Nicholls v Michael Wilson & Partners Ltd

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New South Wales


Court of Appeal


CITATION: NICHOLLS v MICHAEL WILSON & PARTNERS LIMITED [2010] NSWCA 222
This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S): 26, 27, 28, 29, 30 July 2010
 
JUDGMENT DATE: 
15 September 2010
JUDGMENT OF: Basten JA at 1; Young JA at 114; Lindgren AJA at 190
DECISION: (1) On the motion of the appellants, admit as further evidence pursuant to s 75A(7) of the Supreme Court Act 1970 (NSW)
(a) the second interim award of the London Arbitrators made on 22 February 2010;
(b) the 17th procedural order made by the London Arbitrators on 24 March 2010, and
(c) the Clarification made by the London Arbitrators on 6 April 2010.
(2) On the motion of the respondent, admit as further evidence pursuant to s 75A(7) of the Supreme Court Act 1970 (NSW)
(a) bundle of documents constituting Exhibit JR1, and
(b) bundle of documents constituting Exhibit JR2
each being exhibited to the affidavit of James Malcolm Robinson sworn 18 June 2010.
(3) Allow the appeal from the judgments in the Equity Division delivered on 6 October 2009 and 11 December 2009 and set aside the declarations and orders 1-33 made on 11 December 2009.
(4) Direct that there be a further hearing of the proceedings in the Equity Division, but that the trial not commence until the determination of the appeal against the second interim award of the Arbitral Tribunal made on 22 February 2010 in London or, if the appeal is upheld and the Tribunal required to reconsider its reasons in any respect, until the redetermination has been made.
(5) Dismiss the cross-appeal.
(6) Order that the respondent pay the appellants’ costs, including reserved costs, in this Court.
(7) The costs incurred to date in the Equity Division are to abide the outcome of the further hearing in the Division and are to be determined by the judge conducting the further hearing.
CATCHWORDS: ABUSE OF PROCESS - respondent proceeding in Supreme Court against accessories and in an arbitration in London against the principal wrongdoer - judgment and orders made at trial against the accessories - subsequently principal wrongdoer found liable but only on limited basis in London arbitration - whether abuse of process for respondent to seek on appeal to maintain enforceability of judgment and orders in light of inconsistent arbitration award - APPEAL - reasonable apprehension of bias - trial judge hearing ex parte applications over a lengthy period - confidentiality orders - closed court hearings - other party becoming aware of number and nature of ex parte applications, confidentiality orders and closed court late in the day - Judge refusing to recuse himself - whether fair minded bystander might consider that trial judge might not bring to bear a mind free of prejudice against the party in whose absence affidavits had been read and orders made - CHOICE OF LAW - employees of respondent company incorporated in British Virgin Islands…
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Details
Case
[2010] NSWCA 222
Decision Date

CaseChat Overview and Summary

The appeal concerned proceedings in the Supreme Court of New South Wales brought by the respondent against the appellants, who were alleged accessories to wrongdoing by a principal wrongdoer. The respondent had also commenced arbitration proceedings in London against the principal wrongdoer. Judgments and orders were made at trial in the Supreme Court against the appellants. Subsequently, the principal wrongdoer was found liable in the London arbitration, but only on a limited basis. The appellants argued that it was an abuse of process for the respondent to seek on appeal to maintain the enforceability of the Supreme Court judgment and orders in light of the inconsistent arbitration award.

The court was required to determine several legal issues. These included whether the trial judge’s conduct in hearing ex parte applications over a lengthy period, including making confidentiality orders and holding closed court hearings, gave rise to a reasonable apprehension of bias. Specifically, the court had to consider whether a fair-minded bystander might consider that the trial judge might not bring to bear a mind free of prejudice against a party who became aware of these applications and orders late in the proceedings. The court also had to determine whether the trial judge erred in applying New South Wales law to the respondent's claims in contract, tort, and for breach of fiduciary duty, considering the employees were incorporated in the British Virgin Islands and employed in Kazakhstan. Finally, the court considered issues relating to remedies, including whether exemplary or punitive components could be included in equitable compensation and the appropriateness of certain declarations.

The Court of Appeal allowed the appeal from the judgments and orders of the Equity Division. It found that the trial judge’s conduct in hearing ex parte applications and making confidentiality orders, without the other party's knowledge until late in the proceedings, could lead to a reasonable apprehension of bias. The court also set aside the declarations and orders made by the trial judge. The court directed a further hearing of the proceedings in the Equity Division, but stipulated that this hearing should not commence until the determination of the appeal against the second interim award of the London Arbitral Tribunal, or its redetermination if required. The cross-appeal was dismissed. The respondent was ordered to pay the appellants’ costs in the Court of Appeal, with costs in the Equity Division to abide the outcome of the further hearing.

Orders

Orders of the court

(1) On the motion of the appellants, admit as further evidence pursuant to s 75A(7) of the Supreme Court Act 1970 (NSW)

(a) the second interim award of the London Arbitrators made on 22 February 2010;

(b) the 17th procedural order made by the London Arbitrators on 24 March 2010, and

(c) the Clarification made by the London Arbitrators on 6 April 2010.

(2) On the motion of the respondent, admit as further evidence pursuant to s 75A(7) of the Supreme Court Act 1970 (NSW)

(a) bundle of documents constituting Exhibit JR1, and

(b) bundle of documents constituting Exhibit JR2

each being exhibited to the affidavit of James Malcolm Robinson sworn 18 June 2010.

(3) Allow the appeal from the judgments in the Equity Division delivered on 6 October 2009 and 11 December 2009 and set aside the declarations and orders 1-33 made on 11 December 2009.

(4) Direct that there be a further hearing of the proceedings in the Equity Division, but that the trial not commence until the determination of the appeal against the second interim award of the Arbitral Tribunal made on 22 February 2010 in London or, if the appeal is upheld and the Tribunal required to reconsider its reasons in any respect, until the redetermination has been made.

(5) Dismiss the cross-appeal.

(6) Order that the respondent pay the appellants’ costs, including reserved costs, in this Court.

(7) The costs incurred to date in the Equity Division are to abide the outcome of the further hearing in the Division and are to be determined by the judge conducting the further hearing.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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