Pacific First Mortgage Fund claim against Philip Sullivan, Thomas Swan, Stephen McCormick & Ian Donaldson

Final Judgment

Maurice Blackburn is pleased to confirm that Trilogy Funds Management Limited’s claim against Messrs Sullivan, McCormick, Donaldson and Swan in the Federal Court was successful.  On Friday, 18 December 2015 Justice Wigney found in favour of the Fund and delivered his reasons for judgment following a long trial in the first half of 2014. 

His Honour said that:

“This claim involves a tale of a rapacious Gold Coast property developer with grandiose plans, a compliant and obliging valuer who lacked independence, and a responsible entity of a managed investment scheme [City Pacific Limited], the officers of which appeared unable or unwilling to say “no” to the developer, or to otherwise exercise appropriate care and diligence to ensure compliance with the scheme’s mandated policies and procedures.  In the end, the developer failed and the security property was found to be worth many millions of dollars less than both its supposed valuation and the outstanding loan. The scheme [Pacific First Mortgage Fund] and its members were left significantly out of pocket.” 

Read the judgment in full.

Read Maurice Blackburn's media statement.


On 4 March 2016 Justice Wigney entered judgment against Messrs Sullivan and McCormick for $62,947,486.86 plus costs and against Messrs Swan and Donaldson for $10,565,042.52 plus costs.


On 16 March 2016 Messrs Sullivan, Swan and Donaldson (the Appellants) lodged an appeal to the Full Court of the Federal Court of Australia.  An amended notice of appeal was subsequently lodged on 20 June 2016 and a further amended notice of appeal on 15 September 2016. 

Mr McCormick has not brought any appeal from the $62,947,486.86 judgment entered against him.

The Appellants appeal from the whole of the Judgment.  It is alleged in the amended appeal that Justice Wigney: erred in his findings as to the credit of the Appellants; erred in making adverse findings against the Appellants as to collusion and fraud; proceeded on fundamental misapprehensions of fact; failed to provide procedural fairness to the Appellants; failed to engage with the Appellants’ “case theory” (that they were deceived by Mr McCormick and ignorant as to his “fraud”); and that the trial miscarried.

Trilogy lodged a notice of contention on 12 July 2016, alleging if (contrary to the judge’s findings) Mr Sullivan did not know of the advances being made to AGA above the approved limit in the period April to August 2006, he failed to exercise reasonable care and diligence in failing to take steps to ascertain the position and to address it.

Following an application made by Trilogy, the Appellants have been ordered to pay security for Trilogy’s costs of the appeal.  Messrs Sullivan, Swan and Donaldson have since lodged $144,000 with the Court as security towards Trilogy’s costs.

The Full Court has required the Appellants to take all available steps to expedite the hearing of the appeal and to undertake not to dispose of their assets pending determination of the appeal.  Based on those undertakings, enforcement of the Judgment is stayed pending determination of the appeal.

The appeal has been specially fixed for hearing on 14, 15 and 16 November 2016 before the Full Court, comprising Justices Gilmour, Farrell and Gleeson.

Appeal hearing dates

The appeal has been specially fixed for hearing on 14, 15 and 16 November 2016 before the Full Court, comprising Chief Justice Allsop, Justice Farrell and Justice Gleeson.

Enforcement against Mr McCormick

Steps to enforce the Judgment debt against Mr McCormick have been taken since the Judgment was obtained. 

Further imformation

For further information, unit holders in the Pacific First Mortgage Fund should direct any enquiries they have to Balmain NB Corporation Limited, as sub-asset manager of the Fund, via telephone 1800 194 500 or email