For what should be obvious reasons Dover’s approved product list never included trees. 

For some losing on trees was not so bad. The amount was not that big;  it was a lesson well learned: do not trust anyone with your money and if sounds too good to be true it probably was. They got over it, and were immunized for life against dodgy advisers. It may have been a blessing in disguise. It’s better to lose a little while young, than to lose a lot while old.

For others it was a financial wipe out. A road to ruin. Stress, distress, divorce and even bankruptcy. Some suicide. Sign in haste and repent in leisure. Deductions denied but loans confirmed, at penalty interest compounding for years, and now even decades.

Their anger remains. The financial pain is still there.

Some of the worst cases involved overseas trained doctors in their first few years in Australia. They naively trusted their accountants (and it was pretty much their accountants) when they said “this is what all doctors do in Australia”. Income tax was literally a foreign concept. So tax planning propriety was even more foreign. They did what they were told, and paid a heavy price.

But there is some good news.

In this case the Financial Ombudsman Service (FOS) found an accountant and a financial planner liable for more than $200,000 of losses on trees harking back to 2004. The doctor, originally from India, trusted his accountant, bought the trees and paid a very heavy price. $200,000 down the drain and, apparently, no way to get it back.

The trick was the six year limitation period. Most dispute resolution bodies start the clock the day the claimed negligent action or omission occurred. So if it occurred in 2004 it was out of time by 2010. But FOS has a different clock. The FOS clock starts on the day a reasonable client first realizes something is wrong. If this happens say six years after the original negligent action or omission that’s when the FOS clock stars. And that’s what happened here. The doctor proved he first became aware of the problem after 2010, and FOS agreed he was still inside his six year period.

So it was game on at FOS.

The client bears the burden of proof at FOS. The doctor was able to prove, on the balance of probabilities, that his accountant and financial planner failed to exercise the skill expected of a reasonable professional. To be frank this was not that hard. The facts spoke for themselves.

The next step was proving damages. That was not that hard either. The doctor’s 2004 cheque read “two hundred thousand dollars”. So that was that. Plus interest.

The final step was proving causation. This was a bit trickier because, in my view unbelievably, the financial planner argued there was no causation because, he said, the doctor would have bought the trees anyway. FOS did not believe the financial planner either.

There was a weak final argument about contributory negligence and the duty to mitigate. But this got nowhere. The doctor knew nothing about trees and tax, and that was that. He 100% relied on the skill and judgment of the financial planner. That’s what being a client is all about.

It’s a nice feeling telling a doctor he is getting a cheque for $200,000, plus interest.