FINDINGS AGAINST ZIB
76 ASIC seeks declarations that by Mobi's conduct ZIB contravened:
(1) s 961K(2) of the Corporations Act by reason of ZIB being the responsible licensee in relation to the contravening conduct of certain of its representatives (being the CSOs), who contravened s 961B of the Corporations Act by failing to act in the best interests of clients in the provision of personal advice to each of the Consumers in the Admitted Calls;
(2) s 961K(2) of the Corporations Act by reason of it being the responsible licensee in relation to the contravening conduct of certain of its representatives (being the CSOs), who contravened s 961H of the Corporations Act by failing to warn clients in the provision of personal advice to each of the Consumers in the Admitted Calls (where the advice was based on incomplete or inaccurate information relating to the clients' relevant personal circumstances);
(3) s 961L of the Corporations Act by failing to take reasonable steps to ensure that certain of its representatives (being the CSOs) complied with s 961B and s 961H of the Corporations Act in the provision of personal advice to each of the Consumers in the Admitted Calls;
(4) s 912A(1)(a) of the Corporations Act, by failing to do all things necessary to ensure that the financial services covered by the ZIB AFS Licence, provided by Mobi (including by the CSOs), were provided efficiently, honestly and fairly by reason of the matters set out in [100(1)] to [100(3)] below; and
(5) s 912A(1)(a) of the Corporations Act, specifically by reason of ZIB's contraventions of s 961K(2) and s 961L of the Corporations Act set out in [99(1)] to [99(3)] below.
77 It has already been established above that Mobi and ZIB gave personal advice to each Consumer in each of the seven Admitted Calls.
78 Section 961K(2) of the Corporations Act is a civil penalty provision. It provides that a financial services licensee will contravene the section if a representative other than an authorised representative of the licensee contravenes ss 961B, 961G, 961H or 961J of the Corporations Act. Section 961K provides:
961K Civil penalty provision - sections 961B, 961G, 961H and 961J
(1) A financial services licensee contravenes this section if the licensee contravenes section 961B, 961G, 961H or 961J.
Note: This subsection is a civil penalty provision (see section 1317E).
(2) A financial services licensee contravenes this section if:
(a) a representative, other than an authorised representative, of the licensee contravenes section 961B, 961G, 961H or 961J; and
(b) the licensee is the, or a, responsible licensee in relation to that contravention.
Note: This subsection is a civil penalty provision (see section 1317E).
79 Section 961B of the Corporations Act requires a provider of personal advice to act in the best interests of the client in relation to the advice. The section in full reads as follows:
961B Provider must act in the best interests of the client
(1) The provider must act in the best interests of the client in relation to the advice.
(2) The provider satisfies the duty in subsection (1), if the provider proves that the provider 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 inquiries 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 judgements in advising the client on the client's relevant circumstances;
(g) taken any other step that, at the time the advice is provided, would reasonably be regarded as being in the best interests of the client, given the client's relevant circumstances.
Note: The matters that must be proved under subsection (2) relate to the subject matter of the advice sought by the client and the circumstances of the client relevant to that subject matter (the client's relevant circumstances). That subject matter and the client's relevant circumstances may be broad or narrow, and so the subsection anticipates that a client may seek scaled advice and that the inquiries made by the provider will be tailored to the advice sought.
Advice given by Australian ADIs - best interests duty satisfied if certain steps are taken
(3) If:
(a) the provider is:
(i) an agent or employee of an Australian ADI; or
(ii) otherwise acting by arrangement with an Australian ADI under the name of the Australian ADI; and
(b) the subject matter of the advice sought by the client relates only to the following:
(i) a basic banking product;
(ii) a general insurance product;
(iii) consumer credit insurance;
(iv) a combination of any of those products;
the provider satisfies the duty in subsection (1) in relation to the advice given in relation to the basic banking product and the general insurance product if the provider takes the steps mentioned in paragraphs (2)(a), (b) and (c).
General insurance products - best interests duty satisfied if certain steps are taken
(4) To the extent that the subject matter of the advice sought by the client is a general insurance product, the provider satisfies the duty in subsection (1) if the provider takes the steps mentioned in paragraphs (2)(a), (b) and (c).
Regulations
(5) The regulations may prescribe:
(a) a step, in addition to or substitution for the steps mentioned in subsection (2), that the provider must, in prescribed circumstances, prove that the provider has taken, to satisfy the duty in subsection (1); or
(b) that the provider is not required, in prescribed circumstances, to prove that the provider has taken a step mentioned in subsection (2), to satisfy the duty in subsection (1); or
(c) circumstances in which the duty in subsection (1) does not apply.
80 The obligation in s 961B(1) is concerned with the processes carried out by an adviser in relation to providing personal advice. Its concern is with the conduct of the advice provider and not the content of the advice ultimately given.
81 Justice O'Bryan considered the construction of s 961B in Australian Securities and Investments Commission v Westpac Securities Administration Ltd (2019) 272 FCR 170. His Honour said:
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 subs (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 subs (1), subs (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 subs (1) if the provider does the things stipulated in subs (2). It is implicit in that language that the legislature considered that the obligation imposed by subs (1) requires the types of actions referred to in subs (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.
82 See also Australian Securities and Investments Commission v Financial Circle Pty Ltd [2018] FCA 1644; 131 ACSR 484, O'Callaghan J (at [129]).
83 It has been established that, in respect of each Admitted Call, the CSO did not do the things set out at [58(1)] to [58(9)] above. Some of those matters are listed in s 961B(2) of the Corporations Act.
84 No evidence has been tendered by the defendants to establish that the CSO in each Admitted Call did each of the things that s 961B(2) requires in order for the CSO to discharge his or her duty under s 961B(1), or that they did any other thing that may discharge the duty. ZIB further admits that each CSO did not act in the best interests of the Consumer in respect of each Admitted Call in relation to the personal advice provided to that Consumer in contravention of s 961B(1). ZIB's contravention of s 961K(2) in respect of each CSOs breach is therefore established.
85 Section 961H of the Corporations Act provides:
961H Resulting advice still based on incomplete or inaccurate information
(1) If it is reasonably apparent that information relating to the objectives, financial situation and needs of the client on which the advice is based is incomplete or inaccurate, the provider must, in accordance with subsections (2) and (3), warn the client that:
(a) the advice is, or may be, based on incomplete or inaccurate information relating to the client's relevant personal circumstances; and
(b) because of that, the client should, before acting on the advice, consider the appropriateness of the advice, having regard to the client's objectives, financial situation and needs.
(2) The warning must be given to the client at the same time as the advice is provided and, subject to subsection (3), by the same means as the advice is provided.
(3) If a Statement of Advice is the means by which the advice is provided, or is given to the client at the same time as the advice is provided, the warning may be given by including it in the Statement of Advice.
Note: The Statement of Advice must at least contain a record of the warning (see paragraphs 947B(2)(f) and 947C(2)(g)).
(4) If 2 or more individuals provide the advice and one of those individuals provides a warning in accordance with this section, the other individuals are taken to have complied with this section.
(5) Nothing in this section affects the duty of the provider under section 961B to make reasonable inquiries to obtain complete and accurate information.
Note: A responsible licensee or an authorised representative may contravene a civil penalty provision if a provider fails to comply with this section (see sections 961K and 961Q). The provider may be subject to a banning order (see section 920A).
86 Section 961C provides that something is "reasonably apparent":
… if it would be apparent to a person with a reasonable level of expertise in the subject matter of the advice that has been sought by the client, were that person exercising care and objectively assessing the information given to the provider by the client.
87 As identified earlier in these reasons on each occasion that a CSO provided personal advice to a Consumer, it was reasonably apparent to each CSO during the relevant Admitted Call that the information available to the CSO relating to the Consumer's objectives, financial situation and needs was incomplete and inaccurate, including that the CSOs lacked information as to the particular factors listed at [59(1)] to [59(7)] above.
88 By reason of those circumstances, each CSO was required to give the warning to which s 961H(1) refers. Mobi and ZIB admit that each CSO in each Admitted Call failed to warn the Consumer during the relevant call (or at all) of the matters set out at [87] and [59(1)] to [59(7)] above, in contravention of s 961H. ZIB's contravention of s 961K(2) in respect of the CSOs breach of s 961H is therefore established.
89 Section 961L of the Corporations Act provides:
961L Licensees must ensure compliance
A financial services licensee must take reasonable steps to ensure that representatives of the licensee comply with sections 961B, 961G, 961H and 961J.
Note: This section is a civil penalty provision (see section 1317E).
90 In Australian Securities and Investments Commission v AMP Financial Planning Pty Ltd (No 2) [2020] FCA 69; 377 ALR 55, his Honour Justice Lee made three observations of s 961L:
105 First, the word 'ensure' is forward-looking. It is directed to the taking of steps to achieve compliance with certain statutory norms (including the relevant best interests obligations) before any particular instance of non-compliance has arisen. Although the seriousness of the obligation is amplified by the use of the word 'ensure' (see Invensys Australia Superannuation Fund Pty Ltd v Austrac Investments Ltd (2006) 15 VR 87; [2006] VSC 112 at [105] (Byrne J)), the onerousness of the standard is moderated by the requirement to take 'reasonable steps'. Such language of 'reasonable steps' is redolent of defences to liability employed in the Act (such as the safe harbour provisions in Ch 5) and other legislation, although in this case the absence of reasonable steps is itself an element of any contravention.
106 Secondly, the text of s 961L makes its focus the conduct of the licensee, not the representative, and whether the licensee has taken 'reasonable steps' (albeit these steps are directed at the conduct of their representatives). Critically, there is nothing in the text of s 961L that makes a contravention of the relevant best interests obligations a pre-requisite to a contravention of s 961L. Indeed, it was common ground between the parties that a contravention of s 961L may arise even if there has been no contravention of the relevant best interests obligations. This is easily imagined: a licensee could run a 'bucket shop' without taking any reasonable steps to put in place adequate safeguards but may, by luck, have conscientious representatives who do their job. This would not inoculate the licensee from liability. Of course, the converse may also be the case, and the provision does not visit liability on a conscientious licensee, who has done all that could reasonably be expected, by reason of a representative unexpectedly going rogue.
107 Thirdly, the relevant best interests obligations to which s 961L refers fall under separate subdivision headings and each prescribe distinct statutory norms of conduct for the providers of financial advice, broadly summarised as: (a) acting in the best interests of the client (s 961B); (b) providing advice only where it is appropriate to the client (s 961G); (c) warning clients that advice is based on incomplete or inaccurate information (s 961H, not being in issue in this case); and (d) giving priority to the client's interests when giving the advice (s 961J). Although the obligations relate to one another and breach of one may, depending upon the circumstances, amount to a breach of another, their particular content and focus differs.
91 In that case, his Honour continued:
121 AMPFP's submissions should be generally accepted. The statutory context in which s 961L operates supports AMPFP's approach in that s 961L can be contrasted with so-called 'look through' provisions, such as s 961K, which impose liability on a licensee where its representatives (other than authorised representatives) engage in a breach of the best interest obligations; it was open to Parliament to cast s 961L in identical terms if it intended it to have that outcome (subject to a reasonableness qualification) and the fact that it did not is a strong indication that the approach for which ASIC contends is incorrect.
122 As for the extrinsic materials, I consider them to be more or less neutral and of no particular assistance. There can be no doubt the motherhood statements at page 3 of the EM indicate that one of the purposes of the Future of Financial Advice (FOFA) reforms (of which s 961L is a part), was to build trust and confidence in the financial advice industry by requiring financial advisers to act in the best interests of their clients and to place the interests of their clients ahead of their own when providing personal advice to retail clients. It might be said that ASIC's preferred construction would further the purpose of the statute by reinforcing the new statutory obligations. But legislation rarely pursues a single purpose at all costs (Carr v Western Australia (2007) 232 CLR 138; 239 ALR 415; [2007] HCA 47 at [5] (Gleeson CJ)). I am not persuaded that the use of the language of 'flow through' in the relevant parts of the EM assists ASIC's construction in any meaningful way.
123 As explained above, the actual conduct to which s 961L is directed is the taking of reasonable steps by the licensee, not the provision of advice by representatives (being the conduct to which the best interests provisions are directed). It necessarily follows that the process of determining whether a contravention has occurred is assessed independently as to whether there have been particular contraventions by representatives. Properly understood, what we are concerned with is a 'failure to perform' norm.
92 Mobi and ZIB admit that, contrary to ZIB's obligations in s 961L of the Corporations Act, it did not take reasonable steps to ensure that the CSOs (as its representatives) complied with s 961B and s 961H of the Corporations Act. More specifically, they admit that:
(1) the CSOs failed to comply with their obligations under s 961B and s 961H (at [57] to [61] above);
(2) ZIB failed to take steps to ensure the CSOs took the "best interests" steps (at [58] above); and
(3) ZIB failed to take steps to ensure that the CSOs gave the warnings identified (at [57] to [61] above).
93 Those admissions fairly reflect the facts set out thus far in these reasons. I am satisfied that ZIB contravened s 961L of the Corporations Act by reason of those facts.
94 Section 912A of the Corporations Act in force relevantly provides:
912A General obligations
(1) A financial services licensee must:
(a) do all things necessary to ensure that the financial services covered by the licence are provided efficiently, honestly and fairly; and
(aa) have in place adequate arrangements for the management of conflicts of interest that may arise wholly, or partially, in relation to activities undertaken by the licensee or a representative of the licensee in the provision of financial services as part of the financial services business of the licensee or the representative; and
(b) comply with the conditions on the licence; and
(c) comply with the financial services laws; and
(ca) take reasonable steps to ensure that its representatives comply with the financial services laws; and
(d) subject to subsection (4) - - have available adequate resources (including financial, technological and human resources) to provide the financial services covered by the licence and to carry out supervisory arrangements; and
(e) maintain the competence to provide those financial services; and
(f) ensure that its representatives are adequately trained, and are competent, to provide those financial services; and
(g) if those financial services are provided to persons as retail clients - have a dispute resolution system complying with subsection (2); and
(h) subject to subsection (5) - have adequate risk management systems; and
(j) comply with any other obligations that are prescribed by regulations made for the purposes of this paragraph.
(2) To comply with this subsection, a dispute resolution system must consist of:
(a) an internal dispute resolution procedure that:
(i) complies with standards, and requirements, made or approved by ASIC in accordance with regulations made for the purposes of this subparagraph; and
(ii) covers complaints against the licensee made by retail clients in connection with the provision of all financial services covered by the licence; and
(b) membership of one or more external dispute resolution schemes that:
(i) is, or are, approved by ASIC in accordance with regulations made for the purposes of this subparagraph; and
(ii) covers, or together cover, complaints (other than complaints that may be dealt with by the Superannuation Complaints Tribunal established by section 6 of the Superannuation (Resolution of Complaints) Act 1993) against the licensee made by retail clients in connection with the provision of all financial services covered by the licence.
(3) Regulations made for the purposes of subparagraph (2)(a)(i) may also deal with the variation or revocation of:
(a) standards or requirements made by ASIC; or
(b) approvals given by ASIC.
(4) Paragraph (1)(d):
(a) does not apply to a body regulated by APRA, unless the body is an RSE licensee; and
(b) does not apply to an RSE licensee, unless the RSE licensee is also the responsible entity of a registered scheme.
(5) Paragraph (1)(h):
(a) does not apply to a body regulated by APRA, unless the body is an RSE licensee that is also the responsible entity of a registered scheme; and
(b) does not apply to an RSE licensee that is also the responsible entity of a registered scheme, to the extent that the risk relates solely to the operation of a regulated superannuation fund by the RSE licensee.
(6) In this section:
regulated superannuation fund has the same meaning as in the Superannuation Industry (Supervision) Act 1993.
RSE licensee has the same meaning as in the Superannuation Industry (Supervision) Act 1993.
95 It is convenient to adopt the survey of authorities pertaining to s 912A(1)(a) accepted by Foster J (by adopting ASIC's submissions) in Australian Securities and Investments Commission v Camelot Derivatives Pty Ltd (in liq) [2012] FCA 414; 88 ACSR 206 (at [69]):
(a) The 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: Story v National Companies and Securities Commission (1988) 13 NSWLR 661 at 672; 13 ACLR 225 at 234-5. ([126])
(b) The words 'efficiently, honestly and fairly' connote a requirement of competence in providing advice and in complying with relevant statutory obligations: Re Hres and Australian Securities and Investments Commission (2008) 105 ALD 124; [2008] AATA 707 at [237]. They also connote an element not just of even handedness in dealing with clients but a less readily defined concept of sound ethical values and judgment in matters relevant to a client's affairs: Re Hres and Australian Securities and Investments Commission (2008) 105 ALD 124; [2008] AATA 707 at [237]. ([127])
(c) The word 'efficient' refers to a person who performs his duties efficiently, meaning the person is adequate in performance, produces the desired effect, is capable, competent and adequate: Story v National Companies and Securities Commission (1988) 13 NSWLR 661 at 672; 13 ACLR 225 at 234-5. Inefficiency may be established by demonstrating that the performance of a licensee's functions falls short of the reasonable standard of performance by a dealer that the public is entitled to expect: Story v National Companies and Securities Commission (1988) 13 NSWLR 661 at 679; 13 ACLR 225 at 241. ([128])
(d) It is not necessary to establish dishonesty in the criminal sense: R J Elrington Nominees Pty Ltd v Corporate Affairs Commission (SA) (1989) 1 ACSR 93 at 110. The word 'honestly' may 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. ([129])
(e) The word 'honestly' when used in conjunction with the word 'fairly' tends to give the flavour of a person who not only is not dishonest, but also a person who is ethically sound: Story v National Companies and Securities Commission (1988) 13 NSWLR 661 at 672; 13 ACLR 225 at 234-5. ([130])
96 The financial services authorised by the ZIB AFS Licence included the provision of financial product advice in respect of superannuation and certain life products and dealing in (by applying for, acquiring, varying or disposing of) superannuation and certain life products to retail and wholesale clients.
