Federal Court of Australia

Australian Securities and Investments Commission v M101 Nominees Pty Ltd (in liq) (No 9) [2025] FCA 1070

ORDERS

THE COURT ORDERS THAT:

Final relief

1.    Pursuant to section 1101B(1) of the Corporations Act 2001 (Cth) (Corporations Act), for a period of 15 years from the date of these orders, the Second Defendant, by himself, his servants, agents, employees and any company of which he is an officer or member, be restrained from:

(a)    receiving or soliciting funds in connection with any financial product (as defined in Division 3 of Chapter 7 and section 9 of the Corporations Act (Financial Product)), including but not limited to products known as the M Core Fixed Income Notes, M+ Fixed Income Notes and Australian Property Bonds; and

(b)    advertising, promoting or marketing any Financial Product, including but not limited to products known as the M Core Fixed Income Notes, M+ Fixed Income Notes and Australian Property Bonds.

2.    Paragraph 5 of the orders dated 13 August 2020 be vacated.

Costs

3.    By 12 September 2025, the parties are to file and serve any further submissions on costs, limited to 3 pages.

4.    By 17 September 2025, the parties are to file and serve any submissions in reply to the costs submissions referred to in paragraph 3 above, limited to 1.5 pages.

5.    Unless the parties wish to make, or the Court wishes to receive, oral submissions in relation to costs, costs will be determined on the papers.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BUTTON J:

1    On 9 July 2025, I handed down my reasons in Australian Securities and Investments Commission v M101 Nominees Pty Ltd (in liq) (No 8) [2025] FCA 741 (Contravention Reasons). Those reasons addressed ASIC’s allegations that companies in the Mayfair Group contravened provisions of the Corporations Act 2001 (Cth) (Corporations Act), and the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act). The Contravention Reasons also addressed Mr Mawhinney’s role in relation to those contraventions on a qualitative basis — under the rubric of Mr Mawhinney’s “association” with the contraventions — and on the basis of involvement according to the test set out in Yorke v Lucas (1985) 158 CLR 661: Contravention Reasons [1049]–[1189]. The Contravention Reasons also set out the principles concerning relief under s 1101B of the Corporations Act: at [1030]ff.

2    These reasons assume familiarity with, and are to be read with, the Contravention Reasons. I do not repeat here all the factual findings made in the Contravention Reasons. Based on those factual findings, I concluded that ASIC had established that companies in the Mayfair Group, being a group of companies owned and controlled by Mr Mawhinney, contravened ss 911A and 1041H of the Corporations Act and ss 12DA and 12DB(1)(a) and (e) of the ASIC Act. To say that the Mayfair Group was “controlled” by Mr Mawhinney is not to say that he had only the capacity to control it or gave high level direction. Rather, he was “hands-on”, and exercised day to day control over the operations of the Mayfair Group, as well as controlling bigger picture matters such as the security structure supporting the M Core Notes. Mr Mawhinney also permitted IPO Capital to continue operating without an AFSL long after it was clear that one was required, exhibiting what I described in the Contravention Reasons (at [1098]) as a “cavalier attitude to compliance with [an] important statutory safeguard”.

3    As noted in the Contravention Reasons, Mr Mawhinney sought, and was granted, the opportunity to make submissions on the orders that should or, more pointedly from Mr Mawhinney’s point of view, should not be made, after the Court’s findings on the contraventions were known. Both sides put on written submissions on relief. Neither ASIC nor Mr Mawhinney sought to make oral submissions on relief.

4    The history of this litigation, and related litigation to which Mr Mawhinney was not a party, is set out in the Contravention Reasons: at [248]ff. The point of present relevance is that Mr Mawhinney has, in substance and for five years, been restrained from operating in the financial services sector. Initially he was restrained pursuant to interim orders made on 13 August 2020, and then pursuant to final orders made on 19 April 2021 (restraining Mr Mawhinney for a period of 20 years) but, following his success on appeal, the final orders were revoked and the interim orders made on 13 August 2020 were restored.

5    ASIC submitted that Mr Mawhinney should be restrained for a further 15 years, effectively the balance of the initial 20-year restraint. Mr Mawhinney submitted that no further period of restraint should be imposed and the interim restraint should be revoked.

6    The final relief sought by ASIC in its Amended Originating Process is as follows, noting that the term “Financial Product” is defined in that document as “a financial product as defined in Division 3 of Chapter 7 and section 9 of the Corporations Act”:

An order pursuant to section 1101B(1) of the Corporations Act that the Second Defendant, by himself, his servants, agents, employees and any company of which he is an officer or member, be restrained from:

a.     Receiving or soliciting funds in connection with any Financial Product, including but not limited to products known as the M Core Fixed Income Notes, M+ Fixed Income Notes and Australian Property Bonds;

b.     Advertising, promoting or marketing any Financial Product, including but not limited to products known as the M Core Fixed Income Notes, M+ Fixed Income Notes and Australian Property Bonds; and

c.     Removing or transferring from Australia any assets acquired directly or indirectly with funds received in connection with any Financial Product, including but not limited to products known as the M Core Fixed Income Notes, M+ Fixed Income Notes and Australian Property Bonds.

