ASIC v Rangwala and Go Markets Pty Ltd

Judgment 1In May 2013 the Australian Securities and Investments Commission (ASIC) commenced an investigation pursuant to s 13 of the Australian Securities and Investments Commission Act 2001 (Cth) (the ASIC Act) in respect of suspected contraventions of the Corporations Act 2000 (Cth) (the Act) in relation to the affairs of a number of companies including Go Markets Pty Limited (Go Markets), and in respect of former and current officers of various companies including Soyeb Roshanali Rangwala, a director of Go Markets. 2The investigation expanded in September 2013 and by October 2013 ASIC suspected that there may be contraventions by the various companies and/or individuals of sections of the Act including false trading and market rigging (s 1041C); false or misleading statements (s 1041E); inducing persons to deal (s 1041F); dishonest conduct (s 1041G); misleading or deceptive conduct (s 1041H); and falsification of books (s 1307). 3Go Markets is the holder of an Australian Financial Services Licence (AFSL). Its principal activity is the provision of an online trading platform to clients, general advice and execution only service for over the counter (OTC) derivative (OTC) products. Those products included Australian and international contracts for difference (CFDs) and margin foreign exchange (FX) contracts. ASIC was aware that Go Markets passed 100% of its trades to Enfinium Pty Ltd (Enfinium). ASIC believed that Go Markets, Enfinium and Vantage FX Pty Ltd (Vantage FX) (referred to together as the FX companies) were providers of online FX trading services to in excess of 12,000 clients. It was thought that the vast majority of those clients were Australian and a number of them were individuals as well as trustees of Self Managed Superannuation Funds. 4ASIC investigated the inter-relationship between the FX Companies and other companies both in Australia and offshore. The sole shareholder of Go Markets is 247 Capital Ltd (247 Capital) a company incorporated in Hong Kong. The shareholders of 247 Capital are companies incorporated in Hong Kong and the Republic of Seychelles. The sole shareholder in Enfinium and Vantage FX is Enfinium International Holdings Ltd (Enfinium International), a company incorporated in Hong Kong. The shareholders of Enfinium International are companies incorporated in Hong Kong, the British Virgin Islands, the Republic of Mauritius, Thailand and Samoa. 5ASIC became aware that the FX companies operated and promoted their businesses through websites and that each of them used the MetaTrader 4 trading platform (MT 4). MT 4 is software that can be licensed to a foreign exchange broker who provides it to their clients as a medium to conduct FX transactions online. The MT 4 software consists of a server component run by the broker and a client component that the client uses to see live streaming prices and charts. The client can use it to place orders as well as to manage their account. 6ASIC also became aware that MT 4 users are able to use a Virtual Dealer Plugin. ASIC was concerned that this could be used to delay a customer's order from anywhere from 1 to 5 seconds and also to prevent the customer from executing a profitable order by causing the trading system to generate any one of a series of "error" messages, blocking the customer's efforts to finalise what would have been a profitable order. ASIC understood that the Plugin could be used to intentionally delay a customer's order so as to induce "slippage". Slippage parameters set in the Virtual Dealer Plugin application dictate whether and at what price a customer's order is filled, depending on the size of the market move that occurs after placement but before execution of the order. ASIC understood that these parameters could be configured such that if the slippage were in the customer's favour, the customer's order is executed at the requested price instead of the better price effectively providing the savings to the broker. If the slippage is not in the customer's favour, the difference is then passed on to the customer so that the customer suffers the loss. 7ASIC identified 22 MetaTrader Log Analyser Daily Reports in the year 2011 which it analysed. From one of the examples of the log (not related to Go Markets or Mr Rangwala) ASIC was able to observe that the client had incurred a loss of USD$2,096.28 by reason of the intervention of the Virtual Dealer. 8ASIC suspected that the FX companies were using the Virtual Dealer Plugin software and were dishonestly causing their clients to lose funds from trades placed and/or making profits on clients trades which they kept themselves. This was but suspicion because ASIC had not inspected the various companies' records. 9One matter of significance to ASIC's investigation was that a company incorporated in Singapore, Go Financial Group Pte Ltd (Go Financial), that operated a bank account with Overseas Chinese Banking Corporation Ltd in Singapore (the Go Financial Account) had received USD$13,169,354.97 from Go Markets between 23 December 2009 and 30 September 2013. ASIC reviewed the various financial statements of the FX companies and believed that none, including Go Markets, had paid any dividends to their shareholders. It also believed that the only related party transactions that were disclosed in Go Markets financial statements was an amount of $100,000 which was received from Go Financial for the financial year ended 30 June 2010. ASIC was concerned that the financial statements did not record or explain the very large payments made to the offshore entities. It was also concerned that the monies transferred offshore may give rise to claims for compensation and/or damages against the various entities and/or the individuals who were involved in the transactions. ASIC was also concerned that the use of the Virtual Dealer Plugins may have caused loss to a number of their customers. 10As at October 2013 ASIC suspected that the FX companies, including Go Markets, and the individuals, including Mr Rangwala, were at various times and in various ways involved in the operation of the Virtual Dealer Plugin and the transfer of monies to the offshore entities. ASIC was concerned that the funds transferred by Go Markets and others might represent some or all of the profits that were generated by "the dishonest operation" of the Virtual Dealer software. Ex Parte Application - 21 October 2013 11On 21 October 2013 ASIC appeared ex parte before the Corporations List Judge seeking, inter alia, freezing orders against Go Markets and Mr Rangwala and travel restraint orders against Mr Rangwala under s 1323 of the Act. The Originating Process filed in Court on that day joined Mr Rangwala as the second defendant and Go Markets as the fifth defendant. It also joined Enfinium as the sixth defendant and Vantage FX as the eighth defendant. 12In the affidavit of Andrew Price sworn on 21 October 2013 in support of ASIC's application, it was claimed that Mr Rangwala was an Indian citizen, was currently living in Australia under a BB 155 Visa (a permanent return visa valid for five years) was married with two children and did not own real estate within Australia. This last matter was wrong. Mr Rangwala owned and lived in his family house in a suburb of Melbourne. 13ASIC informed the Court that it intended to serve Notices on the individual defendants, including Mr Rangwala, under s 19 of the ASIC Act for the purposes of examining them in order to further ASIC's investigation. It also informed the Court that ASIC, together with the Australian Federal Police, were planning to execute six simultaneous Commonwealth search warrants at six locations in NSW and Victoria on 22 October 2013. 