mdroth/huggingface-course_section-5_zst huggingface dataset:
Case: Ankar Pty Ltd v National Westminster Finance (Australia) Ltd [1987] HCA 15 ; (1987) 162 CLR 549
Outcome: applied
Moreover, if the provisions of Part C of the POSA are ambiguous, so that they could be construed either as I consider them to read or as BP contends, then the ambiguity should be resolved in favour of the guarantors, because of the rule that their liability is strictissimi juris: Ankar Pty Ltd v National Westminster Finance (Australia) Ltd [1987] HCA 15 ; (1987) 162 CLR 549 at 561 per Mason ACJ, Wilson, Brennan and Dawson JJ. And this principle is also relevant in the construction of the indemnity in cl C4.1: Andar Transport Pty Ltd v Brambles Ltd [2004] HCA 28 ; (2004) 217 CLR 424 at 433-437 [17] - [23] esp at 437 [23] per Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ.
Case: Cotterell v Stratton (1872) LR 8 Ch App 295
Outcome: applied
Cotton and Bowen LJJ came to the same conclusion (see 31 Ch D at 593). Cotton LJ said that the costs which a mortgagee could recover as an incident of the ordinary relationship with a mortgagor and surety included costs of proceedings, whether by action or otherwise, to recover the mortgage debt or any part of it. These, he said '... are costs relating to the mortgage debt, though not to the mortgage security ...'. Earlier, in Cotterell v Stratton (1872) LR 8 Ch App 295 at 302 Lord Selborne LC had treated a mortgage as having an implied contractual term entitling the mortgagee to those costs (see the explanation by the English Court of Appeal in Gomba Holdings (UK) Ltd v Minories Finance Ltd (No 2) [1993] Ch 171 at 184-F).
Case: Dryden v Frost (1838) 3 My &amp; Cr 670 at 675
Outcome: considered
The costs which BP properly incurred in respect of its position as a party to the POSA ought be recoverable by it. That includes costs incurred by BP to the extent it acted reasonably in ascertaining or defending its rights under the POSA (cp: National Provincial Bank of England v Games (1886) 31 Ch D 582 at 592 per Cotton LJ applying Lord Cottenham LC in Dryden v Frost (1838) 3 My &amp; Cr 670 at 675 [40 ER 1084 at 1086]). Thus, as Lord Cottenham LC pointed out in Dryden v Frost (1838) 3 My &amp; Cr 670 at 676 [40 ER 1084 at 1087] if a mortgagee asserts a right to which the Court finds it was not entitled, those costs are not necessarily nor properly incurred in asserting a right which the mortgage gave the mortgagee. In other words, the mortgagee cannot recover costs arising from a mistake as to its rights or from an attempt to obtain something to which it is not entitled. Nor can a trustee recover costs incurred in fighting a doubtful case when he or she ought first to have sought the direction of the Court before continuing: Dagnell v Freedman &amp; Co [1993] 1 WLR 388 at 396E-H per Lord Browne-Wilkinson. And, in determining whether costs have been reasonably and properly incurred, it is relevant to consider whether they bear a reasonable relationship to the value and importance of the subject matter in issue ( Skalkos v T&amp;S Recoveries Pty Ltd [2004] NSWCA 281 ; (2004) 65 NSWLR 151 at 153 [8] per Ipp JA).
Case: Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79
Outcome: cited
In Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79 at 86-87 Lord Dunedin said that the question as to whether a term is a penalty is one of construction of the contract, judged at the time of its formation and not at the time of breach. The High Court regarded this as expressing the current law (222 ALR at 308-309 [10]-[12]). Therefore the argument as to whether the deed of option was a penalty, as a matter of law, had nothing to do with whether Ringrow was in default under or in breach of the POSA. 65 The issue concerning whether the deed of option was a penalty and the construction of the arrangements between BP and the applicants did not arise out of or from any default or breach. It arose as a question of law, being the construction of the arrangements at the time they were made. It follows that BP cannot recover the costs of that issue under cll A14.2(f) or A16.9(a) of the POSA.
