Omni Marketing Group, Asia Pte Ltd v Transactor Technologies Ltd HC Auckland CIV 2007-404-430

[2008] NZHC 792

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2007-404-430

BETWEEN  OMNI MARKETING GROUP, ASIA PTE LIMITED

Plaintiff

ANDTRANSACTOR TECHNOLOGIES LIMITED

Defendant

Hearing:         8, 12, 14 May 2008

Appearances: Mr McEntegart, Mr Upton & Ms Lynds for plaintiff

Mr Tingey & Mr Vizor for defendant

Judgment:      29 May 2008

Reasons:        29 May 2008

REASONS FOR JUDGMENT OF WINKELMANN J [application that evidence be given by way of video-link]

Simpson Grierson, Auckland (T J Walker/B J Upton) Bell Gully, Auckland (M J Tingey/J Vizor)

Counsel

Liam McEntegart, Auckland

OMNI MARKETING GROUP, ASIA PTE LTD V TRANSACTOR TECHNOLOGIES LTD HC AK CIV 2007-

404-430  29 May 2008

[1]      The defendant, Transactor Technologies Ltd (TTL) applied for an order that the evidence of a proposed witness, Varutm Hongskul, be given by way of video- link from Bangkok, Thailand during the course of a seven day hearing.  It proposed certain  conditions  to   regulate  the   circumstances   in,   and   basis   upon   which Mr Hongskul would give evidence.   The application was heard over several days, before and during the course of the hearing.  At the end of argument I granted the application and said I would give my reasons at a later time, which I now do.

[2]      The application was made under s 103 of the Evidence Act 2006 which provides in material part:

(1)       In any proceeding, the Judge may, either on the application of a party  or  on  the  Judge's  own  initiative,  direct  that  a  witness  is  to  give evidence in chief and be cross-examined in the ordinary way or in an alternative way as provided in section 105.

(3)       A direction under subsection (1) that a witness is to give evidence in an alternative way, may be made on the grounds of -

(a)      the age or maturity of the witness:

(b)the   physical,   intellectual,   psychological,   or   psychiatric impairment of the witness:

(c)      the trauma suffered by the witness: (d)     the witness's fear of intimidation:

(e)the linguistic or cultural background or religious beliefs of the witness:

(f)       the nature of the proceeding:

(g)      the nature of the evidence that the witness is expected to give:

(h)the   relationship   of   the   witness   to   any   party   to   the proceeding:

(i)       the  absence  or  likely  absence  of  the  witness  from  New

Zealand:

(j)       any other ground likely to promote the purpose of the Act.

(4)       In giving directions under subsection (1), the Judge must have regard to -

(a)       the need to ensure -

(i)       the fairness of the proceeding; and

(ii)      in a criminal proceeding, that there is a fair trial; and

(b)       the views of the witness and -

(i)       the need to minimise the stress on the witness; and

(ii)      in a criminal proceeding, the need to promote the recovery of a complainant from the alleged offence; and

(c)      any other factor that is relevant to the just determination of the proceeding.

[3]      Also relevant to the application is s 105(1) which provides:

(1)      A  Judge  may  direct,  under  section  103,  that  the  evidence  of  a witness is to be given in an alternative way so that -

(a)       the witness gives evidence -

(i)       while  in  the  courtroom  but  unable  to  see  the defendant or some other specified person; or

(ii)      from  an  appropriate  place  outside  the  courtroom, either in New Zealand or elsewhere; or

(iii)     by a video record made before the hearing of the proceeding:

(b)       any appropriate practical and technical means may be used to enable the Judge, the jury (if any), and any lawyers to see and hear the witness giving evidence, in accordance with any regulations made under section 201:

…

[4]      The principal ground listed in the application was that giving evidence in person would cause Mr Hongskul considerable disruption and inconvenience.  But in the affidavit sworn by Mr Hongskul in support of the application he took matters beyond that and said that he was willing to give evidence but was unable to travel to New Zealand to do so because of his commitments to his present employer, Reuters. Travelling to New Zealand to give evidence would involve him taking several days off work, which he could not do. TTL also said in support of the application that Mr Hongskul’s  evidence  was  key evidence  in  the  proceeding  and  was  in  some

respects, evidence that no other witness could give, and that the giving of evidence by videolink would not diminish the fairness of the proceeding for the plaintiff.

