Dimos v Willetts & Anor [2000] VSCA 154

REAL PROPERTY - Torrens title - Mortgage - Alteration - Whether authorised and authorised in writing - Point abandoned below - Instruments Act 1958, s.126.

PRACTICE AND PROCEDURE - Interest - Sum ordered to be held in trust pending trial - Whether successful claimant "the creditor" - Supreme Court Act 1986, s.58(1).

PRACTICE AND PROCEDURE - Costs - Order that one defendant pay "plaintiff's costs of the proceeding" - Held not to include plaintiff's costs of claim against other defendant dismissed with costs - Rule in Kelly's Directories v. Gavin & Lloyds [1901] 2 Ch.763 obsolete.

2. Having had the benefit of reading in draft the reasons prepared by the other members of the Court, I need do little more than express my obligation to them and my agreement. I venture, however, to add some remarks of my own on two matters that have been dealt with by Batt, J.A.

5. The first concerns the meaning to be attributed to the expression "prepaying" in s.49(1)(a) of the Interpretation of Legislation Act 1984. Although the expression, or one of its cognates, has long been part of statutory language here and elsewhere, the concept of prepaid post has never, so far as I know, been statutorily defined. So far as is now relevant, the concept owes its origins to the 19th century reforms in the English postal service for which Sir Rowland Hill is generally given credit. Before 1840 varying rates of postage were applied to letters individually, according to the distance travelled, payment being usually sought from the recipient. The charges, apart from being troublesome to calculate, tended to be expensive for long-distance mail and therefore often difficult to collect : addressees were wont to refuse to accept delivery by declining to pay. Moreover, in the days when private servants were commonly used for the purpose of metropolitan delivery, pre-paying a letter to be sent by the "two-penny post" used to be thought by some to be "little short of an insult"[1] to an addressee of any serious rank. There appears also in those days to have been an apprehension by senders of mail that pre-payment of the postage was likely to lessen incentive in the postman to deliver promptly or, perhaps, at all. For these among other reasons the postal service, not widely popular, was in need of reform. Hill's investigations revealed to him that the chief expense lay not in the mail's carriage, or the extent of its journey, but in the calculation and application of the postage charges and attempts to collect them. He recommended that most of the problems might be solved by the introduction of a postal service reliant on inexpensive, uniform prepaid rates and delivery on scheduled rounds by disinterested third parties. Thus was introduced in 1840 the well-known Penny Post, dependent as it was for its success on the celebrated "penny black" adhesive stamp.

8. Although use of the neologism "_pre_paid" was apparently thought by some to be "barbarous",[2] the Penny Post that spawned it was an immediate success. The innovation of 1840 was no doubt attractive to those responsible for conducting the postal service, avoiding the necessity in most ordinary cases to calculate charges and to collect them from addressees. It was presumably attractive also to users of the service on account of its comparative cheapness and efficiency; and, eventually, no less so to the addressee - relieved of any necessity to question the postman or to make payment - than to the sender, whose letter stood a substantially increased probability of being both timeously delivered and accepted by the addressee.

11. Central to the original concept of prepaid post were, true enough, the relief of the addressee from payment and the imposition on the sender of an obligation to pay for the service before it was provided. As the concept has developed it has been by no means dominated, however, as I should think, by an ineluctable necessity, as between the sender and the postal authority, for actual payment in advance provided that an arrangement for payment by the sender acceptable to the authority can be reached. Even more radical variations might be accommodated within the original theme without destroying the basic concept. For example it has been commonplace for many years[3] that a potential recipient, no doubt by arrangement with the postal authority, intimates to potential senders "no stamp required" (or something similar), assuming liability to pay if delivery is made. Such an arrangement might well qualify, for all practical purposes, as providing for prepaid post and to be fairly described as doing so. In the event I have, however, no need to descant on the possibilities of innovation; for I agree with Batt, J.A. that the prospect of a failure of the Registrar of Titles to make service of a notice by prepaid post (howsoever understood) has not been shown by Mr Dimos, whose counsel sought in argument to rely on such a prospect.

14. The other matter that I would mention concerns the award to Mr Willetts of interest pursuant to statute. While agreeing with Batt, J.A. that the award of interest should not have been made, I shall express my reasons in my own words since it is a question on which we are differing from the learned trial judge.

17. Section 58(1) of the Supreme Court Act 1986, which the judge treated as authorising the award of interest, derives from s. 2 of Act 6874, the Supreme Court (Interest on Judgments) Act 1962, which replaced s.78 of the Supreme Court Act 1958 with a new version of s.78. The pre-1962 version of s.78 had stood unaltered (in all respects now material) in each of the four consolidations of the Supreme Court Act from 1890 onwards. A comparable provision had been first enacted in Victoria as s.422 of the Supreme Court (Common Law Procedure) Statute 1865, deriving from s.28 of The Civil Procedure Act, 1833 (3 & 4 Will. 4, c. 42), sometimes known as Lord Tenterden's Act. This last had provided that -

"Upon all debts or sums certain, payable at a certain time or otherwise, the jury on the trial of any issue, or on any inquisition of damages, may, if they shall think fit, allow interest to the creditor at a rate not exceeding the current rate of interest from the time when such debts or sums certain were payable, if such debts or sums be payable by virtue of some written instrument at a certain time, or if payable otherwise, then from the time when demand of payment shall have been made in writing, so as such demand shall give notice to the debtor that interest will be claimed from the date of such demand until the term [sic] of payment; provided that interest shall be payable in all cases in which it is now payable by law."

21. The Victorian section of 1865, obviously modelled on the Imperial one, varied the language so that it began "Upon all debts or sums certain hereafter to be recovered in any action, the jury may if they think fit allow interest to the creditor at a rate not exceeding..." etc.; and it provided for specific maximum interest rates, including a rate in respect of bills of exchange and promissory notes, and substituted a different (but presently immaterial) proviso at the end. Save for these modifications, and the omission in the 1865 statute of the phrase "until the term of payment" and some inconsequential differences in style, the provisions of the 1833 and the 1865 sections were to all intents and purposes the same. Section 224 of the Supreme Court Act 1890 of Victoria, re-enacting the 1865 section, inserted immediately before the words "the jury" the words "the Court at the hearing or"; and thus the provision stood (save for some minor variations in style) in the succeeding consolidations until, as s.78 of the 1958 Act, it was repealed and replaced in 1962.

24. Interest claimed under s.224 of the Supreme Court Act 1890 (if not payable upon a contract express or implied) was held by Hood. J. in Coane & Grant v. The Thomas Bent Land Company [4] to be awardable only by way of damages : the section indicates, as his Honour said -

"... that it is a question for the jury [or presumably, in an appropriate case, the Court] to calculate, as damages, what interest they will allow to a creditor whose debt has not been paid...The words of the section referring to `at the hearing or on the trial' show clearly that what was contemplated was that where the plaintiff has a claim for a sum certain he may in addition thereto get interest, but he is only to get it by way of damages."

Rodway v. Lucas [5] and Sheba Gold Mining Co. v Trubshawe [6] are to the same effect.

29. There are, it is true, some important differences between s.58 of the Supreme Court Act 1986 Act on the one hand and the 1962 version of s.78 of the Supreme Court Act 1958 and its forbears on the other. It is necessary no longer to apply for interest at the hearing or trial : David Leahy (Aust.) Pty. Ltd. v. McPhersons Ltd.[7] Again, there is no reference in s.58, as there was in the pre-1962 version of s.78, to "the debtor"; and there is less discretion than there was under the pre-1962 section as to the making of an award of interest : interest is to be awarded in all cases to which the section applies "unless good cause is shown to the contrary". Even so, (leaving aside the specifically identified cases where interest is payable "in respect of any bill of exchange or promissory note" and where the debt or sum recovered was payable by virtue of some written instrument and at a date or time certain) an award of interest under s.58, being a matter of calculation at least by reference to the rate at which and the period for which it is to be awarded, remains in my opinion an award by way of damages, as it always was; and, in spite of the removal of a reference in the section to "the debtor", it is awardable against, and only as against, a debtor; and it is to be calculated and payable, as it always was, from the time when demand of payment was made.

32. It follows, I consider, from the language of s.58, understood in the light of its history and according to the reason of the thing, that interest is awardable under the section, as it always was under its predecessors, in favour of a party who recovers in a proceeding, against that party's debtor, a debt or sum certain. Leaving aside again the cases specifically identified, an award of interest runs "from the time when demand of payment was made"; and I think that naturally refers to a demand of payment made by a creditor in that capacity upon a debtor in that capacity. I am further of opinion that s.58(1) contemplates that a debt or sum certain is recovered from a debtor of the creditor who recovers it. That, I consider, was not this case.

35. It is a curious feature of the case that nowhere, so far as I can see from the material, has there been an actual claim made by either of Messrs Willetts or Dimos against the other - whether by court process or pleading or otherwise - for payment of the $20,000 that was the subject of the order made by Gobbo, J. on 7 August, 1991. Perhaps it was assumed that such a claim was notionally made and that, having regard to the nature of the order, the $20,000 held pursuant to it would necessarily go as part of the spoils of the litigation. That may be the way the trial judge saw it, for early in his reasons he referred to an assertion by Mr Willetts of priority of his registered interest "to support his claim to the $20,000 held in trust"; and his Honour said of Mr Dimos that he "claims payment of the amount of $20,000 held in trust by" Mr Willetts. His Honour ultimately expressed the conclusion that "the claim of Mr Willets against Mr Dimos for the sum of $20,000 should succeed".

38. To remark upon the absence of an actual claim on either side for payment of the sum that was the subject of the order made by Gobbo, J. is no mere pedantry : no such claim or demand for the sum could properly have been made by either Mr Willetts or Mr Dimos in the capacity of a creditor upon the other in the capacity of a debtor. It might have been thought to follow naturally, following the learned judge's findings, that Mr Willetts should receive the sum that was the subject of the order. His entitlement did not however, in my opinion, derive from his capacity of a creditor; and the sum of $20,000 was not a "debt or sum certain recovered" from a debtor.

41. The order made by Gobbo, J. provided that the sum of $20,000 retained from the proceeds of the sale by Mr Willetts as mortgagee be held by him "on trust pending further order of the Court". No doubt Mr Willetts was thereby required to act in some respects as a trustee and was in a sense constituted and appropriately described as a trustee. He was, however, in effect a stakeholder with an obligation to preserve the money pending further order of the Court. It is unclear whether Mr Dimos regarded the order as requiring Mr Willetts to act strictly as a trustee for, as Batt, J.A. points out,[8] the solicitor for the former told the trial judge that the $20,000 was paid into a bank account in their joint names. Whether Mr Willetts is correctly to be regarded in all respects as a trustee or as akin to a kind of stakeholder[9], I am not able to see how he can by any stretch be characterized as a creditor of Mr Dimos in respect of the $20,000 from the time it was set aside pursuant to the order made by Gobbo, J. If he could be so characterized it would appear to follow that, had Mr Dimos succeeded in the litigation, he would equally have been capable of characterization as a creditor of Mr Willetts and entitled thereby, as against him, to an award of interest under s.58. It cannot be that each of them was at once a creditor and debtor of the other. Nor is it any more logical to regard each as being a potential or incipient or contingent creditor of the other depending on the outcome of the litigation : consistently with what Batt, J.A. points out, there could be no period during which interest was awardable if no party became a creditor until judgment was pronounced.

44. For these reasons I agree that the award of interest should be set aside.

49. In this appeal I have had the benefit of reading the comprehensive judgment of Batt, J.A. in draft form relating to the matters of substance. For the reasons he has stated I would agree that each of the grounds of the appeal on those matters has not been made out, except as to interest. I also agree with his reasons, and those of Tadgell, J.A., for reversing the order as to interest. As to each of these matters I agree with the orders proposed by Batt, J.A. I now turn to the questions of costs also raised by the appellant.

53. The appellant's complaint as to costs has two aspects. The learned trial judge ordered that the appellant as first defendant to "pay the plaintiff's costs of the proceeding including reserved costs ..." That was interpreted by the learned Taxing Master, as confirmed by the judge sitting in the Practice Court, as requiring the first defendant to pay the whole of the plaintiff's costs, including those additional costs referable to his claim against the successful second defendant, who in turn had received the benefit of an order by the trial judge that her costs be paid by the plaintiff. The trial judge had, however, refused to make either of the orders known respectively as a Sanderson order or a Bullock order: see Sanderson v. Blyth Theatre Co.[10] and Bullock v. London General Omnibus Co.[11]

56. The first defendant (as I shall continue, for convenience' sake, to call the appellant) contends in the first place that the Taxing Master and Practice Court judge were wrong in treating the trial judge's order as intended to require him to pay all the plaintiff's costs, including those referable to his unsuccessful claim against the second defendant. If he be wrong in that contention, the first defendant seeks to challenge the trial judge's order for costs as an erroneous exercise of his discretion.

59. This Court was uncertain whether the trial judge had any such intention and so, in accordance with its powers pursuant to R.64.22(5) made written enquiry of the learned trial judge as to the object or intent of his order for costs, particularly in the light of the fact that there seemed from the transcript to have been no discussion of the question, notwithstanding detailed submissions as to the possible making of a Sanderson or Bullock order. Lest it be thought that such a request was an unusual exercise of this Court's powers on appeal, inasmuch as court orders should be left to speak for themselves, as it were, unless application be made under the "slip rule", the procedure here adopted seems to have been either authorised or approved by the Court of Appeal in Korner v. H. Korner & Co. Ltd. [12] It should, however, be noted that what was there approved was, more precisely, an enquiry by a taxing master or a judge on review to the trial judge for the purpose of resolving any ambiguities or uncertainties in the terms of a costs order. It may also be said that, although Singleton, L.J. (with whom Jenkins, L.J. concurred) merely expressed the opinion that "great trouble and expense would be saved if either party were able to go back to the judge" (emphasis added), for subsequently[13] they appeared to suggest that an alteration in the rules to bring about some such means of solving that kind of problem would be necessary. Thus, although they expressed the opinion that it was "in the public interest" that that should be the case, it may be concluded that they merely expressed disapproval of existing practice without providing any remedy other than the suggested amendment to the relevant rules. Fortunately in this Court there is express power under the rules to call for a report from the trial judge, although one should be cautious about treating that rule as permitting this Court in the ordinary case to go behind the language of a formal court order. Generally errors in expression should be corrected under the slip rule, but Korner suggests that in matters such as the interpretation of costs orders further enquiry may obviate necessity for applications to amend such orders.

62. The Court has now received a succinct and helpful response from the learned judge which states:

"(i) The matter was adverted to; and (ii) It was not intended by Order 3 that Dimos [the first defendant] should be ordered to pay Willetts' [the plaintiff's] costs of his unsuccessful claim against the Registrar [the second defendant]."

