//
© 2026 Zoe. All rights reserved.
Zoe is a legal information platform. Always consult the Federal Register of Legislation for authoritative text.
[1999] FCA 1010
Federal Court of Australia
1993-08-26
Burchett J
Original judgment source is linked above.
THE COURT DECLARES THAT:
AND ORDERS THAT: 2. the respondents refund to her the additional instalments paid by her since that date to be agreed between the parties or communicated to the Court within 28 days for precise order 3. the respondents pay the fourth applicant's costs of the first instance hearing and the appeals to the Full Court and the High Court except the costs of the remitted issue on which the two parties are to bear their own costs 4. all parties, except the fourth applicant, pay their own costs of the first instance hearing, including all costs reserved at earlier stages in the case
Note: Settlement and entry of orders are dealt with in Order 36 of the Federal Court Rules.
INTRODUCTION 1 This case has a long and tortured litigious history. The applicants, including the first applicant representing several other persons, sued the respondents (the GIO) for damages and other relief in contract and under the Trade Practices Act 1974 (Cth) (TPA) and the Fair Trading Act 1987 (NSW) (FTA) as a result of loans made to them by the respondents between February 1991 and April 1992. Holding that nothing in the High Court's decision in Gates v City Mutual Life Assurance Society Ltd [1986] 160 CLR 1 prevented me from doing so, I awarded limited damages under section 82 of the TPA and the equivalent section of the FTA on 9 February 1996 and dismissed the claims for other relief, including under section 87 of the TPA, and in contract (reported at [1996] 63 FCR 304). 2 The decision was appealed to a Full Court (Wilcox, Foster & Tamberlin JJ) which on 21 November 1996 (reported at [1996] 70 FCR 559) unanimously upheld the first instance findings on liability. However, while expressing a belief that damages were appropriate in the circumstances, the members of the Court regarded themselves as bound by Gates to set aside the relief granted and to decline to grant a cross appeal for the alternative and wider relief that had been rejected at first instance. Justice Foster would have awarded the same or similar damages in contract. On 11 November 1998 the High Court by majority dismissed the applicants' appeal ([1998] 158 ALR 333), albeit for quite different reasons than had found favour with the Full Court. Liability was not argued, the only question being the availability of damages. The High Court in effect restored the first instance finding that Gates did not prevent damages in this case but held that the claim for damages failed because of the absence of remediable loss.
Notice of increased interest margin to one applicant
3 The facts of this matter are fully set out in earlier judgments and need not be repeated now. As the various judgments reveal, an important aspect of the case was the GIO's letter of 21 April 1992 to the applicants (the letter) notifying them of an increase in what was known as the interest margin in their loans from 1.25% to 2.25%. Notice of such an increase was required by the Conditions of Use of the Loan to make the increase effective. In the confusing circumstances to which I will come in more detail later, where the matter was pleaded but not truly evidenced or argued at trial and only resurfaced on appeal, the fourth applicant Mrs Alexandra Williamson denied that the letter was sent to her and therefore argued that she was not required to pay the increase. Her husband Hugh Williamson, who was a joint borrower with his wife and an original member of the class now represented by the first applicant, opted out of the class prior to the hearing but gave evidence at the trial. It is common ground that all the other applicants and represented parties received their versions of the letter. The increase took effect for all borrowers from 1 August 1992.
4 In a view apparently accepted by at least some members of the High Court, the majority in the Full Court (Justices Wilcox and Tamberlin) were of opinion that this issue of fact required a first instance decision and therefore remitted the issue for first instance determination in these terms:
We included the proviso about service in the preceding paragraph because there was an issue at the trial as to whether the letter was served on the fourth respondent, Alexandra Williamson. So far as we can discern, that issue was not resolved by the trial judge. If the letter was not served on Mrs Williamson earlier than 90 days before 1 August 1992, it was, of course, ineffective to increase from that date the interest rate payable by her. In that situation, the result suggested by Foster J would be appropriate to her case. It would not be appropriate in relation to the other borrowers, all of whom were admittedly served within time.
As it seems to us, the appeal must be allowed and the orders made by the trial judge set aside. In lieu of those orders we would order that the proceeding be dismissed except insofar as it relates to:
(i) the fourth respondent, Alexandra Williamson; and
Insofar as it relates to these topics, the proceeding should be remitted to the trial judge for determination of the issue concerning service of the letter of 21 April 1992 on Mrs Williamson and for the making of such orders, consequential on that finding, as are appropriate; and also for the making of such orders as he considers proper in relation to the costs incurred at first instance.
5 Justice Foster decided that the letter did not comply with the conditions for the notification of an increase in the interest margin so the question of service on all applicants, including Mrs Williamson, was irrelevant.
6 The majority's statement that there was an "issue at the trial" concerning service of the letter was repeated in the High Court, expressly by Justice Gummow at 366, apparently by Justice Kirby at 377-8, and impliedly by Justice Gaudron at 341. Justices McHugh, Hayne and Callinan, in their joint judgment, regarded the matter as "immaterial". I record these observations to introduce the first issue raised on the remittal viz whether the question of notice was an "issue at the trial". This question is in turn relevant because at the hearing of the remitted issue, the GIO sought to lead additional evidence on the point, arguing that this evidence was not produced earlier because the matter was not an issue at the trial. Mrs Williamson opposed the receipt of the additional evidence, both because in her submission the question of service was an issue at trial, because the documents now sought to be admitted were not discovered, and because further evidence was not contemplated by the orders of the Full Court and the High Court and is not permitted by the Federal Court of Australia Act 1976 in that circumstance. As a means of testing the admissibility of the proposed evidence, including whether leave should be given to rely on it, I allowed the evidence, and cross examination on it, on the voir dire and reserved the question of its admission until all matters had been argued. In addition, as the Full Court ordered, the costs at first instance, originally decided on 13 May 1996 generally in favour of the applicants (reported at [1996] 66 FCR 128), fall to be reconsidered in the light of the eventual outcome of the litigation.
