This judgment was handed down remotely at 09.30am on 26 March 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
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HH Judge Pelling KC:
Introduction
- By an Order made by me on 10 February 2025, I directed the parties to file and serve short written submissions as to why a case manangement stay made by me in relation to these proceedings on 1 November 2024 should not be reimposed in the events that have occurred to which I refer in more detail below. The result was that Mr Wilson filed written submissions objecting to the reimposition of the stay while Mr Emmott filed written submissions in support of the reimposition of the stay. In light of this lack of consensus, I directed that there should be a short hearing to determine the issue on the 19 March 2025. The hearing overran as a result of Mr Wilson taking an hour to deliver oral submissions that were repetitive and to an extent at least strayed well beyond what was material to the issue to be decided. Mr Emmott maintained that he had professional commitments that prevented him from remaining for a judgment and I decided to provide a written judgment setting out the order I have decided to make and the reasons for it. That is this judgment.
Background
- The circumstances leading to the imposition by me of a case manangement stay in respect of these proceedings are comprehensively set out in the judgment I gave leading to the 1 November stay order – see [2024] EWHC 2731 (Comm) ("November Judgment") – and I do not intend to repeat what I said there. That judgment should be read before proceeding further with this judgment.
- In the result, applying the principles I set out at [5]-[8] and [10]-[12] of the November Judgment, I imposed the 1 November stay for the case specific reasons identified at [16]-[32]. In arriving at the conclusion that I should impose a case manangement stay for those reasons, I drew attention to the extraordinary history of this litigation and the consequent need to ensure that only a proportionate amount of court resources is made available to these proceedings in particular at [33] of the November Judgment. That paragraph bears repetition because it sets out in summary why exceptional steps are necessary in order to control this seemingly never ending litigation. It is in these terms:
"I am fully aware that a step of this sort is exceptional but the circumstances surrounding this litigation are extraordinary and unique at least in my experience. As long ago February 2019, as Peter Jackson LJ concluded in his judgment in Emmot v Michael Wilson & Partners Ltd 2019] EWCA Civ 219; [2019] 4 WLR 53 in these terms:
"Having listened to the history of the litigation between these two solicitors, I protest at the shameful waste of time and money caused by their private dispute, which has now continued for 13 years and left their reputations in tatters. We were told that Mr Emmott's global costs amount to £2·5m, and Mr Wilson's several times that. Courts in four countries have been (and in at least two cases are being, with no end in sight) plagued with their proceedings and counter-proceedings. It appears that Mr Wilson will stop at nothing to prevent Mr Emmott from receiving the award to which, for all his deceit, he is entitled. … Any court in this jurisdiction that has to consider this dispute in future would do well to remember that the overriding objective in civil proceedings includes a duty on the court to save expense, deal with the case expeditiously and fairly, and allot to it an appropriate share of the court's resources, while taking into account the need to allot resources to other cases; further, that the parties have a duty to help the court to achieve this. This pathological litigation has already consumed far too great a share of the court's resources and if it continues judges will doubtless be astute to allow the parties only an appropriate allotment of court time."