14ASIC informed the Court that it had not sought access to the defendants' records because it was concerned that evidence may be destroyed. It also expressed concern that the defendants, including Go Markets and Mr Rangwala, may attempt to deal with their assets and transfer them out of Australia. It also expressed concern that Mr Rangwala (and others) may leave Australia, leaving ASIC unable to examine them and impeding customers' claims that may be brought against them. 15The Court granted the relief sought by ASIC on an interim basis and listed the matter again on 28 October 2013. Execution of Warrants 16Search warrants were executed on 22 October 2013 (including on Mr Rangwala's home and Go Markets' offices) after which ASIC conducted numerous interviews and examined a number of individuals under s 19 of the ASIC Act. Lawyers retained 17Go Markets and Mr Rangwala retained lawyers (Mr Timothy Dixon of Holley Nethercote in Melbourne) who then communicated with ASIC in relation to the allegations made against his clients. Mr Dixon telephoned Ms Baxter, a senior lawyer employed by ASIC, on 24 October 2013 and advised her that he did not understand what allegations were being made against his clients. Mr Dixon requested ASIC's agreement to a suppression order in respect of his clients' identity when the matter was next before the Court. Mr Dixon also discussed the carve out from the freezing order for Mr Rangwala's ordinary living expenses. Hearing on 25 October 2013 18On 25 October 2013 some of the other defendants including Enfinium, moved the Court for orders suppressing the identity of some of the defendants and the name of the proceedings. Orders were made that the proceedings continue in the name "In the matter of XY". The suppression orders in respect of Mr Rangwala and Go Markets was vacated on 10 April 2014 and in respect of other then active defendants on 26 May 2014. Hearing on 28 October 2013 19On 28 October 2013, the next occasion when the matter was before the Court, the relevant freezing orders in respect of Mr Rangwala and Go Markets were continued by consent as was the travel restraint order against Mr Rangwala. There were some amendments to the amounts the defendants could pay out of the bank accounts for their living expenses. There was also an order for the provision of a detailed affidavit setting out various matters including the assets and liabilities of the defendants and an itemised inventory of any and all property in which they had any legal or beneficial interest. ASIC agreed to file any further affidavits on which it intended to rely by 22 November 2013 and the matter was made returnable before the Corporations List Judge on 2 December 2013. There was also provision for Mr Rangwala and Go Markets to make any application to separate the proceedings against them from the proceedings against the other defendants when the matter was next before the Court on 2 December 2013. Section 33 Notice 20On 30 October 2013 Mr Dixon accepted service of a Notice under s 33 of the ASIC Act directed to Mr Rangwala from ASIC. There was a further s 33 Notice dated 4 November 2013 served in respect of Go Markets. Mr Dixon subsequently provided documents to ASIC in response on an ongoing basis. Meeting 11 November 2013 21On 11 November 2013 Mr Dixon attended ASIC's offices with Mr Rangwala and met with ASIC representatives. This was a meeting that was proposed by Mr Dixon on Mr Rangwala's and Go Markets' instructions for the purpose of providing documents to ASIC to explain the background to the payments of $13 million referred to above. 22Mr Rangwala produced to the ASIC representatives a large folder containing the underlying documents behind each transaction and setting out what was referred to by Mr Dixon as the "paper trail" of each of the transactions. The ASIC representatives retained the folder at the conclusion of the meeting and one of the investigators, Mr Cook, said that the information provided by Mr Rangwala would "save the investigation team many weeks and possibly months of work". Further Communications 23The next directions hearing on 2 December 2013 was the subject of communications between Mr Dixon and Ms Baxter during the latter part of November 2013. Mr Dixon had a conversation with Ms Baxter on 26 November 2013 in terms that included the following: Mr Dixon: From the material that we have got, there does not appear to be any case against either Go Markets or Mr Rangwala. On that basis we think that you should let us out of the proceedings. Ms Baxter: We are not going to release your clients and we are serving another affidavit of Andrew Price later today. Mr Dixon: Can we expect any other affidavit material? Ms Baxter: We are not intending to file or serve any other material before the next hearing. Mr Dixon: The first Price affidavit lumps my clients in with the other defendants. It is not fair for ASIC to use material against the other defendants against mine. My clients need to know what evidence is being relied upon specifically against them. Ms Baxter: Price's second affidavit will allege issues against Go Markets and you can be assured that Go Markets will not be lumped generically in with the other defendants. 24The second affidavit sworn by Mr Price on 26 November 2013 was served on that day on Mr Dixon. It included the claim that the reference to Mr Rangwala not owning any real estate in Australia was a "typographical error". Mr Price claimed that the word "not" should be deleted. His evidence was that "ASIC's inquiries reveal that Mr Rangwala does own real estate within Australia". 25Later on 26 November 2013, after Mr Dixon had received the second Price affidavit, he wrote to Ms Baxter in terms that included the following: It is most disappointing that after four and a half weeks the affidavit of Mr Price is bereft of any evidence relating to my clients. Insofar as my clients are concerned, and having sat through all of the interviews and s 19 examinations of those people associated with my clients, the assertions made in paragraphs [61] and [62] of Mr Price's affidavit are inaccurate and the concerns expressed are not well founded. They certainly do not accord with my recollection. In any event they are not evidence. ... You should have Mr Price at Court and available for cross-examination as to the contents of his affidavit on Monday. Notwithstanding Mr Price's concerns concerning the accuracy of the financial accounts and the purpose of money being sent offshore, no attempt has been made to examine Mr Rangwala pursuant s 19 of the ASIC Act despite there having been ample time in the past fortnight in which to do so. Surely if these concerns are real such an examination should have been a priority. 26Paragraphs [61] and [62] of Mr Price's affidavit included claims that Go Markets had failed to disclose related party transactions in its audited accounts and had entered into related party transactions for no financial benefit to it. 27On 27 November 2013 Mr Dixon wrote again to Ms Baxter noting that apart from correcting the error concerning real estate that was owned by Mr Rangwala in Australia and recounting the detail of the execution of the search warrants, there were no other assertions in the affidavit in respect of Mr Rangwala. That letter included the following: The incorrect statement that he owned no real estate in Australia (which has now been depicted as a typographical error) together with the fact that he is an Indian citizen residing in Australia on a BB155 Visa might be seen to be intended to give the impression that he is a "flight risk". On the contrary, Mr Rangwala resides in the home which he owns together with his extended family. His children attend a nearby school whilst Mr Rangwala is in permanent work as a director and Chief Financial Officer of Go Markets Pty Ltd. A BB155 Visa is for permanent Australian residents and allows for travel and return to Australia from overseas. It may be seen from Mr Rangwala's affidavit as to his financial circumstances which were served herein, that he is not a wealthy man - although he is comfortable. The current asset preservation and restriction of travel orders against him are, in the circumstances, an unreasonable imposition in the absence of specific and soundly based allegations against him - of which there are none. If ASIC had genuine and serious concerns about Mr Rangwala and his conduct, one might expect that (at least) he would have been examined pursuant to s19 of the ASIC Act as a priority. Despite the ample time that has elapsed in which this could of occurred it did not. There is no suggestion in any affidavit material filed herein that Mr Rangwala has engaged in any criminal activity. Mr Rangwala has certainly not been charged with any criminal offence. In the circumstances there is no apparent basis for the restraints upon Mr Rangwala remaining and ASIC should not seek that the current orders as against him be continued. Further there is no basis for him to remain a defendant in the proceeding and he should be released at the next hearing. Because there is no indication in the 2nd Price affidavit of ASIC's attitude to Mr Rangwala, I seek your views as a matter of urgency in relation to the matters I raise. 28On 29 November 2013 Ms Baxter responded to Mr Dixon's letter advising that the primary focus of ASIC's activities had been to collect and process the material that was seized under the search warrants then comprising "enormous quantities of data stored on some 90 electronic devices and hard copy material contained in 69 boxes". Ms Baxter advised that ASIC had scheduled a preliminary examination of Mr Rangwala for the following week and envisaged that a further examination would be required once ASIC was "across all of the material it has obtained". Ms Baxter also advised that ASIC was yet to have the opportunity to review the documents and journal entries that had been provided by Mr Rangwala in the meeting with ASIC on 11 November 2013. Ms Baxter referred to a handwritten document that was seized from Mr Rangwala's residence that included the following: The shareholders have taken out $3.5 million tax free from the business. $9.9 million was made in the last eight mths - Enfinium 20% is $885k & nearly $240k was paid in the last 12 months to pay for Anthony's and Darren's fees. 29Ms Baxter emphasised this statement and said that it was clearly appropriate that ASIC seek further information concerning this allegation. Ms Baxter advised Mr Dixon that given the nature of its investigations, the sums involved and the important role that Mr Rangwala had with Go Markets, ASIC believed that he was a "flight risk" and intended to press for an extension of the travel restraint orders when the matter was next before the Court on 2 December 2013. 