Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Michael Wilson & Partners, Limited v Emmott [2020] NSWCA 245 Hearing dates: 31 August 2020 Date of orders: 2 October 2020 Decision date: 02 October 2020 Before: Meagher JA at [1]; White JA at [2]; Emmett AJA at [3] Decision: Order that: 1. The prayers for relief in paras 1, 2 and 3 of the amended motion dated 6 April 2020 filed on 29 April 2020 be dismissed with costs. 2. The notice of motion dated 24 July 2020 filed on 25 July 2020 be dismissed with costs. 3. The time for complying with Orders 5 and 6 made on 25 November 2019 be extended to the date 14 days from the making of these orders. 4. The appeal and the application for leave to appeal be dismissed if either Order 5 or Order 6 made on 25 November 2019 is not complied with in accordance with the previous order. 5. The motion dated 22 March 2020 filed on 23 March 2020 be otherwise dismissed. 6. The respondent to the motion filed on 23 March 2020 pay the applicant's costs of that motion. Catchwords: CIVIL PROCEDURE — Court of Appeal — Application — Dismissal under UCPR r 51.50 — Compliance with security for costs — Variation of security for costs CIVIL PROCEDURE — Court of Appeal — Review of order of single judge of appeal — Notice to produce — Ambit of documents — Whether oppressive or vexatious Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW) r 51.50 Cases Cited: News Corporation Ltd v Lenfest Communications Inc (1996) 40 NSWLR 250 Michael Wilson & Partners Limited v Emmott [2020] NSWCA 139 Texts Cited: Nil Category: Procedural and other rulings Parties: Michael Wilson & Partners, Limited (Applicant) John Forster Emmott (Respondent) Representation: Counsel: B Hancock (Applicant) J Baird (Respondent) Solicitors: Michael Wilson & Partners, Limited (Applicant) Duggan Legal (Respondent) File Number(s): 2019/103863 (Notices of Motion) 2019/170998 (Appeal) Publication restriction: Nil Decision under appeal Court or tribunal: Supreme Court of New South Wales Jurisdiction: Equity – Commercial List Citation: [2019] NSWSC 218 Date of Decision: 8 March 2018 Before: Ball J File Number(s): 2016/34380 [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Judgment 1. MEAGHER JA: I agree with Emmett AJA. 2. WHITE JA: I agree with Emmett AJA. 3. EMMETT AJA: Introduction These proceedings are concerned with a notice of appeal and an application for leave to appeal filed by Michael Wilson & Partners, Limited (Wilson) on 31 May 2019. Mr John Emmott is the respondent to the notice of appeal and the application for leave, each of which relates to orders made on 8 March 2019 by Ball J. By those orders, Ball J ordered that proceedings brought in the Commercial List of the Equity Division by Wilson against Mr Emmott be permanently stayed. 1. The appeal and the application for leave to appeal were listed for concurrent hearing before this Court on 25 November 2019. On the morning of the hearing, Mr Michael Wilson, a solicitor who is also a director of Wilson, appeared for Wilson. Mr Wilson applied to have the hearing date vacated to enable Wilson to brief counsel. The Court granted the application on terms requiring the provision of additional security for Mr Emmott's costs of the proceedings and the payment by Wilson of Mr Emmott's costs thrown away by the vacation of the hearing. Relevantly for present purposes, the Court made orders as follows (the November Orders): "5. Order the appellant / applicant to pay the respondent's costs thrown away by the vacation of the hearing date in the sum of $10,000. 6. Order that the appellant / applicant provide further security for the costs of the appeal, in a form acceptable to the Registrar, in the amount of $12,500. 7. Order that the costs in order 5 be paid and the further security in order 6 be provided on or before 5 pm on 23 December 2019. 8. If order 7 is not complied with, the prosecution of the appeal and application for leave to appeal is stayed until that payment is made and further security provided." 1. Wilson did not pay the costs ordered or provide additional security by 23 December 2019 as required by Order 7. However, on that day, Wilson filed a notice of motion (the First Motion) seeking to have the November Orders set aside or varied. Wilson also sought an extension of the time allowed by Order 7 for compliance with Orders 5 and 6 until the determination of the First Motion. For reasons that are not presently relevant, the First Motion was not processed by the registry until 31 December 2019. In any event, the date for compliance with Order 7 having passed, the appeal and the application for leave are currently stayed by force of Order 8. 