7    ASIC seeks an order restraining Mr Mawhinney in these terms for a period of 15 years, noting that Mr Mawhinney has been subject to restraints in substantially the same terms since the interim orders were made on 13 August 2020.

8    Mr Mawhinney submitted that, if the Court is to make any further orders, those orders should be limited to an injunction restraining him from causing or permitting any company under his direct control from engaging in misleading or deceptive conduct in the advertising of financial products for a period not exceeding five years. In other words, Mr Mawhinney proposed (in the alternative) orders going no further than exhorting him to comply with existing laws (albeit that the consequence of a breach of the Court’s orders would potentially include a finding of contempt of court, as compared with the consequences of contravening the existing obligations under the Corporations Act and the ASIC Act).

9    While, as Mr Mawhinney pointed out in his submissions, there are numerous cases in which the restraint imposed is to require compliance with an existing obligation, that is not to say that the orders that can be made under s 1101B are limited to orders of that kind, or that such orders are necessarily appropriate in this case. Section 1101B explicitly provides that the Court may make such order, or orders, “as it thinks fit”. As these reasons go on to explain, I consider that a restraint precluding Mr Mawhinney from operating in the financial services sector for 15 years is what I consider “fit”.

10    Although I set out the principles applying to the grant of relief under s 1101B of the Corporations Act in the Contravention Reasons, I will summarise the principles I have applied in determining the final orders to be made and will address some submissions made by Mr Mawhinney on the approach the Court should take.

11    A convenient starting point is the purpose served by s 1101B. As set out in the Contravention Reasons at [1032] (emphasis added):

The purpose of s 1101B is to uphold public confidence in the providers of financial products and financial services: Australian Securities and Investments Commission v Caddick [2021] FCA 1443; (2021) 395 ALR 481 at [322] (Markovic J); Re Idylic Solutions Pty Ltd; Australian Securities and Investments Commission v Hobbs [2013] NSWSC 106; (2013) 93 ACSR 421 at [103] (Ward JA (as her Honour then was)). That purpose may be served, in appropriate cases, by restraining ongoing misconduct, and by preventing future misconduct where the risk of future misconduct is suggested by a history of past misconduct: Australian Securities and Investments Commission v NGS Crypto Pty Ltd (No 3) [2024] FCA 822 at [49] (Collier J).

12    The Court’s power under s 1101B is not at large. As set out in the Contravention Reasons at [1034], in Mawhinney v Australian Securities and Investments Commission [2022] FCAFC 159; (2022) 294 FCR 375 (Mawhinney Full Court), Jagot, O’Bryan and Cheeseman JJ said that “there is an implicit limitation that the power to make an order under the section is confined by the scope and purpose of the power, which includes an implication that there is a sufficient nexus between the relevant contravention and the order made”: at [158]. While their Honours made that observation in the course of reasoning that orders can be made under s 1101B against a person other than the primary contravener, the limitation of orders under s 1101B by reference to the “nexus” between the contravening conduct and the orders made is also apposite to the nature and extent of the orders made, once the power is enlivened.

13    Mr Mawhinney’s submissions on relief contended, in substance, that the nexus requirement means that orders made under s 1101B can go no further than necessary to “avoid a repetition” of the particular contravening conduct that was found to have occurred. I do not accept that the power conferred by s 1101B is so limited. Nor do I accept that the various injunction cases, cited by Mr Mawhinney, that related to s 80 of the former Trade Practices Act 1974 (Cth), s 80 of the Competition and Consumer Act 2010 (Cth) and s 232 of the Australian Consumer Law (sch 2 to the Competition and Consumer Act 2010 (Cth)) compel a constraint on the orders the Court can make under s 1101B of the Corporations Act. Even putting to one side the different statutory terms in which those injunction powers are, and were, conferred, what the cases relied on by Mr Mawhinney highlight is that injunctive relief must be moulded to the conduct that the injunction is directed to preventing, and that that which the court’s orders enjoin must be conduct having a sufficient nexus with the contravening conduct that enlivened the power.

14    In the context of s 1101B, Mr Mawhinney relied on Australian Securities and Investments Commission v Park Trent Properties Group Pty Ltd (No 4) [2015] NSWSC 1767; (2015) 110 ACSR 189 (Park Trent) as exemplifying the narrow ambit of permissible relief under s 1101B. In that case, orders were made under s 1101B against a defendant that had operated a financial services business without an AFSL. Mr Mawhinney submitted that “[t]he restraining order made by the Court under s 1101B did not prohibit the defendant from carrying on a financial services business but was limited to prohibiting the specific conduct which had been found to amount to carrying on a financial services business”.

15    Mr Mawhinney also specifically relied on the statement of Sackville AJA (Park Trent at [18]) that “[t]he form of a restraining order made pursuant to s 1101B(1) of the Corporations Act should reflect the contravening conduct and should not extend beyond that conduct”. Mr Mawhinney’s submissions overlook a number of matters. First, the quoted statement of Sackville AJA was made in accepting a submission that the restraining order should not preclude the defendant from engaging in activities that would not be done in carrying on a financial services business. That was the concern. Mr Mawhinney’s submissions wrongly seek to eke out from that a statement of principle that relief under s 1101B is limited to restraining the recurrence of the “specific conduct” that constituted the contraventions enlivening the s 1101B power.