[5]      The factual context of the proceedings is as follows.  The plaintiff (OMG) is an  investment  holding  company  with  interests  in   various   other   companies, principally in Asia.   Its core business is the provision of in-store advertising and marketing technology for supermarkets and retail outlets.  TTL is also involved in the software industry.   These two parties entered into discussions with a view to forming a joint venture for the development of a loyalty solutions points/rewards programme to be sold to retailers;  the joint venture to be based upon utilisation of TTL’s Thor software programme.  It is common ground that the terms of the joint venture were never agreed upon but that at some point amounts of money were advanced to TTL by OMG.  OMG seeks recovery of that money on the basis that it was, in the absence of a concluded joint venture, a loan.  TTL says that the money was not a loan, but rather part payment of software development services provided by TTL to OMG.  TTL also brings a counterclaim for recovery of the value of the services that have not yet been paid for, on either a contractual or quantum meruit basis. The counterclaim claim greatly exceeds the claim brought by OMG.   An additional  claim  made  by  TTL  is  that  after  the  termination  of  the  relationship between the two parties, OMG misused TTL’s confidential information, in the form of its software and know how.

[6]      Mr Hongskul was initially an employee of a company associated with TTL, but he then joined OMG. His evidence is intended to prove that OMG obtained value by reason of the services provided by TTL and also that on the termination of the relationship, OMG continued to use TTL’s software platform; both factual matters disputed by OMG.   No other witness can give direct evidence on these issues for TTL.   Mr Hongskul’s evidence is also intended to corroborate evidence given by other TTL witnesses.

Grounds of opposition

[7]      OMG opposed the application on the grounds that no proper evidential basis had been established for TTL’s claim that Mr Hongskul could not attend in person to

give evidence. His evidence is important and there was no reason why he should not, like all other witnesses in the proceeding, attend to give evidence in the Courtroom. In  the  absence  of  compelling  evidence  that  Mr  Hongskul  could  not  travel  to New Zealand, fairness required that he give evidence in person before me.   OMG also  argued  that  the  arrangements  proposed  in  the  application  did  not  provide comfort that Mr Hongskul would face sanctions for any knowingly false evidence given by him.

Relevant principles

[8]      The  ground  of  application  under  s  103(3)  relied  upon  by  TTL  was  the absence or likely absence of a witness from New Zealand.  If a s 103(3) ground is made out, then as directed by s 103(4) of the Act, regard must be had to:

a)        the need to ensure the fairness of the proceeding;  and

b)the views of the witness including the need to minimise the stress on the witness, if relevant, and any other factor that is relevant to the just determination of the proceedings.

[9]      In exercising the discretion conferred by s 103 it is also appropriate to have regard to the purpose and principles of the Evidence Act 2006.  On this application, s

6 is a key provision.  Amongst others, it identifies as purposes of the Act, securing the just determination of proceedings by promoting fairness to parties and witnesses (s 6(c)) and avoiding unjustifiable expense and delay (s 6(e)).

[10]     In this case OMG submitted that the s 103(3) ground relied upon by TTL was not made out.  The evidence of Mr Hongskul in support of the application was really no more than that he would not travel to New Zealand to give evidence because it was inconvenient for him to do so.  There was no evidence that he was unable to rearrange his work commitments to facilitate his attendance in New Zealand. OMG contrasted  Mr  Hongskul’s  evidence  as  to  his  unavailability  with  the  evidence provided by the executives in Deutsche Finance New Zealand Ltd & Anor; Deutsche (MMKTRPS) Holdings New Zealand Ltd & Ors v Commissioner of Inland Revenue

(2008) 23 NZTC 21, 758.   In that case an application under s 103 was successful where senior finance executives gave evidence that they could not, by reason of their position, delegate their work  at a  busy time of  the  year.    One  also  had  health problems.

[11]     This application is to be distinguished from that in Deutsche Finance, where the proposed witnesses were employees of one of the parties to the litigation.  In that case the Court would have been concerned to know why the party could not organise its own business affairs to allow its employees or officers to give evidence at trial.

[12]     OMG also relied on a number of other cases to support its proposition that mere inconvenience is not enough (Chu v Han (2003) 17 PRNZ 9 (HC) at [23]; R v McLeod CRI 2005-404-2389 7 June 2006, Williams J and Ra Ora Stud Limited v Colqhoun  (1997)  11  PRNZ  35  3).    But  these  cases  do  not  support  OMG’s proposition.   In Ra Ora Stud Fisher J said that although the unavailability of two witnesses could be regarded as a matter of inconvenience only:

It seems to me that in this day and age, particularly when dealing with key commercial figures, the threshold for allowing evidence of this kind ought not to be set too high.

[13]     In Chu v Han there was nothing put forward to show that there would be any inconvenience to the witnesses in attending in person other than the inevitable disruption that would arise from travelling to New Zealand.  It was on that basis that the application for the taking of evidence by video-link was declined.  The issue in R v MacLeod  arose in  the  context  of  a  criminal  prosecution  where  the  witness concerned was a key police witness.  Williams J was not satisfied adequate steps had been taken to rearrange the witnesses overseas work commitments to enable him to attend.   Given the context of that application concerning the evidence of a police witness in a criminal prosecution, different considerations as to fairness applied than in this case.

[14]     In  any  case  I  consider  that  Mr  Hongskul’s  evidence  went  further  than asserting an inconvenience.  He said that he was unable to be away from work for the time taken to give evidence.  The effect of his evidence was that he would not come to New Zealand.  In assessing TTL’s claim that Mr Hongskul was unavailable

to give evidence it was relevant that he was neither a party to the litigation, nor the employee of a party.   TTL therefore had no ability to control his availability.   It could not reorganise his work commitments to enable him to travel.  Nor could it be assumed that Mr Hongskul or his employer would absorb the cost and inconvenience of his absence from work if the application were declined. TTL could not compel Mr Hongskul’s attendance by subpoenaing him as he is outside the jurisdiction.   I was satisfied that there was a sufficient evidential basis to conclude that a s 103(3) ground was made out.

[15]     It is then necessary to have regard to the matters identified in s 103(4).   In this case what is required is a balancing of the interest of TTL in being able to call the evidence of Mr Hongskul to support its case, against any unfairness to OMG from the alternative method of taking his evidence.  I have no basis to doubt TTL’s claim that Mr Hongskul’s evidence is crucial evidence, and OMG did not challenge that.  It accepted that his evidence is important and said that it was therefore unfair that Mr Hongskul give his evidence by video-link up when all other witnesses would come to New Zealand and give their evidence before the Court.  Simply asserting different treatment is not enough to establish unfairness: something more is needed. When  pressed  on  this  point,  counsel  for  OMG  confirmed  that  Mr Hongskul’s credibility would be challenged through cross-examination.  But even so he did not feel able to argue that Mr Hongskul’s physical absence from the courtroom would impact  adversely on  either  counsel’s  ability to  effectively cross-examine  or  my ability to assess credibility issues.  I did not consider that it would, nor did I consider that merely allowing Mr Hongskul to give evidence in a different way to other witnesses would be unfair.

[16]     The final matter raised by OMG as relevant to the issue of fairness between the parties was what it characterised as the absence of satisfactory arrangements to ensure that  when  Mr  Hongskul  gave evidence  he would  be  subject  to  criminal sanction should he give knowingly false evidence.  I accept that the availability of a sanction for perjury is relevant to the issue of fairness between the parties: the absence of a sanction could undermine the effectiveness of cross-examination of any witness and more generally could mean that the evidence as a whole is unreliable. Mr Chunhakasikarn, attorney of Bangkok has sworn an affidavit confirming that

were a witness to give false testimony at a Court hearing in Thailand, that person would  be  subject  to  criminal  prosecution  for  perjury,  a  charge  that  carries  a maximum penalty of seven years imprisonment.  On the first day of argument of this application OMG challenged whether this evidence addressed the position of a witness giving evidence via video-link-up in a New Zealand proceeding.   Counsel for TTL accepted that issue was not sufficiently clearly addressed in the affidavit and undertook to obtain a clarifying or additional affidavit from Mr Chunhakasikarn. The application was adjourned to allow TTL to provide a further affidavit, although I indicated the application would be granted if satisfactory arrangements could be made to ensure there was a meaningful sanction for perjury.   The hearing commenced.

[17]     On  13  May  2008,  on  the  third  day  of  hearing,  a  further  affidavit  from Mr Chunhakasikarn was filed.  Mr Chunhakasikarn said that the issue of whether the provision in the Thai Penal Code relating to perjury applies to evidence given in Thailand in respect of foreign proceedings is less certain than the issue he had previously addressed.  He said that there have been no Court decisions on the point. However, he described a number of other sanctions that might apply in the event that Mr Hongskul were to give false testimony in these proceedings by way of video- linkup from Thailand.  Pursuant to s 420 of the Thai Civil and Commercial Code, Mr Hongskul could be held civilly liable for any false testimony which he might give under the provisions in that Code relating to “wrongful acts”.  If so, that would enable any person who had suffered loss as a result of Mr Hongskul giving false testimony to recover that loss from him.  Alternatively, pursuant to s 341 of the Thai Penal Code, Mr Hongskul could be prosecuted for any false testimony which he might give resulting in property being obtained in the provisions relating to the “offences of cheating and fraud”.  A charge under s 341 carries a maximum penalty of  three  years  imprisonment,  a  fine  not  exceeding  6,000  Baht,  or  both.    The provisions of s 341 of the Thai Penal Code have not been provided to me.