Case: Elders Trustee &amp; Executor Co Ltd v EG Reeves Pty Ltd (1998) 84 ALR 734
Outcome: considered
A Full Court of this Court, in Elders Trustee &amp; Executor Co Ltd v EG Reeves Pty Ltd (1998) 84 ALR 734 (see at 735 cl 5), construed a standard form clause in a mortgage entitling a mortgagee to all its costs and expenses including costs between solicitor and own client incurred by the mortgagee in consequence of or on account of any default on the part of the mortgagor or incurred by the mortgagee for the preservation or in any manner in reference to the security. The Full Court followed what Street J had said (see 84 ALR at 741). Sheppard and Foster JJ noted that whatever might be the ambit of the rule, the question there was the proper construction of an express clause in the mortgage contract (84 ALR at 742).
Case: Elders Trustees &amp; Executor to Ltd v Eagle Star Nominees Ltd (1986) 4 BPR 9205
Outcome: applied
It has never been suggested that a contractual right to costs in mortgages or trust instruments is affected by an estoppel of this kind. There would be obvious inconvenience were that to be the case. And, as McLelland J said in Elders Trustees &amp; Executors Co Ltd v Eagle Star Nominees Ltd (1986) 4 BPR 9205 at 9209: 'A contractual stipulation as to how costs of future litigation are to be borne as between the parties is not vitiated by an inconsistent order for costs in that litigation.' 86 Again, cases involving costs under mortgages and trusts provide analogical assistance in characterizing the nature and extent of BP's contractual entitlement to its costs under cll A14.2(f) and 16.9(a) of the POSA. In Elders Trustees &amp; Executor to Ltd v Eagle Star Nominees Ltd (1986) 4 BPR 9205 at 9208-9209 McLelland J said that '... "properly" means reasonably and in good faith'. As he said, the analogy with a trustee cannot be pressed too far. That is because equity allows a trustee more than party/party costs to exonerate him or her from expenses incurred in administering the estate (cf: Commissioner of Stamp Duties (NSW) v Buckle [1998] HCA 4 ; (1998) 192 CLR 226 at 246 [49] and In re Beddoe; Downes v Cottam [1893] 1 Ch 547 at 555, 558, 562; Gomba Holdings (UK) Ltd v Minories Finance Ltd (No 2) [1993] Ch 171 at 184-185).
Case: Gomba Holdings (UK) Ltd v Minories Finance Ltd (No 2) [1993] Ch 171
Outcome: discussed
Cotton and Bowen LJJ came to the same conclusion (see 31 Ch D at 593). Cotton LJ said that the costs which a mortgagee could recover as an incident of the ordinary relationship with a mortgagor and surety included costs of proceedings, whether by action or otherwise, to recover the mortgage debt or any part of it. These, he said '... are costs relating to the mortgage debt, though not to the mortgage security ...'. Earlier, in Cotterell v Stratton (1872) LR 8 Ch App 295 at 302 Lord Selborne LC had treated a mortgage as having an implied contractual term entitling the mortgagee to those costs (see the explanation by the English Court of Appeal in Gomba Holdings (UK) Ltd v Minories Finance Ltd (No 2) [1993] Ch 171 at 184-F). 80 Again, in Gomba Holdings (UK) Ltd v Minories Finance Ltd (No 2) [1993] Ch 171, the English Court of Appeal gave a wide construction to a clause in a mortgage which entitled the mortgagee to recover costs which would not be allowable on a party and party or solicitor own client taxation by the court: see also In re Adelphi Hotel (Brighton) Ltd; District Bank Ltd v Adelphi Hotel (Brighton) Ltd [1953] 1 WLR 955 per Vaisey J. 86 Again, cases involving costs under mortgages and trusts provide analogical assistance in characterizing the nature and extent of BP's contractual entitlement to its costs under cll A14.2(f) and 16.9(a) of the POSA. In Elders Trustees &amp; Executor to Ltd v Eagle Star Nominees Ltd (1986) 4 BPR 9205 at 9208-9209 McLelland J said that '... "properly" means reasonably and in good faith'. As he said, the analogy with a trustee cannot be pressed too far. That is because equity allows a trustee more than party/party costs to exonerate him or her from expenses incurred in administering the estate (cf: Commissioner of Stamp Duties (NSW) v Buckle [1998] HCA 4 ; (1998) 192 CLR 226 at 246 [49] and In re Beddoe; Downes v Cottam [1893] 1 Ch 547 at 555, 558, 562; Gomba Holdings (UK) Ltd v Minories Finance Ltd (No 2) [1993] Ch 171 at 184-185).
