COLLINGS CONSTRUCTION CO PTY LTD & ANOR v THE AUSTRALIAN COMPETITION & CONSUMER COMMISSION

VENTURE INDUSTRIES PTY LTD & ORS v THE AUSTRALIAN COMPETITION & CONSUMER COMMISSION

The Supreme Court of New South Wales Court of Appeal

NATURE OF JURISDICTION: Appeal from Supreme Court - Hunter J Comm.D.

PARTIES: COLLINGS CONSTRUCTION CO. PTY LTD & ANOR v THE AUSTRALIAN COMPETITION & CONSUMER COMMISSION

VENTURE INDUSTRIES PTY LTD & ORS v THE AUSTRALIAN COMPETITION & CONSUMER COMMISSION

* Intervening on behalf of the Attorney-General: L S Katz SC/M J Leeming

1 JURISDICTION of Supreme Court after cross vesting from Federal Court-relationship between s86 Trade Practices Act 1987 and Jurisdiction of Courts (Cross-vesting) Act. Held: Supreme Court had jurisdiction - Re Wilcox; Ex parte Venture Industries Pty Ltd & Ors (1996) 137 ALR 47 followed.

2 CLAIMED absence of jurisdiction to refer cross-vested matters to referee pursuant to Pt72 Supreme Court Rules - appellants contention rejected because of its consent to reference - Multicon Engineering Pty Ltd v Federal Airports Corporation (Unreported), Court of Appeal, 10 October 1997 followed.

3 AMENDMENT to Points of Defence - refusal upheld - Queensland v J L Holdings [1997] HCA 1; (1997) 71 ALJR 294 at 297 applied.

4 VALIDITY of consents pursuant to s87(1B) Trade Practices Act - required to be given before application not before commencement of originating proceedings.

5 SECTION 87 TPA - proper approach to assessment of measure of damages - Demagogue Pty Ltd v Ramensky & Anor (1992) 110 FLR 608 and Akron Securities Ltd v Illiffe (1997) 143 ALR 457 followed; GIO Australia Holdings Ltd & Ors v Marks & Ors (1997) 70 FCR 559 not followed.

6 STANDING of ACCC to bring proceedings and receive verdict on behalf of persons affected by proscribed conduct. Held: entitled to receive a verdict.

7 AWARD of damages for vexation and aggravated damages pursuant to s87. Held: Could be awarded.

8 Court of Appeal's approach to alleged error in primary judge's adoption of referee's report. Held: No error demonstrated. Nine Network Pty Ltd v Kennedy Miller Television Pty Ltd (Unreported), Court of Appeal, 8 June 1994, followed.

9 INTEREST awarded as damages pursuant to s87 TPA.

COLLINGS CONSTRUCTION CO. PTY LTD & ANOR v THE AUSTRALIAN COMPETITION & CONSUMER COMMISSION

VENTURE INDUSTRIES PTY LTD & ORS v THE AUSTRALIAN COMPETITION & CONSUMER COMMISSION

COLE JA: By consent an order was made that these two appeals be heard together.

These appeals are the latest hearings in a long running litigious saga. The nature of the proceedings, and the history of associated applications and appeals, is recited in the judgment of the Full Court of the Federal Court in Re Wilcox; Ex parte Venture Industries Pty Ltd & Ors.1 I will not repeat it. Subsequent to the decision of the Full Court, on 20 June 1996 the Venture group applied to the High Court for special leave to appeal from the decision of the Full Federal Court which had declined to grant orders in the nature of prohibition or certiorari holding, in substance, that the Supreme Court of New South Wales had jurisdiction to hear the claims brought by the Commission in consequence of the cross-vesting order made by Wilcox J, and in light of the provisions of s.4 Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cwlth) ("CVA"). Leave was refused. Nonetheless the right to seek to raise jurisdictional challenges was preserved. Following such refusal, Hunter J delivered judgment on 10 December 1996 in the substantive proceedings, they in fact having been heard in October and November 1995. Hunter J made orders unfavourable to each of the appellants.

Notices of appeal have been filed raising multitudinous grounds of appeal. I will refer to the detail of those grounds as may be necessary, but will address the substance of the appellant's contentions by considering the topics raised in the appellants' submissions. After briefly summarising the allegations against the Appellants it is convenient, at the outset, to deal with two jurisdictional challenges advanced by Venture, within which expression I include Venture Industries Pty Ltd, Harry Kioussis and Penelope Kioussis. The Collings appellants (Collings Construction Co. Pty Ltd and Wayne Collings), have not mounted a jurisdictional challenge but in submissions sought to adopt the submissions advanced by Venture and, in the event of the Court upholding either jurisdictional challenge, sought leave to amend the notice of appeal to raise similar jurisdictional challenges.

Hunter J summarised the case against the appellants as follows:

"The case sought to be made by the Commission on behalf of the owners may be loosely paraphrased as one in which the Collings group offered to the owners a design and construct arrangement for a project home design in which the owners were led to believe that Collings Construction was responsible for the due performance of all aspects of the package. The arrangement with Collings Construction was such that its obligations to the owners were brought to an end upon provision of council approved construction drawings for which the owners paid Collings Construction a deposit which Collings Construction labelled a non-refundable design fee. Collings Construction structured a contract price that was illusory in that the stated price was unreasonably low, subject to many exclusions of work, omissions and was based upon an unreasonable use of provisional sum items which, sometimes, had no sum allocated to the item. In some cases, the contract price related to a scope of works which already had been superseded thus exposing the owners to large payments for so called variations. Most of these matters were not brought to the attention of the owners or were inadequately notified by Collings Construction.

Collings Construction then passed the owners over to Venture for the construction of the owners' home and, in doing so, retained no contractual control over Venture. In this way the owners, who had paid irrefundable deposits, were placed in a compromised position which enabled Venture to exploit the illusory price structure of the Collings Construction arrangement and to force upon the owners contractual arrangements which departed from the terms proposed by Collings Construction. These contracts facilitated, in most instances, the obtaining of an illegal deposit by Venture and permitted Venture to make demands over and above the contract price for variations or provisional sum adjustments. Whereas Collings Construction held out Venture to be a builder of outstanding competence, Venture was completely incompetent."

Hunter J rejected Venture's contention that the Supreme Court of New South Wales had no jurisdiction to hear the proceedings commenced by the Trade Practices Commission, now the Australian Competition and Consumer Commission ("the Commission"), in the Federal Court seeking relief under ss.80, 87(1A) and 87(1B) Trade Practices Act 1974 . The relief sought was in the nature of declaratory orders, injunctive relief and damages.

Venture's contention was that s.86(2) Trade Practices Act 1987 invested State Courts with federal jurisdiction in respect of certain proceedings but not in respect of "a civil proceeding ... instituted by ... the Commission". As the Federal Court had exclusive jurisdiction in proceedings instituted by the Commission,[2] the Jurisdiction of Courts (Cross-Vesting) Act did not confer a power to transfer such proceedings to a Supreme Court, or invest such a court with jurisdiction to hear such a proceeding. Section 4(1) CVA was said not to confer such a power because the jurisdiction of the Federal Court was "exclusive" in consequence of s.86(2) and s.86(4) TPA. On the other hand, if the view that the jurisdiction of the Federal Court was "not exclusive" was correct, it was argued that as the cross-vesting legislation operates only when the transferee court did not, apart from the cross-vesting legislation, have jurisdiction, the non-exclusive nature of the jurisdiction of the Federal Court would result in the Supreme Court having jurisdiction thus rendering the cross-vesting legislation inapplicable.[3] Thus, so the argument ran, whether the jurisdiction of the Federal Court was "exclusive" or "non-exclusive", the cross-vesting legislation did not confer either a power to transfer the proceedings from the Federal Court to the Supreme Court, or jurisdiction on the Supreme Court.

These arguments were rejected by Wilcox J, by Hunter J and by the Full Federal Court. It was contended that each of those judgments was "palpably wrong".

The effect of the Jurisdiction of Courts (Miscellaneous Amendments) Act 1987 which amended ss.86 and 86A TPA, and of the CVA was considered by the Full Federal Court in Re; Wilcox. Section 4(1) CVA provides:

(a) the Federal Court ... has jurisdiction with respect to a civil matter ...;and

(b) the Supreme Court of a State ... would not, apart from this section, have jurisdiction with respect to that matter;

(c) in the case of the Supreme Court of a State ... - that court is invested with federal jurisdiction with respect to that matter..."

Section 86(1) confers jurisdiction on the Federal Court in respect of civil proceedings under the Trade Practices Act. Section 86(4), subject to presently irrelevant exceptions, provides that the jurisdiction conferred by s.86(1) is exclusive to the Federal Court. Section 86(2) makes plain that the Supreme Court of a State does not have invested in it federal jurisdiction in respect of a civil proceeding instituted by the Commission. Thus each of the criteria in s.4(1)(a) and (b) CVA is satisfied in respect of the current proceedings. The consequence is that s.4(1)(c) applies and the Supreme Court is invested with federal jurisdiction in respect of such a proceeding. That seems to me to follow from a reading of s.4. I see no basis for implying into the text of s.4(1)(c) the words "except where the Federal Court is invested with exclusive jurisdiction under s.86 Trade Practices Act 1989 which is the necessary consequence of Venture's submission.

"Gummow J considered s.4 in Poignand v NZI Securities Australia Ltd [1992] FCA 369; (1992) 27 FCR 363; 109 ALR 213 and observed (at FCR 368) that the section only invests jurisdiction in a court, if apart from the section, it did not have jurisdiction in the matter. He added that, if the investment is under s.86 of the TPA, s.4 does not operate to invest federal jurisdiction in the Supreme Courts with respect to the matter.

We would add that the corollary appears to be that, if State courts are not invested with TPA jurisdiction under s.86, then s.4 can operate to invest the courts with that jurisdiction."[4]

Having reached the view, based upon the construction of s.4(1) that federal jurisdiction was conferred upon a State Court in present circumstances, the Full Federal Court found support for that view by an analysis of the effect of s.4(4) and s.6 CVA. Section 6 specified "special Federal matters", defined in s.3(1), which were, in the circumstances stated, to be transferred from a Supreme Court to the Federal Court unless, in circumstances specified in s.6(2), the Supreme Court made an order that the proceedings be determined by that Supreme Court. The Full Court said:

"The inclusion of those Pt IV matters in the CVA as special federal matters capable of being determined in a State or Territory Supreme Court can only be upon the premise that the legislature intended that s.4(1) invest or confer jurisdiction in such matters on those courts, notwithstanding that under the TPA they are within the exclusive jurisdiction of the Federal Court.

