England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

IN THE MATTER OF THE EVIDENCE (PROCEEDINGS IN OTHER JURISDICTIONS) ACT 1975
AND IN THE MATTER OF THE HAGUE CONVENTION OF 18TH MARCH 1970 ON THE TAKING OF EVIDENCE ABROAD IN CIVIL OR COMMERCIAL MATTERS
AND IN THE MATTER OF A CIVIL PROCEEDING NOW PENDING BEFORE THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA (SAN JOSE DIVISION) ENTITLED AS FOLLOWS:
Case No. 15-cv-2220-RMW-HRL

		Royal Courts of Justice Strand, London, WC2A 2LL
		26/07/2016

Senior Master Fontaine:

1. This is the hearing of the following applications:

i) Application of the Applicant/Defendant and Plaintiffs-in-Counterclaim ("The Autonomy Parties") dated 18 April 2016;

ii) Application of the Plaintiff ("Microtech") dated 2016;

iii) Application of the Non Party/Respondent ("Mr Hussein") dated 11 May 2016.

2. The following witness statements were filed:

i) Toby Philip Robinson dated 18 April 2016 ("Robinson 1")

ii) Ian Burrell Hammond dated 11 May 2016 ("Hammond 1")

iii) Toby Philip Robinson dated 27 May 2016 ("Robinson 2")

iv) James Milton Ringer dated 7 June 2016 ("Ringer")

v) Ian Burrell Hammond dated 10 June 2016 ("Hammond 2").

3. References to documents in the bundles filed for the hearing are in the following format: [bundle/tab/page/paragraph].
4. The Autonomy Parties are the Defendants in proceedings in the US District Court for Northern California ("the US proceedings") brought by MicroTechnologies, LLC ("MicroTech"). The Autonomy Parties have brought a Counterclaim in those proceedings. By Letter of Request dated 16 March 2016 District Judge Ronald M. Whyte of the US District Court requested that Mr Hussein be required to attend an examination to give evidence for the purposes of the trial of the above action in California. The trial is due to take place in January 2017.
5. By their application, the Autonomy Parties seek to give effect to the Letter of Request. Mr Hussein opposes the application, and has cross-applied for other relief. MicroTech adopts a neutral stance as to whether an examination should be ordered, but contends that, if it is, the time for examining Mr Hussein should be split equally between the Autonomy Parties and MicroTech.
6. The following issues arose for determination:

i) whether the hearing should proceed in private (with consequential restrictions);

ii) whether the Court should give effect to the Letter of Request; and

iii) if the Court gives effect to the Letter of Request, what directions should be given about the conduct and status of the examination.

7. I determined, in respect of the first issue, that the hearing should not be heard in private. This judgment deals with the second issue.

Background to the Applications

8. The following information appears in the witness statements and/or skeleton arguments submitted by the parties, and is summarised as necessary to explain the context of the issue for determination.
9. The Autonomy Parties were, at the material time, subsidiaries of an English company now known as Autonomy Corporation Limited (together with its group, "Autonomy"). Autonomy was founded by Dr Michael Lynch, who became its Managing Director and Chief Executive Officer, with Mr Hussein serving as Chief Financial Officer. It carried on a software business. Its core product, provided tools for analysing "unstructured" data (i.e. data that has not already been organised into database entries).
10. Until November 2011, Autonomy was a publicly listed company, trading on the London Stock Exchange. It regularly issued information to the market about its financial performance, including by way of quarterly reports and annual accounts.
11. In November 2011, Autonomy was acquired by a subsidiary of Hewlett-Packard Company (together with its group, "HP") for a total price of about £7.15 billion. It is common ground that Mr Hussein realised about £6 million on the disposal of his shares and share options in Autonomy.
12. In late 2012, HP announced that it had discovered serious irregularities in the conduct of Autonomy's business pre-acquisition and, in particular, in its published financial information. One of the irregularities alleged was improper revenue recognition on Value Added Resellers ("VARs") transactions. VARs are companies that re-sell a manufacturer's product, while adding value in some way (e.g. by providing an associated service). Microtech is one of the VARs identified, alleged by Autonomy to have entered into contrived transactions with Autonomy, designed to enable the improper recognition of revenue in circumstances where Autonomy had been unable to conclude a sale with the end user customer within the relevant financial quarter.

The Chancery Proceedings

13. On 30 March 2015, the Autonomy Parties and Hewlett-Packard Vision BV ("Bidco") (the HP entity that acquired Autonomy) (together "HP/Autonomy") issued proceedings in the Chancery Division against Dr Lynch and Mr Hussein seeking damages or equitable compensation of at least £3.2 billion ("the Chancery proceedings") [3/19/5].
14. In those proceedings, HP/Autonomy contends that, as a result of the improper transactions and false accounting summarised above, Autonomy's published information for the period from the first quarter of 2009 until the second quarter of 2011 contained false statements or material omissions, to the knowledge of Dr Lynch and Mr Hussein. It further contends that HP/Autonomy reasonably relied on that information in deciding to buy Autonomy at the acquisition price; and that HP/Autonomy would have paid a much lower price (by at least £3.2 billion), had it known the truth.
15. HP/Autonomy claim for losses caused as a consequence of the alleged breach of fiduciary duties owed to by Dr Lynch and Mr Hussein. The Autonomy Parties further claim damages for alleged breach of their fiduciary and other duties which have caused Autonomy to be exposed to a claim from Bidco under Schedule 10A of the Financial Services and Markets Act 2000. HP/Autonomy also make direct claims for alleged misrepresentations under the Misrepresentation Act 1967 and/or in the tort of deceit.
16. Mr Hussein has denied all of the claims in a Defence dated 1 October 2015 which is supported by a statement of truth signed by his solicitor [4/22/372].
17. The pleadings in the Chancery proceedings have recently closed, and the first CMC is listed to take place before Hildyard J. (to whom the proceedings have been assigned by the Chancellor) in the week commencing 11 July 2016.

The US Proceedings

18. On 18 May 2015 Microtech issued the US proceedings, claiming that, in respect of two particular transactions, MicroTech paid Autonomy for the software but because the transactions with the expected end-users never materialised, it was never repaid or given an allegedly agreed 10% profit. The two transactions in issue are:

i) A purchase order dated 31 March 2010 (the last day of the relevant quarter), where the expected end-user was said to be the Vatican Library. This was for software worth $11.55 million, of which MicroTech says that it has paid just over $9.2 million.

ii) A purchase order dated 30 June 2011 (also the last day of the relevant quarter), where the expected end-user was said to be HP, for a total amount of $7.35m (which MicroTech says it has paid).

19. MicroTech claims repayment of the sums paid (but not the 10% uplift), in a total amount of about $16.55 million (about £11.27 million).
20. The Autonomy Parties dispute the claim on various grounds, including that the monies used by MicroTech to pay Autonomy represented funds that had previously been funnelled to MicroTech by Autonomy for that purpose, with the result that MicroTech was effectively paying Autonomy with Autonomy's own money: US Proceedings Answer and Counterclaim [1/2/60/3]. However, the Autonomy Parties also allege that these two transactions, and at least seven others, were part of a fraudulent scheme whereby MicroTech knowingly assisted Dr Lynch and Mr Hussein to cause Autonomy improperly to recognise revenue. The Autonomy Parties therefore counterclaim damages against MicroTech for aiding and abetting alleged breaches by Dr Lynch and Hussein of the fiduciary duties that they owed to the Autonomy Parties, and also advance a claim in unjust enrichment: US Proceedings Answer and Counterclaim [1/2/67-76/1-25].
21. The trial of the US proceedings is now listed to take place in January 2017 (having originally been scheduled for October 2016).
22. On 11 September 2015, Judge Whyte made a Protective Order for the purposes of the US proceedings [2/15/34-47]. In summary, this enables documents or witness evidence to be designated as confidential by the party or non-party producing it. Material that has been designated as confidential may be disclosed only to a limited group of people, including the Counsel of record in the US proceedings. The Protective Order provides that a person testifying at a deposition may designate the evidence as confidential, either by saying so on the record during the deposition or by giving written notice within 30 days after receipt of the transcript. That person bears the burden of proving that the material is properly protected as confidential and, if the receiving party disagrees, he may challenge the designation and ultimately seek a determination from the US Court as to the status of the material.
23. On 4 December 2015, the Autonomy Parties applied for the Letter of Request to be issued by the US Court [2/14/98-101]. MicroTech did not oppose the application.
24. On 11 December 2015, Mr Hussein's US attorneys issued a motion for a protective order forbidding the issuance of the Letter of Request on the basis that it was "both improper and unduly burdensome" [2/14/796-805]. By an Order dated 14 March 2016, Magistrate Judge Howard R. Lloyd ruled on the application, deciding it in the Autonomy Parties' favour and rejecting Mr Hussein's motion [1/1/1].
25. On 28 March 2016, Mr Hussein issued a motion for relief from that Order (in effect, an appeal), contending that the Magistrate Judge's decision was "clearly erroneous and/or contrary to law" on various grounds [2/14/904].
26. It turned out that, before receiving Mr Hussein's motion for relief, the US District Judge, Ronald M. Whyte, had already issued the Letter of Request. Judge Whyte nevertheless explained, by an Order dated 6 April 2016, that he would have rejected the motion in any event on substantive grounds [1/3/106].

Summary of the grounds relied upon by the Autonomy Parties and by Mr Hussein

The Autonomy Parties – submissions in chief

27. The Autonomy Parties contend that this is a paradigm case for the English Court to lend its assistance to the request of the US Court. The Letter of Request is for evidence to be used at trial. Mr Hussein, though situated in England, is a witness whose evidence would be highly relevant and material to adjudicating upon whether MicroTech aided and abetted him in committing the alleged breaches of fiduciary duty. The relevance of the evidence to the issues in the US proceedings is not at issue. The subject matter of the questions has been clearly identified, and has been narrowly tailored to focus on just nine specific transactions involving MicroTech. It is agreed that Mr Hussein will be provided with a bundle of documents in advance of the deposition. It is accepted that Mr Hussein is free, if so advised, to invoke the privilege against self-incrimination. It is submitted that there is nothing remotely oppressive about him being asked questions about his recollection of these events, nor, in the context of a dispute worth many millions of dollars, is there anything disproportionate about him being compelled to give evidence.
28. Autonomy draws the court's attention to six reasons identified by the Magistrate Judge supporting the conclusion that an examination of Mr Hussein would be proportionate to the needs of the US proceedings [1/1/3-4]:

i) The Autonomy Parties have raised "serious counterclaims" against MicroTech. These counterclaims include the contention that MicroTech aided and abetted breaches of fiduciary duty on the part of Mr Hussein.

