Australian Securities and Investment Commission v Westpac Securities Administration Limited

Did Westpac's conduct involve the provision of financial product advice within the meaning of s 766B(1) of the Act?

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]).

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.

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.

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.

Did Westpac's conduct involve the provision of "personal advice" within the meaning of s 766B(3) of the Act?

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).

ASIC's appeal 354 By its appeal, ASIC contends that the primary judge erred in finding that the financial product advice provided by Westpac was not personal advice. ASIC's contention is that the primary judge erred in construing the word "considered" in s 766B(3) of the Act and also erred in the application of that word to the facts as found. 355 In relation to the construction of the word, ASIC submitted that the primary judge erred in construing the term as meaning "an active process of evaluating or reflecting upon" and "an active intellectual engagement with" the subject matter of the consideration "appropriate to the provision of financial product advice" (at [127]). ASIC submitted that her Honour imported into the ordinary meaning of the word "considered" both qualitative and temporal criteria as to the type and duration of time that is necessary to be undertaken for consideration. ASIC submitted that the word "considered" in s 766B(3) should be given its ordinary meaning: to think; to make allowance for; to pay attention to; to view attentively or to scrutinise.

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.

Meaning of s 766B(3) 360 As mentioned earlier, the arguments advanced by the parties with respect to s 766B(3), which involved the dissection of the provision into individual phrases separated from the provision as a whole, has a tendency to obscure rather than elucidate meaning. It is important to keep sight of the place of each word and phrase within the single sentence that is the statutory provision.

"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.

"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.

"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.

"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.

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.

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.

Did Westpac fail to act in the best interests of the customer in contravention of s 961K(2)?

Primary judge's conclusion 400 Section 961B, within Part 7.7A of the Act, applies to the provision of personal advice by an individual (referred to as the provider) to another person as a retail client (referred to as the client). Subsection 961B(1) states that the provider must act in the best interests of the client in relation to the advice. Subsection 961B(2) states that the provider satisfies the duty in subsection (1) if the provider proves it has done a number of things, specified in the subsection (2), that relate to the steps taken and matters considered in giving the advice. Subsection 961K(2), which is a civil penalty provision, provides (relevantly) that a financial services licensee contravenes s 961K(2) if a representative of the licensee contravenes s 961B and the licensee is the responsible licensee in relation to that contravention. 401 Although the primary judge found that Westpac did not give personal advice during the calls, her Honour nevertheless considered, on the assumption that that finding was wrong, whether Westpac contravened s 961K(2) by reason that the callers contravened s 961B. Her Honour found that, on the assumption that the calls constituted personal advice, Westpac (through its representatives making the calls) failed to act in the best interests of the customers to whom the advice was given and thereby contravened s 961B(1) (at [463] and [464]). Her Honour concluded that Westpac contravened that provision because the best interests of the customers could only be served by advice as to whether the rollover service was in their best interests and Westpac did not attempt to inform the customers whether it was in their best interests to accept the advice.

Westpac's notice of contention 402 By ground 6 of its amended notice of contention, Westpac contends that the primary judge should have found that, even if Westpac provided personal advice within the meaning of s 766B(3) of the Act, ASIC did not establish that Westpac had failed to act in the best interests of the customers in relation to that advice in contravention of s 961B(1) of the Act. 403 Westpac criticised the primary judge's reasoning for reversing the onus of proof of contravention of s 961B(1). Westpac submitted that the error in the primary judge's finding was to treat the possibility that advice may have been given which was contrary to the interests of customers as sufficient to establish the contravention. It submitted that s 961B(1) is directed to the substance of the advice provided and whether the provider acted in the client's best interests in giving it.

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.

Did Westpac fail to act in the best interests of the customer in contravention of s 961K(2)? 411 The facts found by the primary judge compel a conclusion that the callers contravened s 961B(1) and Westpac thereby contravened s 961B(1). 412 Westpac, through its representatives, failed to act in any of the ways referred to in paragraphs (b) to (g) of s 961B(2). The callers failed to obtain the most basic information that would have been required in order to act in the best interests of the customers. That information would likely have included the amounts held by the customers in each external superannuation fund; the investment options chosen by the customers in each external fund; the relative historical and expected future performance of the investments in those external funds compared with the equivalent BT fund option; the range, nature and scale of fees charged in each external fund compared with the BT fund; and the nature and amount of insurances provided by each external fund in comparison to the BT fund. The information was not sought because the object of the calls was not to act in the best interests of the client. The object of the calls, to influence customers to consolidate their external superannuation accounts into a Westpac account, was for the benefit of Westpac by increasing the funds under management in its superannuation funds. 413 I would therefore dismiss ground 6 of Westpac's amended notice of contention

Did Westpac fail to ensure that financial services were provided efficiently, honestly and fairly in contravention of s 912(1)(a) of the Act?

Primary judge's conclusion 414 Section 912A(1)(a) of the Act provides that a financial services licensee must do all things necessary to ensure that the financial services covered by the licence are provided efficiently, honestly and fairly. 415 The primary judge concluded that the implementation of the QM Framework in the cases of the 15 customers the subject of the proceeding, and more generally in connection with Westpac's campaign to encourage customers to accept the rollover service, involved a failure on the part of Westpac to ensure that the financial services covered by the licence were provided efficiently, honestly and fairly (at [443]). In support of that conclusion, her Honour referred to four matters: (a) First, Westpac made an implicit recommendation to customers to roll over their external superannuation accounts into their BT account without informing the customers about potentially relevant considerations for a prudent customer (at [444]). (b) Second, the QM Framework involved encouraging customers to proceed with the rollover through the use of the social proofing technique by which customers were told that their beliefs or reasons for consolidating their superannuation funds were commonly held. However, the fact that a customer's belief or rationale was commonly held was not a matter that would have provided a sound basis for the decision (at [445]). (c) Third, Westpac conveyed the impression to customers that the decision to roll over their external superannuation funds was an obvious and uncontroversial course of action for the customer, when that may well not have been the case (at [446]). (d) Fourth, while the QM Framework was a course of conduct that was admittedly in Westpac's self-interest and did not necessarily promote the best interests of the customers, the approach conveyed the impression that Westpac was assisting the customer (at [447]).

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.

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.

Conclusion 429 In conclusion, I would allow ASIC's appeal and dismiss Westpac's cross-appeal. I agree with the orders proposed by Allsop CJ. I certify that the preceding one hundred and twenty-six (126) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice O'Bryan.