Australian Securities and Investment Commission v Westpac Securities Administration Limited - [2019] FCAFC 187 - FCAFC 2019 case summary — Zoe

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Australian Securities and Investment Commission v Westpac Securities Administration Limited

[2019] FCAFC 187

Federal Court of Australia (Full Court)|2019-10-28|Before: Allsop CJ, O'Bryan JJ

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Court

Federal Court of Australia (Full Court)

Decision date

2019-10-28

Before

Allsop CJ, O'Bryan JJ

Source

Original judgment source is linked above.

Judgment (27 paragraphs)

[1]

Introduction 304 In this proceeding, the plaintiff (ASIC) seeks relief against the defendants, Westpac Securities Administration Limited (WSAL) and BT Funds Management Limited (BTFM), for alleged contraventions of Chapter 7 of the Corporations Act 2001 (Cth) (Act). Amongst other things, Chapter 7 is concerned with the licensing and regulation of providers of financial services. 305 Each of the defendants is and was at all relevant times a wholly owned subsidiary of Westpac Banking Corporation and part of the BT Financial Group which is the wealth management division of the Westpac group of companies. Each is and was at all relevant times the trustee of a superannuation fund which was a regulated superannuation fund under the Superannuation Industry (Supervision) Act 1993 (Cth). Each is and was at all relevant times the holder of an Australian financial services licence (AFSL) granted under s 913B of the Act. Under their respective licences, each of the defendants was authorised to provide financial product advice, including in relation to superannuation products, which was general advice (within the meaning of s 766B(4) of the Act) but was not personal advice (within the meaning of s 766B(3) of the Act). 306 Over a number of years from 2013 to 2016, the defendants (to which I will refer collectively as Westpac) engaged in a campaign to encourage members of the superannuation funds of which they were trustees (the BT superannuation funds) to roll over superannuation held by the member in an account with other funds (external superannuation accounts) into their account in the BT superannuation funds (BT account). The campaign included written communications by which Westpac offered those members (also referred to by the primary judge as customers) a service comprising a free search for external superannuation accounts the member might hold and telephone calls during which the member, who may or may not have accepted the free search offer, was offered a further service of arranging a rollover of their external superannuation accounts into their BT account. As a result of the campaign, Westpac successfully increased its funds under management in the BT superannuation funds by almost $650 million. 307 ASIC's case was principally based on telephone calls made to 15 customers during 2014. Each of the 15 customers was a member of the BT superannuation funds and was a retail client for the purposes of s 761G of the Act. 308 I have had the advantage of reading the reasons for judgment of Allsop CJ. I gratefully adopt his Honour's summary of the detailed factual findings of the primary judge. 309 ASIC sought declarations that Westpac's conduct involved: (a) breaches of conditions of Westpac's Australian financial services licences by providing personal advice in contravention of s 912A(1)(b) of the Act; (b) the provision of personal advice without providing a statement of advice in contravention of s 946A of the Act; (c) a contravention of s 961K of the Act by reason of a failure by relevant staff to act in the best interests of clients in contravention of s 961B(1) of the Act; (d) a failure to ensure that financial services were provided efficiently, honestly and fairly in contravention of s 912A(1)(a) of the Act; and (e) a failure to comply with financial services laws in contravention of s 912A(1)(c) of the Act. 310 ASIC also sought orders that Westpac pay a pecuniary penalty in respect of the contraventions of s 961K of the Act. 311 The primary judge summarised her conclusions as follows: [17] Except in the case of customer 3, the calls to the 15 customers involved the provision of "financial product advice" within the meaning of s 766B(1) of the Act. In particular, and contrary to Westpac's case study above stating that a consultant qualified to provide only general advice was unable to advise customers as to whether they should consolidate their funds into the BT account, each caller impliedly made a recommendation to that effect. [18] Each recommendation was intended to influence the relevant customer in making a decision in relation to a particular financial product, being their respective BT accounts or their respective external accounts. ASIC has not demonstrated a relevant intention to influence customer 3. [19] In some cases, the calls also involved the provision of "statements of opinion" that were "financial product advice" within the meaning of s 766B(1), however, for each customer, the "recommendations" and "statements of opinion" were given in the same circumstances for the purposes of determining whether s 766B(3) applies. Accordingly, even if the "recommendations" and "statements of opinion" comprised separate pieces of "financial product advice", there is no need to give separate consideration to whether the "statements of opinion" were "personal advice". [20] The "financial product advice" was not "personal advice" within the meaning of s 766B(3)(a) of the Act because the callers did not consider one or more of the objectives, financial situation and needs of the customers to whom the advice was given. [21] Further, the "financial product advice" was not given in circumstances where a reasonable person might expect the provider of that advice to have considered the financial situation of the customer. [22] Accordingly, the "financial product advice" was not "personal advice" within the meaning of s 766B(3)(b). [23] It follows that ASIC has failed to demonstrate the alleged contraventions of s 912A(1)(b) of the Act, being that WSAL and BTFM breached the conditions of their respective AFSLs by providing personal financial product advice. [24] Similarly, ASIC has failed to demonstrate the alleged contraventions of s 946A and 961B of the Act, both of which depended upon proving that Westpac had provided "personal advice". [25] By adopting the approach recorded in the QM Framework, Westpac provided "financial product advice" comprising the implied recommendation to accept the rollover service without explaining that a prudent customer may wish to consider matters of the kind that would be considered if the recommendation had been given as personal advice. The QM Framework also involved encouraging customers to accept the rollover service with the use of "social proofing" by which customers were told that their beliefs or reasons were commonly held. The fact that a customer's belief or rationale was commonly held was not a matter that would have provided a basis for the recommendation, if it had been given as personal advice. The QM Framework approach was admittedly self-interested and did not necessarily promote the best interests of the customers but the approach did not draw the customers' attention to either of those matters. Rather, it strongly conveyed the impression that Westpac was assisting the customer by its rollover service and, particularly by "social proofing", the impression that customers should feel comfortable in accepting the service without giving consideration to their particular circumstances. In fact, as Westpac knew, there were matters (of the kind that would be considered if the "financial product advice" was given as "personal advice") that, acceptance of the rollover service might have adverse consequences for the customer. [26] While not dishonest, in my view, the adoption and implementation of these aspects of the QM Framework approach failed to ensure that the "financial product advice", being a financial service covered by Westpac's AFSLs, was provided "efficiently, honestly and fairly" in contravention of s 912A(1)(a) of the Corporations Act 2001 (Cth). 312 The appeal by ASIC and cross-appeal by Westpac raise four principal questions: (a) Did Westpac's conduct involve the provision of financial product advice within the meaning of s 766B(1) of the Act? (b) If so, was the advice "personal advice" within the meaning of s 766B(3) of the Act or "general advice" within the meaning of s 766B(4) of the Act? (c) If the advice was personal advice, did Westpac's representatives who provided the advice contravene s 961B of the Act (thereby causing Westpac to contravene s 961K of the Act)? (d) Did Westpac's conduct involve a contravention of s 912A(1)(a) of the Act? 313 There was no challenge by ASIC or Westpac to the primary judge's factual findings concerning Westpac's conduct, although challenge was made to the proper characterisation of the conduct in reference to the legislative requirements. The appeal primarily concerns the circumstances and content of the telephone calls made to Westpac's customers that were the subject of the findings by the primary judge, other than customer 3 (thus 14 customers in total). 314 Each of the questions raised by the appeal and cross-appeal concern the proper construction of the statutory provisions and their application to the facts as found. In the course of argument before the primary judge and on this appeal, the statutory provisions have been subjected to detailed analysis. The excessive focus on the meaning of individual words within a statutory provision, separated from the sentence of which the words form part, can have a tendency to obscure meaning. Neither the statutory provisions in issue in this proceeding, nor the commercial matters with which they are concerned, are complex. The provisions require providers of financial services to adhere to certain standards of conduct when, relevantly, they provide advice. 315 The primary judge summarised the key aspects of Chapter 7 of the Act, providing the relevant statutory context in which to construe the provisions in dispute. It is helpful to reiterate certain of those matters at the outset. 316 Section 760A states that the main object of Chapter 7 is to promote: (a) confident and informed decision making by consumers of financial products and services while facilitating efficiency, flexibility and innovation in the provision of those products and services; (b) fairness, honesty and professionalism by those who provide financial services; (c) fair, orderly and transparent markets for financial products; and (d) the reduction of systemic risk and the provision of fair and effective services by clearing and settlement facilities. 317 The objects stated in paragraphs (a) and (b) of s 760A are particularly relevant to the statutory provisions in dispute in this proceeding. 318 Part 7.1 of the Act defines the key concepts and expressions used in the remainder of Chapter 7. A key concept within Chapter 7 is the provision of a financial service, as it is the provision of financial services that is licensed and regulated by the Chapter. Section 766A(1)(a) provides that a person provides a financial service if, relevantly, they provide financial product advice. The expression "financial product advice" is defined in s 766B(1) which is central to the questions raised on the appeal. There are two types of financial product advice: personal advice (defined in s 766B(3)) and general advice (defined in s 766B(4)). 319 Part 7.6 of the Act is titled "Licensing of providers of financial services". Division 2 of that Part requires persons who carry on a financial services business to hold an Australian financial services licence covering the provision of the financial services, subject to various exemptions stated in the Division. Division 3 of Part 7.6 imposes various obligations on financial services licensees. Section 912A imposes general obligations on licensees, including the obligation in s 912A(1)(a) to do all things necessary to ensure that the financial services covered by the licence are provided efficiently, honestly and fairly. 320 Part 7.7 of the Act regulates the disclosures that are required to be given by financial services licensees in various circumstances, including in relation to the provision of financial product advice, whether general advice or personal advice. More stringent obligations are imposed in relation to the provision of personal advice. 321 Part 7.7A of the Act imposes additional obligations on a licensee in relation to the provision of personal advice to a person as a retail client, including particularly the obligation to act in the best interests of the client in relation to the advice (under s 961B). 322 The definition of financial product advice in s 766B(1), and the dependent definitions of "personal advice" and "general advice", play an important role in the regulation of the provision of financial services under Chapter 7 of the Act. As the primary judge found (at [81]), adopting a contention advanced by ASIC, the definition of personal advice in s 766B(3) is fundamental to the legislative scheme regulating financial advice, as it demarcates the important boundary between "personal advice" and "general advice": the former requires advice appropriate to the client and strict obligations of disclosure and disinterestedness. 323 For the reasons set out below, I would allow ASIC's appeal and dismiss Westpac's cross-appeal. In my view, Westpac's campaign to influence members of its superannuation funds to roll over their external superannuation accounts into their BT accounts is conduct to which the relevant provisions of Chapter 7 are directed. By the campaign, Westpac communicated a recommendation to its members to undertake that action with the intention of influencing them to do so, thereby providing financial product advice. The techniques deployed by Westpac in the campaign created the circumstance that a reasonable member, receiving the advice, might expect Westpac to have considered the member's objectives, financial situation and needs in providing the advice. A consumer of financial services who is placed in that circumstance is vulnerable to the risk of making uninformed decisions because they wrongly believe that the advice given to them is fair and balanced when it is partial and incomplete. Chapter 7 protects consumers of financial services being placed in that circumstance by classifying advice given in those circumstances as personal advice and imposing consumer safeguards. Those safeguards include the obligations imposed on the adviser to provide the consumer with a statement of advice and to act in the best interests of the consumer in relation to the advice. Westpac did not comply with those obligations. The advice it gave to its members was partial and incomplete. It failed to act in the best interests of its members and it failed to ensure that the financial services covered by its AFSL were provided efficiently, honestly and fairly.

[3]

Primary judge's conclusion 324 Section 766B(1) provides as follows: (1) [Meaning of financial product advice] For the purposes of this Chapter, financial product advice means a recommendation or a statement of opinion, or a report of either of those things, that: (a) is intended to influence a person or persons in making a decision in relation to a particular financial product or class of financial products, or an interest in a particular financial product or class of financial products; or (b) could reasonably be regarded as being intended to have such an influence. 325 The primary judge concluded that the telephone calls made to Westpac's customers involved the provision of financial product advice within the meaning of s 766B(1) of the Act (at [372]). That conclusion was based on three intermediate findings: (a) that in the course of the calls to each customer, the following statements of opinion were made (at [366]): (i) statements to the effect that, by rolling over the customer's external superannuation accounts into the customer's BT account, the customer could or may (but not would, except in the case of customer 11) save on fees; (ii) statements to the effect that, by rolling over the customer's external superannuation accounts into the customer's BT account, the customer would improve the "manageability" of their superannuation; (iii) statements to the effect that a rollover into the customer's BT account would be beneficial to the customer because, for example, it would be beneficial to pay only one set of fees or because there would be unspecified benefits; and (iv) statements to the effect that, by rolling over the customer's external superannuation accounts into the customer's BT account, the customer could get a better return on their superannuation or could improve the performance of their superannuation. (b) that in the course of the calls to each customer, and wholly or predominantly through the statements of opinion, an implied recommendation was made that the customer should roll over their external superannuation accounts into their BT account (at [260] and [367]); and (c) that each of the recommendations and the statements of opinion was intended by the caller to influence the customer in making a decision to roll over the customer's external superannuation account into their BT account (at [370]).

