Williams v Nugara
[2021] VSC 331
•11 June 2021
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PROFESSIONAL LIABILITY LIST
S ECI 2019 04263
| RAYMOND WILLIAMS & ORS (according to the attached Schedule of Parties) | Plaintiffs |
| - and - | |
| TERENCE RIO RIENZO NUGARA & ORS (according to the attached Schedule of Parties) | Defendants |
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JUDGE: | Matthews AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 29 March 2021, 31 May 2021 |
DATE OF JUDGMENT: | 11 June 2021 |
CASE MAY BE CITED AS: | Williams v Nugara |
MEDIUM NEUTRAL CITATION: | [2021] VSC 331 |
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DAMAGES – Assessment of damages following entry of judgment in default of appearance by two of the defendants – Claims for damages as a consequence of tortious deceit, misleading or deceptive conduct, and negligence – Specific compensatory damages awarded, inclusive of interest – General damages awarded, for mental anguish, stress, anxiety, personal insecurity and distress – Casaclang v WealthSure Pty Ltd [2015] FCA 761 – Newman v Financial Wisdom Ltd [2004] VSC 216 – Giller v Procopets [2008] VSCA 236 – McLennan v Meyer Vandenberg [2020] ACTCA 7.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr C J Twidale | Pentana Stanton Lawyers |
| For the Defendants | No appearance | No appearance |
HER HONOUR:
This proceeding concerns the assessment of damages to be awarded to the Plaintiffs against the First and Fourth Defendants pursuant to judgment entered on 1 May 2020 in default of those Defendants filing a Notice of Appearance (‘Default Judgment’).
For the reasons which follow, I am satisfied that the Plaintiffs are entitled to the following awards of damages:
(a) Specific compensatory damages, being the amount assessed according to the Cash Loss Case as set out below, less $565,000 (ie $157,802.49); and
(b) $25,000 in general damages for mental anguish, stress, anxiety, personal insecurity and distress to Mr Williams, the First Plaintiff; and
(c) $25,000 in general damages for mental anguish, stress, anxiety, personal insecurity and distress to Mrs Williams, the Second Plaintiff.
In coming to this conclusion, I have had regard to the following material:
(a) Affidavit of Raymond Williams sworn 12 March 2021 (‘First Williams Affidavit’) and Exhibits thereto;
(b) Written outline of submissions for the Plaintiffs dated 15 March 2021;
(c) Affidavit of Raymond Williams sworn 10 May 2021 (‘Second Williams Affidavit’) and Exhibits thereto;
(d) Further written outline of submissions for the Plaintiffs dated 10 May 2021.
Background
In 2010, the First and Second Plaintiffs (together, ‘the Williamses’) sought accounting advice relating to their retirement and to a recently purchased investment property. The Williamses were referred by friends to the Third Defendant, Ms Tracey Redman‑Slater.[1]
[1]First Williams Affidavit, [3].
Ms Redman-Slater managed the tax affairs of the Williamses between June 2011 and June 2018.[2]
[2]First Williams Affidavit, [4].
On 21 September 2016, the Williamses attended the office of Ms Redman-Slater at 1/181 Bay Street, Brighton (‘Bay Street Office’) in order to complete their tax return for the financial year ending 30 June 2016. During this appointment Ms Redman‑Slater raised the Williamses’ superannuation.[3]
[3]First Williams Affidavit, [5].
At this time, the Williamses had four superannuation accounts, with a combined balance of $559,682.34:[4]
[4]First Williams Affidavit, [5]; Exhibits RW-31 – RW-34.
(a) Colonial Retirement Savings Superannuation Fund (Account Number 0110 2169 3623) with a balance of $6,427.60;
(b) Colonial Retirement Savings Superannuation Fund (Account Number 0110 3145 8066) with a balance of $283,890.72;
(c) Colonial FirstChoice Wholesale Allocated Pre-Retirement Pension (Account Number 0510 3145 7908) with a balance of $198,644.29; and
(d) Colonial First State Personal Super Superannuation Fund (Account Number 0110 2169 3557) with a balance of $70,719.73.
(‘Colonial Superannuation Funds’).
