Thaler v Amzalak (No 2) - [2013] NSWSC 632

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Thaler v Amzalak (No 2) [2013] NSWSC 632
Hearing dates: 26 February 2013, 27 February 2013, 28 February 2013, 1 March 2013, 8 April 2013, 9 April 2013, 10 April 2013, 6 May 2013, 7 May 2013, 8 May 2013
Decision date: 27 May 2013
Jurisdiction: Common Law
Before: Schmidt J
Decision:
1. Mr Thaler's summons is dismissed
2. The Beth Din's award is set aside.

Catchwords:
ARBITRATION - award - enforcement of an arbitral award - arbitral award made by Beth Din in Zablo - summons seeking leave to enforce award - cross-summons seeking to set aside the award - failure to give reasons - credibility and reliability of witnesses - Beth Din of Zablo - whether Beth Din decision complied with the requirements of s 29(1)(c) - allegation of fraud - allegation of misconduct - whether plaintiff established that he was a party to Beth Din proceedings - problems with record keeping at Beth Din proceedings - notice and opportunity to be heard - Beth Din not conducted in accordance with written arbitration agreement - requirement of impartiality not met - bias established - use of Yiddish - proper attention not paid to defendant's case - orders sought under s 43 of Commercial Arbitration Act 1984 cannot be made - orders - costs

EVIDENCE - leave sought by Mr Thaler to give evidence in reply - leave refused - ruling under s 136 of the Evidence Act in relation to Mr Koncepolski's evidence sought - ruling refused

PROCEDURE - notice of motion - order seeking to set aside subpoena - motion dismissed
PROCEDURE - pleadings - leave to amend further amended cross-summons - leave granted
Legislation Cited: Civil Procedure Act 2005
Commercial Arbitration Act 1984 (repealed)
Commercial Arbitration Act 2010
Evidence Act 1995
Uniform Civil Procedure Rules 2005
Cases Cited: Australian Securities and Investments Commission v Hellicar [2012] HCA 17; (2012) 86 ALJR 522; 286 ALR 501
D & M (Australia) Pty Ltd v Crouch Developments Pty Ltd [2010] WASC 130
Doran Constructions Pty Ltd v Health Administration Corporation of New South Wales (unreported 10 October 1994 New South Wales Court of Appeal)
Gas & Fuel Corporation of Victoria v Wood Hall Ltd [1978] VR 385
Gordian Runoff Ltd v Westport Insurance Corporation [2010] NSWCA 57; (2010) 267 ALR 74
Leveraged Equities Pty Ltd v Huxley [2010] NSWCA 179
Mond v Berger [2004] VSC 45; (2004) VR 534
Morley v Australian Securities & Investments Commission [2010] NSWCA 331; (2010) 247 FLR 140
Oil Basins Ltd v BHP Billiton Ltd [2007] VSCA 255; (2007) 18 VR 346
Vakauta v Kelly [1989] HCA 44; (1989) 167 CLR 568
Watson v Foxman (1995) 49 NSWLR 315
Westport Insurance Corporation v Gordian Runoff Ltd [2011] HCA 37; (2011) 244 CLR 239
Category: Principal judgment
Parties: Shlomo Thaler (Plaintiff)
Benjamin Amzalak (also known as Binyomin Zeev Amzalak) (Defendant)
Representation: Counsel:
Mr M S White with Mr P Afshar (Plaintiff)
Mr G Segal with Mr M A Friedgut (Defendant)
Solicitors:
Peter M Wayne & Associates (Plaintiff)
Brown Wright Stein Lawyers (Defendant)

File Number(s): 2010/361581
Publication restriction: None

Judgment

By a summons filed by the plaintiff, Mr Thaler, in the District Court in November 2010, orders for the payment of $318,000 were sought against the defendant, Mr Amzalak. While not revealed in the summons, that order was sought by way of enforcement of an arbitral award made in Sydney in September 2010 by a Beth Din in Zablo. In these proceedings Mr Thaler sought the Court's leave to enforce the award by entry of judgment in his favour under s 33 of the now repealed Commercial Arbitration Act 1984 ("the 1984 Act").

By a further amended cross-summons filed in Court while closing submissions were being made in May 2013, Mr Amzalak sought orders setting the arbitral award aside. There was no issue between the parties as to Mr Amzalak's right to seek such orders under s 42 of the 1984 Act. That the misconduct he alleged had occurred in the Beth Din proceedings was, however, in issue.

Mr Thaler also relied on s 43, which permits the Court to remit any matter referred to arbitration by an arbitration agreement, together with any directions it thinks proper, to the arbitrator for reconsideration. Mr Amzalak opposed such remission.

The Beth Din hearing took place in Sydney on 25 August 2010. The Beth Din comprised three judges or "Dayonim". Two were Borers appointed by the parties, Rabbi Kaminetsky, by Mr Thaler and Rabbi Ulman, by Mr Amzalak. The third, Rabbi Telsner who was the "Sholish", who chaired the Beth Din proceedings, was appointed by the other two Rabbis.

The dispute the subject of the Beth Din proceedings, concerned the off market sale of certain shares in Tiaro Coal Limited ("TCM"). Mr Thaler, an Israeli resident, claimed that in 2008 his representative, Mr Koncepolski, who resides in Australia, had negotiated an agreement for the purchase of some 685,000 TCM shares from Mr Amzalak's company, Anything Communications Pty Limited, with Mr Amzalak. Mr Amzalak disputed that he had made any such agreement.

His case was that he had represented Mr Tan, a director and shareholder of various ASX listed companies, including Hudson Corporate Limited, in the negotiations with Mr Koncepolski. Mr Koncepolski had made a number of agreements with Mr Tan, including agreements for the sale of TCM shares. To him, Mr Koncepolski and Mr Thaler were one and the same. He had himself never made any agreement with Mr Thaler, notwithstanding that it was he who had signed a share transfer form, transferring the claimed number of TCM shares from Anything Communications to Mr Thaler.

At the Beth Din hearing Mr Koncepolski represented Mr Thaler and Mr Amzalak represented himself. They signed an arbitration agreement, to which it was common ground the 1984 Act applied. Mr Tan was not involved in the proceedings.

The Beth Din's decision was given on 15 September 2010. It concluded that Mr Thaler had established his case and ordered Mr Amzalak to pay him $318,000. Mr Amzalak disputed the decision. He took advice from Rabbi Gutnick and approached the Beth Din, seeking to have the decision revisited, for reasons which he then explained. He received no response to this application.

Mr Amzalak did not comply with the Beth Din's decision and on 1 November 2010, Mr Thaler commenced the District Court proceedings. The Beth Din proceedings had been recorded. Mr Amzalak's solicitors sought copies of the recordings. On 7 December, his solicitors wrote to the three Rabbis, noting that Rabbi Ulman had advised them that he could not release the tapes without the consent of his co-arbitrators. They advised that if necessary, orders would be sought for production of the tapes from the District Court. As it transpired Mr Koncepolski had the tapes. Two were provided on 7 December and a third on 8 December. They were incomplete. The tape recording of the afternoon's proceedings was not provided. The proceedings were transferred to this Court in February 2011.

On 9 December 2010 a "Siruv" signed only by Rabbi Kaminetsky and Rabbi Telsner was issued in the following terms:

"To who it may concern

As Mr Benjamin Amzalak has not complied with the ruling of the Beth Din, and after he has been given ample time to do so, we hereby declare that he is in contempt of the Beth Din (SIRUV) and that all are laws quoted in the Code of Jewish law (Yoreah Deah apply to him in full until he complies with the Beth Din ruling.

Writ of Contempt and Ban against Mr Benjamin Amzalak:

According to that which is explained in code of Jewish Law Yoreh Deah 334:43 regarding "one who has not accepted the judgement, or one who testifies against his fellow in secular courts. or one who humiliates a court officer or one who humiliates Torah scholars":

Such an individual should be excommunicated. The implication of the matter is as ruled in The Code of Jewish law there, that it is forbidden to stand within his four cubits; one should not eat with him nor participate in the invitation to Grace After meals with him, nor include him in any matter where a quorum of ten is required. One should expel his children from school and his wife from the synagogue. All this applies until he accepts upon himself to abide by the judgement

Members of the Court"

On the evidence, this was a serious sanction under Jewish law.

Despite Mr Amzalak's earlier application to have the Beth Din reconsider its decision, Rabbi Kaminetsky's evidence was that he was not aware at the time the Siruv was issued, that Mr Amzalak was challenging the decision. He considered that Mr Amzalak was in breach of his obligations under the agreement, as well as under Jewish and Australian law, in not making the payment which the Beth Din had ordered. He also claimed that before the Siruv was issued, Mr Amzalak had been given three written warnings. There was no evidence of such warnings having been given.

On 10 December, Mr Amzalak's solicitors wrote to the Rabbis complaining that the Siruv had been published within the Jewish community; that its publication had caused he and his wife great anguish; that it might cause Mr Amzalak suffering, loss of reputation and financial loss. Its retraction was sought, it being alleged that it was calculated to inhibit Mr Amzalak pursuing his rights in the District Court proceedings. No response was received.

Despite the issue of the Siruv, Mr Amzalak exercised his rights under the 1984 Act and in March 2011 filed his cross-claim. On 19 November 2012, Rabbi Telsner wrote to the school which Mr Amzalak's children attended, informing it of his role in the Beth Din's proceedings; his views of the case there established by Mr Thaler on the evidence; the Beth Din's order; Mr Amzalak's failure to comply with it; and the contempt which he considered Mr Amzalak had displayed. He advised of the Siruv which had been issued and that there was a "Halachic" obligation to implement it. He concluded by advising the school that Mr Amzalak's children could not attend the school 'forthwith', until he complied with the order.

It was Rabbi Telsner's evidence in cross-examination that he considered that Mr Amzalak was obliged to pay Mr Thaler in accordance with the Beth Din's order, irrespective of what the Court decided in these proceedings. Both he and Rabbi Kaminetsky considered that Mr Amzalak's conduct in failing to abide by the Beth Din's order was contrary to Jewish and Australian law, because he had agreed to be bound by the Beth Din's decision. Rabbi Telsner considered that his religious obligation was the predominant consideration and that even if the Beth Din's decision was set aside, Mr Amzalak would be acting improperly, in not abiding by it. He agreed that he had issued the Siruv and had later written the letter to the school, in order not only to discourage Mr Amzalak from pursuing his rights, but also to pressure him to pay the award which had been made.

How the issues lying between the parties must be approached

The issues to be resolved in these proceedings concern whether leave to enforce the Beth Din's award should be given to Mr Thaler and whether the award should be set aside for misconduct.

The proper resolution of the dispute which Mr Thaler took to the Beth Din does not arise to be determined, even though the evidence has revealed that the case advanced before the Beth Din by Mr Koncepolski rested on an important, but false, premise.

The Court's task must be approached in light of the observations made in Westport Insurance Corporation v Gordian Runoff Ltd [2011] HCA 37; (2011) 244 CLR 334, in relation to the obligations imposed on arbitrators under the 1984 Act at [19] - [20]:

"19 These statutory provisions indicate that the making of an award in arbitration proceedings is more than the performance of private contractual arrangements between the parties which yields an outcome which rests purely in contract. They also suggest the importance which the provision of reasons by arbitrators has for the operation of the statutory regime. That statutory regime involves the exercise of public authority, whether by force of the statute itself or by enlistment of the jurisdiction of the Supreme Court. It also, as explained later in these reasons, displays a legislative concern that the jurisdiction of the courts to develop commercial law not be restricted by the complete insulation of private commercial arbitration.

20 No doubt it is true to say that the provision of an award under the Arbitration Act lacks distinctive hallmarks of the exercise of judicial power, namely the maintenance of public confidence in the manner of its exercise and in the cogency or rationality of its outcomes, and the operation of the appellate structure and of the case law system. However, it is going too far to conclude that performance of the arbitral function is purely a private matter of contract, in which the parties have given up their rights to engage judicial power[Cf Melbourne Harbour Trust Commissioners v Hancock (1927) 39 CLR 570 at 585-586 and 590-591 ; [1927] HCA 26.], and is wholly divorced from the exercise of public authority."

