Kim v Wang

• Jurisdiction: Australia Federal only
• Judgment Date: 25 July 2023
• Neutral Citation: [2023] FCAFC 115
• Date: 25 July 2023
• Court: Full Federal Court (Australia)

Federal Court of Australia

Kim v Wang [2023] FCAFC 115

Appeal from:
File number:	NSD 972 of 2022
Judgment of:	MOSHINSKY, LEE AND JACKMAN JJ
Date of judgment:	25 July 2023
Catchwords:	CORPORATIONS – misleading or deceptive conduct in relation to financial services – accessorial liability – where the applicant alleged at first instance that two companies (TM Index and TMK Index) made representations to potential investors that the companies’ investments were legitimate and regulated by the Australian Securities and Investments Commission – where the real issue at first instance was whether the respondent was involved in making the representations – where the primary judge was not satisfied that the respondent had actual knowledge of the making and falsity of the representations – whether the primary judge erred in not inferring that the respondent had actual knowledge of these matters
Legislation:	Australian Securities and Investments Commission Act 2001 (Cth), ss 5, 12DA, 12GF, 12GH Corporations Act 2001 (Cth), s 79, 761A, 911A, 912DA, 913B, 913BA, 915A Evidence Act 1995 (Cth), s 98 Federal Court of Australia Act 1976 (Cth), ss 28, 33C, 33H, 33J, 33V, 33ZB Trade Practices Act 1974 (Cth) Federal Court Rules 2011, r 39.05
Cases cited:	Australian Competition and Consumer Commission v Michigan Group Pty Ltd [2002] FCA 1439 Australian Securities and Investments Commission v ActiveSuper Pty Ltd (in liq) [2015] FCA 342; 235 FCR 181 Australian Securities and Investments Commission v Hellicar [2012] HCA 17; (2012) 247 CLR 345 Axon v Axon (1937) 59 CLR 395 Blatch v Archer (1774) 1 Cowp 63 Bowler v Hilda Pty Ltd [2000] FCA 899 Compaq Computer Australia Pty Ltd v Merry [1998] FCA 968; 157 ALR 1 Cooper v The Queen [2012] HCA 50; (2012) 87 ALJR 32 Coulton v Holcombe (1986) 162 CLR 1 Edwards v The Queen (1993) 178 CLR 193 Ethicon Sàrl v Gill [2021] FCAFC 29; (2021) 288 FCR 338 Fox v Percy [2003] HCA 22; 214 CLR 118 Giorgianni v The Queen [1985] HCA 29; (1985) 156 CLR 473 Girlock (Sales) Pty Ltd v Hurrell (1982) 149 CLR 155 Jones v Dunkel (1959) 101 CLR 298 Keller v LED Technologies Pty Ltd [2010] FCAFC 55; 185 FCR 449 Kozarov v Victoria [2022] HCA 12; 273 CLR 115 Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2010) 243 CLR 361 Lee v Lee [2019] HCA 28; 266 CLR 129 Marriner v Australian Super Developments Pty Ltd [2016] VSCA 141 Moriarty v London, Chatham & Dover Railway Co (1870) LR 5 QB 314 NMFM Property Pty Ltd v Citibank Ltd (No 10) (2000) 107 FCR 270 NOM v Director of Public Prosecutions [2012] VSCA 198; (2012) 38 VR 618 Oran Park Motor Sport Pty Ltd v Fleissig [2002] NSWCA 371 Pioneer Mortgage Services Pty Ltd v Columbus Capital Pty Ltd [2015] FCA 1067 Quinlivan v Australian Competition and Consumer Commission [2004] FCAFC 175; 160 FCR 1 R v Burdett (1820) 4 B & Ald 95; 106 ER 873 Roberts-Smith v Fairfax Media Publications Pty Limited (No 41) [2023] FCA 555 Sagacious Legal Pty Ltd v Wesfarmers General Insurance Ltd [2011] FCAFC 53 Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 The Zamora (No 2) [1921] 1 AC 801 Tozer Kemsley & Millbourn (A’Asia) Pty Ltd v Collier’s Interstate Transport Service Limited (1956) 94 CLR 384 Transport Industries Insurance Co Ltd v Longmuir [1997] 1 VR 125 Uniting Church in Australia Property Trust (NSW) v Allianz Australia Insurance Limited (Liability Judgment) [2023] FCA 190 Walplan Pty Ltd v Wallace (1985) 8 FCR 27 Warren v Coombes [1979] HCA 9; 142 CLR 531 Yorke v Lucas [1985] FCA 65; 158 CLR 661 Zervas v Burkitt (No 2) [2019] NSWCA 236
Division:
Registry:
National Practice Area:
Sub-area:
Number of paragraphs:	280
Date of last submissions:	31 May 2023
Date of hearing:	24 May 2023
Counsel for the Appellant:	Mr BW Walker SC with Mr JE Mack and Mr TL Bagley
Solicitor for the Appellant:	RESURGAM Law Corporation
Counsel for the Respondent:	Mr DR Pritchard SC with Mr AJ Macauley
Solicitor for the Respondent:	KPL Lawyers

