Charter Financial Planning Ltd v Scott North Pty Ltd [2023] NSWSC 1304

Supreme Court New South Wales

Medium Neutral Citation: Charter Financial Planning Ltd v Scott North Pty Ltd [2023] NSWSC 1304 Hearing dates: 27 October 2023 Decision date: 27 October 2023 Jurisdiction: Equity - Commercial List Before: Stevenson J Decision: Defendants' Notice of Motion filed 20 October 2023 is dismissed with costs Catchwords: CIVIL PROCEDURE – pleadings – application to strike out or stay proceedings – whether list statement fails to establish actions for damages pursuant to s 236 of ACL Legislation Cited: Competition and Consumer Act 2010 (Cth), Sch 2 – Australian Consumer Law Category: Procedural rulings Parties: Charter Financial Planning Limited (First Plaintiff/Respondent) AMP Financial Planning Pty Limited (Second Plaintiff/Respondent) Scott North Pty Ltd (First Defendant/Applicant) Arthur Thomas Scott North (Second Defendant/Applicant) Representation: Counsel: A Avery-Williams (Plaintiffs/Respondents) R Watson-Jones (Defendants/Applicants)

Solicitors: HWL Ebsworth Lawyers (Plaintiffs/Respondents) Snowton Saje (Defendants/Applicants) File Number(s): 2023/302273

EX TEMPORE JUDGMENT (rEVISED) 1. By Notice of Motion filed on 20 October 2023, the defendants seek to strike out, or alternatively stay, the claims made by the plaintiffs, Charter Financial Planning Ltd and AMP Financial Planning Pty Ltd, in their Summons and Commercial List Statement filed on 22 September 2023. 2. Charter and AMP are both subsidiaries of AMP Ltd and have common directors. 3. The defendants were formerly authorised representatives of AMP. 4. By a "Buyback Deed" made between AMP and the defendants on or about 26 October 2021, AMP purchased from the defendants their "Register of Rights," as defined in the Buyback Deed. 5. Under the terms of the Buyback Deed, the defendants agreed not to engage in any "Financial Activity" in the "Restraint Area" as defined in the Buyback Deed, not to solicit or persuade a "client" to stop or reduce its business with AMP and not to accept, from a client, any business of a kind specified. I will call those "the Restraints". 6. On the same day AMP onsold the Register of Rights to Charter, Charter in turn sold the Register of Rights to a third party to these proceedings, Partners Wealth Group. 7. Turning now to the particular claims made by AMP, AMP claims, in the circumstances I have described, to be entitled to "specific performance" of the clause in the Buyback Agreement contained in the Restraints, "or alternatively damages to compensate it for breach of" the Buyback Deed. 8. The defendants submit that specific performance is a discretionary remedy and "appropriate when damages are inadequate". The defendants contend that in this case damages are not inadequate because AMP has suffered no loss. 9. AMP accepts it has suffered no damage by reason of the sale of the Register of Rights because it has sold that register to Charter for value. 10. In her submissions before me today, Ms Avery-Williams for Charter and AMP said: "[AMP] has sold the Register of Rights and been paid. That does not mean it has not suffered other compensable loss by reason of the Defendants' breach of the Buyback Deed, for example, reputational damage." 1. In that regard, the defendants point to statements made on behalf of AMP in earlier proceedings. In those proceedings AMP sought preliminary discovery from the defendants and a release from the Harman undertaking given in relation to that preliminary discovery, so as to enable AMP to make available to Charter the documents so obtained. 2. In the course of those proceedings AMP, through its legal representatives, said to the Court on a number of occasions words to the effect that any "financial loss" arising from the transactions I have outlined was suffered by Charter rather than AMP. 3. Those statements may have had some role to play in the Court's decision to accede to AMP's applications in those proceedings. 4. However, absent any suggestion before me of any abuse of process by AMP, I emphasise no such assertion is made. I cannot see why the making of those statements would prevent AMP from contending in these proceedings that although it has not suffered "financial loss" in the sense of loss arising from the sale of the Rights Register, it may have suffered other loss, including the reputational loss to which Ms Avery-Williams referred in her submissions. 5. It may be that the establishment by AMP of reputational damage, and no more, would be a factor that the trial judge concludes militates against granting specific performance. But the fact that AMP seeks specific performance in effect to restrain the defendants from acting in breach of the Restraints and alternative damages is not a matter that could possibly compel summary dismissal of the claim. 6. Turning now to Charter, in par 56 of the List Statement the following allegations are made: "By reason of the matters pleaded in paragraphs 16 to 26 and 47 to 55 above, Charter has suffered loss and damage. Particulars Charter has suffered loss in the amount of $1,737,485 comprised of the amount it paid AMPFP under the ILSA and the Compensation sum, plus interests and costs." 1. The defendants contend that these contentions are inadequate because they do not establish a "causal nexus" between the damage that Charter claims to have suffered and conduct contravening the relevant provisions of the Australian Consumer Law ("ACL"). [1] Thus it is alleged that this paragraph of the List Statement fails to make out the cause of action in s 236 of the ACL. 2. But it does. 3. Paragraphs 16 to 26 of the List Statement, incorporated by reference into par 56, assert Charter's onsale of the Rights Register to Partners Wealth Group. 4. Paragraph 56 also incorporates by reference pars 47 to 55. In those paragraphs, Charter alleges that the allegedly misleading or deceptive representations that AMP alleges were made to it, were also made to Charter as a member of a "class of persons comprising any subsequent acquirer of the Register of Rights". 5. Those paragraphs do constitute an allegation of contravention by the defendants of the ACL. 6. Also in par 56, Charter alleges it has suffered damages as a result of those contraventions, namely, the amount it paid AMP for the Rights Register, and a further amount that it has paid to Partners Wealth Group to compromise a dispute that evidently occurred between the parties. 7. The List Statement thus does not, so far as concerns Charter, have the shortcomings alleged. 8. The defendants have failed to establish a basis either to strike out or stay these proceedings. The defendants' Notice of Motion filed 20 October 2023 is dismissed with costs.