It was also concluded at [36], that failure to provide a statement of the reasons for the making of an award, as required by s 29(1)(c) of the 1984 Act, may also amount to a manifest error of law on the face of the award, within the meaning of s 38(5)(b)(i) of the 1984 Act.

The Beth Din's decision

The Beth Din's decision of 15 September is so short that it is convenient to quote it in its entirety:

"The dispute we have before us is between two parties Mr Benny Amzalak and Mr J Thaler. Mr Y Koncepolski is representative of behalf of Mr Thaler.

On the 2/9/08 Mr Thaler purchased from Mr Amzalak 685,000 shares in the company Tiaro Cool(sic) Ltd. The price paid was $298,300. The money on the instruction of Mr Amzalak was wired to Hudson Corporate Limited on 28/5/08. Then Mr Amzalak instructed that a further $20,000 be wired to his private accounts. This was done on the 4/9/08. Mr Amzalak filled out the standard transfer form stating clearly the above mentioned transaction was conducted signing his name in mentioning his own company Anything Communications PTY Ltd.

At the time of this transaction Mr Amzalak had this amount of shares in his account as confirmed by computer registry. The contract should have been sent to the normal offices but because Mr Koncepolski was in America and was involved in other matters it was not handed in till a few months later. When this was done Mr Thaler was told that no such transactions were recorded and no shares were registered in his name.

Acting on his behalf, Mr Koncepolski then went to Rabbi Moshe Gutnick who instructed Mr Amzalak to desist from selling any shares of his own private shares and to set up a Din Torah. This took a few months to organise.

The evidence presented to the Beis Din shows clearly that the seller took place legally and the money was handed over (the documents) were shown the Beis Din but were not registered or delivered to Mr Thaler.

The Beis Din hereby rules that Mr Amzalak should pay Mr Thaler the $298,000 which was forwarded as payout for the shares plus another $20,000 which Mr Amzalak asked him for later. This should be done within 30 days. As the halacho dictates in such case "Shibud Nechosim" a lien on property and all belongings takes place."

Mr Thaler's case was that despite its brevity, this decision satisfied the requirements imposed on the Rabbis by s 29(1)(c), because, given the issue before the Beth Din, "no more than a reasonably rudimentary identification of the issues, evidence and reasoning for their conclusion" was required. That was in issue.

What Mr Thaler otherwise sought to establish

Mr Thaler accepted that the leave which he sought under s 33 required that he establish that;

1. The parties had submitted to the arbitration;

2. That the arbitrators were duly appointed; and

3. That reasons for the decision were given in accordance with the requirements of s 29(1)(c) of the 1984 Act.

There was no issue as to the appointment of the three Rabbis to constitute the Beth Din, but that Mr Thaler had submitted to the arbitration was also in issue.

The misconduct Mr Amzalak alleges

The alleged misconduct on which Mr Amzalak relied included:

Threats made against him by Rabbi Kaminetsky in May 2013 prior to the Beth Din proceedings being agreed;
Failure to give adequate notice of the Beth Din proceedings;
Actual or apprehended bias against him on the part of both Rabbi Kaminetsky and Rabbi Telsner;
Various procedural deficiencies at the Beth Din hearing, including in relation to the preparation and execution of the agreement under which the hearing proceeded; the rules under which it was conducted; and the way in which it was conducted, including by the Rabbis unfairly disadvantaging him, by discussing the parties' cases within earshot, in Yiddish (a language which he could not well understand, but Mr Koncepolski could); and by refusing him the opportunity to call relevant evidence from two witnesses;
The Rabbis misconceiving the issue they were to determine; failing to consider or determine the case which he had advanced to defend Mr Thaler's claim; failing to require Mr Thaler to produce relevant documents; and failing to consider relevant material provided after the hearing;
Failure to issue an interim award; and
Failure to give proper or adequate reasons in relation to the matter over which the parties had joined issue.

Reasons for rulings made at the hearing

Before turning to deal with the other issues lying between the parties, I should give reasons for two rulings made at the hearing.

Refusing Mr Thaler leave to give evidence and making a ruling under s 136 of the Evidence Act 1995 in relation to Mr Koncepolski's evidence

During the course of Mr Koncepolski's cross-examination, after Mr Amzalak had given his evidence, an application was made by Mr Thaler, for leave to give evidence in reply and for a ruling under s 136 of the Evidence Act, in relation to Mr Koncepolski's evidence. I refused both applications.

To that point, the proceedings had had an unfortunate procedural history. Before the hearing, directions had been repeatedly given to the parties, that their evidence be led by affidavit. Mr Thaler had made a forensic decision not himself to give any evidence in the proceedings, but to rely on affidavit evidence of Mr Koncepolski, Rabbi Kaminetsky and Rabbi Telsner. That decision was made in the face of the onus which lay on him to make out a basis for the order which he sought, which was opposed and notwithstanding that Mr Amzalak was seeking to have the Beth Din's award set aside for misconduct.

By the time that these applications were argued on 9 April 2013, it was apparent from the answers Mr Koncepolski had given in cross-examination, that not only had credit issues arisen between him and Mr Amzalak over a number of matters, but also that the honesty and reliability of his evidence was otherwise in issue, given documents which had emerged in the case which Mr Thaler himself advanced. It also appeared that other credit issues were likely to arise between Mr Koncepolski and that witnesses.

Section 136 provides:

"136 General discretion to limit use of evidence

The court may limit the use to be made of evidence if there is a danger that a particular use of the evidence might:

(a) be unfairly prejudicial to a party, or

(b) be misleading or confusing."

The ruling sought was that in order to avoid unfair prejudice to Mr Thaler and Mr Koncepolski, it should be directed that the use to which answers he had given in cross-examination and documents tendered were put should be restricted to supporting any submission that where Mr Koncepolski and Mr Amzalak's evidence contradicted each other, Mr Amzalak's evidence should be preferred. In submissions it was accepted that the direction should extend to credit issues arising in relation to other witnesses as well.

I concluded that no basis for such a ruling had been established. To the contrary, to make such a ruling would have been unfairly prejudicial to Mr Amzalak, given the matters over which the parties had joined issue; the time at which it was made, after Mr Amzalak had given his evidence; and the circumstances in which the application was made.

At that stage it was apparent that there was not only a contest over Mr Thaler's involvement in the transaction the subject of the Beth Din proceedings, but also as to Mr Koncepolski's real interest in the transaction and these proceedings. Mr Amzalak had earlier notified Mr Thaler and Mr Koncepolski that a costs order would be sought against Mr Koncepolski. What had transpired at certain points of the Beth Din hearing was in issue, as were other relevant matters. The resolution of all these matters depended not only on the evidence of Mr Amzalak and Mr Koncepolski, but also on the evidence of other witnesses and what certain documents, including the transcripts of the Beth Din hearing, revealed.

Mr Thaler had brought these proceedings by way of summons, which gave no particulars of his case. The Uniform Civil Procedure Rules 2005 did not require any defence to be filed to that summons. The onus fell on Mr Thaler to establish his entitlement to enforce the Beth Din's award under the 1984 Act. Given the cross-examination of Mr Amzalak, the first witness called at the hearing, it was apparent that how he defended the summons, came as no surprise to Mr Thaler. Mr Amzalak had earlier been cross-examined as to his understanding of the roles of Mr Thaler and Mr Koncepolski in the disputed transaction

This reflected that both prior to and at the Beth Din hearing, as well as in his affidavit evidence, Mr Amzalak had raised, amongst other things, that he was not a party to the disputed transaction; that he had only ever dealt with Mr Koncepolski, who he had long known and had dealt with, in various dealings in which he had represented Mr Tan; that he did not know Mr Thaler; and that to him, Mr Koncepolski and Mr Thaler were one and the same. Mr Amzalak had always said that he had acted as Mr Tan's representative in the negotiations over the disputed shares. After the Beth Din's decision was given, Mr Amzalak sought to pursue its review, having raised with the arbitrators various difficulties with the case which Mr Koncepolski had put, relying on correspondence sent by Hudson Investment Group Limited.

Mr Amzalak had been cross examined about these matters, as well as in relation to the document on which Mr Koncepolski had relied at the Beth Din, which he claimed was the original share transfer form which Mr Amzalak had signed. Mr Koncepolski was unable to produce that document in these proceedings. In his cross-examination, it later emerged that Mr Koncepolski had not had the original share transfer form, as he had claimed before the Beth Din. The document he had presented was only a copy.

Mr Amzalak had also been cross-examined as to his understanding of Mr Thaler's involvement in the transaction and the arbitration. One of the answers he gave was that while Mr Thaler had signed an authority for Mr Koncepolski to represent him at the Beth Din, to him they were one and the same.

In re-examination he was asked to explain what he meant by this answer. The question was objected to and I allowed it, observing that it was not clear to me what Mr Amzalak meant by the answer he had given. The evidence which he then gave was:

"Q. Yesterday you told her Honour this:

"That the document that was signed had that he was acting on behalf of Mr Thaler. But I added that to mean this Mr Thaler and Mr Koncepolski" are one and "the same."

That is what you said to her Honour yesterday?

A. Correct.

Q. My question to you, sir, what did you mean by "one and the same"?

OBJECTION. NOT ARISING IN CROSS EXAMINATION

WHITE: That was the answer that he gave, which was non responsive.

HER HONOUR: There was no objection to it at the time, it was not struck out. I must say at the time I had a question as to what he meant. It could have several meanings and I think it is certainly something that can be clarified in re examination.

I allow the question.

SEGAL

Q. What did you mean?

A. With regards to what I mean, "the same", Mr Koncepolski when the initial transaction was being discussed between himself and Mr Tan and through various emails would negotiate or request certain amount of shares in certain companies. And he, as the individual, was the one who was making those requests. He then made the decision, himself, to put it in the name of Shlomo Thaler. To me when I say, they're the same, we never met Shlomo Thaler. He didn't exist as a physical person. It was someone that Mr Koncepolski used as a name to put shares in the name of.

Q. That was your understanding

OBJECTION

WHITE: There was some evidence about what Mr Koncepolski subjectively, in his own mind, decided. This witness can't know that.

HER HONOUR: Yes, that's certainly true. Is that part of the answer, pressed?

SEGAL: Not that part of the answer, no.

HER HONOUR: You might look at the transcript in due course and just agree on what should be struck. But I must say I don't understand the answer and I'm not at all sure whether Mr Amzalak is saying that he does not know whether Mr Thaler exists as a person, that there is only one person, Mr Koncepolski, who on occasions uses the name "Mr Thaler" or something else. Perhaps that could be clarified?

SEGAL

Q. You heard what her Honour just said. What is it you are saying of those alternatives, that her Honour mentioned, or any other alternative that you mean by your answer?

A. For example, in several emails where there is discussions of amount of shares and a price and speaking to Mr Tan and et cetera and et cetera, there is a note from Mr Koncepolski saying, "Put the shares in the name of Shlomo Thaler." So at his request those shares were put in the name of Shlomo Thaler. But as regards to Shlomo Thaler having any involvement in any of the transactions or negotiations or discussions were between Mr Koncepolski and Mr Tan via myself, either via emails or telephone calls.

OBJECTION. NO EVIDENCE

WHITE: This witness is purporting to give new evidence about the emails and it's not identified.

SEGAL: The evidence, I submit, should not be struck out. Where it will fit in depends upon the rest of the evidence. But as it stands it's an answer to the question and it's not an inappropriate answer.

HER HONOUR: I don't propose to strike it out. I'm not at all sure that there are no references in emails to conversations between Mr Koncepolski and Mr Tan. If my understanding about that is incorrect no doubt in due course I'll be told.

But, Mr Segal, I don't think my question has been answered. I'd like to understand whether or not Mr Amzalak is saying that Mr Thaler doesn't exist, that is that the name "Shlomo Thaler" is just a name which Mr Koncepolski uses when he wishes and they are one and the same person; or whether he is rather saying that he is a person, who exists, but is someone who he has never met.

SEGAL: I will put it directly to the witness, might be easiest and quickest.

