Tomasso v IG Markets Ltd - [2025] WASC 338

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   TOMASSO -v- IG MARKETS LTD [2025] WASC 338
CORAM:   HILL J
HEARD:   18 - 22 MARCH 2024
DELIVERED          :   21 AUGUST 2025
FILE NO/S:   COR 103 of 2022
BETWEEN:   ADAM ANTHONY TOMASSO
Plaintiff
AND
IG MARKETS LTD
Defendant
IG MARKETS LTD
Plaintiff by counterclaim
ADAM ANTHONY TOMASSO
Defendant by counterclaim

Catchwords:

Corporations - Unfair contract terms - Trading on test market over two days - Correction to statement to void these transactions in reliance on term of agreement - Whether term is an unfair contract term under s 12BG of Australian Investments and Securities Commission Act 2001 (Cth) - Whether term creates significant imbalance - Whether term reasonably necessary to protect legitimate interests of defendant - Consideration of proportionality and alternative methods of protecting the defendant's interests in assessing whether term is reasonably necessary - Whether term would cause financial or non-financial detriment if relied upon

Corporations - Unfair contract terms - Whether term defines main subject matter of contract - Whether disputed transactions are 'transactions' within the meaning of the agreement - Proper construction of agreement

Corporations - Unfair contract terms - Whether term (or part of it) should be severed - Whether defendant's rights under term are composite or separate rights - Whether court can redraft clause

Contract - Unilateral mistake - Whether transactions are separate contracts - Whether defendant entered into transactions under serious mistake - Whether plaintiff aware of defendant's mistake - Whether plaintiff’s conduct warrants intervention by equity

Corporations - Relief - Whether declaration should be made that term is an unfair contract term

Legislation:

Australian Investments and Securities Commission Act 2001 (Cth) s 12BA, s 12BF, s 12BG, s 12BI, s 12BK, s 12GND

Result:

Judgment for the plaintiff

Category: B

Representation:

Counsel:

Plaintiff	:	M J Sims SC
Defendant	:	J Garas SC & M Forgacs
Plaintiff by counterclaim	:	J Garas SC & M Forgacs
Defendant by counterclaim	:	M J Sims SC

Solicitors:

Plaintiff	:	Chew & Matthews
Defendant	:	King & Wood Mallesons
Plaintiff by counterclaim	:	King & Wood Mallesons
Defendant by counterclaim	:	Chew & Matthews

Cases referred to in decision:

Australian Competition and Consumer Commission v ACN 117 372 915 Pty Ltd (in liq) [2015] FCA 368
Australian Competition and Consumer Commission v Ashley & Martin Pty Ltd [2019] FCA 1436
Australian Competition and Consumer Commission v Chrisco Hampers Australia Limited [2015] FCA 1204
Australian Competition and Consumer Commission v Geowash Pty Ltd (subject to Deed of Company Arrangement) [No 3] [2019] FCA 72; (2019) 368 ALR 441
Australian Competition and Consumer Commission v JJ Richards & Sons Pty Ltd [2017] FCA 1224
Australian Competition and Consumer Commission v Smart Corporation Pty Ltd (No 3) [2021] FCA 347; (2021) 153 ACSR 347
Australian Securities and Investment Commission v AGM Markets Pty Ltd (in liq) [No 4] [2020] FCA 1499; (2020) 148 ACSR 511
Australian Securities and Investments Commission v Bendigo and Adelaide Bank Ltd [2020] FCA 716
Chwee Kin Keong v Digilandmall.com Pte Ltd [2005] SGCA 2
Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd [1999] HCA 15; (1999) 161 ALR 599
Errichetti Nominees Pty Ltd v Paterson Group Architects Pty Ltd [2007] WASC 77
Fitzgerald v Masters (1956) 95 CLR 420
George v Rockett [1990] HCA 26; (1990) 170 CLR 104
Hughes v St Barbara Mines Ltd [No 4] [2010] WASC 160
IG Index plc v Colley [2013] EWHC 478
In the matter of Kit Digital Australia Pty Ltd (in liq) [2014] NSWSC 1547
Karpik v Carnival plc [2023] HCA 39
Life Insurance Co of Australia Ltd v Phillips (1925) 36 CLR 60
Paciocco v Australian and New Zealand Banking Group Ltd [2015] FCAFC 50; (2015) 236 FCR 199
Pfizer Ireland Pharmaceuticals v Samsung Bioepis AU Pty Ltd [2017] FCAFC 193; (2017) 257 FCAR 62
Pilbara Iron Ore Pty Ltd v Ammon [2020] WASCA 92
Prior v Mole [2017] HCA 10
Spreadex v Battu [2005] EWCA Civ 855
Taylor v Johnson [1983] HCA 5; (1983) 151 CLR 422
The Nominal Defendant v Cordin [2017] NSWCA 6
Turner v MyBudget Pty Ltd [2018] FCA 1407
Tutt v Doyle (1997) 42 NSWLR 10
Westpork Pty Ltd v Bio-Organics Pty Ltd [2018] WASC 291

Table of Contents

Introduction

Relevant factual background

Delay in judgment

Pleadings

Statement of claim

Defence and counterclaim

Reply and defence to counterclaim

Issues for determination

Approach to evidence and onus

Onus and general comments

Witnesses

Adam Tomasso

Daniel Rogers

Lucas Bowers

Daniel Herriotts

Nathan Huynh

Kylie Paton

Key terms of the Agreement

Legislative provisions

Is Term 11 void because it is an unfair contract term?

Proper construction of Term 11

Does Term 11 cause significant imbalance?

Is Term 11 reasonably necessary for the protection of IG Markets' legitimate interests?

Will Term 11 cause financial or non-financial detriment if it is relied upon?

Consideration of the transparency of Term 11 and the Agreement as a whole

Can Term 11 (or part of it) be severed?

Does Term 11 define the main subject matter of the Agreement?

Were the Transactions 'transactions' as defined in the Agreement?

Were the Transactions in relation to a financial instrument or investment?

Is Mr Tomasso entitled to payment of $5,518,251.44 under the Agreement?

Is IG Markets entitled to void each of the Transactions as a unilateral mistake?

Were each of the Transactions a separate contract?

Was IG Markets under a serious mistake as to a fundamental term of each of Transactions?

Was Mr Tomasso aware of IG Markets' mistake?

Did Mr Tomasso set out to ensure that IG Markets did not become aware of the mistake?

Should a declaration be made under s 12GND of the ASIC Act?

Conclusion and orders

Annexure A

HILL J:

Introduction

On the morning of 17 April 2020, the plaintiff, Adam Tomasso, believed he had realised profits of approximately $5.5 million from trading over a period of a little more than 30 minutes on a market described as 'Test FX UP' on a platform operated by the defendant (IG Markets). Mr Tomasso was excitedly waiting to share the news with his wife on her return from work and had started, in his own mind, to spend the money. Unfortunately for Mr Tomasso, his dreams were short‑lived. On the afternoon of 17 April 2020, IG Markets blocked his account and reversed the transactions, which left him with an account balance of approximately $1,500.
Mr Tomasso submitted that the term relied on by IG Markets to reverse the transactions (Term 11) is an unfair contract term and is void under the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act). In his submission, the transactions are valid and enforceable, and he is entitled to be paid $5,518,251.44.
IG Markets denied Term 11 is an unfair contract term and said it was entitled to rely on this term to void the transactions. If this were not accepted, it submitted that these transactions fell outside the terms of their agreement, alternatively were entered into as a result of a unilateral mistake. IG Markets submitted the mistake concerned the contents of each of these transactions, which it believed related to a real and not fictitious market. IG Markets contended Mr Tomasso was aware of the mistake for a number of reasons but did not tell IG Markets. These reasons included the description of the market as a test market and its linear movement in an upwards direction.
For the reasons that follow, I have concluded that Term 11 of the agreement between IG Markets and Mr Tomasso is an unfair contract term within the meaning of the ASIC Act. As a result, this term is void and could not be relied upon by IG Markets to reverse the transactions. The entry which purports to do this in Mr Tomasso's account is similarly void. While each of the transactions occurred on a test market, I do not consider that this meant the transactions fell outside the scope of the agreement. The net effect of these findings is that Mr Tomasso was entitled, under his agreement with IG Markets, to request and to be paid the balance of his account. This request was made and not complied with, which was a breach of the agreement.
In relation to IG Markets' counterclaim, the mistake that led to the transactions being entered into was IG Markets' mistake in inadvertently making the test market available to its clients for trading. This is not the mistake that is pleaded by IG Markets. For this reason, it is my view that the counterclaim must be dismissed.
Given these conclusions, Mr Tomasso's claim will be allowed. Mr Tomasso is entitled to damages in the sum of $5,518,251.44 together with interest.