During the meeting on 21 September 2016, Ms Redman-Slater advised the Williamses that the Colonial Superannuation Fund was not performing well and that the money in the Colonial Superannuation Funds ought to be invested elsewhere. Ms Redman-Slater informed the Williamses of an investment ‘opportunity’ in a property development offering a much higher rate of return than the Colonial Superannuation Funds with minimal risk. Ms Redman-Slater arranged a meeting for 24 September 2018 between the Williamses, Ms Redman-Slater and the financial planner and advisor managing the investment - the First Defendant, Mr Terence Rio Rienzo Nugara.[5]
[5]First Williams Affidavit, [6] – [7].
On 24 September 2016, the Williamses met with Ms Redman-Slater and Mr Nugara at the Bay Street Office. Mr Nugara had a PowerPoint presentation prepared and ran the meeting from what was shown on the screen. He stated that he had previously worked at the Commonwealth Bank of Australia (‘CBA’) and that he was familiar with how CBA operates. He then identified himself as currently working as a property developer and a financial planner and advisor, and explained that he buys vacant blocks of land or land with demolition works required and builds luxury apartments.[6]
[6]First Williams Affidavit, [8] – [9].
Mr Nugara identified two previous property developments in his portfolio:[7]
(a) An unnamed Essendon property; and
(b) 1228 Malvern Road, Malvern.
[7]First Williams Affidavit, [10].
Mr Nugara explained that the investment proposal to be offered to the Williamses was in respect of a property at 1220-1224 Malvern Road, Malvern (‘Investment’ and ‘Development’).[8]
[8]First Williams Affidavit, [10].
Mr Nugara explained that the Development was about 75% completed, and that the completed apartments had already been sold. Mr Nugara advised that the Development would be completed in 2018.[9]
[9]First Williams Affidavit, [11].
Mr Nugara made numerous assertions about the characteristics of the Investment:[10]
[10]First Williams Affidavit, [12].
(a) There was a huge profit margin available and very high rate of return for investors;
(b) Returns were guaranteed;
(c) The Investment had almost zero risk;
(d) The Investment would be short-term, with completion in October 2018; and
(e) Returns would be much higher from the Investment than from the Colonial Superannuation Funds in the relevant time.
Mr Nugara proposed that the Williamses set up a Self-Management Superannuation Fund, the Jennifer Lee and Raymond Williams Super Fund (‘SMSF’) in order to invest the money currently in the Colonial Superannuation Funds into the Development.[11]
[11]First Williams Affidavit, [11].
The Williamses stated that they wished to proceed with the Investment. Mr Nugara had the Williamses sign a document, the details of which the Williamses could not recall, and requested the Williamses’ bank account details and pin numbers. Ms Redman-Slater and Mr Nugara then arranged the documentation for establishing the SMSF authorising the transfer of monies from the Colonial Superannuation Funds to the SMSF.[12]
[12]First Williams Affidavit, [13] – [14].
On 7 October 2016 the Williamses attended the Brighton Branch of the CBA with Ms Redman-Slater and Mr Nugara, where Mr Nugara arranged to set up the bank account for the SMSF. The Williamses signed the relevant documents as requested.[13]
[13]First Williams Affidavit, [15].
The account established at CBA is in the name of the Third Plaintiff, The Super Custodian for Jennifer Lee and Raymond Williams Pty Ltd as Trustees for the SMSF (‘Custodian’), with CBA branch number 063145 and account number 10433115 (‘CBA Account’).[14] As noted above, Mr Nugara asked for and was given the pin number for this account and was authorised to transact on the CBA Account.[15]
[14]First Williams Affidavit, [16].
[15]First Williams Affidavit, [13].
Between 7 October 2016 and 17 May 2019 (‘Relevant Period’), Mr Nugara withdrew a net sum of $511,430.00 from the CBA Account being $605,700.00 in withdrawals and 94,270.00 in deposits.[16]
[16]First Williams Affidavit, Exhibit RW-35. The CBA Account was closed in April 2019, however the Relevant Period continues until 17 May 2019 to capture a later payment by Mr Nugara, described at paragraph [22].
The Williamses requested copies of documents relevant to the CBA Account from Mr Nugara shortly after 7 October 2016, who advised them that they did not need any documentation at that stage and that he would deal with the CBA Account. The Williamses depose that they were unhappy about this arrangement but did not request documents in respect of the CBA Account again.[17]
[17]First Williams Affidavit, [17].