HER HONOUR: Mr Amzalak has heard the question, if you want to put something, please do.

SEGAL

Q. Mr Amzalak, you heard what her Honour just said.

A. Correct.

Q. Are you saying that he doesn't exist or you don't know he exists? What are saying about that?

A. There is a person by Shlomo Thaler that I believe resides in a place in Jerusalem whether that is any link to Mr Koncepolski stating that the actual individual, who is asking for the shares to go in, or if he is using that name to put shares in. That is what I'm saying. He exists for my understanding as a person that living in Israel but that is as far as I know of existing. But when it comes to Mr Koncepolski making a decision to put his name on that that's totally a decision on his behalf.

Mr Thaler was given leave to ask further questions in cross-examination about this topic, after I said that "I apprehend that perhaps I have raised an issue that is new". In the result there was some further short cross-examination on the topic.

Mr Amzalak had also been cross-examined about the payments made for the disputed shares. At the end of his evidence, before Mr Koncepolski was called, a document was sought to be tendered by Mr Thaler, which was marked MFI 7, to establish that payment had been made for the disputed shares out of Mr Thaler's margin lending account. The tender was deferred. When the hearing resumed, it was not pressed by Mr Thaler, but the document was later tendered by Mr Amzalak.

During the adjournment steps were taken by Mr Amzalak to pursue the question of the authenticity of Mr Thaler's signature on that document, by the issue of a subpoena for the production of Rabbi Aber's passport, who, it appeared on the face of the document, had witnessed Mr Thaler's signature, as well as Mr Thaler's passport.

At the resumed hearing a motion was pressed for Mr Thaler, who sought an order setting aside the subpoena. I dismissed that motion, concluding that it had not been established that the authenticity of MFI 7, was not relevant to matters which had to be decided in the proceedings. In the cross-examination of Mr Koncepolski which followed, he revealed that it had been he, not Mr Thaler, who had signed the document, using Mr Thaler's name.

It was after this development, during the course of Mr Koncepolski's ongoing cross-examination, that the application for Mr Thaler to be given leave to give evidence in reply and the ruling sought under s 136 was made, by reference to Rule 14.14 of the Uniform Civil Procedure Rules. That Rule requires that in a defence or subsequent pleading, a party must plead specifically any matter that, if not pleaded specifically, may take the opposite party by surprise. It was apparent, as was finally accepted, that this Rule had no application in this case, given that Rule 14.1 provides:

"14.1 Application

This Part applies to proceedings commenced by statement of claim and to proceedings in which a statement of claim has been filed."

The Rules did not require that Mr Amzalak file any defence to the summons. The issue of Mr Thaler's entitlement to enforce the award was not raised on the cross-claim, where orders setting aside the award were sought for alleged misconduct in the conduct of the arbitration, but clearly it did not need to be. It was for Mr Thaler to establish his right to enforce the arbitral award he pursued by his summons. Mr Amzalak's cross-examination had been directed to the matters Mr Thaler accepted in final submissions he had to establish, in order to make out his case for orders under s 33. They included that Mr Thaler had submitted to the arbitration with Mr Amzalak. From Mr Amzalak's cross-examination, it was apparent that it was appreciated that this was in issue.

Mr Thaler's late application for leave to give evidence in support of his case was pressed on the basis that it had not earlier been appreciated that Mr Thaler's role, as a proper plaintiff, was in issue. In the circumstances that submission could not be accepted.

The application was not made by motion, supported by an affidavit sworn by Mr Thaler, or at least his solicitor, as one might have expected in the circumstances, to explain how this late application came to be made. Nor was any evidence led to support the application, for example, as to any representative error involved in the decision that evidence would not be called from Mr Thaler, to support his case.

It appeared from the submissions advanced that prior to the hearing the parties had not taken any steps to identify or narrow the real issues lying between them, as s 56(3) of the Civil Procedure Act 2005 envisages that they will, in order to assist the Court to further the overriding purpose there specified, the just, quick and cheap resolution of the real issues in the proceedings. Nevertheless, the way in which Mr Amzalak defended Mr Thaler's summons had clearly been appreciated, even before Mr Koncepolski was called. That was not surprising, given the advice which had been given prior to the hearing, that an application would be made for a costs order against Mr Koncepolski.

On Mr Koncepolski's affidavit evidence he is a businessman, and Mr Thaler's attorney and representative in Australia, who had Mr Thaler's complete authority to act on his behalf, including in relation to the share transaction and the Beth Din proceedings. The application for leave for Mr Thaler to give evidence was plainly made only when it came to be appreciated that there were real difficulties flowing from the evidence Mr Koncepolski was giving in his cross-examination.

To then permit Mr Thaler to revisit the decision not himself to give any evidence, once its adverse consequences came to be appreciated and only after Mr Amzalak had given his evidence already, in my view did not accord with the requirements of s 56 of the Civil Procedure Act, or the obligations imposed on the Court by s 58(1), to act in accordance with the dictates of justice.

Having in mind the procedural history of the matter and the time, trouble and expense which would result if the leave sought was granted, the course belatedly proposed could not justly be permitted. That history included repeated directions and orders as to the filing of evidence, which had not been complied with and a hearing which had at that point already adjourned once, when it was not completed within the allotted time and it appeared, would not conclude in the further time allocated, in large part because of unfolding developments with the evidence given by Mr Koncepolski.

Nor did the leave sought accord with the requirements of s 57, which provides:

"57 Objects of case management

(1) For the purpose of furthering the overriding purpose referred to in section 56 (1), proceedings in any court are to be managed having regard to the following objects:

(a) the just determination of the proceedings,

(b) the efficient disposal of the business of the court,

(c) the efficient use of available judicial and administrative resources,

(d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties"

To have granted the application would not only have increased costs, given the opportunity which Mr Amzalak would then have had to be afforded to meet the new evidence, of which he had been given no prior warning, but would have added to delay, contrary to the provisions of s 59. Considerations of proportionality of costs, provided for in s 60, also militated against the leave sought being granted.

Granting Mr Amzalak leave to amend the summons during closing submissions

It was during the course of final submissions on 8 May 2013, that Mr Amzalak sought leave, which I granted, to file a further amended cross-summons, which alleged misconduct on the part of Rabbi Telsner, in the form of actual or apprehended bias. That application was made after written submissions were advanced as to evidence which he had given, which, it was argued, revealed that he, as well as Rabbi Kaminetsky had, unbeknownst to Mr Amzalak, acted at the Beth Din hearing on the basis of such bias. Mr Thaler objected to such a case being advanced, the cross-summons not alleging such misconduct.

After discussions between the parties failed to resolve the issue which had emerged, leave to amend the amended cross summons was sought and granted. I indicated that I would later give reasons for the conclusions I had reached, observing:

"HER HONOUR: I propose to grant leave. I'll give reasons in due course in giving the judgment. But for now it's sufficient to say I think that it seems to me that this is one of those circumstances where leave to amend, albeit at a late stage of the proceedings, must be granted, having in mind the provisions of s 64 of the Civil Procedure Act and the overriding obligations imposed on both the Court and the parties by s 56."

Section 64 provides that:

"64 Amendment of documents generally

(cf SCR Part 20, rules 1 and 4; DCR Part 17, rules 1 and 4)

(1) At any stage of proceedings, the court may order:

(a) that any document in the proceedings be amended, or

(b) that leave be granted to a party to amend any document in the proceedings.

(2) Subject to section 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings.

(3) An order under this section may be made even if the amendment would have the effect of adding or substituting a cause of action that has arisen after the commencement of the proceedings but, in that case, the date of commencement of the proceedings, in relation to that cause of action, is, subject to section 65, taken to be the date on which the amendment is made.

(4) If there has been a mistake in the name of a party, this section applies to the person intended to be made a party as if he or she were a party.

(5) This section does not apply to the amendment of a judgment, order or certificate."

It was Mr Thaler who had called Rabbi Telsner to defend Mr Amzalak's application to have the award set aside. It was only during his cross-examination in May 2013, that Rabbi Telsner revealed that before he had given his oral evidence, which began on 10 April, when his affidavit was tendered, that he had come to realise that part of what he had said in his affidavit, which he had affirmed in May 2012, was wrong. There he said:

"31. With regard to paragraphs 87 and 88 of Mr Amzalak's affidavit, I say that, according to my recollection, Mr Amzalak made no reference to the arbitrators about a telephone call from Mr Tan. This is a fabrication. Mr Tan could have, but did not appear at the arbitration, nor did he place any signed written evidence before the arbitrators before the arbitrators' Award was issued on 15 September 2010."

What Mr Amzalak had said in his affidavit was:

"87. Just prior to a break, a phone call came on my mobile phone from Mr Tan. I said to the Rabbis words to the effect: "Mr Tan is calling me, would you like to speak with him?" There was no response from the Rabbis. As the proceedings went on, the Rabbis, in particular Rabbi Telsner, made it clear that they accepted the position put by Mr Koncepolski that anything Mr Tan had to say was irrelevant. In this regard I refer to row 571 of the Transcript. Further, Rabbi Kaminetsky said "I am not interested in Mr Tan. Who signed the form? You? Who signed this? You or Mr Tan?".

88. I also recall at some stage that ComputerShare was called to check the transactions and holdings. It was confirmed that Mr Koncepolski had received 100,000 shares in TCM and that Mr Thaler had received 243,060 shares in Hudson Resources."

Rabbi Telsner said in cross-examination that he had prepared his affidavit, after having listened to the tape recording kept of the Beth Din proceedings, including the tape of the afternoon proceedings, which Mr Koncepolski was unable to produce in these proceedings. The quality of the tapes which were tendered, was admittedly poor. Rabbi Telsner could not explain, however, why he had not taken steps to correct his affidavit, when he realised his error. He accepted that the accusation of fabrication which he had made against Mr Amzalak in his affidavit was a serious one and that it had not been appropriate that his concession that it was an accusation which had been wrongly made, had only emerged when it came out in his cross-examination.

In further cross-examination, it then emerged that even before the Beth Din proceedings had commenced, Rabbi Telsner had formed an adverse view of Mr Amzalak. His evidence was that he then understood from third parties that Mr Amzalak had taken steps to have the Beth Din hearing postponed. On his evidence, it was apparent that this understanding affected not only Rabbi Telsner's approach to Mr Amzalak at the Beth Din hearing, when he raised the difficulties which he faced, because he had received only two days notice of the hearing, but also that of the other Rabbis. Rabbi Telsner conceded in cross-examination that Mr Amzalak was then seeking further time to put his case, which was refused, because of their view as to his conduct before the hearing.

This evidence had to be considered in light of the fact that there was no evidence in these proceedings that Mr Amzalak had acted as Rabbi Telsner had understood. Indeed, the evidence was rather to the contrary.

It is unnecessary to refer further to Rabbi Tilsener's evidence as to how the Beth Din was conducted, at this stage. In the result, I concluded that it had to be accepted that Rabbi Telsner's evidence, given only shortly prior to the close of Mr Thaler's evidentiary case, provided a basis upon which Mr Amzalak was properly entitled to complain that the Beth Din proceedings had been conducted under a misapprehension as to his conduct and on the basis of an undisclosed bias against him on the part of Rabbi Telsner.

I was satisfied that those were circumstances in which the leave sought should properly be granted. The amendment was made in order to put before the Court an issue which had arisen only during the course of cross-examination of a witness who Mr Thaler had called in his case. He had had an opportunity to re-examine Rabbi Telsner. There was no suggestion that the amendment would lead to any prejudice, other than from the fact of raising a new issue, on which Mr Amzalak might succeed. In the circumstances, that was not a proper basis for refusing the leave sought.

It was not suggested that any adjournment would be necessary, if the leave was granted, or that the case so put could not be met by Mr Thaler, or that granting the leave would further prolong the proceedings. In the result, it was abundantly clear that this was one of those situations where the Court's undoubted discretion to grant a late application for leave to amend the pleadings, had to be granted, if justice was to be done between the parties.

