St George Bank Limited v McCormack - [2008] SASC 8

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
ST GEORGE BANK LIMITED v MCCORMACK
[2008] SASC 8
Reasons of Judge Lunn a Master of the Supreme Court
21 January 2008
REAL PROPERTY
Mortgagees claiming possession of mortgaged property under Part 17 of the Real Property Act - whether entitlement barred by having claimed an excessive amount for enforcement expenses in the s 55A notice - Court summarily considering whether such amount excessive - whether Court should do so where the point is not taken by the defendants - whether possible for mortgagees to assess properly the amount of enforcement expenses when preparing a s 55A notice - consideration of costs and disbursements properly allowable for various items of work involved in preparing and serving a s 55A notice - in some actions held amounts claimed were excessive and in others held question not able to be determined summarily.

ST GEORGE BANK LIMITED v MCCORMACK
[2008] SASC 8

JUDGE LUNN: On 3 August 2007 the plaintiff issued this action under Part XVII of the Real Property Act seeking an order for possession of the property at 1 Solandra Crescent, Modbury North of which the defendant is the registered proprietor. The summons was supported by an affidavit of a New South Wales collections officer of the plaintiff who deposed that on 14 January 2003 the defendant had executed a mortgage over the property to secure borrowings from the plaintiff. The mortgage and the plaintiff’s standard conditions of mortgage were exhibited to the affidavit. It is alleged that as at 23 July 2007 the defendant was in arrears in the sum of $5,746.09 in his monthly payments and that the balance of the loan, including the arrears, was $145,746.09.
The affidavits filed by the plaintiff established, and it has not been disputed, that on 18 May 2007 a default notice under s 55A of the South Australian Law of Property Act 1936 (“s 55A”) dated 9 May 2007 was duly served on the defendant by being affixed to the front door of the mortgaged property. The plaintiff concedes that s 55A applies to this mortgage. The contents of the notice were as follow:
DEFAULT NOTICE
FROM ST GEORGE BANK LIMITED ACN 055 513 070 AS SUCCESSOR IN LAW TO THE BANK OF SOUTH AUSTRALIA (“THE LENDER”)
To:` Mark McCormack
TAKE NOTICE THAT:
APursuant to a credit contract between the Lender and you (“the Credit Contract”), the Lender advanced monies to you.
BAs security for the advances, you gave a mortgage over 1 Solandra Crescent MODBURY NORTH SA 5092 (“the Property”) in favour of the Lender (“the Mortgage”).
CThis is a notice pursuant to section 55A of the Law of Property Act 1936 (SA) and section 132 of the Real Property Act 1886 (SA), the Credit Contract and the Mortgage.
DThere has been a default under the terms of the Credit Contract and the Mortgage because instalments of principal, interest and fees in the sum of $2,861.33 as at 10 May 2007 (“the Arrears”) were not paid when due (“the Default”).
ETo remedy the Default, the Lender requires you to pay the Arrears to it within 31 days of the date of this notice * (“the Grace Period”).
FUnless the requirements of this notice are complied with, the Lender proposes to exercise a power of sale in respect of the Property, and take such other action under the Mortgage and the Credit Contract as it sees fit.
GAs at 10 May 2007 the total amount outstanding was $142,861.33 increasing at the rate of 8.17% per annum plus the Lender’s costs and charges payable by you under the Credit Contract and the Mortgage. If the Default is not corrected within the Grace Period then the Lender can require you to pay the total amount outstanding including default interest which will be payable on the total amount outstanding at the end of the Grace Period.
HIn addition, the Lender demands payment of the sum of $597.63 being the costs of issuing this notice within 31 days from the date of this notice (“Enforcement Expenses”).
IIf a subsequent default of the same kind as is specified in this notice occurs during the Grace Period that default may be the subject of enforcement proceedings without further notice if it is not remedied within the Grace Period.
IMPORTANT INFORMATION TO NOTE:
(1)You may pay the Arrears and the Enforcement Expenses to the Lender by sending it to St George Bank Limited at 4-16 Montgomery Street, Kogarah, NSW 2217 for the attention of Kerrie Jacklin. If you have any questions in relation to this notice, please contact Kerrie Jacklin on 02 9553 5338.