During the Relevant Period, the Williamses received a document titled ‘Unitholders Certificate’ dated 22 October 2016, stating that the SMSF was the registered holder of 500,00 units in the Munro Investments Unit Trust (ABN 179 6977 4611).[18] It became evident only in or around September 2019 that none of the money withdrawn by Mr Nugara from the CBA Account had been invested in the Development, and no stage payments or other payments had been made into the CBA Account in respect of the Development.[19]
[18]First Williams Affidavit, [21].
[19]First Williams Affidavit, Exhibit RW-36. Notice of intention to rely on the Statutory Declaration of Ray Werden dated 3 September 2019, contained in Exhibit RW-36, was given by the Plaintiffs on 22 March 2021 pursuant s 67 Evidence Act 2008 (Vic).
The Williamses did not see Mr Nugara during the Relevant Period. The Williamses sought to contact Mr Nugara on several occasions seeking an update on the Investment, but Mr Nugara rarely responded and, when he did respond, made excuses for the lack of information or returns as guaranteed including that:[20]
[20]First Williams Affidavit, [18], [22] – [24].
(a) There had been a delay with the sale of some of the units in the Development;
(b) The property market had declined;
(c) Mr Nugara was financially constrained due to difficulties obtaining credit from banks;
(d) Mr Nugara was waiting for information from Ms Redman-Slater (who, in turn, would defer requests for information by saying that she was waiting for information from Mr Nugara).
On 17 May 2019, following numerous attempts by the Williamses to meet with either or both of Ms Redman-Slater or Mr Nugara, the Williamses met with Mr Nugara at the Bay Street Office. Mr Nugara made further excuses for the delay and agreed to transfer $5,000.00 to the Williamses, which was completed on the same day.[21]
[21]First Williams Affidavit, [25] – [27].
On 15 July 2019, the Williamses made a further request to Mr Nugara for explanation concerning the Investment.[22]
[22]First Williams Affidavit, Exhibit RW-37.
By letter dated 5 August 2019 addressed to Mr Nugara and the Fourth Defendant (‘Skynet’) and headed ‘without prejudice save as to costs’, the Williamses demanded full accounting and documentation relating to the Investment, full payment of the 500,000 units in the Munro Investment Unit Trust, and costs of $20,000.00 within fourteen days.[23] Evidently, neither Mr Nugara nor Skynet responded to this letter.
[23]First Williams Affidavit, [29]; Exhibit RW-37.
Procedural History
By Writ and Statement of Claim dated 18 September 2019 the Williamses commenced proceedings against Mr Nugara and Ms Redman-Slater, and against the Second Defendant (‘FSP’) as the Australian Financial Services Licence holder for which Mr Nugara was alleged to be an authorised representative at the time of the Investment.
FSP and Ms Redman-Slater filed defences on 1 November and 8 November 2019, respectively.
By Notice of Dispute dated 22 November 2019, FSP identified Skynet as an entity apparently under the control of Mr Nugara or for which Mr Nugara was authorised to act, and an authorised representative of FSP, at the time of the Investment. Skynet was subsequently joined by Amended Writ dated 28 February 2020.
No appearance or defence was filed by Mr Nugara or Skynet and on 1 May 2020 the Default Judgment was entered against them for damages to be assessed.
On 22 May 2020 the Plaintiffs filed a Further Amended Writ and Statement of Claim (‘FASOC’).
The proceeding as against FSP and Ms Redman-Slater settled on 15 December 2020 on the following terms:[24]
[24]First Williams Affidavit, [32]; Affidavit of Jesse LaGreca sworn 4 June 2021, [7].
(a) FSP pay the Plaintiffs damages of $560,000.00 and costs of $20,000.00;
(b) Ms Redman-Slater pay the Plaintiffs the sum of $5,000.00.
(Together, ‘Settlement Sum’).
The Settlement Sum was received by the Plaintiffs on 18 December 2020.[25]
[25]First Williams Affidavit, [33].
On 17 December 2020 the Plaintiffs discontinued the proceedings as against FSP and Ms Redman-Slater.