97 Mobi was plainly a representative of ZIB within the meaning of s 910A of the Corporations Act. Mobi (including by its CSOs) provided the financial services described in these reasons, including "dealing" and providing "financial product advice" as described in [18] and [19] above. The financial services were covered by the ZIB AFS Licence.
98 ZIB, as a financial services licensee and as responsible licensee, is liable under s 961K(2) of the Corporations Act for contraventions by its representatives, namely the CSOs, of s 961B and s 961H of the Corporations Act. ZIB was required by s 961L of the Corporations Act to take all reasonable steps to ensure its representatives (namely the CSOs) complied with s 961B and s 961H of the Corporations Act. It was required by s 912A(1)(a) of the Corporations Act to do all things necessary to ensure that the financial services covered by the ZIB AFS Licence were provided efficiently, honestly and fairly.
99 Contrary to s 961L of the Corporations Act, ZIB did not take all reasonable steps to ensure that representatives of ZIB, namely the CSOs, complied with s 961B and s 961H of the Corporations Act. In this regard, in respect of the Admitted Calls:
(1) the CSOs failed to comply with s 961B and s 961H of the Corporations Act, in the manner described in [57] to [61] above;
(2) ZIB failed to take steps to ensure the CSOs took the "best interests" steps set out in [58] above; and
(3) ZIB failed to take steps to ensure the CSOs gave the warnings set out in [60] above.
100 In relation to Mobi's promotion of the Fund, the financial services covered by the ZIB AFS Licence, provided by Mobi (including through the CSOs), were not provided efficiently, honestly and fairly, as ZIB, in relation to the Admitted Calls:
(1) failed to ensure that no false or misleading representations were made by the CSOs to Consumers;
(2) failed to ensure that no personal advice was given by the CSOs to the Consumers;
(3) failed to ensure that the CSOs acted in the best interests of the Consumers in relation to the provision of personal advice, in accordance with s 961B of the Corporations Act;
(4) failed to ensure that the CSOs provided the warning required by s 961H of the Corporations Act to the Consumers; and
(5) failed to ensure that Mobi gave to the Consumers Statements of Advice in accordance with s 946A of the Corporations Act and meeting the requirements of s 947D of the Corporations Act.
101 Mobi and ZIB admit that, as a financial services licensee, ZIB was required by s 912A(1)(a) to do all things necessary to ensure that the financial services provided by Mobi (including by the CSOs) that were covered by the ZIB AFS Licence were provided efficiently, honestly and fairly. They further admit that, by reason of ZIB's conduct, the financial services provided during the Admitted Calls were not provided efficiently, honestly and fairly, as ZIB:
(1) failed to ensure that no false or misleading representations were made by the CSOs to the Consumers;
(2) failed to ensure that no personal advice was given by the CSOs to the Consumers;
(3) failed to ensure that the CSOs acted in the best interests of the Consumers in relation to the provision of personal advice, in accordance with s 961B of the Corporations Act;
(4) failed to ensure that the CSOs provided the warning required by s 961H of the Corporations Act to the Consumers; and
(5) failed to ensure that Mobi gave to the Consumers Statements of Advice in accordance with s 946A of the Corporations Act and which met the requirements of s 947D of the Corporations Act.
102 ZIB admits that it did not take reasonable steps to ensure that the CSOs complied with s 961B and s 961H of the Corporations Act. It accepts that the CSOs failure to deliver financial services in a way that was efficient, honest and fair occurred in conjunction with its independent failure to do all things necessary to ensure that did not occur. I am satisfied that its acts and omissions fall short of the "sound ethical values and judgment" that are expected of a financial services licensee, and constitutes a "serious departure from reasonable standards of performance of advice": Camelot Derivatives, Foster J (at [69(b)]); Australian Securities and Investments Commission v Cassimatis (No 8) [2016] FCA 1023; 336 ALR 209, Edelman J (at [673]).
103 I find that the financial services provided by Mobi were not provided efficiently, honestly and fairly, that ZIB failed to discharge its obligation arising under s 912A(1)(a) of the Corporations Act, and that it is appropriate to make declarations of those contraventions.