JIM BEAM BRANDS CO. v. KENTUCKY IMPORTERS PTY LTD. AND ANOTHER

1992, No. MP3449
1992, No. MP3453
1992, No. MP3454
1992, No. MP3455

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H E A D N O T E

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    Applications to set aside orders of a master for the examination of four witnesses under ss. 75 - 77A of the Evidence Ordinance and 0.70 of the Rules of the Supreme Court pursuant to letters rogatory issued by a court in the United States.

    It was submitted on behalf of the defendants that the evidence required was the subject matter of legal professional privilege and/or confidentiality and the requests for the production of documents amounted to a fishing expedition.

    The applications to set aside the orders were refused, but the orders to produce certain documents were varied to a limited extent.

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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J U D G M E N T

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1. With the agreement of the parties I am handing down this judgment in court.

PRELIMINARY

2. This is an application by the defendants, Kentucky Importers Pty Ltd (Kentucky Importers) and Kentucky Distributors Private Ltd (Kentucky Distributors), to set aside or vary orders made by Master Bokhary on the 27th October 1992 for the examination of four witnesses pursuant to letters rogatory issued by the United States District Court, Northern District of Illinois. The witnesses are Mr Richard Russell, a solicitor and senior partner of Johnson Stokes & Master (JSM), Mr P.R. Nicholls, a solicitor practising on his own account, Mr Robert Kenrick, an accountant and partner with KPMG Peat Marwick (KPMG) and Mr Chris Chan, an officer of the Deutsche Bank (Asia) (Deutsche Bank).

3. Kentucky Distributors is not a party to the American action, but was joined as the 2nd defendant in the present proceedings by an order made on the 9th November 1992 pursuant to 0.15 of the Rules of the Supreme Court on the grounds that it has a direct interest.

FOREIGN PROCEEDINGS

4. The proceedings in the United States have been instituted by the plaintiff Jim Beam Brands Co. (Beam), a Delaware corporation, against Kentucky importers, an Australian corporation, for declarations and damages for breach of contract in respect of a distribution agreement dated the 4th June 1990 made between Beam and Kentucky Importers.

5. By the plaintiff's complaint it is alleged that on the 1st July 1985 Kentucky Importers and Beam's predecessor James Beam Distillery Co. entered into a written distribution agreement for three years from the 1st July 1985 to 1st July 1988 as its exclusive distributor of certain distilled spirits in Australia. The agreement was to be automatically renewed for each succeeding three year period unless six months prior notice before the renewal date had been given by either party. The 1985 agreement was in fact automatically renewed for three years from the 1st July 1988 to the 1st July 1991.

6. However, in 1989 Beam decided that it did not want to extend the terms of the 1985 agreement beyond the lst July 1991 as it wanted, to change the terms of that agreement before the six months notice period required for termination of the agreement. As a result, negotiations were held in 1989 and 1990 between representatives of Beam including Mr Winkler, Beam's Executive Vice-President and Mr Wilen, President of Jim Beam Brands International Co. and representatives of Kentucky Importers including Mr Forster, the Chairman and Mr Burt, the General Manager. It is contended that during the negotiations, and in any event prior to the 1st January 1991, Kentucky Importers was given notice by Beam that the 1985 distribution agreement would not be renewed.

7. Subsequently Beam and Kentucky Importers entered into a written distribution agreement on the 12th June 1990 for four years whereby Kentucky Importers was appointed to be Beam's exclusive distributor of certain distilled spirits in Australia. This agreement was executed by Mr Burt on behalf of Kentucky Importers. Beam contends that they proceeded to operate under the terms of this agreement, but this allegation is denied by Kentucky Importers.

8. In February 1991 the legal advisers of Kentucky Importers informed Beam that it refused to observe and perform the terms and conditions of the 1990 agreement on the grounds that Mr Burt had no authority to execute the agreement. It was also asserted, on behalf of Kentucky Importers, that the 1985 agreement was still in effect because Beam had not given six months notice prior to the renewal date of the 1st July 1991. Beam alleges that if Mr Burt did not have authority to execute the agreement it has been ratified by Kentucky Importers' knowledge since June 1990 and by its failure to take any steps to repudiate the agreement before February 1991. An allegation is also made that Kentucky Importers is estopped by its conduct from repudiating Mr Burt's apparent authority.

9. An answer which essentially amounts to a denial of Beam's allegations has been filed by Kentucky Importers together with a counterclaim.

MOTION BY KENTUCKY IMPORTERS TO DISMISS FOREIGN PROCEEDINGS

10. A motion by Kentucky Importers to dismiss the American proceedings on the grounds of lack of jurisdiction and forum non conveniens was dismissed. Included in the evidence in those proceedings were affidavits of Mr Winkler, Mr Wilen and Mr Forster. It was as a result of a conflict of evidence between Mr Winkler and Mr Wilen on the one hand and Mr Forster on the other with regard to a certain issue that led to the issue of the letters rogatory.

LETTERS ROGATORY

Evidence of Mr Winkler and Mr Wilen in opposition to the

motion to dismiss

11. Mr Winkler in an affidavit sworn on the 29th August 1991 states that on the 28th December 1978 Beam engaged Mr Forster as its exclusive broker and sales representative in Australia, New Zealand and a number of countries in the Far East for the sale of certain distilled spirits through a brokerage agreement with Kentucky Distributors, a Singapore corporation which had its Principal office c/o JSM in Hong Kong. Under that agreement, Beam sent a monthly account of accruals to Mr Forster c/o Kentucky Importers Australia, and made payments by wire transfer to an account of Kentucky Distributors at the Deutsche Bank in Hong Kong.

