Michael Wilson & Partners Ltd v Emmott [2021] NSWCA 315

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Michael Wilson & Partners Ltd v Emmott [2021] NSWCA 315 Hearing dates: 20 July 2021; Further Submissions 23, 27 July, 1, 22 September, 12, 28 October 2021 Date of orders: 17 December 2021 Decision date: 17 December 2021 Before: Leeming JA at [1]; Brereton JA at [8]; Emmett AJA at [127] Decision: (1) Dismiss the appellant's motion of 14 September 2021, with costs; (2) Grant leave to appeal; (3) Allow the appeal; (4) Set aside the orders made in the Commercial List of the Equity Division on 8 March 2019 and in lieu thereof: (a) Grant leave under Uniform Civil Procedure Rules 2005 (NSW), r 11.5, to the plaintiff to serve the proceedings on the defendant outside Australia and in England, insofar as it relates to the claims for relief in paragraphs 3 to 10 of the Further Amended Summons of 3 October 2018; (b) Order that proceedings on the Further Amended Summons other than in respect of the claims referred to in (a) be permanently stayed; (c) Otherwise dismiss Mr Emmott's motion filed on 1 November 2018; and (d) No order as to costs of the motion, to the intent that each party bear its own costs; and (5) Save insofar as any interlocutory costs order otherwise provides, no order as to costs of the appeal, to the intent that each party bear its own costs. Catchwords: PRIVATE INTERNATIONAL LAW – Jurisdiction – Personal jurisdiction – Service outside of the jurisdiction – Partnership and contribution claims by corporate appellant as assignee of the rights of the trustees in bankruptcy of two former business associates of respondent – Respondent and two associates previously members of appellant firm operating in Kazakhstan but departed to establish competitor – Prior arbitration in London between appellant and respondent – Prior proceedings in Australia by appellant against two associates – Appeal from permanent stay of claims pursuant to rules for service outside of Australia PRIVATE INTERNATIONAL LAW – Jurisdiction – Personal jurisdiction – Service outside of the jurisdiction – Connecting factors – Person outside of Australia a defendant to a claim for contribution or indemnity in respect of a liability enforceable by a proceeding in the court – Whether insufficient prospects of success to warrant service – Whether amount in issue only approximately USD$2,000 – Whether any right of contribution – Appeal on contribution claim dismissed PRIVATE INTERNATIONAL LAW – Orders with extraterritorial effect – Anti-suit injunctions – Anti-suit injunction restraining claims previously determined and adverse findings previously made by arbitration in London – Interpretation of arbitral award – Majority of aspects of contribution claim covered – No error in finding that claim could only amount to USD$2,000 EQUITY – Contribution – Exclusion of right – Knowing assistants – Persons with liabilities not of same nature and extent not entitled to contribution – Persons without clean hands not entitled to contribution – Previous High Court proceedings identified two associates as knowing assistants in dishonest breach of trust, with liability of potentially differing nature and extent – Appellant as assignee not entitled to claim contribution, let alone indemnity EQUITY – Contribution – Exclusion of right – Persons who have not paid just proportion of liability or not willing and able to do so not entitled to contribution – Two associates both bankrupt and one deceased – No prospect of payment – Appellant as assignee not entitled to claim contribution PRIVATE INTERNATIONAL LAW – Jurisdiction – Personal jurisdiction – Service outside of the jurisdiction – Connecting factors – Whether partnership formed or carried on business in Australia – Whether partnership agreement governed by Australian law or enforceable or cognizable in an Australian court – Nothing to indicate satisfaction of such requirements – Leave to serve required PRIVATE INTERNATIONAL LAW – Applicable law – Choice of law rules – Partnerships – Place where partnership formed or carries on business – Partnership formed and operated in Kazakhstan – Partnership not governed by Australian law PRIVATE INTERNATIONAL LAW – Jurisdiction – Personal jurisdiction – Service outside of the jurisdiction – Leave to serve – Real and substantial connection – Previous proceedings in Australia resulting in partnership liability, bankruptcy