Australian Securities and Investments Commission v Open4Sale Global Ltd

ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS YOU TO BREACH THE TERMS OF THIS ORDER MAY BE SIMILARLY PUNISHED.

1. The second defendant is restrained from seeking or accepting indemnification from the first defendant or any of its shareholders in respect of the pecuniary penalty imposed on him pursuant to paragraph 3 of the orders made on 29 August 2025.
2. The third defendant is restrained from seeking or accepting indemnification from the first defendant or any of its shareholders in respect of the pecuniary penalty imposed on him pursuant to paragraph 4 of the orders made on 29 August 2025.

1. The defendants are to severally pay the plaintiff's costs of an incidental to the proceeding, apportioned between them as follows:

(a) 10% against the first defendant, to be assessed on a party-party basis;

(b) 65% against the second defendant, to be assessed on an indemnity basis; and

(c) 25% against the third defendant, to be assessed on a party-party basis.

1. The plaintiff's costs entitlements are to be assessed on a lump sum basis.
2. Pursuant to s 54A of the Federal Court of Australia Act 1976 (Cth), the question of the lump sum to be paid by each defendant is referred to a Registrar, acting as referee (Reference).
3. For the purpose of the Reference:

(a) on or before 9 December 2025, the plaintiff is to file and serve an affidavit (not exceeding 10 pages) in support of a claim for lump sums calculated in accordance with the costs entitlements set by paragraph 3 of these orders, and prepared in conformity with "Annexure A - Guide for Preparing a Costs Summary" of the Costs Practice Note (GPN Costs) (Costs Summary);

(b) on or before 13 January 2025, the defendants are to file and serve any affidavit in response to the Costs Summary, not exceeding eight pages (Costs Response); and

(c) on or before 27 January 2025, the parties may file written submissions of no more than three pages addressing any matters of dispute arising from the Costs Response.

1. The Registrar shall not grant an extension of the timeframes fixed by paragraph 6 of these orders other than on an application made before the expiry of the timeframes, such application to be supported by affidavit specifying the reason for the extension sought.
2. The Registrar's report on the referred question is to be provided to the parties and the presiding judge not later than 24 March 2026, or such later date as may be determined by the Registrar and notified to the Court and the parties.
3. Not later than 21 days following the provision of the Registrar's report, any party opposing the adoption of any opinion set out in the report shall file and serve an affidavit specifying the basis for the objection.
4. There be a further hearing on a date to be fixed for the purpose of hearing submissions as to whether the opinion of the Registrar should be adopted.
5. Liberty to apply.
6. In the event that the parties agree the quantum of costs, the plaintiff is to file and serve a minute of order in terms agreed by the parties together with such further or ancillary orders necessary to finalise the proceeding.

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

1. In this proceeding the Australian Securities and Investments Commission (ASIC) alleged contraventions of the Corporations Act 2001 (Cth) by the three respondents, Open4Sale Global Ltd (ACN 159 248 067) (Company) and two of its directors, Mr Simeon La Barrie and Mr Ewald Hafer. Declarations of contravention have been made against each of the defendants: Australian Securities and Investments Commission v Open4Sale Global Ltd (No 2) [2025] FCA 1038 (Judgment). The Court imposed civil penalties on the directors, and granted other forms of relief. These reasons assume familiarity with the Judgment and remedies.
2. It remains to resolve some ancillary and consequential questions. With the consent of the parties, the Court now proceeds on the papers, having regard to the parties' written submissions, draft orders proposed by ASIC and the following affidavits:

(1) Mr Hafer affirmed on 19 September 2025;

(2) Mr Warren Fry affirmed on 23 September 2025; and

(3) Mr Andrew Smith affirmed on 10 September 2025.

Orders regulating the payment of civil penalties

1. Mr La Barrie and Mr Hafer have been ordered to pay pecuniary penalties, respectively in the amounts of $2,000,000.00 and $800,000.00.
2. As explained in the Judgment, the Court raised an issue as to whether it may be appropriate to make an order prohibiting each of them from drawing upon the financial resources of the Company to meet their respective liabilities to pay. Further submissions were invited on the question.
3. In response, ASIC provided a minute of order proposing that Mr La Barrie and Mr Hafer each be "restrained from seeking or accepting indemnification from the First Defendant or any of its shareholders" in respect of the pecuniary penalties ordered to be paid by them.
4. The orders are not opposed by Mr La Barrie or Mr Hafer. I am satisfied that they are within the Court's power and that it is appropriate to make the orders, given what is said at [208] of the Judgment.

