Arab Monetary Fund v Hashim (No. 7)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE DILLON,LORD JUSTICE NEILL,LORD JUSTICE HIRST |
| Judgment Date | 25 November 1992 |
| Judgment citation (vLex) | [1992] EWCA Civ J1125-6 |
| Docket Number | 92/1140 |
| Court | Court of Appeal (Civil Division) |
| Date | 25 November 1992 |
[1992] EWCA Civ J1125-6
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(MR JUSTICE HOFFMANN)
Royal Courts of Justice
Lord Justice Dillon
Lord Justice Neill
Lord Justice Hirst
92/1140
MR COLIN ROSS-MUNRO and MR HUGO PAGE, instructed by Messrs Landau & Scanlan, appeared for the Appellants (Defendants).
MR CHARLES FLINT, instructed by Messrs Freshfields, appeared for the Respondent (Plaintiff).
The court has before it an appeal by the first defendant in the first of these consolidated actions, Dr Hashim, and his wife and son, the second and eleventh defendants, against paragraph 5 of an order made by Hoffmann J. on 12th May 1992. By that order the judge gave directions on a range of outstanding matters pending the trial of the action which is due to commence in the Chancery Division early next year. By paragraph 5 of the order, which is the only part challenged, he gave directions, purportedly pursuant to R.S.C. Order 38, rule 3, in relation to evidence to be adduced at the trial.
The general outline of the case given to us by counsel is as follows:
The plaintiff, the Arab Monetary Fund ("the A.M.F.") is a body established by Treaty between a large number of Arab States which has been recognised by the courts as a body capable of suing in this country. Dr Hashim was the first Director General of the A.M.F. from 1977 to 1982, and at that time a Mr Stephen and a Dr Mahdi, who are also defendants in the consolidated action, were the Finance Director and Head of the Investment Department or Treasurer of the A.M.F. The A.M.F. claims, so far as Dr Hashim is concerned, that the three men conspired together to use moneys of the A.M.F. for speculative foreign exchange transactions which were concealed, and not disclosed in the books of the A.M.F. It is alleged that the profits from these undisclosed transactions were passed in the early stages to an account at the Luxembourg branch of the Dresdner Bank, which was unquestionably an account of the A.M.F., and later to a dollar account, No.CD 1028–2 at B.C.C.I., Luxembourg, and thence to a private account of Dr Hashim No.1099 at the Geneva branch of an American bank, First National Bank of Chicago.
To this Dr Hashim, his wife and son, (the only defendants with whom we are now concerned) say that the undisclosed foreign exchange transactions were not entered in the books of the A.M.F. because they were not transactions of the A.M.F. at all, but were private transactions of Dr Hashim, Mr Stephen and Dr Mahdi, initially with their own moneys, and not with the moneys of the A.M.F., and subsequently with the profits generated by their earlier transactions. They further assert that the B.C.C.I. Luxembourg was an account of Dr Hashim, and not an account of the A.M.F., or for the benefit of the A.M.F. at all.
In these circumstances it is obvious that the trial will be concerned with a lot of currency and banking transactions. There are also certain precious metal contracts and loans or deposits in issue. But the crucial questions will be whose moneys were being used, and who was the owner of the various bank accounts.
In the earlier stages of these proceedings, when Dr Hashim was acting in person, he gave a notice, not strictly in time, purportedly under R.S.C. Order 27, rule 4, challenging the authenticity of a very large number of the documents disclosed by the A.M.F. That notice was set aside by consent by the order of Hoffmann J., and the time for service by Dr Hashim of a notice under Order 27, rule 4 was extended to 15th June 1992. A fresh notice, which was before us, was duly served on that day.
One of the issues discussed on this appeal is the interplay between Order 27, rule 4 and Order 38, rule 3. In this connection it is as well to have in mind that there are certain documents disclosed by Dr Hashim whose authenticity has been duly challenged by the A.M.F. under Order 27, rule 4. Order 27, rule 4 provides, so far as material:—
"4(1) Subject to paragraph (2)…a party on whom a list of documents is served…shall,…be deemed to admit—
(a) that any document described in the list as an original document is such a document and was printed, written, signed or executed as it purports respectively to have been, and
(b) that any document described therein as a copy is a true copy.
