To obtain relief under ss 82 and 87 of the Trade Practices Act 1974 (Cth) a claimant must establish that loss or damage has been suffered or is likely to be suffered by reason of...
The bare fact that a contract differs from what was represented does not constitute loss or damage; the claimant must show prejudice or disadvantage by comparison with the...
Where the loan obtained remained more beneficial than any alternative available in the market even after the margin increase, and an opportunity to refinance without penalty was...
Issues before the court
Whether the appellants suffered or were likely to suffer loss or damage by GIO's misleading or deceptive conduct in contravention of s 52 so as to...
Cited legislation
No linked legislation citations have been extracted yet.
Plain English Summary
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.
AI-generated legal information, not legal advice. Zoe can make mistakes — check the cited source, and for advice about your situation consult a qualified Australian lawyer.
Deep Dive
2,888 words · generated 24/04/2026
What happened
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.
Why the court decided this way
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 and after state of the law
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.
Key passages with plain-English translation
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.
What fact patterns trigger this precedent
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 represented benefit is not available in the market at all (as with the unique GIO product).
The claimant is given an exit opportunity on favourable terms before the represented term is departed from and declines it.
The claimant concedes, or the evidence shows, that the transaction entered was still the best available even after the departure from the representation.
The claimant fails to lead evidence of a counterfactual (better loan, no loan, different security, different timing).
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.
How later courts have treated 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.
Still-open questions
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.
Judgment (71 paragraphs)
[1]
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.
[2]
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.
[3]
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.
[4]
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] :
[5]
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.
[6]
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.
[7]
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.
[8]
Other recent cases include Emanuele v Australian Securities Commission (1997) 188 CLR 114 at 140; Sheahan v Carrier Air Conditioning Pty Ltd (1997) 189 CLR 407 at 441; Cannane v J Cannane Pty Ltd (In liq) (1998) 192 CLR 557 at 588-591.
[9]
In construing legislation enacted to secure significant national economic objectives [138] , such as the provision of important remedial protection for consumers, the Court should resist attempts to divert it into a construction which would frustrate and defeat those objectives [139] . This is particularly the case when the construction proposed involves the use of analogies discovered by rummaging amongst the common law and equitable remedies which long preceded the enactment of the legislation and which often fail to reflect the full complexity of the applicable legislative purpose. That is what happened, in my respectful opinion, when these proceedings were before the Federal Court of Australia [140] . Part of the blame for this has been ascribed to passing observations in this Court in an earlier case concerned with the legislation [141] . However, those observations have been taken out of context. They have been blown out of all proportion. They have distorted fidelity to the purposes and objects of the legislation. The time has come to return to the statutory language and to construe it so as to achieve its intended results.
[10]
In s 2 of the Trade Practices Act 1974 Cth, it is declared that the object of the Act is "to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection".
2. In Accounting Systems 2000 (Developments) Pty Ltd v CCH Australia Ltd (1993) 42 FCR 470, approved in Webb Distributors (Aust) Pty Ltd v Victoria (1993) 179 CLR 15 at 41, Lockhart and Gummow JJ stated (at 503): "As is the case with Pt IV of the Act, the evident purpose and policy underlying Pt V recommends a broad construction of its constituent provisions, the legislation being of a remedial character so that it should be construed so as to give the fullest relief which the fair meaning of its language will allow."
3. GIO Australia Holdings Ltd v Marks (1996) 70 FCR 559.
4. Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 at 14-15, per Mason, Wilson and Dawson JJ. See also at 6, per Gibbs CJ.
[11]
The facts, applicable legislation and issues for decision
[12]
The facts are stated in the reasons of the other members of the Court. The legislation in question is the Trade Practices Act 1974 Cth (the TP Act). There are counterpart provisions of the Fair Trading Act 1987 NSW which were also relied on. However, it was common ground that nothing turned on the later Act and that the solution to the appeal could be found by concentrating exclusively on the TP Act. Similarly, although there was a factual nuance distinguishing the position of one of the borrower appellants (Mrs Alexandra Williamson), it seems appropriate to put her position to one side and to confirm, for the reasons which Gummow J gives, the special order made in her case by the Full Federal Court [142] . This permits me, as the other members of this Court have done, to look generically at the position of the borrowers (who are the appellants) and the lenders (who are the respondents). I shall describe the lenders without differentiation as "GIO".
