Plaintiff v Defendants

In person and also by her 'McKenzie friend', Mr Jeremy Rowell

For the First, Second, Third, Fourth, Fifth, Sixth and Seventh Defendants

1 This is an application by the plaintiff for urgent injunctive relief to restrain, in effect, the sale of a property at 392 Victoria St, Richmond (the Property), owned by the first defendant, Torbeckin Pty Ltd (Torbeckin), a company in liquidation, by a mortgagee, Secure Funding Pty Ltd (Secure), the eighth defendant. Secure is in possession of the Property. The Property is tenanted. The tenant operates a brothel named the 'Candy Club'.

2 Upon the present application, there is no dispute about: the validity of the mortgage; that there has been default; that Secure is in possession; the power of sale is exercisable; and Secure is owed the amount it claims. The plaintiff's claims concern the manner in which Secure is currently exercising its power of sale. The gist of the plaintiff's claims concern how the Property is being marketed and offered for sale (see plaintiff's submissions, [9]). The plaintiff claims that the tenant's lease was not renewed and is, in any event, premised upon a fraud.

3 The genesis of this proceeding is an extremely acrimonious dispute between the plaintiff's domestic partner, Mr Jeremy Rowell (Jeremy), and his father, Mr Rodney Rowell (Rodney), arising from their involvement in Torbeckin. Jeremy and Rodney are involved in a number of proceedings in this Court, together with other parties. This includes five ongoing proceedings involving Torbeckin. Jeremy is bankrupt as a result of failing to pay costs orders. Jeremy's challenges to his bankruptcy have so far been unsuccessful. The plaintiff has now sought to intervene in a proceeding in which Jeremy is a party (S ECI 2024 03825) and has also commenced this proceeding.

4 The Court has already determined two applications in this proceeding to, in effect, restrain the sale of the Property. Both applications were dismissed.

(a) The plaintiff. The plaintiff is a director of Torbeckin. The plaintiff says that she holds all the shares in Torbeckin for 'safekeeping' for Jeremy. Jeremy sat next to the plaintiff during the hearing. The plaintiff also says that she is a creditor of Torbeckin. The plaintiff relied upon submissions filed 25 March 2026 and upon her affidavits made 26 November 2025, 24 March 2026, 28 March 2026, 29 March 2026 and an affidavit of Jeremy made 26 March 2026;

(b) Jeremy was originally a party. He is now bankrupt. Any beneficial interest he has in the shares in Torbeckin have vested in his estate. The Court granted him leave to appear as a 'McKenzie friend' for the plaintiff. The plaintiff's submissions were clear and forthright and Jeremy's limited submissions added nothing meaningful in addition to the plaintiff's submissions;

(c) Torbeckin. No leave has been granted to bring this proceeding against it. It appeared on two previous applications made by the plaintiff in this proceeding, but did not appear on this application;

(d) Mr Innis Cull and Mr Paul Allen (the liquidators), the second and third defendants. They also appeared on two previous applications made by the plaintiff in this proceeding but did not appear on this application and informed the Court by email accordingly. They had no notice that the plaintiff sought to rely upon a potential derivative leave application. I address this further later in this ruling, but such an application was only referred to, and in the briefest of terms, during the hearing;

(e) Ms Estela Rodriguez and Ms Jessica Rodriguez, the fourth and fifth defendants. No relief is sought against them on this injunction application. Estela has been served with the Originating Process. The plaintiff seeks an order for substituted service concerning Jessica. Jessica is Estela's daughter. This application will be referred to a Judicial Registrar/Associate Judge;

(f) Rodney, the sixth defendant. No relief is sought against him on this application. Rodney informed the Court by email that he would not be appearing at the hearing and subsequently did not appear at the hearing;

(g) Australian Financial Security Authority (AFSA), the seventh defendant. AFSA was Jeremy's former official trustee in bankruptcy. A private trustee named Mr Stephen Michell has now been appointed to Jeremy's bankrupt estate. Neither AFSA nor Mr Michell appeared on the application. The title to the proceeding must be amended accordingly;

(h) Secure. On 4 October 2024, in proceeding S ECI 2023 02679, the Court made an order for possession in favour of Secure. Secure is currently seeking expressions of interest from potential purchasers of the Property. It relied upon submissions filed 26 March 2026 and 30 March 2026 and an affidavit of Ms Cibich, solicitor for Secure, made 26 March 2026.

6 The applicable law on an application for an interlocutory injunction is well established:

(a) a plaintiff seeking interlocutory injunctive relief must demonstrate that there is a serious question to be tried;

(b) the injury the plaintiff is likely to suffer must be one for which damages will not provide an adequate remedy;

(c) the balance of convenience must favour the grant of the injunction, which also requires consideration of the strength of the plaintiff's claim;

(d) ultimately, the Court should take the course that appears to carry the lower risk of injustice if it should turn out to have been wrong, in the sense of granting an injunction to a party who fails to establish the asserted right at trial, or failing to grant an injunction to a party who succeeds at trial.

