Michael Wilson and Partners Ltd v Nicholls

[2021] ACTCA 32

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
COURT OF APPEAL

Case Title:

Michael Wilson & Partners Ltd v Nicholls

Citation:

[2021] ACTCA 32

Hearing Date:

20 October 2021

DecisionDate:

21 October 2021

Before:

Elkaim J

Decision:

See [30]

Catchwords:

APPEAL – APPEAL FROM SUPREME COURT – CIVIL – Application – application for stay – application for security for costs – adjourned to await UK decision

Legislation Cited:

Court Procedures Rules 2006 (ACT) r 5001

Corporations Act 2001 (Cth) s 1335

Supreme Court Act 1933 (ACT) s 37J

Cases Cited:

Michael Wilson & Partners Ltd v Nicholls & Ors [2021] ACTSC 128

Parties:

Michael Wilson & Partners Ltd ( Applicant)

Robert Colin Nicholls ( First Respondent)

David Ross Slater ( Second Respondent)

Temujin Services Ltd ( Third Respondent)

Temujin International Ltd ( Fourth Respondent)

Temujin International FZE ( Fifth Respondent)

John Forster Emmott ( Sixth Respondent)

Effective Funds Management Pty Ltd ( Seventh Respondent)

Representation:

Counsel

M Wilson ( Applicant)

J Baird ( Sixth Respondent)

Solicitors

Michael Wilson & Partners ( Applicant)

Duggan Legal ( Sixth Respondent)

File Number:

ACTCA 36 of 2021

Decision under appeal: 

Court:  ACT Supreme Court

Before:  McWilliam AsJ

Date of Decision:          30 June 2021

Case Title:  Michael Wilson & Partners Ltd v Nicholls & Ors

Citation: [2021] ACTSC 128

ELKAIM J:

1. I am hearing this matter as a single judge of appeal, pursuant to s 37J of the Supreme Court Act 1933 (ACT).

1. The application heard by me was filed on 29 September 2021 and, in short, seeks a stay of an application for security for costs filed by the sixth respondent. The application is supported by an affidavit of Mr Michael Wilson sworn on 29 September 2021. Most of the affidavit was objected to on the grounds of relevance or containing submission. Having regard to the interlocutory nature of the application I allowed the material to stand subject to weight, a course to which objection was not taken.

1. The proceedings for which security for costs is sought are an application for leave to appeal from a decision of McWilliam AsJ handed down on 30 June 2021 (Michael Wilson & Partners Ltdv Nicholls & Ors [2021] ACTSC 128).

1. The leave to appeal application does not yet have a hearing date. It is very unlikely to be heard this year.

1. For the purposes of these reasons I will refer to Michael Wilson & Partners as the applicant and to Mr John Emmott as the respondent. Mr Emmott is the sixth respondent in the application for leave to appeal and the applicant in the application for security for costs.

1. The background to the matter might be described as a legal saga. It is described in detail by McWilliam AsJ in her judgment, from [7]. There is no need for me to make any addition.

1. The application for security for costs was filed on 16 August 2021. It seeks security in the sum of $22,500.00. It has been set down for hearing on 4 November 2021.

1. Although the application for security for costs is not being decided by me it is necessary to say a little about it.

1. The application is supported by an affidavit of Mr Peter Joseph Duggan sworn on 12 August 2021. Mr Duggan is the respondent’s solicitor.

1. The grounds listed in the application refer to Division 2.17.8 of Part 2.17 of the Court Procedures Rules 2006 (ACT). Rule 5001 says that this division applies to appellate proceedings. In addition, reliance is placed on s 1335 of the Corporations Act 2001 (Cth).

1. Mr Duggan says that the applicant is a company incorporated in the British Virgin Islands. It does not trade in the ACT. It has no assets in the ACT.

1. Annexed to the affidavit of Mr Duggan is an order of Judge Mackie QC made on 5 December 2014 which, inter alia, freezes the assets of the applicant both in and outside England and Wales. Also annexed are a series of amending orders culminating in an order of Judge Pelling QC made on 27 May 2021. While the amending orders vary the original order of Judge Mackie QC, a freezing order remains in place.

1. The application for security for costs seems straightforward, and without more, I would expect it to receive a favourable reception, although its outcome will of course be a matter for the judicial officer ultimately hearing it.

1. The reason behind the applicant’s request for a stay has little to do with the matter heard by McWilliam AsJ but is more concerned with what I will describe as worldwide litigation between the applicant and the respondent.