It is a matter of record that since then at least three new claims were commenced by MWP, there have been applications that have generated 37 judgments from me alone that are reported in the Westlaw database and at least that number of other judgments and rulings that have not made it to that data-base. There have been numerous applications for permission to appeal to the Court of Appeal and as I have said two extended civil restraint orders that have had little or no effect because of necessity they have been made in only some of the issued claims. I refer to this not in relation to the suggestion that these proceedings are abusive but because it shows, regrettably, that the lack of proportionality identified by Peter Jackson LJ has continued. Proportionality lies at the heart of the stay I am imposing"
- Since the 1 November stay ceased to apply (in the circumstances to which I refer below) the avalanche of litigation has continued unabated. I have drawn attention in the past to the tendentious and prolix terms in which Mr Wilson frames his submissions to courts. That too continues unabated. In paragraph 25 to 26 of his written submissions for this hearing, Mr Wilson summarised what he considered this court was required to resolve. It bears quotation as well:
"25. As set out in MEW-1, the following is a brief summary of the substantive claims and matters in issue before this Court, which remain to be resolved between the parties;
25.1. the US$36 million unpaid Sinclair debts;
25.2. the true ownership of the 14.75m Max Shares, the US$1,050,000 of Max Cash, MWP's unpaid bills, and the Judgment Debtor's under-billing, and as to the involvement of Sinclair and Sokol in the Temujin Partnership fraud, where Sokol stands debarred;
25.3. the Judgment Debtor's joint and several liability and in contribution with Messrs Nicholls and Slater as his Temujin Partners, as well as TIL, TSL, TTT as Temujin Partnership entities, given the findings by the Trustees and Liquidators and declarations on oath made, and the limited-scope ongoing NSW Injunction, which needs to be lifted;
25.4. as to the Judgment Debtor's alleged arbitration liability and quantum phase costs, where the Judgment Debtor was debarred on 18.06.24, including for breach of undertaking since 19.11.19 and the consequences thereof, including the payment back to MWP of all moneys, and similarly in relation to the alleged quantum challenge and liability challenge costs, MWP's guarantee, moneys in the CFO, and payments back to MWP;
25.5. the committal of the Judgment Debtor for his contempts of court and breaches of his personal undertakings since 19.11.19 to date, fines, penalties, and/or imprisonment;
25.6. the inquiry into MWP's damages and also as to its costs arising from and caused by the specific and worldwide Freezing, three TPDO and all related orders which were wrongly conjured up, sought, applied for, obtained and maintained from 03.03.07 until 2022-2023 by the Judgment Debtor and the Stakeholders in breach of the duties of the utmost good faith and of full and frank disclosure throughout, including without limitation as to the Second Addendum and Sinclair debts and his Temujin Partnership from 09.05 to date, and where there are still ongoing effects of such former orders that must be dealt with in the UK, Australia and the BVI, including ongoing security for costs based upon the same in Australia and the UK, which must be released and set aside;
25.7. the sequestration of the Judgment Debtor's worldwide assets and estate given that he is a judgment debtor and debtor of MWP in all jurisdictions and has failed and refuses to pay despite having large and copious amounts of cash, assets, houses, shares, options, and warrants at his disposal, including through his designates and nominees, and as a Temujin Partner from 09.05 to date, and subsequent tracing; and
25.8. the stay and set-aside application of 04.09.20, which has been listed to be heard on numerous occasions, but has been taken out the list at the last minute, through no fault of MWP, and which is also based upon forensic evidence from Messrs Stroz Friedberg.
26. In addition, as a result of the judgment of 15.01.25, MWP will be bringing an application for a declaration that Mr Emmott has had nothing left as to principal since 2013, and has had nothing left as to principal and interest since 2014, and probably much earlier when all of his asserted and purported set-offs are taken into account. For this purpose, MWP and its forensic accounting team have been working on a revised calculus and Net TQA in light of the Court's guidance given on 15.01.25, as well as enhancing the back-up bundle, even though the burden of proof is on Mr Emmott, which is included in the further HB. "
In addition Mr Wilson has apparently threatened the commencement of yet further litigation against Mr Emmott above and beyond that referred by Mr Wilson in his written submissions for this hearing. As Mr Emmott put it in his written submissions:
"11. Furthermore, in recent emails MWP has given Mr Emmott notice of yet further applications it intends to make. At page DB/15 is an email dated 31 January 2025 in which MWP advises that it intends to apply for a restraining order against Mr Emmott for his alleged "unlawful and tortious interference, collusion and fraudulent conspiracy to injure".
12. On 17 March 2025 MWP sent an email to Mr Emmott threatening to "enforce" its alleged security rights over various properties alleged to be owned by Mr Emmott…"
The emails to which Mr Emmott refers are exhibited and bear out what he says. The reality is that on Mr Wilson's analysis, this litigation will continue for years to come, notwithstanding his professed desire to bring it to an end.
- As will be apparent from my last judgment, I stayed all these proceedings aside from some narrowly framed exceptions until after final judgment in the litigation I referred to in the November Judgment as the NSW Claim. I did so For two reasons. Firstly, I did so because what I referred to at [19] and following of my earlier judgment as the "Temujin Partnership Issue" was to be resolved finally in the trial of the NSW Claim so as probably to give rise to an issue estoppel between the parties in relation to that issue. Resolution of that issue is of critical importance to the English proceedings for the reasons identified at [22] – [23] of the November Judgment.
- The other reason why I stayed the English proceedings was because Mr Wilson estimated the value of MWP's claim in the NSW Claim at circa US$70m. That is significant so far as the English proceedings are concerned for two reasons.
