Selig v Wealthsure Pty Ltd

The High Court of Australia heard an appeal from the Full Court of the Federal Court concerning financial advice provided by the respondents, Wealthsure Pty Ltd and another, to the appellants, Mr and Mrs Selig. The core dispute revolved around whether the respondents' liability for contraventions of the *Corporations Act 2001* (Cth) and the *Australian Securities and Investments Commission Act 2001* (Cth) should be limited to a proportion of the appellants' loss, considering the comparative responsibility of other parties. A secondary issue concerned the circumstances justifying a costs order against a non-party, QBE Insurance (Australia) Ltd, which had conducted the defence and appeal on behalf of the respondents.

The primary legal issue before the High Court was the proper construction and application of Division 2A of Part 7.10 of the *Corporations Act 2001* (Cth) and its analogue provisions in the *ASIC Act 2001* (Cth). Specifically, the court had to determine whether this division, which deals with proportionate liability, applied only to claims based on a contravention of section 1041H of the *Corporations Act*, or if it extended to other causes of action for economic loss or damage to property arising from contraventions of other sections within Part 7.10, such as section 1041E, 1041F, or 1041G, when brought under section 1041I.

The High Court, by majority, allowed the appeal. The court reasoned that section 1041L(1) of the *Corporations Act* expressly limits "apportionable claims" to those for damages made under section 1041I that are specifically caused by conduct contravening section 1041H. Therefore, claims for loss or damage caused by contraventions of sections 1041E, 1041F, or 1041G, even if brought under section 1041I, do not fall within the scope of Division 2A and are not subject to proportionate liability. The court also ordered that QBE Insurance (Australia) Ltd pay the appellants' costs of the appeal to the High Court, finding that the insurer had acted in its own interests by bringing the appeal.

Consequently, the High Court allowed the appeal, set aside certain orders of the Full Court, varied an earlier monetary order by substituting a reduced amount, and otherwise dismissed the appeal and cross-appeal. The court also set aside other orders of the Full Court and ordered QBE Insurance (Australia) Ltd to pay the costs of the respondents in that appeal.