(2)*The expression “date of this notice” as used in this notice means the date on which the notice was delivered to you or the date it bears whichever is the later. If sent by post, it will be deemed to have been received by you on the date it would have been delivered in the ordinary course of post or the date it bears whichever is the later.
(3)References to “you” or “your” in this notice are directed to the person or persons to whom this notice is addressed. If there are more than one persons to whom this notice is addressed “you” or “your” includes any one of those persons.
DATED:9 May 2007
(Signed)
James David Mckenzie Graham
of Kemp Strang solicitors authorised to issue this notice on behalf of the Lender.
The summons first came on for hearing before another Master on 26 September 2007. The defendant’s fiancé attended and sought an adjournment to pay the arrears. The Master raised an issue about an exhibit to an affidavit and requested the plaintiff’s solicitors to file an affidavit justifying the enforcement expenses of $597.93 referred to in the s 55A notice. (There is no suggestion that the plaintiff’s solicitor objected to this requisition from the Master). The Master adjourned the summons to 26 October.
On 16 October the plaintiff filed an affidavit of James Graham, a solicitor in New South Wales, who is a partner in the firm who are the New South Wales solicitors for the plaintiff. That affidavit set out brief details of the items of work of the plaintiff’s solicitors claimed in the enforcement expenses and allocated charges for them in accordance with the scale of solicitors’ charges in the First Schedule to the South Australian Supreme Court Civil Rules 2006. Those charges, together with two disbursements and GST, totalled $609.95 which exceeded by $12.32 the enforcement expenses stipulated in the s 55A notice. These items of work and disbursements will be referred to in more detail below.
During September 2007 the Master who had heard the summons on 26 September had required the plaintiffs in at least 10 actions under Part XVII to file affidavits giving details of the enforcement expenses claimed in the s 55A notices in those matters where it appeared to him that the amounts claimed were in excess of the usual range of such expenses. (There is a wide variation in the s 55A notices seen by the Court in the amounts claimed for enforcement expenses). Where the actions were not otherwise resolved a number of these affidavits were filed. There were five actions, including this action, where the same solicitors were acting for different plaintiffs and in each of which a similar affidavit of Mr Graham had been filed in justification of the enforcement expenses claimed. When each of these five actions next came on for hearing before me I adjourned them to a common time on 8 November so that I could consider all the affidavits of Mr Graham which had been filed.
On 8 November Mr McNamara QC appeared for all five plaintiffs. A solicitor appeared for the defendant in Perpetual Trustees Victoria v Swingler, 115/07, and intimated that his client took no point on the enforcement expenses claimed in the s 55A notice. I indicated in view of that concession I did not intend to pursue any issues raised by the affidavit of Mr Graham in that action. That action was then adjourned off to a subsequent possession list. That left me to consider the affidavits of Mr Graham in four actions including this action. The fiancé of the defendant in this action attended but took no part in the hearing. She left partway through the long hearing after I indicated that in any event I would be reserving my decision and no order for possession would be made on that day.
In the light of what eventuated in the course of argument it is expedient to deal first with the issues in this matter of McCormack and to deal subsequently with the other three actions in the light of what I rule in this matter.
Mr McNamara QC initially submitted seven grounds, each of which he contended either precluded the Court from examining at this time the amount of the enforcement expenses claimed in the s 55A notices, or, if they were to be examined and to be found to have been overstated, that the s 55A notice was not thereby invalidated:
1It was outside the proper function of a Master of his own volition to require the plaintiff’s solicitors to justify the enforcement expenses claimed and to rule on whether they were excessive when the point had not been expressly taken by the defendants.
(In some other cases the requisition had been raised where the defendants had not attended). Although it has not been my personal practice, it has been a practice adopted by other Masters of this Court. However, when, after some argument, I indicated that I intended to state the question to the Full Court because of its fundamental importance to the way Masters had conducted Part XVII proceedings, Mr McNamara QC withdrew his submission.
