ASIC v Rangwala and Go Markets Pty Ltd (Costs) [2014] NSWSC 1092

Supreme Court New South Wales

Medium Neutral Citation: ASIC v Rangwala and Go Markets Pty Ltd (Costs) [2014] NSWSC 1092 Hearing dates: On the papers Decision date: 15 August 2014 Jurisdiction: Equity Division - Corporations List Before: Bergin CJ in Eq Decision: ASIC is to pay the defendants' costs of the costs application Catchwords: COSTS - application for costs of a costs application Legislation Cited: Corporations Act 2001 (Cth) Cases Cited: ASIC v Rangwala and Go Markets Pty Ltd [2014] NSWSC 961 Category: Costs Parties: Australian Securities and Investments Commission (Plaintiff) Soyeb Roshanali Rangwala (2nd Defendant) Go Markets Pty Ltd (5th Defendant) Representation: Counsel: DR Stack (Plaintiff) N Lucarelli QC/P Walsh (Defendants) Solicitors: K Turner (ASIC) (Plaintiff) Holley Nethercote (Defendants) File Number(s): 2013/317013 Publication restriction: Nil

Judgment 1This is an application for the costs of a costs application heard on 7 July 2014 in which orders were made on 21 July 2014: ASIC v Rangwala and Go Markets Pty Ltd [2014] NSWSC 961. 2In May 2013 the Australian Securities and Investments Commission (ASIC) commenced an investigation into suspected contraventions of the Corporations Act 2001 (Cth) (the Act) by a group of companies, including Go Markets Pty Ltd (Go Markets). Mr Rangwala is a director of Go Markets, as well as its Chief Financial Officer. 3On 21 October 2013 ASIC obtained ex parte freezing orders against Go Markets and Mr Rangwala and a travel restraint order pursuant to s 1323 of the Act against Mr Rangwala. 4On 10 April 2014 the orders against the defendants were vacated by consent and the issue of costs was reserved. The defendants' contention at the costs hearing on 7 July 2014 was that ASIC had 'surrendered' and as such should pay their costs of the proceedings. ASIC contended that the concepts of 'success' and 'winning' did not apply to cost disputes arising from s 1323 orders, given the unusual facilitative nature of such orders. It submitted that each party should bear their own costs. On 21 July 2014 the following orders were made: 1. ASIC is to pay the applicants' costs of the proceedings from 20 March 2014 to 10 April 2014 inclusive. 2. Otherwise the parties are to pay their own costs of the proceedings. 5The basis of the costs order against ASIC for the period 20 March 2014 to 10 April 2014 was that it was "unreasonable" for the defendants to have been put to the incursion of additional costs in preparing to apply for the discharge of the orders: ASIC v Rangwala and Go Markets Pty Ltd at [100]. 6The orders of 21 July 2014 made provision for the filing of written submissions regarding the costs of the application, in the event that the parties were unable to agree on a costs order. As the parties could not reach agreement, the defendants filed written submissions on 4 August 2014 and ASIC filed written submissions on 7 August 2014. 7The defendants seek an order that ASIC pay their costs of and incidental to the application of 7 July 2014. They submit that the normal rule that costs follow the event should apply. The "event" relied upon is that ASIC was ordered to pay the defendants' costs for the period from 20 March to 10 April 2014. 8ASIC seeks an order that the defendants pay 75% of its costs of the application for costs. ASIC submitted that it was substantially successful in the application because the defendants sought costs for the entire proceedings, but only recovered costs for the stated period. 9It is true that the defendants had also sought additional costs, which they were not awarded. However, that does not alter the fact that a costs order was made in their favour, contrary to ASIC's submission that each party should bear its own costs. In the circumstances I am not satisfied that this is a case in which I should apportion costs. ASIC's position forced the defendants to go to the expense of putting on an application in order to recover costs to which they were found to be entitled. 10I order that ASIC pay the defendants' costs of the costs application. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 August 2014