Perpetual Trustee Company Limited v El-Bayeh (No. 2)

The dispute between Perpetual Trustee Company Limited, the mortgagee, and El-Bayeh, the mortgagor, arose from a mortgage transaction that was later found to be forged. The mortgage was used as security for a sum that the mortgagor was required to repay by way of restitution. The mortgagee sought an order for possession due to the mortgagor's failure to pay the amount before the court made an order for restitution. The mortgagor argued that the mortgage was invalid, and thus the mortgagee was not entitled to possession.

The court had to determine whether the mortgagee was entitled to an order for possession based on the mortgagor's failure to pay before the restitution order was made, despite the mortgage being forged. The court also needed to address the issue of costs, given the multiple issues in the case and the differing outcomes for the parties. Furthermore, the court had to decide the appropriate rate of interest to be applied to the amount ordered by way of restitution, including whether interest should be payable for the period before the mortgagor was aware of the plaintiff's payment under a mistake, and for the period after the plaintiff's failure to accept a Calderbank offer.

The court found that the mortgagee was not entitled to an order for possession based on the mortgagor's failure to pay, as the mortgage was forged. The court also held that the general rule that costs follow the event did not apply, and that indemnity costs were appropriate given the multiple issues and differing outcomes for the parties. The court considered the Calderbank letters in determining the appropriate costs. Finally, the court ruled that interest should be payable from the date the mortgagor was aware of the plaintiff's payment under a mistake until the date of judgment, and that interest should not be payable for the period after the plaintiff's failure to accept the Calderbank offer.

The court ordered that the mortgagee pay the mortgagor's costs of the proceeding, including indemnity costs, and that interest be payable at the rate of 5.25% per annum from 14 November 2014 until the date of judgment.