Penn-Texas Corporation v Murat-Anstalt (No. 2)
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE SALMON |
| Judgment Date | 20 April 1964 |
| Judgment citation (vLex) | [1964] EWCA Civ J0420-4 |
| Date | 20 April 1964 |
| Court | Court of Appeal |
In the Matter of the Foreign Tribunals Evidence Act. 1856
[1964] EWCA Civ J0420-4
The Master of the Rolls
(Lord Denning)
Lord Justice Pearson and
Lord Justice Salmon
In The Supreme Court of Judicature
Court of Appeal
From Mr Justice Veale
MR L. CAPLAN, Q. C. and MR BERNARD FINLAY (instructed by Messrs Crawley and de Reya) appeared as Counsel for the Appellants.
MR R. J. PARKER., Q. C. and MR FRANK WHITWORTH (instructed by Messrs Rowe & Maw) appeared as Counsel for the Respondents.
This case is a sequel to the case of Penn-Texas Corporation v. Murat Anstalt, 1964, 1 Queen's Bench, p. 40, which I will call Penn-Texas (No. 1). The Penn-Texas Corporation have commenced an action in the Supreme Court of the State of New York. In order to help their case in that action in New York they want (1) evidence to be taken here in England before a commissioner and a transcript sent over there; and they also want (2) documents to be produced here before the commissioner, and copies sent over there. The New York Court has asked the Courts here to help. It has requested our Courts to make an order for the purpose upon an English Company called English Transcontinental, Ltd., and its two directors, Strauss and Bittlestone. In Penn-Texas (No. 1) the Master made an order that the two directors should give evidence, and no question arises about them. But he made no order against the English Company either to give evidence or to produce documents; and this Court affirmed his decision. The American Corporation have now returned with added material, and ask for an order on the English Company to produce its documents.
The first thing to consider is what was actually decided by this Court in Penn-Texas (No. 1), so far as the English Company was concerned. It was a case under the Foreign Tribunals Evidence Act, 1856. The American Company applied for an order that the English Company should, by its proper officer, attend before the examiner and (1) give evidence on oath, and (2) produce documents. The result of the application was that no order was made at all against the English Company. The reasoning of this Court was on these lines: (i) As to evidence on oath. There was no power in the Court to order a limited company to give evidence on oath. (ii) As to the production of documents. There was power in the Court to order a limited company to produce documents, but only if the documents were specifically identified, (iii) The documents had not been specifically identified. No order should therefore be made.But if documents should be specifically identified, the American Company could renew its application.
The American Company asked for leave to appeal to the House of Lords. Both this Court and the Appeal Committee of the House of Lords refused leave. Note that there was no application by the English Company for leave to appeal: for the simple reason that there was nothing for them to appeal against. No order had been made against the English Company.
The American Company have now remedied the defect in their earlier application. They have specifically identified the documents which they seek. And they request the Court to make an order on the English Company to produce them. The Master and the Judge have made an order for production. The English Company now appeal to this Court. They say that this Court in Penn-Texas (No. 1) were wrong in saying (on the second point) that there was power to order a limited company to produce documents. They say that, just as, under the Foreign Tribunals Evidence Act, 1856, a limited company cannot be ordered to give evidence, so also it cannot be compelled to produce documents.
The first question is whether it is open to the English Company to raise this point at all. Mr Parker says it is res judicata by reason of the second point decided in Penn-Texas (No. 1). Mr Caplan says it is not. He took this instance: Suppose that the Master had proceeded on the same lines of reasoning as the Court of Appeal and had made no order against the English Company. The Master would have ruled, in the course of his judgment, that there was power in the Court to order a limited company to produce documents. Would the English Company, in a subsequent case, be bound by the Master's ruling? Clearly not. The English Company would not be bound by a ruling from which they could not appeal. I think that Mr Caplan is right. In my opinion a previous judgment between the same parties is only conclusive on matters which were essential and necessary to the decision. It is notconclusive on other matters which came incidentally into consideration in the course of the reasoning, see the Duchess of Kingston's case, 1716, 2 Smith's Leading Cases, 13th Edition, 644, 645, and The Queen v. Hatchings (1881) 6 Queen's Bench Division, 300. One of the tests in seeing whether a matter was necessary to the decision, or only incidental to it, is to ask: Could the party have appealed from it? If he could have appealed and did not, he is bound by it, see Badar Bee v. Habib Merican Noordin, 1909 Appeal Cases at p. 623 by Lord Macnaghten. If he could not have appealed from it (because it did not affect the order made), then it is only an incidental matter, not essential to the decision, and he is not bound, see Concha v. Concha (1886) 11 Appeal Cases at p. 552 by Lord Herschell. The ruling by this Court in Penn-Texas (No. 1) (that there was power in the Court to order a limited company to produce documents) was only an incidental matter. It was not essential to the decision. No appeal lay from it. It is not therefore res judicata between the parties. It has only the weight that falls to be attributed to it on the doctrine of stare decisis. c. f. Society of Medical Officers of Health v. Hope, 1960 Appeal Cases at p. 569 by Lord Keith of Avonholm.
I turn to enquire therefore whether the ruling is a binding precedent so that this Court is fecund to follow it, not only between these parties, but also all other parties. Here I would draw attention to a noteworthy change of attitude. The House of Lords no longer regards the reasoning in previous cases as sacrosanct. Witness its striking departure in Public Trustee v. Inland Revenue Commissioners, 1960 Appeal Cates, p. 398, and Midland Silicones Ltd. v. Scruttons Ltd., 1962 Appeal Cases, p. 446. Those cases show that the House will not treat as absolutely binding any line of reasoning in a previous case which was not necessary to the decision: but will regard itself as at liberty to depart from it, if convinced that it was wrong. Apply that to this case. The ruling on the second point in Penn-Texas(No. 1) was not necessary to the decision. The result would have been the same, even if the ruling had "been the other way. The ruling is not therefore absolutely binding, and we are at liberty to depart from it if convinced it is wrong. This is in accord with the statement of Chief Justice Vaughan long ago in 1673 in Bole v. Horton (1673) Vaughan at p. 382: "An opinion given in Court, if not necessary to the Judgment given of record, but that it might have been as well given if no such, or a contrary opinion, had been broached, is no judicial opinion, nor more than a gratis dictum".
We must, therefore, consoler the reasoning on the second point again to see whether it was right or wrong: and all the more so, seeing that there was a difference of opinion upon it.
The whole burden of Mr Caplan's argument was this. Section 1 of the Foreign Tribunals Evidence Act, 1856, is confined to cases where there is a witness who gives testimony. If there is a witness who gives testimony, he can be ordered to produce documents as ancillary to his own testimony, or the testimony of others. But no one can be compelled to produce any documents if he is not a witness or does not give testimony. Hem a limited company cannot give testimony. So also, says Mr Caplan, under this Act it cannot be compelled to produce documents. Now I quite agree with much of Mr Caplan's argument: but it breaks down, I think, when he says that a limited company cannot give testimony. I think that a limited company can give testimony. It can give it by its proper officer. It does so whenever it makes an affidavit of documents or answers interrogatories. It can also do so when it produces documents under a subpoena ducestecum. It may be that a limited company cannot give evidence at large in answer to a subpoena ad testificandum. The first ruling in Penn-Texas (No. 1), if correct, shows that it cannot. But I am clearly of opinion that it can give evidence as to documents in answer to a subpoena duces tecum.
In order to make this good; I would first consider the procedure under a subpoena duces tecum, when it is issued to an individual, not a company. This subpoena was first introduced in the reign of Charles II and has remained unchanged to this day. It is a command addressed by the Sovereign to a named person requiring him to attend at a stated time and place to give evidence and also to produce the documents which are specified. Note it is both to give evidence and to produce documents, For over 150 years the named person was always required to go into the witness box and be sworn on oath, even though he was only called to product documents. His evidence was usually quite formal. He produced the documents and said that he had the custody of the documents and how he came by them. In cross-examination he could be asked any questions concerning their custody, see The King v. The Inhabitants of Netherthong (1814) 2 Maule & Selwyn, 337, 338. In 1819, however, Chief Justice Abbott allowed a roving cross-examination. He ruled that, when a witness under subpoena duces tecum had been sworn as a witness, he could be cross-examined, not only on the custody of documents but also on the case...
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