I have not been able to find that part of the transcript in which the question was adverted to as there was only a limited part of that transcript included in the Appeal Book. The judge's reasoning in this respect is not available but one may gather from his report that there was no express statement of his reasons.

67. So it is, perhaps, preferable that the Court proceeds to deal with the matter upon the basis that there either could not be or was no such report by the trial judge.

70. The simplicity and conventional form of the judge's order belies the difficulty here raised in applying it. The difficulty arises, of course, because there was more than one defendant and relief was obtained, as is not unusual, against only one such defendant, with the customary, though not necessarily invariable, consequence that the successful second defendant obtained her costs.

73. The present dispute arose when it was contended before the learned Taxing Master that, notwithstanding that the plaintiff had failed in that part of his action which he brought against the second defendant and therefore had suffered an order to pay that party's costs, he should nevertheless get the whole of his costs, including all necessary additional costs arising solely out of the claims he brought against that second defendant and that those costs should be borne by the first defendant.[14]

76. When the Taxing Master gave his reasons for dealing with the appellant's objections he dealt with his contentions by saying, "On the plain meaning of the words, my view is to the contrary." He said that the practice has been for the Court to adopt "words of limitation" such as "the costs ... as against the second defendant",[15] if the judge's intent was to avoid the operation of the rule of practice referred to in Kelly's Directories Ltd. v. Gavin & Lloyds[16]. When the matter was taken to the judge in the Practice Court upon application for review, his Honour dismissed that application likewise following what was said to be the principle in Kelly's Directories. His Honour set out an extensive passage from the judgment of Byrne, J. in that case[17], stating that he agreed with his Lordship's analysis of the practice as to costs orders. His Honour also said that the proceeding was one where the claim of the plaintiff against the defendant Registrar was of little consequence inasmuch as the real claim against the Registrar was that brought pursuant to R.11.15 by the first defendant. Unfortunately his Honour overlooked the further amended statement of claim which was served on the defendants by the plaintiff on 21 August 1997 shortly before the commencement of the trial. In paragraph 12 of that amended pleading it is clear that the first respondent was also seeking, although in the alternative, to show that the entry in the Victorian Land Register leading to postponement of his interest was due, inter alia, to the omission, mistake or misfeasance on the part of the Registrar or an officer in the Registry so that he was entitled to an indemnity pursuant to s.110 of the Transfer of Land Act 1958 for his losses, as was sought in paragraph C of the prayer for relief.

79. The outcome of this aspect of the appeal therefore, depends very largely upon whether the so called practice in Kelly's Directories forms part of the law and practice applied by the courts in this State. Naturally, I would place great weight upon the considered opinion of the learned Taxing Master, who must be one of the most experienced taxing officers in the common law world. It seems, however, that in his unreserved reasons he was at least in part influenced by the fact that there was a reference to that decision twice[18] in what used to be the standard textbook on costs in this State, namely Oliver on the Law of Costs (1960), the work also of an experienced taxing officer. What was said to be the outcome of Kelly's Directories was there summarised in these terms[19]:

"Where one defendant is ordered to pay the plaintiff's costs and the action is dismissed against the other defendant, the unsuccessful defendant must, in the absence of a special order, pay the whole of the plaintiff's costs, and is not entitled to any deduction on account of the joinder of the successful defendant ...".

83. But does Kelly's Directories truly stand for such a wide proposition and, if it does, does that represent the current and binding practice as to what costs will ordinarily be ordered where a plaintiff succeeds against one defendant and fails against another?

86. As to the first question, it is by no means clear what the decision was taken originally, or in later years, to stand for. Although there are many reported cases as to what are the appropriate orders for costs where there has been partial success against one or more of a number of defendants, especially in relation to applications for Sanderson and Bullock orders, but also in the course of disputes as to the allocation of costs, Kelly's Directories has been referred to only on a handful of occasions in England and Australia in reported judgments. Moreover, there are but a few brief references to the case in a number of the standard textbooks on practice and costs, many of which are delphically expressed.

89. Before examining those cases and textbooks it is desirable to state what conclusions I have reached. In my opinion the decision in Kelly's Directories has been taken, in certain works, including unfortunately Oliver on Costs, to stand for too wide a proposition. At most Byrne, J. determined no more than that, where a plaintiff is successful in a Chancery suit against one defendant and unsuccessful against another, who receives no order for payment of its costs, the plaintiff is ordinarily entitled to an order for the costs of the proceeding, which order, when correctly construed, will comprehend all the costs necessarily and properly incurred in bringing the proceedings against both defendants. Moreover, even if the practice so described should be seen as extending to cases where the successful defendant itself obtains an order for costs, then, having regard to the costs regime then applying in the various divisions of the High Court of Justice, the practice of making such an order, as well as its interpretation, should be seen as having been confined to proceedings in the Chancery Division. [20] In the King's Bench Division an order for costs in favour of the plaintiff against the one of defendants was seen merely as reflecting the common law practice that costs followed "the event" and thus was construed as entitling the plaintiff to recover all costs incurred in prosecuting its claim against the unsuccessful defendant only and as excluding costs incurred in suing the successful defendant. [21] Notwithstanding the history of the rules both in England and this State whereby all provisions relating to costs following in the event were eventually repealed, the common law and thus the Queen's Bench and King's Bench Division practice on this issue was accepted as prevailing over the Chancery practice, so that the "rule" reflected in Kelly's Directories should now be treated as obsolete. [22]

That is not to say, however, that a judge, whether in England or Victoria, may not exercise the court's discretion so as specifically to grant the plaintiff all its costs against the unsuccessful defendant, including those costs incurred which solely relate to suing the successful defendant. That would merely be a variant, a less comprehensive variant, of a Sanderson or Bullock order.

94. I may add, for what it is worth, that none of those who have heard this appeal, and none of a number of senior members of both the Court of Appeal and the Trial Division of this Court who have been consulted, has heard of an order of this kind being construed as including the costs incurred against a successful defendant. I would venture to suggest that very many orders have been made in this State upon the understanding that no such rule as that seen to be derived from Kelly's Directories is applicable. To accept the meaning given to the trial judge's order by the Taxing Master and by the judge in the Practice Court would countenance an inconsistency, albeit not a direct inconsistency, inasmuch as the plaintiff would receive, without specific order, from the first defendant the costs of issues relating to the claim against the second defendant on which not only had he failed on the merits but also in respect of which the second defendant herself has obtained an order for costs. Of course, they have each incurred their own costs (so that they are not identical) but the plaintiff should not recover costs from a party to whom they do not relate and in respect of a claim in which he has failed, unless the judge specifically orders that they be so recovered.

97. It is necessary to state in broad terms why this should be so, as it would appear to deny an understanding which the Taxing Master appears to have about orders of this kind and I would differ from his views with the greatest reluctance.

100. Nevertheless, Kelly's Directories was a case which was determined in circumstances different from the present. The differences lie not so much in the nature of the action as in the manner of its disposition. One may accept, for present purposes, that an action such as the present, arising out of claims between competing mortgagees and chargees, would be a suit in equity, or at least partly so, and thus of a kind brought in the Chancery Division and therefore subject to the broad discretionary rules as to costs imported, at various times to a greater or lesser extent, from the High Court of Chancery at the time the Judicature Acts were passed in England and Victoria. Kelly's Directories involved a copyright claim against the first defendant Gavin, the infringing party, and the second defendant, the Committee of Lloyds, alleged to be partners in or party to the printing of the infringing article. The plaintiff had obtained injunctive relief from Byrne, J. against Gavin, together with costs, but no relief had been given against Lloyds.[23] Nevertheless, in the circumstances no order for costs had been made in favour of the successful defendant Lloyds, nor had any order for costs been made in favour of the plaintiff against Lloyds. At the drawing up of the order, at which the first defendant was then represented, the order for costs was settled as requiring that defendant to pay the plaintiff "their costs of this action up to and including this judgment".[24]

103. Byrne, J., in later considering these events and the Taxing Master's conclusion that the meaning of his earlier order was clear, agreed that that was so, so that the first defendant had to bear all the plaintiff's costs including those relating to its claim against the second defendant. The judge said[25] that, now that the order had been passed and entered, he was bound by it "as it now stands". He referred to the Chancery practice of moulding costs orders to meet the circumstances of the case[26], and drew attention to the forms of orders which could have been made limiting the effect of an order of the kind he had been asked to make[27]. As no qualification appeared in the order given at the trial, he would not go behind the unqualified terms of the order requiring, as he felt, payment of all the plaintiff's costs by the first defendant and he would not reframe the order, which could have been formulated differently at trial or, possibly, at the time the order was drawn up.[28]

106. For reasons which have already been suggested, Kelly's Directories has, to my knowledge, only been cited on three subsequent occasions in reported English authority. In the first of those cases, Badische Anilin und Soda Fabrik v. Hickson[29], also heard in the Chancery Division, Warrington, J. followed Kelly's Directories in not entirely dissimilar circumstances in relation to a costs order in a patent action. There again there were two defendants but the action against the defendant company was settled before trial and an order made staying proceedings as against that defendant. The plaintiff had succeeded at trial[30] against the individual defendant (on two patents out of three), at the end of which there was an order that the plaintiff's costs of the action up to and including judgment (other than those relating to the third patent) should be taxed and paid by the individual defendant. The Taxing Master followed Kelly's Directories saying that he had not been directed to make any deduction on account of the joinder of the defendant company. They should not be treated as "costs thrown away" so as to make them then irrecoverable. On review his Lordship said[31] that the case was essentially the same as Kelly's Directories, the only difference being that the action against the defendant company had been terminated at an earlier stage. He said that it was the practice in the Chancery Division for judges to make orders at the trial dealing with the costs by making special directions in respect to "any particular costs [that] ought or ought not to be borne ..."[32]. He distinguished a case, also distinguished by the Taxing Master, which is mentioned only in the Annual Practice at that time[33], Dunn v. Northey, by saying that there the judge had held that the costs had been "thrown away" so that they could not therefore be allowed to the plaintiff. Again, Badische Anilin v. Hickson seems to have dealt with the very special case where there was no order either way in respect to the costs relating to the claim against a successful defendant other than that made against the unsuccessful defendant at trial.

109. Kelly's Directories was next referred to in Hobson v. Sir W.C. Leng & Co.[34] There was only a brief reference[35] to it in the judgment of Buckley, L.J., with whom Kennedy and Phillimore, L.JJ. concurred, but it was not insignificantly distinguished. The Court of Appeal was considering an action for libel against two defendants, one defendant having admitted liability, pleading an apology, while the other pleaded justification. At trial a verdict was found against both defendants for £750 and judgment entered for that sum "and costs to be taxed". It was held that, notwithstanding the generality of that order, the defendant who pleaded justification was alone liable for the costs occasioned to the plaintiff in consequence of that plea and the other defendant was not liable for those costs. Buckley, L.J. referred[36] to an argument as to which of the two judges who decided Stumm v. Dixon should be preferred. It had been argued that the opinion of Fry, L.J., who endorsed in general terms the Chancery practice as to costs of issues, should be followed, as to which Buckley, L.J. said[37]: "If this question had arisen upon a judgment of the Chancery Division I should assent". He then referred to Kelly's Directories, stating that Byrne, J. had proceeded upon the view that in the Chancery Division a general order as to the plaintiff's costs "cannot be read as excepting some costs which it is contended that the plaintiff ought not to have"[38]. His Lordship therefore held[39] that the judgment of the Divisional Court in Stumm v. Dixon should be applied so that "the costs occasioned by the separate pleading of the one defendant ought to be allowed as against him alone". In essence, therefore, the Court allowed apportionment of the costs notwithstanding the terms of the order. As to the latter practice there was much discussion in the authorities at about that time and later as to the precise powers of the taxing masters relating to costs of "the event" and the costs of issues, which need not here be examined for, as far as one can see, they did not deal with costs against successful and unsuccessful defendants: see generally the speeches in Reid Hewitt & Co. v. Joseph[40]

114. To my knowledge there is but one later reported case in which Kelly's Directories was mentioned in the English courts, namely Korner v. H. Korner & Co. Ltd.[41]. The former case was relied upon solely for the purpose of establishing that the court's order as to costs must be given effect to upon its true construction and that the master had no jurisdiction to separate the costs of issues in the circumstances. It was a case, however, about the proper apportionment of the defendants' costs where all defendants, both successful and unsuccessful, were represented by the same firm of solicitors and the same counsel. In the judgments the only reference to Kelly's Directories was, as has been set out above[42]

, to show that there could be no further reference to the judge who made the order and regretting that that was the practice. The case therefore says nothing as to the present problem and is in fact the last reported English case in which Kelly's Directories was cited, the practice changing, as already stated, shortly before the publication of the 1985 Supreme Court Practice[43]

121. In Australia there had only been brief reference to Kelly's Directories, by way of obiter dictum in the Queensland Court of Appeal[44], before the judge in the Practice Court relied upon it in the present case, at least so far as I have been able to discover. The only other reference to the case which I have been able to find is in the reasons for decision of Assessment Officer Osler of the Ontario Supreme Court, where he followed the case without considering the matters here discussed, no argument as to its current relevance having been advanced: see (1988) A.C.W.S.J. Lexis 22356; 13 A.C.W.S. 3d 110.

124. Perhaps of equal significance in this area of practice are the references made to Kelly's Directories in well-known works on practice and costs. It was first noted in the 1902 edition of the Annual Practice under "Apportionment of Costs" in these terms[45]:

"Co-defendant - judgment against one - Where judgment was given against a defendant in default, and such defendant was ordered to pay the plaintiffs their costs up to and including judgment, and the action was dismissed without costs against the other defendants, it was held that the defendant must pay all the costs of the plaintiffs, and was not entitled to any reduction on account of the joinder of defendants against whom the action failed."

128. This statement, with one significant qualification, was repeated in the Annual Practice for the next 65 years: see for example the 1927[46] and the 1963[47] editions. The one important addition to the statement which appeared first in the 1919 edition was by the addition of four words at the beginning of the statement, as follows[48]: "Where judgment was given in a Chancery action ..."[49] (emphasis added). The passage appeared in the same form in the successor work, the Supreme Court Practice, edited by Sir Jack Jacob, in its first edition in 1967 and thereafter until the change in Chancery Practice already referred to, first described in the 1985 edition[50]

133. The other standard practice book published until its merger with the Annual Practice in 1941 was the Yearly Practice of the Supreme Court. Looking for example at the 1926 edition and final 1940 edition, one finds but two brief references to Kelly's Directories. The first [51] is merely a "cf" reference, but the second[52] broadly states:

"Where one of two defendants was ordered to pay to the plaintiffs their costs of the action the meaning of the order was held to be that the costs included the plaintiff's costs of the action against the other defendant against whom no relief had been given and who had not been awarded any costs ...". [53]

137. The standard work on Chancery Division Practice, Daniell's Chancery Practice, referred briefly and in limited terms to Kelly's Directories in its last (the 8th) edition published in 1914, as follows:

"Where judgment is given against one defendant with costs, and for another without costs, the order will fix the unsuccessful defendant with the whole of the costs of the action, unless special directions are given."[54]

The other authoritative work on Chancery Practice still published at that time, Seton's Forms of Judgments and Orders, in its 7th edition[55] made merely brief comments on costs, referring to Kelly's Directories only for the proposition that the Taxing Master could not alter the effect of a court order[56].

