Harvey v Perpetual Nominees [2009] NSWSC 1379

This involved a mortgage for $1.8 million on an interest only basis secured on a hotel. Receivers were called in after interest payments were missed. The receiver sold the property at auction for $1.3 million in October 2009. Subsequently the borrower sought an injunction to restrain the completion of the sale on the grounds that it had a refinance pending. For good measure the borrower alleged a breach of the mortgagee’s duties in conducting the sale to obtain the proper market price. The court found the evidence that the sale had been conducted improperly to be “thin”. The court also noted that there was no conclusive evidence the borrower was in a position to refinance. The court was particularly concerned that a bone fide purchaser was now involved and that a failure to complete the sale could result in damages being incurred by the lender. Moreover, there was no evidence that the borrower’s undertaking as to damages was worth anything. Accordingly, the court refused the injunction.

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