Melissa Caddick victims reach multimillion-dollar settlement

Victims of Sydney conwoman Melissa Caddick have reached a $3.5 million settlement in a class action to claw back some of their lost money from a group of auditors.

Federal Court Justice Brigitte Markovic approved the settlement during a hearing in Sydney on Tuesday.

Sydney businesswoman Melissa Caddick stole from friends and family.

Law firm Mackay Chapman filed the Federal Court lawsuit in September 2023 against a group of auditors on behalf of Caddick’s victims.

Most victims invested with Caddick, a self-styled financial adviser who stole $23 million from clients, through their self-managed superannuation funds (SMSFs). Those funds were required to be audited annually.

“Over the eight years between 2012 and 2020, at least five auditors were engaged to conduct the mandatory annual audit of the SMSFs,” the firm said in a statement when the lawsuit was filed.

“The auditors all provided audit reports that, in effect, gave the SMSFs a clean bill of health.”

The lawsuit, which has now been settled with no admissions as to liability, alleged the auditors acted negligently and engaged in misleading or deceptive conduct, among other claims.

Andrew Harding, SC, acting for the 32 group members in the class action, told the court on Tuesday that the gross settlement sum was $3.54 million. After deductions, group members stood to receive about half that sum, or $1.77 million.

Markovic said she was “satisfied that I can make the orders”.

“I congratulate the parties on reaching a settlement which in my view is both fair and reasonable,” she said.

Caddick disappeared in November 2020, within hours of the Australian Federal Police executing warrants at her Dover Heights home on behalf of the Australian Securities and Investments Commission.

Her partial remains were found in February 2021 on a remote NSW South Coast beach.

Caddick’s friends and family believed she was investing their money or superannuation funds in shares.

Harding said that “in reality, on the applicants’ case, none of the purported investments existed, and the funds paid to Ms Caddick and [her company] Maliver for investing, or fees paid, were instead fraudulently diverted for Ms Caddick’s own use”.

In 2021, orders were made appointing liquidators to Maliver and receivers to Caddick’s assets. Out-of-pocket investors were expected to “receive around 39.4¢ in the dollar from the liquidation and receivership”, Harding said.

Mackay Chapman director Michael Chapman said investors who participated in the class action stood to receive an additional 11¢ in the dollar, recovering 50 per cent of their total investment.

“We welcome the settlement. We think it’s a great result. The judge found that it was fair and reasonable, and that’s the important consideration,” Chapman said.

He said the proceedings had been concluded within 18 months.

“One of the considerations for us was not just getting back the maximum amount of money in terms of compensation. It was also important to get … an efficient response. A lot of our clients are retirees, are elderly, are vulnerable. Justice needs to be efficient as well as fair.”

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