Her Honour Judge Marshall QC
1. This is an appeal, brought with my permission, by the Claimant Vedalease Limited, from parts of the decision in the Supreme Court Costs Office made by Master Wright, given on 19th February 2008. The parts of the order appealed against are those by which he held that the Defendant Cascabel Investments Limited was entitled to add costs to its security over Vedalease’s property (now represented by funds in court) being
(1) all its costs of instructing the firm Anthony Gold as solicitors in relation to matters subsequently forming the subject matter in Action and Counterclaim No CHY03218 in the Central London County Court between (inter alia) Vedalease and Cascabel and
(2) all of its costs of the trial of issues before HH Judge Collins CBE on 2nd February 2006, in which Judge Collins had ordered that Vedalease should pay to Cascabel 2/3 of the costs of the relevant proceedings.
History
2. In 1998 Vedalease was the vehicle for the acquisition of finance to purchase valuable property on behalf of its parent company, Haprise Limited. It obtained a secured loan of £600,000 from Cascabel, an offshore company managed in
3. The Cascabel finance was expensive and Vedalease wanted to redeem it and obtain cheaper finance. Whilst maintaining that it was independent of Averti, (as was literally so) Cascabel placed difficulties in the way of redemption, unless Vedalease accepted Averti’s rights under the Deed of Trust. This occurred because the affairs of both Averti and Cascabel were administered by the same managing clerk in the firm of Le Gallais & Luce in
4. Vedalease believed there was a conspiracy. On 6th August 2002, it therefore made the decision to stop paying any more interest to Cascabel, to try to force the issue. This prompted the intervention of higher management at Le Gallais & Luce, and Mr Amy’s influence was removed. In January 2003, Cascabel instructed solicitors Anthony Gold, to pursue the repayment of the loan and unpaid interest. In April 2003, Cascabel appointed Receivers over the property pursuant to the Law of Property Act 1925.
5. Also in April 2003 Vedalease commenced proceedings against Averti to set aside the Deed of Trust. One year later it brought Cascabel into the action, claiming damages for the alleged conspiracy between Cascabel and Averti. It perceived its damage to be the loss represented by the cost of paying an excessive interest rate after it should have been able to redeem the loan, and also (I think) claimed costs incurred in other associated actions. It also sued the solicitors, Pegram Heron, who had acted for it in the original transaction, for negligence. Cascabel defended the claim and counterclaimed for repayment of the loan and interest.
6. In July 2004 Vedalease obtained summary judgment against Averti, setting aside the Deed of Trust. It was thus able, from that time, to redeem Cascabel’s legal charge solely on payment of the sums properly due thereunder.
7. Vedalease settled its claim against Pegram Heron for a money judgment, but the dispute with Cascabel continued. On 16th May 2005, that dispute, together with linked proceedings between Haprise and Cascabel, was compromised by a Tomlin Order. The body of the Order provided that
(1) Vedalease’s claim against Cascabel should be dismissed with no order as to costs;
(2) All further proceedings on Cascabel’s counterclaim should be stayed on terms set out in a Schedule.
The scheduled terms were quite elaborate but in essence provided that Vedalease should be entitled to redeem Cascabel’s charge at a reduced rate of interest provided that full payment was made by 4 pm on 13th June 2005. However, it also provided that
“13. Vedalease agrees that if it should fail to repay the Loan and pay the Reduced Arrears by 4 pm on 13th June 2005, Cascabel will be at liberty to restore its counterclaim… for repayment of the Loan together with the Arrears of Interest and continuing interest upon the Loan from 16 May 2005 until payment at the full rate of 10% per annum and together with costs, and the Receivers will be at liberty to continue to exercise their receivership.”
It was further agreed in Paragraph 14 that, save as aforesaid in the Schedule, there should be no further claim or recovery between the parties as to costs of the claim including the counterclaim. Paragraph 15 acknowledged that the operative scheduled terms were in full and final settlement between the parties.