16    Secondly, although the relief in Park Trent was framed — to paraphrase — in terms precluding the defendant from making recommendations regarding the establishment of self-managed superannuation funds, that was the relief the court considered appropriate to serve the objectives of s 1101B in that case. Park Trent does not stand for any proposition that the available relief is limited to orders preventing the recurrence of the “specific conduct” founding the contraventions.

17    Thirdly, as the reasons in Park Trent make clear, the judge had proposed a form of restraining order and the submissions addressed in those reasons related only to the order as proposed by the court. No issue about the limits on the s 1101B power arose.

18    In light of the purpose of s 1101B, and because that purpose can be served by preventing future misconduct, where a risk of future misconduct is suggested by past misconduct, I do not consider that the orders the Court should make are narrowly constrained so that they can go no further than preventing a repetition of the specific conduct that occurred, which contravening conduct enlivened the Court’s power to make orders under s 1101B. Nor do I consider that there will only be the necessary “nexus” where the orders are tied directly to preventing a repetition of conduct of the same kind as occurred.

19    In my view, there will be the necessary nexus where the nature of the contraventions that occurred, including the circumstances by which they occurred, informs the Court’s assessment of the risk of future misconduct, and what kind of orders will preserve public confidence by guarding against that risk. As the Full Court said in Mawhinney Full Court, “the degree and nature of the relationship between the person and the contravention would no doubt be highly relevant to the exercise of the discretion to make such an order”: at [163]–[164], quoting and agreeing with Brereton J’s views in Re Vault Market Pty Ltd [2014] NSWSC 1641 (Re Vault) at [70]. Likewise, a nexus of that kind satisfies the constitutional limitation, to which Mr Mawhinney directed attention in his submissions (citing Stefanovski v Digital Central Australia (Assets) Pty Ltd [2018] FCAFC 31; (2018) 368 ALR 607 at [88]; Australian Competition and Consumer Commission v Mazda Australia Pty Ltd (No 3) [2024] FCA 83 at [101]; Australian Competition and Consumer Commission v TPG Internet Pty Ltd (No 2) [2012] FCA 629 at [17]–[18]), requiring the injunction to be related to the case or controversy the subject of the proceeding.

20    I should also explain why I reject various of Mr Mawhinney’s other submissions on relief.

21    Mr Mawhinney sought to make much of the fact that ASIC did not succeed on all of its alleged contraventions, and failed to make out its case on two contraventions that ASIC had highlighted in its conduct of the case before the remitter. I have approached the question of final relief having regard to the contraventions established by ASIC, how they came about, what Mr Mawhinney’s role was in relation to them, and what those matters suggest about the risks posed to the investing public were Mr Mawhinney not precluded from involvement in the financial services sector, together with the related question of what is necessary to serve the purpose of s 1101B, viz to uphold the public confidence in the providers of financial products and services. Although ASIC proposed (and previously secured) a 20-year restraint, but has now failed to make out some of its alleged contraventions, I do not consider it at all logical to somehow work back from, or apply a discount to, ASIC’s opening position. Nor do I consider that whatever emphasis ASIC previously put on different alleged contraventions, its failure to make out some representations it previously highlighted logically informs the relief this Court should grant. As I have said, determining what orders the Court should make is informed by the matters to which I have directed attention. Focusing on what ASIC previously highlighted, in the course of this long litigation before the remitter, would only distract from that task.

22    Mr Mawhinney structured his submissions on the basis that each established contravention is to be considered separately, with the “penalty” to be imposed determined separately for each contravention. The approach Mr Mawhinney propounded reflects the course taken in civil penalty proceedings, where “courses of conduct” are identified and pecuniary penalties are ascribed to specific contraventions, grouped (where relevant) by reference to courses of conduct.

23    Section 1101B(1) empowers the Court to make “such order, or orders, as it thinks fit” if one of the sets of enlivening circumstances provided for in sub-sections (a)–(d) exists. Whether or not an order being contemplated is properly to be considered as “penal” is to be determined by reference to the effect of the relief sought: Australian Securities and Investments Commission v Macrolend Pty Ltd [2024] FCA 1028 at [12] (SC Derrington J). Orders with a protective intent — eg to protect investors — can still be punitive: Rich v Australian Securities and Investments Commission [2004] HCA 42; (2004) 220 CLR 129 at [31], [35] (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ); Australian Securities and Investments Commission v Monarch FX Group Pty Ltd [2014] FCA 1387; (2014) 103 ACSR 453 at [28] (Gordon J).

24    The order sought by ASIC will preclude Mr Mawhinney from participating in a large field of activity that, if undertaken in conformity with applicable legislation, would not be unlawful. In that respect, the order sought is penal, consistently with the characterisation of similar relief in Gore v Australian Securities and Investments Commission [2017] FCAFC 13; (2017) 249 FCR 167 at [290] (Rares J, Dowsett and Gleeson JJ agreeing). However, I do not consider that recognising that the order sought is penal in character means that the analysis of what order(s) should be made must be conducted according to the approach that typifies civil penalty proceedings, whereby the “penalty” for each contravention (or group of contraventions, if the course of conduct principle applies) is identified and then the aggregate penalty is assessed as a whole.

