MONTAHA RAMADAN (BY LITIGATION GUARDIAN SCOTT WILLIAM JELBERT) [2023] SASCA 91

On Appeal from SUPREME COURT OF SOUTH AUSTRALIA (HIS HONOUR JUDGE DART) SCCIV- 13-1185 Appellant: MONTAHA RAMADAN (BY LITIGATION GUARDIAN SCOTT WILLIAM JELBERT) Counsel: MR WJN WELLS KC WITH MR R SALLIS - Solicitor: RSA LAW First Respondent: ACN 098 408 176 PTY LTD No Attendance Second Respondent: SIGITA VENTRICE (AS ADMINISTRATOR OF THE ESTATE OF VINCENT VENTRICE) Counsel: MR MCJ HOFFMANN KC WITH MR A BAILLIE - Solicitor: BEDE ELLIOTT Hearing Date/s: 10/02/2022 File No/s: CIV-21-005479 A SUPREME COURT OF SOUTH AUSTRALIA (Court of Appeal: Civil) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment. The onus remains on any person using material in the judgment to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court in which it was generated. RAMADAN v ACN 098 408 176 PTY LTD & ANOR [2023] SASCA 91 Judgment of the Court of Appeal (The Honourable President Livesey, the Honourable Justice Doyle and the Honourable Justice Bleby) 31 August 2023 APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - EXCESSIVE OR INADEQUATE DAMAGES - GENERAL PRINCIPLES APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - POINTS AND OBJECTIONS NOT TAKEN BELOW EQUITY - GENERAL PRINCIPLES - EQUITABLE DOCTRINES AND PRESUMPTIONS - ELECTION This is an appeal against an award of damages of $122,502, in addition to interest and costs for losses sustained by the appellant as a result of the unconscionable conduct of the respondents. The appellant contended that the award was too low. By cross-appeal the second respondent (for the respondents) contended that the appellant was not entitled to any damages because she suffered no loss. The appellant commenced proceedings in equity and under the ASIC Act, alleging the respondents had engaged in unconscionable conduct in connection procuring her entry into a loan with her husband in 2007 for $300,000 (the 2007 Loan). The appellant was illiterate in all languages and could not understand English. The loan was secured by a mortgage against the appellant’s family home held jointly with her husband. The rate of interest under the 2007 Loan was at least 60 per cent per annum. The appellant received no benefit from the 2007 Loan. The entirety of the monies advanced were used by the appellant’s husband in pursuing a business opportunity. In 2008 the 2007 Loan was refinanced at a more favourable interest rate with a different lender (the 2008 Loan). The 2008 Loan was also secured by a mortgage over the family home. In early 2009 -- 1 of 48 -- the appellant’s husband left Australia and never returned. He ceased making repayments under the 2008 Loan. Between 2009 and September 2016, the appellant (and her grandson on her behalf) made payments totalling $245,004 against the 2008 Loan. In September 2016 the appellant and her husband sold the family home to their grandson in consideration for the grandson discharging the outstanding amount due under the 2008 Loan (approximately $314,000). The grandson and his family resided with the appellant in the family home rent free before the transfer and the appellant continued to reside in the family home rent free after the transfer. The appellant’s husband died in 2017. The appellant succeeded in her claims against both respondents in both equity and under the s 12CB of the ASIC Act, Ramadan v ACN 098 408 176 Pty Ltd (2018) 129 SASR 584. The trial judge proceeded to assess damages under s 12GF of the ASIC Act. The appellant was awarded $122,502 being half the $245,004 in repayments she had made on the basis that she unreasonably failed to seek equitable contribution from her husband, who was jointly liable under the 2008 Loan and the 2007 Loan. The trial judge determined that the appellant sustained no loss of her claimed survivorship interest in the family home on the basis that the transfer of the property from the appellant to her grandson was not undertaken at arm’s-length and she continued to reside in it rent free following the sale. The Court held (allowing the appeal on ground 1, and subject to hearing from the parties, dismissing the appeal on ground 2): 1. The appellant was entitled to the full amount of the $245,004 in repayments she made under the 2008 Loan. It was not incumbent on the appellant to seek contribution from her husband. 2. The respondents’ unconscionable conduct was a cause of the appellant entering into the 2008 Loan and her needs to sell the family home, but it was not a cause of the appellant selling for less than the market value. 3. In circumstances where the family home and the proceeds of sale were held jointly by the appellant and her husband, the parties must be heard on whether there is any scope for the appellant to make an alternative claim for the loss of her joint interest in the proceeds of sale which were used to repay the 2008 Loan in 2016. (granting an extension of time to cross-appeal but dismissing the cross-appeal): 4. The grounds of cross-appeal raised issues that were not raised on the pleadings or argued before the trial judge and it was not open to address these issues for the first time on appeal. 5. The doctrine of election by affirmation does not operate because the appellant's entry into the 2008 Loan did not relevantly involve a choice between two inconsistent rights. Her entry into the 2008 Loan was not inconsistent with her seeking damages for the loss she suffered by reason of her entry into the 2007 Loan. 6. The payments made by the appellant under the 2008 Loan were a loss caused by the respondents’ unconscionable conduct because the appellant’s entry into the 2008 Loan refinanced and effectively mitigated her liability under the 2007 Loan, which had been procured by the respondents’ unconscionable conduct. Australian Securities and Investments Commission Act 2001 (Cth) ss 12CB, 12GF; Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA) ss 3, 6, referred to. ABN AMRO Bank NV v Bathurst Regional Council (2014) 309 ALR 445; Allianz Australia Insurance Ltd v Delor Vue Apartments CTS 39788 (2022) 97 ALJR 1; Allianz Australia Insurance Ltd v GSF Australia Pty Ltd (2005) 221 CLR 568; Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300; Bank of South Australia Limited v Ferguson (1998) 192 CLR 248; Banque Commerciale SA, En Liquidation v Akhil Holdings Limited (1990) 169 CLR 279; Bebonis v Angelis (2003) 56 NSWLR 127; Bennett -- 2 of 48 -- v Minister of Community Welfare (1992) 176 CLR 408; Comcare v Martin (2016) 258 CLR 467; Commonwealth Bank v Amadio (1983) 151 CLR 447; Coulton v Holcombe (1986) 162 CLR 1; Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd (2007) 244 ALR 552; De Pasquale v ASCF Managed Investments Pty Ltd [2021] SASC 21; Elkofairi v Permanent Trustee Co Ltd (2002) 11 BPR 20,841; Finucane v New South Wales Egg Corporation (1988) 80 ALR 486; Fitzgerald v Penn (1954) 91 CLR 268; Forrest v ASIC (2012) 247 CLR 486; Friend v Brooker (2009) 239 CLR 129; Garcia v National Australia Bank Ltd (1998) 194 CLR 395; Gould v Mount Oxide Mines Ltd (In liq) (1916) 22 CLR 490; Hall v The Nominal Defendant (1966) 117 CLR 423; Harlow & Jones v Panex International [1967] 2 Lloyd’s Reports 509; Harrison v Schipp [2001] NSWCA 13; Henjo Investments v Collins Marrickville (No 2) (1989) 40 FCR 76; Henville v Walker (2001) 206 CLR 459; Hunt & Hunt v Mitchell Morgan Pty Ltd (2013) 247 CLR 613; I & L Securities Pty Limited v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109; In re Pavlou [1993] 1 WLR 1046; Khoury v Government Insurance Office of New South Wales (1984) 165 CLR 622; Legal Services Board v Gillespie-Jones (2013) 249 CLR 493; Maestrale v Aspite (2014) 13 ASTLR 262; March v Stramare (E and MH) Pty Ltd (1991) 171 CLR 506; Medlin v State Government Insurance Commission (1995) 182 CLR 1; Mister Figgins Pty Ltd v Centrepoint Freeholds Pty Ltd (1981) 36 ALR 23; Montesa Investments Pty Ltd v Certane Ct Pty Ltd [2022] SASC 43; Munchies Management Pty Ltd v Belperio (1988) 58 FCR 274; Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388; Prince Alfred College Inc v ADC (2016) 258 CLR 134; Protec Pacific Pty Ltd v Steuler Services GmbH & Co KG [2014] VSCA 338; Ramadan v ACN 098 408 176 Pty Ltd (2018) 129 SASR 584; Ramadan v ACN 098 408 176 Pty Ltd (Supreme Court of South Australia, Judge Dart, 10 December 2020); Ramadan v ACN 098 408 176 Pty Ltd (Supreme Court of South Australia, Judge Dart, 11 May 2021); Ramadan v ACN 098 408 176 Pty Ltd [2017] SASC 63; Sargent v ASL Developments Ltd (1974) 131 CLR 634; Segenhoe Ltd v Akins (1990) 29 NSWLR 569; Selig v Wealthsure Pty Ltd (2015) 255 CLR 661; Singh v Kaur Bal (No 2) [2014] WASCA 88; Steamship Enterprises of Panama Inc, Liverpool (Owners) v Ousel (Owners) & Ors (The Liverpool (No 2)) [1963] P 64; Stone v Chappel (2017) 128 SASR 165; Stubbings v Jams 2 Pty Ltd (2022) 399 ALR 409; Suttor v Gundowda Pty Ltd (1950) 81 CLR 418; The National Insurance Company of New Zealand Limited v Espagne (1961) 105 CLR 569; Travel Compensation Fund v Tambree (2005) 224 CLR 627; Wardley Australia Ltd v Western Australia (1992) 175 CLR 514; Water Board v Moustakas (1988) 180 CLR 491; Whisprun Pty Ltd v Dixon (2003) 77 ALJR 1598; Wollington v State Electricity Commission of Victoria (No 2) [1980] VR 91; Wright v Gibbons (1949) 78 CLR 313, considered. -- 3 of 48 -- -- 4 of 48 -- RAMADAN v ACN 098 408 176 PTY LTD & ANOR [2023] SASCA 91 Court of Appeal – Civil: Livesey P, Doyle and Bleby JJA THE COURT: Introduction 1 This is an appeal against an award of damages of $122,502, in addition to interest and costs, made by a master of this Court.1 The appellant, Mrs Ramadan, challenges the quantum of damages, contending that the award was too low. By cross-appeal it is contended by the second respondent (the respondents) that the appellant was not entitled to damages on the basis that she suffered no loss. 2 The appellant sued the first respondent, ACN 098 408 176 Pty Ltd (Unique Finance), in the Supreme Court for unconscionable conduct in respect of her entry (jointly with her husband Mr Ramadan) into a loan agreement with, and grant of a mortgage in favour of, Unique Finance over the family home in Woodville (the Woodville Property). The second respondent, the director of Unique Finance, Vincent Ventrice, was joined as a party on the basis that he was knowingly concerned in the unconscionable conduct. The claim was brought in both equity and under s 12CB of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act). 3 The trial judge found that Unique Finance had engaged in unconscionable conduct and that the claim in equity and under the ASIC Act was made out.2 The question of relief was deferred to a subsequent hearing. The trial judge dismissed the claim against Mr Ventrice because he was not satisfied that Mr Ventrice was intentionally involved in the contravention. The Full Court allowed an appeal by Mrs Ramadan, setting aside the order dismissing the action against Mr Ventrice and granting a declaration that Mr Ventrice was a “person involved” in the contravention by Unique Finance.3 The Full Court remitted the matter to the trial judge for the assessment of damages. 4 The trial judge proceeded to assess damages under the ASIC Act on the basis that both respondents were liable under statute.4 1 Ramadan v ACN 098 408 176 Pty Ltd (Supreme Court of South Australia, Judge Dart, 10 December 2020); Ramadan v ACN 098 408 176 Pty Ltd (Supreme Court of South Australia, Judge Dart, 11 May 2021). 2 Ramadan v ACN 098 408 176 Pty Ltd [2017] SASC 63 (Judge Dart). 3 Ramadan v ACN 098 408 176 Pty Ltd (2018) 129 SASR 584, [72]-[73] (Blue J, with whom Kourakis CJ and Parker J agreed): “[t]he inference is irresistible that Mr Ventrice knew that Mrs Ramadan was acting as a surety and volunteer in the transaction” and “the circumstances known to Mr Ventrice must inevitably have led him to have understand that Mr Ramadan may not have fully and accurately explained the purport and effect of the transaction to Mrs Ramadan”. 4 Ramadan v ACN 098 408 176 Pty Ltd (Supreme Court of South Australia, Judge Dart, 10 December 2020), [17]. There was no submission before the trial judge or this Court to suggest that there was any -- 5 of 48 -- [2023] SASCA 91 The Court 2 5 As will be seen, it is convenient to commence with the cross-appeal before addressing the appeal – that is, to determine whether there was any loss before addressing the extent of any loss. For the reasons that follow, the cross-appeal should be dismissed and, subject to an issue to be addressed, the appeal should be allowed. 6 The contentions made in this Court proceeded with the benefit of a number of arguments which were not made before the trial judge, and certainly many more of the relevant authorities than were cited to the trial judge. 7 These reasons are set out as follows: Introduction .................................................................................................................................. 1 Background .................................................................................................................................. 3 The hearing on quantum before the trial judge ........................................................................ 5 Relevant legislation ...................................................................................................................... 6 The notice of appeal ..................................................................................................................... 7 The notice of cross-appeal ........................................................................................................... 8 The second respondent’s application for an extension of time to cross-appeal ..................... 9 Is it open to the respondent to raise affirmation on appeal? ................................................... 10 A preliminary issue arising from the notice of cross appeal: “affirm” and “elect” - distinguishing between causation and the doctrine of election .............................................. 11 Cross-appeal ground 1: Affirmation of the 2007 Loan .......................................................... 11 Does the doctrine of election by affirmation prevent the recovery of damages? ................... 12 Cross-appeal ground 2: Causation – entry into the 2008 Loan ............................................. 13 Was the unconscionable conduct a cause of the appellant’s loss? ......................................... 16 Was the course of conduct adopted by the appellant reasonable? .......................................... 17 Cross-appeal ground 3: Causation – forgery of the appellant’s signature on the 2008 Loan ............................................................................................................................. 22 The case at trial: forgery of the appellant’s signature on the 2008 Loan................................ 22 The appeal grounds.................................................................................................................... 24 Appeal ground 1: the appellant’s failure to seek contribution from her husband for payments made under the 2008 Loan ................................................................................ 25 The reasoning of the trial judge in awarding 50 per cent of payments made under the 2008 Loan ............................................................................................................... 25 How is failure to seek contribution from a third party relevant to the assessment of damages under s 12GF of the ASIC Act? .......................................................................... 26 Should the appellant’s failure to look to her husband for a contribution to the mortgage payments be taken into account in assessing her damages? ................................... 29 Was it open for the trial judge to consider mitigation?........................................................... 29 Appeal ground 2: the loss of the proprietary interest in the Woodville Property ............... 35 difference between an award of equitable compensation and an award of damages in the circumstances of this case. -- 6 of 48 -- [2023] SASCA 91 The Court 3 Trial judge’s reasons ............................................................................................................... 35 The transfer of the Woodville Property .................................................................................. 37 The appellant’s submissions on appeal ................................................................................... 39 The loss arising from the transfer of the Woodville Property ................................................ 39 Orders ......................................................................................................................................... 44 Background 8 The factual background is set out in more detail in the reasons of the Full Court.5 The following is a summary. 9 The appellant was born in Palestine in 1940. She left school at eight years of age, having never learnt to read or write. She married Mr Ramadan at the age of 14. After moving to South Australia in 1975, Mr and Mrs Ramadan purchased the Woodville Property. Whilst the acquisition was initially in Mr Ramadan’s name, it was put into their joint names in 2003. For many years the family operated the Jerusalem Sheshkebab House in Hindley Street, Adelaide. Mrs Ramadan worked as a cook and kitchen hand. She spoke Arabic and never learnt English. 