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England and Wales High Court (Chancery Division) Decisions
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Fishman v Mangazeev [2025] EWHC 1270 (Ch) (31 January 2025)
URL: http://www.bailii.org/ew/cases/EWHC/Ch/2025/1270.html
Cite as:
[2025] EWHC 1270 (Ch)
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Neutral Citation Number: [2025] EWHC 1270 (Ch) |
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Case No: BL-2024-001333 |
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND & WALES
BUSINESS LIST (ChD)
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Royal Courts of Justice, 7 Rolls Buildings Fetter Lane, London, EC4A 1NL |
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31/01/2025 |
B e f o r e :
MR JUSTICE MILES
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Between:
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GRIGORI FISHMAN
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Claimant
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- and -
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VIKTOR MANGAZEEV
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Defendant
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Mr Bradley KC and Mr Pourghaidri (instructed by Greenberg Traurig LLP) for the Claimant
Mr McGrath KC, Mr Keller and Mr Lakshman (instructed by Quillon Law LLP) for the Defendant
Hearing dates: 30 and 31 January 2025
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HTML VERSION OF APPROVED JUDGMENT
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Crown Copyright ©
Mr Justice Miles :
Introduction
- This is an approved transcript of a judgment given on 31 January 2025. The defendant sought the court's determination of the level of living expenses to which he is entitled, for the purposes of an exception to a freezing order granted by Fancourt J on 3 October 2024, and embodied in a sealed order on 16 October 2024 ("the Fancourt order").
- I take the background from the skeleton argument served by the claimant. The allegations made in this part of the scope and argument are disputed by the defendant.
- On 17 July 2023, the claimant and the defendant entered into a loan agreement by which the claimant agreed to loan US $18.33 million to the defendant for up to eighteen months. The loan contained a negative pledge prohibiting the defendant from encumbering any interest in a property (the property being a mansion in Surrey ("the Property") owned by a BVI company ("Wadjet")) owned by the defendant and encumbering the shares in Wadjet.
- The claimant and the defendant further agreed that the defendant would grant the claimant a charge over shares in Wadjet as security for the loan. The defendant contends that there was no such agreement but Fancourt J found that there was strong evidence of such an agreement. He also said in his judgment ([2024] EWHC 2558 (Ch)) that the charge was not executed because the defendant was seeking to evade his responsibilities in a way that fell below the standards of commercial morality.
- In August 2024, the claimant discovered that a charge over the property had been granted to a third party, described as Hilco ("Hilco"). The defendant granted the charge to Hilco as security for a 12 month loan in the sum of £9.75 million, £8.15 million of which, net of fees and retained interest, was paid to the defendant. Hilco paid the funds into an account of the defendant at Barclays.
- The defendant granted Hilco security over the property without first telling the claimant or seeking his consent as required by the negative pledge. Fancourt J found that this was sharp practice below the generally accepted standard of commercial morality, and that it demonstrated that the defendant was willing to act covertly in an underhand way in order to extract a benefit from assets within the jurisdiction.
- The defendant contends that all of the liabilities between himself and the claimant, including the loan agreement, was settled by a deed of settlement dated 2 November 2023 entered into between the claimant, the defendant and a third party. Fancourt J decided that there was at least a good arguable case (in favour of the claimant) that the deed of settlement did not compromise the liabilities of the defendant under the loan agreement. He also recorded that the defendant accepted that prior to July 2024 his own belief and understanding was that the loan agreement remained in place.
- The amount of the outstanding loan between the claimant and the defendant (with interest) is currently about US $19.7 million, or about £16 million.
- The claimant applied for a worldwide freezing order (the "WFO"). There was a contested hearing and Fancourt J declined to make a WFO but did grant what was principally a domestic freezing order. His reasons for doing so included the following. First, on the evidence he was satisfied that the defendant's conduct amounted to sharp practice that fell below the generally accepted standard of commercial morality, and that the defendant was willing to act covertly in an underhand way. He said that the defendant's conduct was slippery, and demonstrated that he could not be relied upon to act honourably.
- Secondly, the judge declined to find that the defendant had engaged in improper dissipation of assets by reason only of the fact that the Hilco loan replaced equity in the property. As he explained, the loan monies remained within the jurisdiction and would appear not to have been wrongly dissipated.
- Thirdly, he was satisfied that there was a real risk that the Barclays balance or other assets in the jurisdiction would be used either in whole or in part otherwise than for proper business purposes.
- At paragraph 60 he said, "[o]n the other hand, the claimant did not identify any assets already abroad that suggested that the defendant intends to dissipate them in order to avoid a judgment - nor is there evidence to support such a case."
- Fourthly, Fancourt J considered that it was just and convenient to grant the injunction to the extent of assets within the jurisdiction.
- At the time of the hearing on 3 October 2024 counsel for both parties and the court wrongly thought that the Barclays account was located within the jurisdiction. In fact, as the defendant's representatives informed the claimant's representatives four days after the hearing, the Barclays account is located in the Isle of Man. The defendant accepted that the Barclays account fell within the intended scope of the freezing order and Fancourt J extended the freezing order so that it would also cover all assets of the defendant in the Isle of Man.
- At the time of the hearing before Fancourt J the evidence of the defendant himself was that he had substantial business assets outside the jurisdiction. His evidence was that he had over £100 million worth of assets abroad. As Fancourt J recorded in his judgment, the evidence before the court was that the assets that were known to the claimant within England and Wales at that time were limited to the equity in the Property, which could be anything between about £4 million and about £8 million depending on its value, and the cash proceeds of the Hilco loan, which were then thought to be about £6 million.
- As already noted, after the hearing of 3 October 2024, it became clear that the Barclays account was in the Isle of Man. In addition, on 11 October 2024, the defendant gave asset disclosure, in which he stated (inter alia) that he had no cryptocurrency assets that were worth more than £10,000 anywhere in the world.
- On 11 October 2024 the solicitors for the claimant drew this element of the defendant's disclosure to the attention of the judge and asked him to finetune the proposed order to require the defendant to disclose all cryptocurrency, wherever held, without a limit or a threshold as to value. The claimant also made written submissions on 10 October 2024 commenting on a draft order which had been marked up to show the parties' positions on various contested matters. I shall return to this below.
- The judge gave a supplementary judgment ([2024] EWHC 2638 (Ch)) on 18 October 2024 in which he gave the reasons for a number of decisions he had reached about the disputes between the parties as to the order, which was sealed on 16 October 2024.
