Michael Wilson & Partners Limited v Sinclair [2016] NZHC 835 (29 April 2016)

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IN THE MATTER OF	section 56 of the Judicature Act 1908
IN THE MATTER OF	enforcement of all of the judgments, orders and costs certificates of the Bahamian Supreme Court and Court of Appeal and of the Judicial Committee of the Privy Council, between the applicant and respondent named below
BETWEEN	MICHAEL WILSON & PARTNERS LIMITED Applicant
AND	THOMAS IAN SINCLAIR Respondent

Hearing:	4 February 2016 (further memoranda filed on 9 and 10 February 2016)
Appearances:	K P Sullivan for the applicant J M Morrison for the respondent
_Judgment:	_{29 April 2016}

Introduction ....................................................................................................................................... [1] The background ................................................................................................................................ [4] The Bahamas proceedings .............................................................................................................. [18] United Kingdom enforcement proceedings ................................................................................... [27] The New Zealand application......................................................................................................... [33]

Procedural background ................................................................................................................ [33] The Judicature Act 1908 ............................................................................................................... [38] Does the memorial meet the requirements of s 56? ...................................................................... [40] Has Mr Sinclair shown sufficient cause? ..................................................................................... [48]

Stay ................................................................................................................................................... [50] Result ................................................................................................................................................ [58]

[1] The applicant (MWP) obtained judgments and orders in the Bahamas against the respondent (Mr Sinclair) for costs arising out of civil litigation Mr Sinclair brought against MWP in that jurisdiction (the Bahamian orders). He wishes to enforce the Bahamian orders in this jurisdiction, where Mr Sinclair has assets in the form of equity in a residential property in Wellington. Pursuant to the jurisdiction that applies to this situation, Mr Sinclair seeks to “show cause” as to why execution

[2] Mr Sinclair says that he has a civil proceeding in the United Kingdom which, if successful, will enable him to be reimbursed for all the amounts he is required to pay under the Bahamian orders. As a result he has obtained a stay of the Bahamian orders in the United Kingdom. He says that this is where the litigation between the parties is centred and the position in the United Kingdom would be undermined unfairly if enforcement of the costs judgments is permitted in New Zealand. He says that if he meets the costs payable under the Bahamian orders, MWP will not be in a position to reimburse him if the United Kingdom proceeding is decided in his favour. In contrast, if the Bahamian orders are not presently enforced in this jurisdiction, MWP’s position is preserved by a charging order over Mr Sinclair’s Wellington property.

[3] MWP says there is no reason why the usual “pay as you go” approach to costs should not apply to Mr Sinclair in respect of the Bahamian orders. It says that if Mr Sinclair wished to obtain a stay of the Bahamian orders, he ought to have sought this in the Bahamian courts. The stay granted in the United Kingdom, which is being appealed by MWP, was based on Mr Sinclair’s purported claim for reimbursement against MWP in that jurisdiction. It is not a ground on which cause can be shown in this jurisdiction. MWP says Mr Sinclair’s claim in the United Kingdom for reimbursement is without any proper evidential foundation and is unmeritorious and that MWP has very large claims for damages against Mr Sinclair and others. It says there is no risk that MWP cannot meet orders against it whereas

_{Mr Sinclair has failed to provide proper disclosure of his financial
position.}

[4] The Bahamian orders are a small part of a long-running dispute involving MWP, Mr Sinclair, a Mr Emmott, and related entities. This dispute has led to extensive litigation which is centred in the United Kingdom but has extended to other jurisdictions.²The dispute has, as I understand it, arisen out of the ownership of shares of Max Petroleum PLC (the Max shares). Max Petroleum PLC has oil interests in Kazakhstan and its shares were once worth a substantial amount of

[5] MWP is a company that provides legal and business consultancy services in Kazakhstan, among other places. Its registered office is in the British Virgin Islands. Until 30 June 2006 Mr Emmott, a lawyer, was a director and employee of MWP. He left MWP to join a competitor’s firm. While Mr Emmott was an employee of MWP and/or the competitor firm, Mr Sinclair, through one of his corporate entities, engaged Mr Emmott’s services in relation to the Max shares.

