You are here:
AustLII >>
Databases >>
Supreme Court of New South Wales >>
2024 >>
[2024] NSWSC 1489
Database Search
| Name Search
| Recent Decisions
| Noteup
| LawCite
| Download
| Context | No Context | Help
Michael Wilson & Partners Ltd as the assignee of Robert Colin Nicholls & Temujin International Limited (as trustee of Temujin International (trading) Trust) & Temujin Services Limited v Emmott âe" Final [2024] NSWSC 1489 (22 November 2024)
Last Updated: 22 November 2024
|
Supreme Court
New South Wales
|
|
Case Name:
|
Michael Wilson & Partners Ltd as the assignee of Robert Colin Nicholls
& Temujin International Limited (as trustee of Temujin
International
(trading) Trust) & Temujin Services Limited v Emmott – Final
|
|
Medium Neutral Citation:
|
|
|
Hearing Date(s):
|
18 November 2024
|
|
Date of Orders:
|
22 November 2024
|
|
Decision Date:
|
22 November 2024
|
|
Jurisdiction:
|
Equity - Commercial List
|
|
Before:
|
Hammerschlag CJ in Eq
|
|
Decision:
|
Judgment for the defendant
|
|
Catchwords:
|
CIVIL PROCEDURE – Application by the plaintiff for adjournment of a
final hearing set down three months earlier – Where
the plaintiff has
failed to comply with orders and directions of the Court without any explanation
– Where the plaintiff was
given the option of a later hearing if it agreed
to defer a bankruptcy application it had issued against the defendant and these
proceedings are possibly relevant to the bankruptcy proceedings – Where
the plaintiff declined to agree to defer – Where
the plaintiff’s
reasons for seeking an adjournment otherwise have no merit – Where the
defendant has complied with orders
of the Court for preparation of the matter
and is ready to proceed – HELD – Application for adjournment
refused
PARTNERSHIPS AND JOINT VENTURES – Existence of
partnership – Where the plaintiff asserts that the defendant established
a
partnership with two other (both bankrupt and one now deceased) persons to
provide legal and consultancy services and claims that
the defendant is obliged
as a partner to account to their estates, the plaintiff having taken an
assignment of their claims –
HELD – No such partnership was
established
|
|
Legislation Cited:
|
|
|
Cases Cited:
|
|
|
Category:
|
Principal judgment
|
|
Parties:
|
Michael Wilson & Partners Ltd as the assignee of Robert Colin Nicholls
& Temujin International Limited (as trustee of Temujin
International
(trading) Trust & Temujin Services Limited) (Plaintiff)
John Forster
Emmott (Defendant)
|
|
Representation:
|
Counsel:
On the Motion:
G Burton SC (Plaintiff)
J Baird
(Defendant)
On the substantive hearing:
No appearance (Plaintiff)
J
Baird (Defendant)
Solicitors:
Michael Wilson & Partners Limited
(Plaintiff)
Duggan Legal (Defendant)
|
|
File Number(s):
|
2016/034380
|
|
Publication Restriction:
|
Nil
|
JUDGMENT
- When
this matter was called on for hearing before me at 10:00am on the morning of the
trial, the plaintiff, Michael Wilson & Partners
Pty Ltd (MWP), moved
(on a motion which had been filed on 13 November 2024 in Court with my leave) to
adjourn the hearing. On that application,
it was represented by Senior Counsel,
Mr G Burton SC, who informed me that he was briefed only on the application and
not on the
substantive hearing. At all material times, MWP has been represented
by Mr Michael Earl Wilson (Wilson) who has also been its solicitor on the
record. The motion was supported by the 31st Affidavit of Wilson, sworn on 10
November 2024.
In this Affidavit, he deposes to the fact that he was an
international equity and capital partner of law firm Baker McKenzie in Sydney
and founder of the most successful group of new offices in the entire history of
that firm, anywhere in the world.
- I
dismissed the application. I said I would give reasons for the dismissal in my
final judgment. Mr Burton SC withdrew. MWP was called
outside of Court but,
predictably, did not appear. The matter then proceeded to final hearing. I
reserved judgment. Before I rose,
Mr Burton SC re-appeared and made a further
application for an adjournment which I also dismissed. This judgment includes
the reasons
for both dismissals.
APPLICATIONS TO ADJOURN THE
HEARING
- The
first application was, until about 11:30am on the morning of the trial, the most
recent in a series of attempts by MWP to avoid
the hearing. These included a
failed application to the Court of Appeal last Friday: Michael Wilson &
Partners Pty Ltd v Emmott [2024] NSWCA 269. On any view, what happened on
the morning of the trial was remarkable, to say the least.
- At
11:38pm last Friday night (that is, after the Court of Appeal judgment), Wilson
sent to my Chambers, by email, what, on its face,
is copy of a medical
certificate by a general practitioner in Kazakhstan. According to the
certificate, Wilson has winter flu and
bronchitis “causing much coughing
and loss of voice”. The doctor states that “Wilson will not be
capable to participate
in the planned hearing (remotely or in person) due to the
loss of his voice”. The solicitors for Mr John Forster Emmott
(Emmott), the defendant, gave MWP notice that the doctor was required for
cross-examination. Mr Burton SC said he thought the doctor might
be available
(by telephone – the Court having established a link to enable Wilson to
dial in and hear the proceedings). Mr
Burton SC told me that he believed Wilson
might be “auditing” the proceedings and there may be the medical
officer online
as well, but it was 3:30am in the morning in Kazakhstan, and he
could not say definitively.[1] My own
observation was there were noises on the telephone line consistent with someone
listening in. Either way, the doctor was not
produced and I rejected the medical
certificate. However, even had it been admitted, the adjournment application
would have failed
because of the plethora of reasons which count against it, as
described later. Although the application had earlier been rejected,
events
later in the morning, shortly to be described, fortify me in my conclusion that
the application was spurious.
- At
1:55am and 3:55am, respectively, on the morning of the trial, Wilson filed,
online, Affidavits by two persons known to him, not
medical practitioners, who
sought to give evidence that, according to their observations, he was not fit to
travel. One of the deponents,
who describes himself as President and CEO of the
national airline of the Republic of Kazakhstan, attached the medical
certificate.
The Affidavits were inadmissible, and I rejected them. The front
page of the Affidavits has Wilson as the solicitor on the record.