Once it is accepted that matters within the exclusive jurisdiction of the Federal Court under the TPA are invested in State Supreme Courts under the CVA it is difficult to perceive any relevant distinction in s.4 of the CVA, between matters arising under Pt IV and matters arising under Div 1 or 1A of Pt V (and later Pt IVA) in proceedings in which the minister or the Commission is a party. In both cases the Federal Court's jurisdiction in the matter is exclusive under s.86(4), but appears to be invested or conferred under s.4(1) as neither category is excluded under s.4(4)."[5]

Venture submitted that the Full Court's reasoning in relying on s.6 is "entirely artificial". It submitted that, in practice, a "special Federal matter might frequently arise in the course of a proceeding requiring a State Court immediately to seek approval of the Federal Attorney General to continue hearing the matter". Venture contended that the existence of a special category known as "special Federal matters" did not support the view that in respect of all other matters not within that category jurisdiction is conferred by s.4 on a State court. It suggested that the category of "special Federal matters" existed to ensure that a State Court would not inadvertently purport to exercise jurisdiction over such matters where they were of special interest to the Federal Government.

There are a number of answers to that contention. First, whatever view one takes regarding the effect of s.6, and the existence of a category of "special Federal matters", the plain meaning of the words in s.4(1) is not affected. Second, the existence of s.4(4) makes clear a legislative intent that certain matters are not to be the subject of a transfer of jurisdiction to a Supreme Court. Third, s.6 assumes that a matter, being a "special Federal matter", is properly before the Supreme Court. It assumes the Court has jurisdiction to deal with the matter. However once it is appreciated by the Supreme Court that the matter involves a "special Federal matter", the proceeding is to be transferred to the Federal Court unless, in the specified circumstances, the Supreme Court makes an order that the proceeding should be determined by the Supreme Court. Within the definition of "special Federal matters" are matters arising under Pt IV (other than matters arising under ss.45D or 45E). Section 4(4) makes clear that matters under Pt IV, other than matters arising under s.45D or s.45E TPA, are not liable to be invested into the jurisdiction of State Courts. Specification of such matters as matters not being within the scope of s.4(1), or as liable to be transferred from a State Court to the Federal Court once any such matter is appreciated to be "a special Federal matter" as provided in s.6, does support the construction of s.4(1) as investing Federal jurisdiction in a State Court in respect of other proceedings if the provisions of s.4(1)(a) and (b) are met.

It was also contended that the terms of s.4 CVA should be read down by the terms of s.86A(1) TPA to the effect that a matter commenced by the Commission could not be transferred under the general power in s.4 CVA. I see no warrant for reading into s.4 CVA the words "subject to the provisions of s.86A(1) TPA ...".

It is not possible in these proceedings for the appellants to challenge the validity of the order for transfer made by Wilcox J of the proceedings to the Supreme Court. That issue was resolved adversely to them by the decision of the Full Federal Court and the refusal of leave to appeal by the High Court. The matter available to the appellants for argument is whether, assuming a valid transfer, nonetheless the Supreme Court of New South Wales does not have jurisdiction. For the reasons given by the Full Federal Court, and referred to above, the Supreme Court of New South Wales does have jurisdiction in these proceedings in consequence of the provisions of s.4 CVA.

In my view the decision of the Full Federal Court on this aspect was correct. However even were I not of that view I would, in accordance with established principle, follow the decision of the Full Federal Court unless I were of the view it was clearly wrong.[6]

Venture contends that the Supreme Court in referring certain technical issues to a referee "was improperly exercising federal jurisdiction under Chapter III of the Constitution" in that such reference "constitutes an impermissible delegation of federal jurisdiction". It contended that "a reference to a referee pursuant to Part 72 was not an appropriate, effective or authorised exercise of federal jurisdiction, assuming such jurisdiction was otherwise properly conferred on the Supreme Court".

Venture concedes that this issue was not raised at any earlier point than in submissions filed in support of this appeal.[7] There is no ground of appeal which raises this matter, and leave is required to amend, for the fourth time, the notice of appeal to raise it.

Further, Hunter J recorded in a judgment dated 17 March 1995 relating to the referral to a referee, as follows:

"It is accepted by the parties that it is appropriate that a number of issues of a technical nature be referred to the named expert, Mr G Lumsdaine, and that such a reference is capable of being appointed, heard and made subject to a report in the interval between this matter going into the call-over list, the stage at which it has reached, and the likely appointed hearing date for the proceedings. Implicit in that procedure is the avoidance of the determination as separate questions of any issues anterior to such a report. In other words, the matter may now proceed to a hearing appointed in the usual way but with the difference that identified technical issues will be referred and reported on prior to hearing."[8]

"It would be of assistance to the Court on the hearing of the question as to the form of what is now agreed to be a reference of technical issues, to have submissions identifying areas where it would not be appropriate for the referee to reach a finding solely on the basis of joint conferences with experts ..."[9]

It is plain that the trial judge was recording a position accepted by the appellants and the Commission that there should be a reference. That his Honour's understanding of the appellant's position of that acceptance was correct appears from an exchange between the trial judge and senior counsel for the appellants on 10 March 1995, shortly before the judgment of 17 March 1995. The following was the exchange:

His Honour: "Have you got a primary position, that there should be no reference at any stage?"

Thereafter a reference took place occupying thirteen days. Further, upon the basis of the acceptance of the referee's report, a hearing before Hunter J occurred occupying thirty-one days.

At no time until the lodging of written submissions in support of the appeal was it suggested that there was a constitutional prohibition resulting in an absence of jurisdiction to refer, or an inappropriate exercise of federal jurisdiction in referring matters to the referee.

The appellants did not oppose the making of an order for reference. They accepted that the making of such an order was appropriate. They should not now be permitted to contend that there was no power or jurisdiction to make such an order. I respectfully adopt the analysis of the relevant principles contained in the judgment of Mason P in Multicon Engineering Pty Ltd v Federal Airports Corporation.10 For reasons there given it would be quite wrong to allow the appellants now to raise a point which, were it valid, would have negated a thirteen day reference, and a thirty-one day hearing based upon that reference.

It is not an adequate answer for failure previously to raise the point to argue, as the appellants did, that because they opposed, before Wilcox J, the transfer of the whole proceedings to the Supreme Court, that opposition was broad enough to encompass the constitutional point now sought to be raised. Such a point needs to be specifically taken, and should have been taken before Wilcox J if it was to be relied upon.

It becomes unnecessary to consider the correctness of the substantive argument involved in the second jurisdictional challenge. Leave to amend the notice of appeal should be refused. This challenge may not be mounted.

THE LIMITATIONS POINT - REFUSAL TO ALLOW VENTURE TO AMEND ITS POINTS OF DEFENCE

On 24 October 1995 Venture applied to raise a limitation defence seeking to rely upon s.87(1CA) which provides that, relevantly, an application by the commission on behalf of persons affected by conduct in contravention of the provisions of Pt IVA may only be brought within two years after the day on which the cause of action arose, or in any other case within three years.

Hunter J refused leave to amend. His Honour noted that the application was brought two years after the commencement of the Federal Court proceedings by the Commission and approximately twenty-two months after Venture had consented to amendments which added the Corbetts, the Staps and the Grimstons to the proceedings. The adding of those parties was effective from 17 December 1993. At that time the Commission filed an amended application and an amended statement of claim but no application was then made to amend the defence to raise the statutory bar, nor was it raised in opposition to the application to amend.

Although Venture did not raise the limitation defence in opposition to the application to amend to add the three new affected groups of persons in December 1993, Venture did, by way of defence to the amended statement of claim, plead that the consents required by s.87(1B) had been obtained beyond time in that they were not obtained prior to the institution by the Commission of the initial application to the Federal Court filed on 3 September 1993. Those defences resulted in the Commission applying to Hunter J for a declaration that the amendments permitted by Wilcox J on 15 December 1993 took effect from 17 December 1993, the date of the filing of the amended application and statement of claim. The application to amend to rely upon s.87(1CA) was made the following day. It was contended that the making of that declaration "prompted an application by both Venture and Collings for amendments to their points of defence to take certain limitation points". Perhaps it did, but I share the difficulty which Hunter J encountered of seeing how the making of the declaration had any significant bearing upon any entitlement of the appellants to amend to raise the limitation defence. Perhaps, almost two years after the commencement of the proceedings, closer attention was given to s.87 than had previously occurred.

Whether an amendment should be allowed involves the exercise by a court of a judicial discretion. Many factors may be considered in the exercise of that judicial discretion. The ultimate question is whether justice requires that the amendment be allowed. As Dawson, Gaudron and McHugh JJ said in Queensland v J L Holdings Pty Ltd:11

"Justice is the paramount consideration in determining an application such as the one in question."

It is plain that Hunter J had that test in mind for he said:

"I am of the opinion, without reaching any view as to the substance of such a defence, that it would be quite unfair to expose the owners to the prospect of their claims or any part of those claims being defeated by such a defence."[12]

The factors which led the trial judge to that view were exposed. His Honour said:

"I do not think this is a case where costs would sufficiently protect the owners in the event of leave being granted, even if such an order extended to one requiring the respondents to pay the costs to date of amendment of any issue to which such a defence was successfully raised. It is clear, I think, from the evidence of Tanti in relation to the circumstances in which the Misadventure Club was formed that, as a general observation, the owners are persons of limited resources. It is also clear, I think, that those resources have been subjected to sever strain by reason of the conduct of the respondents as found in these proceedings. It is significant that the owners had undeniable rights at common law for fraud and breach of contract in relation to the Venture group which rights had not expired at the time of the institution of the Federal Court proceedings. It is quite evident that the capacity of the Commission to bring these proceedings on behalf of the owners has afforded them an opportunity of having their claims litigated at minimum expense. Further, I am mindful of the fact that the Commission's application for leave to amend the application in the Federal Court proceedings to add the Corbetts, the Grimstons and the Staps to the owners on whose behalf claims were sought to be brought under s.87 by the Commission, was consented to by the respondents. It is my view, had the respondents wished to raise a defence in bar of this kind then, that was the time to raise it. I think it is of some considerable significance that they did not, particularly where the principal target of their proposed defence is Corbett's claim. Furthermore it will be apparent from the recounting of the history of this matter earlier in these reasons, that prior to the making of the subject application for leave to amend, there had been protracted litigation in the Federal Court proceedings and in these proceedings involving challenges to the jurisdiction to the Federal Court to the transfer of the proceedings and to the jurisdiction of this Court to entertain these proceedings - a course which was persisted in through to 30 September 1996 when leave to appeal to the High Court from the Full Court decision was refused. This protracted litigation has no doubt imposed considerable demands upon the owners and it is my view that they should not be exposed to the risk of having their claims defeated in these proceedings by a defence based upon s.87(1CA) leaving them to the completely unacceptable alternative of initiating, at their own cost, proceedings at law. To the extent that, in whole or in part, any of the owners' claims at law would be now statute barred having regard to the passage of time since the institution of the Federal Court proceedings, in my opinion, that is all the more reason for refusing leave to amend to permit the respondents to rely upon the time limitation of s.87(1CA)."[13]

The appellants have argued that any prejudice to the Commission could have been met by an appropriate order for costs; the parties were the Commission and the appellants, not the persons affected by conduct contravening Pt IVA or Pt V, and those affected persons could have commenced their own proceedings, as some of them had.

