Watts v RHG Mortgage Corporation Ltd [No 2]

[2016] WASCA 17

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT :   THE COURT OF APPEAL (WA)

CITATION:   WATTS -v- RHG MORTGAGE CORPORATION LTD [No 2] [2016] WASCA 17

CORAM:   McLURE P

NEWNES JA

HEARD:   ON THE PAPERS

DELIVERED          :   22 JANUARY 2016

FILE NO/S:   CACV 111 of 2014

BETWEEN:   KERRYANN PATRICIA WATTS

First Appellant

NATHAN JOHN WATTS
Second Appellant

AND

RHG MORTGAGE CORPORATION LTD
Respondent

ON APPEAL FROM:

Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA

Coram  :MASTER SANDERSON

File No  :CIV 1197 of 2014

Catchwords:

Costs - Appeal against grant of summary judgment - Respondent conceded appeal - Appellants unrepresented - Whether appellants entitled to reasonable disbursements of appeal

Legislation:

Nil

Result:

Order that respondent pay appellants' reasonable disbursements of appeal

Category:    B

Representation:

Counsel:

First Appellant               :     No appearance (on the papers)

Second Appellant          :     No appearance (on the papers)

Respondent:     No appearance (on the papers)

Solicitors:

First Appellant               :     In person

Second Appellant          :     In person

Respondent:     Jackson McDonald

Case(s) referred to in judgment(s):

Watts v RHG Mortgage Corporation Ltd [2015] WASCA 139

1. JUDGMENT OF THE COURT:    The only issue that remains to be determined in this appeal is the costs of the appeal.  That issue is to be determined on the papers.

2. The appellants appealed against a decision of Master Sanderson who, on the respondent's application for summary judgment, ordered that the appellants deliver to the respondent vacant possession of two properties mortgaged to the respondent to secure certain loans and credit facilities, and pay to the respondent the sum of $634,337.59 plus interest.

3. The appellants also applied for an order suspending enforcement of the judgment until the determination of the appeal.  On 17 June 2015, such an order was made, the court having concluded, among other things, that it was reasonably arguable there had been a failure to accord procedural fairness to the first appellant (Mrs Watts), who did not attend the hearing, and that the appellants appeared to have a reasonably arguable entitlement to relief under the National Credit Code of a kind which would afford them a defence to the claim:  Watts v RHG Mortgage Corporation Ltd [2015] WASCA 139.

4. The appellants were subsequently provided with pro bono counsel, including senior counsel.  There were then negotiations between the appellants' counsel and the respondent's solicitors, following which the respondent conceded the appeal.  On 25 November 2015, the appeal was allowed by consent.  The issue of costs, however, remains in contention.  It was therefore ordered that each party file an outline of submissions on costs and the matter be determined on the papers.  As the appellants were unrepresented on the appeal, they are only entitled to recover the disbursements they have incurred, including, perhaps most significantly, the filing fee of $2,434.00 paid on filing the appeal notice.

5. The respective contentions on costs can be briefly stated.  The respondent submits that the costs of the appeal should be costs in the cause of the action.  That is because, first, the appellants did not file any affidavit in opposition to the application for summary judgment and the grounds upon which they relied on the appeal, and other grounds raised since then, were not raised before the master; and, secondly, while it is arguable that Mrs Watts was denied procedural fairness, that came about as a result of a conscious decision by her not to attend the hearing.

6. The appellants submit there is no reason to depart from the usual order that costs follow the event.  Judgment was ordered on effectively the first return date of the application for summary judgment.  At that stage, no directions had been made for the filing of affidavits or submissions.  In the absence of Mrs Watts, who was the sole registered proprietor of the two mortgaged properties, the respondent should have sought to have the hearing adjourned to enable her to attend, particularly when it appeared from what Mr Watts said to the master that there was a difference of opinion between Mr Watts and Mrs Watts as to their respective responses to the claim.  Instead the respondent pressed for judgment.  In addition, the respondent had relied upon additional default notices that were not pleaded and were not in evidence.  The respondent had foreshadowed the need to amend its statement of claim to plead the default notices but had not done so.

7. It is trite law that while the exercise of the discretion as to costs must be exercised judicially the discretion is otherwise unfettered.  Similarly, it is trite law that ordinarily the successful party is entitled to an order for costs.  While there has been no determination on the merits in this case, the appeal was allowed by consent in circumstances amounting to a capitulation by the respondent.  We did not understand the respondent to press any other view.

8. We do not consider there is any reason to depart from the usual order as to costs.  While the matters upon which the appellants relied on the appeal were not raised below, at least in relation to the issue of procedural fairness it should have been apparent to the respondent that there were real risks in pressing for summary judgment on effectively the first return date of the summons, in circumstances where no directions had been made for the filing of affidavits, the appellants were unrepresented, and Mrs Watts was absent.  It chose to proceed nevertheless.  The respondent was vulnerable on that ground at least and the judgment it obtained has now been undone on the appeal.

9. The respondent should pay the reasonable disbursements incurred by the appellants in the appeal.