CATCHWORDS
PRACTICE AND PROCEDURE - injunction to restrain party from acting further on order obtained by it under 28 USC s 1782 from the United States District Court for the District of Colorado for the taking of statement or testimony of potential witness in Colorado - whether it would be oppressive or vexatious conduct for the party to act on the order obtained by it - proximity or contemporaneity of trial - other parties wishing to participate in deposition of the potential witness - interferences with preparation for or conduct of trial - discriminatory disadvantage suffered by parties whose witnesses reside in the United States.
ALLSTATE LIFE INSURANCE CO & ORS v AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED & ORS (No 29)
Nos NG 381 of 1994, NG 523 of 1991, NG 622 of 1991 and NG 635 of 1991.
Lindgren J
Sydney
28 February 1996
[2]
IN THE FEDERAL COURT OF AUSTRALIA)
NEW SOUTH WALES DISTRICT REGISTRY)
GENERAL DIVISION )
No NG 381 of 1994
BETWEEN:
ALLSTATE LIFE INSURANCE CO and the parties listed in Annexure A to the third further amended statement of claim.
Applicants
AND:
AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED ACN 005 357 522 and the parties listed in Annexure B to the third further amended statement of claim.
Respondents
No NG 523 of 1991
BETWEEN:
ALLSTATE LIFE INSURANCE CO and the parties listed in Annexure A to the third further amended statement of claim.
Applicants
AND:
AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED ACN 005 357 522 and the parties listed in Annexure B to the third further amended statement of claim.
Respondents
No NG 622 of 1991
BETWEEN:
ALLSTATE LIFE INSURANCE CO and the parties listed in Annexure A to the third further amended statement of claim.
Applicants
AND:
AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED ACN 005 357 522 and the parties listed in Annexure B to the third further amended statement of claim.
Respondents
No NG 635 of 1991
BETWEEN:
ALLSTATE LIFE INSURANCE CO and the parties listed in Annexure A to the
third further amended statement of claim.
Applicants
AND:
AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED ACN 005 357 522 and the parties listed in Annexure B to the third further amended statement of claim.
Respondents
CORAM: Lindgren J
PLACE: Sydney
DATE: 28 February 1996
MINUTE OF ORDERS
THE COURT ORDERS THAT:
The Applicants be restrained from taking or causing to be taken or participating in the taking of any oral deposition from Millard Zimet pursuant to the order dated 24 January 1996 made by the United States District Court for the District of Colorado permitting discovery pursuant to 28 USC s 1782 in Miscellaneous Case No. 96 x 29.
The applicants pay the costs of the 1st to 187th cross respondents (Skadden, Arps, Slate, Meagher & Flom) of the motion.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
[3]
IN THE FEDERAL COURT OF AUSTRALIA)
NEW SOUTH WALES DISTRICT REGISTRY)
GENERAL DIVISION )
No NG 381 of 1994
BETWEEN:
ALLSTATE LIFE INSURANCE CO and the parties listed in Annexure A to the third further amended statement of claim.
Applicants
AND:
AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED ACN 005 357 522 and the parties listed in Annexure B to the third further amended statement of claim.
Respondents
No NG 523 of 1991
BETWEEN:
ALLSTATE LIFE INSURANCE CO and the parties listed in Annexure A to the third further amended statement of claim.
Applicants
AND:
AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED ACN 005 357 522 and the parties listed in Annexure B to the third further amended statement of claim.
Respondents
No NG 622 of 1991
BETWEEN:
ALLSTATE LIFE INSURANCE CO and the parties listed in Annexure A to the third further amended statement of claim.
Applicants
AND:
AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED ACN 005 357 522 and the parties listed in Annexure B to the third further amended statement of claim.
Respondents
[4]
No NG 635 of 1991
BETWEEN:
ALLSTATE LIFE INSURANCE CO and the parties listed in Annexure A to the third further amended statement of claim.
Applicants
AND:
AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED ACN 005 357 522 and the parties listed in Annexure B to the third further amended statement of claim.
