COSTS - Freezing order discharged - Whether costs should follow the event - Applicant failed to establish an unjustified dissipation of funds - Where respondent fails to reply to correspondence from the applicant - Where applicant fails to reach agreement with respondent prior to final hearing.
[3]
On 18 November 2025, I made orders discharging a freezing order which I had granted on 16 October 2025. I published reasons on 26 November 2025.[1] I invited the parties to address me on costs in the form of written submissions within seven days. Both the applicant ('Janette') and the respondent ('Warranooke') filed submissions and then submissions in reply. In light of the submissions, it has been unnecessary to provide the parties with a further hearing on the question of costs.
The reasons make clear the basis for discharging the freezing order. Those reasons are not reprised here in full. These reasons should be read with my earlier ruling.
While the usual approach in relation to costs is that a successful litigant is entitled to recover their costs, it is ultimately within the discretion of the Court to determine whether costs should be awarded. In the present case, defining success in the context of the application for the freezing order is more nuanced than simply pointing to its discharge. The conduct of Warranooke leading up to Janette's application is a factor which is relevant to the exercise of the costs discretion, even if not entirely determinative, and in my view should be brought to account.
Both parties assert an entitlement to their costs, treating the ultimate result as success.
Janette submits that Warranooke should pay her costs of and incidental to the application for a freezing order on a standard basis, or alternatively, that costs should be reserved. Janette says that it is now clear that Warranooke does not, and could not, assert any entitlement to the insurance proceeds and that Warranooke's recognition of that fact only emerged in the days immediately before the hearing on 18 November 2025.
Warranooke says that Janette's freezing order application was not a success because the orders made ex parte were discharged when the application was tested inter partes. Warranooke submits that the application for freezing orders should not have been brought at all.
It is helpful to consider the question of costs by reference to three phases of the proceeding:
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(a) the initial ex parte application;
(b) the first return and amendment of the orders; and
(c) the inter partes hearing of the freezing order application.
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Warranooke submits that Janette's claim to the whole of the insurance proceeds was misguided, and that had Janette merely pursued what it says she was entitled to in her early dealings with Warranooke, the dispute over the insurance proceeds may well have been resolved earlier.
In the context of the present application for costs, I reject Warranooke's submission that had Janette confined her claim to what Warranooke describes as the limit of her entitlement the matter would have been resolved earlier.
It is important to observe that Janette's claim to the whole of the insurance proceeds has not been resolved. Janette maintains her entitlement to the whole of the funds. I make (and have made) no findings as to Janette's entitlement to the whole of the funds. For the purposes of the freezing order application, I found only that, on the material before me, her claim was not sufficiently strong to justify the maintenance of the freezing order. It should be observed that Warranooke now accepts that it has no claim in its own right to the insurance funds. In addition to acknowledging Janette's claim to half of the funds, Warranooke also accepts that the estate of Peter Campbell may have a claim, which it has foreshadowed defending (if necessary) by a counterclaim against the estate. Whatever the future of those claims, it is clear that they will likely be contested. None of this carries much weight in the exercise of the costs discretion, apart from the fact that Warranooke's statement of its position came so late.
On 12 August 2025, Janette's lawyers wrote to Warranooke. At that time, Janette was aware that the insurance funds had been paid to Warranooke and believed that she was entitled to the entire benefit of the insurance policy, which existed to cover the house in which she had resided with her husband for many years. The letter laid out in considerable detail the basis of her claims to the funds.
Warranooke did not respond to the substance of her claims until 12 November 2025, just before the hearing on 18 November 2025, when it admitted Janette's claim in part, and laid out its position as to the balance of those funds.
Warranooke claimed that it had held the funds for a long period of time and had not sought to 'aggressively' dissipate the funds, despite being on notice of Janette's claim. Warranooke claims that Janette should have been aware of Warranooke's financial position, given her previous position as a director of Warranooke over many years, and realised that Warranooke was not unjustifiably dissipating funds. In substance, Warranooke submits that Janette ought not to have sought freezing orders despite the fact that Warranooke had not responded to Janette's letter of 12 August 2025.
In the context of this application for costs, Warranooke downplays the significance of its failure to respond to Janette's letter. Warranooke had been using the funds for its own purposes. While Janette was unaware at the time that the funds had been used by Warranooke, the use of the funds were later confirmed in documents obtained by her in discovery in related proceedings. The earlier refusal of the insurance broker to discuss the matter with Janette (on Warranooke's instructions) was, together with the discovery that the funds had been used by Warranooke, sufficient to reiterate her concern that Warranooke did not accept that she was entitled to any of the insurance proceeds.
In the absence of any response (let alone explanation) by Warranooke of its position, it was reasonable for Janette to proceed on the basis that Warranooke claimed the entirety of the funds as its own, and that its position was that Janette was not entitled to any of the proceeds.
Janette did not seek freezing orders straightaway, but only after she was seized of information which together, viewed in the context of an ongoing contested family dispute, demonstrated that the insurance funds were being used by Warranooke for its purposes. That information was not complete, but at face value it was a sufficient basis upon which to seek orders ex parte_._
Contrary to the submissions of Warranooke, had it responded to Janette's letter of 12 August 2025 in a timely way, the real issues in dispute may have been revealed sooner, potentially obviating the need for any application to this Court ex parte.
For all those reasons, I regard Janette's application for a freezing order as justified, and accordingly, she is entitled to the costs of and incidental to the hearing of 16 October 2025, at which she obtained ex parte the freezing orders.
