Wealthsure Pty Ltd v Selig

The Primary Judge's Reasons 39 The primary judge noted that the contributory negligence and proportionate liability provisions in the Corporations Act, the ASIC Act, and the then Trade Practices Act 1974 (Cth) (the "Trade Practices Act"), were introduced by the Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004 (Cth). Schedule 3 introduced s 1041I(1B) and ss 1041L to 1041S into the Corporations Act, s 12GF(1B) and ss 12GP to 12GW into the ASIC Act, and s 82(1B) and ss 87CB to 87CI into the Trade Practices Act. 40 The primary judge said that the amendments in the Corporations Act and the ASIC Act were in similar terms and that, in those circumstances, he was able to limit his consideration to the provisions of the Corporations Act. 41 The primary judge referred to a number of general features of Part 7.10 of the Corporations Act, which Part deals with market misconduct and other prohibited conduct relating to financial products and financial services. His Honour referred to the definition of the terms: financial products (s 763A); financial services (s 766A); and financial product advice (s 766B) (as to the latter, see also the definition in s 12BAB(5) of the ASIC Act). The primary judge noted that there was no dispute that the investment in Neovest was in relation to a financial product or financial service. 42 Section 1041I provides a right of action to a person who has suffered loss or damage by conduct of another person in contravention of ss 1041E, 1041F, 1041G or 1041H. Section 1041I(1B) is important because it provides for a claimant's lack of care to be taken into account in certain circumstances. The full terms of s 1041I are as follows: 1041I Civil action for loss or damage for contravention of sections 1041E to 1041H (1) A person who suffers loss or damage by conduct or another person that was engaged in in contravention of section 1041E, 1041F, 1041G or 1041H may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention, whether or not that other person or any person involved in the contravention has been convicted of an offence in respect of the contravention. (1A) Subsection (1) has effect subject to section 1044B. Note: Section 1044B may limit the amount that the person may recover for a contravention of section 1041H (Misleading or deceptive conduct) from the other person or from another person involved in the contravention. (1B) Despite subsection (1), if: (a) a person (the claimant) makes a claim under subsection (1) in relation to: (i) economic loss; or (ii) damage to property; caused by conduct of another person (the defendant) that was done in contravention of section 1041H; and (b) the claimant suffered the loss or damage: (i) as a result partly of the claimant's failure to take reasonable care; and (ii) as a result partly of the conduct referred to in paragraph (a); and (c) the defendant: (i) did not intend to cause the loss or damage; and (ii) did not fraudulently cause the loss or damage; the damages that the claimant may recover in relation to the loss or damage are to be reduced to the extent to which the court thinks just and equitable having regard to the claimant's share in the responsibility for the loss or damage. Note: Division 2A also applies proportionate liability to a claim for damages under this section for a contravention of section 1041H. (2) An action under subsection (1) may be begun at any time within 6 years after the day on which the cause of action arose. (3) This section does not affect any liability that a person has under any other law. (4) Section 1317S (which provides for relief from liability) applies in relation to liability under subsection (1) as if: (a) the sections referred to in subsection (1) were civil penalty provisions; and (b) proceedings under subsection (1) were eligible proceedings. Note: Relief from liability under this section may also be available (depending on the circumstances) under Division 4. 43 There was no dispute before the primary judge but that Mr and Mrs Selig were claiming economic loss and that Wealthsure and Mr Bertram did not intend to cause the loss or damage and did not fraudulently cause the loss or damage. 44 Mr and Mrs Selig submitted at trial that s 1041I(1B) had no application to their claim pursuant to s 953B, or to their claim for breach of contract. The primary judge held that s 1041I(1B) only applied to a claim for a contravention of s 1041H, and did not apply to other statutory causes of action under the Corporations Act, or causes of action at common law. He said (at [1045]): Section 1041(1B) [sic] has been deliberately drawn to only apply to a claim under s 1041H. 45 The primary judge noted that his conclusion was supported by the decision of Rares J in Wingecarribee Shire Council and Others v Lehman Brothers Australia Ltd (ACN 066 797 760) (In Liq) (2012) 301 ALR 1; [2012] FCA 1028, at [1118] and [1170], where his Honour dealt with the equivalent subsection in the ASIC Act (i.e., s 12GF(1B)). 46 Wealthsure and Mr Bertram do not challenge these conclusions on the appeal. They do contend that Mr and Mrs Selig's lack of care should be taken into account in determining the damages awarded against them, but not because the primary judge erred in his construction of s 1041I(1B). They submit that Mr and Mrs Selig's contributory negligence is relevant because of s 1041N(3)(a). 47 The primary judge turned to consider whether the proportionate liability provisions were relevant. Division 2A contains the principle of proportionate liability, and the Division is relevantly in the following terms: Division 2A-Proportionate liability for misleading and deceptive conduct 1041L Application of Division (1) This Division applies to a claim (an apportionable claim) if the claim is a claim for damages made under section 1041I for: (a) economic loss; or (b) damage to property; caused by conduct that was done in a contravention of section 1041H. (2) For the purposes of this Division, there is a single apportionable claim in proceedings in respect of the same loss or damage even if the claim for the loss or damage is based on more than one cause of action (whether or not of the same or a different kind). (3) In this Division, a concurrent wrongdoer, in relation to a claim, is a person who is one of 2 or more persons whose acts or omissions (or act or omission) caused, independently of each other or jointly, the damage or loss that is the subject of the claim. (4) For the purposes of this Division, apportionable claims are limited to those claims specified in subsection (1). (5) For the purposes of this Division, it does not matter that a concurrent wrongdoer is insolvent, is being wound up or has ceased to exist or died. 1041M Certain concurrent wrongdoers not to have benefit of apportionment (1) Nothing in this Division operates to exclude the liability of a concurrent wrongdoer (an excluded concurrent wrongdoer) in proceedings involving an apportionable claim if: (a) the concurrent wrongdoer intended to cause the economic loss or damage to property that is the subject of the claim; or (b) the concurrent wrongdoer fraudulently caused the economic loss or damage to property that is the subject of the claim. (2) The liability of an excluded concurrent wrongdoer is to be determined in accordance with the legal rules (if any) that (apart from this Division) are relevant. (3) The liability of any other concurrent wrongdoer who is not an excluded concurrent wrongdoer is to be determined in accordance with the provisions of this Division. 1041N Proportionate liability for apportionable claims (1) In any proceedings involving an apportionable claim: (a) the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of the defendant's responsibility for the damage or loss; and (b) the court may give judgment against the defendant for not more than that amount. (2) If the proceedings involve both an apportionable claim and a claim that is not an apportionable claim: (a) liability for the apportionable claim is to be determined in accordance with the provisions of this Division; and (b) liability for the other claim is to be determined in accordance with the legal rules, if any, that (apart from this Division) are relevant. (3) In apportioning responsibility between defendants in the proceedings: (a) the court is to exclude that proportion of the damage or loss in relation to which the plaintiff is contributorily negligent under any relevant law; and (b) the court may have regard to the comparative responsibility of any concurrent wrongdoer who is not a party to the proceedings. (4) This section applies in proceedings involving an apportionable claim whether or not all concurrent wrongdoers are parties to the proceedings. (5) A reference in this Division to a defendant in proceedings includes any person joined as a defendant or other party in the proceedings (except as a plaintiff) whether joined under this Division, under rules of court or otherwise. … 1041P Contribution not recoverable from defendant A defendant against whom judgment is given under this Division as a concurrent wrongdoer in relation to an apportionable claim: (a) cannot be required to contribute to any damages or contribution recovered from another concurrent wrongdoer in respect of the apportionable claim (whether or not the damages or contribution are recovered in the same proceedings in which judgment is given against the defendant); and (b) cannot be required to indemnify any such wrongdoer. … 48 For reasons which will become clear, a significant point made by the primary judge in the context of his consideration of the proportionate liability provisions was that Mr and Mrs Selig's claim for loss and damage was the same in relation to the various causes of action and in relation to the various defendants at trial. In other words, Mr and Mrs Selig did not claim that different loss and damage flowed from different causes of action against the one wrongdoer, or that different loss and damage flowed from the conduct of different wrongdoers. There is an appeal against damages, but that does not affect the proposition of present relevance, which is as I have described it. The primary judge expressed the proposition in various ways. He noted that Mr and Mrs Selig did not claim that their loss and damage had any discrete relationship as between the parties they sued. He said that Mr and Mrs Selig had not discriminated in the damages claimed against the directors, Mr Norton, Norton Capital and Neovest on the one hand, and Wealthsure and Mr Bertram on the other. The primary judge made a similar point a little later on in his reasons when he noted that s 1041L(2) referred to the same loss or damage, and that loss or damage in this context meant not the damages ultimately awarded by the Court, but rather, in the context of economic loss, the harm to the plaintiff's economic interests (Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd and Others (2013) 247 CLR 613; [2013] HCA 10, at 628-629, [24] per French CJ, Hayne and Kiefel JJ). Having made that point, the primary judge said that there was no argument in the case before him that Mr and Mrs Selig had not suffered "the single loss or damage, i.e. the same loss or damage". 49 The primary judge said that the weight of authority favoured the submission of Wealthsure and Mr Bertram that there was a single apportionable claim where there was the same loss and damage, and he referred to that authority. He noted that there was authority to the contrary effect. He quoted at length from a decision of Hollingworth J in Keith Woods v Rodney Mario De Gabriele and Others [2007] VSC 177, at [8]-[9], [24]-[30] and [33]-[36]. The primary judge said that he had reached the view that the statutory causes of action, other than the cause of action based on s 1041H, and the common law causes of action were not subject to the proportionate liability provisions. 50 The primary judge's reasoning was as follows. The exceptions referred to in s 1041H(3) all related to sections where the Parliament had identified the persons who could be held liable, and he said that, in relation to s 670A that is done by s 670B, in relation to s 728 that is done by s 729, in relation to s 953A that is done by s 953B, and finally, in relation to s 1022A that is done by s 1022B. In those circumstances, there was no need for the general proscription of conduct contained in s 1041H(1). The sections excluded from the operation of s 1041H target particular persons and "it would be inappropriate to proscribe that conduct in general terms because it would apply to any person who has engaged in the proscribed conduct". The primary judge also referred to s 1041N(3). His Honour considered that, if his interpretation of s 1041I(1B) was correct, it would mean that s 1041N(3) would be unworkable if it was given the meaning for which Wealthsure and Mr Bertram contended. It would mean that, although Mr and Mrs Selig's damages under s 1041I(1B) would only be reduced in respect of s 1041IH conduct, "the resultant award after reduction would be apportioned without reference to the particular cause of action relied upon". The primary judge also said that there was support for his construction in the wording of s 1041L(1) (conduct in contravention of s 1041H), s 1041L(3) (acts or omissions not causes of action), and s 1041L(4). 51 The primary judge concluded that only those claims under s 1041H that involve conduct by concurrent wrongdoers are apportionable. 52 The primary judge addressed apportionment in case the matter went further. In terms of relative culpability, he identified the failure of the various parties. First, as far as Wealthsure and Mr Bertram were concerned, the primary judge said that Mr and Mrs Selig would not have invested in Neovest but for their advice, and he said that no reasonably prudent financial adviser could have recommended to an investor that he or she purchase shares in Neovest. Secondly, as far as the directors were concerned, he said that their culpability lay in failing to identify in the two prospectuses issued by Neovest the financial position of Neovest's principal debtors, being the Neolido group of companies. Thirdly, as far as Mr Norton and Norton Capital were concerned, the primary judge noted that they became involved in September 2004 and promised to market Neovest on terms very favourable to them, namely a commission of 13%. Mr Norton failed to carry out a proper due diligence report. He should have been able to identify the financial position of the Neolido group of companies, and, knowing the investment was risky, he should have undertaken various steps to protect investors against the risk. Mr Norton and Norton Capital approved the product, issuing a research report and a flyer. 53 The primary judge said that the most culpable parties were Wealthsure and Mr Bertram. They were in a position to assess the problems with the Neolido group of companies. They were aware that an investment in Neovest was a high risk investment, and they marketed the investment to Mr and Mrs Selig when it was never suitable to the latter's needs. No prudent financial adviser could give the advice Wealthsure and Mr Bertram gave to Mr and Mrs Selig. The primary judge considered that the culpability of Wealthsure and Mr Bertram far exceeded that of the other parties. He also considered that the culpability of Mr Norton and Norton Capital exceeded that of the directors. As between the parties liable to Mr and Mrs Selig, he would have apportioned liability 60% to Wealthsure and Mr Bertram, 25% to Mr Norton and Norton Capital, and 15% to the directors. He said that he would not attribute any culpability to Neovest as it acted at the direction of its directors. 54 The primary judge rejected a submission that the causes of action arising under State law were apportionable under the Civil Liability Act 2003 (Qld). That conclusion is not challenged on appeal and there is no need to consider it any further. 55 The primary judge concluded in relation to those claims where contributory negligence was relevant, which he considered to be tort, contract and s 1041H, that a reduction of 15% was appropriate. Although apportionment was appropriate in relation to the claims under s 1041H, it was not appropriate in relation to the other successful claims of Mr and Mrs Selig, and the primary judge said that he would not make any declarations of apportionment.

