Powers v Stoikos

[2007] NSWSC 675

CITATION:	Powers v Stoikos [2007] NSWSC 675
HEARING DATE(S):	15 June 2007
JUDGMENT DATE :	28 June 2007
JURISDICTION:	Equity Common Law
JUDGMENT OF:	Hamilton J
DECISION:	Report remitted to referee for further consideration and report concerning the manner in which he calculated the amounts allowed for the mortgagee’s costs.
CATCHWORDS:	PROCEDURE [117] – Supreme Court procedure – Procedure under Rules of court – Reference by Court to referee – Procedure when report considered by Court.
LEGISLATION CITED:	Real Property Act 1900 s 57 Uniform Civil Procedure Rules 2005 Pt 20 Div 3 r 20.24(2)
CASES CITED:	Banabelle Electrical v State of New South Wales [2005] NSWSC 714 Chloride Batteries Australia Ltd v Glendale Chemical Products Pty Ltd (1988) 17 NSWLR 60 Foxman Holdings Pty Ltd v NMBE Pty Ltd (1994) 38 NSWLR 615 Franks v Berem Constructions Pty Ltd NSWCA 2 December 1998 unreported Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 Pangas v Permanent Trustee of Australia Ltd [2000] NSWSC 140 Seven Sydney v Fuji Xerox [2004] NSWSC 902 Skinner & Edward Builders Pty Ltd v Telecommunications Report (1989) 27 NSWLR 567 Super Pty Ltd v S G P Formwork (Aust) Pty Ltd (1992) 29 NSWLR 549 White Constructions (NT) Pty Ltd v Commonwealth of Australia (1990) 7 BCL 193 Xuereb v Viola (1989) 18 NSWLR 453
PARTIES:	1935/05 Tom Powers (P) Ilias Theodore Stoikos (D1) Apostolos Stoikos (D2) 1937/05 Tom Powers (P & XD) Woollex Trading Pty Limited (D1 & XC1) Dennis Richard Lowe (D2 & XC2) 1938/05 Tom Powers (P) Nicholas Halatsis (D) 10927/05 Tom Wayne Powers (P) Blue Quay Pty Limited (D)
FILE NUMBER(S):	SC 1935/05; 1937/05; 1938/05; 10927/05
COUNSEL:	M J Bransgrove, Solicitor (P) P T Newton (D1 - 1935/05; D2 – 1937/05; D – 10927/05) No appearance (D2 – 1935/05; D1 – 1937/05; D – 1938/05)
SOLICITORS:	Bransgroves (P) Lenehan & Co (Ds)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMON LAW DIVISION

HAMILTON J

THURSDAY, 28 JUNE 2007

ED 1935/05 TOM POWERS v ILIAS THEODORE STOIKOS
ED 1937/05 TOM POWERS v WOOLLEX TRADING PTY LIMITED & ANOR
ED 1938/05 TOM POWERS v NICHOLAS HALATSIS
CLD 10927/05 TOM WAYNE POWERS v BLUE QUAY PTY LIMITED

JUDGMENT

1 HIS HONOUR:

Introduction

2 What is before the Court is a notice of motion relating to the report of a referee under Division 3 of Part 20 of the Uniform Civil Procedure Rules 2005 (“the UCPR”), which is relevant in each of four separate sets of proceedings being proceedings 1935/05, 1937/05 and 1938/05 in the Equity Division, and proceedings 10927/05 in the Common Law Division, all of which matters are before me. Each of those proceedings concerned a separate security by way of mortgage over real property (collectively “the securities”). The primary security was the security concerned in proceedings 10927/05, the other securities being consequential upon that security. That security was over a property at 282 - 288 Botany Road, Alexandria (“the property”).

