This is an application by the first and sixth defendants for an order that the first defendant, Alex Ali Assaf, be granted leave to give evidence at the hearing commencing on 8 August 2022 by audio-visual link (AVL) from Lebanon. The plaintiff, Reliance Financial Services Aust Pty Ltd (Reliance Financial), opposes the application. For the reasons that follow, I have granted the application, subject to conditions.
Reliance Financial Services Aust Pty Ltd v Assaf [2022] NSWSC 1061 | Case summary | Zoe
These proceedings, which were commenced by Reliance Financial on 14 September 2021, concern an amount of $250,000 which Reliance Financial claims that Mr Assaf induced RFFK Pty Ltd (RFFK) to loan and invest in a company, Bnktown Pty Limited (Bnktown; deregistered), pursuant to an oral agreement which provided that Mr Assaf guaranteed payment of the loan and any interest and which agreement was subsequently recorded in writing.
Reliance Financial, who claims to have been assigned RFFK's rights as against Mr Assaf and his assets, sues Mr Assaf and other defendants in connection with the $250,000 for breach of contract and breach of s 18 of the Australian Consumer Law (Competition and Consumer Act 2010 (Cth), Sch 2). It also seeks declarations that three properties of which Mr Assaf is a registered proprietor are subject to charges for payment of the amount of the $250,000 plus interest (which now total $5,255,593.78) and that loan deeds between Mr Assaf and three of the defendants, which are said to support caveats on title to the properties, are avoided and void as alienation of property pursuant to section 37A of the Conveyancing Act 1919 (NSW).
Mr Assaf denies entering into any contract with RFFK in relation to the $250,000 loan and investment. He denies having the conversation upon which the oral contract claim relies and denies signing the alleged agreement and receipt upon which the written contract claim relies. He also denies engaging in any misleading conduct or that there is any basis for the declarations or other relief sought.
On 1 February 2022, Ward CJ in Eq (as her Honour then was) fixed this matter for hearing before me for five days commencing on 8 August 2022. At a pre-trial directions hearing held on 20 July 2022, Mr Assaf's solicitor informed the Court that Mr Assaf may need to give evidence via AVL as he was overseas.
Mr Assaf's application to give evidence via AVL is made by notice of motion dated 27 July 2022 and is supported by affidavits from Mr Assaf sworn 27 July and 2 August 2022. Reliance Financial relies on an affidavit from Sam Cassaniti, who is an authorised officer of the plaintiff, sworn 29 July 2022 and two affidavits from Emily Carruthers, the plaintiff's solicitor, affirmed 29 July and 1 August 2022. The parties also rely on written submissions.
Mr Assaf seeks to give evidence via AVL on the basis that he is permanently residing in Lebanon and provides care for his father, who also lives there. Mr Assaf wishes to remain and give evidence from Lebanon as he is concerned about travelling to Australia and exposing himself and possibly his father to the risks in connection with the COVID-19 pandemic and because he needs to provide ongoing care to his father.
Mr Assaf's father is 75 years old. He was diagnosed with kidney cancer in 2020 and had his left kidney removed in January 2021. According to Mr Assaf, he relocated to Lebanon in or around mid-December 2021 to be the sole carer for his father, who had returned to live in Lebanon the previous month. As described in Mr Assaf's affidavit, Mr Assaf lives with his father and provides him with daily support, including by giving him medications, and there are no other family members available to care for him on a daily basis.
Mr Assaf also gives evidence that his sole source of income is derived from a small business he operates in Lebanon and that he would incur significant travel and accommodation costs if he had to travel to Australia as he no longer maintains residence in this country.
Reliance Financial submits that the Court should refuse to make the order because making it now would be unfair to it for essentially three reasons. First, it submits that procedural fairness has been denied by the lateness of the application which it says could and should have been brought in February 2022. It submits that it may have had time to obtain evidence to disprove that Mr Assaf does not leave Lebanon and that his father is dependent upon him if the application had been made earlier.
Second, Reliance Financial submits that to permit Mr Assaf to give evidence via AVL may result in unfair prejudice as the resolution of the key issues in the proceeding will turn on credit.