[4]

Westpac's cross-appeal 326 By ground 1 of its cross-appeal, Westpac contends that the primary judge erred in finding that Westpac made recommendations or statements of opinion, within the meaning of s 766B(1), during the calls. In support of that contention, Westpac advanced three principal submissions concerning the proper construction of s 766B(1). 327 First, the primary judge's approach to the interpretation of s 766B(1) involved construing the expressions "recommendation" and "statement of opinion" in isolation from the text and subject matter of the provision as a whole. The subject matter of the section is the identification of "financial products advice", a statutory concept upon which a series of rights and obligations depend. Westpac submitted that the subsidiary expressions "recommendation" and "statement of opinion" must be construed in light of the fact that they are being used in a provision which defines the ambit of conduct bearing the character of "advice". Westpac relied on Rennie Golledge Pty Ltd v Ballard (2012) 82 NSWLR 231 at [129] for the proposition that the ordinary meaning of a word defined in a statute may properly influence the interpretation of the definition. Westpac observed that the word "advice" is relevantly defined in the Macquarie dictionary as "an opinion recommended, or offered, as worthy to be followed". It followed, on Westpac's submission, that the whole of the communication must be analysed to determine whether it contains a recommendation or statement of opinion having the character of advice. 328 Second, Westpac submitted that the proper construction of s 766B(1) ought be informed by the statutory consequences of a finding that a person provides financial product advice. Where the financial product advice is personal advice, a statement of advice with a mandatory content must generally be provided (see ss 944A, 946A and 947B(2) of the Act). Westpac submitted that the requirement that the statement set out the advice, and the information about the basis on which the advice is given, would be unworkable if the relevant recommendation or statement of opinion could comprise every statement of fact, sales message or expression of enthusiasm which a financial product issuer makes about its own financial products. 329 Third, Westpac submitted that the primary judge erred by ascribing meaning to the statutory expression "statement of opinion" by recourse to analogy with the law of evidence and the distinction between fact and opinion in that context. Westpac agreed that the expression "statement of opinion" excludes mere statements of fact. However, Westpac submitted that it does not follow that any statement about a financial product which involves a process of inferential reasoning is a "statement of opinion" within the meaning of s 766B(1). Westpac submitted that, in the context of s 766B(1), a statement of opinion means an opinion about whether the recipient should make a decision relating to a financial product.

[5]

Meaning of s 766B(1) 330 In my view, Westpac has failed to show any error in the primary judge's construction of s 766B(1) of the Act. Westpac's narrower construction involves the addition of impermissible glosses to the plain words of the section. 331 The primary judge commenced her consideration of the section by referring to the following key principles of statutory construction that had been identified by the parties as applicable in this case (at [80]): (a) words in a statute must be considered in context, which context includes legislative history and extrinsic materials, but such materials cannot displace the clear meaning of the text: Commissioner of Taxation (Cth) v Consolidated Media Holdings Limited (2012) 250 CLR 503 at 519 [39]; (b) the construction of the text arrived at should have both internal logical consistency, and involve an overall harmonious interpretation: Independent Commission Against Corruption v Cunneen (2015) 256 CLR 1 at 20-21 [31] citing Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 (Project Blue Sky Inc) at 381-382 [69]-[70]; (c) while the task of statutory construction must begin with a consideration of the text itself, the meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision and the mischief it is seeking to remedy: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at [47]; and (d) the Court will also have regard to the consequences of a particular interpretation and will prefer a construction that will avoid consequences which appear irrational or unjust: Legal Services Board v Gillespie-Jones (2013) 249 CLR 493 at [48]; Public Transport Commission (NSW) v J Murray-More (NSW) Pty Ltd (1975) 132 CLR 336 at 350. 332 Three further principles of statutory construction are relevant to the disposition of Westpac's cross-appeal. The first is that general words will be given their plain and ordinary meaning unless the context otherwise requires: Cody v JH Nelson Pty Ltd (1947) 74 CLR 629 at 647 per Dixon J. The second is that all words in a statutory provision are ordinarily to be given some meaning and effect: Commonwealth v Baume (1905) 2 CLR 405 at [414] per Griffith CJ, affirmed in Project Blue Sky Inc at [71]. The third, often referred to by the Latin phrase noscitur a sociis, is that a statutory provision should be read and construed as a whole and not as a series of isolated words. In Mersey Docks and Harbour Board v Henderson Bros (1888) 13 App Cas 595, Lord Halsbury stated (at 599-600): It certainly is not a satisfactory mode of arriving at the meaning of a compound phrase to severe it into its several parts and to construe it by the separate meaning of each of such parts when severed. 333 Westpac's submission that the words "recommendation" and "statement of opinion" should be construed in the context of the provision as a whole is correct. Those words appear within the definition of the expression "financial product advice", the provision of which is defined to be a financial service regulated by Chapter 7 of the Act. However, Westpac's further submission that the words "recommendation" and "statement of opinion" are to be construed in light of the fact that they are part of the definition of "financial product advice", and should be limited to recommendations or statements of opinion having the character of "advice", should not be accepted. Westpac seeks to add a qualification to the ordinary meaning of the words "recommendation" and "statement of opinion" by reference to the ordinary meaning of the word "advice", as being a recommendation or a statement of opinion that is worthy to be followed. However, Westpac's approach overlooks that the statutory provision provides the qualification to those words, as prescribed by Parliament, that give them the character of "advice". 334 Section 766B(1) states that the expression "financial product advice" means a recommendation or a statement of opinion (or a report of either of those things) that is intended to influence a person (or persons) in making a decision in relation to a particular financial product or could reasonably be regarded as being intended to have such an influence. The qualification that Westpac seeks to add to the words "recommendation" and "statement of opinion" (worthy to be followed) is provided by the statutory provision itself (intended to influence a person, or could reasonably be regarded as being intended to have such an influence). Reading the section as a whole, there is no reason to construe the words "recommendation" or "statement of opinion" as having the qualification suggested by Westpac. 335 As the primary judge observed (at [84]), the words "recommendation" and "statement of opinion" in s 766B(1) were given their ordinary meaning by Sackville AJA in ASIC v Park Trent Properties Group Pty Ltd (No 3) [2015] NSWSC 1527. While noting that dictionary definitions do not control the construction of a statutory provision, his Honour nevertheless observed (at [364]) that the dictionary definition of "recommendation" includes to commend by favourable representations and to represent or urge as advisable or expedient; and the dictionary definition of "opinion" includes a judgment or belief resting on grounds insufficient to produce certainty and the expression of a personal view, estimation or judgment. His Honour also observed (at [365]) that the construction of s 766B(1) must take into account that the language encompasses a recommendation or statement of opinion that is intended to influence a person in making a decision relating to a financial product or could reasonably be regarded as having such an influence. 336 It is important to note that the words "recommendation" and "opinion" have different meanings. The word "recommendation" means to commend or urge a particular course of action. The word "opinion" means the expression of a belief, view, estimation or judgment. A person may express an opinion without making a recommendation. For example, an opinion may be expressed that a particular financial product is expected to achieve a particular financial return in a future period. The expression of that opinion need not be accompanied by a recommendation to buy the financial product. However, the expression of that opinion will be financial product advice within the meaning of s 766B(1) if it is intended to influence a person in making a decision in relation to the financial product or could reasonably be regarded as being intended to have such an influence. Westpac's submission that an opinion within the meaning of s 766B(1) is confined to an opinion whether the recipient should make a decision relating to a financial product finds no support in the statutory text, context or purpose of the provision. Westpac's approach erroneously conflates the meaning of the words "recommendation" and "opinion". 337 Contrary to Westpac's submissions, construing the words "recommendation" and "opinion" in accordance with their ordinary meaning does not give rise to unworkable consequences. If the communication involves general advice and the communication is made by the holder of a financial services licence, obligations of honesty and fairness are imposed by s 912A(1)(a) and a general advice warning must be given in accordance with s 949A. If the communication involves personal advice, more extensive obligations are imposed. However, there is no reason to conclude that adopting the ordinary meaning of the words renders the legislative framework unworkable, unjust or irrational. 338 Underlying Westpac's submission that the primary judge's construction of s 766B(1) would give rise to unworkable consequences was the contention that her Honour's construction would mean that statements made in marketing and promotional material published by the issuer of a financial product would constitute financial product advice and be regulated by Chapter 7 of the Act, because such material is intended to influence members of the public to acquire the issuer's product. There are numerous difficulties with that submission. First, it is stated at a high level of generality, divorced from the circumstances of the present case. Second and relatedly, opinions are likely to differ on whether particular statements made by the issuer of a financial product, whether in a marketing context or otherwise, should be subject to regulation under Part 7 of the Act. As the Full Court of the Federal Court observed in Esso Australia Resources Limited v Commissioner of Taxation (Cth) (1998) 83 FCR 511, when different views can be held about whether the consequence of a particular interpretation is anomalous on the one hand or acceptable or understandable on the other, the Court should be particularly careful that arguments based on anomaly or incongruity are not allowed to obscure the real intention and choice of the Parliament (at 518-519 per Black CJ and Sundberg J and at 566 per Finkelstein J) (which statements were approved by a subsequent Full Court in ConnectEast Management Limited v Commissioner of Taxation (Cth) (2009) 175 FCR 110 at [41]). 339 In my view, marketing and promotional material relating to financial products does not necessarily, or even ordinarily, involve the making of recommendations, in the sense of commending or urging as advisable or expedient. Nor do such materials necessarily or ordinarily contain statements of opinion such as expected returns over a future period. However, if they do so, and the recommendation or statement of opinion is intended to influence a person in making a decision in relation to the financial product or could reasonably be regarded as being intended to have such an influence, I see nothing anomalous in the material being regulated under Chapter 7 of the Act. If, as will typically be the case, the marketing or promotional material constitutes general advice, the obligations under s 912A(1)(a) to act honestly and fairly, and the obligation under s 949A to give a general advice warning, will arise. As discussed below, the more stringent obligations associated with the giving of personal advice only arise in a much narrower set of circumstances.

[6]

Did the calls constitute financial product advice? 340 Turning to the facts as found by the primary judge, I respectfully agree with her Honour's conclusions that the calls conveyed statements of opinion that were intended by Westpac to influence customers to roll over their external superannuation account into their BT account. 341 There can be no doubt that statements to the effect summarised by her Honour at [366] were conveyed during the calls, either directly or indirectly through the social proofing technique that had the effect of adding the caller's affirmation to the customer's belief. Westpac's submission that the statements do not constitute "opinions" within the meaning of s 766B(1) cannot be accepted. The statements are opinions because they are judgments about the consequences of a potential course of action in relation to a financial product (rolling over superannuation into another account) which cannot be known for certain. For example, the statement that it would be beneficial for the customer to pay only one set of fees may or may not have been correct, depending on the fee structures of the superannuation accounts concerned. If the fees charged on the BT account were calculated as a percentage of the funds in the account and the fees charged on the customer's other account were calculated as a fixed amount per annum, the rollover of funds from the latter to the former may have resulted in the overall fees charged to the customer increasing. So too if a wider range of fees were charged on the BT account compared to the customer's other account. Likewise, the statement that by rolling over the external account the customer could get a better return may or may not have been correct, depending on the relative future returns of the superannuation accounts concerned. 342 While it may be accepted that the statements of opinion as found by the primary judge were general in nature, the evidence shows that the statements were intended by Westpac, through the callers, to influence the customers in relation to their superannuation. The QM Framework was a carefully designed campaign to increase the funds under management in the BT superannuation funds by encouraging existing BT fund members to roll over funds from other superannuation accounts into their BT account. 343 While I agree with the primary judge's conclusions that the calls conveyed statements of opinion, the question whether the calls contained a recommendation within the meaning of s 766B(1) is more difficult. 344 As noted above, the primary judge concluded that each of the calls (other than the call to customer 3) contained an implied recommendation that the customer should roll over their external superannuation account into their BT account. Her Honour did not identify any express recommendation made on the calls. Instead, her Honour found that the statements of opinion that were conveyed on the calls, when combined with other features of the calls, gave rise to an implicit recommendation to roll over the superannuation accounts. The primary features of the calls to which her Honour referred, separate to the statements of opinion, were (at [357]): (a) that the callers conveyed that they were ringing in order to help the customer, which was reinforced by the callers asking (in order to better help the customer) what the customer saw as the main benefits of consolidating their superannuation funds, and ultimately offering to help effect the consolidation of the customer's external superannuation accounts into the BT account; and (b) by affirming the customer's reasons to consolidate their superannuation funds through the social proofing language. 345 The concepts of recommendation and statement of opinion in s 766B(1) should not be conflated. Each of the words "recommendation" and "opinion" has a different meaning and should be given work to do within the section. It may be accepted that some statements might be both a recommendation and an opinion; for example, a statement that a particular financial product is the best product for the customer's circumstances. However, other statements of opinion are not recommendations; for example, a statement that consolidating superannuation accounts may save the customer fees. The statement is an opinion but, without more, is not a recommendation. The statement does not urge any particular course of action. There is a material difference between influencing a person in respect of a decision and urging the person to make a particular decision. 346 Characterising all statements of opinion that might influence a person in making a decision about a financial product as an implied recommendation would involve error. Such an approach renders the word "recommendation" in the section otiose. As discussed below in the context of s 766B(3), the distinction between recommendations and statements of opinion may have significance in determining whether financial product advice is general advice or personal advice. 347 The primary judge appreciated that not all statements of opinion intended to influence a person in relation to a decision are recommendations, within the meaning of s 766B(1). However, her Honour found that particular features of the calls in this case had the effect, when coupled with the statements of opinion, of implicitly recommending a course of action: that the customer consolidate their external superannuation accounts into their BT account. In my view, her Honour's finding is correct. The callers did not merely convey information, in the form of opinions about the potentially beneficial effects of consolidation. The call methodology that was implemented, under the QM Framework, had the effect of commending consolidation as advisable. This was brought about by the fourfold structure of the calls as summarised by the primary judge at [54] - [60]: (a) in the "open" phase, the callers initiated the call with a statement that they were ringing to help the customer; (b) in the "gather" phase, the callers asked the customer why the customer thought that consolidation of superannuation accounts may be beneficial; (c) in the "presenting" phase, the callers used the social proofing technique which affirmed the customer's thoughts about the beneficial consequences of consolidation as valid and reasonable, in order to conduct a persuasive presentation; and (d) in the "closing" phase, the callers sought to overcome any objections and directed the customers to taking action by offering to help with the consolidation. 348 The callers did not expressly recommend consolidation. As the primary judge found (at [46]), their induction training warned against making a recommendation. Nevertheless, I respectfully agree with the primary judge's conclusion that the calls conveyed an implicit recommendation to the customers to consolidate their external superannuation accounts into their BT account. 349 I would therefore dismiss ground 1 of Westpac's cross-appeal.

