" CATCHINORD 3 EVIDENCE - letter of request to Hong Kong - to give jurisdiction. Federal Court Rules, Order 24 Rule 1(b) ADRIAN GEORGE PEArCh and KATHRYN MAREE PEAPOE TRADING AS MISTEP CARS GOLD COAST Vv. SENATOR THE HONOURABLE JOHN BUTTON, MINISTER OF STATE FOR INDUSTRY AND COMMEPCE OF THE COMMONWEALTH Or AUSTRALIA AND ORS QLD G133 OF 1L9R4 PINCUS J. BRISBANE 20 JUNE 1985 mnethey treatw need IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY } OLD G133 of 1984 GENERAL DIVISTON ) BETWEEN : ADRIAN GEORGE PRARCT and KATHRYN MAPLE PEARCE TRADING AS MISTER CARS GOLD COAST Applicants AND: SENATOP THE HONQURABLE JOHN BUTTON, MINISTRR OF STATE FOR INDUSTRY AND COMMEPCE OF THE COMMONWEALTH OF AUSTRALIA AND OFS Respondents PINCUS J. 20 JUNE 1985 oy TEMPORE REASONS FOR JUDGMENT This 15 an appiication by Senator Button ara others, who are respondents to the principal application, for an order that a letter of tequest be sent to judicial authorities ir Hong Kong. The main proceeding 1s an application to review conauct of the respondents in respect of the seizure and detention of six «actor vehicles imported from Hong Kong. For the wurgoeses of this judament I shail call the respondents to the main peocesdinas the applicants, since they are so in respect of the matter immediately under consideration. Les) The applicants seek an order that a letter of request be sent ta the judicial authorities of Hong Kong to take or cause to be taken the evidence of Herbert Adamczyk, the managing director of German Motors Ltd of Hong Kong. The applicaticn 1s apoosea by the respondents. Much of the material sougnt to be relied on in support of the appiication was objected to and I gave a de-ision a yesterday in respect of those objections. T thinr it unnecessary to set out again the details of the evidence which I mentioned in the course of giving my decision on the objections to eviaence Those detaiis are to be taken as incorporated with these reasons. The principal difficulty the application faces is that it has heen clear for a long time that the respondents might well need evidence from Hong Kong. Counsel for the respondent; has pointed to the fact that the principal application began in November 1984 and on 13 December 1984, at a directions hearina, Spender J. mentioned the possibility of a letter of request. Counsel for the present applicants, in response to a request from his Honour as to why the matter should not be set down for teial, said that there was a possibility of an application for a latter of request to issue to authorities in tleng Fong. When the Principal application was heard, beginning on 13 May 1985, no attempt had been made to obtain a letter of request. During the co course of that phase of the hearing, the applicants applisd for, and were granted on terms, an adjournment to attempt to oabtain evidence from Hong Kong. Their intention then was, not toa proceed by way of ietter of request, but to indurte a fersor or persons in Hong Kong to come voluntarily to Australia to give evidence about the matter. That failed. Now, on the eve of resumption of the hearing of the principal procesding, tne question of a letter of request is revived. Although, as counsel for the respondents says, the history ot the matter 15 very much against the applicants, the evidence available from Hong Kong, 1f any can in fact be obtained, gces to the very heart of the matter. The adjournment I granted to enable investigations te be pursued in Hong Kong was granted with great reluctance, since 1 ay)ttm wr a o appeared to we that there was no reasonable excu present applicants being unready. The material said 'so be available in Hong Kong, however, 1f -t be authentic, would ceen likely to be conclusive of what might be called the substantive issue underlying the whole matter: were the goods unrlaytully imported? For the documents which Mr Fitzpatrick claims to have examined there include, in respect of each calevant venicle, a debit note from the vendor to the purchaser showing a higher price than that set out in the sales contract prcduced and sworn to by Mr Peacce. Mr Pearce said nothing in his evidence about any debit note having been issued and, unless Mr Fitzpatrick has Simply invented the whole story, the conclusion that the goods wece imported uniawfully may seem difficult ta avoid. For that reason, the merits of the matter looking at them broadly are less an favour of the present respondents than they were when Ll réiuctantly granted an adjournment of the principal proceeding from 15 May until today. It was then admitted by counsel for the present applicants that chey had no direct evidence of untayful importation, nory was there any suggesticn that documents had been examined ain Hong Kong on behalf of the respondents evidencing unlawful importation. One