Third, and accepting it is a speculative submission, it says it will be denied any realistic opportunity to seek leave to appeal should the direction be given.
Reliance Financial submits that an inference is available that Mr Assaf's application was deliberately made late and because he wishes to avoid scrutiny at the trial. Reliance Financial's submissions also note the lack of evidence about whether there is any local imposition on the giving of evidence and the administration of the oath and the availability of the necessary AVL facilities in Lebanon.
The Court has broad discretionary power under the Uniform Civil Procedure Rules 2005 (NSW) and the Evidence (Audio and Audio Visual Links) Act 1998 (NSW) (EAVL Act) to make orders for the evidence of a witness to be given by AVL: EAVL Act, 5B, UCPR, r 31.3.
Section 5B(1) of the EAVL Act provides that the Court may direct that a person (whether or not a party) give evidence by AVL from a place outside Australia. Under section 5B(2):
(2) The court must not make such a direction if -
(a) the necessary facilities are unavailable or cannot reasonably be made available, or
(b) the court is satisfied that the evidence or submission can more conveniently be given or made in the courtroom or other place at which the court is sitting, or
(c) the court is satisfied that the direction would be unfair to any party to the proceeding, or
(d) the court is satisfied that the person in respect of whom the direction is sought will not give evidence or make the submission.
The relevant principles applicable to the Court's exercise of its power to make a direction under section 5B of the EAVL Act were recently considered by Hammerschlag CJ in Eq in In the matter of Mulberry Capital Management Pty Limited v Shen - AVL Application [2022] NSWSC 1023, see in particular at [11] - [14] (Mulberry).
Mr Assaf, as the party seeking the order, bears the onus of establishing that it is appropriate to make the order.
The first issue raised by the application is whether it would be unfair to Reliance Financial if the Court were to make the direction. Having considered the evidence and submissions, and while accepting it is finely balanced, I am not satisfied that it would be unfair.
I accept that the evidence to be given by Mr Assaf will be significant to the issues in the proceedings and that credit will be a significant matter to be determined by the Court. I also accept that, ordinarily, when a party's evidence is to be challenged and credit is in issue, it is generally preferable for the person to be present in Court: Mulberry at [20]. However, I am not satisfied that the use of AVL technology would lead to significant prejudice of the nature contended by Reliance Financial. Since the start of the COVID-19 pandemic, many hearings have proceeded with evidence and submissions given by AVL only. From my own experience, and as recognised by judges in this and other courts, evidence given by AVL, even when credit has been a significant issue in proceedings, has not necessarily been less effective or less just than evidence given in person: see, for example, Mulberry at [23]; Australian Securities and Investments Commission v GetSwift Limited [2020] FCA 504 at [33]; Stott v Advanta Seeds Pty Ltd [2020] NSWSC 846 at [12]; Touma v Diocese of Saint Maron, Sydney [2020] NSWSC 1926 at [14] and [29].
Further, and to address any residual concern of Reliance Financial about any element of unfairness and the need to level the 'playing field', I propose to adopt Hammerschlag J's approach in Mulberry and allow counsel for Reliance Financial to elect to have his main witness (who I understand to be Angelo Rosso) give evidence remotely or to be in Court with cross-examining counsel being remote: see Mulberry at [26].
As to the alleged procedural unfairness and delay, Mr Assaf's submissions accept, appropriately in my view, that the application could have been made earlier. There is also some evidence that raises questions in my mind as to the need for Mr Assaf to remain in Lebanon to care for his father on a daily basis and whether he has remained in Beirut or has been travelling during the recent period. The documents produced from the father's doctor on subpoena refer to the father, as at 19 November 2021, having "looked after himself extremely well...about to head overseas...no concerns in regards to that" and wanting to meet him in a year's time. The evidence from Mr Cassaniti also suggests that Mr Assaf may have set up businesses in Dubai and Turkey, although it is not clear whether he has travelled to those countries to do so. A notice to produce issued by Reliance Financial seeking the production of Mr Assaf's passport has not been responded to and Mr Assaf's affidavits refer to a business address in Australia, rather than an address in Beirut.
That said, in my view Reliance Financial has suffered limited prejudice as a consequence of the delay in the application being made. Irrespective of the extent of Mr Assaf's father's health needs and Mr Assaf's asserted inability to travel due to his caring obligations and whether he has done so, the application is also made based on the risks of contracting COVID-19 if he had to travel to Australia at this current time. There may no longer be any restrictions on international travel to and from Australia but, as Hammerschlag J observed in Mulberry, credence should be given to an objection not to travel to Australia having regard to the current COVID-19 conditions in this country. As his Honour noted, there has been a significant spike in infections in this country.
Mr Assaf's affidavit also attaches an extract from the Australian Government Department of Health and Aged Care website (www.health.gov.au). It provides an update on COVID-19 case numbers and statistics as at 26 July 2022 which identifies an estimated 377,251 active cases in this country.
Leaving to one side Mr Assaf's position, there is the issue of his father's health to take into account on this application and the evidence indicates that his father is elderly, diabetic and recovering from cancer.
As to the other matter raised by Mr Assaf, in the absence of any proper understanding of his financial position, I am not persuaded that the cost of travel and accommodation is of any significance on this application.
I am not satisfied that the necessary facilities are unavailable. Mr Assaf gives evidence that he has made arrangements to access AVL facilities at a business class lounge in an international hotel in Beirut with high speed, cable-based internet. He will have access to split screens, an onsite IT technician, a separate computer with an electronic court book, a hard copy court book if needed and printing facilities for additional documents as needed during the course of the hearing.
Mr Assaf also gives evidence that he has made inquiries and believes that he is able to make an oath in a foreign jurisdiction, thus addressing the concern raised as to whether there is any local law impediment on the taking of evidence on oath.
Overall, I am satisfied that the order sought by Mr Assaf should be granted. While accepting that there has been some delay to the application and testing the credit of a witness in person may be preferable to AVL evidence, in my view it is in the interests of justice to grant the application to make the AVL order in the circumstances of this case. While noting that technical issues with remote connections and AVL evidence can occur, they have reduced significantly over time and the Court and parties have experience running remote hearings. A trial of the facilities will be conducted at the end of the first day of the hearing to ensure that Mr Assaf's AVL system is functioning. I also propose to make conditions similar to those imposed by Hammerschlag J in Mulberry, including reserving the right to revoke the AVL order if, during the giving of Mr Assaf's evidence, the Court concludes that to continue would be unfair to Reliance Financial. I will hear the parties, either today or at the start of the hearing, as to whether or not any additional conditions should be imposed.
As to costs, I note that Mr Assaf does not contest Reliance Financial's application for costs of the motion.
For these reasons, I make the following orders:
1. Direct that the First Defendant, Mr Alex Ali Assaf, give evidence by audio-visual link (AVL) from Beirut, Lebanon in the trial of these proceedings commencing on 8 August 2022.
2. The First Defendant to ensure that, at the time he gives his evidence, no-one else will be present in the hearing room save for any independent person whose presence is necessary to assist or deal with any technical or administrative issues and whose name and details have been communicated to the Plaintiff's solicitors in writing not later than 48 hours before the First Defendant is due to give evidence.
3. The First Defendant is to bear the costs of the establishment of the AVL facilities and the making of all administrative arrangements for the taking of the evidence, which costs are to become costs in the cause unless the Court otherwise orders.
4. The Court reserves the power to revoke or modify these orders should, during the First Defendant's evidence, the Court be satisfied that to continue doing so by AVL would be unfair to the Plaintiff, noting that the Court does not propose to exercise this power if the Plaintiff opposes it.
5. Grant liberty to the First Defendant's solicitors to liaise with Henry J's Associate to arrange a time for a trial run of the AVL facilities at 4.15pm on Monday 8 August 2022.
6. The First Defendant to pay the Plaintiff's costs of the application to give evidence via AVL.
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Decision last updated: 08 August 2022
Parties
Applicant/Plaintiff:
Reliance Financial Services Aust Pty Ltd
Respondent/Defendant:
Assaf
Legislation Cited (5)
Australian Consumer Law (Competition and Consumer Act 2010(Cth)