A company director banned from soliciting funds for two decades has been ordered to face a fresh trial after the original ban was overturned.
James Mawhinney was restrained by a Federal Court judge last year from advertising and soliciting funds for financial products after his company Mayfair 101 Group was found to have misled or deceived customers over debenture products.
Mayfair 101 was fined $30 million for misleadingly or deceptively advertising income notes as being fully secured products comparable to bank term deposits.
It was found the company claimed the notes carried no risk of default and would be repaid in full on maturity, neither of which was true.
But on appeal, it was found Mr Mawhinney was denied procedural fairness because the judge who banned him didn't find in favour of the case that the Australian Securities and Investments Commission had incorrectly argued at trial.
Instead the primary judge decided to ban Mr Mawhinney on the basis of an entirely separate legal case, which was not argued by ASIC as well as disavowed by the regulator.
"The making of the restraining order based on the other case, never put and disavowed, involves a fundamental denial of procedural fairness to Mr Mawhinney," three appeal judges said.
"The primary judge's orders cannot stand."
They ordered that the case go back before a new judge for re-hearing.
Such an order would be futile if ASIC was bound by the case it ran before the original judge, but they said in this "exceptional case" ASIC was not bound by that case.
While Mr Mawhinney was successful in his appeal on the procedural fairness ground, the court found he should be responsible for his own costs because of 28 other appeal grounds he had argued.
"ASIC and the court ought not to have been vexed otherwise by so many spurious appeal grounds," the judges said.
Among the grounds were allegations of incompetence by lawyers who had acted for him.
Those allegations involved a failure to accept applicable principles and circumstances of the hearing, the judges said.
Mr Mawhinney was also ordered to pay the legal costs of those lawyers.