10 In 1979 Mr Ramadan incorporated Merhi Pty Ltd (later called Ballsam Pty Ltd) (Ballsam) to act as trustee of the Steve Merhi Family Trust. The property in Hindley Street at which the Jerusalem restaurant business was conducted was owned by Ballsam. It was rented to Haifa Pty Ltd (Haifa), a company incorporated by Mr Ramadan to carry on the restaurant business. Over the years, Ballsam acquired other property. 11 In 2007 Mr Ramadan was informed by Mr Jelil of an opportunity to participate in a business in the Middle East. Shortly before 24 July 2007 Mr Jelil told Mr Ventrice about the business opportunity. Mr Jelil introduced Mr Ventrice and Mr Ramadan at the Ramadan home, the Woodville Property. Mr Ramadan and Mr Jelil asked Mr Ventrice for a loan of about $70,000 for the business venture. 12 Between July and September 2007 Mr Ramadan, as purported sole director and secretary of Ballsam, executed three loan agreements with mortgages over real property in favour of Unique Finance in amounts of $40,000, $90,000 and $72,000. 13 In September 2007 Mr Ramadan negotiated with Mr Ventrice a further loan of $300,000 from Unique Finance (the 2007 Loan). This loan differed from the previous loans because it was to be taken out in the name of Mr and Mrs Ramadan jointly and secured over the Woodville Property. That property was unencumbered. 14 The 2007 Loan formed the basis of the claim by the appellant. 5 Ramadan v ACN 098 408 176 Pty Ltd (2018) 129 SASR 584, [16]-[38] (Blue J, with whom Kourakis CJ and Parker J agreed). -- 7 of 48 -- [2023] SASCA 91 The Court 4 15 The 2007 Loan was executed at the offices of Mr Burtt, a solicitor engaged by Mr Ventrice. Mrs Ramadan was taken to the meeting by Mr Ramadan who told her that they were going to attend a meeting to sign some documents. He had not previously told her anything about the proposed loan of $300,000. Mrs Ramadan was wearing traditional Arab dress including a hijab. She had very little understanding of spoken English. She was illiterate in written English, Arabic and every other language. She was 67 years old. 16 Present at the meeting, as well as Mr and Mrs Ramadan and Mr Burtt, were Mr Ventrice and Mr Jelil. The meeting was generally conducted by Mr Burtt who produced a loan agreement and mortgage. Mr Ramadan directed Mrs Ramadan to sign where he pointed. Mrs Ramadan asked him why she was signing. He replied that they were borrowing $300,000 for one month to assist Mr Jelil with a business proposition. The discussion between Mr and Mrs Ramadan was in Arabic. 17 Mrs Ramadan was unable to read the documents. She did not understand that one of the documents was a mortgage over the family home. No reference was made to a mortgage. No reference was made to interest. She gave evidence, which the judge accepted, that in her culture she was required to comply with her husband’s requests in respect of business matters and she felt pressure to sign the documents when requested to do so. These matters were found by the trial judge to give rise to a special disadvantage, in turn supporting the finding of unconscionable conduct. 18 The documents signed by Mrs Ramadan at the meeting comprised a loan agreement for $300,000 at an interest rate of 5 per cent per month and a default interest rate of 15 per cent per month, together with a mortgage over the family home at Woodville. That is, the interest obligation lay in the range 60 to 180 per cent per annum. After execution of the documents, Unique Finance paid $257,983 to Ballsam. The moneys were used by Mr Ramadan and Mr Jelil for their business venture but it is not known what became of them. 19 In April 2008, just over six months later, Mr and Mrs Ramadan borrowed $356,000 from another financier, Ezy Mortgage, to pay out Unique Finance (the 2008 Loan) at a commercial rate of interest which was generally below 10 per cent, and at times below 8 per cent per annum. 20 In early 2009 Mr Ramadan left Australia for the Middle East and never returned. After leaving the country he made no further contributions towards repayment of the 2008 Loan. 21 There was some evidence to suggest that Mrs Ramadan’s signature on the 2008 Loan documents was forged and that Mrs Ramadan first became aware of the 2008 Loan after her husband left the country, when it became necessary for her to commence making loan repayments. Whether there was forgery was not the -- 8 of 48 -- [2023] SASCA 91 The Court 5 subject of any finding by the trial judge, who proceeded on the factual basis that the appellant refinanced the loan with Mr Ramadan in 2008.6 22 As will be seen, the respondents by the cross appeal now contend that whether there was forgery is relevant to the determination whether their unconscionable conduct can be said to have caused the appellant’s loss. 23 These proceedings were commenced in September 2013. Since proceedings were commenced, the 2008 Loan was paid out in full by Mrs Ramadan’s grandson in exchange for a transfer of the Woodville Property in 2016. At the date of the transfer of the Woodville Property, the amount owing on the April 2008 Mortgage was $314,139.12.7 Mr Ramadan died in 2017. 24 The appellant has the assistance of a litigation guardian.8 The first respondent, Mr Ventrice, died in February 2022 and his estate has been substituted as a party.9 From time to time the second respondent has been deregistered and then reregistered. 25 Although the appeal was defended by the second respondent and the cross-appeal was agitated by the second respondent, it is convenient to continue to refer to the respondents. The hearing on quantum before the trial judge 26 At the conclusion to his judgment on liability, the trial judge identified a number of issues that he considered relevant to determining the appropriate remedy, including:10 1. The principles relevant to assessing compensation in equity or damages pursuant to the ASIC Act. 2. Whether Mrs Ramadan’s damages were limited by reason of her right of contribution against Mr Ramadan for 50 per cent of the payments she made in respect of their joint debt. 3. Whether the entry into a mortgage with a different financier in 2008 (the 2008 Loan), and using the monies to repay the monies borrowed from the first 6 Ramadan v ACN 098 408 176 Pty Ltd (Supreme Court of South Australia, Judge Dart, 10 December 2020), [19]. The Full Court proceeded on the same basis, Ramadan v ACN 098 408 176 Pty Ltd (2018) 129 SASR 584, [35] (Blue J, with whom Kourakis CJ and Parker J agreed). 7 Ramadan v ACN 098 408 176 Pty Ltd (Supreme Court of South Australia, Judge Dart, 10 December 2020), [33]. 8 On 9 December 2021 the Court made orders approving the appointment of Mr Scott William Jelbert as litigation guardian for the appellant. 9 Following an application to the Registrar dated 26 July 2022 to appoint a representative of Mr Ventrice’s estate, the name of the second respondent was amended to Sigita Ventrice (As Administrator of the Estate of Vincent Ventrice). 10 Ramadan v ACN 098 408 176 Pty Ltd [2017] SASC 63, [57]-[60] (Judge Dart). -- 9 of 48 -- [2023] SASCA 91 The Court 6 respondent, amounted to an affirmation of the 2007 Loan, and if so, the effect of the affirmation on the entitlement to damages. 27 Following a hearing in May 2020, the trial judge delivered reasons on 10 December 2020. The assessment of damages proceeded on the basis that both respondents were jointly and severally liable to the appellant. 28 The trial judge found that, since 2009, payments had been made in the amount of $245,004 against the mortgage under the 2008 Loan. The trial judge split those payments into two categories: those paid by Mrs Ramadan largely from savings and her pension (with some assistance from family) comprising $127,194, and payments made solely by her grandson on her behalf totalling $117,810.11 Whilst making that distinction, the trial judge found that both categories represented recoverable loss.12 29 The trial judge nonetheless proceeded to award Mrs Ramadan only 50 per cent of the total amount of those payments, that is, $122,502. The basis for halving the award was that Mrs Ramadan had a right of contribution against Mr Ramadan for 50 per cent of the payments. It will be necessary to return to this aspect of the trial judge’s reasons. Relevant legislation 30 The first respondent was found to have breached s 12CB(1) of the ASIC Act by engaging in unconscionable conduct in connection with the supply of financial services. The second respondent was found liable pursuant to s 12GF because he was a person knowingly concerned in the first respondent’s contravention of s 12CB. 31 The purpose of s 12CB is to proscribe unconscionable conduct in circumstances which include those of the present case. A corollary is that a victim of contravening conduct is entitled to compensation in the form of damages. Those damages are to be recovered in accordance with s 12GF(1) of the ASIC Act (as at 2007): 12GF Actions for damages (1) A person who suffers loss or damage by conduct of another person that contravenes a provision of Subdivision C (sections 12CA to 12CC) or Subdivision D (sections 12DA to 12DN) may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention. 11 Ramadan v ACN 098 408 176 Pty Ltd (Supreme Court of South Australia, Judge Dart, 10 December 2020), [40]-[41]. 12 Ramadan v ACN 098 408 176 Pty Ltd (Supreme Court of South Australia, Judge Dart, 10 December 2020), [36]-[37] citing authorities on third party subventions, such as The National Insurance Company of New Zealand Limited v Espagne (1961) 105 CLR 569, 597 (Windeyer J) and Wollington v State Electricity Commission of Victoria (No 2) [1980] VR 91. See also Maestrale v Aspite (2014) 13 ASTLR 262, [124]-[129] (Beazley P, with whom Macfarlan and Barrett JJA agreed). -- 10 of 48 -- [2023] SASCA 91 The Court 7 32 The trial judge found that the appellant suffered loss and damage “by”, or as a result of, the unconscionable conduct of the respondents and assessed damages in accordance with the ASIC Act. There was no challenge to the trial judge proceeding to assess damages on that basis. The notice of appeal 33 By notice of appeal dated 1 June 2021, Mrs Ramadan contends that the trial judge erred in two ways when assessing damages. The grounds of appeal are as follows: 1. The Judgment Amount was derived in part from the Court’s decision dated 10 December 2020 in Ramadan v ACN 098 408 408 Pty Ltd & Anor SCCIV-13- 1185 (“the Decision”). 2. The Learned Trial Judge erred in that he allowed as damages only 50% of the total amount of the payments made by the appellant (applicant) to meet her liability under the mortgage with Ezy Mortgage (“the Mortgage”) over her home property (“the Home Property”). The Learned Trial Judge ought to have allowed as damages under that head 100% of those payments [(Appeal ground 1)] because: a. The relevance and availability of any right of contribution against her husband in respect of her liability to the mortgagee did not arise as an issue in the trial either on the pleadings or through the conduct of the parties at trial; b. In any event – i. no right of contribution against the appellant’s husband in respect of her liability to the mortgagee had accrued; ii. further, or alternatively, the availability (if any) of a right of contribution against her husband in respect of her liability to the mortgagee was not relevant to any assessment of her loss; c. Further, and in the alternative, insofar as the Learned Trial Judge held (if he did so hold, which is contested) that the appellant had failed to take reasonable steps to mitigate her loss by claiming contribution from her husband – i. reasonable mitigation of her loss, whether in that way, or in any other way, did not arise as an issue in the trial either on the pleadings or through the conduct of the parties at trial; ii. In any event, no evidence was called by the respondent (who would have borne the onus on that issue) to show that any failure by the appellant to bring contribution proceedings, either in this State or in Jordan, against her husband in Jordan, would have been a reasonable mitigation. 3. The Learned Trial Judge erred in that he failed to award any damages to the appellant on account of the loss of the value of her proprietary interest in the Home Property, -- 11 of 48 -- [2023] SASCA 91 The Court 8 including her survivorship interest, following its transfer to her grandson in September 2016 (“the Transfer”) [(Appeal ground 2)]. The Learned Trial Judge ought to have found that the loss by the Appellant of her proprietary interest in the Home Property, including the value of her survivorship interest, was a loss that resulted from the unconscionable conduct of the Respondents for which she was entitled to be compensated. 34 The notice of appeal essentially discloses two grounds. The first ground of appeal criticises the award of only 50 per cent of the sum of $245,004 in payments made by the appellant to meet her liability under the 2008 Loan. The appellant contends that she is entitled to an award of damages in the full amount of the payments made against the 2008 Loan. The second ground of appeal criticises the failure to award damages to the appellant on account of her loss arising from the 2016 transfer of the Woodville Property to her grandson in order to discharge the 2008 Loan. 35 As will be seen, there is also an issue whether there is scope for any alternative claim, short of an award for the loss of the value of the appellant’s survivorship interest in the Woodville Property, in connection with the repayment of the 2008 Loan. The notice of cross-appeal 36 By cross-appeal dated 23 September 2021, the second respondent contends that the trial judge ought to have found that the appellant suffered no loss and damage. The grounds of cross-appeal are detailed, but in essence disclose three separate grounds: 1. The trial Judge erred in mixed fact and law in finding that the Appellant suffered loss and damage by the Respondents’ unconscionable conduct, being 50% of the payments made to EZY Mortgage since 2009: December Reasons, [41]. 2. Having found that: 2.1 the impugned loan transaction, being the loan made by the First Respondent to the Appellant and her late husband in 2007 (2007 Loan), was discharged in full in April 2008 when the Appellant and her husband borrowed monies from another financier, EZY Mortgage: December Reasons, [11]; and 2.2 there was no claim against EZY Mortgage: December Reasons, [15]. the trial Judge ought to have found that: 2.3 the entry into the EZY Mortgage, and discharge of the 2007 Loan, constituted an affirmation of the 2007 Loan, such that the Appellant is not entitled to recover any loss or damage said to flow from the Respondents’ unconscionable conduct; [(Cross-appeal ground 1)] 2.4 further, or in the alternative, the payments made to EZY Mortgage since 2009 were not caused by the unconscionable conduct of the Respondents, but, rather, were caused by the Appellant’s election to enter into the EZY -- 12 of 48 -- [2023] SASCA 91 The Court 9 Mortgage and continue to make payments pursuant to the EZY Mortgage, rather than to seek to set aside or otherwise impugn the 2007 Loan in, or before, April 2008, or prior to the Appellant commencing making payments under the EZY mortgage in 2009. [(Cross-appeal ground 2)] 3. In the alternative to [2] above the trial Judge ought to have: 3.1 accepted the evidence of the appellant and found that EZY Mortgage was obtained fraudulently by the forging of the Appellant’s signature on the loan and mortgage documents; and 3.2 found that the payments made to EZY Mortgage since 2009 were not caused by the unconscionable conduct of the Respondents, but, rather, were caused by the fraud perpetrated upon the Appellant by the entry into the EZY Mortgage and the Appellant’s election in 2009 to commence making payments pursuant to the EZY Mortgage notwithstanding that fraud. [together, (Cross-appeal ground 3)] 4. By reason of the matters set out at [2], or alternatively, [3], the trial Judge ought to have found that: 4.1 the Appellant is not entitled to equity to any relief by reason of the Appellant’s affirmation of the 2007 Loan and/or EZY loan and mortgage; and 4.2 further, or in the alternative, the Appellant suffered no compensable loss or damage by the unconscionable conduct of the Respondents. 37 It will be necessary to consider how these grounds relate to s 12GF of the ASIC Act and whether there is scope for the respondents to raise these grounds in light of the conduct of proceedings before the trial judge. The second respondent’s application for an extension of time to cross-appeal 38 The respondents require an extension of time to bring the cross-appeal. The notice of cross-appeal was filed on 23 September 2021, approximately four and a half months after the decision the subject of the appeal was handed down. 39 An affidavit affirmed on 8 December 2021 by the solicitor for the second respondent deposed to difficulty obtaining instructions in relation to the cross-appeal due to the second respondent having serious health issues between March and September 2021, requiring various medical procedures. 40 The affidavit provides an acceptable explanation for the delay in bringing the cross-appeal.13 It is appropriate to grant an extension of time. 13 Hall v The Nominal Defendant (1966) 117 CLR 423, 435 (Barwick CJ). -- 13 of 48 -- [2023] SASCA 91 The Court 10 Is it open to the respondent to raise affirmation on appeal? 41 Cross-appeal ground 1 and cross-appeal ground 2 raise “affirmation” and “election”, respectively, as grounds on which the appellant should be denied relief. 