Federal Court of Australia

Albarran, in his capacity as liquidator of State Road Constructions (in liquidation) v Ferrazzano (No 3) [2025] FCA 1026

ORDERS

THE COURT ORDERS THAT:

1.    Order 9(c) of the first orders made on 30 June 2025 be vacated.

2.    As between the Plaintiffs and the Second, Third and Fifth Defendants:

(a)    there be no order as to costs up to and including 16 June 2025; and

(b)    thereafter, the Plaintiffs pay the costs of the Second, Third and Fifth Defendants.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

CHEESEMAN J:

1    These reasons concern costs orders made following the inter partes return of freezing orders made ex parte against the Third Defendant and the Fifth Defendant and which impacted the Second Defendant: Albarran, in his capacity as liquidator of State Road Constructions (in liquidation) v Ferrazzano [2025] FCA 730. Familiarity with my earlier judgment is assumed for the purpose of these reasons.

2    On 30 June 2025, I made orders providing that, amongst other things, the Plaintiffs pay the costs of the Second, Third and Fifth Defendants (Matar Defendants) and that any party seeking costs orders in lieu of those orders take steps to relist the proceeding within seven days.

3    On 7 July 2025, the Plaintiffs notified the Court that in lieu of the costs order made on 30 June 2025 it sought that there be no order as to costs between the Plaintiffs and the Matar Defendants. I then made orders providing for the provision of written submissions in response from the Matar Defendants and for the decision to be determined on the papers. In their written submissions, the Matar Defendants proposed that there be no order as to costs prior to 31 May 2025 (being the date of the return of the remaining four vehicles) and that thereafter the current costs order stand.

4    The principles relating to the Court’s broad discretion under s 43(2) of the Federal Court of Australia Act 1976 (Cth) to determine appropriate costs orders are well-established. The discretion must be exercised judicially: Northern Territory v Sangare [2019] HCA 25; 265 CLR 164 at [24] (Kiefel CJ, Bell, Gageler, Keane, and Nettle JJ). There was no issue between the Plaintiffs and the Matar Defendants as to the applicable principles. The dispute was confined to the proper application of those principles in the context of the present procedural history.

5    I will not recite in detail in these reasons the whole of the procedural history other than to highlight relevant events. Although the proceeding was only commenced in April 2025, it has had a somewhat chaotic history with multiple amended originating processes and adjourned hearings before three different duty judges. Relevantly the fourth version of the amended originating process (described as the Second Further Amended Originating Process) was lodged on 19 May 2025 and on 23 May 2025, an interlocutory application seeking additional relief was lodged. The interim relief which was the subject of those applications was delayed at the plaintiffs’ request and eventually heard ex parte before Lee J, sitting as Commercial and Corporations duty judge, on 16 May 2025 (First Ex Parte Hearing) and before Derrington J, sitting as Commercial and Corporations duty judge, on 23 May 2025 (Second Ex Parte Hearing).

6    A further interlocutory application was filed on 13 June 2025. In substance, although a further interlocutory application was filed, the issues which were ventilated were in the nature of a contested inter partes return of the interlocutory relief that had been obtained following the earlier ex parte hearings. The inter partes return was heard on 16 June 2025 (First Return Hearing) and continued on 24 June 2025 (Second Return Hearing). Prior to the First Return Hearing, the Matar Defendants were in default of the requirements in the freezing order made on 23 May 2025 to file and serve affidavits in relation to asset disclosure and the whereabouts of the remaining vehicles. Each of the Matar Defendants served the relevant affidavits at around 11.42pm on 15 June 2025, the night before the First Return Hearing. The Plaintiffs accepted that notwithstanding their lateness, the Matar Defendants have belatedly complied with the disclosure orders.

7    At the First Return Hearing, the Matar Defendants sought to tender an affidavit of the Fifth Defendant, Mr Matar, affirmed on 15 June 2025 which addressed the circumstances surrounding the Matar Defendants’ possession of the vehicles and contained material over which an application under s 128A of the Evidence Act 1995 (Cth) was foreshadowed. Parts of the affidavit did not properly appear to be the subject of a claim for privilege. I ordered that the Fifth Defendant file an affidavit including such evidence over which a s 128A claim was no longer maintained and a revised confidential affidavit, at which point I would hear any application based on the protection contained in s 128A. On 18 June 2025, the Matar Defendants abandoned reliance on s 128A and filed an affidavit of Mr Matar over which no claim for confidentiality or privilege was made. This affidavit was relied upon at the Second Return Hearing. I am satisfied that there was no material prejudice to the Plaintiffs as a result of the Matar Defendants’ change in position on their s 128A claim.

8    Applying a broad-brush yet principled approach, it is appropriate that each party bear their own costs up to and including 16 June 2025, being the date of the Matar Defendants’ belated compliance with their outstanding obligations under the ex parte orders and the First Return Hearing. Thereafter, it is appropriate that costs should follow the event and the existing order should stand.

9    The Matar Defendants were substantially successful in discharging the freezing order which was obtained against them on an ex parte basis. They are entitled to recover that part of their reasonable costs in the period after the First Return Hearing by which time they had returned the second tranche of vehicles, complied with the disclosure orders made against them and been subjected to the execution of a s 530C search order obtained on the Plaintiffs’ application. See generally Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 at [67] (McHugh J); Les Laboratoires Servier v Apotex Pty Ltd [2016] FCAFC 27; 247 FCR 61 at [303] (Bennett, Besanko and Beach JJ). Notwithstanding the significant change in the landscape in relation to the Matar Defendants, the Plaintiffs continued to press for the continuation of the existing freezing orders and for other relief which they were not able to justify by reference to established principle. The Plaintiffs did not demonstrate any disentitling conduct on the part of the Matar Defendants following the First Return Hearing. The Plaintiffs’ continued pursuit of freezing orders against the Matar Defendants after the First Return Hearing was “highly speculative”: Albarran at [176] and [180]. Despite having the benefit of disclosures pursuant to Court order and the execution of a search order, the Plaintiffs did not adduce any evidence of the Matar Defendants dissipating or seeking to dissipate their own assets.

10    For these reasons, I will order that there be no order as to costs prior to and including 16 June 2025 and thereafter, costs should follow the event.

Associate:

Dated:    26 August 2025

SCHEDULE OF PARTIES