30Ms Baxter's letter included the following: Your client has been the Chief Financial Officer of Go Markets since 2009 and has been a director of that company since December 2011. He along with Go Markets and a number of others are being investigated by ASIC for potential contraventions of the Corporations Act which may have resulted in loss and damage to many of the Australian clients of Go Markets. If ASIC's investigations do establish that contraventions have been committed and that loss and damage has been suffered by the clients of Go Markets, then your client will have a liability to those clients. The operation of section 1323 is not limited to the wealthy. It applies, with equal force, to anyone who may have a potential liability to aggrieved persons. Consequently, the fact (if it be the fact) that Mr Rangwala "is not a wealthy man" is no reason why asset preservation orders should not be made against him. ASIC intends to press for an extension of the asset preservation orders. Hearing 2 December 2013 31On 2 December 2013 orders were continued by consent other than against two of the defendants against whom the proceedings were dismissed and the matter was listed for further hearing on 26 May 2014. The orders relevant to this application made against Mr Rangwala and Go Markets were contained in Orders 1 and 4. Further Communications 32On 27 February 2014 Mr Dixon had a telephone conversation with Ms Baxter in which he informed her that Mr Rangwala and Go Markets had instructed him to make application to vacate the restraining orders. Ms Baxter informed Mr Dixon that it did not appear that there was "any substantive problem" involving his clients and that the "restraining orders have run their course and the dismissal of them" was under consideration. Ms Baxter also said that a decision would be made and notified to him in 14 days. When, after 18 days, Mr Dixon had not heard from Ms Baxter he telephoned her again on 17 March 2014 to find out what was happening. In this conversation Ms Baxter advised Mr Dixon that a letter had been prepared and was being settled with a view to sending it in a few days. 33When no letter was forthcoming from ASIC Mr Dixon wrote again to Ms Baxter on 20 March 2014 observing that, although the orders had been in place for more than four months, there had been no contact initiated by ASIC with him or his clients for three months. Mr Dixon advised that he was not aware of any valid basis for the continuance of the restraining orders and noted that Ms Baxter had informed him recently that there did not appear to be any person "aggrieved" who might seek recompense from his clients. The letter included the following: My clients believe that there is now little option but to re-engage Mr Lucarelli QC together with forensic and systems experts, in order to continue with the preparation of the foreshadowed application. That will be costly. If that work is unnecessary, the waste of money would be regrettable. In that event my clients will undoubtedly make application for payment of those costs thrown away pursuant to the decision in ASIC - v - Krecichwost & Ors. This letter may be produced to the Court in support of that application. Alternatively, should you believe that any benefit might be derived from a round table discussion - to take place very shortly - in which ASIC outlines any concerns it may have and my clients indicate their ongoing plans for the future management, shareholding and business direction for Go Markets Pty Ltd, please advise me before noon tomorrow. 34Shortly after 20 March 2014 Ms Baxter telephoned Mr Dixon and advised that she had received the 20 March letter. She informed Mr Dixon that she had no news and that her superiors were considering ASIC's position in relation to his clients. She also said that there were matters in relation to the other defendants that she needed to deal with first. 35By 1 April 2014 Mr Dixon had not received a response to the letter of 20 March 2014. On 1 April 2014 Mr Dixon wrote again to Ms Baxter advising that he was in the process of preparing affidavit material in support of the application for the discharge of the freezing orders and the travel restraint orders. Mr Dixon also advised that substantial further fees and costs had been incurred over the previous seven days and that they were escalating quickly with the re-engagement of Mr Lucarelli QC to prepare the foreshadowed application. Mr Dixon once again urged Ms Baxter to arrange a meeting so that any issues could be discussed. He sought various documents and a response as a matter of urgency. 36It is apparent that on 1 April 2014 there was a telephone discussion between Mr Dixon and Ms Baxter. On 3 April 2014 Mr Dixon wrote to Ms Baxter in the following terms: I refer to our telephone conversation on Tuesday 1 April 2014 in which you advised me that it is the intention of ASIC to propose orders by consent to vacate the restraining orders made in the Supreme Court of NSW proceeding insofar as they relate to our clients. You advised me that it might be the preference of ASIC, prior to releasing our clients, to split the proceeding as against the other defendants from that part of it which is against our clients. I advised you that I would recommend cooperation with that course. I asked you whether the proposal to release our clients was conditional upon them agreeing to bear their own costs and you told me that it was not. You advised me that you would consider further how ASIC would seek to proceed. For all of the reasons advanced at length in my previous correspondence to you, our clients seek to be released from the restraining orders at the earliest possible opportunity. The recent expression by you of ASIC's intentions toward them has eased the pressure upon our preparations for 26 May 2014 but the urgency surrounding removal of the orders is undiminished. Should the issue of costs be a sticking point, our clients are prepared to reserve the question of costs for resolution or adjudication at some later date. On that basis, I request that you advise me as soon as possible of how ASIC seeks to proceed as far as our clients are concerned. In the event that there is any impediment to doing so, in fairness to our clients, I request that you keep me informed. 37On 10 April 2014 the Court made orders by consent as between ASIC and Mr Rangwala and Go Markets as follows: 1. Orders 1 and 4 of the Orders herein made in respect of the Second Defendant, Soyeb Roshanali Rangwala, and the Fifth Defendant, Go Markets Pty Ltd, on 2 December 2013 are vacated. 2. The costs of the proceeding as between the Plaintiff and the Second Defendant, Soyeb Roshanali Rangwala and the Fifth Defendant, Go Markets Pty Ltd, are reserved. 3. The suppression orders made herein on 28 October 2013 referred to in paragraph 5 of the Orders made herein on 2 December 2013 insofar as they relate to the Second Defendant, Soyeb Roshanali Rangwala, and the Fifth Defendant, Go Markets Pty Ltd are vacated. 38Although those orders removed the restraints on Mr Rangwala and Go Markets, they remained as named defendants in the proceedings. On 26 May 2014 orders were made for the filing and service of evidence in relation to the question of costs of the proceedings as between ASIC and Mr Rangwala and Go Markets, bringing the costs question back for hearing on 7 July 2014. Costs Hearing 7 July 2014 39The application in respect of costs was heard on 7 July 2014 when Mr N Lucarelli QC, leading Mr P Walsh, of counsel, appeared for Mr Rangwala and Go Markets (the applicants) and Mr DR Stack, of counsel, appeared for ASIC. 40The applicants relied upon the affidavit of Mr Dixon sworn on 18 June 2014 and two affidavits of Mr Rangwala affirmed on 20 June 2014 and 3 July 2014. ASIC relied upon the affidavit of Jonathon O'Loughlin sworn 30 June 2014; the affidavits of Andrew Price sworn on 21 October 2013 and 26 November 2013 and the affidavit of Piers Balmer sworn on 21 November 2013. 