ASIC heads to the High Court in latest Prime Trust twist – on ‘principle’

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The corporate watchdog has lodged a special leave to appeal application just a month after the Federal Court ruled against ASIC’s disqualification of the directors of the Prime Retirement and Aged Care Property Trust.

In its application, ASIC stated: “The full court’s decision affects every present and future managed investment scheme.”

They say the November decision was “inconsistent with the common law and equitable principles that have generally been applied in company law and trust law.”

“If the full court’s decision stands, those responsible for the extraction of that value will escape without sanction.”

Investors were also “likely to be prejudiced in their claims to recover their losses.”

The Federal Court had thrown out the case which alleged the directors had breached their duties because it had been filed one month after the six-year statute of limitations had lapsed.

Around 9,700 investors lost over $500M when Prime Trust went bust in 2010, though ASIC’s case centres on a controversial $33M listing fee paid to Prime’s founder Bill Lewski after the trust was listed in 2007.

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