An eight-year battle fought by a group of investors who fell foul of highly adventurous - one could say poor - investment advice provided by three representatives of an advisory firm, Financial Wisdom Limited, was settled recently, with orders made in their favour.
The amount of damages to be paid is still to be determined.
The judgement, handed down in the Supreme Court of Victoria, gives detailed accounts of how the investors - mostly retirees and some high-income-earning professionals, including a few Ansett captains - sought to have their savings or retirement lump sums invested to provide a comfortable retirement. Instead they were put into a raft of dud investments.
These included film funds, some of which were for films that were never finished, entertainment promotions, some of which failed to go ahead, book publishing partnerships, timber investments, video documentary partnerships, superannuation schemes, ostrich breeding and some property developments. All appeared to be tax-driven.
Forty-nine victims of these schemes pooled their resources to sue the three advisers who gave them advice and who were authority holders of Financial Wisdom Ltd.
The plaintiffs in this case have gone through the process of shelling out legal funds for years to fight for compensation. They wondered if they would ever recoup those funds, let alone their lost investments, but they stuck it out.
Their persistence has paid off in this judgement - although Financial Wisdom has indicated that it is considering appealing the decision, which means more legal fees for investors, another legal process to see through and another wait to see if the primary judge's decision is upheld.
What has worked in the victims' favour was the banks' rush into wealth management. Financial Wisdom was bought by Colonial, which itself was bought by Commonwealth Bank four years ago.
There were deep pockets left at the end to pay damages and legal expenses (if the decision is upheld on appeal.
Nevertheless, this group of investors have more hope of getting damages than many other investors who have fallen victim to bad investment advice.
In most cases the investment adviser being sued files for bankruptcy, or goes broke, and there is no one worth suing. If clients of bankrupt investment advisers get judgement in their favour it is often a pyrrhic victory, because there are no assets to satisfy the court order.
Reading through the judgement, it appears that the three financial advisers who represented Financial Wisdom targeted what they described in their brochure as "high net wealth individuals". The brochure offered a fully-integrated financial services facility to clients, applying knowledge and creative applications to their financial needs.
That reference to "creative applications" should have sounded loud alarm bells, but we have to remember that wild tax-driven schemes were all the go in the 1990s.
The films offered to provide investors with 150 per cent tax deductions and featured strongly in the investment portfolios drawn up. They looked good on paper, but no matter how big the tax deduction, such investments are useless if they fail to make any money.
It's even worse if the money disappears down a black hole.
Not only was one film in which the investors put their money, The Lucky Country, never completed and returned no income for investors, but in November 1996 the Tax Office disallowed any tax deductions claimed by the investors, including borrowing expenses.
One investor, Roger Duncan, a retired airline pilot who had been introduced to his financial adviser by another pilot, told the court he did not want to end up with high-risk investments.
Nevertheless, he borrowed $145,000 and invested it in the Lucky Film fund, receiving a tax refund of $62,000. Three years later,
in 1996, the tax office disallowed his deduction because the film fund had been wound up. As a result he had to repay the tax as well as penalties.
That wasn't all. He had also been put into the Bearfire Film fund, the Bolshoi Ballet scheme, an ostrich breeding scheme, a cabaret scheme and a book publishing partnership. Hardly a balanced portfolio. His dreams of a comfortable retirement were fading fast.
The judge who heard the case observed that Duncan's willingness to engage an organisation which was prepared to put forward these "preposterous propositions" is indicative of his gullibility, naivete and, perhaps, desperation.
The pattern of advice and investment schemes other victims ended up in showed a similar pattern.
A spokesman for Commonwealth Bank, now the ultimate owner of Financial Wisdom, said the advisory group was not found negligent in any way but the liability of the representatives who sold the schemes was attributed to Financial Wisdom under a statutory provision.
The bank also pointed out that the events occurred well before the bank acquired Financial Wisdom.
