Federal Court of Australia

Porter, in the matter of Slater (No 2) [2020] FCA 1547

ORDERS

THE COURT ORDERS THAT:

1.    The interim application filed on 16 October 2020 by Michael Wilson & Partners, Limited (MWP) is dismissed.

2.    The application for an adjournment of the further hearing made on 16 October 2020 by MWP is refused.

3.    MWP to pay the applicants’ costs of its interim application filed on 16 October 2020 and its application for an adjournment of the further hearing made on 16 October 2020.

4.    Adjourn the matter for further hearing to 19 October 2020 at 10.00 am (AEDT).

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

MARKOVIC J

1    On 16 August 2016 this Court made orders, among others, that:

(1)    pursuant to s 6 of the Cross-Border Insolvency Act 2008 (Cth) (CBI Act), Art 15 and Art 17(1) of the Model Law on Cross Border Insolvency of the United Nations Commission on International Trade Law (Model Law) and r 14.03 of the Federal Court (Bankruptcy) Rules 2005 (Cth), the administration of the bankrupt estate of David Ross Slater by Julie Palmer as trustee of that estate pursuant to proceeding 0215 of 2015 in the Croydon County Court in the United Kingdom (UK) be recognised as a foreign proceeding within the meaning of Art 2(a) of the Model Law within Australia; and

(2)    pursuant to s 6 of the CBI Act and Art 21(1)(e) of the Model Law, the administration and realisation of all of Mr Slater’s assets located in Australia be entrusted to Jason Lloyd Porter and Richard Moretti of SV Partners Insolvency (NSW) Pty Ltd as the local representatives (Australian Representatives).

2    On 15 April 2020 the Australian Representatives commenced this proceeding.

3    In their amended application filed on 13 August 2020 the Australian Representatives seek a number of orders including an order pursuant to s 6 of the CBI Act and Art 21(1)(g) of the Model Law or, alternatively the general law, that they be entitled to payment of a quantified sum from the funds under their control as Australian Representatives for their costs, charges and expenses of the administration of their appointment and that such amount be paid as a priority payment in accordance with s 109 of the Bankruptcy Act 1966 (Cth) (Act) as if the funds recovered by them were assets of a regulated debtor’s estate under that Act and an order that they be discharged from their appointment.

4    The proceeding first came before me for case management hearing on 7 May 2020. At that time Michael Wilson & Partners, Limited (MWP) sought and was granted leave, pursuant to r 2.03 of the Federal Court (Bankruptcy) Rules 2016 (Cth) (Bankruptcy Rules), to be heard in the proceeding. MWP has since been granted that leave and been represented by Michael Earl Wilson who describes himself as a solicitor of the Supreme Courts of New South Wales and Victoria and of the Supreme Court of England and Wales and as a director and head of the branch of MWP in Kazakhstan and head of the representative office of MWP in Azerbaijan.

5    At that time and subsequently, case management orders were made leading to a hearing of the Australian Representatives’ application and the matter was set down for hearing.

6    The proceeding has had a somewhat unsatisfactory and lengthy procedural history.

7    It was first listed for hearing on 21 July 2020. However, the hearing was not concluded on that day as, after dealing with a number of interlocutory issues (described at [8] below) and hearing the Australian Representatives’ submissions, MWP made an application to cross-examine Mr Porter, one of the Australian Representatives. Over opposition I acceded to that application. The proceeding was then adjourned to 25 August 2020 to enable that cross-examination to proceed and to conclude oral submissions.

8    On 25 August 2020, when the proceeding was next listed for hearing MWP sought an adjournment on the basis, as explained by Mr Wilson at the time, that it had sought to brief counsel in New South Wales but had not yet been able to do so. Mr Wilson explained that MWP wished to consider re-filing an application for relief in a form that the Court would find acceptable. I pause to note that MWP had filed an application seeking relief on 20 July 2020 but the Australian Representatives had opposed reliance on that application given its form and the nature of the relief sought. After hearing argument on the first day of the hearing I had refused to permit MWP to proceed with its application in the form filed with the Court.

9    Over the opposition of the Australian Representatives I acceded to MWP’s adjournment application in order to permit MWP a period of time to retain counsel to appear for it in the proceeding. At the time I made orders including an order adjourning the proceeding for further hearing to 16 October 2020 and recorded the following notation:

THE COURT NOTES THAT:

6.    The further hearing was adjourned on the application of MWP. In the event that MWP intends to make any further application for an adjournment, that application is to be supported by an affidavit setting out the evidence upon which MWP relies.

10    On 15 October 2020 MWP forwarded by email to my Associate an interim application (Interim Application) and an affidavit sworn by Mr Wilson on 15 October 2020 (Wilson Affidavit). No orders had been sought by MWP or made by the Court for the filing of such an application. In the Interim Application MWP sought the following orders:

1.    An order that these proceedings be adjourned and stayed, pending the final outcome of the following proceedings:

1.1    those currently before the Equity Division of the Supreme Court of New South Wales, claim No.2016/34380, which is presently on appeal to its Court of Appeal, in appeal Nos. 2019/103863 and 2019/170998, and any further appeal; and

1.2    those currently before the Supreme Court of the Australian Capital Territory in claim Nos.082 SC82 and 336 of 2015 and 402 of 2017, and any further appeal.

2.    The Court give directions.

3.    Costs in the Bankruptcy.

4.    Such further or other orders as the Court, sees fit and deems necessary.

11    Over the objection of the Australian Representatives I allowed MWP to proceed with its Interim Application.

12    At the commencement of argument I asked Mr Wilson, who again appeared for MWP, a matter to which I return in due course, whether the order that was sought was as framed, that is for an adjournment and a stay, or whether in fact the relief sought was simply for a stay pending the determination of the proceedings referred to in paragraph 1 of the Interim Application. Mr Wilson indicated that MWP in fact sought a stay of the proceeding pending the hearing and determination of the nominated proceedings.

13    Notwithstanding that, late in the day and upon making submissions in reply, Mr Wilson indicated that in fact, in the alternative and in the event that the Court was not minded to grant a stay, MWP sought an adjournment of the proceeding on the basis that counsel retained to appear for it was not available on the adjourned date for hearing, 16 October 2020.

14    At the conclusion of hearing the parties’ submissions, I refused MWP’s application for a stay and its application, in the alternative, for an adjournment and made orders dismissing the Interim Application, refusing the application for an adjournment and requiring MWP to pay the Australian Representatives’ costs of the Interim Application and the application for an adjournment. These are my reasons for making those orders.

Background and evidence

15    MWP relied on the Wilson Affidavit. That affidavit comprises 87 closely typed paragraphs, some of which comprise evidence and other parts of which would better be categorised as submissions. It is prolix, in parts argumentative in tone and includes material not relevant to the relief sought in the Interim Application or the adjournment application. Notwithstanding that and in the interests of dealing with MWP’s applications as expeditiously as possible, the Australian Representatives did not make any objections to the Wilson Affidavit save to note that they would make submissions as to the weight to be given to the evidence.

16    The exhibit to the Wilson Affidavit comprises 244 pages. Again, it was difficult to see how all of the material in it was relevant to the applications before me.

17    Given the extent and nature of the evidence before me, I do not propose to set it out in full. Rather, where necessary, I will refer to it to explain the conclusions I have reached. However, before proceeding further it is convenient to do two things.

18    First, it is clear from the evidence before me that MWP has been engaged in litigation in a number of jurisdictions over at least a decade. That litigation has involved MWP on the one hand and three individuals, John Forster Emmott, Robert Colin Nicholls and Mr Slater, on the other. It has also involved, among others, a group of entities described as the Temujin Partnership Entities.

19    On 8 March 2019 in one of the proceedings referred to in the Interim Application and the subject of Mr Wilson’s evidence as described below, namely proceeding 2016/34380 in the Supreme Court of New South Wales (NSW Supreme Court) between MWP as plaintiff and Mr Emmott as defendant (referred to as the NSW-2 Proceeding), Ball J made orders and gave judgment: see Michael Wilson & Partners Ltd v Emmott [2019] NSWSC 218 (MWP v Emmott). In doing so, at [2]-[15] his Honour conveniently set out a summary of the relationship between the parties referred to in the preceding paragraph and of some of the litigation between them including the proceeding before his Honour. I set out below those paragraphs from his Honour’s reasons in order to give some context to the applications now before me:

[2]    On 7 December 2001, MWP and Mr Emmott entered into a contract under which Mr Emmott was to become a director of MWP and to obtain a 33 per cent shareholding in MWP in exchange for agreeing to certain things, including “devoting his full time and attention to developing the practice and business of MWP” and relinquishing rights to share in the net profits of MWP up to an amount of £225,000. The parties also agreed that, notwithstanding the corporate structure, MWP was to operate as a quasi-partnership between them and that each would observe “the usual partnership obligations and duties to each other”. The agreement provided that, on its termination, Mr Emmott had to resign as a director of MWP and sell his shares in MWP to MWP or an entity nominated by it for a price agreed between the parties or, in the absence of an agreement, for a price determined by a panel of experts established in accordance with the agreement. The agreement states that it was to be governed by the laws of England and Wales. The parties agreed to refer all disputes between them to arbitration in London.

[3]    On 24 April 2004, MWP engaged Mr Robert Nicholls, an Australian barrister, as a senior associate and on 1 September 2005 it engaged Mr David Slater, an Australian solicitor, as an associate. The contracts by which Mr Nicholls and Mr Slater were engaged were both expressed to be governed by the laws of New South Wales.

[4]    By the end of June 2006, Messrs Emmott, Nicholls and Slater had left MWP and one or more of them had established a number of companies or other entities (the Temujin Entities) including Temujin International Limited (TIL) and Temujin Services Limited (TSL), both of which were incorporated in the British Virgin Islands and both of which are now in liquidation. Messrs Emmott, Nicholls and Slater, through the Temujin Entities, provided legal and corporate advisory services in Kazakhstan in competition with MWP and took a number of clients from it.

[5]    In accordance with the agreement between MWP and Mr Emmott, MWP commenced arbitration proceedings in London (the Arbitration) claiming damages and compensation for breach of contract and breach of fiduciary duties from Mr Emmott arising from Mr Emmott’s departure from MWP and involvement with the Temujin Entities. At about the same time, it commenced proceedings in New South Wales against Messrs Nicholls and Slater and a number of Temujin Entities including TIL and TSL alleging that Messrs Nicholls and Slater had breached their contractual and fiduciary duties, committed the tort of conspiracy, induced Mr Emmott to breach his contractual obligations to MWP and knowingly assisted him in the breach of his fiduciary duties. It brought ancillary claims against the Temujin Entities, including TIL and TSL.

[6]    On 19 February 2010, the arbitral tribunal (the Tribunal) delivered its Second Interim Award (SIA) dealing with liability. It found that Mr Emmott was liable for breach of fiduciary duties and breach of contract. It also concluded that Mr Emmott had satisfied the conditions of the contract to be entitled to 33 per cent of the shares in MWP before he had committed any breach of duty and that, as a consequence, he was entitled to be paid the value of the shares to which he was entitled. In its Third Award delivered on 5 September 2014 dealing with quantum, the Tribunal concluded that as at 31 December 2013, MWP was indebted to Mr Emmott in the sum of £3,209,613 together with USD2,003,315. The Tribunal also awarded amounts to MWP for the value of work taken by Mr Emmott when he left MWP. However, the Tribunal found that some of the clients taken from MWP would not have remained with it following the departure of Mr Emmott and refused to give relief in respect of the losses suffered as a consequence of the loss of those clients. In the result, it concluded that MWP was entitled to recover the sum of USD218,445. Consequently, it reduced the US dollar component of its award in favour of Mr Emmott to USD1,784,870. In a subsequent “Clarification” delivered on 30 October 2014, the Tribunal accepted that in calculating the value of MWP it had failed to take account of undrawn accumulated profits. Taking those into account, it reduced the US dollar component of its award by USD667,859.

[7]    Following the handing down of that award, Mr Emmott was successful in obtaining from the English Commercial Court worldwide freezing orders against MWP in the amount of £3,209,613 and USD841,213. It appears that the differences between those amounts and the amounts the subject of the award (as amended) are to be explained by the addition of interest and the deduction of amounts paid by MWP. In any event, nothing turns on the differences for the purposes of the current application.

[8]    In the meantime, MWP was successful in the New South Wales proceedings and obtained judgment against Messrs Nicholls and Slater for USD3,508,793.91, €555,258.94 and AUD4,000,000 (see Michael Wilson and Partners Ltd v Robert Colin Nicholls [2009] NSWSC 1033; Michael Wilson and Partners Ltd v Robert Colin Nicholls [2009] NSWSC 1377). It also obtained judgment against TIL and TSL. The decision at first instance was overturned on appeal on the ground that the trial judge ought to have disqualified himself due to a reasonable apprehension of bias and on the ground that the institution of the proceedings was an abuse of process, since MWP had sought relief in the arbitral proceedings for substantially the same breaches of fiduciary duty: see Nicholls v Michael Wilson & Partners Ltd [2010] NSWCA 222.

[9]    The Court of Appeal’s decision was reversed by the High Court (see Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 305; [2011] HCA 48), which remitted the case to the Court of Appeal to deal with a number of outstanding issues raised by the notice of appeal. In a second judgment of the Court of Appeal delivered on 28 November 2012 (Nicholls v Michael Wilson & Partners Ltd [2012] NSWCA 383), the Court of Appeal held that MWP was entitled to equitable compensation from Messrs Nicholls and Slater, TIL and TSL in the sum of USD676,335.00 and €378,160.00 plus interest in respect of work lost from a number of clients including those clients in respect of whom the Tribunal had awarded compensation against Mr Emmott.

[10]    Following the Court of Appeal’s judgment, MWP was successful in bankrupting Messrs Nicholls and Slater and placing TIL and TSL into liquidation. Mr Nicholls has since died.

[11]    At some stage prior to 3 February 2016, MWP took an assignment of the rights that the trustees in bankruptcy of Messrs Nicholls and Slater and the liquidators of TIL and TSL had against Mr Emmott. Relying on those assignments, it commenced these proceedings. The proceedings were commenced by Summons filed on 2 February 2016. However, the Summons was amended the following day and subsequently the Amended Summons was served personally on Mr Emmott.

[12]    Broadly speaking, the Amended Summons claimed two types of relief. First, it claimed in para 1 contribution from Mr Emmott in respect of the liability of Messrs Nicholls and Slater, TIL and TSL pursuant to:

(a)    The judgments arising from the earlier proceedings in Australia (NSW1);

(b)    “all fees, costs, rights and benefits howsoever sought and obtained … related to the legal, business consultancy and other services provided by the Temujin Entities [an expression undefined in the Summons but which apparently includes TIL and TSL]”;

(c)    “all Shares and Other Benefits sought and received … by Emmott, and his designates and nominees, whether acting directly or indirectly”.

[13]    Second, the Amended Summons sought declarations to the effect that on leaving MWP Messrs Emmott, Nicholls and Slater had established a partnership in equal shares which was subsequently dissolved. It also in effect sought an account of all benefits received by Mr Emmott as a partner as well as an account of benefits received by a number of entities said to be associated with him.

