APPEALED FROM: Howlin v Brinckman; Howlin v Clarence City Council

[2009] TASSC 18

Procedure - Courts and judges generally - Judges - Disqualification for interest or bias - Particular relationships or circumstances - Other matters - Apprehension of bias by pre-judgment - Application for costs against non-party following judgment in action - Non-party seeking to challenge findings and conclusions of trial judge.

R v Watson; Ex parte Armstrong [1976] HCA 39; (1976) 136 CLR 248; Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337; Johnson v Johnson [2000] HCA 48; (2000) 201 CLR 488; Livesey v New South Wales Bar Association [1983] HCA 17; (1983) 151 CLR 288, applied.

Re JRL; ex parte CJL [1986] HCA 39; (1986) 161 CLR 342; Helljay Investments Pty Ltd v Deputy Commissioner of Taxation (Cth) [1999] HCA 56; (1999) 74 ALJR 68, 166 ALR 302, considered.

Procedure - Costs - Jurisdiction - Persons not parties to proceedings - Proceedings between two land owners concerning whether land of one was a public highway - Application for costs against local council - Discretion of court - Interests of justice - Whether causal connection between non-party and proceedings - Whether exceptional circumstances.

Naomi Marble and Granite Pty Ltd v FAI General Ins Co Ltd (No 2) [1998] QSC 18; [1999] 1 Qd R 518; Symphony Group plc v Hodgson [1994] QB 179, [1993] 3 All ER 143; Arundel Chiropractic Centre Pty Ltd v Deputy Commissioner of Taxation (2001) 179 ALR 406; Knight v FP Special Assets Ltd [1992] HCA 28; (1992) 174 CLR 178; O'Neill v De Leo [1993] TASSC 162; (1993) 2 Tas R 225; Re JJT [1998] HCA 44; (1988) 195 CLR 184; Bischof v Adams [1992] VicRp 61; (1992) 2 VR 198; National Mutual Life Association of Australasia Ltd v Chris Poulson Insurance Agencies Pty Ltd (1998) 8 Tas R 123; Wentworth v Wentworth [1999] NSWSC 317; (1999) 46 NSWLR 300; Re Bonlac Foods Ltd (2001) 37 ACSR 457, applied.

Judgment Number: [2010] TASFC 2

CLARENCE CITY COUNCIL v DARRYL ROBERT HOWLIN and

2 Order that the appellant pay the respondents' taxed costs of the action from 11 December 2005 set aside.

3 Application of the respondents against the appellant for costs dismissed.

CLARENCE CITY COUNCIL v DARRYL ROBERT HOWLIN and

1 The respondents, Mr and Mrs Howlin, sued a neighbour, Mrs Brinckman, for a declaration that land referred to as Marsh Street, Opossum Bay, was a public highway.

2 The hearing of the action occupied four days between 26 and 29 March 2007. On 14 August 2007, the judge who conducted it gave judgment for the respondents against Mrs Brinckman. An order was made declaring that all of Marsh Street, which I will refer to at times as the Howlin portion of Marsh Street and the Brinckman portion of Marsh Street, was a public highway. See Howlin v Brinckman [2007] TASSC 59.

3 The respondents applied for an order that Mrs Brinckman pay their costs of the action. On 10 December 2007, the learned judge dismissed the application and ordered that the parties pay their own costs of the action. See Howlin v Brinckman (No 2) (2007) 17 Tas R 99; [2007] TASSC 100.

4 On 14 January 2008 the appellant first became involved in the action when the respondents filed an application seeking "an order that the Clarence City Council pay indemnity costs incurred by the plaintiffs of and incidental to the action". The appellant opposed the application. It was heard by the same judge on six dates between 19 and 27 August 2008.

5 On 26 March 2009, his Honour found for the respondents and ordered that the appellant pay the respondents' taxed costs of the action from 11 December 2005. See Howlin v Brinckman; Howlin v Clarence City Council [2009] TASSC 18. That was the date upon which a copy of the writ, by which the respondents sued Mrs Brinckman, was delivered to the Mayor of the appellant with an accompanying letter from the respondents.

6 The council appealed against that order to this Court. I have determined that the appeal should be upheld, the order for costs against the appellant should be set aside, and in its place the respondents' application for costs should be dismissed.

7 There are nine grounds of appeal. The first, ground (a), is that the learned judge erred in law by failing to disqualify himself from hearing the application against the appellant for costs, by reason of apprehended bias. For reasons that will be explained, I have decided that the ground is a sound one and, as the learned judge should have disqualified himself, the order for costs should be set aside.

8 I have also decided that this Court should re-determine the respondents' application for costs and in the exercise of its discretion, dismiss it. In the course of considering that question, I have decided that ground (i) has been made out as well. It asserts that the exercise of the discretion by the learned judge concerning the application for costs was unreasonable, plainly unjust and erroneous.

