Latol Pty Limited v Gersbeck - [2015] NSWSC 1631

Supreme Court

New South Wales

Medium Neutral Citation: Latol Pty Limited v Gersbeck [2015] NSWSC 1631
Hearing dates: 11-14 August 2015
Date of orders: 18 November 2015
Decision date: 18 November 2015
Jurisdiction: Common Law
Before: Hamill J
Decision:
(1) Judgment for the plaintiff.
(2) The damages are to be reduced by 20% pursuant to s 12GF(1B) of the Australian Securities and Investments Commission Act 2001 (Cth).
(3)The parties are directed to attempt to reach agreement as to the quantum of damages and appropriate orders as to costs.
(4) If agreement is not reached in accordance with (3) above, the parties are directed to file with my Associate schedules in which the different methods of calculating the plaintiff’s loss are clearly articulated.
(5) The case is adjourned until 27 November 2015 for mention when, if necessary, a further timetable will be set for submissions concerning the quantum of damages.

Catchwords: CIVIL LAW – misleading or deceptive conduct –financial services – whether conduct caused plaintiff’s loss – concurrent wrongdoers – apportionment of liability – whether statutory provisions in ASIC Act applied – whether “apportionable claim” under Act – where plaintiff failed to take reasonable care – reduction in damages – whether defendant’s conduct fraudulent – whether fraud pleaded properly or at all
Legislation Cited: Australian Securities and Investments Commission Act 2001 (Cth)
Corporations Act 2001 (Cth)
Trade Practices Act 1974 (Cth)
Cases Cited: ACCC v Dukemaster [2009] FCA 682
Banque Commercial SA v Akhil Holdings [1990] HCA 11; 169 CLR 279
BHPB Freight Pty Ltd v Cosco Oceanic Chartering (No 3) [2009] FCA 1087
Davy v Garrett (1877) 7 ChD 473
Forrest v Australian Securities and Investments Commission [2012] HCA 39; 247 CLR 486
I & L Securities v HTW Valuers [2002] HCA 41; 210 CLR 109
Khoury v Sidhu [2011] FCAFC 71
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; 149 CLR 191
Pavich v Bobra Nominees Pty Ltd (1988) 84 ALR 285
Perpetual Trustee v Milanex (In Liquidation) [2011] NSWCA 367
Selig v Wealthsure Pty Ltd [2015] HCA 18
Suncoast Pastoral Company v Coburg AG (No 2) Pty Ltd [2012] QSC 157
Category: Principal judgment
Parties: Latol Pty Limited (Plaintiff)
Robin Gersbeck (Defendant)
Representation:
Counsel:
M Avenell (Plaintiff)
P Fagan (Defendant)
Solicitors:
Surry Partners (Plaintiff)
Le Page Solicitors (Defendant)

File Number(s): 2013/15730
Publication restriction: Nil

Judgment

This litigation has its genesis in a loan advanced by the plaintiff to Mrs Elisa Ribbera in June 2007. The defendant was the director and principal of Person to Person Financial Services Pty Ltd (P2P). P2P brokered the loan and the loan agreement between the plaintiff and Mrs Ribbera. The plaintiff says that in proposing and brokering that loan, the defendant engaged in misleading or deceptive conduct and is liable to pay damages pursuant to s 12GF and/or compensation under s 12GM of the Australian Securities and Investments Commission Act 2001 (Cth) (‘ASIC Act’). The plaintiff asserts that it relied on the…

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: [2015] NSWSC 1631
Decision Date: 18 November 2015

CaseChat Overview and Summary

The matter before the court involved a dispute between Latol Pty Limited and Gersbeck, with Latol claiming that Gersbeck engaged in misleading or deceptive conduct in relation to financial services, resulting in loss to Latol. The case was heard in the Supreme Court of New South Wales. The primary legal issues the court had to determine were whether Gersbeck's conduct caused Latol's loss, the apportionment of liability between Gersbeck and other concurrent wrongdoers, the applicability of statutory provisions in the ASIC Act, the classification of Latol's claim as an "apportionable claim" under the Act, the assessment of damages for Latol's failure to take reasonable care, and the characterisation of Gersbeck's conduct as fraudulent and whether fraud had been properly pleaded.

The court found that Gersbeck's conduct did indeed cause Latol's loss. It addressed the apportionment of liability among multiple wrongdoers, finding that the statutory provisions in the ASIC Act applied to the case. It classified Latol's claim as an "apportionable claim" under the Act, which meant that Gersbeck could be held liable for a portion of the loss. The court also considered Latol's failure to take reasonable care and reduced the damages accordingly. In regard to fraud, the court determined that Gersbeck's conduct did not meet the threshold for fraud, and any fraud claim was not properly pleaded or substantiated.

The final orders of the court were that Gersbeck was liable for a portion of Latol's loss, subject to the reduction in damages for Latol's failure to take reasonable care. The court did not find fraud and did not award any additional damages on that basis.

Orders