Jonval Builders Pty Ltd v Commissioner for Fair Trading

1. [1]

   BATHURST CJ: I agree with the orders proposed by Leeming JA and with his Honour’s reasons.

2. [2]

   MEAGHER JA: I agree with Leeming JA.

3. [3]

   LEEMING JA: The Commissioner for Fair Trading brought proceedings seeking declaratory and injunctive relief and, importantly, “other orders” under the former s 72 of the Fair Trading Act 1987 (NSW) and s 237 of the Australian Consumer Law for the compensation of 11 named consumers. The conduct occurred during the period 2009-2012, leading to the need to rely upon both statutes. The Commissioner joined three defendants: Jonval Builders Pty Ltd, Hacienda Caravan Park Pty Ltd and Mr John Allan Willmott. Mr Willmott was a director and 50% owner (with other members of his family) of Jonval and Hacienda. The consumers had all purchased from Jonval a (so-called) moveable dwelling, which for the last fifteen years, and for the entirety of the time it has been owned by them, has been attached to Hacienda’s land. The Commissioner alleged that they had done so because of misleading or deceptive or unconscionable conduct by the defendants. Following an 8 day trial in 2018, the primary judge delivered some 560 paragraphs of reasons in late 2019: Commissioner for Fair Trading v Jonval Builders Pty Ltd [2019] NSWSC 1893, and declaratory and compensatory orders were made on 17 March 2020.

4. [4]

   The appeal is as of right, because the compensation orders made at first instance require payments of in excess of $2 million. Although there were nine grounds of appeal, two (grounds 3 and 5) were not pressed, one (ground 9) was conceded, and some grounds that were pressed were scarcely elaborated in oral submissions. Further, there was no challenge to most of the findings of primary fact. Both senior counsel who appeared in this Court (Mr Stewart for the appellants, Mr Kennett for the Commissioner, neither of whom had appeared at trial) were commendably succinct. For those reasons, although the primary judge delivered a very substantial judgment, an abbreviated summary of the background will suffice for the purposes of this appeal.

Background

1. [5]

   Each consumer purchased from Jonval, either individually or with their spouse, a “moveable dwelling” which was known as a “Marina Villa” in the Tweed River Hacienda Holiday Park operated by Hacienda. Each dwelling had been installed at the caravan park in 2005 or 2006, placed on footings and connected to various services. It seems that none has ever subsequently been moved. Each appears to have provided 2 bedroom accommodation.

2. [6]

   Each consumer entered into two contracts: a sale agreement with Jonval and an occupation agreement with Hacienda. The purchase prices of the moveable dwellings, being villas 2, 5, 6, 7, 8, 9, and 10, were in the order of $200,000. The occupation fees were modest, seemingly in the order of $175 per week (they have risen to around $230-$250 per week). The evidence concerning the occupation agreements was incomplete, but they appeared for the most part to be for a term of 2 years and were thereafter rolled over. They contained important terms limiting the occupation on those sites. In particular, the occupant was not permitted to live on site for any continuous period greater than 28 days without Hacienda’s prior permission, and in no circumstances for more than 180 days each year. Those conditions corresponded with a condition of the local Council’s development consent that the sites not be used for permanent accommodation.

3. [7]

   The essence of the contravening conduct alleged by the Commissioner and found by the primary judge was that the consumers were told that the contractual terms and planning conditions would not be enforced. Most of the consumers gave evidence that they intended to live in the dwellings permanently, and would not have bought if they had known of the planning restrictions. Exceptionally, one had chosen to live in South Australia in order to be closer to her family, but returned to the villa at various intervals. She gave evidence that she would never have bought the Marina Villa if she had known she could not live there continuously for periods exceeding 28 days. There was no challenge to those findings.

4. [8]

   The consumers purchased the moveable dwellings between around 2009 and 2012. The primary judge found at [539] that each consumer had suffered stress and anxiety “after they learnt of the precarious situation of their occupation”. There was no challenge to that finding.

5. [9]

   The consumers’ complaints led to the Commissioner bringing proceedings on their behalf commenced in 2015. Why the proceedings took so long to go to trial does not appear from the appeal books. It appears that, save in the case of the consumer who now lives predominantly in South Australia, the consumers have continued to reside in the villas since their purchases, paying the agreed occupation fee to Hacienda.

