MELBOURNE: AUSTRALIA The Australian Securities and Investments Commission has abandoned reliance on key evidence and witnesses from the re-running of a historic Federal Court proceeding, at a preliminary hearing in Melbourne today.
The expert report by Jason Tracy of Deloitte which was relied on to obtain a $30 million penalty against Mayfair 101 and ban James Mawhinney from dealing in financial products for 20-years (since overturned) has been abandoned by ASIC
Lawyers acting for the corporate regulator argued in the Federal Court that it should not have to include in evidence at the October re-trial an expert report from Deloitte insolvency practitioner Mr Jason Tracy, or include the affidavits of ASIC officers Mr Hugh Copley and Ms Dayle Buckley.
The original ASIC-initiated proceeding VID524/2020 was commenced on an ex parte basis in August 2020 resulting in a 20-year ban of Mr Mawhinney dealing in financial products, however the decision was overturned on appeal by unanimous decision of three judges in the Full Court in October 2022, who also ordered the case be remitted to a new Federal Court judge. In doing so the Full Court found Mr Mawhinney had been denied procedural fairness, describing ASIC’s case as “mistaken” and “absurd” and allowing Mr Mawhinney’s appeal to succeed.
ASIC subsequently issued an amended originating process at the commencement of the remitted case, attempting to introduce fresh claims. However, ASIC’s attempt to change its original case was subsequently disallowed in October 2023 by the Federal Court finding that the remitted case related only to the question of whether a ban from dealing in financial products should be imposed.
Acting for the Mayfair 101 private equity investment group’s Managing Director, James Mawhinney, Mr Michael Pearce SC told the court today that the report from Mr Tracy had been commissioned by ASIC and relied upon in more than one legal proceeding against Mr Mawhinney and his business, Mayfair 101.
He also argued that the affidavits of Mr Copley and Ms Buckley had been included in the running of the VID524 case, and the evidence should be made available in the re-running of the case in October, also known as the ‘remitter’.
Mr Pearce applied to have more than 50 paragraphs of ASIC’s Statement of Claim struck out, on the basis that they either did not provide a clear case for Mr Mawhinney to answer, or because the contraventions being alleged were not supported in the Corporations Act as ‘accessorial liability’.
ASIC’s claim seeks to hold Mr Mawhinney personally liable for various alleged contraventions which are yet to be determined, including seeking injunctive relief against Mr Mawhinney for dealing in financial products pursuant to section 1101B(1) of the Corporations Act.
Mr Mawhinney said the ‘Tracy Report’ had provided ASIC with substantive material in its original prosecution, as well as at the hearing that resulted in a $30 million fine against Mayfair 101 entities, and it should be addressed in ASIC’s re-running of the case.
Justice O’Callaghan has reserved his decision.
--- ENDS ---
MEDIA ENQUIRIES
Mark Abernethy: +61 414 310 924