The Arguments and their Resolution 56 Wealthsure and Mr Bertram submitted that the primary judge erred in his construction of the provisions of Division 2A of the Corporations Act and, in particular, ss 1041L and 1041N, and the equivalent sections in the ASIC Act (Sub-Division GA, ss 12GP and 12GR). They submitted that the primary judge overlooked s 1041L(2). They submitted that they, the directors, Mr Norton and Norton Capital, were concurrent wrongdoers because each of them was a person whose acts or omissions caused, independently of each other, the damage or loss that was the subject of Mr and Mrs Selig's claim. 57 Wealthsure and Mr Bertram submitted that s 1041L(2) means that there is a single apportionable claim in respect of the same loss or damage. The loss or damage claimed by Mr and Mrs Selig in this case is relevantly the same loss or damage. Section 1041L(2) means also that there is a single apportionable claim, even if the claim is based on more than one cause of action (whether or not of the same or a different kind). In this case, there were a number of different causes of action against each of the defendants at trial who were found liable. Wealthsure and Mr Bertram submitted that this did not prevent Mr and Mrs Selig's claim from being a single apportionable claim. Wealthsure and Mr Bertram referred to s 1041L(2) as the "umbrella provision", and submitted that, as long as there was a claim for damages made under s 1041I for economic loss or damage to property caused by conduct that was done in contravention of s 1041H, and the same loss and damage, the subsequent section which actually provides for proportionate liability (i.e. s 1041N) is engaged. 58 Wealthsure and Mr Bertram submitted that s 1041N(3) required the Court to adopt the following analysis. The starting point is Mr and Mrs Selig's damage or loss. Taken from that is the proportion of damage or loss attributed to Mr and Mrs Selig by reason of contributory negligence under any relevant law. A relevant law for the purposes of s 1041N(3) is s 1041H and s 1041I(1B). Although, as the primary judge found, and Wealthsure and Mr Bertram accept on the appeal, contributory negligence is only relevant in relation to the claim under s 1041H, it is relevant to that claim so it is contributory negligence under a relevant law. It is taken into account as to the whole of the damage or loss (irrespective of the fact that the parties sued are liable under various causes of action where there is no reduction for contributory negligence), otherwise s 1041N(3) is unworkable. 59 Mr Townley put similar arguments to those of Wealthsure and Mr Bertram and, for the most part, adopted them. At this stage, it is not necessary to mention him separately. 60 Mr and Mrs Selig submitted that the primary judge's construction of Division 2A was correct, although I think their argument was somewhat narrower than the construction the primary judge adopted. All Mr and Mrs Selig had to do to obtain full damages against Wealthsure and Mr Bertram was to identify one claim against them which was not an apportionable claim, and that is all they sought to do. They submitted that, whatever causes of action are brought within the notion of a single apportionable claim in s 1041L(2), a claim which forms an exception to a claim under s 1041H(1) is not one of them. The claims which are not within the notion of a single apportionable claim are claims based on conduct which contravenes s 670A or s 728, or is in relation to a disclosure document or statement within the meaning of s 953A or within the meaning of s 1022A (s 1041H(3)). 61 In this case, the primary judge held that there was conduct by Wealthsure and Mr Bertram in relation to a disclosure document or a statement within the meaning of s 953A, and a contravention of ss 945A and 945B. As I understood Mr and Mrs Selig's submission, it was that it would not make sense if conduct that was expressly excluded from the section which engaged the proportionate liability provisions (i.e., s 1041H) could then become subject to the proportionate liability provisions in Division 2A. 62 In Bathurst Regional Council v Local Government Financial Services Pty Ltd (No 5) [2012] FCA 1200, Jagot J said the following (at [3485]): [T]he reasoning of Barrett J in Reinhold v New South Wales Lotteries Corp (No 2) [[2008] NSWSC 187] suggests that because the s.1041E cause of action arises from the same facts and relates to the same loss as the s.1041H cause of action then it too is apportionable (as the whole claim becomes apportionable). That has the somewhat unlikely consequence that a s.1041E claim will almost invariably become an apportionable claim because to establish a contravention of s.1041E a plaintiff will almost necessarily also establish a contravention of s.1041H. Nonetheless, Barrett J's reasoning has been repeatedly applied. 63 In Reinhold v New South Wales Lotteries Corporation (No 2) (2008) 82 NSWLR 762; [2008] NSWSC 187, Barrett J considered the proportionate liability provisions of the Civil Liability Act 2002 (NSW) in a case involving a claim brought against three parties to recover damages for breach of contract and negligence. 64 Section 34(1) of the Civil Liability Act 2002 (NSW) defined apportionable claims as, relevantly, for economic loss in an action for damages (in contract, tort or otherwise), claims arising from a failure to take reasonable care. I think Barrett J's decision favours Mr and Mrs Selig's argument, rather than Wealthsure and Mr Bertram's argument. One of the issues was whether claims for breach of contract were apportionable claims within s 34(1). His Honour found that they were because, on the findings as made, rather than the facts as pleaded, the breach of contract resulted from a failure to take reasonable care. His Honour would not have needed to engage in the analysis he did at 770-772, [26]-[36], had he considered that the finding of a breach of duty of care by way of negligence was sufficient without further analysis to bring, not only that claim, but also the contract claim within the terms of s 34(1). 65 In Miletich and Others v Murchie and Others (2012) 297 ALR 566; [2012] FCA 1013, Gray J considered the proportionate liability provisions of the Trade Practices Act, being s 87CD, and s 24AI of the Wrongs Act 1958 (Vic). His Honour said (at 593, [108]) that Part VIA of the Trade Practices Act, which contained s 87CD, applied to the entirety of the claim for the applicants' loss and damage, even though that claim was based in part, or in the alternative, on a cause of action pursuant to state legislation. In Rod Investments (Vic) Pty Ltd v Abeyratne & Ors (No 2) [2009] VSC 278, Hansen J, in the context of considering certain preliminary questions, made an observation (at [43]) which seems to support the notion that all causes of action fall within s 1041L(2) providing there is one cause of action within s 1041L(1). 66 There are authorities to the contrary and I refer, for example, to BHPB Freight Pty Ltd v Cosco Oceania Chartering Pty Ltd (No 2) [2008] FCA 1656, at [9] and [13] per Finkelstein J, and Bennett v Elysium Noosa Pty Ltd (in liq) (2012) 202 FCR 72; [2012] FCA 211, at 145-147, [267]-[276] per Reeves J. 67 As the primary judge noted, there is no authority of an intermediate appellate court which addresses the issue before this Court as to the application of the proportionate liability provisions. 68 In Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd and Others, the High Court considered the proportionate liability provisions of the Civil Liability Act 2002 (NSW). The particular issue in that case was whether the acts of certain fraudsters in relation to a loan and security had caused the same loss to the lender as the loss and damage caused to the lender by solicitors engaged by the lender to draw a mortgage and loan agreement. The issue arose out of the definition of "concurrent wrongdoer" in s 34(2) of the Civil Liability Act 2002 (NSW). 69 French CJ, Hayne and Kiefel JJ referred to the common law principle of solidary liability, where two or more persons are each liable for the discharge of the whole of one obligation. I note that the common law principle that judgments are given in solidum against tortfeasors severally liable was discussed at length in Barisic v Devenport and Others [1978] 2 NSWLR 111. French CJ, Hayne and Kiefel JJ discussed the final report of the inquiry into the law of joint and several liability completed by Professor Davis in 1995 (the Davis Report) (Commonwealth of Australia, Inquiry into the Law of Joint and Several Liability: Report of Stage Two, 1995). 70 As I have said, the particular problem that arose in Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd, namely, whether the fraudsters' conduct materially contributed to the loss or damage suffered by Mitchell Morgan and claimed by it from Hunt and Hunt, does not arise in this case. That is because the primary judge found and, subject to Mr Townley's complaint that he ought not to have been held liable for other losses (which I have rejected), his Honour's finding was not challenged on the appeal, that the conduct of the directors, Mr Norton, and Norton Capital materially contributed to the same loss or damage as Mr and Mrs Selig claimed against Wealthsure and Mr Bertram. 71 It is relevant to consider whether the Davis Report provides any assistance in the resolution of the issue before this Court. The short answer is that, expressly at least, it does not. The focus of the report is on the joint and several liability of concurrent wrongdoers where the damages claimed are economic loss or relate to property damage. Professor Davis discusses the joint and several liability of concurrent tortfeasors and statutory provisions giving them rights of contribution and indemnity as against each other. He referred to provisions proscribing misleading or deceptive conduct in trade or commerce, or in relation to securities, and he noted that a professional person providing incorrect information or advice may be guilty of misleading conduct, and, further, that such a person may be held liable despite all reasonable care on his or her part. Professor Davis considered that proportionate liability should extend to these statutory provisions because of "the similarities between professional liability for negligence and under these statutes". He said: (i) Liability for misleading conduct It has been noted that two or more persons may, by their separate breaches of section 52 of the Trade Practices Act 1974 (Cth) (or its equivalent in the fair trading legislation of the States and Territories), cause loss or damage to another person. As the law stands at present, while it is assumed that those who have brought about that loss would be regarded as jointly and severally liable, it is doubtful whether any of them has a right of contribution against another or others. Equally, two or more who have caused loss or damage by a contravention of section 995 of the Corporations Law would presumably be jointly and severally liable, but would be unlikely to have any rights of contribution one against the other. Although liability in negligence is different from these forms of statutory liability, in that the statutory provisions may be infringed despite all reasonable care having been taken, there are many similarities between the two forms of liability. In particular, so far as the present inquiry is concerned, both forms of liability may arise when a professional person makes a misstatement on which others rely, to their financial detriment. Because of the similarities between professional liability for negligence and under these statutes, it is anomalous that, in the case of multiple wrongdoers, any one of such a group should be exposed to a considerably different extent of liability depending solely on whether action is brought at common law or under one or other of the statutory provisions. On the other hand, a contravention of section 52 of the Trade Practices Act, or its State or Territory equivalent, may arise from a multitude of circumstances far removed from that of a professional person making a statement which turns out to be incorrect. Hence, a solution which removed the anomaly just referred to in relation to professional liability may bring with it further difficulties in relation, say, to a contravention of section 52 constituted by misleading the public as to the trading relationship between one business and its rival. Subject to the comments below on claims arising out of consumer transactions, it is therefore recommended that, if two or more are together responsible for a contravention of section 52 of the Trade Practices Act (or its equivalent in the fair trading legislation of the States and Territories) or of section 995 of the Corporations Law, each should be liable only in proportion to the degree of responsibility which he or she bears for the contravention, and not jointly and severally. 72 To my mind, this suggests that it was envisaged that the proportionate liability provisions, in addition to being limited to claims for economic loss and for damage to property, would be limited to causes of action involving a lack of reasonable care, or misleading or deceptive conduct, or both. The idea that, in addition, they would include other causes of action having a quite different basis for imposing liability does not appear to have been contemplated. Nevertheless, (and self-evidently) it is the words of the statute which determine the issue. 73 The starting point in terms of an analysis of the statutory provisions is s 1041N. Subsection (1)(a) provides that, in a proceeding involving an apportionable claim, the liability of a defendant who is a concurrent wrongdoer is limited to an amount reflecting that proportion of the damages or loss claimed that the Court considers just "having regard to the extent of the defendant's responsibility for the damage or loss". 74 Section 1041L(1) defines apportionable claim as a claim for damages made under s 1041I for economic loss or damage to property caused by conduct that was done in contravention of s 1041H. Mr and Mrs Selig made a claim for damages for economic loss. The primary judge awarded them damages for economic loss. Mr and Mrs Selig claimed against each of the groups of defendants at trial, being Wealthsure and Mr Bertram, the directors, and Mr Norton and Norton Capital, that they engaged in conduct in contravention of s 1041H, which caused them economic loss. They claimed that other conduct in breach of various legal obligations also caused the economic loss. The primary judge found that each group of defendants at trial had contravened s 1041H. His Honour also found that each group of defendants contraventions had materially contributed to the damage and loss claimed by Mr and Mrs Selig. Another way of putting this point is that, on the primary judge's findings, Mr and Mrs Selig would have succeeded in obtaining the damages they were awarded even if the only claims against the defendants were for contraventions of s 1041H(1). In my opinion, Mr and Mrs Selig's claims against the defendants fell within the definition of apportionable claims within s 1041L(1) of the Corporations Act. 75 Wealthsure and Mr Bertram were concurrent wrongdoers within s 1041L(3). They were one of two or more persons whose acts or omissions caused, independently of each other, the loss or damage that was the subject of Mr and Mrs Selig's claims. 76 Section 1041N(1) refers to any proceedings involving an apportionable claim. Section 1041L(1) defines apportionable claim. It is necessary to consider when there is an apportionable claim, and what claims are not an apportionable claim. Section 1041N(2) provides that the proportionate liability provisions only apply to an apportionable claim, whereas the liability for other claims is to be determined in accordance with the legal rules, if any, that, apart from Division 2A, are relevant. 77 Section 1041L(2) is a critical subsection because it identifies the circumstances in which there is a single apportionable claim or an apportionable claim for the purposes of s 1041N(1). The important features of that subsection are that the identity of the loss or damage is the key consideration, and that it specifically refers to more than one cause of action, whether or not of the same or a different kind. In this case, we have the same loss and damage and, as the subsection states, it matters not that the claims in relation to that loss or damage are based on not only a cause of action for a contravention of s 1041H(1), but also on causes of action of a different kind. There was an apportionable claim for the purposes of s 1041N(1). The reference in s 1041N(2) to a proceeding involving a claim that is an apportionable claim and a claim that is not an apportionable claim is dealing with a proceeding involving claims for different loss or damage. This is the effect of s 1041L(2), and it means that claims for different loss or damage are not part of an apportionable claim. There were no such claims in this case. 78 There are two arguments to be considered before I reach a final conclusion. The first argument was advanced by Mr and Mrs Selig. It was that the defendants were found liable on causes of action specifically excluded from the proscription on misleading or deceptive conduct in s 1041H(1). Those causes of action are based on conduct identified in s 1041H(3). The submission was that it would not make sense if causes of action specifically excluded from s 1041H(1) were held to be subject to the proportionate liability provisions in Division 2A where the precondition for the operation of the proportionate liability provisions is conduct that contravened s 1041H(1). 79 I reject this argument because it fails to recognise the distinction between the conduct which gives rise to liability on the one hand, and the critical importance of the concept of the same loss and damage for the purposes of the proportionate liability provisions on the other. In this case, there were a number of acts and omissions over a period of time, some giving rise to contraventions under s 1041H(1), others to contraventions falling within the sections and matters identified in s 1041H(3), and yet others giving rise to liability by reference to other legal obligations. The fact is that the primary judge found that they had all materially contributed to the same loss or damage. In my opinion, that engaged the proportionate liability provisions in relation to that same loss or damage. 80 The second argument was a matter identified by the primary judge. He noted that the acceptance of the argument advanced by Wealthsure and Mr Bertram would lead to different results for no apparent reason as far as the application of the contributory negligence provisions are concerned. 81 Assume a claim against one defendant involving conduct in contravention of s 1041H, and in contravention of other sections of the Corporations Act, and of various obligations at common law. Assume a lack of care by the plaintiff within s 1041I(1B) of the Corporations Act which leads to a reduction in the plaintiff's damages. On the primary judge's construction of s 1041I(1B) (and, as I have said, his construction was not challenged by Wealthsure and Mr Bertram on the appeal), the plaintiff's damages are reduced, but only in relation to a claim brought under s 1041I(1) for a contravention of s 1041H. 82 Assume a similar case, but one where there are a number of defendants. If the proportionate liability provisions applied, the primary judge said (in the course of rejecting the argument that they did apply) that that would mean that the plaintiff's lack of reasonable care or contributory negligence under s 1041H(1B) would be taken into account before liability was apportioned between the defendants. That would follow from s 1041N(3), because the plaintiff would be found contributorily negligent under a relevant law within s 1041N(3). 83 I agree that there is no apparent reason for these different results and it is a factor against the construction of the proportionate liability provision advanced by Wealthsure and Mr Bertram. However, I think the effect of the words in s 1041L(2) are too clear to be outweighed by this factor. 84 In conclusion, it is not easy to discern Parliament's intention in resolving the construction issue raised in this case. On the one hand, it is not surprising that the proportionate liability provisions would not be restricted to the one cause of action (i.e., a contravention of s 1041H(1)) because it is quite common for a particular set of facts to give rise to a number of causes of action, and it would seem artificial that the proportionate liability provisions could be avoided by a different legal characterisation of the facts. On the other hand, it might be considered surprising if the proportionate liability provisions applied to causes of action far removed from a general proscription on misleading or deceptive conduct, and, in particular, causes of action having different elements and a different rationale. These considerations might have led to a provision bringing within the proportionate liability provisions contraventions of s 1041H(1) and other similar causes of action or causes of action of the same kind. However, I think Parliament has gone further than this in enacting s 1041L(2). Parliament used the concept of the same loss or damage and made it clear that different kinds of causes of action are also included. 85 The proportionate liability provisions, including the allowance for contributory negligence, applied in relation to Mr and Mrs Selig's claims.

The Assessment of Contributory Negligence and the Apportionment between the Respondents 86 I start with the challenge by Wealthsure and Mr Bertram to the primary judge's assessment of Mr and Mrs Selig's contributory negligence at 15%. Wealthsure and Mr Bertram submitted on the appeal that the primary judge should have assessed Mr and Mrs Selig's contributory negligence at 50%. Mr and Mrs Selig have not filed a cross-appeal, so that it is not said by them that they should not have been found guilty of contributory negligence or that their responsibility should have been fixed at less than 15%. 87 The primary judge did not set out his reasons for finding Mr and Mrs Selig guilty of contributory negligence or for reaching his assessment of 15%. He simply said that Mr and Mrs Selig's claims in tort and contract, and under s 1041H(1) of the Corporations Act, should be reduced by 15%. 88 Section 1041I(1B) of the Corporations Act refers to a claimant suffering loss or damage as a result partly of his or her failure to take reasonable care and, if that is so, a reduction in damages recovered in relation to the loss or damage claimed "to the extent to which the court thinks just and equitable having regard to the claimant's share in the responsibility for the loss or damage". This phrase is sufficiently similar to phrases in various pieces of State legislation dealing with contributory negligence as between a claimant and a tortfeasor to suggest that the well-established principles enunciated in Pennington v Norris (1956) 96 CLR 10; [1956] HCA 26, and Podrebersek v Australian Iron & Steel Pty Ltd (1985) 59 ALR 529; [1985] HCA 34 are relevant. 89 In Pennington v Norris, the Court said (at 16) that a claimant's share in the responsibility for damage required an examination of the degree of culpability by reference to the degree of departure from the standard of care of the reasonable man. In Podrebersek v Australian Iron & Steel Pty Ltd, the Court said that, in addition to that matter, regard must be had to the relative importance of the acts of the parties in causing the damage. 90 In Pennington v Norris, the Court also made the point (at 15-16) that an appellate court will be slow to interfere with an apportionment by a judge or by a jury. That is because the discretion given by the section is a wide one. In Podrebersek v Australian Iron & Steel Pty Ltd, the Court referred with approval (at 532) to the following statement in British Fame (Owners) v MacGregor (Owners) [1943] AC 197, at 201 per Lord Wright: It is a question of the degree of fault, depending on a trained and expert judgment considering all the circumstances, and it is different in essence from a mere finding of fact in the ordinary sense. It is a question, not of principle or of positive findings of fact or law, but of proportion, of balance and relative emphasis, and of weighing different considerations. It involves an individual choice or discretion, as to which there may well be differences of opinion by different minds. It is for that reason, I think, that an appellate court has been warned against interfering, save in very exceptional circumstances, with the judge's apportionment. 91 One other matter of a general nature must be mentioned. The apportionment process under s 1041I(1B) may engage different principles where a defendant's contravention of s 1041H(1) is innocent in the sense that there is no lack of care on his part. In such a case, the comparison in terms of responsibility for loss or damage is between a defendant's misleading or deceptive conduct, albeit innocent, and a claimant's lack of care within s 1041I(1B). This case is not such a case because there is abundant evidence of a lack of care on the part of Wealthsure and Mr Bertram. It is not therefore necessary to consider the issue (Valcorp Australia Pty Ltd v Angas Securities Limited [2012] FCAFC 22, at [110]-[111]). 92 The submissions of Wealthsure and Mr Bertram on the apportionment for contributory negligence were contained in the written outline of submissions in chief (paragraphs 39 to 41). The conduct of Mr and Mrs Selig relied on by Wealthsure and Mr Bertram was the same conduct as they relied on in their arguments with respect to causation and, therefore, the conduct said to be relevant to contributory negligence all relates to the consequential losses claimed by Mr and Mrs Selig. This is significant because the allowance his Honour would have made was 15% of the overall loss or damage and yet the conduct of Mr and Mrs Selig was relevant to half, or just over half, of the principal sum (i.e., the sum before compound interest was added). 93 Paragraph 14 of the Supplementary Notice of Appeal challenges various factual findings of the primary judge without identifying the consequences of upholding the challenges and, in that sense, it is unhelpful. Nevertheless, doing the best I can, it seems to identify the following acts of contributory negligence: (1) a profligate lifestyle and excessive living expenses (paragraphs 14.1, 14.2, 14.5, 14.7, 14.9 and 14.10); (2) excessive borrowings (paragraph 14.7); (3) reckless statements to financiers (paragraph 14.8); (4) borrowings when aware the dividends from Neovest would not meet interest payments or borrowings (paragraphs 14.9 and 14.10). 94 As to the first matter, it is to be noted that at trial, Mr and Mrs Selig argued that their loss and damage represented the deterioration in their financial position between two dates. The primary judge rejected this approach to an assessment of their damages because he considered that it would over compensate Mr and Mrs Selig. In the course of explaining his approach to damages, he said that Mr and Mrs Selig's financial position deteriorated because of the implementation of the strategy (i.e., to invest in Neovest and the associated activities), and also because of the manner in which they lived and because monies were expended on living expenses. His Honour went on to say the following (at [1271]-[1272]): As I have said earlier, I reject the proposition in Schedule 2 that the whole of the plaintiffs' financial position is as a result of the implementation of the strategy. That is why I have attempted to make a rough and ready assessment of the financial loss caused by the implementation of the strategy, as distinct from the financial loss caused by the plaintiffs' own lifestyle. 95 I think the primary judge took lifestyle matters into account when assessing damages. He was not required to take them into account again when assessing contributory negligence. I would only add, as to paragraph 14.1, which asserts that Mr and Mrs Selig's real annual living expenses at the relevant time well exceeded their asserted living expenses of $52,000 per year, that the primary judge was aware that Mr and Mrs Selig's living expenses exceeded $52,000 per annum. 96 As to the second matter, the primary judge found, I think, that the investment in Neovest, the purchase of the Wynnum units, and the borrowings (at least to an extent), were all part of the one strategy (the property at Wattle Street, Yaroomba was not part of the strategy). Although this is not decisive on contributory negligence, it is relevant to one limb, and that is the relative importance of the acts in causing the loss or damage. Again, I think it likely that this second matter, placed in the context I have described, was a matter the primary judge took into account. 97 As to the third matter, the primary judge was aware that Mr Selig had made a false statement to his financier (National Mortgage Company) on 16 December 2004, and I think it likely that this was a matter the primary judge took into account. 98 As to the fourth matter, the primary judge found that it was reasonable for Mr and Mrs Selig to refinance with Orio in the hope that the Neovest investment would not be lost and that the dividends would be paid. He relied on a number of matters to support that conclusion, including various assurances Mr Bertram gave to Mr and Mrs Selig after 18 April 2005. It is not necessary for me to set out the details. One of the principal matters advanced in challenging the findings was that events after the investment in Neovest were not pleaded and the primary judge erred in allowing Mr and Mrs Selig to rely on them. That "submission" does not take the matter very far. To challenge the primary judge's decision, Wealthsure and Mr Bertram would need to identify a House v The King (1936) 55 CLR 499; [1936] HCA 40 error, and this they failed to do. 99 In my opinion, Wealthsure and Mr Bertram have not shown that the primary judge's assessment of contributory negligence at 15% was erroneous. 100 I turn now to the question of apportionment between the defendants. 101 I should mention one important point at this stage. In apportioning liability to the defendants at trial in relation to the causes of action where the primary judge held that the proportionate liability provisions applied, the primary judge treated the defendants as groups. For example, Wealthsure and Mr Bertram were one group, and the directors were another group. There was no challenge on appeal to that approach and I will proceed on that basis. 102 Wealthsure and Mr Bertram submitted that the apportionment of 60% of the responsibility to them was excessive. There is no cross-appeal by Mr and Mrs Selig, so that there is no suggestion by them that that apportionment was insufficient. 103 Section 1041N(1)(a) of the Corporations Act requires an apportionment of the damage or loss claimed that "the court considers just having regard to the extent of the defendant's responsibility for the damage or loss". Although this wording differs from that in s 1041I(1B), I think the approach is broadly the same, in that relevant matters are the degrees of departure from the standard of a reasonable person and the relative importance of the acts of the parties in causing the damage. 104 The major point made by Wealthsure and Mr Bertram was that the primary judge ought to have found that the bulk of the responsibility lay with the directors, who knew a great deal more about the financial state of the company than they did. 105 The submissions of Wealthsure and Mr Bertram with respect to the apportionment of responsibility between defendants were not easy to follow. Ground 12 of the Supplementary Notice of Appeal identifies seven factual findings made by the primary judge, and asserts that the primary judge erred in law, and against the weight of evidence, and in circumstances where the matters were not put, or were not fairly put, to Wealthsure and Mr Bertram, or were not pleaded, or were not adequately pleaded, against Wealthsure and Mr Bertram. Wealthsure and Mr Bertram dealt with the grounds upon which they attacked the seven factual findings identified in ground 12 in Appendix C to their written outline of submissions. In that appendix, they do not identify, with respect to each of the alleged factual errors, whether it is said that a particular matter was not put, or was not fairly put, to Wealthsure (and query what that means in the case of a company) and Mr Bertram, and whether a particular matter was not pleaded, or was not adequately pleaded, against Wealthsure and Mr Bertram. This makes it difficult for this Court to understand and deal with the submissions. Furthermore, many of the submissions appear to be no more than a repetition of arguments put to the primary judge without identification of the error said to have been made by the primary judge. Two examples will illustrate the difficulties. First, there is a suggestion that the expert called by Mr and Mrs Selig (Mr Wybrow) conceded various matters in cross-examination over approximately 28 pages of transcript, which meant that the primary judge's finding that an ordinary competent and prudent financial adviser would have undertaken inquiries to ascertain information pertaining to the solvency of the Neolido Group was erroneous. I have read that evidence and it is difficult to ascertain what precisely is being conceded and by reference to what assumptions. Furthermore, I note that, at one point, the primary judge states that he will not put any weight on the answers because the witness had not had an opportunity to read the lengthy document which was the subject of the cross-examination. More importantly, the submission fails to confront the fact that the primary judge's finding was based on Mr Bertram's own admissions as to what he should and should not have done. Secondly, Wealthsure and Mr Bertram attack findings made by the primary judge in paragraph 738 of his reasons that Wealthsure and Mr Bertram's defence was that "the scheme was a Ponzi, but they failed to explain how it was that their clients, who were experts, failed to recognise it", and, a further finding, said to be implicit, that it was incumbent on Wealthsure and Mr Bertram to explain how they failed to recognise that the scheme was a Ponzi. In Appendix C to their written outline of submissions, Wealthsure and Mr Bertram assert, in relation to this finding and "implicit" finding, that Mr Pawski never realised that Neovest was a Ponzi, and they give references to Mr Pawski's evidence. They also state that the directors concealed information from the advisers. The difficulty for Wealthsure and Mr Bertram is that the primary judge found that Mr Darren Pawski, the managing director and chief executive officer of Wealthsure, was a poor witness. His Honour considered that Mr Pawski's evidence was designed to exculpate Wealthsure, and he said that he placed little reliance on it for that reason. The submission now made does not confront that conclusion. I have considered the various matters raised in ground 12 and the evidence references referred to in Appendix C, and I am not satisfied that any of the factual findings set out in ground 12 were erroneous. 106 In my opinion, the primary judge's reasons with respect to this matter are amply supported by the evidence and are conclusive. The submission of Wealthsure and Mr Bertram must be rejected. 107 The primary judge said that Mr and Mrs Selig would not have invested in Neovest but for Mr Bertram's advice. Wealthsure did not carry out an appropriate due diligence itself into Neovest. Wealthsure, Mr Bertram, and Mr Pawski failed to recognise the risky nature of the investment. All failed to pay proper attention to the type of scheme that Neovest was, "which was a Ponzi". 108 After dealing with the other parties, the primary judge said (at [1127]-[1130]): However, in my opinion, the parties most culpable were Wealthsure and Mr Bertram. Mr Pawski also had the Info Pack, which was available to Mr Norton and Norton Capital. He is a financial adviser. He should have been able to make an informed assessment of the Neolido Group's financial position. He should have realised that Neo Lido, Neolido Holdings and the Neolido Group were financially stressed because of the extraordinarily high rate of interest those companies would have to pay. He was aware that any dividends payable on the shares required the resolution of the directors. He was also aware that the redeemable preference shares could not be redeemed without the agreement of the directors. He was aware of the steps that Mr Norton had taken to minimise the risk associated with the investment. He was aware that it was a high risk investment. However, not only did Wealthsure market the product extensively, it marketed the product to the wrong people. The advice that Mr Bertram gave Mr and Mrs Selig was never suitable for their needs. They did not have sufficient income to engage in negative gearing. Advice, which required them to borrow money to invest in a high risk investment to obtain sufficient income to negatively gear units that had not been built, was never suitable to their needs and no prudent financier could have given that advice, as Mr Bertram has recognised in his evidence. In my opinion, the culpability of Wealthsure and Mr Bertram far exceeded that of the other participants. 109 I agree with those observations and conclusions. 110 Mr Townley challenged the primary judge's apportionment of 15% responsibility to the directors. He submitted that greater responsibility than 60% should have been attributed to Wealthsure and Mr Bertram, and that the balance of the responsibility should have been attributed to Mr Norton and Norton Capital. The submission that there was no causal link between the directors' contraventions and failures and Mr and Mrs Selig's loss and damage has already been rejected, so this argument must be rejected. 111 The primary judge found that the directors did not make proper disclosure in the two Neovest prospectuses of the financial position of Neolido, Neolido Holdings and the Neolido Group. His Honour found that they allowed their optimism for the Neolido Group to cloud their judgment in relation to the appropriate disclosure of relevant information. 112 In his notice of cross-appeal, Mr Townley contended that Mr Mackintosh was a concurrent wrongdoer within the proportionate liability provisions. Mr Mackintosh's meetings with Mr and Mrs Selig and his role in events was referred to by the primary judge, but there is nothing to indicate that it was suggested to the primary judge that he was a concurrent wrongdoer. The Fourth Amended Defence of Wealthsure and Mr Bertram identify alleged concurrent wrongdoers, and Mr Mackintosh is not one of them. The Amended Defence of the directors, including Mr Townley, does not allege that Mr Mackintosh was a concurrent wrongdoer. It is far too late to raise the allegation now. I would add that, in any event, I would be inclined to think that the inclusion of Mr Mackintosh as a concurrent wrongdoer would benefit Wealthsure and Mr Bertram, not the directors, including Mr Townley. 113 Mr Townley did not put anything on the appeal to suggest that an apportionment of responsibility of 15% to the directors was erroneous and Mr Townley's challenge to the apportionment must be rejected.

