11 December 2017

Settlement: The Plaintiff has entered into a settlement of his claims made against the trustee in the Banksia Group Proceeding. The Plaintiff’s claim against the trustee was to recover a sum in excess of $200 million (inclusive of interest from 24 December 2012).  The settlement will only take effect if it is approved by the Supreme Court of Victoria.

As well as settling the Plaintiff’s claim in the Banksia Group Proceeding, Banksia’s own claims against the trustee brought in a separate proceeding (“Liquidators’ proceeding”) will be settled as part of the settlement. Banksia’s claim against the trustee is for approximately $170 million.  The loss claimed by Banksia overlaps with the Plaintiff’s claim in the Banksia Group Proceeding.  The law prevents debenture holders recovering more than the total amount of their loss.

To settle the claims made in both the Banksia Group Proceeding and the Liquidators’ proceeding, the trustee will:

  • pay $64 million;
  • release Banksia from an existing claim for $3.96m for additional remuneration in respect of additional work performed by the trustee in a period of 16 months from 25 October 2012 to February 2014; and
  • release Banksia from any further claims for remuneration (as yet unquantified).

Settlement approval: The Court hearing of the Plaintiff’s application for the approval of the settlement has been listed for 30 January 2018 before the Honourable Justice Croft of the Supreme Court of Victoria.

Notice to group members: The notice to group members represented in the Banksia Group Proceeding approved by the Honourable Justice Croft at a hearing on 8 December 2017 is available for download here: DOWNLOAD NOTICE TO GROUP MEMBERS.  The notice to group members provides more details about the settlement.  If you wish to oppose the settlement, the notice to group members provides details of the steps you must take by 4pm on 19 January 2018.

Deed of settlement: Subject to their agreeing to keep its contents confidential, group members represented in the Banksia Group Proceeding are entitled to inspect the deed of settlement.  The deed is available for inspection during business hours at the offices of the Plaintiff’s solicitors, Portfolio Law at Level 3, 362 Little Collins Street, Melbourne VIC 3000.

Claims against Banksia: The Plaintiff has not settled his claims made against Banksia itself.  However, the prospect of any recovery from Banksia is uncertain as Banksia has been placed into liquidation and orders were made by the Supreme Court of Victoria on 1 May 2015 that the Plaintiff had leave to proceed against Banksia “provided that it shall not enforce judgment without leave of the Court”.

Banksia is pursuing claims against its insurance broker and insurers and Banksia is hopeful of recovery in those actions (insurance claims).  The Liquidators (acting as Special Purpose Receivers) hold approximately $14 million.  While some of those funds will be used to meet the costs of running the insurance claims and in conducting the liquidation, the remainder supplemented by any sum awarded in the event of success in the insurance claims is expected to be available for distribution upon the conclusion of the insurance claims.  The Plaintiff continues to claim an entitlement to all surplus money available from the Liquidators / Special Purpose Receivers, and is hopeful of facilitating a further distribution to debenture holders in due course.  Based on the Plaintiff’s understanding, such a distribution is expected to be in excess of a further 2 cents for each dollar of debentures.  Further updates concerning the claims made against Banksia will be made via this website.

Trial: As a consequence of the Plaintiff entering into the settlement with the trustee, the trial of the Banksia Group Proceeding which had been scheduled to commence on 12 February 2018 has been vacated by the Supreme Court of Victoria.  If the settlement is not approved, new dates for the trial of the Plaintiff’s claims will need to be set down by the Court.