On 3 February 2021, the Honourable Justice Macaulay made orders fixing the Plaintiffs’ assessment of damages against Mr Nugara and Skynet before me. Notice of the hearing of the assessment of damages, together with the First Williams Affidavit and the Plaintiffs’ written outline dated 15 March 2021, were served on Mr Nugara and Skynet on 15 March 2021 in accordance with orders previously made for substituted service by Judicial Registrar Clayton (as her Honour then was) on 12 February 2020.[26] While some of the mail was returned to sender, there is evidence that service by email on Mr Nugara was effective.[27] I am therefore satisfied that Mr Nugara had notice of the hearing of assessment of damages. Since Skynet is under Mr Nugara’s control, I am also satisfied that it had notice.
[26]Affidavit of Jesse LaGreca sworn 19 March 2021.
[27]Affidavit of Jesse LaGreca sworn 4 June 2021.
The hearing for the assessment of damages to be awarded against Mr Nugara and Skynet was listed before me on 29 March 2021. The hearing was adjourned part heard to 31 May 2021 and directions were made for further material to be put on.
Overview of the Plaintiffs’ claims for damages
The Plaintiffs’ claims in respect of Mr Nugara and Skynet are contained in the FASOC. Although the FASOC was filed after the Default Judgment against Mr Nugara and Skynet was entered, the usual rule is that amendments to originating documents take effect from the date of the originating document[28] (in this case, 18 September 2019) and I see no reason to depart from that rule in this case. Most importantly, there is no material difference between the FASOC and the Amended Writ and Statement of Claim filed 28 February 2020 in respect of Mr Nugara and Skynet.
[28]Pentridge Village Pty Ltd (In Liq) v Capital Finance Australia Ltd (No 2) [2020] VSC 284, [21].
In respect of Mr Nugara, the Plaintiffs claim damages for:
(a) Tortious deceit;[29]
(b) Misleading or deceptive conduct under section 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) (‘ASIC Act’) and section 18 of the Australian Consumer Law (‘ACL’);[30] and
(c) Negligence.[31]
[29]FASOC, [14] – [18].
[30]FASOC, [19] – [29].
[31]FASOC, [29A[1]] – [29A[3]].
In respect of Skynet, the Plaintiffs claim damages flowing from the conduct of Mr Nugara on the basis that the conduct of Mr Nugara was done by or on behalf of Skynet:[32]
(a) By reason of section 12GH of the ASIC Act and section 84 of the Competition and Consumer Act 2010 (Cth), Skynet is taken to have engaged in the conduct subject to the claims of misleading or deceptive conduct under the ASIC Act and ACL, respectively;
(b) The negligent conduct of Mr Nugara is taken to be conduct of Skynet, or Skynet is vicariously liable for that conduct.
[32]FASOC, [43A[2]].
By virtue of the entry of the Default Judgment, the material facts in the FASOC relied upon by the Plaintiffs in their claims against Mr Nugara and Skynet are taken to have been admitted.
The Plaintiffs sought damages to be assessed by reference to the actual pecuniary loss suffered by the Plaintiffs or, in the alternative, by reference to the lost opportunity to have retained the Colonial Superannuation Funds and any earnings on them. The Plaintiffs submitted that they were entitled to the greater of the amounts assessed under the two alternative approaches.
Further, the Plaintiffs sought general damages for mental anguish, stress, anxiety, personal insecurity and distress.
The Plaintiff also admitted, correctly in my view, that a deduction in favour of Mr Nugara and Skynet of $565,000.00 should be applied to reflect the payments of the Settlement Sum already made by the second and third defendants.[33]
[33]$565,000.00 reflects the compensatory components of the Settlement Sum. The $20,000.00 for costs in the Settlement Sum will be dealt with in the taxation of the costs of the proceeding.
The orthodox measure of damages for each of the claims made by the Plaintiffs is for an award of damages that would put the Plaintiffs in the position they would have been in but for the tortious or misleading or deceptive conduct.[34]
[34]See generally, but with particular regard for the orthodox position under the Trade Practices Act and what is now the ACL, Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1, 11-12 (Mason, Wilson and Dawson JJ). In respect of tortious deceit, see Toteff v Antonas [1952] 87 CLR 647, 650 (Dawson J); in respect of the tort of negligence this principle was established in Livingstone v Rawyards Coal Co (1880) 5 App Cas 25 (Lord Blackburn).
