Fraud - application for leave to adduce oral evidence by video link.

[2011]JRC237

Royal Court

(Samedi)

20 December 2011

Before     :

H. W. B. Page, Q.C., Commissioner, sitting alone.

 

IN THE MATTER OF AN APPLICATION FOR LEAVE TO ADDUCE ORAL EVIDENCE BY VIDEO LINK

Advocate E. L. Jordan for the Plaintiffs.

Advocate D. S. Steenson for the Defendants.

judgment

the commissioner:

1.        This is my reserved ruling on one of a number of contested interlocutory applications arising in connection with the trial of an action which is due to start  on 11^th January 2012 and expected to run for five or six weeks. In this instance Advocate Jordan seeks leave for the oral evidence of two witnesses for the Plaintiffs, Sergio Lima Santoro (“Mr. Santoro”) and Vivaldo Alves (“Mr. Alves”) to be given by video-link from Brazil.

2.        The action is essentially a civil fraud claim by The Federal Republic of Brazil and The Municipality of Sao Paulo to funds of the order of US$10.5 million (plus interest) held in bank accounts in Jersey in the name of the Defendants, Durant International Corporation and/or Kildare Finance Limited and currently the subject of a freezing order granted by the Royal Court on 13^th March 2009. The funds are said to represent the traceable proceeds of bribes, secret commissions or otherwise fraudulent payments received by Sr. Paulo Maluf and/or his son Sr. Flavio Maluf in early 1998 in connection with a major public works contract in Sao Paulo for the construction of the “Avenida Agua Espraiada”, the main contractor for which was a company by the name of Mendes Junior Engenharia S/A. Paulo Maluf is a well known figure in the political and business worlds in Brazil. Among other things, he is a former Governor of the State of Sao Paulo (1979 to 1983) and a former mayor of the Municipality of Sao Paulo (1993 to December 1996). Flavio Maluf is a businessman and (it is admitted) a director of Durant. Durant and Kildare are alleged by the Plaintiffs to be owned or controlled by Paulo Maluf and/or Flavio Maluf.

3.        The application is resisted by Mr. Steenson on a number of grounds: that the court has no jurisdiction to allow evidence to be given in this way; that the  application is no more than the repetition of a previously unsuccessful summons and is, accordingly, res judicata or otherwise no longer open to the Plaintiffs to make; that the evidence said to demonstrate the witnesses’ unwillingness to appear in person is unconvincing or otherwise unsatisfactory; that having to conduct cross-examination remotely by video-link would place the Defendants (and the Court) at considerable disadvantage and would operate to the serious prejudice of the Defendants; that the application is too late; and that it is incompatible with the Plaintiffs’ insistence, at an earlier stage, on the action being tried in Jersey rather than Brazil.

4.        Jurisdiction: There appears to have been only one occasion on which the Royal Court has been required to deliver a reasoned judgment on a contested application for the admission of evidence by video-link, that of McCann v. Bateman [2005] JRC 027B, a personal injury claim in which I gave leave for one of the defendants to give evidence by such means from Australia. The material passages from the judgment relied on by Miss Jordan read as follows:-

“Newman J., as it seems to me, rightly emphasised [in the English case of  Polanski v. Conde Nast Publications Ltd [2003] EWCA Civ 1573] that “No defined limit or set of circumstances should be placed upon the discretionary exercise to permit video link evidence”, the objective being to enable the court to do justice (para.9)……..As far as guiding principle is concerned, the approach to be followed in the Royal Court appears to me to be capable of being expressed very shortly. The normal practice and expectation of the court is that witnesses should be present in court to give evidence in person: giving evidence by video-link is not yet a mere optional alternative. The court does, however, have a discretion to permit the use of a video-link where there is good reason to do so and it is judged that the interests of justice – as between the immediate parties and in the wider sense of the expeditious and efficient management of litigation – would best be served. How that discretion is exercised in any particular case will depend on the circumstances of the case as a whole and the court’s assessment of the justice of the matter” (paras.6 & 7).

