Supreme Court New South Wales Medium Neutral Citation: Haiye Developments Pty Ltd v The Commercial Business Centre Pty Ltd [2020] NSWSC 732 Hearing dates: 11 June 2020 Date of orders: 12 June 2020 Decision date: 12 June 2020 Jurisdiction: Equity Before: Robb J Decision: (1) Order that the hearing in these proceedings fixed to commence on 6 July 2020 and to continue for a period of eight days be vacated. (2) Order that the costs of the application to vacate the hearing be the parties' costs in the cause. (3) List the proceedings in the call over list before the Chief Judge in Equity at 8:30 AM on Tuesday, 16 June 2020 (or such other date as may be fixed at the request of the parties by arrangement with the associate to the Chief Judge). Catchwords: CIVIL PROCEDURE — Hearings — Adjournment — Relevant factors — where an application was made for an order vacating an eight day hearing for reasons caused by the COVID-19 pandemic — where three principal witnesses are citizens of and resident in the People's Republic of China — where those witnesses will need to give their evidence in Chinese through interpreters — where there is no guarantee that an exemption to travel to Australia would be granted by the Commissioner of the Australian Border Force, particularly in the limited time available— where there is at least some chance that it would be unlawful in China for the witnesses to give their evidence by audio visual link — where, in the circumstances, it would not be just to order that the witnesses give their evidence by audio visual link — hearing vacated Legislation Cited: Evidence (Audio and Audio Visual Links) Act 1998 (NSW) Evidence on Commission Act 1995 (NSW) Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters The Civil Procedure Law of the People's Republic of China (1991) Cases Cited: Antov v Bokan (No 2) [2019] NSWCA 250 Australian Securities and Investments Commission v GetSwift Ltd [2020] FCA 504 Capic v Ford Motor Company of Australia Ltd (Adjournment) [2020] FCA 486 David Quince v Annabelle Quince [2020] NSWSC 326 Giam v Patterson [2020] NSWSC 593 Motorola Solutions, Inc v Hytera Communications Corporation Ltd (Adjournment) [2020] FCA 539 Category: Procedural and other rulings Parties: Haiye Developments Pty Ltd (first plaintiff) Jianzong He (second plaintiff) Haiqiang He (third plaintiff) The Commercial Business Centre Pty Ltd (first defendant) Nickolas Varvaris (second defendant) Pionnier Property Development Pty Ltd (third defendant) Citywide Financial Services Group Pty Ltd trading as Varvaris & Co (fourth defendant) Pionnier Pty Ltd (fifth defendant) Hua Liu (sixth defendant) Kei Kwok (seventh defendant) A&T Education Holdings Pty Ltd (eighth defendant) Citywide Property Group Pty Ltd (ninth defendant) Red Horizon Travel Services Pty Ltd (tenth defendant) Representation: Counsel: A Cheshire SC / S Jeliba (plaintiffs) C Bavin (sol) (first defendant) G Sirtes SC / A Oakes (fifth to eighth defendants) Solicitors: Mills Oakley (plaintiffs) Hunt & Hunt (first defendant) Juris Cor Legal (fifth to eighth defendants) File Number(s): 2017 / 69394 Judgment 1. These proceedings were commenced by statement of claim filed on 9 June 2017. 2. They were therefore considered to be in the informally described "old matters list" when, on 17 October 2019, the proceedings were fixed by Ward CJ in Eq for hearing before me commencing on 6 July 2020 with an eight day estimate. In the ordinary course it would therefore be highly desirable that the proceedings be heard and determined at the allotted hearing. 3. On 11 June 2020, I heard an application by the plaintiffs for an order vacating the hearing for reasons caused by the COVID-19 pandemic. The application was resisted by the defendants who remain active in the proceedings. 4. The first plaintiff, Haiye Developments Pty Ltd (Haiye), is a company incorporated in Australia. The second plaintiff, Jianzong He (Chris He) is a director of Haiye and owns 51% of its shares. He is the son of the third plaintiff, Haiqiang He (Mr He), who owns 49% of the shares in Haiye. 5. The active defendants are the fifth to eighth defendants. They are respectively Pionnier Pty Ltd (Pionnier), Hua Liu (Liu), Kei Kwok (Kwok) and A&T Education Holdings Pty Ltd (A&T Education). Kwok is the sole director and shareholder of Pionnier. Liu is the wife of Kwok and the sole director and shareholder of A&T Education. 6. For the purposes of these reasons, it will not be necessary to refer to the defendants who are not active in the proceedings. The first, fourth and ninth defendants are in liquidation. The second defendant is bankrupt and the tenth defendant has been deregistered. 7. At the hearing, Mr Cheshire SC appeared with Ms Jeliba for the plaintiffs and Mr Sirtes SC appeared with Mr Oakes for the active defendants. 8. The plaintiffs relied upon the evidence contained in the affidavit of their solicitor, Mr Peter Hodges, sworn on 9 June 2020, and the exhibit to that affidavit. The active defendants did not tender any evidence. 9. As I understand it, the operative pleadings are the Amended Statement of Claim filed on 6 June 2018 and the Further Amended Defence filed on 28 October 2019. 10. The Amended Statement of Claim is an elaborate pleading of some 105 pages. It alleges, in pars 7 and 8, an oral joint venture between the plaintiffs and a number of the defendants, including Pionnier, Liu and Kwok, to purchase and develop a property at Kogarah. The active defendants partially admit these allegations including as to the terms alleged in par 18. 11. The plaintiffs allege a substantial number of representations made by one or more of the defendants. Almost all of the representations alleged are claimed to have been made orally or by conduct or by individual defendants failing to contradict representations made by others in their presence. 12. The active defendants have generally not admitted these allegations and alleged positive qualifications in their Further Amended Defence. 