A NSW court has thrown out Commonwealth Financial Planning’s appeal of a negligence finding made against it, upholding a previous judge’s ruling of “misleading and deceptive” advice.
In a decision handed down today, a three-judge bench of the NSW Court of Appeal has dismissed the appeal brought by Commonwealth Financial Planning – a subsidiary of the Commonwealth Bank – in response to a previous decision in the case of Commonwealth Financial Planning Ltd v Couper, ordering the bank to pay legal costs.
The dispute originated when a former client of Commonwealth FP, Noel Stevens – who has since died from pancreatic cancer – brought a suit against his former financial adviser, Commonwealth FP-authorised representative Andrew Galloway.
According to court documents, Mr Stevens switched insurance providers from Westpac Life to CommInsure in 2010, upon the advice of Mr Galloway.
However, Mr Steven’s medical history was “not disclosed accurately to CommInsure” and upon making a claim the following year “CommInsure avoided the policy from inception”.
Mr Stevens initiated proceedings against Commonwealth FP, with the judge in that matter finding the bank’s financial planning arm was “liable for the negligence and misleading and deceptive conduct of Mr Galloway”.
The bank opted to appeal the decision, which has now been upheld in the Court of Appeal.
“The judgement should stand and the appeal should be dismissed because the written advice given by Mr Galloway was misleading and deceptive even if fully explained orally, and it caused Mr Stevens to cancel his Westpac Life policy,” the decision said.
The bench also made broader comments about appropriate advice, arguing that “for the advice to be appropriate, we incline to the view that it was necessary to do much more than say that the new policy was, like for like, dollar for dollar, better value.”
SUBSCRIBE TO THE IFA DAILY BULLETIN
23 Jan 2018Financial advice changing of guard ‘positive’By Staff Reporter
23 Jan 2018Royal commission, best interests duty and 2018 outlookBy Staff Reporter
23 Jan 2018Advisers challenged by geopolitical climate: reportBy Staff Reporter
23 Jan 2018ASIC to shadow shop mortgage brokersBy Annie Kane
22 Jan 2018Consumers less confident buying insurance onlineBy Staff Reporter
22 Jan 2018Hub24 announces platform enhancementsBy Staff Reporter
- view all