High Court orders cross-examination of multiple defendants in conspiracy case despite lack of contempt allegations.

Neutral Citation Number: [2012] IEHC 510

THE HIGH COURT

COMMERCIAL

[2011 No. 5843 P]

[2012 No. 120 COM]

BETWEEN

IRISH BANK RESOLUTION CORPORATION LIMITED,

QUINN INVESTMENTS SWEDEN A.B. AND LEIF BAECKLUND

PLAINTIFFS

AND

SEÁN QUINN, CIARA QUINN, COLETTE QUINN,

SEÁN QUINN JR., BRENDA QUINN, AOIFE QUINN, STEPHEN KELLY, PETER DARRAGH QUINN, NIALL MCPARTLAND, INDIAN TRUST

A.B., FORFAR OVERSEAS S.A., LOCKERBIE INVESTMENTS S.A., CLONMORE INVESTMENTS S.A., MARFINE INVESTMENTS

LIMITED, BLANDUN ENTERPRISES LIMITED, MECON FZE, CJSC, VNESHKONSALT, OOO STROITELNYE TECKNOLOGH, RLC-

DEVELOPMENT AND KAREN WOODS

DEFENDANTS

JUDGMENT of Mr. Justice Kelly delivered on the 11th day of December, 2012

Introduction

1. The sole relief which is sought on this application is an order requiring the attendance of the second, third, fourth, fifth, sixth,

ninth and twentieth defendants for cross examination in respect of affidavits sworn by them on foot of orders of the court made on

25th July, 2012 and 31st July, 2012. The order is sought pursuant to the provisions of O. 40, r. 1 of the Rules of the Superior Courts

(RSC) or, alternatively, pursuant to the inherent jurisdiction of the court.

2. In the motion paper grounding this application there is a second relief sought. It is sought in addition to or in the alternative and

without prejudice to the first. It is for an order requiring each of the said defendants to make full and proper disclosure and/or further

and better disclosure of the matters required at paras. 4, 5 and 6 of the orders of the court of 25th July, 2012 and 31st July, 2012.

3. That second relief was not and is not being pursued at this time.

Background

4. These proceedings concern an alleged conspiracy on the part of the defendants to wrongfully convert and appropriate assets,

details of which are set out in the first schedule to the amended plenary summons.

5. In addition to seeking declaratory relief and damages, the plaintiffs sought and were granted injunctions at an earlier stage in the

proceedings. These injunctions were granted in June and July 2011 by Clarke J.

6. It was alleged that a number of the defendants had breached those injunctions. Dunne J. heard and determined an application in

respect of that alleged contempt of court in June 2012. She found that a contempt of court had been committed. In addition to

dealing with that issue, she made a number of other orders, one of which involved the appointment of a receiver over the assets of

certain of the defendants. She also made disclosure orders requiring information to be furnished on affidavit of all assets of whatever

nature or kind situate in Ireland or worldwide and all documents relating to the material which was specified in her order.

7. Subsequently, the plaintiffs applied to transfer the litigation into the Commercial List. That order was granted. An application was

then made seeking Mareva type injunctions restraining the second to the ninth defendants from reducing their assets below the sum

of €50m. I granted those orders and also appointed receivers over the assets of these defendants. Those orders were made on 25th

July, 2012. On 31st July, I made similar orders against the twentieth defendant, Karen Woods.

8. It is important to set the context in which the orders of 25th July and 31st July, 2012, were made.

9. Prior to 25th July, 2012, the Mareva type orders had been granted by me on an interim basis. The hearing of the application for

similar orders on an interlocutory basis was fixed for 25th July, 2012 and three days were set aside for that hearing. The application

was grounded upon extensive affidavit evidence which set out in great detail very serious allegations of wrongdoing on the part of the

relevant defendants. Despite ample opportunity being given to the defendants to respond to those allegations, no replying affidavit of

any sort was filed by any of the defendants. The orders sought were not resisted by the defendants.

