The liquidator appointed to a financial planning firm involved in the collapse of Westpoint has won a claim for fees and expenses out of the proceeds of professional indemnity (PI) insurance.
Liquidator Russell Harry Morgan of KordaMentha – who was appointed to Perth-based financial planning firm Brighton Hall Securities in 2007 – appeared before the Federal Court of Australia in Perth yesterday, seeking judgement on a claim for costs.
Having obtained a $2 million payment as a result of a settlement agreement between Brighton Hall and its PI insurer Allianz in August 2010, Mr Morgan sought the guidance of the court to determine how to distribute the payment in accordance with the Corporations Act.
In a judgement handed down on November 20, Justice McKerracher awarded the liquidator the right to take his “fees and expenses from the insurance proceeds”, including costs associated with obtaining the payment from Allianz as well as distribution costs.
The ruling follows a longstanding class-action litigation suit against Brighton Hall Securities, brought by ASIC in 2009 to seek damages on behalf of former clients who were allegedly advised to invest in Westpoint products.
Brighton Hall was placed into liquidation in 2007 after being unable to obatin additional PI insurance cover.
The news comes as Coalition Senator John Williams criticised the corporate regulator for overstepping its brief in litigation cases.
Following a scheduled hearing of ASIC’s leadership before the Senate Economics Legislation Committee in Canberra yesterday, Senator Williams told ifa he had concerns about the regulator’s conduct in such civil cases.
“ASIC’s job is simply to enforce the corporate law,” Mr Williams said. “If someone was to sue an institution under the law and hope for a settlement when they get to the courts, all well and good, but in terms of ASIC, as a corporate regulator they have no right to seek settlements.”
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 16 Nov 2018Government sets $51m to pursue misconductBy Eliot Hastie
- 16 Nov 2018The financial advisers most people don’t read aboutBy James Mitchell
- 16 Nov 2018Clients expect advisers to understand their situationBy Eliot Hastie
- 16 Nov 2018Retirees hit hardest by franking credit changes, says FSCBy Sarah Simpkins
- 16 Nov 2018Trust in advice more important than everBy Stephanie Aikins
- 15 Nov 2018We’ll lose advisers through FASEA but it’s necessaryBy Adrian Flores
- view all