‘Clandestine’ behaviour alleged in McLaren Vale Hospital’s closure

The closure of McLaren Vale and Districts War Memorial Hospital and the future of its land has triggered sensational allegations.

Court action to stop the controversial transfer of McLaren Vale and Districts War Memorial Hospital land to an aged care group alleges “clandestine” behaviour, vote stacking, tax hurdles and multiple breaches of the hospital’s constitution.

The community hospital closed on June 30 after a board decision, citing more than $3m in annual costs far outstripping the $700,000 or so income from private patients.

The state government had provided regular grants but these ceased when the board advised the government of the impending closure.

A vote on Tuesday night saw 86 per cent of the hospital’s association members in favour of transfer of the property to the James Brown Memorial Trust with an expectation it would be used by neighbouring not-for-profit aged care group Kalyra and the site expanded into a larger aged care precinct.

Sources claim more than 600 votes were proxies, after a surge in membership since a meeting on May 5 rejected a similar plan.

Southern Districts War Memorial Hospital at McLaren Vale.

However, Adelaide City Councillor and lawyer Henry Davis on Tuesday lodged a civil claim in the Adelaide Magistrates Court challenging the move and claiming the association “breached numerous” terms of its constitution as well as requirements of the Income Tax Assessment Act.

It notes the trust is not a valid beneficiary of the hospital’s assets as the trust does not intend to run it as a hospital.

“The Respondent must transfer the fund to an entity with similar objects,” the court papers note. “The proposed transfer to James Brown Memorial Trust is in breach of the Respondents’ Constitution.”

Adelaide City Council councillor Henry Davis.

Mr Davis’ papers allege 10 breaches of the hospital association’s constitution including that:

“The Respondent and/or the James Brown Trust has attempted to procure votes to support the resolution to dispose of the land by clandestine means”;

“The Respondent caused a proxy form to be distributed which misrepresented the motion to be put at the Special General Meeting, describing the motion as a ‘merger’ rather than a ‘transfer for nil consideration’”; and

“Ceasing to run a hospital without the consent of its members.”

The papers go on to claim the association “has permitted the James Brown Memorial Trust to systematically enrol staff and clients of the ... Trust with a view to controlling the outcome of the resolution to transfer the land to the ... Trust.”

The papers seek orders declaring Tuesday’s meeting “void and invalid” and any distribution of the hospital’s land be to “an eligible beneficiary of the Respondent with similar purposes”.

Comment was sought from Mr Davis and the hospital.