Federal court overturns ASIC case against Prime Trust directors

In an expensive rebuff for the corporate regulator, the Full Court of the Federal Court has overturned findings of liability and penalties against former federal health minister Michael Wooldridge and other directors of the collapsed investment company Prime Retirement and Aged Care Property Trust (Prime Trust).

The complex case centred not on the 2010 collapse itself but on the directors’ approval for the controversial payment of a $33 million listing fee to Prime’s founder Bill Lewski after the trust went public in 2007.

The five directors defending the case include Mr Lewski, Dr Wooldridge and Liberal Party stalwart and former Places Victoria chairman Peter Clarke, along with Mark Butler and Kim Jacques.

ASIC cross-appealed the disqualification and pecuniary penalties made against Mr Lewski, and the pecuniary penalty orders made against Dr Wooldridge, Mr Butler and Mr Jaques on the basis that they were manifestly inadequate. In light of the decision, the Full Court considered that it was unnecessary to make findings on ASIC’s cross-appeal.

Dr Wooldridge issued a statement acknowledging the impact of Prime’s collapse on its shareholders, and noting the legal battle had also taken a “serious toll” on himself and his family.

I am glad the decision by Mr Justice Murphy has been overturned; I always maintained his decision was unjust,” he said.

Mr Clarke said he was always confident that he had acted appropriately in his role as a director.

ASIC said it is reviewing the court’s decision and has no further comment at this time. You could find a copy of the Full Court’s decision here.

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