Allstate Life Insuarance v ANZ Banking Group (No 24)

[1996] FCA 29

NOT FOR DISTRIBUTION

CATCHWORDS

PRACTICE AND PROCEDURE - application for interlocutory injunction restraining applicants from taking deposition of potential witness in the United States of America in relation to issues in these proceedings - effect which participation by other parties in the taking of the deposition may have on their preparation for the forthcoming hearing of these proceedings - whether triable issue of vexation and oppression - balance of convenience - no question of principle.

ALLSTATE LIFE INSURANCE & ORS v ANZ BANKING GROUP & ORS (No 24)

Nos NG 523, 622 and 635 of 1991 and NG 381 of 1994

Lindgren J
Sydney
5 February 1996

IN THE FEDERAL COURT OF AUSTRALIA )
NEW SOUTH WALES DISTRICT REGISTRY )
GENERAL DIVISION                 )
  No NG 381 of 1994

BETWEEN:

ALLSTATE LIFE INSURANCE CO and the parties listed in Annexure A to the third further amended statement of claim.
  Applicants

AND:

AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED ACN 005 357 522 and the parties listed in Annexure B to the third further amended statement of claim.
  Respondents

No NG 523 of 1991

BETWEEN:

ALLSTATE LIFE INSURANCE CO and the parties listed in Annexure A to the third further amended statement of claim.
  Applicants

AND:

AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED ACN 005 357 522 and the parties listed in Annexure B to the third further amended statement of claim.
  Respondents

No NG 622 of 1991

BETWEEN:

ALLSTATE LIFE INSURANCE CO and the parties listed in Annexure A to the third further amended statement of claim.
  Applicants

AND:

AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED ACN 005 357 522 and the parties listed in Annexure B to the third further amended statement of claim.
  Respondents

No NG 635 of 1991

BETWEEN:

ALLSTATE LIFE INSURANCE CO and the parties listed in Annexure A to the third further amended statement of claim.
  Applicants

AND:

AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED ACN 005 357 522 and the parties listed in Annexure B to the third further amended statement of claim.
  Respondents

CORAM:Lindgren J

PLACE:Sydney

DATE:5 February 1996

REASONS FOR JUDGMENT (No 24)
(Motion by Skadden for injunction against applicants - taking
       of deposition of Millard Zimet in Colorado).

There remains slightly less than one minute for me to give judgment in this matter before directions hearings fixed for 9.30 am should take me elsewhere.

Skadden's notice of motion to which these Reasons relate was filed in Court last Thursday 1 February 1996.  The motion was adjourned part heard last Friday afternoon, 2 February 1996, to 8.00 am this morning, Monday.  There was to be evidence by video link-up this morning in the nature of cross-examination of Mr Harwood, the applicants' attorney in New York, and the making of submissions.  The motion was stood over to this
morning on the understanding that the hearing would need to conclude by 9.30 am.

As events turned out, and as I was informed in chambers yesterday by senior counsel for Skadden, a decision was taken over the weekend not to cross examine Mr Harwood.  Apparently it was too late to cancel the arrangement for the video link-up and Mr Harwood was available on screen for cross examination at 8.00 am.  The period of some one and a half hours this morning has been fully occupied with submissions which have just concluded.

I make the foregoing observations, not as a criticism of anyone, but to indicate the pressure under which the motion has had to be dealt with.

The reason for the urgency is that the oral deposition of a potential witness is proposed to be taken this coming Thursday 8 February (US time) in Colorado and if the taking of the deposition is to proceed then and there, Mr A J Sullivan QC and Mr G Sutherland solicitor for Skadden in these proceedings, intend to participate by way of cross examining the potential witness and will need to leave Sydney for Colorado tonight.

Skadden's motion seeks the following substantive orders:

"3.The Applicants be restrained from taking or
causing to be taken or participating in the taking of any oral deposition from Millard Zimet pursuant to the order dated 24 January 1996 made by the United States District Court for the District of Colorado permitting discovery pursuant to 28 USC § 1782 in Miscellaneous Case No 96 x 29.

4.Further or in the alternative, the Applicants be restrained until further order in terms of Order 3."

The hearing has proceeded as an application for the interlocutory relief referred to in para 4 above.  The submissions have canvassed many issues and I have raised further issues with the parties on the hearing this morning.

The United States District Court for the District of Colorado made an order on 24 January 1996, on the ex parte application of the applicants in these proceedings, permitting discovery in the form of the taking of an oral deposition from Mr Millard Zimet, a former employee of Skadden, this coming Thursday, 8 February (US time).  More precisely, oral interrogatories are to be administered before a certified shorthand reporter and notary public pursuant to the Colorado Rules of Civil Procedure at the offices of Cohen, Brame & Smith, Professional Corporation, 1700 Lincoln Street, Suite 1800, Denver, Colorado.

The evidence of Skadden's solicitor, Mr Sutherland, shows that the attendance of himself and Mr Sullivan QC in Colorado would substantially hinder Skadden in the proper preparation of its case for the commencement of the hearing of these (Australian) proceedings on 18 March 1996. 

The parties are, indeed, intensely preparing at the present time for that hearing.  Moreover, these proceedings are currently fixed before me on various dates in the near future for the purpose of the hearing of various motions and directions hearings.  Skadden is involved, directly or indirectly, in all or most of these. 

