Jonval Builders Pty Ltd v Commissioner for Fair Trading

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.