Australian Securities and Investments Commission v Dover Financial Advisers Pty Ltd

The Australian Securities and Investments Commission (ASIC) brought proceedings against Dover Financial Advisers Pty Ltd, alleging that the company had engaged in false, misleading or deceptive conduct in contravention of various sections of the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth). The proceedings were heard in the Federal Court of Australia. The key legal issues that the court had to decide involved whether the representations made by Dover constituted conduct that misled a class of persons or separate individuals, and if the latter, whether it was necessary to prove that the individuals were misled. Additionally, the court had to distinguish between statements of fact and opinion and determine whether the conduct contravened the relevant sections of the Corporations Act and the ASIC Act.

The court found that the provision of the Client Protection Policy to clients, in conjunction with statements of advice, constituted conduct by Dover that contravened s 1041H of the Corporations Act and ss 12DA(1) and 12DB(1)(i) of the ASIC Act. The court held that the evidence adduced by ASIC was sufficient to prove the allegations, and it was open to Dover to adduce further evidence to contradict ASIC’s allegations, which it did not. The court also found that Mr McMaster was knowingly involved in the contraventions. Given the findings of contravention, the court indicated that a further hearing would be necessary to determine the issue of pecuniary penalties.

The court ordered the parties to file, within 14 days, draft short minutes containing an agreed form of declarations reflecting the reasons for the decision and orders proposed by the parties for timetabling a hearing as to pecuniary penalties. In the absence of an agreement, the plaintiff and defendants were to file competing draft short minutes containing the declarations and timetabling orders proposed by each party, accompanied by submissions of no more than four pages in length. Entry of orders was to be dealt with in accordance with Rule 39.32 of the Federal Court Rules 2011.