While in view of the withdrawal of the submission it is not necessary for me to deal with the argument put forward by Mr McNamara QC, it is desirable that I make clear what is my view of the legitimate function of a Master in such proceedings on enforcement expenses. These comments are limited to enforcement expenses which are legal costs charged by solicitors under the Court scale and disbursements incurred by such solicitors which are regularly the subject of taxation or adjudication by Masters of this Court. Very few defendants to Part XVII summonses are legally represented. Most cannot afford legal assistance. Generally they cannot get legal aid except perhaps some brief telephone advice. Virtually none have any means of knowing whether the enforcement expenses claimed are justified or not. (Some have expressed dismay at having to pay several hundred dollars for them to have been served with a one or two page document!) In some cases where details are put forward of these expenses it is quite clear to a Master with his experience as a taxing officer that the amounts claimed are either clearly justified or clearly excessive. (It is a situation similar to where a Justice of the Court might refer to a Master an inquiry about the quantum of costs under 6R 270). If on a cursory review of the particulars given there is some doubt about whether the amount is justified, the defendants would be informed and would be asked whether they wished to pursue the point through a formal adjudication on the costs, with the attendant risk of additional costs if they lost. That situation has never arisen before me. (In the matter of Australian Central Credit Union v Page, mentioned below, the procedure adopted was with the concurrence of the plaintiff’s solicitors). If some issue estoppel is created by a determination of a contentious issue of costs, it would only be after a formal adjudication of them.
From my experience, and from enquiries from other Masters, I am not aware of any instance where a solicitor whose s 55A enforcement expenses have been queried by a Master has previously raised any objection to supplying details of how the costs were made up and of having the Court summarily review them. Some have welcomed the opportunity to have their level of charging checked by the Court. This Court is entitled to supervise the charges made by its practitioners.
Whenever s 55A enforcement expenses have been queried by a Master the Masters have endeavoured to deal with the issue summarily and expeditiously and with as little inconvenience and costs to the parties as possible.
2The amount of the expenses should not be reviewed unless the defendant has first paid the arrears of interest into Court.
It was submitted that the decision of the High Court in Inglis v Commonwealth Trading Bank of Australia (1972) 125 CLR 161 required that payment into Court of the mortgage debt should be a condition of the defendant being permitted to contest the mortgage enforcement expenses. In Elders Limited v Di Giorgio, 12 September 2007, Judgment No S 6364, King AJ held that the Court had a discretion whether to require payment into Court in accordance with Inglis’ case. In actions under Part XVII usually only a delay of a few weeks is required for the plaintiff to produce the necessary affidavit and for the Court to rule whether the costs are clearly justifiable or not. If there was some evidence that such a delay would be of prejudice to the plaintiff, or if a much greater delay was to be involved in adjudicating on the enforcement expenses, it may be that the Court would exercise its discretion to impose such a term of payment in, but that is not the case here or in the other three cases.
3 Any challenge to the enforcement expenses could only be mounted by other procedures.
Mr McNamara QC submitted that defendants could only challenge the enforcement costs as being excessive by either their own proceedings under s 55A(3) or under s 99(3) of the Consumer Credit Code (“the Code”). (The Code applies in all four actions).
(1) Under s 55A(3).
S 55A provides:
Enforcement of rights against mortgagor
55A(1) A right of sale or foreclosure in respect of mortgaged land, a right to enter into possession of mortgaged land or a right to appoint a receiver in respect of mortgaged land shall not be enforceable by the mortgagee under a mortgage to which this section applies against the mortgagor by action or otherwise unless –
(a)the mortgagee has served upon the mortgagor a notice in writing –
(i)alleging a breach of a covenant or condition of the mortgage by the mortgagor; and
(ii)if the breach is capable of remedy, requiring the mortgagor within one month after service of the notice, or such longer period as may be stipulated in the notice, to remedy the breach; and
(iii)if the mortgagee seeks compensation for the breach, requiring the mortgagor within one month after service of the notice of such longer period as may be stipulated in the notice, to pay to the mortgagee the amount of the cost and expenses stipulated in the notice, that the mortgagee has reasonable incurred in consequence of the breach; and
(b)where requirements are made of the mortgagee in the notice, he has failed to comply with those requirements.
