Bayford v St George Bank Ltd (No 2) No. Scciv-01-711

In the matter of Bayford v St George Bank Ltd, the plaintiff, Ms Bayford, sought an appeal against an order made by a Master of the Supreme Court of South Australia, which granted possession of her property to the defendant, St George Bank Ltd. The Bank subsequently applied for costs of the appeal as between solicitor and own client. The legal issues before the court were whether the Bank had a contractual entitlement to such costs and if the allegations of fraud made by Ms Bayford during the appeal warranted a more favourable cost order for the Bank. The court held that the Bank had a contractual entitlement to an order for costs as between solicitor and client, based on the terms of the mortgage agreement. The court did not consider the allegations of fraud to be a sufficient basis for awarding costs more favourable to the Bank than costs as between solicitor and client. Consequently, the court made an order that Ms Bayford pay the Bank’s costs of the appeal as between solicitor and client, reflecting the contractual entitlement as per the mortgage agreement.

The court examined the mortgage agreement to determine the Bank's entitlement to costs. Clause 21 of the mortgage allowed the Bank to recover reasonable expenses incurred in enforcing the mortgage after the mortgagor was in default. This clause was consistent with the Consumer Credit Code, which limited the amount of enforcement expenses a credit provider could recover. The court found that the Bank’s contractual entitlement was best reflected by an order for costs as between solicitor and client, as this would require the mortgagor to prove any costs were incurred unreasonably. The court rejected the Bank’s argument that the allegations of fraud warranted a more favourable cost order, as this would not justify an award of costs more favourable than costs as between solicitor and client.

The court concluded that there was no reason to deny the Bank an order for costs reflecting its contractual entitlement. The court made an order that Ms Bayford pay the Bank’s costs of the appeal as between solicitor and client, in accordance with the mortgage agreement and the relevant sections of the Consumer Credit Code. This decision ensured that the Bank received compensation for its legal expenses, as stipulated in the mortgage, while maintaining the balance of fairness in the cost orders between the parties.