7 It has always been common ground or may be accepted that between the time they applied for the loan and the date of the letter, the Williamsons moved their residence from Double Bay to Paddington and that if the letter was posted to her at all, it was sent to the Double Bay address. In the version of the statement of claim that was current at the trial, Mrs Williamson asserted that the notice had not been served on her. The GIO joined issue on this assertion. Both Williamsons made statements and gave evidence at the trial. They are both solicitors. Neither in her statement which was her evidence in chief at the trial nor in her oral evidence was Mrs Williamson asked or did she say anything about the receipt or non-receipt of the letter. Mr Williamson's statement included assertions that he had informed Rod Wilson, the GIO's loans officer handling this account, of the change of address more than once several months before the letter. His oral evidence included that the letter to him had never been received at Paddington, even apparently through readdressing from Double Bay. It does not seem that he made this claim in the pleadings while he was a member of the represented group, perhaps because an annexure to his statement indicated that he saw someone else's letter soon after its date. 8 Despite detailed written submissions by the parties after the actual hearings at first instance, the question of notice to or service of the letter on Mrs Williamson was not referred to at all. It was, presumably for that reason, not dealt with in the judgment. Moreover, the damages and other relief sought by Mrs Williamson - and the causes of action - were the same as the other applicants. If notice had been the issue, the relief would have been quite different in the sense at least that it would have been grounded in a different cause of action. The question of notice was, however, raised in the cross appeal to the Full Court in which Mrs Williamson sought to raise the GIO's failure to serve her with the letter at her last known address, which she said was not disputed at the trial, as impinging on her contractual rights. In her submissions in support of the cross appeal both before and during the hearing in the Full Court, she asserted that in the light of her husband's evidence that they had acquainted the GIO with their new Paddington address prior to April 1992 and the absence of any contrary evidence, the GIO failed to serve her with the letter by sending it to Double Bay. In other words, posting of the letter to Double Bay was not challenged. Only after the appeal hearing did she make a written submission challenging service altogether.
9 The cross appeal was not in terms disposed of by the Full Court although in the events which occurred, it must be taken to have been dismissed. As a result of the fact that in the High Court, the applicants were in substance relying only on section 87 for their relief, in contrast to the position in the Full Court and at first instance where reliance was placed on both sections 82 and 87, the omission does not matter.
The fresh evidence 10 The fresh evidence offered by the respondent consisted primarily of an affidavit by Paul Joseph Coyne who was in 1996 and 1997 Lending Manager of GIO Finance Ltd. The affidavit set out the procedure appropriate to loans of the type in question, including the actions taken when changes of address were notified. It annexed a number of documents. Mr Coyne was briefly cross examined on his affidavit. The effect of his evidence was that the GIO offered the Williamsons the relevant loan on 17 December 1991 in a document (the Letter of Offer) containing their Double Bay address. They accepted it on the following day and did not indicate, in the space specifically provided for the purpose, that a different address was appropriate. Apparently computer-generated accounts were sent every month even though the payments were made automatically from a bank account. The accounts were presumably sent to Double Bay. A computerised form letter was sent to the Williamsons at Double Bay on 9 June 1992 which could have called for a response but no response was received until 20 August 1992 when a letter from Mrs Williamson of 17 August to the GIO's marketing manager at the time, now sought to be tendered, was received. The Paddington address was on that letter. The first document sent to the Williamsons at the Paddington address, now on the file, is dated 31 August 1992. There are no records to show why or how the GIO changed the address for that letter but the entry of the change of address on the GIO's file cover was initialled by the same Rod Wilson mentioned by Mr Williamson at the trial. It seems likely that all correspondence prior to 9 June was sent to Double Bay including, Mr Coyne wished me to accept, the 21 April 1992 letter under discussion. Mr Coyne said that the letter was sent individually and separately to each of Mr & Mrs Williamson even though the account and file were in their joint names and all other documentation produced under the rubric of their loan was addressed to them jointly. There was no challenge to the authenticity of any of the documents.
11 In reply Mrs Williamson tendered affidavits by herself and her husband of 28 January 1997. Neither was cross examined although available. Mr Williamson stated that his discussions with Rod Wilson concerning their proposed change of address occurred prior to the acceptance of the offer of loan on 18 December 1991. Mrs Williamson stated that until she saw Mr Coyne's affidavit, she did not know that the letter of 21 April 1992 had been sent to her at all. She also said that she had and has never received a letter addressed to her personally in relation to this loan. Mrs Williamson also offered as evidence a letter from her solicitors to the GIO's solicitors dated 14 January 1992 containing a certificate of currency of an insurance policy which showed the Paddington address in two places. The GIO stated that if Mr Coyne's affidavit was admitted, it had no objection to the evidence of the Williamsons.
The contentions 12 The GIO argued that the failure to present this evidence at the trial is explained by the fact that despite the pleadings and Mr Williamson's evidence, the issue was in truth not raised or eventually argued. It was not presented on the appeal to the Full Court, the GIO said, because there the only contention was that the letter had been sent to Double Bay, not that it had not been sent at all - although the latter submission was made in written argument sent to the Court after the appeal hearing. The GIO said that no prejudice to Mrs Williamson is occasioned by the evidence and that its admission is in the interests of justice.