The report

3 The order by which the reference was made was contained in orders of 4 November 2005 (as varied). The first question the subject of the reference was “what are the plaintiff’s costs, charges and expenses payable under the Securities up to the 2nd August 2005 other than those which were unreasonably (or improperly) incurred or are of an unreasonable amount or are not payable or recoverable by the plaintiff by reason of” four specified costs orders. The second question was in the same terms, save that it asked for a determination of the amount of the plaintiff’s costs up to the referee’s determination. Whilst there is some ambiguity (as to the starting point) inherent in the second question, the parties are agreed that the amount which the referee determined in answer to the second question was inclusive of the amount determined in answer to the first question, and that this was what was intended by the order.

4 The referee was Richard W Gulley, solicitor. He was nominated for appointment by the Court by the President of the Law Society. His report is dated 24 May 2006 (“the report”). The report reveals that he is a solicitor admitted in 1967. He was in about 1999 appointed a costs assessor by the Chief Justice of this Court under the Legal Profession Act 1987 and continues as such under the Legal Profession Act 2004. He has completed 230 assessments. He is also a review panellist and has completed 45 reviews: see pars 2 and 3 of the report. Paragraph 4 of the report specifies the order by which the reference was made and annexes a copy. By par 5, the referee identified the securities and in par 6 he set out the questions he was asked. Those material to the motion I have already set out. By par 7, the referee identified the materials that were before him. They included an itemised bill of costs of some 71 pages, a notice of objection of some 55 pages, and a further notice of objection of some four pages, together with submissions of the plaintiff and the defendants. The itemised bill contained some 1500 items. The amounts claimed by the bill and opposed by the objections are not stated in the report, but totalled $192,814.54 and $163,701.28 respectively, leaving only $29,113.26 uncontested. In par 8, the referee set out the terms of the orders, which excepted some costs from his assessment. In par 9, he referred particularly to the decision of Santow J (as his Honour then was) in Pangas v Permanent Trustee of Australia Ltd [2000] NSWSC 140 in relation to indemnity costs. However, it is to be noted that the criteria by which the referee was ordered to assess the amount of costs were specifically set out in the orders directed to him.

5 Paragraph 10 of the report is of some importance and I set out the whole of that paragraph:

“10 I make the following general observations in relation to my task as the Referee in determining the plaintiff’s costs charges and expenses payable under the Securities:


(i) The plaintiff seeks an hourly rate of $400.00 payable under the securities. The defendant makes no objection to that rate and accordingly I have allowed that rate in my determinations.

(ii) The plaintiff seeks the imposition of GST. I have accepted the submission by the solicitor for the plaintiff that the plaintiff is not registered for GST and therefore would not be entitled to a tax input credit. I have allowed GST where applicable.

(iii) The plaintiff makes claims for emails of an internal nature between members of the staff of the plaintiff’s solicitors. I have had regard to the objections by the defendant and the submissions by the plaintiff on this aspect. I do not consider that the claims for emails to be reasonably incurred [sic]. They appear in most instances to be merely reporting between one solicitor and another and solicitors and the responsible partner. They do not in the circumstances advance the plaintiff’s case. Having said that I have allowed for some internal emails as being reasonable.

(iv) The Securities provide for the minimum 6 minute units. Such method of costing is widely used amongst members of the profession and has received acceptance however not without criticism. The defendant makes objections which basically refer to consecutive attendances. I have taken the objections in account. In the circumstances I do not consider that the decision in Moray v Adrian John Lane NSWSC [Allen J 26 February 1993] (unreported) to apply [sic].

(v) The plaintiff makes substantial claims for the employment of agents in relation to the proposed sale of the securities, the preparation of marketing schemes, inspection of properties and the provision of contracts for sale. I have had regard to the submissions of the plaintiff and the objections of the defendant on this aspect. I have in reaching my determination taken into account the decisions of His Honour Mr Justice Barr of 16th May 2005 and the decision of His Honour Mr Justice Hoeben of 26th July 2005. Having regard to the matters before their Honours and to those judgments I find that the costs were unreasonably incurred by the plaintiff in the circumstances.