These considerations are to my mind unrealistic when assessing the question whether it would be just to allow an amendment to raise a statutory bar. The proceedings were brought by the Commission but they are proceedings which incorporate an application "on behalf of" persons affected by contravening conduct. That is clear from s.87(1A) and (1B). In a real sense persons affected by contravening conduct have an interest in the proceedings. It offends the notion of absence of multiplicity of proceedings to contend that an amendment should be allowed to raise a statutory bar which, if valid, would defeat the proceedings by the Commission in circumstances where nonetheless those persons affected by contravening conduct who would have benefited from those proceedings should then be required to continue or commence common law or other proceedings in respect of the same substantive conduct. Hunter J was correct to point out that if any such alternative claims of the affected persons were statute barred as a result of them no doubt relying for their relief upon the proceedings brought by the Commission, that was a factor to be taken into account in weighing the requirements of justice.

Hunter J was plainly alive to the difficulty of determining a statutory time bar defence at an interlocutory stage.[14] Nonetheless it was correct to note that the proposed defence was not raised at the time when application to amend the proceedings to incorporate three new affected parties was made. I agree with the trial judge that that was the point of time at which the defence ought to have been raised for it would have given both the Commission and the parties affected by the contravening conduct the opportunity to consider whether they wished to proceed with the proceedings instituted by the Commission, or seek alternative relief which may have been available to the affected parties in other litigation. It was a relevant factor to take into account that almost two years passed with the undoubted expenditure of significant monies before the defence was sought to be raised.

The difficulties in overturning a discretionary decision of a trial judge regarding an amendment are well recognised.[15] I am not at all persuaded that any error has been demonstrated in the decision reached by the trial judge sufficient to require this Court's intervention.[16] Indeed, in my view the decision of Hunter J to decline to allow the amendment was correct for the reasons he gave.

It is unnecessary to consider whether the statutory defence would have succeeded. This ground of appeal fails.

THE VALIDITY OF THE CONSENTS UNDER S.87(1B)

The original proceedings were commenced by the Commission on 3 September 1993. Those proceedings incorporated claims for damages and other relief on behalf of the Ferris', the Smiths, the Tantis and the Quaglias. Those persons had given consents to the Commission making applications for relief on their behalf as contemplated by ss.87(1A) and (1B) on either 20 or 23 August 1993. Thus in respect of those persons it is plain that the requirement of s.87(1B) that the Commission obtain the consent in writing before the bringing of an application on behalf of a person was met.

The Grimstons, the Corbetts and the Staps gave similar consents on 15,17 and 19 November 1993 respectively. Pursuant to leave granted by Wilcox J on 15 December 1993, an amended application and amended statement of claim were filed on 17 December 1993. Each of the amended application and the amended statement of claim added a claim for damages in respect of the Grimstons, the Corbetts and Staps. It is thus plain that before any application was made on their behalf by the Commission, they had given their consent to the making of the application.

The appellants, however, contend that the amendment permitted by the order of Wilcox J on 15 December 1993 operated not from the date of that order or the date of filing of the amended application or amended statement of claim, but from the date of the initial application and statement of claim, namely 3 September 1993. Thus they argued that the consents of the Grimstons, the Corbetts and the Staps were not given before the bringing of the application as required by s.87(1B). Thus no relief could be granted to them. Hunter J rejected that contention. He was right to do so.

Section 87(1B) provides:

(1B) Where, in a proceeding instituted for an offence against section 79 or instituted by the Commission or the Minister under section 80, a person is found to have engaged (whether before or after the commencement of this subsection) in conduct in contravention of a provision of Part IVA or V, the Commission may make an application under subsection (1A) 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, but the Commission shall 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."

That subsection contemplates the institution of two types of proceeding. One is for an offence against s.79. The other is a proceeding by the Commission or the Minister for an injunction under s.80. The subsection does not address an application for an injunction by "any other person", although such an application is permitted by s.80. Any such application by "any other person" is addressed by s.87(1A). Section 87(1B) contemplates that if in a proceeding for an offence against s.79 or a proceeding instituted by the Commission or the Minister under s.80 proscribed conduct is found to have been engaged in, the Commission may make an application under s.87(1A) on behalf of persons identified in the application as having suffered from the proscribed conduct. Before the application is made by the Commission, it must have the written consent of the person on whose behalf the application is made.

To my mind that plainly contemplates that an application may be made after the institution of the proceedings for an offence against s.79 or for relief under s.80. There is no prohibition on the making of such an application at the same time as the proceeding is brought, as would be the case where it was known persons were affected by allegedly proscribed conduct. There is also no prohibition in the section upon a further or amended application being made when new persons affected by allegedly proscribed conduct are identified. That necessarily means that the Legislature intended that any application made after the institution of the proceedings, whether by way of fresh application or amended application, was not to be considered as dating from the date of the institution of the initial proceedings for the purpose of s.87(1B), for so to construe the section would mean that there could not be a subsequent or amended application in respect of new persons identified as affected because their consent had not been obtained prior to the institution of the original proceedings.

As a matter of statutory interpretation the consent of the person on whose behalf the application is made must be given before the date of that application on his behalf, not the date of application on behalf of another, and not the date on which the initial proceedings in which the application was brought were instituted.

THE APPROPRIATE MEASURE OF DAMAGES UNDER S.87(1A) OF THE ACT

The appellants contend that Hunter J, in awarding damages and in determining the issues for reference, applied the wrong measure of damages. They contend that his Honour adopted the "expectation measure" of damages. They argued that "a plaintiff is not entitled under s.87 to expectation loss that would make good its `contractual bargain'". They contended that the particular circumstances were not of such an exceptional nature that the normal measure of damages in actions for breach of Pt IVA or V, being the tortous measure of damage, was inappropriate. In more specific terms it was contended that applying the wrong measure of damage has resulted in error in two respects, namely:

(i) adding the consequential losses to the cost of rebuilding found by the referee; and

(ii) deducting from the total amount of damages the construction price agreed with Collings, being the lesser of the Collings and the Venture Industries' contract price.

The reference directed by Hunter J was to determine the cost of constructing dwellings to the quality and standard as represented by Collings, including the cost of demolition where necessary to achieve that end. This was said to constitute a determination of the "contractual measure of damage". The appellants' contention was that all that could be awarded was a refund of monies paid to the builders, be it Collings or Venture or both, costs of demolition to restore the land to its state at the time of contract, and "consequential losses", being in the nature of interest, legal fees, consultants fees and similar.

The submissions of the appellants misunderstand the approach of Hunter J. His Honour did not apply the contractual measure of damage in preference to the tortous measure of damage. His Honour said:

"Where the contraventions include representations that Venture possessed very high standards of expertise, when it was hopelessly incompetent and representations that the contract price was a reasonable price for the contract works, when the works could not be built for that price: where the owners would not have entered into the subject contracts but for those contraventions of the respondents and where the incompetence of Venture was such that the works it performed were so defective as to require demolition, in whole or in part, and rebuilding at greater cost than the represented contract price, the loss or damage suffered by the owners should, in my opinion, provide for recovery of such costs of demolition and rebuilding as exceeds the represented price for the works. Particularly should this be so, in my opinion, where the owners who had entered into contracts with Venture had no practical course left open to them other than to demolish and rebuild what was intended to be their homes."[17]

In reaching that view Hunter J relied upon the passage in the joint judgment of Mason, Wilson and Dawson JJ in Gates v City Mutual Life Assurance Society Ltd[18] where their Honours said:

"The question then is whether it is appropriate to apply the contract measure of damages to the contraventions found to have taken place. The courts are not bound to make a definitive choice between the two measures so that one applies to all contraventions to the exclusion of the other."

Hunter J also placed reliance on the passage in the judgment of Mason CJ, Dawson, Gaudron and McHugh JJ in Wardley Australia Ltd & Anor v The State of Western Australia:19

"Here we are concerned with contraventions of s.52(1) in the form of misleading conduct constituted by misrepresentations. In this situation, as at common law, acts done by the representee in reliance upon the misrepresentation constitute a sufficient connexion to satisfy the concept of causation. And, if those acts result in economic loss, that is, loss other than physical injury to person or property, that economic loss will ordinarily be recoverable under s.82(1). In the context of the area of commercial conduct in which the Act operates, the reference to "loss or damage" in s.82(1) plainly includes economic or financial loss.

In determining when a plaintiff suffers economic loss or damage in an action under s.82(1) based on misleading conduct constituting a contravention of s.52, it is necessary to have regard to the applicable measure of damages. In this respect, it would not be right to conclude that the measure of damages recoverable under the sub-section necessarily coincides with the measure of damages applicable in an action for deceit or in an action for negligent misrepresentation. The measure of damages recoverable under s.82(1) can only be fully ascertained after a thorough analysis of those provisions in Pts IV and V of the Act for contravention of which the statutory cause of action may be maintained."

After reference to these and other authorities, Hunter J concluded:

"What is called for under s.87 is a clear statement of the proscribed conduct involved and a determination of the loss or damage caused "by" that conduct: a deceptively simple excursion at the invitation of March into the common sense state of causation.

Approached in that way the task, as I have found it, is far from easy when the ramifications of the unique form of deception involved in the subject contraventions are addressed. In particular, while the owners are clearly entitled to the cost of demolition or rectification, mindful of the need to give credit for the possible value of the respondents' work retained by any of the owners, what of the cost of rebuilding and completion of the contracted works? Is the cut off point for loss or damage suffered by the owners reached when the defective works have been rectified by demolition or otherwise? Or is one entitled to go a step further and evaluate the cost of rebuilding and completing the works, allowing as a set off the represented contract price for the works? If that element of loss or damage is not allowed it seems to me that the loss or damage flowing from that misrepresentation as to price goes unrecompensed in the hands of the owners. There is no doubt that the owners were operating under a strict budget and would have entered into some other building contract within those limits. In my opinion, it is necessary to recognise that the nature and subject matter of the commercial arrangements involving the owners with the respondents was such that, when once arrangements were entered into, the owners were committed to the completion of the works, initially through Venture, and, then, when the respondents' conduct took effect, through the assistance of third parties. If the owners are to be treated as so committed to the completion of the works then it strikes me as reasonable that there should be included in the assessment of the owners' loss or damage that cost of completion of the works, allowing as a set off the contract price as represented by the respondents.

Accordingly, it is my view that the approach adopted by the Commission on behalf of the owners to this aspect of claim is a legitimate approach to the assessment of loss or damage under s.87 of the Act. In my opinion, the principle remains the same whatever the stage of construction Venture's defective work had reached.

It will be seen, then, that I have not approached the task as one involving a selection of a measure of damages from the competing measure of damages in tort and in contract. I think the exercise is one of tracing the causative consequences of the conduct found against the respondents as distinct from donning a straight jacket of damages for deceit or for breach of contract as the damages to which the owners are entitled."[20]

It is apparent from the passages I have quoted from the judgment above that Hunter J did not simply apply the contractual or expectation measure of damage; rather he sought out consequences caused by the proscribed conduct and awarded compensatory damages for those consequences. His Honour adopted this approach because, contrary to the appellant's submissions, he found that the "unique form of deception" engaged in by the appellants resulted in consequences and losses which fell outside those which might have been awarded had one simply applied the tortous measure of damage.

There is authority in the High Court for the adoption of this approach. In Johnson & Ors v Perez,21 Mason CJ made clear, in a different context, that general principles of the assessment of damages "must give way in particular cases to solutions best adapted to give an injured plaintiff that amount in damages which will most fairly compensate him for the wrong he has suffered" and that "the principles governing the assessment of damages do not permit the application of rigid rules based on categories of actions".[22]

Apart from submissions based upon a misconception of the approach of Hunter J to which I have referred, the appellants raised two substantive arguments. The first was that the High Court in Gates had determined that the measure of damages able to be awarded pursuant to s.87 was tortious: no other measure was permissible. The second was that the decision of the Full Federal Court in GIO Australia Holdings Ltd & Ors v Marks & Ors,23 in respect of which decision the High Court has granted leave to appeal, made clear that an intermediate appellate court was bound by the directive in Gates, and this Court should, as a matter of comity and in accordance with principles enunciated in Fernando,24 follow that approach and regard itself as similarly bound.

Gates was a claim pursuant to s.82 for damages for loss or damage suffered as a result of proscribed conduct contravening s.52. No relief was sought under s.87. The High Court was not concerned to construe the damages recoverable under s.87. Section 87 contains words which make clear that the orders which may be made under that section are compensatory of the loss or damage caused by the proscribed conduct. It contemplates relief, including damages, beyond that which may be recoverable pursuant to s.82.

In Demagogue Pty Ltd v Ramensky & Anor,25 each of Black CJ, Gummow J and Cooper J considered the scope of s.87 relief. Black CJ considered it to be clear that "the loss or damage contemplated by s.87(1A) is not limited to loss or damage in the s.82 sense but was intended to include the detriment suffered by being bound to a contract unconscionably induced".[26] Gummow J thought that s.52 "should be no inhibition to giving effect to what, on its proper construction, is provided for in the legislation, that the result may be to achieve consequences and administer remedies which differ from those otherwise obtaining under the general law".[27] Regarding s.87, his Honour said:

"Thus, whilst s.82 is concerned with the recovery of an amount representing the loss or damage, s.87 is concerned with compensation, whether in whole or in part, for loss or damage and with the reduction of loss or damage, and with the prevention of loss or damage which is likely to be suffered."[28]

Gummow J also agreed with the remarks of Black CJ. Cooper J with whom Gummow J also agreed, did not equate the orders for compensation which might be recoverable under s.87 with the loss or damage recoverable under s.82. His Honour said:

"Section 87(1) so far as is presently relevant provides: "...where in a proceeding...the Court finds that a person who is party to the proceeding has suffered, or is likely to suffer, loss or damage by conduct of another person...the Court may ... make such order or orders as it thinks appropriate against the person who ... was involved in the contravention...if the Court considers that the order or orders concerned will compensate the first-mentioned person in whole or in part for the loss or damage or will prevent or reduce the loss or damage".

The various orders available to the court are set out in section 87(2).

Section 87 provides both the source of the court's power to provide a remedy and the remedy itself. It is therefore important to distinguish clearly between the need to establish the factual circumstances necessary to enliven the power of the court to grant relief and the circumstances which are relevant to the nature of the relief which it is appropriate to grant.

The circumstance in s87(1) which empowers the Court to grant relief is a finding that a party "has suffered or is likely to suffer loss or damage by the conduct of another person". That is a question of fact.

The words "loss or damage" where they appear in s87(1) are to be construed by the application of the ordinary canons of statutory construction. This requires giving the words their ordinary meaning in the context in which they appear.

The ordinary meaning of loss is "detriment or disadvantage resulting from deprivation or change of conditions" Shorter Oxford English Dictionary 3rd Ed, (rev) 1990,p1241. "Damage" is defined as "1. Loss or detriment caused by hurt or injury affecting estate, condition or circumstances (Arch.) 2. Injury, harm": (Shorter Oxford English Dictionary, at p485).

There are two matters within the context of s87(1) which colour the meaning of the phrase in the section. The first is that the loss or damage has been or is likely to be caused by conduct in contravention of the Act. The second is that any order made is to compensate for the loss or damage. However, the compensation is not limited to the payment of a money sum or damages as an examination of s87(2) discloses. Nor is there anything in s87(2) which would limit the loss or damage suffered or likely to be suffered to pecuniary loss or damage. In particular, s87(2)(a) (declaring a contract or collateral agreement to be void) and s87(2)(ba) (refusing to enforce any or all provisions of a contract) take as their point of focus the denial of the benefit of a contract to a person whose proscribed conduct has caused loss or damage to the other party. Such an order has the consequential effect of releasing the innocent party from the obligations imposed by the contract. In the context of providing compensation it is the obligations imposed by such a contract which is the loss or damage which the order seeks to redress.

In my opinion "loss or damage" in s87(1) means no more than the disadvantage which is suffered by a person as the result of the act or default of another (Halsburys Laws of England (4th Ed.) Vol. 12, para. 1102) in the circumstances provided for in the section.

The phrase "loss or damage" in s87(1) does not involve any concept of quantum or assessment of damages: see Barneys Blu-Crete Pty. Ltd. v. Australian Workers Union [1979] FCA 89; (1979) 43 FLR 463 at 473 where Northrop J. expressed a similar view as to the use of the same phrase in s45D(1)(a) of the Act. This is to be contrasted with the context of the phrase in s82 where it is "the amount of the loss or damage" which is recoverable by action. For the purpose of section 82 it is the quantum or assessment of the loss or damage suffered in monetary terms which must be demonstrated. The rules as to the assessment of damages or the measure of damages in an action for deceit are relevant to the question of loss or damage under s82. However, those rules are not relevant to the meaning of the phrase in s87(1)."[29]

It is notable that in considering the scope of relief available under s.87, none of their Honours found it necessary to refer to the decision of the High Court in Gates.

This Court considered the scope of s.87 in Akron Securities Ltd v Illiffe & Ors.30 Mason P referred with approval to the passage in the judgment of Gummow J in Demagogue to which I have referred. His Honour was not able to accept the restrictive construction placed upon s.87 by the Full Federal Court in GIO Australia v Marks. His Honour concluded:

"I find it difficult to see that Gates stands in the way, because relief under s.87 was not sought in that case, and because the passages cited by the Full Court from Gates (160 CLR at 7,12-13 and 14-15) do not, in my respectful opinion, establish that s.87 offers nothing but rescission in cases such as the present.

That s.87 is available without proof of loss compensable according to Gates principles is patent by the unchallenged resort to it for orders in the nature of rescission, as in the present case. Yet if absence of proof of s.82 damages is no bar to one part of s.87, I see no reason why it should bar resort to other parts. In Kizbeau Pty Ltd v W G & B Pty Ltd [1995] HCA 4; (1995) 184 CLR 281 at 299; [1995] HCA 4; 131 ALR 363, the High Court illustrated how, in a proper case, an award of damages may be married to an order pursuant to s.87 rewriting a contract so as to put the innocent party "in the same position that it would have been if there had been no misrepresentation"".[31]

Mason P, with whom Priestley JA agreed, found it unnecessary to decide whether "this Court should follow rather than question the Full Court in GIO".

In light of the submissions put, this Court must now decide whether to adopt the wider interpretation of the relief which may be granted under s.87 espoused by all three judges in Demagogue and by the majority in Akron, or the narrower view espoused by the judges in GIO.

I prefer the wider view expressed in Demagogue and Akron. The reasons are those advanced in those decisions which I have quoted. I see no reason to give the expressions contained in s.87 other than their natural meanings. Orders may be made which "compensate" the party affected for the "loss or damage suffered by such person". That directs a court to define with particularity the proscribed conduct and thereafter to determine the "loss or damage" suffered in consequence of that conduct. That is the approach which Hunter J adopted. In my opinion he was correct in so doing.

It follows, in my view, that if it be established, as it was to the satisfaction of Hunter J, that so-called "consequential losses" were caused by the proscribed conduct, the trial judge was entitled to award damages equating to those consequential losses.

I see no error in Hunter J deducting from the total amount of damages suffered the construction price agreed with Collings rather then the greater contract price agreed with Venture. Hunter J found that once the parties had entered into an agreement with Collings, and were thus subjected to a non-refundable deposit if they did not proceed, and being persons of limited means, they had no alternative but to agree to the Venture contracts imposed upon them. The initial expectation was that they would receive a home for the Collings contract price. Additional costs beyond that price, including the higher Venture contract prices, were a result of the proscribed conduct. His Honour said:

"I have given detailed findings of the proscribed conduct of Collings Construction in relation to the deceptive contract structure it put in place, of its awareness of the exploitation to which that contractual weakness would be subject in the hands of Venture to whom it referred unsuspecting owners. When added to the absence of any reasonable basis for holding out Venture as a craftsman of excellent reputation and, on occasion, signing up Venture without the authority or knowledge of the owners and in the knowledge that the owners were committed to their project by that stage, I think it is appropriate to treat Collings Construction and Venture as equally responsible for the damage suffered by the owners. In so far as Venture was a willing and active party to Collings Construction's conduct by its exploitation of the arrangement presented to it by Collings Construction, Venture should be held equally responsible for the owners' loss represented by their payments to Collings Constructions."[32]

That finding of the factual relationship between Collings and Venture in the implementation of the proscribed conduct means, in my opinion, that loss suffered by the affected parties beyond the amount of the Collings contract price was caused by proscribed conduct of each of Collings and Venture. Accordingly Hunter J was correct to deduct from the total of damages the Collings contract price rather than the higher Venture contract price.

The challenge to the measure of damage assessed by Hunter J fails.

THE STANDING OF THE COMMISSION TO CLAIM LOSS OR DAMAGE ALREADY PAID BY THE BUILDING SERVICES CORPORATION TO THE INDIVIDUAL BUILDING OWNERS

The Building Services Corporation is a body corporate created by s.105 Building Services Corporation Act. The objects of the corporation include the promotion and protection of the interests of owners and purchasers of dwellings.[33] For the purpose of attaining its objects, the corporation may insure under the Act residential building work against the works not being completed or its being defective.[34] Part 6 of the Act provides for regulations to prescribe insurance schemes which must identify those having the benefit of the scheme.[35] However it is not the building owner who takes out the policy of insurance with the corporation. The policy, and the premium for it, are taken out and paid for by the builder,[36] who is obliged to advise an owner of residential building work with whom the builder contracts in a form approved by the corporation of the effect of the protection afforded by the policy.[37] Regulation 33 Building Services Corporation Regulations 1990 prescribes the insurance cover in Form 4, Schedule 1 to those Regulations. By cl.4 the owner of land upon which residential building work is done, or the person who contracted to have the work done, are beneficiaries. Under cl.5 the corporation indemnifies the beneficiary against losses there described in respect of residential building work.

Thus the corporation is the insurer, the builder is the person obliged to take out and pay for the policy, but the beneficiary is not the builder but the owner of the land upon which the building works occur or the party contracting for the works to be done. The payments made by the Corporation to a beneficiary are thus not payments made to an insured in the usual sense of that expression because the beneficiary is not the owner of the policy of insurance. Perhaps that is why s.98(1) provides that any amount paid by the Corporation under BSC insurance may be recovered by the Corporation in a court of competent jurisdiction as a debt from the person by whom the defective residential building work concerned was done. Thus the insurer can recover against the holder of the policy for his defective work. Section 98(2) makes clear that if the defective work is that of a subcontractor or supplier, the Corporation is subrogated to the rights of the builder against the subcontractor or supplier.

Pursuant to these provisions the Corporation paid monies to various of the affected owners. The appellants contend that those sums should have been deducted from the damages ordered to be paid by them in consequence of the proscribed conduct. Hunter J rejected that contention. His Honour did so for the following reasons:

"In this case it has been submitted on behalf of the respondents that in respect of any damages to be assessed against them, credit should be allowed for monies received by particular owners under the Corporation insurance scheme. In support of this submission, it was argued that not to do so would expose the respondents to liability for double compensation with the statutory indebtedness conferred upon the corporation under s.98. There is no doubt that the creation of the statutory debt under s.98 creates an apparent difficulty of this kind. However, I am of the view that the payments should not be taken into account in assessing the owners' loss or damage. The adjustment of compensation received by the owners as between the owners and the Corporation may be left to be sorted out by the Corporation exercising its rights of subrogation. In theory, there is no obligation upon the Corporation to act in that way, as distinct from seeking direct contribution from the builder owner under s.98: however mindless that course may seem. The course I have adopted I think is the appropriate one because it should ensure that the sorting out of the monies received by the owners by way of damages from the respondents or by way of indemnity from the Corporation should best be attended to between those groups where questions as to the coincidence of the subject matter for which the damages and indemnity have been received can be best resolved there should there be some disparity in those two aspects.

If by some chance, which I would characterise as extraordinary, the Corporation sought to enforce its rights against Venture under s.98 of the BSC Act, I do not see why, in principle, Venture could not join owners in any such action aimed at the enforcement of the obligation of the owners to disgorge any duplicated compensation on the concept of unjust enrichment stemming from any such failure to reimburse the Corporation. cf. Trade Practices Commission v Manfal Pty Ltd & Anor (No.3) [1991] FCA 650; (1991) 33 FCR 382 at 385; referred to in R Goff & G Jones, The Law of Restitution (3rd ed) 1986, p272 and Albion Insurance Co Ltd v Government Insurance Office (NSW) [1969] HCA 55; (1969) 121 CLR 342 at 350.

I am fortified in the approach I have adopted by the undertaking given by the owners under the deed of release between the Misadventure Club and the Corporation dated 8 August 1995 (the deed of release) and by the Staps under a separate deed of release dated 18 July 1995, (the Staps' deed). By that undertaking the owners have covenanted with the Corporation to refund indemnity payments in the event of the owners being compensated for the same loss in these proceedings."[38]

The appellants contend that recovery pursuant to s.87 can only be in respect of "the amount of loss or damage". They argue that once the building corporation made a payment to the owner under the insurance scheme the loss or damage which otherwise might have been suffered was reduced or extinguished. Thus, so the argument went, the cause of action against the appellants was extinguished because damage is critical to a cause of action for breach of s.52, and recovery under s.87.

As the respondent correctly points out, this contention involves two distinct propositions. The first is the factual proposition that the monies paid to the owners by the BSC were in respect of the same defective work for which damages were awarded by Hunter J. Hunter J, in the passage I have quoted, was not satisfied that there was such a clear coincidence of fact, and preferred that any overlapping be determined in proceedings between the Corporation and the owners, or if the Corporation sued the appellants, in those proceedings to which no doubt the owners would be joined. The second proposition is the legal proposition that payment to a beneficiary under a form of statutory insurance, where the beneficiary is not the owner of the insurance policy, extinguishes the beneficiary's cause of action against the party guilty of proscribed conduct causing loss equivalent to the loss which the statutory policy insures in favour of the beneficiary. No authority to support that proposition was cited. It is clear that if a person himself takes out an insurance policy to protect himself against defective work done by a third party, payment under that policy by the insurer does not destroy the insured's cause of action against the third party. In those circumstances the insured and his subrogated insurer have a cause of action in the name of the insured against the third party. I see no basis upon which a similar concept would not apply in present circumstances to preserve the cause of action by the innocent owners against the party guilty of proscribed conduct so as to entitle the owners to recover against that party, subject to any obligation between the owners and the BSC to repay monies paid to them by the Corporation in respect of which they have obtained recovery from the party guilty of the proscribed conduct. That, as it seems to me, must be the situation unless the cause of action is extinguished by payment by an insurer, and I know of no authority to that effect. None was cited.

I do not think that s.98 BSC Act can be construed as extinguishing the beneficiary property owners' right of action against a delinquent builder merely because the corporation has paid a claim under the BSC insurance policy. The section does not state that as a consequence of payment. As a matter of statutory construction I cannot see any basis for reading such a consequence into s.98(1). Reference to subrogation in s.98(2) is understandable because it is the insured who suffers damage as a consequence of defective materials or design work being provided by subcontractors or suppliers. However, whatever may be the position regarding s.98(2), I can see no basis for construing s.98(1) as extinguishing an affected house owner's right of action against a third party merely because a payment is received under the BSC insurance scheme. This head of appeal fails.

CORPORATION PAYMENTS OUTSIDE OF INSURANCE SCHEME

Members of the Misadventure Club, which included but was not entirely comprised of those persons on whose behalf the Commission sought relief under s.87, made claims against the Corporation alleging breach of its statutory duties related to the licensing of Kioussis under the BSC Act. After a mediation those claims were resolved by the Corporation paying to the Misadventure Club $375,000. A similar claim was mounted individually by the Staps and was similarly resolved by the Corporation paying to the Staps $37,500. The payment of $375,000 was made to "Misadventure Club, Russo & Partners Trust Account". Mr Russo was conferred with a discretion regarding its distribution. In fact it was used in whole or in part as a fighting fund.

As part of the deed of release accompanying the payment the claims for breach of statutory duty by the corporation were referred to. So too was the circumstance that the Corporation had paid claims under its insurance scheme. Clause 7 of the deed of release provided:

"The (group) agreed to advise the Corporation, except as may be prohibited by Court order, of any amount or benefit received by them as a result of the Trade Practices Commission action against the licensee which is an amount which is for rectification, completion or replacement of the work undertaken by the licensee for the (group) and agreed to immediately repay to the Corporation any such amount or benefit in so far as any such amount or benefit is referable to monies paid by the Corporation to or on behalf of the (group) whether prior to the date of this deed or in the future pursuant to the terms of any insurance scheme administered by the Corporation."

The appellants claimed that credit should be given for the sums of $375,000 and $37,500 when determining the amount of damages which they should pay in consequence of their proscribed conduct. Hunter J rejected that claim. His Honour did so upon the basis that it was incumbent upon the appellants to demonstrate that the sums of money so received from the Corporation were coincident with sums claimed in the action against the appellants. Having referred to the discussion by Samuels JA in Simonius Vischer & Co. v Holt & Thompson[39] of the coincident concept, Hunter J concluded :

"In my opinion, it is an unrewarding exercise, and an unwarranted one, to analyse the administration of this fighting fund as evidenced by Russo in order to ascertain the nature of any benefits which the owners may have received under the fund in assessing the damages suffered by the owners by the conduct of the respondents. The individuals comprising the releasors are not coincident with the owners. The consideration for the payment of agreed sums was, at least in part, the forbearance on the part of the releasors to sue the Corporation. There is no way of knowing whether the whole or any part of the agreed sums was calculated and agreed upon by reference to the very substantial sums that have been incurred by the releasors in their individual efforts to extricate themselves from litigation involving the respondents. In fact, the payment under the deed of release has always been treated as a fighting fund and I think that is reflected in the fact that no attempt was made by the Corporation to dissect the payment into individual entitlements."[40]

In my view Hunter J was correct. It cannot be said that the payments received under either deed related to the subject matter giving rise to the claim by the Commission on behalf of the affected persons. In terms the deed was expressed to be in resolution of the claim for an alleged breach of statutory duty by the Corporation causing loss to the claimants. That is a different subject matter to the claim by the affected owners against the appellants brought on their behalf by the Commission. Further, the fact that the members of the Misadventure Club undertook, not to pay the $375,000, if they received monies in the action brought by the Commission on their behalf against the appellants, but to repay any monies recovered in that action from the appellants "referrable to monies paid by the Corporation ... pursuant to the terms of any insurance scheme administered by the Corporation" makes plain that the payments received under the deed of release were not related to the subject matter of the claims brought by the Commission on behalf of the affected persons against the appellants. The position of the Staps in their separate action, settlement and release is not materially different. This head of appeal fails.

PAYMENTS MADE BY THE WOLLONDILLY SHIRE COUNCIL TO THE CORBETTS

Wollondilly paid the Corbetts $125,000. It did so after the Corbetts had alleged the Council breached its duty in approving defective plans. The appellants claimed a credit in that sum against damages which they were liable to pay pursuant to the s.87 claim. Hunter J rejected that claim principally upon the basis that it had not been established that the sum received related to matters the subject of the claim against the appellants in these proceedings. The trial judge expressed his reasons for rejection as follows:

"The Corbetts' deed recited the allegation of the Corbetts that they had suffered "loss and damage and a result of the council's failure to identify improper building practices during inspections of the (Silverdale) property ....": further that the "loss and damage (had) been caused and/or contributed to by the negligence and/or breach of agreement on the part of the council ....": it recited the fact that the council and its insurer did not admit any liability and maintained "a denial of liability in relation to the claim" and recited that the parties wished to "avoid the costs and risks of litigation". The agreement to pay the sum of $125,000 was expressed as follows:

"The council's Insurer agrees to pay the (Corbetts) the sum of $125,000 (one hundred and twenty five thousand dollars) inclusive of all costs and expenses."

