Cabcharge Australia Ltd v Australian Competition and Consumer Commission

DRAFT GROUNDS 1 AND 2 21 The first two grounds in the draft notice of appeal allege that the primary judge misdirected himself as to the test to be applied in determining whether or not to recuse himself on the ground of apprehended bias. His Honour directed himself (at [22]) that: "The cases say that for a judge to be disqualified from hearing a particular case, a fair-minded lay observer must reasonably apprehend that the judge might not bring an impartial mind to bear to resolve the issues which the judge is required to resolve." (Emphasis added). 22 Cabcharge contends that his Honour erred by using the word "must". It contrasts his formulation of the relevant test with that propounded by the High Court in Livesey v New South Wales Bar Association (1983) 151 CLR 288 at 293-4 where the Court said that the relevant principle was "that a Judge should not sit to hear a case if in all the circumstances the parties or the public might entertain a reasonable apprehension that he might not bring an impartial and unprejudiced mind to the resolution of the question involved in it." (Emphasis added). Cabcharge emphasises that the principle is framed, by the High Court, in terms of possibility rather than likelihood or probability or certainty. In using the word "must" the primary judge is said to have posed a test which renders it more difficult for an objector to succeed in a disqualification application. 23 We accept that his Honour erred in the manner in which he framed the relevant test. We are, nonetheless, persuaded that the conclusion to which his Honour came was correct. 24 The High Court has propounded the general test for disqualification on numerous occasions. In Ebner v Official Trustee in Bankrupty (2000) 205 CLR 337 ('Ebner') at 344 [6], Gleeson CJ, McHugh, Gummow and Hayne JJ said: "[S]ubject to qualifications relating to waiver … 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." See also Concrete Pty Ltd v Parramatta Design and Developments Pty Ltd (2006) 229 CLR 577 ('Concrete') at 609-610 [110]-[111] per Kirby and Crennan JJ and 635-6 [176]-[177] per Callinan J; and, to similar effect, see Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 ('Laws v ABT') at 99-100 per Gaudron and McHugh JJ (disqualification if a reasonable bystander would entertain a reasonable fear that tribunal members were incapable of bringing fair and unprejudiced minds to the inquiry). 25 The test for apprehended bias is the same wherever it arises, although the context in which it falls to be applied will clearly affect how the test is applied. One particular occasion of apprehended bias is where it is said, as Cabcharge had alleged here, that the judge has relevantly prejudged matters in controversy. In this context, disqualifying bias results in a state of mind that is not open to persuasion. That is, in this species of apprehended bias, "[t]he state of mind described as bias in the form of prejudgment is one so committed to a conclusion already formed as to be incapable of alteration, whatever evidence or arguments may be presented": see Minister for Immigration and Multicultural Affairs v Jia Legeng (2001) 205 CLR 507 ('Jia Legeng') at 531-2 [71]-[72] per Gleeson CJ and Gummow J. That is, in such a case as the present, it must be firmly established that a reasonable observer might conclude that the decision-maker might not bring to his or her task an impartial mind by reason of prejudgment, in the sense that the decision-maker might be so committed to a conclusion as to be incapable of persuasion to a different view: see Re JRL; Ex parte CJL (1986) 161 CLR 342 ('Re JRL') at 352 per Mason J. This proposition in turn involves a number of separate propositions: see Jia Legeng at 564 [185] per Hayne J. We return to them below. 26 For present purposes, in discussing proposed grounds 1 and 2 of the draft notice of appeal, it suffices to say that a reasonable bystander does not necessarily entertain a reasonable fear that a judge might bring a closed mind to a case merely because he or she has apparently stated a view about a relevant issue on another occasion in another context: see Laws v ABT at 100; Re JRL at 352. As Mason J explained in the latter case: "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." (Citation omitted.) 27 The applicant challenged his Honour's formulation of the test for apprehended bias. In this context we note that, although the test for apprehended bias is ordinarily the same wherever it arises, the precise language used in applying the test has frequently varied depending on the context in which it falls to be applied: compare Laws v ABT at 99-100; Re JRL at 352; Ebner at 344 [6]; and Re Polites; Ex parte the Hoyts Corporation Pty Ltd (1991) 173 CLR 78 ('Re Polites') at 85-7 and 90. 28 It is true that the use of the word "must" in the statement of the test in his Honour's reasons for judgment indicates a degree of certainty that is higher than the threshold identified in Ebner. In Ebner at 344 [6], the use of the word "might" in the first limb of the test (as well as the second) connotes the lesser possibility than the word "must". It is, however, important to focus on his Honour's application of the test, rather than overemphasize possible semantic deficiencies: compare McGovern v Ku-Ring-Gai Council (2008) 72 NSWLR 504 at 526 [111]-[114] per Basten JA. Further, as counsel for ACCC noted, the "double might" test in Ebner is not inconsistent with the prejudgment "incapable of alteration test" in Jia Legeng. That is, the reasonable apprehension that "a fair-minded lay observer might" have is that the mind of the judge might be "incapable of alteration": see [25] above. 29 Cabcharge misapprehends the operation of the test for apprehended bias in the context of alleged judicial prejudgment, by disregarding the necessity for it to establish firmly that a fair-minded lay observer might reasonably apprehend that the docket judge might have a closed mind on a relevant issue, irrespective of the evidence or arguments that might be presented to him. In this regard, Cabcharge places over much reliance on Livesey and the observations of the New South Wales Court of Appeal in Spedley, especially at 442 per Mahoney JA, which purported to apply Livesey. 30 In Livesey the High Court was required to consider whether two members of the New South Wales Court of Appeal ought to have disqualified themselves from hearing an application for declarations to the effect that Mr Livesey was not a fit and proper person to be a member of the State Bar. In deciding the application, the Court heard evidence from a witness against whom the two judges had earlier made adverse credit findings in a proceeding arising out of the same circumstances as the application before them, though not involving Mr Livesey. The Court held that the two judges ought to have disqualified themselves because a fair-minded observer might entertain an apprehension of bias by reason of their prejudgment of the credit of the witness. Speaking of the circumstances in which an apprehension of bias arises, the Court said (at 299-300): "Necessity and the extraordinary case … make it impossible to lay down an inflexible rule; each case must be determined by reference to its particular circumstances. It is, however, apparent that, in a case such as the present where it is not suggested that there is any overriding consideration of necessity, special circumstances or consent of the parties, a fair-minded observer might entertain a reasonable apprehension of bias by reason of prejudgment if a judge sits to hear a case at first instance after he has, in a previous case, expressed clear views either about a question of fact which constitutes a live and significant issue in the subsequent case or about the credit of a witness whose evidence is of significance on such a question of fact. The consideration that the relevant question of fact may be conceded or that the relevant person may not be called as a witness if the particular judge sits would not, of course, avoid the appearance of bias. To the contrary, it would underline the need for the judge to refrain from sitting." Cabcharge relied particularly on this passage in this case. 31 In this case, of course, the docket judge acknowledged that Mr Jools was not to be an important witness for the ACCC in this case, although he approached the issue of apprehended bias upon the contrary assumption, as contended by Cabcharge. In the case before the Tribunal, however, it is that plain enough that Mr Jools did not give evidence and there was no assessment of his credit as a witness. Further, in the Tribunal proceeding, none of the three witnesses who gave oral evidence was cross-examined; and the balance of the evidence was provided by statements placed before the Tribunal. 32 Cabcharge argued that the "courts have not wavered from restating and applying the principle in the terms articulated" in the passage from Livesey. In one sense, as the foregoing analysis shows, what Cabcharge says is true. It is important, however, to bear in mind the subsequent comments of Mason J in Re JRL at 352, regarding Livesey, which emphasized that disqualification flows from a reasonable apprehension that the judge might not decide the case impartially, rather than that he will decide the case adversely to a party. These comments were referred to approvingly by Brennan, Gaudron and McHugh JJ in Re Polites at 88-9, where again, though in a different context, it was said that "the test in Livesey cannot be pressed too far". 33 In R v Masters (1992) 26 NSWLR 450 at 472, Hunt CJ, Allen and Badgery-Parker JJ referred to the comments of Mason J in Re JRL and to the unanimous judgment in Re Polites and rejected the analysis in Spedley, saying as follows: "In [Spedley] the Court of Appeal held by a majority of three to two that a judge who had in one case determined an issue of fact and the credit of an important witness contrary to one party should disqualify himself from hearing a related case in which the same issue and the credit of the same witness would arise for determination. … We are not persuaded that the interpretation of apprehended bias now adopted by the Court of Appeal is correct." 34 In Gascor v Ellicott [1997] 1 VR 332 at 348 Ormiston JA also doubted whether the fact that a judge had decided a factual issue in the past would necessarily disqualify him or her from deciding the same factual issue in a subsequent case. As his Honour observed "what kind of findings will lead to relevant apprehension of bias must depend upon their significance and nature". See also per Tadgell JA (with whom Brooking JA agreed) at 342. 35 It remains, then, to consider whether, in the circumstances of this case, his Honour is disqualified from further involvement in the proceeding.