1. Until further order, the Eighth Defendant (Secure Funding Pty Ltd (ACN 081 982 872)), whether by itself, its servants, agents or otherwise, be restrained from selling, agreeing to sell, entering into any contract for sale of, or otherwise disposing of, dealing with, or encumbering the land known as 392 Victoria Street, Richmond VIC 3121, being the land in Certificate of Title Volume 11487 Folio 268 (Premises).
2. Until further order, the Eighth Defendant, whether by itself, its servants, agents or otherwise, be restrained from inviting, receiving, considering, shortlisting, negotiating upon, accepting, or otherwise progressing any expression of interest, offer, bid, executed contract of sale, deposit, or other step in connection with the current mortgagee sale campaign in respect of the Premises advertised as closing on 30 March 2026.
3. Until further order, the Eighth Defendant, whether by itself, its servants, agents or otherwise, be restrained from advertising, marketing, offering for sale, circulating, providing, making available for execution, or otherwise using any brochure, information memorandum, expression of interest form, contract of sale, vendor's statement, trust account details, or other sale document in connection with the sale of the Premises on the footing that:

(a) the Premises are sold subject to the lease dated 21 March 2020 between Torbeckin Pty Ltd and Golden Cube Pty Ltd;

(b) any further term under that lease commenced on or about 21 March 2025;

(c) any valid option was exercised under that lease; or

(d) there is any presently valid current 5-year lease commencing in or about March 2025.

1. Within 24 hours of service of this summons, the Eighth Defendant remove, withdraw, correct, amend and cease circulating all online advertisements, brochures, information memoranda, expression of interest forms, contracts of sale, vendor's statements, trust account details and other sale materials relating to the Premises so that they do not state or imply the matters in paragraph 3, and notify all recipients of the current contract or EOI pack that the sale process is suspended pending further order.

8 The plaintiff identified the serious question in her written submissions as follows:

1. There is plainly a serious question to be tried as to whether the property is being marketed and offered for sale on a false or seriously disputed tenancy footing.

9 This does not identify a cause of action. But it is important to determine whether this is a serious question as it is the central claim that the plaintiff relied upon for the causes of action that she briefly identified during the hearing.

10 The relevant lease is exhibited to the affidavit of the plaintiff made 24 March 2026 (Exhibit 6, pages 19-41). This is signed by the tenant. The plaintiff relies upon this lease as being the 'authentic lease'. It is the lease that Secure has referred to in exercising its power of sale. I refer to Item 19 of the lease concerning a renewal of the lease. In my view, there is a serious question whether the lease was renewed pursuant to its terms. I refer to the plaintiff's affidavit of 24 March 2026, at paragraphs 34 to 44. This is not the lease that was allegedly 'doctored' and originally given to Secure by Torbeckin to obtain the loan from Secure; see the plaintiff's affidavit of 24 March 2026, at paragraphs 59 to 64.

11 The injunctive relief does not support any final relief sought by the plaintiff against Secure in the Originating Process. The only relief sought against Secure is the interlocutory injunction. I refer to paragraph (f) (page 2) and paragraph 5 of the Originating Process. None of the declarations that are sought in paragraph 12 name Secure. No permanent injunction is sought against Secure. No claim for loss and damage is made against Secure. The plaintiff has not sought to amend the Originating Process. However, the plaintiff did identify a number of potential claims by, inter alia, Torbeckin (upon the grant of derivative leave) during the hearing of the application.

12 During the hearing, the plaintiff identified that she sought the injunctive relief, inter alia, based upon potential claims of Torbeckin pursuant to a grant of derivative leave. No such derivative leave has, at this stage, been granted.

13 The plaintiff does, however, seek derivative leave to bring claims against Secure in the name of Torbeckin and to seek injunctive relief against Secure. I refer to the Originating Process, at paragraphs A(c), (f), 2 and 5, and the Interlocutory Process filed 10 November 2025, at paragraphs 1 and 4. In addition, the claims for losses as a result of alleged 'contraventions and misconduct' are expressed to be losses suffered by Torbeckin and not the plaintiff. I refer to paragraph 13 of the Originating Process.

14 During the hearing on 26 March 2026, the plaintiff requested an opportunity to seek derivative leave if the Court was against her on 'standing'. The plaintiff has not otherwise sought to actively pursue the claim for derivative leave. The plaintiff is familiar with such claims. First, she has sought derivative leave in the Originating Process. Second, Jeremy, her 'McKenzie friend' and partner, also made a detailed application for derivative leave based upon issues with the lease, which was dismissed by the Court; see Secure Funding Pty Ltd v Torbeckin Pty Ltd (in liq) [2024] VSC 571.

15 But I will nonetheless consider the claims that the plaintiff identified during the hearing based upon derivative leave. She identified the claims and submitted that the claim for injunctive relief needed to be determined urgently.

16 The plaintiff submitted that it is clear that the liquidators of Torbeckin will not take any step to prevent the present sale process or make any claim against Secure. Upon the present application, I accept that this appears to be the present position. But as I have already said, the plaintiff did not identify in her written material that she intended to raise the issue of derivative leave at this hearing.

17 The Court has inherent jurisdiction to grant such leave. I set out the applicable law concerning such an application in Duggal v Bellrock Cleaning Services Pty Ltd (Recs and mgrs apptd) [2023] VSC 166 at [21]:

The following three principal considerations arise in considering whether the Court's inherent jurisdiction should be exercised:

(a) whether the proposed claims have some solid foundation in that they exhibit such a degree of merit as to be neither vexatious nor oppressive and present reasonable prospects of success;

(b) the attitude of the administrator or liquidator to the proposed proceedings;

(c) whether practical considerations support the initiation of the proceeding, with particular reference to the financial protection of the assets of the company by means of indemnity and, if indicated, security.

