FEDERAL COURT OF AUSTRALIA
Selig v Wealthsure Pty Ltd [2013] FCA 348
Citation: Selig v Wealthsure Pty Ltd [2013] FCA 348 Parties: RONALD SELIG AND JANNA SELIG v WEALTHSURE PTY LTD (ABN 93 097 405 108), DAVID BERTRAM, RICHARD WILLIAM SPENCER, SILVANA PEROVICH, MARK RICHARD NORTON, PETER MAURICE TOWNLEY, NEOVEST LIMITED (IN LIQUIDATION) ACN 104 915 906, NORTON CAPITAL PTY LIMITED (IN LIQUIDATION) ACN 086 207 169, DANIEL GEOFFREY LILLEY, DAMIEN BERNARD GREER, ROBERT NOEL GALLAGHER, STEPHEN JAMES DICKENS and MICHAEL JOSEPH CROUCH File number: SAD 11 of 2010 Judge: LANDER J Date of judgment: 18 April 2013 Corrigendum: 12 June 2013 Catchwords: CORPORATIONS – investment advice given by Australian Financial Services Licensee and authorised representative thereof – whether investment scheme advised “Ponzi scheme” – actions under Corporations Act 2001 (Cth) and Australian Securities and Investments Commission Act 2001 (Cth) for loss or damage arising from misleading and deceptive conduct – whether disclosure document or statement defective – whether reasonable basis for investment advice given – whether obligation to warn client if investment advice based on incomplete or inaccurate information – whether representations as to future matters misleading – whether false or misleading statements made – whether statements made to induce dealings in financial products where maker knows or is reckless to whether statement is misleading, false or deceptive – whether false representations made in relation to standard of financial services – whether investment advice acted upon
CONTRACTS – whether investment advice given pursuant to express terms – whether advice appropriate for plaintiffs’ needs, objectives and circumstances – whether term of reasonable care implied by law, and implied by fact, breached – whether breach of warranty implied by s 12ED of Australian Securities and Investments Commission Act 2001 (Cth) – whether financial services rendered with due care and skill
NEGLIGENCE – whether duty and content thereof established – whether breach of duty established
PARTNERSHIP – whether conduct of partner within ordinary course of business of, or with authority of, partnership
DAMAGES – loss of initial investment, interest on compounding basis, and consequential loss upon collapse of dependent investments sought – whether plaintiffs’ damages to be reduced on account of plaintiffs’ failure to take reasonable care – first and second defendants cross-claim brought against other defendants seeking apportionment, indemnity and contribution – whether concurrent wrongdoers – application of statutory contributory negligence and proportionate liability provisions within Corporations Act 2001 (Cth) and Australian Securities and Investments Commission Act 2001 (Cth) – discussion of principles of apportionment – whether plaintiffs “consumers” for purposes of Civil Liability Act 2003 (Qld)
Legislation: Australian Securities and Investments Commission Act 2001 (Cth), ss 5, 12BAB, 12BB, 12BC, 12DA, 12DB, 12ED, 12GF, 12GR, 30
Bankruptcy Act 1966 (Cth), s 58(3)
Civil Liability Act 2002 (NSW)
Civil Liability Act 2003 (Qld), ss 28, 31
Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004 (Cth), schedules 3, 12
Corporations Act 2001 (Cth), ss 79, 254J, 254K, 254T, 471B, 476, 500(2), 588G, 670A, 670B, 710, 728, 729, 763A,…
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- AGLC
- Selig v Wealthsure Pty Ltd [2013] FCA 348
- Case
- [2013] FCA 348
- Decision Date
CaseChat Overview and Summary
The court found that the defendants had breached their obligations under the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth). The court held that the investment advice provided by the defendants was not based on a reasonable basis and that the defendants had a duty to warn the plaintiffs if the advice was based on incomplete or inaccurate information. The court also found that the representations made by the defendants as to future matters were misleading and that the plaintiffs had suffered loss or damage as a result of the misleading and deceptive conduct. The court awarded damages to the plaintiffs in the sum of $1,760,512 against the first, second, fifth and sixth defendants. The court also dismissed the claims of the first and second defendants against the third to eighth defendants for declaration, indemnity and contribution.
The court found that the plaintiffs were not "consumers" for the purposes of the Civil Liability Act 2003 (Qld) and therefore the statutory contributory negligence and proportionate liability provisions did not apply. The court held that the plaintiffs' damages were not to be reduced on account of the plaintiffs' failure to take reasonable care. The court also held that the plaintiffs and the first and second defendants were to pay the ninth to thirteenth defendants' costs. The court granted the plaintiffs leave to make an application for an order that the first and second defendants indemnify the plaintiffs against the order that the plaintiffs pay the ninth to thirteenth defendants’ costs. The court ordered that the first and second defendants pay the third to eighth defendants’ costs (if any) in relation to the first and second defendants’ claims against those defendants. The court made orders for costs in relation to the proceedings between the parties.
Orders
Orders of the court
1. The plaintiffs’ claim against the ninth to thirteenth defendants be dismissed.
2. The plaintiffs have judgment against the first, second, fifth and sixth defendants in the sum of $1,760,512.
3. If the plaintiffs want to seek leave to enter judgment for the sum of $1,760,512 against the third and fourth, and seventh and eighth defendants, the plaintiffs file an application together with a supporting affidavit within 14 days of the making of these orders.
4. If the plaintiffs make an application pursuant to paragraph 3, the application be heard on Tuesday, 4 June 2013 at 9.30am.
5. The first and second defendants’ claims for a declaration that the third to eighth defendants are proportionately liable be refused.
6. The first and second defendants’ claims for indemnity and contribution against the third to eight defendants be dismissed.
7. The first and second defendants’ claim against the ninth to thirteenth defendants be dismissed.
8. The first and second defendants pay the plaintiffs’ costs of the plaintiffs’ proceeding against the first and second defendants.
9. The fifth and sixth defendants pay the plaintiffs’ costs of the plaintiffs’ proceeding against the fifth and sixth defendants.
10. The question of the plaintiffs’ costs against the third and fourth, and seventh and eighth defendants be reserved pending any application by the plaintiffs pursuant to paragraph 3 of these orders for judgment against those parties.
11. The plaintiffs and the first and second defendants pay the ninth to thirteenth defendants’ costs.
12. The plaintiffs have leave to make an application for an order that the first and second defendants indemnify the plaintiffs against the order that the plaintiffs pay the ninth to thirteenth defendants’ costs by filing written submissions, not exceeding 5 pages, in support of such an order within 10 days.
13. If the plaintiffs make an application that the first and second defendants indemnify the plaintiffs against the order that the plaintiffs pay the ninth to thirteenth defendants’ costs, the first and second defendants file written submissions, not exceeding 5 pages, in reply within 10 days.
14. The first and second defendants pay the third to eighth defendants’ costs (if any) in relation to the first and second defendants’ claims against those defendants.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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