142. There was no significant work on King's Bench Practice published after Kelly's Directories was decided. The only current works on costs at the time or shortly after Kelly's Directories was decided were works on the taxation of bills of costs in none of which, to my knowledge, was Kelly's Directories referred to, although that is not entirely surprising given the limited purpose of such works.[57] There was, however, one general work published later, in 1951, in two volumes, called Butterworths Costs, edited by Treagus and Rainbird. The learned authors examined in some detail various circumstances in which costs as to particular issues and parties are apportioned[58]. They observed that in the Chancery Division, as in the old Court of Chancery, it has always been the practice for the court to retain complete discretion over costs and thus to make special orders where it is not desired to include the costs of issues in a general order for costs.[59] There is a brief note as to the outcome of Kelly's Directories, largely in terms of that appearing in the Annual Practice, saying that, where there is such an order to pay the costs of an action, when the action was dismissed against another defendant, the plaintiff is entitled to recover all costs of joining the defendants against whom the action failed[60]. Significantly, however, that note is followed immediately by this comment on King's Bench Division practice:[61]

"This is not the practice in the King's Bench Division, however, in cases where a plaintiff sues two or more defendants and recovers costs against one defendant only, such plaintiff will not be allowed the extra costs incurred by joining the other defendant or defendants unless the judgment or order specifically provides for such costs."

146. In my opinion it is highly likely that this authoritative statement of practice led ultimately to the decision that the practice in all Divisions should be the same and that Kelly's Directories should no longer be followed. The change in Chancery practice ultimately occurred almost by a side-wind, certainly not by change of rule or decision of a judge. In the course of a detailed "Report of the Review Body on the Chancery Division of the High Court"[62], a committee, appointed by the Lord Chancellor and consisting of Oliver, L.J. (as he then was) and J.M. Woolf, Esq., CB, turned to a number of "miscellaneous minor matters" which had been raised in the course of considering the "harmonisation" of the procedures in the Chancery and Queen's Bench Divisions. One of these was dealt with in this way:[63]

"(iii) Costs. There is a curious difference of practice in relation to costs. Where a plaintiff sues two defendants and succeeds against one only with costs, the Queen's Bench practice is that in the absence of a special direction, the costs payable by the unsuccessful defendant are restricted to those incurred in proceedings against him. The Chancery practice, following the decision in Kelly's Directories v. Gavin [1901] 2 Ch. 763, is that the unsuccessful defendant is obliged to pay also the plaintiff's costs of proceedings against the defendant against whom he has not succeeded. There seems no good reason for this variation in practice and the Queen's Bench practice seems both fairer and more logical."

Recommendation No. 28[64] then simply stated "that the Queen's Bench practice should be adopted". So a change in Chancery practice was ultimately announced in the 1985 Supreme Court Practice in these terms:[65]

"In the Queen's Bench Division where a plaintiff sues more than one defendant and succeeds against one only, the plaintiff will not be allowed the extra costs incurred by joining the other defendant or defendants unless the judgment or order specifically so provides and in the Chancery Division the practice in such circumstances was held to be that the defendant must pay all the costs of the plaintiff[s], and was not entitled to any deduction on account of the joinder of defendants against whom the action failed (Kelly's Directories ...). As a result of Recommendation No. 28 and para.106(iii) of the Report of the Review Body on the Chancery Division of the High Court this practice should no longer be followed and the practice applied in the Queen's Bench Division should be adopted in all cases ..."[66]

152. Unfortunately most earlier Australian works on costs were also confined to the taxation of bills of costs and made no reference to Kelly's Directories. The one exception was Phillips & Trebilco on Bills of Costs, which in the 2nd edition[67] had this bald and unqualified statement[68]: "Where one of two defendants is ordered to pay the plaintiffs their costs of action, such costs are all the plaintiff's costs of action, including the costs incurred by joining the other defendant." For this both Kelly's Directories and Badische Anilin v. Hickson were cited as authority, without reference to the particular circumstances there considered. This appears to be the source of the statements in the next Victorian work on costs, namely Oliver on Costs, the principal proposition of which is set out above[69]

. There were two loose-leaf services which were temporarily successors to Oliver including Ahern on Costs, but so far as I am able to ascertain none contained reference to Kelly's Directories. The most recent work on costs, which is not now confined to Victorian practice but which purports to be a successor to Oliver[70], Quick on Costs is another loose-leaf service first published in 1996. The work also contains considerable discussion of general principle as to apportionment of costs, but on the present issue the author expresses this view[71]:

"A plaintiff who sues more than one defendant and succeeds against only one of them will not be allowed the extra costs incurred by joining the other defendant or defendants unless a special judgment or order specifically allows them: see below, [4.3670][72]. The modern practice reflects 19th century practice in the Queen's Bench Division. The discredited practice in the Chancery Division, reflected in a decision such as Kelly's Directories, was that the defendant found liable had to pay all the plaintiff's costs and was not entitled to a deduction for the joinder of the defendant or defendants against whom the plaintiff's action had failed except where the plaintiff had discontinued against such defendant or defendants before succeeding against the defendant found liable."[73] (Emphasis added.)

158. I have already noted that there is no discussion of Kelly's Directories in Williams' Civil Procedure - Victoria[74]

, nor have I been able to find any reference to that case in any of the current "editions" of the various works on Supreme Court practice published in the other States and Territories or in any work on Federal Court practice.

163. This description of the relevant authorities would appear to show that the rule in Kelly's Directories has either no continuing application or, at best, a very limited application. That would seem, with respect to the learned master and Practice Court judge, the only correct view. It would be wrong to adapt a decision in the Chancery Division based on very particular circumstances to all litigation with more than one defendant. It was, in the first place, a decision where the successful defendant on the merits, in the sense that no order was obtained against it, did not obtain an order for its own costs. More importantly it was decided at the time when Chancery orders as to costs were spelled out in detail as a matter of practice seemingly derived from the Chancery rule that all costs were in the discretion of the Court. Although that became and remains the general rule both in England and Victoria[75], the common law practice of ordinarily ordering costs to follow the event underlies the exercise of the discretion in most cases. All orders of this Court should be read accordingly. Of course, in any proceeding the "event" may not be confined to a single event, for the rules now permit joinder of defendants and of causes of action and the making of claims between parties other than the plaintiff. Thus the outcome of a counterclaim is a separate "event".[76] Where causes of action are joined, as in the present case, they likewise produce separate events in respect of which a trial judge is entitled to exercise his discretion.[77]

166. Where, as in the present case, the Court dismisses a claim against a second or other defendant with costs, that should be construed as dealing with the costs of that claim, if no contrary order is made. Likewise, again as in the present case, an order for costs against an unsuccessful defendant should be construed upon the basis that the Court was dealing with the claim or claims made against that defendant, so that, in the absence of any contrary order, it should be construed as dealing with only the costs necessarily and properly incurred by the plaintiff in prosecuting that claim or those claims. The words "of the action" used here, as in so many court orders, should be read as having implicitly added to them the words "as against the first defendant", but that is strictly unnecessary because the proceeding or event prima facie under consideration was that against the first defendant, who was thereby ordered to pay those costs.

169. That is not to say, however, that in different proceedings, where there is strictly but one claim or cause of action brought against a number of defendants, other considerations might not apply. In many conventional suits in equity there was a plurality of defendants although there might not have been strictly a number of causes of action or "events" arising from their acts. I would suggest that the learned judges in Kelly's Directories and in Badische Anilin v. Hickson were viewing the plaintiff's claims in those actions as a totality and making orders in accordance with current practice relating to those claims. Doubtless that is why Daniell's Chancery Practice, and later the Annual Practice, accepted Kelly's Directories as authority for the limited propositions set out above. Whether or not that rule was applied across the board in the Chancery Division is now of no consequence, for, in my opinion, the "rule" in Kelly's Directories should now be seen as obsolete, whatever its original justification. It would therefore now be preferable in cases, where no order for costs in favour of a successful defendant is made, to spell out precisely the ambit of any costs orders made whenever other defendants are separately represented (or are unrepresented). Finally, it must always be remembered that a successful plaintiff is entitled, if granted costs, to all costs necessary and proper to the prosecution of its claim, so that any costs incurred in joining additional parties for conformity's sake (for example) may be comprehended by the order, although it is not necessary to express any concluded opinion on that subject. Certainly here the Taxing Master may properly have considered whether the joinder of the Registrar of Titles was justified so as to ensure that the Register should be properly maintained, as seems to have been the position when the proceeding commenced in 1991, but that is quite different from the circumstances arising when the statement of claim was amended so as to add the separate claim pursuant to s.110 of the Transfer of Land Act.

172. In these circumstances I have concluded that the order of the learned trial judge was correct and expressed in terms which granted the plaintiff his proper costs against the first defendant in respect of his claim or claims made against that defendant but not in respect of his alleged but unsuccessful cause of action against the second defendant Registrar. The costs "of the proceeding" should be so confined. It follows that I consider that the learned Taxing Master and judge in the Practice Court were each in error in construing the trial judge's order for costs in accordance with the so-called rule in Kelly's Directories and in holding that the order for costs in favour of the plaintiff comprehended all costs necessary and proper for prosecuting his claim against the second defendant. Therefore the appeal against the judgment of the judge in the Practice Court should be allowed, his order dismissing the review should be set aside and an order be substituted that the items raised on review (set out in the notice to review dated 7 July 1999) be remitted for reconsideration and taxing by the Taxing Master in accordance with the decision and reasons of this Court.

175. To summarise, the application for leave to appeal against the costs order of the learned trial judge ought to be refused, but leave to appeal from the order of the learned judge in the Practice Court made 12 August 1999 should be granted and the appeal allowed in the terms set out above.

181. The Court has before it two appeals by Leo Dimos, the first defendant below, against a judgment given and orders made by two judges of the Trial Division in the one proceeding. The first appeal is against the judgment and orders of the trial judge given and made on 22 December 1997, 9 February 1998 and 27 February 1998. On the first date he granted the first respondent, Jeffrey Willetts, the plaintiff below, relief against the appellant by adjudging that moneys held in trust pursuant to an order of Gobbo, J. made 7 August 1991 be paid to the first respondent, and reserved questions of costs and interest. On the second date he dismissed the appellant's and the first respondent's claims against the second respondent, the Registrar of Titles, the second defendant below, and made orders for costs. On the third date he ordered the appellant to pay the first respondent interest of $6,003.32 pursuant to s.58 of the Supreme Court Act 1986. The second appeal, which does not concern the Registrar, is against the order of the Practice Court judge made on 12 August 1999 dismissing with costs the application of Mr. Dimos for review pursuant to Rule 63.57 of the order that the Taxing Master made on 24 June 1999. By the latter order the Taxing Master had refused the application of Mr. Dimos for review by him under Rule 63.56.1 of his interim order made 26 March 1999 taxing and allowing Mr. Willetts' costs against Mr. Dimos in the sum of $24,944.66, and had confirmed that taxation. In the taxation he had held that the trial judge's order made on 9 February 1998 that Mr. Dimos pay "the plaintiff's costs of the proceeding including reserved costs" included Mr. Willetts' costs of his unsuccessful claim against the second respondent. Besides the two appeals, the Court initially had before it an application: the trial judge having on 27 February 1998 refused leave to appeal against his above-mentioned order as to costs made on 9 February 1998, the Court of Appeal (Callaway and Kenny, JJ.A.) on 31 March 1998, had retrospectively extended the time for the making by Mr. Dimos of an application for leave to appeal against the order as to costs and had ordered that the application be heard by the Court that heard the first-mentioned appeal. The trial judge on 24 July 1998 varied his order for costs so as to make it clear that those costs were costs allowable in the Supreme Court and that Rules 63.24 and 63.25 did not apply to their taxation. This Court on 8 February 2000, during the hearing of the first-mentioned appeal, refused leave to appeal. Naturally, that refusal related to the grounds then propounded (grounds 21 to 27 in the notice of appeal), being in summary that his Honour's discretion miscarried in ordering, at first implicitly and later explicitly, that Rules 63.24 and 63.25 did not apply. I joined in refusing leave essentially because I was not satisfied of the sufficiency of the prospects of successfully challenging the exercise in this case of the wide discretion as to costs accorded to a primary judge, who necessarily has a better conspectus of the whole proceeding at first instance than this Court can have: cf. Etna v. Arif[78]. Later on 8 February 2000, during argument of the appeal from the order of the Practice Court judge, the Court entertained an oral application by senior counsel for Mr. Dimos for leave to appeal from the trial judge's order as to costs and to "revive" the general ground as to costs (ground 21) if and so far as, contrary to his submission, that order on its true construction extended to comprehend Mr. Willetts' costs of his claim against the Registrar. The Court reserved its decision on that application.

185. This proceeding concerns a dispute as to priorities between a solicitor as mortgagee for a contributory loan and a solicitor as chargee or mortgagee for his costs. It was begun as long ago as 1991. At least since 7 August 1991 it has nominally involved only $20,000. But during its lengthy history, for a substantial part of which it went to sleep, it has generated no doubt considerable amounts of costs.

188. The background facts giving rise to the first appeal are set out with clarity and in detail in the principal judgment of the trial judge, and the summary of them which follows is taken largely from that judgment. Mr. Willetts, a solicitor, in May 1989, entered into, and caused to be registered, a mortgage as trustee for clients ("the Willetts mortgage") securing a loan of $110,000 to George Konstantellos and Georgia Konstantellos ("Mr. and Mrs. Konstantellos"). They and other members of the Konstantellos family had previously borrowed moneys from Mr. Dimos, who also is a solicitor. An unregistered first mortgage, purporting to secure $30,000, was granted to Mr. Dimos by Mr. and Mrs. Konstantellos by their execution of it on 12 April 1984 and 25 October 1984. A charge not in registrable form, purporting to secure $15,000, was also granted by Mr. Konstantellos to Mr. Dimos on 13 March 1987.