13 Mrs Williamson contended that the failure of the GIO to discover or produce the documents now presented until 18 months after the trial and seven months after the appeal strongly suggests that it either made no effort to find them or made a tactical decision not to produce them on discovery or in evidence. Either way, it failed to pass the basic tests for fresh evidence propounded in cases such as Commonwealth Bank of Australia v Quade [1991] 102 ALR 487 at 489-91; Bourke & Anor v Beneficial Finance Corporation [1994] 124 ALR 716 at 724; Akins v National Australia Bank [1994] 34 NSWLR 155 at 160-1, in which application for special leave to appeal to the High Court was refused : [1995] 10 LegRep SL3a. The submission was that the remittal was not an order for a new trial or for a continuation of the trial but for the determination of an issue remaining from the original trial on the basis of the evidence then taken. Mrs Williamson argued for a wide spectrum of prejudice if the evidence were admitted. I shall deal with the prejudice issue later.
14 The division of views in the Full Court and its non-determination of the cross appeal, and the High Court's ultimate order merely dismissing the appeal, for different reasons among the Justices all of which are in turn different to those which attracted the Full Court, without ruling as a Court on the remittal of the question raised by the Full Court concerning Mrs Williamson, has left the present situation quite confused in a number of respects. As I see it, the situation has thrown up these questions:
If the letter was not served on Mrs Williamson earlier than 90 days before 1 August 1992, it was, of course, ineffective to increase from that date the interest rate payable to her what in the upshot has been remitted?
The current standing of the remittal 15 Three of the High Court Justices stated that the Full Court's order of remittal concerning Mrs Williamson should stand while the other three said nothing about the issue at all except that Mrs Williamson's position was "now immaterial". I think that this remark, if a little ambiguous, should be taken to reflect the fact that the question before the High Court was limited although there does not even seem to be agreement as to what the limited question(s) was/were. In the words of Justice Gummow, the question was "the weight to be given, in construing the provision as to award of damages made in s[ection] 82 of the T[rade] P[ractices] Act, to the reasoning in Gates …". Justice Kirby thought that the issue was the availability of relief under section 87 to the applicants' situation. Justice Gaudron, and the joint judgment of Justices McHugh, Hayne and Callinan, expounded a view that the appeal concerned the meaning of the decision in Gates and its effect on the relief available under both sections.
16 However these differences should be resolved, it seems to me that the three Judges who regarded the separate situation of Mrs Williamson as "immaterial" were reflecting the limitation of the appeal to the generally applicable legal issues on damages which the appeal raised and not disagreeing with the order of remittal. For this reason, I consider that the remittal order stands. I shall return later to the question whether the High Court's decision had any other effect on the remittal.
The applicable legal principles 17 The principles laid down in Quade, Akins and other similar cases relate to the circumstances in which a new trial may be granted by an appellate court to an unsuccessful party at first instance on the basis of fresh evidence presented to the appellate court. The reasoning of the courts suggests that these principles, including a reluctance to deprive a successful party of the original verdict, are not applicable to a case remitted by an appellate court for the first instance determination of an issue in the proceedings which was not decided at the original trial.
18 The principles, which appear to have originally arisen from jury trials, are well known:
20 Such ideas have no obvious relevance to a situation where a further hearing is in fact ordered by an appellate court, especially when the hearing is required to complete the determination of the issues raised or thought to arise in the original litigation. In the absence of any authority defining or limiting the power of first instance courts in such cases - subject to what follows the parties cited none and I have not been able to find any - the only possible source for identifying the task is of course the Full Court's order itself in the light of the applicable statutory provision.
21 The Full Court's order remitting the issue of service of the letter of 21 April 1992 on Mrs Williamson was made pursuant to section 28(1)(c) of the Federal Court Act which permits a Full Court to "remit the proceeding to the court from which the appeal was brought for further hearing and determination, subject to such directions as the [Full] Court thinks fit". As is apparent, the Full Court gave no express directions in this case so that the admission of the evidence is a matter for decision now. Both parties said that this decision was discretionary. If so, the discretion must be exercised on the basis of the rules governing admissibility in such a situation.
22 Lynch v Howard [1980] 44 FLR 71 involved a request to a Full Court of this Court for remittal of an issue to the trial Judge which the Judge had already determined at first instance. The fresh evidence forming the basis of the appeal would have directly contradicted previous evidence given by the same witness at the trial. At 87 Evatt and Keely JJ said:
In our opinion, it would not be a proper exercise of this Court's power under s. 28(1)(c) to remit the proceedings for further hearing and determination on the assumption that, when the further hearing takes place, the respondents may, perhaps, be in a position to prove what they failed to prove at the trial.
23 As that Full Court did not remit the matter for further hearing, it is immediately distinguishable. Assuming without finding that the case may also be distinguished on its other facts, as the GIO contended, the decision only gives expression to the two often conflicting principles that underline the approach of appeal courts to requests for new trials based on the availability of fresh evidence to which I referred in paragraphs 18 and 19.
24 Mrs Williamson argued that the remitting power should not provide an opportunity to perfect an imperfect case and that all that should now happen is that the parties remedy the previous omission to make submissions on the remitted issue on the evidence taken at the trial. She claims extensive prejudice otherwise. The GIO contended that the evidence is within a small compass, does not prolong the proceedings, and there is no prejudice to Mrs Williamson which cannot be compensated by costs. It answered the criticism that the documents annexed to Mr Coyne's affidavit should have been but were not earlier discovered with the counter attack that Mrs Williamson's argument on the service issue had, at its height, accepted or assumed that the letter had been sent to Double Bay but had not reached her because she was then at Paddington. For that reason the GIO said that the failure to discover was irrelevant.
Principles governing admissibility of fresh evidence where issue was litigated at trial 25 Manifestly, if the question of service was not an issue at the trial, it cannot be said that the fresh evidence now offered should have been presented then. Subject to prejudice and costs, it would normally fall to be admitted now. If the only issue at trial was whether posting to Double Bay was good service, the evidence proffered is strictly irrelevant but could do no harm to Mrs Williamson because the facts alleged are common ground or not disputed. On the other hand, at the time of pre-trial discovery here, there was no test of relevance in the sense of admissibility of the discovered documemts, and service was or appeared to be a live issue on the pleadings. Accordingly these documents were clearly discoverable and should have been discovered, and if Mrs Williamson's conduct of the trial and/or the appeal was or could have been affected by the non-discovery, it would ordinarily be unjust to permit their use now.