It is put for the applicants that it should be possible for a law firm of the size of Skadden to arrange for other representation at the taking of the deposition in Colorado.  The evidence of Mr Harwood is that Skadden is the second largest law firm in the United States with more than 1,000 lawyers in the firm.  I am not, however, presently persuaded by the applicants' submission, in this respect although it is possible that I will be on a final hearing.  I can understand that those legal representatives in Sydney who have been, and are, closely involved in preparing Skadden's case for the hearing on 18 March and will have the conduct of that case following that date, may be reasonably thought by Skadden and its legal advisers to be the appropriate lawyers to attend on the taking of the deposition in Colorado. 

There are many more issues involved in this matter than I have time to refer to now.  One is the relationship between the letter of request procedure and the taking of oral depositions of potential witnesses pursuant to unilateral ex parte
applications made to foreign courts by a party to these proceedings (see my Judgment No 18 dated 13 December 1995 in these proceedings).  Another matter is the relationship between the undertaking given by the applicants to this Court on 5 October 1995 not to commence the taking of depositions in the various actions by the applicants against Skadden in the Supreme Court of the State of New York, and the potential for the record of Mr Zimet's oral deposition to be used by the applicants in those actions (see my Judgment No 22 dated 19 January 1996 in these proceedings). 

Another matter is this.  It is common ground that the statement or testimony of Mr Zimet will not be admissible in these proceedings.  There is at least a question, which I have raised with the parties, whether in these circumstances, the procedure under 28 USC § 1782 was available at all.  That section is as follows:

"§ 1782   Assistance to foreign and international tribunals and to litigants before such tribunals

(a)The district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal.  The order may be made pursuant to a letter rogatory issued, or request made, by a foreign or international tribunal or upon the application of any interested person and may direct that the testimony or statement be given, or the document or other thing be produced, before a person appointed by the court.  By virtue of his appointment, the person appointed has
power to administer any necessary oath and take the testimony or statement.  The order may prescribe the practice and procedure, which may be in whole or part the practice and procedure of the foreign country or the international tribunal, for taking the testimony or statement or producing the document or other thing.  To the extent that the order does not prescribe otherwise, the testimony or statement shall be taken, and the document or other thing produced, in accordance with the Federal Rules of Civil Procedure.

A person may not be compelled to give his testimony or statement or to produce a document or other thing in violation of any legally applicable privilege.

(b)This chapter does not preclude a person within the United States from voluntarily giving his testimony or statement, or producing a document or other thing, for use in a proceeding in a foreign or international tribunal before any person and in any manner acceptable to him." (emphasis supplied)

It is at least arguable that the expression "for use in a proceeding in a foreign ... tribunal" bears some such meaning as "for use by a foreign tribunal" or "for use as evidence in a foreign proceeding."  Such a test would not be satisfied by Mr Zimet's proposed testimony or statement.  On the other hand, a contrary view is available: it may suffice, as Mr Harwood has suggested, that the deposition or statement provide material for use by a party's lawyer as ammunition for cross examination in the foreign proceeding.

Yet further matters which were raised and which cannot be explored in the course of this short judgment are the question of the exclusiveness of this Court's jurisdiction in relation to steps directed to the taking of evidence for use in proceedings in it, and the question whether the applicants propose to make applications under 28 USC § 1782 in relation to other potential witnesses.

The applicants, as respondents to Skadden's motion, have raised questions of abuse of process and have made serious allegations in support of a submission that Skadden's motion should be seen as part of an attempt by Skadden to frustrate them in preparing for the hearing on 18 March, and so, as an abuse of the process of this Court.  Skadden has submitted  that even if the applicants' evidence were to be accepted at face value, the test of abuse of process is not satisfied. There is, however, a public element as well as simply an interest inter partes in the resolution of the question raised by the motion.

Having regard to the short time that has been available to consider the matter I think that Skadden has shown on the evidence that there is a triable issue that it would be vexatious or oppressive for the taking of Mr Zimet's deposition to proceed this Thursday.

It seems that there is no irreversible damage by some delay in the taking of the oral testimony or statement of Mr Zimet. I think that the balance of convenience warrants some delay so that the matter can be explored properly. 

In these circumstances, upon Skadden through its counsel giving the usual undertaking as to damages I order that the applicants be restrained until further order from taking or causing to be taken or participating in the taking of any oral deposition from Millard Zimet pursuant to the order dated 24 January 1996 made by the United States District Court for the District of Colorado permitting discovery pursuant to 28 USA §1782 in Miscellaneous Case No 96 X 29;

I also give the following directions:

(a)direct Skadden (applicant on the motion) to file and serve any further evidence in support of the motion by 9 February 1996;

(b)direct the applicants (respondents to the motion) to file and serve any further evidence by 12.00 noon on 13 February 1996;

(c)direct Skadden to file and serve any evidence in reply by 4.00 pm on 14 February 1996;

(d)Stand over the remainder of Skadden's motion to 9.30 am on 15 February 1996 for hearing;

(e)grant liberty to the parties to apply generally on 3 hours' notice; and

(f)reserve generally the question of costs and, in particular, the question of costs of the video link-up.

I certify that this and the preceding 9 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lindgren.

Associate:

Dated:8 February 1996

Heard:       5 February 1996

Place:       Sydney

Decision:     5 February 1996

Appearances:  Mr A J Sullivan QC with Mr S J Gageler and Mr A Bell of counsel instructed by Dibbs Crowther Osborne, solicitors, appeared for Skadden (applicant on the motion).

Mr F M Douglas QC with Mr W G Muddle and Mr D R Stack of counsel instructed by Deacons Graham & James, solicitors, appeared for the applicants (respondents on the motion).