18 During the hearing, the plaintiff submitted that there is a serious question whether Secure is in breach of s 420A of the Corporations Act 2001 (Cth) (Corporations Act) and s 77 of the Transfer of Land Act 1958 (Vic) (Transfer of Land Act).

Section 420A of the Corporations Act

19 Section 420A of the Corporations Act provides:

(1) In exercising a power of sale in respect of property of a corporation, a controller must take all reasonable care to sell the property for:

(a) if, when it is sold, it has a market value - not less than that market value; or

(b) otherwise - the best price that is reasonably obtainable, having regard to the circumstances existing when the property is sold.

(2) Nothing in subsection (1) limits the generality of anything in section 180, 181, 182, 183 or 184.

20 A breach of s 420A of the Corporations Act gives rise to a right of action under s 423 of the Corporations Act (ie the court 'may take such action as it thinks fit') and s 1324 of the Corporations Act confers on the Court a power to grant injunctions against a person who contravenes the Corporations Act . Section 1324(4) expressly confers a power to grant an interim injunction '[w]here in the opinion of the Court it is desirable to do so'.

21 Secure is a 'controller' as it has possession of the Property, which is property of Torbeckin, for the purpose of enforcing a security interest (ie the mortgage).

22 Apart from identifying s 420A of the Corporations Act, the plaintiff did not otherwise address it in any detail. I have already said that there is a serious question whether the lease was renewed. I also accept that there is a serious question as to whether the Property would be sold for less with the lease than without the lease and vacant possession. Secure accepts that Torbeckin has standing to bring a claim against it for a breach of s 420A(1)(a) of the Corporations Act. But Secure submitted that a claim pursuant to s 420A(1)(a) 'is not a basis on which a mortgagee's power of sale can be restrained' and relied upon ABCD Corporation Pty Ltd v Sampson [2017] NSWCA 117, in which Basten JA stated at [7]:

In any event the case was not ultimately put on that basis. Rather it was put upon the basis that unless the property were sold after being properly presented in the market, there would be disputes as to whether the sale was at an undervalue. Such disputes would normally be resolved by evidence concerning expert valuation. It was not suggested that that was not an available course, but rather that a sale to the first offeror, after obtaining a valuation, but at a price below that which the applicant claimed was fair market value, was not a sale which complied with s 420A of the Corporations Act. This, it was submitted, is an unusual case because the sale can still take place with proper marketing and at auction or by another appropriate means of sale. The usual battle of experts can therefore be avoided. However, that assumes that this Court is here to supervise the sale process; that is not required by the Corporations Act, either by s 420 or s 420A, or under the general law or, indeed, pursuant to s 423 of the Corporations Act.

23 I do not accept Secure's submissions. Basten JA was addressing a particular issue in that case, namely whether the court should grant an injunction 'until the court is persuaded that adequate steps to obtain a fair market value have been taken'. The plaintiff does not seek a 'court-regulated process' but to restrain the exercise of the power of sale in its entirety until the plaintiff's claims concerning the lease are determined. This was explained by Basten JA at [8]:

The submissions were addressed comprehensively by the primary judge. Assuming that damages are an adequate remedy then it is not correct to say that damages can properly be assessed only by reference to market value which has been ascertained by way of an actual sale, properly conducted without breach of duty. Indeed, there is an element of circularity (or perhaps internal inconsistency) in saying that the only appropriate method of obtaining fair market value is an order preventing a defective process occurring. It is not correct to say that because it is possible that the sale may still take place in accordance with the requirements of the section, that therefore it should be injuncted until the court is persuaded that adequate steps to obtain a fair market value have been taken. If that were to happen, then there would be no defect and no need to ascertain market value. What is really sought is a court‑regulated sale process. However, the power of sale is to be exercised by the receiver, not the court.

24 In my view, subject to a grant of derivative leave, there is a serious question whether Torbeckin has a claim against Secure for breach of s 420A of the Corporations Act. The plaintiff did not address any of the substantial requirements for derivative leave. The plaintiff did address the attitude of the liquidators. In my view, there is a real doubt that the plaintiff would be granted derivative leave given that the plaintiff is not in a position to provide any indemnity or security to Torbeckin for, inter alia, any adverse cost orders of such proceedings. But, at this stage, and without the benefit of any detailed submissions of the parties, I am of the opinion that there is a serious question with respect to a claim pursuant to s 420A of the Corporations Act by Torbeckin on derivative leave.

25 The plaintiff does not have any claim under s 420A of the Corporations Act. The plaintiff is not even a party to the security arrangements with Secure.

Section 77 of the Transfer of Land Act

26 Section 77 of the Transfer of Land Act provides, as concerns the power of sale under a mortgage or charge:

(1) If within one month after the service of such notice or demand or such other period as is fixed in such mortgage or charge the mortgagor grantor or other persons do not comply with the notice or demand the mortgagee or annuitant may, in good faith and having regard to the interests of the mortgagor grantor or other persons, sell or concur with any other person in selling the mortgaged or charged land or any part thereof, together or in lots, by public auction or by private contract, at one or several times, and for a sum payable in one amount or by instalments, subject to such terms and conditions as the mortgagee or annuitant thinks fit, with power to vary any contract for sale and to buy in at any auction or to rescind any contract for sale and to resell without being answerable for any loss occasioned thereby and with power to make such roads streets and passages and grant and reserve such easements as the circumstances of the case require and the mortgagee or annuitant thinks fit, and may make and sign such transfers and do such acts and things as are necessary for effectuating any such sale.

