Patriot Group LLC v Hilco Financial LLC and Others
| Jurisdiction | Bermuda |
| Judgment Date | 08 May 2015 |
| Docket Number | Commercial Jurisdiction 2014 No 301 |
| Date | 08 May 2015 |
| Court | Court of Appeal (Bermuda) |
[2015] Bda LR 46
In The Supreme Court of Bermuda
Commercial Jurisdiction 2014 No 301
In the matter of the Evidence Act 1905 (as amended)
And in the matter of Order 70 of the Rules of the Supreme Court 1985
And in the matter of a civil matter now proceeding before the Circuit Court, Cook County, Illinoi, USA
Mr A Potts for the Applicant/US Plaintiff
Mr M Diel and Ms K Tornari for the Respondents/US Defendants
The following cases were referred to in the judgment:
Joliet 2010 Ltd v Goji LtdBDLR [2012] Bda LR 76
Refco Companies v CS First Boston and Standard Bank (London) LtdUNK [2001] EWCA Civ 1733
Netbank v Commercial Money CenterBDLR [2004] Bda LR 46
Golden Eagle Refinery Co Ltd v Associated International Insurance Co [1998] EWCA Civ J021911 (unreported)
First American Corp v ZayedWLR [1999] 1 WLR 1154
Application to set aside Ex Parte Order — Discovery — Witness expenses — Duration of examination
RULING of Kawaley CJ
1. The Applicant, Ms Judith Howe Tucker, (“the Applicant”) applied by Summons dated October 23, 2014 to set aside the ex parte Order granted by me to the Respondents on August 20, 2014 herein (‘the Ex Parte Order’). The Ex Parte Order provided, so far as is material to the present application, that:
‘1. Ms Howe Tucker attend before Nathaniel Turner of ASW Law Limited, Barristers and Attorneys (the “Examiner”), who is hereby appointed Examiner herein…on Wednesday, 27 August, 2014 at 9.00am or such other day, time or place as the said Examiner may appoint, and do there submit to be examined upon oath or affirmation, as the case may be, and that Ms Howe Tucker should be required to respond to the questions set out in the Request and Letter Rogatory.
2. the Examiner shall take down or cause to be taken down in writing the evidence of Ms Howe Tucker…and shall request [sic] Ms Howe Tucker does sign her deposition in pursuance of this Order, and when so completed shall send it, together with this Order, the Request and the Letter Rogatory to Messrs Marshall Diel & Myers Limited…duly sealed, for transmission to the United States Circuit Court of Cook County, State of Illinois…’
2. The Applicant's Summons sought to set aside the Ex Parte Order on three grounds:
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i. ‘The Application represents an attempt to gather information from Ms How Tucker speculatively, for the purposes of pre-trial discovery, rather than for the purposes of obtaining evidence for use at trial…’; and/or
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ii. ‘The Order was not served by the Applicants on Ms Judith Howe Tucker until 28 August 2014, by which date it was too late to be complied with; …’; and /or
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iii. ‘The Applicants failed to make a fair presentation to the Court during the course of the Application…’
3. Alternatively, the Applicant sought the imposition by the Court of various conditions subject to which the examination should be carried out, ‘with a view to avoiding any abuse of the process and/or oppression’.
4. At the conclusion of the hearing I reserved judgment. Two days later I left Bermuda for a long Christmas vacation and the present matter “slipped between the cracks”. Although the parties would have been quite justified in making enquiries as to when judgment would be delivered after the guideline maximum period for delivery of reserved judgments of six weeks1 expired around the end of January, 2015, these enquiries were not made until May 1, 2015. The delay is greatly regretted.
5. The Respondents applied for the Ex Parte Order by an Ex Parte Summons filed on August 13, 2014 and issued on August 20, 2014. That Summons was filed under cover of a letter dated August 13, 2014 which asked for the earliest possible hearing so that the examination could take place on August 27, 2014 in advance of the Illinois Court's discovery status hearing on September 3, 2014.
6. By email dated August 15, 2014, the Assistant Registrar advised the Respondents' attorneys that I would be willing to consider the application on the papers. Assuming in the Respondents' favour that dispensing with an oral hearing was proposed not by their attorneys but by the Court, no request for an oral hearing was thereafter made. A draft Order was forwarded to the Court under cover of a letter dated August 18, 2014, which referenced the earlier email from the Court.
7. The Ex Parte Summons was supported by the (First) Affidavit of Morgan Hirst dated August 13, 2014. The Respondents' Illinois counsel deposed that it was sought to depose the witness pursuant to Order 70 of the Rules of the Supreme Court for the purposes of the Illinois discovery process. He explained that under Illinois law, ‘evidence depositions’ are only taken for witnesses unable to attend trial. However, discovery depositions are used for ‘purely discovery purposes and potential impeachment of witnesses at trial’ (paragraph 6).
8. Because of the distinction between US-style discovery and Bermudian/English-style discovery, it is well recognized under Bermudian law that the documents and witness discovery can only be produced for trial purposes, even if they are sought during the extended US discovery phase. Although the First Hirst Affidavit did not deal with these distinctions and nuances explicitly, he deposed in paragraph 11 as follows:
‘11. The testimony described above is relevant because it speaks to the Plaintiff's beliefs as to the propriety of Defendants' actions …along with the Plaintiff's actions…Such evidence will be used at trial…’
9. The Letter Rogatory which he exhibited to his Affidavit also reflected some appreciation of the distinctive Bermuda law requirement that the evidence sought be intended for use at trial. Paragraph 3 stated as follows:
‘3. From 2003 through 2008, Ms Judith Howe Tucker served as Oversight Controller and Corporate Secretary of The Patriot Group, LLC. The deposition of Ms Judith Howe Tucker is relevant to the matters in issue in [the Illinois
Action] … cannot be obtained from any other source, may be used at trial, if admissible, and cannot be obtained other than with the assistance of the Supreme Court of Bermuda.’
10. The minimum statutory requirements under section 27P of the Evidence Act 1905 are that (1) the request should come from a court of similar jurisdiction, (2) the evidence should be intended for use in civil proceedings, and (3) this Court should be ‘further satisfied that there is an intention that the proceedings should continue to trial’. Case law has elaborated upon these bare requirements, typically in the context of preventing ‘fishing expeditions’ in circumstances where it is actually known or believed that the witness can give or produce evidence which is likely to be relevant at trial.
11. This type of application is not ordinarily dealt with on the papers. The fact that the Respondents' attorneys were content to dispense with an oral hearing and were seeking to conduct an examination hearing which had been fixed for an early specified date signified to me that the application was a non-contentious one. Typically when the agreement of the witness to be deposed has not been obtained in advance, the ex parte order will not fix a date certain for the examination hearing but direct a hearing on such date as the examiner may appoint. In most cases when counsel appear on an ex parte application, their presentation will be fuller or briefer depending on whether the proposed deponent has signified that either:
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i. they will consent to an examination if compelled by the Court; or
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ii. (where, for instance, the witness is under the control of the other party to the foreign proceedings) any Order obtained on an ex parte basis is likely to be carefully scrutinised with a view to mounting any possible challenge.
12. It was against this background that the Ex Parte Order was granted without an oral hearing and based upon the tacit assumption that the Order sought was essentially a consensual one.
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