events, unsigned consultancy agreements, citizenship, and litigation funding all insufficient – Existence of partnership assets in Australia – Partnerships can, and possibly only can, be wound up and accounts taken in Australia – Real and substantial connection established – Australia an appropriate forum – Leave to serve granted PARTNERSHIPS AND JOINT VENTURES – Partnership property – Identification – Evidence that partnership has asset-owning and operating entities in Australia – Evidence in the form of engagement contracts, receipts, and Australian bank account APPEALS – Point not taken below – Conduct of trial – Existence of partnership assets not referred to in submissions below nor primary judgment but was in evidence and articulated in affidavit of solicitor – Raised in submissions on appeal and not contested by respondent – Radical effect upon outcome – Permissible to consider on appeal PRIVATE INTERNATIONAL LAW – Foreign judgments and orders – Effect of recognition and enforcement – Whether English courts mandated consideration of partnership claim by Australian courts – English courts merely ordered case management stay in context of lis pendens – Judgments say nothing about jurisdiction or appropriateness of Australian courts PRIVATE INTERNATIONAL LAW – Non-exercise of jurisdiction – Inappropriate forum – Existence of real and substantial connection makes Australia an appropriate forum and negates inappropriate forum conclusion APPEALS – Leave to appeal – Whether leave required – Interlocutory decisions – Appeal from permanent stay – No final determination of rights and obligations of parties – Distinction from final resolution by way of estoppel arising from earlier proceedings – Leave required – Decision nevertheless finally determined ability of appellant to litigate – Appeal heard concurrently and in full – Appeal meritorious – Leave to appeal granted CIVIL PROCEDURE – Time – Extension of time – Motion by appellant seeking extension of time to comply with orders for provision of transcripts, orders, and reasons of English courts – Material of relevance – Material said to already have been in possession of solicitor – Material not responsive and ought to have been obtained prior to hearing – Extension granted but appellant to pay costs of motion APPEALS – Further evidence – Evidence not available at hearing – Evidence of transcripts, orders, and reasons of English courts – Motion not required for Court to have regard to such evidence – No reason to permit other further evidence identified in motion – Motion dismissed with costs COSTS – Party/Party – Appeals – Equal measure of success and failure for each party on appeal – Appellant improved position but incurred and inflicted unnecessary costs – No order as to costs of appeal and primary proceedings Legislation Cited: Municipal Corporation Reform Act 1835 (UK) Supreme Court Act 1970 (NSW), s 101(2)(e) Uniform Civil Procedure Rules 2005 (NSW), rr 11.4, 11.5, 11.6, 13.4; Pt 11; Sch 6 Cases Cited: AB v New South Wales [2014] NSWCA 243 Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41 Albion Insurance Co Ltd v Government Insurance Office (NSW) (1969) 121 CLR 342; [1969] HCA 55 Attorney-General v Wilson (1840) Cr & Ph 1; 41 ER 389 Bahin v Hughes (1886) 31 Ch D 390 Barnes v Addy (1874) LR 9 Ch App 244 Baynard v Woolley (1855) 20 Beav 583; 52 ER 729 Belan v Casey (2003) 57 NSWLR 670; [2003] NSWSC 159 Bella Products Pty Ltd v Creative Designs International Ltd (2009) 258 ALR 538; [2009] FCA 868 Bialkower v Acohs Pty Ltd (1998) 83 FCR 1; [1998] FCA 446 Bond v Larobi Pty Ltd (1992) 6 WAR 489 Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd (1987) 14 FCR 193; [1987] FCA 64 Bracks v Smyth-Kirk (2009) 263 ALR 522; [2009] NSWCA 401 Burke v LFOT Pty Ltd (2002) 209 CLR 282; [2002] HCA 17 Caledonian Railway Co v Colt (1860) 3 Macq 833 Carron Iron Co v Maclaren (1855) 5 HL Cas 416; 10 ER 961 Chillingworth v Chambers [1896] 1 Ch 685 Cornfoot v Holdenson [1932] VLR 4; (1932) 37 ALR 376 Craythorne v Swinburne (1807) 14 Ves Jun 160; 33 ER 482 Davies v Humphreys (1840) 6 M & W 153; 151 ER 361 Dering v Earl of Winchelsea (1787) 1 Cox 318; 29 ER 1184 Drip World Pty Ltd v Dardy Touring Corp [2020] NSWSC 1772 Duncan, Fox, & Co v North and South Wales Bank (1880) 6 App Cas 1 Egglishaw v Australian Crime Commission (2007) 164 FCR 224; [2007] FCAFC 183 Ellesmere Brewery Co v Cooper [1896] 1 QB 75 Emmott