Casaclang v WealthSure Pty Ltd - [2015] FCA 761

FEDERAL COURT OF AUSTRALIA
Casaclang v WealthSure Pty Ltd [2015] FCA 761

Citation: Casaclang v WealthSure Pty Ltd [2015] FCA 761

Parties: CAMILO CASACLANG, KATRINA CASACLANG, ANDREW GIBSON, JACQUELINE GIBSON, HETTIGE DON ROVILLE GOONASEKERA, MARIE ANTOINETTE KANTHI GOONASEKERA and TONI HEMMING IN HER CAPACITY AS EXECUTRIX OF THE ESTATE OF ALDEMIRA LUCEY v WEALTHSURE PTY LTD ACN 097 405 108

File number(s): NSD 169 of 2013

Judge(s): BUCHANAN J

Date of judgment: 27 July 2015

Catchwords: CORPORATIONS – financial services and markets – holder of an Australian financial services licence (“licensee”) – authorised representative of a licensee – where authorised representative alleged to have contravened provisions in Parts 7.7, 7.9 and 7.10 of Chapter 7 of the Corporations Act 2001 (Cth) – where authorised representative alleged to have caused loss and damage to clients in negligence and breach of contract – whether conduct of authorised representative related to a “financial product” – whether investment by clients was provision of a “credit facility” within the definition of reg 7.1.06(1) of the Corporations Regulations 2001 (Cth) – whether licensee liable for conduct of authorised representative under Division 6 of Part 7.6 of the Corporations Act – whether licensee liable under s 769B of the Corporations Act for conduct of authorised representative having actual or apparent authority – whether licensee liable in negligence for conduct of former authorised representative after revocation of authorised status

Legislation:
Australian Securities and Investments Commission Act 2001 (Cth)
Competition and Consumer Act 2010 (Cth), Sch 2
Corporations Act 2001 (Cth), ss 79, 760A, 760B, 761A, 761E, 761E(1), 761G, 761G(1), 761G(9), 762C, 762C(b), 762C(c), 763A, 763A(1), 763A(1)(a), 763A(1)(c), 763B, 763B(a), 763B(a)(ii), 763B(b), 764A, 765A, 765A(1)(h)(i), 766A, 766A(1)(a), 766A(1)(b), 766B, 766B(1), 766B(3), 766C, 766C(1)(a), 766C(1)(b), 766C(1)(d), 766C(1)(e), 766C(2), 769B, 769B(1), 769B(2), 769B(3), 769B(7), 769B(10)(b), 769B(10)(c), 769C, 910A, 911A, 911A(1), 911B, 911C, 912A, 912A(1)(a), 912A(1)(aa), 912A(1)(c), 912A(1)(ca), 912A(1)(d), 912A(1)(h), 912B, 912B(1), 916A, 916A(1), 916A(4), 916F, 916F(1), 916F(3), 917A, 917A(1), 917A(1)(a), 917A(1)(b), 917A(1)(c), 917B , 917E, 917F, 917F(1), 917F(2), 917F(3), 917F(4), 944A, 944A(a)(ii), 944A(b), 945A, 945A(1), 947C, 947C(6), 947D, 952C, 952D, 952E, 953B, 953B(1)(a), 953B(2)(a), 953B(2)(c), 953B(3)(b), 1011A, 1011A(1), 1011B, 1012A, 1012A(1), 1013D, 1013E, 1022B, 1022B(1)(a), 1022B(2)(a), 1022B(4)(a), 1041E, 1041E(1)(a), 1041E(1)(b)(i), 1041E(1)(b)(ii), 1041E(1)(c), 1041E(1)(c)(i), 1041E(1)(c)(ii), 1041F, 1041F(1)(a), 1041F(1)(b), 1041F(2), 1041H, 1041H(1), 1041H(2)(a), 1041H(2)(b)(i), 1041I, 1041I(1), 1041I(1B)(a), 1041J, 1041L, 1041L(1), 1041L(2), 1041L(4), 1041S, 1041S(a), 1311(1)
Corporations Regulations 2001 (Cth), regs 7.1.06(1)(a), 7.6.02AAA(1)
Evidence Act 1995 (Cth), ss 55, 56, 97, 100, 135
Federal Court of Australia Act 1976 (Cth), s 33C
Limitation Act 1969 (NSW), ss 14, 55(1), 55(3)

LexisNexis Butterworths, Australian Corporations Legislation, 2010 edition

Cases cited: Astley v Austrust Ltd (1999) 197 CLR 1
Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480
Gray v Motor Accident Commission (1998) 196 CLR 1
Hunter Grain Pty Ltd v Hyundai Merchant Marine Co Ltd and Malaysian International Shipping Corporation Bhd (1993) 117 ALR 507; [1993] FCA 133
Joel v Morison (1834) 6 C & P 501; 172 ER 1338; [1834] EWHC KB J39
Josephson v Walker (1914) 18 CLR 691
Larsson v WealthSure Pty Ltd [2013] FCA 926
New South Wales v Lepore (2003) 212 CLR 511
Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451
Selig v Wealthsure Pty Ltd [2015] HCA 18
Selig v Wealthsure Pty Ltd (2013) 94 ACSR 308
Seymour v Seymour (1996) 40 NSWLR 358
Williams v Milotin (1957) 97 CLR 465
Wilson v Horne (1999) 8 Tas R 363
Zhang v Minox Securities Pty Ltd; Liu v Minox Securities Pty Ltd [2008] NSWSC 689

Date of hearing: 13, 14, 15, 16, 20, 21, 22 April 2015

Place: Sydney

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 395

Counsel for the Applicants: Mr N Kidd SC with Mr SS Ahmed

Solicitor for the Applicants: Mills Oakley Lawyers

Counsel for the Respondent: Mr MS White SC with Mr P Holmes

Solicitor for the Respondent: Clyde & Co

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 169 of 2013

BETWEEN:
CAMILO CASACLANG
Fourth Applicant

KATRINA CASACLANG
Fifth Applicant

ANDREW GIBSON
Tenth Applicant

JACQUELINE GIBSON
Eleventh Applicant

HETTIGE DON ROVILLE GOONASEKERA
Eighteenth Applicant

MARIE ANTOINETTE KANTHI GOONASEKERA
Nineteenth Applicant

TONI HEMMING IN HER CAPACITY AS EXECUTRIX OF THE ESTATE OF ALDEMIRA LUCEY
Twenty-First Applicant

AND:
WEALTHSURE PTY LTD ACN 097 405 108
Respondent

JUDGE:

BUCHANAN J

DATE OF ORDER:

27 JULY 2015

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.The applicants bring in short minutes of order within 14 days to give effect to the conclusions in this judgment.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 169 of 2013

BETWEEN:
CAMILO CASACLANG
Fourth Applicant

KATRINA CASACLANG
Fifth Applicant

ANDREW GIBSON
Tenth Applicant

JACQUELINE GIBSON
Eleventh Applicant

HETTIGE DON ROVILLE GOONASEKERA
Eighteenth Applicant

MARIE ANTOINETTE KANTHI GOONASEKERA
Nineteenth Applicant

TONI HEMMING IN HER CAPACITY AS EXECUTRIX OF THE ESTATE OF ALDEMIRA LUCEY
Twenty-First Applicant

AND:
WEALTHSURE PTY LTD ACN 097 405 108
Respondent

JUDGE:

BUCHANAN J

DATE:

27 JULY 2015

PLACE:

SYDNEY

REASONS FOR JUDGMENT

1         INTRODUCTION

[1]

1.1      The applicants

[1]

1.2      The claims

[5]

1.3      Mr Oberg

[8]

1.4      WealthSure

[10]

2         THE LICENSING SCHEME IN OUTLINE

[12]

3         MR OBERG’S AUTHORISATION

[23]

3.1      Appointment

[23]

3.2      Suspension and termination

[31]

3.3      Advice to clients

[35]

4         DEALINGS WITH THE APPLICANTS

[43]

4.1      Mr and Mrs Casaclang

[45]

4.2      Mr and Mrs Gibson

[54]

4.3      Mr and Mrs Goonasekera

[65]

4.4      The estate of Mrs Lucey

[106]

5         EVIDENCE ARISING IN THE RESPONDENT’S CASE

[138]

6         GENERAL LINES OF ARGUMENT

[175]

7         ATTRIBUTION OF LIABILITY TO WEALTHSURE

[181]

8         THE CAUSES OF ACTION

[209]

8.1 Part 7.10

[213]

8.1.1    The Casaclangs

[253]

8.1.2    The Gibsons

[280]

8.1.3    The estate of Mrs Lucey

[285]

8.1.4    The Goonasekeras

[293]

8.2      Negligence

[315]

8.3 Part 7.7

[352]

8.4      Statutory duty of care

[374]

8.5 Part 7.9

[378]

8.6      The ASIC Act

[385]

8.7      Contract

[386]

9         SUMMARY

[393]

10       CONCLUSION

[394]