- The order was a freezing injunction in respect of the defendant's assets in England and Wales and the Isle of Man up to the value of £19.7 million. It specifically prohibited any dealing with his shares in Wadjet. The judge also made specific orders in respect of the Property and any money standing to the credit of the Barclays account. The order also treated rights in cryptocurrency, wherever located, as if they were a domestic asset.
- Paragraphs 10 to 13 of the order were in the following terms:
"10.(1) The parties shall, by 4pm, 10 October 2024, agree a weekly figure for ordinary living expenses, moving forward. In the absence of agreement by that date, the Respondent shall apply to court.
(2) As an interim measure, this order does not prohibit the Respondent from spending £8,500 per week on ordinary living expenses prior to the agreement or determination of the Respondent's ordinary living expenses in accordance with paragraph [10(1)].
(3) The Respondent may, in addition, spend a reasonable sum on legal advice and representation but in respect of any transactions in excess of £10,000 in value, the Respondent must tell the Applicant's legal representatives where the money is to come from.
(4) This order does not prohibit the Respondent from making monthly payments to E.ON Next, in accordance with the payment plan agreed with E.ON Next on or around 6 August 2024. These monthly payments are in the sum of £12,635.30 per month and run to 10 May 2025.
(5) This order does not prohibit the Respondent from dealing with or disposing of any of his assets in the ordinary and proper course of business, but (subject to the consent mechanism in paragraph [12(2)] below) before doing so the Respondent must give the Applicant's legal representatives two clear working days' notice of his intention of doing so in respect of any transactions exceeding £10,000 in value.
(6) The Respondent may agree with the applicant's legal representatives that the above spending limits should be increased or that this order should be varied in any other respect, but any agreement must be in writing.
(7) The order will cease to have effect if the Respondent -
(a) provides security by paying the sum of $19,710,000 into court, to be held to the order of the court; or
(b) makes provision for security in that sum by another method agreed with the Applicant's legal representatives.
Consent mechanism
11. As an alternative to paragraph [10(5)] above, the Respondent may choose to provide notification of intended expenditure in the ordinary and proper course of business by means of a notification sent by his solicitors to the Applicant's solicitors, in which the Respondent's solicitors certify that they have inquired and are satisfied that the proposed expenditure will be in the ordinary and proper course of business, and
a. where the monies come from;
b. to whom the moneys are to be paid;
c. the purpose of the payment.
12. If the Respondent adopts the process identified in paragraph 11 above, the Applicant may only challenge the expenditure if he can establish proper cause. Any challenge must be made within two clear days of receipt of the notification provided at paragraph 11 above.
13. If the Applicant provides a notification pursuant to paragraph 12 above, the Respondent may issue an application seeking a determination in respect of the issue. Any such application must be issued and served within seven days of receipt of notification in paragraph 12 above."
The parties' positions
- The defendant says that the court should now determine the figure for living expenses in accordance with paragraph 10(1) of the Fancourt order. As the parties have not been able to agree a figure, a determination is sought. The living expenses in respect of which that determination is sought have been broken down into categories. One relating to tax liabilities has been agreed with the claimant and it has also been agreed that this will be added as a ringfenced expense payable from the frozen assets. There remain however outstanding disputes about rent, school fees and general living expenses.
- The defendant relies on the following principles set out in the case of Vneshprombank LLC v Bedzhamov [2019] EWCA Civ 1992 at paragraph 68:
"That follows, in my judgment, from the well established principles which apply to freezing orders which, so far as relevant, I would summarise as follows:
(1) The purpose of the freezing order jurisdiction is not to provide a claimant with security but to prevent a defendant from taking steps outside the ordinary course which will have the effect of rendering any judgment unenforceable; subject to this, a defendant should be entitled to do as he wishes with his own money. Just as the court will not inquire whether a proposed business expenditure is reasonable or prudent, so long as it is made in good faith, nor is it the business of the court to tell a defendant who has funds available that he cannot spend them on his ordinary living expenses in same way as he has genuinely been accustomed to do before the making of the order.
(2) A defendant who has only limited funds available, such that he will or may be unable to sustain his previous level of expenditure on living expenses, will have some hard decisions to make as to how and when to reduce his spending. But these are decisions for the defendant and not for the court.
(3) It is particularly important to ensure that a freezing order does not operate oppressively. The consequences for a defendant against whom an order is made are often severe and can be crippling. That is one reason why the claimant's undertaking in damages is so critical. An order which has the immediate effect of preventing a defendant from spending what he has been accustomed to spend on what are for him his ordinary living expenses creates a particularly acute danger of oppression, not least because of the effect it may have not only on the defendant himself but on members of his family for whom he is responsible.
(4) Conversely, the court must be alert to the danger that a defendant will seek to maximise the amount which he is permitted to spend, for example to ensure that as much as possible is kept out of the claimant's hands in the event that a judgment is ultimately obtained, and will therefore exaggerate what he has been spending on living expenses. That would be a form of dissipation of assets which it is appropriate to prevent.
(5) That danger can be avoided, however, by the exercise of a healthy scepticism about a defendant's assertions as to the nature and amount of his pre-freezing order expenditure. When appropriate, the court will require convincing support for such assertions. The more extravagant the expenditure, particularly if it appears reckless when seen in the light of the resources available to a defendant, the more sceptical the court is entitled to be. That applies with even greater force if there is reason to doubt the veracity of the defendant's asset disclosure or if his credibility is otherwise open to question, but this should not be viewed as a justification for embarking on extensive investigation of the merits of the underlying dispute or other issues of credibility which can only be resolved at trial. The questions remain questions of fact: what has the defendant been accustomed to spend and what was his actual past standard of living?
(6) It may also be appropriate, particularly in a case where there are serious doubts about a defendant's ability to continue to spend money on his living expenses at the same rate as he has been doing in the past, to "ring fence" significant items of expenditure so as to ensure that, while the defendant is permitted to incur them if he wishes, he cannot spend the money on something else, at any rate without further permission from the court."
- The claimant does not take issue with this statement of the principles. Indeed the claimant emphasises that the case shows that the court should exercise a healthy scepticism about a defendant's assertions as to the nature and amount of his pre-freezing order expenditure. The claimant also submits that, where appropriate, the court will require convincing support for such assertions, and that the more extravagant the expenditure, the more sceptical the court is entitled to be.
- The claimant advances criticisms about the quality and cogency of the evidence concerning the rent, school fees and other expenses. I shall return to these points below. However, the claimant raises a more fundamental point. He submits that the defendant should not be permitted to pay the expenses now identified by him from the frozen assets, unless and until he has disclosed his worldwide assets and explained how he funded his living expenses before the advance of the Hilco loan in July 2024.
- Counsel for the claimant took me to a number of well-known authorities, including Halifax v Chandler [2001] EWCA Civ 1750; Tidewater v Phoenixtide [2015] EWHC 2748 (Comm), and Fathollahipour v Aliabadibenisi [2014] EWHC 2120 (QB).
- The proposition for which the claimant cited these various authorities was perhaps best encapsulated in paragraph 37 of Tidewater, where Males J said:
"… in order to be permitted to use the frozen funds, the defendant must demonstrate "that he has no other assets with which to fund the litigation". This places an onus on the defendant to demonstrate that there are no other assets available, not frozen by the order, which he could use to pay for legal advice and representation in defence of the claim."
- The claimant contended (and I accept) that the same principles apply to living expenses as they do to legal fees.
- The claimant also relied on a passage in Grant and Mumford on Civil Fraud (1st edition) at paragraph 32-033 which states (omitting footnotes):
"For this reason, when determining whether and if so in what amount to permit exceptions for expenditure in the continued injunction, the court will want to be satisfied that the respondent does not have available to him "free assets" not caught by the injunction, which might be used for the purpose. Where the freezing order does not extend to the totality of the respondent's assets, it will generally be for him to show that he should nevertheless be entitled to utilise the frozen assets, to pay his expenses, etc."
- The text cites the decision of Warren J in Parvalorem v Ricardo Manuel Dos Santos Oliveira and Others [2013] EWHC 4195 (Ch) at paragraphs 52 to 53.
- In the Fathollahipour case, the respondent to an injunction applied for a variation of the injunction to enable him to mortgage a frozen asset in order to raise funds for legal expenses. Phillips J refused the application on the basis that the burden was on the respondent to satisfy the court that he did not have other unfrozen assets available to him to meet the relevant expenditure.
- Counsel for the claimant submitted that there is ample evidence that the defendant can fund his lifestyle from his assets abroad. At the hearing before Fancourt J his own evidence was that he had assets worth over £100 million abroad. There is also more recent evidence from which it appears that the defendant informed the solicitors for Hilco that his assets may exceed £200 million in extent.
- The claimant says that the defendant must also have funded his lifestyle from assets abroad before the grant of Hilco loan as there appear to be no other liquid assets within the jurisdiction, and that there is a strong inference that, if he chose to do so, he could continue to do so. He says that the defendant has said nothing at all about how he previously funded his lifestyle and has indeed deliberately refused to give any evidence about that issue despite being challenged; and has also refused to give any evidence about his current ability to fund his lifestyle from unfrozen assets.
- He says that this is a clear case for the application of the principle set out in cases such as Tidewater. The claimant has accepted that there could be an interim order allowing the defendant to pay the claimed expenses from his frozen funds, but on terms that the defendant should be required to give worldwide disclosure of his assets within seven days and provide unredacted versions of his Revolut bank accounts, which would enable the claimant and the court to see how he has historically funded his lifestyle. The matter could then return to the court for the defendant's entitlement to use the frozen assets to be determined.
- The defendant does not dispute the statements of principle taken from the cases and textbook set out above (and I shall apply them).
- Counsel for the defendant says however that as with all such statements from caselaw, they must be read in context. He says that many of the cases are extreme ones, where a party has already been found to be in breach of an order or has hidden assets or is in contempt of court. He also says that a number of the cases concern such matters as legal fees payable in other litigation than that in which the freezing order has been granted.
- He also observes that in a number of the cases, the court has emphasised that the touchstone is whether the respondent who seeks to use the monies in question has acted otherwise than bona fides. In particular he relied on the cases of Avant Petroleum Inc. v Gatoil Inc. [1994] WL 282938 and Campbell Muscles v Thompson [1985] 135 NLJ 1012.
- He says that the present case is a far cry on the facts from the cases relied upon by the claimant. The defendant also emphasises that ultimately the question is a discretionary one for the court, and that the touchstone is the overall justice of the respondent being allowed to use frozen assets.
- The defendant's counsel also submitted that, as the claimant had already sought worldwide disclosure of the defendant's assets and that has failed, the claimant's stance was an attempt to get the same information by other means. The defendant accepts that he has not disclosed his worldwide assets or given full information about the historic pattern of payments of his living expenses, but says that he has not been ordered to do so.
- The defendant, however, takes a more fundamental point. He says that the point now advanced by the claimant is not open to him. The defendant contends that the Fancourt order created a regime for the payment of living expenses from the frozen assets and for the determination of the amount of the expenses absent agreement. The defendant says that what is at issue at this hearing is the determination of the quantum of the expenses by reference to evidence about the expenses, and that there is no separate requirement under the Fancourt order for any evidence about (a) the defendant's unfrozen assets or (b) how he historically funded his living expenses. Counsel for the defendant says that that ship has already sailed. In legal terms, the defendant relies on the principles in Chanel Ltd v FW Woolworth & Co Ltd [1981] 1 WLR 485. The defendant says that the exercise provided for under the Fancourt order is essentially one of quantification and that the approach now proposed by the claimant (of requiring further asset disclosure as a precondition) would undermine the regime contained in the Fancourt order.
- The claimant takes issue with this analysis. He says that it is the defendant who is seeking a variation of the order and that the principle in Chanel has no application. He says, alternatively, that if that principle does apply there has been a sufficient change in the circumstances.
- Before turning further to those arguments, I should mention that on 20 January 2025 the claimant issued his own separate application seeking the worldwide disclosure of the defendant's assets. The claimant's solicitors contended in correspondence that the defendant's application itself raised questions as to whether the defendant should give disclosure of those asset (and I have already explained the basis on which the point is said to arise).
- The application was also based however on the further ground that the claimant might wish to apply for further asset freezing relief. The reason given for the timing of the application on 20 January 2025 was that it came soon after the service of the defendant's reply evidence on his application.
- At the hearing before me, counsel for the defendant said that his clients needed time and opportunity to respond to that application and if appropriate, serve evidence. At the outset of this hearing, I gave a case management ruling that, to the extent that it goes beyond the arguments based on Tidewater and the other cases I have referred to above, the court would not rule on the separate application at this hearing but would allow the defendant an opportunity to respond to it.
