Class action lawyers Slater and Gordon have issued proceedings against Australian Executor Trustees Limited (AET) on behalf of persons who held debentures issued by Provident Capital Limited (Provident) as at 29 June 2012.
Provident operated as a debenture issuer and mortgage lender between 1998 and 2012.
Provident was a non-bank lender, servicing borrowers who fell outside the lending criteria of Australia’s traditional financial institutions.
On 29 June 2012, the Federal Court of Australia made orders appointing receivers to Provident, as it was likely Provident would not able to pay sums owed to its debenture holders as and when they fell due.
The Slater and Gordon Class Action alleges that AET, the trustee for Provident’s debenture holders appointed under the Corporations Act 2001 (Cth), is liable to compensate group members for their losses because:
a) if AET had been reasonably diligent in monitoring Provident, consistent with its legal duties, it would have identified problems with Provident’s business conduct, its financial position and performance much earlier than mid-2012; and
b) if AET had done so, Provident debenture holders would either not have suffered loss, or would have suffered less loss.
On 1 December 2017, the Supreme Court of New South Wales made orders for group members to have the opportunity to opt out of the class action if they wished to do so.
Group members who were also members of another class action conducted by Meridian Lawyers also had the opportunity to choose between the two class actions.
On 16 February 2018, the opt out process concluded.
AET has joined other parties to the litigation as cross-defendants, including its insurers, its insurance broker, and Provident’s auditors at relevant times, HLB Mann Judd and PricewaterhouseCoopers.
AET claims that those other parties should have to contribute to any damages awarded to the plaintiffs and group members.
Some of those cross-defendants have yet to serve evidence in support of their cases, and the mediation has been rescheduled by the Court to occur on 22 and 23 May 2018 when that evidence will have been served, and parties will have had the opportunity to consider that evidence.
The trial of the matter remains scheduled to commence on 30 July 2018.
Documents relating to the Provident class action