Michael Wilson & Partners Ltd v Nicholls

[2008] NSWSC 501

CITATION:	Michael Wilson and Partners Limited v Robert Colin Nicholls [2008] NSWSC 501
HEARING DATE(S):	12/05/08, 13/05/08, 20/05/08, 23/05/08
JUDGMENT DATE :	23 May 2008
JURISDICTION:	Equity Division Commercial List
JUDGMENT OF:	Einstein J
DECISION:	Case management decisions on a number of issues including refusal to split issues of liability and quantum, grant of leave to further amend commercial list statement, order that if plaintiff seeks leave to file further evidence in chief all extant freezing orders be automatically revoked, security for costs, confidentiality regimes and extension of freezing orders.
CATCHWORDS:	PRACTICE AND PROCEDURE - Case management - Overriding purpose rule- transformation of the anterior overriding purpose rules of the Court into statutory form has given a new lease of life to the Court's discretionary case management powers - Dennis v Australian Broadcasting Corporation [2008] NSWCA 37 - Separate question orders - Leave to amend pleading - Difficulties in refusing leave where the hearing date has been vacated and no particular prejudice to the defendants has been identified - Leave to serve further evidence - Variation of confidentiality regime - Application for discovery - Security for costs - Freezing orders
LEGISLATION CITED:	Civil Procedure Act 2005 Supreme Court Rules 1970 Uniform Civil Procedure Rules 2005
CATEGORY:	Procedural and other rulings
CASES CITED:	Australian National Industries Ltd v Spedley Securities Ltd (in liq) (1992) 26 NSWLR 411 Barnes v Addy (1874) LR 9 Ch App 244 Barrett v Ecco Personnel Pty Ltd [1998] NSWCA 30 Beach Petroleum NL v Johnson (1992) 7 ACSR 203 CBS Productions Pty Ltd v O'Neil [1985] 1 NSWLR 601 Century Medical Inc v THLD Ltd [2000] NSWSC 5 Cropper v Smith (1884) 26 Ch D 700 Dennis v Australian Broadcasting Corporation [2008] NSWCA 37 Dunstan v Simmie & Co Pty Ltd [1978] VR 669 Hadid v Australis Media Ltd (Supreme Court of NSW, Rolfe J, 29 March 1996, unreported) Idoport Pty Ltd v National Australia Bank Ltd [2000] NSWSC 1215 Law Society of NSW v Bruce (Supreme Court of New South Wales, Rolfe J, 23 April 1996, unreported) Ninemia Maritme Corporation v Trave GmbH & Co KG (The Niedersachsen) [1983] 2 Lloyd’s Rep 600; [1983] 1 WLR 1412 Parramatta Stadium Trust v Civil and Civic Pty Ltd (Supreme Court of New South Wales, Hunter J, 27 August 1996, unreported) Patterson v BTR Engineering (Aust) Limited (1989) 18 NSWLR 319 Rajski v Carson (1988) 15 NSWLR 84 Sali v SPC Ltd (1993) 67 ALJR 841 Smith Martis Cork & Rajan Pty Ltd v Benjamin Corporation Pty Ltd (2004) 207 ALR 136 State of Queensland v JL Holdings Pty Ltd 189 CLR 146 Story of Sydney Pty Ltd v Ling (Supreme Court of New South Wales, Rolfe J, 15 November 1994, unreported) Tallglen Pty Ltd v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130 Wright v Ryan [2005] NSWCA 368
TEXTS CITED:	Steven Gee et al, Commercial Injunctions, 5th ed (2004) Sweet & Maxwell
PARTIES:	Michael Wilson & Partners (Plaintiff) Robert Colin Nicholls (First Defendant) David Ross Slater (Second Defendant) Temujin Services Limited (Third Defendant) Temujin International Limited (Fourth Defendant) Temujin International FZE (Fifth Defendant) Shaikenov & Partners, LLP (Sixth Defendant) Scoulton Holdings Limited (Seventh Defendant)
FILE NUMBER(S):	SC 50151/06
COUNSEL:	Mr M Walton SC, Mr J Drake (Plaintiff) Mr G C Lindsay SC, Mr G McGrath (First Defendant) Mr F Gleeson SC, Mr A Fox (Second to Fifth Defendants) Ms J E Richards (PJT Corporate Services, a non-party)
SOLICITORS:	Clayton Utz (Plaintiff) Henry Davis York (First to Fifth Defendants) Shand & Associates

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

Einstein J

Friday 23 May 2008

50151/06 Michael Wilson & Partners Limited v Robert Colin Nicholls & Ors

JUDGMENT

The nature of the issues

1 Case management of significant litigation is often particularly difficult. As such litigation moves closer to a final hearing it is not uncommon to find applications, now from one side of the bar table and now from the other, seeking sundry extensions of time in which to file amended pleadings, or in which to have an existing timetable extended, or in which to challenge the opponent’s discovery to date. The situation becomes particularly exacerbated when, for whatever reason, the Court has vacated the date fixed for the final hearing. This is because, almost by definition, one will very often find that, between the vacation of the date fixed for final hearing and the commencement of whatever later date be fixed, a variety of applications will be made of a type not dissimilar to the above described form of applications.

2 The Court is only able to act on applications and all applications require to be treated with on their merits. But the conduct of litigation in New South Wales is now constrained by the material provisions of the UCPR.

The overriding purpose rule

3 The lodestar by which the practice and procedure of the Commercial List is steered is to be found in the overriding purpose rule set out in section 56 of the Civil Procedure Act 2005 ["the CPA"]:

(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.

4 Both the Court, the parties to the proceedings and their legal counsel are required to give effect to and promote this overriding purpose. The CPA also goes on, in sections 57 and 58, to set out the objectives of case management, and to detail a range of matters to which the Court may have regard when making an order or direction, in order to ensure that such orders are in accordance with the dictates of justice. These elements include:

(ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities;

(iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties;

(iv) the degree to which the respective parties have fulfilled their duties under section 56 (3);

(v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings;

(vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction;

(vii) such other matters as the court considers relevant in the circumstances of the case.

5 Sections 59 and 60 of the CPA go on to emphasise the need for the Court to take into account the need to minimise delay and ensure that costs to the parties remain proportionate to the issues in dispute.

6 It is difficult to overemphasise the significance which these provisions have had in terms of the constraints placed upon the Commercial List by the exigencies of the complex litigation which constitutes its daily fare. In many ways the transformation of the anterior overriding purpose rules of the Court into statutory form has given a new lease of life to the Court’s discretionary case management powers, where, over past decades, case management procedures were alternately hailed or derided.

[A number of the earlier authorities were examined in the seminal decision of the High Court of Australia in State of Queensland v JL Holdings Pty Ltd 189 CLR 146 where the majority judgement of Dawson, Gaudron and McHugh JJ observed [at 154] that case management was not an end in itself although being an important and useful aid for ensuring the prompt and efficient disposal of litigation. Their honours observed that it ought always to be borne in mind that the ultimate aim of a court is the attainment of justice and that no principle of case management could be allowed to supplant that aim.