His supposed
indisposition was plainly not such as to prevent him from preparing the
Affidavits. There was no evidence from Wilson
himself about his state of health.
- The
substantive hearing took about 40 minutes. Almost immediately after the hearing
had concluded, two things happened.
- First,
Mr Burton SC re-entered the courtroom and said he had an oral application to
make, that the hearing be adjourned until Wednesday
20 November 2024 because
Wilson was coming to Australia after all and would leave Kazakhstan (where he
lives) that night.
- Second,
Wilson spoke on the telephone link with the Courtroom. He was able to speak, and
I could hear him clearly. Indeed, he spoke
over me. He repeated that he was
coming to Australia. I had previously informed Mr Burton SC and Wilson that I
would not entertain
remote appearances by practitioners in this matter and I
declined to hear from Wilson. Moreover, Counsel was briefed on the oral
application and Wilson himself had no speaking role to play.
- I
refused the oral second application. By then, the substantive hearing had
concluded. But beyond that, it fell to be dismissed for
all of the reasons
pertinent to the dismissal of the earlier adjournment application.
- The
inception of this litiscrescence goes back more than 22 years to December 2001
when MWP, a British Virgin Islands corporation
controlled by Wilson, made an
agreement with Emmott that Emmott would join MWP as a director and shareholder
from January 2002. The
agreement provided that upon its termination, Emmott had
to resign as a director and sell his shares to MWP or its nominee. The agreement
was expressed to be governed by the law of England and Wales and included a
clause that all disputes go to arbitration in London.
- A
summary of the dispute and litigation which it spawned until 2011 appears in the
decision of the High Court of Australia in Michael Wilson & Partners Pty
Ltd v Nicholls & Ors (2011) 244 CLR 427, and until 2021, in the decision
of the New South Wales Court of Appeal in Michael Wilson & Partners Pty
Ltd v Emmott [2021] NSWCA 315; (2022) 396 ALR 497. The judgments of Judge
Pelling KC sitting as a judge of the High Court of Justice of England and Wales
(EWHC) in Michael Wilson & Partners Ltd v John Forster Emmott
[2024] EWHC 449 and Michael Wilson & Partners Ltd v John Forster Emmott
[2024] EWHC 2731 are instructive. In the first of these decisions, Judge
Pelling KC referred to the fact that numerous orders had been made in that
jurisdiction certifying claims and applications by MWP to be totally without
merit, up to and including Court of Appeal level, and
two extended civil
restraint orders (apparently the equivalent to orders under the Vexatious
Proceedings Act 2008 (NSW)) have been made against MWP in relation to
discrete elements of the litigation between the parties or in related claims. It
seems that MWP and unmeritorious claims may not be strangers to one another.
Further reference to his Honour’s judgments is
made later. I also observe
that the Court of Appeal considered that some parts of the Affidavits before
that Court could fairly be
described as scandalous, in terms of criticisms of
Ball J’s actions, and should have never been made by a legal practitioner
in the manner in which they were expressed: Michael Wilson & Partners v
Emmott [2024] NSWCA 269 at [24].
- I
have endeavoured below to identify the critical events which get us here.
- MWP
ran (and still runs) a law and consultancy practice in Kazakhstan.
- Mr
Robert Colin Nicholls (Nicholls) was a barrister of this Court and was
employed by MWP as a Senior Associate from 24 April 2004 until 1 March 2006.
Nicholls died
on 28 February 2017. Mr David Ross Slater (Slater), a
solicitor of this Court, was employed by MWP from 1 December 2005 to 9 January
2006.
- Each
of Nicholls and Slater left MWP. Slater incorporated, in the British Virgin
Islands, two companies, Temujin International Ltd
(TIL) and Temujin
Services Ltd (collectively, the Temujin Companies), to provide legal and
consultancy services. TIL opened an office in Almaty, Kazakhstan in January
2006.
- On
20 December 2005, Emmott signed a Co-operation Agreement in Almaty with Slater,
Nicholls and a Mr Arman Shaikanov (Shaikanov), a Kazakh lawyer resident
in Almaty. The Co-operation Agreement provided for the establishment of a
consultancy to be owned and
operated by TIL to provide legal consultancy
services in Almaty. It also provided for Emmott to have the option to join the
consultancy
when he was legally free to do so, if he so elected. He became a
consultant to the Temujin Companies pursuant to a written but unsigned
Consultancy Agreement dated 13 August 2007 (the Consultancy
Agreement).
- The
Consultancy Agreement provides that it is to be governed by and construed in
accordance with the laws of New South Wales and disputes
are to be resolved by
arbitration in London.
- Nicholls
also became a consultant to the Temujin Companies.
- In
July 2008, Nicholls and Slater had an acrimonious falling out with one another.
Nicholls apparently departed Kazakhstan. In about
2010, Slater closed
TIL’s office in Almaty.
- MWP
sued the three of them and the Temujin Companies in various jurisdictions. It
sued Emmott in London in arbitration proceedings
under the arbitration clause in
the Co-operation Agreement between it and Emmott. It sued Nicholls, Slater and
the Temujin Companies
in this Court.
- The
first instance proceedings in this Court were heard and determined by Einstein
J: Michael Wilson & Partners Ltd v Nicholls [2009] NSWSC 1033. MWP
substantially succeeded. Nicholls and Slater were held jointly and severally
liable to pay it US$3,508,793.91, €555,258.94
and A$4,000,000.
- Emmott
was not a party to those proceedings and is not bound by any findings made in
them.
- The
judgment was overturned by the Court of
Appeal,[2] which found apprehended
bias on the part of the trial judge because his Honour had dealt with a number
of applications in Chambers
and without notice to MWP. However, the High Court,
with compelling reasons, reversed the decision of the Court of Appeal and
remitted
the matter to that Court for consideration of specified grounds in the
Notice of Appeal and Notice of Cross-Appeal: Nicholls v Michael Wilson &
Partners Pty Ltd [2012] NSWCA
383.[3] The ultimate outcome was that
MWP was held entitled to judgment against Nicholls and Slater for USD$1,106,090
and €618,449
(including pre-judgment interest).
- In
the arbitration, Emmott was held liable to MWP on some, but not all, of the
equivalent claims against Nicholls and Slater. However,
MWP was held liable to
Emmott for payment for his shareholding and for payment of undrawn accumulated
profits. The result was a net
award in favour of Emmott for USD$667,859 and
£3,209,613. The fact that MWP is a claimed judgment debtor of Emmott for a
large
sum is significant. It was not suggested or claimed in the arbitration
that Emmott went into partnership with Nicholls or Slater.