ii) The counterclaims put several million dollars in controversy.

iii) Mr Hussein is inherently likely to have the "best access to probative information" that establishes whether he did indeed breach a fiduciary duty owed to the Autonomy Parties, which, as the Court went onto explain, is a necessary predicate for MicroTech's secondary liability as an alleged aider and abettor of the breach.

iv) The parties to the US litigation are willing to spend the money necessary to conduct an examination, and Mr Hussein does not contend that the expense of preparing for and sitting through the examination would be significant relative to his person wealth.

v) Mr Hussein's evidence is "important to the accurate resolution" of the counterclaims.

vi) The likely benefit of Mr Hussein's evidence outweighs the burden and expense of the proposed examination.

29. It is submitted that, though not binding on this Court, the considered views of the Magistrate Judge, from his expert vantage point in case-managing the US proceedings, are entitled to great respect. It is also submitted that his reasoning is unimpeachable, as Judge Whyte ruled on Mr Hussein's appeal.

Mr Hussein in response

30. On behalf of Mr Hussein it is submitted that the court should not exercise its discretion to give effect to the Letter of Request, for three reasons, namely:

i) the application is oppressive, and part of a strategy of oppression by the Autonomy Parties against Mr Hussein;

ii) any examination ordered would be pointless, because Mr Hussein would be advised to rely on the privilege of self-incrimination to which he is entitled by reason if the 5^th amendment to the US Constitution ("the 5^th amendment"); and

iii) an order by this court for the examination sought would infringe Mr Hussein's Article (6) ECHR rights.

Oppression

31. It is submitted that the court has a discretion as to whether to make the order sought and is not bound to do so. Leading Counsel for Mr Hussein relies upon First American Corp v Al Nahyan [1999] 1 WLR 1154 and USA v Philip Morris [2004] 1 CLC 811 in relation to this ground for opposing the application.
32. The context of the application, against the background of the much wider disputes between HP/Autonomy, the Autonomy parties, and Dr Lynch and Mr Hussein, suggest that the Letter of Request is oppressive. Following the acquisition of Autonomy in late 2012, HP announced an impairment charge of more than US$8.8 billion, and contended that the majority of this impairment charge, more than US$5 billion, was the result of serious accounting improprieties, misrepresentation and disclosure failures by Dr Lynch and Mr Hussein. At the end of a public statement issued on 20 November 2012 HP stated:

"HP has referred this matter to the US Securities and Exchange Commission's Enforcement Division and the UK's Serious Fraud Office for civil and criminal investigation. In addition, HP is preparing to seek redress against various parties in the appropriate civil courts to recoup what it can for its shareholders. The company intends to aggressively pursue this matter in the months to come." (Hammond Exhibit 1) [2/15/1]

33. It is submitted that this application is part of that aggressive strategy and is designed to be oppressive. In addition to the Chancery proceedings HP has instigated the further proceedings/investigations against or involving Mr Hussein:

i) Following complaints by HP the US Department of Justice ("DOJ") and Securities and Exchange Commission ("SEC") began investigations in late 2012 that are still ongoing. HP has also referred the matter to the UK Serious Fraud Office ("SFO"), which has ceded its investigation to the US Authorities [1/9/151-1], but there is also a regulatory investigation into Mr Hussein by the UK Financial Regulatory Council ("FRC"). The outcome of any of these investigations may have serious consequences for Mr Hussein, penal, financial and professional. If he is charged and found guilty he may go to prison and be prevented from pursuing his profession.

ii) In late 2012 and early 2013 various derivative proceedings were launched in the US against HP's directors and others by HP's stockholders, asserting breach of duty by those directors in relation to the acquisition of Autonomy ("the Derivative proceedings") in which the allegations against Dr Lynch and Mr Hussein were repeated Hammond 1 [1/8/139/16]. In those proceedings HP described Mr Hussein as "one of the chief architects of a massive fraud on HP" and "a massive fraudster" [2/14/811]. HP settled the Derivative proceedings and originally sought to include Mr Hussein within the settlement, despite the fact that he was not a party, such as to bar him from bringing certain claims against HP. That attempt was abandoned after Mr Hussein noted that if he was to be brought within the scope of the Derivative proceedings he should be entitled to disclosure in relation to the matters in dispute in those proceedings: Hammond 1 [1/8/139/16]; Hammond 2 [1/11/169-170/27-28].