Kirby J [at 163] chronicled the many differences of opinion which had arisen amongst appellate judges in relation to this area and in dealing [at 166] with the evolving case law on pleading amendments in particular, pointed out that in Sali v SPC Ltd (1993) 67 ALJR 841 the High Court had endorsed the need to consider the competing claims of other litigants and the public in the following terms:

"In determining whether to grant an adjournment, the judge of a busy court is entitled to consider the effect of an adjournment on court resources and the competing claims by litigants in other cases awaiting hearing in the Court as well as the interests of the parties… What might be perceived as an injustice to a party when considered only in the context of an action between parties may not be so when considered in a context which includes the claims of other litigants and the public interest in achieving the most efficient use of court resources."]

7 Dennis v Australian Broadcasting Corporation [2008] NSWCA 37 is a recent decision by the Court of Appeal of particular significance which emphasises what I have indicated in terms of the statutory underpinning of the overriding purpose duty. Relevantly Nicholas J at first instance had refused to grant leave to the applicant to replead and in doing so exercised the discretion solely on the basis that the limit to which leave should be given to replead “has been well and truly reached” by what was effectively the sixth pleading. The holding was that the trial judge was correct to do so. Further and in any event, no error had been identified which would justify this Court of Appeal interfering with the exercise of the discretion.

8 The Chief Justice [with whose reasons Basten and Campbell JJA agreed] put the matter as follows:

[28] The respondent invoked the authority of Queensland v J L Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146 in support of its ability to amend, even for the fifth time. Case management practices in all Australian courts have changed significantly in the decade since that judgment. Although it remains binding authority with respect to the applicable common law principles, the circumstances of the case were significantly different from those in the present case and do not dictate its outcome. In any event, such principles can be, and have been, modified by statute both directly and via the statutory authority for Rules of Court.

[29] In this State J L Holdings must now be understood as operating subject to the statutory duty imposed upon the courts by s 56(2) of the Civil Procedure Act 2005 , which requires the Court in mandatory terms — “must seek” — to give effect to the overriding purpose — to “facilitate the just, quick and cheap resolution of the real issues in the proceedings” — when exercising any power under the Act or Rules. That duty constitutes a significant qualification of the power to grant leave to amend a pleading under s 64 of the Civil Procedure Act .

9 These matters of general case management principle and of the difficulties which can arise where the Court is pressed to allow additional amendments have particular poignancy in relation to the applications presently before the Court. In relation to these present proceedings the circumstances which prevail involve two relatively recent occasions when hearing dates were vacated. And as may sometimes confidently be expected, notwithstanding prior guillotine orders aimed at preventing the adducing of further evidence without leave, precisely such an application is amongst the cluster of applications to be dealt with.

10 It is convenient to turn to the relevant background.

The relevant background

11 The plaintiff, Michael Wilson & Partners [“MWP”] is said to be a large law firm incorporated in the British Virgin Isles and carrying out its business of providing legal services in Kazakhstan. Mr Michael Wilson is a director and principal of MWP. Apparently MWP never operated in Australia.

12 The first and second defendants, Mr Robert Colin Nicholls [apparently an Australian barrister] and Mr David Ross Slater [apparently a New South Wales solicitor], were, on the plaintiff's case, previously employed by MWP. On the plaintiff's case, Mr Emmott was also a previous employee of MWP. It is common ground that, while not a party to the present proceedings, Mr Emmott is involved in a related commercial arbitration taking place in London later this year.

13 The plaintiff's case is that Mr Slater set up a small competing firm in Kazakhstan, in which both Mr Nicholls and Mr Emmott are employed as consultants. The plaintiff's case is that this firm is conducted through the third, fourth and fifth defendants [referred to respectively as “TSL”, “TIL” and “TFZE” or collectively as “The Temujin companies”]. The sixth defendant, Shaikenov & Partners LLP [“SP”] is said to be [amongst other things] a beneficiary and until holder in TIL, and was not represented in these proceedings.

14 The plaintiff makes a range of allegations regarding the conduct of the abovementioned defendants. Broadly speaking, these include allegations that the individual defendants, by various acts and at various times from February 2005 onwards, arranged, while in the employ of the plaintiff, to set up their own practice and divert business and opportunities that should have gone to the plaintiff [cf: McDougall J judgment of 20 February 2008 at 3].

15 There are also allegations that the defendants’ conduct after the termination of their employment breached their duty to maintain for MWP’s benefit confidential information received as part of their employment.

16 Mr Nicholls, Mr Slater and Mr Emmott are said to have terminated their employment with MWP on 1 March 2006, 9 January 2006 and 20 July 2006 [respectively].

17 The plaintiff's case is that the employment contracts of the first and second defendant were entered into in NSW, and are subject to NSW law. At least some of the defendants were served outside of NSW, but have submitted to the Court’s jurisdiction.

18 The plaintiff's case in terms of the attempts to prove loss and damage appears to require the Court to travel through the highways and byways of numerous alleged activities of the defendants in and about complex commercial dealings from which the plaintiff claims it would have benefited but for the defendants’ claimed wrongdoing.

19 To my mind a deal of the problems treated with during the hearing of the motions before me arises simply because the very tight timetable leading to the original May fixture, which appears to have resulted in a massive work effort by the plaintiff. However, the defendants have not been able to adequately adumbrate problems with the plaintiff’s so-called contentions explaining its further claims [outlined in the "Addendum to Plaintiffs Submissions" furnished to the Court by Mr Walton as an aide memoir, together with the accompanying folder of documents MFI P3].

The conduct of the present proceedings

20 The proceedings have been on foot for some time. In November last year, the proceedings were listed for hearing on 5 May 2008, a date that was later vacated in favour of 12 May 2008. On 17 April 2008, orders were made to vacate the hearing, and to set aside the 12 May 2008 date for the hearing of all outstanding interlocutory applications.

21 The defendants allege that the substantial delays in proceeding with the litigation have been caused by the plaintiff’s failure to comply with the timetable established for the serving of evidence. In return, the plaintiff alleges that delays have been due, at least in part, to the defendants’ failure to provide proper and timely discovery. The plaintiff also put forward evidence that is said to substantiate the physical impossibility of the plaintiff having been able to comply with certain parameters of the Court's directions in relation to the date for filing its further evidence.

22 At the commencement of the hearing of the several motions, an issue arose concerning the plaintiff's contention that it had been unaware that the defendants were still pressing their motion that freezing orders made against the assets of the first and second defendants be lifted. Due to an alleged error in the drafting of the relevant short minutes of order made by McDougall J, the plaintiff understood that the motion to lift the freezing orders had been dismissed. In fairness to the position explained to the court by senior counsel for the plaintiff, the hearing of the applications by which freezing orders were sought to be discharged or extended were set aside to be dealt with on 20 May 2008, on which date the remaining motions were heard.

