Knowles v Interprac Financial Planning Pty Ltd

Case [2025] QSC 78

SUPREME COURT OF QUEENSLAND

CITATION:

Knowles v Interprac Financial Planning Pty Ltd [2025] QSC 78

PARTIES:

LACHLAN LEVI KNOWLES

(first plaintiff)

KNOWLES FAMILY HOLDINGS (ACN 153 992 502) AS TRUSTEE FOR THE KNOWLES INVESTMENT TRUST

(second plaintiff)

KNOWLES FAMILY SUPER PTY LTD (ACN 151 427 002) AS TRUSTEE FOR THE KNOWLES FAMILY SUPER FUND

(third plaintiff)

KNOWLES FAMILY BT1 PTY LTD (ACN 153 707 521) AS TRUSTEE FOR THE KNOWLES FAMILY BARE TRUST

(fourth plaintiff)

v
INTERPRAC FINANCIAL PLANNING PTY LTD (ACN 076 093 680)

(defendant)

FILE NO/S:

BS9078/22

DIVISION:

Trial Division

PROCEEDING:

Claim

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

30 April 2025

DELIVERED AT:

Brisbane

HEARING DATE:

11, 12, 13, 14 March 2025

JUDGE:

Cooper J

ORDER:

The plaintiffs’ claims are dismissed

CATCHWORDS:

CORPORATIONS — FINANCIAL PRODUCTS — GENERALLY — where the first plaintiff sought investment advice from an authorised representative of the defendant — where the authorised representative was empowered to deal in certain financial products under the Corporations Act 2001 (Cth) but not residential property — where the plaintiffs alleged the authorised representative advised the first plaintiff to establish a self-managed superannuation fund and invest superannuation monies, as well as monies outside superannuation, into residential property — where the plaintiffs alleged that the authorised representative’s advice was in a written statement of advice and conversations the first plaintiff had with the authorised representative — where the plaintiffs claimed that they had purchased three residential apartments following the authorised representative’s advice and suffered loss as a result — where the defendant claimed that the statement of advice was not negligent — where the defendant argued that the oral advice of the authorised representative was not provided within the authorisation the defendant conferred on the representative — whether the written advice was negligent or in contravention of Corporations Act 2001 (Cth) ss 945A, 945B — whether the authorised representative provided the oral advice and, if so, whether that advice was provided within the authorisation the defendant conferred on the authorised representative.

LIMITATION OF ACTIONS — SIMPLE CONTRACTS, QUASI-CONTRACTS AND TORTS — ACCRUAL OF CAUSE OF ACTION AND WHEN TIME BEGINS TO RUN — where the plaintiffs’ claims were subject to a six-year limitation period either in negligence or for breach of ss 945A, 945B Corporations Act 2001 (Cth) — where the statement of advice provided by the representative was provided in June 2011 — where the plaintiffs executed contracts to purchase the residential properties in November 2011 — where the mortgagees of the properties exercised their power of sale from November 2017 — where the plaintiffs argued that their causes of action did not accrue until the investment properties were sold by the mortgagee — whether the plaintiffs claims were statute barred.

ABN AMRO Bank NV v Bathurst Regional Council (2014) 224 FCR 1; [2014] FCAFC 65.
Astley v Austrust Ltd (1999) 197 CLR 1; [1999] HCA 14.
Commonwealth v Cornwell (2007) 229 CLR 519; [2007] HCA 16.
D W Moore…

Continue reading Knowles v Interprac Financial Planning Pty Ltd

Sign in free to access the full text

Details
AGLC
Knowles v Interprac Financial Planning Pty Ltd [2025] QSC 78
Case
[2025] QSC 78
Decision Date

CaseChat Overview and Summary

The case of Knowles v Interprac Financial Planning Pty Ltd involved the plaintiffs, Mr and Mrs Knowles, who sought investment advice from an authorised representative of Interprac, a financial planning company. They alleged that the authorised representative, Mr Grosskreutz, advised them to invest in residential property using their superannuation funds and other monies. The plaintiffs claimed that they suffered financial loss as a result of this advice, leading them to purchase three residential apartments. Interprac argued that the advice provided was not negligent and that the authorised representative did not act within the scope of his authorisation. The central legal issues revolved around whether the advice given was negligent or in breach of statutory obligations under the Corporations Act 2001 (Cth), the extent of Interprac's liability for the authorised representative's actions, the quantification of the plaintiffs' losses, and whether the plaintiffs' claims were statute-barred.

The court found that the plaintiffs' claims were statute-barred because the limitation period for the causes of action had expired. The advice was provided in June 2011, and the plaintiffs executed contracts to purchase the properties in November 2011. The court held that the plaintiffs' causes of action accrued at the time of the advice and the subsequent purchase of the properties, not at the time of the mortgagee's power of sale in November 2017. Therefore, the plaintiffs' claims were time-barred as they were not brought within the requisite six-year period. The court also determined that the plaintiffs' claims were not apportionable and that there was no concurrent wrongdoer who contributed to the plaintiffs' losses. Consequently, the plaintiffs' claims were dismissed, and the matter was to be heard for costs.

Orders

Orders of the court

The plaintiffs’ claims are dismissed

Background

Background to the litigation

In that context, the following issues arise for determination:(a)whether the advice given by Mr Grosskreutz in the SOA was negligent or given in breach of obligations he owed under the Act;(b)if Mr Grosskreutz is found to have given the Further Advice to Mr Knowles, whether Interprac is liable for that advice;(c)the amount of the plaintiffs’ loss;(d)whether the plaintiffs failed to mitigate their loss;(e)whether the plaintiffs were contributorily negligent;(f)whether the claim in negligence is apportionable and, if so, whether any person besides Interprac is a concurrent wrongdoer who caused a proportion of the plaintiffs’ loss;(g)whether the plaintiffs’ claims are statute barred.Factual background Mr Knowles works in the construction industry. He initially worked as a labourer before completing a carpentry apprenticeship. He later obtained licences from the Queensland Building and Construction Commission for carpentry and building construction. By the time Mr Knowles was in his early thirties his disposable income exceeded his living expenses. He began to think about investing. Part of his motivation was that he had seen older tradespersons continue to engage in strenuous manual labour because they had little financial security. He hoped that by seeking financial investment advice he would be able to obtain financial security and retire from roles involving manual labour at a younger age. In early 2011, Mr Knowles was searching on the internet for investment strategies when he saw an advertisement by Francis Investment Strategists Pty Ltd (Francis Investments) for a free seminar on investing in real estate through superannuation. Francis Investments was a corporate authorised representative of Interprac. Mr Knowles attended the seminar which was run by Mr Grosskreutz. At the end of the seminar, Mr Knowles spoke with Mr Grosskreutz and filled out a contact form. On 25 May 2011, Mr and Mrs Knowles met with Mr Grosskreutz at Francis Investments’ office. During that meeting, Mr Grosskreutz asked Mr Knowles questions about his financial circumstances and used the information provided by Mr Knowles to prepare a document titled “Client Needs Analysis” (CNA). He also provided Mr Knowles with a letter of engagement and a copy of Interprac’s Financial Services Guide (FSG). The CNA recorded Mr and Mrs Knowles’ short term goals as: “Property in Super” and “Property outside of Super – Max spend”. It did not record any medium term or long term goals. It recorded Mr and Mrs Knowles’ existing financial position by reference to their income, expenditure, assets and liabilities. It also recorded Mr and Mrs Knowles’ response to ten questions directed to their risk profile. The CNA identified Mr and Mrs Knowles’ risk profile as being that of an assertive investor. According to that description:“You are a growth style investor who understands the movement of investment markets. You are most interested in maximising long term capital growth, although you do not wish to make unbalanced investment decisions. You are happy to sacrifice short term safety in order to maximise long term capital growth”And later: “Assertive [Growth]: you are a ‘growth’ investor who aggressively seeks a long term capital growth by investing mostly in growth assets. You remain cautious towards taking high levels of long term risks. However your general understanding of the investment market enables you to feel comfortable with short term risk. You accept the possibility of a negative annual return that may occur once every 4-5 years.”

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

In those circumstances, if the plaintiffs’ claims were not statute barred, I would not have reduced Mr Knowles’ claim for opportunity loss on the basis that it was an apportionable claim.Conclusion As I have found that the plaintiffs’ claims are statute barred those claims will be dismissed. I will hear the parties as to costs.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.