- Nicholls
and Slater were made bankrupt on 16 February 2015 and 22 December 2015
respectively, and the Temujin Companies were later
wound up, at the suit of
MWP.
- In
2016, MWP took an assignment of the rights against Emmott of the trustees in
bankruptcy of Nicholls and Slater and the liquidators
of the Temujin
Companies.
- In
February 2016, as assignee, MWP initiated these proceedings by Summons and
Commercial List Statement. It sought:
(1) contribution from Emmott in respect of the liability of Nicholls, Slater and
the Temujin Companies under the NSW judgment (this
has been referred to as
the Contribution Claim); and
(2) a declaration that Emmott, Nicholls and Slater had established a partnership
(the Temujin Partnership) and an account of all benefits received by
Emmott as a partner (this has been referred to as the Partnership Claim).
- The
initiating process was served on Emmott in England without leave. Emmott sought
an order setting aside the service because it
was not authorised under the
Uniform Civil Procedure Rules 2002 (NSW) (UCPR) or, alternatively,
for a permanent stay on forum non conveniens grounds.
- Ball
J (as his Honour, Ball JA, then was) permanently stayed the proceedings:
Michael Wilson & Partners Pty Ltd v Emmott [2019] NSWSC 218.
- MWP
appealed. The appeal and application for leave to appeal were listed for
concurrent hearing on 25 November 2019. On the morning
of the hearing, Wilson
applied to have the hearing date vacated to enable him to brief counsel. The
Court granted the application
on terms requiring the provision of additional
security for Emmott’s costs.
- The
procedural history leading up to the appeal is set out in Michael Wilson
& Partners Pty Ltd v Emmott [2020] NSWCA 245 at [1]- [23]. The history
included a failure by Wilson to comply with orders of the Court.
- Ultimately,
the Court of Appeal heard the appeal and allowed it in part. The effect of the
judgment was to grant leave to MWP to serve
proceedings on Emmott in England
insofar as they related to the Partnership Claim but to stay the Summons
permanently with respect
to the Contribution Claim: Michael Wilson &
Partners Pty Ltd v Emmott [2021] NSWCA 315; (2022) 396 ALR
497.[4]
- Emmott
applied to the High Court of Australia for special leave to appeal, which
application was dismissed with costs on 8 September
2022: Emmott v Michael
Wilson & Partners Limited; Michael Wilson & Partners, Limited v
Emmott [2022] HCASL 142.
- It
is the Partnership Claim which is now to be tried.
- As
Commercial List Judge since early 2022, Ball J case managed these proceedings.
Since 18 November 2022, there have been no less
than 18 appearances, mostly
before his Honour, for directions and determination of motions brought by both
sides. Additionally, orders
have been made in Chambers by consent. When Wilson
appeared, Ball J permitted him to do so remotely by telephone or audio-visual
link (AVL). The occasions upon which the matter has occupied the Court
include:
(1) 18 November 2022 (MWP was represented by Senior and Junior Counsel, and
Emmott by Junior Counsel);
(2) 30 January 2023 (MWP was represented by Senior and two Junior Counsel, and
Emmott by Junior Counsel). His Honour dealt with various
motions;
(3) 24 February 2023 (MWP was represented by Wilson via AVL). His Honour stood
the matter over to 31 March 2023;
(4) 21 April 2023 (MWP was represented by Wilson via AVL). Orders were made for
service by MWP of any further evidence by 3 July
2023 and for Emmott to serve
evidence in response by 31 July 2023. The matter was stood over to 1 September
2023 with a view to taking
a hearing date;
(5) 14 July 2023 (MWP was represented by Junior Counsel, and Emmott by Junior
Counsel). Counsel for MWP said that it had put on its
evidence. MWP had filed a
motion for discovery but did not wish to move it at that time. His Honour stood
the motion over to 1 September
2023, giving MWP leave to file and serve an
Amended Notice of Motion;
(6) 31 August 2023 – his Honour made orders in Chambers listing the motion
on 6 October 2023. On 5 October 2023, the listing
was changed to 10 November
2023.
(7) 10 November 2023 (both parties were represented by Junior Counsel). Ball J
ordered that neither party may file a motion without
leave of the Court, with
such application for leave to be supported by a short outline of submissions not
exceeding one page, and
a short affidavit not exceeding three pages, with
annexures and exhibits not exceeding ten pages;
(8) 16 November 2023 (both parties were represented by Counsel. Wilson was
present in Court). His Honour made orders in relation
to discovery and security
for costs;
(9) 16 February 2024 (both parties were represented by Counsel). There were two
motions before the Court: one in relation to security
for costs and another
seeking further discovery. His Honour reserved judgment. His Honour gave
judgment on 28 February 2024: Michael Wilson & Partners Ltd as the
assignee of Robert Colin Nicholls & Temujin International Limited (as
trustee of Temujin
International (trading) Trust & Temujin Services Limited
v Emmott) (No 3) [2024] NSWSC 163;
(10) 1 March 2024 (both parties were represented by Counsel). MWP asked for a
hearing date. Amongst others, there were directions
for MWP to serve all further
evidence. His Honour made a guillotine order with regard to MWP’s
evidence;
(11) 16 April 2024 which led to a judgment handed down by his Honour on 24 April
2024: Michael Wilson & Partners Ltd as the assignee of Robert Colin
Nicholls & Temujin International Limited (as trustee of Temujin
International (trading) Trust) & Temujin Services Limited v Emmott (No
4) [2024] NSWSC 438 concerning an application by MWP to file what was
described as a ‘Further Restated and Further Amended Summons’ and a
‘Restated and Further Amended Commercial List Statement’;
(12) 10 May 2024 where his Honour directed that MWP file and serve the final
version of its Summons and Commercial List Statement
in accordance with his
Honour’s judgment delivered on 24 April 2024;
(13) 14, 17 and 21 June 2024 before Stevenson J (Wilson appeared for MWP and
Counsel appeared for Emmott). Stevenson J made orders
for the service of expert
evidence;
(14) 28 June 2024 (MWP was represented by Wilson and Emmott by Junior Counsel);
and
(15) 23 August 2024 (MWP was represented by Wilson and Emmott by Junior
Counsel). Ball J expressed an intention to set the matter
down for hearing
commencing 18 November 2024. Wilson, on behalf of MWP, said they had not had a
chance to consult as to dates and
were happy to provide them by Monday. Counsel
for Emmott gave an estimate of four to five days. Wilson gave an estimate of ten
days.
Wilson informed his Honour that Mr Burton SC was briefed.
- What
this history demonstrates is that, on numerous occasions, MWP had Counsel
briefed and that the case was intensively case managed
by his Honour with full
participation by both sides until it was fully ready for hearing when (as is
more fully referred to below)
his Honour set it down with a three-month lead
time.
- In
the meantime, on 11 July 2024, MWP obtained a certificate of taxation in the
High Court of Australia certifying that its costs
against Emmott (in respect of
his unsuccessful special leave application) had been assessed and allowed at
$28,561,97.
- On
26 July 2024, MWP purported to serve on Emmott, by email to him in the United
Kingdom and to a solicitor said to be acting for
him in other matters, a
bankruptcy notice.
- On
26 August 2024, the matter came before Ball J. Wilson appeared for MWP and
Counsel appeared for Emmott. His Honour asked for the
parties’ estimates
of the time required for the hearing. Junior Counsel for Emmott gave an estimate
of four to five days. There
was reference by Junior Counsel for Emmott to an
estimate of four days having been given by Senior Counsel for MWP who had
previously
appeared in the matter, but Wilson indicated that this estimate was
related to a preliminary issue whether the Temujin Partnership
had been
established. Wilson said at least two weeks was necessary. I need not determine
whose estimate was better, suffice it to
say that, in my estimation, five days,
for all issues, is generous. I observe that the practice in the Commercial List
is that cases
start on the fixed date and run to conclusion. They do not become
part-heard. Although the matter was fixed before me on an estimate
of five days,
it would have run to its conclusion even if it took ten or fifteen.
- Ball
J proposed to set the matter down for hearing, commencing 21 July 2025. Counsel
for Emmott then drew to his Honour’s attention
the existence of the
bankruptcy notice and submitted that there was an intention (on the part of MWP)
to delay the hearing of these
proceedings so that MWP could move to bankrupt
Emmott before this case was heard. Counsel said that, if MWP were to undertake
to
the Court not to take any further action on the bankruptcy notice, there
would be no objection to that hearing date. Wilson, on behalf
of MWP, was not
prepared to give that undertaking. His Honour said that he would set the matter
down commencing on 18 November 2024.
Wilson maintained that they were not
available in November or December 2024 because of prior commitments. His Honour
repeated (twice)
that MWP had a choice of agreeing to a stay of the bankruptcy
notice or facing a hearing on 18 November 2024.
- His
Honour said “I am not going to permit this case to go off on the basis
that you are able to bankrupt the defendant in circumstances
where the issues in
this case are relevant to the question of bankruptcy. Now, that is your
choice”.
- The
hearing concluded with the following exchange:
HIS HONOUR: Very well, I’ve heard enough. This matter is ready for
hearing. The matter is in the Commercial List and the parties
ought normally
expect that the matters in this list will be heard promptly. This matter has
already taken too long to come to a hearing.
In those circumstances, I set the
matter down for hearing commencing on 18 November. I will make the usual order
for hearing. I’ll
adjourn.
WILSON: MWP is not available on those dates, your Honour.
- On
5 September 2024, Stevenson J, in Chambers, refused leave to MWP to file a
motion dated 4 September 2024.[5] His
Honour gave reasons: Michael Wilson & Partners Ltd as the assignee of
Robert Colin Nicholls & Temujin International Limited (atf Temujin
International
(trading) Trust & Temujin Services Limited v Emmott) (No
5) [2024] NSWSC 1127. After referring to an exchange on the transcript
between Wilson and Ball J on 26 August 2024, his Honour said at
[6]-[13]:
There was some discussion of whether counsel evidently retained by the
plaintiff, Mr Burton SC, was available during the week commencing
18 November
2024.
His Honour said:
“I have here an email which says that your counsel is available between 18
and 25 November.”
It does appear that His Honour was mistakenly referring to an email from the
defendant’s solicitors which spoke of the defendant’s
counsel’s availability.
But that temporary misapprehension did not affect the outcome as, immediately
following his Honour making the statement I have set
out at [7] above, the
following exchange took place:
“WILSON: I haven’t seen any such email. How have you got such an
email? I’ve not seen one. I left for the dates
of Mr Burton which I
haven’t received. I’ve been chasing him this morning.
HIS HONOUR: In that case, you’re in no position to say your
counsel’s not available.”
It was on that basis, and on the basis of Mr Wilson’s refusal to give an
undertaking concerning the bankruptcy notice, that
his Honour fixed the matter
for hearing on 18 November 2024.
In those circumstances, I am not persuaded that I should give the plaintiff
leave to bring an application to vacate the hearing date,
nor to vacate the
date.
The hearing date is over two months away. If Mr Burton is not available on 18
November, the plaintiff has adequate time to retain
alternate counsel.
The plaintiff’s notice of motion of 4 September 2024 is dismissed.
- I
respectfully agree entirely with Stevenson J’s approach.
- By
Summons filed in August 2024, MWP sought orders under the Foreign Judgments
Act 1991 (Cth) for the registration of a number of foreign judgments
and orders which had been made against Emmott. Schmidt AJ ordered that those
proceedings be stayed pending determination of Emmott’s set off
proceedings: Michael Wilson & Partners Limited v Emmott [2024] NSWSC
1258. Her Honour observed that the application was dealt with by the Registrar
without notice to Emmott, and Wilson did not disclose to
the Registrar that MWP
had already taken steps to enforce disputed judgments and orders in proceedings
in England or that Emmott
had brought proceedings in England for orders setting
off against some of those judgments, judgments in Emmott’s favour.
- On
2 October 2024, MWP lodged a Creditor’s Bankruptcy Petition against Emmott
in the Federal Circuit & Family Court of Australia,
based on the High Court
costs order.
- On
4 November 2024, Emmott filed a Notice Stating Grounds of Opposition to the
Bankruptcy Petition. His grounds include invalid service
of the bankruptcy
notice and his counterclaim against MWP arising out of the London Arbitration in
amounts of USD$667,859 and £3,209,613,
which have been registered as
judgments in the United Kingdom.
