Equuscorp Pty Ltd v Haxton

These appeals concerned five actions brought by Equuscorp Pty Limited against various respondents, seeking to recover moneys advanced under loan agreements. The respondents had invested in tax-driven blueberry farming schemes, borrowing funds from Rural Finance Pty Limited ("Rural") to pay farm management fees. These investments constituted "prescribed interests" under state Companies Codes, and the offers were made without a registered prospectus, rendering the loan agreements unenforceable due to illegality. Equuscorp claimed as assignee of Rural's rights under these loan agreements.

The High Court was required to determine whether Equuscorp, as assignee of Rural, could recover the loan funds from the respondents. Specifically, the court had to consider whether Rural had a right to claim restitution for money had and received, notwithstanding the unenforceability of the loan agreements due to illegality. Further, the court needed to assess whether such a restitutionary right was assignable and, if so, whether the deed of assignment effectively transferred this right to Equuscorp.

The High Court held that the illegality which rendered the loan agreements unenforceable also deprived Rural of any right to claim restitution for money had and received by way of advances under those agreements. The court reasoned that the respondents' retention of the loan funds was not unjust in these circumstances, as the illegality permeated the entire transaction. While the court acknowledged that restitutionary rights, had they existed, would generally be assignable, it found that on the proper construction of the deed of assignment, the right to claim restitution was not assigned to Equuscorp.

Consequently, the High Court dismissed the appeals. The court concluded that Equuscorp failed on the first and third propositions it advanced: the illegality precluded Rural from claiming restitution, and even if such a claim were available, the assignment did not extend to it. The appeals were dismissed with costs.