Background
Oliver Hume Property Funds (Hackham) Pty Ltd was the developer under a 2021 development management agreement with YAS Property and Development Pty Ltd to develop residential land in Onkaparinga Heights, Adelaide. YAS owned the land through subsidiary entities; Oliver Hume managed the project and arranged financing. The relationship deteriorated over years of disputes about project strategy and finances.
On 29 April 2026, YAS terminated the agreement, alleging fraud by Oliver Hume regarding budget and feasibility studies. On 2 June 2026, YAS served a second termination notice claiming Oliver Hume had failed to satisfy a contractual condition precedent regarding approval of the project budget within three years. The $38.25 million financing from Metrics expired on 19 May 2026 without repayment, forcing YAS to obtain alternative financing (Labassa Capital) for the final tranche of land acquisitions.
Oliver Hume sued seeking an interlocutory injunction to restrain the respondents from acting on the termination notices and final relief declaring the terminations invalid. The primary judge found a strong prima facie case but refused the injunction on balance of convenience grounds. Oliver Hume appealed that decision and also challenged the judge’s subsequent order removing mortgages and caveats Oliver Hume had registered on the properties.
The Court’s Holding
The Court of Appeal dismissed both appeals. While acknowledging a serious question to be tried regarding the validity of both termination notices, the court affirmed that the balance of convenience did not support interlocutory injunctive relief. The court emphasized that practical commercial realities—not just legal entitlements—must inform the discretionary decision to grant interlocutory relief. Key to this analysis was that enforcing the agreement against YAS’s wishes would expose YAS to significant obligations to support a project YAS considered unprofitable, potentially causing project stagnation. Additionally, the financing structure had fundamentally changed: the third tranche of land was now secured by a first mortgage to Labassa Capital rather than the original Metrics facility, representing a material departure from the development management agreement.
On the second appeal, the court upheld removal of the mortgages and caveats. While Oliver Hume had serious legal claims, the court found the alternative security arrangement (Labassa Capital’s mortgage) adequate protection. The judge had properly assessed the status quo at commencement of proceedings (when no security existed) and correctly applied principles for interlocutory relief, determining that damages remained a viable remedy and that the substituted security provided reasonable protection of Oliver Hume’s financial interests.
Key Takeaways
- Courts assessing interlocutory relief in commercial disputes must consider practical consequences of continued enforcement, including risk of project stagnation when parties are at loggerheads.
- Changing circumstances between applications (here, alternative financing arrangement) can justify reconsideration of the balance of convenience, even without establishing reversible error.
- Where final relief would take the form of a negative injunction (restraining action) rather than affirmative performance, courts still apply full interlocutory relief analysis, including whether damages provide adequate remedy.
- Courts may grant interlocutory orders removing registered mortgages and caveats using ordinary injunction principles when the underlying circumstances have materially changed.
Why It Matters
This decision clarifies that Australian courts will not reflexively enforce joint venture and development agreements through injunctive relief when the relationship has broken down and commercial performance is at risk. The court’s emphasis on practical commercial consequences—including project stagnation and one party’s exposure to loss on an unviable venture—provides guidance that legal formalism must yield to reality-based analysis in discretionary remedy decisions.
The decision also illustrates how courts handle the intersection of equitable remedies and security interests. By permitting removal of Oliver Hume’s registered securities while requiring substituted protection through an alternative financier’s security, the court balanced the parties’ competing interests without being bound by the original contractual allocation of financing responsibility. This approach may influence how courts manage disputes in large-scale development projects where initial financing arrangements prove untenable.