[14]    Following service of the Amended Summons and Commercial List Statement, Mr Emmott made an application in England for an anti-suit injunction to restrain MWP from pursuing the proceedings. That application was successful at first instance, but on 31 January 2018 the Court of Appeal of England and Wales delivered a judgment in which it concluded that the anti-suit injunction should not extend to the partnership claims advanced by MWP. It relevantly made orders in the following terms (the English Injunction):

[MWP, by its directors, servants, agents or otherwise, is injuncted against] advancing in NSW2 [these proceedings]: (1) claims which it lost in the arbitration; (2) matters contrary to findings in the arbitration which were adverse to MWP; and (3) claims for fraud or conspiracy. It is expressly recorded that this injunction does not extend to the Temujin partnership claims [defined to be the claims advanced in paras 3 to 9 of the Amended Summons].

On 31 July 2018, the United Kingdom Supreme Court refused permission to appeal from that decision.

[15]    On 8 October 2018, MWP served a proposed Further Amended Summons (FAS) and Amended Commercial List Statement (ACLS) advancing claims said not to be restrained by the anti-suit injunction granted by the English Courts, although, as I have said, it is service of the Amended Summons and Commercial List Statement that Mr Emmott seeks to set aside.

20    Secondly, to the extent the evidence is available from the Wilson Affidavit, I set out the history and nature of the proceedings referred to in paragraph 1 of the Interim Application pending the resolution of which MWP says this proceeding ought to be stayed. There are two categories of proceedings referred to:

(1)    proceeding 2016/34380 in the Equity Division of the NSW Supreme Court, being the NSW-2 Proceeding, and proceedings 2019/103863 and 2019/170998 in the New South Wales Court of Appeal (NSW Court of Appeal) (collectively, NSW Supreme Court Proceedings); and

(2)    proceedings SC 82/2015, SC 336/2015 and SC 402/2017 in the Supreme Court of the Australian Capital Territory (ACT Supreme Court) (collectively, ACT Supreme Court Proceedings).

The NSW Supreme Court Proceedings

21    The following is included at paragraphs 9-15 of the Wilson Affidavit about the NSW Supreme Court Proceedings:

9.    MWP has proven in both England and in Australia from 2006 through to date, and it has been admitted that the Temujin Partnership had assets of ≥US$68,882,182 and ≥US$8,726,758 of cash revenues, as can be seen from Note 13 to the extract from MWP’s consolidated IFRS financial statements, as audited by Messrs Ernst & Young LLP (page 11). The Temujin Partnership continues to bank, trade, do business, hold assets and account in Australia, through no less than seven (7) Australian corporations and trusts.

10.    In light thereof, MWP commenced the NSW-2 proceedings against Mr Emmott on 2 February 2016, by filing and serving a Summons and a Commercial List Statement, given the Australian courts had and have jurisdiction over him, as an Australian, under the CPA, 2005 and the UCPR.

11.    Unfortunately, from 2 March 2016 until 31 July 2018, Mr Emmott wrongly injuncted MWP in England from prosecuting the NSW-2 proceedings, arguing that he had won and MWP had lost all of the Temujin Partnership and project issues in an ad hoc arbitration between him and MWP from 2006 to 2010, until such injunction was lifted by the English Court of Appeal in its judgment of 31 January 2018 at [2018] EWCA Civ 51 (pages 12-24), as upheld by an order of Supreme Court of United Kingdom on 31 July 2018 (page 25), who confirmed that the Tribunal in the ad hoc arbitration had not decided all of the Temujin Partnership and project issues against MWP at all, but instead had mandated the NSW-2 proceedings because of Mr Emmott’s deliberate destruction of computer hard-disc drives, documents and data, refusal to allow joinder and bring his Temujin Partners as witnesses, resistance to and deliberate non-disclosure, and in light of the findings, admissions, judgments, orders and declarations made by the Australian courts (the NSW Supreme Court and its Court of Appeal, and the High Court of Australia).

12.    As a result, on 3 October 2018, MWP filed and served a Further Amended Summons and an Amended Commercial List Statement (pages 26-83) in the NSW-2 Proceedings.

13.    In reply, Mr Emmott, acting in abuse of process and committing a collateral attack on such awards, judgments and orders, by which he is and always was bound, and as a result of which a res judicata and an issue estoppel had arisen, then applied on 1 November 2018 to stay the NSW-2 proceedings, having wrongly stopped the issues being dealt with from early September 2005, when the Temujin Partnership was first formed, through 22 February 2010 in the ad-hoc arbitration, and then wrongly injuncting the same from 2 March 2016 to 31 July 2018, as above.

14.    By a judgment at [2019] NSWSC 218, and related order of Ball J in the NSW-2 proceedings of 8 March 2019, Mr Emmott persuaded Ball J to grant a permanent stay, including by deliberately misleading Ball J as to the status of the Einstein J liability and quantum judgments, declarations and orders in the NSW-1 proceedings, even though Einstein J was fully vindicated and all of his judgments, declarations and orders expressly reinstated by the High Court of Australia through its judgment and orders of 1 December 2011 at [2011] HCA 48, and as is clear from the second NSW SC Court of Appeal judgment of 28 November 2012 at [2012] NSWCA 383, and the admission of all findings of fact, credit and liability by all seven defendants on 25 July 2012, and also by failing to admit his Australian domicile of origin and for tax purposes, by which the Australian courts have jurisdiction over him in accordance with paragraph (g) of Schedule 6 to Rule 11.4 of the UCPR.

15.    Commencing on 3 April 2019, MWP appealed (pages 84-88) from the first-instance judgment of Ball J to the Court of Appeal, which appeal is pending listing for hearing.

22    The NSW-2 Proceeding is expressed to be between MWP “in its capacity as the assignee of the rights of Robert Colin Nicholls (a Bankrupt) and of certain of the rights of: Temujin International Limited (acting both in its own right and as the Trustee of the Temujin International (Trading) Trust) and Temujin Services Limited” as plaintiff and Mr Emmott as defendant. A further amended summons and amended commercial list statement, which Mr Wilson says were filed in the NSW-2 Proceeding on 3 October 2018, were in evidence before me. I infer that these are the pleadings referred to at [15] of MWP v Emmott (see [19] above).

23    A notice of intention to appeal filed on 3 April 2019 in proceeding 2019/103863 in the NSW Court of Appeal between MWP as applicant and Mr Emmott as respondent and a notice of appeal between those parties as appellant and respondent respectively filed on 31 May 2019 in proceeding 2019/103863 were in evidence before me. As Mr Wilson explains in the Wilson Affidavit, that is an appeal from the orders made by Ball J on 8 March 2019 in the NSW-2 Proceeding.

24    On its face, the notice of appeal indicates that the appeal was listed for directions on 26 June 2019. Other than Mr Wilson’s evidence that the appeal is awaiting a listing for hearing, there was no further evidence about the status of that proceeding although I note that Mr Wilson informed me in the course of submissions that it was anticipated that it would be heard before the end of the current court term.

25    There was no evidence before me about the second proceeding said to be in the NSW Court of Appeal, proceeding 2019/170998, referred to in paragraph 1.1 of the Interim Application.

The ACT Supreme Court Proceedings

26    The following is included at paragraphs 16-21 and 26-28 of the Wilson Affidavit about the ACT Supreme Court Proceedings:

16.    On 22 May 2015, MWP reciprocally recognised all of its NSW judgments, declarations and orders in the ACT (pages 89-91).

17.    On 11 August 2015, MWP applied in the ACT SC for a rental redirection, seizure and sale order as to one of the properties of the Bankrupt, as one of the Temujin Partners (pages 92-95).

18.    As Temujin Partners since early September 2005 to date, Messrs Emmott, Slater and Nicholls combined their efforts to fight, delay and resist MWP’s enforcement of its US$14m judgment debts in Australia (NSW and the ACT), New Zealand, England and the BVI, and to avoid allowing inspection, disclosure, an inquiry, the taking of an account and proprietary tracing into the Temujin Partnership’s worldwide assets and cash, and continue to do so, even though MWP has owned 67% since 2015/2016.

19.    On 21 August 2015, Mr Emmott, and EFM/Effective Recoveries were both joined as parties to the ACT SC proceedings by the Order of Mossop P (pages 96-97).

20.    In addition, on 29 September 2015, Mr Emmott also applied to reciprocally recognise an order he had obtained against MWP in England in the ACT SC (pages 98-99).

21.    On 5 October 2017 (funded by MWP) the Trustee of the Bankrupt also applied in the ACT SC to rectify the title to such property (pages 100-108), which had wrongly been registered in the name of the Local Representatives.

…

26.    On 14 February 2020, after reciprocally recognising its Australian judgments in England in April 2014 through the Order of Master Eyre in the English QBD (pages 146-148), placing Mr Nicholls in bankruptcy in Australia in February 2015 by the Order of Lloyd-Jones J (page 149), placing Mr Slater in bankruptcy in England in December 2015 by the Order of Sadd J (page 150), reciprocally recognising his English bankruptcy in Australia in August 2016 through the Order of Gleeson J (pages 151-152) and, finally, causing the Local Representatives and the Trustees of Mr Slater to sell the ACT property in October 2019, and the Trustees of Mr Nicholls to also sell his Mosman property, MWP issued further Notices to Produce in the ACT SC proceedings against Mr Emmott and EFM in February 2020 (pages 153-156), required compliance with all of the prior Notices to Produce since 2015 they had defaulted on, and also made an application in the ACT SC proceedings on 18 March 2020 (pages 157-159) to make them liable and require them to pay.

27.    Messrs Rothwells acting for EFM/Effective Recoveries and Mr Emmott have sought to delay and resist MWP’s application, ever since, and such is on-going.

28.    Subsequently, MWP also filed a joinder application in the ACT SC on 26 August 2020 (pages 160-162), and also a reinstatement application on 23 September 2020 (pages 163-165).

27    The documents relied on my MWP and referred to by Mr Wilson at paragraphs 16-21 and 26-28 of the Wilson Affidavit provide evidence of the following:

(1)    on 22 May 2015 an order was made in proceeding SC 82/2015 between MWP as judgment creditor and Mr Nicholls, Mr Slater, Temujin Services Limited (TSL), Temujin International Limited (TIL) and Temujin International FZE (Temujin FZE) as first to fifth judgment debtors respectively (Registration Proceeding) as follows:

Take notice that an Order from the NSW Supreme Court Court of Appeal (2009/00298561) was registered in this matter on 22 May 2015.

(2)    the orders made by the NSW Court of Appeal in proceeding 2009/00298561 between Mr Nicholls, Mr Slater, TSL, TIL and Temujin FZE as first to fifth appellants respectively and MWP as first respondent on 14 December 2012 (which was annexed to the order referred to in the preceding subparagraph) were as follows:

1.    Appeal allowed in part setting aside the sums specified in paragraphs 8(iii), 16(iii), 20, 24 and 28 of the Orders made by the Court on 11 December 2009.

 2.    Cross appeal allowed in part.

 3.    Appellants to pay the Respondent the following amounts:

(a)    USD 676,335.00; and

(b)    €378,160.00.

4.    The Appellants to pay the Respondent interest up to judgment pursuant to section 100 of the Civil Procedure Act 2005 (NSW) as follows:

(a)    in relation to the amount specified at Order 3(a) above, USD 382,294,89; and

(b)    in relation to the amount specified at Order 3(b) above, €209,444.38.

(3)    by application dated 11 August 2015 filed in the Registration Proceeding, MWP, as judgment creditor, sought orders in relation to a property situated at 41 Officer Crescent, Ainslie, ACT (ACT Property) including an order:

1.    That pursuant to Rule 2201 that the real property owned by the Judgment Debtor, David Ross Slater described as Block 13 Section 97 Ainslie in the Australian Capital Territory, and otherwise known as the 41 Officer Crescent, Ainslie, ACT, and (the “Property”) be seized by the Sherriff of the Supreme Court of the Australian Capital Territory and sold in accordance with the Court Procedures Rules 2006 Rules 2210 to 2235.

The following was included under the heading “Grounds of application”:

1.    To enable the recovery of monies due to the Judgment Creditor which are jointly and severally owed by each of the Judgment Debtors, one of whom is David Ross Slater under a Money order of the New South Wales Supreme Court, Court of Appeal in Proceeding No: 2009/00298561 entered on 14 December 2012 and registered in the Supreme Court of the Australian Capital Territory on 22 May 2015.

Although there are issues raised about the process, it is common ground between the parties that the orders sought by MWP were not made and that, following their appointment, the Australian Representatives realised the ACT Property on behalf of the trustee of Mr Slater’s bankrupt estate;

(4)    on 21 August 2015 the following orders were made in the Registration Proceeding:

1.    that John Forster Emmott, Effective Funds Management Pty Ltd and Westpac Banking Corporation be joined as parties to the proceedings;

2.    that John Forster Emmott and Effective Funds Management Pty Ltd file and serve a notice of intention to respond by 26 August 2015;

3.    that the proceedings be listed on 7 September 2015 at 9.15am for directions and for the making of any interim orders;

4.    that Westpac Banking Corporation be given notice of the terms of these orders at the time of service;

5.    that liberty be granted to any party to have the matter relisted for further directions by email to the associate to Mossop AsJ;

6.    that the question of costs be reserved.

(5)    on 2 October 2015 Mr Emmott as claimant filed an originating application for registration of judgment under the Foreign Judgments Act 1991 (Cth) in proceeding SC 366/2015 in the ACT Supreme Court naming MWP as defendant (Emmott Proceeding) and seeking registration of the following judgment in that court:

Court: The High Court of Justice Queen’s Bench Division Commercial Court

Date of judgment: 26 June 2015

Person in whose favour the judgment was given: John Forster Emmott

Person against whom the judgment was given: Michael Wilson & Partners, LTD

Amount of judgment, including interest:

£3,209,213.00, plus interest from 1 January 2014 at 8% £3,465,950.04 US$841,213.00 plus interest from 1 January 2014 at 8% US$908,510.04

(6)    on or about 5 October 2017 Ms Palmer in her capacity as trustee of the bankrupt estate of Mr Slater commenced proceeding SC 402/2017 against the Registrar-General of Land Titles for the Australian Capital Territory and the Australian Representatives as first to third defendants respectively (Trustee Proceeding) seeking an order under s 161 of the Land Titles Act 1925 (ACT) to correct the Register of Land Titles by requiring and directing the Registrar-General of Land Titles to remove the Australian Representatives as the registered proprietors of the ACT Property and to register Ms Palmer as the registered proprietor of that property;

(7)    on or about 17 February 2020 MWP issued a notice to produce to Mr Emmott and Effective Funds Management Pty Limited, the first and second joined parties respectively, in the Registration Proceeding specifying categories of documents to be produced at the hearing of that proceeding on 24 February 2020;

(8)    on 14 April 2020 MWP lodged an application in the Registration Proceeding seeking four orders including:

1.    That the Estates of the First and Second Judgment Debtors, and the First Joined Party shall be liable for and shall pay MWP’s costs of these proceedings prior to the date hereof, to be assessed if not agreed

2.    That the Second Joined Party, is jointly and severally liable and in contribution for all of the US$14m judgment debts owed to the Judgment Creditor, as a Temujin Partner since early September 2005 to date, as found by the judgments and as admitted;

3.    That the First and Second Joined Parties shall forthwith comply with the two Notices to Produce, as filed and served on them by MWP on 24.11.15, and also of 17.02.20; and

I was informed by Mr Wilson in the course of submissions that there is an error in paragraph 2 set out above in that the reference to the “Second Joined Party” is intended to be a reference to the “First Joined Party”, Mr Emmott, against whom the relief there specified is sought.