191. The security for each of the sums of $30,000 and $15,000 was or included the land known as 179 Murray Road Preston, being the land described in Certificates of Title Volume 3462 Folio 382 ("title one") and Volume 4050 Folio 835 ("title two"), of an estate in fee simple in which Mr. and Mrs. Konstantellos were registered as joint proprietors[79]. The property at 179 Murray Road, Preston comprised two adjoining blocks of land - hence the two titles. On the property was a house with a driveway and garage. Most of the house structure was situated on the land in title one, but part of it was situated on the land in the other title.

194. Mr. Dimos lodged two caveats in 1987 to protect his securities. The first in time, numbered M795539Q, which I shall sometimes call "the first caveat", was lodged with the Registrar on 15 April 1987. It claimed an interest as chargee under the charge dated 13 March 1987. The other, numbered M876074R, which I shall sometimes call "the other caveat" or "the second caveat", was lodged on 5 June 1987. It claimed an interest as mortgagee. In each caveat Leo Dimos of 226 Swanston Street, Melbourne was named as caveator and the address for service of notice was stated to be Leo Dimos & Associates of 226 Swanston Street, Melbourne. Both caveats were expressed to be lodged against title two and, incorrectly, against Certificate of Title Volume 2462 Folio 382. The errors in the caveats were corrected by deleting the reference to the wrong Certificate of Title in the first caveat on 9 October 1987 and by withdrawing the second caveat as to the wrong Certificate of Title on 9 June 1988. No reference was made in the caveats to title one.

197. The Willetts mortgage as originally executed by Mr. and Mrs. Konstantellos referred only to title one as security. Mr. Willetts had that title searched before settlement but did not search title two and so was unaware of Mr. Dimos' claimed interest in it. The Willetts mortgage was lodged for registration on 8 May 1989 and was registered on the basis that, following notice to Mr. Dimos of the lodging of the mortgage to which Mr. Dimos had not objected, the caveats had lapsed to the extent necessary to permit registration of the mortgage. The description of the land in the mortgage as lodged with the Land Titles Office differed from the description in the mortgage as executed by Mr. and Mrs. Konstantellos in that it referred also to title two.

200. Mr. and Mrs. Konstantellos fell into arrears under the Willetts mortgage and ultimately on 13 April 1991 Mr. Willetts, exercising his power of sale as mortgagee, entered into a contract of sale with three persons as purchasers for the sum of $117,900. Later, problems emerged when it was discovered that there were two caveats in place on title two. Mr. Willetts attempted to secure the withdrawal of the caveats in order to make title to his purchasers, but was not successful. Subsequently, on 2 July 1991, he brought a proceeding against Mr. Dimos by way of originating motion for their removal. The proceeding was partially settled on 7 August 1991 on terms that the caveats would be immediately removed but should be treated, for the purpose of the proceeding, as continuing in existence, and that Mr. Willetts[80] would hold on trust, pending further order of the court, the sum of $20,000 to be retained from the proceeds of sale of the property. On 7 August 1991, Gobbo, J. made an order giving effect to the settlement[81] and in addition also ordered, amongst other things, that the originating motion stand as a writ and that either party have leave to join the Registrar of Titles as a defendant. Mr. Willetts joined the Registrar as second defendant to the principal proceeding[82] pursuant to leave granted on 1 November 1991. On 20 December 1991 Mr. Dimos, by notice under R.11.15, made a claim against the Registrar of Titles for indemnity under the Act in the event that his securities lost their priority, on the ground that the Registrar had failed to give to him as caveator notice as required by s.90(1) of the Transfer of Land Act 1958 ("the Act"). The claims of each solicitor against the Registrar for indemnity under s.110 of the Act in the event that the claimant did not have priority were heard concurrently with Mr. Willetts' claim against Mr. Dimos and the latter's counterclaim against the former.

204. At trial Mr. Willetts asserted priority of his registered interest to support his claim to the $20,000 which was in trust. He did not press certain of his claims, such as his claim for compensation against Mr. Dimos pursuant to s.118 of the Transfer of Land Act 1958 ("the Act") and his claim for Hungerfords[83] damages. He maintained his claim for indemnity against the Registrar in the event that Mr. Dimos was held to have priority over him and thus to be entitled to the $20,000 held in trust, if not more. In that regard Mr. Willetts contended in essence that there was a failure by the Registrar to notify Mr. Dimos of the lodging of Mr. Willetts' dealing and that this resulted in Mr. Dimos' retaining priority. Alternatively, it was put that no such notification was sent within the requisite time. Mr. Willetts argued that there was no default on his part.

207. In support of his claim to the $20,000, Mr. Willetts relied, by reference to ss.40, 41, 42(1) and 43 of the Act, on the principle of indefeasibility of title and argued that the mortgage, having been registered, received priority over the prior unregistered mortgage and charge on which Mr. Dimos relied. He argued that the caveats lapsed in respect of his registered interest. He also argued that the exercise of the power of sale extinguished the equitable interests of Mr. Dimos.

210. Mr. Dimos argued that Mr. Willetts could not rely upon what would otherwise flow from registration for two principal reasons. First, the Registrar of Titles, Mr. Dimos alleged, failed to give notice to him as specified in s.90(1) of the Act. As a result, the statutory procedure was not invoked and his failure to take steps to delay the registration of the dealing did not cause the caveats to lapse. He further argued that in those circumstances the Registrar was not authorised to register the mortgage. In the alternative, he argued that any notice given was given in respect of only one of the two caveats and that, in respect of the other caveat, the same propositions would follow, that is, the caveat did not lapse and the dealing should not have been registered. Those arguments affected only the question of priority of the dealings as they related to title two, since there was no caveat lodged by Mr. Dimos in respect of title one. Secondly, Mr. Dimos contended that there was a material alteration made after the execution of the Willetts mortgage which rendered it void. This was the addition of the reference to title two, which he contended was made without the authority of the mortgagors, the other parties to the instrument. He argued that in making the addition (and presenting the mortgage for registration) Mr. Willetts committed fraud within the meaning of the Act and that accordingly the registered mortgage could be challenged and removed from the Register and the priority in time of his (Mr. Dimos') dealings preserved. Alternatively, he argued that, if the conduct did not constitute fraud, none the less it rendered the mortgage void and that he had rights in personam that he could exercise against Mr. Willetts to protect the priority of his unregistered dealings.

213. Mr. Dimos made his own claim against Mr. Willetts by way of counterclaim[84]. On the basis of his alleged prior securities, he claimed payment of the sum of $20,000 held in trust and a further amount of $70,947.60 on the ground that the unregistered mortgage and charge, which had priority, secured debts now totalling $90,947.60.

216. For reasons which will become apparent, I do not find it necessary to elaborate further the claims of either Mr. Willetts or Mr. Dimos against the Registrar or to set out the grounds on which the present Registrar resisted those claims.

220. Section 90 in essence provided that, with certain exceptions, a caveat lapsed after 30 days' notice given to the caveator unless within that period or any further time permitted the caveator appeared before the Court and undertook to indemnify all persons damnified by the delay and the Court directed the Registrar to delay registration. It also provided for the removal by the Court of a caveat. So far as material, s.90(1) read:

"90.(1) Subject to this Act every such caveat ... shall lapse as to any land affected by any transfer or other dealing other than [certain presently immaterial transfers and dealings] upon the expiration of thirty days after notice given by the Registrar to the caveator that a transfer or dealing has been lodged for registration, but in the case of a transfer or other dealing which does not dispose of the whole of the estate or interest of the registered proprietor in the land affected thereby the caveat shall lapse only to the extent necessary to permit the registration of the transfer or dealing."

Section 91 prohibited registration of a transfer or dealing affecting land while a caveat was in force. So far as material, s.91(1) provided:

"91.(1) So long as any such caveat remains in force the Registrar shall not except to register or give effect to - (a) ... (b) ...; or (c) a transfer or dealing in respect of which the caveat has lapsed -

record in the Register any change in the proprietorship of or any dealing purporting to affect the estate or interest in respect of which the caveat is lodged."

227. Section 113 made provision with respect to the service of notices. So far as material it provided:

"113.(1) Any notice under this Act may be served or given by being sent by letter posted to the person concerned at his address for service ... (2) Any address of a person as recorded in the Register may be used as his address for service. (3) The address appointed in a caveat as the place at which notices relating to the caveat may be served shall be the address for service of the caveator. (4) The Registrar may cause a copy of any notice sent by him to be filed with a memorandum that it has been so sent and the memorandum shall be sufficient proof that the notice was duly sent. (5) ... (6) ... (7) When a notice is sent by letter posted to any person at his address for service and the notice is returned by the post office the Registrar may if in the circumstances and having regard to the provisions of this Act he thinks fit - (a) direct any further notice to be given; or (b) direct substituted service; or (c) proceed without notice."

231. By s.42(1) the registered proprietor of land[85] was, "except in the case of fraud", to hold such land subject to such encumbrances as were notified but absolutely free from all other encumbrances with certain immaterial exceptions. By s.42(2) the land included in any folio of the Register was subject to certain rights of others, but no such right is presently relevant. Finally, by s.43, "except in the case of fraud" no person contracting or dealing with or taking or proposing to take a transfer from the registered proprietor of any land was to be affected by notice actual or constructive of any unregistered interest, and the knowledge of the existence of any such unregistered interest was not of itself to be imputed as fraud.

235. His Honour, correctly with respect, isolated from the numerous issues of law and fact raised before him the following as the major issues, namely:-

(a) whether any and, if so, what notice of the lodging of the Willetts mortgage was given by the Registrar to Mr. Dimos;

(b) whether the admitted alteration of the mortgage by Mr. Willetts was authorised and, if not, whether it constituted fraud within the meaning of the Act.

As regards the first major issue, having regard to the evidence of the practice of the Land Titles Office and the provisions of the Act, his Honour was satisfied that the Registrar had given proper notice to Mr. Dimos of the lodging of the Willetts mortgage. He further held that the then Registrar had discharged his obligations under the Act in relation to both caveats.

241. In reaching those conclusions his Honour proceeded as follows. Mr. Willetts and the Registrar were unable to point to direct evidence that the notice to caveator referred to in s.90(1) of the Act was given in this case. They relied instead upon evidence of the practice of the Land Titles Office at the time and pointed to evidence of entries made on the relevant documents in accordance with that practice. His Honour accepted the evidence of Mr. Stafford, an Assistant Registrar of Titles. Mr. Stafford stated that, when a dealing was presented for registration, it passed from the lodging area to an examiner, by whom the dealing was checked against the title. If the examiner found that there was a caveat affecting the title which forbade the registration of the dealing that had been lodged the examiner would give an instruction to another section of the Office to prepare a notice to be sent to the caveator. The dealing, title and caveat would pass to an officer with the instruction from the examiner recorded on a piece of A-4 size paper called an advice paper. It was a working document used by the staff to give instructions to one another. It would be endorsed with an indication that there was a caveat which was affected and which required a notice to be sent. The receiving officer would prepare a notice in standard form. The practice was that an original and copy notice were completed using carbon paper between the original and the copy. The officer with the responsibility to send the notice would then place the original in an envelope addressed to the caveator, attach the copy notice to the caveat and put the envelope with the enclosed notice in a tray for collection by another branch of the Office which was responsible for posting. The staff responsible for sending the notices were also responsible for awaiting responses to them. They had a stamp which they would place on the caveat in the event that the time expired without action having been taken by the caveator. It read as follows:

They would then insert appropriate details after the word "CAVEAT".

248. Mr. Stafford identified the stamp appearing on the second page of caveat M795539Q in the above terms. The details written on the caveat immediately after the last word of the stamp were -

"Will lapse to permit Reg'n of Mtge P.175623W. Caveat Remains PE".

Immediately below the last line was stamped the date "13 NOV 1989". Immediately above the first-mentioned stamp was written (in red biro) "P175623W Mtge by J. Willetts". Mr. Stafford said that the notations on the caveat indicated that the Registrar had sent a notice to caveator in relation to the Willetts mortgage, that no response to the notice had been received and that the Registrar assessed that the caveat had lapsed and put on an appropriate recording of that fact. He identified the officer with the initials PE as Peter Erlich and said that all the writing and the stamps would have been placed on the document at the same time, on 13 November 1989. He gave evidence that the practice was to allow a further five days to expire after the expiration of the 30 days before recording the lapsing of a caveat in the event of no action from the caveator.

253. Also attached to caveat M795539Q was a copy notice to caveator in standard form dated 5 October 1989 referring to dealing number P175623W and expressly identifying Mr. Willetts as the mortgagee. It was addressed to Leo Dimos & Associates, 226 Swanston Street, Melbourne. Mr. Stafford said that the document was a carbon copy of a notice sent to the caveator under that caveat informing the caveator of the lodging of the particular dealing.

256. Mr. Stafford gave evidence also of the then practice of endorsing on the advice paper a stamp to the effect "Notice Sent" with the date of sending recorded within the stamp. He said that that normally appeared on the advice paper. He could not produce the relevant advice document. He gave evidence that the practice at all relevant times had been to throw out the advice paper once the caveat and dealing had been dealt with within the Office.

259. The other caveat, M876074R, was not accompanied by a copy of a notice to caveator in relation to the Willetts mortgage. The caveat did, however, on its second page bear a "Time expired" stamp followed by exactly the same handwritten notation (save that there were no initials) and date stamp as appeared on the first caveat. But it did not bear above the "Time expired" stamp the handwritten endorsement "P175623W Mtge by J. Willetts" that appeared on the first caveat. There was no advice paper or other memorandum recording the sending of a notice to the caveator, Mr. Dimos. His Honour stated that one would expect that, if a separate notice was prepared in respect of each caveat and sent, a copy would have been attached to caveat M876074R.

262. His Honour, for the reasons he gave, correctly in my opinion, did not accept Mr. Stafford's suggestion that the writing in red biro or, it may be, the "Time expired" stamp and the writing and date stamp following it constituted a memorandum within s.113(4) of the Act.

265. His Honour expressed himself as satisfied, after some initial reservations, that the probabilities were that the procedures of the Office were followed in both instances. In particular, he was satisfied that the stamps and endorsements recording the lapsing of the caveats would not have been placed on them in the absence of evidence before the officer in question that the necessary notices had been posted to the caveator. The absence of a copy of a notice with the second caveat raised, his Honour said, the possibility that the standard procedure was not followed in that case. Whilst that was a matter of concern, the critical document was the advice paper, which was no longer available. The fact remained, his Honour continued, that an officer, whose responsibility it was to deal with the matter, placed the "Time expired" stamp and lapsing information on the caveats. The probabilities were that that was done in the light of information before the officer at the time as to the lapsing of that caveat. It would be remarkable, his Honour considered, if that had been done without that information. The probabilities were that that information was in the form of the copy notice to caveator and the advice paper recording when it was sent. Accepting that conclusion, his Honour was satisfied that the notices were given on a date on or between 5 and 10 October 1989.