25    The relief sought by ASIC is directed to precluding Mr Mawhinney from operating in the financial services sector (at least insofar as the promotion and issue of financial products is concerned). ASIC does not contend that any particular non-pecuniary “penalty” should be imposed for each set of contraventions. In exercising the Court’s power under s 1101B, the Court is not imposing a penalty for a contravention. Rather, the contraventions enliven the Court’s power under s 1101B and the factual circumstances by which the contravening conduct occurred, including Mr Mawhinney’s role in relation to it, constitute the factual foundation by which the Court determines what order(s) should be made in service of the protective function of s 1101B.

26    Decided cases applying s 1101B do not proceed by applying the kind of analysis urged by Mr Mawhinney. Rather, the conduct is approached qualitatively, and not by determining a “penalty” for each identified contravention. For example, in Re Vault, Brereton J addressed the qualitative factors relevant to the orders to be made against the individual controlling a contravening company (at [74]–[80]), and grouped them under the headings “[a]ggravating factors” and “[m]itigating factors”.

27    I consider that the preferable approach is to consider the appropriate relief having regard to the established contraventions as a whole, and not separately by reference to each established contravention (or group of established contraventions).

28    Mr Mawhinney submitted that, because the contraventions were those of companies under his direction and control, any properly framed order would only “prohibit Mr Mawhinney from causing or permitting any company under his direct control from engaging in the contravening conduct”. I do not accept that contention. To the extent that this argument repeats, in another form, the argument that the orders can only ever preclude a repetition of the specific conduct by which the contravention occurred, I have already considered and rejected this argument.

29    Mr Mawhinney’s argument, if accepted, would significantly curtail the wide-ranging power Parliament has conferred on the Court to make “such order, or orders, as it thinks fit”. A limitation of that kind would also undermine the Court’s capacity to give effect to the protective purpose of s 1101B. In Re Vault, Brereton J observed (at [76]) that:

Because corporations act through individuals, and individuals control the mind of corporations, it is particularly important that the individuals who caused Vault to commit the contraventions themselves be the subject of some sanction.

The same is true of this case: Mr Mawhinney was the owner and controller of the contravening companies. There is nothing in s 1101B, or the principles governing its application, to support the contention that, where contraventions are those of a company, and accepting that orders can be made against a person other than the contravener — as to which see the Contravention Reasons at [1035] — the order(s) must be limited to precluding the natural person from doing things through one or more corporate vehicles.

30    Mr Mawhinney is correct to note, in his submissions on relief, that the case brought by ASIC does not allege dishonesty on his part. He submits that significant periods of restraint have been imposed in cases where dishonesty is alleged, and lesser periods of restraint have been imposed in cases where no dishonesty is alleged. Assuming the correctness of those observations, they are of only limited relevance in this case. The period of restraint that I consider the Court should, in its discretion, impose responds to the nature of the contraventions that I have found, and Mr Mawhinney’s role in relation to them. It is not only dishonest conduct that exposes a risk to the investing public, or a sub-section thereof. Cavalier risk-taking behaviour that exposes investors to significant risk of harm is also conduct that exposes and evidences an unacceptable risk of future misconduct, which warrants a lengthy period of restraint.

31    Both ASIC and Mr Mawhinney, in their submissions on relief, agreed that the matters I identified in the Contravention Reasons at [1039] are relevant in the exercise of the Court’s discretion under s 1101B (although Mr Mawhinney qualified his acceptance of the relevance of those matters by saying that the “broad principle” to be drawn from the cases is that a lengthy period of restraint prohibiting otherwise lawful conduct should be imposed only in cases at the extreme end of the spectrum of possible misconduct).

32    The relevant matters that I identified in the Contravention Reasons at [1039], on a non-exhaustive basis, are as follows:

(a)    the extent of losses suffered by investors;

(b)    how those losses came about (including whether the business model adopted by Mr Mawhinney was fatally flawed or was sound, but scuppered by ASIC’s actions in bringing proceedings, Mr Jahani’s Court Report, and COVID-19);

(c)    the circumstances in which the contraventions occurred (including the duration of the conduct constituting the contraventions and how the contraventions came about (including whether advice was taken)); and

(d)    whether the circumstances are such as to reveal a risk of further contraventions.

33    I address those matters below, while noting that they are interrelated.

34    As I set out in the Contravention Reasons, the operations established and run by Mr Mawhinney exposed investors to an obvious and substantial risk of loss, which risk materialised, resulting in investors suffering heavy losses. More than that, and reflecting that the Mayfair Group targeted self-funded retirees, I infer that many of the investors who lost their funds lost at least part of their retirement savings at a point in their lives where they had little opportunity to recover financially.