The following was included under the heading “Grounds of application”:

1.    In the case of Order 1, it is just and equitable that the Estates of the First and Second Judgment Debtors, together with the First Joined Party (given that Messrs Nicholls, Slater and Emmott have all been partners in the Temujin Partnership since early September 2005 to date, as found and admitted) should bear and pay for all of MWP’s costs of these proceedings to date, given their joint and several liability and in contribution for MWP’s unpaid US$14m of final and binding judgment debts;

2.    In the case of Order 2, it is just and equitable that the First Joined Party (who has been a partner in the Temujin Partnership since early September 2005 to date, as found and admitted, together with Messrs Nicholls and Slater) should be jointly and severally liable, and in contribution, for MWP’s unpaid US$14m final and binding judgment debts;

3.    In the case of Order 3, so as to enable the determination of the veracity and validity of the purported caveat of the Second Joined Party, and also of the sources of, veracity and validity of the alleged funding by the Second Joined Party of the Second Judgment Debtor and the First Joined Party, and any contempt of court committed, given the on-going freezing orders of the NSW Supreme Court, as continued by its Court of Appeal, and of the BVI High Court.

(9)    on 9 September 2020 MWP lodged an application (Consolidation and Joinder Application) in the Registration Proceeding seeking four orders including:

1.    That these proceedings shall be joined, consolidated and case managed together with the claims in and before this court comprising nos. 366 of 2015 and 402 of 2017;

2.    To recognise that MWP stands in the shoes of and acts qua, in the name of and for and on behalf of all of the First to Fifth Judgment Debtors vis-à-vis and as against the First Joined Party (pursuant to the seven (7) deeds of assignment as set out in paragraph IO of MWP’s affidavit of 18th March 2020), who is and has been a Temujin Partner since early September 2005, to date, as found and admitted, and accordingly shall be entitled to file a Notice of Acting also on behalf of the First to Fifth Judgment Debtors, as against the First Joined Party;

3.    Consequent upon the Bankruptcy of both the First and Second Judgment Debtors, their Trustees Messrs J. Cronan and T. Van de Velde, and Ms J. A. Palmer, respectively, and Ms Palmer’s Local Representative, Mr J. L. Porter and Mr N. Ca1ter as the Liquidator of the Third and Fourth Judgment Debtors (as set out in paragraphs 6 to 8 of Mr Wilson's 1st Affidavit of 18th March 2020), shall also be joined as parties to these proceedings, as consolidated;

(10)    on 24 September 2020 MWP lodged an application (Reinstatement Application) in the Registration Proceeding seeking two orders including:

1.    That it is just and equitable for all of the Proceedings to be reinstated in accordance with section 76(2) of the Court Procedural Rules 2006 for the detailed reasons set out below, and are also set out in MWP’s prior applications of 10 March and 25 August 2020, and related affidavits of 18 March 2020, 21 June 2020, 25 August 2020 and 24 September 2020.

28    Although not included in the Wilson Affidavit, Mr Wilson informed me that the Consolidation and Joinder Application and the Reinstatement Application are listed for hearing before McWilliam AsJ in the ACT Supreme Court on 8 December 2020.

Stay application

Legal principles

29    In Burrup Fertilisers Pty Ltd (Receivers and Managers Appointed) v Oswal [2011] FCA 424 (Burrup) McKerracher J considered whether there should be a temporary stay of a proceeding filed in this Court because similar issues had been raised by one of the respondents in proceedings it had commenced 23 days earlier than the proceeding commenced in this Court in the Supreme Court of Victoria. His Honour concluded that the proceeding filed in this Court should not be stayed. In doing so at [8]-[22] McKerracher J set out the principles to be applied when considering whether to order a temporary stay of proceedings. Among other things, at [8]-[10] and [16] his Honour said:

8    The Court has a general power to control its own proceedings pursuant to s 23 of the Federal Court of Australia Act 1976 (Cth). The general power enables the Court to order temporary stay of proceedings in various circumstances including where a proceeding is pending in another court and it is desirable that such earlier proceeding proceed to its conclusion before the Federal Court proceeding is determined.

9    The parties advance arguments by reference to a list of considerations collected in Sterling Pharmaceuticals Pty Ltd v The Boots Company (Australia) Pty Ltd (1992) 34 FCR 287. A number of cases in this Court and others have followed the approach taken by Lockhart J in Sterling Pharmaceuticals. Sterling Pharmaceuticals concerned litigation in New Zealand similar to that subsequently commenced in Australia between related parties. The New Zealand litigation had included the dismissal of an application for an interim injunction. Lockhart J noted that ‘extensive affidavit evidence was filed’ in the New Zealand proceeding. This included a significant number of expert affidavits from witnesses from various countries. Seven interlocutory applications had been heard subsequent to the application for interim injunction relief. Discovery by exchange of lists of documents had occurred and the New Zealand proceeding was expected to occupy some 21 days of hearing and expected to take place before the end of that year. (The application for a stay was heard at the end of February). A stay of the Australian proceeding was sought.

10    Lockhart J noted (at 291):

In my opinion relevant considerations to be taken into account in the present case include the following:

•    Which proceeding was commenced first.

•    Whether the termination of one proceeding is likely to have a material effect on the other.

•    The public interest.

•    The undesirability of two courts competing to see which of them determines common facts first.

•    Consideration of circumstances relating to witnesses.

•    Whether work done on pleadings, particulars, discovery, interrogatories and preparation might be wasted.

•    The undesirability of substantial waste of time and effort if it becomes a common practice to bring actions in two courts involving substantially the same issues.

•    How far advanced the proceedings are in each court.

•    The law should strive against permitting multiplicity of proceedings in relation to similar issues.

•    Generally balancing the advantages and disadvantages to each party.

…

16    The parties, mainly the respondents, have presented arguments by reference to the list in Sterling Pharmaceuticals. Judgments on occasions set out a check list of relevant principles gathered from preceding cases and which may guide the exercise of judicial discretion. That approach is often helpful both for the writer and the reader but more often than not, such a list is accompanied by a caveat perhaps to the effect that the list does not purport to be exhaustive. In this case the description given was that the considerations, in his Honour’s view, ‘include the following’. The fact that such a list is a non-exhaustive guide accords with the task of exercising judicial discretion and sets it apart from ‘ticking off’ strictly prescriptive statutory preconditions. There are occasions of which this is one, where few of the elements in such a list have particularly weighty significance in the circumstances. In this case, the infancy of the litigation in both instances is a significant factor.

See too Oswal v Burrup Fertilisers Pty Ltd (Receivers and Managers Appointed) [2011] FCAFC 117 in which a Full Court of this Court dismissed an appeal from Burrup.

30    In Apotex Pty Ltd v Les Laboratoires Servier (No 6) [2012] FCA 745 (Apotex) Bennett J also summarised the principles relevant to a consideration of whether a court should order a stay of a proceeding in circumstances where there is another proceeding pending in a court or, as was the case before her Honour, an application in the Patent Office. After referring to s 37M of the Federal Court of Australia Act 1976 (Cth) (Federal Court Act), at [8]-[10] her Honour said:

8    As Dodds-Streeton J pointed out in Websyte Corporation Pty Limited v Alexander (No 2) [2012] FCA 562 at [53]:

It is well established that this court has an extensive jurisdiction to stay proceedings in the interest of justice and that the “matter is one of judicial discretion” (See Rochfort v John Fairfax & Sons Ltd [1972] 1 NSWLR 16 at [19] and [21] per Sugerman ACJ (with whom Holmes and Mason JJA agreed)).

9    Websyte concerned an application for a stay of civil proceedings pending the determination of criminal proceedings. At [62] Dodds-Streeton J cited certain guidelines set out by Wootten J in McMahon v Gould (1982) 7 ACLR 202 at 206. Some of those guidelines specifically concerned an application to stay civil proceedings pending criminal proceedings but others are apposite generally, including:

a.    Prima facie a plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of the Court (Rochfort at 19).

b.    It is a grave matter to interfere with this entitlement by a stay of proceedings, which requires justification of proper grounds (Rochfort at 19).

c.    The burden is on the defendant in a civil action to show that it is just and convenient that the plaintiff’s ordinary rights should be interfered with (Jefferson Ltd v Bhetcha [1979] 2 All ER 1108 at 1113).

d.    The Court’s task is one of ‘the balancing of justice between the parties’, taking account of all relevant factors (Jefferson at 1113).

e.    Each case must be judged on its own merits, and it would be wrong and undesirable to attempt to define in the abstract what are the relevant factors (Jefferson at [905]).

