knowledge 17 November 2020 |

Interrogatories: High Court Judgment Examines Leave Requirement

What are interrogatories?

In the Nahj Company for Services case, Simons J gave this overview of the purpose and benefit of interrogatories.

• “One of the procedural tools available to a litigant is the ability, in certain circumstances, to compel the other party to the proceedings to answer questions on oath prior to the trial.  This is done by the delivery of interrogatories.  These take the form of written questions (usually, but not always, admitting of a ‘yes or no’ answer) which the other party is required to answer on affidavit.  Employed properly, the delivery of interrogatories can have the benefit of saving costs and reducing the amount of court time required for the hearing of an action.”

When can interrogatories be served without the leave of the court?

The main issue for determination by the court was whether the defendant was entitled to deliver interrogatories without first obtaining the leave of the High Court.² The answer depended on whether or not the plaintiff’s claim was one where relief was sought on the grounds of “fraud” or “breach of trust”.  In such a case, one set of interrogatories may be sought without leave by the plaintiff at any time after delivery of the statement of claim, or by the defendant at/after the delivery of the defence.

The dispute before the court

The dispute related to commission allegedly due to the plaintiff under an “arrangement” between the parties in respect of the recruitment of students from Saudi Arabia for the defendant’s medical programme.  The students’ medical studies were funded by the Saudi Arabian authorities. 

The case pleaded against the defendant alleged that it not only failed to disclose a previous error in the information given to the Saudi Arabian authorities on the amount of fees payable by the students, but sought to disguise this fact.  The plaintiff also claimed that the defendant had breached fiduciary duties allegedly owed to it under a partnership agreement.

The defendant delivered interrogatories to the plaintiff without the prior leave of the court.  It received no substantive reply so issued a motion seeking replies.  The plaintiff resisted the application on a number of grounds.

Was prior leave of the court required?

First, the plaintiff argued that the proceedings did not seek relief on the grounds of either “fraud” or “breach of trust”.  Instead, it had sought damages for breach of contract under which the partners of the alleged partnership were subject to fiduciary duties.  This was not equivalent to a cause of action for fraud or breach of trust.  This meant that the prior leave of the court was required to deliver the interrogatories.  This was not obtained so the interrogatories were invalid.

Simons J rejected this argument.  He said that allegations of dishonesty had been made against the defendant including the alleged disguising of a previous fee error and wrongful retention of fees owed to the plaintiff which were then wrongfully paid to a third party.  This was said to amount to a breach of fiduciary duty.  By way of relief, the plaintiff sought a declaration that the fees paid are held “on trust” by the defendant for the plaintiff as well as damages, to include aggravated and exemplary damages, for breach of fiduciary duty.

Simons J was satisfied that relief here was sought on the grounds of “fraud” and “breach of trust”.  The term “fraud” was not intended to refer to fraud in a criminal sense, but should be understood in its equitable sense.  He pointed out that interrogatories were originally available only in the Court of Chancery and “fraud” should therefore be interpreted as it would have been understood by courts exercising equitable jurisdiction.  He concluded that notwithstanding that the word “fraud” was not used in the pleadings, in substance, the proceedings were grounded on a claim of “fraud” in this equitable sense. 

• “What it really means in this connection is, not moral fraud in the ordinary sense, but breach of the sort of obligation which is enforced by a Court that from the beginning regarded itself as a Court of conscience.”³

He went on to say that even if the action could not be characterised as one where relief was sought on the ground of “fraud”, it was undoubtedly grounded on an alleged “breach of trust”.  This term, as used in the relevant court rules was not confined to breach of an express trust.  Applying its traditional equitable meaning, it also encompassed a breach of trust in the sense of a breach of fiduciary duty as was alleged here.

Simons J concluded here by saying that his decision on this point was also informed by the limited practical significance of the distinction between needing to seek leave or not.  The absence of this requirement did not greatly discommode the party to be interrogated as it was still entitled to object to the interrogatories on a wide range of grounds, including that they are unreasonable, oppressive or irrelevant.  This was relevant in interpreting the rule.  It meant that there was no necessity to give the terms “fraud” and “breach of trust” a narrow or restricted interpretation.

The hearsay issue

The plaintiff’s second objection was that the affidavit grounding the application should have been sworn by the defendant rather than by the defendant’s solicitor and so was entirely inadmissible as it contained items of hearsay.

Simons J rejected that argument on a number of grounds.  In particular, he said that it was unnecessary for the court to resolve any factual dispute for the purposes of ruling on the validity of the interrogatories.  This was because the key determinant of whether leave was required to deliver interrogatories was whether or not the action was one where relief was sought on the ground of “fraud” or “breach of trust”.  In this regard, it was only necessary to consider the pleadings.  The affidavit evidence was largely irrelevant to this issue.

Alleged attempt to avoid calling witnesses

Finally, the plaintiff alleged that the defendant’s “real purpose” in delivering interrogatories was to avoid calling witnesses as to fact at trial and so depriving the plaintiff of an opportunity of cross-examining them.  Simons J rejected this argument saying that one of the perceived benefits of interrogatories was to reduce the number of witnesses at trial so saving time and costs.

He said that more importantly, the necessity to call certain witnesses was entirely dependent on the plaintiff’s answers to the interrogatories.  If these supported the defendant’s case, then it might be unnecessary for the latter to call certain witnesses.  This could not, however, be said to deprive the plaintiff of an opportunity to cross-examine witnesses in relation to contested facts.  The need to call witnesses would have been avoided precisely because certain facts had been accepted on affidavit by the plaintiff in answer to the interrogatories.

If, conversely, the answers on affidavit contradicted the defendant’s case, then the defendant would have to call such witnesses as it considered necessary to substantiate its case.  Therefore, the procedural disadvantage apprehended by the plaintiff would not occur. 

Simons J also pointed out that the decision as to which witnesses to call at trial was largely a matter for the individual parties.  If the defendant chose not to call particular witnesses, then it was open to the plaintiff to call those witnesses itself, and, if necessary, to serve a subpoena on them. 

In any event, Simons J said that this particular objection was not one which was properly before the court.  The court rules provided that if the party to be interrogated wished to object to interrogatories as being oppressive etc., then this should be done by way of a separate application to set aside the interrogatories.