[13]
At first instance, the borrowers sued GIO both for breach of contract and for breach of s 52 of the TP Act (and s 42 of the Fair Trading Act). Initially, the borrowers sought relief on four grounds: by the common law of contract; by reliance on the TP Act (and the Fair Trading Act); by reliance on the Contracts Review Act 1980 NSW; and by reference to equitable principles. Of these four grounds, three were variously disposed of before reaching this Court. First to go were the claims for equitable relief, apparently abandoned as part of an agreement to confine the issues in order to secure an early hearing in the Federal Court. Next, the claims for relief under the Contracts Review Act fell away. The final claim disposed of was that in contract. That claim was initially dismissed by the primary judge (Einfeld J) [143] , but subsequently challenged in the Full Court. One judge (Foster J) would have upheld the claim in contract [144] . He considered that the attempt by GIO on 21 April 1992 to alter the marginal rate of interest was ineffective. For that reason, although on grounds different from those given by the primary judge, Foster J would have dismissed the appeal. However, the majority in the Full Court (Wilcox and Tamberlin JJ) [145] confirmed the rejection of the contract claim. That claim has not been reagitated in this Court. It is in this way that the issues before us were narrowed to one claim for relief, being the claim under the TP Act.
[14]
Marks v GIO Australia Holdings Ltd (1996) 63 FCR 304 at 319-320.
2. GIO Australia (1996) 70 FCR 559 at 584.
3. GIO Australia (1996) 70 FCR 559 at 561.
[15]
The most important common ground about the facts affected both the borrowers and GIO. The borrowers agreed that, on the evidence, none of them could suggest that, if there had been no misrepresentation by or on behalf of GIO, they would not have borrowed from GIO at all. GIO was offering a particular financial "product", ie a contract which was unique in the market [146] . Consequently, it was not claimed that, by entry into that contract, the borrowers had lost an opportunity of securing (whether at the time of the initial agreement or at any time thereafter) an equivalent or better financial arrangement than GIO represented, even when the margin was altered. This was because no other credit provider was offering an equivalent or better "product". In that sense, if the ultimate question is whether the borrowers could prove that, had there been no misrepresentation, they could have secured an equivalent or better contract elsewhere than with GIO, the answer is that they could not. This consideration distinguishes the present case from most cases based on breach of s 52. So does the fact that GIO offered to release the borrowers on beneficial terms. It did not seek to hold them to the contract found to have been binding although procured by misleading conduct.
[16]
For the lenders, there was no challenge in this Court to the findings of the primary judge that GIO had engaged in misleading and deceptive conduct in breach of s 52 of the TP Act [147] . Specifically, the primary judge found, and it was uncontested, that GIO had represented to the borrowers that by entering into their respective contracts the margin, constituting part of the interest rate, was "set" at 1.25 per cent. It was found that this representation clearly conveyed the meaning that the rate would not be altered during the currency of each contract; that each of the borrowers relied on that representation; that each was misled by it; and that it was a factor in inducing them to enter into their contracts with GIO.
[17]
The primary judge also found that the representation, especially as contained in GIO's brochure, exerted a continuing influence on the minds of the borrowers in their appreciation of the terms of their contracts. It was unchallenged that employees and agents of GIO had made oral representations accompanying the written ones to the effect that the marginal rate was "set" for the life of the facility. The Full Court confirmed these findings. In argument, GIO made a passing reference to the fact that the respective GIO corporations were not themselves engaged in misleading the borrowers. However, as GIO, in its various manifestations, could only act through its employees and agents, this consideration is irrelevant. The finding of a breach of s 52 of the TP Act is the starting point from which the inquiry as to the relief (if any) which follows under the Act must proceed. As has been observed, proved contravention of the section is a "passport to extensive relief" [148] .
[18]
Farrow Mortgage Services Pty Ltd (In liq) v Edgar (1993) 114 ALR 1 at 6.
[19]
It was always the case for the borrowers that the relief appropriate to their claims, if misleading and deceptive conduct under s 52 of the TP Act were established, was to be found in s 87 rather than in s 82 of that Act. Their position was that because of the many difficulties in accurately calculating, for the future, the "amount of the loss or damage" contemplated by s 82, they were pointed from the start in the direction of s 87. Accordingly, it was their case that the practical relief to which they were entitled, once breach was proved, was an order varying the contracts between the borrowers and GIO "in such manner as [the Court] specified in the order" [149] .