difficulty about deciding the application at this stage ais that ft 1s unclear what status che affidavit of Mr Fitzpatrick, filed in support of the present application, will have in the principal proceeding. It has heen admitted in the interlocutory arplication only and 1t appears to be evident that an attempt may be made to have it admittea in the principal proceeding. The outcome of that attempt could arfe-t the reesonableness of permitting the present applicants to attempt again to obtain evidence, admissible under the ordinary rujes, of the documents which Mr Fitzpatrick examined. On the whole, however, 1b 1s hetter to at least give an intimation of the likely fate of the present application, at this stage. Before doing so, IT should stress that I have formed no view of a final kind as to whether what Mr Fitzpatrick says 1s true, or what the inference properly to be drawn from his evidence 15 The rea m™ on I have decided to give an intimation of the likely fate of the present application 1s that 1t may assist each side in determining the best course to follow. I have not finally disposed of the application because:- 1. Were L to reject the application, it could in any event be renewed. 2. %rIt 15 possible that the course of events during the continuation of the principal application could change my view as to the justice or ordering that a letter of request 21ssue. 3. Counsel for the present respondents (the applicants in the principal application) has urged upon me the view that I should not merely review the legality of the seizure and detention from the point of view of administrative law, but should finally determine the legality un fact of the importation of the gcods. It may be thac I will find myself unable to co that, 1f the application is pressed, withour having evidence admissible, in accordance with the ordinary rules, from Hong Kong. The reasons I have adopted the view, which I intimate, that it does not seem reasonable to allow the application for a letter of request. are principally expense and delay, althougn IT do not accept that the expense of taking evidence in Hong Kong is likely to be at the level submitted by counsel for the respondents. Tf the evidence to be given there were sericusly contested, undoubtedly the respondents would have to he represented, and that would cost a considerable <um. It 25 umnecessary to say any more on the guestion of delay than 1s set out above; cbviously it 1s a siqnificant factor against the granting of the application. It was argued that I had no power to grant the application, because there is no relevant treaty permitting the issue of a letter of request. No authority was cited in support of the assertion that a treaty 185 necessary. It was said that Order 24 Rule l(b) should be read as subject to an implicit limitation that no letter of request should issue, «ebsent a relevant treaty. In the 1895 work by Hume Williams ana Another entitled "The Taking of Evidence on Commission" the following comment is made at pp.53-54 with respect te the English rule permitting an order that a request to examine witnesses in lieu of a commission be issued. The authors say:- "The origin of this rule is believed to have been an incident which occurred some few years aga, when an eminent Queen's Counsel, who was taking evidence in Wiesbaden under an order of the President of the Probate and Divorce Division in England, and administering the oath to the woeeresses according to the terms of the order, was seized andi thrown into prison by the German authorities, whence he was with difficulty extricated by the representatives of Great Britain. The German authorities consider uta contempt of court for any but theis own officiais to administer an oath within German territory, and Engiish litigants desiring to avoid a similarly abrupt termination to their commission will therefore do well to obtain thetr evidence by means of a letter of request. The only two countries which have as yet officially notified to our Government the fact that the taking of evidence under a letter of request is the only method which they wll sanction within their respective territories are Germany and Spain. The Swiss authorities have, however, made some representations to a like effecc ..." It seems clear, if this account is correct, tnat in its crigin the letter of request procedure was not designed to meet instances in which a treaty had been made; rather the contrarv. A somewhat similar submission failed in the 1.S. Court of Appeals, 9th Circuit, in the case of Shin v. U.S. 555F 24 720. That concerned a request fram South Korea for assis cr ance in procuring Californian financial records. At p.724 of the report one finds:- "Appellant contends that assistance in criminal matters ainvolving a foreign country's