Michael Wilson & Partners Limited v Sinclair

Case

[2016] NZCA 376

5 August 2016 at 11.45 am


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. 

    [1]Michael Wilson & Partners Ltd v Sinclair [2016] NZHC 835 [HC decision].

  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 range of judgments from foreign jurisdictions.  Each side sought to place its own favourable interpretation on a convoluted matrix of background facts.  However, it is unnecessary for us to determine any substantive areas of difference. 

  2. We have distilled the following material facts from Mallon J’s fuller recital of them and from related material.[4]

    [4]HC decision, above n 1, at [1]–[32].

  3. MWP provides business consultancy and legal services in Central Asia, Russia and Ukraine.  Its main office is in Almaty, Kazakhstan.  Its registered office is in the British Virgin Islands.  Mr Sinclair is a New Zealand national resident in Bahrain. 

  4. In 2006 MWP initiated an arbitration claim in London against Mr Emmott, who was a former employee, in accordance with an arbitration clause in an employment contract.  The company alleged that Mr Emmott, abetted by Mr Sinclair, had breached his contractual and fiduciary obligations to it and obtained substantial secret profits and other monies.  Its claim related in part to ownership of the Max shares held by a company settled on trust by Mr Emmott.  MWP had obtained in the High Court in London a freezing order against the shares, which has featured in proceedings brought subsequently by Mr Sinclair against MWP.  Mr Sinclair declined MWP’s invitation to join the arbitration as a party for the purpose of ensuring that all claims relating to ownership of the shares were determined conclusively. 

  5. In 2008, while MWP’s arbitral reference against Mr Emmott in London about ownership of the Max shares was under way, Mr Sinclair issued the Bahamian proceeding against Mr Emmott and the trust company.  He sought a declaration of ownership of the Max shares.  Messrs Sinclair and Emmott were business allies and associates.  Mallon J concisely summarised what followed in this way:

    [19]     The application [by Mr Sinclair] to join MWP succeeded at first instance.  MWP appealed to the Bahamian Court of Appeal.  In a decision delivered on 23 April 2008, the Court allowed MWP’s appeal.  It considered that MWP should not be joined to the proceeding because the matter was the subject of arbitration in England which was the natural and appropriate forum to resolve the dispute; the connection of the parties and the matter to the Bahamian jurisdiction was tenuous; there was in fact no dispute as between Mr Sinclair and Mr Emmott as to the ownership of the Max shares and Mr Emmott was only a party in order to seek to bring MWP within the jurisdiction of the Bahamas; and there might be a conflict between the courts of the Bahamas and the arbitration if the proceedings in the Bahamas were allowed to proceed which could lead to more inconvenience and costs for both sides.  The Court of Appeal ordered Mr Sinclair to pay costs to MWP (Order 1).

  6. The Judicial Committee of the Privy Council dismissed Mr Sinclair’s appeal against the Court of Appeal’s decision.  Costs were again awarded against him.  Four subsequent costs orders and certificates were made in MWP’s favour by the Bahamian Court of Appeal and later by the Privy Council on appeals by Mr Sinclair against an originating order that he had taken unnecessary steps to delay enforcement of the first two costs judgments.  The six costs judgments and orders come to around NZ$3 million in total.[5]

    [5]At [24].

  7. In an interim award issued in early 2010 a distinguished arbitral tribunal found, among other things, that Mr Sinclair was the beneficial owner of the Max shares.  Mr Emmott was awarded substantial damages against MWP together with interest and costs.  Mr Sinclair had funded Mr Emmott’s legal expenses.  Mr Sinclair says that MWP’s total liability to Mr Emmott under the award was about £3.2 million, plus US$850,000, interest, and an estimated US$3 million in costs.[6]  MWP alleges that the award was obtained by fraud.

    [6]At [9].

  8. In May 2010 Mr Sinclair issued a proceeding against MWP in the High Court in London seeking damages for his losses allegedly suffered as a result of the freezing order. Mr Sinclair has not taken any steps to prosecute that claim.  Mr Sullivan for MWP points out that Mr Sinclair was not a party to the freezing order; and that, in any event, the owner of the Max shares could have dealt with them at any time on five days’ notice to MWP.

