Adjournment applications in light of the impacts of COVID-19 on witnesses ‘appearing’ from China
In recent months, Australian courts have been subject to numerous adjournment applications based on the impacts of the COVID-19 pandemic. In some of these applications, the principal reason for the adjournment has been complications concerning witnesses who are residents of and located in the People’s Republic of China (China). In this article we will discuss the issues that arise in such applications with reference to the recent Federal Court cases of Motorola Solutions Inc v Hytera Communications Corporation Ltd (Adjournment) (Motorola) and Motorola Solutions Inc v Hytera Communications Corporation Ltd (Second Adjournment) (Motorola 2), and the New South Wales Supreme Court case of Haiye Developments Pty Ltd v The Commercial Business Centre Pty Ltd (Haiye).
Motorola and Motorola 2
Motorola and Motorola 2 concerned applications by the respondent, Hytera, for adjournments on the basis that seven of Hytera’s witnesses were located in China and could not travel to Australia to be cross-examined on their affidavits.
In making these applications, Hytera argued that the effect of The Civil Procedure Law of the People’s Republic of China (1991) (Chinese Civil Procedure Law) meant that the witnesses in China could not be cross-examined on their affidavits by video unless permission was obtained from the Chinese State. In the first application, Motorola disputed this, but conceded that the Court would not be able to secure adherence to the Court’s interpretation of the Chinese Civil Procedure Law by seven witnesses regardless of what the Court considered the content of the Chinese Civil Procedure Law to be. In the second application, Motorola was prepared to accept that the Chinese Civil Procedure Law operated in such a manner.
First application – adjournment granted
The first application was allowed and the adjournment was granted in April 2020. The decision came down to Motorola’s argument that it did not require the seven witnesses for cross-examination. Instead Motorola stated it would rely on other evidence which, in Motorola’s opinion, contradicted the evidence given by the witnesses in order to submit that the witnesses’ testimony ought to not be accepted.
It was accepted by both parties that this procedure would ordinarily breach the rule in Browne v Dunn, which requires that, if a party intends to present and rely upon evidence that is contradictory to a witness’ testimony, the party must put this evidence to the witness during cross-examination. Motorola argued that an exception to the rule in Browne v Dunn applied, on the basis that Motorola intended to argue at trial that, in the rather unusual circumstances of witnesses being prevented from entering Australia to give evidence and from giving evidence from China via video, Motorola should be relieved of putting any contrary evidence to the witnesses.
Justice Perram considered that, given Motorola’s foreshadowed argument might not succeed at trial, to proceed with the hearing was to expose Hytera to a procedural risk that was not ‘necessarily trivial’. Justice Perram was not willing to risk a mistrial in the pursuit of a ‘highly experimental procedural remedy’. On balance, whilst both parties had the potential to be prejudiced, the scales were in Hytera’s favour and Justice Perram allowed the adjournment.
As a concluding remark, Justice Perram rejected Hytera’s submission that the different time zones between Australia and China and the problems of conducting a remote trial were reasons for the trial to be adjourned. Justice Perram did not consider that those problems were insurmountable or sufficient to adjourn a hearing in most cases.
Second application – just go to Macau!
Justice Perram also heard Hytera’s second application for an adjournment. In this instance, in July 2020, the application was dismissed and the trial could proceed.
The first decision in Motorola was made at a time when there was no evidence that witnesses could travel to an intermediate jurisdiction, such as Hong Kong or Macau, to give evidence. Conversely, at the time of Morotola 2, Justice Perram determined that the Chinese witnesses were able to travel to Macau, either privately by car or on a five hour flight for one of the witnesses, where they would be able to be cross-examined without the Chinese Civil Procedure Law posing an issue. Certain difficulties were acknowledged, such as business visas being required, the travel creating a heightened risk of contracting COVID-19, quarantine rules and the unwillingness of certain witnesses to travel to Macau, but this was not enough for the second adjournment to be granted.
Justice Perram outlined that the relevant legal question, which had not arisen at the time of the first or second adjournment application and would potentially never arise, was whether Hytera, in the event it was unable to bring one or more of the witnesses to Macau for cross-examination, could nevertheless rely upon the affidavits of those witnesses. Several steps were outlined by the Court as to what Hytera could do in such a situation, such as proceeding without relying on the witnesses’ evidence.
Haiye – key witnesses
Haiye concerned an application by the plaintiffs for an adjournment on the basis that three of the plaintiffs’ witnesses, including the two principal witnesses, were citizens of and living in China.
The adjournment in Haiye was granted. The three witnesses were crucial to the plaintiffs’ chance of success and all of them required interpreters to translate from English to Chinese and then Chinese back to English. This provided an extensive scope for misunderstanding to occur and error in relation to the correct interpretation of the witnesses’ evidence. It was preferable that the witnesses provided evidence in person where the examinations could proceed smoothly and the witnesses and interpreters could have a ‘sufficiently confident and functional relationship’. Whilst the defendants may have been subjected to some prejudice if the hearing was vacated, the defendants would be protected by the undertakings the plaintiffs had given in relation to a freezing order that had been made in 2017. There was no submission by the defendants that the undertakings given by the plaintiffs would be insufficient because of the adjournment.
