Tonto Home Loans Australia Pty Ltd v Tavares (No 2)

[2012] NSWCA 129

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Tonto Home Loans Australia Pty Ltd v Tavares; FirstMac Ltd v Di Benedetto; FirstMac Ltd v O'Donnell (No 2) [2012] NSWCA 129

Hearing dates:

On the papers

Decision date:

09 May 2012

Before:

Bathurst CJ at [1]
Allsop P at [2]
Campbell JA at [22]

Decision:

(1) As to the appeal number 2009/298570 (formerly 40454 of 2009):

(a) Order (1)(c) made by the Court on 21 December 2011 be varied by deleting the words "The appellant pay the respondents' costs of the appeal" and by inserting in lieu thereof:

"(c) Set aside order 6 made by the Supreme Court on 4 September 2009 (as set out in [448] of the primary judge's reasons) and in lieu thereof order that the plaintiff pay the first and second defendants'/first and second cross-claimants' costs of the proceedings."

(b) Add a new order (1)(d) as follows:

"(1)(d) The appellant pay the first and second respondents' costs of the appeal."

(c) The dates "26 February 2010" twice appearing in order 1(b) be replaced by the date "4 September 2009".

(2) As to appeal number 2009/298571 (previously 40455 of 2009):

(a) Order (2)(c) made by the Court on 21 December 2011 be varied by deleting the words "The appellant pay the respondents' costs of the appeal" and by inserting in lieu thereof:

"(c) Set aside order 5 made by the Supreme Court on 4 September 2009 (as set out in [447] of the primary judge's reasons) and in lieu thereof order that the plaintiff pay the first and second defendants'/first and second cross-claimants' costs of the proceedings."

(b) Add a new order (2)(d) as follows:

"(2)(d) The appellant pay the first and second respondents' costs of the appeal."

(c) The date "26 February 2010" in order 2(b) be replaced by the date "4 September 2009".

(3) As to appeal number 2009/298572 (previously 40456 of 2009):

(a) Order (3)(b)(iii) made by the Court on 21 December 2011 be varied by inserting the words "first and second defendants'/ first and second cross-claimants" in lieu of the words "defendants'/cross-claimants'".

(b) Order (3)(c) made by the Court on 21

December 2011 be varied by inserting the words "first and second" before the words "respondents' costs of the appeal".

(c) The date "26 February 2010" in order 3(b) be replaced by the date "4 September 2009".

(4) The applicants on the motion pay the respondent's (ASIC's) costs of the motion.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:

COSTS - ASIC as intervener - intervention efficient and of significant assistance to the Court - intervention proper and in public interest - intervener bears own costs - intervener not ordered to pay costs for any extension of hearings

Cases Cited:

City of Burnside v Attorney-General (SA) [1994] SASC 5136; 63 SASR 65
Liverpool City Council v Weir (1984) 53 ALR 77
Speno Rail Maintenance Australia Pty Ltd v Metals & Minerals Insurance Pte Ltd [2009] WASCA 31(S)

Category:

Costs

Parties:

2009/298570
Tonto Home Loans Australia Pty Ltd (Appellant)
Jose De Carvalho E Rego Tavares (First Respondent)
Kim Lee-Anne Rowe (Second Respondent)
Australian Securities and Investments Commission (Third Respondent)

2009/298571
FirstMac Ltd (Appellant)
Lawrence Di Benedetto (First Respondent)
Maria Di Benedetto (Second Respondent)
Australian Securities and Investments Commission (Third Respondent)

2009/298572
FirstMac Ltd (Appellant)
Gillian O'Donnell (First Respondent)
John Robert O'Donnell (Second Respondent)
Australian Securities and Investments Commission (Third Respondent)

Representation:

A Leopold SC (Appellants)
R J Wright SC and J A Arnott (Third Respondent)
Gadens (Appellants)
ASIC Litigation Counsel (Third Respondent)

File Number(s):

2009/298570, 2009/298571, 2009/298572

 Decision under appeal 

Citation:

Permanent Trustee Company Ltd v Gillian O'Donnell; Permanent Trustee Company Ltd v Di Benedetto; Tonto Home Loans Australia Pty Ltd v Tavares [2009] NSWSC 902