42 A preliminary matter is whether it is open to the respondents to argue these grounds of the cross-appeal. That requires a consideration of the way the proceedings were litigated before the trial judge. 43 The only reference to affirmation in the earlier judgments appears in the judgment regarding liability delivered on 28 April 2017:14 The second issue is whether the act of the plaintiff in entering into a further transaction with a different financier and repaying to the first defendant the monies borrowed from it could be said to be an act of affirming [the 2007 Loan] … , thus eliminating any entitlement to avoid the contract.15 If by the act of repaying the monies to the defendant the plaintiff has affirmed the contract, I wish to hear the parties on whether that has any effect in respect of what, if any, remedy is appropriate. 44 At a hearing on 30 May 2018 the parties were invited to make submissions regarding the appropriate remedy and the effect of any affirmation. 45 In advance of that hearing, the appellant (plaintiff in the court below) filed written submissions addressing “affirmation, statutory relief and damages”. The appellant emphasised, by reference to the doctrine of election, that “affirmation” did not operate to bar a statutory award of damages. The basis of that submission was that the appellant took no action herself to discharge the 2007 Loan or enter into the 2008 Loan and made no conscious choice between inconsistent rights. 46 The respondents did not address affirmation in written or oral submissions in advance of or at the hearing on 30 May 2018. The respondents’ sole contention with respect to relief was that no loss was suffered by the appellant. The crux of that submission was that the appellant’s claim either failed as a matter of causation because she would have entered a loan in any event on the instructions of her husband, or there was no loss because the 2007 Loan was paid out and the appellant at all times resided in the Woodville Property. 47 Accordingly, affirmation was not pleaded by the respondents, nor raised by them in submissions in the court below. It was not an issue considered by the trial judge.16 48 The factual basis on which the respondents now invite this Court to address these issues is not the basis on which the appellant addressed affirmation at trial. The respondents did not cross-examine her about these matters, with the result that 14 Ramadan v ACN 098 408 176 Pty Ltd [2017] SASC 63, [59] (Judge Dart). 15 Khoury v Government Insurance Office of New South Wales (1984) 165 CLR 622, 633. 16 The judgments delivered by the trial judge on 10 December 2020 and on 11 May 2021 do not address affirmation. That is understandable given the respondents did not seek to be heard on the matter in the court below. -- 14 of 48 -- [2023] SASCA 91 The Court 11 this Court cannot be confident that it has all relevant evidence on the issues raised. It is not in the interests of justice to permit the agitation of these issues for the first time on appeal. 49 It is therefore not open to the respondents to press these grounds of the cross-appeal. 50 In deference to the arguments of the parties, however, it is appropriate to indicate the approach that would have been taken had it been open to address these issues on the basis of the evidence presently available. As will be seen, had it been open to address these grounds the cross-appeal would have been dismissed in any event. A preliminary issue arising from the notice of cross appeal: “affirm” and “elect” - distinguishing between causation and the doctrine of election 51 In cross-appeal ground 1, the term “affirm” is used in the context of the doctrine of election by affirmation. That is, the affirmation of the 2007 Loan is said to constitute an election by affirmation, the effect of which is to extinguish an inconsistent right, which is said to be the recovery of damages arising out of the payment of that loan. 52 The term “election” is used in cross-appeal ground 2 to describe the act of the appellant entering into the 2008 Loan. 53 That is, the word “election” as it appears in the notice of cross-appeal concerning ground 2 is not a reference to the doctrine of election. The crux of this aspect of the respondent’s case is the assertion that the payments made under the 2008 Loan from 2009 onwards were not caused by the unconscionable conduct of the respondents. Rather, they were caused by the appellant entering into the 2008 Loan and mortgage and making payments pursuant to those arrangements. Implicit in this is the further assertion that the appellant did this rather than set aside or otherwise impugn the 2007 Loan before commencing to make payments under the 2008 Loan in 2009. 54 The real inquiry arising from cross-appeal ground 2 is therefore whether the course of conduct adopted by the appellant affects her right to recover damages. Cross-appeal ground 1: Affirmation of the 2007 Loan 55 The respondents contend that the discharge of the 2007 Loan represented an affirmation of it and the doctrine of election by affirmation bars any recovery of damages flowing from their unconscionable conduct. 56 As will be seen, this ground of cross-appeal fails because, as a matter of law, any election by the appellant to discharge (or “affirm”) the 2007 Loan and enter into the 2008 Loan, rather than rescind (or “disaffirm”) the 2007 Loan, does not -- 15 of 48 -- [2023] SASCA 91 The Court 12 operate to prevent the appellant from suing for and recovering an award of damages. Does the doctrine of election by affirmation prevent the recovery of damages? 57 The doctrine of election by affirmation operates to prevent a person from obtaining the benefit of rights conferred under a contract and, simultaneously, seeking to be absolved of obligations under that contract, including by rescission.17 It arises where a party, faced with two inconsistent legal rights, elects to exercise one of those legal rights, which has the effect of extinguishing the other right. The doctrine of election comprises four essential elements:18 1. A choice is made in favour of one of two legal rights. 2. The two rights are inconsistent. 3. The choice was made with some degree of knowledge (though it is not settled whether a party need only have knowledge of the facts giving rise to the existence of the legal rights or need also know that they were legal rights).19 4. The result of having made the choice is binding and irrevocable. 58 The second requirement, that the doctrine of election operates only where the two legal rights are inconsistent, is fatal to this ground of cross-appeal.20 59 The appellant’s discharge of the 2007 Loan and entry into the 2008 Loan was not inconsistent with the appellant recovering damages flowing from the unconscionable conduct of the respondents in procuring her entry into the 2007 Loan. The right to rescind an agreement is distinct from the right to claim damages or compensation for losses flowing from entry into that agreement. The shared characteristic of rescission and an award of damages or compensation is that they are both forms of relief potentially available to the victim of unconscionable conduct. 60 In the present case, the respondents cannot demonstrate that the discharge of the 2007 Loan and entry into the 2008 Loan are inconsistent with the right to seek damages. When one has regard to the circumstances in which the appellant was placed in the relevant period, the taking of these steps cannot be characterised as 17 The doctrine was recently considered by the High Court in Allianz Australia Insurance Ltd v Delor Vue Apartments CTS 39788 (2022) 97 ALJR 1, [38]-[53] (Kiefel CJ, Edelman, Steward and Gleeson JJ). 18 See Qiao Liu, “Rethinking Election: A General Theory” (2013) 35 Sydney Law Review 599 cited by the High Court in Allianz Australia Insurance Ltd v Delor Vue Apartments CTS 39788 (2022) 97 ALJR 1, [53] (Kiefel CJ, Edelman, Steward and Gleeson JJ). 19 See Harrison v Schipp [2001] NSWCA 13, [102]-[103] (Giles JA, with whom Handley and Fitzgerald JJA agreed). See also Sargent v ASL Developments Ltd (1974) 131 CLR 634, 656 (Mason J). 20 Sargent v ASL Developments Ltd (1974) 131 CLR 634, 641 (Stephen J): “The doctrine only applies if the rights are inconsistent the one with the other and it is this concurrent existence of inconsistent sets of rights which explains the doctrine; because they are inconsistent neither one may be enjoyed without the extinction of the other and that extinction confers upon the elector the benefit of enjoying the other, a benefit denied to him so long as both remained in existence”, 655 (Mason J). -- 16 of 48 -- [2023] SASCA 91 The Court 13 choosing between two inconsistent legal rights. They represented a reasonable attempt to minimise the financial burden associated with entry into the 2007 Loan arrangements. The paying out of that loan, and the assumption of a lesser interest burden under the 2008 Loan, does not provide any foundation to apply the doctrine of election by affirmation. 61 By contrast, an example of choosing between two inconsistent legal rights available to the appellant in late 2007 would have been the exercise of the right to rescind the 2007 Loan, and a purported retention of the monies advanced under that loan. Ordinarily, a borrower cannot both rescind the loan and retain the advance. 62 In this case, on the discharge of the 2007 Loan, the right to rescind the 2007 Loan was extinguished. However, the appellant remained entitled to recover an award of damages for the loss she suffered by reason of her entry into the 2007 Loan. 21 63 Ground 1 of the cross-appeal should be dismissed. Cross-appeal ground 2: Causation – entry into the 2008 Loan 64 This issue bears some similarity to ground 1 of the cross-appeal in that it is directed to the legal effect of the discharge of the 2007 Loan and entry into the 2008 Loan. However, it is distinct from ground 1 of the cross-appeal because it is directed to the question whether the respondents’ unconscionable conduct caused the appellant’s loss associated with taking this course. 65 The issue for determination on this ground is whether the appellant’s loss, comprising the making of payments under the 2008 Loan, was not caused by the unconscionable conduct of the respondents, but rather, was caused by the appellant entering into the 2008 Loan (and making payments against that loan).22 66 The issues raised by this ground relate to causation. Section 12GF(1) of the ASIC Act provides that the appellant is entitled to damages for loss caused “by” (or, as a result of) the contravening conduct. It is generally said that the issue of causation must be approached in a practical and common sense manner.23 21 Henjo Investments v Collins Marrickville (No 2) (1989) 40 FCR 76 (Henjo), 90 (Lee J) “The act of affirming the contract would make no difference in itself to the right to recover damages for the misrepresentation inducing the contract”, 86 (Burchett J) “I do not accept the view that the respondent’s failure promptly and unequivocally to disaffirm the contract which was held in Henjo Investments Pty Ltd v Collins Manickville Pty Ltd (No 1) (1988) 39 FCR 546 to be one of the factors barring its claim to rescind, also bars any right to damages for the consequences of the terms of the lease.” 22 The notice of cross appeal describes the entry into the 2008 Loan in terms of an “election to enter into the 2008 Loan”, however, the doctrine of election is not relevant to the determination of this ground of cross appeal. 23 See Fitzgerald v Penn (1954) 91 CLR 268, 277-278 (Dixon CJ, Fullagar and Kitto JJ); March v Stramare (E and MH) Pty Ltd (1991) 171 CLR 506, 515 (Mason CJ), 522-523 (Deane J); Bennett v Minister of Community Welfare (1992) 176 CLR 408, 412-413 (Mason CJ, Deane and Toohey JJ), 418-419 (Gaudron J), 428 (McHugh J); Wardley Australia Ltd v Western Australia (1992) 175 CLR -- 17 of 48 -- [2023] SASCA 91 The Court 14 However, more recently, the High Court has in a different statutory context questioned the role of “common sense”:24 Causation in a legal context is always purposive.25 The application of a causal term in a statutory provision is always to be determined by reference to the statutory text construed and applied in its statutory context in a manner which best effects its statutory purpose.26 It has been said more than once in this Court that it is doubtful whether there is any "common sense" approach to causation which can provide a useful, still less universal, legal norm.27 Nevertheless, the majority in the Full Court construed the phrase "as a result of" in s 5A(1) as importing a "common sense" notion of causation. That construction, with respect, did not adequately interrogate the statutory text, context and purpose. 67 The authorities are replete with statements to the effect that the contravening conduct need not be the sole or primary cause of the loss, and it need only be a cause of the loss.28 Accordingly, the appellant would not be entitled to damages if the respondents established that their unconscionable conduct was not at least a cause of the appellant’s loss. 68 By contrast, it is not sufficient for the respondents to establish that the appellant’s decision to enter into the 2008 Loan and to commence making payments under that loan was also a cause of her loss. That would not mean that the respondents’ unconscionable conduct was not also a cause of the appellant’s loss. 69 Accordingly, if unconscionable conduct remained a cause of the appellant’s loss, it would not avail the respondents that another cause of the same loss was the appellant’s entry into the 2008 Loan. 70 It is a different and additional question whether some part of the appellant’s loss and damage would not have been sustained but for unreasonable conduct, such as by her failure to mitigate. Where mitigation is in issue it will usually be appropriate to apply notions of reasonableness when assessing how much of the appellant’s loss was caused by the respondents’ contravention.29 In the law of tort and contract the concepts of reasonable foreseeability and remoteness have been developed to control the metes and bounds of the recovery of damages. Nonetheless, when awarding damages under s 12GF, it is necessary to have regard 514, 525 (Mason CJ, Dawson, Gaudron and McHugh JJ); Medlin v State Government Insurance Commission (1995) 182 CLR 1, 6 (Deane, Dawson Toohey and Gaudron JJ). 24 Comcare v Martin (2016) 258 CLR 467, [42] (French CJ, Bell, Gageler, Keane and Nettle JJ), referring to the Safety, Rehabilitation and Compensation Act 1988 (Cth). 25 Legal Services Board v Gillespie-Jones (2013) 249 CLR 493, 530 [137] (Bell, Gageler and Keane JJ). 26 Travel Compensation Fund v Tambree (2005) 224 CLR 627, 639 [28] (Gleeson CJ). See also Allianz Australia Insurance Ltd v GSF Australia Pty Ltd (2005) 221 CLR 568, 582 [42]. 27 Travel Compensation Fund v Tambree (2005) 224 CLR 627, 642 [45] (Gleeson CJ), citing Allianz Australia Insurance Ltd v GSF Australia Pty Ltd (2005) 221 CLR 568, 596-597 [96]-[97]. 28 I & L Securities Pty Limited v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109 (HTW Valuers), [57] (Gaudron, Gummow and Hayne JJ). 29 Stone v Chappel (2017) 128 SASR 165, [377] (Doyle J); see also I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109, [88]-[89] (McHugh J). -- 18 of 48 -- [2023] SASCA 91 The Court 15 to the statutory regime which, insofar as the recovery of damages is concerned, operates in the same way as under the former Trade Practices Act: 30 The relationship between conduct of a person that is in contravention of the statute, and loss or damage suffered, expressed in the word ``by'', is one of legal responsibility. Such responsibility is vindicated by an award of damages. When a court assesses an amount of loss or damage for the purpose of making an order under s 82, it is not merely engaged in the factual, or historical, exercise of explaining, and calculating the financial consequences of, a sequence of events, of which the contravention forms part. It is attributing legal responsibility; blame. This is not done in a conceptual vacuum. It is done in order to give effect to a statute with a discernible purpose; and that purpose provides a guide as to the requirements of justice and equity in the case. Those requirements are not determined by a visceral response on the part of the judge assessing damages, but by the judge's concept of principle and of the statutory purpose. 71 The limit of an award of damages under s 12GF is ascertained by assessing the degree of connection between the contravening conduct and the loss suffered, and by considering whether the claimant acted reasonably in the circumstances to avoid the loss.31 72 In respect of analogous provisions under the former Trade Practices Act 1974 (Cth), the plurality in Marks v GIO Australia Holdings Ltd observed that whilst common law analogies might be raised concerning contraventions of the Act, “it is wrong to limit the apparently clear words of the Act” by reference to common law analogies:32 It can be seen, therefore, that both ss 82 [the equivalent to s 12GF of the ASIC Act] and 87 require examination of whether a person has suffered … loss or damage “by conduct of another person” that was engaged in the contravention of one of the identified provisions of the Act. That inquiry is one that seeks to identify a causal connection between the loss or damage that it is alleged has been or is likely to be suffered and the contravening conduct. But once that causal connection is established, there is nothing in s 82 or s 87 (or elsewhere in the Act) which suggests either that the amount that may be recovered under s 82(1) … should be limited by drawing some analogy with the law of contract, tort or equitable remedies. Indeed, the very fact that ss 82 and 87 may be applied to widely differing contraventions of the Act, some of which can be seen as inviting analogies with torts such as deceit (eg, s 52) or with equity (eg, s 51AA) but others of which find no ready analogies in the common law or equity, shows that it is wrong to limit the apparently clear words of the Act by reference to one or other of these analogies. 