The motions

23 Outside of those motions which relate to the freezing orders, the motions which remained to be decided include:

(a) The plaintiff's motions filed 16 April 08, 22 April 08 and 5 May 2008, seeking:


i. splitting issues of liability and quantum;

ii. leave to further amend its further amended commercial list statement;

iii. leave to serve further evidence in chief;

iv. variation of the previously agreed confidentiality regime, so as to permit a broader range of people to inspect the Defendants’ confidential documents (part 1a of the Defendants’ list of documents);

v. discovery by the defendants as to their client files (category 13 documents) and other documents (the Roxi/Pinegrove documents, PJT documents, Frontier Mining/Benkala Copper project documents, and their alleged interests in Cowaramup or Sunkar) and documents referred to in certain paragraphs of Mr Wilson's primary affidavit.


(b) The defendants’ motion filed 27 Feb 08 seeking disclosure of the plaintiff’s current past directors, officers and shareholders.

(c) The defendants' motion filed 20 Mar 08, seeking further security for costs.

The motion for the separate question order

24 It is convenient to commence with this question which is of course particularly significant for the future path of this litigation. I am quite clear that in relation to this litigation the principal the exercise of the relevant discretion is to dismiss the application for a separate question regime by which liability would be dealt first and quantum would be dealt with later.

The principles concerning the making of separate question orders

25 The general principles applicable to the separate determination of issues were referred to in some detail in Idoport Pty Ltd v National Australia Bank Ltd [2000] NSWSC 1215 at paragraphs 7 - 8. Those paragraphs were in the following terms:

"[7] Without examining specific cases in relation to the power conferred on the Court in Part 31, Rule 2, I proceed on the basis of the following principles.


(1) The power of the Court to order the separate determination of an issue is a discretionary power which must be exercised judicially, but cannot otherwise be fettered: Dunstan v Simmie & Co Pty Ltd [1978] VR 669 at 670 per Young CJ and Jenkinson J.

(2) In exercising the power under Part 31, Rule 2, the Court is now enjoined to give effect to the overriding purpose of the Supreme Court Rules ; namely to facilitate the just, quick and cheap resolution of the real issues in the proceedings and cannot be stated in a more confined way: Part 1, Rule 3 (1), (2) Supreme Court Rules .

(3) The Court begins with the proposition that it is ordinarily appropriate that all issues in a proceeding should be disposed of at the one time: Tallglen Pty Ltd v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130 at 141 per Giles CJ in Comm D, Hadid v Australis Media Ltd (unreported, Supreme Court of NSW, 29 March 1996 per Rolfe J). Accordingly, it is for the party who wishes to have a question separately determined to show that it is desirable for that to occur.

(4) Without being exhaustive, the separate determination of an issue may prove to be an appropriate procedure in at least the following sets of circumstances:

(a) where the resolution of that separate issue will have the effect of resolving the entirety of the litigious controversies or of substantially narrowing the field of litigious controversy: CBS Productions Pty Ltd v O'Neil [1985] 1 NSWLR 601 at 606 per Kirby P, Dunstan v Simmie & Co Pty Ltd [1978] VR 669 at 671 per Young CJ and Jenkinson J;

(b) where the resolution of that separate issue carries with it a strong prospect that the parties will thereafter be able to resolve their dispute themselves and thus avoid further litigation: Tallglen v Pay TV Holdings ( supra, at 141 - 142 per Giles CJ in Comm D);
(c) where there is a clear demarcation between that issue and all other issues in the case, including issues going to the credit of witnesses: CBS Productions Pty Ltd v O’Neil (supra, at 606 per Kirby P), Tallglen v Pay TV Pty Ltd (supra, at 142 per Giles CJ in Comm D), Rajski v Carson (1988) 15 NSWLR 84 at 88 per Kirby P and Hope JA.

(5) Conversely, the separate determination of an issue will rarely be an appropriate procedure where:


(a) there are intertwined issues of fact or law between the separated question and the other questions such that the determination of the separate question will not have any substantial effect upon the width of the field of litigious controversy or the prospect of the settlement of the balance of the litigation: Law Society of NSW v Bruce (Supreme Court of NSW, Rolfe J, 23 April 1996, unreported), Parramatta Stadium Trust v Civil and Civic Pty Ltd (Supreme Court of New South Wales, Hunter J, 27 August 1996, unreported).

(b) where there is a commonality of witnesses and issues of credit as between the separate issue and other issues in the case which will or may necessitate a ruling on the credit of one or more of the common witness, thus possibly precluding that same judicial officer from again dealing with the matters going to the credit of the common witness in accordance with the decision of the Court of Appeal in Australian National Industries Ltd v Spedley Securities Ltd (in liq) (1992) 26 NSWLR 411: Story of Sydney Pty Ltd v Ling (Supreme Court of New South Wales, Rolfe J, 15 November 1994, unreported), Century Medical Inc v THLD Ltd [2000] NSWSC 5.
(c) there is a possibility that the resolution of the separate issue will not finally determine the issue but will merely result in an appeal from that decision in relation to that separate issue, creating a multiplicity of proceedings, interruption to the court and undesirable fragmentation of the proceedings: Story of Sydney Pty Ltd v Ling (supra ), Century Medical v THLD (supra).
(6) The experience of courts suggests that the separation of proceedings often does not result in the quicker and cheaper resolution of proceedings as anticipated, but often has the reverse effect, merely causing added delay and expense to the resolution of the litigation. Thus, before an issue is to be separately determined, it must be possible to clearly see that it will facilitate the quicker and cheaper resolution of the proceedings: Tallglen v Pay TV Pty Ltd (supra, at 142 per Giles CJ in Comm D), Parramatta Stadium Trust v Civil and Civic Pty Ltd (supra ), Century Medical v THLD (supra).

[8] As Giles CJ in Comm. D (as his Honour then was) said in Tallglen ( supra, at 142):

"Part 31, rule 2 of the rules empowers the court to make orders for the decision of any questions separately from any other question, whether before, at or after any trial or for the trial in the proceedings, and for the statement of a case and the question for decision. In the ordinary course, all issues in proceedings should be decided at the one-time, but separate decision of a question may be appropriate where, for example, the decision of the question is critical to the outcome of the proceedings and ( at least if decided in one-way) will bring the proceedings to an end. In particular circumstances the separate decision of a question may be appropriate even if it will not bring the proceedings to an end, such as where there is a strong prospect that the parties will agree upon the result when the core of their dispute is decided or where the decision will obviate unnecessary and expensive hearing of other questions, but such occasions must be carefully controlled lest fragmentation of the proceedings (particularly when the exercise of right of appeal is borne in mind) brings delay, expense and hardship - that which the making of an order was intended to avoid. It is often the case that the need to make findings of fact for a decision of the separate question, especially findings which may involve issues of credit, tells strongly against the making of an order because related facts, and renewed issues of credit, will or may arise at a later stage in the proceedings . Experience teaches that it should be able to be seen with clarity that decision of a separate question will be beneficial in the conduct of the proceedings and the resolution of the parties dispute."" [Emphasis added]

26 Clearly, however, each application for a separate determination must be determined upon its own merits.

Dealing with the issue

27 The very magnitude of the proceedings and the virtual certainty that a number of the same witnesses who would be called by the respective parties on the liability side [were a separate question regime to be imposed] would also require to be called on the second tranche quantum hearing, itself makes quite plain that the present is a circumstance in which 'the longest wait is often found to be the shortest'. Further it seems to me quite plain that to split the proceeding in two separate question tranches would ultimately both very likely be more expensive to all parties and certainly lead to a very protracted path through to final decision.

