515 South Orange Grove Owners Association v Orange Grove Partners [1995] CKHC 12; Plaint No. 208.1994 (20 December 1995)

IN THE HIGH COURT OF THE COOK ISLANDS
HELD AT RAROTONGA
(CIVIL DIVISION)
CA 1/95
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
Eighth 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 Trust 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: BJ Gibson for Respondents (in support of application for leave to appeal)
BH Giles QC and WN Brandon for Appellants (to oppose)
T Arnold for Respondents

Hearing: 7 and 8 September 1995
Judgement: 20 December 1995.

JUDGMENT OF THE COURT
(ON APPLICATION FOR LEAVE TO APPEAL)
DELIVERED BY SIR DUNCAN McMULLIN

On 6 November 1995 this Court delivered its judgment (the principal judgment) allowing the appeal of the appellants against judgments of the High Court of the Cook Islands delivered on 10 and 11 March 1995. A mareva injunction was therefore granted against assets of the fifth and sixth respondents because a cause of action arose within the limitation period specified in s. 13B(8) of the International Trusts Act 1984.

It then invited submissions from counsel as to whether leave should be given under s. 23(2) of the Act to publish the principal judgment. On 5 December 1995 it delivered its judgment (the publication judgment) on the publication issue. For the reasons given in that judgment, it effectively gave leave to publish the principal judgment without abridgment, both within and outside the Cook Islands.

The respondents have now applied for leave to appeal to Her Majesty in Council against the publication judgment and seek a stay of execution. For whatever reason, there is no appeal against the principal judgment. The time for appealing against that judgment has expired.

The application for leave to appeal against the publication judgment is brought under s. 2(c) of the Privy Council (Judicial Committee) Act 1984. Paras. (a) and (b) are not presently relevant. Section 2(c) reads:

"2. (1) Subject to these Rules, an appeal shall lie to Her Majesty the Queen in Council from a judgment of the Court of Appeal-

(c) ... Whether final or interlocutory, if in the opinion of the Court the question involved in the appeal is one which by reason of its great general or public importance or otherwise, ought to be submitted to Her Majesty in Council for decision."

Counsel for the respondents submits in support of the application that the question of publication of the principal judgment in its entirety is one which, by reason of its great general or public importance or otherwise, should be submitted to Her Majesty in Council. It is not contended that the principal judgment should not be published at all. The applicants accept that some measure of publication is appropriate and seek leave to appeal against this Court’s decision and ask a stay of execution only to the extent that the judgment should be published on the following basis:

"1. It is edited (except as to parties) so as to preserve confidentiality of the parties and specific details of the assets involved.

2. It is edited by removing references as to the competency or otherwise of the drafting of the International Trusts Act 1984 ("the Act").

3. That publication is limited to the parties involved in the above proceedings, the Attorney-General, the Solicitor-General, Trustee Companies licensed pursuant to the Trustee Companies Act 1981-1982 and their employees, and barristers and solicitors admitted to the High Court of the Cook Islands."

This is somewhat similar, but not entirely so, to the suggestion in the submissions originally made by counsel on the publication issue. We recorded his submissions then as follows:

"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 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 Trust Act 1984."

The essential difference between these two forms of publication is that it is now suggested that references to the competency or otherwise of the drafting of the International Trusts Act 1984 should be removed.

Two affidavits have been filed in support of the application. One is by a Mr Brent Weenick, Chairman of the Law Reform Committee for the Cook Islands Trustee Association. In essence, Mr Weenick believes that the unedited publication of the principal judgment will seriously prejudice the Cook Islands offshore industry, undermine the development and financial stability of the second largest industry and overseas dollars earned by the Cook Islands, and that it will not serve to maintain the integrity and creditability of the industry.

The other affidavit is by a Mr Maine Brown, Secretary of the Cook Islands Monetary Board. He believes that the confidentiality and secrecy of the clients of the off-shore industry is the cornerstone of that industry and that confidentiality will be prejudiced by the publication of the judgment.

This application for leave has been dealt with by written submissions and not on oral argument. In support of the application Mr Gibson has made a number of points. Essentially, his argument is captured in the following paragraphs from his submissions:

"...

6. It is submitted to allow the Judgment to be published within and outside the Cook Islands in its entirety may irreparably damage the Cook Islands offshore industry and bring to the Cook Islands jurisdiction into disrepute due to its inability to maintain and preserve confidentiality.

7. It is also submitted that the industry is dependent on the credibility and integrity of its offshore legislation and it is this legislation which attracts investors. There are numerous worldwide publications which focus on offshore jurisdictions which in a lot of cases are used by a particular jurisdiction as a marketing tool to promote that jurisdiction over another. The proponents of these jurisdictions, for reasons of self-interest and not dissemination of information, will dwell on comments made as to the ineptitude and/or incompetence of the drafting and the inability to preserve and maintain confidentiality.

8. It is this focus in the judgment on issues of confidentiality and drafting defects which will cause irreparable damage to the Cook Islands offshore industry and therefore the Cook Islands and its people generally (due to the revenue earning and employment providing role which the offshore industry plays in the Cook Islands economy). It is submitted that these detrimental consequences far outweigh the public interest and benefit of publishing an unedited version of the judgment.

............

12. For some years now the Act has been subject to review for amendment and is now before Parliament. Accordingly much of the Judgment and its decision in respect of interpretation of sections of the Act will be redundant. This will mean that, whilst the publishing of the Judgment in its entirety will attract adverse publicity, due to imminent amendment it will not accurately convey the law upon such amendment."

Mr Gibson has said that because the principal judgment was interlocutory the Court did not have the benefit of full argument on the certain provision of the International Trust Act. We would point out that the case was fully, competently and comprehensively argued by both sides a fact which may not be known to Mr Gibson who was not present at the hearing.

The case for the respondents in opposition to the application for leave to appeal is that the publication judgment is very much peripheral or ancillary to the principal judgment and that the applicants have misdirected themselves on the issue. The basis for the appeal is not whether the consequences predicted by the applicants will eventuate nor whether the Court should have regard to foreshadowed legislation. It is whether the question involved in the appeal is one which, by reason of its great general or public importance or otherwise, ought to be submitted to Her Majesty in Council for a decision.

We agree. The fact that the applicants or others are apprehensive as to the effect the decision will have, if published, does not elevate the decision to an issue of significance of the degree necessary for the granting of leave. The question is only whether in the discretion of the Court this particular judgment should be published. Nor is the fact that amending legislation is being considered and may be passed of any real relevance.

We note that the applicants concede that some measure of publication is in order but apparently consider that not one word of a judgment interpreting certain provisions of the Act which are obscure should come to the notice of anyone other than a nominated few representing the offshore industry, even although persons outside those few may be affected by the Court's construction of the Act. Apart from the point as to who would edit the judgment, and to what degree, the question raised by this application is whether the difference between publication of the unexpurgated judgment to all who would be interested in reading it and might be affected by it against the publication of an expurgated version with a limited readership is a question which, by reason of its general or public importance or otherwise, ought to be submitted to Her Majesty in Council for a decision.

We do not consider that the question comes anywhere near meeting that test. Comments about the shortcomings in the draftsmanship of legislation are not uncommon. The law reports are full of cases involving the interpretation of statutes in which strictures have been passed upon draftsmen of the statutes. The case of McGonagale v Westminister City Council [1920] 2 AC 716, cited in the principal judgment, is but one of them. Nor does the applicants’ view that the Court, in authorising publication, disregarded the spirit and intent of the Act raise a question of sufficient standing to warrant the granting of leave. The Act, particularly s. 23, confers a discretion on the Court. We have exercised our discretion on the balancing of the relevant factors.

Neither singly, nor cumulatively, do the matters advanced by the applicants amount to a question of great general or public importance which ought to be submitted to the Privy Council.

We have not overlooked the words "or otherwise" in s.2(c) nor where the overall justice of this case lies. (Stininato v Auckland Boxing Association (No. 2) [1978] 1 NZLR 609 at 612; Rich v Christchurch Girls’ High School [1974] 1 NZLR 21, 22). But any criticisms of adverse publicity which may be thought to follow on the publication of the judgment must be balanced against the need for those who may be affected by its provisions to know what interpretation has been placed upon them. As the Act itself is a public document it would be wrong for the Court to suppress any decision bearing on its interpretation.

For the reasons given, the application for leave to appeal and the application for stay of execution are both refused.

SIR DUNCAN McMULLIN

Solicitors for the Appellants: Clarkes, Rarotonga
Solicitors for the Respondents: Timothy Arnold, Rarotonga