34. It is submitted that HP's pursuit of the Chancery proceedings has also been aggressive. A pre-action letter was sent on 12 December 2014, to which Mr Hussein provided a response on 27 March 2015. HP commenced the Chancery proceedings without further comment on 30 March 2015, claiming damages against Dr Lynch and Mr Hussein personally of US$5 billion. It is said that the subject matter of the dispute is vast and wide ranging, as set out in Particulars of Claim of 134 pages. HP alleges that Mr Hussein co-ordinated the falsification of Autonomy's accounts over an approximately two-year period. It is not in dispute that amongst the allegations in the Chancery proceedings are the same allegations that the Autonomy Parties have included in the counterclaims in the US proceedings: Robinson 1 [1/7/130/20].
35. A case management conference is listed before Hildyard J. between 11 and 13 July 2016. HP/Autonomy's proposed timetable contemplates disclosure by 14 April 2017, witness statements exchanged by 20 October 2017 and a 16-week trial for the first available date after 1 October 2018. Mr Hussein will be one of the key witnesses at trial, but as HP/Autonomy's witnesses will be called first Mr Hussein will not give evidence until some months into the trial timetable.
36. In contrast, the US proceedings have relatively limited consequences for the parties and are much more restricted in their scope, being confined in the claim to two transactions in which Microtech were involved. Microtech claims US$16.5 million and the Autonomy Parties counterclaim for an unquantified amount to be determined. The scope of the proceedings has been significantly expanded by the Autonomy Parties' counterclaim in relation to a much wider set of transactions, supporting their claim that Microtech were involved in the alleged fraudulent scheme to accelerate and inflate Autonomy's revenue figures.
37. The Autonomy Parties' allegations in the US proceedings form a sub-set of the allegations referred to the US and UK authorities, and the claims in the Chancery proceedings. Accordingly, any testimony of Mr Hussein given as a result of an order made by this court responding to the Letter of Request will be relevant to the issues in dispute in the Chancery proceedings. HP/ Autonomy have refused to agree to any order that would prevent Mr Hussein's testimony being used for any purpose other than the US proceedings: Robinson 2 [1/9/154/33]. That testimony will be given without the benefit of HP/Autonomy's disclosure or a proper opportunity to consider it, and will be given over a year in advance of Mr Hussein's witness statement being provided. Mr Hussein would be the subject of cross examination over two years before any other witness in the Chancery proceedings. He will be asked to give evidence relevant to potential criminal charges being brought against him in the US, well before he would have to answer those charges. The testimony will not be for Mr Hussein's benefit but only for the financial benefit of the Autonomy Parties and Microtech. None of the DOJ, the SEC or the FRC has confirmed whether it will bring criminal, civil or regulatory proceedings against Mr Hussein. (Hammond 1 paras. [1/8/139,145/14A, 35A]. If Mr Hussein's testimony is taken and used in the US proceedings, it would become public and accessible by those bodies. Both Autonomy and Microtech have confirmed this: Robinson 2 [1/9/154/31]; Ringer [1/10/159/17].
38. It is submitted that it is noteworthy that Autonomy has not sought to depose any other witness who worked at Autonomy during the relevant time in the US proceedings: Hammond Exhibit 1 [2/15/52].
39. Although Mr Hussein accepts the US Judge's decision that his evidence is relevant to the issues between the parties in the US proceedings, he submits that the strategic motivations of HP/Autonomy in the present application should be taken account of in the application. Further HP/Autonomy has not ruled out attempts to bring civil proceedings against Mr Hussein in the US: Hammond 1 Para. 35 [1/8/145].

Privilege

40. Mr Hussein intends to rely on his Fifth Amendment rights against self-incrimination. It is submitted that the assertion of privilege would render the entire examination a waste of time and money because it is clear that the privilege would be asserted in response to every question, so would be of no evidential value and inadmissible in the US proceedings. The court should therefore refuse to make the order: see USA v Philip Morris EWCA Civ 330; [2004] 1CLC 811 at [23] per Brooke LJ.

Article 6 (1) of the ECHR

41. It is submitted that a fair trial requires an equality of arms, and that one party should not be placed at a substantial disadvantage. Leading Counsel for Mr Hussein relies on the European Court of Human Rights decisions in Dombo Beheer v Netherlands 91994) 18 EHRR 213 at [33]-[35] and Wynen v Belgium Appcn. No 32576/96,5 Nov, 2002 at [32]. If the order sought were to be made Mr Hussein would be put at a substantial procedural disadvantage in the Chancery proceedings. Requiring one party to give evidence or be cross examined earlier than the witnesses for the other party in the litigation, and permitting one party to give evidence after disclosure but not the other, is contrary to Article (6).

The Autonomy Parties' Reply

Oppression

42. The nine Microtech transactions represent a tiny subset of the transactions at issue in the Chancery proceedings. The Particulars of Claim impugn over 40 VAR transactions (many of which were with VARs other than Microtech), as well as the hardware, reciprocal and miscellaneous other transactions. In this context, there is a lack of realism to the suggestion that an examination focused on just nine transactions is an improper attempt to steal a march on the witness evidence in the Chancery proceedings.
43. This application can be distinguished from the case of First American because:

i) There was no suggestion in that case that the witnesses would have wanted to rely on a privilege against self-incrimination not to answer questions put, so that the witnesses were exposed in a way that Mr Hussein will not be; and

ii) It was in that case crucial to the concerns of the Court of Appeal that no pleaded case had been formulated against the witnesses against whom fraud had been alleged, so that they would be giving evidence with the general unspecified allegations hanging over them, such that it was apparent that the application was a fishing expedition.

