Non-aligned dealer group WealthSure has won an appeal in the Federal Court, reducing the $1.7 million in damages owed to two former clients by more than 50 per cent.
In a judgment handed down on Friday, the licensee was named as the victorious party, successfully overturning a decision from June 2013 which found WealthSure, and its authorised representative David Bertram, had acted negligently in advising former clients Ronald and Janna Selig to invest in funds managed by the now-liquidated entities Norton Capital and Neovest Limited.
A three-judge bench of the Federal Court was convinced that Mr and Mrs Selig had engaged in “contributory negligence” to the losses they sustained, ordering the that the total damages be reduced by 15 per cent.
The former clients were accused on contributing to the negligence by maintaining a “profligate lifestyle and excessive living expenses” and well as making “reckless statements to financiers”.
In addition, the court ruled that the directors of Norton Capital and Neovest – entities described in the judgment as having run a “Ponzi” scheme – were also liable, apportioning the damages, which further reduced the amount owed by WealthSure.
Speaking to ifa, a spokesperson for Cosoff Cudmore Knox – WealthSure’s solicitor – said the decision reflects a “win” for WealthSure and Mr Bertram on the most substantive issue in the dispute.
“The judgment against them has been reduced by a little more than half which is due to the court deciding that contributory negligence did apply and that therefore the Seligs’ claim had to be reduced,” the spokesperson said.
The amount owed by WealthSure and Mr Bertram to Mr and Mrs Selig is now $875,506.80, while two of the former directors of Neovest and Norton Capital – Mark Norton and Peter Townley – have been ordered to pay $364,794.50 and $218,876.70 respectively.
WealthSure entered into an enforceable undertaking in late 2013, after shedding almost 100 of its authorised representatives that did not meet newly-implemented compliance standards.
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