Relevant factual background

IG Markets is incorporated in the United Kingdom and is a registered foreign company in Australia. IG Australia Pty Ltd (IG Australia) is an authorised representative of IG Markets in Australia. It employs all staff in Australia and, as a result of service agreements in place between the companies, provides dealing and execution services to IG Markets.[1] The parent company of both IG Markets and IG Australia is IG Group.
[1] Ex 568, p 3; ts 356.
Since 3 July 2002, IG Markets has held Australian Financial Services Licence 220440 (AFSL). From 19 August 2015, IG Markets was authorised under its AFSL to provide advice, deal, and make a market in relation to derivatives and foreign exchange contracts for both retail and wholesale clients (as those terms are defined in s 761G of the Corporations Act 2001 (Cth)).[2] At the time of the events in question, IG Markets offered approximately 17,000 different markets to its clients.[3]
[2] Ex 492.
[3] ts 331.
From about 2002, IG Markets made available an online trading platform to its Australian clients (Platform). The Platform offered an over the counter (OTC) derivatives trading service for clients who established a trading account with IG Markets. From about 2010, IG Markets also offered foreign exchange (FX) contract trading services to its Australian clients.
The derivatives[4] made available on the Platform included 'Contracts for Differences', commonly referred to as CFDs. CFDs are leveraged OTC derivatives which allow a person to trade (or speculate)[5] on the fluctuation of the value or price of an underlying instrument without owning it. In essence, a CFD is an agreement between two parties to exchange, at the time the transaction closes, the difference between the opening and closing price of the instrument, multiplied by the number of units specified.[6] The parties to these transactions or CFDs are IG Markets and its client as counterparty.
[4] Derivatives are financial instruments or contracts that derive their value from an underlying asset or collection of assets.
[5] ts 26.
[6] Ex 568, p 3; Ex 567, p 3.
In Spreadex v Battu, Rix LJ described what is involved in these CFD's in the following terms:[7]
[A CFD] enables a customer to take a position on a market (or an event) for a very small stake. Thus if the Dow Jones Index is, say, at 10,000, one can 'buy' or 'sell' the market at a spread around the index of, for the sake of example, 10 points either way, 9,990 to 10,010. If one buys, one is betting that the market will rise above 10,010. If one sells, one is betting that the market will fall below 9,990. If one buys and the market rises, one stands to gain £1 for every point that the index exceeds 10,010. If one sells and the market falls, one stands to gain £1 for every point that the index drops below 9,990. If, however, one calls the market wrong, then one will stand to lose £1 for every point that the index exceeds the spread point in the wrong direction. Thus if one sells at 10,000 with a sell spread point at 9,990, one will make £1 for every point the market falls below 9,990 and lose £1 for every point the market rises above 9,990. Until the bet or 'trade' is closed, the gains and losses are merely 'running' gains or losses. They are real enough, but constantly changing with every change in the index, and have not yet been fixed. Closing the bet will fix the position, win or lose. Unlike a classic bet, the customer can of course lose more than his stake. Indeed, on the example given, of a sale spread point of 9,990 when the market is at 10,000, if the market does not move an inch, the customer will lose £10 for every £1 staked. Nor, again unlike a classic bet, are his winnings fixed at the outset by an agreement on odds. In theory winnings based on rising markets are infinite (in practice of course they are not) and losses based on falling markets are limited only in so far as they cannot exceed the consequences of a fall in the index to zero.
Normally, of course, to gain by £1 for every rise (or fall) of a single point in a stock market index such as the Dow Jones would take an investment of significantly more than £1. In effect, one's £1 bet commands a position in the market significantly greater than the stake. In other words, there is a large element of gearing in the trade, and the situation is correspondingly volatile. Where the market in question is itself in a volatile phase, the risks become even greater. Thus, if the Dow Jones is capable of moving within a range of 100 or 200 points in a single day, the customer can be £100 to £200 richer or poorer per £1 stake within a matter of hours of his trade. On a trade of £100, those figures become £10,000 to £20,000.
[7] Spreadex v Battu [2005] EWCA Civ 855 [2] - [3].
Sometime between June and September 2011, Mr Tomasso, a retail client, established a trading account with IG Markets with account number TL 173 (Account).[8] At the time he established the Account, Mr Tomasso was studying a Master of Finance.[9] He opened the Account for 'speculative investments' and to trade leveraged products with the intention of making a quick profit.[10] Initially, he conducted most of his trading or transactions on a web-based platform from his computer but, as time progressed, conducted almost all his trades or transactions from his iPhone.[11]
[8] There is a difference on the pleadings as to when Mr Tomasso established his Account (see statement of claim [4]; defence and counterclaim [4]; reply and defence to counterclaim [3]). The difference in these dates is not material for the purposes of the plaintiff's claim.
[9] ts 141.
[10] ts 142.
[11] ts 143.
The Account was subject to IG Market's Customer Agreement. When the Customer Agreement was updated by IG Markets, which occurred from time to time, its clients, including Mr Tomasso, were notified by email.
On 25 January 2019, IG Markets notified Mr Tomasso by email that changes were being made to the Customer Agreement as well as to its product disclosure statement, which took effect from 13 February 2019.[12] The email attached a copy of an agreement entitled 'IG Markets Limited, Margin Trading Australian Customer Agreement, February 2019' (Agreement).[13]
[12] Ex 28.
[13] Ex 29; see also Ex 486.
Between 13 February 2019 and 26 March 2021, all transactions undertaken by Mr Tomasso on his Account were subject to the terms of the Agreement.[14] Term 11 reserved to IG Markets the right to either void from the outset or amend the terms of any transaction which contained or was based on an error which IG Markets reasonably believed was obvious or palpable. In exercising its rights under Term 11, IG Markets was required, under term 27(10), to act in good faith according to what it reasonably believed was fair in the circumstances. The proper construction of Term 11 was at the heart of the dispute between the parties. The precise wording of this term is set out below at [153].
[14] In the Agreement, clauses are referred to as 'terms'. I have adopted this terminology in these reasons.
In 2020, one of the types of CFDs which IG Markets offered to its clients (including retail clients) was 'IG Digital 100s Options'. These CFDs were described as:[15]
[A] special type of CFD with an 'all or nothing' payment profile. IG Digital 100s allow you to trade on discrete financial, non-financial or political events, such as the closing level of a stock index on a particular day. All IG Digital 100s have only two possible results.
[15] Ex 567, p 8.
Because there were only two possible results or outcomes on this type of CFD, they were described as 'binary options'.[16] That is, on a IG Digital 100s Option, either the client 'wins' and IG Markets pays them, or the client 'loses' and they lose the money that was invested (or, perhaps more accurately, was speculated).
[16] ts 145 - 146.
It was not possible to place a limit (or stop) on a position taken by a client on IG Digital 100s Options. These CFDs were described in IG Markets' product disclosure statement (PDS) as 'limited risk' transactions. This was because the extent of a client's liability was limited to the amount invested (or speculated), although the liability or loss could be sustained in a relatively short period of time.[17]
[17] Ex 567, p 8. From 2021, these types of options are no longer able to be offered to retail clients (ts 323).
In Australian Securities and Investment Commission v AGM Markets Pty Ltd (in liq) [No 4], Beach J adopted the description of binary options given by the Australian Securities and Investments Commission (ASIC), namely:[18]
OTC derivatives that allow clients to make 'all-or-nothing' bets on the occurrence or non-occurrence of a specified event in a defined timeframe, for example, the price of gold increasing in 30 seconds. In other words, they are little more than gambling.
[18] Australian Securities and Investment Commission v AGM Markets Pty Ltd (in liq) [No 4] [2020] FCA 1499; (2020) 148 ACSR 511 [17].
His Honour went on to describe binary options as 'financial heroin hits';[19] a description with which I agree and adopt.
[19] Australian Securities and Investment Commission v AGM Markets Pty Ltd (in liq) [No 4] [25].
From time to time, IG Markets also offered IG Digital 100s Options in relation to political events. In relation to these options, IG Markets set the price at which it was prepared to offer the product. This price altered over time based on updated information and events. In respect of these options, there was no underlying market or investment,[20] although the outcome was objectively ascertainable. Since 2019, IG Markets has not offered to its Australian clients any IG Digital 100s Options in relation to political events, although it was entitled to do so under the terms of the Agreement.
[20] ts 292, 365.
IG Markets operated a number of test markets on its internal systems (Test Markets). These included markets named 'CS.D.TSTFXDN.CFD.IP' (Test FX Down) and 'CS.D.TSTFXUP.CFD.IP' (Test FX UP).[21] The Test Markets were used for two main purposes. First, to enable IG Markets to test new features on the Platform and to ensure that its software continued to work after changes or updates were made to its systems. Where an update to its systems was made, IG Markets used the Test Markets as part of its quality evaluation process to ensure all systems were functioning correctly.[22] Second, following the completion of disaster recovery drills (which occurs once a quarter), to ensure that all systems were functioning correctly before markets were made available to clients for trading.[23]
[21] Ex A [2].
[22] Ex A [3].
[23] Ex A [4].
On 16 and 17 April 2020, a CFD market named 'Test FX UP' appeared on the Platform. This was an error that occurred as a result of one of IG Markets' employees inadvertently making the Test Markets available to clients to trade on the Platform.[24]
[24] Ex 436; Ex 564.
Between 10.51 pm on 16 April 2020 and 10.41 am on 17 April 2020, Mr Tomasso opened and closed 19 separate transactions or trades on Test FX UP in three windows (Transactions).[25]
[25] The details of the transactions in Mr Tomasso's statements record the time of each transaction in Australian Eastern Standard Time. Given that the transactions were undertaken by Mr Tomasso in Perth, at trial, the times were referred to in Australian Western Standard Time (ts 26). I have continued this approach in these reasons.