44. This is not a case where it could be suggested that the Autonomy Parties are seeking to examine Mr Hussein in the hope of uncovering a train of enquiry that might enable proceedings to be brought against him, such that he is unfairly put in jeopardy. The Chancery proceedings have been issued, with detailed Particulars of Claim and a Reply, setting out the allegations of wrongdoing made against Mr Hussein. A relatively narrow request for further information by Mr Hussein, focused principally on quantum points, has recently been answered. Thus, Mr Hussein already knows the case against him. He has been able to answer it in a Defence running to over 300 pages.
45. There is no general principle of English law which holds that a defendant to litigation must be insulated at all times down to the deadline for service of witness statements from being required to state his recollection. Even before proceedings are issued, parties nowadays are required to explain their position in detail in pre-action correspondence. Once proceedings are on foot, the CPR requires parties to particularise their factual averments early on in their Statements of Case, supported by a statement of truth. It is also frequently the case that, outside the litigation, parties or witnesses may be compelled to attend interview with prosecuting or regulatory authorities. In the present case, Mr Hussein has seen fit to set out his stall in pre-action correspondence and, as already noted, in a lengthy Defence in the Chancery proceedings, which includes an 87-page schedule (Schedule 3) dealing in turn with each of the impugned VAR transactions (including all nine that are the subject matter of the counterclaim in the US proceedings) [4/22/553-639].
46. In any event, the suggestion that Mr Hussein would be significantly prejudiced by answering questions now is overstated. All that Mr Hussein is asked to provide at the examination is his honest recollection. If, notwithstanding the bundle of documents made available to him, he cannot recall something, he will be free to say so. If it emerges by the time of the trial in the Chancery proceedings that he has made an honest mistake in recollection, he can say so.
47. This position is inconsistent with his alternative argument that he will refuse to say anything during the examination apart from pleading the Fifth Amendment. There can be nothing oppressive about putting questions to Mr Hussein in circumstances where he will be free to remain silent.

Privilege

48. It is submitted that this inherent contradiction (above) explains why, in his original submissions on 11 December 2015 to the Magistrate Judge, Mr Hussein abstained from advancing any argument about the impact of the Fifth Amendment on the application for the issuance of the Letter of Request. A deliberate tactical decision appears to have been made to give precedence to the argument based on oppression. When the oppression argument failed, Mr Hussein changed tack on appeal, contending to Judge Whyte that the Magistrate Judge had failed to consider "the significant burden inherent in forcing Mr Hussein to invoke his Fifth Amendment right not to testify" [2/14/908]. Mr Hussein submitted that, "If a deponent is expected to invoke his Fifth Amendment right not to testify", a different proportionality analysis should apply; and contended that, "if one assumes, as the Order proposes, that Mr Hussein should escape the burden of HP's discovery by invoking Fifth Amendment privileges", then the deposition would not bring the parties closer to resolving their dispute [2/14/909].
49. The implications of his potentially pleading the Fifth Amendment were alive to the minds of both US judges:

i) The Magistrate Judge acknowledged in his reasoning that, given the ongoing investigations, Mr Hussein would be free to invoke his Fifth Amendment rights. Far from suggesting that this counted against issuing the Letter of Request, the Magistrate Judge saw this as a valuable protection against any risk of oppression.

ii) Judge Whyte acknowledged that Mr Hussein was now seeking to advance an argument based on the Fifth Amendment, but said that there was no basis for the suggestion that the Autonomy Parties "expects" Mr Hussein to invoke it; and, in any event, he held that it was wrong for the argument to have been raised for the first time on appeal [1/3/107-8].

iii) Moreover, the Letter of Request, as signed by Judge Whyte, expressly stated that US law "recognizes a privilege against self-incrimination" [1/2/19].

50. It would not be consistent with comity to entertain this ground for refusing the application. The words of Lord Keith in Rio Tinto at page 654 are apposite in this context:

"In the face of a statement in letters rogatory that a certain person is a necessary witness for the applicant, I am of opinion that the court of request should not be astute to examine the issues in the action and the circumstances of the case with excessive particularity for the purpose of determining in advance whether the evidence of that person will be relevant and admissible. That is essentially a matter for the requesting court."