2. On 23 March 2020, Mr Emmott filed a notice of motion dated 22 March 2020 (the Dismissal Motion) seeking an order that Wilson's appeal and application for leave to appeal be dismissed pursuant to r 51.50(2A) of the Uniform Civil Procedure Rules (UCPR). Under UCPR r 51.50(2A), if an appellant fails to comply with an order under UCPR r 51.50, the Court may order that the appeal be dismissed. UCPR r 51.50 provides that, in special circumstances, the Court may order that such security as the Court thinks fit be given for costs of an appeal. The ground relied on by Mr Emmott in the Dismissal Motion is the failure of Wilson to provide security for costs in accordance with Order 6 of the November Orders. 3. On 29 April 2020, Wilson filed an amendment of the First Motion dated 6 April 2020 (the Variation Motion). By the Variation Motion, Wilson sought orders as follows: 1. To set aside or vary the November Orders on the ground that Mr Emmott has no liability for any fees or costs of, and relating to, the proceedings before Ball J and the appeal. 2. To set aside or vary the November Orders on the ground that Mr Emmott has acted and continues to act in breach of the law, rules and regulations and practice as to alleged "conditional" and "contingent" fee agreements. 3. To extend the times set out in Order 7 by which Wilson is required to pay the amount set out in Order 5 and provide the security for costs as set out in Order 6, until a date 35 days after the Variation Motion is finally dealt with, determined and disposed of and the final outcome is known. 4. To stay the November Orders and the Dismissal Motion until whichever of the following is the later to occur: 1. the final outcome and determination is known of certain applications made by Wilson to the Commercial Court of the Queen's Bench Division of the High Court of England and Wales; and 2. the end of the state of emergency in Kazakhstan that was declared on 15 March 2020. 1. On 13 April 2020, Wilson served on Mr Emmott a notice to produce dated 12 April 2020 (the Notice to Produce). Relevantly, the Notice to Produce required production of the following: 1. all documents and correspondence, howsoever relating to Mr Emmott's engagement, whether directly or indirectly, of Messrs Watts McCray; 2. all documents and correspondence, howsoever relating to Mr Emmott's engagement, whether directly or indirectly, of Mr J Baird of Windeyer Chambers; 3. all documents and correspondence, howsoever relating to Mr Emmott's engagement, whether directly or indirectly, of Mr P Duggan and Messrs Duggan Legal (a trading name); 4. all documents and correspondence, howsoever relating to the engagement, whether directly or indirectly, by Messrs Watts McCray, Duggan Legal or Mr P Duggan or others, of Mr J Baird of Windeyer Chambers. 1. Messrs Watts McCray, Mr P Duggan and Duggan Legal and Mr J Baird are all lawyers who have appeared or are appearing for Mr Emmott. The apparent object of the Notice to Produce was to establish that Mr Emmott had no liability for costs, as contended by Wilson in the Variation Motion. Service of the Notice to Produce prompted Mr Emmott to file a notice of motion on 30 April 2020 seeking an order that he is not obliged to produce the documents referred to in the Notice to Produce or, in the alternative, an order that the Notice to Produce be set aside (the Notice to Produce Motion). 2. Prayer 4 of the Variation Motion and the whole of the Notice to Produce Motion were heard by McCallum JA on 11 May 2020. On 10 July 2020, her Honour, for reasons published on that day, ordered that the relief sought in prayer 4 of the Variation Motion be refused and that, until further order, Mr Emmott is not obliged to produce the documents referred to in the Notice to Produce. [1] By notice of motion dated 24 July 2020, which was filed on 25 July 2020 (the Review Motion), Wilson sought orders setting aside or varying the orders concerning the Notice to Produce made by McCallum JA on 10 July 2020. 3. On 31 August 2020, this Court heard argument in relation to the Review Motion, prayers 1, 2 and 3 of the Variation Motion; and the Dismissal Motion. I shall deal with each separately. The Review Motion 1. McCallum JA correctly concluded that the Notice to Produce is oppressive and would require the production of documents that could have no bearing on any issue in the proceedings. Further, as her Honour held, the Notice to Produce fails to identify clearly any specific document that is relevant to a fact in issue and the categories of documents, production of which is sought, are so broad as to be oppressive or vexatious. 