10. I gave judgment ex tempore on 25th July, 2012. In the course of that ruling, I pointed out that I had already granted freezing

orders on an interim basis and that I was now asked to do so on an interlocutory basis. I recounted that since the granting of the

interim orders, a number of things had happened. This is what I said:-

“First, Dunne J. has delivered judgment on a contempt application heard by her in this litigation. In the course of her

judgment, she said the following:-

‘What has never been in dispute is the fact that a sum of €455 million approximately is due to Anglo. Instead of

trying to repay the admitted debt due, the Quinn family and in particular the respondents have taken every step

possible to make it as difficult as can be to recover any amount due. They have engaged in a complex,

complicated and, no doubt, costly, series of steps designed to put the assets of the IPG beyond the reach of

Anglo, in a blatant, dishonest and deceitful manner. They have consciously misled courts here and elsewhere. They

have sought to deprive Anglo of the assets which would go some way to discharging an admitted indebtedness.

The behaviour of the respondents outlined in evidence before me is as far removed from the concept of honour

and respectability as it is possible to be.’

As a result of the findings in that judgment one of the defendants has been sent to jail and the other is now a fugitive

from justice.

The second matter that has occurred is that further evidence has been put before me by the bank. In the case of one

of the defendants it shows a willingness on his part to lie about his activities, even to a court and under oath. I quote

from the transcript which has been extracted from the video which had been put in evidence where that defendant

laughingly said ‘I would have to lie. That wouldn’t overly worry me.’ That is in the context of a lie being told to the court.

The third development which has taken place is that in the most recent evidence one finds payments of extraordinary

sums of money, just short of €2.8m, paid to a number of the defendants and that is dealt with at paragraph 10 of the

second supplemental affidavit of Mr. Woodhouse…‘this occurred after the order of Clarke J. made on 27th June, 2011.

Peter Quinn specifically avers that he personally received €474,974.84 by way of net salary from Finanstroy in the period

1st April, 2011 to 15th February, 2012’.

And he then quotes from what had been said by Mr. Quinn, that this had fairly recompensed him for the work he actually

undertook. Mr. Woodhouse says this is an extraordinary statement given the facts that have now emerged regarding the

steps he was taking in furtherance of the scheme during this period. Mr. Woodhouse says:-

‘I am not aware of any work done by Karen Woods in relation to the various companies, for example, to justify a

salary of €320,297.22 after tax. The total extracted is a very substantial sum, but accounts for just a small

proportion of the total rent rolls. The balance of in or around $32m is unaccounted for and its whereabouts remain

unexplained. Significantly, Seán Quinn Jr. himself describes the withdrawal of these salaries as a ‘cash extraction

mechanism’ at para. 63 of his affidavit.’

There is a further significant element in the matters before me. The defendants have chosen not to file any replying

affidavits at all. They were given ample opportunity to do so. They did not avail themselves of it. Thus, there is no

denial, refutation or explanation of the large volume of evidence and exhibits which have been put before the court.

Whilst the court does not and cannot at this stage of the proceedings make any final or binding determinations, it has to

be said that all of the evidence before the court points in one direction.

That is itself somewhat unusual in applications of this type. Normally the court has to deal with disputed facts and

disputed evidence and has to adjudicate in the light of such disputes. On the evidence which is before me and which is

not controverted, it appears that the Quinn family have created and operated a scheme of mesmeric complexity on a

deliberate and premeditated basis which has cynically sought to achieve a twofold purpose. I regret to say that the

scheme reeks of dishonesty and sharp practice. Its first object is to place assets which should be available to the

plaintiff bank beyond that bank’s reach. Its second is to feather the Quinns own nest.

Faced with this kind of conduct, any court worthy of the name and worth its salt would, if asked, make whatever orders

it could legitimately make in order to bring an end to such wrongdoing and to frustrate the intentions of the

wrongdoers.”

