WealthSure clients appeal claim reduction
Two former WealthSure clients have been granted an application for special leave to appeal the reduction of their claim against the planning group and to compel its professional indemnity (PI) insurer to pay the full costs owed in the case.
The legal representatives for Ronald and Janna Selig have argued that while former WealthSure adviser David Bertram has dropped out of the case due to bankruptcy, WealthSure's PI insurer, QBE, should cover all damages allocated to Bertram, as it insured him under WealthSure at the time the advice was provided.
The arguments for the leave to appeal were heard in proceedings held in the High Court of Australia on 14 November.
It follows a succession of hearings in the Full Federal Court in which the Seligs were awarded damages of $1.7 million relating to inappropriate advice and investments into Neovest Limited and Norton Capital, which have since gone into liquidation.
In May Wealthsure appealed the manner in which damages were apportioned with the Federal Court ruling damages would be apportioned between the Seligs, Wealthsure and Bertram, and the directors of Neovest and Norton Capital and reducing the total amount directed to the Seligs by around $250,000. The decision also halved the amount WealthSure would be required to pay to around $875,000.
Paul Heywood-Smith QC, acting for the Seligs, stated in the hearing that Bertram should not have been part of the appeal relating to the apportioning of costs as he had removed himself from the case when he declared himself bankrupt at the end of last year and his trustee had elected not to take part in the case.
He also stated since Bertram's bankruptcy trustee had assigned its rights to the Seligs, they should have been able to call on QBE to pay both WealthSure and Bertram's share of the awarded damages without any reduction.
Robert Whitington QC, acting for WealthSure and Bertram, stated the Selig's were seeking to access Bertram's PI insurance cover via the Bankruptcy Act.
He argued they should be prohibited from doing so since the appeal apportioning damages was a continuation of the case started in late 2013 and access to Bertram's assets, including his PI insurance, fell outside of the boundaries of the case and the operation of bankruptcy law.
The hearing, which was heard by two high court judges, concluded without a decision and will return to the court at a later date.
AUTHOR
Jason Spits
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