The plaintiffs in Haiye also raised the Chinese Civil Procedure Law as a basis for the adjournment, referring to Motorola, but the Court was not required to conclude on this point. The Court proceeded upon the basis that there was some chance that witnesses being cross-examined via video would be unlawful in China.
Chinese Civil Procedure Law
Whilst it is preferable for witnesses to give evidence in person, this is not always possible, especially in current circumstances during the pandemic. Currently, and for the foreseeable future, Australia has strict border restrictions and travelling, especially internationally, can increase the risk of contracting COVID-19. Accordingly, it may be preferable for witnesses to provide evidence via video.
A potential complication arises for witnesses who are residents of or located in China who are subject to the Chinese Civil Procedure Law. As discussed in Motorola, Motorola 2 and Haiye, the Chinese Civil Procedure Law potentially requires that permission be obtained from the Chinese State before witnesses located within mainland China are cross-examined on their affidavits. This is due to the taking of evidence by Australian courts being an exercise of sovereignty by the Commonwealth within the territorial confines of mainland China.
The terms of the Chinese Civil Procedure Law were not examined by the Australian Courts in either case and therefore there remains some obscurity as to how the law properly applies in circumstances where witnesses are required to be cross-examined via video. In Haiye, Justice Robb warned that the Court should take this matter seriously and that to take evidence of a witness in China could be unlawful under the Chinese Civil Procedure Law. On this basis, Justice Robb considered that it may be reasonable for Chinese citizens located in China to want to avoid the risk of breaking the Chinese Civil Procedure Law by giving evidence in Australian courts via video link. Justice Robb further acknowledged that to obtain approval from the Chinese State for the witnesses to give evidence via video would take time, which may not be available in all circumstances.
The Courts have probably taken the safest approach in both cases. If the matters proceeded and the witnesses were cross-examined by video there is the chance that this would be unlawful and that, not only would the witnesses themselves be at risk, but any judgment that was made by the Australian Courts based on such evidence would not be enforceable in China.
Suitability of video evidence – the COVID-19 reality
Even where the Chinese Civil Procedure Law is not an issue, there remains a question of whether video evidence is suitable in the circumstances. There have been numerous recent adjournment applications where one of the reasons cited for the adjournment is the inadequacy of conducting witness testimonies, or the entire trial, via video. Many such applications have been dismissed for reasons including the following:
- conducting the witness testimony or trial via video would not be inadequate;
- technical difficulties could be resolved effectively;
- witnesses can give evidence remotely;
- the demeanour of witnesses can be observed via video; and
- whilst challenging, witnesses can be cross-examined via video.
Comparatively, video evidence was deemed to be unjust in Haiye. Whilst Justice Robb acknowledged the recent cases in which cross-examination by video was appropriate, each case will depend upon its own facts, and the circumstances in Haiye were considered to be exceptional.
It is worth noting that adjournment applications may also be allowed (or refused) in circumstances where the witnesses live in Australia and not just when they are located overseas.
In April 2020, Justice Perram had also heard an application for an adjournment in Capic v Ford Motor Company of Australia Limited. His Honour outlined a number of considerations particularly arising from the COVID-19 pandemic, but in this instance refused the adjournment. His Honour observed:
‘Under ordinary circumstances, I would not remotely contemplate imposing such an unsatisfactory mode of a trial on a party against its will. But these are not ordinary circumstances and we have entered a period in which much that is around us is and is going to continue to be unsatisfactory. I think we must try our best to make this trial work. If it becomes unworkable then it can be adjourned, but we must at least try.’
More recently, in July 2020, an application for an adjournment was made for similar reasons to Haiye although without the international element. In Rooney v AGL Energy Limited (No 2) (Rooney), one of the reasons relied upon for the application was that video evidence would not be appropriate in light of the fact that the assessment of the witnesses would be paramount to the decision being made.
In dismissing the application, Justice Snaden held that technology could not fully replicate the court room environment and, that, although the respondent might be prejudiced by a further delay in that the memories of its key witnesses would degrade over the additional time, there had already been a significant amount of time since the commencement of the proceeding and that any further degradation was unlikely to be material.
Whether proceedings will be adjourned based on witnesses being unable to give evidence in person is to be assessed on a case-by-case basis. Considering current circumstances, it is likely that any overseas witnesses will face difficulties in travelling to Australia to give evidence in person. For witnesses in China, the Chinese Civil Procedure Law will be relevant and poses a risk that, if the witnesses are cross-examined via video, the judgment may not be enforceable in China.
As circumstances relating to COVID-19 change, so will the considerations before the courts and the judgments that are made in relation to adjournment applications.
  FCA 539
  FCA 987
  NSWSC 732
 Motorola at , Motorola 2 at .
 (1893) 6 R 67
 Motorola at .
 See JKC Australia LNG v CH2M Hill Companies Ltd  WASCA 38; ASIC v GetSwift Limited  FCA 504; Capic v Ford Motor Company of Australia Limited  FCA 486.
 Haiye Developments Pty Ltd v The Commercial Business Centre Pty Ltd  NSWSC 732, .
  FCA 486
  FCA 942
This publication covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. It is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.