Loans prove costly for WA adviser
Western Australian financial adviser, Elena Maria Collica, has been ordered to pay $200,000 plus costs to a client after being found to have breached her fiduciary duty.
The District Court of Western Australia found that Collica had advised her client, Josephine Evans, to provide loans totalling $200,000 to a mortgage broking firm, Carrington National and its director, Biagio Gino Marra, with a 10 per cent interest, between February and March 2012.
The court heard that between March 2012 and February 2013, Carrington National made some interest payments on the loan money provided by the Evans (a total of $13,241.66), but ultimately defaulted on the loan.
Court documents revealed that Marra owed Collica money for a loan she had provided him prior to advising Evans to provide loans to Carrington National, where were to be secured by a caveat over a property owned by Marra.
When Evans transferred an initial loan of $150,000 into Carrington National's bank account, Marra transferred $70,000 from that account into Collica's Bankwest account, a transfer that Evans said she was unaware of, court papers revealed.
"I have come to the view that the plaintiff has satisfied me that defendant pursued a course of conduct that was misleading and deceptive," District Court Judge Laurence Levy said.
"It follows from the above that I am satisfied of the following:
- the defendant did, in the course of trade and commerce, make misleading and deceptive representations to the plaintiff and that those representations induced the plaintiff to lend the sum of $200,000 to Carrington National;
- the defendant owed the plaintiff a duty of care and breached that duty;
- a fiduciary relationship existed between the plaintiff and defendant and that the defendant breached her fiduciary duty to the plaintiff; and
- the plaintiff did suffer loss and damage."
The court order Collica to pay $200,000 in damages, plus interest on the initial $150,000 loan at six per cent from 6 February 2012 — minus the $13,241.66 paid by Marra — with interest on the remaining $50,000 to be paid at a rate of six per cent from 6 March 2012.
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