THE Queensland Court of Appeal has unanimously dismissed an appeal by the Securities Exchange Guarantee Corporation arising out of the collapse of Opes Prime in 2008.
Law firm HopgoodGanim acted for Samuel Holdings last year in its successful claim for compensation against the Securities Exchange Guarantee Fund, which had previously rejected all claims for compensation by Opes Prime clients who lost money or shares after Opes Prime’s collapse.
This decision has been affirmed on appeal, with Justice Chesterman extending the grounds for allowing the claim by finding that under the relevant legislation, the money deposited into Opes Prime's account had been held 'on behalf of' Samuel Holdings.
HopgoodGanim litigation and dispute resolution partner Liam Prescott said today the Court of Appeal's decision indicates the approach the Fund should take when assessing claims for compensation generally.
"When a claim is made against the Fund but rejected, the claimant's ultimate right of appeal is limited to Federal or Supreme Court proceedings, regardless of the amount of compensation involved.
“This is obviously a strong deterrent for most people. They have already lost money and would need to spend a potentially disproportionate sum on legal fees - and be exposed to an adverse costs order - to pursue an appeal. This makes the Fund's approach to claims for compensation all the more important to get right.
“Given that the compensation involved in this case was less than $50,000, the fact that the Fund chose to appeal the decision reflects its importance as a test case.
“The terms of this judgment make it clear that the Fund needs to take a broad approach to both how it judges the circumstances in which a valid claim can be made, and to its interpretation of the applicable legislation.
“Whether the Fund will now seek leave to the High Court remains to be seen," Prescott said.
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