"Correcting" statements
45 There is some case law on the question whether, if the judge's conduct has created a reasonable apprehension of bias sufficient to disqualify the judge from continuing to hear the case, he or she can reverse the disqualification, for example by clarification or apology. In GIO v Glasscock, at 17, Handley JA said that once the stage had been reached where the judge had become disqualified, a subsequent apology could not reverse that disqualification:
"The moving hand has written and moved on and in such circumstances a reasonable lay observer would, in my opinion, still retain 'a substantial distrust of the result': see Vakauta v Kelly (1989) 167 CLR 568, at 575."
46 Glasscock was a case where the judge had very actively intervened during the examination in chief of a witness, asking leading questions repeatedly, and there were exchanges between the judge and counsel which suggested that the judge felt some resentment to counsel's objection and had overreacted to it.
47 In Johnson, Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ noted (at 494) that they had heard argument, prompted by the trial judge's explanation of what he intended to communicate, about whether the effect of a statement that might indicate prejudgment can be removed by later statement which withdraws or qualifies it. They continued:
"Clearly, in some cases it can. So much has been expressly acknowledged in the cases [citing Re JRL and Vakauta v Kelly ]. No doubt some statements, or some behaviour, may produce an irrevocable apprehension of prejudgment. On other occasions, however, a preliminary impression created by what is said or done may be altered by a later statement. It depends upon the circumstances of the particular case. The hypothetical observer is no more entitled to make snap judgments than the person under observation."
48 Later (at 495) their Honours took into account the trial judge's subsequent explanation, in concluding that on the facts of that case, the judge was not intending to express a concluded view on the credibility of the parties when he said that he would rely principally on witnesses other than the parties and upon documents. They observed (at 494):
"When, on the following day, the judge gave an explanation of what he had intended to convey by his earlier remarks, there was no reasonable ground for not accepting that explanation."
49 It seems to me that the approaches taken to "correcting" statements by Handley JA in Glasscock and by their Honours in Johnson are consistent. Since the issue is concerned with the fair-minded lay observer's impression of the conduct complained of in its context, a later clarification may serve to remove the grounds for apprehension, for that context includes "any published statement, whether prior, contemporaneous or subsequent" (Webb v The Queen, at 74 per Deane J). But where the judge's conduct is outspoken or aggressive or indicative of resentment, the reasonable apprehension of bias that it has created is unlikely to be overcome by later conduct.
50 In Kwan v Kang, the trial judge published a revised judgment with respect to the applicability of s 125, after the application for disqualification had been made, in which he endeavoured to make it clear that his findings concerning fraud and abuse of power were only findings of "reasonable grounds" made at the prima facie level. The Court of Appeal affirmed (at [66]) the entitlement of a judge to review and change the judgment he or she had given. However, as they noted (at [68]), the trial judge did not say in the revised judgment that he had said something in the earlier judgment by mistake, or had omitted to say something that he meant to say. He had not corrected two passages in the earlier judgment in which he had expressed his findings "in emphatic language of absolute finality" (at [97]). That being so, the revised parts of the judgment did not cure the impression of absolute findings given by those passages (at [99]).
51 The Court of Appeal observed that if the trial judge, in his revised judgment, had said that in making what appeared to be absolute and unconditional findings he had made a mistake, and that he had not intended to make findings on that basis, a different conclusion may have been open (at [88] and [102]).
52 These principles suggest that where, as in the present case, the application for disqualification is partly based on a reading of passage in a judgment that does not reflect the intended meaning of that passage, it is appropriate for the judge, in responding to the application, to explain clearly the meaning he or she intended to convey by that passage. Likewise, where the application is, as in the present case, partly based on the assertion that the judge has inappropriately resolved a contested factual issue and a challenge to the credit of a witness without having heard all the evidence, it is appropriate for the judge, in responding to the application, to address the question whether he or she understood that the matter was controversial, and whether the case was presented in such a manner that a different inference could reasonably be drawn.
53 It must be remembered, of course, that the question is not about to judge's actual intention or understanding, but the fair-minded lay observer's possible perception.
