Australian Securities and Investments Commission v M101 Nominees Pty Ltd (in liq) (No 8)

In the case of Australian Securities and Investments Commission v M101 Nominees Pty Ltd (in liq) (No 8), the Australian Securities and Investments Commission (ASIC) sought to preclude James Mawhinney, the Second Defendant, from involvement in the offering or promotion of any financial products for a period of 20 years. This was on the basis of his alleged involvement in or association with several contraventions of the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth) by companies within the Mayfair Group. The contraventions primarily involved the marketing of M Core Fixed Income Notes, M+ Fixed Income Notes, and Australian Property Bonds. ASIC alleged that misleading or deceptive conduct occurred during the marketing of these products. The court was required to decide whether certain entities within the Mayfair Group conducted financial services businesses without an Australian Financial Services Licence, and if the statutory definition of a debenture under the Corporations Act was satisfied. It also needed to determine whether the entities operated unregistered managed investment schemes or made available facilities for financial investments, and if the arrangements qualified as credit facilities under the Corporations Regulations 2001 (Cth). Furthermore, the court had to assess whether the conduct of the entities, particularly their promotional and marketing materials, conveyed misleading or deceptive representations, and if the entities contravened specific sections of the Corporations Act and ASIC Act.

The court held that the statutory definition of a debenture under the Corporations Act was not limited to arrangements recognised as debentures at common law. It found that the entities within the Mayfair Group operated unregistered managed investment schemes and provided facilities for financial investments, which qualified as credit facilities under the regulations. However, the court ruled that the conduct of the entities did not convey misleading or deceptive representations. It also concluded that the entities did not contravene the specified sections of the Corporations Act and ASIC Act. Regarding relief under section 1101B of the Corporations Act, the court determined that relief against a person other than the primary contravener was available without establishing involvement in the sense described in Yorke v Lucas. It found that the Second Defendant was associated with, or involved in, the contraventions, and considered various matters relevant to relief under section 1101B of the Corporations Act.

The final orders of the court directed the parties to make further submissions on relief within 21 days of the publication of the reasons, limited to 15 pages. The entry of orders was to be dealt with in accordance with Rule 39.32 of the Federal Court Rules 2011.