- In
addition, Emmott claims an entitlement to costs arising from the London
Arbitration exceeding £2 million. He has brought the
proceedings referred
to above in England for an order that he is entitled to set off costs orders in
his favour against any costs
orders made in favour of MWP against him.
- Wilson
unsuccessfully applied to strike out Emmott’s set-off proceedings and for
an order debarring Emmott from further participating
in any of the various
claims or applications in the EWHC until after Emmott pays some costs due:
Michael Wilson & Partners Ltd v John Forster Emmott [2024] EWHC 449.
The EWHC ordered, on a case management basis, that the proceedings in that Court
be stayed generally until after final judgment in
the trial before this Court,
save and except for an application dated 20 October 2023 which was listed for
hearing on 1 November
2024 (the nature of the application and what happened with
it is not clear to me). One of the bases upon which Wilson challenges
Emmott’s asserted right of set-off is that Emmott assigned his claim
against MWP to a litigation funder (Sinclair – who
has also since been
made bankrupt) and MWP bought this claim from Sinclair’s bankrupt
estate.
- Leaving
aside the proceedings which were set down for 1 November 2024, none of the
pending EWHC proceedings was to be heard before
this case.
- When
Ball J set these proceedings down for hearing, his Honour made the Usual Order
for Hearing being Annexure 3 to Practice Note
SC Eq 3. Paragraphs 13 to 16
provide:
13. No later than five working days before the hearing the plaintiff shall file,
paginated and indexed, a Court Book in electronic
form with two physical copies,
intended to be tendered at the hearing by any party. Any party may apply to the
Court for an order
limiting the documents to be included in the hard copy
version of the Court Book. The index of documents should indicate documents
the
tender of which is agreed and, in relation to the documents as to which there is
no agreement, which documents they are and whether
lodged on behalf of the
plaintiff or on behalf of any other party to the proceedings and, if so, which
party.
14. No later than two working days before the hearing all parties' barristers or
solicitors shall cause to be filed a folder of all
affidavits, statements and
reports to be relied upon at trial with an index setting out in alphabetical
order:
14.1 the name of the deponent or maker of the statement or report;
14.2 the date of the affidavit, statement or report; and
14.3 a short statement identifying the role of the deponent or the maker of the
statement or report.
Each lay affidavit which refers to documents must include cross references to
where those documents can be found in the court book.
15. No later than two working days before the hearing each barrister or
solicitor shall cause to be filed and served a short outline
of submissions; a
statement of the real issues for determination; a list of authorities; and a
chronology of relevant events.
16. Compliance with orders 13, 14 and 15 is to be by delivery to the trial
Judge’s Associate or, if the identity of the trial
Judge is unknown at the
time for compliance, by delivery to the List Judge’s Associate.
- It
is apt at this point to draw attention to ss 56(1)-(4)(a) (in particular, sub-s
(4)(a)) of the Civil Procedure Act 2005 (NSW) (CPA) which
provide:
(1) The overriding purpose of this Act and of rules of court,
in their application to civil proceedings, is to facilitate the just,
quick and
cheap resolution of the real issues in the proceedings.
(2) The court must seek to give effect to the overriding
purpose when it exercises any power given to it by this Act or by rules
of court
and when it interprets any provision of this Act or of any such rule.
(3) A party to civil proceedings is under a duty to assist the
court to further the overriding purpose and, to that effect, to
participate in
the processes of the court and to comply with directions and orders of the
court.
(4) Each of the following persons must not, by their conduct,
cause a party to civil proceedings to be put in breach of a duty
identified in
subsection (3)--
(a) any solicitor or barrister representing the party in the
proceedings,
[...]
- The
effect of sub-s (4)(a) is to have placed on MWP a statutory duty to comply with
directions of the Court and, on Wilson, a direct
statutory obligation not to
cause MWP to fail to do so.
- On
31 October 2024, MWP filed a Summons in the Court of Appeal seeking leave to
appeal the fixing by Ball J on 26 August 2024 of the
trial date of 18 November
2024. On 7 November 2024, MWP filed, in the Court of Appeal, a Notice of Motion
for expedition of the Summons.
- No
compliant Court Book was delivered to my Chambers by Friday 8 November 2024.
Accordingly, my Associate, on my instructions, wrote
to the parties at 10:50am
that day:
Dear Practitioners,
As you would be aware, the hearing of this matter is set down to commence on
Monday, 18 November 2024, before his Honour, the Chief
Judge in Equity.
On 26 August 2024, Ball J made the usual order for hearing (Annexure 3 to
Practice Note SC Eq 03). Paragraph 13 of the usual order
requires the filing by
the plaintiff of a Court Book no later than five working days before the
hearing.
Paragraphs 14 and 15 require various other documents including written outlines
no later than two working days before the hearing.
Five working days before the hearing is today. The Court Book is accordingly due
today. The other documents are due on Wednesday
next.
Compliance with paragraph 13 is to be by delivery of the Court Book to me.
His Honour re-iterates that he requires punctilious compliance with the usual
order for hearing and accordingly expects the Court
Book to be delivered by
close of business today.
His Honour has instructed me to draw, respectfully, to the attention of the
practitioners that section 68(4) of the Civil Procedure Act 2005 places
obligations directly on the practitioners not to cause a party to be in default
of the Court’s orders and directions.
Your attention is also drawn to section 61(3) of that Act under which, if a
party fails to comply with a direction of the Court, the Court may, amongst
others, dismiss the proceedings.
Yours faithfully,
Janet Duong
Associate to the Hon Justice Hammerschlag, Chief Judge in Equity
- This
drew the following response from Wilson:
Dear Associate,
We have sent the Court Book to you by WeTransfer, as shown by the enclosed.
The structure of the Court Book is as follows:
PART 1 (sections A to B)
PART 2 (section C)
PART 3 (sections D to G)
MWP’s Team is still working on PART 2 (section C) as noted and such will
be sent later.
There also remains the completed Bundle as explained in MEW-15, as to the
documents cited in the prior Einstein J Liability and Quantum
Judgments, by
which we say Mr Emmott is and has always been bound, the SII and TQA on which we
rely and to which we refer.
Yours faithfully,
Michael Wilson & Partners, Ltd
- No
physical Court Book or part of one was (or has been) received from MWP.
- On
Monday 11 November 2024, my Associate notified the solicitors on both sides that
I had listed the matter for pre-trial directions
on Tuesday 12 November 2024 at
10:00am. There then passed a series of communications which it is not necessary
to recount, suffice
it to say that, for the convenience of Counsel, I re-listed
the matter at 8:15am on Wednesday 13 November 2024.