The defendants' objections
54 The defendants contended that a reasonable apprehension of bias arose out of the 22 October judgment, read in the context of the 13 October judgment and the course of events generally in the proceeding in relation to the search warrant issues. Properly analysed, their submissions raise four contentions:
(1) that the 13 October and 22 October judgments, and especially the latter, are premature adjudications of the likely probative value of evidence not yet led, as to issues not yet fully argued;
(2) that in the 22 October judgment the court prematurely accepted some evidence of Ms Redfern, when that evidence and her credit were under challenge and her cross-examination had not been concluded;
(3) that in various passages of the 22 October judgment the court adopted views inconsistent with the defendants' contentions on the search warrant issues, before the evidence had been concluded and argument had been heard;
(4) that the impression of prejudgment created by the above three matters is strengthened by putting them into the context of the history of the defendants' application in relation to the search warrant issues.
First objection - premature resolution of evidence
55 The defendants pointed out, correctly, that (in contrast with Johnson) this is not a case in which the court has merely expressed preliminary views in argument. Here, the court has made rulings on interlocutory questions which involved it in making assessments of the potential materiality of various matters, so as to it foreclose the possibility of those matters being further explored in evidence.
56 The defendants submitted that by making its judgments of 13 and 22 October, the court has foreclosed any realistic possibility of altering its views. They said that the court's determination of the admissibility of the search warrant material will involve a balancing exercise which ought fairly to be undertaken when all of the evidence is before the court, and the court should not have abridged that process by weighing the balance too early, for to do so has created a reasonable apprehension of bias.
57 In fact, the judgments of 13 and 22 October have the same status as any other rulings on evidence or other interlocutory rulings made during the course of a final hearings: see, generally, Ritchie's Supreme Court Procedure NSW (looseleaf), at [40.9.2]. They are determinations that stand unless and until they are revisited. The reasoning for those two decisions is set out more fully than is normally the case for evidentiary rulings. In part, that is a consequence of the fact that the points were fully argued, and in part, it reflects my desire to avoid undue waste of time by identifying the line of questioning and the limit to the process of production of documents to which my reasoning led.
58 It appears to me that there is a logical or semantic difficulty with the defendants' submissions on this point. They asserted that the matters that were the subject of the two rulings would be relevant to the exercise of the court's discretions under ss 135 and 138 the Evidence Act and under the Ridgeway principle (Ridgeway v R (1995) 184 CLR 19). They said that the exercise of those discretions requires the court to weigh in the balance evidence that will show that ASIC deliberately or recklessly acted unlawfully or improperly. They then submitted that the court should not have adjudicated, at an early stage, on the likely probative value of evidence not yet led, to issues not yet fully argued. The defendants' conclusion was put starkly in oral submissions (Transcript 1747.41-45):
"Then your Honour went further when asked to deal with the matter on a discretionary basis and determined at that time the balancing exercise without the evidence being in and without submissions being finally made on that evidence once it was in."
59 The problem it is that the very articulation of the argument assumes that when it comes to exercise its discretions, the court will have before it evidence relating to ASIC's conduct and state of mind. That implies a distinction between evidence that is admissible, on what is effectively a voir dire for the purpose of the ultimate decision of admissibility of the search warrant material, and evidence that is inadmissible for that purpose. The distinction implies, in turn, a process for the determination of the evidence that will be admissible for the purpose of the exercise of the discretions. That determination must necessarily take place before the question of admissibility of the search warrant material has been fully argued, and by a process that will prevent the inadmissible evidence from being adduced.
60 It seems to me that the defendants' argument is an argument against the court ever exercising its discretion to exclude evidence during the course of a voir dire, where the purpose of the presentation of evidence is to provide the factual basis for the court to exercise its discretion as to the admissibility of evidence at the hearing. That would deny any relevant utility to s 135 of the Evidence Act, notwithstanding that the evident purpose of that section is to permit the court to exclude evidence on grounds which include avoidance of undue waste of time. It would prevent the court from taking steps, when asked to do so, to keep the hearing within reasonable bounds.
61 Once it is accepted that s 135 is available to the court for the purpose of excluding evidence during the course of a voir dire designed to provide the factual grounds for the ultimate decision on admissibility, the defendants' submission on this point is reduced to an assertion that the court should not have intervened to exclude evidence of the state of mind of ASIC after December 2001, because such evidence is relevant and (in their view) an important part of their case that ASIC has acted deliberately or recklessly. Seen in this way, the submission is nothing more than an attempt to agitate again points on which their argument has been rejected on two occasions.