10    As stated succinctly by Sundberg J in Clorox Australia Pty Ltd v International Consolidated Business Pty Ltd (2005) 66 IPR 506 at [5], ‘to obtain a stay, an applicant must show that the interest of justice would be best served by its grant’ and the grant of a stay is a discretionary order. Justice Sundberg noted that one example of a circumstance where a stay would be appropriate was where two separate actions are pending in the same court, involving the same parties and the same subject matter, and where the hearing of the first will effectively dispose of the need for the hearing of the second (citing Lidden v Composite Buyers Ltd (1996) 139 ALR 549 per Finn J at 559). His Honour granted the stay even though there was no precise identity of the parties in the two proceedings.

31    As was recognised by Bennett J in Apotex, the provisions of s 37M of the Federal Court Act must be borne in mind. That section provides:

37M     The overarching purpose of civil practice and procedure provisions

(1)    The overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes:

(a)    according to law; and

(b)    as quickly, inexpensively and efficiently as possible.

(2)    Without limiting the generality of subsection (1), the overarching purpose includes the following objectives:

(a)    the just determination of all proceedings before the Court;

(b)    the efficient use of the judicial and administrative resources available for the purposes of the Court;

(c)    the efficient disposal of the Court’s overall caseload;

(d)    the disposal of all proceedings in a timely manner;

(e)    the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute.

(3)    The civil practice and procedure provisions must be interpreted and applied, and any power conferred or duty imposed by them (including the power to make Rules of Court) must be exercised or carried out, in the way that best promotes the overarching purpose.

(4)    The civil practice and procedure provisions are the following, so far as they apply in relation to civil proceedings:

(a)    the Rules of Court made under this Act;

(b)    any other provision made by or under this Act or any other Act with respect to the practice and procedure of the Court.

Consideration

32    As is evident from the Interim Application, MWP sought a stay of this proceeding on two bases: first, pending the determination of the NSW Supreme Court Proceedings and the ACT Supreme Court Proceedings; and secondly, although not evident on the face of the Interim Application but as emerged in the course of submissions, on the basis that there are inquiries and investigations to be made by the Australian Representatives in the exercise of their powers which have not been made to date.

33    The apparent catalyst for the Interim Application seeking a stay seemed to be a judgment given on 6 October 2020 by Judge Pelling QC in a proceeding which I infer to be between MWP and Mr Emmott in, as described at paragraph 35 of the Wilson Affidavit, the “English Commercial Court” and in relation to which Mr Wilson said:

However, on 6 October 2020, HHJ M. Pelling QC in a landmark ex-tempore judgment (transcript ordered and awaited) in the English Commercial Court, basically, found in favour of MWP, and against Mr Emmott, and stayed all and any further enforcement proceedings in England by Mr Emmott against MWP, given that it is clear that Mr Emmott’s liability to MWP:

35.1.    in Australia for its US$14m judgment debts, and for inspection, disclosure, an inquiry, an account and proprietary tracing of the US$68,882,182 of Temujin Partnership assets and US$8,726,758 of cash revenues (through the proceedings before the NSW SC since 2016, and the ACT Supreme Court since 2015), given MWP’s ownership since 2015 of 67% of the Temujin Partnership, of which Mr Emmott owns 33% (as can be seen from paragraphs 30 to 33 of my fifth affidavit before the NSW Supreme Court of 27 August 2020 at pages 173-195);

35.2.    as to the £6,673,333 costs fraud (as can be seen from paragraphs 15 to 26 of my fifth affidavit before the NSW Supreme Court of 27 August 2020 at pages 196-221) perpetrated by Mr Emmott, Messrs Sinclair and Sokol from September 2006 to date, and where MWP’s Application of 16 July 2020, as to such costs fraud has now been listed to be heard commencing 16 December 2020,

can now be seen to easily eclipse, outweigh and exceed whatever former sums Mr Emmott may still try to argue remains owing to him by MWP, on top of the large sums already paid and offset by MWP of ≥£3,319,283 and ≥US$306,368, as proven by MWP in the proceedings before the English Commercial Court from January 2019 to date.

34    At paragraphs 36 and 37 of the Wilson Affidavit, Mr Wilson then sets out what he considers to be the consequence of the judgment delivered by Judge Pelling QC on 6 October 2020 as follows:

36.    Accordingly, MWP is now finally free and able to focus on and progress the NSW-2 and ACT SC proceedings, in a way that was never possible before due to the misconduct of Mr Emmott and his Temujin Partners since early September 2005 to date, Mr Nicholls and the Bankrupt.

37.    In this context it will be necessary for both of the Trustees, and also the Local Representatives to assist MWP and be involved in such proceedings going forward, especially using their powers under the Bankruptcy Act (Commonwealth) to assist as to the inquiry into, the taking of an account and the necessary proprietary tracing into whatever became of the Temujin Partnership assets and cash, most of which are in the hands of Mr Emmott, his designates and nominees, including through no less than seven (7) Australian corporations and trusts in NSW, Victoria and elsewhere. ...

35    In order for MWP to succeed in its application for a stay it was necessary for it to show that it was just and convenient that the Australian Representatives’ entitlement to have their application determined in the ordinary course of the Court’s business should be interfered with.

36    Insofar as MWP sought to have this proceeding stayed until the determination of the NSW Supreme Court Proceedings and the ACT Supreme Court Proceedings (and any appeals therefrom), at the very least MWP would need to establish some interaction or interdependence between the proceedings, for example, common issues to be determined, common witnesses and so on. However, MWP failed to establish any commonality between this proceeding and the NSW Supreme Court Proceedings and/or the ACT Supreme Court Proceedings.

37    The NSW Supreme Court Proceedings concern MWP, on the one hand, and Mr Emmott, on the other. In MWP v Emmott at [16] Ball J summarises the relief sought in the further amended summons filed by MWP in the NSW-2 Proceeding as follows:

The FAS limits the claim for contribution to a claim for contribution in respect of NSW1. It adds a new claim seeking declarations that Mr Emmott was at all material times a shadow director and officer and controller of TIL, TSL, as well as a trust of which TIL is the trustee, and seeks damages and equitable compensation for various breaches of fiduciary and contractual duties in those capacities. It also seeks a declaration that Mr Emmott was a controller of a number of Temujin Entities and seeks an order that in that capacity he is liable “to disclose and bring to the account of [TIL and TSL] any and all revenues and assets” of those entities. Finally, the FAS retains the partnership claims, with some modifications which are not material to the issues currently before the Court.

The evidence before me establishes that one of the proceedings in the NSW Court of Appeal referred to in the Interim Application is an appeal from the orders made by Ball J on 8 March 2019.

38    By way of contrast, this proceeding concerns an application by the Australian Representatives for quantification and payment of their costs and expenses incurred in carrying out their role as Australian Representatives and for discharge from that role.

39    Mr Slater is not a party to the NSW Supreme Court Proceedings and it is not apparent how the relief sought in those proceedings (as described at [37] above) could have any impact on this proceeding. None of the matters which might ordinarily be taken into account and support the ordering of a stay where there is another related or similar proceeding pending in the same or a different court, such as the identification of common issues for resolution, common witnesses and the risk of different findings of fact in relation to common issues, are present here.

