Financial planners win damages in IOOF case
Three Victorian financial planners have been awarded $800,000 in damages against IOOF in a court case over the sale of the company’s building society to Bendigo Bank in 1999.
The damages are considerably less than the $4.04 million the two planners originally claimed for the loss of access to clients of the Mildura and Frankston building society branches that were subsequently sold.
The planners — Warwick Hawksworth, through his company Foxeden, and Kenneth and Janet Taylor — claimed they should have been given 12 months notice as part of the sale, to enable them to access clients of the branches to offer financial planning services.
IOOF chief executive officer Ron Dewhurst said the company is considering an appeal on both the liability and the damages.
The original Foxeden claim was for $149,441 of unpaid commissions, $1.7 million for the value of the business and $433,799 for the ability to recoup trading losses while running the Mildura branch. This last figure was subsequently revised down to $131,013.
After a number of revisions, Foxeden finally submitted a claim to the Victorian Supreme Court of $2,849,250.
The Taylors’ original claim was $108,800 for the loss of anticipated commission from clients of the Frankston branch and $1.55 million for the loss of the value of the business.
Again, after various revisions, the Taylors’ final claim against IOOF was $2.19 million.
In his judgement, Justice Habersberger said the planners’ right to damages “was not unreasonable”.
The damages were assessed as $98,915 for the anticipated building society commissions, less savings in expenses of $56,250, plus $385,320 for the lost chance to earn further financial planning income from the branch clients.
The total damages awarded to Foxeden were $427,985.
Justice Habersberger awarded the Taylors’ $62,675 for anticipated building society commissions less $50,000 of savings in expenses, plus $392,425 for the chance to earn further financial planning income from clients.
The total damages awarded to the Taylors was $405,100.
The awarding of costs of the action will be determined by Justice Habersberger and will be settled at a later date, but is expected to run into millions of dollars.
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