41At the outset of the submissions Mr Lucarelli made the point that the proceedings had been dismissed against Mr Rangwala and Go Markets and accordingly the application for costs is to be determined in accordance with Part 42 Rule 20(1) of the Uniform Civil Procedure Rules 2005 (UCPR) which provides: (1) If the court makes an order for the dismissal of proceedings, either generally or in relation to a particular cause of action or in relation to the whole or part of any claim, then, unless the court orders otherwise, the plaintiff must pay the defendant's costs of the proceedings to the extent to which they have been dismissed. 42Mr Lucarelli indicated that the basis of the dismissal first came to the defendant's attention when submissions from Mr Stack were received on this application. Those submissions included the following: 11. On 10 April 2014, Justice Brereton, with the consent of Mr Rangwala and Go Markets, dismissed the Proceedings as against them, however costs were reserved. 43Mr Lucarelli indicated that his clients had consented to a form of orders that withdrew the restraining orders and the travel prohibition orders and withdrew the suppression orders (tr 19). After further discussion in respect of what occurred on 10 April 2014, an order was made by consent dismissing the proceedings against Mr Rangwala and Go Markets (tr 20). 44In his affidavit of 20 June 2014 Mr Rangwala produced a table recording payments from Go Markets to Go Financial over the period 23 December 2009 to 17 May 2011. He claimed that the payments were all repayments of loans made to Go Markets either by or at the direction of Go Financial. His evidence was that all of the receipts and payments relating to these transactions had been recorded in the Go Markets general ledger and each of them was supported by loan agreements. He claimed that all the documents recording receipts and payments relevant to those transactions were properly maintained at all times by Go Markets and that the general ledger had been made available to its auditors. Go Markets had been audited without qualification for each of the financial years ending December 2009, 2010 and 2011. Mr Rangwala believed that some loan documents (that may not have been available) had been seized by the AFP and ASIC when they executed the search warrants on Go Markets' offices on 22 October 2013. 45Mr Rangwala also gave evidence that at the meeting on 11 November 2013 with the ASIC representatives, he explained the nature of the documents in the folder provided on that day and demonstrated with reference to two or three transactions, how the documents in the folder related to and supported each of the transactions. He also provided a flow chart that illustrated the money flow relevant to the transaction. Mr Rangwala also gave evidence of the "hardship and distress" caused to him and his family by the execution of the search warrants, the restraining orders and the adverse consequences for Go Markets in respect of the freezing orders. It is submitted that these matters should be taken into account on the costs application having regard to the fact that Go Markets and Mr Rangwala have no recourse against ASIC in respect of these matters by reason of the prohibition in s 246 of the ASIC Act. 46Mr O'Loughlin's affidavit evidence included reference to nine payments from Enfinium and Vantage FX to Chiefland Trading Ltd (Chiefland), an entity incorporated in the Republic of Seychelles, in an amount totalling $4,173,235.15. He also referred to seven payments from Enfinium totalling $2,445,178.88 to Tradex Partners Ltd (Tradex), an entity incorporated in Hong Kong. His evidence was that Go Markets and Enfinium claim that those sixteen payments were made pursuant to arm's length commercial "referral agreements" and were reflected as expenses of the business in the annual accounts. However Mr O'Loughlin claimed that the purported arms length agreements between Chiefland and Enfinium and Tradex and Enfinium do not reflect the economic reality of the arrangements. He claimed that ASIC remained concerned that these agreements amount to a "sham" in order to distribute profits to the ultimate beneficiaries of the businesses in a tax effective manner that did not disclose the identity of those individual beneficiaries. Mr O'Loughlin claimed that ASIC's position in this regard was supported by Mr Rangwala's handwritten note referred to above in relation to the shareholders taking out "$3.5 million tax free from the business". 47Mr O'Loughlin emphasised the fact that the annual accounts lodged by Go Markets between 2009 and 2013 disclosed only two related party transactions being: $110,000 from Go Financial Group Pte Ltd in the year ending 31 December 2009; and $100,000 from Go Financial Group Pte Ltd in the year ending 31 December 2010. He suggested that the auditors who lodged the annual accounts with ASIC on Go Market's behalf claimed that they were unaware that they were required to report related party transactions. 48Mr O'Loughlin's evidence referred back to the affidavit of Mr Price of 26 November 2013 in respect of the Virtual Dealer issue. He gave evidence that ASIC engaged the services of Piers Balmer, an independent consultant with experience in the FX trading industry, to assist ASIC in understanding how the various defendants had conducted their trading activities and their use of the Virtual Dealer software. He said that by mid-February 2014 Mr Balmer had presented his findings to ASIC including in respect of Go Markets' trading logs and such findings indicated that "the loss to investors was not statistically significant". 49The Virtual Dealer issue appears to be a non-issue. Although Mr O'Loughlin gave evidence that ASIC continued to engage Mr Balmer to "review the trading logs to ascertain unusual trading and/or other anomalies within the system" there is no suggestion that this process was the subject of any manipulation or misconduct by Mr Rangwala or Go Markets. 50Mr O'Loughlin also gave evidence that a focus of ASIC's investigation was to ascertain the ownership of the defendant entities due to a potential risk to investor funds by virtue of the involvement of certain individuals. Mr O'Loughlin identified Mr Revell-Reade, who has now been convicted in relation to a financial scam in the United Kingdom and sentenced to nine and a half years imprisonment, who was thought by ASIC to be the ultimate beneficial shareholder of Go Markets. It is still not clear what the relationship is between Mr Revell-Reade and Go Markets, if any. Mr O'Loughlin also made mention of two other individuals in respect of whom ASIC has its suspicions. One was "thought to be" the ultimate beneficial shareholder of Enfinium and Vantage FX and to have had a stake in Go Markets through another company. The other was said to have facilitated the off-shore structuring of Go Markets through a group of companies. Finally Mr O'Loughlin's evidence concluded as follows, at [76]: ASIC's Investigation in to the conduct of Go Markets and Mr Rangwala has not been concluded and further inquiries are being made in relation to the off-shore Related Party transfers of funds. Submissions 51The applicants seek an order that ASIC pay their costs of the proceedings. It was submitted that they have been successful in the litigation and costs should follow the event. It was submitted that in accordance with UCPR 42.20(1) ASIC "must pay" the applicants' costs of the proceedings to the extent to which they have been dismissed "unless the court orders otherwise". 52The applicants submitted that ASIC has effectively surrendered and there could be no question that ASIC has not been able to adduce any evidence of wrong doing on the part of Mr Rangwala or Go Markets to support the continuation of the restraining orders or the travel prohibition orders. It was submitted that in those circumstances costs should follow the event as there is no basis for some other order as to costs being made: UCPR 42.1. 53It was also submitted that no real challenge has been made to Mr Rangwala's evidence that he has explained the payments to and from companies related to Go Markets which total some $13 million and that if he had been asked by ASIC for any information about these payments he would have readily complied. ASIC did not request Mr Rangwala, or anyone else at Go Markets so far as Mr Rangwala is aware, to provide information about these payments. It was also submitted that the issue of the $13 million was not the subject of the Notice under s 33 of the ASIC Act issued to Go Markets on 4 November 2014. It was contended that ASIC was not sufficiently concerned about the payments totalling $13 million to have requested documents about these payments in the s 33 Notice or any other Notice. 