6. [10]

   The primary judge ordered that the appellants were jointly and severally liable to pay compensation and pre-judgment interest to the consumers, in amounts ranging from $224,380.63 to $387,883.62. Each consumer had provided a written undertaking to the Court that upon payment of those amounts they would transfer ownership of their villa to Jonval. The amounts were calculated as the sum of (a) the purchase price, (b) 85% of the cost of renovations and improvements undertaken by the consumers and (c) pre-judgment interest at court rates. (In two cases, there was also a component for a small amount of loan repayments, but no separate submissions were directed to that, and I shall omit reference to it in what follows.) Contrary to the Commissioner’s case at trial, the amounts did not include the occupation fees which the consumers had paid over the previous decade, nor in the case of one consumer did it include any amount for psychological injury which the primary judge found had been sustained.

7. [11]

   The grounds of appeal divide into two groups. The first group of grounds focusses on the remedies. It was said that, accepting the findings of statutory contraventions, the primary judge had erred in making orders under s 72 of the Fair Trading Act and s 237 of the ACL. The second group of grounds challenged the findings of unconscionable conduct by Mr Willmott. It is convenient to follow the order adopted in the notice of appeal and in the parties’ submissions, and address the grounds dealing with remedies first. They constitute the main point on appeal.

Grounds 1, 2 and 4 – “Other” orders

1. [12]

   Section 72 of the Fair Trading Act has been repealed, but continues to apply to conduct occurring prior to 1 January 2011 – see Sch 5, cl 16(1)(a). Section 72(1) provides:

2. [13]

   Section 237 of the ACL relevantly provides:

3. [14]

   For concision, and consistently with the way the appellants advanced their submissions, it suffices to refer to the paragraphs and subparagraphs of s 237, noting that a substantially identical analysis applies to s 72.

4. [15]

   The appellants submitted that there was no evidence of the value of the Marina Villas at the time of the purchase, or at the present time, so that there was no evidence of any loss suffered by the consumers. There was also, it was submitted, no evidence of alternative retirement dwellings available to the consumers, nor any evidence of the value to the consumers of the improvements they chose to make to their villas, or the extent of depreciation of the villas over the period of the consumers’ occupation, or the cost of moving the villas to other locations. The appellants submitted that the consumers also enjoyed, at least in theory, the rights to (a) sell the moveable dwellings to another owner, or to the park operator, or to Jonval, or (b) relocate the villas elsewhere, either within or outside the caravan park. The consequence of all of those matters was that there was no evidence of any loss by any of the consumers, and that this was fatal to the power to make orders under s 237 (or s 72).

5. [16]

   The appellants’ fundamental submission proceeded on the basis that preconditions to the making of orders under s 237 (or s 72) were findings of identified loss or damage (or likely loss or damage) and the quantification of such loss or damage. They identified a textual basis for this submission in the reference to “the” loss or damage in s 237(2) and the concluding words of s 72(1); their point was that the orders available to the Court were confined to those which “will compensate [the consumer] in whole or in part for the loss or damage” or will “prevent or reduce the loss or damage”. The appellants also relied on what had been said in Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494; [1998] HCA 69 at [43]-[55], where relief under the similarly worded s 87 of the Trade Practices Act 1974 (Cth) was refused to borrowers who had been misled into entering loan facilities which were less advantageous than they had been told. The joint judgment concluded this aspect of the analysis thus:

6. [17]

   The dependence of these submissions on loss which was quantified, in addition to being identifed, was made clear in oral submissions:

7. [18]

   There was, with respect, a deal of confusion in the cases presented at trial, especially that advanced by the Commissioner, some of which contributed to the issues raised on appeal.

8. [19]

   First, the Commissioner was suing on behalf of the consumers pursuant to s 237 (and Fair Trading Act, s 72(4)). It necessarily followed that she was not suing for damages pursuant to s 236. Instead, she was seeking “other” orders which she might persuade the court to consider would compensate the consumers, or prevent or reduce their loss or damage.

9. [20]

   Secondly, those orders could not include damages for the depression suffered by one consumer. The conduct relating to that consumer took place in October 2010, and was therefore governed by the Fair Trading Act. Section 72(1A) of that statute excluded personal injury. The Commissioner’s submissions appear not to have addressed the limitation in s 72(1A). The primary judge would have erred had his Honour accepted this submission.

10. [21]

    Thirdly and more importantly, because it gave rise to a substantial issue on appeal, the Commissioner advanced at trial an elaborate submission based on damages for a “no transaction” case.

