News

HopgoodGanim successful in Opes Prime compensation claim

13 December 2010

HopgoodGanim has acted for Samuel Holdings in a successful claim against the National Guarantee Fund following the collapse of Opes Prime.

The fund had previously rejected all claims for compensation by Opes Prime clients who lost money and/or shares after the firm's collapse in 2008.

However, Queensland Supreme Court Chief Justice Paul de Jersey last week ordered the Securities Exchange Guarantee Corporation, which oversees the fund, to pay $46,998 compensation, plus interest and costs, to Samuel Holdings.

The company had transferred almost $75,000 to Opes Prime as collateral for an anticipated share purchase transaction in early 2008, but the transaction did not proceed and the money remained with Opes Prime when it collapsed just a week later.

The order for $46,998 represents the difference between the $74,600 that Samuel Holdings transferred to Opes Prime, and $27,602 the company received in distributions from Opes Prime's liquidators.

According to Hopgoodganim Litigation and Dispute Resolution Partner Liam Prescott, this decision sheds some light on the interpretation of the Corporations Act provisions related to investor claims made on the National Guarantee Fund.

"The Court found that the money was impressed with a statutory trust, essentially because of the existence of a financial product and because the money was paid in connection with a financial service. The existence of that statutory trust was the basis for the claim against the fund being found to be valid.

"This claim involved a complex area of the law and the facts were made equally complex by the relevant terms of the Securities Lending and Borrowing Agreement that defined the parties' legal relationship. The decision reflects the specific factual circumstances of this case, but it should also provide some general guidance as to the operation of the statutory provisions that regulate claims against the fund."

Contact:
Esther Cohen, Senior Communications Advisor
Tel: 07 3024 0192