(2)Where a mortgage to which this section applies contains a provision by virtue of which a liability to repay moneys under the mortgage falls due in the event of a breach of a covenant or condition of the mortgage at an earlier date than if there were no such breach, that provision shall be inoperative unless a notice has been served upon the mortgagor in conformity with the provisions of subsection (1) of this section and where requirements are made of the mortgagor in the notice, he has failed to comply with those requirements.
(2a)Upon the application of a mortgagee, a court may dispense, upon such terms and conditions as it thinks fit, with the requirement of notice under this section.
(2b)Where such a dispensation has been granted, the provisions of subsection (1) and subsection (2) of this section shall not apply in respect of the mortgage.
(3)In any proceedings brought by a mortgagee for the recovery of a mortgage debt or for the enforcement of a mortgage, or in proceedings instituted by a mortgagor within twenty-one days after service of a notice under this section, a court may, upon such fair and equitable terms as it may determine, grant relief to a mortgagor against the enforcement of rights of a kind referred to in subsection (1) of this section, and may reinstate the position of the mortgagor in all respect as if no breach of a covenant or condition of the mortgage had occurred.
(underlining added)
Mr McNamara QC contended that where a mortgagor was in default (as undoubtedly all the mortgagors here are) their only remedy in this Court was either to institute their own proceedings under s 55A(3) or to bring an application under that section in the proceedings instituted by the mortgagee. He submitted that this was laid down by the Full Court in Perpetual Australia Ltd v Barker (2004) 232 LSJS 400. I do not agree. That case did not consider what the effect under s 55A(1) would be if the mortgagor/defendant had not taken proceedings under 55A(3), which he had done in that case. In my view s 55A(1) lays down a condition precedent, subject to any dispensation under sub (2a), which must be satisfied for a mortgagee to enforce a right to enter into possession of the mortgaged land. The wording of subsection (1) is quite clear that if the mortgagee does not prove strict compliance with both legs of subs (1) there is a statutory bar to an order for possession being made. It was stated in Barker’s case that the rationale for enactment of s 55A was to place a mortgagor in a similar position to a tenant obtaining relief against forfeiture, but that does not mean that where there are clear words in subs (1) creating a condition precedent that the Court is not to give effect to them. (There were no suggestions in Hindmarsh Building Society v Manhire (1979) 20 SASR 206 or Lamshed v Plakatis (below) that the invalidity of the s 55A notices there were limited to the defendant bringing any application under s 55A(3)).
(2) Under s 99(3) of the Code.
This provides:
(3)If there is a dispute between the credit provider and the debtor, mortgagor or guarantor about the amount of enforcement expenses that may be recovered by the credit provider, the Court may, on application by any of the parties to the dispute, determine the amount of that liability.
Under Schedule 1 of the Code, and s 8 of the Consumer Credit (South Australia) Act 1995, the “Court” there is the District Court, and not the Supreme Court. I do not accept that s 99(3) of the Code impliedly excludes the jurisdiction of this Court to determine under s 55A(1)(a)(iii) whether excessive enforcement costs have been claimed by a mortgagee. There are various jurisdictions given to the District Court under the Code which overlap with those given to this Court under s 55A(3), but there is no authority that they cannot co-exist, subject to a judicial discretion not to exercise a jurisdiction if it is more appropriate that the other Court does so.
Accordingly, nothing in s 55A(3) or s 99(3) of the Code excludes the power of this Court to determine in appropriate cases whether excessive enforcement expenses have been claimed in a s 55A notice.
4An overstatement of the enforcement expenses claimed does not invalidate a s 55A notice.
