Cassidy v Medibank Private Limited

The ACCC's Application 3 By the further amended application and the further amended statement of claim the applicant claims that the respondent has contravened ss 12DA, 12DB and 12DF of the ASIC Act. Those sections provide, so far as is relevant; s 12DA Misleading or deceptive conduct (1) A corporation must not, in trade or commerce, engage in conduct in relation to financial services that is misleading or deceptive or is likely to mislead or deceive. … ... ... ... ... s 12DB False or misleading representations (1) A corporation must not, in trade or commerce, in connection with the supply or possible supply of financial services, or in connection with the promotion by any means of the supply or use of financial services: (a) falsely represent that services are of a particular standard, quality, value or grade; or (b) falsely represent that a particular person has agreed to acquire services; or (c) represent that services have sponsorship, approval, performance characteristics, uses or benefits they do not have; or (d) represent that the corporation has a sponsorship, approval or affiliation it does not have; or (e) make a false or misleading representation with respect to the price of services; or (f) make a false or misleading representation concerning the need for any services; or (g) make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy. (2) This section does not apply to dealings in securities. s 12DF Certain misleading conduct in relation to financial services A corporation must not, in trade or commerce, engage in conduct that is liable to mislead the public as to the nature, the characteristics, the suitability for their purpose or the quantity of any financial services. 4 Specifically, the applicant claims that Medibank misrepresented in its advertisements that all waiting periods for its health insurance products would be waived for persons who changed health insurers. The advertisements were also said to be misleading in that they claimed that persons changing insurers would receive 30 days free insurance without any conditions. In addition, Medibank, by means of television advertisements, information in brochures and on its website and statements by operators at its call centres, claimed that the premiums for its insurance product known as PackagePLUS would not increase during 2000. However, the applicant states that these representations were misleading or deceptive given that the rates did increase after 1 July 2000. As a result, the applicant has listed a number of claims for relief, seeking declarations, orders and injunctions from this Court.

Respondent's Submissions 5 In support of the motion, Medibank submits that the applicant's pleadings offend against O 20 r 2 or O 11 r 16 which, so far as is relevant, provide; Order 20, Rule 2 (1) Where in any proceeding it appears to the Court that in relation to the proceeding generally or in relation to any claim for relief in the proceeding: (a) no reasonable cause of action is disclosed; (b) the proceeding is frivolous or vexatious; or (c) the proceeding is an abuse of the process of the Court; the Court may order that the proceeding be stayed or dismissed generally or in relation to any claim for relief in the proceeding. … ... ... ... ... Order 11, Rule 16 Where a pleading: (a) discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading; (b) has a tendency to cause prejudice, embarrassment or delay in the proceeding; or (c) is otherwise an abuse of the process of the Court; the Court may at any stage of the proceeding order that the whole or any partof the pleading be struck out. 6 Counsel for the applicant has pointed out that O 1 r 4 specifically excludes from the definition of "pleading" as used in O 11 r 16 an "application, notice of motion or affidavit". As the applicant's statement of claim is no longer attacked by Medibank, the applicant submits that O 11 r 16 cannot be used to support a motion to strike out the further amended application. The applicant also contends that O 20 r 2 should be used with great caution and only sparingly. In particular, reference was made to the judgment of the Full Court of this Court in Australian Building Industries Pty Ltd v Stramit Corporation Limited [1997] FCA 1318 (which applied the judgment of Dixon J in Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91 and 92, to Order 20, Rule 2 of the Federal Court Rules). The Full Court there held, at p 36: "A proceeding should not be dismissed summarily merely on the ground that it appears at the early stage of the hearing of the motion brought for that purpose, to advance a highly implausible claim which will probably fail." The applicant denies that his claims are implausible, arguing that, because it is premature to say what orders the Court will make, it would be inappropriate to strike out at this stage pars 10 or 11 of the further amended application.