11. That is the context in which the orders came to be made.

The Orders

12. The relevant part of the orders of 25th and 31st July, 2012, affecting the relevant defendants are in identical terms. They order

those defendants to disclose all assets held in Ireland or worldwide in which they have any direct or indirect legal and/or beneficial

and/or other interests. That disclosure was to be made on oath on or before 31st July, 2012, in the case of the first to ninth

defendants and 13th August, 2012, in the case of the twentieth defendant. Those rather short time periods were consented to by

the defendants and were not imposed by the court.

13. The fifth paragraphs of the orders require the defendants to disclose all bank accounts in Ireland or worldwide in which they have

any direct or indirect legal and/or beneficial and/or other interests, such disclosure to be made on oath by the specified dates. The

sixth paragraphs require the relevant defendants, their servants or agents to disclose on oath all documents relating to the actions

taken by them or on their behalf to place IPG assets beyond the reach of the bank by agreed specified dates.

14. All of the relevant defendants filed affidavits purportedly complying with the obligations imposed upon them pursuant to paras. 4,

5 and 6 of the orders.

15. In addition, the relevant defendants filed replying affidavits to the extensive affidavit of Mr. Richard Woodhouse grounding this

application which I will deal with in a few moments. These replying affidavits in a number of instances assert compliance with the July

orders subject to certain modifications. Other deponents disclosed and exhibited further material over and above that disclosed in the

original affidavits of disclosure.

16. Late in the evening on 28th November, with this motion due to be heard the following day, a further series of affidavits were

sworn by the defendants disclosing further material, which it is said they did not previously believe fell within the obligation to disclose

on foot of the court’s orders.

17. Thus, it can be seen that the bringing of this motion has elicited from the defendants the disclosure of additional material in their

affidavits sworn on 22nd November and 28th November, 2012.

18. Notwithstanding this additional disclosure, the plaintiffs contend that they have demonstrated the necessary grounds to warrant

this Court exercising its discretion in favour of permitting cross examination of the relevant defendants in respect of the affidavits of

disclosure sworn by them.

19. The defendants take issue with this.

Mr. Woodhouse’s Affidavit

20. Mr. Richard Woodhouse, the group head of Specialised Asset Management at Irish Bank Resolution Corporation Limited (the bank)

swore the affidavit grounding this application. It runs to some 109 paragraphs with many exhibits. He identifies four principal areas of

alleged non-disclosure or inadequate disclosure which he describes as the focus of this application.

21. Those areas are as follows:-

“(a) Documents relating to the personal defendants’ control of the IPG companies and of offshore or other companies to

which assets have been transferred as part of the Scheme.

(b) Assets and bank accounts in which the personal defendants have an interest which have not been disclosed.

(c) Documents relating to salaries that the personal defendants took from Russian IPG companies in 2011 and 2012,

including bank statements for the Ocean Bank accounts in Moscow into which those salaries were paid.

(d) Documents in the possession of the personal defendants’ legal advisers and documents relating to the payment of

legal costs.”

IPG means Quinn International Property Group

22. His affidavit sets out the general background to the application. He then proceeds to the disclosure made by the defendants to

date. He deals with two groups of disclosure affidavits. The first is the affidavits of means whereby the personal defendants were to

disclose all assets and bank accounts pursuant to paras. 4 and 5 of the orders. Secondly, he deals with the disclosure required at

para. 6 which required them to disclose all documents relating to the actions taken by them or on their behalf to place IPG assets

beyond the reach of the bank.

23. Mr. Woodhouse’s affidavit then deals with new evidence obtained since the orders were granted. This, inter alia, relates to the

control of the IPG assets and transferees followed by the assets and bank accounts allegedly not disclosed. Documents relating to

payments from IPG companies are dealt with next. Finally, he deals with documents held by agents and legal advisers of the

defendants. He also deals with disclosure of emails and text messages.

24. The affidavit concludes that Mr. Woodhouse does not believe that the relevant defendants have told the whole truth in relation

to their assets and their ability to procure relevant documentation. He points out that a final opportunity was provided to the

defendants to remedy deficiencies in their disclosure before 28th September, 2012 and that date was later extended to 2nd October,

2012. His invitation was responded to by letters from the defendants but no additional disclosure was provided. Each defendant

maintained the position that they had made proper disclosure. This assertion was made notwithstanding the contents of the later

affidavits sworn by the defendants on 22nd and 28th November, 2012.

Resistance

25. This application to cross examine the defendants was resisted on every conceivable ground. Many of the grounds relied upon

were not on point and were of little assistance to the court. Some of the objections proceeded on the basis that what was being

sought by the plaintiffs was much more extensive than is, in fact, the case. Others mischaracterised the context in which the cross

examination is sought. I can deal with some of these objections by pointing out what this application is not about.

The Nature of the Order Sought

26. The order which is sought is specific and focused. It seeks leave to cross examine the defendants in respect of the affidavits

sworn by them on foot of the orders of 25th July and 31st July, 2012. If made, the order will not permit what counsel for the

defendants called a “roving examination”. That is not what the plaintiffs seek. Neither do they seek what counsel for the defendants

called a “pre-hearing cross examination of witnesses”. The order, if granted, will not be for some form of pre-trial deposition or mini-

trial of the issues which will fall to be determined at the trial itself.

27. There is no allegation that the defendants are in contempt of court. Objections to the cross examination based on an assertion to

the contrary are misplaced.

28. The order which is sought has two objects. The first is to elicit information in respect of which the plaintiff believes there to be a

deficit. This will assist the bank to superintend and police the injunctive relief already granted. Second, if the court concludes that

there has not been sufficient compliance with its earlier orders, the second relief in the notice of motion will be triggered. Such an

order could only be obtained in circumstances where the court was satisfied that the disclosure made to date is deficient. If there is

conflict on affidavit evidence it can only be resolved by cross examination.

29. I now turn to the jurisdiction which is sought to be invoked and the criteria applicable to its exercise.

Cross Examination on Affidavits

30. The Rules of the Superior Courts expressly provide for a deponent to be cross examined in respect of affidavit evidence proffered

by him. The extent of the entitlement to cross examine depends on the nature of the proceedings or application in which the affidavit

has been sworn.

31. In the case of affidavits in support of a summary or special summons the entitlement to cross examine is absolute (see O. 37, r. 2

and O. 38, r. 3). In such cases, a party who wishes to cross examine a deponent simply serves a notice to that effect. The deponent

must then be produced for cross examination. Unless that is done his affidavit cannot be used as evidence except by leave of the

court. No leave of the court is necessary to serve such a notice to cross examine.

32. The position is different in respect of petitions, motions or other applications where evidence may be given by affidavit. There the

court may, on the application of either party, order the attendance for cross examination of the person making any such affidavit

(see O. 40, r. 1 RSC). No absolute right to cross examine arises in such cases.

33. The leading authority in this jurisdiction on the circumstances where cross examination on an affidavit will be permitted by the

court pursuant to O. 40, r. 1 is the decision of O’Donovan J. in Director of Corporate Enforcement v. Seymour [2006] IEHC 369.

34. In that case, the Director of Corporate Enforcement sought a disqualification order pursuant to s. 160 of the Companies Act 1990

against the respondent arising from the report of inspectors who had been appointed under s. 8 of the Companies Act 1990 to

investigate the affairs of National Irish Bank Limited and a related company. A number of adverse findings had been made against the

respondent. He had been the chief executive of the bank for a period of a little over two years. Mr. Seymour swore a number of

affidavits in response to the application. He did not materially dispute the facts averred to in the affidavits sworn on behalf of the

Director. But he strenuously disputed the inferences drawn from those facts and the opinions which the inspectors had formed. The

Director applied for leave to cross examine Mr. Seymour on those affidavits in relation to such inferences and opinions. O’Donovan J.

had to consider whether as a matter of discretion he ought to allow that application.

