Inetstore Corporation Pty Ltd (in liq) v Southern Matrix International Pty Ltd

The matter before the court involved the liquidators of Inetstore Corporation Pty Ltd seeking to assert a lien for their fees over the assets of the company. The dispute arose against Southern Matrix International Pty Ltd, which held a secured interest over the same assets. The court was tasked with determining the priority of the liquidator's lien over the rights of the secured creditor and whether the liquidator or the secured creditor had the superior right to sell the assets. The case before the court was about the interplay between corporate law, equity, and the principles governing liens and equitable charges.

The primary legal issues were whether the liquidator's lien for fees had priority over the rights of the secured creditor and whether the liquidator or the secured creditor had the superior right to sell the assets subject to the security. The court also needed to consider the equitable principles that govern the priority of liens and charges and the circumstances in which an interlocutory injunction could be granted. The balance of convenience test and the adequacy of damages as a remedy were central to the court's decision on the interlocutory injunction.

The court held that the liquidator's lien for fees did not have priority over the rights of the secured creditor. The court found that the liquidator's lien was subject to the equitable charge held by the secured creditor. This meant that the secured creditor's interest in the assets took precedence. The court further determined that the balance of convenience favoured granting an interlocutory injunction to the secured creditor, as the strength of their case and the potential for irreparable harm outweighed the liquidator's claim. The court found that damages were not an adequate remedy in this context, reinforcing the need for the injunction to protect the secured creditor's interests.

The court granted the interlocutory injunction to the secured creditor, allowing them to proceed with selling the assets subject to their equitable charge. This decision effectively prioritised the secured creditor's rights over those of the liquidator in respect of the assets in question.