on for another year.
The appointment of an independent forensic accountant was frustrated for months and the court was forced to appoint one to recast financial accounts and budgets from the year 2003 onwards. Practically no records have been given to this accountant so the whole process has stalled since 2008.
The residents were required to go through repeated mediation processes. In July 2009 a number of side issues were resolved. Milstern Retirement Services agreed to repay back moneys related to claimed rate paying and payroll tax irrgularities by Milstern. The residents agreed to forgo a minor claim regarding electricity and ambulance levies. A serious complaint relating to alleged illegal rental of units by Milstern could not be resolved and is still before the courts. It has dragged on into 2010 with no date set for resolution.
One of the resident’s families and the Association of Residents of Queensland Retirement Villages (ARQRV) was threatened with a defamation action after informtion was given to the ARQRV and this was published on their web site. Ms Phillips sought out a new lawyer to do this, a lawyer recently reprimanded and suspended from practice for 4 months by the Supreme Court of Queensland. Charges of “professional misconduct” and “unprofessional conduct” had been established. (Legal Services Commissioner v McClelland  LPT 13)
Miss Phillips has sent out flyers and done letter box drops across the state attacking the Queensland government and its legal system. One can only wonder what she possibly hoped to gain by this.
Open letter from Ms Phillip
Notice of Application for winding up
Courier Mail 30/31 January 2010
Milstern Retirement Services failed to pay the residents the costs awarded by the court. In January 2010 the residents lodged an application for the winding up of Milstern in Insolvency. It owes them $57,184 which Milstern Retirement Village had been ordered to pay by the Commercial and Consumer Tribunal in October 2009. The case is to be heard in February 2010.
There is reason to believe that Milstern Retirement Villages has sold some if not all of its other Retirement Villages which are in NSW to Meridien. The deal was delayed by the economic downturn but now seems to have gone through. Urimbirra Village may be the company’s only remaining asset. Milstern should be flush with funds and well able to pay the residents rather than be put into receivership.
Whether Milstern and Ms Phillips have in some manner arranged for the money from the sale not to be paid to Milstern Retirement Villages itself, and have stripped the company of assets remains to be seen. In the USA organisations specialise in buying companies, stripping their assets, and then allow debtors to put them into liquidation. Debtors and shareholders get nothing. Whether this can happen in Australia and has happened in this case remains to be seen. The residents might get nothing and be left with the huge legal costs of the cases. If this happens it is difficult not to conclude that the agencies responsible for protecting residents have colluded with the owner. They have failed to protect the residents and it looks as though they stood by as residents were in effect defrauded.
Urimbirra Update July 2010
Milstern pay's up rather than wind up
I have learned that the action to wind up Milstern was withdrawn when Milstern offered to settle and paid the Urimbirra residents the $57,000 owed, plus $1800 interest and the $9000 costs for taking the case to the Supreme Court.
The Residents win on payments and rentals but Milstern appeals
Millie Phillips acknowledged that she had purchased the Urimbirra Retirement Village because the property was valuable and could be developed more profitably. She attempted to wind it down. This seemed to be a major loophole in the law. Robin Lyons used Urimbirra as a typical example of the way in which owners exploited this loophole in section 3.1 of a paper he presented to the Retirement Villages Association Conference 2009. The residents claimed that Milstern had allowed the village to fall into disrepair, had not complied with accounting and record keeping responsibilities. Outgoing residents had no choice but to sell their units to Milstern for very low amounts and Milstern was then renting them to casual tenants.
The act was far from clear and Lyons indicated "that there is no clear breach of the Act as it is currently drafted on which the residents can take action against the operator. The operator is not attempting to terminate the residents' rights to reside in the village, but rather to encourage residents to leave of their own volition and allow the operator to 'buy back' their rights to reside at significantly deflated prices."
Lyons found that the Office of Fair Trading took a very conservative approach and would not interfere to protect residents rights. Few resident groups would have the resources or the persistence to appeal to the Tribunal or beyond.
Urimbirra it seems was the exception. They took the latter to the tribunal and succeeded.
During the mediation process in 2009 Milstern agreed to pay all but one of the sums that the residents claimed they were owed. The issue of the rental of units was not resolved and went to the tribunal.
