Bankier v HAP2 Pty Ltd

Case [2019] QSC 101

SUPREME COURT OF QUEENSLAND

CITATION:

Bankier v HAP2 Pty Ltd [2019] QSC 101

PARTIES:

MICHELLE ANN BANKIER

(plaintiff)

v
HAP2 PTY LTD
ACN 005 806 744

(defendant)

FILE NO:

BS No 2715 of 2016

DIVISION:

Trial Division

PROCEEDING:

Trial

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

1 May 2019

DELIVERED AT:

Brisbane

HEARING DATE:

30, 31 July, 1, 2, 6, 7 and 10 August 2018

JUDGE:

Martin J

ORDER:

Judgment for the plaintiff. The amount of the judgment will be determined after further submissions are received.

CATCHWORDS:

TORTS – NEGLIGENCE – WHERE ECONOMIC OR FINANCIAL LOSS – CARELESS ADVICE, STATEMENTS AND NON-DISCLOSURE – PROFESSIONAL ADVISERS – where the plaintiff suffered serious injuries in a car accident – where the plaintiff had been awarded nearly $2 million in damages for her injuries suffered, future loss, medical expenses and associated matters – where the defendant was a financial planner engaged by the plaintiff to advise her with respect to investing a large part of the sum she had been awarded – where the defendant had not read the judgment awarding damages to the plaintiff – where the plaintiff borrowed money for investments and made significant withdrawals from her capital to fund her lifestyle and business enterprises – where the value of the plaintiff’s investments significantly decreased – whether the defendant was negligent in failing to warn the plaintiff of material risks caused by her conduct

CORPORATIONS – FINANCIAL SERVICES AND MARKETS – FINANCIAL SERVICES PROVIDERS – where the plaintiff suffered serious injuries in a car accident – where the plaintiff had been awarded nearly $2 million in damages for her injuries suffered, future loss, medical expenses and associated matters – where the defendant was a financial planner engaged by the plaintiff to advise her with respect to investing a large part of the sum she had been awarded – where the defendant had not read the judgment awarding damages to the plaintiff – where the plaintiff borrowed money for investments and made significant withdrawals from her capital to fund her lifestyle and business enterprises – where the value of the plaintiff’s investments significantly decreased – whether the defendant warned the plaintiff that the advice he gave was based upon incomplete or inaccurate information

LIMITATION OF ACTIONS – where the defendant pleads that the plaintiff’s actions commenced after the expiration of the statutory limitation period – whether the plaintiff’s actions are time-barred by operation of the Limitation of Actions Act 1974 (Qld)

Civil Liability Act 2003 (Cth), s 11, s 22

Corporations Act 2001 (Cth), s 945A, s 945B

Limitation of Actions Act 1974 (Qld), s 10

ABN AMRO Bank v Bathurst Regional Council (2014) 224 FCR 1, cited

Austrust Ltd v Astley (1993) 60 SASR 354, cited

Cigna Insurance Asia Pacific Ltd v Packer (2000) 23 WAR 159, cited

Commonwealth v Cornwell (2007) 229 CLR 519, cited

Darley Main Colliery Co v Mitchell (1886) 11 App Cas 127, cited

Esanda Finance Corp v Peat Marwick Hungerfords

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AGLC
Bankier v HAP2 Pty Ltd [2019] QSC 101
Case
[2019] QSC 101
Decision Date

CaseChat Overview and Summary

Bankier v HAP2 Pty Ltd was a case heard by the Supreme Court of Queensland, where the plaintiff, Ms Bankier, sought damages for alleged negligent financial advice provided by the defendant, Mr Avery, a financial planner. Ms Bankier had been awarded nearly $2 million in damages following a car accident. Mr Avery was engaged to advise her on how to invest a significant portion of her award. The plaintiff's investments subsequently suffered substantial losses, and she claimed that Mr Avery's failure to adequately warn her of the risks associated with her investment strategy and significant withdrawals from her capital amounted to negligence. The defendant argued that the plaintiff's claims were time-barred under the Limitation of Actions Act 1974 (Qld). The court had to determine whether Mr Avery's advice was negligent and whether the plaintiff's claims were within the statutory limitation period.

The court considered the standard of care expected of a financial planner and whether Mr Avery had fulfilled his duty to provide appropriate warnings and advice. It examined whether Mr Avery's failure to read the judgment awarding damages to the plaintiff and his limited understanding of her circumstances constituted negligence. The court also evaluated whether the plaintiff's claims were time-barred by the Limitation of Actions Act 1974 (Qld). It held that Mr Avery should have undertaken more thorough investigations into the plaintiff's circumstances to provide appropriate advice and warnings. The court found that the plaintiff's claims were not time-barred and that the defendant had indeed been negligent in his advice.

The court found in favour of the plaintiff, holding that Mr Avery's advice was negligent and that the plaintiff's claims were not time-barred. It determined that Mr Avery failed to provide the level of care and warning expected of a financial planner under the circumstances. The court concluded that Mr Avery's conduct breached his duty of care towards the plaintiff, resulting in significant financial loss. The case was remanded for further submissions to determine the amount of damages to be awarded to the plaintiff.