- On
12 November 2024, my Associate wrote the following to the lawyers for both
sides:
Dear Practitioners,
To accommodate the convenience of counsel, his Honour has listed the matter for
directions at 8:15am, 13 November 2024 in Court 7D.
His Honour requests that counsel be in a position to:
Explain the failure to produce a Court Book in accordance with the usual order
for hearing (a matter which is hampering his Honour’s
preparation for the
trial);
Give an indication when the failure will be remedied;
Confirm that written outlines and other documents required by the usual order
will be provided tomorrow; and
Provide the Court with a proposed trial plan (indicating the witnesses to be
called and expected lengths of cross-examination and
argument).
Kind regards,
Janet
- On
12 November 2024, Schmidt AJ made certain further orders in the proceedings
before her Honour, including costs orders against MWP:
Michael Wilson &
Partners Limited v Emmott (No. 2) [2024] NSWSC 1435.
- After
midnight on 13 November 2024, Wilson emailed my Associate the Notice of Motion
seeking to adjourn the hearing, the 31st Affidavit
of Wilson, written
submissions under the name of Mr Burton SC, and a copy of a decision of the New
South Wales Court of Appeal on
the approach to be taken by the Court in
exercising the powers of the Court under the case management provisions of the
CPA.
- The
matter came on before me at 8:15am on 13 November 2024. MWP was represented by
Mr Burton SC and Emmott by Mr J Baird of Counsel.
- Mr
Burton SC sought leave to file in Court a Notice of Motion seeking leave to
vacate, adjourn and re-list the hearing scheduled for
18 November 2024.
Unusually, the Notice of Motion seeks an order for costs in favour of MWP
against Emmott with interim payment to
be made and paid on account by him to
MWP.
- I
gave leave to MWP to file the Notice of Motion and made it returnable before me
on 10:00am on the first day of the trial (that is,
18 November 2024).
- Mr
Burton SC was not in a position to explain the default in delivery of the Court
Book. He told me that preparation of the critical
section of the Court Book
containing the primary documents was well underway. He told me that the order
for the filing of submissions
and the like would not be complied with. He told
me that he was briefed on the application to adjourn the hearing, but not on the
hearing itself.
- Mr
Baird told me that his side had complied with the requirement to provide written
submissions but that a physical Court Book with
Emmott’s documents, whilst
under preparation, was late because MWP had not provided its Court Book. There
is substance in this
excuse. He told me Emmott’s Court Book would be
available imminently. He informed me that the other documents which were due
that day would be provided on time.
- Against
this background, MWP moved to adjourn the hearing date.
- Mr
Burton SC told me that there was a draft, “indeed probably near a final
draft, statement of issues and outline of submissions
for opening”. He
sought to hand them up on the basis that “even if your Honour is against
this application, because I
cannot appear but at least your Honour would have
something because Mr Wilson will not be
appearing”.[6] I declined to
take the documents. It is inappropriate for the Court to take into account, or
indeed to be asked to take into account,
written argument from a party planning
not to appear at an oral hearing. There may be exceptional circumstances in
which the Court
might give leave for this to occur, but that is not this case:
see Cadence (90) Investments Pty Ltd as trustee of GDC Discretionary Trust v
Simon Dougal Chalmers [2019] NSWSC 1168 at [25]- [29].
- Documents
entitled ‘MWP’s Opening Statement of Issues’, and ‘Brief
Notes and Outline Opening Submissions’
were filed electronically at around
1:00am on 18 November 2024. It is not clear whether these were the drafts
referred to by Mr Burton
SC, but I have disregarded them.
- MWP
relied on the 31st Affidavit of Wilson. The proffered reasons for the
adjournment were:
(1) Wilson’s indisposition (of which he gives no evidence himself);
(2) unavailability of both Wilson and MWP for the hearing due to prior and
longstanding commitments, and lack of time properly to
prepare. He provided a
list of attendances he had, has and will have in related matters in different
courts in the Eastern Caribbean
and the United Kingdom;
(3) visa renewal issues involving the Migration Police and the Ministry of
Foreign Affairs in Kazakhstan;
(4) unavailability of MPW’s witnesses (including expert witnesses) due to
their prior commitments. The expert witnesses are
said to be located in
Philadelphia USA and Kazakhstan;
(5) Mr Burton SC was not available for all of the five days of hearing. Despite
its best efforts, MWP was unable to identify, instruct
and brief alternative
counsel;
(6) the perceived prejudice to Emmott by being subject to the bankruptcy
petition prior to 21 July 2025 is no longer correct because
the bankruptcy
petition which was listed to be heard on 12 November 2024 has been adjourned
until February next year and, when it
next returns to Court, it is only to fix a
date. Accordingly, this trial could be adjourned and dealt with before the
bankruptcy
petition is heard;
(7) five full days is not adequate for this hearing;
(8) Emmott destroyed the hard disk drive of his laptop computer at the Temujin
Partnership; and
(9) applications for disclosure have been declined in these proceedings, Notices
to Produce and Subpoenas were required to be drafted
and arguments on compliance
to be dealt with, so as to afford sufficient opportunity to produce documents
for hearing and prepare
based on such material. MWP needs the opportunity to
issue Subpoenas to various witnesses (apparently mostly out of Australia).
- On
15 November 2024, the Court of Appeal disposed of MWP’s application for
leave to appeal from Ball J’s decision to fix
the matter, by dismissing it
with costs: Michael Wilson & Partners v Emmott [2024] NSWCA 269. I
observe that there was no indication to that Court of any health issue of
Wilson. To the contrary, Mr Burton SC informed the Court
of Appeal that Wilson
“is running it on Monday and for the week”. Mr Burton SC also told
the Court of Appeal that he
could not appear and that Wilson had not been able
to obtain, at short notice, any alternative
Counsel.[7] The reference to short
notice is somewhat puzzling because Mr Burton SC told me that he had informed
Wilson in August of this year
that he was unavailable for the November
fixture.[8]
- MWP’s
application before me to vacate the hearing is entirely without merit and
spurious:
(1) Wilson’s avowed inability to speak or travel to Australia is
undermined by his coming on the telephone line and speaking
audibly and clearly
and telling me (as did Mr Burton SC) that he was now going to come to Australia.
