Michael Wilson and Partners Limited v Robert Colin Nicholls & Ors

Supreme Court of NSW|2009-06-16|Before: Einstein J, Mr J, Spigelman J

CITATION : Michael Wilson and Partners Limited v Robert Colin Nicholls & Ors [2009] NSWSC 548

HEARING DATE(S) : 15/06/09 JURISDICTION : Equity Division Commercial List

CATCHWORDS : Natural Justice - Entitlement of parties to fair trial

CASES CITED : Walton v Gardiner (1993) 177 CLR 378

TEXTS CITED : 'The truth can cost too much: The principle of a fair trial' Chief Justice Spigelman, Australian Law Journal (2004) 78 ALJ 29

Michael Wilson & Partners (Plaintiff) Robert Colin Nicholls (First Defendant) David Ross Slater (Second Defendant) PARTIES : Temujin Services Limited (Third Defendant) Temujin International Limited (Fourth Defendant) Temujin International FZE (Fifth Defendant) Shaikenov & Partners, LLP (Sixth Defendant) Scoulton Holdings Limited (Seventh Defendant)

Mr M Walton SC, Mr J Carney (Plaintiff) COUNSEL : Mr G McGrath, Mr A Fox , Mr S Adair (First Defendant) Mr G Lindsay SC, Mr A Fox (Second to Fifth Defendants)

SOLICITORS : Clayton Utz (Plaintiff) Henry Davis York (First to Fifth Defendants)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST

50151/06 Michael Wilson & Partners v Robert Colin Nicholls & Ors JUDGMENT The defendants notice of motion 1 At the commencement of the first day of these proceedings [currently fixed for six weeks] the defendants by notice of motion filed on the 11 June 2009 sought a number of orders including an order that the proceedings be stayed until the expiry of a period not less than one month after service upon them of particular documents. 2 A deal of the first day was taken up with the cross contentions in relation to the notice of motion and a decision was reserved. 3 Mr Lindsay SC put the motion on a number of bases, the first a positive basis of the need for a fair trial and the second, a negative basis, namely an allegation of an abuse of process of the Court. The documentary based basis 4 A deal of the essential backdrop underpinning a number of the defendant's submissions involves an arbitration heard in the United Kingdom which commenced on 10 November 2008 and apparently concluded in late February 2009 [a 20 day arbitration]. That was an arbitration between Mr J F Emmott and the plaintiff in these present proceedings. Apparently no decision has yet been given in that arbitration. 5 Although Mr Emmott is not a party to the present New South Wales proceedings, he is apparently currently listed on the defendants' side of the record as proposed to give evidence: apparently an affidavit of his has been served on the plaintiffs. Indeed the Court has been informed that the defendants have served affidavits of Mr Nicholls, Mr Schoonbrood and Mr Sinclair, all of whom were apparently witnesses in the United Kingdom arbitration. The plaintiffs have sought to thumbnail sketch those affidavits as 'simply re-badged affidavits', which I understand is to suggest that they contain much of the same material as had been adduced during the arbitration. 6 Whilst there are a number of other matters raised by the defendants in support of their notice of motion, a considerable part of the notice of motion involves the contention that in very recent times they have been flooded with an enormous volume of material generally in the shape of that emanating from the above described arbitration. They claim that some of that material, in so far as constituting redacted material, must be supplied in an un-redacted form and that they require a proper period of time in which to absorb this material before being in a position to continue with the final hearing. 7 It is fair to observe that over a considerable period of time the plaintiffs took the position that the arbitration was subject to a confidentiality regime and that the current plaintiff was not in a position to provide the current defendants with any information in relation to the arbitration. There is considerable correspondence now before the court running from approximately November 2007 up to very recent times which appears to disclose the respective positions taken by the parties. 8 Ultimately it appears that Mr Emmott, on certain conditions, had proposed to waive confidentiality but the whole picture appears to have only slowly evolved and indeed there is correspondence as late as June 2009 from Holman Fenwick Willan suggesting that as at early June 2009 no agreement had been reached regarding the use in other proceedings of documents disclosed in the UK arbitration. 9 Ultimately many questions may arise in relation to costs of and occasioned by one or both of the parties in relation to the whole of the question of the disclosure of the documents utilised in the UK arbitration. One only parameter of the exercise may involve whether or not as the plaintiff claims:

i. a large volume of documents comprising the confidential documents discovered by the plaintiff had been made available for the first to fifth defendants' to inspect at a law firm [Grata law Firm] in Almaty in accordance with a confidentiality regime agreed between the parties for well over a year.

ii. the first to fifth defendants had not attended that law firm to inspect any of those documents at any time during that period.

[This contention was not supported by any evidence before the Court and the matter remains inchoate] 10 On an overview basis [but without deciding whether or not the UK arbitration materials sought by the defendants were or were not [or to what extent] materials which at any stage before or during or after the hearing of the arbitration should have been discovered, a reading of the correspondence suggests that both parties to this present litigation had an interest in clarifying that question and that the defendants in particular, had for a long time pursued the plaintiff to provide those documents as on discovery. 11 It is also appears from the correspondence that there was a reasonably lengthy gap between the communication dated 13 November 2007 from Lane and Partners, the plaintiffs UK solicitors to their UK counterparts, apparently being picked up again approximately May 2009. Accommodation reached during the argument 12 Ultimately as the transcript will record, a deal of accommodation came forward during the hearing of the motion. In certain respects the Court was able to make clear that it would endeavour to determine matters which still separated the parties. 13 The position which resulted seems to be as follows:

i. On 9 June 2009 the defendants served a notice to produce on the plaintiffs requiring the production of two classes of document: (a) the first constituting all documents of record recording or relating to the arbitration in the UK;

(b) the second consisting of documents recording or referring to particulars of certain shareholders, directors and officers over a particular period of time in respect of nominate corporations. ii. The plaintiff has now delivered [in DVD form] the following documents to the defendants: On 12 June :

witness statement of Mr Wilson (redacted] exhibit to witness statement of Mr Wilson (redacted) transcripts of cross-examination of Mr Wilson (days 3 -6 and 8 redacted)

pleadings other witness statements of evidence read at the hearing together with exhibits expert reports, together with exhibits transcript (with the exception of days 3 to 6 and 8 which were provided in redacted form on 12 June 2009) opening and closing submissions of the parties Mr Emmett's discovery with the exception of document 17 on his list of documents (to be provided shortly) transaction bundles the core bundle used that the UK arbitral proceeding

iii. The plaintiff has refused to provide awards, judgments or orders

iv. The plaintiff has refused on relevance grounds to provide any of the documents sought by the notice to produce in relation to directors, shareholders and dealings;

v. The Court has made clear that it will decide questions of relevance and that the documents called for in paragraph 2 of the defendants notice to produce are to be made available to the Court forthwith;

vi. The Court will determine the relevance of the so-called 'redacted material' so that the fate of so much of the DVD as was provided on a 'lawyers eyes only' basis will rest with the Court. The appointment of the Investigative Accountant of Temujin Group Entities 14 There is evidence before the Court that on 12 June 2009 letters emanated from PriceWaterhouseCoopers to each of the defendants' barristers clerks and to the defendants' solicitors Henry Davis York. 15 In these communications PriceWaterhouseCoopers advised that they had been appointed as the investigative accountant of the Temujin Group Entities pursuant to an order made in the High Court of the British Virgin Islands. A copy of the orders was enclosed. 16 The correspondence from PriceWaterhouseCoopers advised that in order for that firm to fulfil its duties and obligations, the recipients of the letters were required to provide to PriceWaterhouseCoopers by return the following documents:

i. copies of the relevant engagement letter/terms of appointment with either or both of the companies Temujin International Ltd and Temujin Services Ltd;

ii. copies of all invoices issued by the recipients of the letters to either or both of those entities, or to anyone else on their behalf (including Messrs Nicholls and Slater personally), including any fee notes which they had received from any of Messrs Lindsay SC, Gleeson SC, McGrath, Fox and Shepherd;

iii. details of all and any payments that they had received, whether directly or indirectly, in full or partial settlement of their invoices, including details of which persons or entities actually made payment to them;

iv. details of the current balance, if any outstanding. 17 As I understand the position, the central burden of Mr Lindsay's address [speaking for himself and the other of the defendant's counsel at the bar table] concerning these communications was that they each required a proper opportunity to assess their own positions: probably by approaching the ethics committee of the New South Wales bar Association. There were some concerns, as I understood it concerning their continued retainer. 18 This matter can be shortly dealt with by the Court. Quite obviously each of the defendant's counsel must have a proper opportunity to take such advice as they deem fit and must be afforded some time in which to do so. In the reasons which follow that time will be accommodated. 19 It was suggested by Mr Lindsay that one of the things which needed to be looked at was whether or not these letters constituted an attempt by the plaintiff to interfere with the regular determination of these proceedings. There being no applications in that regard my understanding was that that matter in due course be subject of investigation. The position concerning the plaintiff's retainer of Mr Carney of Junior Counsel. 20 The second order pursued by the defendants notice of motion [following the first order seeking a stay of the proceedings], was in the following terms:

An order that, pending expiry of such time, the plaintiff, by itself its servants and agents, be restrained from retaining for the purpose of the trial or any other step in the proceedings, Mr Carney or any other person retained by the plaintiff in or for the purpose of the conduct of the UK Arbitration and any person (including Mr Walton) who has had access to the documents of record referred to in [order 1]. 21 There is no basis for the contention that Mr Carney or any of the other persons including Mr Walton [identified in order 2 of the defendants notice of motion] should be restrained from being retained for the purposes of the trial. 22 The defendants have cited a number of authorities [including Walton v Gardiner (1993) 177 CLR 378 at 392-393 and 394-395; and an article by Chief Justice Spigelman 'The truth can cost too much: The principle of a fair trial' Australian Law Journal (2004) 78 ALJ 29 at 30-31, 33 n30, 34 n34 and 35. 23 Naturally as a basic tenet of the administration of Justice, the Court must pay particular regard to ensuring that parties to litigation receive a fair trial. And of course each circumstance must be carefully examined in order to determine whether or not, for whatever reason, the parameters underpinning the rights of the party to a fair trial may have been put in jeopardy. Clearly in any circumstances where that fundamental right is not assured, the Court has a bevy of powers which it may exercise either to stay the proceedings entirely or to dismiss them or otherwise. 24 That having been said, the mere fact that Mr Carney was retained by the plaintiff during the United Kingdom arbitration and is now retained in the New South Wales proceedings has not been shown to be an integer of such earth shattering importance that either he or his leader must be removed from the bar table at all, or until the expiration of the time delimited in paragraph 1 of the defendants notice of motion. The defendants have made good their entitlement to have a reasonable opportunity to examine the materials which have come forward from the plaintiff 25 In my view the defendants have made good their entitlement to have a period of time in which to examine the materials which have come forward from the plaintiff and which may well come forward following my examination of the redacted materials. The proceedings will be adjourned to 23 June 2009 on which date the matter will be revisited. ***********

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