The tribunal agreed with the residents and ordered Milstern not to rent the units it owned as this was in contravention of the Retirement Villages Act 1999. Milstern was required to ensure that these tenants "be removed from the Urimbirra Retirement Village forthwith". Milstern were required to pay the residents costs.
My information is that Millie Phillips did not show up for the tribunal and so did not put her case. She then claimed that she was injured and unwell and did not know the day it was on. She was given leave to appeal and did so. She has also failed to disclose new lease agreements that she claimed in court had been signed with renters. She was ordered to supply them but has not done so. The matter is to be heard again early in August.
Lindfield Manor Retirement Village
Dispute with residents:- There was a dispute with residents at Milstern's Lindfield Manor Retirement Village and this went to court. A politicians and the minister for fair trading joined in the conflict. Judges decided in favour of the residents.
Nov 2005 Residents get political support
HEAVY-HANDED and arrogant is how Barry O'Farrell has described the treatment of residents at Lindfield Manor Retirement Village.
The State Liberal MP for Ku-ring-gai made a damning speech in State Parliament earlier this month after listening to residents' woes about increases in levies and alleged decreases in service.
Milstern Health Care manages the village and Mr O'Farrell accused it of unjustly raising its monthly levies two years ago.
Mr O'Farrell said residents had told him they were never informed that Milstern had taken its case to obtain the increase of $25 a week for each of the 44 units in the village to the NSW Consumer, Trader and Tenancy Tribunal.
This would bring monthly levies to $1160 a resident, he said.
"Residents were not present because they were not told the hearing was on," Mr O'Farrell said.
Mr O'Farrell said residents also had said services such as afternoon tea and a monthly bus excursion had been cut.
Mr O'Farrell's speech enraged Milstern's retirement services principal Millie Phillips who has called for his resignation.
"He has ridden roughshod over all of this and he has misled parliament," she said.
Mrs Phillips said "99 per cent" of Mr O'Farrell's allegations were false and any complaints have come from only two residents.
She said resident committees had access to all of the village's financial documents and it took up to 18 months to negotiate how the money would be spent.
She said her next action would be to prepare a detailed written response to Mr O'Farrell's allegations.
O'Farrell blasts rise in levies North Shore Times November 18, 2005 ----- CLICK HERE TO LINK TO THE SPEECH IN NSW HANSARD 8th Nov 2005
Dec 2005 Minister for fair trading helps residents
THE Fair Trading Minister has joined a legal battle launched earlier this year by residents of Lindfield Manor Retirement Village.
Diane Beamer announced her office would pay for counsel to represent the residents in a Supreme Court appeal by the village's operator, Milstern Health Care.
The residents challenged a series of additional budget expenditures from Milstern during the fiscal years of 2004 and 2005.
The two camps faced off in May in the Consumer, Trader and Tenancy Tribunal, over last year's charges and the residents won an order for Milstern to repay $70,500 of additional charges in the form of cost overruns.
Most of the budget blowout originated from wages paid to kitchen staff.
"In the circumstances I am satisfied it should not be left to the elderly residents to defend the action commenced by the operator," she said.
In the meantime, a similar case was heard before the Tribunal over blowouts to the 2005 budget for which Milstern also assessed the village's residents.
The tribunal in November ruled again in the resident's favour and ordered Milstern to repay the residents a total of $73,000.
Milstern must pay by December 31 but its principal Millie Phillips said her company would lodge a similar appeal to the Supreme Court and hopes the two cases can be heard as one.
She said Milstern has done everything to conserve costs in light of residents' demands.
Regarding the kitchen staff wages, hiring people for two hours a day to serve meals would be near impossible to find, she said.
"Now they say we shouldn't have so many people in the kitchen but they have demanded so," Mrs Phillips said.
Minister joins residents' fray North Shore Times December 7, 2005
Sept 2006 Appeal court supports residents
Residents of Lindfield Manor retirement village won a court battle last week against the village's operator Milstern Retirement Services. - - - - - - - Milstern's appeal to the Supreme Court was dismissed.
