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[1998] HCA 69
respondent. Appeal dismissed with costs
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Borrowers who were told their loan margin would stay fixed at 1.25 per cent but whose contracts allowed it to rise later could not recover under the Trade Practices Act when the lender increased the margin to 2.25 per cent. Although the representation was misleading, the borrowers could not show they were worse off: the loan was still cheaper than any market alternative, and they had been offered a no-penalty exit which they refused. The High Court held that mere disappointment of expectations is not 'loss or damage' for the purposes of ss 82 or 87. Relief requires proof of actual prejudice, not just that the deal was not exactly as advertised.
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The appellants, a group of borrowers led by M R Marks, entered into "Asset Accumulator Account" loan facilities with members of the GIO group between February 1991 and April 1992. GIO's promotional brochure and accompanying "Calculation of Prime Rate" document represented that interest would be calculated at a base rate (the average 90-day bank bill rate) plus a fixed margin of 1.25 per cent. The brochure stated the margin was "set at a margin of 1.25% above the professional money market rate" and the calculation document used the word "set". Oral representations by GIO staff reinforced that the margin would remain fixed for the life of each facility.
The formal letters of offer and the 13-page "Conditions of Use" told a different story. The definition of "margin" was "1.25 per cent per annum, as it may vary from time to time in accordance with the Conditions of Use". Clause 11.1 permitted GIO to vary any term on 90 days' prior notice. Despite this, the primary judge found that the brochure and calculation document conveyed that the margin would not change and that each borrower had been induced by that representation to enter the loans. There was no finding of fraud, but the conduct was held to contravene s 52 of the Trade Practices Act 1974 (Cth) (TPA) (and equivalent State fair trading legislation).
On 21 April 1992 GIO wrote to the borrowers (except Mrs Williamson, whose position was left for later determination) advising that, because of increased funding costs, the margin would rise by one percentage point to 2.25 per cent from 1 August 1992. Critically, the letter offered an unpenalised exit: borrowers could refinance elsewhere before 1 August 1992 without paying the deferred establishment fee or any break costs, provided they notified GIO by 30 June 1992. Most borrowers had drawn down funds before receiving this letter. None accepted the exit offer. Instead they sued, initially seeking to hold GIO to the fixed margin as a matter of contract (a claim that failed at trial and was not revived in the High Court) and, in the alternative, statutory relief.
At first instance Einfeld J found a contravention of s 52, rejected the contract claim, and awarded damages under s 82 measured by the one per cent margin differential from 1 August 1992 until judgment (or six weeks later for those who later refinanced). He declined relief under s 87. The Full Federal Court (Wilcox, Foster and Tamberlin JJ) allowed GIO's appeal. All three judges held that neither s 82 nor s 87 permitted recovery of "expectation loss"—the difference between the represented fixed margin and the higher variable margin actually charged. They regarded Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 as precluding such recovery. The borrowers' cross-appeal, which sought variation of the contracts under s 87, was dismissed without separate reasons.
By special leave the borrowers appealed to the High Court. The Court (Gaudron, McHugh, Gummow, Hayne, Callinan and Kirby JJ) unanimously dismissed the appeal, albeit for differing reasons. The joint judgment of McHugh, Hayne and Callinan JJ (with which Gaudron and Gummow JJ substantially agreed on the outcome) held that the borrowers had not suffered loss or damage because, even at the increased margin, the GIO facility remained cheaper than any other loan available in the market. They had been given a practical exit which they declined. Kirby J dissented on the availability of s 87 relief, considering that the Full Court had misapplied Gates and that discretionary relief should have been fashioned to prevent the borrowers from being held to contracts induced by serious misleading conduct. The formal order was that the appeal be dismissed with costs, leaving the Full Court's remittal order concerning Mrs Williamson on foot.
The majority reasoning begins with the text of ss 82 and 87. Both provisions are conditioned on a person having suffered, or (in the case of s 87) being likely to suffer, "loss or damage by" conduct in contravention of Pt IV or V. Section 82 permits recovery of "the amount of the loss or damage". Section 87 empowers the court to make "such order or orders as it thinks appropriate" provided the orders will compensate for or prevent or reduce the identified loss or damage. The statutory hinge is therefore the existence of loss or damage caused by the contravention, not the fact that a representation was made and not honoured.
