This article is from the Australian Property Journal archive
TRILOGY Funds Management’s is a step closer in its bid to recover $70 million from the failed City Pacific following a long running legal battle.
Yesterday the full bench of the Federal Court unanimously threw out an appeal by City Pacific’s former CEO Phil Sullivan and its directors against a 2015 judgement.
Trilogy filed the claim against City Pacific and its former directors in April 2012.
The original 2015 judgment handed down by Justice Wigney found four former Credit Committee members, Philip Sullivan, Stephen McCormick, Ian Donaldson and Thomas Swan, liable for millions of dollars in losses resulting from the Fund’s disastrous loans to former development tycoon Craig Gore’s group of companies on the ‘Seven Mountains’ properties known as Saddleback, on the Gold Coast hinterland.
Maurice Blackburn principal Jason Geisker said the original 2015 judgment handed down by Justice Wigney found four former directors Phil Sullivan, Stephen McCormick, Ian Donaldson and Thomas Swan, liable for millions of dollars in losses resulting from the fund’s disastrous loans to former development tycoon Craig Gore’s group of companies on the ‘Seven Mountains’ properties known as Saddleback, on the Gold Coast hinterland.
“Almost two years after a damning judgment against former, City Pacific Ltd CEO, Phil Sullivan and his senior lieutenants who oversaw the failed Gold Coast-based, City Pacific Mortgage Fund, Sullivan’s appeal against the Federal Court decision has been unanimously thrown out.
“In rejecting the appeal, today’s judgment notes the trial Judge formed a very negative view of Sullivan saying…that he was “a most unsatisfactory and unimpressive witness”… His Honour described Sullivan as “trenchant and emphatic and often belligerent”,” he added.
“During its life the fund loaned hundreds of millions of dollars of investor money to developers like Gore, primarily for property developments, mostly based on the Gold Coast.
“Many of the 11,000-odd investors in the fund are elderly retirees who have been victims of this wrongful conduct the credit committee has been found guilty of, with many investors completely reliant on these investments for their retirement income,”
“The successful claim alleged that lending decisions approved by Sullivan and his senior credit committee team were not in the best interests of the fund, failed to follow the fund’s own lending criteria and were in breach of the Corporations Act and the fund’s own constitution,”
Geisker said investors wanted a judgment in this case, and they received one that excoriated the behaviour of those in charge in the strongest possible way.
“They have won this litigation at every step and it’s now time for those responsible to compensate investors.
“Trilogy Funds Management Ltd, which brought the case as the responsible entity of the Pacific First Mortgage Fund, now has the right to $70 million, which it will be seeking to recover from Sullivan and the other unsuccessful defendants,” Geisker said.
Australian Property Journal
