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[2003] QCA 423
procedural. Appeal dismissed with costs.
Nethurst and the guarantors wanted to add a counterclaim seeking, among other things, to stop Abacus from enforcing the lease and guarantee. Their allegations of misleading conduct concerned the original lessor and its director. The Court of Appeal held that the proposed injunction against Abacus was not sufficiently connected to that alleged conduct. It also considered the proposed claim against Abacus too weak to present a serious issue for trial. The Court did not decide the broader question of whether s 80 could ever support an injunction against a person who had not participated in the contravention.
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2,092 words · generated 02/10/2026
The dispute arose from a commercial lease of premises at the Brunswick Centre. Nethurst Pty Ltd was the lessee, Petrie Point Pty Ltd was the original lessor, and Antoine and Adrienne Ghanem guaranteed Nethurst's obligations. Under a deed dated 27 April 1995, the guarantors agreed to answer for the lessee's performance and to indemnify the lessor for damage resulting from a breach [8].
The lease and guarantee interests were later assigned to Abacus Funds Management Ltd. Nethurst allegedly failed to pay rent, promotion fund contributions and interest totalling $300,132.06, abandoned the premises and repudiated the lease [9]. Abacus re-entered the premises on 1 July 2000, thereby accepting the alleged repudiation and termination, and claimed the sums said to be owing from Nethurst and the guarantors [10]-[11].
The appellants' defence raised a different set of allegations. They said that misrepresentations by or on behalf of Petrie Point had induced Nethurst not to exercise a contractual right to terminate an earlier agreement for lease. They also alleged that Abacus knew of those allegations through disclosure connected with the assignment, and that Nethurst assumed Abacus had agreed to a mutual surrender after it abandoned the premises. On that asserted basis, Nethurst said it did not pursue a Trade Practices Act claim against Petrie Point or its director, Angus Johnson, and that the claim had become statute-barred [12]-[13]. These were allegations in the pleadings, not findings that the alleged misrepresentations or statutory contravention had occurred.
The appellants applied to add a counterclaim. It sought injunctions against Abacus preventing enforcement of the lease against Nethurst and the guarantee against the guarantors. It also sought relief against Petrie Point and Johnson, including declarations about the lease and alleged misleading conduct, indemnity-related orders and negligence damages [14]. The application came after the defence had been filed and served: the defence was filed on 1 February 2002, and the application for leave was made on 14 November 2002 [3].
The primary judge refused leave. The reasons recorded in the appeal were that the proposed claims had no prospects of success and that one claim was not made against the plaintiff, contrary to r 178(1) of the Uniform Civil Procedure Rules 1999 (Qld) [4]. The Court of Appeal, comprising McMurdo P, Muir J and Holmes J, dismissed the appeal with costs. McMurdo P and Holmes J agreed with Muir J's reasons [1]-[2], [49].
The key question for Muir J was not whether the alleged misrepresentations had been proved. It was whether the proposed counterclaim against Abacus disclosed a sufficient legal connection between the alleged contravention and the injunction sought under s 80 of the Trade Practices Act 1974 (Cth).
Muir J accepted that an injunction under s 80 required a sufficient nexus or relationship between the contravention and the order sought. The judgment drew on the approach described in South Sydney District Rugby League Football Club Ltd v News Ltd and Australian Competition & Consumer Commission v Z-Tek Computer Pty Ltd [39]-[40]. On that approach, the discretion under s 80 is broad, but it is not unbounded. Its exercise must be appropriate in the setting of the Act, and there must be a relationship between the alleged contravention and the injunction.
The alleged contravening conduct in the counterclaim was attributed to Petrie Point and Johnson. The proposed injunction against Abacus would have stopped Abacus from enforcing rights under the lease and guarantee. The pleading said Abacus knew about Nethurst's allegations and threatened litigation, but did not allege that Abacus knew Petrie Point had breached the Act. Nor did it allege that Abacus was not dealing at arm's length with Petrie Point, intended to help Petrie Point, or intended to interfere with Nethurst's claims against the original lessor [44].
Muir J therefore saw the asserted connection as insufficient. In his words, the pleaded facts showed no more than Abacus's involvement in a “commonplace commercial transaction” distinct from the conduct alleged against Petrie Point and Johnson [42]. The fact that an injunction might reduce the consequences Nethurst faced under the lease did not itself establish the required nexus. The court's focus was on the relationship between the alleged contravention and the proposed restraint, not simply on whether the restraint could benefit the alleged victim.