The FASOC also sought aggravated damages from Mr Nugara pursuant to the claim in deceit, however this head of damages was not pressed.
Specific compensatory damages
Cash Loss Case
The Plaintiffs’ primary submission was that damages should be assessed by reference to the cash losses suffered by the Plaintiffs due to Mr Nugara’s withdrawals from the CBA Account in the Relevant Period (‘Cash Loss Case’). In the Cash Loss Case, the Plaintiffs submit that they are entitled to repayment of the money withdrawn from the CBA Account in the Relevant Period, minus the deposits made by Mr Nugara in that time and the payment of $5000.00 on 17 May 2019, and interest. The net sum before interest in the Cash Loss Case is $506,430.00.[35]
[35]First Williams Affidavit, Exhibit RW-35.
The Plaintiffs submitted that interest in the Cash Loss Case should be calculated by reference to the sum of money withdrawn by Mr Nugara at any given time in the Relevant Period, such that the sum of money on which interest accrues is increased when a withdrawal is recorded on the CBA Account and decreased when a deposit is recorded. The Plaintiffs submitted that the sum of money withdrawn by Mr Nugara from the CBA Account at any given time in the Relevant Period is a ‘sum certain’ on which the rate of interest under section 58 of the Supreme Court Act 1986 (Vic) is payable. Accordingly, the Plaintiffs calculated the interest on the amounts withdrawn from the CBA Account by reference to the statutory interest rate under the Penalty Interest Rate Act 1983 which, from 7 October 2016 to 1 February 2017 was 9.5% per annum and, from 1 February 2017 is 10% per annum. The statements of the CBA Account in evidence before me establish that the sum of money withdrawn from that account are sums certain, and I am satisfied that the Plaintiffs’ approach to the calculation of interest on these sums is appropriate.
In respect of the time from which I should award interest, the Plaintiffs referred me to the case of Casaclang v WealthSure Pty Ltd.[36] That case involved similar claims for damages by investors against a person, Mr Oberg, who had procured their investment into accounts controlled by him, which investments had been lost. Buchanan J considered that the date of loss or damage from which interest should accrue was the date on which funds were transferred to the control of Mr Oberg. I respectfully agree, but note that the result would be the same if the date of loss or damage was the date of the first withdrawal from the CBA Account by Mr Nugara.
[36][2015] FCA 761.
‘No Transaction’ Case
In the alternative, the Plaintiffs submitted that damages should be assessed by reference to the position the Plaintiffs would have been in but for the tortious and/or misleading or deceptive conduct of Mr Nugara. The Plaintiffs submitted that the relevant counterfactual position was one in which there had been no transfer of money from the Colonial Superannuation Funds in 2016 or at any subsequent time (‘No Transaction Case’).
As a threshold matter, I accept the Plaintiffs’ evidence that, had Mr Nugara not engaged in the tortious or misleading or deceptive conduct, they would have maintained the Colonial Superannuation Funds,[37] and therefore accept that this is an appropriate baseline for assessment of compensatory damages for each claim.
[37]Second Williams Affidavit, [3(e)].
The Plaintiffs submit that, in the No Transaction Case, the Colonial Superannuation Funds would have a value at 5 May 2021 of $690,687.20.[38] This figure represents the sum of the exit unit price for each unit held in each of the accounts comprising the Colonial Superannuation Funds, based on the exit unit price for those funds as at that date.[39] I accept that this figure reflects the gross opportunity loss of the Plaintiffs at 5 May 2021, and that it includes interest accrued on the sum of money in the Colonial Superannuation Funds to that date at the rate applicable to those funds. Penalty interest pursuant to section 58 of the Supreme Court Act 1986 (Vic) would apply from 5 May 2021 to the date of final orders, on the amount that is the difference between $690,687.20 and the Settlement Sum.
[38]Second Williams Affidavit, [3(d)].
[39]First Williams Affidavit, [5]; Second Williams Affidavit, [3] and Exhibits RW-31 – RW-34, RW-46 – RW‑47.
That sum should also be adjusted to account for the closing balance of $1531.71 in the CBA Account as of 7 April 2019, which was presumably drawn down by the Williamses, and the $5,000.00 additional payment which Mr Nugara made to the Williamses on 17 May 2019 following the closure of the CBA Account.