62 The court's use of s 135 to limit the defendants' line of questioning of Ms Redfern in cross-examination, and the extension of the same reasoning to relieve ASIC from compliance with the 20th notice to produce, are interlocutory decisions rather than expressions of prejudgment on the ultimate issue of admissibility of the search warrant materials. The issue of admissibility of the search warrant materials remains at large, but it will not be considered by recourse to evidence as to ASIC's state of mind after December 2001. It is tolerably clear from the case law that distinguishes interlocutory judgment from prejudgment of the ultimate issue, that a fair-minded lay observer could not possibly form a reasonable apprehension of bias as to the ultimate issue, by virtue of the judge having made these interlocutory determinations.
Second objection - treatment of Ms Redfern's evidence
63 The defendants drew attention to some passages in my 22 October judgment (at paragraphs 9, 23, 24, 25 and 26), in which I referred to Ms Redfern's evidence, in paragraph 15 of her affidavit made on 1 October 2004, where she said that after she received the Brereton/Stack advice dated 7 December 2001:
"In light of counsel's advice, I took the view that this consent ensured that ASIC was entitled to use the documents in the civil proceedings then under contemplation."
64 The defendants pointed out that the cross-examination of Ms Redfern has not been completed. They said that the credibility of her evidence is under challenge. In those circumstances, they submitted, the court's observations in the passages of its 22 October judgment that I have listed amounted to the premature acceptance of a component of Ms Redfern's evidence, and disclosed a preconceived opinion as to the credit of a material witness. Therefore, they said, a fair-minded lay observer might reasonably apprehend from those passages that the court had made a firm decision that would prevent the judge from subsequently bring an impartial and unprejudiced mind to the resolution of the ultimate question about admissibility of the search warrant material.
65 I reject these submissions on three grounds, namely:
(a) The identified passages in my 22 October judgment, when considered in the context of the hearing of the applications to which my 13 October and 22 October judgments related, do not provide grounds for a reasonable apprehension of bias under the Johnson test;
(b) if Ms Redfern's evidence were rejected, there would be even stronger grounds for ruling, as I did in my 13 October and 22 October judgments, that evidence concerning ASIC's state of mind after December 2001 is of no material significance to the question of admissibility of the search warrant material; and
(c) if there is any doubt as to whether, in my 22 October judgment, I purported to resolve contested factual issues and make a determination as to the credit of a witness, I am in a position to remove that doubt and, by these reasons for judgment, I now do so.
I shall deal with each of these three matters in turn.
66 I turn to the first ground. I found the defendants' submissions on this point troubling, when I read them and heard them developed in argument on 26 October. The general concern that judicial officers of this court always have to avoid creating any ground for apprehending bias had been enhanced in this case, both by the intensity with which matters in issue had been contested, and by the defendants' reference to the risk of bias in another context (DS 12, paragraph 14). Therefore the need to avoid creating any apprehension of bias was very much on my mind when I prepared my 22 October judgment, and I was surprised and concerned that the defendants had found in it the basis for their application.
67 In my 22 October judgment (paragraph 23), I proceeded on the basis that it was appropriate to make factual determinations only to a limited extent, for the purpose of determining ASIC's application to be relieved from compliance with the 20th notice to produce. Although I did not expressly say so in the judgment, I had in mind not only the Court of Appeal's warning to trial judges about the general undesirability of supporting interlocutory evidentiary rulings by commenting on evidence (Kwan v Kang at [114]), but also the fact that it would be unacceptable, in interlocutory circumstances, to seek to resolve contested factual issues, let alone to make findings as to the credit of a witness - a fortiori, when the cross-examination of the witness had not been completed and submissions on contested facts had not been received. As far as I was aware on 22 October, I did neither of these things in my judgment. My understanding was that the particular sentence in paragraph 15 of Ms Redfern's affidavit was not controversial, as a statement of her belief in December 2001, after she received the Brereton/Stack advice (for convenience, I shall refer to this sentence, understood as referring to her state of mind in December 2001, as "the Para 15 sentence"). It was only when I read and listened to the defendants' submissions on 26 October that it became apparent to me that the defendants wish to challenge the Para 15 sentence, and not merely any inference from it that Ms Redfern continued to have the same state of mind at later times.
