Deep Investments Pty Ltd v Casey

Solicitor for the First, Second and Third Respondents: MinterEllison

Counsel for the Fourth Respondent: Mr AC Harding

Solicitor for the Fourth Respondent: K&L Gates

Counsel for the Fifth, Sixth and Seventh Respondents: Mr A McGrath SC with Mr SE Gray

Solicitor for the Fifth, Sixth and Seventh Respondents: Moray & Agnew

BETWEEN: DEEP INVESTMENTS PTY LTD ACN 000 339 319 Applicant

CBC PARTNERS PTY LTD ACN 104 815 483 (and others named in the Schedule) Third Respondent

GLEESON J: 1 On 4 May 2018, I gave my judgment on the respondents' various interlocutory applications for summary dismissal of the proceeding or, alternatively, for orders that the applicant's statement of claim be struck out in whole or part: Deep Investments Pty Ltd v Casey [2018] FCA 603. 2 By order 2, I granted leave to the applicant to file and serve an amended statement of claim which repleads, relevantly, the claims based on contraventions of s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth). 3 By order 3, made on that date, I granted the parties liberty to apply for further orders to give effect to these reasons. 4 In the course of the various parties exercising that liberty, it was brought to my attention that there is an inconsistency between [13(9)] and [228] of my reasons for judgment, concerning whether the applicant should be granted leave to replead the claims based on contraventions of s 12DA. There is an error in [13(9)], which should read: The statement of claim does not disclose a reasonable claim or cause of action in relation to the alleged breaches of fiduciary duty by the CBC respondents and Mr Emanuel concerning avoidance of conflicts or the alleged contraventions of s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) ("ASIC Act"), however, leave should be granted to replead those claims or causes of action. 5 I will correct my 4 May 2018 reasons accordingly. 6 On behalf of the fourth respondent, Mr Emanuel, it was also observed that I had not dealt with a submission to the effect that s 12DA was not capable of being engaged in relation to the conduct alleged against him. That bare proposition was stated in para 56 of the written submissions made on Mr Emanuel's behalf without elaboration. 7 In oral submissions, Mr Harding, counsel for Mr Emanuel, made the following submission: Finally, dealing with the topic of misleading and deceptive conduct, those allegations are raised against Mr Emanuel at paragraphs 52 to 55. There are two short submissions about these paragraphs. The first is that a legal adviser engaged to provide legal advice in connection with a dispute is not providing financial services and is not engaging in conduct in relation to financial services. And the applicant has pointed to no case that would support the proposition that that could arguably be the case. 8 Section 12DA(1) provides: (1) A person must not, in trade or commerce, engage in conduct in relation to financial services that is misleading or deceptive or is likely to mislead or deceive. 9 The conduct pleaded against Mr Emanuel is set out at para 50 of the statement of claim and comprises alleged failures to inform and advise Deep Investments of certain matters. 10 The words "in relation to" in s 12DA(1) are words of connection, which gather meaning from their context. In Travelex Ltd v Commissioner of Taxation [2010] HCA 33; (2010) 241 CLR 510 at [25], French CJ and Hayne J said: It may readily be accepted that "in relation to" is a phrase that can be used in a variety of contexts, in which the degree of connection that must be shown between the two subject matters joined by the expression may differ. It may also be accepted that "the subject matter of the enquiry, the legislative history, and the facts of the case" are all matters that will bear upon the judgment of what relationship must be shown in order to conclude that there is a supply "in relation to" rights. 11 It is not obvious that s 12DA(1) must be limited to conduct that occurs in the course of the provision of financial services, or that it cannot apply to a person's conduct that concerns financial services provided by a third party. Accordingly, I am not prepared to conclude, on a summary basis, that Mr Emanuel's conduct, which arguably concerned the provision of financial services by Mr Robinson and Raven, could not be conduct in relation to financial services within the meaning of s 12DA(1). I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gleeson.

SCHEDULE OF PARTIES NSD 2189 of 2016 Respondents Fourth Respondent: KEVIN EMANUEL Fifth Respondent: SIMON ROBINSON Sixth Respondent: RAVEN CAPITAL PTY LTD ACN 149 962 649 Seventh Respondent: QWL PTY LTD ACN 096 284 383