THE NSW Supreme Court has awarded $8.15 million in excess funds from the liquidation of the Maitland Benevolent Society, which owned and operated Benhome aged-care home, to the facility's new owners.
Justice Kelly Rees was asked to determine how to distribute the funds after the Royal Freemasons' Benevolent Institution (RFBI), which purchased Benhome for $33.223 million in May last year, and the United Protestant Association of NSW both applied for the money.
Due to the way the constitution of the Maitland Benevolent Society was framed, liquidator Jeff Shute, of Shaw Gidley Insolvency Reconstruction, was forced to apply to the court for direction.
The Maitland Benevolent Society was under financial strain when a report in September, 2018, by the Australian Aged Care Quality Agency, "identified that there was an immediate and severe risk to the health, safety and wellbeing of residents at Benhome".
So dire were staff levels at the Regent Street aged-care facility, that residents were being dried with hand towels because too many hours had been cut from laundry staff rosters.
An independent adviser was appointed to oversee the facility after it failed 14 of 44 accreditation standards.
A few months later, the Benevolent Society's board voted to sell the home to "a larger, well-resourced professional provider".
The society was eventually placed in liquidation in September last year.
The court heard that RFBI increased its bid for Benhome because it was led to believe excess funds from the liquidation would go to the successful bidder.
Chief executive of RFBI Frank Price told the court the money would be put towards converting existing vacant offices at Pender House to 10 assisted-living units, rebuilding Curtis Wing for up to $4.5 million or refurbishing the dementia wing for up to $4.2 million.
United Protestant Association general manager Stephen Walkerden said his organisation was investigating selling an existing retirement village in Maitland and building a new facility, creating a $2 million community garden for the elderly or establishing a long-day care program for $1 million to assist people to stay in their homes.
Justice Rees ruled the $8.15 million should go to the owners of Benhome.
"I think there is something to be said for fixing and improving an existing aged-care facility so that its residents are well cared for in favour of embarking upon the provision of new services...particularly where it will mean that the existing facility may not be improved to the extent that it otherwise could be," she said.
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