73 The principles of mitigation relevant to the assessment of an award of damages made under the former Trade Practices Act pursuant to provisions equivalent to s 12GF of ASIC Act were recently considered by the Court of Appeal in Western Australia:33 30 I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109, [26] (Gleeson CJ). 31 Poliwka v Girgis (2021) 58 WAR 205, [151]-[152] (The Court); Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 2) (1989) 40 FCR 76, 93 (Lee J). 32 Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494, [38] (McHugh, Hayne and Callinan JJ). 33 Poliwka v Girgis (2021) 58 WAR 205, [151]-[152] (The Court). -- 19 of 48 -- [2023] SASCA 91 The Court 16 Whilst common law rules such as remoteness and mitigation cannot control or be superimposed upon the operation of s 82 [by analogy, s 12GF of the ASIC Act], the court's experience in the operation of those rules may assist or provide guidance in determining the question of causation, ie, attributing legal responsibility, having regard to the scope and purpose of the TP Act.34 Accordingly, a loss following what the common law would recognise as a failure to mitigate, may, properly understood in the circumstances and in the context of the operation of s 82 on its proper construction, not be caused by the contravening conduct for the purposes of s 82. 35 74 Authorities such as these demonstrate that the relevant enquiry is whether the loss suffered by the claimant was caused by the contravening conduct. The determination as to whether contravening conduct is a cause of the loss will involve enquiries that may at times appear similar to enquiries regarding mitigation and remoteness at common law. That is because there will be circumstances where the loss suffered for the purposes of s 12GF of the ASIC Act is caused by what might be described as the claimant’s conduct, akin to a failure to mitigate, rather than by the contravention of s 12CB. 75 There are three issues here. The first issue is whether the unconscionable conduct was a cause of the appellant’s loss (being the repayments made on the 2008 Loan). Second, if the unconscionable conduct was a cause of the loss, whether the appellant adopted an unreasonable course of conduct that warrants a reduction in her entitlement to damages. Third, if some reduction is warranted, it is necessary to determine the appropriate award. Was the unconscionable conduct a cause of the appellant’s loss? 76 The appellant’s case at trial was a “no transaction” case, that is, the appellant would not have entered into the 2007 Loan if there had been no unconscionable conduct. As matter of common sense, if not also logic, it seems difficult to avoid the conclusion that the respondents’ unconscionable conduct was a cause of the appellant’s loss in the sense that the unconscionable conduct was a cause of her entry into the 2007 Loan, with the effect that the Woodville Property became subject to a mortgage which required the repayment of interest at a very high rate. The subsequent entry into the 2008 Loan refinanced and effectively mitigated the liability arising under the 2007 Loan. 77 In order to find that the unconscionable conduct was not at least a cause of the appellant’s loss it would be necessary to embrace a form of reasoning that, “but for” entering the 2008 Loan, the appellant would not have made the payments 34 Marks v GIO Aust Holdings (1998) 196 CLR 494, [41] (McHugh, Hayne and Callinan JJ); Henville v Walker (2001) 206 CLR 459, [18] (Gleeson CJ), [130], [135] (McHugh J); I&L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109, [15] - [16] (Gleeson CJ), [84] (McHugh J); Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388 [44] (The Court); Grainger v Williams [2009] WASCA 60, [184] (McLure JA, with whom Wheeler JA agreed). 35 Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388, [70] (The Court); Tefbao Pty Ltd v Stannic Securities Pty Ltd (1993) 118 ALR 565; cf Finucane v New South Wales Egg Corporation (1988) 80 ALR 486, 519; Munchies Management Pty Ltd v Belperio (1988) 58 FCR 274, 287. -- 20 of 48 -- [2023] SASCA 91 The Court 17 totalling $245,004 under the 2008 Loan. This, however, is an example of a case where it is possible to point to multiple causes of the loss. The authorities have cautioned against the adoption of the “but for” test in cases where there are multiple causes of loss.36 The limitations associated with adopting a “but for” line of enquiry when determining an award of statutory compensation were highlighted by the plurality in HTW Valuers:37 … to show that, if either of two events had not occurred [for example, the 2007 Loan or the 2008 Loan], a loss which has been suffered would not have been suffered, does not demonstrate that one rather than the other event was the cause of the loss, any more than it demonstrates that neither was a cause of that loss. (Emphasis in original) 78 To apply “but for” reasoning in this case in order to determine whether it was the appellant’s entry into the 2008 Loan rather than her entry into the 2007 Loan that caused her loss would be wrong as a matter of both law and logic. At the time of entry into the 2008 Loan “[t]he wind had already been sown, though the whirlwind was yet to be reaped. In such a case, there is … no theoretical difficulty about awarding damages to take account of all the losses inherent in the situation, even if the [2007 Loan] is treated as affirmed”.38 Was the course of conduct adopted by the appellant reasonable? 79 The real issue at the heart of ground 2 of the cross-appeal is whether the appellant’s discharge of the 2007 Loan and entry into the 2008 Loan was a reasonable course to adopt. 80 The respondents referred the Court to Mister Figgins and Henjo.39 Both cases concerned claims for misleading and deceptive conduct where the contravening conduct was found to be a cause of the applicant entering into an agreement. In both cases the claims for consequential losses were defeated by reason of the course of conduct adopted by the applicant after entry into the agreement. Both cases involved the “affirming” of a contract procured by misleading and deceptive conduct. 81 However, the relevance of the “affirmation” in each case was not concerned with the doctrine of election by affirmation, rather the affirmation, that is the decision to continue operating under an agreement notwithstanding knowing that certain representations were false, was the point at which the recovery of loss 36 Stone v Chappel (2017) 128 SASR 165, [354] (Doyle J); Protec Pacific Pty Ltd v Steuler Services GmbH & Co KG [2014] VSCA 338, [540(6)]; Henville v Walker (2001) 206 CLR 459, [163] (Hayne J). See also Medlin v State Government Insurance Commission (1995) 182 CLR 1, 6 (Deane, Dawson Toohey and Gaudron JJ). 37 I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109, [26] (Gleeson CJ). 38 Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 2) (1989) 40 FCR 76, 86 (Burchett J). 39 Mister Figgins Pty Ltd v Centrepoint Freeholds Pty Ltd (1981) 36 ALR 23 (Mister Figgins), 60 (Northrop J); Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 2) (1989) 40 FCR 76. -- 21 of 48 -- [2023] SASCA 91 The Court 18 stopped.40 In other words, the conduct by which the contract was affirmed was found by the court to have been unreasonable in the circumstances, with the result that the liability of the contravening party did not extend to the consequential losses sustained after affirmation. 82 In Mister Figgins the applicant applied for and subsequently entered into leases for three premises in a shopping centre as a result of the misleading and deceptive conduct of the lessor. The applicant became aware of the misleading and deceptive conduct but decided not to take steps against the lessor in respect of the leases. The applicant traded under the leases despite knowing of the contravening conduct, and later sought damages for consequential trading losses sustained after learning about the misleading and deceptive conduct. 83 Justice Northrop found that continuing to trade and occupy the premises after the applicant became aware of the falsity of the relevant representations amounted to an affirmation of the leases. His Honour held that the subsequent trading losses were not recoverable. The reason the trading losses were not recoverable was addressed as a matter of causation, with Northrop J finding that the trading losses were “not caused by the conduct of the respondent but by the actions of the applicant”.41 The applicant was nonetheless awarded damages equivalent to the difference between the rent paid (on the basis of the misleading conduct) and the rent that ought reasonably to have been paid, but for the contravening conduct. The leases were varied to reduce the rent payable to market rent. 84 In Henjo the applicant purchased a restaurant based on, amongst other matters, a misleading representation as to the seating capacity of the restaurant. The trial judge found that, on learning the true position, the applicant ought to have closed the restaurant. Instead, the applicant continued to trade and, as a consequence, suffered trading losses beyond those that would have been suffered had the restaurant been closed. The Full Court upheld the finding of the trial judge that those trading losses could not be attributed to the respondent’s misleading and deceptive conduct. Lee and Burchett JJ reduced the damages further for the delay of the applicant in taking steps to find an assignee of the uncommercial lease.42 85 The respondents contended on this appeal that the payments made by the appellant under the 2008 Loan are akin to the trading losses suffered by the applicants in Henjo and Mister Figgins. That submission must be rejected. The act of discharging a loan requiring payment of interest of at least 60 per cent per annum, entered as a result of unconscionable conduct, and using monies from a 40 Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 2) (1989) 40 FCR 76, 90-91 (Lee J): “The actual or imputed affirmation may be treated as the point at which it becomes unreasonable for consequential damages to continue to accrue if no steps to mitigate the loss are taken thereafter or if affirmation of the contract was not the reasonable course to have followed: see Mr Figgins Pty Ltd v Centrepoint Freeholds Pty Ltd (1981) 36 ALR 23 at 60; T N Lucas Pty Ltd v Centrepoint Freeholds Pty Ltd (1984) 1 FCR 110 at 118”. 41 Mister Figgins Pty Ltd v Centrepoint Freeholds Pty Ltd (1981) 36 ALR 23, 59-60 (Northrop J). 42 Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 2) (1989) 40 FCR 76, 85 (Davies J dissenting as to interfering with the award in the court below), 86 (Burchett J), 97 (Lee J). -- 22 of 48 -- [2023] SASCA 91 The Court 19 loan obtained at a more favourable interest rate to pay out the first loan, cannot be described as an unreasonable course to adopt. The reduction in loan repayments appears to have been both necessary and reasonable.43 Indeed, by adopting that course of conduct in this case the appellant could be said to have mitigated her loss and the damages that might otherwise have been recoverable had she continued to make repayments under the 2007 Loan. 86 In Mister Figgins and Henjo the knowledge possessed by the plaintiff at the time of “affirming” each contract was central to the question of causation. In both cases, knowledge of the truth of misrepresentations at the time the decision was made to continue trading meant that responsibility for the ensuing losses did not satisfy the statutory test of being caused by the contravening conduct. 87 Perhaps more importantly, in each case the consequential losses claimed were additional to those incurred when initially acting on the misrepresentations. 88 In this case, even if it could be said that the applicant knew of the facts giving rise to the finding of unconscionability at the time she took out the 2008 Loan, that step had the effect of minimising the ongoing loss, not increasing it. 89 By inviting the Court to draw an analogy between Mister Figgins and Henjo the respondents contended that the appellant was aware of the facts giving rise to her special disadvantage, and understood the basic essence of the 2008 Loan. That may be so, but that does not avail the respondents in this case because it does not insulate them from their responsibility to meet the full amount of the losses flowing from their unconscionable conduct. 90 In Murphy, the High Court held that a trial judge would need to take into account all of the circumstances in determining whether parties behaved reasonably, that is, when determining “whether it was reasonable to expect them to confront the turmoil”.44 In that case, an elderly couple entered a lease for a residence in a retirement village on the basis of misrepresentations conveyed to them about the costs of outgoings. In issue was whether the couple behaved unreasonably by failing to sell their interest and move to alternative accommodation. The High Court did not determine that particular issue but relevantly stated:45 … once the contingency which had been hidden by the misrepresentation came to pass, it may be necessary to consider whether it was then reasonable for the appellants to continue to remain in the village rather than attempt to sell their interest and move elsewhere… As will be seen, we propose to remit the assessment of damages to the trial judge. If the respondent wishes to persist with the issue of whether the appellants behaved reasonably, and if the trial judge, in the light of the course of proceedings, considers that it is open to 43 Nonetheless it is on issues such as these that the absence of evidence from or cross-examination of the appellant demonstrates the difficulties associated with addressing these issues for the first time on appeal. 44 Murphy v Overton Investments Pty Limited (2004) 216 CLR 388 (Murphy), [70] (the Court). 45 Murphy v Overton Investments Pty Limited (2004) 216 CLR 388, [70] (the Court). -- 23 of 48 -- [2023] SASCA 91 The Court 20 the respondent to raise it, it may be investigated as part of the remitter. The inquiry would, no doubt, have to give due weight to the then age of the appellants, their state of health and other matters … 91 In the present case, an inquiry into whether the appellant behaved reasonably in paying out the 2007 Loan and taking on the 2008 Loan would need to take into account not only that the less onerous terms of the 2008 Loan would have lessened the financial stress the appellant was under, but also that the appellant was in her late sixties at the time of entering into the relevant loans, was illiterate in all languages and had been a volunteer to the initial loan and mortgage transaction with the respondents. There may be further relevant matters, such as cultural matters that may have exacerbated any disadvantage arising from age, lack of formal education and illiteracy and the fact that the appellant’s husband left Australia in early 2009 to reside in Jordan and did not thereafter make any payments towards the 2008 Loan. 92 It is helpful to contrast the appellant with the applicant in Mister Figgins. He was an astute businessman who, prior to entering the relevant lease, received independent legal advice and negotiated a number of commercially advantageous amendments to the lease. His decision to continue trading and not to pursue a claim against the lessor after becoming aware of the misrepresentations stemmed from his belief that, by not making a claim, he might obtain a commercial advantage in the form of a property development opportunity with the lessor.46 93 The appellant in the present case was never equipped to make an informed decision akin to that made by the businessman in Mister Figgins, and it would appear that her conduct stemmed from an understandable wish to remain in the family home. One may add that the appellant in this case did not ever obtain any real benefit from the 2007 Loan or the 2008 Loan (save to the extent that it discharged the 2007 Loan). 94 A further matter, dealt with in more detail when considering the appeal grounds, is the effect of the appellant not suing her husband, and whether the failure to take that step permits her conduct to be regarded as unreasonable. 95 For present purposes it is sufficient to observe that where a claimant has distinct rights of action against more than one “wrongdoer” in respect of all or some of the same loss, she is at liberty to sue both wrongdoers or to choose which wrongdoer to sue, or which wrongdoer to sue first.47 The principal constraint is that the claimant cannot recover more than she has lost. 46 Mister Figgins Pty Ltd v Centrepoint Freeholds Pty Ltd (1981) 36 ALR 23, 37 (Northrop J). 