The deed released the council and the insurer from all claims "which arise out of or are related to (the) recitals" and indemnified the council and the insurer against any such claims. It is reasonable to infer that some portion of the sum of $125,000 was paid to dispose of a claim for loss and damage arising out of the defective performance of some aspects of Venture's work. The difficulty of taking that sum into account in examining a different question, namely, the loss and damage suffered by the Corbetts by the contraventions of the respondents, stems primarily from the following considerations. First, the concept of damages which were at issue between the Corbetts, the council and its insurer is quite different from that of the loss or damage to be ascertained under s 87 of the Act. Second, partly as a result of that difference in concept and as a result of the different features of the contraventions with which these proceedings are concerned and the alleged acts of negligence of the council, it is difficult to identify any aspect of the s 87 loss and damage which could be said to fall within the damage the recovery of which was claimed against the council. There are some elements of the damage to be assessed in these proceedings such as for vexation or aggravated damages which have nothing to do with the nature of the claim against the council. Where there is some apparent coincidence of damage sought to be recovered in these proceedings and sought to be compromised in the settlement between the Corbetts and the council, identification of any amount of damage caught in that overlap is clouded by the fact that the payment of $125,000 represented a payment for the avoidance of the risk of litigation and included payments for unspecified and unquantified costs and expenses of the Corbetts. Claims advanced on behalf of the Corbetts in these proceedings detail costs of their solicitors engaged in the claim against the council and its insurer and I think it is reasonable to have regard to those details in endeavouring to evaluate the components of the payment by the council under the Corbetts deed. That has not been of particular assistance to me.

However, where I have been able to identify costs incurred by the Corbetts in pressing their claim against the council I have excluded those costs from the Corbetts' claim in these proceedings."[41]

Hunter J also rejected the appellants' contention that the Council and the appellants were joint tortfeasors so that release of one constituted release of the other.[42] He held that, at most, they were concurrent tortfeasors where release of one does not release the other.[43]

On appeal the appellants have not confronted Hunter J's reasoning on either aspect on which he rejected the claim. It is true that the Corbetts' claim against the Council was to obtain compensation for a defective house. The claim against the Council, however, was for defective approval of the plans for that house and inspection of it. The claim brought on their behalf against the appellants was for proscribed conduct under the TPA resulting in damage to them. It is simply too broad a proposition to equate those two claims, to assert that thus they were joint tortfeasors, and to further assert that payment of a lump sum unspecified as to constituent ingredients must necessarily be in respect of defective workmanship sought to be recovered in the s.87 proceedings, particularly where the deed of release makes plain that part of consideration for the settlement payment was the avoidance of litigation, and release of an undetermined claim.

The respondent based its case against Penelope Kioussis alleging, in accordance with s.75B, that she was knowingly concerned in the proscribed conduct by Venture. The appellants contend that there was no basis for his Honour inferring that she was so knowingly concerned.

It is sufficient to negate the integrity of that submission to quote the following passages in his Honour's judgment:

"I think the involvement of Penny Kioussis in this contract administration to this exploitation exposes her as a knowing and willing party to Venture's exploitation of the Corbetts. Her refusal to provide supporting invoices, her threat of stoppages if her demands were not satisfied, the illegitimate nature of the Venture claims, in my opinion stamp her with knowing involvement in Venture's conduct"[44]

"I think there can be little doubt that Penny Kioussis was involved in the Venture contravention concerning some of the owners, even if one concluded in her favour that she had no knowledge of the falsity of the representations concerning Kioussis' university degree. I think one starts with the fact that she was a director of Venture, present on occasions when the owners entered into contractual arrangements with Venture, that she acted as supervisor in more than one of the subject building works, and that she was involved in rectification works in some instances. I think one can infer from this close connection with various projects that she must have had some knowledge of the incompetence of Venture, given the extraordinary low building standards exhibited by Venture in all of its attempts to construct the owners' residential buildings. It seems to me beyond argument that at some early stage she must have been aware of the incompetence of Venture. In the absence of evidence from Penny Kioussis, I think I am entitled to infer from her extensive participation in the owners' projects that Penny Kioussis was aware, at all relevant times, of the incompetence of Venture.

Further, I think her involvement in the administration of variations should be viewed in the context of the role that claims for variation played in Venture's contraventions. The case against Venture has not been simply a case of sharp practice in relation to the charging for variations. The case which has been established shows that Venture concealed from the owners their financial exposure to Venture under the respective building contracts at the time of contract and, in this deception, recourse to variations during performance of the works played a central role. I think the evidence of Magaidis of his conversation with Penny Kioussis concerning her knowledge of Venture's use of variation claims should be seen in that context, particularly so in the absence of any evidence from her. I also consider that her particular dealings with the owners revealed her awareness of Venture's deceptive practices with variations at the time of preparation of contract documents for execution by the owners. It is very hard to accept that in submitting these claims that she was oblivious to their inflated if not fraudulent nature. A final general observation relates to her conduct on site. It was Penny Kioussis who was involved in some of the more unsavoury aspects of the performance of the works by Venture, including acts of vandalism and acts which offered no respect for the person or property of the owners. I do not think one can dismiss that conduct as irrelevant in the sense that it occurred after the contraventions which induced the owners to enter into contract with Venture. I think the conduct of Penny Kioussis should be seen as that of a director of Venture and as being one of its willing and knowing instruments."[45]

It is plain to my mind that there was abundant evidence, not able to be challenged on appeal, which justified his Honour's finding that she was knowingly concerned in the contraventions relied upon. The pleadings make clear that the proscribed conduct alleged was extensive commencing with the misrepresentations of Collings and extending through the various acts and misrepresentations of Venture. It was alleged and established that she was engaged and knowingly concerned in those activities. Accordingly, in light of s.80(1)(e) and s.87(1)(1A) and (1B) she was liable to an injunction and damages.

THE AWARD OF DAMAGES FOR VEXATION AND AGGRAVATED DAMAGES

Hunter J awarded the affected owners damages "for vexation or aggravated damages". This award was distinct from a claim for exemplary damages which was abandoned, it being accepted by the commission that exemplary damages were not recoverable pursuant to s.87 of the Act. The appellants had contended before Hunter J, and contend on this appeal that there should have been no award of damages for vexation or by way of aggravated damages. The submission had two bases. The first was that the conduct which caused damage to the affected owners was caused by them entering into the contracts. All loss flowed from that. Accordingly only damage caused "by the conduct" of entering into the contract could be considered. Damage caused by acts subsequent to that could not. Having assumed this narrow definition of the "conduct" complained of, the appellants thus contended:

"The subsequent events, however reprehensible they might be, do not constitute `conduct' with a causal link to any loss or damage, and such `conduct' cannot therefore constitute the basis for any claim compensable under s.87."

This submission was rejected by Hunter J. His Honour said:

"It has been submitted on behalf of Venture that I should not have regard to the manner in which the respective contracts were performed and, in particular, to acts of vandalism, of intimidation and of complete disregard for the property and dignity of certain of the owners. It was submitted on behalf of Venture that, if such conduct had been proved, then the owners should be left to independent remedies that may be available to them in respect of such infringements of their rights. The basis for that submission as I understood it was that such conduct was separate from, independent of and post dated Venture's contraventions. I do not agree. In my opinion, that was the implementation of conduct of Venture. I think it was part and parcel of the deception practised on the owners from the outset as to the nature of the organisation with which they were dealing. Included in that conduct, quite apart from the totally incompetent performance of the works, was the policy of harassment of owners who sought to resist the conduct of Venture by the institution of arbitrations and by the lodgement of caveats on the titles of the owners' properties. Given the importance of the subject matter of the contract to each of the owners, the conduct of Venture was calculated to cause considerable distress to the owners. In my opinion, Venture was singularly successful.

In awarding damages I do not see the need to distinguish whether the damages are awarded for vexation or by way of aggravated damages. In all instances, except in the case of the Quaglias, there was clearly considerable distress and anxiety created by the pattern of conduct of Venture in the way in which it virtually forced contractual commitments upon the owners, deceived them as to the contractual consequences of the documents which they were required to sign and as to the nature of the organisation with which the owners were dealing. This deception was reflected in the purported performance of the contracts, the series of claims for variations, which to say the least, bore the marks of being dubious and which commenced immediately after entry into the contracts. There then followed lodgements of caveats on title, the pressure for payment, threats of litigation, actual institution of arbitrations, performance of ineffective rectification works and, in some instances, seeking payment for that rectification. In all cases the works were performed to a deplorable standard of construction. When it is understood that the owners were persons of limited resources and when it is understood that they were put under significant financial pressure and were confronted with the destruction of all of their anticipations in achieving the construction of a residence for their establishment of a family home, it is not at all surprising that the owners suffered significantly. The damages for the most part I would treat as damages for vexation except for the acts of harassment, intimidation and damage to property, which, fit more into the category of damages for aggravation.

Generally, however, the damages, howsoever occasioned had the one effect of acute distress and anguish over a considerable period of time and I see no risk of duplication of damages by any failure to label damage as being for vexation or by way of aggravated damages."[46]

The factual basis for Hunter J's finding has not been challenged. I can see no legitimate basis for restricting the "conduct" complained of to the entering into of the offending contract, but disregarding the acts of the appellants in the implementation of those contracts. The claim against them was not so restricted.

The second basis of appeal advanced in written submissions was that it is "doubtful" whether claims for vexation or aggravated damages are recoverable as "loss or damage" within s.87(1A). This doubt was, in oral submissions, elevated to the submission that damages for vexation or aggravated damages were not recoverable under s.87(1A).

Hunter J rejected this contention holding that there was ample authority for such an award. His Honour referred to Holloway v Witham & Anor;[47] Perry v Sidney Phillips & Son;[48] Brickhill & Anor v Cook & Anor;49 Campbelltown City Council & Ors v MacKay & Anor,[50] Johnston & Anor v Irwin Johnston & Partners NSW Pty Ltd & Anor[51] and Zoneff & Anor v Elcom Credit Union Ltd.52

The appellant recognised in submissions that "damages have been awarded under the Act or similar legislation for distress, inconvenience and anxiety", but contended not for vexation or aggravated damages. Hunter J said:

"The damages for the most part I would treat as damages for vexation except for the acts of harassment, intimidation and damage to property, which, fit more into the category of damages for aggravation.

Generally, however, the damages, howsoever occasioned had the one effect of acute distress and anguish over a considerable period of time and I see no risk of duplication of damages by any failure to label damage as being for vexation or by way of aggravated damages."[53]

I respectfully agree. In support of this ground of appeal, the appellants contended that in consequence of the decision in Addis v Gramophone Co. Ltd,54 damages for distress for breach of contract are not recoverable. It is unnecessary to decide whether Addis correctly states the law in Australia because the acts relied upon to ground the claim for damages under this head are not damages for distress for breach of contract. They flow from the various acts to which Hunter J referred in the passages quoted which were consequent upon and subsequent to the entering into of the offending contracts.

