Allegedly losing $1.256 million of capital by 2012, the MacDonald trustees launched High Court action against Somerset Smith Partners the following year, claiming damages for their losses plus interest and costs.
The trustees alleged it was not until January 2012, when they consulted another adviser, that they discovered their investment had been considerably riskier than the conservative level they had told Somerset Smith Partners they were willing to accept.
One of the disputes in the case appears to be over the trust's investment requirements and what was discussed at an initial meeting with Somerset Smith Partners before the portfolio was set up.
The MacDonald trustees claimed the firm breached its contract and was negligent in constructing the portfolio.
They also claimed Somerset Smith Partners failed to properly carry out portfolio reviews and take appropriate steps to respond to market conditions.
The plaintiffs also claimed the firm was negligent in carrying out those portfolio reviews.
Lastly, the trustees alleged Somerset Smith Partners breached the Consumer Guarantees Act and said the investment portfolio recommended and created by the defendants did not have the features they required.
A chartered accountant, who provided evidence for the trustees at a hearing in February, said it was difficult to believe that any reasonably competent financial adviser could have thought the portfolio met the trustees' requirements.
Lastly, the trustees alleged Somerset Smith Partners breaches the Consumer Guarantees Act and said the investment portfolio recommended and created by the defendants did not have the features they required.
A chartered accountant, who provided evidence for the trustees at a hearing in February, said the portfolio was "at the high end of the risk spectrum".
In his view, the deficiencies in the portfolio were so manifest that it was difficult to believe that any reasonably competent financial adviser could have thought the portfolio met the trustees' requirements.
Somerset Smith Partners, which denies liability and is defending the claim, did not provide any evidence specifically replying to this at the hearing, where it applied to have parts of trustees' case thrown out.
The firm argued these parts the claim were barred because the action was filed more than six years after the alleged breaches or damage took place.
As such, it argued the parts of the action that related to events prior to July 2007 should be struck out.
The trustees, in response, said that they should have the opportunity to argue the matter at trial.
In the alternative, they argued the time limitation did not apply because the firm had breached an ongoing duty to disclose the real nature of the investments.
But Associate Judge Warwick Smith sided with the Somerset Smith Partners and earlier this month struck out part of the claim about the creation of the portfolio or any alleged breaches prior to July 2007.
Claims for alleged negligence or breaches of contract after this date remain live.