LENNING v ALEXANDER PROUDFOOT COMPANY WORLD

Court of Appeal (NSW)|1991-02-25|Before: Kirby P, Enderby J, Campbell J, Campbell JJ

LENNING v ALEXANDER PROUDFOOT COMPANY WORLD HEADQUARTERS

KIRBY P, PRIESTLEY and CLARKE JJA 25 February 1991, 22 April 1991 [1991] NSWCA 172

COSTS - Court of Appeal - summons for leave to appeal partial success of - variation of orders below - declaration made as to questions that may be asked of local witnesses appearing before an examiner - examination pursuant to request of foreign court under Pt9 Evidence Act 1898 urgent proceedings in the Court of Appeal occasioned by the presence in the State of attorneys from Florida - held: (Kirby P; Priestley and Clarke JJA concurring) As each party had succeeded only in part in the proceedings each should bear his or its own costs - accordingly, no order made as to costs.

PRACTICE and PROCEDURE - evidence for foreign court - request by judge in Florida - examination of witnesses - whether, having regard to Florida procedure, the examination involves taking "evidence" - whether involves pre-trial discovery meaning of exemption from obligation to answer question held: (Kirby P; Priestley and Clarke JJA reserving their opinions) The Court should declare that the questions asked are limited so as not to require those questioned to give any evidence which could not have been compelled to be given in examination-in-chief in an action of an equivalent character in New South Wales.

LEGAL PRACTITIONERS - foreign attorneys - whether entitled to participate in examination before a court appointed examiner - whether doing so constitutes a breach of the Legal Profession Act 1987, s115 - held: There is no such breach.

EVIDENCE - answering questions - request by foreign court examination ordered by court - subpoena to attend for examination - scope of questions which may be asked and documents required - discussion by Kirby P of the differences between procedure in NSW and United States courts.

Application of Forsyth; Re Cordova v Philips Roxane Laboratories Inc [1984]

2 NSWLR 327; National Mutual Holdings Pty Limited v The Sentry Corporation, unreported, FCA, 30 May 1990; Radio Corporation of America v Rauland Corporation [1956] 1 QB 618; Rio Tinto Zinc Corporation v Westinghouse Electric Corporation [1978] AC 547; Societe Nationale Industrielle Aerospatiale v United States District Court for the Southern District of Iowa 482 US 522; 96 L Ed 2d 461 (1987) (USSC) considered.

Evidence (Evidence on Commission) Amendment Act 1988.

Supreme Court Act, s76(1). Supreme Court Rules, Pt27, R1; Pt27, R7; Pt52, R4.

Kirby P In these proceeding the only remaining question is the disposition of the costs. That question arises in two matters which, with the concurrence of the parties, were heard together.

The first was a summons for leave to appeal from orders made by Enderby J on 19 February 1991, dismissing an application by Mr Raymond Lenning for certain relief. The second is a reference to the Court by Campbell J of an application by Mr Eckard Solbrandt for relief of a similar kind. Each proceeding came before the Court in circumstances of urgency which it will be necessary to describe.

After two skirmishes before the Court, and with encouragement from the Court, the parties eventually returned with an application that the Court make certain orders by consent. Those orders were duly made. O.7 of such orders reserved the costs of the earlier proceedings (including, therefore, the costs before Enderby and Campbell JJ). The Court must now provide for those costs. It does 80 against the general background provided by statute, the Rules of Court and the common law that costs in civil proceedings between private litigants are in the discretion of the court but will normally follow the event. That is to say, they will normally be ordered in favour of the party which has substantially succeeded in the litigation. See Supreme Court Act 1970, s76; Pt52 R11 Supreme Court Rules; Donald Campbell and Co Limited v Pollak [1927] AC 732; Laguillo v Haden Engineering Pty Limited [1978] 1 NSWLR 306. That general rule is subject to one relevant qualification, that where proceedings involve multiple issues (as this one did) it is appropriate for the Court to take into account, in ordering costs, whether a party has succeeded on some issues and failed on others. In this regard it is appropriate to take into account the time taken by the resolution of particular issues although, necessarily, in a general order of costs, the Court will not do so with mathematical precision. See Australian Conservation Foundation v Forestry Commission (1988) 81 ALR 166; Morosi v Mirror Newspapers Limited [1977] 2 NSWLR 749, 808.

The proceedings before the Court raised complex questions which were not, in the way they developed, heard to final conclusion and so determined. The orders made were, as has been said, made by consent. It would be undesirable, in principle, and needlessly burdensome on the Court, now to resolve all of the fine points argued by the parties in their written submissions and during the oral arguments before the Court. It would be undesirable in principle because, in the nature of litigation raising interjurisdictional issues, it is likely that some of the issues raised will present themselves again before long. It is preferable that the issues should be finally determined with the benefit of full contested argument than that they should be determined now simply to dispose of the costs of these parties who are otherwise in agreement. It would be burdensome for the Court not only because of other disputed cases awaiting resolution but also because (in the way the case developed) a number of issues were not finally resolved.

I will therefore sketch the principal questions which were before the Court; identify the consent orders which were made; and then proceed to the cost order which appears just in the circumstances. However, to reach a conclusion on the issue of costs, it is impossible to escape entirely an analysis of some of the complex issues which the parties came to this Court to litigate.

Alexander Proudfoot Company World Headquarters is a corporation established under the law of the State of Delaware in the United States of America. It has an affiliated company operating in Australia, viz Alexander Proudfoot Company of Australia (incorporated in Switzerland). The United States corporation is the plaintiff in proceedings in the Circuit Court of the 15th Judicial Circuit, Palm Beach County, Florida in the United States. A letter of

WBUBINING v ALEXANDER PROUDFOOT COMPANY WORLD HEADQUARTERS (Kirby PB

request as amended on 9 January 1991, addressed by Richard B Burk, a Circuit Court Judge, to this Court sets out the circumstances of the plaintiff's claim. According to the request, that claim arises out of an alleged breach by Messrs Craig Carnahan and Stephen Hamilton respectively of what would be described in the law of this State as an employment covenant in restraint of trade to which each of them severally agreed upon entering employment with the company. Their employment agreements are said to be dated respectively December 1987 and February 1987. Although the letter of request concerns both Mr Carnahan and Mr Hamilton, as the proceedings developed, the Court was concerned only with the claim against Mr Carnahan.

The letter from Judge Burk contains the statement that the plaintiff company had, by verified complaint, asserted that Mr Carnahan obtained employment with an organisation known as General Public Relations (GPR) which it was said was "located in Sydney, Australia" and which was "directly competing with the plaintiff'. Thus, the plaintiff's allegation in the Florida Court is that the acceptance of such employment by Mr Carnahan is a direct violation of his employment agreement with the plaintiff. In respect of such breach of contract, the plaintiff company sought orders from the Florida Court for damages and for injunctive relief.

It was common ground that, before the matter came before Enderby J, Mr Carnahan's local attorney had been given leave to withdraw from the Florida proceedings. It was noted that, in those proceedings, Mr Carnahan had failed to retain fresh counsel. In such circumstances, default judgment was entered against him because of his "apparent wilful absence from the hearing" (sic). Notice to this effect was sent to Mr Carnahan's last known address in the United States, in the State of Michigan.

The letter of request to this Court is ancillary to proceedings in the Florida Court which, naturally enough, follow the pre-trial procedures common in the courts of the United States of America. Those procedures are different in important respects from procedures followed in other jurisdictions of the common law, including in this country and in England. According to the rules of the Florida Court which were before this Court, the taking of evidence in New South Wales was part of a pre-trial process which did not amount to the taking of evidence which would necessarily become part of the evidence in the trial in Florida now limited to the relief available to the plaintiff company on its default judgment. A witness called to give a deposition is not, unless certain conditions are met, a witness at the trial for the party calling him or her. See Rules of Civil Procedure (Florida) R1330(a),(b) and (c).

In terms of the letter of request, this Court was requested "in the interests of justice" to summon Mr Ray Lenning, Mr Ackard (sic) Solbrandt and "a representative from General Public Relations" (GPR) "with most knowledge of the above caption case" to be examined under oath and "required to produce documents" as detailed in an addendum. The address of the witnesses and of GPR was given in St Leonards, a suburb of Sydney. Various other requests are made in the letter but these are not presently relevant.

Pursuant to order of the Court, Mr JT Gleeson, a Sydney barrister, was appointed to be the examiner before whom the evidence, relevantly, of Messrs Lenning and Solbrandt was to be taken. A subpoena was addressed to Messrs Lenning and Solbrandt by the Court requiring them to attend before the examiner "for the purpose of giving evidence'. It was this subpoena which occasioned the motion for relief filed by Mr Lenning. It was this motion which came before

Enderby J. A later motion by Mr Solbrandt came before Campbell J. Without determining it, Campbell J sensibly referred it to this Court as substantially the same issues were raised in it as were already before this Court on appeal from Enderby J.

As argued, three questions were presented for the decision of Enderby J in the proceedings brought by Mr Lenning. They were:

(i) Whether Mr Lenning was entitled to be relieved entirely from the obligation to appear before the examiner or, if not entirely, whether he was entitled to be relieved from having to answer certain questions specified in his motion;

(ii) Whether Mr Lenning was entitled to be represented before the examiner and, if so, entitled to an order to that effect; and

(iii)Whether an order should be made for the security of Mr Lenning's costs of attending before the examiner.

Enderby J noted the argument for Mr Lenning that the Florida procedures were different from those followed in this country and exposed Mr Lenning to a "fishing expedition" against which he was entitled to be protected by the terms of the applicable local legislation, viz the Evidence Act 1898, s878,s79 and s80. However, following what he took to be the approach of Clarke J in Application of Forsyth; Re Cordova v Philips Roxane Laboratories Inc [1984] 2 NSWLR 327 on the previously applicable legislation (The Foreign Tribunals Evidence Act 1856 (Imp) and the duty of the Court, out of comity, to cooperate with the Florida Court, Enderby J declined to give Mr Lenning any relief on the first prayer of his motion. He drew attention to the applicable Rules of Court governing such examinations (Pt27). He observed that by Pt27 R7(c) the Court could, on motion of any party, decide the validity of the ground for the objection to any question to which objection is taken before the examiner. He suggested that this was the way by which the Court would retain ultimate control over the examination so that "if necessary [it could] tailor and supervise the ultimate form of the examination before the examiner". He said that this could not be done in advance. However, the matter could be brought back at short notice to the duty judge, as the rules contemplated.

So far as the second prayer was concerned, Enderby J had before him uncontested evidence that, under the law of Florida a person whose deposition is taken before trial is entitled as of right to be represented by counsel. So much was stated in an affidavit of Mr Edward Marod, an attorney licensed to practise in Florida. Enderby J declined the application upon the basis that, upon his understanding "Mr Carnahan, who is the defendant, will be represented". He said that there was "sufficient identity of interests between him and Mr Lenning" for justice to be done although the latter was not represented.

Enderby J declined relief on the third prayer relating to security for costs. He did so because of "lack of evidence and having regard to the fact that Mr Lenning "resides and works in Sydney".

It was from the order which followed, that the motion by Mr Lenning be dismissed with costs, that the summons for leave to appeal was brought to this Court. Leave was required because of the interlocutory nature of the order of Enderby J. See Supreme Court Act 1970 s101(1)(e).

In the normal course of events, this Court would have heard the summons for leave to appeal on the succeeding Monday and determined whether the matter was one proper for appeal or not. If all that were involved was the determination

WBUBINING v ALEXANDER PROUDFOOT COMPANY WORLD HEADQUARTERS (Kirby PB

of matters of practice and procedure in the trial court, this Court would not normally grant leave for reasons repeatedly stated. See eg In re The Will of Gilbert (1946) 46 SR (NSW) 318. The issues raised in respect of the second and third prayers of the motion would clearly have fallen in the class of practice and procedure. However, the issues raised by the first, involving as they did the approach to be taken to the new provisions of Pt9 of the Evidence Act, were in a different class.