BUCHANAN J:
1.               INTRODUCTION

1.1 The applicants

These proceedings were commenced on 5 February 2013 as representative proceedings pursuant to s 33C of the Federal Court of Australia Act 1976 (Cth). On 16 September 2013, I ordered that the proceedings not continue as representative proceedings (Larsson v WealthSure Pty Ltd [2013] FCA 926).
The members of the proposed class then applied to be added as individual applicants. Those applications were granted.
For that reason and others, there have been a number of iterations of the pleadings. The most recent version of the statement of claim (a fourth further amended statement of claim) was filed in Court on the second day of the final hearing. Some applicants (including Mr Larsson) settled their claims before or during the final hearing and the title of the proceedings was progressively amended to its present form.
Seven applicants remain, consisting of the members of three married couples (Casaclang, Gibson and Goonasekera) and Ms Hemming, the sister of, and an executrix of the estate of, the late Mrs Aldemira Lucey.
1.2 The claims
The applicants claim that the respondent (“WealthSure”) should pay damages to them for losses caused by the conduct of Mr Colin Oberg, previously an “authorised representative” of WealthSure. Mr Oberg is not a party to the proceedings.
Most of the claims are based on provisions of the Corporations Act 2001 (Cth) (the provisions of the Corporations Act and its regulations relevant to the proceedings may be found in the 2010 edition of “Australian Corporations Legislation” published by LexisNexis Butterworths – references hereafter are to the Corporations Act and its regulations in that form). Additional claims are based on alternative statutory obligations which I shall discuss in due course and upon various aspects of the common law such as the tort of negligence and the law of contract.
The various alternative formulations of the various obligations were really directed to establishing a foundation for a single objective, namely obtaining relief from WealthSure for all the losses suffered by each of the applicants as a result of Mr Oberg’s conduct. I shall discuss the alternative bases for the claims to the extent necessary. It is sufficient to record at this stage that I accept that the applicants have made out a case, in one way or another, for each of their claims and they should have verdicts for the amounts which they seek from WealthSure.
1.3 Mr Oberg
Mr Oberg practised as an accountant, tax adviser and financial planning representative. His offices were, at one time, at 234 George Street, Sydney.
The events in the present case in part concern alleged recommendations by Mr Oberg for the making of particular investments and, in one case, also the taking of money by him under a power of attorney. In all these cases the money was put under his direct control either in a personal bank account or in a business account controlled by him. In each case the money has been lost. In each case, as I have said, the applicants claim that WealthSure is liable to compensate them for the loss.
1.4 WealthSure
From 18 October 2004 until 30 September 2010, Mr Oberg was an “authorised representative” of WealthSure which held an Australian financial services licence (“a licence”) issued under Part 7.6 of the Corporations Act.
WealthSure was established in 2001 and is based in Perth. At the time relevant to the present proceedings, the Chief Executive Officer, and Managing Director, was Mr Darren Andrew Pawski, who was also a founding shareholder. From December 2006 until early January 2010, and again after about January 2011, Ms Cristy Lee Blackwell was WealthSure’s “Compliance Manager”. Ms Kirsty Pawski (Mr Pawski’s wife at the time) was WealthSure’s “Operations Manager” and, during 2010 while Ms Blackwell was on maternity leave, she also had the responsibilities of Compliance Manager.
2. THE LICENSING SCHEME IN OUTLINE
WealthSure was required to hold a licence (Corporations Act, s 911A(1)) because it carried on a “financial services business”, namely a business of providing “financial services” (Corporations Act, s 761A). A person provides a financial service if (amongst other things) they provide “financial product advice” (Corporations Act, s 766A(1)(a)) and deal in a “financial product” (Corporations Act, s 766A(1)(b)).
The general meaning of the term “financial product” and the circumstances in which a person “makes a financial investment” are indicated by ss 763A and 763B. Relevantly here, they provide as follows:
763A   General definition of financial product
(1)For the purposes of this Chapter, a financial product is a facility through which, or through the acquisition of which, a person does one or more of the following:
(a)makes a financial investment (see section 763B);
…
(Emphasis in original.)
763B   When a person makes a financial investment
For the purposes of this Chapter, a person (the investor) makes a financial investment if:
(a)the investor gives money or money’s worth (the contribution) to another person and any of the following apply:
…
(ii)the investor intends that the other person will use the contribution to generate a financial return, or other benefit, for the investor (even if no return or benefit is in fact generated);
(iii)      …; and
(b)the investor has no day-to-day control over the use of the contribution to generate the return or benefit.
(Emphasis in original.) (Notes omitted.)
(I have only included the specific matters most relevant to the claims in the present proceedings).
It will be necessary to return, in due course, to a particular argument which concerns whether a “credit facility” is a financial product but that may be put to one side for the moment.
A person provides financial product advice (relevantly here) when s 766B(1) applies:
766B Meaning of financial product advice
(1)For the purposes of this Chapter, financial product advice means a recommendation or a statement of opinion, or a report of either of those things, that:
(a)is intended to influence a person or persons in making a decision in relation to a particular financial product or class of financial products, or an interest in a particular financial product or class of financial products; or
(b)could reasonably be regarded as being intended to have such an influence.
I shall deal with the position of authorised representatives, and the liability which in many cases attaches to a licensee for conduct of an authorised representative, but at this point some more general features of the licensing arrangements should be noted.
Section 912A states some general obligations on licensees, which include the following:
912A General obligations
(1)A financial services licensee must:
(a)do all things necessary to ensure that the financial services covered by the licence are provided efficiently, honestly and fairly; and
(aa)have in place adequate arrangements for the management of conflicts of interest that may arise wholly, or partially, in relation to activities undertaken by the licensee or a representative of the licensee in the provision of financial services as part of the financial services business of the licensee or the representative; and
…
(c)comply with the financial services laws; and
(ca)take reasonable steps to ensure that its representatives comply with the financial services laws; and
(d)unless the licensee is a body regulated by APRA—have available adequate resources (including financial, technological and human resources) to provide the financial services covered by the licence and to carry out supervisory arrangements; and
…
(h)unless the licensee is a body regulated by APRA—have adequate risk management systems; and
…
Section 912B(1) of the Corporations Act required a licensee, who provided financial services to persons as “retail clients” to have arrangements for compensating those persons for loss or damage suffered because of breaches of relevant obligations under Chapter 7 by the licensee or its representatives. The requirement for those arrangements (i.e. professional indemnity insurance – reg 7.6.02AAA(1)) is a fundamental aspect of the statutory scheme underpinning the liability provisions which render a licensee directly responsible to a retail client for many aspects of the work of representatives.
Each of the applicants was a retail client (Corporations Act, s 761G).
Section 769B of the Corporations Act makes general provision for when a body corporate is, for the purposes of Chapter 7, liable for the conduct of its agents. Conduct by an agent is taken to be the conduct of the corporation if within the scope of the agent’s actual or apparent authority. Examination of this statutory directive in connection with the particular provisions assigning liability to a licensee for conduct by an authorised representative may be deferred, as may discussion of the limits of “apparent authority”.
Separately, and even more generally, s 79 of the Corporations Act states when a person is “involved in” a contravention of the Corporations Act, but ultimately, s 79 is not relevant to any of the causes of action in the present case.
I shall discuss these questions of attribution of liability in due course.
3. MR OBERG’S AUTHORISATION
3.1 Appointment
To provide a financial service on behalf of another, conditions stated by s 911B of the Corporations Act must be satisfied. Relevantly here, WealthSure was required to hold a licence. If Mr Oberg was to act for WealthSure he was required to be its authorised representative. Section 911C prohibited Mr Oberg from holding out that he was an authorised representative when he was not.
Section 916A(1) and (4) provide:
916A How representatives are authorised
(1)A financial services licensee may give a person (the authorised representative) a written notice authorising the person, for the purposes of this Chapter, to provide a specified financial service or financial services on behalf of the licensee.
…
(4)An authorisation may be revoked at any time by the licensee giving written notice to the authorised representative.
(Emphasis in original.)
It was obligatory to notify ASIC of authorisation (within 15 business days) or revocation (within 10 business days) (s 916F(1) and (3)). Failure to comply was an offence (s 1311(1)).
Mr Oberg was appointed an authorised representative of WealthSure on 18 October 2004, under a written agreement. Unsurprisingly, Mr Oberg’s obligations included the following:
3. REPRESENTATIVE’S OBLIGATIONS
…
3.2 Obligations of the Representative
…
(f)The Representative must:
…
(vi)perform his or her duties effectively, honestly and fairly;
…
(x)ensure that he or she has a reasonable basis for any recommendation, having ascertained the Client’s investment objectives, financial situation and particular needs and having given such consideration to, and conducted such investigation of, the subject matter of the recommendation as is reasonable in all the circumstances;
…
He agreed to the following:
3.3      Limitation of Representative’s Authority
Subject to the other terms of this Agreement, the Representative will not do any act as a Representative of the Licencee which is not directly in the course of the Licencee’s Business.
…
3.5      Conduction of Representative
(a)The Representative must, in the course of doing any act authorised by this Agreement, only promote and advise prospective Clients to invest in the Approved Products.
…
(f)The Representative will deliver all Client’s applications for Approved Products and funds intended by Client for investment, directly and without any deductions, to the Licencee and will observe all conditions regarding applications and payment of funds as the Licencee may impose from time to time.
…
…
3.7      Indemnity
(a)The Representative will indemnify and keep indemnified the Licencee from and against all and any charges, claims, costs, losses, expenses and liabilities arising directly or indirectly from any negligent act or omission of the Representative in the course of carrying out its activities pursuant to this Agreement, or any act or omission of the Representative in breach of the terms and conditions of this Agreement.
(b)The indemnity granted in this clause shall not be terminated or limited by or on the termination of this Agreement.

It will be seen that any acceptance of the evidence of the applicants in a number of respects carries with it the acceptance with respect to their claims that Mr Oberg must have breached a number of those obligations. However, Mr Oberg was not a party to the proceedings and the question of what rights WealthSure might have against him for breach of his contract is outside the scope of the present proceedings.
Termination of Mr Oberg’s authority was dealt with by the following clauses:
9.        TERMINATION
9.1This Agreement shall continue until terminated in accordance with clauses 9.2.
9.2(a)       The Representative may terminate this Agreement at any time by giving 30 days prior written notice to WealthSure Pty Ltd.
(b)WealthSure may terminate this Agreement at any time by giving 30 days prior written notice to the representative.
9.3      IMMEDIATE TERMINATION
This agreement is terminated immediately if:
(a)an Insolvency Event occurs in respect to the Representative; or
(b)the Representative is convicted of a criminal offence of a dishonest, deceitful or fraudulent nature.
9.4On termination of this Agreement, the Representative ceases to be authorised to act for or by arrangement with the Licencee and must return:
(a)all Client Files relating to WealthSure clients in its possession;
(b)any compliance manual or documents relating to the Licencee’s business issued by the Licencee; and
(c)all other material obtained from or through association with the Licencee including all promotional material and computer software
to the Licencee within five Business Days, or such other period as the Licencee may specify in writing.
On the same date as the Agreement, Mr Oberg was provided with a “Certificate of Authorisation”, to be “displayed prominently” within his office. Other documents were given to him to make available to clients including an “Adviser Profile” and a “Financial Services Guide” from WealthSure. The Certificate of Authorisation identified Mr Oberg as authorised to deal in and provide advice about the following classes of products in the following way:

Basic Deposit Products

Managed Investments, including

Deposit Products other than basic deposit products

·    Mastertrusts, Wrap Facilities, Property Syndicates

·    Margin Lending Products

Life products including:

·    Tax-effective investments

·    Investment life insurance products and

Securities

·    Life risk insurance products

Government debentures stocks and bonds

Superannuation, including

·    Public Offer Superannuation Funds

Retirement Savings Account

·    Corporate Superannuation

Option Contracts and Warrants

To wholesale and retail clients.