54The applicants relied upon Young CJ in Eq's judgment in Australian Securities and Investments Commission v Krecichwost & Ors (2008) 72 NSWLR 498 (ASIC v Krecichwost). In that case ex parte orders were made against the relevant defendant in respect of dealing with certain property. Those orders ultimately lapsed. Young CJ in Eq said: 25. Looking at the matter pragmatically, if ASIC makes an application and a fortiori if it gets an ex parte order, the question is whether it is in the public interest that the respondent should be forced to defend the action and, if successful, gain costs. The alternative position is that, if the respondent merely consents and ASIC later withdraws, the respondent will have to bear the burden of her costs in any event. I think the answer is that neither position is correct: a person should if forced into Court and who takes a reasonable stance at least recover her costs ... 27. Each case must be decided on its own facts and merits. It seems to me that when one pays regard to all these factors, the justice of the case means that ASIC should pay the eighth defendant's costs of the proceedings. The principal justification for this is that the order was obtained to aid ASIC's investigation, ASIC should be funded to conduct investigations properly, the ultimate case against the eighth defendant must have failed for insufficient evidence, if nothing else, and she has acted reasonably in allowing the order to continue without incurring the costs of a full fight. 28. I should just add a couple of extra comments. First, the situation may well have been different had ASIC asked the eighth defendant for an undertaking not to dispose of the subject property before launching proceedings. I can understand that investigators get nervous about notifying potential defendants in asset freezing matters to avoid the possibility of the potential defendant taking early evasive action. However, where land is in question, time is needed to dissipate and it normally does not cause prejudice to seek an undertaking within a short term. After all, ex parte relief must always be considered to be the exception rather than the rule and in a free democracy such as Australia, courts should not make ex parte orders unless absolutely necessary. 55Mr Stack respectfully took issue with his Honour's characterisation of the orders being "to aid ASIC's investigation". He submitted that the orders are only sought, and can only be sought, to protect the interests of aggrieved persons. That submission is certainly consistent with the provisions of s 1323 of the Act. However it is ASIC's investigation and on that occasion it was ASIC's application. 56In Australian Securities and Investments Commission v Groves & Ors; Re ABC Learning Centres Ltd (admins apptd) (recs and mgrs apptd) [2009] FCA 915; (2009) 73 ACSR 466 (ASIC v Groves) Lindgren J said at [51] that, in circumstances where ASIC had obtained ex parte relief that had been extended by consent, it was "understandable" that Young CJ in Eq "treated the defendants costs as an incident of the costs of ASIC's investigation that ASIC should bear". 57Mr Lucarelli also relied upon Latoudis v Casey (1990) 170 CLR 534. That case involved summary proceedings in which the defendant had been charged with theft of a motorcar; receiving stolen goods and unlawful possession of those goods. The first charge was dismissed when the prosecution led no evidence. The second charge was dismissed after a submission that the defendant had no case to answer was upheld and the third charge was dismissed at the close of the defendant's case. The Magistrate refused the defendant's application for costs on the ground that the informant had acted reasonably in instituting the proceedings and that the defendant had caused suspicion to fall on him by failing to seek proof of ownership of the goods when he acquired them. The majority (Mason CJ, Toohey and McHugh JJ) held that a Magistrate's discretion in refusing to award a successful defendant his costs had miscarried. Mason CJ said at [543]: If one thing is clear in the realm of costs, it is that, in criminal as well as civil proceedings, costs are not awarded by way of punishment of the unsuccessful party. They are compensatory in the sense that they are awarded to indemnify the successful party against the expense to which he or she has been put by reason of legal proceedings: Cilli v Abbott (1981) 53 FLR at p111. Most of the arguments which seek to counter an award of costs against an informant fail to recognize this principle and treat an order for costs against an informant as if it amounted to the imposition of a penalty or punishment. But these arguments only have force if costs are awarded by reason of misconduct or default on the part of the prosecutor. Once the principle is established that costs are generally awarded by way of indemnity to a successful defendant, the making of an order for costs against a prosecutor is no more a mark of disapproval of the prosecution than the dismissal of the proceedings. 58Toohey J considered examples of defendants' conduct in the face of police investigation or prosecution. His Honour referred to these illustrations (although not exhaustive) as pointing up that a refusal of costs to a successful defendant would "ordinarily be based upon the conduct of the defendant in relation to the proceedings brought against him or her": at 565-566. McHugh J referred to the often mentioned caution that the object of costs was not to penalise and said (at 567): Once it is perceived that costs operate as an indemnity and that the rationale of making a costs order is that it is just and reasonable that the successful party should be reimbursed for the costs incurred in bringing or defending the action, no ground exists for distinguishing between informants in summary proceedings who are public officials and those who are private persons. 59McHugh J drew the distinction between civil proceedings and summary proceedings in the criminal jurisdiction and said at 568-570: But, despite the differences between civil and criminal proceedings, once the real issues in the summary proceeding are identified, there is no difficulty in applying in such proceedings principles akin to those applicable to the making or refusing of orders for costs in civil cases. Nevertheless, it needs to be stressed that, subject to any contrary legislative indication, costs in summary proceedings do not follow the event and that a successful defendant in such proceedings, like a successful party in civil proceedings, has no right to an order for costs. ... A successful defendant cannot be deprived of his or her costs, however, because the charge is brought in the public interest or by a public official, because the charge is serious or because the informant acted reasonably in instituting the proceedings or might be deterred from laying charges in the future if he or she were ordered to pay costs. Nor can the successful defendant be deprived of his or her costs because the conduct of the defendant gave rise to a suspicion or probability that he or she was guilty of the offence the subject of the prosecution. Hence, in most cases, the successful defendant in summary proceedings, like the successful party in civil proceedings, should obtain an order for costs in respect of those issues on which the defendant succeeds. 60Mr Lucarelli also relied upon the following passage from McHugh J's judgment (in dissent) in Oshlack v Richmond River Council (1998) 193 CLR 72 at 103-104 [82]: As the Court ultimately recognised in Latoudis the principles at issue in that case derived from, or were analagous to, those supporting the exercises of the costs discretion in civil cases. Indeed, to a significant extent, much of the discussion in Latoudis can fairly be viewed as testing whether the principles governing the exercise of the costs discretion in summary criminal proceedings in some manner departed from those governing its exercise in civil cases. In this sense, the argument that Latoudis directly applies to the present case is even stronger, given the Court's acceptance in Latoudis of the relevant principles governing civil cases. The significance of Latoudis was well stated by Gleeson CJ in Ohn v Walton (1995) 36 NSWLR 77 at 79 when he said: "What is of importance, however, is the fundamental proposition on which that decision rests. It concerns the nature of an order for costs. The proposition is of equal validity in the context of civil litigation, summary proceedings, and disciplinary proceedings ...The point of Latoudis v Casey is that the purpose of an order for costs is to indemnify or compensate the person in whose favour it is made, not to punish the person against whom it is made." 61The applicants submitted that they acted reasonably in defending the proceedings and should therefore have their costs. They consented to the continuation of the orders despite the hardship to which reference has been made. When ASIC suggested in about March 2014 that it may not seek continuation of the orders, legal work was suspended until it became necessary, having regard to the time constraints of the hearing that was to occur on 26 May 2014, for the work to resume. It was submitted that the incurring of legal costs was unavoidable. There was a need to obtain non- publication orders; a need to deal with ASIC in respect of the way in which Go Markets and Mr Rangwala could operate their bank accounts; and a need to deal with the volume of materials ASIC served on Mr Rangwala and Go Markets. Although the specific allegations were unclear, there was reference to breaches or contraventions of the Act which were very serious indeed. 