The Supreme Court of Western Australia has ruled against an adviser taken to court over “misleading and deceptive” conduct, ordering her to pay nearly $3 million in damages.
Marie Richardson, who traded under the name Mary Bermingham, was taken to court by her former client Phillip Lockyer over tax advice Ms Richardson had provided in relation to options exercised by Mr Lockyer’s wife.
According to court documents, Ms Richardson told Mr Lockyer he had “a substantial liability to pay income tax” after his wife exercised 500,000 options on a mining company, and advised him throughout 2007 and 2008 to make a number of negatively geared investments to reduce this liability.
The court found the premise of this advice provided by Ms Richardson and her business Bepad (which held an AFSL and traded under the name Sovereign Bridge Capital Group) “was flawed”, and that Mr Lockyer incurred numerous losses as a result of the advice he received from Ms Richardson.
Justice Paul Allan Tottle ruled in favour of Mr Lockyer, finding that Ms Richardson and her company had “breached the duty of care owed to Mr Lockyer” and provided advice on a complex issue that fell outside her area of expertise.
“Although I have expressed the breach of duty in different terms from those pleaded by Mr Lockyer, I find that the breaches of duty alleged by him are established,” Justice Tottle said.
“I would add that in my view the misleading conduct that established the defendant's liability under the statute constituted a breach of duty.
“Judgment should be entered in Mr Lockyer's favour in the sum of $2,900,853. I will hear the parties in relation to interest and costs.”
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 18 Oct 2018Aussies say royal commission won’t change their view of adviceBy James Mitchell
- 18 Oct 2018Hire younger advisers to get younger clients, paper suggestsBy Adrian Flores
- 18 Oct 2018Synchron launches app for adviser developmentBy Reporter
- 17 Oct 2018Private banking has no place for bad advisersBy Eliot Hastie
- 17 Oct 2018CBA admits failure to tackle conflicted adviceBy James Mitchell
- 16 Oct 2018NAB to address advice issues in $314m payoutBy Eliot Hastie
- view all