35. In the course of his judgment he pointed out that the applicant conceded that Mr. Seymour raised few (if any) material points of

factual disagreement with the averments in the Director’s affidavits. It was clear that he disputed all and any criticisms of his conduct

in the report and the inferences and opinions which the inspectors drew from the evidence before them. The judge said this:-

“In my view, it is axiomatic that, when, in the course of applications to the court which are required to be heard and

determined on affidavit, as is the situation in this case, it becomes apparent from the affidavits sworn in those

proceedings that there are material conflicts of fact between the deponents of those affidavits, the court must, if

requested to do so, consider whether or not to direct a plenary hearing of the proceedings or that one or more of the

deponents should be cross examined on his or her affidavit. This is so because it is impossible for a judge to resolve a

material conflict of fact disclosed in affidavits. However, while it seems to me that, where it is debatable as to whether

or not the cross examination of a deponent on his or her affidavit is either necessary or desirable, the court should tend

towards permitting the cross examination. At the end of the day it is within the discretion of the court as to whether or

not such a cross examination should be directed and that discretion should only be exercised in favour of such a cross

examination if the court considers that it is necessary for the purpose of disposing of the issues which the court has to

determine. That appears to me to be the import of a statement of Keane C.J. in the course of an unreported judgment

of the Supreme Court delivered on the 15th day of December, 2003, in a case of Holland v. The Information

Commissioner and represents the current jurisprudence in that behalf in this country.”

36. In expressing his conclusions, the judge, having pointed out that s. 22(b) of the Companies Act 1990 provides that the report of

an inspector shall be evidence of the opinion of the inspector, said:-

“it seems to me that, if that opinion is challenged, notwithstanding that the facts upon which the opinion is based are

not disputed, the court is entitled to know the mindset of the challenger and, in my view, the only way that that can be

ascertained is by confronting the challenger under cross examination. In that regard, it seems to me that the volume of

affidavit material sworn by the respondent in defence of the applicant’s claim herein, incorporating, as it does, a total

rejection of the opinions and conclusions of the inspectors is, in itself, a justification for testing by cross examination of

the respondent the reliability and, indeed, reasonableness of the contrary views expressed by him.”

Cross examination was ordered in that case.

37. This decision was criticised by counsel for the respondent as having gone “beyond what the existing case law provided for”. I do

not believe that to be correct. There can be no argument but that the court is invested with a discretionary power to order cross

examination of a deponent in an appropriate case. O’Donovan J. in the case just cited has identified what the approach of the court

ought to be on such an application.

38. As I have already pointed out, the purpose of such a cross examination in this case is twofold. First, to provide the plaintiffs with

full information so as to enable them to police the injunctions and also, if appropriate, to proceed to the second relief prayed for in

the notice of motion.

Policing the Injunctions

39. The Mareva type injunction has been a feature of litigation in the common law world for many years. The basis upon which an

order is granted was dealt with by Costello J. in Deutsche Bank v. Murtagh [1995] 2 I.R. 122. This is what he said:-

“The basis on which a Mareva injunction is granted is to ensure that a defendant does not take action designed to

frustrate subsequent orders of the court. It is well established in England that a Mareva injunction may extend to foreign

assets and I believe that the Irish courts have a similar power in order to avoid the frustration of subsequent orders it

may make. The court has ancillary powers also and in suitable cases it may grant a disclosure order requiring a

defendant to swear an affidavit in respect of assets outside the jurisdiction (see Derby & Co. Ltd. v. Weldon (Nos. 3 and

4) [1989] 2 W.L.R. 412).”

40. In the present case, no objection was raised to the granting of the Mareva type orders nor, indeed, was there any evidence put

before the court by the defendants by way of opposition to such orders.

41. Mareva type orders are of little use unless the recipient of such an order knows the true asset position of the defendant. Hence

the jurisdiction exercised in this case to require disclosure of the information provided for in paras. 4, 5 and 6 of the orders in suit.

42. But if it is contended that the disclosure made is inadequate, despite assertions made to the contrary, is it permissible for the

court to direct cross examination on the affidavits of disclosure to resolve the conflict?

43. That is the precise question which the Court of Appeal in England had to consider in House of Spring Gardens Limited & Ors v.

Waite & Ors [1985] FSR 173.

44. That case involved proceedings for copyright infringement and breach of confidence. The plaintiffs obtained a Mareva injunction

against the defendants. Vinelott J. made a subsequent order for disclosure by the defendants by affidavits of their assets. The

plaintiffs, believing that there were serious inaccuracies or omissions in certain of those affidavits, moved to cross examine the

defendants on the affidavits. Nourse J. granted the order by consent. At the hearing of the cross examination, Scott J. held that the

application for cross examination was misconceived in that the plaintiffs did not seek to ascertain or clarify any specific issue but

sought to police the court’s order. Holding that the court’s function was instead to decide issues between the parties, Scott J.

dismissed the order as being a nullity. The plaintiffs appealed to the Court of Appeal. Scott J. was reversed.

45. The Court of Appeal held that the court should be able to grant any ancillary order that appears just and convenient for the

purpose of ensuring that a Mareva injunction is effective. That would include making an order that the defendants be called or

recalled for cross examination upon their affidavits if the facts of the case justified it. In the course of his concurring judgment,

Cumming Bruce L.J. said:-

“For the reasons given by Slade L.J. I respectfully take the view that Scott J. was taking too narrow a view of the

powers of the court. The authorities, and in particular the judgments in the Bekhor case, make it quite plain that the

Mareva injunction jurisdiction is in many respects anomalous. The court has the power (and, I would add, the duty) to

take such steps as are practicable upon an application of the plaintiff to procure that where an order has been made

that the defendants identify their assets and disclose their whereabouts, such steps are taken as will enable the order to

have effect as completely and successfully as the powers of the court can procure. It may be that there are situations

in which the circumstances demonstrate that it is more sensible, if only for reasons of speed and urgency, not to order

further affidavits in order to fill the vacuum alleged to exist in the affidavits filed pursuant to the original order, but to

proceed at once to order that the defendants attend for cross examination upon their affidavits. The purpose of the

cross examination would be to elicit with greater particularity the extent and whereabouts of the defendants’ assets.

The background of applications for Mareva injunctions is often a situation in which it is urgently necessary for the court

to intervene in order to assist the plaintiff to prevent the defendant from frustrating the object of the proceedings. In

such a situation, an order to cross examine upon a unsatisfactory affidavit already filed is one of the courses that the

court has jurisdiction to take. When such cross examination takes place it is entirely a matter for the judge presiding on

cross examination properly to control it.”

46. That passage from the judgment supports the notion of a cross examination being permitted not merely in circumstances of

conflict on affidavit but in order to fill the vacuum alleged to exist in the disclosure affidavits.

47. In the course of his judgment, Cumming Bruce L.J. referred to the Bekhor case. That is reported at [1981] 2 All E.R. 565. There

the Court of Appeal had to deal with orders made in aid of a Mareva injunction. One of the topics the court had to deal with was

whether there should be cross examination permitted in order to police a Mareva injunction. In his judgment, Ackner L.J. said:-

“If the plaintiffs, or the court of its own volition, desired to ‘police its order,’ then the plaintiffs could have applied for an

order for the cross-examination of the defendant on his affidavit, or the court itself could have made such an order:

(see Ord. 38, r. 2).

48. In the course of his judgment Stephenson L.J. said:-

“In my judgment they have gone far enough in aid of the Mareva injunction and should be pursued or completed, if

desired, by cross-examination on the defendant’s existing affidavits, not as the judge indicated, on a further affidavit.

The defendant has already been warned by the judge that he may possibly be in contempt of court, but on the

authorities cited by Ackner L.J. that is no reason for not ordering him to attend for cross-examination under Ord. 38, r.

2 (3), though it may enable him to refuse to answer questions put to him in cross-examination.”

49. These cases, in my view, amply demonstrate an entitlement on the part of the court to direct cross examination in order to assist

in the policing of an injunction of the type granted in the present case.

50. I turn now to consider the other objections which were raised against the making of such an order in the present case.

