Re Jahre Decd. v The Norwegian State (Ministry of Finance)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE MAY,LORD JUSTICE BALCOMBE,LORD JUSTICE WOOLF |
| Judgment Date | 18 December 1987 |
| Judgment citation (vLex) | [1987] EWCA Civ J1218-7 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 87/1311 |
| Date | 18 December 1987 |
[1987] EWCA Civ J1218-7
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(Mr. Justice Kenneth Jones)
Royal Courts of Justice
Lord Justice May
Lord Justice Balcombe
and
Lord Justice Woolf
87/1311
MR. MICHAEL CRYSTAL, Q.C., PROFESSOR J. A. JOLOWICZ and MR. JOHN HIGHAM (instructed by Messrs Linklaters & Paines) appeared on behalf of the Appellants.
MR. ANTHONY BOSWOOD, Q.C. and MR. S. MORIARTY (instructed by Messrs Freshfields) appeared on behalf of the Respondent (The Norwegian Ministry of Finance).
MR. NICHOLAS BRATZA (instructed by Messrs Macfarlanes) appeared on behalf of the Estate of Anders Jahre.
This is an appeal against an order of Kenneth Jones J. of 20th October 1986. He then had before him a summons on behalf of Lord Kindersley and Mr. A.J. Hardman ("the Witnesses") to set aside an ex parte order of Master Creightmore of 2nd April 1986. That summons originally came before Master Prebble who, by consent, adjourned it to the Judge in Chambers under Order 32, rule 12 of the Rules of the Supreme Court.
This litigation has had a long history and an application similar to that before the learned judge was before McNeill J. in December 1985 and on appeal before the Court of Appeal in February 1986. The decision of this court on that occasion has been fully reported as In re State of Norway's Application [1987] 1 Q.B. 633. In the course of his judgment, at pages 456 to 488 of the report, Kerr L.J. set out fully the course which the proceedings had taken until then and all the background facts and allegations. As Kenneth Jones J. said in his judgment presently under appeal, much of what Kerr L.J. said in relation to the litigation is relevant to the instant application and appeal, and I gratefully incorporate it in this judgment by reference and without unnecessarily repeating it.
Nevertheless, for I hope the easier understanding of this judgment I will briefly set out the background to the case. One Anders Jahre was in the 1970s the President of a Panamanian Corporation by the name of Continental Trust Company Inc. ("CTC"). In 1976 Lord Kindersley, a director of Lazards, was appointed one of the advisers to a charitable foundation formed in that year which became the sole owner of the entire issued share capital of CTC. In 1977 Mr. Hardman, an employee of Lazards, was appointed Assistant Secretary of CTC and in 1978 the Treasurer of the Corporation. In the same year Herr Jahre retired as the Corporation's President. He was a wealthy Norwegian shipowner. He died domiciled in Norway on 26th February 1982. In the course of the administration of his estate, on 14th September 1983 the relevant tax authorities raised a supplementary tax assessment on it retrospectively for the years 1970/82 for the sum of NK. 337,999,317 on the basis that the deceased had directly or indirectly been the owner of CTC and that there was reason to disregard the latter's corporate form as a real company.
On 3rd November 1983 the Estate commenced proceedings in the Sandefjord City Court in Norway for an order nullifying the supplementary tax assessment. By what is apparently a parallel procedure, the Estate also appealed to the Norwegian National Tax Committee on 31st January 1984. It was subsequently agreed between the Estate and the State that any evidence given by the proposed Witnesses pursuant to the letters of request to which I shall refer would be presented both to the City Court and also to the NTC. I interpolate that in January 1984 Mr. Hardman retired as the Assistant and Treasurer of CTC.
On the Estate's application to the Norwegian City Court, subsequently supported by the State, the office of the Stipendiary Magistrate in Sandefjord issued a first letter of request to the United Kingdom courts on 5th November 1984 for oral testimony to be given and documents to be produced by the witnesses. The master made the usual ex parte order. The witnesses then issued a summons to discharge it. This came before McNeill J. who upheld the Master's order and effectively granted the joint application of the Estate and the State subject to certain directions which he then gave. The Witnesses then appealed successfully against the learned judge's order. This was the decision of the first Court of Appeal to which I have already referred.
