Week 8 Australian Consumer Law s 236 lecture notes summary PDF

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Week 8 Australian Consumer Law s 236 lecture notes summary...

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remedies lecture 236 Fri, 10/8 6:53PM • 19:38 SUMMARY KEYWORDS loss, damages, conduct, defendants, plaintiffs, collins, common law, misleading, section, court, walker, caused, causation, claimant, relied, claim, case, colin, property, restaurant

01:51 The rights to compensator II damages is found in Section 236 Consumer Law. And this section provides that if a claimant suffers muscle damage because of the conduct of another person. And that conduct been to provision of chapter two, or three, the Australian Consumer Law. And for our purposes, that includes section 18. Then the claimant may recover the amount of the loss or damage by action against that other person. This section is analogous to the common law right to damages for tort or breach of contract. You'll note that, just like the common law. It provides a right to damages. If the plaintiff has suffered loss. The court doesn't have discretion to refuse the remedy. The key question is to what extent, if any, does an assessment of damages under section 236 differ from an assessment of damages and common law. Conceptually, the process is the same. The plaintiff proves that the defendants misleading or deceptive conduct caused the loss. And then the point of damages is to compensate the plaintiffs for their actual loss. Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494. So we need to consider the actual position of the plaintiffs and the position that the plaintiffs would have been in, had they not been misled. And then compensate the difference between those two positions. –

Henville v Walker (2001) 206 CLR 459 The courts are not bound by common law rules or causes of action. When assessing damages under Section 236, the court is guided by the policy objective, that the parliament intended to achieve when they enacted the legislation, which is in the case of section 18, is to encourage Fair Dealing in trade or commerce.

But neither are the common law rules, irrelevant. They continue to be a useful guide to a claim for damages under Section 236. And that concludes this brief introduction to Section 236 In the next part, we look at causation. 05:03 1 Transcribed by https://otter.ai

Part 2 Causation Section 236(1) says that, If the claimant suffers loss or damage because of the conduct of the defendant. Then they can claim damages the magic words here are because of this shows that the claimants needs to prove that the misleading or deceptive conduct caused their loss of damage before the claimant will get compensation. 05:32 Wardley Australia Ltd v Western Australia; [1992] 175 CLR 514, the High Court said that section 236 picks up the common law practical or common sense concept of causation. As propounded by the High Court in March v Stramare. Except, so far as that concept is modified, or supplemented expressly or impliedly by the provisions of the Act. March v Stramare encompasses the ‘but for’ test of factual causation. But if there are multiple causes of loss, then it's sufficient if the defendants wrong was a material cause of the plaintiffs loss. And this encompasses situations where the defendants conduct was a necessary condition of the loss, even if not sufficient of itself, or where we have a case of multiple sufficient causes. 06:35 Henville v Walker (2001) 206 CLR 459 exemplifies the March v Stramare approach. In this case, Henville was an architect who wished to become a property developer. He had heard that Albany Western Australia, would be a good place to develop luxury housing. So he sought the advice of Walker, a real estate agent. Walker advised Henville, that there was a large demand for quality units and townhouses, in Albany, and that such property, typically sold for 250 to $280,000. Those statements were misleading. And one reason why a Henville purchased property in Albany to develop it. The other reason why Henville bought the property was because he had negligently prepared his own calculations about how much it would cost to develop the property. Critically, if one party had got it right, then handle wouldn't have bought the property. So this was a case where neither cause was sufficient of itself to cause the loss of aborts and developed events, however, he found that he had badly underestimated the costs of development, and that there was minimal demand for them, so he ended up selling them for about $180,000 each. And Henville lost a lot of money and sued Walker for misleading or deceptive conduct. This case occurred prior to the enactment of the contributory negligence sections in the Trade Practices Act. Therefore, a key question in the proceeding was whether Walker had caused, and was liable for all of Henville’s loss, or whether Henville or negligence justified, denying or reducing and both claim. 08:38 The High Court found that once Henville had proved that Walker's misleading conduct was a material cause of the loss, then Walker was liable for the full extent of the loss. Justice Hayne characterised Walker's misleading conduct as a necessary condition of Henville loss because Walker's conduct was an essential step in combination with Henville of negligence, which caused Henville loss. 09:16

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So In Henville v Walker, the two causes first being Walker's misleading conduct, and the second being Henville ‘s own negligence both caused the same indivisible economic loss. And given that Walker's misleading conduct was a material cause of an indivisible loss. He was held liable for all of it. If a defendant’s conduct is one material cause of individual’s loss caused by multiple causes, then the defendant will be liable for all of it.

