The essential principles
69 The principles are these.
70 The basic principle upon which the common law system of adversarial trial rests is that the Tribunal is independent and impartial. So important is the principle that even "the appearance of departure from it is prohibited lest the integrity of the judicial system be undermined" (Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at [7], per Gleeson CJ, McHugh, Gummow and Hayne JJ ("Ebner")). The apprehension of bias principle finds expression in this test (Ebner at [6]) (leaving aside any question of waiver or necessity):
… 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.
71 That test speaks of possibilities rather than probabilities and contemplates a "real and not remote" possibility that a judge might not bring an impartial mind to bear. The test recognises the possibility of human frailty in decision‑making. The application of the test requires two things. First, the identification of what it is that might lead a judge to decide the particular questions before him or her other than on the merits. Secondly, having identified the factor or circumstance that might influence a departure from meritorious decision‑making, it is "no less important" (Ebner at [8]) to articulate the "logical connection" between that factor and the fear that the judge might not apply proper judicial method (that is, merits based decision‑making) in resolving the controversy on the facts and the law (Ebner at [8]: as to a recent example of the application of the second limb, see: Expectation Pty Ltd v PRD Realty Pty Ltd & Anor (No. 2) (2006) 151 FCR 160). Only when the relevant factor is identified and the logical connection articulated, can the reasonableness of the asserted apprehension of bias be assessed. This test reflects (Ebner at [33]):
… the general principle to be applied … to problems of apprehended bias, whether arising from interest, conduct, association, extraneous information or some other circumstance.
72 Ebner (comprising two appeals) was a case involving contended "interest" on the part of the primary judge through relatively small shareholdings in a major Australian bank held both directly in one case and through a family trust in another which, although disclosed, was said to give rise to apprehended bias in the determination of the issues. Johnson v Johnson (2000) 174 ALR 655 was a "conduct" case in which the primary judge during the course of a lengthy hearing concerning the distribution of substantial assets between a husband and wife consequent upon dissolution of the marriage, twice made a particular observation that was said to suggest pre‑judgment (e.g. apprehended bias) as to the reliability or credit of the applicant husband. Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ at [12] emphasised three things. First, reference to the hypothetical fair‑minded lay observer makes plain the entirely objective character of the test. Secondly, the observer is taken to be "reasonable". Thirdly, applying an observation of McHugh J in Vakauta v Kelly (1988) 13 NSWLR 502 at 527 adopted by Toohey J in Vakauta v Kelly (1989) 167 CLR 568 at 584‑5, the Court noted that:
The person being observed is a professional judge whose training, tradition and oath or affirmation require [the judge] to discard the irrelevant, the immaterial and the prejudicial.
73 Further, the fictional observer is not presumed to have a detailed knowledge of the law, or the character, history or ability of a particular judge. Nevertheless, the reasonableness of any suggested apprehension of bias is to be considered in the context of "ordinary judicial practice" (Johnson v Johnson at [13]). The rules and conventions governing such practice take account of the "exigencies of modern litigation". Sometimes modern case management will result in a dialogue between the judge and counsel which might suggest an impression as to the judge's view of the strengths or weaknesses of a party's case on a particular issue. Opinions (although tentative or preliminary) are very like to be formed yet participants in these processes understand that justice will be done between the parties because a judge applying the professional standards previously mentioned will ultimately decide issues on the merits by discarding the irrelevant, the immaterial and the prejudicial so as to reach a decision on the merits according to law. Sometimes, statements made or the behaviour of a judge may create "an ineradicable apprehension of pre‑judgment" (Johnson v Johnson at [14]). However, later statements or later behaviour or both taken together, may alter an impression of pre‑judgment as, objectively viewed, "the hypothetical observer is no more entitled to make snap judgments than the person under observation" (Johnson v Johnson at [14]).
74 The lay observer must be "fair‑minded" and act out of reason and thus act "reasonably". In order to act out of reason, the lay observer must have a frame of reference so as to make not just any decision but an informed decision and thus a reasoned decision. Plainly, the lay observer is not informed by a "detailed knowledge" of the law or by a knowledge of the values or expertise of the particular judge. Nor is the lay observer to be attributed with "undue knowledge and sophistication" (Johnson v Johnson at [42], per Kirby J) or "highly specialised knowledge" or "all that was eventually known to the court" (Johnson v Johnson at [49], per Kirby J). Yet, the fictitious bystander is not "wholly uninformed and uninstructed about the law in general or the issues to be decided" (Johnson v Johnson at [53], per Kirby J). At [53], Kirby J also said this:
The attributes of the fictitious bystander to whom courts defer have therefore been variously stated. … Being reasonable and fair‑minded, the bystander, before making a decision important to the parties and the community, would ordinarily be taken to have sought to be informed on at least the most basic considerations relevant to arriving at a conclusion founded on a fair understanding of all the relevant circumstances. The bystander would be taken to know commonplace things, such as the fact that adjudicators sometimes say, or do, things they might later wish they had not, without necessarily disqualifying themselves from continuing to exercise their powers. The bystander must also now be taken to have, at least in a very general way, some knowledge of the fact that an adjudicator may properly adopt reasonable efforts to confine proceedings within appropriate limits and to ensure that time is not wasted. The fictitious bystander will also be aware of the strong professional pressures on adjudicators (reinforced by the facilities of appeal and review) to uphold traditions of integrity and impartiality. Acting reasonably, the fictitious bystander would not reach a hasty conclusion based on the appearance evoked by an isolated episode of temper or remarks to the parties or their representatives which was taken out of context. Finally, a reasonable member of the public is neither complacent nor unduly sensitive or suspicious.
[emphasis added]
75 Such a bystander informed of the basic considerations relevant to this case in reaching a conclusion founded on a fair understanding of all the relevant circumstances would be taken to know and weigh in the balance these things. First, the primary judge rejected the disputed evidence fundamentally on the ground that it went to matters which in the primary judge's view, did not fall outside the knowledge or experience of ordinary persons as it dealt with consumer decisions concerning the purchase of low cost everyday items of chocolate confectionary. Secondly, the reasons identified by the primary judge in the evidence ruling make plain that the primary judge accepted "without doubt" that the science of human behaviour, Dr Gibbs's discipline, is an area of specialised knowledge and that no disrespect was intended or given to Dr Gibbs or the other expert witnesses by the primary judge's thinking on the issue of admissibility.
76 Thirdly, that thinking was directed to an assessment of the questions in the controversy as ones "quintessentially of fact" within the experience of the trier of fact. Fourthly, the primary judge made an error in refusing to admit the evidence, an error common to the judge and counsel for the parties as no mind was turned to the implications of s 80(b) of the Evidence Act. However, the Full Court corrected that error of law and the primary judge although comforted by his understanding of the common law position, recognised the error of law on his part in failing to apply the provision of the Evidence Act and admit the opinion evidence.
77 Fifthly, although Cadbury contends that the primary judge's explanation for refusing to disqualify himself from conducting the further hearing compounds the earlier error and fails to accept in an unqualified way the correction of error, a proper balanced objective reading of his Honour's reasons demonstrates a thorough application of the Full Court's reasons and an unqualified willingness to apply the law and test both the admissibility of the evidence according to whatever proposition might be advanced as to admissibility and, if admitted, weigh the evidence in the balance according to the merits.
78 Sixthly, the error was an error as to admissibility of opinion evidence, made by reason of what his Honour thought to be the prevailing common law provision and thus the governing principles to be applied as to admissibility. At no time has the primary judge presided over a hearing where the evidence was admitted, tested, applied and findings made either in reliance upon or in rejection of the evidence of the experts.
79 Seventhly, the lay observer would also understand that the reference to the evidence of Dr Gibbs as "not helpful at all" reflects a conclusion that since the evidence goes to questions of fact par excellence and thus matters not outside the knowledge of ordinary persons, the trial would be influenced in a way which his Honour described as "greatly complicated" and "lengthened" by broader disputation and the calling of opposing experts. That view was not a judgment about the substantive evidence or the experts individually as the evidence was never before the primary judge in the full evaluative sense of material that may or may not be probative of facts in issue.
80 Eighthly, the lay observer would be informed of the criticisms the primary judge made for the purposes of s 135 of the Evidence Act of aspects of the opinion evidence. The lay observer being fair‑minded and acting reasonably founded on a fair understanding of all the relevant circumstances would take into account that the primary judge, when expressing those views, was expressing criticism of the foundation facts relied upon by Dr Gibbs and the ultimate probative value of the evidence in the exercise of a discretion. The lay observer's view would also be influenced by the Full Court's observations, without necessarily understanding the sequence of reasoning, that the evidence if admitted could have a significant bearing on a judge's understanding of consumer behaviour and, more significantly, Dr Gibbs's opinions on consumer information processing errors could bear on the questions to be decided and could be of probative value. Moreover, the lay observer would be informed that the Full Court had said that if the evidence were to be admitted and accepted at face value, it would certainly be open to a court to find that Darrell Lea's use of purple is likely to cause the consumer errors identified by Dr Gibbs and thus justify, at face value, a conclusion that Darrell Lea had engaged in conduct likely to mislead and deceive. The lay observer would be informed that such evidence went to information processing errors not Ms McGlinchey's state of mind when adopting a similar colour purple to Cadbury purple.
81 Ninthly, the lay observer would recognise that the Full Court had corrected the error of the primary judge and had laid down a number of principles usefully informing the treatment to be adopted in relation to aspects of the disputed evidence and evidence of the class of the disputed evidence in cases of the kind before the primary judge. Tenthly, the lay observer would recognise that the judge according to professional tradition, training, discipline and commitment to the oath of office would act according to the correction of error and apply the principles articulated by the Full Court.
82 Finally, the lay observer would recognise that the primary judge made a series of directions orders for the management of a further hearing and set aside five days to deal with all of the issues and determine questions to be decided according to the application and weight of the evidence admitted before him.
