A recent case involved an application by Perpetual Trust Limited (Perpetual) seeking orders directing or authorising a bank to pay Perpetual's costs, which were incurred in seeking to enforce Dorchester Finance Limited's (Dorchester) obligations to Perpetual under a trust deed.
Perpetual was the trustee of Dorchester's debt securities pursuant to a secured debenture trust deed (Trust Deed). Dorchester took advice about a deferred repayment plan and Perpetual engaged Deloitte to provide an independent assessment of the plan. Deloitte rendered a fee, which Perpetual wanted to pay and then recover from Dorchester under the terms of the Trust Deed. In a 2010 judgment, the High Court held that Perpetual was entitled to do so under the terms of the Trust Deed as a reasonably incurred expense. The High Court finding was upheld by the Court of Appeal and Dorchester was refused leave to appeal to the Supreme Court.
Dorchester did not pay the fee following this judgment, and so Perpetual entered into further litigation to recover the fee. The current case concerned whether Perpetual had reasonably incurred the costs relating to the proceedings and could therefore recoup its costs under the Trust Deed, and if so, whether Perpetual could claim those costs directly from Dorchester's bank account.
Justice Venning found that as Perpetual was entitled to recover the sum spent engaging Deloitte from Dorchester; they were reasonably entitled to incur costs to recover that sum when Dorchester refused to pay it. The Judge considered that it was Dorchester, rather than Perpetual, that had acted unreasonably. The Judge further held that, if necessary, Perpetual could recover the costs from Dorchester's account under the terms of the Trust Deed, or by application of section 108 of the PPSA.
See Court decision here.