(2) An instrument of transfer by a mortgagee or annuitant expressed to be in exercise of the power of sale and in an appropriate approved form may be accepted by the Registrar as sufficient evidence that the power has been duly exercised.

(3) The purchase money received arising from the sale shall be applied -

(a) firstly in payment of all costs charges and expenses properly incurred incidental to the sale and consequent on such default;

(b) secondly in payment of the moneys which are due or owing on the mortgage or charge;

(c) thirdly in payment of moneys owing under or in respect of subsequent mortgages and charges in the order of their respective priorities;

(d) fourthly in payment of the residue (if any) to the mortgagor or into the Supreme Court under the provisions so far as they are applicable of section sixty-nine of the Trustee Act 1958 and the rules referred to therein, or if the sale is made by a mortgagee and the land is charged with a subsequent annuity or if the sale is made by an annuitant, in payment of the said residue into an account on deposit at interest in an authorised deposit-taking institution within the meaning of the Banking Act 1959 of the Commonwealth in the joint names of the annuitant and the Registrar to satisfy the accruing payments of the charge and subject thereto for the benefit of the parties who are or become entitled to the residue of the deposited money.

(4) Upon the registration of any transfer under this section all the estate and interest of the mortgagor or grantor of the annuity as registered proprietor of the land mortgaged or charged shall vest in the purchaser as proprietor by transfer, freed and discharged from all liability on account of such mortgage or charge and (except where such a mortgagor or grantor is the purchaser) of any mortgage charge or encumbrance recorded in the Register subsequent thereto and the title of the purchaser shall not be impeachable on the ground that no case had arisen to authorize the sale or that due notice was not given or that the power was otherwise improperly or irregularly exercised but any person thereby damnified shall have his remedy in damages against the person exercising the power, and for the purposes of Part III the purchaser shall be deemed to have dealt with the registered proprietor of the land.

27 In MBF Investments Pty Ltd v Nolan [2011] VSCA 114; (2011) 37 VR 116, the Court of Appeal said at [47]:

A mortgagee owes certain duties to a mortgagor when it seeks to exercise its rights over its security. Common law and equity alike have set bounds to the extent to which the mortgagee can look after itself and ignore the mortgagor's interests. In the exercise of its rights over its security, the mortgagee must act fairly towards the mortgagor. The mortgagee's interest in the property has priority over the interest of the mortgagor so that it can protect its own interest. But it is not entitled to conduct itself in a way which unfairly prejudices the mortgagor. Two settled examples of where the law imposes a duty on a mortgagee are where it lets the property and must claim a proper market rent, and where it sells and must take appropriate steps to obtain a proper market price. The issue which here falls for consideration is the ambit of the mortgagee's duty in the exercise of its powers of sale.

(citations omitted)

28 The Court of Appeal then provided the following convenient summary at [100]:

To summarise our position:

(a) a mortgagee is not a trustee of the power of sale, which is given to the mortgagee to enable the realisation of the security interest;

(b) a mortgagee must act in good faith, that is conscionably, and cannot sell for a purpose other than that for which the power of sale is conferred;

(c) a mortgagee is not required to place the interests of the mortgagor above the mortgagee's interests in recovering the debt. For example, the mortgagee can sell the property at a time of the mortgagee's choice, even though the property might realise a higher price if the sale were postponed;

(d) the mortgagee cannot disregard the interests of the mortgagor by simply selling for a price which will cover the amount of the loan. The mortgagee must take reasonable steps to obtain the best price consistently with its right to enforce its security interest. This requires the mortgagee to consider how the property should be advertised and to allow an appropriate time between the advertisement and the sale;

(e) the mortgagee must also have regard to the interests of subsequent security holders; and

(f) if there is no doubt that the sale of the lots preferred by the mortgagor would be sufficient to discharge the debt owed to the relevant mortgagee and of any other security holders whose interest the mortgagee is required to consider, a failure to sell the preferred lots may breach the mortgagee's duty to sell in good faith.

29 Apart from identifying s 77 of the Transfer of Land Act, the plaintiff did not otherwise address it in any detail. In my view, subject to a grant of derivative leave, there is a serious question to be tried whether Torbeckin has a claim against Secure for breach of s 77 of the Transfer of Land Act. Again, at this stage, and without the benefit of any detailed submissions of the parties, I am of the opinion that there is a serious question with respect to a claim by Torbeckin on derivative leave.

30 The plaintiff did not identify in what respect she relied upon s 77 of the Transfer of Land Act. Secure does not owe her any duty under s 77 of the Transfer of Land Act.