3.2 Suspension and termination

On 20 September 2010, Ms Kirsty Pawski purported to suspend Mr Oberg’s authorisation, pending the outcome of an investigation into a complaint from a person who is not (and was not) an applicant in the proceedings. On 30 September 2010, after a further complaint, Mr Oberg was advised by email from Ms Pawski of the revocation of his authority. The email commenced:
Please be advised that effective today, Wealthsure has terminated your authorised representative agreement and cancelled your authority with ASIC. The corporate authority for Oberg Financial Planning Pty Ltd has also been terminated.
This notice does not appear to conform to the provisions of the Agreement for termination, although no doubt it took effect no later than 30 days thereafter if not immediately effective. Mr Oberg was directed to notify clients, return a range of material and immediately remove references to his authority. There is no evidence that he complied with any of those requirements or that WealthSure took further, effective, steps in relation to any of them. Such evidence as I have is to the contrary.
Mr Oberg was reminded of a previous requirement (of uncertain date) to provide a list of all clients and funds owed to them. In the email dated 20 September 2010, Ms Pawski had said:
Please also provide a statement confirming whether any other clients have been invested into non-approved investment products. Where this is the case, we require the provision of their names and contact details. This list should not be limited to those clients whom you believe are “financial planning” clients. Due to the nature of the advice, your accounting clients would most likely also be considered financial planning clients.
(Emphasis added.)
and
… Wealthsure requires a complete audit of your client files and processes. Mr Wayne Turnbull our NSW Practice Manager will be attending your offices at 1pm on Friday, 24^th September 2010 to collect client files and conduct an onsite audit. Your client files will be audited at head office and returned to you once the audit is completed. Please ensure you are available for this meeting and you have your client files readily available for Mr Turnbull. …
Again, such evidence as there is suggests that none of those steps were insisted upon, the audit did not occur, the client files were not returned and details of clients and sums owed were not obtained.
3.3 Advice to clients
For a long time, until 25 July 2011, WealthSure took no apparent step to contact or notify Mr Oberg’s clients – i.e. those with respect to whom he was the representative of WealthSure, including those “accounting clients” who “would most likely also be considered financial planning clients” – and tell them of the termination of his authority.
So far as the present applicants are concerned, the only advice to any of them which was established by the evidence was contained in a letter to Mrs Gibson in the following terms:
25^th July 2011
MRS JACQUELINE GIBSON
[Address]
Dear Sir/Madam,
Change of Adviser
Please be advised Mr Colin Oberg is no longer an authorised representative of Wealthsure. In his place we have appointed the services of Sam El Shammaa for the purposes of reviewing your existing investments and insurances to ensure that you continue to receive ongoing support and advice from a highly respected and qualified Wealthsure authorised representative.
Sam has been working in the financial planning industry for over 16 years and has been an authorised representative of Wealthsure since July 2004. He holds a Bachelor of Science Degree in Business Administration with a double major in Business Management and International Business from the United States. Sam has also completed the Advanced Diploma of Financial Services. He possesses a strong passion for financial planning which is evident in his ability to assist clients to manage and build their wealth.
Sam would be happy to meet with you to discuss your circumstances and can be contacted on:
[Mobile telephone number]
[(02) telephone number]
[Email address]
If you do not wish for this transfer to occur, please contact our office on (08) [telephone number].
Yours Sincerely,
Cristy Blackwell
Complaints Manager
This uninformative and anodyne communication cannot be considered to represent any kind of warning of the potential consequences for the Gibsons of what WealthSure knew by late September 2010. Other applicants had no information given to them, despite WealthSure’s undoubted knowledge that Mr Oberg had been taking clients’ funds.
The general character of WealthSure’s knowledge is illustrated by the terms of letters written to the Tax Practitioners Board, and New South Wales Police, on 10 January 2012 and 29 March 2012 respectively. WealthSure knew well before those letters were written the character of the conduct referred to in them. I shall refer later to evidence from a number of Mr Oberg’s clients about those matters, before and after the termination of his authority, well before even those letters were written.
The Tax Practitioners Board was advised:
Due to the nature and the number of the allegations WealthSure Pty Ltd (“WealthSure”) has received from Mr Oberg’s clients (both accounting and financial planning), in good conscience and as a matter of professional ethical standards, we felt that the prudent approach would be to advise the TPB of the circumstances surrounding the allegations.
WealthSure has completed a thorough investigation into the circumstances surrounding the complaints received and, as a result, have reported Mr Oberg to both the Australian Security Investments Commission and the NSW Major Fraud Squad.
After speaking at length with the clients involved, it has come to our attention that certain client monies have been withdrawn from their accounts (without their knowledge) and cannot be accounted for. Other client monies have been withdrawn from their accounts (without their knowledge) and deposited into Mr Oberg’s personal finance company JRCC Finance Pty Ltd (“JRCC”).
WealthSure directed Mr Oberg to repay all funds to the clients involved and close down his personal finance company JRCC. WealthSure has since attempted to contact Mr Oberg on several occasions requesting an update on Mr Oberg’s progress in returning the client funds. Mr Oberg has chosen not to respond.
On the basis of the information presented to WealthSure and Mr Oberg’s failure to provide an adequate response, WealthSure terminated Mr Oberg as an Authorised Representative on 30^th September 2010. WealthSure has written to all fund managers that Mr Oberg has clients with and advised them that Mr Oberg has been terminated and should be removed from all client accounts.
WealthSure has also written to Mr Oberg’s clients to advise them of his termination however, we hold grave concerns for the clients that we have been unable to contact. We have been advised by certain clients that Mr Oberg has, since his termination, been in contact with them and has attempted to obtain further funds.
It would seem that as a registered agent of the TPB, Mr Oberg’s alleged conduct is in direct breach of the Code of Professional Conduct and, as a result, WealthSure respectfully request for the Board to conduct a thorough investigation into Mr Oberg’s conduct.
There is no evidence before me of any response, or consequence, of this letter. Such evidence as I have does not suggest that any letter to any other client (i.e. other than the applicants) was more helpful than the letter to Mrs Gibson. There was no evidence of any advice at all to the other applicants.
The letter to Miranda Detectives referred to 10 complaints, including one by Mrs Casaclang. Then it said:
After speaking at length with the clients involved, it has come to our attention that certain client monies have been withdrawn from their accounts (without their knowledge) and cannot be accounted for. In at least two situations ([A] and [W]), it appears that cheques were made out to the BT Superwrap but were instead deposited into the following account:
Colin Oberg t/as Colin Oberg & Associates
Institution: NAB
BSB: [number]
Branch: Caringbah
Other client monies have been withdrawn from their accounts and deposited into Mr Oberg’s personal finance company JRCC Finance Pty Ltd (“JRCC”). The clients that were aware of the deposits into JRCC did so on the premise that they would receive the money back plus interest. Other clients were simply not aware.
WealthSure directed Mr Oberg to repay all funds to the clients involved and close down JRCC. WealthSure has since attempted to contact Mr Oberg on several occasions requesting an update on Mr Oberg’s progress in returning the client funds. Mr Oberg has chosen not to respond.
The last complaint in the file (Casaclang) was received by phone on the 28^th March 2012 and, as such, I have not received any documentation as yet.
The response to, or consequence of, this letter was not the subject of evidence.
4. DEALINGS WITH THE APPLICANTS
The evidence about the position of the various applicants is somewhat sketchy. I have only the evidence of some of the applicants themselves, save in the case of Mrs Lucey where I admitted “tendency” evidence under s 97 of the Evidence Act 1995 (Cth), to which I will refer hereunder.
As will be seen, the circumstances in which the applicants who remain in the proceedings came into contact with Mr Oberg vary and no completely uniform position exists. In addition, in one case the interaction continued after Mr Oberg’s authorisation was revoked by WealthSure. Nevertheless, there are some common themes, although it will be necessary to make specific findings of fact in each of the cases when I discuss whether the causes of action have been established. Before the particular events which are the subject of the claims for relief in the present case, all of the applicants had a previous relationship with Mr Oberg who was their accountant and/or tax adviser. Sometimes he had given financial planning advice as the representative of another licensee, before he moved to WealthSure. In each case, he was trusted implicitly.
4.1 Mr and Mrs Casaclang
Camilo and Katrina Casaclang used Mr Oberg as accountant and tax adviser from the mid‑1980s in the case of Mr Casaclang and the mid‑1990s in the case of Mrs Casaclang. Mr Casaclang gave affidavit evidence and was cross-examined. Mrs Casaclang did not give evidence.
Mr Casaclang’s evidence was that in the late 1990s or early 2000s, Mr Oberg mentioned to them that he had an investment opportunity available which provided a 10% return after three months. The money invested was used to provide short-term finance to Mr Oberg’s clients who were having difficulty obtaining finance. It was asserted by Mr Oberg that there was no risk because he carried investment insurance.
Subsequently, over about a ten year period until the late 2000s, Mr Oberg raised the issue again on a number of occasions but the Casaclangs did not have money available to make such an investment.
On or about 6 August 2010, Mr Oberg made a further approach proposing an investment of $70,000 to $75,000 for only three months. Mr Casaclang was assured there was no risk because Mr Oberg had “investment insurance through WealthSure”.
In his initial affidavit, which was sworn at the time he applied that he and his wife become individual applicants in the proceedings, Mr Casaclang said, in [8]:
8.On the basis of Mr Oberg’s advice, my wife and I transferred $75,000 to Mr Oberg on 6 August 2010 for the purpose of investing.
Apparently concerned about some aspects of WealthSure’s pleaded defence, Mr Casaclang swore a further short affidavit on the second day of the hearing which said:
1.I make this affidavit to amend the wording of my previous affidavit dated 9 December 2013.
2.I refer to paragraphs 7 and 8 of my affidavit sworn 9 December 2013. My intention when I transferred $75,000 to Oberg on 6 August 2010, was that:
(a)Oberg would use the money to assist in providing short term loan funds to a client of Oberg in Australia who needed the money for some purpose that was not known to me;
(b)As a result of the money being used in that way, a return of 10% on the moneys would be generated in 3 months for my benefit, and I would receive the moneys back together with the 10% return at that time.
Under cross-examination, Mr Casaclang accepted that the additional evidence arose as a result of discussions with his solicitors. It was put to him that the money he provided to Mr Oberg was really understood by him to be, and in truth represented, a loan to Mr Oberg, but he was firm in his responses that he understood, and intended, it to be an investment.
Mr Casaclang struck me as an honest witness who was not evasive in his answers. I accept his evidence that he thought he was making an investment on favourable terms. He accepted that he had done little to protect his own interests but he had, over the years, invested money on three previous occasions based on Mr Oberg’s advice and had made money as a result.
Mr Casaclang also said, in his first affidavit, that he had not been provided with either a Statement of Advice or a Product Disclosure Statement by Mr Oberg for the investment. Those are obligations under the Corporations Act which are relied upon to support the claims for compensation by WealthSure. I shall discuss those obligations and their significance in due course.
4.2 Mr and Mrs Gibson
Andrew and Jacqueline Gibson also used Mr Oberg as an accountant and tax adviser from the mid-1990s (about 1996). He prepared their annual tax returns from that time.
In about April 2003, Mr Oberg prepared a financial plan for them and thereafter he gave them “regular advice regarding property, investment portfolios and superannuation”.
Mr Gibson received an “Adviser Profile” associating Mr Oberg with WealthSure as its authorised representative. He deposed to receipt of this document around January 2004, but that seems unlikely as Mr Oberg was not appointed as an authorised representative of WealthSure until October 2004. Nothing turns on that discrepancy.
Mr Gibson annexed to his affidavit some statements from his superannuation account with BT Financial Group showing Mr Oberg as his adviser in the years to 30 June 2009 and 30 June 2010. Thereafter, WealthSure was shown as the adviser. This change corresponded to the termination of Mr Oberg’s appointment, but Mr and Mrs Gibson were not informed about that termination until 25 July 2011 in the letter to which I earlier referred.
Mr Gibson said that Mr Oberg approached him between 2008 and 2010 on three or more occasions suggesting an investment for a 10% return in three months. In early September 2010, Mr Oberg telephoned again with the proposal, saying the investment was guaranteed. This was important to Mr Gibson because, to make the investment, he would need to draw on a mortgage account.
Mr Gibson said in his first affidavit at [12]:
12.On the basis of this conversation, my wife and I transferred $50,000 to Mr Oberg on 3 September 2010 for the purpose of investing. …
Like Mr Casaclang, Mr Gibson swore a further affidavit on the second day of the hearing which said:
1.I refer to paragraphs 11 and 12 of my affidavit sworn 5 December 2013.
2.My intention when I transferred $50,000 to Oberg on 3 September 2010, was that Oberg would use the money (in a way that was not known to me) to generate a return of 10% on the moneys in 3 months for my benefit, and I would receive the moneys back together with the 10% return at that time.
When the money had not been returned some months after the three month nominated period, Mr Gibson began pressing Mr Oberg for more information in April 2011 but without success. Mr Gibson made further approaches in September 2011 and on this occasion Mr Oberg responded:
I am still waiting for funds to go into the bank.
I will call you Wednesday.
Regards,
Colin
However, those assurances were empty.
Mr Gibson also struck me as an honest witness. He accepted that he was careless in the supervision of his own affairs but explained that he trusted Mr Oberg. He, like Mr Casaclang, firmly rejected the proposition that he understood he was making a personal loan to Mr Oberg. I believe his denials that such was his understanding or his intention. I accept his evidence that he intended to make an investment recommended to him by a trusted adviser.
Like the Casaclangs, the Gibsons made a single transfer of money to Mr Oberg, intended as a three month investment, while he was an authorised representative of WealthSure. Mr Gibson had no recollection of any Statement of Advice or Product Disclosure Statement and I infer that none was provided.
4.3 Mr and Mrs Goonasekera
The position of Hettige and Marie Goonasekera is less straightforward. It is convenient to say at the outset, however, that I accept that Mr Goonasekera also was generally an honest witness. Mrs Goonasekera provided an affidavit but was not cross-examined.

Mr Goonasekera was careful and apparently candid in his evidence. He was not resistant to reasonable propositions and I had the impression he was doing his best to give truthful evidence in most aspects. There were some aspects of his evidence which were less than satisfactory, however, although they do not affect my overall assessment of his credit.
It became apparent in Mr Goonasekera’s cross-examination that a number of statements attributed to Mr Oberg in an affidavit sworn late in the week before the trial commenced were unreliable reconstructions which did not represent his true recollection. It is impossible to know whether the fault lies with Mr Goonasekera or with those who assisted him in the drafting and settlement of the terms of the affidavit, although he must take ultimate responsibility as the person who swore it.
Despite my misgivings about the reliability of the particular passages, it does not affect my overall assessment of the nature of the financial commitments made by the Goonasekeras and the reasons for them.
The position of the Goonasekeras was complicated by a number of factors, and their exposure to Mr Oberg was significantly more extended than any other of the applicants.
Mr Goonasekera began to use Mr Oberg as his accountant in 1996. About two years later, Mr Oberg informed him that he was also now qualified as a financial planner. Relying on that, Mr Goonasekera started taking advice from Mr Oberg about how to build an investment portfolio and plan for retirement. His reliance on Mr Oberg for those matters continued until discovery of the matters at the heart of the present case.
In 2003, Mr Oberg (who was then an authorised representative of Madison Financial Group Pty Ltd) prepared a long financial plan for Mr and Mrs Goonasekera. Much of its volume arose from the fact that it appears to reproduce a template, with template observations and recommendations, into which their particular financial details are inserted. Nevertheless, specific recommendations were made for the rollover of existing superannuation arrangements into new “BT” superannuation products to be managed for them by Madisons and Mr Oberg. Recommendations for a named range of investments were included but the securities nominated appeared, again, to be drawn from more general or template recommendations based on the “risk profile” assigned to the Goonasekeras. The Goonasekeras accepted the recommendations.
In December 2004, after Mr Oberg’s appointment by WealthSure, Madisons was instructed to “transfer” all their investments to WealthSure.
Mr Oberg gave advice about mortgage arrangements for the Goonasekera family home in Peakhurst Heights, New South Wales, which they continued to hold during absences from Australia referred to shortly. Mr Goonasekera also acted on Mr Oberg’s advice to purchase two investment properties. The properties were selected by Mr Oberg. They were held until last year.
In his initial affidavit sworn on 6 December 2013, Mr Goonasekera said:
13.In or about November each year, I come back to Australia, partly to complete and sign off on my tax return. Each time I returned, I would meet with Colin Oberg.
…
18.Colin Oberg and I worked on trust. I provided him with a power of attorney which he used to assist making investments as I was overseas for all but 2 or 3 weeks in each year.
At the time of that affidavit, Mr Goonasekera believed that he and his wife had transferred a total of $445,500 to Mr Oberg and invested that sum with him. That contention requires examination, and was amended during the course of the proceedings.
In about August 2012, Mrs Goonasekera took a telephone message from a Mr La Rocca who said he had taken over Mr Oberg’s accounting practice. What she was told, and conveyed to her husband, distressed them and they commenced to make enquiries of Mr Oberg, and elsewhere, about the state of their investments. Those enquiries resulted in the provision of more detail about the particular transactions in which Mr Oberg was involved, and the basis for them. The claim by the Goonasekeras in these proceedings which was finally pressed was increased from $445,500 to $590,500. Of that amount, $30,000 relates to three transactions after Mr Oberg’s authority was revoked, but the balance of the transactions occurred while he was an authorised WealthSure representative.
Some examination of the particular transactions is required. Some were the result of Mr and Mrs Goonasekera responding to advice or recommendations from Mr Oberg; some were the outcome of Mr Oberg’s unilateral action.
In November 2006, Mr and Mrs Goonasekera relocated to Kuwait where Mr Goonasekera became employed by a local airline as an aeronautical engineer. Before leaving, on 12 September 2006, Mr Goonasekera gave Mr Oberg a general power of attorney and, it is clear, by that method and more generally authorised him to conduct Mr and Mrs Goonasekera’s affairs in their absence. The arrangements extended to the receipt at Mr Oberg’s office of any statements or correspondence associated with their investments. Everything was left in Mr Oberg’s hands. His day-to-day authority was complete, and Mr Goonasekera intended that it be so. Occasionally, on their (generally) annual return to Australia when they signed their Australian tax returns, Mr Oberg showed Mr Goonasekera the statements which had arrived but it appears that Mr Goonasekera showed no great interest in those and was content with general assertions of the kind to which he deposed in his first affidavit, as follows:
14.At each of the meetings I used words to the following effect:
Me“Is everything fine with my investment?”
Oberg“Yes everything is fine, all your investments are working for you.”
I will return to mention some particular transactions which were made, apparently drawing authority from the power of attorney. However, the general arrangements and the investiture of trust and confidence in Mr Oberg on which they were based, are important matters to bear in mind when the history of other particular transactions is examined.
In about June 2009, in a telephone conversation, Mr Oberg recommended that the “BT” superannuation fund be transferred to a self-managed superannuation fund which Mr Oberg would set up and manage, putting the money “into investments that will earn 10% per annum, which is better than what the BT super fund is earning”. Mr Goonasekera agreed.
Mr Oberg shortly thereafter transferred $175,000 from Mr Goonasekera’s BT superannuation investments to a new account he had established for the self-managed superannuation fund he had recommended. Later, he transferred a further $40,500, drawing upon BT superannuation investments in the name of both Mr and Mrs Goonasekera. Mr Oberg then withdrew amounts from the new superannuation fund account and transferred them to the account of JRCC Finance Pty Limited (“JRCC”), an account under his control. Those amounts, which total $215,500, and the date of the transfers, are as follows:

27 July 2009

$20,000

27 July 2009

$35,000

29 July 2009

$20,000

31 July 2009

$20,000

31 July 2009

$40,000

3 August 2009

$11,000

3 August 2009

$27,000

14 August 2009

$2,000

9 November 2009

$40,000

6 January 2010

$500

The Goonasekeras were unaware of those transfers. They were unilaterally made by Mr Oberg. They were not the result of any specific (or general) advice or recommendation, apart from the advice to set up a self-managed superannuation fund from which Mr Oberg would make investments on their behalf.
In addition, Mr Goonasekera responded to a series of recommendations by Mr Oberg from January 2009 for particular transfers of money. Those recommendations were, in each case, that money be transferred to Mr Oberg for investment by him. The first occasion is illuminated by representations made in writing by Mr Oberg. The subsequent occasions are the subject of evidence by Mr Goonasekera about which I was earlier critical but, despite those criticisms, I am satisfied about the general factual position which is disclosed.
On 14 January 2009, in an email to Mr Oberg, Mr Goonasekera said:
Hope that all is going okay with the investments and house details, especially with all thats happening around the world.
Colin, Marie and I have yet to do the Income Tax for the last financial year. Pls let me know as to whether you could get them done and send it across to me for signatures ( If reqd ). Can see myself getting some leave from work for a few months.
Also I have some money saved up in my account in Sydney, approx. A$ 100,000. Its not doing anything.
Pls let me know as to how that can be put into good use?
Mr Oberg replied on the same day:
With the $100,000 I can arrange a cash investment returning 9% per annum paid monthly.
The share market is still very volatile and in the short term I would rather invest and ensure that your capital remains in tact.
If you would like me to place the investment please arrange to transfer the funds to my trust account the details of which are as follows:
…
The sooner you can transfer the funds the more chance I have of placing the investment at the 9% as the economic gurus are predicting an interest rate drop at the beginning of February so we need to get in beforehand.
Mr Goonasekera replied on 16 January 2009:
I have instructed my sister Jeanine to send you the money for investing.
Mr Goonasekera deposed to a further four conversations with Mr Oberg about investments of a similar nature. All but the last occasion were while he was in Sydney. The last two conversations occurred after WealthSure had revoked Mr Oberg’s authority, and I shall return to that fact.
The conversations occurred on or about 23 October 2009 (Sydney), 29 September 2010 (Sydney), 31 October 2011 (Sydney) and 29 April 2012.
On each occasion, Mr Goonasekera told Mr Oberg that he had a specific sum of money available ($60,000, $40,000, $20,000 to $25,000 and $5,000). On each occasion, Mr Goonasekera deposed in his affidavit of 10 April 2015 (i.e. late in the week before the trial commenced) that Mr Oberg advised him that he should put it into the same investment(s) as before. The specific statements attributed to Mr Oberg in Mr Goonasekera’s sworn affidavit were as follows:

$60,000 Oberg said: “You should put it in the same investment returning 9% per annum as your previous investment. Pay it into my account and I will arrange the investment.”

$40,000 Oberg said: “You should put it in the same investment as your previous investments. Pay it into my account and I will arrange the investment.”

$20,000 to $25,000 Oberg said: “You should put it in the same investment as your previous investments. Give the money to me and I will arrange the investment.”

$5,000 Oberg said: “You should put it in the same investment as the previous investments. Write a cheque to Colin Oberg & Associates and I will arrange the investment.”

The slight differences should be noted. Presumably, they were intended to bolster the idea of specific and careful attention on the part of the deponent to the matters he was addressing.
With respect to the third incident, payment of $25,000 was made in two tranches – $20,000 described hereunder on 31 October 2011 and $5,000 by cheque on 8 November 2011. The circumstances of the first payment were described as follows:
34.Shortly [after the conversation], on 31 October 2011, I went to Westpac, withdrew $20,000 from my account (account number xxxx) and gave that money in cash to Oberg.
Notwithstanding the specificity of the statement attributed to Mr Oberg, and the description of payment of the $20,000 which appeared in the affidavit, when Mr Goonasekera gave his evidence orally under cross-examination a different picture emerged. Mr Goonasekera said he had no particular understanding or expectation about Mr Oberg making any particular investment, or any investment of a particular character. Rather, he intended that Mr Oberg should invest the extra funds as he thought appropriate.
Indeed, he was asked specifically, and answered:
HIS HONOUR: Did he say anything like, “You should put it in the same investment as the previous investments”?---No, he did not.
So far as the payment on 31 October 2011 was concerned, Mr Goonasekera was adamant that he had never handed cash to Mr Oberg. The following exchange occurred:
MR WHITE: You just gave him the cash?---Not actually currency notes.
Well what does:
Gave cash, 20K to Colin at Miranda
mean?---I need to find out how it was deposited. I never gave him cash, like in actual money, to his hand, ever.
HIS HONOUR: What do you mean by paragraph 34 of your affidavit?---Your Honour, though I’ve written it cash, but I never gave him, at any stage, money in hand, like that.
Well, what does that – what do you mean by paragraph 34? Is that true or not? If it’s not true, what was the position?---I withdrew the money from my account but I can’t recollect as to how I gave him the money but never, right through this, that I have given him cash, your Honour.
You say that you wrote the words “gave cash” and you put in your affidavit “gave that money in cash” but that’s not what happened?---That’s correct. As I said, never in cash.
Well, how did you give him the money on that occasion?---I cannot recollect at this stage.
Where Mr Goonasekera’s oral evidence departed from his affidavit evidence, I regard his oral evidence as more reliable. Although the discrepancies do not have much effect on the matters which fall directly for decision, they obviously had the potential to reflect adversely on Mr Goonasekera’s credit. His position under cross-examination was sufficiently clear and unembarrassed that I think it unlikely that Mr Goonasekera was initially responsible for the unreliable picture painted in respect of the matters I have mentioned. I cannot help but think that he was put in a false position as his affidavit was drafted and settled. Ultimately, of course, Mr Goonasekera must take responsibility for the affidavit he swore and I am satisfied that he was insufficiently diligent in that regard. That does not mean, however, that his credit was substantially affected, or that I disbelieve him. On the contrary, his oral evidence, in particular, was sufficiently direct and candid to give adequate support to the general picture.
I am satisfied, therefore, that specific requests for advice were made about how to invest the $130,000 referred to in those conversations, that Mr Oberg advised that it be entrusted to him to invest, and that Mr Goonasekera acted on that advice.
As I mentioned earlier, two of the conversations (31 October 2011 and 29 April 2012) occurred after WealthSure notified Mr Oberg that his authority was revoked. In his latest affidavit, Mr Goonasekera said:
43.I did not know that Oberg’s position as an authorised representative of Wealthsure had been revoked until about November or December 2012 when I met with Mr La Rocca.
44.I did not receive any letter from Wealthsure in July 2011 (or at any time) informing me that Oberg was no longer an authorised representative of Wealthsure. I understand that Ms Blackwell of Wealthsure contends that she sent such a letter to me on or about 25 July 2011 at an address “GPO Box 3989 Sydney”. I did not receive any such letter. That GPO Box number does not belong to me or my wife and never has.
45.Had I received such a letter or otherwise been informed that Wealthsure had revoked Oberg’s authority to continue as an authorised representative, I would have been very concerned and would not have continued to make investments with Oberg unless I had understood the reasons for his removal and been satisfied that there were no doubts about Oberg’s competence or honesty.
I accept this evidence. I think it is likely that Mr Goonasekera would have reviewed the position anxiously if he had cause to question his trust in Mr Oberg, because that was the foundation upon which all the arrangements depended.
In fact, for reasons which were not explained, or explored in cross-examination, shortly after the last transaction, Mr Goonasekera posed a series of questions to Mr Oberg. I will set out the queries and responses in full. Mr Goonasekera wrote, in an email:
Hi Colin
…
There are few things that have been troubling me regarding payments of Taxes, Loan repayments, Super Fund and other expenses, especially as I am away and not in with the system, and also have noted lots of sudden large sum payments in recent times, and further payments towards the end of the financial year?
Firstly re the HDR Super Fund:
Has this fund got to be registered as a company of some nature?
What is this fund all about? Is it an investment? And if it is just a Super Fund, is there any Govt contribution towards it, and is it something additional to any other payment if any, that I am contributing to? And the sudden payment need of $9520 payment.
What is my monthy contribution/Expense towards it?
What taxes do we pay towards same? And if so doesn’t it have to be shown on the same yearly tax returns? Last year 2 sets of tax returns were sent?
Is any payment component Tax Refundable?
What is the end Saving that I will receive and at what stage?
LOANS/REPAYMENTS
Please let me know as to which Banks that I do have loans with and as to the amounts borrowed, and approximate payments monthly/yearly and other fees?
The reason for this is because, every month, the loan repayments are far over the Rents received, and other payments towards the properties, with no tax refunds at the end of the year? Is the Negative gearing system applicable?
Every 3-4 months I keep remitting approximately A$ 20000, and the funds keep reducing for some payment or the other. This does not leave me with anything as and when we do return to Sydney.
INVESTMENT PROPERTIES
Recently I contacted the respective agents who are handling Perth and Wolli Creek properties regarding their values, if I were to sell? The figures given were Perth at A$343K and Wolli Creek at A$430-450K, considering properties sold recently in the same complex.
Considering the other expenses that have to be paid at the time of selling, are we still ahead on these investments considering the monthly payments towards them? And as to how long more should I have to hang on to them?
Regarding Peakhurst, I have no intention of going back to live there, if I had a choice. At his stage I do not have a selling value of that place. I am seriously thinking of getting rid of same when I visit Sydney later in the year, as the property is not really looked after by the tennants and the agent, which will also incur some work to be done prior sale.
My intention is to somehow get a small unit to retire once we get back to Sydney. As I wont have an income then, I somehow have to pay up in full before I finish up in Kuwait. At this present stage, depending on my health etc I plan to be in Kuwait another 2 years or so? As you know I have nearly completed 6 years in Kuwait.
So please let me know as to how I need to plan my near future. I understand that lots of changes are taking place at your end. These issues are troubling me a lot.
Please let me know
Roville [Mr Goonasekera]
Mr Oberg replied:
20^th June, 2012
Dear Roville and Marie,
I received your queries outlining taxes; loans etc and I’ll attempt to answer them as best I can.
Firstly re the HDR Super Fund
The superannuation money for you and Marie are now in a structure that you control rather than be at the mercy of stock market fluctuations.
The superannuation that you had with Qantas and that Marie had have been transferred to this fund from the BT account that we set up years ago.
The funds have been invested in capital stable interest bearing accounts earning 10% per annum and the income will be tax free.
You are not required to make any payments to the fund and there are no government contributions towards it as you are currently a non resident of Australia.
The fees of $9,520 are bills I should have sent you years ago when the funds was originally set up in July 2009. These costs are a once off except for the accounting fee which will be approximately $660 per annum. Further there is a filing fee with ASIC each year for the company of $45.
The end saving will be the return on the investments that you receive of 10% per annum that will be tax free on your return to Australia when you retire.
You will be earning about 22,000 per annum for an outlay of approximately $705 and the principal of $215,000 stays in tact.
Loans/repayments
You have two loans. Homeloans of $280K and ING of $395K. The approximate monthly repayments based on 7% interest payment are $12,000.
Investment Properties
The current values of the properties are the same as when you bought them. There is a downturn in the property market everywhere in Australia at the moment. You should be hanging onto them till the property market improves and sell them as you get closer to retirement in two years time.
I do understand your position with Peakhurst. Marie ends up paying tax on her half of the rental income while your half is absorbed by the tax losses on the other two properties.
In view of your comments it may be prudent to look at selling Peakhurst and reducing your overall debt situation.
With your other investments you should be able to retire in comfort in two years time with a debt free unit in place and money in the bank.
I hope that this helps you not be so troubled.
If you need to know anything else please let me know.
Regards,
Colin