8. Vedalease did not pay the agreed amounts by 13th June 2005. There was some negotiation between the parties, but on 22nd September 2005, Cascabel applied to restore its counterclaim in accordance with Paragraph 13 above. Vedalease disputed its right to do so.
9. In December 2005, Vedalease sold the property, the charge was redeemed and monies were paid into court pending resolution of the dispute about the extent of monies which Cascabel was entitled to recover.
10. On 2nd February 2006 HH Judge Collins CBE tried agreed preliminary issues between the parties as to whether (1) Cascabel was entitled to restore its counterclaim, or (2) was estopped in the circumstances from doing so and (3) whether Vedalease was entitled to rely on the matters allegedly founding its claim in the action (which had been dismissed in the body of the Tomlin Order) as matters of defence to Cascabel’s counterclaim. Judge Collins decided the first two issues in favour of Cascabel and the third in favour of Vedalease. Cascabel was therefore entitled to proceed on its counterclaim but Vedalease was not precluded from seeking to prove the matters alleged in its claim and rely on them as grounds of defence to Cascabel’s counterclaim. Judge Collins ordered that Vedalease should pay two thirds of Cascabel’s costs of the trial of the preliminary issues. Vedalease unsuccessfully sought to appeal Judge Collins’ decision.
11. The second issue in this appeal is whether, given Judge Collins’ order relating to the costs, Cascabel is entitled to recover the whole of its costs incurred on that trial out of its security or only two-thirds. Master Wright, as the Costs Judge, decided that it was and Vedalease contends that this decision is wrong.
12. By this time, Cascabel had received payment of the outstanding loan and arrears of interest as claimed. The remaining issues in the counterclaim therefore concerned its pleaded right to be paid its
“reasonable costs of redemption of the said legal charge and recovery of the said principal sum and interest, to include the steps taken by the Law of Property Act Receivers appointed on 8th April 2003.”
Its Counterclaim was formally re-amended in September 2006 to reflect this position.
13. The trial of this counterclaim took place before me. Whilst accepting in principle that Cascabel was entitled, as mortgagee, to recover its reasonable costs of redemption (ie obtaining redemption by payment) out of the security, Vedalease asserted that neither the costs of instructing Anthony Gold, nor the costs of the LPA Receivers could constitute such reasonable costs. This was because, it argued, they had only been occasioned by Cascabel’s wrongful refusal to permit earlier redemption when Vedalease sought it, which refusal was wrongful because it was the result of Cascabel’s unlawful conspiracy with Averti. It also argued that in any event the costs and expenses of the Receivers could not be added to the security, beyond the amount specified in s 109(6) of the Law of Property Act 1925.
14. At the trial I concluded that whilst there had been such a conspiracy between Averti and Vedalease, this was not the cause of Cascabel’s instructing Anthony Gold and of the consequent costs and expenses it thereby incurred. That cause had been Vedalease’s misguided and legally unjustified decision to stop paying interest rather than to take redemption proceedings (or similar) itself. I found as a fact that nothing done on behalf of Cascabel by Anthony Gold after they were instructed was anything other than pursuit of the preservation and enforcement of Cascabel’s security in a forceful but perfectly proper manner. I concluded, therefore, that the expenses incurred by Cascabel in instructing Anthony Gold were properly and reasonably incurred in the circumstances, and were therefore in principle recoverable out of the security. However, I held in Vedalease’s favour that Cascabel’s right to recover costs did not extend to the costs incurred by the Receivers in excess of their statutory commission under s 109(6) of the Law of Property Act 1925, absent any provision in the Legal Charge expressly or impliedly authorising any extension of such commission.
15. The relevant part of the consequential order I made in the case, which was in a form agreed by the parties, was as follows
“ (1) The costs incurred by [Cascabel’s] solicitors, Anthony Gold, are not in principle unreasonably and improperly incurred and, subject to detailed assessment on the indemnity basis if not agreed, such costs may be paid out to [Cascabel] from the monies in court”.