Paragraphs 10 and 11 of the further amended application. 7 Medibank has directed its attack first at the following paragraphs of the prayer for relief in the further amended application: 10. An order directing the Respondent to: (a) write to all persons who have transferred from another health insurance provider to the Respondent in the period between 13 August 2000 and 10 September 2000 (inclusive) informing them that: (i) the Waiting Period Representation and the 30 Days Free Cover Representation … were misleading and/or deceptive or were likely to have been misleading and/or deceptive to consumers; (ii) the Respondent will compensate those persons who were mislead and/or deceived and who suffered loss or damage by this, according to the nature of the loss or damage by: (x) waiving all waiting periods; and/or (y) granting 30 days free cover without any conditions in respect of the Respondent's Health Insurance Products…; and (iii) such compensation will be made after confirmation of the identity of such persons and of the loss or damage by a procedure to be agreed between the Applicant and the Respondent within a time fixed by the Court, or in default the procedure to be determined by the Court; (b) upon confirmation of the identity of the persons to be compensated and of the loss or damage by a procedure to be agreed between the Applicant and the Respondent within 14 days hereof, or in default to be determined by the Court, make the waiver and/or grant the free cover referred to above. 11. An order directing the Respondent to: (a) write to all persons who have entered into agreements to purchase the Respondent's PackagePLUS Products … in the period between 1 March 2000 and 30 June 2000 (inclusive) informing them that: (i) the PackagePLUS Premium Representation, the Call Centre Premium Representation, the Website and Brochure Representations and the No Rate Increases Representation … were misleading and/or deceptive or were likely to have been misleading and/or deceptive to consumers; and (ii) all persons who purchased the PackagePLUS Products … on or before 30 June 2000 who were mislead and/or deceived and who suffered loss or damage by this will be compensated by the Respondent according to the nature of the loss or damage by receiving a refund of, or a credit for, the difference between the pre-1 July 2000 premium or rate and the post-1 July 2000 premium or the rate for the period 1 July 2000 up to 31 December 2000; and (iii) such compensation will be made after confirmation of the identity of such persons and of the loss or damage by a procedure to be agreed between the Applicant and the Respondent within a time fixed by the Court, or in default the procedure to be determined by the Court; (b) upon confirmation of the identity of the persons to be compensated and of the loss or damage by a procedure to be agreed between the Applicant and the Respondent within 14 days hereof, or in default to be determined by the Court, make the payment of the refund or give the credit referred to above.

