Reserved Costs of Interim Applications

Reserved costs of freezing and search order applications require the trial judge to consider overall justice, including trial outcomes. Successful applicants do not automatically recover costs where the respondent ultimately prevails, particularly where the application primarily targeted another party.

Where costs of a contested interim application (such as for a freezing or search order) have been reserved to trial, the ultimate success or failure of the underlying claim remains a relevant factor for the trial judge when making the final costs order on that application. The general guidance that the unsuccessful respondent to an interim application should pay the applicant’s costs is not an inflexible rule in such circumstances. [16-19, 52]
A party’s failure to comply with its disclosure obligations, evidenced by the discovery of undisclosed relevant documents during the execution of a subsequent search order, is a relevant factor in the conduct of the parties that can be taken into account when determining costs, notwithstanding the prior provision of a signed disclosure certificate. [31, 64]
In determining the costs of a search order, the court may consider whether the applicant would have sought such a draconian order against a particular respondent had the claim been against that party alone, or whether the primary target was another party. This can affect the justice of ordering that respondent to pay the associated costs. [53-54, 60]
Where an applicant for a freezing injunction relies on a flawed investigative report to support the existence of undisclosed assets, and this aspect of the application fails, it may be appropriate to reduce the costs recoverable from the respondent proportionately. If the applicant’s continued reliance on such evidence is unreasonable, it may also justify an order for the applicant to pay a proportion of the respondent’s costs of resisting that aspect, potentially on the indemnity basis. [88, 91, 96, 100, 108-112]
The court may make a ‘cross-order’ for costs on a single interim application, whereby each party is ordered to pay a proportion of the other’s costs, to reflect the fact that each party achieved a measure of success and failure on different aspects of the application. [108, 122-123]