Ryan Michael Davies (As Liquidator of Shapeshift Global Limited) v BSV Claims Limited

Where an application requires case-management directions and must be heard alongside a related appeal, the court may order that the costs be costs in the application, particularly where an adjournment would still require protective interim orders. The court may defer questions about pre-application correspondence and the parties’ conduct until the judge determining the final costs of the application can assess those matters alongside the outcome.

The liquidator applied for directions in proceedings involving BSV Claims Limited. The application was case-managed for hearing together with the Novalpina appeal, which the judge regarded as central to the issues requiring determination. The immediate question was how the costs of the application should be dealt with, including whether the hearing could have been shorter and whether the parties had taken appropriate steps before commencing proceedings.

1. Costs order. The court ordered that costs be costs in the application. The application was a case-management matter which needed to be heard with the Novalpina appeal. From the outset, some direction from the court was required.
2. An adjournment would not have avoided the need for judicial intervention. Even an adjournment required a holding order giving the liquidator protection against concerns about his potential exposure. A hearing of some kind was therefore necessary.
3. The respondent argued that the hearing could have been shorter and cheaper and that its involvement might have been unnecessary. The judge accepted that the point might have merit, but neither party had attempted to find the solution ultimately reached. In those circumstances, neither side could fairly criticise the other on that basis.
4. The judge rejected the suggestion that the respondent had failed to understand the importance of the Novalpina judgment. The papers showed that the decision was central to the issues on the application.
5. The absence of pre-commencement correspondence was left for consideration by the judge deciding the application’s costs at the end. That judge could consider whether appropriate pre-application steps had been taken and could also take the outcome of the application into account.

The operative order was: costs in the application.