Respondent's Submissions 8 The impugned paragraphs seek orders requiring Medibank to bestow on certain classes of persons the benefits or advantages which the applicant alleges were the subject of representations and to require Medibank to identify, locate and communicate with those persons. The respondent submits that such compensatory orders could not properly be made as the exercise of the Court's powers to grant compensatory relief is contingent upon its first finding that the person bringing the proceeding, or the person on whose behalf the proceeding is brought, has suffered or is likely to suffer loss and damage by the conduct of the respondent. In this case, it is contended, the application is not brought by the ACCC on behalf of any other person or persons. Counsel for Medibank submit that the further amended application seeks orders for which no statutory foundation exists under the ASIC Act or the Federal Court of Australia Act 1976. Alternatively, it is contended, the application seeks orders that the Court would never make, or would not make on the facts pleaded if those facts were established. 9 The argument on behalf of Medibank points out that the jurisdiction of this Court is exclusively conferred by s 12GJ of the ASIC Act, and the power to enforce its orders and grant remedies is to be found in ss 12GA - 12GO. As sub-pars 10(b) and 11(b) of the applicant's prayer for relief are compensatory in character they cannot be supported by s 12GD of the ASIC Act which gives the Court power to grant injunctions, or by s 12GE which authorises orders for corrective advertising. Rather, support for compensatory orders, if they can be made at all, must be found in s 12GF or s 12GM of the ASIC Act. 10 Section 12GD of the ASIC Act, in part, provides: (1) If, on the application of the Minister, 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 a provision of this Division; or (b) attempting to contravene such a provision; or (c) aiding, abetting, counselling or procuring a person to contravene such a provision; or (d) inducing, or attempting to induce, whether by threats, promises or otherwise, a person to contravene such a provision; or (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. Section 12GE provides: Without limiting the generality of section 12GD, if, on the application of the Minister or the Commission, the Court is satisfied that a person has engaged in conduct constituting a contravention of a provision of Subdivision D (sections 12DA to 12DN), the Court may make either or both of the following orders: (a) an order requiring that person or a person involved in the contravention to disclose to the public, to a particular person or to persons included in a particular class of persons, in such manner as is specified in the order, such information, or information of such a kind, as is so specified, being information that is in the possession of the person to whom the order is directed or to which that person has access; (b) an order requiring that person or a person involved in the contravention to publish, at his or her own expense, in a manner and at times specified in the order, advertisements the terms of which are specified in, or are to be determined in accordance with, the order. Section 12GF(1) provides: A person who suffers loss or damage by conduct of another person that contravenes a provision of Subdivision D or E (sections 12DA to 12ED) may recover the amount of the loss or damage by action against that other person involved in the contravention. 11 Counsel for Medibank also point out that sub-ss 12GM(2) and (3) of the ASIC Act contemplate circumstances in which the ACCC may bring a representative action on behalf of a person or persons to recover compensation for their benefit, but require the consent in writing of such persons before the commencement of the application. In particular, s 12GM(2) provides: Without limiting the generality of section 12GD, the Court may, on the application of: (a) a person who has suffered, or is likely to suffer, loss or damage by conduct of another person that was engaged in contravention of a provision of this Division; or (b) the Commission in accordance with subsection (3) on behalf of such a person or persons; make such order or orders as the Court thinks appropriate against the person who engaged in the conduct ... ... ... ... ... Section 12GM(3) provides: If, in a proceeding instituted … by the Commission or the Minister under s 12GD, a person is found to have engaged in conduct in contravention of this Division, the Commission may make an application under subsection (2) on behalf of one or more persons identified in the application who have suffered, or are likely to suffer, loss or damage by the conduct. The Commission must not make such an application except with the consent in writing given before the application is made by the person, or by each of the persons, on whose behalf the application is made. 12 On behalf of Medibank it is submitted that to obtain relief under either s 12GF or s 12GM, an applicant must, standing alone, be able to establish all the essential ingredients of the pleaded cause of action. This entails, so the argument goes, that an applicant must show either that he or she suffered, or would be likely to suffer, loss and damage, or that the proceeding has been brought in a representative capacity in compliance with the prerequisites found in the statute. However, in this case, the respondent contends, the applicant has not brought the application on behalf of any person or persons and it is not alleged that the ACCC or any other person or persons has suffered loss or damage as a consequence of the alleged representations. It is asserted merely that the representations were made and they were misleading. Counsel for Medibank submit that this does not disclose a basis upon which the Court could make the orders sought in paragraphs 10 or 11. Furthermore, the respondent argues that the applicant is attempting to circumvent the constraints imposed by s 12GM, by erecting a compensatory regime solely in reliance upon s 12GD, which is designed to authorise injunctions restraining continuing or future contraventions of the relevant provisions. On this argument, the only provision in the relevant division (Div 2 of Pt 2) by which the ACCC is entitled to bring a representative action for compensation for persons suffering or likely to suffer from loss or damage by reason of the contravening conduct is s 12GM. Thus, s 12GD should not be interpreted as intended to provide a compensatory mechanism different from that specifically provided for actual or authorisedly represented applicants by s 12GM. 13 Counsel for Medibank also argued in support of the motion that pars 10 and 11 of the further amended application, by seeking an order that the respondent write to all persons who transferred their health insurance or entered into agreements to purchase the PackagePLUS Products during a specified period, anticipates a finding that contravening conduct has occurred for which Medibank is obliged to make compensation. By requiring what is, in effect, specific performance of the alleged representation by compelling Medibank to waive all waiting periods, and grant 30 days free health cover without any conditions as well as paying compensation, the paragraphs proceed from the premise that, regardless of the actual loss suffered by various persons who have yet to be identified, the nature and extent of loss contemplated by the ASIC Act is presently quantifiable. 14 Medibank also contends that the relief sought in pars 10 and 11 is not a proper reflection of the loss which may be suffered. The relief sought requires it to "make good" the representations to all persons who relied on one or more of them, placing them in the position they would have occupied had their contracts of insurance contained the represented benefits. That relief, on this argument, is essentially that obtainable for breach of a contractual promise, whereas this is a case of alleged misrepresentation, in which no question of loss of a contractual promise or bargain can arise; see Marks v GIO Australia Holdings Limited (1998) 196 CLR 494 at 502-3 per Gaudron J. The measure of damages suffered as a result of misleading and deceptive conduct has generally been assimilated to that in tort; see Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 at 14. Thus, in this case it is necessary to determine whether, if the alleged representations had not been made, the persons who relied on the representations would not have chosen to transfer their insurance to Medibank or to the particular product which it promoted when making the representation. Appropriate compensation in such cases, in Medibank's submission, would be that required to restore the person who allegedly suffered the loss and damage to the position in which he or she would have been but for the contravening conduct; see Marks v GIO Australia Holdings Limited (supra)at 514 per McHugh, Hayne and Callinan JJ. To make orders of the kind contemplated by either or both pars 10(b) and 11(b) of the further amended application would go beyond restoring the unidentified victims to the position which they would have occupied but for the alleged misrepresentation. Before proper compensatory orders could be made, so the argument went, there would have to be an inquiry into the circumstances of each alleged victim. 15 Medibank further contends that the relief claimed is not something that the Court would ever grant where no allegation of loss and damage has been made in the amended statement of claim, and where matters essential to the quantification of loss would not have been agitated. To require it to write to persons not parties to the proceeding informing them that Medibank will compensate them by honouring representations made, such compensation to be calculated by a procedure to be agreed between the ACCC and Medibank Private, is not, and could not be, a form of order that the Court would make. Reference was made to two cases in which orders have been made for refunds of money received by the respondent, namely Australian Competition and Consumer Commission v World Netsafe Pty Ltd [2000] FCA 1827 ("Netsafe") and Australian Competition and Consumer Commission v MHG Plastic Industries Pty Ltd [1999] FCA 970 ("MHG Plastic"). However, in the former case, it was pointed out, the order requiring the refund of money was only one of a considerable number and was unopposed by the respondent. Moreover, in that case, unlike the present, the "victims" were identified. The last mentioned judgment was reversed on appeal and so Medibank submits, is no longer good law. 16 A related contention advanced on behalf of Medibank is that the Court would never make an order requiring a respondent to seek out, in effect on behalf of the ACCC, persons who have potential claims against that respondent so that such claims can be explored by the ACCC and possibly made the subject of an order for general compensation, in circumstances where issues such as reliance and the quantum of loss suffered have not been investigated. Moreover, the effect of the orders sought would be to compel Medibank to try to agree with the ACCC on the nature and extent of the loss and damage suffered by potential claimants. In principle, it is for the Court to determine, in each individual case, whether loss has been suffered, and if so, the nature and extent of that loss. Therefore, Counsel for Medibank argue that the Court "cannot and would not make an order compelling Medibank Private to agree with the ACCC upon that which it is not the function of the Court to determine."