26 To the extent that the GIO's arguments as to the lateness of the fresh evidence and on the discovery issue turn or rely on Mrs Williamson's written submissions after the hearing and at and after the appeal, they can easily be dismissed. No decision could have been made not to bring evidence on an issue at the trial or at the appeal if it was based on events that took place after the trial or after the appeal. Furthermore, the GIO could not have decided, in the context of the trial, not to bring the evidence or discover the documents in the knowledge that an issue on the pleadings would not be an issue at the conclusion of the trial. Nor could the fresh evidence be now admitted because the GIO misconceived or misunderstood the nature of the dispute as to the service of the letter. The GIO is a large corporation or conglomerate with ample expert legal advice available to it. If it was in doubt about whether there was a dispute as to service of the letter, its lawyers could and should have raised the matter with Mrs Williamson's lawyers or with the Court prior to or at the trial. It cannot sit back and wait to take any available tactical advantage of not doing so and only when it fails or is in danger of failing, seek to patch up the failure by presenting its evidence on the subject now. Trial by ambush is no longer permitted in Australian courts.
Issue at trial 27 While pleadings and joinder of issue do dictate the issues for trial for the purpose of pre-trial preparation and, subject to any limitation then announced by agreement or otherwise, at the commencement of the hearing, it is very common that pleaded issues drop out during the course of a trial, even after cross examination on them, such that only what is specifically maintained by parties in evidence and in final submissions based on the evidence dictate what issues are live at the end of the trial. It is true that as Mr Williamson was no longer a party by the time of the hearing, his evidence was that of a witness for his wife (and perhaps other applicants or represented parties). It is also true that he was, albeit briefly, cross examined on his receipt of the letter arising from the references to it in his statement and an annexure. It is also true that part of his statement on this subject which was objected to was allowed into the record as a submission by counsel for Mrs Williamson and the other applicants.
28 But these matters do not in my opinion displace or destroy the ordinary conclusion that the failure of Mrs Williamson to raise the question of service in any of its present forms in her statement which was her evidence in chief at the trial and in submissions after the trial meant that it was not an issue at the trial of her case. Moreover, when the orders for damages were eventually finalised and the issue of costs of the trial was argued on 1 May 1996, three months after the judgment, there was no mention of this issue not having been determined. It has still not been explained why the evidence offered by Mrs Williamson in the present proceedings was not included in her evidence at the trial. Even large corporate parties do not have to guess at what issues are live during and at the conclusion of a trial. It is for those who raise or wish to raise issues to do so explicitly and clearly, the more so in difficult trials such as this one involving unusual or special issues. That the failure to discover the documents in question cannot be explained on this basis and is otherwise unjustifiable, even reprehensible, does not mean that the trial miscarried for that reason. For in the way the case was concluded at trial and even through the appeal process, nothing turned on the non-production of the documents because of the issues contested at those hearings. I find that the question of the service of notice of the increase on Mrs Williamson was not an issue at the trial.
Requirements of the Federal Court Act 29 This finding means that if it is a relevant criterion for the admission of fresh evidence on a remitted issue, the reasonable diligence hurdle for its admission has been passed. But in my view, the terms of the Full Court's order and of the Federal Court Act are not as limiting as the requirements for a new trial based on fresh evidence not brought at an original completed trial where the issue to which the fresh evidence goes was definitively decided. I agree that some of the underlying concepts for those rules do apply such as the concerns about relitigation of issues already aired and the undue prolongation and high cost of litigation. But in my view the approach dictated by the Federal Court Act for this circumstance is different and requires the existence of a number of facts, inferences or assumptions, including that:
Prejudice 33 In addition to arguing for a limited scope of what is permitted by the Act on the trial of a remitted issue, Mrs Williamson submitted significant prejudice from the GIO's failure to produce the new evidence at the original trial because its production would have permitted her to argue there that: 1. neither she nor her husband received the letter; 2. no letters notifying them of the increase in the margin were ever sent to them; 3. there was therefore no effective margin increase in her case. She contended that her ability to do so would have caused the hearing to take a different course and the case would now be virtually at an end. Therefore the evidence should not be admitted now even if the subject matter was not in issue at the trial.
34 These statements turn the facts upside down. Mrs Williamson's evidence at trial did not deal with service. Her husband's evidence implied if not established no service. There was no contrary evidence. Yet despite this favourable state of the evidence on the question of service from her point of view, she made no submission at the trial of the kind she now suggests would have been made if the new evidence, not as favourable to her, had been called then. The hearing took no turn adverse to Mrs Williamson because of the absence then of the fresh evidence because the service question was not raised and not decided. If service had been raised during or at the conclusion of the trial without the fresh evidence being called, it would have been decided on evidence that was significantly more favourable to her than would have been the case if the fresh evidence had been called then. It was its absence that would have supported the suggested submissions, not its production. I reject this element of prejudice claimed. 35 Mrs Williamson next contended that she would be prejudiced by the admission of the evidence now because in place of arguments which would, according to the majority in the Full Court, entitle her to succeed in the proceedings - unless, as I would add, the High Court's decision requires some reconsideration of the Full Court's conclusion about this matter - she will be limited to an argument that posting to Double Bay was not good service as required by the Conditions of Use. Because that argument would involve the need for the Conditions of Use to be construed and a determination made as to whether posting to Double Bay constituted compliance, the possibility of further appeals and further expense is opened up. In view of the virtually unlimited capacity of the GIO to litigate, Mrs Williamson argued that the Court should limit its attempt to prolong the proceedings and add to their cost. As I have said and as will further appear, I do not accept that this limitation and therefore this prejudice exists at all.