Conclusions 114 I think that Wealthsure and Mr Bertram, the directors, including Mr Townley, Mr Norton and Norton Capital, are concurrent wrongdoers in relation to the loss and damage suffered by Mr and Mrs Selig. I agree with White J that the amount which reflects that loss and damage is $1,716,680. However, that amount should be reduced by 15% to reflect the contributory negligence of Mr and Mrs Selig ($1,459,178). Wealthsure and Mr Bertram are liable for 60% of this amount, that is, $875,506.80. Mr Norton is liable for 25% of this amount, that is $364,794.50, and Mr Townley is liable for 15% of this amount, that is, $218,876.70. 115 I would allow the appeal by Wealthsure and Mr Bertram, and the cross-appeal by Mr Townley. I would set aside the primary judge's order entering judgment in the sum of $1,760,512 against Wealthsure and Mr Bertram, Mr Townley and Mr Norton and substitute therefor judgments in the amounts set out above. I would hear the parties as to costs and other orders. I certify that the preceding ninety-six (96) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko.

Associate: Dated: 30 May 2014 IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION SAD 97 of 2013

First Respondent/First and Second Cross-Respondents

NORTON CAPITAL PTY LIMITED (IN LIQUIDATION) ACN 086 207 169

JUDGES: MANSFIELD, BESANKO AND WHITE JJ DATE: 30 may 2014 PLACE: ADELAIDE

WHITE J: 116 In 2004 and 2005, Mr and Mrs Selig acted on the financial advice of the second appellant, Mr Bertram, and invested $450,000 in Neovest Ltd (Neovest). Their investment failed. Neovest is now in liquidation. 117 At the time the advice was given, Mr Bertram was an "authorised representative" of the first appellant, Wealthsure Pty Ltd (Wealthsure). Mr Bertram was employed by his company, David Bertram & Associates Pty Ltd (DBA). 118 The Seligs claimed damages for the loss of their investment and consequential losses against several persons including Wealthsure and Mr Bertram. A Judge of this Court entered judgment for them against Wealthsure, Mr Bertram and two other defendants in the sum of $1,760,512 (Selig v Wealthsure Pty Ltd and Ors [2013] FCA 348). The Judge dismissed the Seligs' claims against other defendants and dismissed the cross-claim of Wealthsure and Mr Bertram against other defendants. 119 This is an appeal against that judgment. It is convenient in these reasons to refer to the parties by their designations at first instance. 120 Mr and Mrs Selig were the plaintiffs. Wealthsure and Mr Bertram were the first and second defendants. 121 The third to sixth defendants respectively were Mr Spencer, Ms Perovich, Mr Norton and Mr Townley. At relevant times, these defendants were the directors of Neovest, which was the seventh defendant. Neovest was incorporated as a public company to obtain finance from investors to lend to Neo Lido Pty Ltd and Neolido Holdings Pty Ltd, two Queensland development companies owned directly or indirectly by Mr Spencer and Ms Perovich. These companies and their subsidiaries were referred to as "the Neolido Group". 122 Mr Norton was also the principal of Norton Capital Pty Ltd (Norton Capital), the eighth defendant. It formerly carried on a financial services business which included the provision of financial product advice. Mr Norton and Norton Capital took an active role in the promotion of investment in Neovest. Norton Capital is now in liquidation. Although Mr Norton filed a defence to the Seligs' claim and to the first and second defendants' cross-claim, he did not thereafter take any part in the proceedings. 123 Mr Townley is a legal practitioner. At the relevant times, he was a partner in the firm of Nicol Robinson Halletts (NRH). The ninth to thirteenth defendants were his partners. 124 Mr Spencer and Ms Perovich were declared bankrupt in August 2007. Acting under s 58(3) of the Bankruptcy Act 1966 (Cth), the Judge gave leave for the proceedings against them to be continued only up to the date of entry of judgment. Similarly, the Judge made orders permitting the proceedings against Neovest and Norton Capital to proceed only up to the date of entry of judgment.

The Causes of Action 125 The Seligs' primary claims were against Wealthsure and Mr Bertram. They relied on statutory and common law causes of action. The statutory causes of action were: (a) breaches of ss 945A and 945B (now repealed) of the Corporations Act 2001 (Cth) which, at relevant times, required a provider of financial advice to have a reasonable basis, having regard to the client's individual circumstances, for the advice provided and to warn the client if the advice was based on incomplete or inaccurate information; (b) misleading and deceptive conduct in relation to a financial product or a financial service, contrary to s 1041H of the Corporations Act and s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act); (c) a breach of the implied statutory warranty that the services under a contract for the supply of financial services will be rendered with due care and skill, contrary to s 12ED of the ASIC Act; (d) false representations in relation to the standard of financial services, contrary to s 12DB of the ASIC Act; (e) misleading representations as to future matters in relation to financial products and financial services, contrary to s 769C of the Corporations Act and s 12BB of the ASIC Act; (f) false or misleading statements to induce a person to apply for, acquire or dispose of financial products, contrary to s 1041E of the Corporations Act. 126 The Seligs claimed damages in respect of these causes of action pursuant to ss 953B, 1041I and 1325 of the Corporations Act and s 12GF of the ASIC Act. 127 The Seligs' common law causes of action against Wealthsure and Mr Bertram were breaches of the contract of retainer and negligence. They claimed that Wealthsure and Mr Bertram had failed to exercise reasonable skill and care in the provision of their services. 128 As against the third to eighth defendants, the Seligs claimed damages pursuant to ss 729, 1041I and 1325(1) respectively of the Corporations Act for contraventions of ss 728, 1041E, 1041F and 1041H of that Act, and pursuant to s 12GF of the ASIC Act for contravention of s 12DA of that Act. Section 728 of the Corporations Act proscribes the offering of securities under a disclosure document containing misleading or deceptive statements or material which is incomplete in material aspects. Section 1041F proscribes the inducement of another to deal in financial products by, amongst other things, making statements which are false, misleading or deceptive. In addition, the Seligs claimed against these defendants damages for negligence and misrepresentation. 129 The Seligs' claim against the ninth to thirteenth defendants was that, as partners of Mr Townley, they were liable under s 13 of the Partnership Act 1891 (Qld) for his acts and omissions. Wealthsure and Mr Bertram made a like claim against the ninth to thirteenth defendants in support of their claim to contribution and indemnity against the other defendants. 130 Ultimately, the Seligs succeeded in all their causes of action against Wealthsure, Mr Bertram, Mr Norton and Mr Townley, save that Mr Townley was found not to have contravened s 1041F of the Corporations Act. The Judge considered that the Seligs were guilty of contributory negligence but concluded that s 1041I(1B) of the Corporations Act and s 12GF(1B) of the ASIC Act did not operate to reduce their entitlement to damages in respect of the contraventions of those Acts (other than ss 1041H and 12DA respectively). Accordingly, the judgment of $1,760,512 did not reflect any deduction for contributory negligence. 131 The Judge also held that the proportionate liability provisions in ss 1041L and 1041N of the Corporations Act and in ss 12GP and 12GR of the ASIC Act applied only to the claim brought by the Seligs under ss 1041H and 12DA respectively. Accordingly, he did not enter judgment against the defendants for only that amount which reflected their respective responsibilities for the Seligs' losses. The Judge indicated, however, that had it been necessary to do so, he would have found the Seligs contributorily negligent to the extent of 15% and would have apportioned 60% of the liability to Wealthsure and Mr Bertram, 25% to Mr Norton and Norton Capital, and 15% to the other directors of Neovest. 132 Although the Judge made findings which were adverse to Mr Spencer, Ms Perovich, Neovest and Norton Capital, he refused leave to the Seligs to enter judgment against those defendants (Selig v Wealthsure Pty Ltd (No 2) [2013] FCA 770). In the case of Mr Spencer and Ms Perovich, the Judge considered that the entry of judgment would have no utility as it would not constitute a provable debt in their bankruptcies. In the case of Neovest and Norton Capital, the Judge considered that the entry of judgment was unnecessary because it could be expected that the respective liquidators would recognise his findings concerning those companies and admit his judgment in support of proofs of debt by the Seligs. 133 The Judge found that the ninth to thirteenth defendants were not liable under s 13 of the Partnership Act 1891 (Qld) for the acts or omissions of Mr Townley which were causative of the Seligs' losses. The Seligs' claim against those defendants was dismissed.

The appeal 134 Wealthsure and Mr Bertram appeal against the judgment on several grounds. The issues to which those grounds give rise will be identified later in these reasons. 135 Mr Spencer, Ms Perovich and Mr Townley filed a document entitled "Notice of Cross-Appeal". Insofar as this document purports to be an appeal by Mr Spencer and Ms Perovich, it is incompetent because the Judge had made no orders against those defendants: Federal Court of Australia Act 1976 (Cth) s 24(1)(a); Ah Toy v Registrar of Companies (1985) 10 FCR 280 at 285-6; Landsal Pty Ltd v REI Building Society (1993) 113 ALR 643 at 647-54; Martin v Fresho Foods Pty Ltd [2009] FCAFC 165 at [4]. However, the appeal by Mr Townley is competent and the Court heard submissions made on his behalf. Mr Rozario, who had announced an appearance for Mr Spencer, Ms Perovich and Mr Townley, accepted that his submissions in relation to that appeal were made on behalf of Mr Townley only. 136 By grounds 19 to 21 of their supplementary notice of appeal, Wealthsure and Mr Bertram appealed against the dismissal of the claim against Mr Townley's partners. However, the Court was informed, shortly before the commencement of the hearing, that Wealthsure and Mr Bertram had reached a settlement with the ninth to thirteenth defendants. Pursuant to that settlement, Wealthsure and Mr Bertram did not pursue grounds 19 to 21 in the supplementary notice of appeal, and those defendants took no part in the hearing of the appeal.

The conduct of the appeal on behalf of Mr Bertram 137 An issue was raised at the commencement of the appeal hearing concerning the pursuit of the appeal by Mr Bertram. The Court informed the parties that it would hear the submissions on the appeal from the appellants in the ordinary way and rule on the issue as part of these reasons. My reasons follow. 138 Mr Whitington QC, who appeared with Mr Cox SC, announced that he appeared for the first appellant (Wealthsure) and for the second appellant (Mr Bertram) "by right of its insurer QBE Insurance Australia Ltd" (QBE). The announcement of the appearance in that manner arose from the circumstance that Mr Bertram had been declared bankrupt on 12 June 2013 on his own petition. This was after the filing of the single notice of appeal by the two appellants, both of whom are represented by Cosoff Cudmore Knox (CCK). 139 By s 60(2) of the Bankruptcy Act, Mr Bertram's bankruptcy had the effect that the appeal (insofar as it had been commenced by him) was stayed until his trustee in bankruptcy made an election in writing to prosecute or discontinue the appeal. On 24 July 2013, the Official Trustee in Bankruptcy informed CCK that he had elected to discontinue the appeal. 140 QBE had issued a policy of liability insurance to Wealthsure for the period between 31 October 2006 and 31 October 2007. By an endorsement on the policy, the definition of "insured" was extended to include authorised representatives such as Mr Bertram. QBE has acknowledged liability to indemnify Mr Bertram in accordance with the terms of the policy in respect of his liability to the Seligs and it conducted the defence of Wealthsure and Mr Bertram at trial. In addition, QBE has had the conduct of the appeal since its commencement. 141 On 2 September 2013, the Official Trustee assigned Mr Bertram's rights under the policy to the Seligs. 142 QBE asserts an entitlement to conduct the appeal in the name of Wealthsure and Mr Bertram having regard to cl 5.2(b) of the policy: QBE shall be entitled if they so desire to take over and conduct, in the name of the Insured, the defence or settlement of any Claim at any time. In the event that this occurs, QBE will then have sole control of the Claim. 143 QBE submitted that cl 5.2(b) permitted it to take over and conduct the defence to the Seligs' claim on behalf of Mr Bertram and that that right included an entitlement to conduct the appeal on behalf of Mr Bertram. 144 In my opinion, that submission is correct. The exercise of the contractual right is not made conditional on the consent or acquiescence of the Insured. Further, the exercise of the contractual right is not affected by Mr Bertram's bankruptcy. That is because a trustee in bankruptcy takes the property of the bankrupt subject to the liabilities and equities which affect it while it is in the bankrupt's hands. Section 60(2) of the Bankruptcy Act should be construed as operating subject to that equity. It would be incongruous if a trustee in bankruptcy acquired as part of the property of a bankrupt the right of indemnity under an insurance policy but could, at the same time, negate the exercise by the insurer of its contractual right to defend a claim brought against the insured to which the policy would respond. I would reject the submission of the Seligs to the contrary. 145 Any issues concerning costs arising from the exercise by QBE of its contractual right or from the manner of its conduct in relation to the appeal may be addressed once the appeal has been determined. 146 I do not consider it necessary for the Court to make any formal order to give effect to this ruling. However, it is appropriate to refer to other events which have occurred in relation to the appeal by Mr Bertram. 147 Before the hearing of the appeal (which commenced on 3 October 2013), the pursuit of the appeal in Mr Bertram's name had been the subject of proceedings in the Federal Circuit Court (the FC Court). On 11 September 2013, the Official Trustee issued an application in the FC Court seeking directions under the Bankruptcy Act as to whether he was required to file a notice of discontinuance in the appeal. A Judge of the FC Court made orders on that application on 2 October 2013, that is, the day before the commencement of the appeal hearing in this Court. Those orders were (relevantly): 1. In default of [QBE] making application on or before 10.00am on Thursday 3 October 2013 pursuant to FCR 9.09, or upon such other basis as it considers appropriate, to be joined in proceeding SAD 97 of 2013 the Applicant, the Official Trustee in Bankruptcy, forthwith file a notice of discontinuance in SAD 97 of 2013. 2. Subject to order 1, in the event the Court refuses any application by QBE to be joined as a party to SAD 97 of 2013, the Applicant, the Official Trustee in Bankruptcy, forthwith file a notice of discontinuance in SAD 97 of 2013. SAD 97 of 2013 is the action number of the present appeal proceeding. 148 It is not necessary presently to comment on the appropriateness of these orders. 149 In order to protect its position in the light of the FC Court orders, QBE filed an interlocutory application in these proceedings before 10.00am on 3 October 2013. By that application, QBE sought interlocutory orders in the alternative: 1. That QBE Insurance (Australia) Ltd (QBE) be given leave pursuant to Federal Court Rule 9.12 to intervene in the appeal in action SAD 97 of 2013 for the limited purpose of meeting the requirements of an order made by the Federal Circuit Court in action no. (P)BRG804/2013 on 2 October 2013 so that QBE may be heard on its right to continue to conduct the appeal and be permitted to conduct the appeal, in the name of the second appellant, Mr David Bertram. 2. In the alternative, a declaration that QBE is entitled to conduct, and is conducting, this appeal in the name of the second appellant, Mr Bertram. 3. In the further alternative, that QBE be given leave pursuant to Federal Court Rule 9.09(2) to be joined as the third appellant to the appeal in action SAD 97 of 2013 in order to protect its interests to conduct the appeal in the name of the second appellant, Mr David Bertram. 4. Such further and other orders as the Court sees fit. 150 However, Mr Whitington QC submitted at the commencement of the appeal hearing on 3 October 2013, in relation to QBE's application, that the Court should "let it lie, but not refuse it". He submitted that, if that occurred, both the conditions in the orders made by the FC Court would be satisfied. This position was consistent with Mr Whitington's submission that QBE had a contractual right to defend the claim brought against its insured, and to do so in the name of the insured. 151 As already indicated, I would uphold QBE's contention in that respect. That being so, and given that QBE does not seek that any orders be made on its interlocutory application, I would refrain from making any orders presently, and adjourn further consideration of the application. I note, in addition, that the effect of r 36.73 of the Federal Court Rules 2011 is that the appeal by Mr Bertram can be discontinued at this stage only with this Court's leave.

