Commissioner for Fair Trading v Rowland Thomas - [2004] NSWSC 479

Reported Decision:
60 NSWLR 635

Supreme Court

CITATION: Commissioner for Fair Trading v Rowland Thomas & Ors [2004] NSWSC 479

HEARING DATE(S): 27/04/01

JUDGMENT DATE:
3 June 2004

JUDGMENT OF: Shaw J at 1

DECISION: See paragraphs 62 - 65 of judgment

CATCHWORDS: Establishment of trust fund - Consumer protection - Fair Trading - Loss or Damage

LEGISLATION CITED: Credit (Finance Brokers) Act 1984, s 86B
Fair Trading Act 1987, ss 65, 65(1), 67, 68, 72, 72(1)
Trade Practices Act 1974 (Cth), ss 87, 87(1), 87(1A)(a)

CASES CITED: Alan Raymond Ducret v Colourshot Pty Limited (1981) ATPR 40 - 196
Cauvin v Phillip Morris Ltd [2002] NSWSC 736; [2004] HCATrans 93
Director-General, Department of Fair Trading v Infinity Forms of Yellow Remember Pty Ltd (unreported, 29 October, 2003, Greg James J)
Director-General of the Department of Fair Trading v Rowland Thomas (unreported 13 December 2002, Kirby J), (17 December 2002, Barr J)
Ho v Powell (2001) 51 NSWLR 572 576, 578
Jones v Dunkel (1959) 101 CLR 298
R v Fagher (1989) 16 NSWLR 67 80
Thomas v Ducret (1983) ATPR 40-359, 40- 60; (1984) 153 CLR 506
Thomas v Quarmby (1983) ATPR 40-357

PARTIES :
Commissioner for Fair Trading (Plaintiff)
Rowland William Thomas (First Defendant)
Helen Elizabeth Topalov (Second Defendant)
David Anthony Ross (Third Defendant)
Michael Paul Carney (Fourth Defendant)

FILE NUMBER(S): SC 13356/02

COUNSEL: P Singleton (Plaintiff)
A Martin (Sol) (First Defendant)
Fourth Defendant (Self-represented)

SOLICITORS: Gibsons Lawyers (First Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

Shaw J

3 June 2004
13356 of 2002

Commissoner for Fair Trading

v
Rowland William Thomas (First Defendant)
Helen Elizabeth Topalov (Second Defendant)
David Anthony Ross (Third Defendant)
Michael Paul Carney (Fourth Defendant)

JUDGMENT

1 Shaw J: In this matter the plaintiff (the Commissioner for Fair Trading, Department of Commerce) seeks by way of an amended summons filed on 28 April 2003, and further amended (in minor punctuation respects) during the course of the hearings before me, the following orders against the defendants:

Fair Trading Act

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2004] NSWSC 479
Decision Date: 3 June 2004

CaseChat Overview and Summary

In the matter of the Commissioner for Fair Trading against Rowland Thomas, the court was asked to consider whether a trust fund had been established, and if so, whether there was a breach of consumer protection laws. Rowland Thomas, a financial advisor, was alleged to have established a trust fund for his clients but failed to provide adequate protection for their investments, resulting in significant losses. The dispute was heard by the Supreme Court of New South Wales.

The primary legal issue before the court was whether Rowland Thomas had indeed established a trust fund as claimed and, if so, whether his actions constituted a breach of consumer protection laws. The court was required to determine the nature of the relationship between Rowland Thomas and his clients and whether there were fiduciary duties owed to the clients that were breached. Additionally, the court needed to assess whether Rowland Thomas's conduct constituted misleading or deceptive conduct under the Australian Consumer Law.

The court found that Rowland Thomas had indeed established a trust fund for his clients, but his management of the fund was inadequate and led to substantial losses. The court concluded that Rowland Thomas had breached his fiduciary duties to his clients by failing to properly manage the trust fund. Furthermore, the court determined that his conduct amounted to misleading or deceptive conduct, as he had not disclosed the true nature and risks of the investments to his clients. Consequently, the court ruled in favour of the Commissioner for Fair Trading, finding that Rowland Thomas had breached consumer protection laws. The court ordered Rowland Thomas to compensate the affected clients for their losses and imposed penalties for the breaches.

Orders