Michael Wilson & Partners Limited v Sinclair

Case [2016] NZCA 376

IN THE COURT OF APPEAL OF NEW ZEALAND
CA205/2016
[2016] NZCA 376
BETWEEN

MICHAEL WILSON & PARTNERS LIMITED
Appellant

AND

THOMAS IAN SINCLAIR
Respondent
Hearing:

13 June 2016

Court:

Harrison, Lang and Toogood JJ

Counsel:

K P Sullivan for Appellant
Respondent in Person

Judgment:

5 August 2016 at 11.45 am

JUDGMENT OF THE COURT

A        The appeal is allowed. 

B        The order staying enforcement in the High Court is set aside.

CThe proceeding is remitted to the High Court to determine the issue of whether the appellant has filed a sufficient memorial to satisfy the requirements of s 56(3) of the Judicature Act 1908.

DThe respondent must pay the appellant’s costs for a standard appeal on a band A basis together with usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Harrison J)

  1. Michael Wilson & Partners Ltd (MWP) appeals against the High Court’s interim stay of its enforcement of seven foreign judgments and orders against a residential property owned by the respondent, Thomas Sinclair.[1]  This prosaic subject matter belies the intensity of a decade of litigation between parties who were once business associates but have since fallen bitterly out.  Courts and arbitral tribunals in the United Kingdom, Australia, the United States, the British Virgin Islands and the Bahamas have been their legal battleground over ownership of shares in Max Petroleum Plc, an oil company operating in Kazakhstan. 

  2. The particular event which has engaged New Zealand’s jurisdiction is tangential to this primary dispute.  During the course of their litigation Mr Sinclair brought a proceeding against another party, John Emmott, in the Bahamas seeking a declaration of his ownership of the Max shares.  The issue of who owned those shares was already the subject of an arbitral proceeding in London between MWP and Mr Emmott.  At first instance Mr Sinclair obtained an order joining MWP as an additional defendant in the Bahamas.  However, MWP successfully appealed against joinder to the Bahamas Court of Appeal.  Mr Sinclair’s appeal to the Privy Council failed.  He was ordered to pay MWP’s costs on both appeals and on four subsequent unsuccessful applications.  Six costs judgments were entered in MWP’s favour accordingly, followed by a registration order made in the United Kingdom.[2]

    [2]Details of these orders are set out by Mallon J at [19]–[27].

  3. MWP applied to execute the judgments against Mr Sinclair’s property in Wellington.  An interim charging order was then in force against the title and remains in force by consent.  Mallon J dismissed MWP’s application.  She was satisfied that Mr Sinclair would suffer a substantial injustice.  Execution would deprive him of the benefit of an order made in the England and Wales High Court in London staying enforcement of the same judgments.[3]  MWP now appeals.

Facts

[3]Michael Wilson & Partners Ltd v Sinclair [2015] EWHC 2847 (QB) [UK stay].

  1. Both parties swore affidavits respectively supporting and opposing MWP’s application.  A large volume of documents was produced, including a full…

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AGLC
Michael Wilson & Partners Limited v Sinclair [2016] NZCA 376
Case
[2016] NZCA 376
Decision Date

CaseChat Overview and Summary

The matter before the court involved Michael Wilson & Partners Limited (MWP) and Sinclair, with the primary dispute centering on the registration and enforcement of a foreign judgment obtained by MWP in New Zealand. The case was heard in the High Court of Australia. MWP sought to enforce the judgment against Sinclair, who resisted the application on the basis that he was entitled to an indemnity for the costs related to a freezing order over shares in Max.

The central legal issues that the court had to address were whether the High Court had the power to enforce a foreign judgment and whether Sinclair had demonstrated sufficient cause to prevent the enforcement of the judgment. Specifically, the court needed to determine if the potential entitlement to an indemnity for costs constituted a valid ground for resisting the enforcement of the judgment. This involved interpreting Section 56 of the relevant legislation and assessing whether the circumstances presented by Sinclair met any of the established exceptions to enforcing a foreign judgment.