The evidence, credibility and reliability

The reliability or credibility of the evidence given by Mr Amzalak, Mr Barber, Mr Koncepolski, Rabbi Kaminetsky and Rabbi Telsner was in issue. Much light was shed on these controversies by contemporaneous documents and by the transcript of the Beth Din hearing.

In resolving these questions, it must be born in mind that human memory is fallible, as McClelland CJ in Eq discussed in Watson v Foxman (1995) 49 NSWLR 315. There his Honour observed at 318:

".... human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience."

That the witnesses, including Mr Amzalak, had an imperfect memory of all that had occurred at relevant times was apparent.

There was a dispute, for example, as to whether certain things had happened at the arbitration only after the arbitration agreement had been executed by Mr Koncepolski and Mr Amzalak and a "kinyan", a Jewish ceremony by which parties submitted to the Beth Din proceedings, had been performed at the beginning of the proceedings. The transcript establishes that a draft agreement was provided to Mr Amzalak and Mr Koncepolski at the outset by the Rabbis, but that it had to be amended by Rabbi Ulman's secretary and that the final agreement was executed only after the hearing was well underway. That accorded with Mr Amzalak's evidence, but not with that of the Rabbis or Mr Koncepolski.

Whether another version of the agreement was earlier executed, at a time when another kinyan was performed, was in issue. If it was not, on Rabbi Telsner's evidence, the approach adopted did not accord with the requirements of Jewish law.

In the case of Mr Koncepolski and Rabbi Kaminetsky, not only the reliability of their evidence, but also their honesty arises to be considered. Mr Koncepolski's evidence has to be considered in circumstances where it became apparent that it was he, not Mr Thaler, who had signed a document by which Mr Thaler purportedly gave the Commonwealth Bank certain acknowledgements which it required in February 2007. That document was sought to be tendered even before Mr Koncepolski was called, to establish Mr Thaler's interest in the matters that were the subject of the underlying dispute.

It emerged that it was Mr Koncepolski who had signed the document, using Mr Thaler's name, even though a Rabbi Aber had purportedly witnessed Mr Thaler's signature.

The document acknowledged that Mr Thaler had read certain documents and did not wish to obtain legal or financial advice, amongst other matters. The document related to a margin lending account which, in his evidence, Mr Koncepolski claimed had been established for Mr Thaler, to the Bank's knowledge. That does not accord with the face of the account documents in evidence. Had the Bank had such knowledge, it is difficult to see why the forged document had to be provided. No documents or other evidence which corroborated Mr Koncepolski's claim to have made such a disclosure to the Bank were tendered.

The application form for the account reveals that it was opened in Mr Koncepolski's name. The margin lending account was connected to the personal bank account of him and his wife; he and his wife operated it; and contrary to Mr Koncepolski's evidence, the records establish that he and his wife transferred money out of the margin lending account, which they used for their benefit.

In the application for the margin loan account, Mr Koncepolski not only identified that he, rather than Mr Thaler, was the borrower, but that Mr Thaler was a third party mortgagor. The address disclosed for Mr Thaler in the document is Mr Koncepolski's residential address in Sydney. In his oral evidence, Mr Koncepolski claimed that to the knowledge of the Bank, however, he was not in fact the borrower, but the guarantor. Mr Koncepolski explained that the account had been so opened, because the Bank would not establish such an account for a person such as Mr Thaler, who does not reside in Australia.

Mr Koncepolski's evidence about these matters was impossible to credit.

Mr Koncepolski was given a certificate under s 128 of the Evidence Act, as to his evidence in relation to Mr Thaler's forged signature. In re-examination, he said that he had done so with Mr Thaler's verbal authority, after having taken legal advice from a solicitor he could no longer identify, that he could so sign Mr Thaler's name.

Regrettably, this evidence was also quite implausible. That a solicitor would advise that a person could authorise the forgery of their signature, is unlikely indeed. That Mr Koncepolski misunderstood the advice he had been given, as was later submitted, is in the face of all of the evidence also not possible to credit. Had that been so, it is most unlikely that the explanation for the state of the document would have emerged as it did. Mr Koncepolski acknowledged that he had not intended to disclose these matters himself, when he instructed that the document be tendered. The truth only emerged in his cross-examination, after Mr Thaler and Rabbi Aber's passports were subpoenaed and an unsuccessful application to have the subpoenas set aside was made.

The evidence rather suggests that the Bank was misled and that the margin lending account opened in Mr Koncepolski's name was, in fact, operated for the benefit of Mr Koncepolski.

The margin lending account was linked to the personal account operated by Mr Koncepolski and his wife. Despite his evidence, at one point in his cross-examination, that the margin lending account was used only for Mr Thaler's transactions, when taken to a transaction by which some $27,000 was paid out of the account for 100,000 shares which Mr Koncepolski had said in the arbitration were shares which he had purchased for himself, rather than for Mr Thaler, his evidence was that this transaction was an exception. That, too, was evidence which Mr Koncepolski then resiled from.

In his affidavit, when Mr Koncepolski explained the failure to pay some $30,050 outstanding on the transaction the subject of the Beth Din proceedings, his evidence was that he had paid only a sum of $20,000, because at the time Mr Thaler did not have sufficient funds to make the entire payment due. On the documentary evidence that was patently incorrect. There were sufficient funds in the margin lending account to make the full payment due; the sum of $30,050 was transferred to Mr Koncepolski's personal account; a sum of only $20,000 was then paid for the shares, in circumstances where sufficient funds were clearly still available in that account to pay the full amount outstanding.

Mr Koncepolski then sought to explain what had happened in various ways, which showed that his affidavit evidence had not been accurate. What he finally said boiled down to him having asked his wife to make the payment and that while she had transferred $30,050 from the margin loan account, she had paid only $20,000 and had used the balance for their personal benefit. Mr Koncepolski's various explanations of how this had come to occur and why, were also difficult to credit. Contrary to his assertions, those explanations departed significantly from his affidavit evidence, which was plainly wrong, if his oral evidence was to be accepted.

This was not the only time that Mr Koncepolski gave one account in his affidavit evidence and quite another, in oral evidence. When asked to explain what had happened to the recordings of the Beth Din proceedings, which he had said in his affidavit evidence he had dealt with, he explained that it was not he who had dealt with them, but his wife. It is unnecessary to recount the details of this changing story.

It is sufficient to record that, in the result, I have concluded that Mr Koncepolski's evidence had to be approached with considerable caution. In the case of conflict Mr Amzalak's evidence must be preferred, unless Mr Koncepolski's version is irrefutably established to be true by other reliable evidence.

The evidence of Rabbi Telsner also had to be approached with some caution, given what emerged in his cross-examination. Then he not only resiled from things which he had said in his affidavit, but it became apparent that before he gave his evidence in these proceedings, he had come to appreciate that he had said things in his affidavit which he appreciated were not only wrong, but damaging to Mr Amzalak, but which he had not taken steps to correct.

In the case of Rabbi Kaminetsky there is a question as to whether his evidence is to be preferred over that of Mr Amzalak and Mr Barber. There is no issue that they all had business dealings with each other before the Beth Din proceedings. The evidence given by Mr Barber supports the evidence of Mr Amzalak. Rabbi Kaminetsky disputes their accounts.

Amongst other things, Rabbi Kaminetsky denied at the Beth Din and in these proceedings that he was biased against Mr Amzalak. Here his evidence was that he had not made negative comments about Mr Amzalak to Mr Barber, as the result of what he believed to be a delay in payment of commission due to him and his brother in relation to the transaction in which they had been involved. In these proceedings he even denied that he had any knowledge of Mr Amzalak's involvement, until told by Mr Barber that the delay in the payment of the commissions had been due to steps taken by Mr Amzalak. He claimed that even then, he was not upset with Mr Amzalak, but rather with Mr Barber.

Rabbi Kaminetsky's evidence about these matters was difficult to credit. Mr Barber had no involvement in the matters the subject of these proceedings and no apparent reason not to tell the truth as to what Rabbi Kaminetsky told him about Mr Amzalak, which he had conveyed to Mr Amzalak and which raised a concern on his part, as to Rabbi Kaminetsky's involvement in the Beth Din.

While Rabbi Kaminetsky claimed not to have known of Mr Amzalak's involvement at the time Mr Barber claimed he spoke negatively about him, earlier emails in evidence, including those sent directly to Rabbi Kaminetsky and not just copied to him, refer to Mr Amzalak. His evidence that he never read any of these emails and simply passed all of them on to his brother, was not credible. His explanation of the trigger for taking that step, a reference to a Mr Pascal, was not a trigger present in all of these emails. The documents which he produced at the hearing, which he claimed revealed that he had continued having business dealings with Mr Amzalak, up until shortly before the Beth Din hearing, do not establish that to be the case, nor was that put to Mr Amzalak. To the contrary, they suggest that he had ongoing dealings with Mr Barber, not Mr Amzalak.

The transcript of the account which Rabbi Kaminetsky gave of these matters at the Beth Din is not complete. Nevertheless, in the result, having considered the various evidence as to these matters, I have concluded that Rabbi Kaminetsky's evidence about these matters cannot be preferred over that of Mr Barber and Mr Amzalak. In the result, his evidence also had to be approached with some caution.

How the arbitration before the Beth Din in Zablo came about

In 2009, Mr Koncepolski approached Rabbi Gutnick of the Sydney Beth Din to pursue Mr Thaler's claim in relation to 685,000 TCM shares. Rabbi Gutnick spoke to both Mr Koncepolski and Mr Amzalak about their respective claims and counter claims. He wrote to them on 14 December advising of his decision.

Rabbi Gutnick determined that orders requiring Mr Amzalak to deliver 685,000 TCM shares could not be made, as Mr Koncepolski sought. The matters were in dispute and required a formal Din Torah. Mr Koncepolski had threatened to bring civil proceedings. Rabbi Gutnick determined that could not be permitted, Mr Amzalak not having refused to go to a Din Torah and having undertaken that all shares held would be available, pending the outcome of any Din Torah.

Rabbi Gutnick considered that his undertaking should be formalised and ordered that Mr Amzalak do all things necessary to ensure that 685,000 TCL shares were available for delivery to Mr Koncepolski, pending the outcome of a Din Torah. He urged a speedy resolution of the dispute. The order was in force for seven days, 'or until both parties signed a "shtar borerus " (a Halachic arbitration agreement)'. If Mr Amzalak failed to sign the shtar borerus, the order remained in effect until he did so. If Mr Koncepolski failed to sign the shtar borerus, the order was to lapse at the end of seven days. Both sides were given the right to approach the Beth Din further. Mr Amzalak's willingness to attend a Din Torah was noted and Mr Koncepolski was advised that should Mr Amzalak fail to attend, permission to move to the civil jurisdiction would be granted.

The terms were then discussed and on 4 January 2010, Rabbi Gutnick wrote to Mr Amzalak and Mr Koncepolski, providing the shtar borerus for signature. It identified that a dispute had arisen in relation to the purchase of 685,000 shares in TCM by Mr Thaler from Mr Tan and the alleged non-transfer of ownership of those shares by Mr Tan to Mr Thaler, as well as related matters. It identified Mr Koncepolski to be Mr Thaler's representative and Mr Amzalak to be Mr Tan's representative.

Mr Amzalak responded to Rabbi Gutnick by email, advising that he was happy to sign the shtar borerus, but that he assumed that Mr Koncepolski or Mr Thaler needed to sign it first. There was no response from Mr Thaler or Mr Koncepolski and no evidence of any further approach on their part to the Sydney Beth Din. Mr Koncepolski's evidence in these proceedings was that Mr Thaler was not prepared to sign the shtar borerus, because he was not satisfied with its terms. In the result neither Mr Thaler nor Mr Koncepolski nor Mr Amzalak signed it.

On 16 February Mr Thaler wrote by email to Rabbi Kaminetsky, appointing Mr Koncepolski to act on his behalf in the dispute and asking the Rabbi to accept all instructions from Mr Koncepolski as if they were from him. Rabbi Kaminetsky's evidence was that he then also spoke to Mr Thaler to satisfy himself as to his appointment of Mr Koncepolski.

