James Mawhinney to Appeal Court Decision

Managing Director of Mayfair 101 Group, James Mawhinney, has announced his intention to appeal a Federal Court assessment of the investment firm after the Australian Securities and Investments Commission today obtained a 15-year prohibition against him dealing in financial products.

Mr Mawhinney successfully defeated the majority of the accusations levelled at him in the retrial of ASIC’s flawed 2020 court action, including 57 out of 90 allegations of misleading or deceptive conduct. Despite the number of unsuccessful claims brought by the regulator, the court extended an injunction against Mr Mawhinney that had been in place for five years, by a further 15 years.

ASIC set out to prohibit Mr Mawhinney from operating in the financial services industry in circumstances where his business raised debt from wholesale clients to fund more than 20 private equity projects including a real estate development involving Dunk Island and 200 properties in Mission Beach, Queensland.

Bali Hai Caravan Park was one of the properties overlooking Dunk Island which Mayfair 101 acquired in 2019 in Mission Beach when the group commenced plans to redevelop the region.

In April of 2020, ASIC targeted the business amid the onset of the COVID-19 pandemic resulting in Mr Mawhinney receiving a 20-year ban from dealing in financial products. On appeal the Full Court found Mr Mawhinney was denied procedural fairness. The Full Court remitted the case to a new Federal Court judge giving ASIC the opportunity make a new case.

The final judgment – upon which today’s penalty orders are founded – determined that noteholders who subscribed to the group’s debt instruments were exposed to an “obvious and substantial risk of loss, which risk materialised, resulting in investors suffering heavy losses.”

Mr Mawhinney commented:

“I respectfully disagree with the court’s finding that Mayfair’s clients have suffered losses. Our clients made loans which we applied to acquiring underdeveloped real estate and various other assets. The debt obligations still exist and are recognised. We are rebuilding valuable assets to make our clients whole and will not rest until this is achieved. We will be appealing the court’s decision.”

Mr Mawhinney said prior to ASIC taking enforcement action, all Mayfair 101 clients were paid principal and interest on time and in full, no defaults had occurred, and all monies were deployed in accordance with the offer documents. Mr Mawhinney said he is grateful for the many noteholders who supported him by attending the recent trial and he remains committed to rebuilding so all clients can be made whole.

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