Application for Funds from Mortgagee Sale Dismissed

The Court of Appeal dismissed an application by the claimant for the release of funds from a mortgagee sale to fund an appeal, finding that the claimant failed to demonstrate a serious question to be tried and that damages would be an adequate remedy.

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: [NAME] v [COMPANY] [2013] NSWCA 68 Hearing dates: 25 March 2013 Decision date: 25 March 2013 Before: Ward JA Decision: Application dismissed [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Catchwords: EQUITY - interlocutory mandatory injunction - application for monies from proceeds of mortgagee sale to be paid out of court Category: Interlocutory applications Parties: [NAME] (First Appellant) [NAME] (Second Appellant) [COMPANY] (Respondent) Representation: Counsel: [redacted] Solicitors: [redacted]

First Appellant in person (also representing Second Appellant) File Number(s): 12/284440 Decision under appeal Citation: [COMPANY] of Queensland Ltd v Heritage Village Estate Pty Ltd [2012] NSWSC 925 Date of Decision: 2012-10-02 00:00:00 Before: Stevenson J File Number(s): 09/295047

Judgment (ex tempore) 1HER HONOUR: This is an application brought by notice of motion filed on 15 February 2013 by the appellants ([NAME] and his wife [NAME]) against the [COMPANY]. Parts of that motion have already been dealt with. The remaining parts are the orders sought in paragraphs 3 and 4. Paragraph 4 sought an order for the filing of the notice of motion on behalf of [NAME] and for leave for [NAME] to appear on his wife's behalf on this application. I have granted that leave. It was not opposed by the [COMPANY]. 2Order 3 is an order that the balance of funds held by the [COMPANY] from the sale of a property referred to as the Nulkaba property be released to the appellants to fund their appeal. The basis on which [NAME] seeks that application is that it is said that that [COMPANY] consented to the sale of the particular lot in the Nulkaba property on the basis that the entire purchase price would be required to discharge the mortgage over the property and that in fact there was a surplus over the amount required in order to discharge the amount owing in respect of Lot 3 of the property and that the [COMPANY] should have refunded that amount. 3Reference was made to orders that had been made on 21 August 2012 by the primary judge, the operation of which had been stayed until 24 October 2012 and it was noted that the settlement of Lot 3 of the Nulkaba property had taken place at a time when the stay was operative. Those orders do not directly address the situation in relation to the sale by consent of Lot 3 in the Nulkaba property although as I understand it, what is contended by [NAME] is that if the orders for rectification of the security documents were not made or if his appeal from the making of those orders were to be successful, then there would not be a basis for the [COMPANY] to rely upon the mortgage over Lot 3 of the Nulkaba property as security for amounts outstanding under other facilities. 4The [COMPANY]'s position is that the moneys have been applied to discharge a facility in respect of which the property had been put forward as security for a guarantee by [NAME] and that there are no funds left to be released to the appellants. The application is in the nature of an application for a mandatory injunction to require the [COMPANY] to pay certain moneys to the appellants. The circumstances in which mandatory injunctions will be granted on an interlocutory basis are limited. It is necessary for the appellants to establish that there is a serious question to be tried as to their entitlement to the moneys, that damages would be an inadequate remedy and that the balance of convenience would lie in favour of the making of an order for the release of the funds. 5There is clearly a dispute between the parties in relation to the entitlement of the [COMPANY] to exercise rights under a guarantee given by [NAME] over properties that were it says put forward by way of security for a commercial facility entered into by [NAME]. There are issues as to whether the [COMPANY] is in breach of the arrangements under which the commercial facility was given. Those matters are the subject of appeal from the judgment of Stevenson J. 6It seems to me that in circumstances where there is a dispute between the parties as to the entitlement to the funds and the effect of an order requiring the payment out of the funds to the appellants would be, in effect, to prejudge the issue as to the security because of the unlikelihood or difficulty as to whether those moneys would be refundable or able to be repaid if the appeal were to be unsuccessful. It is not appropriate to make an order for the payment out of the moneys on an interlocutory basis and I therefore dismiss the application for an order of that kind.

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