Garan Holdings Pty Limited v Stonepoint Capital Management (in liq)

Cases Cited: Cappello v HomeBuilding Pty Ltd [2023] NSWCA 109
Collier v Country Women’s Association of New South Wales [2018] NSWCA 36
Commissioner of Australian Federal Police v P [No 2] [2018] WASC 2
Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622
Wang v Cai (No 2) [2021] NSWSC 1268

Category: Costs

Parties: Garan Holdings Pty Ltd ACN 166 521 606 (First Plaintiff)
B & C Family Investments Pty Ltd (Second Plaintiff)
Charles Victor McIntosh (Third Plaintiff)
A.C.N 647 465 236 Pty Ltd (Fourth Plaintiff)
Stonepoint Capital Management Pty Limited (First Defendant)
Hunt Prosperity Pty Ltd (Second Defendant)
Hunt Wealth Partners Pty Ltd (Third Defendant)
Philip Sean Hunt (Fourth Defendant, in person)
Scott Schade (Fifth Defendant)
Rass QLD Pty Ltd (Sixth Defendant)
Fortico Associates Pty Ltd (Seventh Defendant)
Ariane Hunt (Fourth Respondent)

Representation: Counsel:
A Shearer SC (22 August 2025); S Gerber (written submissions) (Plaintiffs)
Z Graus (22 August 2025 and written submissions on 2 September 2025); C Bova SC (written submissions on 2 and 15 August 2025) (Fourth Respondent)
Solicitors:
Kardos Scanlan (Plaintiffs)
Artemide Law (Fourth Respondent)

File Number(s): 2024/00177025

Publication restriction: Nil

JUDGMENT

1. This judgment concerns the costs of a motion that was ultimately disposed of by consent.

2. In the substantive proceedings, the plaintiffs claim that Mr Phillip Hunt, Mr Scott Schade, and various related entities, mismanaged investment funds causing them loss.

3. On 3 June 2025, the plaintiffs sought a freezing order over the anticipated net sale proceeds of a property located in Mosman NSW, jointly owned by Mr Hunt, and his wife, Mrs Hunt. The freezing order was to last until the first day of the hearing, which was then scheduled to commence on 21 July 2025.

4. On 7 July 2025, Mr Hunt, representing himself, filed a motion seeking to vary the freezing order, so that only 50% of the sale proceeds be paid into Court, and the other 50% to be paid to Mrs Hunt, who is not a party to the proceedings.

5. On 8 July 2025, the Court acceded to Mr Schade’s motion to vacate the hearing dates. On that day, the plaintiffs orally sought an order extending the freezing order over the sale proceeds, in the absence of Mrs Hunt, until the first day of the new hearing. At that hearing, Mr Hunt orally referred to his motion, which was not at that time in the court file, nor listed before the Court that day. On 9 July 2025, the matter was set down for final hearing to commence on 11 May 2026.

6. On 22 August 2025, I made orders varying the freezing order as sought in Mr Hunt’s motion and supported by Mrs Hunt; by then, the plaintiffs consented to those variations.

7. Mrs Hunt submitted that the plaintiffs should pay her costs of the motion on an ordinary basis up to and including 8 August 2025 and on an indemnity basis from 9 August 2025, the date on which she filed her evidence and submissions. Mrs Hunt submitted that indemnity costs were justified because of the plaintiffs’ “unreasonable conduct” in resisting the motion and in failing to communicate their consent to the motion until 21 August 2025, being the eve before the hearing.

8. Those submissions were premised on the basis that the plaintiffs never had a proper basis for seeking a freezing order over the whole net proceeds of sale of the property, in circumstances where it could be demonstrated that Mrs Hunt owned at least 50% of the property.

9. The plaintiffs resisted Mrs Hunt’s proposed costs order, submitting that there should be no order as to the costs of the motion, because:

10. Mrs Hunt was a respondent acting in the role of an intervener and was not entitled to costs where her interests were already adequately protected by an existing party to the action, namely Mr Hunt.

11. It was reasonable for them to not consent to the orders proposed by Mrs Hunt, in circumstances where Mr Hunt, who moved on the motion, did not communicate his consent to the orders prior to the hearing.