68 On the evening of 26 October, I reviewed the transcript relating to Ms Redfern's evidence and the applications by ASIC that had led to my rulings of 13 and 22 October. I identified the transcript records of the events that had in fact led me to the conclusion that the Para 15 sentence was not under challenge. As the case law shows, a judge's conduct may create a reasonable apprehension of bias where he or she acts in good faith but under a misapprehension as to the scope of matters appropriate to be decided by interlocutory judgment: Southern Equities and Kwan v Kang are examples. The correct question relates not to the judge's perception but to the perception of a fair-minded lay observer. Bearing that in mind, I formed the provisional view that there was a reasonable and plausible basis for my conclusion in what had transpired at the hearing, and that a fair-minded lay observer who took all relevant matters into account would not apprehend bias on the basis of my observations about the Para 15 sentence in my 22 October judgment.
69 I decided that the appropriate course would be to draw the attention of the parties to the relevant transcript references, and give them the opportunity to make further submissions, particularly bearing in mind the risk that in the limited time available to me, I may have overlooked something. I did so 10 a.m. on Wednesday 27 October (T 1770 - 1775). The parties each provided me with written submissions (AS 23 and DS 21). Having considered those submissions, I reached the conclusion that my provisional view was correct.
70 I shall set out below the aspects of what transpired at the hearing that formed the basis for my belief that the Para 15 sentence was not controversial, and that in my opinion remove any reasonable grounds for apprehending bias under the Johnson test. I disagree with the defendants' submission that the matters set out below rely on "careful construction of nuances arising from what was said", or that my conclusion on this point attributes to the fair-minded lay observer a degree of sophistication and close attention to fine details which is at odds with the proper approach to the test.
71 On 12 October senior counsel for the defendants asked the question to which ASIC objected (T 1375), and in response to intervention by me, he made it expressly clear that the question was intended to extend to advices received by ASIC in the period from 1 June 2001 to the present time, not merely to advices received prior to the commencement of the present proceeding on 12 December 2001. Submissions were then made on the objection. The focus of attention was whether it was permissible for the defendants to cross-examine as to ASIC's and Ms Redfern's states of mind in respect of the period after December 2001.
72 At T 1388.17 and following, senior counsel for the defendants drew attention to the Para 15 sentence, and at line 27 and following he said:
"If your Honour does not permit me to ask questions about this, your Honour will be left with the material that is in the Redfern affidavit."
73 The context in which that was said is evident from the surrounding transcript, and, in particular, lines 40 to 45 of T 1388. On a fair reading of the transcript, it can be seen that the focus of counsel's attention was the period after December 2001, and it was reasonable to infer, as I did, that the questions he wished to ask related not to Ms Redfern's state of mind on 7 and 12 December 2001, but to her continuing state of mind from and after January 2002. That inference is more directly supported by the later statement of senior counsel for the defendants at T 1430.2-5.
74 The defendants' supplementary submissions drew attention to three statements by their senior counsel during the course of his exchange with me at T 1387-1388. In my opinion, the reference by counsel (at T 1387.46-T 1388.2) to "the time of the Brereton advice" was, in its context, a reference to the post-December 2001 period, rather than the period between 7 and 12 December 2001. In my opinion, counsel's submission (at T 1388.9) that the court was being invited to proceed on a basis that may be false, related to the post-December 2001 period. The reference (at T 1386.38 and following) to the defendants being prevented from exploring ASIC's state of mind at earlier and later times seems to me to reinforce the view that I have taken.
75 At T 1389.16, I intervened to make a statement in which I said, on a certain hypothesis:
"… I cannot see how I would be troubled at all if the fact were that an advice contrary to Mr Brereton's advice was received by ASIC last week."
76 At lines 33 and following of T 1389, senior counsel for the defendants responded to my hypothesis, without conveying any intention to challenge the Para 15 sentence. In my opinion, a fair-minded lay observer, reading this exchange between bench and bar, in its context, would find nothing in it suggesting that the defendants wished to challenge the Para 15 sentence as an account of Ms Redfern's state of mind in the period from 7 to 12 December 2001.
