Thomas v Commonwealth Financial Planning Limited

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FEDERAL COURT OF AUSTRALIA

Thomas v Commonwealth Financial Planning Limited [2021] FCA 665

File number: VID 559 of 2020
Judgment of: BEACH J
Date of judgment: 18 June 2021
Catchwords: CORPORATIONS – group proceeding – claims for excess premiums – standing of applicants – claims as beneficiaries of superannuation trusts – beneficiaries having statutory causes of action – trustees of superannuation trusts having no cause of action – beneficiaries having no actionable loss – entities suffering losses – group definition adequacy – whether statutory claims can include loss of profits – pleading of fiduciary duty claims – pleading of knowing receipt claims – whether leave to replead should be given – orders made  
Legislation:

Corporations Act 2001 (Cth) ss 961B, 961J, 961L, 961M

Federal Court of Australia Act 1976 (Cth) ss 33D, 33H, 33Q, 33T, 33ZB

Cases cited:

Commonwealth Bank Officers Superannuation Corp Pty Ltd v Beck (2016) 334 ALR 692

Finch v Telstra Super Pty Ltd (2010) 242 CLR 254

J Wisbey & Associates Pty Ltd v UBS AG [2021] FCA 36

Macoun v Federal Commissioner of Taxation (2015) 257 CLR 519

Shimshon v MLC Nominees Pty Ltd [2020] VSC 640

V-Flow Pty Ltd v Holyoake Industries (Vic) Pty Ltd (2013) 296 ALR 418

Walsh Bay Developments Pty Ltd v Federal Commissioner of Taxation (1995) 130 ALR 415

Webster (Trustee) v Murray Goulburn Co-Operative Co. Limited (No 2) [2017] FCA 1260

Division: General Division
Registry: Victoria
National Practice Area: Commercial and Corporations
Sub-area: Commercial Contracts, Banking, Finance and Insurance
Number of paragraphs: 98
Date of hearing: 9 June 2021 
Counsel for the Applicants: Mr AS Martin SC with Mr TL Bagley and Ms C Roberts
Solicitor for the Applicants: Shine Lawyers
Counsel for the Respondents: Ms E Collins SC with Mr P Kulevski and Ms A Poukchanski
Solicitor for the Respondents: Allens

ORDERS

VID 559 of 2020
BETWEEN:

EDWARD THOMAS

First Applicant

DIANA TYRRELL

Second Applicant
AND:

COMMONWEALTH FINANCIAL PLANNING LIMITED (ACN 003 900 169)

First Respondent

FINANCIAL WISDOM LIMITED (ACN 006 646 108)

Second Respondent

COLONIAL MUTUAL LIFE ASSURANCE SOCIETY LIMITED, COMMINSURE (ACN 002 348 352)

Third Respondent

ORDER MADE BY:

BEACH J

DATE OF ORDER:

18 JUNE 2021

THE COURT ORDERS THAT:

1.Within 7 days of the date of these orders the applicants file and serve minutes of proposed orders and submissions (limited to 3 pages) concerning consequential orders and costs.

2.Within 7 days of receipt of such minutes and orders the respondents file and serve responding minutes and submissions (limited to 3 pages).

3.Liberty to apply.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT

BEACH J:

  1. In this group proceeding, the applicants seek leave to further amend their originating application and statement of claim.  The respondents seek to strike out the existing pleadings.  For the moment it is sufficient just to rule on the applicants’ application.  That result will readily inform the disposition of the respondents’ application.

  2. The essence of the claims made by…

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Details
Case
[2021] FCA 665
Decision Date

CaseChat Overview and Summary

In Thomas v Commonwealth Financial Planning Limited, the applicants, including Thomas, sought damages for excess premiums paid to the respondents, Commonwealth Financial Planning Limited. The case centred on the legal standing of the applicants, the nature of their claims, and the adequacy of the group proceeding definition. The applicants, who were beneficiaries of superannuation trusts, argued that they had statutory causes of action due to the excess premiums paid by the trustees. The court had to decide whether the trustees or the beneficiaries had the right to pursue these claims, and whether the beneficiaries had suffered an actionable loss. Additionally, the court examined whether statutory claims could encompass loss of profits and the appropriateness of the pleading of fiduciary duty and knowing receipt claims.

The court found that the trustees of the superannuation trusts did not have a cause of action for excess premiums, as the beneficiaries themselves were the ones who could claim under the statutory provisions. The beneficiaries, however, did not have a direct actionable loss since the trustees had suffered the loss. The court further held that statutory claims could include the loss of profits where it was a consequence of the excess premiums. Regarding fiduciary duty and knowing receipt claims, the court noted that these claims needed to be properly pleaded. The court granted leave to the applicants to replead their claims, subject to certain conditions, including the addition of a third applicant, an undertaking to disgorge any received moneys, modifications to the group description, and the provision of proper particulars of fiduciary claims.

The court's decision provided flexibility in formulating the common issues, allowing for the exclusion of individual group member issues on liability or relief. The final orders required the applicants to file and serve minutes of proposed orders and limited submissions within a specified timeframe, with the respondents to respond similarly. The court also allowed for liberty to apply and directed entry of orders in accordance with Rule 39.32 of the Federal Court Rules 2011.

Orders

Orders of the court

1. Within 7 days of the date of these orders the applicants file and serve minutes of proposed orders and submissions (limited to 3 pages) concerning consequential orders and costs.

2. Within 7 days of receipt of such minutes and orders the respondents file and serve responding minutes and submissions (limited to 3 pages).

3. Liberty to apply.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Second, there is an advantage in leaving their formulation fluid until I make trial orders. At that stage, my usual practice is to set down for trial all issues for the named applicants’ individual claims and all other issues, save and except for any individual group member issues on liability or relief. By such an exclusion, all common issues will necessarily remain, whatever they are, which can in part be articulated in a non-limiting way in an annexure to the trial order, recognising that they are likely to require later modification and then answer for the purposes of s 33ZB. In essence, such a practice provides the necessary flexibility that the rigidity of Merck orders often lack.Conclusion I will allow the applicants to replead in the form proposed subject to:(a)a third applicant being added who paid the excess premium(s) personally with any necessary consequential amendments;(b)an undertaking being given on behalf of the present applicants concerning the disgorging to their trustees of any moneys received from the respondents referable to the excess premiums; (c)the group description being modified as I have indicated; and (d)proper particulars being given by the named applicants of their fiduciary claims. Further, for the moment I will allow to go forward the proposed reformulation of the common issues in the proposed amended originating application. I will hear further from the parties as to the necessary orders.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.