Applicant's Submissions 17 The applicant first submits that the respondent's reliance on s 12GM of the ASIC Act as limiting the application of ss 12GD and 12GE is misconceived, as s 12GM(2) is prefaced by the words "[w]ithout limiting the generality of section 12GD". Section 12GE is also expressed to take effect without limiting the generality of s 12GD. This, the applicant contends, demonstrates that s 12GE (the corrective advertising provision) is an illustration of an order that may be made under s 12GD (injunctive power), so that the power conferred by s 12GD is not circumscribed by the power to order corrective advertising in s 12GE. By parity of reasoning s 12GM is to be construed as likewise not cutting down the grant of power in s 12GD. In so construing the statute, Counsel for the applicant reminded me of these observations of Gummow J in Marks v GIO Australia Holdings Limited (supra), at 528; The Trade Practices Act is a fundamental piece of remedial and protective legislation which gives effect to matters of high public policy. It is to be construed so as to give the fullest relief which the fair meaning of the language will allow. 18 The applicant contends that, as s 12GD(1) of the ASIC Act enables the Court to "grant an injunction in such terms as the Court determines to be appropriate", the Court will make such orders as are appropriate having regard to all of the evidence. Thus, it is incorrect and premature for the respondent to submit that the Court "would never make" orders of the kind in question. The applicant argues, by analogy with ss 80 and 80A of the Trade Practices Act which correspond with s 12GD and s 12GE of the ASIC Act, that these provisions are a sufficient basis for a mandatory injunction for corrective advertising and for orders for refunds of moneys paid. In particular, Counsel for the applicant points out that the grant of a statutory injunction, whilst informed by equitable principles, is not confined by them. In this respect reference was made to Cardile v Led Builders Pty Limited (1999) 198 CLR 380 where Gaudron, McHugh, Gummow and Callinan JJ said, at 394; The term "injunction" is used in numerous statutes to identity a particular species of order, the making of which the law in question provides as part of a new regulatory or other regime, which may be supported by penal provisions. Notable examples in statutes presently in force nationally are found in s 80 of the Trade Practices Act 1974 (Cth) … These provisions empower the courts to give a remedy in many cases where none would have been available in a court of equity in the exercise of its jurisdiction, whether to protect the legal (including statutory) or equitable rights of the plaintiff… In these situations, the term "injunction" takes its content from the provisions of the particular statute in question. Kirby J added, at 423: There is a further consideration which extends even more widely the powers of the Federal Court to make orders "appropriate" in relation to matters before it. This is the general principle that statutory provisions, conferring jurisdiction or power on a court, are not construed as subject to any limitation which is not strictly required by their language and purpose. Where a court is endowed with a particular jurisdiction, it enjoys the powers necessary to enable it to act effectively within that jurisdiction. Its powers are not ordinarily construed as restricted to defined and closed categories. This is because of the infinite variety of circumstances which may come before a court and require "appropriate" orders. 19 As a guide to the range of appropriate orders under s 12GD of the ASIC Act (or s 80 of the Trade Practices Act) the applicant refers to Hospitals Contribution Fund of Australia v Switzerland Australia Health Fund Pty Ltd (1987) 78 ALR 483, where Morling J held, at 491; The final matter which arises for consideration is the appellant's contention that an order should not have been made requiring it to publish a corrective advertisement. It is submitted on its behalf that the trial judge did not have power to order it to publish a corrective advertisement. I think this submission is unsound. For the reasons given by Burchett J in Janssen Pharmaceutical Pty Ltd v Pfizer Pty Ltd (1986) ATPR 40-654 I think the court does have power, in an appropriate case, to order a person whose conduct has infringed s 52 of the Trade Practices Act to publish a correcting advertisement. 20 The applicant also relies on the orders made by Spender J in Netsafe and by Emmett J in MHG Plastic, where their Honours granted mandatory injunctions for corrective advertising and orders for refunds of moneys paid. Although acknowledging that MHG Plastics was reversed on appeal (see MHG Plastic Industries Pty Limited v Australian Competition and Consumer Commission [2000] FCA 1069), Mr Fajgenbaum QC who appeared with Ms Strong for the applicant pointed out that the appeal was on the factual findings rather than on the form of the remedies. 21 The applicant says that pars 10 and 11 of the prayer for relief contemplate refunds or credits only to those who can establish their loss, and the refunds or credits sought are of a similar legal character to the repayments ordered in Netsafe and MHG Plastic. The applicant contends that it is significant that in Netsafe there was neither a specific finding that the persons receiving the refunds had suffered loss or damage, nor any declaration or other order embodying a conclusion that those persons had suffered loss or damage. These paragraphs, the applicant submits, make provision for some type of inquiry as to loss or damage. Any possible compensation for this is only for persons "who were misled and/or deceived". It is thus premature to dismiss or stay a claim for such compensation at this point of the proceeding.