McHugh, Hayne and Callinan JJ emphasised that the "bare fact that a contract has been made which confers rights or imposes obligations that are different from what one party represented to be the case does not demonstrate that the party that was misled has suffered loss or damage" ([47]). Value must be assessed objectively by reference to what fully informed, arm's-length parties would have paid. Because the GIO loan at 2.25 per cent was still the cheapest facility on the market, the borrowers obtained rights whose objective value equalled or exceeded what they paid. They were not "worse off" ([52]). The opportunity to exit without penalty before the increase took effect reinforced that they suffered no prejudice: they chose to remain.
Gaudron J reached the same conclusion by a slightly different route. She accepted that, but for the opportunity to refinance, the borrowers might have been able to demonstrate that they were likely to suffer loss if margins rose above prevailing commercial rates ([23]). Once that opportunity was given and declined, however, they could not say they were held to contracts they would have avoided. She noted that s 87 relief is forward-looking ("likely to suffer") and can be moulded to the facts, but the borrowers had not framed their case on the basis that future margin increases might exceed market rates. The evidence showed the opposite: even the increased rate was advantageous.
Gummow J focused on causation and the timing of any loss. The contravention of s 52 occurred on entry into the contracts, but the crystallisation of higher interest obligations only occurred after GIO exercised cl 11.1 and the 90-day notice period expired. By then the borrowers had been given the April 1992 exit offer. Their decision not to take it broke the causal chain between the original misleading conduct and the higher payments. He regarded the primary judge's award of damages as impermissibly treating the representation as if it had contractual force.
Kirby J would have allowed relief under s 87. He considered that "loss or damage" (extended by s 4K to "injury") includes the injury to the expectation of a fixed margin. He criticised the Full Court's "uncongenial and unjust" application of Gates and argued that the TPA's consumer-protection objects required a broad remedial response. The majority, however, held that statutory text, not broad objects or intuitive unfairness, must govern. Because the borrowers could not show they were worse off, the statutory precondition for relief was not met.
The Court was at pains to ground every conclusion in the evidence led at trial. The borrowers led no evidence that equivalent fixed-margin products existed, conceded the superiority of the GIO facility even after variation, and did not claim they would have borrowed nowhere had they known the truth. That evidentiary vacuum was fatal.
Before Marks the law was thought to be unsettled. Gates had said that tort rather than contract principles would usually supply the measure of damages under s 82 in Pt V cases, but expressly disclaimed a definitive choice between the two measures and did not address s 87. Lower courts read Gates as prohibiting recovery of "expectation loss" (the difference between what was represented and what was received) in both damages and s 87 variation claims. The Full Court in Jobbins v Capel Court Corporation Ltd (1989) 25 FCR 226 and the Full Court in the present case treated the disappointed expectation of a fixed margin as non-compensable. Conversely, Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 had allowed s 87 relief where purchasers would not have entered the transaction at all had they known the truth, even in the absence of quantifiable financial loss.
Marks clarified that the statutory inquiry is not whether the claimant has lost the benefit of the bargain as represented, but whether the claimant is objectively worse off. The decision aligns the TPA with the approach later confirmed in Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388, where the High Court again emphasised that loss is measured by the difference between the position the claimant is in and the position he or she would have been in but for the contravention. After Marks it is clear that a claimant must plead and prove an alternative counterfactual—better loan, no loan, or some other course of action that would have produced greater benefit or less detriment. Mere proof that a representation was false and relied upon is insufficient.
The decision also confirmed that s 87 is not a vehicle for punitive or deterrent orders. Its sole function is compensatory or preventive of identified loss or damage. Equitable analogies may guide discretion but cannot dispense with the statutory precondition. The pre-Marks uncertainty about whether "expectation loss" could be recovered under s 87 has been resolved against recovery where the claimant cannot show objective disadvantage.
Paragraph [47] (McHugh, Hayne and Callinan JJ): "The bare fact that a contract has been made which confers rights or imposes obligations that are different from what one party represented to be the case does not demonstrate that the party that was misled has suffered loss or damage."
Plain English: Signing a deal that is not exactly what you were promised is not, by itself, enough to sue for money or variation under the TPA. You must prove you are actually worse off.
