Do not leave the village

That’s what the original Inspector Barnaby in Midsomer Murders frequently said to witnesses or suspects.  Given the main way of being eliminated as a suspect in Midsomer, you have to wonder why anyone obeyed him.

Christopher Sharkey and Donya Nissi met in 2003 or 2004.  Sharkey, 20/21, was an internet whizzkid.  Nissi was just finishing or had just finished school.  They moved to Orange where Nissi went for her university studies.  At this time Sharkey’s business, Ozstays or Stayz (if there is a distinction I’m not sure what it is) was already doing quite well.

In December 2004 they became engaged at a concert by “The Whitlams” in Newtown.  Spectacularly, Sharkey set the proposal up by arranging for the lead singer, Tim Freedman,  to sing “The Lady in Red” (or a fragment of it, anyway) and announce that “this is for Donya from Chris” before he popped the question.  He had told Freedman that this was Donya’s favourite romantic music.

In 2005 they bought a house at [MM] Denison Road Camperdown in both their names.  Sharkey provided the cash for this, or most of it.

At the beginning of 2006, Sharkey (by now 23/24) and his business partner sold their interest in the Stayz business for $12.7 million.  Sharkey received half of this. He used some of that to pay of the mortgage on [MM] Denison Road.  He also gave substantial presents to his father and to Nissi’s parents to pay off their home loans.

In late 2007, Sharkey and Nissi bought the neighbouring property to No [MM], being [NN]Denison Road.  Sharkey paid for this.  Sharkey said that the property was put in Nissi’s name to protect it from claims that might be made against him.

Almost immediately after that, Sharkey decided he wanted to raise money for his business ventures and investments.  He set up a family trust which borrowed money for which both No [MM] and No [NN] were given as security.

The relationship between Starkey and Nissi broke down in mid 2008, though the break-up seems to have been clandestine – they still went as a couple to family occasions.  Sharkey moved out into shared accommodation and Nissi stayed in No [NN] with Sharkey’s dogs.  (No [MM] seems to have been tenanted.)

In 2011 Sharkey wanted to raise more money for his business ventures.  He proposed selling No [MM] for this purpose.  In March they reached an agreement (recorded in writing). Sharkey or the Trust would would not contest the ownership of No [NN] and would make no more loans against it and repay the loans then secured against it by the end of 2012.  Nissi agreed that the entire proceeds of sale of No [MM] would go to Sharkey.

Later that year Sharkey went to America where he worked with his brothers on their internet ventures.

Sharkey or the Trust did not repay the monies secured against No [NN] by the end of 2012, and stopped making payments on the mortgage at the end of 2012.

In 2013, after demands from the bank, Nissi refinanced the debt and rented the property out, presumably in order to meet the mortgage.  Sharkey commenced proceedings that in truth No [NN] was his and Nissi should convey the property to him; Nissi cross-claimed for performance of the March 2011 agreement (so far as Sharkey had agreed not to contest the ownership of No [NN]) and damages for its breach (so far as she had been put to expense to repay the mortgage when he did not).

The matter came on for hearing in February 2015 before Justice Robb.  Most of the facts above come from his judgment, finally handed down in September 2015.  Some of them may be a bit inaccurate because judges often don’t get every detail right and if such details don’t make a difference to the outcome or the matter is ultimately resolved they will stand uncorrected.  To save any suspense, I should add that Nissi was successful, though the amount of damages is yet to be assessed, mostly it seems because Nissi was unsuccessful in tendering in the course of the trial some of documentation proving components of her damages claim .  That just shows how hard-fought the trial must have been, because in fact the damages will presumably could well be continuing by reason of any interest on the mortgage debt that Nissi is probably still paying.  But maybe Sharkey, who is now in America, doesn’t really care all that much.

Which is what Nissi was worried about last February. If she won, she would be secure in her ownership of No [NN], but how would she get the money part of her claim?  Sharkey was now living in the USA.  Perhaps he had put his assets in the name of his new partner, as he said he had done with Nissi, to make himself proof against judgment.  When the hearing started, he gave evidence that he had negligible assets in Australia.  And in the opening by his counsel, some remark had been made about the witnesses returning to the USA as soon as they had given their evidence.