47 Bebonis v Angelis (2003) 56 NSWLR 127, [32] (Handley JA, with whom Beazley and Heydon JJ agreed); Steamship Enterprises of Panama Inc, Liverpool (Owners) v Ousel (Owners) & Ors (The Liverpool (No 2)) [1963] P 64, 82-84. -- 24 of 48 -- [2023] SASCA 91 The Court 21 96 The appellant was only required to act reasonably. The appellant was not obliged to take the risk of bringing uncertain litigation.48 And, as will been seen, the fact that the appellant did not commence proceedings against her husband does not in this case derogate from her right to recover the full amount of her loss under s 12GF of the ASIC Act. 97 The respondents have failed to establish that the trial judge erred in holding that their unconscionable conduct was a cause of the appellant’s loss. They have failed to establish that the appellant’s entitlement to damages should be defeated or otherwise reduced because the course of conduct adopted by the appellant was unreasonable. 98 Finally, it is necessary to return to the failure of the respondents to conduct the trial on the basis that the appellant’s conduct in continuing to pay out the 2008 Loan put an end to their liability. This, as has been foreshadowed, represents a reason sufficient to warrant dismissing this ground. The principles governing whether a new point can be raised on appeal are well established. In Whisprun Pty Ltd v Dixon, it was held:49 Nothing is more likely to give rise to a sense of injustice in a litigant than to have a verdict taken away on a point that was not taken at the trial and could or might possibly have been met by rebutting evidence or cross-examination. 99 This is not a case where all the relevant facts have been established beyond controversy. The pleadings demonstrate that the contentions now made by the second respondent were not properly in issue before the trial judge and it cannot otherwise be said to be in the interests of justice to entertain them on appeal.50 100 If they had been raised, it would have been necessary to consider all the circumstances relevant to the appellant and her decision to remain in the Woodville Property.51 During the course of cross-examination there was reference to the fact that the appellant had an interest in land overseas. When questioned whether she might have discharged the 2008 Loan by selling that land, her view was that her husband should have had to sell his own land to discharge the loan. The respondents did not raise the issues in pleadings and the limited cross-examination of the appellant in relation to why she acted as she did, could not be said to have addressed the issues comprehensively. 101 In circumstances where these matters were not properly in issue, it is possible that the appellant may have adduced further evidence rebutting the contentions now raised by the appellant. As a result, this Court cannot be satisfied that it has 48 Segenhoe Ltd v Akins (1990) 29 NSWLR 569, 582 (Giles J) cited with approval in Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1998) 192 CLR 603, [134] (Hayne J). 49 Whisprun Pty Ltd v Dixon (2003) 77 ALJR 1598, [51] (Gleeson CJ, McHugh and Gummow JJ). 50 Water Board v Moustakas (1988) 180 CLR 491, 497 (Mason CJ, Wilson, Brennan and Dawson JJ). 51 Murphy v Overton Investments Pty Limited (2004) 216 CLR 388, [70] (The Court). -- 25 of 48 -- [2023] SASCA 91 The Court 22 all the facts bearing on this ground of cross-appeal and it should not entertain it on appeal.52 102 In these circumstances, it is not necessary to consider the third issue, being the amount by which any award of damages should be reduced. 103 Cross-appeal ground 2 should be dismissed. Cross-appeal ground 3: Causation – forgery of the appellant’s signature on the 2008 Loan 104 This ground of cross-appeal is predicated on this Court finding that there was forgery of the appellant’s signature on the 2008 Loan documents. The forgery is said to have been perpetuated by Mr Ramadan without the knowledge of the appellant. There is no mention of forgery in the judgments of the trial judge.53 105 The respondents effectively ask this Court to make the finding of forgery for the first time on appeal on the strength of certain of the appellant’s evidence given in the court below. If that finding were to be made, then the issue to be determined is whether the forgery amounted to a break in the chain of causation in relation to the unconscionable conduct of the respondents. On that basis it is submitted that the respondents cannot be held responsible for the appellant’s loss arising from payments made to discharge the 2008 Loan. It is contended that responsibility for that loss would be borne by Mr Ramadan (or his estate) alone. 106 It is necessary to commence with a review of the extent to which forgery was addressed at the trial. The case at trial: forgery of the appellant’s signature on the 2008 Loan 107 The issue of forgery was, at most, subordinate to the main issues litigated and determined at the trial. That is demonstrated by the pleadings and an exchange between counsel. On the pleadings, there is an oblique reference to what appears to be forgery in the appellant’s reply dated 25 January 2016: 6.3.1 She [Mrs Ramadan] for the first time was shown her signature on documentation which she was told related to the Ezy Mortgage Loan [the 2008 Loan], which documentation purported to bear her signature (“the signature”); 6.3.2 She says that the signature on the said documentation is not hers. 108 It will be recalled that the appellant was plaintiff at the trial and, during the course of the appellant’s opening on the first day of trial, the following exchange occurred: His Honour: All right, that's not a pleaded matter at the moment is it [the forgery of the appellant’s signature on the 2008 Loan]? 52 Suttor v Gundowda Pty Ltd (1950) 81 CLR 418, 438 (The Court). 53 Ramadan v ACN 098 408 176 Pty Ltd [2017] SASC 63, [19], [56] (Judge Dart). -- 26 of 48 -- [2023] SASCA 91 The Court 23 [Plaintiff’s Counsel]: No, it's not a fact in issue. Well I think is it a fact in issue, I'm not sure. [Respondents’ Counsel]: Well it comes as a surprise to me, I had no idea it was going to be said that the [2008 Loan] documents were forgeries. I didn't know that was going to be said at all. [Plaintiff’s Counsel]: We've pleaded - I think by way of reply at para.6. 109 During examination-in-chief, the appellant gave evidence that she had not signed the 2008 Loan. 110 That issue was not explored during cross-examination. 111 The appellant’s evidence during cross-examination was generally that she only became aware of the 2008 Loan in 2009, after her husband moved to Jordan and she received a letter from the 2008 Loan provider, after which she began making payments. 112 It is apparent from the transcript, together with the respondents’ submissions on the question of damages, that the cross-examination of the appellant at the trial was directed to establishing that, over the course of many years, the appellant signed numerous documents at the request of her husband without understanding the contents of those documents. That evidence formed the basis for the respondents’ contention that the respondents did not cause the loss because, even if the 2007 Loan was not entered into, the appellant would have entered into a different loan anyway. 113 That submission was ultimately inconsistent with the appellant’s evidence that, had she understood that the 2007 Loan gave rise to a mortgage over the Woodville Property at such a high rate of interest, she would have gone to her children for assistance, her children would have spoken to her husband and she would never have executed the 2007 Loan. 114 Whilst some circumstantial evidence might suggest that Mr Ramadan was responsible for forging the appellant’s signature, he was not called to give evidence. It would be unusual for the Court to proceed to make a finding of fraud against a non-party to litigation, let alone in circumstances where the issue of fraud was not clearly raised on the pleadings.54 The 2008 Loan records that the appellant’s signature was witnessed by a Mr Antoniadis, but he was not called to give evidence either. That occurred even though the trial judge said during the course of the appellant’s opening that his evidence was relevant to the issue of forgery of the appellant’s signature on the 2008 Loan. 54 To allege fraud is a serious matter and it must be distinctly alleged and particularised, and clearly proved, Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486, [25]-[26] (French CJ, Gummow, Hayne and Kiefel JJ). The appellant’s reply dated 25 January 2016 did not go so far as to allege fraud, only that Mrs Ramadan had not signed the agreement. -- 27 of 48 -- [2023] SASCA 91 The Court 24 115 Indeed, even though the respondents are now relying on the appellant’s evidence that the 2008 Loan documents were not signed by her, this remains a case where the Court cannot proceed on the basis that forgery is an admitted fact.55 The way in which the issue was ventilated at trial is markedly different from the way in which it is now sought to be deployed on appeal. 116 The fact that the issue of forgery was not ventilated at trial or raised in the respondents’ submissions, let alone in the way now contended, suggests that the interests of “finality and justice” are against this Court entertaining a finding of forgery for the first time on appeal.56 117 It is too late to agitate forgery in this way. It is neither necessary nor appropriate to do so. Because there are such powerful reasons for declining to permit the issue of forgery to be agitated on appeal it would be inappropriate to address whether it can be made out, or its causal consequences.57 118 Accordingly, it is not appropriate to address whether the fraud which is now relied on could be said to be immaterial, so far as the respondents are concerned, to the transactions on which the appellant relies, being the burden of the 2007 Loan, minimised by the 2008 Loan,58 or whether the postulated fraud of Mr Ramadan was a superseding cause or novus actus interveniens or, by contrast, whether the respondents’ unconscionable conduct should still be regarded as a cause in law of the appellant’s loss because there is “no reason in common sense, logic or policy for refusing to so regard it”.59 119 This final ground of the cross-appeal should be dismissed. The appeal grounds 120 The appellant has established that she suffered loss and damage “by” the unconscionable conduct of the respondents. It follows that she is entitled to damages under s 12GF of the ASIC Act. As stated earlier, the grounds of appeal raise two issues which the appellant says inappropriately limited her award. It is necessary to consider each in turn. 55 Coulton v Holcombe (1986) 162 CLR 1, 7-11 (Gibbs CJ, Wilson, Brennan and Dawson JJ). Cf, O’Brien v Komesaroff (1982) 150 CLR 310, 319 (Mason J): “The facts are not admitted nor are they beyond controversy. The consequence is that the appellant’s case fails at the threshold. They cannot argue this point on appeal; it was not pleaded by them nor was it made an issue by the conduct of the parties at the trial.” 56 Coulton v Holcombe (1986) 162 CLR 1, 11 (Gibbs CJ, Wilson, Brennan and Dawson JJ). 57 Cf, Prince Alfred College Inc v ADC (2016) 258 CLR 134, [103] (French CJ, Kiefel, Bell, Keane and Nettle JJ) where, in a case involving an application for an extension of time, the absence of evidence rendered it “preferable … not to make a finding” about causation. 58 Bank of South Australia Limited v Ferguson (1998) 192 CLR 248, 258-259 [19]-[20]. 59 March v E & MH Stramare Pty Ltd (1991) 171 C.L.R. 506, 518-519 (Mason CJ). -- 28 of 48 -- [2023] SASCA 91 The Court 25 Appeal ground 1: the appellant’s failure to seek contribution from her husband for payments made under the 2008 Loan 121 The appellant contends that the trial judge erred in awarding damages in the amount of only 50 per cent of the payments made under the 2008 Loan. The trial judge reduced the award in respect of the payments made under the 2008 Loan on the basis that the appellant had a right of contribution against her husband. 122 Before considering this ground it is first helpful to consider a summary of the trial judge’s reasons on this aspect of the award. The reasoning of the trial judge in awarding 50 per cent of payments made under the 2008 Loan 123 The trial judge found that both respondents were liable pursuant to s 12CB of the ASIC Act and proceeded to calculate damages in accordance with s 12GF.60 124 The trial judge found that the appellant made payments in respect of the 2008 Loan in the amount of $245,004 and he appears to have found that those payments constituted recoverable loss. He then found that the appellant’s loss should be reduced to reflect that she had a right to pursue contribution from her husband but she had failed to do so. 125 The appellant’s right to claim equitable contribution from her husband for 50 per cent of the payments made under the 2008 Loan arose because he was a co-obligor.61 The trial judge concluded that, in those circumstances, to award the appellant the full amount of the payments made under the 2008 Loan would be to overcompensate her. The relevant passage of the trial judge’s reasons is as follows:62 As the applicant and her husband were joint borrowers, they had joint obligations in respect of the payment of the mortgage. After the applicant’s husband left the country in 2009 he did not make any further contributions to payment of the Ezy Mortgage mortgage. He had been responsible for payment of the mortgage up until the time he left the country. The applicant had a right to claim contribution from her husband, as a co-obligor in respect of the payments she made. She appears not to have done so. In the circumstances, it is not appropriate to say that the applicant has suffered the full loss in respect of the payments made to Ezy Mortgage. It is not appropriate to inflate her damages by reason of her failure to look to her husband for a contribution to the mortgage payments. 60 Ramadan v ACN 098 408 176 Pty Ltd (Supreme Court of South Australia, Judge Dart, 10 December 2020), [17]. 61 In relation to the doctrine of equitable contribution, the trial judge referred to the Friend v Brooker (2009) 239 CLR 129, [38]-[39] (French CJ, Gummow, Hayne and Bell JJ). 62 Ramadan v ACN 098 408 176 Pty Ltd (Supreme Court of South Australia, Judge Dart, 10 December 2020), [30]-[31]. See also [32]ff. The “EZY Mortgage” is referred to in this judgment as the “2008 Loan”. -- 29 of 48 -- [2023] SASCA 91 The Court 26 (Emphasis added) 126 The determination of this ground requires a consideration of the final two sentences emphasised in this extract from the trial judge’s reasons. Those sentences form the basis of this ground of appeal and give rise to two questions. 127 The first question is whether the appellant “suffered loss” in the amount of the payments that she made under the 2008 Loan (that is, the sum of $245,004). On the findings of the trial judge, the answer to that question is straightforward. If the trial judge was satisfied that the appellant was out of pocket in relation to the 2008 Loan to the extent of $245,004, the question is whether, for the purposes of an award made under the ASIC Act, there is any reason not to treat the full amount as loss which sounds in damages. 128 The second question is whether the appellant’s failure to look to her husband for contribution to the mortgage payments must be taken into account when assessing her entitlement to damages. The determination of this second question turns on whether the right of a claimant to bring a claim against a non-party must be taken into account when calculating an award of damages for contravention of the prohibition on unconscionable conduct under the ASIC Act. The issue commences with causation, that is, whether the loss suffered was caused by the unconscionable conduct. There is a further issue whether the availability of a contribution claim limits the award or turns on considerations akin to mitigation at common law. 129 For the purposes of determining this appeal ground it is not necessary to consider the equitable doctrine of contribution, nor the merits of any claim that the appellant may have had against her husband. It may be assumed that the appellant had a good claim against her husband or his deceased estate. How is failure to seek contribution from a third party relevant to the assessment of damages under s 12GF of the ASIC Act? 130 The starting point is the words of the statute. The appellant’s entitlement to damages for loss suffered by reason of the unconscionable conduct of the respondents arises pursuant to s 12GF:63 12GF Actions for damages (1) A person who suffers loss or damage by conduct of another person that contravenes a provision of Subdivision C (sections 12CA to 12CC), Subdivision D (sections 12DA to 12DN) or Subdivision DA (sections 12DO to 12DZA) may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention. (1A) Subsection (1) has effect subject to section 12GNA. 63 The prohibition on unconscionable conduct appears in s 12CB of the ASIC Act. -- 30 of 48 -- [2023] SASCA 91 The Court 27 Note: Section 12GNA may limit the amount that the person may recover for a contravention of section 12DA (Misleading or deceptive conduct) from the other person or from another person involved in the contravention. (1B) Despite subsection (1), if: (a) a person (the claimant) makes a claim under subsection (1) in relation to: (i) economic loss; or (ii) damage to property; caused by conduct of another person (the defendant) that was done in contravention of section 12DA; and (b) the claimant suffered the loss or damage: (i) as a result partly of the claimant’s failure to take reasonable care; and (ii) as a result partly of the conduct referred to in paragraph (a); and (c) the defendant: (i) did not intend to cause the loss or damage; and (ii) did not fraudulently cause the loss or damage; the damages that the claimant may recover in relation to the loss or damage are to be reduced to the extent to which the court thinks just and equitable having regard to the claimant’s share in the responsibility for the loss or damage. Note: Subdivision GA also applies proportionate liability to a claim for damages under this section for a contravention of section 12DA. (2) An action under subsection (1) may be commenced within 6 years after the day on which the cause of action that relates to the conduct accrued. 