The Chanel principle
- The principles were helpfully summarised by Nugee J in Holyoake v Candy [2016] EWHC 3065 (Ch) at paragraphs 13 to 18:
"13. In Chanel Ltd v F W Woolworth & Co Ltd [1981] 1 WLR 485 ("Chanel"), the plaintiffs, in an action for trade mark infringement and passing-off, obtained ex parte interlocutory injunctions; on the inter partes hearing the defendants felt constrained to give undertakings and by consent the motion was stood over to trial (without being opened or the evidence read) on the defendants giving undertakings "until judgment or further order". The defendants then carried out some research which led them to think they had an argument after all and applied to discharge the undertakings. Foster J refused the application, and the Court of Appeal refused leave to appeal. Buckley LJ held (at 492D) that an order (or undertaking) expressed to be until further order gave a right to the party bound to apply to have the order (or undertaking) discharged if good grounds for doing so are shown. He then said he would assume (without deciding) that the evidence the defendants had uncovered would have enabled them to resist the motion, and continued (at 492H):
"The defendants are seeking a rehearing on evidence which, or much of which, so far as one can tell, they could have adduced on the earlier occasion if they had sought an adjournment, which they would probably have obtained. Even in interlocutory matters a party cannot fight over again a battle which has already been fought unless there has been some significant change of circumstances, or the party has become aware of facts which he could not reasonably have known, or found out, in time for the first encounter. The fact that he capitulated at the first encounter cannot improve a party's position."
14. In Woodhouse v Consignia plc [2002] EWCA Civ 275, a claimant who had unsuccessfully sought to lift a stay applied to do so a second time, and both the district judge and judge held that he could not have a second bite at the cherry. The Court of Appeal allowed an appeal. Brooke LJ, giving the judgment of the court, said that there was a public interest in discouraging a party from making a subsequent application for the same relief based on material which was not, but could have been, deployed in the first application; that one of the reasons was the need to protect respondents to successive applications from oppression [55]; but that although the policy that underpins the rule in Henderson v Henderson had relevance as regards successive pre-trial applications for the same relief:
"it should be applied less strictly than in relation to a final decision of the court, at any rate where the earlier pre-trial application has been dismissed." [56]
He then gave an example where an application for summary judgment under CPR Pt 24 had been dismissed, but a second application was made based on evidence that, although available at the time of the first application, was not then deployed through incompetence, but which was conclusive; the second application ought to be allowed to proceed [57]. The district judge and judge had therefore been wrong to regard the fact that the second application was a second bite at the cherry as decisive [58], and the court of Appeal proceeded to consider the second application on its merits, regarding the fact that it was a second bite at the cherry as an important factor [61], but in the event decided that it would be a disproportionate penalty for the claimant to lose his right to damages due to a pardonable mistake by his solicitor, and lifted the stay [63].
15. In Orb a.r.l. v Ruhan [2016] EWHC 850 (Comm) Popplewell J had to deal with a number of applications arising out of a freezing order made by Cooke J which had been obtained by the defendant (Mr Ruhan) against the claimants (the Orb Parties) [1]-[2]. The order required Mr Ruhan to fortify his cross undertaking in damages by charging certain shares [48]. Mr Ruhan had done so but the Orb Parties sought further fortification on the ground that the shares were inadequate security. Popplewell J dismissed the application for a number of reasons, the first of which was that it was open to the Orb Parties to take the point before Cooke J but they had failed to do so. None of the material relied on had come to their attention subsequently; Cooke J had given them an opportunity to raise any objections to the shares as fortification, but they had not raised the points now sought to be raised, although they were well known to them; there had been no significant or material change of circumstances [81]. Popplewell J continued [82]:
"That is fatal to this ground for discharge: see Chanel Ltd v FW Woolworth & Co Ltd [1981] 1 WLR 485. Mr Drake emphasised that that case involved a consent order. But the principle is well established, and often applied, in relation to contested interlocutory hearings. It is that if a point is open to a party on an interlocutory application and is not pursued, then the applicant cannot take the point at a subsequent interlocutory hearing in relation to the same or similar relief, absent a significant and material change of circumstances or his becoming aware of facts which he did not know and could not reasonably have discovered at the time of the first hearing. It is based on the principle that a party must bring forward in argument all points reasonably available to him at the first opportunity; and that to allow him to take them serially in subsequent applications would permit abuse and obstruct the efficacy of the judicial process by undermining the necessary finality of unappealed interlocutory decisions."
16. Mr Stewart also referred to a judgment of Etherton C in this action, Holyoake v Candy [2016] EWHC 1718 (Ch). The Claimants had initially applied for a notification injunction, making the decision not to apply for a freezing injunction. I granted that application in a modified form. The Claimants then applied for a freezing order after all. It was that application which came before the Chancellor. He dismissed it. The Claimants' counsel, Mr Trace QC, had submitted that all that he needed to show was the usual prerequisites for a freezing order, namely a good arguable case on the merits, a real risk of dissipation and that the balance of convenience favoured the grant of the order [18]. The Chancellor disagreed, saying [21]:
"I do not agree with Mr Trace's statement of principle. The starting point in such a case as the present is that the claimants must point to something that has happened since the grant of the original order. They must show something material has changed to make it appropriate to investigate the same issues over again at yet another extensive hearing with even more voluminous evidential material. Absent any such change, the application for a freezing order is not only a disproportionate call on the court's resources, but an abuse of the court's process, in effect making successive applications for the same objective but testing the court's willingness each time to see how far the court will go, each such application involving, to a greater or lesser extent, duplication of issues, evidence and arguments."
He then examined, and rejected, various matters which were said to amount to a sufficiently material change of circumstances.
17. These authorities are not entirely easy to reconcile with each other. The decisions in Orb v Ruhan and Holyoake v Candy proceed on the basis that a party who has sought and obtained relief on an interlocutory application cannot return to court and ask to extend (or "upgrade", in the words of the Chancellor) the relief without showing a material change of circumstances. It is easy to see the policy reasons behind such a principle which are well articulated by both judges. Chanel indicates that similar considerations apply where a party has submitted to an order, and that the question does not turn on whether the applicant did in fact have the evidence at the earlier hearing but on whether it was reasonably available to him. Yet in Woodhouse v Consignia the Court of Appeal held that the rule in Henderson v Henderson was not applied so strictly in interlocutory matters, that the judges below had been wrong to dismiss the second application as a second bite at the cherry, and that it did not matter that the evidence deployed had in fact been available to the applicant at the time of the first application, at any rate if the evidence was conclusive.
18. I propose not to resolve these difficulties at this stage …"
- Later, Nugee J addressed an argument based on the case of Butt v Butt [1987] 1WLR 1351. In that case, undertakings were given which expressly contemplated that a later application could be made which would not require the applicant to show a change of circumstances, and the Court of Appeal distinguished the Chanel case. At paragraphs 26 and 27 of Holyoake Nugee J said this:
"26. Both Chanel and Butt v Butt seem to me to be decisions based on the regular practice in what was then the motions court and is now the Applications court. Both are cases where the plaintiff sought an injunction initially ex parte, which was granted in the usual way until the return date when the matter came back inter partes. In the Applications court the well-known practice is that applications for interlocutory injunctions will be adjourned from time to time until they are ready to be heard, with a temporary injunction being granted (or undertaking given in lieu) to hold the ring until the application can be argued substantively. Once however the application has been argued and a decision made, that is usually intended to govern the position until trial absent a sufficient change of circumstances. What Chanel decides is that the position is no different if the respondent accepts, without the matter having to be argued, that the case for an injunction is made out, or, which comes to the same thing, gives an undertaking. In either case this is intended to dispose of the application and it cannot thereafter be reopened without good reason. What Butt v Butt decides is that the position is different if an undertaking is given, and is understood (not only by the other side but by the court) to be given, not as a way of disposing of the application, but as a provisional measure pending further investigation. In effect the respondent is merely agreeing to the undertaking temporarily, which is why Nourse LJ regarded it as significant that the motion was adjourned generally, rather than (as in Chanel) stood over to trial as the practice then was.
27. Seen in this light, it does seem to me that Butt v Butt is not truly analogous to the position here. There was nothing temporary or provisional about Newey J's order dealing with the first application: it was disposed of and that was an end of it. It was not in any sense adjourned and could not be restored – there was nothing left to restore. There is nothing in the terms of the order to suggest (nor any other reason to think) that Newey J understood he was being asked to make a temporary order preserving the position pending further consideration. Mr Plewman pointed to some of the phrases used by Mustill LJ such as "if it is made plain and understood by all concerned that the defendant may wish to apply for the discharge of the undertaking when his evidence is in order" (at 1355B), "giving effect to the explicitly evinced intention of the parties" (at 1355E), and "the defendant has signalled the possibility … of returning to court". He said that that was the same here. Attractively although the point was made, I do not accept it: it is to my mind an illustration of the danger of taking phrases out of a judgment and seeking to apply them to a different factual situation."
- Hence the principle is that where the relevant order is decided after argument or has been made at a hearing where there was an opportunity to make such an argument, it is usually intended to govern the position until trial, absent a sufficient change of circumstances which may include new evidence which was not available earlier. That principle applies not merely to points which were in fact argued and decided, but points which could and should have been raised at the hearing. That is clear from Chanel itself, where the defendant submitted by giving undertakings and did not contest the order being sought.
Application of the Chanel principle
- The question essentially comes down to whether one or other of the parties is seeking to reopen or disturb the existing regime contained in the Fancourt order. I have already set out above the terms of the Fancourt order.
- The order was limited to certain specific assets and therefore was not a case where the worldwide assets of the defendant were captured. It was therefore of the kind described in paragraph 32-033 of Civil Fraud, one where "it will generally be for him to show that he should nevertheless be entitled to utilise the frozen assets, to pay his expenses, etc."
- It is also relevant to consider the genesis of the Fancourt order. Immediately after judgment was given there was discussion between counsel about the draft order. Counsel for the claimant asked the judge whether he was intending to require disclosure of all assets or only those in England and Wales, to which the judge said that it was limited to England and Wales and the cryptocurrency assets as described in the judgment. (As I have already explained, the order was later extended to the Isle of Man.)
- The question of living expenses was also discussed and counsel for the defendant referred to the evidence before the court about the living expenses, put at £24,000 a week, and referred to the rent on the flat. The judge said that he would need to provide some material to justify that level of expenses before it was likely to be agreed by the claimant, and counsel for the claimant said that the order might need an interim figure. Counsel for the claimant also said that he was conscious of the principles in the Bedzhamov case and the right of the respondent to maintain existing living conditions.
- I have already explained how the location of the Barclays account emerged a few days after the hearing. The parties were unable to agree the terms of the order and they put before the judge in the usual way a marked up version of the order for him to rule on.
- In the marked up version, the defendant asked for a weekly allowance of £36,000 odd for living expenses. The claimant contended that the figure should, on the interim basis of the kind that had been proposed by his counsel, be limited to £8,000.
- In relation to paragraph 11 of the order, the claimant proposed the addition of a certification mechanism requiring the defendant to explain:
"why either (i) the business cannot meet its expenditure from its own funds; and (ii) the respondent cannot meet it from resources outside England and Wales."
- As I have already mentioned, the claimant served a note making submissions dated 10 October 2024 about the terms of the draft order. The note referred to the Bedzhamov case and then set out various concerns about the level of the expenses being sought. Paragraph 45 said this:
"Assuming appropriate evidence is provided in respect of the Rent, HMRC payments and school fees these should be permitted in separate specific lines and not part of the general weekly expenses. This is appropriate because the payments in question are very large, specifically identifiable payments in respect of specific liabilities which in some cases have a definitive end date. Moreover, the fact that the Respondent is in arrears indicates there is some doubt as to his ability to maintain spending as he has been."
- The claimant did not seek to argue that the defendant should not be able to have any of these expenses from the frozen assets. However, as explained in paragraph 53 above the claimant did seek the insertion of a specific provision requiring information about the use of foreign assets in relation to business expenses (and that was addressed in paragraphs 28 to 31 of the note).
- As already mentioned disclosure was given on 11 October 2024 and the solicitors for the claimant wrote to the court, inviting it to fine tune the order in the light of that disclosure.