In Assured Funding Pty Ltd v Gentzsch, 26 March 2007, Judgment No [2007] SASC 101, I held that an overstatement of the amount properly payable by a mortgagor in an s 55A notice invalidated the notice so that no order for possession should be made under Part XVII. In Australian Central Credit Union v Page, 30 April 2007, [2007] SASC 144 (“Page’s case), I applied what I had said in Gentzsch’s case and held that an overstatement of the amount of legal enforcement costs in an s 55A notice invalidated the notice and was a proper basis to dismiss the possession summons. Mr McNamara QC submitted that those decisions were wrong and invited me to reconsider the issue. He submitted that my conclusion was contrary to what had been said by Perry J in Lamshed v Plakakis (1988) 47 SASR 316 at 321 where as dicta he had said that the failure in a s 55A notice to specify the amount payable did not make the notice defective. That conclusion was based on a Queensland case which proceeded on the basis that the amount then owing was common knowledge to both parties. There is no evidence here that the precise amount of the arrears of interest were known to the defendants in any of the four cases. It is questionable whether mortgagors could calculate for themselves the precise amount owing on a particular date under Clause 17 of the Standard Terms and Conditions of the mortgages and its equivalents. In any event this case is distinguishable as here the s 55A notice specifies the actual amount of the arrears and requires their payment. S 55A(1) makes the plaintiff’s right to possession subject to due compliance with both subs (1)(a) and (b). Compliance with (1)(b) requires that the defendant has (inter alia) to pay an amount enforcement expenses of $597.63 which is excessive. Hence, if the mortgagee does incorrectly state the amount payable, subs (1)(b) cannot be satisfied.
5Any claim for excessive enforcement expenses is severable from the balance of the s 55A notice.
The terms of s 55A(1)(b) preclude any severability in that it refers to failure to comply with all of the requirements (plural) in the 55A notice.
6Any requirement for the plaintiff to give details of the enforcement expenses should have been made under s 55B(1) of the Law of Property Act.

S 55B(1) provides:
Collateral covenants
55B(1) Notwithstanding any covenant to the contrary, a mortgagee shall be deemed to have covenanted with the mortgagor that where the mortgagee makes demand of any amount in pursuant of the mortgage, he will at the request of the mortgagor, supply him with reasonable particulars of how the amount of the demand is arrived at.
While s 55B(1) would seem to enable a mortgagor to obtain reasonable particulars of how the enforcement expenses were arrived at it does not say that it is the only way in which that can be done. It would also be open to the defendant under s 42(1)(b) of the Legal Practitioners Act 1981 to request a taxation /adjudication of those costs which would obligate the plaintiff to lodge a Schedule of those costs for taxation/adjudication. The filing of a solicitor’s affidavit setting out each item of the work involved in the enforcement expenses, the amount charged for it under the scale and details of the disbursements is consistent with the summary and expeditious conduct of the jurisdiction under Part XVII. In any event the plaintiff has lodged the affidavit of Mr Graham without prior opposition or protest.
7As it was impossible for the plaintiff to quantify properly the enforcement costs at the time of the issue of the s 55A notice it should not be held responsible for any excessive amount claimed for enforcement expenses in the notice.
I do not agree. Mr McNamara QC submitted that the taxation/adjudication of such costs was a subjective exercise by a taxing officer and it could not be expected that the plaintiff could know at what amount the costs would be taxed/adjudicated upon at the time the notice was issued. He said that if costs were taxed by a number of different taxing Masters, different figures would be reached. Taxation/adjudication is a quasi-judicial exercise to apply an objective scale of costs to the facts of a particular matter: Garrard v Email Furniture Pty Ltd (1993) 32 NSWLR 662 at 680; Jet Corp v Petres Pty Ltd (1935) 64 ALR 265. While there is likely to be some variation in the ultimate result depending upon how individual taxing officers exercise their discretions, usually the amounts allowed would be within a fairly narrow range. Solicitors are expected to understand the taxation/adjudication process and to be able to justify according to it the legal costs which they have charged if those costs are called into question. If solicitors cannot justify the charges they have made according to the scale, they should not have made the charge. If the charge is found to be excessive, the mortgagor should not be placed in the disadvantageous position of default under an s 55A notice through not having paid that excessive amount. If there is some good reason why the enforcement expenses cannot be properly calculated so as to be included in the s 55A notice, a mortgagee is not precluded from issuing its 55A notice without claiming such enforcement expenses, and then subsequently claiming those expenses. Whether the costs of a subsequent s 55A notice confined to enforcement expenses would be allowed as reasonable will probably depend on precisely why the enforcement expenses were not also claimed in the original notice.