40    The situation is no different in relation to the ACT Supreme Court Proceedings.

41    Mr Slater is named as the second judgment debtor in the Registration Proceeding but it is not apparent what relief is sought against Mr Slater in that proceeding which would impact on the resolution of the proceeding in this Court. In any event, even if relief is sought against Mr Slater, there was no evidence that MWP had sought and obtained leave to proceed against Mr Slater in that proceeding. Similarly, that MWP seeks to join the Australian Representatives to that proceeding does not assist it on this application. Once again, it is not apparent what relief is sought against the Australian Representatives. Also relevant is that the Consolidation and Joinder Application was not lodged with the ACT Supreme Court until 9 September 2020 and is not listed for hearing until 8 December 2020. However, this proceeding was commenced on 15 April 2020 and, as at 16 October 2020, was part heard, having been listed before the Court for hearing on two previous occasions.

42    MWP submitted that the extant issues included applications for its costs. But, even if that is so, it is not clear how the resolution of a claim for costs in the Registration Proceeding, the Trustee Proceeding or the Emmott Proceeding could affect the resolution of the issues to be determined in this proceeding. Indeed MWP did not suggest that there are common issues or common witnesses as between this proceeding and the ACT Supreme Court Proceedings.

43    Further, MWP sought a stay of this proceeding until the resolution of the NSW Supreme Court Proceedings and the ACT Supreme Court Proceedings and, in each case, any further appeal. That is, it sought a stay for an indeterminate and potentially lengthy period and did not provide any evidence of the time it might take to resolve the unidentified issues that it contended would impact on the issues to be resolved in this proceeding.

44    Nor did MWP establish that it was in the interests of justice to order a stay of this proceeding on the alternate basis on which it relied, namely that the Australian Representatives should remain in office in order to undertake further investigations into Mr Slater’s estate. At the heart of MWP’s submissions was the suggestion that the proceeding should be stayed, in effect, to keep the Australian Representatives in office so that they could carry out further investigations which it seems may come to light once, according to MWP, the NSW Supreme Court Proceedings and the ACT Supreme Court Proceedings are resolved.

45    MWP submitted that the effect of findings made in proceeding SC 50151/06 heard in the NSW Supreme Court in 2008 and 2009 was that Mr Slater had interests in other companies, which I will refer to as the PJT companies, and that these interests had not been investigated by the Australian Representatives: see Michael Wilson and Partners Limited v Robert Colin Nicholls [2008] NSWSC 501; Michael Wilson and Partners Limited v Robert Colin Nicholls & Ors [2009] NSWSC 1033. MWP also submitted that there had been a failure by the Australian Representatives to undertake any investigations as to Mr Slater’s ownership of a share of the Temujin partnership.

46    As to the former submission, despite Mr Wilson’s detailed explanation of the two lengthy reasons for decision referred to in the preceding paragraph and the references provided to parts of those reasons, they did not assist MWP to establish that Mr Slater had ownership of any of the PJT companies. Even if such findings had been made, they would not assist MWP in this application.

47    As to the latter submission, there was evidence before me, and Mr Wilson accepted, that MWP had in fact acquired Mr Slater’s one-third interest in the Temujin partnership from the trustee of his bankrupt estate. Accordingly, it is difficult to see how there could be any suggestion that the trustee of Mr Slater’s bankrupt estate or her Australian Representatives, at her request, should undertake any investigation in relation to that matter.

48    Perhaps more telling of the reason why MWP sought a stay of this proceeding so as to keep the Australian Representatives in office was Mr Wilson’s email dated 15 October 2020 to, among others, Mr Porter and his solicitors (15 October Email) which relevantly included:

We refer to our prior email to you of 11.10.20, and also to our letter to Markovic J of 13.10.20, on which you were copied.

In our prior email we explained that, and very significantly for all stakeholders concerned, on 6 October 2020, HHJ M. Pelling QC in the English Commercial Court effectively stayed the proceedings before it, in favour of the substantive proceedings underway before the NSW Supreme Court since February 2016 (that were wrongly injuncted until July 2018, and which are currently on appeal to the NSW Court of Appeal), and also the substantive proceedings underway in the ACT SC since 2015, so that:

1)    the joint and several liability, and in contribution of a Mr Emmott (who is and was a Temujin Partners alongside Messrs Slater and Nicholls since early September 2005 to date) for MWP’s US$14m of final, binding and certified Australian judgment debts (in aid of the enforcement of which MWP has on-going worldwide freezing orders of the NSW SC and BVI High Court) can be finally determined; and

2)    inspection, disclosure, the carrying out of an inquiry and proprietary tracing into the Temujin Partnership’s proven and admitted assets of US$68,882,182 and US$8,726,758 of cash (see the extract comprising Note 13 from MWP’s IFRS financial statements audited by EY attached hereto) can be finally carried out, given MWP’s ownership since 2015/2016 of 67% of the Temujin Partnership;

3)    the issues as to a £6,673,333 costs fraud perpetrated on MWP since 2006, can be determined by the English Court.

Obviously, the terrible delays the other side have caused in England and in Australia since 2006, are not the fault of MWP, and can be entirely laid at their door, but we have now broken through that, and the real agenda is now that of MWP, and before us, as to which we will need and would appreciate your on-going help and support, and through which proceedings more than enough identified cash and assets are available (as EY have certified on 28.04.20, and as proven in the Australian and English proceedings) to be realised to ensure you are appropriately reimbursed for your role and contribution.

As previously mentioned, MWP remains willing to discuss and agree with you (subject to contract) certain, further defined funding from now and along the way in order to meet your immediate needs, and to defray any funding concerns you may have. So far we have funded ≥£15,000 and A$25,494 (including the assignment fees, the A$1,669 ACT SC court fee paid by MWP when the Trustee filed her title rectification application in the ACT SC on 12 October 2017, and also MWP’s funding of SH&G of A$40,879 and Capital Lawyers of A$7,781, who acted for and assisted the Trustee after the bankrupts [sic] bankruptcy on 20 December 2015 from 2016 through 2018 onwards), plus all of the fees and costs we have borne ourselves in assisting the Estate. You also control the ≥A$110, 661 currently on deposit with Macquarie Bank since October 2019, earning interest and securing your position.

Accordingly, we believe that these proceedings before the Federal Court should now be stayed and adjourned, pending the final outcome of the above, and currently intend to file an Application as envisaged by paragraph 6 of the Order of Markovic J to that effect, later today, with affidavit evidence in support since, in our view, in light of the above, the real and substantial role always envisaged for the Trustee and her Local Representatives, apart from the simple sale of the Canberra House (which MWP had already secured), has yet to take place, and request you to now consent to the same.

(Emphasis added.)

49    The 15 October Email suggests that the Australian Representatives should continue in their role so as to pursue the “real agenda” being that of MWP identifying assets to meet its claims as a creditor. However, that misunderstands the role of the Australian Representatives. They were not appointed to further MWP’s agenda or its interests as a creditor. They were appointed on the application of the UK trustee in bankruptcy of Mr Slater’s estate, Ms Palmer, as her local representatives to act at her request in this jurisdiction in the identification and realisation of Mr Slater’s assets.

50    Similarly, MWP submitted, first, that it “had a choice” and that it “didn’t have to bankrupt Mr Slater, we could have simply sold the house ourselves … We had an application for rental redirection, seizure and sale. … But we chose instead to appoint the trustee to get their assistance in identifying and gathering the assets in the context of commencing the New South Wales proceedings on 3 February, we then appointed the trustee at about the same time. And in aid of that we also got the bankruptcy recognised in Australia and got the [Australian Representatives] appointed, and that was the whole purpose” and, secondly, that “the whole reason for appointing the trustee and [Australian Representatives] was to assist in identifying and gathering assets in the context of these New South Wales proceedings commenced in February ’16”, which I understand to be a reference to the NSW-2 Proceeding. Once again these submissions illustrate MWP’s misunderstanding of the role of the UK trustee and the Australian Representatives.

51    Relevantly, there were two emails dated 21 August 2020 in evidence before me from Ms Palmer to, among others, Mr Porter:

    in one of those emails Ms Palmer writes:

I confirm I have read and approved the amendments to the application.

    in the other email Ms Palmer writes:

The Australian Representatives have provided us with their application and the supporting affidavits of Mr Porter in these proceedings. We have also been provided with their submissions. We are aware that the matter is listed for a one day hearing in Australia on 21 July 2020. We agree with the orders being sought by the Australian Representatives as to their remuneration and release from their role.

52    Taken together, the effect of these emails is that Ms Palmer has reviewed the amended application filed by the Australian Representatives in this proceeding, the affidavits in support and submissions, and has indicated that she agrees with the orders being sought by them. As I have already observed, the Australian Representatives act at the behest of Ms Palmer who is the trustee appointed under UK bankruptcy legislation to administer Mr Slater’s bankrupt estate. Ms Palmer is content for the Australian Representatives to seek an order discharging them from their role.

53    Ultimately, the discharge of the Australian Representatives, if such an order is made, will not affect the administration of Mr Slater’s estate in accordance with the applicable legislation nor the rights of the creditors of that estate. If the order for discharge is made and it transpires that, at some point in the future, there is further investigation to be undertaken in Australia, Ms Palmer in her capacity as trustee can make a fresh application for the appointment of local representatives to carry out that work. However, at present, it is implicit in Ms Palmer’s agreement with the form of orders sought in the amended application filed in this proceeding, that she does not require the Australian Representative to undertake any further work vis-à-vis the bankrupt estate of Mr Slater.

54    In the circumstances, I was not satisfied that there were proper grounds to justify interfering with the Australian Representatives’ entitlement to have their action heard and determined such that it was just and convenient that this proceeding should be stayed on either of the bases relied upon by MWP.

Adjournment application

55    MWP’s application for an adjournment was brought in the alternative and in the event that a stay was not granted. In support of that application MWP relies on the 15 October Email which, after setting out the matters at [47] above, included the following:

In addition, as you know, MWP retained Mr R. Thomas of Silk Chambers in Canberra to assist in these proceedings, and also in our dealings with you, your counsel and the Court shortly after the last hearing, without waiving privilege MWP retained Mr Thomas because he has been assisting us in the Canberra proceedings, consequent upon the retirement from practice of Mr Vivekananda (who was involved from 2015) due to his ill health caused by renal failure, and obviously these proceedings and the costs incurred relate mainly to dealing with the same of the Canberra House. In those proceedings we are seeking to make EFM/Effective Recoveries and Emmott liable for and to pay the costs and delay they caused and also for the reduced selling price achieved.

Unfortunately, Mr Thomas was otherwise engaged from Monday, September 7 in a 2 week trial, but this became 4 weeks, and then from Tuesday, 6 October 2020 in a 3 day trial, which became 6 days, instead through 14 October 2020. MWP itself was also heavily engaged since August 2020, in the English Commercial Court, as above through October 2020, and then in Canberra through 14 October 2020.

As a result, and in addition to the above, regrettably MWP and Mr Thomas have not yet had enough time and been able to fully and properly prepare for tomorrow’s substantive hearing and, therefore, also now request your consent to an adjournment on that basis, as well.

We raise these issues with you know so that, hopefully we can amicably agree to an adjournment, and avoid any further wasted time and costs.

Obviously, we would be happy to discuss with you by telephone, Zoom, Teams, Webex, Loop-in or Skye [sic] for Business etc.

56    On 15 October 2020 Ms Farmer, a partner of Mills Oakley, the solicitors for the Australian Representatives, responded to the 15 October Email in the following terms:

We are seeking instructions.

In the meantime, would you please provide us with a copy of any Costs Agreement issued by Mr Silk and/or other evidence of his retainer in these proceedings as matter of urgency.

The reference to “Mr Silk” is intended to be a reference to Mr Thomas of Silk Chambers in Canberra.

57    By further email dated 15 October 2020 Mr Wilson responded to Ms Farmer’s email in the following terms:

Thank you for your email, given that the overall situation has now almost entirely changed, we do hope that you will all be able to now agree with our proposal since, with respect, there are bigger fish to fry and for everyone’s benefit, as HHJ M. Pelling QC in the English Commercial Court readily accepted in his judgment in MWP’s favour of 06.10.20, and as EY certified by issuing their clean and clear audit opinion as to MWP’s IFRS financial statements on 28.04.20 after a long audit and verification process (involving three of their audit partners, from two offices of EY, their Head of Technical and Head of Risk), and despite assertions to the contrary by Mr Emmott and his associates.

Without waiving professional privilege (which is reserved), we confirm that, as you are already aware, MWP has engaged Richard Thomas of Silk Chambers as to the ACT SC proceedings and, further, given the apparent close nexus between the ACT proceedings and the work of the Local Reps to date, we also retained him as to these proceedings.

Obviously, documents and correspondence passing between MWP, and its counsel are privileged, including as to retainer terms.

As noted, we would like the assistance of the Local Representatives, the Trustees and yourselves going forward, which was always the intent when we chose BT, and then SVP in 2016, unfortunately from 02.03.16 by wrongful ex-parte injunctions, and other tactics despite being subject to various res-judicatas and issue estoppels since 22 February 2010, committing collateral attacks, and acting in abuse of process, Mr Emmott and his Temujin Partners (even though bankrupt) wrongly conspired to delay the real job being done, but for which the time has now arrived, and from which we will ensure all benefit.

58    As set out at [8]-[9] above, on 25 August 2020, on the application of MWP, this proceeding was adjourned to enable MWP to retain counsel.

59    Based on the email exchange set out above, shortly after that time MWP retained Mr Thomas of counsel to act for it in this proceeding. Despite that, Mr Thomas did not appear at the adjourned hearing. The reason given for that was because Mr Thomas was otherwise engaged in proceedings, the last of which completed on 14 October 2020, not permitting him sufficient time to prepare for the adjourned hearing on 16 October 2020.

60    This proceeding had been adjourned on two occasions on the application of MWP. On the last occasion it was expressly adjourned to enable MWP to retain Australian based counsel. It was, in my view, incumbent on MWP to retain counsel who would be available to appear at the adjourned hearing. MWP failed to do so. That counsel so retained had insufficient time to prepare for the hearing or was retained to appear in other hearings that ran for longer than anticipated is not to the point, particularly given the length of time permitted to MWP to retain counsel.

61    In those circumstances, I was not minded to adjourn the hearing once again, this time to meet the convenience of counsel retained by MWP. In any event, there was no evidence before me as to the further time required by counsel to prepare for the adjourned hearing and thus the length of any proposed adjournment. To accede to yet another adjournment would be contrary to the requirements of s 37M of the Federal Court Act.

Costs

62    The Australian Representatives sought their costs of the Interim Application and MWP’s application for an adjournment. Section 43 of the Federal Court Act confers a wide discretion on the Court to award costs including at any stage in a proceeding.

63    MWP submitted that no order for costs should be made against it as it is not a party to the proceeding.

64    MWP was granted leave to be heard in this proceeding pursuant to r 2.03 of the Bankruptcy Rules which relevantly provides, in relation to persons to whom leave to be heard in a proceeding is granted, that:

(3)    The Court may order the person to pay costs if:

(a)    the granting of leave to the person causes additional costs for a party to the proceeding; and

(b)    the Court considers that the costs should be paid by the person.

65    I was satisfied, having regard to the Interim Application and the application for an adjournment, that MWP had caused additional costs for the Australian Representatives and that it should, in circumstances where it had been unsuccessful, pay their costs of those applications.

Conclusion

66    For those reasons, I made orders dismissing the Interim Application, refusing MWP’s application for an adjournment of the hearing and requiring MWP to pay the Australian Representatives’ costs of the Interim Application and the application for an adjournment.

Associate:

Dated:    26 October 2020