[6]
The matter next came before me on the return of the application for freezing orders on 31 October 2025. Warranooke sought an expedited hearing of the freezing order summons, foreshadowing that at such a hearing, it intended to seek the complete discharge of the freezing orders. In the meantime, Warranooke merely sought an amendment to the freezing orders to permit the use of the frozen funds to cover legal fees.
Janette's ex parte application proposed orders, which departed from the usual form of such orders by precluding Warranooke's use of the frozen funds for legal fees in responding to the application. This departure from the standard form was not raised by Janette in her ex parte application before me. In all the circumstances, the freezing orders ought not to have been sought (or made) ex parte in that form. I made orders varying the freezing orders accordingly.
Warranooke's success in obtaining a variation of the freezing order entitle it the costs of and incidental to the hearing of 31 October 2025.
Warranooke's application to discharge the freezing orders was adjourned and orders made to facilitate an inter partes hearing. By the time the matter returned for hearing on 18 November 2025, Warranooke's position had become clear.
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By letter to Janette of 12 November 2025, a few days before the scheduled hearing on 18 November 2025, Warranooke said that it:
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(a) was not entitled to the insurance proceeds in its own right;
(b) held the proceeds on trust for Janette and the estate of her late husband; and
(c) was prepared to pay to Janette her share of the insurance funds and to settle Janette's application for a freezing order without the need for a further hearing and costs that would be incurred.
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Janette rejected the offer and pressed her application for a freezing order on the basis that she maintained her entitlement to the whole of the funds and not merely half.
Janette says that the offer made by Warranooke, which was later confirmed in the form of an undertaking given in Court on 18 November 2025, was demonstrative of the partial success of her application. Janette says that the freezing order was discharged because Warranooke had realised (quite late in the proceedings) that it had no entitlement to the insurance funds. She submits that because half of the funds continue to be disputed, that she was justified in maintaining her application for freezing orders over the whole amount, or at least until an undertaking to pay the amount had been given by Warranooke.
Warranooke submits that it:
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(a) was delayed in responding to the freezing order because it was wrongly prohibited (until 31 October 2025) by the freezing order from using its funds to seek advice;
(b) ultimately succeeded in having the freezing order discharged because, on the material and evidence it produced, the Court held that Janette:
(i) did not have a strong arguable case sufficient to justify the orders; and
(ii) could not establish aggressive dissipation of the funds for the purpose of frustrating this Court's processes, even though there was evidence of unauthorised dissipation.
[11]
In a context where Janette's position had been made clear as early as 12 August 2025, and where Warranooke failed to respond in a timely way, these submissions would not justify an award of costs. Warranooke was not delayed in setting out its position in response to Janette's letter of 12 August 2025 until the freezing order was made on 16 October 2025. Warranooke's success on the application to discharge the proceeding cannot be divorced from its late explanation of its position, and of the way the insurance funds had been used. Despite its success on the application, Warranooke's conduct (namely, its failure to respond to Janette's letter of August 2025) remain an important consideration on the question of costs in this application, as I have found in relation to Janette's ex parte application. Indeed, Warranooke's conduct might have supported Janette's application for costs, if it could have been taken in isolation.
Warranooke says that the position of Janette in response to its open offer should be taken as indicating that, irrespective of when the offer was made (whether immediately after Janette's letter of 12 August 2025, or on 12 November 2025), Janette would nonetheless have pressed a meritless application for freezing orders in relation to the whole amount, as she did in the hearing on 18 November 2025. Accordingly, Warranooke says that Janette should not recover any of her costs.
It is unhelpful to speculate upon what might have been the case had Warranooke responded with sufficient promptness to the letter of 12 August 2025. The fact that Warranooke did not respond, and that it instructed the insurance broker in the way that it did, and that it spent the insurance proceeds to which it was not entitled, were all factors which, in my view, justified Janette in seeking the freezing orders, and which entitle her to the costs of making that application.
Finally, Warranooke says that the open offer that it made on 12 November 2025 was in substantially the same terms as the undertaking it ultimately gave and, if accepted, would have avoided the need for a hearing. Warranooke submits that Janette's rejection of the offer to resolve the proceeding put the parties to the unnecessary cost of a hearing on 18 November 2025. I agree.
Janette's rejection of the offer appears to have been motivated by a desire to obtain from Warranooke an indication as to whether Warranooke would pay the remaining half of the proceeds of the insurance policy to the Estate. Warranooke rightly observed that Janette had no authority to represent the position of the Estate, or to negotiate on its behalf. Otherwise, Warranooke submitted, Janette's defence of the freezing orders was hopeless in the face of its open offer. I agree, and for that reason consider that Warranooke should receive its costs of and incidental to the hearing of 18 November 2025, to be calculated from the time that the offer was first formally rejected.
[12]
This is not a case where either party enjoyed unqualified success. As neither party can be considered to have clearly prevailed on their respective applications for cost, it is appropriate that each party bear their own costs of the costs applications.
Accordingly, I will make orders that:
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(a) Warranooke is to pay Janette's costs on the standard basis of and incidental to the application up to and including 16 October 2025;
(b) Janette is to pay Warranooke's costs on the standard basis of and incidental to the hearing of 31 October 2025;
(c) Janette is to pay Warranooke's costs on the standard basis of and incidental to the hearing of 18 November 2025 to be calculated from the date upon which the 12 November offer was rejected.
(d) Each party to bear their own costs of the costs application.
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[1]Campbell v Warranooke Pastoral Pty Ltd[2025] VSC 727 ('reasons').