Mr. Steenson correctly points out that the report of that case does not speak in terms of opposition to the application having been based on lack of jurisdiction as opposed to discretion. I fully accept that it may be that that particular point was not taken at all or, at least, not taken as directly as it now is (I have no specific recollection myself) notwithstanding that the application was, as the report records, vigorously resisted by counsel for the plaintiff and it seems unlikely that the application could have proceeded without reference at any stage to RCR 6/20. Be that as it may, the decision appears to have stood unchallenged for over six years. Meanwhile, according to my enquiries at the Judicial Greffe, the use of video-link in litigation has become increasingly common as a convenient means of taking evidence from witnesses overseas.

5.        Turning to RCR 6/20 itself, the starting point of contention revolves around the wording of paragraph (1) which provides:-

“Subject to these Rules and to any other enactment relating to evidence, any fact required to be proved at the hearing of any proceedings by the evidence of witnesses shall be proved by the examination of the witnesses orally and in open court”.

This, Mr Steenson says, plainly envisages the attendance in person of witnesses in the court where the proceedings are being heard, a condition which is not fulfilled by a audio-visual link with a witness who is in fact located elsewhere. Miss Jordan, on the other hand, contends – in my view correctly - that there is no warrant for such a restrictive reading; that the essential requirements of this rule of court are only that the examination of witnesses should  be “orally” and that this should occur “in open court”. Evidence given via an audio-visual is, she submits, entirely compatible with both these requirements: the witness is visible and audible in the court where the proceedings are being heard, the examination takes place there and does so in open court open to the public.

6.        In any event, submits Miss Jordan, RCR 6/20 (1) is said to be “Subject to these Rules” and paragraph (3) of that same rule gives the Court full discretionary power to direct the manner in which evidence is given (provided that this does not enlarge the ambit of what is legally admissible) in the same way that the English Court was held to have such power by Morritt J. (as he then was) in Garcin & Ors. v. Amerindo Investment Advisors Ltd & Ors [1991] WLR 1140. There are indeed close parallels between that case and the present one, though not quite in every respect that Miss Jordan suggests.

7.        The terms of Ord. 38 r.1 of the then Supreme Court Rules closely mirrors those of RCR6/20(1): “The general rule, as reproduced in Ord.38, r.1, is that any fact required to be proved at the trial by evidence of witnesses shall be proved by the examination of the witness orally and in open court” (per Morritt J. at 1142). And it seems that the learned judge proceeded on the premise that, without more, evidence by video-link would not be permissible. That rule was, however, said to be subject to other provisions of the Rules, the Civil Evidence Acts and any other enactment relating to evidence; and Rule 3(1) of that order expressly conferred power on the court, among other things, to order “that evidence of any particular fact shall be given at the trial in such manner as may be specified by the order” including by means of statements on oath of information and belief, production of documents or entries in books or newspaper reports.

8.        I am unable to accept Miss Jordan’s proposition that paragraph (3) of RCR 6/20, which reads:-

“The Court shall have full discretionary power, at any time before the delivery of judgment, to receive such further evidence as in the opinion of the Court the justice of the case may require, and may of its own motion direct that additional witnesses be heard” ,

confers any equivalent general power on the Royal Court. Quite what its intention and limits are may be debatable but I am not convinced that it holds the key to the present issue.

9.        On the other hand the final words of paragraph (2)(c) of RCR 6/20 do appear to be wide enough to include a power equivalent to that provided in the old Ord. 38, r.3 on which Morritt J. relied:-

“(2) However, the Court may – ………(c) order that evidence of any particular fact to be specified shall be given at the hearing by statement on oath of information and belief or by production of documents or entries in books or by copies of entries or otherwise as the court may direct” (emphasis added).

The wordings of the two provisions are slightly different (“in such manner as may be specified by the order” in the case of Ord. 38.r.3(1): “or otherwise as the court may direct” in the case of RCR 6/20 (2)(c)), but the substantive effect appears to me to be the same. As in Garcin, this power is subject to the proviso that it may not be used to enlarge the scope of what would be properly admissible in law. And, as in that case, in the light of Article 3(1) of the Civil Evidence (Jersey) Law 2003 it appears to me that the proposed evidence would on any view be admissible for substantially the same reasons as those given by Morritt J. in Garcin at 1142 D-F.

10.      Mr. Steenson suggests that such a construction of RCR 6/20 (2)(c) is not justified; that, taken as a whole, the rule “does not necessarily concern oral evidence” but rather situations where evidence is required “in documentary form” in order to prove particular facts. But the paragraph specifically includes affidavit evidence (“statement(s) on oath of information and belief”): in other words the testimony of witnesses as well as documents. To read it as limited to documentary material is not, therefore, a tenable proposition. He also suggests that the drafting of RCR 6/20 (2) is notably different from that of O.38.r.3 and that Garcin is accordingly of no authority in Jersey. There are certainly differences in some respects, but there are also striking similarities in others. And Morritt J.’s analysis of the relevant provisions of O.38, while not binding on this Court, is instructive. But even without reference to Garcin, it is difficult to see any justification for cutting down the prima facie generality of the words “or otherwise as the court may direct” in RCR 6/20(2)(c).

11.      Nor do I think much turns on the phrase “any particular fact to be specified” in RCR 6/20(2)(c). Mr. Steenson suggests that this indicates an intention to confine the scope of this provision to a limited number of factual issues as opposed to a witness’s whole testimony. For my own part, I read these words as no more than a convenient introduction to a provision designed to confer on the Court the discretionary power to allow evidence to be adduced in a manner other than the norm described in RCR6/20(1).

12.      Mr. Steenson submits that the legislature in Jersey has addressed the question of evidence from witnesses outside the jurisdiction, has made express provision for that in the form of letters of request pursuant to RCR 6/20(5)(b), and must therefore be taken deliberately not to have sanctioned the taking of evidence via video-link. This, he suggests, is in line with the position in England where the use of the latter is derived exclusively from Rule 32.3 of the English Civil Procedure (“CPR”) Rules, the CPR itself being a creature of statute, namely the Civil Procedure Act 1997 and the Civil Procedure Rules 1998. But, as is apparent from Garcin, this is not correct: that case, decided in 1991, pre-dated the legislation in question by a long way, illustrating how from time to time legitimate procedural practices can develop ahead of specific legislative provision. By the same token, the absence of specific provision for video-link evidence in civil proceedings in Jersey plainly does not mean that such a procedure is necessarily illegitimate if there otherwise appears to be power to permit it.

13.      On any view, therefore, this Court does in my judgment have power under RCR 6/20 paragraph (2) (c) to allow oral evidence to be given via video-link. 

14.      Quite apart from any provision of the Royal Court Rules, a more fundamental source of authority for the power to permit oral evidence via a video-link lies in my view in the Court’s inherent jurisdiction to control its own process including the manner in which evidence is adduced: a jurisdiction which ought not to be treated as cut down by anything other than the clearest possible legislative enactment. Accordingly, while I accept that the view expressed earlier concerning the effect of RCR 6/20 paragraph (1) appears to be at odds with that of an authority as distinguished as Morritt J., I myself find it difficult to see that paragraph as sufficiently compelling in its terms to have the effect of curtailing the Court’s inherent jurisdiction.

15.      Res judicata etc.  The basis for this objection lies, in short, in the fact that a similar application was made before me and dismissed with costs on 9^th November (though on that occasion the application was in respect of four witnesses). But recourse to technical doctrines of issue estoppel, the rule in Henderson v. Henderson (1843) 3 Hare 100, or suggestions that the Court is functus officio are all misconceived here.  Contrary to Mr. Steenson’s submission, the matter is pre-eminently one of case management. There is rarely scope for the application of such principles in this field and nothing out of the ordinary in the present case that would justify them being brought into play here. It is not uncommon for case management decisions legitimately to be re-visited in the light of later developments. Unmeritorious attempts to re-open earlier decisions for no good reason tend to be treated simply as an abuse of court and sanctioned appropriately in costs.