[18]     Finally, Mr Chunhakasikarn raised the issue  as to whether Mr Hongskul would be committing the offence of perjury in New Zealand.   If so, he could be extradited  to  New  Zealand  to  face  criminal  prosecution  for  perjury under  New Zealand law in relation to any false testimony he might give.

[19]     During the course of discussion in relation to this affidavit I indicated to counsel  that  I  did  not  consider  the  potential  for  civil  liability  was  a  sufficient sanction to give the Court comfort in relation to the reliability of any testimony Mr Hongskul would give.  There was also insufficient information before me as to the elements of the s 341 Thai Penal Code offence.   I asked counsel to consider whether Mr Hongskul would be committing perjury in New Zealand should he give knowingly false testimony.  The application was adjourned as counsel were not in a position to address me in relation to that issue.

[20]     The application was further argued later in the day.  Counsel for OMG agreed that  Mr  Hongskul  would  be  committing  the  offence  of  perjury  under  the  New Zealand Crimes Act 1961 if he gave knowingly false evidence before a New Zealand Court by way of video-link up.  But OMG maintained its objection to the proposed procedure because, it argued, no practical arrangements had been put in place so that there was a meaningful sanction for perjury, and Fisher J had insisted upon such arrangements as a condition of granting the application in the Ra Ora case.

[21]     Counsel could not refer me to any decision in which the jurisdictional issue in relation to the application of the perjury provisions of the New Zealand Crimes Act had been expressly considered in connection with an application for the taking of evidence by way of video-link.  Therefore I did not proceed simply on the basis of OMG’s concession, but considered the issue of the application of the perjury provisions of the Crimes Act in this situation.

[22]     Section 108 of the Crimes Act defines perjury as follows:

(1)       Perjury is an assertion as to a matter of fact, opinion, belief, or knowledge made by a witness in a judicial proceeding as part of his evidence on oath, whether the evidence is given in open Court or by affidavit or otherwise, that assertion being known to the witness to be false and being intended by him to mislead the tribunal holding the proceeding.

Section 108(3) provides that:

Every person is a witness within the meaning of this section who actually gives evidence, whether he is competent to be a witness or not, and whether his evidence is admissible or not.

Subsection (4) defines a judicial proceeding as including a proceeding before any

Court of justice.

[23]     Section 109 of the Act provides that someone who commits perjury is for these purposes, liable to imprisonment for a term not exceeding seven years.

[24]     Section 6 & 7 of the Crimes Act deal with the issue of the territorial reach of the provisions of the Crimes Act.  Section 6 provides:

Persons not to be tried in respect of things done outside New Zealand

Subject to the provisions of section 7 of this Act, no act done or omitted outside New Zealand is an offence, unless it is an offence by virtue of any provision of this Act or of any other enactment.

Section 7 provides:

Place of commission of offence

For the purpose of jurisdiction, where any act or omission forming part of any offence, or any event necessary to the completion of any offence, occurs in New Zealand, the offence shall  be deemed  to be  committed  in  New Zealand, whether the person charged with the offence was in New Zealand or not at the time of the act, omission, or event.

[25]     In Tipple v Pain [1983] NZLR 257 and Collector of Customs v Kozanic (1983) 1 CRNZ 135, the High Court held that “any act or omission forming part of any offence” means act or omission amounting to an actus reus in offence.

[26]     The territorial limitations on the application of the Crimes Act were recently considered by the Supreme Court in R v Walsh [2007] 2 NZLR 109. In that case Ms Walsh had defrauded people by means of forged documents which she then faxed to the victims in New Zealand. She was convicted on a number of counts of forgery. On appeal to the Supreme Court it was held that the basis upon which she had been convicted could not be sustained because at some stage before faxing the copies, she had already committed what would have been the crime of forgery if done within New Zealand. But the Supreme Court went on to hold that there was no doubt that Ms Walsh created the faxed copies in New Zealand, even though she was abroad at the time. Because of that she could then have been charged with a number of offences under the Crimes Act including 266(a) (altering or reproducing

document with intent to defraud) or 266(b) (using altered or reproduced document with intent to defraud) or under s 266(1)(b) (uttering forged documents).

[27]     The Supreme Court noted that this analysis was consistent with a number of other authorities, which I mention as relevant to the issue on this application.  In R v Governor of Brixton Prison, ex p Levin [1997] QB 65, a Russian national had operated a computer in St Petersburg, Russia, to create fraudulent transactions in a bank’s computer in Parsipenny, New Jersey, United States. An English Divisional Court held that the appropriation of funds had occurred in the United States of America. The Court said:

The fact that the applicant was physically in St Petersburg is of far less significance than the fact that he was looking at and operating on magnetic disks located in Parsipenny. The essence of what he was doing was done there . . .

