Voluntary Purchasing v Insurco

• Jurisdiction: Cayman Islands
• Judge: (Smellie, J.)
• Judgment Date: 10 March 1994
• Court: Grand Court (Cayman Islands)
• Date: 10 March 1994

Grand Court

(Smellie, J.)

VOLUNTARY PURCHASING GROUP INCORPORATED

and

INSURCO INTERNATIONAL LIMITED

C.G. Quin for the plaintiff;

R.N.A. Henriques, Q.C. and D.E. Nicol for the defendant.

Cases cited:

(1) Asbestos Ins. Coverage Cases, Re, [1985] 1 W.L.R. 331; [1985] 1 All E.R. 716.

(2) Boeing Co. v. PPG Indus. Inc., [1988] 3 All E.R. 839.

(3) Gross, Re, ex p. Treasury SolicitorUNK, [1968] 3 All E.R. 804; sub nom. Extradition Act 1870, In re, ex p. Treasury Solicitor, [1969] 1 W.L.R. 12.

(4) International Power Indus. NV, Re, [1985] BCLC 128, distinguished.

(5) Penn-Texas Corp. v. Murat Anstalt, [1964] 2 Q.B. 647; [1963] 1 All E.R. 258.

(6) Rio Tinto Zinc Corp. v. Westinghouse Elec. Corp., [1978] A.C. 547; [1978] 1 All E.R. 434, applied.

(7) State of Norway”s Application, In re, [1987] Q.B. 453; [1989] 1 All E.R. 745, applied.

(8) U.S. v. Carver, 1980–83 CILR 297, applied.

(9) Westinghouse Elec. Corp. Uranium Contract, Re, [1978] A.C. 547; [1977] 3 All E.R. 703, dicta of Lord Denning, M.R. applied.

Legislation construed:

Evidence (Proceedings in Other Jurisdictions) (Cayman Islands) Order 1978 (S.I. 1978/1890), Schedule, s.1: The relevant terms of this section are set out at page 88, lines 20–32.

Schedule, s.2(3): The relevant terms of this sub-section are set out at page 88, lines 37–40.

Schedule, s.2(4): The relevant terms of this sub-section are set out at page 88, line 42 – page 89, line 4.

Evidence-assistance to foreign court-examination of documents and witnesses-under Evidence (Proceedings in Other Jurisdictions) (Cayman Islands) Order 1978, Schedule, s.1(b), ‘civil proceedings’ include post-judgment discovery since parties still enjoined over issue and proceedings not yet completed

Evidence-assistance to foreign court-examination of documents and witnesses-party to foreign proceedings can be required to give evidence under Evidence (Proceedings in Other Jurisdictions) (Cayman Islands) Order 1978-procedure not restricted to non-party witnesses

Evidence-assistance to foreign court-examination of documents and witnesses-court to assist as matter of comity to extent permissible under Cayman law-to salvage as much of request as possible without changing nature-may strike out or modify references to documents requested which do not meet specificity required by Evidence (Proceedings in Other Jurisdictions) (Cayman Islands) Order 1978, Schedule, s.2(4)

Evidence-assistance to foreign court-examination of documents and witnesses-under Evidence (Proceedings in Other Jurisdictions) (Cayman Islands) Order 1978, Schedule, s.2(4), may specify documents individually or by compendious description, if evidence establishes existence and likelihood of being in control of witness-where unrealistic to require direct evidence, court may infer existence and likelihood

Evidence-assistance to foreign court-examination of documents and witnesses-inappropriate for court to determine for purpose of oral examination, relevance of issues to foreign proceedings without specific instructions from foreign court

The defendant company sought the discharge of an ex parte order, granted upon an application by letters rogatory from a Texas court, for judicial assistance in obtaining evidence material to proceedings in that court.

Judgment had been obtained by the plaintiff company in the Texas proceedings by default. At the post-judgment discovery stage, the Texas court issued letters rogatory seeking judicial assistance pursuant to the

Evidence (Proceedings in Other Jurisdictions) (Cayman Islands) Order 1978. The order made by the Grand Court provided, inter alia, for the appointment of an examiner to record the oral evidence of the secretary of the defendant company, which had its headquarters in the Cayman Islands, and for the production by the secretary of classes of documents (described in the schedule to the letters rogatory) belonging to the defendant company. It was agreed that the secretary was a party to the Texas proceedings. The order was, by its nature, provisional and the defendant company sought its discharge.