35    Over the 10 months from late June 2019 (when the M+ Notes were launched) to April 2020, the total invested in the M Notes exceeded $133 million. Of that sum, over $72 million was raised by the issue of the M+ Notes, with over $61 million having been invested in the M Core Notes (which were launched in late October 2019). Despite being marketed as a secured investment, the expected realisations for investors in the M Core Notes is between nil and $4.29 million or $6 million: Contravention Reasons [1169], [1175]. That outcome resulted from the serious flaws in the security structure that Mr Mawhinney implemented, including the unsecured lending of virtually all funds obtained from investors in the M Core Notes to a related entity, Eleuthera. The flaws in the security structure are addressed in detail in the Contravention Reasons (at [82]–[137], [813]–[851]).

36    While I accepted in the Contravention Reasons (at [314], [317]) that the pandemic played some part in the financial collapse of the Mayfair Group, I do not consider that the question of the appropriate relief to be ordered should be approached on the basis that all would have been well, had there been no pandemic. As I addressed in the Contravention Reasons, the operations Mr Mawhinney established and ran were enormously risky and were undertaken at break-neck pace, with no adequate cashflow planning (see, in particular [42]–[56], [263]–[319], [1168]–[1175]). I also set out in the Contravention Reasons (at [66]–[71]) that the Mayfair Group was experiencing significant financial strain well before the pandemic.

37    The scale and pace at which the Mayfair Group — established, owned and controlled by Mr Mawhinney — operated, resulted in very large inflows from investors over a short period of time. This shows the extent of the risks to investors presented by the Mayfair Group’s operations. Those risks arose from Mr Mawhinney’s pursuit of a big vision with no proper consideration of how obligations to investors would be met while the years-long vision was pursued. The only “plan” Mr Mawhinney appeared to have for the Mayfair Group to meet its obligations while his grand vision was being pursued, was to raise more and more money from investors. The significance of these matters, for present purposes, is that they expose Mr Mawhinney’s willingness to adopt a reckless approach to the conduct of a financial services business issuing investments to a segment of the investing public.

38    I consider that, if not restrained, there is a real risk that Mr Mawhinney would again operate in this fashion in the financial services sector. There is no basis on which I am able to conclude that the risk Mr Mawhinney poses has been ameliorated. Mr Mawhinney has elected not to give evidence personally. That is his prerogative, and is not in any way an aggravating factor. However, I have no evidence from Mr Mawhinney that he appreciates the risk to which he exposed investors via the operations of the Mayfair Group by reason of the recklessness with which those operations were conducted. On the contrary, and as I observed in the Contravention Reasons (at [1174], [1185]), Mr Mawhinney’s conduct of the proceeding suggests he continues to blame others (ASIC and Mr Jahani) and external circumstances (COVID-19) for the losses suffered by investors.

39    In the Contravention Reasons, I was particularly critical of Mr Mawhinney’s decision to freeze redemptions, but not disclose that fact, all the while exhorting his staff to raise more money from investors: Contravention Reasons at [1136]. In his submissions on relief, Mr Mawhinney nonetheless contended that the confusion and uncertainty arising from the pandemic over the period relevant to the Liquidity Prudency Policy contraventions (11 March to 2 April 2020) should be “considered as powerful mitigating circumstances”. I do not accept that submission. The simple fact is that, in circumstances where the Mayfair Group was in serious financial trouble, Mr Mawhinney made the decision to stop paying investors sums due to them and was prepared to try to get the Mayfair Group out of the hole it was in by raising more money from unsuspecting investors.

40    Mr Mawhinney says, in his submissions on relief, that his conduct should be assessed, not with hindsight, but “with the knowledge that he actually had in March 2020”. As a statement of principle, that is all very well, but the Court has no evidence from Mr Mawhinney regarding what he thought at the time in deciding to act as he did. Consequently, his state of knowledge can only be inferred from the available evidence. While the contemporaneous correspondence indicates that Mr Mawhinney considered the halt on redemptions to be necessary to “preserve funds in order to protect all investors and the group” and that he was optimistic that the “new lead generation program” would see them “back in the black” soon, none of that addresses the fundamental issue of the failure to inform investors of the implementation of the Liquidity Prudency Policy Decision.

41    Mr Mawhinney also says that his actions are to be considered in light of the fact that any new investments made at the relevant time would not have matured for six months, or longer. While the evidence supports Mr Mawhinney’s contention that the M Core Notes at this point were being offered on terms of six months or more, the M+ Notes continued to be promoted with a three month term offered (eg by an EDM on 17 March 2020 and the M+ Notes brochure, which was disseminated at least on 23 March 2020), albeit while promoting a special interest rate for six-month investments. Accordingly, I do not accept that Mr Mawhinney would have been proceeding on the basis that no new investment would mature within six months. In addition, there is nothing to suggest that any view Mr Mawhinney may have formed about how long the halt on redemptions would last had any reasonable foundation.