13. It is not straightforward to quantify the value of the relief claimed by the plaintiffs against each of the defendants, as different amounts are apparently claimed, and some of the claims are unliquidated. It is sufficient to note that the plaintiffs' claims are substantial. As Mr Hodges said in par 13 of his affidavit, the amount that the plaintiffs claim to have paid as a result of the conduct alleged against the defendants was $9,315,093.75, which is the amount of the plaintiffs' claims, plus interest and costs. The plaintiffs also claim orders for accounts, including as to profits, and declarations of constructive trust over monies received by the defendants. 14. There was no suggestion at the hearing of the application to vacate the final hearing that the proceedings were not ready for hearing, save for the difficulties that arise out of the existence of the COVID-19 pandemic. 15. Nor, having regard to the length of time that these proceedings have been on foot, was there any suggestion that the Court's ruling on the application to vacate the hearing should be influenced by any historical defaults by any of the parties in compliance with case management orders made by the Court. 16. The active defendants did not suggest that the plaintiffs' application to vacate the hearing was motivated by any tactical considerations other than those relied upon by the plaintiffs that have arisen out of the present existence of the COVID-19 pandemic. 17. The application thus depends entirely on the consequences of the COVID-19 pandemic and the plaintiffs' response in relation to the preparation for the hearing and the making of the present application. 18. It will be sufficient, for the purposes of determining this application, to set out the following observations made by Mr Hodges in his affidavit concerning the nature of the proceedings: 18. The plaintiffs' factual case can be summarised as follows: a. the plaintiffs paid their pro rata share of the purchase price of the First Kogarah Property by reason of various misrepresentations as to its value and development potential; b. the plaintiffs paid their pro rata share of a Supplementary Contract for the purchase of the First Kogarah Property under a contract that was not genuine, and that money was misappropriated; c. the plaintiffs paid their pro rata share of the deposit for a transaction for the purchase of the Second Kogarah Property under a contract that was not genuine. That money was misappropriated and applied in part towards Pionnier's 25% share of the purchase price for the First Kogarah Property; d. the plaintiffs paid their pro rata share of an invoice from Bingemann Consulting that was not genuine, and that money was misappropriated. 19. This is largely a credit case between the plaintiffs and the [active defendants] as to whether certain representations were made (some explicitly and some by omission) and whether the [active defendants] were in effect involved in a scheme deliberately to make false representations in order to persuade the plaintiffs to pay over large sums of money to their benefit, as indeed occurred. 1. Mr Hodges' affidavit explained that the plaintiffs' lay evidence comprised affidavits from Chris He, Mr He, Mr He's wife, Li Yaner, and another witness called Tom Chan. There are also two expert witnesses for the plaintiffs, a valuer and a town planner. 2. The principal witnesses for the plaintiffs are Chris He and Mr He. Those witnesses and Ms Yaner are citizens of the People's Republic of China, and are now residents of and present in that country. Although Chris He speaks limited conversational English, the other two witnesses do not, and the three witnesses will need to give their evidence in Chinese through interpreters. 3. The active defendants have served substantive affidavits by Liu and Kwok. The evidence is that those two witnesses are present in Australia and will be able to participate in the hearing and give their evidence and instructions to their counsel in the normal manner. Both of these witnesses are able to give their evidence in English. 4. In essence, it is the plaintiffs' position that they are unable to travel to Australia to participate in the hearing in the normal way, and even if it were technically feasible for them to come here, they do not want to do so for health reasons, and they should not be put to the choice of risking their health or losing their case because of their non-attendance. The plaintiffs say, further, that Chinese law does not permit them to participate in the hearing by audio visual link, and even if it did, the issues in this case make it entirely unfair that they be required to give their evidence and instructions by audio and visual link, when the active defendants will be able to present their evidence and give instructions in English while present in this country, even if they are also required to participate in an audio visual hearing. 5. The active defendants' position is that the Court should reject the plaintiffs' application on the grounds of inexplicable delay in the application being made, the absence of proof that the plaintiffs have taken genuine steps to prepare for the hearing in a way that would obviate the problems caused by the COVID-19 pandemic, and the vacation and deferral of the hearing will cause the active defendants prejudice that outweighs the prejudice that the plaintiffs may suffer, if the hearing that is fixed to commence on 6 July 2020 proceeds. 6. It is necessary for the Court to determine the plaintiffs' application having regard to the two available possibilities: first, that the witnesses are able to travel to Australia for the hearing; and second, that they cannot do so with the result that the hearing would have to be conducted using the Court's audio visual facilities. Possibility of the witnesses being able to travel to Australia 1. As to the first of these possibilities, there is a question as to whether it is feasible for the three witnesses to travel to Australia, and even if it is, whether it is proper for the Court to put them in the position that they must come, or in all probability fail on the plaintiffs' claim in the proceedings. 