Lendlease puts 100-year-old WWII survivor through the retirement village wringer

by | Jul 7, 2020 | Markets

The multi-billion-dollar company relied on a technicality to refuse to refund 100-year-old Egon Pedersen his $270,000 bond, making a mockery of its “pillars” of integrity, openness and trust. It wasn’t until Michael West Media got involved that the company changed its tune. Dr Sarah Russell reports.

Photo of Egon Pederson

Egon Pedersen

A captain in the Allied merchant navy during World War II, 100-year-old Egon Pedersen, has been fighting the multi-billion-dollar company Lendlease for more than six months for the legal return of his refundable accommodation deposit (RAD). Lendlease, the largest owner of retirement villages in Australia and a company that earned $92 billion between 2014 and 2019, has been relying on technicalities to try to hang on to Egon’s deposit of $270,000.

The David and Goliath battle began eight months ago, soon after Egon suffered a stroke. The aged care assessment team recommended Egon vacate his apartment in Lendlease’s Goodwin Close Retirement Village and move into an aged care home. He needed to pay the aged care home’s accommodation deposit and took out a loan because he expected Lendlease to refund his deposit within the legislated 14 days. He certainly didn’t expect to have to hire a lawyer to fight his corner when the company refused to return his money.

Get a lawyer

When I heard about Egon’s situation, I phoned the Aged Care Quality and Safety Commission and Older Person’s Advocacy Network. Neither could help. I was told to: “get a lawyer who specialises in contract law”. Instead, I contacted Michael West.

Last Friday morning, Michael put some questions to Lendlease.

  • Could you please describe Lendlease’s position?
  • Is the company relying on a claim that it is in financial hardship and therefore cannot refund the RAD?
  • Has Lendlease lost the plot?

By Friday afternoon, Michael had received a reply from Lendlease:

“Thank you for bringing this to our attention. Unfortunately, senior management was not aware of this issue either through escalation from the business or through our customer complaints portal. We are making contact with Mr Pedersen and his family to sincerely apologise and to take action to address the issue. We’ll also be reviewing our escalation and customer complaints processes to avoid a similar issue happening again.”

Soon afterwards, Egon’s son received a phone call from the managing director of Lendlease retirement living. He was very apologetic and said he would direct his staff to refund the full amount to my Dad immediately. Four day’s later, Egon is still waiting for the money to be returned.

Photo of Egon Pedersen

Egon and Millie Pedersen

Egon Pedersen

Aged care legislation updated

In 2011 Egon moved into the Lendlease retirement village in Goodwin Close. He signed a contract as a non-owner resident and paid an ingoing contribution. This contract included a clause stating that Lendlease would return the accommodation deposit within two years of him vacating the apartment. However, the legislation changed in 2017, mandating the return of the deposit within 14 days for those moving into an aged care home. This change was intended to help fund accommodation costs in aged care.

Egon took out a loan because, like many others, he was unaware he could wait six months before paying the aged care home’s accommodation deposit. Egon anticipated it would only be a short-term loan and that his $270,000 would be returned in accordance with the Retirement Villages Regulations (2017).

The only reason for a company not to return the RAD in a timely manner is if the company is in financial hardship. It is unlikely that a company that earned $92 billion over the six years from 2014 to 2019 could claim financial hardship.

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Contract stands, Egon told

Egon’s lawyer told Lendlease that Egon required the RAD to be returned so he could meet his ongoing care needs in the aged care home. A lawyer representing Lendlease replied that Egon’s RAD would be returned within two years of the date he vacated the retirement village, as per the original 2011 contract. As Egon’s son explained: “Dad might be dead by then.”

Lendlease used a technicality to hang on to Egon’s RAD. It was “their view” that the Regulation 7 Retirement Villages (Contractual Arrangements) Regulations 2017 (Victoria) did not apply because Egon had paid the aged care home’s RAD in full (because he wasn’t made aware he had any other option).

According to Lendlease’s lawyer: “You will see that the regulation contemplates that payment would be made directly to the aged care provider, and (in our view) it is not intended to operate as reimbursement of the RAD already paid.”

Photo of Egon Pedersen in the centre on Christmas Island with fellow officers

Egon Pedersen in the centre on Christmas Island with fellow officers

Unconscionable treatment

Lendlease’s unconscionable treatment of a 100-year-old man makes a mockery of its stated core values (“pillars”) are integrity, openness and trust. Coupled with the aggressive and arguably illegal tax position taken by Lendlease in its Retirement Village business, the fact that Lendlease has paid almost no income tax in Australia for a decade and the fact that Lendlease is claiming JobKeeper (relying on an aggressive and legalistic view of entitlements to the JobKeeper scheme), on what basis can LendLease claim to be an ethical company?

The Royal Commission into aged care quality and safety has focussed on substandard care and neglect of older people in aged care homes. It needs to give more attention to aged care providers who financially abuse old er people.