16.      As will have been evident to both parties at the time, one of my chief concerns on the previous occasion was that the Plaintiffs’ approach to the application assumed far too much as to the Court’s readiness to make an order of this kind and that the supporting evidence was less than satisfactory in a number of respects. And, although the Act of Court does not reflect it, I gave a clear indication at the time of dismissing the earlier application that the Court was not closing the door on any further application; which, no doubt, is why following the last hearing the Defendants sought, as they did, to have a representative present at any further discussions with prospective witnesses that might take place concerning their willingness or otherwise to travel to Jersey. The fact that the earlier application was dismissed rather than adjourned (as another application was) is, accordingly, of no consequence.

17.      What has since happened is that, as described below, the Plaintiffs have made further significant efforts to try to persuade witnesses to make the journey to Jersey, in two cases with success (it seems) but in two others, the subject of the present application, to no avail. They have also addressed in some detail the logistics of any video-link operation in a way that they had previously failed to do. In those circumstances, I see no reason to treat their renewed application as illegitimate.

18.      Unconvincing evidence of unwillingness to come to Jersey? Mr. Sidwell describes in a recent affidavit how in late November he held further meetings in Brazil with Sergio Lima Santoro and Vivaldo Alves; how he handed each of them a letter and a translation thereof emphasising the importance of their attendance in person at the forthcoming trial and asked them to confirm whether they were or were not able to attend, and if not to state their reasons in writing. Each of them told Mr. Sidwell that he was not willing to attend the hearing in Jersey. In the case of Mr. Santoro, he supplied a short written note stating (in translation) that he would “not be able to appear in Jersey in January or February 2012 because of prior commitments that are already arranged, in addition to various health problems that I have (diabetes and gastritis).” Mr Steenson, conducting a surgical-style analysis of this affidavit, submits that it remains unsatisfactory in a number of respects and insufficient to establish that there are good and plausible reasons for the Mr. Santoro and Mr. Alves declining to appear at the trial in person. He also complains that the Defendants have been put in a position in which the Defendants now have little opportunity of testing the veracity of Mr. Sidwell’s evidence.

19.      A fair reading of that affidavit appears to me to make it perfectly clear that neither of these witnesses is willing to make the journey to Jersey for the trial. Nor is it difficult to understand that there could be all sorts of reasons, personal or business, why someone of the age of Mr. Santoro or Mr. Alves might find it inconvenient or uncongenial to fly half way across the world and to be away from home for the best part of a week. Short of offering them financial inducements of a kind that the Defendants would rightly condemn as inappropriate, it is difficult to see what more the Plaintiffs could do to induce them to attend the trial in person. As Miss Jordan emphasises, these people are not employees of the Plaintiffs, are not otherwise subject to their control, and are not parties to the litigation. The situation is very different from that in Ithaca (Custodians) Ltd. v. Perry Corporation [2003] 2 NZLR 216, a case in which the High Court in New Zealand refused an application by the defendant Perry Corporation for a Mr. Richard Perry to give evidence by video-link from the United States on the ground that he was unavailable because of business commitments. Mr. Perry was the sole shareholder and president of Perry Corporation, the defendant to the proceedings, and it is hardly surprising that the court was unimpressed with his professed reasons for being unable to attend the trial. (Though even a party to litigation may, in exceptional circumstances, be permitted to give evidence by video-link: Polanski v. Condé Nast Publications Ltd. [2005] UKHL 10.)

20.      Prejudice to the Defendants? In Ithaca the trial judge commented that having heard and seen those witnesses who gave evidence for the defence in person, he was confident that the earlier decision (by another judge) not to allow Mr. Perry to testify via video-link was correct:-

“The process of judging credibility and assessing the weight to be given to evidence in any proceedings can be an exacting one. A witness’ demeanour and “body language” can frequently be of vital importance in the assessment by a Judge of the credibility and reliability of the witness. Evidence given by video link often will not be an adequate substitute. When the evidence relates to events at the very heart of the proceedings, and the credibility and reliability of the witness are crucial to the determination the court must make, there is no substitute for that witness giving evidence in person. And so it was with Mr. Richard Perry in these proceedings.”

Mr. Steenson relies on this passage in support of his submission that it would be wrong to oblige the Defendants to conduct their cross-examination of such potentially important witnesses via a video-link in a case involving serious allegations of fraud, where credibility is likely to be a crucial consideration, where the opportunity for the court to observe the demeanour of witnesses will be of cardinal importance and where, in the case of Mr. Alves, the witness appears to have been implicated in the alleged fraud.

21.      I accept, of course, this characterisation of the case and that in an ideal world every witness would be examined and cross-examined in person in court. But Mr. Steenson overstates, I think, the extent to which the appearance of witnesses via video-link is likely to prove a substantial impediment to effective cross-examination of them or to operate to the Defendants’ disadvantage. The observations of each of the members of the House of Lords in Polanski are notable as I see it for three things. First, in making it abundantly clear that they saw nothing inherently unfair in permitting evidence to be given by video-link; secondly, in unhesitatingly accepting (with slightly varying nuances of wording) the views of two very experienced trial judges that it is perfectly possible for cross-examination to be conducted via video-link, in most cases at least, with little impairment of effectiveness; and thirdly, for their readiness to regard the possibility of taking evidence in this way as a positive and welcome benefit of developments in technology: see in particular the speeches of Lord Nicholls at paragraphs 13, 14 and 27; Lord Slynn at 43 to 45; Lord Hope at 68; Baroness Hale at 69 (agreeing with Lord Nicholls and Lord Hope) and 80; and Lord Carswell at 84 and 85. The fact that the outcome, in favour of permitting Mr. Polanski to give evidence by video-link, was achieved only by a majority of three to two turned solely on the public policy point of whether a fugitive from justice should be allowed to give evidence in this way. Polanski was, moreover, a case in which the evidence in issue was that of the plaintiff himself and in which credibility was likely to be very much in issue.

22.      At a more fundamental level, the observations of Baroness Hale in Polanski at paragraph 80 are, I suggest, very much in point:-

“The Civil Evidence Act 1995 and the Civil Procedure Rules 1998 are part of a new approach to civil litigation in this country. The court is in charge of how the dispute which the parties have put before it is to be decided. Technicalities which prevent the court form getting the best picture it can of the case are so far as possible to be avoided. The court is to be trusted to evaluate the weight of the relevant evidence for itself. The evidence is to be given in the most efficient and economical way consistent with the object of doing justice between the parties. New technology such as VCF is not a revolutionary departure from the norm to be kept strictly in check but simply another tool for securing effective access to justice for everyone.”

The English CPR regime is not, of course, part of the Royal Court Rules and there has been no wholesale adoption in this jurisdiction of an equivalent set of practices and procedures, it being for the Court to consider, as and when particular problems arise, whether and to what extent current practice of the English courts may be a useful indicator of the course that Jersey courts should follow. But there are important parallels between the English Civil Evidence Act 1995 and the Civil Evidence (Jersey) Law 2003 as regards hearsay evidence; and the general philosophical approach described by Baroness Hale is one that now informs the Royal Court’s approach to civil litigation here every bit as much as in High Court in England.

23.      For my own part, I accept that in practice receiving the evidence of a witness via video-link introduces an additional layer of logistics that is less than ideal and carries with it a degree of risk of technical hitches of one kind or another. And the fact that interpreters will be required will also mean that the process of giving evidence will be more protracted than it might otherwise be. But arranging for witnesses to take long-haul flights is itself an exercise liable to unexpected disruption by weather, labour disputes and mechanical failure. And interpreters would still be necessary if the witnesses were to attend court in Jersey. As to whether, in practice, the exercise of cross-examination or the court’s ability to judge a witness’s demeanour is or is not impaired by practical difficulties is something that must be left for the Court itself to judge and, if necessary, to make allowance for accordingly.

24.      If the matter is tested by reference to factors relevant to the exercise of the Court’s discretion that I suggested in McCann (whether “there is good reason to do so and it is judged that the interests of justice – as between the immediate parties and in the wider sense of the expeditious and efficient management of litigation – would best be served”), it may be debatable how great the saving in costs will be (though with two witnesses to give evidence in this way, I would be surprised if the saving were not significant) or indeed whether the process will aid the expeditious management of the case. But the dominant consideration as regards the interests of justice in the present case is that the choice in reality is between, on the one hand, allowing these witnesses to give evidence live with the benefit of cross-examination albeit under imperfect conditions and, on the other, receiving their witness statements as hearsay without cross-examination of any kind – given that, whatever the court’s decision, there is no prospect of these witnesses attending the trial in person and nothing that the Plaintiffs can do to change that. On any view, the interests of justice must be better served by adopting the former course.

25.      Too late? Those representing the Plaintiffs have already been made aware of the Court’s view that this application is one that should have been made or at least canvassed with the Court and the Defendants at a much earlier stage in these proceedings. That said, it would be disproportionate on this ground alone to bar the Plaintiffs from raising it at a stage when there is still time in which to make the necessary arrangements, and when the Defendants can hardly claim to be prejudiced by the lateness of the application given that their Advocate would have had to prepare for cross-examination of the witnesses in question in any event had they been willing to make the journey to Jersey.

26.      Inconsistency with Plaintiffs’ earlier stance on Jersey as the forum conveniens? In arguing for Jersey as the appropriate forum for this trial when the matter came before the Court in September 2010 (Birt, Bailiff with Jurats Le Breton and Morgan) Advocate Baker said that he envisaged calling about five witnesses from Brazil, among them Mr. Santoro and Mr. Alves. Had the Defendants known and the Court been told at that stage that these two – and, indeed, other prospective witnesses for the Plaintiffs – would be unwilling to attend a trial in Jersey, the outcome of that hearing might well have been different, says Mr. Steenson, and it is quite wrong that they should now be allowed to depart from that stance with impunity. But there is no reason to suppose that Mr. Baker’s projection at that time was anything other than bona fide: as no doubt was Mr. Steenson’s stated expectation that he would probably need to call at least seven witnesses from Brazil, including members of the Maluf family. In the event, the Defendants now propose to call no witnesses at all, from Brazil or anywhere else, and if this had been known to the Court in September last year it could certainly have done nothing to fortify the Defendants’ case that Brazil was the more appropriate forum for the trial. I am accordingly unimpressed by this objection to the application.

27.      For these reasons, I am satisfied that that the Court has jurisdiction to permit evidence to be given via video-link and that, having regard to the circumstances of the present case as a whole, it would be right for me to exercise my discretion in favour of allowing the evidence of Mr. Santoro and Mr Alves to be given in this way as regards the facts covered in their witness statements.

Authorities

McCann v. Bateman [2005] JRC 027B.

Garcin & Ors. v. Amerindo Investment Advisors Ltd & Ors [1991] WLR 1140.

Royal Court Rules.

English Civil Procedure Rules.

Civil Procedure Act 1997.

Civil Procedure Rules 1998.

Henderson v. Henderson (1843) 3 Hare 100.

Ithaca (Custodians) Ltd. V. Perry Corporation [2003] 2 NZLR 216.

Polanski v. Condé Nast Publications Ltd. [2005] UKHL 10.

English Civil Evidence Act 1995.

Civil Evidence (Jersey) Law 2003.

Republic of Brazil v Durant [2010] JLR 421.