Venture Industries & Ors v Ausn Competition Com

[1998] HCATrans 427

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S29 of 1998

B e t w e e n –

VENTURE INDUSTRIES PTY LIMITED, HARRY KIOUSSIS and PENELOPE KIOUSSIS

Applicants

and

THE AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Respondent

Application for special leave to appeal

GAUDRON J
McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 20 NOVEMBER 1998, AT 9.44 AM

Copyright in the High Court of Australia

MR M. WALTON, SC:   May it please the Court, I appear for the applicants.  (instructed by Sally Nash & Co)

MR D.F. JACKSON, QC:   If the Court please, I appear with my learned friend, MR I.D. FAULKNER, for the respondent.  (instructed by the Australian Government Solicitor)

GAUDRON J:   Thank you, Mr Jackson.

MR WALTON:   As your Honours will readily appreciate, the context in which this application was made has changed somewhat substantially as a result of the decision of this Court last week in Marks v GIO. 

Apart from what is in our written submissions, there is only one submission that I want to address to the Court orally, and that is this:  we submit that the issue in this case has not been resolved by the decision in Marks.  Rather that the, perhaps, difference of approach of the Justices in that case, as illustrated from the approach taken by the three Justices in the joint judgment, and your Honour Justice Gaudron.

GAUDRON J:   But then that really comes down to an application of the relevant law to the circumstances of the case, does it not?

MR WALTON:   To some extent what your Honour says must be right, but what we say in answer to that is that there was a difference of approach from the joint judgment to the other three Justices in that case, and this case throws up the, perhaps if I can call it the difficulty that that poses as a matter of application of section 87, generally speaking, when one is looking at the question of damages and the difficulty that is illustrated by the finding that his Honour Mr Justice Hunter made in the Supreme Court, that what the parties were entitled to in this case were not only all of the costs that they had incurred, all of the expenditure that they had incurred in making payments to the respondents, and also in retaining solicitors and experts and the like, and not only the costs of demolition and rectification, but also the costs of rebuilding.

We submit that that reasoning runs entirely counter to the rejection in the judgment of Justices McHugh, Hayne and Callinan in Marks, that the bare fact that a contract has been made which confers rights which are different to those represented does not, in itself, give rise to any loss.

GAUDRON J:   No, it is a question of what was the damage in the circumstances.

MR WALTON:   Yes.

GAUDRON J:   There is no difference between the members of the Court on that issue in Marks v GIO.

MR WALTON:   No.  What your Honour Justice Gaudron said in Marks about this particular case, the decision in the Court of Appeal, was that this case was an illustration of a case where the plaintiffs had been able to establish that they would have entered into a contract that would have returned the very benefit that was represented and, in that respect, that it was consistent with what this Court said in Gates – that it is for the applicant to establish that he could and would have entered into another contract.

In our respectful submission, that is not an accurate categorisation of what his Honour found in this case.  What his Honour had found in this case ‑ and this appears at page ‑ ‑ ‑

GAUDRON J:   They would have entered into a contract - I think that is right – within the limits of their financial commitments.

MR WALTON:   Within the limits of their financial commitments.

GAUDRON J:   Yes, but having done it, and then having to have it demolished, what were they to do then?  I mean, that is the difficulty of your position, is it not?  The house has had to be demolished or extensive work done, but in circumstances, presumably, where the permission was to build that particular house, they had embarked upon a course in consequence of the representation, had they not, from which, at the end of the day, there could be no turning back other than to become homeless.

MR WALTON:   The difficulty with the argument, with respect, is this:  that his Honour found that the contract price in this case was, to use his word, “illusory” in that it was unreasonably low.  That is to say, within their budgetary constraints, the owners could not have found another contract to construct these works for this price.

GAUDRON J:   No, but once they found one who said they would, and then embarked upon the course of doing it, what else could they do?

