First American Corpn v Zayed (Clifford v First American Corpn)

A court asked to obtain oral evidence for foreign proceedings should ask whether the proposed witness can reasonably be expected to give relevant evidence and whether the request seeks evidence for trial rather than information for an investigation. Relevance is primarily for the foreign court and should be assessed broadly.

The court retains a discretion to protect witnesses from oppression. It must balance international judicial assistance against the burden and intrusiveness of the examination. A wide examination may be oppressive where the requesting party has publicly alleged that the witnesses participated in fraud and remains free to use their answers in proceedings against them.

First American Corporation and First American Bankshares Inc appealed from Popplewell J's refusal to give effect to letters of request issued by the United States District Court for the District of Columbia. The letters sought oral evidence from partners or former partners of Price Waterhouse UK concerning audits of BCCI companies. The proposed evidence was intended for two associated United States actions concerning BCCI's alleged concealed ownership and control of First American.

The applications had been narrowed by the withdrawal of requests for documents and one witness, and by amendments to the requested topics. First American had nevertheless publicly alleged that Price Waterhouse knowingly participated in the relevant fraud and had not undertaken to refrain from suing the firm or its partners.

The central issues were whether the proposed examinations amounted to impermissible fishing and whether their breadth and circumstances made them oppressive.

1. Appeal dismissed unanimously. The Vice-Chancellor delivered the judgment, with which Auld and Schiemann LJJ agreed. Popplewell J had been wrong to characterise the requests as fishing, but had correctly concluded that they were oppressive.

2. For oral testimony, fishing is not a distinct jurisdictional objection merely because the examiner does not know what answers the witness will give. Where there is sufficient reason to believe that a witness may have relevant evidence on topics relevant to the foreign proceedings, an examination cannot be refused as fishing merely because preliminary or background questions may prompt further inquiry. Section 2(3) of the Evidence (Proceedings in Other Jurisdictions) Act 1975 requires the requested steps to be of a kind available in domestic civil proceedings.

3. The court should ask: first, whether the witnesses can reasonably be expected to give relevant evidence on the identified topics; and secondly, whether the underlying intention is to obtain evidence for trial or to conduct an impermissible investigation. The majority judgments in In re State of Norway's Application [1987] 1 QB 433 established no broader rule. The relevance of proposed testimony is primarily for the foreign court and should be examined only in broad terms.

4. The requests sought trial evidence. The auditors could reasonably be expected to know relevant matters concerning the treatment of the alleged loans and related dealings. The width of the topics reflected, in part, the complexity of the underlying litigation rather than an investigatory purpose.

5. The court nevertheless had to balance assistance to the foreign court against oppression to the witnesses. Several topics were excessively wide. More importantly, First American had publicly alleged knowing complicity in fraud while retaining the possibility of using the examination to build a civil claim against Price Waterhouse or its partners. A restriction barring only direct questions seeking admissions did not remove that oppression.

6. First American could instead plead a claim against Price Waterhouse, allowing any request to be assessed against identified allegations, or undertake not to bring civil proceedings based on the alleged complicity. In the absence of either course, the letters of request should not be implemented. The permissible limits of amendment by the English court had probably already been exceeded.

1. Court of Appeal: Dismissed the appeal unanimously. It rejected the finding that the requests were impermissible fishing but upheld their refusal because they were oppressive.
2. High Court: Popplewell J dismissed the application to give effect to the United States letters of request, holding that it involved fishing and that the requests were oppressive.