Barker v Perpetual Trustees Aust Ltd & Pioneer Homes Aust Pty Ltd (No. 2) No. Scciv-02-1833

In Barker v Perpetual Trustees Aust Ltd & Pioneer Homes Aust Pty Ltd (No. 2), the plaintiff, a mortgagor in default, sought relief against enforcement of the power of sale by the mortgagee, the first defendant. The second defendant, a building contractor, was joined in the proceedings. The plaintiff sought relief under section 55A(3) of the Law of Property Act 1936, while the first defendant counterclaimed for declarations of its rights under the mortgage and its costs of the action. The plaintiff's application for relief was dismissed, along with the defendant's counterclaim, and the first defendant sought an order for its costs. The central legal issues were whether the defendant was entitled to its costs on a basis other than party and party costs and whether it should have its costs of the first application for an interlocutory injunction. The court considered the provisions of the Consumer Credit Code, which applied to the mortgage and credit contract, and noted that enforcement expenses must be reasonable and incurred by the mortgagee. The court found that the defendant was not entitled to costs on an indemnity or solicitor and own client basis as the clause in the mortgage did not plainly and unambiguously provide for such costs. Furthermore, the court held that the defendant's opposition to the interlocutory injunction unreasonably delayed the resolution of the plaintiff's claim and added to the costs of the application. Therefore, the court ordered that the plaintiff pay the first defendant's costs of the application, the first defendant pay the plaintiff's costs of the counterclaim, and that the first defendant pay the plaintiff's costs of any hearings of and incidental to the plaintiff's application for an interlocutory injunction incurred after 13 December 2002. There was no order as to the costs of the second defendant.