MR WALTON:   We respectfully submit that there are losses which were legitimately and properly awarded to the owners.  They include reimbursement of all the costs they have paid as a consequence of the representations that were made to them.  They include the cost of demolition and rectification.  They include everything that would be necessary to put them back into the position that they were in before they acted upon the misleading representations that were made.

But, it is another matter entirely, we submit, to award on top of those damages, an amount to enable the contract, in effect, to be fulfilled, the contract which was entered into for a price which his Honour described as “illusory”.  And without wanting to resort to the terminology of reliance and expectation damages which was rejected by this Court substantially in Marks, what we submit his Honour was doing was doing more than putting the applicants back into the position that they were in.  He was, in effect, elevating the representations into contractual warranties, and he was, in effect, in our submission ‑ ‑ ‑

McHUGH J:   That only makes it a fact case.  In fact, one possible benefit of Marks, hopefully, will be that these cases will simply become factual issues.

MR WALTON:   Your Honour, there is no retreating from the fact that there is much force in what your Honour says, and of course this application was made before Marks.

McHUGH J:   Yes,

MR WALTON:   All that we can really say in answer to your Honour’s observation is that Marks was a decision of six Justices of this Court, in which three Justices, including your Honour, wrote a judgment, and there were three separate judgments which expressed views that were, we would submit, on this point, a little different.  Those differences are highlighted in paragraph 18 of your Honour Justice Gaudron’s judgment, where the opinions of the Court diverged.  We respectfully submit that this case throws up the matter on which that divergence occurred.  In other words, in the joint judgment there was a finding that it was upon the appellants in that case to establish that they were worse off as a result of entering into contracts.

McHUGH J:   I know, but it is only a question of fact.  Three of us took the view that they were not.  Justice Gummow and Justice Gaudron took the view that they would have been worse off but for the GIO allowing them to refinance without penalty; and Justice Kirby took a view that they were worse off in any event.

MR WALTON:   Your Honour, we would submit that if the judgment of the three Judges in Marks were the judgment of the Court, we would submit his Honour Mr Justice Hunter was wrong in the approach that he took.  But, if the other judgments that were given in Marks were to represent the law, that it may be that what his Honour did was not.

McHUGH J:   It is not a question of law.  It is applying the text of the section to a particular factual situation.  It is an authority for nothing on that issue.  If the identical factual situation came in, the trial judge would be perfectly entitled to say, “Well, I respect what the High Court said, but in my view, as a matter of fact, I am going to come to the opposite conclusion”.  Now, he might be reversed, but he certainly would not be making any error of law.

MR WALTON:   It was said in the application before this that the construction of section 80 of the Trade Practices Act is obviously an important public issue, and clearly enough, the construction of section ‑ ‑ ‑

GAUDRON J:   The validity of it.  It is not difficult to construe the words “any person”, although there was a time when such words were thought not to include women.  That apart, there has never been any difficulty.

MR WALTON:   We would submit that the construction of section 87 is also an important public issue.  We appreciate the difficulty that this application faces in the light of the fact that this Court has considered section 87 as recently as last week, but we submit that there is an issue thrown up by this case which is not entirely answered by the judgments in Marks, and we submit it is desirable that there is clarity about this particular issue in the application – not only of section 87, but also section 82.  Your Honours, otherwise we rely on the written material, whilst acknowledging that, obviously enough, that all has to be read in context of the decision of this Court in Marks.

GAUDRON J:   Thank you, Mr Walton.  We need not trouble you, Mr Jackson.

This case, which turns very much on its own facts, is, in our view, not a suitable vehicle for the elucidation of any point of general principle.  Accordingly, special leave is refused.

MR JACKSON:   I seek an order for costs, your Honours.

GAUDRON J:   What do you say to that, Mr Walton.

MR WALTON:   I have nothing to say.

GAUDRON J:   It is refused with costs.

The Court will adjourn briefly to reconstitute.

AT 9.56 AM THE MATTER WAS CONCLUDED