Bodycorp Repairers Pty Ltd v Maisano

1. The Plaintiff have summary judgment against the First Defendant for the relief that is sought in the amended statement of claim that includes an order that paragraphs 1 and 2 of the orders of Justice Elliott that were made on 13 September 2016 be set aside in so far as it concerns the First Defendant with damages to be assessed.
2. Alternatively, the Plaintiff have judgment against the First Defendant in default of the First Defendant filing a notice of appearance, and /or defence for the relief that is sought in the amended statement of claim that includes an order that paragraphs 1 and 2 of the orders of Justice Elliott that were made on 13 September 2016 be set aside in so far as it concerns the First Defendant with damages to be assessed.

3 Bodycorp has applied for me to recuse myself from hearing this application; and these reasons are with respect to that application for recusal.

4 The original proceeding was filed in the Federal Court of Australia on 10 December 2002 and was subsequently transferred to the Supreme Court of Victoria on 14 October 2005. After a protracted interlocutory history, the trial proceeded before Elliott J over 15 days in May 2013.

5 At the trial of the original proceeding, Bodycorp contended as follows:

(a) The first defendant in this proceeding, Anunziato Enzo Maisano ('Maisano'), breached a franchise agreement with Bodycorp by terminating the agreement and had also induced other franchisees to breach their franchise agreements with Bodycorp.[1]

(b) The fourth defendant in this proceeding, AAMI,[2] and its employee, the fifth defendant, Barry Martin, similarly induced other franchisees to breach their franchise agreements with Bodycorp; and AAMI also breached a written agreement between the parties and further owed Bodycorp the sum of $1,445,335 for work and labour done.[3]

(c) The sixth defendant in this proceeding, All States (a subsidiary of AAMI),[4] breached an alleged agreement with Bodycorp by ceasing to provide work to Bodycorp's franchisees.[5]

(d) The proprietors of the Melton franchise (including the seventh defendant in this proceeding, Scott Munro) similarly induced other franchisees to breach their franchise agreements with Bodycorp, but this claim was abandoned on the first day of trial.[6]

6 The second defendant, Oakley Thompson & Co ('Oakley Thompson') acted as the solicitors for Maisano in the original proceeding and the eighth defendant, Jeremy Broadbent, is an employee of Oakley Thompson, who assisted in the conduct of the matter on behalf of Maisano.

7 On 4 September 2013, Elliott J dismissed Bodycorp's claims against all defendants in the original proceedings; and, on 28 April 2015, Bodycorp's appeal against the dismissal was itself dismissed.[7]

8 On 26 May 2016, Bodycorp filed the writ in this proceeding seeking among other things, an order that the judgment of Elliott J dated 4 September 2013 be set aside; and, on 10 August 2016, the plaintiff filed an amended statement of claim.

9 By summons filed 23 August 2016, the second and eighth defendants (together, 'the Oakley Thompson defendants') sought summary dismissal of the claims made against them in this proceeding pursuant to r 23.01 of the Supreme Court (General Civil Procedure) Rules 2015 and s 63 of the Civil Procedure Act 2010.

10 By a summons filed 23 August 2016, the sixth and seventh defendants sought similar relief. However, Bodycorp discontinued the proceeding against those defendants by a notice of discontinuance filed 16 September 2016.

11 By summons filed 23 August 2016, the third defendant also sought similar relief, but the proceeding against that defendant was discontinued on the oral application of Bodycorp on 29 September 2016.

12 By summons filed 24 August 2016, the fourth and fifth defendants (together 'the AAMI defendants') sought summary dismissal of the claims made against them.

13 On 28 October 2016, I summarily dismissed Bodycorp's claims against the second, fourth, fifth and eighth defendants. It was further ordered as follows:

1. If any party is unsatisfied with an order that the plaintiff pay the second, fourth, fifth and eighth defendants' costs of the proceeding to be taxed on a standard basis, such party file and serve submissions as to the appropriate order as to costs by 4:00 pm on 7 November 2016.
2. Any party submissions in response to those submissions to be filed and served by 4:00 pm on 11 November 2016.
3. The matter be adjourned for directions on 25 November 2016 at 9:30 am.

14 On 25 November 2016, I made orders for costs and adjourned Bodycorp's summons dated 5 October 2016, for reinstatement of the discontinued claim against the third defendant, to a date to be fixed after the hearing and determination of the Bodycorp's appeal against the judgment given on 28 October 2016.

