(a) an order declaring the whole or any part of a contract made between the person who suffered, or is likely to suffer, the loss or damage and the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct, or of a collateral arrangement relating to such a contract, to be void and, if the Supreme Court thinks fit, to have been void from its beginning or at all times on and after such date before the date on which the order is made as is specified in the order,
(b) an order varying such a contract or arrangement in such manner as is specified in the order and, if the Court thinks fit, declaring the contract or arrangement to have had effect as so varied on and after such date before the date on which the order is made as is so specified,
(c) an order refusing to enforce any or all of the provisions of such a contract or arrangement,
(d) an order directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct to refund money or return property to the person who suffered the loss or damage,
(e) an order directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct to pay to the person who suffered the loss or damage the amount of the loss or damage,
(f) an order directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct, at the person's own expense, to repair, or provide parts for, goods that had been supplied by the person who engaged in the conduct to the person who suffered, or is likely to suffer, the loss or damage,
(g) an order directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct, at the person's own expense, to supply specified services to the person who suffered, or is likely to suffer, the loss or damage, and
(h) an order, in relation to an instrument creating or transferring an interest in land, directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct to execute an instrument that:
(i) varies, or has the effect of varying, the first-mentioned instrument, or
(ii) terminates or otherwise affects, or has the effect of terminating or otherwise affecting, the operation or effect of the first-mentioned instrument."
115 It has been observed that this section provides a "remedial smorgasbord" (Akron Securities Ltd v Iliffe (1997) 41 NSWLR 353 at 366 per Mason P). This is for a judge to consider as a matter of judicial discretion in fashioning the best remedy to compensate the injured plaintiff according to the justice of the case. It is clear that to the extent that an order can be made under s72(2) FTA (s87 TPA) for the payment of compensation, this overlaps with s68 FTA (s82 TPA). The difference between the two sections is that under s68 FTA (s82 TPA) a cause of action only arises when actual loss or damage has been suffered, whereas under s72(2) FTA (s87 TPA) it also arises when loss or damage is likely to be suffered: Wardley v Western Australia (1992) 175 CLR 514.
116 Whether an action is brought under s68 FTA (s82 TPA) or s72 FTA (s87 TPA), it is still necessary to show that the loss or damage claimed was caused by the contravention of the statute. The relevant question is, therefore, whether the innocent person has suffered loss or damage "by" conduct of the contravening party. Before considering the resolution of this question on the facts of this case, it is useful to set out a number of propositions derived from recent High Court authority in this area (principally Henville v Walker (2001) 206 CLR 459 and I & L Securities v HTW Valuers (supra)) on the proper approach to this question:
(a) The term "by" invokes the "common law practical or common-sense concept of causation" (cf March v Stramare (E & MH) Pty Ltd (1991) 171 CLR 506), except insofar as that is expressly or impliedly modified or supplemented by the provisions of the Act: Wardley Australia Ltd v Western Australia (supra) at 525 per Mason CJ, Dawson, Gaudron & McHugh JJ; Henville v Walker (supra) at 480 per Gaudron J, at 489 per McHugh J (Gummow J agreeing).
(b) The common law concept of causation is not, however, to be applied rigidly without reference to the terms or objects of the Act. Nor is the measure of relief available under s82 to be confined by analogy with actions in contract or in tort: Marks v GIO Australia Holdings Ltd (supra) at 510 per McHugh, Hayne & Callinan JJ, at 528 per Gummow J (the width of the potential application of s82 points against a narrow inflexible construction); Henville v Walker at 470 per Gleeson CJ, at 482 per Gaudron J, at 489-90 per McHugh J; cf Elna Australia Pty Ltd v International Computers (Aust) Pty Ltd [No 2] (1987) 16 FCR 410 at 419 per Gummow J.
(c) Causation is a question of fact to be determined by reference to common sense and experience, and one upon which policy considerations and value judgments necessarily enter: March v Stramare (E & MH) Pty Ltd (supra). In that respect, certainly in cases of complexity which warrant this (Harvey v PD (2004) 59 NSWLR 639 at 671 per Spigelman CJ) and perhaps more generally, a two-stage test of causation is to be applied in which the Court considers (1) whether factually the conduct in question is a historical cause of the damage, and (2) if so, whether normatively the defendant ought to be held legally responsible for that damage: see in the fair trading context Tambree v Travel Compensation Fund [2004] NSWCA 24; in other contexts, Pledge v Roads and Traffic Authority (2004) 205 ALR 56 at 59 per Hayne J (Kirby J concurring). The law looks at what influences the actions of parties, acknowledging that people can be swayed by several considerations to varying extents, rather than considering cause and effect in mathematical or philosophical terms: Como Investments Pty Ltd (In liq) v Yenald Nominees Pty Ltd (1997) 19 ATPR 41-550 at 43,619; Henville v Walker at 494 per McHugh J.