Whether the claim for enforcement expenses is excessive?
I adopt the same procedure which I employed in Page’s case (above) to see whether some items of costs (and disbursements) claimed are clearly unjustified without conducting a formal adjudication on the costs claimed. (The plaintiff did not request that I conduct a formal adjudication).
Under Clause 21 of the standard conditions the defendant was obliged to pay to the plaintiff the reasonable expenses incurred in enforcing the mortgage. By clause 36 “costs include charges and expenses, and costs, charges and expenses in connection with legal and other advisers on a full indemnity basis”. However, clause 21 is subject to the operation of the Code. S 99(1) of the Code limits enforcement expenses to those reasonably incurred by the credit provider/plaintiff. Similar, and indistinguishable, provisions of other mortgages have been interpreted as meaning that this entitles the lender to recover legal costs reasonably incurred by it as adjudicated upon as between solicitor and client: Bayford v St George Bank Ltd (No 2) (2003) 229 LSJS 59; Perpetual Trustees Australia Ltd v Barker (2004) 232 LSJS 400. It means all costs reasonably incurred by the party having regard to the proper interests of the persons who will ultimately bear the burden of such costs: Dal Pont “Law of Costs” paras 16.16-16.20.
Costs and Disbursements claimed by the solicitors.
I now consider in a summary fashion each of the 12 items of costs and disbursements claimed in paragraph 3 of the first affidavit of Mr Graham.
3.1Perusing 6 pages of the Certificate of Title, mortgage, loan agreement and standard terms and conditions of mortgage ….. at $7.20 per page being $43.20.
Having viewed these documents I consider that as they mostly should have been perused at the one time a maximum of 4 pages should be allowed. This means $14.40 is not allowable.
3.2Visually scanning 13 pages of loan agreement and the standard terms and conditions of mortgage at …. $2.10 per page being $27.30.
Most of the loan agreement and standard conditions have no relevance whatever to an s 55A notice and thus no scanning should be allowed for them. The maximum number of pages of scanning which could be allowed is 4 which means $18.90 is not to be allowed in the amount claimed.
3.3A para-legal spent 2 units of time at ….. $12.70 per unit (being $25.40) obtaining searches for street identification of the property and to obtain Certificate of Title.
In the second affidavit of Mr Graham it was stated that the street identification search was conducted to ensure that the street address provided in the instructions related to the street address of the Certificate of Title to which the mortgage related. This was to ensure that the correct address was stated on the notices and so that the notices were served at the correct address. The address of 1 Solandra Crescent, Modbury North, was shown on each of the mortgage, the loan agreement and the Certificate of Title. There is no reasonable basis to suspect that the address given might not be correct which would justify such a search being made. One attendance to obtain a copy of the title is justified. $12.70 cannot be allowed.
3.7 The Notice relied upon in these proceedings was drawn, being a Notice of importance of approximately 45 lines, the equivalent of 1 ½ standard pages at the Supreme Court scale rate of $65.00 per page being $97.50.
I consider this claim is excessive. Eight of the lines contain 3 words or less. Clause (3) is irrelevant as the notice is only directed to one mortgagor. The inclusion of this irrelevant paragraph strongly suggests that the notice was not a “one-off” drafting exercise and that it was taken from a precedent. (The notices in the other three actions are all in very similar terms). Insofar as the contents of the notice are very similar to many other notices, it may well be that item 2 in Schedule 1, which deals with the preparation of documents which require the completion of details into a standard form, is more appropriate for at least parts of the preparation of this notice. However, I do not intend to finally determine that issue at present. The notice is relatively straight-forward in that it only involved one mortgagor and one mortgage and the defaults were only the failure to pay instalments. I consider that a reasonable allowance under the scale for the preparation of this notice could be no higher than the drawing fee for one standard page of $67.50. If a formal adjudication was conducted, the amount allowed could be less. This conclusion is consistent with my ruling on the costs of a similar notice in Page’s case. Hence $30 is disallowed.
