Notesco Pty Ltd v Australian Financial Complaints Authority Ltd

Notesco Pty Ltd, the holder of an Australian Financial Services Licence, sought to have an order of the Australian Financial Complaints Authority (AFCA) set aside. The dispute involved an elderly French resident who had opened a trading account with Notesco. The resident accessed highly leveraged investments, specifically CFDs, which were not available in the EU at the time. Unfortunately, the resident lost all of their investments and subsequently lodged a complaint with AFCA. The case before the court involved several significant legal issues, including the jurisdictional scope of AFCA, the procedural fairness in the complaint resolution process, and the validity of the AFCA Decision Maker's determination.

The court considered whether AFCA had jurisdiction over the complaint and whether the complaint related to a financial service as defined by the AFCA Rules. The court also examined the procedural fairness requirements and whether the separation between the preliminary assessment and the Determination was adequately maintained. Additionally, the court addressed the implications of the AFCA Decision Maker consulting with AFCA staff during the making of the Determination, and whether this contravened the rules. The court further considered the applicability of the doctrine of waiver and estoppel in this context.

The court found that AFCA had jurisdiction over the complaint as it related to a financial service provided by Notesco. However, the court held that the Decision Maker's consultation with AFCA staff during the making of the Determination was not in accordance with the AFCA Rules, thus rendering the Determination invalid. The court rejected the argument that the complainant had waived their right to challenge the Decision Maker's impartiality by not raising the issue earlier in the process. The court also found that the doctrine of estoppel did not apply as the complainant had not properly pleaded it.

The court set aside the Determination made by AFCA and remitted the matter to AFCA for reconsideration in accordance with the AFCA Rules. The decision underscores the importance of adhering to the procedural requirements set out in the AFCA Rules to ensure the validity of Determinations.