11. [22]

    The Commissioner’s closing submissions at trial attached a document styled “Plaintiff’s Quantification of Damages”. While the submissions on compensation correctly commenced with reference to compensation pursuant to s 237 of the ACL and s 72 of the Fair Trading Act, they asserted that a refund of the purchase price and the occupation fees was “an orthodox remedy in a ‘no transaction’ case”, and thereafter addressed at length the principles governing “the causal nexus between the contravening conduct and the damage claimed”, with extensive reference to decisions based on claims for damages. That led to lengthy submissions from senior counsel then appearing for the appellants on the principles governing damages and “no transaction” cases. The Commissioner’s reply submissions at trial referred to three appellate “no transaction” cases (Westpac Banking Corporation v Jamieson [2016] 1 Qd R 495; [2015] QCA 50, Cummins Generator Technologies Germany GMBH v Johnson Controls Australia Pty Ltd [2015] NSWCA 264; 326 ALR 556 and Addenbrooke Pty Ltd v Duncan (No 2) [2017] FCAFC 76; 348 ALR 1), in all of which the sole pecuniary remedy was damages. The parties’ oral submissions reflected these exchanges. It is not altogether surprising that from time to time the primary judge repeated the parties’ looseness in terminology and referred to “damages” (for example, at [538] in recording that “[t]he defendant submits that the Court should not award damages, because the occupiers have ‘enjoyed’ the benefits of their purchase and can continue to ‘enjoy’ the benefits, because the restrictions are not ‘policed’”).

12. [23]

    The primary judge engaged with the submissions concerning a “no transaction” case, including at [544]-[545]:

13. [24]

    But these submissions proceeded, with respect, on a false premise.

14. [25]

    There was never a claim for damages. There never could be a claim for damages under s 236 in proceedings brought by the Commissioner pursuant to s 237, as opposed to proceedings brought by the consumers personally. In the sense used at trial, a “no transaction” case is a short-hand reference to a way of calculating damages when it is said that but for the breach of contract or contravening conduct, no transaction would have been entered into and damages are to be assessed on that basis. It may be contrasted with a claimant’s case that a transaction would have proceeded in the absence of the contravening conduct, but on different terms (typically, that a lower price would have been paid).

15. [26]

    But in this litigation, the Commissioner had obtained undertakings from each consumer to reconvey title to the moveable dwellings upon payment of compensation as ordered pursuant to s 237. Both in form and in substance, the Commissioner was seeking orders in the nature of rescission, with appropriate adjustments having regard to the outgoings incurred and benefits received by the consumers in the meantime. Neither in form nor in substance were damages being sought.

16. [27]

    Despite the distracting submissions concerning the elements of a “no transaction” case, that was the point to which the primary judge returned at [551]:

17. [28]

    It will be useful to recall how rescission in equity for fraudulent misrepresentation operates. The historical and continuing differences between rescission at common law and rescission in equity were considered in Nadinic v Drinkwater (2017) 94 NSWLR 518; [2017] NSWCA 114 at [23]-[33] and need not be repeated here. Plainly common law could not achieve restitutio in integrum so as to place Jonval, Hacienda and the consumers in the same position they had been in a decade before (it suffices to note the renovations and improvements made to the moveable dwellings), and so it is sufficient to address rescission in equity.

18. [29]

    Equity takes a broader approach to achieving “practical justice”, even if the parties cannot be restored to precisely their previous position. As Lord Blackburn explained in Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218 at 1278-9, while a Court of Equity could give no damages, and, unless it could rescind the contract, could give no relief:

19. [30]

    The process of rescission in equity by a purchaser was described by Jordan CJ in McAllister v Richmond Brewing Co (NSW) Pty Ltd (1942) 42 SR (NSW) 187 at 191-192:

20. [31]

    As was explained in Alati v Kruger (1955) 94 CLR 216 at 223-224; [1955] HCA 64:

21. [32]

    There has been controversy concerning the circumstances in which a purchaser who has been induced to purchase by a vendor’s fraudulent misrepresentation and who subsequently spends money improving the land can, as part of the process of rescission in equity, obtain compensation for improvements. There is the general statement of Griffith CJ in Sibley v Grosvenor (1916) 21 CLR 469 at 475; [1916] HCA 14 that the plaintiffs were entitled to restitutio in integrum, which included “rescission of the contract and repayment with interest of the purchase money already paid, together with the amount expended in substantial repairs and lasting improvements effected on the land by them while in possession, from which must be deducted the value of their use and occupation until rescission, with set-off”. All members of the Court save for Isaacs J (who favoured a narrower approach to allowances) assented to orders including an account for “all sums expended by plaintiffs in substantial repairs and lasting improvements on the land together with interest”: at 476. However, the High Court divided narrowly on this point in Brown v Smitt (1924) 34 CLR 160; [1924] HCA 11, with the majority holding that allowances for improvements which were matters of taste or personal enjoyment, or allowances for improvements made after the party making them knows or has reasonable notice of the defect in title, could not be justified (at 165), while Isaacs and Rich JJ said that no allowance could be made for improvements.