42    In his submissions on relief, Mr Mawhinney says that it should be recognised that the losses experienced by investors “cannot be entirely attributed to Mr Mawhinney”. That submission is based on a contention that “[the Court] has recognised that the onset of the pandemic did coincide with a big reduction in inflows of funds and that this did play a role in the failure of the M101 Nominees business”, citing the Contravention Reasons at [306] and [317]. Mr Mawhinney’s submissions had a tendency to overstate the extent to which I found that the pandemic contributed to the financial difficulties of the relevant Mayfair Group companies. I did accept, in the Contravention Reasons, that the COVID-19 pandemic affected the inflow of new investor funds and that the impact of COVID-19 was long-lasting (at [314], [317]). I also noted, however, that, whatever impact the pandemic had, the fact remains that Mr Mawhinney chose not to disclose the Liquidity Prudency Policy Decision (at [1113]) and that the Mayfair Group business was struggling with liquidity from October 2019 — so long before the pandemic — being unable to settle on property purchases in a timely way (at [66]ff). Adverse publicity was also a problem taxing Mr Mawhinney, particularly adverse commentary in the AFR (at [67]). The short point is that, while I accepted in the Contravention Reasons that the pandemic contributed to an extent to the financial woes of the Mayfair Group, my findings regarding the riskiness of the venture, the flaws in the security structure and the reckless conduct of the venture (particularly the frenetic purchasing of property without cashflow planning) mean that I am unable to conclude that the risk of future misconduct, as suggested by past conduct, is any the lesser for the impact of the pandemic, or that the question of relief should be approached on the basis that the pandemic was a material cause of the losses suffered by investors.

43    The contraventions, as found, and Mr Mawhinney’s role in relation to them expose the risk that Mr Mawhinney poses to the investing public. It is the nature of the risk, to which I consider orders under s 1101B are properly directed, that also explains why it is that I do not consider that Mr Mawhinney’s efforts to obtain legal advice in relation to the M Notes mean that no further period of restraint ought to be ordered. I observed in the Contravention Reasons (at [209]–[212], [1178]) that Mr Mawhinney had gone to some lengths to obtain legal advice on the marketing material used to promote the M Notes — somewhat belatedly in the case of the M+ Notes — and that the advice obtained in this regard was generally implemented. Obtaining such advice is all very well, and does show some effort to operate in a compliant manner, but when that advice has been obtained without the lawyers involved being given a full and proper understanding of the nature of the business operations behind the marketing materials, it does not significantly ameliorate the risks to which I have referred, and which lead me to conclude that a further significant period of restraint is warranted in order to serve the protective purpose of s 1101B. The same goes for the evidence of an isolated instance where Mr Mawhinney gave instructions to his team cautioning against making “potentially misleading” statements likening the M+ Notes to bank term deposits when speaking to investors (Contravention Reasons at [1109], [1119]).

44    In his submissions on relief, Mr Mawhinney emphasised, in relation to the contraventions arising from the conduct of a financial services business by IPO Capital without an AFSL, that:

(a)    the business operated on a limited scale (with the total amount owing to investors peaking at approximately $5.5 million); and

(b)    on the evidence available, did not cause investors loss.

45    The limited scale of activities was also raised by Mr Mawhinney’s submissions in relation to the Liquidity Prudency Policy contraventions and the Property Bonds Security Representation. In the case of the latter, Mr Mawhinney also noted that the only investors in the Australian Property Bonds had been repaid, with interest.

46    While the scale of the potential and, in the case of the M Notes, actual financial losses to which investors were exposed is a material factor in considering the orders to be made, it does not follow that the smaller scale of the IPO Capital operations, the limited funds raised in the period during which contraventions relating to the Liquidity Prudency Policy occurred, and the limited funds raised through the Australian Property Bonds means that the Court should in some way offset those matters against the risk to the investing public posed by Mr Mawhinney, should he return to financial services.

47    Not only do I reject Mr Mawhinney’s approach in seeking to segregate each set of contravening conduct and assess the “penalty” — his language — to be imposed for each set of contraventions separately, I also consider that Mr Mawhinney’s submissions confuse a lack of success in persuading investors to invest, with a lack of risk. As set out in the Contravention Reasons (at [142]–[144], [870]), during the period after the Liquidity Prudency Policy Decision was taken, Mr Mawhinney was exhorting his team to raise funds, setting them fundraising targets. Similarly, Mr Mawhinney had much grander visions for the scale at which the Australian Property Bonds would operate than he actually achieved. That said, as I set out in the Contravention Reasons, the basic security plan devised for the issue of the Australian Property Bonds became viable once arrangements were made with Naplend which allowed for individual properties to be freed up to offer as first mortgage security to investors.

48    As to IPO Capital, I accept that there is no evidence investors suffered losses and, as Mr Mawhinney pointed out, the other businesses at issue in this proceeding were operated with AFSLs. However, that does not suggest that nothing flows from the IPO Capital contraventions when it comes to assessing the appropriate relief under s 1101B. As set out in the Contravention Reasons, Mr Mawhinney launched and operated the IPO Capital business without obtaining any legal advice as to whether an AFSL was required, obtained “legal advice” that was little more than a fig-leaf procured with limited instructions, and then persisted and continued to operate IPO Capital without an AFSL long after it is clear that his own lawyers considered its operations were non-compliant and an AFSL was required: Contravention Reasons at [231]–[238], [1095]–[1098].