Factual background 152 The Judge's reasons traverse in detail the circumstances of the Seligs' investment. However, the issues raised on the appeal do not require the whole of those circumstances to be reviewed. 153 Until 1998, Mr Selig had worked principally in the fishing, building and landscaping industries in South Australia. In 1998, the Seligs moved to live in Queensland and Mr Selig participated in two projects involving the construction of home units. 154 By September 2004 when the second project was completed, the Seligs owned, in their own names, two apartments (in a block of 12 apartments referred to as the "Sea Aura apartments") and had little or no borrowings. In December 2004, their company, Jarone Pty Ltd, received some $214,000 from the proceeds of sale of another Sea Aura apartment. The Seligs lived in one of the Sea Aura apartments. Neither of them was working. Mr Selig's physical condition was such that it was not practical for him to continue with manual work. The Seligs' only income was the rent of $370 per week received from the rental of the second of their apartments. They were looking for investment opportunities which would provide an income. This led to their meeting with Mr Bertram and others in September 2004. 155 At that time, Mr Bertram was an employee of DBA, which carried on business under the name of DBA Financial Design. Wealthsure held an Australian Financial Services Licence entitling it to provide financial advice and to deal in financial products. In November 2003, Mr Bertram and Wealthsure had entered into a "representative agreement" pursuant to s 916A of the Corporations Act by which Mr Bertram could act as a representative of Wealthsure in relation to its financial services business. 156 In February 2004, Neovest had issued a prospectus by which it sought to raise money to on-lend to Neo Lido and Neolido Holdings. Norton Capital, which also held an Australian Financial Services Licence, offered to assist in the raising of money pursuant to the prospectus. The offer of assistance, which was subject to a number of conditions including that Mr Norton be appointed a director of Neovest, was accepted by Neovest. Another condition was that Neovest was to pay dividends monthly. Mr Norton and Norton Capital prepared two documents regarding Neovest. One was a Research Report and the other an Information Summary (referred to as the "Norton Capital flyer"). The Research Report recommended Neovest as a "Norton Capital Approved Product". 157 Mr Bertram was friendly with a Mr Mackintosh who carried on an advice and mortgage broking business, and a business selling real estate. Mr Mackintosh controlled a group of companies known as the "Asset Acceleration Group". Mr Bertram was accustomed to providing financial advice to Mr Mackintosh's clients, because Mr Mackintosh was not licensed to do so. 158 At a meeting on 29 September 2004 attended by the Seligs and others, Mr Mackintosh made a presentation about property investments and explained the concept of negative gearing. A Mr Mamet gave a presentation about a number of property developments in which he was involved. Mr Selig informed those present that he had no cash flow for the negative gearing of real estate. Mr Bertram told Mr Selig that an investment in Neovest may solve this problem. He said that Neovest was investing in building projects in Queensland and, in particular, that it was engaged in a development at North Lakes. Mr Bertram spoke of Neovest providing a return on moneys invested of 20%. The Judge found that Mr Bertram described Neovest as having been researched by Wealthsure who had found it to be a safe product. 159 There were subsequent meetings involving Mr Bertram and the Seligs, or at least Mr Selig. The Judge found that at those meetings Mr Bertram spoke positively about Neovest, reiterating that it would return 20% on the investment and that he was "100% sure" that the investment would work. On more than one occasion Mr Bertram told the Seligs, before they entered into contracts to purchase three properties at Berrima Street, Wynnum, to which I will refer shortly, that the investment in Neovest "would pay for everything with its 20% per annum return, and give enough cash every week to live on and go fishing". 160 At a meeting on 11 October 2004, Mr Bertram provided Mr Selig with a document entitled "Wealthsure Financial Services Guide and Advisor Profile for David Bertram" (the FSG). At the same meeting, Mr Bertram completed a questionnaire entitled "Fact Finder and Financial Needs Analysis" using information provided to him by the Seligs. The Judge found that a contractual relationship was formed between Wealthsure and Mr Bertram, on the one hand, and the Seligs, on the other, at this meeting by which, in consideration of commissions and fees, Wealthsure and Mr Bertram agreed to act as the Seligs' financial advisers. 161 Subsequently, on 15 November 2004, Mr Bertram prepared a document entitled "Cashflow and Debt Management Strategy Paper" (the Strategy Paper) for Mr Mackintosh to provide to the Seligs. The document had the heading "Asset Acceleration Group". 162 The Strategy Paper contemplated the Seligs borrowing $1,150,000 on a letter of credit and a further $350,000 on a margin loan. The Seligs would invest $700,000 in "Foundation" shares in Neovest to achieve a return of 20% per annum, $300,000 in "Equity" shares in Neovest to achieve a return of 15% per annum and $150,000 into managed funds. The balance, plus the $200,000 in cash which the Seligs had available through Jarone Pty Ltd, would be used to purchase seven investment properties at $365,000 each. 163 Later the same day or, on the Judge's findings at least by the end of November 2004, Mr Mackintosh met the Seligs and provided them with the Strategy Paper, bearing the letterhead of his business. This was the first of four such Strategy Papers which he provided. The others were provided to the Seligs on 25 January, 2 February and 18 April 2005. The Judge found that Mr Bertram had also prepared these Strategy Papers for Mr Mackintosh or was at least aware of their contents. 164 On or about 15 November 2004, Mr Bertram discussed investment in Neovest with the Seligs. He told Mr Selig that Neovest was seeking to raise $20 million capital for the Neolido Group and that it was paying dividends at a coupon rate of 15% or 20%, depending on the class of shares purchased. He also told Mr Selig that Neovest was proposing to pay dividends monthly. The Judge accepted that Mr Bertram told the Seligs that the income was not guaranteed and that the investment was not a capital guaranteed investment. He did, however, inform the Seligs that Neo Lido had guaranteed the loans and, in addition, that the directors of Neovest had given personal guarantees to Neovest which, according to research by Norton Capital, totalled $45 million collectively. However, the Judge also accepted that Mr Selig had an understanding at that time that he was being told that the investment was guaranteed. 165 On 29 or 30 November 2004, Mr Bertram met the Seligs again. During the course of the meeting, he handed to them a document which he had prepared entitled "Statement of Advice: Limited Advice" which was dated 29 November 2004. In this document, Mr Bertram recommended that the Seligs borrow $1,150,000 in addition to a margin loan of $350,000. He recommended that $1 million of these funds be invested in Neovest to generate an annual income of $200,000 (20%) paid monthly in arrears. Under the heading "Our Recommendations", Mr Bertram included the following: We have looked at the options you have available to you to commence further wealth creation. Property at this stage is appropriate as long as we can meet any cash flow shortfalls (negatively geared) via income from the other investments. The recommendation concerning property is significant bearing in mind some of the complaints raised by Wealthsure and Mr Bertram on the appeal. 166 Mr Bertram also provided to Mr and Mrs Selig a copy of the Norton Capital flyer prepared by Norton Capital in relation to Neovest. 167 On 16 December 2004, the Seligs signed a loan application with the National Mortgage Company seeking to borrow up to $2.3 million. The application contained a claim by Mr Selig that he had cash at bank of $80,000 which Mr Selig admitted in the trial was false. 168 On 9 December 2004, the Seligs executed contracts dated 15 December 2004 for the purchase of three off-the-plan units marketed by Mr Mackintosh. These were Lots 1, 7 and 9 at 78-80 Berrima Street, Wynnum in the sums of $375,000, $380,000 and $430,000 respectively (totalling $1,185,000). The deposits payable were $37,500, $38,000 and $43,000 amounting to $118,500 in total. The Seligs paid these deposits using loans totalling $959,000 advanced by National Mortgage Company which were made on 15 March 2005. Settlement was deferred until the properties were built and did not occur until 7 September 2005. The Seligs used moneys advanced by National Mortgage Company and ING, to which I will refer later, to effect the settlements. 169 The Judge found that the purchase of these units meant that the Seligs had no option but to proceed with the investment into Neovest because, without the high returns which they expected it to realise, they did not have sufficient income to meet the mortgage payments on the Wynnum units. 170 On or about 15 January 2005, Mr Bertram told Mr Selig that there was "a problem" with the Neovest prospectus. He said that this meant that the Seligs would have to wait to invest in Neovest but that that investment would certainly be available. Although the Judge did not make an express finding to this effect, it seems that the problem was that the first Neovest prospectus was to expire on 2 March 2005 (the date 13 months after it was lodged with ASIC) which meant that no shares could be issued by reference to it after that date. A second prospectus was registered with ASIC on 31 March 2005 and Mr Bertram provided it to the Seligs at a meeting on 18 April 2005. 171 At the same meeting, Mr Bertram provided the Seligs with a second document entitled "Statement of Advice: Limited Advice" which recommended initial borrowings of $450,000 with the whole of that sum to be invested in Neovest "generating you an annual income of 20.00% (paid monthly in arrears) or $90,000 per annum". The Judge held that this second statement of advice contained a number of shortcomings. In particular, he found that it contained recommendations which were not only inappropriate for the Seligs' circumstances but were based upon incomplete research and a misunderstanding of the second Neovest prospectus. 172 The Seligs acted on Mr Bertram's recommendation. They signed a Neovest application form for the purchase of $450,000 worth of "Foundation Shares". The Seligs also executed a document entitled "Authority to Proceed" authorising Mr Bertram to proceed in accordance with the document dated 18 April 2005 entitled "Statement of Advice: Limited Advice". 173 An amount of $450,000 from the moneys advanced by National Mortgage Company was then paid to Neovest and, on 22 April 2005, Neovest issued a Share Certificate to the Seligs recording the issue of 450,000 Foundation Shares paid to $1. A dividend could be paid on the Foundation Shares only if Neovest had first paid a dividend on its "Equity Shares" at the rate of 15%. On 7 May 2005, the Seligs received their first and only dividend cheque from Neovest for the sum of $7,500. 174 Unbeknown to the Seligs, ASIC had commenced surveillance on Neo Lido and Neolido Holdings in late March 2005. On 17 May 2005, ASIC issued interim orders to Neovest directing that no securities be offered, issued, sold or transferred in Neovest under the second prospectus. Neovest did not pay any dividends to the Seligs thereafter. The third defendant, Mr Spencer, wrote to the Seligs on 7 June 2005 informing them that Neovest's directors had decided to delay the declaration and payment of dividends until the concerns of ASIC had been satisfied. 175 Later in 2005, the Seligs increased their borrowings to $2.2 million. They did so by borrowing a further $221,000 from National Mortgage Company and by obtaining a loan from ING of $920,000. At the same time, the Seligs purchased a block of land at Yaroomba in Queensland with a view to building a duplex on it. They used some of the money borrowed from ING to make the purchase. 176 Mr Selig acknowledged that information which he had provided to National Mortgage Company in support of his application for increased borrowings was false and that he had made those statements in order to obtain the finance for which he was applying. 177 Ultimately, on 1 November 2007, ASIC applied to wind up Neovest and, on 5 February 2008, the Supreme Court of Queensland ordered its winding up. 178 The Judge considered that the second Neovest prospectus contained several shortcomings, including a number of material misstatements and omissions. In particular, on the Judge's findings, Neo Lido and Neolido Holdings were insolvent as at 29 March 2005 with the consequence that a number of statements in the second prospectus concerning them were inaccurate. 179 The Judge found that Wealthsure, Mr Bertram, Mr Norton and Norton Capital had failed to make a proper assessment of Neovest before approving it for investment and, in particular, that Mr Bertram did not have a proper basis for recommending Neovest to the Seligs. He considered that it was not feasible for Neovest to pay monthly dividends at a 20% coupon rate given that the sums invested in it were to be on-lent to development companies for activities which, by their very nature, would not generate immediate cash flow. Instead, what was contemplated was that the capital from later investors would be used to pay the dividends to the earlier investors. The Judge regarded this as a Ponzi Scheme, i.e., as dependent on future investments to meet the commitments to earlier investors. 180 The Judge concluded that the investment strategy recommended by Mr Bertram to the Seligs was inappropriate. 181 The Judge found that the Seligs had relied on the Cash Flow and Debt Management Strategy Papers and the Statements of Advice provided by Mr Bertram, as well as his oral advice, in deciding to make their investment in Neovest. He also found that the two Neovest prospectuses were a cause of the Seligs' loss, as were the representations in the Norton Capital Research Report and the Norton Capital flyer. 182 The Judge accepted that the Seligs had only entered into the contracts for the purchase of the three units at Wynnum in reliance upon the investment advice of Mr Mackintosh and Mr Bertram. 183 The Judge awarded damages as follows: Loss of the investment in Neovest $450,000.00 Capital losses on two of the units at Wynnum $20,000.00 Acquisition and selling costs of the units at Wynnum $84,697.08 Cost of establishing the National Mortgage Company loan $19,558.93 Cost of establishing the ING loan $14,862.21 Borrowing costs $128,000.00 Costs of refinancing the investment with Orio Mortgage $97,564.37 Loss of equity resulting from the forced sale of the two Sea Aura units owned by the Seligs $200,000.00 Pre-interest total (rounded down) $1,014,680 Compound interest (8.19% for 7 years) $745,832 TOTAL $1,760,512

184 As previously noted, ultimately the Judge entered judgment for the Seligs for this amount against only Wealthsure, Mr Bertram, Mr Norton and Mr Townley.

The issues on the appeal 185 At the appeal hearing, Wealthsure and Mr Bertram pursued 14 of the 21 grounds contained in their supplementary notice of appeal. The joint notice of appeal (entitled "Notice of Cross-Appeal") of the third, fourth and sixth defendants (Mr Spencer, Ms Perovich and Mr Townley) was filed by them as litigants in person. This notice of appeal, which is relevant only to the extent that it is pursued by Mr Townley, contained 18 grounds. Some of these were repetitive and some did not contain proper particularisation. 186 The grounds pursued by Wealthsure and Mr Bertram, and those of Mr Townley, give rise to the following issues for this Court's determination:

1. Did the Judge make findings which were inconsistent with the manner in which the Seligs had pleaded and conducted their case? (Grounds 13.1 and 13.2);
2. Did the Judge err by finding that Mr Townley as one of the directors of Neovest was liable under s 12DA of the ASIC Act and under ss 728, 729, 1041E and 1041H of the Corporations Act? (Townley Grounds 9-11, 13.2-13.5, 14, 15);
3. Did the Judge err by finding that Mr Townley as one of the directors of Neovest had caused the Seligs' losses? (Townley Grounds 1, 5);
4. Did the Judge err in assessing the Seligs' losses on the basis that, had they not been advised to invest in Neovest, they would have made no investment at all, i.e. in assessing the Seligs' losses on a "no transaction" basis? (Grounds 1 and 2);
5. Did the Judge err by awarding the Seligs damages for consequential losses, i.e., the losses resulting from their purchase of the three Wynnum units, including the losses resulting from their further borrowings? (Grounds 9, 10, 13.3 and 14; Townley Ground 4);
6. Did the Judge err by assessing the Seligs' damages on the basis that their shares in Neovest were worthless, with the effect that their investment has been wholly lost? (Grounds 3 and 4; Townley Grounds 16.10, 16.12 and 16.13);
7. Did the Judge err in the award of compound interest? (Ground 11);
8. Should the Judge have treated the Seligs' claims as "apportionable claims" for the purposes of s 1041N of the Corporations Act and s 12GR of the ASIC Act with the effect that judgment should have been entered against the appellants only for the amounts reflecting the extent of their respective responsibilities for the Seligs' losses? (Grounds 5 and 6; Townley Grounds 2, 3 and 6);
9. Was the Judge's allocation of responsibility for the Seligs' losses between the Seligs themselves, the appellants, Mr Norton and Norton Capital, and the Neovest directors inappropriate (Grounds 7, 8 and 12; Townley Grounds 7, 12, 13.1 and 17) and, in addition, did the allocation fail to have regard to the responsibility of Mr Mackintosh? (Townley Ground 8);
10. Did the Judge make a variety of factual errors as contended in Ground 16 of the Townley notice of appeal? 187 Several of the matters raised by the Townley grounds of appeal were not made the subject of argument by the solicitor who appeared for Mr Townley on the appeal, whether in his outline of submissions or in his oral submissions. In these circumstances, I have taken them to have been abandoned.

Issue 1: The Seligs' case and the Judge's findings 188 Wealthsure and Mr Bertram submitted that the Judge had made findings in favour of the Seligs on two topics which had not been pleaded by the Seligs nor made part of their case at trial. These were that Wealthsure and Mr Bertram had advised the Seligs to invest in a negative gearing strategy which was unsuitable for their needs and that they were liable to the Seligs in relation to their purchase of the Wynnum units recommended by Mr Mackintosh. 189 Wealthsure and Mr Bertram claimed that, by making these findings, the Judge had denied them procedural fairness, because they had not had the opportunity to prepare or conduct their defence and cross-claim to meet these cases, to join as cross-claimants those who had recommended the negative gearing strategy and the purchase of the units, and to explore the circumstances in which the negative gearing strategy and unit purchase advice had been given. 190 It is to be observed that Grounds 13.1 and 13.2 of the supplementary notice of appeal which raise the present issue complain only of the Judge's findings. They do not complain that the Judge found that the causes of action relied upon by the Seligs were established by these findings. Some of the submissions made on behalf of Wealthsure and Mr Bertram on the appeal overlooked this distinction and tended to assume that they had been found liable to the Seligs because of the impugned findings. 191 The Seligs' pleaded case as to the liability of Wealthsure and Mr Bertram related to the investment in Neovest. The "conduct" of Wealthsure and Mr Bertram on which the Seligs relied for their respective causes of action comprised conduct or omissions in relation to that investment and, in one plea, was described as personal financial "product" advice. The pleading was not direct to advice with respect to the negative gearing strategy more generally, or to the purchase of particular real estate. To that extent, the complaints of Wealthsure and Mr Bertram have a sound basis. 192 However, after pleading the loss of the $450,000 investment in Neovest and interest on that sum as loss resulting from the conduct of Wealthsure and Mr Bertram, the Seligs then claimed "consequential loss" arising from their borrowing to purchase real estate, including interest costs and losses occasioned by the forced sale of the Wynnum units. The Seligs pleaded that Wealthsure and Mr Bertram were aware that losses of this kind were a reasonable and likely consequence of them acting on the advice given to them in relation to the Neovest investment. 193 The Judge determined the Seligs' claim on the basis pleaded, that is, that Wealthsure and Mr Bertram were liable to the Seligs for the advice to invest in Neovest and for the losses resulting from the real estate investments as consequential losses. This is evident in the Judge's findings at [874]-[880] and [886]-[888] as to the particular conduct of Wealthsure and Mr Bertram which amounted to a failure on their part to exercise the care and skill required by the implied contractual term and by the common law duty of care; in the finding at [901] relating to the breach of s 945A of the Corporations Act; in the finding at [917] relating to the breach of the term implied by s 12ED of the ASIC Act; and in the finding at [937] that s 278 of the Corporations Act was contravened because of the misleading statements contained in the Neovest prospectuses. Although the Judge did not refer explicitly to the conduct of Wealthsure and Mr Bertram in relation to the Neovest investment in his conclusions on the other causes of action on which he found for the Seligs, it is implicit, in my opinion, that this was the basis of his findings. 194 That the Judge dealt with the Seligs' claim as pleaded is also evident in his causation findings. The Judge referred at [834]-[838] to the advice given by Mr Bertram to the Seligs in relation to the investment in Neovest, as distinct from his advice in relation to investment more generally, in finding that the various breaches by Wealthsure and Mr Bertram (as well as those of the other defendants) had caused the Seligs' losses. In addition, the Judge found that the two Neovest prospectuses and the representations in the Norton Capital Research Report and the Norton Capital flyer had been relied upon by the Seligs. In his findings concerning causation, the Judge did not refer at all to the investment advice of a more general kind which had been given to the Seligs by Mr Bertram. 195 The Judge's approach to the assessment of damages also reflects the Seligs' pleaded case. The Judge found first that the Seligs were entitled to damages for the loss of their investment in Neovest, together with interest on that loss. He then dealt with the Seligs' remaining claims as claims for consequential losses: at [1193] and [1198]-[1204]. 196 Ground 13.1 of the notice of appeal of Wealthsure and Mr Bertram listed a number of paragraphs in which the Judge was said to have made findings that they had advised the Seligs to invest in a negative gearing strategy which was unsuitable for their needs. The outline of submissions listed still further paragraphs. I have examined the identified paragraphs and consider that several cannot reasonably be understood as containing findings to the effect for which Wealthsure and Mr Bertram contended, these being paragraphs [295], [309], [333], [419], [436] and [836]. 197 However, there are some passages in the reasons which can be understood as findings that Wealthsure and Mr Bertram had recommended an inappropriate negative gearing strategy. These are paragraphs [765], [772]-[774], [1129] and [1186]. These were findings which were open on the evidence and Wealthsure and Mr Bertram did not contend to the contrary. The findings in these paragraphs did have relevance in the trial, in particular, as to the liability of Wealthsure and Mr Bertram for the claimed consequential losses. Although, as the Judge noted, damages in tort, contract and for breach of statutory prohibitions such as s 1041H of the Corporations Act are not necessarily to be assessed in the same manner, the circumstance that a form of consequential loss is reasonably foreseeable is pertinent to each of the first two forms of assessment and may be pertinent to the third: Nominal Defendant v Gardikiotis (1996) 186 CLR 49 at 54; Baltic Shipping Co v Dillon (1993) 176 CLR 344 at 368; Henville v Walker [2001] HCA 52 at [130]; (2001) 206 CLR 459 at 501-2. Accordingly, the finding that Mr Bertram and, through him, Wealthsure had recommended the negative gearing strategy of which the investment in Neovest was an essential integer was relevant and properly raised by the Seligs' pleading. It cannot be said that Wealthsure and Mr Bertram did not have proper notice of this claim. 198 Ground 13.2 listed the paragraphs in which the Judge was said to have found that Wealthsure or Mr Bertram were liable to the plaintiffs for the property purchases recommended inappropriately by Mr Mackintosh. The outline of submissions listed additional paragraphs. The impugned paragraphs are [371], [373], [376]-[377], [431], [434], [482], [769], [775]-[776], [778], [783]-[785], [788], [791]-[792], [808]-[810], [824], [834]-[835], [839] and [1200]. 199 I have reviewed each of those paragraphs. In my opinion, with one exception, none contains the finding of liability of which Wealthsure and Mr Bertram complain. They are, instead, the Judge's summary of the evidence, or factual findings in the Judge's narrative of events, or findings that the "whole strategy" developed by Mr Bertram and Mr Mackintosh for the Seligs was inappropriate. They are not findings of liability. 200 The exception is [1200]. That is a finding that Wealthsure and Mr Bertram are responsible for the consequential losses suffered by the Seligs by reason of their investment in the three Wynnum units. As already noted, that was part of the Seligs' pleaded case. Wealthsure and Mr Bertram had adequate notice that that claim would be advanced. 201 For these reasons, Grounds 13.1 and 13.2 of the supplementary notice of appeal of Wealthsure and Mr Bertram (to which the first issue relates) fail.

Issue 2: The liability of Mr Townley 202 Mr Townley submitted that the Judge had erred in finding him, as one of the original Neovest directors (with Mr Spencer and Ms Perovich), liable to the Seligs. This submission was made on a number of alternative bases. 203 By Grounds 9-11, Mr Townley contended that the Judge had erred in finding that he had contravened ss 728, 1041E, and 1041H of the Corporations Act, and s 12DA of the ASIC Act. 204 It is not necessary to set out these statutory provisions presently. It is sufficient to note that s 728 proscribes the offering of securities (including shares) under a disclosure document (such as a prospectus) if, amongst other things, it contains a misleading or deceptive statement, or omits material required by other provisions in the Corporations Act. Section 1041E proscribes the making of a materially misleading statement which is likely to induce another to apply for a financial product (for example, shares) when, amongst other things, the persons knows, or ought reasonably to have known, that the statement is false in a material particular or is materially misleading. Sections 1041H(1) and 12DA(1) proscribe conduct in relation to financial products or financial services (s 12DA refers only to financial services) which is misleading or deceptive. 205 The Judge found that the conduct of the Neovest directors in issuing the two Neovest prospectuses contravened these provisions. Mr Norton's contravention arose only from the issue of the second prospectus, as he was not a director of Neovest when the first was issued. 206 The Judge found that the second Neovest prospectus understated by $1.15 million the commission payable if the maximum subscription pursuant to the prospectus of $20 million was received (at [454]); it referred to only some of the litigation concerning planning disputes in which members of the Neolido Group were engaged (at [463]); it did not disclose that there had been sales of properties associated with foreclosure by a lender (at [464]); nor that an administrator had been appointed to one member of the Neolido Group on 23 December 2004 and a controller appointed to another on 18 January 2005 (at [465]); nor a loss by Neo Lido of $1.9 million and a deficit of its assets to liabilities of nearly $1.3 million (at [466]); nor that a statutory demand had been served on Neolido Holdings in February 2005 (at [469]); nor that Receivers and Managers had been appointed to both Neo Lido and Neolido Holdings on 27 September 2004 (albeit that the appointments were terminated on the same date) (at [290], [470]); nor that Neo Lido and Neolido Holdings had been in default with their financiers (at [471], [472]); nor that the Neolido Group was in substantial default in paying council rates, land tax, superannuation contributions, payments under rental hire contracts; and did not disclose a number of other matters commonly regarded as indicia of an entity being in financial straits, if not insolvent (at [476]). 207 Given these findings and Mr Townley's role as director of Neovest in the issuing of those prospectuses, the Judge's findings that Mr Townley contravened ss 728, 1041E, 1041H and 12DA were inevitable. Mr Townley's defence did not raise a plea under s 731, and it is not tenable to conclude that he had made all reasonable enquiries concerning the statements in the prospectus. 208 Grounds 13.2-13.5 alleged that the original Neovest directors had believed, honestly and reasonably, that the contents of the two Neovest prospectuses were appropriate, that they had those contents checked by lawyers, that they had not been fraudulent, and that they had not held back information from Mr Norton and Norton Capital when they were making their assessment of Neovest. The Judge did make some findings to this effect. 209 However, those findings are immaterial to the liability of Mr Townley. The subjective state of mind, including the intention, of a representor is not decisive of the question of whether conduct is misleading or deceptive within the meaning of s 1041H of the Corporations Act and s 12DA of the ASIC Act and their cognate provisions: Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 228. The proscription of conduct which is misleading or deceptive is not confined to conduct which is intended to mislead or deceive: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 197. The test is objective and the character of conduct said to be misleading or deceptive is to be determined by the Court on that basis. Accordingly, even if Mr Townley did have a bona fide belief as to the appropriateness of the representations in the two prospectuses, it would not mean that those representations could not be characterised as misleading or deceptive. 210 Similarly, a conclusion that a statement in a prospectus is false in a material particular or is materially misleading, or that the maker of the statement ought reasonably have known of its falsity or misleading nature, does not turn on the subjective state of mind of the maker. 211 By Grounds 14.1 to 14.4, Mr Townley complained that the Judge had erred in failing to take account of express disclosures or statements made in the two Neovest prospectuses. This was in the context that the application for shares pursuant to the prospectuses required each subscriber to declare that he or she had read the prospectus and that the Seligs had provided that declaration. 212 Mr Townley relied on passages in the prospectuses indicating that shares in Neovest involved a greater degree of risk and illiquidity than did investments generally; that investment in Neovest should be regarded as highly speculative; that there was no guarantee that Neovest would be able to meet the coupon rates attaching to the different classes of shares in paying dividends; that the 20% per annum rate applicable to Foundation Shares could be paid only after the 15% rate had been paid to Equity Shareholders; that higher returns generally indicated a higher risk of capital loss; that loans to the Neolido Group may be unsecured; and that redemption of the shares in Neovest may be subject to conditions. The Judge did not overlook these passages in the first prospectus as he quoted them in his reasons at [152], [155], [157], [159], [162], [170], [182] and [183]. Statements to similar effect were contained in the second Neovest prospectus. 213 Again, given the significant respects in which the second Neovest prospectus was found to be misleading and deceptive, I regard these complaints of Mr Townley as being of no moment. The inclusion of the statements that investment in Neovest was illiquid, speculative, not guaranteed and the other statements to which Mr Townley referred did not act as some kind of balm to salve the misleading effect of the prospectus. On the contrary, the circumstance that investment in Neovest was speculative and risky made it imperative that prospective subscribers for shares be informed accurately and completely of all matters bearing upon the nature and extent of the risks about which they were being warned. Plainly they were not. 214 These grounds of appeal of Mr Townley fail.

Issue 3: Mr Townley's causation of the Seligs' losses 215 By Grounds 1 and 5, Mr Townley contended, in effect, that the Judge should have found that the misleading and deceptive content of the Neovest prospectuses was not a cause of the Seligs' losses. Instead, Wealthsure and Mr Bertram should be regarded as the cause of those losses because they were the persons who had induced the Seligs to make the investment and to borrow funds to do so. 216 Mr Townley relied on two particular circumstances. First, the Wealthsure managing director and chief executive officer, Mr Pawski, had stipulated to Wealthsure's authorised representatives that borrowing for investment in Neovest was not permitted and that clients' investments should not exceed 15% of their net assets, excluding the family home. Mr Bertram had observed neither of these restrictions in his advice to the Seligs. 217 Secondly, on the Judge's findings, Neovest was not in any event a suitable investment for the Seligs and it was only because of the inappropriate advice of Wealthsure and Mr Bertram that they had made the investment in it. 218 In my opinion, neither matter avails Mr Townley. He did not point to any evidence that he had been aware of the restrictions on investments imposed by Mr Pawski and, in any event, the restrictions could not be said to have been imposed for the benefit of the Neovest directors. 219 Secondly, the circumstance that the Seligs' losses may also have been caused by breaches of duties owed by others did not diminish the causal effect of the contraventions of s 1041H and its cognates by Mr Townley and his fellow directors in issuing the Neovest prospectuses. The Judge found as a fact that the representations in the first Neovest prospectus were relied upon by the Seligs in entering into the contracts to purchase the Wynnum units and that the representations in both prospectuses had been relied upon by them in relation to the Neovest investment itself (at [840]). Although the Judge did not make a finding to this effect, it is likely that the content of the two prospectuses was also relied upon by Mr Bertram when making his recommendation to the Seligs. 220 This submission of Mr Townley appeared to be in the nature of an attempt to invoke the last opportunity rule. The submission does not succeed and Grounds 1 and 5 in his Notice of Cross-Appeal fail.

Issue 4: The no-transaction case 221 The Judge assessed damages in effect on the basis that, had it not been for the defendants' breaches, the Seligs would not have made any investment at all, that is, on a no-transaction basis (at [1192]). 222 Wealthsure and Mr Bertram contended that the Judge should have found that the Seligs had not established any loss because they did not prove what they would have done in the absence of the defendants' breaches. They submitted that the Seligs were not entitled to damages on a "no-transaction" basis as the evidence indicated that they would have had to engage in some high risk investment. Wealthsure and Mr Bertram referred in this respect to the Judge's findings at [423] that, once the Seligs had entered into the contracts on 9 December 2004 for the purchase of the Wynnum units, they had no option other than to proceed with the Neovest strategy because they did not have sufficient income to meet the mortgage payments on the three units. The effect was that the Seligs were not entitled to damages on the basis that they would not have made the Neovest investment at all. As they had not proved that there was an alternative investment available producing returns similar to those anticipated from Neovest, they had not proven a loss. 223 As is well-established, proof of loss requires a comparison to be made between the present position of the party claiming the loss or damage and the position in which that party would have been but for the contravening conduct: Marks v GIO Australia Holdings Ltd [1998] HCA 69 at [42]; (1998) 196 CLR 494 at 512-3; Henville v Walker [2001] HCA 52 at [132], [162]; (2001) 206 CLR 459 at 502, 509. In Gates v The City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 at 13, Mason, Wilson and Dawson JJ held: Because the object of damages in tort is to place the plaintiff in the position in which he would have been but for the commission of the tort, it is necessary to determine what the plaintiff would have done had he not relied on the representation. If that reliance has deprived him of the opportunity of entering into a different contract for the purchase of goods on which he would have made a profit then he may recover that profit on the footing that it is part of the loss which he has suffered in consequence of altering·his position under the inducement of the representation. This may well be so if the plaintiff can establish that he could and would have entered into the different contract and that it would have yielded the benefit claimed … The lost benefit is referable to opportunities foregone by reason of reliance on the misrepresentation. In this respect the measure of damages in tort begins to resemble the expectation element in the measure of damages in contract save that it is for the plaintiff to establish that he could and would have entered into the different contract. (Citations omitted) 224 Wealthsure and Mr Bertram referred to two authorities involving the application of these principles. The first was BHP Billiton (Olympic Dam) Corporation Pty Ltd v Steuler Industriewerke GmbH (No 2) [2011] VSC 659. In that case, Habersberger J held that the respondent (Steuler) had misrepresented the quality of a tank lining and that BHP Billiton's predecessor, WMC, had relied upon the misrepresentation in entering into a contract for the installation of the tank lining. However, Habersberger J declined to award WMC damages because it had not proved what it would have done had it not been misled. Habersberger J relied in this respect on an admission by WMC that it was not possible to say what would have happened if Steuler had not made the representations concerning the suitability of its lining, other than that some other lining would have been used (at [30]). This was in the context that the most obvious alternative lining had the same shortcomings as did the lining supplied by Steuler, and for the further reason that events quite independent of those shortcomings would have required the replacement of the lining in any event. 225 The second authority was the decision of the Full Court of the Supreme Court of South Australia in Copping v ANZ McCaughan Ltd (1997) 67 SASR 525. In that case, the Court upheld the trial Judge's finding that the plaintiffs were entitled to nominal damages only in consequence of their having entered into a foreign currency loan in reliance on a misrepresentation by the defendant. The Court considered that the plaintiffs would have had to satisfy their need for capital by some means and that they had not proven alternative means by which they would have done so. The Court considered that it had been open to the Judge to find that, in the plaintiffs' financial circumstances, they would, even in the absence of the misrepresentation, still have borrowed money offshore in the same way and suffered the same losses. 226 Wealthsure and Mr Bertram submitted that these authorities indicated the necessity for the Seligs to prove what they would have done in the absence of their breaches of duty in respect of the investment in Neovest. 227 The first difficulty for Wealthsure and Mr Bertram on these contentions is that the Judge did make findings of fact as to what the Seligs would have done had it not been for the breaches of duty (at [1186]): If the plaintiffs had been properly advised, they would not have engaged in negative gearing. They could only negatively gear if they had an income of such sufficiency that negative gearing would have been appropriate. When both of them had little or no working capacity, they could not achieve an income of that kind. In reality, and if they had been properly advised, they would not have entered into any speculative investments. If properly advised, they would not have wasted their assets, which was the consequence of Mr Bertram's advice. They would have consolidated those assets into the one property as the principal place of residence and sought whatever income was available to people who have no capacity to earn income. These findings of fact were not challenged on the appeal. 228 The submission of Wealthsure and Mr Bertram that, had they not breached their duties, the Seligs would still have made a high risk investment involves incongruity, given that they were the persons whom the Seligs had retained for financial advice. 229 As noted earlier, the Judge found that the FSG which Mr Bertram provided to Mr Selig on 11 October 2004 constituted the offer by Wealthsure and Mr Bertram to act as the Seligs' financial advisers, and that the offer had been accepted by the Seligs that same day. The FSG included the following representations which are pertinent presently: We will only recommend an investment to you after considering its suitability for your individual needs, objectives and circumstances. In general, we only recommend a product to you after considering its suitability for your individual needs, objectives and financial circumstances. … … We will explain to you any significant risks of financial products and strategies that we recommend to you in the financial report. If you require further clarification of the products and strategies we are more than happy to clarify those for you. These were the responsibilities to the Seligs accepted by Wealthsure and Mr Bertram. There was no suggestion that the Seligs had retained other financial advisers or that they were obtaining financial advice at the time from other sources. It is reasonable to suppose that if Wealthsure and Mr Bertram had given advice conforming with their respective responsibilities in relation to other investments, the Seligs would have acted on that advice. As the Judge found at [1186], this would not have involved the Seligs entering into speculative investments. 230 In these circumstances, it is in my opinion incongruous for Wealthsure and Mr Bertram to contend that, had they not breached their duties by the advice which they gave with respect to the investment in Neovest, the Seligs would still have embarked on some other high risk and inappropriate investment. 231 The circumstance that the Seligs had committed themselves to the purchase of the three Wynnum units on 15 December 2004 and had thereby apparently locked themselves into proceeding with the Neovest investment is, in my opinion, immaterial. From the commencement of the Seligs' contact with Mr Bertram on 29 September 2004, the two elements of purchase of the Wynnum units and investment in Neovest had been inter-dependent. Neither would have proceeded without the other. The Judge made a finding to this effect at [839]. It would have been artificial for the Judge to have treated the Seligs' entry into the contracts on 15 December 2004 as being causally unrelated to the investment in Neovest. 232 Accordingly, Grounds 1 and 2 in the notice of appeal by Wealthsure and Mr Bertram fail.

Issue 5: The liability for the Seligs' consequential losses 233 Each of Wealthsure and Mr Bertram and Mr Townley submitted that they should not have been found liable for the Seligs' consequential losses. 234 As previously noted, having found that these defendants were liable to the Seligs for the loss of the $450,000 investment in Neovest and interest on that sum, the Judge found that they were also liable for some of the consequential losses claimed by the Seligs. These comprised the capital losses suffered by the Seligs on two of the Wynnum units, the cost of acquiring and selling the three Wynnum units, the cost of establishing the National Mortgage Company and ING loans, borrowing and refinancing costs, and the loss of equity resulting from the forced sale of the Seligs' two Sea Aura apartments. 235 It is necessary to consider separately the respective positions of Wealthsure and Mr Bertram, on the one hand, and Mr Townley, on the other, in relation to the consequential losses.

The submissions of Wealthsure and Mr Bertram 236 Wealthsure and Mr Bertram submitted that the Seligs should have been regarded as solely responsible for much of their consequential losses. At first blush, this seemed a surprising submission given that Mr Bertram and through him, Wealthsure, well knew that the Seligs' investment in real estate provided the rationale for the investment in Neovest. The risk of loss resulting from those investments if the Neovest investment failed was accordingly reasonably foreseeable to them and Mr Bertram 237 However, Wealthsure referred to the circumstance that the Seligs had purchased vacant land at Yaroomba for $285,000 (signing the contract on 16 November 2005 and settling on 23 June 2006) with the intention of building a duplex on it. The Seligs sold the Yaroomba property to Mr Selig's son in October/November 2007 for $350,000 when it became apparent to them that they did not have the financial capacity to build the duplex. They claimed in the proceedings, as part of their loss against the defendants, damages for the loss of opportunity to develop that property. 238 The Judge disallowed that claim, as he was not satisfied that the Seligs would have had the capacity to develop the Yaroomba property even if they had not implemented the strategy suggested by Mr Bertram and Mr Mackintosh, and was satisfied that the Seligs' decision to purchase the Yaroomba property had been made independently of their decision to invest in Neovest and to purchase the Wynnum properties. 239 Wealthsure and Mr Bertram submitted that the Judge should have reached the same conclusion in relation to the Seligs' purchase of the Wynnum units and in relation to their borrowings to finance the purchase of those units. They referred to the fact that the Seligs had committed themselves to the purchase of the Wynnum units on 9 December 2004 at a time when they did not have finance with which to complete the purchases; to Mr Selig's evidence that he had made the decision to purchase those units relying on his own experience in property development and on Mr Mackintosh's advice, and without acting on printed advice in the standard form contract used for the purchase of the units that purchasers should obtain independent legal advice and valuations before signing the contract, and without a formal valuation of his own assets. Wealthsure and Mr Bertram characterised the Seligs' conduct in these circumstances as "precipitous" with the consequence that they should have been held responsible themselves for the losses which followed from their acquisition of the Wynnum units. 240 Mr Bertram's active involvement in, and encouragement of, the strategy pursued by the Seligs in relation to the purchase of the Wynnum units made this a remarkable submission. It is all the more remarkable given the responsibilities which Wealthsure and Mr Bertram had assumed to the Seligs by accepting the retainer as their financial advisers on 11 October 2004. 241 Those matters, by themselves, indicate that the circumstances in which the Seligs committed themselves to the purchase of the Wynnum units were materially different from those relating to their purchase of the property at Yaroomba. They also indicate that it would have been inappropriate for the Judge to have applied his conclusions with respect to the Seligs' purchase of the Yaroomba property to his assessment of the liability of Wealthsure and Mr Bertram for the losses consequent upon the Seligs' purchase of the Wynnum units. 242 Wealthsure and Mr Bertram made an alternative submission by reference to the Seligs' conduct after they had entered into the contract to purchase the three Wynnum units. They submitted that the Seligs had engaged in "unexplained and profligate spending" of over $200,000 in a four month period from December 2004; that they had engaged in further unrelated expenditure later in 2005; and that they had induced their financiers to advance loans by making false statements concerning their financial circumstances. Wealthsure and Mr Bertram submitted that the effect of these matters was that the Seligs did not have the financial capacity to fund their investments with the consequence that they were bound to fail in any event. This meant that the losses which followed could not properly be regarded as consequential upon the loss of the Neovest investment. 243 The submission was advanced in the following way. The total purchase price of the Wynnum units, including the deposit and purchase costs, was $1,235,000. This amount and the $450,000 invested in Neovest totalled $1,685,000. If this amount had been borrowed in full, the annual interest liability (using a blended interest rate) would have been of the order of $131,000 per annum. 244 The interest liability on the Seligs' borrowing of $2.2 million (using the same blended interest rate) was $170,500 per annum, yet even with the expected income from the Neovest investment, the Seligs' income of $162,800 would have been insufficient, even without allowing for their living expenses, to meet these borrowing costs. This indicated that it was the Seligs' purchase of the Yaroomba property for $285,000 and their additional expenditure which led to the Seligs' expected income being insufficient to meet their borrowing costs. 245 Wealthsure and Mr Bertram also made the point that the Seligs had entered into the contract to buy the Yaroomba property at a time when they knew that Neovest was not paying the anticipated dividends and emphasised the false statements made by the Seligs to their financiers by which they had obtained loans which would not otherwise have been made available to them. 246 Having regard to these matters, Wealthsure and Mr Bertram submitted that the Seligs could have avoided the consequential losses if they had made only the Neovest and Wynnum unit investments, but were bound to fail having borrowed to purchase the Yaroomba property in the light of their other expenditures. Thus, it could not be said that the claimed consequential losses were truly consequential upon the loss of the Neovest investment. 247 There was some evidence that the Seligs were living above their means and the Judge found at [1216] that they were not good financial managers. However, the Judge's findings also indicate the use to which the majority of their borrowings of $2.2 million were made: • The purchase of the Wynnum units including purchase costs (at [1217]) $1,235,000 • Neovest investment $450,000 • Yaroomba purchase price $285,000 • Payments on account of Jarone Pty Ltd for: GST (at [447]) $54,640 Tax (at [526]) $43,285 Superannuation (at [526]) $38,702 TOTAL $2,106,630 The evidence did not explain the use of the balance of approximately $100,000. 248 I do not consider that the Judge was bound to conclude that the Seligs could not have financed their borrowings, after allowing for living expenses even had Neovest succeeded. As previously noted, the Seligs' company, Jarone Pty Ltd, had received a payment of $213,000 in December 2004. I also note that Jarone's profit for the financial years ending in June 2004 and June 2005 was of the order of $181,000 and $296,000 respectively. It seems that these funds were available to the Seligs. In any event, it was open to the Seligs to sell one or more of the Wynnum units (as they did in late 2007 to reduce their interest liability). 249 I also observe that, if the Seligs had borrowed only to finance the purchase of the Wynnum units and the Neovest investment, which on the Judge's finding at [1127] totalled $1,685,000, the interest liability would have been approximately 80% of the anticipated income, and would have meant that they had only $32,000 per annum for living expenses. Although the Judge did not make a finding to this effect, it is doubtful whether an arrangement of that kind would have been viable on a prolonged basis, without use by the Seligs of their interest in the Jarone Pty Ltd assets, and yet this is what Wealthsure and Mr Bertram recommended to them. 250 For these reasons, I consider that Wealthsure and Mr Bertram have not established that the Judge was in error in holding them liable for the Seligs' consequential losses.

Mr Townley's submissions 251 Mr Townley also submitted that he should not have been held responsible for the consequential losses of the Seligs. However, apart from making bald assertions (3.1, 3.2 of the Outline), this complaint was not developed in either the written outline or the oral submissions made on Mr Townley's behalf. Similarly, with the exception of one bald assertion ([91] of their Outline), the Seligs did not address this issue in their submissions. 252 In making his finding that the defendants were liable for the Seligs' consequential losses, the Judge did not distinguish between Wealthsure and Mr Bertram, on the one hand, and the other defendants, on the other. His finding at [1200] was that the conduct of "the defendants" had led to the Seligs' investment in the three units at Wynnum and to the loss and damage which they thereby suffered. 253 However, Mr Townley's position was different from that of Wealthsure and Mr Bertram because he was not aware, and could not reasonably have been aware, that the Seligs were making the investment in Neovest with a view to financing the purchase of the three Wynnum units. There was, accordingly, a basis upon which his position could be distinguished from that of Wealthsure and Mr Bertram. 254 Sections 729, 1041I and 1325 of the Corporations Act, and s 12GF of the ASIC Act, which entitled the Seligs to recover damages for the respective contraventions are expressed in similar, but not identical, terms. Section 729 allows a person who suffers loss or damage "because" an offer of securities under a disclosure document contravenes s 728(1) to recover the amount of the loss or damage from the contravenor. Section 1325 is expressed in (relevantly) similar terms. Section 1041I permits a person who suffers loss and damage "by" conduct of another which contravenes identified provisions, including ss 1041E and 1041H, to recover the amount of loss and damage from the contravenor. Section 12GF is expressed in similar terms. These provisions are, in turn, similar to s 82 of the former Trade Practices Act 1974 (Cth) (TPA) and s 236 of the Australian Consumer Law. 255 The words "because" and "by" indicate the requirement for a causal connection between the contravention in question and an applicant's loss and damage. 256 As is well-established, causation is essentially a question of fact to be determined in a practical way having regard to common experience: March v E&MH Stramare Pty Ltd (1991) 171 CLR 506; Henville v Walker [2001] HCA 52; (2001) 206 CLR 459. In that determination, policy considerations, value judgments and the concepts of remoteness and reasonable foreseeability may all play a role. 257 At common law, the issue of remoteness is determined by enquiring whether the kind of loss suffered by the plaintiff was reasonably foreseeable as a possible consequence of the defendant's breach of duty. If not, the loss will generally be regarded as too remote from the defendant's tort. 258 In the present context, the possibility of an investor borrowing the funds with which to make the investment in Neovest was plainly reasonably foreseeable to someone in Mr Townley's position. The practice of persons borrowing moneys with which to make share investments, as well as investments in real estate, was well-established in 2004 and 2005. In addition, on the interest rates prevailing in 2004 and 2005, the costs associated with borrowing for an investment in Neovest were significantly less than the anticipated return from the investment. There would be no difficulty in concluding that Mr Townley should have foreseen that persons subscribing for shares in Neovest may borrow the funds with which to do so, and would thereby suffer loss if the investment failed. There is also no difficulty in concluding that the Judge was correct in finding that the causation required by ss 729, 1041I and 1325 was satisfied in relation to these borrowings. 259 The more acute question of causation on this ground of appeal arises because of the investment decisions made by the Seligs. The decisions to invest in the Wynnum units and to obtain the associated borrowings would not have been made "but for" the contravening conduct of the defendants, including Mr Townley. To the extent that satisfaction of the "but for" test is a necessary condition for a finding of causation, that condition is satisfied. 260 However, satisfaction of the "but for" test in a simplistic sense may not be sufficient to establish the causal relationship required by ss 729, 1041I and 1325. Some exercise of evaluative judgment having regard to the legislative policy and objectives remains necessary. Considerations akin to those of reasonable foreseeability and remoteness at common law may play a part in that evaluation although their role in circumstances like the present has not yet been finally determined. It may be that liability under provisions such as ss 729, 1041I, 1325 and 12GF is not limited by concepts of foreseeability or remoteness: Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 526; Henville v Walker [2001] HCA 52 at [95]-[96]; (2001) 206 CLR 459 at 489-90. 261 The nature of the proscriptions contravened by Mr Townley must be kept in mind. It is one thing to say that a contravenor who was offered shares under a misleading disclosure document (s 728) can be taken to have foreseen that a person investing in the shares may suffer loss; but another to hold that the contravenor should be liable for losses which that person may suffer on another investment. The same can be said of a contravenor who makes misleading statements in relation to financial products which are likely to induce a person to acquire or dispose of financial products (s 1041E) and of the contravenor who engages in misleading or deceptive conduct in relation to a financial product or financial service (s 1041H). Often, the contravenors of those provisions will have no knowledge of a particular investor at all, let alone of the circumstances of the investor or of the investor's financial plans. The investment practices of investors may be so diverse as to preclude a conclusion that particular investments were so common as to have been contemplated by the contravenor. 262 In the present case, the Seligs' losses arising from investment in the Wynnum units and their associated additional borrowing had concurrent causes: the Seligs' reliance on the representations concerning investment in Neovest and their pursuit of a larger investment strategy. The circumstance that the contravening conduct was not the sole cause of their subsequent loss is not decisive, as recovery under ss 729, 1041I and 1325 is not restricted to losses of which the contravening conduct is the sole cause: see in relation to s 82 of the TPA, I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41 at [33], [57]; (2002) 210 CLR 109 at 121-2, 128. But this still leaves open the possibility that the Seligs' consequential losses should not be regarded as having been caused by the contravening conduct because they were unrelated to that conduct. 263 The factors which support Mr Townley being liable for the Seligs' consequential losses seem to be these. The investment in Neovest was part of a larger investment strategy by the Seligs and inter-dependent with other elements of that strategy, in particular, the real estate investments and additional borrowings. The Neovest investment was an integral part of a composite whole. That is so despite the short lapse of time between the Seligs committing themselves to the purchase of the Wynnum units and the making of the Neovest investment. In that sense, the investment in the real estate and the additional borrowings were related to the contraventions of Mr Townley. 264 In addition, the contravenors (including Mr Townley) held out investment in Neovest as having particular features which made it attractive to those pursuing a composite investment strategy. Those features included the high rate of return, the payment of dividends monthly, and the ability to redeem the investment after 12 months. 265 This combination of circumstance makes the present an unusual and distinctive case. They count against the Seligs' investment in the real estate and the associated borrowings being regarded as being so separate and independent of the statutory contraventions as to be causally unrelated to those contraventions. 266 As already noted, Mr Townley's submissions on this issue comprised no more than bare assertion. The Court did not have the benefit of developed argument. 267 In the unusual circumstances of this case, I consider that it was open to the Judge to conclude that the necessary causal connection existed between Mr Townley's contraventions and the Seligs' consequential losses. 268 I conclude that Mr Townley has not made out Grounds 1, 4 and 5 in the "Notice of Cross-Appeal".

Issue 6: Were the shares in Neovest worthless? 269 The Judge held that the Seligs were entitled to damages for their investment in Neovest on the basis that that investment had been wholly lost. He held at [1194] that "[b]ecause Neovest is insolvent, the plaintiffs, as shareholders, have no recourse to their investment". The Judge then continued: [1195] As I have mentioned, the first and second defendants claim that that aspect of their damages has not been established because the plaintiffs have not established that Neovest's liabilities exceed its assets, or that the guarantees given by Mr Spencer and Ms Perovich to Neo Lido, Neolido Holdings and the Neolido Group are not sufficient for those entities to repay the loans to Neovest. [1196] In my opinion, that argument cannot be accepted. The plaintiffs have established that Neo Lido, Neolido Holdings and the Neolido Group were insolvent at the time that the prospectus was issued. Indeed, that was the first and second defendants' case as well. Neo Lido and Neolido Holdings have been wound up in insolvency. The plaintiffs have also established that Neovest is insolvent and Neovest has been wound up in insolvency. [1197] In those circumstances, the plaintiffs need go no further to prove that the investment in Neovest has been lost. The whole of the investment must have been lost if Neovest's liabilities exceed its assets. There can be no return to the equity investors in those circumstances. 270 Each of the appellants challenged the Judge's conclusion in these paragraphs (Grounds 3 and 4; Townley Grounds 16.10, 16.12 and 16.13) and contended that the Judge should have found that the Seligs had failed to prove their loss because they had not established that the shares in Neovest were worthless. 271 Neovest is in liquidation. ASIC applied for the winding-up of Neovest on 1 November 2007 and the Supreme Court of Queensland made that order on 5 February 2008. 272 Wealthsure and Mr Bertram submitted, referring to The Bell Group Ltd (in liquidation) v Westpac Banking Corporation (No 9) [2008] WASC 239 at [1065]-[1067], that a finding that a company is insolvent says little about whether the liabilities of the company exceed its assets. That is because a company may be insolvent in a cash flow sense or in a balance sheet sense or both. It is only when a company is insolvent in a balance sheet sense, i.e., when its liabilities exceed the value of its assets, that it may be said that the shares in the company have no value. The appellant submitted that the Seligs had not proven that Neovest was insolvent in the balance sheet sense and, accordingly, that the findings of the Judge at [1194]-[1197] were unsound. 273 Junior counsel for Wealthsure and Mr Bertram referred to guarantees provided to Neovest by Mr Spencer and Ms Perovich, and to their interest, said to be 50%, in a project for the subdivision of vacant land known as the "Mango Hill Development". He submitted that evidence in the form of a valuation indicated that this development "may be worth as much as $160 million" with the consequence that the interest of Mr Spencer and Ms Perovich may have a value of approximately $80 million. The suggestion was that this constituted an asset available to support the guarantees of Mr Spencer and Ms Perovich to Neovest, with the consequence that its shares could not be regarded as worthless. Counsel referred in addition to the absence of any evidence from the liquidator of Neovest as to its state of affairs. 274 Wealthsure and Mr Bertram submitted, accordingly, that the Judge had been in error to make the finding that the Seligs' shares in Neovest were worthless. The submissions made on Mr Townley's behalf were to similar effect. 275 There are a number of difficulties with these contentions. 276 First, the valuation from Tony Sergiacomi & Associates Pty Ltd (TSA) provided in November 2007, to which counsel referred, was made on the assumption that the requisite development approvals for subdivision would be granted for the Mango Hill land. The Court was not referred to evidence indicating the grant of such approvals. 277 Secondly, the valuation was of the freehold interest in the land. The Court was not taken to evidence concerning the extent to which the land was encumbered, or other evidence indicating that Mr Spencer or Ms Perovich had any equity in the land after allowance was made for liabilities secured by the land. Given the evidence in the trial generally as to the parlous financial state of members of the Neolido Group, one would not readily infer that the Mango Hill land was unencumbered. 278 Thirdly, the Supreme Court of Queensland made an order for the winding-up of Neovest on 5 February 2008. Mr Spencer and Ms Perovich had each been declared bankrupt in August 2007. More than four years had elapsed in each case by the time of trial. The liquidator of Neovest had, therefore, had a considerable time in which to pursue action under the guarantees if it was thought worthwhile and for the trustees in bankruptcy of Mr Spencer and Ms Perovich to realise any value which they held in the Mango Hill land. No party adduced evidence that the liquidator or the trustees in bankruptcy had taken any such action, let alone evidence as to results of the action in this respect. 279 Mr Spencer's interest in the Mango Hill Development was held as trustee of a trust. It is not clear whether it would be available to support a guarantee in his personal capacity. 280 The possibility that the shares in Neovest may have had some residual value by reason of the guarantees of Mr Spencer and Ms Perovich, and their interest in the Mango Hill Development, appears to have emerged relatively late in the trial. It was not raised in the defence by any defendant in answer to the Seligs' claim that they had lost their investment in Neovest. In fact, the written opening of Wealthsure and Mr Bertram provided on 30 March 2012 acknowledged at [2.1] and [26] that, if the Seligs established that they were liable, the proper quantum of their claim was the loss of the investment of $450,000 in addition to interest. This acknowledgement is inconsistent with the contention now made by Wealthsure and Mr Bertram. 281 The submissions at trial in relation to the tender of the TSA valuation indicated that its tender (which was opposed by Wealthsure and Mr Bertram) was directed to the issue of the solvency of Neovest at the time the second Neovest prospectus was issued, rather than the issue of whether the shares in Neovest had any value at the time of trial. This makes it understandable that the matters just identified were not addressed at the trial. 282 Junior counsel for Wealthsure and Mr Bertram on the appeal emphasised that it was for the Seligs to prove their loss, and not for the defendants to disprove it, and that, of course, is the case. However, it is appropriate to have regard to the forensic context at trial. The Seligs had proven that Neovest was in liquidation and had thereby adduced prima face evidence of its insolvency. In addition, they adduced evidence that the directors of Neovest (including Mr Townley) had resolved on 2 January 2008 that: • In the opinion of the directors, the company is insolvent, or is likely to become insolvent at some future time; and • An administrator of the company should be appointed; and • The company appoint an administrator of the company. The directors then resolved that a Mr McLeod be appointed as administrator. 283 In my opinion, these circumstances suggested, prima facie, that Neovest was insolvent and its shares worthless. That was sufficient in the context of the trial, which included the pleadings and the opening, to impose an evidential burden on the defendants to show that the shares in Neovest did have some residual value. For the reasons given earlier, the TSA valuation did not have that effect. The defendants did not discharge the evidential burden. 284 For these reasons, these grounds of appeal fail.

Issue 7: Damages by way of compound interest 285 Having assessed the Seligs' damages at $1,014,680, the Judge then awarded them compound interest at the rate of 8.19% for seven years, that is, $745,832. (The Judge's original reasons indicated that the interest was calculated for a period of six years, but this period was amended to seven years by a corrigendum. The amount of $745,832 remained unchanged.) 286 The Judge's explanation for the award of compound interest was as follows: [1274] The plaintiffs have been paying interest on [$1,014,680] since they first borrowed money to implement the strategy. They suffered some aspect of their loss at 22 April 2005 and some other aspects later. It is not possible to be precise as to when each aspect of their damages was suffered. I think justice would be served if the plaintiffs were awarded compound interest at the rate of 8.19% (the only rate of which there is some evidence) for six years. In a rough and ready way, that allows for some damage being suffered more than a year after the strategy was implemented. I calculate compound interest on the figure of $1,014,680 at 8.19% to be $745,832. Although the Judge did not say so, it is evident that he made this calculation by compounding the losses annually. 287 Earlier, at [1204], the Judge had noted that although the parties were referring to this head of damage as "interest", it was not an amount payable pursuant to s 51A of the Federal Court of Australia Act 1976 (Cth) but instead as an item of damage to compensate the Seligs for their loss. That is, it was to be included in the assessment as Hungerfords v Walker (1989) 171 CLR 125 damages. 288 As the Judge awarded compound interest in respect of each of the heads of damage which he allowed in favour of the Seligs, he did not allow the Seligs any pre-judgment interest pursuant to s 51A of the Federal Court Act. 289 In relation to the award of compound interest on the loss of the $450,000 investment in Neovest, the Judge said: [1204] The plaintiffs are entitled to damages for the loss of the $450,000 investment in Neovest. They are entitled to the compound interest on that amount to trial. The compound interest to which they are entitled represents their loss. They had to pay interest on interest (compound interest) to their financiers. Compound interest is, therefore, one item of their loss. … The calculation of the compound interest was agreed at $310,567. The interest rate relied upon was 8.8%. The use of that interest rate was never satisfactorily explained. The evidence shows that the plaintiffs borrowed at 8.19%. Later they paid a higher rate. In the absence of evidence, it would be appropriate to use 8.19%. … 290 On the appeal, Wealthsure and Mr Bertram made the point that at the trial they had agreed only the calculation of $310,000 and not that that amount was an appropriate award in respect of this head of damage. They emphasised, however, that they did not take any issue with the calculation of $310,000 in respect of the loss of $450,000 for the period of seven years between 20 April 2005 and 18 April 2012 (when the trial concluded). Although counsel did not say so, that may well have been because the figure of $310,000 was an under-estimate of the entitlement on that component of the judgment, given that it was calculated as at the date of closing submissions in April 2012, rather than at the date of judgment (18 April 2013). 291 Wealthsure and Mr Bertram made three criticisms of his Honour's calculation of the compound interest awarded as damages. First, that the rate of 8.19% applied by the Judge was too high because it was the rate applicable to only one of the three loans taken out by the Seligs in 2005 and the rates on the others were lower (7.94% per annum in one case and 7.59% on the ING loan). Secondly, Wealthsure and Mr Bertram submitted that the Judge had erred in calculating the compound interest on the damages for seven years because some of the losses making up the total of $1,014,680 had been incurred for shorter periods. Thirdly, Wealthsure and Mr Bertram contended that it had been an error to calculate the compound interest on the capital losses caused by the forced sale of the Seligs' two Sea Aura apartments because they were already owned by the Seligs and, unlike the other heads of damage, did not have borrowing costs associated with them. 292 I would reject the first two of these criticisms but uphold the third.

A uniform rate of 8.19% 293 As to the challenge to the use of a rate of 8.19%, I set out in the following table a summary of the rates of interest charged to the Seligs on various of their loans: No. Lender/ Principal Period Interest Rate Tender Book Page Nos. Account No.

1. Adelaide Bank/National Mortgage Company 0037874112 - RX01 $399,000 Extended to $600,000 in Aug/Sept 2005 2.3.05 - September 2005 8.19% 1472-1484, 2783-2799, 1543-1552
2. Adelaide Bank/National Mortgage Company 0037874112 - RX02 $560,000 Extended to $680,000 in Aug/Sept 2005 5.3.05 - August 2006 5.3.05 - 21.4.06 7.94% 1526-1539, 1597-1651, 1556-1565 22.4.06 - 21.7.06 8.19% 22.7.06 - 21.8.06 8.44%
3. National Mortgage Company 23444247 $120,000 1.9.05 - August 2006 1.9.05 - 1.5.06 7.59% 2709-2737 2.5.06 - 1.8.06 7.84% 2.8.06 - 18.8.06 8.09%
4. National Mortgage Company 23444225 $800,000 1.9.05 - August 2006 1.9.05 - 1.5.06 7.59% 2676-2708 2.5.06 - 1.8.06 7.84% 4.8.06 - close 8.39%
5. ING/National Mortgage Company $795,000 or $920,000 7.9.05 - ?? 7.59% 2667-2675
6. Orio $605,376.41 11.7.06 - 1.1.08 11.7.06 - 17.7.06 7.79% 3046-3054, 3244, 3248-3253, 3157, 3004-3045, 3459 Loan reference no. 163542 Account no. 100043739 and 100045128 17.8.06 - 1.7.07 8.29% 1.7.07 - 1.1.08 9.09%
7. Orio $686,093.27 11.7.06 - 1.1.07 11.7.06 - 1.1.07 7.79% 3055-3062, 3156, 2989-3003, 3245 Loan reference no. 163543 Account no. 100043738
8. Orio $228,000 22.6.06 - 1.1.08 22.6.06 - 1.7.06 8.24% 3117A-3117F, 3090-3100, 3070 Account no. 100043135 Loan reference no. 160350 1.7.06 - 1.1.07 8.74% 1.7.07 - 1.1.08 9.54%
9. Orio $300,000 - $306,000 16.8.06 - 1.1.08 16.8.06 - 1.7.07 8.29% 3228-3235, 3205-3216, 3243 Account no. 100045062 Loan reference no. 165255 1.7.07 - 1.1.08 9.09%
10. Orio $356,250 16.8.06 - 1.7.08 16.8.06 - 1.7.07 10.19% 3221-3227, 3524 Account no. 100045065 Loan reference no. 164783 1.7.07 - 1.7.08 10.99%
11. Orio $380,000 16.8.06 - 7.1.08 16.8.06 - 1.7.07 10.19% 3237-3241, 3556 Account no. 100045064 Loan reference no. 164786 1.7.07 - 1.1.08 10.99%
12. Orio $679,925 17.8.06 - 12.4.10 17.8.06 - 5.11.06 8.04% 3254-3263 Account no. 100045131 15.11.06 - 14.8.07 8.29% 14.8.07 - 15.10.07 8.54% 15.10.07 - 17.11.07 8.84% 17.11.07 - 9.2.08 9.09% 9.2.08 - 17.3.08 9.34% 17.3.08 - 5.5.08 9.69% 5.5.08 - 30.7.08 9.79% 30.7.08 - 22.9.08 9.94% 22.9.08 - 27.10.08 9.69% 27.10.08 - 24.11.08 8.89% 24.11.08 - 22.12.08 8.14% 22.12.08 - 23.2.09 7.14% 23.2.09 - 23.4.09 6.24% 23.4.09 - 7.10.09 6.14% 17.10.09 - 2.11.09 6.39% 12.11.09 - 7.12.09 6.64% 17.12.09 - 11.3.10 7.01% 11.3.10 - 18.3.10 7.26%

The evidence did not indicate the rates paid by the Seligs after April 2010. 294 The table indicates that some of the rates of interest initially charged to the Seligs were a little less than 8.19%; that for the most part the rates charged between August 2006 and December 2008 well exceeded that figure; and that thereafter the rates were less than 8.19%. It also indicates that the Seligs paid the higher rates at times when their borrowings were greater. 295 The submissions of Wealthsure and Mr Bertram focussed on the rates applicable to the loans taken out in September 2005 and did not take account of the changes in interest rates charged from time to time. 296 I consider that the Judge's use of a single rate of interest for his calculation was practical. As the Judge himself acknowledged, his calculation sought to achieve justice in a "rough and ready" way. 297 In my opinion, the reliance by Wealthsure and Mr Bertram on the rates initially charged to the Seligs does not demonstrate error in the Judge's use of the rate of 8.19% for the whole period. That is so having regard to the circumstance that some rates paid by the Seligs well exceeded 8.19% and that the higher rates were applicable when the Seligs' liabilities were at their greatest.

The allowance for seven years 298 Wealthsure and Mr Bertram's second submission related to the period for which compound interest was allowed. They contended that allowance for all heads of damage for the period of seven years had been inappropriate. 299 The compound interest was to be calculated by reference to the date of judgment (18 April 2013) and not the date of the conclusion of trial. That was some eight years after the Seligs had suffered the loss of the Neovest investment. Some of the other losses had also been suffered more than seven years before judgment. They were the acquisition costs of the Wynnum units, the costs of establishing the National Mortgage Company loans in March 2005, the establishment of the further borrowings in August and September 2005, and the establishment of the ING loan in September 2005. However, the remaining losses had been suffered for periods of less than seven years. It is obvious that the Judge's use of seven years reflected an attempt at averaging. As the Judge himself observed at [1274], there were difficulties in being precise as to when each aspect of the damages was suffered by the Seligs. 300 On the appeal, the Seligs' counsel provided a table which sought to address this difficulty, and thereby to allow more accurate calculation of the compound interest. This table identified with some precision the periods during which interest had been charged to the Seligs in respect of each head of loss. I did not understand Wealthsure and Mr Bertram to dispute either the periods or the calculations in the table. 301 The calculation in the table was made using an interest rate of 8.19% on two alternate bases: compounding annually and monthly. Although the Judge made his calculation compounding on an annual basis, monthly compounding seems to be more appropriate as it reflects more closely the liabilities actually incurred by the Seligs. Counsel's table indicated that compound interest calculated on this basis totalled $728,667.61. This is some $17,000 less than the amount allowed by the Judge. This suggests that the Judge's use of a seven year period was not inappropriate. 302 Further, to some extent, the difference between the figures allowed by the Judge and that calculated by the Seligs' counsel is offset by an apparent error in the Judge's reasons. Those reasons (at [1230]) indicate that the Judge intended to allow the Seligs $140,000 for borrowing costs but, in fact (at [1244]), he allowed only $128,000. Although the Seligs did not cross-appeal in relation to this error, it is appropriate to have regard to it in determining the appellant's challenge to the overall award of damages. However, before allowing for this error, it is appropriate to refer to the third criticism of Wealthsure and Mr Bertram.

Compound interest on all heads of damage 303 I consider that the appellants have made good the third of their challenges to the amount allowed for compound interest. It was an error for the Judge to calculate compound interest on the capital losses caused by the forced sale of the Seligs' two Sea Aura apartments. This was because they were already owned by the Seligs and the Seligs did not incur borrowing costs in respect of them. Accordingly, it was an error for the Judge to say, as he did in the opening sentence of [1274] quoted above, that the Seligs had been paying interest on the whole of the sum awarded as damages ($1,014,680) since they first borrowed money to implement the strategy. 304 This means that an adjustment should be made to the amount allowed for damages for compound interest. It is appropriate to make a revised calculation on the sum of $826,680, i.e., correcting the error in the borrowing costs by adding $12,000 to the figure of $814,680 in [1244] of the Judge's reasons, using a rate of 8.19% and compounding for seven years. Making that adjustment, I consider that $637,000 is the appropriate award for this head of damage. 305 Having made that adjustment, the Seligs will be entitled to an award of pre-judgment interest in respect of the sum of $200,000 excluded from the calculation of the compound interest. I will address that item after determining the remaining grounds of appeal. 306 Accordingly, this ground of appeal succeeds in part.

Issue 8: Were the Seligs' claims "apportionable claims"? 307 At trial and on the appeal, the appellants made two submissions concerning the judgments which should be entered against them, in the event that they were found liable to the Seligs. They contended first that the Seligs' damages should be reduced on account of their own conduct in failing to take reasonable care to guard against the loss and, secondly, that the damages awarded should be apportioned between those defendants found to be concurrent wrongdoers. 308 The Judge concluded that the Seligs had been contributorily negligent to the extent of 15% (at [1145]). He also indicated that, if he had found it necessary to apportion liability between the defendants other than Mr Townley's partners, he would have apportioned 60% to Wealthsure and Mr Bertram, 25% to Mr Norton and Norton Capital, 15% to the other directors of Neovest (Mr Spencer, Ms Perovich and Mr Townley) and nothing to Neovest, because it had acted at the direction of its directors (at [1131]). 309 However, the Judge held that a deduction for the Seligs' contributory negligence could be made only in respect of their claims pursuant to s 1041H of the Corporations Act and its counterpart in the ASIC Act (s 12DA), and in contract and tort. As the Seligs succeeded on other causes of action, the Judge held that they were entitled to recover the assessed damages in full. 310 The Judge also held that the proportionate liability provisions in Chapter 2, Part 2 of the Civil Liability Act 2003 (Qld) did not apply in the present case. That Part does not apply, amongst other things, to claims by consumers and the Judge considered the Seligs to be consumers (at [1133]-[1138]). No complaint was taken about that conclusion on the appeal. 311 Earlier, at [890], the Judge had referred to Astley v Austrust [1999] HCA 6; (1999) 197 CLR 1 and said that the liability of Wealthsure and Mr Bertram to the Seligs in contract could not be reduced on account of contributory negligence. However, the effect of Astley v Austrust in Queensland was reversed by the amendment made to the Law Reform Act 1995 (Qld) by the Law Reform (Contributory Negligence) Amendment Act 2001 (Qld). The Judge recognised this in his conclusion at [1145] that the liability of Wealthsure and Mr Bertram to the Seligs in both negligence and contract could be reduced on account of the latter's contributory negligence. 312 The Judge also held that the proportionate liability provisions in Division 2A of Part 7.10 of the Corporations Act and Part 2, Subdivision GA of the ASIC Act did not have the effect that judgment should be entered for the defendants only to the extent of their respective responsibilities for the Seligs' losses. This was because the Seligs' claims, other than the claims pursuant to s 1041H of the Corporations Act and s 12DA of the ASIC Act, could not comprise a "single apportionable claim" so as to attract the operation of the proportionate liability provisions in s 1041N and s 12GR respectively. 313 These conclusions had the consequence that the Judge entered judgment for the Seligs for the full amount of their assessed damages, on the basis that they had succeeded in the causes of action to which the proportionate liability provisions did not apply, and which were not subject to deduction on account of contributory negligence. 314 The provisions in Division 2A of Part 7.10 of the Corporations Act and in Part 2, Subdivision GA of the ASIC Act are relevantly identical. That being so, the Judge found it convenient to deal with these issues at first instance by reference only to the provisions in the Corporations Act. I will do likewise. 315 Wealthsure and Mr Bertram contend, first, that all of the Seligs' claims in respect of the same loss and damage comprised "a single apportionable claim" as contemplated by s 1041L(2) and, accordingly, were "apportionable" for the purposes of s 1041N of the Corporations Act; secondly, that pursuant to s 1041N(3) account should have been taken of the extent to which the Seligs were responsible for their own losses; and thirdly, that the Judge should have entered judgment against them only to the extent of their proportionate responsibility after making a deduction for the Seligs' contributory negligence. 316 Ground 6 of Mr Townley's Notice of Cross-Appeal can be construed as raising the same complaints. 317 Each of Wealthsure and Mr Bertram, and Mr Townley, also complained of the apportionments indicated by the Judge, submitting that those findings had been unduly favourable to the Seligs, and unduly adverse to themselves. In addition, Mr Townley contended that the Judge should have regarded Mr Mackintosh as a "concurrent wrongdoer" for the purposes of s 1041N and, accordingly, have taken into account his responsibility for the Seligs' losses when making the assessment of the proportionate liabilities of the defendants. These particular submissions are not addressed in this section of the reasons, which is concerned only with whether a reduction for the Seligs' contributory negligence could have been made and whether the liability of the appellants should have been limited to their proportionate liability.

The proved contraventions 318 It is convenient to note again the basis upon which the Seligs succeeded at trial. The Judge found that the Seligs had established contraventions by Wealthsure and Mr Bertram of s 769C of the Corporations Act and s 12BB of the ASIC Act (misleading representations as to future matters in relation to financial products and financial services); contraventions of ss 945A and 945B (now repealed) of the Corporations Act (a provider of financial advice to have a reasonable basis, having regard to the client's individual circumstances, for the advice provided, and to warn the client if the advice is based on incomplete or inaccurate information); a contravention of s 1041E of the Corporations Act (making false or materially misleading statements which are likely to induce a person to acquire or dispose of a financial product); a contravention of s 1041H of the Corporations Act and s 12DA of the ASIC Act (misleading or deceptive conduct in relation to a financial product or a financial service); a contravention of s 12DB of the ASIC Act (false or misleading representations in connection with the supply of financial services); a contravention of the statutory warranty implied by s 12ED of the ASIC Act (that the services provided under a contract for the supply of financial services would be rendered with due care and skill); and breaches of the common law and implied contractual duties of care. The Judge found that the Seligs were entitled to damages pursuant to s 953B in respect of the contraventions of ss 945A and 945B; pursuant to s 1041I in respect of the contraventions of ss 1041E and 1041H; pursuant to s 1325 of the Corporations Act in respect of the breach of s 769C and pursuant to s 12GF in respect of the breaches of ss 12DA, 12DB, 12ED and 12BB of the ASIC Act. 319 In relation to the other defendants (other than Mr Townley's partners), the Judge found (subject to one exception) that the Seligs established contraventions of s 728 of the Corporations Act (misleading or deceptive statements in a product disclosure document), s 1041E of the Corporations Act, s 1041F of the Corporations Act (inducing another person to deal in financial products by making misleading, false or deceptive statements), s 1041H of the Corporations Act, and s 12DA of the ASIC Act. The exception is that Mr Townley was found not to have breached s 1041F of the Corporations Act. 320 The appellants' critique of the Judge's conclusion that a reduction for contributory negligence was not available in relation to several of these causes of action and that, apart from s 1041H, they were not apportionable claims, raises an issue of statutory construction. In order to address the issue, it is necessary to set out a number of the provisions in the Corporations Act.

The statutory provisions 321 Section 1041H proscribes conduct in relation to a financial product or a financial service which is misleading or deceptive. It provides (relevantly): (1) A person must not, in this jurisdiction, engage in conduct, in relation to a financial product or a financial service, that is misleading or deceptive or is likely to mislead or deceive. … (2) The reference in subsection (1) to engaging in conduct in relation to a financial product includes (but is not limited to) any of the following: (a) dealing in a financial product; (b) without limiting paragraph (a): (i) issuing a financial product; (ii) publishing a notice in relation to a financial product; (iii) making, or making an evaluation of, an offer under a takeover bid or a recommendation relating to such an offer; (iv) applying to become a standard employer-sponsor (within the meaning of the Superannuation Industry (Supervision) Act 1993) of a superannuation entity (within the meaning of that Act); (v) permitting a person to become a standard employer-sponsor (within the meaning of the Superannuation Industry (Supervision) Act 1993) of a superannuation entity (within the meaning of that Act); (vi) a trustee of a superannuation entity (within the meaning of the Superannuation Industry (Supervision) Act 1993) dealing with a beneficiary of that entity as such a beneficiary; (vii) a trustee of a superannuation entity (within the meaning of the Superannuation Industry (Supervision) Act 1993) dealing with an employer-sponsor (within the meaning of that Act), or an associate (within the meaning of that Act) of an employer-sponsor, of that entity as such an employer-sponsor or associate; (viii) applying, on behalf of an employee (within the meaning of the Retirement Savings Accounts Act 1997), for the employee to become the holder of an RSA product; (ix) an RSA provider (within the meaning of the Retirement Savings Accounts Act 1997) dealing with an employer (within the meaning of that Act), or an associate (within the meaning of that Act) of an employer, who makes an application, on behalf of an employee (within the meaning of that Act) of the employer, for the employee to become the holder of an RSA product, as such an employer; (x) carrying on negotiations, or making arrangements, or doing any other act, preparatory to, or in any way related to, an activity covered by any of subparagraphs (i) to (ix). (3) Conduct: (a) that contravenes: (i) section 670A (misleading or deceptive takeover document); or (ii) section 728 (misleading or deceptive fundraising document); or (iii) section 1021NA, 1021NB or 1021NC; or (b) in relation to a disclosure document or statement within the meaning of section 953A; or (c) in relation to a disclosure document or statement within the meaning of section 1022A; does not contravene subsection (1). For this purpose, conduct contravenes the provision even if the conduct does not constitute an offence, or does not lead to any liability, because of the availability of a defence. As can be seen, the underlying proscription in subs (1) of s 1041H is elaborated by the next two subsections. Subsection (2) contains examples in a non-exhaustive way of conduct in relation to a financial product, and includes in subpar (a) "dealing in a financial product". That expression is defined in an expansive way in s 766C of the Corporations Act. The width of the definition of "financial product" in s 763A operates to expand the ways by which a person may deal in a financial product. The effect is that the proscription in s 1041H(1) is capable of application to a diverse range of circumstances. 322 Subsection (3) excludes certain conduct from amounting to a contravention of subs(1), if it amounts to a contravention of identified earlier provisions of the Corporations Act. Subsection (3)(a)(iii) was inserted into the Corporations Act by the Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Act 2012 (Cth) s 3, Sch 3, Item 20, and accordingly was not in force in 2004 and 2005. 323 Section 1041I is a remedial provision. In addition to enabling a person who suffers loss or damage by the conduct of another in contravention of identified provisions in the Corporations Act to recover damages in respect of that loss, it also provides a circumstance in which the amount that a claimant may recover is to be reduced on account of the claimant's own failure to take reasonable care. Section 1041I provides (relevantly): (1) A person who suffers loss or damage by conduct of another person that was engaged in in contravention of section 1041E, 1041F, 1041G or 1041H may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention, whether or not that other person or any person involved in the contravention has been convicted of an offence in respect of the contravention. (1A) Subsection (1) has effect subject to section 1044B. Note: Section 1044B may limit the amount that the person may recover for a contravention of section 1041H (Misleading or deceptive conduct) from the other person or from another person involved in the contravention. (1B) Despite subsection (1), if: (a) a person (the claimant) makes a claim under subsection (1) in relation to: (i) economic loss; or (ii) damage to property; caused by conduct of another person (the defendant) that was done in contravention of section 1041H; and (b) the claimant suffered the loss or damage: (i) as a result partly of the claimant's failure to take reasonable care; and (ii) as a result partly of the conduct referred to in paragraph (a); and (c) the defendant: (i) did not intend to cause the loss or damage; and (ii) did not fraudulently cause the loss or damage; the damages that the claimant may recover in relation to the loss or damage are to be reduced to the extent to which the court thinks just and equitable having regard to the claimant's share in the responsibility for the loss or damage. Note: Division 2A also applies proportionate liability to a claim for damages under this section for a contravention of section 1041H. (2) … (3) This section does not affect any liability that a person has under any other law. (4) … 324 As can be seen, although subs (1) creates a remedy in respect of contraventions of ss 1041E, 1041F, 1041G and 1041H, subs (1B) allows a reduction for the claimant's failure to take reasonable care (which, for convenience, I will refer to as "contributory negligence") only in respect of contraventions of s 1041H. 325 The provisions concerning proportionate liability are contained in Part 7.10 - Division 2A of the Corporations Act. Sections 1041L, 1041M and 1041N are pertinent presently: Division 2A - Proportionate liability for misleading and deceptive conduct 1041L Application of Division (1) This Division applies to a claim (an apportionable claim) if the claim is a claim for damages made under section 1041I for: (a) economic loss; or (b) damage to property; caused by conduct that was done in a contravention of section 1041H. (2) For the purposes of this Division, there is a single apportionable claim in proceedings in respect of the same loss or damage even if the claim for the loss or damage is based on more than one cause of action (whether or not of the same or a different kind). (3) In this Division, a concurrent wrongdoer, in relation to a claim, is a person who is one of 2 or more persons whose acts or omissions (or act or omission) caused, independently of each other or jointly, the damage or loss that is the subject of the claim. (4) For the purposes of this Division, apportionable claims are limited to those claims specified in subsection (1). (5) For the purposes of this Division, it does not matter that a concurrent wrongdoer is insolvent, is being wound up or has ceased to exist or died. 1041M Certain concurrent wrongdoers not to have benefit of apportionment (1) Nothing in this Division operates to exclude the liability of a concurrent wrongdoer (an excluded concurrent wrongdoer) in proceedings involving an apportionable claim if: (a) the concurrent wrongdoer intended to cause the economic loss or damage to property that is the subject of the claim; or (b) the concurrent wrongdoer fraudulently caused the economic loss or damage to property that is the subject of the claim. (2) The liability of an excluded concurrent wrongdoer is to be determined in accordance with the legal rules (if any) that (apart from this Division) are relevant. (3) The liability of any other concurrent wrongdoer who is not an excluded concurrent wrongdoer is to be determined in accordance with the provisions of this Division. 1041N Proportionate liability for apportionable claims (1) In any proceedings involving an apportionable claim: (a) the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of the defendant's responsibility for the damage or loss; and (b) the court may give judgment against the defendant for not more than that amount. (2) If the proceedings involve both an apportionable claim and a claim that is not an apportionable claim: (a) liability for the apportionable claim is to be determined in accordance with the provisions of this Division; and (b) liability for the other claim is to be determined in accordance with the legal rules, if any, that (apart from this Division) are relevant. (3) In apportioning responsibility between defendants in the proceedings: (a) the court is to exclude that proportion of the damage or loss in relation to which the plaintiff is contributorily negligent under any relevant law; and (b) the court may have regard to the comparative responsibility of any concurrent wrongdoer who is not a party to the proceedings. (4) This section applies in proceedings involving an apportionable claim whether or not all concurrent wrongdoers are parties to the proceedings. (5) A reference in this Division to a defendant in proceedings includes any person joined as a defendant or other party in the proceedings (except as a plaintiff) whether joined under this Division, under rules of court or otherwise. 326 Section 1041N appears to be the principal operative provision in Division 2A. In the cases to which it applies, s 1041N limits the liability of a defendant to that proportion of the claimant's damages which the Court considers just having regard to the extent of the defendant's responsibility (subs (1)). Subsection (3) stipulates the manner in which account is to be taken of a claimant's own contributory negligence. 327 Section 1041I(1B) and the proportionate liability provisions in Division 2A of Part 7.10 were introduced into the Corporations Act (and the counterpart provisions in the ASIC Act and the TPA) by the Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004 (Cth) (the CLERP Act). The introduction of these provisions was, in part, a consequence of the decisions in Henville v Walker [2001] HCA 52; (2001) 206 CLR 459 and I&L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41; (2002) 210 CLR 109. In the former, the High Court held that the damages awarded to plaintiffs pursuant to s 82 of the TPA in respect of contraventions of s 52 of the TPA were not to be reduced by reason of plaintiffs' failure to take reasonable care to protect themselves. In the latter, the High Court held that ss 82 and 87 did not contemplate the liability of defendants for contraventions of s 52 being apportioned on account of other contributory causes to the damage.

The Judge's reasons 328 It had been common ground in the trial that the Seligs' claim was in respect of "the same loss or damage" within the meaning of that term in s 1041L(2). The Seligs did not claim that the various contraventions which they had alleged had caused different loss or damage. Nor did they claim that their loss and damage had any discrete relationship as between the defendants, with the effect that there should be some differentiation in the damages for which Wealthsure and Mr Bertram, on the one hand, and the other defendants, on the other, should be liable. 329 In concluding that the proportionate liability provisions in Division 2A operated only in respect of the Seligs' claim pursuant to s 1041H and not otherwise, the Judge reasoned as follows: (a) Although the Corporations Act establishes a number of statutory causes of action, it provided expressly for a reduction of a claimant's entitlement to damages only in respect of claims brought under s 1041I(1) for a contravention of s 1041H. Section 1041I(1B) has been "deliberately drawn" to apply only to claims brought pursuant to s 1041I in respect of contraventions of s 1041H. In particular, the other sections for which s 1041I provides a statutory cause of action (ss 1041E, 1041F and 1041G) had been "deliberately omitted" from inclusion in s 1041I(1B) (at [1044]-[1045]). (b) The applicability of the proportionate liability provisions in Division 2A was to be determined primarily by reference to s 1041L. Section 1041L(1) made those provisions applicable only to claims under s 1041I for economic loss or damage to property caused by conduct done only in contravention of s 1041H (at [1063]-[1064]). (c) The reference in s 1041L(2) to "the same loss or damage" is a reference to the damage caused by a concurrent wrongdoer, and not to the damages which the Court may ultimately award: Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd [2013] HCA 10 at [24]; (2013) 247 CLR 613 at 628-9 (at [1065]). (d) Section 1041L(2) does not have the effect that claims which are not themselves apportionable claims within the meaning of s 1041L(1) become part of a single apportionable claim because, just as s 1041I(1B) is confined to contraventions of s 1041H, so also is s 1041L(1) (at [1084], [1094]). This follows from the circumstance that the Corporations Act, by s 1041H(3), specifically excludes certain conduct from being a contravention of s 1041H(1) and, further, because the Corporations Act contains its own remedial provisions in respect of the excluded forms of conduct which do not provide at all for proportionate liability. (e) If s 1041L(2) is construed in the manner proposed by the defendants, then s 1041N(3) which governs the way account is to be taken of contributory negligence would become "unworkable" (at [1096]).

The appellants' submissions 330 Counsel for Wealthsure and Mr Bertram submitted that s 1041L makes the reach of the proportionate liability provisions in Division 2A turn on the loss and damage suffered by the plaintiff. If the loss and damage caused by concurrent wrongdoers is the same as the loss and damage caused by the contravention of s 1041H by one of them, then the proportionate liability provisions are to apply to all claims in respect of that loss and damage. 331 Counsel submitted that the Judge overlooked the significance of s 1041L(2). Properly construed, this subsection was, he submitted, an "umbrella provision". That is to say, whenever a plaintiff brings a claim pursuant to s 1041I in respect of a contravention of s 1041H and relies on other causes of action as well, and the loss or damage suffered is the same, subs (2) operates to convert all the claims into a "single apportionable claim" for the purposes of Division 2A. Put more shortly, if one claim is subject to apportionment, then all claims in respect of the same loss and damage are also subject to apportionment. 332 Counsel referred to a number of decisions of single judges in support of these contentions and distinguished two decisions to which the Judge had referred. I will return to these decisions shortly. 333 Mr Townley supported the submissions of Wealthsure and Mr Bertram concerning the construction of Division 2A. He submitted, however, that the Seligs' claims did not constitute a "single apportionable claim". There were, instead, two discrete claims: one in respect of losses incurred in the purchase of the shares in Neovest; and the other in respect of the consequential losses, including those resulting from the real estate investments. Whilst Mr Townley accepted that the former could give rise to a single apportionable claim, he submitted that he, Mr Spencer and Ms Perovich were not liable to the Seligs in respect of their consequential losses and were not therefore "concurrent wrongdoers" in respect of those losses. This submission was made in an assertive fashion, that is, without any elaboration or reasons, in the outline of submissions. It was not otherwise developed. It is inconsistent with the manner in which Mr Townley's case was conducted at trial and, in any event, overlooks the distinction between loss and damage, on the one hand, and the damages payable in respect of that loss, on the other.

Previous judicial consideration 334 The present issue has been the subject of some judicial attention. The Judge referred to a number of decisions, three of which he regarded as supporting the appellants' submissions, and two to the contrary. However, as there is no decision of an intermediate court of appeal, the Judge regarded himself as free to apply his own view. 335 In Woods v De Gabriele [2007] VSC 177, Hollingworth J noted at [33] a submission that s 1041L(2) made all claims in a proceeding in respect of the same loss into a single apportionable claim, regardless of whether they were individually apportionable claims. However, as the case concerned an issue of pleading and joinder, it was not necessary for Hollingworth J to express a final view, and her Honour did not do so. 336 The discussion by Barrett J in Reinhold v New South Wales Lotteries Corporation (No 2) [2008] NSWSC 187; (2008) 82 NSWLR 762 of Part 4 of the Civil Liability Act 2002 (NSW) did not include a discussion of the effect of s 34(1A), the counterpart provision to s 1041L(2). There is in any event a material difference between the two provisions in that s 34(1) of the NSW Act at that time defined apportionable claims to include claims for economic loss or damage to property in an action for damages, whether in contract, tort or otherwise, arising from a failure to take reasonable care (other than claims for personal injury) and claims for damages for contravention of s 42 of the Fair Trading Act 1987 (NSW). It now also includes claims under s 18 of the Australian Consumer Law (NSW). That is to say, the NSW Act specifically contemplates that causes of action arising under the common law or under statute may comprise a single apportionable claim. This difference in the legislation seems to explain the passages in Reinhold which indicate that claims in negligence and claims in respect of contraventions of s 42 of the Fair Trading Act 1987 (NSW) come within the "umbrella" of the s 1041L(2) counterpart. Accordingly, I do not regard the reasons of Barrett J as speaking to the proper construction of s 1041L(2). 337 The reasons of Finkelstein J in BHPB Freight Pty Ltd v Cosco Oceania Chartering Pty Ltd (No 2) [2008] FCA 1656 and by Reeves J in Bennett v Elysium Noosa Pty Ltd [2012] FCA 211; (2012) 202 FCR 72 did not involve a discussion of the question, although Reeves J did consider it significant that the counterpart to s 1041L(1) in the former Trade Practices Act (s 87CB(1)) was "very specifically confined to particular claims for damages for particular contravening conduct" (at [274]). 338 In Bathurst Regional Council v Local Government Financial Services Pty Ltd (No 5) [2012] FCA 1200, Jagot J accepted that claims in respect of contraventions of s 1041E were, in the circumstances of that case, subject to the proportionate liability provisions. At the end of a very long judgment, Jagot J said: [3485] I accept LGFS's submission that although damages for contravention of s 1041E of the Corporations Act are not apportionable, in this case, those claims arise from the same facts as the contraventions of s 1041H which are apportionable. I adopt LGFS's submission as follows in this regard: [T]he reasoning of Barrett J in Reinhold v New South Wales Lotteries Corp (No 2) [[2008] NSWSC 187] suggests that because the s.1041E cause of action arises from the same facts and relates to the same loss as the s.1041H cause of action then it too is apportionable (as the whole claim becomes apportionable). That has the somewhat unlikely consequence that a s.1041E claim will almost invariably become an apportionable claim because to establish a contravention of s.1041E a plaintiff will almost necessarily also establish a contravention of s.1041H. Nonetheless, Barrett J's reasoning has been repeatedly applied. 339 This passage is supportive of the appellants' submission in the present case. Similarly, Gray J in Miletich v Murchie [2012] FCA 1013 at [107]-[108]; (2012) 297 ALR 566 at 593 considered that there was a single apportionable claim under s 87CB of the TPA, even though the claim for the loss and damage was based on more than one cause of action and not all arising under the TPA. 340 Finally, a passage by way of obiter in the reasons of Hansen J in Rod Investments (Vic) Pty Ltd v Abeyratne (No 2) [2009] VSC 278 at [43], indicates that his Honour accepted that s 1041L(2) may be invoked when there is at least one apportionable claim within the meaning of s 1041L(1).

Consideration 341 The issue is one of statutory construction. In Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355, the plurality described the approach to be adopted as follows: [69] The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole". … Thus, the process of construction must always begin by examining the context of the provision that is being construed. [70] A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the court "to determine which is the leading provision and which the subordinate provision, and which must give way to the other". Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme. [71] Furthermore, a court construing a statutory provision must strive to give meaning to every word of the provision. … (Citations omitted) 342 Emphasis on the necessity for regard to the text of the statute is evident in later decisions of the High Court, for example, Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) [2009] HCA 41 at [47]; (2009) 239 CLR 27 at 46-7; Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 293 ALR 257. In the latter case, French CJ, Hayne, Crennan, Bell and Gageler JJ said at [39] 268-9: "This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the [statutory] text." So must the task of statutory construction end. The statutory text must be considered in its context. That context includes legislative history and extrinsic materials. Understanding context has utility if, and in so far as, it assists in fixing the meaning of the statutory text. Legislative history and extrinsic materials cannot displace the meaning of the statutory text. Nor is their examination an end in itself. (Citation omitted) 343 As noted earlier, s 1041N is the principal operative provision. Subsection (1) limits the liability of a concurrent wrongdoer for "an apportionable claim" to the amount which the Court considers just having regard to the extent of the defendant's responsibility for the plaintiff's loss and damage. Subsection (2) applies to those cases involving both an "apportionable claim" and a claim which is not an "apportionable claim", stipulating that the liability for the apportionable claim is to be determined in accordance with the provisions of Division 2A and the liability for the other claim to be determined in accordance with the legal rules, if any, which, apart from Division 2A, are relevant. 344 Section 1041L(1) indicates that an "apportionable claim" is a claim for damages made under s 1041I for economic loss or damage to property caused by conduct done in contravention of s 1041H. Subsection (3) indicates that a "concurrent wrongdoer" in relation to a claim, is a person who is one of two or more persons whose acts or omissions caused, independently of each other or jointly, the damage or loss that is the subject of the claim. 345 The issue for construction on this part of the appeal arises from the terms of s 1041L(2) which, for convenience, I will repeat: (2) For the purposes of this Division, there is a single apportionable claim in proceedings in respect of the same loss or damage even if the claim for the loss or damage is based on more than one cause of action (whether or not of the same or a different kind). 346 The issue is really that of whether the expression "the claim for the loss and damage is based on more than one cause of action (whether or not of the same or a different kind)" refers only to causes of action which are themselves apportionable claims or, alternatively, to causes of action more generally. 347 In my opinion, the former is the proper construction. My reasons for that conclusion follow. 348 The text of s 1041L(2) is significant. Having defined an "apportionable claim" in subs (1), subs (2) specifies a circumstance in which there will be a single apportionable claim. That is suggestive, to my mind, of a legislative intention that claims which are themselves apportionable claims are, in the stipulated circumstance, to be regarded as a single claim. It seems improbable that a claim which is not, by definition, an apportionable claim should be regarded as part of a single apportionable claim. Had that been intended, one would have expected subs (1) to have expressly been made subject to subs (2). 349 I consider that this construction of subs (2) is confirmed by s 1041L(4). Effect must be given to that subsection. It expressly limits apportionable claims to those claims specified in subs (1). In other words, whatever an apportionable claim may be, it is limited to claims pursuant to s 1041I in respect of contraventions of s 1041H. A construction of subs (2) which has the effect of including in an apportionable claim any claim at all, whether made under s 1041H or otherwise, providing that it is in respect of the same loss or damage, is inconsistent with subs (4). The submissions of Wealthsure and Mr Bertram did not reconcile that inconsistency. 350 This construction might be more obvious if s 1041L(1) referred to claims for loss or damage resulting from contraventions of two or more provisions in the Corporations Act or otherwise to claims arising under the common law or under different legislation. Section 34(1) of the Civil Liability Act 2002 (NSW) considered in Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd [2013] HCA 10; (2013) 247 CLR 613 and by Barrett J in Reinhold v New South Wales Lotteries Corporation (No 2) [2008] NSWSC 187; (2008) 82 NSWLR 762, is an example of this kind of provision. One could readily conclude in the case of provisions of that kind that it is only claims in respect of contraventions of the nominated provisions which can give rise to a single apportionable claim. But the principle remains the same: s 1041L(1) identifies what may be an apportionable claim. 351 In context, subs (2) seems to be in the nature of a facilitative, rather than a substantive, provision. I note in this respect that the expression "single apportionable claim" is not used elsewhere in the Corporations Act. No rights, entitlements or obligations are identified separately as arising from the characterisation of claims as a "single apportionable claim". This rather suggests that subs (2) is intended to facilitate the application of Division 2A and, in particular, s 1041N when there are two or more apportionable claims in respect of the same loss or damage. In particular, by specifying that multiple apportionable claims in respect of the same loss and damage are to be regarded as a single apportionable claim, s 1041L(2) seeks to address the difficulties, discussed by the Court of Appeal in New South Wales in Barisic v Devenport [1978] 2 NSWLR 111, which can arise when the contributory negligence of a plaintiff is to be assessed in relation to each of several tortfeasors (and reflected in the judgment) and when the rights of the tortfeasors between themselves are to be determined taking account of their respective individual liabilities to the plaintiff. 352 There was a tendency in the submissions of Wealthsure and Mr Bertram to treat a claim under s 1041H as raising a single cause of action, with the effect that the expression "based on more than one cause of action (whether or not of the same or a different kind)" implied necessarily that s 1041L(2) incorporated claims made other than under s 1041H (providing that they were in respect of the same loss or damage). In my respectful opinion, this understanding of the expression is not correct. 353 It is commonplace for judges and lawyers to use the term "cause of action" as a reference to the nature of the right of action asserted by a plaintiff. Lawyers will refer, for example, to a cause of action as being breach of contract, negligence, breach of the former s 52 of the TPA etc. However, this usage is often a shorthand label for a more extended meaning. 354 Many of the judicial elaborations of the term "cause of action" have occurred in the context of limitations of action provisions which require proceedings to be commenced within a fixed period after the "cause of action" accrues. In that context, the term has been held to refer to the elements necessary to give rise to a right of action. For example, in Torrens Aloha Pty Ltd v Citibank NA (1997) 72 FCR 581, Sackville J (with whom Foster and Lehane JJ agreed) said in relation to s 14(1) of the Limitation Act 1969 (NSW) at 595: The classic formulation of a "cause of action" is that of Brett J in Cooke v Gill (1873) 8 LR CP 107 at 116: "'cause of action' has been held from the earliest time to mean every fact which is material to be proved to entitle the plaintiff to succeed - every fact which the defendant would have a right to traverse." This formulation was adopted by Lord Esher MR in Read v Brown (1888) 22 QBD 128 at 131; see also Trower & Sons Ltd v Ripstein [1944] AC 254 at 263 per Lord Wright. In Do Carmo v Ford Excavations Pty Ltd (1984) 154 CLR 234 at 245, Wilson J said that the: "concept of a 'cause of action' would seem to be clear. It is simply the fact or combination of facts which gives rise to a right to sue. In an action for negligence, it consists of the wrongful act or omission and the consequent damage … Knowledge of the legal implications of the known facts is not an additional fact which forms part of a cause of action. Indeed, a person may be well appraised of all the facts which need to be proved to establish a cause of action but for want of taking legal advice may not know that those facts give rise to a right to relief." See also Carter v Egg & Pulp Marketing Board (Vic) (1942) 66 CLR 557 at 600 per Williams J. 355 The term "cause of action" is not defined in the Corporations Act. It is, however, used in a number of its provisions. These include the limitation provisions contained in ss 283F(2), 601MA(2), 601XAA(3), 670B(2), 729(3), 991A(3), 1022B(6), 1041I(2) and 1325(4), as well as in the transitional provision contained in s 1466. The reasoning of Sackville J in Torrens Aloha is apposite to the term's usage in this context. 356 Section 1466 is particularly pertinent presently because it too was introduced into the Corporations Act by the CLERP Act. It provides that the amendments effected by Sch 3 to the CLERP Act (which included the proportionate liability provisions) apply to causes of action that arise on or after the date on which Sch 3 commences. Section 1041I(2) is also pertinent presently as s 1041L(1) defines an apportionable claim in part by reference to claims made under s 1041I. It is reasonable to conclude that the term "cause of action" in these provisions and in s 1041L is used in each case with a consistent meaning. 357 This meaning of the term "cause of action" is inconsistent with the view that the expression "more than one cause of action" necessarily implies causes of action other than contraventions of s 1041H. 358 It is obvious that s 1041H may be contravened in a number of ways and may therefore give rise to multiple causes of action. This is evident from the diverse ways by which a person may, in relation to a financial product or a financial service, engage in conduct which is misleading or deceptive, or likely to mislead or deceive in contravention of that section. It is quite plausible that a plaintiff may, in the one proceeding, allege that more than one contravention of s 1041H by two or more concurrent wrongdoers has caused the claimed loss or damage. It is also plausible that the causes of action which might arise under s 1041H may be of similar or different kinds. Thus, s 1041L(2) may have a sensible application in relation to two or more claims in respect of contraventions of s 1041H. 359 There are other contextual considerations supporting the view that s 1041L(2) refers only to causes of action which are themselves apportionable claims. Division 2A has the heading "Proportionate liability for misleading and deceptive conduct". The construction for which Wealthsure and Mr Bertram contend would have the effect that proportionate liability would apply not only in cases of misleading and deceptive conduct but in relation to other contraventions of the Corporations Act as well. That goes beyond the scope of the division suggested by its heading. 360 The references to "a claim" and "the claim" in s 1041L(3) must be a reference to a claim to which the Division applies, that is, "an apportionable claim" under s 1041L(1). The principle that words used more than once in the one provision may be taken to be used with a consistent meaning suggests that this meaning is also appropriate in the case of subs (2). 361 The Judge attached significance to the fact that several of the proscriptions in the Corporations Act have a remedial provision which is specific to the particular proscription. For example, and of relevance in this case, s 670B in the case of s 670A; s 729 in the case of s 728; s 953B(2) in the case of s 953B(1) and s 1022B(2) in the case of s 1022B(1). In each case, the provided remedy is available only to specified persons. 362 In my respectful opinion, the Judge was correct to attach significance to this circumstance. It seems improbable that, despite s 1041L(1) having limited the application of Division 2A to claims made under s 1041I (and thereby excluding Division 2A from applying to these other remedial provisions), subs (2) should have the effect, as though by a side wind, of including claims made under provisions other than s 1041I. The incongruity involved in the contrary construction is emphasised by the consideration that s 1041H(3) specifically excludes conduct in contravention of ss 670A, 728, 953A and 1022A from amounting to a contravention of s 1041H. It seems improbable that the legislature, having carved out conduct contravening those provisions from s 1041H and having limited s 1041L(1) to conduct done in contravention of s 1041H, nevertheless intended that conduct in contravention of those provisions should be the subject of the proportionate liability provisions when the same loss or damage is involved. One would have thought that, if that was the legislative intention, it would have been easy for the legislature to say so by express words in s 1041L(1). 363 The Judge also attached significance to the circumstance that s 1041I confines a reduction on account of a plaintiff's contributory negligence to claims in respect of contraventions of s 1041H. Yet, if the construction for which Wealthsure and Mr Bertram contend be correct, s 1041N(1) could have the effect that a plaintiff's own responsibility for the loss and damage would have to be taken into account in relation to all causes of action comprising the single apportionable claim on which the plaintiff succeeds. This would be so because s 1041N(1) provides that judgment may be entered against a defendant only to the extent of the defendant's responsibility for the loss and damage, something which could be determined only after account had been taken of the plaintiff's own responsibility. I have said "could" because it is possible that s 1041N(1) may be construed to avoid this possibility. It is not necessary to determine that question presently. At the least, it can be said that the construction urged by Wealthsure and Mr Bertram does give rise to this apparent difficulty. 364 The Judge said that s 1041N(3) would become "unworkable" on the appellants' construction (at [1096]). Despite the critique by Wealthsure and Mr Bertram, I consider that the Judge's conclusion in this respect has force. 365 Section 1041N(3) concerns the manner in which responsibility is to be apportioned between defendants in proceedings involving an apportionable claim. The Court is required first to exclude that proportion of the damage or loss in relation to which the plaintiff is contributorily negligent "under any relevant law". It is the expression "under any relevant law" which gives rise to the difficulty. Section 1041I(1B) appears to be such a relevant law. The Law Reform Act 1995 (Qld) and its interstate and Territory counterparts also appear to be such a relevant law in relation to the causes of action to which they apply. But if a contravention of some other provision in the Corporations Act forms part of the single apportionable claim, what is the "relevant law" which will require reduction of the damages to which the plaintiff would otherwise be entitled for losses caused by such contraventions? Counsel could not identify any other "relevant law" which would require reduction in this circumstance. If s 1041N(1) is not regarded as such a "relevant law", the consequence will be that there will be some loss or damage for which a plaintiff would be entitled to an award of damages without reduction, and some which would warrant reduction. This would seem to involve the practical difficulties of the kind discussed in Barisic v Devenport [1978] 2 NSWLR 111 which, as indicated earlier, s 1041L(2) seems intended to avoid. 366 If, on the other hand, s 1041N(1) is regarded as a "relevant law" for the purposes of subs (3) then there exists the incongruity to which I referred earlier, namely, that a reduction for contributory negligence which is not otherwise contemplated by the specific remedial provisions is mandated. 367 To my mind, there is also some incongruity in understanding s 1041L(2) as operating to establish a claimed contravention of s 1041H as a gateway through which access may be had to the proportionate liability provisions in respect of any claim for the same economic loss or damage to property. It is difficult to understand why the legislature would have adopted such a drafting technique. It would have been much simpler for the legislature to have identified in subs (1) all of the provisions a claimed contravention of which would give rise to an apportionable claim. 368 The decisions of Jagot J in Bathurst Regional Council v Local Government Financial Services Pty Ltd (No 5) [2012] FCA 1200 at [3485] and of Gray J in Miletich v Murchie [2012] FCA 1013; (2012) 297 ALR 566, to which I referred earlier, do not, with respect, cause me to adopt a different view. The submission of the defendant in Bathurst Regional Council which was accepted by Jagot J appears to have attached a significance to the reasons of Barrett J in Reinhold which was not warranted, bearing in mind the material differences between s 34(1) of the Civil Liability Act 2002 (NSW), on the one hand, and s 1041L(1) on the other. The reasons of Gray J in Miletich v Murchie do not advert to the matters mentioned above. 369 For these reasons, I conclude that the construction proposed by Wealthsure and Mr Bertram of s 1041L(2) should be rejected. In my opinion, the Judge was correct to regard s 1041N as applying only to the Seligs' claim brought pursuant to s 1041I in respect of the contravention of s 1041H. This means that the Judge was correct not to make any deduction for the Seligs' contributory negligence in respect of those claims other than the contravention of s 1041H and the common law breach of contract and negligence claims. The Judge was also correct in not entering judgment against each defendant only to the extent of their respective responsibilities for the Seligs' losses. 370 As indicated earlier, I have addressed the contributory negligence and proportionate liability issues in this section by reference to the provisions in the Corporations Act. Given that the counterpart provisions in the ASIC Act are in relevant respects identical, this reasoning applies in relation to those provisions as well.

Issue 9: The allocation of responsibility 371 My conclusion on the last issue means that, strictly speaking, the challenge to the Judge's assessment of the Seligs' contributory negligence and to his allocation of responsibility amongst the defendants need not be addressed. Similarly, the submissions of Mr Townley that the Seligs' claims were not a single apportionable claim, and that he, Mr Spencer and Ms Perovich were not concurrent wrongdoers with the other defendants, to which I referred in the previous section of these reasons, do not need to be addressed. 372 However, in case my conclusion be wrong, I indicate my view that each of those challenges and submissions should be dismissed, for the reasons given by Besanko J.

Issue 10: Factual findings 373 Mr Townley complained of several factual findings by the Judge. These included his conclusion that it was Neovest, and not Neo Lido or Neolido Holdings which had to pay the commission to Norton Capital of 13.5% on capital raised pursuant to the second Neovest prospectus; that that commission would have to be paid annually; that the scheme contemplated by the Neovest prospectus "couldn't work" and was a Ponzi scheme; that the evidence of an ASIC officer as to the solvency of Neo Lido and Neolido Holdings should be accepted; and that the Neolido Group was insolvent at the time of the Seligs' investment, as well as other matters. 374 I take the view that it is unnecessary to consider and determine each of these individual complaints. The submissions made on Mr Townley's behalf did not address all these matters. In some cases, there was no more than a bald assertion that the Judge's finding was wrong unaccompanied by any attempt to identify the nature of an error, let alone an appellable error. Nor did the submissions indicate that the alleged errors, if established, had had a material effect on the Judge's findings. The appeal lies against the Judge's orders, and not against his individual findings.

Conclusion 375 The effect of these reasons is that I would uphold the appeal by Wealthsure and Mr Bertram on one ground only, namely, that the Judge erred in awarding compound interest as damages in respect of the capital losses caused by the forced sale of the Seligs' two Sea Aura apartments. That has the effect of reducing the Seligs' damages to $1,651,680. 376 However, the Seligs are entitled to interest pursuant to s 51A of the Federal Court of Australia Act 1976 (Cth) in respect of those capital losses. 377 One of the Sea Aura units was sold on 7 December 2007 and the other on 15 March 2010. The Judge considered that the Seligs lost about $135,000 in equity in the first sale and about $200,000 in equity in the second. However, having regard to other contributing causes, the Judge allowed $200,000 for the loss of equity. He did not apportion that amount between the two units. 378 On the basis of the proportion of the overall loss of equity allowed by the Judge, it is appropriate to allocate $80,000 of the $200,000 allowed for loss of equity to the first sale, and $120,000 to the second. On that basis, and using the interest rates specified in Practice Note CM16, I would allow pre-judgment interest of $65,000. 379 This means that judgment should have been entered against Wealthsure and Mr Bertram in the sum of $1,716,680. 380 The outcome is the same in the case of the appeal by Mr Townley. 381 The consequence is that the appeals should be allowed, the judgment in favour of the first, second and sixth defendants be set aside and, in its place, judgment be entered against those defendants in the sum of $1,716,680. In all other respects, the appeals should be dismissed. 382 I would hear from the parties as to costs. I certify that the preceding two hundred and sixty-seven (267) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice White.