- The judge made the order on 16 October 2024. He did not include the fine tuning proposed by the claimant. In relation to the submissions on living expenses, he said at paragraph 11:
"The parties were unable to agree a figure for living expenses. The Respondent sought £36,342.72 per week. If that is indeed a figure that reflects the ordinary style of living enjoyed by the Respondent before these proceedings were started, he is prima facie entitled to such an order. But the alleged basis for that order has not so far been disclosed by the Respondent to satisfy the Applicant. Adequate proof of such expenditure is obviously required. For example, a rent of £7,000 per week has been claimed, but the Respondent has not provided an unredacted copy of the tenancy agreement (or other documents) to establish his liability or need to pay that sum for his residential accommodation. While matters of sufficient proof are being explored, the Respondent invited me to make an interim order at the rate of £36,342.72 per week. In my judgment, that would be inappropriate, given the size of the weekly sum and the absence of documents to justify it at this stage. I therefore prefer the figure of £8,500 per week, in itself a substantial sum, which has some support in documents provided to the Applicant to date."
- Fancourt J then made the order, including the terms already set out.
- Drawing the threads together, my conclusions about the regime contained in the Fancourt order are as follows.
a. The order provided for the payment of legal expenses, legal fees, and business expenses from the frozen assets. It did not require the defendant to give disclosure of any other assets, or explain how he had funded his living expenses or indeed other expenses historically.
b. As to living expenses, there was no suggestion at the hearing that they should not come out of the frozen funds. At the time of the hearing it was self-evident on the defendant's own evidence that he had substantial other funds, and the inference was that he had been funding his lifestyle using funds outside the jurisdiction as he had no other apparent liquid funds within the jurisdiction than the local funds.
c. In paragraphs 10(1) and 10(2), there was a process for the quantification of the figure of living expenses. This was to be agreed by the parties or determined by the court. It was the figure that was to be determined not the principle. In the absence of agreement the determination was to be reached by reference to the provision of information about the amount of the living expenses under the principles set out in the Bedzhamov case. It was not to be done by reference to information either about his historical patterns of spending or his other assets. There was no suggestion by the claimant that that information was required before any such amounts could be paid.
d. In the same way, there was no such requirement in relation to legal fees or business expenses.
e. The only additional requirement proposed by the claimant was in relation to the consent mechanism, but that proposal was rejected by the judge.
f. In short, Fancourt J stipulated a regime for the payment of living expenses from the frozen funds and set out a mechanism for the determination of the figure for living expenses absent agreement. This included ruling on the kind of information required to justify the expenses sought.
g. One may test it this way. Suppose that within (say) a week of the order, the defendant had furnished full information justifying the various amounts sought, there could have been no serious suggestion that the claimant would have been able to revert to saying that the defendant was also required to provide full information about his other assets and the historical spending patterns.
- In short, in my judgment, the existing regime permitted the payment of living expenses (along with legal fees and business expenses) from the frozen assets. The only remaining question was the determination of the amount. The process for that to happen was itself anticipated in the order. The process of determining the amount of the allowable living expenses constitutes the implementation or working out of the order, not a variation of it. In my view, by applying to the court for the amount to be determination the defendant is not disturbing the regime contained in the Fancourt order. He is acting within it.
- Counsel for the claimant argued that what the defendant was seeking by his application was indeed a variation. He referred to the application notice which referred to the exercise before the court as a "variation" of the order. He said that the existing order allowed £8,500 per week plus some specified expenses, whereas what was sought was a much larger figure.
- I am unable to accept this. The question whether what is sought amounts to a variation of the regime contained in the Fancourt order is a matter of substance and the use of the word "variation" in the application notice cannot be conclusive. The Chanel principle involves matters of substantive justice, not mere formalism. The principle is designed to ensure that parties who have had an opportunity to advance arguments on interlocutory applications should do so once and for all and should not be allowed a second opportunity when they repent the stance they took at the original hearing.
- For the reasons given above, the regime contained in the Fancourt order does not require the defendant to provide the categories of information now sought. For similar reasons this case is different from cases such as Fathollahipour. In that case there was an application by the respondent to vary the order to allow the mortgage of an asset, which would otherwise not be possible under the terms of the order. By contrast, the defendant simply seeks the determination of the amount of the expenses which he is to be entitled to withdraw from the frozen assets and that does not require any substantive variation of the order.
- It seems to me, on the contrary, that the argument of the claimant that the living expenses sought should not be permitted to be paid from the frozen assets unless full disclosure of the unfrozen assets (and about historical patterns of spending) is given would amount to the claimant seeking to reopen or reargue a point that was available to the claimant at the date of the hearing (and the subsequent discussions leading up the order) but which he did not take at the time. The relevant principles were well established and indeed are set out in the well-known text book cited to me by counsel for the claimant. It was open to the claimant at the time of the hearing to advance the argument that none of the various expenses or legal fees should come from the frozen assets unless and until the defendant gave full disclosure of his assets and his historical spending. The claimant did not do so. It appears to me that the claimant's position falls squarely within the Chanel principle.
- Moreover, this is not a case where a series of completely unanticipated expenses is now being claimed. The defendant sought amounts for rent, school fees and other expenses at the time the order was being drawn up.
- Counsel for the claimant sought to rely on a passage in the supplemental judgment of Fancourt J at paragraph 7 in which he referred to the possibility of further assets being brought into the net of the freezing order on an application by the claimant. Fancourt J was not, however, addressing the question of living expenses or the source from which they could be paid. The position now being advanced by the claimant is not to do with the scope of the freezing order. It is concerned with the source from which the defendant may pay his expenses.
- A similar point was advanced by counsel for the claimant based on paragraph 63 of the main judgment. But that too was concerned with the reach of the injunction, not the regime for the payment of living expenses.
- Counsel for the claimant also argued that this case was akin to Butt v Butt, rather than Chanel. He said that the point simply had not been determined and that in any case the judge had left open the possibility of the parties coming back for different relief. I am unable to accept this submission. As explained by Nugee J in Holyoake, Butt v Butt was a case where the order expressly provided that it would be open to the relevant party to apply for the discharge of an order to which it had submitted without showing a change of circumstances. That is to be distinguished from Chanel where there was an effective hearing at which it would have been open to the respondent to contest the injunction, but where the respondent chose to submit. As already explained, in this case there was a full contested hearing which led to the imposition of the order. It was open to the claimant to contend that the defendant should not resort to the frozen assets without making disclosure about available worldwide assets. He could and, in my judgment, should have done so if he had wished to contend that the defendant could not use the frozen assets without making that disclosure.