22. [33]

    In cases of fraudulent misrepresentation, equity had power not merely to order rescission but also to include an indemnity for loss directly caused by the fraud. Jordan CJ said that “there can be no doubt that complete indemnity could be given by a Court of Equity to the person who had been defrauded, so as to protect him as fully in equity as he could have been protected in law”: McAllister v Richmond Brewing Co (NSW) Pty Ltd at 192, quoting Newbigging v Adam (1886) 34 Ch D 582 at 592; see also Nadinic v Drinkwater at [35]-[36]. The “complete indemnity” which could be obtained from a “Court of Equity” in such a case, to accompany rescission, was distinct from the common law remedy of damages. This was explained by Cotton LJ in Newbigging v Adam at 589, when rejecting the submission that such an indemnity amounted to a court of equity granting damages for deceit:

23. [34]

    That passage is a striking illustration of the way in which common law and equity were regarded as distinct a decade after the commencement of the Judicature legislation. It must however be treated with a little care. It pre-dated the recognition of damages for negligent misrepresentation, and is not authoritative for the precise way in which the indemnity is to be determined. Rather, the maximum limit of the indemnity is governed by the sum necessary to restore the injured party “so far as regards the rights and obligations which have been created by the contract into which he has been induced to enter”: JAD International Pty Ltd v International Trucks Australia Ltd (1994) 50 FCR 378 at 392. But nothing turns on that point in the present case. Here, the primary judge required, on terms that the consumers undertook to return ownership of the moveable dwellings to Jonval, the appellants to repay the purchase price plus pre-judgment interest, plus an allowance of 85% of the cost of renovations and improvements. That would have been well within the principles governing the exercise of the discretion to order rescission in equity.

24. [35]

    Of course, the orders made by the primary judge were pursuant to statute for conduct which was misleading, deceptive and unconscionable, rather than in equity for fraudulent misrepresentation. The primary task is to construe the relevant statutory provisions, rather than to draw an analogy with claims under the general law: Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388; [2004] HCA 3 at [44]. In many respects, statute is broader than equity, although in one respect, as will be seen below, it is narrower. But the broad discretion conferred by s 237 is informed by principles formulated in analogous situations in judge-made law. As McHugh, Gummow, Hayne and Callinan JJ said in Marks v GIO Australia Holdings Ltd at [24] and [116], the principles regulating the administration of the remedy of rescission afford guidance for, but do not dictate, the exercise of the statutory discretion. One of the decisions cited by Gummow J was the decision of the Full Court in Munchies Management Pty Ltd v Belperio (1988) 58 FCR 274 at 288, where it was said that “in the exercise of the discretion in these matters given the court by s 87, the equitable principles concerning rescission give safe, if not necessarily exclusive, guidance”.

25. [36]

    Often there may be an analogy between misleading or deceptive conduct (which may be wholly innocent) and innocent misrepresentation. Where there is both misleading and deceptive conduct, and unconscionable conduct, then it may be easy to see an analogy with rescission in equity for fraudulent misrepresentation.

26. [37]

    If the orders made by the primary judge were identical with or analogous to those which could have been made in equity for fraudulent misrepresentation, then that is powerful evidence that the orders were sustained by statute. In Munchies Management Pty Ltd v Belperio a Full Court of the Federal Court said at 288 that orders such as those in Alati v Kruger may “properly be considered as reducing the loss or damage suffered within the sense of s 87 of the Act”. It was not submitted that that decision was clearly wrong, and with respect, it is clearly correct.

27. [38]

    Turning now to the appellants’ submissions, the absence of evidence of value of the Marina Villas, and the cost of alternative accommodation, and the other evidentiary matters on which the appellants relied may be accepted (and appears to be correct). So too are the options which were, at least in theory, available to the consumers, to relocate or sell their moveable homes (although there was evidence as to the expense of doing this, the need to divide the home into two, and either use a low loader or hire a barge so that it could be removed on water). But the answer to this submission does not turn on those facts.

