The potential class action against Sandhurst Trustees may expand out to represent up to 180 investors, none of whom have received any funds since the failure and closure of Wickham Securities in early 2013.
Shine Lawyers financial services class actions department manager Jan Saddler said that a decision by the Federal Court of Australia last week to order Sandhurst to hand over documents would be instrumental in deciding if a class action would proceed.
Saddler said it was expected the documents — 39 in all covering financial, director’s and liquidator’s reports and trustee agreements — would be received within a month and then a further three to six months would be required to assess them and see if investors had grounds to seek compensation from Sandhurst.
Sandhurst acted as the trustee for failed property lender Wickham Securities which was owned and operated by Bradley Sherwin.
Sherwin was banned by the Australian Securities and Investment Commission for a period of two years and seven months from September 2013. The ban corresponded with the period remaining on his bankruptcy and is set to end in April 2016.
Saddler said Shine expected the class action to grow to include 150 to 180 investors after having grown from 80 in 2013 to 100 at present but stated the record keeping of Wickham Securities was poor and identifying investors, sums invested and levels of losses had been difficult.
The class action would seek to reclaim as much as possible for investors with Saddler stating that liquidators PBB Advisory had estimated total losses to initially be between $28 million and $32 million with investor losses at around $27 million but this was subject to change as Shine made contact with more Wickham investors.
According to Saddler the case was not brought to the Financial Ombudsman Service (FOS) as Wickham Securities was not a member of the service and any potential claims against Sandhurst of alleged breaches of fiduciary duty and alleged breaches of the Corporations Act were not covered by FOS terms of service.
Sandhurst was initially ordered to hand over the relevant documents in a court ruling brought by two Wickham Securities investors but appealed against the ruling, which was dismissed last week. However Sandhurst can still appeal to the High Court of Australia if it receives a special leave application to do so.