- Firstly there is an ongoing dispute between MWP and Mr Emmott as to whether and if so how much remains due and owing from MWP to Mr Emmott of the judgment sum to which he became entitled in excess of a decade ago. This is relevant because Mr Wilson maintains that MWP is entitled to recover sums provided by MWP as security for Mr Emmott's costs often many years ago over which Mr Emmott asserts a right of set off and because, whenever a costs order is made in MWP's favour, Mr Emmott asserts a right of set off. This has resulted in multiple bankruptcy petitions being presented by MWP seeking Mr Emmott's bankruptcy and the service of multiple statutory demands by MWP, which in turn have become the subject of multiple set aside applications. It resulted too in an application by Mr Emmott for a declaration as to whether in principle he was entitled to set off costs orders made against him against the judgment sum due to him because Mr Wilson has disputed that principle. That principle has now been resolved in favour of Mr Emmott following a direction by a Costs Judge that it be resolved by application to this court. There Has been no appeal by either party from that determination.
- It remains MWP's case however that there is now nothing left due to Mr Emmott and that there has not been anything due to him for at least a decade. That is the issue that Mr Wilson was alluding to in paragraph 25 of his written submissions referred to above. I said of this exercise at [28] of the November Judgment that:
"… resolving this dispute will involve identifying the sums due to Mr Emmott and then adding to those sums interest at the judgment rate, then working out what sums it is agreed between the parties should be set off (there are some) and when and how that impacts on the continued accrual of interest on the reduced judgment sums and then attempting to decide whether there are any other sums that Mr Wilson contends should be set off which have been proved to be due to MWP from Mr Emmott to the summary judgment standard. It is difficult to see how any final conclusions on such issues could be arrived at on an interlocutory application absent admission and in any event the enforceability of the individual costs orders will not be in issue on the hearing of Mr Emmott's application, which is concerned exclusively with the principle. The factual issues can only be grappled with by the Insolvency Court which will have to decide on what date the right to set off is to be tested and then to ascertain (to the standard applicable to an application to set aside a statutory demand) the state of account in relation to the sums admitted or (perhaps) proved to the summary judgment standard and the effect of the claimed assignment by Mr Emmott to Mr Sinclair. The demands of this exercise cannot be underestimated."
Despite a number of failed attempts to make good this element of MWP's case in the past, Mr Wilson maintains that he now has the expert evidence necessary to enable this task to be performed. I do not comment further on whether that is so beyond noting that MWP has produced a spread sheet which appears to follow the scheme I set out and which may have the effect for which he contends assuming that the underlying factual allegations are admitted or can be proved.
- Secondly, Mr Emmott accepts that if there is ever a judgment in the NSW Claim for anything approaching the sums claimed by MWP that is likely to bring to an end all or most of the proceedings in England and Wales – see paragraph 17 of his written submissions for this hearing. That will depend upon what assets are available to Mr Emmott which is entirely opaque at the moment. It remains the case however, that if MWP recovers a judgment in the NSW Claim in anything approaching the sum he claims will be found due in those proceedings then that will exceed by many millions of US Dollars the total value of the sums in dispute in these proceedings.
The NSW Claim
- The NSW Claim was dismissed on its merits by the New South Wales Supreme Court (Hammerschlag J) following a trial on the merits that Mr Wilson did not attend. An application to Hammerschlag J made at the start of the trial for an order adjourning the trial because of Mr Wilson's alleged indisposition had been dismissed and the trial had then continued in Mr Wilson's absence. MWP had retained counsel for the trial who attended to make the application for an adjournment but then withdraw when that application failed. Hammerschlag J's judgment on the merits is final subject to the result of any appeal.
- The trial followed the dismissal of an earlier application by MWP for an order vacating the trial date and refixing the trial with a longer time estimate some time in 2025. MWP had issued a Bankruptcy Notice in Australia against Mr Emmott concerning some outstanding costs alleged to be due under an order of the High Court of Australia ("HCA"). At the hearing to fix the trial date for the NSW Claim, the judge hearing the application (Ball J) initially fixed the trial to start in late July 2025 but on being told about the Bankruptcy Notice asked MWP for an undertaking not to seek payment until after trial of the NSW Claim. Mr Wilson refused to give that undertaking whereupon Ball J fixed the trial for the date when eventually it took place before Hammerschlag J. MWP argues that this case manangement decision was erroneous. That was the subject of an appeal by MWP to the Supreme Court of New South Wales Court of Appeal ("NSW Court of Appeal"). That appeal was dismissed by the NSW Court of Appeal prior to the commencement of the trial before Hammerschlag J.
- Once Hammerschlag J had handed down his judgment dismissing the NSW Claim on the merits, the case manangement stay I had imposed came to an end. This has resulted in Mr Wilson seeking to list a significant number of applications on different days in this court.
- MWP has meanwhile launched an appeal from the judgment of Hammerschlag J to the NSW Court of Appeal. There is apparently a dispute as to whether leave to appeal is required which has yet to be resolved. In that appeal, MWP is seeking "… an immediate stay of the declaration as to their, allegedly, being no Temujin Partnership, that the Respondent is not, and was never a Temujin Partner, and as to costs…" In addition, MWP is seeking permission from the HCA to appeal from the dismissal by the NSW Court of Appeal of MWP's appeal against the decision of the NSW Supreme Court to refuse to vacate the trial date.
- It is not for me to comment on the merits of these proposed appeals or applications for leave to appeal which are exclusively a matter for respectively the NSW Court of Appeal and the HCA. The point that matters for present purposes is that unless and until leave to appeal to the HCA is refused or any appeal for which permission is granted is dismissed and/or the appeal to the NSW Court of Appeal (assuming leave is not required as MWP contends but Mr Emmott disputes) is dismissed, all the factors concerning the Temujin Partnership Issue that led to me imposing a case management stay last year continue to apply. That would be all the more a significant problem if the stay sought by MWP from the NSW Court of Appeal was to be granted since it would arguably preclude Mr Emmott from asserting an issue estoppel by reference to Hammerschlag J's judgment unless and until MWP's appeal had been dismissed.
- That means that the same debate concerning the Temujin Partnership Issue will continue unabated in the English proceedings with Mr Wilson continuing to maintain that Mr Emmott was a member of the alleged partnership and that he is liable to account to MWP as assignee of Messrs Nicholls and Slater for sums or assets said to have been received by him in his capacity as a member of the alleged partnership. Whilst it is true to say that as long as the NSW Court of Appeal does not grant the stay sought by MWP, Mr Emmott will remain entitled to rely on issue estoppel, that ignores the practical problem posed if the NSW Court of Appeal were to allow MWP's appeal but in the interim this court had proceeded on the basis that Hammerschlag J's judgment is dispositive..
- Mr Emmott submits that it would be unjust to him for this court to proceed with any application where the Temujin Partnership Issue arises other than on the basis that an issue estoppel in his favour has arisen in relation to that issue as a result of Hammerschlag J's judgment. By the same token he recognises that if that is how this court approaches such applications and thereafter the pending appeals to the NSW Court of Appeal and the HCA succeed, there is a significant risk of further litigation either before this court, seeking orders setting aside orders made on the basis that the Temujin Partnership Issue had been determined in Mr Emmott's favour by Hammerschlag J's judgment, or appeals to the Court of Appeal on a similar basis. Whilst such a possibility would be of concern in any commercial litigation, it is of particular concern in this case given the points made earlier concerning the need to ensure that only a proportionate amount of court resource is devoted to these proceedings.
- Mr Wilson's only answer to this point is that there are certain claims and applications outstanding that are unaffected by the Temujin Partnership Issue and even if (which he does not accept) a stay should be put in place where that issue arises, the continuing uncertainty about that issue is immaterial to those claims and applications where the issue does not arise and for that reason it would be wrong in principle to stay any proceedings where that issue does not arise. Aside from the point made earlier concerning the effect of a judgment in the NSW claim in any sum approaching that which Mr Wilson maintains will be recovered on the availability of a set off defence or Mr Emmott's ability to further defend these proceedings or any enforcement process, Mr Wilson's point is one I accept.
Determination
- It follows that whilst I consider that the stay that applied previously should be reinstated, there should be limited identified exceptions to that order. In summary they are:
i) The outstanding contempt application;
ii) The outstanding application for an order directing an enquiry as to what if any sum is due from Mr Emmott to MWP on his cross undertaking is damages following the discharge of the freezing order he obtained against MWP;
iii) The Part 7 claim bearing the number CL-2021-000728 ("Sinclair Debt claim"); and
iv) (if issued) a claim or application by MWP for a declaration that in the events that have happened there is no longer any sum due and owing from MWP to Mr Emmott.
- In relation to the outstanding contempt application, I am satisfied that none of the issues that arise are affected by the Temujin Partnership Issue and set off is immaterial to the issues that arise as well.
- There is one contempt allegation concerning the breach of a long since discharged freezing order obtained by MWP against Mr Emmott which Mr Emmott suggests is affected by that issue. Mr Wilson maintains that is not so because the allegation made does not depend upon the existence of the Temujin Partnership or Mr Emmott's alleged membership of it but instead depends upon allegations that Mr Emmott dealt with his assets or permitted assets to be dealt with on his behalf in a manner that was prohibited by the terms of the freezing order.
- I was not taken by either party to the judgment I gave permitting MWP to amend its contempt Application Notice. On the hearing of that application I refused permission to amend and in effect struck from the contempt application a large number of allegations. My recollection is that I permitted the application I am now considering to remain precisely on the basis that it was unaffected by the Temujin Partnership issue. If that is wrong then Mr Emmott will have permission to apply to extend the stay to some or all of the contempt application if so advised.
- As things stand, I accept Mr Wilson's submission that there is no proper basis for staying the contempt application. In any event there are good reasons why that application (which has ben outstanding for a long time) should be disposed off as quickly as can be achieved.
- The enquiry as to damages application is one where there is a dispute as to what can and cannot properly be claimed. There has been an exchange of pleadings in order to permit that question to be answered. The next stage in that application is for it to be restored for further directions and the strike out of any part of the claim that is not arguably capable of founding a claim under the cross undertaking in damages. That is unaffected by the Temujin Partnership Issue. Whether the sum claimed is capable of being set off will depend in part on what sum can properly be claimed. As things stand, there is no proper basis for staying that application.
- The Sinclair Debt Claim is a free standing claim for relief premised on MWP having become the assignee of debt due from Mr Emmott to Mr Sinclair who is now diseased but prior to his death was made bankrupt on the petition of MWP. MWP was then able to obtain the assignment by Mr Sinclair's trustee of the sums alleged to be due to Mr Sinclair from Mr Emmott. Those proceedings are highly contentious but are at an early stage and it is not alleged by either party that the Temujin Partnership Issue arises in respect of any element of that claim. It is not alleged that Mr Sinclair was ever a member of the alleged Temujin Partnership, which is alleged to have been a relationship between Mr Emmott and Messrs Slater and Nicholls. That claim if it succeeds will be for a sum very substantially in excess of the any sum due to Mr Emmott. There is therefore no proper basis for staying it, at least at present.
- The declaration proceedings have not yet been issued. I have not heard argument about the point but I am unconvinced that the appropriate procedural mechanism for resolving the issue MWP claims is capable of resolution without a trial is the issue of an application notice in some or all of the various extant claims. If the issue is to be pursued at all, some consideration should perhaps be given to applying for a declaration in new Part 8 proceedings. However, as I say, that issue has not been argued before me and I mention it only for the purpose of ensuring that the appropriate exception is correctly formulated. Furthermore given the time these proceedings have been on foot for, I consider that if a claim or application is to be issued for declarations MWP claims to be entitled to, then those proceedings need to be issued promptly. The exception will therefore be subject to an express proviso that requires any such claim or application to be issued within a fixed future period running from the date of this judgment. Provisionally I consider that should be 28 days. Clearly resolving the set off issue is of prime importance. In my view, if a claim or application to resolve that question is issued, it should be heard ahead of either the enquiry or Sinclair Debt Claim. If MWP succeed as they claim to be entitled to, that will eliminate the set off issue.
- Finally I should address, albeit briefly, Mr Wilson's submission that there should be an exception made for Claim CL-2010-000804. The short answer to that point, is that Mr Emmott is not a defendant to those proceedings. Thus those proceedings were not the subject of the stay I imposed on 1 November and are not affected by any other restriction that currently applies to the litigation between MWP and Mr Emmott. For that reason the claim is entirely irrelevant to the issues that arise and no exception is required in respect of that claim.
- The parties are directed to submit a draft Order giving effect to these directions by no later than 16.00 London Time on Monday 24 March 2025.
