Saito Offshore Pty Limited v Wing Hung Printing Company Limited
[2013] NZHC 1183
•22 May 2013
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2008-404-4621 [2013] NZHC 1183
BETWEEN SAITO OFFSHORE PTY LIMITED Plaintiff
ANDWING HUNG PRINTING COMPANY LIMITED
First Defendant
ANDADAPT IDENTIFICATION, LLC Second Defendant
ANDSHORE TO SHORE BV Third Defendant
Hearing: 21 May 2013
Counsel: S J Mills QC and R J Hollyman for Plaintiff
J Hodder QC and L Fraser for Defendants
Judgment: 21 May 2013
Reasons: 22 May 2013
REASONS FOR JUDGMENT OF KATZ J
Solicitors:
Davenports West, Henderson, Auckland
Chapman Tripp, Auckland
Counsel:
S J Mills QC, Auckland
R J Hollyman, Auckland
SAITO OFFSHORE PTY LIMITED V WING HUNG PRINTING COMPANY LIMITED HC AK CIV-2008-
404-4621 [21 May 2013]
Introduction
[1] These proceedings have been set down for a nine day hearing commencing next Monday, 27 May 2013.
[2] Saito Offshore Pty Limited (“Saito”) was formed to offer “source marked” labels and tags for use by its customers based in New Zealand, Australia and the Pacific Islands. Saito alleges that the defendants engaged in a deliberate and ultimately successful plan to acquire the New Zealand and Australian based customers of Saito. Saito says that in doing this the defendants breached both contractual and other legal obligations owed to it. Saito’s case is that John Lau, who will be giving evidence for the defendants at trial, was instrumental in this plan. Mr Lau was a director of Saito, as was another of the defendants’ witnesses, Howard Kurdin.
[3] The defendants sought orders in relation to the evidence at trial of both Mr Lau and Mr Kurdin. In particular an order was sought that Mr Kurdin be permitted to give evidence by video link from Ohio, United States. In addition, a direction was sought that Mr Lau’s evidence be timetabled to be heard (in person) on
31 May 2013. The orders sought by the defendants were opposed by Saito.
[4] In addition, Saito made an oral application at the hearing for an order permitting one of its expert witnesses, Michael Moreau, to give evidence by video link from Chiang Mai, Thailand. That application was not opposed by the defendants.
[5] At the conclusion of the hearing I made orders directing that the evidence of both Mr Kurdin and Mr Moreau were to be given via video link, on the terms set out at [40] below. I also directed that Mr Lau’s evidence be heard on 31 May 2013. The reasons for those orders are set out below.
Application regarding Mr Kurdin’s evidence
Evidence by video link – legal principles
[6] Rule 9.51 of the High Court Rules provides that the ordinary way of giving evidence will be orally at the trial, unless a Court directs otherwise. The commentary on r 9.51 notes that “[n]owadays remote video link is the most common alternative means of giving evidence in civil cases”.1
[7] Sections 103 and 105 of the Evidence Act 2006 provide the jurisdictional basis for the Court to order the giving of evidence via alternative means, including by video link. Section 103 enables a Judge to direct that a witness give evidence in chief and be cross-examined in “an alternative way” (as provided in section 105) on various grounds including that the witness is absent from New Zealand. The Court is also entitled to rely on “any other ground likely to promote the purpose of the Act.” Section 6 defines that purpose as the just determination of proceedings, including by promoting fairness to parties and witnesses.
[8] In Deutsche Finance New Zealand Ltd v Commissioner of Inland Revenue
Stevens J said that:2
Use of technology such as video link communications may well contribute to the just, speedy, and inexpensive conduct of litigation. Such technology enables litigants overseas to be spared the cost and, in some circumstances, the stress of travelling significant distance to give evidence. It also promotes access to justice for a party proposing to call a witness who may not be able to give evidence if required to fund or travel long distances to make an appearance in person.
[9] His Honour further observed that:
[24] In deciding the application in respect of each witness, the first inquiry is whether one of the grounds in s 103(3) has been made out. Counsel for the plaintiffs accept that, once any such ground is made out, the Court will carry out a balancing exercise whereby the ground(s) established and other applicable factors from s 103(3) will be considered, bearing in mind the matters to which regard must be had as set out in s 103(4)(a) to (c). Indeed, counsel for the defendant did not really challenge this approach.
1 McGechan on Procedure (online looseleaf ed, Brookers) at [HC9.51.02]
2 Deutsche Finance New Zealand Ltd v Commissioner of Inland Revenue (2007) 18 PRNZ 710 (HC) at [15].
[25] Such balancing will involve consideration of any expense, stress, and inconvenience in bringing the witness to New Zealand in the present day and age where alternative modes of giving evidence are readily and reliably available, the importance of the evidence the witness is proposing to give, the desirability of hearings being in open Court with the witness being present, and the broader concerns of natural justice and fairness...