But if the evidence shows that the defendant has caused certain discrete and severable loss, and the plaintiff has caused their own discrete and severable loss, then the defendant will be liable, only for the loss that they have caused. But if the plaintiff’s total loss is clearly divisible, then the defendant will be liable only for the divisible part s/he in fact caused. (Henjo Investments)

10:03

Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd [1989] FCA 354; In this case, Collins purchased a restaurant from Henjo, and during negotiations Henjo breached section 18 by saying that the restaurant could lawfully seat 128 people at 39 tables and some barstools. When in fact, he could only lawfully seat, 84 people at 26 tables and no pastorals. In May, 1985, the sale was completed, and Collins took over. And it found out about the truth, with respect to lawful seating capacity, about six weeks later. In August, 1985 Collins commenced proceedings against Henjo and Collins initially sought rescission of the contract. But as it turned out, the trial and the appeals dragged on for years. The trial judge, initially ordered rescission of the contracts, but the full court overturned that remedy and ordered that damages were the appropriate remedy instead. In June 1988 Collins finally sold the restaurant to a third party. And in December 1988 The trial judge gave judgments on the limited assessment of damages. Collins had claimed as damages. Firstly, the difference in value between how much Collins had paid for the restaurant, and how much it was really worth. Secondly, all trading losses incurred from the date the contract settled in May 1985 to the date when Colin's sold the restaurant to a third party In June, 1988. And finally, it also claimed some consequential losses.

Justice Wilcox said that his task was to identify the loss that was caused by the misleading conduct. This meant separating the loss caused by Henjo’s conduct from any loss caused by either Colin's own conduct or other extraneous causes. 3 Transcribed by https://otter.ai

12:47 as to the claim, with respect to the capital loss. Justice Wilcox awarded Collins, the difference in value between how much Colin's had paid for the restaurant, and how much it was really worth at the time of the transaction. And this was appropriate, because hen Joe's misleading conduct had clearly caused Collins to pay too much for the restaurant and Collins was also able to claim compensation for ancillary costs associated with the purchase of the business. But the claim for the trading losses, was a different story. First, his honor said that some of the trading losses were caused by Collins, making changes to the restaurant, which were unrelated to the misleading conduct. Thus, an allowance was made to account for those supervening causes. Seconds the trial judge found that by the 30th of June, 1986, a reasonable person in the position of Collins would have cut their losses, and sold the business. So in other words, Collins had failed to mitigate. Therefore, any trading losses incurred after the 30th of June 1986 were caused by Colin's failure to sell, rather than Henjo’s misleading or deceptive conduct. So for those reasons, Colin's claim for trading losses, was limited to a percentage of the trading losses between the completion of the contract, and the date by when it should have disposed of the restaurant. So in this case, the judge was able to distinguish between the loss. In fact, caused by Hinjo’s misleading conduct, and the loss. In fact, caused by Colin's own actions, or failure to mitigate. 14:58 Now, a plaintiff, typically proves causation by proving that they relied on the defendants conduct in Wardley Australia Ltd v Western Australia (1992) 175 CLR 514, the High Court said that if the defendants conduct is a positive misrepresentation. Then, as at common law, acts done by the representee in reliance upon the misrepresentation constitute a sufficient connection to satisfy the concept of causation. 15:35 Reliance is always a question of fact, the court must be satisfied that the plaintiffs, actually, subjectively relied upon the conduct which thereby caused the loss. – Henjo Investments Pty Ltd v Collins

Marrickville Pty Ltd [1989] FCA 354;

