Philip v Maxima Resources Corporation [2005] WSSC 12 (17 August 2005)

IN THE SUPREME COURT OF SAMOA
HELD AT APIA

IN THE MATTER of the Declaratory Judgments Act 1988

AND

IN THE MATTER of the International Companies Act 1987

AND

IN THE MATTER of MAXIMA RESOURCES CORPORATION
an international company registered under number 1492 pursuant to the provisions of the international Companies Act 1987 and having its registered office at Offshore Chambers, Ground floor, National Provident Fund Building, Beach Road, Apia.

BETWEEN

FEI NIU PHILIP
of 5453 Bravo Toro Lane, Santa Rosa CA 95401, California, United States,
Company Director.
Plaintiff

AND

MAXIMA RESOURCES CORPORATION
an international company register under number 1492 pursuant to the provisions of the International Companies Act 1987 and having its registered office at Offshore Chambers, Ground Floor, National Provident Fund Building, Beach Road, Apia.
First Defendant

AND

OFFSHORE INCORPORATIONS (SAMOA) LIMITED
a duly incorporated company having its registered office at Offshore Chambers, Ground Floor National Provident Fund Building, Beach Road, Apia.
Second Defendant

AND

MRS PEARL CC HSU NIU,
of 25 Section 3, Yang Tec Road, Taipei, Taiwan, Republic of China.
Third Defendant

Counsel: W Akel (of the New Zealand bar) and TK Enari for first and third defendants in support
M Ring QC (of the New Zealand bar) and R Drake for plaintiff in opposition
G Stowers for second defendant

Hearing: 4 August 2005
Judgment: 17 August 2005

JUDGMENT OF SAPOLU CJ

In this interlocutory proceeding the Court is concerned with a motion by the first defendant for an order that the oral evidence of the third defendant and her daughter Josephine Tsien be taken by video link. The motion was opposed by the plaintiff whereas counsel for the second defendant elected not to make submissions but indicated that she supports the first defendant's motion. On 5 August 2005, the day after hearing the motion, I stated my conclusion to decline the motion but indicated to local counsel who were present that I will prepare and publish a written judgment setting out the reasons for the conclusion I have reached. This is that judgment.

Jurisdiction

As this is the first motion to come before any Samoan Court for the evidence of an overseas witness to be taken by video link, it is important to establish first whether this Court has jurisdiction to entertain such a motion. As this is primarily a matter of procedure, the starting point for consideration of this issue would have to be the Supreme Court (Civil Procedure Rules) 1980.

The Rules contain no express provision for taking the evidence of an overseas witness by video link. However, r. 206 provides:

"If any case arises for which no form of procedure has been provided by the Judicature Ordinance 1961 or these rules, the Court shall dispose of the case in such manner as the Court deems best calculated to promote the ends of justice."

In other jurisdictions like England, Australia and New Zealand, the use of video link as a new technological technique for taking viva voce evidence of overseas witnesses in the context of Court proceedings has gained wide acceptance. However, there is the caveat that this new technique must be used fairly. In those jurisdictions, the Courts have held that they have jurisdiction to order the taking of evidence for the purpose of Court proceedings by video link where it is in the interests of justice to do so. For England, see, for example, Polanski v Condé Nast Publications Ltd [2005] UKHL 10; [2005] 1 All ER 945. For Australia, see for example, Tetra Pak Marketing Ply Ltd v Musashi Pty Ltd [2001] FCA 1261; Australian Medical Imaging Pty Ltd v Marconi Medical Systems Australia Pty Ltd [2001] NSWSC 651; and ASIS v Rich [2004] NSWSC 467. For New Zealand, see, for example, B v Dentists Disciplinary Tribunal [1994] 1 NZLR 95; Aeromotive Ltd v Page (2002) 16 PRNZ 329; and Ithaca (Custodians) Ltd v Perry Corporation (2002) 16 PRNZ 773. In Tari v Minister of Health (2002) VUSC 42, Coventry J, after referring to some overseas authorities, held that the Supreme Court of Vanuatu has power to admit evidence by video link provided safeguards are in place to ensure fairness between the parties.

The present motion for leave to have the evidence of two overseas witnesses given by video link gives rise to a procedural issue for which no form of procedure is provided in the Judicature Ordinance 1961 or the Rules. In terms of r.206, where a situation like this arises, the Court shall dispose of it in such manner which is best calculated to promote the ends of justice. In my view, this gives the power to this Court to order the taking of an overseas witness's evidence by video link where, in a particular case, it is in interests of justice so to do. This is quite apart from this Court's inherent jurisdiction to control its own procedures in order to serve the interests of justice.

