Garan Holdings Pty Ltd v Stonepoint Capital Management Pty Ltd (in liq)

[2026] NSWSC 373

Supreme Court of NSW

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Catchwords

1. CONSUMER LAW — Misleading or deceptive conduct — Representations as to the nature, suitability and characteristics of investments — Where representations made were antithetical to the reality of the operation of the investment fund — Where reliance on representations caused loss and damage — Where representations misleading or deceptive despite disclaimers in an information memorandum

Quick Take

The Court held that an accountant and financial adviser who recommended investments in a fund of which he was a director owed duties of care, fiduciary duties, and was liable for misleading or deceptive conduct where oral and written representations about the fund's security, diversification, and redemption terms were fundamentally antithetical to its actual operation of lending all funds to a related entity for speculative forex trading. Disclaimers and risk warnings in the information memorandum did not erase the misleading character of specific positive representations about the fund's lending policy and security. The Court found the trustee committed fraud on a power and breach of trust, and the director and related entities were liable as knowing assistants and knowing recipients under Barnes v Addy, but declined to order rescission of the impugned loan at the beneficiaries' request, finding no authority for beneficiaries to stand in the trustee's shoes to avoid a contract, and left open whether a director can be liable for inducing or procuring a corporate trustee's breach of trust merely by virtue of acts undertaken as director.