The Receiver

51. In the context of the failure to comply with the original injunctions granted by Clarke J. and the findings of contempt which had

been made, receivers were appointed in aid of the Mareva type injunctions. No objection was made to such appointments. While such

orders are unusual, there is undoubted jurisdiction to grant them and the receivers were granted specific powers and entitlements.

52. It is said that in such circumstances, it is the receivers who are in effect the “policemen” of the injunction. Therefore, the

argument goes, the bank should have no entitlement to proceed further in respect of the injunctive relief. Any complaint concerning

non-compliance with any aspect of the orders of the court pertaining to the Mareva type relief should come from the receivers and

not from the bank, it is said.

53. I do not believe that this objection is well founded. The whole object of granting the injunctions and appointing the receivers was

to ensure that the defendants could not dissipate assets between now and the coming to hearing of the proceedings. The bank and

the receivers have a common interest in ensuring that to be so. I do not believe that the appointment of the receivers places any

fetter on the entitlement of the bank to seek to ensure that the injunction granted in its favour is effective.

54. The receivers have been appointed in aid of the plaintiffs not in substitution for them when it comes to ensuring that the

injunctions are to “have effect as completely and successfully as the powers of the court can procure” (per Cumming Bruce L.J.) (op

cit).

55. Furthermore during the hearing, I was told that the defendants have appealed against the order made in favour of the receivers

requiring delivery up and disclosure of material. I was also told that there was to be an application in the Supreme Court seeking to

stay that order to be heard in the near future. Given those circumstances it is understandable that the receivers might not be inclined

to seek to enforce their order pending the resolution of that issue.

Privilege Against Incrimination

56. It is suggested that to permit cross examination in this case might interfere with the defendants’ constitutional entitlements

against self incrimination and their rights under the European Convention on Human Rights.

57. A number of English cases were cited in support of this proposition. The first was Comet Products UK Limited v. Hawkex Plastics

Limited [1971] 2 Q.B. 67. That was a passing off action in which the plaintiffs obtained an interim injunction restraining the

defendants from passing off their products as the plaintiff’s. Before the trial of the action the plaintiffs alleged that the defendants

were guilty of contempt of court in disobeying an injunction and applied for the committal of the second defendant to prison for his

contempt. Affidavits were filed on each side and were read at the hearing of the application. The trial judge, Cantley J., made an

order allowing the cross examination of the defendant upon his affidavit which had been read by counsel for the plaintiffs. The

defendant appealed and the Court of Appeal held that since an application to commit for contempt had a quasi-criminal aspect and

the proposed cross examination would be likely to cover broad issues in the action, as a matter of discretion, the cross examination

ought not to be allowed.

58. It is quite clear that the Court of Appeal in that case allowed the appeal because of the fact that the cross examination was in

the context of an allegation of contempt which it regarded as being in the nature of a criminal charge.

59. In reaching that conclusion, however, Lord Denning M.R. pointed out that if an affidavit is filed and used before the court, the

defendant, when he is threatened with cross examination, cannot get out of it by saying that he will withdraw his affidavit. If an

affidavit is filed and used in court the deponent is exposed to a liability to be cross examined if the judge so rules.

60. Other English cases cited such as Den Norske Bank v. Antonatos [1999] Q.B. 271, were likewise concerned with cross examination

in the context of allegations of contempt of court or quasi-criminal wrongdoing.

61. In the present case, it is quite clear that there is no allegation of contempt made nor any relief sought in the motion pertinent to

such an allegation. These decisions are not relevant to this application.

62. Indeed, in the Bekhor case, in the passage from the judgment of Stephenson L.J. which I have cited, a warning by a judge to a

deponent that he may possibly be in contempt of court was regarded as no reason for not ordering him to attend for cross

examination.

63. In the present case if the court directs the defendants to be cross examined, it is to be assumed that the examination will be

conducted in accordance with the rules of evidence and with due regard for such defendants’ entitlements both under the

Constitution and the European Convention on Human Rights. It is not to be assumed that whatever judge is presiding over such an

examination will allow it to be conducted in a manner which is inconsistent with such rights.

