FIGHT OF HIS LIFE -Allan Lorraine-

Enclosed is an inspiring article which illustrates the effects of never giving up and the benefits of paying attention to detail.

FIGHT OF HIS LIFE  

-Allan Lorraine-

In October 2009, Allan Lorraine CPA secured a place for himself and his wife at Mentone Gardens, a Supported Residential Service (SRS) in Melbourne. At the time, he was purely focused on his wife’s wellbeing. “I wasn’t bad enough to go in myself, but my wife was and I didn’t want her in there alone. I knew what could happen in those places to vulnerable people.”

Pleased his wife Rose was settling in well to their new accommodation, Lorraine wasn’t at all expecting the exploitation of Mentone Gardens residents he was soon to uncover.

In June 2013, the management of Mentone Gardens called a meeting, summoning residents and relatives. The 50 or so unsuspecting people who filled the residents’ lounge were addressed by a voluntary administrator who announced the company was going into liquidation.

“I put up my hand and asked about the bonds,” recalls Lorraine. “The administrator replied that he would not take questions publicly. Almost immediately I realised it was all over, that we weren’t going to get our money back.”

The A$11.5 million gap

He was right. When Mentone Gardens, operated by Parklane Assets, was placed into liquidation in September 2013, residents discovered their deposits and bonds had not been held in a trust, as they had been assured. They had lost all their money.

In total, Parklane owed residents A$4.5 million. They owed A$400,000 just to Allan and Rose Lorraine, who had sold their house to help fund their deposit.

This is how a then 90-year-old Lorraine, his professional investigation days 30 years in the past, found himself spearheading arguably the most important investigation of his life — not just for his own sake, but for the many residents incapable of taking action. Three of the 39 residents of Mentone Gardens were aged over 100, many were in their 90s and dementia was common.

This battle would be waged in the murky waters of aged-care regulation. No single agency has overall responsibility for the aged-care sector, and the law during this time was not straightforward. It was only in 2012 that a new SRS Act came in that required residents’ fund account. Just who was accountable was unclear.

Well trained in record keeping, Lorraine estimates he dedicated about 2000 hours to the case. He contacted the Australian Securities and Investments Commission (ASIC), the Victoria Police Fraud Squad and local, state and federal politicians; he organised petitions to parliament; he spoke to the liquidator; and held hundreds of corn all the residents about the “bond scandal”.

Based on his own research, Lorraine believed the department had breached its duty of care and that the best approach was to request the state government to pay the A$4.5 million to the residents as an ex gratia (goodwill) payment in order to avoid facing a class action.

He received no response from the minister or premier. Three top law firms refused to take on the case, as they predicted a loss.

Then late in 2014, fortunes turned. A letter from Lorraine to the Victorian ombudsman, Deborah Glass, had raised sufficient alarm for her to launch a formal investigation.

Glass’s investigation into the Health Department’s files on Mentone Gardens exposed “a litany of failings”. Her 2015 report noted that Parklane had not provided proper financial records for the entire 25-year history of the company The department received numerous complaints over many years relating to administration of medication, record keeping, quality of care, privacy and delays in the repayment of bonds. Mentone Gardens was prosecuted twice by the department itself — in 19 — for breaches of regulatory standards. Despite this, the renewed registration nine times from 1998. The department 2- identify the insolvent state of the company for nearly three years.

Victory

When the ombudsman released her report: Investigation into the Department of Health Oversight of Mentone Gardens, a Supported Residential Service in April 2015, she recommended, as Lorraine had, that the state government make ex gratia payments to the people (or their estates) who had lost bonds, deposits or unspent fees paid in advance.

On the evening Glass announced her recommendations, Lorraine received a phone call at his home from the new minister for aging, Martin Foley, telling him the former residents of Mentone Gardens would receive A$4.33 million in payments. “I felt gratified and thanked the minister,” Lorraine recalls. Others describe the victory with less restraint. Daughter Margaret recalls being “ecstatic”. Bob was “elated” and Higgins was “over the moon”.

In late 2015, the money was paid and, on 21 October 2016, Allan Lorraine was honoured by the government with an Order of Australia medal for his service to the community, particularly to aged care.

Reference: CPA Australia magazine February 2017