It is impossible to know what to make of Mr Goonasekera’s concluding comment in his own email that: “I understand that lots of changes are taking place at your end. These issues are troubling me a lot”, and he was not cross-examined about the meaning of either statement. There is no evidence to contradict Mr Goonasekera’s assertion that he had no knowledge of any change to Mr Oberg’s authority or association with WealthSure when any of the transactions occurred and I, therefore, accept that evidence. Whether WealthSure could be liable for events occurring outside the period of Mr Oberg’s authority must await later discussion.
I need now to return to the perspective provided by Mr Goonasekera’s oral evidence, which I accept, about the transactions made by Mr Oberg directly under the power of attorney, although assessment of any liability WealthSure might have for the transactions must also be deferred for later discussion.
I am satisfied that, although Mr Goonasekera did not know that Mr Oberg was transferring money out of his self-managed superannuation fund, had he known about those transactions he would not have been concerned because he would have assumed that the transfers were directed to investments in his interests. I am also satisfied that he regarded Mr Oberg as acting directly for him in everything that he might do under the power of attorney. No doubt, he did not anticipate deceit, dishonesty or fraud, because he trusted Mr Oberg, implicitly and expressly. He did not, I am satisfied, ever intend to invest WealthSure with any of the authority under the power of attorney; it was, and was intended to be, personal to Mr Oberg. Nevertheless, giving Mr Oberg the power of attorney was an ingredient in the overall judgment that Mr Goonasekera made that Mr Oberg, a qualified financial planner and an authorised representative of WealthSure, could be trusted in those capacities to deal effectively and advantageously with investments on behalf of the Goonasekeras. Mr Goonasekera regarded the particular arrangements under the power of attorney (which were based on his personal trust of Mr Oberg) as an extension of Mr Oberg’s role as a trusted financial adviser and as an authorised representative of WealthSure.
Some of the evidence on which those conclusions are based is as follows:
MR WHITE: … In that affidavit, the May one, Mr Goonasekera, can you find annexure HG4?---Yes.
You’ve got that. HG4, there is a table, have you got that?---Yes.
Yes. And you see halfway down the table there’s a reference to a direct debit being set up under the power of attorney and there’s a date given of 12 June 2007. Do you see that?---Yes.
And is that something you knew about in 2007?---No.
But you understand, do you now, that that is what happened?---That’s correct, from the documents that was given to me.
And if Mr Oberg had – I take it what your evidence is, is that Mr Oberg didn’t inform you about that in 2007?---No.
But if he had informed you about that you would have been happy for that to happen because you had given him the power of attorney to manage your accounts?---Yes.
…
MR WHITE: And when you signed the power of attorney were you in Australia at the time?---Yes.
In September 2006?---Yes.
And Mr Hancock explained it to you?---Yes.
Was he a solicitor?---Yes.
He wasn’t from WealthSure, to your knowledge, was he?---No. He was in Hurstville.
From Hurstville?---His office is in Hurstville.
Yes. And he explained to you, didn’t he, that you were effectively delegating to Mr Oberg the ability to control your accounts and manage them?---Yes, he did.
And that he could manage your investments without recourse to you?---He didn’t explain that in detail but he said he is – can, you know, manage everything, sign for everything.
You understood that was the effect of it?---Yes.
…
MR WHITE: …. So you understood that when he made a decision, for example, by transferring money from one of your accounts or funds or loans to manage the investments that he was doing that on your behalf?---Yes, I understood that.
…
MR WHITE: In paragraph 7 of the affidavit, that’s the 2015 affidavit, you refer to a recommendation by Mr Oberg that you establish a self-managed super fund? In June 2009; do you see that?---Yes, I see that.
Paragraph 7. And did you understand that that meant that you would be removing your funds from your current super fund and you would be placing it into a new fund that was set up that was in your name and/or your wife’s name and that you would have the ability to make decisions about investments?---Yes.
But you also expected that, as part of the arrangement you had entered into with Mr Oberg, that he would, once the fund was established, make decisions about where the money was invested?---Yes. I followed his guidelines all along.
And, consequently, you weren’t concerned to know which particular investments he would make out of the self-managed super fund?---Can you say that again, please?
You weren’t concerned to know the particulars of the investments that he made with the money that was in the self-managed super fund?---No. Not directly, but every time I saw him, he confirmed that everything was working fine.
…
MR WHITE: … Mr Goonasekera that when Mr Oberg was making decisions about where to invest the money for you, you understood that when he was doing that, and when he carried it out, he was acting as your attorney?---Yes.
Mr Goonasekera also deposed that, apart from the 2003 financial plan and the email on 14 January 2009 about his desire to invest $100,000, Mr Oberg gave no written advice and did not ever provide a Statement of Advice or a Product Disclosure Statement.
4.4 The estate of Mrs Lucey
Mrs Aldemira Lucey died in October 2012 at the age of 84. Affidavit evidence was given in the case brought by an executrix of her estate, her sister Ms Toni Hemming (the applicant) and her daughter Ms Peta O’Connor. In addition, I received particular evidence from other witnesses (some remaining applicants and some former applicants) as “tendency” evidence to which I will refer later.
Ms O’Connor held an enduring power of attorney for her mother from 2005 until Mrs Lucey’s death but she deposed that her mother was both independent and competent and conducted her own affairs.
Mrs Lucey’s husband died in 2002 and she moved to a retirement home in Cairns in 2003. Mr Oberg was her financial adviser from at least 2000, when Mr Oberg was an authorised representative of Madison Securities Pty Limited and Mr Oberg organised investments for her on the “Madison BT Platform”. In April 2005, Mr Oberg advised Mrs Lucey by letter that he had “changed Dealer Groups to WealthSure” and asked her to sign documents transferring her investments “from the Madison BT Platform to the BT Platform”, telling her it was an “administration exercise only”. Both Mr Oberg and WealthSure appear to have been shown as Mrs Lucey’s adviser in BT “Pension Plan” documents after that time.
Some part of the BT arrangements involved the payment to Mrs Lucey of a pension of $2000 per month and at 4 March 2008 the value of her fund was shown as $292,427.54.
Some of that amount was held in shares in managed funds. On 6 and 7 October 2009, a number of those securities were redeemed, to a value of a little over $151,000. On 13 October 2009, Mrs Lucey instructed the transfer of $150,000 from her BT cash account to her account at the Commonwealth Bank of Australia (“CBA”) and on 14 October 2009 that amount showed as a credit to her CBA account. On 15 October 2009, the same amount was withdrawn.
At the same time, on 14 October 2009 Mrs Lucey made a diary note, referring to a telephone conversation with Mr Oberg and noting that $150,000 was to be put into the account of “JRCC Finance” and also noting the BSB and account number for JRCC Finance.
Ms O’Connor deposed that the following year she had a discussion with her mother as follows:
25.In 2011 we discussed her monthly payments because she raised them following a dramatic fall in the monthly amount she was receiving from Colin. She was concerned to know the reasons for the reduction.
Ms O’Connor also deposed to a conversation in August 2010 in these terms:
28.In August 2010 I had a telephone call with mum and Colin Oberg.
29.I made the call in the presence of mum with the phone on loudspeaker so she could hear what was discussed and give her authority to enable me to speak on her behalf.
30.During the course of the conversation I discussed mum’s bank account statements with Colin in words to the following effect:
Me“Colin, mum is concerned that on her bank statements her monthly payments have dropped significantly. Can you tell us why that is?”
Oberg“Yes, because of the financial crash last year. The investment is not making any money. Some of it is actually frozen and not accessible currently.”
Me“But why has the income been cut so drastically when the financial markets are now recovering?”
Oberg“It’s because the investments are still not making any money’’.
31.Mum and I accepted the explanation Colin gave.
Ms Hemming deposed that nothing in Mrs Lucey’s papers indicated that the $150,000 had been returned. Ms O’Connor’s understanding also was that it had not been.
At the trial, counsel for the applicants sought to rely in Ms Hemming’s case for the estate of Mrs Lucey upon a notice given under s 97 of the Evidence Act to support the contentions:
(a)That Colin Oberg induced clients to pay money into bank accounts controlled by Mr Oberg by advising the clients that he would invest the money on their behalf in an investment that would generate a return to the client in the short term;
(b)That Colin Oberg would fail to provide those clients with any product disclosure statement or any written statement of advice; and
(c)That Colin Oberg would fail to return to the client the moneys they invested (or any return on those moneys).
The notice identified the evidence of Mr Casaclang and Mr Gibson as well as evidence from former applicants, Mr Ahrens, Mr Chapman, Mr Doyle, Ms O’Keefe and Mr Telim, to which I will refer hereunder. At the trial, counsel for the applicants also sought leave to rely in Ms Hemming’s case on the evidence of Mr Molden, another former applicant.
Counsel for the respondent opposed any reception of tendency evidence. However, I was satisfied that the evidence appeared to be relevant within the meaning of ss 55 and 56 of the Evidence Act and that, taken with the evidence to which I have referred in Ms Hemming’s case, the evidence appeared to have significant probative value. I therefore ruled that the evidence was admissible as tendency evidence. I gave leave pursuant to s 100 of the Evidence Act for Mr Molden’s evidence to be received for the same reason. At the same time, I rejected an application made by counsel for the respondent that the evidence be excluded under s 135 of the Evidence Act because the probative value of the evidence might be outweighed by the danger of unfair prejudice to the respondent. Mrs Lucey’s death, and the consequent unavailability of direct evidence about the matters to which the tendency evidence is directed, is a relevant circumstance to take into account. The respondent is not “unfairly” prejudiced by the reception of other probative evidence in that circumstance.
Ultimately, the affidavits of Mr Doyle and Ms O’Keefe were not read or relied upon.
Mr Ahrens deposed that Mr Oberg became his tax accountant in about 1994, and thereafter prepared his annual tax returns. Mr Ahrens said, in his affidavit:
9.On the basis of Mr Oberg’s advice, I invested in numerous financial products between 1996 and 2011. These financial products included negative gearing options, offset accounts, managed funds, superannuation and how to go about buying and selling a property. In 2002, Colin also provided some advice on how to buy and sell shares directly on the internet.
10.… In respect of each of these investments, my original outlay was always returned together with all interest payable or the investment is still generating wealth today. None of these investments were handled directly by Mr Oberg nor did they involve transferring any money to Mr Oberg or the respondent.
On 17 May 2011, Mr Ahrens received a telephone call from Mr Oberg who advised him to make an investment in the short term property market, arranged directly by Mr Oberg, which would provide a 15% return in six weeks. The money was required at once. Mr Ahrens transferred $75,000 to him that day, to an account called the “Tuesday Finance Account”. Two days later, Mr Ahrens received a further telephone call to advise him that one of the seven member group of investors had not been able to raise his share in time, and soliciting from Mr Ahrens a further contribution. On 20 May 2011, Mr Ahrens transferred a further $75,000 to Mr Oberg. None of the $150,000 was returned. There was no documentation.
It must be observed that those transactions occurred some months after Mr Oberg’s authority had been revoked and about 19 months after the transfer from Mrs Lucey. Although I ruled that Mr Ahrens’ evidence was amongst the evidence which should be admitted on the question of tendency, now that all the evidence is available for analysis I cannot see in Mr Ahrens’ evidence any basis for any inference about the likely nature of any conversation which Mr Oberg may have had with Mrs Lucey, or the nature of any advice he may have given her. A more general inference is available, and I will discuss it later.
Mr Chapman’s tax accountant (both personal and business) from about 1996 to 1999, and again from 2000, was first one, and then another, accountant working in Mr Oberg’s accountancy practice. Mr Chapman would often see Mr Oberg at his local shopping centre where Mr Oberg’s office then was. At some point, Mr Oberg told Mr Chapman that he was a financial adviser for WealthSure.
Eventually, on 3 March 2011, they met in Mr Oberg’s office in Sydney where Mr Chapman noticed various accreditations from WealthSure even though, by this time, Mr Oberg’s authority had been revoked. Nevertheless, Mr Oberg outlined an investment in which others had joined, spruiking it as a WealthSure investment. The investment was to return 10% in 6‑8 weeks. Over about the next 11 months, Mr Chapman made a series of transfers to Mr Oberg, sometimes with Mr Oberg accompanying him to the bank for that purpose. In respect of three of the transfers, Mr Oberg signed a receipt (which was countersigned by Mr Chapman) indicating that the funds were to be returned in six months (not 6-8 weeks) with 10% interest. Mr Oberg explained the discrepancy to him as the maximum period it might take to complete the investment.
The investment was explained to Mr Chapman as one where WealthSure was assisting a small bank in the United States to take over a larger bank.
Mr Chapman initially made transfers of $60,000 (3 March 2011), $45,000 (23 March 2011), $25,000 (28 March 2011) and $15,000 (30 March 2011). On 6 April 2011, Mr Oberg rang to say that some (not all) of the money had “arrived back” – just under $115,000 of the $145,000 transferred to that point – the remaining $30,000 being “still with WealthSure”. On 18 April 2011, Mr Oberg called suggesting further amounts of investment in the same project and Mr Chapman complied. Thus a further $50,000 (18 April 2011), $10,000 (2 May 2011) and $50,000 (2 February 2012) were transferred to Mr Oberg. Mr Chapman’s total exposure was finally $140,030, which was never returned. Apart from the receipts there was no other documentation.
Again, I am not able to draw particular inferences from these circumstances which bear in a useful way on an understanding of the likely course of events concerning Mrs Lucey, effectively around two years earlier, and before Mr Oberg’s authority was revoked although, again, a general inference is available.
Mr Telim’s accountant worked in the accounting business apparently purchased by Mr Oberg in about 2003, but Mr Oberg was not his accountant personally. In early 2011 (again after revocation of his authority therefore), Mr Oberg rang Mr Telim suggesting an investment with WealthSure for 12 months with a 10% return. Mr Telim went to Mr Oberg’s office and they talked further. On 23 February 2011, Mr Telim transferred $80,000 to Mr Oberg. There was no documentation. The money has not been returned.
Again, this transaction was after Mr Oberg’s authority was revoked and in this case there was no prior history of a relationship between Mr Oberg and Mr Telim based on trust, as there had been, for example, with Mr Ahrens and also with Mrs Lucey, according to her daughter. There was one similarity with Mr Chapman in that Mr Oberg went to the bank with Mr Telim. As with some of the other tendency evidence there is no particular help with Mrs Lucey’s circumstances.
Mr Molden’s exchanges with Mr Oberg were more relevant. From the early 1990s, Mr Oberg was his accountant. In about 2000, Mr Oberg also began providing financial advice to Mr Molden and to his business.
In May 2010, Mr Molden asked Mr Oberg for advice about how to invest some available cash. The advice was to invest it through Mr Oberg for a 10% return in only three months. Mr Molden made a series of transfers; some from company funds and some funded by drawing on a personal home loan line of credit. In this way, he transferred $135,000 in early May 2010 ($50,000 company funds and $85,000 personal funds), $40,000 in early July 2010 (personal funds) and $50,000 in September 2010 (company funds). None of the $225,000 has been returned. There was no documentation.
Mr Molden’s investments were made over the same period as the Casaclangs and the Gibsons were sought. In each of those cases a relationship of trust had developed which appears to have led to an almost unthinking acceptance of Mr Oberg’s advice. The same may be said of Mr Ahrens’ faith in Mr Oberg early in the following year. To that extent, at least, there is the basis for an argument that Mrs Lucey’s earlier investment was likely the product of the same exploitation of trust and was the result of false assurances which were uncritically accepted. Mr Chapman and Mr Telim do not fall as easily into the same category. I accept that they were duped, but there is not the same foundation for a conclusion of breach of a trust which had been established over years arising from a course of conduct which was apparently professional and effective.
The highest inference that can arise from their evidence is that Mr Oberg was prepared to tell a story in order to obtain a transfer into an account he controlled, by promising a secure and profitable investment. I place no real weight on their evidence as tendency evidence.
I discount Mr Ahrens’ evidence also. His case occurred when Mr Oberg was no longer an authorised representative and he was apparently embarked on a course of conduct altogether heedless of professional obligations.
Evidence to which I will refer makes it apparent that complaints about Mr Oberg transferring money from clients’ cash management accounts to one of his own accounts were raised with Mr Oberg in March 2010. The earliest of the affidavit tendency evidence post-dates those events. All of the transactions for the Casaclangs, the Gibsons and Mr Molden post-date those events. I do not know if at some stage Mr Oberg simply threw caution to the winds, or whether he had some pressing financial issue to which those transactions owe their genesis. Whatever the explanation, I cannot finally see in them a particular inference to explain what happened in Mrs Lucey’s case.
I need to be cautious also to find a tendency in events which post-date Mrs Lucey’s transfer.