131 The application of s 12GF(1) appears straight forward: “[i]f the causal link between injury and contravention is established, the measure of the compensation for which the section provides, and to which the person bringing the action is entitled, is the amount of the loss or damage sustained, not some lesser amount”.64 132 There are four ways in which a respondent’s liability for damages under the ASIC Act may be reduced, whether by the conduct of the party bringing the claim or due to the conduct or liability of a third party. As will be seen, in cases concerning contraventions against the prohibition on unconscionable conduct, the statute constrains the capacity of a contravening party to reduce the losses caused by the wrongdoing. 133 The first way in which liability for damages under s 12GF of the ASIC Act may be reduced is by a form of contributory negligence, whereby s 12GF(1B) allows the Court to take into account contributory negligence, that is a failure by 64 I & L Securities v HTW Valuers (2002) 210 CLR 109, [50] (Gaudron, Gummow and Hayne JJ). -- 31 of 48 -- [2023] SASCA 91 The Court 28 the claimant “to take reasonable care”. That issue was not pleaded and did not feature at the trial. In any event, the application of that sub-section is limited to losses arising from a contravention of the prohibition on misleading and deceptive conduct under s 12DA of the ASIC Act.65 Accordingly, contributory negligence cannot be relied on to reduce the payments made under the 2008 Loan which were incurred by reason of unconscionable conduct. 134 The second way in which a wrongdoer’s liability for damages may be reduced is under Subdivision GA of the ASIC Act, which establishes a regime of proportionate liability. It is for the party relying on the proportionate liability provisions, usually the respondent, to properly plead reliance on them.66 When that is done, the effect is that the liability of each wrongdoer to pay damages is apportioned according to the extent of that wrongdoer’s responsibility for the loss or damage. Where the proportionate liability regime applies, it is incumbent on the party bringing the claim to join all wrongdoers or risk not recovering the whole of the loss sustained.67 The risk that one of the wrongdoers is insolvent or impecunious falls on the claimant. However, under the ASIC Act, as with contributory negligence, the proportionate liability regime only applies to claims arising from misleading and deceptive conduct.68 It cannot be relied on in this case. 135 The third way in which a wrongdoer’s liability for damages may be reduced, or at least offset, is by seeking contribution from another wrongdoer, who may or may not be a party to the action. The right of contribution may arise in equity or under statute, though not the ASIC Act. In South Australia, contribution is governed by the Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA) (Law Reform Act). The Law Reform Act enables a person who is liable in damages for harm suffered by another to recover contribution from a third person who is also liable in damages for the same harm.69 136 Where proportionate liability is not available and a respondent seeks to rely on contribution, the risk that a concurrent wrongdoer is insolvent or impecunious falls on the person exercising the right to seek contribution. It was for the respondents to join any party from whom they might seek contribution. This was foreshadowed by the trial judge at the hearing relating to damages: His Honour: There could have been any number of extra parties in this case. There could have been Ballsam, obviously. There could 65 ASIC Act, s 12GF(1B)(a); ABN AMRO Bank NV v Bathurst Regional Council (2014) 309 ALR 445, [1576]-[1579], [1582]-[1590] (the Court) approved in Selig v Wealthsure Pty Ltd (2015) 255 CLR 661. 66 Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd (2007) 244 ALR 552, [31] (Middleton J) cited with approval by the Court in ABN AMRO Bank NV v Bathurst Regional Council (2014) 309 ALR 445, [1584]. 67 Hunt & Hunt v Mitchell Morgan Pty Ltd (2013) 247 CLR 613, [10] (French CJ, Hayne and Kiefel JJ). 68 See s 12GP(1) of the ASIC Act. See also ABN AMRO Bank NV v Bathurst Regional Council (2014) 309 ALR 445, [1576]-[1579], [1582]-[1590] (the Court) approved in Selig v Wealthsure Pty Ltd (2015) 255 CLR 661. 69 Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA) ss 3, 6. -- 32 of 48 -- [2023] SASCA 91 The Court 29 have been the husband and there could have been your solicitor. They could all potentially have been parties. [Respondent’s Counsel]: We haven't made any of them parties … because there is no loss and that's what I'm coming to here. It’s bizarre but the reason it’s bizarre is that there is no loss. As a result of anything that's happened here, there is no loss to the plaintiff. 137 No contribution was sought by the respondents. There is no issue regarding contribution in this case. The respondents’ liability cannot in this case be reduced on the basis of the statutory analogue of contributory negligence, or by reason of proportionate liability, or because the respondents may have a claim for contribution. 138 The fourth way in which an award of damages may be reduced is where the contravening conduct is not a cause of part or all of the loss. As earlier discussed, damages under s 12GF are not recoverable for loss that is not caused “by” the contravening conduct. 139 In this Court, however, the appellant suggested that the award of 50 per cent of payments made by the appellant resulted from the finding of the trial judge that the failure to seek contribution amounted to a failure to mitigate. The corollary of that finding appears to be the premise, which was not stated by the trial judge that, to the extent that loss is attributable to the appellant’s failure to mitigate, it cannot be claimed from the respondents. 140 Accordingly, it is not suggested that the mere fact that the claimant may have a right of contribution will limit the award. The limitation is said to arise because of the claimant’s failure to pursue her right of contribution. 141 As explained earlier, while the common law concept of mitigation may assist when attributing responsibility for losses under the ASIC Act, any enquiry into mitigation must be conducted through the prism of s 12GF. That requires considering whether loss was caused “by” the contravening conduct. Should the appellant’s failure to look to her husband for a contribution to the mortgage payments be taken into account in assessing her damages? 142 The first issue is whether it was open to the trial judge to find that the appellant failed to mitigate, given the way the case was pleaded and conducted. Was it open for the trial judge to consider mitigation? 143 A party must plead issues with sufficient clarity “to define the issues for decision” and to afford an opposing party the opportunity of meeting the case against that party.70 A corollary of that principle is that a court ought not generally 70 Banque Commerciale SA, En Liquidation v Akhil Holdings Limited (1990) 169 CLR 279, 286 (Mason CJ and Gaudron J). -- 33 of 48 -- [2023] SASCA 91 The Court 30 make a finding on a ground which has not been pleaded and that person has not had an opportunity to address.71 144 The respondents’ pleadings did not raise a failure to mitigate, let alone the failure to seek to enforce a right to equitable contribution. 145 In the absence of a proper pleading of a failure to mitigate by the respondents, the trial proceeded on the basis that the appellant was not put on notice of any contention that her damages might be reduced as a consequence of her failure to bring a claim against her husband. That conclusion is reinforced by the absence of evidence or cross-examination on the topic of a failure by the appellant to pursue contribution rights against her husband. 146 The closest this issue came to being raised before the trial judge occurred at the hearing in relation to the appropriate remedy and was as follows:72 His Honour: Before the unconscionable transaction she had no obligation to make monthly payments for anybody. Then we have the transaction and then she has got an obligation. That is the plaintiff’s position. It’s complicated by the fact that the obligation to make the payments was joint; that her husband was equally liable for the transaction vis-à-vis the husband is not unconscionable. There are all of those things that go in the mix. 147 There was no contention by the respondents that the appellant’s failure to seek contribution from her husband was relevant to the assessment of damages. The respondents’ submissions at trial were directed to whether the appellant made the payments against the 2008 Loan or whether these were made by other members of her family. This formed the basis of the respondents’ contention that the appellant could not be said to have suffered loss.73 148 The reduction in the appellant’s award of damages on a basis not argued by the parties contravenes “the fundamental principle that no man ought to be put to loss without having a proper opportunity of meeting the case against him” which requires that “pleadings should state with sufficient clearness the case of the party whose averments they are”.74 71 Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300, 308 (Brennan J). 72 Transcript of Proceedings, Ramadan v ACN 098 408 176 Pty Ltd (Supreme Court of South Australia, Judge Dart, 20 May 2020), T78.32-T79.5, with emphasis added. See also Transcript of Proceedings, Ramadan v ACN 098 408 176 Pty Ltd (Supreme Court of South Australia, Judge Dart, 21 March 2016), T290. 73 Ramadan v ACN 098 408 176 Pty Ltd (Supreme Court of South Australia, Judge Dart, 10 December 2020) [36]-[41]. 74 Gould v Mount Oxide Mines Ltd (In liq) (1916) 22 CLR 490, 517 (Isaacs and Rich JJ) cited in Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486, [26] (French CJ, Gummow, Hayne and Kiefel JJ). -- 34 of 48 -- [2023] SASCA 91 The Court 31 149 Respectfully, it was not open for the trial judge to entertain this issue as a basis to reduce the award, whether on the basis that it represented a failure to mitigate or otherwise. 150 The respondents now contend that the award of only 50 per cent of the payments was open to the trial judge because it was proffered by the appellant in the court below as an alternative basis upon which damages might be assessed. The transcript from the final day of the trial in 2016 shows that the appellant had suggested that her ‘fall-back position’ may involve an award of only 50 per cent of the payments made to take into account that her husband was jointly liable under the mortgage. This was put without abandoning the appellant’s primary contention that she was entitled to the whole of the payments made toward the 2008 Loan. 151 In the course of addressing the fall-back position, counsel for the appellant (plaintiff in the court below) referred to the case of Elkofairi v Permanent Trustee Co Ltd.75 In that case a husband and wife entered into a loan for $750,000, secured by a mortgage over the family home. The New South Wales Court of Appeal found that there was a failure to explain to the wife, who had received little education and had little understanding of English, adequately and accurately the nature of the loan and her obligation as a co-principal debtor. Of the $750,000 obtained under the loan, $469,000 was applied to discharge an existing mortgage over the family home to which the husband and wife were co-principal debtors. The balance of the monies ($281,000) appears to have been used by the husband for business activities. 152 The Court set aside the later loan and mortgage insofar as it concerned the wife. However, as the wife had received the benefit of a portion of the loan, it could not be said that she was a volunteer for the whole of the transaction. Although the wife had a joint interest in the home and the relevant loans, she was required to give credit to the extent that it equated to half of the earlier mortgage. As Beazley JA explained:76 In my opinion, credit should be given in respect of the St George mortgage. That mortgage has not been impugned and the ANZ mortgage must therefore be taken to have been subsumed by it. However, the appellant's interest should not to be taken to be the equivalent of a 100% interest in the relevant benefit. Conceptually, her interest is in one half of the benefit, as it derives from her interest as joint tenant with Mr Elkofairi in the Castle Hill property. That she is 100% liable under that encumbrance is not to the point. If the jointure were severed, her position vis a vis her husband, as the respondent must be taken to know, is effectively a half interest. That, therefore, is the benefit which she must bring to account, 75 Elkofairi v Permanent Trustee Co Ltd (2002) 11 BPR 20,841 (Beazley JA, with whom Santow JA and Campbell AJA agreed). On the question of unconscionability, see also, for example, Stubbings v Jams 2 Pty Ltd (2022) 399 ALR 409; Ramadan v ACN 098 408 176 Pty Ltd (2018) 129 SASR 584 (Blue J, with whom Kourakis CJ and Parker J agreed); Montesa Investments Pty Ltd v Certane Ct Pty Ltd [2022] SASC 43; De Pasquale v ASCF Managed Investments Pty Ltd [2021] SASC 21. 76 Elkofairi v Permanent Trustee Co Ltd (2002) 11 BPR 20,841, [85] (Beazley JA, with whom Santow JA and Campbell AJA agreed). A similar approach was recently taken in Commonwealth Bank of Australia v Dinh (No 2) [2019] WASC 456, [731]-[734] (Archer J), although Elkofairi was not cited. -- 35 of 48 -- [2023] SASCA 91 The Court 32 so as to discharge her, but not her husband, from the mortgage. That sum should bear interest. I accept that a rate of 7.5% should be applied. 153 This “credit” was described by Santow JA as being necessary to avoid an “unwarranted benefit” to the wife and a “windfall benefit” to the husband.77 His Honour relied on the authorities which recognise that when the equitable remedy of rescission is ordered, it may be made conditional on the repayment of any unwarranted benefit so as to ensure that the remedy is both “no more than the minimum necessary” and designed to achieve “practical justice”.78 As his Honour explained: The question of assessing Mrs Elkofairi’s “unwarranted benefit” is thus important. The combined benefit that Mr and Mrs Elkofairi received from the Respondent’s mortgage loan, owning their home as joint tenants, was the discharge of the mortgage owed to ANZ bank for the home loan in the amount $469,000. For reasons elaborated below I consider that the individual benefit that Mrs Elkofairi received, from the joint loan, and thus from an order discharging her liability under it, would only be 50% of that discharge figure for the home loan portion. Mr Elkofairi would obtain the remaining half of that benefit. He would thus receive a windfall benefit in that amount (half of $469,000) if Mrs Elkofairi, as a condition of her relief, had to pay the whole $469,000. 154 In the course of discussing the doctrine of equitable contribution as between the wife and her husband, Santow JA noted that in In re Pavlou, Millet J (as he was) had taken the view in a bankruptcy case that, for the purposes of an equitable accounting, no distinction should be made between a beneficial tenancy in common and a beneficial joint tenancy.79 The wife’s interest was, accordingly, to be treated as equivalent to one half of the discharge figure on the mortgage in which she held a joint interest. 155 As a result, it was a condition of setting aside a loan obtained as a result of unconscionable conduct, that the wife was required to give credit for $234,500, being one half of the $469,000 applied to discharge the earlier mortgage. The effect of the relief was to place the wife in the position she would have been but for the unconscionable conduct. 156 The present case is readily distinguishable, as it is not concerned with moulding relief associated with setting aside a transaction in equity. More fundamentally, however, the repayments which are the subject of the claim for damages were made from the appellant’s own funds, or at the least must be regarded in that way given the unchallenged finding of the trial judge. Moreover, they were paid toward a loan debt which was incurred to repay a loan from which the appellant derived no benefit. That is, the entirety of the 2007 Loan proceeds 77 Elkofairi v Permanent Trustee Co Ltd (2002) 11 BPR 20,841, [98]-[106] (Santow JA with whom Campbell AJA agreed). 78 Elkofairi v Permanent Trustee Co Ltd (2002) 11 BPR 20,841, [98]-[100] (Santow JA with whom Campbell AJA agreed), citing Vadasz v Pioneer Concrete (SA) Pty Ltd (1995) 184 CLR 102, 114; Maguire v Makaronis (1996) 188 CLR 449; Westpac Banking Corporation v Paterson (2001) 187 ALR 168, [39]-[41]; Esanda Finance Corporation Ltd v Tong (1996) 41 NSWLR 482. 