268. His Honour rejected a consideration advanced for Mr. Dimos as pointing to the opposite conclusion, namely, the absence of any notice to caveator from the files of Mr. Dimos. In support of his rejection, his Honour referred to Mr. Dimos' reluctance to produce all the relevant files and to the fact that those produced appeared to be in some disarray and showed a lack of various documents. Moreover, Mr. Dimos had not complained promptly to the Registrar upon allegedly discovering the registration of the Willetts mortgage, as he had done through his employee, Mr. Leonidas, on an earlier occasion. Again, in the affidavit which Mr. Dimos had sworn in the proceeding on 2 August 1991, in which he deposed to facts relied upon by him in opposition to Mr. Willetts' claim for removal of the caveat, he did not refer to any failure by the Registrar to give him notice. In an affidavit sworn four days later Mr. Leonidas stated that Mr. Dimos had informed him that he had not received any notification of the lodgment of the Willetts mortgage from the Registrar. Cross-examined as to why he did not refer to that fact in his own affidavit, Mr. Dimos said that at the time it was not thought to be relevant. His Honour was unable to accept that explanation. Generally, his Honour said, Mr. Dimos was unsatisfactory in cross-examination. He concluded that the evidence relied on by Mr. Dimos did not support the conclusion that he did not receive the notices. Rather, it raised doubts about his credibility.

271. His Honour stated that he was satisfied on the evidence that the Registrar gave two notices to Mr. Dimos of the lodgement of the Willetts mortgage, one relating to each caveat. If that finding were incorrect and only one notice was sent, his Honour expressed the view that, none the less, the sending of one notice in respect of one caveat would, for the reasons he gave, have satisfied the requirements of s.90(1).

274. On the second major issue which he isolated, the trial judge concluded that Mr. Willetts' admitted alteration of the mortgage to include reference to title two, which undoubtedly was a material alteration, was authorised on behalf of Mr. and Mrs. Konstantellos and accordingly no question of fraud arose.

277. I summarise his Honour's findings and reasoning leading to that conclusion. Mr. Willetts as the intended mortgagee had prepared the mortgage and associated documents and forwarded them to the solicitors acting at the time for Mr. and Mrs. Konstantellos, Egan Kay. Mr. Eganides was the particular solicitor acting for them. The mortgage referred only to title one, probably because Mr. Konstantellos had in March 1989 supplied Mr. Willetts with a copy of that title only. The mortgage was executed by Mr. and Mrs. Konstantellos as mortgagors and returned to Mr. Willetts prior to settlement.

280. Settlement was arranged for 13 April 1989. It was attended by Mr. Willetts' clerk, Ms Brady, and representatives of Mr. Eganides and the three existing mortgagees. In the course of the settlement it emerged that there were two titles to the land intended to be mortgaged to Mr. Willetts, not one. This emerged because the three mortgages to be discharged related to land in the two titles, as appeared from the counterpart mortgages which the representatives of the respective mortgagees produced, and because the representative of the then first mortgagee produced two certificates of title. Ms Brady, who had come prepared to pay over the money necessary to discharge the three mortgages in return for one certificate of title and discharges of mortgages relating to it alone, called the settlement to a halt and sought further instructions from Mr. Willetts by telephone. Mr. Willetts gave evidence that he spoke to Ms Brady and made arrangements that "we" (that is, Mr. Willetts or Ms Brady on his behalf) would settle on the basis[86]:

(a) of taking the second title because "we" were always intending to "borrow" (by which Mr. Willetts clearly meant "lend") against the whole of the Murray Road, Preston property; and

(b) that "we" would amend the mortgage to refer to the whole property to reflect the intention at all stages that the security should be over the whole property.

The mortgage documents had been received, signed by Mr. and Mrs. Konstantellos, before settlement and were not taken to settlement by the clerk but were at the time of the telephone conversation in the possession of Mr. Willetts in his office. Accordingly, as Mr. Willetts pointed out, they could not be amended at settlement by Mr. Eganides' representative on behalf of Mr. and Mrs. Konstantellos. (Although his Honour did not expressly say so, it seems the natural inference from what Mr. Willetts said in evidence that the arrangement of the basis of settlement was not an arrangement simply between Ms Brady and himself but was an arrangement that she on his behalf made with the other persons present at the settlement. Although Ms Brady had no recollection of the settlement and although Mr. Eganides had no recollection of the transaction beyond the fact that he was acting for the mortgagors and that there was a "hiccough" in it, the correctness of the inference I have suggested is supported by Mr. Willetts' evidence that in his later discussion with Mr. Eganides the earlier agreement made at settlement, whereby he would take both titles and amend the mortgage, was re-confirmed.) I return to his Honour's reasons. Mr. Willetts' instructions having been given, Ms Brady proceeded with the settlement. Having paid the required moneys, she returned to Mr. Willetts' office with the two certificates of title and the discharges of the three mortgages. Mr. Willetts gave evidence that he then spoke with Mr. Eganides as representing Mr. and Mrs. Konstantellos, and it was agreed between them that a reference to the additional certificate of title should be typed (in his office) into the description of the land in the mortgage documents.

286. His Honour considered several grounds of attack upon Mr. Willetts' evidence. First, it was pointed out that in his answers and further answers to interrogatories seeking details of the alleged consent to and approval of the amendment of the mortgage Mr. Willetts had not referred to any conversation with Mr. Eganides. His Honour accepted Mr. Willetts' response that the answers were prepared on advice from counsel that the consent or approval referred to was given between the legal representatives at the settlement and not between him and Mr. Eganides, who merely agreed on the way in which the amendment should be made. Secondly, it was submitted that there was no evidence to support Mr. Willetts' evidence. His Honour acknowledged that there was no direct evidence to support it. He said that one might have thought that Ms Brady or Mr. Eganides would have recalled the events, the circumstances being somewhat unusual, but he thought that their non-recall was explicable on the basis that problems crop up at settlements from time to time and that the events were old. With the point now under discussion it is convenient to take the fact that, as his Honour noted later in his reasons, Mr. Willetts had no notes recording the matters in question in his file and Mr. Eganides was unable to provide his file, it having been returned, he said, to Mr. and Mrs. Konstantellos, who in turn, it seemed, were unable to locate it within the time available. His Honour acknowledged that the absence of file notes was of some concern, but pointed out that the relevant transactions had not been handled with the care that one would expect of experienced practitioners.

289. His Honour said that he accepted Mr. Eganides' evidence that he would not have agreed to the alteration without the instructions of his clients[87]. He then said that there was strong circumstantial evidence to support the evidence of Mr. Willetts. First, Mr. Eganides' representative permitted Ms Brady to leave the settlement with the two certificates of title. His Honour did not accept the suggestion for Mr. Dimos that this was because it was necessary for Mr. Willetts to have the certificates in order to complete the discharges. His Honour considered that, if the land in title two was not part of the transaction, Mr. Eganides' representative should have taken that title and taken steps to have the discharges recorded over that title. If he was wrong about that, his Honour said that, if the intention of the parties was that the Willetts mortgage should relate to one title only, then one would have expected Mr. Eganides to have pursued Mr. Willetts for the return of the certificate of title once the mortgages had been discharged. Secondly, his Honour was satisfied that Mr. Willetts had had the entire property valued for the purpose of the mortgage and, thus, was intending to receive a mortgage over the entire property. Thirdly, on two subsequent occasions Mr. Willetts took steps to obtain possession of the whole property and at no time did Mr. and Mrs. Konstantellos seek to argue that he was entitled to part only of it. His Honour considered and, for reasons which he gave, rejected a response for Mr. Dimos that Mr. and Mrs. Konstantellos would not have appreciated those fine points.

292. His Honour turned next to Mr. Dimos' "reliance"[88] on the Instruments Act 1958 as requiring the agents to be authorised in writing to make any change to the mortgage and on the fact that no such authorisation came into existence, which, it was suggested, cast doubt on whether authorisation was in fact given. His Honour did not think the point significant. There was little time in which to formalise matters. Further, the transfer of possession and control of the titles created an equitable mortgage over the whole property in any event.

295. Finally, his Honour considered evidence said on behalf of Mr. Dimos to show that Mr. and Mrs. Konstantellos did not intend to mortgage title two to Mr. Willetts and so, by implication at least, did not agree to the amendment. This was evidence of Mr. Dimos of an arrangement which he said he entered into with Mr. and Mrs. Konstantellos in about April 1988 to release the first title to enable the Konstantellos family to use the land in the title in question to borrow further moneys, Mr. Dimos' unregistered securities being collateral security with the "principal" security held by him over another property. Some, but not all, of the evidence of Mr. Konstantellos was said to support the evidence of such an arrangement. His Honour disagreed on the latter point and, having examined Mr. Dimos' evidence of the alleged arrangement, did not accept it.

298. His Honour turned to the consequences of his primary findings of fact. The fact that notices relating to each caveat were given by the Registrar to the caveator concerning the lodging of the Willetts mortgage meant that the failure of Mr. Dimos to take the action required within the prescribed time had the effect that the caveats lapsed so far as that dealing was concerned. The dealing, therefore, having been registered, had priority over Mr. Dimos' unregistered securities. This in turn made it unnecessary for his Honour to consider other legal arguments of Mr. Willetts based on indefeasibility and the exercise of the power of sale which have been mentioned earlier. The finding that the alteration of the mortgage was authorised removed the factual basis upon which the Registrar and Mr. Dimos had sought to attack Mr. Willetts' registered interest and made it unnecessary to consider whether Mr. Dimos acquired any rights in personam against Mr. Willetts. The findings also disposed of the claims against the Registrar.

301. In case he was in error in his findings, his Honour considered some further factual matters relating to loss and its causation, namely:

(a) whether in fact Mr. Dimos had suffered any loss as a result of losing priority to Mr. Willetts;

(b) whether Mr. Dimos would have consented to the registration of the Willetts mortgage had he been aware of it before registration; and

(c) whether there was any default on the part of Mr. Dimos and Mr. Willetts which caused or substantially contributed to their respective losses.

As to (a), his Honour regarded the evidence as too unsatisfactory to enable a conclusion to be reached whether any and, if so, what moneys were owed to Mr. Dimos by Mr. and Mrs. Konstantellos and whether such moneys were secured by the mortgage and charge relied on, but, if that was wrong, his Honour found that as at 31 July 1991 the balance owing was $11,146.24. As to (b), his Honour was satisfied on the balance of probabilities that Mr. Dimos would have consented to registration. As to (c), his Honour found that conveyancing defaults on the part of each of Mr. Willetts and Mr. Dimos substantially contributed to any loss which he suffered.

Issues in first appeal

307. In the first appeal Mr. Dimos challenges the trial judge's findings on the two major issues he identified, in the case of the first issue on a number of grounds (grounds 1 to 9) and in the case of the second issue on one ground (ground 10), to which leave is sought to add by amendment another ground relating to s.126 of the Instruments Act 1958. In addition, he contends that the trial judge erred on a number of grounds (grounds 18-20) in awarding Mr. Willetts interest against him under s.58 of the Supreme Court Act 1986.[89]

310. Mr. Dimos also contends that the judge erred in failing to uphold his claim against the Registrar under s.110 of the Act (ground 16). That raises in the first instance the same issue as grounds 1 to 9 abovementioned and, secondarily, all or some of his Honour's further factual findings. Mr. Dimos further challenges one of those three findings, namely, the conclusion that his failure to place caveats on both titles substantially contributed to his loss (ground 17), and he seeks leave to add grounds challenging his Honour's findings on the other two further factual issues. From the conclusion which I express below that the challenges to his Honour's findings on the two major factual issues fail, it necessarily follows that ground 16, challenging the failure to uphold Mr. Dimos' claim against the Registrar, also fails, and I do not find it necessary to consider Mr. Dimos' challenge and would-be challenges to his Honour's further factual findings. If only because they do not raise issues requiring consideration, I would refuse leave to amend the notice of appeal to add the two grounds challenging further factual findings.

313. The remaining grounds in the notice of appeal, grounds 11 to 15, were abandoned.

316. When I earlier set out his Honour's reasoning on the two major factual issues which he identified, I did so at considerable length. I did that both to give a proper understanding of the case and because, apart from the need to deal with points not taken below and to say a little more on the question of the Instruments Act, it might be sufficient to say that in rejecting the challenges to the two major factual findings I adopt his Honour's reasons subject to one qualification. I shall, nevertheless, out of deference to the argument presented, give some further detailed reasons for rejecting those challenges. The qualification which I have mentioned is that, as at present advised, I am doubtful about, and therefore should not be taken as endorsing, his Honour's view that, where a caveator has lodged two caveats asserting different interests in the same land, the giving of one notice expressed to relate to one caveat only satisfies the requirements of the Act, so that, in the event of default by the caveator, both caveats lapse. The correctness of that view, being an alternative basis for decision, need not be investigated if his Honour's primary view stands, as I consider it should do.

First issue: whether notice satisfying s.90(1) given to Mr. Dimos in respect of each caveat

320. The agreed summary prepared for the Court states that Mr. Dimos does not attack the evidence of the Registrar's witness, Mr. Stafford, but rather contends that the conclusions drawn from it by the trial judge were not appropriate in the circumstances. As will appear, the statement was not entirely borne out by the argument for Mr. Dimos. The compendious submission for Mr. Dimos on the first issue was that the trial judge erred when he found that the procedures of the Land Titles Office had been followed and that the necessary notices had been posted to the caveator. Accordingly, the trial judge should not have been satisfied that all relevant notices had been sent and should have found that the registration of the mortgage was improper and made orders entitling Mr. Dimos to be indemnified under the Act. The compendious submission was supported by a large number of detailed submissions, both written and oral, falling within the generally worded grounds of appeal on this issue. Omitting the challenge to his Honour's alternative view that one notice was sufficient, the detailed submissions were in essence three-fold. First, the sufficiency of the evidence was challenged. Secondly, the terms of the copy notice to caveator attached caveat M795539Q were said not to comply with s.90(1). Thirdly, it was, at least at one stage, contended that Mr. Willetts and the Registrar had to establish receipt by Mr. Dimos of the notices and that this had not been done.

