The Commissioner's Opposition
14 The Commissioner opposed Mr Arnold's application on the following grounds. The Commissioner submitted that Mr Arnold's evidence is centrally factual to the dispute in a number of respects; indeed, at that time and absent the evidence filed by the respondents over the last two weeks, he was the respondents' case. The Commissioner submitted that it will be critical to the outcome of the case for the Court to assess Mr Arnold's credit, in particular, his evidence as to the veracity and genuineness of various loan agreements and his evidence concerning the ruling obtained from the Australian Taxation Office. Senior Counsel for the Commissioner estimated that Mr Arnold's cross-examination would be in the order of a couple of days, at least a day and a half, and that his cross-examination would involve taking him through many documents, a task which would be exceedingly difficult to effectively conduct and manage if he was to give his evidence by video link.
15 The Commissioner indicated that he was not in a position to assess the impact on Mr Arnold's business if he was to come to Australia. The Commissioner pointed out however, that Mr Arnold's stay here would only be short and that the period of his absence from his business would be no more than about one week. In any event, the Commissioner submitted, that was a subordinate consideration to the issue of Mr Arnold's credit, the importance of his evidence to the factual findings of the Court and the efficiency with which the case could be conducted.
16 In Australian Competition and Consumer Commission v Pirovic Enterprises Pty Ltd [2014] FCA 544 (27 May 2014), Flick J canvassed the authorities on both sides of the fence at some length and concluded, correctly in my view, that the exercise of the discretion conferred by s 47A(1) must be guided by the facts and circumstances of the individual case in which permission is sought to adduce evidence by way of video link. His Honour, again correctly in my view, indicated that it would be unwise, if not impossible, to attempt any exhaustive list of considerations relevant to the exercise of the discretion. Despite the lack of wisdom in doing so, his Honour indicated (at [11]) that the following considerations may assume relevance:
(1) The extent to which the proposed witness seeks to give evidence of facts relevant to the dispute as opposed to opinions founded upon, or largely founded upon, agreed facts or assumptions;
(2) whether the parties are in agreement as to the utility in allowing evidence to be given by way of video link;
(3) whether the proposed evidence is centrally relevant to the issues to be resolved or more tangential to those matters of real dispute;
(4) the extent to which any cross-examination may be inhibited by the absence of the witness being present;
(5) the relevance of the evidence the subject of any cross-examination - the more limited the cross-examination and the more questionable the relevance of the evidence the more limited may be the prejudice to the cross-examiner;
(6) the reasons proffered by the witness as to the inability to come to Australia; and
(7) the practical impediments that a refusal to allow cross-examination to proceed by way of video link upon the ability of a party to present its case.
17 His Honour indicated that considerations in any particular case could also include:
(1) Factors peculiar to the proposed witness, including ill-health or an inability to freely travel to and depart from Australia; and
(2) the extent to which the Court itself may consider that it would be assisted by evidence being given in person.
18 Finally, his Honour said that the overriding consideration must forever remain what is considered by the Court to be in the best interests in the administration of justice, including the need to ensure that justice is done as between the parties. That is undoubtedly correct.
19 Not all of these considerations are relevant in the present case however, those that are relevant, point strongly in the direction that Mr Arnold's application should be refused and that he should be required to give his evidence, and be cross-examined on that evidence, in person. Mr Arnold's evidence goes to the facts central to the dispute and its resolution by the Court; Mr Arnold's application to give his evidence by video link is opposed by the Commissioner; any cross-examination of Mr Arnold will be inhibited if he gives his evidence by video link - both in terms of the efficiency of its conduct and in forensic assessment. Mr Arnold's credit in respect of the evidence he proposes to give is very much in issue in this proceeding.
20 For all these reasons, I am mindful of what was said by Buchanan J in Campaign Master (UK) Ltd v Forty Two International Pty Ltd (No 3) (2009) 181 FCR 152 at [77] and [78]. His Honour there reviewed the authorities (including Australian Competition and Consumer Commission v World Netsafe Pty Ltd (No 1) (2002) 119 FCR 303 and Dorajay Pty Ltd v Aristocrat Leisure Limited [2007] FCA 1502) and observed:
[77] However, with respect to those who have taken a different view, I think there is a significant difference in emphasis in the two lines of authority. One, essentially pragmatic, matter which arises from the differences of view to which I have drawn attention is where the practical onus of persuasion lies. 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 expressed by Spender J in World Netscape [sic] and by Stone J in Dorajay 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. Notwithstanding the increased availability and use of video link technology, in my view, a case must be made out for the use of video link evidence if it is opposed by an affected party. I do not share the view expressed by Katz J. My own view and, I think, the weight of authority, is to the contrary.
21 The only matter which causes me some concern is the possibility that if Mr Arnold was to come to Australia for the hearing, he might be restrained from leaving to return to Canada after the hearing on account of Australian tax liabilities he presently has. My concern in this regard has been alleviated by the Commissioner proffering an undertaking in the following terms:
Having had regard to Mr Arnold's individual circumstances as a person owing tax-liabilities, within the meaning of s 255-1 of Schedule 1 of the TAA, if Mr Arnold comes to Australia to give evidence in this proceeding the Commissioner undertakes not to issue a departure prohibition order, within the meaning of s 14S of the TAA, in respect of Mr Arnold or to seek some other similar form of restraint against Mr Arnold, upon the conclusion of Mr Arnold giving evidence in this proceeding.
22 In the face of this undertaking, and for the reasons previously canvassed, Mr Arnold's application to give evidence by video link must be refused.
23 The costs of this application should be costs in the cause.
I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edmonds.