MELBOURNE, AUSTRALIA: The Federal Court of Australia this morning delivered private equity business Mayfair 101 a major win by disallowing the Australian Securities and Investments Commission from running an expanded case against Managing Director James Mawhinney.
The successful application by Mr Mawhinney disallows ASIC from seeking additional contraventions in a matter dating back to August 2020 which previously saw Mr Mawhinney banned for 20-years from dealing in financial products. The ban was subsequently overturned by unanimous decision of the Full Court last year, which found ASIC brought a “mistaken” and “absurd” case which denied Mr Mawhinney procedural fairness.
Federal Court Justice O’Callaghan this morning ordered ASIC to file an amended originating process within 21 days. His Honour said, in his reasoning, that the primary court could not go outside the scope of that which has been remitted.
His Honour said, at paragraph 82 of his judgement, that ASIC’s fresh claims would “place Mr Mawhinney in significantly greater jeopardy.”
The decision comes after the August 2023 hearing in which ASIC stated at least seven times that it had a mistaken understanding of the law which meant Mr Mawhinney was successful in appealing the original decision of Justice Anderson.
Nearly six hundred Australian lenders have been without principal and interest payments for more than three and a half years after ASIC set upon the business in April 2020 without interviewing Mr Mawhinney or requesting basic data to inform its investigation, including financial statements and asset registers.
Mr Mawhinney has called for an independent Senate Inquiry into ASIC’s handling of Mayfair 101. He says it is apparent that ASIC had a mistaken understanding of Mayfair 101’s business model and this misunderstanding could have been clarified had ASIC communicated their concerns rather than resorting to litigation at the first opportunity.
