The first judgment from a court dealing with allegations of breach of the 'best interest' obligations introduced by the Future of Financial Advice (FOFA) reforms was delivered in the Federal Court on 30 March. These changes were implemented through the Corporations Amendment (Streamlining Future of Financial Advice) Regulation 2014. The Regulation commenced on 1 July 2014.The following is based on commentary in this week's Financial Services Disputes bulletin from top tier law firm Ashurst (formerly Blake Dawson):In June 2016, ASIC brought proceedings against NSG Services Pty Ltd alleging its representatives had failed to: act in the best interests of their clients pursuant to s 961B (best interests duty); and provide advice appropriate to their clients pursuant to s 961G (appropriate advice duty).NSG holds an Australia Financial Services Licence permitting it to advise retail clients about life insurance and superannuation products through its representatives. ASIC and NSG agreed that NSG was liable for the alleged breaches, but it remained necessary for the court to be satisfied that a proper basis existed for this agreement.Justice Moshinsky considered the legislative provisions and made the following observations (paraphrased for brevity): The best interests duty will be satisfied if an advisor proves that, in giving financial advice, the advisor took each of seven steps outlined in the [new TOFA legislation]. However, it was accepted by both parties that a person may be able to satisfy the best interest duty even if they did not have the benefit of the 'safe harbour' protection. ASIC argued that, generally, in the real world coming within the safe harbour would at least be the main way of showing the duty was discharged. A possible contrast between the best interests duty and the appropriate advice duty was noted by the Court: it was common ground that one section is concerned with the process or procedure involved in providing advice that is in the best interests of the client, while another section is concerned with the content or substance of that advice. The Court observed that, despite this, the best interests criterion is implied in the context of other provisions, the legislative history and the legislative materials."Although his Honour did not reach a concluded view on this issue (as it was not necessary to do so), it seems to us his comments lend support to the proposition that s 961B is focused primarily on the process by which an adviser goes about ensuring he or she gives advice, rather than the content of the advice itself (which is the focus of s 961G)," observed Ashurst's legal commentators.ASIC and NSG reached agreement concerning NSG's liability, but did not reach agreement on the appropriate level of pecuniary penalties for the court to impose. This is likely to be determined by contested hearing at a later stage.