Court to rehear Mayfair 101 managing director James Mawhinney’s case

Mayfair 101 managing director James Mawhinney has won the right to appeal his 20-year ban on spruiking financial services.

Parts of the case against former Mayfair 101 managing director James Mawhinney will be reheard in court. Picture: David Ross

The full bench of the Federal Court has set aside a 20-year ban on spruiking financial services by Mayfair 101 managing director James Mawhinney but imposed a temporary injunction pending a new trial of his case.

Of Mr Mawhinney’s 29 grounds of appeal, one was allowed and the court on Thursday ordered parts of the original judgment from Justice Stewart Anderson, handed down last year, be set aside pending a new hearing.

The court allowed the appeal of the 20-year ban primarily on the grounds of procedural fairness, but moved to reimpose temporary injunctions put in place on Mr Mawhinney by the corporate regulator in 2020.

Mr Mawhinney’s lawyers argued Justice Anderson had not properly conducted the case which saw him given a 20-year ban on advertising financial services or soliciting funds for investment products.

Mr Mawhinney’s legal team had argued Justice Anderson overstepped his powers in making the rulings.

The full bench found Justice Anderson made findings against Mr Mawhinney for contraventions of the Corporations Act despite lawyers for the Australian Securities and Investments Commission not seeking them.

Justice Anderson had ordered Mr Mawhinney be restrained from attempting to gain more investments for his company’s M Core and M Core+ Fixed Income Notes, which had been used to fund his tourism venture in Queensland’s Mission Beach region and the purchase of Dunk Island.

The court found Mr Mawhinney’s grounds for appeal were “very exceptional” and the case should be reheard before a new judge.

The court also ordered ASIC pay Mr Mawhinney’s costs from two hearings related to the 20-year ban in February and March 2021 on an indemnity basis.

The court noted Mr Mawhinney’s other grounds of appeal were “hopeless” and “ought not to have been raised”.

The court rejected Mr Mawhinney’s attempts to argue his legal representatives in his cases with ASIC were incompetent and Mr Mawhinney was ordered to pay the costs of lawyers from Ashurst Australia, Scanlan Carrol and William Newland.

In the original case, ASIC had argued Mr Mawhinney engaged in deceptive conduct and misled investors from whom it raised $211m, alleging one investor invested despite withdrawals from the investment scheme having been frozen by Mr Mawhinney 11 days earlier.

Mayfair suspended redemptions from the notes sold to investors in March 2020, claiming the Covid-19 pandemic had affected the company.

However Mr Mawhinney alleged he was not aware of his right to give privileged responses in an examination, which would prevent them being used against him.

In the 2021 judgment, Justice Anderson said Mr Mawhinney had a “total disregard for the law” and he had “no confidence” he properly understood financial services laws or would cease his activity if not restrained.

Mayfair 101 made headlines with the high-profile purchase of hundreds of properties in Mission Beach and Dunk Island, an island previously owned by mining entrepreneur Peter Bond.