323. In support of the first detailed submission numerous arguments were advanced. First, it was said that his Honour made the same error as was made by the Crown prosecutor in R. v. Clune (No.1)[90]. There the Crown prosecutor had argued that, if it was proved that the occurrence of a particular event (an interview) would, in accordance with the established practice of the persons concerned therewith, be accompanied by an entry in a book stating that the event had occurred, then proof of the existence of such an entry in the book was admissible as original evidence in proof of the occurrence of the event, the evidence of the practice enabling the inference to be drawn that the entry would not exist unless the event had occurred. The Court of Criminal Appeal rejected that proposition because the only proof of the occurrence of the event was a statement in the entry in the book and that statement was inadmissible as such proof because of the hearsay rule. The evidence of practice did no more than show that the statement in the entry was likely to be true, which was, of course, not relevant to admissibility. Here, it was argued, the notations relied upon by the trial judge were not admissible and could not be relied upon to prove the truth of the facts contained in them because they were hearsay or relied upon hearsay. There are a number of answers to this argument. It may possibly be (as another argument for Mr. Dimos asserted) that there is no statement as to posting amongst the notations and that what is relied on is an inference, based on practice, arising from the notation actually made on the caveats, which is not relied on for the truth of its contents. This was the argument in the written outline lodged for the Registrar, whose counsel the Court did not call upon. There is certainly no express statement in the notations that a notice was posted, but it may be that the argument conceals reliance upon an implied statement. I prefer to base my rejection of this argument for Mr. Dimos upon two other grounds. First, as senior counsel for Mr. Dimos frankly admitted and as is shown by the transcript of Mr. Stafford's evidence and Mr. Willetts' evidence-in-chief when the caveats were tendered, the admissibility of the notations was not objected to[91], and it does not seem to me appropriate to allow a different course on a significant matter to be taken on appeal[92]. Secondly, although the Evidence Act 1958 was not referred to during argument, if Mr. Dimos were to be permitted on appeal to change his stance, it would be equally permissible to say that the notations were, in my view, admissible by virtue of s.55(1)(b) of the last-mentioned Act, read with the definitions of "business" and "statement" in s.3(1), and taken with the dispensation from calling the supplier of information that is contained, in the case of the first caveat[93], in s.55(6) and, in the case of the other caveat[94], in s.55(5)(c). On this argument I would add that, in giving my reasons for rejecting it, I have tacitly treated Clune (No.1) as capable of application to a civil case. But it must be stressed that the Court there was concerned with the criminal standard of proof and that full allowance must be made for that fact.

326. The second argument began with the proposition, derived from Connor v. Blacktown District Hospital[95] and Olga Investments Pty. Ltd.[96] and cases there respectively cited, that to establish a fact by reference to a practice evidence of the relevant practice must be given by a person who, on a sufficient number of occasions and over a sufficient period, has regularly and uniformly performed acts, or has observed the regular and uniform performance of acts by others, under the same circumstances and upon the same occasions, so as to make it appear probable in the minds of reasonable people that, given the same circumstances and occasions, the like acts would again be performed. It was then said that Mr. Stafford's evidence was not admissible to prove the sending of the relevant notices or alternatively did not prove that, because:

(a) he did not have the required knowledge of the practice at the time in question as he was neither involved in the posting of the notices relating to caveats at the time nor saw such events occurring at that time;

(b) there was no satisfactory evidence as to the contents of the actual advice papers in question;

(c) the notations made as to expiry were made on the basis of hearsay statements contained in the advice paper;

(d) there was no evidence as to the system of postage whether by ordinary pre-paid post or otherwise;

(e) there were clearly some serious doubts in the mind of the trial judge as to whether the system in place was followed in all instances;

(f) the persons who were involved in the system at the relevant time were not called to give evidence even though available;

(g) the endorsements as to the lapsing of time were not made in accordance with the Act, that is, within 30 days of posting, but were made 35 days after the alleged posting;

(h) the evidence about when the endorsements were made was unclear; and

(i) there was evidence of past failure of the system of notification.

332. As to the admissibility of Mr. Stafford's evidence, again this was not objected to below. Indeed, counsel for Mr. Dimos said expressly that he was not contesting any of Mr. Stafford's qualifications. Later in response to a question from the judge, he said that he would not really mind if counsel for the Registrar led the witness, giving, however, as his reason that the witness could not say anything about what happened. Counsel did take some objections but they were to specific questions and not to Mr. Stafford's qualifications or to the admissibility of his evidence as to practice of the Office. For substantially the same reason as given earlier, it is too late to contend that his evidence was inadmissible. Had objection been taken, it may be that another witness could have been called on to the practice of the Office. The sufficiency, however, of his evidence is another matter, as, I think, is shown by the reason given by counsel for Mr. Dimos for his not objecting to Mr. Stafford's being led and by his statements from time to time that Mr. Stafford's evidence did not go far enough.

335. I turn therefore to the latter matter. So far as reason (a)[97] relates to aspects other than admissibility, it seems to me that the weight and effect of Mr. Stafford's evidence was essentially a matter for assessment by his Honour. As a result of an intervention by the judge, Mr. Stafford gave his evidence by reference to the practice at the times of the lodgement of the caveat in 1987 and the mortgage in 1989. Although he several times used the expression "I understand" his evidence-in-chief reads as that of someone describing Office practice with which he was familiar from observation. But in cross-examination he said that he did not work in the section that sent out the notices, but did know how it worked, because he had informed himself about the process by asking the staff there. His evidence having been admitted without objection, it seems to me that it was open to his Honour to act upon it and indeed that commonsense would support the acceptance of it or, perhaps more accurately, of the implication in or inference arising from it that it was the regular practice of staff of the section to clear the tray and post the letters addressed to caveators containing notices to them. His Honour was in my view, correct to proceed on the footing that it was the normal practice, at least, of the Office for the envelopes addressed to caveators to be posted at regular (such as, daily) intervals. As Tadgell, J.A. pointed out during argument, his Honour was doing little more than applying a presumption of regularity to a government office.

338. As to reason (b), it is true that there is no direct and primary evidence of the contents of the advice papers relating to caveats in question, but there was evidence that it was the practice to stamp advice papers with a note that a notice concerning the caveat had been sent on a named date.

341. What I have said earlier about the submission based on Clune (No.1) disposes of reason (c).

344. As to reason (d) it is true that the evidence did not disclose the practice of the Office with regard to the place of posting and the payment of postage. Mr. Dimos relies in particular upon the terms of s.49(1)(a) of the Interpretation of Legislation Act 1984, which provided an interpretation of the reference to sending by post which s.113(1) of the Transfer of Land Act authorised for a notice required to be given under s.90(1) of that Act. By s.49(1) the service was to be deemed to be effected by properly addressing, pre-paying and posting the document as a letter to the person on whom it was to be served. The point now under consideration appears not to have been taken below. Certainly it was not discussed by his Honour. Assuming, as I am inclined to think is correct, that it can now be raised, I would say that the evidence entitled his Honour to infer on the balance of probabilities, as in my view he implicitly did, that when put into the course of post the letters were in a state as regards postage that was acceptable to Australia Post, that is, they were in a condition in which Australia Post was prepared to carry and deliver them rather than reject them or require payment of more than the amount of postage as a condition of delivery to the addressee. There is, it is true, the possibility that, in the case of an organisation such as the Land Titles Office, its outward mail, rather than having adhesive postage stamps affixed to each letter, was franked or otherwise posted in bulk. The Oxford English Dictionary (2nd edn.) shows that the original meaning of the verb "frank" was to superscribe (a letter, etc.) with a signature, so as to ensure its being sent without charge, but that the word was revived in later use with the meaning, to mark (a letter, etc.) with a sign (in lieu of an affixed postage stamp) by means of a franking machine. The latter expression is defined in the same work as, "An officially authorized machine, introduced by the British Post Office in 1922, used by large concerns for `stamping' letters, etc., with a sign (in lieu of an affixed postage stamp); it simultaneously records the cost of postage (this being periodically checked and collected by the Post Office)"[98]. Amongst the illustrations of the use of the word is a passage from the Encyclopaedia Britannica (1929), vol. xviii, 311, which in part states, "These machines impress the correspondence with a red franking stamp which is accepted as the equivalent of a postage stamp."[99]. Since the argument for Mr. Dimos was not developed, it may not be necessary to resolve this aspect. If, however, it is necessary, I would acknowledge that it is a matter of speculation whether the Office's letters had postage stamps affixed or were franked in a franking machine used in the Office or posted in some way in bulk at a post office and also, in the latter cases, when payment of postage was made. But, in so far as the Office used a franking machine and did so otherwise than on an imprest system, I would say that the better view of s.49(1)(a) and like provisions is that service of a properly addressed letter which has been duly franked is deemed to be effected by posting it. That conclusion may be reached on two bases. First, whilst the statutory provision stated that service "shall" be deemed to be effected in a certain circumstance, it was not exhaustive. Secondly, having regard to postal development since s.26 of the Interpretation Act 1889 (Imp.) was enacted and in particular to the fact that an impression made or "stamped" by a franking machine is treated as the equivalent of a postage stamp[100], no doubt because payment is made in advance or at that time or because the entity franking the letter has made arrangements[101] for payment in arrears to the satisfaction of the postal authority, the word "prepaying" is now to be read widely. If neither basis were correct, the beneficial statutory provisions for proof of service would not be capable of application to vast amounts of mail.

347. But I do not consider that Mr. Willetts' and the Registrar's cases must accommodate all the possibilities I have been discussing. Importantly, whilst I have so far proceeded on the unexpressed assumption that the onus of proof as between Mr. Willetts and Mr. Dimos with regard to the sending of notices to caveator was on Mr. Willetts, I am in fact of the view that on the pleadings between those two parties as they stood at the time of trial the onus was on Mr. Dimos, to disprove sending, as indeed his senior counsel acknowledged at one point in the argument. For Mr. Dimos expressly alleged in paragraph 10 of his amended defence filed 17 June 1997 that the Registrar failed to give him notice pursuant to s.90(1). It is true that Mr. Willetts, in paragraph 10 of his amended reply, made the opposite allegation, but that was only for the purpose of raising an estoppel against Mr. Dimos. That paragraph was repeated in his defence to counterclaim, but the relevant pleadings are those in relation to Mr. Willetts' claim, for on that he succeeded before the trial judge. Secondly, Mr. Dimos alleged failure to give notice in his claim against the Registrar and the Registrar in her defence thereto alleged the opposite. But it was Mr. Dimos who made the assertion. This means that as against Mr. Willetts - and also as against the Registrar - it was for Mr. Dimos to show that it was not the practice to prepay letters containing notices to caveators. He adduced no evidence to that effect and therefore fails on that issue.

350. It is convenient to take the remaining reasons together, for they bear on the weight to be given to the evidence of Mr. Stafford. His Honour was aware of the matters mentioned. He knew also that there was evidence that the staff to whom Mr. Stafford had spoken (who did not, however, include Mr. Erlich) had no recollection of the actual steps taken after lodgement of the mortgage, and that the five days of grace beyond the 30 days were allowed in part to enable responses to be processed. His Honour did, as I have mentioned, have some initial reservations and, perhaps, doubts, but, having reviewed all the evidence and the considerations flowing from it, he was satisfied on the balance of probabilities[102] that a notice was sent in respect of each caveat. To my mind, the reasons which his Honour gave - and this applies particularly to the second caveat, as to which there were stronger grounds for reservations - are cogent. I see no reason to interfere with that factual finding. If, as the appellant urged, it was for this Court to draw its own conclusions, I would not differ from the trial judge. In reaching that conclusion, I have, contrary to the written submissions for Mr. Willetts and the Registrar, not treated his Honour's criticism of Mr. Dimos' evidence as itself amounting to a finding that Mr. Dimos more probably than not received the notices[103], but merely as destroying Mr. Dimos' reliance upon his files. What I have so far said in this paragraph assumes that the onus of proof was on Mr. Willetts. It was not. Mr. Dimos certainly did not discharge the onus on him.

353. It was submitted for Mr. Dimos, with some plausibility, that there was nothing onerous or difficult in expecting the Registrar (with, it might have been added, the benefit of s.113(4)) to be able to satisfy the Court as to service of a notice under s.90(1) and that given the possible consequences of the failure to respond to such a notice the Registrar should establish the fact of service with a strong degree of certainty. But, though that may be the desideratum, the question of service falls to be determined on the balance of probabilities, and on that I have expressed my conclusion.

356. The second detailed submission for Mr. Dimos was that a notice of which the attachment to the first caveat was a copy was not in the form contemplated by the Act because it was not addressed to the caveator but to his address for service. It was also said that the only notice in evidence, the copy notice, was unclear as to the address used. The second limb of that argument can be disposed of shortly. Whilst the street number of Leo Dimos & Associates in the photocopy in the Appeal Book of the exhibited copy notice is not clear, his Honour had the actual exhibit and both he and Mr. Stafford had no real trouble in discerning that the street number was 226. The first limb of the argument seems at first sight more substantial, but it is entirely unmeritorious and was not taken below. It is true that s.113(1) of the Act, on which the Registrar and Mr. Willetts rely, spoke of a letter posted "to the person concerned at his address for service" and that s.49(1)(a) of the Interpretation of Legislation Act made "properly addressing" the document as a letter a requirement to be satisfied for service to be deemed effective by virtue of that provision. But the notice contained sufficient information for the solicitors to be able readily to ascertain the name of the caveator: what can be rendered certain is certain. Further, it appears from the first paragraph of an affidavit Mr. Dimos swore on 2 August 1991, from the evidence of Mr. Leonidas and from the letterheads of Leo Dimos & Associates in the Appeal Book that Mr. Dimos was the sole principal of Leo Dimos & Associates, so that the notice was addressed to him albeit under his business name or style: a mere erroneous description does not vitiate when there is sufficient certainty as to the object described. In all the circumstances, I do not think that this argument should be upheld

359. The third detailed submission was that it was not proved that Mr. Dimos received a notice in respect of either caveat. This argument reflects ground 9 in the notice of appeal. As his Honour noted, the proposition put forward on behalf of the Registrar that a notice which was duly given will be effective even if it is not established that it actually reached the caveator appeared to be accepted by the other parties. Although in oral argument senior counsel for Mr. Dimos at one stage briefly suggested that it was for Willetts and the Registrar to prove that Mr. Dimos had received the notice (or notices), he then referred to Chesterfield v. Pitisano[104] and said that the appellant accepted that the issue was whether the notice (or notices) was (or were) sent. That concession was clearly correct[105]. Accordingly, whatever the position may once have been in the appeal, ultimately this argument was, properly, not persisted in.

