The Supreme Court has ordered a real estate company to publish a notice on its website announcing that it contravened the Corporations Act.
Acting justice Ronald Sackville said Park Trent Properties Group will have to leave the notice in place for 90 days to alert clients and potential clients about its conduct.
“An order requiring publication of a notice on its website appropriately recognises the seriousness of Park Trent’s contravention and the public interest in bringing Park Trent’s conduct to the attention of the community, including current or potential clients of Park Trent,” he said.
“The public interest extends to providing clients and potential clients with the means of ascertaining the constraints under which Park Trent must operate pursuant to the orders made by the court.”
Justice Sackville made the ruling after an earlier finding, in October, that Park Trent unlawfully carried on a financial services business for more than five years by providing advice to clients to purchase investment properties through an SMSF.
The Wollongong business promotes itself as a “full-service property company” that offers sales services, property management and investment advice.
ASIC, which initiated legal proceedings against Park Trent, asked the court to impose the website ruling.
This was opposed by Park Trent, which said the regulator’s proposal was “designed more to punitively humiliate Park Trent and damage its goodwill” than to achieve any practical benefit – however, the judge disagreed.
“There is nothing to support Park Trent’s submissions that an order requiring publication of a notice on its website is designed to punish or humiliate it, without achieving any practical effect,” he said.
“The publication of a notice advances the public interest in the ways I have identified.”
According to ASIC, Park Trent had advised more than 860 consumers to establish and switch funds into an SMSF by the time the trial started in June 2015.
In his October judgment, Justice Sackville said that Park Trent's business model depended on “persuading relatively unsophisticated investors of the virtues of using their superannuation accounts to purchase investment properties and to establish SMSFs”.
ASIC commissioner Greg Tanzer said the Supreme Court decision sends a message that there are serious consequences for property spruikers who break the law by providing unlicensed financial advice.