(d) Loss or damage is causally connected to a contravention of the Act if the conduct materially contributed to the loss or damage. It is not necessary that the conduct be the sole, principal or dominant cause (and, subject to (f) below, causation is satisfied even if, without more, the contravention would not have brought about the loss): I & L Securities v HTW Valuers (supra) at 121-2 per Gleeson CJ, at 128-9 per Gaudron, Gummow & Hayne JJ; Henville v Walker at 469 per Gleeson CJ, at 480 per Gaudron J, at 493-4 per McHugh J, at 508-9 per Hayne J; cf Gould v Vaggelas (1985) 157 CLR 215 at 236 per Wilson J, at 250-1 per Brennan J.
(e) In the context of s52, in the form of misleading conduct constituted by misrepresentation, acts done by the representee in reliance upon the misrepresentation amount to a sufficient connexion to satisfy the concept of causation: Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 at 348 per Mason CJ, Dawson, Toohey and Gaudron JJ.
(f) It may be that, whilst the facts constituting the contravention are, with other causes, necessary preconditions of the "loss or damage", in the circumstances of the particular case it is those other causes which are properly to be treated as the real, essential, substantial, direct, or effective cause of the loss or damage: Elna Australia Pty Ltd v International Computers (Aust) Pty Ltd [No 2] (supra) at 419 per Gummow J. Such a case may come to the point where the applicant's own conduct is so dominant in the causal chain as to be properly regarded as the real or effective cause (see Argy v Blunts & Lane Cove Real Estate Pty Ltd (t/as Blunts of Lane Cove) (1990) 94 ALR 719 at 744 per Hill J), though I observe that this seems to amount to a finding that there was no actual reliance on the conduct, such that it did not act as an inducement to the innocent party to take, or refrain from taking, steps giving rise to damage.
(g) Causation does not have to be established by direct evidence of the part the relevant conduct played. The Court may by inference determine the effect which a representation is taken to have had: Hanave Pty Ltd v LFOT Pty Ltd (1999) 43 IPR 545 (Federal Court of Australia, Full Court) at 555-6 per Kiefel J. Such an inference may arise where a representation operated as an inducement in circumstances where it was materially likely to induce the representee to enter into a contract and the person actually enters the contract: Gould v Vaggelas (supra) at 236 per Wilson J.
(h) For the purposes of s82, a person who has contravened the Act is liable for all of the indivisible loss of another that is attributable to the contravention. The Court cannot apportion the loss or damage suffered by the plaintiff in accordance with the parties' culpability. It is only where some severable portion of the whole loss is not causally connected with the contravention (in the sense that the contravention did not materially contribute to it) that that loss will not be recoverable under s82. Such cases are likely to be "exceptional" or "rare": Henville v Walker; I & L Securities v HTW Valuers at 117, 121-2 per Gleeson CJ, at 126 per Gaudron, Gummow & Hayne JJ, at 137-8, 141 per McHugh J, at 177-8 per Callinan J.
(i) There is nothing in s82, in other provisions of the Act or in the policy of the Act to suggest that a plaintiff's right to relief for loss of which the contravening conduct was a cause depends in any way on him or her having taken reasonable care for his or her own interests. Such an unreasonable failure to take care for one's own interests is relevant only insofar as it is the operative cause of a severable part of the loss to which the contravention did not materially contribute: Henville v Walker at 468 per Gleeson CJ ("the purpose of the legislation is not restricted to the protection of the careful or the astute"); I & L Securities v HTW Valuers at 121 per Gleeson CJ, at 126-130 per Gaudron, Gummow and Hayne JJ, at 138 per McHugh J, at 178 per Callinan J; cf Sutton v A J Thompson Pty Ltd (1987) 73 ALR 233 at 240-241 (Full Court, Federal Court of Australia); Neilsen v Hempston (1986) 65 ALR 302 at 309 (Pincus J).
(j) It is for the person whose contravening conduct materially contributed to the loss or damage to prove that some component of that loss or damage is referable only to some act or event other than his or her contravention: Henville v Walker per Gaudron J at 483.