15 On 15 September 2017, the Court of Appeal granted leave to appeal on one ground, but dismissed Bodycorp's appeal from the decision of 28 October 2016, and refused the application for leave to appeal on the other grounds.[8]

16 In support of the application that I should recuse myself from hearing this application Bodycorp submits as follows:

(a) The reasoning I applied in summarily dismissing the claim against Oakley Thompson did not distinguish between Maisano and Oakley Thompson. In particular, the reasons did not refer to any evidence that related solely to Oakley Thompson and the reasons included a finding that 'the fresh evidence as to the conversations that [Maisano] had with the franchisees could no more constitute an inducement to have the franchisees breach their franchise arrangements than the statements that Justice Elliott accepted had been made to the franchisees (paragraph 68 and 69 of the judgment).'[9]

(b) Further, 'it seems that Justice Riordan would be compelled to adopt his reasoning to dismiss the claim against [Maisano] as well'.

(c) The fact that the Reasons of 28 October 2016 might compel the summary dismissal of the claim against Maisano was acknowledged in the following statements made by me on 25 November 2016:

I don't recall making that conclusion. It might be implicit, but the fact of the matter I didn't have an application by anybody to dismiss the claim against the First Defendant ... (TR 9: 16 - 20);

... It might be that the First Defendant could come forward and say, 'Look on this reasoning you should dismiss it against me as well', but that application hasn't been made to me (TR 9: 26 - 29);

... It may be a necessary incident of my reasoning that claim against the First Defendant would fail. I just didn't turn my mind to that question as to whether or not he might have any other arguments ... (TR 11: 3 - 7).

17 On behalf of Oakley Thompson, it was submitted as follows:

(a) By the application of the principles of issue estoppel, Bodycorp was prevented from arguing that its claim against Maisano should not be summarily dismissed.

(b) There was no reason to think that I would not bring an impartial mind to the resolution of the applications.

18 In AJH Lawyers Pty Ltd v Careri,[10] the Court of Appeal identified the relevant principles to be applied in determining an application for recusal on the grounds of apprehended bias, which I summarise as follows:

(a) The relevant test is whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind (in the sense of there being a real and not remote possibility) to the resolution of the question the judge is required to decide.[11]

(b) The test is applied in the following two steps:

(i) The identification of the conduct of the judge which is alleged to give rise to an apprehension of bias.

(ii) 'Articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits'.[12]

(c) The test is objective and therefore the apprehension is of a hypothetical, reasonable observer of the judge's conduct.[13]

(d) The apprehension in question is that the judge will not decide the case impartially. It is not sufficient if there is merely an apprehension that the judge will decide the case adversely to one party.[14]

(e) The fictional observer is taken to understand the dynamics of modern judicial practice and 'the expression of tentative views during the course of argument as to matters on which the parties are permitted to make full submissions does not manifest partiality or bias.'[15] A key factor in distinguishing between the proper expression of tentative views and pre-judgment 'is the extent to which the views expressed by the judge appear to be final rather than merely tentative'.[16]

(f) Although unlimited time does not need to be devoted to unmeritorious arguments of parties, 'the judge must normally give the parties a reasonable opportunity to make submissions in support of [an] application.'[17]

(g) A judge should not too readily grant a recusal application.[18] As the High Court observed in Ebner:

Judges have a duty to exercise their judicial functions when their jurisdiction is regularly invoked and they are assigned to cases in accordance with the practice which prevails in the court to which they belong ... If one party to a case objects to a particular judge sitting, or continuing to sit, then that objection should not prevail unless it is based upon a substantial ground for contending that the judge is disqualified from hearing and deciding the case.[19]

19 As to the first step of the test identified at [18(b)(i)], the judicial conduct relied upon by Bodycorp is the fact that I have in the earlier reasons for judgment summarily dismissed Bodycorp's claim for relief against four other defendants, including Oakley Thompson, who were Maisano's solicitors at the relevant time.

20 As to the second step of the test identified at [18(b)(ii)], Bodycorp submits that I 'would be compelled to adopt [the earlier] reasoning to dismiss the claim against [Maisano] as well'; and I have, in my comments made on 25 November 2016, acknowledged that such a result may be a necessary incident of my reasoning (notwithstanding the fact that I expressly said that I had not turned my mind to the question).

21 Although it may be that, given my conclusions with respect to the summary dismissal applications made by the other defendants, Bodycorp would prefer their chances of pressing for judgment against Maisano before a different judge, I do not consider that this is a sufficient basis to recuse myself.

22 In Re JRL; Ex Parte CJL, Mason J said as follows:

It needs to be said loudly and clearly that the ground of disqualification is a reasonable apprehension that the judicial officer will not decide the case impartially or without prejudice, rather than that he will decide the case adversely to one party. There may be many situations in which previous decisions of a judicial officer on issues of fact and law may generate an expectation that he is likely to decide issues in a particular case adversely to one of the parties. But this does not mean either that he will approach the issues in that case otherwise than with an impartial and unprejudiced mind in the sense in which that expression is used in the authorities or that his previous decisions provide an acceptable basis for inferring that there is a reasonable apprehension that he will approach the issues in this way. In cases of this kind, disqualification is only made out by showing that there is a reasonable apprehension of bias by reason of prejudgment and this must be 'firmly established' ... Although it is important that justice must be seen to be done, it is equally important that judicial officers discharge their duty to sit and do not, by acceding too readily to suggestions of appearance of bias, encourage parties to believe that by seeking the disqualification of a judge, they will have their case tried by someone thought to be more likely to decide the case in their favour.[20]

23 Bodycorp submits that Australian National Industries Ltd v Spedley Securities Ltd (in liq)[21] is authority for the proposition that earlier decisions by a trial judge may be the basis for recusal.

24 In Australian National Industries Ltd v Spedley Securities Ltd (in liq) the New South Wales Court of Appeal upheld an appeal against a judge refusing a recusal application.[22] The relevant facts were as follows:

(a) A liquidator of Spedley Securities Ltd brought claims against various parties including Mr Maher, a former director of the company, and a Mr Yuill.

(b) The judge managing complex company litigation, during interlocutory hearings had rejected the oral testimony of Mr Maher finding that his evidence was false; and had made even more damning findings with respect to the credit of Mr Yuill.[23]

(c) The majority found that the credibility of Mr Maher and Mr Yuill would 'directly determine or directly bear upon the existence of facts central to the claim to be decided'.[24]

Accordingly, the majority found that a fair-minded and reasonable observer might entertain an apprehension of bias.

25 I consider that the present case is quite different from Australian National Industries Ltd v Spedley Securities Ltd (in liq)[25] because:

(a) Different consideration may arise in cases where a judge has made findings with respect to the credit of key witnesses before the commencement of the trial; and

(b) in the Trial Reasons, I make no adverse findings about the credibility of Bodycorp or more particularly any of the evidence relied upon by Bodycorp.

26 In my opinion, Bodycorp's submission is directed to an expectation that I am likely to decide issues adversely to it based on my previous decision. This does not suggest that I will approach the issues raised by this application otherwise than with an impartial and unprejudiced mind. As was made clear by the Court of Appeal in AJH v Careri, to satisfy the test, the relevant apprehension must be that 'the judge will not decide the case impartially'; and it is not sufficient that there may be an apprehension that the judge will decide the case adversely to one party.[26]

27 Accordingly, I do not consider that a fair-minded lay observer might reasonably apprehend that I might not bring any impartial and unprejudiced mind to the applications brought by the parties.

[1] Bodycorp Repairers Pty Ltd v Maisano [No 8] [2013] VSC 472 [37]-[42] (Elliott J) ('Trial Reasons').

[4] Named in the writ simply as 'All States'.

[7] Bodycorp Repairers Pty Ltd v Australian Associated Motor Insurance Ltd [2015] VSCA 73 (Warren CJ, Beach JA and Ginnane AJA).

[8] Bodycorp Repairers Pty Ltd v Maisano [2017] VSCA 252 (Whelan, Kyrou and Hansen JJA).

[9] Plaintiff's Outline of Submissions [3].

[10] [2011] VSCA 425; (2011) 34 VR 236 (Warren CJ, Hansen JA and Almond AJA).

[11] Ibid 242 [20], citing Johnson v Johnson (2000) 201 CLR 488 ('Johnson').

[12] AJH Lawyers Pty Ltd v Careri [2011] VSCA 425; (2011) 34 VR 236, 242 [22], citing Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337, 345 [8] (Gleeson CJ, McHugh, Gummow and Hayne JJ) ('Ebner').

[13] Johnson (2000) 201 CLR 488, 493 [12] (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ); Michael Wilson and Partners v Nichols [2011] HCA 48; (2011) 244 CLR 427 [32]-[33] (Gummow ACJ, Hayne, Crennan and Bell JJ).

[14] AJH Lawyers Pty Ltd v Careri [2011] VSCA 425; (2011) 34 VR 236, 242 [21] (Warren CJ, Hansen JA and Almond AJA); Re JRL; Ex parte CJL [1986] HCA 39; (1986) 161 CLR 342, 352.

[15] AJH Lawyers Pty Ltd v Careri [2011] VSCA 425; (2011) 34 VR 236, 243 [23], citing Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd [2006] HCA 55; (2006) 229 CLR 577, 610 [112]; Johnson (2000) 201 CLR 488, 493 [13].

[16] AJH Lawyers Pty Ltd v Careri [2011] VSCA 425; (2011) 34 VR 236, 243 [24].

[19] [2000] HCA 63; 205 CLR 337, 348 [19] (Gleeson CJ, McHugh, Gummow and Hayne JJ).

[20] [1986] HCA 39; (1986) 161 CLR 342, 352 (emphasis added).

[21] (1992) 26 NSWLR 411 (Gleeson CJ, Kirby P, Samuals JA, Mahoney JA and Meagher JA).

[22] Ibid (Kirby P, Mahoney JA and Meagher JA; with Gleeson CJ and Samuals JA dissenting).

[26] [2011] VSCA 425; (2011) 34 VR 236, 242 [21].