Week 9 Australian Consumer Law s 237 -good for someone who does not enjoy lecture recording PDF

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Week 9 Australian Consumer Law s 237. Basically is the transcript of the lecture recording. good for someone who does not enjoy lecture recording...

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s 237 Tue, 10/26 10:33PM • 41:42 SUMMARY KEYWORDS plaintiff, loss, court, section, remedy, contract, damage, order, rescission, defendants, compensate, misleading, conduct, avoidance, collins, equity, case, relief, deceptive conduct, lease

00:14 We have seen that a plaintiff has a right under Section 236 of the Australian Consumer Law to claim damages for loss caused by reliance on the defendants misleading or deceptive conduct. will now look at the discretionary remedies available under Section 237. In a series of three videos this first video will provide an overview of the section. The second video will look at the role of causation and loss or damage under Section 237. And the final video will look at orders that are commonly made under the section. Section 237 provides that if a plaintiff has suffered loss or is likely to suffer loss because of the defendants misleading or deceptive conduct, then a court may make any orders it thinks appropriate and those orders must compensate for actual loss or prevent loss occurring. 01:36 Some things to note about section 237. First, the court may make orders. This tells us that the section 237 remedies are discretionary, like equitable remedies. This contrasts with section 236 which provides a right to damages for loss caused by misleading or deceptive conduct. Second, the court can compensate for actual loss and also make orders to prevent loss from happening. So a plaintiff who hasn't yet suffered loss may seek an order under Section 237 preventing it from happening. Thirds the court can make orders which compensate all or only part of the loss. Answer plaintiff can sue for their entire relief under Section 237 or sue for damages under Section 236 with additional relief ordered under Section 237. For the courts can make such order orders as the court thinks appropriate. So this confers a very broad discretion to make any order the court deems fit to properly compensate the plaintiff. And fifth, given that subsection two directs the court to compensate only this means that any orders made must reverse or prevent loss, which as we've seen in the context of section 236 doesn't mean fulfilling expectations. 03:30

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Some of the orders that the court can make under Section 237 are found in Section 243(a) is like rescission. It allows the court to void a contract from the beginning. But more than that it can declare only part of a contract void or declared void from a certain date or declared void related collateral agreements. 04:06 Subsection B is like rectification. It allows the court to vary document as it sees fit and declare that the variation takes place from a particular date. 04:24 subsections C to haitch allow the court to make orders which don't have exact equitable analogues except maybe injunctions. So the court can refuse to enforce a contract as opposed to rescind it. order that the defendants pay compensation for any loss caused by the defendants wrong. order that the defendants carry out repairs, provide a service or return property or money to the plaintiff. 04:58 Order the defendants to execute instruments that create vary or extinguish interests in mind. But to reiterate, the orders listed in Section 243 are not the only orders that can be made under Section 237. The court can make any order it sees fit under Section 237. So that concludes this brief overview of section 237. In the next part, we look at the role of causation and the meaning of loss or damage for the purpose. Of section 237 06:18 the gateway to the remedies in Section 237 is causation the plaintiff must prove that either they have suffered loss of damage or are likely to suffer loss or damage. Life likely means a real chance or possibility. Not that the likelihood of damage must be probable. So if we get back to the case of Marks v GIO, recall that GIO induced marks into a loan facility with the statement fetch GIO wouldn't increase a 1.25% margin on the loan during the life of the loan. But also recall that the terms of the contract allowed GIO recall that sometime into the loan. GIO announced that it was going to increase the margin but it gave marks the opportunity to refinance elsewhere without penalty. Now Marx didn't take that opportunity, and he sued GIO for misleading conduct. Now recall that he unsuccessfully sought damages under Section 236 Because he couldn't prove loss. He couldn't prove that he could have obtained the same finance on better terms elsewhere. Well, he also sought an order under Section 237 that the margin the limited to 1.25% for the lifetime of the loan as originally represented by GIO However, the court refused that relief, because Max had failed to prove that GIO is misleading conduct was likely to cause future loss. 08:15 Justices Gordon and Gamow held that once Marks had voluntarily elected to stay with the facility then any so called loss caused by GIO increasing the margin was caused by marks decision to stay not Geno's misleading conduct. The joint judgments held that even after the margin was increased it was still a better rate than elsewhere. And the evidence didn't suggest that the margin was likely to increase further. So Max was not likely to suffer loss in the future, which meant that he didn't meet the threshold to obtain a remedy in Section 237. 2 Transcribed by https://otter.ai

09:11 Both sections 236 and 237 require the plaintiff to have suffered loss or damage, or in the case of section 237 only as we've just seen, the plaintiff must show that they're likely to suffer loss or damage. In the video on damages under Section 236. I suggested that loss or damage for the purpose of section 236 may be more limited than under Section 237. Because the loss in question must be measurable in money. That's a contingent loss isn't compensable under Section 236. The court won't order damages unless that contingency comes true, and the contingent loss becomes real. Hence, several cases have said that mere entering into a contract that the plaintiff wouldn't have agreed to had not the defendant misled them is not necessarily of itself, loss for the purposes of section 236. But contingent loss may be actionable under Section 237 Because that section allows the court to make orders to prevent likely loss or damage. So in other words, section 237 doesn't require the contingency to have been fulfilled, to order relief. But it may be that under Section 237 mere entry into a contract that the plaintiff wouldn't have agreed to by itself maybe sufficient loss or damage to attract relief in demagogue proprietry, limited and Romanski. There are Minsky's were induced into purchasing a property at Noosa by the misleading or deceptive conduct of demagogue. They sought an avoidance order, that is to say rescission under Section 237. They argued that their loss or damage was just entering into the contract. They submitted that they wouldn't have agreed to the purchase if they'd known the truth. All the judges agreed with this submission. Chief Justice Black held that equity allows a plaintiff to rescind the contract induced by misrepresentation without requiring the plaintiff to show that they've suffered loss measurable in damages. The Chief Justice further held that it would be extraordinary if the parliament impose such an obligation in consumer protection legislation, which would make it a less useful remedy than the general law. It's only concluded, therefore that the relevant muscle damage was being a de quote, bound to a contract induced by misleading or deceptive conduct. 12:20 Just as gamma similarly held, that the relevant loss or damage was entry into legal relations from which the plaintiffs would have otherwise abstained. Is on it also noted that equity doesn't require plaintiff to show that they are objectively worse off before they can rescind the contract for misrepresentation. He further added that the complainant is entitled to say that bad for the unconscious conduct of the defendant, he or she would not have entered into any transaction with the defendant. 13:07 Justice Cooper held that the loss or damage incurred by a plaintiff who agrees to a contract that they wouldn't have agreed to is the obligations imposed by such a contract. He held that loss or damage in Section 237 means 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. Thus demagogue appears to be authority for the proposition that if a plaintiff wouldn't have agreed to a contract, if the defendant had not misled them, then that entry into the contract without more is loss or damage. There's no need to look for any other loss or damage whether financial or otherwise. But then, in marks the joint judgments 3 Transcribed by https://otter.ai

