Protecting Property Rights:

Six Bruce Pty Ltd's Legal Victory and the Equitable Right of Redemption

In a legal showdown that unfolded on the eve of an auction, Six Bruce Pty Ltd found itself facing off against Jadig Finance Pty Ltd. The central question at hand: Can you halt a property auction just before the gavel falls while preserving the equitable right of redemption?

The Background:

Picture this scenario: Six Bruce Pty Ltd, a property development company, had obtained a loan from Jadig Finance Pty Ltd, securing it with their property. However, when Six Bruce struggled to meet their loan obligations, Jadig took possession of the property and scheduled an auction for September 8, 2018.

The Night Before the Auction:

In a race against time, Six Bruce sought an urgent court injunction to stop the auction. Their argument was compelling: They had secured an unconditional offer to refinance the loan.

Understanding the Legal Aspect:

In legal terms, property owners with mortgages possess what’s known as the “equitable right of redemption.” This means they can pay off their debt or fulfill their obligations, even if they’ve missed payments, until the property is sold or a court orders otherwise.

The Court’s Deliberation:

To determine whether stopping the auction was justified, the court had to assess two key factors:

  1. Did Six Bruce present a strong case?
  2. Was there a genuine question regarding their right to pay off the debt?

While Six Bruce acknowledged their right of redemption, Jadig argued that Six Bruce couldn’t simply delay the property sale.

The Court’s Verdict:

In the end, the court ruled in favor of Six Bruce. They were granted a 30-day injunction, postponing the auction. The court’s reasoning included:

  • Six Bruce had provided sufficient evidence of securing unconditional refinance approval.
  • There was a valid question about whether Jadig’s actions amounted to unfair conduct, justifying equitable relief.

Jadig’s counterarguments, such as the timing of Six Bruce’s injunction request and concerns about the property’s future selling price, did not sway the court. They believed that delaying the auction was the appropriate course of action to protect Six Bruce’s rights.

The Key Takeaway:

This case underscores the fact that even in cases of loan default, property owners may obtain an interlocutory injunction to safeguard their equitable right of redemption. It demonstrates that such an injunction may be granted when there is sufficient equity in the property and an unconditional offer to refinance before the sale.

***Please note: Subsequent to this article, Jadig did proceed with the property auction on October 9, 2018.***

Disclaimer

The posts in this blog are published as general information only. They are not intended to nor do they constitute legal advice. HTW Legal Group strives at all times to provide users with accurate information but we do not guarantee that the information contained in this blog reflects accurately current law or procedure.

You should not act or refrain from acting in any matter based upon the information contained in this blog without first seeking the advice of a lawyer who practices in the area of law related to your matter. Do not hesitate to contact HTW Legal Group to make an appointment with one of our team of experienced lawyers to obtain advice tailored to your personal situation.