Paragraph 12 of the further amended application. 22 The respondent also seeks to strike out par 12 of the further amended application, pursuant to O 20 r 2 or O 11 r 16 of the Federal Court Rules. Paragraph 12 seeks an order that; The Respondent provide forthwith to the Applicant particulars of each person who: (a) transferred from another health insurance provider to the Respondent in the period between 13 August 2000 and 10 September 2000 (inclusive); (b) entered into an agreement to purchase the Respondent's PackagePLUS Products … in the period between 1 March 2000 and 30 June 2000 (inclusive) such particulars to include: (i) the name and address of each person; (ii) the date the person transferred or purchased as referred to above; (iii) the type of health insurance product selected; (iv) the method of payment for the product selected; (v) the amount and date of each payment made by each person up to 31 December 2000; (vi) whether the person applied to the Respondent for the transfer or purchase: (x) by means of the Respondent's website; (y) after telephoning a Call Centre operated by or on behalf of the Respondent; (z) after visiting a business premises operated by the Respondent. 23 It was contended by Mr Young QC who appeared with Mr S Marks for Medibank that the applicant is seeking relief which is unrelated to the substantive claims brought by it in the proceeding, which are for injunctions, declarations and corrective advertising. Paragraph 12 is said to be outside the parameters of these claims and, accordingly, also outside the ambit of the orders which the Court can frame for the purpose of giving any available relief. In any event, it is submitted, it would be contrary to the basic principles of procedural fairness to allow the applicant to use the proceeding to acquire information to assist it in the conduct of future damages claims on behalf of unidentified non-parties. Counsel for Medibank also relied, in relation to par 12, on the submissions which they had directed to pars 10 and 11. 24 The applicant contends that many of the particulars sought will be made available in discovery, and points out that particulars of the type sought were ordered in Netsafe, as they convey information which will assist in the making of restorative orders under s 12GD. Moreover, like the attacks on pars 10 and 11, the claim to strike out par 12 is said to be premature.

Paragraphs 13 and 14 of the further amended application. 25 The respondent also seeks an order that the relief claimed in pars 13 and 14 be struck out pursuant to O 11 r 16 of the Rules. Paragraphs 13 and 14 relevantly seek: 13. An order directing the Respondent to publish at its own cost advertisements in national daily newspapers correcting the Waiting Period Representation, the 30 Days Free Cover Representation, the Call Centre Premium Representation, the Website and Brochure Representations and the No Rate Increases Representation… 14. An order directing the Respondent to arrange for the screening at its own cost of advertisements on television correcting the PackagePLUS Premium Representation….. 26 The respondent claims that these paragraphs should be struck out as each of the representations relates only to premiums for PackagePLUS Products during the year 2000, and, accordingly, it can no longer be asserted after 1 January 2001 that corrective advertising is necessary or appropriate to cure any misapprehension in the mind of any person who, but for the corrective advertising, might act in reliance on the representation. The power of the Court under s 12GE is not to be used punitively; see Hospitals Contributions Fund of Australia v Switzerland Australia Health Fund Pty Ltd (supra) at 491; Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc (1999) 95 FCR 114 at 133, referring to the analogous s 80A(1)(b) of the Trade Practices Act 1974 (Cth). As well, the respondent submits that, as considerable time has elapsed since the alleged offending material was published, any person whose mind might have been swayed by the advertisements must already have made any decision whether or not to join Medibank Private. In these circumstances, the respondent submits, it is not now open to allege that the representations can continue to induce persons who might have been exposed to them to act in a particular way. There is therefore no proper purpose to be served in making such orders; see Hospitals Contributions Fund of Australia v Switzerland Australia Health Fund Pty Ltd (supra) at 492; Trade Practices Commission v Telstra Corporation Limited (1993) ATPR 41-256 at 41,457; Trade Practices Commission v Optus Communications Pty Ltd (1996) ATPR 41-478 at 41,896. Accordingly, the respondent submits that the Court would not make the orders sought and the paragraphs have a tendency to cause prejudice, embarrassment and delay in the proceedings and should be struck out pursuant to O 11 r 16. 27 The applicant reiterates that, as the respondent's attack on pars 13 and 14 is based only on O 11 r 16 of the Rules, and that rule is inapplicable to an application which, as distinct from a statement of claim, is not a "pleading" under that order. In any event, Tamberlin J in Australian Competition and Consumer Commission v On Clinic Australia Pty Limited (1996) ATPR 41-517 at 42,459, made it clear that "[t]here is no principle that any particular period is appropriate as a point beyond which corrective advertising is not warranted." Thus, as there is no time limit beyond which such advertising cannot be ordered, the applicant submits that the advertising, by bringing the misrepresentations to the attention of people who may have been misled with a view to their being able to make a claim, would undo the consequences of the misleading and deceptive conduct. Further, the application to strike out these paragraphs is also said to be premature for the reasons outlined earlier.

Reasons for Decision 28 I am not persuaded that O 11 r 16 is an inappropriate vehicle for an attack on the paragraphs of the further amended application which have been impugned by Medibank's motion. The applicant's amended statement of claim incorporates those paragraphs by reference by reciting, in lieu of a full prayer for relief, "the Applicant claims the relief specified in the amended application." If those paragraphs, in fact, have a tendency to cause prejudice, embarrassment or delay in the proceeding, are an abuse of process of the Court or fail to disclose, or otherwise support, a reasonable cause of action, the applicant should not be able to escape the consequences of those defects by the device of setting out the claims in full only in the body of the application.