28 And finally although this is not often appreciated by the profession, there can certainly be cases where there is bitter argument which only later ensues as to whether or not particular witnesses called on the liability tranche are later also able to be called on the quantum tranche: giving rise to real questions which can be extraordinarily difficult to resolve.

Leave to further amend the plaintiffs amended commercial list statement

29 In the proposed second further amended commercial list statement the plaintiff seeks to make a number of amendments, the principal of which involve the following allegations:

i. In respect of Messrs Emmott (paragraph 25(xii), Nicholls (paragraph 31) and Slater (paragraph 43) an allegation that each owed a duty of confidence to the plaintiff, that continued after termination of each person’s respective employment by the plaintiff, to maintain for the plaintiff’s exclusive use and benefit the confidential information belonging to the plaintiff as to the services it was performing on behalf of its clients, which duty was in each case breached;

ii. A claim that the breach of each defendant’s contract, and the duty of confidence he owed to the plaintiff, included a failure to perform professional services on behalf of those clients in respect of whom he had been providing such services prior to the termination of his employment, including on behalf of Pinegrove Equities Plc. This is said to have resulted in his providing such services on behalf of Roxi Petroleum Plc in relation to its admission to AIM in or about May 2007 and its re-admission to AIM in about February 2008 (paragraphs 59A (Slater) and 61A (Nicholls);

iii. An allegation that each of the defendants knowingly participated and assisted in the dishonest breaches by Mr Emmott and of each other of their respective fiduciary duties to the plaintiff (paragraph 68);

iv. Allegations that the two individual defendants and Mr Emmott induced each other to breach their respective agreements with the plaintiff; alternatively that their conduct hindered or prevented the performance by each of their respective agreements (paragraphs 79A-79C).

[note that the numbering i - iv is my own]

30 The previous history in terms of the sundry amendments to the commercial list statement is broadly as follows:

i. The plaintiff filed an Amended Commercial List Statement on 29 January 2007.

ii. In the second half of 2007 it sought leave to amend it again and on 23 November 2007 the plaintiff was granted leave to file a Further Amended Commercial List Statement (after the Court refused to grant such leave on 2 previous occasions).

iii. The plaintiff’s 1st and 2nd drafts of its proposed Further Amended Commercial List Statement were rejected by the Court, and on 23 Nov 2007 the Court granted it leave to file and serve its 3rd draft Further Amended Commercial List Statement and fixed the proceedings for trial commencing on 5 May 2008.

31 There is no particular excuse put forward by the plaintiff in terms of the lateness to plead the matters raised in the paragraphs which I have numbered above as i, iii and iv.

32 Clearly enough the plaintiff simply seeks to rely upon the classical statement of the approach to be taken in the exercise of the discretions to permit pleading amendments [and I would add, like case management granting leave to depart from set directions] to be found in the opinion of Bowen LJ in Cropper v Smith (1884) 26 Ch D 700, in which his Lordship held[at 710-711]:

“it is a well established principle that the object of Courts is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights. Speaking for myself, and in conformity with what I have heard laid down by the other division of the Court of Appeal and by myself as a member of it, I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the Court ought not to correct, if it can be done without injustice to the other party. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of favour or of grace.”

33 But for the fact that there is, at the present time, no hearing date fixed, the principled exercise of the discretion may well have been to deny the leave sought in respect of amendments i, iii and iv. However there being no hearing date yet fixed it seems to me that the discretion requires to be exercised in favour of the plaintiffs being permitted to make those amendments.

34 There is no substance:

i. in the defendants contention that paragraphs 59A and 61A should not be allowed: the contention being that they do not plead any overt acts which are capable of constituting a breach of the first and second defendants alleged employment contracts;

ii. in the defendant's contention that paragraphs 10 (c), 68 and 69 are defective in failing to plead how it is alleged that the defendants 'assisted' Mr Emmott in the alleged breaches of his contract;

iii. in the defendant's contention that there is insufficient particularisation of paragraphs 25 (xii), 31 and 43 in terms of what was the alleged "confidential information";

iv. in the defendant's contention that paragraphs 79A, 79B and 79C are defective by reason of the failure to plead any overt acts going to the alleged 'knowledge' of the defendants or any overt acts going to how it is alleged that the defendants 'induced' the alleged breaches of contract.

35 It has to be recalled that the pleading requires to be read as a whole and that in the nature of things the plaintiff is entitled to endeavour to make its case by reference to all of the evidence.

36 The position is slightly different with respect to amendment ii.

37 The defendants challenged this material upon the basis that these matters fall outside of the existing causes of action already pleaded. This challenge is without substance as is demonstrated by the plaintiffs submissions explaining its case in this regard which seeks to allege as follows:

i. The contracts of employment between MWP and each of Messrs Nicholls and Slater included express terms that each would (see paras 28 & 29):


a) respect and maintain strict confidentiality as to all matters, especially dealings which MWP has as to projects, clients and with Government and State Agencies; and

b) following the termination of his employment at MWP, not approach, solicit or make offers to any of MWP's contacts, clients or staff and would not seek to work on any projects or developments in which MWP is involved, without MWP's prior consent.


ii. It is MWP’s claim that RCP/ UMC/ Pinegrove were the clients of MWP and that Pinegrove was solicited away from MWP by the defendants. It is MWP’s case that, as a result of the solicitation of Pinegrove, the defendants came to provide services in connection with the Roxi admission and re-admission transactions: see particulars to para 56 at (v) and para 57 at (v).

iii. Mr Slater “ copied and took ” MWP’s precedents, documents and correspondence and those of MWP’s Clients. (“MWP Clients” is defined at para 32 of the pleading.) The documents taken by Mr Slater set forth in paras 48 (iv) and (xi) relate to RCP/ UMC/ Pinegrove.

iv. Messrs Nicholls and Slater solicited MWP’s contacts and clients to divert work from MWP to TIL and Shaikenov, including the MWP Clients: paras 35 and 49.

v. During the course of their employment at MWP, Messrs Emmott, Nicholls and Slater worked “in relation to UMC Energy PLC … which was then replaced by Pinegrove (subsequently Roxi Petroleum Plc) [in which] MWP was retained in relation to the due diligence, structuring, acquisition and documentation of the North West Zhetybai, North Karamandybas and Munaico Oil and Gas Field projects during the period from 2005”: para 56.