[8]

Primary judge's conclusion 350 Section 766B(3) and (4) provide as follows: (3) [Meaning of "personal advice"] For the purposes of this Chapter, personal advice is financial product advice that is given or directed to a person (including by electronic means) in circumstances where: (a) the provider of the advice has considered one or more of the person's objectives, financial situation and needs…; or (b) a reasonable person might expect the provider to have considered one or more of those matters. (4) [Meaning of "general advice"] For the purposes of this Chapter, general advice is financial product advice that is not personal advice. 351 Within the section, a person who provides financial product advice is referred to as the "provider". For convenience and clarity, I will refer to the person who receives the advice as the "recipient". The recipient may or may not be a customer or client of the provider. In the present case, the recipients of the calls were existing customers of Westpac because Westpac was the trustee of superannuation funds of the recipients. For that reason, the primary judge refers to the recipients of the calls as customers. However, when discussing the statutory language, I will use the neutral word "recipient" which does not pre-suppose an existing customer or client relationship with the provider of the advice. 352 The primary judge concluded that the financial product advice given by Westpac to its customers through the calls was not personal advice within the meaning of s 766B(3) because the advice was not given in circumstances where: (a) Westpac (through the callers) considered any of the customer's objectives, financial situation or needs (at [393]); or (b) a reasonable person might expect Westpac (through the callers) to have considered one or more of the customer's objectives, financial situation or needs (at [396]). 353 It followed from that conclusion that the financial product advice given by Westpac (through the callers) was general advice within the meaning of s 766B(4).

[10]

Westpac's contentions 356 By grounds 2 to 5 of its amended notice of contention, Westpac contends that, while the primary judge was correct to conclude that the calls did not involve the giving of personal advice, the primary judge erred in the construction of the phrases "in circumstances where", "one or more of the person's objectives, financial situation and needs" and "a reasonable person" within s 766B(3) of the Act. 357 In relation to the phrase "in circumstances where", Westpac contends that the primary judge erred in deciding that the phrase does not require a connection between the advice provided and the personal circumstances considered and that its function is only to direct attention broadly to the circumstances in which the advice is given (at [109]). Westpac submitted that the words require a connection between the consideration of the person's objectives, financial situation and needs and the advice that is given. 358 In relation to the phrase "one or more of the person's objectives, financial situation and needs", Westpac contends that the primary judge erred in deciding that the phrase contemplates one or more of the person's objectives, one or more aspects of the person's financial situation or one or more of the person's needs (at [112], [118]). Westpac submitted that the consequence of that construction is that consideration of a single, isolated aspect of a person's financial situation is sufficient to stamp advice with the character of personal advice if that aspect was considered by the provider of the advice. Westpac submitted that financial product advice is personal advice within the meaning of s 766B(3) only if the provider has considered (or a reasonable person might expect the provider to have considered) one or more of the categories of a person's objectives, financial situation and needs as a whole to the extent relevant to the advice being given. Westpac also contends that the primary judge should have found that the personal matters about each of Westpac's customers which were known to the callers did not constitute the customer's "objectives, financial situation and needs" within the meaning of s 766B(3) of the Act. 359 In relation to the phrase "a reasonable person", Westpac contends that the primary judge should have found that the phrase refers to a hypothetical person standing in the recipient's shoes with the recipient's knowledge of the circumstances in which the advice is given.

[12]

"in circumstances where" 361 The primary judge concluded (at [109]) that the phrase "in circumstances where" does not require a causative nexus or connection between the advice provided and the personal circumstances considered, or that the advice be provided on the basis of the particular personal circumstances of the person; rather, it directs attention broadly to the circumstances in which the financial product advice was given. I respectfully agree with that conclusion, although I would not use the word "broadly". 362 The phrase "in circumstances where" has a straightforward meaning within the section - for financial product advice to be personal advice, it must be given in one of two alternative circumstances. The first circumstance, in paragraph (a), is where the provider has considered one or more of the recipient's objectives, financial situation and needs. As discussed below, "considered" means had regard to or taken into account. The section does not require that the advice be based on the recipient's objectives, financial situation and needs: the section only requires that the provider has had regard to those matters in giving the advice. It may be accepted that there is a temporal requirement associated with the consideration of the recipient's objectives, financial situation and needs: the use of the present perfect tense (had considered) conveys that the consideration occurred at an indefinite time in the past, preceding the giving of the advice, although that time might continue up until the giving of the advice. 363 The second circumstance is where a reasonable person might expect the provider to have considered the recipient's objectives, financial situation and needs. The expectation is to be assessed as at the time the advice is given. The matter to be expected is that the provider has considered the recipient's objectives, financial situation and needs. Again, the use of the perfect infinitive tense (to have considered) conveys that the expectation is that the consideration would have occurred at an indefinite time in the past, although that time might continue up until the giving of the advice. 364 Contrary to Westpac's submission, the phrase "in circumstances where" does not require a causal nexus between the advice provided and the personal circumstances considered in the sense that the advice must be based on or reflect the personal circumstances considered. The definition is satisfied if the provider has considered the recipient's personal circumstances in giving the advice, but the advice disregards those circumstances (in other words, the advice is not appropriate having regard to those circumstances). All the section requires is that the provider of the advice has considered the recipient's personal circumstances in giving the advice or a reasonable person might expect the provider to have considered those circumstances in giving the advice.

[13]

"one or more of the person's objectives, financial situation and needs" 365 With respect to the phrase "the person's objectives, financial situation and needs", neither party challenged the primary judge's reference to the ordinary meaning of those words (at [111]): (a) an objective is an end towards which efforts are directed; (b) a situation is a state of affairs or combination of circumstances; and (c) a need is a case or instance in which some necessity or want exists. 366 The primary judge accepted ASIC's submission that the phrase "one or more of the person's objectives, financial situation and needs" means one or more of a person's objectives, one or more aspects of the person's financial situation or one or more of the person's needs (at [112], [118]). Her Honour concluded that the phrase "the person's objectives, financial situation and needs" refers to the multiplicity of objectives, financial situations and needs of a client that may be relevant to financial product advice provided to the client (at [119]). The primary judge also considered that the concepts of "objectives", "financial situation" and "needs" are not mutually exclusive and may contain significant overlap. Her Honour gave the example of a customer with a dependent disabled child who may characterise the goal of accumulating sufficient wealth to provide for that child as both an objective and a need, and the dependence of the child on the customer may form part of the customer's "financial situation" (at [120]). 367 Respectfully, I agree with the effect of the primary judge's construction of the phrase "one or more of the person's objectives, financial situation and needs", but would express my views differently. I agree with Westpac's submission that the phrase means one or more of the categories of a person's objectives, financial situation and needs, but I disagree that the phrase means one or more of those categories as a whole to the extent relevant to the advice being given. Westpac's construction adds an unnecessary gloss to those words. 368 First, starting with the meaning of each of the three expressions "objectives", "financial situation" and "needs", I disagree that the expressions have overlapping meanings, although I agree that a person's objectives, financial situation and needs may often be related. In my view, each of the expressions has a distinct meaning. As set out above, the ordinary meaning of the word "need" is a necessity or want. A person's necessity or want exists independently of the person's financial situation. Taking her Honour's illustration, the necessity or want is to obtain medical care for the disabled child. A person's financial situation may or may not enable them to obtain that medical care. An objective, being a goal or end toward which efforts are directed, is also distinct from a need. Again using her Honour's illustration of a disabled child, the objective may be to obtain sufficient funds to meet the cost of medical care required. 369 Second, both the grammatical form of the phrase "one or more of the person's objectives, financial situation and needs" and the extrinsic materials support the conclusion that the words "one or more" refer to the three matters that follow, being objectives, financial situation and needs, such that the section requires that the provider has considered the recipient's objectives, or their financial situation or their needs or more than one of them. As to grammar, the use of the words "one or more" in reference to a list of items ordinarily conveys the meaning of one or more of the items on the list. That ordinary grammatical meaning is supported by the extrinsic materials. The legislative history of s 766B(3) shows that the words "one or more" were added to s 766B(3) to make it clear that the provision was not limited to circumstances where a provider of advice had considered each of a person's objectives, financial situation and needs, and had only considered one of the three. This is made clear from the Supplementary Explanatory Memorandum to the Financial Services Reform Bill 2011 (Cth) which stated: [3.20] As currently drafted, proposed sub-section 766B(3) defines personal advice as financial product advice that is given or directed to a person in circumstances where the provider has considered the "objectives, financial situation and needs" of the person (or where a reasonable person might expect the provider to have considered these matters). [3.21] Item 19 amends proposed sub-section 766B(3) to define personal advice as advice given or directed to a person where the provider has considered one or more of the person's objectives, financial situation and needs (or where a reasonable person might expect the provider to have considered one or more of these matters). [3.22] The purpose of this proposed amendment is to ensure that a financial services provider will be subject to the requirements of proposed Divisions 3 or 5 of Part 7.7 (including the requirement to provide a SOA) when advising a retail client that a particular financial product (or class of financial products) is appropriate to them as an individual. [3.23] As sub-section 766B(3) is currently drafted, a financial services provider could recommend a financial product or class of financial product as being appropriate to a retail client's individual needs and objectives, but avoid the requirements of proposed Divisions 3 or 5 of Part 7.7 because they had not considered the client's financial situation. 370 Third, in my view there is no warrant in the statutory language for the gloss sought to be added by Westpac that the phrase means one or more of those categories as a whole to the extent relevant to the advice being given. The qualification "as a whole" is not implicit in the statutory language and the addition of that qualification has the potential to undermine the consumer protection purposes of the legislation. The effect of the qualification is that advice will not be personal advice and the provider of the advice can avoid the consumer protection obligations associated with giving personal advice if the provider can show that he or she did not have regard to the whole of the recipient's objectives, financial situation or needs, but only had regard to part of them. Such an outcome is inconsistent with the implicit obligations imposed by s 961B. As discussed further below, s 961B(1) requires that a person who provides personal advice to a retail client must act in the best interests of the client. Section 961B(2) states that a provider will satisfy the obligation in subsection (1) if, among other things, he or she made reasonable enquiries of the client to obtain complete and accurate information relating to the client's objectives, financial situation and needs where it was reasonably apparent that the information known to the provider was incomplete or inaccurate. On Westpac's construction, if the provider did not have complete information about one or more of the client's objectives, financial situation or needs, any advice given would not be personal advice and the obligation under s 961B would never arise. Such a construction would defeat the very purpose of s 961B. 371 For those reasons, in my view paragraph (a) of s 766B(3) requires only that the provider has considered to some extent one or more of the recipient's objectives, financial situation or needs; the paragraph does not require that the provider has considered any of them "as a whole". Paragraph (b) has a corresponding meaning. 372 Whether the provider has considered matters that can be regarded as a person's objectives, financial situation or needs is a fact specific enquiry. I respectfully agree with the primary judge's observation (at [121]) that a person's objectives, financial situation and needs does not include aims that might be characterised as universal or generic, such as the aim of having one's superannuation arranged in a way that is more easily managed. In the context of Chapter 7 of the Act, the phrase "the person's objectives, financial situation and needs" is directed to an individual's personal circumstances. That is implicit from the significant obligations that arise in connection with the giving of personal advice, including the obligation to give a statement of advice under s 946A and the obligation to act in the best interests of the client under s 961B. In my view, the detailed requirements associated with those obligations would be unnecessary and nonsensical if the only matters considered, or which might be expected to be considered, were universal or generic and not personal.

[14]

"considered" 373 As the primary judge observed (at [123]), the ordinary dictionary meaning of the word "considered" includes to make allowance for, to pay attention to, to have regard to or to view attentively or scrutinise. In my view, there is no need to travel beyond the ordinary meaning of the word. Read in context, the definition of personal advice in s 766B(3) means financial product advice that is given to a person in circumstances where the provider of the advice has taken into account or given attention to one or more of the person's objectives, financial situation and needs or in circumstances where a reasonable person might expect the provider of the advice to have done so. No greater explication of the word "considered" is required. 374 ASIC contends that the primary judge erred in concluding (at [127]) that: …the word "considered" refers to an active process of evaluating or reflecting upon the subject matter of the consideration, appropriate to the provision of "financial product advice". It does not require a process that is "detailed, extensive or careful", however, it does involve an intellectual engagement with the subject matter of the consideration. 375 With respect, I agree that her Honour's conclusion on the meaning of the word "considered" in s 766B(3) involves some narrowing of the ordinary meaning of the word, and introduces phrases which are not within the statute and which have uncertain meaning. The phrase "intellectual engagement" is unobjectionable if all it conveys is that the mind of the provider of the advice was engaged with one or more of the person's objectives, financial situation and needs. Such an engagement is implicit in the ordinary meaning of the word "considered". However, the phrase "active process of evaluating" refers to a particular standard or level of consideration that is not mandated by the statutory language. The further requirement that the evaluation or reflection upon the person's objectives, financial situation and needs "be appropriate to the provision of the financial property advice" adds a further requirement that is not within the statutory language.