Paragraph [15] (Gaudron J): "once it is appreciated that references to the 'established measures of damages [for] contract and tort', as in Gates, signify different kinds of loss and not different methods by which loss is measured, it is irrelevant to inquire as to the appropriate measure of damages for the purposes of ss 82 and 87 of the Act. Rather, the task is simply to identify the loss or damage suffered or likely to be suffered."
Plain English: Stop asking whether contract law or tort law supplies the right formula. The statute asks a simpler question: what actual harm did the misleading conduct cause?
Paragraph [48] (McHugh, Hayne and Callinan JJ): "A party that is misled suffers no prejudice or disadvantage unless it is shown that that party could have acted in some other way (or refrained from acting in some way) which would have been of greater benefit or less detriment to it than the course in fact adopted."
Plain English: You only lose if you can point to something better you could have done had you known the truth. If the loan you got was still the best on the market, you have no claim.
Paragraph [23] (Gaudron J): "It may be that the appellants could have put a case that, if held to their arrangements with the GIO, they either suffered or were likely to suffer loss or damage of a kind that should attract relief under s 87 of the Act. In this regard, it might have been put, for example, that it was likely that the margin might be increased so that interest was payable at a rate so much in excess of prevailing commercial rates that the appellants would then say that, had they appreciated that at the time, they would either have entered into more beneficial arrangements with other finance providers or, perhaps, not have entered into any loan arrangement at all."
Plain English: The borrowers might have won if they had argued that future margin rises could push rates above market levels and that they would have walked away or chosen a different lender. They did not run that case.
These passages, grounded in the joint reasons and Gaudron J's concurrence, now form the orthodox starting point for any TPA misleading-conduct damages or variation claim.
Marks is triggered whenever a claimant seeks TPA relief after entering a contract induced by a misrepresentation but cannot demonstrate that he or she is objectively worse off. Typical triggers include:
The precedent does not apply where the claimant proves he or she would not have entered the transaction at all (Demagogue), would have obtained a materially cheaper or better product, or where future events (for example, further margin increases above market) are shown to create a real chance of loss sufficient for s 87 "likely to suffer" relief. It is also distinguishable where the contravener seeks to hold the claimant to the contract without offering any ameliorating exit, as occurred in Demagogue.
Practitioners should note the evidentiary burden: the claimant must affirmatively prove the alternative course that would have produced greater benefit. In loan cases, this will usually require expert evidence of alternative facilities available at the relevant dates. In product cases, it will require proof that a superior product existed and that the claimant would have bought it.
Marks has been followed consistently. In Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388 the High Court cited it for the proposition that loss is the difference between the position the claimant is in and the position he or she would have been in but for the contravention. The Court again rejected the notion that disappointment of expectations without objective disadvantage constitutes loss.
Lower courts have applied it to bar claims where the claimant received market value. In Henville v Walker (2001) 206 CLR 459 the High Court distinguished Marks because the claimant there had proved he would not have entered the transaction at all. In Travel Compensation Fund v Blair [2002] NSWCA 367 the New South Wales Court of Appeal refused relief where the claimant could not show that a different investment would have produced a better return. Federal Court decisions such as Pavlovic v Universal Australia Pty Ltd [2010] FCA 644 have refused s 87 variation where the claimant failed to prove he or she would have obtained cheaper finance elsewhere.
The decision has been cited with approval in the context of share purchases, insurance, and franchise agreements. It has not been overruled or relevantly distinguished by the High Court. Later cases have, however, emphasised that the "no worse off" test is applied at the date of assessment, not merely at the date of contract. If subsequent events (for example, a sharp rise in interest rates) render the transaction disadvantageous, and that outcome was made more likely by the original misleading conduct, s 87 relief may still be available.
Several questions remain unresolved. First, the precise content of the "likely to suffer" limb of s 87 was not fully explored. Gaudron J accepted that a real chance of future loss above prevailing rates might suffice, but the borrowers did not run that case. Whether a claimant can obtain variation of a contract years later on the basis of a forward-looking risk remains open on facts stronger than those in Marks.
Second, the interaction between Marks and claims for consequential loss (for example, lost opportunity to invest the margin differential elsewhere) was left untouched. The borrowers claimed only the margin difference; no evidence of other losses was led.
Third, the position where the exit offer is itself said to be tainted by the original misleading conduct (for example, if the borrower was not told that better fixed-rate products had become available) was not before the Court.
