FEDERAL COURT OF AUSTRALIA

Commissioner of Taxation v Oswal (No 5) [2015] FCA 1504

THE COURT ORDERS THAT:

1.    The interlocutory application dated 18 December 2015 be dismissed.

2.    The first respondent pay the costs of the applicant in relation to the interlocutory application.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    This proceeding has been set down for a six day trial commencing on 29 January 2016.

2    The first respondent, Mrs Oswal, by interlocutory application dated 18 December 2015, seeks orders for the testimony of her and her husband, Mr Pankaj Oswal:

(a)    to occur by videolink pursuant to s 47A of the Federal Court of Australia Act 1976 (Cth) (FCA) (orders 1 and 3); or

(b)    to be taken by the Court on commission in Hong Kong pursuant to s 23 of the FCA and s 7 of the Foreign Evidence Act 1994 (Cth) (the Foreign Evidence Act) (orders 2 and 4).

3    The application is supported by an affidavit affirmed on 18 December 2015 by Mr Honesto Cabrera, a solicitor in the employ of Kennedys (Australasia) Pty Ltd, which acts for Mrs Oswal. So far as concerns Mrs Oswal’s explanation, and that of her husband Mr Oswal, it is given by Mr Cabrera upon an information and belief basis. Whilst the affidavit is somewhat ambivalent, I am informed by senior counsel for Mrs Oswal that neither she nor her husband will come to Australia to give evidence at the trial of the action, even if the present application is dismissed. This is their decision. It is not that they are unable to come to Australia but that they are unwilling to do so.

4    The Commissioner tendered a suite of email correspondence between his solicitors and those of Mrs Oswal. These documents were Annexures A-D to the written outline of submission filed on behalf of Mrs Oswal.

5    The interlocutory application has been served some four months after the matter was listed for hearing, over six weeks after the Commissioner informed Mrs Oswal that she and her husband were required for cross-examination and on the last day of the court term. The basis for the relief sought is an apprehension on the part of Mrs and Mr Oswal that they will be the subject of Departure Prohibition Orders (DPOs) if they return to Australia to give evidence and the asserted attendant consequences of this in relation to their children and in the case of Mr Oswal also in relation to his parents.

6    The interlocutory application will be dismissed for the reasons which follow.

The facts

7    These are largely uncontroversial and are taken principally from the Commissioner’s written submissions.

Commencement of the proceedings

8    On 5 October 2012, the Commissioner commenced these proceedings against Mrs Oswal and Mercury Services Ltd (the Proceedings). In the Proceedings, the Commissioner seeks to set aside a mortgage executed by Mrs Oswal in favour of the second respondent (Mercury Services) over two valuable properties in Perth on the basis that the granting of the mortgage was made with intent to defraud creditors, within the meaning of s 89(1) of the Property Law Act 1986 (WA) (PLA).

9    The Proceedings are defended by the respondents. Relevantly, both Mr and Mrs Oswal have filed affidavits in the Proceedings.

Repeated requests by Mrs Oswal for DPO undertakings since July 2014

10    On 30 July 2014, Mrs Oswal's solicitors wrote to the Commissioner's solicitors seeking an undertaking that the Commissioner would not issue her with a Departure Prohibition Order (DPO) should she return to Australia to given evidence in these Proceedings (Annexure A).

11    In subsequent correspondence, the Commissioner indicated on several occasions that the Commissioner was not willing to give the undertaking sought.

Proceedings listed for hearing and notification that Mr and Mrs Oswal required for cross-examination

12    The Court, on 22 July 2015, foreshadowed listing the matter for trial on 29 January and 1-5 February 2016.

13    On 20 August 2015, the Court ordered that the matter be listed for hearing on those very dates.

14    By letter dated 29 October 2015, the Commissioner notified Mrs Oswal's solicitors that the Commissioner required Mr and Mrs Oswal to attend the hearing of the Proceedings so that they could be cross-examined.

Further DPO undertaking sought and refused

15    The Oswals once again sought, by letter dated 30 October 2015, an undertaking from the Commissioner that he would not issue DPOs to the Oswals.

16    By letter dated 4 November 2015, the Commissioner's solicitors advised that the Commissioner declined to provide the undertaking sought. Further correspondence ensued and the Commissioner's position remained unchanged.

