Summary

Mortgagor's right to have mortgagees' costs taxed. Mortgagor's right to challenge mortgagee's costs.

Facts

Appeal by plaintiff mortgagors and cross-appeal by defendant mortgagees as to a decision that the plaintiff mortgagors were not entitled to challenge items in the mortgagees' account on the ground that they were unreasonable.

Held

Both litigation costs and non-litigation costs might be challenged and referred to a taxing master to decide the correct amount. His discretion should usually be exercised so as to reflect contractual rights. The power to disallow costs was one derived from the courts of equity. A decision to refuse costs might be exercised under s.51 Supreme Court Act 1981. Mortgagors could object as to costs being unreasonably incurred or being unreasonable in amount. The burden of proof would be on them and any doubts resolved in favour of the mortgagees.In the present appeal the defendant mortgagees had a contractual right to retain out of the mortgage funds in hand their costs, charges and expenses including the receiver's remuneration on an indemnity basis. The fixing of the receiver's fees at an unreasonably high level could be dealt with by the Chancery Master and a separate action was unnecessary. Parker-Tweedale v Dunbar Bank plc & Ors (No.2) (1990) referred to.

Appeal and cross-appeal allowed in part.