3.82 half-page letters which were drawn to enable service of the notice ….. at the rate of $65 per page, being $65 for this work.
A letter to the process server is allowable. The other letter is addressed to the defendant. It significantly repeats the contents of the s 55A notice, but gives some additional information about who he can contact at the plaintiff concerning the arrears. It should only be allowed as a short letter of a quarter of a page at $16.25. $16.25 is to be disallowed.
3.9A paralegal spent 2 units of time at the Supreme Court scale rate of $12.70 per unit (being $25.40) printing, collating the Notice and letters and arranging for service of the Notice.
In a supplementary written submission it was said of this item:
This time is reasonable to claim as it is time actually spent preparing, collating and arranging the notices and letters into order.
Such work is clearly not allowable under Schedule 1. The incidental work of collating documents and processing enclosures and attachments is included in the amounts otherwise allowed for the letters, e-mails and copying of documents. This whole item is disallowed.
3.10Photocopying or printing 13 pages of the loan, mortgage, certificate of title, notice and correspondence at …… rate of $1 per page being $13.
I am not certain what the alleged justification is for these copies. I leave this item unresolved.
3.11GST on the work incurred above is calculated to be $33.52 …..
In view of the amounts which are not to be allowed, this is excessive but it is not necessary for me to calculate the precise amount.
3.12The plaintiff incurred disbursement fees to the amount of $231.23 (including GST) being for
3.12.1 Process server’s fee of $132 for service of the notices; and
3.12.1 Certificate of Title and dealing searches in the amount of $109.23.
The letter of instruction for service was sent to a New South Wales process server, although the notice was served by a South Australian licensed process server. I do not understand why the plaintiff’s solicitors could not have sent the letter direct to the South Australian process server. They would appear to be regularly involved in the service of such notices in this State. The service fee of $115 is in excess of what is usually charged by South Australian process servers for such service in the greater Adelaide Metropolitan area. The letter of instruction to the New South Wales process server requests that they give an affidavit of service and their invoice refers to an affidavit being enclosed. I have not seen this affidavit. The cost of preparing such an affidavit of service is not properly a cost of preparing and serving an s 55A notice. The costs of such an affidavit are part of the costs of the action for possession. I refer to what I said in [21] in my reasons in Page’s case about whether the fee for service by a process server is reasonably incurred when the notice could have been served by registered post. In view of the other conclusions which I have reached which make the amount claimed excessive, I need not now pursue this item further.
Paragraphs 6-8 of the second affidavit of Mr Graham deal with the search fees of $109.23. I do not understand how searches relating to dealings in the subject land are relevant to the preparation and service of a s 55A notice. As I have indicated in my response on 3.3 I do not consider that search costs involved in street identification can be justified. While some significant amount of the fees claimed should not be allowed I am not in a position to quantify it and in view of my other conclusions I need not now resolve the point.
Accordingly, on my summary review of the costs claimed I am satisfied that at least $104.95 of the total of $609.95 is not properly allowable. This means that the maximum which could be allowed on an adjudication of the plaintiff’s reasonable costs would be $505. Thus the s 55A notice in claiming $597.63 for enforcement expenses, has exceeded the legal entitlement of the plaintiff.
Nothing was said by the plaintiff about whether it would seek a dispensation under s 55A(2a) if the amount demanded was found to be excessive. If the plaintiff’s solicitors inform me in writing within 14 days that they wish to apply for such a dispensation, I will arrange for a hearing of such an application. If they do not so request, for the reasons which I gave in Page’s case, I will then dismiss the summons without any further hearing.
Action 777/07 – Rams Mortgage Corporation Ltd v Michael and Yvonne Kelly.