31 The plaintiff submitted in her affidavit made 24 March 2026, at [90]-[94]:

1. The present sale campaign is urgent because the expressions of interest close at 3:00pm on 30 March 2026.
2. If Secure Funding is not restrained before that date, the Premises may be sold, or the sale process may advance to the point where the position becomes difficult or impossible to reverse.
3. The prejudice to Torbeckin, to creditors, and to me if the Premises are sold on a false or seriously disputable tenancy footing is extreme.
4. The Premises are Torbeckin's principal asset, and if they are sold at an undervalue because they are marketed on the footing of an expired or invalid lease, the resulting loss will be substantial and may never be recoverable in practice.
5. Damages would not be an adequate remedy because once a mortgagee sale proceeds and third-party rights intervene, restoration of the position may be impracticable.

32 In my view, damages are an adequate remedy for any claim of the plaintiff or of Torbeckin (upon a grant of derivative leave).

33 First, any loss and damage suffered by the plaintiff and/or Torbeckin as a result of the sale of the Property, including as a result of any sale of the Property based upon the lease, is able to be quantified and addressed by an award of damages.

34 Second, the plaintiff did not submit that the Property has a particular value to Torbeckin, beyond a mere monetary value; see ABCD Corporation Pty Ltd v Sampson [2017] NSWCA 117 at [6].

35 Third, the plaintiff's submissions and application are, in fact, premised upon Secure selling the Property once matters with respect to the lease are determined. The plaintiff submitted that the effect of her injunctive relief upon Secure is only a 'short restraint' (see plaintiff's submissions, [34] and [35]).

36 Fourth, if the plaintiff or Torbeckin suffer loss and damage, they may seek to recover such loss and damage. I do not accept the plaintiff's statement that such loss may never be recoverable in 'practice'. This was also not further explained.

37 Fifth, I do not accept the plaintiff's statement that 'restoration of the position may be impracticable' if the Property is sold. This is because the plaintiff accepts that the Property will be sold, but seeks to restrain the sale until an issue with the lease is resolved.

38 Sixth, I do not accept that refusing the injunction will destroy the subject matter of the proceeding and I refer to the claims set out in the Originating Process.

39 Finally, the plaintiff did not submit that Secure does not have the means to pay to the plaintiff or Torbeckin any such loss and damage awarded against Secure.

40 The parties made submissions based upon principles stated in Inglis v Commonwealth Trading Bank of Australia [1972] HCA 74; (1972) 126 CLR 161 (Inglis). In Inglis, Barwick CJ (with whom Menzies and Gibbs JJ agreed) said at 169:

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.

41 The general rule is not inflexible. There are exceptions. See, for example, in Bayblu Holdings Pty Ltd v Capital Finance Australia Ltd [2011] NSWCA 39; (2011) 279 ALR 166, Campbell JA (with whom Tobias and Macfarlan JJA agreed) said at [58]:

An exception to this 'general rule' has long been recognised when there is an issue about whether the power of sale has arisen at all: Harvey v McWatters [1948] NSWStRp 58; (1949) 49 SR (NSW) 173; Allfox Building Pty Ltd v Bank of Melbourne Ltd (1992) NSW Conv R 55-634. In Allfox Powell J at 59,627 recognised, obiter, another exception when the validity of the mortgage was in issue. Clarke v Japan Machines (Aust) Pty Ltd (No 2) [1984] 1 Qd R 421 (Clarke First Instance) at 422-423 recognised another exception where the amount claimed by the mortgagee is obviously wrong. First instance decisions have also recognised some other exceptions where the plaintiff claims that he can redeem the mortgage within a fairly short time by carrying out a refinancing proposal that is reasonable on its face, or where the plaintiff has a demonstrable capacity to secure or at the least refinance the mortgage debt: Grose v St George Commercial Credit Union Ltd (1991) NSW Conv R 55-586 at 59,300-59,301 per Bryson J; Parist Holdings Pty Ltd v Perpetual Nominees Ltd [2006] NSWSC 599 at [16]-[21] per Hamilton J. I express no view about the correctness of those two last-mentioned decisions, beyond saying that I do not regard the decision of this court in Notaras v Sly and Weigall [2005] NSWCA 275 at [133] as necessarily providing support for the last-mentioned exception. In Notaras at [133], Mason P identified four difficulties that stood in the way of a mortgagor succeeding in an action for negligence against its solicitors on the basis that the solicitors had not sought an interlocutory injunction to restrain exercise of a power of sale. Mason P noted that one of these difficulties was 'the futility of approaching the court without a demonstrable capacity to tender or secure or at least re-finance the $4m undoubtedly due under the Mortgage'. That is not saying that the injunction would definitely have been obtained if the mortgagor had such a demonstrable capacity.

42 In Welldog Pty Ltd v Prox Pty Ltd [2017] WASCA 62 (Welldog), Buss P and Newnes JA said at [35]-[38]:

The general rule in Inglis supplements the ordinary requirement that an applicant for an interlocutory injunction give an undertaking as to damages. See Harvey v McWatters [1948] NSWStRp 58; (1948) 49 SR (NSW) 173, 177 (Sugerman J).

The general rule in Inglis is not inflexible. There are exceptions.