62It was also submitted that ASIC did not act reasonably in bringing and maintaining the proceedings against the applicants. It was submitted that there was no basis for seeking the freezing orders and the travel restraint orders. It was submitted that ASIC has not placed any material before the Court to demonstrate what altered between 21 October 2013 and 10 April 2014 to demonstrate that there was a proper basis for commencing the proceedings and maintaining them against the applicants. It was contended that the only explanation advanced in this regard appears to be that the investigation was under way and a vast body of material needed to be analysed. The applicants submitted that this is not a substitute for evidence that there was a sufficient risk to warrant the seeking of the freezing orders and travel restraint orders. 63The applicants also submitted that the claims against them were not clearly articulated and the allegations relating to the Virtual Dealer program and the $13 million payments have been shown to have no foundation. 64The applicants submitted that Mr O'Loughlin's claim that further enquiries are being made about the $13 million payments is most unhelpful particularly where he does not identify what the enquiries are or how the extensive documentary material and explanation provided by Mr Rangwala do not properly support all of the payments. 65The applicants also submitted that ASIC has not adduced any evidence as to why either Mr Rangwala or Go Markets were a sufficient risk to warrant the draconian ex parte orders that were sought, nor the insistence that those orders be extended on two occasions. In particular it was submitted that there was no suggestion that either Mr Rangwala or Go Markets had previously not cooperated with any request by ASIC. Indeed it was contended that if ASIC had asked for assistance (either voluntarily or by compulsion) from either Mr Rangwala or Go Markets, they would both have fully cooperated. 66It was also submitted that the mistake made in the first Price affidavit that Mr Rangwala had no real property in Australia was most unsatisfactory. There is no doubt that such a statement would have been made for the purpose of supporting the inference that Mr Rangwala would be a flight risk. Indeed such can be inferred from the letter from Ms Baxter to Mr Dixon on 29 November 2013 in which she reiterated ASIC's view that Mr Rangwala was perceived as a flight risk. 67It was also submitted that ASIC has a range of powers far less intrusive than the restraining orders that were imposed that could have been utilised in this instance and ASIC's conduct in bringing and/or maintaining the proceedings was not reasonable. 68Finally the applicants submitted that there are several factors that demonstrate the hardship that the restraining orders and travel prohibition have imposed on Mr Rangwala and Go Markets. Although ASIC is not required under the Act to provide an undertaking as to damages, it is not prevented from doing so. In this case no undertaking as to damages was proffered. It was submitted that the hardship referred to by Mr Rangwala and Go Markets and any losses that may have been incurred by them does not sound in damages but is said to be relevant to be taken into account in exercising a discretion as to whether a costs order should be made against ASIC. 69It was submitted that Mr Rangwala is in a similar position to the defendant in ASIC v Krecichwost. His assets were frozen for almost six months without compensation. He has not behaved unreasonably. The proceedings against him have been dismissed. After full investigation, ASIC does not have sufficient evidence to mount a case on which it could be confident to succeed. In those circumstances he should not be asked to bear his own costs as well as to suffer the prejudice of having his assets frozen. 70It was submitted that Go Markets has also had its assets frozen without compensation for almost six months. The evidence was that it would have undertaken an expansion of its business into China and actively marketed itself to enhance its brand if it had not been for the proceedings and the restraining orders. It was submitted that Go Markets has not behaved unreasonably and the proceedings against it have been withdrawn. After full investigation, ASIC does not have sufficient evidence to mount a case on which it could be confident to succeed and it is now being asked to bear its own costs as well as to suffer the prejudice of having its assets frozen. 71ASIC submitted that the applicants' submission that ASIC had effectively surrendered ignores the true character and purpose of proceedings under s 1323 of the Act. ASIC relied upon the following passage of French J's (as the Chief Justice then was) judgment in Re Richstar Enterprises Pty Ltd & Ors; Australian Securities and Investments Commission v Carey (No 3) & Ors (2006) 57 ACSR 307 (ASIC v Carey) at [25] as follows: The orders that can be made under the section are directed, inter alia, to the preservation of assets against which recovery may be sought in the event that liability to and 'aggrieved person' is established on the part of a 'relevant person'. The orders are made in circumstances where 'an investigation is being carried out', 'a prosecution has been begun' or 'a civil proceeding has been begun'. That is to say the orders can be made before liability is established and indeed before the evidence necessary to establish liability has been collected. While an application under the section is not interlocutory in an existing criminal or civil proceeding, it is interlocutory in a wider sense. It preserves the status quo and the assets of the relevant person pending the outcome of the investigation, prosecution or civil proceedings which are on foot - CAC v Lone Star Exploration NL (No 2) (1988) 14 ACLR 499 at [504]. At the stage an order is sought the Court may not be in a position to identify with precision any particular liability owed by the person the subject of the proposed order. This consideration applies to final orders made under the section as well as to interim orders for which it expressly provides in s 1323(3). The final orders made under the section are necessarily of a temporary or holding character rather than finally disposing of the rights and liabilities of the relevant persons affected by them. 72After noting the width of the circumstances in which the Court may make orders under s 1323(1) of the Act, French J said at [26]: There is an element of risk assessment and risk management in the judgment the Court is called on to make. It follows, and has been accepted, that there is no requirement on the part of ASIC to demonstrate a prima facie case of liability on the part of the relevant person or that the person's assets have been or are about to be dissipated - Corporate Affairs Commission v ASC Timber Pty Ltd (1989) 7 ACLC 467 at [476] (Powell J); Australian Securities and Investment Commission v Adler (2001) 38 ACSR 266; [2001] NSWSC 451 at [7] (Santow J). 73ASIC submitted that contrary to the applicants' submissions, there is no winner or loser in the traditional sense in s 1323 proceedings, as is contemplated by UCPR 42.1. In this regard reliance was placed on the following passage of Hill J's judgment in Australian Securities Commission v Aust-Home Investments Ltd & Ors [1993] FCA 401; (1993) 44 FCR 194 (ASC v Aust-Home Investments) at [35]: It is a case where the need for interim protection, or for that matter the need for the final appointment of a receiver, is no longer there. But it does not follow from this that is was unreasonable for the proceedings to have been initially commenced, or for that matter that costs should follow automatically the dismissal of the application, if that is the course taken. 74ASIC also submitted that whilst in defined circumstances or with the consent of an aggrieved person, ASIC may commence proceedings for their benefit, generally it is for the aggrieved persons themselves, rather than ASIC, to commence proceedings for monetary relief: ASIC v Groves at [6]-[7]. It was submitted that ASIC has no control over the aggrieved persons and consequently, such proceedings may never eventuate. 