Lendlease and Blue Care join throng of large corporations cheating JobKeeper


Editor’s Note: Lendlease acted quickly and in good faith when questioned about the Egon Pederson matter on Friday, apologising and pledging to pay its client back. Whether this is a mistake or a sign of problems with the corporate culture is the question. Very large institutions are vulnerable to aggressive behaviour and behavioural failures due to their incentive pay structures (KPIs etc). These things simply happen, they are common in corporate culture.

Yet, this is a company which pays zero income tax in Australia, for many years, while executive pay has been vibrant. Further – and and demonstrated here in the link below – it has been engaged in arguably illegal tax avoidance activity and, most recently, has been rorting the JobKeeper subsidy despite its main company profits falling by far less than the required threshold to claim.

Ultimately, Lendlease directors are responsible for the company. They are Michael Ullmer Steve McCann Jane Hemstritch Colin Carter Nicola Wakefield-Evans David Craig Phil Coffey Elizabeth Proust, Baroness Ford Robert Welanetz.

Tender Truncheons: Lendlease concedes Tax Office closes net on retirement village racket

ABOUT THE AUTHOR

Dr Sarah Russell

Dr Sarah Russell

Dr Sarah Russell is a public health researcher who specialises in qualitative research. She has been the Principal Researcher at Research Matters since 1999. She is also the Director, Aged Care Matters. She believes the aged care system requires greater scrutiny, accountability and transparency.

12 Comments

  1. Avatar

    I just received the following email from Egon’s son: “Good news Lend lease have honoured their promise and fast tracked payment, it is in Dad’s account now and he feels secure. He said to thank you and Michael for your incredible assistance.
    Thanks for all your help.”

    • Avatar

      Well done Sarah and Westy! This is what public interest journalism is all about. Tweeting your comment out now!

    • Avatar

      And let us all look forward to hearing of his next birthday celebrations.

  2. Avatar

    You article failed to make it clear that only refers to Victoria . One should not make generic complaints implying the same applies in QLD,NSW,SA and WA

    • Avatar

      I apologise for this oversight. My expertise is aged care (residential and in-home care) not retirement villages. The Federal government is responsible for residential and in-home care. You are correct, the Victorian state government is responsible for retirement villages. Are there different laws in QLD,NSW,SA and WA regarding return of fees?

  3. Avatar

    nice to know a company that ‘earned’ $92B and yet pays almost zero income tax in Australia can be so caring and considerate

    WHEN their mistake is poked up their nose by a corporate watchdog !

    Well done Sarah and well done Michael ! Totally worth what I pay to subscribe to yers !

  4. Avatar

    It is obvious that Lendlease cannot refund the RAD. What they have to refund is Pederson’s license fee less exit fee. It does not help to confuse terminology.

    • Avatar

      I apologise if I used the wrong terminology.
      My expertise is aged care (residential and in-home care) not retirement villages.
      To ensure I wrote this account accurately, I relied on Egon’s lawyer’s letter and Lendlease’s lawyer’s reply. Egon’s lawyer final sentence: “In the circumstances, you are directed and called upon to make payment of the Refundable Accommodation Deposit by no later than close of business on 11th May 2020”.

  5. Avatar

    Accordingly each Lendlease corporate director is in breach of their director duties and responsibilities, that by its very imperative must become a matter of investigation by both the ASX and to ASIC. Lendlease being both a corporation and an ASX listed business entity.
    This is the type of business activity that frequently goes along unchecked by Australia’s Regulatory Authorities.

    The negligence of the Lendlease Board as to their false claim relating to applying for emergency government funding (Job seeker payments) to which they have no genuine entitlement thereto.
    The people of Australia regret that this feckless Liberal/National coalition government under the leadership of Scott Morrison, allows big business entities to escape Australia’s Federal government leadership via a liberal party donation of some kind has a major factor that will echo loudly come the next Federal election.

  6. Avatar

    The word ‘disgusting’ doesn’t cut the mustard. This type of behaviour should be prosecuted to the limit & if theres’s no current legislation permitting such prosecutions, then change the law.

    • Avatar

      Thanks for this comment. I will ensure that Egon’s son makes Consumer Affairs and his local MP aware of this incident.

  7. Avatar

    Many years ago I signed a lend lease agreement over a then very expensive laser printer. I asked all the right question, especially about final ownership, each question was answered by pointing to a paragraph in the lease. Things did not work out as promised and they demanded the machine at the end of the lease. I reread the lease, and noticed for the first time that it had no logical flow. Cutting out each paragraph I rearranged the document until it assumed its original logical order. It did not read the same at all, nearly every question I raised before signing, in this its original order, was conditional, not actually part of the contract at all, but something the company might do if they wished otherwise as the preceding paragraph stated the item remained the property of Lend Lease.

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