(I observe that the reference to costs “incurred by Cascabel’s solicitors” is strictly inaccurate and probably ought to read “costs incurred by [Cascabel] to its solicitors…”, but the intended meaning of the order was perfectly plain with regard to that aspect.)
16. The first limb of this appeal is whether Cascabel is entitled (subject to argument on any particular item) to recover the whole of the fees and disbursements charged to it by Anthony Gold in relation to the matters in the Action which became CHY03218, or whether, as Vedalease argues, it is not entitled to recover the costs incurred by it on the Claim in the action, but only on the Counterclaim. Master Wright concluded that under the terms of the Order of 7th March 2007, it was so entitled. Vedalease says that this is wrong.
General observations
17. In respect of both limbs of the appeal, I was referred to the leading case of Gomba Holdings Ltd v Minories Finance [1993] Ch 171. I was referred especially at 185 A – F, in relation to the first limb of the appeal, by Mr Mayall for Vedalease. On the second limb of the appeal, I was referred especially to p 194 A- E, and the following illustration of the principles there set out, by Mr Fetherstonhaugh QC for Cascabel.
18. Both parties acknowledge that the principle applicable is that
“a mortgagee is entitled to add to the secured debt his costs, charges and expenses properly incurred in enforcing and preserving his security”. .
First limb of appeal – Anthony Gold’s costs
19. The relevant dispute in the trial before me was whether the costs charges and expenses incurred by Cascabel to Anthony Gold through its fees and charges fell within the above rubric. I have set out the terms of my order of 7th March 2007 in this respect at Paragraph 15 above.
20. The issue whether Master Wright’s decision on this first point in the appeal was right or wrong therefore depends on the true construction of paragraph 1 of my Order, and not whether the costs there described were in fact within the relevant rubric, because I had already decided that. Master Wright was concerned with a detailed assessment of the costs referred to in the Order, and not a decision in principle. A Costs Judge’s function is to quantify the costs referred to by the Order, regardless of any question about whether or not it should have been made, cp Cope v United Dairies [1963] 2 QB 33 at p 42-43. In the event, though, the arguments in this appeal have extended into the merits of the Order made, under cover of arguments about what the true construction of paragraph 1 of the Order truly was, having regard to its context.
21. Mr
22. Mr Mayall, appearing for Vedalease, argues that this is not the true construction of the Order. He points out that some limitation on the phrase “the costs incurred by[sic] Cascabel’s solicitors, Anthony Gold” in Paragraph 1 of the Order is necessarily implicit, because the words would otherwise be apt to include any legal costs so incurred, even on matters not related to the dispute. Some implicit limitation therefore being necessary, he then goes on to argue that, again because of the context, the order made was only apt to cover the costs of the counterclaim and not any costs incurred in relation to the claim. He says this is because the court was dealing only with the counterclaim: see paragraph 3 of my judgment where this is expressly recorded. Therefore, although throughout the judgment there is reference to Anthony Gold’s costs in general terms, those references have to be interpreted against this background, and in fact refer only to costs regarding the subject matter of the trial, ie the counterclaim. The reference to “costs” in apparently unlimited general terms was a convenient but misleading shorthand.
23. In support of the proposition that it is plain that I did not think I was dealing with the costs of defending the claim in my judgment or order, Mr Mayall points out that the costs are described in the Re-amended [Defence and] Counterclaim as Cascabel’s costs of “redemption and recovery of the principal and interest”. He submits that as the claim was a claim for damages for conspiracy, it was nothing to do with the “redemption and recovery of the principal and interest”, even if that description is equated to “preserving and enforcing the security”. Thus, the counterclaim was not concerned with those costs, and as the court was concerned only with the counterclaim, neither was Paragraph 1 of the Order, correctly construed, so concerned.