Fourth, the extent to which s 87 can be used to vary contracts in a way that affects third parties (for example, guarantors or assignees) after Marks is unclear. The majority's insistence on identified loss or damage as the limit of the power suggests that variation cannot be used as a free-standing deterrent.
Finally, the decision's emphasis on objective market value leaves open how that value is to be proved when the product is unique or thinly traded. Expert valuation evidence will be critical, but the Court gave no detailed guidance on methodology.
These open questions mean that Marks remains a powerful shield for respondents but does not close the door on carefully pleaded forward-looking s 87 claims supported by robust counterfactual evidence. Practitioners advising claimants must now routinely obtain valuation and alternative-product evidence at the outset; respondents should look for concessions or evidence that the transaction remained market-superior. The decision has sharpened the focus on actual disadvantage rather than moral outrage at broken promises, a development that continues to shape TPA litigation more than 25 years later.
The application of s 87 to the present case may be approached on the footing that, as indicated earlier in these reasons, the borrowers would have sustained loss or damage when the increased margin came into operation on 1 August 1992. However, in giving notice by letter dated 21 April 1992, GIO did not, in Sir George Jessel's words, "seek to take advantage of [its] own false statements" nor, having obtained the contracts by misleading and deceptive conduct, did GIO insist upon keeping the borrowers to those contracts. Moreover, even with the increase in the margin, the AAA facility was more beneficial to the borrowers than any other available loan facility.
In those circumstances, in respect of borrowers who declined the GIO offer, an order adding a term to their AAA facilities to the effect that the margin was fixed at 1.25 per cent for the life thereof would not be a proper exercise of the discretion conferred upon the court by s 87(1A). It would not be an appropriate measure to prevent or reduce loss or damage suffered or likely to be suffered by the borrowers by reason of the increase of the margin to 2.25 per cent with effect from 1 August 1992. The increased contractual liability of the borrowers would be the product of their own exercise of choice, not the taking by GIO of advantage of its misleading or deceptive conduct by insisting upon keeping the borrowers to the terms of their facilities.
The borrowers did not make out a case for relief, whether under s 82 or s 87(1A) of the TP Act or the corresponding provisions of the Fair Trading Act.
As indicated earlier in these reasons, the third appellant, Mrs Williamson, is in a different position. There was an issue at the trial as to whether the letter dated 21 April 1992 was served on her. In their joint judgment, Wilcox and Tamberlin JJ said [135] :
So far as we can discern, that issue was not resolved by the [primary] judge. If the letter was not served on Mrs Williamson earlier than ninety days before 1 August 1992, it was, of course, ineffective to increase from that date the interest rate payable by her. In the result, the Full Court remitted the proceeding to the primary 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" [136] . 1. GIO Australia (1996) 70 FCR 559 at 562. 2. GIO Australia (1996) 70 FCR 559 at 562.
That order should stand, together with the other orders made by the Full Court. The result is that the appeal to this Court should be dismissed with costs.
Once again this Court has before it federal legislation which is said to be ambiguous. Depending upon the construction adopted, the appellants or the respondents will succeed [137] . Once again the function of the Court, in resolving the ambiguity, is to reflect upon the purposes and objects of the legislation and to adopt a construction which is most likely to advance those underlying goals.
The facts, applicable legislation and issues for decision
The borrowers and lenders invoke analogies to aid construction
(1) The meaning of "loss or damage" when used in the TP Act, both in ss 82 and 87 and whether those words incorporate by analogy the so-called "contract approach" or "torts approach" or some other approach derived by analogy from equity or elsewhere. Specifically, the question was presented as to whether the words, when read in their context and elaborated by the inclusion of the notion of "injury" [159] , extended to include loss of the expectation of profits as the borrowers urged and as GIO denied. (The loss or damage point); and
(2) The meaning and purport of the word "by", also appearing in both ss 82 and 87 of the TP Act, where it is declared necessary for the person seeking relief under the Act to show "loss or damage by conduct of another person in contravention of a provision of Part IV or V" of the Act. GIO submitted that this word imported notions of causation. It limited the provision of relief to a case where the person suffering loss or damage could show that the conduct of another person in contravention of the relevant parts of the Act, was the cause of loss or damage and that it did not derive from some other, different and separate cause. The borrowers accepted that a causal link to conduct contravening the Act had to be shown. But they contested that this imported a comparison (in the manner of the torts approach) between what the position would have been without the contravening conduct and what it was, the conduct having occurred. (The causation point.)