79 In re Pavlou [1993] 1 WLR 1046 (Millett J), referred to favourably by Sheller JA in Ryan v Dries [2002] NSWCA 3, a case concerning orders pursuant to s 20 of the Property (Relationships) Act 1984 (NSW). -- 36 of 48 -- [2023] SASCA 91 The Court 33 were used by the appellant’s husband for “business activities”. It has never been suggested that the appellant received any benefit from these or the 2007 Loan. The appellant’s case was that, had she understood the terms of the 2007 Loan, she would not have entered into it. It will be recalled that the family home had been “debt free”. 157 Elkofairi v Permanent Trustee Co Ltd provides no support for the suggested fall-back position, nor does it support the basis on which the trial judge reduced the appellant’s award. 158 Whilst the absence of a proper pleading or argument from the respondents at trial suggests that the trial judge ought not to have reduced the award as he did, whether on the basis of a failure to mitigate or otherwise, it is appropriate to briefly address the merit of the contention that the appellant’s failure to seek to enforce a right against her husband should operate to reduce her entitlement to damages. 159 In circumstances where no proportionate liability regime applies, there is scope for some analogy with the common law approach to “solidary” liability to be applied to the recovery of damages under the ASIC Act. 160 Under “solidary” liability, each concurrent wrongdoer is said to be liable “in solidum”. Solidary liability may also be described as joint and several liability. That latter term has been said to be confusing because the terms “joint”, “several” and “joint and several” describe different types of concurrent liability. In each case the liability of concurrent wrongdoers is solidary. 161 Where there is more than one wrongdoer, the common law principle of solidary liability enables a plaintiff to recover all loss from one defendant, regardless whether there are other wrongdoers and whether the defendant’s responsibility for the plaintiff’s loss, when evaluated in the context of the liability of those other wrongdoers, is not significant. The plaintiff is therefore at liberty to recover all loss from the defendant and it is a matter for that defendant to pursue other wrongdoers, relying upon its right to contribution, whether in equity or under statute, in order to minimise its ultimate exposure for the plaintiff’s loss. 162 Whilst the risk of the impecuniosity or insolvency of a wrongdoer lies with a defendant who attempts to pursue other wrongdoers under a common law regime of solidary liability, under a statutory regime of proportionate liability that risk is usually thrown onto a plaintiff. 163 In Bebonis v Angelis the NSW Court of Appeal observed that, as a general principle, a party with remedies against two or more persons for the same loss may pursue any or all of those remedies in whatever order they please, subject to giving -- 37 of 48 -- [2023] SASCA 91 The Court 34 credit for any recoveries made and provided that, in total, those recoveries do not exceed the loss sustained:80 The construction accepted by the trial judge is contrary to the general principle that a party with remedies against two or more persons for the same loss may pursue any or all of those remedies in whatever order he pleases, subject to giving credit for any recoveries provided that in total they do not exceed his loss. In The Liverpool (No 2) [1963] P 64, the Court of Appeal rejected an argument that the Harbour Board was bound to resort to a statutory remedy against the owners of a vessel sunk as the result of the defendant's negligence before proceeding against the defendant. Harman LJ said at (82-83): “… this case, in our judgment, has nothing to do with the duty to mitigate damages. It concerns the board's legal rights, and no duty rests on it at the demand of a tortfeasor to satisfy part of the damages by resorting to another tortfeasor; still less by resorting to an innocent party made liable merely by statute.” 164 That recovery principle, as applied to joint wrongdoers, is separate and distinct from any principle of mitigation, and it supports the proposition that the appellant is not to be penalised for choosing to pursue only the respondents in respect of the loss she suffered as a result of the unconscionable conduct of the respondents and her husband. 165 The appellant’s written submissions relied on various authorities regarding the principle of mitigation at common law to contend that any duty or obligation of mitigation did not require the appellant to seek to enforce rights against her husband. In particular, the appellant directed the Court to the principle that a claimant is not “bound to nurse the interests” of the respondents,81 nor to take the risk of uncertain or expensive litigation against a third party.82 As was said by Handley JA in Bebonis v Angelis, in a case where the purchasers were the plaintiffs:83 The purchasers were “bound” to take reasonable steps to mitigate their damage and cannot recover for any loss they should have avoided. However, an innocent party is not bound “to embark on a complicated and difficult piece of litigation against a third party”. 166 In relation to a claim by the appellant against her husband, the appellant also highlighted a number of factual matters complicating any evaluation as to whether the appellant’s conduct was reasonable in connection with hypothetical litigation against her husband, including her age, that her husband was in Jordan and that it 80 Bebonis v Angelis (2003) 56 NSWLR 127, [32] (Handley JA, with whom Heydon and Beazley JJA agreed). 81 Harlow & Jones v Panex International [1967] 2 Lloyd’s Reports 509, 530 (Roskill J). 82 Segenhoe Ltd v Akins (1990) 29 NSWLR 569, 582 (Giles J) cited with approval in Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1998) 192 CLR 603, [134] (Hayne J). 83 Bebonis v Angelis (2003) 56 NSWLR 127, [99] (Handley JA, with whom Heyden and Beazley JJA agreed) citing Pilkington v Wood [1953] Ch 770, 777; Walker v Geo H Medlicott & Son [1999] 1 WLR 727, 743. -- 38 of 48 -- [2023] SASCA 91 The Court 35 would have been difficult (if not impossible) to enforce a judgment in that jurisdiction.84 167 The legal principles to which the appellant referred, together with the practical difficulties associated with pursuing any claim against her husband, or his estate,85 serve only to reinforce the proposition that the trial judge erred in awarding only half of her loss. 168 Even if mitigation had been in issue at the trial, there was in this case no proper basis for a finding that the appellant’s award should be reduced on the basis that she could or should have pursued her husband for half of her loss. 169 Ultimately, the appellant was entitled to direct her claim to only two of the wrongdoers responsible for her loss, and it was a matter for those wrongdoers to pursue the appellant’s husband for contribution if they wished to embark on what appears to have been risky and uncertain litigation. 170 Appeal ground 1 should be allowed. The appellant’s award of damages should be increased to $245,004 and it is necessary to hear from the parties regarding the precise amount which, inclusive of interest, should be awarded. Appeal ground 2: the loss of the proprietary interest in the Woodville Property 171 This appeal ground relates to the transfer of the Woodville Property from the appellant and her husband to their grandson in September 2016. Prior to the transfer the appellant and her husband held the property as joint tenants, albeit subject to a mortgage under the 2008 Loan. The proceeds from the transfer of the Woodville Property were applied to discharge the 2008 Loan. 172 The issue for determination is whether the appellant is entitled to an award of damages on account of the loss of the value of her proprietary interest in the Woodville Property which it is said was caused by the respondents’ unconscionable conduct. The appellant also contends that this loss includes the loss of her survivorship interest such that she is entitled to damages equivalent to the entire value of the Woodville Property. Trial judge’s reasons 173 Following the conclusion of the trial in 2016, there was a further hearing in May 2020 for the parties to address the Court on the appropriate remedy.86 The 84 Jordan and Australia are not parties to any bilateral or multilateral treaties providing for the reciprocal enforcement of foreign judgments. 85 Though it was suggested that there may be less difficulty suing the deceased husband’s estate in Australia, there was little evidence about its nature or size. 86 The delay between the trial on liability on the hearing on remedy arose from the liability decision being appealed to the Full Court. -- 39 of 48 -- [2023] SASCA 91 The Court 36 appellant had by then filed further written submissions concerning her suggested remedies in advance of the hearing. 174 By those written submissions, the appellant contended at trial that, but for the respondents’ unconscionable conduct, the appellant would not have sold the Woodville Property to her grandson in September 2016. The appellant contended that the appropriate remedy was the value of the Woodville Property (said to be $700,000 as at August 2019) or, in the alternative, half that amount, being $350,000. The appellant’s claim for the total value of the Woodville Property was based on the appellant having held her interest as a joint tenant, meaning that upon the death of her husband in 2017, and but for the transfer of the Woodville Property to her grandson in 2016, her right of survivorship would have resulted in her becoming the sole owner. 175 At the hearing in May 2020, the grandson gave viva voce evidence regarding, among other matters, the transfer of the Woodville Property. He also filed affidavit evidence recording certain payments he made against the 2008 Loan. 176 The transfer of the Woodville Property was dealt with by the trial judge when addressing the quantum of damages in his reasons of 10 December 2020 in the following way:87 At the conclusion of the trial the applicant claimed two separate amounts. They were damages in respect of: 1. The payment of the principal due to Ezy Mortgage as at 31 December 2015, being the sum of $319,284.30. 2. Repayment of the amount of $222,264.00, being the interest and principal payments made by the applicant, her son and grandson, from February 2009 until December 2015. … The first head of damages claimed relates to the unpaid principal owing to Ezy Mortgage. As at the date of the transfer of the property, the amount was $314,139.12. The applicant and her husband agreed to transfer the property to the grandson on the basis that he became responsible for dealing with the debt to Ezy Mortgage. He did so by borrowing from another entity and paying out the Ezy Mortgage debt in full. The transfer to the grandson was not an arms-length commercial transaction for proper value. It was simply a family agreement. The Ezy Mortgage debt being discharged by reason of the agreement means that the applicant no longer had an obligation to Ezy Mortgage. In the circumstances, the applicant suffered no loss. 87 Ramadan v ACN 098 408 176 Pty Ltd (Supreme Court of South Australia, Judge Dart, 10 December 2020), [25], [33]-[34]. -- 40 of 48 -- [2023] SASCA 91 The Court 37 177 As stated in the trial judge’s reasons, at the conclusion to the trial in 2016 the appellant had claimed the outstanding principal due under the 2008 Loan, together with the interest and principal payments earlier made by the appellant. 178 That claim changed as a result of the transfer of the Woodville Property to the appellant’s grandson, though this was not in evidence at the time of the trial in 2016. In the trial judge’s reasons delivered on 10 December 2020 he did not allow for any loss on the transfer of the appellant’s interest in the Woodville Property on the basis that the appellant “suffered no loss” by reason of that transfer. The absence of loss was said to arise from the fact that the transfer was a family transaction and was not made at arms-length. 179 The trial judge confined the award of damages to the repayments made under the 2008 Loan. He identified that repayments had been made in the total amount of $245,004. The trial judge found that the fact that the grandson assisted with making those payments did not detract from the appellant’s loss.88 As mentioned, that finding is not challenged. 180 The trial judge made no allowance in connection with the $314,139.12 balance of the 2008 Loan, which was discharged from the proceeds from the sale of the Woodville Property. In effect, the sum of $314,139.12 was obtained by the appellant and her husband as consideration for transferring their interest in the Woodville Property. 181 The determination of this ground of appeal requires that a finding be made about whether any loss sustained on transfer was caused by the respondents’ unconscionable conduct for the purposes of s 12GF of the ASIC Act. The transfer of the Woodville Property 182 In order to determine whether any loss was suffered, and a causal link established for the purposes of s 12GF, it is necessary to consider the following chronology of events relating to the transfer of the Woodville Property. • January 2007: The appellant and her husband each had an unencumbered interest in the Woodville Property as joint tenants. • July 2007: The 2007 Loan documents were executed by the appellant and her husband, with the appellant’s entry into the 2007 Loan being the result of proved unconscionable conduct. The appellant and her husband each held an interest in the Woodville Property as joint tenants which was then subject to a mortgage in the amount of $300,000 under the 2007 Loan. 88 Ramadan v ACN 098 408 176 Pty Ltd (Supreme Court of South Australia, Judge Dart, 10 December 2020), [36]-[37] citing, as earlier mentioned, The National Insurance Company of New Zealand Limited v Espagne (1961) 105 CLR 569, 597 and Wollington v State Electricity Commission of Victoria (No 2) [1980] VR 91. -- 41 of 48 -- [2023] SASCA 91 The Court 38 • 2008: The appellant and her husband entered into the 2008 Loan and the proceeds of that were applied to discharge the 2007 Loan. The appellant and her husband each held an interest in the Woodville Property as joint tenants subject to a mortgage in the amount of $356,000 under the 2008 Loan.89 • February 2009: The appellant’s husband departed Australia for Jordan and ceased making payments towards the 2008 Loan. The appellant commenced making payments under the 2008 Loan. The appellant and her husband each continued to hold an interest in the Woodville Property as joint tenants subject to a mortgage under the 2008 Loan. • May 2012: The appellant’s grandson obtained a power of attorney from the appellant’s husband. • 2016 (immediately prior to the transfer of the Woodville Property): By this time the appellant had made payments in the amount of $245,004 toward the 2008 Loan.90 The appellant and her husband each held an interest in the Woodville Property as joint tenants subject to a mortgage in the amount of $314,139.12 under the 2008 Loan.91 • September 2016 (transfer of Woodville Property): The appellant’s grandson agreed with the appellant and the appellant’s husband that he would pay the outstanding amount of the 2008 Loan (that is, $314,139.12) and the Woodville Property would be transferred to him.92 The contract for sale also provided that the “reduced price payable for the [Woodville Property] takes into account that the [appellant’s grandson] has been paying principal and interest payments for the [2008 Loan] since 2010, together with legal costs”. The relevant transfer documents were signed by the appellant and the grandson (in both his personal capacity as purchaser and for the appellant’s husband as vendor under power of attorney). The Valuer-General’s valuation of the Woodville Property at the time of the transfer was $620,000.93 In effect, the Woodville Property was realised for the payment of $314,139.12. • September 2016 (immediately following transfer of the Woodville Property): The 2008 Loan was discharged. The appellant and her husband were no longer liable for the balance of the 2008 Loan ($314,139.12). The 89 Ramadan v ACN 098 408 176 Pty Ltd [2017] SASC 63, [19] (Judge Dart). 90 Payments were made by other family members but were attributed to the appellant Ramadan v ACN 098 408 176 Pty Ltd (Supreme Court of South Australia, Judge Dart, 10 December 2020), [36]-[41]. 91 Ramadan v ACN 098 408 176 Pty Ltd (Supreme Court of South Australia, Judge Dart, 10 December 2020), [33]. 92 The grandson financed the purchase of the Woodville Property through a loan from Ballsam Pty Ltd in the amount of $348,366.62. The difference between the amount outstanding on the 2008 Loan and the amount borrowed was applied to pay for stamp duty, conveyancing, and other associated costs for the transfer of the Woodville Property. 