Additionally, it makes it puzzling
that Mr Burton SC told me that the only way
he could communicate with Wilson, given the situation with his voice over the
weekend,
was by email.[9] Perhaps it
was coincidental that Wilson spoke on the telephone line and Mr Burton SC
re-entered the courtroom immediately after the
case was over. Either way, it
must be the case that between the dismissal of the initial application and the
re-appearance of Counsel,
instructions to make the oral application and inform
the Court that Wilson was coming to Australia, were given and taken;
(2) the nature and extent of the other attendances and commitments of MWP and
Wilson which were said to prevent their attendance
is short of detail. As the
Court of Appeal remarked at [50], after having been informed that Wilson would
be running the case next
week, “it appears therefore that Mr Wilson has
been able to rearrange the longstanding client commitments referred to in his
affidavit”.[10] Absent from
Wilson’s Affidavit is any reference to conveying to any of the other
courts the difficulties that might be confronted
by MWP in complying with those
courts’ directions, having regard to the fact that this Court had set down
a significant matter
for substantive hearing to commence on 18 November 2024. As
I observed to Mr Burton SC, if MWP could convey to this Court that it
is
unavailable because of court commitments elsewhere, it could convey to those
courts that it has obligations to this one;
(3) the nature of the issues concerning Wilson’s visa renewal were not
revealed. But it is to be remembered that he is an Australian
citizen. There
could not have been any visa issue about entry into this country and the Court
was told that he was coming. He provided
no information about if and when he
first sought to make travel arrangements to come to Australia;
(4) Wilson provided no details of the alleged problems other witnesses have.
There was no evidence of any communications with witnesses
as to their
availability or lack of it. Wilson had been informed that the expert witnesses
MWP proposed to call could be cross-examined
remotely, and Wilson himself was
not required for cross-examination;
(5) there was more than enough time to brief other counsel. There is no evidence
of any attempt to do so, or of any communications
with Mr Burton SC about his
availability. I infer that Wilson’s evidence on this would not have
assisted him. Mr Burton SC
stressed that the matter was complex and required a
lot of preparation. This type of matter is entirely run of the mill in this
List.
There are many Senior and Junior Counsel at the Sydney Bar (leaving aside
Counsel from other Bars in Australia who regularly appear
interstate) who would
have no difficulty in conducting it competently;
(6) MWP wished to have, as it now turns out, an illusory forensic advantage of
trying to bankrupt Emmott before substantive proceedings
between them, here and
in the United Kingdom, in which there are claimed money liabilities going both
ways, are determined. The only
thing that made the case urgent in the first
place was MWP’s plainly deliberate forensic decision not to agree to defer
the
bankruptcy case. It cannot have its cake and eat it too. In this context, Mr
Burton SC submitted that an adjournment could be given
on conditions, which were
entirely a matter for the Court. He did not proffer any such conditions or any
undertakings. In particular,
he eschewed the suggestion that the bankruptcy
petition not be proceeded with. He made it clear, however, that if there was an
adjournment,
a costs order against MWP was inevitable, but did not proffer any
undertaking on behalf of MWP that those costs would be paid promptly
or indeed
at all. Mr Burton SC repeated the submission that there was now no urgency
because the bankruptcy proceedings have been
adjourned;
(7) the four-day estimate, if inadequate, would not have affected the
hearing;
(8) Emmott’s alleged destruction of information has already occurred and
is hotly disputed; and
(9) there was more than enough time available to move the Court for leave to
issue subpoenas and serve notices to produce. Some of
the identified witnesses
are overseas. The Court would not be in a position effectively to subpoena them.
What evidence they would
give is not specified.
- I
consider it to be clear that, from 26 August 2024 when Ball J set these
proceedings down for hearing, MWP had no intention of prosecuting
them on the
set down date, but sought to obtain some forensic or collateral advantage by
prosecuting bankruptcy proceedings against
Emmott. Each of the following is a
compelling consideration which drives to that conclusion (the cumulative effect
approaches the
overwhelming):
(1) failure to accept Ball J’s invitation to defer the bankruptcy petition
or proffer such a deferral to this Court on this
application;
(2) failure by Wilson, a highly experienced solicitor and litigant, to brief (or
indeed to establish any attempt to brief) counsel
for the trial, having been
told in August that Mr Burton SC was unavailable;
(3) non-compliance by Wilson, a highly experienced solicitor and litigant, with
orders of the Court for the preparation of the case,
without any explanation
despite my Associate’s email on 12 November 2024 requesting Counsel to be
in a position to give an
explanation;
(4) bringing repeated applications for adjournment of the trial date (including
the unmeritorious ones dealt with by this judgment)
and moving the Court of
Appeal to set aside the fixing of the trial date; and
(5) a submission to Judge Pelling KC in October 2024 that this trial would not
take place on the date it is listed because Wilson
had instructed MWP’s
lawyers to appeal from the decision of the Court to list the trial on this date
and for the length of
time, and it is likely to be tried only in mid-2025:
Michael Wilson & Partners Ltd v Emmott [2024] EWHC 2731 (Comm) at
[17(iv)];
(6) proffering as a basis for an adjournment plainly spurious assertions about
Wilson’s inability to get to Australia because
of health reasons; and
(7) failure to adduce any evidence about endeavours to make timely travel
arrangements to get to Australia (although it should be
observed that, if
competent Counsel had been briefed, Wilson’s personal presence in Court
would not have been essential).
- On
the other side of the scale, Emmott has complied with the procedural directions
imposed by the Court. His Court Book was late,
but this was no doubt due to
MWP’s default. Judge Pelling KC observed that MWP maintains that it is
entitled to recover circa
US$70m from Emmott in these proceedings: Michael
Wilson & Partners Ltd v Emmott [2024] EWHC 2731 at [14(ii)]. Emmott is a
solicitor of the Court, and the pendency of a bankruptcy petition against him,
together with these proceedings, are
matters of singular significance to a
person in that position. The proceedings have been on foot for a long time, and
the trial date
set for months. He is entitled to have them disposed of. They
remain urgent for Emmott: see Aon Risk Services Australia Ltd v Australian
National University [2009] HCA 27; (2009) 239 CLR 175.
- Finally,
there is the not insignificant matter of the judicial resources which have been
allocated to this hearing and which would
have been wasted. As it happens, the
substantive hearing was completed in one day and there has been time available
to prepare this
judgment. Cases in this list are fixed to run on time and good
reason is required to vacate or adjourn hearing dates. There are no
such reasons
here.
