To briefly recap, Perpetual Trustee Company Ltd
(Perpetual) received an application for finance
from a mortgage broker, Milanex Pty Ltd (Milanex),
on behalf of Mr Kotevski who was, at the time, a 74 year old
pensioner. As security for the loan, Mr Kotevski gave Perpetual a
mortgage over his previously unencumbered property. At first
instance (Supreme Court Proceedings), Patten AJ
dismissed Perpetual's claim against Mr Kotevski and also
dismissed Perpetual's cross claim against Milanex for, amongst
other things, misleading and deceptive conduct.
In handing down its decision, the Court of Appeal overturned
Patten AJ's decision and found that Milanex's misleading
and deceptive conduct had caused Perpetual to suffer loss and
Following the decision of the Court of Appeal, both Perpetual
and Milanex filed notices of motion seeking, amongst other things,
variations to the orders made by the Court of Appeal in relation to
the costs of the appeal and the costs of the Supreme Court
Perpetual sought orders that Milanex:
pay its costs in respect of the cross appeal; and
indemnify it in respect of costs orders obtained by Mr Kotevski
against Perpetual in the Supreme Court Proceedings.
The Court found that Milanex was liable to pay Perpetual's
costs of the cross appeal as Perpetual was the successful party of
the appeal, notwithstanding that the quantum of Perpetual's
claim was limited by the application of the proportionate liability
provisions of the Civil Liability Act.
The Court also found that Milanex was liable to indemnify
Perpetual against any costs which it might have to pay to Mr
Kotevski as a result of the decision in the Supreme Court
Proceedings. Milanex argued that it should not be made to indemnify
Perpetual in respect of all of the costs which Perpetual was
ordered to pay to Mr Kotevski as Perpetual had mounted an
unnecessary and ultimately unsuccessful claim against Mr Kotevski.
However, the Court held that for Perpetual to show that it had
suffered damage as a result of the misleading and deceptive conduct
of Milanex, it needed to show that the funds advanced by it to Mr
Kotevski were irrecoverable. Accordingly, the Court held that
Perpetual had to take the action it did in the Supreme Court
Proceedings and found that Milanex was therefore liable to
indemnify Perpetual against any adverse costs orders against it in
the Supreme Court Proceedings.
Additionally, Milanex also argued that Perpetual was
contributorily negligent and accordingly, sought orders that the
Court consider its contributory negligence defence (which had not
been raised at the hearing). The Court declined to make the Orders
sought as Milanex failed to demonstrate at the hearing that
Perpetual was owed a duty of care by Milanex or that it had been
breached. Further, as Milanex had failed to raise this issue at the
hearing, it was prevented from doing so after the Court of
Appeal's Judgment had already been handed down.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
Kemp Strang has received acknowledgements for the quality of
our work in the most recent editions of Chambers & Partners,
Best Lawyers and IFLR1000.
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