Case: Maggbury Pty Ltd v Hafele Australia Pty Ltd [2001] HCA 70 ; (2001) 210 CLR 181
Outcome: applied
In McCann v Switzerland Insurance Australia Ltd [2000] HCA 65 ; (2000) 203 CLR 579 at 589 [22] , Gleeson CJ said: 'Interpreting a commercial document requires attention to the language used by the parties, the commercial circumstances which the document addresses, and the objects which it is intended to secure.' This statement was applied in Wilkie v Gordian Runoff Ltd [2005] HCA 17 ; (2005) 221 CLR 522 at 528-529 by Gleeson CJ, McHugh, Gummow and Kirby JJ. And in Maggbury Pty Ltd v Hafele Australia Pty Ltd [2001] HCA 70 ; (2001) 210 CLR 181 at 188[11] Gleeson CJ, Gummow and Hayne JJ said: 'Interpretation of a written contract involves, as Lord Hoffmann has put it ( Investors Compensation Scheme Ltd v West Bromwich Building Society [1997] UKHL 28 ; [1998] 1 WLR 896 at 912; [1997] UKHL 28 ; [1998] 1 All ER 98 at 114. See also the remarks of Mason J in Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24 ; (1982) 149 CLR 337 at 350-352, and of Lord Bingham of Cornhill in Bank of Credit and Commerce International SA v Ali [2001] UKHL 8 ; [2002] 1 AC 251 at 259): "the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract." That knowledge may include matters of law, ...'
Case: Maher v Network Finance Ltd (1986) 4 NSWLR 694
Outcome: considered
In Maher v Network Finance Ltd (1986) 4 NSWLR 694 at 697G-698A, McHugh JA (with whom Kirby P and Priestley JA agreed) said that a mortgagee who had succeeded in obtaining a curial order for costs had an independent right of action under the mortgage contract to require the mortgagor to pay its costs of taking the proceedings. McHugh JA pointed out that a person may be answerable for legal costs as a result of contractual or statutory obligations as well as by a curial order. 75 Thus, the making of the costs orders created a curial obligation to pay costs in Ringrow and the guarantors. In addition, the POSA created a contractual liability which was separate and apart from that adjudicated by Hely J, the Full Court and the High Court, except for the pre-litigation costs which were agreed and fixed by Hely J in the final orders which he made.
Case: McCann v Switzerland Insurance Australia Ltd [2000] HCA 65 ; (2000) 203 CLR 579
Outcome: cited
In McCann v Switzerland Insurance Australia Ltd [2000] HCA 65 ; (2000) 203 CLR 579 at 589 [22] , Gleeson CJ said: 'Interpreting a commercial document requires attention to the language used by the parties, the commercial circumstances which the document addresses, and the objects which it is intended to secure.' This statement was applied in Wilkie v Gordian Runoff Ltd [2005] HCA 17 ; (2005) 221 CLR 522 at 528-529 by Gleeson CJ, McHugh, Gummow and Kirby JJ. And in Maggbury Pty Ltd v Hafele Australia Pty Ltd [2001] HCA 70 ; (2001) 210 CLR 181 at 188[11] Gleeson CJ, Gummow and Hayne JJ said: 'Interpretation of a written contract involves, as Lord Hoffmann has put it ( Investors Compensation Scheme Ltd v West Bromwich Building Society [1997] UKHL 28 ; [1998] 1 WLR 896 at 912; [1997] UKHL 28 ; [1998] 1 All ER 98 at 114. See also the remarks of Mason J in Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24 ; (1982) 149 CLR 337 at 350-352, and of Lord Bingham of Cornhill in Bank of Credit and Commerce International SA v Ali [2001] UKHL 8 ; [2002] 1 AC 251 at 259): "the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract." That knowledge may include matters of law, ...'