28. [39]

    It is necessary before making orders pursuant to s 237 of the ACL (or the former s 72 of the Fair Trading Act) to identify the actual or likely sustaining of loss or damage caused by contravening conduct. It is also necessary for the orders to be such as the Court considers will compensate the injured person for that actual or likely loss or damage, or prevent or reduce that actual or likely loss or damage. But it is not necessary to quantify that loss or damage.

29. [40]

    This follows directly from the statutory text. It is necessary to quantify loss or damage before making an order for damages, which is available as of right. It is useful to contrast s 237 with the right to damages conferred by s 236(1):

30. [41]

    Section 237 of the ACL (and the former s 72 of the Fair Trading Act and their common ancestor, s 87 of the Trade Practices Act) are quite different from s 236. Those sections confer a discretionary power to make orders which will compensate for loss, or prevent or reduce loss. In contrast, the right to damages created by s 236 (and its predecessors) is not discretionary, and entitles a claimant to judgment in a pecuniary amount if it can be shown that that was the loss or damage suffered because of contravening conduct. The notion of a claimant having an entitlement as of right to damages and the possibility of discretionary relief is not unfamiliar: consider for example damages and specific performance following breach of a contractual obligation, or damages and account of profits for copyright infringement (see the analysis by Lockhart J in Masterton Homes Pty Ltd v LED Builders Pty Ltd (1996) 33 IPR 417 at 424-425).

31. [42]

    True it is that the Commissioner did not make out a case quantifying the actual loss incurred when the consumers obtained something materially different from what they had bargained for. But she did not need to do so. Her claim was not for damages. The fact that the written and oral submissions of junior counsel appearing for the Commissioner at trial referred to damages did not make it so.

32. [43]

    True it is that in one respect at least, s 87 and its successors are narrower than equity. There is no need in equity for a loss to be identified before rescission and orders giving effect to restitutio in integrum are made. But I do not accept the appellants’ submissions that a loss must be quantified before orders may be made.

33. [44]

    First, it is clear that s 237 is available where there is no actual loss, but only likely loss. That tells against the appellants’ submission. Indeed, the section authorises orders which will prevent or reduce the loss. Why then the need to quantify a loss which may never occur, in the same way as is necessary under s 236?

34. [45]

    Secondly, the result is unlikely. If loss caused by the contravening conduct can be quantified, the plaintiff is entitled to damages in that amount as of right. Orders under s 237 are discretionary and plainly broader than those under s 236. Once again, that tells against the appellants’ construction.

35. [46]

    Thirdly, there is no textual basis for this supposed precondition. The appellants’ reliance on the reference to “the” loss or damage in s 237(2)(a) and (b) is misplaced. That is a reference to the loss or damage in the previous subsection. However, s 237(1) requires only that a person have suffered, or be likely to suffer, loss or damage. It does not require the person to quantify what that loss or damage (or likely loss or damage) is.

36. [47]

    Fourthly, Marks v GIO was a very different case. The borrowers entered into loan facilities on the basis that interest would be charged at a base rate plus a margin of 1.25% per annum. Contrary to the lender’s representations, the lender was contractually able to vary the margin on 90 days’ notice, and it did so. No borrower gave evidence that he or she would have entered into a different facility, or would not have borrowed at all, had they known that the lender had power to vary the margin rate on giving them 90 days’ notice. All borrowers were free at any time to repay the facility, without penalty, before the varied margin applied. And the borrowers conceded at trial that “even with the increased margin, the [facility] was more beneficial to [them] than any other available loan facility”: see GIO Australia Holdings Ltd v Marks (1996) 70 FCR 559 at 571.

37. [48]

    It was in that context that neither damages under s 82 nor other orders under s 87 were made. In circumstances where there was no evidence that a borrower would not have borrowed funds at all, and there was no superior alternative, it was quite plain that there was no loss. The borrowers were misled, but they nonetheless entered into a superior contract than any other available to them, and it was not contended that they would not have borrowed any money at all. The joint judgment acknowledged that this category of case, where there was no demonstrable loss, would be “rare”.