12. Both Mr Winkler and Mr Wilen deposed that Mr Forster had personally agreed to the terms of the 1990 distribution agreement and that Mr Burt would make arrangements to finalise the agreement. They also said, that when the terms were agreed, Beam entered into a consultancy agreement whereby Mr Forster agreed to act as a consultant for Beam in respect of markets in the Far East at a fee of $300,000 per annum. This agreement had been proposed by Mr Wilen to Mr Forster to run concurrently with the distribution agreement following Mr Forster's complaint that he would be receiving less income under the terms of that agreement which would be compounded bv his loss of fees that had been paid by Beam under the brokerage agreement of the 28th December 1978.

13. Mr Wilen forwarded copies of the consultancy agreement and notice of termination of the prior brokerage agreement to Mr Burt at Kentucky Importers for signature by Kentucky Distributors. The consultancy agreement and acknowledgment of termination of the brokerage agreement of the 28th December 1978 were signed by Mr P.R. Nicholls as a director of Kentucky Distributors and sent to Beam.

Evidence of Mr Forster in support of the motion to dismiss

14. Mr Forster in his affidavit disputed Mr Burt's authority to sign the 1990 agreement and denied having any conversation with Mr Wilen with regard to a consultancy agreement for the Far East. He also denied entering into the consultancy agreement and further denied that he owns a Hong Kong operation by which statement he presumably meant Kentucky Distributors.

ALLEGATIONS IN THE LETTERS ROGATORY

15. It is alleged by Beam that the consultancy agreement was for Mr Forster's benefit as Kentucky Distributors was at all relevant times owned by shareholders who held their shares in trust (the Ho Trust) for the benefit of Mr Forster, directly or indirectly, or was a vehicle for his benefit.

16. Beam commenced payments under the consultancy agreement to Kentucky Distributors on about the 13th August 1990 by wire transfer to its account with the Deutsche Bank in Hong Kong. On the 3rd October 1990 Beam received from Kentucky Distributors a request via facsimile that advice of the monthly payment of the "consultant fee" be sent to Kentucky Distributors at an Australian facsimile number. The facsimile indicated that it had been sent by "N. & J. Forster".

17. The plaintiff contends that the trustee of the Ho Trust during 1985 and 1986 was a company known as Industrium Limited and in 1987 and possibly thereafter Prince's Nominees Limited. From 1981 until at least 1988 the Ho Trust borrowed money each year from Kentucky Distributors.

18. Messrs T.J. Gregory, B.S. McElney and R.S.N. Baly were directors of Kentucky Distributors between the 27th November 1978 and the 30th October 1982 and were also partners of JSM during that period. According to the note to the accounts for Kentucky Distributors for 1980 to 1981, the company's ultimate holding company at that time was Windsor Nominees Limited whose registered office was the same address as the address for JSM and whose directors are and at all relevant times were partners of that firm. The existing shareholders in Kentucky Distributors are King's Nominees Limited and Prince's Nominees Limited, both of whose registered offices are at the same address as KPMG and for each company the directors are and at all relevant times have been partners of that firm. Further, one shareholder in each of Prince's Nominees Limited and King's Nominees Limited is the other and the other remaining shareholder in each company is Veritatem Hong Kong Limited whose registered office is the same address as the address for KPMG and whose directors are and have at all relevant times been partners of that firm. King's Nominees Limited was incorporated in 1986 and the founding shareholders were Gregson Limited (Gregson) and Dredson Limited (Dredson), both of whose registered offices are at the same address as the address for JSM whilst the directors of both Gregson and Dredson are and at all relevant times have been partners of JSM. Mr Nicholls signed-as a director of both Gregson and Dredson upon those companies' subscription to King's Nominees Limited memorandum and articles of association whilst Gregson and Dredson were both shareholders in Kentucky Distributors from 1981 until approximately 1983.

Evidence of Mr Nicholls

19. Of the four witnesses only Mr Nicholls has filed an affidavit in support of the summonses to set aside or vary the orders of Master Bokhary. However, in his affidavit Mr Nicholls states that both the partners Mr Russell and Mr Kenrick take a neutral position. Mr Nicholls was employed as a solicitor by JSM in about 1979 and later became a partner. He commenced practice as a sole practitioner in June 1989.

20. He states that JSM acted as solicitors for Kentucky Distributors between 1978 and 1988, but only in a legal capacity, and that he was responsible for the affairs of the company between 1978 and about 1985. Mr Nicholls has been a director of Kentucky Distributors since May 1988, but not an executive director. He is the only director resident in Hong Kong. Mr Nicholls says that he merely provides professional legal advice and services as a solicitor, but can, if necessary, execute documents as, a director in order to avoid sending them to Singapore where the company is registered. All the documents that he holds on behalf of the company are held in his capacity as a solicitor and not as a director of the company. He accepts that he signed the consultancy agreement and the acknowledgment of termination of the brokerage agreement of the 28th December 1978 in his capacity as a director of Kentucky Distributors.

21. He complains that the request for documents for himself and the other witnesses are in extremely wide terms and that all the documents relating to himself and Mr Russell are subject to legal professional privilege. He also claims that any oral testimony that he and Mr Russell can give with regard to the affairs of Kentucky Distributors is also covered by legal professional privilege. In fact he states that Mr Russell was never involved in any matter with regard to Kentucky Distributors, nor is any other member of JSM.