9 In view of those decisions, I have found it unnecessary to deal with grounds (b), (c), (d), (e), (g) and (h). They assert a failure to apply orthodox legal principles to the exercise of the discretion to make a costs order against the appellant; a failure to identify and make findings why the appellant caused or was responsible for the making of the costs order of 10 December 2007; a failure to make relevant and material findings of fact as to why the respondents sued only Mrs Brinckman and did not join the appellant as a party to the action; a taking into account of irrelevant matters when exercising the discretion to make a costs order against the appellant; an error in law by finding that Marsh Street was a public highway; and the making of an inconsistent finding that Marsh Street was a private street.

10 Ground (f) asserts that the learned judge misunderstood material facts and made findings against the appellant which were not supported by the facts or the application of correct legal principle. To a limited extent I have dealt with the ground, particularly when stating the facts found by the learned judge in his first judgment.

11 In these reasons, references to the council and the appellant are interchangeable and may include its predecessors, the Municipalities of Bellerive and Clarence. There is no need to distinguish between them.

Facts found by the learned judge in the judgment of 14 August 2007

12 Particularly for the purpose of dealing with the disqualification issue that is raised by ground (a), it is necessary to refer to facts found by the learned judge in his first judgment, after a trial in which the respondents and Mrs Brinckman participated as parties to the action, but not the appellant. The principal argument of the appellant for disqualification was based on its challenge to many of the findings of fact, including the ultimate one that Marsh Street was a public highway. The appellant's argument was that because of pre-judgment, the learned judge should have disqualified himself.

13 All of the land involved in the case is registered under the Land Titles Act 1980. With immaterial errors and omissions, I will use the attached plan to explain the land involved.

14 The land referred to as Marsh Street is shown as the Howlin portion of Marsh Street and the Brinckman portion of Marsh Street. Since 1978, Mrs Brinckman had owned the area of land shown as 5354 square metres, which I will refer to as the Brinckman land. It included the Brinckman portion of Marsh Street.

15 Since 1999, the respondents had owned what is shown as the Howlin land to the east of the Brinckman portion of Marsh Street. The title of the respondents to the Howlin land had the benefit of a right of carriage way over the Brinckman portion of Marsh Street, but not over the Howlin portion of Marsh Street.

16 In 2003, the respondents also became the owners of the Howlin portion of Marsh Street. Their title was burdened by a right of carriage way across it in favour of the Brinckman land only.

17 The titles of each of the owners of lots 1 to 5 and 7 to 9 that front onto the Brinckman portion of Marsh Street (and must not be confused with the lots fronting Spitfarm Road (effectively an extension of South Arm Road)), had the benefit of a right of carriage way over both the Brinckman portion of Marsh Street and the Howlin portion of Marsh Street. Those rights of way were intended to provide them with access to and from Spitfarm Road. However, because of some error, the title to the Howlin portion of Marsh Street was not burdened by those rights of way. The title of lot 6 that fronts onto the southern side of the Brinckman portion of Marsh Street, had the benefit of a right of carriage way over the Brinckman portion of Marsh Street only.[1]

18 The respondents wished to subdivide the Howlin land. If they were successful in establishing that both portions of Marsh Street were a public highway, they would have been able to create many lots of land. However, if they had only a right of way over the Brinckman portion of Marsh Street, their subdivision would have been limited to three lots.[2]

19 The respondents and Mrs Brinckman presented opposing arguments to the appellant, which was the local government authority, concerning whether both portions of Marsh Street were a public highway. The respondents maintained the existence of a public highway and Mrs Brinckman maintained the existence of rights of way only.

20 On legal advice, the appellant maintained a neutral position on the matter. It decided to leave the question to the Howlins and Mrs Brinckman to fight out in court. The respondents sued only Mrs Brinckman and did not seek to involve the appellant in the action. Once the appellant became aware of the action, it did not seek to be made a party to it, nor to be involved in any way.

21 The respondents' case was that both portions of Marsh Street had become a public highway by dedication of the right of passage to the public by the owners of the lands and acceptance of that by the public through use.

22 On 6 November 1944, a licensed surveyor wrote to the council clerk on behalf of T G Brown with a tracing of a proposed subdivision for approval. The learned trial judge found that the tracing contained five lots which corresponded to those numbered 1 to 5 on the northern side of the Brinckman portion of Marsh Street on the plan I have annexed. The tracing contained what was described as a "proposed roadway" on the southern boundary of those lots. It extended from what I have referred to as the Howlin land to Spitfarm Road, so that it included the areas of both the Howlin and Brinckman portions of Marsh Street, showing it all as one area and not as two areas. In other words, it was all of the area marked with the letters "F", "D", "C" and "E" on the attached plan.

23 On 9 November 1944, the council resolved "that plan be approved subject to roadway being constructed to satisfaction of Council by T G Brown". No finding was made by the learned judge concerning whether the roadway was ever constructed to the satisfaction of the council. There was no evidence that it was. At that time, T G Brown was not the owner of the Howlin portion of Marsh Street. However, it seems likely that he was in the course of acquiring it. He owned the remaining land in the proposed subdivision and he became the registered proprietor of the Howlin portion of Marsh Street on 8 July 1946.

