Dismissal of Appeal against City Pacific directors – 25/09/2017

We are very pleased to announce that the Full Federal Court of Australia today made orders in favour of Trilogy Funds Management Limited, (the “Respondent” or “Trilogy”) as the Responsible Entity (“RE”) for the Pacific First Mortgage Fund (“PFMF”), dismissing the appeal brought by Mr Sullivan, Mr Swan and the late Mr Donaldson.

This is a very important victory for the Unitholders, and more generally, as the Court has set out some views on the behaviour and responsibilities of directors of RE’s.

The Full Court also said the following:-

Put simply, the appellants’ case theory missed the point of Trilogy’s case.  Equally, the complaint that the trial judge failed to engage with that case theory misses the point of his Honour’s conclusions.

Mr Sullivan’s difficulty, as the trial judge observed at [317] and following, was that he had sworn “emphatically” to a particular version of events, namely the events of 28 April 2006, by reference to documents that he signed but which he turned out to have signed months later.  The trial judge made a careful evaluation of Mr Sullivan’s credit (at [316] to [330]), ultimately finding that he was not an honest or reliable witness in relation to the key factual issues concerning the conduct of the AGA facility during 2006 and 2007.

The RE is mindful that there remains some duties for it to take steps to enforce the Courts’ judgments (plus interest) against Mr P Sullivan and Mr S McCormick ($37.2m),  Mr T Swan and the Estate of the late Mr I Donaldson ($6.25m).

In the meantime, now that the Appeal has been dismissed, Trilogy will prepare for making a distribution to Unitholders.  However, it must await the period of 28 days (to 23rd October 2017) during which any application for leave to appeal to the High Court can be made.

Details of any appeal, and the preparation for the distribution will be posted on the Trilogy website (www.balmaintrilogy.com.au) as soon as arrangements have been finalised.

For more information about this media release, please contact Trilogy Funds on 1800 230 099.