In the Full Court, the judges were even more vocal. They were unanimous in their expressions of reluctance. Wilcox and Tamberlin JJ pointed out that an order under s 87, such as was primarily sought by the borrowers, "would have the effect of preventing disappointment of the expectation induced in the [borrowers] by GIO's misleading brochure" [163] . However, their Honours concluded that Gates "expressly holds that damages are not available to compensate a misrepresentee for mere disappointed expectations". Their Honours went on [164] :
The Gates limitation might be thought unfortunate, as allowing corporations sometimes to avoid being obliged to match their performance to their marketing. But any review of the limitation must be for the High Court to undertake. While it remains, it precludes relief in respect of the respondents' mere expectation loss, whether by way of damages or a s 87 order. 1. GIO Australia (1996) 70 FCR 559 at 560. 2. GIO Australia (1996) 70 FCR 559 at 561.
The third judge was still more emphatic when he came to the provision of relief under the TP Act. Referring to Gates, Foster J stated that the opinion there expressed [165] : "gives scant encouragement to the introduction of more extensive remedies flowing from a misrepresentation or breach of s 52." His Honour recognised that relief under s 87 had not been sought in Gates [166] . Thus the passages in the reasoning in that case did not relate to a claim under s 87. But he found, nonetheless, that the reasoning was equally applicable to s 87. He concluded [167] :
[W]ere it not for this, I should be most attracted to the granting of that relief. The misrepresentation in the present case was, in my view, a serious one and was persisted in, even when it was known that there was an intention on the part of GIO to raise the margin. If it be accepted that a major underlying purpose of the TP Act and the FT Act is the maintenance of appropriate levels of commercial propriety then it would appear to be consonant with that purpose that in cases of this kind the representor be held to the representation as though it were, in fact, a binding contractual term. 1. GIO Australia (1996) 70 FCR 559 at 583. 2. GIO Australia (1996) 70 FCR 559 at 583. 3. GIO Australia (1996) 70 FCR 559 at 584.
One of the principal reasons for the grant of special leave in this case was obviously to permit a reconsideration of such uncongenial authority. After the present case was decided in the Full Federal Court, an opinion was expressed that the reasoning in Gates did not have the dire consequences which the Full Court itself felt constrained to apply. In Akron Securities Ltd v Iliffe [168] , Mason P, in the New South Wales Court of Appeal, reviewing the scope of s 87, disagreed with the opinions of the Full Federal Court. He said that, even if Gates applied to control the remedies that were available under s 82 of the TP Act [169] :
[I]t simply does not follow that s 87 could not be pressed into service according to its terms. That appears to me to be expressly what s 87(1) provides (cf "whether or not it makes an order under section 82") and expressly what was decided in Demagogue [Pty Ltd v Ramensky [170] ]. Foster J recognised this in GIO when he said that "the borrowers' inability in the present case to demonstrate any financial loss resulting from the misrepresentation is no bar to their seeking relief under s 87" Section 87(2)(d) speaks in terms of "an order to pay the amount of the loss or damages". 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 do not, in my respectful opinion, establish that s 87 offers nothing but rescission in cases such as the present. 1. (1997) 41 NSWLR 353. 2. Akron (1997) 41 NSWLR 353 at 365. 3. (1992) 39 FCR 31.
This, then, is the controversy. Did Gates require the result to which the Federal Court was so obediently but reluctantly driven? If not, should this Court provide the relief under s 87 which the majority judges of the Full Court, at least, would have provided had they not felt themselves prevented from doing so by the authority of Gates ?
There is no conclusive holding on the scope of s 87
It is appropriate to make a few general observations about s 87 of the TP Act upon which the borrowers principally relied. As was recognised in the Full Court, Gates was not a case which could provide a binding rule on the application of s 87. Although reference was made in passing to that section, its scope was not before this Court in Gates. This was because relief had not been sought under its provisions. Therefore, as a matter of binding authority, the point in issue in these proceedings was not decided in a way binding on the Federal Court. Accordingly, it fell to the Federal Court to reach its own conclusion, doubtless drawing by analogy upon any treatment of issues common to s 82 (there in issue) and s 87 and seeking to draw any available inferences from the treatment of one for the meaning of the other. For the elucidation of the present appeal, it is not necessary for this Court to overrule Gates if it considers that the appropriate relief available to the borrowers is, as they claim, under s 87, not s 82 of the TP Act.