15:55

Gould v Vaggelas (1985) 157 CLR 215. There are several ways that a defendants can show that the plaintiffs didn't rely on their conduct in Golden Majelis justice Wilson said that Reliance may be disproved by showing that the plaintiffs, just ignored the conduct or knew the truth, prior to suffering the loss or relied on his or her own inquiries, rather than anything said or done by the defendants. But again, this is just a question effect, and will depend upon the evidence. 16:37

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Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 Often a defendant will rely on an acknowledgement to disprove Alliance acknowledgments, usually found in signed contracts, And they declare that the plaintiff hasn't relied on anything said or done by the defendant. But they seldom work for several reasons. Often they come too late, after the misleading conduct has already done its work. Often they're not actually seen or understood by the plaintiffs are often they drafted, so generally, that they just don't target, the relevant conduct. And finally there are good public policy reasons for not letting a defendant to easily evade section 18 By relying on a general boilerplate term in a contract. So courts are typically resistant to the idea of an acknowledgement, proving that the plaintiffs did not rely on the defendants conduct that Reliance isn't the only way to show causation. It's just a useful approach when the defendants conduct is a positive statement. If the conduct is silence or failure to speak, but it makes less sense to talk about reliance. So for example, if a bank failed to warn about the risk associated with a Finance Facility and a customer entered into it, and suffered loss, then it doesn't make sense for that customer to say I relied on your silence. So here the court must consider what would the plaintiffs have done at the defendant spoken up, or the plaintive truth. So if we go back to the bank example, if the customer wouldn't have entered into the facility, and they've been warned of the risks, then arguably equalisation is established. And that concludes this part on causation. Under Section 236. In the next part, We'll look at scope of liability issues.

14.4 scope of liability Sun, 10/10 2:15PM • 51:54 SUMMARY KEYWORDS damages, loss, plaintiffs, defendant, misleading, court, outgoings, deceptive conduct, section, conduct, compensate, contributory negligence, claim, fund, lease, personal injury, murphy, suffered, tortious, paid

00:25 Now to scope of liability under Section 236. The role of the traditional limiters such as remoteness mitigation and nervous actors intervening ends under Section 236 are unclear. In Ellner justice Gamow said that these concepts are wrapped up in Section 236. This section only expressly addresses causation, and it certainly doesn't explicitly separate factual causation from scope of liability as Section Five D does in the Civil Liability Act.

In marks the joint judgement said that section 236 contains no stated limitation of the kinds of loss or damage that may be recovered, and contains no Express indication that some kinds of loss or damage aren't to be regarded as too remote to be recovered. So it seems that remoteness isn't relevant in an assessment of damages under Section 236 5 Transcribed by https://otter.ai