[6] In August 2006 MWP initiated an arbitration in London against Mr Emmott in relation to the Max shares. The Max shares were held in the name of Eagle Point Investments Limited (EPIL), a company vehicle for a trust of which Mr Emmott was settlor. MWP claimed that Mr Emmott owned the shares and had made an unlawful secret profit in respect of them. MWP claimed an entitlement to that profit. It was Mr Sinclair’s position that, although the shares were registered in EPIL’s name, he was the beneficial owner of them. Mr Sinclair says that he funded Mr Emmott’s

[7] When the arbitration proceedings were commenced, and in support of those proceedings, MWP obtained a freezing order in the Commercial Court in London. The freezing order was over Mr Emmott’s assets, including the Max shares. The

_{order prevented dealings with the Max shares unless EPIL gave at least
five clear}

²Both MWP and Mr Sinclair filed a large number of affidavits in relation to this matter. In those affidavits MWP and Mr Sinclair each assert that the other has provided a misleading account of the history. In essence MWP says it has valid and very large claims for damages against Mr Sinclair and others, whereas Mr Sinclair says he is being hounded by a vexatious litigant arising out of a dispute MWP has with a former employee. Each claim the other is dissipating assets and will not be able to meet any judgments that may be ordered.

working days notice. MWP gave an undertaking in damages to EPIL as a condition of the freezing order. The scope of that undertaking is in dispute.⁴

[8] In early 2010 the Arbitral Tribunal determined that Mr Emmott had no interest in the Max shares, had not made a secret profit for which he would be liable to account to MWP, and that the Max shares belonged to Mr Sinclair.⁵According to MWP the Arbitral Tribunal also found that Mr Emmott fully and justifiably expected to receive the Max shares and that Mr Sinclair promised to give him the Max shares secretly from MWP. I do not know whether MWP’s interpretation of the Arbitral Tribunal’s findings in this respect is accepted by Mr Sinclair.

[9] However it does appear that the Arbitral Tribunal awarded Mr Emmott a substantial award of damages together with costs. According to Mr Sinclair the award in Mr Emmott’s favour was for about £3.2 million, plus US$850,000, interest and costs. Those costs were not determined as at 5 October 2015⁶but Mr Sinclair considers they will be in excess of US$3 million. It is not in dispute that, as a result of the arbitration decision, the freezing order in relation to the Max shares was set aside in October 2010.

[10] Despite the arbitral award, the litigation in relation to the Max shares continued in the United Kingdom. One of the steps taken by MWP was to bring a claim against Mr Sinclair seeking a declaration of ownership of the Max shares (the

⁴MWP’s position, as asserted in an affidavit by Michael Wilson, is that “Mr Sinclair is not a beneficiary within the wording of the undertaking in damages”. Mr Sinclair contended in his affidavit that he was. MWP’s counsel submitted that there was no evidential foundation for Mr Sinclair’s contention that the undertaking extended to third parties. After the hearing counsel for Mr Sinclair filed an extract from that undertaking which stated that MWP agreed to pay “the reasonable costs of anyone other than [Mr Emmott] which have been incurred as a result of this order including the costs of finding out whether that person holds any of [Mr Emmott’s] assets

...”. On its face, therefore, it supports Mr Sinclair’s position. MWP objects to the late filing of this information and says it would want to file further evidence on matters including whether the undertaking had been surpassed. Mr Sinclair’s counsel says the extract was provided to correct any misconception arising as a result of submissions advance at the hearing. In the result it has not been necessary to rely on the terms of the undertaking in considering how the matter before me should be determined.

⁵The Arbitral Panel was made up of three members, one of whom was Lord Millet. The chairperson of the Panel was appointed by the Law Society of England and Wales.

Sinclair, Mr Emmott and others had conspired to divert work away from MWP (the conspiracy claim). The Court ordered that these claims were to proceed together.

[11] MWP’s declaration proceeding was struck out at first instance on the basis that it was a collateral attack on the arbitration. Costs were ordered in Mr Sinclair’s favour. MWP does not accept this decision and is appealing it. The appeal is due to be heard in November 2016.⁷The conspiracy claim is adjourned pending this appeal.

[12] In the declaration proceeding Mr Sinclair made a counterclaim contending that he suffered loss as a result of the freezing order over the Max shares. Mr Sinclair claimed that he was entitled to be indemnified for that loss pursuant to the undertaking that MWP gave when it obtained the freezing order. The claim for indemnity was for £30 million. Mr Sinclair contends that, during the period that the Max shares were frozen, its oil interests in Kazakhstan substantially declined in value. He claims to have been prevented from selling or trading the Max shares at a time when they had significant value.

