Van Der Velde v Ng [2011] FCA 594

Van Der Velde v Ng [2011] FCA 594

Clause 20 of the mortgage, properly construed, extends to legal costs reasonably incurred by the mortgagee (RAMS) in defending its position in litigation resulting from the mortgagor's (Ms Ng's) default and breaches, even where the mortgagee takes defensive or responsive steps, not just affirmative steps to enforce the mortgage. Such costs are 'enforcement expenses' under the clause, and under the terms of the mortgage should be paid by the mortgagor on a solicitor and own client basis if reasonable.

Parties
First Applicant: Terry Van Der Velde; First Applicant: David Stimpson; Second Applicant: Riby Pty Ltd (ACN 081 153 219) in liquidation as trustee for the Jade Trust; First Respondent: Kym Hon Yoke Ng; Second Respondent: The Official Trustee as Trustee of the Property of Ross Hastings (a bankrupt); Third Respondent: RAMS Mortgage Corporation Limited ABN 48 065 912 932
Jurisdiction
Australia
Judgment Date
01 June 2011
Procedural Posture
Application for Separate Question (costs) in Liquidation Related Proceedings / Judgment on Second Separate Question (costs as Enforcement Expenses Under Mortgage)
Outcome
Application by RAMS (third respondent) succeeded; the costs are enforcement expenses under the mortgage, payable by Ms Ng on a solicitor and own client basis.
Legal Topics
Enforcement Expenses Under Mortgage, Costs of Proceedings, Construction of Mortgage Clauses, Voidable Transactions, Winding Up of Company
Practice and Procedure Banking and Finance Law Insolvency Law Property Law Enforcement Expenses Under Mortgage Costs of Proceedings Construction of Mortgage Clauses Voidable Transactions +1 more

Case Brief

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Parties

Terry Van Der Velde

First Applicant

David Stimpson

First Applicant

Riby Pty Ltd (ACN 081 153 219) in liquidation as trustee for the Jade Trust

Second Applicant

Kym Hon Yoke Ng

First Respondent

The Official Trustee as Trustee of the Property of Ross Hastings (a bankrupt)

Second Respondent

RAMS Mortgage Corporation Limited ABN 48 065 912 932

Third Respondent

Procedural Posture

Application for Separate Question (costs) in Liquidation Related Proceedings / Judgment on Second Separate Question (costs as Enforcement Expenses Under Mortgage)

Legal Issues

  1. 1 Whether costs incurred by the mortgagee (RAMS) in the proceedings are 'enforcement expenses' under clause 20 of the mortgage
  2. 2 Whether such costs are payable by the mortgagor (Ms Ng) on a solicitor and own client basis
  3. 3 Proper construction of clause 20 of the mortgage as to enforcement expenses

Ratio Decidendi

Clause 20 of the mortgage, properly construed, extends to legal costs reasonably incurred by the mortgagee (RAMS) in defending its position in litigation resulting from the mortgagor's (Ms Ng's) default and breaches, even where the mortgagee takes defensive or responsive steps, not just affirmative steps to enforce the mortgage. Such costs are 'enforcement expenses' under the clause, and under the terms of the mortgage should be paid by the mortgagor on a solicitor and own client basis if reasonable.

Court Disposition

Application by RAMS (third respondent) succeeded; the costs are enforcement expenses under the mortgage, payable by Ms Ng on a solicitor and own client basis.

Orders

  • The first respondent (Ms Ng) is to pay the costs of the third respondent (RAMS) of and incidental to the proceedings on a solicitor and own client basis.
  • The costs the subject of Order 1 are enforcement expenses for the purposes of clause 20 of the mortgage entered into between the first respondent (Ms Ng) and the third respondent (RAMS) which bears Dealing No. 709600530 assigned to it upon registration in the Queensland Land Registry over land described as Lot 188...