FEDERAL COURT OF AUSTRALIA
Pacific Current Group Limited v Fitzpatrick (No 2) [2025] FCA 1152
File number: VID 116 of 2020 Judgment of: BEACH J Date of judgment: 18 September 2025 Catchwords: CORPORATIONS — merger of assets between Australian company and US company — Australian and US funds management boutiques — creation of unit trust — whether proper due diligence carried out by directors of Australian company — nature of interest in the WHV dividend and appreciation rights agreement — whether proper due diligence carried out concerning the WHV agreement — breaches of s 180(1) of the Corporations Act 2001 (Cth) — further proceedings against the CEO — whether the CEO should be excused from liability — whether any case on causation or loss and damage made out — “no transaction” case of the applicant — whether proceeding should be dismissed as against the CEO — cross-claim for contribution against non-executive director — whether should be dismissed — orders made Legislation: Corporations Act 2001 (Cth) ss 180, 1317H, 1317S, 1318 Cases cited: Australian Securities and Investments Commission v Mariner Corporation Ltd (2015) 241 FCR 502
Banque Commerciale SA (In Liq) v Akhil Holdings Pty Ltd (1990) 169 CLR 279
Barnes v Forty Two International Pty Ltd (2014) 316 ALR 408
Dare v Pulham (1982) 148 CLR 658
Division: General Division Registry: Victoria National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 190 Date of last submissions: 5 September 2025 Date of hearing: 21 August 2025 Counsel for the Applicant: Ms R Doyle SC, Mr A Cameron and Mr P Annabell Solicitor for the Applicant: Keypoint Law Counsel for the 1st, 3rd, 4th, and 5th Respondents: Mr P Santamaria KC and Mr R Peters Solicitor for the 1st, 3rd, 4th, and 5th Respondents: Colin Biggers & Paisley Counsel for the 2nd Respondent: Mr C Caleo KC and Mr N Walter Solicitor for the 2nd Respondent: SBA Law Counsel for Pacific Current Group Limited (current management) Ms A Martyn Solicitor for Pacific Current Group Limited (current management) Herbert Smith Freehills ORDERS
VID 116 of 2020 BETWEEN: PACIFIC CURRENT GROUP LIMITED (ACN 006 708 792)
Applicant
AND: MICHAEL CLIFFORD FITZPATRICK
First Respondent
ANDREW STUART MCGILL
Second Respondent
PETER ROBERT KENNEDY (and others named in the Schedule)
Third Respondent
ORDER MADE BY:
BEACH J
DATE OF ORDER:
18 SEPTEMBER 2025
THE COURT ORDERS THAT:
1.The applicant’s proceeding against the second respondent be dismissed.
2.The applicant pay 80% of the second respondent’s costs of and incidental to this proceeding concerning the applicant’s claims against the second respondent.
3.The second respondent’s cross claim against the first respondent be dismissed with no order as to costs.
4.Order 3 of the orders made by Beach J on 18 December 2024 be vacated.
5.Any period stipulated under…
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- Case
- [2025] FCA 1152
- Decision Date
CaseChat Overview and Summary
The court examined the legal issues concerning the directors' obligations under section 180(1) of the Corporations Act 2001 (Cth) and assessed whether PAC had established a valid case against Mr. McGill. The court also deliberated on whether Mr. McGill should be excused from liability, considering the arguments presented. Additionally, the court evaluated PAC's claims related to causation, loss, and damage, and the validity of the "no transaction" case. The court further considered the cross-claim against Mr. Fitzpatrick and the appropriate legal outcomes. The court concluded that neither the first nor the second limb of PAC's claims could be satisfied and that the cross-claim against Mr. Fitzpatrick should be dismissed.
Consequently, the court made several orders to dismiss PAC's proceeding against Mr. McGill and the cross-claim against Mr. Fitzpatrick. PAC was ordered to pay 80% of Mr. McGill's costs of and incidental to the proceeding concerning PAC's claims against him. The court also vacated a previous order made by Beach J on 18 December 2024 and suspended any stipulated periods for filing and serving a notice of appeal from the orders. The court granted liberty to apply for further orders as necessary.
The final orders included dismissing PAC's proceeding against Mr. McGill, requiring PAC to pay 80% of Mr. McGill's costs, dismissing the cross-claim against Mr. Fitzpatrick with no order as to costs, vacating a previous order, and suspending the stipulated periods for appeal. The court also granted liberty to apply for further orders.
Orders
Orders of the court
1. The applicant’s proceeding against the second respondent be dismissed.
2. The applicant pay 80% of the second respondent’s costs of and incidental to this proceeding concerning the applicant’s claims against the second respondent.
3. The second respondent’s cross claim against the first respondent be dismissed with no order as to costs.
4. Order 3 of the orders made by Beach J on 18 December 2024 be vacated.
5. Any period stipulated under the Federal Court Rules 2011 (Cth) for the filing and service of any notice of appeal from orders 1 to 3 be suspended until further order.
6. Liberty to apply.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
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