Michael Wilson & Partners Ltd v Nicholls (No 12)

[2024] ACTCA 1

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

COURT OF APPEAL

Case Title: 

Michael Wilson & Partners Ltd v Nicholls (No 12)

Citation: 

[2024] ACTCA 1

Hearing Date: 

21 June 2023

Decision Date: 

2 February 2024

Before: 

Curtin AJ

Decision: 

(1)	The application for leave to appeal is dismissed.
(2)	If any party seeks an order for costs, he or it should

forthwith notify the responding party or parties to that

effect, and file and serve submissions of no more than five

pages and any evidence in support of that application

within 14 days of the date of this judgment.

(3)	Any responding party shall file and serve submissions of
no more than five pages and any evidence in support
within 28 days of the date of this judgment.
(4)	Any submissions (of no more than three pages) and
evidence in reply are to be filed and served within 35 days
of the date of this judgment.
(5)	Any documents filed and served in accordance with the
above orders are also to be emailed in machine-readable
PDF form to my Associate in addition to being filed in the
usual way with the Registry.
(6)	If no application for costs is made, the default order is that
each party is to pay its and his own costs of the
application.

Catchwords: 

APPEAL – APPLICATION FOR LEAVE TO APPEAL –
Application for leave to appeal interlocutory decision – where
primary judge found proceedings taken to be dismissed –
whether primary judge applied an incorrect legal test – where
primary judge refused to reinstate dismissed proceeding –
whether justiciable issue left to decide – whether sufficient doubt
about the primary judge’s decision – application dismissed

Legislation Cited: 

Bankruptcy Act 1966 (Cth)

Civil Procedure Act 2005 (NSW) s 100

Court Procedure Rules 2006 (ACT) rr 75, 76, 2010A, 2201
Service and Execution of Process Act 1992 (Cth) s 105
Supreme Court Act 1933 (ACT) ss 37E, 37J

Cases Cited: 

Donohue v Volanne Pty Ltd (No 2) [2021] ACTCA 11

Ezekiel-Hart v The Council of the Law Society of the ACT (No 5)

[2023] ACTSC 218
Michael Wilson & Partners v Nicholls [2011] HCA 48; 244 CLR
427
Michael Wilson & Partners Ltd v Nicholls & Ors [2021] ACTSC
128
Nicholls & Ors v Michael Wilson & Partners Ltd [2012] NSWCA
383

Palmer v Registrar-General of Land Titles of the Australian

Capital Territory [2017] ACTSC 407

Re Minister for Immigration & Ethnic Affairs (Cth); Ex Parte Lai

Qin (1997) 186 CLR 622

Texts Cited: 

Supreme Court of the Australian Capital Territory, Practice

Direction No 1 of 2016: Applications and Appeals to the Court of

Appeal Filing of Documents and Appeal Papers, 18 September
2019

Michael McHugh, ‘Preparing and arguing an appeal’ (2010)

(Winter) Bar News: Journal of the NSW Bar Association 85

Parties: 

Michael Wilson & Partners (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)
B Glare (Seventh Respondent)

Solicitors

Michael Wilson & Partners (Applicant)
Duggan Legal (Sixth Respondent)

Rothwell Lawyers Pty Ltd (Seventh Respondent)

File Number: 

SCA 36 of 2021

Decision Under Appeal: 

Court/Tribunal:	Supreme Court of the ACT
Before:	McWilliam AsJ
Date of Decision:	30 June 2021
Case Title:	Michael Wilson & Partners Ltd v Nicholls & Ors
Citation:	[2021] ACTSC 128

CURTIN AJ: 

Introduction 

1․ 

On 30 June 2021, McWilliam AsJ (as her Honour then was) delivered her reasons in

Michael Wilson & Partners Ltd v Nicholls & Ors [2021] ACTSC 128 (MWP (ACT)). Her

Honour found that the proceedings were taken to be dismissed by operation of r 75 of

the Court Procedure Rules 2006 (ACT) (the Rules). Her Honour refused to reinstate the

dismissed proceedings pursuant to r 76 of the Rules, having been satisfied it was not in

the interests of justice to do so.

2․ 

The applicant, Michael Wilson & Partners (MWP), seeks leave to appeal from her

Honour’s orders. The applicant requires leave as her Honour’s judgment was

interlocutory: see s 37E(4) of the Supreme Court Act 1933 (ACT) (the SCA).

3․ 

The central issue is what issues were before and were to be determined by Mossop AsJ

(as his Honour then was) in a hearing before his Honour held on 16 December 2015 and

upon which his Honour reserved judgment. McWilliam AsJ essentially held that all of

those issues had been rendered otiose by subsequent external events (as explained

further below) and no further step had been taken by MWP in the proceedings in the

succeeding 12 months resulting in the application of r 75 of the Rules and the automatic

dismissal of the proceedings. MWP contended that there remained “live” issues from the

hearing before Mossop AsJ and upon which his Honour was still reserved. MWP

contended, in effect, that time under r 75 of the Rules did not run whilst a judgment was

reserved.

4․ 

The application for leave to appeal came before me sitting as the Court of Appeal

constituted by a single judge pursuant to s 37J of the SCA.

5․ 

For the reasons which follow, leave to appeal should be refused.

Background

6․	The background to the proceedings is complex, but the background relevant to this
application rather simpler. To explain the simple however, I must first explain the
complex.
7․	Doing so will isolate what was and what was not in issue in the earlier hearing before
Mossop AsJ, which contains the foundational factual basis for the issues determined by
McWilliam AsJ.
8․	Litigation has ensued between the parties to these proceedings in the United States, the
United Kingdom, the British Virgin Islands, the Bahamas, Switzerland, New Zealand and
Australia, amongst other places. There have been arbitrations, hearings, appeals (to the NSW Court of Appeal and the High Court of Australia as well as appeals in England),
and remittals.
9․	In Michael Wilson & Partners v Nicholls [2011] HCA 48; 244 CLR 427 at 433-434 [6]-[11]
(MWP (HCA)), the plurality explained the persons and entities involved, and the basal
circumstances giving rise to this litigation:

…Michael Wilson & Partners Ltd (MWP), was incorporated in the British Virgin Islands. MWP

was controlled by Michael Earl Wilson, who described himself as a “corporate transaction lawyer”. At the times relevant to this matter, MWP practised as a law firm and a business

consultancy in the Commonwealth of Independent States from offices in Kazakhstan.

In December 2001, MWP made an agreement with John Forster Emmott, an English and Australian solicitor, that Mr Emmott would join MWP as a director and shareholder with effect

from January 2002. They agreed that “in effect” MWP would “operate as a quasi-[p]artnership between them”. The agreement provided that each party should have and would observe “the usual partnership obligations and duties to each other”.

From 24 April 2004 until 1 March 2006, the first respondent (Mr Nicholls, an Australian

barrister) was employed by MWP as a senior associate or, as he described himself, a “senior

expatriate lawyer”. From 1 September 2005 to 9 January 2006, the second respondent (Mr

Slater, an Australian solicitor) was employed by MWP as an associate.

By the end of June 2006, Messrs Nicholls, Slater and Emmott had all left MWP. Mr Slater did not return to work from annual leave he took from 21 December 2005; Mr Nicholls left employment on 1 March 2006; by letter dated 30 June 2006, Mr Emmott gave notice terminating his agreement with MWP with immediate effect.

… (the Temujin companies) are companies that, at the relevant times, were associated

directly or indirectly with some or all of Messrs Nicholls, Slater and Emmott … (Temujin International Ltd – TIL) operated as a business adviser, agent and arranger, and provided legal services. Two of the Temujin companies (TIL and…Temujin Services Ltd) were incorporated in the British Virgin Islands; … (Temujin International FZE…) was incorporated in a Free Trade Zone in the United Arab Emirates. …

MWP alleged that each of Messrs Nicholls, Slater and Emmott, separately and together, furthered his or their own interests at the expense of MWP. A central allegation was that Messrs Nicholls, Slater and Emmott had conspired together to divert, and had in fact diverted, clients and business opportunities away from MWP to their own benefit by having one or more of the Temujin companies act for the clients in question or by taking advantage of business opportunities that would otherwise have gone to MWP.

10․	At the risk of oversimplification, MWP essentially alleged that Messrs Nicholls, Slater,
and Emmott had improperly taken clients (and associated business opportunities) of
MWP for their own, subsequent ventures.
11․	MWP sought relief in several different jurisdictions, but principally in an arbitration in
London in the United Kingdom against Mr Emmott (the London arbitration), and in
proceedings in the Supreme Court of New South Wales against Messrs Nicholls and Slater and the Temujin companies (together with some other defendants which need not
be mentioned) (the NSW proceedings).
12․	As the High Court explained in MWP (HCA) at 435 [16]:

Because MWP had made the agreement it had with Mr Emmott, the controversy between MWP and those who it alleged had acted together to harm MWP was to be resolved as to part in one venue (the London arbitration) and as to part in another (the Supreme Court of New South Wales). Although MWP alleged that Mr Emmott had breached fiduciary duties he had owed it, and that Messrs Nicholls and Slater and the corporate defendants in the New South Wales proceedings were liable to MWP because, among other things, they had knowingly assisted Mr Emmott in those breaches, MWP could not have those complaints heard and determined by the one process, whether arbitral or curial.

13․	The London arbitration and the NSW proceedings were both commenced in 2006.
Hearing of the London arbitration (on issues of liability only) commenced on 10
November 2008 and concluded on 24 February 2009. The hearing of the NSW
proceedings on all issues began on 15 June 2009 and concluded on 10 September 2009.
Thereafter, there were appeals and satellite litigation between the parties in both
jurisdictions.
14․	After MWP had commenced the NSW proceedings against Messrs Nicholls, Slater and
others, it invited Mr Emmott to consent to being joined as a party to the NSW
proceedings. Mr Emmott declined that invitation. Thereafter, the London arbitration and
the NSW proceedings took their separate courses.
15․	The London arbitration between MWP and Mr Emmott was instituted in accordance with
an arbitration clause contained in an agreement between those parties. Because Messrs
Nicholls and Slater were not parties to that (or any other) arbitration agreement with
MWP, they could not be added as parties to the arbitration.

16․ In the London arbitration, MWP alleged that Mr Emmott had acted in breach of

contractual and fiduciary obligations he owed to MWP. MWP claimed from Mr Emmott

an account of profits, damages for breach of contract, and compensation for the loss

occasioned to it by Mr Emmott’s breach of fiduciary duties. Mr Emmott cross-claimed

against MWP in the London arbitration, claiming a one-third interest in MWP.

17․	In the subsequent ACT litigation described further below, Mossop AsJ was told that Mr
Emmott had been successful on his cross-claim in the London arbitration, with the result
being that there was a judgment debt entered in favour of Mr Emmott against MWP to
the tune of about AUD15 million. MWP’s claim against Mr Emmott also succeeded. More
will be said about that later below.
18․	In the NSW proceedings, MWP alleged that Messrs Nicholls and Slater had acted in
breach of their contractual and fiduciary obligations and had knowingly assisted Mr
Emmott in his breaches of his fiduciary obligations. MWP claimed (among other relief)
damages, compensation, and an account of profits.
19․	Ultimately, in the NSW proceedings, MWP obtained judgment against five parties (the
NSW judgment) after remittal from the High Court pursuant to orders made in MWP
(HCA)): see Nicholls & Ors v Michael Wilson & Partners Ltd [2012] NSWCA 383 (MWP
(NSWCA)).
20․	Those five parties were identified and described by McWilliam AsJ in MWP (ACT) as
follows:

(a) Mr Robert Nicholls (First Judgment Debtor),

(b) Mr David Slater (Second Judgment Debtor),

(c) Temujin Service Limited (Third Judgment Debtor),

(d) Temujin International Limited (Fourth Judgment Debtor), and

(e) Temujin International FZE (Fifth Judgment Debtor).

21․ In MWP (NSWCA), the above parties were the appellants, and MWP was the

respondent. The more detailed background to the issues with which that judgment was

concerned was summarised by Sackville AJA as follows:

[5] MWP instituted the proceedings in the Supreme Court. The defendants (appellants in this court) were Mr Nicholls, Mr Slater and several corporations associated with them. The

corporations included Temujin International Ltd (“TIL”), Temujin Services Ltd (“TSL”) and Temujin International FZE (“TFZE”). At the time the proceedings were commenced, Mr

Nicholls and Mr Slater were Australian citizens and residents.

[6] Mr Nicholls and Mr Slater were employed by MWP until early 2006. MWP alleged, among other things, that Mr Nicholls and Mr Slater breached their contractual and equitable duties to MWP; conspired with a member of the firm, Mr Emmott, to divert clients and business opportunities from MWP to their own companies, particularly TIL; induced Mr Emmott to breach his own contractual obligations to MWP; and knowingly assisted Mr Emmott to breach his fiduciary duties to MWP. Mr Emmott, who left MWP in mid-2006, was not a party to the Supreme Court proceedings, but was a party to an arbitration in London in which MWP sought relief against him.

[7] The trial of MWP’s claims in the Supreme Court took place over 32 hearing days between

12 June 2009 and 10 September 2009. The primary Judge delivered two judgments. The

first, handed down on 6 October 2009, recorded his Honour’s findings and concluded that

MWP was entitled to elect “as between ultimate forms of relief on the sundry causes of action

upheld in the reasons”: Michael Wilson and Partners Ltd v Nicholls [2009] NSWSC 1033.

The second judgment, handed down on 11 December 2009 dealt with the remedies to which MWP was entitled: Michael Wilson and Partners Ltd v Nicholls [2009] NSWSC 1377. I shall

refer to the first judgment as the “Liability Judgment” and the second as the “Remedies

Judgment”.

[8] In the result, Einstein J dismissed the proceedings against one of the defendants

(Temujin Holdings Ltd (“THL”)), but upheld MWP’s claims against Messrs Nicholls and Slater

and TIL, TSL and TFZE. His Honour granted declaratory relief and made orders that all five defendants pay compensation or damages to MWP. The compensation and damages primarily related to work done by TIL for and benefits obtained by TIL from entities associated with Mr Schoonbrood and Mr Sinclair, both of whom had instructed MWP.

22․ The orders made by the NSW Court of Appeal in MWP (NSWCA) were as follows:

(1)	Appeal allowed in part, setting aside the sums specified in paragraphs 8(iii),
16(iii), 20, 24 and 28 of the Orders made by the Court on 11 December 2009.
(2)	Cross appeal allowed in part.
(3)	Appellants to pay the Respondent the following amounts:

(a) USD676,335.00; and

(b) €378,160.00.

(4)	The Appellants to pay the Respondent interest up to judgment, pursuant to s
100 of the Civil Procedure Act 2005 (NSW) as follows:

(a) in relation to the amount specified at Order 3(a) above,

USD382,294,89; and

(b) in relation to the amount specified at Order 3(b) above, €209,444.38.

23․	The result was that the five judgment debtors referred to by McWilliam AsJ were ordered
to pay MWP approximately AUD1.3 million together with AUD700,000 in interest.
24․	MWP desired to register the NSW judgment as a judgment of the ACT Supreme Court
because, at that time, Mr Slater owned a house in Ainslie in the Australian Capital
Territory (the Ainslie property). MWP desired to seek recovery of its judgment debt, at
least in part, from first taking possession of and then selling the Ainslie property.
25․	MWP applied to register the NSW judgment in the ACT pursuant to r 2010A of the Rules.
Rule 2010A(1) of the Rules says:

(1)	This rule applies in relation to an application for the registration in a court of an enforceable order of another court or tribunal under the Service and Execution of Process Act 1992 (Cwlth), section 105.
…

26․	Section 105 of the Service and Execution of Process Act 1992 (Cth) provides that upon
lodgement of a sealed copy of a judgment, the registrar or other proper officer of the appropriate court in a State other than the place of rendition must register the judgment
in the court, and, that once registered, a registered judgment has the same force and
effect as if the judgment had been given, entered or made by the court in which it is
registered.
27․	In other words, upon registration in the ACT Supreme Court, the NSW judgment had the
same force and effect as if the NSW judgment had been given in the ACT Supreme
Court.
28․	The NSW judgment was registered in the ACT Supreme Court on 22 May 2015 (the ACT
judgment).
29․	On 29 May 2015, the total judgment debt was calculated to be AUD2,161,512.26.
30․	On 13 August 2015, MWP filed an application in proceeding in the ACT (the August
2015 Application), which sought a variety of orders including an order pursuant to
r 2201 of the Rules for possession of the Ainslie property.
31․	Subsequently, Mr Nicholls was declared bankrupt, and Temujin Service Limited, Temujin
International Limited, and Temujin International FZE (the Temujin entities) went into
liquidation. Thus, Mr Slater was the remaining active defendant.
32․	The August 2015 Application was opposed by Mr Slater on the basis of his contention
that the (now) ACT judgment debt had been satisfied by a joint and several tortfeasor,
namely Mr Emmott, through the London arbitration. Mr Slater contended, in substance,
that the ACT judgment debt should be prevented from being enforced against the Ainslie
property because of the application of equitable principles related to satisfaction and
double recovery.
33․	The August 2015 Application came before Mossop AsJ.
34․	The issues in the London arbitration were described by senior counsel appearing for Mr
Slater before Mossop AsJ as essentially being that Mr Emmott had succeeded in the
London arbitration and that, in a way that is not clear from the limited materials given to
me, the quantum of Mr Emmott’s claim was “reduced” to take account of MWP’s
successful claim against Mr Emmott in that arbitration.
35․	Mr Emmott had sought to intervene in the August 2015 Application, arguing that MWP
was the subject of an AUD15 million judgment debt in his favour arising from the London
arbitration. Mr Emmott contended that he was seeking to register the judgment from the
London arbitration in the ACT (which he sought to do in October 2015). Mr Emmott
asserted that any monies obtained pursuant to the enforcement of the ACT judgment debt by MWP against Mr Slater should in fact be paid to him because of the London
arbitration debt.
36․	At the time the August 2015 Application was filed, there was a registered mortgage on
the Ainslie property held by Westpac Banking Corporation (Westpac) and a caveat was
also registered. The caveator was Effective Funds Management Pty Ltd (EFM) and the
caveatable interest was said to be “an Equitable Estate in Fee Simple arising out of a
Loan Agreement creating a chargeable interest”. It was alleged that EFM was a funder
of Mr Slater and some of the Temujin entities.
37․	Accordingly, on 21 August 2015, Mr Emmott, EFM and Westpac were joined to the
August 2015 Application by Mossop AsJ.
38․	On 16 December 2015, the August 2015 Application was heard by Mossop AsJ. As
described by MWP in its chronology provided to me on this leave application, the
substance of that hearing was described as follows:

All day Hearing before Mossop P in the ACT SC who reserves judgment as to the arguments

by Slater and Emmott that the SIA in the arbitration had somehow satisfied MWP’s US$14m

Australian judgment debts and that Slater’s ACT House should not be seized and sold until

he had exhausted his rights in joint and several liability and in contribution as against Emmott,

as his Temujin Partner, alongside Nicholls …

39․	That summary is not accurate. As the transcript demonstrates, the only parties who
appeared and involved themselves in the hearing before Mossop AsJ were MWP and
Mr Slater. Westpac, EFM and Mr Emmott did not appear before his Honour that day. The
hearing on that occasion was confined to determining whether, at least prima facie, MWP
was entitled to possession of the Ainslie property, or whether Mr Slater’s contention that
the debt underlying MWP’s claim to the property had been satisfied by the outcome of
the London arbitration. Mr Emmott did not appear before Mossop AsJ, and his claim to
be entitled to any monies recovered by MWP against the Ainslie property was not one of
the issues before and to be determined by Mossop AsJ.
40․	At that hearing, Mr Slater’s senior counsel described the central issue to be determined
to Mossop AsJ at T9.9 as follows:

So there was a judgment against Mr Nicholls and Mr Slater for the loss of essentially Mr Schoonbrood, Mr Sinclair and their associated entities by Michael Wilson and Partners. The contention is that the cross-claim having been reduced in the arbitral proceedings satisfies that claim. It's just unfortunate in the timing. But if you sue for a particular loss, you get an award for that loss, you cannot then, in a nutshell, sue elsewhere for the same loss and get a different sum. But that's the conundrum that your Honour will have to determine.

41․	His Honour reserved his decision.
42․	About a week after that hearing, on 23 December 2015, Mr Slater was made bankrupt
in the United Kingdom at the instigation of MWP.
43․	On 9 February 2016, Ms J. A. Palmer was appointed in the United Kingdom as the trustee
in bankruptcy of Mr Slater.
44․	On 7 June 2016, the matter came before Mossop AsJ for directions. There were
appearances on behalf of MWP, EFM and Westpac. There was no appearance by Mr
Emmott.
45․	His Honour was made aware of the appointment of Ms Palmer as Mr Slater’s trustee in
bankruptcy, and of her pending application in the Federal Court of Australia to be
recognised as the trustee in bankruptcy in Australia.

46․ Counsel for MWP essentially told Mossop AsJ that, upon Ms Palmer’s expected

recognition as Mr Slater’s trustee in bankruptcy in Australia, MWP’s action against the

Ainslie property would therefore come to an end (because the Ainslie property would

vest in the trustee), with only costs of the August 2015 Application to be decided.

Therefore, he submitted, there should be a lengthy adjournment so that those events

could play out.

47․	There was discussion about EFM’s caveat by EFM’s legal representative, but it was
acknowledged that any issues arising out of that caveat would need to be dealt with in
separate proceedings between EFM and the trustee.
48․	There was discussion about Mr Emmott’s position, and the following exchange occurred
between Mossop AsJ and Mr Vivekanada, MWP’s counsel, at T4.14:

MR VIVIKENADA: And at that point in time of course then we have to turn to Mr Emmott

as well because you’ll recall that he intervened initially and was joined and now he wants to,

I suppose, swallow - once the money has got into MWP's hands, he wants to swallow the money from MWP. But of course that's now gone. That opportunity - --

HIS HONOUR:  Sure.

MR VIVEKANADA: -- has disappeared. So there's some costs there again. In fact what Mr Emmott has done is, we suggest, premature because until the money was destined to go into MWP's hand, it was premature to bring that application. He didn't seek a freezing order or anything of that nature.

HIS HONOUR: Sure.

MR VIVEKANADA:  So there will be some costs again thrown away there.

HIS HONOUR: Anyway, is the position that we just have to wait and see what happens with the trustee, then the majority of this case will go away, leaving possibly some skirmishes in relation to costs?

MR VIVEKANADA: Yes. …

(Emphasis added.)

49․	In that exchange, MWP was acknowledging that Mr Emmott’s claim to any monies
obtained by MWP from the Ainslie property had effectively disappeared because there
was now no Ainslie property that could be seized by MWP as a result of Mr Slater’s
bankruptcy, and the Ainslie property thereby vesting in Mr Slater’s trustee.
50․	A search of the Court file in those proceedings before Mossop AsJ reveals that Mr
Emmott did not file any application, presumably because a preliminary issue was
whether MWP was entitled to possession of the Ainslie property at all, or because of the
impending bankruptcy of Mr Slater. Whatever the reason, the fact is that Mr Emmott had
not filed any application (although he may have outlined his position to the Court at some
point) and therefore no issue involving Mr Emmott was before Mossop AsJ.
51․	The transcript confirms that what was heard by Mossop AsJ was limited to the issues
between MWP and Mr Slater, and the other potential issues raised by the other parties
would be dealt with later if needed.
52․	Thus, at the 7 June 2016 mention, EFM’s representative, Ms Mense, asked Mossop AsJ
to continue the “hearing”. At T7.13, the following exchange took place:

MS MENSE: Thank you, your Honour. My client will be seeking a hearing date and that the matter be brought on for hearing and that we'll be seeking an indemnity costs order against the plaintiff personally.

HIS HONOUR: I don't understand that. A hearing of what?

MS MENSE: The substantive hearing.

HIS HONOUR: I think we've had the substantive hearing in this matter, not the hearing

that involved your client, unless I misunderstood something. The hearing involving your client was deferred until after I have made a ruling on the issue which I am now

not required to as a result of the appointment of the trustee in bankruptcy in the UK.
So when you say you want a hearing, I don't understand what you're saying.

MS MENSE: To my understanding, if the hearing is being postponed until the appointment of the trustee then wouldn't it now be the right time to commence the hearing then?

HIS HONOUR: Your client's interest in the present case depends upon Mr

Vivekananda's client getting hold of the proceeds of the sale of the house.

MS MENSE: Yes.

HIS HONOUR: The house is now vested in the trustee in bankruptcy. Mr Vivekananda's

application has effectively been overtaken by events, namely his client's successful appointment of a trustee in bankruptcy in the UK. So that will mean that your client's interest in intercepting the funds that would be held by Mr Vivekananda's client has

disappeared. I may have misunderstood what’s gone on or more likely forgotten [what’s] gone on but that’s my understanding of the situation. So it doesn’t seem to me that there’s

any need at this stage for a hearing because Mr Vivekananda's client is not going to get the

proceeds of the sale of the house.

(Emphasis added.)

53․	That MWP’s claim against the Ainslie property had come to an end as a result of Mr
Slater’s bankruptcy was confirmed by MWP’s counsel at T8.39:

MR VIVEKANADA: Our right has gone as it is now committed to the Bankruptcy Act, section 59, as vested in the property. Once the trustee gets appointed here, the effect of the cross-border insolvency provisions is that the trustee is recognised as if she was the trustee appointed by the Federal Court of Australia under the Bankruptcy Act 1966 (indistinct) gone. That's our situation as set out in the letter and I'd just ask my friend to read that.

(Emphasis added.)

54․	Mossop AsJ then made clear that his Honour did not propose to give judgment on the
limited issue argued before his Honour on 16 December 2015. Mossop AsJ said at T9.6:

[B]ut I’m acting on the basis of my understanding at the moment which is to the effect that

any further progress on these proceedings would be or be likely to be futile in the light

of the pending likely appointment of the UK trustee – or recognition of the UK insolvency

by the Federal Court in June.

(Emphasis added.)

55․	Nothing was said on that day about Mr Emmott’s application, nor had Mr Emmott
appeared.
56․	The matter was then adjourned to 7 October 2016.
57․	On 7 October 2016, MWP, EFM and Westpac appeared before Mossop AsJ, but there
was no appearance by Mr Emmott.
58․	The Bench Sheet and transcript reveals that Mossop AsJ was told that Ms Palmer had
been recognised as trustee of Mr Slater’s estate in Australia, and the Ainslie property
had now vested in her pursuant to the provisions of the Bankruptcy Act 1966 (Cth). His
Honour was told that there were some issues concerning the trustee and some freezing
orders applying to the Ainslie property, but once those issue were resolved the trustee
would make an application to lapse EFM’s caveat, and thus there might be further issues
to be determined in relation to that issue in the future.
59․	Nothing was said on that occasion about Mr Emmott’s application.
60․	The matter was adjourned until 10 February 2017.
61․	For unknown reasons, the matter returned before Mossop AsJ on 15 May 2017 (and not
10 February).
62․	On that day, MWP appeared, and its counsel mentioned the appearance of Mr Emmott
and EFM. Westpac also appeared.
63․	MWP sought a further adjournment because something had gone wrong with the transfer
of the title in the Ainslie property to Ms Palmer and time was needed to sort that issue
out.
64․	There was discussion about the need for the trustee to be registered on the title of the
Ainslie property and to deal with EFM’s caveat issue before the costs of the proceedings
before Mossop AsJ could be finally resolved. There was a brief mention of Mr Emmott.
The discussion involving Mr Emmott was as follows at T9.1 (Mr Coyle being Westpac’s
legal representative):

MR COYLE: I don't think so, your Honour. Perhaps just to clarify for my benefit and for everyone's benefit and understanding that in relation to these proceedings the position is until the second, the caveat issue is resolved. I'm sorry, the resolution of the caveat issue will have direct impact on the costs argument in this matter. That is what is being said. So if that caveat succeeds and the mortgage is registered there will be adverse impact for Wilson, and if it were the other way around, in theory, it would be adverse to EFM. That's the reason we keep this proceeding alive.

MR VIVEKANADA: Yes, EFM and Emmott and this agreement.

HIS HONOUR: EFM and Emmott played a very limited part, didn't they, in these proceedings? There were some occasions on which they were required to attend ---

MR VIVEKANADA: Yes.

HIS HONOUR: - - - but I don't think they were here for the main - --

MR VIVEKANADA: They weren't here and they sought to be expressly resolved. There

won't be much costs from Mr Emmott. We say that Mr Emmott doesn't have an interest

-

HIS HONOUR: Sure.

MR VIVEKANADA: - - - because what Mr Emmott was trying to do was - we were trying to

force the sale of Mr Slater's property and what Mr Emmott was trying to do was to then

- --

HIS HONOUR: Intercept the proceeds?

MR VIVEKANADA:  --- intercept the proceeds as they fell into Michael Wilson’s hands

but the bankruptcy has intervened.

HIS HONOUR: So is that the only cost issue as between ---

MR VIVEKANADA: Yes, for Mr Emmott, but ---
HIS HONOUR: In that any issue as between you and Mr Slater, what happens to that?

MR VIVEKANADA: That is a matter for the trustee.

(Emphasis added.)

65․ Mossop AsJ then said at T10.24:

HIS HONOUR: Okay. So what I will do is I will just find a date. I will list it for mention at 9.30

am on 15 September 2017 and I will note — and you can tell me if this is inaccurate - that

the only outstanding issue is costs as between Michael Wilson & Partners and the

first, second and third joined parties. Is that right?

MR VIVEKANADA: Yes.

(Emphasis added.)

66․	That exchange confirms that MWP agreed with his Honour, contrary to the submission it
put to me on this application for leave to appeal, that the only outstanding issue at that
time in the proceedings as then formulated was costs.
67․	The matter was adjourned until 15 September 2017.
68․	On that day, MWP and Westpac appeared. There was no appearance by Mr Emmott or
EFM. Various issues were raised concerning the transfer of the title of the Ainslie
property to the trustee and a further adjournment was sought. The issue of costs was
raised. His Honour made the Court’s position clear at T13.5:

HIS HONOUR: Well, if somebody wants these proceedings finalised in a way that either

doesn't or does leave costs available to be argued then they need to identify that, either formally in a motion, or informally in a way that gives notice to everybody who might be affected and formulates the actual orders that are sought.

69․	The proceedings were adjourned to a date to be fixed.
70․	The matter returned before Mossop AsJ on 27 October 2017.
71․	MWP appeared and mentioned the appearance of Westpac. There was no appearance
by Mr Emmott or EFM. Associated proceedings (which had been commenced by Ms
Palmer and concerned the title to the Ainslie property) were mentioned at the same time.
72․	MWP said that “the parties” had consented to orders, and his Honour made orders as
follows:

(1)	This claim should be and hereby stands adjourned unto the final outcome is
known of the Application by Ms J.A. Palmer, as to Trustee of the Bankrupt
Estate of the Second Judgment Debtor, to rectify the Title in Volume 207,
Folio 15, Block 13, Section 97 of Deposited Plan 900, in the Division of Ainslie
in the Australian Capital Territory with an address at 41 Officer Crescent, Ainslie, pursuant to section 125 of the Land Titles Act 1925 (ACT) in claim
number: SC 402 of 2017, that is currently before this Court in other such
proceedings.
(2)	Liberty to apply.
(3)	Costs in the cause.

73․	The matter was adjourned until 20 November 2017.
74․	The application referred to in Order 1 above was resolved on 22 December 2017: see
Palmer v Registrar-General of Land Titles of the Australian Capital Territory [2017]
ACTSC 407 (Palmer).
75․	The Ainslie property was sold in 2019 and Westpac’s interest was fully discharged at
that time.
76․	On 5 June 2020, Westpac was removed as a party to the proceeding.
77․	What happened thereafter was set out by McWilliam AsJ in MWP (ACT) as follows:

[27] No further communication with the Court in relation to these proceedings occurred from any party until 10 January 2020, when the Deputy Registrar sent the parties a notice of listing, informing them that the matter had been listed for directions on 17 February 2020. Although the reason for the listing is not apparent from the contents of the notice, it may be inferred that the Court intended to formally finalise what it considered to be an inactive matter.

[28] On 21 February 2020, the Judgment Creditor issued notices to produce to Mr Emmott
and EFM.

[29] On 14 April 2020, the Judgment Creditor filed an application in proceeding (April 2020 Application) seeking the following orders:

1. That the Estates of Mr Nicholls and Mr Slater and Mr Emmott shall be liable for and

shall pay the Judgment Creditor’s costs of the proceedings to date.

2. That Mr Emmott “is jointly and severally liable and in contribution for all of the

US$14m judgment debts owed to the Judgment Creditor, as a Temujin Partner since

early September 2005 to date, as found by the judgments and as admitted”.

3. That Mr Emmott and EFM shall forthwith comply with the two Notices to Produce, as filed and served on them by the Judgment Creditor on 24 November 2015 and also on 17 February 2020.

4. That pursuant to r 6(1) of the Rules, the requirements of rr 2201(3) and 2300(3), for supporting affidavits being made within two days of any application under those rules, be waived.

[30] That application led Mr Emmott and EFM to raise the preliminary question of whether the proceeding has been dismissed. On 24 September 2020, the Judgment Creditor filed an application in proceeding, primarily seeking an order for reinstatement, pursuant to r 76(2) of the Rules. The application was filed purely to address the consequences if the contentions of Mr Emmott and EFM as to dismissal of the proceeding were accepted.

78․ McWilliam AsJ then determined the question whether the proceedings had been

dismissed automatically by operation of r 75 of the Rules, and, if it had been, whether

the proceedings should be reinstated pursuant to r 76 of the Rules.

The primary judge’s orders and reasons

Orders

79․	Other than orders as to costs and a stay, her Honour made only one order in MWP (ACT)
at [85], it being:

The application filed 14 April 2020 and the application for reinstatement filed 24 September

2020 are each dismissed.

80․	Although no declaration was made to the effect that the proceedings had been dismissed
by reason of r 75 of the Rules, it is clear that her Honour determined that that had taken
place, and this application for leave to appeal has proceeded on that basis.

Automatic dismissal – reasons

81․	Her Honour commenced with an analysis of r 75 of the Rules: see MWP (ACT) at [31].
Rule 75(2) of the Rules says:

(2)	Also, a proceeding is taken to be dismissed in relation to a party if the party does not take a step in the proceeding before the end of 1 year after the day the last step was taken in the proceeding.
…

82․	The critical question for her Honour was: when was the “last step” taken in the
proceedings.
83․	In considering what constitutes a “step”, her Honour referred to Butler v Daood [2017]
ACTSC 253 at [33]-[37] and said at [32]:

Without repeating the authorities there-cited, it equates to something in the nature of a formal step in the prosecution of an action, being conduct the party is required or permitted to take, pursuant to either rules or orders of the court, for the purpose of advancing the case towards final judgment.

84․	The primary judge then considered when the “last step” was taken in the proceedings:
see MWP (ACT) at [33]. Her Honour considered that that date was 22 December 2017.
Her Honour’s reasons for that conclusion were as follows (noting that “the Judgment
Creditor” refers to MWP):

[33] In the present case, the orders of Mossop AsJ meant that the parties had agreed no step would be taken from 27 October 2017 until a particular event had occurred, being the handing down of a decision in a different proceeding in this Court.

[34] As set out above in the procedural history, that occurred on 22 December 2017 with the delivery of the Palmer judgment. For the purposes of considering the operation of r 75, I

consider that was the ‘last step’ taken in the proceeding.

[35] Mr Emmott (supported by EFM) submitted that handing down a judgment in a different

proceeding does not constitute any ‘step’ in the present proceeding. While I accept that

submission, the effect of Palmer being handed down was to fix the time to which the present proceedings stood adjourned by the operation of the consent orders of 27 October 2017. The consequence of Palmer being delivered was that 22 December 2017 also became the date to which the present proceeding was adjourned. The result was to lift what was tantamount to a temporary stay in the present proceeding.

[36] From 22 December 2017, the first order made by Mossop AsJ on 27 October 2017 had been implemented and spent. The procedural status of the matter changed from one that was the subject of an adjournment to one that was able to be progressed, if any party chose to do so. As that change was brought about by the operation of an order, it has a sufficient degree of formality about it, and may also be viewed as having the purpose of advancing the case towards final judgment.

[37] The Judgment Creditor submitted (subject to submissions about judgment being

reserved below) that if r 75 applied, then the relevant date for the ‘last step’ taken was the

expiry of an appeal period following the decision of Palmer. No authority was cited for why

an appeal period would be considered a ‘step’ in a proceeding. I am not persuaded on the

authorities referred to in Butler at [33]–[37] that the existence or conclusion of an appeal

period in relation to a judgment in a different proceeding has any bearing on whether a step was taken in these proceedings. As explained above, it was the fulfilment of a time period that was fixed by reference to the happening of an event in an order operating in these proceedings that gave rise to a step in the proceedings, not the handing down of the Palmer judgment itself.

85․	The primary judge then went on to consider whether any “step” has been taken in the
proceedings following 22 December 2017: see MWP (ACT) at [38]. Her Honour found
that no further step had been taken in the proceedings until 21 February 2020 when
MWP issued notices to produce.
86․	MWP made two submissions to McWilliam AsJ on this point. These were summarised
by the primary judge as follows:

[39] The Judgment Creditor submitted that although the parties agreed that a determination of the substantive issue was no longer required, it was made clear that the issue of costs was required to be determined, and that issue further required the determination of, among other things, the validity of the mortgage asserted by EFM.

[40] The Judgment Creditor further argued that before the issue of costs can be determined, a determination of the substantive matter about which judgment had been reserved was, in fact, required. It was submitted that until judgment is delivered on the substantive matter, costs cannot be determined and the court record remains unperfected.

87․ These submissions were rejected. Her Honour said:

[41] That submission is rejected. Not once during the period between 22 December 2017 and when the Deputy Registrar contacted the parties in January 2020 did anyone enquire as to whether a judgment was to be handed down. As the emphasised passages of the transcript of the hearing before Mossop AsJ on 7 June 2016 above make clear, the August

2015 Application by the Judgment Creditor was rendered futile by the Judgment Creditor’s

own actions in having Mr Slater made bankrupt in the UK. Once the Ainslie Property vested in the trustee in bankruptcy by operation of law, the Judgment Creditor lost the right to pursue possession of the Ainslie Property against Mr Slater (because he no longer had the legal title to it).

[42] The submission that a judgment on the reserved issue was required before an argument about costs was able to occur is equally without substance for two reasons: first, the submission is flawed as a matter of legal principle, and second, the argument is not made out on the facts of this case.

[43] In terms of legal principle, cases such as Re Minister for Immigration & Ethnic Affairs (Cth); Ex Parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622 (Lai Qin) have referred to the following position (at 624, citations omitted):

In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties.

[44] Rule 1706 of the Rules is consistent with such statements of principle. It expressly
provides:

(1) If, for any reason, it becomes unnecessary to continue a proceeding other than for deciding who is to pay the costs of the proceeding, any party to the proceeding may apply to the court for an order for the costs.

(2) The court may make the order it considers just.

[45] There can be no doubt that in the present proceeding, although there had been a hearing on the merits, the proceeding had been overtaken by an external state of affairs, being the bankruptcy of Mr Slater. The moving party had subsequently lost any right to proceed with the action for possession because Mr Slater was no longer in possession of the Ainslie Property.

[46] To determine the interesting legal issues raised by the application brought by the Judgment Creditor would have been to impermissibly determine a hypothetical action, that being whether possession of the Ainslie Property would have amounted to double satisfaction if the bankruptcy had not occurred and Mr Slater had continued to own such an asset.

[47] The fact that the proceeding had become futile meant that no judgment on the application was either required or appropriate. That was a position plainly accepted by the Judgment Creditor before Mossop AsJ on 7 June 2016 and counsel for the Judgment Creditor, quite properly, did not seek judgment on that date. Instead, the application was effectively withdrawn or discontinued, meaning there was no need for Mossop AsJ to formally dismiss the application.

[48] However, as confirmed by r 1706, that did not prevent any questions about costs being
agitated upon application.
[49] The second reason why the Judgment Creditor’s submission must be rejected is

because of what occurred in this particular proceeding. As the hearing before Mossop AsJ on 7 June 2016 again makes clear, the Court was not requested to determine any costs issues until the recent April 2020 Application. The fact that the substance of the application in proceeding had not been determined did not mean that the Judgment Creditor was prevented from applying for costs in relation to the proceedings. On the contrary, it was clear that following the bankruptcy of Mr Slater, there was a possibility of future skirmishes about

costs, but no application for costs against Mr Slater’s trustee in bankruptcy, EFM or Mr

Emmott had yet been made by the Judgment Creditor.

[50] Once the Palmer judgment was delivered, it was a matter for the parties how they wished to proceed and in particular, whether they resolved questions of costs between themselves (including by the means foreshadowed by Mr Vivekananda, namely seeking to prove the debt in the bankrupt estate of Mr Slater) or whether they wished to make an application in relation to the costs of the proceedings. No application was made by any party. There was no dispute on the question of costs brought before Mossop AsJ for resolution. Contrary to the submissions of the Judgment Creditor, there was no justiciable issue awaiting determination.

[51] Accordingly, r 75(2) of the Rules applies. As more than a year had passed from the last

step taken in the proceedings, the proceedings are taken to have been dismissed.

Reinstatement – reasons

88․	The primary judge then turned to consider the question of whether the Court should
exercise its discretion to reinstate the proceedings.
89․	Rule 76(1)-(3) of the Rules says:

(1) A person whose proceeding has been dismissed under rule 75 may apply to
the court to reinstate the proceeding.

…

(2)	The court may reinstate the proceeding if it is in the interests of justice to reinstate the proceeding.
(3)	A proceeding that has been dismissed under rule 75 (2) is reinstated if, before the end of 1 year after the day the proceeding is dismissed, a party to the proceeding files a document in the proceeding.

90․	The primary judge summarised the relevant authorities on this question in MWP (ACT)
at [52]-[56]. In considering this question, the primary judge considered the nature of the
proceedings, the delay, the explanation for the delay and prejudice.
91․	In considering the nature of the proceedings, the primary judge said:

[57] In the present case, it is important to appreciate that the present proceedings were enforcement proceedings. The Judgment Creditor seeks to reinstate the proceedings to agitate a question about costs of an application in proceedings that became futile. The production of documents under notices to produce issued to Mr Emmott and EFM are in aid of the order sought.

[58] The Judgment Creditor submitted that because the limitation period regarding enforcement of the NSW Judgment had not yet expired, the Judgment Creditor was able to commence fresh enforcement proceedings again now. As a result, the Court would not refuse to reinstate proceedings that could simply be commenced afresh again.

[59] That circumstance alone would not be decisive in the exercise of the Court’s discretion:

Muirhead v Uniting Church in Australia Property Trust [1999] QCA 513 at [12]-[13]. More importantly though, the argument conflates the broad right of enforcement with the specific enforcement proceeding that had been commenced by the August 2015 Application.

[60] As at December 2017, the NSW Judgment had been registered in the Territory. The 12-year limitation period prescribed by s 14(2) of the Limitation Act 1985 (ACT) means that the Judgment Creditor has until 13 December 2024 to enforce the NSW Judgment in this jurisdiction. The argument that the Judgment Creditor maintains the right to an enforceable judgment in the Territory, even if the proceeding is not reinstated, is correct.

[61] However, it is important to distinguish between a judgment registered in the Territory continuing to have force and continuing to be the source of a right of enforcement, and the proceeding sought to be reinstated. The fact that the August 2020 Application has been dismissed has no legal effect on the ability to enforce the NSW Judgment that has been registered. The Judgment Creditor is not required to register the judgment in the Territory again in order to seek a further remedy in this jurisdiction. It is simply that the application in proceedings for the enforcement order against Mr Slater was futile and the only remnant of the existing proceeding was a potential costs issue. That is what is taken to have been dismissed.

[62] The nature of the proceeding that has been deemed dismissed is important, because the Judgment Creditor also seeks to reinstate the proceedings in order to seek additional orders. The order sought is that Mr Emmott:

is jointly and severally liable and in contribution for all of the US$14m judgment debts owed to the Judgment Creditor, as a Temujin Partner since early September 2005 to date, as found by the judgments and as admitted.

[63] There are two parts to the above order sought. The first is that Mr Emmott be made liable for the Judgment Debt, and the second is that Mr Emmott be made liable for all debts

owed to the Judgment Creditor in the capacity of what is described as a ‘Temujin Partner’.

[64] As to the first, that is plainly a matter entirely separate to the enforcement of a judgment that has been registered in the Territory for the purpose of recovering a property asset within the jurisdiction.

[65] The NSW Judgment was obtained against five separate entities, in circumstances where Mr Emmott was expressly not a party to, and not bound by, the NSW Judgment. Upon registration, the judgment has the same effect (no more) as if it had been given by the court of registration: Bell v Bell (1954) 73 WN (NSW) 7 (Bell v Bell). The court of registration has no jurisdiction to vary the order in any way to affect the substantive rights and obligations of the parties thereunder.

[66] I accept that there are circumstances where a judgment that is registered in the Territory so as to enforce a judgment from a court in a different jurisdiction may be varied or set aside. These include where the judgment of the other jurisdiction is itself varied (Remilton v CML Assurance (1907) 24 WN (NSW) 177; Bell v Bell; Doyle v Hall Chadwick [2007] NSWCA 159 at [51]) or where the original judgment is the product of fraud (Ainslie v Ainslie [1927] HCA 23; (1927) 39 CLR 381 at 402).

[67] However, registering a judgment in a different jurisdiction does not of itself create any rights independent from the judgment obtained in the original jurisdiction. With regard to the present issue, there is no right for a party to effectively seek a variation of the judgment to extend liability to someone else in the course of enforcement. This is not a case where the order seeking to extend liability to ensure consistency with any variation in the NSW Judgment to extend joint and several liability to Mr Emmott. On the contrary, on its face, the order appears inconsistent with the result of the NSW proceeding.

[68] The same issue arises in respect of the remainder of the order sought, which seeks to

extend Mr Emmott’s liability even further, to ‘all of the US$14m judgment debts owed to the

Judgment Creditor’. Further, the fact that the order sought goes outside the effect of the

judgment that has been registered is one of a number of problems arising in relation to that part of the order. The fact that the judgment debts totalling US$14m referred to have themselves not first been registered in the Territory is, to my mind, a fairly critical hurdle.

[69] As Mr Emmott submitted, the order sought is clearly not relief that is part of the existing proceeding. Rather, it is substantive final relief that should be properly pleaded in an

originating claim (r 33(2)). The order sought refers to Mr Emmott ‘as a Temujin Partner’.

Insofar as those words are an attempt by the Judgment Creditor to invoke a right pursuant to r 2006 (order in partnership name) of the Rules, on the evidence before the Court the underlying basis for such an extension (being the entitlement of the Judgment Creditor to enforce a judgment debt in the name of the Temujin Entities) is at best an assertion. If there is such a right, and it has not yet been extinguished, then the Judgment Creditor is still able to commence a fresh proceeding that sets out the legal basis in a pleading to which Mr Emmott may properly respond.

[70] The question before the Court is whether it is in the interests of justice that the proceeding that was on foot but were deemed dismissed should be reinstated. It is not whether the Court should reinstate an old proceeding between parties in order that the proceeding provide a shell for what is in substance an entirely different cause of action.

92․	In considering delay, the primary judge said in MWP (ACT) at [71] that the delay was
“substantial” and noted that the notice to produce was brought after a delay of “more
than two years, and a year from the time that the proceeding was deemed dismissed”.
93․	In considering the explanation for delay, MWP submitted that the reason for the delay
was because “the NSW Judgment was [being] pursued in other courts spanning across
a number of jurisdictions, including NSW and the UK”: see MWP (ACT) at [72]. MWP
submitted that the delay was caused by the judgment debtors, as they had taken “a
number of steps to avoid, or simply frustrate, enforcement of the judgment in proceedings
across the different jurisdictions”.
94․	The primary judge did not accept the explanation for the delay, and said in MWP (ACT)
at [73]:

The fact that the Judgment Creditor was pursuing enforcement of the Judgment Debt in other jurisdictions is irrelevant, because any dispute about the costs of the August 2015 Application could only be resolved by applying for those costs in these proceedings.

95․ In considering prejudice, the primary judge said at [75]:

The only feature of the proceeding that was outstanding between the parties was

costs. Questions of costs are likely to be able to be dealt with on the papers, through exhibiting correspondence between the lawyers leading up to the proceeding and transcripts of what occurred during the arguments. As such, although the delay in this case is

substantial, it is probably not a matter that weighs heavily in the Court’s consideration in

relation to questions of prejudice.

(Emphasis added.)

96․ The primary judge’s final conclusions were as follows:

[80] While a costs application may be made at any stage of a proceeding, including after its conclusion, there are times where it will simply not be in the interests of justice or consistent with the principle of a finality in litigation for the court to permit a belated application for costs to be made. Here, reinstatement would be for the sole purpose of hearing a costs

application seeking orders against the estates of parties who have entered into bankruptcy and one of whom is now deceased. In addition, the costs application extends to those (Mr Emmott and EFM) who were seeking to intervene in enforcement proceedings but whose interests were never determined.

[81] While the Court does not assess the ultimate merit of the proceeding sought to be

reinstated, it is relevant to the Court’s discretion that upon reinstatement, there is a real

possibility that the Court will apply the principle articulated in Lai Qin at 625:

If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the costs discretion will usually mean that the court will make no order as to the cost of the proceedings.

[82] Section 5A of the Court Procedures Act 2004 (ACT) requires that the civil procedure provisions must be applied, and any power or duty must be exercised, in a way that promotes, among other things, the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute. I am not persuaded that reinstating a proceeding to deal with a late application for costs, in a proceeding that was never determined, is consistent with that purpose.

[83] I am further not persuaded that it would be in the interests of justice to reinstate a proceeding to enable a Judgment Creditor to seek to enforce a judgment against a person who is not presently a judgment debtor.

(Emphasis added.)

Application for leave to appeal

Adjournment

97․	MWP first sought an adjournment of the application, which was rejected for reasons I
gave orally at the time.

Ground of Appeal

98․	The 42 grounds of appeal in the Draft Notice of Appeal filed by MWP on 16 January 2023
are lengthy and, in substance, are not grounds of appeal at all.
99․	In relation to drafting grounds of appeal, former High Court judge, the Hon Michael
McHugh AO QC, wrote, extra-curially, in ‘Preparing and arguing an appeal’ (2010)
(Winter) Bar News: Journal of the NSW Bar Association at 87:

The cardinal rule for drafting a notice of appeal is to be selective. If the appeal notice contains too many grounds, the best points are likely to be hidden in a thicket of weak points. The notice of appeal should identify only those errors of ultimate fact or law which affected the result, and the fewer the better. As Justice Branson has explained (Sydneywide Distributors Pty Ltd & Anor v Red Bull Australia Pty Ltd & Anor (2002) 55 IPR 354 at 355-356):

Not every grievance entertained by a party, or its legal advisors, in respect of the factual findings or legal reasoning of the primary judge will constitute a ground of appeal. Findings as to subordinate or basic facts will rarely, if ever, found a ground of appeal. Even were the Full Court to be persuaded that different factual findings of this kind should have been made, this would not of itself lead to the judgment, or part of the judgment, being set-aside or varied. This result would be achieved, if at all, only if the Full Court were persuaded that an ultimate fact in issue has been wrongly

determined. The same applies with respect to steps in the primary judge’s process of

legal reasoning. Although alleged errors with respect to findings as to subordinate or basic facts, and as to steps in the process of legal reasoning leading to an ultimate conclusion of law, may be relied upon to support a ground of appeal, they do not themselves constitute a ground of appeal.

100․	The Draft Notice of Appeal suffers greatly from the failings mentioned in the quote above.
It consists of a list of findings and statements made by the primary judge which MWP
says were erroneous. Many concern findings as to subordinate or basic facts which,
even if erroneous, would not, of themselves, lead to the judgment, or part of the
judgment, being set-aside or varied. The grounds do not identify what alleged errors are
said to have been made.

101․ MWP’s oral submissions were little better. Mr Wilson simply did not grasp the need to

identify a relevant legal error made concerning an identified finding or holding. Rather,

his submissions traversed many matters which, although important to him, were not

legally relevant to what his client needed to demonstrate on an application for leave to

appeal.

102․ I should also note at this point that, subsequent to the hearing of the application, Mr

Wilson sent a number of emails to my Chambers, some of which attached documents.

No leave was sought or obtained for doing so and those emails and the documents will

be ignored. At least one of the emails asserted that I had “requested” a document during

the hearing. This is not true. I had enquired from time to time during submissions whether

certain documents referred to by MWP were included in the materials provided for the

hearing of the application, but I did not request any documents. Indeed, the word

“requested” does not appear in the transcript. The word “request” appears twice, but both

times it was used by Mr Wilson in relation to the adjournment application.

103․	The sending of the emails was not, so far as I am aware, the subject of prior consent of
the opposing parties. Thus, the emails did not fall within the allowable exceptions for
communication with Chambers in the absence of consent and were therefore
inappropriate: see Ezekiel-Hart v The Council of the Law Society of the ACT (No 5)
[2023] ACTSC 218.
104․	Ultimately, MWP’s grounds of appeal, as addressed orally, were:

1.       The primary judge did not consider MWP’s submission that r 75 of the Rules

could not apply during the period in which judgment (by Mossop AsJ) was

reserved.

2.       Alternatively, the primary judge erred in failing to hold that r 75 of the Rules

could not apply during the period in which judgment (by Mossop AsJ) was

reserved.

3.       In relation to the reinstatement application, the primary judge erred in the

exercise of her Honour’s discretion in failing to order that the proceedings be

reinstated.

105․	It will be convenient to consider the first two grounds together.
106․	I should note that that summary of MWP’s grounds of appeal is confirmed by the contents
of MWB’s affidavit filed pursuant to the Supreme Court of the Australian Capital Territory,
Practice Direction No 1 of 2016: Applications and Appeals to the Court of Appeal Filing
of Documents and Appeal Papers, 18 September 2019, which requires an applicant to
identify the ‘Questions Involved’. That document said:

Questions Involved

19. The Associate Judge failed to appreciate that r. 75 of the Court Procedures Rules (ACT) cannot apply once judgment is reserved, and that from the moment when judgment is reserved it is not possible, as a matter of law, for the parties to agree on an adjournment which negates the reserved judgment.

20. This point is emphasised by the fact that there is no judgment disposing of the justiciable issues and those issues remain alive so that the court record remains unperfected.

21. In addition, the issue is whether, in accordance with House v The King (1936) 55 C.L.R. 499. 505 per Dixon, Evatt & McTiernan JJ, the exercise by the Associate Judge of her discretion miscarried. This involves the issue of whether or not the Associate Judge proceeded upon an incorrect legal principle (error of law), or whether or not the Associate Judge proceeded upon an irrelevant matter, or whether or not the Associate Judge proceeded upon a misconception of the facts? Once that error is identified it becomes clear that the discretion has miscarried, as will be addressed in submissions.

22. In addition, there is the issue of reinstatement under r. 76, which will be addressed in
submissions.

When should leave to appeal be granted from an interlocutory decision?

107․ There is no dispute between the parties that the primary judge’s decision was an

interlocutory decision.

108․ In deciding whether to grant leave to appeal from an interlocutory decision, Murrell CJ

said in Donohue v Volanne Pty Ltd (No 2) [2021] ACTCA 11:

[13] Although there are no rigid and exhaustive criteria which govern the exercise of the discretion to refuse or grant leave to appeal from an interlocutory decision, there are two touchstones:

(a) Is the decision attended with sufficient doubt to warrant its being reconsidered?

(b) Would substantial injustice result if leave was refused, supposing the decision to
be wrong?

See Re an application for leave to appeal by Insurance Australia Ltd [2017] ACTCA 57 at [10], Capital Property Projects (ACT) Pty Ltd v Australian Capital Territory Planning & Land Authority [2008] ACTCA 9; 2 ACTLR 44 (Capital Property), More Than a Morsel Pty Ltd v Dean [2003] ACTCA 9 at [4].

[14] The onus lies upon the party who applies for leave to satisfy the Court of Appeal of

those factors.

[15] The type of decision that is the subject of the application also informs the exercise of

the discretion. As Refshauge J observed in Capital Property at [28]:

[T]he principles with which a Court approaches the decision as to whether to grant

leave are:

(a) that leave will be granted sparingly to avoid delaying and fragmenting the hearing
of cases;

(b) that a Court will be particularly hesitant to grant leave where the decision is one in respect of practice and procedure or is made in the exercise of a discretion; and

(c) that decisions which, though interlocutory, determine substantive rights will more

readily be the subject of the grant of leave.

See also Arrow International Australia Ltd v Group Konstrukt Pty Ltd [2012] ACTCA 37; 7

ACTLR 48 at [58] and Quach v Butt [2017] ACTCA 4 at [12].

Rule 75

109․ The first point to make is that the primary judge did consider MWP’s submission that

r 75 of the Rules could not apply whilst a judgment was reserved.

110․ The primary judge did so in MWP (ACT) at [39]-[42] and at [47], and by her Honour’s

inclusion in the background facts of various statements made to Mossop AsJ (with

certain statements given emphasis by her Honour) making the point that, as a matter of substance, there was no outstanding issue which was reserved for decision by Mossop

AsJ.

111․	The short point is that the primary judge found that there was but one application which
was heard by Mossop AsJ, and that involved issues between MWP and Mr Slater (and
not Mr Emmott nor EFM). That is made clear by what his Honour said on 16 December
2016 quoted at [52] above and is apparent from a reading of the transcript of the hearing
that day.

112․ In submissions before me, Mr Wilson agreed that the issue about the Ainslie property

advanced by MWP before Mossop AsJ had been rendered otiose by reason of Mr

Slater’s bankruptcy. What Mr Wilson submitted remained to be decided by Mossop AsJ

was the contention by Mr Emmott that he was entitled to any monies obtained by MWP

through MWP’s enforcement action taken in respect of the Ainslie property: see T54.45-

55.23.

113․	However, although Mr Emmott had raised that contention between the parties, it was not
argued before Mossop AsJ on 16 December 2016, and was therefore not the subject of
any reserved decision, which is the substance of the primary judge’s findings.
114․	The correctness of those findings is made patently clear from a reading of the transcript
of the hearing in December 2015, and by Mossop AsJ in the passage quoted at [52]
above referred to by the primary judge in MWP (ACT) at [22]. Indeed, Mr Emmott did not
even appear before his Honour at the hearing in December 2015.
115․	That fact is further confirmed, if further confirmation is necessary, by the absence of any
mention of that being an issue remaining to be decided by MWP’s counsel on any of the
subsequent occasions the matter was mentioned before Mossop AsJ.
116․	The fact that there was no justiciable issue left to decide was addressed by the primary
judge in the passages I have identified, namely at [39]-[41] and [47].
117․	In MWP (ACT) at [39], the primary judge said:

The Judgment Creditor submitted that although the parties agreed that a determination of the substantive issue was no longer required, it was made clear that the issue of costs was required to be determined, and that issue further required the determination of, among other things, the validity of the mortgage asserted by EFM.

