Michael Wilson and Partners Limited v Robert Colin Nicholls & Ors [2009] NSWSC 1033 | Case summary

Michael Wilson and Partners Limited v Robert Colin Nicholls & Ors [2009] NSWSC 1033 | Case summary | Zoe

CATCHWORDS : Equity - Fiduciary obligations - When and to what extent may employees owe fiduciary obligations to employer - Circumstances in which fiduciary obligations may be regarded as 'spent' - Accessorial liability under second limb of rule in Barnes and Addy - Breaches of contract - Secret profits - Diverting business opportunities from former employer to competing business - Confidential information - Plaintiff law firm offering legal services and business consultancy in Kazakhstan brings proceedings against former employees for having furthered their own interests to their employers detriment by various means - Jurisdiction - Enquiry as to whether foreign law applies to determination of matters litigated - Principled approach to determining questions of foreign law - Proceedings involve consideration of several potentially applicable systems of law - Multiplicity and overlapping nature of issues require Court to consider the level of abstraction appropriate to address issues so as to discharge its ultimate mandate of doing justice between the parties - Fraud - Principles which inform the proper approach to whether or not particular conduct is proven to have been fraudulent - Conspiracy to defraud - Principles - Interference with contractual relations-Principles-Causation-Abuse of process - Defendants claim that proceedings amount to an abuse of process and required to be summarily dismissed-Consideration of what amounts to an abuse of process - Case management - Allegations of abuse of process intertwined with principal issues litigated - Efficiently dictates that both the plaintiffs pleaded case as well as the defendant's abuse of process case be litigated together - Causation - Remedies - Constructive trusts - Election - Split election - Nullus commodum capere potest de injuria sua propria - Overriding purpose rule - Achievement of a just, timely and cost-effective resolution of dispute has an effect upon the Court and upon other litigants - Commercial life depends on timely and just payment of money such that those who claim to be entitled to money should know, as soon as possible, whether they will be paid and those against whom the entitlement is asserted should know, as soon as possible, whether they will have to pay - Ethos of Commercial List to determine disputes speedily

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ii. TIL was one of the vehicles (along with TSL and Temujin FZE) through which the partnership business was conducted. Who stands behind MWP 29 Amongst the many cloak and dagger secrecy parameters which have beset this case is the simple question of establishing which person or persons [or structure or structures] are behind Windsor Fine Arts Establishment Ltd [WFA] which is apparently MWP's sole shareholder. 30 Mr Wilson claimed that he did not know who was behind WFA, giving evidence that he did not consult with anyone behind WFA regarding decisions such as the issue of 49,998 shares in MWP and their subsequent cancellation or the commencement of proceedings against the alleged wrongdoers. It is fair to say that Mr Wilson was evasive regarding questions put to him under cross-examination about the 'family structure' [referred to in an affidavit which he had sworn on 6 October 2006], his evidence simply being that the family structure was WFA and going no further. The scale of the proceedings 31 There have been several interlocutory judgments delivered since the commencement of the final hearing and even prior thereto. It is pertinent to observe that the respective parties cases [and most particularly the plaintiff's case] have involved an enormous amount of detail with mountains of documents being placed into evidence and with many overseas witnesses giving evidence; sometimes on video link and sometimes in person. The case management of the proceedings has thrown up enormous difficulties with both parties deploying a variety of forensic tactics usually involving notices to produce and subpoenas but also extending outside of those steps. The defendants' abuse of process cases 32 The defendants have also sought by notice of motion to have the proceedings set aside as an abuse of the process of this Court. The very allegations of abuse of process of this Court are so intertwined with the principal issues being litigated in the proceedings that it has been efficient to permit both the plaintiff pleaded cases as well as the defendants abuse of process cases to be litigated together on the basis that in due course and after final submissions both parameters would be the subject of decision. The abuse of process cases have been carefully considered along with the MWP's cases. As a matter of convenience only, the abuse of process cases are dealt with towards the end of these reasons where they are dismissed. The fiduciary obligation parameter 33 Later in these reasons an extensive examination is undertaken of the authorities which inform when fiduciary obligations will or will not arise, with particular reference to different classes of employee prior to and then after they leave the relevant employ. 34 For present purposes it suffices to be reminded of the following observations:

In particular, the fiduciary is under an obligation, without informed consent, not to promote the personal interests of the fiduciary by making or pursuing a gain in circumstances in which there is "a conflict or a real or substantial possibility of a conflict" between personal interests of the fiduciary and those to whom the duty is owed. Cited by the majority of the High Court in Pilmer v The Duke Group Ltd (in liq) (2001) 207 CLR 165 at 78. Returning to briefly sketch in additional detail of the particular entities and persons who play a part in the narrative of events Michael Wilson & Partners, Ltd (MWP) 35 MWP is a company incorporated in the British Virgin Islands (BVI) in 1998. It has branch offices in Almaty, Kazakhstan and Baku, Azerbaijan. Through its Almaty office, it operates a full service law firm and business consultancy in Kazakhstan, the central Asian region, the Caucasus, Russia and Ukraine. 36 An essential part of MWP's business involves the structuring of investments in Kazakh assets, in particular energy and mineral assets to attract foreign investors, and for listing on a public stock exchange. MWP refers to this aspect of its business as the "Structured Investments Business". 37 This Structured Investments Business has a fee structure which often includes a success fee or commission component and which also includes an opportunity to take equity in the investment. 38 Remuneration arrangements of this nature would be unheard of in this jurisdiction. Such unorthodox business practices would inevitably lead to conflicts of interest and greed, as ultimate remuneration would theoretically be uncapped. Mr Michael Earl Wilson 39 Mr Wilson is the founder and current managing director of MWP since its formation. He was awarded a Bachelor of Laws from Manchester University in 1980 and was admitted as a solicitor in London in 1984, working at Baker and McKenzie. In 1991 became a partner at Baker and McKenzie eventually establishing a practice branch in the Central Asia region. 40 In 1998, Mr Wilson left Baker and McKenzie to establish MWP on or about 14 July 1998. At MWP, Mr Wilson has continued a practice in commercial law. Mr Robert Colin Nicholls 41 Mr Nicholls is an Australian barrister, admitted to the Barrister's Roll in New South Wales. Most of his legal career has been spent at Freehills, where he had been a partner. 42 Mr Nicholls was employed as a senior associate by MWP from 24 April 2004. On 31 January 2006 Nicholls provided Mr Wilson one month's notice of the termination of his employment with MWP. Mr Nicholls ceased employment with MWP on 1 March 2006. Mr David Ross Slater 43 Mr Slater is a solicitor admitted to practise in New South Wales. 44 Mr Slater was employed by MWP from 1 September 2005. He left the firm on 23 December 2005 and never returned. Mr John Forster Emmott 45 Mr Emmott is a solicitor admitted to practise in England and Wales and also New South Wales. Mr Emmott 's contract 46 The contract with Mr Emmott provided that on and from 7 January 2002 he would become a director and full-time employee of MWP and would be subject to the usual partnership obligations and duties of cooperation, disclosure and good faith in carrying on business in common with MWP with a view to making profit. 47 Following the recitals the agreement recorded the following:

"TSL is a firm that we use from time to time in effect to in effect facilitate transactions. TIL is a functioning law firm to both onshore and offshore clients. For example, we've been approached to, and in essence, coordinating a listing on AIM for a KZ entity. TSL in those circumstances will, in essence, facilitate the appointment of various parties such as advisors, brokers et cetera and coordinate and manage the whole process. TIL may provide legal services in terms of due diligence alongside counsel for the PLC. In return TSL will receive a monthly management fee and a percentage of the common shares that are issued. TSL may also from time to time introduce various business opportunities to various parties and take a fee for such an introduction. TSL last year was appointed to seek a purchaser for a large oil and gas asset in Kazakhstan which, unfortunately, was sold to another party. The fee there was a small monthly fee and a large success fee." [cf: PX 35 - E-mail from Mr Slater to Mr Phillip Shepherd QC] Temujin International Limited (TIL) 52 TIL, the fourth defendant, was incorporated in the BVI and is the trustee of the Temujin International (Trading) Trust (the Trust). TIL was established by Messrs Nicholls, Slater and Emmott on or about 19 December 2005 and operates as business advisor, agent and arranger and provides legal services. A Trust Deed executed on or about 20 December 2005 established the Trust. TFZE 53 TFZE, the fifth defendant, was incorporated in the Free Trade Zone of Ras Al Khaimah in the United Arab Emirates (UAE) also on 8 March 2006. It operates as a service company and provides financial and other services to TIL and clients in the UAE. Mr Nicholls has been a manager of TFZE since that time. 54 Mr Nicholls is the legal owner of shares in TFZE which he holds on trust for TIL. "FZE" stand for Free Zone Establishment and granted under of authority of the UAE. Shaikenov & Partners LLP (Shaikenov LLP) 55 Shaikenov LLP, the sixth defendant is a Kazakhstani limited liability company that operates as a full service law firm in Almaty, Kazakhstan. Its principal is Mr Arman Shaikenov [Shaikenov]. 56 As already indicated, during address Mr Walton [leading counsel for the plaintiff] made clear that the sixth defendant although originally served, had played no part in the proceedings and had not been subsequently served with later emanations of the Commercial Statement. In consequence the plaintiff accepted that there was no case against the sixth defendant. Temujin Holdings Ltd (THL) 57 THL, the seventh defendant, was incorporated in the Commonwealth of the Bahamas on 15 September 2006 as Arcadian Overseas Inc and changed its name to THL on 19 October 2006. Mr Slater wholly owns this entity. 58 It is the company into whose bank accounts all monies are now paid by the clients of TIL. It operates as a service company and for a fee provides administrative and bookkeeping support services to TIL pursuant to an Administration Support Agreement with TIL dated 9 November 2006. 59 No appearance has been filed for THL but leave to proceed against this defendant was granted by the court on 30 May 2008 pursuant to UCPR 11.4. 60 During the hearing Mr Slater gave evidence that Mr David Risbey is the owner of THL and a director of that company. 61 Close to the final minutes of the final address in reply by the plaintiff, Mr Walton sought leave to tender an affidavit filed in the proceedings by the defendants during an interlocutory stage. This is said to have been an affidavit made by Mr Slater which had been overlooked by the plaintiff during the final proceedings and in which affidavit Mr Slater apparently conceded that he is in fact the beneficial owner of the shares in THL. 62 The significance of the new evidence would go to the plaintiff claim to relief in relation to THL in that it seeks a constructive trust over its shares which it now wishes to contend are held by Mr Slater 63 Mr Slater was not cross-examined to suggest any such thing and has long departed from the witness box. The application to tender material parts of this affidavit was objected to on behalf of all the defendants who had taken an active role in the proceedings. The Court indicated that a determination as to whether or not the tender would be permitted would be made privately and that the decision would be announced in the final judgment. 64 The decision rejects the tender. It would have been necessary to put the matter to Mr Slater in order to permit him to respond. There could be any number of reasons to explain the suggested inconsistency. The dictates of natural justice require that the tender be rejected there not even having been an application to re- call Mr Slater. The principles: fraudulent conduct 65 There is a plethora of authority in support of the proposition that the Court is bound to see that a case of fraud is clearly proved. An allegation of fraudulent intent is one of the most serious allegations capable of being made. Actual dishonesty is said to be "the hallmark of fraud". The gravity of the allegation has been said to be such that whereas section 140(1) of the Evidence Act 1995 (NSW) stipulates a single standard of proof for all civil cases, namely the balance of probabilities, Section 140(2) preserves the doctrine in Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-362; Pedler v Richardson (unreported, Supreme Court of NSW, 16 October 1997, Young J) at 10-11. See also McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315, 319. More recently in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170 the High Court has put the matter in the following terms:

"[145] The same is true of fiduciary duties [ Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41 at 97, per Mason J], although it is necessary to distinguish between an employee's contractual duty of good faith and loyalty and such if any fiduciary duty as he or she may owe to their employer [ Nottingham University v Fishel (QBD) [2000] ICR 1462 at 1490, per Elias J]. Some employees, particularly senior employees, do owe fiduciary duties to their employers [see, for example, Reading v Attorney General [1951] AC 507 at 517 per Lord Normand; Industrial Development Consultants Ltd v Cooley [1972] 1 WLR 443; Timber Engineering Co Pty Ltd v Anderson [1980] 2 NSWLR 488; Angus & Coote Pty Ltd v Render (1989) 16 IPR 387; State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (unreported, Supreme Court of NSW, O'Keefe CJ in Comm D, 14 September 1994); Colour Control Centre Pty Ltd v Ty (1996) 39 AILR s5-058 (Santow J) at 4,318-4,320; EFG Australia Ltd v Kennedy [1999] NSWSC 922 (Hodgson CJ)); Francis v South Sydney District Rugby League Football Club Ltd [2002] FCA 1306 [265]; Canadian Aero Services Ltd v O'Malley (1973) 40 DLR 3d 371 at 391; Guth v Loft (1939) 5 A 2d 503]. But others do not. The scope of an employee's fiduciary duties to the employer depends as much as anything upon the nature and terms of the employment. "The fiduciary relationship, if it is to exist at all, must accommodate itself to the terms of the contract so that it is consistent with and conforms to them. The fiduciary relationship cannot be superimposed upon the contract in such a way as to alter the operation which the contract was intended to have according to its true construction". [ Hospital Products Ltd v United States Surgical Corporation above at 97, per Mason J; Nottingham University v Fishel (QBD) [2000] ICR 1462 at 1491-2, per Elias J]" 73 In Francis v South Sydney District Rugby League Football Club Ltd [2002] FCA 1306, Lindgren J also accepted the analysis of Elias J in Nottingham University, although his Honour did not find that a relevant fiduciary duty existed (that case being one where there was an attempt to impose such a duty upon the employer). His Honour said:

(referred to with apparent approval in Pilmer at [70]; and cf Meagher, Gummow and Lehane, Equity: Doctrines and Remedies (3rd ed, 1992) at 130). It is the lack of this "critical" undertaking by Souths to act "for or on behalf of or in the interests of" Francis with respect to the matters pleaded that signifies that Souths was not a fiduciary in its relationship with Francis. [Lindgren J then referred to paragraph 269 from Mason J's observations in Hospital Products ] Canadian Aero Service Ltd v O'Malley [1974] SCR 592, 40 DLR (3d) 371 74 The seminal judgment of the Supreme Court of Canada in Canadian Aero Service Ltd v O'Malley repays the closest of attention. In short the case involved the activities of respectively the President [O'Malley] and Executive Vice President [Zarzycki] of a company called Canaero. The holding was these persons were 'top management' and not mere employees [whose duty to their employer, unless enlarged by contract, consisted only of respect for trade secrets and for confidentiality of customer lists]. The responsibilities of O'Malley and Zarzycki was held to be a larger, more exacting duty which was similar to that owed to a corporate employer by its directors. The position of these two persons as senior officers of a subsidiary, which was a working organisation, charged them with initiatives and with responsibilities far removed from the obedient role of servants. 75 In essence O'Malley and Zarzycki had resigned their positions with Canaoro and proceeded to set up an independent company which negotiated a contract to carry out a particular project which O'Malley and Zarzycki had been pursuing for a considerable time with their previous employer. 76 The issues which arose for consideration involved a determination of the relationship of O'Malley and Zarzycki to Canaoro; the ascertainment of the duty or duties, if any, owed by O'Malley and Zarzycki to Canaoro by reason of the ascertained relationship; the question whether there had been an a breach of duty, if any were as owing, by reason of the conduct O'Malley and Zarzycki in acting through their new company to secure the particular contract; and the question of liability for breach of duty if established. 77 The judgment of the Court delivered by Laskin J included the following observations:

Canadian Aero is an oft-cited authority: see, for example, Green & Clara Pty Ltd v Bestobell Industries Pty Ltd [1982] WAR 1 (Full Court) at 19 per Kennedy J] . ; Pacifica Shipping Co Ltd v Andersen [1986] 2 NZ LR 328 (Davison CJ) at 334, 337-8 . ; Mordecai v Mordecai [(1988) 12 NSWLR 58 at 65] . ; Lord Corporation Pty Ltd v Green [(1991) 22 NSWLR 532-4] . ; Colour Control Centre Pty Ltd v Ty [(1996) 39 AILR 4,316 (Santow J) at 4,319] . ; Natural Extracts Pty Ltd v Stotter [(1997) 24 ACSR 110 (Hill J)] . ; Addstead Pty Ltd v Liddan Pty Ltd [(1997) 25 ACSR 175 (FC of SA) at 195 per Perry J] . ; and in Victoria, Spincode Pty Ltd v Look Software Pty Ltd [(2001) 4 VR 501 (C.A.) at 522-3 per Brooking JA]. . Such cases suggest that the most common situations giving rise to the application of the principles enunciated in Canadian Aero involve directors or senior officers of companies, partners and, on occasion, solicitors. Each category has its own problems and it is not possible to generalise from one to the other: indeed it is not wise to attempt to generalise at all in this area for, as is often pointed out, the existence and scope of fiduciary obligations must always be assessed in the particular context in which they are claimed to arise: Colour Control Centre [at 4,319] . per Santow J. None the less all the cases just mentioned are instructive, each in its own way, and to these one may add the cases dealing with the acquisition by a former partner of what once was a partnership asset: notably Zachariah v Ajay Investments Pty Ltd [(1983) 33 SASR 395] in the Full Court of South Australia . and in the High Court 7 ; compare Metlej v Kavanagh [(1981) 2 NSWLR 339], which must now be read subject to what was said by the High Court in Chan. Examining the status of Mr Nicholls as an employee of MWP 83 The initial approach from Mr Nicholls was made to Mr Emmott who liaised with Mr Wilson. In about late February 2004 Mr Wilson sent an e-mail to Mr Nicholls making the point that the financial expectations of the former were out of MWP's league. More negotiations followed. Then in early March 2004 a formal offer of employment was made by MWP to Mr Nicholls. He was asked to sign that letter of offer to indicate his acceptance of the terms. At the beginning of March 2004 Mr Emmott sent an e-mail to Mr Wilson advising that Mr Nicholls had rung him that very day and would like MWP to increase the offer they had made to $90,000. Thereafter a further offer was made to Mr Nicholls [P X 1 at 168] The terms of that offer were as follows:

"Following our discussions we have pleasure in confirming our offer for you to join this company: You will join MWP with effect from 26 th April 2004 initially based here in Almaty (although there is a possibility we may, at some later stage, ask you to live and work whether on a part or full-time basis, for MWP in one of our other offices or presences i.e. Baku or Atyrau); There will be an initial probationary period of three (3) months, during and after which your performance and continued employment will be reviewed by the Partners; Your salary will be US$90,500 per annum, payable monthly in arrears. You will be entitled to an "offshore" deferred compensation, which will be paid into a designated offshore bank account (we normally help establish accounts for our staff at Brown Shipley (part of KBC Group) in London, where the Firm banks) in an amount to be agreed between us, providing enough to be paid locally to meet your minimum life-style requirements and to give you a defensible local package, given your expatriate status and seniority (probably, 25% onshore and 75% offshore in your case); MWP will consider, once a year, paying you a discretionary bonus, depending on a number of factors, including your performance individually as a very senior lawyer and the overall profitability and success of the Firm; You will be expected to use all reasonable efforts to achieve a minimum of 1,650 billable and about 250-350 non billable tasks hours i.e.: principally relating to marketing business development etc.; Annual leave is twenty (20) working days per year, which will accrue quarterly in arrears; Health: MWP will enrol you in the Interteach Health Insurance Scheme here in Almaty and will reimburse you for the reasonable costs of your medical insurance with an Australian provide (or PPI or BUPA in the UK, should you so wish); Work Permits and Visas: The Firm will use all reasonable endeavours to arrange (at its cost) all necessary work permits and visas required to enable you to practice law with this Firm in Kazakhstan, and elsewhere in the former Soviet Union where we may ask you to work; MWP will reimburse the reasonable cost of the relocation of yourself and your personal belongings to Kazakhstan; MWP will provide you with a furnished apartment in Almaty for one (1) month on your arrival in Kazakhstan, so as to enable you to find your own accommodation of your choosing (at your own cost); MWP will provide you with one (1) economy return airfare to Australia in each year; MWP provides lunch each day for our staff in the office; MWP expects you to respect and maintain strict confidentiality as to all matters, especially dealings the Firm has as to projects, clients and with Government and State Agencies; Three (3) month's prior written notice is required should you decide at any time to leave MWP; You agree that if you leave MWP, you will not approach, solicit or make offers to any of our contacts, clients or staff and will not seek to work on any projects or developments in which we are involved, without our prior consent; and Please sign this letter of offer to indicate your acceptance of the above and return a copy to us." 84 The evidence given by Wilson [T 302] was that on about 1 April 2004 he had sent an e-mail to Mr Nicholls confirming MWP's offer to him to join it. Mr Wilson also gave evidence that he spoke to Mr Nicholls on the same day and that Mr Nicholls had called to confirm that he accepted MWP's revised offer. At that time Mr Nicholls was in Sydney and said that he was calling to confirm that he accepted MWP's offer and was ready and willing to start work as soon as possible and to relocate to Kazakhstan to work for MWP on a full-time basis. [T 302] 85 The evidence given by Mr Wilson in relation to this matter is accepted as reliable. Mr Emmott firmly insisted that notwithstanding the entire time of his employment with MWP for nearly 2 years, there never was any contract of employment between himself and MWP. That denial is without substance. Although there is no evidence of his actually signing the revised offer it is plain that this document bound by him and MWP. He agreed under cross-examination that:

ii. You will be expected to respect and maintain strict confidentiality as to all matters, especially dealings we have has to climb matters, projects and with Government and State Agencies. 92 Mr Slater commenced his employment with MWP on 1 September 2005. 93 A second offer of employment was extended to Mr Slater on 2 December 2005 that emphasised the prohibition on solicitation as well as a three-month notice clause in the event of termination of employment. Mr Slater never accepted this offer. 94 Mr Slater continued working at the firm beyond 16 December 2005 and took holidays on or about 21 December 2005. The genesis of what later became the Cooperation Agreement 95 Whilst it is never simple to define the moment from which point in time discussions commence which will ultimately lead to a conspiracy to defraud an employer, the evidence plainly suggests that it was Mr Slater who, soon after his arrival to work with MWP, drafted a proposal setting out a particular business arrangement. 96 Mr Slater gave evidence that towards the end of September 2005 he drafted a proposal setting out a business arrangement. 97 The proposal involved a BVI company being formed as trustee of a trust that would act as either an arranger or an agent to clients of MWP. 98 The role of "arranger" accurately describes much of the work undertaken by MWP in Kazakhstan and the Central Asia Region. 99 The principal beneficiaries of the trust would be Messrs Wilson, Emmott, Slater or their "nominees" in equal shares of trust property. 100 The proposal also provided that "any proposed payment by shares [for provision of services by MWP] would be directly transferable to the offshore entity upon issue and should be available immediately to dispose of by beneficiaries of the trust". 101 His evidence was that the business proposal was based on his previous experience and roles he had seen performed by various parties in Australia. 102 There are some unusual and suspicious circumstances which surrounded the creation of Mr Slater of the business proposal. 103 Although the proposal was drafted less than a month after Mr Slater began working at MWP, it refers to Mr Slater has an equal beneficiary of the trust referred to in it alongside Messrs Wilson and Emmott. 104 The role of "arranger" as stated in the business proposal accurately described much of the work already undertaken by MWP in Kazakhstan and the adjacent region. 105 Mr Slater's evidence was that he had provided a copy of his business proposal to Wilson and to Mr Sherry [MWP's finance adviser] in late September 2005 as a discussion draft. That evidence is rejected. Mr Wilson steadfastly contended that he had never seen the business proposal. That evidence is accepted as of substance. 106 Indeed Mr Slater, who insisted that he had given Mr Wilson a copy on 29 September 2005 could not recall whether he had sent a copy to Mr Wilson by e-mail or by hand. By contrast, Mr Emmott admitted that he had seen the document at or about that time. [Emmott affidavit paragraph 139] 107 The business proposal exhibited many similarities to the Cooperation Agreement executed on 20 December 2005 that purportedly established the rival business with the principal changes being that Mr Shaikenov LLP was substituted for MWP and the reference to Mr Wilson as beneficiary of the trust was removed. More details regarding the Cooperation Agreement itself is referred to in the reasons below. 108 Mr Slater further gave evidence that in about early December 2005 he began discussing with Messrs Emmott and Nicholls the possibility of establishing a law firm in Kazakhstan. His evidence was that during one conversation with Mr Nicholls, they discussed the need to have an association with the local Kazakhstan lawyer in order to set up a new law firm and that they agreed that Mr Shaikenov may be a good person to be associated with. 109 The Court's findings as to the following events are as follows First meeting - some time between 15 and 20 November 2005 110 The first meeting to between Mr Nicholls and Mr Emmott over lunch at Ramstore sushi restaurant in the "second half" of November 2005. During the lunch, Mr Nicholls told Mr Emmott that he wanted to leave MWP and that he was considering setting up a legal practice in Almaty in which Messrs Slater and Shaikenov might be involved. Mr Nicholls asked Mr Emmott whether he would be interested. Mr Emmott said he "may be interested". Second meeting - some time between 15 and 20 November 2005 111 Shortly after that meeting Mr Nicholls approached Mr Slater and asked him whether he might be interested in doing something else in Almaty if he decided to leave MWP. Slater said "OK". Third meeting, at the Ankara Hotel, on the weekend of 19 - 20 November 2005 112 Messrs Emmott, Nicholls, Slater and Shaikenov met at the Ankara Hotel in Almaty on the weekend of 19-20 November 2005. This meeting lasted "less than several hours". 113 Nicholls said I accept that the conversation included:

"The new venture would pay David, John and himself consulting fees at an agreed level, with any super profits being divided in four equal parts among interests designated by each of 'Arman, David, John' and himself." Fourth meeting at Bar Vogue 114 Messrs Emmott, Nicholls and Slater then met with Mr Shaikenov on Tuesday 22 November 2005 at the Bar Vogue (a bar in Almaty) and Mr Shaikenov was invited to join the enterprise. Although initially suggesting this meeting occurred in December 2005 Mr Slater eventually conceded that it took place on 22 November. [T 1357]. Fifth meeting, at the Ankara Hotel, on the weekend of 26-27 November 2005 115 On the following weekend, 26-27 November 2005, all four men met again at the Ankara Hotel. The meeting lasted "about two hours". According to Nicholls, Slater went through the numbers. Mr Shaikenov was deputized to approach Mr Kachshapov to see if he would provide up to US$200,000 working capital. The name "Temujin" was chosen and it was determined that it would be incorporated in the British Virgin Islands. It was suggested by Mr Nicholls that Temujin be the trustee of a trading trust. 116 On Monday 28 November 2005 Mr Slater set up his new Gmail account: 4/5 (T 1356.27-34). Sixth meeting, with Mr Kachshapov in the first week of December 2005 117 A further meeting took place after the one on 26-27 November 2005 in December 2005 at which Mr Kachshapov was present and at which he agreed to fund the new venture up to US$300,000. [T 1137 - 1138] 118 It was at about this time Mr Slater said he "tore up" his offer of further employment with MWP. 119 On 8 December 2005 Mr Nicholls had his secretary email to him a clean draft Facilitation Agreement used as a precedent by MWP and on 12 December 2005 he had her email him an MWP standard form acquisition due diligence check-list. 120 On 13 December 2005 Mr Slater asked a translator employed by MWP to translate for him a document relating to a US dollar facility offered to "TI Company". 121 On 15 December 2005 Nicholls followed up his earlier enquiries concerning Dubai with an email to Mr Steve Kappelle enquiring about obtaining for himself a business visa for Dubai, entitling him to be a resident of Dubai:

