Court Awards $854,010 Over Misleading Property Investment Scheme in D’Cruz v Coutinho [2025] NSWSC 150
In D’Cruz v Coutinho, the Supreme Court of New South Wales held that the plaintiffs, Beryl and Stanislaus D’Cruz, were induced into investing $854,010 in fictitious property developments through misleading and deceptive conduct.
The investments, marketed under the names The Meadows and Highlands Estate, were presented as high-return opportunities requiring upfront payments to secure land lots. The Court found that the representations made by Jude Savio Pio Coutinho (First Defendant) and his associated companies were false and misleading, and that mortgage broker Nigel Nigel Christian Savio Sequeira (Sixth Defendant) also engaged in misleading conduct.
The Court awarded the plaintiffs the full amount invested, along with pre-judgment interest and costs.
D’Cruz v Coutinho [2025] NSWSC 150
Key Takeaways
Chief Justice Hammerschlag found that the conduct of the defendants breached sections 4 and 18 of the Australian Consumer Law (ACL), set out in Schedule 2 of the Competition and Consumer Act 2010 (Cth). The defendants represented that settlement of the land purchases was imminent, that investors would receive valuable lots, and that the investment returns would be substantial. These representations were found to be misleading and deceptive within the meaning of section 18 of the ACL, as they created a false impression that the projects were legitimate and imminent. The claims were also considered to be representations about future matters, and in the absence of reasonable grounds to support them, they were deemed misleading under section 4(1) of the ACL. The Court found that there were no reasonable grounds for these representations because, at all material times, the defendants did not own the properties in question and had no enforceable legal interest that would allow them to deliver the promised lots.
The Court also referenced section 236(1) of the ACL, which provides that a claimant who suffers loss or damage as a result of conduct that contravenes Chapter 2 of the ACL may recover the amount of that loss or damage from the contravening party or a person involved in the contravention. On this basis, the plaintiffs were entitled to damages, as their loss was a direct result of the defendants' misleading and deceptive conduct.
The Court concluded that Coutinho was knowingly involved in the contraventions by his companies, Avondale Property Group and QC Property Management, and had full knowledge that no legal interest in the properties had been secured. Sequeira’s assertion that he was merely an introducer or a passive conduit was rejected. He had actively endorsed the investment proposals, falsely claimed to have personally invested, and made representations to the plaintiffs in his own right. His conduct, the Court held, materially induced the plaintiffs to invest.
Factual Background
The plaintiffs, Beryl Clotilda D’Cruz (First Plaintiff) and Stanislaus Gregory D’Cruz (Second Plaintiff), an elderly couple with limited investment experience, were introduced to the schemes by Sequeira, a mortgage broker who had previously arranged finance for them. Sequeira initiated the conversation by suggesting they invest in land developments promoted by Jude Coutinho. He claimed that he and others had already invested and that the plaintiffs could secure a valuable land lot for a fraction of its future worth. These claims were reinforced by detailed Investment Memoranda, Zoom meetings, and further communications asserting imminent settlement and high future valuations. Relying on these representations and the trust they placed in Sequeira, the plaintiffs made multiple payments totalling $854,010.
In reality, neither Coutinho nor his companies held any proprietary interest in the advertised properties. The lots were never secured, and the promised developments never occurred. The money was not used for any legitimate acquisition or development, and the plaintiffs were left with nothing.
The Court’s Findings
Chief Justice Hammerschlag determined that the conduct of Coutinho, Pinnacle Property Enterprises Pty Ltd t/as Avondale Property Group (Second Defendant) and QC Property Management Pty Ltd (Fourth Defendant) was in trade or commerce and that their representations were false and misleading. The Court accepted that the promotional materials and verbal assurances were designed to induce investment and conveyed the impression that investors would receive valuable land lots in near-future settlements.
These representations were held to contravene section 18 of the ACL. Furthermore, since the statements concerned future events and the defendants led no evidence to suggest they had a reasonable basis for them, the representations were also found to be misleading under section 4. The Investment Memoranda and verbal claims lacked any foundation in fact, as the developments were neither viable nor imminent.
Coutinho, as the sole director and shareholder of the relevant companies, was found to be knowingly concerned in the contraventions. He directly participated in making the representations, understood they were false, and continued to request funds from the plaintiffs under these pretences. Sequeira's conduct also fell within the scope of misleading or deceptive conduct. The Court rejected his defence and found that he was not a passive conduit, but rather an active participant who knowingly contributed to the plaintiffs' loss.
Decision
The Court struck out the defences of Coutinho, APG and QCPM under section 61(3) of the Civil Procedure Act 2005 (NSW) due to their failure to comply with court orders and appear at trial. It entered judgment for the plaintiffs against those defendants as well as Sequeira, ordering payment of $854,010 plus pre-judgment interest and costs. The Court held that the plaintiffs were entitled to recover the full amount lost pursuant to section 236 of the Australian Consumer Law, as the loss flowed directly from their reliance on the misleading conduct.
Lessons for Prospective Investors
This case offers a stark reminder of the importance of independent due diligence before entering into any investment. Investors should never rely solely on promotional material or verbal representations, particularly from individuals with a vested interest in the transaction. Even when the introducer appears trustworthy or has a prior professional relationship, one must take independent steps to verify the legitimacy of the opportunity.
Before investing significant sums, individuals should conduct thorough background checks on the promoters and entities involved, request documentary proof of ownership or legal interest in the assets being offered, and obtain independent legal and financial advice from professionals unconnected with the transaction. Offers of unusually high returns should always be treated with caution, especially when accompanied by urgency or pressure tactics.
The plaintiffs in this case were ultimately vindicated by the Court, but only after a substantial financial and emotional toll. Their experience underscores that proper due diligence and independent advice are not merely optional, but essential steps in any investment process.
How Arida Lawyers Can Help
If you have suffered loss as a result of misleading investment schemes or deceptive conduct, Arida Lawyers is here to help. Arida Lawyers has an in-depth understanding of the intricacies of Competition and Consumer Law, and specifically, the Australian Consumer Law, and can provide clear, strategic advice tailored to your situation. We understand the stress and complexity that often comes with Australian Consumer Law and contract disputes and are committed to helping you pursue the remedies you deserve.
We invite you to schedule a free 10-minute telephone consultation with one of our lawyers to discuss your matter confidentially and without obligation.
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