Big win for residents North Shore Times September 20, 2006 CLICK HERE TO GO TO THE DEBATE ON THIS IN NSW HANSARD 20 SEPT 2006 (search for Milstern)
The NSW Office of Fair Trading has supported the residents and funded them in the Supreme Court appeal by Milstern.
PRESS RELEASE BY THE OFFICE OF FAIR TRADING 14 September 2006
This nursing home was sold to Meridien in 2009.
A dispute about Kitchen Expenses (Added July 2010)
There was an interesting dispute about kitchen expenses at Lindfield manor reported in the Consumer, Trader & Tenancy Tribunal Bulletin in October 2006 - item 5. It seems that Milstern claimed $150,544 for kitchen wages (I am not clear who this was from - presumably residents). The tribunal considered this excessive and allowed $100,000, requiring Milstern to pay the extra $50,000. Milstern appealed. It made multiple claims including an apprehension of bias and that its representative, Mr Barnes had no legal expertise and was not given a reasonable opportunity to marshall evidence. This seems to be an ongoing strategy.
The Justice reviewed the course of the earlier Tribunal proceedings and found that Barnes had been given ample opportunity.and found that "the submission that there was an apprehension of bias failed".
The Nursing Homes
Allegations about the company's nursing homes were aired in the press and in parliament starting in 2000. These were based on accreditation agency reports. All were denied and disputed by the persons mentioned.
Jul 2001 Allegations of profiting by reducing staff
The Sydney nursing home under scrutiny over its care standards sliced almost 10 per cent from its wages bill as revenue boomed, internal documents show.
Now leaked figures from Mrs Phillips's company, Milstern Health Care Pty Ltd, have revealed the company significantly cut staffing between 1997 and 2000 despite enjoying increasing revenue which would come primarily from government subsidies.
The figures show that revenue at the Yagoona home jumped from $6.2 million in 1997 to $6.7 million up 8 per cent.
However, total labour costs were cut by 7.4 per cent, from $4.5 million to $4.2 million.
There were similar cuts at the group's other homes, The Ritz and Curie Nursing Home.
The Yagoona home hit the headlines after the Aged Care Standards and Accreditation Agency overturned a recommendation from its assessors that the home's accreditation be revoked because of poor care standards. This prompted the questions about Mrs Phillips's links with the Liberals.
The staffing figures tally with the original reports of agency assessors at Yagoona who reported that ``(the owner of the home) has been requesting that staff numbers decrease, and that the specialty (part-time) positions such as education and infection control also be decreased''.
``The (owner) informed the team that casual staff were not to be employed. She stated that staff had to become permanently employed if they wished to remain at the service.''
The assessors said there were ``appropriately skilled and qualified staff sufficient to ensure that quality care was given'' but there was an ``unpleasant work environment'' and that documentation and interviews ``reveal an environment of harassment from the approved provider throughout the organisation''.
The internal documents report that roster savings at Yagoona since May last year include cuts in educators, nurses and cooks, and that the first staff member to phone in sick on each shift except night shift is not replaced. The savings are estimated at $72,291 a year.
Two calls to Milstern Health Care Pty Ltd by the Herald were not returned.
Staff Cut As Aged Home Profits Rose Sydney Morning Herald July 10, 2001
Jun 2001 Allegations about friends in the right places
But the criticism of Mr Lang's appointment accompanied revelations that a Sydney nursing home had escaped imposition of sanctions by the ACSAA, despite the highly controversial deaths of two patients.
The home is one of two such institutions operated by a firm owned by Mrs Millie Phillips, another friend of the Minister and Liberal Party contributor.
Staff and others had made repeated and long-standing complaints about substandard facilities and treatment regimes at both homes which had failed to pass accreditation tests by the end of last year.
However, ACSAA assessors are said to have told the staff of one of the homes that "the owner knows people, nothing will be done". Both homes were subsequently given generous reprieves of several months to achieve accreditation standard.
Aged care scandals erupt again The Guardian June 27, 2001
The Ritz Nursing Home
Dec 2000 Accreditation status threatened
The future of one of NSW's biggest nursing homes is in jeopardy after it was told it would fail accreditation unless it made major improvements in the next three weeks.