2. The Court can take judicial notice of the fact that international travel into Australia is, and for the foreseeable future will be, extremely constrained by the policies adopted by the Commonwealth Government to respond to the COVID-19 pandemic. The publication issued by the Department of Home Affairs titled "COVID-19 and the border | Coming to Australia", last updated on 4 April 2020, deals separately with Australian citizens or permanent residents on the one hand and "[a]ll others" on the other. The plaintiffs' three witnesses fall within the second category. 3. The document relevantly says: Travellers who have a compassionate or compelling reason to travel to Australia will need to have an exemption from the Australian Border Force Commissioner. All travellers arriving in Australia must undertake a mandatory 14-day quarantine at designated facilities (for example, a hotel), in their port of arrival. 1. The document also describes the nature of the discretion of the Commissioner of the Australian Border Force to grant exemptions in relation to travel restrictions currently in place, by describing a list of circumstances that may lead to sympathetic consideration. The list is in the following terms: foreign nationals travelling at the invitation of the Australian Commonwealth Government for the purpose of assisting in the COVID-19 response or whose entry would be in the national interest critical medical services, including air ambulance and delivery of supplies, that regularly arrive into Australia from international ports people with critical skills (for example, medical specialists, engineers, marine pilots and crews) by exception diplomats accredited to Australia and currently resident in Australia, and their intermediate family case-by case exceptions for humanitarian or compassionate reasons. 1. Applications for visas must be made at least one week but not more than three months before the applicant's planned travel. 2. The active defendants submitted that the Court should accept that if the three witnesses in China made an application for exemption from the international travel restrictions, they would be given an exemption to come to Australia, on the basis that the Commissioner of the Australian Border Force would consider it to be a proper ground for permitting exceptional entry into Australia that the applicants were parties or witnesses to proceedings fixed to commence in the Supreme Court of New South Wales. 3. It may well be that the only way for that proposition to be tested would be for the three witnesses to make the application and see what the response of the Commissioner of the Australian Border Force would be. 4. However, I would not readily be persuaded that there was any significant likelihood that the application by the witnesses for entry visas on an exceptional basis would succeed. It is extremely doubtful that the Commissioner would regard the witnesses as having "compassionate or compelling reasons", and the itemised grounds for exceptional treatment set out above would not appear to cover the three witnesses, given in particular that their circumstances would not fall within "humanitarian or compassionate reasons". If the issue is considered realistically, a very substantial number of would-be travellers to Australia may have reasons to come to this country that would be considered by the Commissioner, in the light of the obligation to reduce the health risks from the pandemic, to be on a par with the desire to participate at a hearing of legal proceedings in this country. 5. As the three witnesses must travel from the People's Republic of China, common sense suggests that the Australian Border Force officers who processed any application by them for an exemption would look askance at the application. 6. That said, and while I am extremely sceptical that the three witnesses would be given an exemption to travel to this country to participate in the hearing, I accept that that conclusion has not been positively proved by the rejection of applications made by the witnesses. 7. It is to be noted that, if the three witnesses were given only seven days to prepare their application, and the Australian Border Force only took seven days to process the application and to grant a visa, and the witnesses were able to reach Sydney within a further three days, the effect of the 14 day quarantine period would be that the witnesses would be available to participate in a hearing 31 days from today. If time started to run tomorrow, then the witnesses would be available to participate in the hearing on 13 July 2020, the sixth day of the hearing. As the timeframe suggested is probably over-optimistic, it is almost certainly too late now for the three witnesses to participate in the hearing, if it commenced on 6 July 2020, while present in Australia, whether by face-to-face hearing or by audio visual link. 8. Mr Hodges explained in his affidavit that the three witnesses do not wish to travel to Australia at this time, even if it were feasible for them to do so. They are at present taking measures to socially distance, and are trying to remain in their home as much is possible, and are not travelling outside of their local area. Mr He is particularly concerned about being exposed to other people and contracting COVID-19 because he is presently 62 years old. 9. The Court does not have specific evidence concerning what would be involved in the three witnesses travelling from their home to Australia, including necessarily by air travel, and then undertaking the compulsory 14 day quarantine after arrival. It is a matter of common understanding, for the duration of the present pandemic, that international travel would put the traveller at heightened but unquantifiable risk of contracting COVID-19, by reason of the absence of an ability to ensure social distancing, or to know the health status or infectiousness of other travellers and persons present in airports and other necessary means of travel. It is also a matter of common understanding that COVID-19 can have fatal or other serious consequences in a significant but unpredictable number of cases. 