Thornton & Ors v Equuscorp Pty Ltd & Anor

In *Thornton & Ors v Equuscorp Pty Ltd & Anor*, the High Court of Australia considered an appeal from a decision of the Full Federal Court concerning the enforceability of loan agreements. The appellants, a group of investors, sought to avoid their obligations under loan agreements with Equuscorp Pty Ltd and Equus Financial Services Ltd, alleging that the agreements were void for illegality due to contraventions of the *Corporations Act 2001* (Cth) and the *Australian Securities and Investments Commission Act 2001* (Cth).

The central legal issue before the High Court was whether the loan agreements were rendered void *ab initio* by reason of the alleged contraventions, and if so, whether the appellants could nevertheless recover moneys paid under those agreements. Specifically, the court had to determine the effect of the illegality on the enforceability of the contracts and the availability of restitutionary remedies.

The High Court held that the loan agreements were not void for illegality. Their Honours reasoned that the statutory provisions relied upon by the appellants did not render the agreements void. Instead, the contraventions attracted penalties and other remedies under the relevant legislation, but did not extinguish the contractual rights and obligations of the parties. Consequently, the appellants were not entitled to recover the moneys they had paid under the agreements on the basis that the agreements were void. The appeal was dismissed.