[2011] HCA 2
Carlewie Pty Ltd v Roads and Maritime Services [2017] NSWLEC 78
Ebner v The Official Trustee in Bankruptcy (2000) 205 CLR 337
[2000] HCA 63
Isbester v Knox City Council (2015) 255 CLR 135
Johnson v Johnson (2000) 201 CLR 488
Source
Original judgment source is linked above.
Catchwords
[2011] HCA 2
Carlewie Pty Ltd v Roads and Maritime Services [2017] NSWLEC 78
Ebner v The Official Trustee in Bankruptcy (2000) 205 CLR 337[2000] HCA 63
Isbester v Knox City Council (2015) 255 CLR 135
Johnson v Johnson (2000) 201 CLR 488
Judgment (9 paragraphs)
[1]
Solicitors:
DibbsBarker (Applicants)
Henry Davis York (Respondent)
File Number(s): 2016/00155678 2016/00155930
[2]
Introduction
These two Class 3 Compensation Matters are listed for hearing over 35 days, commencing Monday 20 November 2017, with the Pre-Trial Mention presently fixed for 9.30am Monday 13 November 2017, both events before Acting Commissioner Maston and myself.
Not all evidence is on as yet, and no Points of Claim have been filed, but, on or about 9 October 2017, the parties became aware of the Court's allocation of Maston AC and myself to do the hearing.
On 16 October 2017, the parties appeared before me for a revision of the timetable for the filing of evidence.
On 27 October 2017, the Applicants ("Alexandria" and "Boiling") filed a Notice of Motion ("NOM"), supported by an affidavit from their solicitor (Penelope Murray), seeking (1) that I recuse myself from the hearing, and (2) that I order that Maston AC not sit with whomever the Chief Judge allocates to hear the case in my stead.
The ground upon which those two orders are sought is "apprehended bias on account of prejudgment", based on this Court's decision (authored by me, with the assistance of Maston AC), on 30 June 2017, in Carlewie Pty Ltd v Roads and Maritime Services ("Carlewie") [2017] NSWLEC 78.
The Respondent opposes the recusal motion.
The NOM came on for hearing last Friday 3 November 2017, and I indicated that I would give my decision on Tuesday 7 November 2017, so as not to disturb, so far as possible, the schedule for mention and hearing, whatever the outcome of the recusal motion
[3]
Carlewie and the present case
In Carlewie, the Applicant sought, in July 2015, an amount in excess of $50 million (5), the Valuer General determined compensation, on 22 October 2015, in a total amount of $28,695,990 (5), and the Applicant finally claimed a total amount in excess of $37 million ([8]).
RMS contended for a market value of $21,914,002 and disturbance of $140,643.96 ([9]), and the Court determined compensation ([239]) in the total amount of $23,277,688.96.
An appeal is pending in the Court of Appeal against the whole this Court's decision in Carlewie.
The Notice of Appeal (Murray annexure "B") states the appeal grounds as the denial of procedural fairness and/or inadequacy of reasons (in 10 respects), and 9 items alleging "decision ... on an erroneous question of law".
Murray deposes (par 18):
a. The Appellant was denied procedural fairness because substantive integers of the Appellant's claim and case were not dealt with and determined by the Court; and
b. The reasons of the Court below make substantial and repeated reference to the Respondent's submissions without corresponding reference to the Appellant's submissions.
Carlewie primarily seeks remitter of the matter by the Court of Appeal (if remitter be ordered) to a Judge and Commissioner other than myself and Maston AC.
In the present case, the Respondent acquired, on 19 December 2014, two lots, one of which was owned by Alexandria, and the other tenanted by Boiling. The land acquired from Carlewie (known as 33 Burrows Road, Alexandria) adjoins the lands acquired from Alexandria and Boiling (Murray paragraphs 11 and 23).
Alexandria, Boiling, and Carlewie are apparently all members of a group of companies in which one Ian Malouf and/or his wife, Larissa, are common shareholders and/or common directors (Murray, paragraphs 4 to 9).
Several, but not all of the witnesses who gave evidence in the Carlewie proceedings are expected to be involved in the hearing of the current matters (Murray paragraph 21), and the present applicants expect that the Court will "have to make" findings on some issues allegedly similar to issues litigated in Carlewie.
