NICHOLLS v MICHAEL WILSON & PARTNERS LIMITED

Michael Wilson Partners Limited (MWP) 196 MWP is incorporated in the British Virgin Islands. It has branch offices in Almaty, Kazakhstan and Baku, Azerbaijan. Through its Almaty office, it operates as a law firm and, according to his Honour's finding, also as a business consultancy, in Kazakhstan, the cental Asian region, the Caucasus, Russia and Ukraine. 197 An essential part of MWP's business involved the structuring of investments in Kazakh assets, in particular energy and mineral assets, to attract foreign investors, and to achieve listing on a public stock exchange. MWP refers to this aspect of its business as the "Structured Investments Business". 198 The Structured Investments Business has a fee structure which often includes a success fee or commission, which or a component of which may be an opportunity to take equity in the investment. 199 The founder and managing director of MWP is Michael Earl Wilson. Mr Wilson was not forthcoming concerning the ultimate beneficial ownership of the shares in MWP. He said that they were owned by Windsor Fine Arts Establishment Ltd (WFAE), a company registered in Liechtenstein, but was unable or unwilling to answer questions concerning the beneficial ownership of the shares in WFAE or the control or activities of that company. Although pressed, he said only that WFAE was a "family structure".

Michael Earl Wilson 200 Mr Wilson was admitted as a solicitor in London in 1984, working at Baker and McKenzie where he became a partner in 1991. In 1994 he established a branch of that practice in the Central Asia region. 201 Mr Wilson left Baker and McKenzie to establish MWP, which he did on or about 14 July 1998 with an office in Almaty. At MWP, Mr Wilson has continued to practise in commercial law.

Robert Colin Nicholls 202 The first two appellants, Robert Colin Nicholls and David Ross Slater, are also lawyers. So is Mr Emmott, who, as noted above, was not sued. 203 The first appellant, Mr Nicholls (first defendant below), is an Australian barrister who was admitted to the Barristers' Roll in New South Wales. Most of his career, however, was spent as a solicitor at Freehills in Sydney where he was a partner. 204 His Honour found that Mr Nicholls was employed as a Senior Associate by MWP beginning on 24 April 2004. On 31 January 2006, Mr Nicholls gave Mr Wilson one month's notice of the termination of his employment. That employment ceased on 1 March 2006. Mr Nicholls then commenced working with Mr Slater in the Temujin office in Almaty. Mr Slater had left MWP and established that office a little earlier (see below). 205 The primary judge rejected Mr Nicholls's claim that there never was a contract of "employment" between him and MWP. His Honour accepted Mr Wilson's evidence that on or about 1 April 2004, by telephone from Sydney, Mr Nicholls accepted an offer of employment that had been emailed to him on that date. The emailed letter of offer was signed on behalf of MWP by Messrs Wilson and Emmott. It concluded by inviting Mr Nicholls to sign and return the letter to indicate acceptance but he did not do so. The appellants challenged his Honour's finding of an oral acceptance. 206 The letter contained confidentiality and non-solicitation provisions but no general post-employment restraint on practice. The non-solicitation provision was to the effect that if Mr Nicholls should leave MWP, he would not, without MWP's consent, approach, solicit or make offers to any of MWP's clients and would not seek or work on any projects or developments in which MWP was involved. The letter provided for the giving of three months' notice of termination. As noted above, however, Mr Nicholls gave only one month's notice. David Ross Slater 207 The second appellant (second defendant below), David Ross Slater, is admitted as a solicitor in New South Wales. Mr Slater's employment agreement was contained in a letter of offer from Mr Wilson dated 19 July 2005 and an acceptance by Mr Slater's countersignature on the letter on 20 July 2005. The letter provided for Mr Slater to work for MWP from 5 September 2005 to 16 December 2005 as an Associate based in Almaty. The contract contained confidentiality and non-solicitation provisions but no general post-employment restraint on practice. The non-solicitation provision was to the effect that if Mr Slater or MWP should "terminate" the agreement, Mr Slater would not approach, solicit or make offers to any of MWP's contacts, clients or staff and would not seek to work on any new projects or developments in which MWP was or had been involved. 208 A second offer of employment was made to Mr Slater on 2 December 2005 which he did not accept. He did, however, continue working in the MWP office in Almaty beyond 16 December 2005 down to 20 December 2005, for which additional period he was paid by MWP. 209 On 21 December 2005 he cleaned out his desk and his office at MWP and flew to Helsinki on holiday. He gave those at MWP no indication that he would not be returning to the office. When he returned to Almaty on 6 or 7 January 2006 it was not to resume working for MWP but to establish the rival Temujin practice on 9 January 2006, working from the office of Shaikenov & Partners LLP (see below) in Almaty. (At [2] the primary Judge said that Mr Slater was an associate at MWP from 1 September 2005 to 9 January 2006.) John Forster Emmott 210 Mr Emmott was born in Australia and was admitted as a solicitor of this Court in 1978. He was admitted as a solicitor in England and Wales in 1985. He spent most of his career employed by, or as a partner in, the London firm of Richards Butler. 211 Unlike Messrs Nicholls and Slater, Mr Emmott had a formal (but poorly drawn) contract with MWP. It was dated 7 or 8 December 2001 (the date is difficult to read) (the Emmott Agreement). 212 Although Mr Emmott was not a party to the proceeding before his Honour, his role in the events that gave rise to the litigation was critical. Of the three men, he was the most senior and longest standing employee of MWP. The primary Judge thought that of the men, Mr Emmott was the backbone of the arrangement between them. Therefore I will outline the contents of the Emmott Agreement in some detail. 213 The Emmott Agreement recited that Mr Emmott was a partner in the London-based international law firm, Richards Butler, and that MWP had a "registered Branch" in Kazakhstan where it had a licence to provide legal services which it had been doing since August 1998. In cross-examination Mr Wilson said that when MWP was formed, a licence to practise law in Kazakhstan was required and that MWP obtained and still held such a licence, although the requirement no longer existed. He said that in effect MWP practised international law "marrying the transactions and documents in the transactions" while local Kazakhstani lawyers "provided the local law input". 214 Clause 1.1 provided that Mr Emmott was to join MWP "as a director and shareholder" as from 7 January 2002 in accordance with the terms set out in the Emmott Agreement. 215 Clauses 1.2, 1.3 and 1.4 were as follows:

1.2 MWP and Mr Emmott have agreed to enter into a long-term and mutually acceptable business relationship and association and that they will share and be party to much sensitive, confidential and valuable information, not least as to MWP's clients and contacts established in the Region since 1994 and as to Mr Emmott's own clients and contacts:

1.3 MWP and Mr Emmott have agreed that their fundamental strategy is to create the leading independent legal and business consultancy firm, not only in Kazakhstan, but also throughout the Region, which will be developed pursuant to a strategic plan and budgets to be negotiated and agreed between the Parties and to be updated on a regular basis. The Parties expect that this can be achieved by them acting in partnership over a period of three to five (3-5) years and they will mutually devote all of their time, energy and efforts in order to achieve this as quickly as is possible and in order to maximise the value, client base, name and reputation of MWP in Kazakhstan and throughout the Region. In particular, the Parties have agreed to consider and, if viable, acquire existing firms, practices or businesses or recruit staff in order to open and establish offices or presences throughout the Region as soon as is possible (economics permitting) …. Any such expansion shall be funded, insofar as is possible, from the cash flows of MWP, from debt and equity financing and/or from Mr Emmott and the shareholders of MWP (should they agree) in proportion to their respective net profit sharing interests in the business;

1.4 Although the cooperation established between the Parties pursuant to this Agreement is as co-shareholders and co-directors in MWP, a legal entity , the Parties have agreed that in effect MWP will function and operate as a quasi-Partnership between them and the Parties shall have and observe the usual partnership obligations and duties to each other i.e. co-operation, of disclosure and of good faith as partners carrying on business in common with a view to making profits. (my emphasis)

The Emmott Agreement contained no general post-contract restraint on practice. 216 There are suggestions in the Emmott Agreement that it was a contract between Messrs Wilson and Emmott, but Mr Wilson was not a party to it. 217 Notwithstanding some difficulties, it seems appropriate to describe the relationship between MWP and Mr Emmott as a quasi-partnership or joint venture in which Mr Emmott owed partner-like duties to MWP. 218 Clause 2.1 was to the same effect as cl 1.1 (see [214] above). 219 Clause 2.2 provided that Mr Emmott would be a director of MWP with a 33% profit sharing interest, which was to be "earned" as set out in the ways set out in the clause. One of the ways was the contribution of Mr Emmott's 33% share of the net profits up to GBP 225,000 (cl 2.2.1). Another way was "by devoting his full time and attention to developing the practice and business of MWP" (cl 2.2.2) and another was "by seeking to bring and refer to MWP all and as many as is possible of his clients and contacts" (cl 2.2.3). 220 Clause 2.3 provided that when Mr Emmott had contributed the amount of GBP 225,000 for his 33% net profit share, he would be entitled to receive a 33% shareholding in MWP, and that MWP and its shareholders would cause the necessary shares to be issued or transferred to him or his nominee. This provision assumed importance in an arbitration to which MWP and Mr Emmott were parties (see [225] and [293] ff below). 221 Clause 2.4 provided that Mr Emmott and MWP would fully and closely co-operate in order to promote, develop and enhance the business of MWP and would "not compete in any manner whatsoever". Introduction of any "new partner" to MWP was subject to the agreement of both parties. 222 There were provisions for an annual business plan and a budget to be agreed to by MWP and Mr Emmott (cl 2.5) and payment of a "minimum monthly draw or salary" to be paid by MWP to Mr Emmott (cl 2.9). Clause 2.13 was as follows: Mr Emmott will use all reasonable endeavours (and subject to clients' instructions) refer to and bring with him to MWP all and any clients, contacts or matters howsoever relating to Kazakhstan and the Region in or with which he is currently involved in a manner whatsoever and on or in relation to which he is instructed or with whom he has established contact or relations, it being recognised that this Agreement creates sole and exclusive relations between Mr Emmott and MWP. 223 The Emmott Agreement provided (cl 3.1) for termination by the giving of six months' notice by either party to the other. On 30 June 2006 when he knew that Mr Wilson was away attending a conference in London, Mr Emmott left a letter of resignation in an envelope on Mr Wilson's desk in MWP's Almaty office. Shortly afterwards, he went to the airport where he boarded a plane for overseas. Upon his return to Almaty, he joined Messrs Slater and Nicholls in the Temujin practice. Upon Mr Wilson's return to Almaty he found Mr Emmott's letter of resignation. 224 Rather than give six months' notice of termination, Mr Emmott had purported to terminate the Emmott Agreement immediately. On 20 July 2006, MWP accepted Mr Emmott's act as a wrongful repudiation of the Emmott Agreement. 225 Clause 5.2 of the Emmott Agreement provided that it was governed by the laws of England and Wales, and that any disputes were to be referred to arbitration in London. MWP's claims against Mr Emmott were in fact the subject of an arbitration before three arbitrators in London initiated by MWP (the Arbitration and the Arbitrators). The Arbitrators made a "Second Interim Award" (the Award) on 22 February 2010 - after the primary Judge's orders were made (the Arbitration and the Award are discussed at [293] - [313] below). 226 By an amended notice of motion filed on 23 June 2010 the appellants sought leave to lead additional evidence on the hearing of the appeal in the form of evidence of the Award and associated documents. By an amended notice of motion filed on 14 July 2010 MWP sought an order that the appeal, insofar as it depends on para 22 of the amended notice of appeal (which raises the Award) be dismissed. In the alternative, MWP sought leave to adduce evidence in response to any evidence that the appellants are given leave to lead on the appeal. The motions are dealt with at [375]- [404] below. Temujin S e rvices Limited (TSL) 227 The third appellant (third defendant below), Temujin Services Ltd (TSL) is incorporated in British Virgin Islands. It was established by Messrs Nicholls, Slater and Emmott on or about 8 March 2006. It operates as a service company providing services to the fourth appellant, Temujin International Limited. Temujin International Limited (TIL) 228 The fourth appellant (fourth defendant below) is Temujin International Limited (TIL) in its own capacity and as trustee of the Temujin International (Trading) Trust (the Trust). Of the three Temujin companies, TIL had the most important role for the purposes of the case. 229 TIL was established on or about 19 December 2005 with Mr Slater as its sole shareholder. Fifty thousand shares in TIL were issued to him on that date. His Honour found that TIL was established by all three of Messrs Nicholls, Slater and Emmott but the appellants say that the finding should have been that it was established by Mr Slater alone. TIL operates as a business adviser, agent and arranger and as a provider of legal services. 230 The Trust was established by a Trust Deed executed the following day, 20 December 2005, by Alexei Volkov as settlor and TIL as trustee. His Honour said (at 125) that the Trust appeared never to have been "activated" and that no units had been shown to have been issued in respect of it. 231 In early 2006, TIL established an office in Almaty. It was registered with the assistance of Mr Shaikenov (see below). From an early stage Mr Slater was in charge of the office. 232 It is convenient to note here that also on 20 December 2005, two agreements were executed. One was a "Co-operation Agreement" between Messrs Nicholls, Slater and Emmott and Arman Shaikenov. Mr Shaikenov was a citizen of the Republic of Kazakhstan, a practising lawyer and the principal of the law firm Shaikenov & Partners LLP (Shaikenov) (see below). The other was a "Services Agreement" between Shaikenov and TIL. 233 The Co-operation Agreement is discussed at [273] - [278] below. Generally speaking, it provided for the establishment of a "consultancy business" by Mr Shaikenov and Mr Slater involving the provision of legal services. The business was to be owned and operated by TIL. The Co-operation Agreement provided that Mr Nicholls was entitled to join in no later than 30 March 2006, and that Mr Emmott was entitled to join in no later than 30 July 2006. As noted earlier, both did so. The Co-operation Agreement provided (cl 6, Sch 2): "TIL will establish a branch in Almaty Kazakhstan. [Mr Slater] will be the general director of such branch, resident in Almaty, Kazakhstan". His Honour observed (at [27]) that the establishment of the Almaty office of TIL with Mr Slater in charge was in accordance with this provision. 234 The Services Agreement provided for Shaikenov to provide services to TIL. 235 The sole director of TIL is a "Mr Vasquez", a British Virgin Islands resident, who took no part in the proceeding. His Honour observed that it was not clear that Mr Vasquez even knew of the proceeding. Temujin FZE (TFZE) 236 The fifth appellant (fifth defendant below) Temujin FZE (TFZE) is incorporated in the Free Trade Zone of Ras Al Khaimah in the United Arab Emirates (UAE). "FZE" stands for "Free Zone Establishment". Mr Nicholls holds the shares in TFZE on trust for TIL. Like TSL, TFZE was incorporated on 8 March 2006 and operated as a service company providing financial and other services to TIL. It also provides such services to clients in the United Arab Emirates (UAE). Mr Nicholls has been the manager of TFZE since its incorporation. Shaikenov & Partners LLP (Shaikenov) 237 Shaikenov was the sixth defendant below. Shaikenov, referred to above, it is a limited liability partnership of which Mr Shaikenov was the principal with an office in Almaty. MWP accepted that it was not entitled to pursue its claim against Shaikenov for reasons concerning service. Accordingly, no order was made against it and it is not a party to the appeal. Temujin Holdings Ltd (THL) 238 Temujin Holdings Ltd (THL) was the seventh and last defendant below. It did not enter an appearance. Leave to proceed against it was given on 30 May 2008. His Honour ordered that the proceeding be dismissed as against THL, with no order as to costs as between MWP and THL. THL is also not a party to the appeal.