General compensatory damages
As a further head of compensatory damages, the Williamses seek $25,000 each in general damages for mental anguish, stress, anxiety, personal insecurity and distress. These are also to be assessed against the position the Williamses would have been in had the money remained in the Colonial Superannuation Funds.
It is worth citing the evidence of Mr Williams in full in this regard. While Mr Williams puts his evidence in quite a subdued and limited fashion, the substantial burden placed on the Williamses by the conduct of Mr Nugara and Skynet is clear:[40]
[40]Second Williams Affidavit, [4] – [8].
4.Our involvement with Rio and the Second Defendant have created immense stress and hardship. The loss of our retirement savings has been difficult to come to terms with and our distress further exacerbates as we move closer to retirement age.
5.Jennifer and I engaged Rio as our financial advisor with the hopes of creating financial freedom for ourselves and to establish a comfortable retirement. We placed our trust and our future in what we believed was expert investing advice from a professional financial advisor.
6. This experience has resulted in:
(a) Almost five (5) years of being unable to contact Rio;
(b)Ongoing stress as we have no idea where our funds were or how they were being utilised; and
(c)Ongoing fear of going into retirement without our hard-earned superannuation.
7.Rio’s actions have caused significant stress and anxiety upon our lives. We have lost sleep and have felt psychological pressure in our daily lives moving towards retirement age.
8.As a result of Rio’s actions, we have been left without funds for our retirement and face financial difficulty for the remainder of our lives.
The Plaintiffs relied on the decision of Mandie J in Newman v Financial Wisdom Ltd[41] for the proposition that compensation for mental anguish and distress of this sort could be awarded in cases of negligence and statutory misleading or deceptive conduct.[42] I accept that this is so in respect of statutory misleading or deceptive conduct.[43]
[41][2004] VSC 216 (‘Newman’).
[42]Newman, [618] – [623].
[43]In respect of such claims under the ACL, see McLennan v Meyer Vandenberg [2020] ACTCA 7, [96] (per curiam) and cases cited there.
I also accept that such general damages are available for tortious deceit.[44]
[44]Giller v Procopets [2008] VSCA 236, [427] (Neave JA, Ashley JA agreeing).
In respect of mental anguish and distress occasioned by negligence, the Plaintiffs’ claim is barred by provision of the Wrongs Act 1958 (Vic) which did not apply at the time of the conduct the subject of Newman.[45] However, as the Plaintiffs’ claim under this head can be sustained under their other causes of action it is not necessary to address this point further.
[45]See especially sections 67, 73 and 74 Wrongs Act 1958 (Vic).
It has been said that damages for distress are recoverable pursuant to tortious deceit and misleading or deceptive conduct only if they are ‘reasonably foreseeable’.[46] It is certainly reasonably foreseeable in the circumstances of the present case that, as a result of Mr Nugara’s conduct, the Williamses would suffer considerable distress, disappointment and fear. Mr Nugara did not negligently invest the Williamses’ life savings; rather, he took them and did not apply them to the Investment, and put them beyond the reach of the Williamses. His conduct was deliberately deceitful and designed to deprive the Williamses of their life savings to his own benefit. It is therefore eminently foreseeable that such conduct would cause the Williamses to suffer considerable distress, disappointment and fear.
[46]Zoneff v Elcom Credit Union Ltd (1990) 94 ALR 445, [116].
General damages such as damages for distress are ‘at large’ and to be assessed with respect to the injury suffered by the Williamses.[47] Regard may be had to previous cases of a similar kind in which damages for distress have been awarded, however those cases do not establish a norm or standard by which awards of damages must be fixed.[48] Rather, ‘each case must be assessed according to the distress and disappointment which a person has suffered, and having regard to all of the facts and circumstances which are proved for that individual’.[49]
[47]Moore v Scenic Tours Pty Ltd[No 2] [2017] NSWSC 733, [912] – [913] (Garling J) (‘Moore’), upheld by the High Court in Moore v Scenic Tours Pty Ltd [2020] HCA 17.