(vi) In relation to the preparation of documents the plaintiff seeks to apply the scale as set out in the Securities. The defendant objects to the use of the scale in respect to the preparation of documents. The plaintiff relies on the scale. I have carefully considered this aspect of the matter. The scale provides for in one instance the sum of $2,000.00 for the drafting of a Statement of Claim and Affidavit Verifying. In these matters there were five Statements of Claim. They were similar pleadings and they were drafted on the same day which resulted in a claim for $10,000.00 equivalent to twenty-five hours of work on that day for the plaintiff’s solicitor at the rate of $400.00 per hour. In all the circumstances and despite the existence of the scale as set out in the securities I find such charges to be unreasonable. I have determined what I consider to be a reasonable charge of $3,200.00 in total in relation to the preparation of the Statements of Claim and Affidavits Verifying. I make a similar determination in respect to having the Affidavits Verifying executed. The plaintiff makes a claim in respect to [sic] the five Statements of Claim in a total amount for this task of $2,000.00 which I consider to be unreasonable. I have allowed an amount of $600.00 which I consider to be reasonable in total for that task. I have made similar reductions in respect to the claims by the plaintiff for drafting the Notices of Claim for Possession.

(vii) While I accept the claims for photocopying to be reasonable in all the circumstances I note that the plaintiff seeks substantial amounts for the transmission by facsimile of virtually all correspondence. I find such charges to be unreasonably incurred and I have not allowed for facsimiles where I accept that there was no apparent urgency in relation to the correspondence.”

6 It is to be noted that at least one of the items in par 10 refers to a matter of agreement. Some of them refer to matters of objection. However, the referee does not, in par 10 or elsewhere, specifically state that the only objections or criteria by reference to which he has made deductions from the amount of costs claimed are exhaustively set out in par 10 or elsewhere in the report.

7 In par 11, the referee sets out his findings, including a finding that the costs payable up to 2 August 2005 were $46,887.18 and up to the date of determination $78,638.13, both inclusive of GST. As I have already said, the $78,638.13 is agreed to be inclusive of the $46,887.18. The amount disallowed against the plaintiff’s claim of $192,814.54 was therefore $114,176.14. In par 12, the referee assesses an amount he regarded as reasonable for the preparation of the bill of costs the subject of the reference. In par 13, he dealt again with the claim relating to the employment of agents first dealt with in par 10(v) and also with some incidental matters.

8 No oral hearing was conducted before the referee.

The questions raised

9 By his notice of motion filed 27 September 2006, the plaintiff sought precise orders. The notice of motion did not include a prayer for the outright rejection of the report, but rather sought that the report should be remitted to the referee. The plaintiff also sought the rejection of various specific findings of the referee and the determination of those matters by the Court before the report was remitted.

10 The plaintiff initially sought to lead evidence before the Court other than the evidence before the referee. The evidence before the referee is Exhibit A. Evidence other than the evidence before the referee may be led only with the leave of the Court: see r 20.24(2) (as set out below). However, on the basis that the Court was inclined to remit the report to the referee for clarification, the plaintiff desisted from this application and also from all applications for the rejection of particular findings, save for one, namely, that contained in prayer 2(h). Submissions were made to the Court concerning the rejection of the referee’s finding as to the estate agent’s fees, which Mr Bransgrove, the solicitor for the plaintiff, said were central to the plaintiff’s case. The case relating to the overturning of the other findings mentioned in prayer 2(h) was not pursued with any vigour and I do not propose to overturn them.

11 In the end, the matter proceeded before me on the basis, pursued by both sides, that the questions to be determined by the Court relating to the report were as follows:

(1) Whether there should be a preliminary remitter to the referee for a further report responding to each separate item in the plaintiff’s bill of costs “in the same manner as would be provided on a formal costs assessment”.
(2) Whether the report should be remitted to the referee for a further report clarifying the way in which the sums of $46,887.18 and $78,638.13 were arrived at.
(3) Whether the finding of the report rejecting as unreasonably incurred the amount claimed for the agency fees of Richardson & Wrench (“R&W”) in the sum of $31,683.17 should be rejected; and whether the Court should determine that that amount should be allowed and should remit the report to the referee for redetermination of the amounts of costs bearing in mind the Court’s finding.

