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Pretence of permanency leads to $2.3m penalty

08 March 2021 Grace Ormsby
Pretence of permanency

A development that advertised waterfront villas as “permanent residences” to would-be buyers is facing more than $2.3 million in compensation costs.

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Back in 2019, the Supreme Court had found Jonval Builders Pty Ltd, Hacienda Park Pty Ltd and John Allan Willmott had engaged in misleading and deceptive conduct as well as unconscionable conduct when they sold waterfront villas as permanent residences despite the sites not having any development consent for permanent accommodation.

The villas had been marketed to consumers under the pretence that they would be suitable for permanent residents.

That decision, which required the defendants to pay compensation, interest and costs, was upheld in the NSW Court of Appeal in 2020, and saw the parties ordered to pay $2,353,926 in compensation plus interest.

It was that decision that has now been upheld in a final decision from Australia’s High Court.

NSW Fair Trading had brought proceedings in the state’s Supreme Court after receiving a number of complaints from consumers who had purchased the villas and expected to be able to live there permanently.

Commenting on the decision, the NSW Minister for Better Regulation, Kevin Anderson, said “this is a great example of NSW Fair Trading acting to protect the interests of consumers that have been misled”.

“This is consumer regulation working exactly as it’s meant to.”

Expressing that he is glad to know consumers will be compensated, he said “these operators acted unconscionably, leading to consumers, including retirees, paying a premium for what they believed were permanent waterfront residences”.

It’s led the minister to advise anyone looking to buy inside a caravan park to “make sure you check with council to confirm what you’re being offered is above board and seek independent legal advice on the sale”.

Pretence of permanency leads to $2.3m penalty
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