Opes Prime Stockbroking Ltd (In Liquidation) (Scheme Administrators Appointed) (ACN 086 294 029) & Anor v Stevens & Ors

The appeal concerned the liability of the appellants, Opes Prime Stockbroking Ltd (in liquidation) and Opes Prime Group Ltd (in liquidation), to the respondents, Mr. and Mrs. Stevens, for losses incurred as a result of Opes Prime's collapse. The dispute centred on whether Opes Prime had breached its fiduciary duties to the Stevens, who were clients of Opes Prime, by using their shares as collateral for loans without their informed consent. The matter came before the High Court of Australia on appeal from the Full Court of the Supreme Court of Victoria.

The primary legal issue before the High Court was whether Opes Prime had breached its fiduciary duties to the Stevens by failing to obtain their informed consent to the use of their shares as collateral for loans obtained by Opes Prime from third-party lenders. This involved determining the scope of Opes Prime's fiduciary obligations to its clients and whether the disclosure provided by Opes Prime regarding the use of client shares was sufficient to constitute informed consent.

The High Court, in dismissing the appeal, affirmed that Opes Prime owed fiduciary duties to the Stevens. Their Honours found that Opes Prime had breached these duties by failing to obtain informed consent for the use of the Stevens' shares as collateral. The Court held that the disclosure provided by Opes Prime was inadequate because it did not clearly and unequivocally inform the Stevens of the material risks involved, including the risk that their shares could be sold to satisfy Opes Prime's debts. The principles of fiduciary duty require a fiduciary to act with undivided loyalty and to make full and frank disclosure of all material information to the principal, particularly where the fiduciary proposes to use the principal's property for its own benefit or for the benefit of a third party. The Court found that Opes Prime had not met this high standard.