Residents and relatives will be told officially today or tomorrow that Mrs Millie Phillips, proprietor of Milstern Health Care Ltd, has been put on notice to improve the home by December 31 or fail accreditation.
While patient care at the privately run Ritz is considered acceptable, the home's physical environment was found unacceptable. This covers matters such as the provision of a safe and comfortable living environment, infection control, catering, cleaning and laundry services, and fire and security systems.
A ``site audit'' report was made in August, and the department has visited several times since. The Federal Department of Health and Aged Care is writing to inform residents and relatives, and to reassure them that contingency plans are being made.
Mrs Phillips could not be contacted. But a Milstern spokeswoman said ``both the department and the company are committed to maintaining the excellence of patient care. The department has been supportive, and our current discussions involve significant extensions.''
It is believed carpenters are working at The Ritz, which Milstern has owned since 1972.
Mrs Phillips met departmental representatives on Monday. ``It appears she is not going to throw in the towel,'' a department spokesman said.
``It is still open to her to convince the [Aged Care Standards and] Accreditation Agency that she can achieve the standards.''
Putting Heat On The Ritz, A Nursing Home In Peril Sydney Morning Herald December 6, 2000
Feb 2001 Half the staff lodge a complaint
More than 70 staff at a Sydney nursing home have written to the Federal Government's nursing home complaints body to express a lack of faith in their proprietor.
The unprecedented action by more than half the staff comes on top of a Federal audit of The Ritz Nursing Home in Leura that refers to an ``environment of harassment'', staff claims of verbal abuse by management, and a long history of underspending on the home.
Dilapidated furniture, grey sheets and small, cramped wards that ``compromise resident safety'', along with a long list of serious building problems, were detailed in a report by the Private Health Care Branch of the NSW Health Department late last year.
The lighting was poor, the floors unsafe, and the food servery was ``extremely dirty''. As well, there were not enough hand basins to ensure sound infection control.
Commonwealth documents revealed further problems ``which would have required a long period to develop or have existed for a long period''. Among them, according to the Aged Care Standards and Accreditation Agency, resident call bells were broken, there were not enough toilets or bathrooms, and food was served cold because of a lack of proper equipment.
Staff requests for essential items were ignored over a long period, the Commonwealth auditors reported in January. And major suppliers of food, bed linen and hardware had on occasions last year stopped deliveries to the Ritz because of unpaid accounts.
In granting the Ritz a reprieve, the Department of Health and Aged Care noted that residents were not in immediate or severe risk, and that nursing care was satisfactory. Mrs Phillips was undertaking ``significant work'' to address problems. It also cited the difficulties of relocating the residents, many of whom had behavioural problems.
Mrs Phillips has vowed to try again, saying her company will ``invest $2 million to build a new wing'', and that the issues will be rectified by early March.
However, Ritz staff who wrote to the Commonwealth's new Nursing Home Complaints Resolution Scheme in December are concerned that management style and systems will not change, even if the building is repaired.
As well, documents from Commonwealth audit inspections reveal the Ritz failed accreditation in December because of a long history of underspending on the home's residents and infrastructure. Officials doubted Mrs Phillips's plans to improve resident living standards ``could be relied upon'' to ensure accreditation ``within an acceptable time frame''.
Mr Ross Bushrod, the State manager of the Accreditation Agency, concluded in a report late last year that management was ``not actively working to provide a safe working environment''. He was concerned that ``after the currently planned remedies are implemented, other similar deficiencies will occur without proper management attention''. He cited, for example, the ``systemic failure to meet necessary repairs, maintenance, and standards'' in the kitchen until regulatory authorities demanded them.
As well, the report by the Victorian-based auditors cites staff complaints about ``an environment of harassment''. Some felt victimised if they drew attention to problems.
Mrs Phillips told the Herald she had instituted legal action against the aged care consultancy IBIS which had managed her nursing homes for two years. Her two other nursing homes had received three-year accreditation. On her style of management, she said: ``Many of my staff have been with me for more than 30 years. If an `environment of harassment' existed, why would these people remain in my employment?''