[13] MWP does not accept that Mr Sinclair has any valid counterclaim. It contends, amongst other things, that Mr Sinclair could have applied to set aside the freezing order and that any loss he suffered was not caused by MWP.⁸This counterclaim has, however, been discontinued. MWP seemingly relies on this discontinuance as evidence that Mr Sinclair’s counterclaim is without merit. However, as Mr Sinclair explains, it was discontinued because he had a parallel

[14] That parallel claim is an inquiry into damages in respect of the undertaking provided by MWP when it obtained the freezing orders over the Max shares. Mr Sinclair claims that, pursuant to the undertaking, MWP is required to indemnify him in respect of the loss in value of the Max shares while the freezing order was in place as well as the costs associated with the Bahamian proceedings (discussed further

the damages inquiry pursuant to the indemnity could proceed. The order was conditional upon Mr Sinclair discontinuing the counterclaim against MWP in the declaration proceeding as Mr Sinclair was seeking the same loss in each. Mr Sinclair has accordingly filed a notice of discontinuance of the counterclaim.

[15] MWP contends that Mr Sinclair has taken no steps to advance the damages inquiry. However Mr Sinclair explains that the inquiry is in abeyance while MWP pursues its appeal of the decision striking out the declaration proceeding. That is because, if MWP is successful in that proceeding, there will be no damages to pay.

[16] MWP also asserts that Mr Sinclair’s damages inquiry is “hopeless and doomed to fail” and it “disputes Mr Sinclair has any standing to even bring it”. MWP objects to the Court receiving direct evidence of the terms of the undertaking it gave because this evidence should have been adduced earlier.⁹However, in conveying that objection, counsel for MWP acknowledges that this Court is unlikely to be able to assess the merits of Mr Sinclair’s claim for damages and costs pursuant

[17] Outside of the United Kingdom there has been other litigation. MWP describes this as “global litigation relating to the fraud that MWP suffered” as a result of actions by, as I understand it, Mr Emmott, Mr Sinclair and related entities. This includes litigation in Australia, the United States, the British Virgin Islands and the Bahamas. MWP says that in this litigation it has succeeded in obtaining orders totalling more than US$15 million and that it has further claims against Mr Emmott in Australia for US$35-47 million. MWP says that the judgments and orders in this litigation are for “very serious wrongdoing”, are at odds with the arbitration, and show that it is the “overall winner” in this global litigation. Just as it is not possible for me to embark on the merits of Mr Sinclair’s claim for damages and costs pursuant to the undertaking, it is not suggested that I can or should embark on the

[18] While the arbitration proceedings were on foot but not determined, Mr Sinclair commenced proceedings in the Bahamas against Mr Emmott and EPIL. These proceedings sought a declaration that the Max shares belonged to Mr Sinclair. Mr Sinclair applied for leave of the Bahamian court to join MWP. MWP did not do business in the Bahamas and had no assets there. MWP regarded these proceedings as a strategy to try and defeat its claims as to the true ownership of the Max shares.

[19] The application to join MWP succeeded at first instance. MWP appealed to the Bahamian Court of Appeal. In a decision delivered on 23 April 2008, the Court allowed MWP’s appeal. It considered that MWP should not be joined to the proceeding because the matter was the subject of arbitration in England which was the natural and appropriate forum to resolve the dispute; the connection of the parties and the matter to the Bahamian jurisdiction was tenuous; there was in fact no dispute as between Mr Sinclair and Mr Emmott as to the ownership of the Max shares and Mr Emmott was only a party in order to seek to bring MWP within the jurisdiction of the Bahamas; and there might be a conflict between the courts of the Bahamas and the arbitration if the proceedings in the Bahamas were allowed to proceed which could lead to more inconvenience and costs for both sides. The Court of Appeal ordered Mr Sinclair to pay costs to MWP (Order 1).

[20] Mr Sinclair appealed this decision to the Privy Council. The Privy Council’s decision was given on 8 June 2011.¹⁰The Privy Council dismissed the appeal, ordered that the costs order made by the Court of Appeal should stand and invited submissions on the costs of the appeal to the Privy Council. MWP says that the Privy Council ordered costs in MWP’s favour but counsel have not directed me to a copy of that order and it is not included in the orders filed in this Court as part of the “memorial” (discussed further below) (Order 2).¹¹

[21] Cost orders in the Bahamas are subject to a taxation and certification procedure in which the end result is a certificate as to the quantum that is payable.

This procedure took some time in the present case. Mr Sinclair took steps to stay the procedure as a result of the delay. The Court of Appeal granted MWP an extension of time on 17 July 2012 and ordered Mr Sinclair to pay costs of $5,000 (Order 3).