The court found that, pursuant to Section 56, the High Court had the authority to enforce the foreign judgment once the memorial was properly filed. The burden then shifted to Sinclair to demonstrate sufficient cause why the execution should not proceed. The court noted that the exceptions to enforcing a foreign judgment include situations where the judgment was obtained by fraud, enforcement would contravene public policy, or the judgment was procured contrary to natural justice. Mallon J concluded that Sinclair's argument regarding the indemnity for costs did not align with these established exceptions. Consequently, Sinclair failed to discharge the required burden under Section 56(4) to show sufficient cause against the enforcement of the judgment.

The final orders of the court affirmed the power of the High Court to enforce the foreign judgment and rejected Sinclair's grounds for resisting the enforcement. This decision reinforced the settled exceptions to enforcing foreign judgments and upheld the enforcement of the New Zealand judgment against Sinclair.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

Section 56 provides:56 Memorials of judgments obtained out of New Zealand may be registered(1)Any person in whose favour any judgment, decree, rule, or order, whereby any sum of money is made payable, has been obtained in any court of any of Her Majesty’s dominions may cause a memorial of the same containing the particulars hereinafter mentioned, and authenticated by the seal of the court wherein such judgment, decree, rule, or order was obtained, to be filed in the office of the High Court; and such memorial being so filed shall thenceforth be a record of such judgment, decree, rule, or order, and execution may issue thereon as hereinafter provided.(2)Every seal purporting to be the seal of any such court shall be deemed and taken to be the seal of such court until the contrary is proved, and the proof that any such seal is not the seal of such court shall lie upon the party denying or objecting to the same.(3)Every such memorial shall be signed by the party in whose favour such judgment, decree, rule, or order was obtained, or his attorney or solicitor, and shall contain the following particulars, that is to say: the names and additions of the parties, the form or nature of the action or other proceeding, and, when commenced, the date of the signing or entering-up of the judgment, or of passing the decree, or of making the rule or order, and the amount recovered, or the decree pronounced, or rule or order made, and, if there was a trial, the date of such trial and amount of verdict given.(4)The court or any Judge thereof, on the application of the person in whose favour such judgment, decree, rule, or order was obtained, or his solicitor, may grant a rule or issue a summons calling upon the person against whom such judgment, decree, rule, or order was obtained to show cause, within such time after personal or such other service of the rule or summons as such court or Judge directs, why execution should not issue upon such judgment, decree, rule, or order, and such rule or summons shall give notice that in default of appearance execution may issue accordingly; and if the person served with such rule or summons does not appear, or does not show sufficient cause against such rule or summons, such court or Judge, on due proof of such service as aforesaid, may make the rule absolute, or make an order for issuing execution as upon a judgment, decree, rule, or order of the court, subject to such terms and conditions (if any) as such court or Judge thinks fit.(Emphasis added.) Providing a memorial is filed in accordance with s 56(3),[19] the High Court has power to order execution of the foreign judgment. The onus then shifts to the judgment debtor to “show sufficient cause” why execution should not issue.[20] Mr Sinclair sought to discharge this onus on the ground that he would be entitled to an indemnity for the costs pursuant to an undertaking given by MWP when the freezing order was made over the Max shares. Mallon J found that Mr Sinclair had failed to discharge his burden under s 56(4) of showing sufficient cause why execution should not issue. His opposition did not fall within any of the settled exceptions to recognising a judgment of a foreign court of competent jurisdiction as final and conclusive,[21] identified by Tipping J in Kemp v Kemp as being where the judgment was obtained by fraud, its enforcement would be contrary to public policy, or the judgment was obtained contrary to natural justice.[22] While it is conceptually possible for a party to raise something else which may be regarded as sufficient cause,[23] Mallon J was not satisfied that Mr Sinclair’s ground satisfied the conventional criteria.[24] [21]HC decision, above n 1, at [48]–[49].[22]Kemp v Kemp, above n 20, at 458.[23]At 460.[24]HC decision, above n 1, at [49].

Ratio Decidendi

Legal Principle Established

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