(i) Paragraphs 10 and 11 29 In my view, s 12GD of the ASIC Act confers on the Court a general power to make an order compelling the respondent to refrain from conduct specified in the order or requiring the respondent to perform some stipulated act. That power is expressly circumscribed only by the requirement imposed by the prefatory words of s 12GD that the Court be satisfied that the respondent has engaged in, or is proposing to engage in, a contravention of a provision of Div 2 of Pt 2 of the ASIC Act. However, it is also a necessary implication that the order, whether mandatory or restrictive in form, be "appropriate" to remedy the actual or proposed contravention as to which the Court has been satisfied; see Cardile v Led Builders Pty Limited (supra) per Kirby J at 423. 30 It is not essential, I consider, that the order contemplated by s 12GD be framed so as to remedy once and for all the actual or proposed contraventions of Div 2 of Pt 2 of the ASIC Actwhich the Court has found. The order may be interlocutory in effect and framed in contemplation of the parties, and perhaps other persons affected by the contravention, returning to the Court to be heard on the further or other orders which should be made to complete the appropriate relief. 31 There may be considerable force in the submission of Counsel for Medibank that the Court would be unlikely, in the exercise of its discretion, to make an order in the precise terms of par 10 or par 11 of the further amended application. For instance, the Court may take the view that the class of persons to whom written notice should be given should be narrower than "all persons who have transferred from another health insurance provider to the Respondent in the period between 13 August 2000 and 10 September 2000" or should be described in different terms. Equally, the Court may conclude that the written notice should refer to compensation in different terms from those formulated by the applicant or should not refer to that matter at all. 32 The argument advanced on behalf of Medibank that s 12GF of the ASIC Act is specifically framed to allow the recovery by action of compensation may prove cogent in persuading the Court not to frame an order under s 12GD which requires payment of compensation otherwise than as the fruits of an action by the recipient. However, I do not consider that s 12GF has been framed to provide the sole means by which a contravention of Div 2 of Pt 2 may be compensated. It is to be remembered that s 12GM provides a vehicle for the grant of compensation, not in an "action" by the victim, but upon the "application" of the victim or the ACCC. The making of such an "application" is subject by subs 12GM(5) to the same time limit as the bringing of an "action" under s 12GF; see subs (2) of that section. 33 It is also to be borne in mind that the operative sub-sections of s 12GM are prefaced by the words "without limiting the generality of section 12GD ........". The effect of a similar phrase was considered in Leon Fink Holdings Pty Ltd v Australian Film Commission (1979) 141 CLR 672, where Mason J acknowledged, at 678, that; "It is accepted that when 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." 34 However, his Honour went on to observe, at 679; "There are strong grounds for thinking that the specific power given by par (a) of s 21 was conferred in order to dispel any doubt that might be entertained as to the extent of the general power and to ensure the existence of a power to lend to producers of Australian films. In this case the words "without limiting the generality of the foregoing" evince an intention that the general power should be given a construction that accords with the width of the language in which it is expressed and that this construction is not to be restricted by reference to the more specific character of that which follows. The clause therefore operates to negative the restrictive implication which might otherwise have been derived from the presence of the specific power to lend contained in par (a)." 35 That principle of construction applies even more strongly, I think, where the phrase is adapted to preserve the generality of a specific section conferring power rather than "the foregoing". 36 The fact that the drafter of the further amended application has chosen to indicate with precision and particularity the form of each written notice which the applicant will request the Court to order does not render these parts of the application frivolous or vexatious or an abuse of process. Nor does it mean that the application (or the statement of claim which incorporates it by reference) has a tendency to cause prejudice, embarrassment or delay in the proceeding. 37 I am reinforced in this conclusion by the fact that in MHG Plastics, Emmett J made orders for the refund of the purchase price of a motorcycle helmet to any person who, after an advertisement which his Honour also ordered, should provide proof of purchase to the respondent. There is no suggestion in the form of orders or his Honour's reasons that the ACCC had made application for compensation pursuant to s 12GM(3) on behalf of persons identified in the application. Nor does it appear that all of the persons who might have claimed a refund had been identified at the time of his Honour's order. It is true that a Full Court of this Court upheld an appeal from his Honour's judgment (MGH Plastic Industries Pty Ltd v Australian Compensation and Consumer Commission (supra)) but that was done by reversing the learned primary Judge's finding on whether the helmets in question conformed with the relevant Australian Standard. 38 Orders which were similar in part were made by Spender J in Netsafe. Those orders included; "11. The First and Second Respondents return forthwith any payment, held by or for them at the date of this order or received in the future, from persons attempting to participate in the World Netsafe Scheme." That order, his Honour explained at [9] of his reasons "may avoid the need for any further prosecution of the claim for compensation which I adjourned."

