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Marshall v Synchron Advice Pty Ltd

Marshall v Synchron Advice Pty Ltd

Case [2025] VSC 458 1 August 2025

Contract Formation

Indemnity Clause

Reasonableness of Settlement

Appeal

Contract Law

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST

S ECI 2024 03501

NOEL ROBERT MARSHALL	First Appellant
- and -
WEALTH FOUNDRY PTY LTD as Trustee for WF UNIT TRUST trading as WEALTH FOUNDRY (ACN 153 360 902)	Second Appellant
v
SYNCHRON ADVICE PTY LTD (ACN 007 207 650)	Respondent

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JUDGE:	Watson J
WHERE HELD:	Melbourne
DATE OF HEARING:	1 & 2 April 2025
DATE OF JUDGMENT:	1 August 2025
CASE MAY BE CITED AS:	Marshall & Anor v Synchron Advice Pty Ltd
MEDIUM NEUTRAL CITATION:	[2025] VSC 458

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CONTRACT – Appeal from Magistrates’ Court on question of law – Agreement between Australian Financial Services Licence holder (licensee) and authorised representative – Indemnity clause – Authorised representative provided financial advice to clients – Clients complained to Australian Financial Complaints Authority (AFCA) – Licensee settled with clients following recommendation from AFCA – Indemnity clause did not require licensee to show that authorised representatives caused loss to clients – Magistrate correctly construed indemnity clause – Licensee was required to prove settlement was reasonable – Magistrate did not consider reasonableness – Reasonable for licensee to settle with clients – Evidence only proved reasonableness of part of quantum – Appeal allowed – Horsell International Pty Ltd v Divetwo Pty Ltd [2013] NSWCA 368; Lumley General Insurance Ltd v Port Phillip City Council [2013] VSCA 367; Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1998) 192 CLR 603; Protec Pacific Pty Ltd v Steuler Services GmbH & Co KG [2014] VSCA 338 applied – GLP Batesford Pty Ltd v 68 Bridge Road Land Pty Ltd [2024] VSC 182; Speno Rail Maintenance Australia Pty Ltd v Hamersley Iron Pty Ltd (2000) 23 WAR 291; Erect Safe Scaffolding (Australia) Pty Ltd v Sutton (2008) 72 NSWLR 1; UGL Rail Pty Ltd v Wilkinson Murray Pty Ltd [2014] NSWSC 1959 considered.

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APPEARANCES:	Counsel	Solicitors
For the First and Second Appellants	Mr D Guidolin KC Mr S Ryan	Oakley Thompson & Co Pty Ltd
For the Respondent	Mr J Tomlinson SC Mr N Marlow-Weir	SBA Legal Pty Ltd

HIS HONOUR:

The appellants, Noel Marshall and Wealth Foundry Pty Ltd (‘Wealth Foundry’), appeal pursuant to s 109 of the Magistrates’ Court Act 1989 (Vic) from the judgment and final orders of a Magistrate on 7 June 2024.

On 7 March 2023 the respondent, Synchron Advice Pty Ltd (‘Synchron’), commenced proceedings in the Melbourne Magistrates’ Court by filing a Complaint against Mr Marshall and Wealth Foundry alleging that the appellants had failed to indemnify Synchron in respect of monies paid to clients in settlement of a claim made to the Australian Financial Complaints Authority (‘AFCA’), together with fees it had paid to AFCA.

After a hearing spanning six days, the learned Magistrate held that Synchron was entitled to enforce the contractual indemnity against Mr Marshall and Wealth Foundry and ordered that they pay Synchron the sum of $28,059.10 together with…

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.

Continue reading Marshall v Synchron Advice Pty Ltd

Details

AGLC: Marshall v Synchron Advice Pty Ltd [2025] VSC 458
Case: [2025] VSC 458
Decision Date: 1 August 2025

CaseChat Overview and Summary

In the matter of Marshall v Synchron Advice Pty Ltd, the dispute arose from a contractual relationship between the plaintiff, an authorised representative, and the defendant, a financial services licence holder. The plaintiff provided financial advice to clients, who subsequently complained to the Australian Financial Complaints Authority. Following a recommendation from AFCA, the defendant settled with the clients. The plaintiff sought to enforce an indemnity clause within their agreement with the defendant, arguing that the defendant was required to indemnify the plaintiff for any losses incurred as a result of the complaints. The defendant countered that the indemnity clause did not necessitate proof of causation by the plaintiff and that the settlement was reasonable, therefore the defendant was not liable.

The primary legal issue the court had to address was the interpretation of the indemnity clause in the agreement between the parties. Specifically, whether the defendant was required to indemnify the plaintiff only if the plaintiff caused the clients' losses or if the indemnity clause was broader, requiring the defendant to indemnify the plaintiff regardless of causation. The court also needed to determine whether the defendant was liable under the indemnity clause, considering that the magistrate had ruled in favour of the plaintiff but had not examined the reasonableness of the settlement.

The court found that the indemnity clause did not require the defendant to prove that the plaintiff caused the clients' losses. Instead, the clause required the defendant to indemnify the plaintiff if the plaintiff incurred any losses due to complaints made to the AFCA. However, the court noted that the magistrate had not assessed the reasonableness of the settlement, which is a crucial aspect of the indemnity claim. The court held that the reasonableness of the settlement was a critical factor in determining the defendant's liability under the indemnity clause. The court concluded that it was reasonable for the defendant to settle with the clients, as evidenced by the AFCA's recommendation. However, the evidence only demonstrated the reasonableness of part of the settlement quantum, not the entire amount. Therefore, the court allowed the appeal, finding that the magistrate had not correctly applied the law regarding the reasonableness of the settlement.

The court ordered that the appeal be allowed and that the matter be remitted to the magistrate for reconsideration, with specific instructions to assess the reasonableness of the entire settlement amount. The court further instructed the magistrate to consider the broader implications of the indemnity clause and the necessity for the defendant to indemnify the plaintiff in light of the reasonable settlement.

Orders