Pangas v Permanent Trustee Australia Limited - [2000] NSWSC 140

CITATION: Pangas v Permanent Trustee Australia Limited [2000] NSWSC 140

CURRENT JURISDICTION:
Equity

FILE NUMBER(S): SC 2362/99

HEARING DATE(S): 6/10/1999

JUDGMENT DATE: 10 March 2000

PARTIES :

Peter Jonathan Pangas (First Plaintiff)
Wendy Robynne Palmer (Second Plaintiff)
Bryan Wardley Jackson (Third Plaintiff)
Permanent Trustee Australia Limited (First Defendant)
Jason Christopher Pangas (Second Defendant)

JUDGMENT OF: Santow J

COUNSEL : G M Johnston (Third Plaintiff)
P B Walsh (First Defendant)
C Cominos (Second Defendant)

SOLICITORS:
Miller Goddard (Third Plaintiff)
Sunman & Walker (First Defendant)
Conway MacCallum (Second Defendant)

CATCHWORDS: PROCEDURE — Mortgagee’s costs on an indemnity basis — Construction of relevant provisions — Widest or narrower basis of determining indemnity costs — Need for mortgagee reasonably to particularise basis for charging legal costs — Approach using referee to appraise mortgagee’s costs not to be so precise as to add disproportionately to costs — Costs of present proceedings to await result of referee’s appraisal.

LEGISLATION CITED: Legal Profession Regulations 1994 (NSW) para 22A
Supreme Court Act s76
Supreme Court Rules Part 52A r32, r37; Pt 72 r2

CASES CITED: AGC (Advances) Limited v West (1986) 5 NSWLR 301
Elders Trustee and Executor Co Limited v Eaglestar Nominees Limited (1986) 4 BPR 9205
Gomba Holdings UK Limited v Minories Finance Limited (No. 2) [1993] Ch 171
Project Research Pty Ltd v Permanent Trustee of Australia Ltd (Hodgson J, 14 December 1990 in Butterworths Property Services (1990) 5 BPR 11,225)
Sandtara Pty Limited v Australian European Finance Corporation Limited (1990) 20 NSWLR 82
Re Shanah an (1941) 58 WN 132
Smits v Buckworth (SCNSW No 3869/96, unreported)

DECISION: Mortgagee’s costs to be further particularised and then appraised by referee.

IN THE SUPREME COURT
OF NEW SOUTH WALES
IN EQUITY

SANTOW J
No. 2362/99

PETER JONATHAN PANGAS
First Plaintiff
WENDY ROBYNNE PALMER
Second Plaintiff
BRYAN WARDLEY JACKSON
Third Plaintiff

PERMANENT TRUSTEE AUSTRALIA LIMITED
First Defendant
JASON CHRISTOPHER PANGAS
Second Defendant

JUDGMENT
10 March 2000

introduction
The Central Issue

1 The issue before me concerns the right of a mortgagor (the Third Plaintiff) to have accounts taken as between mortgagor and mortgagee as to costs and expenses purportedly incurred by the mortgagee (the First Defendant) pursuant to its mortgage, including legal costs and disbursements. Associated with that question is the basis for such accounting having regard to the relevant provisions of the mortgage. 2 This is the residual issue after the parties reached agreement regarding the distribution of the proceeds of sale of the property, with $23,000 agreed to be held back in an interest bearing deposit. That was the sum anticipated to cover further costs not ascertained as at the date of consent orders made by me on 6 October 1999 giving effect to the agreement. There are the other costs in respect of which an accounting is sought, as revealed in Annexure “E” to the affidavit of the Plaintiffs’ solicitor John Russell Miller dated 14 May 1999. A copy of that document is attached to the Third Plaintiff’s submissions dated 22 October 1999.…

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: [2000] NSWSC 140
Decision Date: 10 March 2000

CaseChat Overview and Summary

The case of Pangas v Permanent Trustee Australia Limited involved the applicant, a borrower, and the respondent, a mortgagee, who sought to enforce a mortgage. The primary dispute centred on the calculation of legal costs incurred by the mortgagee in enforcing the mortgage, specifically whether these costs should be determined on an indemnity or a wider basis. The matter was heard in the Supreme Court of Victoria. The court had to decide whether the mortgagee was required to particularise the basis for charging legal costs when applying for an indemnity basis, and if the approach using a referee to appraise the mortgagee's costs should be precise or if a more flexible approach would suffice.

The legal issues at hand involved interpreting the relevant provisions of the mortgage deed and determining the appropriate basis for assessing the mortgagee's costs. The court considered whether the mortgagee had to specifically identify the basis for charging legal costs or if a general application would suffice. Additionally, the court examined whether the use of a referee to appraise the mortgagee's costs should be strictly precise or if a less rigid approach would be appropriate. The case hinged on the interpretation of the relevant provisions and the equitable principles that should guide the assessment of costs in such circumstances.

The court ruled that the mortgagee was not required to particularise the basis for charging legal costs but needed to reasonably particularise the basis for charging costs on an indemnity basis. The court also found that the approach using a referee to appraise the mortgagee's costs should not be so precise as to add disproportionately to the costs. This approach balanced the need for equitable assessment of costs with the practicalities of enforcing a mortgage. The court's decision provided clarity on the requirements for determining indemnity costs in mortgage enforcement proceedings, ensuring that the process was fair and reasonable for both parties involved.

The final orders of the court were that the mortgagee was to reasonably particularise the basis for charging costs on an indemnity basis and that the costs of the present proceedings would await the result of the referee’s appraisal. This decision provided a framework for future cases involving similar disputes, ensuring that the enforcement of mortgages would be conducted in a manner that was both equitable and efficient.

Orders