117 In terms of the scope of recovery of monetary compensation pursuant to ss68 or 72(2) FTA (ss82 or s87 TPA), the following propositions emerge from the authorities (significantly Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388, Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494, Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 and Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1):
(a) Once causation is established, the measure of relief available under s82 is not to be confined by analogy to breach of contract, tort or equitable remedies (the width of the potential application of s82 points against a narrow inflexible construction): Murphy v Overton Investments Pty Ltd (supra) at 407 per curiam; Marks v GIO (supra) at 509 per McHugh, Hayne & Callinan JJ, at 528 per Gummow J; Gates v City Mutual Life Assurance Society Ltd at 14, per Mason, Wilson & Dawson JJ; Wardley Australia Ltd v Western Australia at 526;
(b) Although often the amount of loss or damage caused by a contravention of s52 for misrepresentation will coincide with what would have been awarded in an action for deceit, the question is what damage flowed from (in the sense of being caused by) the contravention: Marks v GIO at 512 [41] per McHugh, Hayne & Callinan JJ.
(c) It is necessary to identify the detriment which is said to be the loss or damage which has occurred (s82) or which is likely to occur (s87): Wardley at 526-532 per Mason CJ, Dawson, Gaudron & McHugh JJ; Murphy v Overton Investments (supra) at 407-8 [46] per curiam. The language of the statute does not support any assumption that loss in this context should be necessarily singular, or be incurred either on capital account or on revenue account: Murphy v Overton Investments at 408 per curiam.
(d) Economic loss caused by a contravention of the Act may take a variety of forms: Wardley at 527 per Mason CJ, Dawson, Gaudron & McHugh JJ. But where it is caused by misleading or deceptive conduct, it is central that the plaintiff has sustained a prejudice or disadvantage as a result of altering his or her position under the inducement of the misleading conduct:; Marks v GIO at 513-4 per McHugh, Hayne & Callinan JJ.
(e) Such loss is usually quantified by comparing the value of what was acquired (based on the price freely contracting fully informed parties would have offered and accepted for it) with what was paid, in order to assess whether the party misled could have acted in some other way (or refrained from acting) which would have resulted in him or her obtaining greater benefit or incurring less detriment: Marks v GIO at 514-5 per McHugh, Hayne & Callinan JJ. Detriment in this connexion refers to ascertainable detriment actually sustained, not merely the detriment of having entered into the contract, because risk of loss is not itself a category of loss unless and until that risk becomes ascertained or ascertainable; Wardley at 527-8 per Mason CJ, Dawson, Gaudron & McHugh JJ; Murphy v Overton Investments at 407-8 [46].
(f) Thus the loss can be described as akin to "reliance loss", and the measure of damages is that which applies in relation to torts (especially deceit and negligent misstatement), although it is the plain words of the statute which are ultimately determinative and it should not be assumed that the common law rules apply to all claims for relief under the Act: Gates at 13 per Mason, Wilson & Dawson JJ, Murphy v Overton Investments at 403, 407 per curiam. (For the common law principles on damages for misrepresentation, see Potts v Miller (1940) 64 CLR 282 and Toteff v Antonas (1952) 87 CLR 647 at 650-1 per Dixon J, and the cases therein cited.)
(g) A measure of damages for reliance loss will generally not include damages for loss of an expectation or profits, unless it be shown, for example, that reliance has deprived the innocent party of the opportunity of entering into a different contract in respect of which he would have made a profit: Gates at 13 per Mason, Wilson & Dawson JJ; cf Kyogle Shire Council v Francis (1988) 13 NSWLR 396, at 413-14 per Mahoney JA, at 417-18 per Clarke JA; see also Sellars v Adelaide Petroleum NL (supra) (standard of proof for lost opportunity).
(h) The measure of damages may vary depending upon whether the innocent party elects to affirm or rescind the contract, as it affects the terms of the comparison of what was acquired with what was paid for it: cf, eg Argy v Blunts & Lane Cove Real Estate Pty Ltd (t/as Blunts of Lane Cove) (supra) at 749-756. It is, however worth repeating that in all cases, it depends upon proper identification of the relevant loss or damage actually sustained and the application of the Act to compensate for that loss.
118 Once these principles are appreciated it is readily apparent how Havyn's claim for damages for misleading and deceptive conduct should be resolved.
