Perpetual Corporate Trust Ltd v Cousins
[2014] NSWSC 1564
•07 November 2014
Supreme Court
New South Wales
Medium Neutral Citation: Perpetual Corporate Trust Ltd v Cousins [2014] NSWSC 1564 Hearing dates: 7 November 2014 Decision date: 07 November 2014 Jurisdiction: Common Law Before: Davies J Decision: 1. The Second Defendant's Defence filed 18 August 2014 is struck out.
2. Judgment for the Plaintiff against the Second Defendant in the amount of $543,453.25.
3. Pursuant to s 101 of the Civil Procedure Act 2005 (NSW), the Second Defendant is to pay interest on the debt in Order 2 at the highest rates prescribed by the Plaintiff in the Loan Contract (as that term is defined in the amended Statement of Claim).
4. The Second Defendant is to pay the Plaintiff's costs on an indemnity basis.
5. The Plaintiff is to file and serve any reply to the First Defendant's Amended Defence on or before 21 November 2014.
6. The First Defendant is to serve the evidence upon which she relies on or before 12 December 2014.
7. The First Defendant is to pay the Plaintiff's costs of the Plaintiff's Notice of Motion filed 15 September 2014 and the Defendants' Notice of Motion filed 3 October 2014 that relate to the First Defendant's Defence.
Catchwords: PROCEDURE - costs - judgment against guarantor - whether costs payable on an indemnity basis - term of the guarantee requiring payment on an indemnity basis - where borrower seeks indulgence to file amended defence - costs payable by borrower Legislation Cited: Civil Procedure Act 2005 (NSW) Category: Interlocutory applications Parties: Perpetual Corporate Trust Ltd (Plaintiff)
Colleen Judith Cousins (First Defendant)
Cousins Property Group Pty Ltd (Second Defendant)Representation: Counsel:
B Koch (Plaintiff)
R Murphy (Defendants)
Solicitors:
Henry Davies York (Plaintiff)
Somerville Legal (Defendants)
File Number(s): 2013/266544
Judgment
These proceedings commenced on 2 September 2013 seeking possession of land at 30 The Boulevarde, Mullaway, claiming a monetary judgment against the First Defendant and a monetary judgment against the Second Defendant as guarantor.
The First Defendant filed a Defence on 18 August 2014 saying that the First Defendant did not agree with the Statement of Claim. The Defendant then went on to say that she had tried to settle the matter over the previous 15 months but the Plaintiff had refused all reasonable offers. She said that the last offer to settle in July (presumably 2014) had not been acknowledged by the Plaintiff.
That Defence was filed at a time when the First Defendant was unrepresented. It was clearly bad in form and did not disclose any defence known to the law. For reasons that are not clear, the same Defence was filed again by the First Defendant on 2 September 2014.
On 15 September 2014 the Plaintiff filed a Notice of Motion which sought a number of orders, including the striking out of the First Defendant's Defence and for judgment to be entered against the First Defendant. The Notice of Motion also sought orders against the Second Defendant which, on 18 August 2014, had filed a Defence in a very similar form to that filed by the First Defendant.
On 3 October when the First and Second Defendants were represented by their present solicitors, they filed a Notice of Motion seeking leave for the Defendants to file Amended Defences in the form annexed to the affidavit of Ryan Michael Murphy sworn 3 October 2014. That affidavit was sworn in support of the Motion. The affidavit did nothing more than annex the proposed forms of the Defences of each of the Defendants.
The Motions both came before the Registrar on 20 October 2014. On that day agreement on a number of matters was reached and consent orders were made that provided for the First Defendant's Defence to be struck out and for the First Defendant to have leave to file and serve an Amended Defence in the form attached to Mr Murphy's affidavit. Directions were also given for the service of evidence by the First Defendant. The costs of the two Notices of Motion were reserved by the Registrar.
The Motions have come before me today for matters not dealt with in the consent orders to be determined. The parties have reached substantial agreement about matters, but there are two issues associated with costs left for my determination.
The first of those issues concerns whether the Plaintiff is entitled to indemnity costs from the Second Defendant. The Second Defendant submits that costs should only be ordered on the ordinary basis because the First Defendant continues to defend the proceedings and the guarantee given by the Second Defendant is in respect of the loan which is now in contention. The Second Defendant further submits that costs are ultimately in the discretion of the court.
Clause 14.3 of the Deed of Loan and Guarantee provides:
If a default occurs, you indemnify us on a full indemnity basis against all expenses and losses which we incur in connection with the default event; examples of these include:
...
14.3.3. legal expenses
Clause 29.2 in Part 6 headed GUARANTEE PROVISIONS provides:
Parts 1, 3, 4 and 5 of this agreement apply to these guarantee provisions as if set out in full in these guarantee provisions.
Clause 14.3 falls within Part 4 of the Deed.
Clause 30.3 provides:
If for any reason any of the Borrower's obligations in this agreement is void, voidable or unenforceable, you indemnify us against non-payment of any money and non-performance or non-observance of any of the Borrower's obligations, as if those obligations had been wholly valid and enforceable.
The effect of Clause 30 is to make the continued defence of the claim irrelevant from the point of view of costs of the proceedings against the Second Defendant. Moreover, where the Second Defendant and the Plaintiff agreed that costs would be payable on an indemnity basis in the event of a default, which has resulted in the present judgment against the Second Defendant, there is no basis for the exercise of a discretion to order costs on the ordinary basis.
The second issue concerns the costs of the two Notices of Motion. It does not appear that prior to the filing of the Notice of Motion by the Plaintiff, any correspondence was directed to the First Defendant about the form of her Defence. Nevertheless, the Defence was a defence that could never have been allowed to remain and was always liable to be struck out. The First Defendant effectively recognised that when her legal representatives commenced acting for her by the Motion they filed on 3 October 2014. By that Motion the First Defendant has sought an indulgence to be allowed to file a defence that properly raises issues for determination by the Court.
The First Defendant submits now that she should not have to pay the costs of the Motion because when the matter came before the Registrar, the Plaintiff consented to the filing of the Amended Defence. Whilst that is true, at the time the Plaintiff filed its Notice of Motion on 15 September 2014, it did not have any proposed defence from the First Defendant. That was only provided in the annexure to Mr Murphy's affidavit filed on 3 October with the First Defendant's Notice of Motion.
In those circumstances, it does not seem unreasonable that the Plaintiff should have filed its Motion in the form it did but, nevertheless, have subsequently consented to the filing of the Amended Defence when it saw the form of it.
The First Defendant, as I have said, was seeking an indulgence because leave was needed, at that stage, to file an amended defence. Where a party seeks an indulgence, ordinarily they will be required to pay the costs of any application that grants them that indulgence.
Accordingly, the First Defendant should pay the Plaintiff's costs of the Plaintiff's Notice of Motion dated 15 September 2014 and the First Defendant's own Motion filed 3 October 2014 that relate to the First Defendant's Defence.
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Decision last updated: 12 November 2014
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