Fraud - Defendant's application to exclude hearsay evidence.
[2011]JRC238
Before : |
H. W. B. Page, Q.C., Commissioner, sitting alone. |
Between |
(1) The Federal Republic of Brazil |
Plaintiffs |
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(2) The Municipality of Sao Paulo |
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And |
(1) Durant International Corporation |
Defendants |
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(2) Kildare Finance Limited |
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And |
(1) Deutsche Bank International Limited |
Parties Cited |
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(2) Deutsche International Custodial Services Limited |
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(3) Deutsche International Corporate Services Limited |
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(4) Deutsche International Trustee Services (CI) Limited |
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IN THE MATTER OF THE DEFENDANT'S APPLICATION TO EXCLUDE HEARSAY EVIDENCE
Advocate E. L. Jordan for the Plaintiffs.
Advocate D. S. Steenson for the Defendants.
judgment
the commissioner:
1. This is my reserved judgment on an application by the Defendants to exclude the hearsay evidence of six potential witnesses that the Plaintiffs wish to adduce at the trial of the action due to start on 11th January 2012. My rulings have already been communicated to the parties in summary form. In view of the proximity of the trial this judgment is not as full as it might otherwise have been.
2. The nature of the case is described in the separate judgment recently handed down concerning the Plaintiffs' application for leave for the oral evidence of two witnesses to be given by video-link from Brazil. A number of preliminary points of general application need to be emphasised. First, in addressing the matters the subject of this judgment, I have borne fully in mind the serious nature of the allegations made and the other factors stressed by Advocate Steenson as noted in paragraph 20 of my earlier judgment. Secondly, by the same token the Court is entitled to note that, if the Plaintiffs are right, the funds the subject of this action, currently frozen in Jersey, are the product of a serious misappropriation in Brazil of public funds. Thirdly, the Defendants' stance in relation to this litigation has so far been a minimalist one at every stage: in their pleadings, in their decision to call no witnesses of any kind at trial and in their three-page trial skeleton argument. And lastly, nothing said here (or indeed in that earlier judgment) is intended to pre-empt in any way the question of what weight ought properly to be given to any particular evidence, which is a matter for the full court at trial.
3. By hearsay notice dated 3rd November 2011 the Plaintiffs gave belated notice of their intention to rely at trial on three depositions of Simao Damascene De Oliveira made in Brazil to the Office of The Public Prosecutor of the State of Sao Paulo on 27th February 2002, 19th April 2002 and 20th May 2002 and on depositions similarly made by Armando Neto, Marcos Feliciano De Oliveira, Aureo Figuerado, Marleide Gutierrez and Richard van Otterloo on, respectively, 25th May 2004, 2nd July 2004, 20th March 2002, 15th July 2002 and 4th April 2006. The Defendants' response was to apply by summons dated 29th November 2011 (i) for orders that such depositions (together with one other, the subject of a further separate judgment) be excluded at trial, alternatively (ii) that the Defendants be permitted, pursuant to RCR 6/222, to call and cross-examine the makers of the depositions. For one reason and another the Defendants' summons was unable to be heard until Monday 19th December.
4. The Defendants' primary application depends at heart on three propositions: first, that the court has an inherent jurisdiction to exclude evidence notwithstanding that it is admissible in law (i.e. a power additional, for example, to the exclusion of material on grounds of irrelevance or that it is no more than an expression of non-expert opinion); secondly, that in assessing the weight to be given to hearsay evidence the court should have regard to the factors listed in Article 6 of the Civil Evidence (Jersey) Law 2003; and thirdly, that having regard to those factors the hearsay evidence sought to be adduced by the Plaintiffs in the present case is undeserving of any weight as well as being objectionable in part on grounds of irrelevance or opinion, and should in the interests of fairness be excluded in advance of the trial. The first of these submissions I accept. I also accept that, in its evaluation of hearsay evidence laid before it, the trial court will need to take account of the factors referred to in Article 6 of the Civil Evidence (Jersey) Law 2003. However, for the reasons set out below, the third proposition is not so needs closer scrutiny.