Second issue: whether alteration of mortgage authorised

363. It was contended for Mr. Dimos that the question here was not solely whether the addition was made with the necessary consents but also whether the consents, if given, were given in the appropriate form. The first limb of the argument is alone covered by the single relevant ground of appeal. As to it, a number of arguments were advanced in favour of the conclusion that his Honour erred in finding that an agreement had been made with the solicitors for Mr. and Mrs. Konstantellos authorising the alteration of the mortgage by the addition to it of a reference to title two. It was said, for instance, that the evidence was too vague and uncertain and that the evidence of Mr. Willetts as to his conversation with Mr. Eganides was clearly inconsistent with his answers to interrogatories in several of which he said, without referring to that conversation, that he was unable to answer further. I have considered the various arguments advanced in writing and orally. I am quite unpersuaded that his Honour erred in finding that the alteration was authorised by the solicitors for Mr. and Mrs. Konstantellos. Besides the considerations on which his Honour relied, I mention that, in response to a question from the Bench whether Mr. and Mrs. Konstantellos had ever said that Mr. Eganides proceeded on a wrong basis in agreeing with Mr. Willetts as to the manner of alteration (and thereby confirming the agreement made at settlement for alteration), senior counsel for Mr. Dimos informed us that they had not. Further, when called by counsel for Mr. Willetts, Mr. Konstantellos volunteered in evidence-in-chief that Mr. Willetts said to him, "I give you the money, but I want the house for security."[106]. Mr. Konstantellos said in chief and when cross-examined on behalf of Mr. Dimos that the house (meaning, the house building at 179 Murray Road Preston) was built on two titles. It is true that in response to strong leading questions in cross-examination for Mr. Dimos Mr. Konstantellos said that he told Mr. Dimos to keep the smaller title and that he would use the bigger title to raise some money on, but the evidence-in-chief reads much more persuasively. Contrary to a submission from Mr. Dimos, I consider that his Honour was entitled to proceed on the footing that Mr. and Mrs. Konstantellos intended to mortgage the land in both titles to Mr. Willetts, so that the agreement which Mr. Eganides' representative made and the subsequent arrangement as to the mechanics of alteration which Mr. Eganides himself made were in pursuance of his clients' intention and, indeed, of their agreement with Mr. Willetts; for it would seem that Mr. Willetts and Mr. Konstantellos had agreed upon a loan on the security of the property at 179 Murray Street Preston, which, although Mr. Willetts did not know it at the time, consisted of two titles. I would add this important observation. The argument seemed to assume that it was for Mr. Willetts to show that the alteration was made with authority. In fact, the onus was on Mr. Dimos to show that it was made without authority, for it was he who had introduced the question of authority into the pleadings by alleging as a foundation for his counterclaim against Mr. Willetts that the mortgage had been amended without authority. I am amply satisfied that he failed to make that out.

366. In the course of his oral submissions on the second issue senior counsel for Mr. Dimos began to advance a second argument or a second limb of the argument, namely, that the agreement to amend the mortgage was a contract for the disposition of an interest in land, that the proceeding was an action to enforce it and that the agreement was not in writing signed by agents authorised in writing by Mr. and Mrs. Konstantellos, as required by s.126 of the Instruments Act 1958. Counsel for Mr. Willetts then objected to the development of that argument on the ground, as was the fact, that it was neither covered by the grounds of appeal nor pleaded below. He also pointed out that when counsel then appearing for Mr. Willetts had, during addresses, objected to the same argument below because it had not been pleaded, had said that he would have to call further evidence and had suggested that there were already acts of part performance by Mr. Willetts in evidence, counsel for Mr. Dimos after discussion had said that he would "not pursue the matter". Before us senior counsel for Mr. Dimos then sought leave to amend the grounds of appeal to include a ground relying on s.126. Late applications to amend pleadings on appeal[107] and especially to plead the Statute of Frauds as a defence[108] are ordinarily viewed with disfavour. It was said for Mr. Dimos (as I recorded it) that there was nothing in the way the case was run below which would have elicited evidence that was not given, but, even if that were so, I am clear that the factors which I have mentioned, and in particular the absence of reference to the point in the appellant's pleadings and notice of appeal and the express abandonment of the point below[109], show that leave to amend should be refused.

369. I would add this. Although senior counsel for Mr. Dimos said that the point went to the heart of the matter, my present view is that it is misconceived. The mortgage is both a contract and an instrument creating an interest in land. But the parties to it are Mr. Willetts and Mr. and Mrs. Konstantellos. Mr. Willetts is not in the present proceeding seeking to enforce the mortgage as a contract for the disposition of an interest in land against the only other parties to it, Mr. and Mrs. Konstantellos[110]. Indeed, even against Mr. Dimos, it may be doubtful whether he is relying upon the mortgage itself as a contract, as opposed to relying upon the fact that it has been registered and that no action was taken timeously by Mr. Dimos as caveator. It is Mr. Dimos who has raised the question of alteration. Be all that as it may, even if Mr. Willetts were suing Mr. and Mrs. Konstantellos on the mortgage as altered, the Statute of Frauds would not ultimately, I think, afford a defence. It may well be, despite what I have called his Honour's extrapolation from the evidence of Mr. Eganides, that the latter did not consult Mr. and Mrs. Konstantellos about the alteration. But it is clear, for reasons given earlier, that Mr. Konstantellos, on behalf of himself and his wife, and Mr. Willetts were intending respectively to give and to take a mortgage over the title, whatever it was, to the house property at 179 Murray Street, Preston. In those circumstances, if the alteration already made is disregarded, Mr. Willetts could with an appropriate adjournment of the trial (if the point had been pleaded) have obtained rectification of the mortgage by the addition of title two on the basis of oral evidence of common intention, if not of agreement, and the mortgage when rectified would constitute a memorandum for the purpose of the Statute of Frauds: United States v. Truck Motors Ltd.[111] and Bosaid v. Andry[112].

372. Senior counsel for Mr. Dimos at one point raised another question under this second issue. He suggested that, even if the solicitor for Mr. and Mrs. Konstantellos had agreed to the alteration, the presentation of the altered mortgage to the Registrar would constitute or give rise to a misrepresentation that the document was as signed by the mortgagors, which the solicitor knew not to be the case. This does not seem to have been argued below and is not covered by the grounds of appeal. But in any event that would not amount to fraud within s.42(1) of the Act: having obtained the agreement of a person or persons having ostensible authority to authorise the correction on behalf of Mr. and Mrs. Konstantellos, Mr. Willetts was entitled to treat their signature as applying to the document as altered. Australian Guarantee Corporation Ltd. v. De Jager[113], which was cited, is quite different. The imputation of fraud is unjustified.

376. In reasons handed down on 27 February 1998 his Honour held that Mr. Willetts was entitled to interest under s.58 of the Supreme Court Act 1986. So far as material that section provided:

"58(1) If in a proceeding a debt or sum certain is recovered, the Court must on application, unless good cause is shown to the contrary, allow interest to the creditor on the debt or sum at a rate not exceeding the rate for the time being fixed under section 2 of the Penalty Interest Rates Act 1983 or, in respect of any bill of exchange or promissory note, at 2% per annum more than that rate from the time when the debt or sum was payable (if payable by virtue of some written instrument and at a date or time certain) or, if payable otherwise, then from the time when demand of payment was made. (2) ... (3) A debt or sum payable or a date or time is to be taken to be certain if it has become certain."

380. If Mr. Willetts was entitled to interest under s.58, Mr. Dimos does not complain of his Honour's quantification of the amount. His contention is that the case did not fall within s.58. Relevantly, the judgment given by his Honour on 22 December 1997 was that the money held in trust be paid to Mr. Willetts. Whether the money held in trust be considered as only the original $20,000 the subject of the order of Gobbo, J. of 7 August 1991[114] or as that original sum together with interest thereon re-invested in the bank account as at 22 December 1997, the amount adjudged to be paid to Mr. Willetts was, in my view, a sum certain, though not a debt. Nor was the latter suggested. Senior counsel for Mr. Dimos was prepared to concede that the money had been "recovered" within the meaning of s.58(1), and, despite doubts which the reasons of Tadgell, J.A. strengthen, I am prepared to proceed on that basis without deciding the point,[115] though I observe that even in his amended statement of claim Mr. Willetts did not claim the sum of $20,000.

383. The critical question is whether Mr. Willetts was "the creditor". There is a subsidiary question as to when the sum was payable. In considering whether Mr. Willetts was "the creditor" I put aside the fact that the proceeding as commenced sought simply the removal of caveats. His Honour considered that the argument for Mr. Dimos, namely, that there was no creditor-debtor relationship in the classic sense between the two men, that a fund was merely created under the control of the Court and that no demand had been made for the money, sought to impose an excessively narrow definition of the term "creditor". He said that both Mr. Willetts and Mr. Dimos claimed to be entitled to the $20,000 and in that sense might fairly be described as both claiming to be the creditor. The fund having been created, both claimed to be a creditor in relation to the fund. Citing Gibb v. Lombank Scotland Ltd.[116], his Honour stated that the word "creditor" is flexible in its meaning and will vary according to the context. He said that in interpreting the expression regard should be had to the purpose of s.58, namely:

"to compensate the plaintiff for being kept out of his money, although not because he has on that account lost the opportunity to invest it, but because he has thereby been deprived of its use,"[117]

and concluded that Mr. Willetts should, for the purposes of the section, be regarded as a creditor.

388. I accept that the word "creditor" is flexible in its meaning and varies according to its context. However, the cases show that in the ordinary acceptation of the term a beneficiary is not a creditor of his or her trustee: Ex parte Taylor; In re Goldsmid[118] and Burns & Geroff v. Leda Holdings Pty. Ltd.[119]. Gibb v. Lombank Scotland Ltd. was, if I may say so, an unsurprising decision in which no unduly wide or generous meaning was attributed to the word "creditor". The missives for the sale of a company had included the following provision, "The company will be in the following form ... with no creditors outstanding." It was admitted by the seller that certain accountants' fees and minor sums for agents' commission as well as an intimated claim followed by an action in court for £4,400 for alleged fraudulent preferences obtained by the selling company on the sequestration of a particular motor trading firm were outstanding. The seller maintained, however, that "creditors" meant those who had liquid claims for debt. It was held by Lord Cameron in the Outer House that the purchasers were entitled to found upon the admitted outstanding claims in seeking reduction of the contract of sale on the ground of breach of the clause stipulating "no creditors outstanding".

391. Counsel for Mr. Willetts contended that the word "creditor" should be given a broad meaning in the context of s.58 and was simply a shorthand method for denoting a successful plaintiff or someone who recovers a sum certain.[120] If that be so, one may ask why the word "plaintiff" or "claimant" was not used instead of the somewhat more specific word "creditor". The use of the word "plaintiff" in the passage cited from Clarke v. Foodland Stores Pty. Ltd. did not, and could not, mean that every plaintiff was within s.58(1): the Court was of course speaking in general terms, without reference to the present point. Further, if there is a creditor there must, it seems incontrovertible, be a debtor[121]. On one view, supported by the source of the moneys in question, the debtors were Mr. and Mrs. Konstantellos, the holding of the money on trust simply being a temporary mechanism while the rival claims to the proceeds of sale of the mortgaged property were determined. If one concentrates, however, on the trust mechanism employed, the person liable to make payment to Mr. Willetts was the trustee of the fund, namely, Mr. Willetts himself. But it was against Mr. Dimos that his Honour made the award of interest. If the moneys had been held by a third party, could that person, it may be asked rhetorically, have been ordered to pay interest? If not, on what basis could Mr. Dimos in that case have been so ordered? Again, a person entitled to a debt or sum certain is able to sue the person liable to pay the debt or sum certain, the debtor or obligor. But Mr. Willetts could not and did not sue Mr. Dimos for the sum, which he already held. To the foregoing must be added the fact that ordinarily at the very least a beneficiary is not a creditor of his trustee. No case was cited, and I have found none, applying "creditor" to the present facts. It is true that the expression "the creditor" must here have a meaning apt to "sum certain" as well as to "debt", but the whole context of the section points to amounts which defendants are liable to pay (and, as I will shortly show, liable from at least the commencement of the proceeding).

394. There is a further consideration against his Honour's conclusion and indeed it was the principal point advanced for Mr. Dimos in this Court. By contrast with s.60(1), s.58(1) pre-supposes, contrary to the facts of this case, that the debt or sum certain was payable before the commencement of the proceeding, for it authorises the allowing of interest, unless good cause is shown to the contrary, "from the time when the debt or sum was payable" and, save perhaps in exceptional cases, a debt or sum must be payable before it can be sued for or recovered. It is true that in the alternative s.58(1) authorises the allowance of interest "from the time when demand of payment was made"; but, except where a writ may be treated as itself the demand, a demand necessarily precedes the commencement of the proceeding. Furthermore, the first-mentioned alternative applies "if [the debt or sum certain was] payable by virtue of some written instrument and at a date or time certain." Now, if his Honour's interpretation is correct, Mr. Dimos must be treated as the person liable to pay. But, if the first alternative is to be applicable, the only "written instrument" by virtue of which it could be said that the sum was payable by him is the judgment of 22 December 1997, for the order of 7 August 1991 did not make him liable to pay the sum. On that view, there is no period of time over which interest is calculable, for the commencing and concluding dates of the period are one and the same. As to the second alternative, there was no demand here, and there could have been no demand here. In truth, each of the alternative conditions is as inappropriate as the other.

397. For the foregoing reasons and the reasons given by Tadgell, J.A. I am of opinion that Mr. Willetts was not entitled to interest under s.58 and that paragraph 1 of his Honour's order made 27 February 1998 must be set aside[122].

401. It follows that the appeal against the judgment and orders of the trial judge succeeds as to interest but otherwise fails as against Mr. Willetts and fails entirely as against the Registrar.

405. It was submitted for Mr. Willetts that leave to bring this appeal was required because the Practice Court judge's order was "as to costs which are in the discretion of the Trial Division" within s.17A(1)(b) of the Supreme Court Act 1986, reliance being placed on the somewhat tentative view of Mason, C.J. on slightly differently worded legislation in Halliday v. High Performance Personnel Pty. Ltd.[123]. That decision technically is not binding on this Court, and I am inclined, with great respect, to doubt the correctness of the submission to us. But since the conclusion of argument[124] it has become obvious to me that the order of the Practice Court judge was made on an interlocutory application for the purposes of s.17A(4)(b), for it did not finally determine the rights of the parties, but was merely consequential upon such determination: cf. In re Jerome[125], and, generally, Benfield v. Australian National Railways Commission[126].

408. The reasons for judgment of Ormiston, J.A. in relation to this appeal, which I have had the considerable benefit of reading, demonstrate why leave to appeal should be given. I agree with his Honour's reasons and with the order which he proposes.

[1] Robert Smith Surtees, Ask Mamma, lxxviii (1858).

[2] Oxford English Dictionary, 2nd ed., citing E.B. de Fonblanque, Life and Labours of Albany Fonblanque, (vi) 508 (1874).

[3] Certainly since before 1984, the date of the statute now under consideration referring to the concept of pre-paid post.

[4] [1891] VicLawRp 48; (1891) 17 V.L.R. 198.

[5] [1855] EngR 169; (1855) 10 Exch. 667; 156 E.R. 607.