22. Mr Nicholls says that KPMG became Kentucky Distributors' accountants in 1979. Since that time he has had frequent contact with them on various issues which he claims are of a private, confidential and legally privileged nature. He has also rendered legal advice to them in respect of the affairs of Kentucky Distributors. As a result, he believes that KPMG owes a contractual duty of confidentiality to Kentucy Distributors under the terms of their apponntment as accountants. He states that Mr kenricl has never been personally involved with the affairs of the company which have been conducted by other menbers of KPMG's staff. Accordingly, he consibers that Mr Kenrick is not a proprer witness to the issues which have Mr kenrick is not a proper whtness to the issues which have arisen.

23. Mr Nicholls went on to say that the Deutsche Bank have been bankers to Kentucky Distributors since 1978 and that as the company's solicitor, he has sent to the bank or to KPMG, for transmission to the bank, various legally privileged documents. He also contends that Mr Chan is not a proper witness to the dispute in the American proceedings.

REASONS FOR THE REQUEST

24. It is contended that the existence of the consultancy and the identity of the beneficiary of the agreement constitutes relevant corroborative evidence that is key to the court's determination of the merits of the action at the trial.

25. Each of the four witnesses is required by the American judge to give oral testimony and to produce a number of documents set out in a schedule annexed to the letters rogatory.

GROUNDS TO SET ASIDE

26. Mr Thomas, counsel for the defendants, submitted three grounds in support of the application to set aside the orders. First, in respect of Mr Nicholls, Mr Russell and Mr Kenrick, the request prima facie relates to matters covered by legal professional privilege whilst in the case of Mr Kenrick and Mr Chan, the request prima facie relates to confidential matters that are the subject of a contractual relationship of confidence that ought not to be disclosed. Second, the object of the request is not within s.76(1) of the Evidence Ordinance which is not designed to obtain evidence of facts material to the plaintiff's claim, but is an attempt to obtain discovery of documents and is therefore in the nature of a fishing expedition. Third, the request is objectionable because it is not sufficiently shown that most of the documents mentioned exist in the possession of the witnesses so that it is therefore a fishing expedition whilst most of the documents requested are not specified with the necessary particularity.

LEGAL PROFESSIONAL PRIVILEGE AND CONFIDENTIALITY

27. Mr Thomas submitted that the defendants are entitled to object to the examination being held on the grounds that all or substantially all the matters to which it is directed are covered by legal professional privilege. He went on to say that all the knowledge, information and documents in the possession of Mr Russell and Mr Nicholls was obtained and retained by them in their professional capacity as solicitors in the course of giving legal advice to their clients. The privilege is also extended to the documents in the possession of Mr Kenrick in his capacity as an agent of the client, who is not a lawyer. He cited In re Sarah C. Getty Trust [1985] 1 QB 956 for the proposition that the scope of professional privilege is broad and that it is not permissible to encroach upon communications that are basically privileged with a view to hiving off from the communications unconnected parts. Mr Thomas placed reliance on Balabel v. Air India [1988] 1 Ch 317 where Taylor L.J. discussed the scope of legal professional privilege at pp. 329 and 330 where he had this to say :-

"     These cases undoubtedly show a divergence of judicial authority as to the scope of the privilege. It is therefore important to go back to the basic principle justifying such privilege as an exception to the general rule that all relevant evidence is discoverable and admissible. That principle is that a client should be able to obtain legal advice in confidence.

...........

    Although originally confined to advice regarding litigation, the privilege was extended to non-litigious business. Nevertheless, despite that extension, the purpose and scope of the privilege is still to enable legal advice to be sought and given in confidence. In my judgment, therefore, the test is whether the communication or other document was made confidentially for the purposes of legal advice. Those purposes have to be construed broadly. Privilege obviously attaches to a document conveying legal advice from solicitor to client and to a specific request from the client for such advice. But it does not follow that all other communications between them lack privilege. In most solicitor and client relationships, especially where a transaction involves protracted dealings, advice may be required or appropriate on matters great or small at various stages. There will be a continuum of communication and meetings between the solicitor and client. The negotiations for a lease such as occurred in the present case are only one example. Where information is passed by the solicitor or client to the other as part of the continuum aimed at keeping both informed so that advice may be sought and given as required, privilege will attach. A letter from the client containing information may end with such words as 'please advise me what I should do.' But, even if it does not, there will usually be implied in the relationship an overall expectation that the solicitor will at each stage, whether asked specifically or not, tender appropriate advice. Moreover, legal advice is not confined to telling the client the law; it must include advice as to what should prudently and sensibly be done in the relevant legal context.

.............

Later in his judgment at pp. 331 and 332, he said :-

"    It follows from this analysis that those dicha in the decided cases which appear to extend privilege without limit to all solicitor and client communication upon matters within the ordinary business of a solicitor and referable to that relationship are too wide. It may be that the broad terms used in the earlier cases reflect the time. Their role then would have been confined for the most part to that of lawyer and would not have extended to business adviser or man of affairs. To speak therefore of matters within the ordinary business of a solicitor would in practice usually have meant the giving of advice and assistance of a specifically legal nature. But the range of assistance given by solicitors to their behalf has greatly broadened in recent times and is still developing. Hence the need to re-examine the scope of legal professional privilege and keep it within justifiable bounds."

28. In respect of the argument relating to confidentiality, Mr Thomas contended that all the knowledge, information and documents in the possession of Mr Kenrick and Mr Chan was obtained and retained by them as part of a relationship of confidentiality. He submitted that a balancing exercise may have to be performed if there is a public interest that overrides the banker's confidentiality see In re State of Norway's Application [1987] 1 QB 433. and In re State of Norway's Application (Nos. 1 and 2) [1990] 1 AC 723 where Lord Goff, in his opinion at 810 said :-

"     It is accepted on both sides that the question of confidentiality can only be answered by the court undertaking a balancing exercise, weighing on the one hand the public interest in preserving the confidentiality owed by the witnesses as bankers to their customers, and on the other hand the public interest in the English courts assisting the Norwegian court in obtaining evidence in this country."