seem to cast doubt on whether these statements on muscle damage in demagogue were correct. They're on has held that the plaintiff must show that they're objectively worse off for entering into the contract. You're entering into a contract that the plaintiff wouldn't have agreed to. may not be enough, according to this judgement. But two things can be said about this. First, this wasn't a case where the plaintiffs wouldn't have agreed to enter into this agreement had they not been misled. And second, the joint judgement is not the ratio of the case. It's a judgement of three of six judges. Who heard it. The remaining three judges were justices in Gordon, gamma, and Kirby. But in late 2020, the full Federal Court considered the status of demagogue and the question of whether entry into a contract that the plaintiff wouldn't have agreed to is of itself lots of damage. After considering both cases in detail, the court concluded that the joint judgement in Marks did not overrule demagogue. And so it seems safe to say that entry into an unwanted contract induced by misleading or deceptive conduct is loss of damage without more. So that concludes this overview of loss or damage for the purpose of section 237. Well, no, so damage to the purpose of this section would include any damage compensated under Section 236. It's probably of wider scope than under Section 236 Given that section 237 isn't restricted to providing damages as a remedy and also because it can be used to prevent loss from occurring. It provides a suite of remedies that can better compensate loss or damage that's not reducible to money. In the next video, we'll look at commonly made orders. 17:01 Once the plaintiff has established either loss or likely loss, then the court has a wide discretion to make such orders as the court thinks appropriate, including any the orders under Section 243. in Akron securities, Justice Mason describes the range of possible orders as a remedial smorgasbord and said that there's no point in having a remedial smorgasbord if the table isn't scanned, at least briefly, to see what's best on offer. But the emphasis here is on discretion. The plaintiff doesn't have a right to an order under Section 237. Thus, the court will consider all the circumstances of the case in deciding whether to make an order under Section 237. This can include whether the defendant acted fraudulently. In munchies management, the court noted that fraud on the part of the defendant may be a significant matter in the court granting a remedy under Section 237. This may echo what the court said in Spence and Crawford. That equity is prepared to do more for the victim of fraudulent rather than innocent conduct. Also relevant is the plaintiffs own conduct. In red Russell and Sons Proprietary Limited in Baxter meets Proprietary Limited justice IP held that in exercising its discretion, the court will take into account whether there is a causal link between the loss of damage suffered or likely to be suffered by the plaintiff whether and to what extent the plaintiff is the author of his or her own misfortune. And whether another remedy is or was at hand to recover the loss of damage in question. That last comment echoes the sentiment that in some cases, damages may be an adequate remedy. But to be clear, section 237 remedies are not subject to debt requirements. Additionally, like equity, the court can make orders under Section 237 on terms so that is, the court can make relief conditional on the plaintiff and doing something to earn it. So for example, if the plaintiff seeks to avoid a contract induced by misleading or deceptive conduct, then the court can make that order conditional on the plaintiff. Restoring property or money to the defendant. 4 Transcribed by https://otter.ai

20:10 But the courts have repeatedly said that while equity provides guidance on how to exercise the statutory discretion, they aren't bound by the rules of equity. And indeed, the courts have warned against allowing the general law notions to inhibit the full and novel kinds of relief that can be provided under Section 237. 20:39 A good case example of the court ordering complimentary remedies under both sections 236 and 237 is the case of case. So recall that in this case, Kizbeau purchased a motel business and leasehold from W G & B recall that Kizbeau paid too much for the motel because W G & B had falsely represented that the boardroom and boardroom annex could lawfully be used for functions in an unrestricted way. Recall that Kizbeau used the boardroom without restriction for two years. And only then it discovered that he could not lawfully use the boardroom at all. And so Kizbeau applied for permission to use the board and was granted permission to use it but only for events with no more than 50 attendees. Recall that Kizbeau received damages under Section 236 to compensate for paying too much for the hotel because of W G & B misleading conduct. But Kizbeau had suffered and was going to suffer further loss. Under the leasehold key spell was obliged to pay rent for five years. And the rent was calculated based on the takings of the motel with unrestricted use, Audrey. But given that the use of the boardroom had been restricted, and takings had correspondingly fallen. Kizbeau was now paying too much rent. So the court ordered that the rents be varied under Section 237 to reflect the reduced takings of the motel. But the court noted that Kizbeau had enjoyed two years of unrestricted use. We ordered that the variation took effect from when the restrictions were imposed on the motel. So section 237 confers a wide discretion on the court to make the orders it sees fit to compensate the plaintiff or to save the plaintiff from likely future loss. Let's now look at some commonly made orders. Thanks now look at some of the common orders listed in Section 243 and compare them to their equitable analogues. The first is an avoidance order, which allows the court to void a contract induced by the defendants misleading or deceptive conduct. Thus, the court can order relief similar to rescission. Notably, the legislation doesn't use the word rescission. The parliaments could easily have used this well known word and the fact that it hasn't raises questions about whether or to what extent this power is bound by the rules on rescission at general law. 24:10 Recall that rescission at general law is unavailable if the parties can't be restored to their pre contractual position. Section 243 Doesn't expressly say that restoration is a precondition to an avoidance order. But given that orders made under Section 237 must compensate the plaintiff fairness 5 Transcribed by https://otter.ai

requires that the plaintiff return property or money transferred to him or her under the contract if it is voided. Hence, our court of appeal has held that a central consideration of an avoidance order is that of restitutio in integrin. - Bullabidgee Pty Ltd v McCleary [2011] NSWCA 259 (2 September 2011)

