New South Wales Court of Appeal CITATION: Nicholls v Michael Wilson & Partners Limited [2009] NSWCA 420 HEARING DATE(S): 16 December 2009 JUDGMENT DATE: 16 December 2009 JUDGMENT OF: Allsop P at 1 EX TEMPORE JUDGMENT DATE: 16 December 2009 DECISION: Orders in accordance with amended short minutes. In essence extension of freezing orders and a stay of orders for judgment up to and including 1 February 2010. CATCHWORDS: PROCEDURE - Judgments and orders - stay CATEGORY: Procedural and other rulings Robert Colin Nicholls (First Appellant) David Ross Slater (Second Appellant) PARTIES: Temujin Services Limited (Third Appellant) Temujin International Limited (Fourth Appellant) Temujin International FZE (Fifth Appellant) Michael Wilson & Partners Limited (Respondent) FILE NUMBER(S): CA 40473/2009 Mr G Lindsay SC, Mr G McGrath, Mr A Fox (Appellant) COUNSEL: Mr M Walton SC, Mr T Carrey (Respondent) Ms J Richards (Third Party) SOLICITORS: Henry Davis York (Appellants) Clayton Utz (Respondent) LOWER COURT JURISDICTION: Supreme Court - Equity Division LOWER COURT FILE NUMBER(S): 50151/2006 LOWER COURT JUDICIAL OFFICER: Einstein J LOWER COURT DATE OF DECISION: 6 October 2009 11 December 2009 LOWER COURT MEDIUM NEUTRAL CITATION: Michael Wilson and Partners Limited v Robert Colin Nicholls & Ors [2009] NSWSC 1377 IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL 40473/09 ALLSOP P Wednesday 16 December 2009 NICHOLLS v MICHAEL WILSON & PARTNERS LIMITED Application for Stay of Judgment Ex Tempore Judgment 1 ALLSOP P: In this matter there has been a Notice of Appeal filed against orders made by a judge of the Commercial List, in particular those orders requiring payment of money sums to the respondent/plaintiff in sums totalling nearly $10,000,000 at current rates of exchange which together with orders for costs approximated by the solicitor for the respondent on a party party basis bring the total judgment sum to in the order of $13,000,000. 2 The appellants (he defendants in the proceedings)were two individuals, both solicitors, and four corporate entities. The nature of the proceedings involved the alleged improper diversion of clients and business from a Kazakhstan law firm by the defendants, or some of them, to the benefit of the defendants. The matter involves serious allegations of conspiracy to defraud as well as serious alleged dishonest breaches of fiduciary obligations. A number of these matters were found by the trial judge after a long and hard-fought hearing. The primary judge gave reasons in October for his substantive findings. His Honour made final orders in December, some days ago, after a further hearing on relief. 3 The appellants seek, through a Notice of Motion filed on 15 December, a stay of the money judgment orders. The respondent seeks continuation of the freezing orders that have been in place for some time. Those freezing orders in their current form are for a value of over $30,000,000. It should be noted at this point that the respondent lost a number of issues beyond those leading to the money judgments in the sums I have identified. It may be that the respondent will cross appeal and in any event it may file a Notice of Contention. 4 I heard the matter this morning. I indicated to the parties all but one of the orders that I was proposing to make and the parties have helpfully brought in Short Minutes dealing with those matters. There are some disagreements about those Short Minutes to which I will come. The substantive question I left outstanding from this morning, to contemplate, was the question of a stay of the principal money judgment. In the evidence filed in support of the motion the appellants set out the background and context of the litigation and the nature of the complaints in the Notices of Appeal. 5 There was no evidence placed before me that the appellants/defendants, are not able to pay the money judgments. However, senior counsel for the appellants has indicated to me that the judgments are beyond the financial reach of the appellants. The absence of any evidence this morning does not lead me to doubt the genuineness of the representation of counsel. This is particularly so in circumstances where there have during the course of the hearing been occasions for affidavits as to the means of the appellants/defendants. The primary judge was prepared only to stay the matter from last Friday to today. One of the appellants, Mr Slater, is in Kazakhstan. The other personal appellant, Mr Nicholls, is in Sydney. Given that the results of the primary case were made clear in October, it might be thought surprising that there were no steps taken, apparently, to put in place evidential material on this subject matter, given the likely course of events or at least the possible course of events. Nevertheless, I have indicated that I am prepared to grant a period of time for the appellants to serve affidavits of their financial position by 15 January 2010. 6 Given the existence of the freezing orders, I think the course most conducive to a just and fair disposition of the Notice of Motion is to stay for a period up to 1 February 2010 the money orders. That view, and that preparedness, should not be taken as any indication of any willingness to stay the matter beyond that date. 7 The affidavits that I require are intended to be, as I have amended the document, affidavits that cover all rights, benefits, interests or expectations that the first to fifth defendants have or to which they may become entitled. The parties have, if I may respectfully say so, sensibly not encumbered paragraph 4 of the Short Minutes with oppressive legalese and definitions. There should be no doubt, however, that the paragraph is intended by me to require a complete and full and frank disclosure of entitlements to wealth, (capital or income) to which these defendants are or may become entitled. 8 Depending upon my satisfaction as to the completeness and frankness of that disclosure the question of the utility and appropriateness of a stay can thereafter be identified. It may well be that a compromise will have to be reached within the camp of the appellants as between fairly securing all or some proportion of the judgments and the burden of any further legal fees. These questions may be affected by any further submissions that can be put in relation to the strength or weakness of the appeal. I do not propose to encourage a rehearsal of the appeal but the parties should not think that I will refrain from forming a view on a summary basis about aspects of the appeal said to be either hopeless or very strong. 9 What I propose to do is to grant the stay until 1 February 2010 and stand over the Notice of Motion to that date, put in place a regime whereby notices for cross-examination can be given of witnesses on that day. If the matter does not finish in a day then the list will be re-arranged to allow me to complete the motions. 10 One aspect of the Short Minutes that has not been prepared, and for which I take responsibility, and which I will draft in a moment is a provision that provides for the filing, at the same time as the filing of affidavits of means, any further affidavits that the appellants wish to rely upon in relation to the stay application. 11 Mention was made this morning of the health of Mr Nicholls and his domestic affairs which might affect the availability of assets. The resolution of the stay will be, or may be, significantly affected by the contents of the affidavits as to means. Those contents may also affect the bringing forward of applications for security for costs. At the moment the Short Minutes only deal with security for costs applications to be brought forward in a timely fashion. 12 For those reasons I am prepared to make orders in the form presented to me with amendments which I will indicate in a moment. 13 [Discussion as to amendment to Short Minutes]. 14 I make orders in accordance with the short minutes initialled by me and dated today and placed with the papers and I permit the parties to uplift the original to remain in the custody of the appellant's solicitor. 15 (Ms Richards stated that Ms Lighezzlo swore an affidavit in June last year that made reference to a bank account and that in relation to that bank account there were no material changes, only fees debited, interest added and a modest GST rebate from the tax office. On that basis Mr Walton had stated that he did not require an updating affidavit.) ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.