Putting Down The Ritz: Aged Home's Chorus Of Critics Sydney Morning Herald February 21, 2001
Jun 2001 Given a reprieve
The Ritz nursing home in Leura, which she has owned for 30 years, was one of two homes in NSW to have failed to pass new nursing home accreditation standards by the December 31 deadline. At the last minute, it was given a six-month reprieve along with 19 other homes nationwide, and yesterday was granted accreditation for a 20-month period.
Grieving son says nursing home let his mother down Sydney Morning Herald June 21, 2001
Jun 2001 Problems not localised to the Ritz
The Ritz, in Leura, which she has owned for 30 years, was one of only two homes in NSW to have failed to meet accreditation standards by the December 31 deadline. - - - The Commonwealth assessors described a situation similar to the story at Yagoona staff requests for essential items ignored over a long period, and longstanding problems. Bushrod, the agency's State manager, wrote in a report last year about The Ritz, that he was concerned that ``after the currently planned remedies are implemented, other similar deficiencies will occur''.
Handle With Care Sydney Morning Herald June 23, 2001
The Yagoona Nursing Home
Jun 2001 A reprieve for a chronic offender
THE Yagoona Nursing Home near Bankstown has been a problem home for many years. In May 1996 the Herald listed it among the 25 worst homes in the State, based on reports by Federal inspectors. It failed 14 of 31 minimum-care standards in the mid-'90s under the old system of inspections.
It was overcrowded, depressing; the main memory of this reporter, who visited the facility then, was the smell of urine. Later we learnt that a good nursing home does not smell of urine. Indeed the absence of odour is a simple test of a quality home.
But good nursing care keeps bed sores to a minimum, and infections should be caught early. According to documents from the State Health Department, this was the second incidence of severely infected bed sores at Yagoona it had investigated within 12 months.
But the accreditation, granted in November, was conditional on Phillips keeping her promises to fix several outstanding problems, including overcrowding and poor continence management. When the assessors returned in April, they found her promises had not been kept. - - - - - Staff complained they had to use folded pillow slips and old shirts between residents' legs on occasions because there were not enough quality pads. The showers went cold after 9am because the hot water system had been broken for two years, and staff complaints ignored. The buzzer system had been broken for a long time, too, and staff had to ``yell out'' if they required help with a resident.
The assessors recommended the most serious action: - - - - , they advised accreditation be revoked entirely. - - - - But this never happened. The State manager of the agency, Ross Bushrod, used his authority to give her (Phillips) in effect another 15 months to make good her promises.
Handle With Care Sydney Morning Herald June 23, 2001
Jun 2001 Political donations
A Sydney nursing home found to have critical standards was not closed down because the home's operator donated $13,900 to the Liberal Party, the opposition alleged in Federal Parliament yesterday.
Labor health spokeswoman Jenny Macklin said the home had failed four care standards and breached accreditation guidelines.
``Didn't your standards agency find that residents suffered temperatures of 48 degrees in summer, cold showers in winter, inadequate clinical care, high rates of falls and risk potential disaster in the event of a fire?'' she asked Aged Care Minister Bronwyn Bishop.
After an inspection in early April the Aged Care Standards Agency gave the home, operated by Milstern Health Care, a ``critical'' rating for its physical environment and its staffing. It gave it an ``unacceptable'' rating on standards covering health and personal care and resident lifestyle. One staff member told the inspectors that until recently ``old shirts'' were used between the legs of residents because of a shortage of continence aids.
An agency spokeswoman said the recommendation to remove accreditation was not followed because there was no serious risk to the care of residents and because improvements were being implemented.
The Labor allegation of favorable treatment for the home drew an angry response from the government.
Mrs Bishop rejected allegations that she had intervened in the case. ``I have no power under the legislation to intervene in any decision about accreditation,'' she said.
But she said Milstern Health Care donated $8000 to the Liberal Party in 1998-99 - ``at no stage did this donation affect the agency's decision about Yagoona Nursing Home''. Another $5900 was donated in 1995-96, says Labor.
Yagoona home owner Millie Phillips told ABC Radio she had always given money to the Liberals. ``It's just a question of how much and what my finances were,'' she said. Mrs Phillips said she had also given money to the Labor Party, which she accused of using her as a ``whipping post''.
The Yagoona home had never been threatened with closure, she said.