(f) Note also use of the word 'partners' in Schedule 3. 129 A strange feature of the Cooperation Agreement anticipated that the new business would be making profits from its first month in operation. When cross-examined about this, Mr Slater conceded that he assumed that certain amount of work would have been available for Temujin right from January 2006 (T 1377.10-13). However, he could not justify any basis for this assumption (T 1377.18-20). 130 Suspiciously, none of the defendants informed Mr Wilson of the execution of the said documents, the establishment of Temujin and the financing of Temujin by Mr Kachshapov. 131 The projected cash flow in Schedule 3 to the cooperation Agreement (prepared by Mr Slater) anticipated the arrival of Mr Nicholls in March 2006 and of Mr Emmott in July 2006: it reflects one set of drawings for January and February, increasing to two in March and three in July: when cross-examined about the schedule he prepared Mr Slater agreed that the schedule was drafted by him to reflect the expectation he had that Mr Nicholls would join in March 2006 and Mr Emmott in July 2006 (as did in fact happen): T 1376. Finding as to Cooperation Agreement 132 The finding is that the Cooperation Agreement had been deliberately drafted in a way to suggest that Messrs Nicholls and Emmott were not bound to join the new business. On the Court's findings the Cooperation Agreement was an attempt by the parties to it to disguise what really was an immediate partnership involving each of Messrs Nicholls, Slater and Emmott from the time of entry into the Agreement: see Lindley & Banks on Partnership, 17th ed., page 15 [2-13]. The terms of the agreement required each party to be immediately bound to fund the new venture. 133 The structure that was intended to be put in place by the execution of the documents at the meeting on 20 December mirrored in many respects the structure that had been proposed under the Business Proposal that Mr Slater had prepared in September that year, with the principal changes being that Shaikenov LLP was substituted for MWP and the reference to Mr Wilson as a beneficiary of the trust was removed. 134 On the very same day that the meeting at Mr Shaikenov's office took place, 20 December 2005, Mr Slater was continuing to send emails to his personal email address forwarding among others all of the agreements that had been drafted by MWP for UMC. It is no surprise that TIL later emerged with this business. 135 The men then retired to the Bar Vogue where they celebrated the formation of Temujin. Mr Slater's emailing of MWP documents and departure from MWP Emails sent out by Mr Slater in preparation for his departure 136 In December 2005, up to and including 20 December, Mr Slater sent at least seven emails to his newly opened Gmail address which attached copies of a large number of documents that related to the Karamandybas (Roxi) transaction, the Chilisai transaction and the Urals Gold transaction:

(b) Payments to Horizon Services NV totalling €147,232.58. 189 In short, the financial documentation dictates two findings. Firstly, TIL was established entirely on the basis of income derived from former clients of MWP and an interest free loan made by Horizon Services of $US 200,000.00. The loan has been repaid by TIL from earnings also derived from income earned from former MWP clients (as featured in Temujin Holdings' Euro account). 190 Secondly, save for minor items, the bank accounts derived disclosed by Temujin only show income derived from former MWP clients, the very clients that MWP in these proceedings say are the subject matter of the allegations made against the defendants. Big Sky claim against Mr Slater 191 There is a discrete claim based upon a breach of his contract of employment (and negligence) by Mr Slater in advising a client of MWP in October 2005. 192 The facts giving rise to the claim are found in the evidence of Mr Valery Chechulin, a senior Kazakh lawyer with MWP. 193 During the course of his employment with MWP, Mr Slater conducted work for Big Sky Energy Corporation a client of MWP in relation to the termination by it or its subsidiaries Vector Energy West LLP and Kozhan LLP of the employment of Mr Farkhad Shakirov. 194 Mr Shakirov was an employee of Big Sky and the head of its Kazakhstani branch, as well as being the president of Vector Energy West and chairman or president of Kozhan. 195 MWP was engaged on 7 October 2005 to advise in relation to the matter. 196 Mr Slater, who admitted he had no expertise in Kazakh law (T 1477.33), was directed to and did work with a team of local lawyers on the matter including Mr Chechulin. He was directed to consult with MWP's local lawyers to obtain assistance and advice on Kazakhstani law and procedures (T 1477.41). 197 Mr Slater drafted a letter that was subsequently sent on the letterhead of Vector Energy West dated 26 October 2005 addressed to Mr Shakirov. The letter asserted that Mr Shakirov had invalidly appointed himself as president of Vector Energy West. That letter was drafted after Mr Slater formed the view that this was in fact an effective way to deal with the matter of the dismissal 198 Before the letter was sent Mr Chechulin gave Mr Slater certain advice That advice was to the effect that Big Sky or its subsidiaries had purported to terminate Mr Shakirov's employment in violation of Kazakhstani Labour Law, which would have the effect that the Kazakhstani court would restore the employee to his position. 199 Mr Slater ignored Mr Chechulin's advice and Mr Shakirov was dismissed. Big Sky was taken to court by Mr Shakirov and lost. Mr Shakirov was subsequently reinstated 200 Mr Chechulin gave evidence in cross-examination that before the draft letter was sent and after so advising Mr Slater, he endeavoured to contact Mr Wilson both by telephone and email but, as stated above, was unsuccessful on all counts (T 888.38-47). 201 Mr Slater's evidence was that he could not recall the conversations to which Mr Chechulin deposed in his affidavits regarding violations of Kazakhstani Labour Law However, he did not deny that it was given (T 1480.25-31). 202 While not accepting that Mr Wilson was unable to be contacted, Mr Slater was quite unable to recall any occasion when he spoke to or otherwise communicated with Mr Wilson during the time he was working on the matter (T 1478). In re-examination he was taken (at T 1582) to a time record of the matter to suggest that he did in fact communicate with Mr Wilson but in further cross-examination he was again quite unable to recall anything that might have occurred (T 1588-1589). 203 Mr Slater did not disagree that the relevant work on this matter by him took place after 19 October 2005. There was only one entry referring to Mr Wilson in the time record that related to this period and, as noted, even with the assistance of that record Mr Slater recalled no conversation with Wilson on this or any other day in relation to the matter (T 1590.21-22). 204 Mr Barry Swersky, the principal of Big Sky, gave evidence that he withdrew instructions on all matters from MWP and directed them to another Almaty law firm as a result of this incident and demanded a significant discount of the fees that had been rendered by the firm (T 912). 205 Under cross-examination, Mr Swersky stated that did not recalling telling Mr Wilson that he expected him personally to be involved although he was expected some degree of personal involvement (T 922.10-12). He maintained that he had dealt primarily with Mr Slater on a day-to-day basis and that he certainly did not deal with Mr Wilson on a day-to-day basis (T 922.39-41). Decision 206 It is possible to deal with this claim shortly. 207 Clearly Mr Slater was unfamiliar with the law of Kazakhstan, accepting as he did that he had no expertise in that regard. Clearly he was directed to and worked with a team of local lawyers on the matter having been directed to consult with MWP's local lawyers to obtain assistance and advice on the relevant Kazakhstan law and procedures. 208 Furthermore and as the defendants have submitted, the allegation of negligence particularised against Mr Slater focuses upon

ii. events that followed the departure of Mr Slater from MWP's office. 209 The Big Sky retainer letter' of 7 October 2005 was signed by Mr Wilson well before he departed Almaty for Sri Lanka on or about 15 October 2005 and as appears in its initial paragraph, was predicated upon the basis that Mr Shakirov had been dismissed before the engagement of MWP. 210 The proceedings subsequently brought by Mr Shakirov and settled were not initiated until after Mr Slater had ceased to be employed by MWP. 211 In any event, were the claim negligence against Mr Slater governed by the law of New South Wales, it is quite plain that the decisions of the High Court [in Giannarelli & Shulkes v Wraith (1988) 165 CLR 543 and D'Orta-Ekenaike v of Victorian Legal Aid (2005) 223 CLR 1] would stand in the path of the plaintiff claim. Those authorities make clear that a solicitor who is not acting as an advocate enjoys the same immunity as an advocate in respect of advice which leads to a decision affecting the conduct of the case in court. 212 Hence MWP would presumably have been immune from any suit in negligence and it could not, accordingly, have suffered any damage as a result of any 'negligence' on the part of Mr Slater. And as the defendants have submitted, the same immunity would have attached to Mr Slater so as to protect him from any liability in negligence. 213 There is no substance to this claim. Addressing the credit of the major witnesses called Mr Wilson 214 Wilson is plainly enough very aggrieved at what he considered to be a conspiracy practised upon MWP by Messrs Nicholls, Slater, and Emmott. The depth of his obvious anger with these persons cannot be overstated. The evidence before the Court justifies the finding that, to his mind, bringing these persons to account has become a major obsession. The amount of funding of the litigation commenced in many jurisdictions makes this very plain. But it was also very plain through his extensive time spent in the witness box both in giving evidence chief as well as being cross-examined. 215 The Court's assessment of Mr Wilson is that he is a person of high intelligence but also a person whom when crossed, can be a formidable enemy. Part of the problems in assessing his credit in the present massive litigation stems from the depths of his anger at being toyed with' by the above-described threesome. 216 There were many occasions during his cross-examination where it seemed to me that he was over exaggerating the place which MWP in fact had, as a leading firm of lawyers operating in Kazakhstan and its neighbours. This is not to downplay its obvious extensive practice built up over many years. However had it not been for the extraordinarily extensive damaging documentary evidence adduced on behalf of MWP, there would have been a number of major question marks as to the veracity of certain sections of the evidence adduced from Mr Wilson. 217 Some only of the matters which require to be determined include the following:

Q. I'm sorry? A. I did not understand that involved some expanded idea of loyalty, absolute, total, unquestioning loyalty. 223 He steadfastly refused to accept that he had ever been an employee of MWP. Likewise this evidence is rejected. 224 Importantly Mr Nicholls had drafted the Cooperation Agreement such that it provided a six-month period in respect of Mr Emmott and a three-month period in respect of himself. Nor was he prepared to agree that the Cooperation Agreement was intended to and in fact established a partnership between the four gentlemen. [Messrs Nicholls, Slater, Emmott and Shaikenov] [transcript 1147] 225 By an e-mail dated 26 November 2004, Mr Nicholls had travelled through a number of parameters calculated to permit Mr Emmott and himself to be appointed as the local director of the local branch of a foreign company and treating with the parameter that neither Mr Emmott nor Mr Nicholls would be an employee of MWP (although subject to checking, it may be possible for Mr Emmott to continue whatever other relationships for relationships he had with MWP. [see generally Exhibit EX 17]. 226 His evidence that he was unaware of Mr Emmott's intentions as to whether or when, or even if, he would leave MWP, or when, or even if he would subsequently join, TIL is rejected. 227 It is clear enough from an e-mail which he sent on 20 April 2006 to Slater [volume 8 PX 1] that he had said that as far as he was concerned, 30 June 'couldn't come soon enough'. That email, on the Court's findings, reflected arrangements to which he had been a party for some considerable time that Mr Emmott would be leaving MWP's employ by 30 June to join Temujin. Mr Nicholls evidence to the contrary [that the email reflected no more than his hope that Mr Emmott would leave MWP and join Temujin] is rejected [Transcript 1151 - 1152]. 228 Mr Nicholls, under cross-examination, conceded that he worked on a number of files for Resource Capital Partners and UMC and later Pinegrove under the supervision of Mr Emmott (T 1082.36-45). 229 He acknowledged that he worked for the clients Sokol and Kazgas with Mr Emmott regarding various deals as stated in paragraph 53 of his affidavit (T 1083.27-1085.2). These included transactions such as Max Petroleum, Chilisai Phosphate and Urals Gold. 230 Mr Nicholls, although conceding that Mr Emmott was a senior lawyer at MWP, vehemently refused to acknowledge that Mr Emmott owed fiduciary duties to the plaintiff (T 1106.14-1107.3). This approach to the contention becomes even more farfetched in light of the fact that Mr Nicholls himself is a vastly experienced lawyer (T 1106.35-40). 231 In the result the evidence given by Mr Nicholls requires to be very carefully checked against the contemporaneous documents prior to being able to be accepted. And as the reasons make clear, on a number of occasions the evidence which he gave is rejected. Mr Slater 232 Mr Slater was in numerous respects a witness whose credit cannot be accepted save as corroborated by contemporaneous documents or by the evidence given by other witnesses in turn accepted as reliable. 233 It is crystal clear that at and from the time when he was preparing and signing the various agreements referred to in these reasons [the 20 December documents] and being at the time when he thought it was highly unlikely that he would ever return to MWP, he set about:

Q. And you were working on the Urals Gold transaction at Temujin in January 2006? A. Yes that's correct. [Transcript 1397-1400] 237 Clearly enough all of these activities were intended to kickstart the operations of the entity which became Temujin. In the light of these activities the witness credit, save as his evidence is corroborated by contemporaneous documents or by other persons of credit is worthless. 238 However there were occasions when Mr Slater gave truthful answers, as for example when describing the banking transactions detailed in bank statements which were tendered. However he had little choice but to do so as the banking records told a clear story even without explanation. 239 He was not truthful when giving evidence about another important matter of evidence: his decision to leave MWP and how he came to communicate that decision. It is clear that Mr Slater had decided to leave MWP when he "tore up" the offer of an extension of his employment and "put it in the bin". On 19 December 2005 he gave notice of resignation to Westpac. When asked why he did not simply leave MWP at the end of his trial period (16 December 2005) he said "I don't know": T 1390.50. 240 On 21 December 2005 Mr Slater cleaned out his desk and left for Helsinki, ostensibly on holiday leave. His evidence was that he only decided to leave MWP when in Helsinki on 28 December 2005. He did not tell Mr Rasmussen whom he met on that day that this was his decision; only that he was in the process of making a decision. He said he told Mr Emmott either that day or the day before. 241 Mr Emmott's evidence was that Mr Slater only told him of his decision to quit MWP "after he returned from Finland" on about 7, 8 or 9 January 2006. 242 Towards the end of his cross-examination Mr Slater was asked some questions about the role of Temujin Services Limited (TSL) by reference to a document he himself had authored to Mr Shepherd QC in London in April 2007. At T 1552 and at T 1554 Mr Slater was forced to deny the truth of what he had written, but could offer no explanation as to why he had written what he did. 243 This evidence is rejected. There was no reason for Mr Slater not to be truthful in what he was informing Mr Shepherd. What he told Mr Shepherd QC is consistent with the document sent by Mr Slater to Mr Schoonbrood on 10 August 2006, being a proposed engagement letter on behalf of TSL in respect of Pinegrove. There was every reason in terms of this case retreat from what the document to Mr Shepherd QC contained as it contradicted key parts of Slater's own evidence, namely that TSL had never operated or earned any income. Mr Schoonbrood 244 In my view Mr Schoonbrood was a reliable witness. His evidence was given confidently. Generally that evidence established that he is a Dutch national and has conducted business all over the world, but in the last few years he has focused his time and interests in Kazakhstan. He holds an MSc in physics. He has worked for about 40 years in the oil industry. Since 22 May 2007 he has been employed as the Chief Executive Officer of Roxi Petroleum Plc. Roxi is registered in England and Wales and is listed on the Alternative Investment Market of the London Stock Exchange. 245 He is the former Executive Chairman of UMC Energy Plc, a company also incorporated in England and Wales and listed on AIM, He is also a former director of, and later consultant to, Pinegrove Equities Inc, a company incorporated in the British Virgin Islands. 246 From about December 2002 until about December 2003, he was the President of a Swiss company called UniOil AG which had a branch in Almaty. The general manager of UniOil in Almaty at that time was Steve Kappelle. During one of his visits to Kazakhstan, on or about 23 June 2003, Mr Kappelle and he met Mr Emmott in Almaty. This was his first meeting with Mr Emmott, He did not meet him again until about the end of 2005. 247 He joined, and became a director of, UMC on 16 November 2005. MWP had already been instructed by UMC before he joined. Before he joined UMC, he was not aware that MWP had been instructed by UMC.

I would not accept the correctness of the statement by the trial Judge (red 115): "... the purpose to harm must still be what is actuating the defendants in acting. That the defendants realise that damage to the plaintiff is a likely, or indeed an inevitable, consequence of their action is not enough to satisfy this element of the tort. Rather, damage to the plaintiff must be one of the things which the defendants are trying to achieve." 16. The Judge's findings establish that the predominant purpose of the defendants was to preserve the value of the land for the benefit of the Bryant family but, in the words of Fullagar J in Williams v Hursey at 78 this "necessarily" involved injury, Fatimi , because their predominant purpose could not otherwise be achieved. In this situation the relevant principle, as re-established by Lonrho Plc v Fayed is that stated in that case by Lord Bridge at 465-6: "But when conspirators intentionally injure the plaintiff and use unlawful means to do so, it is no defence for them to show that their primary purpose was to further or protect their own interests; it is sufficient to make their action tortious that the means used were unlawful." 17. The most recently reported decision on this subject is Coomera Resort Pty Ltd v Kolback Securities Ltd [2004] 1 Qd R 1 where, after reviewing most of the authorities, Mackenzie J said (34-5): "... there is good reason in principle why an intention to injure the plaintiff, albeit not the predominant motive, has to be established. Ordinarily the nature of the offence the conspirators agree to commit and the facts of the case will inevitably lead to the conclusion that it is intended to cause damage to a particular person. On the other hand, whatever other cause of action might be available, it would be contrary to principle for liability for tortious conspiracy to attach merely because a combination was put into effect and a person who was not reasonably within the contemplation of the conspirators as a person likely to suffer damage nevertheless suffered damage ... In such a case, it would be impossible to infer that the conspirators had an intent or purpose of causing damage to that person ... The concept of a requirement of some intent or conduct directed at the plaintiff was applied by Windeyer J in Womboin Pty Ltd v Reinchelt (unreported, 25 August 1995)." 18. This view is supported by the principles governing the crime of conspiracy to defraud stated in Peters v The Queen [1998] HCA 7; (1998) 192 CLR 493. It will be sufficient for present purposes to refer to the joint judgment of Toohey and Gaudron JJ. At p 505 they said: "... for an agreement to constitute a conspiracy to defraud, it must be an agreement to bring about a result by dishonest means - means which ... do not necessarily involve deception."

At 507 they said: "It has always been sufficient that the accused be aware that there is a risk of economic loss ... it is misleading to speak in terms of the purpose of a conspiracy to defraud, particularly as the purpose of the conspirators may be quite different from the fraud perpetrated. The purpose of conspirators is usually to obtain some financial advantage; the fraud, on the other hand, is in depriving others of their property or of the opportunity to protect their interests. And, as is pointed out in Archbold , the conspirators may never intend or, even, foresee the probability that others will suffer economic loss. Rather, they may genuinely believe that there will be no loss because their venture will be brought to a successful financial conclusion to the advantage of all concerned, even those whose interests have been put at risk." 20. They explained the requirement for proof of fraud in such a conspiracy as follows (508): "Ordinarily ... fraud involves the intentional creation of a situation in which one person deprives another of money or property or puts the money or property of that other person at risk or prejudicially affects that person in relation to `some lawful right, interest, opportunity or advantage', knowing that he or she has no right to deprive that person of that money or property or to prejudice his or her interests ." (emphasis supplied) 21. Finally they analysed the requirement for dishonest means (509-10): "... the offence of conspiracy to defraud involves dishonesty at two levels. First, it involves an agreement to use dishonest means. Ordinarily, the means will be dishonest if they assert as true something which is false and which is known to be false or not believed to be true or if they are means which the conspirators know they have no right to use or [they] do not believe that they have any right to use the means in question. And quite apart from the use of dishonest means, the offence involves an agreement to bring about a situation prejudicing or imperilling existing legal rights or interests of others. That, too, is dishonest by ordinary standards . If those matters are properly explained to a jury, further direction that the accused must have acted dishonestly is superfluous." (emphasis supplied) Finding 289 The tort of conspiracy to injure by unlawful means is made out. It is clear from the evidence before the court already referred to that one of the purposes of the conspiracy was to injure MWP. Although the predominant purpose of the defendants wise to obtain financial advantage from their Temujin and associated activities, the relevant proof of the fraud is seen in the intentional creation of a situation:

"It will be recalled that at the meeting of the Bureau on 2 June, "copies of the contract were provided for [Mr Sanders'] benefit." There was no evidence, however, that the terms of cl 9 were present to Mr Sanders' mind at any particular time. Although it is not required that Mr Sanders be shown to have been conscious of the precise terms of Mr Snell's contractual rights, it is required that he be shown to have had some appreciation of the general nature of those rights and of the fact that the course of action which he was advocating would constitute a breach of them. More particularly, it was necessary for Mr Snell to establish that Mr Sanders had some understanding that he (Mr Snell) was entitled not to be dismissed summarily, that is, without being given a period of notice, but nonetheless intended to procure the Bureau to dismiss him summarily." 297 The earlier findings of actual knowledge in Mr Nicholls and Mr Slater of what was occurring have made clear that they were participating with knowledge in the relevant exercise. 298 But even had that finding not been able to be made, it is trite that in relation to the course of action now being examined, it is not necessary that the defendants were aware of the particular contractual duties that Mr Emmott was breaching. It would have been and was enough if, as a clearly did, that they knew that he occupied the position of "partner" and that he was likely to owe the contractual duties (set out below) that he did in fact owe. 299 Furthermore, one should not pass over the fact that there evidence that Messrs Nicholls and Slater, who drafted the Cooperation Agreement, were aware of the terms of Mr Emmott's contract with MWP. In drafting that document they were clearly aware that he had a contractual notice provision of six months. Moreover their use of the phrase "when he is legally able to" indicates that Messrs Nicholls and Slater were to some extent cognisant of the duties that Mr Emmott owed. 300 Again, Lord Hoffman provides a useful statement of principle at [42]:

In Doss v Secretary State for India the concept of referring a case to its natural forum emerges clearly as a factor going to the jurisdiction of the Court to entertain the suit. Earlier in Cookney v Anderson , Romilly, MR and Lord Westbury, LC in holding that the necessary requisites for jurisdiction were lacking, stressed the inconvenience of the Court deciding that case. In Doss v Secretary for State of India the plaintiff sued the Secretary of State for India in respect of a debt and claimed to be entitled to a charge on the revenues of the territory of Oudh. The defendant demurred and Malins, VC allowed the demurrer on three grounds, two of which went to the merits of the case. The third ground however was that the English Court was not the proper tribunal to hear the case. The plaintiff were normally resident in India; the defendant, the Secretary of State for India was undoubtedly resident in England, but was also resident in India; the cause of action arose in India; and the property over which the charge was claimed was situate in India. The defendant was served in England, and it is important to note that the Court was dealing with the demurrer claiming a lack of jurisdiction, not an application for a stay. Malins VC nevertheless held: …where there is a complete tribunal capable of deciding the question where the property is and where the parties are, that is the tribunal to be resorted to … if this is a case to be sustained at all it is in the Indian courts, and not in the courts of this country, that the suit should be brought. 311 This notion of the significance of locating a complete tribunal capable of deciding the relevant question is of some importance in relation to some of the arguments put forward by the defendants in the present proceedings. In truth the manner in which these proceedings have come before this Court and the plethora of other jurisdictions which play sundry parts in the events which occurred, satisfy the finding that equity requires to act in personam on the conscience of the defendants and that this Court has the jurisdiction to deal with so much of the causes of action as are upheld by these reasons. 312 As has already been observed, if a defendant seeks to rely upon a foreign lex causae, it is for the defendant to allege and prove that law as an exculpatory fact cf Regie Nationale des Usines Renault SA v Zhang supra where the principle was expressed in the following terms:

"On the other hand, if the defendant seeks to rely upon a foreign lex causae, then, in the ordinary way, it is for the defendant to allege and prove that law as an exculpatory fact.": 313 The proposition that where foreign law is not proved it will be presumed to be the same as the lex fori is also amply supported: cf Lloyd v Guibert (1865) LR 1 QB 115 at 129 (dictum); Pickering v Stephenson (1872) LR 14 Eq 322 at 340 (special powers of directors or members of a corporation only to be exercised for its purposes); The Nouvelle Banque de L'Union v Ayton (1891) 7 TLR 377 (negotiability of bill); Wright Heaton & Co Ltd v Barratt (1892) 13 LR (NSW) 206 at 210 (waiver of notice of dishonour of promissory note); Bowden Bros & Co v Imperial Marine and Transport Insurance Co (1905) 5 SR (NSW) 614 at 616 (dictum in argument); The Parchim [1918] AC 157 (law relating to sale of goods); Ertel Bieber & Co v Rio Tinto Co Ltd; Dynamit Actien-Gesellschaft (Vormals Alfred Nobel & Company) v Rio Tinto Co Ltd [1918] AC 260 at 295 and 301 (validity of contracts involving trading with the army in wartime); The Colorado [1923] P 102 at 111 (dictum); Sedgwick, Collins & Co, Ltd v Highton (1929) 34 LlL Rep 448 at 457 (construction of contracts); The Torni [1932] P 78 at 91 (construction of statute); Hartmann v Konig (1933) 50 TLR 114 at 117 (construction of contracts); De Reneville v De Reneville [1948] P 100 at 121 (French law on whether incurable impotence renders marriage void ab initio); Re an Arbitration Between A/S Tank of Oslo and Agence Maritime L Strauss of Paris [1940] 1 All ER 40 at 42 (construction of contracts); Re Parana Plantations Ltd [1946] 2 All ER 214 at 217-8 (construction of contracts); Casey v Casey [1949] P 420 at 430 (Canadian law on voidability of marriages); Jabbour v Custodian of Absentee's Property of State of Israel [1954] 1 All ER 145 at 153 (construction of contracts); The Marinero [1955] P 68 at 73 (guarantees); Szechter (orse Karsov) v Szechter [1971] P 286 at 296 (dictum); United States Surgical Corporation v Hospital Products International Pty Ltd [1982] 2 NSWLR 766 at 799 (dictum); Mount Cook (Northland) Ltd v Swedish Motors Ltd [1986] 1 NZLR 720 at 726-7; Bumper Development Corp Ltd v Commissioner of Police of the Metropolis [1991] 1 WLR 1362 at 1369 (dictum); Royal Boskalis NV v Mountain [1999] QB 674 at 693 and 725 (duress rendering contract unenforceable).:per contra Damberg v Damberg [2001] 52 NSWCA 87. 314 After the case had been opened the defendants obtained leave to amend their response to plead as follows:

(b) the conduct of business in Kazakhstan 315 That being the case the defendants contend that the law of Kazakhstan applies to the employment contracts of Messrs Nicholls and Slater. They also allege that the same law applies to the conduct of business in Kazakhstan. 316 I accept that whether or not either or both of these propositions is correct is a question of fact upon which of course the defendants bear the onus. Examining the question of fact 317 Three witnesses gave opinion evidence and were cross-examined: Professor Maidan Suleimenov, Professor William Butler and Mr Victor Mokrousov. There is also a joint statement of these witnesses dated 5 June 2009 Exhibit PX 4. As well, in evidence as Exhibit PX9 is a copy of the Civil Code of the Republic of Kazakhstan. The evidence given by Professor Suleimenov 318 Professor Suleimenov's primary affidavit was dated 20 March 2008. He is Professor of law at both the Kazakh University for Humanities and the Caspian Public University: His primary affidavit is in Russian and a translation of this and a second affidavit of 27 May 2009, is provided in an affidavit of Barry Lewis sworn 23 July 2009. 319 In 1992 Professor Suleimenov founded a law firm called Zangar which has been one of the leading legal services firms in Kazakhstan for more than 15 years. In a distinguished career he was Head of the Law Drafting Working Group that among other things drafted the Civil Code of the Republic of Kazakhstan. He was described by Professor Butler as "today the most senior civil lawyer in Kazakhstan". 320 In an opinion annexed to his first affidavit Professor Suleimenov expressed the opinion in (Paragraph 12) that "the Branch of a foreign legal entity in Kazakhstan, such as MWP, is not an organisation. Therefore, Part 2 of Article 3.2 of the Law on Labour does not apply to the relations between the Branch of MWP, as a foreign legal entity, and its employees." 321 On the assumptions that neither Mr Nicholls nor Mr Slater held a residence permit for Kazakhstan and that their place of residence in each case was New South Wales, Professor Suleimenov concluded that "the applicable law to the contracts in these instant proceedings is the law of New South Wales (Australia)": paragraph 30. 322 His conclusion expressed in paragraphs 54 were as follows:

"It follows from my analysis above that if the law of NSW referred the court to the law of Kazakhstan, there are no labour norms of Kazakhstan applicable to the relationship between the branch of a foreign juridical person and a foreign citizen; accordingly, the reference must be to the law of Kazakhstan generally, as a whole, which returns us to Article 1087 of the Civil Code and full circle back to the law of Australia." 335 In his reply affidavit (of 2 June 2009) Professor Butler described the conclusion of Mr Mokrousov in paragraph 21 of his affidavit, where Mr Mokrousov says that Kazakhstan labour legislation applies to all labour contracts between MWP and its employees in Kazakhstan, as "wildly at odds with the law of Kazakhstan." 336 Professor Butler also provided a short Supplementary Report dated 8 August 2009. This was admitted without objection as Exhibit PX 5 (see T 935). 337 In that report Professor Butler refers to the Mizikovski case referred to in his earlier affidavit in some more detail and expressed either view that he considered it highly probable that a Kazakhstan court would follow the view taken in that case, namely that where there is a foreign citizen employed in a branch of a foreign entity whose head office was located abroad, the labour contract was concluded not with the branch but with the foreign juridical person located abroad and so is not regulated by the Kazakhstan labour legislation but by the laws of (in that case) the United States. 338 Just as with Professor Suleimenov, none of Professor Butler's views was questioned or challenged in cross-examination. This being the case it would be a highly unusual outcome if the evidence of these two eminent lawyers was not accepted. The evidence given by Mr Mokrousov 339 Mr Mokrousov, unlike the expert witnesses called by the plaintiff, was challenged as to the opinions he expressed in his affidavit. He acknowledged in particular that an important assumption on which his opinion rested was that MWP operates a law firm "from its headquarters in Almaty": [T 1425.47-50; T 1432.24] 340 That assumption has not been proved and is clearly incorrect. As explained by both Professors Suleimenov and Butler, the assumed position is central to the question of whether or not the laws of Kazakhstan apply to any contract of employment between MWP and both Messrs Slater and Nicholls. 341 Mr Mokrousov's evidence at T 143-1432 is both confused and confusing. It does not support his affidavit evidence, which has been directly challenged by the two expert witnesses called by plaintiff, both of whom are eminently better qualified to express an opinion about the matter, and which they both do without equivocation and in clear unambiguous terms. 342 The material factual finding of the court based on the evidence before it is that the law applicable to the contracts of employment between MWP on the one hand and Messrs Slater and Nicholls respectively on the other is that of New South Wales. 343 These factual findings are also supported by an examination of the authorities concerning the proper law of the contracts. 344 In Akai Pty Limited v People's Insurance Co Limited (1996) 188 CLR 418, Toohey, Gaudron and Gummow JJ said in relation to the question of choice of law in a contractual setting:

t. also relevant in Slater's case as part of the " general circumstances of the case " was that he was, to the knowledge of MWP, on leave from his permanent employer Westpac Banking Corporation in Sydney for the term of his employment offer with MWP. 355 I accept that the matters set out above indicate that the application of a common law system was a matter of common contemplation or common assumption between the parties when they entered into the respective contracts (cf Codelfa Construction Pty Limited v State Rail Authority of NSW (1982) 149 CLR 337, per Mason J at 354; Bonython v Commonwealth of Australia [1951] AC 201 at 219-220 per Lord Simonds delivering their Lordships judgment). 356 I turn next to the contention that the nature of the work to be performed by Messrs Nicholls and Slater under their respective contracts was to be done by them from offices in Almaty in Kazakhstan, suggesting a connection with Kazakhstan. 357 The work which each was engaged to undertake however involved them working on MWP client matters pursuant to which, in every case, the relevant letter of engagement expressly stipulated the laws of England as the governing law of the contract: see for example the letter at 4/121 and the evidence of Wilson at T 344.11 that this letter was "our standard form". 358 Mr Wilson also gave evidence at T313.31-33 that Mr Slater (and presumably Mr Nicholls) was "practising effectively international law". 359 Accordingly the finding to be drawn from the circumstances is that although there was no express choice of law clause in the contracts here, they were intended as a matter of construction by the parties to be governed by the laws of the State of New South Wales. In this, the position in this case is not unlike that in Amin Rasheed Shipping Corporation v Kuwait Insurance Co [1984] AC 50, where the House of Lords found that an English language marine insurance contract which gave Kuwait as its place of issue and provided for claims to be payable there was, as a matter of construction, intended to be governed by English law. The second step: the closest and most real connection 360 Even if the above conclusion be incorrect such that it were impossible for the court to infer from the above matters that the parties have chosen a system of law to govern their relationship, the question which would arise to be addressed would be as to which system of law the transaction has its "closest and most real connection". 361 In that circumstance I accept that it would be a very curious result if the law to be chosen as having the closest and most real connection to these contracts were to be a system which by its own rules did not regard itself as having any role to play in the matter. This would be the case if Kazakh law were chosen: see the evidence of Professor Suleimenov and of Professor Butler. 362 The very same factors that are discussed above under the first step are relevant also to this question. Hence the fact that the contracts were in English, not Russian, that they made no reference to Kazakhstan law or principles, that they were expressed in terminology relevant to a common law system and so on are matters that also suggest no close or real connection to the law of Kazakhstan. 363 In these circumstances the contention that the system of law with which these contracts had their closest and most real connection is anything other than New South Wales is rejected. The contracts were negotiated here, with people resident here, they were in English, and there was no apparent intention that if there were a default in the performance of the contracts the parties would resort to the courts of Kazakhstan to resolve it. And if they did, according to the evidence of the Kazakhstan law experts, they would be rebuffed. Conclusion 364 The defendants have failed to prove as a matter of fact that Kazakhstan law applies to the contracts of employment. The plaintiff has overwhelmingly proved it does not. The presumption that Kazakhstan law is the same as local New South Wales law applies in that event. Remedy 365 As often occurs the proceedings before the court raise difficult questions of remedy. 366 In Nocton v Lord Ashburton (1) [1914] AC 932, Viscount Haldane LC described the three primary remedies consequent upon a breach of a fiduciary obligation between a solicitor and client:

In the ordinary course, by the time a trial is concluded a plaintiff will know which remedy is more advantageous to him. By then, if not before, he will know enough of the facts to assess where his best interests lie . There will be nothing unfair in requiring him to elect at that stage. Occasionally this may not be so. This is more likely to happen when the judgment is a default judgment or a summary judgment and at the conclusion of a trial. A plaintiff may not know how much money the defendant has made from the wrongful use of his property. It may be unreasonable to require the plaintiff to make his choice without further information. To meet the difficulty, the Court may make discovery and other orders designed to give the plaintiff the information he needs, and which in fairness he ought, to have before deciding upon his remedy ." (emphasis added) 379 This approach has been endorsed in New South Wales. See in particular Artistic Builders Pty Limited v Elliot and Tuthill (Mortgages) Pty Limited and Ors [2002] NSWSC 16 per Campbell J at [159]-[161], Acme Office Service Pty Limited v Ludstrom and Others [2002] NSWSC 277 per Gzell J at [39] and Hexiva Pty Limited v Lederer [2006] NSWSC 318 per Brereton J at [57]-[64]. 380 In a case such as the present (where, non-disclosure of relevant information by the defendants has been an ongoing issue), I accept that both principle and fairness dictate that, in accordance with the above, the MWP not be put to election as to its remedies until these reasons have been given. Split election 381 During the conduct of these proceedings MWP reserved its right to make a "split election", seeking different remedies against different defendants, in accordance with Bergin J's decision in Club of the Clubs Pty Limited v King Network Group Pty Limited (No 2) [2007] NSWSC 574. I further accept that such an election cannot in fairness be made until after delivery of reasons for decision. MWP's approach to the relief which it seeks 382 MWP primarily seeks equitable relief for breach of the fiduciary duties owed to it by reason of Messrs Nicholls and Slater's employment, and also knowingly assisting in Mr Emmott's dishonest breaches of his fiduciary duties as, in effect, a partner in MWP. 383 MWP claims:

"The settled rule, both here and in England, is that mere difficulty in estimating damages does not relieve a court from the responsibility of estimating them as best it can. Indeed, in Jones v Schiffmann Menzies J went so far as to say that the "assessment of damages ... does sometimes, of necessity involve what is guess work rather than estimation". Where precise evidence is not available the court must do the best it can. And uncertainty as to the profits to be derived from a business by reason of contingencies is not a reason for a court refusing to assess damages." [See also per Brennan J at 102] Standing back from the issues 390 Obviously the Court has to ascertain precisely what it was that was acquired in consequence of the breaches of fiduciary duty now found by the Court and set out in the above reasons. Also of relevance is the ascertainment of exactly what was lost by the plaintiff. 391 The notion of 'exactitude' is far from achievable in the current environment. So much uncertainty exists. But at least there is no requirement of mathematical exactness but only a reasonable approximation in assessing the true measure of the profit or benefit obtained by the fiduciary is in breach of their duty. 392 One of the matters which seems to me in this particular case to require close attention is the factor of time in the continuation of fiduciary duty-mentioned by Laskin J in Canadian Aero Service [at 25]. In an entirely disparate area of the law [concerning misrepresentations as to material fact], it has been observed that a representation may in particular circumstances lose its operative significance so as to be regarded as having lapsed or been being spent hence losing its operative significance. Benefits obtained by the defendants 393 There are two types of benefits that the defendants have obtained from their breaches of fiduciary duty which can be disgorged to the plaintiff. 394 The first type constitutes financial benefits for the services provided by Temujin, in particular for legal services provided to former clients of MWP. These payments were made out to Temujin from the clients and have been readily identified by the plaintiff. 395 The second type would be non-financial benefits received for the services provided by Temujin. There is evidence that both the corporate and individual defendants have received shares from former MWP clients through their work on various client projects. 396 The benefits received by the defendants will be canvassed in the following section on a transaction-by-transaction basis. Each transaction will have an overview of the transaction itself and an analysis of the benefits received or that could have been received by the plaintiff but for the breaches. The Chilisai Phosphate project 397 The Chilisai Phosphate project was a transaction in respect of which the plaintiff, and then Temujin, carried out work on behalf of a client Sokol Holdings Inc ("Sokol"). 398 MWP commenced work on the project on or about 25 August 2005 (Sinclair Affidavit, paragraph 151). 399 The persons instructing MWP in 2005 on behalf of Sokol were Messrs Sinclair, Savage, Utegan, and Damitov (Sinclair Affidavit, paragraph 151). 400 Messrs Nicholls and Slater both worked on the Chilisai project whilst at MWP. As mentioned earlier, Mr Slater emailed material documents relating to this project out of his Gmail account on 20 December 2005 in preparation for leaving MWP and commencing operations at Temujin. 401 He re-commenced working on the Chilisai Phosphate project on or about 9 January 2006, soon after arriving at Temujin. There was, in effect, a joint retainer between Temujin and MWP at the time (Sinclair Affidavit, paragraph 31). 402 Mr Emmott was heavily involved behind the scenes, as outlined earlier. He was responsible for retaining Mr Slater as well as passing work from the client to him. When Mr Emmott finally resigned from MWP Mr Sinclair no longer briefed MWP (Sinclair Affidavit, paragraph 10). 403 After years of work, the project continues to unfold. So far, it has led to the floatation of Sunkar Resources PLC ("Sunkar") on the Alternative Investment Market (AIM). 404 The listing on 30 June 2008 raised approximately ₤31,000,000 in net proceeds with a market capitalisation on admission of approximately ₤191,800,000 according to Sunkar's AIM Admission Document. 405 Sunkar acquired a 90% interest in Temir-Service LLP as a result of the deal. Temir-Service LLP is a Kazakh limited liability partnership that had won a tender from the Kazakh government in 2004 to mine phosphates in a phosphate deposit (the Chilisai deposit) located in Kazakhstan. 406 In terms of the first category of benefits received. The plaintiff has identified numerous invoices issued by Temujin to Sokol. These are tabulated below: Date of Invoice Period of Invoice Amount ($US) 12/04/06 09/01/06 - 31/03/06 $90,000.00 11/05/06 01/04/06 - 30/04/06 $47,700.00 11/06/06 01/05/06 - 31/05/06 $58,300.00 25/07/06 01/06/06 - 30/06/06 $36,570.00 11/08/06 01/07/06 - 31/07/06 $22,206.00 09/10/06 01/08/06 - 30/09/06 $11,554.00

(b) It is obvious that the defendants have exported the work to Temujin through their communication before and after its establishment. 434 The principled approach in this situation is to allow the plaintiff to elect [assuming it pursues this leg of its rights to elect as between remedies] for an account of profits with respect to all financial benefits (i.e. the legal invoices) from Urals Gold that have flowed to Temujin. 435 Mr Sinclair's evidence was that the Urals Gold Transaction did not proceed because his company decided to swap their investment for one of their other mining projects (Sinclair Affidavit, paragraph 216). 436 The ultimate ruling regarding the Urals Gold project is that for the reasons above the plaintiff is entitled to an election between remedies concerning the Urals Gold project for all amounts paid to Temujin in the form of legal fees up to and including 30 November 2006. The Benkala Copper project 437 The Benkala Copper project involved the acquisition of a significant asset for Frontier Mining Limited, a company of which Mr Sinclair is Chief Financial Officer. 438 According to Frontier Mining's 30 April 2009 press release, Benkala is a copper-molybdenum-gold deposit located in north-western Kazakhstan within the Urals gold/copper ore belt. 439 In effect, as stated in Frontier Mining Limited's 2008 annual report, Frontier acquired a 50% interest in USMegatech BVI, which owned the Benkala deposit during November 2007. 440 Subsequently, in September 2008 all rights and obligations for the Benkala project and licences were transferred from the subsidiary to KazCopper LLP (KazCopper). 441 Frontier owns a 50% share in KazCopper as at 30 April 2009 as stated in its media release on that date. 442 It is important to note that MWP did not act in respect of this project. Rather, the plaintiff claims that Benkala was a continuation of the work that MWP had been doing since 2004 for Sokol and, in particular, the Urals Gold project, effectively claiming it as a lost business opportunity. 443 There do not seem to have been any Temujin receipts produced in these proceedings. However, MWP quantifies the benefits in two ways:

(b) There is no or insufficient evidence that Temujin in fact received any benefits of the 5% variety that the plaintiff alleges that can be accounted for. 445 The ultimate ruling regarding the Benkala Copper project is that for the reasons given above, the plaintiff is not entitled to an election between remedies concerning this transaction. The Roxi Petroleum project 446 The Roxi Petroleum project is best characterised as a conglomerate of business opportunities associated with Mr Robert Schoonbrood, an MWP client (and of Temujin). 447 Mr Schoonbrood's commercial plan was to acquire oilfields that would ultimately be housed in a public company. Roxi Petroleum PLC ("Roxi") came to be that company. 448 As explained earlier, it is clear that the defendants and Mr Emmott, in establishing Temujin along with various other actions appropriated Roxi project work from the plaintiff. 449 Mr Emmott was the partner of the North Karymandybas acquisition. Mr Slater had, amongst other things, assisted Mr Nicholls in the due diligence that occurred at this time (T 1345). 450 As mentioned earlier, Mr Slater forwarded documents relating to the North Karymandybas acquisition to his private Gmail in December 2005 without a valid explanation (T 1404.40-50). 451 By February 2006, Mr Schoonbrood had determined to embark upon a new course whereby he would cease to be associated with UMC. In essence, he established an entity called Pinegrove as a special purpose vehicle to acquire resource interests in the CIS, which would on-sell the interests to a company to be listed on the AIM (Schoonbrood Affidavit, paragraph 9). 452 In implementing his plan to acquire oil and gas assets to list on AIM Schoonbrood retained MWP generally to carry out a "watching brief" (Schoonbrood Affidavit, paragraph 4). Mr Emmott carried out this brief and would bring possible acquisitions to Mr Schoonbrood's attention. Mr Emmott, for example, wrote to Mr Schoonbrood on 10 March 2006 asking if he was interested in acquiring a small oilfield (T 1739). 453 Accordingly, it was part of MWP's role to find or introduce oilfields to Mr Schoonbrood and Pinegrove. 454 Three assets played a part in the listing of Roxi Petroleum. These were interests in the:

(c) Beibars (Munai) Contract Area 455 Regarding the North Karamandybas oilfield acquisition, from 26 April 2006 onwards, MWP acted in relation to a proposal that Pinegrove acquire the North Karymandybas oilfield and list that asset on AIM through a reverse takeover process. 456 This acquisition (known as "Project Kandy") continued throughout May and June. A spreadsheet setting out due diligence and documentation work to be done by MWP during these months was prepared by Schoonbrood and sent to Mr Emmott on 10 May 2006. 457 Mr Schoonbrood gave evidence to the effect that he switched firms because in a phone conversation between 28 and 30 June, Mr Emmott told him "he would no longer be able to look after the project" (T 1750.25-35). 458 Temujin immediately started working on the North Karymandybas acquisition after Mr Emmott left MWP with Mr Schoonbrood noting in an email of 1 August 2006 that he now engaged Temujin to act on his behalf. 459 Mr Emmott's explanation to Mr Schoonbrood about being unable to look after the project is disingenuous because the first bill Temujin rendered to Pinegrove for the month of July 2006 recorded Mr Emmott billing as a Temujin partner for 15 hours work. 460 On or about 10 August 2006, Mr Slater sent Mr Schoonbrood a proposal whereby TSL had sought to act as exclusive commercial advisers to Pinegrove to arrange for the purchase of a 50% interest in the Ravinnoye deposit and had sought a 5% success fee in doing so. 461 The Beibars Munai asset was merely an area to be explored and not an oilfield (T 1740.23-30). It turns out that there were low expectations for its yield in the foreseeable future. 462 Roxi was admitted to AIM on 22 May 2007. 463 The Roxi Petroleum work was clearly obtained through the defendant's breaches of fiduciary duty, in particular, through Mr Slater's theft of the Roxi documents via email and Mr Emmott's dishonesty in telling Mr Schoonbrood that he could no longer work on the project. The plaintiff should it determine to do so as between alternate remedies, may elect for an account of profits relating to the above-identified invoices for the three assets: Karamandybas, Ravninnoye and Beibars Munai. 464 The invoices sent by MWP regarding the three sub-projects are set out in the tables below: 465 Karamandybas Project: Date of Invoice Period of Invoice Amount (€) 10/08/06 01/07/06 - 31/07/06 €38,550.00 06/09/06 01/08/06 - 31/08/06 €45,142.00 12/10/06 01/09/06 - 30/09/06 €26,372.00 08/11/06 01/10/06 - 31/10/06 €15,750.00 19/12/06 01/11/06 - 30/11/06 €14,371.00 06/02/07 01/12/06 - 31/12/06 €23,807.00

For present purposes it is also noteworthy that the general introduction to schedule of fees and charges in MWP's standard letter of engagement contained the statement that 'We will not charge purely by reference to time spent, but instead, will consider a number of factors such as our overall relationship with a client; the nature, extent and volume of work handled for particular clients, the size, urgency and complexity of a matter; the level of skill, care, attention and effort required and applied; the importance of the matter and the results and any success (or failure) achieved." I note this language is consistent with the guidance provided by Rule 2 of the Solicitors' Code of Conduct 2007. The standard form also concludes with reference to an annual review of billing rates and other fees and costs with effect from 1 January with effect from that date without obligation to notify. All MWP engagement letters I reviewed relating to the matters considered in this Report used the standard wording of the MWP standard form of engagement letter". 553 I was impressed by the evidence given by Mr Schilling. He had obviously carried out an enormous amount of work in a very difficult environment. The task set of him involved a requirement that he carry out his best estimate of the appropriate level of legal fees for certain transactions in situations where there had been a need to treat with reconstructed files, those which survived being clearly incomplete. In this respect he gave a number of estimates. 'Nullus commodum capere potest de injuria sua propria' 554 This is an area where the maxim 'Nullus commodum capere potest de injuria sua propria' [no man can take advantage of his own wrong] must be borne in mind. This principle which is enlivened by way of a presumption against the wrongdoer may be invoked for the purpose of quantifying damages. . 555 In an affirmation of that principle in which the actions of the defendant had made it "difficult to assess the compensation due to the plaintiff", Handley JA put the matter as follows:

(b) He did not enquire about whether Kazakhstan had any legal costing rules (T 1001.43-1002.2). 567 In light of the uncertainties that shroud the exercise, the principled approach is to allow the plaintiff to elect between remedies regarding Mr Schilling's figures as necessarily subject to an appropriate discount for exigency. 568 The question of which judicial or quasi-judicial officer should determine the quantum of that discount may be subject of argument following the parties having the opportunity to consider these reasons. Decision as to relief 569 The precise form of relief must be moulded to satisfy the demands of justice and good conscience in the particular case before the Court: the overriding requirement being that the Court must look at the circumstances in each case to decide in what way the equity can be satisfied. That is to say, 'the equity of the transaction' must shape the measure of the relief. Constructive trust 570 In the unusual circumstances with which these proceedings are concerned the remedy of a constructive trust over Temujin [ie TIL] as an entity is inappropriate. Certainly MWP is entitled to relief with respect to the profits earned by Temujin in consequence of the breaches of fiduciary duty earlier referred to. The measure of advantage to Messrs Slater, Nicholls, Emmott and Temujin inheres in Temujin [and through it Messrs Slater, Nicholls and Emmott] being in a position to immediately [on and from the commencement of the business of Temujin], by reason of the breaches of fiduciary obligation, be in a position to commence with the obtaining of work which it may otherwise have taken Temujin a considerable time to attract. 571 But the factor of time in the continuation of fiduciary obligations has to be taken into account presently. The murky world of Temujin may have some similarities with Timber Engineering but in many ways depart from being on all fours with the findings in those proceedings. 572 When one focuses upon the profits made by Temujin the picture becomes:

It is clearly an abuse of process to use "Court proceedings... for the purpose of obtaining... some collateral advantage... and a party so using or threatening proceedings will be liable to be held guilty of abusing the process of the court and therefore disqualified from invoking the powers of the court by proceedings he has abused": Re Majory [1955] Ch 600 at 623-4 per Evershed MR; Williams v Spautz (1992) 174 CLR 509; 107 ALR 635 ; BC9202694 ; Spautz v Williams [1983] 2 NSWLR 506 at 539; Flower & Hart (a firm) v White Industries (Qld) Pty Ltd (1999) 87 FCR 134; 163 ALR 744 ; [1999] FCA 773; BC9903036 ; see also Castro v Murray (1875) LR 10 Ex 213; Dawkins v Prince Edward (1886) 11 P 59 at 63; King v Henderson (1897) 3 ALR (CN) 12; 13 WN (NSW) 137; Re Septimus Parsonage and Co [1901] 2 Ch 424; Bayne v Baillieu (1908) 6 CLR 382; 14 ALR 426; Dowling v Colonial Mutual Life Assurance Society Ltd (1915) 20 CLR 509; 21 ALR 425; [1915] HCA 56; Goldsmith v Sperrings Ltd [1977] 2 All ER 566 ; [1977] 1 WLR 478; Varawa v Howard Smith & Co Ltd (1911) 13 CLR 35 at 91. But proceedings may constitute an abuse of process if they are being prosecuted for any improper purpose, irrespective of whether or not that purpose is "collateral" in the ordinary sense of that term. The essential question for determination is whether or not the proceedings, or the particular claims made in them, are genuinely intended to be determined in the proceedings: Flower & Hart (a firm) v White Industries (Qld) Pty Ltd , above. According to this criterion, proceedings may be categorised as having an improper purpose, even if the moving party has a prima facie case, or must be assumed to have such a case: Grovit v Doctor [1997] 2 All ER 417 ; [1997] 1 WLR 640 (commencement and continuation of proceedings with no intention of bringing them to a conclusion is an abuse of process irrespective of whether the defendant has been prejudiced by the delay); Berger v Raymond Sun Ltd [1984] 1 WLR 625 (unduly prolonging a trial); Westpac Banking Corp v Northern Metals Pty Ltd (1989) 14 IPR 499 ; (1989) ATPR ¶40-953 (alternative claim struck out as embarrassing where its only purpose was to obtain wider discovery). [[14.28.10] Abuse of process - use of proceedings for an improper purpose] 597 There is a question as how it could be the conduct of foreign proceedings could amount to an abuse of the process of this Court. Perhaps there can be circumstances in which such a finding could be made and it seems pointless to speculate on that matter. However I note that Young J in Oz-US Film Productions Pty Ltd v Heath [2000] NSWSC 967 at [36] - [37] [without deciding the matter] observed as follows: "36 It was put by Mr Wales SC that a step taken outside the NSW proceedings and which could not, except perhaps forensically or with respect to a commercial settlement, impinge on the NSW proceedings cannot be an abuse of the NSW process. He further submitted that the Court is not to be concerned with whether there is a possible abuse of process in America or even if there is (which was denied) a tactical move dehors the proceedings by N and MN. 37 On reflection, these submissions are probably correct. However, it is not necessary to reach a final view on this matter." Overview 598 Before examining the eight grounds relied upon by the defendants in support of their abuse of process cases it seems appropriate to at least in part, repeat some of what has earlier been said in relation to Mr Wilson. 599 My assessment of Wilson from the extensive evidence which he gave and from the extensive general evidence before the Court is that he is an extraordinarily difficult person whom once crossed in any serious way, could be counted on one to make things as difficult as possible for his adversaries. And it is clear from the materials before the Court that he has pursued the defendants through many jurisdictions over extended periods of time in order to track what he regarded as wrongdoing of the highest order, required to be redressed by curial process. That of itself, by no means, proves that he has abused the process of this Court. 600 Indeed the remedy for obtaining interim and then final Mareva injunctive relief, freezing orders and the like, exist where a court is satisfied on the evidence before it that such relief is justified. 601 Without exception the grounds relied upon by the defendants in relation to the so-called abuse of process case fail. As is apparent from a careful reading of each of the grounds they consist of numerous complaints of the conduct of Wilson/the plaintiff covering an enormous amount of paper without ever achieving the status of that which is known as an abuse of process. 602 Of course there is a critical interrelationship between the ultimate merits of plaintiff's pleaded case and the abuse of process cases pursued by the defendants. And in many respects the substance of the plaintiff pleaded case upheld by the reasons, simply puts paid to the defendants abuse of process case (s). 603 I turn now to deal with the specifics in terms of the nominate grounds put forward by the defendants in support of the abuse of process cases. 604 Unfortunately it becomes necessary to set out the claims in detail. The simplest procedure is to set out the claims [which are summarised in the defendant's final written submissions] seriatim and to then give rulings in relation to each of them. Whilst I am cognizant of the fact that one does not repeat the pleadings in a final judgment, the circumstances in which the abuse of process case was never actually formally pleaded seem to me to make it necessary to set the defendant's case on abuse. Ground 1: Collateral, Improper Purposes. 605 The institution and maintenance of these proceedings by the plaintiff is an abuse of the processes of the Court (in the sense discussed in Walton v Gardiner (1993) 177 CLR 378) in that the predominant purposes of the plaintiff in its institution and maintenance of the proceedings are directed towards obtaining some advantage for which the proceedings are not designed or some advantage beyond what the law offers; namely:

j. the email addressed by Mr Wilson to Baker & McKenzie in mid-2008 (Exhibit "D11") seeking to engage in ongoing debate about the dispute between the parties that was supposedly settled "amicably" some years ago, and related to events over a decade old, manifests Mr Wilson's obsessive tendency of mind. 607 On 9 October 2006 the plaintiff obtained Freezing Orders against the defendants in an ex parte hearing in which the plaintiff relied upon: (A) a Commercial List Statement filed on that date, by paragraph C8 of which the plaintiff represented to the Court that a family structure of Mr Wilson was the ultimate beneficial shareholder in the plaintiff; and (B) an Affidavit sworn by Mr Wilson on 6 October 2006, in paragraphs 4 and 5 of which substantially the same representation was made. Those representations were inconsistent with: (C) clause 2.3 of the written agreement dated 7 December 2001 between Mr Emmott and the plaintiff (pursuant to which Mr Emmott had an entitlement to receive shares in the plaintiff), by virtue of clause 5.2 of which the plaintiff commenced the arbitral proceedings against Mr Emmott in London; and (D) the fact that on or about 20 February 2006 Mr Wilson had signed a certified copy of the Share Register of the plaintiff, bearing that date, to the effect that he personally owned 66.7% of the share capital of the plaintiff and Mr Emmott owned the balance of 33.3%. In paragraph C11 of its Amended Commercial List Statement filed 29 January 2007 the plaintiff deleted so much of the paragraph that had been numbered C8 in its Commercial List Statement as had alleged that a family structure of Mr Wilson was the ultimate beneficial shareholder in the plaintiff. 608 On or about 23 February 2008 Mr Wilson purportedly effected a re-organisation of the share capital of the plaintiff based upon a purported, undated Share Register of the plaintiff first discovered by the plaintiff to Mr Emmott in the arbitral proceedings in or about January 2009, recording two bearer shares as the only issued capital in the plaintiff. The "reorganisation" involved an exchange of the two bearer shares for shares registered in the name of Windsor Fine Arts Establishment (an entity registered in Lichtenstein, a jurisdiction not a party to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, known as "the New York Convention") and the issue of the remaining authorised capital in the plaintiff as shares registered in the name of Windsor Fine Arts Establishment. Documents relating to the "reorganisation" were not disclosed in the arbitral proceedings until the plaintiff was forced to make a disclosure pursuant to the Arbitrators' peremptory order dated 12 December 2008. The disclosure remains inadequate in that no documents evidencing the ownership of Windsor Fine Arts Establishment, Kazholdings Inc or Kazholdings Inc LLP have been disclosed in the arbitral proceedings or otherwise to the defendants. 609 On or about 21 September 2008 the plaintiff purportedly adopted "reconstructed accounts" for the years 2002-2006 inclusive by a certification bearing the date 21 September 2008 signed by Mr Wilson. In evidence given by Mr Wilson in the arbitral proceedings (at T. 3/119) he asserted that the "reconstruction" of the accounts was effected for the purpose of the arbitration and for the "Australian litigation", referring to these proceedings. The effect of the "reconstruction" was: to change the method of accounting from "partnership accounts" (treating Messrs Wilson and Emmott as partners, entitled to drawings) to "corporation accounts" (converting drawings to "directors loans"); to record an increase in expenses incurred by the plaintiff so as to reduce its profitability substantially; and to record an alleged indebtedness of the plaintiff to Kazholdings Incorporated (a company registered in the British Virgin Islands) for a substantial loan repayable on demand. The plaintiff objects in these proceedings to disclosure of documents relating to the financial circumstances of the plaintiff or documentation relating to ownership, control or financial circumstances of Kazholdings Incorporated. 610 Notwithstanding that on the public register of Steppe Cement Ltd the plaintiff is and has been since about 2004 recorded as a significant shareholder in the company (holding 13,407,852 shares or 8.71% of the 154,000,000 shares issued in the company as at 11 May 2009), an alleged deed dated 22 September 2004 discovered by the plaintiff during the hearing of the arbitral proceedings purports to show that the shares recorded in the public register of Steppe Cement Ltd as having been issued to the plaintiff were under the control of Kazholdings Incorporated. The deed was signed for Kazholdings Incorporated by Alexander Gusev (a person employed by the plaintiff as Mr Wilson's driver) and Dilyara Alimbayeva (a person employed by the plaintiff as Mr Wilson's office manager). It was signed by Mr Wilson and his wife Carol for the plaintiff. Notwithstanding that Mr Emmott was a director of the plaintiff at the time Deed was purportedly made, it was not disclosed to him until 25 September 2008 or thereabouts in the course of the arbitral proceedings. Nor was the fact that the plaintiff and Mr Wilson claimed that Mrs Wilson was a director of the plaintiff (that is, a co-director of Mr Wilson and Mr Emmott) at the time the Deed was purportedly made. In the arbitral proceedings evidence indicated that the Steppe Cement Ltd shares constituted the major asset of the plaintiff. In the course of those proceedings the plaintiff resisted orders designed to preserve 27% of the plaintiff's shareholding pending determination of Mr Emmott's claim to that property, asserting that the shares were held in a nominee account with HSBC Jersey. In the course of his evidence to the Arbitrators on 25 September 2008 Mr Wilson refused to disclose the whereabouts of the other 73% of the plaintiff's shareholding in Steppe Cement Ltd. 611 Only during the course of the hearing of the arbitral proceedings (at or about the time Mr Wilson served his first Witness Statement, Exhibit "MEW 21", dated 22 September 2008, in those proceedings) did the plaintiff first disclose to Mr Emmott the alleged existence of the putative deed dated 22 September 2004, a putative Loan Agreement dated 23 July 1998 (referred in clause 1 of the Deed) and a putative Charge dated 23 November 1998 (referred in clause 1 of the Deed as a "pledge" related to the Loan Agreement) between the plaintiff and Kazholdings Incorporated. Each of the Loan Agreement the Charge was ostensibly executed by Mr Wilson on behalf of the plaintiff and by his wife Mrs Carol A Wilson on behalf of Kazholdings Incorporated. The Deed was ostensibly executed by Alexander M Gusev and Dilyara Alimbayeva (employees of the plaintiff) as directors of Kazholdings Incorporated and by Mr and Mrs Wilson as directors of the plaintiff. By a letter dated 12 January 2009 addressed by the London solicitors of the plaintiff (Holman Fenwick Willan) to the solicitor of Mr Emmott (Michael Robinson), the plaintiff asserted that the Deed, the Loan Agreement and the Charge were authentic transactional documents. Nevertheless, the following factors suggest that they are a recent invention designed to obstruct, defeat or delay any attempt to enforce a judgment or order against the plaintiff: (A) the existence of the putative Deed and Mrs Wilson's alleged directorship of the plaintiff were not disclosed to Mr Emmott until belatedly during the course of the arbitral proceedings; (B) the effect of the documentation, in the context of the plaintiff's "reconstruction" of its accounts for the purpose of the arbitral proceedings and these NSW proceedings, is that the plaintiff is financially dependent upon Kazholdings Incorporated and possibly other entities that are, or might be, beyond the reach of ordinary court process and about which the plaintiff and Mr Wilson refuse to make disclosures in these proceedings; (C) the Charge describes the plaintiff as having a postcode (namely, "0500059") which was not in existence as at the date of the Charge (namely, 23 November 1998) or until December 2004; (D) the plaintiff did not exist as at the date of the putative Loan Agreement (namely, 23 July 1998) and, upon incorporation, it was not known by the name attributed to it in the putative Agreement as it was only incorporated on 17 August 1998 (with the name "Michael E Wilson & Co Ltd"), changing its name to "Michael Wilson & Partners Ltd" on 9 September 1998. Ground 3: Improper Ex parte Applications 612 The proceedings are an abuse of the processes of the Court in that the plaintiff has obtained coercive orders against the defendants, on ex parte applications to the Court, without full or proper disclosure of facts bearing upon those applications. 613 On 9 October 2006 the plaintiff obtained Freezing Orders against the defendants in an ex parte hearing in which it represented (by paragraph C8 of a commercial list statement filed on that date and by paragraph 5 of an Affidavit sworn by Mr Wilson as a principal of the plaintiff on 6 October 2006) that a family structure of Mr Wilson was the ultimate beneficial shareholder of the plaintiff. It did not disclose to the Court that Mr Emmott (against whom the plaintiff alleged wrongdoing in which the defendants were alleged to have participated) was entitled to 33.3% of the shares in the plaintiff or that Mr Wilson had, on or about 20 February 2006, signed a certified copy of the Share Register of the plaintiff to the effect that the shareholders of the plaintiff were himself (as to 67.7%) and Mr Emmott (as to 33.3%). 614 On 9 October 2006, 26 March 2007, 12 April 2007 and 18 October 2007 the plaintiff obtained ex parte orders, relying upon evidence that the principal of the plaintiff (Mr Wilson) was a former partner of Baker & McKenzie, solicitors, without disclosing to the Court that: (A) whilst a partner of that firm, Mr Wilson had, on his own admission, engaged in "unethical activities" involving "ghost tenders" and overcharging; or (B) that the termination of his relationship with the firm occurred amidst allegations by the firm that he had engaged in further unethical activity. 615 On those same occasions the plaintiff obtained ex parte relief from the Court without disclosure to it that a report of Mr Wilson's unethical activities (characterised as fraud) whilst at Baker & McKenzie was published in The Almaty Herald (a newspaper circulating in Kazakhstan) in and about June and July 2005, and that a written admission of "unethical activities" by Mr Wilson dated 28 May 1997 was in the public domain in Kazakhstan from June or July 2005 or thereabouts. 616 On the same occasions the plaintiff obtained ex parte relief from the Court without disclosure to it that any contract of employment made between the plaintiff and the First and Second defendants respectively was made without disclosure of Mr Wilson's admission of engagement in unethical activities to either the First or the Second defendants. 617 In or about March and April 2007 the plaintiff obtained ex parte orders from the Court, granting leave to the plaintiff to use material obtained in these proceedings for the purposes of a criminal investigation overseas (in Switzerland), based upon a false assertion that the affairs of the plaintiff were managed by Mr Emmott. 618 In or about March, April, June and October 2007 the plaintiff obtained ex parte confidential orders from the Court to facilitate the making of a Criminal Complaint overseas without disclosing to the Court that the terms of the Complaint proposed to be made (and made) falsely asserted that Mr Emmott was the managing director of the plaintiff in Kazakhstan and misrepresented the terms of clauses 1.1, 2.1 and 2.2 of the Agreement dated 7 December 2001 (between Mr Emmott and the plaintiff) in aid of that assertion. In Exhibit "D19" see the expression "managing director" (in paragraph 2 on page 3; in paragraph 12 on page 7; in clauses 1.2 and 2.2 extracted on page 8; and in paragraph 17 on page 10) and the expression "full-time employed basis" (in the purported extract of clause 2.1 on page 8) and compare those expressions with the terms of clauses 1.1, 2.1 and 2.2 of the Agreement (Exhibit "D9" at Tab 18). The plaintiff induced the Court to maintain the confidentiality of orders made ex parte without disclosing to the Court the terms of the Complaint or discrepancies between those terms and the Agreement dated 7 December 2001. At no time since the Complaint was filed with the Swiss Prosecutor has the plaintiff brought that discrepancy to the attention of the Court or admitted it. Ground 4: False and Misleading Statements 619 The proceedings are an abuse of the processes of the Court in that on 17 June 2009 Mr Wilson swore an Affidavit in these proceedings on behalf of the plaintiff in which he swore, inter alia, that: (i) Kazholdings Incorporated is not involved in these proceedings, either as a party "or otherwise"; (ii) the plaintiff is not and never has been a shareholder in Kazholdings Incorporated; (iii) the plaintiff does not have and has never had possession or custody of any documents "howsoever" relating to Kazholdings Incorporated; (iv) Mr Wilson is not a director, officer or shareholder of Kazholdings Incorporated; and (v) Mr Wilson does not have possession or custody of any documents relating to Kazholdings Inc. Those statements are false or misleading in that: (A) in evidence given by Mr Wilson in other proceedings (including paragraphs 98, 305, 354(3), 356(3), 365(3), 430(2), 431(5), 673 and 680 of the First Witness Statement of Mr Wilson, being Exhibit "MEW1" dated 22 September 2008, in the arbitral proceedings) he has made statements to the effect that Kazholdings Incorporated is, and has been throughout the life of the plaintiff a financier of the plaintiff and under the control of Mr Wilson; (B) by a letter dated 12 January 2009 addressed by the London solicitors of the plaintiff (Holman Fenwick Willan) to the solicitor of Mr Emmott (Michael Robinson) the plaintiff, expressly or by implication, asserted that the putative Deed dated 22 September 2004, the putative Loan Agreement dated 23 July 1998 and the putative Charge dated 23 November 1998 between the plaintiff and Kazholdings Incorporated were authentic; and (C) if authentic, those documents evidence a close and long association between the plaintiff and Kazholdings Incorporated. Ground 5: Constraint of the defendants' Capacity to Defend the Proceedings 620 The proceedings are an abuse of the processes of the Court in that the plaintiff has sought in its conduct of these proceedings to constrain the defendants' capacity to defend the proceedings and to limit or interfere with the legal representation available to the defendants in the proceedings. 621 Between 18 October 2006 and 6 November 2006 or thereabouts the plaintiff (by letters dated 18 October 2006, 27 October 2006 and 3 November 2006 addressed by Clayton Utz to Blake Dawson Waldron) objected to the First defendant's representation in these proceedings by Blake Dawson Waldron. The objection was based upon representations by the plaintiff to Blake Dawson Waldron that: (A) Blake Dawson Waldron was once instructed by the plaintiff (as a client of Blake Dawson Waldron) to act for clients of the plaintiff in a particular matter relating to Emperor Mines Ltd; (B) in the course of that matter information confidential to the plaintiff was imparted to Blake Dawson Waldron; (C) the plaintiff proposed to amend its Commercial List Statement to include allegations of negligence against the First defendant (in contract and tort), including an allegation that, whilst in the employ of the plaintiff, the First defendant was negligent in handling the Emperor Mines matter; (D) several members of Blake Dawson Waldron would be required to give evidence in these proceedings material to the determination of the Emperor Mines negligence allegation; and (E) by reason of r.19 of the Revised Professional Conduct and Practice Rules 1995 (NSW), Blake Dawson Waldron was obliged to cease acting for the First defendant. In response to the plaintiff's objection, on 6 November 2006 Blake Dawson Waldron filed a Notice of Intention to Cease to Act. On 29 January 2007 the plaintiff filed (pursuant to leave granted on 8 December 2006) an Amended Commercial List Statement which incorporated, in paragraphs 75-80, allegations of negligence against the First defendant. Having secured Blake Dawson Waldron's withdrawal from the proceedings by a representation that it had been a client of that firm: (F) on or about 23 July 2007 the principal of the plaintiff (Mr Michael Wilson) swore an Affidavit in proceedings numbered 307 of 2006 in the Eastern Caribbean Supreme Court (in the High Court of Justice of the British Virgin Islands) in paragraph 11(d) of which he denied that the plaintiff owed any moneys to Blake Dawson Waldron in respect of the Emperor Mines matter because, he said, Blake Dawson Waldron had contracted directly with the clients and the plaintiff was not itself a client of Blake Dawson Waldron; and (G) on 26 November 2007 the plaintiff filed a Further Amended Summons and a Further Amended Commercial List Statement in which all allegations of negligence against the First defendant were abandoned. 622 On 12 June 2009 (the last working day before the commencement of a trial listed to commence on 15 June 2009) the plaintiff served on the defendants a Notice to Produce bearing that date demanding production of records relating to the defendants' retainer of solicitors and counsel. On the same date the solicitors for the defendants (Henry Davis York) notified the plaintiff's solicitors (Clayton Utz) that, in the contention of the defendants, the Notice to Produce was an abuse of process. On the morning of 15 June 2009 (shortly before the scheduled commencement of the trial) each of Henry Davis York and counsel retained in the proceedings on behalf of the defendants received a letter (Exhibit "D2") dated 12 June 2009 from the office of PriceWaterhouseCoopers in Almaty, Kazakhstan, (where Mr Wilson of the plaintiff is resident) requesting, under cover of an order apparently made in the British Virgin Islands proceedings on the application of the plaintiff, substantially the same information as demanded in the plaintiff's Notice to Produce. 623 On or about 17 June 2009 the plaintiff (by a facsimile transmission described as a "Fax Message" bearing that date and addressed to the Managing Director of Cheviot Asset Management Ltd and Cheviot Capital (Nominees) Ltd) intermeddled in a sale by the Second defendant of shares held by him in Roxi Petroleum Plc designed to obtain funds for transmission to the solicitors for the defendants (Henry Davis York), to be held in trust on account of costs and disbursements referable to these proceedings. Under cover of its Fax Message, the plaintiff provided to the addressee of the Fax an incomplete copy of Freezing Orders made in the proceedings, omitting to provide or refer to an order made by Bergin J on 20 October 2006 that provided for Freezing Orders to be continued on the basis that "each of the defendants is entitled to pay out of his assets all reasonable legal expenses and costs associated with his defence of these proceedings." Ground 6: No Connection with Australia 624 The proceedings are an abuse of the processes of the Court in that the plaintiff has conducted these proceedings notwithstanding that it has no presence in Australia apart from the proceedings, no assets in Australia and no connection with Australia apart from the fact that its principal (Mr Wilson, a non-resident Australian citizen) is, or purports to be, an Australian lawyer. The undertakings as to damages given by the plaintiff in these proceedings in support of coercive orders obtained against the defendants are illusory to the extent that they are not, or might not be, supported by security ordered in favour of the defendants by the Court, bearing in mind that: (A) the "reconstructed accounts" of the plaintiff produced by the plaintiff at the hearing of the arbitral proceedings suggest that, during the course of these proceedings, the plaintiff has been trading whilst insolvent or near insolvency; (B) the putative Deed dated 22 September 2004, the putative Loan Agreement dated 23 July 1998 and the putative Charge dated 23 November 1998 made between the plaintiff and Kazholdings Incorporated suggest that, commercially, the affairs of the plaintiff can be dictated by Kazholdings Incorporated as a financier of the plaintiff entitled to a first charge over "all present and future assets" of the plaintiff and (C) the plaintiff and Mr Wilson refuse to make disclosures about ownership and control of Kazholdings Incorporated notwithstanding evidence given by Mr Wilson in the arbitral proceedings to the effect that he exercises control over Kazholdings Incorporated. Ground 7: The plaintiff's Objections to Making Disclosures 625 The proceedings are an abuse of the processes of the Court insofar as the plaintiff has objected to making disclosures, in the course of these proceedings or in the course of the arbitral proceedings, about its financial circumstances or ownership and control of it. Ground 8: Concealment of "Unethical Activities" 626 The proceedings are an abuse of the processes of the Court insofar as the plaintiff claims relief against the defendants referrable to obligations said to have been owed to the plaintiff by Mr Nicholls and Mr Slater as its employees in circumstances in which, prior to engagement of Messrs Nicholls and Slater respectively, the plaintiff concealed from them that its principal (Mr Wilson) had engaged in "unethical activities" whilst acting as a lawyer in Kazakhstan in partnership with Baker & McKenzie, thereby inducing each of Mr Nicholls and Mr Slater to undertake work for the plaintiff. Dealing with the respective abuse of process contentions 627 It is trite that it is unnecessary for the Court to record in its reasons each and every piece of evidence adduced during the hearing. For that reason the rulings in relation to the respective abuse of process contentions are unable to be fairly shortly made. Ground 1 Collateral, Improper Purposes 628 Notwithstanding the concerted efforts of the plaintiff and Mr Wilson to use many jurisdictions in the attempt to obtain freezing orders and similar against the defendants, nothing in the evidence before the court negates the proposition that they were perfectly entitled to so approach what they regarded as their litigious rights. To the extent, if at all, that the defendants are able, following the handing down of these reasons, to establish that in relation to any pleaded issue, the plaintiff stance taken during the hearing in ultimately not pursuing that issue, proves that the issue was pursued with an anterior motive, that matter may be the subject of argument in terms of costs. However that simply does not establish, [on its own or in conjunction with any of the other grounds put forward by the defendants] that these proceedings constitute an abuse of the process of this Court. Nor are any of the other claims pursued in ground 1 of substance or proved to the necessary level as to engage a finding of an abuse of process. Ground 2 Vexatious and Oppressive Conduct of the proceedings 629 The circumstances in which the plaintiff was unable to join Mr Emmott in these proceedings are common ground. Mr Emmott was entitled to require that the plaintiff comply with the contractual rights provided for in the contract between these parties. He in fact did so:

The rule that if there is an insufficient disclosure the injunction in question will be refused or dissolved, as the case may be, is often stated in quite general form, so as to suggest that it is invariably applied as a matter of course. Doubtless it is a rule that will be applied in all but the most exceptional cases, but it is difficult to believe that it is altogether inflexible and that courts of equity do not here have a discretion, especially since matters which are material in the sense which has been discussed may vary between those of great and little weight and the hardship which will be caused the plaintiff if he is refused relief may vary in the same manner. There is indeed authority that in very exceptional circumstances an injunction will be granted despite a material non-disclosure and that the court may sometimes consider that an applicant who has not made a full disclosure will be sufficiently penalised by an appropriate order as to costs. Thus, for example, if an injunction has already issued questions of hardship and of the degree of promptitude which the defendant has shown in seeking to have it subsequently dissolved will sometimes be found to be relevant in deciding whether it should be allowed to continue. 633 As I see the matter were the defendants found to have been correct in their contention of the failure by the plaintiff to comply with its onerous obligations to make full disclosure to the Court, the matter would likely sound in indemnity costs. 634 The freezing orders initially made in these proceedings by Palmer J on 9 October 2006 are said to have been based on an incorrect affidavit made by Mr Wilson on 6 October 2006. The affidavit was cross-examined upon [transcript 665-694]. Having examined that cross examination and the nuances concerning the meaning of "family structure" I am not satisfied that the plaintiff claim as to intentional misleading of the Court in the person of Justice Palmer is made out. 635 There is no substance in the suggestion that the matters concerning failure to disclose Mr Wilson's so-called unethical activities would require that these proceedings be dismissed on the ground of an abuse of process. 636 The complaints concerning the proposition that the plaintiff obtained ex parte orders from the Court granting leave to it to use material obtained in these proceedings for the purposes of the criminal investigation in Switzerland based upon a false assertions:

do not justify these proceedings being dismissed on the grounds of an abuse of process. 637 Much time was taken in examination of the events leading to the final complaint lodged in Switzerland. Both Mr Wilson as well as Mr Radosavlejic, the latter being a lawyer resident of Kazakhstan, had worked on the Swiss complaint. 638 A number of documents required to be examined in terms of the iterative circumstance from the commencement of work on the Swiss complaint until the lodging of the final complaint. The cross examinations traversed the manner in which English drafts were ultimately translated into German. Nothing in those cross-examinations justifies the proceedings being dismissed on the grounds of an abuse of process. Ground 4 False and misleading statements 639 Nothing in these grounds merit the proceedings being dismissed on the ground of an abuse of process. Ground 5 Constraint of defendant's capacity to defend the proceedings 640 Nothing in these grounds merits the proceedings being dismissed on the ground of an abuse of process. Ground 6 No connection with Australia 641 Nothing in ground 6 merits the proceedings being dismissed on the ground of an abuse of process. It must never be forgotten that both Slater and Nicholls filed submitting appearances. Nor that the defendants' pleadings [literally up to the commencement of the final hearing] had not sought to suggest that the law operating in Kazakhstan was different to the law in this present jurisdiction. Ground 7 The plaintiff's objections in making disclosures 642 Nothing in this ground merits the proceedings being dismissed on the ground of an abuse of process Ground 8 Concealment of so-called 'unethical activities' 643 No doubt this ground is put last for obvious reasons. It is a fine example of the general lack of merit running through all of the grounds referred to above. Indeed it suggests a lack of understanding of the principles first set out in these reasons in so far as dealing with this subject. As those authorities made clear, the power to exercise a stay in civil proceedings is only to be exercised with the 'utmost caution'. Conclusion 644 Notwithstanding that in my view none of the above grounds is shown on close examination to have had any merit at all, I have endeavoured resisted the temptation to simply dismiss all of them out of hand. As will have been observed, some of them have been fairly closely analysed and in other instances that form of analysis is simply unnecessary. Restraints against public policy/non-solicitation restraints 645 In light of the defendant's conduct exposed in these reasons, the defendants submissions contending that the alleged breaches of the restraint of trade provisions were against public policy and/or were and reasonable are seen to be misconceived. Consideration of those matters are:

Michael Wilson and Partners Limited v Robert Colin Nicholls & Ors

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Judgment (682 paragraphs)

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Legislation Cited (4)

Cases Cited (88)

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