Respondents
CORAM: Lindgren J
PLACE: Sydney
DATE: 28 February 1996
REASONS FOR JUDGMENT (No 29)
(Injunction to restrain taking of oral deposition
of Mr Zimet)
NATURE OF PROCEEDINGS
By notice of motion filed in Court on 1 February 1996 the 1st to 187th cross respondents Skadden, Arps, Slate, Meagher & Flom ("Skadden") seek the following injunctive relief:
"3. The Applicants be restrained from taking or causing to be taken or participating in the taking of any oral deposition from Millard Zimet pursuant to the order dated 24 January 1996 made by the United States District Court for the District of Colorado permitting discovery pursuant to 28 USC s 1782 in Miscellaneous Case No. 96 x 29.
4. Further or in the alternative, the Applicants be restrained until further order in terms of Order 3."
I heard the application for interlocutory relief referred to in para 4 on 1, 2 and 5 February 1996 and gave interlocutory relief as sought on 5 February: see Reasons for Judgment (No 24).
The hearing of the motion in so far as it sought the relief described in para 3 took place on 15 and 16 February. In the course of that hearing I delivered Reasons for Judgment (No 28) on the admissibility of certain evidence and in the course of which I held that the relief described in para 3 was "final" rather than "interlocutory".
BACKGROUND
The present motion is one of many which have been strongly contested in these proceedings, the final hearing of which is fixed to commence on 18 March 1996 and is estimated to be of not less than six months' duration (periods of twelve and eighteen months have also been mentioned).
The immediate background is set out in an affidavit of Geoffrey Hugh Sutherland sworn on 1 February 1996 filed with and in support of the notice of motion. By fax on 29 January 1996 and by hard copy on the following day the applicants' solicitors, Deacons Graham & James ("Deacons"), served certain documents on Skadden's solicitors, Dibbs Crowther & Osborne ("Dibbs"). I infer from an endorsed "certificate of service" that the documents were also served on the solicitors on the record for all parties (14 firms of solicitors including Dibbs). The
documents showed that an application had been successfully made to the United States District Court for the District of Colorado ("the Colorado court") for an order permitting oral discovery and documentary discovery from one, Millard Zimet, currently a resident of Aspen, Colorado and at the time of the events giving rise to these proceedings (late 1988), an employee of Skadden. According to the documents, the discovery by Mr Zimet was to take place in Denver, Colorado on 8 February 1996.
The documents served by the applicants on the other parties were:
the application to the Colorado court for discovery pursuant to 28 USC s 1782;
an affidavit of Michael C. Harwood, the New York attorney representing those of the applicants who made the application for discovery (see below), sworn 22 January 1996;
a "Memorandum of Law";
the order of the Colorado court dated 24 January 1996 permitting discovery;
a "Notice of Deposition" dated 24 January 1996 given by Michael E Lindsay and Jeffrey L Smith, of Cohen Brame & Smith, Professional Corporation, attorneys of Denver, Colorado, representing Kasowitz, Benson, Torres & Friedman attorneys of New York.
Service of the documents was the first occasion on which the solicitors for Skadden and, no doubt, the solicitors for all other parties except Deacons, became aware of what had transpired in the Colorado court.
It is useful to note at this stage that there are 17 applicants in the present proceedings; all but one, the tenth, are the holders of debentures issued by Linter Textiles Corporation Limited ("Linter Textiles") and the tenth is a trustee for debenture holders; of the 16 debenture holder applicants, 14 are represented in the United States by the New York attorneys, Kasowitz, Benson, Torres & Friedman, of which Mr Harwood is a member; the application to the Colorado court was made by those 14 applicants; and for that purpose, the Denver, Colorado attorneys, Cohen Brame & Smith, apparently acted as Mr Harwood's agents. In the proceedings, the debenture holder applicants and their trustee seek relief arising out of the events touching the issue of the debentures by Linter Textiles in October 1988.
28 USC s 1782
The legislative provision under which the application was made to the Colorado court is 28 USC s 1782 which is as follows:
"s 1782 Assistance to foreign and international tribunals and to litigants before such tribunals
(a) The district court of the district in which
a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal. The order may be made pursuant to a letter rogatory issued, or request made, by a foreign or international tribunal or upon the application of any interested person and may direct that the testimony or statement be given, or the document or other thing be produced, before a person appointed by the court. By virtue of his appointment, the person appointed has power to administer any necessary oath and take the testimony or statement. The order may prescribe the practice and procedure, which may be in whole or part the practice and procedure of the foreign country or the international tribunal, for taking the testimony or statement or producing the document or other thing. To the extent that the order does not prescribe otherwise, the testimony or statement shall be taken, and the document or other thing produced, in accordance with the Federal Rules of Civil Procedure.
A person may not be compelled to give his testimony or statement or to produce a document or other thing in violation of any legally applicable privilege.
(b) This chapter does not preclude a person within the United States from voluntarily giving his testimony or statement, or producing a document or other thing, for use in a proceeding in a foreign or international tribunal before any person and in any manner acceptable to him."
Mr Harwood's affidavit in support of his clients' application to the Colorado court showed that Mr Zimet resided in that court's district; that his clients were interested as applicants in these proceedings; that, to adopt the language of the Memorandum of Law, Mr Zimet "possesses knowledge of relevant and important facts to [the] cases in Australia"; and that Mr Harwood's clients wished to use Mr Zimet's evidence in these (Federal Court) proceedings, for such purposes as the cross examination of witnesses. Paragraphs 5 and 6 of Mr Harwood's affidavit were as follows:
"5. Millard Zimet was an associate employed by Skadden during all relevant times in 1988, and he was engaged in Skadden's representation of the Linter companies from May 1988 through and including the date that the debt was issued, October 13, 1988. The timesheets produced by Skadden in these cases reflect that Mr. Zimet billed more than 900 hours to the Linter companies over this period of time, that he worked on the case on most business days -- including on the issue date, the date on which the Prospectus went effective and other dates when Skadden communicated draft materials to the Securities and Exchange Commission and responded to their inquiries -- and that in June 1988, he travelled to and spent more than two weeks in Australia, where the Linter companies are located and do business. [Copies of the timesheets were apparently annexed to Mr Harwood's affidavit.]
[5]
to pay Skadden's costs of the motion.
I certify that this and the preceding 23 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lindgren.
Associate:
Dated: 7 March 1996
Heard: 15, 16 February 1996
Place: Sydney
Decision: 28 February 1996
Appearances: Mr A J Sullivan QC with Mr S J Gageler and Dr A Bell of counsel instructed by Dibbs Crowther & Osborne appeared for the applicants on the motion ("Skadden").
Mr A R Emmett QC with Mr W G Muddle and Mr D Stack of counsel instructed by Deacons Graham & James appeared for the respondents to the motion (applicants in the proceedings).
Parties
Applicant/Plaintiff:
ALLSTATE LIFE INSURANCE CO & ORS
Respondent/Defendant:
AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED & ORS
Recently, Skadden produced statements of other prospective witnesses in these cases [these Federal Court proceedings], including those of Robert Chilstrom, Mitchell M. Gitin and Richard L. Muglia. [Copies of the three witness statements were apparently annexed to Mr Harwood's affidavit.] All three witness statements refer to Mr. Zimet."
It was common ground on both the interlocutory and final hearings that the record of Mr Zimet's testimony or statement would not be admissible in these proceedings. On the former hearing, I raised the question whether the expression in s 1782 "for use in a foreign or international tribunal" required that it be admissible. The parties have since researched that question and it is common ground that admissibility is not a requirement of the section.
BASIS OF JURISDICTION TO GRANT THE RELIEF INJUNCTIVE SOUGHT BY SKADDEN
The basis of the Court's jurisdiction to grant the injunctive relief sought by Skadden is that referred to in Reasons for Judgment dated 19 January 1996 (No 22) and dated 21 February 1996 (No 27) in these proceedings in relation to anti-suit relief, namely that it would be oppressive or vexatious conduct by the applicants if they were to proceed with the taking of the deposition.
UNITED STATES CASES ON 28 USC s 1782
Senior counsel for Skadden has referred to numerous decisions of federal courts of the United States with a view to showing that it is treated as a threshold requirement of most of those courts that for an order to be granted under 28 USC s 1782 it must be shown to the District Court that the foreign tribunal (for convenience I shall omit further reference to international tribunals) provides a procedure for compulsory discovery similar to that given by s 1782. Skadden accepts that there is no decision of the Colorado court or of the United States Court of Appeals for the Tenth Circuit (within which Colorado falls) on the point. It submits, however, that I should proceed on the basis that the Colorado court and that Court of Appeals would decide in conformity with what it submits is the preponderant view of the other federal courts to which it refers.
Skadden referred to the following cases (arranged by me in chronological order with the identification of the courts extracted from the citations and shown separately):
Date Name of Case Court
16.9.80 In re The Court of Commissioner of Patents
for The Republic of South Africa; Selas
Corporation of America v The Electric US Dist Ct/ED
Furnace Co, 88 FRD 75 (1980) Pennsylvania
5.2.85 John Deere Ltd v Sperry Corporation US Ct of Apps, 3rd
754 F 2d 132 (1985) Circuit.
7.7.88 In re Request for Assistance from Ministry
of Legal Affairs of Trinidad and Tobago, US Ct of Apps, 11th
848 F 2d 1151 (1988); 488 US 1005 (1989) Circuit.
8.11.88 In re Lo Ka Chun v Lo To 858 F 2d US Ct of Apps, 11th
1564 (1988)US Circuit.
4.12.92 In re Application of Asta Medica, SA 981 US Ct of Apps, lst
F 2d 1 (1992) Circuit.
29.3.93 In re Application for an Order for Judicial
Assistance in a Foreign Proceeding in The
High Court of Justice, Chancery Division, US Dist Ct/CD
England 147 FRD 223 (1993) California.
20.8.93 In re Application of Silvia Gianoli US Ct of Apps, 2nd
Aldunate 3 F 3d 54 (1993); 114 S Ct 443 Circuit.
15.2.94 In re Letters Rogatory from The Tokyo
District Prosecutor's Office, Tokyo, Japan US Ct of Apps, 9th
16 F 3d 1016 (1994) Circuit.
13.1.95 In re Letter Rogatory from the First
Court of First Instance in Civil Matters, US Ct of Apps, 5th
Caracas, Venezuela, 42 F 3d 308 (1995) Circuit.
10.20.3.95 In re Euromepa, SA v R. Esmerian, Inc. 51 US Ct of Apps, 2nd
F 3d 1095 (1995) Circuit.
11.21.8.95 In re Trygg-Hansa Insurance Co Limited US Dist Ct/ED
896 F Supp 624 (1995) Louisiana.
It is unnecessary and inappropriate for me to make a detailed analysis of all these cases with a view to making the prediction which Skadden invites me to make (see below).
A requirement that discovery of the kind applied for under s 1782 be shown to be available in the foreign jurisdiction, where the order under s 1782 is to be made pursuant to an application by a "person interested" as distinct from a letter rogatory or
letter of request from the foreign tribunal, has been referred to in some of these cases as a "per se" or "threshold" requirement. Varying forms and degrees of support for the existence of such a threshold requirement can be found in the cases numbered 1, 3, 4, 5, 6, 9 and 11 above. Varying forms and degrees of support for its non existence can be found in the cases numbered 2, 7 and 10. The remaining case (8) does not address the particular question whether there is a threshold requirement of discoverability.
Accordingly, of the appellate decisions to which I was referred, the Court of Appeals for the First, Fifth, Ninth and Eleventh Circuits have lent varying forms and degrees of support for the suggested threshold requirement while the Court of Appeals for the Second and, less clearly, the Third, have rejected it. It is, however, accepted even by the Court of Appeals for the Second Circuit, that it is proper to take into account whether discovery is available in the foreign tribunal, as part of the exercise of the discretion given to the District Court by the section.
I will refer only to the two Second Circuit cases. In Gianoli, a Chilean court had ordered the provisional guardians of a Chilean incompetent person to make a certified inventory of his assets. The Court of Appeals affirmed the District Court's grant of discovery to the guardians. It held that 28 USC s 1782 did not contain the suggested threshold requirement, suggesting that if Congress had intended to impose such a requirement, it would have done so expressly. The Court held that no abuse of discretion by the District Court was established, noting that the guardians had a duty under Chilean law to compile the inventory of the incompetent's assets so that the District Court's order was in aid of that of the Chilean court. In this respect, the facts are of a different kind from those of the present case.
In Euromepa, the Court held by majority that it was not appropriate for a court dealing with an application under s 1782 to delve extensively into "the mysteries of foreign law" to ascertain if similar discovery was available in the foreign legal system (in that case, the French system). Significantly, the majority supported this view by reference to the fact that the foreign court retained control and could enjoin the taking of a deposition if it thought appropriate. This makes it clear that considerations of comity do not arise in relation to an injunction against discovery pursuant to s 1782 as they do in relation to an "anti-suit injunction" strictly so called.
DISCOVERY IN THIS COURT AND UNDER 28 USC s 1782
In this Court the procedure of compulsory documentary discovery is available against parties but not against non-parties. Parties can be required to give discovery of all documents which are or have been in their possession, custody or power relating to any matter in question between them and the party requiring discovery; cf Federal Court Rules O 15 rr 2,5,6. A party is entitled, on request, to have the Registrar issue a "subpoena for production" requiring a non-party to produce particular documents or documents of a particular class (O 27 sub-r 6 (1)). But it
is trite that a person cannot be required to discover all documents in his or her possession, custody or power relating to issues in proceedings between others, and that it is a ground for setting aside a subpoena that its description of the documents called for is such as to make the subpoena an instrument for procuring discovery from a non-party: Commissioner for Railways v Small (1938) 38 SR (NSW) 564 (FC) at 573 (Jordan CJ).
In this Court, compulsory oral discovery is not available against either parties or non-parties, although, under O 16 a party may be required to provide verified written answers to specific written "interrogatories". It is possible, of course, for a party to serve a "subpoena to give evidence" requiring a person to attend before the Court or before any judge, officer, examiner or other person having authority to take evidence, to give evidence: O 27 r 2. But there is no provision resembling 28 USC s 1782 authorising any judge, officer, examiner or other person to take evidence otherwise than as part of a hearing, including "any hearing before the Court, whether final or interlocutory, and whether in open court or in chambers" (see the definition of "hearing" in O 1 r 4).
The contrast between oral and documentary discovery as available in the United States and the position in England was described by Lord Brandon of Oakbrook in South Carolina Insurance Co v Assurantie Maatschappij "De Zevan Provincien" NV [1987] AC 24 (HL) ("South Carolina") at 35-36. His Lordship's account is generally applicable in the context of a United States - Australia comparison.
I digress to note that Skadden does not seek to restrain enforcement of the Colorado court's order in so far as it requires Mr Zimet to produce documents (Skadden itself procured the issue of an order under 28 USC s 1782 for production of documents - see below and Reasons for Judgment (No 26) dated 12 February 1996). Therefore, I do not address that aspect of the Colorado's court's order further.
It will be recalled that s 1782 provides that to the extent that an order made under it does not prescribe otherwise, the person's testimony and statement is to be taken in accordance with the Federal Rules of Civil Procedure. The order permitting discovery in respect of Mr Zimet does not "prescribe otherwise". Rule 30 of the Federal Rules of Civil Procedure sets out at length detailed procedural aspects of "Depositions Upon Oral Examination". Sub-rule 30 (b) for example, provides that unless otherwise agreed by the parties, the deposition is to be conducted before an officer appointed or designated under Rule 28 (a person authorised to administer oaths who has no disqualifying interest in the case). Sub-rule 30 (c) provides that examination and cross examination of witnesses "may proceed as permitted at the trial under the provisions of the Federal Rules of Evidence except Rules 103 and 615 [not presently relevant]"; that the officer before whom the deposition is to be taken must put the witness on oath or affirmation; and that the officer must personally, or by someone acting under the officer's
direction and in the officer's presence, record the testimony of the witness. Sub-rule 30 (d) (3) includes the following interesting provisions:
"(3) At any time during a deposition, on motion of a party or of the deponent and upon showing that the examination is being conducted in bad faith or in such manner as unreasonably to annoy, embarrass, or oppress the deponent or party, the court in which the action is pending or the court in the district where the deposition is being taken may order the officer conducting the examination to cease forthwith from taking the deposition, or may limit the scope and manner of the taking of the deposition as provided in Rule 26(c). If the order made terminates the examination, it shall be resumed thereafter only upon the order of the court in which the action is pending. Upon demand of the objecting party or deponent, the taking of the deposition shall be suspended for the time necessary to make a motion for an order." (emphasis supplied)
No doubt the reference to "the court in which the action is pending" was included with domestic courts in the United States in mind. Yet as noted above, to the extent that an order under s 1782 does not provide otherwise, the provision also applies to a deposition pursuant to 28 USC s 1782. I need not stay to discuss the question of the appropriateness of the provision as so applied.
There is no procedure of this Court remotely similar to the procedure under s 1782 invoked to compel oral discovery by Mr Zimet. (It goes without saying that nothing in these Reasons for Judgment is intended to reflect upon the comparative advantages and disadvantages of the United States and Australian systems in
this respect). In this Court, unless a witness voluntarily informs a party of the evidence which the witness will give, the party must choose between calling the witness "cold" on the hearing or not calling him or her at all.
Mr Emmett QC for the applicants as respondents to Skadden's motion submitted, in his usual attractive and persuasive manner, that when the United States courts have been dealing with the question whether there is a threshold requirement of discoverability in the foreign legal system, they have done so with reference to the issue whether the party who has applied under 28 USC s 1782 is prohibited under that system from having access or becoming privy to the substance of the documents or oral testimony. This is distinct from the issue whether under the foreign system there is no similar procedure enabling the party to compel such documentary or oral discovery. However, I think that a reading of the cases generally shows that those United States courts which have addressed the question have been concerned with the procedural aspect. They have, in effect, been asking themselves whether the making of an order under 28 USC s 1782 would give the party obtaining it a procedural benefit which that party would not be able to invoke in the foreign tribunal.
I should record that Mr Emmett referred, in passing, to an unidentified case in the Supreme Court of New South Wales in which the judge contemplated ordering a potential witness to attend at Court and to state under oath before him and in the presence of the parties the nature of the evidence which the witness would give if called as a witness the trial (no doubt before a different judge). According to Mr Emmett, faced with that prospect the potential witness "voluntarily" informed the parties of his knowledge touching the matters in dispute. I am not persuaded by this anecdotal account of what was proposed to be done, but in the event was not done, in the Supreme Court, to proceed on any basis other than that there is not available in this Court any procedure similar to the mandatory pre-trial "proof-taking" possible under 28 USC s 1782.
It is possible for this Court, where it appears in the interests of justice to do so, on the application of a party to a proceeding, to make an order for the issue of a letter of request to the judicial authorities of a foreign country, to take or cause to be taken the evidence of a person outside Australia; see s 7 of the Foreign Evidence Act 1994 and its predecessor, s 7V within Part IIIC of the Evidence Act, 1905. Such orders have already been made on the applicants' motion of some of the applicants in these proceedings in relation to several witnesses in the United States of America. Their evidence will be given in the United States as part of the trial. The letter of request procedure refers to the taking of the evidence to form part of the evidence on the trial of an issue and is not available to enable a party to obtain pre-trial "information" which may assist preparation for the trial; see Reasons for Judgment (No 18) reported at (1996) 133 ALR 667. It would be possible for this Court to order that a letter of request issue for the taking of the evidence of Mr Zimet. I am not aware of any reason why such
a letter would not be issued if the applicants ask for it. But in the absence of cooperation by Mr Zimet, the applicants would not know prior to the trial what evidence he would give.
What I have said to date might be a reason why I should adjourn the present motion, while continuing the existing interlocutory relief, pending an application by Skadden to the Colorado court for the setting aside of its order. The Colorado court might set aside its order by treating the threshold requirement of "procedural discoverability" applicable. If it did so, I would be relieved of the need to consider Skadden's motion further. If the Colorado court followed the Court of Appeals for the Second Circuit in rejecting such a threshold requirement, it would be invited to consider matters relevant to its exercise of its discretion. These would include the unavailability of procedural discovery against non-parties in this Court. They would also include aspects of the conduct, past, present and future, of these proceedings.
It would, to say the least, strike a court in the United States such as the Colorado court as unsatisfactory that it, rather than I, should have to embark upon that task. The trial date of 18 March fast approaches. There might be an appeal from the Colorado court to the Court of Appeals for the Tenth Circuit. I might, in any event, after a decision of the Colorado court or the Court of Appeals, be asked to enjoin the applicants on the specific ground of oppressive or vexatious conduct by them in the context of these proceedings. It is better that I grapple with
the entire problem now.
OPPRESSIVE OR VEXATIOUS CONDUCT
Whatever the position may be in another case, two broad grounds combine to persuade me that it would be oppressive or vexatious conduct for the applicants to depose Mr Zimet.
The first aspect of oppression is that there would be interference with Skadden's legal representatives' preparation for and/or conduct of the trial. The time which the taking of the deposition would occupy would seem to be some days. Mr Harwood originally estimated two days. I have now been informed that at least two parties in addition to Skadden also wish to attend and to participate. Accordingly, Mr Zimet would be examined and cross examined by legal representatives of the applicants, Skadden and at least two other parties.
In his affidavit Mr Sutherland has deposed to difficulties which he says Skadden, in particular, would experience. He says that because of the background information which Mr Sullivan QC and he have obtained from interviews with Mr Zimet in Aspen and in Denver in October and November 1995 and their intimate familiarity with the case in general, he considers it to be in Skadden's best interests that they should both attend in Colorado and participate in the taking of Mr Zimet's deposition.
Mr Emmett does not dispute this but submits that it is excessive for Skadden to insist that Mr Sullivan and Mr Sutherland
participate. It may well be, as Mr Emmett says, that someone else, such as Mr Kovner, Skadden's New York attorney who gave evidence on the hearing, could undertake the task of cross examining Mr Zimet. Moreover, it may be that Mr Sullivan would not be entitled to appear to represent Skadden in which case some person such as Mr Kovner would have to undertake the task. But even the process by which a person such as Mr Kovner would become familiar with the case, or more familiar with it, would itself involve Skadden's lawyers in Australia. On any reckoning there would be a substantial distraction of the Australian legal representatives of Skadden (and of at least two other parties) at a critical time in the preparation for the taking of Mr Zimet's deposition. The deposition was to be taken on 8 and 9 February 1996, only a little more than a month before the commencement of the trial, and now it would take place after the commencement of the trial.
In response to a question raised by me, the applicants have made clear that they would wish to obtain an order under 28 USC s 1782 in relation to at least one further witness. Other parties may wish to depose United States residents. The taking of such depositions would, in all cases, be contemporaneous with the trial
The second aspect of oppressive conduct by the applicants is the disparity in the curial procedures available to the parties which would intrude in the proceedings before me if the deposition of Mr Zimet were to proceed. A party such as Skadden, which might
be expected to have staff and former staff resident in the United States, would, in effect, be subject to an adverse procedural discrimination within these proceedings. The reason is that those associated or formerly associated with Skadden would be subject to deposition by other parties, while at least those parties resident in Australia, would, in general, not be.
In this connection, it is significant that two groups of Australian banks have said that they wish to participate in the taking of Mr Zimet's oral deposition. They seek remedies against Skadden in these proceedings. So far as I know, their relevant staff and former staff reside in Australia. Skadden could not obtain oral discovery from them.
On the two general grounds mentioned, it would be oppressive or vexatious for the applicants to enforce the order for oral discovery from Mr Zimet and Skadden should be granted final injunctive relief.
OTHER MATTERS
On the hearing, many submissions were made not discussed above. I will mention some which received particular emphasis.
Skadden pointed to the fact that the application for the order under 28 USC s 1782 had been made by Mr Harwood's clients only, being 14 of the 16 debenture holder applicants, and said that I should infer that the information obtained from Mr Zimet would be used in certain proceedings brought by Mr Harwood's clients in the Supreme Court of the State of New York against Skadden ("the New York actions"), notwithstanding an undertaking given by the applicants to this Court on 5 October 1995 not to commence the taking of depositions in the New York actions. (I will not embark on the tedious task of describing the New York actions or their relationship to these proceedings - see Reasons for Judgment (No 22) dated 19 January 1996 and (No 27) dated 21 February 1996.) A taking of Mr Zimet's deposition on 8 February was, if done within the New York actions, something which would have been such a contempt. I do not, however, infer that in applying for and obtaining the order of the Colorado court, Mr Harwood intended to assist his clients to breach their undertaking to this Court. (Since the hearing of the present motion, I have enjoined the applicants from pursuing the New York actions and an appeal to a Full Court is pending.)
The applicants submitted that I should treat Skadden's motion itself as an abuse of process. Their case in this respect was that Skadden has sought to prevent them from preparing adequately for the final hearing. Particular matters to which they referred were an alleged attempt by Mr Schwarz of Skadden to cause two expert witnesses of the applicants not to give evidence in their case, and an attempt to circumvent, by the obtaining of an order under 28 USC s 1782 relating to documents, relief which I gave to one of the applicants from its obligation to give full formal discovery of documents; see Reasons for Judgment (No 26) dated 12 February 1996. It suffices to say that in my view the evidence does not establish abuse of process by Skadden. As I said earlier, the interlocutory steps in these proceedings have
been strongly contested. If I considered that the evidence established that a party had overstepped the mark by attempting to prevent another party from adequately preparing for the hearing and presenting its case, I would make appropriate orders upon application being made.
Other submissions which were made were to the effect that to allow the deposition to proceed would be inconsistent with the retention by this Court of power over its own process. I do not find it necessary to deal with this submission, interesting as it is. I note, in passing, however, that notwithstanding this submission by Skadden, it does not ask that I restrain resort to 28 USC s 1782 in relation to the discovery of documents, a process to which it has itself resorted.
Another submission by Skadden was based on several cases in which statutory powers have been utilised by liquidators and public bodies and officials to compel production of documents and the provision of information. In those cases typically it is alleged that a power given by statute for one purpose is being used by the repository of the power to obtain information for use in connection with litigation to which it is a party. Questions of improper use of a statutory power, self-incrimination and contempt of court have arisen in such cases. They are not relevant to the present motion because it is clear that the procedure under 28 USC s 1782 is afforded for the very purpose of assisting in connection with proceedings before a foreign tribunal such as this Court.
Skadden also relied on South Carolina. In my view, that case is distinguishable from the present one. By the time the case reached the House of Lords, the attempt to obtain oral discovery had been abandoned, a fact which received some emphasis ([1987] AC 24 at 38). Although discovery of documents by a non-party under 28 USC s 1782 cannot be obtained by the issue of a subpoena duces tecum in England, in the particular case the applicant was seeking production of "numerous specified classes of documents" ([1987] AC 24 at 33) and it is therefore not clear that the House of Lords was addressing a situation in which the actual documents being sought, if held by a non-party in England, could not have been obtained by subpoena in that country. In any event, it was held that the facts did not constitute oppressive or vexatious conduct. Whether such conduct exists is always a question of fact. The forms of vexatious or oppressive conduct which I have found established could not have been found on the facts in South Carolina.
CONCLUSION
I make an order in terms of para 3 of Skadden's notice of motion filed in Court on 1 February 1996. The respondents to that motion, that is the applicants in the proceedings, are ordered