Labor Accuses Libs Over Donation The Age June 5, 2001
Jun 2001 Problem home given 3 years accreditation
Mrs Bishop denied pressuring the Government's Aged Care Standards and Accreditation Agency. The director of Milstern Health Care, which operates Yagoona Nursing Home, Millie Phillips, rejected the claim donations had been made to curry favour. The 150-bed home was granted three years' accreditation last November but the standards agency revisited the home in March and found a "critical" rating in two health care standards.
Speaker risks job to protect Minister. Courier Mail June 5, 2001
Jun 2001 Claims about friendship with the minister
Mr Smithers, a cancer patient, was moved out a day after being admitted because his daughter was concerned about his distress at the smell, stained plastic food plates and overcrowding.
Yagoona was raided twice at the weekend by nursing home officials to check whether it was complying with undertakings given after separate complaints.
On Sydney radio earlier yesterday, Mrs Bishop said she knew Mrs Millie Phillips, a principal of the owners of Yagoona, but she knew nothing about the accreditation issues concerning the home until they were reported last week.
Death Camp Survivor Fled Aged Home Sydney Morning Herald June 6, 2001
Jun 2001 Assessors overruled by the agency
Mrs Eileen Thomas spent less than three months in the Yagoona Nursing Home before she died from blood poisoning caused by an infected bed sore.
Mrs Thomas, 81, was the second Yagoona resident in 12 months to have died from seriously neglected bed sores, Senator Chris Evans, the Opposition spokesman on aged care, told Parliament yesterday.
It (NSW Health Department) found the same staff implicated. Three nurses are under investigation by the NSW Health Care Complaints Commission.
But Mr Thomas wants Yagoona's owner to take responsibility. "The people running it should be out of there," he said, "and someone put in who cares."
The Yagoona nursing home was given an extra 15 months to improve standards, despite a damning report in April by assessors from the Aged Care Standards Agency. The assessors recommended Yagoona's accreditation be revoked - which would stop the flow of millions of dollars in Federal subsidies - but the agency's State manager, Mr Ross Bushrod, did not accept the recommendation.
The assessors found Mrs Phillips had failed to keep earlier assurances to improve Yagoona's standards. For two years, she had ignored staff complaints about a broken water heater; staff had used pillowslips because of an inadequate supply of continence aids; call bells were broken; and there were a "large number of skin tears on residents".
Mr Thomas was unenthusiastic about Yagoona from the start. He said the smell of urine wafted into the car park, but he was under pressure to move his mother from Westmead Hospital, where she had been treated for injuries suffered in a fall. "It came down to two homes with vacancies," he said.
But according to a letter to Mrs Phillips from NSW Health, nursing staff failed to recognise Mrs Thomas's deteriorating condition, heralded by increased temperature and falling blood pressure. They failed to notify her doctor or her son until after she was admitted to hospital.
Mrs Phillips could not be contacted yesterday.
Grieving son says nursing home let his mother down Sydney Morning Herald June 21, 2001
Jun 2001 The allegations about ministerial interference
The latest furore was triggered by the failure of the agency to close the Yagoona Nursing Home, in southwestern Sydney, despite the death of Eileen Thomas from infected pressure sores and warnings about conditions at the home up to 12 months before the death.
Mrs Bishop has rejected allegations that Yagoona's owner, Millie Phillips, had received special treatment because she was a Liberal Party donor. She has also defended the reappointment of her former campaign manager, John Lang, to the board of the agency.
Crisis puts PM under pressure to sack Bishop. Australian June 22, 2001
Brief update Nov 2008
An October 2008 report refers to more allegations of bizarre behaviour - the sort of insensitive behaviour one would not expect from someone working to serve frail and elderly persons and their families in the emotionally wrenching end of life period - especially when there were allegations of a serious medication error in someone still well enough and with sufficient life prospects to justify surgery. This was the Yagoona Nursing Home again. The inquest has been adjourned to April 2009.
Oct 2008 Patient dies after large insulin injection
DONALD FAIRBAIRN was only planning to stay at Yagoona Nursing Home for as long as it took to recuperate from one operation and prepare for the next, before returning to live with his daughter.