[20]
The borrowers acknowledged that it would be possible to make an order under s 82 to the date of judgment (giving rise to a readily calculable sum) and thereafter varying the contracts between the borrowers and GIO to hold the latter to the terms of a contract without the misleading and deceptive element. However, in the courts below, and in this Court, the borrowers suggested that the neatest and most appropriate relief was an order varying the contracts between them and GIO on and from the date on which GIO had purported to depart from the set marginal rate, increasing that rate by one percentage point. Such an order would have practical consequences for a refund to the borrowers of any sums paid by them over and above the "set" marginal rate. The borrowers claimed that this order could be accommodated by a provision of s 87, namely, s 87(2)(c).
[21]
For its part, GIO contested the availability of relief under s 87. Its submissions were upheld both at first instance [150] and in the Full Court [151] .
[22]
Marks (1996) 63 FCR 304 at 329-330, 332.
2. GIO Australia (1996) 70 FCR 559 at 560, 584.
[23]
There was before the Full Court both an appeal by GIO and a cross-appeal by the borrowers. The cross-appeal relevantly challenged the orders of Einfeld J, suggesting that they were incorrectly circumscribed. The borrowers sought orders allowing the cross-appeal and substituting for the orders of the primary judge a declaration that the margin in the contract between the borrowers and GIO "be set at 1.25% as from 1 August 1992 for the term of each facility". The orders of the Full Court, whilst allowing the appeal and making orders in favour of GIO, made no provision for the disposal of the cross-appeal save for an order that the borrowers pay GIO's costs thereof [152] . By inference, the Full Court must have rejected the cross-appeal, although it did not say so specifically or so provide by order. Inherent in the reasoning of all of the judges was a conclusion that provision of relief to the borrowers was unavailable under the TP Act. Hence, the judges in the majority seem to have treated disposal of the appeal as determinative of the cross-appeal.
[24]
In this Court the borrowers did not seek a restoration of the orders of Einfeld J. They ultimately submitted that the correct order was to return the proceedings to the Full Court so that it might dispose of their cross-appeal to that Court, with the benefit of the guidance of this Court on the operation of the TP Act. It would then be freed from the shackles by which the Full Court had felt itself bound. In my view, this is the correct order. But before I propose it, I must explain how I arrive at it.
[25]
The borrowers and lenders invoke analogies to aid construction
[26]
Although there was much debate before this Court about the use of analogies to elicit the meaning and intended operation of the remedial provisions of ss 82 and 87 of the TP Act, there was no real dispute (nor could there be) that the duty of the Court was to give effect to the purpose of the TP Act as discovered, in the normal way, from its language and apparent objectives. All parties indulged in analogous reasoning. GIO suggested that the Court should adhere to the dicta of Gibbs CJ [153] and Mason, Wilson and Dawson JJ [154] in Gates v City Mutual Life Assurance Society Ltd. Their Honours there held, at least in the context of the assessment of damages under s 82 of the TP Act, that "the measure of damages in tort" was an appropriate standard for courts to use, by analogy [155] . GIO urged that this Court should adhere to that analogy, including in relation to relief under s 87. It should do so on the basis that it was simple to apply, of long standing and "plainly correct" [156] .
[27]
Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 at 6.
2. Gates (1986) 160 CLR 1 at 14.
3. In Gates (1986) 160 CLR 1 at 14, Mason, Wilson and Dawson JJ remarked that "there is much to be said for the view that the measure of damages in tort is appropriate in most, if not all, Pt V cases, especially those involving misleading or deceptive conduct and the making of false statements. Such conduct is similar both in fraudulent misrepresentation and negligent misstatement".
4. Gates (1986) 160 CLR 1 at 7, per Gibbs CJ.
[28]
The borrowers contested this analogy. They conceded that, in the application of novel legislative provisions affording remedies, it was natural for courts to look for analogies to guide them in deciding the measure of damages or the provision of other relief. But for their part, the borrowers urged an analogy with the relief available in the event that they could establish an entitlement to an injunction addressed to GIO to restrain it from purporting to amend the marginal rate of interest contrary to the representation found to have been made [157] . The borrowers conceded that the relief given by equity would be discretionary and that they would ordinarily have to show detriment of some kind to secure a discretionary order.
[29]
Various other arguments were advanced based on analogy with estoppel. It was also suggested that the rigid differences in the approaches previously adopted by the compartments of the law of obligation relating to tort and contract were eroding. See Hill v Van Erp (1997) 188 CLR 159 at 232-233; Elna Australia Pty Ltd v International Computers (Aust) Pty Ltd [No 2] (1987) 16 FCR 410 at 419, 420-421 ["Tort and contract today are separated by rather less than clear bright lines"], per Gummow J.
[30]
It can be seen, then, that both sides played with analogies, encouraged to do so by the early observations of this Court when first confronted by the novel provisions of the TP Act and the even more novel "remedial smorgasbord" [158] for which that Act provides.