24 In a way that was not explained by evidence, lots 6 to 9 on the southern side of the Brinckman portion of Marsh Street were added so that the eventual subdivision became one of nine lots. All of the nine lots were sold and transferred to their respective purchasers by T G Brown on various dates between 20 September 1945 and 4 February 1953. The learned judge inferred that the subdivision was properly approved by the council pursuant to what his Honour referred to as the presumption of regularity. However, there was no evidence that approval for the subdivision of those nine lots was sought or obtained from the council. That finding, and many others, is attacked by the appellant.

25 I have not overlooked that the respondents contend that the finding of the learned judge that the tracing plan approved by the council contained five lots was incorrect. They say that the true position is that the tracing plan was a different document than the one to which his Honour referred, and contained all of lots 1 to 9. I am not persuaded that they are right and will continue these reasons upon the basis that his Honour's finding about that was correct. For the purposes of my ultimate determination concerning the intention of T G Brown and the council at the time, it does not matter, for there is no doubt that T G Brown proceeded with a division by transfer of the land in nine lots, most of which were provided with private rights of carriage way to Spitfarm Road.

26 T G Brown also owned the Brinckman land (which included the Brinckman portion of Marsh Street). On 17 January 1951 he transferred it to V J Wheeler. The title was subject to a right of carriage way in favour of lots 1 to 9 over the Brinckman portion of Marsh Street. The learned judge found that by July 1954, the title to the Brinckman land had the benefit of a right of carriage way over the Howlin portion of Marsh Street to Spitfarm Road. As pointed out earlier, the title to the Howlin portion of Marsh Street was subject to that right of carriage way but it was not expressed to be subject to the rights of carriage way that the titles to lots 1 to 5 and 7 to 9 said they had over it. As I said, Mrs Brinckman became the owner of the Brinckman land in 1978.

27 In 1980, Gillies became the registered proprietor of both the Howlin land and the Howlin portion of Marsh Street, and Mrs Brinckman granted to Gillies a right of carriage way over the Brinckman portion of Marsh Street that benefited the Howlin land, giving Gillies access from the Howlin land to the Howlin portion of Marsh Street, which he also owned, and therefore, Spitfarm Road.

28 In 1999, the respondents bought from Gillies the Howlin land only, which had that right of carriage way over the Brinckman portion of Marsh Street, but did not have a right of way over the Howlin portion of Marsh Street. That was a problem that was eased when, in 2003, the respondents also purchased the Howlin portion (which was lot 6 on a plan of subdivision to which I have not referred). As noted earlier, the title to the Howlin portion was burdened by the right of carriage way for the benefit of the Brinckman land, but not by a right of way for the benefit of any other land.

29 The learned judge found that irrespective of what the titles stated, the owners and occupants of "all of the land" relied on both portions of Marsh Street for access, that "each" used the Howlin portion of Marsh Street "as of right" and that "each", including the owners of the Howlin land, used the Brinckman portion of Marsh Street "as of right". His Honour found that "each title holder would have acquired, at least, a prescriptive easement" over the Howlin portion of Marsh Street and Mrs Brinckman's land.[3]

30 The learned judge described the maintenance by the appellant of a neutral position in the dispute between the respondents and Mrs Brinckman as "regrettable" and continued: "It could have exercised its power to remedy the problem which had arisen as a result of the council's initial error. It ought to have accepted responsibility for that error and rectified or regularised the scheme long ago. It could still have done so at the time of this disputation between the plaintiffs and the defendant." Those findings must be understood as having been made without any opportunity being given to the appellant to rebut them.

31 No explanation was provided by his Honour concerning what he considered the appellant should, or even could, have done by way of rectification or regularisation. The power to which he was referring is not apparent.

32 Earlier, the learned judge identified what he considered the appellant's "initial error" was when he said "the error was made in assuming that lot 6 [the Howlin portion of Marsh Street] 'could readily form part of the scheme but its withholding from transfer by Barber, a matter overlooked', created the problem."[4]

33 The reference to Barber was to George Alfred Barber and Ethel Stephenson Barber who, in 1923, became the owners of over 30 acres of land that included all of the land to which this case relates. Their title extended to the foreshore of the River Derwent on the western side of what is now Spitfarm Road. In 1940, the Barbers transferred over 26 acres of that land to Barwick. It included what I have referred to as the Howlin land and the Brinckman land, including the Brinckman portion of Marsh Street and the land that now contains the lots on either side of that portion, but of course, those lands were not in separate titles at that time. The Barbers retained a strip of land that fronted the eastern side of Spitfarm Road. Its depth was equivalent to that of a suburban block of land. The Howlin portion of Marsh Street was a block of land that was created by a later subdivision of that strip of land.

34 The obvious inference is that the Barbers intended to keep that strip of land for a future division into lots fronting Spitfarm Road, as in fact occurred. The land they sold to Barwick, which was internal to that strip of land, was provided with two points of access to Spitfarm Road, one at the south (the Howlin land has that same access today) and one at the north. Those points of access were not mere rights of way. They were part of Barwick's fee simple title.

35 The learned judge perceived the error to have occurred in 1944, for he said: "In 1944, all concerned assumed that the solution was the provision of a public roadway. Oversight and the existence of lot 6 [the Howlin portion of Marsh Street] proved to be either a punishment of Tantalus or the Gordian Knot." The learned judge found that the proposal to the council in 1944 for the division of the land into five lots, the acceptance of the proposal by the council and the subsequent dealings with the land showed an intention by the owner to dedicate both portions of Marsh Street as a public street. The learned judge found that the dedication was accepted by the council, acting on behalf of the public, but then concluded that the dedication was "vitiated" by the fact that T G Brown had no title to the Howlin portion of Marsh Street.

36 With respect, I cannot agree that a public roadway was in the minds of those concerned. My conclusion is that it was not. His Honour thought that the council and T G Brown overlooked that T G Brown did not own the Howlin portion of Marsh Street in 1944. There was no evidence that they did so and it is an unlikely thing for them to have done. In evidence was a survey diagram dated 23 February 1945, which was prepared by T G Brown's surveyor and which recorded that he was in fact the owner of the Howlin portion of Marsh Street. A likely explanation is that Brown was in the course of acquiring it and the survey diagram anticipated his ownership. By 8 July 1946 he was the registered proprietor of that piece of land, the transfer from Ethel Stephenson Barber (who was described as a "Widow") having been dated 21 March 1946. Indeed, the respondents accept that the transfer was delayed by the death of George Alfred Barber.

37 As stated earlier, between 1945 and 1953 Brown sold all of lots 1 to 9 with titles that had been provided with private rights of carriage way only. That evidence establishes what he intended, and that it was not his intention that there be a public road. The creation of rights of carriage way for each lot is inconsistent with an intention to dedicate the land as a public highway.

38 There was evidence from a surveyor, John Medbury, to which the learned judge made no reference, that the term "Roadway" was used to denote what is now commonly called a right of way, and that the terms "Roadway" and "Right of Way" were used interchangeably by surveyors, conveyancers and officers of the Land Titles Office up until about the 1950s. Mr Medbury's opinion was that the annotation "proposed roadway" on the survey diagram of 23 February 1945 was a reference to a series of private rights of way to the proposed lots and not to a public thoroughfare. In the light of the transfers from T G Brown that followed with their accompanying private rights of carriage way, that is confirmed.

39 In support of Mr Medbury's opinion as to the practice at the relevant time is the title to the Howlin land in 1940 (Certificate of Title Volume 443 Folio 108) when it was owned by Barwick following transfer to him by the Barbers. Part of that land, being the narrow strip with a frontage of 5.77 metres onto Spitfarm Road on its southern boundary, was expressed to be subject to a right of carriage way in favour of a neighbouring owner, Jean Jeffrey Green, and subsequent owners of Green's land. The strip of land was described as "the roadway" and it was shown on the plan as "ROADWAY". It is without doubt that a private right of way was created and not a public roadway, for a roadway only 5.77 metres wide would not have been allowed as a public roadway.

40 The evidence to which I have referred leads convincingly to a conclusion that the learned judge's perception as to a public roadway being intended was wrong.

41 It should not be forgotten that approval by the council of the planned subdivision of five lots was made conditional on the roadway being constructed by T G Brown to the satisfaction of the council, and there was no evidence that occurred. In fact, my understanding of the evidence is that Marsh Street has not been constructed in the form of a public street.

42 It should not be forgotten either that given the findings of the learned judge, there was no evidence that the council considered or approved a proposal for the nine lot subdivision.

43 The creation of the rights of way by T G Brown was unsatisfactorily recorded because although they were recorded on the titles of the dominant tenements, most of them were omitted from the title of the servient tenement (the Howlin portion of Marsh Street). That was the fault of the subdivider and the Recorder of Titles, and not the council, who the learned judge appeared to blame. The Recorder should not have allowed it to happen. However, the resolution of those problems originally would not have led to the creation of a public highway, which is what the respondents wished to establish. All it would have done was resolve title discrepancies concerning private rights of way.

44 The learned judge determined that the discrepancies presented no obstacle, for he found "that usage has given rise to a prescriptive right, at least for the title holder of the interior blocks. The question becomes whether that right is private or public."

45 His Honour overlooked that the Real Property Act 1862, s40(b), excepted unrecorded rights of way from the indefeasibility of titles, so that the fact that the rights of way were not recorded on the title of the servient tenement did not prevent the registered proprietors of the dominant tenements from being able legally to enjoy their rights of way over it. Their rights of way were created by transfer and were recorded on their titles. They were not prescriptive rights of way. A prescriptive right is inconsistent with an express grant.

Findings as to the use that had been made of Marsh Street

46 The learned judge made a number of findings of fact concerning the use that had been made of Marsh Street. They included the following. A bus service from Hobart to Opossum Bay used the eastern section of Marsh Street as a turning and parking area. The street was also used by vehicle owners when visiting a nearby general store on Spitfarm Road. A school bus used the eastern section for parking, including overnight and on weekends, and the collection of students. The occupants of the lots fronting Marsh Street used it without restriction. Boat owners used Marsh Street to park vehicles and boat trailers. Purchasers of vegetables from a market gardener in Marsh Street used the street. A water carrier used it to deliver water to houses in the adjoining area. In 1975, the Metropolitan Transport Trust commenced a commuter bus service to Opossum Bay and used Marsh Street as a terminus. In 1980, a fence at the eastern end of the Brinkman portion of Marsh Street was altered to permit vehicular access to the Howlin land. Cattle being agisted were driven to and from the Howlin land along Marsh Street. Mail delivery to the houses in Marsh Street commenced in 2000, and rubbish removal from them commenced in 2001. Street lighting was installed in about 1987. The name of Marsh Street was placed on street signs. The appellant included the area on its maintenance programs by mowing its grass areas and verges, and by gravel and limited road maintenance over a long period of time for the western section of the area and, more recently, to at least the mid to eastern sections. Residents had not been required to contribute to the cost of erection or maintenance of power or light facilities, nor of servicing pipes and cables along Marsh Street. Neither the respondents, nor Mrs Brinkman, had been required to pay rates or land tax with respect to the street. In 1983, the Nomenclature Board recognised the name of Marsh Street, which is currently shown on maps of the area that are publicly available.

47 The learned judge accepted that residents provided some of the gravel at varying times and that there had been differences between the state and use of the eastern and western ends of the street.

48 He also accepted that the Howlin portion of Marsh Street had been subject to more use and would be more likely to be regarded as a public street. However, he considered that in substance, there was little reason to distinguish between the two portions. There had been no denial of access to any person or institution.

49 The learned judge referred to a number of common law principles he found to have been established by authorities. His statement of them included that public acceptance of an intention to dedicate by an owner might be shown by subsequent events if "user" and "dedication" are connected (Newington v Windeyer [1985] 3 NSWLR 555 per McHugh J); more must be shown than occasional harmless use over country land (Headlam v Cassimaty [1952] Tas SR 47); there must be real and repeated use extending beyond occasional or casual use (Owen v O'Connor [1964] NSWR 1312); where there has been a clear manifestation of an intention and offer to dedicate the land as a public road, no great amount of public use is necessary to make the dedication complete (Lynch v Eaves (Max) Pty Ltd (1996) 91 LGERA 166); dedication by usage is rarely a product of a formal act but arises through events of permission, conduct, and uncontested public use over a lengthy period (Palmisano v Hawse [2003] NSWSC 566, City of Launceston v Bradford 2/1990); where land is subdivided and roads are left in the subdivision, it seems more realistic to treat such roads as part of a general roadway system open to all, unless access is prevented by fencing or other means (Permanent Trustee Co Ltd of NSW v Council of the Municipality of Campbelltown [1960] HCA 62; (1960) 105 CLR 401 at 415); and evidence that only portion of a thoroughfare was utilised does not prevent the whole of the land being accepted as a public highway (Nicol v Beaumont (1883) 53 LJ Ch 853).

50 Applying common law principles, the learned judge concluded that "Marsh Street is a public street or road through the process of dedication and acceptance as evidenced by intention and usage. It is a public street or road through usage akin to a prescriptive right."

51 For those reasons, his Honour declared that Marsh Street, comprising both the Howlin portion and the Brinkman portion, was a public highway.

The application for costs against Mrs Brinckman

52 Consequent upon that successful outcome, the respondents applied for an order that Mrs Brinckman pay their costs of the action. The learned judge rejected the application and ordered that each party pay his or her own costs.

53 His Honour was influenced by circumstances that included that the respondents brought the action for personal and commercial gain to the detriment of Mrs Brinckman's private rights; Mrs Brinckman conducted her case in an appropriate manner and did not unreasonably prolong the hearing; the action concerned whether private land, belonging to Mrs Brinckman, had become a public highway and, the learned judge said, could not have concluded in a consent order declaring the land to be a public highway; and the outcome of the action was that Mrs Brinckman had been dispossessed of her land[5].

54 The learned judge thought that in the circumstances, there should not be placed on Mrs Brinckman the additional burden of the respondents' costs.

55 The question of costs was argued before the learned judge by the respective counsel for the respondents and Mrs Brinckman. After counsel for the respondents had articulated the order they were seeking at the commencement of his argument, the learned judge interposed with the following question: "Nobody wants to see if we can get the council to pay the costs of everyone?"

56 With the benefit of hindsight, the use of "we" was regrettable, for it made his Honour's question open to an interpretation that he was positively encouraging the making of an application that the appellant pay the costs of the parties, and indicating that he was inclined to favourably consider it if it was made.

57 However, counsel for the appellant did not rely on the asking of that question when presenting argument to the learned judge that he should disqualify himself. For that reason, I agree with the submission of the respondents that it should be ignored by this Court when determining whether his Honour should have done so.

The failure of the appellant to seek to intervene in the action between the respondents and Mrs Brinckman

58 In his reasons for judgment of 10 December 2007, in which he determined the question of costs as between the respondents and Mrs Brinckman, his Honour opened with the following comments:

"The action named Mrs Brinckman as the sole defendant. The plaintiffs did not seek to name as parties the Attorney-General or any public authority. During the course of pre-trial procedures, identified interested parties were notified of the existence of the proceedings but none sought to be joined as parties or to take part in a more limited way in the hearing. Significantly the Council of the Municipality of Clarence, the relevant local authority, declined an opportunity to be heard on the matter."

59 It is not apparent what his Honour meant by his finding that the appellant declined an opportunity to be heard on the trial of the action between the respondents and Mrs Brinckman. I am not aware of evidence that it made a positive decision not to be heard, although it is undoubted that it did not seek to do so. What the learned judge thought the significance was to the application he was hearing is not clear either, but that passage in his judgment seems to reflect a misunderstanding concerning the notice that was given to the appellant of the action between the respondents and Mrs Brinckman.

60 On 24 October 2005, prior to the commencement of the action, the respondents wrote to the appellant's manager. They advised that they had attempted to mediate the issue of the dedication of Marsh Street with Mrs Brinckman but had rejected terms proposed by her. They continued:

"We stress that this is a private issue between Mrs Brinckman and ourselves. Accordingly, we have this day instructed Mr Don Armstrong to act on the advice of our senior counsel, Mr Stephen Estcourt, to proceed with a writ against Mrs Brinckman to have the issue of dedication of Marsh Street as a public road decided by the Supreme Court." (My italics.)

61 The action against Mrs Brinckman was commenced on 2 December 2005. No formal notice of it was given to the appellant during the course of pre-trial procedures. The only evidence of notice was a lengthy letter sent by the respondents to the appellant's mayor on 11 December 2005. It dealt with a number of matters to which I need not refer. Enclosed with it was a copy of the writ they had issued against Mrs Brinckman. They made no suggestion that the appellant might wish to intervene or be heard on the hearing of the action. At one point they commented: "We can still, on consent or capitulation by Mrs Brinckman, serve a writ on Council."

62 On 2 June 2006, Mr Howlin wrote to the appellant's manager and among other things said: "We wish to categorically state that no such writ has been served on Council on our behalf. We have only issued Supreme Court Action 523 of 2005, as a private action against Mrs Margaret Brickman." He also made the point that "the defence of a private action ... is not the responsibility of Council". (My italics.)

63 It is open to infer from that correspondence that the respondents were urging the appellant not to attempt to take any part in the action.

The appellant's application that the learned judge should disqualify himself from hearing the respondents' application for costs against it because of apprehended bias

64 The first ground of appeal is that the learned judge erred in law in failing to disqualify himself from hearing the respondents' application against the appellant for the costs of the action.

65 At the outset of the hearing, the appellant's counsel submitted that the learned judge should disqualify himself from hearing the application because of a reasonable apprehension of bias. In summary, counsel argued that the appellant wished to challenge many of the findings of fact and principles of law that were applied by the learned judge when he determined the action between the respondents and Mrs Brinckman, and it also wished to challenge the decision of the learned judge to declare that Marsh Street was a public highway. The appellant's argument was that a fair minded observer might entertain a reasonable apprehension of bias by reason of pre-judgment by the learned judge of a great number of issues the appellant intended to raise.

66 Counsel referred to many of the findings of fact and conclusions that were reached by his Honour in his judgment which would be challenged as erroneous. I have referred to some of them which I have determined to be erroneous. I will not refer to them all because there is no need to do so. Some concerned the history of the lands, particularly in the 1940s and 1950s.

67 Counsel said that the appellant did not challenge any of the findings of fact as to the use that had been made of Marsh Street over the years. However, it challenged the conclusion that those findings justified the making of a declaration that Marsh Street had become a public highway.

68 It was the appellant's case that contrary to the findings of the learned judge, in about 1944 and 1945 it was not the intention of T G Brown or the council that Marsh Street would be a public street. Instead, all T G Brown intended was the division of some of his land into lots which would have private rights of way to Spitfarm Road.

69 It was also its case that the nine lots on either side of Marsh Street were created by T G Brown by transfers into separate titles, under a power to do so in the Real Property Act 1862, without the lodgement with, and approval of, a plan of subdivision by the council that would have been required under the Towns Act 1934, had the land been in a town, which it was not at that time. It was a matter for the Recorder of Titles to determine whether T G Brown's division of his land was in accordance with the law and should be permitted, and not the responsibility of the council. It was argued that the Real Property Act enabled a registered proprietor of land to have an easement, such as a right-of-way, registered by the Recorder at the time when a memorandum of transfer of that land by the registered proprietor was lodged for registration. It was the Recorder's responsibility, and not the duty of the local council, to require that there was access to registered land from a public road.

70 It was the appellant's case that when on 6 November 1944 T G Brown's surveyor sent to the council a tracing of the proposed five lot subdivision for approval, and the council purported to give that approval on 9 November 1944, subject to the road being constructed to the satisfaction of the council by T G Brown, no legislation required that approval, and it had no legal effect, the land not being in a town. It was also the appellant's case that in any event, the road was never constructed to the satisfaction of the council and the subdivision that proceeded was for nine residential lots, not five as proposed and approved by the council. As I explained, the appellant's case was that approval of the subdivision was a matter that concerned the Recorder of Titles and not the council.

71 As mentioned earlier, in his original judgment the learned judge criticised the neutral position taken by the appellant in the action between the respondents and Mrs Brinckman as regrettable, and found that the appellant "could have exercised its power to remedy the problem which had arisen as a result of the council's initial error" and "it ought to have accepted responsibility for that error and rectified or regularised the scheme long ago", but his Honour did not identify the act of rectification or regularisation he was contemplating. The appellant's case was that all aspects of his Honour's statements were erroneous and based on incorrect assumptions. In particular, its case was that statute prevented it from giving the respondents what they wanted by accepting a dedication of the Brinckman portion of Marsh Street without the formal consent of Mrs Brinckman, who at all material times made it clear that she did not consent.

72 The appellant's argument continued that no owner of either portion of Marsh Street, subsequent to T G Brown, dedicated the land as a public street, the council did not accept such a dedication, and the law would not have permitted it anyway.

73 On 24 September 1947, the land became part of a town for the purposes of the Towns Act, consequent upon a special resolution of the council. It was the appellant's case that thereafter, until 1 January 1964, neither portion of Marsh Street could be constructed, opened or used as a highway intended for the use of the public generally without compliance with the provisions of the Towns Act, s48. That required a scale plan showing the new street, its width and direction, and the proposed provision for its drainage, to be submitted to, and approved by, the council. It was the appellant's case that during that time a dedication pursuant to merely common law principles that was based on usage was not possible, without compliance with those formalities.

74 Similarly, it was the appellant's case that from the commencement of the Local Government (Highways) Act 1982, s7, on 1 September 1983 until the present day, it has not been possible for there to be a mere common law dedication of the land as a highway other than in accordance with formalities required by the section, including approval of the dedication by the council under its corporate seal. No such formalities occurred on the evidence in this case.

75 The learned judge did not address those statutory requirements in his original judgment.[6]

76 It was argued for the appellant that because of those statutory provisions there had been a need, not satisfied in the original judgment, to be precise when making findings of usage and reaching a conclusion that there had been a common law dedication. It was pointed out that the learned judge made findings concerning the installation of public services (for example, mail delivery in 2000, rubbish removal in 2001, street lighting in 1987) none of which, on the appellant's case, could have tipped the scales in favour of a common law dedication without compliance with the requirements of the Local Government (Highways) Act, s7, for they all occurred after 1 September 1983.

77 In summary, counsel referred the learned judge to the following principles when submitting that the learned judge should disqualify himself.

78 Where, in the absence of any suggestion of actual bias, a question arises as to the impartiality of a judge, as it did here, the governing principle is that, subject to qualifications relating to waiver or necessity, which did not arise here, 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 questions the judge is required to decide. It is convenient to refer to that principle as the apprehension of bias principle. Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 at 344 - 345.

79 The question whether a judge who is confident of his or her own ability to determine the case fairly and impartially on the evidence, should refrain from sitting because of a suggestion that the view which he or she has expressed in a judgment in some previous case may result in an appearance of pre-judgment can be a difficult one involving matters of degree, and particular circumstances may strike different minds in different ways. Livesey v New South Wales Bar Association [1983] HCA 17; (1983) 151 CLR 288 at 294.

80 Nevertheless, 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 pre-judgment 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. Livesey at 300.

81 However, the bare fact that a judicial officer has earlier expressed an opinion on questions of law will seldom, if ever, warrant a conclusion of appearance of bias, no matter how important that opinion may have been to the disposition of the past case, or how important it may be to the outcome of the instant case. Helljay Investments Pty Ltd v Deputy Commissioner of Taxation (Cth) [1999] HCA 56; (1999) 74 ALJR 68, 166 ALR 302, at par[12].

82 Counsel for the appellant also referred to the general principle upon the hearing of a successful appeal in judicial and administrative proceedings when the proceedings are set aside and the matter remitted to be heard and decided again, that justice is in general better to be seen to be done if the court or the tribunal is reconstituted for the purposes of the rehearing. Northern NSW FM Pty Ltd v Australian Broadcasting Tribunal (1990) 26 FCR 39. That principle had particular relevance here, for the appellant sought to have the learned judge conduct a rehearing concerning many of the issues of fact and law that had arisen in the action between the respondents and Mrs Brinckman. Counsel explained to the learned judge that the appellant would be asking him to make distinctly different findings of fact about the process and the involvement of the council than the findings made originally. In particular, counsel referred to the findings concerning the intention and role of the council and the intention of T G Brown, and the finding that the council was at fault and did nothing to remedy its initial error.

