WealthSure’s professional indemnity (PI) insurer has been ordered to pay the court costs of an action to remove a bankrupt former planner from a $1.7 million claim against the dealer group.
However the PI insurer, QBE, may elect to continue the appeal and potentially use the entire available liability sum of $3 million to defend the case.
The order was made in the The Federal Court of Australia and will require QBE to pay the costs associated with removing former WealthSure adviser David Bertram from an appeal against a $1.7 million ruling in favour of two of his clients, Ronald and Janna Selig.
In an earlier hearing and judgement, The Federal Court had decided in favour of the Seligs and awarded them the sum for investment losses suffered while they were financial planning clients of Bertram.
This judgement was followed by an appeal by WealthSure and Bertram, with Bertram later filing for bankruptcy. The Official Trustee for Bankruptcy, acting for the estate of Bertram, withdrew its appeal against the ruling.
In a hearing to decide whether the Official Trustee could discontinue the appeal, Judge Burnett ordered QBE to pay the cost of the Seligs related to the discontinuance hearings but also noted that QBE could continue the appeal.
Judge Burnett stated paperwork for an appeal had been lodged and that costs so far in the case had run to $1.975 million and were likely to climb higher, which when combined with the $1.7 million ordered to be paid to the Seligs would exceed the $3 million maximum available for a single claim under the PI policy.
Judge Burnett also stated that further legal costs would have a negative impact on the sum to be paid to the Seligs. He said it was possible these costs could erode that sum entirely if the legal costs associated with the initial cases and with appeal continued to accumulate.
“The facts remains that it appears that the lion’s share of the indemnity cap will be directed to the payment of costs and not the judgment that the Seligs have succeeded in obtaining,” Judge Burnett stated in the reasons for judgement in the recent case.