There was a second, related basis. Muir J considered that the proposed claim against Abacus had prospects so minimal that there was no serious issue to be tried, applying the test in General Steel Industries v Commissioner for Railways [43]. The lack of pleaded participation or relevant knowledge mattered to that assessment. The Court did not make findings about whether the lessor had contravened the Act, and Muir J expressly observed that no such breach had been established [44].
The judgment also discussed a broader statutory interpretation dispute. The appellants argued that s 80's language could permit an injunction against someone other than the person who contravened the Act. The respondents argued for a more restricted construction, including by reference to the relationship between ss 80 and 87 [17]-[28]. Muir J regarded the question as difficult. Although he expressed sympathy with the respondents' narrower reading, he did not decide it, preferring to leave it for a more suitable factual case [37]. The result therefore rests on the lack of nexus and the weak prospects of this particular claim, not on a final ruling that s 80 can never reach a non-contravener.
The judgment describes a statutory history relevant to the competing interpretations. As Muir J recounted it, s 80 originally concerned injunctions restraining a person from engaging in conduct that constituted or would constitute a contravention. Section 87 originally allowed additional orders to redress injury and was amended in 1977 to restrict such orders to the contravener or a person involved in the contravention. Section 80 was later broadened in 1983 [35].
The appellants relied on that history to argue that the broadened s 80 could support injunctions against persons who had not themselves contravened or participated in a contravention [35]-[36]. They also relied on Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd. Muir J considered that authority but explained that the passage relied on concerned the meaning of “any other person”, not the specific question before the Court [30]-[31]. The authority therefore did not answer the present issue.
Muir J applied the general interpretive approach in Project Blue Sky Inc v Australian Broadcasting Authority: statutory meaning is assessed in context, with the language and purpose of the instrument considered as a whole [32]. He noted that a literal reading of s 80(1) could support a broader power, but considered it surprising if the provision allowed orders against a person against whom no Act-based cause of action was alleged [29], [34]. He also noted the concern that a person unable to obtain relief under s 87 might effectively obtain the same result through s 80 [34].
The judgment did not finally resolve that broader question. The point was expressly reserved [37]. The determinate rule applied to the case was narrower: the injunction sought had to bear a sufficient nexus to the alleged contravention, and the pleading did not establish one [38], [42].
Accordingly, the “after” position established by this decision should be stated with care. For the proposed claim before it, the Court required a nexus and found none. The judgment did not create a definitive rule that only a contravener can ever be restrained under s 80. Nor does the text supplied establish how later courts treated the unresolved issue.
At [38], Muir J said: “I accept that no relevant nexus has been shown and that it is necessary to demonstrate one.” In plain English, the proposed injunction needed a meaningful legal connection to the alleged statutory wrongdoing. The appellants had not shown that connection on their pleaded case.
At [42], Muir J described Abacus's role as “involvement ... in a commonplace commercial transaction quite distinct from any conduct alleged against the Lessor and Mr Johnson.” This explains why knowledge of allegations did not, on these pleadings, bridge the gap between the alleged misconduct and the requested restraint.
At [43], Muir J said the claim's prospects were “so minimal that there is no serious issue to be tried.” This was not a trial finding on whether the allegations against the lessor were true. It was an assessment of whether the proposed claim against Abacus was sufficiently arguable to support leave.
At [37], Muir J said resolution of the broader statutory issue should “await a more suitable factual platform.” In plain English, the Court deliberately avoided deciding the outer limits of s 80 because it could dispose of this appeal on narrower grounds.
The decision is most directly relevant to applications for leave to add a counterclaim seeking s 80 injunctions against an assignee or other commercial party that is not alleged to have engaged in, or participated in, the underlying statutory contravention. It highlights the importance of identifying the connection between the alleged conduct and the specific restraint requested.
The factual features central to the result were that the alleged misleading conduct was attributed to the original lessor and its director; the assignee was said to know of allegations and threatened litigation; but the pleading did not allege the assignee knew of a breach, participated in the conduct, was acting other than at arm's length, or intended to assist the alleged contraveners [42], [44]. Muir J also noted that the lessee did not claim a proprietary interest in the lease or leased property and admitted abandoning its interest as lessee [46].
This is not a decision that mere knowledge is always irrelevant, or that an assignee can never be restrained. The Court reserved the general construction issue. Its practical significance lies in showing that knowledge of allegations and a potential effect on the claimant's liabilities were not enough, on these pleaded facts, to establish the required nexus or a serious issue to be tried.
The supplied judgment contains no account of decisions after 26 September 2003, so later judicial treatment cannot be established from this source alone. It would be unsafe to infer that later courts adopted, rejected or limited the reasoning without those later judgments.
