The Queensland Court of Appeal has upheld a negligence finding against Westpac for “misleading and negligent” investment advice involving the SMSF of a prominent businessman and former politician.
The court threw out an appeal by Westpac in the lawsuit, which had been brought in 2007 by Mark Jamieson, a former Sunshine Coast mayor and CEO of APN News and Media, after he sustained losses, having acted on the recommendations of Westpac financial planner Robert Tindall.
The three-judge bench also dismissed a cross-appeal from Mr Jamieson regarding the method that will be used to calculate damages.
According to court documents, Mr Jamieson and his wife Lorrell received a statement of advice from Mr Tindall in May 2007 that recommended the couple borrow $5 million to invest in a Macquarie-owned managed investment scheme and borrow $600,000 against existing property to make an un-deducted contribution to their SMSF.
“Both investments were unsuccessful, in part because of the effect of the global financial crisis,” said Justice Applegarth in the unanimous decision. “Mr and Mrs Jamieson sued the bank and claimed damages for breach of contract, negligence and contravention of statute.”
The Queensland Supreme Court ruled that the bank was in breach of contract and that the financial adviser’s conduct may also be considered “misleading or deceptive”, in contravention of the ASIC Act, since he failed to adequately disclose particulars of the recommended loan.
The bank rejected the notion that it had breached its contract, arguing that the losses sustained by the Jamiesons were caused by the poor performance of the MQ Gateway Trust MIS and not by the recommendation of Mr Tindall – but all three appellate judges were ultimately unconvinced by Westpac’s line of defence.
Mr Jamieson told The Australian newspaper that he and Mrs Jamieson are “happy with the outcome” but also “disappointed” they were forced to “fight the Westpac hierarchy”.
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