PropertyShares Holdings Pty Ltd v Ujma (No 2)
[2017] VCC 588
•17 May 2017
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CI-16-05750
| PROPERTYSHARES HOLDINGS PTY LTD | Plaintiff |
| v | |
| MATEUSZ UJMA & ORS | Defendants |
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JUDGE: | HIS HONOUR JUDGE COSGRAVE | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | On the papers | |
DATE OF RULING: | 17 May 2017 | |
CASE MAY BE CITED AS: | PropertyShares Holdings Pty Ltd v Ujma (No 2) | |
MEDIUM NEUTRAL CITATION: | [2017] VCC 588 | |
RULING NO.2
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr A Purton | Pelham Lawyers |
| For the First and Third Defendants | Mr B Skinner (solicitor) | Evans Ellis Lawyers |
HIS HONOUR:
Nature of application
1 This ruling concerns the question of costs in relation to the defendants’ application to vary the freezing order made initially against the first defendant (“Ujma) and the third defendant (“Consilium”) on 22 December 2016.
Procedural history
2 On 22 December 2016, the plaintiff (“PropertyShares”) filed a summons seeking a freezing order against Ujma and Consilium on an ex parte basis. Subsequently, the matter has returned to Court on 5 January 2017, 16 February 2017, 31 March 2017 and 28 April 2017.
3 On 30 March 2017, Ujma and Consilium gave written notice that they intended to make application for the freezing order to be set aside at the hearing scheduled for 31 March 2017.
4 On 31 March 2017, Ujma and Consilium, instead of pressing ahead with their foreshadowed application, sought a timetable for the exchange of affidavits and submissions regarding the application to set aside the freezing order. Orders were duly made providing such a timetable.
5 On 28 April 2017 at the hearing before me, Ujma and Consilium sought to vary the freezing order rather than have it set aside.
6 On 2 May 2017, I gave reasons in which I held that the freezing order should remain in effect until trial or further order.
Application
7 The plaintiff argued that the usual rule regarding costs was that they follow the outcome of the application. This rule was said to be grounded in fairness and policy and operated irrespective of which party was successful.
8 Ujma and Consilium submitted that the costs of their unsuccessful application to vary the freezing order should be reserved. As best as I can understand their submissions, they say that such an order is justified for the following reasons:
(a)while the plaintiff carries the burden to justify the initial imposition or continuation of a freezing order, a defendant to such an order, pursuant to the liberty to apply provision routinely found in such orders, is entitled to seek to have the order varied or set aside. If there are adverse costs consequences where a defendant makes an unsuccessful application to vary or set aside such a freezing order, then it would discourage defendants to make such applications and the freezing order would thereby operate in a manner more onerous and burdensome than it currently does.
(b)while plaintiffs who obtain a freezing order are, usually as a matter of routine, required to give an undertaking as to damages, the imposition and continuation of a freezing order is liable to cause a defendant considerable hardship. If it is ultimately found the freezing order ought not to have been made, it is said that a defendant would face difficulties in calling upon the undertaking as to damages. It was submitted that it would be odd if a defendant who ultimately succeeded at trial, and thereby established that the freezing order was at all times wrongly granted, should simultaneously be liable to the plaintiff for the costs of unsuccessfully seeking to have the freezing order varied or set aside at an earlier time.
9 In my view, neither of the arguments advanced by Ujma and Consilium is compelling.
10 In civil litigation, litigants have a range of interlocutory applications which they might make in order to enforce their alleged rights against the opposite party. When such applications are made and fail, the general rule is that the costs in respect of the application follow the event. This means that, usually, the unsuccessful party will pay the costs of the successful party. It seems to me that this principle is of wide application and no relevant distinction is to be drawn, for example, between an unsuccessful strike-out application, a discovery application and an application to vary a freezing order. The making of a costs order in the present context against Ujma and Consilium does not make the exercise of the “liberty to apply” provision more onerous or burdensome than it otherwise would be. There is no obligation upon a defendant to seek the setting aside or variation of a freezing order. If such an application is made and fails, the usual rule about costs should generally apply unless there are special circumstances.
11 With respect to the second argument, in my view, Ujma and Consilium are confusing the ultimate disposition of the case with the outcome of an interlocutory hearing before trial. The fact that a litigant might prove ultimately successful at trial and entitled to his costs of the proceeding does not mean that the court should reserve the costs of interlocutory disputes before final judgment is given to make sure that those costs orders align with the ultimate outcome at trial. The interlocutory hearings and the trial judgment are two different things.
12 In the circumstances, I see no reason why the usual rule should not apply, and accordingly Ujma and Consilium should pay the plaintiff’s costs of the application.
Conclusion
13 In summary, I order that:
(a)The freezing order made against Mateusz Bartlomiej Ujma and Consilium Group Pty Ltd on 22 December 2016, as extended on 5 January 2017 and 16 February 2017, is to remain in effect until the hearing and determination of the proceeding or until further order.
(b)The first and third defendants pay the plaintiff’s costs of the defendants’ application to vary the freezing order, such costs to be taxed on a standard basis in default of agreement.
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