515 South Orange Grove Owners Association v Orange Grove Partners [1995] CKHC 11; 208.1994 (5 December 1995)

IN THE HIGH COURT OF THE COOK ISLANDS
HELD AT RAROTONGA
(Civil Division)
Plaint No 208/94

BETWEEN

515 SOUTH ORANGE GROVE OWNERS ASSOCIATION,
a California Non-profit Mutual Benefit Corporation
First Appellant

JAMES E LUDLAM and
JANE H LUDLAM
Second Appellants

DEAN SCHNEIDER
a Trustee of the Schneider Trust
Third Appellant

GEORGE G LANCASTER and FRANCES R LANCASTER
as Trustees of the GG and FF Lancaster Trust
Fourth Appellants

FRANK J NOBLE and LOIS D NOBLE
Fifth Appellants

JANE BURNHAM
as Trustee of the Jane D Burnham Trust
Sixth Appellant

GERALD J LYNCH
as Trustee of the Gerald J and M Romaine Lynch Family Trust
Seventh Appellant

RAY JUDSON and MARY L JUDSON
as Trustees of the Judson Family Trust
Eight Appellants

CONSTANCE J CORNET
Ninth Appellant

ROBERTA S MacDONALD
Tenth Appellant

AND

ORANGE GROVE PARTNERS
a California Corporation
First Respondent

VICTOR ILLIG
Second Respondent

EVANGELINE ILLIG
Third Respondent

25/25 HOLDINGS LLC
a limited liability company a corporation established in the State of Nevada
Fourth Respondent

25/25 1994 INVESTMENT TRUST VICTOR J ILLIG
an international trust registered pursuant to the International Trusts Act 1984
Fifth Respondent

SOUTHPAC TRUST INTERNATIONAL INC
an international company incorporated
under the International Companies Act 1981-82
as trustee of the 25/25 1993 Investment Trust - Victor J Illig
Sixth Respondent

Coram: Sir Duncan McMullin (presiding)
Hillyer J
McHugh J

Counsel: BH Giles QC and WN Brandon for Appellants
T Arnold for Respondents

Hearing: 7 and 8 September 1995
Judgment: 5^th December 1995

JUDGMENT OF THE COURT (ON ISSUE OF PUBLICATION)
DELIVERED BY SIR DUNCAN McMULLIN

Section 23(2) of the International Trusts Act 1984 provides as follows:

"All judicial proceedings, other than criminal proceedings relating to international trusts shall, unless ordered otherwise, be heard in camera and no details of the proceedings shall be publicised by any person without leave of the Court or person presiding."

In accordance with that provision, the proceedings on appeal in this case were heard in camera and no details of that hearing and the resultant judgment delivered on 6 November 1995 have as yet been published. However, as we invited them to do, counsel have now made submissions as to whether leave should be given by this Court to publish the judgment.

Mr Giles for the appellant has submitted that it is entirely appropriate and in the public interest that the Judgment should be released for publication. He says that the appellants, as parties to the appeal, have no objection to the judgment being published. Indeed, they actively seek its release because the matters with which it is concerned are of public significance and importance and "ought not to remain closeted on a file in. Rarotonga". Furthermore, it would be strange if those most directly affected by this legislation and its proper interpretation (trust companies, members of the legal and accountancy professions who advise those companies and potential clients; potential investors and their advisers; the Cook Islands Government and the public) were to be denied knowledge of the ruling of the highest domestic Court of the Cook Islands.

Mr Arnold for the respondents acknowledges that the Court is given a discretion in the exercise of which it is entitled to consider the broader public interest and that the judgment, being of significance for the Cook Islands off-shore industry, is one which should receive some limited publication which would take account of that public interest. In particular, he acknowledges that it is appropriate that, identifying features such as the parties' names and specific details of the assets having been removed from the judgment, it should be passed to the Attorney-General and to the Solicitor-General. He also acknowledges that the judgment, having obvious implications for Cook Islands trust companies offering advice to clients and potential clients, publication should similarly be extended to them. Again, he acknowledges that publication should be extended to include all barristers and solicitors admitted to the High Court of the Cook Islands as they may be called upon to advise investors on the interpretation of the International Trusts Act 1984. It was his submission that if publication were permitted to the extent just mentioned, the interests of justice would be served. But he submitted that publication on a more widespread scale would be against the best public interests of the Cook Islands for two reasons, which are:

(a) the cornerstone of the Off-Shore Financial Centre is secrecy and confidentiality; and

(b) the judgment itself is (admittedly with justification) highly critical of the standard of craftsmanship of the legislation.

He points out that the Cook Islands is only one of a number of Pacific Off-Shore Financial Centres, that the business is a competitive one, and that publication of the judgment on an unlimited worldwide basis would simply enable overseas competitors of the Cook Islands to denigrate use of the Centre in the Cook Islands by reason Of, the technical imperfections of the legislation.

We are unable to accept that publication of the judgment should be restricted in the manner and to the person suggested by Mr Arnold. The judgment is one which interprets some provisions of the International Trusts Act which were obscure. So far as we are aware they have not as yet been interpreted by any other Court. To that extent the judgment adds something to the jurisprudence of the Cook Islands and a reading of the International Trusts Act would not inform a potential investor or, for that matter, any other person accurately as to the contents and meaning of the Act unless the judgment was also available.

It is entirely appropriate that, not only the persons named by Mr Arnold, but also the wider public who are or may at some time in the future be affected by the Act, should know its metes and bounds.

Nor are we impressed by the argument that "secrecy is the cornerstone of the legislation". There is nothing secret about the existence of the Act. Anyone who wishes to ascertain the law of the Cook Islands on investment under the International Trusts Act can presumably obtain a copy of it. Anyone who contravenes its provisions will not be able to plead ignorance of the law. There, should be nothing secret about a judgment which endeavours to throw light on some of the more obscure provisions of the Act. The investing public, who will be international investors, have the right to be informed of the true meaning of the Act. So have those who are in a position similar to the appellants, who may stand to lose by its provisions.

We do not see that any useful purpose would be served by giving the Attorney-General or Solicitor-General, who were not parties to the appeal, the right to make submissions on the question of publication. It is the public interest which is paramount, not just that of the Cook Islands Government.

For the reasons given, we conclude that it would be wrong to suppress publication. There will accordingly be an order that both substantive judgement and this present judgment be published within and outside the Cook Islands.

SIR DUNCAN McMULLIN

Solicitors:
For the Appellants: Manarangi, Rarotonga
For the Respondents: Timothy Arnold, Rarotonga