There were seven issues in that first appeal which can be listed as follows:—
A. Civil Proceedings: "civil or commercial matter".
The question was whether the Sandefjord proceedings fell within the ambit of the Evidence (Proceedings in other Jurisdictions) Act 1975.
B. Tax Gathering.
A phrase taken from the speech of Lord Somervell of Harrow in Government of India v. Taylor [1955] A.C. 491, 514. The contention was that compliance with the first letter of request would be contrary to public policy and the settled principles that our courts would not lend their assistance to the enforcement, directly or indirectly, of foreign tax liabilities.
C. Sovereignty.
The contention was that since the Sandefjord proceedings were concerned with the Estate's assessment to tax in Norway, compliance by an English court with the letter of request was precluded by section 4 of the Protection of Trading Interests Act 1980 on the ground that the request, or compliance with it, would infringe the jurisdiction of the United Kingdom or be prejudicial to its sovereignty.
D. Dual Purpose.
This concerned the intention to make the testimony of the Witnesses available to the NTC, in addition to the Sandefjord court.
E. "Fishing".
The contention was that the terms of the first letter of request were far too wide to be an acceptable request for evidence under the Act of 1975, irrespective of certain limitations contained in directions given by McNeill J.
F. Confidentiality.
It was submitted that in all the circumstances the Witnesses should not be ordered to break their duty of confidentiality to their customers by answering the questions raised by the letter of request.
G. Discretion.
It was submitted that whereas issues A and C went to the jurisdiction of our court to comply with the letter of request, issues B, D, and E went to both jurisdiction and to the court's general discretion, whereas issue F went solely to discretion.
In the event the Witnesses failed before the Court of Appeal on issues A, B, C, and D but succeeded on issues E and F. The question whether the decision of what I will continue to call the first Court of Appeal created any precedent or issue estoppel binding on us was the first question argued on the hearing of the instant appeal. To this I shall have to return later.
At this point I set out the relevant provisions of the 1975 Act. The "long title" is in these terms:—
"An Act to make new provisions for enabling the High Court, the Court of Session and the High Court of Justice in Northern Ireland to assist in obtaining evidence required for the purposes of proceedings in other jurisdictions; to extend the powers of those courts to issue process effective throughout the United Kingdom for securing the attendance of witnesses; and for purposes connected with those matters".
The relevant parts of sections 1, 2, 3 and 9 are as follows:—
"1. Where an application is made to the High Court, the Court of Session or the High Court of Justice in Northern Ireland for an order for evidence to be obtained in the part of the United Kingdom in which it exercises jurisdiction, and the court is satisfied—
(a) that the application is made in pursuance of a request issued by or on behalf of a court or tribunal ('the requesting court') exercising jurisdiction in any other part of the United Kingdom or in a country or territory outside the United Kingdom; and
(b) that the evidence to which the application relates is to be obtained for the purposes of civil proceedings which either have been instituted before the requesting court or whose institution before that court is contemplated,
the High Court, Court of Session or High Court of Justice in Northern Ireland, as the case may be, shall have the powers conferred on it by the following provisions of this Act.
2. (1) Subject to the provisions of this section, the High Court, Court of Session and the High Court of Justice in Northern Ireland shall each have power, on any such application as is mentioned in section 1 above, by order to make such provision for obtaining evidence in the part of the United Kingdom in which it exercises jurisdiction as may appear to the court to be appropriate for the purpose of giving effect to the request in pursuance of which the application is made; and any such order may require a person specified therein to take such steps as the court may consider appropriate for that purpose.
(2) Without prejudice to the generality of subsection (1) above but subject to the provisions of this section, an order under this section may, in particular, make provision—
(a) for the examination of witnesses, either orally or in writing;
(b) for the production of documents;…
(3) An order under this section shall not require any particular steps to be taken unless they are steps which can be required to be taken by way of obtaining evidence for the purposes of civil proceedings in the court making the order (whether or not proceedings of the same description as those to which the application for the order relates); but this subsection shall not preclude the making of an order requiring a person to give testimony (either orally or in writing) otherwise than on oath where this is asked for...
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