Between 10.51 pm on 16 April 2020 and 1.03 am on 17 April 2020 (first window), Mr Tomasso opened and closed nine transactions in a currency described as 'QNZ' on Test FX UP. There is no dispute that QNZ is not a real currency.[26] During the first window, Mr Tomasso did not enter into any other transactions on the Platform.
[26] Senior counsel for Mr Tomasso accepted there was no evidence that QNZ was a real currency (ts 32).
The details of these transactions are set out in Part 1 of Annexure A to these reasons. In summary:
(a)at 10.51.57 pm on 16 April 2020, Mr Tomasso opened a transaction on Test FX UP to buy one contract at a price of 57.1169;
(b)approximately nine minutes later, at 11.00.55 pm, Mr Tomasso closed this transaction by selling the one contract at a price of 57.6547. This resulted in a 'gain' of $0.51;
(c)over the next two hours (from approximately 11.00 pm on 16 April 2020 until about 1.00 am on 17 April 2020), Mr Tomasso opened and closed another eight transactions. Each transaction was open only for a short period of time, ranging from a few minutes to almost half an hour. In these transactions, Mr Tomasso progressively increased the number of contracts that he bought and sold (1, 80, 500, 650, 900, 1100, 1300, 2000 and 2500). For this reason, the notional value of the total of these contracts (in Australian dollars) also increased (from $54 to $150,000) as did the 'gain' or 'profit' from each transaction;
(d)Mr Tomasso placed a stop order on each transaction he opened. The first stop was 0.0028 below the buy price. After this, the stop order on each subsequent transaction was the same (0.001 below the buy price);
(e)the last of the transactions was closed by Mr Tomasso at 1.03.40 am on 17 April 2020, at the price of 65.0197; and
(f)the price at which he opened and closed each transaction was higher than the price of the previous transaction.
Prior to undertaking these transactions, Mr Tomasso was at home with his wife and two young daughters. At about 10.30 pm on 16 April 2020, he was on his iPhone flicking between an eBook and browsing through the markets on the Platform to see what was on offer.[27] When doing this, Mr Tomasso came across a market titled 'Test FX' which he had not seen before. He went into the Test FX market and saw three different markets: Test FX UP; Test FX Down; and Test FX Neutral. Test FX UP and Test FX Down had a green marker on the left hand side of the screen, which indicated they were live markets, whereas Test FX Neutral had a yellow marker, which indicated it could not be traded on the Platform as of right.[28] Mr Tomasso went into both Test FX UP and Test FX Down, and formed the view that each was some 'type of binary product'. He believed that Test FX UP was 'in the money' so clicked on Test FX UP. This took him through to a trading screen. He went into the chart screen for 'about 10 to 15 seconds' and saw bars of varying lengths which ran from 'close to zero or zero all the way up to 100', with many of them having very long 'wicks'.[29] From this chart, Mr Tomasso formed the view that this chart depicted variability in price as well as 'potentially some type of binary option'.[30] At trial, Mr Tomasso accepted that he now knew this was not the case.[31]
[27] ts 149 - 150.
[28] Mr Tomasso's evidence was that he believed the yellow marker meant that it was necessary for a call to be made to IG Markets to enable a transaction to be opened or closed on this market (ts 150).
[29] A 'wick' shows the opening and closing prices for the particular product on each day it is traded.
[30] ts 150 - 151.
[31] ts 169.
After reviewing the chart, Mr Tomasso went back to the trading screen and opened his first transaction. After this first transaction was placed, Mr Tomasso went back to reading his eBook and flicked between the screens for the next couple of hours.[32] His evidence was that he started to get comfortable with the product (Test FX UP) and took on increasing positions. He closed all of these transactions before he went to bed that night as he 'didn't know the market well enough to leave it on overnight'.[33]
[32] ts 152 - 153.
[33] ts 153.
On the morning of 17 April 2020, IG Markets emailed a statement to Mr Tomasso. The statement, which was automatically generated as a consequence of these transactions,[34] recorded a balance in his account of $10,328.05.[35] This balance reflected all of the transactions during the first window on Test FX UP; as well as an open transaction in relation to 'Ether/Bitcoin', which Mr Tomasso had opened at 7.25 pm on 16 April 2020, and two separate open transactions in relation to the Australian dollar, which were placed on 1 and 3 April 2020.
[34] ts 355.
[35] Ex 1 - 2.
Mr Tomasso's recollection was that he briefly reviewed his statement on the morning of 17 April 2020 and noted he had an account balance of $10,000.[36] Mr Tomasso agreed this was probably one of his highest balances since opening his Account.[37]
[36] ts 154.
[37] ts 176.
On 17 April 2020, between 7.07 am and 7.42 am (second window) and between 10.36 am and 10.41 am (third window), Mr Tomasso opened and closed a further 10 transactions on Test FX UP. The detail of each of these transactions, together with a further two transactions that were entered into on 17 April 2020 (which are described below at [39]), is set out in Part 2 of Annexure A to these reasons.
In summary, during the second window:
(a)Mr Tomasso opened his first transaction on Test FX UP at 7.07.21 am. He purchased 50,000 contracts at a price of 0.4409, with a stop order of 0.4399. Mr Tomasso closed this transaction at 7.23.08 am, by selling all 50,000 contracts at a price of 1.3867;
(b)after opening this transaction, Mr Tomasso opened a further eight transactions, being:
(i)at 7.12.13 am, 150,000 contracts at an opening price of 0.7329;
(ii)at 7.14.30 am, 500,000 contracts at an opening price of 0.8699;
(iii)at 7.16.49 am, 500,000 contracts at an opening price of 1.0089;
(iv)at 7.19.30 am, one million contracts at an opening price of 1.1699;
(v)at 7.23.47 am, one million contracts at an opening price of 1.4269;
(vi)at 7.26.31 am, one million contracts at an opening price of 1.5909;
(vii)at 7.27.00 am, one million contracts at an opening price of 1.6199; and
(viii)at 7.33.59 am, one million contracts at an opening price of 2.0389;
(c)Mr Tomasso placed stop orders on each of these transactions that were 0.001 below the buy price;
(d)the notional value of these contracts (in Australian dollars) increased from approximately $20,000 to $1.9 million; and
(e)each of these transactions was closed between approximately 12 to 22 minutes after they were opened, at a higher price than the buy price. The last transaction was closed at 7.42.10 am at a price of 2.5297.
Finally, during the third window, Mr Tomasso opened and closed one transaction on Test FX UP. At 10.36.29 am on 17 April 2020, Mr Tomasso bought one million contracts at 12.9889, with a stop order that was 0.001 below the buy price. Shortly afterwards, at 10.41.46 am, Mr Tomasso closed this transaction at a price of 13.3057. The notional value of this contract (in Australian dollars) was more than $12.2 million.
During the second and third windows, Mr Tomasso did not enter into any other transactions on the Platform.
Mr Tomasso's evidence was that on the morning of 17 April 2020, he was responsible for looking after his two young daughters (who were then two and five) and dropping them off to his parents' house, as his wife had already left for an early morning shift at work. While he was getting breakfast for his daughters, he went back through the product screen on the Platform and into Test FX UP. He saw that it was close to zero and 'immediately saw an opportunity'. Because it was very close to zero, he believed that he might be able to 'catch an upswing' and opened a transaction using most of the amount he had made the night before.[38] He explained that this was because he saw a 'massive opportunity' at a 'fairly low risk'.[39] After placing this transaction, he tried to keep himself distracted, including by looking after his daughters, and flicked between the trading screen and what he was doing at the time. He saw that the profits were starting to increase and continued to 'reinvest those open profits and open up more positions'. He believed that he reached the maximum quantity of one million contracts, which he chose because it was a 'nice round number'.[40]
[38] ts 155.
[39] ts 156.
[40] ts 156.
Mr Tomasso thought that he was 'getting very lucky' from undertaking the Transactions which he described as high reward and low risk, although he also said he 'was risking a lot' at the same time.[41] He took a couple of screenshots during this second window[42] so that he could show his wife in case he 'lost it all'.[43]
[41] ts 157.
[42] Ex 17 - 19.
[43] ts 157.
Mr Tomasso explained that on the morning of 17 April 2020, he ceased trading at 7.42 am because he needed to get his daughters to his parents' house. At that stage, the Platform was indicating he had made a profit from these Transactions of more than $5 million and as a result, he closed all open transactions. Mr Tomasso described this amount as being 'lifechanging'.[44]
[44] ts 159.
After dropping his daughters off to his parents' house, Mr Tomasso returned home, where he was working that day. While he was working, he checked his Account and, at 10.36.29 am, decided to open another transaction of one million contracts on Test FX UP because it was still at fairly 'low levels'. He closed this transaction after about five minutes:[45]
[45] ts 160.
At 10.45.04 am on 17 April 2020, Mr Tomasso opened a transaction on a market entitled 'Australia 200 12 pm - 1pm to be above [5540]' (Australia 200 Market). He closed this transaction at 11.01.33 am that day and recorded a loss of $14,717.22.[46] This loss was reversed by IG Markets in the correction that it subsequently put through. IG Markets has not required Mr Tomasso to repay this amount.[47]
[46] Ex 6.
[47] Ex 435.
Shortly after this, Mr Tomasso attempted to open a transaction on an ASX 200[48] binary option CFD and received a message that the Account had been restricted. His evidence was that he initially thought this was because he had suffered a larger loss on his last transaction (on the Australia 200 Market) than he had ever experienced. He assumed the amount of this loss had been 'flagged' and a cooling‑off period automatically imposed.[49] After about 30 minutes, he went back onto the Platform and saw that Test FX UP had been removed.[50]
[48] The top 200 companies listed on the Australian Securities Exchange (ASX) by market capitalisation.
[49] ts 161.
[50] ts 162.
At approximately 2.00 pm on 17 April 2020, two alerts known as 'oddities'[51] were automatically generated by IG Markets' systems in its trading monitor system.[52] These oddities occurred as a result of the currency conversion from one currency (the fictitious QNZ) into another currency (the Australian dollar or AUD) which was above a certain threshold. When an oddity was generated, a dealer checked the underlying transaction or transactions to verify it was a correct conversion.[53] These alerts came up on the screen of Nathan Huynh, who was not sure what the oddities were referring to as he was not aware of any currency known as QNZ. Mr Huynh then messaged his colleague, Kieran Hauenstein. After a brief exchange between them, Mr Hauenstein identified that some clients had been trading on the Test Markets (including Test FX UP).[54]
[51] ts 299.
[52] Ex 395; Ex 403; Ex 499.
[53] ts 300 - 301.
[54] Ex 402.
Mr Huynh then searched IG Markets' systems to identify what transactions had occurred on the Test Markets over the previous hour or so and identified five clients who had undertaken transactions on the Test Markets.[55] Mr Huynh then searched the Platform and confirmed he could see the Test Markets on the Platform, and that at least some of the Test Markets had tradeable status. He viewed an intra-day chart for the Test FX UP market, which showed that the market moved linearly upwards in uniform increments, which he considered unusual, and that the opposite was the case for the Test FX Down market. In his opinion, 'these were quite obviously not real markets.[56]
[55] ts 305 - 307.
[56] ts 308 - 309.
Mr Hauenstein removed the ability of the five clients who traded on the Test Markets to open any further transactions,[57] and Mr Huynh hid both Test Market UP and Test Market Down from being tradeable on the Platform.[58]
[57] Ex 402.
[58] Ex 494.
Mr Huynh requested that the Account (and the accounts of the four other clients who had undertaken transactions on the Test Markets) be set to 'Banned Payments' (preventing any automatic withdrawal of funds) which was approved by Paul Rodgers,[59] and for a correction of
[59] Ex 397; ts 313 - 314.
[60] Ex 459; ts 312. Mr Huynh described the errors as obvious and palpable.
[61] Ex 460.
[62] ts 313.
- $5,518,251.44 to be made to the Account. This was on the basis that, in his view, each of the Transactions was based on an obvious and manifest error.[60] Mr Huynh's request for the correction to the Account was also approved by Mr Rodgers.[61] This had the effect of reversing all the Transactions.[62]
At 2.07 pm on 17 April 2020, IG Markets recorded an entry on the Account with the description 'Correction Closing Trade Test FX UP' which reduced the balance of the Account by $5,518,251.44 (Correction).[63] The Correction reversed the 'profit' on the Transactions Mr Tomasso undertook on Test FX UP, as well as the loss sustained from the subsequent binary option trade he had placed on the Australia 200 Market.[64] IG Markets also locked the Account. IG Markets did not speak to or contact Mr Tomasso before undertaking the Correction or locking the Account.
[63] Ex 4.
[64] Ex 443.
At about 2.30 pm on 17 April 2020, Mr Tomasso became aware that the Transactions had been reversed by IG Markets.[65] At 2.48 pm that same day, Mr Tomasso emailed the help desk at IG Markets and queried the Correction. Mr Tomasso stated that he had watched the trading chart of a Test FX market which was made available for him to trade on and 'decided to risk [his] capital in order to capitalise on short term movements'. He referred to the Correction as adjusting for the entire net gain and expressed the view that he did not understand 'why the full adjustment' had occurred. He then noted:[66]
-This market was made available to me to trade. In my trading I look for any market in which I see favorable (sic) risk / return characteristics. My trading decisions are not based on what the underlying market is. As such when I see a market made available to trade, I would expect IG Markets to honor (sic) the market. If this market was made available by mistake then I would argue that IG Markets would need to bear the cost of the mistake.
-I risked my own capital in setting up this trade. I initially risked a significant portion of my trading capital in order to test and trade this available market. This trade could have gone against me in which I would have lost my own capital. As such I should be rewarded for taking on this risk.
In saying that, I accept if this market was available by mistake by IG Markets, however for the reasons stated above I can only agree to a partial correction [sic]. Can we please come to an arrangement that is mutually agreeable to both parties.
[65] ts 162.
[66] Ex 3 (an identical document is Ex 409).
Later that night, at 9.46 pm, Mr Tomasso took screenshots on his iPhone of the transaction history of his Account from 17 and 18 April 2020.[67] At this stage, he had not received a statement from IG Markets, but knew the Transactions had been reversed and wanted to preserve the transaction history.[68]
[67] Ex 17 - 23.
[68] ts 157 - 159.
On the morning of 18 April 2020, Mr Tomasso received another statement from IG Markets which recorded the balance of his Account as being $1,579.56.[69] This balance reflected all of the Transactions, the loss he had sustained on the Australia 200 Market, and the Correction.
[69] Ex 4. See also statement emailed on 20 April 2020 (Ex 5 - 6).
On 19 April 2020, Mr Tomasso sent another email to the help desk of IG Markets. He asked that the status of the Account be reviewed as he was still restricted from opening any new transactions.[70]
[70] Ex 406.
Jasmine Chen of the compliance team of IG Markets responded by email to Mr Tomasso's query on 20 April 2020.[71] Her email, the contents of which were approved by Dan Herriotts and Kylie Paton,[72] mistakenly referred to transactions placed by Mr Tomasso on Test FX Down[73] rather than Test FX UP. This was because a similar email was sent to a client who had traded on Test FX Down.[74] In her email, Ms Chen explained the Test Markets were 'erroneously switched to a status that was visible to clients for a short period' and advised that as the Transactions were placed on a test market, they were void in accordance with Term 11(1).
[71] Ex 8.
[72] Ex 423; ts 354.
[73] Referred to in the email as 'Test FX DOWN'.
[74] ts 354.
After IG Markets became aware of the issue, Daniel Rogers conducted an investigation as to how this had occurred. The investigation concluded that on 16 April 2020, an employee had made a change to its systems to address an issue where clients in the United Kingdom reported occasionally seeing incorrectly scaled FX prices on their mobile platforms. To address this issue, the employee changed some of the market configuration settings. Specifically, the employee gave clients with access to a particular exchange (FX_C_MAIN_ST) access to all markets with the prefix 'CS' and the suffix 'CFD'. This included access to the Test Markets. The effect of these changes was that the Test Markets were made visible to clients of IG Markets as markets that were available for trading.[75]
[75] Ex 436; ts 208 - 210.
In Mr Rogers' report on the incident to senior management on 17 April 2020, he expressed the view that:[76]
Given that the markets were called 'TESTFXUP' and 'TESTFXDOWN', the clients would have been aware that the instrument traded was being was not a legitimate market [sic].
[76] Ex 564.
Mr Rogers' evidence was that in addition to the names of the Test Markets, he considered the behaviour of the Test Markets (namely, their predictable movement without any random fluctuations or changes in patterns of behaviour) also indicated they were not legitimate markets. However, he accepted that IG Markets' clients would not have his level of understanding of this behaviour.[77]
[77] ts 212 - 214.
On 12 May 2020, Mr Tomasso responded to Ms Chen's email (at [50] above) acknowledging receipt, reserving his rights, and informing IG Markets that his lawyers were currently considering the matter.[78]
[78] Ex 419.
Following the issue of a letter of demand on 20 January 2022,[79] Mr Tomasso commenced these proceedings on 17 June 2022.
[79] Ex 408.

Delay in judgment

The hearing of this matter took place in March 2024. Regrettably, it has not been possible to finalise my reasons for decision as quickly as I would have liked.
In order to properly assess the parties' cases and the evidence that was given at trial and to ensure this has not been impaired by the delay between the hearing and the publication of these reasons, I have done the following.
First, my conclusions as to the credit and reliability of the witnesses were written at the time and shortly after each witness gave their evidence.
Second, I have refreshed my memory by reading the transcript of the evidence of each of the witnesses and re-listening to portions of the evidence of Mr Tomasso. During the trial, I made notes of evidence given by the witnesses and my observations of each of them. My assessment of the witnesses has been assisted by my review of these notes, the transcript, as well as the documents that were tendered in evidence.

