Removal of receivers

In Victor Seeto & Ors v Bank of Western Australia Limited [2010] NSWSC 922, Justice Nicholas of the NSW Supreme Court heard an application for an interlocutory mandatory injunction for the removal of receivers on the ground that their appointment was a violation of clause 2.2 of the Code of Banking Practice.

His Honour held that the interlocutory application must be refused as the plaintiffs had failed to demonstrate that it was reasonably arguable that clause 2.2 of the Code operated to require notice to be given of the appointment of a receiver even though the express terms of the mortgage empowered appointment without notice.

The Code of Banking Practice imposes standards of behaviour to be observed in the performance of contractual rights and obligations. Adherence to the Code requires a bank to have regard to the interests of both parties in the course of its performance of the terms of the relevant contract. However, it does not operate to qualify or vary rights or powers.