In the case of a virtually instantaneous instruction intended to take effect where the computer is situated it seems to us artificial to regard the insertion of an instruction onto the disk as having been done only at the remote place where the keyboard is situated.

[28]     Another case referred to was R v Winfield (1997) 70 SASR 300 where it was held that a fax sent from Thailand to South Australia was an act performed in South Australia.

[29]     Part of the actus reus of perjury is the making of an assertion of a fact, opinion, belief or knowledge by a witness in a judicial proceeding as part of the witnesses evidence on oath.  The giving of evidence by way of video-link in a Court in New Zealand involves the making of an assertion in a New Zealand Court.  It does not matter that the person giving evidence is situated outside New Zealand.   By participating in a video conference they cause the visual and voice content of their evidence to be projected onto a screen in a New Zealand Court.  Thus the evidence is given in a New Zealand Court in a New Zealand proceeding.  That is the place that the evidence is received and is the place the Tribunal, that may or may not rely on that evidence, is situated.   If the witness knowingly gives false evidence in these circumstances, for the purposes of s 7 of the Crimes Act the actus reus for the offence occurred in New Zealand.

[30]     Although accepting that Mr Hongskul could be liable to a conviction for perjury if he gave knowingly false evidence intending to mislead this Court, and that extradition procedures would be available in Thailand, OMG nevertheless relied upon the case of Ra Ora Stud v Colqhoun HC AK CA8/95, 15 July 1997 as authority for the proposition that something more is necessary, that the Court should insist on practical arrangements to ensure that the witness is exposed to the sanction.  In that case the Judge included the following final condition:

The foregoing orders will be conditional upon the first defendant arranging for  some  means  by  which  the  witnesses  will  be  rendered  subject  to  a sanction for any perjury.   The first defendant is to file and serve a memorandum as to the procedure by which this is to be achieved at least one week before trial.

[31]     It is apparent that the Judge in Ra Ora was proceeding on the assumption that the giving of knowingly false evidence by way of video-link could not constitute the offence of perjury in New Zealand and the condition he imposed has to be read in that context.  Thus the comment at page [4]:

It  seems  to  me  that  although  each  case  must  be  dealt  with  on  its circumstances it will generally be more satisfactory in conventional court proceedings if one could be ensured that a perjury sanction would apply to the evidence received by video-link.

I did not therefore consider that anything more was required in the way of practical arrangements  than  that  Mr  Hongskul  give  his  evidence  on  oath  in  the  manner detailed in the application.

[32]     Finally, in considering TTL’s application, it was appropriate that I take a step back and consider the application within the context of the purposes of the Evidence Act as set out in s 6, and in particular the purpose of promoting fairness to parties and witnesses and avoiding unjustifiable expense and delay.   OMG raised no particular matter which weighed against the grant of the application other than the concern regarding perjury.  That concern having been met, I was satisfied that it was both  fair  and  necessary  that  Mr Hongskul’s  evidence  be  taken  by  video-link. Accordingly orders were made in terms of the notice of application that Barutm Hongskul might give evidence in the proceedings by video-link  from  Bangkok, Thailand subject to the following conditions:

(a)      Mr Hongskul swears his brief of evidence before a notary public and a copy of his sworn brief of evidence is provided to the Court prior to the giving of Mr Hongskul’s evidence.

(b)      A  copy  of  the  paginated  common  bundle  of  documents  is  made available to Mr Hongskul at the video conference and all written materials or exhibits already discovered between the parties that Mr Hongskul is to refer to in the course of his evidence are clearly identified.

(c)      The video-link conference room will not take place at the offices of

Mr Hongskul’s current employer, Reuters Thailand.

(d)      The room for the video conference is to allow a reasonable part of the interior of the room in which Mr Hongskul is to be situated to be shown on the screen, while at the same time retaining sufficient proximity to depict Mr Hongskul.

(e)      Mr Hongskul is to be seated at a plain desk or lectern when giving his evidence.

(f)       Two cameras are to be used for the video conference (including a separate camera and monitor for documents) and that fax facilities are to be available.

(g)      The notary public before whom Mr Hongskul swears his brief of evidence is also to be present at the facility to assist with the implementation of any directions or requests made by the Judge hearing the evidence.

(h)      Aside  from  Mr  Hongskul  and  the  notary  public,  the  only  other persons present in the room are to be those operating the video and fax facilities.

Winkelmann J