The authorities Muir J discussed were existing authorities. Project Blue Sky was used for the contextual approach to statutory interpretation [32]. Truth About Motorways was considered, but Muir J distinguished the passage relied on because it addressed a different statutory phrase [30]-[31]. South Sydney and Z-Tek were cited in relation to the limits on the s 80 discretion and the required nexus [39]-[40]. General Steel was applied to assess whether the proposed claim presented a serious issue [43]. These relationships describe the reasoning in this judgment, not subsequent treatment of Abacus.
The central open question is whether s 80 can authorise an injunction against a person who has not engaged in, or participated in, the contravening conduct. The appellants relied on the breadth and legislative development of s 80; the respondents argued that the Act's structure and purpose required a narrower approach. Muir J considered the interpretive issue difficult and left it undecided [29]-[37].
A related question is what factual connection is sufficient to establish the required nexus in a different case. This judgment found the connection inadequate where the proposed restrained party was alleged to know of the claimant's allegations and threatened litigation, but was not alleged to have participated in the conduct or to have the relevant knowledge or purpose [42], [44]. It does not specify a complete test for every possible factual setting.
The relationship between the remedies in ss 80 and 87 was also debated. The respondents argued that s 80 should not be used to achieve a practical result unavailable under s 87 against a person outside the statutory class described in that provision [21]. The judgment recounts that argument but does not decide it [37].
Finally, the judgment records the r 178(1) issue and that the appellants did not argue for allowing the counterclaim if the claims against Abacus were excluded [4], [48]. It does not decide how a court should treat a differently framed application seeking to proceed only against other proposed counterclaim defendants.
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Source: Queensland Judgments (Supreme Court Library Queensland) (www.queenslandjudgments.com.au). Converted to plain text by ZoeLaw. Not the official version.
SUPREME COURT OF QUEENSLAND
CITATION: Abacus Funds Management Ltd v Nethurst P/L & Ors [2003] QCA 423
PARTIES: ABACUS FUNDS MANAGEMENT LTD ACN 007 415 590 (plaintiff/first respondent) v NETHURST PTY LTD ACN 069 125 275 / (first defendant/first appellant) ANTOINE GHANEM AND ADRIENNE GHANEM / (second defendants/second appellants) / PETRIE POINT PTY LTD ACN 056 548 595 / (second respondent) / ANGUS WILLIAM JOHNSON / (third respondent)
FILE NOS: Appeal No 10919 of 2002 / SC No 10428 of 2001
DIVISION: Court of Appeal
PROCEEDING: General Civil Appeal
ORIGINATING COURT: Supreme Court at Brisbane
DELIVERED ON: 26 September 2003
DELIVERED AT: Brisbane
HEARING DATE: 21 August 2003
JUDGES: McMurdo P, Muir and Holmes JJ / Separate reasons for judgment for each member of the Court, each concurring as to the order made
ORDER: Appeal dismissed with costs
CATCHWORDS: PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PRACTICE UNDER RULES OF COURT – Amendment – where the appellants sought leave to amend their pleadings to include a counterclaim – where leave refused on the basis that the counterclaim has no prospects of success and because one of the claims was not made against the first respondent as required by r 178(1) Uniform Civil Procedure Rules 1999 (Qld) – whether the proposed pleading disclosed an arguable claim / TRADE AND COMMERCE – TRADE AND COMMERCE GENERALLY – MISCELLANEOUS PROVISIONS - where the appellants’ proposed counterclaim sought relief under s 80 and declarations made pursuant to s 87 of the Trade Practices Act 1974 (Cth) – whether a nexus between the conduct the subject of the injunction sought and the contravening conduct is a necessary precondition for the application of s 80 / Trade Practices Act 1974 (Cth), s 80, s 87 / Uniform Civil Procedure Rules 1999 (Qld), r 178(1), r 179 / Australian Consumer & Competition Commission v Office Link (Aust) Pty Ltd (1997) ATPR 41-598, referred to / Australian Consumer & Competition Commission v Real Estate Institute of Western Australia Inc (1999) 161 ALR 79, referred to / Australian Consumer & Competition Commission v Virgin Mobile Australia (2002) SCA 1548 , referred to / Bahr v Nicolay (No 2) (1988) 164 CLR 604, referred to / General Steel Industries v Commissioner for Railways (1964) 112 CLR 125, applied / Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, applied South Sydney District Rugby League Football Club Ltd v News Ltd (2001) 111 FCR 456, applied / Truth About Motorways v Macquarie Infrastructure Investment Management [2000] HCA 11 (1999) 200 CLR 591, followed
COUNSEL: J Bell QC, with D Kelly, for the first and second appellants / M Bland for the first respondent / B D O'Donnell QC for the second and third respondents
SOLICITORS: Hopgood Ganim for the first and second appellants / McCullough Robertson for the first respondent / Russell & Company for the second and third respondents
McMURDO P: I have had the benefit of reading the reasons for judgment of Muir J in which the facts and issues are set out. I agree with him that the learned trial judge was right in concluding that, for the appellants to succeed, it is necessary for it to demonstrate some nexus between the injunction sought under s 80 of the Trade Practices Act 1974 (Cth) and the contravening conduct upon which it seeks to rely in its proposed counterclaim. The appellant has failed to demonstrate such a nexus sufficient even to establish the low threshold standard necessary to invoke the grant of leave to deliver the proposed counterclaim.
