Nco Finance Australia Pty Ltd v Australian Pacific Airports (Melbourne) Pty Ltd

Nco Finance Australia Pty Ltd (Nco Finance) and Australian Pacific Airports (Melbourne) Pty Ltd (APAM) were the parties involved in proceedings before the County Court of Victoria. The dispute concerned a claim by Nco Finance for payment of an alleged debt arising from a loan agreement, which APAM disputed.

The central legal issue before the court was whether APAM was liable to repay the loan to Nco Finance, notwithstanding APAM's contention that the loan agreement was void for illegality due to contravention of section 101 of the *Corporations Act 2001* (Cth). This section prohibits a corporation from carrying on a borrowing business unless it holds an Australian financial services licence (AFSL) authorising it to do so. Nco Finance did not hold such a licence.

Judge O’Dwyer found that Nco Finance was indeed carrying on a borrowing business without the requisite AFSL, thereby contravening section 101 of the *Corporations Act*. Consequently, the loan agreement was deemed void and unenforceable as a matter of public policy. The court reasoned that allowing Nco Finance to recover under a void agreement would undermine the legislative purpose of section 101, which is to protect the public by ensuring that entities engaged in borrowing businesses are properly licensed and regulated.

The court ordered that judgment be entered for the defendant, APAM, with costs to be determined.