01:46 It seems that the scope of the defendants liability is limited by factual causation, and the policy of the legislation, but it's just as Hane observed in handle and Walker concepts like remoteness and mitigation can often be expressed in terms of causation. 02:11 Thus the defendant may rely on principles, analogous to remoteness mitigation nervous actors intervenes etc. However, the argument will be framed in terms of causation. So for example, mitigation is easily framed in terms of causation, and in several cases, the defendants liability was limited by the plaintiffs, failure to mitigate. So in Hanjo investments. The court found that Colin's had failed to mitigate, by failing to sell the restaurant by the 30th of June, 1986. So Hanjo wasn't liable for trading losses, after that date. Well, another way to put that is that Colin's caused its own trading losses after the 30th of June, not when Joe's misleading or deceptive conduct 03:13 the policy of the legislation is also important to the viability of the defendant in the case of travel compensation fund, and temporary. The travel compensation fund was a government fund established to compensate travellers who had suffered financial loss because of the fault of a travel agent travel agents were obliged to participate in the fund to retain their licence to operate as travel agents. Each year, agents who wish to continue as participants had to submit audited financial statements which demonstrated that they were financially sound. A travel agent called the travel shop International was a participant in the fund. It retained Mr temporary to audit, its finances for submission to the fund. Temporary negligently ordered the travel shop, and thereby falsely certified to the fund. The travel shop was financially sound. This false certification was the misleading or deceptive conduct. The fund relied on temporaries misleading audits, and allowed the travel shop to continue as a participant, but soon creditors started complaining to the fund, about the travel shop, which prompted the firms to undertake its own audit. The travel shop then voluntarily requested to end its participation in the fund and the fund terminated its participation. And this meant that the travel shop could no longer lovely trade as a travel agent. But the travel shop continued to trade unlawfully for another eight weeks, until it was finally shut down by the Department of Fair Trading. In the weeks leading up to the forced closure of the travel shop. Many customers had paid money to it, and had received nothing for it. And so they, in turn, claimed compensation from the fund. The fund paid about $140,000 to the customers, and most of that payout was to customers who had dealt with the travel shop when it was trading illegally. The fund then claimed the $140,000 from temporary. 06:02 The trial judge found that if temporary had accurately reported at the travel shop wasn't financially sound. Then the fund would have terminated the travel shops participation immediately. And the fund would have avoided paying $140,000 to the customers. So in other words, the trial judge found a temporary is misleading conduct had caused all the fans, boss. But that went on appeal, and the Court of Appeal found that temporary wasn't smiling for any loss resulting from the travel shop operating illegally. So that is to say, he wasn't liable for most of the $140,000. It held that the travel shops, illegal trading was a nervous, actors, intervening ends. So in other words, it thought that any loss caused by 6 Transcribed by https://otter.ai

the travel shop operating illegally, was in fact caused by the travel shop, not temporary is misleading or deceptive conduct. But the high court disagreed. Chief Justice Gleason said that the scope of the defendants liability is determined by reference to the purpose of this statute as related to the circumstances of a particular case. He's on a held that temporary should be liable for all the loss, because, firstly, the purpose of the fund was to protect travellers against the risk of financial loss caused by travel agents, irrespective of whether the agents were acting unlawfully, or otherwise. Secondly, tenbury knew the purpose of the funds, and that the fund relied upon accurate financial information to identify risky travel agents. Thirdly, by providing information on the travel shops financial position. Temporary assumed responsibility for the risk that false information may cause the fund loss. And firstly, the policy of sections, 18, and 236 of the Australian Consumer Law was to compensate a plaintiff, for any loss incurred because of the defendants misleading or deceptive conduct in trade or commerce. So despite the illegal trading being extraordinary, or unreasonable, or maybe even unforeseeable. For the purpose of the Australian Consumer Law, there was a sufficient causal connection to justify ordering temporary to compensate for all the loss. 09:15 Another potential limiter on the defendants liability is contributory negligence, which can impact on the defendants liability in a few ways. First, the plaintiffs negligence may in fact be a cause of a discrete heart of the plaintiffs slots. And if certain loss is clearly attributable to the plaintiffs own negligence. Then, the defendant just won't be liable for second. The plaintiffs negligence may be the real effectual cause of all the loss, rather than the defendants conduct, so to say, could be a nervous actors. And if that's the case, the defendant just might be liable for anything. But this type of case is likely to be rare. However, if the plaintiffs negligence was a cause of indivisible loss, then primer facie, the defendant is liable for all of that loss. If they conduct was also, I mean to enforce. And this is what happened in handling Walker. But since handle the Federal Parliament has legislated, to allow courts to apportion damages for contributory negligence in certain circumstances. Section 137 B of the Competition and Consumer Act allows the court to apportion damages on the just and equitable basis. When the defendants misleading or deceptive conduct has caused the painting of economic loss or property damage, and the defendant didn't intend to cause the loss or didn't act fraudulent lien. And the plaintiffs contributory negligence was another material cause of fat loss. 11:32 In the case of Marist and CPT custodian merasa purchased a shopping centre from CPT. Prior to the execution of the contract, CPT had given to merest a memo, which contains details of the tenants of the shopping centre. The memo incorrectly showed the rent payable by the centres, anchor tenant came out. And this was because CPT had failed to give their agent, all the documents relating to the keymaps lease. But the error would have been discovered, had merest properly undertaken its due diligence, prior to...