93 Ramadan v ACN 098 408 176 Pty Ltd (Supreme Court of South Australia, Judge Dart, 10 December 2020), [9]. The plaintiff resiled from the Valuer-General’s valuation and led evidence from a realtor that the property was worth $510,000 at the time of sale, but on appeal the value was said to be $502,000. -- 42 of 48 -- [2023] SASCA 91 The Court 39 appellant and her husband no longer held any interest in the Woodville Property. • 2016 onwards: The appellant continued to reside at the Woodville Property with her grandson, with no obligation to pay rent. 183 The evidence in 2020 was that, before the death of the appellant’s husband in 2017, he “didn’t really care” what happened to his interest in the Woodville Property. The appellant’s submissions on appeal 184 The respondents’ unconscionable conduct was, it was contended, a cause in law of the need for the 2008 Loan and the appellant incurring liability under that loan. The appellant’s contention was that the transfer of the Woodville Property, and the losses which flowed, were a direct result of her inability to continue financing repayments due on the 2008 Loan. 185 The respondents contended that the transfer of the Woodville Property to the appellant’s grandson for approximately half its market value constituted an intervening event, severing the causal link between the respondents’ unconscionable conduct and the appellant’s loss of her interest in the Woodville Property. Implicit in this submission is the proposition that the appellant’s conduct was so unreasonable that the respondents’ liability for the consequences of entry into the 2007 Loan, and then the 2008 Loan, came to an end. 186 Ostensibly, the appellant’s liability under the 2008 Loan was caused by the respondents’ unconscionable conduct. It follows that there appears to be a causal link between the respondent’s unconscionable conduct and the appellant’s liability under the 2008 Loan. The question raised by this appeal ground is whether the discharge of that liability in 2016, and the consequences of the discharge, can be said to have been caused by the respondents’ contravening conduct for the purposes of assessing damages under s 12GF. There is also a difficult issue in the circumstances of this case regarding the proper assessment of any loss. The loss arising from the transfer of the Woodville Property 187 The appellant’s grandson did not pay the market price for taking the transfer of the property. The appellant’s grandson was only called on to pay the sum of $314,139.12 as consideration for the transfer, and that entire sum went towards the discharge of the 2008 Loan. 188 The appellant contended that the 2016 transfer at the price of $314,139.12 was reasonable because the realisation of the Woodville Property on the open market for $620,000 would, after repaying the $314,139.12 due under the 2008 Loan and the grandson $117,810 (being the monies he had advanced), leave the appellant with around $183,000 in hand and nowhere to live. However, as the appellant has been awarded the full amount of the payments made under the 2008 -- 43 of 48 -- [2023] SASCA 91 The Court 40 Loan, including the $117,810 advanced by her grandson, this analysis is somewhat artificial, at least as regards the assessment of reasonableness as between the appellant and the respondents.94 189 Prior to the transfer of the Woodville Property the grandson had resided in the Woodville Property with his children with no obligation to pay rent. Following the transfer, the appellant continued to reside at the Woodville Property with no obligation to pay rent. 190 The transfer of the property at less than the market value (which the parties were content on appeal to equate to the sum of $502,000), together with what appears to be a right to rent-free occupation, tends to support the finding made by the trial judge that the transaction was not conducted at arm’s-length and formed part of a broader family arrangement. That certainly suggests that the appellant cannot claim the full extent of her claimed loss of proprietary interest. 191 Moreover, in so far as the claim extended to the loss of what was described as the value of the appellant’s “survivorship interest”, the appellant relied on the fact that her husband later died and, as a joint owner, she would have become the sole owner.95 The appellant submitted that the assessment was not confined to the date of the respondents’ wrongful conduct, and extended to losses sustained after breach, or entry into the 2007 Loan and then the 2008 Loan.96 The appellant maintained that the relevant “organising principle” was restitutionary,97 although that was not decisive if fair compensation demanded an alternative approach.98 The appellant also contended that the court ought not judge any of the decisions she made “harshly” when evaluating her claim, having regard to the position in which she was left by reason of the respondents’ unconscionable conduct.99 The appellant 94 See Medlin v State Government Insurance Commission (1995) 182 CLR 1, 11 (Deane, Dawson, Toohey and Gaudron JJ): the assessment of damages was made “in the context of what was reasonable between the plaintiff and the defendant in determining the defendant's liability in damages”. The appellant’s written submissions in relation to the appropriate remedy filed in August 2019 contended that proceeds advanced by the grandson to the appellant to assist with paying the 2008 Loan were also included as consideration for the transfer of the property. This was reiterated on appeal. 95 Re Robertson (1943) 44 SR (NSW) 103, 105 (Roper J). 96 Johnson v Perez (1988) 166 CLR 351. 355-356 (Mason CJ), referring to cases in tort and contract. See also Johnson v Agnew [1980] AC 367 (HL), 400-401 (Lord Wilberforce). 97 Gates v Colonial Mutual Life (1986) 160 CLR 1, 13; Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 1, 116 (Deane J): “the plaintiff should receive the monetary sum which, so far as money can, represents fair and adequate compensation for the loss or injury sustained by reason of the defendant’s wrongful conduct. The application of that general principle ordinarily involves a comparison, sometimes implicit, between a hypothetical and actual state of affairs: what relevantly represents the position in which the plaintiff would have been if the wrongful act … had not occurred and what relevantly represents the position in which the plaintiff is or will be after the occurrence of the wrongful act”. 98 Johnson v Perez (1988) 166 CLR 351, 355-356 (Mason CJ); HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640, 658 [39]; Kizbeau Pty Ltd v WG&B Pty Ltd (1995) 184 CLR 281, 291-296; Wardley Australia Ltd v Western Australia (1992) 175 CLR 514, 525. 99 Banco de Portugal v Waterlow & Sons Ltd [1932] AC 452, 506 (Lord MacMillan), cited in Simonius Vischer & Co v Holt & Thompson [1979] 2 NSWLR 322, 355 (Samuels JA, with whom Moffit P and Reynolds JA agreed). -- 44 of 48 -- [2023] SASCA 91 The Court 41 urged this Court to assess damages as at the date of trial, when all of the relevant facts were known.100 192 On this basis the appellant pressed a claim for the loss of the full value of the Woodville Property. That way of putting the claim, however, ignores her own conduct in selling for less than the market value of the proprietary interest in the Woodville Property before her husband died. Whilst the respondents may have been responsible for the appellant incurring debts associated with the 2007 Loan and the 2008 Loan, and ultimately the need to sell the Woodville Property, they were not responsible for the appellant’s decision to sell for less than the market value. The loss of the market value of the proprietary interest was inextricably bound up in the family arrangement made between the appellant and her grandson. That arrangement was struck before the death of the appellant’s husband and, it would seem, regardless of any potential right of survivorship. It is far from clear that the full implications of this arrangement were made known to the trial judge. The appellant seeks to recover damages for one aspect of that arrangement without bringing to account all of the benefits obtained from it. Whether the issue is framed as one of causation or as a question of what is reasonable as between the appellant and the respondents in the assessment of damages, the respondents are not required to meet this claim. 193 Accordingly, and subject to an issue to be mentioned, this appeal ground should be dismissed. 194 The claim for what was described as the loss of the appellant’s proprietary interest was first made at the May 2020 hearing. Before that hearing the appellant had pressed a claim associated with her liability under the 2008 Loan and the need for her to account for the balance due of $314,139.12 in 2016. 195 The appellant had filed a fifth statement of claim in February 2020 seeking relief in the following terms: Relief claimed … 20.3 An order that the Defendants and or either of them indemnify the Plaintiff for the loss she has suffered: 20.3.1 On account of the loss of her interest in the Property. 100 Citing HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640, 659 [39] and the speech of Lord MacNaghten in Bwlfa & Methyr Dare Steam Collieries (1891) Ltd v Pontypridd Waterworks Co [1903] AC 426, 431: “Why should [the arbitrator] listen to conjecture on a matter which has become an accomplished fact? Why should he guess when he can calculate with the light before him, why should he shut his eyes and grope in the dark?” -- 45 of 48 -- [2023] SASCA 91 The Court 42 20.3.2 For the full amount of past payment of Principal, interest, charges and expenses made by her pursuant to the Loan Agreement, Mortgage, the EZY Mortgage Loans and the EZY Mortgage; and or 20.3.3 For the full amount of the Principal paid owed by her under the EZY Mortgage Loan; 196 The fifth statement of claim was filed following the transfer of the Woodville Property to the appellant’s grandson and before the appellant’s grandson gave evidence at the hearing in May 2020. 197 It can be seen that paragraph 20.3.3 of the pleading merely repeats paragraph 20.3.2, which includes an amount for payment in connection with EZY Mortgage Loans (referred to as the 2008 Loan in this judgment). The amendment to 20.3.3 to substitute “owed” with “paid” reflected that at the time the fifth statement of claim was filed, there was no money owing under the 2008 Loan. 198 During the course of the appeal, senior counsel for the respondent submitted that, before 2018, the appellant’s claim was for the loss of payments made under the 2008 Loan. Following 2018, the claim was made on the basis of alternative claims for the loss of the Woodville Property and the payments made under the 2008 Loan and then, from 2020 onwards, there was a claim for both the loss of the Woodville Property and the payments made under the 2008 Loan. Although counsel for the appellant did not directly address the pleadings or the claims made over time, it was acknowledged that the formulation of the appellant’s claim changed following the discharge of the 2008 Loan. 199 Whilst it is difficult to see how the appellant could claim both the loss of proprietary interest and the repayment made in 2016, in light of the finding already made that is not an issue that needs to be addressed in this case. 200 It will however be necessary to hear from the parties as to whether there is any scope to make a claim based on the repayment made in 2016. The following observations are not conclusions and they are made subject to hearing argument and determining whether any, and if so what, claim can be made. 201 Whilst it could be contended that the respondents remained responsible for the appellant’s liability under the 2008 Loan, and the need for her to account for the balance of $314,139.12, a claim for damages concerning that repayment amount raises issues of some complexity. 202 The complexity arises because the appellant’s husband was a joint owner of the property and also jointly and severally obliged to meet the balance due under the 2008 Loan. He was also a party to the unconscionable conduct associated with entry into the 2007 Loan. The question of loss must be determined through the prism of the terms of the ASIC Act. Damages are payable in respect of loss sustained by reason of the respondents’ contravention. Unlike the damages awarded in respect of the repayments made by the appellant before 2016, this -- 46 of 48 -- [2023] SASCA 91 The Court 43 repayment was not made from the appellant’s resources but from the realisation of a joint asset. 203 The effect of the joint tenancy was that each of the appellant and her husband were seised of the whole of the Woodville Property. It could not be said that each held a proportionate share in the way that tenants in common might:101 For joint tenants, the notion of ‘undivided’ shares is inappropriate. Hence, each joint tenant is said to be seised “pour my et per tout” (“for nothing and for all”), meaning that each has a right shared with the others to the whole property but no individual right to any particular share in it. 204 Whilst a joint tenant may be seised of the whole of the property, “for the purposes of alienation each is conceived as entitled to dispose of an aliquot share”.102 That is to say a joint tenant cannot, without the agreement of the other joint tenants, effect the transfer of the whole property. As was observed in a well-known passage from Professor Butt’s Land Law:103 Strictly speaking, joint tenants do not have proportionate shares in the land. It might therefore be asked how a joint tenant can convert his or her “interest” into a proportionate share held as tenant in common. But for the purpose of severance this logical conundrum is ignored, and a joint tenant is regarded as having a potential share in the land commensurate with that of the other joint tenants. Where there are two joint tenants, that potential share is one-half; where there are three joint tenants, it is one-third; and so on. This potential share the joint tenant can deal with unilaterally during his or her lifetime. By so dealing with it, that share may be “severed” from the other shares and converted into an “aliquot” undivided share held in common, not jointly. In the result, the (former) joint tenant‘s risk of loss through failure to survive the other joint tenants is avoided — but so too, of course, is the prospect of gain through surviving the other joint tenants. 205 The consensual sale of the asset did not sever the jointure. The personal property reflected in the proceeds was also owned jointly.104 As a result, the appellant was not required to meet what was a joint liability from her own funds; she met that liability with joint funds. She cannot be treated as having at that time paid that debt alone. 206 In addition, in this case it is difficult to see why the respondents cannot rely on the fact that a portion of the claim has effectively been met by a joint debtor who, as it turns out, was also involved in their unconscionable conduct. That raises 101 Butt, Land Law (6th ed, Thomson Reuters, 2010), [14.04]. 102 Wright v Gibbons (1949) 78 CLR 313, 330 (Dixon J). 103 Butt, Land Law (6th ed, Thomson Reuters, 2010), [14.58]. The same extract appearing in an earlier edition was cited with approval by the High Court in Trustees of the Property of Cummins v Cummins (2006) 227 CLR 278, [56] (Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ). See also Singh v Kaur Bal (No 2) [2014] WASCA 88, [37] (Murphy JA, with whom Pullin and Newnes JJA agreed). 104 Singh v Kaur Bal (No 2) [2014] WASCA 88, [36] (Murphy JA, with whom Pullin and Newnes JJA agreed) citing Re Allingham [1932] VLR 469 at 472; Public Trustee v Grivas [1974] 2 NSWLR 316 at 320; Abela v Public Trustee [1983] 1 NSWLR 308 at 314; Scott v Scott [2009] NSWSC 567 [59]-[60]; Ex parte Railway Commissioners for NSW (1941) 41 SR (NSW) 92 at 95; Re Commonwealth Bank of Australia [2009] NSWSC 81 ; (2009) 14 BPR 26,819 [13]-[15]. See also Butt, Land Law (6th ed, Thomson Reuters, 2010), [14.72]. -- 47 of 48 -- [2023] SASCA 91 The Court 44 a different issue to the one addressed on the earlier appeal ground, namely, whether the appellant should have her claim reduced because she failed to pursue a right of contribution against her husband. The issue which is now raised concerns the fact that the appellant’s husband must be taken to have met a portion of the outstanding principal of $314,139.12. On the face of it, a contribution made by a joint debtor and wrongdoer towards the outstanding principal does not constitute a loss on the part of the appellant. It was not a payment by the appellant or by a third party on her behalf. 207 Equally, it is difficult to regard the appellant as having sustained no loss at all. But for the repayment in 2016, the appellant would have been exposed to the whole of the outstanding balance due under the 2008 Loan. Whilst the appellant entered into the transfer as part of a family arrangement, this was brought about by an inability to keep meeting repayments without assistance under a loan which was caused in law by the respondents’ unconscionable conduct. On the face of it, the appellant has lost, it would seem, her interest in the joint fund produced by the sale of the Woodville Property. 208 The implications associated with these issues were not addressed in argument on appeal. Accordingly, it is appropriate to dismiss appeal ground 2, subject to hearing from the parties as to whether there is scope for the appellant to make a claim associated with the discharge of the outstanding balance of the 2008 Loan and, if so, the amount of that claim. Orders 209 The following orders should be made: 1. The appeal is allowed, and the award of damages made by the trial judge is set aside and the amount of $245,004, in addition to interest, is substituted. 2. The second respondent is granted an extension of time to bring the cross-appeal, but the cross-appeal is dismissed. 210 It will be necessary to hear from the parties regarding interest and whether there is any scope to make any claim based on the repayment made in 2016. 211 The parties must be heard on the question of costs. -- 48 of 48 --