Michael Wilson & Partners Ltd v Nicholls & Ors

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SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

Michael Wilson & Partners Ltd v Nicholls & Ors

Citation:

[2021] ACTSC 128

Hearing Dates:

8 December 2020, 25 February 2021

Submissions last received:

Decision Date:

4 March 2021

30 June 2021

Before:

McWilliam AsJ

Decision:

See [85]

Catchwords:

PRACTICE AND PROCEDURE – Court Procedures Rules 2006 (ACT) rr 75 and 76 – whether proceedings taken to be dismissed – where judgment on interlocutory issue was not delivered because subject matter of application was overtaken by bankruptcy of judgment debtor – where last step in proceeding was the making of an order and more than two years had passed from that date – where proceeding deemed dismissed – where the only outstanding issue in the dismissed proceeding was a question of costs – where substantial delay – whether in the interests of justice to reinstate

Legislation Cited:

Bankruptcy Act 1966 (Cth) s 58

Court Procedures Act 2004 (ACT) s 5A
Court Procedures Rules 2006 (ACT) rr 6, 75, 76, 1706, 2003, 2006, 2010A, 2201, 2300, 1706

Limitation Act 1985 (ACT) s 14

Cases Cited:

Ainslie v Ainslie [1927] HCA 23; (1927) 39 CLR 381

Barry Thomas Blunden v Commonwealth of Australia [2014] ACTSC 123
Bell v Bell (1954) 73 WN (NSW) 7
Brisbane South Regional Health Authority v Taylor [1996] HCA 25; 186 CLR 541
Butler v Daood [2017] ACTSC 253
Caruso v Jafer & Anor (Unreported, Supreme Court of Victoria, Mandie J, 18 June 1998)
Doyle v Hall Chadwick[2007] NSWCA 159
Equuscorp Pty Limited v Lah [2009] ACTSC 113
Laws v Web Scaffolding [2010] ACTCA 3
Mander Forklift Pty Ltd v Singles [2014] ACTCA 44
Michael Wilson & Partners Limited v Nicholls [2011] HCA 48; 244 CLR 305
Michael Wilson & Partners Limited v John Forster Emmott [2011] EWHC 1441 (Comm)
Muirhead v Uniting Church in Australia Property Trust [1999] QCA 513
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] HCA 6; 186 CLR 622
Remilton v CML Assurance (1907) 24 WN (NSW) 177
Rumble v GPT Re Ltd [2012] ACTSC 39; 6 ACTLR 257
Sophron v Nominal Defendant (1957) 96 CLR 469
Stefek v Garnama Pty Ltd [2014] ACTSC 140
Stollznow v Calvert [1980] 2 NSWLR 749

Tenth Vandy Pty Ltd v Natwest Markets Australia Pty Ltd [2007] VSCA 75

Parties:

Michael Wilson & Partners Limited (Judgment Creditor)

Robert Colin Nicholls (First Judgment Debtor)

David Ross Slater (Second Judgment Debtor)

Temujin Services Limited (in liquidation) (Third Judgment Debtor)

Temujin International Limited (Fourth Judgment Debtor)

Temujin International FZE (Fifth Judgment Debtor)

John Forster Emmott (First Joined Party)

Effective Funds Management Pty Limited (Second Joined Party)

Representation:

Counsel

D Bennett QC with R Thomas (Plaintiff)

J Baird (First Joined Party)

B Glare (Second Joined Party)

Solicitors

Michael Wilson & Partners (Plaintiff)

Duggan Legal (First…

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Details
Case
[2021] ACTSC 128
Decision Date

CaseChat Overview and Summary

In the case of Michael Wilson & Partners Ltd v Nicholls & Ors, the dispute involved the enforcement of a judgment debt in the Australian Capital Territory against various entities and individuals, including Mr Emmott, Mr Slater, and the Temujin Entities. The proceedings stemmed from an application by the Judgment Creditor to register a New South Wales judgment in the Australian Capital Territory, which was registered on 22 May 2015. This was followed by an application in August 2015 seeking possession of a property owned by Mr Slater, along with other orders affecting the interests of EFM and Westpac. The legal issues revolved around whether the enforcement of the judgment debt should be prevented due to an equitable principle preventing double satisfaction, and whether the Judgment Creditor was subject to a judgment debt in favour of Mr Emmott, which Mr Emmott sought to enforce against the Judgment Creditor. The court had to determine whether the proceedings should be dismissed due to the bankruptcy of Mr Slater and the subsequent vesting of his property in the trustee in bankruptcy.

The court considered the procedural history of the case, noting that the August 2015 Application was heard by Mossop AsJ, who reserved judgment on 16 December 2015. Mr Slater became bankrupt on 23 December 2015, and the Ainslie Property vested in his trustee in bankruptcy. Despite this, the proceedings continued, and on 7 June 2016, Mossop AsJ heard directions from the parties. The court examined whether it was in the interests of justice to reinstate the proceedings, given that they had been deemed dismissed due to the lapse of time and the bankruptcy of Mr Slater. The court concluded that it was appropriate to reinstate the proceedings to address the outstanding question of costs, given the substantial delay and the unique circumstances of the case.

The court granted an order to reinstate the proceedings to determine the costs incurred by Mr Emmott in relation to the August 2015 Application. The court reasoned that it was in the interests of justice to address the question of costs, as the only outstanding issue in the dismissed proceeding was the matter of costs. The decision highlighted the need for careful consideration of procedural rules and the importance of ensuring that proceedings are not dismissed without proper examination of all relevant factors, especially in cases involving bankruptcy and equitable principles.

The final orders of the court included reinstating the proceedings to determine the costs incurred by Mr Emmott in relation to the August 2015 Application and directing the parties to provide further information and submissions regarding the costs. The court's decision underscored the importance of procedural fairness and the need to address outstanding issues in legal proceedings, even in the face of complex circumstances and significant delays.

Orders

Orders of the court

See [85]

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The Third, Fourth and Fifth Judgment Debtors will collectively be referred to as the ‘Temujin Entities’. All five judgment debtors were ordered to pay to the Judgment Creditor what equated in Australian dollars to more than $1.3 million and more than $700,000 in interest (Judgment Debt). The substantive litigation in the Territory was commenced in May 2015 by an application filed by the Judgment Creditor to register the NSW Judgment. That occurred on 22 May 2015 in accordance with r 2010A of the Rules. The reason for registering the judgment in the Territory was because Mr Slater owned a house in the suburb of Ainslie in the Territory (the Ainslie Property). Once the NSW Judgment was registered, the Judgment Creditor filed, on 13 August 2015, an application in proceeding (August 2015 Application). The orders sought in the August 2015 Application included an order pursuant to r 2201 of the Rules for possession of the Ainslie property. Other orders sought affected the interests of a company that had lodged a caveat in respect of the Ainslie Property, namely Effective Funds Management Pty Ltd (EFM), and Westpac Banking Corporation (Westpac), who at that time held a registered mortgage over the Ainslie Property. The August 2015 Application was opposed by Mr Slater on the basis that there had been satisfaction of the Judgment Debt by a joint and several tortfeasor, namely Mr John Forster Emmott, through arbitration proceedings in the United Kingdom (UK Arbitration proceedings). Mr Emmott was formerly either employed by, or in partnership with, the Judgment Creditor. The argument by Mr Slater involved whether the enforcement of the Judgment Debt, obtained by the Judgment Creditor against him in the Territory, should be prevented because of the application of an equitable principle which prevents double satisfaction. In addition, Mr Emmott sought to intervene, arguing that the Judgment Creditor was in turn the subject of a judgment debt (including indemnity costs) obtained through the UK Arbitration proceedings in favour of Mr Emmott: see Michael Wilson & Partners Limited v John Forster Emmott [2011] EWHC 1441 (Comm). A subsequent decision in relation to quantum was handed down by the UK Arbitration Tribunal in September 2014. The arbitral award was registered as a judgment in the High Court in the UK on 26 June 2015. Mr Emmott’s evidence in these proceedings, through his legal representative, asserted that in 2015, Mr Emmott was seeking to register in the Territory the judgment that he had registered in the UK against the Judgment Creditor. Mr Emmott asserted that any monies obtained pursuant to enforcement of the NSW Judgment in the Territory by the Judgment Creditor against Mr Slater should in fact be paid to him. On 21 August 2015, three further parties were joined to the proceedings: Subsequently, Mr Nicholls and Mr Slater both entered into bankruptcy, and Mr Nicholls later died. The three Temujin Entities went into liquidation. The Ainslie Property was also sold (in 2019) and Westpac’s interest was fully discharged at that time. On 5 June 2020, Westpac was removed as a party in the proceeding. That is how it comes to be that Mr Emmott and EFM are now the only respondents in the present dispute.