[22] Mr Sinclair appealed this decision to the Privy Council. It seems, however, that Mr Sinclair did not prosecute the appeal and MWP applied to strike out the appeal. Accordingly on 22 July 2014 the Privy Council ordered that the appeal would be struck out unless Mr Sinclair filed his draft statement of facts and issues by

[23] On 25 March 2013 a certificate of taxation was issued by the Bahamian Court of Appeal in respect of the costs ordered under Order 1 for US$249,654.17, interest, and the costs of the enforcement process (Order 5). A further order was made by the Registrar of the Bahamian Supreme Court on 17 December 2013 again concerning Mr Sinclair’s claim that MWP was out of time to tax its costs. The Registrar stated “there will be no Order for Costs” (Order 6).

[24] MWP says that in broad terms the total quantum of costs it claims pursuant to the various costs orders is estimated at around NZ$3 million. Mr Sinclair considers these costs are inflated. He refers to statements which he says were made by the Court, during the taxation process in respect of Order 4, that the amount MWP was claiming was “grossly excessive”. He also notes that the certified amount (as per Order 5) in respect of Order 1 was well below the amount MWP had claimed.

[25] In any event, in summary, under Orders 1 to 6 there are two finalised amounts for costs (Order 1, as confirmed by Order 2 and finalised by Order 5) and Order 3. It is unclear if any order for costs in the Privy Council was made under Order 2 (in addition to the order that costs under Order 1 were confirmed) and the amount ordered under Order 4 is not finalised. Order 6 is an order that no costs are payable in respect of the extension granted at that time.

[26] In addition to the Bahamian orders, MWP seeks to enforce a costs order made by the High Court in London. I turn to discuss that order and what followed in that

jurisdiction, as it forms the basis on which Mr Sinclair resists the enforcement of these seven orders in New Zealand.

[27] On 19 October 2014 MWP obtained, on an ex parte basis, a Registration Order in the High Court (Master Eyre) in London in respect of the Bahamian orders. Master Eyre also ordered costs in MWP’s favour. Those costs were fixed on

6 August 2015 in the sum of £26,173.85, £140 in fixed costs, plus interest (Order

[28] On 9 June 2015 Mr Sinclair obtained a stay of execution of the Registration Order from the High Court (Master Yoxall) in London. In granting the stay the Master took into account that the costs orders “were not freestanding” as they were part of the litigation concerning MWP’s asserted proprietary right to the Max shares which had failed. The Master also considered that Mr Sinclair had “an arguable claim in damages” which could be substantial. He also had costs orders in his favour in respect of the arbitration and the declaration proceeding. The Master also took into account Mr Sinclair’s fear that, if he paid the costs to MWP, the money would

be dissipated and not available to meet orders for costs and damages in his favour.¹³

[29] MWP appealed that decision. The stay was upheld in the High Court (Whipple J) in a decision given on 7 October 2015.¹⁴One of the issues on appeal was whether the Master had exercised his discretion to order the stay under the correct civil procedure rule. Whipple J held that the Master had exercised his discretion under the correct rule. That rule conferred a broad discretion to stay the whole or any part of the proceedings. She considered there was no error in the

¹²In addition MWP says that pursuant to the Civil Procedure Rules in England, it has a deemed costs order against Mr Sinclair in favour of MWP arising from the discontinued counterclaim brought in that country against MWP. I do not discuss this further as it is not included in the judgments on which MWP has made its application under s 56 of the Judicature Act.

¹³This summary of the Master’s decision comes from the decision of Whipple J in Michael Wilson and Partners v Sinclair, above n 3, at [7].

[30] The Judge went on to consider whether a stay would be granted if another narrower rule was the applicable one. Under that rule a stay could be ordered if there were “special circumstances which rendered it inexpedient to enforce the [Registration Order]”. Her Honour considered there were such special circumstances.¹⁵This was for the following reasons:

(a) There was a “complex web of litigation” surrounding the application for a stay. MWP had failed in the arbitration. Various post-arbitration matters were not completed. It was important to preserve the position rather than permitting MWP to have an unfair advantage through

(b) There was a “real” prospect of Mr Sinclair recovering money from MWP. There were at least three bases on which Mr Sinclair “might” do so, and all of them were connected to MWP’s claim over the Max shares. These were by means of:¹⁷

(ii) the inquiry as to damages (pursuant to which loss in value of the Max shares and the costs payable under the Bahamian orders were claimed as damages); and

MWP, it would be preferable to wait and see whether those costs were recouped in due course rather than ordering them to be paid now.¹⁸

(d) It seemed that Mr Emmott had a worldwide freezing order against MWP and that any costs which were paid to MWP would be covered by this order.¹⁹

