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.