51. By parity of reasoning, it is a matter for the US Court in this case whether it will be assisted by an examination of Mr Hussein, notwithstanding his right to plead the Fifth amendment. The US Court has already answered that question in the affirmative.
52. In any event, the evidence establishes that, as a matter of US law, a prospective deponent cannot escape the necessity of attendance by the expedient of declaring in advance that he will refuse to answer all questions: Robinson 2 [1/9/152-1/25]. The rationale for these decisions is that, since a successful invocation of the Fifth Amendment depends on the deponent having a reasonable belief that his disclosures could be used in a criminal prosecution or lead to other evidence that could be used in that manner, the availability of the privilege will turn on the specifics of the questions asked. Mr Hussein does not challenge these authorities as fairly reflecting the position as a matter of US law.
53. In any event, the Court should be very slow to accept that an examination, which the US Court has decided would be of assistance to it, would be pointless. In United States of America v Philip Morris Inc [2003] EWHC 3028 it was argued that a request to examine a solicitor should be refused on the basis that he would invoke legal professional privilege under English law as an objection to every question. Moore-Bick J at first instance said at [20] that there was "much force" in the argument that objections should be raised and privilege invoked as specific questions were asked, rather than the Court acceding to a blanket assertion of privilege in advance. While accepting that the Court could as a matter of discretion refuse an examination if the witness could and would refuse to answer any questions of substance put to him, the Judge held at [21] that, "No doubt such a course would only be justified in the clearest case." It is submitted that this is not such a case:

i) Despite Mr Hussein's insistence now that he will remain silent throughout the examination, it is hard to see how he could reasonably believe that questioning about his background (request 1) would be incriminating.

ii) Many of the questions are of a purely factual nature (e.g. request 2 seeks to identify the terms of Autonomy's agreements or understandings with MicroTech). Mr Hussein has already gone on record in the Chancery proceedings with an averment that, "So far as Mr Hussein is aware, there was no understanding – express or otherwise – that if a transaction was not entered into between the VAR and an end-user the VAR would not have to pay": Hussein Defence [4/22/421/128]. Having said this in a public document supported by a statement of truth, it would be inherently surprising if Mr Hussein were not willing to repeat it in a deposition under oath. He has presumably taken the view that the averment in his Defence is not incriminating.

iii) Similarly, as to questions about the purpose of the transactions between Autonomy and MicroTech, this is another subject which Mr Hussein has felt well able to address in detail in his Defence. Thus, in relation to the Vatican Library transaction of which MicroTech complains in the US proceedings, Mr Hussein has affirmatively pleaded that this was a "genuine, arms'-length transaction" and that "MicroTech was on risk for the debt it owed to Autonomy regardless of whether MicroTech was able to sell the software on to the Vatican Library or some other end-user …": Hussein Defence [4/22/432/152(c)]. Again, Mr Hussein does not seem to have had any concern that these averments would risk incriminating him.

iv) It is therefore far from clear that, in relation to every question of substance, Mr Hussein would be able to form a reasonable belief that his answers could be used against him in criminal proceedings.

CONCLUSION

Governing Legal Principles

54. The power of the English Court to give effect to a letter of request is derived from the Evidence (Proceedings in Other Jurisdictions) Act 1975 ("the 1975 Act"), and is now regulated by section II of CPR Part 34. As the notes in the White Book Vol I 34.21.2 (second paragraph) point out, the Court must first decide whether it has jurisdiction to give effect to the request and, secondly, whether as a matter of discretion it ought to make or refuse such an order.
55. The jurisdictional threshold requires that the Court should be satisfied:

i) that the application is made in pursuance of a request issued by or on behalf of a court or tribunal exercising jurisdiction in a country outside the UK (s. 1(a) of the 1975 Act); and

ii) that the evidence to which the application relates is to be obtained for the purposes of civil proceedings which have been instituted or are contemplated before the requesting court (s. 1(b) of the 1975 Act).

56. It is not disputed that these jurisdictional requirements are satisfied in the present case.
57. By section 2(3) of the 1975 Act, the Court is prohibited from making an order requiring any particular steps to be taken unless they are steps which, had the substantive proceedings been in England, could be required to be taken by way of obtaining evidence for civil proceedings in the English Court. This provision was intended to give effect to the express declaration of HM Government, when ratifying the Hague Convention, that the United Kingdom would not execute letters of request issued for the purpose of obtaining pre-trial discovery of documents. Again, it is not in dispute that the witness evidence sought by the Letter of Request is for the US trial.
58. The issue in contention concerns the exercise of the Court's discretion. In that regard, both parties agree that the starting point is the well-known dictum of Lord Denning MR (endorsed by Viscount Dilhorne on appeal) in Rio Tinto Zinc Corporation v Westinghouse Electric Corp [1978] AC 547 at page 560, where he said of a request by a US court:

"It is our duty and our pleasure to do all we can to assist that court, just as we would expect the United States court to help us in like circumstances. 'Do unto others as you would be done by.' "

59. In the same case, Lord Diplock said (at page 634):

"I think that the court should hesitate long before exercising its discretion in favour of refusing to make an order unless it was satisfied that the application would be regarded as falling within the description of frivolous, vexatious or an abuse of the process of the court."