The law

12 The powers of the Court in relation to a report made under Division 3 of Part 20 of the UCPR (“the Division”) are set out in r 20.24 as follows:

“ 20.24 Proceedings on the report
(cf SCR Part 72, rule 13)

(1) If a report is made under rule 20.23, the court may on a matter of fact or law, or both, do any of the following:
(a) it may adopt, vary or reject the report in whole or in part,
(b) it may require an explanation by way of report from the referee,
(c) it may, on any ground, remit for further consideration by the referee the whole or any part of the matter referred for a further report,
(d) it may decide any matter on the evidence taken before the referee, with or without additional evidence,
and must, in any event, give such judgment or make such order as the court thinks fit.

(2) Evidence additional to the evidence taken before the referee may not be adduced before the court except by leave of the court.”

13 The principles to be applied in proceedings on a report have been considered in a number of cases, including the decisions of Cole J in Chloride Batteries Australia Ltd v Glendale Chemical Products Pty Ltd (1988) 17 NSWLR 60; Xuereb v Viola (1989) 18 NSWLR 453; Skinner & Edward Builders Pty Ltd v Telecommunications Report (1989) 27 NSWLR 567; White Constructions (NT) Pty Ltd v Commonwealth of Australia (1990) 7 BCL 193; and Foxman Holdings Pty Ltd v NMBE Pty Ltd (1994) 38 NSWLR 615; the decisions of the Court of Appeal in Super Pty Ltd v S G P Formwork (Aust) Pty Ltd (1992) 29 NSWLR 549 and Franks v Berem Constructions Pty Ltd NSWCA 2 December 1998 unreported; and the decision of McDougall J in Seven Sydney v Fuji Xerox [2004] NSWSC 902. McDougall J summarised those principles in Banabelle Electrical v State of New South Wales [2005] NSWSC 714 at [9] as follows:

“The relevant principles, distilled from those decisions, can be stated as follows:

(1) An application under Pt 72 r 13 is not an appeal either by way of hearing de novo or by way of rehearing.

(2) The discretion to adopt, vary or reject the report is to be exercised in a manner consistent with both the object and purpose of the rules and the wider setting in which they take their place. Subject to this, and to what is said in the next two sub paragraphs, it is undesirable to attempt closely to confine the manner in which the discretion is to be exercised.

(3) The purpose of Pt 72 is to provide, where the interests of justice so require, a form of partial resolution of disputes alternative to orthodox litigation, that purpose would be frustrated if the reference were to be treated as some kind of warm up for the real contest.

(4) In so far as the subject matter of dissatisfaction with a report is a question of law, or the application of legal standards to established facts, a proper exercise of discretion requires the judge to consider and determine that matter afresh.

(5) Where a report shows a thorough, analytical and scientific approach to the assessment of the subject matter of the reference, the Court would have a disposition towards acceptance of the report, for to do otherwise would be to negate both the purpose and the facility of referring complex technical issues to independent experts for enquiry and report.

(6) If the referee’s report reveals some error of principle, absence or excessive jurisdiction, patent misapprehension of the evidence or perversity or manifest unreasonableness in fact finding, that would ordinarily be a reason for rejection. In this context, patent misapprehension of the evidence refers to a lack of understanding of the evidence as distinct from the according to particular aspects of it different weight; and perversity or manifest unreasonableness mean a conclusion that no reasonable tribunal of fact could have reached. The test denoted by these phrases is more stringent than ‘unsafe and unsatisfactory’.

(7) Generally, the referee’s findings of fact should not be re-agitated in the Court. The Court will not reconsider disputed questions of fact where there is factual material sufficient to entitle the referee to reach the conclusions he or she did, particularly where the disputed questions are in a technical area in which the referee enjoys an appropriate expertise. Thus, the Court will not ordinarily interfere with findings of fact by a referee where the referee has based his or her findings upon a choice between conflicting evidence.

(8) The purpose of Pt 72 would be frustrated if the Court were required to reconsider disputed questions of fact in circumstances where it is conceded that there was material on which the conclusions could be based.

(9) The Court is entitled to consider the futility and cost of re-litigating an issue determined by the referee where the parties have had ample opportunity to place before the referee such evidence and submissions as they desire.

(10) Even if it were shown that the Court might have reached a different conclusion in some respect from that of the referee, it would not be (in the absence of any of the matters referred to in sub para (6) above) a proper exercise of the discretion conferred by Pt 72 r 13 to allow matters agitated before the referee to be re-explored so as to lead to qualification or rejection of the report.

(11) Referees should give reasons for their opinion so as to enable the parties, the Court and the disinterested observer to know that the conclusion is not arbitrary, or influenced by improper considerations; but that it is the result of a process of logic and the application of a considered mind to the factual circumstances proved. The reasoning process must be sufficiently disclosed so that the Court can be satisfied that the conclusions are based upon such an intellectual exercise.

(12) The right to be heard does not involve the right to be heard twice.

(13) A question as to whether there was evidence on which the referee, without manifest unreasonableness, could have come to the decision to which he or she did come is not raised ‘by a mere suggestion of factual error such that, if it were made by a trial judge, an appeal judge would correct it’. The real question is far more limited: ‘to the situation where it is seriously and reasonably contended that the referee has reached a decision which no reasonable tribunal of fact could have reached; that is, a decision that any reasonable referee would have known was against the evidence and weight of evidence’.

(14) Where, although the referee’s reasons on their face appear adequate, the party challenging the report contends that they are not adequate because there was very significant evidence against the referee’s findings with which the referee did not at all deal, examination of the evidence may be undertaken to show that the reasons were in fact inadequate because they omitted any reference to significant evidence.

(15) Where the court decides that the reasons are flawed, either on their face or because they have been shown not to deal with important matters, the court has a choice. It may decline to adopt the report. Or it may itself look at the detail of the evidence to decide whether or not the expense of further proceedings before the referee (which would be the consequence of non adoption) is justified.”

Determination of the questions

14 I shall now proceed to consider separately the questions to be determined as set out in [11] above.

(1) Should the referee have responded to each item in the bill of costs individually?

15 This matter was dealt with by Santow J in Pangas supra, a case to which the referee adverted. That was a decision, not of proceedings upon a referee’s report, but leading to the appointment of a referee to determine a mortgagee’s costs. In that case, his Honour said at [26]:

“The referee can then in economic [sic] fashion be required in relation to those bills challenged to form a broad assessment as to whether in the referee’s opinion it would appear that any of the challenged bills were unreasonably incurred or were of an unreasonable amount and similarly with the disbursements. In those cases, the referee should by way of broad appraisal or assessment only, indicate the overall adjustments that should be made to the bill so that it satisfies the indemnity basis of taxation, doing so as a matter of broad impression rather than with absolute precision. Otherwise the costs of the process will be uneconomic, relative to the amounts involved.”

That statement of his Honour, with which I respectfully agree, emphasises that the whole purpose of resorting to reference to a referee rather than costs assessment in relation to a mortgagee’s costs is to save money by way of the referee being able to make a broad assessment, rather than proceeding item by item. The Court should not take a stance, particularly in these days of concern about the costs of litigation, which would prevent this broad approach being taken. This accords with the broad approach taken by Einstein J in fixing a global amount of costs rather than referring the matter to assessment in very large litigation in Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23.

16 It appears that the referee in these proceedings did not simply take a broad brush approach, in the sense of allowing or disallowing a round sum figure or round sum figures. It is to be inferred that he calculated deductions under various of the items in par 10 of the report, but he certainly did not record his findings item by item. Whether he sufficiently exposed his method of calculation of the sums allowed I shall return to below. But there was no requirement, explicit or implicit, in the Court’s orders for him to incorporate in his report a determination of objections item by item. I decline to remit the report to the referee for individual findings on each of the 1,500 odd items in the bill of costs.

(2) Should the report be remitted to the referee for clarification as to how the sums of $46,887.18 and $78,638.13 are made up?