(e) MWP had taken no steps to enforce the Bahamian orders in the United Kingdom because Mr Sinclair had no assets in the United Kingdom. So long as that remained the case, there would be no prejudice to MWP from a stay.²⁰

(f) The costs payable under the Bahamian orders, if not recouped as damages in the inquiry, might be set off against orders for costs or damages in Mr Sinclair’s favour.²¹

[31] Costs were ordered in Mr Sinclair’s favour in the sum of £13,500. The decision of Whipple J is under appeal to the Court of Appeal. MWP considers it extraordinary that Whipple J considered enforcing the Bahamian costs orders against Mr Sinclair would enable MWP to “steal a march”²²on Mr Sinclair, given the history of the litigation and that MWP has met costs orders made in Mr Sinclair’s favour in this litigation. However I do note that, in granting leave to appeal, the Court of Appeal said:²³

The first ground of appeal raises an important point of practice concerning the appropriate rule for seeking a stay of execution of a money judgment which it is appropriate for the court to consider on a second appeal.

However, as the appellants are no doubt aware, the point is not dispositive of the appeal. This is because the judge went on to exercise her discretion on the assumption that CPR 83.7 applied. It is a rare case where this court would interfere with the exercise of a case management power where the judge directed herself correctly on the law, which she did here. Despite the assertions of perversity in the grounds of appeal and skeleton argument, the appellant will face considerable obstacles in showing that the judge’s decision under CPR 83.7 is susceptible of attack on appeal. (My emphasis.)

²³See the order allowing the application for appeal: Michael Wilson and Partners Ltd v Sinclair

[33] In this jurisdiction MWP seeks to enforce Orders 1 to 7 set out above.²⁴It initially sought to do so via an application to seal the Bahamas orders under the Reciprocal Enforcement of Judgments Act 1934. That application was filed on 17

November 2014. It was subsequently realised that the Reciprocal Enforcement of Judgments Act did not apply.²⁵The application was amended to seek execution of the costs order under s 56 of the Judicature Act 1908. That amended application was filed on 17 June 2015. Pursuant to s 56 of the Judicature Act solicitors for MWP filed a “memorial and record of judgments” dated 7 July 2015. This document referred to an earlier affidavit which had been filed and which attached sealed judgments relating to the application (to which I will return).

[34] Alongside these applications, MWP applied to sustain a caveat it had lodged

on Mr Sinclair’s Wellington residential property. That application was filed on 31

October 2014. On 9 December 2014 and following the payment of security for costs, the High Court (Associate Judge Smith), made a consent order that the caveat be sustained until further order of the Court.²⁶

[35] The applications for enforcement and to sustain the caveat were opposed by Mr Sinclair. On 18 September 2015 counsel for the parties filed a joint memorandum seeking consent orders. The memorandum explained that issues between the parties were being litigated in London, this included Mr Sinclair’s claim that the Bahamian orders should not be executed because of a claim he had against MWP, and that Master Yoxall had ordered a stay of execution pending the determination of those issues. The memorandum further explained that counsel were agreed that, pending the determination of those issues in London, execution of the Bahamian orders should also be stayed in New Zealand and the status quo in respect

²⁵_{There is no Order in Council under the 1934 Act in respect
of the Bahamas.}

²⁶This order replaced an earlier interim order made by consent on 11 November 2014.

Court (Williams J) made consent orders in respect of both applications, as follows:²⁷

(a) The application to sustain the caveat is dismissed. (b) The interim order sustaining the caveat is revoked.

(c) Costs of $12,000 are to be paid to Mr Sinclair from the security for costs held by the Court with the balance retained as security in respect of the enforcement application.

(d) That there be a stay of execution of the judgments and orders recorded in the memorial and record of judgments dated 7 July 2015 until further order of the Court.

(e) Until further order of the Court, there is an order that Mr Sinclair’s Wellington property is charged with payment of the amount for which MWP has obtained judgment, being the amount created under Orders

(a) That a hearing be scheduled on whether an order for execution of the judgments and orders in the memorial should issue (that led to the hearing before me).

(b) Pending further order of the Court, Mr Sinclair (or any person authorised by him) was not to further draw down on the mortgage on

²⁷See Michael Wilson Partners Limited v Sinclair HC Wellington, CIV-2014-485-11348, 22

September 2014 (order dismissing originating application to sustain caveat) and Michael Wilson Partners Limited v Sinclair HC Wellington CIV-2014-485-11444, 22 September 2014 (interim order staying execution and charging property).

Mr Sinclair’s Wellington property or to increase the debt against that property.