The legislature has also seen fit to give this Court wide jurisdiction, power and authority which may be necessary to administer the laws of Samoa. Section 31 of the Judicature Ordinance 1961 provides:

"The Supreme Court shall possess and exercise all the jurisdiction, power, and authority which may be necessary to administer the laws of Samoa."

Then in s.39 of the Judicature Ordinance 1961, it is there provided:

"Subject to the provisions of this Ordinance, the Code of Civil Procedure and the Rules of Court, the practice and procedure of the Supreme Court in the exercise of its civil and criminal jurisdiction shall be such as the Court thinks in each case to be most consistent with natural justice and convenience."

In B v Dentists Disciplinary Tribunal [1994] 1 NZLR 95, Williams J in the High Court of New Zealand said in respect of the inherent procedural jurisdiction of the Court at pp 104-105:

"[The] Courts have always felt able to adopt innovative new procedures that will improve the efficiency of the Court. Even if the rules could not be construed so as to create the necessary jurisdiction, this Court would not be left impotent to act without legislative intervention. I am reminded of the words of Lord Donovan in Myers v Director of Public Prosecutions [1965] AC 1001, at p 1047:

'The common law is moulded by the Judges and it is still their province to adapt it from time to time so as to make it serve the interests of those it binds. Particularly is this so in the field of procedural law.'

Cooke P, in R v Accused (CA 32/91) [1992] 1 NZLR 257 at p262 a decision concerning the videotaping of children's evidence considered that the inherent jurisdiction of the Court could be invoked to authorise closed circuit evidence and probably to videotape evidence also. Citing Viscount Haldane's judgment in Scott v Scott [1913] AC 417, 437-438, Cooke P referred to the need to:

'.... keep in the forefront Viscount Haldane LC's emphasis .... on the paramount duty of the Court to adapt its procedure to ensure that justice is done. This adaptability should enable the adjustment of Court proceedings to take advantage of technological advances.'"

I conclude that this Court has jurisdiction to order that the evidence of an overseas witness be given or taken by video link if in the interest of justice it is necessary to do so for the purpose of Court proceedings. The video link procedure must be used fairly. The sources of this jurisdiction are the Court's own inherent procedural jurisdiction, the Judicature Ordinance 1961, and r.206 of the Supreme Court (Civil Procedure Rules) 1980.

Approach to video link applications

To decide whether an application to allow the evidence of an overseas witness to be given by video link should be granted, requires a balancing exercise between the inconvenience to the witness in attending Court proceedings to give evidence and considerations of fairness to the other party. If the inconvenience to the witness is outweighed by any unfairness to the other party, the application should be denied. This approach has been adopted in the High Court of New Zealand and in at least one decision of the Supreme Court of New South Wales.

In Ithaca (Custodians) Ltd v Perry Corporation (2002) 16 PRNZ 773, Patterson J when dealing with an application to have the evidence of overseas witnesses given by video link at trial said at p. 780:

"I accept that the basic approach of this Court is as noted in the headnote to the Australian Medical Imaging case, namely whether good reasons exist for the allowing of evidence by video link will depend on a balancing exercise as to whether the convenience of the witness in not coming to Court, is outweighed by considerations of fairness to the opposite party in the manner in which the trial will be conducted. The first issue is whether there will be inconvenience to the witness in attending, and second, assuming there is such inconvenience, whether that outweighs any unfairness to the other party. In carrying out the balancing act earlier decisions are helpful, but the weight to be given to the various factors depends on the circumstances of each case."

In Kuo Chu v Lili Han (2003) (unreported judgment delivered on 8 October 2003), Rodney Hansen J in dealing with an application for the evidence of two overseas witnesses resident in Beijing, China, to be given by video link said at para [22]:

"These authorities have established that the overriding consideration is, as is to be expected, the interests of justice. If appropriate procedural safeguards can be put in place, evidence may be given by video link provided that unfairness is not caused to any party. This requires a balancing exercise as to whether the inconvenience, to use that term in its broad sense, of requiring a witness to be present is outweighed by considerations of fairness to the opposite party."

In Aeromotive Ltd v Page (2002) 16 PRNZ 329 at p335, Harrison J, when dealing with an application for the evidence of overseas witnesses to be given by video link at trial, stated that the application must ultimately be determined by balancing the inconvenience to the witnesses against fairness. In the case of Australian Medical Imaging Ltd v Marconi Medical Systems Australia Pty Ltd (2001) NSWSC 651, Palmer J in the Supreme Court of New South Wales when dealing with an application for the evidence of overseas witnesses to be given by video link at trial said:

"It is always a balancing exercise as to whether the convenience of the witness in not coming to this country to give evidence is outweighed by considerations of fairness to the opposite party in the manner in which the trial will be conducted."