I agree with Muir J that the appeal should be dismissed with costs.
MUIR J: The appellants, who are the first and second defendants in the action, appeal against a decision by a chamber judge refusing an application by the appellants for leave to deliver a counterclaim. Rule 179 of the Uniform Civil Procedure Rules 1999 (Qld) relevantly provides that a counterclaim “must be included in the same document and served within the same time as the defence”. The defence was filed and served on 1 February 2002 and the application for leave to deliver the proposed amended defence and counterclaim was made on 14 November 2002.
Leave was refused on the basis that the claims sought to be advanced in the counterclaim had no prospects of success and because one of the claims was not made against the plaintiff (the first respondent to the appeal), thus infringing the requirement of r 178(1) that the plaintiff be a party to the counterclaim.
Summary of allegations in the statement of claim and defence
The following summary of the allegations in the statement of claim and defence provides a useful starting point for an understanding of the issues raised in the pleadings and proposed pleadings.
The first defendant leased premises in what is known as the Brunswick Centre from Petrie Point Pty Ltd, the second respondent.
For convenience, I will refer to Petrie Point Pty Ltd as “the Lessor”, the first defendant as “the Lessee” and the second defendants as “the Guarantors”. The first defendant and the second defendants will be referred to collectively as the appellants.
By a deed dated 27 April 1995, the Guarantors agreed with the Lessor to be liable for the performance by the Lessee of its obligations under the lease and to indemnify the Lessor in respect of any damage incurred by the Lessor in consequence of any breach by the Lessee of such obligations.
The Lessor assigned the benefit of the lease and of the guarantee to the plaintiff.1 In breach of its obligations under the lease, the Lessee failed to pay rent, promotion fund contributions and interest totalling $300,132.06. Furthermore, the Lessee abandoned the premises and thereby repudiated the lease.
On 1 July 2000 the plaintiff re-entered the premises and thereby elected to accept the Lessee’s repudiation and termination of the lease. The plaintiff demanded that the Guarantors pay the moneys owing by the Lessee under the lease. Failure to meet the demand is not alleged but that may be overlooked for present purposes.
The plaintiff claims against the appellants moneys payable under the lease and damages.
In their defence the appellants, amongst other matters, allege the following. They were induced not to exercise a contractual right to terminate an agreement for lease, which preceded the lease, in reliance on misrepresentations made by or on behalf of the Lessor. The plaintiff was aware (as a result of disclosure made in the instrument under which it acquired the Lessor’s interests under the lease) of the nature and details of the Lessee’s allegations of misrepresentation and that the Lessee had surrendered possession “on the basis of those assertions”. The plaintiff did not take “any action in relation to the Lessee’s surrender” of the demised premises causing the Lessee to assume that the plaintiff had agreed to a mutual surrender of the lease.
On the basis of such assumption the Lessee did not pursue any claim under the Trade Practices Act 1974 (Cth) (“TPA or the Act”) against the Lessor or its director Angus Johnson, the third respondent, and any claim for such relief is now statute-barred. In the premises, the plaintiff is estopped from pursuing its claim against the appellants.
The proposed counterclaim
1.Pursuant to s 80 of the TPA, against the assignee an injunction preventing it from enforcing against the Lessee the rights and liabilities alleged by it in these proceedings to have arisen under the lease.
2.Pursuant to s 80 of the TPA, against the plaintiff an injunction preventing it from enforcing against the Guarantors the rights and liabilities alleged by it in these proceedings to have arisen under the deed of guarantee.
3.Pursuant to s 80 of the TPA, against the Lessor and Mr Johnson an injunction preventing either or both of them from asserting any other rights or entitlements against the Lessee and the Guarantors under the lease and/or deed of guarantee.
4.Pursuant to s 87(1) of the TPA, as against the Lessor and Mr Johnson, declarations that:
(a) the lease was void as of 1 October 1998; and
(b) by virtue of (a), the assignment by the Lessor to the plaintiff of the former’s interest in the Lease and the Deed of Guarantee was ineffectual as a matter of law.
5.Pursuant to s 80, as against the Lessor, an injunction preventing it from asserting any rights against the appellants said to have arisen by virtue of such assignment.
6.Pursuant to s 87(1) of the TPA, as against the Lessor and Mr Johnson, a declaration that their conduct was misleading or deceptive or likely to mislead or deceive within the meaning of s 52 of the TPA.
7.Pursuant to s 87(1) of the TPA, as against Mr Johnson a declaration that he was knowingly concerned in the conduct.
9.Further or in the alternative, pursuant to 1 to 3, 5 and/or 8, pursuant to s 80 or s 87(1) of the TPA, as against the Lessor and Mr Johnson an order that they indemnify the appellants to the extent of their respective liabilities, if any, found to be owed to the plaintiff in the proceedings commenced by it against the appellants.
10.As against the Lessor and Mr Johnson such further or other order or orders pursuant to s 87(1) of the TPA as to the court may seem appropriate.
11.Further or in the alternative, as against the Lessor and Mr Johnson, damages for negligence representing:
(a) The amounts identified in attachment A to the proposed counterclaim;
(b) Alternatively to 1 to 9, for the amount claimed by the plaintiff against the appellants in these proceedings.
Interest.
Costs.
The central issue at first instance
“(1)Subject to subsections (1A), (1AAA) and (1B), where, on the application of the Commission or any other person, the Court is satisfied that a person has engaged, or is proposing to engage, in conduct that constitutes or would constitute:
(a)a contravention of any of the following provisions:
(i) a provision of Part IV, IVA, IVB, V or VC; (ii) section 75AU or 75AYA;
(b) attempting to contravene such a provision;
(c) aiding, abetting, counselling or procuring a person to contravene such a provision;
(d) inducing, or attempting to induce, whether by threats, promises or otherwise, a person to contravene such a provision;
(e) being in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision; or
(f) conspiring with others to contravene such a provision;
the Court may grant an injunction in such terms as the Court determines to be appropriate.”
…
(4)The power of the Court to grant an injunction restraining a person from engaging in conduct may be exercised:
(a)whether or not it appears to the Court that the person intends to engage again, or to continue to engage, in conduct of that kind;
(b) whether or not the person has previously engaged in conduct of that kind; and
(c) whether or not there is an imminent danger of substantial damage to any person if the first-mentioned person engages in conduct of that kind.”
The contentions of the Lessor and Mr Johnson
It is conceded that, after a 1983 amendment to the Act, s 80(1), if read literally, was no longer confined to the making of orders against persons who had engaged in or participated in “contravening conduct”.
The wide discretion conferred by s 80, however, is confined by the scope and purpose of the Act which is “aimed at the protection of the public interest, through the prevention of anti-competitive conduct and the fair treatment of consumers”.
There must be a nexus between the actual or apprehended contravening conduct which “satisfies the pre-condition” just mentioned and the conduct the subject of the injunction. In other words, it is not permissible to exercise the power under s 80(1) to restrain conduct unrelated to the contravention of the Act which enlivens the court’s powers under the section.
The granting of an injunction against the plaintiff is outside the scope and purpose of the Act as the plaintiff is itself a consumer and the effect of the injunction would be to place on the plaintiff, which is innocent of any contravention of the Act, the burden of relieving the Lessor from the consequences of its conduct. The plaintiff’s knowledge of the allegations made by the appellants is irrelevant. The Act deals with statutory rights and remedies and the acquisition of rights against the consumer, with knowledge of the unfair treatment of that consumer by another, is not activity proscribed or even regulated by the Act.
There is no relevant nexus as the only relationship between the alleged contravention of the Act by the Lessor and the grant of the injunction is that the grant of the injunction would relieve the Lessee of some of the consequences of its reliance on the contravening conduct (ie, its continuing liability under the lease). That is an insufficient relationship to make it “appropriate” to grant the injunction in the absence of an allegation that the plaintiff participated in the Lessor’s contravening conduct or, unless restrained, would itself engage in a contravention of the Act associated with or in continuation of the Lessor’s conduct.
As the effect of injunctions, if granted, would be to make orders preventing or reducing the loss to the Lessee suffered by reason of the Lessor’s alleged contravention of the Act, the orders come within “the ground covered by ss 87(1) and 87(1A)”. Such orders, however, could not be made under those provisions as they are restricted to orders “… against the person who engaged in the conduct or a person who was involved in the contravention …”. From this, it is to be concluded that s 80 does not enable the making of orders “restraining A from enforcing rights under a contract, so as to prevent or reduce loss to B suffered by reason of a contravention of the Act, where A did not engage or participate in the conduct which involved the contravention, such that the orders could not be made under s 87(1) or s 87(1A)”.
The contentions of the plaintiff
The plaintiff advances the following additional reasons why s 80(1) should be construed as permitting an injunction only against a person who has engaged or proposes to engage in conduct of the kind specified in paragraphs 80(1)(a) to (f) of the Act.
A natural reading of s 80(1) which states that ‘the Court may grant an injunction … where the Court is satisfied that a person has engaged, or is proposing to engage, in conduct” of the specified kind requires the conclusion that the provision permits injunctions to be granted only against a person who has engaged, or who proposes to engage, in conduct of the kind specified in the provision.
The construction favoured by the appellants leaves no basis for limiting the class of persons against whom an injunction may be granted as the word “appropriate” in the section merely applies to the terms on which an injunction may be granted.
The appellants' construction renders s 80(1)(e) superfluous. To prove that a person is party to a contravention, it is necessary to prove a contravention by another person. If the only purpose of paragraphs 80(1)(a) to (f) is to enliven the court’s jurisdiction to grant an injunction, it would always be sufficient to prove a contravention under s 80(1)(a) and never necessary to prove that someone else was a party to it under s 80(1)(e). The same reasoning applies to the words “aiding” and “abetting” in s 80(1)(c) and to the word “inducing” in s 80(1)(d).
Section 80(4)(b) permits an injunction to be granted against a person whether or not the person has previously engaged in the conduct to be restrained but s 80(4)(a), which permits an injunction to be granted against a person whether or not the person intends to engage in the conduct to be restrained in the future, only applies to a person who has previously engaged in that conduct. Section 80(4) thus does not permit an injunction to be granted against a person who neither has previously engaged nor proposes to engage in the conduct to be restrained.
The appellants’ contentions
There is no express or implicit limitation in the language of s 80(1) such as that for which the other parties contend. That is made plain, inter alia, by Truth About Motorways v Macquarie Infrastructure Investment Management.2
Sections 80 and 87 do not provide “mutual and dependent remedies” but have “a separate and independent existence”. That may be seen, inter alia, from the fact that orders under s 80 may be applied for “by any other person” whereas remedies under s 87(1A) are available only to persons who have suffered loss and damage or to the Trade Practices Commission. It thus does not follow that a restriction on the power of the court contained in s 87 should be implied in s 80. If there is validity in the plaintiff’s “scope and purpose arguments”, it is met by the fact that an application for injunctive relief under s 80 is one for protection of the public interest.3 The public interest sought to be protected is the interest in preventing victims of misleading and deceptive conduct from being exposed to liabilities in consequence of that conduct. That the injunction sought will protect also the incidental or collateral private interests of the appellants does not detract from its public interest utility.4 In this case, the public interest is particularly relevant where the person, who is actually seeking to enforce the liability consequent upon the misleading and deceptive conduct, acquired the ‘right’ to enforce the liability with notice of allegations concerning the conduct and of the injured party’s intention to claim.
The construction of section 80(1)
As the above account of the competing contentions in this matter makes plain, the counterclaim raises a difficult question of construction. Plainly, if s 80(1) is construed literally, there is power under it to grant injunctive relief against persons other than those identified in the subsection.
In Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Limited,5 Gleeson CJ and McHugh J observed –
“It has been established for more than 20 years that s 80 means what it says. In Phelps v Western Mining Corporation Ltd (1978) 33 FLR 327; 20 ALR 183 the Full Court of the Federal Court rejected an argument that the words ‘any other person’ in s 80 should be read down as meaning that only persons who are affected by a contravention of Pt V could seek relief under s 80.” (emphasis added)
Their Honours then went on to refer to discussion in judgments in Phelps of the meaning of the phrase “any other person”. But as Senior Counsel for the Lessor and Mr Johnson pointed out, the observations in Truth About Motorways Pty Ltd relied on by the appellants were directed to the meaning of a phrase contained in the section. Plainly, their Honours did not have in mind the question now under consideration.
The following observations in the joint judgment in Project Blue Sky Inc v Australian Broadcasting Authority6 and many other authorities show that statutory interpretation is not merely a linguistic or semantic exercise and that statutory provisions cannot be looked at in isolation –
“The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. See Taylor v Public Service Board (NSW) (1976) 137 CLR 208 at 213, per Barwick CJ. The meaning of the provision must be determined ‘by reference to the language of the instrument viewed as a whole’. In Commissioner for Railways (NSW) v Agalianos7 Dixon CJ pointed out that ‘the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed’. Thus, the process of construction must always begin by examining the context of the provision that is being construed.
A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals.” (citations omitted)
“Interpretation is not a science. It is an art. It is an exercise involving the making of choices between feasible interpretations. Structural arguments must be considered. Competing consequentialist arguments must be taken into account. Broader policy considerations may be relevant. Educated intuition may play a larger role than an examination of niceties of textual analysis. The judge’s general philosophy may play a role. Ultimately, however, a judge must be guided by external standards in making his choice of the best contextual interpretation. He must put aside his subjective views and consider the matter from the point of view of the reasonable person.
…
It will be rare for a statute to have one obvious meaning which can be determined without taking into account the context of the legislation.”
To my mind it would be surprising if s 80(1) contemplated the granting of an injunction against a person other than one who had engaged in proscribed conduct. Absent that limitation, the section would sanction orders against persons against whom no cause of action arising under the Act had been alleged, let alone established. Also, as the respondents’ arguments point out, it would be odd if a plaintiff, who could not obtain orders against a person under s 87, because that person was not one who had engaged in or been involved in a contravention of the Act, could achieve the same practical result by obtaining an order under s 80(1).
The appellants' argument placed emphasis on the legislative history of the two sections under consideration.
“Section 80 was originally confined to granting injunctions restraining a person from engaging in conduct that constituted or would constitute a contravention of a relevant section of the Act.9 Section 87 originally provided (so far as presently relevant) that the Court may, in addition to granting an injunction under s.80, ‘… make such other orders as it thinks fit to redress injury to persons caused by any conduct to which the proceeding relates …’ (underlining added). There was no restriction on the persons against whom s.87 orders could be made. By a 1977 amendment10 s.87 was amended so as to restrict the orders that could be made to orders against ‘the person who engaged in the conduct (in contravention of the Act) or a person who was involved in the contravention …’. Subsequently, in 1983, s.80 was amended to broaden the Court’s powers, as mentioned above.”
It was pointed out that there is no suggestion in the explanatory memorandum accompanying the Bill for the Act which made the 1983 amendments to s 80, that the amendment was intended to confer the power removed from s 87 to make orders against a person who had not contravened or been a party to a contravention. It is argued that the appellants’ interpretation infringes the principle that where a statute confers both “a general power, not subject to limitations and qualifications, and a special power, subject to limitations and qualifications, the general power cannot be exercised to do that which is the subject of the special power”.11
The primary judge did not find it necessary to decide this point in order to determine the matter at first instance and neither do I. Although I have sympathy with the more restrictive construction of s 80(1) urged by the respondents, I think it desirable that resolution of the point should await a more suitable factual platform. The primary judge based her determination on the lack of nexus between the injunction sought and the contravening conduct. Additionally, she concluded that the application must fail as the plaintiff could not be made, legitimately, a party to the counterclaim.
I accept that no relevant nexus has been shown and that it is necessary to demonstrate one.
In South Sydney District Rugby League Football Club Ltd v News Ltd,12 Merkel J, with whose reasons Moore J relevantly agreed, said –
“Section 80 of the Act confers power upon the Court to grant an injunction where it is satisfied that a person is engaging, or proposing to engage, in conduct that constitutes or would constitute, inter alia, a contravention of the Act. As was explained in ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248, s 80 confers a very broad discretion on the Court which, although devoid of traditional equitable constraints, must be exercised judicially, appropriately and consistently with the policy of the Act: see Lockhart J at 256, Gummow J at 267 and French J at 268. See also Australian Competition and Consumer Commission v Z-Tek Computer Pty Ltd (1997) 78 FCR 197 at 203-204.”
“In summary, in determining whether an injunction under s 80 is ‘appropriate’ there are, at least, three limitations on the Court's power.
First, the power is confined by reference to the scope and purpose of the TPA and in particular s 80. It is within the scope and purpose of s 80 to grant injunctive relief which is designed to prevent a repetition of the conduct for which the relief is sought.
Secondly there is a contextual limitation within s 80 itself. As the jurisdiction to grant an injunction is enlivened by an alleged or actual contravention of a provision of Part IV, IVA or V of the TPA, there must be a sufficient nexus or relationship between the contravention and the injunction granted. It is that nexus or relationship that enables determination by the Court of whether the injunction sought is ‘appropriate’.
Thirdly, there is the constitutional limitation which requires that the injunction granted be related to the case or controversy the subject of the proceeding.”
A similar approach has been taken in other decisions in the Federal Court.14
I am unable to accept that a sufficient nexus between the alleged conduct contravening the Act and the injunction exists merely because of the matters pleaded in the defence or referred to in paragraph [44] hereof. Those matters disclose no more than involvement by the plaintiff in a commonplace commercial transaction quite distinct from any conduct alleged against the Lessor and Mr Johnson.
I am of the view also that the orders were appropriate by virtue of the fact that, even if the appellants have a claim which is open to them in strict legal theory, its prospects of success are so minimal that there is no serious issue to be tried. To put it another way, the claim against the plaintiff in the counterclaim does not meet the tests propounded by Barwick CJ in General Steel Industries v Commissioner for Railways15. Plainly, that was a matter relevant to the exercise of the primary judge’s discretion.
It will be recalled that there is no allegation that the plaintiff knew of any breach by the Lessor of the provisions of the Act. No such breach has been established, even now. The plaintiff knew of the existence of the appellant’s allegations and of threatened litigation in that regard. It is not alleged that the Lessor and the plaintiff were not at arms length or that the plaintiff had any purpose or intention of assisting the Lessor or of interfering with the Lessee’s claims or rights against the Lessor.
Acceptance of the appellants’ argument would result in introducing into commercial dealings a substantial and hitherto uncontemplated hazard – the prospect that the acquirer of real or personal property might take it subject to the rights of third parties (not asserting any proprietary interest) with claims under the Act against the assignor/disposor.
It has long been established under the Torrens system that there is no fraud on the part of a registered proprietor in merely acquiring title with notice of an existing unregistered interest or in taking a transfer with knowledge that its registration will defeat such an interest.16 Such conduct has, for generations, not been deemed such as to attract legal sanction. Here, the appellants do not claim an interest in the lease or the leased property. On the contrary, the Lessee admits that it abandoned its interest as lessee. I refer to these matters, not in order to suggest a limitation on the powers conferred by s 80(1) but to demonstrate the unlikelihood that a court would grant an injunction against the plaintiff of the nature of that claimed in the counterclaim, assuming there was power to do so.
The pleaded facts in relation to how the plaintiff came to stand in the position of lessor and took the benefit of the guarantee are somewhat more complicated than this but they are not contentious and it is not necessary, for present purposes, to explain them. ↩
(2000) 200 CLR 591, 601 [13]. ↩
Truth About Motorways at 602 [17]. ↩
Truth About Motorways at 602 [17]. ↩
(2000) 200 CLR 591 at 601. ↩
(1998) 194 CLR 355 at 381-382. ↩
(1955) 92 CLR 390 at 397. ↩
“The Intractable Problem of the Interpretation of Legal Texts”, The John Lehane Memorial Lecture 2002 given by Lord Steyn. ↩
This was the form of s 80 being considered in Thomson Australian Holdings v TPC (1981) 148 CLR 150. ↩
Trade Practices Act Amendment Act 1977, s 52. ↩
Leon Fink Holdings Pty Ltd v Australian Film Commission (1979) 141 CLR 672 at 678 and Medibank Private Ltd v Cassidy [2002] ATPR 41-895. ↩
(2001) 111 FCR 456.
Abacus Funds Management Ltd
Nethurst P/L & Ors [2003] QCA 423
(1999) 161 ALR 79
(1988) 164 CLR 604
(1964) 112 CLR 125
(1998) 194 CLR 355
(2001) 111 FCR 456
(1999) 200 CLR 591
(1978) 33 FLR 327
(1976) 137 CLR 208
(1992) 38 FCR 248
(1997) 78 FCR 197
(2000) 200 CLR 591
(1955) 92 CLR 390
(1981) 148 CLR 150
(1979) 141 CLR 672
Appeal dismissed with costs.
On the pleaded case, I can see no sensible justification for the granting of injunctive relief against the plaintiff.
It was not argued on behalf of the appellants that if the claims against the plaintiff were not to be allowed the addition of the counterclaim should nevertheless be permitted. Accordingly, I would dismiss the appeal with costs.
HOLMES J: I agree with the reasons for judgment of Muir J and the order he proposes.
(1997) 78 FCR 197 at 203-204. ↩
Australian Competition & Consumer Commission v Office Link (Aust) Pty Ltd [1997] ATPR 41-598 at 44,261; Australian Competition & Consumer Commission v Real Estate Institute of Western Australia Inc (1999) 161 ALR 79 at 87-88 and Australian Competition & Consumer Commission v Virgin Mobile Australia [2002] FCA 1548 at para 19. ↩
(1964) 112 CLR 125 at 129. ↩
Bahr v Nicolay (No 2) (1988) 164 CLR 604 at 613. ↩