  9. In October 2010 MWP issued a separate proceeding against Mr Sinclair in the High Court in London seeking a declaration of ownership of the Max shares.  It will be recalled that Mr Sinclair had not been a party to the arbitral proceeding between MWP and Mr Emmott.  Mr Sinclair counter-claimed, again for losses allegedly suffered as a result of the freezing order.  In due course MWP’s claim was struck out as a collateral attack on the award.[7]  That decision is however the subject of an appeal to be heard by the English Court of Appeal later this year.  In October 2015 Mr Sinclair discontinued his counter-claim.  He is now liable for MWP’s costs which it claims exceed £283,000.  MWP has paid all costs awards in Mr Sinclair’s favour in the English litigation — at least £229,000.

    [7]Michael Wilson & Partners Ltd v Sinclair [2012] EWHC 2560, [2013] 1 All ER (Comm) 476 at [71].

  10. The last step in the chain of costs awards was a default costs certificate issued by the England and Wales High Court in October 2014.  By that means MWP registered the six previous judgments as judgments and orders of the Queen’s Bench Division.  In October 2015 Whipple J in the High Court stayed execution of the registration order.  We adopt Mallon J’s summary of Whipple J’s reasoning as follows:

    [30]     The Judge went on to consider whether a stay would be granted if another narrower rule was the applicable one.  Under that rule a stay could be ordered if there were “special circumstances which rendered it inexpedient to enforce the [Registration Order]”.  Her Honour considered there were such special circumstances.[8]  This was for the following reasons:

    [8]UK stay, above n 3, at [29].

    (a)There was a “complex web of litigation” surrounding the application for a stay.  MWP had failed in the arbitration.  Various post‑arbitration matters were not completed.  It was important to preserve the position rather than permitting MWP to have an unfair advantage through enforcement of the Bahamian costs orders.[9]

    [9]At [30].

    (b)There was a “real” prospect of Mr Sinclair recovering money from MWP.  There were at least three bases on which Mr Sinclair “might” do so, and all of them were connected to MWP’s claim over the Max shares.  These were by means of:[10]

    [10]At [31].

    (i)the costs order in favour of Mr Emmott in the arbitration (given that Mr Sinclair had funded Mr Emmott’s defence);

    (ii)the inquiry as to damages (pursuant to which loss in value of the Max shares and the costs payable under the Bahamian orders were claimed as damages); and

    (iii)the costs orders in Mr Sinclair’s favour in the United Kingdom proceedings.

    (c)As the Bahamian orders were the subject of the damages claim against MWP, it would be preferable to wait and see whether those costs were recouped in due course rather than ordering them to be paid now.[11]

    (d)It seemed that Mr Emmott had a worldwide freezing order against MWP and that any costs which were paid to MWP would be covered by this order.[12]

    (e)MWP had taken no steps to enforce the Bahamian orders in the United Kingdom because Mr Sinclair had no assets in the United Kingdom.  So long as that remained the case, there would be no prejudice to MWP from a stay.[13]

    (f)The costs payable under the Bahamian orders, if not recouped as damages in the inquiry, might be set off against orders for costs or damages in Mr Sinclair’s favour.[14]

    (Footnotes in original.)

    [11]At [33].

    [12]At [34].

    [13]At [35].

    [14]At [36].

  11. MWP has been granted leave to appeal that decision despite Floyd LJ’s warning of the obstacles in the path to success.[15] 

    [15]Michael Wilson & Partners Ltd v Sinclair CA A2/2015/3554, 25 November 2015.

  12. We should add that in 2006 MWP issued proceedings against Mr Emmott and two others in the Supreme Court of New South Wales.  MWP alleged that the three men misappropriated its assets when setting up a rival business.  The Supreme Court found Mr Emmott and the two others liable for fraud and a conspiracy to defraud.[16]  Appeals to the Court of Appeal and High Court failed.[17]  Mr Sullivan advises that Mr Emmott is jointly and severally liable with his co-defendants to MWP for all its unpaid Australian judgment debts of more than US$12 million, together with an exposure to further liability of between US$25 million and US$47 million. 

    [16]Michael Wilson and Partners Ltd v Nicholls [2009] NSWSC 1033.