49    Insofar as specific deterrence is concerned, I accept that it is unlikely that Mr Mawhinney would, if not subject to any restraint, run a financial services business without an AFSL in the future. Nevertheless, the fact that it appears Mr Mawhinney has, at some point decided that operating without an AFSL is not a gauntlet he is willing to run (or considers worth running), does not mean that the IPO Capital contravention becomes irrelevant to my assessment of the orders that should be made. The conduct to which I have just referred in connection with IPO Capital displays the same cavalier approach to establishing and running an investment business that Mr Mawhinney continued to exhibit in relation to the M Notes, including: Mr Mawhinney’s conduct in launching the M+ Notes first, and only following the launch obtaining legal advice on marketing materials second (see the Contravention Reasons at [209]); and Mr Mawhinney’s conduct in connection with the process surrounding the debt to equity swap (addressed in the Contravention Reasons at [95]–[129], [1133]), which displayed the same propensity to focus wholly on driving the business — getting in investors and purchasing property — while relegating to the backburner matters like ensuring the security structure supporting the M Core Notes actually complied with the promises made.

50    Mr Mawhinney’s submissions contend that the Court should infer Mr Mawhinney has been subject to significant adverse publicity through the course of this litigation, that has damaged his reputation. Mr Mawhinney submitted that this damage to his reputation “will severely limit his ability to conduct a financial services business into the future”. This was said to be a factor that the Court should weigh in mitigation. I do not see how any inferred exposure to adverse publicity and any assumed impact of that publicity on Mr Mawhinney’s capacity to conduct a financial services business is a matter that should be weighed as a mitigating factor. The Court’s orders are made having regard to the purpose of s 1101B and the risks exposed by the facts by which companies under Mr Mawhinney’s control contravened the Corporations Act and the ASIC Act. I do not regard the relative likelihood of Mr Mawhinney succeeding in any such future endeavours is a matter that affects the analysis of the orders that should be made. Although not a part of my reasoning on this point, I note that a significant number of individuals — apparently investors loyal to Mr Mawhinney — attended closing submissions in the trial in support of Mr Mawhinney. This casts doubt on his contention that he would likely have difficulty conducting a financial services business in the future in any event.

The terms and length of the restraint

51    Mr Mawhinney should be restrained from participating in the financial services industry in the manner proposed by ASIC (and previously ordered by this Court) for a further 15 years.

52    As set out above, the purpose of s 1101B is to uphold public confidence in the providers of financial products and financial services, which purpose may be served by preventing future misconduct where the risk of future misconduct is suggested by a history of past misconduct. I have concluded that the past misconduct, as set out in the Contravention Reasons, and Mr Mawhinney’s role in relation to that contravening conduct shows that there is an unacceptable risk that, unless restrained, Mr Mawhinney will re-enter the fray and conduct (most likely through corporate vehicles) a financial services business that:

(a)    adopts a financially reckless approach that exposes the investing public to significant risk of loss (eg as arose in the break-neck pace of property acquisitions in the Mission Beach area, the lack of cashflow planning, the inadequate security structure, and the “act first, paperwork second” approach that was adopted in relation to the debt to equity swap);

(b)    fails to disclose material risks to potential investors (eg as occurred in relation to the failure to disclose the Liquidity Prudency Policy Decision and the failure to disclose, in marketing material, that redemptions may be suspended in reliance on the terms of Deed Polls that were not routinely provided to potential investors); and

(c)    puts out misleading or deceptive marketing material (eg as occurred in relation to a substantial body of material marketing the M Notes and, for a time, the Australian Property Bonds).

53    As noted at paragraph 43 above, I acknowledged in the Contravention Reasons that Mr Mawhinney went to some effort to obtain legal advice on the marketing materials concerning the M Notes, and did not set out to run that aspect of the Mayfair Group’s business in a manner that contravened the governing legislation. Nevertheless, I do not consider that this suggests that Mr Mawhinney no longer poses a risk to the investing public. As I addressed in the Contravention Reasons, legal advice was, in some respects, obtained after the horse had bolted and products had been launched (the M+ Notes and the IPO Capital product), and in many respects was obtained without adequate instructions having been given to those advising (eg the basis upon which “advice” was said to have been received in relation to IPO Capital, and the apparent lack of instructions given to KHQ Lawyers regarding matters associated with the financial affairs of the Mayfair Group business which had a bearing on the adequacy of the marketing materials being disseminated in respect of the M Notes). In addition, the matters covered in the Contravention Reasons regarding advice that an AFSL was required for IPO Capital’s operations shows a willingness to disregard legal advice when it cut across a business objective. As such, I do not consider that the findings I made regarding Mr Mawhinney’s obtaining of legal advice suggest that he poses no material risk to the investing public, such that there should be no further (or a significantly shorter) restraint on Mr Mawhinney.

54    I turn now to a further aspect of the relief sought by ASIC: a restraint preventing Mr Mawhinney from removing or transferring any assets acquired directly or indirectly with funds received in connection with any financial product, including the M Notes and the Australian Property Bonds.

55    Although this aspect of the relief set out in ASIC’s Amended Originating Process was restated in ASIC’s submissions on relief, ASIC has not explicitly advanced any submissions as to why a restraint of this kind is warranted.