Upon the approach that should be taken to the application of that Part in response to a request from a Court in the United States of America, there has already been a difference of judicial opinion in this country. See eg the opinions of Clarke J in Application of Forsyth (above) and of Northrop J in National Mutual Holdings Pty Limited v The Sentry Corporation, unreported, Federal Court of Australia, 30 May 1990, 22f. Clarke J'S decision related to the pre-existing Imperial Act. Northrop J's opinion concerned Pt9 of the Evidence Act which was incorporated by the Evidence (Evidence on Commission) Amendment Act 1988. Ordinarily, therefore, the case might have attracted leave if it could have been shown on behalf of Mr Lenning that, arguably, Enderby J had erred in his approach to the application of the Act and Rule. However, an element of urgency was presented to the Court (as earlier to Enderby J) by circumstances which I must now describe.

The subpoena was issued to Mr Lenning on 7 December 1990. His notice of motion was not filed until 13 February 1991. By that time, the examination was already appointed to take place before the examiner commencing on 30 February 1991. For that purpose, two attorneys, acting on behalf of the plaintiff company, had travelled from Florida to Australia for the purpose of participating before the examiner and there representing the company and asking questions of Mr Lenning (and Mr Solbrandt). They were already present in the jurisdiction awaiting the commencement of the examination.

Enderby J's orders were made on 19 February 1991, ie the day before the examination was due to commence. The time was abridged for the service of the summons for leave to appeal so that it could be returned before the Court virtually instanter. The Court interrupted its list on 21 February 1991. The hearing of the summons proceeded part-way. As a result of observations made by the Court during the hearing, the parties were sent away with the expression of certain tentative views concerning the meaning of the Act and in the hope that, complying with those views, they could proceed with the taking of evidence before the examiner whilst the attorneys from the United States were in this country. The summons was stood over to be heard on the succeeding Monday, there taking its ordinary place in the list.

However, on the succeeding day, 22 February 1991, by leave of the Court, there was returned also virtually instanter a motion on behalf of the plaintiff company. This sought an order that Mr Michael Koenigsknecht, an attorney of Florida, should have leave to take part in the examination before the examiner of Messrs Lenning and Solbrandt. It appeared that, at the commencement of the examination, leave was sought for Mr Koenigsknecht to participate in the proceedings to the extent of adducing the evidence before the examiner. However, at the commencement of the proceedings counsel for Messrs Lenning and Solbrandt opposed Mr Koenigsknecht's participation in this way upon the basis that it would contravene local law. The examiner declined to give leave to Mr Koenigsknecht to "appear" before him. He said that such leave was "a matter for the Court".

Because the question was considered to be incidental to the summons already before this Court, the company took out its motion in the Court of Appeal. No objection was raised to that course. The local law relied on by counsel for Messrs Lenning and Solbrandt was the Legal Profession Act 1987, s115. Put generally, that section forbids a person acting as a barrister or solicitor in the State unless he or she holds a current practising certificate. The section imposes a criminal penalty for the breach. The possibility of such an objection being taken for the witnesses had been raised when the matter was first listed before this Court. The Court indicated then that it did not regard the objection as meritorious. It is not at all uncommon, in proceedings before examiners or in international arbitration, for overseas legal practitioners for the contesting parties to participate in the proceedings by lawyers brought from their home jurisdiction. They are not thereby participating in the local courts, for which they would require local qualifications. In all of the proceedings before this Court, as earlier before Enderby and Campbell JJ, the United States corporation was represented by local practitioners.

It was possibly as a result of the Court's indication of its initial response, unfavourable to the objection to Mr Koenigsknecht's participation, that when the motion was returned for an order to permit him to participate, the Court was informed that Messrs Lenning and Solbrandt had withdrawn their objection to Mr Koenigsknecht's participation before the examiner. The withdrawal of the objection was proper. The objection to his participation was unwarranted.