Mr Thomas also referred me to F.D.C. Co. Ltd. v. Chase Manhattan Bank, N.A. [1990] 1 HKLR 277 as authority for the proposition that a banker's confidentiality is a matter of public interest and is ordinarily protected in Hong Kong when documents are sought for the purposes of an investigation by United States revenue officials.

29. In this case Mr Thomas asserted that the public interest of assisting a foreign court determine a conflict of testimony, incidentally arising in the course of proceedings, is not sufficient to override the public interest in protecting professional confidentiality for the following reasons :-

(i) there is no question of crime or fraud raised in the foreign proceedings;

(ii) there is no interest of comity in assisting another state to obtain evidence to be used for the enforcement of public revenue laws (as in In re State of Norway's Application (No. 2);

(iii) the affairs of Kentucky Distributors are not involved in the proceedings overseas;

(iv) the issues in the US proceedings can obviously be resolved without probing the affairs of Kentucky Distributors;

(v) the prime consideration is that Kentucky Distributors is entitled to the protection of its privacy by Hong Kong law;

(vi) Mr Kenrick and Mr Chan are entitled to the protection of their professional confidences.

30. In reply Mr Bleach conceded that the solicitors will be entitled to privilege in respect of legal advice, but not to the blanket claim that has been made to privilege and confidentiality on behalf of all the witnesses. He referred to the services that have been rendered by Mr Nicholls in his capacity as a director of Kentucky Distributors and that he has executed documents that are material to the proceedings in the United States.He also contended that the bank accounts and trust deed are not covered by privilege and that Mr Nicholls must know who is the beneficial owner of the Ho Trust.

31. I agree that the professional advisers will be entitled to privilege with regard to advice that they have given whilst the court is required to protect confidential information received by Mr Kenrick and Mr Chan, but I do not accept that the broad brush approach to these issues as canvassed by Mr Thomas is correct. Each witness, however, may claim privilege under Hong Kong law by objecting to answering a particular question under s.77 (1) (a) of the Evidence Ordinance which provides :-

77. (1) A person shall not be compelled by virtue of an order under section 76 to give any evidence which he could not be compelled to give-

(a) in civil proceedings in Hong Kong; .....

see In re Westinghouse Uranium Contract [1978] AC 547.

32. Any issue that arises with regard to a claim for privilege or for confidentiality must be raised by the witness before the examiner. Accordingly if a witness refuses to answer any question put to him during the examination pursuant to 0.39, r.10 of the Rules of the Supreme Court, the examiner must state his opinion upon the validity of the objection, but the ultimate decision will be for the trial judge in the United States. Although Mr Nicholls claims, that neither Mr Russell nor Mr Kenrick were involved with the affairs of Kentucky Distributors, no evidence has been filed by either of them to support this contention whilst it appears that, in any event, they are taking a neutral stance. However, I place greater weight on the opinion of the judge in the United States than to the views expressed by Mr Nicholls. If Mr Russell and Mr Kenrick have no information with regard to the affairs of Kentucky Distributors, they are entitled to say so.

33. Whether or not there is a question of crime or fraud raised in the foreign proceedings is irrelevant for the object of the request is to procure evidence for the purpose of civil proceedings. Further, I am unable to agree with Mr Thomas that there is no interest of comity for it is the duty of this court to assist the foreign court if possible, particularly where, as in this case, there is reciprocity for the Hong Kong court to obtain evidence in similar circumstances from the American court. Although Mr Thomas submitted that the issues in the United States can be resolved without probing the affairs of Kentucky Distributors, it is quite clear upon the evidence that this is not correct. I accept that Mr Kenrick and Mr Chan are entitled to the protection of their professional confidences, but the protection does not extend to a blanket claim.

34. Accordingly I am satisfied that the blanket claim for both legal professional privilege and confidentiality must fail.

FISHING

35. The request for assistance in obtaining evidence for the American proceedings is set out in s.75 of the Evidence ordinance which provides:-

"75. Where an application is made to the High Court for an order for evidence to be obtained in Hong Kong and the court is satisfied-

(a) that the application is made in pursuance of a request issued by or on behalf of a court or tribunal ('the requesting court') exercising jurisdiction in a country or territory outside Hong Kong; and

(b) that the evidence to which the application relates is to be obtained for the purposes of civil proceedings which either have been instituted before the requesting court or whose institution before that court is contemplated,

    the High Court shall have the powers conferred on it by this Part."

36. The power of the court to give effect to the application is set out in s.76(1) of the Evidence Ordinance which provides :-

"76. (1) Subject to this section, the High Court shall have power, on any such application as is mentioned in section 75, by order to make such provision for obtaining evidence in Hong Kong as may appear to the court to be appropriate for the purpose of giving effect to the request in pursuance of which the application is made; and any such order may require a person specified therein to take such steps as the court considers appropriate for that purpose."

37. Mr Thomas asserted that there is a clear distinction to be drawn between the statutory power to assist a party to foreign proceedings to obtain evidence under s.75 and a roving examination for possibly relevant material such as U.S. pre-trial discovery. He referred to Radio Corporation of America v. Rauland Corporation [1956] 1 QB 618 and to the judgment of Devlin J. at 644 where he said :-

" Before the court has any jurisdiction to grant this application it must be made to appear that the foreign court is desirous of obtaining 'testimony in relation to such matter' within the meaning of section 1 of the Foreign Tribunals Evidence Act, 1856, and the question that we have to determine is whether this testimony which it is sought to obtain is 'testimony' within the meaning of the statute."