There are material differences between the relatively narrow provisions for the relief in s 82 of the TP Act and those provided under s 87. In terms, s 87 is expressed much more broadly than s 82. Section 82 is confined to the recovery of "the amount of the loss or damage". That phrase postulates that an amount is ascertainable. The section contemplates that "loss or damage" has already been suffered. It is concerned with conduct in contravention of a provision of Pt IV or V Section 87, on the other hand, in both sub-ss (1) and (1A), provides for orders as the court thinks appropriate. It does so not only where a person who is a party to the proceedings "has suffered" the requisite "loss or damage" but where it is found that that person "is likely to suffer" such loss or damage. In the case of both subsections, reference is made to contraventions of a provision of Pt V of the TP Act. This is the Part of the Act dealing with consumer protection, within which s 52 appears amongst the various "Unfair Practices" which the Act is designed to sanction and remedy. Whereas s 87(1) also refers to Pts IV and IVA, s 87(1A) only refers to contravention of a provision of Pt IVA and not Pt IV [171] .
The range of orders which may be made, as contemplated by sub-ss (1) and (1A) of s 87 includes the payment "to the person who suffered the loss or damage" of the "amount of the loss or damage": language which exactly parallels that in s 82(1). The interrelationship between the two remedies, and the possibility that orders will be made both under ss 82 and 87, is made clear by the express language of s 87(1). But the other remedies, contemplated in s 87(2), travel far beyond those available by the law of tort to whose analogy Gates referred in the context of s 82. Not only do the remedies (apart from that in s 87(2)(d) and perhaps (c)) proceed much further than the traditional tort remedy of damages, but the variety of persons who might be affected by the orders exceeds even the extended ambit provided by s 82(1) which, in its turn, expanded the reach of a traditional action in tort. Thus, the power by order to declare that a contract or collateral arrangement was void ab initio [172] or to vary such a contract or arrangement [173] clearly has the potential to affect strangers to the contravention of the TP Act which enlivens the discretion to make orders under s 87. At this stage of the analysis, the analogy of s 87 to the traditional remedies in tort is looking rather thin.
The wide ambit of s 87 suggests large remedial powers
When the blinkers of analogy are removed and the terms of s 87 are examined, purely as a task of statutory construction, it is easy to recognise the very large range of contraventions to which orders under s 87 must be moulded. These include contraventions of provisions, in the case of sub-s (1) of Pts IV, IVA and V and, in the case of sub-s (1A) of Pts IVA and V. There is no doubt that contravention of s 52, which is the section here in question, enlivens both sub-sections and the range of orders provided for in sub-s (2).
More relevant to the present point is the need to examine the kinds of contraventions contemplated by the several Parts of the TP Act which enliven s 87, and the range of conduct which is thereby invoked, as potentially giving rise to loss or damage for which relief may, in a particular case, be appropriate. For example, Pt IV of the TP Act includes s 46 of the Act. That section provides for contraventions of the Act in the nature of misuse of market power. It forbids a corporation which has a substantial degree of power in a market from taking advantage of that power, inter alia to prevent the entry of a person into the market or to deter a person from engaging in competitive conduct. Obviously, in such a case, any "loss or damage" to which s 87(1) would apply would have to include loss of expectations of profit. By definition, no relevant profit would have accrued to the person kept out of the market. This is just one illustration of many, which arise from the diverse and varied contraventions to which the relief provided by s 87 must be adapted. It indicates why it is erroneous to define "loss or damage" in isolation or by reference only to tort concepts thought analogous to the particular case of contravention of s 52 of the TP Act. Because the words "loss or damage" must be given a meaning wide enough to embrace loss of the expectation of profits under s 46, the phrase in s 87 must, it seems to me, carry the same meaning when referring to any other contravention to which the section applies, including a contravention of s 52. By parity of reasoning (although Pt IV is not expressly mentioned), the same conclusion must be reached in respect of the phrase "loss or damage" when appearing in s 87(1A).