(1) Any person in whose favour any judgment, decree, rule, or order, whereby any sum of money is made payable, has been obtained in any court of any of Her Majesty’s dominions may cause a memorial of the same containing the particulars hereinafter mentioned, and authenticated by the seal of the court wherein such judgment, decree, rule, or order was obtained, to be filed in the office of the High Court; and such memorial being so filed shall thenceforth be a record of such judgment, decree, rule, or order, and execution may issue thereon as hereinafter provided.

(3) Every such memorial shall be signed by the party in whose favour such judgment, decree, rule, or order was obtained, or his attorney or solicitor, and shall contain the following particulars, that is to say: the names and additions of the parties, the form or nature of the action or other proceeding, and, when commenced, the date of the signing or entering-up of the judgment, or of passing the decree, or of making the rule or order, and the amount recovered, or the decree pronounced, or the rule or order made, and, if there was a trial, the date of such trial and amount of verdict given.

(4) The court or any Judge thereof, on the application of the person in whose favour such judgment, decree, rule, or order was obtained, or his solicitor, may grant a rule or issue a summons calling upon the person against whom such judgment, decree, rule, or order was obtained to show cause, within such time after personal or such other service of the rule or summons as such court or Judge directs, why execution should not issue upon such judgment, decree, rule, or order, and such rule or summons shall give notice that in default of appearance execution may issue accordingly; and if the person served with such rule or summons does not appear, or does not show sufficient cause against such rule or summons, such court or Judge, on due proof of such service as aforesaid, may make the rule absolute, or make an order for issuing execution as upon a judgment, decree, rule, or order of the court, subject to such terms and conditions (if any) as such court or Judge thinks fit.

(b) A person with such a judgment or order may cause a memorial of the judgment or order to be filed in the High Court.

(ii) the form or nature of the proceeding; (iii) when the proceeding was commenced; (iv) the date of the judgment or order;

(i) signed by the party who obtained the judgment or order, or his or her solicitor; and

²⁸Re Ulster Bank Ireland Limited, ex parte Clancy [2014] NZHC 1939 at [8] and fn 3.

(ii) authenticated by the seal of the Court where the judgment or order was obtained.

(e) When filed in accordance with these requirements, the memorial is a record of the judgment or order and execution may issue upon it as provided in s 56(4).

(f) Pursuant to s 56(4), the person against whom the judgment or order was obtained may “show cause ... why execution should not issue” on the judgment or order.

(g) If the person does not show sufficient cause, the Court may make an order for issuing execution upon the judgment or order, subject to such terms and conditions (if any) as the Court thinks fit.

[40] The first question is whether a memorial has been filed in accordance with the requirements of s 56. Although this was not raised in Mr Sinclair’s opposition to MWP’s application, the Court must be satisfied that the requirements have been met.²⁹An example of a memorial in proper form is provided in Re Ulster Bank Ireland Limited.³⁰That memorial provides the required particulars under headings

[41] In this case the memorial is not in that form. Instead it refers to the affidavit sworn on 4 March 2015 which annexed sealed judgments and orders, and says that these “have, therefore, been reciprocally recognised and have become judgments and orders of this Court”. The memorial then goes on to describe these orders and judgments as follows:

23 April 2008, in favour of MWP, dismissing the Respondent’s claims, and by which the Respondent was ordered to pay MWP’s

³⁰Re Ulster Bank of Ireland Limited, above n 28, at [19] and the attachment.

costs, plus interest accruing at 10% per annum, compounded annually, in accordance with Bahamian Procedural Rules;

Bahamian Court of Appeal of 23 April 2008, referred to at paragraph a above, in the principle sum of US$249,654,17c, plus interest at

which the Respondent was ordered to pay MWP’s costs, plus interest accruing at 10% per annum, compounded annually, in accordance with Bahamian Procedural Rules;

f. the final order the JCPC of 22 July 2014, dismissing the Respondent’s appeal to the JCPC against the judgment and order of the Bahamian Court of Appeal of 17 July 2012 in favour of MWP, referred to in paragraph c above, and by which the Respondent was ordered to pay MWP’s costs, plus interest accruing at 10% per annum, compounded annually, in accordance with Bahamian Procedural Rules; and

g. the order of Master Eyre on 19 October 2014, in the High Court of Justice in London, by which all of the judgments and orders listed in paragraphs a to f above were recognised and became judgments and orders of the English High Court, and by which the Respondent was ordered to pay MWP’s costs, plus interest at 8% per annum, in accordance with English law,

[42] The memorial then records that Mr Sinclair is permitted to show cause why execution of the judgments and orders should not proceed and notifies Mr Sinclair of the hearing date to do so.