24. Mr Mayall further submits that this is supported by impression, because, having found that Vedalease had been right about there being a conspiracy between Cascabel and Averti, the court could not possibly have intended that the costs incurred by Cascabel in resisting that claim could be classed as costs “reasonably and properly incurred [sc in preserving or enforcing the security]”. On any basis, in that context, they could not (he says) have been “reasonably” or “properly” so incurred.
25. Mr Mayall also relies on the terms of the Tomlin Order of 16th May 2005. The Claim itself was agreed to be dismissed with no order as to costs and thus he submits that by agreement, (which would supersede any pre-existing implied contractual right under the Legal Charge) the costs of defending the claim were abandoned by Cascabel, as part of the compromise agreement. As I understood Mr Mayall, he argued this point either as a point in aid of the true construction of my order being limited as he contended, or alternatively as a free-standing point on its own, with regard to the scope of the costs of Anthony Gold which were within the implied contractual right of Cascabel to add costs to its secured debt.
26. Thus, Mr Mayalls’ three points were, in essence, that
(1) the legal costs of defending the Vedalease’s claim were not part of the costs of “preserving or enforcing” the security,
(2) even if they were, they were not “properly” or “reasonably” incurred because Cascabel lost that issue, and
(3) even if that were wrong, they were in fact compromised away by the terms of the Tomlin Order and were therefore not recoverable
27. Mr Fetherstonhaugh QC as I have indicated, disputes all these arguments. He says that the scope of paragraph 1 is plain, not merely on the face of the words themselves, but in the context of the way in which both parties argued the case before me.
28. He pointed out that throughout Vedalease’s pleadings and argument, it had disputed Cascabel’s right to recover “the costs of Anthony Gold” without distinction as to any parts of such costs. Unsurprisingly, therefore, my judgment had been expressed in similar terms. I had been invited to consider simply the recoverability of Anthony Gold’s charges in toto and that is what happened.
29. Second, Vedalease’s claim had always been for damages which it claimed to set off against the sums which Cascabel was otherwise contractually entitled to charge on the property. In that sense, the costs of defending the claim were in fact costs of preserving the security because they were incurred in resisting an attack on its extent.
30. Third, he reminded me that I had found that after their instruction, Anthony Gold had simply sought to enforce (or negotiate about) Cascabel’s security in a forceful but perfectly proper manner, and that they had been instructed a whole year before Vedalease had made its claim against Cascabel at all. Plainly, therefore, costs incurred in that early period were not costs incurred in defending the claim, and were incurred only in order to protect Cascabel’s interests as secured creditor, and my finding entailed that they had been properly and reasonably incurred in pursuit of that aim in principle. The commencement of Vedalease’s claim had made no difference to this, and no distinctions could be drawn between the character of the costs incurred before and after the commencement of that claim. It was all part of a single process.
31. Mr Mayall’s argument, he submitted obfuscated the issue by confusing the recoverability of costs awarded by way of court order with the recoverability of costs which were the subject of a claim because they were relied on as the measure of damages or indemnity. The counterclaim had been concerned with the latter, and it was clear from Cascabel’s pleading that this had always been its intention. It was also clear from Vedalease’s pleading and all its other documents (skeleton arguments and so forth) that it had had the same understanding and intention. Both parties had always proceeded on the basis that the subject of the counterclaim was all Anthony Gold’s charges to Cascabel in relation to matters involving Vedalease and the security.
32. With regard to the further argument that these costs had been compromised away by the Tomlin Order, he submitted, first, that this was not a true construction of the Order. Whilst the claim had been dismissed with no order as to costs, the terms of Cascabel’s acknowledged right to restore its counterclaim, if Vedalease did not make the reduced payments in time, entitled it to restore all the subject of its counterclaim, with “costs” expressly included. Thus, the true scope of the original pleaded counterclaim defined the scope of the trial, independently of the other terms of the Tomlin Order.
