Michael Wilson & Partners Ltd v Nicholls - [2008] NSWSC 1230

Reported Decision:
74 NSWLR 218

New South Wales

Supreme Court

CITATION: Michael Wilson & Partners Ltd v Robert Colin Nicholls & ors [2008] NSWSC 1230

HEARING DATE(S): 31 October 2008

JURISDICTION: Equity Division
Commercial List

JUDGMENT OF: Brereton J

EX TEMPORE JUDGMENT DATE: 4 November 2008

DECISION: Defendants ordered to produce discovered documents for inspection in Almaty, Kazakhstan subject to restrictions on dissemination. Motion otherwise dismissed.

CATCHWORDS: PROCEDURE – DISCOVERY – where defendants have repeatedly defaulted on complying with discovery over lengthy period but later rectified defaults – whether defence should be struck out - PROCEDURE – DISCOVERY – CONFLICT OF LAWS – where plaintiff is a law firm located in Kazakhstan – whether defendants (also in Kazakhstan) should be ordered to produce for inspection discovered documents – where documents are located and would be inspected in Kazakhstan – where defendants claim that production would contravene Kazakh civil/criminal law – whether documents subject to privilege against self-incrimination – whether a New South Wales Court can order a party to act in contravention of a law of a foreign State – distinction between procedural and substantive law – whether laws of forum in respect of procedure prevail – whether Court can take into account the laws of a foreign State when making procedural orders – onus of proof of illegality – whether allowing inspection would attract administrative, civil or criminal liability in Kazakhstan for disclosure of confidential commercial information – whether documents in fact contain confidential commercial information - PROCEDURE – DISCOVERY – whether defendants should give further and better discovery - PROCEDURE – DISCOVERY – Harman undertaking – where related arbitration proceedings on foot in United Kingdom – whether Harman undertaking given in respect of documents discovered should be set aside so that the documents can be used in the United Kingdom proceeding – where evidence suggests that application for access to discovered documents motivated by United Kingdom proceeding

LEGISLATION CITED: (NSW) Civil Procedure Act 2005, s 61(3)
(NSW) Evidence Act 1995, s 118
Civil Code of the Republic of Kazakhstan
Criminal Code of the Republic of Kazakhstan
Code on Administrative Violations of the Republic of Kazakhstan

CASES CITED: Barnes v Commissioner of Taxation [2007] FCAFC 88; (2007) 242 ALR 601
Carbotech-Australia Pty Ltd v Yates [2008] NSWSC 1151
Comaplex Resources International Ltd v Schaffhauser Kantonalbank (1991) 84 DLR (4th) 343
Duder v Amsterdamsch Trustees Kantoor [1902] 2 Ch 132
Ex parte Pollard (1840) Mont & Ch 239
National Mutual Life Association of Australasia Ltd v Godrich (1909) 10 CLR 1
The Consul Corfitzon [1917] AC 550

PARTIES: Michael Wilson & Partners Ltd (plaintiff)
Robert Colin Nicholls (first defendant)
David Ross Slater (second defendant)
Temujim Services Ltd (third defendant)
Temujim International Ltd (fourth defendant)
Temujim International FZE (fifth defendant)
Shaikenov & Partners, LLP (sixth defendant)
Temujim Holdings Ltd (seventh defendant)

FILE NUMBER(S): SC 50151/06

COUNSEL: Mr M Walton SC (P)
Mr G McGrath (D1-5)

SOLICITORS: Clayton Utz (P)
Henry Davis York (D1-5)

IN THE SUPREME COURT
OF NEW…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2008] NSWSC 1230
Decision Date: 4 November 2008

CaseChat Overview and Summary

The matter between Michael Wilson & Partners Ltd and Nicholls involved a dispute that required the court's determination of procedural and discovery matters. The plaintiff, a law firm based in Kazakhstan, was engaged in a legal action against the defendants, who were also located in Kazakhstan. The central issue in the case was whether the defendants should be compelled to produce documents for inspection in Kazakhstan, despite their assertion that such production would contravene Kazakh civil and criminal laws. The defendants further claimed that the documents were subject to privilege against self-incrimination and that their production would result in administrative, civil, or criminal liability in Kazakhstan due to the disclosure of confidential commercial information.

The court examined whether a New South Wales Court could order a party to act in a manner that contravenes the laws of a foreign State. It considered the distinction between procedural and substantive laws and whether the laws of the forum concerning procedure prevail. The court also assessed whether it could take into account the laws of a foreign State when making procedural orders and who bears the onus of proving the illegality. Additionally, the court evaluated whether the documents in question actually contained confidential commercial information and whether the defendants should provide further and better discovery. The case also involved a related arbitration proceeding in the United Kingdom, where the court had to decide whether a Harman undertaking given in respect of documents discovered should be set aside to allow their use in the United Kingdom proceeding.

The court ruled that the defendants' defaults in complying with discovery orders over an extended period warranted a strict approach. Despite the defendants' late compliance, the court considered their conduct in determining whether to strike out their defence. The court held that it could not order the defendants to produce documents for inspection in Kazakhstan, as doing so would contravene Kazakh laws. It found that the documents were not subject to privilege against self-incrimination and that the defendants had not proven that their production would result in liability in Kazakhstan. The court also held that it could take into account the laws of a foreign State when making procedural orders and that the onus of proving illegality lay with the defendants. Finally, the court decided that the Harman undertaking should not be set aside, as the application for access to the discovered documents was motivated by the related United Kingdom proceeding.

Orders