MELBOURNE, AUSTRALIA: The Federal Court of Australia has ordered the Australian Securities and Investments Commission pay Mayfair 101 Managing Director James Mawhinney’s legal costs after a failed attempt by the regulator to make a new case against him.
The costs order follows Justice O’Callaghan’s decision last month to reject ASIC’s attempt at introducing new penalties directed at Mr Mawhinney which were previously not sought when the regulator first issued proceedings in August 2020.
The original ASIC-initiated proceeding VID524/2020 resulted in a 20-year ban of Mr Mawhinney dealing in financial products, however the decision was overturned on appeal by unanimous decision of the Full Bench, which also ordered the case be remitted to a new Federal Court judge. The Full Bench found Mr Mawhinney had been denied procedural fairness in a “mistaken” and “absurd” case presented by ASIC.
ASIC subsequently issued an amended concise statement to initiate the remitter trial and introduced fresh claims, including seeking to ban Mr Mawhinney as a company director, and pecuniary penalties, which were not previously sought. In the August 2023 hearing senior counsel for ASIC stated on at least seven occasions that ASIC had a mistaken view of the law which caused the original trial to miscarry.
ASIC’s attempt to change its original case was subsequently rejected last month by the Federal Court’s Justice O’Callaghan who found that the matter remitted related only to the question of whether a ban from dealing in financial products should be imposed. ASIC must now pay Mr Mawhinney’s costs in his successful application to confine the remitted case.
570 Australian lenders have been without principal and interest payments on their debt instruments after ASIC first targeted the group in early 2020. At the time, Mayfair 101 held over half a billion dollars’ worth of assets including over one hundred and thirty investment properties in Australia, principal and interest obligations were current, and no Mayfair 101 client had made a complaint to ASIC.
The recent court win for Mr Mawhinney is a significant step forward in his goal of ensuring all Mayfair 101 lenders are made whole.