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.


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

The Appellants 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 contested the appeal and also 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 were ordered to pay security for Trilogy’s costs of the appeal.  Messrs Sullivan, Swan and Donaldson have since lodged security with the Court for part of Trilogy’s costs of the appeal.

The appeal was heard on 14 – 16 November 2016 before the Full Court, comprising Chief Justice Allsop, Justice Farrell and Justice Gleeson. The Full Court has reserved its decision.

Enforcement against Mr McCormick

Steps to enforce the Judgment debt against Mr McCormick have been taken since the Judgment was obtained. A bankruptcy notice was served on Mr McCormick on 26 July 2016 seeking payment in excess of $63m comprising the judgment debt with interest.  An application was filed in the High Court of New Zealand on 25 August 2016 to have Mr McCormick declared bankrupt following his failure to comply with the notice.  The application was adjourned on 15 December 2016, pending the outcome of the appeal.  

Further information

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