Military Road No 158 Pty Limited v Lion Pacific Projects (Neutral Bay) Pty Limited (Controller Appointed) (In liq)

In the Federal Court of Australia, Military Road No 158 Pty Limited, as the first plaintiff, and the Receiver and Manager of Lion Pacific Projects (Neutral Bay) Pty Limited, as the second plaintiff, applied for an injunction to prevent the third defendant from exercising its rights to sell the properties as the mortgagee in possession. The dispute arose from a call option agreement between the first and second defendants. The court had to decide whether an injunction should be granted to protect the equitable interest of the second plaintiff, which stemmed from the call option agreement, and whether this interest would be adequately protected if the properties were sold by the third defendant.

The legal issues before the court included whether the equitable interest of the second plaintiff would be adequately protected if the third defendant sold the properties as the mortgagee in possession. Additionally, the court needed to determine if the purchaser's offer to the caveator of the call option, which was in almost identical terms to the call option agreement, constituted adequate protection. The court had to balance the rights of the parties and consider the potential impact on the purchaser if the injunction was granted.

The court found that the equitable interest of the second plaintiff would not be adequately protected if the third defendant sold the properties. The purchaser's offer to the caveator of the call option, which was in almost identical terms to the call option agreement, did not constitute adequate protection. The court concluded that the second plaintiff's equitable interest would be compromised if the properties were sold by the third defendant. Consequently, the court granted the injunction, preventing the third defendant from exercising its rights to sell the properties as the mortgagee in possession.

The final orders of the court included granting an injunction to prevent the third defendant from selling the properties as the mortgagee in possession. The court also ordered that the injunction would remain in effect until the equitable interest of the second plaintiff was adequately protected. The court directed the parties to negotiate in good faith to reach an agreement that would adequately protect the second plaintiff's interest.