33. His further submission was that for this point to have substantive effect, it was an argument which could and should have been taken at the trial of the counterclaim itself. It had not been (as the record clearly showed) and it was simply too late to do so now: see the principle in
34. Finally he argued that if this were wrong, any order limiting the extent of recovery of Cascabel’s costs to exclude the costs of defending the claim should be clearly confined to costs which were exclusively referable to that. Most such costs would, he submitted, be incurred equally as part of refuting the defence to the counterclaim which Vedalease was entitled to advance, and as such they were clearly within the scope of Paragraph 1 of the Order, even if it was interpreted as Vedalease was contending. Indeed, it became apparent in the course of argument that not only was Mr Mayall not in a position to indicate the quantum of the costs which were in issue on this appeal in practice, but that the costs referable exclusively to defending the claim would be relatively small.
Conclusion on first issue
35. Initially, Mr Mayall’s skilful argument (to which I pay tribute) caused me to think that there might be force in his proposition that because I had been concerned only with the counterclaim, I had inadvertently expressed my judgment (and the consequent order) in terms which, read literally, were wider than the true scope of the subject matter of the counterclaim, and which could not have been intended in the light of my finding about the propriety of Cascabel’s behaviour through Mr Amy. Indeed, this was the consideration which caused me to give permission to appeal.
36. However, following full argument, and in particular Mr Fetherstonhaugh’s careful exposition of the way in which the case developed at each stage, I am satisfied that this is not the case.
37. First, I am satisfied that throughout the trial of the counterclaim, and also in the order which I made (the terms of which were agreed between the parties as reflecting the judgment which I had given) the “costs incurred by[sic] Anthony Gold” were intended to refer to the whole of Anthony Gold’s charges to Cascabel following their instruction, without qualification.
38. That is in fact enough to dispose of this element of the appeal. Master Wright did not misinterpret the order and therefore his decision is correct.
39. However, since argument was addressed to the merits of this interpretation, albeit framed as considerations of the “context” which would affect it, I think it right to add that I have formed the view that this was the correct interpretation of Cascabel’s right as mortgagee to add costs to its security in any event.
40. The fundamental issue on this part of the counterclaim was whether Anthony Gold’s costs were “costs charges and expenses reasonably and properly incurred in preserving or enforcing the security”. Mr Mayall argued that they were not, because of the character of Vedalease’s claim as a claim for damages for conspiracy, and that that therefore defending it was “nothing to do with” preserving or enforcing the security.
41. The object of Vedalease’s claim was to reduce the amounts which Cascabel could retain out of the proceeds of the property by way of security, if necessary even as against what it was obviously entitled to by way of principal sum and agreed interest. Resisting or defending such a claim was therefore, in my judgment, “preserving” the security, since it was preserving or protecting the extent of its value to Cascabel. I therefore do not accept Mr Mayall’s argument that defending a claim for damages for conspiracy has “nothing to do with” enforcing or preserving the security.
42. Furthermore, the fact that the claim was also framed as a claim for damages for breach of an implied term in the Legal Charge (sc: that Vedalease should be able to redeem the charge on payment of the proper sum required) in my judgment reinforces this point, and that costs incurred in dealing with Vedalease’s claim cannot be decoupled from costs incurred in preserving Cascabel’s security.
43. Second, I reject the argument that my finding that Cascabel had, in fact, been guilty of a conspiracy with Averti somehow affected these costs incurred by Cascabel so as to make them “unreasonably” incurred. Vedalease made its claim against Cascabel, but chose not to pursue it but to compromise it. That compromise preserved Cascabel’s security as provided by its terms, and the costs incurred in achieving it were properly and reasonably incurred for that purpose. The achievement of a compromise in a claim which is left undecided is not rendered illegitimate or improper, in my judgment, by the fact that subsequently some earlier disputed fact, which the parties agreed to leave unresolved in order to obtain the certainty of the compromise, is later resolved in what would have been one side’s favour.