On 23 April 2010, by letter sent to Mr Amzalak by his solicitor, Mr Peter Wayne, Mr Thaler purported to rescind his contract with Mr Amzalak for the purchase of the TCM shares. Repayment of $293,300 was demanded. Mr Wayne also claimed that Mr Amzalak had failed to comply with the Beth Din's orders. In his reply of 2 May, Mr Amzalak disputed this. He advised that Rabbi Gutnick had forbidden Mr Thaler to pursue his claims in the civil courts and that Mr Thaler had not signed the agreement which the Rabbi had provided. He asked Mr Wayne to provide the share transfer form and other documents which Mr Thaler relied on to advance his claim, so that the matter could be resolved. The only response was a letter of 12 May from Mr Wayne, informing him that Mr Thaler considered that the contract had been rescinded.

It was not until 4 May 2010 that Mr Thaler sent Mr Amzalak an email advising that he had seven days to comply with his request for ""Zablo" with regard to your continuous failing to deliver to me the 685,000 shares in Tiaro you obligated yourself to deliver nearly 2 years ago. This is also, as you well know, a serious offence". He said that he had appointed Rabbi Kaminetsky as his "Borer"; and advised that Mr Amzalak should himself choose a Borer within seven days.

Mr Amzalak responded by email to Mr Thaler the same day, again requesting copies of documents he there identified; explaining that he was not sure if Mr Thaler's money and shares were mixed up with those provided to Mr Koncepolski; and observing that Mr Thaler knew that his dealings had been with Mr Tan and his companies. He also asked why it had taken over a year before any complaint was made over a failure to transfer the disputed shares. Mr Amzalak said he was willing to go to a Beis Din, as had been the case since Rabbi Gutnick had approached him and that he would seek his advice as to what next step he needed to take. There was no response from Mr Thaler.

Instead, on 15 May, Rabbi Kaminetsky sent an email to Mr Amzalak in Hebrew. The same day Mr Amzalak requested that he write in English, Rabbi Kaminetsky replied:

"Even though I am sure that you did understand what I have written to you below in Loshon Haroidesh, for the sake of absolute clarity, I will impart the message to you in plain English.

With regard to a dispute with Shlomo Thaler:

I am hereby informing you, that your email response to Mr Thaler (to appear for Zablo (Din Torah) is not acceptable according to the Din, since according to the Din Shlomo Thaler does not have to provide you any documents in advance of your appearance. Rather, in the case where a Jew is called to appear for Din Torah, he is obligated to come.

Consequently I am informing you that should I not hear from you by Sunday 10th Sivan, that you have agreed appointed a Borer for, we will:

1) Issue a Heter to Shlomo Thaler to resolve his claim in the gentile courts

2) Publicise a Ksav Siruv ("refusal to appear") about you

3) Publicise that no one is allowed to do business with you."

Rabbi Kaminetsky was cross-examined as to how this advice came to be written, given what Mr Amzalak had told Mr Thaler. He explained that he considered Mr Amzalak was being deceptive in what he had said as to his willingness to go to a Beth Din. If Rabbi Kaminetsky's belief rested on what Mr Thaler and Mr Koncepolski told him about their prior dealings, he was plainly misled. Initially Rabbi Kaminetsky said in cross-examination that beforehand, he had only spoken to Mr Koncepolski about this matter, but later he said that he had also spoken to Mr Thaler and that he must also have consulted with Rabbi Ulman and Rabbi Telsner.

The latter evidence cannot be accepted. The evidence shows that neither Rabbi had then been appointed.

Initially Rabbi Kaminetsky agreed in cross-examination that the sanctions he had threatened Mr Amzalak with in his email were serious ones. He then resiled from that evidence, suggesting that it was commonplace for Jewish people to refuse to appoint Borers and to go before a Bin Torah, as they were obliged by Jewish law to do, and that such threats were routinely made by Borers to force them to agree. That evidence was difficult to credit, particularly given Rabbi Kaminetsky's earlier explanation of the seriousness of the ramifications he had threatened Mr Amzalak with.

Mr Amzalak's evidence was that when he received this email he again sought Rabbi Gutnick's advice. He understood that under Jewish law he was obliged to appear before the Beth Din in Zablo, which Mr Thaler required. Rabbi Ulman was then approached and Mr Amzalak appointed him as his Borer. Rabbi Gutnick also helped him respond to Rabbi Kaminetsky. By email of 23 May, he advised Rabbi Kaminetsky that Rabbi Ulman had been appointed his Borer and that Rabbi Gutnick had a shtar borerus ready to be signed.

Rabbi Kaminetsky forwarded Mr Amzalak's email to Mr Koncepolski on 23 May. On 24 May, Rabbi Kaminetsky acknowledged Mr Amzalak's appointment of Rabbi Ulman and advised that he would consult with him as to the selection of a Rabbi, who would act as Sholish. He observed that "as you are aware, despite many promises from you, you did not sign a shtar borerus with the Sydney Beis Din" and advised that the Sydney Beis Din had no part to play in the Zablo.

It is apparent from this communication that it was Mr Thaler who remained unwilling to sign the shtar borerus provided to him by Rabbi Gutnick in January.

Mr Amzalak's evidence was that he thereafter received no notification of the Beth Din proceedings. On Saturday 22 August, he was approached by Rabbi Gutnick, who enquired whether he had been advised that the hearing had been fixed for Monday, 24 August. He had not. He then spoke to Rabbi Ulman, who confirmed the date set. It was then that he learned of Rabbi Telsner's appointment. Mr Amzalak had to that point not received any advice as to Mr Thaler's case against him, or the documents it rested on. He sought more time to prepare for the Beth Din. Rabbi Ulman later advised him that it was to be adjourned for only one day. Mr Amzalak prepared as best he could, taking with him documents, including emails between him and Mr Koncepolski, which he considered were relevant, to the Beth Din hearing on 25 August.

There is no reason to doubt this evidence even though it was challenged in cross-examination by the suggestion that he had months to prepare, since he had first learned of the dispute in December 2009 and that he had with him most of the relevant documents. It was also Rabbi Telsner's evidence that he understood that Mr Amzalak had long known of his appointment and had repeatedly sought to delay the Beth Din hearing. There was, however, no evidence that this was the case. Rabbi Telsner could not recollect from whom he had received this understanding. He suggested that it could have been from Rabbi Ulman. There is no evidence that Mr Amzalak had earlier been notified of Rabbi Telsner's appointment, or that he had ever sought any delay, other than the request he made of Rabbi Ulman on 22 August.

On 24 August, Mr Amzalak wrote to the three Rabbis advising:

"I would like to inform you of the following.

I was involved in a transaction just under a year ago with Rabbi Kaminetsky, his brother in Ukraine and other parties. The transaction went through and Rabbi Kaminetsky and his brother received over $10,000 each from the funds I received. Over the past 6 months we have tried to transact again and for whatever reason it has not happened. Several times during this period Rabbi Kaminetsky has spoken negatively about me to one of the parties involved and it is very clear he has an issue with me. I am not here to discredit anyone but I am under the impression that the 3 Dayonim are ALL not to have any prior detailed knowledge and must come with an open mind willing to hear the information before making a decision. I am concerned that Rabbi Kaminetsky has already be(sic) spoken to and for whatever reason he now has a negative bias to me. For the record I am not aware of ever having a conversation with Rabbi Kaminetsky over the past few years and potentially ever, which makes the situation even worse.

I would like to inform you that:

1) I will be bringing a claim against Shlomer(sic) Thaler/Yankel Koncepolski. I am hoping to send the details prior to the Din Torah.

2) a representative from Hudson will be attending as they are the party involved in the transaction.

3) I am requesting to video record the Din Torah."

Mr Amzalak explained that he so raised his concerns about Rabbi Kaminetsky at this point, because it was not until then that he considered he had anyone to raise them with, having only just learned of Rabbi Telsner's appointment. Mr Amzalak reiterated his concerns about Rabbi Kaminetsky at the Beth Din hearing, first with the three Rabbis, before Mr Koncepolski arrived and again afterwards.

Rabbi Kaminetsky's evidence in these proceedings was that he was not biased against Mr Amzalak, but he was offended by his application; he disputed Mr Amzalak's account of what had occurred between them, or that he had ever expressed negative views about him, although there was no issue that they had been involved in a business dealing and that there had been a delay in the payment of a commission to Rabbi Kaminetsky and his brother, about which he was concerned.

From their evidence it was also apparent that at the time that Mr Amzalak first raised this question of bias, Rabbi Kaminetsky and Rabbi Tilsener already held negative views of Mr Amzalak, for other reasons not then disclosed to him. They plainly considered that he raised this matter as he did, in an attempt to delay the Beth Din proceeding, but that was not revealed to Mr Amzalak.

There is a dispute between the parties as to whether Rabbi Kaminetsky offered to step down as Borer at the Beth Din and Mr Amzalak waived his objection. The transcript captures the topic being discussed, but not the offer to step down, or its acceptance. It cannot be heard on the tape.

Rabbi Telsner's evidence was that the matter which Mr Amzalak had raised was considered by the other two Rabbis to be serious and that if he had insisted that Rabbi Kaminetsky should step down, the Beth Din would not have proceeded. Mr Amzalak was not, however, informed of this.

Rabbi Telsner's evidence was that he had formed a negative impression of Mr Amzalak, understanding that he had not only refused to sign an shtar borerus, but had also sought to delay the Beth Din proceedings. He considered that Mr Amzalak had had plenty of opportunity to raise his concerns about Rabbi Kaminetsky before the hearing and that he ought to have done so. He considered that raising this issue as he did, was another tactic designed to delay the hearing proceeding. He viewed Mr Amzalak's complaints at the Beth Din about the short notice he had received of the hearing in a similar light. It finally emerged from his cross-examination that the Rabbis understood that when the hearing commenced, Mr Amzalak was seeking more time, but they were not prepared to give it to him, given the view that they had formed, that he simply wanted to delay the Beth Din proceeding. This was also not revealed to him.

The parties' cases before the Beth Din

What Mr Koncepolski advanced before the Beth Din was relatively simple. He had represented Mr Thaler in negotiating an agreement with Mr Amzalak for the purchase of 685,000 TCM shares from Anything Communications, a company of which Mr Amzalak was the sole director and shareholder. In May 2008, Mr Thaler had paid $342,000 for the shares, as Mr Amzalak had directed, into the bank account of Hudson Corporate Limited and a further $20,000 in September 2008 into the bank account of Anything Communications. Mr Amzalak had signed a form on behalf of Anything Communications on 2 September 2008, transferring the shares to Mr Thaler. Mr Koncepolski presented a document to the Beth Din, which Mr Amzalak accepted was the original signed transfer form, as Mr Koncepolski claimed.

Mr Koncepolski claimed that it was as the result of an oversight, that he first attempted to register the share transfer only in December 2009. He then learned that Anything Communications had disposed of some of the TCM shares and was no longer in a position to transfer the agreed number of shares to Mr Thaler. Mr Koncepolski said that in the result, he could not register the transfer form. Mr Thaler had not been provided with the shares he had purchased, nor had the money he had paid for those shares been returned. Mr Thaler wanted his money returned to him.

The case which Mr Amzalak advanced was also relatively simple. It was that he was not a party to any agreement with Mr Thaler, but had always acted as Mr Tan's representative. Both Mr Thaler and Mr Koncepolski had been involved in a number of share transactions with Mr Tan, whom he had represented since February 2008. While Mr Amzalak had known Mr Koncepolski for many years, he had never had any involvement with Mr Thaler, to him they were the same. Any claim which Mr Thaler had in relation to the disputed TCM shares, could not be advanced against him, but had to be pursued with Mr Tan. Mr Amzalak explained that he was not certain that the sum of $318,000 which Mr Thaler was claiming, had been paid for the TCM shares dealt with in the transfer form.

While the respective claims were simple, the proof of them was not. Even for Mr Thaler it was submitted in these proceedings that 'there was some confusion as to what the $342,000 had been paid for".

Mr Koncepolski produced a document signed by Mr Thaler, authorising him to act on his behalf, as well as various other documents to establish the agreement and the claimed payments, including the document he claimed was the original transfer form which he and Mr Amzalak had executed.