[31]
Akron Securities Ltd v Iliffe (1997) 41 NSWLR 353 at 366, per Mason P.
[32]
Although there were several attempts to state the essential issues in the appeal in ways favourable to the interests of the respective parties, two ultimate issues emerged from the argument. They were:
[33]
(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
[34]
(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.)
[35]
It is some time since I have read so many utterances of reluctant judicial obedience to conceived authority as appear in the treatment by the Federal Court of this Court's decision in Gates [160] and how the Federal Court understood that decision to require a conclusion viewed as both uncongenial and unjust [161] . Einfeld J, noting the possible approaches to the provision of relief upon the basis of the misleading and deceptive conduct which he had found, identified as the primary and most obvious possibility the application of s 87 of the TP Act: adjusting each borrower's contract so that it provided a 1.25 per cent set margin for the life of the facility. His Honour acknowledged that "[t]his option would give the applicants what they thought they were getting at the time they signed the contract" [162] . Only the requirement of conceived authority diverted Einfeld J from providing such relief.
[36]
(1986) 160 CLR 1.
2. Another example may be the cri de coeur in Warburton v Whiteley [1989] NSW Conv R ¶55-453 at 58,286. See also Garcia v National Australia Bank Ltd (1998) 194 CLR 395.
3. Marks (1996) 63 FCR 304 at 330.
[37]
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] :
[38]
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.
[39]
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] :
[40]
[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.
[41]
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] :
[42]
[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.
[43]
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 ?
[44]
There is no conclusive holding on the scope of s 87
[45]
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.
[46]
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] .
[47]
Pt IVA was added to s 87(1A), with effect from 21 January 1993, by s 19 of the Trade Practices Legislation Amendment Act 1992 Cth.
[48]
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.
[49]
The wide ambit of s 87 suggests large remedial powers
[50]
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).
[51]
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).
[52]
The words "loss", "damage" and "injury" confirm a broad approach
[53]
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.
[54]
The TP Act should be construed to achieve its remedial purposes
[55]
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.
[56]
ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 at 256. See also Second Reading Speech in Australia, Senate, Parliamentary Debates (Hansard) 27 September 1973, p 1013, where the Minister (Senator Murphy) said (at pp 1013-1014): "In consumer transactions unfair practices are widespread. The existing law is still founded on the principle known as caveat emptor - meaning "let the buyer beware". That principle may have been appropriate for transactions conducted in village markets. It has ceased to be appropriate as a general rule. Now the marketing of goods and services is conducted on an organised basis and by trained business executives. The untrained consumer is no match for the businessman who attempts to persuade the consumer to buy goods or services on terms and conditions suitable to the vendor. The consumer needs protection by the law and this Bill will provide such protection."
2. See, eg, Second Reading Speech, at p 1015: "I now refer to some features of the drafting of the Bill. Legislation of this kind is concerned with economic considerations. There is a limit to the extent to which such considerations can be treated in legislation as legal concepts capable of being expressed with absolute precision The present Bill recognises the futility of such drafting The Courts will be afforded an opportunity to apply the law in a realistic manner in the exercise of their traditional judicial role." These comments apply equally to the consumer protection provisions as to the restrictive trade practice provisions, and must be seen as encouraging judges to uphold the underlying purposes of the Act. See also French, Judicial Approaches to Economic Analysis in Australia, in Round (ed), The Australian Trade Practices Act 1974: proscriptions and prescriptions for a more competitive economy (1994), p 89.
3. Mister Figgins Pty Ltd v Centrepoint Freeholds Pty Ltd (1981) 36 ALR 23 at 56.
4. Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 at 37-39; Akron Securities Ltd v Iliffe (1997) 41 NSWLR 353 at 364.
5. Trade Practices Commission v Collings Construction Co Pty Ltd (1996) 142 ALR 43 at 73, confirmed Collings Construction Co Pty Ltd v Australian Competition and Consumer Commission (1998) 43 NSWLR 131 at 144-150, per Cole JA; cf Holt v Biroka Pty Ltd (1988) 13 NSWLR 629 at 637.
[57]
The broad ambit of "loss or damage" has already been the subject of comment in this Court [179] . This case provides a further reminder that an ample approach for the provision of relief under s 87 is that which conforms to the policy of the TP Act [180] . In granting relief under s 87 courts are not restricted by the limits which were conventionally applied under the general law, for example, in actions of tort to recover damages for misrepresentation [181] . Thus, not only is the language which enlivens the application of the section very broad, but the discretion conferred when the section attaches could not be expressed in more generous terms [182] . And while the discretion which is enlivened must be exercised judicially [183] , there is nevertheless an unusually wide range of powers extending well beyond those available in courts of the common law or of equity. Judges should not narrow or confine what the Parliament has so amply provided.
