Is a Lender entitled to contracual legal cost?

[jumper999]

I have started this thread and would like as many as possible to comment on the case below please.

Gomba Holdings (UK) Ltd -v- Minories Finance Ltd (No 2) [1993] Ch 171

http://freelegalweb.org/201/2009/03/...ing-landlords/


As I believe that lenders are using this case law to win legal costs (separate to their solicitors costs in repossession claims against borrowers) to win and claim that they are entitled to add legal costs to peoples loans as it states in their agreement and they are using their contractual right and the above case law to win.

Any input would be great and opinion on this please.

[jumper999]

Re: Is a Lender entitled to contracual legal cost?

I was wandering if there was any case law that overrides the about judgement?

I was thinking as the case relates to a Landlord and Tenant....a would that same rule apply to lenders and borrowers?

[jumper999]

Re: Is a Lender entitled to contracual legal cost?

Standard Chartered Bank (Hong Kong) Ltd v Sweetmart Garment Works Ltd (unrep., HCA 1807/2005, [2010] HKEC 1071)

August 20, 2010 in Case Law, News & Analysis | Tags: Costs, Guarantee, Indemnity | by cobe |




In an action by the Plaintiff bank against the guarantor, the Court upheld the guarantee and found in favour of the Plaintiff, with an order nisi that the Plaintiff was to have the costs of the action, to be taxed if not agreed. The Plaintiff brought an application to vary the costs order nisi that declined the Plaintiff’s request that costs be awarded on an indemnity basis, in reliance of a contractual provision under the Guarantee which provided for indemnity costs to be paid to the Plaintiff bank in recovery of moneys due to it. The Plaintiff also argued that the Court should certify the case as being fit for two counsel.


The Honourable Mr. Justice Stone declined to follow the English decision in Gomba Holdings (UK) Ltd v Minories Finance Ltd (No. 2) [1993] Ch 171, which was cited for the principle that the discretion of the Court in making costs orders should normally be exercised to reflect a contractual right to costs, if any. The Court formed the view that the exercise of the court’s jurisdiction as to costs cannot be fettered by any contractual costs provision. In the absence of any frivolous, unarguable and wholly unsustainable points raised by the Defendant, the Court perceived no basis to depart from the usual order that the losing party is to pay the other party’s costs on the normal “party and party” basis and dismissed the Plaintiff’s application to vary the order nisi.



Turning to the issue on whether there was a requirement for a judge to give a certificate for two counsel for their costs incurred in a High Court open trial to be allowed in taxation, the Court held that the post-Civil Justice Reform position was that no costs were to be allowed in respect of the appearance of two or more counsel before a High Court judge in open court unless the judge has certified such attendance as proper, pursuant to paragraph 2(3) of Part II of the First Schedule to O.62 under the Rules of the High Court of Hong Kong (Cap.4A, Sub.Leg.). In relation to costs of proceedings other than attendance in court, such costs, in the absence of a court order allowing two counsel on taxation, remain a matter of the taxing master’s discretion. In the present case the Court certified the trial to have been fit for two counsel.


Hong Kong Dispute Resolution Bulletin: For full analysis of this case subscribe to the Sweet & Maxwell HKDRB, produced in association with Clifford Chance.
This article is available in [2010] 7 HKDRB.