In the matter of Atlas Advisors Australia Pty Ltd [2022] NSWSC 705

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Atlas Advisors Australia Pty Ltd [2022] NSWSC 705 Hearing dates: 30 November; 1–3 December; 7–8 December; 10 December; 14 –16 December 2021; 18 January 2022; 28 April 2022, 4-5 May 2022. Date of orders: 30 May 2022 Decision date: 30 May 2022 Jurisdiction: Equity - Corporations List Before: Black J Decision: The First Plaintiff succeeds in respect of the Second Tredmore Investment, the Third Plaintiff succeeds in respect of the Lili Investment and the Plaintiffs collectively fail in their claim against Ms Zhuang. Parties are to bring in their agreed orders or their respective orders and submissions within 14 days. Catchwords: CORPORATIONS — Financial services — Misleading or deceptive conduct — Where claims relate to representations said to have been made as to the security or safety of investment in certain financial products — Where plaintiffs plead several representations as to safety, existence of mortgages, rate of return, existence of guarantees, and the extent and nature of the due diligence process — Whether there was a further representation that the relevant fund was "very safe" —Where representations made orally in Mandarin and in written Chinese — Whether the representations were misleading and deceptive and causative of loss suffered by the plaintiffs. CORPORATIONS — Financial services — Unconscionable conduct — Statutory unconscionability — Whether conduct of the defendants "unconscionable" in the circumstances — Where allegations of vulnerability or relationship of dependence. Legislation Cited: - Australian Securities and Investments Commission Act 2001 (Cth), ss 12DA, 12DB, 12CA, 12CB, 12GF, 12GM - Corporations Act 2001 (Cth), ss 991A, 1041E, 1041F, 1041H - Evidence Act 1995 (NSW), ss 136, 140 Cases Cited: - Armagas Ltd v Mundogas SA [1985] 1 LI R - Australian Competition and Consumer Commission (ACCC) v CG Berbatis Holdings Pty Ltd (2000) 96 FCR 491; (2000) 169 ALR 324; [2000] FCA 2 - Australian Securities & Investment Commission v Cycclone Magnetic Engines Inc (2009) 71 ACSR 1; [2009] QSC 58 - Australian Securities and Investments Commission (ASIC) v Elm Financial Services Pty Ltd (2005) 55 ACSR 544; [2005] NSWSC 1065 - Australian Securities and Investments Commission (ASIC) v GetSwift Ltd [2021] FCA 1384 - Australian Securities and Investments Commission (ASIC) v Kobelt (2019) 267 CLR 1; (2019) 368 ALR 1; [2019] HCA 18 - Australian Securities Commission v Macleod (2000) 22 WAR 255; (2000) 34 ACSR 135; [2000] WASCA 101 - Australian Securities & Investment Commission v Narain (2008) 169 FCR 211; (2008) 66 ACSR 688; [2008] FCAFC 120 - Australian Competition and Consumer Commission (ACCC) v Quantum Housing Group Pty Ltd (No 2) [2020] FCA 802 - Australian Competition and Consumer Commission (ACCC) v Quantum Housing Group Pty Ltd (2021) 388 ALR 577; (2021) 151 ACSR 98; [2021] FCAFC 40 - Australian Securities and Investments Commission (ASIC) v Wealth and Risk Management Pty Ltd (No 2) (2018) 124 ACSR 351; [2018] FCA 59 - Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 - Broughton v B&B Group Investments Pty Ltd [2017] VSCA 227 - Browne v Dunn (1894) 6 R 67 - CH Real Estate Pty Ltd v Jainran Pty Ltd [2010] NSWCA 37 - Changizi v Rizaie [2021] NSWSC 613 - Dawson v LNG Holdings Pty Ltd [2008] NSWSC 137 - Houghton v Arms (2006) 225 CLR 553; [2006] HCA 59- Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd (No 2) [2008] FCA 810 - Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets (No 6) (2007) 63 ACSR 1; [2007] NSWSC 124 - Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Market Ltd (2008) 73 NSWLR 653; (2008) 252 ALR 659; (2008) 68 ACSR 595; [2008] NSWCA 206 - Jagatramka v Wollongong Coal Ltd [2021] NSWCA 61 - Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; (2011) 276 ALR 375; [2011] HCA 11 - Macleod v Australian Securities and Investments Commission (2002) 211 CLR 287; (2002) 191 ALR 543; (2002) 76 ALJR 1445; (2002) 43 ACSR 1; [2002] HCA 37 - Musa v Alzreaiawi [2021] NSWCA 12 - National Companies & Securities Commission v Monarch Petroleum NL [1984] VR 733; (1984) 8 ACLR 785; (1984) 2 ACLC 256 - Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449; [1992] HCA 66 - New South Wales v Hunt (2014) 86 NSWLR 226; [2014] NSWCA 47 - R v Albuino (2001) 80 SASR 416; (2001) 165 FLR 335; [2001] SASC 397 - Re IW4U Pty Ltd (in liq) (2021) 150 ACSR 146; [2021] NSWSC 40 - Samm Property Holdings Pty Ltd v Shaye Properties Pty Ltd [2017] NSWCA 132 - SDS Corporation Ltd v Pasdonnay Pty Ltd [2004] WASC 26 - Stav Investments Pty Ltd v Taylor [2022] NSWSC 208 - Swiss Re International SE v Simpson [2018] NSWSC 233; (2018) 354 ALR 607 - Sutton v AJ Thompson Pty Ltd (in liq) (1987) 73 ALR 233 - Varma v Varma [2010] NSWSC 786 - Ventouris Enterprises Pty Ltd v Dib Group Pty Ltd [2010] NSWSC 963 - Watson v Foxman (1995) 49 NSWLR 315 - Yorke v Lucas (1985) 158 CLR 661; (1985) 61 ALR 307; [1985] HCA 65 Texts Cited: - G Golding "Underwriters' liability in Australian securities offerings" (1993) 11 C&SLJ 401 - J Harris & S Webbey, "Personal liability for corporate disclosure problems" (2011) C&SLJ 463 - S Minns & G Golding, "Prospectus Due Diligence – A Focussed Approach" (1993) 11 C&SLJ 542 Category: Principal judgment Parties: Tredmore Pty Ltd as trustee for the Xue Family Trust (First Plaintiff) Lijuan Xue (Second Plaintiff) Lili Xue (Third Plaintiff) Atlas Advisors Australia Pty Ltd (First Defendant) Wenyan Zhuang also known as Fiona Zhuang (Second Defendant) Representation: Counsel: M E Einfeld QC/E Young (Plaintiffs) P Knowles/S Danne (Defendants)