As it happened, the diabetic 81-year-old was there less than three days before he died after receiving a lethal dose of insulin. (The newspaper later admitted this should not have been printed as the cononer had yet to determine the cause of death,)
In September 2006, Mr Fairbairn was admitted to the nursing home from Bankstown Hospital, where he was meant to receive eight units of insulin in the morning and six units at night, a court heard yesterday.
But two days later a nurse allegedly administered 10 times his correct dose of insulin after incorrectly reading a medication chart written up by the patient's general practitioner. That chart has become the subject of an inquest into Mr Fairbairn's death.
Glebe Coroner's Court was crowded with barristers angling to deflect blame from their clients - and implicitly on to others - yesterday.
Nurse gave lethal dose of insulin, court hears The Sydney Morning Herald October 21 2008
Oct 2008 Bizarre behavior
THE owner of a nursing home that is the subject of an inquest into the death of one of its residents threatened one of the witnesses due to give evidence, the inquest heard yesterday.
Donald Fairbairn died on September 23, 2006, aged 81, a day after a nurse at the home injected him with 10 times his prescribed dose of insulin. The coroner is determining his cause of death.
" When Ms Fairbairn told her that she was the daughter of the deceased, [Mrs Phillips] is alleged to have said: 'This is your fault we're having this inquest. He was old and going to die. You've got pro-bono lawyers. You're not going to get any money - he was worth nothing. He was old and sick anyway.' "
After the inquest, Mrs Phillips allegedly physically barred Ms Fairbairn from leaving the court and told her that she was not welcome back at Yagoona Nursing Home, where she has a casual job singing to residents. She was told that she would be escorted from the premises if she came back.
Mr MacPherson said that if true it was a serious matter and made orders preventing Mrs Phillips from attending the remainder of the proceedings.
Witness abused, court told Sydney Morning Herald October 24, 2008 http://www.smh.com.au/news/national/witness-abused-court-told/2008/10/23/1224351449277.html
Update July 2010
I could not find any further reports about Ms Phillip's alleged altercation with Ms Fairbairn or her attendance at the court. One wonders how likely it is that Ms Fairbairn would have made this up.
The coroner's findings have not been reported in the press but I have been able to track the Coroner's report. This is short and gives only the findings.
I find that Donald Ian Fairbairn died on 23 September 2006 at Bankstown Hospital in the State of New South Wales as a result of severe hypoxia due to bilateral pneumonia and severe ischaemic heart disease.
There seem to have been serious medication problems in this case. The Coroner recommended that Yagoona Nursing Home implement procedures to prevent mishaps and report back in 6 months.
(a) All detected incidents must immediately be brought to the attention of the Director of Nursing, the Deputy Director of Nursing or the Registered Nurse in charge. The Director of Nursing, the Deputy Director of Nursing or the Registered Nurse in charge is then to notify the pharmacist, or the treating doctor, or an after hours doctor or is to call an ambulance, whichever is the appropriate course of action.
(b) That the staff record the medication administered to residents in the period between the admission of a resident, and the drawing up of a medication charge by a doctor, in the Progress Notes for each patient each time the medication, referred to in the Discharge Summary, is administered.
(c) That Yagoona Nursing Home report to the Coroner within six months of these recommendations outlining the changes implemented as a result of this Inquest into the death of Donald Ian Fairbairn.
NEW SOUTH WALES STATE CORONER’S COURT Ref No: 1488/06
The information released does not indicate what the medication errors were that gave rise to these requirements. We do not know if this was because a 10X dose of insulin was given or not. We do not know what the medical evidence was.
Whether a 10 times dose of insulin would have been lethal might be debated. Immediate treatment with sugar should have been given and would have been life saving but we do not know if this was given.
Pneumonia is a common finding at postmortem in terminally ill patients. There are no postmortem findings after an overdose of insulin. The pneumonia may have been present before an overdose of insulin was given, but prolonged coma from an overdose of insulin might well be complicated by pneumonia.
For Updates:- A good way to check for recent developments in aged care is to go to the aged care crisis group's search page and enter the name of the company, nursing home or key words relating to any other matter in the search box. Most significant press reports are flagged there. The aged care crisis web site has recently been restructured and some of the older links used from this site may not work.
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