Dover Financial Advisers and its founder Terry McMaster misled clients through its client protection policy, the Federal Court has found.

In its judgement, the court says Mr McMaster was “knowingly concerned” in conduct to publish false, misleading or deceptive statements in the policy, which purported to provide clients with the best possible advice and maximum protection available. It was sent to 19,402 clients with the Statement of Advice (SOA).

He determined or approved the policy and required Dover’s advisers to incorporate the policy into its SOAs, the court found.

Justice Michael O’Bryan says the policy was “highly misleading and an exercise in Orwellian doublespeak”. “The document did not protect clients. To the contrary, it purported to strip clients of rights and consumer protections they enjoyed under the law.”

The policy didn’t ensure that clients received the maximum protection available, purported to remove or dilute the protections they would have otherwise had, tried to prevent clients from making a claim against Dover and its advisers, tried to exclude Dover’s liability for most foreseeable breaches of the law, and sought to exclude its liability to clients.

Justice O’Bryan rejected Dover’s claim that because the Australian Securities and Investments Commission (ASIC) had not sought to prove that any clients had suffered loss through the policy, that meant Dover had not engaged in misleading and deceptive conduct.

ASIC took Dover and Mr McMaster to court in September last year, after it cancelled Dover’s license and brought an enforceable undertaking to remove Mr McMaster from the financial services industry. Mr McMaster collapsed while testifying at the Hayne royal commission.

Penalties are yet to be determined.