IMB Limited v Great Wall Resources Pty Limited

IMB Limited sought a declaration from the court that Great Wall Resources Pty Limited (in liquidation) be indemnified against the costs incurred by IMB in relation to three applications for a stay of execution of a writ of possession. The dispute arose from a mortgage over property that Great Wall held but which was occupied by third parties. These occupiers made three successive applications for a stay of execution of the writ of possession. The applications were granted on the first two occasions but on the third, the stay was granted on the condition that the occupiers pay certain amounts to IMB and Great Wall. The occupiers failed to comply with these conditions, and IMB obtained possession and exercised its power of sale, deducting the costs of the stay applications from the settlement monies. Great Wall then sought to be indemnified by the occupiers against the plaintiff's costs associated with the stay applications brought by the occupiers.

The central issue before the court was whether section 98 of the Civil Procedure Act 2005 provided the power to make such an indemnity order. The court found that the occupiers brought the stay applications as occupiers of the property, which coincided with the interests of the defendant. The stay orders simply delayed the proceedings and did not comply with the conditions set by the court. The right of the plaintiff to recover the costs of the stay proceedings was available under r 42.25 of the Uniform Civil Procedure Rules as well as pursuant to a contractual entitlement under the mortgage. The court held that it was appropriate in all circumstances to make an indemnity order in favour of the defendant.

The court granted the defendant's application for an indemnity order against the occupiers for the costs incurred by the plaintiff in relation to the stay applications. The court reasoned that the occupiers' actions were in the interests of the defendant, and the stay orders were merely a delay tactic. The court also noted that the plaintiff had a right to recover the costs of the stay proceedings under both statutory and contractual provisions. The final orders made by the court included an indemnity order in favour of the defendant against the occupiers for the costs incurred by the plaintiff in relation to the stay applications.