More than50 investors who bought into a property scheme in North Queensland are mounting cases against an assortment of individual financial advisers and a dealer group for negligence leading to substantial losses in investment.
According to Quinn Scattini solicitor Michal Horvath, the case is the tip of the iceberg, as his firm is preparing hundreds of similar cases like it in Queensland where this sort of property scheme has been popular.
In the current case, Horvath says there were at least three different financial planners involved who referred the clients onto the scheme.
The cases relate to investors buying units between 1995 and 1997 in the All Seasons Village Resort in Cairns off a middleman company, Firecroft, which guaranteed them rental income of 7.5 per cent per annum over 10 years.
Firecroft subsequently went into liquidation after five years, leaving investors with units which were not only valued at much less than they originally paid and not delivering the promised income returns, but also which they could not use because of zoning regulations.
One financial intermediary, who held a principal authority from QPlan between 1996-1999, is said to have referred 25 clients to the scheme.
Horvath says his firm will be arguing the intermediary and QPlan were in breach of the investment agreement, as well as breaching their duty of care.
QPlan director Neville East says it is unfortunate that QPlan has been dragged into the dispute, as the company has never seen any of the clients referred by Stewart into the resort property scheme, nor does it sanction property investments.
“Under a QPlan licence, you can’t sell real estate,” he says. “We don’t think we have any liability to these clients, we have never even seen any files.”
News of the impending case comes just weeks after the stockbroking firm Hartley Poynton was ordered to pay $1 million in damages to a Perth taxi-driver who lost the $300,000 he invested with the group.
In what was considered a landmark ruling, the Victorian Supreme Court found the stockbroking firm’s promise of low risk and returns of 15 to 20 per cent per month were “false, misleading and recklessly made”.