Avoidance orders 24:57 Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1988) 39 FCR 546 is a case which considered an avoidance order. So you recall that Hanjo and just Collins to purchase a restaurant after leading Collins to believe that the restaurant could lawfully seat 128 people. Now Collins had originally sued for and was granted by the trial judge and avoidance order under Section 237. But on appeal the full court refused that remedy. And hence, as we've seen, ultimately Collins obtained damages under Section 236 to compensate for its loss. As to why the full court refused the avoidance order. It observed that it wasn't bound by the equitable rules on rescission for misrepresentation, but that the court would consider the conduct of the parties after the plaintiff discovers conduct. So in this case, the Court held that it was inappropriate to avoid the contract because, first of all, it was impossible to restore the parties to their pre contractual position. Collins had significantly changed the business since it became the owner. And unfortunately, the changes resulted in the restaurant becoming an profitable second, Collins had taken too long to seek the avoidance order. The evidence showed that Collins could have pursued his claim much more efficiently and the longer Collins took to seek relief, the more the business changed, and restoration became more difficult. And thirdly, the court was at the view that damages were an adequate remedy. Hence, the discretionary remedy of an avoidance order was refused. But the plaintiff obtained the damages it had a right to receive under Section 236 for its proved loss. So in all, the Court considered factors similar to factors considered an inequity for rescission those being whether substantial restitution was possible concepts like delay or leash, and whether an alternative remedy was available. But do note and to repeat, the Court also said that it wasn't bound to those equitable principles. 27:41 What if the plaintiff has affirmed the contract? At general law, recall that if the plaintiff has affirmed the transaction, then they're bound by their election to affirm and they can no longer rescind. However, affirmation in contract law may not preclude relief under legislation. Bullabidgee Pty Ltd v McCleary [2011] NSWCA 259 (2 September 2011) remarked that if a plaintiff affirms a contract, and therefore abandons their contractual right to rescission, then that doesn't necessarily mean that the plaintiff has abandoned their statutory right to an avoidance order. Rather, defamation of the contract is just something the court considers when deciding whether to exercise its discretion to make an avoidance order. One way that affirmation may affect relief under Section 237 is that the plaintiff by affirming the contract may in fact have caused the loss in question, thereby denying the application of section 237. So for example, although affirmation of the transaction 6 Transcribed by https://otter.ai

wasn't discussed in marks, Justices Gordon and gummow said that Marx had caused his own loss after he refused the opportunity to refinance elsewhere. Perhaps another way to characterise that situation is that by affirming the facility with GIO, marks caused his own loss. Marks v GIO Australia Holdings (1998) 196 CLR 494. - Affirmation of a contract may be characterised as the plaintiff causing their own loss:

Variation orders 29:31 So when it comes to avoidance orders under Section 237, the court will have regard to the rules of equitable rescission or be it they're not bound by them. This means that some of the hard bars to rescission in equity adjust discretionary considerations under Section 237. 30:04 The courts may also vary any contracts or arrangements between the parties in any way it sees fit. This is similar to the equitable power to rectify documents. However, the statutory remedies available in much wider circumstances than inequity. The power to rectify a document in equity rests on a set date, the plaintiff must show that the document fails to achieve what the parties intended due to an error. But under Section 237 All the plaintiff needs to show is that the defendant has engaged in misleading or deceptive conduct, and the court can rewrite the contract to ensure that the plaintiff doesn't suffer loss. Varying the contracts can be useful in two contexts to prevent future loss and Kizbeau is an exa...