Michael Wilson & Partners Limited v Emmott - [2023] NZHC 2059

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2016-485-000722

[2023] NZHC 2059

BETWEEN
MICHAEL WILSON & PARTNERS LIMITED

Applicant

AND

JOHN FORSTER EMMOTT

Respondent

On the Papers

Counsel:

K P Sullivan for Applicant Respondent in person

Judgment:

4 August 2023

JUDGMENT OF ELLIS J

[1] Michael Wilson & Partners Ltd (MWP), an English registered company, is a law firm with offices in Azerbaijan and Kazakhstan. Mr Emmott is a former employee and director of MWP, who is alleged to have diverted the clients and business of MWP to a partnership he had formed with two others, called the Temujin Partnership. As a result, there has been years of cross-jurisdictional litigation between the parties. It seems the overseas litigation continues, unabated.1

[2] This judgment relates to the question of costs in relation to the New Zealand offshoot of that litigation.

1 A cursory search of reveals some 10 judgments issued involving the parties since the beginning of 2022.

MICHAEL WILSON & PARTNERS LTD v EMMOTT [2023] NZHC 2059 [4 August 2023]

The litigation in New Zealand

[3] Following an arbitral award made in his favour in 2014, Mr Emmott obtained a judgment recognising the award in England and Wales (the Burton Order).2 Under the award MWP was obliged to pay to Mr Emmott £3,209,213 and USD$841,213.3

[4] In 2016, Mr Emmott made an application under the Reciprocal Enforcement of Judgments Act 1934 (REJA) to have the order registered, and therefore recognised, in New Zealand. On 14 October 2016, Clark J ordered that the Burton Order and judgment be registered here.4

[5] The significance of this was that by registering the Burton Order here, Mr Emmott was then able to intervene in enforcement action being taken by MWP against Mr Thomas Sinclair in this country.

[6] Mr Sinclair is a New Zealand chartered accountant who—as a result of various overseas’ judgments and orders—owed a judgment debt to MWP. MWP embarked on recognising and enforcing the judgments in New Zealand under the Judicature Act 1908.5 Mr Sinclair was the owner of a large property in Roseneath, which MWP sought to liquidate and apply the net proceeds of sale to the debt owed.6 MWP obtained a Court order for the sale of this property.

[7] As soon as the registration of the Burton Order was ordered by Clark J, Mr Emmott lodged a caveat against the title to the Roseneath property. MVP then applied to have the caveat removed, which was ordered by Associate Judge Smith on 20 December 2016.7 Mr Emmott was ordered to pay costs as a result of this decision but has apparently not done so.8

2      The Original Order was as granted by Justice Burton of the Commercial Court, King’s Bench Division, of the High Court of Justice in England and Wales on 26 June 2015.
3      Interest on both sums running from 1 January 2014 was also payable.
4      Emmott v Michael Wilson & Partners Limited [2016] NZHC 2450

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] NZHC 2059
Decision Date: 4 August 2023

CaseChat Overview and Summary

The case of Michael Wilson & Partners Limited v Emmott [2023] NZHC 2059 involves a protracted legal dispute between Michael Wilson & Partners Limited (MWP), a law firm with offices in Azerbaijan and Kazakhstan, and Mr John Forster Emmott, a former employee and director of MWP. The litigation concerns Mr Emmott's alleged diversion of MWP's clients and business to a partnership he formed, known as the Temujin Partnership, and has resulted in cross-jurisdictional litigation between the parties.

The primary legal issue before the court was the allocation of costs in relation to the New Zealand proceedings, which stemmed from an arbitral award in Mr Emmott's favour, later recognised in England and Wales (the Burton Order). Mr Emmott sought to register the Burton Order in New Zealand under the Reciprocal Enforcement of Judgments Act 1934, enabling him to intervene in enforcement actions being taken by MWP against Mr Thomas Sinclair, a New Zealand chartered accountant. MWP applied to set aside the registration of the Burton Order in New Zealand on various grounds, including fraud and technical defects in the application under the REJA. Although the parties eventually consented to set aside the registration, they could not agree on the allocation of costs.

The court found that the consent to set aside the registration did not mean Mr Emmott conceded any of MWP's grounds for setting it aside. The court declined to delve into the merits of the wider claims and cross-claims, as it was not prepared to take one side's account of the ongoing litigation at face value. The court emphasised the need for caution, especially given the English High Court's recent criticism of MWP for issuing applications without merit and misleading the court. Consequently, the court ordered that costs should lie where they fell.

This decision highlights the importance of exercising caution when adjudicating on complex, cross-jurisdictional disputes and refraining from delving into the merits of wider claims and cross-claims. The court's approach to cost allocation in this case demonstrates its reluctance to take sides in the broader litigation and its preference for leaving the resolution of complex issues to the appropriate forum.

Orders