[4]
Waiver/Acquiescence
Apart from its arguments on the merits of the motion, the Respondent argues that the Applicants "have waived any right to object to Sheahan J and Maston AC continuing to hear and dispose of a case on the basis of ostensible bias" (RMS subs, par 37), on the basis of the Applicants' delay in bringing its recusal NOM, which was filed 3 weeks after learning of the allocation of myself and Maston AC, and 3 weeks before the commencement of the hearing.
The Respondent submits in this respect (par 39):
1. Carlewie was determined on 30 June 2017;
2. The parties were before the Court on 4 August 2017 and 25 August 2017 and the applicants did not raise any objection to Sheahan J and Maston AC (or any other judge or commissioner) as judge and commissioner potentially to be allocated this matter;
3. On 9 October 2017, the parties received email correspondence informing them about arrangements for the pre-trial directions which clearly indicated that Sheahan J and Maston AC had been allocated;
4. Many steps were taken in advancing the matter to trial from 9 October 2017 onwards (see bundle of documents the respondent proposes to file) including 10, 11, 12, 13, 17, 18, 23, 25, 26 and 30 October 2017 as disclosed by correspondence of those dates;
5. The respondent has prepared and served substantial evidence in the case in the meantime, including the Valuation Report of Mr Lunney and Dr Ferrier dated 27 October 2017;
6. The parties appeared before Sheahan J on 16 October 2017 and no issue was raised;
7. This application was made more than a week later on 27 October 2017.
The Respondent relies (subs pars 24 and 42) on the following remarks of Kirby J in Lindon v Commonwealth of Australia (No 2) ("Lindon") (1996) 136 ALR 251, at 260:
Waiver will most readily be inferred where a party affected has knowingly failed to make known any objection it has to the continuing participation of the judicial officer. The foundation of such waiver is that failure to make a timely objection may deprive the judicial officer concerned of the opportunity to correct a wrong impression of bias, to refrain from hearing the case and to save the time, costs and efforts both of the court and of the other party (39). The principle of waiver has been justified by reference to the fact that, were it not so, a person, by silence, might seek to gain an advantage, waiting until the litigious waters had first been tested before deciding to raise the suggested ground of disqualification.
Counsel for the Respondent argue (para 25) that the full High Court has endorsed those remarks on at least two occasions since Lindon (for example, in Michael Wilson & Partners Ltd v Nicholls ("Michael Wilson") (2011) 244 CLR 427, at 449 per the plurality).
In Lindon, Kirby J, sitting alone, adjudicated on an application to strike out proceedings concerning "the threat or use of nuclear weapons". No recusal application appears to have been made, but his Honour had had prior limited extra-curial dealings with Mr Lindon, and canvassed whether he should deal with the matter. As an "alternative route to the same conclusion", his Honour discussed (at pp 260 - 261) the existence of a "principle of waiver in the context of judicial disqualification".
That was the context in which his Honour's remarks, quoted above ([19]), were made.
Mr Williams SC, appearing for the Applicants on the recusal motion, sought to distinguish Lindon.
I respectfully adopt Kirby J's reasoning.
I am not persuaded that the Applicants should be precluded from bringing their recusal motion because they waited until they became aware of the Chief Judge's allocation of the case to Maston AC and myself, and then another 19 days before the NOM was filed.
I have before me a detailed chronology prepared by the Applicants (Exhibit A1), and the Respondent's collection of relevant correspondence between the parties (Exhibit R1), and I am satisfied that the Applicants and their advisors gave appropriately cautious - but relatively expeditious and timely - consideration to the bringing of the recusal motion, including engaging senior counsel not involved in the substantive proceedings.
I reject the waiver submission, and must, therefore, turn now to consider the recusal application on its merits.
[5]
The Principles
The parties are agreed on the principles which the Court must apply when an apprehension of bias is alleged.
As stated by the High Court in Ebner v The Official Trustee in Bankruptcy ("Ebner") (2000) 205 CLR 337; [2000] HCA 63 (at [6] - emphasis added):
... a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide
Not surprisingly, this principle has come to be known as the "double might" test. (See also Johnson v Johnson (2000) 201 CLR 488; [2000] HCA 48, at [11].)