2. As indicated above, each of the categories of documents sought in paragraphs 1, 2, 3 and 4 of the Notice to Produce is described as "all documents and correspondence, howsoever relating to" the engagement of present and former solicitors and counsel. The Notice to Produce is quite unlimited as to the time or subject of the engagements referred to. While each paragraph is expressed to "include without limitation" costs agreements and the like in relation to any assets of Wilson or recovery obtained from Wilson, the four paragraphs would cover any engagement by Mr Emmott of any of the lawyers at any time for any reason. McCallum JA made no error in concluding that the Notice to Produce need not be complied with on that ground and, accordingly, this Court should not interfere with the orders made by McCallum JA. 3. McCallum JA also accepted that Mr Emmott ought to be excused from producing documents in answer to the Notice to Produce on the ground that he had not submitted to the jurisdiction of the Court and that the Notice to Produce should properly be regarded as a step in aid of Wilson's attempt to establish jurisdiction, by challenging the adverse decision of Ball J on that question. [2] Her Honour concluded that Mr Emmott should not be taken to have acted inconsistently with his objection to the Court's jurisdiction and that, accordingly, he should not be required to comply with the Notice to Produce. In light of the above conclusion, it is unnecessary to make any further comment about that ground. However, the Court should not be understood as accepting the correctness of her Honour's conclusion in relation to that ground. The Variation Motion 1. In support of the Variation Motion, Wilson relied upon the proposition that the November Orders should not have been made because Mr Emmott has no liability to pay costs to his lawyers. In that regard, Wilson pointed to a letter of 13 November 2019 written by Mr Baird, of counsel, to Mr Emmott, relevantly saying as follows: "I refer to our conditional costs agreement of 28 September 2018. I confirm that I am prepared to appear and continue appearing for you in relation to the above Appeal upon the same terms and conditions as are contained in that Costs Agreement. In relation to paragraph 4 of the Costs Agreement, I confirm that I will not charge for any fees in the event that [Wilson]'s above Appeal is successful." The conditional costs agreement of 28 September 2018 was not in evidence. 1. It is significant that the letter of 13 November 2019 was written less than 13 days before the hearing date. Further, it is by no means clear that the conditional arrangement referred to in the letter of 13 November 2019 would extend to the vacation of the hearing date and the additional costs involved by reason of the unexpected vacation of the date for hearing. 2. Be that as it may, the Variation Motion must be considered in the light of the exchanges that took place between Mr Wilson and the Court on 25 November 2019. The application to vacate the hearing on 25 November 2019 was made orally by Mr Wilson, who first apologised for applying for an adjournment at short notice, saying that Wilson wished the appeal to proceed, all of the appeal books having been prepared and security for costs having been provided. Wilson had already provided security in the sum of $27,500. 3. When Mr Wilson was asked what he said about the costs thrown away by the adjournment, he said that he would not resist an order for Wilson to pay reasonable costs thrown away. When asked whether it was possible to assess the costs thrown away, Mr Wilson was recorded as responding as follows: "I don't there are large such costs [sic]." That is probably a mis-transcription of precisely what was said. However, the purport is clear, namely, that the quantum of costs thrown away would not be large. It was then suggested to Mr Wilson that counsels' fees and solicitors' costs of the day would not exceed $10,000 and that the Court could make a lump sum order for $10,000 and release security to that extent. Mr Wilson responded that, "in that scenario", there would be no need to release any security and that Wilson would have no problem in making a payment. Mr Wilson agreed that he contemplated that, if the Court ordered costs $10,000 payable forthwith, the security already provided would remain in place. 