Federal Court orders ASIC to pay 50pc of costs in Mayfair 101 boss James Mawhinney’s appeal case

The Mayfair 101 boss has secured a costs order in his favour but must pay those of his former lawyers after attempting to brand them as incompetent.

Mayfair 101 managing director James Mawhinney. Picture: David Ross

Mayfair 101 managing director James Mawhinney must pay half his appeal costs after the Federal Court ruled his attempt to read a long list of appeal grounds only complicated and extended an already expensive trial.

Mr Mawhinney, who shot to fame after buying Queensland’s Dunk Island as part of a play to develop a tourism mecca, has been skirmishing with the Australian Securities and Investments Commission in a series of legal fights.

The ruling comes after ASIC banned Mr Mawhinney from advertising financial services or soliciting funds for investment products for 20 years.

The Federal Court on Thursday ordered the corporate regulator to pay half of Mr Mawhinney’s legal bill, but required he in turn pay his former lawyers’ bills.

Chief Justice James Alsop said his decision to award costs to Mr Mawhinney was not without limits.

“The price of having the proceedings remitted for a full re-pleading and the running of a new case should be that Mr Mawhinney, within reason, be held harmless and made whole from the consequences of the first failed attempt by ASIC,” he said.

Mr Mawhinney sought to appeal against his ban, bringing 29 grounds before the full bench of the Federal Court, but was successful on only one.

Mayfair 101 managing director James Mawhinney at Mission Beach. Picture: Peter Carruthers

The court found Justice David Anderson overstepped his powers in making the 20-year ban. It found ASIC had not sought the certain findings of contraventions that were relied upon in the judgment.

However, Mr Mr Mawhinney’s attempts to brand his former legal advisers at Ashurst Australia, Scanlan Carroll and William Newland as incompetent resulted in the Federal Court placing limits on ASIC’s cost burden.

Chief Justice Alsop took issue with Mr Mawhinney’s “unjustified and unjustifiable attack on the members of the profession in ground 29 who acted for Mr Mawhinney and displayed no lack of competence in their execution of their retainers”.

“Also, the grounds of appeal (other than the procedural fairness issue) lacked merit in the way trenchantly expressed by the Full Court,” he said.

Mr Mawhinney said the orders would result in ASIC paying the bill for the more than $1m spent appealing his case.

“I am pleased the full court has recognised the significant costs burden that has been incurred by ASIC’s actions,” Mr Mawhinney said.

“This win brings us another step closer to holding ASIC accountable for the damage caused by their mistaken campaign against Mayfair 101.”