The occasion of the return of the proceedings in the Court was then taken to explore further the resolution of the principal issues contested between the parties, concerning the questions which could properly be asked of Messrs Lenning and Solbrandt before the examiner. As a result of that exploration, a high degree of consensus was established on the part of the parties concerning the meaning of the applicable sections of the Evidence Act. The parties were again sent away to get on with the examination whilst Mr Koenigsknecht and his colleague were in the jurisdiction and to bring back in the ordinary list of this Court the terms of the order which they had agreed upon.

This was the last of the contest that the Court saw, save for the handing up of the draft orders which set out the agreement of the parties. Pursuant to that agreement the Court made the orders asked.

The following are the orders which the Court made on 25 February 1991:

The first-named claimant (Mr Lenning) has leave to appeal from the decision of Mr Justice Enderby delivered on 19 February 1991;

The orders of Mr Justice Enderby made on 19 February 1991, set aside;

It be declared that the examinations of Raymond Lenning and Eckard Solbrandt pursuant to subpoenas issued in the proceedings in the Court below in respect of proceedings in the Circuit Court of the 15th Judicial Circuit in and for Palm Beach County, Florida, between Craig Carnahan and the Florida plaintiffs ("the examinations') be limited so as not to require either claimant to give any evidence which could not have been compelled to be given in examination-in-chief in an action in New South Wales for breach by Craig Carnahan of the contract of employment between Craig Carnahan and the Florida plaintiffs on the question of assessment of damages (being damages as recoverable in Florida);

The claimants have leave to be legally represented during the examinations;

WBUINING v ALEXANDER PROUDFOOT COMPANY WORLD HEADQUARTERS (Kirby PY

Mr M Koenigsknecht have leave to appear at the examinations on behalf of the opponent;

Because the disposition of costs was reserved and because the making of the orders involves the setting aside of the order of Enderby J, it is appropriate to state the reasons which led me to take the course which I did. I need to do so in order to resolve the remaining difference on the issue of costs tendered by the parties.

The testimony which the plaintiff company sought to elicit from Messrs Lenning and Solbrandt (and others not now relevant) was stated in the amended letter of request to be:

"(a) The relationship and similarities between plaintiffs and GPR;

(b) In view of the fact that Mr Solbrandt is a former officer of the plaintiff's affiliate and has knowledge of the methods and techniques which both plaintiffs and GPR utilise in their respective businesses;

(c) The witnesses can establish any solicitation engaged in by the defendant while employed by the plaintiffs and/or GPR;

(d) The abovenamed witnesses can also testify as to whether plaintiffs' documents are being or were ever being utilised by GPR, Solbrandt or Mr Lenning."

The general law of discovery in this jurisdiction, as in England and other jurisdictions of the common law, is different from that of the United States. Generally speaking, the use of a subpoena to obtain discovery, even from a party to litigation, is an abuse of the process of the Court. See Waind v Hill and National Employers' Mutual General Association Ltd [1978] 1 NSWLR 372, 328. There is in the Rules of the Supreme Court a novel provision for pre-trial or preliminary discovery. See Supreme Court Rules, Pt3, R1. However, that provision is strictly limited to the ascertainment of the identity of a person to be sued. See discussion John Fairfax and Sons Limited and Anor v Cojuanco (1987) 8 NSWLR 14S. It is not a general procedure for pre-hearing examination of a party to a case, still less of a potential witness in a case. Such procedure is unknown to the law of this State. The use of a subpoena to conduct a "fishing expedition" to discover material at large in the hope that, amongst it, may appear useful matter which can later be used as evidence during the course of litigation is impermissible by our law. Cf Smith's Weekly Publishing Co Limited v Sunday Times Newspaper Company Ltd (1923) 31 CLR 552; Commissioner of Railways v Small (1938) 38 SR (NSW) 564; 55 WN (NSW) 215. See also Spencer Motors Pty Limited v LNC Industries Limited [1982] 2 NSWLR 921; Lucas Industries Limited v Hewitt (1978) 18 ALR 555; Bank of New South Wales v Withers (1981) 35 ALR 21; cf Supreme Court Rules Pt37, R8.

The foregoing is not, however, the law in the United States. Specifically it is not the law of the State of Florida in that country. It is this clash of legal procedures which gave rise to the principal issue raised by the summons. It is an issue which has arisen before in this country, as may be seen in the decisions in Application of Forsyth and The Sentry Corporation cases referred to above. It has also arisen in England. See eg Radio Corporation of America v Rauland Corporation [1956] 1 QB 618 and Rio Tinto Zinc Corporation v Westinghouse Electric Corporation [1978] AC 547. See esp 610. The differences between United States practice and that of other countries (not limited to the common law)

has been recognised by the Supreme Court of the United States itself in Societe Nationale Industriele Aerospatialle v United States District Court for the Southern District of lowa 482 US 522; 96 L Ed 2d 461 (1987). In the opinion of the majority of that Court (Stevens J, with whom Rehnquist CJ and White, Powell and Scalia JJ agreed) it was observed (at 542 (US), 482 (L Ed):

"Tt is well known that the scope of American discovery is often significantly broader than is permitted in other jurisdictions, and we are satisfied that foreign tribunals will recognize that the final decision on the evidence to be used in litigation conducted in American courts must be made by those courts. We therefore do not believe that an American court should refuse to make use of [the Hague Convention on the taking of evidence abroad in Civil or Commercial matters] procedures because of a concern that it may ultimately find it necessary to order the production of evidence that a foreign tribunal permitted a party to withhold."

Both before Enderby J and in this Court, Mr Lenning contended that he should be protected by the law of this State in respect of the plaintiff company's proceedings in Florida, just as he would if he were subject to a subpoena issued out of the Supreme Court in relation to local proceedings. Mr Solbrandt, in the proceedings referred to the Court, made similar submissions. Each of them said that the Court should offer its protection upon the basis of principles developed by the common law protective of the right of persons from being coerced by compulsory court process. Each of them also relied upon the provisions of the local legislation which governs the procedures to be adopted in examinations pursuant to the request of foreign courts.

Formerly, the applicable statute was the Foreign Tribunals Evidence Act 1856. Although that Act had earlier been repealed for the United Kingdom, it continued until recently, by virtue of the Supreme Court Rules, to apply to requests addressed by foreign courts to the Supreme Court of this State. Originally, the Act had extended in its terms to the colony of New South Wales and was inherited as such as part of the law of the State. However, the applicable legislation is now Pt9 of the Evidence Act 1898. That Part was incorporated by the 1988 Act. The Attorney General's Second Reading Speech in support of the Bill which became the Act indicated that its purpose was to bring the law of this State into line with uniform legislation agreed to by the Standing Committee of Australian Attorneys General. That legislation, in turn, involved the adoption of model legislation by all jurisdictions of Australia designed to facilitate the ratification by Australia of the Hague Convention referred to in Societe Nationale (above). Explaining the provisions which have been the subject of submission in this case, the Attorney General (Mr Dowd) said:

"Proposed s79... empowers the Supreme Court to make orders pursuant to an application by a Court or Tribunal outside the State for the taking of evidence for use in proceedings before the request in Court. The taking of evidence includes: examination of witnesses, production of documents, inspection of property, taking of samples, medical examinations, blood testing and generally any order in accordance with the powers of the Supreme Court to make an order in its own proceedings. Proposed s80 preserves the privileges that a witness has in relation to the giving of evidence, whether the privilege is one arising in similar proceedings in the State or in the place where the requesting court exercises jurisdiction."

See Parliamentary Debates (NSW) (Legislative Assembly) 30 August 1988, 784, 786.

WBUBINING v ALEXANDER PROUDFOOT COMPANY WORLD HEADQUARTERS (Kirby PB

The statutory provisions (so far as presently relevant) read:

"78(1) If an application is made to the Supreme Court for an order for evidence to be obtained in the State and the Supreme Court is satisfied

(a) that the application is made in pursuance of a request issued by or on behalf of a court... exercising jurisdiction in a place outside the State; and

(b) that the evidence to which the application relates is to be obtained for the purposes of proceedings which... have been instituted...

(2) This Part does not apply in respect of proceedings relating to the commission of an offence...

79(1) The Supreme Court has power, on any such application... by order to make such provision for obtaining evidence in the State as may appear to the Court to be appropriate for the purpose of giving effect to the request in pursuance of which the application is made.

(2) An order under this section may require a specified person to take such steps as the Court may consider appropriate for that purpose. (3) without limiting the generality of subs(1) and subs(2) an order under this section may, in particular, make provision

(a) for the examination of witnesses, either orally or in writing;

(4) An order under this section shall not require any particular steps to be taken unless they are steps which can be required to be taken by way of obtaining evidence for the purposes of proceedings in the Supreme Court...

(6) An order under this section shall not require a person -

(a) to state what documents relevant to the proceedings to which the application for the order relates are or have been in the person's possession, custody or power; or

(b) to produce any document other than particular documents specified in the order and appearing to the court making the order to be, or to be likely to be, in the persons possession, custody or power.

(7) A person who, by virtue of an order under this section, is required to attend at any place shall be entitled to the like conduct money and payment for expenses and loss of time on attendance as a witness in proceedings before the Supreme Court.

80(1) A person shall not be compelled by virtue of an order under s79 to give any evidence which the person could not be compelled to give

(b) in similar proceedings in the place in which the requesting court exercises jurisdiction

(4) In this section, references to giving evidence includes references to answering any question and to producing any document...."

Mr Lenning's contentions (in which Mr Solbrandt joined) relevant to the first issue in contest on the summons were:

That s78 of the Act contemplates only an order for "evidence" to be obtained. It therefore prohibits the taking of the answer to any questions except as those answers will be "evidence" in a trial. As there was no certainty that the "testimony" (to use a neutral word) would in fact be used in the trial in the instant case upon the issues remaining between Mr Carnahan and the plaintiff company, what was sought was material in the nature of pre-trial discovery and not "evidence". It was therefore outside the Act;

That s79(6) of the Act prohibits the Court from making a general order for discovery in aid of a requesting court and that, properly analysed, that was the nature of the request received by this Court from the Florida Court; and

That s80(1)(a) prohibits the proposed examination because the oral depositions proposed were part of a pre-trial discovery procedure amounting to the administration of unlimited oral interrogatories. Such interrogatories could not be compelled of a witness in similar proceedings in New South Wales. They were thus prohibited by the terms of the Act which therefore, in effect, exempted Messrs Lenning and Solbrandt from answering the questions proposed.

It is possible to pass quickly over the first two arguments because, as finally presented, the argument from Messrs Lenning and Solbrandt was confined to the third point specified. Necessarily by passing over the first two points, I indicate no opinion whatever on their merits. I shall simply confine myself to the issue finally tendered for decision as that is relevant now to disposing of the costs which remain contested.

Enderby J appears to have dealt with the application of Mr Lenning upon an "all or nothing" basis. In fairness to his Honour, it is possible that this was the way Mr Lenning presented his case at first instance. Certainly, the principal relief sought by his motion was that the subpoena addressed to him (and the order made pursuant to it) be "discharged or set aside". The first two of the three arguments listed above support only a complete exemption from the obligation to give "evidence" of the kind requested by the Florida court. However, there remained the alternative prayer in the motion which effectively asked his Honour to fashion an order (or declaration) taking into account the exempting provisions of s80(1)(a) of the Act. Enderby J declined to do this, preferring to leave the matter to be dealt with by the examiner at first instance and, if necessary, by the Court as Pt27 contemplates.

In the circumstances which have been described, the parties later agreed that a declaration in the terms recorded above should be made. That declaration accords with my understanding of the requirements of s80(1)(a). It was therefore, in my view, appropriate for the Court to make the declaration. Doing so facilitated the performance by the examiner of his functions. The fact that two attorneys had travelled from the United States to Sydney, specifically to take part in the examination, rendered the more languid course contemplated by Enderby J inappropriate to the circumstances. This was a case in which it was highly desirable that the Court should define the parameters of the examination. It was reasonable to infer that the attorneys from the United States would have been greatly inconvenienced if they had been required to wait around whilst questions were asked and successively brought back to the Common Law Division of the Supreme Court to be measured against s80(1)(a) of the Act.

WESINING v ALEXANDER PROUDFOOT COMPANY WORLD HEADQUARTERS (Priestley and Clarke JJA and Kirby P)

The foregoing provides the reason why I was prepared to take the course which I did, which included the grant of leave to appeal from Enderby J and the order setting aside his Honour's order dismissing the summons which had been brought to him.

But what of the costs order which then follows? On the one hand, the proceedings brought by Mr Lenning, and later by Mr Solbrandt, have been justified, at least in part. True, neither of them has succeeded (at least in the way the matter proceeded) on the primary argument that each should be excused entirely from the obligation to answer questions before the examiner and that the subpoena addressed to each of them should be set aside. No such general order was made by this Court. Yet, as a result of the proceedings in the Court, the general order of dismissal of Mr Lenning's motion was set aside and orders and a declaration made, the latter of which made plain the limits which s80 of the Act places upon the questioning of a witness appearing before an examiner appointed pursuant to an order following a request of a foreign court. The expiration of the declaration, and the fashioning of its terms, followed suggestions made by the Court during argument. The course adopted was clearly a sensible one in the exigencies.

On the other hand, sensible or not, the declaration to which the Court finally acceded fell far short of the claim by Messrs Lenning and Solbrandt to be entirely excused from giving evidence. Moreover, upon one view, it did little more than to state the requirements of s80(1)(a) of the Act which can be found in any up to date collection of the statutes of this State. As well, the motion which the plaintiff company was obliged to return before the Court on 22 February 1991 (dealing with the right of participation of Mr Koenigsknecht) would appear to have been occasioned by unreasonableness on the part of Messrs Lenning and Solbrandt or those advising them. The Court had made it abundantly plain on the preceding day that it saw no merit in the objection to Mr Koenigsknecht's participation based on the Legal Profession Act. It then indicated that it would, if necessary, make orders to ensure that he (and his colleagues) could fulfil the obligations which had brought them from Florida to this State for the examination of witnesses before the examiner.

The position is thus reached that each of the parties has demonstrated an entitlement to some costs. The costs of 22 February 1991 would ordinarily be ordered in favour of the company, for its motion on that day was reasonable and secured the withdrawal of the objection to the involvement of Mr Koenigsknecht. Part at least of the costs of the summons for leave to appeal would ordinarily be ordered in favour of Messrs Lenning and Solbrandt for, by consent of the company, they have partly succeeded, where they failed entirely before Enderby J.

Weighing up the respective entitlements of the parties, I consider that each entitlement cancels the other out.

Accordingly, I am of the view that each party should pay his or its own costs of the proceedings in the Court of Appeal and in the Common Law Division. To achieve that end the Court should therefore make no order as to costs.

Priestley and Clarke JJA and Kirby P has described the events in these proceedingswhich led to consent orders being made disposing of all issues except costs.

In our view the costs orders should be made bearing in mind the court's observations of what took place in court, but principally by reference to what the moving parties were claiming and what was the effect of the orders that were made.

On this basis, substantially for the reasons given by Kirby P under the heading Costs, we reach the same conclusion on the appropriate order for costs as he has done. On this basis also, we reserve our opinion on the other questions in the case.

We agree with the order for costs proposed by Kirby P.

In respect of the costs reserved by order made by the Court on 25 February 1991 order; No order as to costs.

Counsel for the Claimant: S Rares Counsel for the Opponent: CDN Griffin (Solicitor) Solicitors for the Claimant: Mallesons Stephen Jaques

Solicitors for the Opponent: Freehill Hollingdale and Page

At a glance

Court

Decision date

Before

Source

Judgment (102 paragraphs)

Parties

Cases Cited (5)

Cited By (5)