10. While the unpreparedness of a witness to abandon safety-first self-isolation and rigid social distancing practices, even if a party to the proceedings, may not always be a sufficient reason for the Court to relieve the witness from the obligation to attend court for the purpose of that person's participation in a hearing, for the duration of the pandemic it would be a very serious matter for this Court to impose on any person the choice of taking a serious risk as to the person's health in order to avoid the consequences of that person not attending a hearing in court in this country. 11. I conclude that it is highly unlikely that the three witnesses would be given an exemption on an exceptional basis to travel to this country for the purpose of participating in the hearing, and that, even on the assumption that they may be given an exemption, it would be neither proper nor just for the Court to put them in the position of having to make a choice between accepting a serious risk to their health or taking the risk of the plaintiffs' case failing because of the absence of crucial witnesses. Possibility of conducting an audio visual hearing 1. The second question is whether the Court should reject the plaintiffs' application to vacate the hearing because the plaintiffs and their witnesses in China can satisfactorily participate in the hearing by use of the Court's audio visual system and other available means of electronic communications between the plaintiffs and their lawyers. 2. That question directs attention to the legal mechanisms that may be available that will permit this Court to conduct the hearing in a manner whereby the three witnesses in China may properly give their evidence by audio visual processes. 3. In par 38 of his affidavit, Mr Hodges referred to the judgment of Perram J in Motorola Solutions, Inc v Hytera Communications Corporation Ltd (Adjournment) [2020] FCA 539. There, at [2], his Honour referred to The Civil Procedure Law of the People's Republic of China (1991) (Chinese Procedure Law). The applicant on the interlocutory process in that case sought an order for the vacation of a hearing fixed to be heard by his Honour. It submitted that the effect of the Civil Procedure Law was that witnesses located within the mainland of the People's Republic of China, who could not attend a live hearing in this country 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 in that manner would be an exercise of sovereignty by the Commonwealth within the territorial confines of China. As such, the exercise would require the permission of the Chinese State. As his Honour observed, it was in that case – as it plainly would also be in this case – entirely too late to obtain official permission 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 (Hague Convention). 4. Perram J noted, at [3], that the respondent to the interlocutory application disputed that Chinese law operated in the way suggested by applicant, "but it accepts that in practical terms even if this Court were to determine for itself what the content of Chinese law was there would be no way it would be able to secure adherence to its views by the seven witnesses". 5. As I understand the position of the active defendants on the present application, they did not submit that the Chinese Procedure Law did not have the legal effect for which the plaintiffs contend. In any event, neither party put the terms of the Chinese Procedure Law before the Court, so that there is some obscurity as to how that law may take effect in the present case. 6. 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. 7. However, Perram J's judgment does not in any relevant way decide the matter. The contest concerning the effect of the Chinese Procedure Law was not resolved because the party opposing the vacation of the hearing accepted that there were practical problems that could not be avoided by a Federal Court decision that the cross-examination of witnesses in China by audio visual link with an Australian court was not contrary to the Chinese Procedure Law. 8. The evidence before the Court on this issue was not completely satisfactory, and I can only proceed upon the basis that there is some chance that it would be unlawful in China for the three witnesses in that country to give their evidence by audio visual link. 9. The parties made submissions on the present application concerning the effect of s 5B of the Evidence (Audio and Audio Visual Links) Act 1998 (NSW) (Audio Visual Act), in the light of observations made by Sackar J in David Quince v Annabelle Quince [2020] NSWSC 326, where his Honour referred, by reference to the decision of Bell P in Antov v Bokan (No 2) [2019] NSWCA 250, to the effect of s 5B(2) of the Audio Visual Act whereby: "[T]he court must not make [a direction that a person give evidence to the court by audio visual link from any place outside Australia] if … (c) … the Court is satisfied that the direction would be unfair to any party to the proceeding". The learned President, at [46], described the Court's decision concerning the existence of the unfairness as involving "a broad evaluative judgment". If the Court determines that the making of the direction would involve the relevant unfairness, then the Court does not reach the stage of deciding whether to exercise the discretion in s 5B(1) to make the direction for evidence to be taken from a person outside Australia by audio visual link. 10. The plaintiffs made submissions to the effect that a requirement that the three Chinese witnesses give evidence by audio visual link in this case would involve a degree of unfairness that precluded the Court from exercising its discretion to make a direction to that effect. 