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Current status

We are pleased to advise that the parties have reached an in-principle settlement of the proceeding. Pursuant to section 33V of the Federal Court of Australia Act 1976 (Cth), the in-principle settlement is subject to Court approval.

Before the Court will approve the in-principle settlement, it must be satisfied that it is fair and reasonable and in the best interests of group members.

Justice Anderson has approved the form and content of a Notice explaining key elements of the in-principle settlement, including:

  1. the amount to be paid by the Respondents to resolve the claims of Group Members, including your personalised estimated share of the settlement sum;
  2. an explanation of why the proceeding has settled, including details as to the Respondents’ limited financial and insurance position and anticipated legal costs of continuing the proceeding;
  3. the process for seeking the Court’s approval of the in-principle settlement;
  4. the entitlement for Group Members to object to the in-principle settlement; and
  5. the entitlement for Group Members to attend the hearing for the application for approval of the in-principle settlement.

On 8 June 2022, Slater and Gordon distributed the Notice to all Group Members in the Proceeding.

The settlement approval hearing has been scheduled for 1 September 2022.

What is this class action about?

On 10 December 2020, Slater and Gordon issued the IPO Wealth Fund Class Action in the Federal Court of Australia.

Slater and Gordon is representing unit holders in the IPO Wealth Fund (the Fund) in a class action against Vasco Investment Managers Limited (the Trustee) and DH Flinders Pty Ltd (D H Flinders).

The Fund is an unregistered unit trust formerly associated with property investor James Mawhinney. Unit holders were notified in early 2020 that interest payments and redemptions from the Fund would be suspended after the Fund’s investment manager IPO Wealth Pty Ltd (the Investment Manager) failed to make repayments due to the Fund. The Honourable Justice Robson of the Supreme Court of Victoria ordered that the Fund be put into liquidation in September 2020.

The class action alleges, among other things, that the Trustee and/or D H Flinders misled investors in the marketing and promotion of the Fund. In particular, that misleading representations were made about the likely returns, investment strategy, risks associated with and sources of liquidity available to the Fund. The class action also alleges that key information was not disclosed to investors prior to making their investment. The Australian Securities and Investment Commission (ASIC) issued separate proceedings in relation to the marketing of similar financial products sold by entities related to the Fund.

Allegations

The class action alleges that:

  • the Trustee’s agent (the Investment Manager) engaged in misleading conduct in the making of representations and non-disclosure of matters within key documents issued to promote the Fund and the Trustee is liable for the conduct of its agent;
  • the Trustee engaged in misleading conduct in the making of representations and non-disclosure of matters within the information memoranda issued to investors;
  • D H Flinders is responsible for the conduct of its authorised representative, who was the Investment Manager, for the misleading conduct of the Investment Manager in the making of representations and non-disclosure of matters within key documents issued to promote the Fund; and
  • each of the Trustee and D H Flinders are liable to the Claimants for the loss and damage caused to each of them.

Frequently Asked Questions

If you held units in the Fund as at the commencement of the proceeding you may be eligible to participate in this proceeding and we encourage you to register.

Class actions in Australia are ‘opt out’, which means the Court assumes you want to be part of the class action unless you fill out an ‘opt out’ notice telling the Court that you do not wish to participate. Generally, the opt out notice must first be approved by the Court before it is sent to Group Members. The opt out period has now ended.

There are no out of pocket costs paid by you as a result of your participation or registration in the claim. This class action is being run on a No Win No Fee* basis. Slater and Gordon will pay all of the up-front costs of running the case and our fees and the disbursements will be paid at the end of the class action out of the funds available as part of a judgment or settlement in the event of a successful outcome. If the case is unsuccessful, Slater and Gordon will not charge you anything or seek to recover the funds it has spent on the case from you.

Generally, most class actions tend to take between one and three years to resolve, although each class action is different, and the time required for a claim depends on a variety of factors, such as the complexity of the issues involved, the amount of evidence to be considered, and the tactics adopted by the respondents in defending the claim.

If you have any enquiries, please phone 1800 071 827 or email IPOWealthFund@slatergordon.com.au and include your contact details.

Last updated 09th June 2022.