Fishing Expedition

64. The order sought was criticised as amounting to a fishing expedition or roving cross examination. I have already alluded to that

latter description earlier in the judgment.

65. The order which is sought is specifically focused on the defendants’ relevant affidavits. It is not and will not be permitted to

become a trawl through material which will fall to be determined at trial. Neither will it amount to what counsel for the defendants

called a deposition before trial. Depositions before trial are not part of the trial process in this jurisdiction such as they are in the

United States of America. The focused and specific cross examination sought here cannot be regarded as and will not be permitted to

become a pre-trial deposition.

Compliance

66. The next argument made by the defendants is that they have in fact complied with their obligations under the court orders and

that therefore cross examination is otiose.

67. This is a difficult argument to make having regard to the background to this case as already dealt with by Dunne J. and the fact

that since the original disclosure affidavits were sworn and despite assertions of compliance, further affidavits demonstrating

additional material have been sworn on two more occasions including the eve of the hearing of this application. How has the new

material which has been disclosed come to light? How was it identified? What machinery was used to secure the information? These

are but some of the questions that arise by virtue of that fact alone.

68. When, however, one looks at the affidavits which have been filed and in particular those which deal with compliance with the

provisions of para. 6 of the order, I am quite satisfied that there are issues which require to be elucidated and that the only method

for so doing is cross examination. A number of these issues were identified in the course of argument by reference to conflicts

between what was sworn to in the proceedings and the material which is now referred to in the disclosure affidavits. It is not

necessary to deal with these in extenso. On a fair reading of the defendants’ affidavits, I do not believe it can be said that they

answer the complaints in Mr. Woodhouse’s affidavit with such clarity as to make cross examination unnecessary.

Russian Documents

69. The defendants contend that a number of documents which have been disclosed referring to activities in Russia are now within

the seisin of the Russian Courts and that this Court has no jurisdiction to consider them.

70. I reject this contention. These are documents which have been disclosed by the defendants as part of their disclosure obligation

in respect of orders personally binding upon them. I cannot see why they cannot be asked questions about them pertaining to those

personal obligations.

Legal Privilege

71. The existence of legal privilege which may attach to documents (particularly any in the possession of the defendants previous

solicitors) is not a basis for refusing the order sought if it is otherwise justified. Such questions and indeed the existence of any lien

over documents can be addressed during the course of any cross examination.

Individual Defendants

72. It is contended that the court ought not to order cross examination of the defendants unless in the case of each and everyone of

them there is identified a specific shortcoming or query in relation to the disclosure already made.

73. I am unable to accede to this line of argument. Such an argument might have force if the defendants were being accused of

contempt of court. But, as I have already pointed out, there is no allegation of contempt made against any of these defendants.

74. Second, the cause of action which is being relied upon here is conspiracy. By its nature conspiracy is furtive and shadowy. That

is indeed the sort of conduct which has already been found against a number of the defendants.

75. Third, it is quite clear from even a cursory perusal of the email traffic which has been disclosed to date that members of the Quinn

family and their in-laws have over periods of time been in constant communication with each other pertaining to the assets,

transactions and dealings in respect of these extensive properties situate in other jurisdictions. The allegations in the action involve

them all participating in such activity to a greater or lesser extent.

Conclusion

76. I am satisfied that there is jurisdiction to make the order sought. In my view, the discretion of the court ought to be exercised in

favour of the making of the orders sought. I am of opinion that the plaintiffs have demonstrated sufficient grounds for the making of

such an order by reference to the material contained in the defendants’ disclosure affidavits when examined in the light of the

complaints made in the affidavit of Mr. Woodhouse. I am also satisfied that cross examination is necessary to “fill the vacuum”.

77. The making of the order, I am satisfied, does not in any way dilute or interfere with the entitlements against self incrimination

which the defendants have. A question of when, how and to what extent that right can be exercised is a matter that will fall to be

determined during their cross examination.

78. The order sought by the plaintiffs is granted.