The High Court went on, in Ebner (at [8]), to describe the two steps involved. As summarized by the Respondent (subs par 18):
a. First, it requires the identification of what it is said might lead a judge to decide a case other than on its legal and factual merits;
b. The second step is that there must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits. The bare assertion that a judge (or juror) has an "interest" in litigation, or an interest in a party to it, will be of no assistance until the nature of the interest, and the asserted connection with the possibility of departure from impartial decision making, is articulated. Only then can the reasonableness of the asserted apprehension of bias be assessed.
When the Ebner test was reiterated by the High Court in Michael Wilson (see [31] and [63]), the Court emphasised (at [33]) that:
... because the test is objective, it is important to keep an inquiry about an apprehension of bias distinct from any inquiry about actual bias.
(See also discussion in Isbester v Knox City Council (2015) 255 CLR 135.)
As the Respondent noted (subs par 21 - emphasis added):
... The hypothetical fair-minded observer assessing possible bias is to be taken to be aware of the nature of the decision and the context in which it was made as well as to have knowledge of the circumstances leading to the decision.
In British American Tobacco Australia Services Limited v Laurie (2011) 242 CLR 283; [2011] HCA 2, French CJ said (at [33]):
In judging whether the appearance of impartiality has been lost difficulties of principle and application can arise. Courts must make their judgments upon criteria referable to a legally constructed, fair-minded lay observer. That means, in effect, that their judgments are made on a subset of the available information. That is because the reasonable apprehension of bias goes to confidence in the courts on the part of litigants and the public, who will not have access to details of the substantive law and all relevant aspects of the practice and procedure of the courts. In determining whether an apprehension of bias has a reasonable basis, the courts are asked to see themselves as others, not judges or lawyers, would see them. As Laws LJ put it in Sengupta v Holmes [[2002] EWCA Civ 1104, at [11]]:
"it is not enough to show that those in the know would not apprehend any bias."
A standard for apparent bias dependent upon how the matter appeared to judges and lawyers would be difficult to distinguish, in practical effect, from a standard of actual bias.
[6]
Consideration
As Mr Williams submitted, there is no "necessity" for this case to be heard by Maston AC and myself, and nothing to warrant its being considered "an extraordinary case", or one involving "special circumstances": see Australian National Industries Ltd v Spedley Securities Ltd (in liq) (1992) 26 NSWLR 411, at 442 - 443.
With respect, that is not the point.
The hearing of the present case has been allocated - by the Chief Judge in accordance with his statutory duties - to the judge and commissioner who happen to have earlier heard the case involving a nearby site, and that allocation has been attacked by the Applicants.
The listing must stand unless the apprehended bias test, explained above, is satisfied.
The hypothetical observer in the present case would be aware that Carlewie was not entirely successful in the earlier case, and that the context of the Court's decision was adversarial litigation - in Class 3 of this Court's jurisdiction, in which the rules of evidence do not strictly apply - between competing parties, which each engaged reputable experts, who conferred, and then gave oral evidence, and were cross-examined, over eight days of hearing.
The Court then deliberated for some eight weeks before delivering its judgment.
The Applicant submits, in terms of the Ebner test (subs par 7 - some emphasis mine, and see also Murray par 22):
7. Factors that are relevant to the conclusion that the test is appropriately satisfied include:
(i) The "final" nature of the decision in Carlewie in that the decision represents a considered and conclusive view of the issues determined in that case. This logically means that similar issues arising in the present case might cause an observer to possibly apprehend those same issues to have been prejudged by the Court. There are distinctly similar issues which would need to be revisited in the present proceedings for directly adjoining industrial land including:
a. The viability of development of surplus land (given that the subject land adjoins that considered in Carlewie and is subject to similar uses and in at least one respect by related parties);
b. The method and determination of a rate for developable surplus land;
c. Market rent for hardstand areas;
d. The analysis of the sale at 202-212 Euston Road;
e. The method and analysis of adjusting sales to accommodate "costs" arising on the subject site.