12. For the following reasons, I consider the plaintiffs ought to pay Mrs Hunt’s costs of the motion.

Costs principles

11. There is no dispute about the principles relevant to the exercise of the Court’s costs discretion under s 98 of the Civil Procedure Act 2005 (NSW) and its inherent discretion. The general rule is that costs follow the event. Pursuant to r 42.7 of the Uniform Civil Procedure Rules 2006 (NSW), the costs of interlocutory applications are to be paid and otherwise dealt with in the same way as the general costs of the proceedings, unless the Court otherwise orders.

12. As Ward CJ in Eq (as the President then was) observed in Wang v Cai (No 2) [2021] NSWSC 1268, “[o]rdinarily where an interlocutory application is brought (say, for example, where an interlocutory injunction is granted and the defendant did not concede that injunctive relief) the costs of that application will be costs in the cause (or the successful party’s costs in the cause)”.

13. Further, where there has been no hearing on the merits, it is usually appropriate that there be no order as to costs, as it would be inappropriate for the Court to conduct what would amount in effect to a hypothetical trial in order to determine an application for costs: Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622 at 624-625 per McHugh J. However, costs may be awarded where one party has acted “so unreasonably” or where one party was almost certain to succeed if the matter had been determined at a hearing: Lai Qin at 624-625; Wang v Cai at [63].

Determination

14. I consider that it is appropriate to depart from the general rule that there be no order as to costs in the circumstances. As the hearing of the motion approached, the plaintiffs did not have any basis to contradict Mrs Hunt’s assertion that she held a 50% interest in the property, such that it was unreasonable for the plaintiffs to resist such to vary the freezing order in her favour.

15. I reject the plaintiffs’ submission that Mrs Hunt is not entitled to her costs because she conducted herself as an intervener and her interests were adequately protected by Mr Hunt. Mrs Hunt was appropriately named as a respondent to the motion on 18 July 2025 as her interests were affected by it. Further, Mr Hunt is a self-represented litigant. His submissions were about one page and accompanied by a one-page affidavit. It was not unreasonable for Mrs Hunt to obtain legal representation and take an active part in the motion.

16. I accept Mrs Hunt’s submissions that the plaintiffs have conducted themselves unreasonably, by resisting the orders sought by Mrs Hunt and by failing to respond to any correspondence, including an offer that Mrs Hunt made two days before the hearing to not seek her costs if the plaintiffs agreed to the orders.

Indemnity costs?

17. Mrs Hunt seeks an order that her costs of the motion be paid on an indemnity basis from 9 August 2025, being the date she filed her evidence and submissions in support of orders she intended to seek at the hearing of Mr Hunt’s motion. Mrs Hunt appears to assert that from this time it was unreasonable for the plaintiffs to resist the orders she sought, as it was apparent that she had a 50% interest in the property.

18. While the Court has a discretion to order costs on an indemnity basis it does not necessarily follow that if the Court orders a party to pay costs in the absence of a contested hearing, that those costs will be on an indemnity basis: Commissioner of Australian Federal Police v P [No 2] [2018] WASC 2 at [44] (Banks-Smith J). However, indemnity costs may be awarded against a party where there is some special or unusual feature: Collier v Country Women’s Association of New South Wales [2018] NSWCA 36 at [116] (Gleeson J). For example, the discretion may be enlivened where a party persists in what should have been seen to be a hopeless case, such as where the case was unduly prolonged by groundless contentions: see eg Cappello v HomeBuilding Pty Ltd [2023] NSWCA 109, at [46]-[48] (Mitchelmore JA, Meagher JA and Simpson AJA agreeing).

19. Here I consider that the plaintiffs’ continued refusal to engage with Mrs Hunt about her apparently incontestable proprietary interest and the freezing orders obtained in her absence, and their belated capitulation, amounts to unreasonable conduct that caused wasted time to the Court and Mrs Hunt, and unnecessary costs to Mrs Hunt.

20. I do not accept that Mr Hunt’s failure to formally indicate he consented to Mrs Hunt’s proposed orders meant there was no unreasonableness in the plaintiffs failing to communicate with Mrs Hunt. Mr Hunt was self-represented and there was no reason why he would have opposed the orders sought by Mrs Hunt, which were consistent with those sought in his motion.

Conclusion

21. The appropriate order is:

22. The plaintiffs to pay the fourth respondent’s costs of the fourth defendant’s motion:

(a) on an ordinary basis up to and including 8 August 2025; and (b) on an indemnity basis from 9 August 2025.

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