(ii) Paragraph 12 39 The consideration that an order in terms of this paragraph might be used in aid of the applicant's compiling, for the purpose of pursuing future claims for compensation on their behalf, a list of non-parties who would not otherwise be known to him, may weigh with the Court in exercising its discretion against making such an order. However, that is not to say that such an order is outside the wide terms of s 12GD or otherwise beyond power. In effect, it is not significantly different from an order requiring a respondent to advertise for victims and advise them of their rights to bring an action for damages or to apply for compensation under s 12GM(2). 40 An order to somewhat similar effect was made in Netsafe (supra) where Spender J directed that; "12. The First and Second Respondents deliver forthwith to the Applicant particulars of each person participating, or who has participated in the World Netsafe Scheme at any time whether in Australia or elsewhere including: (a) The name and address of the person; (b) The date the person joined the World Netsafe Scheme; (c) The amount the person paid to the First Respondent, including any monies held in trust; (d) The designated number of any card paid for by the person; (e) Where the First Respondent has paid any monies to the person, the date, amount and purpose of each such payment." 41 His Honour found no need in his reasons to explain or justify that order and, although it may have been made without argument in opposition by the respondents, the fact that it went unremarked provides some support for the view that orders of this kind can be made under the relevant statutory regime if the Court considers them appropriate.

(iii) Paragraphs 13 and 14 42 As with those in support of striking out the earlier paragraphs of the further amended application discussed above, the arguments directed by Medibank against pars 13 and 14 may well prove cogent in dissuading the Court from making orders of the kind proposed in those paragraphs. However, they are all arguments going to the exercise of the Court's discretion after it has obtained the satisfaction required by the prefatory words of s 12GD(1), if it ever does. It is not axiomatic that corrective advertising can never be ordered if a representation, misleading or deceptive when made, is no longer capable of operating on the mind of a presumptive victim. Accordingly, I do not consider that the presence of pars 13 and 14 in the further amended application tends to cause prejudice, embarrassment or delay in the proceeding or constituted an abuse of process.

Conclusion 43 For the reasons outlined above, Medibank's motion must be refused. On 19 March 2002 when these reasons had almost been completed, I heard a motion on behalf of the applicant seeking directions for the future conduct of the proceeding. Concern was then expressed by Counsel for the applicant that memories of witnesses to be relied on to prove the making of the alleged representations might fade with the passage of time, particularly if further delay were occasioned by the need to resolve issues as to pleadings or discovery arising from the matters agitated on the hearing of Medibank's motion, or by appeals from orders which I might make on that motion. 44 Accordingly, Mr Fajgenbaum proposed alternatively minutes of orders for the filing of a defence and a limited form of discovery before a further directions hearing or an order for, in effect, the separate and early trial of all issues other than those arising solely from the impugned pars 11, 12, 13 and 14 of the further amended application. Neither form of order was consented to by Dr Emerton who then appeared for Medibank and I intimated that I would consider, as part of the present reasons, whether any, and if so what, procedural directions should be given in response to the applicant's invitation. 45 In the result, I do not believe that the resolution of Medibank's earlier motion should delay the completion of interlocutory steps necessary to ready the proceedings for trial on all issues. If the respondent's defence or issues arising from discovery give cause to doubt that tentative view, appropriate directions to avoid unnecessary delay can be sought at short notice. However, as indicated on 19 March last, I shall hear Counsel early next week on the initial procedural directions which should be given in the light of the orders made and the reasons published today. At the same time, I shall receive submissions as to the costs of Medibank's motion on notice dated 15 January 2001 and the applicant's motion on notice dated 4 March 2002.

I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan.

Counsel for the Applicant: Mr J Fajgenbaum QC with Ms E N Strong

Solicitor for the Applicant: Australian Government Solicitor

Counsel for the Respondent: Mr N J Young QC with Mr S E Marks (13 March 2001) Dr K L Emerton (19 March 2002)

Date of Hearing: 13 March 2001 and 19 March 2002