Reef Pacific Trading Ltd v Price Waterhouse [1998] SBCA 9; CA-CAC 6 of 1998 (25 November 1998)

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Nature of Jurisdiction	Appeal from a judgment of The High Court of Solomon Islands (Muria CJ.)
Court File No.	Civil Appeal Case Nos. 6 of 1998 (an appeal from Case 164 of 1994)
DATE OF HEARING:	23 July 1998
DATE OF DELIVERY JUDGMENT:	25 November 1998
THE COURT:	KAPI, (Ag) P., Casey JA, Kabui JA.
	REEF PACIFIC TRADING LIMITED
	JOANN MARIE MEINERS

	V.

	PRICE WATERHOUSE
	RICHARD ANTHONY BARBER
	WILLIAM DOUGLAS McCLUSKEY
ADVOCATES
Appellants:	Sol-Law
Respondents:	J. Meiners
KEYWORDS:	Leave to appeal - Examination of witnesses outside jurisdiction - witnesses unwilling to attend - order 39, rule 10 - refusal to attend genuine
EX TEMPORE/RESERVED	?????
ALLOWEDIDISMISSED:	Allowed.
PAGES:	1 - 11

IN THE SOLOMON ISLANDS COURT OF APPEAL
Civil Appeal Case No 6 of 1998 (High Court Civil Case 164 of 1964)

Date and Place of Hearing: 23 July 1998 at Honiara
Date of delivery of Judgment: 25 November 1998

BETWEEN:	REEF PACIFIC TRADING LIMITED
	First Plaintiff/ First Respondent

	JOANN MARIE MEINERS
	Second Plaintiff/Second Respondent

AND:	PRICE WATERHOUSE
	First Defendant/First Appellant

	RICHARD ANTHONY BARBER
	Second Defendant/Second Appellant

	WILLIAM DOUGLAS McCLUSKEY
	Third Defendant/Third Appellant

Application for leave to appeal against the refusal by Muria CJ on 14 May 1998 to make an order under Order 39 rule 10 of the High Court (Civil Procedure) Rules 1964 for the examination in Brisbane of two of the defendants (the above named appellants Messrs Barber and McCluskey) and of a number of witnesses they propose to call, all of whom reside in Brisbane. The defendants have been sued in the Solomon Islands High Court by the plaintiffs, Reef Pacific Trading Ltd (the company) and Joann Marie Meiners (described as its administrator) for damages alleged to have arisen as a result of their misconduct in respect of appointment and activities of Mr. Barber as receiver and manager of the Company in 1991. He and Mr. McCluskey are alleged to have been partners in the defendant firm Price Waterhouse. They have counterclaimed for indemnity against the Company for any amount they may be found liable for in the proceedings.

The defendants sought by summons the appointment of the trial Judge (who happens to be the learned Chief Justice) as examiner and listed 15 witnesses for his examination in Brisbane. The summons was supported by an affidavit by Peter Andrew Smith, a solicitor for the defendants, setting out a history of abortive criminal proceedings and other ineffective legal actions taken by Mrs. Meiners and her husband against them and others associated with Price Waterhouse, demonstrating in their view persistent legal harassment of anyone involved with the receivership. Those proceedings were either quashed at the outset or summarily dismissed, although in some cases they were taken unsuccessfully to appeal.

In July 1995 a Commission of Inquiry was appointed by the Honourable the Prime Minister into the receivership including the conduct of Messrs Barber and McCluskey, and it heard evidence from 30 witnesses in Brisbane and Honiara at intervals between 7 June and 4 October 1996. We were informed that its findings have not yet been released. The affidavit also referred to concern over attempts to have the Director of Public Prosecutions conduct an investigation into the same matters, which are believed to be also the same as those likely to be raised in the hearing of the present action.

In the light of this conduct, Messrs Barber and McCluskey and others proposed to be called as witnesses by the defendants say they are fearful of coming to Solomon Islands to give evidence because of the likelihood of further groundless but harassing criminal and civil proceedings against them.

In his judgment the Learned Chief Justice refused to exercise his discretion to make an order for examination, and also held that in any event Order 39 rule 10 did not empower the Court or trial Judge to sit outside the jurisdiction of the Court, either as a Court or as an examiner. That rule states:

“The Court may, in any cause or matter where it shall appear necessary for the purposes of justice, make any order for examination upon oath before the Court or any officer of the Court, or any other person, and at any place, of any witness or person, and may empower any party to any such cause or matter to give such depositions in evidence therein on such terms, if any, as the Court may direct.”

Dealing first with the ability of the trial Judge to act as an examiner outside the jurisdiction, we note that the rule does not refer specifically to a Judge, by contrast with the comparable English Order 39 rule 1 which enables a Judge to sit as an examiner, but does not authorise the Court. However, in Order 1 of our rules, “Court” is defined as including the High Court and the Chief Justice and Judges of the High Court. Section 77(1) of the Constitution, dealing with the Judiciary, states that there shall be a High Court for Solomon Islands having unlimited original jurisdiction to hear and determine any civil or criminal proceedings under any law, together with such other jurisdiction and powers which may be conferred on it by the Constitution or Parliament. The Court is described as one “for Solomon Islands”, from which it must follow that its jurisdiction and that of its Judges is limited to this territory. Accordingly they cannot function as either a Court or one of its Judges in another jurisdiction.

This was recognised by the Supreme Court of South Australia in Re The Co-operative Development Funds of Australia Ltd (N02) 3 ACLR 109 in which Sangster J was asked to appoint himself as examiner for the examination of witnesses in Tasmania, under rules similar to ours. With the consent of the parties he felt able to do so, not in his capacity as a Judge, but as a special examiner appointed by the Court. (No such consent was given by the plaintiffs in the present case).

A significant feature of the order he made was a provision that he could use his own observations of the demeanour of witnesses and generally decide all questions of credibility as though they had given evidence at the hearing. With respect to Sangster J, we do not think it open to an examiner to form any conclusion about the credibility of witnesses; his or her function is simply to record the examination in the form of depositions and forward them to the Registrar (Ord 39 r 22). And although they may make a special report about the examination or the conduct of witnesses, it can only relate to facts and may not extend to giving an opinion on credibility - see Re Wipperman decd, Wissler v Wipperman [1953] 1 All ER 764. The reality is that once the trial Judge starts forming such opinions as an examiner, he or she starts to act as a Judge, a thing which they cannot do outside the jurisdiction. Indeed, we think it impossible for a trial Judge to act as an examiner without confusing the capacities of Judge and examiner, assuming (which we do not) that it is ever possible to separate such functions in judicial proceedings of this nature. In our view the Learned Chief Justice was correct in concluding that Ord 39 r 4 did not empower him to appoint himself to act as examiner.

In considering whether to order an examination, he rightly stressed that the power to do so is discretionary, to be exercised where it appears necessary for the purposes of justice, citing the comments of Baggally LJ in the Court of Appeal in Berdan v Greenwood (reported in a note in (1882) 20 ChD at 764), to the effect that regard must be had to the interest of both the plaintiff and the defendant and to the nature of the issues raised in the pleadings. He referred to a number of authorities in which matters that could be relevant to the exercise of the Court’s discretion have been discussed, among them being Ross v Woodford [1893] UKLawRpCh 143; (1894) 1 Ch 38 in which Chitty J pointed out that in deciding whether to grant or refuse a commission to take evidence abroad, the Court will not regard the case of a defendant with the same strictness as the case of a plaintiff who has chosen his own forum. This was approved by the Court of Appeal in New v Burns (1894) 64 LJQB 104 where it was held that a person resident abroad who is sued has a prima facie right to a commission to take his evidence in the country where he lives.

The learned Chief Justice observed that in the present case the defendants had brought a counterclaim and should therefore be regarded as being in the same position as the plaintiffs. With respect we cannot agree. The counterclaim was brought as a ‘defensive proceeding claiming indemnity from the company in respect of the plaintiffs’ claims, and would not exist if the action had not been instituted. It cannot for a moment be said that in bringing it the defendants have “chosen their own forum”, thereby disqualifying them from the favourable consideration generally accorded to defendants applying to take evidence abroad. This approach to a counterclaim is reflected in Neck v Taylor [1893] UKLawRpKQB 54; [1893] 1 QB 580 and Buckley v Bennell Design and Construction Pty Ltd (1974) 1 ACLR 301, both dealing with applications for security for costs, but the principle is equally applicable to the present situation.

His Lordship referred to Willis v Trequair [1906] HCA 32; (1906) 3 CLR 912 in which Griffith CJ accepted the general practice (noting there may be exceptions) in these terms:

“If a witness is a material witness, and is out of the jurisdiction of the Court, and his evidence cannot be obtained by the issue of any process out of the Court, then a commission ought to issue”

and he added that the party asking for the commission should establish to the satisfaction of the Court that he cannot procure the attendance of the witness. However, His Lordship mentioned a number of decisions in which a more stringent obligation has been placed on the party seeking an order and which were considered in Willis v Trequair. They included Berdan v Greenwood (above) where the ground for the application by a party for his own examination was regarded as a pretence, as explained in Langen v Tate [1883] UKLawRpCh 170; 24 Ch D 522; Lawson v Vacuum Co 27 Ch D 137, involving allegations of fraudulent conspiracy to which the witness sought to be examined was a party; In re Boyse, Crofton v Crofton [1882] UKLawRpCh 140; 20 Ch D 760 where at first instance Wills J said of Lawson v Vacuum Brake Co that in such a case it lay upon the plaintiff to show it was impossible to bring the witness into the country, and in the Court of appeal Lord Esher pointed out that it was a matter of discretion, but to be exercised in a stricter manner in the case of a plaintiff seeking a commission to examine himself.

It is clear that a witness has been required to attend where he or she was a major or principal actor in questioned transactions and the allegations are such that their presence is important for the proper assessment of their evidence. These qualifications may apply with greater force where a party to the action itself asks to be examined in such circumstances- see Coch v Allcock & Co [1888] UKLawRpKQB 86; 21 QB D 1.

In refusing to make any order for examination the learned Chief Justice, citing the comments of Willis J in In re Boyse above, said it lay upon the defendants to make out that it is impossible to bring themselves and their witnesses to this country, and that the reasons given were not sufficient to satisfy the Court of this. Mr. Sullivan submitted he had put the test too high, and we think this criticism is justified. As the cases demonstrate, in each the exercise of the discretion turned on the particular facts such as the nature of the action, the special need to have the attendance of witnesses in person, the inconvenience and expense of attending trial, the ability of the parties to secure the witnesses’ attendance, and other relevant factors. While the practice in older cases may afford persuasive guidelines, they do not lay down rules fettering the Court’s discretion which must be be exercised in the interests of justice. It must also be remembered that considerations of hardship and expense which may have prompted orders for examination abroad in many of them have not the same impact in present conditions of speedy and convenient air travel. With respect, we are satisfied His Lordship erred in setting the test of impossibility of attendance for all the proposed witnesses, and we think it appropriate for leave to appeal to be granted and for this Court to review his exercise of discretion and if necessary to undertake a fresh exercise of it.

We deal first with the position of the two defendants. As noted by the learned Chief Justice, serious allegations of fraud and breaches of the Companies Act are alleged against them. They are principal witnesses and, as Field J said in Lawson v Vacuum Brake Co, it is important that their evidence be subject to strict cross-examination before the trial Judge to enable a proper assessment of their credibility. They are able to attend the trial, the reason for their unwillingness being the perceived threat of further harassment by Mr. and Mrs. Meiners. But it seems they have now achieved their objective of brining the defendants to Court. The only threat now concerning them is the suspicion that moves are under way for the Director of Public Prosecutions to conduct an enquiry. However, Mr. Smith deposed that the Director has said he is not aware of any proposed investigation, which in any event would have to be conducted with his authority, and that he has given no authority or instructions for this to be done. We have difficulty in understanding the defendants’ concern over coming to Solomon Islands in the light of this information, especially bearing in mind that the Director is a public officer who can be expected to exercise his powers responsibly. The possibility that he might institute an enquiry is not sufficient to justify making of an order for their examination abroad, in the light of the importance of having their evidence given personally before the trial Judge. Accordingly we agree with His Lordship’s refusal to order their examination.

In deciding what should be done about the other witnesses who say they refuse to come to Solomon Islands, the important consideration is that there is no power to compel their attendance at the trial- see Ward v Interag Pty Ltd [1985] 2 Qd R 552. To justify an order for examination, we must be satisfied that their refusal is genuine, and that the defendants cannot procure their attendance, and even then an order may be refused if they are essentially involved as principals in the allegedly fraudulent transactions and whose credibility can only be properly assessed in the trial itself.

In his supporting affidavit Mr. Smith lists 13 witnesses (apart from Messrs Barber and McCluskey) whom the defendants desire to have examined in Brisbane. They comprise four associated with Price Waterhouse as partners or past or present employees, namely Messrs Elliott, Brewer, Didlick and Ms Powe; and nine who are not so associated, namely Mrs. Capelli and Messrs Bayley, Price, Pickard, Parr, M. McCluskey, Sullivan, Torpulund and Warren. Messrs Bayley, Price and Mrs. Capelli have told Mr. Smith that they are not prepared to travel to Solomon Islands to give evidence but are willing to do so in Australia, while Mr. Sullivan is available to give evidence in either jurisdiction. Mr. Smith deposed that he was unable to contact Messrs M. McCluskey, Warren or Torpulund to ascertain whether they are prepared to come here to give evidence. As to the other proposed witnesses, he said nothing specific about their willingness to attend, but made it clear that the defendants and those associated with Price Waterhouse are “extremely concerned and fearful that their liberty may be at risk” if they travel to Solomon Islands to give evidence, in the light of the litigation and criminal proceedings referred to above.

There is no suggestion that the defendants cannot afford to bring all their witnesses to Solomon Islands, so it cannot be said that from the point of view of expense it would be “oppressive and unfair” to compel them to come over here to attend the trial - see Ross v Woodford at p 42. The defendants are prepared to meet the costs of the examination in Australia including the expenses of Mrs. Meiners.

We refer to the passage from Willis v Trequair cited above to the effect that a commission ought to issue where the party asking for it establishes to the satisfaction of the Court that he cannot procure the attendance of the witness. The affidavit of Mr. Smith affirmed on 9 December 1997 states that Mrs. Capelli and Messrs Bayley and Price are not prepared to travel to Solomon Islands to give evidence at the trial. In her submission in rebuttal Mrs. Meiners alleged that Mr. Bayley made a false affidavit to which he attached an altered agreement in order to appoint a receiver; that Mr. Price deposited a bogus guarantee in Court as security for costs in another action; and that Mrs. Capelli feared involvement in an allegedly fraudulent Court order appointing Mr. Barber receiver in respect of the present transactions. The sweeping nature of these allegations tends to support the genuineness of their concern in coming to Solomon Islands lest they become subject to proceedings of the kind already experienced by the defendants. We are satisfied that whether they are well-founded or not, their concerns are genuinely held, and that the test adopted by Griffiths CJ in Wills v Trequair has been met, in that the defendants cannot procure the attendance of these witnesses. Accordingly we think it appropriate there should be an order for their examination in Brisbane, even though Messrs Bayley and Price were intimately involved in the transactions leading up to this litigation. To refuse an order would deprive the defendants of their important supporting evidence, even though the trial Judge will have to take into account the fact that he has not seen and heard them in assessing the credibility of their evidence.

In a later affidavit of 28 January 1998 Mr. Smith deposed that Messrs Didlick, Elliott and Ms Powe were unwilling to attend Solomon Islands to give evidence for similar reasons. Although they appear not to have been central figures in the questioned transactions, they played important parts and their evidence will be material to the defendants. Against the background of the legal proceedings instigated by Mr. and Mrs. Meiners and referred to above, we think their concerns can also be regarded as genuinely held. It seems significant that the Meiners have not taken the simple step of filing an affidavit in reply stating they have no intention of taking or instigating action against these witnesses should they attend the trial, and undertaking not to do so, if such is the case. We think that realistically it must be accepted that they will not come voluntarily and that the defendants cannot procure their attendance.

Accordingly an order for examination of these three witnesses in Brisbane would also seem appropriate. In respect of the other witnesses in his list, Mr. Smith could give no information in his affidavits about their willingness to attend, apart from Mr. Sullivan whom·he said would be available. No order for examination would be warranted in those cases.

Leave to appeal is granted. The appeal is allowed to the extent of setting aside the order of the High Court refusing the defendant’s application for the examination in Brisbane of Bruce Norman John Elliott, Peter Brewer, Charles Didlick, Julie Anne Powe, Jane Capelli and James Molyneux Bayley (all of whom are referred to in Peter Andrew Smith’s affidavit affirmed on 9 December 1997), and in its place there will be an order that those persons be examined there in accordance with Order 39 before an examiner appointed by the High Court, and the matter is remitted to that Court to make such appointment and to give such further orders and directions as may be necessary or expedient for the conduct of the examination. In all other respects the decision of the High Court is affirmed. As both parties have been partially successful on this appeal, we make no order as to costs.

Court of Appeal of Solomon Islands

Reef Pacific Trading Ltd v Price Waterhouse [1998] SBCA 9; CA-CAC 6 of 1998 (25 November 1998)