The words "loss", "damage" and "injury" confirm a broad approach
There is a further textual consideration. I have already mentioned that s 4K of the TP Act extends the definition of "loss or damage" throughout the Act to include "a reference to injury". In effect, this means that wherever "loss or damage" appears in the TP Act, one can add the words "or injury". The precise differentiation between "loss", "damage" and "injury" is not made clear. There is no authority on the point. But it is plain that the legislature has provided for the widest possible definition of adverse consequences flowing from (by) conduct in contravention of provisions of the TP Act. Clearly, therefore, by adding the words "damage" and "injury", the Parliament had a purpose to stress the notion of harm beyond any narrow concept of "loss". This is a further reason for rejecting the argument of GIO that, inherent in the idea of "loss or damage" was a detriment falling short of the damage consequent upon the deprivation of the expectation of profits which would have accrued if the contravention of a relevant provision of the TP Act had not occurred.
The TP Act should be construed to achieve its remedial purposes
Several other features of the TP Act as a whole, and of s 87 in particular, reinforce the foregoing reasoning which supports the borrowers' submission that their loss of expectation of a fixed marginal rate of interest is the kind of "loss or damage" (or "injury") to which s 87 may be directed. The TP Act is a significant measure of legislative reform [174] . Its purposes, at least where it provides for consumer protection and remedies, must therefore be given effect by the courts in a wholehearted way [175] . It would be quite wrong to defeat the achievement of the policy of the TP Act, and specifically of the remedies provided by the Parliament for its enforcement [176] , by construing the remedies narrowly by reference to supposed analogies developed in different times and for different purposes by the general law [177] . Experienced judges have declined to don a "strait-jacket" proffered by reference to historical analogies [178] . They have been right to do so.
The supposed constraints of Gates should be removed
Once this distinction is appreciated, whatever the failure of the analogy drawn in Gates between the approach to relief under s 82 and the approach of the common law of torts, the same step can certainly not apply to proceedings for relief under s 87. The barrier which the judges of the Federal Court felt stood in the way of the provision of the relief, which they would otherwise have granted, collapses. The borrowers at all times sought relief under s 87. They have never had a proper application of the section to their case. It was denied at first instance. Their cross-appeal demanding it was not determined. Subject to what follows, the proceedings should therefore be returned to the Full Court of the Federal Court to decide the cross-appeal. The supposed veil, felt to be occasioned by Gates, should be lifted from judicial eyes.
Discretionary arguments to deny relief should be rejected
GIO, however, contended that it would be futile to return the matter to the Federal Court on the ground that any proper exercise of discretion by that Court would be bound to result in the refusal of relief under s 87. It is here that I part company with Gaudron and Gummow JJ. I am far from convinced that refusal of relief was the only "proper exercise of the discretion" conferred by s 87 in this case. With every respect, I consider that that conclusion again falls into the trap of analogous reasoning from equitable principles [192] . It pays insufficient attention to the way in which the Parliament has provided for the machinery of s 87 of this Act to be the means of enforcing its will expressed (relevantly) in s 52.
It would be an extremely odd result for such proceedings to have been brought successfully and an unchallenged "serious" misrepresentation [193] solemnly found, yet the contraveners walk away scot-free. Those upon whom the contraventions were perpetrated would then be left bereft of statutory remedy. This would be specially puzzling given the character of the contravener as a group of major financial organisations, the gravity of the contravention found, the wide variety of the remedies provided by the Parliament together with the public as well as private purposes which the TP Act is designed to uphold. Such a result could perhaps be tolerated in the context of purely private litigation between parties in a court of equity. But it seems scarcely likely that it was the result envisaged by the Parliament when it enacted the consumer protection provisions of the TP Act and afforded the remarkable variety of remedies available under s 87 to uphold those protections.
GIO suggested a further reason for refusing an order under s 87, even if its narrow view of "loss or damage" were rejected. This involved an appeal to the causation point. GIO's final argument was that such loss or damage as occurred was not "by" conduct of another person who was engaged in contravention of the TP Act but "by" reason of the contractual liability of the borrowers under their several contracts with GIO. I disagree. Once it is accepted that "loss or damage" (or "injury") extends to loss of expectation of profits, the loss, damage or injury suffered by the borrowers in this case extends to the loss of the contractual terms which GIO misleadingly and deceptively represented to the borrowers would be "fixed" for the duration of their contracts. The result is scarcely surprising, given the purposes of the TP Act. Only that result breathes life into ss 52 and 87, where otherwise, a serious breach of s 52 would face a toothless s 87 and find no sanction or remedy there.
