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Wickham Securities Sandhurst Class Action

Wickham Securities Limited (in liquidation) was a Brisbane based company that raised funds from the public by issuing unsecured deposit notes to provide mezzanine loans to property developers.

A mezzanine loan is money that is lent after the first ranking mortgagee, such as a bank, will not loan further funds for a project. While the interest rates on the mezzanine loans were high, they were typically secured by a second ranking mortgage, increasing the risk of default. Wickham Securities went into liquidation in February 2013, with PPB Advisory appointed as liquidator. More than 300 self-funded retirees were left about $27 million out of pocket, many of whom lost their life savings.

The class action

In order to try and recoup the millions of dollars lost, in July this year Shine Lawyers’ clients and self-funded retirees, Graeme and Marion Clarke (the lead Plaintiffs) commenced a class action against Sandhurst Trustees Limited (Sandhurst) in the Federal Court of Australia on behalf of a group of people who held notes issued by Wickham Securities(the Group Members).

Sandhurst's alleged conduct

Under the Corporations Act 2001 (Cth) (the Act), Wickham Securities was required to appoint a trustee and enter into a trust deed before it could raise funds from the public. In June 2005, Wickham Securities appointed Sandhurst as the trustee for noteholders and entered into a Trust Deed with Sandhurst.

Sandhurst’s obligations as trustee under the Act and the Trust Deed, included exercising reasonable diligence to ascertain whether Wickham Securities had enough funds to repay amounts deposited by noteholders as they became due and to oversee compliance of the Trust Deed and the Act on behalf of Wickham Securities noteholders.

We believe that had Sandhurst exercised reasonable diligence in discharging its obligations as trustee, Sandhurst would have discovered Wickham Securities' breaches of the Trust Deed and the Act much earlier. This would have resulted in timely action and the noteholders would not have suffered any financial loss.

Further Information

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Common questions about Wickham Securities Sandhurst Class Action

You are eligible to join the class action as a group member if you directly or through your Self-Managed-Super-Fund (SMSF):

  1. held Notes issued by Wickham Securities as at 21 December 2012; and
  2. have suffered financial loss as a result.

If you are eligible, you can join the class action and become a group member by signing a client agreement with Shine Lawyers and a litigation funding agreement with Litman Holdings, the litigation funder. Please contact us to do so or to get further information about the action.

You are not eligible to join the class action if you invested in other Sherwin entities, such as Astor Funds or Reacroft but did not hold notes issued by Wickham Securities as at 21 December 2012.
In a class action, the plaintiffs are a group of people represented by a lead plaintiff. In this case, a group of Wickham Securities noteholders are being represented by the lead Plaintiffs, Mr Graeme and Mrs Marion Clarke.

As the claims of all the Group Members involve many common questions of fact and law, bringing a class action reduces the aggregate cost of litigation to a client by only addressing the common issues once at trial instead of multiple times.
If you have already become a Group Member by signing a funding agreement with Litman Holdings and a client agreement with Shine Lawyers, you do not need to do anything further at this point.

The lead Plaintiffs will continue to bring the class action on your behalf until the Court has determined all the common question between the Plaintiffs and the Group Members.
If you invested in notes issued by Wickham Securities through your SMSF, your SMSF may be the party to the action and not you as it was the entity that suffered financial loss.

For this reason, we recommend that you keep your SMSF open until we can be certain that closing down your SMSF will not adversely affect your entitlement to make a claim.
From time to time, you may receive notices from the liquidator, PPB Advisory, indicating an intention to declare a dividend and to submit a proof of debt.

We recommend that you do this and that you contact PPB Advisory directly if you require any assistance in completing the form. While the payment of the dividend will reduce the claim against Sandhurst, this is very minimal and will not adversely affect the claim against Sandhurst.
We believe we have a strong team and a strong case but it is not possible to predict the outcome of litigation or how long it will take. Litigation is inherently risky but we believe the chance of success is worth the risk.
Shine Lawyers are running the class action on a No Win No Fee basis. This means that Group Members will have no liability for legal costs if the class action is unsuccessful. Litman Holdings, the litigation funder, has agreed to pay some of the legal and other costs associated with the class action, including any adverse costs order under the funding agreement.

Shine Lawyers has agreed to await payment of part of the legal and other costs until the successful outcome of the action. If the class action is successful and a judgment of damages is awarded to the Group Members, then the costs and fees will be deducted from the amount of damages to be distributed to the Group Members.
It is not possible to give any indication at this stage as to how much you can expect to receive from the successful outcome of the class action.

It is of course in everyone’s interest to progress the claim in a way that ensures the greatest return to the investors who lost so much in the collapse of Wickham Securities.
The lawyers running this action at Shine Lawyers are led by Jan Saddler, a solicitor with more than 25 years’ experience in Australia and England in running large and complex legal disputes.

Jan has worked for one of the largest commercial law firms in Australia, where she was involved in a number of class actions and multi-party disputes. She has also worked at one of the largest global professional services firms, as an in-house lawyer running and managing disputes involving claims worth more than $250 million.

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