11. The parties did not refer to the special provisions dealing with the application of the Audio Visual Act during the COVID-19 pandemic that are contained in s 22C. Relevantly, that section provides: (1) This section has effect for the prescribed period and prevails to the extent of any inconsistency with any other provision of this Act or any rules of court. … (4) The appearance in any proceedings (other than proceedings prescribed by the regulations) of a witness or legal practitioner representing a party may take place by way of audio visual link if the court directs. (5) A direction under subsection (2A), (3), (3A) or (4) may be made on the court's own motion or following the application of a party but only after the parties have had an opportunity to be heard on the matter. (6) The court is to make a direction under this section only if it is in the interests of justice, having regard to the following— (a) the public health risk posed by the COVID-19 pandemic, (b) the efficient use of available judicial and administrative resources, (c) any relevant matter raised by a party to the proceedings, (d) any other matter that the court considers relevant. (7) If an audio visual link is used the court must be satisfied that a party is able to have private communication with the legal representative of the party and has had a reasonable opportunity to do so. (8) Nothing in this section requires or permits the use of an audio visual link if the necessary audio visual facilities are unavailable or cannot reasonably be made available. … 1. As the parties did not address the application of this provision, it may be that the requirement in subs (5) has not been satisfied, although the parties had the opportunity to be heard on the application of the provision. It would appear that the Court is intended to have a wider power to direct that evidence be taken from a witness in a country outside Australia by audio visual link than is given to the Court by s 5B of the Audio Visual Act. 2. The Court's power to make an order under s 22C of the Audio Visual Act is still confined by the prescription in subs (6) that a direction can only be given "if it is in the interests of justice" to do so. In the absence of submissions to the contrary, I propose to proceed upon the basis that any circumstances that would give rise to unfairness to any party to the proceeding within s 5B(2)(c) would be comprehended by "any relevant matter raised by a party to the proceedings" and "any other matter that the court considers relevant" in s 22C(6). It will ordinarily not be in the interests of justice for the Court to make a direction for an audio visual hearing if that would be unfair to any party to the hearing. 3. The Evidence on Commission Act 1995 (NSW) provides, in ss 6 and 7, for a process whereby this Court may make an order relating to the taking of evidence from a person outside Australia by a judge of the Court, or for the issue of a commission for examination of the person at any place outside Australia, or for the issue of a letter of request to the judicial authorities of a foreign country to take the evidence of a person or cause it to be taken. This Court may, for the last-mentioned purpose, include in the letter of request a request that the relevant person be cross-examined. 4. I mention this Act because the exercise by the Court of the powers conferred by the Act would clearly involve an intrusion on the sovereignty of the foreign country where the witness is located, which is a reason for the existence of the Hague Convention. 5. It appears on their face that s 5B and 22C of the Audio Visual Act are intended to empower the Court to give directions for the taking of evidence from witnesses located in a foreign country by audio visual means without regard to the diplomatic niceties of whether that involves an unwarranted intrusion by an institution of government in Australia on the sovereignty of the foreign country. 6. That is not a matter that was addressed by the parties on this application. It may give rise to questions of public international law for which this Court has had no opportunity to give any consideration. 7. This possibility is only relevant to the present application for the following reason. Whatever this Court may think that it is empowered to do by sections of the Audio Visual Act, it is reasonably arguable that the act of this Court in taking evidence from a witness in a foreign country, by means of audio visual equipment located in that country, would impinge on the sovereignty of that country, even in circumstances where the witness participated voluntarily. Even if that is wrong, as a matter of public international law, it could be well understood that foreign countries may consider such a process to involve an inappropriate impingement on their sovereignty, whatever the Parliament of the State of New South Wales might think about the matter. 8. This consideration leads me to the only conclusion relevant to the disposition of the present application, which is that this Court should take seriously the appearance that the process of taking the evidence of the witnesses in the People's Republic of China by audio visual link could well be unlawful under Chinese law, as has been suggested, and furthermore, it may not be unreasonable for Chinese citizens located in that country to take the view that they should not risk being delinquent by giving evidence at the hearing in these proceedings by audio visual means. As I noted above, it is extremely unlikely that the necessary official processes required to obtain the approval of the People's Republic of China per the Hague Convention could be completed in the near future. Injustice in requiring audio visual hearing 1. Returning to the issue whether, even if permissible under Chinese law, it would be unjust to the plaintiffs for the Court to direct that the cross-examination of the three witnesses in China be carried out by audio visual link, I have concluded that it would be unjust as the plaintiffs contend. 2. I consider this case to be an exceptional one. I am satisfied that the credit of the three witnesses in China will be crucial to the plaintiffs' chances of success. The whole case will hinge on the effectiveness of those witnesses' evidence. It is an extremely difficult exercise for the Court to make sound judgments as to the credibility of witnesses who are cross-examined on crucial issues – particularly as to the making of oral statements – when the cross-examination must be interpreted from the English to the Chinese and then from the Chinese to the English. There is extensive scope for misunderstanding and error concerning the correct interpretation of the original words the subject of the evidence, and this is compounded by the need for a series of interpretations. It is preferable for the Court to be able to make the necessary judgments face-to-face with the witnesses giving the evidence, but it is in some ways more crucial for the whole exercise to proceed smoothly and without dislocation, and with the witnesses and the interpreters having a sufficiently confident and functional relationship. 3. In these circumstances, I would not readily ignore the judgment of senior counsel for the plaintiffs in expressing the opinion – which I am satisfied was conscientiously formed – that he could not do justice to the plaintiffs' case if the three witnesses in China were cross-examined remotely from him and the Court, and possibly also the interpreters. 4. The Court does not know whether or not there will be substantial cross-examination on documents, but I am satisfied that the logistical arrangements that would be needed to allow for the cross-examination of the witnesses by video link from China would be fraught with the risk of dislocation causing unwarranted damage to the apparent credibility of the witnesses' evidence. 5. There was dispute between the parties as to whether the taking of the evidence from the witnesses in China by audio visual link while the defendants' witnesses would be cross-examined while they were in this country would be unfair to one or other side of the proceedings. This dispute cannot sensibly be resolved because in reality the outcome would be a lottery. 6. Consequently, subject to the submissions made by the remaining defendants as to why the plaintiffs' application should be rejected, I would conclude that, for the purposes of both s 5B and s 22C of the Audio Visual Act, it would not be just to the plaintiffs, in the circumstances discussed above, to order that the witnesses in China give their evidence by audio visual link. Active defendants' response to the plaintiffs' application 1. As I have noted above, the active defendants' first response to the plaintiffs' application was that it should not be entertained at this stage because it has been pursued with inexplicable delay. 2. Mr Hodges explained in his affidavit that he believed that the COVID-19 situation in this country and in China was not static, but rather was developing over time. He did not know what the position was likely to be in relation to the hearing until the date was approaching. On 20 May 2020, being about 7 weeks prior to the date on which the hearing was listed to commence, he formed the view that the trial could not proceed, and wrote to the solicitor for the active defendants about vacating the hearing. 3. The active defendants' solicitors responded on 26 May 2020, saying that they did not have the benefit of the evidence upon which the plaintiffs would rely, so that it was not then appropriate for the active defendants to consent to the plaintiffs' proposed application to vacate the hearing. The solicitors advised that the active defendants would determine their position based on the evidence. 4. As was submitted on behalf of the plaintiffs, the active defendants did not signify in a positive way their opposition to the application, and did not claim that it had been foreshadowed too late. 5. The active defendants did not, by the 26 May 2020 letter or by their submissions in opposition to the application, identify any particular prejudice that they would suffer as a result of the timing of the application to vacate the hearing. On the evidence, there is no such prejudice. 6. Mr Hodges said that, following the announcement issued by this Court on 20 May 2020, that from 1 June 2020 some face-to-face hearings involving limited parties, witnesses and legal representatives would resume, but that hearings involving multiple parties and witnesses would follow in stage two at some time in the future, Mr Hodges decided that it was appropriate to contact my associate for the purpose of making the application, which was done on 3 June 2020. Mr Hodges said that it was his view that the present proceedings would be stage two proceedings. 7. I accept that the explanation given by Mr Hodges was genuine. The active defendants disputed that these proceedings would be stage two proceedings, as, notwithstanding the number of parties, there were only two sets of active parties, being the plaintiffs and themselves. Consequently, given the number of parties, counsel, solicitors, witnesses and interpreters that would need to be in court at any time, the hearing could be conducted as a first stage hearing. 8. It is not possible to resolve that dispute, and it is not necessary to do so. I am sceptical that these proceedings would fall within stage one, even if technically they could be made to fit the relevant criteria. It was reasonable for Mr Hodges to be concerned that the proceedings would be treated as falling within stage two. It remains a highly unpredictable question, which depends upon decisions made by the Court's administration concerning the needs of competing proceedings, as to which should be given priority for face-to-face hearings. At this stage, the hearing arrangements that can be made by the Court are only known shortly before the week in which hearings are listed to take place. Consequently, I consider that the approach adopted by Mr Hodges was justifiably conservative. 