Broleb Pty Ltd v Naranto Pty Ltd - [2010] VSC 520

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. S CI 2010 00869

BETWEEN

BROLEB PTY LTD	Plaintiff
- and -
NARANTO PTY LTD	Defendant

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JUDGE:	MUKHTAR AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	11 November 2010
DATE OF JUDGMENT:	11 November 2010 (ex tempore, and now published in written form)
CASE MAY BE CITED AS:	Broleb Pty Ltd v Naranto Pty Ltd
MEDIUM NEUTRAL CITATION:	[2010] VSC 520

COSTS ― Mortgagee’s action for possession of land ― Contractual right to solicitor and own client costs of enforcement ― Judgment obtained ― Contractual basis of costs sought but not pleaded ― Whether costs on a higher basis is precluded

REASONS FOR DECISION

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J Mattin	Ajzensztat, Jeruzalski & Co
For the Defendant	Mr D Harrison	Alan Shnider & Co

HIS HONOUR:

This proceeding came on for trial before the Court, as constituted by an Associate Justice. The plaintiff seeks possession of land and payment of a secured debt of $63 390 under a second registered mortgage dated 11 March 2009. It is alleged the mortgage required repayment of the principal sum of $60 000 together with interest by 11 July 2009, but the defendant failed to pay the sum when due, causing the defendant to serve a Notice to Pay dated 21 January 2010 which was unsatisfied.

A defence filed in April this year can be described as merely a holding, or perfunctory defence. The defendant admits the legal incorporation of the parties and its ownership of the mortgaged land. Otherwise it says it “does not admit” any of the other allegations. In modern litigation I think such a form of defence for this type of case is meaningless. It is not as if facts are uniquely in the knowledge of the plaintiff. There are times when a lawyer has to file such a defence to save the defendant from a time limit and a hawkish plaintiff. But if there is a defence, such a pleading is usually soon followed up with an amended pleading and if not, it is highly susceptible to be struck out by the Court with a requirement that the defendant positively plead any facts by which it says the plaintiff’s claim is to be challenged. I am told that no such step was taken, nor was summary judgment sought because there were other disputations that complicated matters, and with which I need not be concerned. From what I can see in the file, routine procedural directions were made in April but nothing has evidently happened by way of amended pleadings or discovery.

When the matter was called on for trial, the parties announced the defendant was willing to consent to an order that the plaintiff have possession of the mortgaged land, and an order for costs. But there were two matters in dispute.

First, the plaintiff sought costs on a solicitor and own client basis according to the explicit terms of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2010] VSC 520
Decision Date: 11 November 2010

CaseChat Overview and Summary

Broleb Pty Ltd, the plaintiff, sought possession of land and payment of a debt from Naranto Pty Ltd, the defendant, under a second registered mortgage. The defendant failed to repay the mortgage, leading to the plaintiff serving a Notice to Pay, which was unsatisfied. The defendant filed a defence which the Court found to be merely perfunctory, failing to challenge the plaintiff's claims meaningfully. The defendant consented to the plaintiff obtaining possession of the land and sought an order for costs. The main issues were whether the plaintiff could claim costs on a solicitor and own client basis as per the mortgage terms and whether there should be a stay of possession to allow the defendant to vacate the premises. The Court ruled that the plaintiff was entitled to costs on a solicitor and own client basis as per the mortgage agreement, and granted a 30-day stay of possession to allow the defendant to vacate the premises. The Court rejected the defendant's argument that the plaintiff's failure to plead the mortgage terms precluded the costs claim, finding that such claims could be made post-judgment and that the defendant had not been prejudiced by the lack of specific pleadings. The Court encouraged lawyers to clearly plead and seek costs as per the mortgage terms to avoid disputes and ensure clarity.

Orders