Clients 239 MWP's claims before his Honour related to various individuals and companies some of which were former clients of MWP and others of which, so MWP claimed, were on the way to becoming its clients.

Thomas Sinclair 240 Mr Sinclair was associated with Sokol Holdings Inc (Sokol) and the Chilisai Phosphate project (sometimes the alternative terms "transactions", "deals" or "ventures" are used). MWP commenced work on this project on or about 25 August 2005. It was instructed by Messrs Sinclair, Savage, Utegan and Damitov on behalf of Sokol. Messrs Emmott, Nicholls and Slater worked on the project when they were at MWP. 241 On 20 December 2005 Mr Slater emailed documents relating to the project to a Gmail account that he had just established in preparation for his leaving MWP and establishing the business of TIL. When he established that business he resumed working on the project. 242 Mr Sinclair was a client "of" Mr Emmott who wanted Mr Emmott to undertake his work and did not want Mr Wilson to have anything to do with it. 243 In effect from the establishment of TIL and while Mr Emmett remained at MWP, both MWP and TIL worked for Sokol (his Honour described Mr Emmott, even while he remained at MWP, as being "heavily involved behind the scenes" (at [402])). Once Mr Emmett left MWP on 30 June 2006 and joined TIL, Sokol retained TIL alone. 244 TIL charged Sokol and was paid fees totalling US$266,330 on the Chilisai Phosphate project covering the period 9 January 2006 to 30 September 2006. His Honour rejected Mr Slater's evidence that TIL did no further work on the project after 30 September 2006 (at [409]). 245 The Chilisai Phosphate project led to the flotation of Sunkar Resources plc (Sunkar) on the Alternative Investment Market of the London Stock Exchange (AIM). His Honour thought that there was strong evidence suggesting that TIL received Sunkar shares from the pre-IPO placement on 30 November 2007 (at [418]). 246 Another transaction in which Sokol was involved was the Urals Gold project (sometimes the expression "Urals Gold/Benkala Copper Projects" is used). This concerned the proposed acquisition by Sokol of the Maminskoye gold mine in Russia. MWP was instructed by Sokol to act on the matter from about early September 2005. Once TIL was established it worked on this deal also. 247 The Urals Gold project did not proceed because Sokol decided that its investment should be "swapped" for another mining project. TIL invoiced and was paid fees totalling US$109,292 for work done on the Urals Gold project in respect of the period 9 January 2006 to 30 November 2006. 248 Mr Sinclair was also Chief Financial Officer of Frontier Mining Limited (Frontier) which undertook the Benkala Copper project. Apparently Benkala is a copper-molybdenum-gold deposit located in north-western Kazakhstan within the Urals gold/copper ore belt. MWP did not act or render invoices for fees in respect of this project, but alleges that the project was a continuation of work that MWP had been doing since 2004 for Sokol and, in particular, a continuation of the Urals Gold project. Mr Schilling, an expert called by MWP, "valued" the legal work undertaken by TIL at $625,000. MWP also claimed a success fee of US$12,500,000. 249 His Honour declined to award any remedy to MWP in respect of the Benkala Copper project (at [445]).

Rob Schoonbrood 250 Mr Schoonbrood was the Chief Executive Officer of Roxi Petroleum PLC (Roxi) which was listed on the AIM. He had also been the Executive Chairman of UMC Energy plc (UMC), a company incorporated in England and Wales, and a director of Pinegrove Equities Inc (Pinegrove), a company incorporated in British Virgin Islands. 251 His Honour described Mr Schoonbrood's plan as being for UMC "to acquire oil fields that would ultimately be housed in a public company" (at [447]). Roxi came to be that company. The Roxi "project" therefore signifies a group of business opportunities. 252 MWP had a "watching brief" under which it brought possible acquisitions to Mr Schoonbrood's attention. 253 The work undertaken at MWP for Roxi included work relating to the North Karamandybas acquisition. Mr Emmott was the "partner" responsible and Messrs Nicholls and Slater worked on the project. 254 In December 2005 Mr Slater forwarded documents relating to the project from MWP to his recently established private Gmail address. 255 By February 2006 Mr Schoonbrood had determined to embark upon a new course by which he would cease to be associated with UMC. He established Pinegrove as a special purpose vehicle to acquire resource interests in the Commonwealth of Independent States (CIS). Pinegrove was to on-sell the interests to a company to be listed on the AIM. That company came to be Roxi. Roxi was not admitted to the AIM until 22 May 2007. 256 There were three projects on which TIL obtained work and charged fees, as a result, according to his Honour's findings, of breaches by Messrs Nicholls and Slater of their fiduciary duty. These were: the Karamandybas project (or North Karamandybas Contract Area), the Ravninnoye project (or Ravninnoye Contract Area); and the Beibars (Munai) project (or Beibars (Munai) Contract Area). 257 TIL issued invoices for work done as follows: Karamandybas (1 July 2006 to 31 December 2006) totalling €163,992; Ravninnoye (1 August 2006 to 31 December 2006) totalling €124,419; Beibars (Munai) (1 September 2006 to 31 December 2006) totalling €101,817. 258 Roxi was also involved in the acquisition of other interests in oil fields. These included the acquisition of Eragon Petroleum plc (Eragon) which was initially designated "Project X". For Project X TIL invoiced an aggregate amount for the period 1 November 2006 to 31 December 2006 of €29,950. MWP had done no work on this acquisition, but Mr Schoonbrood was a former client of MWP. His Honour considered that this connection did not place Project X within the scope of any breach. 259 TIL also did work for Mr Schoonbrood on a reverse takeover of Eragon, and associated suspension of Eragon from the AIM and its subsequent readmission. It was readmitted on 31 January 2008. TIL worked on the reverse takeover, suspension and readmission. 260 TIL also worked on the proposed acquisition of ADA Oil LLP and ADA LLP. 261 TIL issued invoices for fees on the Eragon reverse takeover covering the period 4 January 2007 to 31 January 2008 totalling US$708,000, and on the ADA acquisition covering the period 1 January 2007 to 31 January 2008 totalling US$463,670. 262 There was evidence that non-refundable cash fees were payable to TIL totalling US$500,000 on the Eragon matter and totalling US$500,000 on the ADA acquisition. His Honour said that there was also evidence that on the re-admission transaction, shares in Roxi were given to Mr Slater himself through a Panamanian entity called "Fencourt Foundation" of which Mr Slater was the beneficial owner. 263 There was a Frontier project on which his Honour concluded that MWP was entitled, at its election, to an accounting for profits or equitable compensation. This was "Project Ablai". The invoice rendered by TIL in respect of Project Ablai was for US$36,959 in respect of the period 1 June 2006 to 30 June 2006.

Kangamiut Seafoods 264 In early December 2005, a Danish company Kangamiut Seafoods (Kangamiut), contacted MWP with a view to retaining MWP to act for it. Mr Wilson and Ms Pedersen (MWP's Business Development Director) arranged for Mr Slater to meet Ulrick Rasmussen, the representative of Kangamiut. 265 Mr Slater met Mr Rasmussen in Helsinki in late December 2005. Kangamiut retained TIL, rather than MWP, becoming a client of TIL later in 2006. 266 Neither Mr Rasmussen nor Kangamiut was a client or contact of Mr Slater's: they were contacts of MWP's. 267 TIL invoiced US$39,750 on work done for Kangamiut during the period 31 March 2006 to 30 June 2006. 268 His Honour ruled (at [541]) that MWP was entitled, at its election, to an accounting for profits or equitable compensation in respect of the Kangamiut work.