[15]

"reasonable person" 376 The primary judge recorded and responded to Westpac's submission with respect to the meaning of the words "a reasonable person" as follows (at [134] and [135]): Westpac contended that the reasonable person's knowledge of the objective circumstances in which advice is given could not extend to matters extraneous to the interactions between the provider of the advice and the customer and which are not known to the customer at all. Thus, it contended that the reasonable person is a hypothetical person standing in the actual customer's shoes. This submission is directed to the identified relevant "circumstances" in s 766B(3). I do not accept that the relevant circumstances are only those that could have been known by a reasonable person. In my view, s 766B(3) directs attention to all of the relevant circumstances in which the financial product advice is given. Section 766B(3)(b) requires an assessment of what a reasonable person would expect in those circumstances. 377 In so far as the primary judge concluded that the expression "a reasonable person" extends beyond a hypothetical reasonable person standing in the recipient's shoes, and extends (as ASIC submitted) to an ordinary member of the community, I respectfully disagree with her Honour. In my view, reading s 766B(3) as a whole, the expression "a reasonable person" contemplates a hypothetical reasonable person standing in the recipient's shoes. 378 The function of the section is to define the circumstances in which financial product advice that is given or directed to a person is to be characterised as personal advice for the purposes of Chapter 7, thereby triggering enhanced obligations on the provider of the advice. The section describes two circumstances. The first circumstance, in paragraph (a), is where the provider of the advice has considered one or more of the recipient's objectives, financial situation and needs. The second circumstance, in paragraph (b), is where the provider of the advice has not considered one or more of the recipient's objectives, financial situation and needs, but where a reasonable person might expect the provider to have considered one or more of those matters. In my view, the use of the words "reasonable person" in paragraph (b) is a reference to a reasonable recipient of the advice. It is not a hypothetical person uninvolved in the receipt of the advice. 379 In the chapeau to the provision, the word "person" is used to refer to the recipient of the advice. In paragraph (a), the word person is used in the same sense. In paragraph (b), the word person has been qualified by the word "reasonable", which suggests a reasonable recipient of the advice. That meaning is confirmed by the use of the phrase "one or more of those matters" in paragraph (b). That phrase incorporates by reference the phrase "one or more of the person's objectives, financial situation and needs" in paragraph (a). Understood in that way, the circumstance described by paragraph (b) is where a reasonable person might expect the provider to have considered one or more of the person's objectives, financial situation and needs. In my view, the words used aptly describe a circumstance where a reasonable person, standing in the shoes of the recipient, might expect the provider to have considered one or more of the person's objectives, financial situation and needs. That interpretation of paragraph (b) is harmonious with paragraph (a). In contrast, there is no sound basis for concluding that the circumstance in paragraph (b) refers to the expectation of a reasonable bystander to the giving of the financial product advice. 380 It follows that the expectations of the reasonable person in paragraph (b) (being a reasonable person standing in the shoes of the recipient of the advice) will be informed by the interactions between the provider and the recipient. However, the expectations will not be limited to those matters. The expectations of a reasonable person standing in the shoes of the recipient of the advice will also be informed by other facts that are likely to be known by such a person, but which did not form part of the express interactions between the provider and the recipient.

[16]

Did Westpac consider one or more of the recipient's objectives, financial situation and needs (paragraph (a) of s 766B(3))? 381 I agree with the primary judge that, during the calls, the customers conveyed various of their personal objectives within the meaning of paragraph 766B(3)(a). Those objectives were identified by the primary judge (at [382]) in respect of individual customers, but generally fell into the following four categories: (a) to maximise the performance (in terms of financial return) of the customer's overall superannuation; (b) to minimise the fees payable in respect of the customer's overall superannuation; (c) to ensure that the insurance coverage for the customer is appropriate for the customer's circumstances or is maintained at a particular level; and (d) to organise the customer's overall superannuation in a manner that is appropriate to the fact the customer was retiring. 382 Although each of the above aims is stated at a level of generality, in my view they are encompassed by the concept of "objectives" within the statutory provision. They are matters that are apt to be considered in providing financial product advice that is in the best interests of the customer. 383 I have some reservations about the primary judge's conclusion (at [376]) that the fact that the customers had multiple superannuation accounts was a "financial situation" within the meaning of the statutory provision. It is difficult to see that the fact that a person has two assets of a particular kind, here two superannuation accounts, conveys anything meaningful about the person's financial situation. By analogy, a statement that a person has two bank accounts can hardly be regarded as conveying any information about the person's financial situation. Both accounts may have very little money in them, or both may have substantial amounts of money in them. The information is at too high a level of generality to answer the description of "financial situation". 384 In any event, I agree with the primary judge's conclusion (at [393]) that the evidence shows that the callers did not consider any of the customers' objectives, financial situation and needs. I agree with the primary judge that the mere fact that the callers listened to the customer does not compel a conclusion that the caller considered the information conveyed by the customer. The evidence shows that the callers did not intend to take into account, or have regard to, the customers' objectives, financial situation and needs; the caller conveyed a similar message regardless of the customers' objectives, financial situation and needs. As the primary judge found (at [387]): Accepting that each of the 15 calls was conducted in accordance with the QM Framework, I do not infer from that fact that the callers "considered" any "objective" or "financial situation" that was identified by a customer during the course of the call. To the contrary, the QM Framework did not require or engage consideration of those matters. To the extent that such information is elicited, the QM Framework encouraged the callers to use it to "drive an outcome", as ASIC put it. That outcome was the customer's rollover of their external superannuation accounts into their BT account. 385 I would therefore dismiss ground 2 of ASIC's notice of appeal.

[17]

Might a reasonable recipient of the advice have expected Westpac to have considered one or more of the recipient's objectives, financial situation and needs (paragraph (b) of s 766B(3))? 386 The primary judge also reached the conclusion that the circumstances referred to in paragraph (b) of s 766B(3) were not satisfied: that a reasonable person would not expect the provider of the advice to have considered one or more of the person's objectives, financial situation and needs (at [398]). In reaching that conclusion, her Honour took into account a range of circumstances, some of which pointed towards the circumstance described in paragraph (b) and some of which pointed away from that circumstance. 387 While recognising the advantage enjoyed by the primary judge in considering the totality of the evidence, with respect I am unable to agree with her Honour's conclusion. In my view, the content of the calls, in the circumstances in which they were made, would have led a reasonable person standing in the shoes of the recipients of the advice to expect the provider to have considered one or more of the recipient's objectives, financial situation and needs. I consider that the following circumstances are relevant to the assessment required by paragraph (b). 388 First, the advice concerned superannuation and, specifically, the consequences of consolidating multiple superannuation accounts. For most customers, that is a very significant financial decision. The decision necessarily affects the future financial return on the customer's overall superannuation, including through the payment of fees and the availability and content of insurance, particularly life insurance. It can be accepted that, for persons with very little superannuation, the decision may have little financial significance. However, abstracted to the position of a hypothetical reasonable recipient of the advice in the circumstances of this case, I consider it to be a factor that points in favour of the circumstance described in paragraph (b). 389 Second, the calls were made, and the advice was given, on behalf of Westpac and the recipients were customers of Westpac (in the sense that they held superannuation accounts with Westpac). Thus, there was an existing customer relationship. In my view, that factor also points towards the circumstances described in paragraph (b). The calls were not "cold calls"; the calls emanated from an existing customer relationship. Indeed, the callers identified themselves by reference to that relationship at the beginning of the call. In my view, that fact points towards the circumstance described in paragraph (b). 390 Third, the effect of the first two factors is cumulative. An individual that has invested superannuation with an institution would reasonably expect that institution to act for their benefit and in their interests in relation to their superannuation affairs. Such an expectation arises from the nature of the product, which is held by a financial institution on trust for the superannuation member. In my view, the combined facts that a financial institution calls and gives advice to an individual who is a member of a superannuation fund held or managed by that institution about rolling over superannuation points towards the circumstance described in paragraph (b). 391 Fourth, during the course of the calls, the callers asked the recipients about the considerations that were relevant to them in deciding whether to consolidate their superannuation accounts. Asking that question would ordinarily create the impression in the mind of the reasonable person receiving the call that the caller sought that information because it was relevant to the matters being discussed. In most of the calls, the questions were preceded by a statement to the effect that the caller was asking the question so as to be able to better help the recipient of the call. The social proofing language would ordinarily reinforce the impression in the mind of the reasonable person receiving the call that the caller was taking account of the answers given by the recipient. The social proofing language conveyed that the answer given by the recipient was valid or reasonable. In that way, the caller affirmed the answer given. In my view, those facts also pointed towards the circumstance described in paragraph (b). 392 The fifth factor is that each of the calls conveyed an implicit recommendation for the customer to act. A different expectation in the mind of the hypothetical reasonable recipient of advice may arise depending upon whether the advice conveys a recommendation or merely conveys a statement of opinion. In my view, such a person is less likely to expect the provider of the advice to have considered one or more of the person's personal circumstances if the advice is merely a statement of opinion; for example, the expected return of a financial product in a future period. Although the opinion might be conveyed with the intention to influence a person to acquire the product, without more the statement of opinion may not cause a reasonable recipient of the advice to expect the provider of the advice to have considered one or more of the recipient's personal circumstances. Conversely, if the advice conveys a recommendation, the expectation referred to in paragraph (b) is more likely to arise. If the provider of the advice urges the recipient to follow a particular course of action, there is a greater likelihood that a hypothetical reasonable recipient of the advice might expect the provider of the advice to have considered the recipient's personal circumstances. 393 Sixth, it is relevant that the callers gave a general advice warning. By that warning, the callers expressly stated that they were not taking into account the recipient's personal circumstances. This is an important factor that points away from the circumstance described in paragraph (b). However, the force of this factor in any given case will depend upon the manner in which the general advice warning is given in the course of the advice. In the present case, it was given at the outset of the call. There is nothing inappropriate in doing so. But by giving the warning at the outset of the call and not reinforcing the warning at any other point in the call, the caller runs the risk that a hypothetical reasonable recipient of the advice will lose sight of the warning in the course of the call. 394 Seventh, it is relevant that the advice was provided free of charge. This is a factor that points away from the circumstance described in paragraph (b). All other things being equal, a hypothetical reasonable recipient of the advice is less likely to expect the provider of the advice to have considered their personal circumstances if there is no fee or charge for the advice. 395 Eighth, it is relevant that in some cases the callers revealed a lack of knowledge about the customer's personal circumstances. That is a factor that points away from the circumstance described in paragraph (b). It would suggest to a hypothetical reasonable recipient of the advice that the caller is not aware of the recipient's personal circumstances, and therefore the reasonable recipient would not expect the provider of the advice to have considered those circumstances. 396 On balance, and having regard to all of the factors referred to above, in my view paragraph (b) of s 766(3) is satisfied in this case. The combination of those factors leads to the conclusion that a hypothetical reasonable recipient of the advice might expect the provider of the advice to have considered one or more of the recipient's objectives, financial situation and needs. Put simply, in my view the first five factors outweigh the final three factors. The decision concerned an important financial asset of each customer; the callers were known to the customers in the sense that the calls were made on behalf of one of the customer's superannuation funds; the callers offered to help the customers and asked the customers about matters that were important to them; the callers affirmed the answers given by the customers as being valid or reasonable objectives; the callers implicitly recommended that the customers consolidate their external superannuation accounts into their BT account. Notwithstanding the general advice warning that was given at the outset of the call; notwithstanding no fees were charged for the offer of help; and notwithstanding that it was apparent that the callers did not have information about the customer's external superannuation accounts, in my view a reasonable person standing in the shoes of the customers might expect the callers to have considered one or more of the person's objectives, financial situation and needs. 397 There is nothing strained about that conclusion. It is consistent with and gives effect to the objects of Chapter 7 of the Act, particularly the object to promote confident and informed decision making by consumers of financial services and fairness, honesty and professionalism by those who provide financial services. Those objects are promoted by ensuring that, if personal financial product advice is given to a person, the consumer protections in Part 7.7 (the requirements for a statement of advice) and Part 7.7A (the requirement to act in the best interests of the client) apply. Those obligations attach to the provision of personal financial product advice because the recipients of such advice are likely to rely and act upon the advice. 398 By its conduct, Westpac engendered a circumstance in which it conveyed an implicit recommendation to its customers to consolidate their external superannuation accounts into their BT account, and engendered a circumstance in which customers might rely and act on that recommendation because they might expect Westpac to have considered one or more of their personal circumstances in making that recommendation. As discussed further below, in my view Westpac's conduct undermined informed decision making by its customers and was not consistent with the promotion of fairness, honesty and professionalism by a provider of financial services. 399 I would therefore uphold ground 3 of ASIC's notice of appeal.

[21]

Meaning of s 961B 404 The nature of the obligation in s 961B(1) was considered by Moshinsky J in ASIC v NSG Services Pty Ltd (2017) 122 ACSR 47; 35 ACLC 17-005. His Honour considered whether s 961B is concerned with the process or procedure involved in providing advice, or whether it is concerned with the content or substance of that advice. Without expressing a concluded view, his Honour considered that the statutory context, including the language of s 961G, the legislative history and the relevant extrinsic materials supported the view that s 961B is concerned with the process or procedure involved in providing advice (at [21]). 405 In my view, textual and contextual considerations compel a conclusion that s 961B is not concerned with the question whether the substance of the advice is in the best interests of the client and, if it was necessary to refer to it, the relevant extrinsic materials confirm that conclusion. Rather, the section is concerned with the actions taken by the provider in the formulation of the advice and the objective purpose of the provider in taking those actions and giving the advice. The following textual and contextual matters can be noted. 406 First, s 961B(1) states that the provider must act in the best interests of the client in relation to the advice; the section does not state that the advice must be in the best interests of the client. The section is directed to how the provider must "act" in relation to the advice and stipulates that the provider must act in the best interests of the client. 407 Second, s 961B(2) states the provider satisfies the duty in subsection (1) if the provider proves that he or she has done each of the following: (a) identified the objectives, financial situation and needs of the client that were disclosed to the provider by the client through instructions; (b) identified: (i) the subject matter of the advice that has been sought by the client (whether explicitly or implicitly); and (ii) the objectives, financial situation and needs of the client that would reasonably be considered as relevant to advice sought on that subject matter (the client's relevant circumstances), (c) where it was reasonably apparent that information relating to the client's relevant circumstances was incomplete or inaccurate, made reasonable enquiries to obtain complete and accurate information; (d) assessed whether the provider has the expertise required to provide the client advice on the subject matter sought and, if not, declined to provide the advice; (e) if, in considering the subject matter of the advice sought, it would be reasonable to consider recommending a financial product: (i) conducted a reasonable investigation into the financial products that might achieve those of the objectives and meet those of the needs of the client that would reasonably be considered as relevant to advice on that subject matter; and (ii) assessed the information gathered in the investigation; (f) based all judgments in advising the client on the client's relevant circumstances; and (g) taken any other step that, at the time the advice was provided, would reasonably be regarded as being in the best interests of the client, given the client's relevant circumstances. 408 Consistently with the use of the word "act" in subsection (1), subsection (2) focuses on what the provider has "done". It describes actions to be taken by the provider; it does not refer to the substance of the advice given. All of the actions are directed to the pursuit of the best interests of the client and describe diligent efforts directed to that pursuit through the identification of the client's objectives, financial situation and needs; by basing judgments on those matters; and by declining to advise if the provider does not have the requisite expertise to advise. Subsection (2) states that a provider satisfies the duty in subsection (1) if the provider does the things stipulated in subsection (2). It is implicit in that language that the legislature considered that the obligation imposed by subsection (1) requires the types of actions referred to in subsection (2). 409 To the extent it is necessary to have regard to it, the Replacement Explanatory Memorandum to the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011 (Cth) affirms that conclusion. Paragraph 1.23 states: …the requirement to act in a client's best interest is intended to be about the process of providing advice, reflecting the notion that good processes will improve the quality of the advice that is provided. The provision is not about justifying the quality of the advice by retrospective testing against financial outcomes. 410 For those reasons, Westpac's submissions directed to the content of the advice must be rejected.