The defendant company submitted that the court had had no jurisdiction to grant the order because (a) the proceedings for which the evidence was to be used were not in the nature of a trial, judgment having already been given by default, and therefore did not amount to ‘civil proceedings’ within the meaning of s.1(b) of the Schedule to the 1978 Order; (b) the secretary of the company was a party to the Texas action and it was the intention of the 1978 Order that it should only be used as a means of obtaining evidence from strangers to an action; and (c) the nature of the request fell short of the standard of specificity required by s.2(4) in that there was insufficient proof of the existence of the documents.

The plaintiff company submitted in reply that the court had had jurisdiction to grant the order because (a) the parties were still enjoined over post-judgment discovery in proceedings which were classified as ‘civil’ under the laws of Texas and the Cayman Islands and therefore the proceedings were ‘civil proceedings’ within s.1(b); (b) there was nothing to suggest that the parent 1975 Act or its precursor, the Foreign Tribunal Evidence Act 1856, provided for the obtaining of evidence only from strangers to the action and consequently the 1978 Order was not so restricted; (c) s.24 of the Schedule to the 1978 Order did not, however, apply to a party to an action, and so the letter of request for evidence to be obtained from the secretary did not need to comply with its requirements; (d) in any event, it was unrealistic to require direct evidence of the existence of the documents requested but reasonable inferences could be drawn as to their existence.

Held, affirming the order with amendments:

(1) The Texas proceedings, which had reached post-judgment discovery, amounted to ‘civil proceedings’ within the meaning of s.1(b) of the Schedule to the 1978 Order since that expression included all the procedural steps taken in the course of proceedings from their institution up to and including their completion; and (a) the proceedings were regarded as ‘civil’ by the laws of Texas and the Cayman Islands; (b) the parties were still enjoined before the court over the issue of post-judgment discovery; and (c) it was not for the court to narrow the definition of ‘civil proceedings’ by reference to the stage an action had reached. Although the Hague Convention on the Taking of Evidence Abroad in Civil and Commercial Matters, which was implemented by the 1978 Order, precluded requests for the execution or enforcement of a foreign

judgment, the present request was merely one for evidence which might lead to later attempts to enforce the judgment, and to refuse to grant assistance in such a case would therefore be to impose an unintended restriction upon the operation of the 1978 Order (page 92, line 7 – page 94, line 37).

(2) The 1978 Order permitted the court to make an order that a party to an action be required to give evidence within the Cayman Islands in response to a request from a foreign court. There was nothing to suggest that the parent 1975 Act or its precursor, the Foreign Tribunal Evidence Act 1856, provided for the obtaining of evidence only from strangers to the action. Moreover, the terms of s.2(4) of the schedule to the 1978 Order, designed to preclude ‘fishing expeditions,’ provided that ‘a person,’ irrespective of status in the suit, should not be required to respond to a request of that nature (page 95, lines 30–42).

(3) The court would therefore assist the Texas court as a matter of comity, to the extent that it was permissible to do so under Cayman law, following the principle that it would salvage what it could of the request, whilst ensuring that it did not change it into something completely different. Accordingly, the references to the documents sought which did not meet the standard of specificity required by s.2(4) of the Schedule to the 1978 Order would be struck out or modified. ‘Particular documents’ had to be specified, either individually or by compendious description, provided that evidence was produced to establish the existence of the documents and that they were likely to be in the control of the witness. In this particular case, it was unrealistic to require direct evidence of their existence, though reasonable inferences could be drawn as to their likely existence and their control by the witness, since they were records of the type of business carried on by the defendant company and of the type of property which it was reasonable to expect that it had acquired. In addition, the witness producing the documents would be required to give oral testimony relevant to the documents and any other oral testimony pursuant to the letters rogatory relevant to the proceedings in Texas, though it would be inappropriate for the court to attempt to determine which matters would be so relevant without specific instructions from the Texas court (page 98, lines 4–37).

SMELLIE, J.: By summons dated October 28th, 1993 the defendant
seeks the discharge of an ex parte order made herein on October 1st, 1993.
The ex parte order was made pursuant to letters rogatory from the 141st
District Judicial Court of Tarrant County, Texas. The order provided,
25	among other things, for the appointment of an examiner to record the oral
evidence of a witness, the secretary of the defendant company, which has
its corporate headquarters in the Cayman Islands. That witness is also
required by the order to produce classes of documents belonging to the
defendant company and described in the schedule to the letters rogatory.
30	The ex parte order was, by its nature, a provisional order (see U.S. v.
Carver (8) (1980–83 CILR at 309)) and it follows that the defendant has
locus standi in these proceedings

...