This article is from the Australian Property Journal archive
THE corporate regulator has been dealt a legal blow against the former directors of Prime Trust after the Full Federal Court threw out its case.
Yesterday’s decision comes after the court in July last year overturned the bans imposed on Prime Trust’s directors by the trial judge in December 2014.
APCHL was the responsible entity of the Prime Retirement and Aged Care Property Trust (Prime Trust), a managed investment scheme which owned retirement villages in Queensland, New South Wales and Victoria. APCHL collapsed in 2010 owing 9,700 investors approximately $550 million.
Yesterday the court set aside the declarations of contravention and orders made by the trial judge against the directors and APCHL.
As a result of the Full Court’s judgment, penalties and disqualification orders previously ordered against the five former directors, Bill Lewski, Mark Butler, Kim Jaques, Peter Clarke and former health minister Michael Wooldridge have been set aside.
ASIC took legal action against the five directors after an investigation into the directors’ role in amending Prime Trust’s constitution during a meeting, so a $33 million fee could be paid to the trust’s founder and one of its directors, Bill Lewski.
The court found that there was only one matter for consideration by the directors at the 22 August 2006 meeting, being whether to lodge the amended constitution.
As such, the court found there was no obligation on the directors at the 22 August 2006 meeting to turn their minds to whether or not the proposed amendments to the constitution were lawful or proper.
The latest judgment will likely close the door on APCHL’s receivers civil proceedings in the Supreme Court of Victoria to recover the $33 million fee.
The civil case was adjourned pending the conclusion of the exoneration and penalty phase of the ASIC proceedings.
ASIC said it is considering the judgment.
Australian Property Journal
