Claims against industry funds and adviser lifted to $14 million
Four industry super funds being sued by a director of a property manager working with the funds have had the claims against them increased and the list of defendants expanded to include an adviser to the funds.
The superannuation funds — Sunsuper, LUCRF, HESTA and Commonwealth Superannuation Corporation (as trustee for Military Super) — were investors in two funds managed by Ashington Property Group. Ashington retired as manager of the two property development funds in 2009, with related parties claiming the conditions of Ashington's retirement agreement were breached.
The plaintiff in the case, Mapeline Pty Ltd — of which Ashington founder Craig Anderson is a director — has had proceedings in the case amended to include Ray King and his company Sovereign Investment Research as a defendant in the case.
King, via Sovereign Investment Research, was an adviser to the super funds and his addition to the case comes as Mapeline increased its claim for damages to $14 million. This would include the value of Ashington's units in the funds at the time of $3.75 million, an unpaid wind-up fee of $2.5 million, ongoing operating costs of Ashington of $3.5 million, unpaid consultancy fees of $1.3 million and accumulated interest on amounts outstanding of $2.95 million.
Proceedings in the case began in the Supreme Court of NSW in November 2013, following the retirement of Ashington as manager of the two funds and its liquidation in 2011 after the loss of management of the development funds.
The four super funds have filed responses in the Supreme Court of NSW and raised the issue of whether Mr King had authority to act on their behalf.
If King and Sovereign are found not to have this authority, Mapeline claimed it would represent a breach of the warranty of authority and misleading and deceptive conduct. In this event Mapeline would seek loss and damage against King and/or Sovereign as well as the super funds.
AUTHOR
Jason Spits
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