A director who collapsed while giving evidence at the banking royal commission is fighting allegations he and his financial advice firm misled almost 20,000 clients.
The corporate regulator has taken civil penalty action against the now-defunct Dover Financial Advisers and its sole director Terry McMaster, alleging they engaged in misleading and deceptive conduct.
Mr McMaster is not expected to be questioned about his written statement during the two-day Federal Court hearing in Melbourne.
He collapsed in the witness box during a royal commission hearing in the same Commonwealth Law Courts building in April last year, while being questioned about the company's "Orwellian" client protection policy.
The policy is at the centre of the Australian Securities and Investments Commission's allegation of misleading and deceptive conduct.
ASIC barrister Bernie Quinn QC said the client protection policy wrongly claimed to provide the maximum protections under the law, and Dover admitted it was inaccurate.
"One can say it is misleading and deceptive and likely to mislead and deceive each and every person who gets it, and that is what this case is really about," he told the court on Wednesday.
ASIC's allegations include that the policy sought to protect the interests of Dover and its advisers by avoiding liability to clients for poor financial advice.
More than 19,400 clients received the client protection policy between September 2015 and March 2018, via a hyperlink to their emailed statement of advice.
Dover and Mr McMaster argued there was no evidence that anyone was misled or deceived by the policy or suffered any loss from it.
"There is no evidence of any complaint made," defence barrister Jeff Gleeson QC said.
"There is no evidence from anybody at all that they were misled."
The introduction to the client protection policy stated it was designed to ensure that every Dover client gets the best possible advice and maximum protection available under the law.
Mr Gleeson said it was an expression of opinion about the law.
The court heard Dover complied with ASIC's request to withdraw the policy in March last year.
Mr Gleeson said Dover told clients the policy was deceptive because it contained certain provisions, the effect of which was to avoid liability to compensate clients for any loss caused by the advice provided.
ASIC wants the court to declare Dover and Mr McMaster broke financial services laws and impose fines.
Dover faces a maximum penalty of more than $2 million for each contravention and Mr McMaster $420,000.
Melbourne-based Dover was one of the largest financial planning groups in Australia, with more than 400 authorised representatives, before it closed a year ago.
ASIC, which began investigating the firm in 2017, cancelled Dover's financial services licence and Mr McMaster agreed to remove himself permanently from the financial services industry.