[25]

The parties' contentions 416 By grounds 2 and 3 of its cross-appeal, Westpac contends that the primary judge erred in finding that Westpac failed to do all things necessary to ensure that the financial services covered by their financial services licenses were provided "efficiently, honestly and fairly" in contravention of s 912A(1)(a) of the Act. Westpac advanced three submissions in support of that contention. 417 First, Westpac submitted that it did not provide financial product advice on the calls and therefore did not provide a financial service during the calls, which rendered s 912A(l)(a) inapplicable. For the reasons given earlier, I reject that submission. 418 Second, Westpac submitted the findings made by the primary judge with respect to s 912A(1)(a) were outside ASIC's pleaded case. Westpac submitted that ASIC's allegation of a contravention of s 912A(1)(a) was premised on the allegation that, through the calls, Westpac provided personal advice to customers. As the primary judge found that Westpac had not provided personal advice, Westpac submitted that it was not open, as a matter of procedural fairness, for her Honour to find that Westpac had contravened s 912A(1)(a). I accept that submission for the reasons explained by Allsop CJ. However, as I have reached a different conclusion to the primary judge on the issue of personal advice, the finding of contravention of s 912A(1)(a) remains open on ASIC's pleaded case. 419 Third, Westpac submitted that the matters identified by the primary judge do not establish conduct to the required level of seriousness to establish a contravention of s 912A(1)(a), being conduct capable of resulting in a conclusion of an absence of competence and lack of "sound ethical values and judgment" of the kind referred to in ASIC v Camelot Derivatives Pty Ltd (in liq) (2012) 88 ACSR 206 (ASIC v Camelot) at [69(b)] or "serious departures from reasonable standards of performance of advice" of the kind referred to in ASIC v Cassimatis (No 8) (2016) 336 ALR 209 at [673]. 420 By its notice of contention, ASIC contends that the primary judge should have found that, by the QM Framework, Westpac adopted and implemented an approach to calls with customers in the campaign which was liable to lead to staff providing personal advice to a customer to roll over their superannuation into an account with Westpac: (a) despite Westpac only being authorised to provide general advice; and (b) without acting in the best interests of the customer in relation to the advice, and Westpac thereby contravened s 912A(1)(a) of the Act.

[26]

Did Westpac contravene s 912A(1)(a)? 421 In my view, Westpac contravened s 912A(1)(a) of the Act by adopting and implementing a campaign, which included a telephone campaign, which was liable to lead to callers giving personal advice to customers containing an implicit recommendation to consolidate their superannuation into an account with Westpac in disregard of their best interests. Put simply, the campaign was inherently likely to result in financial advice being given to customers in a manner that was unfair to those customers, contrary to the requirement in s 912A(1)(a). 422 The primary judge traced the legislative history of the words "efficiently, honestly and fairly" now found in s 912A(1)(a) of the Act. As her Honour observed, the phrase appears to have its origin in the former s 60 of the Securities Industry Code of each of the States which provided that a dealer's licence might be revoked if the National Companies and Securities Commission (a predecessor body to ASIC) was satisfied that the dealer did not perform the duties of a holder of such a licence efficiently, honestly or fairly. The phrase was considered by Young J in Story v National Companies and Securities Commission (1988) 13 NSWLR 661 (Story) at 672. His Honour concluded that: …the group of words "efficiently, honestly and fairly" must be read as a compendious indication meaning a person who goes about their duties efficiently having regard to the dictates of honesty and fairness, honestly having regard to the dictates of efficiency and fairness, and fairly having regard to the dictates of efficiency and honesty. 423 As the primary judge observed, that approach to the interpretation of the words has been followed in numerous cases, including by Foster J in ASIC v Camelot at [69]-[70] and by Beach J in ASIC v Avestra Asset Management Limited (In Liq) (2017) 348 ALR 525 at [191]. 424 Although not the subject of argument on this appeal, I have considerable reservations about the view that the words "efficiently, honestly and fairly" as used in s 912A(1)(a) of the Act should be read compendiously in the manner suggested by Young J in Story. His Honour gave two reasons for interpreting the phrase in that manner. The first is that it is impossible to carry out all three tasks concurrently. His Honour explained that conclusion by reference to the following example (at 672): To illustrate, a police officer may very well be most efficient in control of crime if he just shot every suspected criminal on site. It would save a lot of time in arresting, preparing for trial, trying and convicting the offender. However, that would hardly be fair. Likewise, a judge could get through his list most efficiently by finding for the plaintiff or the defendant as a matter of course, or declining to listen to counsel, but again that would hardly be the most fair way to proceed. 425 The second is the use of the conjunction "and" rather than the disjunctive "or" in the phrase "efficiently, honestly and fairly". 426 With respect, it is not apparent that either reason provides a sound basis for reading the phrase, as it appears in s 912A(1)(a) of the Act, compendiously in the manner suggested by his Honour. In particular, it is not apparent why a licensee cannot comply with each of the three obligations, efficiently, honestly and fairly, applying the ordinary meaning of each word. One of the meanings of the word "efficiently", and the meaning well adapted to the statutory provision, is competent, capable and having and using the requisite knowledge, skill and industry: cf ASIC v Camelot at [69(c)]. The word "honestly" includes dishonesty in the criminal sense but may also comprehend conduct which is not criminal but which is morally wrong in the commercial sense: R J Elrington Nominees Pty Ltd v Corporate Affairs Commission (SA) (1989) 1 ACSR 93 at 110. The word "fair" as used in s 912A(1)(a) has not received detailed judicial consideration. However, it seems to me that there is no reason why it cannot carry its ordinary meaning which includes an absence of injustice, even-handedness and reasonableness. As is the case with legislative requirements of a similar kind, such as provisions addressing unfair contract terms, the characterisation of conduct as unfair is evaluative and must be done with close attention to the applicable statutory provision: cf Paciocco v Australia and New Zealand Banking Group Ltd (2015) 236 FCR 199 at [364]. It seems to me that the concepts of efficiently, honestly and fairly are not inherently in conflict with each other and that the ordinary meaning of the words used in s 912A(1)(a) is to impose three concurrent obligations on the financial services licensee: to ensure that the financial services are provided efficiently, and are provided honestly, and are provided fairly. 427 In the present case, the significant aspect of s 912A(1)(a) is the requirement to ensure that the financial services covered by the licence are provided fairly. Fairness must be assessed having regard to all relevant circumstances bearing upon the provision of the financial services in question. In my view, the facts found by the primary judge compel a conclusion that Westpac did not do all things necessary to ensure that the financial product advice given by it through the calls was provided fairly. There was an asymmetry in the knowledge held by Westpac and that held by the customer in relation to the subject of the advice, and Westpac took unfair advantage of that asymmetry. The asymmetry of knowledge arose from the facts that: Westpac knew that the decision by a customer whether to consolidate the customer's other superannuation funds into a Westpac fund was an important decision for the customer, with potentially significant implications for the customer's future financial position; Westpac also knew that the decision involved a range of considerations, including particularly the relative performance of the superannuation funds and the relative structure of the fees charged in the funds; and Westpac knew that a prudent customer would weigh up those matters. Westpac took unfair advantage of that asymmetry by implementing a carefully crafted telephone campaign, reinforcing in the minds of its customers an erroneous assumption that the decision to consolidate their superannuation into a Westpac fund was straightforward and was likely to generate benefits for the customer by saving fees and by reducing the burden of managing superannuation. The telephone campaign was directed to persons with whom Westpac had an existing relationship and in a real sense occupied a position of trust with respect to the customer's superannuation fund. Despite knowing that the decision was not straightforward, Westpac did not advise its customers about the matters that they should consider before deciding to consolidate their superannuation. Nor did Westpac even suggest to its customers that they reflect on the decision or seek advice about the decision. Through the campaign, Westpac pursued its own self-interest and disregarded the best interests of its customers. That conduct can rightly be described as unfair and involved a contravention of s 912A(1)(a) of the Act. 428 I would therefore dismiss grounds 2 and 3 of Westpac's cross-appeal, and uphold ASIC's notice of contention.

Parties

Applicant/Plaintiff:

Australian Securities and Investment Commission

Respondent/Defendant:

Westpac Securities Administration Limited

Legislation Cited (3)

Financial Services Reform Act 2001(Cth)

Corporations Act 2001(Cth)

Superannuation Industry (Supervision) Act 1993(Cth)

Cases Cited (39)

Australian Securities and Investments Commission v Financial Circle Pty Ltd [2018] FCA 1644; (2018) 131 ACSR 484 Australian Securities and Investments Commission v NSG Services Pty Ltd [2017] FCA 345; 122 ACSR 47 Australian Securities and Investments Commission v Park Trent Properties Group Pty Ltd (No 3) [2015] NSWSC 1527 Cody v JH Nelson Pty Ltd [1947] HCA 17; 74 CLR 629 Commissioner of Taxation (Cth) v Consolidated Media Holdings Limited [2012] HCA 55; 250 CLR 503 ConnectEast Management Limited v Commissioner of Taxation (Cth) [2009] FCAFC 22; 175 FCR 110 Commonwealth v Baume [1905] HCA 11; 2 CLR 405 Daly v Sydney Stock Exchange Ltd [1986] HCA 25; 160 CLR 371 Esso Australia Resources Limited v Commissioner of Taxation (Cth) [1998] FCA 1655; 83 FCR 511 Esso Australia Resources Pty Ltd v Commissioner of Taxation [2011] FCAFC 154; 199 FCR 226 Independent Commission Against Corruption v Cunneen [2015] HCA 14; 256 CLR 1 Legal Services Board v Gillespie-Jones [2013] HCA 35; 249 CLR 493 Mersey Docks and Harbour Board v Henderson Bros (1888) 13 App Cas 595 Paciocco v Australia and New Zealand Banking Group Ltd [2015] FCAFC 50; 236 FCR 199 Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 Public Transport Commission (NSW) v J Murray-More (NSW) Pty Ltd [1975] HCA 28; 132 CLR 336 R J Elrington Nominees Pty Ltd v Corporate Affairs Commission (SA) [1989] SASC 1941; 1 ACSR 93 Rennie Golledge Pty Ltd v Ballard [2012] NSWCA 376; 82 NSWLR 231 Story v National Companies and Securities Commission (1988) 13 NSWLR 661 The Owners of The Ship "Shin Kobe Maru" v Empire Shipping Co Inc [1994] HCA 54; 181 CLR 404