Lancaster Group 269 Lancaster Group (Lancaster) was associated with Mr Nuran Kapparov and his KazInvest Bank. On or about 20 August 2005, Mr Abzhamov of Lancaster) expressed a wish for a meeting with a view to appointing MWP as its legal adviser in connection with a listing on the AIM, probably in the third quarter of 2006. Mr Wilson emailed back saying that the following Wednesday would be fine for a meeting. On or about 28 December 2006, a lawyer at MWP sought to arrange a meeting. 270 On 11 January 2006, Mr Emmott advised Mr Wilson that Lancaster was "some way from appointing lawyers" and that they planned on listing "some time during this year". In April 2006, Lancaster engaged TIL. 271 For the period 31 March 2006 to 30 April 2006, TIL invoiced US$19,504 on the Maersk Oil Joint Venture, which was a project of Lancaster. 272 His Honour ruled (at [534]) that in respect of the Maersk Oil Joint Venture MWP was entitled, at its election, to an accounting for profits or equitable compensation. The Co-operation Agreement 273 The Co-operation Agreement dated 20 December 2005, Mr Slater's last day at work at MWP, laid the basis for much of the conduct of which MWP complained and for which it sought redress. 274 By the Co-operation Agreement, Messrs. Shaikenov, Slater, Nicholls and Emmott established a "consultancy business" (the Consultancy) to be owned and operated by TIL as trustee for the Trust. The first two units in the Trust were to be held by persons designated by Messrs Shaikenov and Slater. If Messrs Nicholls and Emmott should elect to participate one unit would be issued to each of them, so that there would be four units on issue in all. 275 Clause 5 provided that in order to assist Messrs Shaikenov and Slater in funding the business, TIL was to enter into one or more facilities for the provision of funding up to US$300,000. The clause provided that although Messrs Nicholls and Emmott were "not yet legally committed to participating in the Consultancy", each of Messrs Slater, Nicholls and Emmott (not Mr Shaikenov) agreed to provide one third of any shortfall from the operation of the Trust as might be necessary to allow TIL to discharge its obligations to the provider of the facility. 276 Clause 6 was as follows: [Mr Shaikenov] and [Mr Slater] agree and each of [Mr Nicholls] and [Mr Emmott] acknowledge that the business plan for the Consultancy (the "Business Plan") will be as set out in Schedule 2, and that the assumptions and financial projections related thereto (which the Parties will use their respective best endeavours to render correct and achieve) will be as set out in Schedule 3. 277 Paragraph 5 of Sch 2 provided that Messrs Shaikenov and Slater agreed, and that each of Messrs Nicholls and Emmott agreed when the relevant one of them became legally free to do so, to use their respective best endeavours to promote the business of the Trust. 278 Schedule 3 was headed "Assumptions and Financial Projections". It provided for "Drawings" which increased in March 2006 and again in July 2006, no doubt reflecting the times when it was expected that Messrs Nicholls and Emmott respectively would join. THE PRINCIPAL REASONS FOR JUDGMENT 279 At [19] of the Principal Reasons, the primary Judge noted that the central allegations of MWP's case were as follows: Messrs Nicholls and Slater Messrs Nicholls and Slater had breached sundry duties owed to MWP by soliciting MWP's contacts, clients, employees and consultants inter alia by:

vi. breaching express and implied terms of their employment contracts with MWP: The respective employment contracts between MWP, Messrs Nicholls and Slater are said to have contained restrictive covenants and obligations of confidentiality to MWP

vi. dishonestly and fraudulently breaching their fiduciary duties and duty of care owed to MWP;

vi. knowingly participating and assisting in Mr Emmott's alleged wrongdoings;

vi. Mr Slater is said to have failed to act to the standard one would expect of a solicitor of ordinary competence in NSW.

vi. MWP also contends that Slater breached his alleged duty to exercise all reasonable skill, care, diligence and competence that he owed to MWP as a result of negligent advice he gave to a now former client of the plaintiff: Mr Emmott; Mr Emmott vii. Emmott is said to have breached fiduciary duties towards the plaintiff

viii. he is said to have breached the terms and conditions of his employment contracts with the plaintiff.

ix he is accused of earning secret commissions and benefits through his position within MWP Destruction of document allegations x. There have also been particular allegations levelled at Messrs Slater, Nicholls and Emmott, claiming that they took, used and destroyed MWP's documents from October 2005 and continuing throughout the period of their employment. Under billing xi. the same defendants are said to have under billed MWP's clients for work performed by the three of them on behalf of MWP. Allegations against the remaining six defendants xii. Further, MWP seeks to prove that TIL, TSL, TZFE, THL knowingly participated and assisted in the alleged breaches of duty by Messrs Nicholls, Slater and Emmott: That is, the plaintiff pleads causes of action grounded upon allegations of conspiracy and accessorial liability.

xiii. All or some of the remaining six defendants are said to have knowingly participated and/or assisted in any breaches of fiduciary duties or terms and conditions of contract.

xiv. All or some of the six defendants are said to have conspired against the plaintiff. 280 His Honour further outlined the nature of MWP's claims as follows: 21. The plaintiff's case is that before, during and after the occasions when Messrs Slater, Nicholls and Emmott left the employ of MWP, sundry activities were engaged in by each of these persons which constituted wrongdoing of the kind pleaded in the extensive and detailed the Third Further Amended Commercial List Statement. The plaintiff's conspiracy case is that the whole of the staged departures by these persons from the employ of MWP was carefully planned. The plaintiff's case is that during the period from about 19 December 2005, TIL with the assistance and cooperation of THL and Mr Shaikenov assisted, procured and solicited Messrs Nicholls, Slater and Emmott to: (i) prefer the business and interest of TIL and Shaikenov to the business and interests of MWP;

(iii) divert clients and contacts of MWP to become clients and contacts of TIL and Shaikenov;

(iv) solicit staff, consultants ad other personnel and cause them to act in breach of their contract and obligations to MWP;

(v) divert fee and other income, remuneration and compensation from MWP to themselves, TIL, THL and Shaikenov at the expense of MWP;

(vi) wrongly provide, make available for use and disclose confidential, copyright and privileged data, documents and information belonging to MWP and its clients; and 22 The case is that Mr Emmott continued with MWP and during the period when he alone had not yet departed from his employ with MWP, his activities involved his having one foot in his employers camp and the other foot squarely planted in the business activities in which [unknown to MWP] he already had an interest and to which he would migrate once he left MWP. 281 MWP claimed (unsuccessfully) a declaration of a constructive trust over the shares in TIL, TSL and TFZE. In the alternative it claimed an equitable accounting for profits or equitable compensation. As noted elsewhere, in respect of several of the projects, his Honour decided that MWP was entitled to whichever of those two remedies it should elect. 282 In the Principal Reasons his Honour made the following findings:

[132] The Co-operation Agreement had been drafted by Mr Nicholls in such a way as to suggest that he and Mr Emmott were not bound to join in the new business but this was an attempt to disguise what was really an immediate partnership of the three men, the terms of which bound all three immediately to fund the venture.

[136] - [141] Mr Slater sent seven emails to his newly established private Gmail address enclosing documents relating to the Karamandybas (Roxi), Chilisai Phosphate and Urals Gold transactions and deleted the emails from MWP's computer system in an attempt to conceal this activity. He said he could not recall deleting them, denied that the reason would have been to conceal his actions from MWP, but could offer no other explanation. The primary Judge said that Mr Slater's conduct was "not the actions of an honest man" (at [138]).

[160] - [167] After 20 December 2005, Mr Nicholls knew of Mr Emmott's intention to leave MWP and to set up a rival business in Kazakhstan. His Honour rejected Mr Nicholls's testimony that he did not understand that Mr Emmott owed fiduciary obligations to MWP. In an email dated 31 March 2006 (before Mr Emmott left MWP), Mr Nicholls referred to his having set up a consultancy firm with, in effect, Messrs Slater and Emmott. Mr Nicholls knew that Mr Emmott intended to resign with effect from 30 June 2006.

[169] Mr Emmott was highly involved in the affairs of TIL after it was established and while he was still working at MWP, and Mr Slater was fully aware of Mr Emmott's involvement.

[178] Mr Emmott's activities secretly undertaken while he was still at MWP in the interests of TIL following the departure of Mr Slater and then Mr Nicholls were in breach of his fiduciary duty to MWP.

[182] Effectively from around the time when the Co-operation Agreement was made until after he left MWP to join TIL, Mr Emmott was in flagrant breach of the following fiduciary duties: (i) the "no conflict duty"; (ii) the "no profit duty"; (iii) the "duty of loyalty" (including the "duty of disclosure"); (iv) the "no harm" duty (the duty not to inflict harm on MWP in the furtherance of his own interests or those of a competitor); and (v) the "duty of confidence".

[182] Mr Emmott was the backbone of the plot and probably played the dominant role in every step of TIL's initial and ongoing activities.

[183] - [190] Moneys paid to TIL were paid into any one of three bank accounts: a Westpac (Monash University branch) account in the name of Mr Slater; a USD account and a Euro account, each in the name of THL. His Honour found (at [189], [190]): that TIL was established entirely on the basis of income derived from former clients of MWP and on an interest-free loan of $US200,000 made by Horizon Services NV (Horizon) which TIL had repaid from income so derived; and

that save for minor items the bank accounts showed only income derived from former clients of MWP.

[191] - [213] His Honour dismissed a claim against Mr Slater in respect of his allegedly negligent advising of a client of MWP, Big Sky Energy Corporation of which Mr Barry Swersky was the principal. (MWP does not cross-appeal against that dismissal.)

[214] - [221] His Honour found shortcomings in Mr Wilson's evidence but concluded that subject to questions concerning particular claimed losses, he could "with limited exceptions, be accepted as a witness of truth" (at [221]).

[222] - [231] His Honour said that Mr Nicholls's evidence had to be very carefully checked against contemporaneous documents before being accepted and noted that elsewhere in the Principal Reasons his evidence was on occasions rejected.

[232] - [243] His Honour concluded that in numerous respects Mr Slater was a witness whose credit could not be accepted unless corroborated by contemporaneous documents or the testimony of other witnesses accepted as reliable (at [232]). He described Mr Slater's claimed "memory loss" on one matter as "nothing more than a device to avoid telling the truth" (at [235]), and his "credit, save as his evidence is corroborated by contemporaneous documents or by other persons of credit [as] worthless "(at [237]) - emphasis in original).

[244] - [250] His Honour found Mr Schoonbrood to be a reliable witness.

[251] - [270] His Honour described Mr Sinclair as "a witness of credit despite … adopting a fairly partisan approach" (at [270]).

[275], [276] Messrs Nicholls and Slater knew that Mr Emmott owed fiduciary duties to MWP, and that by distributing work to TIL while he was still at MWP, Mr Emmott was breaching his contractual duty of fidelity and his fiduciary obligations to MWP, and with that knowledge they participated in that exercise.

[279] - [283] Messrs Nicholls and Slater breached the "no profit" fiduciary obligation. There was a causal link between the breach and the establishment of TIL, the work done on the Chilisai Phosphate and Urals Gold/Benkala transactions, and the work done for Pinegrove and Roxi on Roxi's admission to the AIM. They were also in breach of the "no conflict" fiduciary obligation.

[289] The tort of conspiracy to injure MWP by unlawful means was made out against Messrs Nicholls and Slater. A purpose of the conspiracy was to injure MWP, although the predominant purpose was to obtain financial advantage from TIL.

[297] - [302] Each of Mr Nicholls and Mr Slater procured a breach by Mr Emmott of his contractual obligations to MWP.

[303] - [364] The application of a common law legal system was a matter of common contemplation or assumption between the parties when they entered into their respective contracts with MWP (at [355]). They intended their contracts to be governed by the law of New South Wales (at [359]). Alternatively, the system of law with which the contracts had their closest and most real connection was that of New South Wales (at [363]). The defendants failed to prove that Kazakhstan law applied to the contracts of employment and MWP had "overwhelmingly" proved that it did not. Even if Kazakhstan law did apply, the presumption that it was the same as local New South Wales law operated (at [364]).

[397] - [427] In relation to the Chilisai Phosphate project , MWP was entitled to elect between an accounting for profits and equitable compensation in relation to legal fees charged by TIL between September 2006 and the pre-IPO issue of shares in Sunkar Resources plc on 30 November 2007.

[436] In relation to the Urals Gold project , MWP was entitled to elect between an accounting for profits and equitable compensation in respect of amounts paid to TIL in the form of legal fees up to and including 30 November 2006.

[445] In relation to the Benkala Copper project , MWP was not entitled to an election between remedies concerning that transaction.

[516] In relation to the Roxi Petroleum project , MWP was entitled to elect between an accounting for profits and equitable compensation concerning the amounts identified by TIL's invoices for work relating to Karamandybas, Ravninnoye and Beibars (Munai), but was not entitled to a remedy concerning amounts received for "Project X" or in respect of amounts received for work done on the re-admission of Roxi (ie, for the ADA and Eragon acquisitions).

[527] In relation to Project Ablai , on which MWP and later TIL worked, MWP was entitled to elect between an accounting for profits and equitable compensation concerning the amounts identified by the invoice relating to that Project.

[534] In relation to the Maersk Oil Joint Venture , MWP was entitled to an election between an accounting for profits and equitable compensation concerning the amount identified by the invoice rendered by TIL for work relating to that Joint Venture.

[541] In relation to Kangamiut , MWP was entitled to an election between an accounting for profits and equitable compensation concerning the amount invoiced by TIL.

[542] - [544] MWP was not entitled to an election between remedies concerning Temujin invoices relating to miscellaneous other matters. 283 Finally, based on expert evidence given by Mr Schilling, his Honour ruled (at [545 - [568]) that MWP was also entitled to an amount for "missed legal costs" - an amount that MWP could have charged in legal fees to the clients that were appropriated to TIL if Messrs Nicholls and Slater had not committed the wrongdoings in question. In a table set out at [561], his Honour identified the "missed legal costs". 284 His Honour said (at [582]) that while the conspiracy count had been made out it was difficult to see what remedy, if any, additional to those just mentioned might still be contended for in relation to that cause of action, and that the same comment seemed applicable to the tort of interfering with contractual relations. He indicated that the parties might make further submissions on this issue. 285 The defendants had sought by notice of motion to have the proceeding dismissed as an abuse of process. His Honour dismissed the motion: [583] - [644]. THE SUPPLEMENTARY REASONS FOR JUDGMENT 286 In the Supplementary Reasons his Honour addressed quantification and the form of the orders to be made. 287 His Honour noted (at [21]) that MWP had elected in favour of equitable compensation as opposed to an accounting for profits. 288 There were three classes of loss for which MWP sought equitable compensation: Deprivation of legal fees that TIL had in fact earned; Deprivation of the opportunity of undertaking further legal work (missed legal costs); and Deprivation of a share in particular investments. 289 The claim for equitable compensation was based largely on an expert report of Mr Schilling. 290 His Honour referred to the principle that no man may take advantage of his own wrong (nullus commodum capere potest de injuria sua propria) as having application, for example, where MWP was not in a position to establish conclusively that TIL had received shares in Sunkar from the pre-IPO placement (at [29] - [32]). 291 His Honour: dismissed the claim with respect of the Benkala Copper project (at [47]); refused to award damages for conspiracy separately from equitable compensation for breach of fiduciary duty (at [48] - [50]); declined to award exemplary damages for "conspiracy" (at [50] - [51]); in reliance on the nullus maxim, included $4,000,000 in the amount of equitable compensation in addition to the other amounts of equitable compensation awarded (at [52] - [60]); held that the accessorial liability in equity and tort of TSL, TIL and TFZE followed the liability of Messrs Nicholls and Slater (at [63] - [65]); dismissed the appellants' abuse of process motion and ordered that the appellants pay MWP's costs on it on the indemnity basis, and otherwise ordered them to pay MWP's costs of the proceeding on the ordinary party and party basis (at [72] - [87]). 292 In view of the conclusion reached below, I need not identify, beyond what has already been said, the reasons that led his Honour to arrive at the aggregate amounts of US$3,508,793.91 and €555,258.94 (I referred above to the basis for the award of $4,000,000). Those reasons can be found in the Principal Reasons at [185] - [190], [393] - [396], [397] - [427], [428] - [436], [446] - [516], [517] - [527], [528] - [534], [535] - [541], [545] - [568], and in the Supplementary Reasons at [27] - [44]. At [43] of the Supplementary Reasons his Honour summarised the amounts awarded in a table which was relevantly as follows: Project Principal at 10/12/2009 Chilisai US$2,116,130.52 Urals Gold US$510,098.37 Ablai US$640,309.06 Lancaster US$27,752.42 Kangamiut US$214,503.54 $US Total $US3,508,793.91

Karamandybas €233,345.70 Ravninnoye €177,036.92 Beibars Munai €144,876.33 Euro Total €555,258.94

THE ARBITRATION 293 The Arbitration was initiated by the giving of notice by MWP to Mr Emmott on 14 August 2006. That was before MWP commenced the New South Wales proceeding on 9 October 2006. On 5 December 2006 MWP invited Mr Emmott to consent to be joined in the New South Wales proceeding. His response was to threaten to seek an anti-suit injunction if MWP should attempt to join him as a party in the New South Wales proceeding. 294 On 29 July 2008, the Arbitration hearing was fixed to commence on 10 November 2008 to deal with "issues relating to liability only, and not to the quantum of any damages nor the evidence required for the taking of an account." 295 The transcript of the proceeding before the Arbitrators was before the primary Judge, as was all of the documentary evidence that was before them. However, the Award, the Seventeenth Procedural Order in the Arbitration made in consequence on 24 March 2010, and a "Clarification" issued by the Arbitrators on 6 April 2010, all post-dated his Honour's Principal Reasons, Supplementary Reasons and orders of 11 December 2009. The result of the Arbitration is summarised in the following paragraphs. 296 The Arbitrators found that by the end of 2004 Mr Emmott had "earned" a one-third interest in MWP as provided for in the Emmott Agreement. By that time he had not committed any breach of fiduciary duty, although he had failed to account for certain commissions received and he remained obliged to account for them, as he had acknowledged in the Arbitration. That failure to account was not a breach of fiduciary duty. The Arbitrators observed that "not every breach of duty by a fiduciary is a breach of fiduciary duty" (quoting from Bristol & West Building Society v Mothew [1998] Ch 1 at 16). They observed (para 8.6) that MWP would have had no defence to a claim by Mr Emmott to have an appropriate shareholding in MWP created (if necessary) and vested in him and they rejected MWP's contention that Mr Emmott's subsequent breaches of fiduciary duty somehow deprived him of his entitlement to the one-third shareholding. 297 The Arbitrators decided not to make a declaration of Mr Emmott's interest and an order that MWP, if necessary, create sufficient shares in itself and cause them to be registered in Mr Emmott's name. Rather, they decided to award monetary relief only by ordering appropriate accounts and inquiries and payment of the sum found due. They observed (para 8.13) that this would have the advantage of enabling MWP to set off against Mr Emmott's entitlement amounts that might be found to be due from him to MWP. 298 The Arbitrators found that Mr Emmott had breached fiduciary duties he owed to MWP. At para 4.188 they found that he did so by failing to disclose to MWP:

• that Mr Slater was to leave MWP after Christmas 2005 and to start to operate TIL;

• that he, Mr Nicholls and Mr Slater had formed the intention to establish TIL; and

• that on 20 December 2005 the three men had signed the Cooperation Agreement and documents to establish TIL.

The Arbitrators inferred that if disclosure had been made by Mr Emmott as his fiduciary obligation required, Mr Wilson would not have allowed him and Mr Nicholls to meet Lancaster but would have made other arrangements. 299 The Arbitrators confirmed the finding of breach of fiduciary duty at paras 4.129 (misleading and failing to inform MWP of Mr Sinclair's intention to transfer his work to TIL and failing to attempt to persuade Mr Sinclair to stay with MWP), 4.134 (failing to inform MWP of the formation of TIL and to advise his clients to instruct MWP alone), 4.180 (concealing from MWP the intention of Messrs Nicholls and Slater to form TIL and their signature of documents on 20 December 2005), and 6.12 (misleading MWP about Mr Slater's departure). At para 6.12, the Arbitrators described Mr Emmott's conduct as "disgraceful and dishonest conduct … towards his quasi-partner Mr Wilson". At para 8.16 they said that Mr Emmott's conduct since the end of 2005 would have fully justified MWP in dismissing him and, had the parties been ordinary partners, then seeking dissolution of the partnership, probably as from the end of 2005. 300 The Arbitrators found that from near the end of 2005 until his departure on 30 June 2006, Mr Emmott was "guilty of sustained, serious and dishonest breaches of fiduciary duty" (at para 8.14). The Arbitrators found that he assisted Messrs Nicholls and Slater to establish TIL and led them to believe that he would joint them after six months as he in fact did. "He did not tell Mr Wilson what was going on, let alone what his own position was, but prevaricated or lied in order to conceal the truth" (para 8.14). He made no attempt to persuade "his" clients, such as Sokol, who instructed MWP only because he was there, to remain with MWP rather than transfer their work to TIL. Since he did not tell Mr Wilson what was intended, he gave MWP no opportunity to attempt to retain the clients. The Arbitrators observed (para 8.14): He should have kept Mr Wilson fully informed of what was going on, and either given his own notice or told MWP clients that he would not be joining Temujin. He should have advised his clients that if they wanted him to continue to undertake work for them while he remained at MWP they would have to instruct MWP to act alone, for he could not accept joint instructions with Temujin without Mr Wilson's consent. 301 The Arbitrators found that Mr Emmott breached cl 2.2.2 of the Emmott Agreement by failing to devote his full time and attention to developing the practice and business of MWP, although until the beginning of 2006 his shortcomings in this respect were not significant and would not normally give rise to a claim for damages. But devoting his time at MWP to assist in the development of a competitor was of a different order, they said, and would sound in damages by way of a reduction in wages, salary or share in profits to which he was otherwise entitled (para 8.15). 302 The Arbitrators also found that MWP breached its part of the Emmott Agreement in stopping Mr Emmott's credit card and local salary and in failing to recognise and give effect to his entitlement to the one-third interest in MWP. 303 At the end of June 2006 Mr Emmott purported to accept this as a repudiatory breach by MWP but the Arbitrators did not think it was (para 8.16). However, Mr Emmott's breach by leaving MWP without giving six months' notice was, they said, a repudiatory breach which MWP had no option but to accept. 304 In relation to remedies, the Arbitrators considered that the most appropriate and convenient course was to take accounts as if the parties were partners and their partnership was dissolved as at 31 December 2005 (para 8.21). 305 Importantly, they declared themselves satisfied that those of MWP's client like Sokol, who had previously instructed Mr Emmott while he was at MWP and followed him to TIL would not have stayed with MWP once Mr Emmott left. This was not merely because they wanted Mr Emmott to do their work: they positively did not want Mr Wilson to have anything to do with it. The Arbitrators explained: if Mr Emmott had retired to England, those clients would have taken their work from MWP to another Kazakhstan firm. Accordingly, so the Arbitrators concluded (para 8.22), MWP was not entitled to either equitable compensation or damages in respect of the loss of those clients to TIL. At para 8.22, the Arbitrators added: Temujin has been found liable in damages by the Australian Court, and if Mr Emmott is a partner in that firm (as to which we have insufficient evidence to form an opinion) he will be liable jointly and severally for Temujin's debt. 306 The finding that MWP suffered no loss as a result of Mr Emmott's breaches in relation to "Mr Emmott's clients" has proved to be important. First, by far the more substantial part of MWP's claim related to those clients (see [292] above). Those clients were Mr Sinclair, Mr Schoonbrood and the various corporate entities associated with them. The other clients, Kangamiut and Lancaster, generated comparatively little in fees. 307 Second, MWP contends that by confining the hearing before them to liability only and not quantum, the Arbitrators made it impermissible for themselves to consider causation of loss. Responding to this suggestion, in their Clarification dated 6 April 2010 the Arbitrators stated that proof of the suffering of some loss is an essential element in obtaining an order for damages to be assessed or an inquiry as to damages. 308 The Arbitrators' conclusion adverse to MWP on causation of loss led MWP to commence a proceeding in the High Court of Justice on 22 March 2010 challenging the Award. By its "Claim form (arbitration)" MWP seeks an order under s 68 of the Arbitration Act 1996 (UK) for remission of the Award to the Arbitrators for reconsideration, and leave to appeal on a question of law under s 69 of that Act. 309 The Arbitrators ordered inquiries as to the value of the loss of opportunity to MWP to obtain instructions from Kangamiut and from Lancaster. The Arbitrators found that in each case the initial contact by the prospective client was with MWP but that the instructions were "intercepted", in the case of Kangamiut by Mr Slater and in the case of Lancaster by Mr Emmott or Mr Nicholls or both of them, and diverted to TIL. 310 By their Seventeenth Procedural Order the Arbitrators ordered: 1. That inquiries be carried out and accounts be taken namely: a. into the value of MWP at 31 December 2005, such inquiry to exclude taking into account any entitlement on the part of MWP to recover commissions or other payments received by Mr Emmott and for which he had not accounted at 31 December 20015; b. into the value of Mr Emmott's 33% interest in MWP after appropriate adjustment for the element of value attributed to MWP's ownership of the Steppe Shares (as defined in the Second Award) as between Mr Wilson and Mr Emmott (see Sections 7.12 and 7.13 of the Second Award;

c. into what sums, if any, were due to Mr Emmott from MWP (or from Mr Emmott to MWP) having regard to Mr Emmott's 33% profit share to 31 December 2005, less his drawings against that profit share, and after taking into account MWP's retention of £225,000 of profits as explained in section 3 of the Second Award and as provided for in cl 2.2.1 of the Emmott Agreement (as defined in the Second Award) (" Mr Emmott's current account ");

d. into the value of the loss of opportunity for MWP to obtain the instructions of Kangamiut Seafoods (see Section 4.178 of the Second Award), and the date upon which such loss was accrued;

e. into the value of the loss of opportunity for MWP to obtain the instructions of Lancaster Group Kazakhstan (see Section 4.181 of the Second Award) and the date upon which such loss accrued; 2. That the following accounts be taken: (i) of all commissions, secret profits or other sums received by Mr Emmott from Richards Butler (as explained in Section 4.29 of the Second Award);

(ii) of all commissions, fees and other sums received by Mr Emmott from ICH [ a reference to Innovative Creative Holdings LV ] and of all disbursements made by him out of such receipts (as explained in Section 4.69 of the Second Award); and

(iii) of all commissions, fees or other sums received by Mr Emmott from Temujin (as defined in the Second Award) before 1 July 2006. 311 There were consequential orders for payments by MWP to Mr Emmott and by Mr Emmott to MWP and for a set off, with the balance either way to be paid forthwith. 312 The Arbitrators dismissed a claim by MWP in relation to 14.75 million shares in Max Petroleum plc. They found that those shares were held by the trustee of Mr Emmott's Bahamian trusts to the order of Mr Sinclair. 313 Finally, the Arbitrators said that it was unnecessary to decide whether the relief granted was "equitable compensation for breach of trust or common law damages for breach of contract". On either footing, they said, damages needed to be assessed at the date of breach, as they had ordered. THE APPEAL AND CROSS APPEAL 314 The amended notice of appeal states 22 grounds of appeal divided into 12 groups, which may be summarised as follows:

I the appellants were denied procedural fairness. There are numerous and diverse matters referred to in support of this ground including, for example, that over the appellants' objection the proceeding was listed for hearing and heard prior to the determination of the Arbitration; a refusal of the primary judge to recuse himself on the ground of reasonable apprehension of bias; and the existence in fact of a reasonable apprehension that his Honour was biased against the appellants (para 1 of grounds of appeal);

II the primary judge failed to find that as a matter of public policy the Court should decline to grant any relief to MWP because of lack of territorial connection with New South Wales (para 2 of grounds of appeal);

III his Honour misapplied principles of private international law relating to "choice of law" (para 3 of grounds of appeal);

IV his Honour erred in declining to find that the proceeding constituted an abuse of process (para 4 of grounds of appeal);

V his Honour failed to publish adequate reasons in support of his final orders (para 5 of grounds of appeal);

VI his Honour failed to make certain findings that arose from the relationship between MWP as an entity carrying on a legal practice and its clients (paras 6-7 of grounds of appeal);

VII in making certain findings in relation to the credit of Mr Wilson, his Honour failed to take into account certain evidence, and further made findings of credit in favour of Mr Wilson and against Messrs Emmott, Nicholls and Slater that were not justified by, and were inconsistent with, the objective evidence (paras 8-9 of grounds of appeal);

VIII the primary judge made numerous findings of fact that were not reasonably supported by evidence or were inconsistent with objective evidence (para 10 of grounds of appeal);

IX the primary judge erred in finding that MWP had made out: an entitlement in equity referable to breaches of fiduciary duties and participation in breaches of such duties;

causes of action in contract (against Mr Nicholls and Mr Slater);

causes of action in tort for inducement of breach of contract (against all appellants); and

causes of action in conspiracy to injure by unlawful means (against Mr Nicholls and Mr Slater) (paras 11-15 of grounds of appeal);

X his Honour erred in his approach to remedies, such as by holding that if, contrary to the appellants' submission, the appellants were liable to MWP in damages at common law, the appellants could be held liable to pay equitable compensation in the same amount rather than being left to their remedy at law (paras 16-20 of grounds of appeal);

XI his Honour erroneously admitted into evidence the evidence of Mr Schilling, erroneously applied that evidence and erroneously attributed probative value to it (para 21 of grounds of appeal);

XII the orders under appeal cannot stand in the light of the Award (para 22 of grounds of appeal). 315 By its notice of cross-appeal, MWP challenges:

A. his Honour's assessment of equitable compensation and common law damages in relation to the shares in Sunkar and the Chilisai Phosphate transaction (his Honour assessed $4,000,000 and MWP contends that the amount should have been 5% of the total market capitalisation of Sunkar of £191.8 million, ie that £9,590,000 should have been awarded as equitable compensation and common law damages);

B. his Honour's dismissal of MWP's claim in respect of the of the Urals Gold/Benkala Copper Project (MWP contends that an amount of 5% of the value of the project namely US$250 million, that is, US$12.5 million, should have been awarded as equitable compensation and common law damages);

C. his Honour's dismissal of MWP's claim in respect of a second group of oilfields that were acquired by Roxi (the Roxi II project) which concerned the readmission of Roxi to the AIM and the ADA and Eragon transactions (according to MWP, his Honour should have held that it was entitled to elect between an account of profits and equitable compensation in relation to the ADA and Eragon transactions pursuant to which there were: (i) project management fees of US$1 million paid in accordance with the ADA and Eragon Agreements of 1 October 2007; and (ii) success fees of US$11.5 million (taken as shares issued) pursuant to the Eragon Agreement of 1 October 2007 and US$17.5 million pursuant to the ADA Agreement (or substitute) of 1 October 2007). GROUNDS OF APPEAL 316 Where there is an appeal on the ground of bias or reasonable apprehension of bias, that ground should be dealt with first. If upheld, it undermines the trial and the remedy must be a retrial, irrespective of the result on other grounds of appeal: see Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577 at [1] - [3] per Gummow A-CJ, [117] per Kirby and Crennan JJ.

Where that ground is sustained, it is important that the appellate court should say nothing in relation to the other grounds of appeal that may cause embarrassment on the re-trial. The findings to be made as to credit and facts are exclusively a matter for the Judge presiding at the new trial on the evidence then placed before the Court. I DENIAL OF PROCEDURAL FAIRNESS - REASONABLE APPREHENSION OF BIAS (para 1 of grounds of appeal). 317 I agree with Basten JA's reasons at [2] - [95]. II LACK OF TERRITORIAL CONNECTION (para 2 of grounds of appeal) 318 I agree with Basten JA's reasons at [98]. III CHOICE OF LAW (para 3 of grounds of appeal) 319 The third ground of appeal is that in various ways his Honour misapplied the principles of private international law relating to "choice of law". In relation to all of MWP's claims the primary Judge applied the law of New South Wales.

Wrongly imposing on the appellants the onus of proving the identity and content of applicable foreign law (ground of appeal 3(a)) 320 His Honour addressed the question of the law that he was to apply at [303] - [364]. He discussed expert evidence on the law of the Republic of Kazakhstan at [318] - [341]. It is wrong to say, as ground of appeal 3(e) asserts, that his Honour failed to have regard to any system of law other than Australian law. That ground correctly asserts, however, that his Honour did not apply any other system of law. 321 In Neilson v Overseas Projects Corporation of Victoria Ltd [2005] HCA 54; 223 CLR 331 (Neilson), Gummow and Hayne JJ observed (at [115]): The courts of Australia are not presumed to have any knowledge of foreign law. Decisions about the content of foreign law create no precedent. That is why foreign law is a question of fact to be proved by expert evidence. 322 Their Honours referred to "the well-known rule that, absent proof of, or agreement about, foreign law, the law of the forum is to be applied" (at [116]). This is commonly referred to as a "presumption" that where foreign law on a question is to be applied under the choice of law rules of the forum, the foreign law to be applied is the same as the law of the forum. The primary Judge cited numerous authorities for this familiar principle (at [313]). (The learned authors of the eighth edition of Nygh's Conflict of Laws in Australia propose the description "default rule" as preferable to that of "presumption" (at [17.37]).) 323 It follows that the onus is on a party asserting that foreign law is applicable and is different from the law of the forum to plead and prove those matters, including what that foreign law is, and that MWP was entitled to rely on the presumption that the law of the forum would be applied unless the appellants pleaded and proved both the applicability and the content of the relevant part of foreign law: see Regie Nationale des Usines Renault SA v Zhang [2002] HCA 10; 210 CLR 491 (Zhang) at [70] - [71] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ; Dyno Wesfarmers Limited v Knuckey [2003] NSWCA 375 per Young CJ in Eq at [49] - [56]; and see Neilson at [125] per Gummow and Hayne JJ. 324 When the case opened before the primary judge the appellants had not pleaded that foreign law applied, let alone what that foreign law was. They sought leave to amend their Commercial List Response and were eventually granted leave to do so with the result that para 87 of the Commercial List Response was introduced reading as follows: Further and alternatively, and in answer to the whole of the Plaintiff's Commercial List Statement, the Defendants say that such, if any, entitlements that the Plaintiff might have in these proceedings must be determined by the law of Kazakhstan as the law governing (a) any contract of employment made between the Plaintiff and the First and Second Defendants respectively; and (b) the conduct of business in Kazakhstan. Particulars Further particulars were provided in the letter from Henry Davis York to Clayton Utz dated 26 June 2009. 325 The text of para 87 pleaded only that by the choice of law rules of the forum, "the law of Kazakhstan" was to be applied by the Court in the two respects mentioned. The text did not identify what the relevant content of that law was. 326 The letter dated 26 June 2009 from Henry Davis York to Clayton Utz referred to in the particulars did not do so either. In particular it did not specify any supposedly applicable principles of Kazakhstan law that were different from the law of New South Wales. Rather, it discussed general principles governing the choice of a foreign legal system, that of Kazakhstan, as providing the law governing MWP's claims in contract, tort and equity. The letter concluded by noting the appellants' contention that MWP bore "the onus of proving its entitlement to relief, including all questions associated with an application of the choice of law rules" and asserted: "The Defendants bear no onus of proof". 327 The position taken in the letter has been maintained. The appellants submit that MWP "bore the onus of proving the whole of its claims for relief, including any applicable foreign law" and that MWP "was not entitled to rely upon any presumption that foreign law was the same as NSW law" While MWP bore the onus of establishing its entitlement to relief, I do not agree that MWP was not entitled to rely on the presumption: it was. 328 The appellants rely upon Damberg v Damberg (2001) 52 NSWLR 492 (Damberg). Damberg was decided before the High Court gave its decisions in Zhang and Neilson. I have referred above to the reasons of Gummow and Hayne JJ in Neilson. In addition, Callinan J in that case said (at [249]) that in the absence of relevant evidence of the Chinese approach to statutory construction, it was right to presume that the Chinese principles of statutory construction were the same as the Australian ones and to use the latter. His Honour said that this approach was consistent with authority in which English law has been applied to resolve questions involving foreign law in the absence of any or sufficient evidence of the foreign law, which must, in the usual case, be pleaded and proved as a fact. Like Gummow and Hayne JJ, his Honour cited Lloyd v Guibert (1865) LR 1 QB 115 at 129, where Willes J, for the Court of Exchequer Chamber, stated: In order to preclude all misapprehension, it may be well to add, that a party, who relies upon a right or an exemption by foreign law, is bound to bring such law properly before the Court, and to establish it in proof. Otherwise the Court, not being entitled to notice such law without judicial proof, must proceed according to the law of England … 329 Heydon J, who, as Heydon JA, had delivered the reasons of this Court in Damberg, accepted (at [267]) the reasons given by Gummow and Hayne JJ and by Callinan J for the proposition that in the absence of evidence of the principles of statutory construction that were applied in China, it was appropriate to employ those that were applied in Australia. 330 Damberg was concerned with the law relating to the avoidance or evasion of capital gains tax. A man placed properties in the names of his son and daughter to avoid German capital gains tax; the properties were sold; capital gains tax was avoided as intended; the children paid the proceeds to their father or to their parents. The father contended that the children held the properties on a constructive trust for him. The trial Judge found that while the presumption of advancement operating between father and child was rebutted, in view of the father's purpose (achieved) of avoiding German capital gains tax, and the fact that the Court should do what it could to avoid the violation of the revenue laws of a friendly foreign country, the Court should treat the transactions as gifts of the properties to the children. Accordingly, the children succeeded in having the payments that they had made of the proceeds of sale treated as loans. 331 It was not proved what the German law on capital gains tax was and the question was whether the Australian law on the subject should be applied. Heydon JA, with whom Spigelman CJ and Sheller JA agreed, considered that it should not be presumed that German law on capital gains tax was the same as the Australian law on that subject. His Honour said (at [162] - [163]): German law on the point must be statutory. German law is not a common law-based system. According to the children, the conduct of the husband was criminal and fraudulent: whether it was criminal depends on the terms of legislation, and whether any fraud had relevant consequences depends on the terms of the legislation also. There is a risk that there may be special machinery and highly individual provisions in German law as there are in Australian tax law: indeed the only evidence of German law, from Mr Stiegler, suggests that it is quite different from Australian law. Taxation law cannot be assumed to be a field resting on great and broad principles likely to be part of any given legal system.

Beyond those considerations, however, there is a decisive factor. The resistance of the children to the resulting trusts which the trial judge found depends on showing some aspect of German law defeating those resulting trusts. They appeal to Nelson v Nelson [(1995) 184 CLR 538] . The High Court majority in Nelson v Nelson called for a close analysis of the relevant German statutory provisions. To substitute for an analysis of relevant German statutory provisions an analysis of irrelevant Australian statutory provisions is simply to fail to carry out the mandate of Nelson v Nelson . 332 The decision in Damberg is not inconsistent with the High Court's later pronouncements in Zhang and Neilson. This is not only because in Nelson v Nelson in circumstances materially similar to those in Damberg, the majority held that refusal to enforce the constructive trust on the ground of illegality of purpose depended upon public policy derived from the statute. In Damberg the law in question consisted of particular statutory provisions dealing with avoidance or evasion of capital gains tax, and there was therefore reason to think that the foreign law was not the same as the Australian law. Heydon JA's remark that taxation law cannot be assumed to be a field "resting on great and broad principles likely to be part of any given legal system" is important. 333 Heydon J did not perceive any inconsistency. As a member of the Court in Neilson, he stated (at [267]): The general correctness of that approach (pursuant to which the relevant foreign law is assumed to be the same as the lex fori if there is no, or only incomplete, proof of the foreign law) has been questioned [his Honour cited Fentiman, Foreign Law in English Courts (1998) pp 149-156], but no argument adverse to its general correctness was advanced in this appeal, and it was described by the respondents as "trite". The only relevant argument was that that approach should not be permitted to result in the plaintiff's success, for that would destroy, by a side-wind, the requirement that only the domestic lex loci delicti be applied. For reasons given below, there is not, in the present case, any requirement of that kind. Further, this Court in [Zhang] said nothing about the approach in question . 334 The present case concerned claims of breach of contract, torts of inducing breach of contract and conspiracy to injure, and claims of breach of fiduciary duty and Barnes v Addy liability associated with breach of fiduciary duty. I do not think that Damberg stands in the way of the presumption required by Zhang and Neilson in relation to such a "field resting on broad principles likely to be part of any given legal system". 335 In the result, his Honour did not err in treating the appellants as bearing the onus of proving the identity and content of particular foreign law applicable.

Failure to find that the law governing the contracts of employment between MWP and Messrs the Nicholls and Slater was the law of Kazakhstan (ground of appeal 3(b)) 336 In Akai Pty Limited v People's Insurance Co Ltd [1996] HCA 39; 188 CLR 418 (Akai), Toohey, Gaudron and Gummow JJ confirmed the approach adopted by Lord Diplock in Amin Rasheed Shipping Corporation v Kuwait Insurance Co [1984] AC 50 at 51 to the effect that the primary way of identifying the proper law of a contract is to ascertain the parties' intention as to the system of law that is to govern their contract, and that if they have revealed no such intention the Court will fix on that system of law with which the contract has its "closest and most real connection". By reference to the principle recognised in Akai and to several matters to which he referred as indications of the contracting parties' intention, the primary Judge considered that the parties had chosen the law of New South Wales to govern their respective contractual relationships (at [352] - [359]). If that conclusion was incorrect, his Honour thought that each contract of employment had its "closest and most real connection" with the law of New South Wales (at [360] - [363]). These were findings of fact, which may or may not be replicated on the evidence before the Court when the proceeding is re-heard. 337 The appellants contend that his Honour should have found that the proper law of the contracts of employment was the law of Kazakhstan. But such a finding would not require that they succeed on this ground of appeal unless they had also proved that Kazakhstan's law of contract was relevantly different from the law of contract of New South Wales. In the absence of such proof, the presumption that the two are the same operated (see above).

Failure to find that MWP's claims in tort were governed by the law of Kazakhstan (ground of appeal 3(c)) 338 In relation to MWP's claims of inducing breach of contract and conspiracy to injure, the presumption referred to above also applied.

Failure to find that subject to s 7 of Foreign Corporations (Application of Laws) Act 1989 (Cth), MWP's claims for equitable relief were to be determined by the law of Kazakhstan (ground of appeal 3(d)) 339 I reject the appellants' submission that MWP's equitable claims were to be characterised as "tort" claims for the purpose of the Australian choice of law principles, although in accordance with [338] above the result would be no different if they were. 340 In National Commercial Bank v Wimborne (1978) 5 BPR [97423] Holland J stated (at 11,982): In my opinion it is, prima facie, a complete answer to this contention [that Swiss law exclusively determined the rights of the parties] that the plaintiffs are claiming equitable rights and equitable remedies. The Equity Court has long taken the view that because it is a Court of conscience and acts in personam, it has jurisdiction over persons within or subject to its jurisdiction to require them to act in accordance with the principles of equity administered by the court wherever the subject matter and whether or not it is possible for the court to make orders in rem in the particular matter. In short, if the defendant is here, the equities arising from a transaction to which he is a party as ascertained by New South Wales law and the equitable remedies provided by that law will be applied to him.

The Equity Court determines according to its own law whether an equity exists, its nature and the remedy applicable. …

This approach may be considered as the " lex fori only" approach. 341 In United States Surgical Corporation v Hospital Products International Pty Ltd [1982] 2 NSWLR 766, McLelland J referred to the above passage from the judgment of Holland J and said (at 796-797): In some circumstances a court of equity will apply equitable principles as administered by itself to found relief against a defendant subject to its jurisdiction in relation to a transaction governed by foreign law, even if similar principles form no part of that foreign law: see Cranstown (Lord) v Johnston (1796) 3 Ves 170; 30 ER 952; Ex parte Holthausen; Re Scheibler (1874) LR 9 Ch App 722. 342 In so far as MWP's claims raised questions of the existence and nature of fiduciary obligations and the remedies available for breach of them, Murakami v Wiryadi [2010] NSWCA 7 (Murakami) is authority for the proposition that those questions were to be resolved by the application of the law of New South Wales. 343 In Murakami, Spigelman CJ, with whom McColl JA and Young JA agreed, considered (at [131]) that the position with respect to fiduciary claims was as stated in the joint judgment of the Full Federal Court in Paramasivam v Flynn (1998) 90 FCR 489 (Paramasivam). The Full Court's starting point was a recognition that where a court of equity had been prepared to assume personal jurisdiction over parties, it had applied its own principles, not foreign law, to determine whether a personal equity existed between them. The Full Court recognised exceptions, such as the exception that might arise where the source of the fiduciary obligation was a contract governed by law other than the law of the forum (at 503B). That is not the present case for reasons mentioned earlier. The Full Court also acknowledged (at 503F) that: … where the circumstances giving rise to the asserted duty or the impugned conduct (or some of it) occurred outside the jurisdiction, the attitude of the law of the place where the circumstances arose or the conduct was undertaken is likely to be an important aspect of the factual circumstances by reference to which the Court determines whether a fiduciary relationship existed and, if so, the scope and content of the duties to which it gave rise. 344 In Murakami, Spigelman CJ discussed "Choice of Law and Equitable Claims" at [128] - [149]. The Chief Justice drew attention to a different "choice of law" starting point supported by Professor T M Yeo in his book, Choice of Law for Equitable Doctrines (OUP, 2004) esp at [Intr 010 - 013], [Intr 020 - 021], [1.01] - [1.13], [2.10] - [2.17], and [8.17]. However, the Chief Justice also directed attention to the Foreword to that book, in which Justice Gummow wrote (at vi) that the question whether an equity exists in the plaintiff founded on the precepts and principles that inform the defendant's conscience is not to be determined by a consideration of foreign law, despite connections with foreign legal systems. 345 In Rickshaw Investments Ltd v Baron von Uexhell [2007] 3 LRC 223, [2006] SGCA 39, the Court of Appeal of the Supreme Court of Singapore, while agreeing with Professor Yeo that the "lex fori only" approach should not be maintained, accepted (at [81]) that in a case where equitable duties arose "from a factual matrix where the legal foundation is premised on an independent established category such as contract or tort, the appropriate principle in so far as the choice of law is concerned ought to be centred on the established category concerned." 346 According to the primary Judge's finding of fact the proper law of the two contracts of employment was the law of New South Wales. Consistently with that finding of fact there was no occasion for an exception to be made to the lex fori only principle.

Failure to determine whether Mr Emmott breached obligations as an officer or member of MWP by applying or having regard to a non-Australian system of law as required by the Foreign Corporations (Application of Laws) Act 1989 (Cth), s 7 (ground of appeal 3(e)) 347 The Foreign Corporations (Application of Laws) Act 1989 (Cth) (No 183 of 1989) provides in s 7 relevantly as follows: (1) The section applies in relation to the determination of a question arising under Australian law (including a question arising in a proceeding in an Australian court) where it is necessary to determine the question by reference to a system of law other than Australian law. (2) Any question relating to whether a body or person has been validly incorporated in a place outside Australia is to be determined by reference to the law applied by the people in that place. (3) Any question relating to: … (e) the rights and liabilities of the members or officers of a foreign corporation, or the shareholders of a foreign corporation having a share capital, in relation to the corporation; or …

is to be determined by reference to the law applied by the people in the place in which the foreign corporation was incorporated . 348 The expression "Australian law" is defined in s 3 of the Act to mean a law in force throughout Australia or a law of, or in force in, a part of Australia, and as including the rules or principles of the common law and equity as so in force. The expression "officer" is defined in the same section in relation to a foreign corporation to include "a director, secretary, executive officer, agent or employee of the foreign corporation". 349 The appellants submit that s 7 required his Honour to determine whether Mr Emmott was in breach of obligations to MWP by reference to the law of the British Virgin Islands, being the place where MWP was incorporated. 350 In written submissions, the appellants contend that s 7 also applied to the question of the liability of each of Messrs Nicholls and Slater, but the amended notice of appeal relates to the liability of Mr Emmott alone. The positions of Messrs Nicholls and Slater may therefore be put to one side although, as will be clear below, the result in relation to them would be no different. 351 The Third Further Amended Commercial List Statement (TFACLS) asserted in para 25 that by reason of, inter alia, Mr Emmott's position as director of MWP, he was in a fiduciary relationship with MWP and owed to MWP fiduciary duties under the laws of England and Wales. No doubt the reference to the laws of England and Wales is explained by the governing law provision contained in cl 5.2 of the Emmott Agreement. In their Commercial List Response, the appellants stated that they did not admit the matters alleged in para 25. 352 It is difficult to understand what the appellants seek to derive from the present ground of appeal. In their Rule 51.36(2) Schedule they complain (para 3) that his Honour erred by finding that the relationship between MWP and Mr Emmott was principally one of employment rather than one of quasi-partnership. But a "quasi-partner", the status which the appellants prefer to attribute to Mr Emmott, is not within the definition of "officer" in s 3 of the Act. 353 It will be recalled that cl 1.1 of the Emmott Agreement provided that the parties agreed that Mr Emmott would "join MWP, as a director and shareholder with effect from 7 January 2002 in accordance with the terms set out in [the Emmott] Agreement", and that cl 2.2 provided that Mr Emmott was to "become a director of MWP, with a thirty three percent (33%) profit-sharing interest, which shall be earned as [set out in the paragraphs that followed]". 354 Paragraph 25 of the TFACLS pleaded that Mr Emmott was a fiduciary by reason of: the terms of the Emmott Agreement; Mr Emmott's position as a senior lawyer and director of MWP; or the high degree of trust placed in Mr Emmott by MWP. 355 Clause 1.4 of the Emmott Agreement (set out at [215] above) inevitably gave rise to fiduciary obligations on the part of Mr Emmott as a quasi-partner. 356 The appellants' submissions do not suggest that the pleaded claim or his Honour's finding was that Mr Emmott was liable as an officer or member as distinct from as a quasi-partner, or that his fiduciary obligations as a quasi-partner were less extensive than those incumbent upon him as an officer. Even if the pleading and his Honour's finding were that the fiduciary obligations arose exclusively from Mr Emmott's position as a director of MWP, I do not think that the result would have been different. 357 The answer to the appellants' submission is simply that it was not "necessary" to determine a question relating to Mr Emmott's liability by reference to a legal system of law other than Australian law within the meaning of subs (1) of s 7 and that for this reason s 7 had no application. 358 Just how far removed the circumstances of the present case are from those to which the Act was directed can be seen by reference to the Second Reading Speech of Senator Robert Ray, the Minister for Immigration, Local Government and Ethnic Affairs, on the Foreign Corporations (Application of Laws) Bill 1989 (Parl Debs, Senate, p 4987, 21 December 1989) in which the Minister said: 1 The Australian Government recently looked at the legal position of companies incorporated abroad which do business in Australia, whether through a branch, local subsidiary or otherwise. One finding was that an Australian court may be called upon to make a decision on a dispute involving such companies by referring to foreign laws, and may well find itself in a situation where it has to choose between conflicting laws of two or more foreign jurisdictions. For example, the court may have to address such questions as the validity of the incorporation of a foreign company, the ownership of shares of such a company or, more generally, the rights and obligations of a foreign company. 2. As a result of the examination, the Government concluded that in some circumstances there were no clear and predictable statutory rules which would overcome the uncertainties relating to claims of corporations of unrecognised states and governments. 3. It is the policy of the Australian Government to encourage foreign investment which it judges to be in the national interest. The Government wishes to ensure that investors can make important decisions in the confidence that their legal rights in Australia will not be adversely affected by extraneous considerations such as the legal status of the territory in which their business is incorporated. 4. The Australian legal system clearly meets this objective in most cases and obviously provides impartial legal services of high quality. However, it has become apparent that the traditional common law approach to the position of foreign corporations under Australian law may not, in some cases, adequately take account of the changes in the international trading system and foreign investment patterns in Australia. 5. Within Australia, there are now corporate entities from diverse political and legal systems and with various ownership arrangements. The sums involved in investment are often large and it is understandable that in such circumstances investors require certainty as to their legal status. In some countries, for example the United States, the courts have clarified the legal status of companies incorporated in unrecognised entities. However this is not the case in Australia and the approach an Australian court would take in dealing with a case involving the rights of foreign corporations from some parts of the world remains unclear. 6. This Bill seeks to address these issues. It deals in general terms with the situation where an Australian court has to determine the legal rights of a foreign corporation by reference to foreign law. Thus, when the ordinary rules of private international law require that rights of a foreign company be determined by reference to a foreign law, the Bill will ensure that the law to be applied will be determined by the place of incorporation of the company, without regard to the political circumstances, questions of official recognition or otherwise of the government authorities there, or the legal status of the place of incorporation. 7. The Bill's approach takes into account the Government's change in recognition policy announced by the then Minister for Foreign Affairs and Trade on 19 January 1988. Under that policy, Australia no longer takes a position on the recognition or non-recognition of particular governments. Australia recognises states only. 8. The government considers that it would now be appropriate to provide for protection of the legal rights of companies incorporated in unrecognised entities. Australian courts, when confronted with cases in which foreign relations questions are raised, traditionally have attached considerable importance to the attitude of the executive government. The Australian Government's view is that as a matter of public policy, the foreign relations considerations should not normally be the overriding factor in the determination of private legal rights, particularly those involving commercial transactions. The Government considers that Australia's public policy interests can be preserved on the one hand, while on the other hand normal commercial relations between private parties can be determined by reference, where relevant, to the law in fact in operation in the place of incorporation. 359 Sub-sections (2) and (3) of s 7 of the Act fulfil the function of identifying which system of law other than Australian law is to apply where it is necessary to determine a question arising under Australian law, including a question arising in an Australian Court proceeding, by reference to a non-Australian system of law. Those sub-sections identify the law applicable in the place where the foreign corporation is incorporated as the law to be applied where the question to be determined is any of the questions identified in the sub-sections. The sub-sections presuppose, however, satisfaction of subs (1). Subsection (1) is not satisfied in the present case. 360 MWP also submits that the present ground of appeal should not be sustained because of the operation of r14.14(2) of the Uniform Civil Procedure Rules. That rule provides that: In a defence or subsequent pleading, a party must plead specifically any matter: (a) that, if not pleaded specially, may take the opposite party by surprise, or (b) that the party alleges makes any claim, … or other case of the opposite party not maintainable, or (c) that raises matters of fact not arising out of the preceding pleading. 361 On the tenth day of the hearing at first instance the appellants raised for the first time the application of s 7. Senior Counsel for MWP indicated that MWP opposed an amendment to raise the section in the absence of particulars. Subsequently, his Honour disallowed the amendment for lack of particulars, while preserving the appellants' right to argue that s 7 operated of its own force and that a pleading of the provision was not required. 362 MWP submits that s 7 is a procedural or evidentiary provision and that in the absence of a pleading specifying the particular liability of Mr Emmott as a member or officer of MWP to which the foreign law was to apply and identification of that law, the appellants were not entitled to rely on s 7. 363 The present issue need not be resolved because, as noted above, subs (1) was not satisfied and ground of appeal 3(e) fails for that reason. My tentative view, however, is that if it had been satisfied, observance of sub-sections (2) and (3) of that section would have been mandatory.

Failure to hold that MWP bore the onus of proving its entitlement to relief, including the onus on all questions of the applicable law (ground of appeal 3(f)) 364 It is unnecessary to say anything in relation to this ground beyond what is said in relation to other grounds, in particular, grounds 3(a) and 3(e).

Failure to hold that on the evidence, in particular that of Professor Butler, MWP had under Kazakhstan law no entitlement to relief against appellants beyond nominal compensation (ground of appeal 3(g)) 365 This ground of appeal is as follows: 3. The Primary Judge misapplied principles of private international law relating to "choice of law" in that: … g. he ought to have held that, on the evidence before the Court (including the evidence of Professor Butler) as to the nature, content and application of the law of Kazakhstan, the Respondent had no entitlement to relief against the Appellants greater than nominal compensation. 366 This ground complains of a failure to make a finding of fact. The question of the findings of fact to be made will be a matter for the Judge who presides at the further hearing to take place on the evidence then before the Court.

Erroneously holding that his Honour could, apparently as a matter of discretion, apply the law of New South Wales without consideration what (if any) entitlements MWP had under the law of Kazakhstan or any other system of law (ground of appeal 3(h)) 367 This ground complains that his Honour chose to apply New South Wales law in the exercise of a discretion "for the purpose of doing justice between the parties" without consideration of what (if any) entitlements MWP had under the law of Kazakhstan or under any other system of law. 368 It is sufficient to say that I do not read his Honour's reasons in that way. IV ABUSE OF PROCESS (para 4 of the grounds of appeal) 369 I deal with the Arbitration aspect of this ground below. As well, I agree with Basten JA at [99] - [109]. V FAILURE TO PUBLISH ADEQUATE REASONS IN SUPPORT OF FINAL ORDERS (para 5 of grounds of appeal) 370 In view of the Court's remission of the proceeding for re-hearing, it is not necessary or appropriate that this ground of appeal be addressed. Moreover, the complaint that his Honour failed to publish adequate reasons in support of his determination that "equitable compensation" of $4 million should be awarded becomes otiose in view of the discussion of the question of that award by Young JA at [178] ff. VI FAILURE TO MAKE FINDINGS ARISING FROM MWP'S CARRYING ON A LEGAL PRACTICE (paras 6 and 7 of grounds of appeal) 371 This ground complains of a failure to make findings. It need not be dealt with beyond what has been said in relation to other grounds, having regard to the remission for re-hearing. VII CREDIT FINDINGS (paras 8 and 9 of grounds of appeal) VIII FINDINGS OF FACT NOT SUPPORTED BY EVIDENCE OR INCONSISTENT EVIDENCE (para 10 of grounds of appeal) IX FAILURE TO MAKE OUT ENTITLEMENTS AND CAUSES OF ACTION (paras 11 - 15 of grounds of appeal) 372 In view of the remission for re-hearing it is not necessary or appropriate for the Court to deal with these three grounds which depend on credit and fact finding - peculiarly matters for the Judge presiding at the re-hearing, X REMEDIES (paras 16-20 of grounds of appeal) 373 I agree with what Young JA has said in relation to these grounds of appeal. XI ERRONEOUS ADMISSION OF MR SCHILLING'S EVIDENCE AND ERRONEOUS APPLICATION OF, AND ATTRIBUTION OF PROBATIVE VALUE TO, THAT EVIDENCE (para 21 of grounds of appeal) 374 In view of the remission for re-hearing, it not necessary or appropriate for the Court to deal with this ground which depends on credit and fact-finding - peculiarly matters for the Judge who will preside over the re-hearing. XII THE ARBITRATION AND THE MOTIONS FOR ADDITIONAL EVIDENCE TO BE RECEIVED General 375 As noted earlier, the Arbitrators delivered the Award on 22 February 2010, made consequential orders on 24 March 2010, and issued a "Clarification" on 6 April 2010. The Clarification was issued in response to letters dated 19 and 22 March 2010 to the Arbitrators from Holman Fenwick Willan, the London solicitors for MWP. 376 The appellants filed a notice of motion on 11 June 2010 seeking an order under sub ss (5), (7) and (9) of s 75A of the Supreme Court Act 1970 (NSW) that the Court receive those documents as additional evidence on the hearing of the appeal. 377 By a responsive notice of motion filed on 18 June 2010, MWP sought an order that para 22 of the amended notice of appeal be "struck out", or, in the alternative, an order that MWP have leave to rely on four documents in response to the documents to be tendered by the appellants. 378 By an amended notice of motion filed on 23 June 2010, the appellants sought leave to put into evidence on the appeal an additional document, namely, an order made by the United States District Court for the District of Colorado (the Colorado Court), dated 8 June 2010 on an application by MWP for judicial assistance under 28 USC s 1782 (the Colorado Proceeding). The Colorado Proceeding was brought against Sokol and Frontier and perhaps also Mr Sinclair and Brian Savage. As noted earlier, Sokol and Frontier were companies associated with Mr Sinclair. The order dismissed an application by MWP for an order that Sokol, Frontier, Mr Sinclair and Mr Savage should show cause why they should not be held in contempt of court. Moreover, the order called upon MWP to show cause on 14 July 2010 why it should not itself be held in contempt of court. 379 On the hearing of the appeal, MWP tendered the order made in the Colorado Proceeding on 14 July 2010 to the effect that the Colorado Court was satisfied that MWP was not in contempt of court. 380 An amended notice of motion filed by MWP on 14 July 2010 amended the primary order sought by MWP to an order that the ground of appeal in para 22 be "dismissed", and in the alternative, sought leave to rely on eight documents in addition to the four that had been identified in the notice of motion. 381 Subsections (5) to (10) of s 75A of the Supreme Court Act 1970 (NSW) provides in relation to appeals such as the present one:

(5) Where the decision or other matter under appeal has been given after a hearing, the appeal shall be by way of rehearing.

(6) The Court shall have the powers and duties of the court, body or other person from whom the appeal is brought, including powers and duties concerning:

(b) the drawing of inferences and the making of findings of fact, and

(c) …. . (7) The Court may receive further evidence.

(8) Notwithstanding subsection (7), where the appeal is from a judgment after a trial or hearing on the merits, the Court shall not receive further evidence except on special grounds.

(9) Subsection (8) does not apply to evidence concerning matters occurring after the trial or hearing.

(10) The Court may make any finding or assessment, give any judgment, make any order or give any direction … which the nature of the case requires. 382 The documents the subject of both notices of motion constitute "fresh evidence", that is to say, evidence concerning matters occurring after the hearing at first instance. Therefore the "special grounds" condition of sub s (8) does not apply: see sub r (9). 383 Sub-sections (5) and (10) of s 75A make it clear that the Court of Appeal may admit the fresh documentary evidence and may decide the appeal on the basis of the law and the evidence as they exist at the time of the appeal; cf New Brunswick Railway Co v British and French Trust Corporation [1939] AC 1 at 32 - 33; Edwards v Noble (1971) 125 CLR 296 at 304 per Barwick CJ; CDJ v VAJ [1998] HCA 67 and 76; 197 CLR 172 at [102] (concerning the power of the Full Court of the Family Court of Australia to receive further evidence on appeal under s 93A(2) of the Family Law Act 1975 (Cth)). 384 Sub-sections (5), (7) and (10) as set out above are interrelated. In deciding whether to exercise the power under subs (10) to receive fresh evidence the Court must have regard to the nature of the appeal as a re-hearing (subs (5)) and may take into account its power under subs (10) to give any judgment or direction or make any order that the nature of the case requires as at the time of the hearing of the appeal: cf CDJ v VAJ. 385 The discretion to receive fresh evidence is not to be exercised according to a formula. Its exercise turns on questions of fact and degree in the individual case. 386 Relevance is a necessary condition, but not a sufficient one. The introduction of fresh evidence may give rise to intractable problems in appellant jurisdiction. For example, the fresh evidence may include oral testimony which will need to be weighed against the testimony of witnesses called at trial, who have not been heard by the appellate court. Factors other than relevance must therefore be taken into account in considering whether to admit fresh evidence. 387 On the hearing of the appeal the Court admitted all of the documents, the subject of both motions provisionally pending a final decision on their admissibility. As well, the Court admitted on the same basis the order of 14 July 2010 made by the Colorado Court. The Award 388 It was not suggested that the fate of the documents associated with the Award should differ from that of the Award itself, and I will refer to "the Award" as encompassing the associated documents. 389 Subject to the relevance of the Award, there are factors favouring its admission into evidence. First, the Award is documentary, its content is uncontroversial and admission of it does not require the Court of Appeal to resolve disputed questions of fact. Second, there is to be an order for a re-trial in any event and it is useful for this Court to decide whether, as the appellants contend, it is an abuse of process for MWP to pursue the appellants in respect of any claims that are inconsistent with the Award. Third, in the present respect the abuse of process ground raises only a question of law. 390 Accordingly, the Award should be admitted if it is relevant. 391 Subject to appeal (see below), the Award was final and binding as between MWP and Mr Emmott. MWP would be estopped from maintaining a claim in New South Wales against Mr Emmott inconsistent with it: Spencer, Bower and Handley, Res Judicata (4th Ed 2009) at [1.08] - [1.09]; Associated Electric and Gas Insurance Services Ltd v European Reinsurance Co of Zurich [2003] 1 WLR 1041 at 1047; Dualcorp Pty Ltd v Remo Constructions Pty Ltd (2009) 74 NSWLR 190 at [48]. 392 It is the law of the forum that would determine whether res judicata or issue estoppel would defeat MWP. In my opinion, it would not matter that cl 5.2 of the Emmott Agreement provided that that Agreement was governed by the laws of England and Wales and that any dispute was to be referred to arbitration in London. It was not suggested, and could hardly be suggested, that under the law of England and Wales an arbitration award is not final and binding subject only to the right of challenge under the Arbitration Act 1966 (UK). 393 The Award does not give rise to res judicata or issue estoppel as between MWP and the appellants because they were not parties to the Arbitration. The appellants submit, however, that the Award is relevant because to enforce the orders under appeal would be an abuse of the processes of the Court for two reasons a. any liability attaching to the Appellants is ancillary, or coordinate with, liability attributed by the Court to Mr Emmott for the purpose of making orders against the Appellants, and entitlements of Mr Emmott and the Respondent have been determined as between themselves in the arbitration. b. the Respondent must be taken to have received from Mr Emmott, by virtue of the Arbitration Award, satisfaction of any liability owed to the Respondent by Mr Emmott (eg, as a "co-conspirator" under the common law or in respect of a breach of fiduciary obligations in equity) in common with the Appellants. 394 It is, of course, the law of the forum that determines whether it is an abuse of the process of the forum for MWP to maintain and seek to enforce the judgment it has obtained against Messrs Nicholls and Slater in the light of the Award. 395 The conduct alleged in the TFASOC is not identical as between Messrs. Emmott, Nicholls and Slater. Of present relevance are the claims that Messrs. Nicholls and Slater knowingly participated and assisted in the breaches of contract by Mr Emmott (para 68); that TIL, TSL and TFZE knowingly participated and assisted in such breaches (para 69); that all three men unlawfully conspired to injure MWP (paras 72, 73); that TIL, TSL and TFZE joined in the conspiracy (para 78); and that each of Messrs Nicholls and Slater induced Mr Emmott to breach the Emmott Agreement (para 79A, 79B). 396 As noted above, his Honour declared that each of Mr Nicholls, Mr Slater, TSL, TIL and TFZE, for all of his or its various wrongs, was jointly and severally liability with the others of them to pay to MWP the same amounts of money. 397 Two aspects of the Award are of present importance. The first is the Arbitrators' finding of a lack of any causal link between Mr Emmott's wrongdoing and the suffering of any loss by MWP in respect of all clients except Kangamiut and Lancaster. The other aspect is the making of the order for a set off of amounts found to be payable by MWP to Mr Emmott against amounts found to be payable by Mr Emmott to MWP, including in the latter amounts payable for the loss to MWP of the opportunity to obtain the instructions of Kangamiut and Lancaster. These last two losses are also among the losses for which the appellants were held liable to compensate MWP by the primary Judge. 398 His Honour decided, inter alia, that Messrs Nicholls and Slater were liable to pay compensation to MWP for having knowingly participated in a breach by Mr Emmott of his fiduciary duty in relation to clients, including clients other than Kangamiut and Lancaster. The Arbitrators decided, however, that MWP suffered no loss as a result of his breaches in relation to "his" clients, and that MWP was not entitled to equitable compensation and damages in respect of the loss of those clients by MWP to TIL (see [305] - [307] above). In the light of the Award, it would be an abuse of process for MWP to seek to sustain and rely upon his Honour's findings and declarations of accessorial liability on the part of Messrs Nicholls and Slater and his orders based on them, in so far as they relate to "Mr Emmott's clients", that is to say the clients other than Kangamiut and Lancaster. 399 At the time of the determination of the appeal the Award is final and binding. At that time MWP is in the position of:

• The Vicar of Sparsholt-cum-Kingston Lisle in Reichel v McGrath (1989) 14 App Cas 665, whose challenge to the validity of his resignation of his benefice had failed in Reichel v Bishop of Oxford (1889) 14 App Cas 259, but who attempted to challenge it again in his defence to an action by the new vicar for possession of the parsonage-house and glebe lands;

• The plaintiff in Haines v Australian Broadcasting Corporation (1995) 43 NSWLR 404 against whom, on his claim for defamation, it was held that the pleaded imputation was incapable of being conveyed by the matter complained, but who then sought to proceed and plead as against different parties in respect of injurious falsehood and misleading or deceptive conduct, relying on substantially the same imputation; and

• the purchasers of the business in Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198 who had failed in a claim against the vendor under s 52 of the Trade Practices Act 1974 (Cth) on the ground that they had not relied on the correctness of the figures in certain financial statements, and who then sued the accountants who had prepared those financial statements for negligent representations founded on the same figures. 400 In the criminal case Rogers v The Queen (1994) 181 CLR 251, Mason CJ at p 256, and in the civil case State Bank of NSW Ltd v Stenhouse Ltd (1997) Aust Torts Reports s 81-423 Giles CJ Comm D at p 64,089, identified two requirements of abuse of process in the "attempt to relitigate an issue" class of case: first, vexation, oppression and unfairness to the other party to the litigation; and second, the bringing of the administration of justice into disrepute. 401 In my opinion both requirements are met here as at the time of the hearing of the appeal. On the assumption that the Award is final and binding, it would be vexatious, oppressive and unfair to Messrs Nicholls and Slater, and it would bring the administration of justice into disrepute that they should continue to bear the accessorial liability described when the Arbitrators have concluded that the conduct of the principal, Mr Emmott, did not cause MWP any loss with the result that he, the principal is not liable. 402 I agree with Basten JA's conclusion at [106] that although the necessary steps could be taken now to remove the offending accessorial claims from the pleading, as a practical matter it is preferable to allow the proceeding initiated by MWP in the High Court of Justice in London to run its course before that step is required to be taken. 403 In relation to the set-off point, I agree with [107] and [108] of the reasons of Basten JA. The Colorado Proceeding documents 404 The appellants submit that the documents in the Colorado Proceeding are relevant as showing that the New South Wales proceeding was part of a world wide oppressive and vexatious campaign by MWP directed against Messrs Emmott, Nicholls and Slater, and was therefore an abuse of the process of the Supreme Court of New South Wales (cf ground of appeal IV (para 4 of grounds of appeal)). Whether this is so turns on findings of fact. His Honour's findings of fact will not survive the order for a retrial. Therefore the Colorado Proceeding documents have lost any relevance they may otherwise have had and should not be admitted. Those documents are not relevant to any ground remaining to be dealt with by us in the light of the Court's sustaining the first ground of appeal. CROSS APPEAL 405 The three grounds of cross appeal were referred to at [315] above. 406 All three turn on complaints about his Honour's findings of fact or an absence of particular findings of fact. In view of the result on the first ground of appeal, it is not necessary or appropriate for this Court to deal with the cross appeal beyond dismissing it (but not on the merits). CONCLUSION 407 For the above reasons I agree that the orders proposed by Basten JA should be made and that the following orders should be made on the motions for leave to adduce further evidence:

(1) On the motion of the appellants, admit as further evidence pursuant to s 75A(7) of the Supreme Court Act 1970 (NSW) (a) the second interim award of the London Arbitrators made on 22 February 2010; (b) the 17th procedural order made by the London Arbitrators on 24 March 2010, and (c) the Clarification made by the London Arbitrators on 6 April 2010.

(2) On the motion of the respondent, admit as further evidence pursuant to s 75A(7) of the Supreme Court Act 1970 (NSW) (a) bundle of documents constituting Exhibit JR1, and (b) bundle of documents constituting Exhibit JR2 each being exhibited to the affidavit of James Malcolm Robinson sworn 18 June 2010. **********

05/10/2010 - Incorrect judgment date on coversheet - Paragraph(s) Coversheet

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