1. Discussion then ensued concerning the possible length of the appeal hearing. Mr Wilson intimated that the appeal could last for more than one day. He agreed that, in those circumstances, it would follow that the security for costs should be increased. In the course of discussion concerning the quantum of the increase, Mr Wilson said as follows: "Secondly the – in making such an application, [counsel for Mr Emmott] and the firm, Watson McCrae, disclosed their retainer agreements which clearly indicate total conditionally but if they were to lose they have no liability for fees and costs. And that took us somewhat by surprise, when we saw those engagement terms. And it is quite consistent with the position of [Mr Emmott] in England where before Lewison LJ, his counsel said they look entirely to, to recover any costs and they accept that [Mr Emmott] isn't liable for costs. So the position in Australia on costs seems to be the same, based on the engagement letters we've seen. So there is a real issue of liability for costs." 1. After further discussion concerning the quantum of the increase in the security for costs, the Court indicated that the adjournment application would be granted on the basis that Wilson should pay the costs thrown away, in an amount that was agreed at $10,000, and that the security for the costs of the appeal be increased to $40,000, with the proceedings being stayed in the event that the costs are not paid or the security is not provided within 28 days. Mr Wilson responded: "Yes, and that would be fine, your Honour." 1. Clearly enough, Mr Wilson adverted to the possibility that, because of a conditional arrangement as to fees, Mr Emmott may or may not have a liability to his lawyers for costs. Nevertheless, it is clear that, as a term of the grant of the indulgence sought on behalf of Wilson, Mr Wilson accepted that Wilson should pay to Mr Emmott the sum of $10,000 in respect of the costs thrown away by the adjournment and accepted the terms of the grant of the indulgence, namely, that the sum of $10,000 be paid as compensation for costs thrown away. There is no reason, therefore, to vary the order made by consent to pay an amount for costs thrown away by the adjournment. 2. For different reasons, the order for the provision of further security should not be varied. That is to say, if Wilson is unsuccessful in the appeal and Mr Emmott in fact has no liability for the costs of the appeal, the security would be returned to Wilson. There is, accordingly, no reason to vary the order to provide further security, even if Mr Emmott would have no liability to his lawyers if the appeal were successful. 3. None of the November Orders should be varied. The balance of the Variation Motion should be dismissed with costs. The Dismissal Motion 1. The conduct of Wilson has hardly been exemplary. However, before the expiration of the time fixed for the payment of the costs and the provision of security, Wilson applied for a variation of the orders, albeit on the very last day for compliance. It is clear that Wilson has continued to prosecute the proceedings, albeit without great efficiency. In those circumstances, the application for leave to appeal and appeal should not be dismissed at this stage and it is appropriate that Wilson be given a final opportunity to comply with the November Orders. Wilson should now be given 14 days to comply with Order 5 and Order 6 of the November Orders. However, the sanction for failing to comply with the orders within 14 days should be that the appeal and application for leave to appeal be dismissed with costs. Conclusion 1. The following orders should be made: 1. The prayers for relief in paras 1, 2 and 3 of the amended motion dated 6 April 2020 filed on 29 April 2020 be dismissed with costs. 2. The notice of motion dated 24 July 2020 filed on 25 July 2020 be dismissed with costs. 3. The time for complying with Orders 5 and 6 made on 25 November 2019 be extended to the date 14 days from the making of these orders. 4. The appeal and the application for leave to appeal be dismissed if either Order 5 or Order 6 made on 25 November 2019 is not complied with in accordance with the previous order. 5. The motion dated 22 March 2020 filed on 23 March 2020 be otherwise dismissed. 6. The respondent to the motion filed on 23 March 2020 pay the applicant's costs of that motion. ********** Endnotes 1. See Michael Wilson & Partners Limited v Emmott [2020] NSWCA 139. 2. Citing News Corporation Ltd v Lenfest Communications Inc (1996) 40 NSWLR 250 at 260–261. 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