s 766B(1) - "recommendation or a statement of opinion" 16 The primary judge, correctly in my view, at [83]-[93] of the reasons, considered it appropriate to give a broad interpretation to "recommendation" and "statement of opinion", as words used in a provision intended to be, to a significant degree, protective. In particular, I agree with the approach of Sackville AJA in ASIC v Park Trent Properties Group Pty Ltd (No 3) [2015] NSWSC 1527 at [365]-[366], referred to by the primary judge at [85]: 365 The construction of s 766B(1) must take into account that the language encompasses a recommendation or statement of opinion that is intended to influence a person in making a decision relating to a financial product or could reasonably be regarded as having such an influence. A person wishing to influence another person (the client) to make a decision relating to a financial product ... may do so in ways other than by express recommendations or explicit statements of opinion. Information or other material may be presented to the client in a form implying that the presenter favours or commends a particular course of action without saying so explicitly. Similarly information or other material may be presented in a form that implies that the presenter's view is that the contemplated course of action is likely to be beneficial to the client. 366 The authorities have accepted that the statutory language should be given a broad interpretation. Specifically, they support the proposition that a person may provide information or present material in a way that implicitly makes a recommendation or states an opinion in relation to a financial product. 17 The protection of people from potentially selfishly motivated advice is not advanced by making fine logical distinctions based on overly precise linguistic choices about words of a general kind employed by Parliament in furtherance of the protective purpose. Protection from assiduous, clever and subtle advancement of another's personal interest may require a generous breadth of meaning of words that are taken from, and are intended to relate to, human relational experience, and a giving of practical flexibility in the application of those words to the reality of human experience. 18 The question is one of the practical application of the statute to the context in question to see whether an express or implied "recommendation" (that is, a commending something by favourable representation or presentation as worthy of confidence or acceptance or as advisable or expedient) or "statement of opinion" (that is, a judgment or belief or view or estimation) was made. The two concepts are, of course, related. The opinion may be the basis of the recommendation; and the recommendation may carry with it an implied opinion. 19 That said, the distinction made by the primary judge at [94]-[97] of the reasons between "opinion" and "fact" or "statement of opinion "and "statement of fact", by reference to principles of evidence, is likely to complicate the enquiry without warrant. One could well imagine a communication that was in overall terms an implied recommendation or opinion being made up of statements of interconnected facts, designed by its and their structure, to appear as a recommendation for some conduct or view. The unnecessary complexity, with respect, can be seen in [98] and [99] of the reasons. 20 The task is to look at the communication or exchange, in its whole context, and assess whether some express or implied recommendation or statement of opinion is made. This is unlikely to be assisted by minute examination of parts of the text of a flowing, whole, engaged human conversation with all its implicit, as well as explicit, content. One can well understand that in some contexts mere statements of fact will not qualify as recommendations or statements of opinion. That is not, however, a conclusion that is to be drawn by an abstracted distinction between statements of fact and inference or by the deconstruction of text, but rather by looking at, or listening to, the whole of the communication or exchange, in its context. 21 Westpac also argued before the primary judge that the words "recommendation" and "statement of opinion" were to be understood by reference to "advice". Thus, it was submitted that the word being defined may properly influence the interpretation of the definition: Rennie Golledge Pty Ltd v Ballard [2012] NSWCA 376; 82 NSWLR 231 at 260-261 [129] and the cases there cited. So, the recommendation or statement of opinion was to be seen as one which contained some element of estimation or judgment as opposed to a mere advertisement or "sales pitch". This was reinforced, it was submitted, by the reference in s 766B(1) to a "report" of the advice. The complaint on the cross-appeal by Westpac is that the primary judge's meaning would encompass all advertising and marketing, and such are not, and could not be, advice. Thus, it was submitted the meaning given by her Honour was too wide. 22 None of these provisions can be seen to be directed to what might be described or characterised as mere advertising. That, however, does not lead to the need for, or the appropriateness of, abstracted definition of categories of human behaviour or communication, outside the context of that actual behaviour or whole communication. The provisions are directed at the giving of advice that is contained in an express or implied recommendation or statement of opinion. That it may have some marketing or sales purpose is not the point. It is sterile to seek to draw a line between "advice" and "marketing" or "advertising", or to engage in abstracted defining of those things. It is a question of characterisation in all the circumstances. Bearing in mind the view of the High Court as to the circularity that must be recognised in construing a definition by reference to the meaning of the term defined (The Owners of The Ship "Shin Kobe Maru" v Empire Shipping Co Inc [1994] HCA 54; 181 CLR 404 at 419 and however that case may now stand with the approach to construction laid down in Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at 381-382 [69]-[71]) this submission of Westpac cannot be accepted in its terms: Esso Australia Resources Pty Ltd v Commissioner of Taxation [2011] FCAFC 154; 199 FCR 226 at 256-258 [100]-[107]. The question is whether, on its proper characterisation, the communication or exchange was a recommendation or statement of opinion given by someone to another for that other's consideration in connection with making the decision in s 766B(1). I would accept that in some circumstances what might otherwise be seen to be a recommendation might only meaningfully and rationally be described or characterised as part of mere puffery in an advertisement and could not meaningfully and rationally be described or characterised as advice. That conclusion is likely, however, to be reached by an examination of the applicability of the Chapter as a whole. The proper process is to examine the communication and exchange in its whole context to ascertain whether it is a recommendation or statement of opinion to the person. One does not add to this process by considering some further limitation of advice and imbuing that limiting characteristic with some element of evaluation or degree of consideration, as Westpac's submissions sought to do. There is certainly no bright line distinction to be made between "sales" and "advice". The communication or exchange may have a heavy "sales" purpose. That will not mean that it does not contain a recommendation or opinion that was intended, or could reasonably be regarded as intended, to influence a person in making a relevant decision. How broad the definition may reach may be better tested in other circumstances. Here, the relational exchanges and the engagement in conversation designed to influence customers to make a financial decision constitute the very kind of context and circumstance to which the Chapter and the Division were intended to be directed. 23 One of the features of the operation of s 766B that assists in the process of relevant characterisation is the relational character of the exchange. Section 766B(3)(a) is directed to the circumstance where the provider has considered one or more subjects. Section 766B(3)(b) is directed to where a reasonable person might expect that consideration to have taken place. That is not to require any particular temporal requirement for the relational exchange; but it may help to distinguish "advice" from advertising in particular circumstances.

Consequences of the finding of personal advice 147 There being personal advice, there was a clear contravention of the duty to act in the best interests of the customers in making the relevant recommendations to accept the rollover service. This can be seen in the primary judge's findings about s 912A(1)(a). These findings were made by her Honour on an alternative case that her Honour found open on the pleadings, even if the advice were general. Notwithstanding the context of their making, the findings are relevant to the failure to act in the best interests of the customers. The primary judge said expressly at [463]-[464] that, if she were wrong in her conclusion that there was no personal advice, she would have found a contravention of s 961B(1), as follows: 463 On the assumption that Westpac's "financial product advice" was "personal advice", I am satisfied that Westpac did not act in the best interests of the customers to whom it gave that advice because those interests could only be served by advice as to whether the rollover service was in their best interests. Westpac did not attempt to inform the customers to whom it gave the "financial product advice" whether it was in their best interests to accept the advice. This conclusion is supported by Westpac's view, recorded in the case study set out at [14] of what would be involved in providing proper personal advice to a customer who sought advice about whether to consolidate external funds into their BT account. There is no difference in the client's best interests that depends upon whether advice was volunteered in a marketing campaign, or the subject of an express request for advice. 464 Accordingly, if I had found that Westpac gave "personal advice", I would have concluded that it contravened s 961B(1) in giving that advice. 148 The detailed findings and conclusions on the alternative case on s 912A(1)(a) were contained in [404]-[411] and [431]-[448] of the reasons. They included the following. The callers were coached to structure their calls upon the QM Framework: [404]. The structure was inconsistent with any caller taking any steps to determine whether the rollover service was in the best interests of the customers. The premise of that was that it was not necessary since the advice was general: [406]. Westpac's approach involved encouraging its customers to accept the rollover service on the basis of the particular "selling points" of manageability and potentially saving on fees. Except to that extent, Westpac did not have regard to the appropriateness of the BT account for the customer or whether they would roll out of a more suitable account: [407]. The objective of the QM Framework was to increase Westpac's FUM: [409]. The QM Framework encouraged callers to influence customers to roll over involving limited identification of customers' personal circumstances and without consideration of whether another course may be better suited to the customer: [433]. The conduct, as intended by the QM Framework, comprised an implied recommendation to accept the rollover service without explaining that a prudent customer may wish to consider matters of a kind that would be given if personal advice was sought. Thus the recommendations were made without telling customers about the possible relevant considerations that attend a decision of this kind: [444]. 149 In the context of these matters, the primary judge expressed these conclusions at [445]-[448]. 445 The QM Framework also involved encouraging customers to accept the rollover service with the use of "social proofing" by which customers were told that their beliefs or reasons were commonly held. The fact that a customer's belief or rationale was commonly held was not a matter that would have provided a basis for the recommendation, if it had been given as personal advice. In my view, as it was not a sound basis for decision making, it should not have been used to provide assurance to customers, with a view to influencing them to accept the rollover service. 446 By making the recommendations in an unsolicited call, using an informal style and a structure likely to be perceived as generic, and where consolidation of super accounts had obvious benefits, and by offering to effect a rollover on the telephone, Westpac conveyed the impression to the customers that the recommendation was an obvious and uncontroversial course of action for the particular customer, when that may well not have been the case. The impression was arguably reinforced by the "social proofing" content of the calls. The callers' attitude of helpfulness also reinforced the impression that the recommendation was appropriate for the particular customer and that there was no possible lack of alignment between the interests of the customers and Westpac. 447 Although Westpac asserted emphatically that the calls revealed its self-interest, Westpac did not explicitly identify its interest in influencing the customers to accept the rollover service. The QM Framework approach was admittedly self-interested and did not necessarily promote the best interests of the customers but the approach did not draw the customers' attention to either of those matters. Rather, it strongly conveyed the impression that Westpac was assisting the customer by its rollover service and, particularly by "social proofing", the impression that customers should feel comfortable in accepting the service without giving consideration to their particular circumstances. In fact, as Westpac knew, there were matters (of the kind that would be considered if the "financial product advice" was given as "personal advice") that, acceptance of the rollover service might have adverse consequences for the customer. 448 While not dishonest, in my view, the matters demonstrate the adoption and implementation of the QM Framework approach failed to ensure that the "financial product advice", being a financial service covered by Westpac's AFSLs, was provided "efficiently, honestly and fairly" in contravention of s 912A(1)(a) of the Act. 150 I would express the same matters as follows. The decision to consolidate to some extent to some extent superannuation accounts can be accepted as a straightforward and obvious one. It will enhance manageability and likely reduce the number of fees charged by different funds. At which fund the consolidation should take place is not necessarily straightforward or obvious. It depends, in significant part, upon the amount and charging basis of fees in the funds in question. To consolidate into fund A from funds A, B and C may in fact increase fees if funds B or C had lower fee structures than fund A. The decision would also be affected by the character of the funds and their rates of return, historical and anticipated. These factors lead to the conclusion that, while a decision to consolidate may be straightforward or obvious, a decision to consolidate into BT is not straightforward or obvious, and, as a general proposition, could not be prudently made in the interests of the customer without a consideration of the personal circumstances of the customer directed to, at least, comparative fee levels and rates of return of other funds held. A customer might not, of course, want the bother of that analysis and might decide that BT is as good as any fund, especially since Westpac has taken the trouble to set up a system to help customers consolidate. But customers were not given that choice. They were deliberately encouraged to think that it was a straightforward and obvious decision to consolidate into BT on the limited proposition that they may potentially save on fees and would have a more manageable account and on the recommendation to accept the rollover service. Westpac thus intended that these customers make a decision at the conclusion of the exchange and communication, having discussed their concerns and impliedly stated that those concerns would be fulfilled. The information the callers had was inadequate to advise a consolidation into their BT accounts, unless proper consideration was given to the kind of matters to which I have referred in order to give personal advice, unless an informed choice not to seek such personal advice was made by the customer. 151 The above was plainly not acting in the best interests of its customers. The whole approach of Westpac was to obtain an advantage for itself without engaging with the personal circumstances of the customers so as to avoid the consequences of the responsibilities of providing personal advice. It is unnecessary to deal with the question of the distinction between procedure and substance discussed by Moshinsky J in Australian Securities and Investments Commission v NSG Services Pty Ltd [2017] FCA 345; 122 ACSR 47. That distinction may be seen, perhaps, to be less than of complete utility. Certainly, the detailed text of s 961B(2) and some of the extrinsic material referred to by his Honour makes the distinction relevant. But s 961B(1) expresses a concept flowing out of a relationship of advice. The obligation of a financial advisor to act in the best interests of a client draws on the concepts of fiduciary loyalty commonly resting on persons in such a position: Daly v Sydney Stock Exchange Ltd [1986] HCA 25; 160 CLR 371 at 377 and 385. The circumstances that will lead to a conclusion that a provider of personal advice did not act in the best interests of his or her client may be drawn in part from the list of factors in s 961B(2), but the source of equitable faithfulness of the duty in s 961B(1) should also be recognised in the content of the phrase and the possible circumstances of its contravention. 152 From this conclusion that there was a contravention of s 961B(1), it follows that there were contraventions of ss 961K(1), 912A(1)(b) and (c). There being no relevant statements of advice, there were contraventions of s 946A. 153 For the reasons that follow there was also in my view a contravention of s 912A(1)(a). 154 The relevant question for s 912A(1)(a) is whether Westpac did all things necessary to ensure that the giving of any advice was done efficiently, honestly and fairly. This was dealt with by her Honour as an alternative case on the assumption that personal advice was not given. That was contested on the cross-appeal. Given my view on personal advice the question of the alternative case does not directly arise, though I will come to it later. 155 Westpac submitted that it had taken steps sufficient to meet the ethical standard involved in s 912A(1)(a). I disagree. 156 The primary judge recorded at [401] of the reasons ASIC's case in general terms that Westpac failed to satisfy s 912A(1)(a) by adopting and implementing the QM Framework, through training, encouraging and directing the Super Activation staff to follow the QM Framework in their calls with customers. The case was recorded at [402] as having the following greater specificity, in that Westpac: (1) adopted and implemented a structure and approach to calls with customers in the Q2 and Q4 campaigns that was liable to lead to the Super Activation staff: (a) providing personal advice to customers to rollover their external accounts into their BT account; and/or (b) doing so without taking the following types of steps: (i) Failed to adequately identify the objectives, financial situation and needs of the customer that would reasonably be considered as relevant to advice on rolling over superannuation accounts, before recommending that the customer roll over any external accounts into their BT account; (ii) Failed to conduct a reasonable investigation into the financial products that might achieve the customer's objectives; (iii) Failed to consider the merits of the customer rolling their superannuation account into an existing external account or a superannuation product in which they did not have an account, rather than their BT account; (iv) Failed to consider or compare the respective features and benefits of the superannuation accounts that were the subject of the rollover; (v) Failed to make reasonable inquiries to obtain complete and accurate information where information was incomplete, including as to the insurance needs and existing insurance coverage of the customer; (vi) Failed to assess whether they had the necessary expertise to provide the advice and decline to provide the advice. (2) Adopted and implemented that structure and approach: (a) Regardless of the appropriateness of the BT account to the customer, including whether that step involved them rolling out of one or more external accounts which were better suited to the customer than their BT account; and (b) Without having any or sufficient details of the customer's external accounts; (3) Adopted and implemented that structure and approach for the primary purpose and objective of generating an increase in FUM for WSAL, BTFM and or the Westpac Group and, in doing so prefer their own interests and the interests of WSAL, BTFM and or the Westpac Group in generating FUM to the interests of their customers. 157 These paragraphs set out in [402] were taken directly from paras 168 and 162(a) to (f) of the Particulars of Claim that supported the amended originating process and amended concise statement. 158 At [404]-[430] of the reasons, the primary judge made certain findings of fact and discussed the meaning and content of s 912A(1)(a). 159 At [431], [432] and [434] of the reasons, the primary judge identified four ways in which ASIC contended that Westpac had contravened s 912A(1)(a). Two of those ways were premised on the propositions, which her Honour had rejected, and which I have accepted, that use of the QM Framework was likely to lead to the provision of personal advice and that the Super Activation Team did in fact provide personal advice. The whole structure of the QM Framework, though assiduously trying to bring about the decision of the customer by general advice, was apt to lead to the implied recommendation that the customer should roll over their other superannuation accounts into their BT account and the conclusion that this could be seen by a reasonable person in the customer's position as being done as a way of meeting and fulfilling their concerns and objectives in respect of consolidation. The QM Framework was fraught with the risk of the giving of personal advice, as attention to the PowerPoint presentation would have told anyone. 160 The third and fourth matters were expressed by the primary judge at [432] and [434] not to be premised on the giving of personal advice, and were as follows: 432 The third matter was that, by the application of the QM Framework, customers were or may have been influenced and advised to accept the rollover service in a manner which took into account limited information about their personal circumstances and which gave no consideration as to whether there was another course of action better suited to the customer. … 434 The fourth matter was that the implementation of the QM Framework was for the primary purpose and objective of generating an increase in FUM. As explained above, Westpac accepted that this was its objective. 161 I will here deal with the matter on the assumption that these matters were premised on personal advice being given, as it was. 162 The case was not put by ASIC that the conduct of Westpac was misleading or deceptive or that it was dishonest. But the case was put that Westpac's conduct involved a contravention of s 912A(1)(a), in particular because it was self-interested and exhibited unfairness. 163 It was submitted by Westpac that the matters identified by the primary judge did not establish conduct to the required level of seriousness by reference to what was said in ASIC v Camelot Derivatives Pty Ltd (in liq) [2012] FCA 414; 88 ACSR 206 and ASIC v Cassimatis (No 8) [2016] FCA 1023; 336 ALR 209; and that the primary judge, at [448] of the reasons ([149] above), did not engage with the relevant legal test or explain how Westpac's standard of conduct fell short. In my view, the conduct did reach the required level of seriousness, for the reasons to which I will come. 164 In relation to the "social proofing" finding in [445], it was submitted that Westpac never put to customers the fact that their reasons for rolling over were held by others as a basis for their decision-making. That this express statement was not made can be accepted. But what was the point of referring to other customers' views as a deliberate technique? It was plainly to reinforce and encourage the view of the customer, which the caller was trying to move to the point of decision-making and acceptance of the recommendation impliedly made. 165 As to the implied representations and impressions referred to in [446] and [447], Westpac submitted that the primary judge did not identify what parts of the calls gave rise to them and that the findings were not supported by the evidence. I reject these criticisms. The demand for the precise parts of the communications that support the implied representations and impressions reflects an approach of deconstructed particularity which is inapt and inappropriate for evaluating this kind of exchange. The whole of the conversations in tone, structure and content both express and implicit, when listened to, support the findings of the primary judge. 166 It was also submitted that, when giving general advice, a provider who has given a warning under s 949A has no burden or responsibility to explain that the recipient might want to consider other matters which would be relevant if they were seeking or receiving personal advice. It was submitted that to read a more onerous warning into s 912A(1)(a) would be contrary to the statutory intention shown by the warning prescribed in s 949A. It was submitted that there would be a significant burden on everyday commerce if general advice providers were required to explain to recipients the kinds of matters that would be considered if personal advice were sought. These submissions founder on the finding of the provision of personal advice; but, apart from that, they also set up a rigid dichotomy, when there is none. No such conflict of ss 912A(1)(a) and 949A arises. The provisions apply in an infinite variety of circumstances. Here Westpac sought to influence decisions of people to consolidate their funds with BT. It was the aim of the carefully coached QM Framework not to give personal advice, but to market and communicate (by no more than general advice) to influence them to the decision on the call. That decision could not, however, be prudently made without considerations that would be relevant to personal advice, if sought. That decision was impliedly recommended and made to seem by the callers and by the QM Framework to be straightforward and obvious. Even if in each call there was an incantation that satisfied s 949A, that did not immunise the conduct from being characterised as unfair. 167 In my view, the findings of the primary judge at [404]-[411] and [431]-[448] were supported by the evidence, especially the recordings of the exchanges. The evidence also supports the way I have expressed these matters at [150]. 168 Do those findings and the provision of personal advice by the implementation of the QM Framework require a conclusion of a contravention of s 912A(1)(a)? In my view they plainly do. 169 The primary judge discussed the history and meaning of the phrase "efficiently, honestly and fairly" at [412]-[430] of the reasons. There was no debate before her Honour as to the principles involved. 170 The phrase has been held to be compendious as a single, composite concept, rather than containing three discrete behavioural norms. That said, if a body of deliberate and carefully planned conduct can be characterised as unfair, even if it cannot be described as dishonest, such may suffice for the proper characterisation to be made. 171 The primary judge's discussion of the standard of conduct expected by the terms of s 912A(1)(a) at [413]-[429], which I will not set out, was based on ASIC's submissions and was not contested by Westpac. Whilst it is a helpful exposition, I would reserve for an occasion where the matter was fully argued the question whether the phrase is compendious and, if it is, its meaning and application. In particular, I would reserve my views as to the consequences of demonstrating unfairness in the provision of financial services and any need for additional ethical failing. 172 None of the cases to which the primary judge referred sought to define the phrase. Words such as "efficiently", "honestly" and "fairly" and a composite or compendious phrase or expression such as "efficiently, honestly and fairly" do not admit of comprehensive definition. Certainly a degree of articulation of instances or examples of conduct failing to satisfy the phrase will be helpful and of guidance, as will an articulation or description of the norms involved. 173 The provision is part of the statute's legislative policy to require social and commercial norms or standards of behaviour to be adhered to. The rule in the section is directed to a social and commercial norm, expressed as an abstraction, but nevertheless an abstraction to be directed to the "infinite variety of human conduct revealed by the evidence in one case after another." (See Gummow WMC, "The Common Law and Statute" in Change and Continuity: Statute, Equity and Federalism (Oxford University Press, 1999) at 18-19.) By the phrase itself, emphasis must be given to substance over form and the essential over the inessential in a process of characterisation by reference to the stated norm: Attorney-General (NSW) v The Perpetual Trustee Co (Ltd) [1940] HCA 12; 63 CLR 209 at 226-227 (per Dixon and Evatt JJ); and Gummow WMC, ibid. Care needs to be taken that phrases used by judges in individual cases, in which they explain and articulate their views as to the success or failure in satisfying the norm in s 912A(1)(a), do not become rules to apply as defaults for the proper process of characterisation by reference to the words used by Parliament as to whether a body of conduct satisfied or failed to satisfy the norm. 174 The word "fair" in its adjectival form, directed to conduct, includes a meaning of "free from bias, dishonesty, or injustice; that which is legitimately sought, pursued, done, given etc.; proper under the rules": Macquarie Dictionary. It could hardly be seen to be fair, or to be providing financial product advice fairly, or efficiently, honestly and fairly, to set out for one's own interests to seek to influence a customer to make a decision on advice of a general character when such decision can only prudently be made having regard to information personal to the customer. For one's own interests, one is advising generally (on this hypothesis) to bring about a result which may not be in the interests of the customer. The general advice is given to reinforce an assumption that fewer fees (in number) will mean less fees (in amount). There was a degree of calculated sharpness about the practice adopted in the QM Framework. At best, the aim was to get a customer to make a decision after only general advice, being a decision that could only prudently be made by a consideration of the personal circumstances of the customer and his or her funds and their characteristics. 175 The way that the primary judge expressed the matter at [431]-[448] of the reasons (see [148]-[149] above) articulated that unfairness, as does the way I expressed it at [150] above. Perhaps to complete my articulation as to why Westpac might be said to have contravened the section and failed to exhibit the ethical values expected of it, one can summarise the conduct as follows. The customers were, through the carefully structured QM Framework, made to feel that this straightforward and obvious decision should be taken when, subject to their personal circumstances and the features of their other funds, it may well not have been in their interests. In the context, the calls and the callers gave the impression (as it was intended by Westpac from the QM Framework) that BT (through the callers) was there to help, when in fact it was there only to help itself. To that extent, Westpac may be seen to have been intending to take advantage of an assumption that fewer fees brought about by acceptance of the service meant less fees in amount and so a better return. The QM Framework courted the risk of personal advice being given; and it was. I do not intend to be either flippant, or disrespectful, but the perceived importance of the "closing" being over the phone might be seen as not wanting to let the customer out of the showroom or shop. This is not ensuring that financial services covered by its licence were provided efficiently, honestly and fairly. 176 There was a contravention of s 912A(1)(a).

Financial product advice - s 766B(1) 216 It may be accepted that, as Westpac submitted, the defined term in s 766B(1) of the Corporations Act is "financial product advice" and that the word defined, if it has an ordinary meaning, may influence the interpretation of the definition: Rennie Golledge Pty Limited v Ballard [2012] NSWCA 376; (2012) 82 NSWLR 231 at [129]. In s 766B(1), "financial product advice" means a recommendation or a statement of opinion, or a report of either of those things, that is either intended to influence a person in making a decision in relation to a financial product or could reasonably be regarded as being intended to have such an influence. Accordingly, a recommendation or statement of opinion necessarily involves something that is capable of influencing a person about a financial product. To go further, as Westpac seeks, and to say that the communication as a whole must be capable of being characterised as "advice" in its ordinary meaning is to go too far. 217 As the primary judge said at [83], the terms "recommendation" and "statement of opinion" have been interpreted broadly and include an implicit recommendation or statement of opinion: Australian Securities and Investments Commission (ASIC) v Park Trent Properties Group Pty Ltd (No 3) [2015] NSWSC 1527 at [364]-[366]. While it is necessary to consider whether a recommendation or statement of opinion was made in the context of the whole of the relevant communication, a recommendation or statement of opinion may be found by reason of the whole or any part of the communication. It is not necessary, as Westpac would have it, for the whole of the communication to bear the character of an advice for the statutory definition to be satisfied. 218 The dichotomy which Westpac seeks to establish in this case between advertising and marketing on the one hand and advice on the other hand is unhelpful. It is true that all advertising and marketing is intended to influence the listener to acquire the provider's products but that advertising and marketing is not necessarily advice. The rub in the present case is that while Westpac may have perceived what it was doing as a marketing campaign in the interests of Westpac, its campaign consisted of making calls to existing Westpac customers on the basis that the purpose of the call was to help the customer in respect of the customer's superannuation. The reasonable customer would not expect that in such a serious context, the customer's superannuation, and given the existing relationship between them, Westpac would present itself as helping the customer if, in reality, it was doing nothing more than helping itself. As the primary judge found at [47], while the customer would assume that Westpac was making the call to the customer self-interestedly, the customer would also assume that Westpac was making the call in the customer's interest. 219 Contrary to Westpac's submissions, the overall context of the calls was not contrary to the primary judge's finding that Westpac made implicit recommendations in each of the calls that customers should rollover their other superannuation into their existing BT superannuation accounts. What Westpac describes as mere marketing and not advisory in character, in fact, ignores the relevant context from the perspective of the customer. As noted, there was an existing relationship between Westpac and each customer. Each customer already had a BT superannuation account. Westpac was thus already responsible for part of the customer's superannuation. In each call there was an emphasis (usually repeated) by the caller from Westpac on helping the customer in relation to their superannuation. The purpose of the call was to enable the caller to complete the transaction by the customer agreeing to Westpac consolidating their superannuation accounts as part of the call. 220 Customer 1 was told that "we'd like to help you bring them [the other superannuation accounts] over to your account to potentially save you on fees". The customer was asked what benefits they saw in combining their superannuation and their answer was reinforced by the caller saying "[s]o it sounds like manageability and also the saving on fees, potentially. Is that right?". The customer was then told manageability and potentially saving on fees were the two main reasons Westpac's clients "do like to bring their supers together" and "it does make a lot more sense" to do so "from a management point of view, for sure". 221 Customer 2 was told the call was to "see how you're tracking and also to go through your superannuation search results and potentially save you on fees". The customer was asked why they wanted to combine their superannuation and what they saw as the main benefits of so doing. Having answered fees and easy to manage, the customer was told that they were not alone, most customers say the same thing and "[i]t does make a lot more sense to pay…only one set of fees, potentially" and that Westpac could help by doing the rollover over the telephone saving the customer from having to do any forms "and that way you can start potentially saving on those fees". 222 Customer 4 was told that Westpac had the results of their super search and the caller was ringing to see if "we can combine it all for you…and possibly save you on time and fees". When the customer said they wanted to combine their superannuation accounts the caller said "[y]ou wanted to save on fees and also be able to see what you've got as well and manage better". When told that was right the caller said "[o]kay, great" and that "what we can do is we can combine that…account into your BT account" by a very simple process and that having "everything combined for you and hopefully will make it a bit easier for you to manage and you'll save on things like fees as well". 223 Customer 5 was told the caller was calling to touch base to see how everything was going with their superannuation "and to see if I can help you combine the super we found…to potentially save you on some fees". The customer was also told that "all your super is going to come into the one place from the next two to four weeks, for easy management for you". 224 Customer 6 was told it was a quick courtesy call and "to go through your superannuation search results and potentially save you on fees by bringing them over to your account" and that "what we can do for you today is actually go through your supers and actually bring them all over to your account so you can start potentially reaping those benefits" and that "everything comes into your account in the next two or three weeks so it will all be in the one spot, nice and organised and you potentially start saving on those fees". 225 Customer 7 was told that the caller wanted to go through the customer's superannuation search results and "help you organise your supers by combining them to your account" and that "so I can best help you and make the most of your time" the caller had a few questions. When the customer said in response to the question about what had prompted them to have the search undertaken was the "usual reasons" and to get more interest if there was more money, the caller said "[o]kay, fair enough. So that's something a lot of our client say. …so basically one of the main reasons was to bring it all together to create a bigger pool of money to potentially get performance out of it. Is that right?". When the customer then mentioned reducing the costs to one super, the caller said that again, that was one of the main reasons "our clients like to consolidate. So what we can do for you, we'll help you bring across your other supers today and that way you can just pay that one set of fees and you've got potentially a larger pool of money where you can get a potentially better return from". The customer was told "everything comes across to your account in two or three weeks and it's all under the one roof and you've got a larger pool of money there to potentially get you better returns in the future". 226 Customer 8 was told it was a courtesy call and to go through your superannuation search results "and potentially save you on fees by bringing over any accounts you might have into your BT account". The caller told the customer "a lot of our clients say the same thing [as the customer] about their supers. You know, if they've had a lot of funds opened for them in the past…you are potentially paying multiple sets of fees, so it definitely makes a lot of sense from a logical standpoint" and that the customer could "start substantially saving on fees once it comes over" and that everything would be rolled over in two to three weeks "so all your super's in the one spot and you start potentially saving on those fees". 227 Customer 9 was told that the purpose of the call was "to help you understand and organise your super". When the customer was asked what they saw as the benefit of combining their super and answered "just fees, I guess" the caller said "[y]eah, look, a lot of the customers I speak to like the fact that by combining your super you could potentially save on fees…and also the fact that, you know, it's a little easier to manage because you've got it all there in one account" and that the rollover would take place in three to four weeks "and then hopefully you could potentially save on some fees". 228 Customer 10 was told it was a quick courtesy call to go through your superannuation search results and "help to organise all your superannuation by bringing over all those accounts to you". When the customer responded to a question about the benefits of combining their superannuation by saying "yours was the only sort of making money so I figured best to get it all into the one account" the caller said "[d]efinitely, definitely. And, look, I see a lot of our clients combining for the very same reason, to have a bigger amount in the account and they are attracted also to the past performance that our accounts have been able to yield for our clients, so that's always a good thing. Now, what we can do for you today, we can go through your results and we can help you bring them all over to your account. We can do that all over the phone which means we can get your account all nice and organised and you can avoid doing those forms. How does that sound?". The caller also said "I'll process your request in the next 10 minutes or so and you'll get a confirmation email from us and everything gets rolled over to your BT account in the next two or three weeks so it's all in the one place for you and hopefully starts working hard for you for your retirement". 229 Customer 11 was told it was a quick courtesy call "to see how you're going with the account but also to go through your superannuation search result and help you bring them over to your BT account to potentially save you on fees." When the customer said in response to a question that they wanted to have their superannuation all in one spot the caller said "[y]eah, for sure, for sure. It definitely makes sense. So basically manageability and saving on the fees?". When the customer said the other accounts were dwindling away with fees and charges the caller said "Yeah, look, that's a pretty common story we hear from a lot of our clients. […] So it's good that you're getting it all together". The caller also said "[y]ou'll get a confirmation email and it will all get rolled over into your BT business super account but - yeah, sorry, in the next two or three weeks.[…] It will all be in the one spot, nice and manageable for you. Does that sound good?". 230 Customer 12 was told it was "a quick courtesy call today and also to go through your superannuation search results to potentially save you on fees by bringing them over to your account". When the customer responded to a question about why they wanted to consolidate their superannuation accounts by saying that they were not gaining interest by having money sitting in other accounts, the caller said "[s]o you're really for potentially better performance. That's the main thing for you?". The customer responded "[t]hat's right" and the caller then said "[r]ight, not a problem at all. Look, that is one of the main reasons that our clients say they like to consolidate and also obviously it's a lot more manageable when it's in the one place as well. Now, what we can do for you is we [c]an actually go through your superannuation search results today and help you bring them all over to your account verbally over the phone… so you start to potentially get that performance that you're after. Is that something we can do for you?". 231 Customer 13 was told it was a "quick courtesy call today to go through your superannuation search results and potentially save you on fees by bringing them to your account". When the customer responded to a question about the benefits they saw to consolidating their superannuation by saying "get a better return" the caller said "[o]h, okay. So it sounds like performance is the main thing for you. Is that right?" and "[f]air enough. Well, look, yeah, that is one of the main reasons that our clients like to consolidate their supers, along with the fact that obviously it's a lot more manageable when it's in one place, you're not chasing it everywhere" and "potentially you are saving on fees, depending on if you are paying fees on the other accounts". The caller said "[w]hat we can do, we'll go through your super results and we can actually help you bring them together over the phone today using a verbal request" and that "that way you've got all your accounts in one place so you can potentially start getting better performing on that. How does that sound for you?". The caller also said "I'll process your rollover in the next 10 minutes and you'll get a confirmation email from us and everything gets rolled over in the next two or three weeks so it's all in the one spot, it's nice and organised potentially getting that performance you want". 232 Customer 14 was told "the purpose of the call was to see how you're going with understanding and organising your BT account" and "we can actually help you consolidate your super, [customer 14], if that's what you want to do and we actually do it over the phone so it's quite easy and it saves you time doing the paperwork". When the customer said in response to a question that it would be easier to keep track of their superannuation if it was combined the caller said "[o]kay, great, not a problem. Yeah, look a lot of the customers I speak to like the fact, you know, as you said, by combining your account it's a little easier to manage. You'll get one statement and […] you'll know exactly where your money is and how much you've got. Also the fact that you could potentially save on fees, so say if you had three accounts out there, you could potentially pay multiple sets of fees rather than just the one there". The caller also said "[y]ou could potentially have a fair amount out there, so look, more than happy to help you roll it all in and help and then you could potentially save on some fees and it'll be a little easier to manage, as you mentioned before" and "[w]e'll roll it all in, it'll take three to four weeks to come across and then, as I said, potentially save on some fees there". 233 Customer 15 was told the purpose of the call was to see how "you are going with your super account and to see whether I can potentially help you save on some fees by combining any other super that you've got out there". Customer 15 was then asked a series of questions about the customer's experience with superannuation, length of self-employment, how much the customer had in superannuation, and was told that the caller could "definitely help you out with that" by combining the superannuation accounts. The customer was asked what benefits they saw in combining their superannuation and had their answer repeated back to them "[s]o from a fee point of view, important there". The customer was told this was what "many of my clients mention, yes, having the one super potentially can save on those fees". This was repeated on the basis that if the customer accepted the service "we can get those rolled over for you and then potentially save on those fees that you mentioned were important". 234 The idea that these calls were mere marketing by Westpac in its self-interest is unsustainable. Equally unsustainable is Westpac's position that it was merely offering a service to the customers and no more. Westpac's callers were at pains to convey the impression that they were acting to help the customers by providing a service that the customers should accept in their own interests, that is, consolidating the customers' other superannuation accounts into their BT accounts. The callers did this, as the primary judge found, by (in some cases repeated) implicit recommendations to the effect that, as it were, it went without saying that accepting the service was in the customer's interest. The general advice warning that each caller gave to each customer at the beginning of each call in no way changed the message that was being consistently conveyed. Nor did the fact that the calls followed letters sent to each customer that Westpac also characterised as "marketing" make any difference. Those letters were themselves more than mere marketing. They were part of a sophisticated campaign intended to encourage customers into believing that it was in their interests to consolidate other superannuation accounts into their BT superannuation account. 235 The clear message conveyed by the callers in each call was that Westpac was calling to help the customer by providing them with a service that would be in the customer's interest to accept. No reasonable customer would have expected that when Westpac said it was calling to help the customer, in fact, it was doing nothing more than helping itself to the customer's superannuation irrespective of the customer's best interests. Accordingly, the primary judge's conclusion at [260] that each customer received a recommendation that that they should rollover their external accounts into their BT account is unassailable. 236 Westpac submitted that the logic of the primary judge's approach was that every financial product issuer would provide financial product advice whenever it produced advertising or marketing materials highlighting the benefits and attractive features of its products which were intended to influence recipients to acquire them. I disagree. The context of the present case is quite different from that which Westpac describes. Westpac was not engaged in mere marketing highlighting the benefits of its superannuation products. If s 766B(1) requires a communication having the character of advice as opposed to nothing more than a recommendation or statement of opinion with the requisite intent, then the unavoidable conclusion is that Westpac's calls in fact involved advice. The form of the advice was subtle but its content was unmistakeable, that it would be in the customer's interest to consolidate their other superannuation accounts into their BT account in circumstances where Westpac could not possibly have known how the customer's best interests in respect of their superannuation would be served. 237 The fact that Westpac was not a disinterested or neutral party but was the issuer of the BT accounts does not assist Westpac. As I have said, Westpac was not merely pointing out the benefits and positive features of its superannuation products. It was conveying a view that the customers should accept the service that was being offered in their own interests. 238 Nor do the consequences of a finding that a person was providing financial product advice suggest any different approach to the construction of s 766B(1) is warranted. Those consequences, a warning under s 949A for general advice and far more extensive requirements for personal advice, are tailored to that distinction drawn by the statute. Contrary to Westpac's case, not every statement of fact, sales message or expression of enthusiasm which a financial product issuer makes about its own financial products will involve financial product advice. More is required in the form of a recommendation or statement of opinion. In the present case Westpac's communications, in my view, fall well on the side of the line of financial product advice in distinction from mere marketing. 239 This said, I agree with Westpac's submission that the primary judge's reference to the context of the law of evidence in her construction of "statement of opinion" involved a diversion. While, as Westpac said, the primary judge was undoubtedly correct at [94] to say that mere statements of fact could not be a statement of opinion, the statutory context in which the phrase applies in s 766B(1) has nothing to do with the meaning of an opinion in the law of evidence. Accordingly, her Honour's search for statements involving inferences from facts, with respect, was misdirected. 240 What I do not accept, however, is the distinction Westpac sought to draw between mere "logical possibilities" or statements of "self-evident logic" or "truisms" on the one hand and "statements of opinion" on the other. A statement of opinion is simply a statement of a view. In the context of s 766B(1) it is a statement of a view about a financial product either intended to influence a person in making a decision about the product or that could reasonably be regarded as being intended to have such an influence. The fact that the view may also be characterised as "self-evident logic" or a "truism" does not mean it is not also an opinion. As with a recommendation, a statement of opinion may be express or implied. "Statement" is defined in s 9 as including matter that is not written but conveys a message. The statements in the calls conveyed a message consisting of the caller's view that the customers should rollover their other superannuation accounts into their BT account. The statements thus constituted statements of opinion to this effect.

