Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Bendigo and Adelaide Bank Ltd v Karamihos (No 2) [2014] NSWCA 76 Hearing dates: On the papers Decision date: 25 March 2014 Before: Macfarlan JA at [1]; Ward JA at [8]; Sackville AJA at [9] Decision: In proceedings 2009/14393 in the Common Law Division: (1) Order that the defendants give possession to the plaintiff of the whole of the land comprised in folio identifier 4966/752015; (2) Grant leave to issue a writ for possession; (3) Judgment in favour of the plaintiff against the first and second defendants for the amount of $1,421,482.52, inclusive of interest to the date of this judgment. (4) Order the defendants to pay the plaintiff's costs. In proceedings 2012/334829 in the Equity Division: (5) Judgment for the defendant; (6) Order the plaintiffs to pay the defendant's costs. In both proceedings: (7) Order the respondents to pay the appellant's costs of the proceedings on appeal. (8) Direct that the respondents have certificates under the Suitors' Fund Act 1951 (NSW), if qualified. [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: PRACTICE AND PROCEDURE - consequential orders - entitlement of financier to have enforcement expenses payable under mortgage included in judgment amount Legislation Cited: Civil Procedure Act 2005 (NSW), s 101 Legal Profession Act 2004 (NSW), s 350 Ritchie's Uniform Civil Procedure (NSW) Suitors' Fund Act 1951 (NSW) Category: Consequential orders Parties: Bendigo and Adelaide Bank Ltd (Appellant) Steve Karamihos (First Respondent) Aristea Karamihos (Second Respondent) Representation: Counsel: J Stoljar SC/R I Bellamy (Appellant) V B Hughston SC/J F Merkel (Respondents) Solicitors: Gadens Lawyers (Appellant) Margiotta Solicitors (Respondents) File Number(s): CA 2013/154093 Decision under appeal Jurisdiction: 9111 Citation: Steve Karamihos and Aristea Karamihos v Bendigo and Adelaide Bank Limited; Bendigo and Adelaide Bank Limited v Steve Karamihos and Aristea Karamihos [2013] NSWSC 172 Date of Decision: 2013-03-08 00:00:00 Before: Pembroke J File Number(s): SC 2012/00334829; 2009/14393 Judgment 1MACFARLAN JA: The Court gave judgment in this matter on 14 February 2014, foreshadowing final orders to be made in favour of the Bank and directing submissions concerning the amount of the judgment to be entered. Those submissions were lodged in accordance with the directions. 2The Bank claims that it is entitled to judgment in the amount of $1,754,136.97, together with interest accruing from 19 February 2014 to the date of judgment at the rate of $359.95 per day. The Karamihoses accept that, in accordance with the Court's reasons for judgment, the Bank is entitled to a judgment for $1,404,479.72, plus interest from 19 February 2014 to the date of judgment. The difference is $349,657.25, representing enforcement costs that the Bank claims to be entitled to recover under the Mortgage given by the Karamihoses. 3Of this amount, $48,731.86 represents expenses incurred to the date of the hearing at first instance, which the Bank asserts formed part of the case that it pleaded and proved at that hearing. There is no reason not to accept that this was the case. As a result, the judgment now to be entered in favour of the Bank should include this amount. 4The remaining enforcement expenses ($300,925.39) were incurred after the commencement of the hearing at first instance and appear to be largely, if not wholly, comprised of legal costs. The Karamihoses contend that they should have the opportunity to have the legal costs assessed for their reasonableness in accordance with their rights under s 350 of the Legal Profession Act 2004 (NSW). 5Notwithstanding that the Bank has, since delivery of judgment on 14 February 2014, provided the Court with evidence (in the form of an affidavit and a certificate of debt given in accordance with clause 8.9 of the Mortgage) of the incurring of those enforcement expenses, I consider that the Karamihoses should be given the opportunity they seek in relation to them. As they were incurred after the commencement of the hearing at first instance, the claim for the costs was not, at least so far as quantum is concerned, part of the litigation at first instance and the Karamihoses have not yet been able to exercise their rights under the Legal Profession Act. The Bank should therefore be left to take such proceedings or other enforcement action for recovery of the costs as it considers appropriate. 6The Bank seeks an order that interest on the judgment amount accrue at the rate payable under the Mortgage. However, on its entry, the Bank's debt merges in the judgment and interest is therefore payable on the judgment under s 101 of the Civil Procedure Act 2005 (NSW) rather than at the contractual rate (Ritchie's Uniform Civil Procedure (NSW) [S101.25]). 7For these reasons, I propose the following orders: In proceedings 2009/14393 in the Common Law Division: (1)Order that the defendants give possession to the plaintiff of the whole of the land comprised in folio identifier 4966/752015; (2)Grant leave to issue a writ for possession; (3)Judgment in favour of the plaintiff against the first and second defendants for the amount of $1,421,482.52, inclusive of interest to the date of this judgment. (4)Order the defendants to pay the plaintiff's costs. In proceedings 2012/334829 in the Equity Division: (5)Judgment for the defendant; (6)Order the plaintiffs to pay the defendant's costs. In both proceedings: (7)Order the respondents to pay the appellant's costs of the proceedings on appeal. (8)Direct that the respondents have certificates under the Suitors' Fund Act 1951 (NSW), if qualified. 8WARD JA: I agree with Macfarlan JA. 9SACKVILLE AJA: I agree with Macfarlan JA. ********** Amendments 08 April 2014 - Typographical error Amended paragraphs: Coversheet and [7] DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 08 April 2014