Michael Wilson & Partners Ltd v Nicholls (No 14)

The Supreme Court of the Australian Capital Territory considered applications by Michael Wilson & Partners Ltd (MWP) and Mr John Forster Emmott concerning costs orders and security for costs. MWP sought to discharge an order requiring it to provide security for Mr Emmott's costs of an application for leave to appeal. Mr Emmott sought orders for indemnity costs to be assessed on a gross sum basis, for those costs to be paid by MWP's solicitor personally, and for a party/party costs order to be assessed on a gross sum basis. These applications arose from earlier proceedings where MWP's claim was dismissed, and subsequent applications for leave to appeal and related cost matters.

The Court was required to determine whether MWP had established grounds to discharge the security for costs order, particularly in light of its assertion that Mr Emmott was a net debtor to MWP due to various unsatisfied judgments and orders. Additionally, the Court had to consider Mr Emmott's applications for indemnity costs, the personal liability of MWP's solicitor for those costs, and the assessment of costs on a gross sum basis. The Court also had to assess whether the matters now advanced by MWP in seeking to discharge the security order were identical or merely variations of submissions previously made to the Court.

In relation to the security for costs, the Court noted that extensive litigation had occurred between the parties across multiple jurisdictions, resulting in various judgments and costs orders. MWP argued that the net result of this litigation was that Mr Emmott owed MWP substantial sums, making him a net debtor. However, the Court found that there had been no final reckoning of the net indebtedness between the parties, and it was not presently known who the net creditor or debtor was. MWP had provided evidence of sums allegedly owed by Mr Emmott but had not provided evidence of sums owed by MWP to Mr Emmott, submitting that the onus was on Mr Emmott to do so. The Court also observed that the matters raised by MWP in seeking to discharge the security order were identical or variations of previous submissions.

The Court ultimately refused MWP's application to discharge the security for costs order. It also made orders for Mr Emmott's indemnity costs to be assessed on a gross sum basis, and for MWP's solicitor to pay those indemnity costs personally. Furthermore, the Court ordered that a party/party costs order against MWP be assessed on a gross sum basis.