v Michael Wilson & Partners Ltd [2017] 2 All ER (Comm) 569; [2016] EWHC 3010 (Comm) Friend v Brooker (2009) 239 CLR 129; [2009] HCA 21 Frigger v Lean (No 2) [2016] WASCA 212 Glenmont Investments Pty Ltd v O'Loughlin (No 2) (2001) 79 SASR 288; [2001] SASC 88 Goodwin v Duggan (1996) 41 NSWLR 158 Hanave Pty Ltd v LFOT Pty Ltd (1999) 168 ALR 318; [1999] FCA 1568 Harpley Nominees Pty Ltd v Jeans [2006] NSWCA 176 Henry v Henry (1996) 185 CLR 571; [1996] HCA 51 Hughes Motor Service Pty Ltd v Wang Computer Pty Ltd (1978) 35 FLR 346; [1978] FCA 105 Kent v Abrahams [1928] WN 266 Kermani v Westpac Banking Corporation (2012) 36 VR 130; [2012] VSCA 42 L Grollo Darwin Management Pty Ltd v Victor Plaster Products Pty Ltd (1978) 19 ALR 621; [1978] FCA 36 Lane v Bushby (2000) 50 NSWLR 404; [2000] NSWSC 1029 Leigh-Mardon Pty Ltd v Wawn (1995) 17 ACSR 741; 13 ACLC 1244 Leybourne v Habkouk [2012] NSWCA 212 Lingard v Bromley (1812) 1 V & B 114; 35 ER 45 Little v Victoria [1998] 4 VR 596 Luck, Re (2003) 78 ALJR 177; [2003] HCA 70 Macatangay v New South Wales (No 2) [2009] NSWCA 272 Madden International Ltd v Lew Footwear Holdings Pty Ltd (2015) 50 VR 22; [2015] VSCA 90 Mahoney v McManus (1981) 180 CLR 370; [1981] HCA 54 Maunder v Lloyd (1862) 2 J & H 718; 70 ER 1248 McGinn v Cranbrook School [2016] NSWCA 226 McNally v Harris (2008) 1 ASTLR 549; [2008] NSWSC 659 Melhem v Katter [2021] NSWCA 273 Michael Wilson & Partners Ltd v Nicholls [2008] NSWSC 501 Michael Wilson & Partners Ltd v Nicholls [2009] NSWSC 1033 Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427; [2011] HCA 48 Michael Wilson & Partners Ltd and Emmott (Second Interim Award, International Dispute Resolution Centre, 19 February 2010) Michael Wilson & Partners Ltd v Emmott [2018] 2 All ER (Comm) 737; EWCA Civ 51 Michael Wilson & Partners Ltd v Emmott [2019] 4 WLR 53; EWCA Civ 219 Michael Wilson & Partners Ltd v Emmott [2019] NSWSC 218 Michael Wilson & Partners Ltd v Emmott [2020] NSWCA 139 Michael Wilson & Partners Ltd v Emmott [2020] NSWCA 245 Muller v Fencott (1981) 37 ALR 310; [1981] FCA 147 Murakami v Wiryadi (2010) 268 ALR 377; [2010] NSWCA 7 National Mutual Life Association of Australasia Ltd v Grosvenor Hill (Qld) (2001) 183 ALR 700; [2001] FCA 237 News Corporation Ltd v Lenfest Communications Inc (1996) 21 ACSR 553 Nicholls v Michael Wilson & Partners Ltd (2011) 243 FLR 177; [2011] NSWCA 222 Nicholls v Michael Wilson & Partners Ltd [2012] NSWCA 383 Page v McKensey [2004] NSWCA 437 Patterson v Arcade Buildings Ltd (1930) 31 GLR 312 Pendlebury v Walker (1841) 4 Y & C Ex 424; 160 ER 1072 Port of Melbourne Authority v Anshun Pty Ltd (No 1) (1980) 147 CLR 35; [1980] HCA 41 Rankin v Palmer (1912) 16 CLR 285; [1912] HCA 95 Richardson, Re; Ex parte The Governors of St Thomas's Hospital [1911] 2 KB 705 Selkirk v McIntyre [2013] 3 NZLR 265; NZHC 575 Sky Channel Pty Ltd v Tszyu (No 2) [2000] NSWSC 1150 Smith v Cock [1911] AC 317 Sterling Pharmaceuticals Pty Ltd v Boots Co (Australia) Pty Ltd (1992) 34 FCR 287; [1992] FCA 71 Tampion v Anderson (No 2) [1973] VR 829 Thomas v Atherton (1878) 10 Ch D 185 Weatherall v Satellite Receiving Systems (Australia) Pty Ltd (1999) 30 ACSR 698; [1999] FCA 218 Wickstead v Browne (1992) 30 NSWLR 1; [1992] NSWCA 272 Wolmershausen v Gullick [1893] 2 Ch 514 Woolmington v Bronze Lamp Restaurant Pty Ltd [1984] 2 NSWLR 242 Wren v Mahony (1972) 126 CLR 212; [1972] HCA 5 Texts Cited: EH Scamell and RC I'Anson Banks, Lindley on the Law of Partnership (15th ed, 1984, Sweet & Maxwell) R Goff & G Jones, The Law of Restitution (3rd ed, 1986, Sweet and Maxwell) G Spence, The Equitable Jurisdiction of the Court of Chancery (1846, V and R Stevens and GS Norton) ICF Spry, Equitable Remedies (9th ed, 2013, Lawbook Co) J Story, Commentaries on Equity Jurisprudence (3rd ed, 1920, A Maxwell & Son) JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow & Lehane's Equity: Doctrines & Remedies (5th ed, 2015, LexisNexis Butterworths) JD Heydon and MJ Leeming, Jacobs' Law of Trusts in Australia (8th ed, 2016, LexisNexis Butterworths) P Birks and G McLeod (trs), with P Krueger (contrib), Justinian's Institutes (1987, Cornell University Press) RP Meagher, JD Heydon and MJ Leeming, Meagher, Gummow & Lehane's Equity: Doctrines & Remedies (4th ed, 2002, LexisNexis Butterworths) Category: Principal judgment Parties: Michael Wilson & Partners Ltd (Appellant) John Forster Emmott (Respondent) Representation: Counsel: