Cheney v Spooner [1929] HCA 12; (1929) 41 CLR 532 (29 April 1929)

The company called Williams Bros. Ltd. went into voluntary liquidation in New South Wales. On 5th November 1928 Harvey J. made an order giving leave to the liquidator to issue a summons to each of a number of persons—among whom the appellant was included by name—to attend and give evidence before the Master-in-Equity, respecting the affairs of the Company and to produce books and documents. On 20th November 1928, in pursuance of that leave, the liquidator obtained a summons from the Master-in-Equity summoning the appellant (inter alios) to attend on 3rd December 1928 to be examined for the purpose of proceedings directed by the Chief Judge in Equity to be taken before the Master in the matter of the liquidation and to produce books, &c. So far the statutory authority were secs. 123 and 124 of the New South Wales Companies Act 1899. On 22nd November 1928 Harvey J., on the ex parte application of the liquidator, made an order giving him leave to serve the summons of 20th November on the appellant (inter alios) in Victoria. This was made as under the authority of sec. 16 of the Federal Service and Execution of Process Act. On 17th December 1928 the same learned Judge dismissed an application on behalf of the appellant to set aside his Honor's order of 22nd November. Against this dismissal the present appeal is brought.

For the appellant the contention is that the order of 22nd November was made without jurisdiction, because (1) there was no "trial or proceeding" in which the appellant could be lawfully required to give evidence or produce books, &c.; (2) secs. 123 and 124 do not require a person to give "evidence" but merely information; (3) the production of books and documents required by these sections is ancillary to giving "evidence" and not an independent subject.

(1)

As to the first point, sec. 16 uses the words "any civil or criminal trial or proceeding." The argument is that sec. 123 and, therefore, also sec. 124 of the New South Wales Companies Act 1899 do not give rise to a "proceeding" in any legal sense and do not contemplate evidence; that they contemplate mere gathering of information which may result in nothing or may result in the subsequent initiation of some proceeding. A "proceeding," used broadly as it is used in sec. 16 of the Federal Service and Execution of Process Act, is merely some method permitted by law for moving a Court or judicial officer to some authorized act, or some act of the Court or judicial officer. In the case of a compulsory winding-up no doubt could exist. The application by petition under sec. 89 would initiate the necessary "proceeding," which would comprehensively cover also all subsequent steps in the winding-up. In the case of a voluntary winding-up sec. 137 makes express provision for an "application" to the Court in any matter, as if the winding-up were compulsory. The "application" is necessarily made in the equitable jurisdiction, and presumably made and heard in the regular method followed in that jurisdiction. The Court is to be satisfied that granting the application in whole or in part will be "just and beneficial." So there is a distinct judicial proceeding. The application of 5th November 1928 instituted a proceeding which did not end with a refusal, but continued by the order of the same date and the summons of 20th November. The required evidence would therefore be given in a civil proceeding within the meaning of sec. 16 of the Federal Act, constituted by the application, summons and examination. The case of In re Appleton, French & Scrafton Ltd[1] is a clear authority that the examination takes place in a "proceeding."

(2)

As to the second point, it seems to rest on the view that the term "evidence" is appropriate only where some issue of fact is raised for judicial or quasi-judicial determination. That is too narrow a limitation of the term. "Evidence," says Best (12th ed., p. 6) practically repeating Bentham, is "any matter of fact, the effect, tendency, or design of which is, to produce in the mind a persuasion, affirmative or disaffirmative, of the existence of some other matter of fact." In this case, the law places on the liquidator, in a voluntary winding-up, the responsibility of working out the affairs of the company. It affords him the means of obtaining information, that is evidentiary facts, enabling him to come to a conclusion as to ultimate facts. The information obtained as prescribed through the instrumentality of the Court and on oath is properly described as "evidence." It is "evidence" for the purpose intended by the law. The effect of the evidence on the mind of the liquidator, whether it brings him to an affirmative or a disaffirmative opinion or to none, is immaterial.

If the law, for its own purposes, provides a Court with compelling power to obtain the disclosure of facts that may or may not prove persuasive, then following the legal method to obtain them is a proceeding, and the facts when elicited are evidence within the meaning of the section.

(3)

As to the third point, it becomes unnecessary.

An appeal by special leave has been brought to this Court against an order made by the Supreme Court of New South Wales (Harvey C.J. in Eq.) giving leave to serve in the State of Victoria a summons issued out of that Court, and also against an order refusing to set that leave aside. The order giving leave was made pursuant to the powers conferred by the Service and Execution of Process Act 1901-1924 (Federal), sec. 16, which enacts: "When a ... summons has been issued by any Court or Judge ... in any State ... requiring any person to appear and give evidence or to produce books or documents in any civil ... trial or proceeding, such ... summons may upon proof that the testimony of such person or the production of such books or documents is necessary in the interests of justice by leave of such Court" or "Judge ... on such terms as the Court" or "Judge ... may impose be served on such person in any other State" &c.

The summons was issued under the powers conferred upon the Supreme Court of New South Wales by the Companies Act 1899, secs. 123, 124 and 137. It is what is known as an "examination summons"—that is, the persons named therein are summoned for examination concerning the affairs, dealings, estate or effects of Williams Bros. Ltd., a company formed under the Companies Act but in voluntary liquidation, and also to produce any books and papers in their custody or power relating to the Company.

This summons, it was argued, was not issued in any civil proceeding, as required by the Service and Execution of Process Act. A civil proceeding, I apprehend, includes any application by a suitor to a Court in its civil jurisdiction for its intervention or action. The application for the issue of a summons in this case was such a proceeding: the cases of In re Beall[2] and In re Appleton, French & Scrafton Ltd[3] are decisive in favour of this view.

Next, it was argued that the appellant was not required "to appear and give evidence" within the meaning of the section. It is true enough, no doubt, that the examination is of an inquisitorial nature: that the facts or statements elicited are not offered to any legal tribunal for the purpose of any judicial determination or decision. Indeed, the depositions are only admissible in evidence in other legal proceedings against the deponent, and not against third parties (see R. v Coote[4]; Palmer's Company Precedents, 13th ed., Part II., p. 665). Still, in my opinion, a person who is summoned to appear in Court and testify as to matters of fact under inquiry is required to appear and give evidence within the meaning of the Service and Execution of Process Act (cf. Stephen's Digest of the Law of Evidence, 9th ed., pp. 1-2).

[1] (1905) 1 Ch. 749.

[2] (1894) 2 Q.B. 135 (C.A.).

[3] (1905) 1 Ch. 749.

[4] [1873] EngR 4; (1873) L.R. 4 P.C. 599.

High Court of Australia

Cheney v Spooner [1929] HCA 12; (1929) 41 CLR 532 (29 April 1929)

HIGH COURT OF AUSTRALIA