Third, I had the benefit of detailed written and oral closing submissions. Each of the parties made submissions on the evidence given by the witnesses, including the findings of fact that each contended should be made. Senior counsel for both parties made detailed submissions on the credibility of Mr Tomasso (in particular) and the reasons for the submissions.
Finally, my conclusions as to the credit and reliability of the witnesses, and in particular Mr Tomasso, are primarily based on an overall assessment of their evidence, including whether the evidence was consistent with contemporaneous documents and the facts that were objectively established.

Pleadings

Statement of claim

Mr Tomasso's pleaded case against IG Markets was a straightforward breach of contract claim.
In essence, Mr Tomasso said that IG Markets breached the Agreement by failing to pay him $5,518,251.44. This argument was advanced on the basis that Term 11 was an unfair contract term within the meaning of s 12BG of the ASIC Act and, as a consequence, was void. Mr Tomasso pleaded that he is entitled to be paid this amount under the Agreement and that, despite demand, this has not occurred.
By way of relief, Mr Tomasso sought declarations under the ASIC Act that Term 11 is void and an unfair contract term, and payment of $5,518,251.44, alternatively damages, together with interest and costs.

Defence and counterclaim

IG Markets denied that Term 11 was an unfair contract term. This was because Term 11 was not inherently disadvantageous to either party and was intended to avoid either party unfairly gaining an advantage or suffering a disadvantage caused by manifest error, did not give rise to any substantive unfairness, was reasonably necessary to protect its legitimate interests, and did not cause any detriment to Mr Tomasso. In addition, IG Markets contended that Term 11 defined (by exclusion or qualification) the main subject matter of the Agreement. For this reason, pursuant to s 12BI(1)(a) of the ASIC Act, s 12BF of the ASIC Act did not apply to Term 11.
IG Markets said that it validly applied and relied on Term 11 to void the Transactions. In support of this contention, IG Markets pleaded that:
(a)each of the Transactions was based on an error which IG Markets reasonably believed was obvious or palpable, namely that 'Test FX UP' was a test market which had inadvertently been made visible to its clients;
(b)it acted reasonably in deciding this was a manifest error; and
(c)it validly exercised its right or discretion under Term 11 to void each of the Transactions from the outset.
Particulars were sought and provided by IG Markets in relation to these contentions. IG Markets said that its belief was based on the review by Mr Herriotts and Mr Huynh (both of the IG Markets' Dealing team) of the Transactions on 17 April 2020 and their subsequent decision that the error was a manifest error.
IG Markets also denied the Transactions undertaken by Mr Tomasso created any rights or liabilities under the Agreement. This was on the basis that Test FX UP was not an 'Instrument' as defined in the Agreement; the Transactions were not undertaken in relation to any Instrument; and, as a result, the Transactions did not constitute a 'Transaction' under the Agreement.
IG Markets accepted it has not paid Mr Tomasso the amount claimed by him but denied he was entitled to payment of any amount or that he has suffered loss and damage.
IG Markets also filed a counterclaim against Mr Tomasso. The counterclaim pleaded two additional matters: unilateral mistake and res extincta. Each arose from the following contentions:
(a)each of the Transactions was a separate contract;
(b)at the time of entry into each contract, IG Markets believed the contracts were in relation to a stock, share, futures, contract, forward or option contract, commodity, precious metal, exchange rate, interest rate, debt instrument, stock or other index, digital asset or other investment;
(c)IG Markets was operating under a serious mistake as to the contents of each of these contracts in relation to a fundamental term or subject matter; and
(d)at the time Mr Tomasso offered to open and close each Transaction, he was aware that Test FX UP was labelled as a test market; prices on Test FX UP moved up linearly every day before resetting at approximately midnight London time; and prices on Test FX UP increased every day from approximately 8 points to 863,398 points.
Given these matters, IG Markets pleaded that Mr Tomasso was aware, alternatively suspected, that circumstances existed which indicated IG Markets was entering into the Transactions under a serious mistake as to the contents of the contracts in relation to a fundamental term or subject matter of the contracts, and remained silent. IG Markets contended that Mr Tomasso's conduct was unconscionable.
Particulars were sought and provided of the allegations concerning Mr Tomasso's state of knowledge. The particulars provided by IG Markets relied on Mr Tomasso's review of the trading chart for Test FX UP, and the times at which he opened and closed each of the Transactions.
In the alternative, IG Markets said that each of the contracts was void on the basis that each purported to be a CFD in the value or price of an underlying instrument or currency in circumstances where these differences did not, in fact, exist.
IG Markets said that each of the contracts in respect of the Transactions should be rescinded, alternatively declared void.

Reply and defence to counterclaim

Mr Tomasso denied that Term 11 avoided IG Markets' clients suffering a disadvantage from their own errors. This was because term 4(9) of the Agreement made it clear that a transaction was valid and binding on a client even where it was a result of inaccuracy or error.
Mr Tomasso also denied that IG Markets was entitled to record the Correction of $5,518,251.44. Specifically, he denied the Transactions were based on an error, that IG Markets acted reasonably in deciding any error was a manifest error, or that IG Markets validly exercised its rights or discretion under Term 11 to void the Transactions from the outset.
In response to the counterclaim, Mr Tomasso denied that each of the Transactions was a separate contract. While he accepted he knew the name of the relevant market was Test FX UP,[80] he denied he was aware it was a test market, or that this description was sufficient to convey that the test market had been inadvertently made available and visible to clients on the Platform.
[80] In the pleadings this market is referred to as 'Test FX Up': see defence and counterclaim [39], reply and defence to counterclaim [20(a)]. For consistency, I have adopted the definition 'Test FX UP' throughout these reasons.
Mr Tomasso denied IG Markets made any serious mistake in relation to the Transactions or that, if it did, he was aware of this prior to the conclusion of the Transactions.
Mr Tomasso also denied there was any common mistake as to the existence of the subject matter of the Agreement and that if there was, it was induced by the carelessness or negligence of IG Markets in making the Test FX UP market visible to clients. He said that as a result, IG Markets is estopped from denying the validity of the Transactions.

Issues for determination

The parties agreed the following issues arise for determination in these proceedings:
(a)Is Term 11 an unfair contract term pursuant to s 12BG of the ASIC Act and, as a consequence, void?
(b)If Term 11 is not void and is a term of the Agreement, did IG Markets validly exercise its rights under Term 11 to void the Transactions?
(c)On the proper construction of the Agreement, are the Transactions 'transactions' as defined in the Agreement?
(d)Is Mr Tomasso entitled to payment of $5,518,251.44 under the Agreement?
(e)Is any entitlement that Mr Tomasso may have to payment vitiated, rescinded or void on the basis of unilateral mistake or res extincta (common mistake)?
In closing submissions, these issues were narrowed further. Senior counsel for Mr Tomasso did not press the second issue, namely whether, in the event Term 11 was not void, the conduct of IG Markets was a valid exercise of its rights.[81] In relation to IG Markets' counterclaim, IG Markets only relied on unilateral mistake and not res extincta.[82] On this basis, I have not addressed these issues in these reasons.
[81] Plaintiff's closing submissions [12].
[82] Defendant's closing submissions [11].

Approach to evidence and onus

Onus and general comments

Mr Tomasso's cause of action arose under the ASIC Act. Under the express provisions of the ASIC Act, the onus shifts between the parties in relation to the proof of certain elements. I have specifically addressed this below at [142]. The standard of proof is, at all times, the balance of probabilities.
In considering the evidence in this case, I have applied the following principles.
Human memory is fallible for a variety of reasons. Ordinarily, this increases over time, particularly where disputes or litigation intervene.
False memories can intrude in a witness' evidence, especially when the person recalling events has tried to assemble recollections logically. In doing so, the person can attempt to have some rational explanation in their mind as to what has happened. It is important to keep in mind that memories are both fluid and malleable and are constantly rewritten whenever they are retrieved.[83]
[83] The Nominal Defendant v Cordin [2017] NSWCA 6 [169] (Davies J, Emmett AJA agreeing).
The credibility of a witness and their veracity may be tested by reference to the objective facts which can be proved independently, particularly by reference to documents. Often, in cases which involve events which occurred long before the witness gives evidence, the only safe course is to place primary emphasis on the objective factual surrounding material, the inherent commercial probabilities and the contemporaneous documents. This is because the contemporaneous statements and documents are likely to be a more accurate reflection of events than later statements. Documents will often provide more valuable information than the attempted recollection of the facts by a witness with an interest in the outcome of the litigation. This is particularly the case when the documents are accepted as genuine and were prepared by a person who had no reason to misstate the facts in these documents.[84]

Witnesses

[84] In the matter of Kit Digital Australia Pty Ltd (in liq) [2014] NSWSC 1547 [7]; Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd [1999] HCA 15; (1999) 161 ALR 599 [15]; Hughes v St Barbara Mines Ltd[No 4] [2010] WASC 160 [157].

Mr Tomasso gave evidence at trial and was the only witness called by him. Mr Tomasso's evidence was only relevant to the issues raised in IG Markets' counterclaim as to mistake.
The defendant called five witnesses at trial, all current employees of an IG Markets entity. These witnesses were Mr Rogers, Lucas Bowers, Mr Herriotts, Mr Huynh and Ms Paton.
At trial, most of the facts were not seriously in dispute. The primary factual issue between the parties was the extent to which Mr Tomasso knew (if at all) that 'Test FX UP' was not a real market and that his ability to access and trade on this market occurred as a result of an error by IG Markets.

Adam Tomasso

Mr Tomasso has a bachelor's degree in physics and a Master in Finance, which he obtained in 2012. After graduating, he was employed by Ernst & Young as a senior consultant in valuation business modelling, before being promoted to manager. After approximately six years with Ernst & Young, Mr Tomasso resigned to take up a position as a senior investment analyst with Hall & Prior, where (at the time of the trial) he was employed as director of corporate development. In his curriculum vitae, Mr Tomasso described his strengths as numerical analysis and having an in‑depth knowledge of financial modelling.[85]
[85] ts 165.
The submissions made by the parties about Mr Tomasso's evidence were diametrically opposed. Senior counsel for Mr Tomasso submitted that Mr Tomasso was frank and truthful and that his evidence should be accepted.[86] In contrast, senior counsel for IG Markets described Mr Tomasso's evidence as implausible, contradictory and self‑serving, and submitted his evidence should be rejected.[87]
[86] Plaintiff's closing submissions [36].
[87] Defendant's closing submissions [49] - [50].
At the time the Transactions were undertaken, Mr Tomasso was married with two young daughters. He owned a home, which was purchased in 2016 for $590,000 and still subject to a mortgage. He had savings of approximately $75,000, and an annual salary of less than $200,000. Mr Tomasso accepted that if he lost 'millions on trading', his family would be destitute and explained this risk was something he would never expose his family to.[88]
[88] ts 182 - 183.
In that context, there were a number of aspects of Mr Tomasso's evidence regarding the Transactions that were unsatisfactory.
First, at the time Mr Tomasso undertook the Transactions, he had been a client of IG Markets for almost nine years and had placed more than 700 trades on a wide range of different markets, including on binary options. At trial, he first described his trading as being initially 'very speculative' with a gambling mentality, before going through what he described as an 'iterative process' where he tried new things, products, and strategies to make a profit.[89] He subsequently denied he had any trading strategy and said his trades were pure speculation and gambling.[90] While I accept the terms 'speculation' and 'gambling' are an accurate description of the transactions Mr Tomasso undertook on his Account, given his educational qualifications, work history, self‑proclaimed strengths, passion for share and options trading, and documents he created,[91] I do not accept his assertion that his trading or the Transactions were entered into without any strategy or thought. Mr Tomasso's attempts to downplay his approach can be contrasted with the contents of his contemporaneous email sent to IG Markets shortly after his Account was suspended. In this email, Mr Tomasso emphasised his strategy as being focussed on favourable risk/return characteristics.[92] In my view, his description of his trading strategy was an attempt to minimise his conduct and was self‑serving.
[89] ts 141 - 142.
[90] ts 146.
[91] Ex 489.
[92] Ex 3; Ex 409.
Second, Mr Tomasso's trading history over the year or so prior to the Transactions indicated he traded in various products offered by IG Markets and was relatively conservative in his trading activity. Mr Tomasso accepted this was the case, at least in relation to the quantum of the Transactions.[93] In that context, the Transactions were inconsistent with this trading history. This is particularly evident from the number of transactions he attempted to open during the second window which were rejected. Almost immediately after a transaction was rejected, Mr Tomasso attempted to open either the same transaction or, in the case of a number of the transactions in the second window, opened a transaction for a reduced number of contracts.[94] Th most notable example of this is his attempt to purchase five million contracts at 7.26.03 am on 17 April 2020. When this attempt was rejected, he attempted to purchase two million contracts 14 seconds later. When this attempt was also rejected, he attempted (and successfully) purchased one million contracts a further 14 seconds later.[95] While I accept these events happened quickly and that, at the time, Mr Tomasso had not received any explanation from IG Markets as to why some of his attempts to purchase contracts were rejected, I do not accept his explanation that his uncharacteristic trading behaviour was the result of being 'on a rush' and operating out of excitement.[96] His behaviour was, in my view, more consistent with Mr Tomasso knowing (or at minimum, suspecting) that Test FX UP moved only in one direction and that he would almost certainly make a profit on any transactions opened and closed on this market. This is also more consistent with what Mr Tomasso described as his focus on favourable risk/return markets. Test FX UP had no risk and offered significant (and guaranteed) returns.
[93] ts 183.
[94] Ex 530C.
[95] Ex 530C, rows 197 - 199.
[96] ts 187.
Third, Mr Tomasso's evidence that he believed the Test FX UP market was a binary option CFD was inconsistent with both the essential features of a binary option, and how binary options could be accessed on the Platform at the time. These inconsistencies included the absence of an expiry date or time on the Transactions as well as the ability to place a stop on the Transactions (which is not possible for binary option CFDs).[97] Mr Tomasso's trading history showed he regularly traded in binary option CFDs and was familiar with their essential features.[98] In addition, at that time, it was not possible to trade binary options on the Platform from IG Markets' iPhone application.[99] Mr Tomasso did not recall whether this was the case, although he accepted the other binary option CFD he opened shortly after the third window (on the Australia 200 Market) was done on a web‑based platform from his work computer, and not his iPhone.[100] Given these matters, I do not accept his evidence that he believed Test FX UP was a binary option CFD.
[97] ts 170 - 171.
[98] Ex 13.
[99] ts 326.
[100] ts 170.
Fourth, the Transactions were inconsistent with Mr Tomasso's self‑declared trading strategy.[101] He described this strategy as looking for opportunities to generate profit from the passage of time. However, Mr Tomasso accepted Test FX UP did not have an expiry date and that time decay had 'absolutely nothing' to do with his trades on Test FX UP.[102]
[101] Ex 489, sheet 'Strategy rules and vision'.
[102] ts 171.
Fifth, Mr Tomasso's conduct on the morning of 17 April 2020 was inconsistent with his explanation as to why he undertook the initial trades during the first window. Mr Tomasso's evidence was that he undertook the transactions in the first window because the price was over 50 and he believed they were 'in the money'. However, on the morning of 17 April 2020, the price of the transactions started 'close to zero or zero'. On his initial explanation, these transactions would be 'out of the money'. Notwithstanding this, Mr Tomasso opened (and when rejected, continued to attempt to open) very significant transactions. Mr Tomasso denied his conduct was illogical. His explanation was that from his recollection of the charts he had seen the night before, there was 'massive volatility' in this market and that he thought he might be able to catch an upswing. He expressed the view that buying something at close to zero with a prospect of it going higher gave massive leverage. In my view, while this may explain the transactions entered into during the second window, it does not explain the transaction in the third window. In respect of this transaction, Mr Tomasso's evidence was that he undertook it because he had a large amount of money in his account and 'the risk was meaningless'. While I accept that compared to the balance then in his account, the purchase of a further one million contracts was relatively insignificant, I do not accept it was meaningless given Mr Tomasso's overall financial position. In cross‑examination, Mr Tomasso expressly denied knowing Test FX UP would move up without question.[103] Given the inconsistencies in the explanations given by Mr Tomasso as to his motivation for the Transactions, as well as the other matters I have already referred to, I do not accept his denial.
[103] ts 150 - 151, 191.
Sixth, at the time of the Transactions, Mr Tomasso knew nothing about Test FX UP. He had never seen the product before and, on his evidence, knew nothing about its price movement. Notwithstanding these matters, Mr Tomasso denied he looked at any charts in detail, considered whether QNZ was a real currency, or observed whether the pricing of the Transactions was changing quickly in only one direction.[104] This evidence, particularly given his background, was not credible. It was also inconsistent with his contemporaneous email sent on 17 April 2020 which stated that he had watched the trading chart of Test FX UP.[105]
[104] ts 172 - 173.
[105] Ex 3; Ex 409.

Seventh, the notional amount of the initial Transactions placed by Mr Tomasso were in the billions of dollars, in a currency he knew nothing about, and exposed him to a relatively significant loss in the tens of thousands of Australian dollars.[106] Mr Tomasso's explanation was that he was not concerned about the notional value of the contracts, but only the 'at risk' amount because of the stop losses in place.[107] Even if I were to accept this evidence (which I do not), the 'at risk' amount was still relatively significant, given Mr Tomasso's overall financial position and his acknowledgement that he would never expose his family to the risk of significant financial loss. In my view, his behaviour was more consistent with Mr Tomasso knowing (or, at the minimum, suspecting) that Test FX UP moved only in one direction and that a profit on the Transactions was a certainty.
[106] Ex G - H.
[107] ts 176 - 179.
Eighth, even though Mr Tomasso placed a stop order on all but one of the Transactions at 0.001 below the buy price,[108] none of the stop orders were triggered. This could only mean that Test FX UP moved in one direction (up) over the three windows. Mr Tomasso's evidence was that he did not realise this at the time.[109] I do not accept this evidence as credible.
[108] The first order was 0.0028 below the buy price.
[109] ts 179 - 180.
Ninth, when it was put to Mr Tomasso that no rational person could think they could make $5.2 million in under 35 minutes, Mr Tomasso agreed he did not think it was possible but thought he 'got lucky'.[110] He did not accept that his conduct was immoral or unethical, or that he should have contacted IG Markets to check the position or alert them.[111] Mr Tomasso also denied that at the time of the Transactions, he believed Test FX UP had been made available by mistake.[112] This was despite his contemporaneous email sent on 17 April 2020 referring in two places to the possibility of the Test FX UP market being made available by 'mistake'.[113] When this email was put to Mr Tomasso, his explanation was that this email was written with the benefit of hindsight, taking account of the fact that the Test FX UP market had been 'taken away' from the Platform and money had been debited from his account.[114] I do not accept this explanation. Mr Tomasso's conduct on 16 and 17 April 2020, as highlighted above, was more consistent with him knowing (or at least suspecting) that Test FX UP had been made available by mistake. This knowledge (or suspicion) was reflected in his contemporaneous email sent approximately four hours after he closed the last of the Transactions on Test FX UP.
[110] ts 193.
[111] ts 194.
[112] ts 196.
[113] Ex 3; Ex 409.
[114] ts 196.
For these reasons, it is my view that Mr Tomasso's evidence was self‑serving, inconsistent, and contradictory. I do not accept his evidence, unless it is supported by contemporaneous documents or matters which have been objectively proved.
Ultimately, however, very little turns on Mr Tomasso's oral evidence. This is because the primary issue raised in these proceedings is whether Term 11 was an unfair contract term within the meaning of s 12BG of the ASIC Act. This is a question of law and turns on the proper construction of the Agreement.

Daniel Rogers

Mr Rogers is based in the London office of the IG Group. He is currently the Service Operations Manager in the Technology Department. At the time of the Transactions, he was service management lead. Mr Rogers was previously employed by IG Australia. His contract of employment included a requirement that he may be required to work for any companies in the IG Group. He has been employed with the IG Group for approximately 15 years.
Mr Rogers gave his evidence remotely from overseas. He was asked a series of questions about the purpose of the Test Markets. In both examination in chief and cross‑examination, Mr Rogers answered the questions asked of him directly and succinctly. To the extent Mr Rogers' evidence is relevant, I accept his evidence in its entirety.

Lucas Bowers

Mr Bowers is currently employed by the IG Group as a Technical Team Lead in the technical analysis team, based in London. He was not employed by IG Markets at the time of the Transactions.[115]
[115] ts 238.
Mr Bowers gave evidence as to the manner in which the Test FX UP trading charts were displayed on both desktop and mobile platforms. These charts were recreated from historical data maintained by IG Markets.
To the extent that Mr Bowers' evidence is relevant, I accept his evidence in its entirety.

Daniel Herriotts

Since 2017, Mr Herriotts has been the Head of Dealing Australia, based in Melbourne. He was first employed by the IG Group in 2001.[116] Mr Herriotts' employment contract is with IG Australia, although it states that he may be required to work for any companies in the IG corporate group.[117]
[116] ts 272.
[117] Ex AF.
Senior counsel for Mr Tomasso accepted that Mr Herriotts' evidence should be accepted.[118] This was, in my view, an appropriate concession as Mr Herriotts answered all questions asked of him directly and succinctly. I accept his evidence in its entirety.

Nathan Huynh

[118] Plaintiff's closing submissions [125].

Mr Huynh is based in Melbourne and was employed by IG Australia to work for any companies in the IG corporate group.[119] At the time of the Transactions, he was working on the dealing desk which managed FX products. In that role, he was responsible for the management and monitoring of all markets to ensure IG Markets' clients remained within the risk limits of these products.[120]
[119] Ex AG.
[120] ts 296.
Senior counsel for Mr Tomasso accepted that Mr Huynh was an honest witness. This was, in my view, an appropriate submission. Mr Huynh was an impressive witness who answered the questions asked of him carefully. I accept his evidence in its entirety.

Kylie Paton

Ms Paton is the Head of Compliance, Australia and New Zealand, based in Melbourne. She has held this role since October 2018. Ms Paton is employed by IG Australia to work for any of the companies in the IG corporate group.[121]
[121] Ex AH. The letter is addressed to Kylie Jackson which is Ms Paton's maiden name (ts 353).
Senior counsel for Mr Tomasso accepted that Ms Paton was an honest witness. I agree with this submission. In cross‑examination, Ms Paton made appropriate concessions, including in response to questions about Term 11. I accept her evidence in its entirety.

Key terms of the Agreement

The Agreement governed all transactions between IG Markets and Mr Tomasso entered into after the date the Agreement came into effect (term 2(1)).[122] As set out in the covering email from IG Markets to Mr Tomasso dated 25 January 2019, the Agreement took effect from 13 February 2019.[123]
[122] Ex 29; Ex 486.
[123] Ex 28.
A 'transaction' was defined in term 32(1) of the Agreement to mean:
[A] future, option, contract for differences, spot or forward contract of any kind in relation to any Instrument (including a security) or any combination of Instruments and means either or both Expiry Transactions or Undated Transactions as the context requires.
The same term defined 'Instrument', 'Expiry Transactions', and 'Undated Transactions'. An 'Instrument' was defined to mean:
[A]ny stock, share, futures contract, forward or option contract, commodity, precious metal, Exchange Rate, interest rate, debt instrument, stock or other index, digital asset (including any virtual currency) or other investment in respect of which [IG Markets] offer to deal in Transactions.
An Expiry Transaction was defined as a transaction with a set contract period, at the end of which the transaction expired automatically. An Undated Transaction was defined as a transaction with an indefinite contract period which did not expire automatically. Put another way, an Undated Transaction did not have a fixed end date and was required to be specifically closed by the client.
Term 1 of the Agreement contained the introductory provisions of the Agreement. At term 1(3) (which is in bold), the Agreement emphasised the importance of reading the Agreement in its entirety and that special attention needed to be paid to the terms in bold 'because they contain important information about [IG Markets'] relationship with [its clients] under [the] Agreement'. Particular attention was then drawn to a series of terms, including those which contained IG Markets' right to void a transaction. These were terms '4(8), 9(3), 10, 11, 15(4), 17, 20(5), 20(6), 21, 23, 24, 25 and 26(7)'.[124]
[124] Agreement, term 1(3)(j).
Term 2 made it clear that the Agreement governed the basis on which any transaction between IG Markets and Mr Tomasso was entered into.[125] It also confirmed IG Markets was acting as principal and market maker, and not as agent for Mr Tomasso.[126]
[125] Agreement, term 2(1).
[126] Agreement, term 2(2).
Term 4 set out the basis on which IG Markets provided a quote to open or close a transaction. For each transaction, a quote included a higher and lower figure, based on the bid and offer prices in the Underlying Market (defined as Commission Transaction) or IG Markets' own bid and offer prices (defined as Spread Transaction).
Term 4(4) set out how a transaction was initiated by a client. This could be done in one of two ways. First, where the client offered to open or close a transaction in respect of an instrument at the level quoted by IG Markets. Second, where the client placed an Order (defined in term 32(1) as a 'Stop Order, Limit Order, Market Order, Points‑through Current Order and/or a Partial Order') in respect of a particular instrument at a level specified by the client in the order. This triggered an order in accordance with its terms.
The time at which a transaction was opened or closed was set out in term 4(6). It provided that a transaction was only opened or closed when the 'offer has been received and accepted by [IG Markets]'. The acceptance of a transaction was evidenced by IG Markets' confirmation of its terms. Even where an offer to open or close a transaction was received and accepted by IG Markets, IG Markets retained the discretion to treat the transaction as void from the outset, to close it at IG Markets' then prevailing price or allow the transaction to remain open if IG Markets became aware that any of the factors in term 4(8) were not satisfied at the time the client made the offer. These factors included the quote not being 'Manifestly Erroneous'. This was defined as having the meaning in Term 11(1).[127]
[127] Agreement, term 4(8)(c).
Under term 4(9) (which is in bold), each transaction opened by a client was valid and binding even if it was opened or closed because of inaccuracy or a mistake, or because the transaction exceeded any credit or other limit of the relevant client.
Term 5 set out how a transaction was opened by a client. A transaction could be opened by 'buying' or 'selling'. A transaction opened by buying was referred to as a 'Buy', alternatively a 'long' or 'long position'. Essentially, this meant the client expected the underlying instrument would increase in value over the time the transaction was open. A transaction opened by selling was referred to as a 'Sell', alternatively a 'short' or 'short position'. In contrast, this meant the client expected the underlying instrument would decrease in value over the time the transaction was open.
Term 5(2) provided that when a 'Buy' was opened, the level at which a transaction was opened (the Opening Level)[128] was the higher of the figures quoted by IG Markets. When a 'Sell' was opened, the Opening Level was the lower of the figures quoted by IG Markets.
[128] Agreement, term 32(1).
Term 6 provided that the Master Netting Agreement (defined by term 32(1) as Schedule A attached to the Agreement) applied to all transactions entered into by Mr Tomasso. The Master Netting Agreement is only relevant to questions raised on the counterclaim and is addressed at [288] - [299] of these reasons.
Term 7 governed the closure of transactions. Subject to the terms of the Agreement, a transaction was able to be closed at any time.[129] Where an 'Undated Transaction' which was a Buy was closed, the level at which the transaction was closed (the Closing Level)[130] was the lower figure quoted by IG Markets for the transaction. Where an 'Undated Transaction' which was a Sell was closed, the Closing Level was the higher of the figures quoted by IG Markets for the transaction.[131]
[129] Agreement, term 7(1), term 7(3).
[130] Agreement, term 32(1).
[131] Agreement, term 7(2).
On the closing of a Buy transaction, where the Closing Level was higher than its Opening Level, IG Markets was required to pay its client the difference between these levels, multiplied by the number of units of the Instrument comprising the transaction (subject to any adjustments that could be made under the Agreement for interest and dividends).[132]
[132] Agreement, term 7(13)(b).
The Agreement allowed a client to place a 'Stop Order' on a transaction.[133] Under term 12, a Stop Order allowed a CFD to be opened or closed when IG Markets' quote for the instrument reached or went beyond the level of the Stop Order'.[134] If a Stop Order was triggered, IG Markets would execute the order. If the Underlying Market 'gapped' (that is, moved through) the Stop Order, the position was closed at the next available level that IG Markets considered was representative, fair, and reasonable.[135]
[133] Agreement, term 32(1).
[134] Ex 567, cl 3.11.
[135] Ex 567, cl 3.11 - 3.12; Agreement, term 12(1)(a), term 12(4).
Subject to the terms of the Agreement relating to set-off,[136] and provided the Account contained a sufficient margin in respect of any open positions,[137] IG Markets was, at Mr Tomasso's request, required to remit to him money standing to the credit of the Account, or, in the absence of a request, at their absolute discretion.[138]
[136] Agreement, term 16(6).
[137] On the opening of a transaction, IG Markets required its clients to lodge a margin with it, which was either a set value or percentage of the value of the underlying transaction (Ex 567, cl 4.1).
[138] Agreement, term 16(5).
The equity or balance of a customer's account fluctuated, depending on the positions held, and was calculated 'in line with market movements'.[139] Where any positions were in a currency other than a client's base currency, the position was 'continually valued at the applicable mid-market spot exchange rate as quoted by us'. A client's statement reflected the value of all positions in their base currency.[140]
[139] Ex 567, cl 4.6.
[140] Ex 567, cl 4.6.
Schedule 1 of the Agreement specified that Mr Tomasso's Base Currency was the Australian dollar.[141] However, pursuant to term 16(3), Mr Tomasso was able to open transactions in currencies other than the Base Currency. Where this occurred, and a transaction was closed, rolled over, or expired, the profits or losses from that transaction were automatically converted to Australian dollars.[142] All conversions were made 'at an exchange rate not more than +/-0.5% of the prevailing market rate at the time of the conversion'.[143]
[141] Agreement, Schedule A, cl 13.1.
[142] Agreement, term 16(3)(d).
[143] Agreement, term 16(3)(g).

Legislative provisions

Division 2 of the ASIC Act concerns unconscionable conduct and consumer protection in relation to the provision of financial services. This division prescribes a 'norm of conduct' and is beneficial consumer protection legislation.[144]
[144] Karpik v Carnival plc [2023] HCA 39 [26], [41] (Gageler CJ, Gordon, Edelman, Gleeson & Jagot JJ).
The protections prescribed by div 2 of the ASIC Act include, relevantly, protections against unfair contract terms. The provisions of the ASIC Act are identical to the provisions which govern unfair contract terms in the Australian Consumer Law (ACL) (being sch 2 to the Competition and Consumer Act 2010 (Cth)). As a result, it is accepted that the authorities on s 24 of the ACL are relevant to the interpretation of s 12BG of the ASIC Act.[145]
[145] Australian Securities and Investments Commission v Bendigo and Adelaide Bank Ltd [2020] FCA 716 [15] - [16].
Pursuant to s 12BF(1) of the ASIC Act, a term of a consumer contract or small business contract is void if:
(a)the term is unfair; and
(b)the contract is a standard form contract; and
(c)the contract is:
(i)a financial product; or
(ii)a contract for the supply, or possible supply, of services that are financial services.
A contract is defined to be a consumer contract if at least one of the parties to the contract is an individual whose acquisition of services under the contract is wholly or predominantly an acquisition for personal use or consumption.[146]
[146] Australian Securities and Investments Commission Act 2001 (Cth) s 12BF(3).
The ASIC Act provides several statutory exceptions to the application of s 12BF, including that the section does not apply to a term of a contract that defines the main subject matter of the contract.[147]
[147] Australian Securities and Investments Commission Act 2001 (Cth) s 12BI(1)(a).
Where a term of a consumer contract is unfair and, as a result, void, the contract will continue to bind the parties if it is capable of operating without the unfair term.[148]
[148] Australian Securities and Investments Commission Act 2001 (Cth) s 12BF(2).
Section 12BG of the ASIC Act defines what is meant by 'unfair' within the meaning of s 12BF and provides that:
(1) A term of a contract referred to in subsection 12BF(1) is unfair if:
(a) it would cause a significant imbalance in the parties' rights and obligations arising under the contract; and
(b) it is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term; and
(c) it would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on.
(2) In determining whether a term of a contract is unfair under subsection (1), a court may take into account such matters as it thinks relevant, but must take into account the following:
(a) the extent to which the term is transparent;
(b) the contract as a whole.
(3) A term is transparent if the term is:
(a) expressed in reasonably plain language; and
(b) legible; and
(c) presented clearly; and
(d) readily available to any party affected by the term.
(4)For the purposes of paragraph (1)(b), a term of a contract is presumed not to be reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term, unless that party proves otherwise.
Mr Tomasso is required to prove that Term 11 would cause a significant imbalance in the parties' rights and obligations under the Agreement, and that Term 11 would cause detriment (whether financial or otherwise) if it were applied or relied on by IG Markets. Pursuant to s 12BG(4), the onus is on IG Markets to prove that Term 11 was reasonably necessary to protect its legitimate interests.
Section 12BH(1) sets out several examples of the kinds of terms that may be unfair within the meaning of s 12BF. Relevantly, these include:
(a)a term that permits, or has the effect of permitting, one party (but not another party) to avoid or limit performance of the contract;
…
(h) a term that permits, or has the effect of permitting, one party unilaterally to determine whether the contract has been breached or to interpret its meaning;
…
(m)a term that imposes, or has the effect of imposing, the evidential burden on one party in proceedings relating to the contract.
The question as to whether a term is unfair is assessed at the date of the agreement by reference to the mandatory matters set out in s 12BG of the ASIC Act.[149] Unfairness is a lower moral and ethical standard than 'unconscionable'.[150]
[149] Karpik v Carnival plc [52].
[150] Paciocco v Australian and New Zealand Banking Group Ltd [2015] FCAFC 50; (2015) 236 FCR 199 [363] (Allsop CJ; Besanko & Middleton JJ agreeing).