vi. Following the termination of Mr Slater's employment with MWP, Messrs Nicholls and Emmott, who remained employed by MWP, assisted Mr Slater in furthering his and their own interests and the interests of TIL and Shaikenov by, inter alia (1) using MWP's computer and email systems; (2) supplying information and documents in MWP's files; (3) attending meetings for which TIL and Shaikenov billed the relevant client, but for which MWP did not; and (4) funding the activities for TIL and Shaikenov with MWP's funds: para 57.

vii. Since early 2006, TIL with the assistance and co-operation of Shaikenov, has been providing agent, advisory and legal services to Pinegrove in relation to the structuring and acquisition of the North Karamandybas Oil and Gas Field project and also as to the Ravninnoye and Baibars Munai and other field projects: para (v) of the particulars to para 57. (MWP will rely on the TIL invoices in this regard, an example of which is Annexure K of MFI-P3.)

viii. Following the termination of their employment with MWP, in breach of contract and fiduciary duty, and in breach of the duty of confidence owed to MWP, Messrs Nicholls and Slater continued to perform professional services on behalf of MWP clients and contacts (including the MWP Clients), including Pinegrove, which resulted in their providing services on behalf of Roxi Petroleum Plc in relation to its admission to AIM in or about May 2007 and its re-admission to AIM in about February 2008: see para 59A and 61A. MWP relies on the following particulars:


a) the affidavit of David Slater sworn 27 February 2008;

b) the Roxi Admission Document dated 16 May 2007;

c) the announcement of AIM released 13 February 2008; and

d) the Roxi AIM Re-admission Document dated 31 January 2008.


ix. Caretti MWP also maintains a claim in conspiracy to defraud in this regard: see paras 72-78 (and the particulars thereto).

x. Now, upon the information learned by Mr Wilson on 16 February 2008, it has come to light that TIL has been paid about US$1.25 million and Roxi has allocated US$30 million (in cash and shares) to PJT, which has directed the shares to be allotted to Mr Slater (personally) for services provided to Roxi in the context of the re-admission of Roxi to AIM: Wang affidavit sworn 22 April 2008 at Tab 15, para 52.

xi. In the event, MWP has a claim against the defendants for the loss and damage suffered by MWP as a result of the solicitation by the defendants of Pinegrove sounding in damages and/or in equitable compensation and/or for an account of profits. This claim includes:


a) the loss of fees/other consideration (such as shares) in acting for Pinegrove generally, and which fees etc went instead to the defendants;

b) the loss of fees/other consideration on the sale by Pinegrove of North Karamandybas oil field interests to Roxi (ie the Roxi admission), and which fees etc went instead to the defendants;

c) the loss of fees/other consideration paid to the defendants on the Roxi admission and readmission transactions; and/or

d) any other profits (in whatever form) taken by the defendants on these transactions.

38 There is evidence before the Court on information and belief given by Mr Wang to the following effect:

“As to Order 8 and 9 of the Motion - Roxi Petroleum Plc ("Roxi"), PJT Corporate Services Pty Limited ("PJT") and PJT International Pty Limited ("PJT International)

Roxi

52. I am informed by Mr Wilson and verily believe that it was not until 16 February 2008 that he discovered that Mr Slater was to receive US$30 million in cash and stocks in connection with the re-admission to AIM of Roxi. As recorded at paragraph 10(r) of my Additional Affidavit, Mr Wilson discovered this upon reading a regulatory announcement on Roxi's web site headed “ Announcement to be made by the AIM Applicant prior to Admission in Accordance with Rule 2 of the AIM Rules for Companies" . In this regulatory announcement there is a reference to David Slater as the name of a person to be disclosed in accordance with Schedule 2, paragraph (h) of the AIM Rules as receiving securities and other benefits as a result of the re-admission of Roxi to AIM. At paragraph 10(t) of my Additional Affidavit, I set out the paragraphs from the Roxi AIM Re-admission Document which provide for Mr Slater to receive the benefits through a company called "PJT" (this company is discussed further below) as well as the fees that TIL is to receive as a result of services provided to the company PJT related to the Roxi AIM Re-admission.

53. The history as to why the Court should regard Roxi as an MWP Client is recorded in paragraph 10 of my Additional Affidavit. The work conducted by MWP for RCP, UMC and Pinegrove is recorded at paragraph 10(g) of my Additional Affidavit.

54. The history of Roxi's admission to the AIM is recorded in paragraphs 10(h) to 10(k) of my Additional Affidavit.

55. The evidence in relation to the Roxi Re-admission is recorded at paragraphs 10(r) to 10 (ss) of my Additional Affidavit.

56. The evidence supporting Mr Wilson's belief that the Mr Slater (and TIL) were involved in the establishment of the company Baverstock GmbH ("Baverstock") (the company which was previously the sole owner of Eragon Petroleum Plc and now owns 41% after Roxi bought 59% as part of its Re-admission - see paragraph 10(r) of my Additional Affidavit)) and Vetrom International NV ("Vetrom") both entities involved in the transactions of the Roxi Re-admission is recorded at paragraphs 10(r) and 10(s) of my Additional Affidavit.

57. The evidence supporting Mr Wilson's belief that Cody Star Investments Ltd of the BVI is a corporate vehicle for the defendants and Mr Emmott through which they received further undisclosed interests as a result of the Roxi Re-admission is recorded at paragraph 10(ii) of my Additional Affidavit.

58. Following the Court's Orders on 20 February 2008, the only documents the defendants have discovered in relation to Roxi are described as:

Confidential

(a) email correspondence between Rob " [email protected] ", Paul Puxon and others and Temujin in relation to engagement letters, "Zhalgiztobe" and North Karamandybas from 7/7/06 to 20/7/06

(b) engagement letter from TIL to Mr Rob Schoonbrood, Pinegrove Equities Inc dated 17 July 2006

(c) TIL invoices to

(i) Mr David R Barker, General Director, Roxi Petroleum Kazakhstan LLP dated 27 August 2007, 2 October 2007, 10 and 12 December 2007;

(ii) Mr David R Barker, Chairman of the Board of Directors, Ravinnoe Oil LLP dated 1 August 2007, 14 August 2007, 2 October 2007 and 10 December 2007; and

(iii) Mr David R Barter, Chairman of the Board of Directors, RS Munai LLP dated 1 August 2007.
Non-confidential

(d) draft Due Diligence Report - Project Mandy dated December 2005

(e) draft Option Agreement between Munaico Ltd and Uranium Mining Corporation P.L.C ("UMC") dated 29 November 2005.


59. I am informed by Mr Wilson and verily believe that the discovery provided by the defendants in relation to Roxi to date is not adequate and that MWP requires further discovery of documents which are relevant to its claims. In particular, I refer to paragraphs 10(j) of my Additional Affidavit which records specific examples of further information/documents which MWP requires from the defendants by way of discovery.