- In summary, I consider that it is the claimant who is seeking to reopen the question of whether the legal expenses can be paid from the frozen assets without the defendant giving further disclosure of his unfrozen assets or patterns of historical expenditure. In my judgment, the defendant is right to say that the Fancourt order provided a mechanism for the determination of the quantum of the living expenses in the absence of agreement and also provided that the living expenses, once determined, could come out of the frozen assets.
- It is, therefore, for the claimant to show a sufficient change of circumstances to justify reopening this issue. Counsel for the claimant contended that there were a number of changes of circumstances.
- First, he said that the defendant had misled the court at the hearing on 3 October 2024 about the location of the Barclays account. But this point was raised by the claimant with the court before the order was finalised and was indeed addressed by Fancourt J in his supplemental judgment and was reflected in the terms of the order. The Barclays bank account was brought within the scope of the relevant assets and the order was extended to the assets of the defendant in the Isle of Man. There has therefore been no change of circumstances in this respect since the order was made.
- Secondly, the claimant says that the frozen funds have been depleted faster than was anticipated. He said they had been reduced from nearly £6 million to a little over £1 million. That is no doubt a matter of concern for the claimant. But in my judgment it does not amount to a sufficient change of circumstances to justify revisiting the order. There is no suggestion that the payments have been made in breach of the order. If the payments have been made properly and within the terms of the order, the depletion of the funds is a function of the exceptions to the order. It is not a sufficient change of circumstances to justify revisiting those exceptions.
- Thirdly, the claimant relies on the fact that asset disclosure was given after the hearing on 3 October 2024. But as I have explained, the asset disclosure occurred before the order was made and, indeed, the solicitors for the claimant wrote to Fancourt J on 11 October 2024, drawing attention to what they said was the surprising absence of disclosure of cryptoassets in the defendant's own name. I note that in the supplemental judgment at paragraph 6, the judge specifically referred to the solicitors having drawn this matter to his attention. Again, this is not a material change of circumstances arising after the date of the order.
- Fourthly, the claimant relies on a valuation that was commissioned in respect of the Property, putting it at some £13.25 million rather than £17.5 million the defendant had given some evidence about at the hearing. However, at the time of the hearing and as recorded in the judgment, the evidence was to the effect that the equity in the Property was in the order of £4 to £6 million. On the valuation now commissioned by the claimant, the equity would be in the order of £7.25 million. I do not think this is a material change of circumstances.
- Fifthly, the claimant contends that, in his evidence for the hearing before Fancourt J, the defendant said that he intended to use monies in the Barclays account for business expenses. The claimant says that the events since then show that he has not used a significant part of the Barclays monies for that purpose. I do consider this to be a relevant change of circumstances. In the relevant passages the defendant was setting out his intended expenditure in the event that there was no freezing order. The order being sought at that stage was a worldwide freezing order. In the event the freezing order was limited to certain specified assets and within specified jurisdictions. The defendant has made drawings on the Barclays account since then, as he has been permitted to do, but the fact that he has not, in the event, drawn on it heavily for business expenses is not a relevant change of circumstances. If anything, the fact he has not drawn on it favours the claimant as the depletion has been less than it would otherwise have been.
- Sixthly, the claimant contends that the evidence shows that some £2.6 million has been paid from the frozen assets to Hilco as a prepayment and that further sums of some £450,000 odd plus VAT have been paid as in respect of agreed waivers of breach of the arrangement between Hilco and the defendant. However, it is not suggested that this was a breach of the Fancourt order. Moreover as to the prepayment of £2.6 million, the effect of the payment has been to increase (rather than deplete) the equity in the Property. Again, I do not regard this as a material change of circumstances which would justify revisiting the regime set out in the Fancourt order.
- For these reasons, I reject the claimant's submission that the court refuse to determine the amount of the expenses for the purposes of the exceptions in paragraphs 10(1) and 10(2) of the order because of the failure of the defendant to provide full disclosure of his assets worldwide or his historical spending.
- I turn to the specific categories of expense, and the matters still in issue between the parties. I do so with the principles in the Bedzhamov case in mind and the need for healthy scepticism. I also take into account the specific findings of Fancourt J about the defendant which I summarised above.
- The first dispute concerns the rent. The defendant's evidence is that he and his family have occupied a property in London under a tenancy agreement dated 18 July 2024. He has explained that he and his family previously lived at another property under a tenancy agreement which was due to expire on 27 August 2024.
- The tenancy agreement for the new property was taken on a two year lease, with a deposit of £64,000 to be paid to Messrs Savills ("Savills"), the agents acting for the landlord. The rent is £34,667.67 per calendar month. A redacted version of the tenancy agreement has been provided to the claimant's solicitors. The defendant's solicitors have reviewed an unredacted copy of the tenancy agreement and confirmed that the property is in London, that the defendant and his wife are the tenants, that the defendant is solely responsible for the rent. They have also said the landlord is an independent party unconnected to the defendant who is resident in Texas. The defendant himself has reconfirmed such matters. I was also taken to an email from Savills, who explained that they were acting for the landlord. The defendant has said that he does not and did not know the landlord and has had no other dealings with him. A search at HM Land Registry shows that the property was bought by the landlord on 16 December 2013. Savills have said in the email that the property was previously rented in 2021 and that the present rental is consistent with market rents.
- The defendant says that in these circumstances he has provided sufficient evidence to justify the rent.
- The claimant makes the simple and straightforward point that, particularly with a rent of this scale, there is no reason why the defendant should not have provided an unredacted copy of the tenancy agreement to the claimant's solicitors. The claimant's solicitors have said that in the first instance only they and counsel will read it. But even with that assurance the defendant has refused to provide an unredacted copy. It seems to me that, given the scale of the payments and the healthy scepticism in which the court is entitled to apply, without a copy of the agreement itself, the defendant has done not enough to satisfy me about this element of the expenses. It seems to me that the claimant's lawyers should at least be able to know the location of the property and the identity of the landlord. They should be able to make their own investigations as to whether the landlord is an unconnected independent party.
- Counsel for the claimant said that the claimant would not object to this payment in the amounts claimed on condition that an unredacted copy of the tenancy agreement was provided. He said, further, that there should be no restriction on the claimant himself and his Russian legal adviser, Mr Plekhanov, being allowed to see the agreement.
- The defendant responded in his evidence that he is concerned that the claimant and Mr Plekhanov would in some way abuse the information. He has referred to certain statements which he says were made by Mr Plekhanov historically in relation to the tripartite settlement deed and has also said that the claimant has informed various third parties about these proceedings and the order.