17 In light of Santow J’s dictum in Pangas, I initially had some doubt as to whether there should be a remitter for this purpose, or whether the simple statement of the amounts in which the referee assessed the costs should be taken as within a referee’s entitlement to make a broad assessment of the costs to be recovered. However, I have a difficulty with the latter proposition. The grounds on which a referee’s report may be reviewed include, as stated in principle (11) in McDougall J’s statement in Banabelle as set out in [13] above, lack of such reasons for the opinion as to enable those interested (including the Court) “to know that the conclusion is not arbitrary, or influenced by improper considerations; but that it is the result of a process of logic and the application of a considered mind to the factual circumstances proved”.

18 There are number of difficulties with the referee’s report from that point of view:

(1) The report does not explicitly state that the only items by reference to which deductions were made from the plaintiff’s bill of costs are those set out in par 10 of the report. That paragraph does not state, nor does any other paragraph state, that the objections specified in that paragraph are the only criteria by reference to which deductions have been made by the referee from the plaintiff’s claim.
(2) As I have already stated, at least one of the items in par 10 of the report is an item of agreement rather than of dispute.
(3) The language of a number of items in par 10 is so economical that I was unable to tell whether or not any deduction had been made from the plaintiff’s claim pursuant to the subject matter of those items. Those items include item (ii). I could not tell whether any deduction had been made in respect of GST on any items. When I asked the defendants’ counsel if he knew whether any such deduction had been made, he frankly replied that he did not know. Similarly, in item (iv) the referee reveals that he has taken into account objections relating to consecutive attendances, but I find it very hard to tell whether any amounts were disallowed for that reason. Again, the defendants’ counsel could not assist me.
(4) No quantification is made of the total amount deducted in respect of any of the items set out in par 10, nor is any calculation exposed which would permit it to be concluded that it was only by reference to the sum of the deductions calculated under those items that the reduction was made from the plaintiff’s claim to the amounts in fact allowed. The exercise does appear to have been done by reference to precise amounts of dollars and cents rather than to any rounded figure. Contrast the very round figure of $50 million in which Einstein J made a global order for costs in Idoport . But the way in which the assessor progressed from the figures claimed to the amounts allowed is not exposed.

19 In those circumstances, despite the Court’s general predilection to adopt referees’ reports, I have come to the conclusion that the referee’s process of reasoning or calculation resulting in the figures assessed has not been sufficiently exposed to satisfy the criterion for validity set out in item (11) in McDougall J’s list in Banabelle.

20 For that reason, I propose to remit the report to the referee for further consideration and further report specifying the calculation as a result of which the referee reduced the amounts claimed to each of the sums of $46,887.18 and $78,638.13 allowed by him in answer to the first and second questions posed. In carrying out this exercise, the referee should specify the total amount deducted by him by reference to each of the items in par 10 of the report which led to a deduction being made. If other deductions were made by him, the referee should specify the ground and amount of those deductions, at least by category.

21 The report will be remitted to the referee for a further report in accordance with these reasons for judgment.

(3) Should the finding that the amount of $31,683.17 claimed for R&W’s agency fees was unreasonably incurred be rejected?

22 A finding of a referee on a matter of fact should not be rejected unless there is “patent misapprehension of the evidence or perversity or manifest unreasonableness in fact finding”: Banabelle principle (6). The evidence before the referee is not to be examined unless “it is seriously and reasonably contended that the referee has reached a decision which no reasonable tribunal of fact could have reached; that is, a decision that any reasonable referee would have known was against the evidence and weight of evidence”: Banabelle principle (13).

23 Here, the plaintiff has been seriously contended that there was no evidence which would support the referee’s finding that R&W’s fees were unreasonably incurred. In those circumstances it is appropriate that I examine the evidentiary material before the referee relevant to this finding. That material is contained in Exhibit A.

