Australian Securities and Investments Commission v Skeers [2007] FCA 1551

FEDERAL COURT OF AUSTRALIA

Australian Securities and Investments Commission v Skeers [2007] FCA 1551

FINANCIAL SERVICES – mortgage broker engaged in conduct alleged to be unconscionable, misleading and deceptive – broker does not appear – whether declarations of contravention appropriate

Australian Securities and Investments Commission Act 2001 (Cth), ss 4(1), 5, 12BAB, 12BAA, 12CB(1), 12CB(2), 12CB(5), 12DA(1) Australian Securities and Investments Commission Regulations 2001 (Cth), reg 2B

Australian Competition and Consumer Commission (ACCC) v Radio Rentals Ltd (2005) 146 FCR 292 cited Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd (2003) 214 CLR 51 cited GPG (Australia Trading) Pty Ltd v GIO Australia Holdings Pty Ltd (2001) 117 FCR 23 cited Houghton v Arms (2006) 225 CLR 553 cited IN THE MATTER OF TONADALE PTY LTD ACN 065 214 619 AND KELVIN MARK SKEERS AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION v KELVIN MARK SKEERS and TONADALE PTY LTD ACN 065 214 619

ACD 27 OF 2006

GYLES J

9 OCTOBER 2007

SYDNEY (VIA VIDEO LINK TO CANBERRA; HEARD IN CANBERRA)

IN THE FEDERAL COURT OF AUSTRALIA

AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY ACD 27 OF 2006

IN THE MATTER OF TONADALE PTY LTD ACN 065 214 619 AND KELVIN MARK SKEERS BETWEEN: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Plaintiff

AND: KELVIN MARK SKEERS

First Defendant

TONADALE PTY LTD ACN 065 214 619

Second Defendant

JUDGE: GYLES J DATE OF ORDER: 9 OCTOBER 2007

WHERE MADE: SYDNEY (VIA VIDEO LINK TO CANBERRA; HEARD IN CANBERRA)

THE COURT:

1. Declares pursuant to s 21 of the Federal Court of Australia Act 1976 (Cth)that the first defendant in trade or commerce, in connection with the supply of financial services to Mr Aj Biega (Biega),engaged in conduct that was, in all of the circumstances, unconscionable and in contravention of s 12CB(l) of the Australian Securities and Investments Commission Act 2001 (Cth) (the ASIC Act) in that the first defendant on or about 5 August 2004 prepared and submitted a loan application to Pepper Homeloans Pty Limited (Pepper Homeloans) on behalf of Biega (First Loan Application)in circumstances where the first defendant knew that: (a) the information contained in the First Loan Application was not correct; (b) at the time the First Loan Application was lodged with Pepper Homeloans it was likely that Biega had insufficient income to enable him to meet all loan repayments under the loan if granted; (c) if the loan sought in the First Loan Application was granted it was likely that Biega would have to sell his assets to repay the loan. 2. Declares pursuant to s 21 of the Federal Court of Australia Act 1976 (Cth)that the first defendant in trade or commerce, in connection with the supply of financial services to Biega, engaged in conduct that was, in all of the circumstances, unconscionable and in contravention of s 12CB(1) of the ASIC Act,in that the first defendant on or about 23 November 2005 prepared and submitted a loan application to Pepper Homeloans on behalf of Biega (Second Loan Application) in circumstances where the first defendant knew that: (a) the information contained in the Second Loan Application was not correct; (b) at the time the Second Loan Application was lodged with Pepper Homeloans it was likely that Biega had insufficient income to enable him to meet all loan repayments under the loan if granted; (c) if the loan sought in the Second Loan Application was granted it was likely that Biega would have to sell his assets to repay the loan. 3. Declares pursuant to s 21 of the Federal Court of Australia Act 1976 (Cth) that the first defendant in trade or commerce, engaged in conduct in relation to financial services that was misleading or deceptive or was likely to mislead or deceive in contravention of s 12DA(1) of the ASIC Act, in that the First Defendant between mid-July to 5 August 2004 represented to Pepper Homeloans that they had been informed by Biega that: (a) Biega had an income of $75,000 per annum; (b) Biega had full time employment; (c) Biega owned furniture that he estimated as being worth $100,000; (d) Biega owned computer and art equipment which he estimated as being worth $40,000; and (e) Hussey and Hussey were Biega's accountants, when if fact Biega had not informed the first defendant of any of these matters. 4. Declares pursuant to s 21 of the Federal Court of Australia Act 1976 (Cth)that the first defendant in trade or commerce, engaged in conduct in relation to financial services that was misleading or deceptive or was likely to mislead or deceive in contravention of s 12DA(1) of the ASIC Act, in that the first defendant on or about 23 November 2005 represented to Pepper Homeloans that they had been informed by Biega that: (a) Biega had an income of $10,000 per month; (b) Biega was in full time employment; (c) Biega owned furniture which he estimated as being worth $120,000; (d) Biega owned antiques and memorabilia which he estimated as being worth $100,000; and (e) Hussey and Hussey were Biega's accountants, when in fact Biega had not informed the first defendant of any of these matters. 5. Declares pursuant to s 21 of the Federal Court of Australia Act 1976 (Cth)that the first defendant in trade or commerce, engaged in conduct in relation to financial services that was misleading or deceptive or was likely to mislead or deceive in contravention of s 12DA(1) of the ASIC Act, in that the first defendant on or about 5 August 2004 represented to Biega that: (a) they would only include, in any loan application they lodged on Biega's behalf, details of Biega's income, assets and employment status consistent with the information provided to them by Biega, when in fact (b) the first defendant intended to, and did in fact, include in the First Loan Application details of Biega's income, assets and employment status which were different from the information provided to them by Biega. 6. Declares pursuant to s 21 of the Federal Court of Australia Act 1976 (Cth)that the first defendant in trade or commerce, engaged in conduct in relation to financial services that was misleading or deceptive or was likely to mislead or deceive in contravention of s 12DA(1) of the ASIC Act, in that the first defendant between early November and 23 November 2005 represented to Biega that: (a) they would only include, in any loan application they lodged on Biega's behalf, details of Biega's income, assets and employment status consistent with the information provided to them by Biega, when in fact (b) the first defendant intended to, and did in fact, include in the Second Loan Application details of Biega's income, assets and employment status which were different from the information provided to them by Biega. 7. Orders that the first defendant pay the plaintiff's costs of the proceedings. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.