For example, subject to the overriding discretion of the court as to the terms and conditions (if any) to be imposed on the grant of interlocutory injunctive relief, and depending on the facts and circumstances and overall justice of the particular case, payment into court may not be required where it is alleged that:

(a) the power of sale under the mortgage is not properly exercisable: Inglis (164-165); Bayblu Holdings Pty Ltd v Capital Finance Australia Ltd [2011] NSWCA 39; (2011) 279 ALR 166 [58] (Campbell JA, Tobias & Macfarlan JJA agreeing);

(b) the mortgage is invalid, or a breach of the mortgage has not occurred which engages the power of sale, or a notice required to engage the power of sale is ineffective: Allfox Building Pty Ltd v Bank of Melbourne (1992) NSW Conv R 55-634, 59,626-59,627 (Powell J);

(c) the power of sale is being exercised for an improper motive: Milton Park Country Club Pty Ltd v Yasuda Trust Australia Ltd (Unreported, NSWSC, 8 March 1991) (Bryson J) 11-15; or

(d) the mortgage or the power of sale is impugned pursuant to the Australian Consumer Law or the Australian Securities and Investments Act or equitable principle: Glendore Pty Ltd v Elders Finance & Investment Co Ltd [1984] FCA 407; (1984) 4 FCR 130, 133-136 (Morling J); Town & Country Resorts (Holdings) Pty Ltd v Partnership Pacific Ltd (1988) 20 FCR 540, 545 (Davies, Gummow & Lee JJ).

It must be remembered that, where the source of the court's injunctive power is not that of a court of equity but is supplied by statute, the court may (as a matter of power rather than as an exercise of discretion in the particular case) grant interlocutory injunctive relief that does not correspond with the relief that would follow from an application of the traditional rules of equity. See Town & Country Resorts (545).

43 In Glendore Pty Ltd v Elders Finance & Investment Co Ltd [1984] FCA 407; (1984) 4 FCR 130, Morling J said at 134-135:

It was held in Harvey v McWatters that where a mortgagor seeks an interlocutory injunction to restrain his mortgagee from selling, there is a distinction with respect to the terms that will be imposed as to payment into court between the case in which the power of sale is admittedly exercisable and the only dispute is as to the amount due or the mode in which the mortgagee proposes to exercise the power, and the case in which the very matter in dispute is whether the power of sale is exercisable at all. Sugerman J held that, in the first case, the general rule is that the mortgagor will be required to pay into court the amount demanded by the mortgagee, unless it appears from the terms of the mortgage that the amount claimed by the mortgagee is wrong. He further held that in the second class of case, the amount which would be ordered to be paid into court is not necessarily the whole amount claimed or appearing to be due under the terms of the mortgage, and in such a case the terms as to payment into court that are imposed upon the mortgagor may be moulded so as to require payment in of so much only as will suffice to give adequate protection to the mortgagee.

Harvey v McWatters was cited with approval by Sheppard J in Brutan Investments Pty Ltd v Underwriting and Insurances Ltd (1981) 39 ACTR 47; see also Clarke v Japan Machines (Australia) Pty Ltd (No 2) [1984] 1 Qd R 421 at 423 per Williams A-J. A useful discussion of the principles upon which interlocutory relief will be granted in cases of the present kind is to be found in Meagher Gummow and Lehane, Equity Doctrines and Precedents (2nd ed, 1984), par 316.

It is clear on the authorities that if the present case be regarded as one in which the mortgagor's real claim against the mortgagee is for damages only, interlocutory relief should be granted only upon terms that the amount of the mortgage debt is paid into court. The general rule referred to in Inglis' case would apply in such a case. But if it be not regarded as such a case, it is open to the court to grant the relief sought upon such terms other than payment of the full amount of the mortgage debt into court as the court thinks appropriate.

(emphasis added)

44 In Town & Country Resorts (Holdings) Pty Ltd v Partnership Pacific Ltd (1988) 20 FCR 540, the Full Federal Court said at 545:

The source of the injunctive power of the Court in the present case is not that of a court of equity involved in the Court's accrued jurisdiction, but that supplied by s 80 of the Act. That expresses the injunctive power in wide terms and is not necessarily confined by principles observed in courts of equity in their traditional jurisdiction: see World Series Cricket Pty Ltd v Parish (1977) 16 ALR 181, per Bowen CJ (at 185). As a matter of power rather than as an exercise of discretion in a particular case, the Court may grant interlocutory or final injunctive relief that does not correspond with what would follow from application of the traditional rules. This is not to say that in cases such as the present the rules devised in equity for application in disputes between mortgagor and mortgagee may not provide ready guidance for what is appropriate. But as we have observed, the traditional rule was apparently relaxed where the mortgagor attacked the enforceability of the security. The powers of this Court under s 87 of the Act enable the mortgagor to obtain in an appropriate case orders varying the terms of agreements or declaring them void as a consequence of the contravention of the provisions of the Act by the mortgagee. This may strengthen the inclination of the Court in an appropriate case to refrain from requiring the applicant to provide adequate security for its indebtedness before restraining a mortgagee from exercising its powers: see Glandore Pty Ltd v Elders Finance and Investment Co Ltd [1984] FCA 407; (1984) 4 FCR 130, per Morling J (at 133-136); Cunningham v National Australia Bank (1987) 15 FCR 495; cf Mainbanner Pty Ltd v Dadincroft Pty Ltd (1988) ATPR 49,661.

(emphasis added)

45 As I have already said, there is no dispute about: the validity of the mortgage; that there has been default; that the power of sale is exercisable; that Secure is owed the amount it claims. The plaintiff's claim concerns the manner in which Secure is exercising its power of sale. In my view, none of the exceptions to Inglis apply.