Item and parties	Court	Date³¹	Amount of judgment (in currency of judgment)
MWP v Sinclair	Court of Appeal Commonwealth of Bahamas	23 September 2014	$249,654.17
MWP v Sinclair	Court of Appeal Commonwealth of Bahamas	23 September 2014	$5000
MWP v Sinclair	Court of Appeal Commonwealth of Bahamas	23 September 2014	Result judgment
MWP v Sinclair	Court of Appeal Commonwealth of Bahamas	23 September 2014	Result judgment
MWP v Sinclair	Supreme Court Commonwealth of Bahamas		Result judgment with costs
MWP v Sinclair	Privy Council	24^thAugust 2014	Unless order and costs

[44] The memorial therefore does not contain the particulars set out at [39](c)(i),(ii) and (iii). In relation to the order referred to as “c” (which corresponds with Order 3 above), it does not provide the amount of the costs order made. These details are only available by a careful reading of the thick bundle of judgments and orders which are attached. Moreover, in relation to “b” (which corresponds with Order 2 above), it is unclear whether the Privy Council ordered costs, in addition to confirming the costs order under “a” (which corresponds with Order 1 above). The memorial, filed in accordance with s 56, becomes the record of the judgments or order on which execution may issue. It is therefore important that it clearly sets out the required particulars.

[45] There is a further difficulty. The memorial seeks enforcement of costs ordered by the Privy Council on 22 July 2014. However the amount of those costs had not been fixed at the time the memorial was filed, nor at the time of the hearing. Section 56 refers to a judgment or order “whereby any sum of money is made payable”. As I understand the process, the costs ordered by the Privy Council would not be payable until they have been fixed. MWP contends that execution can issue on the order to pay costs, and if costs have not been certified at the time enforcement steps are taken (for example, when an application to sell the property is made), Mr Sinclair could seek interim protection. I do not accept that submission. Either the memorial should be filed only once the amount becomes payable, or the order for

[46] Lastly, the order at “g” is not included in the affidavit referred to in the

[47] For these reasons, before allowing execution to proceed, I would require an amended memorial to be filed which addresses these matters.

[48] Kemp v Kemp considered the issue of what would amount to “sufficient cause” in the context of s 56.³³The High Court (Tipping J) referred to the three exceptions in private international law to recognising a judgment in personam of a foreign Court of competent jurisdiction as final and conclusive in New Zealand. These three exceptions are where the judgment was obtained by fraud, where its enforcement would be contrary to public policy, and where the proceedings in which the judgment was obtained was contrary to natural justice.³⁴The High Court considered these conventional grounds for resisting enforcement of foreign

_{judgments would come within “sufficient cause” under s
56.}³⁵_{It considered it
was}

“conceptually possible for the party resisting execution” to raise something else but it was not “immediately easy to see what such matters might be”.³⁶

[49] In this case Mr Sinclair seeks to resist execution on the basis of his claim that he is entitled to be indemnified for the costs MWP seeks to enforce as a result of the undertaking MWP provided when the Max shares were frozen. That claim led to a stay being granted in respect of the same judgments and orders in the United Kingdom. This ground is outside the conventional grounds for resisting enforcement of foreign judgments. In my view, this ground is better considered under the relevant civil procedure rule in this country for when a stay of a court order should be granted.

A liable party may apply to the court for a stay of enforcement or other relief against the judgment upon the ground that a substantial miscarriage of justice would be likely to result if the judgment were enforced, and the court may give relief on just terms.

[51] MWP submits that this rule does not apply because there is no judgment of this Court to stay. It says the effect of filing the memorial is not that the judgments or orders become judgments or orders of this court, but that once filed “execution may issue thereon”. Mr Sinclair’s counsel points out that the memorial filed in this case states that by filing the judgments and orders in sealed form they “have, therefore, been reciprocally recognised and have become judgments and orders of this Court.”