(2) If…the party on whom the list is served [duly] serves on the other party whose list it is a notice stating, in relation to any document specified therein, that he does not admit the authenticity of that document and requires it to be proved at the trial, he shall not be deemed to make any admission in relation to that document under paragraph (1)"
Order 38, rule 3 is in the following terms:—
"3-(1) Without prejudice to rule 2, the Court may, at or before the trial of any action, order that evidence of any particular fact shall be given at the trial in such manner as may be specified by the order.
(2) The power conferred by paragraph (1) extends in particular to ordering that evidence of any particular fact may be given at the trial—
(a) by statement on oath of information or belief, or
(b) by the production of documents or entries in books, or
(c) by copies of documents or entries in books, or
(d) in the case of a fact which is or was a matter of common knowledge either generally or in a particular district, by the production of a specified newspaper which contains a statement of that fact."
The present Order 38, rule 3 has appeared in the Rules of the Supreme Court in the same wording (though not under the same number) since 1954. The statutory authority in force in 1954 for the making of the rule then made was section 99(1) of the Supreme Court of Judicature (Consolidation) Act 1925 which provided:—
"Rules of court may be made under this Act for the following purposes:—
(i) For regulating the means by which particular facts may be proved, and the mode in which evidence thereof may be given, in any proceedings or on any application in connection with or at any stage of any proceedings."
As appears from the judgment of Neill L.J. the antecedents of the present Order 38, rule 3 go back much earlier.
We were referred to two decisions at first instance on the application of Order 38, rule 3.
In the first, Garcin v. Amerindo Investment Advisors Ltd. [1991] 1 W.L.R. 1140, Morritt J. was concerned to stress at 1145 C-D that the particular facts of which evidence was to be given under Order 38, rule 3 were to be set out in the order the court made under the rule. He also said at 1142D, after setting out the terms of the rule:—
"Thus the court has power to determine the manner in which evidence is given but does not, as it seems to me, have power to enlarge the evidence which may be given beyond that which is legally admissible, except possibly in the particular categories set out in paragraph (2)."
In the other case, H. v. Schering Chemicals Ltd. [1983] 1 W.L.R. 143, Bingham J. after indicating that the purpose of the rule might be to permit the giving of secondary evidence instead of what would ordinarily be regarded as the best evidence, went on to say at 147H:—
"I think that the object of the rule is to permit the proof of matters, or to facilitate the proof of matters, which although in issue are largely peripheral to the major issue in the action, that is to facilitate the proof of matters which are largely, although not completely, formal. It is not, I think, the purpose of this rule to permit the adducing on an issue crucial to the outcome, as here, of material which does not rank as evidence, even for purposes of the Act of 1968 and the rules of court."
I respectfully agree with that passage.
In the present case, however, Hoffmann J. took a very much broader view of the function of the rule.
The parties were agreed that an order under the rule ought to be made, and Mr Flint had prepared a form of draft order which identified the particular facts which were to be proved and the manner in which they were respectively to be proved. He also indicated which parts of his draft were disputed by Mr Page on behalf of Dr Hashim. The judge, however, preferred a much wider approach, and in deference to that Mr Flint prepared a draft of the order which the judge actually made.
In the opening paragraph of his judgment the judge said:—
"The use of these [banking] documents at the trial gives rise to two problems: one relates to authenticity and concerns the rules relating to the proof of documents as authentic; the second relates to the facts which the documents may be used to prove and involves the heresay rule."
He then considered the proposition that certain categories of documents might be authorised to be used to prove certain specified facts, but he rejected that as not best calculated to ensure the smooth running of the trial. He continued:—
"Once one formulates categories there is considerable danger of much time being spent on argument as to whether particular facts fall within the category or not. As much time may be taken up on the construction of the order as the adducing of the evidence.
The restriction of the direction to particular categories of documents—namely, those proving banking transactions of various kinds—is not very likely to give rise to those sorts of problems, but the attempt to categorise the purposes for which the documents may be used is likely to do so. I think that it therefore should be avoided if possible."
He therefore concluded that there was no ground for depriving the judge of...
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