    [17]Nicholls v Michael Wilson & Partners Ltd [2010] NSWCA 222, (2010) 243 FLR 177; Michael Wilson & Partners Ltd v Nicholls [2011] HCA 48, (2011) 244 CLR 427.

  13. Mr Sinclair does not own property in his own name in the United Kingdom. Mr Sullivan points out also that there is no stay of enforcement of the six orders in the Bahamas or in Australia, the two other jurisdictions in which the parties have conducted substantial litigation. 

Jurisdiction  

  1. Initially MWP attempted to enforce the seven orders against Mr Sinclair’s property in Wellington in mistaken reliance on the Reciprocal Enforcement of Judgments Act 1934.  As there is no Order in Council under that Act relating to the Bahamas, the enforcement process is governed by s 56 of the Judicature Act 1908.  On 7 July 2015, after some delay, MWP filed a memorial and record of judgments and sought execution under s 56(4).[18]  It now accepts, as Mallon J found, that the memorial was deficient in its terms.  Mr Sinclair contests MWP’s assertion that the defect has now been rectified. 

    [18]HC decision, above n 1, at [40]–[47].

  2. 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.)

  3. 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.  

High Court

[19]For guidance as to requirements, see Ulster Bank Ireland Ltd v Clancy [2014] NZHC 1939 at [8].

[20]Kemp v Kemp [1996] 2 NZLR 454 (HC) at 459.

  1. 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].

  2. However, the Judge applied r 17.29 of the High Court Rules as a jurisdictional ground for staying enforcement of the Bahamian orders.[25]  That rule provides as follows:

    17.29   Stay of enforcement

    A liable party may apply to the court for a stay of enforcement or other relief against the judgment upon the ground that a substantial miscarriage of justice would be likely to result if the judgment were enforced, and the court may give relief on just terms.

    [25]At [50]–[57].

  3. On a generous reading Mallon J was satisfied that the power within r 17.29 extended to staying a proceeding to enforce a foreign judgment.[26]  Alternatively, she held the High Court had an inherent jurisdiction to prevent a substantial miscarriage of justice.[27]  In this respect, the Judge took significant account of Whipple J’s reliance on the related ground of special circumstances to stay enforcement of the costs orders in England.[28]  Mallon J was satisfied also that MWP was adequately protected by the interim charging order over Mr Sinclair’s property, in which his net equity was about NZ$1 million.[29]  

    [26]At [52].

    [27]At [54].

    [28]At [53]–[55].

    [29]At [56].

  4. In the event Mallon J declined to order that execution issue on the judgments and orders.  Instead she granted an interim stay of enforcement of them pending further order of the Court.  She envisaged that her order would be reviewed following determination of MWP’s appeal against the stay order made by Whipple J in the English High Court.

  5. MWP appeals on the grounds that Mallon J erred in, first, concluding that the High Court had power to order a stay under r 17.29; and, second, finding that a substantial miscarriage of justice would likely result if an interim stay were not ordered.

Decision

Judicature Act 1908 

  1. Our starting point for consideration of MWP’s appeal is s 56 of the Judicature Act.  It provides a self-contained regime for enforcing judgments “obtained in any court of Her Majesty’s Dominions”.[30]  The Bahamas is a parliamentary constitutional monarchy headed by Queen Elizabeth II in her role as Queen of the Bahamas.  Accordingly, that status qualifies the Bahamas as a territory under the sovereignty of the Crown. 

    [30]Judicature Act 1908, s 56(1).

  2. Once filed, a memorial of the judgment constitutes a record of the determination in question.  The Court may then make an order “issuing execution as upon a judgment … or order of the court” unless the defendant shows sufficient cause to the contrary.[31]  In this respect we note:

    (1)In circumstances where the foreign judgment is final and binding, the Court’s discretion when examining sufficient cause is circumscribed in the manner identified by Tipping J in Kemp v Kemp to a challenge to the process by which the judgment was obtained, whether by fraud or contrary to natural justice, or to the wider question of enforcement being contrary to public policy.  In this context, as Tipping J observed, the word “may” is essentially enabling or empowering in its effect, allowing execution if sufficient cause is not shown.[32]  

    (2)The power to impose terms and conditions in s 56(4) does not enable the Court to examine through the backdoor the merits of a judgment which would otherwise qualify for registration here.  The Court’s power to impose terms and conditions must relate to the method of timing and execution.[33]  

    (3)Section 56 does not allow the High Court to impeach or examine the overseas judgment on its merits whether for error of fact or law and nor does the discretionary jurisdiction extend to a substantive issue such as whether the defendant has a right of set-off for counter-claim against the judgment creditor. 

