Equuscorp Pty Ltd (formerly Equus Financial Services Ltd) v Haxton

The High Court of Australia considered a dispute between Equuscorp Pty Ltd (formerly Equus Financial Services Ltd) and Haxton concerning the enforceability of a loan agreement and associated security. Equuscorp sought to recover moneys lent to Haxton under a loan facility, which Haxton had guaranteed. The central issue revolved around whether Equuscorp had breached its obligations under the *Corporations Act 2001* (Cth) and the *Australian Securities and Investments Commission Act 2001* (Cth) in relation to the provision of financial services and disclosure.

The High Court was required to determine whether Equuscorp had contravened provisions of the *Corporations Act* and the *ASIC Act* by failing to comply with its disclosure obligations when providing financial services to Haxton. Specifically, the court had to consider whether the loan facility constituted a "financial product" and whether Equuscorp had engaged in misleading or deceptive conduct in contravention of statutory prohibitions. A further issue was the consequence of any such contravention on the enforceability of the loan agreement and the guarantee.

The Court held that the loan facility provided by Equuscorp to Haxton was a "financial product" within the meaning of the *Corporations Act*. Consequently, Equuscorp was subject to the disclosure obligations imposed by that Act. The Court found that Equuscorp had contravened the *ASIC Act* by engaging in misleading or deceptive conduct in relation to the provision of the financial product. This contravention rendered the loan agreement and the guarantee unenforceable by Equuscorp. The Court reasoned that the purpose of the statutory provisions was to protect consumers from inadequate disclosure and misleading conduct in the financial services industry, and that allowing enforcement of the agreement in such circumstances would undermine this protective purpose.

The High Court allowed Haxton's appeal, setting aside the orders of the lower courts and ordering that Equuscorp's claim be dismissed.