Mr Tomasso denied that, on the proper construction of the Agreement as a whole, the construction pleaded by IG Markets was open. In his submission, there was only one contract between the parties - namely, the Agreement, which applied to all transactions (including the Transactions) opened or closed by him.[257]
[257] By reference to term 2(1) of the Agreement, term 6(5), and the Master Netting Agreement.
There was no dispute between the parties that the Agreement governs the Transactions. The issue for determination was whether each of the Transactions was a separate contract governed by the Agreement, or whether there was one contract (namely, the Agreement) which applied to each of the Transactions. This turns on the proper construction of the Agreement, including the Master Netting Agreement.
For the following reasons, it is my view that, on the proper construction of the Agreement, transactions which open and close the same number of units in the same instrument comprise a separate contract. This could be done by a pair of transactions, which open and close the same number of units, or by a series of transactions which, when viewed together, have this effect. Each separate contract was governed by the Agreement.
First, the description of the Agreement is a 'Margin Trading Australian Customer Agreement'. As is apparent from this description, the Agreement governed the financial services of margin trading provided by IG Markets to its clients. It was not an agreement for the provision of a one-off product; the Agreement governed the relationship between the supplier (IG Markets) and the customer (Mr Tomasso) in much the same way that an agreement between a supplier and customer governs a running account between them for the provision of regular items.
Second, this construction is consistent with the definition of 'transaction' and how this term was used in the Agreement. Each component of the definition of transaction (future, option, contract for difference, spot, or forward contract of any kind) was a separate contract which could arise in relation to different instruments. By way of example, the purchase of a futures contract is a completely different type of contract to a binary option FX contract, and each has a different risk profile. The first is an agreement to buy or sell a particular asset (share or commodity) at a predetermined price in the future. The second is a bet as to the particular price one currency (such as the Australian dollar) will be trading as against another currency (such as the United Kingdom pound) at a particular time and date.
Pursuant to the express terms of the Agreement, the Agreement governed 'each' transaction.[258] This supports a construction that 'each' transaction gave rise to separate obligations under the terms of the Agreement. Details and the nature of each transaction were then recorded in the client's overall running account.
[258] Agreement, term 2(1); Master Netting Agreement.
Third, under the Agreement, specific obligations arose on the opening and closing of a transaction. For example, the opening of a transaction gave rise to an immediate obligation by a client to pay to IG Markets any amount due under term 8(2)[259] as well as a margin on the transaction.[260] The closing of a transaction obliged a client to make a payment to IG Markets, or for IG Markets to make a payment to its client.[261] The opening of a sell transaction in relation to particular instruments incurred a 'borrow charge', accounted for in a daily cash adjustment applied by IG Markets to a client's account.[262] This charge applied only to the particular transaction and not the balance of the account. Similarly, interest was payable by a client on any sums due in respect of a particular transaction, as opposed to the balance of its account.[263]
[259] Agreement, term 5, term 8.
[260] Agreement, term 15.
[261] Agreement, term 7.
[262] Agreement, term 10(5).
[263] Agreement, term 16(4).
These provisions of the Agreement clearly distinguish between a transaction and a client's account. A client had only one account with IG Markets, but had the ability to enter into multiple, separate transactions. A client's account included all profits and losses made on each of the transactions entered into by the client. This is made clear by term 15(2), which provided that:
You also have a continuing Margin obligation to us to ensure that at all times during which you have open Transactions you ensure that your account balance, taking into account all realised and/or unrealised profits and losses ('P&L') on your account, is equal to at least the Initial Margin that we require you to have paid to us for all of your open Transactions. If there is any shortfall between your account balance (taking into account P&L) and your total Initial Margin requirement, you will be required to deposit additional funds into your account.
Fourth, this construction is consistent with the manner in which buy and sell orders in relation to the same instrument are treated. Under term 6 of the Agreement, unless the order is a 'Force Open' transaction, a sell order is treated as an offer to close an open transaction entirely; to partly close it; or to close the open transaction and open a new transaction for the excess units. For a transaction to be a 'Force Open' transaction, which is an offer to open a second transaction without altering the existing open transaction, a specific instruction was required.
The primary term which points to the alternative construction urged by Mr Tomasso is cl 1.2 of the Master Netting Agreement, which provides that:
These terms, the particular terms of, and applicable to, each and every [t]ransaction governed by these terms, the Schedules to these terms and all amendments to any of such items shall together constitute a single agreement between the Parties. The Parties acknowledge that all [t]ransactions governed by these terms which are entered into on or after the date of execution of these terms are entered into in reliance upon the fact that all such items constitute a single agreement between the Parties.
However, in my view, on its proper construction, this provision should be read as being consistent with the distinction drawn in the Agreement between transactions and a client account. Term 15(2) made it clear that the client has one account, which was governed by the terms of the Agreement. The account included both the profits and losses made by a client on individual CFDs or transactions, which are set-off or netted against each other. A client was only entitled to seek payment of the net amount of their account, as opposed to the profit of any particular transaction without taking account of any liabilities incurred by them on different transactions.

Was IG Markets under a serious mistake as to a fundamental term of each of Transactions?

In order for a mistake to render each of the Transactions voidable, it must be about a fundamental term of each of the Transactions. It is not sufficient for the mistake to simply concern the surrounding circumstances in which each Transaction was opened or closed.
IG Markets pleaded that the mistake was its belief, when it accepted the offer to open and close each Transaction, that each Transaction was in relation to an 'instrument' as defined in the Agreement,[264] being a 'stock, share, futures, contract, forward of option contract, commodity, precious metal, Exchange Rate, interest rate, debt instrument, stock or other index, digital asset or other investment'.[265]
[264] Agreement, term 32(1).
[265] Defendant's closing submissions [303].
Mr Tomasso denied there was any mistake by IG Markets of this nature. In his submission, this was because, at all times, IG Markets knew how Test FX UP operated (being its creator). IG Markets knew Test FX UP operated by reference to an algorithm and that there was no underlying market or instrument to which it related.[266] In his submission, the substance of the mistake of which IG Markets actually complained (but did not plead) was its mistake in making the Test Markets available for trading by its clients.[267]
[266] Plaintiff's closing submissions [274] - [275].
[267] ts 58 - 59, 107.
I accept this submission. For three primary reasons, I accept and find that IG Markets was not under a serious mistake as to a fundamental term of each of the Transactions in the manner pleaded.
First, it was clear from the evidence of all of the witnesses that the mistake which led to the Transactions was causing the Test Markets to become visible on the Platform and available for trading. This is the submission put by IG Markets in its closing submissions,[268] but is not the mistake pleaded.[269]
[268] Defendant's closing submissions [19].
[269] Defence and counterclaim [38], [40] - [42].
Second, in my view, the mistake pleaded by IG Markets was not supported by the evidence adduced at trial. The evidence of all the witnesses called by IG Markets was that each of them knew that Test FX UP was based on an algorithm, which moved the prices of a fictional currency in a regular and specific manner upwards over a period of 24 hours, before resetting and starting again. None of IG Markets' witnesses believed that Text FX UP was based on a 'stock, share, futures, contract, forward of option contract, commodity, precious metal, Exchange Rate, interest rate, debt instrument, stock or other index, digital asset or other investment', or any other underlying market.
Third, in any event, for the reasons set out at [259] - [275], each of the Transactions was in relation to an Instrument, as defined in the Agreement.[270]

Was Mr Tomasso aware of IG Markets' mistake?

[270] Agreement, term 32(1).

Given the conclusion I have reached, it is not strictly necessary for me to address this question. However, for the sake of completeness, I set out briefly my conclusions on this aspect of IG Markets' counterclaim.
The evidence of the witnesses called by IG Markets focussed on the following aspects of the Transactions which, it was submitted, indicated Test FX UP was not a real market. On the basis of these matters, IG Markets said that Mr Tomasso was aware of IG Markets' mistake.
First, the name of the market, namely Test FX UP, strongly suggested the market was not real, and was a test market. Second, the description of the market (which did not include reference to two different currencies) was inconsistent with any other currency product offered by IG Markets (which normally denoted the currency pair that the market related to).[271] Third, there were a number of differences between what Mr Tomasso would have seen in placing a trade on Test FX UP, as compared to placing a trade on a FX CFD. These differences were:
(a)it was possible to open and close the Transactions on IG Markets' mobile platform, whereas opening and closing a transaction on a FX CFD required a client to access IG Markets' website; and
(b)a FX CFD included two currencies, various times (different expiry times and dates for the binary option), and the buy and sell prices for these different options.
[271] ts 306.
If a FX CFD was opened on IG Markets' website on an iPhone, it was displayed as follows:[272]
[272] Ex 497.

Once an option was selected, the following screen was displayed, which enabled a transaction to be opened:[273]
[273] Ex 498.

Mr Tomasso denied he was aware that Test FX UP was not a real market, that it only moved in one direction, or that he placed his first Transaction on the morning of 17 April 2020 (at 7.07.21 am) because he expected the Test FX UP market to reset to near zero at about this time.
Mr Tomasso accepted that the Transactions in the second and third windows were the largest transactions by orders of magnitude that he had undertaken since opening his Account. This was both by the amount, as well as the size of contracts.[274] Previously, the largest transaction he had opened was for less than $7,000,[275] and for 20,000 contracts.[276]
[274] ts 167 - 169.
[275] Ex 530A.
[276] Ex 530B.
For the following reasons, I reject Mr Tomasso's denial that he did not know Test FX UP was not a real market. I find that, at least from the fourth of the transactions entered into in the first window (at 11.12.43 pm on 16 April 2020), Mr Tomasso knew (or at least strongly suspected) that Test FX UP was not a real market based on any underlying asset or asset class and had observed that it moved linearly in an upwards direction.
First, the description of Test FX UP is unlike the description of any other market available for trading on the Platform. It is apparent from Mr Tomasso's trading history that the names of the market on the Platform were descriptions of the underlying asset or market. For example, at or around the time of the Transactions, Mr Tomasso opened one transaction on the Australia 200 Market, which was described as 'Australia 200 12 pm - 1 pm to be above [5540]'. As is clear from this description, this market concerned a bet by Mr Tomasso as to whether the ASX 200 was going to trade above or below 5540 points at a certain time, namely 12.00 pm - 1.00 pm. On this basis, I accept and find that Mr Tomasso knew (or at least strongly suspected) that Test FX UP was a test market.
Second, Mr Tomasso accepted that on 16 April 2020, he saw that Test FX UP was one of the markets in a market described as 'Test FX'; that the other Text FX markets were 'Test FX Down' and 'Test FX Neutral'; and that he went into both Test FX UP and Test FX Down. In my view, even a relatively cursory review of the trading charts of each of these markets and how the offers were changing would indicate that the behaviour of each market was consistent with its description. One, being Test FX UP, moved up in a linear and uniform manner; the other, being Test FX Down, moved down in a linear and uniform manner.
Third, the pattern of Mr Tomasso's trading during the three windows (between 10.51 pm on 16 April 2020 and 10.41 am on 17 April 2020), in relation to the number of trades that he entered into and the number of contracts comprising each trade, was at odds with his trading history. Mr Tomasso initially opened one contract and closed it approximately nine minutes later. He opened the second transaction (for 80 contracts) less than a minute later and then the third transaction (for 500) a little over a minute later, before closing both. The second transaction was open for less than two minutes, and the third transaction open for approximately nine minutes. From this point in time, Mr Tomasso opened increasing numbers of contracts and left each open for longer. Given this pattern, I find that:
(a)at the time Mr Tomasso opened the first transaction, and possibly the second and third transaction, he suspected that Test FX UP was a test market; and
(b)by no later than the opening of the fourth transaction (at 11.12.43 pm on 16 April 2020), Mr Tomasso knew, or at a minimum strongly suspected, that Test FX UP was a test market which had become available for trading by mistake. From this point, Mr Tomasso's conduct in opening each of the Transactions was done in the belief that he was certain or almost certain to make a profit on each transaction.
Fourth, the speed and manner at which Mr Tomasso opened the Transactions, including the very short period between receipt of a rejection to open a transaction and him opening a new transaction, was consistent with Mr Tomasso knowing that Test FX UP was a test market that had been made available for trading by mistake.
Fifth, the fact that none of the stop orders that Mr Tomasso placed (at only 0.001 below the opening price) were triggered was consistent with Test FX UP only moving in a linear upwards direction.
However, I am not satisfied that Mr Tomasso was aware of the Test FX UP reset at about 7.00 am, or that this was the reason he placed his first transaction on the morning of 17 April 2020. In my view, this conduct was more consistent with this being the time he first accessed the Platform that morning.

Did Mr Tomasso set out to ensure that IG Markets did not become aware of the mistake?

Given the conclusion I have reached that IG Markets have not established that the unilateral mistake pleaded, it is also not necessary for me to consider this matter. However, for the sake of completeness, I will also address this question briefly.
Under the Agreement, Mr Tomasso was not obliged to inform IG Markets that its Test Markets had become available for trading. There is no evidence that Mr Tomasso took any positive action to ensure that IG Markets did not become aware of their mistake; he simply did not draw the matter to their attention. The question is whether his conduct would be sufficient to enable the court to intervene, in the event that IG Markets had established the necessary mistake.
In Errichetti Nominees Pty Ltd v Paterson Group Architects Pty Ltd, Master Newnes (as his Honour then was) expressed the opinion that:[277]
Although the position may not be entirely free from doubt, it seems the better view is that it is sufficient that the other party is aware that the first party is acting under a mistake and simply remains silent. The decision of the New South Wales Court of Appeal in Tutt v Doyle, appears to support the proposition that silence about the mistake is sufficient. (citations omitted)
[277] Errichetti Nominees Pty Ltd v Paterson Group Architects Pty Ltd [2007] WASC 77 [72].
His Honour's discussion of the relevant cases and conclusion was referred to with approval by Kenneth Martin J in Westpork Pty Ltd v Bio-Organics Pty Ltd.[278] In that case, Kenneth Martin J observed that:[279]
A scenario concerning a unilateral mistake of one contracting party recognising another's mistake, yet then 'lying by' to seek to take advantage of a recognised error made by the other party must surely present as a paradigm example of 'shady' conduct ripe to be treated as offensive to the conscience by a court of equity - falling within the scope of a 'fraud' viewed 'in the wide equitable sense' (which extends to catch an unconscionable dealing).
[278] Westpork Pty Ltd v Bio-Organics Pty Ltd [2018] WASC 291.
[279] Westpork Pty Ltd v Bio-Organics Pty Ltd [116].
As set out above, it is my view that, at least by the time he undertook the fourth and subsequent transactions on 16 April 2020 and all of the transactions on 17 April 2020, Mr Tomasso was aware Test FX UP was not a real market and that he was certain, or near certain, to make a profit on any transaction that he opened and closed on Test FX UP. From the name Test FX UP, Mr Tomasso's pattern of trading during the three windows, and the contents of his contemporaneous email sent to IG Markets on 17 April 2020, I infer and find that Mr Tomasso knew, or at a minimum strongly suspected, that Test FX UP had been made available to IG Markets' clients for trading by mistake. He took advantage of this mistake by opening and closing the Transactions on 16 and 17 April 2020 and remaining silent.
Given this, had IG Markets established the unilateral mistake they pleaded, I would have considered it would have been unconscientious for Mr Tomasso to retain the benefit of the legal advantage he obtained from the Transactions, and that the intervention of equity would have warranted setting aside the Transactions in equity.