46 As I have said, the plaintiff submits that no payment into Court is required as she only makes a challenge to the sale campaign and its circumstances. The plaintiff relied upon Six Bruce Pty Ltd v Jadig Finance Pty Ltd [2018] VSC 552. But that decision may be readily distinguished from the present as it concerned an offer to redeem. There is no offer to redeem in the present case. The plaintiff also relied upon Welldog and submitted that it supports an exception to Inglis' case concerning a 'misleading sale'. I have already addressed Welldog, and a number of authorities referred to in it, above.

47 I accept that the source of the injunctive power in the present case is not limited to that of a court of equity. This is because it includes a potential derivative claim made under s 420A of the Corporations Act.

48 In the present case, the plaintiff accepts that the power of sale is exercisable and only disputes the manner in which Secure proposes to exercise it. As I have already said, the plaintiff has not established that there is a serious question that she personally has any claim against Secure based upon Secure's exercise of its power of sale. In my view, if I was minded to grant the injunctive relief, which I am not, I would have exercised my discretion and required the plaintiff to pay the sum presently owed under the mortgage into Court. This is because any injunctive relief would be based upon the claims of Torbeckin (upon a grant of derivative leave) against Secure, including pursuant to s 420A of the Corporations Act.

BALANCE OF CONVENIENCE IS AGAINST THE GRANT OF RELIEF

49 The balance of convenience is against the grant of the injunctive relief.

50 Damages are an adequate remedy for any claim the plaintiff or Torbeckin (upon a grant of derivative leave) may have against Secure. I refer to the matters I have already addressed earlier in this ruling.

51 In my view, the prospects of the plaintiff obtaining derivative leave for claims to be made by Torbeckin is weak. I have already addressed this.

Prejudice of delay in sale to Secure and Rodney

52 There is a risk that if the Court grants the injunction, that other persons may be adversely affected. If the sale is delayed, the enforcement of the security will be delayed and the debt to Secure will continue to increase. Any such increase in the debt is likely to be very significant. This is because the issues with respect to the lease would not be determined for a significant period, possibly for 6 months. The debt to Secure increased from $2,424,922.61 on 9 October 2024 to $3,584,817.67 on 21 March 2026. This is an increase of over $1 million, and any further increase in the debt is unlikely to be offset by any income Torbeckin receives in rent over the next six months that is applied against the debt.

53 If the injunction is granted and the plaintiff fails in any claim upon Secure's exercise of its power of sale with the lease, it is likely that Secure will not recover all of the amounts that are further incurred as a result of further delay. Secure's realisation of the security would also have been delayed.

54 The debt of Secure is guaranteed by Rodney and Jeremy. If the injunction is granted and the plaintiff fails in any claim upon Secure's exercise of its power of sale with the lease, Rodney will be liable to pay a significant further amount. I do not accept the plaintiff's submissions that such prejudice is not relevant given that it is alleged that Rodney 'doctored' the lease. This is because Secure is not selling the Property based upon this allegedly doctored lease.

55 I accept that if the injunction is not granted and the plaintiff or Torbeckin (upon a grant of derivative leave) succeed in claims against Secure, and the Property is sold at an undervalue, that Torbeckin may have suffered loss and damage as a result. Its creditors may also suffer prejudice.

56 If the injunction is not granted and the plaintiff or Torbeckin (upon a grant of derivative leave) succeed in claims against Secure, and the Property is sold at an undervalue, the only possible prejudice to the plaintiff is as a creditor of Torbeckin. The plaintiff does not own the beneficial interest in the shares in Torbeckin.

In those circumstances, if the Premises are sold on the present footing and at the depressed value caused by the asserted lease, there is a real risk that the sale proceeds will be exhausted in or towards satisfying Secure Funding and sale-related costs, leaving no distribution to other creditors.

58 In her affidavit made 24 March 2026, directly in support of this application, she stated: 'I claim to be a creditor of Torbeckin' (paragraph [77]). In her affidavit made 26 November 2025, in relation to a previous application, she stated:

My partner, Jeremy Rowell, and I invested essentially all of our wealth and resources into Torbeckin Pty Ltd (Torbeckin). This included the sale of our homes and other assets. Over time we loaned in excess of approximately $2.5 million to Torbeckin. The details of those loans, supported by bank statements and other documents, are set out in my earlier affidavits and the exhibits to them.

(emphasis added)

59 In an earlier affidavit filed in this proceeding on 10 November 2025, the plaintiff attached as an exhibit a previous affidavit, dated 28 October 2025, from proceeding S ECI 2025 05954. The plaintiff set out the relevant basis for her asserted creditor status at [12]-[16], [19]-[20]:

Independently of my directorship, I am a significant creditor of Torbeckin by reason of loans jointly advanced with Jeremy between 2017 and 2022. Those funds were derived from the sale proceeds of our homes at 269 Coppin Street, Richmond, Victoria and 87 Neptune Street, Richmond, Victoria, which we improved and maintained through our combined financial and practical contributions. Bank statements and settlement records appear at ED-2 pp.10-24 and ED-1 pp.7-11 respectively.