(ii) The language used by the Court in the Carlewie decision, including strongly expressed or definite conclusions on disputed issues such as:
a. [83] - that the (then) Applicant's reliance on legal principles explained in Caruso was "clearly wrong";
b. [110]-[111] - the rejection of evidence of Christopher Biggs and expression of preference for the evidence of David Lunney;
c. [119] - rejection of the evidence of Mr Mitchell as to development potential for redevelopment of surplus land;
d. [138] - concerning a contested issue as to how to resolve conflicting quantity surveyor evidence;
e. [157] - noting that the issue of contamination was "highly contested" - and at [163] finding that Mr Clay's evidence was "adamant" - leading to the conclusion to accept Mr Clay (at [166]) over direct witness testimony;
f. [190] expressing a preference for the evidence of Mr Lunney;
g. [198] - concerning sales of land involving the (then) Applicant by which (implied) adverse findings were made concerning the Applicant and Mr Malouf;
h. [226]-[232] adopting submissions of the Respondent critical of Mr Biggs;
and, broadly,
i. at [131]-[132]; [135]-[136]; [137]-[138]; [161]-[168]; [173]-[176] in which the Court set out the Respondent's submissions and expressed agreement without explanation.
Those paragraphs of the judgment are simply identified in the submissions. Their context and their present relevance are not established - as the Respondent rightly points out (par 28), "the applicant has not sought to identify those issues by reference to any part of the evidence/reports in these [present] proceedings ...", but "simply guesses or infers that the matters it has identified will be in contest [in the present matter] and that the evidence is going to be the same from the same witnesses ..."
The Respondent goes on (pars 30 - 31) to submit that "a bare assertion" is insufficient to satisfy the second limb of the Ebner test (31 above) - i.e. articulating "the logical connection between the matter and the feared deviation from the course of deciding the case on its merits".
Mr Lancaster SC (for the Respondent) noted that most if not all of the Carlewie issues in par 7 of the Applicant's submissions are "property-specific", or "proceeding-specific" (see T03.11.17, pp10 - 14).
Even if similar issues are in contest in the present case, the evidence relied upon may be the same as, or it may be different from, that in Carlewie.
As the Respondent noted (par 47), "a judge must apply an open mind, not an empty one".
Another important aspect of context is that this is a small specialist court, in which the Class 3 list will often include several cases "overlapping" as to the public purpose involved, the neighbourhood sales considered to be comparable to the subject lands, and the expert witnesses involved.
Accepting, for example, Mr Lunney's evidence on some aspects of Carlewie can be compared with the attitude taken by the Court in respect of his evidence in other cases. (The Respondent cited (par 46) my decision in Marroun v Roads and Maritime Services [2012] NSWLEC 199, at [218], as an example.)
In the present matter, Mr Lunney will be pitted against a different valuer from the one Carlewie engaged, and the outcome will depend on the strength of their respective evidence, assessed by experienced decision-makers keeping "open minds". (See also Vakauta v Kelly (1989) 167 CLR 568.)
The hypothetical observer is presumed to be fair-minded, and to be aware of such elements of relevant context. While I accept that he or she is not considered to have detailed knowledge of the law, or the judicial personnel involved, he or she may well see some utility in engaging decision-makers familiar with locations and issues, the Court benefits from using the expertise of commissioners and acting commissioners, such as Maston AC.
On the Applicants' case for recusal, the observer would consider the various cited comments in Carlewie, but in their appropriate context - the Acting Commissioner and I assessed the competing legal arguments put by eminent counsel on each side, the gaps in the evidence, and the variation in the itemised costings prepared by the experts, and came to our joint conclusions. For example, we preferred the expert evidence and opinion of Mr Clay to the evidence of the lay witness Foxe. (I reject the suggestion that our use of the word "adamant" to describe some of Clay's evidence in that case, was the expression of "a committed view regarding [his] credit", which we might carry forward to the present case.)
In so far as the Applicants say that the Court made adverse findings in respect of the witness Biggs, who may be involved also in the present proceedings, I would expect the observer to accept, as the Court did, that his evidence in Carlewie, while truthful, simply did not "fill out" the factual picture the then Applicant was painting for the Court (see T03.11.17, p18, LL1 - 27).
[7]
Conclusion
The Applicants have not satisfied the "double might" test and their NOM should be dismissed.
[8]
Orders
The order of the Court is that:
1. The Applicants' Notice of Motion filed on 27 October 2017 is dismissed.
2. The Exhibits are returned.
[9]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 07 November 2017