Australia’s largest financial planning group, Professional Investment Services (PIS) is trying to derail a $6.5 million class action by 60 former clients who invested in the failed Westpoint group.
In documents filed in the New South Wales Supreme Court on June 18, PIS lawyers Deacons sought an order to stop the litigation from proceeding in its current form.
The move is designed to prevent investors from pursuing the company as a group.
Lawyers for the investors, Slater and Gordon and the litigation’s funder IMF, say they are confident the action will fail in light of a recent Supreme Court decision involving Challenger Financial Services.
In May the fund manager failed in a bid to have the court throw out a multi-million dollar class action by investors who lost money in a Sydney property trust.
A precedent has been set in the Challenger case for the Westpoint action, IMF director Charlie Gallow said.
“Challenger tried to have the case stopped as a class action – essentially they failed,” Gallow said.
He said PIS is unlikely to succeed where Challenger did not.
“This is a defendant trying to do what they can to defend a case on technical grounds and not on its merits,” Gallow said.
If PIS are successful, the lead plaintiff in the case, Bruce Noel Jameson, and the group of investors would be forced to pursue PIS in separate claims.
The investors, who lost around $100,000 each – claim that PIS financial planners gave them inappropriate advice and made misleading statements about Westpoint and its Ann Street property in Brisbane.
They are seeking to recoup their losses and receive compensation for stress.
The class action began last September with 22 investors who lost around $2.2 million in the Ann Street scheme.
PIS was not available for comment.
The case is due back in court on July 17.
