Follacchio v Harvard Securities (Aust) Pty Ltd

Follacchio was an investor who purchased shares in a company through an investment platform operated by Harvard Securities. Follacchio alleged that Harvard Securities failed to provide adequate advice and breached its duty of care, resulting in significant financial losses. The dispute was heard by the Supreme Court of Victoria, which had to determine whether Harvard Securities owed a duty of care to Follacchio and, if so, whether this duty was breached. The court was also required to consider whether Follacchio's losses were a direct result of the alleged breach.

The court began by examining the nature of the relationship between Follacchio and Harvard Securities. It was noted that while Harvard Securities acted as an intermediary, facilitating the transaction, it did not provide personal financial advice. The court held that Harvard Securities did not owe Follacchio a duty of care in providing investment advice. The court reasoned that the duty of care arises only in circumstances where a special relationship exists, typically involving a professional providing expert advice. As Harvard Securities did not provide personal advice, the court concluded that no duty of care was owed. Furthermore, the court found that even if a duty of care had been established, Follacchio's losses were not a direct result of any alleged breach. The court held that Follacchio's investment decisions were influenced by multiple factors, and the court could not definitively attribute the losses to the conduct of Harvard Securities.

In light of the above findings, the appeal was dismissed. The court ordered that the appellant pay the respondent’s costs, including any reserved costs. This decision underscores the importance of understanding the nature of the relationship between financial services providers and their clients when determining the existence and scope of a duty of care.