appellant. The trial was adjourned part heard to 13, 14 and 15 October 2021. The parties were ordered to file a joint timetable for costs submissions by 20 May 2021.
Key principles
Where a party seeks to adduce evidence from a witness located in mainland China, and the requirements of the Hague Convention on the Taking of Evidence Abroad in Civil or...
The court has a discretion whether to grant or refuse an adjournment, and this discretion will not lightly be set aside because decisions on procedural matters are best left to...
The object of courts is to decide the rights of parties and not to punish them for mistakes they make in the conduct of their cases; nothing in the case law may be employed to...
The public interest in the efficient use of court resources is a relevant consideration in the exercise of discretion to adjourn, but must be balanced against the need to permit...
Issues before the court
Whether the intervenor should be permitted to adduce evidence from witnesses located in mainland China by video link when the requirements of the...
Whether the trial should be adjourned part heard to enable the intervenor's witnesses to attend in person or to comply with procedural requirements...
Plain English Summary
This case concerned a family law property settlement where a company (the intervenor) was trying to enforce a $7 million judgment debt. The intervenor wanted to call two witnesses from China to give evidence by video link, but had not followed the proper legal procedures for taking evidence from overseas. The first three days of the four-day trial were wasted arguing about this. The other parties wanted the trial to continue without the Chinese witnesses, but the judge decided to adjourn the trial for five months. The judge found that it would be unfair to make the intervenor proceed without its key witness, who couldn't enter Australia due to COVID-19 border closures. While the intervenor had made procedural mistakes, the judge emphasised that courts exist to do justice, not to punish parties for procedural errors, and that case management concerns cannot override the need for a fair hearing.
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Judgment (51 paragraphs)
Whether the intervenor could rely on affidavit evidence filed in non-compliance with consent orders made on 27 July 2020
FAMILY LAW - EVIDENCE - evidence sought to be led from witness in mainland China when requirements of Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters not met nor Rules 16.05 or 16.06 satisfied.
[4]
The Civil Procedure Law of the People's Republic of China (1991)
Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters. Opened for signature 18 March 1970. 847 UNTS 231 (entered into force 7 October 1972)
State Pollution Control Commission v Australian Iron & Steel Pty Ltd (No 2)(1992) 29 NSWLR 487
[21]
(1) The trial of this proceeding is adjourned part heard to 13, 14 and 15 October 2021.
[22]
(2) On or before 4pm on 20 May 2021 the parties must file a joint timetable for the filing of material on the issue of costs consequent upon this ruling.
[23]
Note: The form of the order is subject to the entry of the order in the Court's records.
[24]
IT IS NOTED that publication of this judgment by this Court under the pseudonym Moy & Pao has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
[25]
Note: This copy of the Court's Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
[26]
Today is the third of four days allocated and fixed for the trial of this proceeding.
The entirety of the first three days of the trial has been exhausted by what the applicant's counsel called "housekeeping matters". As it transpired, that characterisation was charitable but not apt to describe the evidentiary debate that unfolded. To better understand this ruling it is necessary to put the debate in context.
This proceeding was commenced in 2011 in respect of a divorce application. In May 2017 her Honour Judge Bender of the Federal Circuit Court of Australia granted leave pursuant to s 44(6) of the Family Law Act to institute proceedings for property settlement out of time.
On 24 April 2019 her Honour Judge Bender fixed this proceeding for trial on 17 February 2020 on an estimated duration of four days. That fixture was vacated by order made 24 September 2019 and the trial was refixed for 15 June 2020.
The intervenor was granted leave to intervene by order made on 16 May 2017, almost four years ago to the day.
The proceeding did not settle at mediation. By June 2020 the proceeding had been transferred to this court. It came before me on 27 July 2020. Orders were made by consent on that day fixing the case for trial before me on 10 May 2021 for no more than five days. Paragraph 5 of the consent orders made on 27 July 2020 required the intervenor to file and serve its evidence-in-chief of all witnesses including expert witnesses by 15 December 2020. Paragraph 11 of those consent orders stated that no party was to file any further material other than as provided by those orders without leave of the court.
Between 27 July 2020 and the start of the trial, the intervenor made no application for leave to adduce evidence beyond the evidence-in-chief it was ordered to file and serve by 4pm on 15 December 2020.
In accordance with paragraph 2 of the 27 July 2020 orders, on 22 April 2021 a compliance hearing was conducted. On that day counsel for the applicant sought orders for the intervenor to produce certain documents. I refused that application. I asked whether everything was in order for the trial and Mr Smith of counsel for the applicant said it was. Importantly, the intervenor was represented by its solicitor who had represented it since the intervenor was granted leave to intervene. At no stage did the intervenor's solicitor inform me that -
[27]
the intervenor wished to apply for leave to give evidence from China by video link;
2. the intervenor intended to rely on additional affidavits to those covered by paragraph 5 of the consent orders made on 27 July 2020; and
[28]
the intervenor intended to adduce expert evidence from a person other than from a single expert.
The intervenor did not file affidavit evidence in compliance with the date specified in paragraph 5 of the consent orders made on 27 July 2020 namely on or before 15 January 2021.
Backtracking a little chronologically, on 28 January 2021 the solicitor for the intervenor sent an email to my chambers. Various other recipients were included in that email. In it, the solicitor for the intervenor stated that his "clients" (plural, when his client is a company) were available and wished to appear in person at the trial. He said the international border shutdowns may have prevented entry into Australia. His email then recorded the following -
[29]
We wish to inform the court and the parties that it may be necessary to consider our witnesses giving evidence by video or some other virtual means. If these witnesses are unable to gain entry into Australia we anticipate, if required, to seek leave from the court for these witnesses to give their evidence by any virtual means which is acceptable to the Court.
[30]
We would be pleased if His Honour could indicate if this may be acceptable to the Court. We would also be seeking the parties (sic) consent to this proposal if required.
[31]
Several things must be said of that communication. First, it is not appropriate for the solicitor for one of the parties in a case the trial of which is pending before a justice of this court to enter into negotiations with the judge's staff about a procedural step in the case. If the intervenor had an application to make, it should have brought that application on proper material. Second, if that email's purpose was in reality a request for consent from the other parties to the litigation, then that email should have been directed to the other solicitors and it should not have been directed to my associates. Third, and by far most importantly, the email dated 28 January 2021 revealed that the intervenor's solicitor was very much alive to the practical problem presented by Australia's international border closures to this case. He was also alive to the probability that the witnesses for his client would need to obtain leave in order to give evidence electronically. He said as much in his email, when he wrote that if the intervenor's witnesses were unable to gain entry to Australia, the intervenor's solicitor anticipated seeking leave from the court for those witnesses to give evidence electronically. The relevant application for leave was one made under rules 16.05 and 16.06 of the Family Law Rules. Rule 16.05 introduced a 28 day timing requirement.
Having considered that email, on 29 January 2021 I directed my associates to email the solicitor for the intervenor telling him that his proposal for the giving of electronic evidence was acceptable but only so long as the parties agreed to such a proposal.
On the same day, 29 January 2021, the solicitor at that time for the respondent sent an email to my associates and all solicitors in the case pointing out the requirements of rules 16.05 and of the . In other words, by that email the solicitor for the intervenor was on notice that the giving of evidence by his client's witnesses electronically was not by consent and that the procedures set out in and needed to be followed.
[32]
One thing I will say - I probably should have mentioned this at the outset - I'm surprised that I've actually had to front up in court today and I thought that this might be proceeding by video link in which case everybody would be proceeding by way of video link and it's not something that I had turned my attention to.
[33]
It was obvious that compliance with rules 16.05 and 16.06 was very much an issue. Ms Clarkin's submission that she was surprised that she "actually had to front up in court today" was a very large and inappropriate submission. Her client had been told that adducing evidence electronically was contentious. Ms Clarkin representing the intervenor did in fact need to "front up in court today". She was obviously unprepared to debate the point so at Ms Clarkin's request I allowed her time to prepare her submissions in relation to adducing evidence electronically. At 12:38pm I stood the matter down until 2:15pm.
The morning of the first day of the four days allocated for the trial of this proceeding had been exhausted and to that point in time, no party had opened his, her or its case.
At 2:32pm on 11 May Ms Clarkin resumed. She had asked for more time between 2:15pm and 2:30pm. She said the matter was proceeding. She said that she was in the process of settling an affidavit of the controlling person of the intervenor, Mr D. She informed me that his affidavit had been drafted for Mr D to affirm. Ms Clarkin told me a second affidavit from Ms C addressed rules 16.05 and 16.06 of the Family Law Rules. The affidavits of both had not been settled by Ms Clarkin. She said she needed time to settle each before she could assess the extent to which rules 16.05 and 16.06 had been complied with. Mr Smith informed me that he proposed to apply that any further evidence of Ms C or Mr D should be excluded. Ms Clarkin asked for more time to get her client's evidence in an admissible form. At her request I adjourned for the day at 2:58pm on 11 May 2021.
[34]
the interests of the applicant and respondent were aligned and that they accepted that property interests should be divided as to 75% to the applicant and as to 25% to the respondent;
2. the respondent is a judgment creditor in an amount in excess of $7 million and liable to the intervenor in that sum;
[35]
the real issue in this whole litigation is whether the applicant benefited in some way by reason of the respondent's incurring of the judgment debt to the intervenor; and
[36]
if the answer to the question just posed was in the affirmative, to what amount did the applicant benefit.
Mr Smith and Mr Atkinson contended that the determination of that issue was of short compass and the debt owed to the intervenor could be admitted thereby obviating the evidentiary and procedural obstacles that confronted the intervenor. I stood the case down to enable Ms Clarkin to obtain instructions on what I regarded as a very sensible suggestion urged by responsible counsel in this case.
Upon return Ms Clarkin informed me that she had been given instructions to press for her client's witnesses to give evidence electronically or face-to-face. She told me that so that the intervenor was accorded procedural fairness on the point she wished to be heard. I adjourned the proceeding to 10am on the third day of the trial. No party had yet opened his, her or its case.
Ms Clarkin relied on the decision in Haiye Developments Pty Ltd v The Commercial Business Centre Pty Ltd,[9] a decision of Robb J of the Equity Division of the New South Wales Supreme Court. That decision bore certain factual similarities to the facts of this case. Robb J was concerned with a contested application to vacate a trial by reason of the plaintiff's witnesses being in China. As with this case, in that case border closures associated with the COVID-19 pandemic prevented witnesses travelling from China to Australia. The question arose whether audio-visual technology could have been enlivened so that the witness could have given evidence by video link in China. In that case, Robb J addressed Perram J's observations in Motorola Solutions, Inc v Hytera Communications Corporation Ltd[10] where it was conceded that the time had well passed for official permission to have been obtained by the relevant organ of the Chinese government through official channels under the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters. Perram J in Motorola also addressed the effect of the Civil Procedure Law of the People's Republic of China and the argument that the effect of the Civil Procedure Law was that witnesses located within Mainland China who could not attend a trial in Australia because of the COVID-19 pandemic could not be cross-examined on their affidavits because the taking of evidence by the Federal Court of Australia would be an exercise of sovereignty by the Commonwealth of Australia within the territorial confines of China, requiring permission of the Chinese state.
[37]
This Court may take some comfort from the fact that Perram J was sufficiently satisfied that the Chinese Procedure Law may make it unlawful for persons within the mainland of the People's Republic of China to give evidence in Australia by audio video link to justify his Honour proceeding on that basis.
[38]
It may not be necessary to finally decide whether it is or is not unlawful for a Chinese citizen to give evidence in China for use in an Australian court. Suffice it to say that in this case no evidence was adduced of the attitude of the Chinese authorities on point. That tended to render the prospects of the use of the Teams or other electronic means for witnesses Ms C and Mr D impractical at least and probably also impossible, at least today or tomorrow.
That presented a few consequences. First, I am unable to accommodate the resumption of the trial of this proceeding as a four day case until May 2022. I can accommodate the trial of this proceeding as a three day case in October 2021, that is to say, some months away. It may or may not be possible for persons in China to travel to Australia by then. In the meantime, the intervenor may choose to properly invoke rules 16.05 and 16.06 with a view to securing video evidence from the witnesses Ms C and Mr D.
The second issue is whether to force the case on in view of the stated expression by Ms Clarkin that her client wishes to call and rely on the evidence of Ms C and Mr D. It will be recalled that both Mr Smith and Mr Atkinson argued that the case should go on, that they were ready, the case has had a lamentably long history and it cries out for determination. They argued that Ms Clarkin can cross-examine the applicant as well as the respondent without the need to abort the trial just so that Mr D has time (whenever that may be into the future) to travel to Australia to instruct.
Several things must be said of the submission that the trial should go on now in the absence of Mr D.
First, Mr D is entitled to be present as the controlling mind of the intervenor in a trial of this litigation. The intervenor has been shut out of the exercise of its right to execute the judgment debt for many years. It has been forced to wait while this litigation has advanced to trial. Now that the case is at trial, it would be remarkable indeed that the party adversely affected by the four year delay in getting to trial were forced on and in the process denied the opportunity of being heard in relation to what it wishes to put before the court.
[39]
I certify that the preceding fifty-three (53) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Wilson delivered on 13 May 2021.
The trial was adjourned part heard to 13, 14 and 15 October 2021. The parties were ordered to file a joint timetable for costs submissions by 20 May 2021.
No response emerged from the solicitor for the intervenor following the 29 January 2021 email. It could not be disputed that the intervenor was on notice on and from 29 January 2021 that if it intended to adduce evidence from a witness who was unable to physically appear in Melbourne at the trial of this proceeding, the intervenor needed to bring an application under rules 16.05 and 16.06 of the Family Law Rules.
At no stage prior to the commencement of the trial of this proceeding on 11 May 2021 did the intervenor invoke the procedures set out in rules 16.05 and 16.06 of the Family Law Rules.
Soon after appearances were announced on the first day of the trial of this proceeding, Ms Clarkin of counsel for the intervenor informed me of two important matters. First, she said the intervenor wished to rely on several affidavits that had not been previously notified as forming part of the intervenor's material. Secondly, she said she sought leave, ore tenus, to adduce evidence electronically. That provoked forceful opposition by Mr Smith of counsel for the applicant. Mr Atkinson of counsel for the respondent also registered his client's rejection of the steps proposed by the intervenor.
By the end of the first day of the trial, the intervenor had filed several affidavits on which it relied, none of which had been filed in compliance with the dates stipulated in the consent orders made 27 July 2020, namely 15 December 2020. It will be recalled that pursuant to paragraph 11 of my consent orders made 27 July 2020 no party was permitted to file any further material other than as provided for in the 27 July 2020 orders without leave of the court. Strictly speaking, the intervenor needed leave to rely on affidavits filed outside of the time limited by the 27 July 2020 consent orders. By the first day of the trial, none of the intervenor's affidavit material had been filed in compliance with the 27 July 2020 orders. Neither the applicant nor the respondent complained about the intervenor's failure to comply with paragraph 5 of the 27 July 2020 consent orders.
According to its case outline dated 3 May 2021, as at the first day of the trial, the intervenor's evidence was recorded in two affidavits only. They were as follows -
Ms C affirmed 18 February 2021; and
Mr D affirmed 18 February 2021.
Ms Clarkin told me she also relied on an affidavit, not mentioned in the intervenor's case outline, of Mr F made 3 May 2021.
Before going very much further, it is utile to record, at least in précis form, what matters those three affidavits addressed.
Ms C made an affidavit on 18 February 2021. In it she stated that she was a practising Chinese lawyer who had a lawyer identity number that she gave. She did not exhibit to her affidavit her curriculum vitae nor did she depose to her expertise in her practise of Chinese law. That was important by reason of statements of legal principle relating her expert evidence in such cases that I brought to Ms Clarkin's attention, namely Dasreef Pty Ltd v Hawchar,[3]Makita (Australia) Pty Ltd v Sprowles[4] and Honeysett v The Queen.[5] I asked Ms Clarkin whether Ms C's evidence was purportedly given as an expert or whether it was lay evidence. Ms Clarkin told me she needed a break before answering that question which I gave her between 10:43am and 12:07pm on the first day of the trial.
When the case was called on again at 12:07pm Ms Clarkin responded to concerns about the proposed deponent Ms C not exhibiting a curriculum vitae. Ms Clarkin told Ms C could provide a CV "in the next 24 to 48 hours"[6] and that Ms C's affidavit could be provided by the close of business on 12 May. I asked Ms Clarkin why it was proposed by the intervenor that Ms C give evidence at all having regard to the fact that the intervenor was the judgment creditor of a large sum which it wanted paid. Ms Clarkin made a submission to the effect that Ms C intended to give evidence that tended to rebut the respondent's evidence in relation to the validity of an alleged registered mortgage in China. Ms Clarkin submitted that Ms C's evidence was to the effect that no such mortgage existed, that the property in China was owned absolutely by the respondent, that the putative mortgagee did not have a valid claim in relation to that property and, in accordance with principles espoused in Stanford & Stanford[7] a determination about the legal and equitable interests in property in this case included a determination about the legal and equitable interests in that property in China. On that basis Ms C's evidence in her 18 February 2021 affidavit seemed to me to be relevant. Ms Clarkin then submitted that Ms C's affidavit went to a matter of the respondent's credit, namely, the fact that Ms C contradicted the respondent's assertion that the putative mortgagee held a mortgage over that parcel of land. Ms Clarkin submitted[8] that Ms C was to give evidence on the mortgage issue as a witness of fact.
Ms Clarkin's proposal was for Ms C to give evidence remotely and electronically. She contended that the affidavit of Mr F made 3 May 2021 (also filed in non-compliance with paragraph 5 of the consent orders made 27 July 2020) demonstrated that the requirements of rules 16.05 and 16.06 had been satisfied. Mr Smith argued that Mr F's affidavit failed to demonstrate compliance with those two rules. In response Ms Clarkin made the surprising submission that was as follows -
By the end of the first day of the four days allocated for the trial in this proceeding no party had opened his, her or its case and the evidence on which the intervenor indicated it wished to rely had not been formulated.
At 10am on the second day of the trial court resumed. Ms Clarkin told me she was still waiting on the final versions of the affidavits of Ms C and Mr D. She said she had a version of each draft affidavit, neither of which had been affirmed. Quite properly Mr Smith submitted that the draft affidavits, unaffirmed, were no more than proofs of evidence having no evidentiary status. That accorded with my view. Ms Clarkin requested for me to stand the matter down which I did at 10:07am, resuming thereafter. The case was stood down again at 10:47am. The case was stood down yet again at 11:07am at Ms Clarkin's request.
Eventually, past midday on the second day of the trial of this proceeding Ms Clarkin produced a scanned version of the second affidavit of Ms C to which was attached a curriculum vitae. In it Ms C stated that she was admitted to practise in 2018. It stated that she held a science degree. It did not state what her legal tertiary qualifications were. In the period between 2018 to 2020 Ms C purported to attribute in percentage terms an amount (of her time, presumably) in acting for purchasers of residential apartments and for vendors of residential apartments. She attributed a very small percentage of what she called "mortgage works" and half of her work in commercial litigation. Curiously, the percentage total was 130%. She did not describe what she actually did. For the period February 2020 to date she ascribed different percentages to the same four areas of activity. In that period, the percentage total was 120%.
Her curriculum vitae did not address the matters that must be demonstrated if a person's evidence is to be received as that of an expert in accordance with Dasreef, Makita and Honeysett. That may not have mattered because Ms Clarkin indicated the day earlier that she relied on the evidence of Ms C, so far as the mortgage was concerned, as a witness of fact, not as an expert.
Next, Ms Clarkin produced an affidavit of Mr F affirmed on 11 May 2021. He exhibited a document that was in Chinese. I was unable to read it. No translated version of the document was in evidence. Mr F's affidavit made 11 May 2021 was of no assistance insofar as it may have addressed issues relevant to rules 16.05 and 16.06.
Then there was the evidence of Mr D. His affidavit made 18 February 2021 was in non-compliance with the date ordered in paragraph 5 of my 27 July 2020 consent orders. His second affidavit was not dated. It bore what purported to be a signature yet it did not reveal that it had been affirmed in front of a person authorised to take an affidavit. It was defective in that regard. It contained an inadmissible submission in paragraph 8 about the relevance of Ms C's affidavit. He was not qualified to address a submission about relevance.
Mr Smith persisted in his submission that when taken in aggregate, the intervenor had failed to demonstrate compliance with rules 16.05 and 16.06 of the Family Law Rules.
Ms Clarkin conceded that the intervenor had failed to establish compliance with rules 16.05 and 16.06.
In the afternoon of the second day of the trial, Mr Atkinson and Mr Smith jointly advanced a very sensible way forward in this case. In essence, they joined to submit as follows -
At paragraph 45 of Robb J's decision in Haiye Developments, his Honour applied that approach of Perram J in Motorola. There, Robb J held as follows -
Second, Mr D is unable to enter Australia so as to give his evidence by reason of matters beyond his control, namely border security in the wake of the COVID-19 pandemic. He should not be prejudiced by that.
Third, to the extent that any criticism may be levelled at the intervenor for failing to move speedily to instigate the process contemplated by rules 16.05 and 16.06, in the current state of international diplomacy between Australia and China, it could not be said that the speedy provision of the requisite authorisation canvassed in those rules was by any means assured.
Fourth, it would be in my view inimical to the fair conduct of this trial to require the intervenor to press ahead yet to concurrently deny the intervenor reliance on its evidence when circumstances beyond its control have foreclosed on its ability to get that evidence before the court.
Several decisions of the High Court bear upon the issues that fall for my determination. Very often applications to adjourn the hearings of trials are made on the day of the allocated start date of the trial. If granted, any such adjournment adversely impacts not only on the litigants in that proceeding but it impacts on other litigants who have waited patiently for their trial date to be reached. Those considerations were addressed by the plurality in Sali v SPC Ltd.[11] In that case, Toohey and Gaudron JJ held that a decision by a court to grant or refuse an adjournment is a decision made in the exercise of a discretion vested in the court and when that decision is exercised, the decision will not lightly be set aside because decisions on procedural matters are best left to the court seized of the proceeding, as was held in Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc.[12]
It was held in Cropper v Smith[13] that the object of courts is to decide the rights of parties and not to punish them for mistakes they make in the conduct of their cases. That concept was embraced by the plurality of the High Court in Queensland v J L Holdings Pty Ltd.[14] There, the plurality held that nothing in the case law might be employed to shut a party out from litigating an issue which is fairly arguable. Ultimately, the aim of a court is the attainment of justice. No principle of case management can supplant that aim.
While the High Court's decision in Aon Risk Services Australia Ltd v Australian National University[15] concerned a pleading amendment rather than an adjournment application, observations of French CJ apply to both amendment as well as adjournment applications. There, the Chief Justice held that since Sali v SPC Ltd several decisions have accepted that the public interest in the efficient use of court resources is a relevant consideration in the exercise of discretion to amend or adjourn. The decisions to which the Chief Justice referred include State Pollution Control Commission v Australian Iron & Steel Pty Ltd (No 2),[16]Byron v Southern Star Group Pty Ltd[17] and Macquarie Bank Ltd v National Mutual Life Association of Australia Ltd.[18]
It seems to me that an important thread running through Sali v SPC Ltd, J L Holdings and Aon is the need to permit a party litigating an issue fairly arguable and that principles of case management cannot supplant that. I take the view that by making orders requiring the intervenor to proceed without the personal attendance of its guiding mind, Mr D, an unfair advantage would thereby be conferred upon other parties to the detriment of the intervenor. The attainment of justice is key in this case. For that matter a just and equitable order can only be made after all parties have been heard to advance all each wishes to say.
In those circumstances I adjourn the further hearing of the trial of this proceeding, part heard, to 13 October of this year.
Costs may be an issue. I will hear any costs application upon proper material. I direct the parties provide a timetable of all steps consequent upon this ruling and to file it within seven days.