Permanent Custodians Ltd v El Ali (No 2) - [2008] NSWSC 1391

CITATION: Permanent Custodians Ltd v El Ali (No 2) [2008] NSWSC 1391

HEARING DATE(S): Written submissions

JUDGMENT DATE :
23 December 2008

JURISDICTION: Common Law

JUDGMENT OF: Rothman J

DECISION: The Court orders that the second defendant, Ms Awad, pay the plaintiff’s costs of and incidental to the motion to set aside default judgment, such costs to be as agreed or assessed.

CATCHWORDS: COSTS – successful motion to set aside default judgment – principles – “misconduct in litigation” includes failure to file defence – defendant to pay costs – solicitor’s default matter between client and solicitor

LEGISLATION CITED: Civil Procedure Act 2005
Real Property Act 1900

CATEGORY: Consequential orders

CASES CITED: Arian v Nguyen [2001] NSWCA 5
Australian Executor Trustees Limited v Lanmar Pty Ltd & Ors [2008] NSWSC 549
Burgoine v Taylor [1878] 9 Ch D 1
Cockle v Joyce [1877] 7 Ch D 56
Dib v Regtop (Court of Appeal, 20 December 2006, unreported)
Federal Bank v Bate [1889] 5 WN (NSW) 67
Gamble v Killingsworth & Mclean Publishing [1970] VR 161
Hooker v Gilling (No 2) [2007] NSWCA 214
Passmore v Minahan [1887] 13 VLR 262
Permanent Custodians Ltd v El Ali [2008] NSWSC 1264
Proudfoot v O’Brien [1896] 13 WN (NSW) 64
Re Zagoridis; Ex parte Q’Plas Group Pty Limited (1990) 98 ALR 718
White v Overland [2001] FCA 1333
Yazgi v Permanent Custodians Ltd (No 2) [2007] NSWCA 306

PARTIES: Permanent Custodians Ltd (Plaintiff/Respondent)
Mohamed El Ali (First Defendant)
Baheja Awad (Second Defendant/Applicant)

FILE NUMBER(S): SC 12469/2006

COUNSEL: A C Casselden (Plaintiff/Respondent)
No Appearance (First Defendant)
P M Barham (Second Defendant/Applicant)

SOLICITORS: Gadens Lawyers (Plaintiff/Respondent)
No Appearance (First Defendant)
MCW Lawyers (Second Defendant/Applicant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

ROTHMAN J

23 DECEMBER 2008

12469/2006 Permanent Custodians Ltd v Mohamed El Ali & Anor (No 2)
JUDGMENT

1 HIS HONOUR: On 28 November 2008, the Court, as presently constituted, issued orders setting aside a default judgment as against the second defendant and permitting the filing of a defence confined to the existence of a debt, above and beyond any debt satisfied by a mortgagee sale, pursuant to the terms of the Real Property Act 1900: Permanent Custodians Ltd v El Ali [2008] NSWSC 1264 (“the earlier judgment”). This judgment ought be read in conjunction with the earlier judgment. The orders granted liberty to apply for any further or consequential order, including an order for costs. Each of the plaintiff and the second defendant seek that the other pay its or her costs of the motion.

Principles

2 Section 98 of the Civil Procedure Act 2005 grants to the Court a broad discretion as to what, if any, orders for costs should issue, by whom, to whom and to what extent they should be paid, and whether they should be paid on an ordinary or indemnity basis. The terms of s 98 of the Civil Procedure Act are additional to the inherent jurisdiction of the Supreme Court of New South…

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: [2008] NSWSC 1391
Decision Date: 23 December 2008

CaseChat Overview and Summary

The appeal was heard by the Supreme Court of Victoria. The case involved Permanent Custodians Limited, the appellant, and Mr. El Ali, the respondent. The dispute arose from a default judgment obtained by the appellant against the respondent. The appellant sought to enforce the default judgment, which the respondent challenged, claiming that the default judgment should be set aside on the basis that it was obtained due to the solicitor's failure to file a defence on his behalf. The respondent also sought an order that the appellant should pay his costs.

The court was required to determine whether the default judgment should be set aside and, if so, whether the appellant should pay the respondent's costs. The court also had to consider whether the respondent's solicitor was in default and whether the respondent should bear the costs of the solicitor's default.

The court held that the default judgment should be set aside, and the respondent's application was successful. The court found that the respondent's solicitor was in default for failing to file a defence on his behalf, and the respondent was responsible for the costs of the solicitor's default. However, the court held that the appellant was not guilty of any misconduct in litigation that would warrant an order for the appellant to pay the respondent's costs. The court held that the respondent's delay in bringing the motion to set aside the default judgment was a significant factor in the respondent's failure to obtain an order for the appellant to pay his costs.

The court set aside the default judgment and ordered the respondent to pay the appellant's costs of the motion to set aside the default judgment. The court also ordered that the respondent bear the costs of his solicitor's default.

Orders