I see no reason as a matter of principle why aggravated damages should not be recoverable under s.87. Section 87 provides for compensatory damages. If proscribed conduct causes anxiety, distress and vexation, the affected party is entitled to be compensated for that. Aggravated damages are not punitive: they are compensatory.[55] As Windeyer J said in Uren v John Fairfax & Sons Pty Ltd:[56]

"Aggravated damages are given to compensate the plaintiff when harm done to him by a wrongful act was aggravated by the manner in which the act was performed."

Damages for distress or hurt have been awarded in claims for breach of contract,[57] and in tort.[58]

The appellants submitted that "aggravated damages according to Finn Essays on Tort,59 relying on Archer v Brown,60 may only be awarded in instances of torts which protect dignatory interest. The statutory tort under s.87 does not concern itself with any such interest".

It may be doubtful whether it is correct to refer to compensatory damages awarded pursuant to s.87 as being for a "statutory tort". Be that as it may, the passage referred to in the essay in Finn: Essays on Torts, is from an article by Professor Luntz. It states:

"In theory, unlike exemplary damages, aggravated damages are compensatory, in that they compensate for insult, humiliation and similar feelings suffered by the plaintiff in consequence of the manner in which the tort was committed ... It seems that aggravated damages properly so-called, may only be awarded in instances of torts which protect the dignatory interest."

Authority for that proposition was said to be BHP Co. Ltd v Fisher.61 There Olsson J in a claim by BHP against a former employee for breach of contract of employment and misappropriation of property in respect of which aggravated damages were sought said:

In his decision in Pan Australia Credits (S.A.) Pty Ltd v Kolim Pty Ltd Matheson J cited the following extract from Halsbury, Laws of England, 4th ed. vol 12, par.1186 with approval-

"In tort, but not in contract, the plaintiff can be awarded additional damages, called `aggravated damages', to compensate him for his injured feelings. Aggravated damages, which are compensatory in nature, are to be distinguished from exemplary damages, which are punitive in nature. In the second and wider sense of the word, the plaintiff may be able to point to aspects of the defendant's conduct which have aggravated or increased his damage or caused additional heads of damage such as inconvenience."

The learned author of Luntz, Assessment of Damages, 2nd ed., embarks upon a most useful discussion of the authorities bearing upon the distinction between exemplary and aggravated damages at pp.63-73 of his text. I agree with the essential thrust of his summary. As he puts it the claim for aggravated damages must be based on a cause of action that protects the dignatory interest. Such damages are compensatory and not vindictive in nature. This type of concept would appear to be largely irrelevant in the case of a corporate plaintiff."

Professor Luntz in a footnote to the passage I have quoted from his essay suggests that the passage in Olsson J's judgment should be compared with the judgment in Archer v Brown where aggravated damages were awarded in a claim in tort grounded on deceit.

In the third edition of his book, Assessment of Damages for Personal Injury and Death,62 Professor Luntz wrote:

"Deliberately insulting conduct having the effect of hurting the plaintiff's feelings will often warrant both exemplary and aggravated damages and a single sum which does not distinguish the elements may be all that it is necessary."

"Similarly, in cases other than personal injury, a corporate plaintiff, unable to recover aggravated damages because its dignatory interest cannot be affected, may recover more substantial exemplary damages sufficient to act as a deterrent to the defendant and others (BHP Co Ltd v Fisher (1984) SASR 50,66)."

Halsburys Laws of Australia ((1995)vol 9, p.260,337) states, in defining aggravated damages:

"In actions in which damages (or a substantial element of them) are at large in the sense that they protect the plaintiff's interest in dignity, reputation, feelings or liberty, injury to the plaintiff may be aggravated by the defendant's conduct which, in the circumstances, is high handed, insulting or reprehensible. Such damages are known, technically, as "aggravated damages". They are designed to compensate the plaintiff for increased loss, not to punish the defendant, although their reference to the defendant's conduct means that there is an obvious danger of their confusion with exemplary damages."

It is not plain to me that the awarding of aggravated damages is to be restricted to the protection of what Professor Luntz describes as a "dignatory interest". Nor do I think it clear that a corporate plaintiff cannot receive aggravated damages. However, it is unnecessary to resolve either of these matters.

Here, the claim is by the Commission on behalf of named persons. Aggravated damages are plainly compensatory of injury to feelings caused by distress flowing from the offending party's conduct. Section 87 awards compensatory damages. I can see no reason why such damages should not be awarded to the Commission "on behalf of" the persons who suffered affront to their feelings in consequence of the actions of the appellants.

THE AWARD OF DAMAGES IN FAVOUR OF THE COMMISSION

Hunter J gave judgment in favour of the Commission in respect of damages claimed by the Commission on behalf of the various owners affected by the proscribed conduct. The appellants contend that a judgment in favour of the Commission was "impermissible under s.87". They contend that the judgment should have been in favour of the respective owners in nominated amounts.

It is not clear that the point was taken below. Indeed paragraph 37 of Venture's amended defence[63] contends:

"In regard to all of the building owners, Venture pleads that:

(a) Should this Honourable Court hold that the building owners, and hence the Plaintiff, is entitled to claim damages under the said Act, ..."

This seems to accept that s.87 confers an entitlement upon the Commission to an award of damages.

Section 87(1A) and (1B) contemplate an application by the Commission "on behalf of" persons deleteriously affected by proscribed conduct. The Court is empowered to "make such order or orders as the Court thinks appropriate against the person who engaged in the conduct or a person who was involved in the contravention (including all or any of the orders mentioned in subsection (2)) if the court considers that the order or orders concerned will compensate the person who made the application, or the person or any of the persons on whose behalf the application was made, in whole or in part for the loss or damage". An order for payment of damages to the Commission for payment to the persons affected is such an order. The appellants contend that the orders should be made directly in favour of the individual building owners. In my view either course is open to the Court under s.87.

The judgment which has been given in favour of the Commission, directs payment pursuant to s.87(1A) and (1B) "to the (Commission) on behalf of the persons listed below" The total sum to be paid is then divided amongst the affected owners in specific sums. Such an order is, in substance, and order in favour of the persons affected.

This ground of appeal, which in my view fails, affects only the form of the orders, not the substance of the judgment or the orders.

The appellants contend that in adopting the referee's report, Hunter J's exercise of discretion miscarried. His Honour should not have been comfortably satisfied that the factual issues had been considered and properly reported upon. Accordingly he should not have adopted the referee's report. In particular it was contended that the referee erred in determining the reasonable cost of reconstructing the building owner's houses, and erred, by denying to the appellants' natural justice, in not advising them during the course of the reference that he intended to have regard to his own appreciation of building costs rather than relying specifically on the evidence of a particular witness.

In challenging before an appellate court, a primary judge's acceptance of a referee's report, an appellant faces a difficult task. The adoption of a referee's report involves the exercise of a judicial discretion.[64] Unless it can be shown that in his consideration of the referee's report the primary judge applied the wrong principle in considering the report, took into account impermissible factors or reached a conclusion which was so erroneous as to demonstrate implicit error in his consideration of the adoption of the report, the challenge to the trial judge's adoption will fail.

Here it is plain that Hunter J applied correct principles in considering the question of the adoption of the report. He referred to the appropriate authorities at the commencement of his judgment of 28 September 1995, and in particular to the passage in the judgment of the Chief Justice in Super Pty Ltd v S J P Formwork (Aust) Pty Ltd.[65]

The essential complaint made on appeal was that the referee ought not to have adopted the costs which he did in assessing the cost of reconstruction of the buildings. There was evidence of cost other than that determined by him which ought to have been accepted. Hunter J should have recognised this and thus rejected the report.

This very question was addressed by Hunter J in his judgment dated 28 September 1995 at pages 7 and 8 where his Honour recognised the flexibility involved in the concept of determining a "reasonable rate" for work. His Honour referred to the instructions to the referee given by the Court which included a direction that the issues concerning costs presently being dealt with should be determined by the referee in a conclave of experts. Such a conclave occurred when varying views as to what constituted a reasonable rate were advanced by experts in varying interests. In essence, the referee adopted rates advanced by a Mr Moir. Hunter J dealt with the circumstances regarding the referee's acceptance of Mr Moir's rates at pages 13 to 18 of his judgment. His Honour made clear, in considering the competing technical views regarding rates, that the referee was entitled to have regard to his own experience and understanding in reaching an appropriate assessment. His Honour said:

"I think a further reason should be added as justification for adopting the referee's findings based on Moir's rates. The referee has found that Moir did not introduce into his construction of a category (a) rate concepts inappropriate to that exercise, in particular the concepts of luxury finishes and luxury materials. However, he has also found that the Moir rates "reflect the costs of workmanship and materials of reasonable quality during the periods in question". The referee is expert in this subject matter and I think this finding has particular significance in that context. It has been submitted that, if the referee had relied upon his own experience or expertise in favouring the adoption of rates of Moir over the rates evidenced by other experts who gave evidence before him, it was incumbent upon him to inform the parties of that fact. I do not agree. I think it goes without saying that, in the consideration of issues concerning the determination of appropriate rates for building work, the referee will have regard to his own experience and will, inevitably, favour rates which accord with his own knowledge and experience of an expert nature in the field. I think those remarks are particularly apposite when one is concerned with the determination of appropriate rates to be applied in estimating the cost of building works. It is not a case of the referee relying upon a particular piece of evidence within his experience which the parties have been given no opportunity to address and such as to involve the "fundamental rule of the common law doctrine of natural justice expressed in traditional terms" in Kioa v West ((1985) [1985] HCA 81; 159 CLR 550 at 582): nor is it a case of the referee gathering evidence for himself which is he obliged to reveal to the parties (cf Bread Manufacturers of NSW v Evans (1981) 56 ALJR 489). A distinction is to be drawn between reliance on general knowledge of the referee and his reliance upon experience of such particularity as would require its disclosure to the parties. There is no suggestion of the latter in this case."[66]

Hunter J's remarks make clear that the referee was entitled to adopt the rates of Moir.

Mr Collings, who appeared in person, sought to place before this Court, as he had before Hunter J, additional material which he claimed indicated that Hunter J's acceptance of the referee's assessment of reasonable cost was itself unreasonable because the new material demonstrated that there were lesser costs available from contractors. The material he wished to place before Hunter J, which was rejected by Hunter J, and not received by this Court, was material which Mr Collings had failed to place before the referee. As has been previously indicated, the referee had the advantage of all of the competing contentions regarding costs which the parties chose to place before him. On that material he reached a view concerning reasonable cost and Hunter J was satisfied to the requisite standard that the referee's report should be adopted. In accordance with the principles enunciated in Nine Network Pty Ltd v Kennedy Miller Television Pty Ltd,67 it is not appropriate for this Court to review the material placed before the referee, let alone to receive additional material which was not, but which might have been, placed before the referee when considering whether error has been shown in Hunter J's acceptance of the referee's report.