Provide services efficiently, honestly and fairly - 912A(1)(a) 286 It follows from the above that I agree with the primary judge's conclusion that Westpac contravened s 912A(1)(a) of the Corporations Act (which requires a financial services licensee to do all things necessary to ensure that the financial services covered by the licence are provided efficiently, honestly and fairly) by (a) in all cases making the recommendations without informing the customers about the possible relevant considerations for a prudent customer, (b) the social proofing that occurred in a number of the cases was not a sound basis for decision making and should not have been used to provide assurance to customers, with a view to influencing them to accept the rollover service, (c) conveying the impression to the customers that the recommendation was an obvious and uncontroversial course of action for the particular customer, when that may well not have been the case, and (d) doing so when Westpac knew that acceptance of the rollover service might have adverse consequences for the customer. 287 I do not agree with Westpac that, in the context of her Honour's conclusions (that is, assuming I am wrong about the financial product advice being personal advice), no finding of contravention of s 912A(1)(a) should have been made because the primary judge had not expressly found the conduct to be serious conduct that displayed a lack of sound ethical values and judgment of the kind referred to in Australian Securities and Investments Commission v Camelot Derivatives Pty Limited (In Liquidation); In the Matter of Camelot Derivatives Pty Limited (In Liquidation) [2012] FCA 414; (2012) 88 ACSR 206 and did not amount to sufficiently serious departures from reasonable standards of performance of advice of the kind referred to in Australian Securities and Investments Commission v Cassimatis (No 8) [2016] FCA 1023; (2016) 336 ALR 209. 288 The primary judge expressly referred to Westpac's submission as follows: Westpac contended that the evidence showed staff were specifically trained about the significance of the distinction between personal advice and general advice; the QM Framework explicitly recognised that distinction and recognised the need to abide by it as a "compliance" requirement; and Westpac's compliance monitoring was directed at, inter alia, identifying infractions of the prohibition against giving personal advice. If, despite these safeguards, personal advice was in fact given because the QM Framework was followed, it was despite Westpac's well-intentioned efforts to avoid that outcome. Westpac argued that this facts hardly connoted the serious conduct that would display a lack of sound ethical values and judgment of the kind referred to in Australian Securities and Investments Commission v Camelot Derivatives Pty Ltd (In Liq) [2012] FCA 414; (2012) 88 ACSR 206 ("Camelot"). 289 It is also apparent that her Honour was aware of and applied the relevant principles derived from the authorities which she reviewed at [417]-[429], including Camelot and Cassimatis. Her Honour was right to be satisfied that Westpac's conduct was sufficiently egregious to amount to a contravention of s 912A(1)(a). It is apparent from the evidence of Mr Cannons in particular that through the campaign by its callers, Westpac was trying to do indirectly what it (rightly) thought it could not do directly without risking giving personal advice when Westpac held no licence to do so. The matters to which the primary judge referred at [442]-[447] provided ample support for her conclusion at [448] that: While not dishonest, in my view, the matters demonstrate the adoption and implementation of the QM Framework approach failed to ensure that the "financial product advice", being a financial service covered by Westpac's AFSLs, was provided "efficiently, honestly and fairly" in contravention of s 912A(1)(a) of the Act. 290 In short, on the primary judge's approach to the facts (that is, that Westpac did not give personal advice) it can nevertheless be said that Westpac was guilty of what would colloquially be described as systemic sharp practice about what must have been one of their clients' major financial concerns, their superannuation. The fact that Westpac provided training to its staff to avoid giving personal advice does not alter this conclusion. Indeed, the content of the training exposes the problem with Westpac's campaign to obtain increased funds under management by the targeting of their existing superannuation customers in the manner described. The primary judge at [14] referred to a BT PowerPoint presentation dated January 2014 concerning the distinction between personal and general advice which included a case study of an appropriate response to the question whether the consultant recommended a rollover of superannuation into their BT account. The recommended response was: As I am only qualified to provide general advice, I am unable to advise you as to whether you should consolidate all these funds into BT Super. This would require personal advice from a qualified financial advisor who would consider information such as: whether you will have to pay any termination fees moving from existing funds whether you will lose any insurance benefits whether the fund you want to consolidate into has all the services you want whether employer can contribute to your chosen fund Would you like me to refer you to one of our financial advisors? If not, I can provide you with general advice regards the features and benefits of the BT Super Fund for you to consider. 291 It will be apparent that of the topics noted only one, loss of insurance benefits, appears in the calls in the present case. None of the customers, for example, were warned about the risk of termination fees or told they should consider whether the BT fund had all the services the customer wanted or whether their employer could contribute into the fund.

[1947] HCA 17

[1986] HCA 25

[1998] FCA 1655

[1989] SASC 1941

[1994] HCA 54

(1988) 13 NSWLR 661

(2012) 82 NSWLR 231

(2016) 336 ALR 209

(2012) 250 CLR 503

(2015) 256 CLR 1

(1998) 194 CLR 355

(2009) 239 CLR 27