Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494: Analysis and Impact of Trade Practices Act

This article provides an analysis of the case Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494 and its impact on the Trade Practices Act. It discusses the interpretation of section 4K, the concept of injury, and the application of unfair terms in contracts. The article also explores the practical impact of the Australian Consumer Law (ACL) and any reforms that have been made to the ACL. Overall, it provides a comprehensive understanding of the case and its implications.

QUESTION
In Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494, the High Court referred to the
Trade Practices Act 1974 (Cth) as ‘a fundamental piece of remedial and protective legislation
which gives effect to matters of high public policy’, adding that, ‘it is to be construed so as to
give the fullest relief which the fair meaning of its language will allow’.
Introduction: In Marks v GIO Australia Holdings Ltd. there was a claim related with the loss of
expectation damages that were the result of the preaching of former section 52. A rare effect of
this case was that it had the decision by six judges of the High Court. In this case, the operation
of section 4K was considered by the court while integrating a claim for loss of damages that was
made under sections 82 and 87, Trade Practices Act. Right judgment, McHugh, Hayne and
Callinan JJ left open a wide interpretation of the term injury as it has been used in section 4K.
according to the judges, the "loss or damage that has been mentioned by sections 82 and 87 of
the TPA is not restricted to economic loss.1 Therefore, it has been clearly mentioned by section
4K. . In this regard, it was stated in the judgment that there is no limitation imposed by section
82 regarding the kind of loss or damage that can be recovered. Similarly, this provision does not
contain any express indication regarding the fact that certain types of loss or damage, have to be
considered as being too remote for being recoverable.2 Indeed, section 4K can be considered as
expanding the types of loss or damages that are suggested by section 82 and other provisions of
the Act.
1 Alexander v Cambridge Credit Corporation Ltd (1987) 9 NSWLR 310
2 Braithwaite, John and Susan Vale, "Law Enforcement By Australian Consumer Affairs Agencies" (1985) 18(3)
Australian & New Zealand Journal of Criminology

Unfair Terms in Contracts: In this case, the judges restricted its application when they rejected
the claim for loss of expectation damages made by the plaintiff. In this regard, they stated that "it
can be that the injury mentioned in section 4K is intended to refer to the injury caused to a
person, but the code is not required to decide if it is so.3 Even if the term injury has been
provided a wider meaning as compressive personal-injury, it is not accepted by the court that an
injury suffered by merely because the hoped-for advantage has not taken place."
While doing so, the court considered the purpose of the Act with a view to interpret the section.
In this regard, it was stated that "while arriving at our conclusion, the court was mindful that the
object of this Act can be described as to "enhance the welfare of the people of Australia by
promoting competition and fair trading and providing for consumer protection". Therefore, a
narrow construction of the provisions of the Act did not be adopted. However, similarly, the
words used in the Act should not be stretched beyond their limits".4
Under the circumstances these three justices claimed that 'loss or damage' strictly to economic
loss only. Once it has been implied that injury has taken place under section 4K, it may mean
something more than personal-injury. However, by implication, these three justices said that it
includes personal-injury and economic loss. On the other hand, the other three justices went a
step ahead. Therefore Gummow J was ready to allow a wider interpretation of the term injury as
used in section 4K on the basis of the analysis of common law usage of this term. Therefore he
said that it has been suggested in the arguments that s 4K was elected with the inclusion of
damages concerning personal injury. Consider that there is nothing in the text of this section to
3 Clarke, Professor Philip and Sharon Erbacher, Australian Consumer Law (Thomson Reuters (Professional)
Australia Pty Limited, 2018
4 Weatherall, Kimberlee, "The Consumer As The Empirical Measure Of Trade Mark Law" (2017) 80(1) The
Modern Law Review

indicate that the term injury is so confined. This section performs a different function in
disentangling different elements that are compounded in concise language of section 82.
Therefore the term injury has been used in section 4K as an 'actionable wrong'. In this regard, it
needs to be noted that section 82 is now section 236 of the Australian Consumer Law (ACL).
Parliament’s reasons for enacting the ACL: The Australian Consumer Law (ACL) is a major
part of deregulatory reforms that have been introduced by the Council of Australian
Governments (COAG) for the purpose of delivering seamless national economy. There are a
number of provisions, spread across at least from the consumer laws of the Commonwealth and
States and Territories that have been replaced by the ACL. The introduction of ACL can be
described as the culmination of the process of cooperation.5 That was going on between the
Commonwealth Government and the governments of states and territories through ministerial
Council on Consumer Affairs. Now, this body is known as the Legislative and Governance
Forum on Consumer Affairs (CAF). These were their allies on the conclusions made by the
Productivity Commission's 2008 off Australia's Consumer Policy Framework, the best practices
in current state and territory legislations and the consultations that took place between 2009 and
10. Under the aegis of national partnership agreement to deliver Seamless National Economy, it
was agreed upon by the Commonwealth as well as the state and territory governments for
completing the legislative process to implement the ACL by the December 2010, and the
legislation was going to commence in all jurisdictions of Australia on first January, 2011.
The ACL had been implemented by the enactment of the Trade Practices Amendment
(Australian Consumer Law) Act, 2010. The full text of ACL can be found in schedule 2,
Competition and Consumer Act, 2010.
5 Compliance With The Trade Practices Act, 1974 (Law Reform Commission, 1994)

Practical impact of the ACL: The critical success of ACL is based on the consumers and
traders who are not only aware of the law, but are also able to apply it so that wherever it is
required, they can resolve their disputes at an early stage.6 In case of more complex disputes the
parties may have to take recourse to dispute resolution part ways and the civil justice system for
enforcing the rights and to get the appropriate remedies.7
The Australian Consumer Law came into force on force on 1st January, 2011. This legislation
has been enacted as the single national consumer protection legislation. At the same time, ACL
replaces the Trade Practices Act and it particularly sets out the rights of the consumers that have
to be fulfilled by the suppliers and manufacturers. Under the ACL, these rights have been called
as consumer guarantees. This legislation provides that the businesses cannot avoid their
responsibility to fulfill the consumer guarantees irrespective of the fact if the business is being
operated online or not. As a result, it is very significant for the businesses, small or large; to be
aware of the requirements that have been prescribed for the businesses by the ACL and what can
be done by the businesses and consumers, in case the goods or services failed to meet the
consumer guarantees.8
Any reforms that have been, or should be, made to the ACL: Therefore it can be stated that
the Australian Consumer Law requires that the businesses should a guarantees in case of most of
the goods and services sold by them. In this context, consumer guarantees can be described as
the set of rules that are applicable in case of goods and services purchased by the consumers
6 Koufos v C Czarnikow Ltd [1969] 1 AC 350, 385
7 Harris, Bede, "Economic Cost Provisions In Fixed-Rate Home Loan Contracts And Breaches Of Australian
Consumer Law" (2013) 6(3) Journal of Politics and Law
8 Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528

under the ACL.9 The rules provided by the ACL set out the circumstances where a business is
under an obligation to provide a remedy to the consumer. The consumer guarantees are
applicable automatically, irrespective of any voluntary or extended warranty. That may be given
by a seller or manufacture or if the warranty has been expired. The definition of consumer can
also be found in the provisions of the ACL.10
The ACL also provide for the situation in case these guarantees are not fulfilled by the
businesses. Therefore, it hasn't provided that if any product has been sold to a customer. That
does not meet one or more off the consumer guarantees written in the ACL, such customer is
entitled to a remedy, which may be repair, refund, replacement and compensation for any
consequential loss.11 Generally, in cases of a minor problem, the seller may decide if the problem
is going to be remedied by repair or if it takes too long, the consumer may ask some other person
to fix the problem and ask the seller to pay reasonable costs. At the same time the consumer has
the option to reject the goods replacement or refund. On the other hand, in case of a major
problem which cannot be fixed, it is open to the consumer to reject the goods and obtain full
refund or get the goods replaced or to retain the goods ask for compensation for the reduction in
the value of such goods.
Any reforms that have been, or should be, made to the ACL: the Treasury Laws Amendment
(Australian Consumer Law Review) Act 2018 (Cth) was passed by the Commonwealth
Parliament. The intention and the introduction of this Act is to "strengthen and clarify" the
current level of consumer protections that are related with issues like consumer guarantees, false
9 Austral Pacific Group Ltd (in liq) v Airservices Australia (2000) 203 CLR 136
10 Nottage, Luke, "The New Australian Consumer Law: What About Consumer ADR?" (2010) 9(2) QUT Law
Review
11 Smythe v Thomas (2007) 71 NSWLR 537

billing, pricing, product safety, unfair contract terms and unconscionable conduct. The majority
of these amendments take effect at the time of the commencement of the Act.12
This act has amended the Australian Consumer Law. As is the case with the reforms introduced
recently to maximize penalties under the ACL, this Bill was the product of the proposals that
were made by ACL Review Final Report.13
The purpose behind the introduction of these new legislations is to "improve the effectiveness
and efficiency of consumer protection regime in Australia". These amendments can be briefly
described as follows:
The Act has widened the regulatory powers by extending the investigative powers for evaluating
potentially unfair contract terms. As a result, the ACCC will be in a position to use its
compulsory notice powers for investigating the terms of a consumer contract, with a view to
decide if a declaration needs to be sought that a particular term is unfair. It also needs to be noted
that ACCC can also issue a notice under section 155 of CCA for investigating the unfair contract
terms.14
These amendments are also strengthened the powers related with gathering information
concerning product safety. As a result, the ACCC read in a position to get information regarding
12 Parker, Christine, "Restorative Justice In Business Regulation? The Australian Competition And Consumer
Commission's Use Of Enforceable Undertakings" (2004) 67(2) Modern Law Review
13 The New Australian Consumer Law (The University of New South Wales, Centre for Continuing Education,
2011)
14 Paterson, Jeannie, "Introducing The New, National Australian Consumer Law" (2011) 36(1) Alternative Law
Journal

product safety from any person who may have the relevant information. Earlier the ACCC was
allowed to get information only from the supplier.15
Improved protections: These amendments have also resulted in censoring the protections that
are available under the ACL.
For this purpose, it has extended the unconscionable conduct protection to all the companies.
Therefore the unconscionable conduct protections provided by the ACL will be available to all
the listed public companies.16
Another step is to ensure that all options are included in single price unless de-selected.
According to the present law, an option charge was not always required to be included in the
single price. Our disposition has been amended by the Bill had any additional fees or charges
payable at the option of the consumer have to be included in the single price, unless the
consumer has de-selected them. The intention behind the introduction of the change is to
increase price transparency, especially in case of online shopping. Another step is to extend the
application of unsolicited service provisions. Therefore the ACL definition of 'unsolicited
services' has been amended by the Bill and therefore the provisions have been allowed to apply
to a showing of the bills for services not provided.17
Conclusion: In the end, it can be stated that well informed and confident consumers play an
important role in an efficient economy. Therefore ACL provides the rights and remedies to
individual consumers that they deserve. At the same time, this legislation also ensures that the
markets for goods and services remain sustainable and efficient, resulting in benefits for all the
15 Rasell v Cavalier Marketing (Australia) Pty Ltd [1991] 2 Qd R 323
16 Review Of Australia's Consumer Policy Framework (Productivity Commission, 2008)
17 Medtel Pty Ltd v Courtney (2003) 130 FCR 182

people of Australia. It also needs to be noted that by introducing a generic consumer law, it has
proved to be beneficial for the consumers and traders. It also ensures that the law itself is fit for
purpose. In this regard, particularly the enactment of ACL hasn't been empowering consumers
and at the same time it has lowered the incidence of consumer problems and another benefit of
this legislation is to ease the regulatory burden that has been placed on the traders.18
18 Santucci, Philip, "Substantive Fairness In Australian Standard Form Consumer Contracts: Lessons From The UK
Experience" (2011) 11(2) Oxford University Commonwealth Law Journal

Bibliography
Braithwaite, John and Susan Vale, "Law Enforcement By Australian Consumer Affairs
Agencies" (1985) 18(3) Australian & New Zealand Journal of Criminology
Clarke, Professor Philip and Sharon Erbacher, Australian Consumer Law (Thomson Reuters
(Professional) Australia Pty Limited, 2018)
Compliance With The Trade Practices Act, 1974 (Law Reform Commission, 1994)
Harris, Bede, "Economic Cost Provisions In Fixed-Rate Home Loan Contracts And Breaches Of
Australian Consumer Law" (2013) 6(3) Journal of Politics and Law
Nottage, Luke, "The New Australian Consumer Law: What About Consumer ADR?" (2010) 9(2)
QUT Law Review
Parker, Christine, "Restorative Justice In Business Regulation? The Australian Competition And
Consumer Commission's Use Of Enforceable Undertakings" (2004) 67(2) Modern Law Review
Paterson, Jeannie, "Introducing The New, National Australian Consumer Law" (2011) 36(1)
Alternative Law Journal
Review Of Australia's Consumer Policy Framework (Productivity Commission, 2008)
Santucci, Philip, "Substantive Fairness In Australian Standard Form Consumer Contracts:
Lessons From The UK Experience" (2011) 11(2) Oxford University Commonwealth Law Journal

The New Australian Consumer Law (The University of New South Wales, Centre for Continuing
Education, 2011)
Weatherall, Kimberlee, "The Consumer As The Empirical Measure Of Trade Mark Law" (2017)
80(1) The Modern Law Review
Case Law
Alexander v Cambridge Credit Corporation Ltd (1987) 9 NSWLR 310
Austral Pacific Group Ltd (in liq) v Airservices Australia (2000) 203 CLR 136
Koufos v C Czarnikow Ltd [1969] 1 AC 350, 385
Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494
Medtel Pty Ltd v Courtney (2003) 130 FCR 182
Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388
Rasell v Cavalier Marketing (Australia) Pty Ltd [1991] 2 Qd R 323
Smythe v Thomas (2007) 71 NSWLR 537
Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528