119 It was clear from the evidence that the misrepresentation induced Mr Meyerratken and by extension Havyn to purchase the property. In his affidavit, sworn 6 June 2003, Mr Meyerratken deposed to the following:
"Had I been aware that the area of each flat was smaller than as represented and that in total there would be 42 square metres less available to be sold after refurbishment and conversion to strata title I would have reduced my profit projections by about $588,000. I would therefore determined that the amount that I should bid for the property would be considerably less than $3,000,000." [sic]
120 Apart from that evidence, this would have been a fair inference objectively to derive from Havyn having entered into the contract where a material representation which was materially likely to have such an inducing effect had been made: Gould v Vaggelas. The representation was used by Mr Meyerratken as an essential input in calculating the amount he should bid for the property. Had it not been made, he would not have bid as much as he did. Had he not bid as much as he did, he would in all probability not have been successful at auction. Had he not been successful at auction, he would not have incurred the losses particularised above.
121 As I have previously stated, the trial judge held that if he had found there to be a misrepresentation he would not have found there to be a sufficient causal link between the conduct and Havyn's loss and damage on the basis that Havyn "has failed to take reasonable care for its own interests and has sought to rely on particular words of the flyer which, although misleading in isolation, do not have that character when viewed in the light of the document as a whole." Apart from this factor it seems the trial judge would have found the test of causation satisfied and would have awarded Havyn its wasted expenditure apart from the claim for reasonable remuneration to Mr Meyerratken for services rendered to Havyn.
122 With great respect to his Honour, I consider that the approach he took to the issue of causation disclosed an error of law which led him astray on this issue. That error lay in elevating the improvident conduct of Mr Meyerratken to a cause of Havyn's loss to the exclusion of any causative influence of the misrepresentation. That indeed was the error identified by the High Court in the I & L Securities case. Where a misrepresentation is in fact relied upon by an innocent party to induce him or her to enter a contract it is, with respect, difficult to see how that very reliance can be treated as cancelling out the causative effect of the misrepresentation because of some supposed carelessness by the party in so relying. The law recognises that multiple factors may have a causative influence in bringing about a person's decision to act in a particular way, and does not require the conduct of the defendant to be the sole or even the principal cause of the loss. Although a misrepresentation alone has no causative effect in the absence of some action being taken in reliance upon it, for that reliance (or the unreasonableness of it) to be taken as the cause of the loss requires a finding that it is so significant, essential, direct or effective a cause as to negate entirely the materiality of the causative influence of the misrepresentation. It will be a rare case indeed where the quality of the reliance is such that it can in that way be regarded as so dominant in the causal chain as to be properly regarded as the real or effective cause of the loss. The onus of establishing that it should be so regarded lies on the contravening party. The vendor did not discharge this onus in the present case.
123 The above conclusion disposes of the issue of causation and damages so far as relevant on the appeal, no challenge being mounted by the vendor by way of cross-appeal to the specification by the trial judge of what damages he would have awarded if he were wrong on causation. In Ground 4 of the Notice of Contention annexed to its Notice of Cross-appeal, the vendor merely seeks to affirm the decision of the trial judge on the basis that "the Appellant did not suffer loss as a result of the representations in the brochure when the brochure is considered as a whole". This can be taken to be a re-agitation of the argument mounted at trial that the purchaser was so reckless in accepting the representations that the vendor's conduct ought not be regarded as the real or effective cause of the loss (see also the transcript on appeal, T, 73-4). That is a proposition I would not accept.
124 In particular, the vendor did not put in issue whether the particular heads of damage claimed by the purchaser, being the lost expenditure and deposit, were occasioned "by" the conduct of the vendor, or whether they were properly to be regarded as caused by the purchaser's own breach of contract. The approach of the court has always been to decide the issues joined before it by the parties and not merely to entertain questions of academic interest which have not been litigated, either in the court below or on appeal. It is therefore unnecessary to consider the considerable intricacies that might have arisen if an analysis upon those lines had been suggested. It must remain for another day to consider whether an innocent representee who affirms a contract instead of rescinding it, and then itself breaches the contract, so that the misrepresenting party (who is in contravention of the TPA or FTA) validly terminates the contract, suffers loss "by" his own breach or whether in a normative sense, responsibility for that loss should still be laid at the door of the party who contravened the statute. This would be on the basis that, taking normative considerations into account including the fact that but for the misrepresentation the purchaser would not have acquired the property (at least for the price he paid), the expenses of doing so were still occasioned by the misrepresentation.