118․ The first sentence is reference to a concession by MWP that a determination of the

substantive issue was no longer required, the substantive issue being whether MWP was

entitled to possession of the Ainslie property.

119․ Once Mr Slater was bankrupted, then MWP’s application could not succeed and thus

there would never be the occasion to determine in those proceedings whether the

hypothetical proceeds of sale of the Ainslie property by MWP should be paid to Mr

Emmott. That is confirmed by what MWP’s counsel told Mossop AsJ on 10 February

2017, quoted at [64] and [65] above.

120․ In MWP (ACT) at [40], the primary judge said:

The Judgment Creditor further argued that before the issue of costs can be determined, a determination of the substantive matter about which judgment had been reserved was, in fact, required. It was submitted that until judgment is delivered on the substantive matter, costs cannot be determined and the court record remains unperfected.

121․	The primary judge rejected that submission because it was wrong for two reasons. First,
it was wrong as a matter of law. Second, it was wrong on the facts.
122․	The primary judge referred to Re Minister for Immigration & Ethnic Affairs (Cth); Ex Parte
Lai Qin (1997) 186 CLR 622 for the proposition that courts are not obliged to try
hypothetical issues.
123․	No submission was made to me as to why the primary judge’s holding in that regard was
wrong. In any event, her Honour was, with respect, correct. In the circumstances, there
was no obligation for Mossop AsJ to give judgment on a futile application. It is true that
on any costs application (had one been pursued), his Honour may have examined the
issues on the application for the purpose of deciding costs, but that would have been a
separate and distinct exercise conducted within the bounds of a costs application, and
would not have involved delivering an earlier judgment on the issues argued in the
December 2015 hearing.

124․ As to the facts, the primary judge made clear in the judgment that there was no issue

reserved for decision which remained alive. Hence, in MWP (ACT) at [47], the primary

judge said:

The fact that the proceeding had become futile meant that no judgment on the application was either required or appropriate. That was a position plainly accepted by the Judgment Creditor before Mossop AsJ on 7 June 2016 and counsel for the Judgment Creditor, quite properly, did not seek judgment on that date. Instead, the application was effectively withdrawn or discontinued, meaning there was no need for Mossop AsJ to formally dismiss the application.

125․	Mr Wilson made a slightly different oral submission at T65.9-65.26 and T67.40-67.44 to
the effect that what remained alive for determination by Mossop AsJ was the defence
mounted by Mr Slater (and Mr Emmott) as to satisfaction and double recovery arising
from the London arbitration and resultant judgment debt, and EFM’s caveat.

126․ Both submissions are wrong.

127․	It is clear from the transcripts that the issue of EFM’s caveat had not been the subject of
the hearing on 16 December 2015. It was mentioned as a matter that may have required
attention if and when the registered owner of the Ainslie property (anticipated to have
been Mr Slater’s trustee) sent a lapsing notice, and everyone seemed to be in agreement
that, if that occurred, separate proceedings would need to be commenced.
128․	As to the satisfaction and double recovery defence, that was raised by Mr Slater, but fell
away upon Mr Slater’s bankruptcy. Mr Emmott may have desired to raise it at some point,
but he did not appear before Mossop AsJ on 16 December 2015, nor was Mr Emmott’s
contention that he was entitled to any monies MWP secured from the Ainslie property
raised for determination in the hearing before Mossop AsJ.

129․ The point is, there was nothing left for Mossop AsJ to decide after the hearing of 16

December 2015 other than costs if and when a party raised the issue. That is, although

his Honour had reserved his decision in December 2015, subsequent events rendered

all of the matters his Honour had to decide at that point otiose.

130․ Mr Wilson also made a point at T70.23-70.27 that MWP was:

… seeking judgment on the issue of satisfaction in double recovery. We were seeking

judgment on the issue of whether EFM should ever have interfered and appeared through their caveat where there was a worldwide freezing order of the New South Wales Supreme Court over that asset since December 2006, and it had been raised against the title.

131․	In terms of what was before Mossop AsJ on 16 December 2016, none of those matters
involving EFM were before his Honour (as confirmed by MWP’s counsel in the
subsequent various mentions of the matter) and none of them, on the material provided
to me, were the subject of any application filed by MWP. Satisfaction and double
recovery were issues raised by Mr Slater which were rendered otiose by reason of his
bankruptcy.
132․	Therefore, on the two matters raised in relation to r 75 of the Rules, MWP has failed to
persuade me that there is sufficient doubt about the primary judge’s decision to warrant
it being reconsidered. In my view, her Honour was correct.

Rule 76

133․ MWP made this submission only faintly.

134․	At T71.5-71.6, MWP submitted that because of the errors made by the primary judge in
relation to r 75 of the Rules, there was no clearer case where r 76 should have applied.
I have rejected the submissions as to r 75 and so this submission automatically fails.
135․	In MWP’s written material, no error was identified other than to assert, in various ways,
that reinstatement should have been granted because Mossop AsJ still had to decide
the issues argued before his Honour in December 2015, and that there were still issues
in those proceedings (such as the claim by Mr Emmott) which had yet to be decided.
136․	I have dealt with those submissions above and am of the opinion that there is insufficient
doubt about the primary judge’s decision to grant leave to appeal.

137․ Fundamentally, MWP does not appreciate that it commenced the proceedings against

Mr Slater in relation to the Ainslie property. Mr Slater raised defences of satisfaction and

double recovery, but those defences did not need to be decided upon Mr Slater’s

bankruptcy.

138․ Mr Emmott sought to intervene, and sought to raise other issues, but that intervention

and those issues were contingent upon MWP being successful as against the Ainslie

property. As that could not happen upon Mr Slater’s bankruptcy, Mr Emmott’s claim also

fell away.

139․ Whilst MWP might have desired Mr Slater’s defence and Mr Emmott’s claim to be

determined because it would assist MWP elsewhere, or to have Mr Slater’s defence

determined because it might have been relevant to costs, that did not mean that those

issues were required to be decided by Mossop AsJ and that his Honour was, in effect,

still reserved.

140․	Mr Emmott’s claims were not part of the issues that his Honour had heard and reserved
decision on, and the claim against the Ainslie property became futile on Mr Slater’s
bankruptcy. Accordingly, there was no longer any decision reserved.
141․	MWP could have taken the step of having the matter listed before Mossop AsJ to argue
costs at some point within 12 months of the decision in Palmer being given (being 22
December 2017). It did not do so. As the primary judge noted in MWP (ACT) at [44]:

Rule 1706 of the Rules is consistent with such statements of principle. It expressly provides: (1) If, for any reason, it becomes unnecessary to continue a proceeding other than for deciding who is to pay the costs of the proceeding, any party to the proceeding may apply to the court for an order for the costs.

(2) The court may make the order it considers just.

Costs

142․	Ordinarily, costs would follow the event.
143․	However, Mr Emmott’s appearance was conditional in that he said he had not submitted
to the jurisdiction of the courts of the Australian Capital Territory. That may mean he is not entitled to costs. As for EFM, there may be issues of which I am unaware which affect
costs.
144․	Accordingly, I shall not make any order for costs now, but will make orders against the
event that any such order is sought. I would intend to decide costs on the papers. In
default of any such application, I shall order that each party is to pay its and his own
costs of the application.

Orders

145․ I make the following orders:

(1)	The application for leave to appeal is dismissed.
(2)	If any party seeks an order for costs, he or it should forthwith notify the
responding party or parties to that effect, and file and serve submissions of no
more than five pages and any evidence in support of that application within 14
days of the date of this judgment.
(3)	Any responding party shall file and serve submissions of no more than five
pages and any evidence in support within 28 days of the date of this judgment.
(4)	Any submissions (of no more than three pages) and evidence in reply are to
be filed and served within 35 days of the date of this judgment.
(5)	Any documents filed and served in accordance with the above orders are also
to be emailed in machine-readable PDF form to my Associate in addition to
being filed in the usual way with the Registry.
(6)	If no application for costs is made, the default order is that each party is to pay
its and his own costs of the application.

I certify that the preceding one hundred and forty-five [145] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Acting Justice Curtin

Associate:

Date: