CUTTLE & ISAACS LIMITED (IN LIQUIDATION) V BANK OF NEW ZEALAND HC CHCH CIV-2003-409-1734

CUTTLE & ISAACS LIMITED (IN LIQUIDATION) V BANK OF NEW ZEALAND HC CHCH CIV-2003- 409-1734 11 October 2005IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY CIV-2003-409-1734BETWEEN CUTTLE & ISAACS LIMITED (IN LIQUIDATION) Plaintiff AND BANK OF NEW ZEALAND Defendant Hearing: 29 September 2005 Appearances: Mr E.D. Wylie Q.C., for Plaintiff/Applicant Mr T. Weston Q.C., and Ms J. Costigan for Defendant/Respondent Judgment: 11 October 2005 at 2.30pmJUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN UPON INTERLOCUTORY APPLICATION BY PLAINTIFF FOR AN ORDER FOR ATTENDANCE BEFORE COURT FOR EXAMINATION[1] This proceeding has a fixture for five days beginning 5 December 2005. [2] The plaintiff's application is made in reliance on r.509 of the High Court Rules. It seeks to have Mr Peter Byrne appear and be examined in respect of matters of which he has refused to make an affidavit – mainly facts relevant to his employment with the defendant, and to his management of the plaintiff's accounts while in that employment. [3] At all relevant times Mr Byrne was employed by the defendant as a business manager, and in that role had responsibilities including managing the plaintiff's banking affairs and accounts with the defendant. Mr Byrne is no longer employed by the defendant.[4] It is not in dispute that Mr Byrne has knowledge of facts relevant to the proceeding, and that he has refused, and still refuses, to make an affidavit as to those facts. [5] The defendant is opposed to Mr Byrne being required to be examined on oath before the Court hearing. It is a hearing in which evidence will be given orally. The defendant has already provided discovery and file notes of Mr Byrne relevant to the plaintiff's accounts. The plaintiff has already levied interrogatories, some of which are relevant to the evidence that can be given by Mr Byrne. [6] The defendant's position is that the only procedure open to the plaintiff in these circumstances is to subpoena Mr Byrne pursuant to r.497 et seq. The defendant submits there is no provision in the rules requiring Mr Byrne to, in effect, give a pre-trial deposition. [7] In my judgment the application must be refused. Notwithstanding the apparent unlimited language of r.509 it does not in my opinion permit what is in effect a pre-trial deposition to be given in an ordinary proceeding commenced by way of statement of claim in which evidence will be given at trial orally, and in which, in the usual course, a witness can only be compelled to give oral evidence by way of subpoena. Indeed, but for the issue of a subpoena Mr Byrne is not in any sense a compellable witness.Reasons[8] It is not in dispute that the requirements of r.509 are made out in this instance. It is accepted Mr Byrne has relevant knowledge and he is unwilling to provide an affidavit for the plaintiff's requested purposes. [9] Rule 509 is brief. Counsel agree that in many respects its application is uncertain. Counsel have drawn my attention to the fact that some Judges have expressed dissatisfaction with its terms. Mr Wylie submits that in its terms it seems to simply provide a useful way of dealing with a person who is able to give relevant evidence, but who refuses to, or is reluctant to make an affidavit, or refuses to statewhat their evidence will be if subpoenaed. Mr Wylie submits there is nothing in the rule itself which limits its application to proceedings where evidence is given on affidavit. He adds: (i) Affidavit evidence may be used, with leave, even in proceedings where evidence is led orally (r.496). (ii) There is nothing in r.509 which limits its application to proceedings where evidence is to be given solely or predominantly by affidavit. (iii)Rule. 496, which deals with evidence at trial and provides that evidence is to be given orally relates only to disputed questions of fact arising at trial. He says that until such time as Mr Byrne makes an affidavit, or is examined on oath, it will not be known whether or not there is any disputed area of fact. [10] Although the defendant has signalled that Mr Byrne will be providing an evidence brief, and it is intended he be called by the defendant to give evidence at trial, that is no guarantee that Mr Byrne will be called to give evidence. [11] The plaintiff says it is not attempting to obtain a pre-trial deposition from Mr Byrne, but rather is seeking to obtain information relevant to the proceedings from a person in possession of that information who has refused to disclose it voluntarily. As Mr Wylie puts it, the r.509 proceedings is essentially similar to pre-trial discovery and the information in Mr Byrne's possession is required so that the plaintiff can finalise its briefs of evidence for the substantive hearing. What Mr Byrne does, or does not say, may shape those briefs. It could indeed dictate how the matter proceeds when it goes to trial. [12] Normally, when an affidavit is made, the other party is not consulted nor involved in the process. Accordingly, Mr Wylie submits, anyone refusing to make an affidavit ought to be compolsorarily required to attend an examination. The material obtained from such process would provide the equivalent of a brief ofevidence which would enable the applicant to decide whether or not to subpoena the witness, with the knowledge of what that person's evidence would be. It follows, in counsel's submission, that it is difficult to see that the opposing party should be entitled to take an active role at all in the process. [13] I think Mr Wylie's submissions can be answered in the following way: (a) Court's dealing with r.509 applications have invariably considered that all parties to the proceeding should be involved. Host Catering Limited v Air New Zealand (1989) 2 PRNZ 126 expressed the view that it was probably not the intention of r.509 to allow oral examination of a witness without the provision of a corresponding right to cross examine. In Auckland City Council v Auckland Electric Power Board(1993) 7 PRNZ 74, the Court made a declaration that the reluctant deponents should swear affidavits. It also ruled that the other party should have leave to cross examine upon them once they were filed. Other examples were cited to me by counsel. To my mind this signals circumspection by the Court in the administration of the process r.509 was designed to facilitate. To view it otherwise would be to allow what is in effect a pre-deposition to be obtained for a proceeding ordinarily one where evidence is given orally. (b) I do not think the plaintiff's proposition fits into the scheme of the rules. There is limited scope to give evidence at the trial of an ordinary proceeding by way of affidavit. Rule 500 allows an affidavit to be given in evidence before a Jury when the parties are in agreement it can be done. Rule 501 provides for the Court to order that evidence be given by affidavit but in limited circumstances that do not apply here. I agree with Mr Weston that r.509 appears as part of rr.503 to 522. It is clear from r.504 that this section of the rules only applies if the parties have agreed that evidence is to be given by way of affidavit or if the rules otherwise provide that evidence is to be given by way of affidavit – as for example in interlocutoryapplications, injunctions, judicial review applications and Parts 4 and 4A applications. The present proceeding does not fall into any of those categories. [14] Counsel have in their submissions identified a number of cases where r.509 applications have been made. Except for one, that of Haycock & Ors v Southern Petroleum No Liability (CL50/99 Auckland Registry, 29 June 2001, Williams J), none appears to involve a case where witnesses have been ordered to be deposed prior to an ordinary witness trial. The other authorities appear to concern summary judgment or judicial review applications. All appear to be affidavit actions. ThatHaycock may provide an exception is unclear, as counsel agree, because it was an application for leave to proceed in a particular way. [15] The first case, in time, cited to me by counsel namely Wallace & Fiord Hospital Contributors v Southland Hospital & Charitable Aid Board (No.2) NZLR 8 1889, p260, encapsulates, to my mind, the purpose for which r.509 was prescribed. At page 262 Williams J said:"Of course, in trial cases, where the evidence is taken viva voce, if you want evidence you must subpoena the witness, and wait till the trial, if he happens to be a hostile witness, before you can know what he has to tell; but in motions and other matters based on affidavit evidence the affidavits are substituted for viva voce evidence, and therefore it is necessary, before the motion is heard, if a witness is hostile, that there should some means of obtaining his evidence in order that his evidence may be before the Court when the matter comes on for hearing."[16] In my view, neither the elapse of time since, nor any changes in the rules has altered this position. [17] I accept Mr Weston's submissions that significant practical difficulties may occur if the application is granted. If Mr Byrne is examined and his evidence is transcribed, and if as Mr Wylie suggests there is no right of cross examination then what status does the transcription have? Does this mean a deposition has the status of an interrogatory by which process ordinarily parties put answers to interrogatories before the Court by way of evidence? Surely r.509 did not intend that to occur. Indeed, to the contrary, McGechan J in Host Catering said obiter that the drafters of r.509 had no intention to exclude cross examination. As Mr Weston submitspresumably, therefore, the defendant has the right to cross examine even though they intend to call him as a witness at the trial in which issues of credibility will be paramount. [18] I think Mr Weston's overall assessment of the oddity of this situation is correct: what is to happen at Trial if the deposition evidence is actually put before the Court? We would then be in the surprising position of having a deposition adduced by way of evidence by the plaintiff with the defendant (most likely) then calling that witness and the plaintiff cross examining him. How is the Court to decide between the two if there is a conflict? Should the deposition, assuming it is to be taken, be taken before the same judicial officer who is to try the case? After all, it is effectively alleged that Mr Byrne acted dishonestly. [19] I am concerned that if I were to rule otherwise there would practicably be no limitation on the range of proceedings for which r.509 could be employed. It would effectively open the law to such pre-trial depositions in all future cases. As it happens the rules do provide some scope for pre-trial depositions as in r.369 and r.376, but as here where one party is endeavouring to gather evidence from the other party's witness the rules provide in other ways the means for gathering information by the discovery and interrogatory procedures. Both such procedures have been used extensively in this case. [20] The application is refused. [21] Costs are awarded to the defendant according to Scale 2B. I will receive memoranda from counsel in the event costs cannot be agreed. ________________________________ Solicitors White Fox & Jones, Christchurch for Plaintiff (Counsel E.D. Wylie QC) Chapman Tripp, Christchurch for Defendant (Counsel T. Weston QC)