Retirement upheaval update

In our 2020 edition of Outasite we reported on the case of Commissioner for Fair Trading v Jonval Builders Pty Ltd, Hacienda Caravan Park Pty Ltd and John Allan Willmott [2019] NSWSC 1893. When we went to print the Supreme Court of NSW had ordered compensation to be paid to home owners and Jonval, Hacienda and John Willmott had appealed the decision of the Supreme Court to the NSW Court of Appeal.

What the case was about

Between 2009 and 2012 each home owner purchased a ‘Marina Villa’ at Tweed River Hacienda Holiday Park from Jonval Builders trading as Tweed Relocatable Homes. The villas had been installed in 2005 or 2006. Each home owner entered into two contracts: a sale agreement with Jonval for the purchase of their home and an occupation agreement with Hacienda. The occupation agreements contained terms requiring Hacienda’s prior permission for occupation of the villas for any period greater than 28 days, and limiting occupation to no more than 180 days per year in any circumstance. These terms corresponded with a condition of development consent that the sites not be used for permanent accommodation.

The Commissioner for Fair Trading brought proceedings in 2015 in the Supreme Court of NSW seeking orders for compensation payable to the home owners under the former s 72 of the Fair Trading Act 1987 (NSW) and s 237 of the Australian Consumer Law. The claim alleged that the home owners had only purchased the villas because of misleading or deceptive or unconscionable conduct by Jonval, Hacienda and John Allan Wilmott. Mr Willmott is a director of both Jonval and Hacienda. The alleged contravening conduct was that prior to the purchase, the appellants told the home owners that the terms of the agreements restricting occupancy, and the planning conditions, would not be enforced. Most of the home owners gave evidence in the Supreme Court proceedings that they had intended to live in the villas permanently. All gave evidence that they would not have purchased the homes had they known of the restrictions on occupation.

The outcome

The primary judge found that Jonval, Hacienda and John Wilmott had engaged in misleading and deceptive and unconscionable conduct and that this conduct had caused the home owners to enter into the contracts. The Supreme Court ordered that Jonval, Hacienda and John Wilmott were jointly and severally liable to pay compensation to the home owners, in amounts ranging from $224,380.63 to $387,883.62. The amounts were calculated as the sum of (a) the purchase price of the home, (b) 85% of the cost of renovations and improvements undertaken by the home owners and (c) interest.

The Court ordered that the compensation should be paid into, and held by, the Court. Each home owner provided a written undertaking to the Court that upon receipt of the compensation they would transfer ownership of their villa to Jonval.

NSW Court of Appeal

The appeal of from the Supreme Court decision to the Court of Appeal challenged the compensation orders and the primary judge’s findings of unconscionable conduct engaged in by John Wilmott. On 25 September 2020 the appeal was dismissed by all three Court of Appeal judges with a costs order; in Jonval Builders Pty Ltd v Commissioner for Fair Trading [2020] NSWCA 233.

The High Court of Australia

Jonval Builders, Hacienda and Mr Willmott made a final throw of the dice and filed an appeal application with the High Court. However the special leave application was dismissed with costs on 25 February 2021.

Compensation paid

Between 25 February and June 2021 the home owners were awaiting the release of the funds held by the Court. Even at this late stage Hacienda was using delaying tactics rather than consenting to the release of the compensation funds. However, on 21 June The Honourable Justice White made an order for the Court of Appeal to release the Judgement Sums (compensation) to each of the home owners. On receipt of the Judgement Sum each home owner was required to transfer their Marina Villa to Jonval Builders Pty Ltd and vacate the Marina Villas on site within 3 days.

The Marina Villa home owners say that no amount of compensation can truly put right the detrimental impact that the Hacienda operator’s misconduct has had on their lives, on their health and wellbeing. They question why an operator like Mr Willmott and his daughter Ms Tanya Hickling are permitted to continue as directors of Hacienda (operating a land lease community) given the findings made in Court. The Marina Villa home owners would advise all prospective purchasers to get independent advice and to carefully scrutinise the documents they are given to sign before committing to buy a home in a land lease community. A very harsh lesson has been learned.

Some of the Marina Villa home owners will now move to live locally in other land lease communities and others have moved to live interstate. Housing affordability is a huge issue for them. They thank the local Northern Rivers Tenants Advice and Advocacy Service and the Tenants’ Union of NSW and the Tweed Residential Park Homeowners Association for their invaluable assistance provided over the past ten years including at Tribunal proceedings. In particular, the Marina Villa home owners say that they are very thankful that the NSW Commissioner for Fair Trading, through its LegalServices Branch, finally commenced the Supreme Court of NSW proceedings in 2015 and instructed barristers to appear. Fair Trading as Regulator assisted those Hacienda home owners facing the greatest consumer detriment in vindicating their rights and righting a wrong, and achieved a very significant outcome.

A great deal has been done but much more is needed to deal with misconduct by rogue operators like Hacienda in the residential land lease industry.

This article was published in Outasite magazine issue 7. Outasite is published annually. Outasite Lite email newsletter, is sent several times a year – subscribe here. All past issues are available in the archive.