PJT and PJT International

60. I refer to paragraph 10(t) of my Additional Affidavit which records that I am informed by Mr Wilson and verily believe evidence from the Roxi Re-admission Document which seeks to demonstrate that as part of Roxi's re-admission (specifically the Eragon Acquisition process under the Eragon Facilitation and Project Management Agreement "Eragon Agreement") and the ADA Acquisition process under the Ada Facilitation and Project Management Agreement ("Ada Agreement")) PJT will receive a total aggregate fees of US$30 million for providing project management services.

61. I refer to the summary of the Roxi Re-admission Document at paragraph 10(u) of my Additional Affidavit which records that PJT has directed Roxi to make the payments which are due to PJT directly to Mr Slater personally.

62. At paragraphs 10(cc) to 10(ss) of my Additional Affidavit, I record evidence of Mr Wilson's belief that PJT is not an arms length client of TIL but instead is a company owned and/or controlled by the defendants, whether directly or indirectly, and deployed by them as a means to stream off the significant payments due in respect of the contribution made and the work performed by the defendants on the Roxi Re-admission. In particular, I record evidence of Mr Wilson's belief that:


(a) Pinegrove and its CEO Mr Schroonbrood had been working on the projects associated with the Roxi re-admission before PJT was formed and hence PJT could not have provided certain of the services for which it is paid fees under the Eragon Agreement and the Ada Agreement (see paragraphs 10(ff), 10(gg), 10(jj), 10(kk) and 10(pp) of my Additional Affidavit);

(b) Messrs Nicholls, Slater, Emmott and Shaikenov are designates to whom PJT can issue and allot shares by direction in writing and then be required to issue a Lock-in Agreement under the Eragon Agreement and the Ada Agreement (see paragraphs 10(ee) to 10(hh) of my Additional Affidavit);

(c) Mr Brian Weir, a director and secretary of PJT International, the company which owns PJT (see paragraph 10(kk) of my Additional Affidavit) assisted Mr Nicholls to put together a Trust Deed for the Temujin International Trading Trust, he is involved in the Walker Douglas Hotels Trust and the Long Yard Trust in which Mr Nicholls is an investor and unit holder whether directly or indirectly through Taronga Nominees/ the Taronga Trust 1 and 2 (see paragraphs 10(ll) and 10(mm)(i) and (ii) of my Additional Affidavit);

(d) Mr Richard Randolph Pearson, a director and secretary of PJT International (see paragraph 10(kk) of my Additional Affidavit) is a personal friend and/or relative (nephew) of Mr Nicholls and is involved in the Walker Douglas Hotels Trust (see paragraphs 10(ll) and 10(mm)(iii) of my Additional Affidavit);

(e) the current director and secretary of PJT, Ms Deborah Lighezzolo(see paragraph 10(nn) of my Additional Affidavit);


(i) is a former colleague of Mr Slater at Westpac Banking Corporation who exercised signatory rights over Mr Slater's bank account(which MWP alleges became TIL's bank account) who instructed Westpac to transfer the amount of US$35,975 from this bank account to the personal bank account of Mr Nicholls on 18 May 2006 (see paragraphs 10(nn) and 10(oo)(i) of my Additional Affidavit);

(ii) is now a full time employee of Commonwealth Bank (see paragraphs 10(nn) and 10(oo)(i) of my Additional Affidavit);

(iii) assisted Mr Slater whilst at MWP in soliciting and seeking to raise investment in the Chilisai Phosphor Project being developed by the MWP Client, Sokol (see paragraphs 10(nn) and 10(oo)(ii) of my Additional Affidavit); and

(iv) is currently a direct shareholder in Sunkar Resources Plc ( " Sunkar ") an English company formed by Sokol (see paragraphs 10(nn) and 10(oo)(ii) of my Additional Affidavit) whether as nominee for Messrs Slater, Nicholls and Emmott or their nominees, or in their own right, or that of PJT of which she is now the Sole Director; and
(f) TIL was working for and billing Pinegrove as to BNG Project X and generally (see paragraph 10(pp) of my Additional Affidavit).

63. As a result of the above paragraphs, MWP seeks the further discovery set out in Order 8 and 9 of the Motion.”

39 The evidence given by Mr Wang justifies the plaintiff being granted leave to pursue the pleading which I have described as ii. That entitlement arises by reference to the recency of the information acquired by the plaintiff. As previously observed, once the hearing date has been vacated it becomes very difficult to refuse leave to amend the pleading in circumstances where no particular prejudice can be pointed to by the defendants [save of course the undoubted prejudice in terms of the importance of the defendants having their day in court.]

The application for leave to rely on additional evidence in chief

40 On 17 April 2000 McDougall J, in noting that the final hearing listed to commence on 12 May was vacated, made a number of orders inter alia:

i. vacating earlier orders in relation to the filing of the plaintiff’s evidence in chief and vacating all previous orders made providing a timetable for the filing of the parties’ evidence;

ii. ordering that the plaintiff file and serve the balance of its evidence in chief on all issues including expert evidence on or before 2 May 2008;

iii. ordering that absent first obtaining the leave of judge of the court, the plaintiff be disentitled from relying upon any further evidence in chief of any witness after 2 May 2008.

Unopposed additional evidence

41 The position which presently obtains is that the plaintiff seeks such leave, it being very difficult for the Court to deny such leave in the absence of particular evidence of prejudice to the defendants.

42 The defendants did not oppose the leave being granted to the plaintiff to adduce evidence of two witnesses, Professor William Butler and Aliya Lawson (nee Abdi).

Opposed additional evidence

43 The defendants oppose the grant of leave permitting the plaintiff to rely on additional evidence: namely the evidence of Messrs La Hatte, Tudorovic, Kolleeny and Gibson and a further affidavit of Michael Wilson, all going to issues related to the relief to which the plaintiff claims to be entitled should it succeed on liability.

44 Mr Gleeson SC submitted that it was clear that a number of these witnesses had either not been briefed by the plaintiffs until the early months of 2008 or had not begun their relevant work until about that period. Whilst I accept that this may have been the case, the fact is that the event of the vacation of the hearing dates and the fact that no further hearing date has yet been fixed strongly suggests that the leave sought should be given, there being no particular form of prejudice to the defendants [otherwise than their need to have an early hearing date because of the gravity of the allegations made against them].

45 The parameter dealing with whether or not those tasks were, as the plaintiff contends, made the more difficult by the defendants’ failure, described in the affidavits, to provide proper and timely discovery, or whether, as the defendants contend, they were not responsible for any lag and timetable does not presently have to be adjudicated upon but may in due course sound in costs.

