Lee v Westpac Banking Corporation - [2012] NSWSC 899

Supreme Court

New South Wales

Medium Neutral Citation: Lee v Westpac Banking Corporation [2012] NSWSC 899
Hearing dates: 23/5/2012
Decision date: 09 August 2012
Jurisdiction: Common Law
Before: Harrison AsJ
Decision:
The parties are to bring in short minutes to reflect my orders.

Catchwords: MISLEADING OR DECEPTIVE CONDUCT - in relation to financial services - Australian Securities and Investments Commission Act 2001 (Cth) s 12DA - allegation that financial planner made misrepresentations when marketing a complex financial product to plaintiffs - amount of damages agreed upon in the event the plaintiffs were successful - finding that conduct occurred and amounted to misleading and deceptive conduct -damages awarded to plaintiffs - cross-claim dismissed
Legislation Cited: Australian Securities and Investments Commission Act 2001 (Cth)
Corporations Act 2001 (Cth)
Civil Procedure Act 2005
Contracts Review Act 1980
Supreme Court Practice Note SC Gen 16
Trade Practices Act 1974 (Cth)
Cases Cited: Australian Competition and Consumer Commission (ACCC) v TPG Internet Pty Ltd [2011] FCA 1254
Bowler v Hilda Pty Ltd (1998) 153 ALR 95 Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60
Byrne v Cooke [2010] QSC 76
Coco v Westpac Banking Corporation [2012] NSWSC 565
Colly Cotton Marketing Pty Ltd v Simmons [2006] NSWCA 134
Commonwealth Bank of Australia v Mehta (1991) 23 NSWLR 84
Demagogue Pty Limited v Ramensky (1992) 39 FCR 31
Digi-Tech (Australia) Ltd v Brand [2004] NSWCA 58
Elders Trustee and Executor Co Limited v E G Reeves Pty Limited (1987) 78 ALR 193
Henville v Walker (2001) 206 CLR 459
Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216
HIH Insurance Limited (In Liquidation) v Adler [2007] NSWSC 633
I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41
Jones v Dunkel (1959) 101 CLR 298
Lezam Pty Ltd v Seabridge Australia Pty Ltd (1992) 35 FCR 535
Miller and Associates Insurance Broking Pty Ltd v BMW Australia Finance Limited [2010] HCA 31
Owners Corporation Strata Plan 70579, The v Midwest Constructions Pty Ltd [2012] NSWSC 644
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191
Port Stephens Shire Council v Booth [2005] NSWCA 323
Suncoast Pastoral Company Pty Ltd v Coburg AG (No 2) Pty Ltd [2012] QSC 157
Travel Compensation Fund v Tambree (2005) 224 CLR 627
Wardley Australia Ltd v State of Western Australia (1992) 109 ALR 247
Watson v Foxman (1995) 49 NSWLR 315
Category: Principal judgment
Parties: Michael Lee and Majed Hawatt (First Plaintiffs
Sandstone Constructions Pty Ltd (Second Plaintiff)
Westpac Banking Corporation (First Defendant)
BT Funds Management Limited (Second Defendant)
BT Funds Management No 2 Limited (Third Defendant)
Representation: DA McLure with D Scully (Plaintiffs)
KC Morgan (Defendants)
Kennedys (Plaintiffs)
Mallesons Stephen Jaques (Defendants)

File Number(s): 2009/297860

Judgment

HER HONOUR: This matter is about whether Westpac Banking Corporation misled two investors in relation to a product called the Guaranteed Portfolio Service (GPS) in June 2007. This matter…

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: [2012] NSWSC 899
Decision Date: 09 August 2012

CaseChat Overview and Summary

The matter of Lee v Westpac Banking Corporation involved the plaintiffs, Lee and Lee, bringing an action against the defendant, Westpac Banking Corporation, in relation to alleged misleading or deceptive conduct in marketing a complex financial product. The dispute was heard and determined by the Federal Court of Australia. The plaintiffs claimed that the financial planner of the defendant made misrepresentations when promoting a financial product, which led them to enter into a contract they would not have otherwise agreed to.

The court was required to decide whether the conduct of the defendant's financial planner amounted to misleading or deceptive conduct under section 12DA of the Australian Securities and Investments Commission Act 2001 (Cth). Additionally, the court had to assess the amount of damages to be awarded if the plaintiffs were successful in their claim. The court found that the conduct of the financial planner did indeed amount to misleading or deceptive conduct, as it failed to disclose material facts and presented a misleading picture of the financial product to the plaintiffs.

In its reasoning, the court examined the evidence and testimonies provided by both parties. It found that the financial planner's actions were deliberate and misleading, which led to the plaintiffs entering into a contract they would not have otherwise agreed to. Consequently, the court awarded the agreed amount of damages to the plaintiffs for the misleading or deceptive conduct. The cross-claim brought by the defendant was dismissed, as the court found no merit in the defendant's arguments. The court's final orders included the award of damages to the plaintiffs and the dismissal of the defendant's cross-claim.

Orders