Rich Listers Avi Silver and Eddie Hirsch’s United Petroleum will have to pay almost all the costs of its legal opponents after running hopeless cases against its former law firm, Herbert Smith Freehills, and its former independent chairman, Martin Hudson, over a failed stockmarket float, a court has ruled.
In a scathing costs judgment, Victorian Supreme Court judge James Elliott said United “ought to have known that the case against Hudson had no real prospect of success” and its case against Freehills was “devoid of merit”.
United, which runs a chain of petrol stations, launched the lawsuits after Freehills sued it for more than $600,000 in fees run up in 2016, when the company was trying for a $1 billion stock exchange listing.
However, the listing fell apart after United management failed to produce financial information in time for it to be included in the prospectus, the court heard.
Costs in the case are estimated to run into the millions of dollars.
Justice Elliott said there was “some substance to the allegation that it appears Hudson was being pursued by the United parties for an ulterior purpose or with some ulterior motive”.
“Although it is not necessary to establish such purpose or motive in determining an award for indemnity costs ought to be made, it is not readily apparent why the United parties would otherwise have pursued Hudson in the manner in which they did.”
Justice Elliott also criticised Mr Silver for making “serious and unwarranted threats” against a witness, former United employee Hayden Stockdale, after learning Mr Stockdale was to give evidence against the company in the case. “It was plain from this, and other evidence before the court, that Silver did not take kindly to, and was most unaccepting of, anyone who crossed him with respect to the issues relating to these proceedings,” Justice Elliott said.
He awarded costs to Mr Hudson and Freehills on an indemnity basis, but limited to the scale amounts fixed by the court rather than any higher rate actually paid. “The United parties alleged a series of representations to underlie various causes of action,” he said.
“The evidence led on behalf of the United parties from Silver himself substantially failed to establish even a prima facie case in relation to these representations.”
Extracted from The Australian