Cancrie Investments Limited v Zulfiqur al Tanveer Haider (Costs)
[2024] EWHC 2302 (Comm)
Mark Reynolds & Anor v Priyesh Parekh (Re SP Commodities Limited)
29 October 2024
[2024] EWHC 2747 (Ch)
High Court
A company got a court order to freeze a former director's assets. The director fought the order but lost because he didn't have enough evidence. The judge made the director pay the company's legal costs because he was difficult and didn't cooperate. This is different from other types of court orders where the costs decision might wait until the main case is finished.
Key Facts
- •SP Commodities Ltd (in liquidation) brought misfeasance proceedings against Priyesh Parekh, a former director.
- •Parekh changed solicitors and claimed illness, causing an adjournment of the trial and incurring wasted costs.
- •Applicants (liquidators) applied for a freezing order against Parekh due to concerns about asset dissipation.
- •Parekh failed to respond to notices and communications regarding the freezing order.
- •Substituted service was required due to Parekh's non-responsive behavior.
- •Parekh opposed the freezing order at hearings before multiple judges but lacked sufficient evidence.
- •The court considered the costs of three separate hearings related to the freezing order application.
- •The case references the recent decision in Dos Santos v Unitel SA [2024] EWCA Civ 110 regarding costs of contested interlocutory applications.
Legal Principles
The general rule for costs of contested interlocutory applications is that the losing party pays the costs if they contested the application vigorously.
CPR 44.2(2) and Dos Santos v Unitel SA [2024] EWCA Civ 110
Costs are typically reserved to the trial judge in American Cyanamid injunction cases due to the balance of convenience involved, but this doesn't apply to freezing orders.
Dos Santos v Unitel SA [2024] EWCA Civ 110
Freezing orders, even if ultimately unsuccessful, don't necessarily mean the initial granting of the order was incorrect if the three criteria for granting such an order were satisfied.
Dos Santos v Unitel SA [2024] EWCA Civ 110
Outcomes
The Respondent (Parekh) was ordered to pay the costs of all three hearings related to the freezing order application.
Parekh's evasive behavior, failure to communicate, and opposition to the order (though ultimately unsuccessful due to lack of evidence) justified the costs order. The court distinguished the case from American Cyanamid principles and applied the general rule for contested interlocutory applications.