Jordan v HLB Mann Judd Wealth Management (NSW) Pty Ltd [2013] FCA 315

Jordan v HLB Mann Judd Wealth Management (NSW) Pty Ltd [2013] FCA 315

Ms Jordan failed to prove that no reasonable financial adviser advising her in November 2006 should have recommended investments in the two Basis Funds as part of a diversified portfolio. HLB reasonably assessed her risk profile as between Balanced and Growth, reasonably relied on Lonsec research and ratings, and there was no evidence that HLB knew or ought to have known of information requiring a different assessment of the Basis Funds. The suitability-based misleading or deceptive conduct claim failed for the same reason. The misdescription claim concerning the Basis Yield Fund failed because Ms Jordan did not prove reliance or that she would have acted differently if it had been...

Jurisdiction
Australia
Judgment Date
09 April 2013
Procedural Posture
Claim for Damages for Negligence, Breach of Contractual and Tortious Duties of Care, Misleading or Deceptive Conduct, and Alleged Contravention of Financial Services Obligations / Final Judgment After Hearing; Leave to Amend Granted and Application Dismissed
Outcome
Application dismissed with costs; leave to amend granted.
Legal Topics
['professional Financial Advice' 'investment Suitability' 'risk Profile Assessment' 'hedge Funds' 'statement of Advice' 'former S 945 a of the Corporations Act 2001 (cth)' 'retail Client Threshold' 'causation and Damages']
['negligence' 'contract' 'tort' 'corporations Law' 'financial Services Regulation' 'misleading or Deceptive Conduct'] ['professional Financial Advice' 'investment Suitability' 'risk Profile Assessment' 'hedge Funds' 'statement of Advice' 'former S 945 a of the Corporations Act 2001 (cth)' 'retail Client Threshold' 'causation and Damages']

Case Brief

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Procedural Posture

Claim for Damages for Negligence, Breach of Contractual and Tortious Duties of Care, Misleading or Deceptive Conduct, and Alleged Contravention of Financial Services Obligations / Final Judgment After Hearing; Leave to Amend Granted and Application Dismissed

Legal Issues

  1. 1 ["Whether HLB and Lonsdale breached contractual or tortious duties of care by recommending investments in the Basis Aust-Rim Opportunity Fund and the Basis Yield Fund as part of Ms Jordan's portfolio." 'Whether the respondents engaged in misleading or deceptive conduct by representing that the investment recommendations were suitable for Ms Jordan having regard to her personal circumstances, risk profile and investment objectives.' 'Whether the Basis Yield Fund was misleadingly described as a fixed interest investment and, if so, whether that caused Ms Jordan loss.' 'Whether former s 945A of the Corporations Act 2001 (Cth) applied and was contravened.' 'Whether damages should be assessed by focusing only on the two failed Basis Funds.']

Ratio Decidendi

Ms Jordan failed to prove that no reasonable financial adviser advising her in November 2006 should have recommended investments in the two Basis Funds as part of a diversified portfolio. HLB reasonably assessed her risk profile as between Balanced and Growth, reasonably relied on Lonsec research and ratings, and there was no evidence that HLB knew or ought to have known of information requiring a different assessment of the Basis Funds. The suitability-based misleading or deceptive conduct claim failed for the same reason. The misdescription claim concerning the Basis Yield Fund failed because Ms Jordan did not prove reliance or that she would have acted differently if it had been...

Court Disposition

Application dismissed with costs; leave to amend granted.

Orders

  • ['The applicant have leave to amend her Amended Fast Track Application filed on 11 April 2012 by filing and serving a Further Amended Fast Track Application in accordance with MFI-2 marked as such on 28 May 2012.' 'The Application and the whole of the proceeding instituted thereby be dismissed.' "The applicant pay...