38. [49]

    But that is far removed from the present case. Here not only were the moveable homes unsuitable for the consumers’ intended purpose contrary to what had been represented to them. That by itself may not be enough to establish loss: Marks at [54]. But there was much more. The consumers also entered into occupation agreements and made payments and incurred obligations, and they separately incurred further actual and demonstrated expense in making improvements upon the Marina Villas. They were also in a practical sense “locked in”, in the sense that substantial expense was necessarily involved in transporting the dwelling to another site or selling it and relocating to an area not subject to the 28 days condition of development consent. The first category amounts to actual loss or damage, while the second amounts at least to likely loss or damage. That is amply sufficient to satisfy the preconditions to s 237 and s 72(1).

39. [50]

    The parties exchanged submissions in this Court based on the need to establish an alternative transaction, in order to make out a “no transaction” case. That led to a challenge to what the primary judge had said about establishing a “no transaction case”, and in particular whether his Honour had (at [546]) correctly applied Westpac Banking Corp v Jamieson and the effect of a recent decision on which his Honour had not relied, Wyzenbeek v Australasian Marine Imports Pty Ltd (in liq) (2019) 272 FCR 373; [2019] FCAFC 167. But those were decisions on damages. The Commissioner was not seeking damages on behalf of the consumers. She was seeking orders pursuant to statute, akin to rescission, for the return of amounts paid by the consumers, and compensation for expenditure incurred, on terms that the consumers return title to the moveable dwellings to Jonval.

40. [51]

    The submissions proceeded on a false premise. To the extent the primary judge addressed them, his Honour was dealing with an issue which did not arise. It is inappropriate for this Court to address them.

41. [52]

    The appellants made three further discrete points in connection with the orders made by the primary judge. These were based on the fact that the orders made no allowance for the enjoyment by the consumers of occupation of the moveable dwellings for some ten years, or the depreciation of those buildings, or the value (as distinct from cost) of the improvements.

42. [53]

    The first submission turned upon the proposition that the occupation fee was the right to occupy the site as distinct from the right to use the building which, while it was affixed to the site, was actually owned by the consumers. It was said that the primary judge erred in referring to “rent”, notably in [540]:

43. [54]

    In relation to the second aspect, there was in fact no evidence one way or another of the value of the moveable dwellings other than the purchase price actually paid. The moveable homes were installed in 2005 or 2006, and thus were at least 3 or 4 years old when purchased by the consumers. Their value a decade later is not known.

44. [55]

    There was evidence of the cost of the improvements. In the case of five of the consumers, the amount was less than $5,000, one had paid some $12,000, two had (jointly) paid some $15,000, two had (jointly) paid some $25,000 and two had (jointly) paid just less than $30,000, although that amount was affected by income received from subletting the villa. (No separate submissions were made concerning the subletting, which may therefore be passed over.)

45. [56]

    By way of example, the improvements undertaken by one of the consumers were installing dark shade-cloth blinds costing $1818, installing heavy duty plastic blinds to protect against rain and wind costing $1000, installing CCTV security cameras costing $1200, building a retaining wall costing $500 and installing a clothes line costing $250. The blinds were purchased in February 2011. The retaining wall was built in about December 2013. The evidence does not disclose when the other improvements were built.

46. [57]

    Another consumer undertook more substantial improvements, comprising landscaping, deck improvements, kitchen renovations, plumbing improvements, installing a television outlet and installing plantation shutters. The receipts for most of those were in evidence, totalling some $15,000 and all date from October, November or December 2010.

47. [58]

    I do not think there is any substance to the complaint that the primary judge referred from time to time to “rent”, rather than the occupation fee. That is how the consumers, understandably, described the weekly payments to the landowner, Hacienda. Although the consumers owned the moveable dwellings, they needed to pay the occupation fee in order to reside in them. I see no error in equating the benefit of occupation which the consumers enjoyed with the payments of agreed occupation fees which they made.

48. [59]

    If the primary judge had acceded to the Commissioner’s submission, and ordered compensation in the amount of the occupation fees paid by the consumers throughout their tenure, it is probable that there would have been appellable error. It will be recalled that Jordan CJ said that, as part of the process of adjustments, “[t]he purchaser must account for ... the value of the use of the property whilst he had it”. If the consumers enjoyed occupation of the sites, and had the occupation fees returned to them, it is difficult to see how to that extent the orders would have satisfied the requirement that they compensate for loss, or prevent or reduce loss. There would, to the contrary, be a windfall gain.

49. [60]

    No submission was made that the moveable dwellings had not been maintained over that period. The value today may well be roughly comparable to the purchase price. Even if that is not so, in the absence of evidence of a diminution in value, there is no error in making orders which amounted to the reconveyance of title to the moveable dwellings in exchange for the return of the amounts paid plus interest. True it is that if there were evidence of diminished or enhanced value, it would be open for the orders to incorporate an adjustment. But in the absence of such evidence, it cannot be said that the orders made disclose error.

