Former Wealthsure clients win appeal for $1.7m damages
Two former Wealthsure clients have won an appeal which will result in them receiving $1.7 million in damages and overturning a previous decision which would have reduced the damages claim.
The High Court of Australia ruling, delivered on 13 May, overturned a number of previous decisions in lower courts and reinstates the $1.7 million damages claim initially sought by the former clients, Ronald and Janna Selig, and awarded to them in April 2013.
It also overturns decisions made in the Federal Court of Australia that would have apportioned damages between Wealthsure, Bertram, two investment managers and the Seligs, which would have reduced their damages claim to $1.4 million.
The former clients had received advice from former Wealthsure adviser David Bertram and had initially received a ruling in the Federal Court of Australia awarding them $1.7 million following investment losses sustained due to advice provided David Bertram.
The High Court also ruled that QBE, the professional indemnity insurer for Wealthsure and Bertram, pay the costs of the Seligs in their appealing to the High Court against the apportioning of damages and also ruled that any appeals and cross-appeals on this matter be dismissed.
The initial apportioning case was heard by the Federal Court of Australia in June last year which ruled the ruled the Seligs were partly responsible for their own losses and as such would only receive $1.45 million in damages while also being ordered to pay 30 per cent of the appeal costs of WealthSure and the other defendants who sought apportioning.
In appeal documents tended to the High Court legal representation for the Seligs have argued "the Corporations Act provides, upon its natural reading, that loss consequent upon misleading advice from a licensed financial services provider is to be recovered without apportionment".
Paul Heywood-Smith QC, acting for the Seligs, stated in the documents that there were conflicting decisions in other cases from differently constituted appellate courts but that under the Corporations Act that "once a cause of action is established which is nonapportionable the claim is not apportionable even though the facts might give rise to a separate claim that is an apportionable claim".
AUTHOR
Jason Spits
Recommended for you
Two commentators have shared why cultural alignment can be the biggest deal breaker when it comes to advice M&A and how to ensure a successful fit.
With an abundance of private market options coming to market, due diligence becomes increasingly important as advisers separate the wheat from the chaff, adviser Charlie Viola has said.
The Treasury has launched a consultation into how the $47 million special levy for the Compensation Scheme of Last Resort will be funded.
With the final tally for FY25 now confirmed, how many advisers left during the financial year and how does it compare to the previous year?
