Mahmood v Abdul Wahid and Sons Pty Ltd, in the matter of Abdul Wahid and Sons Pty Ltd

1. The Defendants' interlocutory application of 8 October 2021 is dismissed.
2. Subject to any contrary order of the trial Judge, the first week of the trial be heard in Adelaide and the rest of the trial in Sydney.
3. Subject to the following order, the costs of the Defendants' interlocutory application of 8 October 2021 are to be costs in the cause.
4. If any party seeks a different order as to costs, that party is by 12 noon (ACDT) on 7 December 2021, to file and serve a written submission limited to three pages in support of the proposed order. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

WHITE J: 1 In a judgment on 16 November 2020 in Action SAD122/2020 (the Primary Action), I dismissed the defendants' interlocutory process seeking the transfer of these proceedings to the New South Wales District Registry of the Court: Mahmood v Abdul Wahid and Sons Pty Ltd, in the matter of Abdul Wahid and Sons Pty Ltd [2020] FCA 1689. 2 Since that time, the plaintiff (Mr Mahmood) has, pursuant to leave granted on 20 May 2021 (Mahmood v Abdul Wahid and Sons Pty Ltd, in the matter of Abdul Wahid and Sons Pty Ltd (No 2) [2021] FCA 535) commenced derivative proceedings (Action SAD103/2021) in the name of Abdul Wahid and Sons Pty Ltd against one of the defendants in Action SAD122/2020 and against two others (the Derivative Proceedings). The three defendants to the Derivative Proceedings are Mohammad Arif Rana, Asmat Pty Ltd and Farah Saleem. The Court has made orders that the two proceedings proceed together and that the evidence in the one be evidence in the other. 3 On 8 October 2021, the defendants in the Primary Action filed an interlocutory application seeking an order that both that Action and the Derivative Proceedings be "continued in the New South Wales District Registry of the Court". This judgment concerns that application. 4 As I noted in the judgment of 16 November 2020, these proceedings arise from a dispute between two brothers about the conduct of service station businesses in New South Wales from 1996. The businesses were conducted, at least initially, by the first defendant Abdul Wahid and Sons Pty Ltd (AWS). The plaintiff in the Primary Action (Zahid) managed the businesses with the second defendant (to whom I will refer as Arif) and a third brother (to whom I will refer as Zieb). Both Zahid and Arif were actively involved in the businesses and participated as equal shareholders and joint directors of AWS. In 2003, Zahid moved to Malaysia to take up university teaching and thereby ceased day to day hands on involvement in the conduct of the businesses. Arif continued the day to day conduct of the businesses. 5 Zahid claims that, between 2003 and August 2019, he continued to have involvement (sometimes by remote means and sometimes on his returns to Australia) in the management of AWS. He also claims that, between 1996 and 2019, AWS purchased, developed and disposed of substantial assets. 6 In 2019, a dispute arose between the brothers as to whether Zahid has any continuing entitlement to income from the businesses or an interest in AWS. Zahid alleges that since at least September 2019, he has been excluded from participation in the management of AWS. He also alleges that in April 2020, Arif wrongfully lodged a Change of Company Details document with the Australian Securities and Investments Commission (ASIC) by which it was asserted that he had ceased to be a director of AWS as and from 1 January 2009. Zahid alleges that this document was lodged without reference to him and without any proper authorisation. 7 In the Primary Action, Zahid seeks numerous forms of relief including orders giving him access to the books of AWS and relief pursuant to s 233 of the Corporations Act 2001 (Cth). He also asserts breaches of Arif's duties as director of AWS. 8 In the Derivative Proceedings, the plaintiffs seek relief of a generally counterpart kind but including a declaration that Zahid holds 50% of the shares in AWS and that he continues to be a director of AWS. In addition, the plaintiffs seek declarations as to breaches of various duties owed by Arif and consequential relief. They seek relief against the second and third defendants in the Derivative Proceedings on the basis of their alleged involvement as accessories. 9 In the judgment on 16 November 2020, I referred to the principles on which the Court acts in considering applications for the transfer of proceedings from one Registry of the Court to another and considered the factual matters upon which the parties relied. Amongst other things, I noted that there was some uncertainty at that time as to the persons who would give evidence at the trial and said that the shape and likely duration of the trial could not be anticipated with confidence. I also noted that the decision on the transfer application did not foreclose orders as to the place at which the trial should take place. 