- This
Court is not the plaything of parties or practitioners.
- If
MWP is suffering any forensic misfortune, it is of its own making. Justice does
not dictate that it be given the indulgence it
seeks. Indeed, justice dictates
that it should not be.
- Hence,
my refusal of both applications to adjourn.
THE SUBSTANTIVE
DISPUTE
- In
the Partnership Claim, MWP seeks:
(1) declarations that:
(a) Emmott, and each of Nicholls and Slater, entered into the Temujin
Partnership, as and from early September 2005, or such other date as the Court
determines;
(b) the business of the Temujin Partnership was carried on by them in common
with a view of profit, until it was dissolved by the
bankruptcy of Nicholls on
16 February 2015, at which point Emmott, Nicholls and Slater continued to carry
on between the three of
them in partnership the same business in common with a
view of profit, until that partnership was dissolved by the bankruptcy of
Slater
on 22 December 2015, at which point Emmott, Nicholls and Slater continued to
carry on between the three of them in partnership
the same business in common
with a view of profit, until that partnership was dissolved by the death of
Nicholls on 28 February 2017,
at which point Emmott and Slater continued to
carry on between the two of them in partnership the same business in common with
a
view of profit, and that, at all material times, there continued an
arrangement, agreement, and understanding between them, and their
designates and
nominees, whether acting directly or indirectly, and which continues to date;
and
(c) each partner is entitled to an equal share of the partnership, arrangement,
agreement, and understanding, or such share as this
Court shall determine; and
(2) (briefly stated) orders that Emmott is liable to allow inspection of all
originals, disclose, allow the carrying out of an inquiry,
the taking of
account, proprietary tracing and bring to the account of MWP, as the assignee of
the rights of Slater, Nicholls and
the Temujin Companies, and an inquiry,
proprietary tracing and an account be conducted of all dealings of the alleged
partnerships.
- The
central and determinative issue is whether Emmott was, at any time, in such a
partnership with any of Nicholls or Slater. In the
absence of proof of any
asserted applicable foreign law, this falls to be determined on the basis of the
law of this State: Neilson v Overseas Project Corporation of Victoria Ltd
[2005] HCA 54; (2005) 223 CLR 331 at [125].
- Section
1(1) of the Partnership Act 1892 (NSW) provides that partnership is the
relation which exists between persons carrying on a business in common with a
view of profit
and includes an incorporated limited partnership.
- Section
2 provides that in determining whether a partnership does or does not exist,
regard shall be had to certain specified rules. It is
not necessary to set them
out here, suffice it to say that the sharing of gross returns does not of itself
create a partnership and
receipt by a person of a share of the profits of a
business is prima facie evidence that the person is a partner in the business,
although receipt of such a share or of a payment contingent on, or varying with,
the profits of a business does not of itself make
the person a partner in the
business.
- Characterisation
of the relationship between the parties must proceed by reference to the
contract which reflects and governs the
legal relationship between them, and by
reference to the rights and obligations to which the contract gives rise:
CFMEU v Personnel Contracting Pty Ltd [2022] HCA 1; (2022) 275 CLR 165.
- The
Consultancy Agreement provides that Emmott will provide consultancy services on
a non-exclusive basis to TIL. His title would
be Senior Consultant and he would
be entitled to receive consultancy fees. Emmott did not share in the profits of
TIL. His consultancy
fee was not conditioned upon fees he earned. He never
issued invoices on behalf of TIL or took part in its management.
- Emmott
is not and has never been a director of the Temujin Companies. Slater was the
sole director of, and shareholder in, TIL.
- Nicholls
too was a consultant. The evidence does not establish a partnership between two
consultants.
- Neither
the Co-operation Agreement nor the Consultancy Agreement constitute a
partnership agreement between Emmott and any other person.
They are inconsistent
with the existence of the asserted partnership relationship.
- Emmott
was not carrying on business in common with Slater or Nicholls.
- There
is no evidence before the Court which establishes any partnership between Emmott
and Nicholls or Slater, or any of them. To
the contrary, the constituent
contractual documents show that they were not partners and I positively so
find.
- It
is appropriate to note that, even if the Temujin Partnership had been
established, it would by no means necessarily follow that
the Court would grant
the consequential relief in the form claimed by MWP. In the event, it is not
necessary to decide this question.
CONCLUSION
- The
thrust of Emmott’s argument is that there is no partnership as asserted by
MWP and I have so found.
- The
defendant is entitled to judgment, and I will so order.
- I
record that, had the case not been disposed of on the merits, I would have,
pursuant to ss 61(1) and (3)(a) of the
CPA,[11] dismissed the proceedings
for non-compliance by MWP with orders of the Court anyway.
- In
all the circumstances, the question arises whether the Court should exercise the
power, which it undoubtedly has, to make a declaration
(contrary to that sought
by MWP) that the Temujin Partnership as defined in the Further Restated and
Further Amended Commercial List
Statement was never established. I will discuss
this and costs with whomever appears for the parties when this judgment is
handed
down.
- I
record that, after I reserved judgment, my Chambers received multiple email
communications from Wilson. I have disregarded them.
- The
exhibits are to be returned.
**********
[1] NSWSC T3,22-24 (18 November
2024).
[2] Nicholls v Michael
Wilson & Partners Ltd (2010) 243 FLR 177; [2010] NSWCA
222.
[3] Meagher, Barrett JJA,
Sackville AJA.
[4] Leeming,
Brereton JJA, Emmett AJA.
[5] Leave
was required because of the order made by Ball J on 10 November
2023.
[6] Tcpt, 18 November 2024, p
6(40)-7(6).
[7] Tcpt, 15 November
2024, p 4(46)-5(17).
[8] Tcpt, 18
November 2024, p 16(42)-17(14).
[9]
Tcpt, 18 November 2024, p
5(40).
[10] Michael Wilson &
Partners v Emmott [2024] NSWCA 269 at
[50].
[11] Sections 61(1) and
(3)(a) provide that the Court may give such directions as it thinks fit for the
speedy determination of the real issues between
the parties to the proceedings
and that, if a party to whom such a direction has been given fails to comply
with it, the Court may
dismiss the proceedings.
AustLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.austlii.edu.au/au/cases/nsw/NSWSC/2024/1489.html