[52] In my view I do have power to order a stay of enforcement of the judgments and orders in the memorial. Rule 17.29 is found in Part 17 of the rules, which deals with the enforcement of judgments. It is under Part 17 that MWP would seek to initiate an enforcement process, for example for a charging order or a sale order. MWP is permitted to proceed under these rules because, pursuant to s 56(4) of the

Judicature Act 1908, the Court’s order is for “execution as upon a judgment ...or order of the Court”. The execution that is permitted “as upon a judgment ... or order of the Court” is enforcement under the Part 17 rules, one of which is rule 17.29 which empowers the Court to grant a stay. Further, even if the judgments or orders in the memorial were not, strictly speaking, “judgments” for the purposes of rule

17.29, resort could be had to rule 1.6 and the court’s inherent jurisdiction to achieve

[53] The power under rule 17.29 is available if a substantial miscarriage of justice would be likely to result. MWP says that test is not met. It says that in this jurisdiction costs are to be paid “as you go”, MWP has paid the costs it has been ordered to pay in other jurisdictions, there is no evidential foundation for Mr Sinclair’s claim that he is indemnified by the costs, MWP has very large claims against Mr Sinclair and there is a risk that Mr Sinclair will dissipate his assets.

[54] In my view there is an evidential foundation for Mr Sinclair’s indemnity claim. While it will depend on the view the courts in London ultimately take as to the scope of the undertaking provided, Master Yoxall considered Mr Sinclair had an arguable claim for damages and Whipple J considered Mr Sinclair’s claim “might” succeed and that he had “real prospects” of recovering money from MWP. While costs in this jurisdiction are ordinarily paid as you go, these costs were not ordered in respect of litigation in this country. They are costs connected to the litigation over the Max shares, and the relevant jurisdiction for that litigation, the United Kingdom, has decided (subject to an appeal) that enforcement of the costs orders should be stayed at this point. This distinguishes the matter from the cases MWP’s counsel relied on where stays of costs orders were sought. In my view there would be a substantial injustice to Mr Sinclair if he is deprived of the stay ordered in the

³⁷Rule 1.6 provides that where no form of procedure is prescribed, the court must dispose of the case as nearly as practicable in accordance with the provisions of these rules affecting any similar case. For the Court’s inherent jurisdiction to grant a stay of enforcement on appropriate terms where justice demands it, see Pinson v Pinson (1991) 5 PRNZ 177.

³⁸I have not overlooked that Whipple J commented that “[w]hat the New Zealand court choose to do is a matter for those Courts” (see Michael Wilson and Partners v Sinclair, above n 3, at [41]). However that was in response to a submission for MWP that the position in New Zealand was a reason for setting aside Master Yoxall’s decision. It does not make the position taken in the courts in London, where the litigation is centred, irrelevant to my consideration of whether an interim stay ought to be granted in this jurisdiction.

[55] I am not in a position to determine whether Mr Sinclair is correct that MWP is dissipating its assets, such that if he pays the costs to MWP he may never be able to recover them should he ultimately succeed in the litigation in which he is embroiled. The evidence about that is in dispute. Apparently the costs, if paid, would be subject to a worldwide freezing order in Mr Emmott’s favour but the details of that, and whether it is effective, are not known to me.

[56] In contrast, I consider MWP’s position is adequately protected through the existing interim orders in place over Mr Sinclair’s Wellington property that he make no further draw down on the mortgage on that property or otherwise increase the debt against that property. MWP accepts that Mr Sinclair has equity of about

$1 million in his New Zealand residential property. That equity appears to be sufficient to cover the costs that at this stage are fixed under the judgments and orders in the memorial.

[57] Accordingly, I consider it appropriate to grant an interim stay of enforcement of the judgments and orders referred to in the memorial.

[58] I decline to order that execution issue on the judgments and orders listed in the memorial dated 7 July 2015. If MWP wishes to pursue execution of judgments or orders from the courts of the Bahamas and/or the United Kingdom an amended memorial will need to be filed addressing the matters discussed above (refer [39], [40], and [44] to [46] above) and the example of a memorial in proper form attached to the judgment in Re Ulster Bank of Ireland Limited.³⁹The judgments and orders described in the memorial that has been filed are subject to an interim stay of enforcement pending further order of the Court. The interim charging order in

respect of Mr Sinclair’s Wellington property made by Williams J (refer [36](e) above) continues in force. The interim restraining order made by Brown J (refer [37](b) above) also continues in force. Whether these interim orders should continue can be considered once the appeal of the stay of the Registration Order in the United

_{Kingdom has been determined. Leave to file memoranda once that has
occurred is}

reserved. The proceeding should be listed for the first Judge’s Chambers List in

[59] Given these are interim orders, and given the complexity of the underlying litigation and that I am not in a position to form any view of the merits of that litigation, I am minded to reserve costs. If the parties have a different view, counsel are permitted to file brief memoranda on costs within 21 days of today’s judgment, following which I will make a decision on the papers.

High Court of New Zealand Decisions

Michael Wilson & Partners Limited v Sinclair [2016] NZHC 835 (29 April 2016)