Background
In May 2012, Elliott and Samantha purchased 6000 vacation credits with Joyous Club Limited (“Joyous Club”). Elliott and Samantha borrowed $20,567.07 to purchase the vacation credits on finance through Joyous Finance Limited (“Joyous Finance”). In 2014, Elliott and Samantha found out through a friend that members of the public can rent Joyous Club properties when they are not booked by Joyous Club members.
Elliott and Samantha considered that Joyous Club had misled them into purchasing the vacation credits by omitting to highlight that the public can rent Joyous Club properties. Elliott and Samantha sought to cancel their credit contract with Joyous Finance and receive a refund of the money they had already paid to Joyous Finance.
Elliott and Samantha’s view
Elliott and Samantha accepted they received Joyous Club’s Product Disclosure Statement (“PDS”). The PDS outlined that Joyous Club may rent club properties to the public. However, Elliott and Samantha said that they were not made aware of this section of the PDS by the Joyous Club salesperson. They argued that the availability of Club properties to the public was a fundamental aspect of the terms and conditions of the contract with Joyous Club and this should have been highlighted by the salesperson at the time they entered into the agreement to purchase the vacation credits.
Elliott and Samantha said they had ‘lost out’ because the public pay less than Club members to rent Club properties. Elliott and Samantha also said they paid annual Club levies which in part paid for maintenance of Club properties. Elliott and Samantha believed this levy paid for the public’s ‘share’ of maintenance and other costs, meaning the public got a ‘better deal’ than members.
Elliott and Samantha said they would not have purchased the vacation credits had they been made aware that the public could rent club properties.
Joyous Club’s view
Joyous Club argued that renting Club properties to the public benefits Club members. Joyous Club said that the annual levies are payable by all owners to ensure the upkeep, maintenance, operation and repairs of club apartments. If Club members are not using the properties, Joyous Club opts to rent the properties to the public to generate income for the Club. Income generated from renting the properties is put towards the Club’s operating costs, which helps to maintain/minimise the annual levies. Joyous Club’s PDS provides that Club properties are only rented out where they are not utilised by members and can only be rented to the public within 47 hours of check-in time.
Also, Joyous Club said after receiving the PDS, Elliott and Samantha had the opportunity to cancel within 7 days of purchase, if they did not accept the terms and conditions outlined in the PDS.
FSCL’s view
We found that Joyous Club’s renting of Club properties to the public did not disadvantage Elliott and Samantha in any way, and in fact benefited Club members as a whole.
We agreed with Elliott and Samantha that fundamental aspects of the purchase terms and conditions should be highlighted by salespeople. However, not all information in the PDS can be explained in detail to customers. In our view, the fact that Joyous Club rents Club properties to the public did not disadvantage Elliott and Samantha because any rental income generated is applied to maintain/minimise their annual levies. This was a benefit to Elliott and Samantha and did not lessen their Club membership benefits. We did not consider that the ability to rent Club properties to the public needed to be specifically highlighted by a salesperson.
We found that Elliott and Samantha had not suffered any loss as a result of Joyous Club not specifically highlighting that Club properties can be rented to the public. We were not able to uphold the complaint.