[6] [1892] 1 Q.B. 674.

[7] [1991] V.R. 367, at 380.

[8] See [55], footnote 80; but as against that I note that Mr Willetts, in an affidavit sworn on 5 February, 1998, deposed that "On 26 August 1991, I established with the National Australia Bank at its branch at 483 Sydney Road, Brunswick National Cash Management Account Number 20 715-8630 ("the bank account") Such investment is an authorised trustee investment and accorded with the Order of Mr Justice Gobbo. ....On that day I paid into the bank account the sum of $20,000."

[9] As to which see Westblade v. Adams (1984) 3 B.P.R. 9319; Eighth SRJ Pty. Ltd. v. Merity (No 2) (Young, J., Supreme Court of New South Wales, 10 April, 1997)

[10] [1903] 2 K.B. 533.

[11] [1907] 1 K.B. 264.

[12] [1951] Ch. 10 at 19.

[14] For the present I omit those costs relating to the joinder in the first place of the Registrar in 1991 for conformity's sake, so as to bind the Registrar in relation to the outcome of the claim against the first defendant. To that claim the Registrar would ordinarily do no more than indicate that he or she would abide the order of the Court. The additional costs here referred to were those incurred when an amended statement of claim was served and filed making specific claims against the Registrar pursuant to s.110 of the Transfer of Land Act 1958.

[15] The learned master's meaning is obscure. Probably he meant that "words of exclusion" should be used. Otherwise the order in present case might have been confined to costs as against the first defendant.

[16] (No. 2) [1901] 2 Ch. 763.

[19] At p.69. The summary at p.70 is even briefer.

[20] It may not be insignificant that this decision reviewed a decision of one of the Chancery Taxing Masters in the last year that they separately exercised their jurisdiction. When the Rules of the Supreme Court of January 1902 amalgamated those Masters into the central office of the Supreme Court, they became members of what came to be known as the Supreme Court Taxing Office as from 11 January 1902. Thereafter difficulties arose over the succeeding 30 years, and arguably 65 years, as to the extent to which common law practice and chancery practice concerning costs ought to prevail, notwithstanding Order LXV's preference for the chancery principle that all costs should be "in the discretion of the Court". There were a considerable number of changes to the rules over this period, in particular as to the extent to which the common law principle of costs following the event should apply in jury actions, as was originally provided for in r.1 of Order LXV, or more generally. Similar problems arose in Victoria: see e.g. Jelbarts Pty. Ltd. v. McDonald [1919] VicLawRp 67; [1919] V.L.R. 478, but specific references to costs following the event disappeared from the English Rules in 1929 and in Victoria in 1938, so that much of the earlier case law is now inapplicable. The matter need not be examined in detail for, as will be seen, the common law practice in the King's Bench Division ultimately prevailed, presumably upon the basis that, where Order LXXII r.2 provided that "the present procedure and practice remain in force", and there was a conflict, the practice prevailed which was considered by the Court to be the most convenient: cf. Newbiggin Gas Co. v. Armstrong (1879) 13 Ch.D. 310 and Puddephatt v. Leith (No. 2) [1916] 2 Ch. 168 at 179.

[21] See e.g. Hobson v. Sir W.C. Leng & Co. [1914] 3 K.B. 1245: cf. O'Sullivan v. Morton [1911] VicLawRp 51; [1911] V.L.R. 249.

[22] See, as to the King's Bench Division Practice, Butterworth's Costs ed. by Treagus & Rainbird (1951) Vol. 1 p.78, and as to its ultimate acceptance, see the Supreme Court Practice (1985) para.62/9/11, with which should be compared para.62/9/12 of the preceding 1982 edition. See below para.[[].

23] See the report of the trial: [1901] 1 Ch. 374.

[26] For this purpose he referred to the judgment of Lord Esher, M.R. in Stumm v. Dixon & Co. (1889) 22 Q.B.D. 529, from whom Fry, L.J. dissented.

[27] He gave a specific example of an order made by Joyce, J. during the previous sittings: see at 767.

[28] What is remarkable is that the question of costs was raised by counsel then appearing for Lloyds, the eminent commercial barristers T.E. Scrutton and F.D. MacKinnon. His Lordship concluded his reasoning at the trial ([1901] 1 Ch. 374 at 382) by saying: "The plaintiffs are entitled to an injunction against Gavin with costs, but are not entitled to costs as against Lloyds." It would seem that about the only thing he did not then say was that the latter costs should not be recovered against the defendant Gavin. At the later hearing he seemed more impressed by the fact that that defendant, who was not represented at the trial, was represented when the order was drawn up and took no objection to the form of order, which he then construed in the wide way that he did.

[29] (1906) 23 R.P.C. 149.

[30] (1905) 22 R.P.C. 63.

[33] 1902 edition; and also in the annual editions for some years thereafter.

[34] [1914] 3 K.B. 1245.

[39] At 1248; see also at 1252. In effect the common law approach of Lord Esher, M.R. prevailed.

[40] [1918] A.C. 717; followed in this State in Jelbarts v. McDonald - see fn. [.

41] [1951] Ch. 10.

[42] See above at para.[[].

43] See above at para.[[] fn. and at para.[].

44] Orlit Pty. Ltd. v. J.F. & P. Constructing Engineers Pty. Ltd. (Queensland Court of Appeal, 9 August 1993, unreported), per Davies, J.A. and Shepherdson, J. at p.3.

[49] In addition the words of the order were accurately quoted in direct speech: "costs of this action" (emphasis added).

[50] Para. 62/9/11 - see fn. [ above. See also below at para.[].

51] 1926 edition p.1291; 1940 edition p.1427. The comparison is with Stumm v. Dixon.

[52] 1926 edition p.1357; 1940 edition p.1464.

[53] See 1940 edition at p.1464: cf. p.1427. Although Mr. Williams, Q.C. in the preface to the first volume of the first edition of his Practice of the Supreme Court of Victoria (1964) acknowledged his use of the last (1940) edition of the Yearly Practice, no reference to Kelly's Directories or any related practice may be found in any of the editions of his work, now known as Civil Procedure - Victoria.

[54] Vol. 1 p.1045. The authority for the proposition appears in the footnote as primarily Kelly's Directories, but there is also reference to another case of Mulkern v. National etc. "(Times, July 17)". But when the latter case was heard and precisely what happened is unknown to me, for I have been unable to find any other reference to the case.

[57] Another reference to Kelly's Directories in a work of general reference, namely Halsbury's Laws of England is limited to a brief comment under the subjects of "co-defendants" or "joinder" in the volumes on "Practice and Procedure" (2nd ed. Vol. 26 pp.98-99 (fn. c), 3rd ed. Vol. 30 p.318; 4th ed. Vol. 37 p.165 para.219), where it is simply asserted that an order against an unsuccessful defendant for costs of the action was held in Kelly's Directories to include costs incurred in pursuing a second successful defendant.

[59] See p.77. Examples of various Chancery Division orders for apportionment are given at pp.78-79.

[60] At p.78. The authors also state: "Where the plaintiff discontinues against one defendant and succeeds against the other, the plaintiff cannot recover the costs 'thrown away'." For this Stumm v. Dixon at 533 is cited.

[65] Para.62/9/11. Repeated in identical terms in 1999 edition at para.62/B/125.

[66] There followed notes as to the specific outcome in a number of cases such as Dunn v. Northey and Korner v. H. Korner & Co. as previously appearing.

[72] The paragraph describes the practice relating to the making of Bullock and Sanderson orders.

[73] There follows a reference to the relevant paragraph of the 1995 Supreme Court Practice and to Korner v. H. Korner & Co.

75] See Supreme Court Act 1986 s.24.

[76] See the careful explanation of how the principle works out in practice in the judgment of Dixon, J. in Smith v. Madden [1946] HCA 19; (1946) 73 C.L.R. 129.

[77] It is not necessary here to examine the practice as to costs of a claim based on a single cause of action brought against defendants in the alternative, although for conformity's sake the practice here discussed ought to be preferred.

[78] [1999] VSCA 99; [1999] 2 V.R. 353 at paras.67-68.

[79] It is unnecessary to consider the effect of the fact that the charge dated 13 March 1987 was given by one only of the two joint proprietors.

[80] The solicitor for Mr. Dimos told the judge after delivery of judgment on 22 December 1997 that the moneys were in fact held in a joint bank account in the name of both parties, but this seems from the affidavit of Mr. Willetts to which Tadgell, J.A. has drawn attention in fn.8 to have been a misapprehension.

[81] The first caveat is misnumbered, following the originating motion, but the error, which could readily have been corrected, has been overlooked.

[82] This seems to have been done only for conformity when the first statement of claim was filed on 4 November 1991. In his amended statement of claim filed 21 August 1997 Mr. Willetts made a substantive claim against the Registrar.

[83] Hungerfords v. Walker [1989] HCA 8; (1989) 171 C.L.R. 125.

[84] His Honour's judgment as authenticated does not expressly dismiss the counterclaim or give judgment on it for Mr. Willetts, but its dismissal is necessarily inherent in the granting of relief to Mr. Willetts.

[85] "Land" was defined in s.4(1) as including an interest in land, which, by s.74(2), a registered mortgage conferred.

[86] His Honour included the reference to the "basis" of settlement in the first of the sub-paragraphs which follow, but Mr. Willetts' evidence makes it clear that the "basis" of settlement was constituted by the subject matter of both sub-paragraphs.

[87] I respectfully consider that this is somewhat of an extrapolation from Mr. Eganides' evidence in cross-examination.

[88] But, as appears below, the point had been abandoned.

[89] The Act is described as the 1958 Act in the authenticated order and the reasons, but the period of time in question and the section number make it clear that the reference should be to the 1986 Act. A reference in the reasons to 1988 seems a slip for 1986.

[90] [1975] VicRp 72; [1975] V.R. 723 at 730-731.

[91] Nor was the authenticity of the caveats, which were the subject of a notice to admit, disputed by Mr. Dimos, though it may be arguable whether the notations are to be taken as included, particularly where the second page of one of the caveats does not, to judge from the Appeal Book, appear to have been reproduced in the notice to admit.

[92] Cf., for instance, Coulton v. Holcombe [1986] HCA 33; (1986) 162 C.L.R. 1 and University of Wollongong v. Metwally (No.2) (1985) 59 A.L.J.R. 481 at 483.

[93] where Mr. Erlich could not reasonably be supposed to have had any recollection.

[94] where the supplier of information could not with reasonable diligence be identified.

[95] [1971] 1 N.S.W.L.R. 713 at 721.

[96] [1998] 3 V.R. 485 at 486-487 and 497. In that case evidence of normal, rather than invariable, practice was held to be sufficient.

[97] For ease of reference I describe the reasons by the letter of the subparagraph in which they are set out two paragraphs earlier.

[100] Indeed, by s.3 of the Australian Postal Corporation Act 1989, in that Act such an impression was so treated, for "postage stamp" was defined as including an imprinted or printed mark, label or design authorised by Australia Post for the purpose of paying postage for a postal article.

[101] Under s.32(1)(a) and (2)(d) of the Act referred to in the immediately preceding footnote. Compare s.32A as to bulk interconnection service.

[102] Compare as to inferences Holloway v. McFeeters [1956] HCA 25; (1956) 94 C.L.R. 470 at 480-481, citing Bradshaw v. McEwans Pty. Ltd. (unreported, High Court, 27 April 1951).

[103] Compare Steinberg v. FC of T [1975] HCA 63; (1975) 134 C.L.R. 640 at 684.

[104] [1964] VicRp 91; [1964] V.R. 709 at 712.

[105] See also Ex parte Little (1958) 58 S.R.(N.S.W.) 173; Wilson v. Moir [1916] N.Z.L.R. 480 at 481; and cf. Gunn v. Land Mortgage Bank (1890) 12 A.L.T. 49. The terms of s.113(7)(c) furnish strong support for this interpretation. Further, as counsel in fact mentioned, the Registrar requires certainty, which the sufficiency of sending affords.

[107] Geelong Building Society (In liq.) v. Encel [1996] VicRp 44; [1996] 1 V.R. 594 at 602-608.

[108] Compare Williams, Civil Procedure - Victoria, para.36.01.255 and Charlick v. Foley Brothers Ltd. [1916] HCA 27; (1916) 21 C.L.R. 249, though see Lee v. Irons [1958] VicRp 71; [1958] V.R. 436 at 449.

[109] Williams, op.cit., para.[64.01.390].

[110] But a third party may in certain circumstances be able to rely on the Statute as having been "charged" upon the contract: Voumard, Sale of Land - Victoria, loose-leaf 5th edn., para[2070].

[111] [1924] A.C. 196 at 200-201.

[112] [1963] VicRp 67; [1963] V.R. 465 at 468 and 473.

[113] [1984] VicRp 40; [1984] V.R. 483.

[114] That order was not expressed to provide that the sum of $20,000 together with any "interest thereon" be held in trust.

[115] Compare Stroud's Judicial Dictionary, 5th edn., s.v. "Recover"; The Oxford English Dictionary, 2nd edn., s.v. "Recover" (verb 1), sense 5; and Garner, A Dictionary of Modern Legal Usage, 2nd edn., s.v. "Recover back".

[116] [1962] S.L.T. 288.

[117] Clarke v. Foodland Stores Pty. Ltd. [1993] VicRp 81; [1993] 2 V.R. 382 at 396; see also David Leahy (Aust.) Pty. Ltd. v. McPhersons Ltd. [1991] VicRp 77; [1991] 2 V.R. 367.

[118] (1886) 18 Q.B.D. 295 at 301 per Lindley, L.J. and 302 per Lopes, L.J.

[119] [1988] 1 Qd.R. 214 at 229-233, where the cases are discussed and a possible exception recognised where the trustee has defaulted by misappropriating trust moneys. The proposition in the text appears also in Halsbury's Laws of Australia, vol.27, Trusts, para.430-65, and none of the exceptions there stated is applicable.

[120] I have considered whether "creditor" might mean "judgment creditor", but the Division in which s.58 occurs is dealing with the position immediately before judgment is authenticated in contrast to Division 7 (s.101). Moreover, Mr. Dimos is not, as would seem to be necessary in the context of judgments, a judgment debtor in respect of the $20,000.

[121] For this the use of the word "debt" is not significant.

[122] It was not suggested in argument for Mr. Willetts that the order could be supported under s.60(1) or otherwise.

[123] [1993] HCA 13; (1993) 113 A.L.R. 637 at 638-639 and (more definitely) at 642.

[124] Because the question whether leave should be granted had been argued before us and because, I consider, leave should be given, it was not necessary to invite submissions on whether s.17A(4)(b) applies.

[126] (1992) 8 W.A.R. 285 at 294-295.