Should the evidence be admitted? 36 If a hearing of the issue is to be conducted, or for that matter even if only a determination is to be made, on the remitted issue sensibly, evidence is essential. On one view, the issue here would be decided in effect upon the absence of evidence, at any rate of the very person who would be most expected to have direct knowledge of the facts and who, as I now know, has always been in a position to directly deny service. I refer of course to Mrs Williamson. The other view is in effect that all the available evidence, for and against, should be heard. I am strongly attracted by this latter approach. In other words, the issue should be decided on the available facts, not on an abstraction of the indirect evidence of Mr Williamson clouded by his obvious knowledge, demonstrated by the annexure to his statement/evidence in chief, of the letter soon after its date. I admit all the evidence offered by the parties on the issue of service.
Notice to where? 37 By a combination of clauses 11.1 and 14.6 of the Conditions of Use, the GIO was required to give at least 90 days written notice to Mrs Williamson of the increase in the margin. If the notice was given by post, it was to be sent to her "address as shown in the Letter of Offer or last notified" to the GIO. There is no requirement that the notice be received, only that it be sent to the appropriate address. 38 The GIO submitted at the threshold that the manner of service provided for was permissive rather than mandatory, so that as long as Mrs Williamson was notified in writing of the increased margin by some appropriate method, the notice would be effective even if given in some other way at some other place. This submission may be correct if for example an Australia Post courier handed her the letter, appropriately addressed, in a supermarket or at a football match or while she was on vacation. However, the submission is irrelevant for present purposes because the only notification suggested was by post to Double Bay. The GIO cannot rely upon Mr Williamson's statement in his letter to the GIO of 6 May 1992 that he had seen someone else's letter on 29 April as the notification to Mrs Williamson required by the Conditions of Use. The question therefore is whether the GIO was notified of the Williamsons' move before 21 April 1992. Only if that question is answered no is it necessary to determine whether the letter was sent to Double Bay. 39 The documentation and oral evidence at the trial showed that the Williamsons had, on 26 November 1991, purchased a house at 42 Dillon Street, Paddington for $445,000 and that the appointed settlement date was 7 January 1992. Other evidence showed that this date blew out to 20 January and then possibly 22 January which is when their loan was fully drawn. The evidence also showed unmistakably that the Williamsons took the loan in question to finance the purchase of this house in which they intended to live. The suggestion by the GIO that an inference was available of a purchase for investment is simply unsustainable. Mr Williamson's evidence at the trial was that he told the GIO's Rod Wilson that there was some urgency needed in the processing of their loan application, presumably because of the imminence of the holiday season and its closeness to their proposed settlement date. Another reason for urgency communicated to Mr Wilson was that they would be booking a removalist for their move from their rented flat in Double Bay to their new house on or close to the settlement date. No objection was taken at the trial to these conversations and there was no challenge to the conversations alleged. 40 As previously pointed out, Mr Wilson was the GIO's officer handling the Williamsons' file. Yet he was not called by the GIO then as now to rebut this evidence and no explanation has been given for his absence. Mr Coyne, who was called, has not had a single dealing with the Williamsons or any connection with their file at all. Accordingly, he did not know how or when the change of address on the Williamsons' file was made and initialled by Mr Wilson. Mr Coyne's evidence was that the copies of what he said were the separate letters of 21 April 1992 to the two Williamsons were held on a different file. That file cover has not been produced. Mr Wilson's evidence on this matter must have been helpful to the Court. Its quite glaring absence suggests that it was not likely to be helpful to the GIO's case in this litigation. 41 There is also in evidence two other letters to the GIO from the Williamsons, one from Mr Williamson of 6 May 1992 and one from Mrs Williamson dated 17 August 1992. Both gave the Paddington address but as they both postdated the letter in question they say nothing about the state of the GIO's knowledge on 21 April 1992. The earlier of the two letters did not, however, apparently bring about the change of address in the GIO's recording systems, at any rate such as to avoid its letter of 9 June 1992, to which I referred earlier, being sent to Double Bay. More importantly, the letter of 6 May 1992 expressly sent from Paddington made clear that although Mr Williamson had on 29 April 1992 seen someone else's copy of the letter of 21 April 1992 under discussion, his and presumably his wife's letter had not been received. Yet no letter was sent or re-sent even though he surmised in the 6 May letter that it would be. There is also the letter of 14 January 1992, close to the settlement of the Paddington purchase, from the Williamsons' solicitors to the GIO's solicitors with the insurance policy document for the new property noting the GIO's interest as mortgagee. And, not insignificantly, the loan was secured by a mortgage over the Paddington house meaning that the GIO, perhaps Mr Wilson himself, would have been present at the settlement to take custody of the title deeds. 42 Mr Coyne's evidence was that address details were not only carried on customers' files but also on the company's computer. If the file change can be traced to Mr Wilson some time in 1992, absolutely no evidence was led on how, when and by whom the Williamsons' address was changed on the computer except that Mr Coyne said that on his researches, the change was not due to anything received from the Williamsons. The account statement of 31 August 1992 is the first computer-driven document in evidence addressed to Paddington and the 9 June 1992 letter is the last computer-generated communication to Double Bay. Hence all that can be said to flow from the fresh evidence is that the computer change must have been made between those two dates as a consequence of some internal GIO operation. If it was brought about, as the GIO submitted, by the letter of 17 August 1992 from Mrs Williamson, it is difficult to see how that possibility fits in with Mr Coyne's evidence on the subject to which I have just referred, and why it had not been effected upon receipt of the 6 May letter from Mr Williamson. Perhaps more importantly, it cannot explain why the change did not follow the loan documentation given to and conversations held with Mr Wilson many months before.