[10] In deciding whether a witness should be permitted to give evidence by a video link, the ultimate question is whether this would be consistent with the just determination of the proceedings. As Rodney Hansen J put it in Chu v Han:3
...[T]he overriding consideration is…the interests of justice. If appropriate procedural safeguards can be put in place, evidence may be given by video link provided that unfairness is not caused to any party. This requires a balancing exercise as to whether inconvenience…is outweighed by considerations of fairness to the opposite party.
Discussion
[11] Mr Kurdin lives in the United States and accordingly one of the grounds in s
103(3) is satisfied. I am therefore required to undertake a balancing exercise, taking into account the relevant statutory factors and any other matters I believe to be relevant, in forming a view as to where the interests of justice lie. The key relevant factors in this case are:
(a) “witness issues” including the expense, stress and inconvenience of having to attend trial in New Zealand;
(b)the potential impact of giving evidence by video link on the Court’s ability to assess Mr Kurdin’s credibility;
(c) any unfairness that might arise if Mr Kurdin’s cross-examination was to be split across two days as a consequence of time differences between New Zealand and the United States.
Expense, stress and inconvenience of having to attend trial in New Zealand
[12] Mr Kurdin lives in Ohio, United States. Prior to 2011 Mr Kurdin was the
President and Chief Executive of Shore to Shore Inc, the parent company of the third
3 Chu v Han (2003) 17 PRNZ 9 at [22].
defendant. He will give evidence at trial about his involvement with Saito during
2006 and 2007. His witness statement is relatively short, comprising 7 pages.
[13] Mr Kurdin no longer works for any of the defendants (or any associated company). He has no personal interest in the proceedings, other than perhaps a reputational one. His current employer has no involvement in the litigation and is a competitor of the defendants. Mr Kurdin deposes that attending trial in New Zealand would cause him significant professional disruption. He would need to take unpaid leave from his job. He has an important management meeting on 5 June
2013 which he is not able to reschedule. He says that it is simply unrealistic for him to take several days off work to fly to New Zealand. Mr Kurdin also has several personal and family commitments during the relevant period.
[14] Saito submitted that the reasons advanced by Mr Kurdin to support his non- attendance were far from compelling. He has known of the trial date for almost a year and should have ensured that other commitments did not interfere with the trial. Saito submitted that insufficient detail was provided of his business commitments and that his personal commitments are not weighty.
[15] Inconvenience will inevitably be a matter of degree. I accept, based on Mr Kurdin’s evidence, that it would be commercially and personally inconvenient for him to attend trial in New Zealand. Fisher J’s comments in Ra Ora Stud Limited v Colqhoun 4 are equally applicable here: “I accept that he is a busy man and that the commercial inconvenience of attendance is not to be disregarded and belittled.”
[16] Mr Kurdin has provided a number of genuine and credible reasons as to why he would find travel to New Zealand for the purposes of the trial both difficult and highly inconvenient. The inconvenience of Mr Kurdin having to attend trial in New Zealand is accordingly one factor that needs to be weighed in the balance. He has not suggested that it would be impossible for him to attend trial and that is obviously
also a relevant factor in the overall balancing exercise.
4 Ra Ora Stud Limited v Colqhoun (1997) 11 PRNZ 353 (HC) at 355.
Impact on ability to assess credibility
[17] Saito’s primary ground of opposition to the video link application is that Mr Kurdin will be giving critical and disputed fact evidence and his credibility will be in issue. The Court should therefore have the opportunity to observe him in person.
[18] In Ra Ora Stud Fisher J found that even evidence going to the “very heart of the trial” could be given by video link in a case where it would have been commercially inconvenient for the witness to travel to New Zealand for the trial.5
His Honour noted that his own experience, with the support of authorities as to evidence by video link, suggested that video links provide an adequate opportunity to assess the nuances of the giving of the evidence and in particular credibility. I note that video technology has improved even further in the 16 years since Fisher J delivered that decision.
[19] Indeed it appears to now be widely accepted that the Court's assessment of the credibility of a witness is not materially affected by the giving of evidence by video link, particularly given the quality of modern video link technology. For example, in Ellison Trading Ltd v Liebherr Export AG, Gendall J stated that:6
...the video link medium still presents an adequate opportunity to assess the witness' credibility, especially as in civil cases such as this it will be a judge experienced in such cases who will be assessing the credibility of a witness. Given the burden of proof is on the Plaintiff in this case, if the Judge had any difficulties in regard to [the witness's] credibility or reliability because of any limitations of a video link, then he or she would be inclined to give less weight to it. It could only be to the [Defendant's] detriment rather than against the Plaintiff.
