Arab Bank of Australia Ltd v Jeitani (No. 2)

1. [1]

   On 13 May 2016 I provided my reasons for judgment in these proceedings on the cross-claim and directed that the parties should bring in short minutes to reflect those reasons and to deal with the matter of excess legal costs which had been resolved: Arab Bank of Australia Ltd v Jeitani [2016] NSWSC 617. On 3 June 2016 the parties produced Short Minutes of Order as directed. They indicated, however, that they wished to make submissions about costs.

2. [2]

   In my judgment of 13 May 2016 I said at [130]:

3. [3]

   The Bank accepted that the appropriate order was as set out in that paragraph. Mr Gittany submitted that a costs order more favourable to him should be made. His principal submission was that the Bank should be ordered to pay his costs of the cross-claim, alternatively that the Bank should be ordered to pay 70% of his costs.

4. [4]

   The basis for what was sought by Mr Gittany was, first, that there were essentially three aspects to the claim and he had been successful on two of them. Those two related to the discharge of the Earlwood mortgage and the excessive legal costs. Mr Carruthers of Counsel for Mr Gittany pointed to prayer 6 in the Amended First Cross-Claim and to his written submissions which, in the first instance, identified a number of anomalies in relation to the costs and then submitted that those matters were sufficient for an order for the taking of an account, alternatively, an order for a reference out under Uniform Civil Procedure Rules 2005 (NSW) 20.15 to a costs assessor.

5. [5]

   Prayers 5 and 6 in the Cross-Claim were as follows:

6. [6]

   Mr Carruthers drew attention to the Short Minutes of Order agreed between the Bank and Mr Gittany and in particular to paragraph 2(a) as follows:

7. [7]

   Counsel submitted further that the claim in relation to Earlwood essentially involved two aspects on both of which Mr Gittany was successful. The first concerned whether the mortgage was governed by the Credit Code and the second was whether the Bank had behaved unreasonably in any event.

8. [8]

   He submitted that if the GST claim was put out of consideration, the trial in relation to the Earlwood matter would have taken two days to hear, noting in that regard that the whole of the trial took three days. He pointed also to the fact that in relation to the GST claim the Bank was unsuccessful in some of its arguments.

Legal principles

1. [9]

   In Hughes v Western Australian Cricket Association (Inc) [1986] ATPR 40,748 Toohey J said at p.48,136:

2. [10]

   In Waters v P C Henderson (Aust) Pty Ltd [1994] NSWCA 338; (1994) 254 ALR 328 Mahoney JA (with whom Kirby P and Priestley JA agreed) approved Toohey J’s observations in Hughes ([22] above) and went on to say:

3. [11]

   In Permanent Trustee v FAI (unreported, NSWSC, 3 June 1998) Hodgson CJ in Eq also said (at 13):

4. [12]

   Those authorities speak of cases involving multiple issues. A more correct designation of the present litigation was that it contained three separate claims. The fact that they were separate claims and not just issues involved in the proof or defence of one claim only strengthens the conclusions in those cases as they can be applied to the present matter.

5. [13]

   In the first instance, those cases support a conclusion that the appropriate order in the present case for the issues that were tried should be that the Bank should pay Mr Gittany’s costs of the Earlwood mortgage claim and that Mr Gittany should pay the Bank’s costs of the GST claim: see also Laguillo v Haden Engineering Pty Ltd [1978] 1 NSWLR 306 at 309.

6. [14]

   As far as the claim for excessive costs is concerned a principal authority in the area is the decision McHugh J in Re Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex Parte Lai Qin (1997) 186 CLR 622. In that case McHugh J said (at 624-625):

7. [15]

   It was not suggested in the present case that the Bank acted unreasonably in its approach to this claim relating to excessive costs. Counsel for Mr Gittany sought to distinguish Ex parte Lai Qin on the basis that those proceedings were settled within a week of being commenced. I am not satisfied that this provides any basis for saying that the principles contained in it do not apply here. In the absence of it being shown that the Bank acted unreasonably the appropriate order in relation to the settled claim of costs is that there be no order as to costs.

8. [16]

   As far as the two issues that were tried are concerned what was said by the Full Court of the Supreme Court of Queensland in Thiess v TCN Channel 9 Pty Ltd (No. 5) [1994] 1 Qd R 156 is relevant:

9. [17]

   When assessing the time spent on separate claims or issues in a matter, a broad brush approach is appropriate. My assessment is that the time spent on each of the two claims took up roughly the same period of time. It is true that I made a separate finding of the Bank acting unreasonably in relation to the discharge of the Earlwood mortgage but my principal determination was that the Credit Code applied to that mortgage so that the Bank acted wrongfully. The consideration of the Bank’s unreasonableness otherwise was expressly considered only in case I was wrong in my determination concerning the Credit Code – see [124]. The evidence relating to that unreasonableness finding was largely the same evidence that resulted in the finding concerning the Credit Code.

10. [18]

    In my opinion, and applying Thiess to avoid two costs orders for the issue each party succeeded on, I consider that the appropriate order is that there should be no order as to costs to the intent that each party should pay his and its own costs. That will have the effect of avoiding two possible costs assessments with judgments set off against the other.

11. [19]

    Accordingly, the order will be that there be no order as to costs of the Cross-Claim to the intent that each party should bear his and its own costs.

12. [20]

    The orders I make are these: