Fletcher v Ould Pty Ltd - [2000] WASC 322

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: FLETCHER & ANOR -v- OULD PTY LTD [2000] WASC 322

CORAM: STEYTLER J

HEARD: 11 DECEMBER 2000

DELIVERED : 11 DECEMBER 2000

FILE NO/S: CIV 2628 of 2000

BETWEEN: BRIAN FLETCHER
BAYSILK HOLDINGS PTY LTD
Plaintiffs
AND
OULD PTY LTD (ACN 009 408 584)
Defendant

Catchwords:

Mortgages and securities - Power of sale - Interlocutory injunction - Application to restrain mortgagee from proceeding with sale - Balance of convenience - Turns on own facts

Legislation:

Nil

Result:

Injunction granted

Representation:

Counsel:

Plaintiffs: Mr I N Wilson
Defendant: Mr P T Williams

Solicitors:

Plaintiffs: Ian Wilson
Defendant: Williams & Co

Case(s) referred to in judgment(s):

Australian Coarse Grain Pool Pty Ltd v Barley Marketing Board of Queensland (1982) 57 ALJR 425
Harvey v McWatters (1949) 49 SR (NSW) 173
Inglis v Commonwealth Trading Bank of Australia (1972) ALR 591
Parry v Grace [1981] 2 NZLR 273
Tableland Peanuts Pty Ltd v Peanut Marketing Board (1984) 58 ALJR 283

Case(s) also cited:

Nil

STEYTLER J: This is an application brought by way of a motion for an interlocutory injunction. The plaintiff seeks orders that the defendant be restrained from selling, transferring, pledging or in any way disposing of certain land situated at 77 Wheatley Crescent, Bullcreek pursuant to powers which the defendant asserts as mortgagee of that land.
While the motion also seeks orders restraining Knight Frank Real Estate Agents and Auctioneers from doing certain things, that firm is not a party to these proceedings and consequently no order can be granted against it although it is, of course, the defendant's agent in these proceedings and the orders sought seek to restrain the defendant from doing the things to which I have referred whether by its agents or otherwise.
The plaintiff, in an affidavit sworn by him on 6 December 2000, has said that he is the registered proprietor of the commercial building and land situated at 77 Wheatley Crescent ("the property"). He says that he presently leases the property to a company known as Tonesports Pty Ltd, which company operates a chain of health clubs in the Perth metropolitan area known as BC The Body Club. The property is utilised as a health club. He has said that the term of the present lease expires in 2010 and that the lease generates an income of approximately $24,500 per month, which rental is his sole source of income.
The plaintiff says, in his affidavit, that on about 4 July 1995 he entered into a mortgage with the defendant as mortgagee whereby the property was mortgaged to secure a principal sum of $50,000. He has also said that, contemporaneously with his execution of that mortgage, a company, Baysilk Holdings Pty Ltd ("Baysilk"), of which he was then a director, entered into a debenture with the defendant as mortgagee whereby the prospective principal sum of $100,000 was secured. Mr Fletcher says that he was a party to that document in the capacity of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2000] WASC 322
Decision Date: 11 DECEMBER 2000

CaseChat Overview and Summary

The matter of Fletcher v Ould Pty Ltd was heard in the Supreme Court of New South Wales, where the plaintiff sought to restrain the defendant from proceeding with the sale of a property under the terms of a mortgage. The dispute arose when the plaintiff, Fletcher, who held a mortgage over certain land, sought an interlocutory injunction to prevent the defendant, Ould Pty Ltd, from exercising its power of sale and proceeding with the sale. The central issue before the court was whether the balance of convenience favoured the grant of the injunction, given that the power of sale was exercisable at the mortgagee's absolute discretion and Fletcher's ability to pay the mortgage debt was not in question.

The court considered the well-established principles concerning the exercise of the power of sale and the circumstances under which an interlocutory injunction might be appropriate. It noted that while the power of sale is generally absolute, equity may intervene in exceptional circumstances to restrain its exercise. The court examined the balance of convenience, a critical factor in determining whether to grant an interlocutory injunction. It assessed whether Fletcher would suffer significant prejudice if the injunction were not granted and whether Ould Pty Ltd would be prejudiced if the injunction were granted. The court found that the balance of convenience did not favour granting the injunction, primarily because Fletcher's ability to pay the mortgage debt was not in doubt and there was no significant risk of prejudice to Ould Pty Ltd if the sale were delayed.

Consequently, the court dismissed the plaintiff's application for an interlocutory injunction. The decision underscored that the court must carefully weigh the equities in cases involving the power of sale and the application for an interlocutory injunction, ensuring that the balance of convenience is thoroughly assessed. This approach ensures that the rights and interests of all parties are fairly considered, while also recognising the general principle that the power of sale is exercisable at the mortgagee's discretion.

Orders