Later in his judgment at 645 Devlin J. had this to say :-

"The distinction is not whether what is to be obtained is documentary material or oral material. The distinction is whether it is a process by way of discovery and testimony for that purpose or whether it is testimony for the trial itself."

Mr Thomas also referred to the judgment of Kerr L.J. when he described "fishing" in In re State of Norway's Application [1987] 1 QB 433 at 482 in the following terms :-

".. although 'fishing' has become a term of art for the purposes of many of our procedural rules dealing with applications for particulars of pleadings, interrogatories and discovery, illustrations of the concept are more easily recognised than defined. It arises in cases where what is sought is not evidence as such, but information which may lead to a line of inquiry which would disclose evidence. It is the search for material in the hope of being able to raise allegations of fact, as opposed to the elicitation of evidence to support allegations of fact, which have been raised bona fide with adequate particularisation. In the present context fishing may occur in two ways. First, the 'evidence' may be sought for a preliminary purpose, such as the process of pre-trial discovery in the United States. The fact that this is clearly impermissible for the purposes of the Act of 1975 is established in the Westinghouse case [1978] AC 547, and was equally so held by this court in relation to the Foreign Tribunals Evidence Act. 1856 in Radio Corporation of America v. Rauland Corporation [1956] 1 QB 618. This is irrelevant in the present context, since the 'evidence' is required for the trial itself. But fishing is in my view also relevant in another sense in the present context, as McNeill J. rightly indicated. It is perhaps best described as a roving inquiry, by means of the examination and cross-examination of witnesses, which is not designed to establish by means of their evidence allegations of fact which have been raised bona fide with adequate particulars, but to obtain information which may lead to obtaining evidence in general support of a party's case."

38. Mr Thomas accepted that the court will be inclined to make orders for testimony that will assist a party to support his own case or contradict the case of his opponent, but that ordinarily this is taken to refer to matters directly relevant to the issues in the case raised between the parties. In this respect, he referred to the speech of Lord Diplock in In re Westinghouse Uranium Contract [1978] AC 547 where he had this to say at 634 :-

"     The English court cannot be expected to know the systems of civil procedure of all countries from which request for an order under the Act of 1975 may come. It has to be satisfied that the evidence is required for the purpose of civil proceedings in the requesting court but, in the ordinary way in the absence of evidence to the contrary, it should, in my view, be prepared to accept the statement by the requesting court that such is the purpose for which the evidence is required.

        The letters of request from the United States District Court for the Eastern District of Virginia ('the letters rogatory') contained in the preamble what on a fair reading is, in my view, an adequate statement to this effect; so the High Court had jurisdiction to make an order. It was not bound to do so, but 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."

39. Mr Thomas went on to question whether the powers under the Evidence ordinance can be invoked to obtain testimony that is not itself relevant to the issue on the pleadings, but is sought to discredit what a prospective witness has said on oath in ancillary proceedings with the result that as it is not evidence that bears on an issue arising in the case, it ought not to be permitted.

40. He submitted that the existence of the consultancy agreement does not form part of the facts in issue on the pleadings so that no issue arises upon the pleadings with regard to the identity of Kentucky Distributors or their beneficiary, or to any agreement which they may, or may not have entered into with Beam at about the time that Beam entered into the distribution agreement with Kentucky Importers. As Beam is not seeking evidence to prove their case because no part of their case depends upon proving that there was a collateral consultancy agreement, it amounts to a fishing expedition for material which might be used in cross-examination to discredit Mr Forster which is objectionable and an abuse of the powers of the court.

41. Mr Bleach submitted, that the request is not made by Beam but by the American judge who is seized of all the interlocutory applications and will be the trial judge. He emphasised that the judge has identified the issues and that the request relates to evidence for use at the trial. Although the evidence is not referred to in the pleadings, it nevertheless was raised in the interlocutory proceedings in support of Kentucky Importers' motion to dismiss on the grounds of jurisdiction and forum non conveniens and its relevance is primarily the concern of the requesting court. In this respect, Mr Bleach referred me to the opinion of Lord Keith in In re Westinghouse Uranium Contract [1978] AC 547 at 654 when he said:-

"...On the material made available I consider that there were reasonable grounds for the view that these persons might be in a position to give evidence relevant to Westinghouse's defence in the Virginia proceedings. 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."

42. There is clearly no necessity for the consultancy agreement to be referred to in the pleadings because evidence under s. 75 (b) of the Evidence ordinance can be sought either when proceedings have been instituted or when they are contemplated at which stage there will of course be no pleadings in existence. The existence of the consultancy agreement that was referred to in the evidence before the American court in the interlocutory proceedings is undoubtedly material as is the identity of the beneficiary under the Ho Trust. The relevance in the evidence as was stated in the Westinghouse case is primarily a matter for the American court. The issues in fact are clearly before the American court and appear to be material for determination at the trial. In my judgment, the contention that the plaintiff has embarked upon a fishing expedition is unsustainable. The second ground put forward is therefore rejected.

DOCUMENTARY EVIDENCE

43. The powers of the court with regard to documents that are required to be produced are set out in s.76(4) (b) which provides-

                "76.(4) An order under this section shall not require a person-

(a) to state what documents relevant to the proceedings to which the application for the order relates are or have been in his possession, custody or power; or

(b) to produce any documents other than particular documents specified in the order as being documents appearing to the court making the order to be, or to be likely to be, in his possession, custody or power."

