North v Marra Developments Ltd [1981] HCA 68

High Court of Australia Stephen, Mason, Murphy, Aickin and Wilson JJ. North v Marra Developments Ltd [1981] HCA 68

ORDER Appeal dismissed with costs.

Cur. adv. vult.

The following written judgments were delivered:—

Dec. 9 Stephen and Aickin JJ.

We have both had the advantage of reading the reasons for judgment in this appeal prepared by our brother Mason. We agree with his reasons for concluding that the proposals recommended by the appellants and carried out by them and the respondent with respect to the sale and purchase on the Stock Exchange of shares in the respondent were illegal. The agreement to carry out the scheme, and the carrying out of the scheme itself, involved illegality in that the conduct in question was contrary to s. 70 of the Securities Industry Act 1970 N.S.W. and constituted an offence under that section. The consequence is that the amounts now claimed cannot be recovered.

We are with respect unable to agree that the conduct of the parties constituted a conspiracy to deceive. There was, however, a common law conspiracy involved in the agreement to engage in conduct constituting an offence contrary to s. 70 of the Securities Industry Act.

In the result therefore we are of opinion that the appeal should be dismissed.

Mason J.

The appellants are members of a stockbroking firm, a member of the Sydney Stock Exchange Ltd., which formerly carried on business under the firm name of "J. & J. North" but which now trades as "Norths". They sued the respondent Marra Developments Ltd. ("Marra") for the balance of remuneration due to them in connexion with services rendered as advisers in relation to a reorganization of the capital of Marra and its takeover of another company Scottish Australia Holdings Ltd. ("Scottish"), together with interest. The action was dismissed in the Supreme Court of New South Wales, Meares J. upholding a defence of illegality based on a breach of the provisions of s. 70 of the Securities Industry Act 1970 N.S.W. ("the Act") (since repealed and replaced by the Securities Industry Act 1975 N.S.W.) [1] . An appeal from this decision was dismissed by the Court of Appeal [2] . From that dismissal an appeal is now brought to this Court.