In Seymour v Seymour (1996) 40 NSWLR 358 the New South Wales Court of Appeal (Mahoney A-CJ, with whom Meagher JA and Abadee A-JA agreed) held, in relation to the meaning of “fraudulently concealed” that:
… there must be in what is involved a consciousness that what is being done is wrong or that to take advantage of the relevant situation involves wrongdoing. At least, this is so in the generality of cases. …
Mr Oberg’s conduct, in this particular respect and more generally, appears to have been marked by both concealment and deceit.
Based on the evidence before me, I am satisfied that Mr Oberg fraudulently concealed the cause of action which arises in relation to those payments and that, as against him, the time until discovery of the payments does not count. WealthSure claimed that the effect of s 55(3) was that there was no postponement of the bar so far as it was concerned. However, I accept the submission for the applicants that s 769B(1) has the effect that the applicants have the same remedies against WealthSure as they would have against Mr Oberg. It follows that the limitation period stated by s 14 of the Limitation Act does not bar the claim in negligence against WealthSure.
Subject to the next argument to be considered, the Goonasekeras are entitled to recover from WealthSure, as damages for negligence, the $145,000 paid away by Mr Oberg in 2007. They are also entitled to recover at least the amounts paid to JRCC Finance from the HDR Super Fund account in the period when Mr Oberg was an authorised representative – i.e. $215,500.
WealthSure argued that a cause of action in negligence was an inappropriate remedy to address Mr Oberg’s conduct. It relied upon the judgment of Sheppard J in Hunter Grain Pty Ltd v Hyundai Merchant Marine Co Ltd and Malaysian International Shipping Corporation Bhd (1993) 117 ALR 507; [1993] FCA 133, where his Honour said (at 526):
There remains the cause of action based on negligence. There is much to be said for the view that Hyundai [sic: the plaintiff] is entitled to succeed on this cause of action, but the conduct engaged in by Hyundai and its employees and agents was deliberate. It is not a case of the clean receipt contained in the bill of lading having been given in circumstances which demonstrate that Hyundai was in breach of a duty owed to the plaintiff to take reasonable care in relation to the receipt which it signed. It is not a case involving negligent conduct. It is a case of deliberately embarking upon a course of conduct which was deceitful and dishonest. In these circumstances, I do not think that the cause of action in negligence is appropriate for the circumstances of this case.
(Emphasis added.)
But in that case the plaintiff succeeded in fraud on the same facts, and in contract. No question of additional relief would arise. The observation that a cause of action in negligence was, in the circumstances of that case, inappropriate should not be read, in my respectful view, as a statement that it was legally unavailable.
WealthSure relied on Williams v Milotin (1957) 97 CLR 465 (at 470, 474) to support a proposition (as I understood it) that intentional conduct will not ground an action in negligence but must be vindicated in some other cause of action based on intentional conduct. I see no real support for that proposition in Williams v Milotin, which was a limitation case.
The case is a complicated one, which turns on historical considerations. In my respectful view, it does not stand for the proposition that an action in negligence cannot be based on intentional conduct, including an intention to take money.
The reasoning in Williams v Milotin was explained by the judgments of the Full Court of the Supreme Court of Tasmania in Wilson v Horne (1999) 8 Tas R 363, where it was held:
(1)The fact that circumstances complained of by a plaintiff might fit more than one category of tort and might, in this case, be more appropriately described as trespass rather than negligence, is not sufficient to deprive a court of jurisdiction to entertain an action in the latter form. The plaintiff was entitled to pursue whichever cause of action she preferred.
Williams v Milotin (1957) 97 CLR 465, explained.
[Special leave to appeal to the High Court from this judgment was refused, Gleeson CJ observing that an appeal enjoyed insufficient prospects of success].
Cox CJ referred to the same line of argument as WealthSure advanced in the present case (that negligence cannot be constituted by intentional conduct, and reliance on Williams v Milotin) and said (at 367):
7In my view, that case is not authority for the proposition relied upon by the plaintiff, but establishes that prior to the introduction of the judicature system, a direct and intentional application of force only gave rise to an action for trespass. A recent example of conduct involving an intentional trespass to the plaintiff's person but pleaded in negligence is Gray v Motor Accident Commission …
In Gray v Motor Accident Commission (1998) 196 CLR 1, the High Court dealt with whether exemplary damages could be awarded as a punishment in a negligence case. Gleeson CJ, McHugh, Gummow and Hayne JJ said (at [21]-[24]):
Negligence and exemplary damages
21Provoked by differing limitation periods for claims for damages for personal injury caused by negligence and other torts, there was a deal of debate in the 1960s about whether trespass to the person could be committed negligently.
22We do not think it necessary to revisit that debate. No question arises here of an intentional wrong being committed by inadvertence. For present purposes it is enough to note two things. First, exemplary damages could not properly be awarded in a case of alleged negligence in which there was no conscious wrongdoing by the defendant. Ordinarily, then, questions of exemplary damages will not arise in most negligence cases be they motor accident or other kinds of case. But there can be cases, framed in negligence, in which the defendant can be shown to have acted consciously in contumelious disregard of the rights of the plaintiff or persons in the position of the plaintiff. Cases of an employer’s failure to provide a safe system of work for employees in which it is demonstrated that the employer, well knowing of an extreme danger thus created, persisted in employing the unsafe system might, perhaps, be of that latter kind. No doubt other examples can be found.
23In many jurisdictions in the United States reckless indifference to the rights of others and other culpable conduct short of malicious intent is sufficient for the issue of an award of exemplary damages to be left to a jury.
24Secondly, the present proceeding, although said to have been framed as an action in negligence, appears to have been conducted at trial as if it were a claim in trespass. The allegation made in the appellant’s statement of claim, and pursued at trial, was that Bransden drove his vehicle “deliberately towards [the appellant] without regard for the safety of [the appellant]” and such evidence of the events as was given at trial was all directed to showing Bransden deliberately inflicted injury on the appellant. Whatever may be the true characterisation of the pleading, the case was conducted as one of conscious wrongdoing by the tortfeasor.
(Emphasis added.) (Footnotes omitted.)
Nothing in that case holds that the negligence case was unavailable.
In New South Wales v Lepore (2003) 212 CLR 511, McHugh J referred to Williams v Milotin and Gray v Motor Accident Commission as follows (at [162]):
162The plaintiff elected to sue the teacher for trespass to the person. But if it matters — and I do not think it does — the plaintiff could have sued the teacher in negligence. An action for negligent infliction of harm is not barred by reason of the intentional act of the person causing the harm. Historically, as long as a plaintiff did not make the intention of the defendant part of the cause of action, the plaintiff could sue in trespass to the person or by an action on the case for the direct infliction of force. At all events, that was the position before the enactment of the Common Law Procedure Act 1852 (UK) and its analogues in Australia (247). Since the abolition of the forms of action, a plaintiff may, if he or she chooses, sue in negligence for the intentional infliction of harm (248).
(247)Williams v Milotin (1957) 97 CLR 465 at 470-471.
(248)Gray v Motor Accident Commission (1998) 196 CLR 1.
(Emphasis added.)
I propose to proceed upon the basis that an action in negligence is not rendered unavailable because the conduct of Mr Oberg may be viewed as involving the intentional infliction of economic loss.
There were two causes of action in negligence pressed against WealthSure directly. They related first to the period when Mr Oberg was an authorised representative of WealthSure and secondly to the period after the revocation so far as the Goonasekeras were concerned.
There are various reasons why the first of those cannot succeed.
The duty of care postulated was one to effectively monitor and superintend Mr Oberg’s conduct. Various mechanisms and procedures were suggested but they do not need detailed consideration. The relevant obligations were those imposed by the Corporations Act, in any event (s 912A).
In the case of the Casaclangs, the Gibsons and Mrs Lucey, where only one transaction was involved, it cannot be suggested with sufficient confidence that any system of the kind proposed would more likely than not have avoided the loss, rather than yielding a possibility of its earlier discovery, but still after the event. This aspect of the cause of action cannot succeed in my view.
As for the Goonasekeras, the procedures proposed cannot be predicted to have avoided the $200,000 loss (i.e. $230,000 less $30,000), which could easily have been kept “off the books” and concealed from WealthSure. Nor can it with reasonable confidence be predicted to have avoided transfer of $215,500 to a self-managed superannuation fund from which location it may, again, have simply been kept “off the books”. At least, it may not be accepted, in my view, that more probably than not either those or the subsequent transactions would have been avoided.
In the case of the $145,000 transferred during 2007, the claim against WealthSure directly is statute barred by s 14 of the New South Wales Limitations Act. The Goonasekeras do not have the benefit of the operation of s 55(1) of that Act in a case against WealthSure in its own right, because of s 55(3).
The relevant obligations of superintendence and otherwise are stated by Part 7.6 (see especially s 912A). Consequences for failure to meet those standards are given by the Corporations Act. The statutory scheme may well both identify and confine available relief with respect to those matters in a way which excludes common law actions (see Josephson v Walker (1914) 18 CLR 691) although it is not necessary to come to a final view about that because relief should be granted for the reasons I gave earlier.
The negligence claim for the period after Mr Oberg’s authority was revoked must be considered separately. I consider that WealthSure did have a duty of care to take steps to alert at least those clients of Mr Oberg who had been put into WealthSure approved products (and from which WealthSure earned commission) that Mr Oberg’s authority had been revoked. There was sufficient evidence before WealthSure by that time that Mr Oberg had been interfering in funds held in such products.
I am satisfied that the duty was breached, that loss was foreseeable and that the Goonasekeras would have taken some steps which would have avoided the further loss of $30,000. That money was transferred by Mr Goonasekera in response to advice. I accept his evidence that he would not have done so had he been warned.
This conclusion does not lead to any additional relief, but it provides further support for my earlier finding that WealthSure is liable to the Goonasekeras for the $30,000 which they transferred to Mr Oberg after he ceased to be an authorised representative.
The findings which I have made to this point will, it will be seen, suffice to explain all the relief to which, in my view, the applicants are entitled. However, I shall deal with further claims for relief which were also relied on.
8.3 Part 7.7
When personal advice is provided to a retail client by an authorised representative in that capacity Division 3 of Part 7.7 applies (s 944A(a)(ii) and (b)). The advice must only be provided if there is a reasonable basis for it (s 945A(1)).
Part 7.7 provides its own method and tests for attributing liability to a licensee (s 953B). In the case of a contravention of s 945A a licensee will be a “liable person” from whom loss or damage resulting from the contravention may be recovered (s 953B(2)(c) and (3)(b)).
Advice is “personal advice” where the provider of the advice has considered a person’s objectives, financial situation or needs, or a reasonable person might expect the provider to have done so (s 766B(3)). Each of the applicants is presumed to be a retail client because there was no evidence to the contrary (s 761G(9)) but, in any event, they fall within that description (s 761G(1)).
It is important, however, that the advice be given to the client by a provider in the capacity of authorised representative. It will be necessary to consider the position of the applicants separately because there are some differences.
In the case of the Casaclangs, I accept Mr Casaclang’s evidence that Mr Oberg said the proposed investment was covered by insurance through WealthSure. However, in my view Part 7.7 is not directed to misrepresentations about the true position (that is dealt with elsewhere), but to defects or omissions in the quality or nature of advice or material supplied. The obligation to provide a Statement of Advice and Financial Services Guide also arises under Part 7.7 and the question of defects is addressed directly. In my view, the statutory scheme is directed at this point to the nature and quality of advice, disclosures and notice (whether oral or written), given by a licensee, or by an authorised representative. In the case of Division 3 of Part 7.7, and s 945A, the consequences which are provided for a failure of the statutory standards appear to me to apply to conduct which is in fact (rather than as a matter of mere representation) undertaken as an authorised representative. The position may be distinguished from the matters dealt with in s 917B which applies whether or not the conduct of a representative is within authority.
There is no basis to think that what Mr Oberg proposed to the Casaclangs actually represented a proposed investment in a WealthSure approved product. I would not be prepared to find WealthSure liable for breach of s 945A in those circumstances.
The same conclusion must be reached in the case of the Gibsons. The fact that Mr Oberg had, at an earlier time, provided a copy of the Adviser Profile and Financial Services Guide on WealthSure letterhead does not establish that in early September 2010 Mr Oberg in fact or reality acted in his capacity as an authorised representative of WealthSure when he proposed the investment of $50,000 which Mr Gibson thought he made on 3 September 2010.
In Mrs Lucey’s case, there is no evidence what advice was given. The suggestion of inadequate advice seems highly plausible but it rests on supposition. The matters which suggest the supposition, however, tend strongly against any contention that Mr Oberg was acting at that point as an authorised representative of WealthSure, except for one matter. Mrs Lucey’s notice of withdrawal of funds from her BT facility named Mr Oberg as her representative and was sent by facsimile to BT from Mr Oberg’s office. In my view, a conclusion is open in this case that Mr Oberg was acting under, and in fact using, the authority which WealthSure and BT had given him as an authorised representative of WealthSure in relation to BT products.
I think I may infer from the facts that I know, and the surrounding circumstances, that the advice to Mrs Lucey was a step on the way to Mr Oberg coming into possession of the money withdrawn from the BT facility, and a step in the loss of the funds which, for practical purposes, occurred when they passed out of Mrs Lucey’s Commonwealth Bank account and into Mr Oberg’s control. That advice, I am satisfied, failed the test in s 945A(1) which provides:
945A 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)).
WealthSure is, therefore, liable for any loss or damage suffered because of the contravention. I am satisfied that the transfer from the BT facility, and thereafter to Mr Oberg, would not have been made if any advice given conformed to s 945A(1). WealthSure is, therefore, separately liable to compensate the estate of Mrs Lucey for the loss of $150,000.
Similar considerations apply to part of the claims made by the Goonasekeras.
Although formally pleaded it was not ultimately submitted that s 945A applied to the amounts totalling $145,000 taken by Mr Oberg in 2007. These amounts were taken directly by Mr Oberg.
I am not satisfied, for reasons given in relation to the Casaclangs and the Gibsons, that any part of the advice given periodically by Mr Oberg in relation to the $230,000 which was progressively transferred by Mr Oberg (i.e. $200,000 while he was an authorised representative) was given in the capacity of an authorised representative.
However, the advice to take money out of the BT facilities to put into the HDR Super Fund, which was accepted by Mr Goonasekera, was implemented by Mr Oberg acting under his express authority from WealthSure and BT as an authorised representative of WealthSure. Mr Oberg acted on that authority to transfer $175,000 from Mr Goonasekera’s BT SuperWrap facility on 21 to 23 July 2009, and transfer $22,000 from Mr Goonasekera’s BT SuperWrap account and $18,500 from Mrs Goonasekera’s BT SuperWrap account on 2 to 5 November 2009.
I am satisfied that if the advice given in June 2009 to set up a self-managed superannuation fund, from which Mr Oberg might make investments had conformed to s 945A(1), Mr Goonasekera would not have approved the proposal. Acceptance of the advice led directly to the money being placed by Mr Oberg under his own control and the money being lost to the Goonasekeras. WealthSure is liable for the loss ($215,500) under s 953B.
Division 3 of Part 7.7 also contains a requirement that retail clients be given a written Statement of Advice. I am satisfied that none of the applicants was given such a document in relation to any of the transactions I am considering. Section 947C states the main requirements to be observed. Additional requirements to be observed when the advice recommends the replacement of one product with another are stated in s 947D.
Section 947C(6) provides:
947CStatement of Advice given by authorised representative—main requirements
…
(6)The statements and information included in the Statement of Advice must be worded and presented in a clear, concise and effective manner.