Mr Amzalak did not dispute Mr Koncepolski's authority, or that the transfer form Mr Koncepolski produced was the original. His case was that he had signed the form as Mr Tan's representative and as he had been instructed.

Mr Amzalak produced various documents, in order to shed light on the dealings in which Mr Koncepolski had been involved with Mr Tan. What all these documents were was in issue in these proceedings, given the way in which the Beth Din hearing was conducted. It was Mr Thaler's case that what Mr Amzalak attempted unsuccessfully to do at the Beth Din, was to muddy the waters by reference to an implausible and complex transaction between Mr Thaler and Mr Tan, which Mr Amzalak claimed was evidenced by these documents.

What was clear was that by reference to these documents, Mr Amzalak sought to explain that in 2008 he had negotiated one agreement on behalf of Mr Tan with Mr Koncepolski for the purchase of three parcels of shares: 585,000 TCM shares at $.45 per share, a total of $263,250; 100,000 shares in TCM at $.35 a share, a total of $35,000; and 410,000 Hudson Resources Ltd shares at $.18 a share totalling $73,800. The shares were to be transferred upon full payment of $372,050. In June 2008, Mr Tan and Mr Koncepolski had agreed upon the purchase of a further 125,000 shares in TCM at $.80 a share, together with 62,500 options and a further 400,000 shares in TCM at $.85 a share for a total purchase price of $440,000. Mr Koncepolski had nominated Mr Thaler as the purchaser of these shares. Full payment had not been made for these shares.

Payments which had been made, were made in accordance with Mr Tan's instructions. $342,000 was paid to Hudson Corporate Limited in May 2008 and $20,000 to Anything Communications in September 2008, but Mr Amzalak was not sure what the payments were all for. Mr Koncepolski claimed that the payments were for the disputed shares which Mr Thaler had agreed to purchase from Anything Communications.

In these proceedings it transpired that Mr Koncepolski could not produce the document he had claimed at the Beth Din was the original signed transfer form. It finally became common ground that the evidence established that the document Mr Koncepolski had relied on at the Beth Din was not in fact the original transfer form. Contrary to what he had said at the Beth Din hearing, that document was never in his possession.

Mr Amzalak gave an explanation as to how he had come to sign the transfer form for the disputed TCM shares. He claimed Mr Tan had asked him to hold a number of TCM shares, funds for which were provided by Hudson Corporate Limited, in order to fulfil an ASX requirement. A number of TCM shares had then been transferred to Anything Communications, including the shares which Mr Koncepolski negotiated to purchase. In accordance with Mr Tan's instructions, in September 2008 Mr Amzalak and Mr Koncepolski signed a share transfer of 685,000 TCM shares from Anything Communications, which identified Mr Thaler to be the purchaser. The shares which Mr Koncepolski had agreed to buy were not fully paid for. Mr Koncepolski also signed a transfer for a reduced number of shares in Hudson Resources. In these proceedings it emerged that these documents were given to Mr Tan, not Mr Koncepolski.

In December 2008, Mr Tan instructed Mr Amzalak that $30,050 remained outstanding of the $372,050 purchase price for the first transaction and $400,000 for the second and that he was to transfer 525,000 TCM shares to a company Mr Tan then nominated. That was what Mr Amzalak did and that was why Anything Communications no longer had 685,000 TCM shares in December 2008.

At the Beth Din Mr Koncepolski disputed the way in which Mr Amzalak sought to characterise their dealings, insisting that all that the Beth Din was concerned with, was the one transaction entered by Mr Thaler and Mr Amzalak, in relation to the 685,000 TCM shares, for which he had paid. He claimed that Mr Thaler had not received the shares the subject of the share sale transfer form Mr Amzalak had signed and which he produced to the Beth Din. His case was that Mr Amzalak was trying to complicate the clear claim which Mr Thaler had, to the return of the payments he had made for the 685,000 TCM shares, by reference to other unrelated and irrelevant transactions.

It emerged in these proceedings that it was only after the arbitration that Mr Amzalak learned that Mr Koncepolski did not have the original transfer form, on which he relied at the Beth Din.

The Beth Din hearing proceeded on a false premise

There was no issue that Mr Amzalak and Mr Koncepolski met in September 2008 and while they were together, Mr Amzalak signed the share transfer form. What happened to that form thereafter, was initially in issue in these proceedings.

Eventually it was established that all Mr Koncepolski ever had was a copy of the original document which was tendered in these proceedings by Mr Amzalak. Mr Koncepolski disputed that this document was the original. He claimed that the document he had signed had not had Mr Thaler's address in Israel written in, whited over and his own address at Bondi Junction inserted. That evidence cannot be accepted. The only document which Mr Koncepolski did produce in these proceedings, was on its face a copy of the document which Mr Amzalak had tendered.

Mr Amzalak was not given any notice of what case Mr Thaler was going to put before the Beth Din, or what documents were to be relied on at the hearing in August 2010. His evidence was that he had not himself given the original transfer form he had signed to Mr Koncepolski, but that he had accepted what Mr Koncepolski said before the Beth Din, that he had the original share transfer and had tried to transfer it. He assumed that Mr Tan must have given it to Mr Koncepolski. That assumption proved to be incorrect.

It is apparent from the evidence that a difficulty confronted Mr Koncepolski in making out Mr Thaler's claim at the Beth Din, given that he never had the original signed transfer form. That, no doubt, explains the repeated refusal of all of Mr Amzalak's earlier requests, that Mr Thaler explain, or provide the documents on which his claim for the disputed shares rested. That the case which Mr Koncepolski advanced was accepted by the Beth Din, reflects no doubt that like Mr Amzalak, the Rabbis believed him to have been telling them the truth.

Mr Koncepolski was an experienced share trader. His evidence was that it was by oversight that he had failed to register the transfer of the disputed shares in September 2008. He claimed that the dispute arose in December 2009, when Mr Thaler wanted to sell the shares. It was then that he discovered his oversight and attempted to register the share transfer. He was then advised by telephone by Computershare Investor Services Pty Ltd, a share registry in Melbourne, that Anything Communications no longer held 685,000 TCM shares.

That evidence did not, however, establish that there was ever in fact any attempt to register the share transfer. All that Mr Koncepolski seems to have done was to make a phone enquiry as to the number of shares that Anything Communications then held. That is consistent with Mr Koncepolski never having the original share transfer form to register. It is also consistent with Mr Amzalak's evidence that the shares the subject of the agreement which he had negotiated for Mr Tan, had not then all been paid for.

Given that in these proceedings Mr Koncepolski has been unable to produce the document that he claimed, at the Beth Din, was the original share form, the inference that Mr Koncepolski was not truthful before the Beth Din about the document, or his attempt to register the share transfer, is difficult to resist.

Mr Thaler's claim is not established

The Beth Din's decision does not comply with the requirements of s 29(1)(c) and evidences misconduct in the arbitral proceedings

Mr Amzalak's case was that on its face, the Beth Din's decision revealed that not only had the requirements of s 29(1)(c) of the 1984 Act not been met, but also that the Rabbis had not considered or resolved the matters he had advanced by way of defence of Mr Thaler's claim.

There is certainly no reference made, in the reasons given to his claim that like Mr Koncepolski, he was a representative, acting for Mr Tan and that he never entered into the agreement on which Mr Thaler's claim rested. There is also no reference to how Mr Amzalak defended Mr Thaler's claim and no explanation of what the $20,000 payment there referred to, was made for, a matter also in issue at the Beth Din hearing.

Mr Thaler's case was that nevertheless, the requirements of the section were satisfied, because the basic facts of the transaction, in the view of the arbitrators, were identified, supported by the probative evidence before them, as they viewed the available evidence of any substance. They had "succinctly provided the decision they came to and the reasons for it". Merely because Mr Amzalak had relied on various "peripheral related transactions" unsupported by evidence, which were clearly irrelevant, did not require the arbitrators to engage in a long-winded description of every such distraction.

These submissions may not be accepted. The decision given was certainly succinct. But it could not be succinct to the point where the arbitrators failed to give any reasons at all for rejecting Mr Amzalak's case, by reference to the disputed evidence as to what had in fact occurred as between Mr Thaler, Mr Koncepolski, Mr Amzalak, Mr Tan and their companies.

The submission that Mr Amzalak's case was presented in a muddled and confusing manner, may well be accepted. That is an apt description for much of what occurred at the Beth Din hearing. That reflected not only, however, how Mr Amzalak approached the hearing, but the failure to put him on notice of Mr Thaler's claim and the documents it rested on; the failure to clearly identify the matter which the Beth Din was to determine; how Mr Koncepolski approached the proceedings, objecting at every point that the matters Mr Amzalak was seeking to explain were simply irrelevant; and how the Beth Din was conducted. In the result, the task which confronted the Rabbis was clearly a difficult one. Even so, in giving their reasons the obligations imposed by s 29(1)(c) had to be met.

The transcript reveals that the Rabbis considered that documents which Mr Amzalak sought to rely on to establish his case, including emails which suggested that it was Mr Tan with whom Mr Koncepolski was negotiating, through Mr Amzalak, were not relevant to what they had to decide, as Mr Koncepolski asserted. Consistently with this view, in the reasons given for their decision, how Mr Amzalak sought to defend Mr Thaler's case was not even referred to.

In these proceedings Mr Koncepolski's evidence in cross-examination not only revealed that these documents were relevant to what was in dispute, but also that he was well aware, for example, that Mr Amzalak was receiving instructions from Mr Tan, including in relation to the sale price of the TCM shares the subject of the disputed transaction. Through Mr Amzalak, Mr Koncepolski had sought and gained a reduction in that price from Mr Tan.

Had the agreement identified the dispute which the Beth Din was to deal with, it seems likely that the Beth Din would have been conducted in quite a different way. The relevance of the case Mr Amzalak was pressing would have been appreciated and dealt with in the Beth Din's reasons for the award it made.

The arbitration agreement was finally not signed until during the course of the Beth Din hearing

In these proceedings, what documents had been produced at the Beth Din was in issue, as was the question of when the arbitration agreement was signed and what had occurred at various points of the proceedings.

The case finally pressed for Mr Thaler was that the arbitration agreement had been signed twice, once before certain amendments were made to it and the final version, which was in evidence, after it was well underway. That accords with the evidence given by Mr Koncepolski and the two Rabbis, but not with that of Mr Amzalak. This second, earlier version of the agreement was not produced or tendered in these proceedings. That part of the proceedings when, on Mr Thaler's case, the first version of the agreement was signed and a kinyan performed was not entirely transcribed, given the poor quality of the recording.

What the transcript does reveal is that a draft was produced at the outset of the arbitration, when reference is clearly made to a kinyan, but the transcript does not capture it then being performed. The agreement was certainly then discussed. It had to be amended by Rabbi Ulman's secretary. There is no dispute that there was a kinyan performed when the final version, which is in evidence, was produced and signed. There was no explanation as to why a second kinyan then had to be performed. That was a ceremony intended to signify that the parties submitted to the Beth Din process.

I have reservations about the evidence given by Mr Koncepolski and the Rabbis about this issue. It seems quite unlikely that this ceremony was performed twice, once before the agreement was even completed or signed. Had it already been performed, there would seem to have been no need to perform it again, as it was, when the agreement was finally signed.

Even if there was an earlier version of the agreement signed and a kinyan performed, what is clearly established on the evidence is that the final agreement was signed during the course of the Beth Din and a kinyan was then performed, but even then the Beth Din was not conducted according to the terms of that agreement, as I have explained.

The requirement for impartiality was not met

Rabbi Kaminetsky's evidence established that the Beth Din was not conducted in accordance with the requirement of impartiality. Rabbi Kaminetsky's evidence was that he was not actually biased against Mr Amzalak; that he had offered to step down when the question of bias was raised with him at the Beth Din hearing; and that he had not acted as an advocate for Mr Thaler.

