Ocean Line v Macquarie Bank

In the case of Ocean Line (Aust) Pty Ltd v Macquarie Bank Limited, the Supreme Court of Queensland was asked to determine the rights of the parties following the termination of a lease by the respondent, who was the mortgagee of the landlord. The applicant, Ocean Line, was a tenant under a five-year lease for a business selling household and novelty items. The respondent, Macquarie Bank, was the mortgagee of the landlord, who had defaulted on their mortgage obligations. Consequently, the respondent, as attorney for the landlord, took over the collection of rent. On May 17, 1996, the respondent changed the locks on the premises, alleging a breach of the obligation to pay rent and outgoings, and refused to allow the applicant to remove their stock from the premises.

The legal issues the court needed to address included whether the respondent, as the mortgagee, had the right to retain the applicant's stock under the lease terms or otherwise, and whether the applicant was entitled to an injunction to recover possession of the stock. The lease contained clauses that stipulated the applicant's obligation to remove all movable property immediately upon termination and the respondent's right to elect ownership of the goods if the applicant failed to remove them. The court interpreted these clauses as sequential, requiring an act of neglect by the applicant to trigger the respondent's rights. Given the evidence that the applicant was excluded from the premises and thus unable to remove the stock, the court concluded that the applicant had not failed to remove the goods. The court also found that the respondent had no right to retain the goods as security for payment of rent, as the statutory provisions allowing distress for rent had been repealed.

The court denied the applicant's application for summary judgment, as the affidavit did not adequately verify the facts and state the deponent's belief that there was no defence to the claim. However, the court granted the applicant's motion for a mandatory injunction, ordering the respondent to deliver up possession of the applicant's chattels, allowing the applicant access to remove the goods by a specified date. The court found that the applicant had demonstrated a strong likelihood of success at trial and that the issue of damages was not a bar to granting the injunction. The final order required the respondent to deliver up the applicant's chattels, granting the applicant necessary access to remove the goods, with costs awarded to the applicant.