[48]Moore, [914] – [916]; Planet Fisheries Pty Ltd v La Rosa (1968) 119 CLR 118, [11] (per curiam); Rogers v Nationwide News Ltd (2003) 216 CLR 327, [69] (Hayne J).
[49]Moore, [913].
I have had regard to the case of Newman, in which Mandie J in 2004 awarded between $10,000 and $25,000 in general damages for distress suffered by investors due to the economic loss suffered as a result of the defendant’s negligent and misleading or deceptive conduct.[50] Newman is relevant not only because it concerned similar causes of action in the context of financial services provided to relatively unsophisticated and trusting plaintiffs, but because in many cases the plaintiffs’ distress was exacerbated by the fact that their funds were lost when they were in or approaching retirement, and the funds reflected a loss of their lifesavings upon which they had depended.
[50]Newman, [629], [635] ,[640], [648] ,[655], [662], [667], [683], and [690].
I was not referred to any other case in which distress resulting from pure economic loss was compensated by an award of general damages. I have not had significant regard to awards of general damages for distress in other contexts, including awards of general damages for distress or disappointment for breach of contract or general damages for distress, pain and suffering resulting from physical or psychiatric injury. Those cases proceed on different footings and raise different kinds of compensable mental harm to the harm in this case, and are of limited value in considering the relationship between the harm in this case and the award of damages it attracts.
The distress caused to the Williamses by Mr Nugara’s conduct is significant, and cannot be addressed by a token amount. Mr Nugara’s conduct deprived the Williamses of their life savings as they approached retirement, and put the Williamses through considerable stress, fear and anxiety as they grappled with their future without those savings. The fact that the Williamses later recovered a substantial part of their savings from the Second and Third Defendant is highly relevant, and offsets the degree of ongoing distress suffered by the Williamses. Nonetheless, the distress suffered remains significant and, in my view, warrants the award of the full amount sought of $25,000 to each of the Williamses.
Conclusion
I am satisfied with the Cash Loss Case as the basis for the assessment of specific compensatory damages, which was the Plaintiffs’ primary submission. I note for completeness that I am also satisfied with the alternative submission based on the No Transaction Case.
As at 18 December 2020, being the date when the Plaintiffs received the Settlement Sum, the cumulative sum owing was $506,430, and interest at the penalty interest rate to that date was $216,372.49. $565,000 of the Settlement Sum then needs to be deducted, leaving the amount of $157,802.49 as the net Cash Loss inclusive of interest as at 18 December 2020. The Plaintiffs concede that the interest calculation should cease as at that date, as awarding interest on the net Cash Loss figure of $157,802.49 would effectively be to award interest on interest, which is not the approach to be taken.
In the result, I am satisfied that the Plaintiffs are entitled to the following awards of damages:
(a) Specific compensatory damages in accordance with the Cash Loss Case, being $157,802.49 (as described above); and
(b) $25,000 in general damages for mental anguish, stress, anxiety, personal insecurity and distress to Mr Williams; and
(c) $25,000 in general damages for mental anguish, stress, anxiety, personal insecurity and distress to Mrs Williams.
Orders will be made giving effect to the above. The final orders will also include an order that Mr Nugara and Skynet pay the Plaintiffs’ costs of and incidental to the proceeding, including reserved costs and the costs of obtaining the assessment of damages. Following the taxation of such costs, the amount in the Settlement Sum attributable to costs, being $20,000, can then be deducted.
The Plaintiffs’ solicitors should provide my Chambers with a draft form of order.
SCHEDULE OF PARTIES
| S ECI 2019 04263 | |
| BETWEEN: | |
| RAYMOND WILLIAMS | First Plaintiff |
| JENNIFER WILLIAMS | Second Plaintiff |
| THE SUPER CUSTODIAN FOR JENNIFER LEE AND RAYMOND WILLIAMS PTY LTD (ACN 615 108 560) (as Trustee for the Jennifer Lee and Raymond Williams Super Fund) | Third Plaintiff |
| - and - | |
| TERENCE RIO RIENZO NUGARA | First Defendant |
| FINANCIAL SERVICES PARTNERS PTY LTD (ACN 089 512 587) | Second Defendant |
| TRACEY REDMAN-SLATER | Third Defendant |
| SKYNET FINANCIAL SERVICES PTY LTD (ACN 136 506 020) | Fourth Defendant |
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