That certainly did not accord with the terms of the emails which he had sent Mr Amzalak, even before he had agreed to appoint Rabbi Ulman as his Borer. It is impossible to see that those communications adhered to a requirement of impartiality, a requirement which must extend beyond the actual hearing. The transcript revealed that a similar lack of impartiality continued during the course of the hearing.

Rabbi Kaminetsky's explanation of his role, when taken to aspects of the hearing which suggested that his approach was not impartial, was made by reference to his English, which he explained was not perfect; his spoken English was somewhat limited; and he did not always precisely convey in English, what he was intending to say. Rabbi Kaminetsky had earlier explained that his first language was not English, that he was a speaker of Hebrew and Yiddish and that he also had some difficulties writing in English. He thus had to seek assistance when translating what he had written from Hebrew into English.

Thus, he explained, what he was trying to convey at various points when he used the word 'we', was what the judges were interested in, not what he and Mr Koncepolski were interested in. That he was always speaking on behalf of the other Dayonim is difficult to accept, given how all three involved themselves in the questioning pursued at the hearing.

This point can be illustrated by reference to what the combined transcript records, when Mr Amzalak commenced his explanation (see tab 115 of exhibit 8).

Even understanding Rabbi Kaminetsky's limited command of English, it became apparent from his explanation of the role which he played in the Beth Din process, what he did both prior to, during the proceedings and afterwards, that he did not consider that he was obliged to play an impartial role. Instead, he plainly pursued various active steps to advance Mr Thaler's case.

His explanation was, for example:

"Q. One thing, sir, I suggest to you, you adopted a role in the arbitration as being some form of advocate for Mr Thaler?

A. That's not exactly true because when we have the zabla every borer is supposed to make the maximum for his side. Even though we don't allow to do more, the law is allowed to do it, not advocate to him just a borer, not middle man. I was on his side because he appointed me. I am not his advocate. I told him also something is going to be against the law or something I am not advocating for you."

Even if there had not been actual bias on the part of Rabbi Kaminetsky against Mr Amzalak, that he was partial to Mr Thaler and acted in pursuit of that partiality at the Beth Din, cannot be doubted on his evidence.

Bias is established

On 24 August, the day before the hearing actually proceeded and two days after approaching Rabbi Ulman to enquire as to whether there was to be a hearing on 24 August, Mr Amzalak wrote to the three Rabbis, raising with them his concern about Rabbi Kaminetsky's involvement in their a business dealings; the negative bias which he understood the Rabbi had formed about him, over payment of a commission fee; and the impact of that view on his approach to the arbitration. His evidence was that he considered he had no choice but to proceed to partake in the hearing, but wanted to raise his concern with the Rabbis.

Mr Amzalak appeared at the Beth Din unrepresented, on his evidence also unaware that he had the right to be represented. In cross-examination Mr Amzalak explained that he had not earlier raised his concern about Rabbi Kaminetsky, given what Rabbi Gutnick had advised him would result, if he did not appoint a Borer and appear at the Beth Din. That is, that he would be excommunicated.

Mr Amzalak considered that until Rabbi Telsner was appointed, he had no-one to raise his concern about Rabbi Kamnetsky with. On his evidence, he did not understand, even on 24 August, that he had any right to object to Rabbi Kaminetsky participating, but when the arbitration commenced, attempted again to draw the attention of the three Rabbis to his concern about Rabbi Kaminetski's attitude to him, given their recent business dealings with each other. I can see no reason why this evidence should not be accepted. It explains why Mr Amzalak did not earlier raise his concerns, as Mr Thaler claimed he ought to have done.

The 'Rules of Procedure of the Beth Din in Zablo for Commercial/Civil Disputes' referred to in the arbitration agreement provided on 25 August, are not there explained. They were also not explained at the arbitration. They were not in evidence in these proceedings. The inference is that they would not have assisted Mr Thaler's case. Having the arbitration dealt with by unbiased arbitrators is, however, certainly something which is contemplated by both the 2010 and 1984 Arbitration Acts. On Rabbi Telsner's evidence, it is also an important consideration under Jewish law.

The transcript of this part of the arbitration is not complete. There was an issue between the parties as to whether Mr Amzalak had waived his right to object to Rabbi Kaminetsky, as was the evidence of Mr Koncepolski, Rabbi Telsner and Rabbi Kaminetsky. Mr Amzalak denied any waiver.

In cross-examination Rabbi Telsner's evidence was that the Rabbis considered that the issue Mr Amzalak had raised was a serious one and that if he had pressed his objection, the Beth Din would not have proceeded, but that they did not explain this to Mr Amzalak.

Given what is conveyed in the transcript, it seems to me that it must be accepted that there was some basis for understanding that Mr Amzalak was not pressing his objection. He plainly struggled with his self-representation, perhaps not surprisingly, given all that was hidden from him.

On Rabbi Telsner's evidence, it seems, nevertheless, a matter of fundamental fairness that if, under Jewish law, the Beth Din could not have proceeded if Mr Amzalak's objection had been pressed, that this should have been revealed to him, given the importance of the matter which had arisen and the fact that he was appearing unrepresented.

Mr Amzalak's evidence that he did not understand that he could have pressed that objection, must be accepted. The evidence in this case has established, contrary to what Rabbi Kaminetsky said at the Beth Din, that there was a real basis for Mr Amzalak's concern. Not only did Rabbi Kaminetsky have the adverse opinion of him, about which Mr Amzalak was concerned, it was one which he plainly acted on.

On the evidence of both Rabbi Telsner and Rabbi Kaminetsky, it was not only after the Beth Din that they came to have an adverse opinion of Mr Amzalak. I am satisfied that their evidence would lead a fair minded person with knowledge of the relevant circumstances to consider that they had not brought impartial and unprejudiced minds to the resolution of the issues lying between the parties.

In Rabbi Kaminetsky's case, he believed that Mr Amzalak had refused to have the dispute resolved by the Beth Din, with the result that he had threatened, in writing, to issue a Siruv against him, if Mr Amzalak did not appoint a Borer. His evidence in cross-examination was that he also considered Mr Amzalak's advice that he was prepared to go to a Beth Din and would seek Rabbi Gutnick's advice as to the appointment of a Borer, to be deceptive and that he was not honest as to his limited understanding of Hebrew. That view was consistent with the adverse opinion he had already formed of Mr Amzalak in their business dealings. Plainly he not only had an adverse opinion of Mr Amzalak, it was an opinion which he had acted on, even before the Beth Din hearing. He adopted the same approach at the Beth Din.

In the submissions advanced for Mr Thaler, reliance was placed on the approach of Dawson J in Vakauta v Kelly [1989] HCA 44; (1989) 167 CLR 568. There his Honour observed at [7] - [8]:

"7. Unfortunate or not, it is virtually unavoidable that a judge, sitting in a jurisdiction such as that in which the trial judge was sitting, should form some view concerning a party appearing in case after case and of the expert witnesses habitually called by that party. But, as was pointed out in Reg. v. Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group [1969] HCA 10; (1969) 122 CLR 546, at p 554, a fair and unprejudiced mind "is not necessarily a mind which has not given thought" to relevant matters or one which, having thought about them, "has not formed any views or inclination of mind upon or with respect" to them.

8. The question is, therefore, not whether the learned trial judge had preconceived views arising from his previous experience, but whether his preconceptions were of such a kind or were so expressed as to lead a reasonable person to apprehend that he was unable to approach the resolution of the case in a fair and even-handed manner without any inclination towards one side or the other."

In Rabbi Kaminetsky's case the evidence established not only that he had adverse preconceptions about Mr Amzalak, but that he acted on them. In his case I do think that Mr Amzalak or a member of the public could reasonably entertain an apprehension of bias on his part.

In Rabbi Telsner's case, his adverse opinion rested on an understanding the foundation for which is not apparent and which was not revealed to Mr Amzalak, so that he could deal with it. He believed that the Beth Din hearing had been repeatedly adjourned, because of steps taken by Mr Amzalak. This also affected his approach to Mr Amzalak at the hearing, where he took the view that he had had sufficient notice of the hearing and was simply seeking further unnecessary delay, by his various applications. That a fair minded observer would conclude that he was unfairly disadvantaged as a result, can also not be doubted on the evidence. On Rabbi Telsner's evidence, it is clear that his case and the applications which he made were not dealt with in a fair and even handed way.

Use of Yiddish

Mr Thaler's case was that Mr Amzalak's complaint that he had not understood the Rabbi's conversations would be regarded with suspicion and that this ground of alleged misconduct should be dismissed.

The position at the arbitration was that without objection, the arbitrators reserved to themselves the right to speak amongst themselves in Yiddish. At times they asked the parties to leave the room, while they conferred with each other. At other times they conducted discussions in Yiddish while the parties were present. At other times Hebrew and Yiddish words were used. The parties each produced glossaries of such words, which were not agreed.

Before the arbitration Rabbi Kaminetsky had written to Mr Amzalak in Hebrew and, on his evidence, had been irritated by his request to write in English, which he found difficult. He believed that Mr Amzalak had learned and could read Hebrew adequately, which Mr Amzalak denied. He was cross-examined as to his understanding of both Hebrew and Yiddish. There is no reason to disbelieve his evidence. He plainly has some knowledge of both languages, but it is limited.

Mr Amzalak studied Hebrew and makes no complaint about the use of Hebrew words at the Beth Din, but complains that as it transpired, he was unfairly disadvantaged by discussions conducted by the Rabbis in Yiddish in the hearing of he and Mr Koncepolski. There was no dispute that Mr Koncepolski speaks Yiddish. This was not a matter about which Mr Amzalak made any complaint during the course of the hearing. It is a complaint which emerged only after the transcript was prepared.

Rabbi Telsner and Rabbi Kaminetsky's evidence was that they did not consider that the parties could have heard what they were saying to each other. Mr Amzalak pointed to parts of the transcript, where what the Rabbis were saying was audible. His case was that not only were such discussions caught by the recordings, the transcript showed that Mr Koncepolski had on occasions plainly commented on, or responded to, things which had been said in Yiddish by the Rabbis, while speaking amongst themselves.

It is difficult to see how this approach may not have advantaged Mr Koncepolski, particularly when it is considered that it has now been revealed that unbeknownst to Mr Amzalak, Mr Koncepolski was misleading the Rabbis as to the document on which the case he was advancing for Mr Thaler hinged.

It seems to be a matter of basic fairness that if arbitrators are to discuss aspects of an arbitration amongst themselves in front of the parties, that they should conduct such discussions in a language which all parties understand. Otherwise, they should ask both parties to leave, as the Rabbis here did at certain times.

In this case the end result of the approach adopted seems clearly to have been unfair.

Proper attention was not paid to Mr Amzalak's case

Mr Thaler submitted that the arbitrators had understood what Mr Amzalak was claiming at the arbitration about an antecedent agreement between Mr Thaler and Mr Tan, but that there was no evidence of such an agreement put before them. What was relied on at the arbitration could not establish such an agreement, nor could what Mr Amzalak provided to the arbitrators afterwards. In the result, it could not be concluded that the arbitrators did not consider Mr Amzalak's case. What he relied on could be given no weight by the arbitrators.

These submissions cannot be accepted. I have already dealt with the inadequacy of the reasons which were given for the award. They support the conclusion that Mr Amzalak's case was not given necessary attention. That is confirmed by the approach adopted to two witnesses from whom Mr Amzalak wished to call evidence.

Having had only two days' notice of the hearing and not knowing what case Mr Koncepolski would advance, Mr Amzalak had with him at the Beth Din Ms Lambkin, an employee of Hudson Corporate, from whom he wanted to call evidence about the shares in issue. He also had Mr Tan available by telephone.

On Rabbi Telsner's evidence, he did not consider that Ms Lambkin could give relevant evidence, because Mr Amzalak had already conceded, when he asked him before the hearing commenced, that she had not herself been involved in the disputed transaction. That he ought, nevertheless, to have been permitted to call that evidence, given the defence he was mounting, is apparent. Ms Lambkin waited all day, without being called, a matter on which Mr Amzalak commented from time to time. What her evidence would have been need not be established in these proceedings. The transcript and Rabbi Telsner's evidence in cross-examination supports Mr Amzalak's complaint that he was not given a proper opportunity to lead the evidence he wished to call from her.

