SMSF trustee faces allegations of misuse of funds
A self-managed super fund trustee is set to face legal action relating to allegations of using money from the fund for other investments.
The Supreme Court of NSW has given a couple the green light to proceed with action against the trustee of their SMSF, Gabriel Nakhl, an authorised representative of Australian Financial Services Licensee (AFSL), SydFA Pty Ltd, after suffering losses totalling more than $2 million from their SMSF and a unit trust he was responsible for.
The court heard that, flat-glass tradesman Vincent Paul Belcastro and his wife Joanne, were informed by ASIC that the regulator had obtained interim freezing orders against Nakhl, which extended to their funds in February 2013.
Belcastro then became aware of facts which lead him to believe that money had been withdrawn by Nakhl from his investments and used in other investments, as a result of which the Belcastros claim to have suffered significant losses amounting to $818,004.59 from the Belcastro Super Fund and $1,232,830 from the Belcastro Unit Trust.
The Belcastros also claimed damages from Nakhl and his associated corporations (SydFA, Sydney Financial Planning, Australia Financial Services) for breach of contract, breach of fiduciary duty, misrepresentation, unconscionable conduct of various types, negligence and for various statutory causes of action.
While the Belcastros' case against Nakhl and his associated corporations has been approved by the Court, the couple has been granted leave to file an Amended Statement of Claim against his insurers, after they argued that SydFA was in breach of its professional dusty within the meaning of the policy.
The matter will go before the court for directions on 31 October.
AUTHOR
Nicholas O'Donoghue
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