Coppin Street (sold 16 September 2017; settled S January 2018). Between 10 October 2017 and 15 January 2018, we advanced a total of $1,912,537.66 to Torbeckin as follows:

(a) 10 Oct 2017 - $170,000 to Torbeckin's ANZ Offset Account;

(b) 9 Jan 2018 - $875,000 to the ANZ Offset Account;

(c) 9 Jan 2018 - $92,537.66 direct to Toyota Finance on Torbeckin's behalf;

(d) 10 Jan 2018 - $755,000 to Torbeckin's NAB Loan; and

(e) 15 Jan 2018 - $20,000 to the ANZ Offset Account.

Neptune Street (sold 5 December 2021; settled 23 February 2022). From those proceeds we advanced a further $540,500.00:

(a) 16 Dec 2021 - $40,000 to Torbeckin's ANZ Offset Account; and

(b) 23 Feb 2022 - $500,500 to the ANZ Offset Account.

In total, we advanced $2,453,037.66 to Torbeckin. We made those advances in the belief that Torbeckin required financial support, including during the COVID-19 period. Those advances were encouraged by Rodney (then a director), who represented that the Company needed the funds. I have since learnt from the Company's bank records and related materials that those representations were false, and that Rodney thereby obtained a financial advantage (and, on my information and belief, did so by deception). Extensive documentation particularising this conduct is provided in the Affidavit of Jeremy Rowell, affirmed 16 August 2023, and filed in the related proceeding S ECI 2022 04086. A copy of that affidavit appears at ED-2 pp. 197-261.

The Company's records do not properly reflect these loans due to Rodney's conduct. He f ailed to record the loans from the Coppin Street sale and falsified the funds advanced from the Neptune Street sale. In particular, he edited the Company's accounting records to mischaracterise the $500,500 deposited on 23 February 2022 (Neptune settlement) as a credit to his own director's loan account, falsely creating the appearance that he personally loaned those funds to Torbeckin. Relevant extracts and corroborating materials appear at ED-1 pp 12-13.

...

After Jeremy and I filed affidavits in S ECI 2025 04417, it became apparent that the long understood 50/50 division would require formal documentation. Neither of us had imagined that Rodney would not properly record the loans in Torbeckin's books and had mischaracterised funds, or that liquidators would ever contest or deny our creditor status; considering the discovery and disputes, we formalised our pre-existing understanding in writing.

On 5 October 2025, Jeremy and I executed a written agreement confirming that 50% of the funds loaned to Torbeckin were advanced on my behalf and are owed to me. A true copy appears at ED-1 pp. 14-15. The agreement formalised our pre-existing 50/50 understanding arising from our relationship and joint financial commitments (including IVF treatment in 2019-2020). It reflected a genuine entitlement and was not made to defeat creditors.

60 The plaintiff did not otherwise substantially address the basis for her claim to be a creditor.

61 But I accept that if the injunctive relief is not granted and the plaintiff or Torbeckin (upon a grant of derivative leave) succeed in their claims against Secure, and the Property is sold at an undervalue, and she is a creditor, that she may suffer prejudice as a result.

62 Jeremy is a bankrupt. Jeremy's submissions focused on the potential prejudice to his estate. I accept that if the injunctive relief is not granted and the plaintiff or Torbeckin (upon a grant of derivative leave) succeed in their claims against Secure, and the Property is sold at an undervalue, that the estate may suffer prejudice as a result.

63 The plaintiff offers the usual undertaking as to damages 'if the Court considers it appropriate'. The undertaking has no value. As I have said, the plaintiff opposes any payment into Court. The plaintiff's financial position is set out in her confidential affidavits of 28 March 2026 and 29 March 2026. The plaintiff has no fixed assets. The plaintiff has not identified whether she has any debts. The plaintiff's present assets are, in my view, insignificant.

64 I also refer to the matters in paragraphs 12 to 16 of the plaintiff's affidavit of 28 March 2026. These matters do not concern a fixed asset. At best, these matters will only eventuate to assist the plaintiff in satisfying any liability established under the undertaking. It is also in an insufficient amount given the interest accruing on the debt.

65 In all of the circumstances, and taking into account the matters I have raised above, I have decided to exercise my discretion to refuse the plaintiff's application for injunctive relief. This is the course that appears to carry the lower risk of injustice. This is because:

(a) damages are an adequate remedy for any claim by the plaintiff, Torbeckin (upon a grant of derivative leave) or even by Jeremy's estate;

(b) Secure and Rodney are likely to be significantly prejudiced if injunctive relief is granted and the plaintiff or Torbeckin fail to establish the claims with respect to the lease;

(c) the prospects of the plaintiff obtaining derivative leave for claims to be made by Torbeckin is weak;

(d) the plaintiff making the usual undertaking as to damages has no value.

66 In addition, the plaintiff does not have the capacity to pay the amount presently owed under the mortgage into Court.

67 In conclusion, I will dismiss the plaintiff's application for interlocutory injunctive relief. In my preliminary view, the plaintiff should pay the costs of Secure, but I will hear from the parties on this issue.

INNIS ANTHONY CULL AS JOINT AND SEVERAL LIQUIDATOR OF TORBECKIN PTY LTD

PAUL ANTHONY ALLEN AS JOINT AND SEVERAL LIQUIDATOR OF TORBECKIN PTY LTD

AUSTRALIAN FINANCIAL SECURITY AUTHORITY (AFSA), AS TRUSTEE OF THE BANKRUPT ESTATE OF JEREMY STANLEY ROWELL