On 1 July 2010 an application was filed by Levitt Robinson Solicitors in the Federal Court of Australia to commence the Storm-related class action proceedings against Commonwealth Bank of Australia Limited (“CBA”) and Colonial First State Investments Ltd ("CFS") (as Respondents) ("the Sherwood Proceedings").
The applicants in these proceedings are Leslie James Sherwood and Julianne Sherwood, and Sean Patrick June McArdle and Paula Joanne McArdle.
In September 2011 his Honour Justice Reeves made orders that the Sherwood Proceedings be case managed together with ASIC's UMIS Proceedings and the Richards Proceedings (the Storm-related class action proceedings against Macquarie Bank Limited), and that the trial of all three proceedings be heard by the Court at the same time in September 2012.
However, as a consequence of ASIC settling its UMIS Proceedings as against CBA (see link), his Honour Justice Reeves made a decision that the Sherwood Proceedings should be separated from the trial of the ASIC UMIS Proceedings and the Richards Proceedings.
As a result the trial of the Sherwood Proceedings commenced separately on 4 March 2013.
The Sherwood proceedings allege (among other things) that:
- an unregistered managed investment scheme was operated by Storm and CBA in contravention of s601ED(5) of the Corporations Act 2001 (Cth) and that CFS was involved in the contravention (or alternatively that Storm operated the scheme and CBA and CFS were involved in Storm's contravention of s601ED(5));
- CBA committed various breaches of contract;
- CBA engaged in unconscionable conduct; and
- CBA is liable as a "linked credit provider" pursuant to s73 of the Trade Practices Act for breaches of contract and misrepresentations by Storm.
You may benefit from the Sherwood proceedings if you are a group member and you have not accepted a settlement with the CBA previously (such as under the CBA resolution scheme, or the ASIC/CBA settlement). The definition of a group member is outlined in the originating application and in the Seventh Further Amended Statement of Claim, which provides as follows:
The group members to whom this proceeding relates ("Group members") are persons:
(a) who were clients of Storm; and
(b) who:(i) borrowed money from the CBA pursuant to CGI Margin Loans (as defined in paragraph 3(e) of the Seventh Further Amended Statement of Claim) entered into on or after 18 May 2007, or who increased their borrowings from CBA on or after 18 May 2007, pursuant to CGI Margin Loans entered into before 18 May 2007; and
(ii) invested the money borrowed in any one or more of the Investment Funds (as defined in paragraph 6 of the SeventhFurther Amended Statement of Claim);(c) had their investments caused to be redeemed or sold by CBA between in or about October 2008 and in or about December 2008; and
(d) have not duly agreed with CBA to settle the claims the subject of these proceedings.
The closing submissions by the parties were heard by Justice Reeves from 4 November 2013 to 13 November 2013.
On 13 November 2013, the trial concluded with Justice Reeves reserving his decision in the Sherwood Proceedings against CBA and CFS. The parties are now awaiting a judgment from the court.
20 May 2015
The hearing on 20 May 2015 before Justice Collier in the Federal Court in Brisbane related to the application for Court approval of the Settlement reached between the applicants (Leslie Sherwood and others) and the respondents, CBA and Colonial First State.
Various matters were raised by the parties; the most significant matters were as follows:
- The applicants advised the Court that no objections had been received from group members (including Excluded persons and nil offerees) in relation to the approval of the Settlement.
- Counsel for the applicants made submissions on Court approval of costs.
- The respondents sought approval of the application to amend the definition of group members.
- The respondent sought orders from the Court that as part of the Settlement, Settling Group Members must provide CBA with a signed release.
Judgment was reserved.
3 March 2015
The hearing on 3 March 2015 before Justice Collier in the Federal Court in Brisbane related to the process for approval of the Settlement reached between the applicants (Leslie Sherwood and others) and the respondent CBA.
The purpose of the hearing was to put in place the steps the parties and Group Members need to take before the approval hearing on 20 May 2015.
Various orders were made by the Court. The most significant orders were as follows:
a. On or before 10 March 2015, the applicants' solicitors Levitt Robinson, must publish the Notice of Proposed Settlement by:
- sending by ordinary post or by email a copy of the Notice of Proposed Settlement to each Group Member who has retained Levitt Robinson to act on their behalf in the proceeding;
- arranging for an advertisement to be published in the Australian, Townsville Bulletin and the Courier Mail in the week commencing 9 March 2015;
- making available to the public a copy of the Notice of Proposed Settlement on Levitt Robinson's website;
- sending a copy of the Notice of Proposed Settlement to the Storm Investor Consumer Action Group (SICAG) with a request that they distribute that document to their members.
b. On or before 10 March 2015, a copy of the Notice of Proposed Settlement, originating process, and the pleadings in the proceeding are to be made available on the Federal Court's website, and also to be made available for inspection by members of the public at the District Registry of the Federal Court in all capital cities.
c. On or before 17 March 2015, the CBA is to use its best endeavours to provide a copy of the Notice of Proposed Settlement to any Group Members who are not clients of Levitt Robinson.
d. By 29 April 2015, any Group Member (other than certain excluded parties within the meaning of the Deed of Settlement) who wishes to receive compensation in the Proposed Settlement must register for the Settlement by writing to Levitt Robinson and advising Levitt Robinson of their desire to participate in the Settlement.
e. On or before 7 May 2015, any person who wishes to support the Proposed Settlement may do so by filing a notice in the form of Annexure B to the Notice of Proposed Settlement with the Brisbane Registry of the Federal Court, with copy to be provided to Levitt Robinson.
f. On or before 7 May 2015, any person who wishes to oppose the Proposed Settlement may do so by filing a notice in the form of Annexure C to the Notice of Proposed Settlement with a written outline of their grounds for opposition and any affidavit evidence upon which they rely. That notice is to be filed in the Brisbane Registry of the Federal Court, with copy to be provided to Levitt Robinson.
g. The approval application is listed for hearing on 20 May 2015 in the Federal Court in Brisbane.