43 In its submissions on the remittal, the GIO sought to argue that even if Mrs Williamson's arguments about notice were accepted, she has by making the additional payments since the letter waived her entitlement to rely upon the GIO's failure to give due notice of the increased margin. Waiver was not pleaded in the defence and there has been no application for amendment. But this argument must fail for other reasons as well. Firstly, Mr Williamson said in evidence that the payments were made "under protest and without prejudice ...". Second, his letter of 6 May to the GIO explicitly protested the increase. Third, the evidence shows that the loan instalments were deducted from his Westpac branch account automatically by a direct debit system no doubt originally authorised but, as he said without challenge, without authorisation of the increase. Fourth, Mrs Williamson commenced these proceedings in 1993. I dismiss the claim for waiver.
Conclusions 44 The GIO set up its own documentation and rules for these loans including those for notification of changes of address. It did not prescribe a particular method of notification. On the original Customer's Acknowledgment (acceptance) of the loan, there is provision for notifying an address change from the one on the Letter of Offer but at the time the Williamsons signed their acknowledgment, they were still living at the Double Bay address contained in the Letter of Offer. In these proceedings, the GIO argued for an inference that notification had to be clear and direct and not oblique or obscure. There can be little argument with that formulation of the notification requirement as a general statement but in my opinion it does not answer the problem here. No form had to be completed and there was in fact no requirement for the notification to be in writing at all. 45 In my view, the combination of the Williamsons' loan application documents, the unchallenged conversations between Mr Williamson and Mr Wilson and Mr Wilson's failure to give evidence, the other correspondence in evidence both prior to and just after the letter in question, and the very purpose of their loan itself, all lead to a strong if not overwhelming inference that the Williamsons clearly and explicitly notified the GIO of their change of address well before 21 April 1992. It seems less but still reasonably clear that the file alteration by Mr Wilson also predated the letter of that date but that for some internal reasons, this change was not transferred to the GIO's computer until August that year. The GIO's concession that the letter was not sent to Mrs Williamson at Paddington, together with my other findings about the notice which the GIO received prior to 21 April 1992 that she had changed addresses, therefore mean that, subject to anything in the High Court's decision which adversely affects the overall view of the majority in the Full Court as to the result of the case, the margin increase did not take effect against Mrs Williamson, and she is entitled to a refund of the additional payments from 1 August 1992 to date. 46 These conclusions mean in turn that the issue of whether the letter was sent to Double Bay does not have to be decided. I would, however, add for completeness that if that matter had been a live issue, I would have decided that the evidence was insufficient to establish that Mrs Williamson's letter was sent at all. At best Mr Coyne's evidence was of practice only and although he had no reason to doubt that the practice was followed in this case, there was also no basis for his saying that it was, other than that all other borrowers than the Williamsons received their letters. Of course there is a patent ease in making claims that letters are not received. On the other hand:
The effect of the High Court's decision 47 Mrs Williamson's award of damages at first instance was set aside by the Full Court on the basis that it was not proved that she suffered any loss or damage contemplated by either section 82 or 87 as the Court understood had been defined by the High Court in Gates. Although the cross appeal was not in terms dismissed, it is an inevitable consequence of the Full Court's decision that it refused to enlarge the damages ordered at first instance by expanding the period over which they should be calculated to the whole period of the loan.
48 By the time of the hearing in the High Court, the emphasis had shifted from damages under section 82 to damages and other relief under section 87 where relief may be granted even though actual loss or damage has not been suffered but is only "likely" to be suffered. What in substance the applicants were seeking, as they had sought at first instance and in their cross appeal to the Full Court, was a declaration that the GIO was bound to continue the loans at the original 1.25% interest margin. The consequence would have been refunds of all the extra interest paid since the increase on 1 August 1992. The members of the High Court significantly divided on the answer to the question which they all agreed was the one to be answered, viz. whether the applicants were worse off as a result of taking the loans. Justices Gaudron and Gummow were prepared to assume that they would or were likely to be worse off if the GIO had not in the letter allowed them to surrender the loan and refinance without the penalty which the loan agreements would otherwise have imposed. Justice Gummow specifically held that:
(a) the applicants' liability for the additional interest was caused by their failure to take that option; and (b) the only available relief under section 87 would have been an order that the GIO provide them with that option, but as it had, no such order was now appropriate. 49 Justices McHugh, Hayne and Callinan were of opinion that the applicants were not worse off. Justice Kirby was of the contrary opinion. Of relief under section 87, his Honour said: The ultimate relief to the borrowers [under s.87] may well fall considerably short of the variation of their contracts and restoration of the "set" margin for the entire duration thereof. That might indeed involve a "windfall" to the borrowers of which GIO repeatedly complained. But relief is available. To uphold the terms and purposes of the TP Act it should be provided. The proceedings should be returned to the Full Court for the purpose of fashioning an appropriate order. Such an order should accommodate, as well, the special order made by the Full Court in the case of Mrs Williamson. It would leave it open to the Full Court, if it considered it necessary or appropriate, to return defined matters for retrial so as to permit the provision to the borrowers of relief under s 87 to be determined free from the supposed shackles of Gates. 50 The Full Court majority's statement about relief to Mrs Williamson was that if the letter was not served on her, the result suggested by Justice Foster would be appropriate to her case. His Honour's suggested relief was put this way at 573 G: The borrowers have been overcharged in respect of the margin since 1 August 1992 and are entitled to recover the amount of that overcharge. GIO has power, in my view, to vary the margin, and when it exercises that power in accordance with cl 11.1 by notifying a variation of the definition itself it will then become entitled contractually to the increased margin; but not before. 51 As pointed out earlier, this result followed because, in his Honour's view, the letter had not been an effective notification of the increase as defined in the Conditions of Use. This view of the letter was not agreed in by the majority but in the case of Mrs Williamson, this difference of opinion does not matter because she did not receive the letter at all. The relief referred to would be granted in contract. All Judges of the Federal Court, both at first instance and on appeal, agreed that the contract of loan did not provide any entitlement to relief, a result that was conceded or not argued in the High Court. But this finding had nothing to do with whether the letter was sent or not, as the loan contract argued for was that the margin had, on a true construction of all the documentation, been fixed at 1.25% for the length of the facility. The case of Mrs Williamson for the relief proposed by Justice Foster is therefore based on a different contract, viz. the contractual requirement of 90 days notice before an increase can be imposed. So far as I can see, the GIO has never challenged this contractual requirement or that if notice was not given, the result proposed by the Full Court would follow.