In this matter Mr Graham has given in his affidavit of 16 October 2007 details of legal costs and disbursements totalling $584.37 in justification of a claim for enforcement expenses in the s 55A notice of $524.04 (ie $60.33 in excess of the amount claimed). The items of work claimed in paragraphs 3.1-3.9 of the affidavit do not materially differ from those in the equivalent paragraphs 3.1-3.9 in his affidavit in the McCormack matter. For similar reasons to those given in the McCormack matter I summarily determine that at least $100 must be disallowed from the claim of $584.37, which means that the enforcement expenses claimed in the s 55A notice exceeded what was properly claimable by at least $40. Accordingly, a similar result follows in this matter to that set out above for the McCormack matter.
Action 946/07 – Pepper Finance Corporation Ltd v Rodney William Raines and Lolita Silagno Raines.
In this matter Mr Graham has given in his affidavit of 16 October 2007 details of legal costs and disbursements totalling $746.57 in justification of a claim for enforcement expenses in the s 55A notice of $567.99 (ie $178.58 in excess of the amount claimed). Most of the legal work claimed is similar to that claimed in the matter of McCormack which for similar reasons is over-stated by at least about $100. The crucial item here is the claim for service fees of $258.50. Two service fees of $115 are claimed for the separate service of each defendant. Under s 112(3) of the Law of Property Act both defendants could have been served at the same time merely by leaving the notices for them at the property. However, Mr Graham has deposed in his second affidavit that when the process server served the 2^nd defendant on 23 April 2007 she told him that the 1^st defendant would be available at 4 pm on the following day at that address for the process server then to serve him. However, when the process server returned at 4 pm on the following day the 1^st defendant was not present and he then left the notice for him at the property. In view of what the 2^nd defendant said to the process server I am not prepared summarily to conclude that it was necessarily unreasonable to act on what the 2^nd defendant said and to have served the notice on the 1^st defendant non-personally on the first visit. It is for the defendants to take the point if they so wish by requesting a formal adjudication of the enforcement expenses claimed. If a request for such a formal adjudication is made, the Court will then determine the amount of enforcement expenses properly claimable after hearing whatever evidence and arguments are put forward on the hearing of the adjudication. However, if the defendants fail to establish that the enforcement expenses claimed in the s 55A notice were excessive, they are likely to be required to pay the significant additional costs of a formal adjudication on the issue. I will adjourn the hearing in this matter to a further date to consider any applications which are made by the parties in the light of these reasons.
Action 1137/07 – JP Morgan Trust Australia Ltd v Tracy and Stuart McMillan.
In this matter Mr Graham has given in his affidavit of 16 October 2007 details of legal costs and disbursements totalling $1,498.19 in justification of the claim for enforcement expenses in the s 55A notice of 6 June 2007 of $928.95 (ie $569.24 in excess of the amount claimed). This matter differs from the previous three in that the enforcement expenses are claimed for three notices and not for one notice. Whether the costs of three notices are properly recoverable by the plaintiff is not a point which I can summarily determine on the evidence before me.
The first notice was an s 55A notice of 15 November 2006 which included a claim for enforcement expenses of $514.74. The second notice was not an s 55A notice, but was what was described as an acceleration notice, dated 31 January 2007, which claimed enforcement expenses of $112.64. The third notice was an s 55A notice of 6 June 2007 which was the notice relied upon for the purposes of this action and which claimed enforcement expenses of $928.95. The second affidavit of Mr Graham of 17 December 2007 deposed to a substantial payment having been made by the defendant in response to the second notice, but which was not sufficient to cover the enforcement expenses for the first and second notices.
The third notice was identical to the first notice except for the amounts and the dates. The second notice was similar in part to the first notice but contained some material which was different from the first notice. For similar reasons to those given in Page’s case I would not have allowed full costs for the second s55A notice and would have reduced some of the costs of the second notice. On this basis, and making similar disallowances to those made in McCormack’s matter, I would summarily determine that the proper enforcement costs for all three notices would be no more than $1,200. It is open to the defendants, if they wish to run the risk in further costs if they are unsuccessful, to request a formal adjudication of the enforcement costs claimed in the third s 55A notice. They can then contest whether the costs of three notices are properly recoverable and to challenge other items claimed similar to those in McCormack’s matter where I have not been prepared to rule summarily on whether they should be allowed or not. I will now deal with this matter in a similar fashion to the Raines’ matter.