Date of Decision:

2009-09-04 00:00:00

Before:

Price J

File Number(s):

2006/12148, 2006/12147, 2005/15644

Judgment

1. BATHURST CJ: I agree with the orders proposed by Allsop P and his reasons.

1. ALLSOP P: Orders were made in these three appeals on 21 December 2011. The appellants in the three appeals, Tonto Home Loans Australia Pty Ltd ("Tonto") (in the Tavares and Rowe appeal), and FirstMac Ltd ("First Mac") (in the Di Benedetto and O'Donnell appeals), apply to vary the orders for costs that involve the Australian Securities and Investments Commission ("ASIC"), which intervened in the proceedings below and on appeal.

The Tavares and Rowe Appeal

1. The variations sought are:

(a)first, that the primary judge's orders be varied by setting aside the order for costs in favour of the defendants and ASIC and in its place making an order that the appellant as plaintiff pay the first and second defendants' and first and second cross-claimants' costs, but that ASIC pay 20 per cent of the appellant's costs; and

(b)secondly, that the costs order for the appeal be that the appellant pay the first and second respondents' costs of the appeal and that ASIC pay 33 per cent of the appellants' costs of the appeal.

The Di Benedetto and the O'Donnell Appeals

1. The variations sought were, mutatis mutandis, identical to the variations sought in the Tavares and Rowe appeal.

Disposition of the application

1. ASIC intervened in all three proceedings pursuant to the Corporations Act 2001 (Cth), s 1330. By s 1330(2) ASIC was taken to be a party to the proceedings. ASIC was properly joined to the appeal.

1. In making the orders it did on 21 December 2011, the Court did overlook the question of the costs of ASIC as an intervenor. I raised the matter with the parties shortly after making the orders and publishing the reasons.

1. If I might say at the outset, and without the slightest intended disrespect to counsel for the respondents to the appeals, the presence of ASIC was of great assistance in the conduct of the appeals. Litigation involving statutes of such public importance as the Corporations Act often calls for the participation of the regulator, who will often have a perspective on the application of the statute not as sharply perceived as by others. It is in the public interest and in the interests of the administration of justice that ASIC not be deterred from giving assistance to the court. At the same time, private litigants should not have to pay additional sums in legal fees, for the general good of the administration of justice and in the elucidation of a statute of particular concern to an intervenor.

1. Debelle J helpfully expressed guidance about the costs of intervenors in City of Burnside v Attorney-General (SA) [1994] SASC 5136; 63 SASR 65 at 67-68 [11]:

"There appears to be no reason why as a matter of general principle an unsuccessful intervener should not be subject to the general rule that costs follow the event. However, it is not appropriate to apply that general rule without qualification. If a successful intervener is not entitled to his costs where his interests are adequately protected by an existing party to the action, it would be inequitable for an unsuccessful intervener to be liable to costs in like circumstances. However, an unsuccessful intervener might be liable for costs if his intervention has substantially extended the hearing or put the successful party to unnecessary cost. In such circumstances, the intervener might be liable to pay a portion of the successful party's costs, that portion being determined by the extent to which the hearing has been

lengthened by the intervention. Such a rule is consistent with the principle that, generally speaking, an intervener must take the action as he finds it."

This statement was applied in Speno Rail Maintenance Australia Pty Ltd v Metals & Minerals Insurance Pte Ltd [2009] WASCA 31(S) at [8].

1. The High Court in Liverpool City Council v Weir (1984) 53 ALR 77 at 83 said:

"... an intervener, even a Minister responsible for the administration of the legislation in question in the case, cannot expect as of course that the unsuccessful party to the litigation in which he has intruded should bear the extra burden of his costs, even if his intervention was well intentioned and proved to be of assistance to the court."

1. The appellants submitted that the intervenor failed on the unconscionability question. That was said to be "the event" which costs should follow.

1. The appellants submitted that ASIC's intervention at trial and on appeal was both extensive and unnecessary, and so inappropriate, because the respondents would have run all points.

1. I need not repeat what I have said above in order to reject the submission that ASIC's intervention was either inappropriate or in some fashion repetitive or oppressive. To a degree it added to the length of both the trial and the appeal. The case was, however, of significant importance for the operation of the retail home lending market and for the operation of the businesses of the appellants and the lenders standing behind them.