52 Other than the fact that the Justices allowed the Full Court's order concerning Mrs Williamson's position, and presumably the projected result of her case to stand if notice was found not to have been given, notwithstanding their other disagreements with its reasoning, the High Court did not in my view say anything that would adversely impinge on the result in the Full Court.
53 Accordingly I find that the requirement of the Conditions of Use applicable to the loan that at least 90 days written notice of any increase in the interest rate margin be given to borrowers before the increase can take effect was not complied with in the case of Mrs Williamson. I therefore declare that the GIO was not entitled to increase the margin on Mrs Williamson's loan from the original 1.25% and order that it refund to the Williamsons an amount equivalent to the additional interest charge from 1 August 1992 to date. The parties are to agree on the appropriate sum so that, if required because of an absence of consent, I can incorporate it in the Court's orders.
Mrs Williamson's costs 54 It is common ground that in the event that her case succeeded, the GIO should pay Mrs Williamson's costs on a party/party basis. Were it not for the fact that its submissions on the costs of the other applicants expressly exclude Mrs Williamson's costs, and the orders of the Full Court and the High Court appear to do so as well, the GIO's concession must ordinarily include her costs of the first instance hearing and the appeals to the Full Court and the High Court. In any event, and whether conceded or not, this is the only sensible order to make now. 55 The position in relation to the further hearing on the remitted issue, on which both parties seek an order for costs, is not so clear because it is also necessary to factor in my finding that the notice issue was not in truth an issue at the trial. That finding means that the need for the additional hearing was brought about by the conduct of the trial by Mrs Williamson and her failure to seek then, or prior to or at the subsequent hearing on damages and costs on 1 May 1996, the first instance determination of the service issue, which she has now argued was raised but not decided on 9 February 1996. As mentioned earlier, this failure to say anything on the matter reinforces the finding that the notice question was not at that time regarded as having been an issue at the trial.
56 Notwithstanding Mrs Williamson's argument for the rejection of the GIO's argument in this respect, I accept its submission. That finding means that Mrs Williamson's request for an order for indemnity costs in relation to the application to adduce fresh evidence and, apparently, for the other costs of the remitted issue on a party/party basis must be refused. Because, however, the GIO should have explicitly inquired about the matter, the parties will pay their own costs of that element of the case.
The costs of the other applicants 57 The parties made submissions on this matter following the Full Court's judgment but before the High Court appeal. However, as I have earlier found, despite the High Court's different approach to the matter, nothing occurred there as should affect the position as it was before the final appeal. The GIO seeks an order that the applicants other than Mrs Williamson should pay its costs on an indemnity basis. It presumably seeks an alternative order for party/party costs on the basis that costs "follow the event". 58 I noted earlier that after the first instance hearing, and before the appellate outcome of this litigation had become known, I awarded costs to the applicants including some on an indemnity basis. In that judgment, I examined in some detail the issues affecting the costs of the first instance hearing including negotiations for settlement in the context of the legal principles applicable to indemnity costs. As the judgment reveals at 138, the focus at that time was on the GIO's refusal to settle on the basis of the applicants' discontinuance of the action with all parties to pay their own costs and the applicants to release the GIO from any inhibition on its power to increase interest rates in the future. The GIO now argues that it was unreasonable of the applicants to refuse its previous offer in April/May 1994 to settle on a more generous basis so far as they were concerned : see the facts outlined in the judgment on costs at 137. 59 The GIO says that the offer was significantly more favourable to the applicants than the outcome actually acheived and that in accordance with the principles set forth in that judgment and the authorities there cited, the indemnity costs order now sought should date from May 1994. The High Court's decision reinforces that argument because that Court's decision arose from the applicants' concession to it that at the time they took the loans, they could not have obtained cheaper finance elsewhere, and that they were not arguing that they would not have borrowed at all if the loan facility offered to them by the GIO had been as was found to have been represented. 60 The applicants opposed the GIO's application for indemnity or, it seems, any costs and argued to retain the original costs orders. Alternatively they asked for an order that the GIO pay their costs at first instance on a party/party basis. 61 It is difficult to recall a case in which parties have been so diametrically confrontational on so many issues raised. I speak not of issues, whether of fact or law, at the heart of the case but of almost every detail imaginable. The record bears testimony to the sad history of this litigation which at the end, even allowing for other borrowers not actually before the Court, actually involved quite a small sum of money. The orders of 1 May 1996 in respect of the applicants and represented parties only totalled $96,944.17. 62 Throughout the pre-trial process, there were almost endless "spats" between the parties for which both sides share responsibility. By the time of the hearing in June 1995, an action commenced two years earlier had become a fifth amended application and statement of claim filed on 26 April 1995, there were at least two interlocutory motions requiring judgments on 29 November 1994 and 21 April 1995, and numerous other "bar table" confrontations on time-consuming issues including relatively minor pleading matters that would have been dealt with out of court between parties who had retained a sense of proportion and balance and had shown some semblance of their responsibilities not to use a publicly-funded court as a boxing ring. 63 Just to give one example on each side - the applicants commenced the case with some concept that several thousand borrowers who had taken the loan facility in question might be involved. They later reduced it to ten and finished with a group of four (two of whom consisted of two joint borrowers) plus the other three individual applicants in the current proceedings. This process was lengthy and litigiously troublesome. 