DRAFT GROUNDS 3, 4 AND 5 36 Under these grounds Cabcharge alleges that the Tribunal (over which the primary judge presided) decided facts in Jools which will arise in the present proceeding and which are said to be central to that proceeding. Cabcharge complains that the findings were not based on undisputed or substantially undisputed facts and that, in the circumstances in which the findings were made, a fair-minded observer might entertain a reasonable apprehension of bias. 37 In its written submissions, Cabcharge identified the following findings of fact which, it says, were made by the Tribunal in Jools and which it is said are facts in issue in the present proceeding: · "[Cabcharge] terminals have gained such a stranglehold on the market for the provision of non-cash payments that there appears to be a restriction of competition in relation to electronic processing systems." · "[T]here are significant barriers to entry in relation to the market for the provision of payment processing systems." · "It may be that more would do so [use an alternative system to Cabcharge's] if an alternative system could process Cabcharge credit cards. But that can only happen with Cabcharge's consent, and its consent is not likely to be forthcoming while Cabcharge is able to maintain its virtual monopoly on EFTPOS systems in taxis." · "[T]he practical effect of the authorisations has been to compel networks and drivers to install Cabcharge EFTPOS terminals." · "The position now is that it is extremely difficult for competing terminals to replace Cabcharge terminals, that is for a new entrant to provide a processing system and terminal as an alternative to Cabcharge … They [the authorisations] have created barriers to entry and have allowed Cabcharge to become dominant." · "Cabcharge is introducing e-tickets to replace Cabcharge vouchers ... This development is likely to cement Cabcharge's market position further by reducing the alternatives to use of Cabcharge terminals. It would leave cash as the single alternative means of payment. … This dominance is likely to persist with the introduction of the e-ticket." · "[T]he authorisations have enabled Cabcharge to become a virtual monopolist at least in relation to the provision of payment systems." 38 It should be observed that Cabcharge is not correct in claiming that the Tribunal made all of the findings attributed to it. The first "finding" which is identified in the preceding paragraph was no more than a recording, by the Tribunal, of part of the reasons, given by the ACCC, for its decision to grant the authorisations: see Jools at 120 [19]. The second "finding" is a summary of a submission made to the Tribunal by Mr Jools: see Jools at 124 [35]. 39 It is relevant to repeat that the findings which were made by the Tribunal were made in June 2006. They were based in part on a statement of agreed facts which appeared as a schedule to the Tribunal's reasons. They were also based on unchallenged evidence given orally before the Tribunal. They were made by an administrative tribunal not bound by the rules of evidence and acting informally. 40 It is next to be observed that the Tribunal's decision was not concerned with the operation of either ss 45 or 46 of the Trade Practices Act. The ACCC had declined to revoke certain authorisations which had been granted by its predecessor, the Trade Practices Commission. The authorisations had been granted to some taxi networks. They permitted the networks to penalise or suspend drivers from the use of the networks' radio booking facilities if they failed to display a notice advising of the availability of a Cabcharge credit system approved by the networks. The networks could also penalise or suspend drivers who failed to accept Cabcharge cards for payment of fares. The authorisations were necessary because such arrangements amounted to third line forcing which is prohibited by s 47(6) or s 47(7) of the Trade Practices Act. In order to grant the authorisations, which effectively permitted what would otherwise have been contraventions of the Act, the Commission had to be satisfied, pursuant to s 90(8) of the Act, that the implementation of the proposal "would result, or be likely to result, in such a benefit to the public" that the implementation should be allowed. 41 Mr Jools, in his capacity as President of the New South Wales Taxi Drivers' Association, was dissatisfied with the ACCC's decision not to revoke the authorisations. He exercised his right, under s 101(1) of the Trade Practices Act, to apply to the Tribunal for a review of the ACCC's decision. The Tribunal was required to conduct a re-hearing: see s 101(2) of the Act. Having considered the competing arguments the Tribunal concluded that the authorisations should be revoked because it did "not believe that the potential benefit in sustaining them is a sufficiently certain benefit": see at 127. 