5. Mr. Steenson relies in particular on the passage in the speech of Baroness Hale in Polanksi v. Condé Nast Publications Ltd [2005] UKHL 10, in which, having referred to the extensive case management powers of the English court delineated in the CPR, she commented:-
"But it would be a strong thing indeed to do use such case management powers to exclude the admissible evidence of one of the parties on the central facts of the case. There may be circumstances in which this could be done. The unreasonable refusal of that party to subject himself to cross-examination may be one of them. It might be grossly unjust to the other party, even contrary to his right to a fair trial under art. 6 of the European Convention on Human Rights, to decide a claim principally on the untested of a party who had not been subject to cross-examination of any sort."
He also relies on a passage in the judgment of Dyson LJ in Welsh v. Stokes [2007] EWCA Civ 796 (with which Richards and Thomas LJJ agreed) where he commented:-
"I accept there will be cases where it is so unfair to hold a defendant liable solely on the basis of hearsay evidence that a court should place little or no weight on the evidence a court should of course be careful not to determine the central issue in a case on the basis of hearsay evidence alone" (at [29]).
6. Several points need to be made here:-
(i) The starting point, as Advocate Jordan emphasises must be that Article 3(1) of the Civil Evidence (Jersey) Law 2003 provides "Evidence shall not be excluded on the grounds that it is hearsay".
(ii) The example given by Baroness Hale in Polanski of a circumstance that might justify exclusion of otherwise admissible hearsay evidence was that of a party unreasonably refusing to submit to cross-examination: not - as here - a witness over whom the plaintiff has no control. Moreover, in commenting that it might be grossly unjust to the other party to decide a claim on evidence untested by cross-examination of any sort, she was speaking of cases where the claim depends "principally" on evidence of that nature.
(iii) A majority of the members of the House of Lords in Polanski considered that the Court of Appeal had gone too far in suggesting that, if leave to give evidence by means of video-link (or 'VCF') had not been granted and the plaintiff had failed to present himself in court for cross-examination, the court would have been bound to exclude the plaintiff's witness statement notwithstanding that it would otherwise have been admissible as hearsay under s. (1) of the Civil Evidence Act 1995: per Lords Nicholls and Hope at [36] and [67] and Baroness Hale at [70].
(iv) The members of the Court of Appeal in Welsh v. Stokes were unanimous in rejecting both (a) the proposition that where hearsay evidence is the only evidence on which a claim is based it must necessarily be accorded no weight and (b) any supposed "rule of law which prohibits a court from giving weight to hearsay merely because it is uncorroborated and cannot be tested or contradicted by the opposing party" (at [22], [23]).
(v) The observations of the Court of Appeal in Welsh v. Stokes concerning the weight to be given to hearsay evidence were directed to the question of how such matters should be approached at trial. And, here again, in noting that "a court will be particularly careful before concluding that it [hearsay evidence] can be given any weight", the court was speaking of a situation "Where a case depends entirely on hearsay evidence".
(vi) In accepting that the court does have a discretion to exclude evidence that would otherwise be admissible, I am not to be taken as necessarily accepting Baroness Hale's comments concerning s. 6 of Eurpoean Convention on Human Rights, not having been addressed on that subject or on the recent decisions of the House of Lords and the Grand Chamber of the Strasbourg Court concerning convictions in criminal cases based exclusively on hearsay evidence.
(vii) There is a degree of irony in Mr. Steenson's invocation, for present purposes, of an inherent jurisdiction of a width - transcending the letter of Rules of Court - that he appeared to reject in the context of the recent debate about the court's power to permit oral evidence to be given via video-link.
7. While I accept, therefore, that the court does in principle have jurisdiction to exclude otherwise admissible evidence in advance of trial, it remains, as Baroness Hale observed in Polanski, "a strong thing indeed to do use such case management powers to exclude the admissible evidence of one of the parties on the central facts of the case". Moreover, in this jurisdiction, it seems to me that a single judge sitting without the Jurats before whom the case will be tried - and to whom in the ordinary way the responsibility, under the guidance of the presiding judge, of assessing the weight to be given to any particular hearsay is entrusted - needs to be doubly cautious before exercising this power on the basis of his own assessment of potential weight. Where there can be no serious doubt that the evidence in question could not in any circumstances justify any, or anything more than minimal, weight at trial it may be right to exclude it in advance of trial, but not otherwise. The fact that the evidence in question is that of persons who will not, or will probably not be subject to cross-examination is certainly not, of itself, a reason to exclude their hearsay statements.
8. In the present case there is another important factor which also points towards the need for considerable caution before exercising the jurisdiction to exclude evidence. As far as one can reasonably see at this stage, there is no question of the Plaintiffs' case turning exclusively on the evidence of any one of the persons the subject of the hearsay notices. The Court is, it seems, to be presented with a considerable body of documentary evidence and there will be oral evidence from a number of witnesses. Indeed, the Plaintiffs submit in their trial skeleton argument that their claim is largely proved on the documentary evidence (paragraph 6.1.1).
9. I turn now to the individual persons whose depositions are the subject of the Plaintiffs' hearsay notices and the Defendants' application to exclude, noting at the outset that the statements in question, although couched in the third person, are documents of some formality, purporting as they do to record the evidence of persons given to the Office of The Public Prosecutor of the State of Sao Paulo.
10. Depositions of Simeao De Oliveira. If the Plaintiffs are right, Mr. De Oliveira himself played an important role in the alleged fraud and is someone who, were he to give evidence in person, would potentially be a witness of considerable significance. However, according to the Plaintiffs, he is unwilling to assist them and they therefore seek to do the next best thing which is to rely on the depositions in question. There are, undoubtedly, a number of features about his depositions which will rightly entitle the Defendants to say at trial that the Court needs to address his evidence with circumspection when it come to deciding what weight to give to it. On any view there are parts which appear to be double hearsay and others where the source of what he says may be considered to be unclear. There is also the matter of his "retraction" which is likely to be highly contentious but is eminently a matter of for the full trial court to evaluate. In my judgment, the application to exclude Mr. De Oliveira's hearsay evidence as a whole falls well short of the threshold for the exercise of the jurisdiction to exclude. Nor in his case do not consider that any useful purpose is served by endeavouring to exclude a few selected passages (not least because for the most part the Defendants have not approached their application on that basis but on the basis of total exclusion). The Jurats can and will be appropriately alerted to the need for caution.
11. However the Defendants are entitled under RCR 6/22 to ask the court for leave to call Mr. De Oliveira and to cross-examination him and I give them leave to do so on condition (i) that arrangements can be made for his attendance for cross-examination (either in person or by video-link) within the currently projected time-frame for the receipt of evidence at the trial plus an extension of that time by two weeks (or such enlargement of that period as the Court may allow); and (ii) that, not later than the opening of the trial, the Defendants will be required to state their expectation as to whether Mr. De Oliveira will in fact be attending for cross-examination. The reality is, I suspect, that for one reason or another Mr. De Oliveira will not in practice be so called. But this formula gives the Defendants' a fair opportunity to try to arrange for him to appear if he is willing to do so: that this course might well be open to them is something to which the Defendants must have given consideration on receipt of the (admittedly late) service of the Plaintiff's hearsay notice of 3rd November.
12. Depositions of Armando Neto, Marcos Feliciano De Oliveira, Aureo Figuerado, Marleide Gutierrez and Richard van Otterloo. In the case of these persons, I am less certain about whether it would or would not be right to exclude parts at least of their several depositions and consider that the fairest way of dealing with the matter is to adjourn the Defendants' applications until the Plaintiffs have opened their case at trial (or until some convenient point in the course of that opening), by which stage I would expect to have a better feel for the right course to take.
13. In the meantime the depositions in question will be withheld from the Jurats and should be removed from the trial, and the Jurats will be directed to ignore for the moment the references to such depositions in paragraphs 6.2.3.5 and 6.3.1.10 of the Plaintiffs' trial skeleton argument.
14. However, given that the Plaintiffs' hearsay notice has been served, here too the Defendants are granted leave to call the persons in question for cross-examination to the extent that I subsequently decline to exclude their depositions (if I do so). This leave is subject to the same conditions and comments as those specified above in relation to Mr. De Oliveira. Here too, I doubt that in practice any of these persons would be called by the Defendants, but there will be a fair opportunity for the necessary arrangements to be made should that prediction prove to be wrong.
Authorities
Civil Evidence (Jersey) Law 2003.
Polanksi v. Condé Nast Publications Ltd [2005] UKHL 10.
Welsh v. Stokes [2007] EWCA Civ 796.
Civil Evidence Act 1995.
Eurpoean Convention on Human Rights.
Royal Court Rules.