60. It is clear from Rio Tinto, and First American that as a general rule the English court should accede to letters of request issued by foreign courts if they can properly do so. In First American (at 1165 D, H) it was held that it would not be proper to do so where the burden imposed on the intended witness was oppressive. In many cases the excessive width of the areas of proposed questioning may render the request, or parts of it, oppressive, but it is clear that the English court will generally defer to the foreign court on the question of whether the evidence sought is relevant (see First American at p.1165 B-C). In this case it is not disputed that the evidence sought would be relevant, but it is said that the questions go far beyond the ambit of the claim in the US proceedings, and that two of the areas of questioning are insufficiently narrow in focus.
61. On the first point I consider that, as indicated in the authorities, that the US court's view on the issue of relevance should prevail. On the second point, I have not heard full argument for the purposes of the issue for determination in this judgment, and if the application were to be granted any restrictions to the areas of questioning would have to be considered in more detail at a further hearing in relation to the third issue (see Paragraph 6 above).

Oppression

62. In First American Sir Ricard Scott V-C said (at 1165 H -1166A):

"…in deciding what response to make to a letter of request, the court should bear in mind the need to protect intended witnesses from an oppressive request. There is a balance to be struck in each case between the legitimate requirements of a foreign court and the burden that those requirements may place on the intended witness."

63. In First American the letter of request was refused because the witnesses sought to be examined were all partners of Price Waterhouse ("PW") engaged in working on audits of the accounts of the Bank of Credit and Commerce International ("BCCI"), and allegations of wrongful conduct had been made by the Plaintiff against those PW partners in respect of financial matters recorded in the audited accounts. It was stated in the judgement of Sir Richard Scott V-C (at page 1160F-G):

"This is not a case in which the letters of request merely seek an opportunity to examine third party witnesses with relevant knowledge of the facts in issue in the action. They seek the opportunity to examine third parties who are alleged to have been knowing participants in the dishonest conduct on which the action is based."

64. In that case First American would give no undertaking that it would not join PW in a civil action in respect of PW's alleged knowing complicity in the fraud the subject of the proceedings. Sir Richard Scott says (at p.1168 F-G):

"It is, it seems to me, inherently oppressive to hold over the heads of two witnesses serious allegations of complicity in fraud and the real possibility of being joined as defendants in a civil action based on the alleged complicity, while at the same time requesting opportunity for a wide examination of the two witnesses on the very topics that would be relevant in an action against them."

65. In the same section, Sir Richard Scott quoted from Lord Wilberforce's judgment in In re Westinghouse Electric Corporation Uranium Contract Litigation [1978] A.C. 547 at 611:

"The fact, if it be so, that evidence so obtained may be used in other proceedings and indeed may be central in those proceedings is no reason for refusing to allow it to be requested."

And went on to say (at p.1168 H – 1169 A):

"But allegations of fraud raise special considerations and so long as First American hold themselves free to use any information they may obtain from these two witnesses in a civil action for fraud in which the witnesses, or their firm, are defendants, the requests are, in my judgment, oppressive."

66. That gives substantial support to Mr Hussein's case on this application. However, the Autonomy Parties point me to the section in the judgement at p.1169 D-E, as a reason why this application can be distinguished from First American, namely that in this case the particulars of the alleged fraud have been pleaded against Mr Hussein in the Chancery proceedings. To decide whether that is so, I must, according to those comments in First American, assess the request for evidence in the light of the particular pleaded against the witness.
67. The nine Microtech transactions that are the subject of the US proceedings are included in the Particulars of Claim in general terms at Paragraphs 73 onwards, and a list of transactions is in Schedule 3. Schedule 3 also gives certain information in relation to each VAR, namely, proposed end user, date of sales agreement, licence fee, payment terms, payments received, sales invoice date, date product delivered, revenue recognition, transaction between Autonomy and end user, ultimate conclusion of VAR transaction and allegation of false accounting. The last category is in the most part completed with a one line description and no allegations are made against Mr Hussein or particulars given as to what is alleged against him in relation to each transaction identified in Schedule 3. The only one of the nine Microtech transactions of which particulars are given in the Chancery proceedings is at Paragraph 78, the Vatican Library transaction, stated to be an 'example of a contrived VAR transaction'. In his Defence at paragraphs 151 to 169 Mr Hussein pleads to the transaction set out in Paragraph 78 of the POC. At Paragraph 130 Mr Hussein complains about the lack of particularity concerning his alleged involvement in any of the disputed VAR transactions listed in Schedule 3. At Schedule 3 of his Defence under the heading 'General observations' at Paragraphs 2 (b), (d), (e), (g) (h), 3, 5, and 6 he complains of the lack of particulars in Schedule 3 of the Particulars of Claim. [4/22/553-639]. He pleads to each of the transactions separately, and in respect of each of the nine Microtech transactions (and indeed all other VAR transactions) his response to the 'False Accounting' content is that there is no proper particularisation. Autonomy say that the only Request for Further Information that has been made by Mr Hussein relates to quantum issues. However, it is difficult to identify how a Request for Further Information in respect of the 37 transactions listed in Schedule 3 could be framed when so little information is provided of which to request further particulars.
68. I accept the submissions made on behalf of Mr Hussein that he is in the same position as PW in First American so far as at least the other eight Microtech transactions are concerned, in that the allegations of fraud have not been particularised, and that it would be oppressive to require him to be subject to examination in respect of those transactions in those circumstances, for exactly the same reasons as in First American. Although the Microtech transactions may only be 'a small sub set' of the VAR transactions the subject of these proceedings, the allegations in those proceedings all relate to VAR transactions and the general allegations are the same in respect of all of them. There is also an allegation common to both proceedings of a conspiracy between Mr Hussein and Dr Lynch to inflate the share price of Autonomy. I further consider that it would unduly disadvantage Mr Hussein for him to have to submit to examination in respect of the nine Microtech transactions well ahead of disclosure, exchange of witness statements and oral evidence at trial than any other party or witness in the Chancery proceedings.
69. I also take into account that the Autonomy parties have not addressed in their evidence whether there are any other witnesses whom they could call in relation to the Microtech transactions. Mr Hussein in his defence at paragraph 130 states that:

"A large number of individuals apart from Mr Hussein were involved in arranging and overseeing Autonomy's business, including the Disputed VAR Transactions, many of them to a considerably greater extent than Mr Hussein."

I have not seen the Reply, but there was no indication in the evidence or in submissions that this pleading is disputed.

70. Both parties have alleged that the other is involved in a tactical approach or 'gamesmanship', and I am unable to reach any particular view about those allegations, save that the above factors do suggest a tactical approach by the Autonomy parties, namely to embark upon a train of enquiry by obtaining evidence from Mr Hussein on issues in the Chancery proceedings before they have particularised their case against him on at least eight of the nine Microtech transactions in the US proceedings.
71. In particular, I take account of the fact that HP/Autonomy are not prepared to undertake that:

i) They will not use the transcript of the examination in the Chancery proceedings; and/or

ii) no civil proceedings will be brought against Mr Hussein in the US concerning these or other VAR transactions. I refer to USA v Philip Morris Inc (CA) at [58], where, in contrast, such an undertaking had been given by the party seeking the examination.

72. I have to consider whether the oppressive nature of the examination is countered by the ability and intention of Mr Hussein to rely on his Fifth amendment privilege. In so far as his concerns about any potential regulatory and criminal proceedings in the US are concerned, I do consider that this is the case, and this was the view reached by the US court, [1/1/4-5] to which I must accord due respect. In respect of any regulatory/criminal proceedings in this jurisdiction, Mr Hussein would also be entitled to rely on the privilege against self-incrimination. This issue, therefore, on its own would not be sufficient to constitute oppression such that the request should be refused.
73. However, from the evidence provided to me it does not appear that the same consideration was given in relation to the Chancery proceedings nor to any potential civil proceedings in the US. The US court considered only the more limited issue of whether the proposed deposition request was an attempt "to evade English discovery limits" [1/1/6 and 7].
74. In terms of "the balance to be struck in each case between the legitimate requirements of a foreign court and the burden that those requirements may place on the intended witness." (per Sir Richard Scott in First American at 1165H), I consider that the burden on Mr Hussein outweighs the disadvantage to the Autonomy Parties and thus to the US court, in not having available to them Mr Hussein's testimony, and to the wish of this court to comply with a request from a sovereign state with which we have a comity of legal and social interest.

Privilege

75. I do not accept the criticism made of Mr Hussein by Autonomy that a reliance on this argument to oppose the application is inconsistent with his argument on oppression. A party is entitled to rely on more than one argument, and even if one argument is not accepted by the court it may accept an alternative argument.
76. Fifth Amendment rights have been held to engage the privileges mandated by s. 3 of the 1975 Act (Rio Tinto at 612-617 per Lord Wilberforce).
77. However, I do not consider that this court can assume that the examination would be pointless and a waste of time and money because Mr Hussein would rely on his privilege in answer to every question. The US court was well aware of this as a possibility but it did not prevent it from issuing the letter of request. I adopt the reasoning of Moore-Bick J at [20], [39] and [48] in USA v Philip Morris Inc [2003] EWHC 3028 (Comm) and Brooke LJ at [46] and [88] in USA v Philip Morris Inc [2004] EWCA Civ 330; [2004] 1CLC 811. It is not possible for me to conclude that Mr Hussein would be advised to rely on his Fifth Amendment privilege in answer to every question. For example, there may be areas of questioning where the answer has already been given in the defence in the Chancery proceedings so that the privilege would not attach to such evidence. It is of course likely that the examination may be very limited in its usefulness but I cannot conclude that it would be entirely pointless such that this would persuade me not to make an order. It is clear from USA v Philip Morris (CA) at [88] that as a reason not to make an order this is a high threshold to cross. That must be particularly so when the foreign court has already considered that issue.
78. However, this issue is academic, in the light of my clear view that the proposed examination would be unfair and oppressive to Mr Hussein, in the absence of undertakings by HP/Autonomy as referred to above.

Article 6(1) ECHR

79. I further consider that it would be in breach of Mr Hussein's right to a fair trial for him to have to submit to examination in respect of the nine Microtech transactions well ahead of disclosure, exchange of witness statements and oral evidence at trial than any other party or witness in the Chancery proceedings. Although the facts in Dombo Beheer were different from the present case, it is clear from the judgment of the ECHR at [33] that certain principles are of general application, in civil as well as criminal proceedings.
80. Accordingly, I will not grant the order sought on the application of the Autonomy Parties.