Should a declaration be made under s 12GND of the ASIC Act?

Pursuant to s 12GND(1) of the ASIC Act, the court has the power to declare that a term of a consumer contract is an unfair term.
In ACCC v Smart, Jackson J discussed the purpose in making such a declaration when the unfair term is already void.[280] His Honour expressed the opinion that the declaration provides an additional level of certainty about the status of the term, which could be important where there are large numbers of consumers affected, as well as giving the contract term a status similar to a contravention of the ASIC Act and allowing compensation and redress orders to be made.
[280] ACCC v Smart [210] - [211].

Mr Tomasso submits that, in this case, a declaration would have utility because it would provide an additional level of certainty about the term, which may assist both IG Markets and its other clients, as well as the development of the law.
In this case, apart from seeking an order under s 12BF(1) of the ASIC Act that Term 11 is void, no other relief sought by Mr Tomasso depends on a declaration being made under s 12GND(1) of the ASIC Act. On this basis, I am not persuaded that there is any potential utility in making a declaration. There is no evidence that large numbers of IG Markets' clients have been affected by Term 11; in fact, the evidence is that the event which gave rise to Mr Tomasso's claim was a one-off event. In my view, the development of the law is sufficiently addressed by the publication of these reasons and the conclusion that Term 11 is an unfair contract term.

Conclusion and orders

For these reasons, it is my view that Mr Tomasso's claim should be allowed. Both Term 11 and the Correction will be declared void pursuant to s 12BF(1) of the ASIC Act. Mr Tomasso is entitled to damages of $5,518,251.44.
I will hear from the parties as to the precise orders that should be made to give effect to these reasons, including as to the date from which interest should be calculated, and the appropriate costs orders.

Annexure A

Part 1

Date & Time (AEST)	Details	Currency	Contracts Buy (+) Sell (-)	Price	Notional Value	Open/Close	Amount Due ($)
17Apr20 00:51:57	DIAAAAEN2HSN4BC Test FX UP Stop (Not guaranteed) 57.1141	QNZ	+1	57.1169	5,711,690.00	OPEN
17Apr20 01:00:55	DIAAAAEN2L85BA6 Test FX UP Stop (Not guaranteed) 57.1141	QNZ	-1	57.6547	5,765,470.00	CLOSE	0.51
17Apr20 01:01:40	DIAAAAEN2M6CPAL Test FX UP Stop (Not guaranteed) 57.6979	QNZ	+80	57.6989	461,591,200.00	OPEN
17Apr20 01:02:55	DIAAAAEN2ML2SAQ Test FX UP Stop (Not guaranteed) 57.7739	QNZ	+500	57.7749	2,888,745,000.00	OPEN
17Apr20 01:03:12	DIAAAAEN2MXTLA3 Test FX UP Stop (Not guaranteed) 57.6979	QNZ	-80	57.7907	462,325,600.00	CLOSE	6.90
17Apr20 01:11:46	DIAAAAEN2QZZGA7 Test FX UP Stop (Not guaranteed) 57.7739	QNZ	-500	58.3047	2,915,235,000.00	CLOSE	249.08

Date & Time (AEST)	Details	Currency	Contracts Buy (+) Sell (-)	Price	Notional Value	Open/Close	Amount Due ($)
17Apr20 01:12:43	DIAAAAEN2R4M2AX Test FX UP Stop (Not guaranteed) 58.3619	QNZ	+650	58.3629	3,793,588,500.00	OPEN
17Apr20 01:32:52	DIAAAAEN2YVGHBC Test FX UP Stop (Not guaranteed) 58.3619	QNZ	-650	59.5707	3,872,095,500.00	CLOSE	737.96
17Apr20 01:33:28	DIAAAAEN2ZMTQAZ Test FX UP Stop (Not guaranteed) 59.6059	QNZ	+900	59.6069	5,364,621,000.00	OPEN
17Apr20 01:48:03	DIAAAAEN24PQCBD Test FX UP Stop (Not guaranteed) 59.6059	QNZ	-900	60.4827	5,443,443,000.00	CLOSE	740.49
17Apr20 01:48:37	DIAAAAEN24Z7MAQ Test FX UP Stop (Not guaranteed) 60.5159	QNZ	+1,100	60.5169	6,656,859,000.00	OPEN
17Apr20 02:00:38	DIAAAAEN27LSQAT Test FX UP Stop (Not guaranteed) 60.5159	QNZ	-1,100	61.2377	6,736,147,000.00	CLOSE	744.48
17Apr20 02:01:26	DIAAAAEN275XAA4 Test FX UP Stop (Not guaranteed) 61.2849	QNZ	+1,300	61.2859	7,967,167,000.00	OPEN

Date & Time (AEST)	Details	Currency	Contracts Buy (+) Sell (-)	Price	Notional Value	Open/Close	Amount Due ($)
17Apr20 02:30:36	DIAAAAEN3F3SFAV Test FX UP Stop (Not guaranteed) 61.2849	QNZ	-1,300	63.0347	8,194,511,000.00	CLOSE	2,136.64
17Apr20 02:31:00	DIAAAAEN3GFESAM Test FX UP Stop (Not guaranteed) 63.0569	QNZ	+2,000	63.0579	12,611,580,000.00	OPEN
17Apr20 02:53:06	DIAAAAEN3NQB4A7 Test FX UP Stop (Not guaranteed) 63.0569	QNZ	-2,000	64.3857	12,877,140,000.00	CLOSE	2,496.04
17Apr20 02:54:05	DIAAAAEN3M924A3 Test FX UP Stop (Not guaranteed) 64.4429	QNZ	+2,500	64.4439	16,110,975,000.00	OPEN
17Apr20 03:03:40	DIAAAAEN3QLVLA4 Test FX UP Stop (Not guaranteed) 64.4429	QNZ	-2,500	65.0197	16,254,925,000.00	CLOSE	1,352.78
Total							8,464.88

Part 2

Date & Time (AEST)	Details	Currency	Contracts Buy (+) Sell (-)	Price	Notional Value	Open/Close	Amount Due ($)
17Apr20 09:07:21	DIAAAAEN5G42SBB Test FX UP Stop (Not guaranteed) 0.4399	QNZ	+50,000	0.4409	2,204,500,000.00	OPEN
17Apr20 09:12:13	DIAAAAEN5HUS7AM Test FX UP Stop (Not guaranteed) 0.7319	QNZ	+150,000	0.7329	10,993,500,000.00	OPEN
17Apr20 09:14:30	DIAAAAEN5HQ7YAQ Test FX UP Stop (Not guaranteed) 0.8689	QNZ	+500,000	0.8699	43,495,000,000.00	OPEN
17Apr20 09:16:49	DIAAAAEN5GVHVAN Test FX UP Stop (Not guaranteed) 1.0079	QNZ	+500,000	1.0089	50,445,000,000.00	OPEN
17Apr20 09:19:30	DIAAAAEN5H236AT Test FX UP Stop (Not guaranteed) 1.1689	QNZ	+1,000,000	1.1699	116,990,000,000.00	OPEN
17Apr20 09:23:08	DIAAAAEN5JJ8SA9 Test FX UP Stop (Not guaranteed) 0.4399	QNZ	-50,000	1.3867	6,933,500,000.00	CLOSE	44,390.28
17Apr20 09:23:47	DIAAAAEN5JB6BAX Test FX UP Stop (Not guaranteed) 1.4259	QNZ	+1,000,000	1.4269	142,690,000,000.00	OPEN

Date & Time (AEST)	Details	Currency	Contracts Buy (+) Sell (-)	Price	Notional Value	Open/Close	Amount Due ($)
17Apr20 09:24:04	DIAAAAEN5J7UEAU Test FX UP Stop (Not guaranteed) 0.7319	QNZ	-150,000	1.4437	21,655,500,000.00	CLOSE	100,107.68
17Apr20 09:26:31	DIAAAAEN5KMKDAL Test FX UP Stop (Not guaranteed) 1.5899	QNZ	+1,000,000	1.5909	159,090,000,000.00	OPEN
17Apr20 09:27:00	DIAAAAEN5KAZ9BC Test FX UP Stop (Not guaranteed) 1.6189	QNZ	+1,000,000	1.6199	161,990,000,000.00	OPEN
17Apr20 09:27:45	DIAAAAEN5J4RAA5 Test FX UP Stop (Not guaranteed) 0.8689	QNZ	-500,000	1.6647	83,235,000,000.00	CLOSE	373,037.05
17Apr20 09:30:44	DIAAAAEN5JYS9A6 Test FX UP Stop (Not guaranteed) 1.0079	QNZ	-500,000	1.8437	92,185,000,000.00	CLOSE	391,702.50
17Apr20 09:33:59	DIAAAAEN5KTZBAK Test FX UP Stop (Not guaranteed) 2.0379	QNZ	+1,000,000	2.0389	203,890,000,000.00	OPEN
17Apr20 09:40:46	DIAAAAEN5LTT2AK Test FX UP Stop (Not guaranteed) 1.1689	QNZ	-1,000,000	2.4457	244,570,000,000.00	CLOSE	1,197,858.91

Date & Time (AEST)	Details	Currency	Contracts Buy (+) Sell (-)	Price	Notional Value	Open/Close	Amount Due ($)
17Apr20 09:41:11	DIAAAAEN5LVSJAJ Test FX UP Stop (Not guaranteed) 1.4259	QNZ	-1,000,000	2.4707	247,070,000,000.00	CLOSE	979,840.94
17Apr20 09:41:29	DIAAAAEN5LKFBBB Test FX UP Stop (Not guaranteed) 1.5899	QNZ	-1,000,000	2.4897	248,970,000,000.00	CLOSE	843,691.14
17Apr20 09:41:50	DIAAAAEN5K9VQAR Test FX UP Stop (Not guaranteed) 1.6189	QNZ	-1,000,000	2.5097	250,970,000,000.00	CLOSE	835,397.64
17Apr20 09:42:10	DIAAAAEN5K6ZAA9 Test FX UP Stop (Not guaranteed) 2.0379	QNZ	-1,000,000	2.5297	252,970,000,000.00	CLOSE	460,769.93
17Apr20 12:36:29	DIAAAAEN57LQZAH Test FX UP Stop (Not guaranteed) 12.9879	QNZ	+1,000,000	12.9889	1,298,890,000,000.00	OPEN
17Apr20 12:41:46	DIAAAAEN58DKKBC Test FX UP Stop (Not guaranteed) 12.9879	QNZ	-1,000,000	13.3057	1,330,570,000,000.00	CLOSE	297,707.71
17Apr20 12:45:04	DIAAAAEN57STCAY Australia 200 12pm-1pm to be above [5540]	A$	+15.69	93.8	N/A	OPEN

Date & Time (AEST)

Details

Currency

Contracts Buy (+) Sell (-)

Price

Notional Value

Open/Close

Amount Due ($)

17Apr20

13:01:33

DIAAAAEN59WL9BA

Australia 200 12pm-1pm to be above [5540]

-15.69

N/A

-14,717.22

Total

5,509,786.56

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
KS
Associate to the Honourable Justice Hill
21 AUGUST 2025