Australian Securities and Investments Commission v Select AFSL Pty Ltd (No 2)

• Jurisdiction: Australia Federal only
• Judgment Date: 08 July 2022
• Neutral Citation: [2022] FCA 786
• Date: 08 July 2022
• Court: Federal Court

FEDERAL COURT OF AUSTRALIA

Australian Securities and Investments Commission v Select AFSL Pty Ltd (No 2) [2022] FCA 786

File number:	NSD 1447 of 2019
Judgment of:	ABRAHAM J
Date of judgment:	8 July 2022
Catchwords:	CONFLICTED REMUNERATION – alleged contraventions of ss 963E, 963F and 963J of the Corporations Act 2001 (Cth) by the first and second defendants – where agents participated in certain sales incentives – whether benefits received by agents pursuant to certain sales incentives were conflicted remuneration within the meaning of s 963A – where benefits received were non-monetary benefits – where agents provided financial product advice within the meaning of s 766B(1) –– where benefits received could reasonably be expected to influence the financial product advice given – whether the volume-based presumption in s 963L applies – where the first defendant contravened s 963E when each of its agents accepted the conflicted remuneration and it was the responsible licensee – where the first defendant failed to take reasonable steps to ensure that agents did not accept the conflicted remuneration contrary to s 963F – where the second defendant contravened s 963J by giving each of the agents the conflicted remuneration – contraventions established ; CONSUMER LAW – financial services – sale of insurance products – sales and retention conduct – whether agents engaged in misleading or deceptive conduct contrary to s 12DA(1) of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) – whether false and/or misleading statements were made contrary to s 12DB(1) of the ASIC Act – whether agents engaged in unconscionable conduct contrary to s 12CB(1) of the ASIC Act – whether agents’ conduct was unduly harassing or coercive contrary to s 12DJ(1) of the ASIC Act – consideration of meaning of coercion in context of s 12DJ(1) of the ASIC Act – where consumers were vulnerable and/or in a weaker bargaining position – where most pleaded contraventions are established ; BANKING AND FINANCIAL INSTITUTIONS – sale of insurance products to retail clients – meaning of financial product advice – consideration of s 766B(1) of the Corporations Act – where the first defendant is the holder of an Australian Financial Services License (AFSL) – alleged contraventions of ss 912A(1)(a) and 912A(1)(c) by the first defendant – whether the first defendant, through use of its ‘Refer a Friend’ program, failed to do all things necessary to ensure that the financial services covered by its AFSL were provided efficiently, honestly and fairly contrary to s 912A(1)(a) – whether the first defendant, by contravening ss 963E and 963F, failed to comply with the financial services laws in Pt 7.7A Div 4 of the Corporations Act contrary to s 912A(1)(c) – whether the first defendant, by contravening ss 12DA(1), 12DB(1), 12DJ(1) and 12CB(1) of the ASIC Act, failed to comply with the financial services laws contrary to s 912A(1)(c) – contraventions of ss 912A(1)(a) and 912A(1)(c) established ; DIRECTOR’S DUTIES – alleged contraventions by the fourth defendant of his duty of care and diligence in s 180(1) of the Corporations Act owed to the first and second defendants – whether the fourth defendant failed to take reasonable steps to prevent the first and second defendants from engaging in contraventions of ss 963E, 963F and 963J of the Corporations Act – where there was a foreseeable risk that the giving and accepting of conflicted remuneration would expose the first and second defendants to harm – breach of s 180(1) established ; CORPORATIONS – attribution of conduct of directors, employees or agents under s 12GH of the ASIC Act – consideration of role of Retention Agents – accessorial liability – whether the fourth defendant was knowingly involved under s 79 of the Corporations Act in contraventions by the first and second defendants of ss 912A(1)(a) and 912A(1)(c) and ss 963E, 963F and 963J – accessorial liability established ; EVIDENCE – whether certain statements are properly characterised as admissions – where admissions were made by persons in examinations under s 19 of the ASIC Act and before the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry – failure by the defendants to call evidence from certain witnesses – whether Jones v Dunkel inferences can be drawn
Legislation:	Australian Securities and Investments Commission Act 2001 (Cth) Competition and Consumer Act 2010 (Cth) Corporations Act 2001 (Cth) Corporations Amendment (Future of Financial Advice) Act 2012 (Cth) Corporations Amendment (Further Future of Financial Advice Measures) Bill 2012 (Cth) Corporations Amendment (Further Future of Financial Advice Measures) Act 2012 (Cth) Evidence Act 1995 (Cth) Insurance Contracts Act 1984 (Cth) Royal Commissions Act 1902 (Cth) Trades Practices Act 1974 (Cth)
Cases cited:	Adams v Director of the Fair Work Building Industry Inspectorate [2017] FCAFC 228; (2017) 258 FCR 257 Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) [2009] HCA 41; (2009) 239 CLR 27 Alliance Craton Explorer Pty Ltd v Quasar Resources Pty Ltd [2013] FCAFC 29; (2013) 296 ALR 465 Allianz Australia Insurance Limited v Delor Vue Apartments CTS 39788 [2021] FCAFC 121; (2021) 396 ALR 27 Aqua-Marine Marketing Pty Ltd v Pacific Reef Fisheries (Australia) Pty Ltd (No 5) [2012] FCA 908 Australian Competition and Consumer Commission v Accounts Control Management Services Pty Ltd [2012] FCA 1164 Australian Competition and Consumer Commission v ACM Group Ltd (No 2) [2018] FCA 1115 Australian Competition and Consumer Commission v Australian Institute of Professional Education Pty Ltd (in liq) (No 3) [2019] FCA 1982 Australian Competition and Consumer Commission v Birubi Art Pty Ltd [2018] FCA 1595 Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 634; (2014) 317 ALR 73 Australian Competition and Consumer Commission v IMB Group Pty Ltd [2003] FCAFC 17 Australian Competition and Consumer Commission v Keshow [2005] FCA 558 Australian Competition and Consumer Commission v Maritime Union of Australia [2001] FCA 1549; (2001) 114 FCR 472 Australian Competition and Consumer Commission v McCaskey [2000] FCA 1037; (2000) 104 FCR 8 Australian Competition and Consumer Commission v Panthera [2020] FCA 340; (2020) 143 ACSR 486 Australian Competition and Consumer Commission v Quantum Housing Group Pty Ltd [2021] FCAFC 40; (2021) 388 ALR 577 Australian Competition and Consumer Commission v Radio Rentals Ltd [2005] FCA 1133; (2005) 146 FCR 292 Australian Competition and Consumer Commission v Safety Compliance Pty Ltd [2015] FCA 211 Australian Competition and Consumer Commission v Telstra Corporation Ltd [2021] FCA 502; (2021) 392 ALR 614 Australian Competition and Consumer Commission v Ultra Tune Australia Pty Ltd [2019] FCA 12 Australian Securities and Investments Commission v Adler [2002] NSWSC 171; (2002) 168 FLR 253 Australian Securities and Investments Commission v AGM Markets Pty Ltd (in liq) (No 3) [2020] FCA 208; (2020) 275 FCR 57 Australian Securities and Investments Commission v Avestra Asset...