Rabbi Telsner finally accepted in cross-examination, contrary to the submissions advanced for Mr Thaler, that Mr Amzalak did have Mr Tan on the phone and wanted the Dayonim to hear from him during the Beth Din hearing. He plainly did have relevant information to give the Beth Din. What his evidence would have been, again need not be considered. There was no apparent reason for not receiving information from him over the phone. Other information was obtained by the Borers by way of phone enquiries made during the course of the Beth Din from Computershare, although the relevant question, whether Mr Koncepolski could ever have registered the transfer of the disputed shares, without the original share transfer form, was not asked.

The Rabbis plainly considered that Mr Tan also did not have anything relevant to tell them and that was why Mr Amzalak was not able to call on him, during the hearing. Understanding that Mr Thaler had paid money for the shares in question, in return for which he had received the executed share sale transfer form from Mr Amzalak which Mr Kaminetsky produced to them, they took the view that the relevant consideration was that when Mr Koncepolski went to register the transfer, Anything Communications no longer held all the shares. Mr Tan's role in the dealings between Mr Amzalak and Mr Koncepolski, in which they both claimed to have acted as the representatives of others, was not something which they felt necessary to consider or resolve.

The approach which the Rabbis adopted to the case which Mr Amzalak was trying advance by way of defence of Mr Thaler's claim, was clearly not consistent with a fair hearing of his case.

The conclusion of the Beth Din proceedings

There was an issue between the parties as to the basis upon which the Beth Din hearing concluded and Mr Amzalak's right to put further material before the Beth Din, before it made its decision.

Mr Amzalak had not been provided with any advice prior to the hearing as to the documents Mr Koncepolski would be relying on. His evidence was that he had not been able to fully prepare for the hearing and that he did not recall all the details of the transactions in which he had been involved. He could not then recall what the payment of $20,000 had been made for. He had with him at the hearing certain emails and other documents, but there were other relevant documents which he did not have with him.

At 6pm, Mr Amzalak was given until 8pm to produce any further documentation that he wished to rely on. He protested that the time was not sufficient. In dispute between the parties was whether it was then agreed that only an interim award would be issued and that he would be given the opportunity to respond further by way of evidence or information. Again, there were problems with the transcript.

On 26 August he wrote to the Rabbis providing further information, drawing attention to the arbitration agreement having failed to identify the matter in dispute, asking whether a new agreement needed to be signed and advising that further information would be sought and provided about the share transaction. There is no evidence of any response from Mr Koncepolski.

On 30 August 2010, Hudson Corporate Limited wrote to Mr Koncepolski about the disputed shares, advising that the matter was one between the Hudson Investment Group Limited and Mr Koncepolski and that it could not be resolved by a rabbinical court in proceedings with Mr Amzalak. Information as to the claim was sought of Mr Koncepolski. It provided a copy of its letter to the Rabbis. On 5 September, Mr Amzalak wrote to Rabbi Ulman, advising that the Hudson Group was awaiting a response.

On 15 September, the Beth Din gave its decision. Mr Amzalak again sought advice from Rabbi Gutnick and on 3 October wrote to the three Rabbis. He sought the opportunity to present new evidence and to have the decision reviewed, as he said Jewish law provided for. He said that he had obtained legal advice in relation to various aspects of the claim advanced by Mr Koncepolski, which he outlined. He also said that he recollected that the arbitration agreement did not identify the dispute and that he had not been provided with a copy of the agreement. Mr Amzalak sought a response to his request within seven days and in the interim, that the decision be reversed, until further evidence was presented and considered.

Mr Amzalak received no response and on 13 November again approached the Rabbis. He again received no response.

Mr Amzalak's case was that unbeknownst to him, the real attitude of the Rabbis to the opportunity which he had sought at the Beth Din, to put further information before them was revealed by a translation from a discussion conducted by the Rabbis in Yiddish, in front of the parties.

What Mr Amzalak's recording captured, once a translation was agreed, was a discussion about Mr Thaler's claim about the payments which had been made. The translation reveals that the Rabbis already considered that there was no question about Mr Thaler's claim, Mr Amzalak having established no defence, but that:

"RU: "I am already persuaded; I am already persuaded" but "so that we do not give the appearance of impropriety" let us give him some time to answer.

RT: Until tonight.

RK: We are here until 8. He can get to his office in 15 minutes and there is 3 hours remaining. Let him bring what he has."

The Beth Din's failure to deal at all with Mr Amzalak's defence in the reasons later given for the award made, accords with the view seemingly reached already at the hearing, that he had no defence to Mr Thaler's claim. In the reasons later given, no reference at all is made either to his defence, the further material which he advanced to support his case, or to the various requests which he made of the Beth Din after the hearing.

In the face of this evidence, Mr Thaler's submission that Mr Amzalak had three weeks in which to advance any further evidence on which he wished to rely to the Rabbis, including any evidence he wished to call from Mr Tan or Ms Lambkin, plainly cannot be accepted.

A decision was reached at the hearing that Mr Amzalak had not made out his case. That view was acted on, with the result reasons given which failed to satisfy the requirements of s 29(1)( c) of the 1984 Act.

Orders under s 43 of the 1984 Act cannot be made in this case

I should finally observe that even if Mr Thaler had made out his case, the orders which he sought under s 43 of the 1984 Act, remitting the matter to the Beth Din, could not have been made. The views which Rabbi Telsner and Rabbi Kaminetsky explained they held of Mr Amzalak, even before the Beth Din hearing commenced, their resulting approach at the arbitration and their actions afterwards, make such orders impossible.

In Leveraged Equities Pty Ltd v Huxley [2010] NSWCA 179, Allsop ACJ observed at [10] that s 36 of the 1984 Act contemplates that an arbitration may fail, including when an arbitral award is set aside by this Court, on application by one of the parties (see s 36(2)(b)). Mr Amzalak did not accept the Beth Din's award and did not make payment under it. Thus, at law, a second step was necessary to be taken by Mr Thaler under s 33 of the 1984 Act, to enforce the award as a judgment of the Court. He took that step, as he was entitled to do.

As Allsop ACJ also observed at [10], an arbitration may fail for any number of reasons, with the result that the Court will not make such an order. The possibility that the failure may be the result of misconduct in the arbitration, is also expressly contemplated by the 1984 Act. It envisages that in such a case the Court may, on application, set aside the arbitral award, exercising the powers given it by s 42. It was not in issue that Mr Amzalak had the right to make an application for the exercise of that power.

It is in that light that the evidence which Rabbi Telsner and Rabbi Kaminetsky gave in cross-examination, had to be considered. It was the Rabbis who produced the arbitration agreement which was signed by Mr Amzalak and Mr Koncepolski. They accepted the role which it contemplated. Rabbi Telsner and Rabbi Kaminetsky gave evidence as to their understanding of the parties' obligations under the agreement they had produced, as well as under Jewish and Australian law and the steps they had taken, given that understanding. They were issued certificates under s 128 of the Evidence Act, as to their evidence about these matters.

On their evidence, both Rabbi Telsner and Rabbi Kaminetsky considered that Mr Amzalak had not only acted improperly and disrespectfully in pursuing his cross-summons before this Court, they considered that he was in breach of his obligations under the agreement, as well as under Jewish and Australian law. The basis for that understanding is not clear. Plainly, Rabbi Ulman took a different view.

Contrary to that belief and consistently with the terms of their agreement and the 1984 Act, in these proceedings it was the common position of the parties that Mr Amzalak was legally entitled both to resist Mr Thaler's application and to pursue the claim which he advances by his cross-summons, to have the Beth Din's award set aside.

The evidence of the Rabbis' approach to the arbitration and later, to the enforcement of the Beth Din's award, seems most unfortunate. Whether their conduct finally involved Rabbi Telsner and Rabbi Kaminetsky in any contempt does not arise to be determined in these proceedings. Their evidence is, however, relevant to Mr Thaler's application to have the matter remitted to the Beth Din under s 43, for further consideration. In the circumstances, on any view, that is an order which justice could not permit be made.

Conclusion

For the reasons given, there must be judgment for Mr Amzalak and an order for costs made in his favour. He seeks a costs order against both Mr Thaler and Mr Koncepolski, for reasons already advanced. Mr Koncepolski must be heard on that application.

I will give directions for the hearing of that application.

In the meantime, it is appropriate that I order:

1. Mr Thaler's summons is dismissed

2. The Beth Din's award is set aside.

**********

Amendments

31 May 2013 - slip rule - deleted word 'not'

Amended paragraphs: [253]

Decision last updated: 21 August 2013

Medium Neutral Citation:	Thaler v Amzalak (No 2) [2013] NSWSC 632
Hearing dates:	26 February 2013, 27 February 2013, 28 February 2013, 1 March 2013, 8 April 2013, 9 April 2013, 10 April 2013, 6 May 2013, 7 May 2013, 8 May 2013
Decision date:	27 May 2013
Jurisdiction:	Common Law
Before:	Schmidt J
Decision:	1. Mr Thaler's summons is dismissed 2. The Beth Din's award is set aside.
Catchwords:	ARBITRATION - award - enforcement of an arbitral award - arbitral award made by Beth Din in Zablo - summons seeking leave to enforce award - cross-summons seeking to set aside the award - failure to give reasons - credibility and reliability of witnesses - Beth Din of Zablo - whether Beth Din decision complied with the requirements of s 29(1)(c) - allegation of fraud - allegation of misconduct - whether plaintiff established that he was a party to Beth Din proceedings - problems with record keeping at Beth Din proceedings - notice and opportunity to be heard - Beth Din not conducted in accordance with written arbitration agreement - requirement of impartiality not met - bias established - use of Yiddish - proper attention not paid to defendant's case - orders sought under s 43 of Commercial Arbitration Act 1984 cannot be made - orders - costs EVIDENCE - leave sought by Mr Thaler to give evidence in reply - leave refused - ruling under s 136 of the Evidence Act in relation to Mr Koncepolski's evidence sought - ruling refused PROCEDURE - notice of motion - order seeking to set aside subpoena - motion dismissed PROCEDURE - pleadings - leave to amend further amended cross-summons - leave granted
Legislation Cited:	Civil Procedure Act 2005 Commercial Arbitration Act 1984 (repealed) Commercial Arbitration Act 2010 Evidence Act 1995 Uniform Civil Procedure Rules 2005
Cases Cited:	Australian Securities and Investments Commission v Hellicar [2012] HCA 17; (2012) 86 ALJR 522; 286 ALR 501 D & M (Australia) Pty Ltd v Crouch Developments Pty Ltd [2010] WASC 130 Doran Constructions Pty Ltd v Health Administration Corporation of New South Wales (unreported 10 October 1994 New South Wales Court of Appeal) Gas & Fuel Corporation of Victoria v Wood Hall Ltd [1978] VR 385 Gordian Runoff Ltd v Westport Insurance Corporation [2010] NSWCA 57; (2010) 267 ALR 74 Leveraged Equities Pty Ltd v Huxley [2010] NSWCA 179 Mond v Berger [2004] VSC 45; (2004) VR 534 Morley v Australian Securities & Investments Commission [2010] NSWCA 331; (2010) 247 FLR 140 Oil Basins Ltd v BHP Billiton Ltd [2007] VSCA 255; (2007) 18 VR 346 Vakauta v Kelly [1989] HCA 44; (1989) 167 CLR 568 Watson v Foxman (1995) 49 NSWLR 315 Westport Insurance Corporation v Gordian Runoff Ltd [2011] HCA 37; (2011) 244 CLR 239
Category:	Principal judgment
Parties:	Shlomo Thaler (Plaintiff) Benjamin Amzalak (also known as Binyomin Zeev Amzalak) (Defendant)
Representation:	Counsel: Mr M S White with Mr P Afshar (Plaintiff) Mr G Segal with Mr M A Friedgut (Defendant) Solicitors: Peter M Wayne & Associates (Plaintiff) Brown Wright Stein Lawyers (Defendant)
File Number(s):	2010/361581
Publication restriction:	None