75ASIC submitted that the facts in ASIC v Krecichwost were "unusual" (In the matter of RG Munro Futures Pty Ltd (in liq) and In the matter of Starport Futures Trading Corporation (in liq) [2011] QSC 405 (ASIC v Munro) at [17]) and stand in stark contrast to the present circumstances. Mr Rangwala was not the mere recipient of real property as was the defendant in ASIC v Krecichwost. Mr Rangwala was a person actively involved in an FX business conducted by Go Markets, which was, in turn, dealing with millions of dollars received from members of the Australian public. It was submitted that this conduct was closely linked to the conduct of the other defendants and that the facts more closely resemble those considered by the Court in ASIC v Munro where the parties were ordered to pay their own costs. It was submitted that the appropriate test to be applied to proceedings brought under s 1323 is that each party should pay their own costs unless there is some "clear evidence that ASIC has acted in an inappropriate or unreasonable way": ASIC v Munro at [15]; ASIC v Groves at [54]; ASC v Aust-Home Investments at 202-203 and ASIC v Krecichwost at [23]. Consideration 76On the one hand ASIC relied upon the evidence referred to above to contend that is it clear that it behaved reasonably in all the circumstances and the appropriate order is that each party pay its own costs. On the other hand, the applicants contend that when the evidence is reviewed in the light of UCPR 42.1 and 42.20(1) ASIC should be ordered to pay their costs of the proceedings. If the relevant test is that the applicants would only be entitled to their costs if ASIC behaved unreasonably, the applicants contend that the evidence establishes that ASIC's conduct was unreasonable, in particular after Mr Rangwala provided the documents and information at the meeting on 11 November 2013. 77The cases upon which ASIC relied to submit that the appropriate order in the circumstances of this case is that each party pay their own costs are distinguishable from the present case. In ASIC v Munro travel prohibition orders and orders for the delivery up of the defendant's passport had been obtained by ASIC in September 2009. In August 2010 the defendant sought a discharge of the orders in relation to the travel prohibition orders and the delivery up of the passport. In October 2010 those orders were varied and the defendant's passport was returned to him. 78The investigation in respect of the defendants' conduct in that case arose out of complaints received by ASIC including from the Queensland Crime and Misconduct Commission (the Commission), that the entities were providing investment advice without a financial services licence. There were funds amounting to approximately $88 million that had been transferred into various Australian, United States, United Kingdom and European trading, broking and banking accounts. There were claims of losses of $32 million in one instance and $7.1 million in another. 79ASIC's investigations were completed and referred to the Commonwealth Director of Public Prosecutions who decided not to proceed with ASIC's recommendations, presumably for prosecution, because there were no reasonable prospects of a conviction. Ann Lyons J was satisfied that by reason of the amount of money invested and unaccounted for as well as the fact that the Commission was one of the complainants, indicated that ASIC was "entirely justified in making the investigation that it did" and that there was no evidence that ASIC had acted unreasonably. An order was made that each party pay their own costs. 80In the present case there were no complaints of any losses nor was there any concluded investigation that justified a referral to a prosecuting authority. During February 2014, within four months of the imposition of the restraints on the applicants, ASIC concluded that no "aggrieved person" had been identified. 81In ASIC v Groves the defendants had resisted all applications brought by ASIC including at a final hearing of the applications in respect of the injunctive relief. It was only on the first day of the final hearing that negotiations took place during the course of the day and the matter was resolved by consent and without admissions: at [26]. Lindgren J referred to the fact that there had been no adjudication upon the merits of the matter and it was not possible to say what the ultimate outcome of the proceedings would have been. His Honour was not persuaded that in the relevantly short period from the commencement of the proceedings on 24 June 2009 to its conclusion late on 27 July 2009 any of the parties had behaved so unreasonably that any one of them should be ordered to pay the costs of any other: at [55]. 82In the present case the restraints were in place for six months and although the applicants sought to be relieved of the restraints from November 2013, there was no contested hearing in respect of the restraints when ASIC refused to agree to release them. In contrast to the situation in ASIC v Groves, the applicants in the present case were cooperative and agreed to the continuation of the restraints until ASIC applied for the consent orders in April 2010 discharging them from those orders. 83In ASC v Aust-Home Investments the ASC's investigation stemmed from a "negatively geared investment scheme designed to produce substantial taxation deductions for investors". An officer of the ASC had formed the view that there were no genuine loan monies being lent to investors and in turn there could be no genuine investment by taxpayers in income-producing investments with the consequence that no deductions would be available to them for income tax purposes. Despite Notices being issued to the defendants, minimal books and returns had been produced to the Commission. It was impossible for its officers to understand the inter-relationship of the parties to the arrangements or to determine who controlled which company within the arrangements. 84On the application for ex parte relief "grave defects" in the way the scheme was carried out were identified and it was clear that there were no proper accounts kept of what was received from the investors and what was done. There was also a change in the personnel of the companies and the directorship of the companies such that it was impossible to work out what the true position was. Ex parte orders were made for the appointment of a receiver to enable the Commission to continue its inquiries and to protect the interests of the aggrieved persons. There was also an order for the freezing of assets of relevant officers. 85These orders were in place for approximately 12 months when orders were made discharging the receivership subject to the question of the costs of the application, notwithstanding that further investigations were to be undertaken by the ASC. Hill J said at 203: Having regard to my view that it was reasonable both for the Commission to commence the proceedings and for the respondents to defend them, that there has been no determination on the merits, that there is nothing in the evidence which ultimately displays behaviour of Mr and Mrs Bunt [the respondents] which should prejudice the exercise of discretion for costs, the fact that the order for interlocutory relief was continued by consent and that the parties acquiesced in the matter ultimately not being litigated for a considerable time, I am of the view that the appropriate order is that each side bear its own costs. In my view the costs should fall as they fall and accordingly I would make no order as to costs of the proceedings. 86In the present case there is a serious question as to whether the accounts reflected the overseas transactions in an appropriate fashion. The hearsay evidence in relation to the auditors understanding of Go Markets' obligations to report related party transactions has not been taken further at this stage. However the applicants submitted that if the loans under the loan agreements that were apparently provided by Mr Rangwala to ASIC in November 2011 (and/or seized from Go Markets' offices on 22 October 2013) are reconciled with the accounts there is no deficiency. Certainly there were no grave defects identified in the present case in relation to the operation of the FX trading arrangements between Go Markets and its clients. 87Latoudis v Casey and Oshlack v Richmond River Council relied upon by the applicants are also distinguishable from the present case. The former involved a completed hearing on the merits in the summary criminal jurisdiction of the Magistrates court in respect of which the relevant legislation (Magistrates (Summary Proceedings) Act 1975 (Vic)) contained no provisions in respect of the exercise of the discretion to award costs to a successful defendant. The latter involved the exercise of a discretion in the making of a costs order under s 69(2) of the Land and Environment Court Act 1979 after a completed hearing brought by the applicant to impugn a development consent over land said to be the habitat of an endangered native animal. 