[20] More recently, in Yang v Chen, Allan J summarised the earlier authorities, and concluded that:7
It is now widely accepted that credibility findings may confidently be made in respect of a witness who gives evidence by way of video link.
5 Ra Ora Stud Limited v Colqhoun (1997) 11 PRNZ 353 (HC) at 356.
6 Ellison Trading Ltd v Liebherr Export AG (2002) 17 PRNZ 1 (HC), at [15].
7 Yang v Chen HC Auckland CIV-2007-404-1751, 13 May 2010 at [52].
[21] I also note that the High Court Rules assume that video link evidence is normal in trans-Tasman proceedings.8
[22] The defendants also relied on the judgments of the High Court, Court of Appeal and House of Lords in the English case of Polanski v Conde Nast Publications Ltd,9 to further support their application. In that case Roman Polanski did not wish to travel to the United Kingdom to give evidence, because that would expose him to the risk of being extradited to the United States on unrelated criminal matters.
[23] Despite differing judgments on the other issues in dispute in the case, all of the judges broadly agreed with Eady J that, in most cases, there is very little actual disadvantage or prejudice to either side when video link evidence is used.10 Cross- examination, in particular, “takes place as naturally and freely as when the witness is present in the court room”.11 As Thomas LJ observed:12
In the ordinary run of case, a sufficient reason [for evidence by video link] may easily be shown. If there is sufficient reason, then even in cases where the allegations are grave and the consequences to the parties serious, the giving of evidence by [video link] is now an entirely satisfactory means of giving evidence ...
[24] Lord Nicholls of Birkenhead noted that while an order allowing Mr Polanski to give evidence via video link would be a departure from the norm:13
[T]he extent of this departure from the normal should not be exaggerated. It is expressly sanctioned by the Civil Procedure Rules. The power conferred by the rules is intended to be exercised whenever justice so requires. Seeking a VCF order is not seeking an “indulgence”.
[25] Based on these authorities and my own experience of video link technology, it is my view that Saito's primary objection is misplaced. The Court’s ability to
8 see r 9.67.
9 Polanski v Conde Nast Publications Ltd [2003] EWCA CIV 1573, [2004] 1 WLR
387 and [2005] UKHL 10, [2005] 1 WLR 637
10 See [2003] EWCACiv 1573, [2004] 1 WLR 387, in particular at [11] per Simon
Brown LJ and [60] per Thomas LJ; and [2005] UKHL 10, [2005] 1 WLR 637, in particular at [13]-[14] and [27] per Lord Nicholls of Birkenhead, [43]-[45] per Lord Slynn of Hadley and [68] per Lord Hope of Craighead.
11 [2005] UKHL 10, [2005] 1 WLR 637 at [14] per Lord Nicholls of Birkenhead.
12 [2003] EWCA Civ 1573, [2004] 1 WLR 387 at [60].
13 At [27].
assess Mr Kurdin’s credibility will not be hampered if his evidence is given by video link. Saito will not be prejudiced.
Impact on continuity of cross-examination
[26] The defendants proposed that Mr Kurdin give evidence between 9:00 am and
1:00 pm, to allow for time differences between New Zealand and Ohio. Saito is concerned that the consequence of this is that if Mr Kurdin’s cross-examination is not concluded in that time frame it will have to take place over two successive mornings, with possibly another witness interposed in between. It was submitted that splitting the cross-examination in this way would be “unjust and unfair”. In my view however that risk can be minimised by appropriate procedural directions.
Conclusion on video link application
[27] I was satisfied that, taking all of the above matters into account, it was appropriate for an order to be made that Mr Kurdin’s evidence be given by video link.
[28] Mr Kurdin and the defendants should not have to incur the expense and inconvenience of bringing Mr Kurdin to New Zealand to attend trial. He does not reside in New Zealand. His evidence, while important, is relatively short (7 pages). It will be professionally and personally inconvenient for him to have to attend trial in person. The Court will not be compromised in its ability to assess his credibility if he gives evidence via video link. The order sought will not compromise the just determination of the proceeding.
[29] In order to minimise the risk of his cross-examination being disrupted I directed that the Court the will commence at 9:00 am on 4 June 2013 and Mr Kurdin is to be available until 3:00 pm NZ time on that date (which I understand to be
11:00 pm in Ohio). This will give Saito the equivalent of close to a full day’s
hearing time to cross-examine Mr Kurdin, should that prove necessary.
Mr Lau
[30] Mr Lau is a key witness. He is resident in Hong Kong and Shanghai, China. He controls a number of commercial entities in those cities. Mr Lau deposes that he is required to chair important Wing Hung Group board meetings on certain days during the course of the trial. In order to accommodate those commitments Mr Lau has requested that his evidence be scheduled for hearing (in person) on Friday
31 May 2013. In order to maximise the time available for cross-examination a direction was also sought that his witness statement (17 pages in length) be taken as read, although the defendants advised that this was merely a suggestion and did not press the issue.
[31] The defendants submitted that Mr Lau and the defendants should not have to incur the inconvenience and business disruption of requiring Mr Lau to attend the trial in New Zealand for an unnecessary and uncertain length of time, particularly given that Friday 31 May 2013 is immediately prior to Queen’s birthday weekend.
[32] Saito opposed the directions sought, on the basis that it would be unjust and unfair to Saito for its counsel to be limited in the time available for cross-examination of a key witness. In essence the concern is that one day may be insufficient time for cross-examination of Mr Lau to be concluded.
[33] In relation to the suggestion that Mr Lau’s witness statement be taken as read, Saito submitted that it would be unjust and unfair for it and the Court to be deprived of the opportunity to observe Mr Lau giving his evidence in chief.
[34] The trial has been set down for nine days. There are fourteen witnesses, seven for each party. It seems likely that approximately three days of hearing time will be spent on opening and closing addresses, leaving six hearing days for 14 witnesses. In that context I am somewhat concerned at the suggestion that Mr Lau’s evidence may take more than a full day.
[35] I suspect that there is a real possibility that Mr Lau’s evidence will be able to be completed in a day, particularly if his 17 page witness statement is taken as read. There can be no guarantees however and, due to his business commitments, Mr Lau
has requested a direction that will provide him with some certainty around timing. I accordingly directed that Mr Lau’s evidence is to be heard on 31 May 2013. That is not, however, intended to place constraints on the length of the plaintiff’s cross- examination of Mr Lau. I indicated that if cross-examination was not completed on
31 May 2013 it would be necessary to explore alternative arrangements such as the Court sitting on Saturday 1 June 2013 or Mr Lau’s cross-examination being concluded via video link.
[36] For the reasons outlined, I was satisfied that it was appropriate to direct that
Mr Lau give evidence on 31 May 2013.
[37] As for Mr Lau’s witness statement being taken as read, if that is to anyone’s prejudice it is more likely to be the defendants, as the party calling him. It will not in my view prejudice Saito. Indeed I would urge the parties to discuss whether other witness statements may also be able to be taken as read. In this context I refer to the Minute of the Chief High Court Judge, Justice Winkelmann, dated 23 April 2013. Her Honour noted that the trial duration is nine days and that if the proceeding were to require more time it may be necessary to adjourn it. Her Honour urged the parties to “discuss what agreements can be reached to enable the proceedings to be dealt with in the 9 days available.”
Mr Moreau’s evidence
[38] In a Memorandum filed the day before the hearing, Saito advised that it intended to seek an order that one of its expert witnesses, Michael Moreau, give evidence by video link from Chiang Mai, Thailand. No formal application was filed and no supporting evidence was provided as to the reasons for Mr Moreau’s unavailability to attend trial. I understand, however, that he is an expert witness whose evidence is limited in scope.
[39] The defendants did not oppose the application and I granted it accordingly, by consent.
Orders made
[40] At the conclusion of the hearing on 21 May 2013 I made the following orders:
(a) I direct, pursuant to r 10.25 of the High Court Rules, that the evidence of Howard Joseph Kurdin is to be given by video link from Ohio, USA, commencing at 9:00 am on 4 June 2013 and concluding (at the latest) at 3:00 pm (New Zealand time). The witness will be sworn or affirmed by the High Court Registrar. The expenses are to be borne by the defendants. The defendants are to arrange for a bundle of documents and exhibits to be made available to the witness for cross- examination purposes. Counsel is to make the necessary arrangements with Ms Aarni Singh, the court officer responsible for video links.
(b)I direct, pursuant to r 10.25 of the High Court Rules, that the evidence of Michael Moreau is to be given by video link from Chiang Mai, Thailand. The witness will be sworn or affirmed by the High Court Registrar. The expenses are to be borne by Saito. Saito is to arrange for a bundle of documents and exhibits to be made available to the witness for cross-examination purposes. Counsel is to make the necessary arrangements with Ms Aarni Singh, the court officer responsible for video links.
(c) Mr Lau’s witness statement is to be taken as read.
(d) Mr Lau’s evidence is to be given on 31 May 2013, commencing at
9:00 am. If his evidence is not concluded by 6:00 pm on that day then it may be necessary for the Court to sit the following day or for cross- examination to be concluded by video link the following week. That will need to be resolved at trial.
(e) Costs of the application are reserved.
Katz J
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