Corporations Act 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS  

Note: This Chapter applies to a CCIV in a modified form: see Division 4 of Part 8B.7 .

PART 7.7 - FINANCIAL SERVICES DISCLOSURE  

Division 7 - Enforcement  

Subdivision B - Civil liability  

SECTION 953B   CIVIL ACTION FOR LOSS OR DAMAGE  

953B(1)    
This section applies in the following situations:

(a)    

a person:

(i) is required by a provision of this Part to give another person (the client ) a disclosure document or statement (the required disclosure document or statement ), other than website disclosure information; and

(ii) does not give (within the meaning of section 940C ) the client anything purporting to be the required disclosure document or statement by the time they are required to do so; or

(b)    

a person:

(i) gives another person (the client ) a disclosure document or statement (other than website disclosure information) that is defective in circumstances in which a disclosure document or statement is required by a provision of this Part to be given to the client; or

(ii) is a financial services licensee and gives, or makes available to, another person (the client ) a disclosure document or statement, being a Financial Services Guide or a Supplementary Financial Services Guide, that is defective, reckless as to whether the client will or may rely on the information in it; or

(ba)    

a person:

(i) makes available a disclosure document or statement, being website disclosure information, that is defective in circumstances in which it is required by a provision of this Part to do so; or

(ii) makes available on its website a disclosure document or statement, being website disclosure information, that is defective, reckless as to whether a person will or may rely on the information; or

(c)    

a person contravenes section 949A or 949B .

In paragraph (b), give means give by any means (including orally), and is not limited to the meaning it has because of section 940C .

953B(2)    
In a situation to which this section applies, if a person suffers loss or damage:

(a)    if paragraph (1)(a) applies - because the client was not given the disclosure document or statement that they should have been given; or

(b)    

if paragraph (1)(b) or (ba) applies - because the disclosure document or statement that was given, or made available, to the client was defective; or

(c)    if paragraph (1)(c) applies - because of the contravention referred to in that paragraph;

the person may, subject to subsection (6) , recover the amount of the loss or damage by action against the, or a, liable person (see subsections (3) and (4) ), whether or not that person (or anyone else) has been convicted of an offence in respect of the matter referred to in paragraph (a) , (b) or (c) .

953B(3)    
For the purposes of subsection (2) , the, or a, liable person is:

(a)    

if the person first-referred to in paragraph (1)(a) , (b) , (ba) or (c) is a financial services licensee - subject to subsection (4) , that person; or

(b)    

if the person first-referred to in paragraph (1)(a) , (b) , (ba) or (c) is an authorised representative of only one financial services licensee - that financial services licensee; or

(c)    

if the person first-referred to in paragraph (1)(a) , (b) , (ba) or (c) is an authorised representative of more than one financial services licensee:

(i) if, under the rules in section 917C , one of those licensees is responsible for the person ' s conduct - that licensee; or

(ii) if, under the rules in section 917C , 2 or more of those licensees are jointly and severally responsible for the person ' s conduct - each of those licensees.

953B(3A)    
For the purposes of paragraph (3)(c) :

(a)    section 917C is taken to apply, despite section 917F ; and

(b)    section 917D is taken not to apply.

953B(4)    
If:

(a)    

paragraph (1)(b) or (ba) applies; and

(b)    

an alteration was made to the disclosure document or statement before it was given, or made available, to the client; and

(c)    the alteration made the disclosure document or statement defective, or more defective than it would otherwise have been; and

(d)    the alteration was not made by, or with the authority of, the person who would, but for this subsection, be the liable person because of paragraph (3)(a) ;

then, so far as a person has suffered loss or damage because the disclosure document or statement was defective because of the alteration, the liable person is the person who made the alteration, rather than the person referred to in paragraph (d) .

953B(5)    
An action under subsection (2) may be begun at any time within 6 years after the day on which the cause of action arose.

953B(6)    

A person is not liable under subsection (2) in a situation described in paragraph (1)(b) or (ba) if the person took reasonable steps to ensure that the disclosure document or statement would not be defective.

953B(7)    
This section does not affect any liability that a person has under any other law.