Scale v Professional Investment Services Pty Ltd

The applicant, Scale, sought to recover damages from the respondent, Professional Investment Services Pty Ltd, for alleged breaches of contract and misleading and deceptive conduct. The dispute arose from Scale's investment in a managed fund managed by Professional Investment Services. Scale alleged that the investment was not suitable for his financial circumstances and that he was misled about the risks involved. The matter was heard in the Supreme Court of Victoria.

The central legal issues before the court were whether Professional Investment Services had breached its contractual obligations to Scale by failing to act with due care and skill and by recommending an unsuitable investment. Additionally, the court was required to determine whether the conduct of Professional Investment Services in advising Scale constituted misleading or deceptive conduct in contravention of the relevant consumer protection legislation.

In reaching its decision, the court considered the nature of the advisory relationship between Scale and Professional Investment Services, the information provided by Scale regarding his financial situation and investment objectives, and the advice given by Professional Investment Services. The court applied principles of contract law concerning the duty of care owed by financial advisors and the law relating to misleading and deceptive conduct, assessing whether the representations made were factually accurate and whether they were likely to mislead a reasonable investor in Scale's position. The court found that Professional Investment Services had failed to adequately assess Scale's risk tolerance and financial capacity, leading to an unsuitable investment recommendation.

The court ordered that Professional Investment Services pay damages to Scale in an amount to be assessed.