Judicial review proceedings unsuccessfully brought

17    On 18 November 2015, the Oswals commenced judicial review proceedings asserting that the Commissioner's refusal to give the undertaking sought constituted "jurisdictional error" (Judicial Review Proceedings).

18    On 11 December 2015, Mrs Oswal's solicitors sent a letter to the Commissioner's solicitors stating that, should judgment in the Judicial Review Proceedings be given against Mrs Oswal, Mrs Oswal intended to file an application to give evidence by video-link in the proceedings, or in the alternative, give evidence on commission. This was the first occasion on which Mrs Oswal's intention to apply to give evidence by video link or on commission was raised with the Commissioner.

19    On 14 December 2015, Mrs Oswal's solicitors sent a letter to the Commissioner's solicitors repeating the request outlined in the letter dated 11 December 2015.

20    On 15 December 2015, the Commissioner's solicitors sent a letter to Mrs Oswal's solicitors stating that the Commissioner would not agree to Mr and Mrs Oswal giving evidence by video-link or on commission. Further, the letter noted that no question of Mr and Mrs Oswal giving evidence by video-link or on commission had been raised at any previous directions hearing in the Proceedings, although the Commissioner's position in relation to the undertaking sought regarding the issue of a DPO had been known to Mrs Oswal and her solicitors for some time.

21    As senior counsel for Mrs Oswal accepted, the decision taken by her to proceed in this way rather than to file the present application, albeit much earlier than was the case, was a forensic one, the consequences of which lie at her feet.

22    Justice Griffiths, on 17 December 2015, dismissed the Judicial Review Proceedings with costs.

VIDEO-LINK APPLICATION

Relevant legislation and principles

23    These are again uncontroversial and have been substantially drawn from the Commissioner’s written submissions.

24    The Federal Court has the discretion to direct or allow testimony to be given by video-link: FCA s 47A(1). There is insufficient evidence as to certain technical matters set out in s 47C(1)(b) as to which I must be satisfied before I may lawfully make an order as sought. This is of no consequence as the application is to be refused.

25    Whether or not the discretion should be exercised one way or the other will depend upon the facts and circumstances of the individual case. Its exercise will involve a balancing of competing factors. The overriding consideration is what will be in the best interests of the administration of justice, including the need to ensure that justice is done as between the parties: Australian Competition and Consumer Commission v Pirovic Enterprises Pty Ltd [2014] FCA 544 at [11]; Kirby v Centro Properties Ltd (2012) 288 ALR 601 at [10].

26    Justice Buchanan in Campaign Master (UK) Ltd v Forty Two International Pty Ltd (No 3) (2009) 181 FCR 152 stated:

[77]     … Despite the undoubted efficiencies available in an appropriate case, the trend of authority seems to me to emphasise the need for a persuasive case to be made out to use a video link to take evidence, particularly to impose it on an unwilling cross-examining party, rather than the reverse.

[78]    I share the concerns … about the limitation on the effectiveness of video link arrangements as a means of taking oral evidence. I am particularly troubled by the prospect (or possibility) that the cross-examination of an important witness might be rendered less effective by the limitations of video link technology or the absence of the witness from the courtroom. Although the days are gone when witnesses are expected to feel any sense of intimidation as an aid to telling the truth, there is no doubt in my mind that the requirement to give evidence on oath or affirmation in the (generally) solemn atmosphere of a courtroom in the presence of a judge, and to answer questions in cross-examination in the presence also of cross-examining counsel, has at least three potential benefits. It enhances the prospect that the witness will remain conscious of the nature and solemnity of the occasion and of his or her obligations. It affords the cross-examiner some reassurance that the gravity and immediacy of the moment, and of the supervising presence of the judge, are not lost on the witness and the cross-examination is not thereby rendered any less effective, to the possible prejudice of the cross-examining party. It provides the Court with a more satisfactory environment in which to assess the nature, quality and reliability of responses by a witness, both to questions and to the overall situation presented by the necessity to give evidence in court. To my mind there remains, even in the modern context, a certain "chemistry" in oral interchanges in a courtroom, whether between a judge and counsel (or other representative) or between cross-examiner and witness. I would not wish too lightly to deprive a cross-examiner of that traditional forensic element in the exchange although, as the cases universally make clear, the Court must now, if asked to do so, balance the interests of a cross-examining party against claimed inconvenience both in individual cases and with respect to individual witnesses.

27    These observations were cited with approval by the Full Court of the Federal Court in Mulherin v Commissioner of Taxation [2013] FCAFC 115 at [51].

28    The approach generally followed in this Court is that the discretion will not be exercised in favour of a video-link application where, as here, the relevant evidence is central to the case and is likely to involve significant credit issues, and the cross-examination is likely to be lengthy and there are a considerable number of documents involved: see Hua Wang Bank Berhad v Commissioner of Taxation (No 4) [2013] FCA 495 at [19] and the cases there cited.

29    More broadly, when one takes into account decisions in other jurisdictions there are authorities both for and against the use of video evidence. However, as Buchanan J restated in Campaign Masters at [76], referring with apparent approval to what had been said by Austin J in Australian Securities and Investments Commission v Rich (2004) 49 ACSR 578, any apparent tension between the two streams of authority is readily enough reconciled upon the facts of a particular case; see also Australian Competition and Consumer Commission v StoresOnline International Inc [2009] FCA 717 at [14]. I would add that it seems also to have depended to an extent upon the views of individual judges as to whether video evidence is or is not almost as good as evidence given viva voce.

30    Justice Buchanan in Commissioner of Taxation v Seymour (2015) 65 AAR 443 held that an apprehension by a taxpayer that they may be issued with a DPO was not a legitimate basis for the granting of leave to give evidence by video-link. A decision to the contrary by the AAT was set aside by his Honour, who observed (at [99]-[100]):

[99]    … [W]here a party to proceedings in the AAT puts a request to give video evidence on the basis that the party wishes to avoid any possibility of legitimate action by taxation, regulatory or prosecuting authorities in Australia, I do not see how such a matter (which remains the declared position of the taxpayers regardless of the position of the Commissioner about DPOs) could normally be relied upon as relevant, much less decisive, by the AAT.

[100]    So far as the particular possibility of a DPO is concerned, there is another factor which is relevant. If the taxpayers came to Australia, and if a DPO was issued, there is a right of review in a court, including this Court. If on such a review a DPO was not lifted it can scarcely be suggested that it was not legitimate or permissible. The effect of the approach taken by the AAT was to pre-empt any possibility of a DPO, regardless of whether justified or not.

31    The Commissioner submits that having regard to the authorities the facts of the present case weighs strongly against the grant of leave to give evidence by video link.

32    First he submits he would suffer substantial prejudice if Mr and Mrs Oswal were cross-examined by video-link. In particular he submits that:

(a)    it is apparent on the pleadings and evidence filed to date that Mr and Mrs Oswal's evidence will be centrally relevant to the issue of intent to defraud within the meaning of s 89(1) of the PLA, as well as other issues in dispute. Neither of Mr or Mrs Oswal could be said to be 'minor' witnesses whose evidence will only be of tangential importance to the proceedings. Mrs Oswal's status as a party, rather than a mere deponent, is a further circumstance arguing against cross-examination by video-link;

(b)    as in Hua Wang Bank, this is a case where crucial issues will be determined based on an assessment of the credibility of Mr and Mrs Oswal, and on evidence adduced in cross-examination on documents, both of which are more safely and satisfactorily done by receiving the evidence in person rather than through audio-visual means;

(c)    in light of the credibility issues outlined above, it is significant that, if evidence is given by video-link, the Court appears to have no legal power to compel Mr and Mrs Oswal to answer questions or otherwise to control the manner in which Mr and Mrs Oswal might give evidence in Hong Kong.

33    What Buchanan J stated in Campaign Master as to the utility of face-to-face cross-examination in the circumstances of cases such as this has been repeatedly followed by other judges of this Court. I accept the Commissioner’s submission that this utility not only benefits the Commissioner but also benefits the Court, which will be required to make credit findings.

34    Secondly, the Commissioner submits that notwithstanding Mr Cabrera's hearsay assertions that the videoconferencing facilities in the Hong Kong International Arbitration Centre are "high-tech" and will result in "real time delivery of information such that the examination of a witness is almost as if he or she is in the same room", no probative evidence of actual transmission speeds, technological suitability, etc, has been adduced. I also accept this submission. My own experience with video hearings has been variable. However, it has not been uncommon, even in hearings of short duration, for there to be, due to technical faults, breaks in transmission, which is plainly disruptive. I have also found the picture quality and sometimes the audio sound to be of poor quality. It is, in my opinion, a far less satisfactory environment for watching and listening to a witness giving evidence including under a lengthy cross-examination involving the extensive use of documents than having the witness in the court room.

35    This is particularly so, in my view, when the central issue involves an allegation that Mrs Oswal executed the mortgage in question with the intention of defrauding creditors. Such serious allegations should, in my opinion, be tested in the formal and solemn atmosphere of a public court where I, as the judge, am able to exercise control over the proceeding. I do not regard it as serving the best interests of the administration of justice in this case including doing justice between both parties that an overseas video link from a private institution should be employed. Moreover, the judicial control able to be exercised over a witness giving evidence remotely from overseas is questionable at least.

36    Thirdly, the Commissioner submits that the reasons proffered by Mr and Mrs Oswal for giving evidence by video-link falls far short of the "persuasive case" required in Campaign Master. There is no practical impediment to Mr and Mrs Oswal attending in Perth. Rather, their "serious concern" is that DPOs would be issued by the Commissioner if they were to travel back to Australia to give evidence in the Proceedings and the attendant consequences for their children and Mr Oswal’s parents that would flow from the issuing of DPOs. The Commissioner submits, following Seymour, that this is not a proper basis for leave and that the general policy of the law should be to discourage litigants from escaping the normal processes of the law rather than to facilitate that outcome.

37    Furthermore, the Commissioner submits, as was also pointed out in Seymour at [100] the Oswals are protected by the regime for the issue of DPOs in s 14S and following of the Taxation Administration Act 1953 (Cth). Section 14S contains requirements that must be satisfied before a DPO can be issued. In addition, provision exists for the revocation and variation (s 14T), and review of decisions to issue DPOs (s 14V). If DPOs are issued against Mr and Mrs Oswal, they therefore have a variety of mechanisms open to them to challenge the Commissioner's decision or seek variations that would ameliorate the practical consequences of DPOs.

38    An appeal in Seymour was heard in August and judgment is reserved. The applicant submits that Seymour should not be followed and that to the extent that it rested upon certain policy considerations it is plainly wrong.

39    Mrs Oswal submits that the decision of the House of Lords in Polanski v Conde Nast Publications Ltd [2005] UKHL 10 should be accepted by this Court as the law. This case turned on its own facts. Polanski had refused to attend the trial in England of his defamation action. He was a resident of France and a fugitive from justice from the United States of America from whence he had fled after pleading guilty to a serious sexual offence involving a minor, and before his sentence. His refusal was based not merely, as the applicant submitted, for fear of detention but rather extradition detention with the likelihood of being extradited to the United States to face, no doubt, a lengthy prison term.

40    The judgment was that of a majority of three in a five member court. No Australian court has followed this decision to my knowledge. Whether it has been considered I do not know and the exigencies of an urgent application made just before Christmas have not allowed me to find out. It was not put in submission that it had been so considered.

41    Reliance was also placed on the judgment of Venning J in Erceg v Erceg [2014] NZHC 2601. This was a case similar to Polanski as it involved a witness, although not a party, refusing to attend court in New Zealand out of fear of being arrested and prosecuted in relation to certain tax matters.

42    His Honour, as with the majority in Polanski considered this to be a good reason for him not to return.

43    The circumstances in this case are different. There is no risk of arrest and prosecution or extradition detention. The risk, and I do not know the level of that risk, is that each of Mrs and Mr Oswal may, for a period, be prevented from leaving Australia. I do not know what that period would be if DPOs were served upon them.

44    I accept that a risk exists and that it is not merely a fanciful risk. The applicant contends, as I explained, that to the extent that Seymour had regard for policy considerations to the effect that this Court should not aid those such as the applicant and her husband to avoid the laws of this country, in particular the prospect of service of DPOs upon them, this was plainly wrong. It is both unnecessary and inappropriate for me to consider that question which is one the subject of the appeal in Seymour and where judgment has been reserved. Rather, I am prepared to assume, for the purposes of this application, that a factor in the mix of relevant factors for consideration, is that each of Mrs and Mr Oswal may be the subject of DPOs should they come to Australia to give evidence at the trial of this action.

45    This is not to disregard Seymour. It is simply that, even upon this assumption, I would not grant the relief sought for a number of reasons.

46    I regard the skeletal evidence adduced through an employed solicitor to be far from adequate in seeking the indulgence which they do. This should not be taken to be an adverse reflection upon Mr Cabrera. It is an observation as to the paucity of information provided to him by Mrs and Mr Oswal.

47    The affidavit in support of [12] and [13] deposes:

Evidence in support of Application regarding Mrs Oswal

12.    I am informed by Mrs Oswal and verily believe that:

(a)     Mr and Mrs Oswal have two daughters aged 11 and 17;

(b)     She is the main caregiver of her two daughters when they are not in boarding school;

(c)     While her children are in boarding school, she and her husband visit fortnightly;

(d)     She holds serious concerns that if she were to travel back to Australia to attend the hearing she would be issued with a DPO by the Commissioner that would stop her leaving Australia for an indefinite and uncertain period. Her belief in this regard is informed by the documents annexed at paragraph 9 above;

(e)     A DPO would prevent her having physical contact with her daughters;

(f)     She is very concerned that if a DPO is issued, she will be separated from her daughters for an indefinite period and that this would have a negative effect on them given she is their main caregiver;

(g)     For the above reasons she wishes to avoid travelling to Australia to attend the hearing in person between 29 January 2016 and 5 February 2016;

(h)     She will be able to attend a facility in Hong Kong in order for her evidence to be taken via video link, or in the alternative, through evidence on commission, at a time between 29 January 2016 and 5 February 2016 or such other time as the Court directs; and

(l)    She has no means of paying the alleged tax debt to the Commissioner in order to avoid the issue by the Commissioner of a DPO.

Evidence in support of Application regarding Mr Oswal

13.     I am informed by Mr Oswal and verily believe that:

(a)     Mr Oswal assists his elderly father in conducting business and personal affairs of his family;

(b)     He holds serious concerns that if he were to travel back to Australia to attend the hearing he would be issued with a DPO by the Commissioner that would stop him leaving Australia for an indefinite and uncertain period. His belief in this regard is informed by the documents annexed at paragraph 9 above;

(c)     If he were prevented from leaving Australia, he would be unable to spend time with his children or provide necessary assistance to his elderly mother and father which includes assisting his father with his business affairs;

(d)     For the above reasons he wishes to avoid travelling to Australia to give evidence at the hearing in person between 29 January 2016 and 5 February 2016;

(e)     He will be able to attend a facility in Hong Kong in order for his evidence to be taken via video link, or in the alternative, through evidence on commission, at any time between 29 January 2016 and 5 February 2016 or such other time as the Court directs: and

(f)     He has no means of paying his alleged tax debt to the Commissioner in order to avoid the issue by the Commissioner of a DPO.

48    The evidence in respect of these concerns is, as I have remarked, far from fulsome. There is little detail. I do not know where the Oswals live or where the boarding school or schools attended by their children is or are located. I do not know when the term times start and finish. I do not know whether there are other Oswal family members able to visit the children.

49    It is not uncommon for people to send their children to boarding school in one country although they live in another. Then, in the holidays, the children travel to where the parents are living. I see no apparent impediment to that occurring here should the Oswals be subject to DPOs. Moreover, it is said in submissions that Mrs Oswal is concerned that if she is unable to depart from Australia this will negatively impact upon her eldest daughter nearing the end of her school education. This daughter is aged 17 years. I do not know when she will finish school.

50    The evidence that Mr Oswal assists his elderly father in conducting business and personal affairs is likewise scant. It does not go so far as to say that this assistance, whatever it may be, cannot be provided by Mr Oswal to his father remotely, by electronic communication and/or with assistance from someone located where his father lives, wherever that may be. Nor is it said what assistance he provides to his elderly mother and what alternative arrangements might be available.

51    Moreover, the proceeding is of enormous importance to the Commissioner and in my view, for the reasons I have mentioned, there is a real likelihood that prejudice, both specific and general, both tangible and intangible, will flow against the Commissioner but more importantly will likely diminish the capacity of the Court to administer justice in this case involving as it does serious allegations of fraud against creditors including the Commissioner.

52    Pertinent to these considerations, I refer to the decision in StoresOnline case, where an application for evidence to be given by video link was refused. Edmonds J referred with approval to the observations of Spender J in Australian Competition & Consumer Commission v World Netsafe Pty Ltd (No 1) (2002) 119 FCR 303 citing the following passage from the judgment of Giles CJ in Sunstate Airlines (Qld) Pty Ltd v First Chicago Australia Securities Ltd (unreported, NSW Sup Ct, Giles CJ, No 50006 of 1996, 11 March 1997):

Cross-examination may be more difficult when video evidence is taken because documents have to be transmitted or produced in an unfamiliar manner, because of the delay in voice transmission, or for other reasons and the effectiveness of cross-examination as a weapon in the fight for truth should not be unduly hindered. And in many cases the court is assisted in fact by observance of what is misleadingly called the demeanour of the witnesses upon which the taking of video evidence may impact.

53    The observations of Perram J in Blackrock Asset Management Australia Services Ltd v Wakes (No 2) [2011] FCA 479 at [46] are also apt in this respect.

54    Fifthly, the Commissioner submits that the Proceedings are brought by him in an effort to recover part of an outstanding tax liability of Mrs Oswal totalling in excess of $186,000,000 and concerns real properties valued in excess of $45 million. The Commissioner submits that these circumstances reinforce the appropriateness of an orthodox cross-examination of Mr and Mrs Oswal occurring in this matter. Senior counsel for the Commissioner has informed me, and I accept, that cross-examination of both Mrs and Mr Oswal would be lengthy and involve extensive use of documents.

55    I generally accept the Commissioner’s submissions but in particular I am persuaded that given the central importance of the evidence of Mrs Oswal who is a party as well as that of her husband, the likelihood of a lengthy and complex cross-examination involving a considerable number of documents and where the credibility of these witnesses will be pivotal, they should give their evidence in person in Perth at the trial. This is reinforced by my concerns as to the medium of video evidence and its attendant difficulties.

56    Mercury Services submits that its defence depends to some extent upon an acceptance of the defence of Mrs Oswal. I accept this. However, Mercury Services will be able to present its own case as far as that goes. It is relevant, in this context, that the Commissioner to an extent impugns the mortgage’s validity. Whilst it may suffer the prejudice identified I do not regard this as trumping the considerations which have led me to refuse the application.

EVIDENCE ON COMMISSION

Relevant legislation and principles

57    Section 23 of the FCA confers upon the Court the power to make orders of such kinds as the Court thinks appropriate. Pursuant to s 46, a judge may, for the purposes of any proceeding before him, order that a commission issue to a person, either within or beyond Australia, authorising him or her to take the testimony on oath or affirmation of a person.

58    Part 2 of the Foreign Evidence Act also deals with the examination of witnesses abroad. Section 7(1), which applies to the Federal Court, confers discretion on the Court, if it appears in the interests of justice to do so, to make an order relating to a person outside Australia:

(a)    for examination of the person on oath or affirmation at any place outside Australia before a judge of the Court, an officer of the Court or such other person as the Court may appoint;

(b)    for issue of a commission for examination of the person on oath or affirmation at any place outside Australia; or

(c)    for issue of a letter of request to the judicial authorities of a foreign country to take the evidence or cause it to be taken.

59    Pursuant to s 7(2), which is expressed inclusively, in deciding whether it is in the interests of justice to make an order, the matters to which the Court is to have regard include:

(a)    whether the person is willing or able to come to Australia to give evidence in the proceeding;

(b)    whether the person will be able to give evidence material to any issue to be tried in the proceeding;

(c)    whether, having regard to the interests of the parties to the proceeding, justice will be better served by granting or refusing the order.

60    An applicant must satisfy the Court that "the witness is out of the jurisdiction of the Court, that his evidence is material and that his attendance within the jurisdiction cannot be procured": Hardie Rubber Company Pty Limited v The General Tire & Rubber Company (1973) 129 CLR 521 at 528.

61    If the Court makes an order under s 7(1)(a), s 8(1) permits it, at the time of making the order or at a later time, to give such directions as it thinks just relating to the procedure to be followed in relation to the examination, including directions about:

(a)    the time, place and manner of the examination; and

(b)    any other matter the Court thinks relevant.

62    The Foreign Evidence Act also regulates the use that can be made of testimony obtained on commission. In particular, under s 9(1), the Court may, if it thinks fit, permit a party to the proceeding to tender as evidence in the proceeding a person's evidence taken in an examination held as a result of an order under s 7(1) or a record of that evidence.

63    As s 9 makes clear, the taking of evidence on commission does not form part of the trial of the proceedings in which the order for issue of the commission is made. The examination is a "private proceeding" which is not accessible to the public: Indochina Medical Co Pty Ltd v Nicolai [2013] NSWCA 436 at [46]-[49]; Magnusson v ACT Health and Community Care Service [2001] ACTSC 3 at [9]. As a result, one of the "fundamental features of court proceedings is absent": Indochina at [46].

Procedural steps which must be taken

64    Division 29.2 of the Federal Court Rules 2011 (Cth) (FCR) relate to evidence taken on commission in Australia or abroad. In particular, r 29.13 provides that rules 29.14 to 29.22 apply if an order is made under s 7(1)(a) or (b) of the Act, with any necessary changes, and subject to any directions given by the Court under s 8(1) of the Act.

65    Federal Court Practice Note CM19 also applies to applications for an order to appoint a judge to take evidence out of Australia.

66    Paragraph 2.1 sets out requirements which must be addressed in the draft order to be lodged with any application.

67    Paragraph 3.1 states that "under Government policy, all official overseas travel by judges of the Court must be approved by the Chief Justice" and that "the hearing of any application should be timed to allow the judge hearing it to consult with the Chief Justice and ascertain whether, should an order to appoint a judge to take evidence out of Australia be made in the proceeding, approval to travel will be given".

68    Paragraph 4.1 sets out notifications that must be made following any order appointing a judge to take evidence out of Australia, including the following:

(a)    a letter from the Chief Justice to the Chief Justice's counterpart in the overseas jurisdiction, and the Attorney General, to obtain permission for the judicial officer to examine witnesses in that jurisdiction;

(b)    a letter from the relevant District Registry to the Department of Foreign Affairs and Trade to ensure that the relevant foreign government authorities are informed and that all approvals are sought including approval for the examiner to administer an oath or affirmation; and

(c)    a letter from the relevant District Registrar to the relevant court administrator in the overseas jurisdiction to obtain courtroom or chamber accommodation, if required.

Application of the Hague Convention

69    Hong Kong is a party to the Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil or Commercial Matters (Hague Convention). Chapter II of the Hague Convention relates to the taking of evidence by diplomatic officers, consular agents and commissioners. In particular, Article 17, which applies to Hong Kong, provides that:

Article 17

In a civil or commercial matter, a person duly appointed as a commissioner for the purpose may, without compulsion, take evidence in the territory of the contracting State in aid of proceedings commenced in the courts of another Contracting State if -

(a)    a competent authority designated by the State where the evidence is to be taken has given its permission either generally or in the particular case; and

(b)    he complies with the conditions which the competent authority has specified in the permission.

A Contracting State may declare that evidence may be taken under this Article without its prior permission.

70    The competent authority for the purposes of Article 17 is the Administrative Secretary of the Government of the Hong Kong Special Administrative Region.

71    As far as the Commissioner is aware, no declaration has been made that evidence may be taken in Hong Kong under Article 17 without its prior permission.

72    Case management considerations are relevant in determining any such application. Emmett J in Huang v University of New South Wales [2010] FCA 208 dismissed an application under ss 7 and 9A of the Foreign Evidence Act for the issue of a letter of request to foreign authorities to take evidence in Korea to be used in proceedings in the Federal Magistrates Court. The Federal Magistrates Court had declined to make an order vacating the trial date. Emmett J held that, in view of the imminence of the hearing date, he was not persuaded that an order should be made under s 9A on the basis that there would be no utility, because the time necessary to observe the formalities of obtaining evidence from Korea was simply not available. This conclusion was upheld on appeal.

73    Mrs Oswal's application to give evidence on commission suffers from the same difficulty and is made at a time that renders it likely practically impossible for the procedural and diplomatic preconditions of giving evidence on commission to be satisfied before the trial of the proceedings commences on 29 January 2016.

74    I would for this reason alone in the context of case management principles and s 37M of the Federal Court of Australia Act not order the taking of Mr and Mrs Oswal’s evidence on commission. Again, it is as a result of the forensic decision to which I have referred above that Mrs Oswal has placed herself and the Commissioner as well as the Court in this difficult and uncertain predicament. She is to that extent the author of the consequences which have ensued.

75    However, my reasons for refusing to make an order that their evidence be taken by video-link are also apt to this alternative relief sought.

76    The application will be dismissed. The first respondent will be ordered to pay the costs in relation to the application to the Commissioner.

Associate:

Dated:    23 December 2015