Commonwealth Bank of Australia v IInvest Pty Limited (in liquidation) (No 9)

In the matter of Commonwealth Bank of Australia v IInvest Pty Limited (in liquidation), the Commonwealth Bank sought possession of rural properties from IInvest, which was in liquidation. The bank claimed that IInvest had defaulted on its obligations under a finance agreement, which was secured by a mortgage over the properties. The bank argued that the absence of financial default was irrelevant, and that the company's winding up triggered the bank's right to enforce its security. IInvest, in turn, cross-claimed for breach of a guarantee agreement and claimed that the bank had acted improperly by not providing a default notice and by seeking to realise security without a financial default.

The court had to determine whether the bank's enforcement action was lawful, whether there was a default under the finance agreement, and whether the bank was entitled to possession of the properties. The court also had to consider the effect of the guarantee agreement, the bank's discretion to loan funds, and the maximum liability of the guarantor. Additionally, the court had to examine the applicability of the Farm Debt Mediation Act 1994 (NSW) and whether the bank had breached any terms of the heads of agreement.

The court found that the bank was entitled to enforce its security and to take possession of the properties, as the company's winding up constituted a default under the finance agreement. The court held that the absence of financial default was irrelevant, and that the bank had the discretion to refuse to loan further funds if the borrowers' financial position had changed. The court also found that the bank's right to realise security was engaged, and that the guarantee agreement was valid and enforceable. The court held that the bank had not breached any terms of the heads of agreement, and that the Farm Debt Mediation Act 1994 (NSW) did not apply to the enforcement action.

The court ordered that IInvest pay the amount due and payable under the finance agreement, and that the bank take possession of the rural properties. The court also dismissed IInvest's cross-claim for breach of the guarantee agreement. The court held that the bank was entitled to enforce its security and to take possession of the properties, and that the guarantee agreement was valid and enforceable. The court found that the bank had not acted improperly by not providing a default notice, and that the absence of financial default was irrelevant to the bank's right to enforce its security.