The discretion to afford relief should be exercised
There remain serious questions of a discretionary kind as to the precise remedy which should be afforded to the borrowers in the circumstances. The care which must be taken in fashioning such remedies is illustrated by many cases, most recently Akron [194] . But the exercise of that discretion has not been attempted until now because the remedies of s 87 have been regarded as unavailable to the borrowers. That conclusion, as I have shown, was erroneous.
Marks
GIO Australia Holdings Ltd
High Court of Australia Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ Marks v GIO Australia Holdings Ltd [1998] HCA 69
Although Gibbs CJ held [38] that the measure of damages in tort, not contract, should apply in the assessment of damages under s 82 where there has been a contravention of ss 52 and 53, the other members of the Court said expressly that "[t]he courts are not bound to make a definitive choice between the two measures of damages so that one applies to all contraventions to the exclusion of the other" [39] . Further, none of the members of the Court in Gates considered the circumstances in which relief under s 87 should be granted. 1. Gates (1986) 160 CLR 1 at 14, per Mason, Wilson and Dawson JJ, quoting from the reasons for judgment of the Full Court of the Federal Court. 2. (1986) 160 CLR 1 at 14-15. 3. Clark v Urquhart [1930] AC 28 at 67-68. 4. Gates (1986) 160 CLR 1 at 6-7. 5. Gates (1986) 160 CLR 1 at 14, per Mason, Wilson and Dawson JJ.
Assistance in the construction of s 82 is provided by s 4K which was inserted by s 6 of the Trade Practices Amendment Act 1977 Cth (the 1977 Act). It was suggested in argument that s 4K was concerned with the inclusion of damages for personal injury, thereby apparently providing some ground for the controversy which eventually was resolved in Wright v TNT Management Pty Ltd [94] and Concrete Constructions (NSW) Pty Ltd v Nelson [95] . There is nothing in its text to indicate that "injury" is so confined. Section 4K performs quite a different function in disentangling the various elements compounded in the concise language of s 82. "Injury" is used in s 4K in the sense of "actionable wrong" [96] . 1. (1989) 15 NSWLR 679. 2. (1990) 169 CLR 594. 3. See Crofter Hand Woven Harris Tweed Co Ltd v Veitch [1942] AC 435 at 442; see also Cable v Rogers (1625) 3 Bulstrode 311 at 312 [81 ER 259 at 259].
(1996) 63 FCR 304
(1996) 70 FCR 559
(1986) 160 CLR 1
(1991) 174 CLR 64
(1997) 188 CLR 159
(1998) 43 NSWLR 131
(1979) 42 FLR 331
(1991) 30 FCR 245
(1992) 39 FCR 31
(1997) 41 NSWLR 353
(1998) 196 CLR 494
(1988) 39 FCR 546
(1988) 58 FCR 274
(1992) 175 CLR 514
(1995) 184 CLR 281
(1985) 157 CLR 215
(1907) 4 CLR 1692
(1940) 64 CLR 282
(1952) 87 CLR 647
(1954) 28 ALJR 331
(1977) 16 ALR 23
(1991) 171 CLR 506
(1989) 25 FCR 226
(1907) 5 CLR 418
(1979) 145 CLR 107
(1988) 19 FCR 469
(1981) 53 FLR 340
(1989) 15 NSWLR 679
(1990) 169 CLR 594
(1985) 158 CLR 661
(1992) 38 FCR 248
(1913) 17 CLR 370
(1991) 172 CLR 32
(1993) 179 CLR 15
(1983) 65 FLR 213
(1986) 162 CLR 395
(1985) 7 FCR 509
(1982) 60 FLR 430
(1982) 69 FLR 392
(1987) 18 IR 355
(1992) 37 FCR 526
(1943) 68 CLR 428
(1987) 16 FCR 410
(1992) 173 CLR 492
(1998) 195 CLR 232
(1986) 160 CLR 540
(1991) 27 FCR 492
(1997) 188 CLR 114
(1997) 189 CLR 407
(1998) 192 CLR 557
(1993) 42 FCR 470
(1993) 114 ALR 1
(1998) 194 CLR 395
(1981) 36 ALR 23
(1996) 142 ALR 43
(1988) 13 NSWLR 629
(1977) 29 FLR 144
Appeal dismissed with costs