- I have concluded that if the defendant wishes to include these expenses, it should be on condition that he provides an unredacted copy of the tenancy agreement to the claimant's legal team. They should look at it in the first instance and if they consider that it is necessary for it to be considered by the claimant and Mr Plekhanov they can then apply to me on paper, and I will consider that application. I shall hear the parties on the form of an order embodying this.
- In relation to school fees, the evidence shows that the defendant has two children. They are both of school age. They attend a private school in London. It appears from his evidence that they attend the same private secondary school. The fees are £9,900 each per term. On the evidence this is in line with fees charged by London private schools. The defendant has provided redacted invoices from the school for each of his children dated 4 September 2024. They include the surname of his children, but they do not set out further details which would enable the school itself to be identified. The defendant has also provided payment confirmation, showing amounts being debited to his bank account which correspond to the invoices.
- Counsel for the claimant makes a persuasive point by reference to a letter dated 8 January 2025 from the claimant's solicitor, which pointed out that it did not appear that the defendant's own solicitors were aware of the identity of the school. It appears on the evidence that the defendant's own solicitors have only seen the redacted invoices from the schools. In the 8 January letter, the claimant's solicitors asked for confirmation that the defendant's solicitors had indeed seen unredacted invoices and said that if they could give that confirmation, this element would be agreed. It appears somewhat remarkably that such confirmation has not been given. Again I agree with the position of the claimant that this amount should be allowed but only on the basis of the confirmation which I have just referred to being given. Again I will consider submissions about the terms of the order.
- As to other living expenses, the defendant originally provided a spreadsheet from which various amounts had been deleted. Although the defendant later explained that this had been downloaded before the deletions were made from his Revolut bank account, I consider that the claimant was entitled to see actual bank statements.
- In January 2025 the defendant provided redacted copies of his Revolut bank account and on that basis seeks the amount now set out in the draft order. The claimant does not any longer object to the quantum of these expenses. It does appear to me that the provision of the information by the defendant has been tortuous, and that the information sought should have been provided earlier.
- In conclusion, I have decided that the exercise I am undertaking is the determination of the figure for the purposes of paragraph 10(1) of the Fancourt order, subject to the provision of the relevant information and confirmations that I have referred to above.
Costs
- I turn to the question of costs. Both sides say that they ought to have their costs.
- The question of costs was argued by junior counsel for the parties, and I start by paying tribute to the quality of their arguments.
- Counsel for the defendant spoke first at my invitation. He argued that the defendant succeeded in full on the application, in the sense that the amounts sought to be included in the order by way of the figure for living expenses have been ordered by the court and that the general question about it open to the claimant to contend that there should first be full disclosure of assets was resolved in the defendant's favour.
- On the specific areas of debate, the defendant says that he succeeded on the amount of the household expenditure and on the rent and school fees, and while conditions have been imposed on his entitlement to those elements, in substance he has been successful.
- The claimant in turn sought his costs. He took me to two letters. First, a letter of the 6 October 2024, which was written even before the order was even made, which suggested in relation to rent that an unredacted copy of the tenancy agreement should be provided, along with bank statements showing the payment of rent for three months, and offered a confidentiality regime under which the copies would not be provided to anyone beyond lawyers.
- As to school fees the same letter asked for unredacted versions of the invoices, and in respect of household expenses suggested the provision of bank statements for the previous three months, annotated where necessary, to identify which payments fell into which category of household expenses. The letter said that that information would be a sensible starting point and might be sufficient on its own.
- The second was the letter of 8 January 2025 where the claimant's solicitors said that they would be content with the confirmation of the defendant's solicitors that they had seen the unredacted invoices and were satisfied that the school was a genuine one.
- Counsel for the claimant accepted that the claimant had not succeeded overall, and indeed had failed on the general objection based on the Tidewater case, but said that the defendant's counsel had said that the defendant was unaware of the point being taken at least until the application of 20 January 2025 by the defendant and that until then had thought that the exercise was a pure quantification exercise, and it was for that reason that the defendant's evidence had not dealt with the point of principle, albeit it had been raised by the claimant in his evidence.
- The claimant submitted that it would be fair for him to receive the costs in relation to the living expenses application (amounting to £108,000 odd) with the costs of his own application not being awarded. Counsel for the claimant said that was a fair, broad brush way of dividing up the issues.
- Counsel for the defendant said in reply that as regards the letter of 6 October 2024, the defendant had done slightly better in relation to school fees because I did not order the redacted invoices to be provided and pointed out that in relation to household expenses, the claimant did not actually offer to accept three months' worth of annotated bank statements but said that this was a starting point.
- He also pointed out that once three months' worth of statements, albeit in a different form were provided, the claimant said in its evidence that it needed a further three months worth of information and, ultimately six months' worth of statements were provided in the reply evidence.
- Counsel for the defendant also said that the general point of principle had led to substantial expenditure, particularly since the cross-application of 20 January 2025.
- It seems to me that overall the defendant has been substantially successful. He won on the point of general principle and, subject to certain conditions, has also succeeded on the specific amounts. The court, I think, should treat the defendant as the successful party.
- However, the court may depart from the general rule where the circumstances permit, and I think there is significant force in the submission made by counsel for the claimant that, even before the order was made, he made sensible proposals in the letter of 6 October 2024. I do not think however that this is a complete answer for at least two reasons.
- First, I agree with counsel for the defendant that the letter did not say that if this information was provided the expenses would necessarily be agreed. In certain respects, the letter referred to the provision of information being a helpful starting point or a sensible starting point.
- Secondly, when it came to the household expenses, as counsel for the defendant submitted, it was only when a further three months of bank statements were ultimately provided that the claimant indicated that the point would not be opposed.
- I do not think there is much in the point that the order finally made was more favourable to the defendant on school fees than that set out in the letter as it was only because the claimant made a more reasonable offer on 8 January 2025 that the matter was resolved in the way it was, and that was indeed what the claimant invited the court to order.
- In reaching an overall conclusion, it is necessary to reflect the success of the defendant. The case law shows that even where the other party can point to factors that displace the general rule, the overall success of a party is still to be given proper weight. I consider though that the defendant has been slow to provide information reasonably sought by the claimant and that this has been a significant factor leading to this hearing being contested. It seems to me, standing back and taking into account all of the submissions that have been made, that a fair and just and result in this case is no order as to costs.
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This transcript has been approved by the Judge