    [31]Section 56(4).

    [32]Kemp v Kemp, above n 20, at 459.

    [33]Kemp v Kemp, above n 20, at 460; Platt v Siegel [1918] GLR 70 (SC) at 71; Autoterminal.com UK Ltd v Croy [2006] NZAR 324 (HC) at [14].

  1. We should add that an in personam judgment of a foreign court of competent jurisdiction creates a debt owed by the judgment creditor on which a claim may be brought in the High Court.[34]  Once the plaintiff satisfies the requirements of s 56, that debt is enforceable as if it is a judgment of a New Zealand court.  This result informs the residual process at common law for enforcement of a foreign judgment that cannot be registered under the Reciprocal Enforcement of Judgments Act or filed by way of a memorial under s 56 of the Judicature Act: the judgment must be final and conclusive for a definite sum of money.[35]

    [34]Von Wyl v Engeler [1998] 3 NZLR 416 (CA) at 420.

    [35]Inada v Wilson Neill Ltd (1993) 7 PRNZ 246 (HC).

  2. Before us Mr Sinclair did not challenge the Judge’s conclusion that he had failed to show sufficient cause under s 56.  He did, however, maintain an argument, as noted, that the amended memorial remains defective. 

Rule 17.29 of the High Court Rules

  1. Mr Sinclair was content to endorse the Judge’s reasoning and reliance on r 17.29.  Mr Sullivan noted that Mr Sinclair did not oppose MWP’s application in the High Court on this ground.  Be that as it may, MWP has had an opportunity to address the point fully on appeal.

  2. We are not satisfied that r 17.29 applies for reasons which we can explain shortly.  The High Court Rules are set out in sch 2 of the Judicature Act.  They are made by the Governor-General in Council in consultation with the Rules Committee.[36]  By r 1.4(3)(a) the Rules are expressly subject to, among other things, s 56.  Axiomatically, the Rules are a form of delegated or subordinate legislation. 

    [36]Judicature Act, ss 51B and 51C.

  3. Rule 1.4(3) affirms the constitutional presumption of interpretation that Parliament does not intend subordinate legislation to take primacy over or interfere with the operation of a statute.[37]  Section 56 is the predominant and self-contained statutory provision governing the parties’ rights and obligations when applying to obtain execution of final and binding foreign judgments in New Zealand.  As just explained, the grounds of opposition are strictly confined within settled and largely procedural categories. 

    [37]Combined State Unions v State Services Co-ordinating Committee [1982] 1 NZLR 742 (CA) at 745.

  4. By contrast r 17.29, which is subordinate to s 56, prescribes a different ground for staying enforcement of a New Zealand judgment — that a substantial miscarriage of justice would be likely to result if it was enforced.  This ground expands and contradicts the narrow exception to the right of execution provided by s 56.  To the extent that they differ, s 56 must prevail over r 17.29 and by its terms exclude the High Court’s jurisdiction to invoke the Rules in answer to MWP’s application for execution.

  5. Mallon J was of the view that r 17.29 applied because execution under s 56(4) is permitted “as upon a judgment … or order of the court”.[38]  However, while the foreign judgment is treated for the purposes of s 56(4) as if it were a New Zealand judgment, it is not in law a judgment of the High Court.  For that reason a New Zealand court does not have jurisdiction to award interest on the amount for which judgment is given by the foreign court.[39]  The enforcement of a foreign judgment effectively transforms it by domestic legal machinery into a debt recoverable in New Zealand: it is never of itself a “judgment” within the ambit of a procedural rule governing stays of enforcement of New Zealand judgments.  And even if the position were otherwise, we do not see how a foreign judgment which without recognition has no status in New Zealand law could provide the jurisdiction to invoke r 17.29, which applies to extant judgments of the High Court. 

    [38]HC decision, above n 1, at [52].

    [39]Mikac v Mikac [1979] 2 PRNZ 489 (HC) at 492.

  6. However, if we were wrong in that respect and the High Court did have jurisdiction under r 17.29, we disagree with the Judge that enforcement would be likely to result in a substantial miscarriage of justice to Mr Sinclair.  Mallon J was influenced by the stay of execution of the registration order by the English courts, which have jurisdiction over the Max shares litigation.  The purpose of that order was to invoke the English jurisdiction and enable execution of the preceding six Bahamian costs judgments against assets held by Mr Sinclair in that forum.  In declining MWP’s application Whipple J noted that the costs orders were the subject of damages claims in England by Mr Sinclair against MWP.  In her view the courts should “wait and see whether those costs are recouped as damages in due course” rather than ordering payment now.[40]  The Judge was referring to the possibility that the Bahamian proceedings were an incident of the freezing order, which Mr Sinclair alleged caused him loss or damage relating to the Max shares.[41]  Whipple J referred to this prospect within what she described as the “complex web of litigation” surrounding Mr Sinclair’s application for stay in the United Kingdom.[42]

    [40]UK stay, above n 3, at [33].

    [41]At [31(b)].

    [42]At [30].

  7. We approach the issue from a different perspective.  The Bahamian orders are, we repeat, final, binding and conclusive between the parties, relating solely to litigation in that forum.  The costs awards were made there without any substantive adjudication upon the merits of the Max shares dispute.  They were made because Mr Sinclair abused the process of the Bahamian courts to invoke a jurisdiction which did not exist.  That conclusion and Mr Sinclair’s liability for the costs awarded in the Bahamas are now beyond challenge.

  8. In our judgment the possibility of Mr Sinclair recovering his Bahamian costs from MWP in England as damages is remote, and should not excuse him from satisfying his settled indebtedness to the company.  Whipple J identified three grounds on which it might be arguable that the Bahamian costs orders would possibly be set off against orders for costs or damages going the other way (that is, if they were not recouped as damages relating to the freezing order).  By reference to each we note as follows.  First, Mr Sinclair’s funding of Mr Emmott’s arbitration costs does not give him a separate and direct right of recovery against MWP in England: he was not a party and elected not to participate.  Second, Mr Sinclair, who was not a party to the freezing order, has not prosecuted his application for an inquiry into damages allegedly relating to the freezing order since the proceeding was filed in May 2010.  Third, MWP has paid the costs awarded in Mr Sinclair’s favour in England.

  9. We acknowledge the temptation to follow the English line of preserving the status quo while the litigation between these parties grinds inexorably onwards.  However, we are satisfied that MWP is entitled to execute its final and binding judgments against Mr Sinclair without further delay or awaiting the result of litigation which may never proceed further or conclude in Mr Sinclair’s favour.[43]  Enforcement of MWP’s right should not be suspended indefinitely against the uncertain contingency of future litigation.  And there is no evidence that execution of MWP’s judgments in New Zealand in satisfaction of his indisputable liability to the company would cause Mr Sinclair a substantial miscarriage of justice, or that he would not be able to pursue his claims against MWP in England.

Inherent jurisdiction

[43]Inada v Wilson Neill Ltd, above n 35, at 251–252.

  1. We disagree also with Mallon J that the High Court has an inherent jurisdiction to order a stay in this case.  The Court’s inherent jurisdiction is available as a residual source of power to ensure that it acts justly and equitably but only where its effect does not contradict or contravene existing rules.[44]  In our judgment s 56 must govern MWP’s application, excluding any inherent jurisdiction to decide the issue on other grounds.  In any event, for the reasons just given we do not accept that the jurisdiction, if it existed, could justifiably be exercised in this case.

Result

[44]     Donselaar v Mosen [1976] 2 NZLR 191 (CA) at 192; Smith v Covington Spencer Ltd [2007] NZCA 224, [2008] 1 NZLR 75 at [37].

  1. The appeal is allowed.  The order staying enforcement in the High Court is set aside.

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

  3. Mr Sinclair must pay MWP’s costs for a standard appeal on a band A basis together with usual disbursements.

Solicitors:
WCM Legal, Wellington for Appellant


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