Next Financial Limited (Next Financial) has been ordered to provide further defence documents as part of legal proceedings initiated by six investors seeking recovery of more than $800,000.
In court documents dated 15 March 2012, Western Australia district court judge Justice Barker approved only one of five requests against Next Financial at the time of the hearing, namely that the company be required to file "better particulars" of the defence filed in December last year.
The investors lodged legal action against Next Financial over the recovery of $828,148 in investments made with the company's Next Financial Instalments NF330 Series (NF330) between June and September 2009.
The investors allege that while they were told "at all material times" that the NF330 constituted a managed investment scheme (MIS) as defined under the Corporations Act 2001, they attest the scheme was not registered as a MIS.
They also claim the NF330 were not "warrants" as stated in the schemes' product disclosure statement (PDS) and questioned whether the underlying securities of all unit holders were to be "polled and used by [Next Financial] to obtain funding to perform its obligations, thus satisfying the requirements... of the definition of a 'managed investment scheme'".
The investors now seek further information as to whether any underlying securities were pooled, the details of the pooling, the purpose of the pooling and whether some underlying securities were pooled or not.
"The [investors] contend that [in sectors of Next Financial's] defence, [Next Financial] has raised the potential issue of the pooling of underlying securities without stating whether any were in fact pooled," documents said.
"And if so, which and how they were pooled and for what purposes they were pooled".
Next Financial has denied any liability, according to the documents.
