St George Bank Ltd v Howell

[2002] NSWSC 130

CITATION:	St George Bank Ltd v Howell & Ors [2002] NSWSC 130
CURRENT JURISDICTION:	Common Law
FILE NUMBER(S):	SC 12103/00
HEARING DATE(S):	21 February 2002
JUDGMENT DATE:	21 February 2002
PARTIES :	St George Bank Ltd Simon Roch Howell Darling Mews Pty Ltd
JUDGMENT OF:	Cripps AJ at 1

COUNSEL :	Mr A Lo Surdo for the Plaintiff Mr E Smith for the Defendants
SOLICITORS:	Henry Davis York, Solicitors for the Plaintiff Monty Gildea, Solicitor for the Defendants
CATCHWORDS:	Costs - no question of principle
DECISION:	See paragraphs 9 & 10 of the judgment.

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

Cripps AJ

Thursday, 21 February 2002

12103/00 St George Bank Ltd v Simon Roch Howell & Ors

Judgment

1 His Honour: The suit between the parties has been the subject of consent orders, which I have earlier referred to. The only issue remaining is the cost order that I am asked to make. That issue, in my view of events, turns upon the meaning of clauses in the mortgage agreement between the first named defendant and the plaintiff.

2 Clause 18 of the agreement provides that the mortgagor in certain circumstances is to

indemnify us against, and you must therefore pay us for liability, loss or costs including consequential or economic cost we suffer or incur, (a) if you default under this mortgage..., in connection and (b) in connection with the secured property.

3 The definition of costs is to be found in section 38 which

includes charges and expenses and costs, charges and expenses in connection with legal and other advisers on a full indemnity basis.

4 I have some misgiving about determining this matter, because I have the uneasy feeling that the costs that have already been claimed in an affidavit would not be characterised otherwise than reasonably, if not necessarily, incurred by the plaintiff in these proceedings.

5 But I am asked to determine by both parties whether in accordance with Mr Lo Surdo's submission that those clauses mean that whatever money is agreed to be paid by the bank to its solicitors in connection with the enforcement with the mortgage is to be paid by the first named defendant. That is, he submits, the only meaning of the contract clause.

6 Mr Smith on the other hand submits that conformably with definitions of indemnity contained in the Act when dealing with costs, and in the context in which the word occurs when associated with costs in this agreement, costs on an indemnity basis means costs that are reasonably, if not necessarily, incurred by the bank.

7 I am asked in effect to declare in the absence of knowing what the facts are, whatever the bank has paid its solicitors, whether reasonable or unreasonable, whether it is excessive or not excessive, that that amount necessarily has to be ordered by the court to be paid by the mortgagor.

8 Although I recognise the force of Mr Lo Surdo's argument, I have come to the conclusion that the meaning of the words "full indemnity basis" in the context of this document (bearing in mind that it refers to costs that are incurred in legal proceedings) carries with it the implication that there is a limitation to the indemnity basis; and that limitation is that it should not be unduly excessive, or unduly unreasonable costs incurred by a bank. I hasten to say that I am expressing no view that the bank has made such a claim in this case.

9 What I propose to do is to refer the matter to an assessor, with a direction that the costs are to be assessed on a solicitor and client basis as that is understood in the context of common fund costs. That is to allow the bank costs which it reasonably incurred. I make it quite clear that this gives the bank an entitlement to costs that may be beyond the party and party costs.

10 I will order that my order for costs be entered forthwith and be operative from today's date.

-oOo-

Last Modified: 03/06/2002