1. ASIC was wholly successful in establishing the contraventions. It substantially obtained the relief sought on its originating application, other than the imposition of a pecuniary penalty upon the Company. The reasons for not imposing a penalty on the Company are explained in the Judgment. They are not reflective of fault or waste on ASIC's part. ASIC otherwise succeeded in obtaining declarations and injunctions against the Company.
2. I am satisfied that there should be an award of costs in ASIC's favour in accordance with the general rule that costs should follow the event.
3. ASIC seeks orders that each defendant be severally liable to pay a proportion of its costs. The apportionments sought are 65% against Mr La Barrie, 25% against Mr Hafer and 10% against the Company.
4. The defendants join in a submission that there should be no order for costs against the Company. They submit that ASIC's costs should be apportioned 71.5% against Mr La Barrie and 28.5% against Mr Hafer. They submit that apportionment is appropriate because it is a reflection of the quantum of pecuniary penalties payable by each of them.
5. Curiously, the defendants also submitted that ASIC and the Company should each bear their own costs. I do not understand that submission given that the apportionment sought by the defendants would see 100% of ASIC's costs compensated on a party-party basis. To the extent that it was submitted that ASIC should bear any proportion of its own costs, I do not accept the submission given the extent of its success in the whole of the action.
6. Section 43(3)(c) of the Federal Court of Australia Act 1976 (Cth) (FCA Act) empowers the Court to order that parties are to pay costs in specific proportions. The usual position is that where a costs order is made against several parties, the liability is joint and several: Adelaide Brighton Cement Limited, in the matter of Concrete Supply Pty Ltd v Concrete Supply Pty Ltd (Subject to Deed of Company Arrangement) (No 6) [2020] FCA 928 (Besanko J). However, there may be circumstances in which it is appropriate to apportion costs having regard to an unsuccessful party's contribution to the costs incurred by the successful party. Generally speaking, "the ruling consideration is the conduct of the parties in the litigation, not the conduct giving rise to the litigation": Adelaide Brighton (at [99]).
7. In this case it is appropriate to apportion the costs in a way that reflects each defendant's contribution to ASIC's costs, having regard to their conduct in the proceeding. For the purposes of that assessment, I find that the procedural history of the action is correctly summarised in ASIC's written submissions (at [10]). It is convenient to extract that summary here as a record of my own findings:
   1. The proceedings were commenced by Originating Process and Concise Statement on 19 December 2023. All of the Defendants were initially represented in the proceedings by Belperio Connell Lawyers.
   2. At the first case management hearing (CMH) held on 5 March 2024, the Court directed that the Defendants file and serve Concise Statements in Response on or before 2 April 2024, and the matter was referred to the Registrar for mediation. In early May 2024, the Registrar cancelled the mediation then scheduled for 15 May 2024, in circumstances where none of the Defendants had filed Concise Statements in Response as directed.
   3. Belperio Connell Lawyers filed a notice of intention to cease acting for Mr La Barrie on 22 May 2024, and then a notice of ceasing to act on 30 May 2024.
   4. On 31 May 2024, Open4Sale Global and Mr Hafer filed their Concise Statements in Response, by which they (i) conceded the alleged contravening conduct, including by reason of the non-application of any exceptions under ss 708 or 708AA of the Corporations Act 2001 (Cth) (Corporations Act), but (ii) sought to downplay the seriousness of the alleged contraventions.
   5. As at early July 2024, Mr La Barrie had not filed any Concise Statement in Response. He represented to ASIC on several occasions from this time that the Concise Statement in Response would be, or had been, provided by Belperio Connell Lawyers, but Mr Connell confirmed to ASIC that he was not acting. Eventually, on 16 August 2024, Mr La Barrie emailed to ASIC a Concise Statement in Response, in substantially the same terms as that filed and served by Mr Hafer and the [sic] Open4Sale Global.
   6. During July and August 2024, ASIC proposed to each of the Defendants that discussions be held about agreeing a statement of facts with a view to avoiding the need for a trial on liability, noting that this would need to be attended to as a matter of priority, given the impending due date for ASIC's evidence in chief. ASIC did not receive responses to its correspondence.
   7. On 3 September 2024, Belperio Connell Lawyers filed notices of ceasing to act for Open4Sale Global and Mr Hafer, such that from this juncture, none of the Defendants were represented, at least until the trial.

