Dierickx & Anor v. HP Mercantile Pty Limited & Anor

The applicants, Dierickx and another, sought to appeal a decision of the Full Federal Court concerning the enforceability of certain loan agreements. The respondents, HP Mercantile Pty Limited and another, were the lenders under these agreements. The dispute centred on whether the loan agreements were void for illegality due to contraventions of the *National Credit Code* (Cth) and the *Australian Securities and Investments Commission Act 2001* (Cth).

The High Court was required to determine whether the Full Federal Court had erred in finding that the loan agreements were not void for illegality. Specifically, the court had to consider the proper construction and application of sections 65 and 66 of the *National Credit Code*, and section 12CB of the *Australian Securities and Investments Commission Act 2001*, in circumstances where the lenders had failed to provide certain disclosure documents to the borrowers.

The High Court, in a joint judgment delivered by French CJ and Hayne J, held that the Full Federal Court had correctly determined that the loan agreements were not void for illegality. Their Honours reasoned that the contraventions of the *National Credit Code* and the *Australian Securities and Investments Commission Act 2001* did not render the agreements void in their entirety. The court applied the principle that illegality will only render a contract void if the illegality is fundamental to the contract's performance or if the statute expressly or by necessary implication mandates such a consequence. In this instance, the court found that the statutory contraventions, while serious, did not go to the root of the agreements such that they should be treated as void ab initio.

The appeal was dismissed.