Stopping the forced sale of charged property

The dispute

The proceedings arose from a long-running lending relationship involving a family-owned company, personal borrowing and mortgages over privately owned immovable property. Following the company’s liquidation, discussions took place with the original lender concerning a wider resolution of the outstanding exposures.

The claimants maintained that those discussions resulted in a binding settlement under which the lender would acquire two properties at an agreed value and the relevant personal liabilities would be resolved. The lender’s successor disputed that any binding settlement had been concluded and initiated the statutory auction process.

The strategic problem

Interim relief under section 32 of the Courts of Justice Law required the applicants to establish a serious issue to be tried, a visible probability of success and a real difficulty in achieving full justice later if protection were withheld.

The opposing party argued that the alleged arrangement was not binding, that damages would be adequate and that the application was affected by delay and non-disclosure. The threatened auction meant the application had to connect the documentary history precisely to the proprietary and contractual relief claimed.

Our approach

We focused the application on preservation rather than premature determination of the merits. The evidence placed the alleged settlement in its commercial context and demonstrated that the auction threat had moved beyond speculation.

The court was invited to preserve the subject matter of the action so that the eventual judgment could deliver practical and complete justice.

Result and significance

The interim injunctions were made absolute until final determination of the action, restraining the sale or auction of the two properties. Costs of the application were awarded to the claimants, payable at the conclusion of the proceedings.

The decision demonstrates that the solvency of a financial institution and the theoretical availability of damages do not automatically defeat interim relief where a sale would destroy the practical subject matter of the principal claim.

How our firm can assist

Our Dispute Resolution team acts in urgent injunction proceedings, mortgage-enforcement disputes, contested restructurings and claims concerning settlement agreements. We combine rapid protective action with a litigation strategy directed to the final remedy.