North v Marra Developments Ltd [1981] HCA 68

North v Marra Developments Ltd [1981] HCA 68

The underlying agreement between the appellants and Marra Developments Ltd. was illegal, as its performance contravened s. 70 of the Securities Industry Act 1970 (NSW) by artificially supporting the market price of Marra shares for the purposes of a takeover scheme, creating a misleading appearance of the market price; the appellants' conduct also involved fraudulent and misleading statements, invalidating their claim under both statute and common law. Recovery for remuneration is barred where performance involves illegality.

Jurisdiction
Australia
Procedural Posture
Appeal / Final Judgment
Outcome
Appeal dismissed with costs.
Legal Topics
['illegality of Contract' 'market Manipulation' 'fraudulent Conduct' 'breach of Statutory Provisions']
['contract Law' 'securities Law' 'common Law Illegality'] ['illegality of Contract' 'market Manipulation' 'fraudulent Conduct' 'breach of Statutory Provisions']

Case Brief

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Procedural Posture

Appeal / Final Judgment

Legal Issues

  1. 1 ['Whether the agreement for remuneration was illegal under s. 70 of the Securities Industry Act 1970 (NSW)' "Whether the appellants' conduct constituted common law fraud and/or statutory contravention" 'Whether remuneration can be recovered when the contract performance involved illegality']

Ratio Decidendi

The underlying agreement between the appellants and Marra Developments Ltd. was illegal, as its performance contravened s. 70 of the Securities Industry Act 1970 (NSW) by artificially supporting the market price of Marra shares for the purposes of a takeover scheme, creating a misleading appearance of the market price; the appellants' conduct also involved fraudulent and misleading statements, invalidating their claim under both statute and common law. Recovery for remuneration is barred where performance involves illegality.

Court Disposition

Appeal dismissed with costs.

Orders

  • ['Appeal dismissed with costs.']