Reef Pacific Trading Ltd v Price Waterhouse [1998] SBHC 27; HC-CC 164 of 1994 (14 May 1998)

HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 164 of 1994

REEF PACIFIC TRADING LIMITED (The Company)
and JOANN MARIE MEINERS

v

pan lang="EN-GB" style="font-size: 12.0pt; font-family: Times New Roman"> PRICE WACE WATERHOUSE (The Firm),
RICHARD ANTHONY BARBER (Partner) and
WILLIAM DOUGLAS McLUSKEY (Partner)

lass="Mss="MsoNormal" style="margin-top: 1; margin-bottom: 1"> High Court of Solomon Islands
(Muria CJ)
Civil Case No. 164 of 1994

lass="Mss="MsoNormal" style="margin-top: 1; margin-bottom: 1"> Hea 7 April 1998
Judgment: 14 May 1998

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Mrs. J. Meiners of the plaintiffs
Ms. E. M. O'Reilly for thor the defendants

JUDGMENT

MURIA CJ: On 14 May 1998, I announced the Court’s decision on this application. I said I would publish the details of the Court’s reasons for doing so. The followings are those reasons.

Ms. O’Reilly made pplication, relying on the the provision of Order 39, Rule 10 of the High Court (Civil Procedure) Rules, 1964. That Rule provides:

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

ass="Mss="MsoNormal" style="margin-top: 1; margin-bottom: 1"> I feel it would be necessary to briefly set out the circumstances of this case before proceeding further to deal with the issues raised in the application The plaintiffs, by their writ of summons, claim against the defendants, among other things, damages for breach of duty, deprivation, negligence, wrongful possession, fraud and breach of statutory duty arising out of the appointment of the second and third defendants as Official Receivers and Special Managers and later, as liquidators of the plaintiff company. It was alleged that the second and third defendants procured their appointment by the High Court as Official Receivers and Special Managers and, later as liquidators, through fraud. Allegations have also been raised that the defendants’ appointment were void for irregularity being in breach of the provisions of the companies Act. By their Counter-Claim, the defendants claimed an indemnity allegedly entered into with the plaintiffs pursuant to their appointment as liquidators.

Having realised that this Ccannot sit in Australia, Coa, Counsel for the defendants now seeks an order to have the trial judge sit as an examiner instead in Brisbane, Australia for the purpose of taking the evidence of the Australian witnesses in this action. In support of the application, Counsel relied on the affidavits of Peter Andrew Smith, Richard Anthony Barber and William Douglas McCluskey. The argument as contained in the affidavits of the second and third defendants is basically that they are concerned and fearful for their liberty, and that of their former and present staff, being at risk if they or any of them were to travel to Solomon Islands to give evidence at the trial of this action. The basis for that contention are deposed to in Mr. Smith’s affidavit affirmed on the 9 December 1997 and filed on the 15 December 1997 where it is stated at paragraph 23 that in view of the history of the litigation arising out of the receivership of the plaintiff company, together with some threat of possible investigation by the Director of Public Prosecutions of breaches of the Companies Act, the second and third defendants were not prepared to come to Solomon Islands to give evidence at the trial of this action. In paragraph 24 of his affidavit, Mr. Smith stated that James Barley, Graeme Price and Jane Capelli were not prepared to come to Solomon Islands to give evidence at the trial of this action but that they were prepared to give evidence in Australia. Mrs. Capelli was said to be due to have her baby in April 1998 and so not be able to travel before then. Mr. Smith further deposed that he was unable to obtain instruction as to whether the other witnesses were willing to travel to Solomon Islands to give evidence at the trial of this action. There are witnesses also in Australia whom Mr. Smith said would be available to be called by the plaintiffs if their evidence were to be taken in Australia.

The principles to be applied ins such as this are well setl settled. First of all, Order 39, rule 10 (above) as pointed out earlier, is not limited to the taking of evidence in this country but it also applies to where parties seek to have evidence of witnesses taken outside Solomon Islands. Principally, the Court exercises its power under the rule for the purposes of justice and done so entirely as a matter of discretion of the Court. Secondly, the cases in this area of the law have also pointed out that where application is made under the rule, the Court must consider the interest, not only of the party applying but of all the parties in the case. Thus, Baggallay L.J., said in Berdan-v- Greenwood (1882) 20 ChD 764n at 765:

“for urposes of justice does nots not mean in the interest of either party to the litigation but in the interest of all the parties to the litigation.”

