Macmillan Inc. v Bishopsgate Investment Trust Plc

JurisdictionEngland & Wales
Judgment Date10 May 1993
Judgment citation (vLex)[1993] EWCA Civ J0510-3
Date10 May 1993
CourtCourt of Appeal (Civil Division)
Docket NumberNo. CHANI 93/0480/B

[1993] EWCA Civ J0510-3





(Mr. Justice Millett)

Before: Lord Justice Dillon Lord Justice Kennedy and Sir Roger Parker

No. CHANI 93/0480/B

Macmillan Inc.
Bishopsgate Investment Trust Plc

LORD IRVINE and MR. M. ROSEN, Q.C. (instructed by Messrs. Herbert Smith) appeared on behalf of the Appellants.

MR. M. BRINDLE Q.C. (instructed by Messrs. Freshfields) appeared on behalf of the Respondents.


( )


A short point is taken on the opening of this appeal that the appeal has been settled. The appeal is brought by the plaintiffs in the action, Macmillan Incorporated, against an order of Mr. Justice Millet of the 18th December, whereby he refused to order a Mr. Haas, who is not a party to the action but was a witness giving evidence on behalf of the second defendants, to produce copies of certain documents in his possession.


It is common ground that leave to appeal was necessary because the order was interlocutory and was refused by the judge and had, therefore, to be obtained by the plaintiffs from the single judge.


They made application for leave to appeal. While that was pending there was an offer by Messrs. Herbert Smiths', on behalf of the appellants to Messrs. Freshfields on behalf of the second defendants, and Mr. Haas in particular, to settle on a "drop hands" basis, namely that the application for leave to appeal be withdrawn, each side bearing its own costs of the appeal and in the court below. There was a counter-offer by the solicitors for Mr. Haas which was to the effect that Mr. Haas' counsel's fee in the court below should be paid by the plaintiffs and that Mr. Haas himself should be released from all further cross-examination at the trial.


That was rejected by Herbert Smiths' following a telephone conversation between Mr. Lawrence, of Mr. Haas' solicitors, Freshfields, and an assistant of Mr. Anderson of Herbert Smiths'.


On the 24th March Mr. Anderson sent a telex to


Mr. Lawrence saying: "Dear Mr. Lawrence, Macmillan-v- Haas: I have taken instructions following your recent telephone conversation with Jill McGlennon, we are not prepared to accept any conditions over and above the simple 'drop hands' type of settlement I outlined and we are accordingly pressing ahead with our application for leave".


The crucial question is whether that fax is to be construed as renewing the offer to settle on the "drop hands" basis, abandoning any appeal with no order as to costs of the appeal and in the court below, leaving further cross-examination of Mr. Haas to take place before the trial judge.


What happened after that was that there was a further telephone conversation, on the 25th or 26th March, between Mr. Lawrence and Mr. Anderson. Neither kept a contemporary note but, on what each has said of it, it does not appear to have taken matters much further.


On the 30th March, Lord Justice Hoffmann granted Macmillan leave to appeal. On the 8th April, having been told that leave to appeal had been granted and having taken further instructions, Freshfields sent a fax to Herbert Smith purporting to accept the "drop hands" offer purportedly contained in the fax of the 24th March. The same day Herbert Smith replied by fax stating: "The offer made by our clients is no longer open".


The crucial question then is: after the rejection of Freshfields' counter-offer, was the offer of a "drop hands" simple type of settlement made afresh in the fax of 24th March 1993? That depends entirely on the words used in the context in which they were used. In my judgment, they do not amount to an offer. They are merely an invitation to treat. Accordingly, there was no offer to be accepted and there has been no compromise of the appeal.


I agree.




This is an appeal by the plaintiff in the action Macmillan Inc., a company incorporated under the laws of the State of Delaware in the USA, pursuant to leave granted by Lord Justice Hoffmann, against an order made by


Mr. Justice Millett on 18th December 1992, in the course of the trial of this action.


