The application for summary judgment applied in terms to the entire relief claimed by the plaintiffs, but the Master was informed that the plaintiffs sought summary judgment only in respect of the claim for possession. The refusal of the application together with the stay of the proceedings pending disposal of the 1995 action, therefore, have the same effect as an injunction restraining enforcement of the mortgage. The principles governing the grant of an interlocutory injunction should therefore govern the decision of this case. It having been determined that there are serious issues to be tried as to the validity of the mortgages which would provide a defence to the present action, it is necessary to consider whether on the balance of convenience the mortgagees should be prevented from exercising their rights pending determination of those issues.

The expression "balance of convenience", although sanctioned by the highest authority, is sometimes inadequate to express the factors which must often enter into the consideration of how the Court's discretion is to be exercised. Considerations of vested legal rights and of justice which frequently enter the equation are not happily described as "convenience". See Cayne v Global Natural Resources PLC [1984] 1 All ER 225 per May LJ at p237. When the rights of a secured creditor to enforce the security are in question, special considerations arise.

The primary rule in such cases was stated by Barwick CJ (Menzies and Gibb JJ concurring) in Inglis v Commonwealth Trading Bank of Australia [1972] HCA 74; (1972) 1'26 CLR 161 at p169:

"The case falls fairly, in my opinion, within the general rule applicable when it is sought to restrain the exercise by a mortgagee of his rights under the mortgage instrument. Failing payment into court of the amount sworn by the mortgagee as due and owing under the mortgage, no restraint should be placed by order upon the exercise of the respondent mortgagee's rights under the mortgage."

It does not appear clearly from the report of Inglis' case whether the mortgagee's claims related to the mortgage transaction or were capable of affecting the validity of the mortgages.

In Glandore Pty Ltd v Elders Finance and Investment Ltd [1984] FCA 407; (1984) 4 FCR 130, Morling J considered that the mortgagee in Inglis' case did not seek to impugn the validity of the mortgages transaction. The cases since Inglis have been considered by Matheson J in National Australia Bank v Zollo [1995] SASC 4988; (1995) 64 SASR 63, and it is unnecessary for me to discuss them further.

What emerges, in my opinion, is that the Court has a discretion whether to restrain the mortgagees, but it is a discretion which must be exercised with due regard to the rights of the mortgagee and the primary rule.

A consideration of great importance in considering how the discretion should be exercised is whether the defendants will suffer irreparable injury for which damages will not be adequate compensation unless the order is made. Frequently that is stated as a condition which must be satisfied before the question of the balance of convenience arises for consideration; Castlemaine Tooheys Ltd v South Australian Brewing Co [1986] HCA 58; (1986) 161 CLR 148 per Mason ACJ at 153. But whether it is so stated or looked upon as an aspect of the balance of convenience, it is a question of central importance. In this case there can be no doubt as to how that question is to be answered. The loss of the mortgaged properties would spell the end of the family business which has been carried on on those properties for many years. The injury would be irreparable. No amount of compensation would repair the injury. The land would be gone, the flow of income would have dried up, the family's means of livelihood would be lost. Compensation would do something to restore the defendants' finances but it could not restore the family properties or re-establish the family business conducted on them.

Against that catastrophe must be weighed the suspension of the plaintiffs' rights to enforce their security. The consequences of such a suspension are ameliorated in the present case by two considerations. First, the plaintiffs are large financial institutions. It is not a case in which the mortgagee is dependent upon regular income from the investment. Second, there would be no risk to the plaintiffs in the suspension. The evidence of value proves that the value of mortgaged properties is far more than sufficient to meet the present debt together with any amount of interest which could accrue in the period before trial and judgment.

It seems to me that when these considerations are weighed, the balance is heavily in favour of restraining the plaintiffs until the issue affecting the validity of the mortgages can be determined. I consider that the learned Master's decision to stay the action is correct.

No undertaking as to damages was required or given. I am not clear whether it was sought. The orders made were tantamount to an interlocutory injunction and an undertaking as to damages should have been required. Mr Trim QC for the defendants has indicated that if the undertaking is required it will be given.

In the circumstances of this case, to enforce payment into court of the amounts secured by the mortgagees would largely defeat the purpose of the stay, by making it necessary for the defendants to dispose of the properties. The plaintiffs are amply secured as to accruing interest and are not in need of the regular income and for those reasons I do not consider that it should be made a condition of the stay that accruing interest be paid by the defendants or paid into court.

The order is: Subject to an undertaking by the defendants to abide by any order as to damages which the Court may make if it turns out that the order staying this matter should not have been made, appeal dismissed.