88ASIC v Krecichwost, although distinguishable in some respects has some similar features to the present case. In that case ASIC was concerned that the subject company had conveyed some of its property (real property in Queenscliff, NSW) to the defendant without consideration. In July 2007 ASIC obtained ex parte orders restraining the defendant from dealing with that property. That order was continued by consent and lapsed in June 2008 when the Court was advised that ASIC did not seek an order extending the operation of the order. Similarly in this case ASIC obtained ex parte orders that were continued by consent. However in this case ASIC moved the Court prior to the expiry of the period as consensually continued for the orders to be discharged. In this case there was no real property involved. Rather ASIC's concern was in respect of multi-million dollar payments to offshore companies apparently not recorded in the accounts of a company holding an AFSL. 89ASIC is not required to demonstrate a prima facie case of liability on the part of the relevant person the subject of the application for s 1323 orders or that the person's assets have been or are about to be dissipated: ASIC v Carey at [26]. However if ASIC chooses to call evidence that tends to suggest there is a risk of dissipation, such evidence must be accurate. In this instance there was a serious error in ASIC's evidence that Mr Rangwala did not own any real estate in Australia. That evidence remained uncorrected between 21 October 2013 and 29 November 2013 when it was said to have been a "typographical error". 90Mr Dixon's response in relation to this rather serious error was a most measured one in circumstances where his clients were subject to the restraints. The requests made by Mr Dixon to free the applicants from the orders made ex parte were also very measured requests and when he was rebuffed, agreement was reached to continue the orders on the basis that ASIC would give further consideration to the matter when materials gathered were analysed. 91The correspondence between Mr Dixon and Ms Baxter in early 2014 also demonstrates a most reasonable approach by the applicants in seeking to avoid the incursion of legal costs in preparation for an application for the discharge of the orders. The Virtual Dealer issue had been an important part of the evidence relied upon to obtain the restraints. The evidence suggested that there may have been manipulation of the deals done for the clients, whereby the clients would bear the loss and the brokers would bear the profits. By mid-February 2014 when Mr Balmer produced his report, ASIC was aware that the Virtual Dealer concern was a non-issue and prompt action should have been taken to address the new circumstances. 92The fact that the corporate structure was complex with overseas entities being incorporated in various places that may be regarded as unconventional, in circumstances where an amount of $13 million had been identified as having been paid offshore, without apparently being reflected in the relevant financial accounts filed with ASIC by the entity holding the AFSL was clearly a reasonable basis for ASIC to have commenced and continued its investigation. However when freezing orders are in place and there has been co-operation and consensual extension of such orders, notwithstanding the presence of complexity both factually and in relation to corporate structures, it is important to give continuing attention to the necessity for the continuation of such orders. The fact that ASIC did not wait until the expiry of the continued consensual period during which the restraints operated to seek the discharge of the orders is to its credit. 93The provisions of UCPR 42.20(1) refer expressly to causes of action. They also refer to any part of "any claim" being dismissed. In the present case there were no causes of action pleaded. Rather the proceedings were for interim relief during an investigative process specifically envisaged by s 1323(1)(a) of the Act. In the more conventional cases one sees interim relief sought as part of proceedings for substantive relief pleaded as causes of action. When such proceedings are discontinued or dismissed a party against whom the cause of action has been brought may in appropriate circumstances reasonably be described as a "winner" with costs to follow that event: UCPR 42.1. The Originating Process in the present case also sought "such further or other orders" as the Court thought fit. That remained the situation until the proceedings were dismissed during final submissions on costs. 94In both UCPR 42.1 and 42.20(1) the outcome is prescribed, "unless it appears to the court that some other order should be made" (42.1) or "unless the court orders otherwise" (42.20(1)). The Court must take all the relevant circumstances into account in particular when there has been no hearing of any cause on the merits and the parties have approached the process consensually. This is not a case in which a finding can be made (as was made in ASIC v Krecichwost at 502 [26]) that after a full investigation ASIC does not have sufficient evidence to mount a case on which it would be confident it could succeed. Certainly ASIC moved to have the restraining and freezing orders discharged but it continues its investigation. 95The test adopted in the cases relied upon by ASIC was whether ASIC (or any party) had acted "unreasonably" or whether ASIC had been "justified" in what it did. Although it might appear otherwise, an award of costs against a party on the basis of such a test does not equate to a punishment. Rather it provides a mechanism to assist the exercise of the discretion to award costs, in circumstances which are unusual, in the sense that the orders are made in respect of an investigative process rather than in respect of the 'usual' litigious process. 96I am satisfied that the appropriate order as to costs incurred up to February 2014 is that each party pay their own costs. I am however satisfied that the position is different from the time Mr Balmer informed ASIC of the outcome of his enquiries, notwithstanding that Mr O'Loughlin's evidence is that ASIC is still investigating the issue of the $13 million payment. 97Mr Dixon made numerous attempts to avoid the incursion of additional costs by seeking ASIC's response in his letters of 27 February 2014, 20 March 2014 and 1 April 2014. When Mr Dixon advised in his letter of 20 March 2014 that the applicants had "little option" but to incur those additional costs there was no written response. Ms Baxter's advice that her superiors were considering the position was little comfort to the applicants. Mr Dixon's letter of 1 April 2014 advising that the costs had been incurred and were escalating quickly brought the response that ASIC was intending to propose orders by consent vacating the orders. 98I am satisfied that the applicants should not have been put to further costs of preparation for the discharge of the orders from March 2014 when it must have been clear to ASIC that its concern in respect of the possible manipulation of the Virtual Dealer software was a non-issue. It had also been in receipt of Mr Rangwala's explanation and documents since 11 November 2013 in relation to the $13 million payments and did not seek to interview or examine him further or seek any information from him via his solicitors. There was no explanation why it took until 10 April 2014 to have the orders discharged. Nor was there any explanation of why the orders were to be discharged then as opposed to any earlier date, other than as Ms Baxter advised Mr Dixon, her superiors were considering the matter. 99It is true that ASIC was burdened with complex and voluminous documents. However where ASIC obtains orders under s 1323 of the Act affecting an individual's freedom of movement and bank accounts are frozen, it is imperative that it vigorously monitors the necessity for the continuation for such orders. In particular when ASIC receives information (in this instance the fact that the Virtual Dealer concern was a non-issue) that has the effect of diluting (or even removing) the concern that justified the application for and/or the granting of the orders, it must act with promptitude in seeking to have the orders either discharged or varied to meet the new circumstance. 100As I have said, it is to ASIC's credit that it did not wait until 26 May 2014 when the matter was next listed to have the orders discharged. However I am satisfied that it was unreasonable for the applicants to have been put to the additional costs that Mr Dixon advised in his letter of 20 March 2014 were to be incurred in preparing to apply for the discharge of the orders. 101In all the circumstances I am satisfied that ASIC should pay the applicants' costs of the proceedings on and from 20 March 2014. Otherwise the parties are to pay their own costs of the proceedings. 102I make the following orders.