currency control laws should, asa matter of policy, be rendered only if there exists a tax treaty between the United States and the requesting counrry. We reject this contention. It finds no support in the lanquage of the Act or in its legislative history, nor has our attention been dravn to any judicial decision so holding." I have not been referred to any statute corresponding toa the Evidence (Proceedings in Other Jurisdictions) Act 1975, which was apparently passed in England cto give effect to the Hague Convention on the Taking of Evidence Aproad in 'Civil or Commercial Matters of 1968. However, 1t does not appear that any treaty 18 necessary to enliven my jurisdiction to make the order soudht. In the result, I do not propose to make any order on the application although I hold that I have power to make one. I merely intimate it is my present intention to refuse the application. Counsel may, 1f they see fit, seek to reopen the matter at the conclusion of the rest of the evidence, which will presumably occur today er tomorrow. Tce 1 . ataly POdlS Are ore ar CATCHWORDS EVIDENCE - dispensation with rules - whethar aprlies arly to Petipheral and formal matters - rejevance of informati-n avallable to Customs as justifying continuing detention of seized goads. PRACTICE - dispensing with rules of evidence. Federal Court Rules, Order 33 Rule 3(b) ADRIAN GEORGE FEARCE and FATHRYN MAREE PRARCE, TRADING AS MISTER CAFS GOLD COAST Vv. 1 SENATOR THE HONOURABLE JOHN BUTTON, MINISTER OF STATE FOR INDUSTRY AND COMMERCE G2 THE COMMONWEALTH OF AUSTRALIA AND ORS QLD G1i33 OF 1984 eIncus J. BRISBANE 21 JUNE 1985 IN THE FEDERAL COUPT OF AUSTRALTA ) DOFENSHAND DISTVICT REGISTRY ) OLD G133 of 1984 GENERAL DIVIETON ) BETWEEN : ADRIAN GEORGE PEARCE and KATHPYN MAREE PE4SPOe TRADING AS MISTER CARS GOLD COAST Applicants AND: 3ENATOR THE HONOURABLE. JOHN BUTTON, MINISTEP OF STATE FOR INDUSTRY AND COMMERCE OF THE COMMONWEALTH OF AUSTPALIA BNE ors Respondents MINUTES OF ORDEP JUNGE MAKING GEDED: PINCUS J. DATE OF ORDER: 24 JUNE 1985 WHEPE MADE: BRISBANE THE COURT OFDERS THAT: i. Compliance with the rules of evidence b dispented with to such extent as 1 necessary to admit the evidenre of Mesers Hume and Fitzpatrick with respect to examination of documents in Hong Kony, as sec ont in detail an the affidavit of tr Fitzpatrick filed on 18 June 1985. mn % r 2. The avidence of Messrs dume and Fitzpatrick, the subject of the first order, 18 admitted only on the issue ot the information available to the respondents with respect to the vehicles. 3. The question whether the evidence shall be admitted on the issue of whether the vehicles were in fact unlawfully imported 1s reserved for further consideration. NCTE: Settlement and entry of orders is dealt with in Order fe of the Feneral Court Rules. {N THE PERERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) QLD G123 of 1944 ' GENERAL DIVICTION ) ii BETWEEN - ADRIAN GEORGE PEARCE and KATHRYN MARE PEARCE TRADING AS MISTER CARS GOLD C3AST APPLLCANTs AND: ; SENATOR THE HONOURABLE JOHN BUTTON, MINISTER OF STATE FOR INDUSTRY AND COMMERCE OF THE CCMMONWEALTH OF AUSTRALIA AND OF Pespondents PINCUS J. 24 JUNE 1985 Ex TEMPORE REASONS FOR JUDGMENT This is an application concerning evidence in proceedings under the Administrative Decisions (Judicial Pevisw) Act 1977. The application is by the respondents, and 15 made under Order 33 Pule 3 which reads as follows: - "The Court may at any stage of the proceedings - (a) dispense with compliance with the cules of evidence for proving any watter which 3s not bona Fide in dispute; or (bh: dispense with compliance with the rules of evidence where such compliance mIghe accasion or involve unnecessary ar unreasonable expense or delay, including, but without limiting the generality sf this power, compliance with the rules relating ta proof of hand-writing or of documents and the proor of tne identity ot parties ar of authority." The respondents desire to have me receive evidence said to fal] within Rule 3(5). I have not peen referred to, nor Lave I founa, any decision concerning the interpretation of that sub-ruie. Although the evidence in the proceedings 15 rather voluminous, 1t 1s necessary for present purposes to give only an outline or its content. The applicants are motor vehicle dealers who have challenged the seizure and detention of six cars imported by them from Hong Keng. The respondents resist the application on the ground that, om the information they have, the seicure ard detention were, ana the latter remains, a proper exercise of power. The applicants produced evidence that the vehicles were lawfully ammorted, and in particular, that the rrice of them disclosed t> the Customs authorities was correct. Mr Tearce has exhibited the celevant sales contracts and the prices shown there support his evidence that he purchased the vehicles fr-im a Hong Ot Kong vendor, German Motors Ltd, at the prices dis:losed tea Customs. Although Mr Pearce has exhibited a number -f aocuments relevant to each vehicle, 1n addition to the salee contract, he has not exhibited any account or tunvoice from che vendor. Recently, Mr Hume, who has been acting aS Sulicitor for the respondents ain the litigation, and a Mt Fitcpatrick from the Customs Department, went to Hong Kong in the hope of obtaining evidence, apparently thinking that a representative of German Motors would be willing to come to Australia to give evidence hefore me. That attempt was unsuccessful, and has resuited in an 3. application for the issue of a letter of request, which i have intimated that 1 presently intend to refuse, on the geounds of expense and delay. Tc is on those same grounds that the teseondents naw urge that there snould be a dispensation with compliance witn tne rules of evidence, under Order 33 Rule 3(b), to Jet in cral evidence of the contents of certain documents said ta have been yiewed by Messrs Hume and Fitzpatrick ain Hong "org. The documents anclude invoices which, 1f authentic, snw that che applicants, Mr and Mrs Pearce, were billed by German Motcrs for sums in excess of those shown 1n the sales contracts in respect of the vehicles the subject of the action. The autnorities in Hong Kong will not release the documents nor permit tne waking of coples. According to the information obtained by Messrs Hume and Fitzpatrick, in -sespect of aach of the first three vehicle, 1 order of time. there was but a single debit note shewing a price stanificantly in excess of that inthe sales contract. In cespect of each of the last three there were, 1t 15 said, two debit notes, one far the sales contract price ana an additional sum. The evidence of Messry Hume and Fitzpatrick, 1f admitted, goes further than dealing with the 51x venicles in question. That 1s, the documents they examined, or say they examined, purport to relate to the importation of a number of vehicles other than those immediately in issue and to show a 4. similar pattern; that is, the evidence shows, 1f arcepted, that there was a consistent pattern of discrepancy between the caies contract price and the debit note price. Me Boulton, for the respondents, says that the documents show that the respondents were operating a racket ain th it] importation of vehicles at fictitious fraces with, the apgarent co-operation of German Motors Ltd. [It would take up too much space to set out the details of what the documents are said ta disclose in full, but 1t 1s desirable to mention three vehicles in particular, The three are not any of the six immediately in issue in the proceedings, but they were the subject of some cross-examination when Mr Pearce was called. He was asked about a diary note, Exhibit 1, which apparently set out prices quoted to him by German Motors in respect of the importation of three vehicles described as a 1978 Transam, a '74 459 SEL, anda '78 280 SE. Mr Pearce s evidence was to the effect that in the column headed I, in Exhibit 1, appeared the cale erice; in the column headed B, which was suggested by the respondent: ta mean balance, appeared the estimated cost of repair of the vericle in Hong Kong. The respondents' suggestion, of course, 1s thar B 1s simply the extra price in addition to that shown in the sales contract. In respect of each of these three vehicles, the debit nete said to have been viewed in Hong Kong corcesponien with the total sum shown in the diary note, Exnibit 1, that 18 the t72°%a sum shown under C. If Mr Pearce's evidence 1S correct, that cannot he correct, for Mr Pearce did not have any of the vehicles repaired in Hong Kong. Further reference to what the documents are sai to disclose appears below, but it 1s convenient now te turn ta the submissions made on behalf of the appiicants roam apparently the first judge asked to use Order 27 Rule 2?(b) 1n any way other than in respect of a peripheral or formal matter. At least, I deduce that from the absence of authority. Coursel for the applicants, Mr Coorer, relied stronaly upon the decision of Pingham J. in H. v. Schering Chemicals Ltd. (1983) i W.L.R. 143. That concerned the construction of Engiish Order 38 Rule 3 which, to set 1t out sufficiently for present purposes, permits the High Court te "order that evidence of any particular fact shall be given at the trial in such manner as may be specified by the order". The rule goes on to give particular instances of tné way in which the power 15 to be exercised, for examvole, 'by statement on oath of information or belief". Bingham 7. said, in reiectinag an application for admission of evidence:- - = "Buc even if I am wrong, I think that tne obje_* of the rule 1s to permit the proof of matters. or to facilitate the proof of matters, which althounah in issue are largely peripheral to the major 18sue in the action, that 1s to facilitate the proof matters which are largely, although "VOC completely, Formal." Here, counsel for the respondents, fir Boulton, pointed out that Order 33 Rule 3(b) 1s differently expressed, and submitted that for that reason the views 1n Schering Chemicals should not pe followed. I am not, myself, able to derive much assistance from the difference in the wording cf the two rules. 6. Indeed, whereas the power given by English Order 38 Rule 3 is ir terms unlimited, this Court's power 1s restricted hy the necessity of showing that compliance "might occasion or involve unnecessary unreasonable expense or delay". Apart from that, it 1s hard to derive anything froma comparison of the wording of the two rules which would support the submission that Order 22 Rule 3(b) was intended to have a more drastic efrect upon the operation of the rules of evidence than the English rule has been held t9 have. Nevertheless, Ido not think I can apply the dictum of Bairngham J. Whether or not 1t 18 correct as a construction of the English rule, it would in mv view be an unwarrantable iaudicial amendment of Order 33 Rule 3/5) to read it as if it had added "but only where the matter sougnt to be rroved is peripheral and largely formal". Had that important limitation been intended, by those who made the rules, no doubt it would have been stated expressly. Tt is true that instances may to be found in whien the courts have devised fetters on discretions conferred bv statute in such a way as significantly to alter the meaning and peration of the provisions conferring the discretions. there does not appear to be anything in the wording of ule 3(b), nor in the context in which that sub-rule appears, nor in the scope or object of the rules read as a whole, to warrant the addition to 1t by a process of interpretation of an important qualification along the lines of that put forward in the Schering case. 7. In my view, Rule 3(b) should be given a construction strictly in accordance with its terms. The only express limitation on the power of dispensation is that which I nave mentioned. It 21s not in dispute that compliance not only might but would involve both considerable expense and delay. Indeed, those matters were strongly urged upon me by counsel on behalf of the applicants, Mr Cooper, in resisting the attempt to have an order aussued that a letter of request be sent to obtain the evidence in accordance with the ordinary practice. Rule 3(b) should not, in my view, be read as subject to any unexpressed exceptions, but as simply requiring that the discretion be exercised in a judicial fashion. In the present circumstances, where documents are sought to be provec in the Yashion mentioned above, the following general considerations arise:- 1. is it probable that evidence from the apparent maker of the documents would be of assistance? Ww Does information in the documents correspond with facts proved in the case by conventional means? us ret) Do the documents appear to come frem reliable source? 8. 4, Is there any other reason for thinking that the documents may have been fabricated? 5. Whose fault 1s 1t that evidence from a conventional source is not available? As to the first four questions, they should, in my view, be answered favourably to the application for dispensation. The apparent maker of che documents is some person by or on behalf of German Motors Ltd. It appears that evidence fron that source 1s unavailable, at least in the sense that the proprietor 1s unwilling to give evidence in this case. Prosecutions have been launched 1n Hong Kong against German Motors Ltd, 1t 15 said, in respect of the importation of some of the vehicles in question. There was talk of a plea of guilty, but the defendant decided to contest the charges. I can think of no good reason for assuming that evidence from that source would be likely to be of any great assistance. secondly, the documents examined. in important respects, match precisely documents already tendered which are not in issue. In particular, the sales contract said fo have been examined in Hong Kong have the same date, model description and price as those already in evidence. Thirdly, the source of the documents is satisfactory in the sense that they were shown to Messrs Hume and Fitzpatrick, it 1s said, by the case officer of the Customs and Excise Department of Hong Kong in respect of the prosecution of German Motors Ltd. It 1s, of course, possible that the case officer or someone else in that Department, fabricated a set of documents for the purposes of the prosecution: stranger things have happened. But there 1s at we 9. least a degree of plausibility in the assertion that the source of the documents is such as to make 1t prohable that they are authentic. Lastly, no other circumstance has been put forward, and I can think of none, making it seem probable that' the documents are other than genuine. As to the question of fault, there is some force in the assertion that it 1s the fault of the respondents that the at evidence cannot be adduced from a conventional source. There was talk a long time ago of a letter of request, and nothing was done about it until, it is my view, too late. On the other hand, 1t is not really clear to me that the letter of request procedure would produce evidence any more reliable than this. In addition, there are two particular matters which have led me to the view that I should admit this evidence. The first is that on the case of the applicants, there was simply no bill, invoice, or debit note at all, as I understand it, in respect of the vehicles. The case is not one in which there are, so to speak, two competing sets of invoices, yet the set of documents held by the prosecution in Hong Kong includes a debit note or notes in respect of every vehicle. If there were a conspiracy to fabricate documents to support a case, then one would have thought the conspirators might have ascertained the important fact that, in accordance with the system operating, no invoices, bills, or debit notes were sent. The very fact that there were debit notes in the documents collected in Hong Kong, whereas Mr Pearce has produced none, is in itself significant. 10. Secondly, it is important to keep inmind the issue raised by the applicants. They challenge the "seizure and continued detention" of the vehicles in question, and the particulars given make it clear that the expression "continued" is used advisedly. Their case 1s that even if (which 15 not conceded) the original seizure was lawful. the detention of the vehicles right up to the present time 1s unlawful. The applicants through their counsel say that on the information available to the Customs officials in this country, the seizure and detention were, and the latter still 1s, improper. That information, however, now includes the recent inspection of documents in Hong Kong. Faced with this difficulty, Mr Cooper on behalf of the applicants, very ably I thought, argued that the central point of the case 1s the seizure. However, I cannot see why the evidence may not be relied upon by the respondents as information in their possession. It is perhaps unnecessary to say so, but I have taken into account in reaching my decision the evidence to date asa whole and the stage which the litigation has reached. It 15 still an open question whether the evidence of Messrs Hume and Fitzpatrick, 1f I accept it, may properly be used in connection with the claim of the applicants to what might be called final relief, that 1s the claim toa declaration that the vehicles are the property of the applicants, rather than having been forfeited. 11. It 1s, I think, enough for present purposes to say that Iwill admit the evidence of Messrs Hume and Fitzpatrick with respect to the examination of documents in Hong Kong and the circumstances surrounding this, in the proceedings for relief brought by Mr and Mrs Pearce. It will be relevant at least to the question of the information available to the respondents, if not to the other point. It should be mentioned that the applicants have foreshadowed, and pursued with at least some show of success to date, the case that there were illegalities attendant upon the geicure and detention. There is in prospect a submission that for what reason all or most of the material obtained should be rejected. The evidence with respect to that matter 1s not complete, nor have I heard counsel on it, so that the exercise of discretion under Order 33 Rule 3(b) must be subject to that presently unresolved contention. The order which I propose to make under Order 33 Rule 3 3 an order that compliance with the rules of evidence be lspensed with to such extent as is necessary to admit the ridence of Messrs Hume and Fitzpatrick with respect to 'amination of documents in Hong Kong, as set out in detail in ae affidavit of Mr Fitzpatrick filed on 18 June 1985. I further direct that the evidence of Messrs Hume and Fitzpatrick, the subject of my order, is for the present admitted on'y on the issue of the information available to the respondents With respect to the vehicles. bos 12. I reserve for further consideration the question whether 1t shall be admitted on the issue of whether the vehicles were in fact unlawfully imported. } certify that this ana the 7! prez. dirg pages are a true copy 6! she reascns for judgment herem of H:s Honour Mr, Justice Pincus whe at Oo. ok / o/ 85 Associate Dated a. bs"