El-Saafin v Franek

The case of El-Saafin v Franek involved a dispute between the mortgagee and the mortgagor, where the former sought to exercise their power of sale over the latter's property. The court was tasked with determining the principles that should be applied when granting an interlocutory injunction against the exercise of such power. The mortgagor had argued that the mortgagee was seeking to enforce a power of sale that was not in line with the terms of the mortgage, and that the mortgagee had acted in bad faith.

The primary legal issue before the court was whether the 'general rule' established in Inglis v Commonwealth Trading Bank of Australia should be applied in all cases where an interlocutory injunction is sought to prevent the exercise of a mortgagee's power of sale. The mortgagor argued that the rule should not be applied in cases where there was evidence of bad faith or where the mortgagee had acted in a manner inconsistent with the terms of the mortgage. The mortgagee, on the other hand, argued that the rule should be applied regardless of the circumstances.

The court held that the 'general rule' in Inglis v Commonwealth Trading Bank of Australia should not be applied in all cases where an interlocutory injunction is sought to prevent the exercise of a mortgagee's power of sale. The court found that the circumstances of each case must be considered, and that the principles of serious question to be tried and balance of convenience should be applied. The court found that there was a serious question to be tried in this case, and that the balance of convenience favoured granting the injunction. The court held that the mortgagee had acted in bad faith, and that the power of sale was not in line with the terms of the mortgage. The court granted the interlocutory injunction, preventing the mortgagee from exercising their power of sale.

The court's decision in El-Saafin v Franek provides guidance to mortgagees and mortgagors in relation to the principles that should be applied when seeking or opposing an interlocutory injunction against the exercise of a mortgagee's power of sale. The decision highlights the importance of considering the circumstances of each case, and of applying the principles of serious question to be tried and balance of convenience. The decision also serves as a reminder that bad faith or actions inconsistent with the terms of the mortgage may be relevant factors in determining whether an interlocutory injunction should be granted.