Federal Court delivers judgment in Prime Trust appeals

The Australian Securities and Investments Commission (ASIC) noted that the Full Federal Court of Australia has made final orders allowing the appeals of the former directors of Australian Property Custodian Holdings Ltd (APCHL), the responsible entity of The Prime Retirement and Aged Care Property Trust (Prime Trust) and setting 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 (William Lewski, Mark Butler, Kim Jaques, Peter Clarke and Dr Michael Wooldridge), stayed by order of the Full Court made 15 August 2016, have been set aside.

The conduct in this case focused on a board resolution passed on 22 August 2006 to lodge an amended constitution with ASIC, which the board had previously (on 19 July 2006) resolved, without member approval, to amend to allow fees to be paid to APCHL.

By their reasons for judgment delivered 14 July 2016, the Full 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, it 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 Full Court's reasons delivered today affirmed that approach.

Findlaw

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