83 A number of further matters should be mentioned.
84 First, as to Ms McGlinchey, there is no doubt that Mr Myers QC on behalf of Cadbury vigorously put to Mr McGlinchey Cadbury's case that Ms McGlinchey had adopted the particular shade of purple consciously and for the purpose of appropriating Cadbury's reputation. The failure to admit the evidence did not prejudice the putting of propositions to Ms McGlinchey about her state of mind in adopting the course of conduct in issue.
85 Secondly, the lay observer might be confused about the implications of the Full Court's reasons in remitting the matter to the primary judge for further hearing. The lay observer would be very likely to assume that the Full Court's election to remit the matter to the primary judge in the context of the statements made at [113] and [114] of the initial reasons and [7] to [12] of the further reasons (see [4] and [43] and [44] of these reasons), suggests to his or her mind that the Full Court thought that the primary judge could bring an impartial and independent mind to bear in the determination of the issues before him proceeding "as though he had admitted such of the disputed evidence as his Honour finds to be admissible after considering appropriate objections" and regarding himself as "being in the same position as he would have been in had he not made the ruling of 31 March 2006". True it is that the question of whether the primary judge might be satisfied as to whether it was appropriate for him to conduct the further hearing or for another judge to undertake a retrial ab initio, was left to the primary judge to determine and in that sense the lay observer would understand that there was a residual question to be decided. The lay observer would be likely to conclude, adopting a construct, that the Full Court thought that in the absence of the primary judge concluding that he could not conduct the hearing impartially, expressions of opinion by the primary judge concerning the admissibility of the evidence (and factors influencing the exercise of discretion) did not give rise to apprehension of bias. The lay observer, however, would be advised, as Darrell Lea accepts, that the decision of the Full Court in remitting the matter to the primary judge did not carry with the remitter a decision that no question of apprehended bias might arise. The lay observer would test the question according to the matters indicated at [62] to [72].
86 Thirdly, emphasis is placed by Cadbury upon Livesey v The New South Wales Bar Association (1983) 151 CLR 288. However, in Livesey, two members of the Court of Appeal comprised the Court in the determination of the issues concerning Mr Livesey when on a previous occasion those two members comprised the Court in proceedings concerning Ms Wendy Bacon. Adverse findings of the strongest possible kind were made against Ms Bacon. Ms Bacon was to be called as a witness in the Livesey proceedings. Since very damaging credit findings had been made in relation to Ms Bacon in connection with the very facts and circumstances lying at the centre of the events concerning Mr Livesey, the High Court concluded, unremarkably, that a fair‑minded observer might entertain an apprehension of bias in the Livesey proceedings by reason of the pre‑judgment of the issues of credibility in connection with Ms Bacon. Similarly, in Vakauta v Kelly (1989) 167 CLR 568, the primary judge made pejorative remarks during the course of the hearing concerning the expertise or reliability of professional opinions of expert medical witnesses to be called by the defendant (insurer) describing them as "that unholy trinity" and the "usual panel of doctors who think you can do a full week's work without any arms or legs" and experts whose "views are almost inevitably slanted in favour of the GIO by whom they have been retained, consciously or unconsciously". Those statements made in the course of the hearing were "revived" by what the primary judge said in his reserved judgment. Thus the lay observer would have seen the derogatory and wide‑sweeping references to the particular expert as indicating that the primary judge was concerned to vindicate in the judgment his pre‑conceived and very strong adverse views and had allowed those views to prejudice his whole approach to the case to the detriment of the defendant.
87 The primary judge in this case did not consider the evidence in the resolution of the issues and formed no view of the kind described in Vakauta v Kelly. Cadbury placed considerable emphasis upon the decision of the New South Wales Court of Appeal in Baulkham Hills Shire Council v Basemount Pty Ltd & Anor [2003] NSWCA 189; 126 LGERA 339. In that case, the Court of Appeal (Tobias JA; Handley JA and Ipp JA agreeing) concluded that a reasonable apprehension of bias on the part of the Commissioner arose on the footing that the Commissioner would not be able to decide the questions remitted to her, impartially, as she had, in reaching the initial decision the subject of the appeal, made findings on the evidence in circumstances where she had denied procedural fairness to a party. Statements of principle in that case concerning the objective inability of the Commissioner to determine questions of fact on remitter having previously decided questions of fact during the course of the initial hearing should be viewed with some caution in a case where the fair‑minded lay observer acting reasonably would be mindful that in the present case there was no suggestion of a denial of procedural fairness on the part of the primary judge. In fact, the primary judge conducted an exhaustive hearing in relation to the admissibility of the evidence and delivered published reasons in relation to that matter.
88 Having regard to all of these considerations, it seems to me that the fictitious fair‑minded lay observer is not a person who might reasonably apprehend that the primary judge might not bring an impartial and unbiased mind to the resolution of the questions he was required to decide at the further hearing.
89 Accordingly, the appeal in relation to grounds 1 and 2 of the notice of appeal must be dismissed.