1. Most notably the freezing order referred to above is due to be considered again by Judge Pelling QC on 16 November 2021. The applicant said that it was expected that the already established path of diminution of the limit of the freezing order is likely to continue to the extent that it will be entirely rescinded. Further, said the applicant, it is the practice of Judge Pelling QC to deliver ex tempore reasons so that the fate of the freezing order will be quickly known.

1. If the freezing order is lifted then access to funds, said to be in the order of $2 million, held in the St George bank in Australia, will be available and the security for costs could be easily paid.

1. I asked Mr Wilson what the purpose of the stay application was. I suggested the matters he has raised are essentially in defence of the application for security for costs and would be more appropriate to be ventilated during that application.

1. Mr Wilson responded that the security for costs application would require a good deal of evidence to be filed on the part of the applicant, so that the purpose of the current application was to avoid the time and expense that would be involved.

1. Ultimately the application before me is for an adjournment of the security for costs application and not for a stay. The applicant submitted that the security for costs application relied substantially on the freezing order referred to above. In other words as long as the freezing order remains in place, the applicant will not have the funds available to meet any costs order.

1. Mr Baird, who appeared for the respondent, pointed out that while the freezing order is a factor, it is not the only basis for that application. Mr Baird opposed both the stay and an adjournment. He submitted that there was no reason for the application not to proceed on 4 November 2021, and the submissions made before me could be made again in opposition to an order for security for costs.

1. Mr Baird accepted that no prejudice would flow to the respondent if the matter were adjourned to a date shortly after 16 November 2021 but he said any adjournment should be to a fixed date to enable the matter to proceed as expeditiously as possible.

1. The voluminous material put before me and seemingly extravagant assertions of monetary amounts being owed by the respondent raise an air of an attempt at diversion on the part of the applicant. But this is only an observation and certainly not a concluded finding.

1. While Mr Baird is correct in his submission that the presence of the freezing order is not the only basis upon which security is sought, it is nevertheless a part of the respondent’s application as confirmed by the contents of Mr Duggan’s affidavit and the numerous annexures to that affidavit.

1. If, as suggested by Mr Wilson, the lifting of the freezing order will negate the need for the security for costs application, and if no prejudice flows from an adjournment of the application, then I think it should be granted. If events transpire as predicted by Mr Wilson, then there will be a substantial saving of costs and court time.

1. The next question is, if there is to be an adjournment of the security for costs application, should it be to a fixed date or should it be listed for mention once news from the United Kingdom is to hand. Mr Baird said that if a new date was not set there was a prospect of the application for security for costs not proceeding this year leading to unnecessary delay. Mr Baird suggested the 22^nd, 23^rd or 24^th of November as appropriate dates.

1. While I think Mr Baird’s suggestion is sensible, the time between 16 November and the suggested dates is too short to enable the compilation and filing of evidence. The very purpose of the application before me is to avoid this exercise.

1. It is also worth noting that the application for leave to appeal will not be heard for some time and certainly not before the application for security for costs. I will ensure this position in the orders that I make.

1. I have therefore decided to vacate the hearing date for the application for security for costs and list the matter for mention before the Registrar on 25 November 2021 at 2:30pm. If this date is not suitable to Mr Baird, he has leave to contact my associate to request a change of the date to a different Thursday afternoon.

1. As far as the costs of this application are concerned, although the application has succeeded in delaying the security for costs application, it has not achieved the stay that was originally sought. I think the appropriate costs order is that each party should pay its own costs. This is also to achieve a balance with any costs implications that might flow from the vacation of the hearing on 4 November 2021. I will give leave to the parties to make submissions for a different order.

1. I make the following orders:

1.The hearing of the security for costs application on 4 November 2021 is vacated.

2.The security for costs application is stood over for directions before the Registrar on 25 November 2021 at 2:30pm.

3.The application for leave to appeal is also listed for directions before the Registrar on 25 November 2021 at 2:30pm.

4.If any hearing dates are assigned by the Registrar, the hearing of the application for security for costs is to precede the hearing of the application for leave to appeal by no less than 60 days.

5.Each party is to pay its own costs of the application for a stay filed on 29 September 2021.

6.Each party has leave to request a different costs order, by written submissions to be filed within 7 days of this order. A decision will be made on the papers.

I certify that the preceding thirty [30] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Elkaim.

Associate:

Date: 25 October 2021