Equuscorp Pty Ltd (Formerly Equus Financial Services Ltd) v Haxton - [2010] HCATrans 231

[2010] HCATrans 231

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Melbourne No M13 of 2010

B e t w e e n -
EQUUSCORP PTY LTD (FORMERLY EQUUS FINANCIAL SERVICES LTD) (ACN 006 012 344)
Applicant
and
IAN ALEXANDER HAXTON
Respondent

Office of the Registry
Melbourne No M14 of 2010
No M15 of 2010

B e t w e e n -
EQUUSCORP PTY LTD (FORMERLY EQUUS FINANCIAL SERVICES LTD) (ACN 006 012 344)
Applicant
and
ROBERT SAMUEL BASSAT
Respondent

Office of the Registry
  Melbourne  No M16 of 2010
  No M17 of 2010
  No M18 of 2010

B e t w e e n -
EQUUSCORP PTY LTD (FORMERLY EQUUS FINANCIAL SERVICES LTD) (ACN 006 012 344)
Applicant
and
CUNNINGHAM’S WAREHOUSE SALES PTY LTD
Respondent
Applications for special leave to appeal

FRENCH CJ
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

FROM MELBOURNE BY VIDEO LINK TO SYDNEY

ON FRIDAY, 3 SEPTEMBER 2010, AT 2.50 PM

__________________

MR B.W. WALKER, SC: May it please the Court, I appear with my learned friend, MR R.M. PETERS, for the applicants in each of those cases. (instructed by Lander & Rogers Lawyers)

MR M.R. PEARCE, SC: If the Court pleases, I appear with my learned friend, MR M.J. CAMPBELL, for the respondent in each matter. (instructed by Shand Taylor Lawyers)

FRENCH CJ: Yes, Mr Walker.

MR WALKER: Your Honours, these are a set of cases where, in our submission, on proper analysis, their fate in the Court of Appeal all turned on what was seen as an absence of a supposed prerequisite, doctrinally, for the claims described as being in restitution, the claims for money had and received. That supposed doctrinal prerequisite is the total – I stress the word “total” – failure of consideration requirement to which I will come in one moment. But at the heart of the holding against my client, at the heart of the finding of total failure of consideration, was a matter where, in our submission, on the interests of justice in the particular case, there was a signal error of a kind easy to see which needs to be corrected.

May I take your Honours in the application book to page 130. At paragraph 38 in the reasons of Justice Dodds‑Streeton one there finds at line 10 on the page, “Rural did not enforce its securities over the investors’ interests.” That was correct. It was based upon a concession which can be seen – I probably do not need to take your Honours to it – in the pleadings which are conveniently found in the respondent’s supplementary material in this case at pages 11 and 17, the paragraphs being respectively 56 and 44 of the pleadings, as to the manner by which there was an enforcement of securities. It suffices to say that given paragraph 38 of the holding, in light of the matter made apparent by the pleadings, there had been no enforcement by…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2010] HCATrans 231
Decision Date

CaseChat Overview and Summary

The High Court of Australia considered an appeal by Equuscorp Pty Ltd (formerly Equus Financial Services Ltd) against a decision of the Full Federal Court concerning a dispute with Mr Haxton. The core of the disagreement revolved around the interpretation and enforceability of certain loan agreements and related security documents.

The central legal question before the High Court was whether the loan agreements and associated security documents were void for illegality, specifically by reason of contravening provisions of the *Financial Services Reform Act 2001* (Cth) (FSRA) and the *Corporations Act 2001* (Cth). This involved determining whether the conduct of Equuscorp in entering into these agreements constituted the carrying on of a financial services business without the requisite authorisation.

The High Court, in allowing the appeal, reasoned that the FSRA and the *Corporations Act* did not render the loan agreements void. Their Honours found that the contraventions, if any, related to the conduct of Equuscorp in entering into the agreements, rather than the agreements themselves being inherently illegal. The Court distinguished between a contract being void for illegality and a contract being unenforceable due to a statutory prohibition on the conduct of the parties. The principles applied focused on statutory interpretation and the severability of illegal provisions from otherwise valid contracts.

Consequently, the High Court set aside the orders of the Full Federal Court and remitted the matter to the Federal Court for further determination.

Orders