(1) The report does not explicitly state that the only items by reference to which deductions were made from the plaintiff's bill of costs are those set out in par 10 of the report. That paragraph does not state, nor does any other paragraph state, that the objections specified in that paragraph are the only criteria by reference to which deductions have been made by the referee from the plaintiff's claim.
(2) As I have already stated, at least one of the items in par 10 of the report is an item of agreement rather than of dispute.
(3) The language of a number of items in par 10 is so economical that I was unable to tell whether or not any deduction had been made from the plaintiff's claim pursuant to the subject matter of those items. Those items include item (ii). I could not tell whether any deduction had been made in respect of GST on any items. When I asked the defendants' counsel if he knew whether any such deduction had been made, he frankly replied that he did not know. Similarly, in item (iv) the referee reveals that he has taken into account objections relating to consecutive attendances, but I find it very hard to tell whether any amounts were disallowed for that reason. Again, the defendants' counsel could not assist me.
(4) No quantification is made of the total amount deducted in respect of any of the items set out in par 10, nor is any calculation exposed which would permit it to be concluded that it was only by reference to the sum of the deductions calculated under those items that the reduction was made from the plaintiff's claim to the amounts in fact allowed. The exercise does appear to have been done by reference to precise amounts of dollars and cents rather than to any rounded figure. Contrast the very round figure of $50 million in which Einstein J made a global order for costs in Idoport . But the way in which the assessor progressed from the figures claimed to the amounts allowed is not exposed.
19 In those circumstances, despite the Court's general predilection to adopt referees' reports, I have come to the conclusion that the referee's process of reasoning or calculation resulting in the figures assessed has not been sufficiently exposed to satisfy the criterion for validity set out in item (11) in McDougall J's list in Banabelle.
20 For that reason, I propose to remit the report to the referee for further consideration and further report specifying the calculation as a result of which the referee reduced the amounts claimed to each of the sums of $46,887.18 and $78,638.13 allowed by him in answer to the first and second questions posed. In carrying out this exercise, the referee should specify the total amount deducted by him by reference to each of the items in par 10 of the report which led to a deduction being made. If other deductions were made by him, the referee should specify the ground and amount of those deductions, at least by category.
21 The report will be remitted to the referee for a further report in accordance with these reasons for judgment.
(3) Should the finding that the amount of $31,683.17 claimed for R&W's agency fees was unreasonably incurred be rejected?
22 A finding of a referee on a matter of fact should not be rejected unless there is "patent misapprehension of the evidence or perversity or manifest unreasonableness in fact finding": Banabelle principle (6). The evidence before the referee is not to be examined unless "it is seriously and reasonably contended that the referee has reached a decision which no reasonable tribunal of fact could have reached; that is, a decision that any reasonable referee would have known was against the evidence and weight of evidence": Banabelle principle (13).
23 Here, the plaintiff has been seriously contended that there was no evidence which would support the referee's finding that R&W's fees were unreasonably incurred. In those circumstances it is appropriate that I examine the evidentiary material before the referee relevant to this finding. That material is contained in Exhibit A.
24 The referee's language in his finding as to the matters taken into consideration on this factual issue is again economical. He does refer to the plaintiff's submissions and the defendants' objections "on this aspect". He also states that he "took into account the decisions in the matter" of Barr J on 16 May 2005 and Hoeben J on 26 July 2005. He says that, in coming to his conclusion, he had regard to the matters before their Honours and to those judgments. Whilst he did not advert to it in the relevant portions of his report, it is also clear from par 7(xvii) and (xviii) of the report that he had before him the affidavit of James Socrates Arkoudis sworn 12 September 2005 and a copy of correspondence between the parties.
25 Stated briefly, the facts revealed by the relevant material before the referee are as follows. To simplify matters, I trace the facts as they relate to Common Law proceedings 10927/05, without reference to the similar facts in the Equity proceedings. The loan secured by the mortgage was $1 million lent on 3 December 2004 by the plaintiff to Blue Quay Pty Ltd. The term of the loan was until 3 September 2005. Interest was to be paid monthly on the 3rd of each month. The interest of $16,667 due on 3 March 2005 was not paid on that day, but was paid eight days later, on 11 March 2005. It was deposed that there was a telephone conversation in which it was agreed that, if the payment were made on or before 11 March 2005, penalty interest need not be paid. Four days after the payment of the $16,667, on 15 March 2005, the statement of claim in proceedings 10927/05 was filed. The statement of claim concedes that the interest due on 3 March was paid after the due date at the concessional rate, but alleges that the mortgage remained in arrears. In the statement of claim, the plaintiff claims an order for possession of the property and judgment for $1 million plus interest.
26 On 1 April 2005, a defence was filed pleading the absence of a statutory notice under s 57 of the Real Property Act 1900 in respect of the alleged monetary default before the proceedings were commenced. Also on 1 April 2005, the plaintiff's solicitors engaged real estate agents to organise an auction for 18 May 2005 and to prepare a marketing plan. On 11 April 2005, the plaintiff's solicitors wrote to Lachlan Gyles of counsel asking for advice as to whether the acceleration notice that they had served was valid, bearing in mind that a s 57 notice had not been served; to settle an enclosed draft s 57 notice; and to draft, if deemed appropriate, a summary judgment application in proceedings 10927/05. This letter thus conceded the defence as filed.
27 On 3 May 2005, the plaintiff filed an amended statement of claim alleging a non monetary breach of the mortgage and the defendant subsequently filed an amended defence. On 13 May 2005, the defendant filed a notice of motion for an injunction restraining the exercise of the power of sale. That motion was what was heard and determined by Barr J on 16 May 2005. His Honour in his judgment summarised the facts, restrained the plaintiff from exercising its power of sale and ordered that the plaintiff remove all signs erected on the property. On 18 May 2005, R&W sent to the plaintiff their invoice for $31,683.17, being the amount claimed in respect of auction fees pursuant to cancellation of their instructions. On 24 May 2005, the plaintiff filed a notice of motion seeking dissolution of the injunction granted by Barr J. That motion was heard by Hoeben J on 25 July and, on 26 July 2005, his Honour delivered his judgment referred to in [24] above dismissing the plaintiff's notice of motion, so that the injunction remained in force.
28 Application was made by the plaintiff for summary judgment in the proceedings. This application was heard by Macready AsJ, and, although his Honour's judgment is not adverted to by the referee, there was before the referee the order by which his Honour dismissed the summary judgment application on 28 July 2005.
29 These were relevant facts that were before the referee when he made his finding that R&W's fees had been unreasonably incurred. It is not for the Court to decide whether or not it would have made a similar finding, but the referee's finding can be rejected only if no reasonable referee could have come to the decision on the facts before the referee as outlined above. I am of the view that the Court cannot conclude that no reasonable referee could have found that the incurring of these fees was unreasonable. The plaintiff acted hastily in a situation of great uncertainty as to whether the power of sale had been enlivened and incurred a very large amount of fees in a short time. I refuse to reject the referee's finding in this regard.
30 In those circumstances, the only basis on which the report will be remitted to the referee is as set out in [20] above.