As it also appears from the authorities, an application for the evidence of a witness to be given by video link at Court proceedings must be supported by affidavit showing good reason for the witness's non-attendance and any other relevant matters. It will also be good practice for the other party if he opposes the application, to support his opposition by affidavit showing any unfairness or prejudice to him if the video link application is granted and any other relevant matters. This is the procedure followed by counsel in this proceeding.

Consideration of first defendant's video link motion

As mentioned at the beginning of this judgment, the present proceeding is concerned with a motion by the first defendant for an order to allow the evidence of the third defendant and her daughter Josephine Tsien to be given by video link from Taipei, Taiwan. Because of the crucial nature of the evidence of the third defendant to the determination at trial of the issues as to whether the plaintiff is the sole shareholder of the first defendant company, whether the two bearer shares issued by the first defendant on 6 August 1994 were unauthorised and invalid, and whether the plaintiff is the duly appointed sole director of the first defendant company, the submission of counsel for the first defendant in support of the motion and of counsel for the plaintiff in opposition were focused on the third defendant. Only brief reference was made to the witness Josephine Tsien. The reason for this is obvious. It was said on behalf of the first defendant that the witness Josephine Tsien is required to be with her mother, the third defendant, to attend to her daily needs. So if the motion is granted and the third defendant is allowed to give her evidence at trial by video link from Taiwan, then Josephine Tsien would have to remain in Taiwan with the third defendant and her evidence would also have to be given at trial by video link from Taiwan. If, on the other hand, the motion is declined so that the third defendant would have to travel to Samoa to testify in person, then the reason given for Josephine Tsien's evidence to be given by video link from Taiwan disappears. She would therefore have to come to Samoa to testify in person if she still wants to give evidence.

In her fifth supplementary affidavit sworn in Taipei, Taiwan, on 27 July 2005, which has been filed in this proceeding in support of the first defendant's motion, the third defendant, who is 91 years of age, deposes that she has every intention to attend in person the trial of this matter and she is willing to travel to Samoa to vigorously pursue her interests in the Samoan Courts. She also states that she considers herself to be in relatively good health. However, she also states that her family doctor Dr Andrew T Huang, who has been attending to her medical needs for many years, has advised against her making the trip to Samoa.

In the medical report dated 26 July 2005 by Dr Huang which is attached to the third defendant's said affidavit, Dr Huang states that the third defendant has been under the care of Dr Gerald Tsai, a geriatrician, who works at the same medical foundation centre as Dr Huang. A geriatrician is a doctor who specialises in the diseases and hygiene of old age. After brief reference to the third defendant's medical condition, Dr Huang states as his opinion that the third defendant 'is not suited for long distance travel except in situations of clear medical necessity.' Thus it appears the third defendant may go on long distance travel where there is clear medical necessity to do so but not where there is no such necessity. With respect, I wish the doctor had elaborated a little more on what he really means here. Does he mean that when the third defendant is in relatively good health as the third defendant says she considers herself to be, she is not suited for long distance travel, but when she is not in good health she may go on long distance travel on the ground of medical necessity. Counsel for the first and third defendant's relied on Dr Huang's medical report and the old age of the third defendant to support the first defendant's motion for the evidence of the third defendant to be given by video link from Taiwan.

Mr Ring, senior counsel for the plaintiff, in apposing the first defendant's motion dealt in his submissions with the health condition of the third defendant by referring first to the first affidavit sworn by the third defendant in Taipei, Taiwan, on 10 December 2004, which affidavit was used in proceedings held before this Court in relation to this matter on 24 and 25 January 2005. In that affidavit, the third defendant deposed that even though she is in her nineties, she is still very capable of understanding any document that she signs and of making her own decisions. She also states in her said affidavit that her mental capacity has not faded over the years and people say her mind is still sharp. She further states in the same affidavit that she is a very active person both physically and mentally; she swims and do callisthenic exercises five times a week and still plays golf; only a few years ago she retired from her position as the Honorary Consul General of Costa Rica; and for the last twenty years she has been presenting trophies and been a speaker at the opening ceremonies representing all of the Republic of China golfers at the Ladies Amateur World Golf Championship which is hosted once very two years. Mr Ring also referred to the third defendant's fifth supplementary affidavit sworn on 27 July 2005 where she says that she considers herself to be in relatively good health; she has every intention to attend the trial in Samoa; she is willing to make the trip to Samoa; and she wishes to pursue her interests vigorously in the Samoa Courts. In both of her said affidavits, there is no indication from the third defendant that her health condition would inhibit her ability to travel.