Nissi’s team jumped into action.  They engaged separate counsel, John Hyde.  On 18 February he went off to a different judge (the duty judge, Justice MacDougall) while the trial before Robb J was still going on and obtained an ex parte injunction preventing Sharkey from leaving the country.  Ex parte means they went before Justice MacDougall without forewarning Sharkey.

You can make ex parte applications when the nature of the order is such that if the other side knows you are going to seek the order (which is usually to stop them doing something) they might just go and do it before you can get the order, in which case it will be too late.  Such orders are always made in a way which brings the matter back to the court shortly after for the person bound by the order to have a chance to say why it should be discharged or should not have been made in the first place.  There is a duty when making an ex parte order to disclose all relevant circumstances to the court.  If you haven’t, that is the first ground on which the other side is entitled to have it discharged.

The problem for Nissi was that what was said by Sharkey’s counsel about Sharkey’s witnesses leaving immediately had been misinterpreted.  On a fair interpretation, and in the light of previous correspondence, it was clearly only a reference to witnesses other than Sharkey.  John Hyde told MacDougall that Sharkey too proposed to depart precipitately.

Justice MacDougall  made the orders at about 11.40am.  The orders required Sharkey to deliver up his passport to the Court.  They also provided for the matter to come back before him at 2pm.  This would normally be the point at which Sharkey would have his first opportunity to argue against the orders.  Pursuant to leave granted by MacDougall J, the orders were served on Sharkey in the precincts of the court during the morning-tea adjournment of the trial before Justice Robb.

It must have been a bombshell.  Sharkey’s side had just completed their case.  The matter had to be raised with Justice Robb because of the listing before Justice MacDougall at 2pm.

In correspondence over lunch Sharkey’s lawyers complained about the ex parte application and whether all relevant matters had been disclosed.  They even asked Nissi’s lawyers if they had disclosed to MacDougall J that Sharkey’s wife is more than six months’ pregnant and was also looking after a 10 month old child on her own.  Feelings were running high.

The matter shuttled backwards and forwards between MacDougall J and Robb J over the next day or so.  Robb J was reluctant to deal with an application to set aside an order made by MacDougall J.  There was also the question of the time available before Robb J to complete the substantive hearing, from which arguments over the ex parte orders would obviously be a distraction. Whilst Nissi had a separate barrister engaged, Sharkey did not.

Ultimately, the further consideration of the ex parte order was heard by MacDougall J on 25 February 2015.  His Honour set it aside on the basis of material non-disclosure.  Even then, transcript was not available of the 18 February ex parte hearing.  Once the transcript was available, John Hyde wrote to the judge and the other side apologizing for statements he made about what he had said on the 18th which proved to be incorrect.

This is an illustration of something that Macdougall J himself referred to when setting aside his earlier decision, because he accepted that the mistake about what had been said by Sharkey’s barrister about witnesses leaving was an innocent one.  As Justice Kunc later said (see further below):

It is, regrettably, an all too common experience for solicitors, counsel and even judges to think they heard something said in court which is ultimately not borne out by the transcript (assuming that the transcript is not itself in error). Context and preconceptions brought about by which side of the record someone is representing can have a powerful influence on the way something said in court may be heard. Different people will hear different things. Furthermore, particularly in circumstances of urgency, one person’s account of what they heard if given to another may create a predisposition in that other to read the transcript in a particular way. That is what occurred in this case

Just a bit ironically, given that his application to set aside the injunction was based on a misrepresentation to the court by Hyde concerning statements made on Sharkey’s behalf leading to an inference that Sharkey  was planning to flee the jurisdiction, Sharkey did in fact leave Australia for the USA on the evening of the day the injunction was set aside – though he was held up at immigration because the court order had not yet been taken off the books.  He eventually made his (delayed) flight but his luggage did not catch up with him for about 30 days.

This shows the strictness of the rule that an ex parte order will be discharged if there is a material misrepresentation.  The order was discharged even though the risk to Nissi of getting no money from Sharkey if she succeeded existed whether Sharkey left the jurisdiction immediately after giving evidence or at any time before he paid her what he might be found to owe or provided security for that amount.

Then again, you might think it a tall order to require Sharkey to remain in the country until then. Potential judgment creditors are usually only entitled to what was originally called a Mareva order preventing the dissipation or concealment of assets if it can be shown that there are such assets and there is reason to believe they will be secreted away in order to render the judgment futile.

Justice Robb delivered judgment in Nissi’s favour in September 2015, but the question of the amount of her damages was deferred to a further hearing.

In October, Sharkey changed lawyers.  His new solicitors, Bransgroves, wrote to Nissi’s solicitors complaining about the conduct of Nissi’s lawyers in obtaining the ex parte orders.  In this letter they said that this conduct was such misconduct that those lawyers could not be trusted to conduct Nissi’s case with the necessary dispassionateness and that they should therefore not continue to act for Nissi. The letter included allegations such as “grave misstatement of the law”, “recklessness”, “professional misconduct”, “complete fabrication”, “wilful deception” and “connivance.”

In February 2016 Sharkey filed a notice of motion seeking orders from the court that Mr Hyde and Ms Nissi’s solicitors, EMC, no longer be permitted to act for her.  In submissions for that application, Peter King (Malcolm Turnbull’s predecessor as member for Wentworth) repeated many of the accusations made by Bransgroves, albeit in more temperate terms.

Once lawyers’ personal interests are involved the forensic temperature always rises.  Classically, you see that in arguments about costs, where the argument (personal costs orders aside) is about loss of face and which side’s lawyers are going to have to get their clients to pay their fees and maybe also the other side’s.

This is all the more so when allegations of professional impropriety are made – if only because then it is likely that Hyde’s and the solicitors’ professional liability insurance policies were enlivened.  Even though it was unlikely that Mr Hyde would have any ongoing involvement in the case, he could hardly be expected for that reason to acquiesce in such a judgment on his conduct. The hearing of the notice of motion was a veritable festival of silk on the respondents’ side.

In the course of the hearing, before Justice Kunc, Peter King eventually resiled from the more florid accusations of professional misconduct, or at least no longer relied on them.  His Honour held, consistent with Macdougall J’s decision (and with the observations quoted above), that the mistake about whether Sharkey was planning to “abscond” immediately after giving his evidence was an understandable misunderstanding.  Sharkey’s application was dismissed.

Sharkey had applied for orders preventing not only the individual solicitors involved within EMC but also the entire firm be restrained from acting for Nissi.  Kunc J held that there was no basis for the application other than against the two partners involved so that the remaining partners were entitled to have Sharkey’s notice of motion summarily dismissed against them.  That’s over and above the fact that the application was eventually dismissed against the two partners involved.  The costs consequences for Sharkey of bringing an application with no basis (and at a time when the two partners who had been involved had undertaken or offered no longer to be involved) have yet to be determined.

EMC also applied for orders that the Bransgroves letter and Mr King’s submissions repeating the allegations made in it be removed from the Court file as containing material that was “scandalous and oppressive.”

Kunc J agreed that the letter was entirely inappropriate in tone and that this infected the submissions so that both were scandalous and oppressive.  But for the possibility that the matter would go further (such as by an appeal) he would have had them removed from the file.  Instead he ordered that they be placed in a sealed envelope in the Court file marked “Not to be opened without further order of the Court.”

Back to Midsomer.

Rather quaintly, the order preventing Mr Sharkey from leaving was described as an order in the nature of ne exeat colonia.  That’s a local adaptation of a historical English order ne exeat regna.

It means “Do not leave the colony.”

Afterword:

I speculated above that maybe Mr Sharkey, now in America and with negligible assets in Australia, doesn’t care all that much about the damages claim. Subsequently, Ms Nissi sought to amend her cross claim to include a claim for indemnity from the Trustee of the trust on the basis that, as a guarantor, she had repaid debts owed by it. I’m guessing this is because the Trust has assets which are amenable to enforcement even if Mr Sharkey does not (again the whole ne exeat problem). Ms Nissi had made a claim to be subrogated, described as “misconceived” and dismissed.  I can’t be bothered to rake through the facts to work out the misconception unless it is simply that it was back to front.

Robb J refused the amendment because it was too late and because, unless further evidence were to be led, consistent with his reasons to date it was doomed.  Robb seems to have taken the view (at [57]) that someone has blundered on Ms Nissi’s side.  Always an easy conclusion to reach in hindsight.

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One Response to “Do not leave the village”

  1. Andrew Says:

    Great read. I love it when you talk law to me.

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