Jonval Builders Pty Ltd v Commissioner for Fair Trading [2020] NSWCA 233
Hearing dates:
10 August 2020
Decision date:
25 September 2020
Before:
Bathurst CJ at [1]; Meagher JA at [2]; Leeming JA at [3].
Decision:
1. Appeal dismissed, with costs.
2. Notice of motion filed 17 July 2020 dismissed, with costs.
3. Pursuant to the slip rule in UCPR r 36.17, vary order 3 made on 17 March 2020 by replacing “second and third” by “first and second”.
Catchwords:
CONSUMER LAW - enforcement and remedies - compensation orders - proceedings brought by Commissioner on behalf of consumers - consumers purchased moveable dwellings and entered into occupation agreements with respondents - appellants represented that terms of agreements preventing permanent residence would not be enforced - permanent residence precluded by development consent - no challenge to findings of misleading or deceptive conduct and unconscionable conduct by corporate appellants - whether primary judge erred in making orders requiring payment of purchase price 85% of cost of improvements plus interest on terms that consumers reconvey title to moveable homes - whether need to quantify loss or damage before power to make orders under s 72 of Fair Trading Act or s 237 of Australian Consumer Law available - consideration of distinction between such orders and damages - consideration of relationship between such orders and orders for rescission in equity for fraudulent representation - whether primary judge erred in finding unconscionable conduct by director of corporate appellants - appeal dismissed
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Builders Pty Ltd v Commissioner for Fair Trading [2020] NSWCA 233
Case
[2020] NSWCA 233
Decision Date
CaseChat Overview and Summary
Jonval Builders Pty Ltd and others appealed to the Court of Appeal of New South Wales against orders made by the primary judge. The proceedings were brought by the Commissioner for Fair Trading on behalf of consumers who had purchased moveable dwellings and entered into occupation agreements with the appellants. The core of the dispute concerned representations made by the appellants that terms within the occupation agreements, which precluded permanent residence, would not be enforced, despite development consent prohibiting such permanent occupation. The appellants did not challenge the primary judge's findings of misleading or deceptive conduct and unconscionable conduct by the corporate appellants.
The Court of Appeal was required to determine whether the primary judge erred in making orders that required the appellants to pay the consumers 85% of the purchase price of the moveable homes, plus interest, on the condition that the consumers reconvey title to the homes. A key legal issue was whether it was necessary to quantify loss or damage before exercising the power to make such orders under section 72 of the *Fair Trading Act 1987* (NSW) or section 237 of the *Australian Consumer Law*. The court also considered the distinction between these statutory orders and claims for damages, as well as their relationship to equitable rescission for fraudulent misrepresentation. Furthermore, the court had to consider whether the primary judge erred in finding unconscionable conduct on the part of the director of the corporate appellants.
The Court of Appeal dismissed the appeal, finding that the primary judge had not erred. The court reasoned that the powers under section 72 of the *Fair Trading Act* and section 237 of the *Australian Consumer Law* were not limited to making orders that compensated for quantifiable loss or damage. Instead, these provisions allowed for orders that could achieve a just outcome by restoring parties to their pre-contractual positions, akin to rescission. The court held that the primary judge was entitled to make the orders requiring repayment of the purchase price and interest upon reconveyance of title, as this was a just and equitable outcome given the misleading and unconscionable conduct found. The court also upheld the finding of unconscionable conduct against the director.
Consequently, the appeal was dismissed with costs. A notice of motion filed by the appellants was also dismissed with costs. The court also made a minor variation to a previous order pursuant to the slip rule to correct the identification of parties.
Orders
Orders of the court
1. Appeal dismissed, with costs.
2. Notice of motion filed 17 July 2020 dismissed, with costs.
3. Pursuant to the slip rule in UCPR r 36.17, vary order 3 made on 17 March 2020 by replacing “second and third” by “first and second”.