Mr Ring then refers in his submissions to the fifth affidavit of the plaintiff, who is the son of the plaintiff, sworn in California, USA, on 2 August 2005. In that affidavit, the plaintiff who now resides in California, USA, deposes that he frequently speaks to his mother, the third defendant, by telephone and he last saw her in July 2005 in Taiwan which he left on 10 July 2005. Since then he has had a number of telephone discussions with his mother. The plaintiff also states in his affidavit that there has been no noticeable physical, medical or mental change in his mother since the beginning of this year; his mother has been as active as she ever was; his mother has not complained to him about degenerative disability or about her heart; on 17 July 2005 his mother attended a dinner party alone and unaided and she even made a speech during that party; and in 2003 his mother went to New York, USA. Mr Ring further refers in his submissions to the note dated 25 January 2005 by Dr Gerald Tsai where that doctor says the third defendant is of above average physical fitness for her age. Dr Tsai, according to the third defendant's aforementioned affidavit sworn on 27 July 2005, has also been consulted by the third defendant over the years.

Having given careful consideration to the respective submissions by counsel and the documentation upon which each of them relies, I am not satisfied with the necessary degree of confidence that it is not suitable for the third defendant to travel to Samoa to give evidence at trial because of her health condition. The two aforementioned affidavits by the third defendant, the affidavit of the plaintiff sworn on 2 August 2005, and the note of 25 January 2005 by Dr Gerald Tsai all show that the third defendant is still in relatively good health for her age. In the third defendant's affidavit sworn on 10 December 2004 she says that she is still very active both physically and mentally and she still swims and do callisthenic exercises five times a week and plays golf. According to the plaintiff's affidavit of 2 August 2005, his mother also went to New York, USA, in 2003 and on 17 July 2005 she attended a dinner party alone and unaided and also made a speech at that party. The third defendant in her affidavit of 27 July 2005 states that she considers herself to be in relatively good health and she has every intention to attend in person the trial of this matter and she is willing to make the trip to Samoa for that purpose to vigorously pursue her interests in the Samoa Courts. Even though Dr Huang states in his medical report that the third defendant 'is not suited for long distance travel except in situations of clear medical necessity', I have difficulties in understanding what he means. Upon reading what he says, it suggests that if the third defendant is in relatively good health as she says she considers herself to be in, then she is not suited for long distance travel. But if she is not in good health, then she may go on long distance travel on the ground of medical necessity. The doctor, of course, is in the best position to know what he means by what he says. But, with respect, to him, the way he says it gives me difficulties as to what he means. In any event, Dr Huang does not explicitly say that the third defendant, who wishes to come to Samoa to testify at the trial and is willing to do so, is physically incapable to come to Samoa or that her health would be at risk if she did.

Travel costs are also not a major consideration. The third defendant is a very wealthy lady. So she can travel first and business class to make her trip to Samoa a comfortable one. Senior counsel for the plaintiff also pointed out that the third defendant may choose an airline route that would involve short trips from Taiwan to Auckland, New Zealand, and then fly business class to Samoa. This may be done if the direct flight from Taipei, Taiwan to Auckland is inconvenient for the third defendant. The witness Josephine Tsien, and a medical doctor if necessary, may accompany the third defendant.

Applying the approach of balancing the inconvenience to the overseas witness if he or she attends in person to give evidence at trial against any unfairness to the other party, it may be said that in this case the trip from Taiwan to Samoa would be an inconvenience to the third defendant because of her old age. This would be more a physical inconvenience than a mental inconvenience; the third defendant is willing to come to Samoa and she has every intention of attending the trial in person. To be weighed against that inconvenience is any unfairness to the plaintiff.