Case: National Provincial Bank of England v Games (1886) 31 Ch D 582
Outcome: applied
Although the POSA did not create the relation of mortgagor, mortgagee and surety between Ringrow, BP, and the guarantors, the following observation by Fry LJ in National Provincial Bank of England v Games (1886) 31 Ch D 582 at 595 is apposite to the operation of cl A16.9(a). He held that an equitable mortgagee was entitled to recover, as money chargeable against the mortgaged property, its costs of seeking to enforce a promissory note given by a surety. Fry LJ said: 'A mortgagee is a creditor, he has also a security for the debt, and whether he is trying to get his money from the mortgagor, or from a surety, or out of the mortgaged property, he is trying to enforce his rights as mortgagee .' (emphasis added) 82 The costs which BP properly incurred in respect of its position as a party to the POSA ought be recoverable by it. That includes costs incurred by BP to the extent it acted reasonably in ascertaining or defending its rights under the POSA (cp: National Provincial Bank of England v Games (1886) 31 Ch D 582 at 592 per Cotton LJ applying Lord Cottenham LC in Dryden v Frost (1838) 3 My &amp; Cr 670 at 675 [40 ER 1084 at 1086]). Thus, as Lord Cottenham LC pointed out in Dryden v Frost (1838) 3 My &amp; Cr 670 at 676 [40 ER 1084 at 1087] if a mortgagee asserts a right to which the Court finds it was not entitled, those costs are not necessarily nor properly incurred in asserting a right which the mortgage gave the mortgagee. In other words, the mortgagee cannot recover costs arising from a mistake as to its rights or from an attempt to obtain something to which it is not entitled. Nor can a trustee recover costs incurred in fighting a doubtful case when he or she ought first to have sought the direction of the Court before continuing: Dagnell v Freedman &amp; Co [1993] 1 WLR 388 at 396E-H per Lord Browne-Wilkinson. And, in determining whether costs have been reasonably and properly incurred, it is relevant to consider whether they bear a reasonable relationship to the value and importance of the subject matter in issue ( Skalkos v T&amp;S Recoveries Pty Ltd [2004] NSWCA 281 ; (2004) 65 NSWLR 151 at 153 [8] per Ipp JA).
Case: Pan Australia Shipping Pty Ltd v The Ship 'Comandate' (No 2) [2006] FCA 1112
Outcome: considered
In Pan Australia Shipping Pty Ltd v The Ship 'Comandate' (No 2) [2006] FCA 1112 at [102] - [113] I examined the authorities on the meaning of the expressions 'arising out of' and 'arising from' in arbitration clauses in the context of whether disputes arose out of or from the relevant contract. As Lord Sumner observed in Produce Brokers Co Ltd v Olympia Oil and Coke Co Ltd [1916] 1 AC 314 at 328 the words are less precise than they look. He said that in strictness disputes arise not out of a contract but out of conflicting views taken by the parties to the contract. But, he said that the jurisdiction which the submission to arbitration confers is wide. 56 In contrast, here, the words 'arising out of' and 'arising from' in cll A14.2(f) and A16.9(a) are used with reference to an event so as to fix a liability on Ringrow. The event, of course, is a default under or breach of the POSA. Many costs could arise out of defaults by Ringrow under the POSA within cl A14.2(f). However, the POSA expressly recognized that the deed of option would be entered into by Ringrow and BP, yet, cl A14.2(f) does not refer to that deed. 57 I do not derive much assistance from the cases which were cited on the meanings of 'arising out of' or 'arising from'. Words in any particular contract, other than in standard form contracts used in, for example, international transactions, when construed by one court cannot be determinative of the construction of other words used in other contracts. It has not been suggested that the words employed in the POSA, the subject of cll A14.2 and A16.9, have been the subject of other judicial consideration.