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That was a case of a plaintiff seeking a commission to n to take his evidence abroad on the ground that he was ill and his life would be in danger if he were to travel across the English Channel. He was not able to substantiate that round and the Court refused to grant him the commission. However, I feel it is worth noting what Baggallay L.J., also said in that case (p.765):

“But we must regard the interest of justice, the interesterest of the defendants as well as that of the Plaintiff, and of course we must consider the nature of the issues which are raised in the pleadings.”

and the learned Law Lord to point out that:

The basic rules relating to the granting of an order for evidence to be taken abroad had also been expressed in Ross v- Woodford [1893] UKLawRpCh 143; [1894] 1 Ch 38 where it was stated that before allowing evidence to be taken abroad the Court must be satisfied that the application is made in good faith and not made for the purposes of delay and embarrassment In other words, the Court must consider whether the application is an honest one. The Court also pointed out that in exercising the discretion of the Court to grant or refuse an order to take evidence abroad, the Court will not regard the case of a defendant with the same strictness as the case of the plaintiff who has chosen his own forum. In the present case the defendants are the ones seeking an order to have their evidence and those of their witnesses taken abroad. It will be noted that not only that the defendants are defending the claims brought against them but that they are also bringing counter-claims against the plaintiffs relying on the pleadings as contained in their Defence. In such a case they are, in my view, in exactly the same position as the plaintiffs are, in terms of the principles stated in Ross -v- Woodford.

hen we have the case of New -v- Burns [1894] QBD 104 where the Court held that where a person resident abroad is sued in England, he has a prima facie right to a commission to take his evidence in the country where he lives. To that general principle there must also be exception, particularly when the Court has to have regard for justice, the interest of both the defendants and the plaintiffs and the nature of the issues disclosed in the pleadings. It is in this regard that I, with respect, prefer the reasoning of the High Court of Australia in Willis -v- Trequair [1906] HCA 32; (1906) 3 CLR 912. That was a case seeking to have one of the defendants’ evidence taken in South Africa. The main ground relied on by the defendants/appellants was that the defendant concerned was a material witness and they were not able to secure his attendance in the Court in Australia. In the course of its judgment the High Court considered and agreed with the law as laid down in Williams -v-Mutual Life Association of Australasia [1904] NSWStRp 117; (1904) 4 S.R. (N.S.W.) 677 where the Chief Justice said:

“I am however, prepared todown this principle, that ahat as soon as a plaintiff or defendant shows to the satisfaction of the Court that a witness is out of the jurisdiction of the Court, and that his evidence is material, and that the Court has no power to enforce his attendance, the Court or Judge is bound to exercise its discretion, unless the other side can establish to the satisfaction of the Court that the witness can and will attend.”

In the same case Mr. Justice G. B. Simpson whose comments the High Court also referred to, said:

“I agree as to what the Chie Chief Justice has said as to the state of the law. 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.”

To that statement of the law, the High Court agreed, with a slight modification added to it. In the course of delivering the judgment of the Court, Griffith C.J. said:

“We agree with that stat of the law with this modifmodification that the party asking for the commission should establish to the satisfaction of the court that he cannot procure the attendance of the witness. That is the general rule, to which, however, there may possibly be exceptions.”

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The other case to which reference was also made by the the High Court was the case of Lawson -v-Vacuum Brake Co. [1884] UKLawRpCh 164; 27 Ch. D. 137. The witness in that case was a person whose evidence was said to be material in an allegation of conspiracy which he was said to have entered against the plaintiff and had since left the country. It was argued that his evidence could not be procured in England. After giving his reasons as to why such a witness should be examined in Court, Cotton L.J. said:

“If, however, it could be shown that he c he could not be induced to come here, or that the plaintiff could not reasonably be expected to bring him here. I think it would be right to give leave to examine him abroad, and it would be for the Court or the jury at the trial to determine how far the weight of his evidence was affected by their not having seen or heard him. But I think in a case of this sort, where it is important that the witness should be examined in Court, a heavy burden lies on the party who wishes to examine him abroad, to show clearly that he cannot be reasonably expected to come here.”

Another Judge in that case, Lindley L.J., said that he could not grant the commission to take evidence abroad for the purposes of justice in view of the pleadings in the case.

see the Courts, in the various cases discussed, not only cnly considered the material importance of the evidence of the witness and that of his residence abroad as factors to be taken into account in the exercise of their discretion to grant or refuse orders to take evidence abroad but that they also consider factors such as the nature of the case giving rise to the need to have the witness subject to the test of strict cross-examination in Court and the ability of the party seeking the order to procure the attendance of the witness to give evidence at the trial. There is also the need to ascertain whether there is a question to be tried: In reBoyse; Crofton v Crofton (1881-1882) 20 Ch D.760. In this connection I need only refer to another case, Coch -v- Allcock & Co. [1888] UKLawRpKQB 86; 21 QBD, 1 which was also referred to by the High Court of Australia in the Willis-v-Trequair Case. In the former, after considering the circumstances of the case, the Court intimated that for the order to be made for evidence to be taken abroad, the Court has to be satisfied that there is good reason why the witness cannot be examined in the jurisdiction of the trial Court. In the course of his Judgment, Field J. after referring to Lawson -v-Vaccum Brake Co., said:

class="Mss="MsoNormal" style="margin-left: 36.0pt; margin-top: 1; margin-bottom: 1"> “It is almost a matter of course in ordinaryinary cases that if a party swears that the evidence of the witnesses whom he seeks to examine is material a commission will be granted. There is this important exception, that if the party himself wants be examined and the circumstances are such as to make it apparent that it is important that the evidence proposed to be given should be subject to the test of strict cross-examination, and for that purpose his presence in Court necessary, that, in the discretion of the Judge, may be a ground for refusing an order for a commission.”

Wills J. also, after referring to Lawson -v- Vav- Vacuum Brake Co., had this to say:

“The decision proceeded upod upon the ground that the witness whom it was sought to examine had been a party to the transactions which the plaintiff was seeking to impeach on the ground of fraud… If ever there could be a case for refusing to examine a witness upon commission, it would be that one in which such a person was the principal witness, and in such a case, therefore, if the plaintiff desired to have him examined on commission, it lay upon him to make out that it was impossible to bring him to this country.”

As it can be seen, the High Court explained the previous cases and found that there was no conflict between those cases and the rule it stated in Willis -v- Trequair. With respect, I agree. In my humble view, Willis -v- Trequair has shed a more practical consideration of the notion of justice under the rule and expressed in the words, for the purposes of justice. Further in my humble view also, Willis -v- Trequair envisioned the practical possibility of procuring the attendance of witnesses in view of today’s modes of travelling and the means of the applicants to secure that attendance.

class="Mss="MsoNormal" style="margin-top: 1; margin-bottom: 1"> In the present case, there is no te that the persons named amed are material witnesses and that they reside abroad. Among those witnesses are the two defendants against whom allegations of fraud and breaches of the Companies Act are brought The other witnesses are equally important to rebut those allegations. The defendants counter-claim by way of an indemnity which no doubt depends very much on the allegation of fraud brought against them. As to the possibility of bringing the witnesses, particularly, the defendants themselves, no evidence had been adduced to show that it is impossible to secure the attendance of the defendants or that of their witnesses to give evidence at the trial. The only evidence produced is that of the defendants’ unwillingness to travel to Solomon Islands to give evidence at the trial of this action because of fear of criminal investigation and in view of the past history of the litigation in this matter involving the plaintiffs and the defendants. It lay upon the defendants to make out that it is impossible to bring themselves and their witnesses to this country. The reasons given by the defendants/applicants in this case for not wanting to come to Solomon Islands to give evidence are, in my view, not sufficient to satisfy this Court that it is impossible to bring them and their witnesses to this country. This is a case where the presence of the defendants and their witnesses is necessary. As such, in my judgement, this is a case in which an order for evidence to be taken abroad ought to be refused. I bear in mind that this Court cannot enforce the attendance of the defendants and his witnesses as they are out of the Jurisdiction of this Court but on the authorities, this is a case in which the Court can properly exercise its discretion to refuse the order sought.

If I am wrong on that, and for the sakergument, Order 39, rule 10,e 10, does not empower this Court or the trial judge to go and sit outside the jurisdiction of the Court, either as a Court or as an examiner. The practice envisaged under the rule is for this Court to make an order empowering an examination of witnesses to be done outside its Jurisdiction by any other person. Where such order is made, a request to that effect is issued under rule 11 of Order 39 and forwarded to the relevant authorities in the Jurisdiction where the witnesses reside. The examination of the witnesses thereafter follows as provided for under the rules. All the authorities relied on by the defendants applicants support that practice. None of those authorities support the case prayed for the defendants/applicants to have the trial judge in this action in the High Court of Solomon Islands to go and sit as an examiner abroad and then return to this country and continue hearing the action as trial judge. As the trial judge in this action, I am not prepared to assume the role of an examiner sitting abroad outside my jurisdiction. The application by the defendants/applicants in this case is based on the misconception of the rule relied upon.

For all the reasons stated the order sought by the defendants/applicants cannot be granted and must be refused.

(Sir John Muria)
Chief Justice