The question arose in the course of the cross-examination on behalf of the plaintiffs of a Mr. Haas, who had been called as a witness on behalf of the second defendants, Shearson Lehman Brothers Holdings PLC. In the trial the plaintiffs called for the production, by Mr. Haas, of copies in his possession of transcripts of his private examination, pursuant to section 236 of the Insolvency Act 1986, by the liquidators of a company called "Bishopsgate Investment Management Limited", which has been referred to as "BIM".


BIM is a company which was associated with the late Robert Maxwell. This action is concerned with various activities of Mr. Maxwell and companies associated with him, but BIM is not itself a party to this action.


It is not in doubt that Mr. Haas was examined by the BIM liquidators, pursuant to section 236, and that he has in his possession, in accordance with the usual practice, copies of the transcripts taken at the time of his private examination.


The learned Judge dealt with the matter on the assumption that a subpoena duces tecum had been served on Mr. Haas requiring him to produce the transcripts. It was accepted before the Judge, and in this Court, that the proper test to be applied in deciding whether an order should be made is that which should apply if a subpoena duces tecum had been served on Mr. Haas requiring him to produce the documents. The Judge records that no formal objection had been taken to the absence of such a subpoena which could be served without delay if required.


The Judge records that three objections to the production of the transcripts had been taken on Mr. Haas' behalf. The first was that it was submitted that the application for production was speculative. The second was that there were restrictions imposed upon Mr. Haas by the liquidator of BIM which prevented him from producing the transcripts unless and until the restrictions were lifted. The third was that there is a public interest immunity which operates in favour of persons in the position of Mr. Haas which would prevent the disclosure of the transcripts to third parties, such as Macmillan, without their consent.


As to the second and third points, they are raised in this Court by a Respondent's Notice served on behalf of


Mr. Haas. We have not found it necessary to hear


Mr. Brindle in support of the Respondent's Notice. We have heard argument only on the first point; that the application was speculative. It is right, however, to put on record, since the production of transcripts of private examinations under section 236 is a very topical legal matter at the moment, that in the present case the liquidators of BIM have made it absolutely clear that they have no objection, so far as the liquidation of BIM is concerned, to the production of those transcripts.


The learned Judge directed himself, in relation to the test for allowing something to be produced under a subpoena duces tecum, by referring to the decision of a divisional court of the Queen's Bench Division in Regina -v- Cheltenham Justices, Ex parte Secretary of State for Trade [1977] 1 WLR. 95. In that case Lord Widgery, Chief Justice, with whom Mr. Justice Donaldson, as he then was, and Mr. Justice Boreham agreed, said this:

"In the Lewes Justices case the document in question was an original document. It was a document which, if put before the court, would have been evidence in itself to prove the truth of what it said. The documents with which we are concerned in this case are not in that category at all. They are on their face not admissible evidence in the pending proceedings at all. Their purpose and virtue is simply this. If in the proceedings when they take place, that is to say the trial in the Crown court when it takes place, a witness makes a statement which is contrary to a statement which he has previously made, he may have his attention drawn to that previous statement and be asked to give an explanation of the apparent discrepancy".


We have been referred to criticisms of that decision in the Cheltenham Justices case in the 14th Edition of Phipson on Evidence at paragraph 8-05, where it is set out:

"It is submitted that any document may be made the subject of a subpoena duces tecum if it is or may be relevant to the conduct of the litigation by the party seeking its production".


The Editors continue:

"This apparently unexceptionable proposition is unfortunately at variance with the decision in R -v- Cheltenham Justices".


The formulation in Phipson, that it is or may be relevant to the conduct of the litigation by the party seeking its production, is very wide indeed: so wide that it would cover asking for production of documents merely for the purpose of discovery because, in accordance with the well-known "Peruvian Guano" principle, it is enough for discovery as between parties if the document might lead to a train of enquiry which might assist the party in his conduct of the litigation. In the present case Lord Irvine, for the appellants, has very rightly, in my judgment, disclaimed seeking to put any such very wide scope on the basis on which production of documents on subpoena duces tecum can be ordered.


In the fairly recent case of Marcel -v- Commissioner of Police [1992] 2 WLR. 50, which was concerned with the production of documents on subpoena, I referred at page...

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