9. In these circumstances, I reject the active defendants' argument that the plaintiff's application for an order vacating the hearing date should be rejected on the ground of the lateness of the application, or the insufficiency of the explanation given by the plaintiffs. 10. The second basis upon which the active defendants opposed the application was essentially to submit that every problem raised by the plaintiffs was caused by their own conduct, and in particular by their disinclination to travel to Australia. 11. The active defendants submitted that, in reality, the witnesses in China were able to travel to Australia, and that the recent Chinese Government alert warning against such travel was mere propaganda. There was no evidence of any Chinese law that strictly prohibited the witnesses travelling to Australia. Furthermore, it had not been established that they could not get an exemption from Australian border controls because they had made no attempt to obtain an exemption. 12. I have dealt with this submission above. Although certainty is not possible in these uncertain times, I am satisfied that the plaintiffs have established to a level of high probability that the witnesses in China would not be permitted to travel to Australia for the purpose of participating in the hearing in this Court. Furthermore, it would not be justified for the Court to put those witnesses in the position where they had to risk their health or risk failure by the plaintiffs in this suit. 13. The active defendants submitted that the witnesses in China could have travelled to Hong Kong, or Taiwan, or some other place in Asia, where it was lawful for them to give their evidence by audio visual link. It appears that that suggestion was first made by senior counsel for the active defendants at the hearing, after the plaintiffs' submissions had been made. It was not shown that this was a practicable solution. The plaintiffs had no time to respond to it. It would have involved air travel by the witnesses. The risks to their health may have differed little from travel to Australia. The proposal would not have obviated the difficulties caused by the witnesses having to give their evidence by audio visual link. 14. The active defendants made a specific submission that health and legal risks could be minimised if the witnesses in China gave their evidence by audio visual link from some appropriate place outside Australia, and the interpreters participated by separate audio visual link from some location in Australia. 15. Substantial personal experience causes me to believe that, of all of the sources of practical difficulty that could arise in the hearing of a fraud claim dependent upon oral evidence and credibility findings, the physical separation of witnesses from their interpreters by the need to use an audio visual link is likely to be the most productive of inefficiency, delay and unfairness. Non-English speaking witnesses who are cross-examined through an interpreter often need the physical presence of the interpreter to create the immediate connection between witness and interpreter that is essential to the witness being able to respond to questions with an adequate level of confidence that the witness understands the questions and the cross-examiner understands the answers. 16. I do not accept that it would be a satisfactory or fair partial solution to the problem by locating the interpreters remotely from the witnesses. 17. I note that the active defendants relied upon a number of recent procedural decisions of courts that have ruled, in response to the practical difficulties caused to the efficient conduct of hearings by the COVID-19 pandemic, that the legal system must continue to function, and for that purpose parties may have to accommodate themselves to unconventional approaches to the conduct of hearings, including in relation to the cross-examination of witnesses by audio visual link, in cases where credit is in issue: see Australian Securities and Investments Commission v GetSwift Ltd [2020] FCA 504 (Lee J); Capic v Ford Motor Company of Australia Ltd (Adjournment) [2020] FCA 486 (Perram J) and Giam v Patterson [2020] NSWSC 593 (Stevenson J). The reasoning adopted by the judges in those cases can fairly be epitomised by the statement made by Lee J at [7], extracted in the active defendants' note of the cases: "Just because one cannot have a hearing conducted in accordance with traditional practices and procedures, does not mean that the Court's judicial function cannot be performed effectively where it is necessary to do so. As Voltaire observed, one must ensure the perfect does not become the enemy of the good." 18. While I respectfully and in general terms agree with the approaches adopted in those cases, each depended on its own facts. I accept the submission made in response on behalf of the plaintiffs that the concatenation of circumstances that the plaintiffs have to face in this case places it in an exceptional category, where it would be unfair to them for the Court simply to reject their application, and to leave it to them to cause their witnesses to be available for cross examination at the hearing, by whatever means they may be able to arrange, or alternatively to forego their prospects of succeeding on their claim. 19. The third ground of the active defendants' opposition to the making of an order vacating the hearing date is the prejudice that the active defendants will suffer, if the hearing is lost and it needs to be fixed for a later date, noting that that date is unlikely to be before 2021. 