A trial is set to kick off at the end of July in two class actions brought on behalf of holders of debentures who allege they suffered losses due to Australian Executor Trustees’ mismanagement of debenture issuer Provident Capital.
A twelve-week trial has been scheduled for July 30 in the New South Wales Supreme Court, more than three-and-a-half years after the first class action was filed.
Class members are seeking to recover loss and damage they suffered when Provident Capital collapsed.
Receivers for Provident, which entered voluntary administration in September 18, 2012, estimated debenture holders would get a return of between 17 and 19 cents in the dollars.
Two class action have been brought over Provident’s collapse, one an open class action by Slater & Gordon on behalf of all individuals who held debentures on September 18, 2012, and one by Meridian Lawyers on behalf of a closed class of individuals who held Provident debentures on June 29, 2012 and who signed a funding agreement with Litman Holdings Pty Ltd.
The class actions allege AET breached its duties as trustee of Provident and that it was responsible for losses suffered by class members.
The Slater & Gordon-led class action says AET should have known by December 1, 2008, or in the alternative, December 1, 2010, that Provident’s assets were insufficient to repay the debentures when they became due.
If AET had exercised reasonable due diligence and made inquiries into Provident’s assets and finances then debentures would not have been issued on or after December 22, 2008, or in the alternative December 22, 2010, the class members would not have suffered loss or damage, the class action claims.
Slater & Gordon has funded the class action on a no win, no fee basis without backing from a litigation funder. If it succeeds at trial, the firm stands to recover a 25 percent premium on its fees and costs.
The Meridian Lawyers-led class action claims if AET had complied with its duties, it would have known Provident had breached the debenture trust deed and would have taken steps to ensure a receiver was appointed by December 31, 2007, which would have spared class members any loss.
In a February 2016 decision, Justice Michael Ball ordered that the two cases be heard together and gave class members the choice of which case to join, saying it was not up to the court to decide.
“It may be accepted that the debenture holders are unsophisticated litigators. But there is no evidence before the court to suggest that they would be incapable of making a choice between the two proceedings if presented with material to assist them in doing so,” the judge said.
AET has denied that it breached its duties as trustee for Provident and that its actions caused class members to suffer harm. It has dragged its insurers, its insurance broker, and Provident’s auditors HLB Mann Judd and PricewaterhouseCoopers into the litigation, saying they should have to contribute to any damages it may be hit with.
Latest posts by Cat Fredenburgh (see all)
- Provident receivers may face objections over PwC merger - July 16, 2018
- Kraft loses bid for Bega docs as trial date looms - July 13, 2018
- Arnold Bloch to defend Kogan against ‘catch’ AdWords claims - July 13, 2018