Ratio Decidendi

Legal Principle Established

The August 2015 Application was opposed by Mr Slater on the basis that there had been satisfaction of the Judgment Debt by a joint and several tortfeasor, namely Mr John Forster Emmott, through arbitration proceedings in the United Kingdom (UK Arbitration proceedings). Mr Emmott was formerly either employed by, or in partnership with, the Judgment Creditor. The argument by Mr Slater involved whether the enforcement of the Judgment Debt, obtained by the Judgment Creditor against him in the Territory, should be prevented because of the application of an equitable principle which prevents double satisfaction. In addition, Mr Emmott sought to intervene, arguing that the Judgment Creditor was in turn the subject of a judgment debt (including indemnity costs) obtained through the UK Arbitration proceedings in favour of Mr Emmott: see Michael Wilson & Partners Limited v John Forster Emmott [2011] EWHC 1441 (Comm). A subsequent decision in relation to quantum was handed down by the UK Arbitration Tribunal in September 2014. The arbitral award was registered as a judgment in the High Court in the UK on 26 June 2015. Mr Emmott’s evidence in these proceedings, through his legal representative, asserted that in 2015, Mr Emmott was seeking to register in the Territory the judgment that he had registered in the UK against the Judgment Creditor. Mr Emmott asserted that any monies obtained pursuant to enforcement of the NSW Judgment in the Territory by the Judgment Creditor against Mr Slater should in fact be paid to him. On 21 August 2015, three further parties were joined to the proceedings: Subsequently, Mr Nicholls and Mr Slater both entered into bankruptcy, and Mr Nicholls later died. The three Temujin Entities went into liquidation. The Ainslie Property was also sold (in 2019) and Westpac’s interest was fully discharged at that time. On 5 June 2020, Westpac was removed as a party in the proceeding. That is how it comes to be that Mr Emmott and EFM are now the only respondents in the present dispute. On 16 December 2015, Mossop AsJ (as his Honour then was) heard the August 2015 Application made by the Judgment Creditor. His Honour reserved judgment on that day. On 23 December 2015, Mr Slater was made bankrupt in the UK (following a successful application made by the Judgment Creditor). The trustee then took steps in the Federal Court of Australia to be recognised as the trustee in bankruptcy in Australia. Under s 58 of the Bankruptcy Act 1966 (Cth), upon Mr Slater becoming bankrupt, the Ainslie Property vested in his trustee in bankruptcy. On 7 June 2016, the parties came before Mossop AsJ for directions. Mr Vivekananda, counsel then representing the Judgment Creditor, had the following relevant exchange with Mossop AsJ (emphasis added): There was then an exchange between counsel for the Judgment Creditor and Mossop AsJ as to the time required for an adjournment, before the transcript continues: His Honour then later confirmed: After hearing from counsel for the Judgment Creditor, Mossop AsJ then proceeded to hear from Ms Bristol, the legal representative for Westpac and from Ms Mense, the legal representative for EFM (emphasis added):