Terry Clark and Associates Pty Ltd v Carez Nominees Pty Ltd and Andrew Ryrie Campbell No. SCGRG 93/1802 Judgment No. 4552 Number of Pages 7 Injunctions Interlocutory Injunctions (1994) 13 Acsr 314

In the Supreme Court of South Australia, Terry Clark and Associates Pty Ltd, the plaintiff, sought an injunction to prevent the defendants, Carez Nominees Pty Ltd and Andrew Ryrie Campbell, from enforcing a receivership over the plaintiff's assets. The dispute arose from a mortgage and guarantee agreements related to debts owed by the plaintiff to the Commonwealth Bank, which had been assigned to Carez. The plaintiff argued that the appointment of a receiver by Carez was made in bad faith and was invalid. The court was tasked with determining whether there was an arguable case for the invalidity of the receiver's appointment based on bad faith and whether the balance of convenience favored granting the interlocutory injunction.

The court examined the legal arguments regarding the existence of a duty of good faith in the context of mortgagee's rights and the enforcement of security. The plaintiff argued that fiduciary obligations and the relationship between the parties imposed a duty of good faith, while the defendants contended that such a duty did not apply to the decision to exercise mortgagee's rights. The court found that the contention regarding the existence of a duty of good faith was seriously debatable and that there were sufficient evidentiary materials to raise serious questions about the defendants' motives. Additionally, the court concluded that the balance of convenience favored maintaining the status quo to prevent the ruin of the plaintiff's business.

The court allowed the appeal against the first interlocutory order and substituted a new order that restrained the defendants from taking further action in appointing a receiver and from acting as such, pending the trial. The court also allowed the plaintiff's appeal against the second order, substituting it with an order similar to the first. The injunctions were to be conditional on the usual undertaking as to damages. The court declined to impose a condition that the plaintiff pay the alleged debt into court.