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A win for wary investors

Investors should be encouraged by a recent Federal Court ruling in which Justice Susan Kiefel refused to reverse investors’ self-help actions after an investment scheme collapsed. The investors, Alan and Jillian Sing, ran their own family superannuation fund. In late 1997 and early 1998 they chose to invest a large part of their fund with Geoffrey Dexter, who traded in the eastern states as the Wattle Group. What Mr and Mrs Sing did not realise was that the Australian Securities Commission was investigating the Wattle Group, and that Mr Dexter was reputed in some quarters to be a convicted fraudster and former bankrupt. They became aware of this and demanded their money back, which they received shortly before Mr Dexter went into bank-ruptcy. Mr Dexter’s trustee in bankruptcy tried to claw back the repayment, on the basis that the Sings knew that Dexter was about to become insolvent. Justice Kiefel disagreed. She held that the Sings had withdrawn their investment shortly prior to Dexter becoming bankrupt, and that they had done so in good faith, motivated by an understandable desire to safeguard their retirement fund. Jocelyn Williams, Solicitor Phillips Fox

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