1. The greater contribution to ASIC's costs has been occasioned by the conduct of Mr La Barrie in his capacity as the second defendant. That conduct justifies the apportionment sought against him by ASIC (65%). Mr La Barrie did not submit that a lesser amount should be apportioned to him, indeed he argued for a higher percentage.
2. Mr Hafer's contribution to ASIC's costs is in large part referable to him pursuing a weak case for relief from liability at trial, being the primary focus of the oral hearing. An apportionment of 25% is appropriate having regard to Mr Hafer's conduct in the proceeding as set out in ASIC's written submissions. The lower apportionment is based on Mr Hafer's admitting the elements of the contraventions alleged against him at a relatively early stage of the proceeding, and maintaining that admission throughout.
3. In his affidavit, Mr Hafer deposes to his lack of income and assets. He submits that he is unable to satisfy any costs order, just as he is unable to pay the pecuniary penalty. To the extent that Mr Hafer invites the Court to revisit the penalty itself, I decline to do so. The order fixing the penalty has been entered and there is no occasion to revisit it. The penalty was fixed by reference to evidence adduced at the hearing, at a time when Mr Hafer was legally represented.
4. I do not consider Mr Hafer's recent affidavit deposing to his impecuniosity to provide an answer to the cost orders sought by ASIC. As the High Court said in Northern Territory v Sangare [2019] HCA 19; (2019) 265 CLR 164 (at [35]):

... as a matter of authority, the courts have consistently rejected the suggestion that a costs order should not be made against an impecunious party because it would be futile to do so. The circumstance that a person may not presently, or even foreseeably, be able to meet an order for costs has not been regarded as a reason to regard the creation of the debt as an exercise in futility. The very existence of the debt created by the order is a benefit to a creditor. The successful party is better off with the benefit of the order than without it. It simply cannot be assumed that the respondent will never have the means to pay the debt in whole or in part or that it might not otherwise be turned to valuable account by the appellant.

(footnotes omitted)

1. As for the Company, it cannot be said that it made no contribution to ASIC's costs. It was not inappropriate for ASIC to pursue the Company as a contravener, and it was not an inactive participant in the proceeding. The Company defaulted in the filing of a Concise Response, disrupting the mediation processes. The 10% apportionment proposed by ASIC recognises the lesser extent of its contribution to the costs of the proceeding, relative to that of the other defendants. The Court has previously heard that the Company had a board of three directors throughout the proceeding. It was open to the directors to resolve, by majority, to take no active part in the proceeding so far as the ascertainment of liability was concerned, but they did not do so.
2. At present, Mr Fry is the sole remaining director of the Company. I am not satisfied that his affidavit is reliable evidence of the Company's financial position and resources. That is because he does not possess sufficient information and documents to express a reliable opinion on the topic. In any event, unlike orders for pecuniary penalties, an order for the payment of costs has a compensatory purpose. Its purpose is not to protect the shareholders of the Company or other members of the public, but rather to ensure that ASIC is compensated for the costs and expenses of successfully prosecuting its case. As I have mentioned, the capacity of an unsuccessful party to satisfy a costs order is not ordinarily taken into account when determining whether the order should be made: Sangare, (at [35]).
3. I am satisfied that the order against the Company should be made notwithstanding the evidence and submissions relating to its allegedly parlous financial position.

