Seqwater’s appeal victory causes shares in litigation funder Omni Bridgeway to fall
Link copied to
Shares in litigation funder Omni Bridgeway (ASX:OBL) fell this morning, after a judgement it had won in 2019 against Queensland dam manager Seqwater got overturned.
In 2019, the New South Wales Supreme Court ruled Seqwater bore 50% of the liability for flood compensation claims stemming from the Queensland floods in early 2011 – with the remaining 50% shared between the Queensland government and Sunwater.
The case was fought in New South Wales because Queensland law did not provide for compensation class actions at the time. It found authorities negligibly managed Wivenhoe Dam in not making substantial releases before the heaviest of the forecast rain.
But Seqwater appealed the decision and yesterday the NSW Court of Appeal ruled in its favour.
While a further appeal to the High Court has been flagged as a possibility, Omni Bridgeway shares dropped in morning trade.
Today, Omni Bridgeway said it had received $30.3 million in cash with another $65 million not received but expected to be. It said a decision will be taken about what impairments may be necessary.
However it stressed that the case amounted to just 4% of the company’s litigation assessments and although it was understood that Seqwater’s costs would need be paid for, the court had not yet determined the level.
CEO Andrew Saker nonetheless said the outcome was far from ideal.
“This is a disappointing development in a highly complex case that has been in litigation for the better part of a decade and we will carefully consider the avenues for appeal to the High Court,” he said.
“Unfortunately, for all involved, the case against Seqwater may be far from resolved. Importantly this decision has no impact on the settlement that has been agreed with the State and Sunwater, and the distribution process to group members will proceed in parallel with any High Court consideration.”
Shares in OBL fell by 8%, representing a decrease in market capitalisation of over $90 million.