Pyramid Building Society v Terry

Pyramid Building Society (in liq) (appellant) appealed to the High Court of Australia against a decision of the Full Court of the Supreme Court of Victoria. The dispute concerned the validity of certain loan agreements and securities entered into between the Pyramid Building Society and the respondents, Mr. and Mrs. Terry. The Terrys sought to have these agreements and securities declared void and unenforceable.

The High Court was required to determine whether the loan agreements and securities were void for illegality, specifically by reason of contravening the *Companies (Acquisition of Shares) Act 1980* (Cth) (the Act). The central legal issue was whether the transactions constituted a "relevant acquisition" of shares within the meaning of the Act, and if so, whether the contravention rendered the agreements and securities void.

The Court held that the transactions did not constitute a "relevant acquisition" as defined by the Act. Their Honours reasoned that the Act was concerned with the acquisition of shares in a company, not the acquisition of a loan facility. The loan agreements and securities were entered into for the purpose of providing finance, and the fact that the finance was to be used to acquire shares did not transform the loan transaction itself into a share acquisition. Consequently, the Terrys' claim that the agreements and securities were void for illegality failed.

The appeal was allowed, and the orders of the Supreme Court of Victoria were set aside.