541 Kent Street Pty Ltd, HMP Finance Pty Ltd, 191 Cleveland Street Pty Ltd & Clarence Street Properties Pty Ltd v Westpac Banking Corporation and John Raymond Gibbons [2002] NSWSC 147

541 Kent Street Pty Ltd, HMP Finance Pty Ltd, 191 Cleveland Street Pty Ltd & Clarence Street Properties Pty Ltd v Westpac Banking Corporation and John Raymond Gibbons [2002] NSWSC 147

The plaintiffs failed to establish a sufficient basis for interlocutory relief because the evidence showed that misleading or incorrect information had been provided to the Bank and that default events had occurred under the HMP security and the General Conditions. The plaintiffs' construction limiting the Bank to suing on warranties was artificial and commercially unrealistic. The Court was not satisfied that there was a serious issue to be tried that the Bank lacked power or acted capriciously, in bad faith or for an ulterior purpose. In any event, the balance of convenience favoured continuation of the receiver's appointment and damages would be an adequate remedy if the appointment...

Jurisdiction
Australia
Judgment Date
01 March 2002
Procedural Posture
Interlocutory Application to Remove or Restrain Receiver / Application for Interlocutory Relief
Outcome
Application for interlocutory relief dismissed with costs.
Legal Topics
['appointment of Receiver' 'removal or Restraint of Receiver' 'default Event Under Loan Securities' 'misleading or Incorrect Information to Lender' 'implied Duty of Good Faith' 'unconscionability' 'balance of Convenience']
['equity' 'corporations Law' 'banking and Finance' 'receivership' 'contract Law'] ['appointment of Receiver' 'removal or Restraint of Receiver' 'default Event Under Loan Securities' 'misleading or Incorrect Information to Lender' 'implied Duty of Good Faith' 'unconscionability' 'balance of Convenience']

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Procedural Posture

Interlocutory Application to Remove or Restrain Receiver / Application for Interlocutory Relief

Legal Issues

  1. 1 ["Whether the Bank had power under the securities and General Conditions to appoint a receiver to the plaintiffs' properties." 'Whether misleading or incorrect information and non-disclosure of trustee status constituted default events permitting appointment of a receiver.' 'Whether the Bank breached an implied duty of good faith or acted capriciously or unconscionably in appointing the receiver.' 'Whether interlocutory relief should be granted by removing or restraining the receiver, including for a proposed 60 day refinancing period.' 'Whether the balance of convenience favoured removal of the receiver or continuation of the appointment.']

Ratio Decidendi

The plaintiffs failed to establish a sufficient basis for interlocutory relief because the evidence showed that misleading or incorrect information had been provided to the Bank and that default events had occurred under the HMP security and the General Conditions. The plaintiffs' construction limiting the Bank to suing on warranties was artificial and commercially unrealistic. The Court was not satisfied that there was a serious issue to be tried that the Bank lacked power or acted capriciously, in bad faith or for an ulterior purpose. In any event, the balance of convenience favoured continuation of the receiver's appointment and damages would be an adequate remedy if the appointment...

Court Disposition

Application for interlocutory relief dismissed with costs.

Orders

  • ['The application for interlocutory relief brought by the plaintiffs is dismissed.' "The plaintiffs are to pay the defendants' costs of the application." 'By consent the matter is adjourned to 11am before the Registrar on Monday 4 March 2002 for further directions.']