ORDERS

		NSD 972 of 2022
BETWEEN:	KWANGHO KIM Appellant
AND:	YINGJIE WANG Respondent

order made by:	MOSHINSKY, LEE AND JACKMAN JJ
DATE OF ORDER:	25 JULY 2023

THE COURT ORDERS THAT:

1. The appeal be allowed.

2. Orders 2 and 3 made on 7 October 2022 be set aside.

3. The following questions common to the claims of group members be answered as follows (adopting the abbreviations used in the fourth amended statement of claim):

Question 1: During the Relevant Period, did TM Index or TMK Index:

1. conduct any business;

2. have available for purchase any “T”, “M” or “K” products;

3. use the MT4 trading platform;

4. use the EA system to trade on behalf of investors; or

5. intend that any monies received from investors would be traded or invested on behalf of the investor?

Answer: No

Question 2: Did TMI Index make the:

1. TM Trading Profit Representation;

2. TM Guaranteed Returns Representation;

3. TMK Guaranteed Returns Representation;

4. TM Index Legitimacy Representation?

Answer: No to questions (i), (ii) and (iii); Yes to question (iv).

Question 3: Did TMK Index make the:

1. TM Trading Profit Representation;

2. TMK Guaranteed Returns Representation;

3. TMK Index Legitimacy Representation?

Answer: No to questions (i) and (ii); Yes to question (iii).

Question 4: By reason of the True Position, were the Representations misleading or deceptive or likely to mislead or deceive within the meaning of s 12DA of the ASIC Act?

Answer: Yes, as to the TM Index Legitimacy Representation and the TMK Index Legitimacy Representation; No as to the other Representations.

Question 5: Did TM Index contravene s 12DA(1) of the ASIC Act by engaging in the TM Index Contravention?

Answer: Yes, but only to the extent of the TM Index Legitimacy Representation.

Question 6: Did TMK Index contravene s 12DA(1) of the ASIC Act by engaging in the TMK Index Contravention?

Answer: Yes, but only to the extent of the TMK Index Legitimacy Representation.

Question 7: Was Mr Wang involved in the TM Index Contravention or TMK Index Contravention within the meaning of s 12GF(1) of the ASIC Act?

Answer: Yes, but only to the extent of the TM Index Legitimacy Representation and the TMK Index Legitimacy Representation.

4. Pursuant to s 33ZB of the Federal Court of Australia Act 1976 (Cth) (the FCA), the persons bound by the judgment of the Full Court are the group members (other than any person who opted out of the proceeding under s 33J of the FCA within the time provided), the applicant and the third respondent.

5. The respondent pay the appellant’s costs of the appeal, and of the proceedings at first instance.

6. The parties file and serve by 4pm on 27 July 2023 a submission of no more than two pages addressing the question as to what orders should be made as to the resolution of individual claims of group members and what, if any, order...