77 At T 1392.29 and following (and also at T 1408.39 and T 1409.36), senior counsel for the defendants informed the court that the question to which ASIC had objected (a question intended to cover the period up to the present time) was relevant, inter alia, because it went to Ms Redfern's credit in the sense of what she had disclosed in her affidavit and what she had not. As the defendants have pointed out, there are two substantive paragraphs in Ms Redfern's affidavit of 1 October 2004. One of them (paragraph 7 of the affidavit) relates to her state of mind in October 2001, at a time when the effect of consent by the liquidators of One.Tel was apparently not taken into account, and the other (paragraph 15) relates to her state of mind after the Brereton/Stack advice had been given. In my opinion, in its context, counsel's statement that Ms Redfern's credibility was in issue would convey to a fair-minded lay observer that the defendants wished to challenge paragraph 7 of her affidavit, and also paragraph 15 to the extent that it might be taken as evidence of her state of mind after December 2001. The way in which the Para 15 sentence was handled in other submissions (referred to above and below) would lead the fair-minded lay observer to conclude that there was no challenge to paragraph 15 as a statement of Ms Redfern's state of mind as at 7 and 12 December 2001.
78 I do not accept the submissions by the defendants that counsel's estimate of the length of cross-examination of Ms Redfern, or the contents of any notice to produce, would have countermanded the impression created in other ways, that the Para 15 sentence was not under challenge.
79 The next relevant event was the publication of my 13 October judgment. At paragraph 31 of the judgment, I set out the Para 15 sentence. In paragraph 38 of the judgment, I noted the defendants' submission that the court would be invited by ASIC to infer, from the Para 15 sentence, that from the time of the advice given by Mr Brereton SC and Mr Stack until the present time, ASIC and its relevant officers had been of the belief that they were acting properly. I returned to that submission at paragraph 58 of the judgment, after I had reached the conclusion that the question under objection, and other questions about the state of mind of ASIC after December 2001, should be disallowed, saying:
"A corollary is that I reject any contention, were it to be made, that Ms Redfern's evidence in her affidavit warrants an inference as to the continuing corporate state of mind of ASIC. It is evidence going only to her state of mind, and by inference the corporate state of mind of ASIC, in the period to which it relates."
80 At paragraph 41 of the judgment, I expressed the opinion that it was unlikely, given the contents of the Brereton/Stack advice, that any evidence that ASIC had received contrary advice in 2002 or subsequently, or that it became aware through Ms Redfern of legal opinion contrary to the opinion of Mr Brereton SC and Mr Stack, would have any material significance.
81 In my opinion a fair-minded lay observer would infer from those passages that I had proceeded, in my 13 October judgment, on the basis of, or assuming the correctness of, the Para 15 sentence, as a matter that was not controversial.
82 On 14 October senior counsel for the defendants made application under s 136 of the Evidence Act, the gist of which was that the Para 15 sentence should be received in a manner which prevented it from being treated as evidence of Ms Redfern's state of mind after December 2001: see T 1429.13 and following. Counsel said (at line 43-45) that "there is likely to be an issue in the future about where we stand in evidentiary terms in that period beyond 12 December", and (at line 46 and following) that "it would be incumbent on ASIC to demonstrate to your Honour the state of mind that it had in the period thereafter, as it bears the onus". There was no suggestion made in that application that the Para 15 sentence, as a statement of Ms Redfern's state of mind in December 2001, was subject to a challenge. I expressed my conclusion on the s 136 application (T 1430.26 and following) by saying that in my view the Para 15 sentence related Ms Redfern's state of mind on either or both of 7 and 12 December 2001. Then senior counsel for the defendants said (T 1430 .42 and following):
"Why was concerned about the matter is because of the presumption of continuity that might be urged upon your Honour."
83 I regard what was said on the s 136 application as a matter of some significance. It would have been reasonable for a fair-minded lay observer, listening to what was said on the application, to have inferred that the defendants' concern about the Para 15 sentence was not about its effect as evidence of Ms Redfern's state of mind in December 2001, but was a concern about treating it as the basis for an inference about her state of mind at subsequent times.
84 Although the cross-examination of Ms Redfern was incomplete when I delivered my two judgments and it remains incomplete, some parts of what occurred in cross-examination prior to my 22 October judgment should be noted. On 14 October, senior counsel for the defendants asked Ms Redfern the following question (T 1490.32 and following), to which she eventually answered affirmatively (at line 47):
"Q. To the extent that you needed to make decisions about search warrant matters, you were heavily reliant on advice from counsel?"