amp adviser

Hillross caught in Timbercorp crossfire
Parties move towards mediation

By Kate Kachor
Thu 11 Aug 2011
AMP-owned Hillross has defended claims made against one of its advisers over Timbercorp.




Hillross Financial Services has been caught in a legal stoush involving a client of one of its authorised representatives and a third-party accountant over lost investments in Timbercorp.

In March, De Poi Consulting managing director Sandra De Poi filed a suit against the AMP-owned group over claims that Prophecy Wealth Management (PWM) representative Christopher Limmer provided De Poi with "inappropriate" financial advice.

De Poi was seeking damages in regards to money lost in the 2005 Timbercorp Almonds project as well as for stress and anxiety, De Poi's statement of claim dated 9 March 2011 said.

She claims Limmer informed her at a meeting in March 2005 that after looking at her financial situation the project was "right" for her, the statement said.

De Poi alleged that during the Timbercorp meetings with Limmer, he did not make mention that investors, if they made the investment, would have to pay Timbercorp "more than $100,000 per annum over the next three years before tax and over $80,000 per annum over the next four years after tax (in addition to the initial investment)".

She claimed the advice given by Limmer was "not appropriate" because, among other reasons, Limmer did not inform her of any commission he would receive from the investment or identify or advise any lack of a capital value, lack of liquidity or advise on the risks associated with the investment.

As a result of the investment, De Poi claimed she was forced to sell an investment property and make other arrangements to manage the financial commitments to Timbercorp in regards to the investment contracts.

In the months following Timbercorp's collapse in April 2009, the almond project's land and associated rights were sold by the company liquidator with proceeds of the sale now in trust pending a court ruling.

Hillross has denied the bulk of the claims, with the advisory business claiming De Poi sought advice after informing Limmer and Hayes Knight accountant Nick Gurner that she had "difficulty in controlling her expenditure on personal items".

The company claims it was De Poi who expressed an interest in the managed investment scheme (MIS) sector, and "wanted to use a MIS as a mechanism by which the unsecured loan could be removed as a liability to the company".

Hillross asserts that De Poi was "contributorily negligent" in that she sought and obtained the opportunity to undo the investment in December 2005 but did not take that opportunity.

It claims that if it is liable to De Poi, then Hayes Knight "caused and/or contributed to them incurring that liability", the company's cross claim dated April 2011 said.

A court ruling last month in the South Australian Supreme Court ordered the dispute to be referred to a mediator with mediation to be held in October this year