56    In the Contravention Reasons at [1188], I noted that ASIC had adduced evidence from Mr Meredith about the sum of funds received by Mr Mawhinney from Mayfair Group entities, but the evidence did not allow for any conclusions to be drawn regarding the extent to which those funds were referable to the financial products at issue. Further, I noted that Mr Mawhinney’s receipt of funds was raised by ASIC in its closing submissions as a point that goes to whether or not the orders sought would cause hardship to Mr Mawhinney.

57    I can see no proper basis for, or utility in, an order of the kind sought restraining Mr Mawhinney’s dealing with assets. There is nothing before me suggesting that proceedings are on foot, or foreshadowed, that would seek to recoup, for investors, any funds received by Mr Mawhinney (and in any event, any freezing order in connection with such proceedings ought to be pursued in the context of such proceedings). In addition, given the lack of evidence as to whether the funds identified by Mr Meredith may be traced such that they could properly be identified as having been “received in connection with any Financial Product”, an order of the kind in question would be difficult, if not impossible, to enforce. In addition, to the extent that the order sought is not confined to financial products that were the subject of the proceeding, there is no evident basis for any restraint to be imposed concerning how those funds may be dealt with. For these reasons, I decline to make an order of the kind sought.

Will the order “unfairly prejudice” Mr Mawhinney?

58    Section 1101B(1) expressly provides that the Court can only make an order under s 1101B(1) if it is “satisfied that the order would not unfairly prejudice any person”. The only person in respect of whom the question of prejudice has been raised is Mr Mawhinney. The question of unfair prejudice to Mr Mawhinney was raised by ASIC in making submissions that there would be no unfair prejudice should the orders for which it contends be made. Mr Mawhinney did not submit that the orders sought by ASIC should not be made on the basis that he would be unfairly prejudiced. Mr Mawhinney’s written closing submissions contended that “[t]he professional impact on Mr Mawhinney of being precluded, directly or indirectly, from dealing in financial products for substantially his entire working life is self-evident”. However, this consideration was said to go more broadly to the question of whether the orders sought by ASIC are appropriate, rather than raising any separate issue of unfair prejudice. Nevertheless, as s 1101B provides that the relevant orders can only be made if the Court is satisfied that they will not unfairly prejudice any person, I will consider the question of unfair prejudice to Mr Mawhinney.

59    I accept that the continuation of the restraints preventing Mr Mawhinney from re-entering the field of financial services prejudices him in the sense that it prevents him from pursuing a field of commercial endeavour that would, absent such restraints, be open to him, and which he wishes to pursue.

60    Section 1101B refers to prejudice that is unfair. It follows that the mere fact that the Court’s order will prejudice a person presents no barrier to that order being made if the Court determines that the prejudice is not unfair. In my view, and at least as the limit applies on the facts of this case, the question of whether the prejudice to Mr Mawhinney is unfair requires consideration of two matters: first, whether the prejudice is unfair having regard to the nature of the contraventions that enliven the s 1101B power, and Mr Mawhinney’s role in relation to those contraventions; and secondly, whether Mr Mawhinney’s personal circumstances are such that the order would work an unfair prejudice on him.

61    As to the first of those matters, as I set out in detail in the Contravention Reasons, Mr Mawhinney was the lynchpin of the Mayfair Group. He owned it, he controlled it, and he had a very “hands-on” role. The features of the contraventions, and the risks of further misconduct that they expose are otherwise covered in the foregoing parts of these reasons. I am satisfied that the order I propose to make does not “unfairly” prejudice Mr Mawhinney having regard to the nature of the contraventions and Mr Mawhinney’s role in them.

62    As to the second potential source of unfair prejudice — Mr Mawhinney’s personal circumstances — Mr Mawhinney elected not to give evidence of any personal circumstances which would lead the Court to conclude that the prejudice he will suffer is unfair. The Court has no information about Mr Mawhinney’s personal circumstances, beyond the evidence revealing that — at least during the period at issue — he had a fiancée. I have no evidence to suggest that Mr Mawhinney otherwise has no means of supporting himself and any dependents, or is otherwise unable to turn, if he has not already, to other fields of commercial endeavour. Evidence of matters concerning Mr Mawhinney’s personal circumstances was uniquely within his capacity to adduce, but he chose not to adduce any such evidence. Accordingly, I am satisfied that the order I propose to make does not unfairly prejudice Mr Mawhinney having regard to his personal circumstances.

Costs

63    ASIC has submitted that costs should follow the event, with Mr Mawhinney ordered to pay ASIC’s party and party costs of the proceeding.

64    Mr Mawhinney, on the other hand, has sought an opportunity to be heard on costs, “[o]nce the form of the final order is known”.

65    I have therefore determined that the parties be given an opportunity to put on written submissions on costs by 12 September 2025 (limited to 3 pages), with any responsive submissions made by 17 September 2025 (limited to 1.5 pages). Unless the parties wish to make, or the Court wishes to receive, oral submissions in relation to costs, costs will then be determined on the papers.

Associate:

Dated:    5 September 2025