In this case Hamilton J considered an injunction application by a mortgagor to prevent the mortgagee proceeding with a power of sale.
Ground one – impending refinance
His Honour noted that:
As the matter has gone on, the possibility or immediacy of the plaintiff obtaining alternative finance has declined somewhat. The best that can now be said is that a decision as to whether BankWest, the proposed financier, is willing to make an offer of finance can now be expected in about 10 working days and that “the bank is not in a position to advise the likelihood of a positive outcome”.
His Honour then considered the rule in Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161 that payment of the amount outstanding under the mortgage is general requirement for injunctive relief to restrain an exercise of power of sale. His Honour noted that there had been proposals to modify the rule to allow injunctions where a refinance was imminent and that there had been obiter support for the proposition voiced in the Court of Appeal in Notaras v Sly & Weigall  NSWCA 235 at . His Honour nevertheless came down on the side of judicial conservatism stating:
Whilst a Judge of this Court must always pay adequate attention and give adequate respect to statements of the Court of Appeal, I have some doubt as to whether what is said in Notaras is an adequate basis to depart from a principle, which, although it may in some ways be regarded as harsh, has had long acceptance in Courts of Equity.
His Honour buttressed his respect for stare decisis with personal approbation noting:
It should be added that, in so far as it may be thought to operate harshly in some circumstances against mortgagors who have immediate and real prospects of re-financing, on the other hand it must be borne in mind that there is a very considerable public interest in not fettering in any undue way the rights and manner of exercise of a mortgagor’s power of sale, because of the effect that this might have of unsettling the finance market and discouraging persons, natural and corporate, from lending in that market, which is critical to the conduct of business in this as in other countries.
Ultimately His Honour found he did not need to decide between the tests on the current facts:
As it turns out, I do not have to give my resolution of this dilemma in the present case. The reason for that is that, even if the more liberal test is adopted, there are two deficiencies in the evidence which the plaintiff has brought forward. The first is a lack of sufficient certainty as to whether or not Bank West is even going to make a refinancing offer. The second is that, whether it be thought that offer might, if and when it comes, will be in the sum of $23 million or $22 million, it will not, on the evidence, provide enough money to pay out the mortgage, even on the lower interest calculation which has been put forward.
Ground two – unconscionability
The test on unconscionability which His Honour applied was that formulated by Jacobs J in Australia and New Zealand Banking Group Limited v Bangadilly Pastoral Commercial Limited (1978) 139 CLR 195 at 201 being:
In my opinion the trial judge placed too much emphasis on a need for conscious planning, deceptiveness, collusion and underhand exercise of the power before he felt himself able to find that the sale lacked bona fides. It is true that bona fides in this connexion is not concerned with the motive for exercising the power of sale but, once the decision to sell has been made, it is concerned with a genuine primary desire to obtain for the mortgaged property the best price obtainable consistently with the right of a mortgagee to realize his security. At the same time the mortgagee is concerned with his own interests and not with the interests of the mortgagor or subsequent incumbrancers, and therefore a wide latitude has been allowed to him in his manner of exercising his power of sale. However, when there is a possible conflict between that desire and a desire that an associate should obtain the best possible bargain the facts must show that the desire to obtain the best price was given absolute preference over any desire that an associate should obtain a good bargain.
Upon being challenged counsel for the mortgagor conceded it was not alleged that the mortgagee was at present engaged in any conduct which would be a breach of its duty. His Honour accepting this noted:
I should add, however, that, on all the material available to me, I could not find that the mortgagee was threatening at the present time to sell the property at an undervalue. In this regard I should say at once, bearing in mind what was said by Jacobs J as quoted above, that the mortgagee was not under any duty to undergo additional risks and delay in selling the property otherwise than in one line, in order to maximise price, particularly if that involved, as it would in some of the circumstances advocated by the mortgagor, expenditure of considerable moneys by the mortgagee to carry out that process.
Ground three – obligation to provide information on sale
His Honour adopted the formulation of Aickin J in Australia and New Zealand Banking Group Limited v Bangadilly Pastoral Commercial Limited (1978) 139 CLR 195 at 201:
It is no doubt true that a mortgagee is not normally under a specific obligation to inform the mortgagor, or those known to be claiming under him, of a proposed sale, apart from the general notice of default which is a prerequisite to exercise of the power of sale. Nonetheless failure to inform the mortgagor and persons known to be claiming under him may be a relevant matter.
That may be different in a case where, in the circumstances, the withholding of that information by itself or with other facts can be characterised as showing unconscionable conduct on the part of the mortgagee, perhaps, as in Bangadilly, in a case where evidence establishes that the mortgagee is colluding in some improper way with a prospective purchaser.
In my view there is no evidence in this case to deflect the general principle. It must also be borne in mind that the fact that a contract for sale has been entered into will, if the transaction be an improper one, not impede the mortgagor from seeking to have that transaction set aside by a Court of Equity.
That leads me to the last consideration. If there were any suggestion that the non communication of the fact and terms of a sale might, whether intentionally or not, impede a mortgagor in making an application to set aside a sale entered into or delay that application for a time disadvantageous to the mortgagor, then it may be that there should be injunctive relief to compel the prompt revelation of the contract.