In considering the question of unfairness, it must be pointed out that the Samoan Courts do not have the technology for hearing evidence at trial by video link. The present motion by the first defendant is the first of its kind. It is likely to be the impetus for a new technological development as far as the Samoan Courts are concerned. Given the novelty of its motion, it is incumbent on the first defendant to adequately establish the reliability of the facilities at the National University of Samoa which it proposes to be used for taking the evidence of its overseas witnesses. It should also have been adequately established that the necessary expertise is available to operate this new technology for the purpose of giving evidence at trial by an overseas witness. The underlying concern is whether the facilities proposed to be used are adequate to afford procedural fairness, particularly to the party who is opposing the use of video link for the giving of evidence by an overseas witness. Issues such as whether the use of video link would affect the quality of the evidence, unduly affect the free-flow of cross-examination, or affect the assessment of credibility are often raised in this context in other jurisdictions and such issues relate to procedural fairness and therefore to the question of fair trial. Video links may have been accepted as the effective means of giving evidence in some cases in developed jurisdictions like England, Australia and New Zealand. But the real question in this case is whether the local link proposed to be used in this case is effective. This must be the kind of consideration the Supreme Court of Vanuatu had in mind in Tari v Minister of Health (2002) VUSC 42 when Coventry J said that one of the factors to be taken into account when the Court is exercising its discretion whether to admit evidence by video or telephone link is the quality of the link to be used. I also note that in ASIS v Rich (2004) NSWSC 467 (internet copy), Austin J in the Supreme Court of New South Wales, after referring to the conflicting approaches in this context in the Australian Courts, said in para 43 that the cost effectiveness and reliability of 'current-generation electronic aids' for use in the work of the Courts has to be adequately established. There is, however, no evidence as to the quality or reliability of the link proposed to be used in this case. Mr Ring for the plaintiff also pointed out that if the third defendant and her daughter Josephine Tsien are allowed to give evidence by video link, their viva voce evidence which will consist mainly of evidence given under cross-examination, is likely to take one to two days, but there is no evidence that the proposed link will be available when required.

Apart from the question of the quality and reliability of the video link facility proposed to be used, Mr Ring also refers in his submissions to other factors in opposing the first defendant's motion. These factors are the importance of this case, which involves millions of US dollars, to the parties particularly to the plaintiff if he loses out; the importance of this case as it involves the accuracy of the register of members and the register of directors kept by the second defendant and so Samoa's credibility as an internationally recognised jurisdiction for offshore companies; the importance of the third defendant as a witness to this case as the central contest about, who is the beneficial owner of the first defendant company, is essentially between the plaintiff and the third defendant; and the crucial importance of credibility as an issue given the very conflicting nature of the affidavit evidence given by the third defendant and her son in law Mr Tsien on one hand and the affidavit evidence given by the plaintiff on the other hand. In fact, the need for viva voce evidence in this matter has arisen because in the proceeding held on 24 and 25 January 2005, I found it unsafe to make any findings of fact due to the very conflicting nature of the affidavit evidence on every major issue. Mr Ring also pointed out that even though it is strictly outside the balance of inconvenience versus unfairness to the plaintiff approach, the lateness in the first defendant's motion which was made barely two weeks before the start of the trial should weigh against granting the motion. He also pointed out that if the third defendant is allowed to give evidence from Taiwan the video link that will be used in Taiwan is the video link in the office of the third defendant's solicitors in Taiwan which is not neutral ground.

One of the main difficulties in this case arises from the authorities cited by counsel on the use for Court proceedings of this new video link technology. The New Zealand authorities show differing judicial opinions on the advantages and disadvantages in the use of video link for taking the evidence of witnesses by video link. Compare the judgments given in B v Dentists Disciplinary Tribunal (1994) 1 NZLR 95 and Aeromotive Ltd v Page (2002) 16 PRNZ 239 with the judgments in Ithaca (Custodians) Ltd v Perry Corporation (2002) 16 PRNZ 773; Ithaca (Custodians) Ltd v Perry Corporation (2003) 2 NZLR 216; and Kuo Chu v Lili Han (2003) (unreported judgment of Rodney Hansen J delivered on 8 October 2003). Similarly, there are differing judicial opinions in Australia on the advantages and disadvantages in the use of electronic technology as a means of taking the evidence of witnesses. A useful discussion of the conflicting approaches and differing judicial opinions in Australia is contained in the judgment of Austin J in ASIS v Rich (2004) NSWSC 467 (internet copy). One senses from reading these authorities that the judicial experiences of the different Judges in the use of video link technology in these two jurisdictions play an important part in their differing judicial opinions. That is the kind of judicial experience the Samoan Courts do not have at this point in time. No doubt the position will change as the Samoan Courts gain experience in the use of this new video link technology for taking the evidence of witnesses at trial.

For this case, I am persuaded by the submissions made by Mr Ring that if the inconvenience factor in this case is weighed against the unfairness factors and other matters set out and explained in his submissions, the scale comes down in favour of declining the first defendant's motion. The motion is accordingly declined.

Given the novelty of the motion, I have been weighing up whether costs should be awarded. I have decided to reserve the question of costs.

CHIEF JUSTICE