A group of SMSFs has commenced legal action against an audit firm and the director of a private equity firm for investment losses they suffered following the collapse of an investment fund.
Audit firm faces legal action following fund collapse
A total of 23 plaintiffs are involved in the proceedings including the corporate trustees for six SMSFs and three family trustees and a unit trust, an individual SMSF trustee, six companies and six other individuals.
The plaintiffs are looking to claim damages on investments they lost from the collapse of an investment fund run by Vantage Holdings Group Pty Ltd, which left no funds.
The plaintiffs have commenced action to sue PA Audit Pty Ltd and Mark Anthony English, who were the auditors of the investment fund, for negligence and misleading and deceptive conduct under section 18 of the Australian Consumer Law.
The claims are primarily based on an audit report and valuation reports that were prepared by the auditors in 2014.
In their statement of claim, the plaintiffs stated that they relied upon the information in the documents prepared by the auditors. Eighteen of the plaintiffs claim they relied upon the information in the documents prepared by the auditors in their decision to invest in the fund.
The other plaintiffs who had already invested in the fund prior to the documents being prepared will seek to claim losses caused by the loss of the opportunity to “arrest the slide”.
The plaintiffs will also be making the same claims against Andrew Paul Donnelly, who was a director of the company managing the investment fund.
They will claim that Mr Donnelly, through representations and omissions, breached a duty of care owed to them and engaged in conduct which was misleading or deceptive, causing them to suffer loss.
PA Audit and Mr English plead various defences, including a defence of proportionate liability and name various concurrent wrongdoers, including Mr Donnelly.
They will plead that the 2013 audit report and the 2014 valuation reports were based on misleading information provided by the fund managers.