Validus Advisory Group Pty Ltd v Consolidated Tin Mines Ltd; Consolidated Tin Mines Ltd v Validus Advisory Group Pty Ltd [2018] NSWSC 417

Validus Advisory Group Pty Ltd v Consolidated Tin Mines Ltd; Consolidated Tin Mines Ltd v Validus Advisory Group Pty Ltd [2018] NSWSC 417

CSD was entitled to judgment because the funds advanced into Validus' trust account were held for a specific purpose and Validus withdrew $127,290 without CSD's required written email confirmation, and because the agreement related to financial product advice provided in the course of a financial services business by Validus without an AFSL, enabling CSD to rescind within a reasonable time and recover amounts paid under the agreement, excluding third-party payments CSD did not seek to recover.

Jurisdiction
Australia
Judgment Date
06 April 2018
Procedural Posture
Cross Claim in the Equity Division Commercial List for Recovery of Amounts Paid or Withdrawn Under a Corporate Advisory Agreement / Principal Judgment After Hearing; Cross Defendant Did Not Appear
Outcome
Cross-claimant entitled to judgment
Legal Topics
['capital Raising' 'australian Financial Services Licence' 'financial Product Advice' 'rescission Under S 925 a of the Corporations Act 2001 (cth)' 'quistclose Trust' 'breach of Trust' 'money Paid Under Mistake']
['corporations' 'equity' 'trusts' 'financial Services Regulation'] ['capital Raising' 'australian Financial Services Licence' 'financial Product Advice' 'rescission Under S 925 a of the Corporations Act 2001 (cth)' 'quistclose Trust' 'breach of Trust' 'money Paid Under Mistake']

Case Brief

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Procedural Posture

Cross Claim in the Equity Division Commercial List for Recovery of Amounts Paid or Withdrawn Under a Corporate Advisory Agreement / Principal Judgment After Hearing; Cross Defendant Did Not Appear

Legal Issues

  1. 1 ['Whether Validus was obliged to hold an Australian Financial Services Licence in relation to the agreement with CSD.' 'Whether the agreement related to the provision of financial services, including financial product advice.' 'Whether CSD was entitled to rescind the agreement under s 925A of the Corporations Act 2001 (Cth) and gave notice within a reasonable time.' "Whether funds deposited into Validus' trust account were held on a Quistclose trust for CSD." 'Whether Validus withdrew funds from the trust account without authority.']

Ratio Decidendi

CSD was entitled to judgment because the funds advanced into Validus' trust account were held for a specific purpose and Validus withdrew $127,290 without CSD's required written email confirmation, and because the agreement related to financial product advice provided in the course of a financial services business by Validus without an AFSL, enabling CSD to rescind within a reasonable time and recover amounts paid under the agreement, excluding third-party payments CSD did not seek to recover.

Court Disposition

Cross-claimant entitled to judgment

Orders

  • ['Judgment for Consolidated Tin Mines Ltd against Validus Advisory Group Pty Ltd in the sum of $199,091.49.' "Validus Advisory Group Pty Ltd to pay Consolidated Tin Mines Ltd's costs of the cross-claim."]