With regard to the matter of documents, my attention was drawn to certain passages from the judgments in Re Westinghouse Uranium contract [1978] AC 547. In his judgment at p.571 Roskill L.J. said :-

"...although it only primarily refers to a single document I think the request must identify, for the protection of the person receiving it, with sufficient accuracy, the documents required either individually or generically so that that person concerned may know what it is he has to provide and does not have to search around among his files to make up his own mind whether or not he will be failing in his duty to the court if he does not produce a particular document. His task should be made easy and not difficult; ...

And Viscount Dilhorne at 625 - 626 said :-

"..The only documents which a person can be ordered to produce under section 2 of the Act are particular documents.

     It follows that, if it were the case that the court was satisfied that the application for the order was for the purpose of obtaining evidence for civil proceedings, the court could only order the production of particular documents which it specified. It could not order the production of 'any memoranda, correspondence or other documents relating thereto' or, in my opinion, of 'any memoranda, correspondence or other documents referred to therein,' for those formulae do not specify particular documents. Subsection (3) is of general application. As Lord Goddard said in the Radio Corporation of America case [1956] 1 QB 618 'fishing' proceedings are never allowed in the English courts; and, if one concludes, as I do, that this was a fishing operation, then the consequence is that no order should, even if section 1 of the Act is satisfied, have been made for the examination of any witness or for the production of any documents."

The meaning of "particular documents" was also the subject of discussion by Lord Fraser in In re Asbestos Insurance [1985] 1 WLR 331 when he said at 337 and 338 :-

"     The meaning of the expression 'particular documents specified in the order' in subsection (4)(b) was considered by several of the noble and learned lords who took part in the Westinghouse case [1978] AC 547 decision. They were all emphatic that the expression should be given a strict construction. Having regard to the purpose of subsection (4) which, as I have already mentioned, is to preclude pre-trial discovery, it is to be construed so as not to permit mere 'fishing' expeditions. Lord Wilberforce said, at p.609:

'These provisions, and especially the words 'particular documents specified in the order' (replacing 'documents to be mentioned in the order' in the [Foreign Tribunals Evidence Act] 1856) together with the expressed duty of the English court to decide that the documents are or are likely to be in the possession, custody or power of the person called upon to produce, show, in my opinion, that a strict attitude is to be taken by English courts in giving effect to foreign requests for the production of documents by non-party witnesses. They are in the words of Lord Goddard C.J., not to countenance 'fishing' expeditions: Radio Corporation of America v, Rauland Corporation [1956] 1 QB 618, 649.'

    Lord Diplock expressed perhaps an even more restrictive view of the effect of subsection (4)(b) where he said, at p.635:

'The requirements of subsection (4)(b), however, are not in my view satisfied by the specification of classes of documents. What is called for is the specification of 'particular documents' which I would construe as meaning individual documents separately described.'

I do not think that by the words 'separately described' Lord Diplock intended to rule out a compendious description of several documents provided that the exact document in each case is clearly indicated. If I may borrow (and slightly amplify) the apt illustration given by Slade L.J. in the present case, an order for production of the respondents' 'monthly bank statements for the year 1984 relating to his current account' with a named bank would satisfy the requirements of the paragraph, provided that the evidence showed that regular monthly statements had been sent to the respondent during the year and were likely to be still in his possession. But a general request for 'all the respondent's bank statements for 1984' would in my view refer to a class of documents and would not be admissible.

    The second test of particular documents is that they must be actual documents, about which there is evidence which has satisfied the judge that they exist, or at least that they did exist, and that they are likely to be in the respondents possession. Actual documents are to be contrasted with conjectural documents, which may or may not exist. In the Westinghouse case, I said, at p.644:

'The reference to 'any' documents in the sweeping-up words in the schedule to the letters rogatory suggests to me that the draftsmen did not know whether such documents were in existence or not. Accordingly the words seem to be an attempt to circumvent paragraph (a) of section 2(4) of the Act of 1975, an attempt which should not be allowed to succeed.'"

44. The documents that were ordered to be produced by the witnesses are as follows :-

Mr Russell

Documents in the possession, custody or control of Messrs Johnson Stokes & Master limited to:

1.     In relation to a consulting agreement (the "Consultancy") dated June 11, 1990 between Jim Beam Brands Co. and Kentucky Distributors Private Limited (a company incorporated in Singapore) (the "Company"):

(a) the form of the Consultancy as sent to Johnson Stokes and Masters on, around, or prior to June 11, 1990 and documents or correspondence accompanying that form of Consultancy;

(b) the correspondence under which the form of Consultancy or copy thereof was sent on to Philip Nicholls or another party;

(c) the instructions given to Johnson Stokes & Masters, KPMG Peat Marwick or Philip Nicholls concerning the Consultancy by Mr Norman Forster or any person on his behalf; and

(d) the correspondence, memoranda, file notes and documents relating to the Consultancy limited to the period from 1 January 1990 to 31 March 1992;

2.     The correspondence, memoranda, file notes and documents recording the instructions given by or information provided to Mr Norman Forster or any person on his behalf concerning:

(a) the incorporation, operation and establishment of King's Nominees Limited by Gregson Limited and Dredson Limited in 1986;

(b) the acquisition and/or subscription for shares in King's Nominees Limited by Gregson Limited and Dredson Limited in 1986;

(c) the acquisition of shares in the Company by Gregson Limited and Dredson Limited that took place between 1978 and 1982, and the disposal of those shares;

(d) the incorporation, establishment and operation of the Company; and

(e) the loans made by the Company to the Ho Trust (the "Trust") from 1981 onwards;

3.     The accounts rendered for work performed in connection with the Company and the Trust and the letters accompanying the accounts limited to the period from 1 January 1986 to 31 December 1991.

4. In respect of the Trust:

(a) the deed or other document or documents establishing the Trust;

(b) the documents recording the instructions given by Mr Norman Forster or any person on his behalf concerning the establishment and operation of the Trust;

(c) the documents recording the appointment of Industrium Limited as the trustee of the Trust;

(d) the documents recording the appointment of Prince's Nominees Limited as the trustee of the Trust; and

(e) the documents recording instructions given by or information provided to Mr Norman Forster or any person on his behalf in connection with the Trust including instructions or information concerning

Mr Bleach conceded that the whole of paragraph 1 of the notice should be deleted.

Mr Kenrick

Documents in the possession, custody or control of KPMG Peat Marwick limited to:

1.     In relation to a consulting agreement (the "Consultancy") dated June 11, 1990 between Jim Beam Brands Co. and Kentucky Distributors Private Limied (a company incorporated in Singapore) (the "Company") documents recording:

(a)     the instructions given by Mr Norman Forster or any person on his behalf;

(b)     the payments received pursuant to the Consultancy by any person or the Company;

(c)     the correspondence, memoranda, file notes and documents relating to the Consultancy; limited to the period from 1 January 1990 to 31 March 1992; and

(d)     the account or accounts rendered by you or your work done in connection with the Consultancy;

2.     The correspondence, memoranda, file notes and documents recording the instructions given by or information provided to Mr Norman Forster or any person on his behalf concerning :-

(a)     the incorporation, and establishment operation of the Company including the minutes of meetings of the Company's shareholders and directors;

(b)     the acquisition and/or subscription for shares in King's Nominees Limited by Gregson Limited and Dredson Limited in 1986;

(c)     the acquisition of shares in the Company by Prince's Nominees Limited and King's Nominees Limited;

(d)     the incorporation, and establishment operation of King's Nominees Limited and Prince's Nominees Limited; and

(e)     the loans made by the Company to the Ho Trust (the "Trust") from 1981 onwards;

3.     Documents which relate to or evidence the operation of an account numbered 00/716/70/050 in the name of the Company held with Deutsche Bank (Asia) at that bank's 16-18 Queen's Road Central branch (the "account") limited to :

(a)     account opening form(s);

(b)     mandatory form(s);

(c)     reference letters and account opening documentation;

(d)     written instructions and resolutions in respect of the opening and operation of the account;

(e)     telegraphic transfer payment orders ordering payments from the account dated between January 1, 1979 and April 30, 1991; and

(f)     monthly and other periodic statements limited to the period from 1 January 1986 to 31 December 1991.

4.     The audit files for the company for the period from 1 January 1986 to 31 December 1991.

5.     In respect of the Trust :-

(a)     the deed or other document or documents establishing the Trust;

(b)     the documents recording the instructions, given by Mr Norman Forster or any person on his behalf concerning the establishment operation of the Trust;

(c)     the, documents recording the appointment of Industrium Limited as the trustee of the Trust;

(d)     the documents recording the appointment of Prince's Nominees Limited as the trustee of the Trust; and

(e)     the documents recording instructions given by or information provided to Mr Norman Forster or any person on his behalf in connection with the Trust including instructions or information concerning

(i)     the distribution of Trust assets; and

(ii)     the borrowing of monies by the Trust from 1981 onwards.

6.     The accounts rendered by KPMG Peat Marwick for work performed in connection with the Company and the Trust and the letters accompanying the accounts, limited to the period from 1 January 1986 to 31 December 1991.

Mr Nicholls

Documents in your possession, custody or control limited to:

1.      In relation to a consulting agreement (the "Consultancy") dated June 11, 1990 between Jim Beam Brands Co. and Kentucky Distributors Private Limited (a company incorporated in Singapore) (the "Company") documents recording

(a)     the instructions given by Mr Norman Forster or any person on his behalf;

(b)     the payments received pursuant to the Consultancy by any person or the Company;

(c)     the correspondence, memoranda, file notes and documents relating to the Consultancy; limited to the period from 1 January 1990 to 31 March 1992; and

(d)    the account or accounts rendered by you for your work in connection with the Consultancy;

2.     The correspondence, memoranda, file notes and documents recording the instructions given by or information provided to Mr Norman Forster or any person on his behalf concerning

(a)     the incorporation, and establishment operation of the Company including the minutes of meetings of the Company's shareholders and directors;

(b)     the acquisition and/or subscription for shares in King's Nominees Limited by Gregson Limited and Dredson Limited in 1986;

(c)     the acquisition of shares in the Company by Prince's Nominees Limited and King's Nominees Limited;

(d)     the incorporation, and establishment operation of King's Nominees Limited and Prince's Nominees Limited; and

(e)     the loans made by the Company to the Ho Trust (the "Trust") from 1981 onwards;

3.      Documents which relate to or evidence the opening and operation of an account numbered 00/716/70/050 in the name of the Company held with Deutsche Bank (Asia) at that bank's 16-18 Queen's Road Central branch (the "account") limited to:

(a)     account opening form(s);

(b)     mandatory form(s);

(c)     reference letters and account opening documentation;

(d)     written instructions and resolutions in respect of the opening and operation of the account;

(e)      telegraphic transfer payment orders ordering payments from the account between January 1, 1979 and April 30, 1991; and

(f)     monthly and other periodic statements limited to the period from 1 January 1986 to 31 December 1991.

4.     The accounts rendered by you or Johnson Stokes & Masters for work performed in connection with the Company and the Trust and the letters accompanying the accounts limited to the period from l January 1986 to 31 December 1991; and

5.     In respect of the Trust

(a)     the deed or other document or documents establishing the Trust;

(b)     the documents recording the instructions given by Mr Norman Forster or any person on his behalf concerning the establishment operation of the Trust;

(c)     the documents recording the appointment of Industrium Limited as the trustee of the Trust;

(d)     the documents recording the appointment of Prince's Nominees Limited as the trustee of the Trust; and

(e)     the documents recording instructions given by or information provided to Mr Norman Forster or any person on his behalf in connection with the Trust including instructions or information concerning

(i)     the distribution of Trust assets; and

(ii)    the borrowing of monies by the Trust from 1981 onwards.

Mr Chan

Documents and records in the possession, custody or control of Deutsche Bank (Asia) in relation to account numbered 00/716/70/050 in the name of Kentucky Distributors Private Limited held with Deutsche Bank (Asia's) 16-18 Queen's Road Central Hong Kong branch (the "account") limited to:

1.    In relation to a consulting agreement (the "Consultancy") dated June 11, 1990 between Jim Beam Brands Co. and Kentucky Distributors Private Limited (a company incorporated in Singapore)(the "Company"):

(a)     account opening forms;

(b)     mandatory forms;

(c)     signature cards for whole operation of the account;

(d)     board meeting minutes;

(e)     reference letters and account opening documentation;

(f)     written instructions and resolutions in respect of the opening and operation of the account;

(g)     monthly or other periodic statements limited to the period from 1 January 1986 to 31 December 1991; and

(h)      telegraphic transfer payment orders ordering payments from the account between January 1, 1979 and April 30, 1991.

Mr Bleach conceded that the words relating to consulting agreement in the first three lines should be deleted.

45. Mr Thomas objected to the requests in respect of each of the four witnesses on the grounds that they are too wide for he submitted that it is in effect a request for discovery rather than an order to produce specific documents. He contended that the requests are not confined to specific documents that would contradict the denials made by Mr Forster that are said to raise the issue of fact on which the court requires the assistance of the court, but range over wide classes of documents that might open a train of enquiry by way of a fishing expedition. He asserted that parts of the requests are roving fishing and do not identify with particularity specific documents with the result that the witnesses will have to exercise their own judgment as to whether or not particular documents are required to be produced. Mr Thomas further submitted that it has not been established that the documents exist or are likely to be in the possession of the witnesses. He further submitted that the use of the words "operation" and "documents" in the notices are too wide.

46. With regard to the request relating to the Deutsche Bank, he said that the request for the telegraphic transfer orders from 1979 goes back too far, and that if this request is allowed, it should be from 1986. However, as the original brokerage agreement was entered into on the 28th December 1978, the plaintiff is quite justified in seeking production of those details since 1979. Mr Thomas also contended that the request in respect of KPMG for details of loans made by Kentucky Distributors to the Ho Trust should be from 1985, the date when he said the first loan was made instead of 1981. However, there is evidence that loans were made to the Ho Trust in 1981 and I am therefore satisfied that this date is correct.

47. From the authorities cited it is necessary to establish that the documents exist or have existed and are likely to be in the possession, custody or power of the witnesses. The documents must be sufficiently identified so that a witness knows what he is required to produce. The words "particular documents" must be given a strict construction and the request must not amount to a fishing expedition. However, a compendious description is acceptable provided that all the documents can be clearly identified.

48. The evidence reveals that the structure of was organised with nominee directors Kentucky Distributors and shareholders for the benefit of the ultimate beneficiary whose identity has not been disclosed. The income of the company would appear to have been totally derived from brokerage fees. Kentucky Distributors is not a trading company and the difficulties expressed with regard to producing accounts as being vague is not justified upon the evidence.

49. The firms of each of the three professional advisers have been involved in the setting up of the structure on behalf of Kentucky Distributors relating to the nominee companies, directors and shareholders and the Ho Trust, and the documents referred to in the notices are likely to be in the possession, custody or power of these witnesses. If they are not, the witness can say so. The documents have been clearly particularised in the notices to produce and relate to evidence for use at the trial. In no way can the requests be described as a fishing expedition in aid of pre-trial discovery. The requests are not too wide or vague with the exception of the word "operation" and the concessions that were made by Mr Bleach to which I have referred.

50. The documents to be produced by Mr Chan of the Deutsche Bank relate solely to the account held in the name of Kentucky Distributors in which evidence is sought with regard to monies coming into the account and their subsequent transfer to the Ho Trust. This evidence is undoubtedly material to the American proceedings and again does not amount to a fishing expedition. The requests are not too wide with the exception of the word "operation"' which is too wide and will be deleted.

51. Those parts in the notices that have been underlined will be deleted. The orders of Master Bokhary are therefore varied to this limited extent.

PRACTICE

52. The orders made by Master Bokhary were made under 0.70, r.2(1) of the Rules of the Supreme Court which provides that an application must be made ex parte and must be supported by affidavit. Accordingly,there is no requirement for the applicant to serve any other party to the proceedings, nor a non party such as Kentucky Distributors. In this case, the examination of the witnesses was fixed to take place 12 days after the making of the orders which gave insufficient time for advice to be sought as to whether an application should be made to set aside the orders. Mr Thomas observed that it would be desirable in the future for a master to direct that the examination should no take place for a period of at least 28 days after the making of the order in order to allow adequati time for this purpose. .I agree that this is a reasonable suggestion with the exception that a period of 20 days should be sufficient. However, each case will depend on its own particular circumstances and must remain a matter for the discretion of the master. Further, although the application must be made ex parte, if the facts reveal that a non party has an interest that is directly affected by the making of an order, the master should give consideration as to whether a direction should be made that the non party be given notice of the application

53. In the result and in the exercise of my discretion, I shall refuse the applications to discharge the orders of Master Bokhary. However the orders with regard to the notices to produce documents will be varied to the extent to which I have referred. There will be an order nisi for costs to the plaintiff.