Universal Music Australia Pty Ltd v Sharman License Holdings Ltd

REASONS FOR JUDGMENT 1 On 22 March 2005, at the conclusion of the substantive hearing in these proceedings, Wilcox J made Mareva orders against various of the respondents. One of those orders, Order 6, required that the first to third respondents file and serve by no later than 8 April 2005 an affidavit that discloses with particularity the description and value of their assets. 2 The first and second respondents who were included in Order 6 are companies incorporated in Vanuatu. It is clear that they then knew the terms of the order which Wilcox J had made against them because they were represented in the proceedings before Wilcox J by senior counsel, and on the following day, 23 March 2005, Geoffrey Gee & Partners, a firm of Vanuatu lawyers, wrote to Ridgeway Blake Lawyers, who at some stage in the past have been retained to act on behalf of the applicants, stating that they were aware of what purports to be a worldwide Mareva injunction issued in Australia, that they act for the first and second respondents in Vanuatu, but that they did not accept that the orders were applicable in Vanuatu. The letter concluded with a request that they be advised of any injunction (ex parte or otherwise) which was to be made by the applicants. 3 The order that was made by Wilcox J required the first and second respondents to file an affidavit as to their assets by today. This afternoon application was made on behalf of the first and second respondents for an order that compliance by those respondents with Order 6 be stayed until 14 days after the handing down of reasons for judgment in the proceedings in the Vanuatu Supreme Court referred to in the affidavit of Mr Morris of 8 April 2005 which was filed in these proceedings. Mr Morris' affidavit attaches a copy of the International Companies Act No 32 of 1992 of the Republic of Vanuatu ('the International Companies Act'). Section 125 of that Act provides as follows: '1. Any person who, except when required by a court of competent jurisdiction, with respect to any company otherwise than for the purposes of the administration of this Act or for the carrying on of the business of the company, in Vanuatu or elsewhere, divulges, attempts, offers or threatens to divulge or induces or attempts to induce another person to divulge any information concerning or respecting: a. the shareholding in, or beneficial ownership of any share or shares in a company; b. the management of such company; or c. any of the business, financial or other affairs or transactions of the company, shall be guilty of an offence. 2. Any person who contravenes the provisions of subsection (1) shall, on conviction, be liable to a fine not exceeding $100,000 or to imprisonment for a term not exceeding 5 years or to both such fine and imprisonment.' The court is defined in that Act so as to mean the Supreme Court of Vanuatu. Section 129 of that Act provides that a company may without the necessity of joining any other party, apply to the court, by summons supported by an affidavit, for a declaration on any question of interpretation of the Act or of the constitution of the company. 4 Mr Morris' affidavit gives evidence on information and belief originating from a barrister and solicitor of the Vanuatu Supreme Court that he has been retained to commence proceedings in the Supreme Court of Vanuatu seeking a declaration pursuant to s 129 of the International Companies Act as to whether compliance with the orders of this Court contravenes s 125. The proposed declaration, a copy of which being attached to the affidavit, is not a neutral application for a declaration as to whether compliance with the order would contravene s 125. Rather, it is cast in positive terms in as much as the declaration sought is that compliance with the orders would involve contravention of s 125(1). 5 There is some evidence that the proceedings are to be filed in the Supreme Court of Vanuatu today. I do not know whether they have been but I am prepared to assume for present purposes that they have. There is also evidence that, subject to expedition being granted, the proceedings are likely to come on for hearing in the week commencing Monday 11 April 2005. 6 In my opinion, the first and second respondents have not established a case for the granting of a stay of the orders made by Wilcox J and I am not prepared to make an order in the terms that they seek. Given the hour of night, I propose to state my reasons quite briefly for coming to that conclusion and I do not propose to canvass all of the arguments that were put to me on each side of the record. 7 It is clear, I think, that senior counsel for the first and second respondents was aware at the time of the proceedings before Wilcox J of the provisions of the International Companies Act because senior counsel had told Stone J, before whom the matter had come on a slightly earlier occasion, of those provisions and that he wanted to get instructions from his clients as to whether any point should be taken based upon s 125. It also seems clear that Wilcox J was aware of the provisions of s 125 at the time his Honour made his orders, and there is nothing to suggest that any submission was put to Wilcox J that he should take the provisions of s 125 into account, in deciding whether or not to make those orders. 8 There is no evidence of any subsequent change in circumstances. First, there is no explanation as to why the matter was not put before Wilcox J. All that one knows is that the facts were then known to the respondents and that those facts were not set up in opposition to the making of the order which is now sought to be stayed. Second, it is unclear as to whether an illegality would be involved in compliance with Wilcox J's orders. That is because s 125 has no application where the disclosure is required by a court of competent jurisdiction and the first and second respondents have unconditionally submitted to the jurisdiction of this Court, which, at least in public and private international law terms, is a court of competent jurisdiction. 9 My attention has been drawn to the provisions of the Republic of Vanuatu's Interpretation Act No 9 of 1981 ('the Interpretation Act') which defines 'court' as a court of competent jurisdiction in Vanuatu, whether provided for under the constitution or any law. The Interpretation Act is subject to a contrary intention appearing from the legislation in question. It is by no means clear to me that s 125, when it refers to a court of competent jurisdiction, is limited to a court in Vanuatu which is of competent jurisdiction, and the definition of 'court' contained in the International Companies Act would tend to suggest otherwise. 10 It seems to me that it would be impossible, or if not impossible, undesirable, for me on this application to express a definitive view as to the operation of Vanuatu law when no evidence has been placed before me as to that law apart from the production of copies of the two statutes to which I have referred. However, if the first and second respondents are seeking to stay the orders made by Wilcox J upon the ground that they require them to commit an illegal act for which they may be prosecuted in Vanuatu, there is an onus upon them to establish that there is in truth a real illegality which would expose them to a real risk of prosecution if they were to do so. 11 Associated with that question is the fact that at an earlier stage of these proceedings Wilcox J made an order for discovery against the first and second respondents, and those respondents discovered documents pursuant to that order which, if the stance currently adopted by the first and second respondents is correct, involved them in a contravention of s 125 of the International Companies Act. 12 The second reason why I am not prepared to accede to the application, is that it is grounded as a matter of fact in an assertion that a person by the name of Lindsay Barrett, who is said to be an authorised representative of the first and second respondents, has a fear that if Wilcox J's orders are complied with, he or other authorised representatives making the affidavit could be exposed to criminal proceedings in Vanuatu. The position of Mr Barrett is to my mind entirely equivocal. He appears to be a partner in the firm of BDO Barrett & Partners Vanuatu, which is a firm of accountants whose principal activity is setting up Vanuatu companies. It is not established that he is a director or officer of the first or second respondent, and such information as I do have tends to suggest that he is not. Again, it is by no means clear to me that the only way in which Wilcox J's orders can be complied with is by a person exposed to the criminal laws of Vanuatu making the affidavits required by those orders. 13 Mr Bannon, counsel for the applicants, points to the position of Ms Hemming, who is said to be an Australian resident and the chief executive officer of the first and second respondents, and who, at least on the evidence before me, appears to have been responsible for their establishment. There is at least an available inference that it would be open to her to swear the affidavit in compliance with Wilcox J's orders. And even if s 125 has a construction contrary to the construction which appeals to me at the moment, it has not been established that she would thereby be exposed to a criminal liability. 14 The final thing which persuades me not to grant the stay sought is that the declaration to be sought from the Vanuatu Supreme Court is to the effect that compliance with Wilcox J's orders would involve a contravention of s 129. That is an application which could be made ex parte. There is no evidence as to the way in which it would be made, although Mr Biscoe, counsel for the first and second respondents, stated that upon his instructions, notice of the application would be given to the applicants in these proceedings and that they would be permitted, at least so far as his clients were concerned, to participate in that application. Whether that would be in accordance with the wishes of the Vanuatu Supreme Court may be a different question. Even if the Supreme Court of Vanuatu were to make the declaration sought, that would not conclude the issue as to whether the operation of Wilcox J's orders should be discharged. It is simply one of a number of matters that his Honour would need to take into account in coming to a conclusion upon that question. 15 In short, the delay which has been involved in the making of this application, the absence of evidence as to a change in circumstances and the paucity of the material produced by the first and second respondents to establish that the effect of his Honour's orders is to compel those respondents to commit a criminal offence, lead me to conclude that the notice of motion should be dismissed with costs. 16 Mr Biscoe seeks an order that I should extend the time for compliance with Wilcox J's orders until the close of business next Monday so that his clients can take advice as to appealing the decision which I have just given. That application is opposed by Mr Bannon. Having thought about it for a minute, I do not think I should accede to that application because the application before me is for an application for a stay of the orders pending the events to which I have referred, rather than simply one for an extension of time. It is true that the failure to extend time may mean that the first and second respondents will be in breach of the order made by Wilcox J that their affidavits be filed and served today, but that is, in a sense, on their own heads because it was not until today that they chose to approach this Court for an order for the stay of his Honour's orders. 17 The fact that they approached the Court on the last day for compliance with the order, albeit unsuccessfully, may be a factor relevant to any contempt proceedings should they ultimately be instigated, but I do not think that the fact that the applicants delayed until today to make this application provides a foundation for an extension, particularly as the extension is not sought in order to enable compliance with the order. I therefore decline to grant it. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Hely.