42 As has already been noted, the ACCC, in the present proceeding, alleges contraventions by Cabcharge of ss 45 and 46 of the Trade Practices Act. It alleges that, between 2002 and 2008, Cabcharge took advantage of its "substantial degree of market power" in certain Australia-wide markets for the supply of services for the purposes of "eliminating or substantially damaging" competitors, or "preventing the entry" of potential competitors into those markets, or "deterring or preventing competitors" from engaging in competitive conduct in those markets. It further alleges that Cabcharge, in 2004, entered into a contract or arrangement containing a provision which had the purpose and likely effect of substantially lessening competition in the relevant markets and gave effect to that provision in contravention of s 45(2)(a)(ii) of the Act. 43 The pleadings in the present proceeding are closed. Relevantly, the ACCC alleges, and Cabcharge denies the following facts: · Cabcharge was a monopolist in the relevant markets. · There were significant barriers to entry in relation to the relevant markets. · Cabcharge possessed substantial market power in the relevant markets. · By not consenting to requests from alternative system providers to process Cabcharge charge cards, Cabcharge took advantage of its substantial market power in the relevant markets. · The practical effect of the authorisations considered in Jools included that drivers and operators affiliated with the networks subject to the authorisations were required to use Cabcharge's payment system in order to be able to accept Cabcharge instruments. · The majority of taxi drivers and operators prefer to use and used only one EFTPOS terminal. · Drivers and operators who use more than one EFTPOS were compelled to install and use Cabcharge's payment system. 44 It may be accepted, as the ACCC concedes, that there is some overlap between the factual findings made by the Tribunal (set out above at [37]) and some of the issues of fact which are in dispute in the present proceeding. It does not necessarily follow that the primary judge is, for this reason, disabled from conducting the forthcoming trial. He will only be disqualified if it is "firmly established" that a reasonable observer might apprehend that he might be "so committed to a conclusion already formed as to be incapable of alteration, whatever evidence or arguments may be presented" at trial. 45 We do not consider it to have been established that a fair-minded observer might reasonably apprehend that the trial judge might harbour any such irrevocable commitment to factual findings which he made as President of the Tribunal over four years ago. Those findings were made largely on the basis of undisputed evidence. It is evident from the transcript of argument before the primary judge that he had but a vague recollection of what had transpired at the Tribunal hearing and of the reasons for its decision. He was at pains to emphasise that such findings as were made were made (as best he could recall) on uncontested evidence. 46 By contrast, the forthcoming hearing will be hotly contested with much of the evidence on each side likely to be tested under cross-examination. His Honour will be called on to assess the weight to be given to conflicting factual assertions for the purpose of determining whether contraventions of provisions of the Trade Practices Act, other than those which were relevant in Jools, have occurred. He will have the benefit of expert evidence. His Honour has neither said nor done anything which would suggest that, in performing his judicial duties, he might be committed to findings which he made as a member of an administrative tribunal in 2006. It is highly likely that, in the interim, there will have been material changes to the structure of the industry or markets. In any event, there will be different and conflicting evidence about those matters which his Honour will need to consider and which may well lead him to different conclusions. 47 There is nothing in the material to suggest that a fair-minded observer might reasonably apprehend that evidence led by Cabcharge in the present case might not be considered and acted upon if it is accepted by the trial judge.

DISPOSITION 48 We considered it appropriate to grant leave to appeal because the primary judge had misdirected himself as to the test for disqualification. Having considered the arguments raised in support of the grounds in the draft notice of appeal we are not persuaded, for the reasons given, that any of the grounds have been made out. We, accordingly, determined to dismiss the appeal. 49 We did not consider it appropriate to hear arguments as to costs until the parties had had the opportunity of considering these reasons. Our provisional view is that the usual order as to costs should be made. If either party wishes to make a contrary submission we will make provision, in our orders, for any such submission to be made in writing. I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Kenny, Tracey and Middleton.