20. The active defendants did not lead evidence of any specific prejudice, and they were only able to rely upon the fact that Liu has paid into court the sum of $3,564,000 following the Court making freezing orders. (There may be some doubt as to who made the payment, as senior counsel referred to the payment having been made by the sixth defendant, and then is recorded in the transcript as describing that person as "he"). The active defendants submitted that the fact of this payment having been made "has resulted in substantial financial loss". No such loss has been established, although the Court must accept that, if the active defendants ultimately defeat the plaintiffs' case, the fact of the freezing order will prove to have been a substantial imposition upon them. 21. When these proceedings were commenced on 3 March 2017, Slattery J made a freezing order that included the usual undertaking by Haiye, contained in Schedule A par (1) to the orders, to submit to such order as the Court may consider to be just for the payment of compensation to any person affected by the operation of the orders. The freezing orders were only made against the first and second defendants. 22. Further, by Schedule A par (8)(a), Haiye undertook to cause an irrevocable undertaking to pay the sum of $200,000 to be issued by a bank in respect of any order that the Court may make pursuant to undertaking (1). 23. A freezing order was made against the fourth defendant on 7 March 2017. The Court made a further order, in Schedule A par (8) of those orders, that Haiye pay the sum of $100,000 into its solicitors' trust account to be held in respect of any order the Court may make pursuant to the usual undertaking. 24. On 9 March 2017, further freezing orders were made against Pionnier, Liu and Kwok. 25. On 31 October 2017, the Court made consent orders that Chris He and Mr He be joined as plaintiffs. 26. On 31 October 2017, the Court noted undertakings by all of the plaintiffs in the terms of specified undertakings made on 3 and 7 March 2017, which included the usual undertaking. The plaintiffs also undertook to maintain the bank guarantee of $200,000 given to the Court pursuant to order made on 3 March 2017, and to maintain the sum of $100,000 in the plaintiffs' solicitors' trust account paid pursuant to the orders made on 7 March 2017. 27. I have assumed, for the purposes of this judgment, that relevant freezing orders and undertakings given by the parties have been extended pending the determination of these proceedings or further order. The defendants did not submit that, if the Court made the order vacating the hearing, so that the final determination of the proceedings was delayed, they would suffer prejudice because of the absence of the protection of the undertakings given at about the time of the commencement of the proceedings. 28. I conclude that, although, in a general way, the active defendants may be subjected to some prejudice if the hearing is vacated, they will be protected by the undertakings given by the plaintiffs if they ultimately succeed. The active defendants did not seek to make a case that the undertakings would be insufficient by reason of the unexpected consequences of the vacation of the hearing. 29. I add, in conclusion, that the parties did not make any specific submissions directed at the consequences of the plaintiffs' witnesses in China having to be cross-examined by audio visual link, when the hearing plan was given to Ward CJ in Eq at the time the matter was set down for hearing. I presume that the hearing plan was prepared in the expectation that the hearing would be conducted in the conventional way. Of the eight days set aside for the hearing, one day was allowed for the cross-examination of each of Chris He and Mr He, after a day was allotted to openings and objections, and Li Yaner and the remaining witnesses were to be cross-examined on the fourth day. I will say no more than that I have had significant experience of hearings in which it has been necessary to cross-examine non-English speaking witnesses through interpreters, concerning the circumstances of transactions affected orally, where findings of credit were crucial. I consider that, if the witnesses in China were required to be cross-examined through audio video link, there is a very significant chance that the hearing would not be completed in the eight days allowed, even though the hearing plan allotted day 7 for potential overrun. This is a subsidiary reason for the Court acceding to the plaintiffs' application, but I think that, in all of the circumstances considered above, it would be something of a miscarriage of justice if the plaintiffs were forced on but the hearing could not be completed in the time allowed. 30. Consequently, I will make an order vacating the hearing fixed to commence on 6 July 2020 and to continue for a period of eight days. 31. I should refer to a request made by the Court to the plaintiffs to be informed whether some part of the time set aside for the hearing could profitably be saved by deferring the taking of the evidence of the witnesses in China and causing the hearing to finish part-heard. That would be on the basis that the hearing would be completed when the evidence of the witnesses in China could properly be taken. The plaintiffs provided a careful response to that request. They submitted that it would not be advantageous for the hearing to proceed on that basis, and it would not be convenient for the Court to become part heard. The active defendants did not dissent from that position. 32. At the time the Court made the request, it did not have information concerning the identity or the significance of the evidence to be given by the witnesses in China. Now that it is known that they are the principal witnesses for the plaintiffs, it is entirely clear, given the nature of the case, that their evidence must be given and their cross examination completed before the defendants could be expected to go into evidence. Orders 1. The orders of the Court are: 1. Order that the hearing in these proceedings fixed to commence on 6 July 2020 and to continue for a period of eight days be vacated. 2. Order that the costs of the application to vacate the hearing be the parties' costs in the cause. 3. List the proceedings in the call over list before the Chief Judge in Equity at 8:30 AM on Tuesday, 16 June 2020 (or such other date as may be fixed at the request of the parties by arrangement with the associate to the Chief Judge). ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 12 June 2020