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International law firm’s dispute with former director spills into Australian courts
A law firm based in Kazakhstan has been fighting its former director and shareholder across central Asia, the United Kingdom, the British Virgin Islands, New Zealand, and now Australia.
Naomi Neilson
Michael Wilson & Partners (MWP) and former director and shareholder John Forster Emmott have been litigating against each other since 2009 across various jurisdictions, which now includes the NSW Supreme Court, the ACT, and within Australia’s High Court.
There have been various costs orders made in both their favours in foreign and Australian courts, which have not yet been paid. It includes the enforcement of an arbitral award made in England in favour of Emmott for a sum that exceeds £5 million.
In the most recent proceedings within the NSW Supreme Court before acting Justice Monika Schmidt, the dispute concerns orders made under the Foreign Judgments Act 1991 and the Trans-Tasman Proceedings Act 2010 for the registration of foreign judgments.
The registrar allowed some to be registered but knocked others back for reasons including that MWP was not a party to the proceedings in which some of the judgments it sought to register were made.
However, MWP failed to disclose that it had already taken steps to enforce disputed judgments and orders in English bankruptcy proceedings. Emmott also did not disclose an application in the High Court of England and Wales to set off orders in relation to various of those judgments, considering costs orders were made in his favour.
After the register’s orders were made, Emmott applied to amend the set-off application to include an order to stay all costs orders in that jurisdiction, pending determination of the set-off application. The bankruptcy proceedings were also adjourned as a result.
Before Justice Schmidt, Emmott has sought to have the registration of the foreign judgments by the registrar set aside and the proceeding stayed. Simultaneously, MWP sought a review of the registrar’s orders and leave to amend its pleadings in order to have other foreign judgments and orders registered.
In the background of several costs order disputes, Justice Schmidt said the parties are “incapable of sensible agreement about costs orders made in Australia”, which indicates MWP’s insistence on pursuing bankruptcy applications in Australia and relying on the foreign judgments, “despite the impending hearing in England”.
“It should be observed that the prospect of these parties litigating the same matters in both England and Australia, which seems entirely likely, does not accord with the public interest,” Justice Schmidt said.
“That is reinforced by the factual complexity of the parties’ litigious history, which the evidence and submissions led in these proceedings has shed some light on. Still, the company is intent on pursuing the course it has embarked on here, rather than awaiting the outcome of the English set-off application.”
Justice Schmidt said it came down to whether the proceedings in the NSW Supreme Court should be stayed pending the resolution of Emmott’s English set-off proceedings. It was also relevant to consider that neither party could find a “common way forward”.
Considering the unnecessary costs and the risk of contradictory judgments in England and Australia, Justice Schmidt said it would be contrary to public policy to permit the matter to continue in NSW before the outcome of the English set-off application is known.
“I am thus satisfied that justice requires that these proceedings be stayed, pending the determination of the proceedings in the High Court of England and Wales, given that the hearing of the English enforcement proceedings have been deferred, pending the determination of what is in issue in the High Court of England and Wales in relation to set off,” Justice Schmidt said.
The case is Michael Wilson & Partners Limited v Emmott [2024] NSWSC 1258 (10 October 2024).
Naomi Neilson
Naomi Neilson is a senior journalist with a focus on court reporting for Lawyers Weekly.
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