10 At the hearing of the interlocutory application filed on 8 October 2021, counsel for the defendants said that the application was not so much about the transfer of the proceedings to the New South Wales District Registry of the Court but about the place of trial. The order which the defendants seek on the interlocutory application is that the whole of the trial take place in Sydney. 11 The plaintiffs oppose that order and seek instead that the trial take place partly in Adelaide and partly in Sydney. 12 The defendants have previously estimated a trial of approximately eight days and the plaintiffs a trial of between 10 and 15 days. For present purposes, I consider it appropriate to proceed on the basis of the longer estimate. 13 The defendants again emphasised the significant New South Wales connection in the circumstances giving rise to the litigation. I accept that those connections exist or have existed and they need not be detailed presently. The defendants also emphasised that Arif and his family reside in New South Wales, as do many of the witnesses who will give evidence in the trial, and the fact that his solicitors and counsel are Sydney based. I indicate now that, as was the case in the judgment of 16 November 2020, I do not attach significant weight to the location of the solicitors and counsel. The defendants made their choice of solicitors and counsel knowing that this was a matter which had been commenced in the South Australian Registry of the Court and therefore of the potential for the trial to take place wholly or at least partly in Adelaide. 14 Counsel for the defendants made the following points in support of the application: (a) fifteen of the 21 contemplated witnesses at trial live in Sydney or Newcastle; (b) one of the remaining six witnesses is based in Melbourne and so, irrespective of the place of trial, will have to travel; (c) only five of the proposed witnesses are South Australian based; (d) the extra costs involved for the parties and, depending upon the identity of the trial judge, for the Court if the trial takes place in two locations; and (e) the potential disruption to the trial if the parties have to "pack up" and relocate partly through a trial. 15 Counsel also referred to the evidence, contained in the affidavit of the defendants' solicitor, that Arif is the primary caregiver for his elderly mother who is said to suffer from serious medical conditions. I do not disregard that evidence and have taken it into account. However, it is appropriate also to take into account that the evidence is given by Arif's solicitors on instructions from Arif and it is evident at this stage that there are likely to be issues at the trial concerning Arif's creditworthiness. In this respect, it may be pertinent that Arif has not deposed himself to the circumstances concerning his mother. Moreover, as counsel for the plaintiffs pointed out, Arif will have to be present in Court for substantial periods during the trial so that arrangements will have to be made in any event for the proper care of his mother. There do seem to be a number of other available family members and the hearsay evidence of the defendants' solicitor does not indicate clearly why they will not be able to provide the requisite assistance. 16 The defendants also referred to, and relied upon, the oft-cited statements of Buchanan J in Campaign Master (UK) Ltd v Forty Two International Pty Ltd (No 3) [2009] FCA 1306; (2009) 181 FCR 152: [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 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. 17 Counsel noted that these observations of Buchanan J were endorsed by the Full Court in Mulherin v Commissioner of Taxation [2013] FCAFC 115 and in Commissioner of Taxation v Oswal (No 5) [2015] FCA 1504 at [26]-[35]. He submitted that these matters demonstrated the importance of the trial taking place with all relevant participants, including legal representatives, witnesses and the trial judge, being in the same location. Counsel contended that it would not be appropriate for one party, or one party's legal representatives, to appear remotely for the trial as has been the case during the interlocutory stages of the proceedings. 18 Counsel for the plaintiffs also sought that the cross-examination of at least the principal witnesses in the trial take place in person. 19 By reason of the COVID-19 pandemic, the Court has now had more experience with online hearings than was the case when Campaign Master was decided and there have been cases in which trials have been able to be completed satisfactorily with the taking of evidence online. However, in the circumstances of the present case, I am inclined to attach significant weight to the submissions of the respective counsel that the evidence of at least the principal witnesses in the trial should take place with all persons present in the one courtroom. That is particularly so having regard to the prospect that most of the issues in the trial are likely to be factual. 20 Counsel also referred to the potential impact on movements between New South Wales and South Australia as a result of the COVID-19 pandemic. That potential is ever present but I have not considered it appropriate to give it significant weight given the prospect of change in the circumstances of the COVID-19 pandemic, the restrictions to which it gives rise, by the time of trial. 21 Counsel for the plaintiffs emphasised the financial embarrassment for the plaintiffs if they are required to fund the conduct of the whole trial in Sydney. That will result from the significant costs involved in transporting Zahid, his wife, his legal team and his witnesses to Sydney from Adelaide and accommodating them there. Counsel referred to the evidence indicating that Zahid has no present income and that his only primary asset is his home at Golden Grove, a suburb of Adelaide. Counsel noted in this respect Zahid's evidence that he had been expecting to be able to rely, in his retirement, on his entitlement to a share in the proceeds of the businesses conducted by AWS. I understood counsel to be asserting in this respect that Zahid's financial position is a consequence of the conduct of the defendants which is in issue in the proceedings and that the defendants should not be able to take advantage of that circumstance. Although counsel did not say so, I understood him to be invoking the principle applied in security for costs applications in circumstances of this kind: Farrar v Lacy, Hartland & Co (1885) 28 Ch D 482 at 485. 22 If the trial does commence in Adelaide and then, part way through, relocates to Sydney, there is the prospect of some disruption. However nowadays, it is not uncommon for counsel and solicitors, at least, to travel to, and return from, a trial in another State and generally that is not regarded as unduly disruptive. Likewise, depending upon the exigencies of the Court's business, it is not uncommon for judges and Court staff to travel to another State or Territory to undertake hearings. Moreover, it is not unknown for a trial to take place in more than one location. In fact that is a common experience in the hearing and determination of applications for a determination of native title. Accordingly, while I do not disregard this aspect of the defendants' submissions, I do not attach to it the significance sought by the defendants. 23 In my view, the proposal of the plaintiffs for the conduct of the trial involves a sensible compromise between the respective interests of the plaintiffs and the defendants. On the plaintiffs' proposal, the first week of the trial would be in Adelaide and all South Australian based witnesses and the Melbourne based witness would be called in Adelaide. If that took the whole or the greater part of the first week, the trial could then be adjourned to resume in Sydney on the following Monday. I doubt that that would involve significant disruption or dislocation to the conduct of the trial. I accept that it would mean that Arif would have to travel to Adelaide and it may well be the case that the trial judge would think it appropriate, if the plaintiffs' case finished sooner, to commence the taking of Arif's evidence in Adelaide before resuming in Sydney. 24 The defendants' proposal would involve the whole of the inconvenience and financial cost of the place of trial being borne by the plaintiffs. The plaintiffs' proposal, on the other hand is fairer as it involves a sharing of those detriments. 25 For these reasons, I dismiss the defendants' application. The parties should proceed on the basis that, subject to any contrary order of the trial judge, the first week of the trial will be in Adelaide and thereafter the trial will proceed to its conclusion (including submissions) in Sydney. 26 I have not heard from the parties with respect to the costs of the application. However, my preliminary view is that, as the application involved a case management issue which would have to have been addressed in any event, the order should be for costs to be in the cause. That is the order I will make. However, if any party wishes to contend for a different order, that party must file and serve a written submission (limited to three pages) by 12 noon (ACDT) on 7 December 2021. If such a submission is filed, I will make directions for the filing of a responsive submission and determine the issue of costs on the papers. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice White.