Permanent Custodians Limited v McMahon

Permanent Custodians Limited applied for an interlocutory injunction against McMahon to prevent the latter from proceeding with the auction of certain properties. The dispute arose under a registered mortgage, and the primary issue before the court was whether McMahon was required to undergo a new mediation pursuant to the Farm Debt Mediation Act 1994 before proceeding with the auction. The court had to determine whether the need for new mediation was a real question to be determined. McMahon argued that the previous default had been resolved by mediation, and thus, a new mediation was unnecessary. However, Permanent Custodians Limited contended that the matter was still subject to the Act and required fresh mediation.

The court considered the nature of the relief sought and the potential prejudice to both parties if the injunction was granted or denied. It was noted that the Farm Debt Mediation Act 1994 imposed a mandatory mediation requirement before a mortgagee could proceed with an auction. The court held that the need for new mediation was indeed a real question to be determined, as it involved statutory interpretation and the application of the Act. The court was satisfied that the applicant had made out a strong case for interlocutory relief and that the balance of convenience favoured granting the injunction to prevent the auction from proceeding until the mediation issue was resolved.

Accordingly, the court granted the interlocutory injunction to restrain McMahon from proceeding with the auction of the properties until the question of whether new mediation was required was determined. The court emphasised that this decision was interlocutory and did not determine the substantive merits of the case. The final orders were that McMahon was restrained from proceeding with the auction of the properties until the mediation issue was resolved, and the matter was listed for further directions.