44. Third, and in any event, the argument for a different treatment of the costs of defending the claim as against the other costs in the light of the terms of the Tomlin Order was an argument which could and should have been taken at the trial before me. It was not, and in my judgment it would now be an abuse of process for Vedalease to do so.
45. There is, however, an even more fundamental objection to Vedalease’ advancing this argument. It would involve, in effect, reopening the issues in the trial, in the face of the order which I made and which determined them, and, in substance, amending that order. However, once an order is made, its terms can only be varied under the “slip rule”, or by way of appeal, or by way of action to set aside the judgment for proper cause. No such route is being employed, nor is one available to Vedalease here. It cannot seek, in effect, a retrial of the action under the guise of arguing about the scope of the order on an assessment of costs.
46. For those reasons, I will dismiss the first point in the appeal.
Second point in the appeal – Costs before HH Judge Collins CBE
47. Mr Mayall argues that, in making the order that Cascabel should be entitled to recover only two-thirds of its costs of the trial of the preliminary issues, Judge Collins was intending that his order should have some practical effect, and he plainly intended that Cascabel should not be entitled to recover all of those costs from Vedalease. Therefore he must have intended that this order would limit Cascabel’s right to add all of its costs to the security, since otherwise the intended effect of his limited order would be entirely subverted. Again it is the immediate attractiveness of the apparent logic of this proposition which caused me to give leave to appeal.
48. However, Mr Fetherstonhaugh submits that this argument simply overlooks the distinction between Cascabel’s contractual entitlement to add costs to its security and the effects of a court order awarding costs.
49. He refers me to Gomba Holdings Ltd v Minories Finance [1993] Ch 17 .at page 194, which emphasises this distinction. In particular he refers to the passage under principles (iv) and (v):
“(iv) A decision by a court to refuse costs, in whole or in part, to a mortgagee litigant may be a decision in the exercise of the section 51 discretion [I interpolate: ie the court’s discretion to award the costs of litigation] or a decision in the exercise of the power to fix terms on which redemption will be allowed, or a decision as to the extent of the mortgagee’s right to add costs to the security or a combination of two or more of these things. The pleadings in the case and the submissions made to the judge may indicate which of the decisions to which we have referred is being made.
(v) A mortgagee is not, in our judgment, to be deprived of a contractual or equitable right to add costs to the security merely by reason of an order for payment of costs made without reference to the mortgagee’s contractual or equitable rights and without any adjudication as to whether or not the mortgagee should be deprived of those costs.”
Conclusion on second issue
50. Once again, I remind myself that this is an appeal from the decision of Master Wright sitting as a Costs Judge, and I must therefore be satisfied that Master Wright’s decision in favour of Cascabel was wrong in law, or was otherwise a decision which he could not reasonably have come to. I have in fact concluded, however, that Master Wright was correct.
51. It is obvious that Judge Collins was not purporting to declare the extent of Cascabel’s contractual right to recover costs according to the true interpretation of the Legal Charge. This charge was in fact silent as to the right to recover costs in any event, so that only the mortgagee’s general equitable right to add costs to the security could arise. The issue therefore was and is whether Judge Collins was purporting either to exercise the court’s discretion to fix the terms as to which redemption would be allowed, or (which probably amounts here to the same thing) the extent of the mortgagee’s right to add particular costs to the security, as contrasted with exercising his Section 51 discretion to award costs in proceedings. Master Wright concluded that it was the latter, because Judge Collins did not refer to the former or indicate that he considered that he was limiting or purporting to affect this equitable right.
52. I too have looked at Judge Collins’ judgment, and the transcript of the proceedings before him and the discussion about costs, and I have come to the same conclusion.
53. First, Judge Collins’ order was plainly made, as he stated, as a reflection of his general assessment of the balance of success between the parties on the contest which had been argued out before him, ie “the application”. It was thus, on its face, a decision made on the basis of the principles applying to the court’s discretion under CPR Part 44.3 to make an award of costs and not one made on the different principles which might apply to a mortgagee’s equitable right to add his costs to the security.