[58]
Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 543; cf Western Australia v Wardley Australia Ltd (1991) 30 FCR 245 at 261.
2. Kizbeau Pty Ltd v W G & B Pty Ltd (1995) 184 CLR 281 at 299; cf Akron Securities Ltd v Iliffe (1997) 41 NSWLR 353 at 365.
3. Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 at 43; Akron Securities Ltd v Iliffe (1997) 41 NSWLR 353 at 366.
4. TP Act, s 87(1) and (1A) ["make such order or orders as it thinks appropriate against the person who engaged in the conduct or a person who was involved in the contravention "].
5. Trade Practices Commission v Milreis Pty Ltd (1977) 29 FLR 144 at 168.
[59]
The supposed constraints of Gates should be removed
[60]
At some future occasion it may be necessary for this Court to return to what was said in Gates, relevant to the provision of relief under s 82 of the TP Act. It will be clear, I hope, that I consider that, even under that section, the analogy to common law damages in tort is a most imperfect one. That section, like s 87, appears in an Act which has obvious national and economic objectives and which, in part at least, depends for its effective implementation upon the initiative of individuals who claim to have suffered [184] , or who are likely to suffer [185] , loss or damage of the kind described as conduct in contravention of provisions of the TP Act. They must come forward and institute their own civil proceedings despite the many practical impediments to doing so. In the case of contravention of s 52 of the TP Act, civil action by an individual is the mode of enforcement which the Parliament has contemplated will ordinarily be pursued. Criminal proceedings are excluded [186] . Injunctions on the application of the Australian Competition and Consumer Commission [187] to restrain contraventions of Pt V, will, for practical and financial reasons, be exceptional and relatively rare. From this structure and scheme of the legislation it would be wrong to attribute to the Parliament a cynical intention to undermine its own high objectives (in s 52) by the provision of narrow and ineffectual remedies for contraventions (relevantly in s 87). I agree with what was said by Black CJ in this regard in Demagogue Pty Ltd v Ramensky [188] that it is inherent in the scheme of s 87(1) of the TP Act "that an order under that subsection may be made whether or not the court "grants an injunction under section 80 or makes an order under section 80A or 82" ". Thus, even where there is no entitlement to damages under s 80, remedies under s 87 may yet be appropriate [189] . In Demagogue, Gummow J pointed to the fact that the terms of s 87(2) deny a construction which would "limit the loss or damage suffered or likely to be suffered to pecuniary loss or damage" [190] . In his Honour's view, the phrase meant "no more than the disadvantage which is suffered by a person as the result of the act or default of another in the circumstances provided for in the section" [191] . He suggested that this was an important point of distinction between ss 87 and 82. I agree.
[61]
TP Act, ss 82, 87.
2. TP Act, s 87.
3. TP Act, s 79(1).
4. TP Act, s 80(1).
5. (1992) 39 FCR 31 at 32.
6. Demagogue (1992) 39 FCR 31 at 42-44, per Gummow J.
7. Demagogue (1992) 39 FCR 31 at 47.
8. Demagogue (1992) 39 FCR 31 at 47.
[62]
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.
[63]
Discretionary arguments to deny relief should be rejected
[64]
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.
[65]
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.
[66]
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.
[67]
The discretion to afford relief should be exercised
[68]
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.
[69]
Akron Securities Ltd v Iliffe (1997) 41 NSWLR 353 at 365.
[70]
The ultimate relief to the borrowers 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.
[71]
The appeal should be allowed with costs. The judgment of the Full Court of the Federal Court of Australia, save in so far as it provided for the remittal of a matter concerning the appellant Mrs Alexandra Williamson, should be set aside. In lieu thereof, it should be ordered that the Full Court hear and determine the cross-appeal of the appellants other than Mrs Alexandra Williamson before that Court and otherwise dispose of the appeal and cross-appeal to it conformably with the decision of this Court.
Parties
Applicant/Plaintiff:
Marks
Respondent/Defendant:
GIO Australia Holdings Ltd
Cases Cited (61)
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].
Environment Agency v Empress Car Co (Abertillery) Ltd [1999] AC 22 at 30-32. See also Chappel v Hart (1998) 195 CLR 232 at 256, 276-277.