Selig & Anor v Wealthsure Pty Ltd & Ors

The High Court of Australia considered an appeal concerning alleged misleading and deceptive conduct in relation to financial services. The appellants, Mr. and Mrs. Selig, had invested in a managed investment scheme operated by Wealthsure Pty Ltd and related entities. The dispute arose from representations made by Wealthsure concerning the scheme's performance and risks, which the Seligs alleged were misleading.

The central legal issues before the High Court were whether Wealthsure and its directors had engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of section 52 of the Trade Practices Act 1974 (Cth) (now section 18 of the Australian Consumer Law). Specifically, the court had to determine whether the representations made about the scheme's projected returns and the nature of the investment were false or misleading, and whether the respondents had acted with the requisite knowledge or intent.

The High Court affirmed that the test for misleading or deceptive conduct under section 52 of the Trade Practices Act does not require proof of intent to deceive. Rather, the focus is on the effect of the conduct on the relevant audience. The court found that the representations made by Wealthsure regarding the scheme's performance were not substantiated by reasonable grounds at the time they were made, and therefore constituted misleading conduct. The court also considered the liability of the directors, applying principles of accessory liability, and found them to be knowingly concerned in the contravening conduct.

The High Court allowed the appeal, finding that Wealthsure and its directors had contravened section 52 of the Trade Practices Act. The matter was remitted to the Federal Court of Australia for the determination of appropriate remedies.