54. Second, the transcript shows that Judge Collins was well aware that the mortgagee did not need to claim its costs in order to be able to add them to the security. There was an exchange between him and Mr Fetherstonhaugh in which this point was raised. One would have thought, therefore, that if he believed that he was regulating or affecting this equitable right there would have been some evidence of that in what he said. I can see none.
55. Third, the fact that Judge Collins was plainly well aware of the mortgagee’s independent right to add costs to the security, far from suggesting, therefore, that his order must have been intended to limit this right, to my mind points the other way. If Judge Collins had intended this effect, he would have said so in terms. In fact, he merely ordered the “Claimants to pay two thirds of the Defendant’s costs to be determined by detailed assessment”. Such a form of order is appropriate only to a court order, and not to any operation of the mechanism by which costs are added to the security.
56. Fourth, the argument which seems to support Mr Mayall’s proposition is the obvious one that, unless he is correct, Judge Collins’ costs order in fact has no practical effect at all. Mr Mayall argues that it cannot be supposed that Judge Collins was wasting his time making idle orders. However, Mr Fetherstonhaugh does not shrink from this result, submitting that if it is the inevitable effect of the principles in Gomba above (as he says it is) then so be it.
57. In fact, I do not think the position is as unsatisfactory and illogical as this may suggest. It does not follow from the fact that Judge Collins’ order in this case may have no effect in practice if Mr Fetherstonhaugh is right, that such an order never could have any effect. A court order in costs becomes enforceable against the other party personally as a judgment debt. However, the effect of the mortgagee’s right to add costs to the security is that these become a charge on the property in question, but not a personal payment obligation of the mortgagor. It follows that it is possible to conceive of a case where an order for costs may have practical effect apart from the mortgagee’s implied right to add costs to his security. If the contractual security is a mere charge with no personal covenant for payment, and the value of the property turns out to be insufficient to satisfy payment of the loan, the interest, and the mortgagee’s proper costs, then a costs order in favour of the mortgagee may enable him to recover further sums by way of costs against other assets of the mortgagor even though his implied right to add such costs to the security is worthless because the security has been exhausted.
58. Fifth, and very significantly in my judgment, principle (v) from Gomba, cited above, emphasises that the mere making of a costs order by a court is insufficient to displace or limit the mortgagee’s general equitable right to add costs to the security. The fact that such an order will not have that prima facieeffect means, in my judgment, that clear further evidence of an intention by the court to have that effect, and deliberately to limit what is otherwise the mortgagee’s equitable (or contractual) right, is required. I can see none in this case, in either the judgment of Judge Collins or the discussion after his judgment.
59. Had any such effect been intended, or contended for, then Gomba also shows that there would have had to be not only some sign that this was the case, but also a proper consideration of, and an adjudication upon, the question whether the facts justified the court’s imposing any such limitation, as a matter of equity. None of that occurred.
60. It follows that Master Wright was, in my judgment, quite correct on this second point as well, and this limb of the appeal should also be dismissed.
Result
61. In the event, therefore this appeal is dismissed. I can see no reason why it should not be dismissed with costs if Cascabel, as successful respondent, wishes me to make such an order, although it may not regard that as necessary.
62. I make it clear that in making any such order without more, I would be exercising my discretion under CPR Part 44.3 to award costs to a successful party, subject to detailed assessment on the standard basis if not agreed. I also make it clear, for the avoidance of doubt, that any such order would not be intended to deprive Cascabel in any way of its rights as mortgagee to add its reasonable and proper costs incurred on this appeal to the security, on the usual equitable basis (which is in effect the indemnity basis), and that this is so even though even if that intention is not expressly recited in the order.
63. If either party wishes to contend for any different order than as above, then the parties will need to arrange for an attended hearing post judgment for this purpose.
Hazel Marshall QC
24th April 2009
