Military Road No 158 Pty Limited v Lion Pacific Projects (Neutral Bay) Pty Limited (Controller Appointed) (In liq) [2013] NSWSC 1545

Military Road No 158 Pty Limited v Lion Pacific Projects (Neutral Bay) Pty Limited (Controller Appointed) (In liq) [2013] NSWSC 1545

The second plaintiff has an arguable case that its equitable interest under the call option can be protected, but the balance of convenience favours allowing the mortgagee to proceed with the sale, as the Bank and purchaser have offered practical protections (replacement option deed and ability to relodge caveat) that maintain the status quo and can compensate the second plaintiff in damages if needed, making injunctive relief inappropriate.

Parties
First Plaintiff/cross Defendant: Military Road No. 158 Pty Limited; Second Plaintiff: Military Road 158P Pty Limited; First Defendant: Lion Pacific Projects (Neutral Bay) Pty Limited (Controller appointed) (in liq); Second Defendant: Neutral Bay Project Pty Limited (Controller appointed) (in liquidation); Third Defendant/cross Claimant: ING Bank (Australia) Limited
Jurisdiction
Australia
Judgment Date
18 October 2013
Procedural Posture
Interlocutory Application / Injunction Application – Equity Division Duty List
Outcome
Injunction refused.
Legal Topics
Injunctions, Caveats, Mortgagee's Power of Sale, Equitable Interests, Call Options, Priority of Interests
Equity Property Law Injunctions Caveats Mortgagee's Power of Sale Equitable Interests Call Options Priority of Interests

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Parties

Military Road No. 158 Pty Limited

First Plaintiff/cross Defendant

Military Road 158P Pty Limited

Second Plaintiff

Lion Pacific Projects (Neutral Bay) Pty Limited (Controller appointed) (in liq)

First Defendant

Neutral Bay Project Pty Limited (Controller appointed) (in liquidation)

Second Defendant

ING Bank (Australia) Limited

Third Defendant/cross Claimant

Procedural Posture

Interlocutory Application / Injunction Application – Equity Division Duty List

Legal Issues

  1. 1 Whether the second plaintiff’s equitable interest under a call option deed can prevent a mortgagee in possession from selling the properties
  2. 2 Whether the call option can be assigned
  3. 3 Whether the mortgagee’s consent to the call option limits its rights to enforce its mortgage and sell the properties

Ratio Decidendi

The second plaintiff has an arguable case that its equitable interest under the call option can be protected, but the balance of convenience favours allowing the mortgagee to proceed with the sale, as the Bank and purchaser have offered practical protections (replacement option deed and ability to relodge caveat) that maintain the status quo and can compensate the second plaintiff in damages if needed, making injunctive relief inappropriate.

Court Disposition

Injunction refused.

Orders

  • Second plaintiff to withdraw the caveat on the properties, with leave to lodge a caveat in the same terms immediately following completion of the sale.