Class actions and group proceedings are really the same thing. They are different ways of describing legal proceedings whereby one or a small number of representative plaintiffs can take legal action on behalf of all persons who have similar claims. The Banksia Class Action is a good example of such proceedings. All of the more than 16,000 depositors in Banksia Securities (the debenture holders) have essentially the same claims against the same defendants. The only differences between them are the amounts they have lost.
These answers endeavour to answer the questions which have been most frequently asked by Banksia depositors (debenture holders). The answers given below are therefore in very general terms. The answers are not given by way of, or in substitution for, legal, financial or any other sort of advice. They are not tailored in any way to any debenture holder’s individual circumstances. If you need legal, financial or other advice, it is strongly recommended that you speak to your solicitor, accountant or financial adviser.
Can I opt out?
Yes. A member of a class action can opt out of the class action at any time. You will be notified in due course of a more formal opt out procedure and documents will be sent to you to enable you to opt out, if you wish to do so. You are urged to think very carefully and to take independent legal advice before you decide to opt out.
Why would I opt out?
We cannot give you individual legal advice on opting out, but fundamentally the only reason to opt out of a class action is if you consider either that you have no basis for any claim against any of the defendants, or alternatively, if you consider that you have a different sort of claim against the defendants and you would prefer to pursue that claim by yourself, paying for the costs of your claim and assuming the risk of adverse costs orders in the event that you lost your claim. We strongly recommend that you do not opt out of any class action before you have taken legal advice from an expert.
Could I be liable for costs?
No. Represented class members cannot be made liable for the costs of a class action. Only the named plaintiff(s) can be liable for adverse costs orders. If the case is successful, the legal costs incurred in running the case will be recovered from the amount paid by the defendants. No member of the represented class will be asked to pay anything by way of legal costs out of their own pocket.
What will I get if we win?
If the case is successful (whether by court judgment or settlement), there will be an amount of money to be paid by the defendants (or some of them). It is not possible at this stage to estimate how much the amount of money may be. We expect that the amount recovered (less the costs of running the case and any fee payable to a litigation funder) will be shared pro-rata between all the members of the Banksia class action. In other words, all members of the class will likely receive the same number of cents in every dollar they have lost in the collapse of Banksia Securities Limited.
How long will the case take?
How long the case will take depends upon a number of variable factors which are presently unknown. It is therefore difficult to estimate how long it will take for the case to conclude. We expect that the case will go to a fully contested court hearing at a trial commencing on 12 February 2018. The trial will last for between 10 -12 weeks. There is then the possibility of an appeal, which might extend the time for resolution of the case to as much as 2 further years.
Is the case likely to go all the way to Court or to settle earlier?
The case will go to a contested trial commencing on 12 February 2018 and most likely to a judgment. We are preparing the case with the legal team on that assumption.
What will your legal fees be and who will pay them?
If the case is successful, then the professional costs of the proceeding (solicitors’ costs, barristers’ fees and the costs of expert witnesses, etc.) will be recovered from the total amount which is recovered from the defendants by judgment or settlement.
Is there a litigation funder involved in the case and what will their fee be?
Mr Laurence Bolitho, in his capacity as representative plaintiff and following receipt of independent legal advice, has agreed to appoint BSL Litigation Partners Limited (“BSLLP”) as the Banksia Class Action funder and to enter into a Litigation Funding Agreement with BSLLP on mutually acceptable terms and conditions. A Sample Litigation Funding Agreement on the same terms has been sent to all debenture holders. We are asking each group member of the Banksia Class Action to enter into the same Funding Agreement with BSLLP.
The Funding Agreement contemplates among other things that, subject to Court approval, BSLLP will be entitled to the recovery of the legal costs and disbursements which it has funded plus a success fee of a maximum 30% out of the net settlement or judgment proceeds, if the class action is successful. If the class action is unsuccessful then BSLLP will not be entitled to recover any money it has expended on the case.
BSLLP now pays for all legal costs plus disbursements (such as Counsels’ fees and witness expenses) and will pay any amounts which are ordered against Mr Bolitho by way of security for or payment of costs. Only Mr Bolitho can be made liable to pay or give security for costs, not any other member of the Banksia Class Action group.
How can I be sure that your legal fees are reasonable?
The legal fees which are charged (including all disbursements paid to barristers, witnesses etc.) are subject to a process known as taxation which is undertaken by an Associate Justice of the Supreme Court of Victoria whose job it is to ensure that the fees charged are reasonable and proper.
Who are you suing?
The plaintiffs are suing Banksia Securities Ltd and the trustee company which acted as the trustee for debentureholders of Banksia, The Trust Company (Nominees) Ltd.
Why are you suing them?
The case alleges a number of breaches of duty by each of the defendants, including statutory duties arising under the Corporations Act, and common law and equitable duties which are owed by persons in their positions to the depositors in Banksia.
What 3 things make you confident of winning?
- The Banksia receivers have concluded that the audited accounts of Banksia and therefore its prospectuses (which heavily relied on the audited accounts) were very seriously wrong.
- The trust company ought to have known that the audited accounts and the prospectuses of Banksia were very seriously wrong well before Banksia collapsed.
- The extent of the losses and the speed with which Banksia collapsed strongly suggest that there were serious failures of management and prudential oversight of Banksia by the defendants prior to their collapse.
How much are you claiming?
The plaintiffs are claiming all of the losses which will ultimately be suffered by the debenture holders of Banksia. At the moment those losses are estimated by the receivers to be approximately $120 million in total.
How much of these losses do you think you will recover if you win?
It is not possible to estimate how much will be recovered in the class action at the moment. We will update the information on this question when we know more about it, as the case proceeds.
How do you know that the defendants have any money?
The trustee company is a subsidiary of Perpetual Limited, an ASX listed public company. For these reasons, we are reasonably confident that the defendants have some money which can be recovered in proceedings of this nature.
Can there be more than one case like this?
No. Only one class action can be brought in respect of the particular causes of action against the defendants who have been sued in this case.
How do I contact you?
You can contact us by email at info(Replace this parenthesis with the @ sign)banksiaclassaction.com.au
Who should I go to for legal or financial advice?
You should speak to your solicitor or financial adviser for any particular legal, accounting or financial advice you may need.