Decision

46 It is appropriate to grant leave to rely upon this category of further evidence:

i. there being evidence before the Court as to the reasons why this evidence was not filed and served on 2 May 2008 in accordance with the court’s direction of 17 April 2008.

ii. that evidence in effect explaining that the task of putting together the plaintiff’s claim for relief by 2 May 2008 was simply impossible given the tasks that needed and still need to be performed in doing so.

The event triggering the automatic revocation of the freezing orders

47 Having said that and conscious of the importance of once and for all time tying the plaintiff down to finality in terms of the further evidence it proposes to seek to adduce from the above 5 witnesses, I propose to make an order granting liberty to the plaintiff to file that further evidence on or before 30 June 2008, and to order that in the event that the plaintiff thereafter seeks any form of leave to file any further evidence in chief from a witness, all extant freezing orders be automatically revoked. However the order will not prevent the plaintiff from adducing documentary evidence pertinent to the further discovery by the defendants, to be ordered as per the reasons below. Nor will it prevent the plaintiff from adducing evidence strictly in reply to meet the defendants’ responsive evidence. Such a draconian order is certainly unusual but the number of occasions when the plaintiff has sought to change the goalposts in terms of the conduct of these proceedings permits such an order. Very importantly the plaintiff has obtained freezing orders in numerous countries against the various defendants and against a number of companies; the allegations made against the defendants are extraordinarily grave and the Court must on occasions such as this, be in a position to put its foot down – the position of both sides of the record requiring to be taken into account: cf Dennis v Australian Broadcasting Corporation (supra).

The confidentiality regime

The circumstances giving rise to the respective contentions

48 In what follows I adopt the plaintiffs recitation of the events which have given rise to the current issue concerning the confidentiality regime :

i. In September 2007 the parties agreed between themselves to a “confidentiality regime” whereby, among other things, discovered documents that were labelled “confidential” by the defendants could only be inspected by Mr Wilson on the condition that he took no notes or copies of the documents.

ii. It is nothing new that an initial inspection regime be confined to a "lawyers eyes only" review or that client representatives of a party may not initially take copies of material which may be highly confidential.

iii. However here it was after case preparation difficulties had been made known by Clayton Utz to Henry Davis York, that the defendants rejected out of hand the Clayton Utz amended inspection regime, necessitating the plaintiff's notice to withdraw from the current inspection regime which has not been ordered by the court.

iv. Confidentiality in these documents was asserted by the defendants on the ground that they contained information that was “commercially sensitive”.

v. The defendants agreed as at 1 May 2008 to allow copies of the TIL invoices to be provided to the plaintiff’s experts on their proffering an undertaking in suitable form to keep the documents and their contents confidential.

vi. Mr Wilson is permitted to inspect the documents but must take no notes or copies of them. This restriction is plainly unfair on the plaintiff and is currently hampering the plaintiff’s ability to provide instructions to its legal advisers in relation to its case.

vii. By reason of this restriction Clayton Utz was unable to provide Mr Wilson with a complete copy of its letter of 18 January 2008 particularising MWP’s damages and any affidavit sworn by Clayton Utz that speaks to the confidential documents must be sent to the plaintiff in redacted form. This is, I accept, an unsatisfactory state of affairs.

viii. By way of letter dated 12 February 2008, Clayton Utz subsequently proffered a revised inspection regime to the defendants. Henry Davis York advised, by letter dated 13 February 2008 to Clayton Utz, that their clients did not agree to the proposed changes to the regime.

ix. By letter dated 8 May 2008 Clayton Utz explained to Henry Davis York that it was never the concept of the confidentiality regime to prejudice the plaintiff from properly conducting its case. Accordingly, in order to determine which of the documents were truly confidential, a call was made upon the defendants to state the reasons why each of the documents (or classes of documents) which the defendants claim to be confidential and commercially sensitive, should be the subject of a confidentiality regime beyond the scope of the implied Harman undertaking.

x. By letter dated 9 May 2008, Clayton Utz on behalf of MWP gave notice to the defendants’ solicitors that MWP withdrew its consent to the “confidentiality regime”, giving notice that they would be providing copies of the so-called confidential documents to Mr Wilson at 5pm on Wednesday 14 May 2008 (thus allowing adequate time for the defendants to make application).

xi. In the event, by notice of motion dated 12 May 2008, the defendants have sought orders in relation to the confidentiality regime. That application is supported by an affidavit of Rodney Hawkins sworn 12 May 2008.

xii. Pursuant to an undertaking by counsel given to the Court on Tuesday 13 May 2008, Clayton Utz agreed to abide by the current confidentiality regime until the defendants’ application had been determined by the Court.

xiii. The defendants have indicated in their Outline of 8 May 2008 that they oppose any variation to the current confidentiality regime.

xiv. The plaintiff unless otherwise ordered intends to proceed in accordance with the Clayton Utz letter.

49 Whilst the parties have been at liberty to reach such arrangements as they may have in relation to a confidentiality regime, once the parties bring the dispute before the Court, plainly the Court has the power to regulate the regime in the proper administration of justice as between the parties in litigation.

50 There are obvious tensions as between the desire of particular parties to preserve confidentiality and the importance of all parties being given a proper opportunity to present their respective cases. The Court will endeavour to accommodate both sets of interests wherever possible and will do so to the extent practicable by laying down confidentiality regimes.

51 However a precondition for the making of orders in the form of confidentiality regimes involves the Court being satisfied of the claimed confidentiality.

52 Notwithstanding the fact that the defendants adduce precious little in terms of evidence that should the confidentiality regime be lifted, the plaintiff would gain access to commercially sensitive documents, it cannot be said that they have no material to support this proposition [cf affidavit of Mr Gorry 19 February 2008 paragraph 30 - Court Book tab 25]. The nature of the subject matter permits the court to infer that there is a confidentiality and considerable commercial sensitivity in terms of the documents passing between a firm of solicitors and its relevant clients, particularly where the plaintiff has a relevant competitive interest in the same discipline.

53 Subject to appropriate constraints being put into place I am satisfied that the current restrictions imposed by the current regime are severely hampering the plaintiff's ability to provide instructions to its legal advisers. So much is demonstrated by the affidavit of Mr Wang sworn on 22 April 2008 and his further affidavit of 19 May 2008. By way of example only, by reason of these restrictions, Clayton Utz was unable to provide Mr Wilson with a complete copy of its letter of 18 January 2008 particularising MWP’s damages.

