Braham v ACN 101 482 580 Pty Ltd & Ors

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

PROFESSIONAL LIABILITY LIST

S CI 2012 03622

SIMON BRAHAM

Plaintiff

v

ACN 101 482 580 PTY LTD (ACN 101 482 580) & ORS (according to Schedule)

Defendants

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JUDGE:

EMERTON JA

WHERE HELD:

Melbourne

DATE OF HEARING:

19-23, 26-28 February; 1, 2, 5 March; 23, 24 April 2018

DATE OF JUDGMENT:

2 October 2018

CASE MAY BE CITED AS:

Braham v ACN 101 482 580 Pty Ltd & Ors

MEDIUM NEUTRAL CITATION:

[2018] VSC 575

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NEGLIGENCE – Plaintiff invested in an arrangement promoted by L involving an investment in woodlots and a loan to overseas commodity traders – Plaintiff made the investment by acquiring units in a partnership – Woodlot investment benefited from an ATO Product Ruling and the plaintiff understood the arrangement to entitle him to a tax deduction for his investment – Firm gave advice to L about aspects of the investment arrangement and drafted the partnership agreement – Whether the firm acted for the partnership – Whether there was an express or implied retainer between the firm and the plaintiff – Whether L acted as agent for the plaintiff and other partners when retaining the firm to advise and draft – Whether the firm was retained to advise on the tax effectiveness to the partners of the partnership arrangement – Whether the firm owed the plaintiff a duty of care arising in tort – Whether the plaintiff was vulnerable – Whether by drafting the Partnership Agreement the firm made representations to the plaintiff that were misleading or deceptive – No retainer or common law duty of care – No misleading or deceptive conduct – Proceeding dismissed.

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APPEARANCES:

Counsel

Solicitors

For the Plaintiff

Mr P G Cawthorn QC with Mr C Madder

Rigby Cooke Lawyers

For the First Defendant

Dr A Hanak

Minter Ellison

TABLE OF CONTENTS

Introduction        1

Issues       7

Background        9

2005 investment     9

Ambry, Ludekens and investments in Great Southern      11

Generally     11

In 2005       12

In 2006       27

Advising — May/June 2006     27

Drafting — June 2006   34

The Partnership Agreement: terms and execution  36

Was Ambry retained by or on behalf of Braham?     41

Did Ambry otherwise owe Braham a duty of care?    63

Was Ambry’s conduct misleading or deceptive?        70

Conclusion on liability    72

Issues remaining undetermined 72

Disposition          77

HER HONOUR:

Introduction

1         The plaintiff, Dr Simon Braham, is an ear, nose and throat surgeon.  He graduated in medicine in 1990 and qualified as a specialist surgeon in 1999.  By 2005, he had been self-employed as a surgeon for several years and was generating a very healthy income.  He was looking to make investments of a type that were tax effective and would set him up for retirement.

2         Braham had a close friend with whom he discussed investments, Dr Andrew Ludekens.  Ludekens was also a medical doctor who had worked with Braham, but he fancied himself as an investor and as someone who could give…