64 On the other side, these loans were made at a time when the GIO was being corporatised and privatised. It was difficult to ascertain which of the GIO companies took over responsibility for these loans and the GIO as a group was at best unhelpful, even evasive, in the ascertainment of the correct position. Eventually the fourth respondent was joined by consent but not until much litigious time and effort had been expended. 65 In fact, hardly a single matter of substance was agreed without a fight, including costs. The interlocutory judgments and the earlier judgment on costs bear further witness to this forensic picnic, at the end of which the applicants' case that the original interest margin was fixed for the whole period of their loans, and the GIO's case that there was no deception of its customers, both failed. 66 Nevertheless, the GIO argued that it was "entirely successful". This contention exaggerates the true position. Certainly it avoided an order for damages but it was found to have seriously deceived about 3000 borrowers. At the time it did so with at least some of them, it was a government-owned institution. Moreover, in order to establish its entitlement not to have to compensate such a large number of misled consumers even minimally, it had to run the gamut of having ten judges express widely differing views on the applicable legal principles, not to mention social factors, involved in cases of this kind. 67 For their parts, the applicants pointed to the importance to the community of consumer protection, to the vulnerability of ordinary citizens to the depradations of large corporations, and to the immense inequality in the resources available to place checks on their activities. As the cases have continually recognised, trade practices and fair trading legislation is important to the maintenance of a fair social order in Australia, and the protection of the community from unfair and deceptive trade and commercial practices is a legitimate and desirable goal of our society. However, court cases are not always the best place to fight such epic battles for the supremacy of right. 68 Having regard to the settlement discussions in 1994 and 1995 detailed in the previous costs judgment, if not to the damages actually awarded on 1 May 1996, to say that the legal costs positively dwarf what was actually in issue in these proceedings is to be too polite. The courts will not lightly lend themselves to a perpetuation of this position, even as the epilogue to this saga of indulgence. This Court is entitled, in the public interest if in no other, to look to parties and their lawyers to use its time more productively than has occurred here, and is entitled, even obligated, to use its powers in relation to costs to express disapproval of the conduct of the parties in particular cases. 69 This situation does not bespeak an occasion for another studious consideration of the authorities on the issue of costs. The Court may decline to order costs against an unsuccessful party where the litigation involved questions of the public interest: National Mutual Life Association of Australia Ltd v Windsor [1991] 28 FCR 214 at 229. It may make no order for costs in favour of a successful party and may, albeit in limited circumstances and rarely, even order costs against a successful party: Austin v Ansett Transport Industries (Operations) Pty Ltd (Burchett J unreported 26 August 1993); Verna Trading Pty Ltd v New India Assurance Co Ltd [1991] 1 VR 129 at 130-131. It is also permissible to share the costs between the parties in appropriate circumstances, especially where the parties have succeeded on some issues and failed on others : Cretazzo v Lombardi (1975) 13 SASR 4; Australian Conservation Foundation v Forestry Commission (1988) 19 FCR 127; 79 ALR 685; Schindler Lifts (Aust) Pty Limited v Debelak (1989) 89 ALR 272; 15 IPR 129; Latoudis v Cacy [1990] 170 CLR 534; Inn Leisure Industries Pty Limited (provisional liquidator appointed) v D F McCloy Pty Limited (No. 2) (1991) 28 FCR 172. Moreover, the regime for representative proceedings (class actions) under Part IVA of the Federal Court Act gives the Court a wide scope "to ensure that justice is done in the proceedings": ss 33ZF and 33ZJ. 70 It would, in my opinion, be quite unjust in this case to award all the costs of the proceedings at first instance exclusively to one party or the other. On the other hand, it would not now be possible, six years after the case began, to make an equitable division of the costs incurred in the pre-trial and trial proceedings. The case involved matters of clear public importance. Despite the ultimate success of its resistance to the relief sought, the GIO contributed to the length, complexity and cost of the process, sometimes quite unreasonably, and lost its major fight to be absolved of the allegation that it misled and deceived all these customers. Indeed, its marketing manager at the relevant time gave evidence at the trial that if he had been asked to provide written confirmation that the margin was fixed, he would have done so. His authority in this respect was not challenged. 71 On the other hand, although the applicants won a partial victory on liability, they failed to establish a contractual or other obligation to maintain the initial rate throughout the facility and obtained no compensatory order for the deception of which they were victims. They have also been ordered to pay the costs of the two appeals. 72 It is my view that the only just order in the circumstances is that all the parties, except Mrs Williamson, pay their own costs of the trial, including all costs reserved at earlier stages in the case. I certify that the preceding seventy- two (72) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marcus Einfeld AO.
Associate: Dated: 30 July 1999 Counsel for the first - third Applicants: Ms J. Anthes
Solicitor for the first - third Applicants: Cashman & Partners
Counsel for the fourth Applicant: Mr G. A. Sirtes
Solicitor for the fourth Applicant: H. F. A. Williamson
Counsel for the Respondents: Mr S. D. Kalfas
Solicitor for the Respondents: Phillips Fox
Date of Hearing: 5 February 1997
Written Submissions completed: 24 February 1997
High Court Judgment delivered: 11 November 1998
Date of Judgment: 30 July 1999
Marks
GIO
(1988) 19 FCR 127
(1991) 28 FCR 172
(1989) 89 ALR 272
(1975) 13 SASR 4