54 The proposal put forward by the plaintiff solicitors in their letter of 12 February 2008 [annexed to the affidavit of Mr Wang of 19 May 2008 ] does take the matter somewhat further, but at the same time presents some problems. To my mind the regime which requires to be put into place in substitution for the current regime is as follows:

1 In respect of documents listed at part 1 (a) of the defendants amended list of documents [Commercially Confidential Documents] the following regime shall apply :


a. A nominated partner and solicitor from Clayton Utz [CU] shall be entitled to inspect and obtain one copy of the Commercially Confidential Documents;

b. CU (by an authorised partner) is to undertake to the Court that CU will not provide copies of any of the Commercially Confidential Documents to the plaintiff or to any other person save for:


i. any counsel retained or instructed on behalf of the plaintiff in the Proceedings;

ii. any partner, consultant to or employee of CU who provides or assists in providing legal services on behalf of the plaintiff in the Proceedings;

iii. Mr Michael E Wilson [upon his giving an appropriate undertaking to the Court of the type referred to below] for the purpose of instructing the plaintiff’s legal advisers in the Proceeding;

iv. Independent experts retained by MWP , for the purpose of providing advice and/or giving evidence in the proceedings,

c. At the conclusion of the proceedings, the copy of any document provided under section 1 (b) (iii) and (iv) is to be forwarded to CU, to be held in accordance with its archive proceedings and no further access is to be given to MWP or the experts without firstly providing HDY with five business days notice.

2. CU (by an authorised partner) undertakes to immediately inform the Court and Henry Davis York if it becomes aware of any breach of the undertaking referred to in paragraph 1 above.
3. The undertaking to be extracted from Mr Michael E Wilson prior to being permitted to inspect any of the Commercially Confidential Documents is a written undertaking to the Court that Mr Wilson will use nor provide copies of any of the Commercially Confidential Documents to the plaintiff or to any other person save for:


i. any counsel retained or instructed on behalf of the plaintiff in the Proceedings;

ii. any partner, consultant to or employee of CU who provides or assists in providing legal services on behalf of the plaintiff in the Proceedings.

55 There is no substance in the defendant's allegations that Mr Wilson is plainly proven to be of no credit, to lack objectivity or to be pursuing the proceedings for an unidentified and unproven collateral motive. Clearly questions of credit may arise during the final proceedings and if raised in relation to Mr Wilson those matters will be dealt with by the trial judge.

56 I see no reason why, as the principal of the plaintiff, Mr Wilson should not be allowed to take notes or copies of documents he has already seen.

Conclusion

57 I accept that the plaintiff has demonstrated that the current "regime" is unworkable and manifestly prejudices the plaintiff in the prosecution of these proceedings.

58 The above described confidentiality regime is to be put into place immediately.

Clayton Utz’s letter of 26 March 2007, category 13

59 The letter itself is found in the affidavit of Katherine Jane Dixon of 13 February 2008, at page 54 of the exhibit to that affidavit. Category 13 is set out commencing at page 56 of the exhibit.

a) the alleged conduct constituting the alleged breach of contract, fiduciary duty and fraud varies as regards each of Nicholls and Slater, and their defences are distinct;

b) Slater’s defence to the negligence claim is a separate and distinct defence as no such claim is made against Nicholls;

c) the defences of Nicholls and Slater of no intention to injure MWP in respect of the common conspiracy claims in paras 72, 74 and 75 SFACL are distinct and dependant upon the state of mind of each of Nicholls and Slater: paras 72(c) and 75(c) (pages 25-26) Commercial List Response (CL Response);

d) the defence of Nicholls to the conspiracy claim pleaded in the alternative in para 73 SFACL, is a separate and distinct defence as Slater is not alleged to be a party to that conspiracy: para 73(c) (page 25) CL Response;

e) the defence of each of TIL, TSL and TFZE of no intention to injure MWP is a separate and distinct defence and dependant upon the state of mind of each of those corporate entities: para 76(b) (page 26) CL Response;

f) the defence of Slater to the allegation that he joined an existing conspiracy involving Emmott and Nicholls in about September 2005, is a separate and distinct defence;

g) the defences of Nicholls and Slater to the alleged Barnes v Addy knowing assistance claims in respect of alleged breaches of Emmott and of each other: para 68 SFACL, are distinct and dependent upon the conduct and state of knowledge of each of them.

vii. The capacity for the First to Fifth Defendants’ common firm of solicitors to execute their duties to their respective clients does not undermine the entitlement of the First and the Second to Fifth Defendants to each seek security for the costs in respect of representation by separate counsel.
viii. The solicitors have duties to the Court and their respective clients which can be, and are being, discharged sufficiently in the present case in a manner consistent with the efficient and orderly conduct of large scale litigation.

112 To my mind there is substance in these submissions. The real question involves what additional amount provided by way of security cover the so-called additional team situation. I bear in mind Mr Wang’s evidence that where there is an expanded team of lawyers working on the matter, the recoverable party/party assessment falls as an overall percentage.

113 There will clearly be considerable overlap in relation to the two teams. The principled approach is to order payment of additional security for costs:

i. apropos the cost of the first defendant, of $200,000;

ii. apropos the costs of the second-fifth defendants, of $100,000.

114 It is never easy to define the amounts to be paid by way of security for costs and it is necessary for the Court to always factor in a real reduction for exigencies.

115 It is also always to be recalled that the Court may further adjust orders for security depending upon special circumstances being shown to justify a movement away the anterior previous regime.

The issue concerning whether or not the plaintiff’s claim to the further freezing orders should be conditioned upon the requirement to furnish security to underpin the usual undertaking as to damages

116 The defendants have contended that in the circumstance where the plaintiff has no assets in Australia it is appropriate to require the furnishing of security to underpin the usual undertaking is to damages: the amount sought being $30,000,000. Apparently it is suggested that this very large sum is appropriate by reference to the value of the further assets sought to be frozen by the additional freezing orders. Notably the defendants have never before sought an order underpinning the usual undertaking as to damages.

117 There is substance in the defendant's contention that, even at this very advanced stage of this litigation, an amount of security to underpin the usual undertaking as to damages should be paid into court. Whilst it is extraordinarily difficult to fix the lump sum which may be appropriate, the defendants’ contention as to the amount is, in the circumstances of the litigation, quite ridiculous.

118 In my view the appropriate sum to be so fixed is $50,000 which is to embrace that form of security apropos all defendants. Had the issue been raised much earlier in the litigation and been litigated on the evidence, the award of this form of security may have been considerably more.

Case management application

119 Mr Lindsay QC applied for the Court to consider as a matter of case management the making of an order that there should not be any further notices of motion filed by the plaintiff without the prior leave of the court. There is no basis for any such order to be made by the Court and the application is rejected.

Short minutes of order

120 Parties are to bring in short minutes of order. Costs of the motions will be reserved to be treated with following the final hearing.

Note: When this judgment was first published a confidentiality regime was put into place limiting access in the first instance to the parties and to their legal advisors. That order was revoked on 28 May 2008.

In many ways the transformation of the anterior overriding purpose rules of the Court into statutory form has given a new lease of life to the Court’s discretionary case management powers, where, over past decades, case management procedures were alternately hailed or derided.

Further issue reserved for decision

1. The defendants’ motion seeking an order that the plaintiff advise the defendants of the names and addresses of its past and current shareholders was not dealt with in the judgment.

2. There is no substance to that application in the circumstances where relevant further security for costs order have been made and where orders have been made for the plaintiff to furnish security to underpin the usual undertaking as to damages.

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