It is an offence not to give a Statement of Advice (s 952C), to give a Statement of Advice knowing it to be defective (s 952D) and, in some circumstances, to give a defective Statement of Advice whether or not it is known to be defective (s 952E). It is clear, therefore, that the statutory premise in Part 7.7 is that a Statement of Advice will contain accurate, effective and sufficiently comprehensive advice to allow a properly informed decision by a retail client. It may, therefore, be taken, in my view, that if the true position was revealed none of the applicants would have made any of the transactions.
However, the limitations in Division 3 of Part 7.7 which I have already discussed apply here also. For that reason, any possibility of relief is confined to Mrs Lucey and to part of the claims ($215,500) by the Goonasekeras.
I think I may safely infer that Mrs Lucey was not given a Statement of Advice which met the statutory standard. I accept that the Goonasekeras were not given such an advice. WealthSure is liable for loss or damage which is suffered because a Statement of Advice was not given by an authorised representative (s 953B(1)(a), (2)(a), (3)(b)).
I am satisfied, as before, the relevant transactions would not have occurred if a Statement of Advice in proper form had been given.
WealthSure is, therefore, liable on this additional ground to compensate the estate of Mrs Lucey for her loss of $150,000 and the Goonasekeras for their loss of $215,500.
8.4 Statutory duty of care
I have deferred consideration of this cause of action (direct reliance on s 912A) to this point because it, also, is based on an allegation of a duty owed to retail clients. I have accepted that each of the applicants was a retail client.
Section 912A states the general obligations of a licensee, which apply in regard to retail clients, amongst others. Section 912B requires compensation arrangements to be put in place to protect retail clients.
WealthSure’s defence denied that an alleged breach of s 912A was directly actionable on the part of the applicants individually.
No written or oral submission was advanced to this issue to argue that any separate statutory liability arose from s 912A. I will, therefore, not consider it further as a separate head of claim.
8.5 Part 7.9
Section 1012A sets out the circumstances in which personal financial product advice to a retail client must be supported by a Product Disclosure Statement. Each of the opening conditions is satisfied with respect to the Casaclangs and the Gibsons. I am satisfied that the conditions are also satisfied in the case of Mrs Lucey. They are satisfied in the case of the advice to the Goonasekeras in June 2009 which led to the loss of $215,500 and in relation to some (but not all) of the elements of the loss of $230,000 which resulted from Mr Goonasekera seeking and acting on Mr Oberg’s recommendations from time to time. The initial $100,000 in that group of transactions is not covered because s 1011A(1) provides that s 1012A only applies to advice and recommendations received within the jurisdiction. Mr Goonasekera received advice about that investment in Kuwait. Section 1012A does not apply to the $30,000 lost after Mr Oberg’s authority was revoked because he was no longer a “regulated person” within the meaning of s 1011B (s 1012A(1)).
The main requirements for a Product Disclosure Statement are set out in s 1013D. Section 1013E provides:
1013EGeneral obligation to include other information that might influence a decision to acquire
Subject to subsection 1013C(2) and sections 1013F and 1013FA, a Product Disclosure Statement must also contain any other information that might reasonably be expected to have a material influence on the decision of a reasonable person, as a retail client, whether to acquire the product.
It is an offence to fail to provide a Product Disclosure Statement when it is required, or to give a defective Product Disclosure Statement. For similar reasons to the Statement of Advice, I am satisfied that if a Product Disclosure Statement had been given as required the relevant transactions would not have been made, and the loss has flowed sufficiently directly from Mr Oberg’s failure to comply with those obligations.
Like Part 7.10, Part 7.9 contains its own mechanisms and methods for attributing responsibility for a relevant failure. WealthSure is made liable for Mr Oberg’s failures instead of him (s 1022B(1)(a), (2)(a), (4)(a)).
That liability, I am satisfied, requires WealthSure to compensate the Casaclangs and the Gibsons for their losses. I am satisfied that I should infer that no Product Disclosure Statement was given to Mrs Lucey for the same reasons I gave about the Statement of Advice. Her estate must, therefore, be compensated for the $150,000 loss she sustained.
I accept Mr Goonasekera’s evidence that he was not ever given a Product Disclosure Statement. The Goonasekeras are entitled to compensation under this head of $215,500 flowing from the advice in June 2009, and $100,000 of the losses flowing from Mr Oberg’s advice from time to time after January 2009 while he was an authorised representative.
Of course, those findings only supplement, in various ways, earlier conclusions about liability and do not add to the relief already assessed.
8.6 The ASIC Act
To meet the allegation that various transactions involved the provision of credit facilities, rather than financial products, the applicants relied on various provisions of the ASIC Act where the asserted limitation or exclusion does not apply. It is not necessary for me to deal with this alternative.
8.7 Contract
There were two elements to the pleaded case in contract. One was, by a late amendment, that promises to repay and about rates of return on their investments to the Casaclangs and the Gibsons were contractual, so that Mr Oberg was liable to repay the investments plus 10% and WealthSure was liable under Part 7.6.
This case does not sit very comfortably with the proposition that the arrangements with Mr Oberg did not involve the provision of credit to him personally, which I have accepted. In any event, I am not satisfied that there was any contract of the kind suggested. The evidence does not support any proposition of a promise to repay with interest come what may and it does not identify any consideration which might support a contract. No liability arises in this way.
The other contractual case asserted in the pleadings was that Mr Oberg’s “retainer” by each of the applicants gave rise to an implied contractual term that Mr Oberg would exercise due care and skill in providing his services.
This pleaded case, which was also advised by a late amendment, does not really add anything in terms of relief to the matters I have already discussed and it was addressed in the written submissions (as it was in the pleadings) as concurrent with negligence. However, it invites recognition in its own right for the reasons which follow.
A duty to exercise reasonable care in the provision of professional services arises as a contractual duty by implication of law, concurrently with a liability in tort (Astley v Austrust Ltd (1999) 197 CLR 1 at [47]; see also Selig v Wealthsure Pty Ltd (2013) 94 ACSR 308 per Lander J at [868]-[869]). Mr Oberg breached that duty. WealthSure is liable for that conduct at least under s 769B(1) for reasons earlier given. Division 6 of Part 7.6 also applies to the extent discussed earlier. In the present case, the different causes of action in tort and contract give rise to no different measure of damages. My conclusion about this issue is, therefore, a further reason why WealthSure is liable to the Casaclangs and the Gibsons, to the estate of Mrs Lucey and to the Goonasekeras for all their loss in one way or another.
In this particular case, consideration arises from the nature of the relationship, and the fact that the professional is rewarded for it. That is distinguishable from my observations earlier about the lack of consideration for any particular contract concerning the specific transactions involving the Casaclangs and the Gibsons.
WealthSure’s liability for the breach by Mr Oberg of this implied contractual term is a further foundation for relief for each of the applicants to the full extent of their claims.
9. SUMMARY
The various principal amounts I have decided may be recovered by the applicants, and the various independent foundations for that recovery, may be summarised as set out hereunder:

Casaclangs

$75,000

- Corporations Act s 1041I, based on contravention of s 1041E

- Corporations Act s 1041E in combination with s 769B

- negligence in combination with s 769B

- Corporations Act s 1022B based on contravention of s 1012A

- breach of contract in combination with s 769B

Gibsons

$50,000

- Corporations Act s 1041I based on contravention of s 1041E

- Corporations Act s 1041E in combination with s 769B

- negligence in combination with s 769B

- Corporations Act s 1022B based on contravention of s 1012A

- breach of contract in combination with s 769B

Estate of Mrs Lucey

$150,000

- Corporations Act s 1041I based on contravention of s 1041E

- Corporations Act s 1041E in combination with s 769B

- negligence in combination with s 769B

- Corporations Act s 953B based on contravention of s 945A

- Corporations Act s 953B based on contravention of s 947C

- Corporations Act s 1022B based on contravention of s 1012A

- breach of contract in combination with s 769B

Goonasekeras

$200,000

- Corporations Act s 1041I based on contravention of s 1041E

- Corporations Act s 1041E in combination with s 769B

- negligence in combination with s 769B

- Corporations Act s 1022B based on contravention of s 1012A

(but only as to $100,000)

- breach of contract in combination with s 769B

$30,000

- Corporations Act s 1041E in combination with s 769B

- negligence in combination with s 769B

- direct liability in negligence

- breach of contract in combination with s 769B

$145,000

- negligence in combination with s 769B

- breach of contract in combination with s 769B

$215,500

- negligence in combination with s 769B

- Corporations Act s 953B based on contravention of s 945A

- Corporations Act s 953B based on contravention of s 947C

- Corporations Act s 1022B based on contravention of s 1012A

- breach of contract in combination with s 769B

10. CONCLUSION

Each of the applicants is entitled to relief by way of damages or compensation for the loss identified, plus interest from the date of those losses which is, I am satisfied, in each case the date of transfer of funds to the control of Mr Oberg.
The applicants should bring in short minutes of order within 14 days to give effect to the conclusions in this judgment.

I certify that the preceding three hundred and ninety-five (395) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan.
Associate:
Dated: 27 July 2015

Citation:	Casaclang v WealthSure Pty Ltd [2015] FCA 761
Parties:	CAMILO CASACLANG, KATRINA CASACLANG, ANDREW GIBSON, JACQUELINE GIBSON, HETTIGE DON ROVILLE GOONASEKERA, MARIE ANTOINETTE KANTHI GOONASEKERA and TONI HEMMING IN HER CAPACITY AS EXECUTRIX OF THE ESTATE OF ALDEMIRA LUCEY v WEALTHSURE PTY LTD ACN 097 405 108
File number(s):	NSD 169 of 2013
Judge(s):	BUCHANAN J
Date of judgment:	27 July 2015
Catchwords:	CORPORATIONS – financial services and markets – holder of an Australian financial services licence (“licensee”) – authorised representative of a licensee – where authorised representative alleged to have contravened provisions in Parts 7.7, 7.9 and 7.10 of Chapter 7 of the Corporations Act 2001 (Cth) – where authorised representative alleged to have caused loss and damage to clients in negligence and breach of contract – whether conduct of authorised representative related to a “financial product” – whether investment by clients was provision of a “credit facility” within the definition of reg 7.1.06(1) of the Corporations Regulations 2001 (Cth) – whether licensee liable for conduct of authorised representative under Division 6 of Part 7.6 of the Corporations Act – whether licensee liable under s 769B of the Corporations Act for conduct of authorised representative having actual or apparent authority – whether licensee liable in negligence for conduct of former authorised representative after revocation of authorised status
Legislation:	Australian Securities and Investments Commission Act 2001 (Cth) Competition and Consumer Act 2010 (Cth), Sch 2 Corporations Act 2001 (Cth), ss 79, 760A, 760B, 761A, 761E, 761E(1), 761G, 761G(1), 761G(9), 762C, 762C(b), 762C(c), 763A, 763A(1), 763A(1)(a), 763A(1)(c), 763B, 763B(a), 763B(a)(ii), 763B(b), 764A, 765A, 765A(1)(h)(i), 766A, 766A(1)(a), 766A(1)(b), 766B, 766B(1), 766B(3), 766C, 766C(1)(a), 766C(1)(b), 766C(1)(d), 766C(1)(e), 766C(2), 769B, 769B(1), 769B(2), 769B(3), 769B(7), 769B(10)(b), 769B(10)(c), 769C, 910A, 911A, 911A(1), 911B, 911C, 912A, 912A(1)(a), 912A(1)(aa), 912A(1)(c), 912A(1)(ca), 912A(1)(d), 912A(1)(h), 912B, 912B(1), 916A, 916A(1), 916A(4), 916F, 916F(1), 916F(3), 917A, 917A(1), 917A(1)(a), 917A(1)(b), 917A(1)(c), 917B , 917E, 917F, 917F(1), 917F(2), 917F(3), 917F(4), 944A, 944A(a)(ii), 944A(b), 945A, 945A(1), 947C, 947C(6), 947D, 952C, 952D, 952E, 953B, 953B(1)(a), 953B(2)(a), 953B(2)(c), 953B(3)(b), 1011A, 1011A(1), 1011B, 1012A, 1012A(1), 1013D, 1013E, 1022B, 1022B(1)(a), 1022B(2)(a), 1022B(4)(a), 1041E, 1041E(1)(a), 1041E(1)(b)(i), 1041E(1)(b)(ii), 1041E(1)(c), 1041E(1)(c)(i), 1041E(1)(c)(ii), 1041F, 1041F(1)(a), 1041F(1)(b), 1041F(2), 1041H, 1041H(1), 1041H(2)(a), 1041H(2)(b)(i), 1041I, 1041I(1), 1041I(1B)(a), 1041J, 1041L, 1041L(1), 1041L(2), 1041L(4), 1041S, 1041S(a), 1311(1) Corporations Regulations 2001 (Cth), regs 7.1.06(1)(a), 7.6.02AAA(1) Evidence Act 1995 (Cth), ss 55, 56, 97, 100, 135 Federal Court of Australia Act 1976 (Cth), s 33C Limitation Act 1969 (NSW), ss 14, 55(1), 55(3) LexisNexis Butterworths, Australian Corporations Legislation, 2010 edition
Cases cited:	Astley v Austrust Ltd (1999) 197 CLR 1 Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 Gray v Motor Accident Commission (1998) 196 CLR 1 Hunter Grain Pty Ltd v Hyundai Merchant Marine Co Ltd and Malaysian International Shipping Corporation Bhd (1993) 117 ALR 507; [1993] FCA 133 Joel v Morison (1834) 6 C & P 501; 172 ER 1338; [1834] EWHC KB J39 Josephson v Walker (1914) 18 CLR 691 Larsson v WealthSure Pty Ltd [2013] FCA 926 New South Wales v Lepore (2003) 212 CLR 511 Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 Selig v Wealthsure Pty Ltd [2015] HCA 18 Selig v Wealthsure Pty Ltd (2013) 94 ACSR 308 Seymour v Seymour (1996) 40 NSWLR 358 Williams v Milotin (1957) 97 CLR 465 Wilson v Horne (1999) 8 Tas R 363 Zhang v Minox Securities Pty Ltd; Liu v Minox Securities Pty Ltd [2008] NSWSC 689
Date of hearing:		13, 14, 15, 16, 20, 21, 22 April 2015
Place:		Sydney
Division:		GENERAL DIVISION
Category:		Catchwords
Number of paragraphs:		395
Counsel for the Applicants:		Mr N Kidd SC with Mr SS Ahmed
Solicitor for the Applicants:		Mills Oakley Lawyers
Counsel for the Respondent:		Mr MS White SC with Mr P Holmes
Solicitor for the Respondent:		Clyde & Co

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 169 of 2013

JUDGE:	BUCHANAN J
DATE OF ORDER:	27 JULY 2015
WHERE MADE:	SYDNEY

JUDGE:	BUCHANAN J
DATE:	27 JULY 2015
PLACE:	SYDNEY

1 INTRODUCTION	[1]
1.1 The applicants	[1]
1.2 The claims	[5]
1.3 Mr Oberg	[8]
1.4 WealthSure	[10]
2 THE LICENSING SCHEME IN OUTLINE	[12]
3 MR OBERG’S AUTHORISATION	[23]
3.1 Appointment	[23]
3.2 Suspension and termination	[31]
3.3 Advice to clients	[35]
4 DEALINGS WITH THE APPLICANTS	[43]
4.1 Mr and Mrs Casaclang	[45]
4.2 Mr and Mrs Gibson	[54]
4.3 Mr and Mrs Goonasekera	[65]
4.4 The estate of Mrs Lucey	[106]
5 EVIDENCE ARISING IN THE RESPONDENT’S CASE	[138]
6 GENERAL LINES OF ARGUMENT	[175]
7 ATTRIBUTION OF LIABILITY TO WEALTHSURE	[181]
8 THE CAUSES OF ACTION	[209]
8.1 Part 7.10	[213]
*8.1.1 The Casaclangs*	[253]
*8.1.2 The Gibsons*	[280]
*8.1.3 The estate of Mrs Lucey*	[285]
*8.1.4 The Goonasekeras*	[293]
8.2 Negligence	[315]
8.3 Part 7.7	[352]
8.4 Statutory duty of care	[374]
8.5 Part 7.9	[378]
8.6 The ASIC Act	[385]
8.7 Contract	[386]
9 SUMMARY	[393]
10 CONCLUSION	[394]

Basic Deposit Products	Managed Investments, including
Deposit Products other than basic deposit products	· Mastertrusts, Wrap Facilities, Property Syndicates
· Margin Lending Products
Life products including:	· Tax-effective investments
· Investment life insurance products and	Securities
· Life risk insurance products	Government debentures stocks and bonds
Superannuation, including
· Public Offer Superannuation Funds	Retirement Savings Account
· Corporate Superannuation
Option Contracts and Warrants	To wholesale and retail clients.

27 July 2009	$20,000
27 July 2009	$35,000
29 July 2009	$20,000
31 July 2009	$20,000
31 July 2009	$40,000
3 August 2009	$11,000
3 August 2009	$27,000
14 August 2009	$2,000
9 November 2009	$40,000
6 January 2010	$500

Casaclangs
$75,000	- Corporations Act s 1041I, based on contravention of s 1041E
- Corporations Act s 1041E in combination with s 769B
- negligence in combination with s 769B
- Corporations Act s 1022B based on contravention of s 1012A
- breach of contract in combination with s 769B
Gibsons
$50,000	- Corporations Act s 1041I based on contravention of s 1041E
- Corporations Act s 1041E in combination with s 769B
- negligence in combination with s 769B
- Corporations Act s 1022B based on contravention of s 1012A
- breach of contract in combination with s 769B
Estate of Mrs Lucey
$150,000	- Corporations Act s 1041I based on contravention of s 1041E
- Corporations Act s 1041E in combination with s 769B
- negligence in combination with s 769B
- Corporations Act s 953B based on contravention of s 945A
- Corporations Act s 953B based on contravention of s 947C
- Corporations Act s 1022B based on contravention of s 1012A
- breach of contract in combination with s 769B
Goonasekeras
$200,000	- Corporations Act s 1041I based on contravention of s 1041E
- Corporations Act s 1041E in combination with s 769B
- negligence in combination with s 769B
- Corporations Act s 1022B based on contravention of s 1012A
(but only as to $100,000)
- breach of contract in combination with s 769B
$30,000	- Corporations Act s 1041E in combination with s 769B
- negligence in combination with s 769B
- direct liability in negligence
- breach of contract in combination with s 769B
$145,000	- negligence in combination with s 769B
- breach of contract in combination with s 769B
$215,500	- negligence in combination with s 769B
- Corporations Act s 953B based on contravention of s 945A
- Corporations Act s 953B based on contravention of s 947C
- Corporations Act s 1022B based on contravention of s 1012A
- breach of contract in combination with s 769B