1. Whilst ASIC failed in its arguments upon unconscionability, it did not limit its assistance to the Court to its participation generally in that regard. The operation of, and the place of the public interest in, the Contracts Review Act 1980 (NSW), s 9(1), the application of the principles of agency to the circumstances at hand and the construction of important Commonwealth legislation all were the subject of assistance. It is not appropriate to view the question of unconscionability as the "event" around which costs should turn.

1. Without belabouring facts canvassed in the main judgment, the lending practices of these lenders and the behaviour of their commercial counterparty (Streetwise) were such as to attract the regulator to participate in the way it did: in my view, entirely justifiably. The lenders, through the conduct of their agent (the mortgage originators), bear much of the responsibility (amongst the parties to the litigation) for the long and costly legal battle, in which ASIC participated perfectly properly.

1. Though there was inevitably a degree of extension of the time taken to run the trial and hear the appeal, given the primary facts, the importance of this kind of structure of lending to the market and ASIC's significant assistance in an efficient manner, I would not order it to pay any costs to the appellants for any such extension.

1. As an intervenor, ASIC should participate at its own cost: Weir at 83; Speno Rail at [8]-[10]; and City of Burnside at 67-68 [10].

1. The orders in the Court of Appeal should be amended to reflect ASIC's responsibility to pay its own costs.

1. As to the costs below, the submissions of ASIC implicitly recognised that the orders of the primary judge concerning the payment of costs should have been directed only to the first and second defendants and cross-claimants. In these circumstances I would interfere with the costs orders below on a like basis.

1. The orders that I would make are:

(1)As to the appeal number 2009/00298570 (formerly 40454 of 2009) being the Tavares and Rowe appeal:

(a)Order (1)(c) made by the Court on 21 December 2011 be varied by deleting the words "The appellant pay the respondents' costs of the appeal" and by inserting in lieu thereof:

"(c)Set aside order 6 made by the Supreme Court on 4 September 2009 (as set out in [448] of the primary judge's reasons) and in lieu thereof order that the plaintiff pay the first and second defendants'/first and second cross-claimants' costs of the proceedings."

(b)Add a new order (1)(d) as follows:

"(1)(d)The appellant pay the first and second respondents' costs of the appeal."

(2)As to appeal number 2009/00298571 (previously 40455 of 2009) being the Di Benedetto appeal:

(a)Order (2)(c) made by the Court on 21 December 2011 be varied by deleting the words "The appellant pay the respondents' costs of the appeal" and by inserting in lieu thereof:

"(c) Set aside order 5 made by the Supreme Court on 4 September 2009 (as set out in [447] of the primary judge's reasons) and in lieu thereof order that the plaintiff pay the first and second defendants'/first and second cross-claimants' costs of the proceedings."

(b)Add a new order (2)(d) as follows:

"(2)(d) The appellant pay the first and second respondents' costs of the appeal."

(3)As to appeal number 2009/00298572 (previously 40456 of 2009) being the O'Donnell appeal:

(a)Order (3)(b)(iii) made by the Court on 21 December 2011 be varied by inserting the words "first and second defendants'/first and second cross-claimants" in lieu of the words "defendants'/cross-claimants'".

(b)Order (3)(c) made by the Court on 21 December 2011 be varied by inserting the words "first and second" before the words "respondents' costs of the appeal".

1. The motion has been contested substantially around the question as to whether ASIC should pay some of the lenders' costs. The appellants have lost that issue. I would therefore order that the applicants on the motion pay the respondent's (ASIC's) costs of the motion.

1. Finally, on reviewing the orders made for the purposes of resolving this application, a further error was noted. In the orders made on 21 December 2011, the date 26 February 2010 was used as the date of the making of the orders below. That was incorrect. Judgment was delivered on 4 September 2009. The date 26 February 2010 was the date that the primary judge's associate certified the transcript. An order should be made clarifying that matter insofar as the error is left unattended by the above proposed orders.

1. CAMPBELL JA: I agree with Allsop P.

Decision last updated: 09 May 2012