Rafidain Bank v Agom Universal Sugar Trading Company Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE WATKINS,LORD JUSTICE NOURSE,MR. JUSTICE MICHAEL DAVIES |
| Judgment Date | 23 July 1987 |
| Judgment citation (vLex) | [1987] EWCA Civ J0723-1 |
| Docket Number | 87/0779 |
| Court | Court of Appeal (Civil Division) |
| Date | 23 July 1987 |
and
[1987] EWCA Civ J0723-1
Lord Justice Watkins
Lord Justice Nourse
and
Mr. Justice Michael Davies
87/0779
1985 R. No. 328
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(SIR NEIL LAWSON, sitting as a Deputy High Court Judge)
Royal Courts of Justice.
MR. J. SHER, Q.C. and MR. S. NATHAN (instructed by Messrs. Landau & Scanlan) appeared on behalf of the (Plaintiffs) Respondents.
MR. G. LIGHTMAN, Q.C. and MR. P. TALBOT (instructed by Messrs. Boodle Hatfield) appeared on behalf of the (First Defendant) Appellant.
I will ask Lord Justice Nourse to deliver the first judgment.
This is an appeal from a decision of Sir Neil Lawson, sitting as a judge of the Queen's Bench Division, on a question of discovery. The question arises in relation to Order 24, rules 10 to 13, of the Rules of the Supreme Court, which relate to the inspection of documents referred to in pleadings and affidavits.
The facts of this unusual case and the issues to which they give rise can be gathered from the judgments which were delivered in this court on the 18th December, 1986. I do not propose to repeat them.
The plaintiff bank seeks recovery of $12 million paid by it to the first defendant in January 1985. It says that that sum was paid under a mistake procured by fraud. The first defendant says that the payment was a payment of compensation made deliberately, having been authorised or directed by the Government of Iraq pursuant to a cease fire agreement between Iraq and the Patriotic Union of Kurdistan ("the PUK").
The plaintiff bank proceeded under Order 14 and obtained judgment from the master. The late Mr. Justice Skinner allowed an appeal by the first defendant. He gave it leave to defend conditional on the sum of $12 million, which had been paid into court by the second defendant, remaining there. That decision was later affirmed by this court on the occasion already referred to.
In the meantime, the first defendant's affidavits on the Order 14 summons had alleged that there were certain "protocols" in existence which contained or evidenced the agreement by Iraq to pay compensation. Thus in one affidavit it was stated that the protocols "will clearly refer to the agreement to pay compensation"; see the affidavit of Omar Ali Sheikhmous sworn on 28th March, 1985, paragraph 20. It was said that it was hoped and intended that these documents would be forthcoming from Iraq.
The plaintiff bank took steps under Order 24, rules 10 and 11, and on the 27th November, 1986 Master Bickford-Smith made an order pursuant to rule 11(1) requiring the first defendant to produce the protocols and certain other documents referred to in its evidence for inspection by the plaintiff's solicitors not later than 10.30 a.m. on the 9th December, 1986. That order has never been fully complied with, although from time to time the period for compliance with it has been extended. While no concession to this effect is made by the plaintiff bank, I will proceed throughout on the footing that the protocols and other documents are not in the possession, custody or power of the first defendant.
The position in regard to these documents as it stood on the 18th December, 1986 was described by Lord Justice Lawton in his judgment at page 12C of the transcript. Having recorded that two unnamed Kurds had come forward and made statements, he said this:
"In the course of making those statements both Kurds revealed that there were in existence documents supporting the averment that the Iraqi Government had agreed to pay compensation to the Patriotic Union of Kurdistan. Those documents, however, have never been disclosed in this country. Attempts have been made by the plaintiffs to get sight of them. The court has made orders directing the first defendants to produce them but they have not done so. Their explanation is that it has been found impossible to get the documents out of Kurdistan. Individuals can get through the lines but anyone carrying documents who was stopped would be in the gravest danger probably of life. That, say the first defendants, is the reason why the documents have never been produced."
The first defendant's appeal against the master's order came before Sir Neil Lawson on the 5th February, 1987, when it was dismissed, although the time for compliance was extended until the 8th April, 1987. Three further extensions were granted by the same learned judge, but on the 29th June the time finally ran out. On the following day, the 20th June, the plaintiff bank issued a summons, returnable before the master next Thursday, 30th July, seeking an order that the first defendant's defence be struck out and that judgment be entered for the plaintiff bank in default of compliance by the first defendant with the master's order of the 27th November, 1986 as subsequently varied by Sir Neil Lawson. Now the first defendant appeals against Sir Neil Lawson's decision not to interfere with the substance of the master's order. It is said that that order ought never to have been made in the first place.
Two intervening developments must here be mentioned. First, some documents have been produced by the first defendant, although it is conceded that none of them contains or evidences the specific alleged agreement by Iraq to pay the $12 million compensation. Secondly, pursuant to the leave to defend, which was confirmed by this court on the 18th December, the first defendant served a defence in the action on the 15th January. It may be significant that that defence contains no reference to the alleged protocols or to any other of the documents which were referred to in the first defendant's affidavits on the Order 14 summons. The agreement for payment of compensation now alleged by the first defendant is an oral one. It is not alleged that it is either contained in or evidenced by any written document. The heart of the defence is contained in paragraph 4(f):
"During the course of each of the said rounds of talks it was agreed and/or confirmed between the Government of Iraq, and the PUK that in consideration of the PUK continuing and/or agreeing to continue the ceasefire between the Government of Iraq and the PUK
(i) the Government of Iraq would pay to the PUK:
(a) 15,000,000–00 U S Dollars outside Iraq immediately and
(b) a further 1,000,000–00 U S Dollars for each month that the said ceasefire continued;
(ii) that the payment of the said sums of money would be kept secret between them and that the said sums of money would be transferred to the order of the PUK."
The primary submission of Mr. Lightman for the first defendant on this appeal is that the court has no jurisdiction to order discovery of documents referred to in pleadings or affidavits unless those documents are in the possession, custody or power of the party in whose pleadings or affidavits the reference is made. This submission requires the material provisions of rules 10 to 13 of Order 24 to be set out:
"10(1) Any party to a cause or matter shall be entitled at any time to serve a notice on any other party in whose pleadings or affidavits reference is made to any document requiring him to produce that document for the inspection of the party giving the notice and to permit him to take copies thereof."
Rule 10(2) requires the party on whom a notice is served to serve a counter-notice stating a time "at which the documents, or such of them as he does not object to produce, may be inspected at a place specified in the notice, and stating which (if any) of the documents he objects to produce and on what grounds." Rule 11(1) is in these terms:
"If a party who is required by rule 9 to serve such a notice as is therein mentioned or who is served with a notice under rule 10(1)—
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(a) fails to serve a notice under rule 9 or, as the case may be, rule 10(2) or
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(b) objects to produce any document for inspection, or
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(c) offers inspection at a time or place such that,...
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