50. [61]

    Finally, I turn to the improvements. There was no challenge to the finding by the primary judge at [534] that “in large measure”, the improvements were undertaken as a result of the misleading or deceptive conduct or unconscionable conduct and the belief, in the mind of each of the occupiers, that they were able lawfully to live, in retirement, in the Marina Villa and on the Marina Villa site. That is borne out by the timing of most of the improvements. The qualified finding reflected the fact that one of the consumers carried out some of the work after he had become aware of the conditions of his occupation. The primary judge determined to award compensation at 85% of the costs incurred for the following reasons:

51. [62]

    Thus it may be seen that the primary judge was astute to identify costs incurred by reason of the misleading and deceptive conduct, and also to identify the benefit enjoyed by the consumers. Insofar as the majority of the improvements were caused by the contravening conduct, orders under s 237 authorised compensation for that loss. (Such losses would also have grounded an indemnity available in equity for fraudulent misrepresentation.) I see no error in reducing that cost by 15% to reflect the consumers’ enjoyment of the improvements during the period, and while I am conscious that the cost to the consumers is quite distinct from the benefit (likely minimal) to be enjoyed by the appellants upon reconveyance, I think it was open to the primary judge to have regard to that benefit. That is consistent with the broad remedial power conferred by s 237 to craft an appropriate remedy. Sir Donald Nicholls VC, speaking for the Court of Appeal of the position in equity, said of this point that if the plaintiff has improved the property he seeks to return, the plaintiff will not necessarily be entitled to a further payment from the defendant because “it may not be just to require the defendant to pay for improvements he does not want”: Cheese v Thomas [1994] 1 WLR 129 at 137G. While there is some controversy concerning the approaches taken in Sibley v Grosvenor and Brown v Smitt, there is no reason to conclude that s 237 precludes regard from being had to such benefit as may be enjoyed by a defendant to whom property which has been improved is restored, and it was open to the primary judge to have regard to that consideration in the facts of this case.

52. [63]

    No doubt there were other approaches which could have been adopted, and no doubt there was a measure of informed estimation in selecting 85%. But difficulties in estimating damages do not relieve a court from the responsibility of estimating them as best it can, as Hayne J said by reference to authority in Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd [2003] HCA 10; 77 ALJR 768 at [38], and no more stringent approach should be taken to orders under s 237.

53. [64]

    For those reasons, orders in the nature of rescission and ancillary orders directed to adjustments to restore the status quo fell comfortably within the requirement of s 237(2).

54. [65]

    These grounds are not made out.

Grounds 6-8: Unconscionable conduct by Mr Willmott

1. [66]

   Grounds 6 and 7 alleged error by the primary judge in finding that Mr Willmott engaged in conduct that was unconscionable, either personally or through being “knowingly concerned” in a contravention by Jonval or Hacienda. Ground 8, consequentially, maintained there was error in the order that Jonval, Hacienda or Mr Willmott be jointly and severally liable to pay the compensation.

2. [67]

   Ground 9 challenged the declaration that Mr Willmott had engaged in conduct contravening s 42 of the Fair Trading Act and s 18 of the ACL. This ground was conceded in written submissions supplied well in advance of the hearing, and need not be pursued here. It was based on a minor error as to parties when orders were formulated. It results in an amendment to one of the declarations, which should apply to Jonval and Hacienda, rather than to Hacienda and Mr Willmott.

3. [68]

   It is convenient to reproduce the entirety of what was submitted orally in support of grounds 6, 7 and 8:

4. [69]

   The written submissions were also brief, although they had a slightly different focus. They turned on the pleaded case and the evidence available to attribute the making of representations by employees and agents of Jonval and Hacienda to Mr Willmott.

5. [70]

   I do not accept either way of advancing these grounds. Dealing first with the written submissions, the pleaded case against Mr Willmott was based on what Mr Willmott knew, and what he permitted to occur, especially the sales agreements executed by some of the consumers. Mr Willmott personally signed some sales agreements and most of the occupation agreements. It should be noted that Mr Willmott was not called as a witness (nor did the appellants call any other witness), and so inferences pursuant to Jones v Dunkel were more readily available.