24 The referee’s language in his finding as to the matters taken into consideration on this factual issue is again economical. He does refer to the plaintiff’s submissions and the defendants’ objections “on this aspect”. He also states that he “took into account the decisions in the matter” of Barr J on 16 May 2005 and Hoeben J on 26 July 2005. He says that, in coming to his conclusion, he had regard to the matters before their Honours and to those judgments. Whilst he did not advert to it in the relevant portions of his report, it is also clear from par 7(xvii) and (xviii) of the report that he had before him the affidavit of James Socrates Arkoudis sworn 12 September 2005 and a copy of correspondence between the parties.

25 Stated briefly, the facts revealed by the relevant material before the referee are as follows. To simplify matters, I trace the facts as they relate to Common Law proceedings 10927/05, without reference to the similar facts in the Equity proceedings. The loan secured by the mortgage was $1 million lent on 3 December 2004 by the plaintiff to Blue Quay Pty Ltd. The term of the loan was until 3 September 2005. Interest was to be paid monthly on the 3rd of each month. The interest of $16,667 due on 3 March 2005 was not paid on that day, but was paid eight days later, on 11 March 2005. It was deposed that there was a telephone conversation in which it was agreed that, if the payment were made on or before 11 March 2005, penalty interest need not be paid. Four days after the payment of the $16,667, on 15 March 2005, the statement of claim in proceedings 10927/05 was filed. The statement of claim concedes that the interest due on 3 March was paid after the due date at the concessional rate, but alleges that the mortgage remained in arrears. In the statement of claim, the plaintiff claims an order for possession of the property and judgment for $1 million plus interest.

26 On 1 April 2005, a defence was filed pleading the absence of a statutory notice under s 57 of the Real Property Act 1900 in respect of the alleged monetary default before the proceedings were commenced. Also on 1 April 2005, the plaintiff’s solicitors engaged real estate agents to organise an auction for 18 May 2005 and to prepare a marketing plan. On 11 April 2005, the plaintiff’s solicitors wrote to Lachlan Gyles of counsel asking for advice as to whether the acceleration notice that they had served was valid, bearing in mind that a s 57 notice had not been served; to settle an enclosed draft s 57 notice; and to draft, if deemed appropriate, a summary judgment application in proceedings 10927/05. This letter thus conceded the defence as filed.

27 On 3 May 2005, the plaintiff filed an amended statement of claim alleging a non monetary breach of the mortgage and the defendant subsequently filed an amended defence. On 13 May 2005, the defendant filed a notice of motion for an injunction restraining the exercise of the power of sale. That motion was what was heard and determined by Barr J on 16 May 2005. His Honour in his judgment summarised the facts, restrained the plaintiff from exercising its power of sale and ordered that the plaintiff remove all signs erected on the property. On 18 May 2005, R&W sent to the plaintiff their invoice for $31,683.17, being the amount claimed in respect of auction fees pursuant to cancellation of their instructions. On 24 May 2005, the plaintiff filed a notice of motion seeking dissolution of the injunction granted by Barr J. That motion was heard by Hoeben J on 25 July and, on 26 July 2005, his Honour delivered his judgment referred to in [24] above dismissing the plaintiff’s notice of motion, so that the injunction remained in force.

28 Application was made by the plaintiff for summary judgment in the proceedings. This application was heard by Macready AsJ, and, although his Honour’s judgment is not adverted to by the referee, there was before the referee the order by which his Honour dismissed the summary judgment application on 28 July 2005.

29 These were relevant facts that were before the referee when he made his finding that R&W’s fees had been unreasonably incurred. It is not for the Court to decide whether or not it would have made a similar finding, but the referee’s finding can be rejected only if no reasonable referee could have come to the decision on the facts before the referee as outlined above. I am of the view that the Court cannot conclude that no reasonable referee could have found that the incurring of these fees was unreasonable. The plaintiff acted hastily in a situation of great uncertainty as to whether the power of sale had been enlivened and incurred a very large amount of fees in a short time. I refuse to reject the referee’s finding in this regard.

30 In those circumstances, the only basis on which the report will be remitted to the referee is as set out in [20] above.

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