Westpac Banking Corporation v Lee [2013] NSWCA 375

Westpac Banking Corporation v Lee [2013] NSWCA 375

The appellants' conduct, including positive representations that GPS had substantially the same characteristics as PEL and could be exited penalty-free after one year, and their failure to disclose material differences between GPS and PEL, amounted to misleading or deceptive conduct under s 12DA of the ASIC Act. The respondents relied on these representations and suffered loss as a result. The appeal must therefore be dismissed.

Parties
First Appellant: Westpac Banking Corporation; Second Appellant: BT Funds Management Corporation Limited; Third Appellant: BT Funds Management No 2 Limited; First Respondent: Michael Lee; First Respondent: Majed Hawatt; Second Respondent: Sandstone Constructions Pty Limited
Jurisdiction
Australia
Judgment Date
11 November 2013
Procedural Posture
Civil Appeal / Court of Appeal; Principal Judgment
Outcome
Appeal dismissed
Legal Topics
Capital Protection Features in Financial Products, Misrepresentation, Non Disclosure, Reliance and Causation, Comparison of Financial Instruments
Misleading or Deceptive Conduct Financial Services Law Contracts Law Capital Protection Features in Financial Products Misrepresentation Non Disclosure Reliance and Causation Comparison of Financial Instruments

Case Brief

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Parties

Westpac Banking Corporation

First Appellant

BT Funds Management Corporation Limited

Second Appellant

BT Funds Management No 2 Limited

Third Appellant

Michael Lee

First Respondent

Majed Hawatt

First Respondent

Sandstone Constructions Pty Limited

Second Respondent

Procedural Posture

Civil Appeal / Court of Appeal; Principal Judgment

Legal Issues

  1. 1 Whether the appellants engaged in misleading or deceptive conduct under s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) in promoting the Guaranteed Portfolio Service (GPS)
  2. 2 Whether express and implied representations made about GPS's similarity to PEL and early exit features were misleading
  3. 3 Whether non-disclosure of key GPS features constituted misleading or deceptive conduct

Ratio Decidendi

The appellants' conduct, including positive representations that GPS had substantially the same characteristics as PEL and could be exited penalty-free after one year, and their failure to disclose material differences between GPS and PEL, amounted to misleading or deceptive conduct under s 12DA of the ASIC Act. The respondents relied on these representations and suffered loss as a result. The appeal must therefore be dismissed.

Court Disposition

Appeal dismissed

Orders

  • The appeal be dismissed.
  • The appellants to pay the respondents' costs.