6. [71]

   The primary judge found that Mr Willmott was the controlling mind of each of Jonval and Hacienda. He was a director and 50% shareholder, and while the appellants complained that it was not pleaded that Mr Willmott was the sole controlling mind, they did not contend that the inference that he was, which the primary judge drew, was not available on the evidence. Mr Willmott was evidently personally involved in some of the contraventions (insofar as he executed the contracts) and there was a sound basis for the inference that where he was not involved personally, he knew of and endorsed the conduct of his companies’ employees. No error has been established in the conclusion drawn by the primary judge that Mr Willmott was personally engaged in conduct which was unconscionable.

7. [72]

   Dealing with the way these grounds were developed orally, it is now clear that “moral obloquy” is not a necessary component of a conclusion of statutory unconscionability: PT Ltd v Spuds Surf Chatswood Pty Ltd [2013] NSWCA 446 at [102]-][105]; Ipstar Australia Pty Ltd v APS Satellite Pty Ltd [2018] NSWCA 15; 356 ALR 440 at [195]; Park v Murray Irrigation Ltd [2018] NSWCA 166 at [138]-[139]; Australian Competition and Consumer Commission v Medibank Private Ltd (2018) 267 FCR 544; [2018] FCAFC 235 at [240]-[243] and see Australian Securities and Investments Commission v Kobelt [2019] HCA 18; 93 ALJR 743 at [91]; cf Jams 2 Pty Ltd v Stubbings [2020] VSCA 200 at [91]. But that may be put to one side. I think it was well open to the primary judge to find that conduct in permitting people to purchase moveable dwellings on the basis that they would be their home, often for their retirement, contrary to the written terms of the occupation licence and contrary to the development consent, was unconscionable. The prices were modest, the people were far from youthful, and the conduct involved selling something which was known to be unlawful. The amounts were relatively small, bearing in mind they were for the purchase of a home, but there was evidence indicating that they were the most substantial asset owned by some of the consumers. There is no reason to doubt that the vendor knew that the sales it achieved were brought about by the downplaying of the conditions of the occupation agreements and not advising of the conditions of planning approval. The fact that, as it happens, the consumers have received uninterrupted possession and occupation of the moveable dwellings for around a decade, does not deny the conduct being regarded as unconscionable, especially in light of the unchallenged findings of distress that the consumers’ insecurity of tenure caused, and the fact that the consumers have now been involved in litigation for some five years.

8. [73]

   The trial judge gave a very long judgment. Even so, as Lord Hoffmann observed in Biogen Inc v Medeva plc [1997] RPC 1 at 45; [1996] UKHL 18, and as Lords Neuberger and Mance reiterated in Chen v Ng (British Virgin Islands) [2017] UKPC 27 at [56], the reasons are an inherently incomplete statement of the impression made upon his Honour by the primary evidence. Especially in a case such as the present, the extent of the distress and uncertainty suffered by the consumers over many years, during which many had hoped to enjoy their retirements, is apt to be only imperfectly captured by the reasons. Not lightly would I interfere with the conclusion that the conduct was unconscionable.

Conclusion and orders

1. [74]

   For those reasons, those grounds of appeal which were pressed and contested fail.

2. [75]

   Ground 9, which was conceded in advance of oral submissions, involves the correction of an obvious slip. While this could have been resolved by application to the primary judge, it may just as conveniently be rectified by this Court.

3. [76]

   The Court heard short submissions at the beginning of the hearing of the appeal in support of the Commissioner’s motion seeking relief in the nature of a mandatory injunction for the payment into Court of the amounts ordered to be paid to the consumers, upon which payment the judgment would be stayed pending the outcome of the appeal. There was evidence that there had been negotiations concerning a stay of execution, which had broken down. The Court was told by Mr Stewart that his instructions were that the agreed payment into Court as the price for a stay was imminent.

4. [77]

   But nothing turns on whether or not there was an agreement between the parties, or (if agreement was reached) whether or not funds were paid into Court in accordance with its terms. The notice of motion was, with respect, misconceived. As was raised during the hearing, either there was or was not a stay. If there was not, the Commissioner could enforce the judgment in the usual way. But the Commissioner having obtained judgment on behalf of the consumers, it was not open for the Commissioner to obtain a mandatory injunction compelling payment of the amount into Court as the price of a stay of execution. That would be to create a novel form of execution. The notice of motion should be dismissed.

5. [78]

   The costs of the appeal and the costs of the notice of motion would appear to be readily severable. In each case, there is no reason for costs not to follow the event.

6. [79]

   I propose the following orders: