Michael Wilson & Partners Limited v Sinclair - [2020] NZHC 1819

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2020-485-157 CIV-2020-485-158 CIV-2020-485-159 CIV-2020-485-160

[2020] NZHC 1819

UNDER the Insolvency Act 2006

IN THE MATTER

of the bankruptcy of Thomas Ian Sinclair

BETWEEN

MICHAEL WILSON & PARTNERS LIMITED

Judgment Creditor

AND

THOMAS IAN SINCLAIR

Judgment Debtor

Hearing: 20 July 2020

Counsel:

K P Sullivan for judgment creditor J D Dallas for judgment debtor

Judgment:

24 July 2020

JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

[1] This is an application for orders setting aside four bankruptcy notices, all dated 17 April 2020, served by Michael Wilson & Partners Ltd on Mr Thomas Sinclair on or around that date. The judgments on which the bankruptcy notices are founded were originally foreign judgments, but registered as judgments in New Zealand pursuant to orders dated 14 December 2016 and 23 February 2017. Together, the four bankruptcy notices claim $1,714,791.29 plus interest and costs.

MICHAEL WILSON & PARTNERS LIMITED v SINCLAIR [2020] NZHC 1819 [24 July 2020]

[2] I do not propose to describe the background in any more detail than necessary. For present purposes, it is sufficient to record that Michael Wilson & Partners, its Managing Director, Mr Michael Wilson, Mr Sinclair and a group of his professional colleagues have, for years, been embroiled in an intellectual property dispute arising from a partial break up of Michael Wilson & Partners’ business, in which they were all formerly involved. The scale of the litigation that has been generated is truly astonishing. It has involved claims in several jurisdictions. Courts in those jurisdictions have levelled serious criticism at Mr Wilson, Mr Sinclair and others, calling into question their truthfulness and the veracity of their evidence in strong terms. I do not propose to add to this.

[3] A core component of the dispute was the subject of arbitral proceedings in the United Kingdom. The parties to the arbitration were Michael Wilson & Partners and one of Mr Sinclair’s colleagues, a Mr John Emmott.

[4] The outcome of that arbitration was an award against Michael Wilson & Partners in favour of Mr Emmott. The award was substantial. It was expressed in UK£ and US$. In NZ$ the principal amount is in the order of approximately
$2,292,000.00.1 Costs are still to be dealt with. On any view, they are likely to add substantially to the award.

[5] Apparently, Mr Sinclair provided Mr Emmott with financial assistance in the course of the arbitral proceedings, and the arrangements between them in relation to this are important for Mr Sinclair’s application.

[6] In a nutshell, Mr Sinclair’s case is that he is the assignee of a proportion of the arbitral award against Michael Wilson & Partners, and that his claim exceeds the collective amounts of the judgments against him.

[7] In advancing Mr Sinclair’s case, Mr Dallas relied on three aspects of the evidence.

1 Calculated at an exchange rate of 19.1, published on 6 July 2020.

[8] First, in their affidavit evidence, both Mr…

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.

Continue reading Michael Wilson & Partners Limited v Sinclair

Details

AGLC: Michael Wilson & Partners Limited v Sinclair [2020] NZHC 1819
Case: [2020] NZHC 1819
Decision Date: 24 July 2020

CaseChat Overview and Summary

In the High Court of New Zealand, Associate Judge Johnston heard an application by Thomas Ian Sinclair to set aside four bankruptcy notices issued by Michael Wilson & Partners Limited. The notices were based on four judgments totaling $1,714,791.29 plus interest and costs. The underlying judgments were originally foreign judgments that had been registered in New Zealand. The case involved a long-running intellectual property dispute between Michael Wilson & Partners, its Managing Director Michael Wilson, Thomas Sinclair, and a group of his colleagues. The dispute had generated extensive litigation across several jurisdictions, with the courts often criticising the parties for their conduct.

The legal issues in the case centred on whether Sinclair could set aside the bankruptcy notices on the basis that he was the assignee of a portion of an arbitral award against Michael Wilson & Partners. If Sinclair could establish a triable case that his claim exceeded the judgments against him, the Court would need to consider whether it should stay the bankruptcy proceedings until the broader litigation concluded. The Court needed to examine the evidence presented by Sinclair to determine if he could establish a valid claim against Michael Wilson & Partners, and if the broader litigation justified staying the bankruptcy proceedings.

Associate Judge Johnston found that Sinclair could not establish a triable case that he had a claim against Michael Wilson & Partners by reason of assignment. The evidence presented, including affidavits and a letter, did not support Sinclair’s contention that he had a right to claim against Michael Wilson & Partners. The Court also dismissed Sinclair’s submission that the bankruptcy proceedings should be stayed until the broader litigation concluded. The Court of Appeal had previously ruled that Michael Wilson & Partners was entitled to enforce its judgments without awaiting the outcome of other litigation. The Court found no basis to exercise its jurisdiction to stop Michael Wilson & Partners from enforcing its judgments. Consequently, Sinclair’s application to set aside the bankruptcy notices was dismissed. The Court indicated that it would make a costs order in favour of Michael Wilson & Partners on a standard basis.

Orders