Orders

Orders of the court

Judgment for the plaintiff. The amount of the judgment will be determined after further submissions are received.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Had Mr Avery undertaken an appropriate level of enquiry into the circumstances of the plaintiff, he would have become aware, in addition to the matters referred to above, of the following:(a)the extent to which she could not engage in full-time employment,(b)that her capacity to earn any income had been found to be in the order of $150 a week until the age of 50,(c)that, in the future, she would require significant assistance with household and domestic tasks, and(d)she would need to modify any accommodation to suit her disabilities.What risk of harm would the plaintiff face if the judgment sum was dissipated? The risk was obvious. Unless she maintained a sufficient sum, she would not be able to afford the treatment and other costs associated with her condition. This was known to Mr Avery. In a file note of 8 October 2002, he recorded: “She is restricted in her diet and ability to work and exsert [sic] much effort therefore she has been paid out $1,966 million and she may not be able to work. … She has significant medical expenses and this money has to last her the rest of her life.” (emphasis added) The extent of the risk and the dire consequences of the plaintiff not being able to afford the necessary care for the remainder of her life were not in issue. While Mr Avery was not aware of all the matters taken into account by the judge when assessing damages (because he had not read the judgment) he knew enough to understand that any substantial reduction in the amount available to the plaintiff would have a greater effect than a similar reduction would have to an otherwise able-bodied person. Those effects included that she might not be able to afford:(a)future medical and associated expenses,(b)domestic and other assistance, and(c)appropriate modifications to her accommodation.The parties’ powers of recollection Generally speaking, neither Ms Bankier nor her mother had particularly clear recollections of the details of events or conversations. This is not surprising. Ms Bankier had many other things to occupy her attention, in particular, her physical recovery and how she might lead her life following her catastrophic injuries. Her mother was also, no doubt, consumed by concern for her daughter. Mr Avery said that the file notes he made recorded the important or key issues discussed in meetings, as it was important to have a record of those issues. He relied, to a very large extent, on the file notes made during or soon after his meetings and conversations with Ms Bankier. Where there is a difference in recollection between the parties I prefer to rely on the evidence which is consistent with the notes which were made at the time. Many of the events the subject of this trial occurred more than ten years ago and it is not surprising that memories fade. Ms Bankier was not Mr Avery’s only client and the regular written advices given to her are, in many respects, obviously of general application and applicable to a broad range of clients. Mr Avery sometimes purported to recall important details of conversations which were not recorded in his file notes. In cross-examination he said that he did have conversations with her in which he warned her against, for example, excessive travel costs. Such a statement would have been a very important part of the advice he was giving her. But there are no records of that having taken place at the time the travel money was sought. Where he gave evidence of a discussion or other statement which is not the subject of a file note then I do not accept that his recollection is, in general, reliable.Ms Bankier meets Mr Avery

Ratio Decidendi

Legal Principle Established

The CLA applies so far as Mr Avery’s advice concerning investments and so on is concerned. The only evidence of peer professional opinion came from Mr Green and Mr Richards. Mr Green’s opinion was that Mr Avery’s advice was substantially deficient in all respects. Mr Richards’ opinion was more generous but all the evidence adduced does not support a finding that Mr Avery “acted in a way that (at the time the service was provided) was widely accepted by peer professional opinion by a significant number of respected practitioners in the field as competent professional practice.” Thus, no protection is afforded by this section.The Corporations Act Claim It was not disputed that the Corporations Act 2001 (as it then provided) applied to the defendant. The plaintiff asserted breaches of s 945A and s 945B of the Corporations Act. Those sections provided:“944A Situation in which Division appliesThis Division applies in relation to the provision of personal advice (the advice) in the following circumstances:(a) the advice is provided:by a financial services licensee (the providing entity); orby a person (the providing entity) in their capacity as authorised representative of a financial services licensee (the authorising licensee), or of 2 or more financial services licensees (the authorising licensees); and(b) the advice is provided to a person (the client) as a retail client.Subdivision B—Requirements relating to basis of advice945A Requirement to have a reasonable basis for the advice(1) The providing entity must only provide the advice to the client if:(a) the providing entity:(i)determines the relevant personal circumstances in relation to giving the advice; and(ii)makes reasonable inquiries in relation to those personal circumstances; and(b)having regard to information obtained from the client in relation to those personal circumstances, the providing entity has given such consideration to, and conducted such investigation of, the subject matter of the advice as is reasonable in all of the circumstances; and(c)the advice is appropriate to the client, having regard to that consideration and investigation.Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).…945B Obligation to warn client if advice based on incomplete or inaccurate information(1) If:(a)the advice is based on information relating to the client’s relevant personal circumstances that is incomplete or inaccurate; and(b)the providing entity knows that the information is incomplete or inaccurate, or is reckless as to whether it is incomplete or inaccurate;the providing entity must, in accordance with subsections (2) and (3), warn the client that:(c)the advice is, or may be, based on incomplete or inaccurate information relating to the client’s relevant personal circumstances; and(d)because of that, the client should, before acting on the advice, consider the appropriateness of the advice, having regard to the client’s relevant personal circumstances.Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).(2) The warning must be given to the client at the same time as the advice is provided and, subject to subsection (3), by the same means as the advice is provided.(3) If the Statement of Advice (see Subdivision C) is the means by which the advice is provided, or is given to the client at the same time as the advice is provided, the warning may be given by including it in the Statement of Advice.Note: The Statement of Advice must at least contain a record of the warning—see paragraphs 947B(2)(f) and 947C(2)(g).”