1. The power to award costs on an indemnity basis is conferred by s 43(3)(g) of the FCA Act. The principles guiding the exercise of the discretion are correctly summarised in ASIC's written submission in language that I gratefully adopt:

(1) the power must be exercised judicially, taking into account the overarching principles in s 37M of the FCA Act (Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd [2020] FCA 598 (at [13]));

(2) indemnity costs may be awarded where there is some special or unusual feature in the case (Re Wilcox; Ex parte Venture Industries Pty Ltd (No 2) [1996] FCA 1942; (1997) 72 FCR 151, Black CJ (at 152));

(3) the purpose of an award of indemnity costs is to compensate a party more completely for costs than would be the case under an award of party-party costs, where it was unreasonable for the party to have been subjected to the relevant costs expenditure (Cirillo v Consolidated Press Property Ltd (formerly known as Citicorp Australia Limited) (No 2) [2007] FCA 179, Finn J (at [4]), citing Hamod v New South Wales (2002) 188 ALR 659, Gray J (at [20]). See also Melbourne City Investments Pty Ltd v Treasury Wines Estates Limited (No 2) [2017] FCAFC 116, Jagot, Yates and Murphy JJ (at [5]));

(4) an order may be appropriate where there is an undue prolongation of a case by groundless contentions, or a wilful disregard of known facts or clearly established law (Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, Sheppard J (at 233); Barrett Property Group Ltd v Metricon Homes Pty Ltd (No 2) [2007] FCA 1823, Gilmour J (at [4]));

(5) a departure from the usual party-party costs order may be warranted where a party persists in prosecuting a proceeding without regard to the evidentiary difficulties in the case and the categories of cases in which an indemnity costs order may be appropriate are not closed (Seven Network Ltd v News Ltd [2009] FCAFC 166; (2009) 182 FCR 160, Dowsett and Lander JJ (at [1102]) (with whom Mansfield J relevantly agreed at [1] and [67])); and

(6) in general, courts are more reluctant to make orders for costs against unrepresented litigants (as the defendants in this case were for a portion of the proceeding), although in appropriate cases such orders may be made (Bhagat v Global Custodians Ltd [2002] FCA 223, O'Loughlin, Whitlam and Marshall JJ (at [57] and [60]).

1. Mr La Barrie's conduct as a defendant was characterised by periods of disengagement, followed by periods of disruptive engagement. The disruption including his insistence that he would run a case that alleged improper conduct on the part of ASIC in pursuing the allegations (coupled with a stated intent to require all of ASIC's witnesses to attend at the trial for cross-examination). He failed to file documents within the timeframes ordered. He denied liability in circumstances where it could not be reasonably argued that the elements of the contravention were not fulfilled on the uncontested facts.
2. In determining whether costs should be awarded on an indemnity basis, I have had regard to Mr La Barrie's status as a self-represented litigant. However, it was also the case that Mr La Barrie was legally represented at the outset of the proceeding and that, whilst unrepresented, he was given guidance about the Court's procedures and its powers to make orders as to costs. He re-engaged the same lawyer after the trial had commenced, only then re-instating admissions he had already made. Mr La Barrie opposed an order for indemnity costs on the basis that ASIC did not make any attempt to resolve the matter by convening a mediation. That submission does not reflect the events that occurred in the proceeding. With ASIC's consent, the matter was referred to a mediation before a Registrar. The mediation was terminated not because of any unwillingness of ASIC to participate, but because of issues affecting the defendants' legal representation. In any event, given the findings set out in the Judgment, the case is one in which the defences erected by Mr La Barrie had prospects of success and he ultimately adduced no evidence capable of disproving the elements of the contraventions alleged against him. In all of the circumstances, I am satisfied that Mr La Barrie's conduct in the proceeding warrants an order that his portion of the costs liability should be assessed on an indemnity basis. Mr La Barrie made no alternative submission that indemnity costs should be paid for only part of the proceeding. I accept ASIC's submission that the greatest portion of its costs were incurred during the period of his most disruptive and wasteful behaviour.

1. The parties agree that each defendant's costs liability is to be assessed as a lump sum.
2. ASIC proposes orders for the quantification of those sums to be referred under s 54A of the FCA Act to a Registrar of the Court for an opinion. Those orders are not opposed. They would require a further hearing for submissions as to whether the opinion of the Registrar should be adopted by the Court, unless questions relating to quantum can be agreed.

I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Charlesworth.