Case: Port of Melbourne Authority v Anshun Pty Limited [1981] HCA 45 ; (1981) 147 CLR 589
Outcome: applied
In Port of Melbourne Authority v Anshun Pty Limited [1981] HCA 45 ; (1981) 147 CLR 589 Gibbs CJ, Mason and Aickin JJ held that an estoppel arose to prevent a party claiming under a contractual indemnity after it had sought indemnity or contribution from a joint tortfeasor based on a statutory right and recovered only a proportion of its loss by way of contribution. The reason why the estoppel arose in that case was because the party who relied upon the contractual right could not obtain a judgment which was inconsistent with the partial recovery allowed under the statutory cause of action in the earlier proceedings. 41 Gibbs CJ, Mason and Aickin JJ said (at 147 CLR at 602-603) that there would be no estoppel unless it appeared that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it. They said that generally speaking it would be unreasonable not to plead a defence, if, having regard to the nature of the plaintiff's claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceedings. But they said that in that respect, there are a variety of circumstances, some referred to in earlier cases, why a party may justifiably refrain from litigating an issue in one proceeding when it wished to litigate that issue in other proceedings. They gave as examples the expense, importance of the particular issue, and motives extraneous to the actual litigation and referred to illustrations given by the Supreme Court of the United States in Cromwell v County of Sac 94 US 351 (1876) at 356-357. 42 In a case like the present, a judgment given on BP's contractual claim for costs would not be capable of conflicting with the Court orders for costs. The curial entitlement for costs is, as the authorities considered in answering question 6 show, a different right to that provided by a contract. And, the contractual right is conditioned by the implied qualification in those authorities that what is recoverable are costs 'properly incurred'. Nor is there any inconsistency likely to arise between a curial award of costs, either on a party/party basis, and a contractual entitlement on a higher scale. Of course, had BP been denied an order for costs or been ordered to pay Ringrow's costs, a claim under the POSA by BP would be met by a defence that the costs claimed had not been 'properly incurred'. 43 For these reasons, no estoppel operates to prevent BP making the contractual claim.
Case: Potter v Dickenson [1905] HCA 26 ; (1905) 2 CLR 668
Outcome: considered
In Potter v Dickenson [1905] HCA 26 ; (1905) 2 CLR 668 at 678-679 Griffith CJ (with whom Barton and O'Connor JJ agreed) said that in a court of law the term 'costs' included not only payments for proceedings in court, and other matters which can only be done by a solicitor, but also payments out-of-pocket, such as for court fees, and for securing the attendance of witnesses. He said that it included: '... all the necessary expenses of a party in establishing his case. When we speak of costs between solicitor and client, another distinction comes in between profit costs and out of pocket costs. As far as the client is concerned they are all out-of-pocket costs, but he will only be allowed to recover from the other party the proper charges incurred in establishing his case.'
Case: Re Shanahan (1941) 58 WN (NSW) 132
Outcome: considered
In Re Shanahan (1941) 58 WN (NSW) 132 at 134 Street J said that the general rule was that, without any express stipulation or agreement, a mortgagee is entitled to recover from the mortgagor all costs reasonably and properly incurred by him in relation to its security. He said that that right accrued to the mortgagee as a legal incident annexed to the relationship of mortgagor and mortgagee and was available for the protection of the latter both in its personal capacity as a creditor and also in respect of its proprietary rights over the secured property. He held that only those costs which were recoverable by a mortgagee which were 'properly payable on a party and party taxation, and this is the general rule where litigation is undertaken by the mortgagee for the protection of his security: In re Queen's Hotel Co Cardiff Ltd [1900] 1 Ch 793 (see 58 WN (NSW) at 135). 78 Justice Street went on to hold that the relevant contractual provision in Re Shanahan (1941) 58 WN (NSW) 132 provided a wider entitlement to the mortgagee than the position at general law. The contract gave the mortgagee an entitlement to all costs and expenses in addition to those for which the mortgagor might have been liable at law or in equity to pay to the mortgagee. 79 Accordingly, Street J held that the mortgagor had undertaken to indemnify the mortgagee in respect of any expenditure which the latter might have incurred in their capacity as mortgagee and in relation to the secured debt. This, he said, imposed an obligation on the mortgagor 'to pay all costs which would be payable by the mortgagees to their own solicitor, and such costs, if properly payable on 'a solicitor and his own client taxation'. Thus costs which were unjustifiably or vexatiously incurred by the mortgagee so as to impose an unwarrantable burden on the mortgagor would not fall under the clause. And the taxing officer had a discretion to disallow some costs even though they might be payable by the mortgagees to their own solicitors, but the relevant clauses were to be construed widely (58 WN (NSW) at 136).
Case: Ringrow Pty Ltd v BP Australia Pty Ltd (2004) 209 ALR 32
Outcome: discussed
An appeal by the dealers and guarantors to the Full Court of this Court (Beaumont, Conti and Crennan JJ) was dismissed with costs ( Ringrow Pty Ltd v BP Australia Pty Ltd (2004) 209 ALR 32) as was their further appeal to the High Court ( Ringrow Pty Ltd v BP Australia Pty Ltd [2005] HCA 71 ; (2005) 222 ALR 306). The Lansvale site was reconveyed by Ringrow to BP earlier this year.