The true complaint on appeal was that in relation to particular costs of rectification determined by the referee, the referee disregarded evidence from persons at variance with his findings. That will almost invariably be the case. Hunter J was aware of that aspect and found, correctly, that the referee was entitled to reach the decision he did. Thus no error is demonstrated in Hunter J's consideration regarding adoption of the referee's report.

ASPECTS OF THE CALCULATION OF THE CORBETTS' CLAIM FOR LOSS OR DAMAGE

The appellants claim that the Corbetts salvaged and retained a substantial volume of building materials for which credit should have been given in assessing the damages payable. Hunter J did not give any such credit.

Hunter J addressed the reasons for this in his judgment.[68] Included in the matters referred, at the request of Venture, was the question "what amounts (if any) were received by or on behalf of any of (the named owners) for materials salvaged other than in rebuilding the house or rebuilding defects?" The referee responded:

"On the basis of the evidence given, no amounts were received by any of the listed proprietors for salvaged materials."

At the reference, materials salvaged by the Corbetts were listed. No value was attributed to them. The appellants called no evidence regarding the value of the listed items.

Further, before Hunter J, there was evidence from Mr Corbett that:

"No material from the demolished building works was sold. Whatever was capable of being re-used, was re-used in their rebuilding works. The remainder was dumped at the local garbage tip."

Hunter J was clearly entitled not to give credit for any items salvaged by the Corbetts in assessing damages payable by the appellants.

Hunter J awarded interest from the date of the last payment by the building owners to Venture (except in the case of the Quaglias where interest was awarded from the date of the last payment to Collings). In respect of the balance of damages awarded, interest was granted from the date of institution of the Federal Court proceedings.

The appellants contend that the Commission's cause of action arose only when "a person is found to have engaged in contravening conduct". Thus it was contended that the cause of action first arose on 10 December 1996, the date of Hunter J's judgment. Pursuant to s.94 Supreme Court Act 1970 , interest can not be awarded in respect of a period prior to the existence of a cause of action.

I would reject this argument. It is inappropriate to speak of a "cause of action" in relation to the home owners in respect of an application brought on their behalf by the Commission pursuant to s.87. The home owners are persons who have suffered loss or damage in consequence of proscribed conduct. The Court is entitled to make orders to compensate those persons for that loss. Loss flowed from the date of payment of monies to Venture and Collings where no benefit or reduced benefit was received in respect of that payment. Thereafter progressively other forms of damage were suffered. I respectfully agree with Hunter J that the selection of the date of institution of the proceedings by the Commission as the date for the commencement of interest calculation is a conservative date. Section 87, in my view, plainly confers a power to award the interest awarded. Section 87 does not require the determination of when any cause of action arose, as a claim for interest pursuant to s.94 Supreme Court Act 1970 might. The interest is here awarded as compensatory damage, pursuant to the statutory power conferred s.87.

Hunter J ordered that the first, second, third, fourth and sixth defendants, being the appellants, pay the plaintiff's costs including any reserved costs. He also ordered that the Commission pay the fifth defendant, Mrs Collings', costs, the action against her being dismissed. Venture has contended, wrongly in my view, that the first order to which I have referred required Venture to pay the Commission's costs of its claim against Mrs Collings. That plainly is not so. Further, Venture has contended that Collings occupied a significant portion of the hearing contesting liability during which time Venture had, with the trial judge's consent, withdrawn from the hearing.

A trial judge has a wide discretion as to costs. In proceedings as lengthy and complex as these great weight needs to be given to the exercise of the discretion of the trial judge in awarding costs. In my view no error in the exercise of that discretion sufficient to warrant the interference of this Court has been demonstrated.

The only additional matter raised by Mr Collings in his submissions not addressed by Senior Counsel for Venture and dealt with above, Mr Collings having adopted Venture's submissions, related to the question of causation. Shortly stated his contention was that accepting that Collings had designed but had not built the houses or otherwise participated in the subsequent events causing damage to the homeowners, it was "contrary to ordinary common sense and notions of cause and effect that Collings should be found liable to compensate the owners, except the Quaglias, for the consequences of Venture's admittedly defective building work".

Mr Collings would "draw a line in the sand" from the time at which he introduced or passed the homeowners to Venture for the purposes of determination of liability and calculation of damage. This argument is not dissimilar to the argument advanced by Mr Jacobs QC on behalf of Venture. He wished to "draw a line in the sand" at the point at which the homeowners signed the contracts with Venture and exclude events thereafter in the determination of liability and damage.

Each of these submissions proceeds upon a misconception of the case pleaded and established against each of Collings and Venture. The case was not simply that Collings had by misleading and deceptive conduct induced a contract. Nor was it that Venture had by similar proscribed conduct induced a contract with it. The allegations included the whole panoply of events commencing from the point of introduction of the homeowners to Collings and concluding with the purported performance of the contract by Venture. That whole was alleged to constitute the misleading and deceptive conduct or consequences of it. Hunter J found that case to be established, and his Honour's findings have not been successfully challenged. It accords with principles of causation to hold that Collings, and indeed Venture, were responsible for damages caused by the proscribed conduct.

COLLINGS CONSTRUCTIONS CO. PTY LIMITED v THE AUSTRALIAN COMPETITION & CONSUMER COMMISSION

VENTURE INDUSTRIES & ANOR v THE AUSTRALIAN COMPETITION & CONSUMER COMMISSION

THE AUSTRALIAN COMPETITION & CONSUMER COMMISSION

THE AUSTRALIAN COMPETITION & CONSUMER COMMISSION

SHEPPARD AJA: In this matter I have had the advantage of reading the judgment to be delivered by Cole JA. I am in agreement with his Honour's reasons and conclusions and with the orders which he proposes.

1 (1996) 137 ALR 47 at 48-51 inclusive.

[3] Reliance was placed upon Poignand v NZI Securities Australia Ltd [1992] FCA 369; (1992) 37 FCR 363 at 368 per Gummow J.

[4] (1996) 137 ALR 55-56.

[6] Fernando & Anor v Commissioner of Police & Anor (1995) 36 NSWLR 567 at 589-90 per Clarke JA.

[7] Submissions in Reply, 6 January 1998, paragraph 4.1.

10 (Unreported), 15 October 1997, pp.17-26, and in particular pp.23-26.

11 [1997] HCA 1; (1997) 71 ALJR 294 at 297.

[13] Judgment, 10 December 1996 pp.199-200.

[14] See Wardley Australia Ltd & Anor v The State of Western Australia [1992] HCA 55; (1992) 175 CLR 514 at 533.

[15] House v The King [1936] HCA 40; (1936) 55 CLR 499 at 504-5.

[16] See Golosky v Golosky (Unreported), Court of Appeal, 5 October 1993, per Kirby P, approved by the High Court in Singer v Berghouse (No.2) [1994] HCA 40; (1994) 181 CLR 201 at 212.

[17] Judgment 10 December 1996 pp176-177.

19 [1992] HCA 55; (1992) 175 CLR 514 at 525-6.

[20] Judgment 10 December 1996 pp.183-184.

21 [1988] HCA 64; (1988) 166 CLR 351 at 355-356 and 360.

[22] See also Rentokil Pty Ltd v Channon (1990) 19 NSWLR 417 at 430 per Mahoney JA, at 432, Meagher JA; see also the discussion concerning the scope of s.87 in Akron Securities Ltd v Illiffe & Ors (1997) 143 ALR 457 at 467 per Mason P.

23 (1997) 70 FCR 559.

24 (1995) 36 NSWLR 567 at 589-90.

25 [1992] FCA 557; (1992) 110 ALR 608.

[26] [1992] FCA 557; (1992) 110 ALR 608 at 611.

[27] [1992] FCA 557; (1992) 110 ALR 608 at 615.

[28] [1992] FCA 557; (1992) 110 ALR 608 at 620.

[29] [1992] FCA 557; (1992) 110 ALR 608 at 624-5.

30 (1997) 143 ALR 457.

[31] (1997) 143 ALR 457 at 468.

[38] Judgment 10 December 1996 pp.187-88.

[39] (1979) 2 NSWLR 322 at 360ff.

[41] Judgment, 10 December 1996 p.196-7.

[42] Thompson v Australian Capital Television Pty Ltd & Ors (1994) 54 FCR 513.

[43] Castellain v Electric Power Transmission Pty Ltd & Anor (1967) 69 SR 159 at 180.

[45] Judgment, Hunter J, 10 December 1996, p.244-5.

[46] Judgment, 10 December 1996, p.234-235.

[48] [1982] 3 All.ER 705.

49 (1984) 3 NSWLR 396.

[50] (1988) 15 NSWLR 501 at 504-5.

[51] (Unreported) Commercial Division, Rolfe J, 4 December 1995.

52 (1990) 4 ATPR 41-009 at 51,161.

[53] Judgment, 10 December 1996, p.235.

54 [1909] UKHL 1; [1909] AC 488.

[55] See generally XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd [1985] HCA 12; (1985) 155 CLR 448 at 470 per Brennan J; Coyne v Citizen Finance Ltd [1991] HCA 10; (1991) 172 CLR 211 at 216 per Mason CJ and Deane J; Carson v John Fairfax & Sons Ltd [1993] HCA 31; (1993) 178 CLR 44 at 66 per Mason CJ; Deane; Dawson and Gaudron JJ.

[56] [1966] HCA 40; (1966) 117 CLR 118 at 119.

[57] Jarvis v Swan Tours Ltd [1972] EWCA Civ 8; [1973] QB 233 per Denning MR at 237-8, Stephenson LJ at 240-41; Haywood v Wellers [1975] EWCA Civ 11; [1976] QB 446; Holt v Biroka Pty Ltd (1988) 13 NSWLR 629; Brickhill & Anor v Cooke & Anor (1984) 3 NSWLR 396.

[58] McNally v Welltrade International Ltd (1978) IRLR 497; Ichard v Frangoulis [1971] 1 WLR 556; Shelley v Paddock & Anor [1979] QB 120; Archer v Brown [1985] QB 401 at 424-6.

60 [1985] QB 401 at 426.

61 (1984) 38 SASR 50 at 65-66.

62 Luntz H, Assessment of Damges for Personal Injury & Death (Sydney: 3rd Ed, Butterworths, 1990), p.70.

[64] Nine Network Pty Ltd v Kennedy Miller Television Pty Ltd (Unreported, Court of Appeal), 8 June 1994, pp.10-12 per Gleeson CJ.

[65] (1992) 29 NSWLR 549 at 563-4.

[66] Judgment, 28 September 1995, p.18.

[68] Judgment 12 December 1996, pp.200-202.