83 The respondents opposed the application that the learned judge disqualify himself. They submitted that an application for costs against a non-party should ordinarily be decided by the trial judge, and the fact that the trial judge, in the course of judgment in the action, may have expressed views on the conduct of the non-party, constitutes neither bias nor the appearance of bias. Bahai v Rashidian [1985] 3 All ER 385 at 388, 391, [1985] 1 WLR 1337 at 1342, 1346; Symphony Group plc v Hodgson [1994] QB 179 at 193, [1993] 3 All ER 143 at 153.

84 Counsel for the appellant responded by pointing out that the law of the United Kingdom on disqualification for apprehended bias was different than the law of this country. For example, it did not involve an assessment of what a fair minded observer might think. See R v Gough [1993] UKHL 1; [1993] AC 646 at 668, 670; Locabail (UK) Ltd v Bayfield Properties Ltd [1999] EWCA Civ 3004; [2000] QB 451 at 475 - 477. Cf Johnson v Johnson (2000) 210 CLR 488 at pars11 - 13.

A consideration of the reasons of the learned judge for rejecting the application that he disqualify himself

85 The learned judge rejected the application for reasons to be published later. He then heard the application for costs on its merits. In his judgment of 26 March 2009, in which he determined that the appellant should pay the respondents' costs of the action from 11 December 2005, he stated his reasons for refusing to disqualify himself.

86 At the outset of those reasons, the learned judge adopted the proposition that it is preferable for the original judicial officer to hear and determine the application that a non-party pay costs. For that proposition, his Honour referred to Symphony Group plc v Hodgson (supra) and Bischof v Adams [1992] 2 VR 198.[7]

87 The learned judge then referred to Ebner v Official Trustee (supra) as authority for the proposition "that there is no automatic need for disqualification where there has been a failure to disclose an indirect interest in outcome simply because there has been a claim of procedural unfairness", and commented that "here obiter comments made in the primary judgment ought not show an interest in the outcome of these proceedings". With respect, that comment demonstrated a misunderstanding of the authority of Ebner, for it concerned a possible financial interest of a trial judge in the outcome of the case he was hearing. An interest of that kind was not in question here. It was the pre-judgment of issues by the learned judge that was central to the application for disqualification.

88 The learned judge cited R v Burrell [2007] NSWCCA 79; (2007) 175 A Crim R 21 and on appeal from it, Burrell v R [2008] HCA 34; (2008) 82 ALJR 1221, as authorities for the proposition that it is not uncommon for courts to revisit a ruling or factual determination without creating a basis for the appearance of bias. He quoted pars10, 27 and 28 of the joint judgment in the High Court of Gummow ACJ, Hayne, Heydon, Crennan and Kiefel JJ and said that "the question is not the revisiting of error, but whether the parties are afforded the opportunity to make submissions before the perfecting of the order". However, nothing said by the High Court supported that as a proposition relevant to the issue of apprehended bias, for that was not an issue it considered at all. It was only concerned with the question whether a court could lawfully revisit a decision after formally recording its order.

89 Nevertheless, the New South Wales Court of Criminal Appeal in R v Burrell did consider a submission of apprehended bias. The facts were that after disposing of an appeal and making and recording its final orders, the court realised that it had misunderstood what some of the evidence had been at first instance. One of the parties submitted that if there was to be a reconsideration of the appeal, it should be conducted by a differently constituted court so as to avoid any apprehended bias based on pre-judgment of issues. The parties were in general agreement about the matters which were not in evidence and the court concluded that the ordinary fair minded person, properly informed, would not reasonably apprehend that the court would bring other than an impartial mind to a reconsideration of the appeal based on the correct evidence.

90 That was a decision based on the circumstances that arose in that case and provided limited assistance here, where the circumstances did not involve a misunderstanding concerning evidence. In this case major issues concerned whether the learned judge's original findings and order, based on the evidence, were correct. It followed that much of the hearing to be conducted by him was in the nature of an appeal from himself.

91 McClellan CJ, with whom the other members of the court agreed, had this to say at par[11]:

"In many of the cases to which I later refer, where an application to reopen an appeal has been made it has been determined by the Court as constituted when the original appeal was heard. I am not aware that it has ever been suggested that the Court as so constituted cannot entertain the application. There are many occasions upon which a judge, either at trial or on an appeal, may be asked to reconsider a ruling which he or she has made, a factual determination or a decision upon a matter of law. Matters are routinely returned from an appellate court to the trial judge to be determined according to law. The ordinary fair minded person understands that in the exercise of the judicial function it will be necessary, from time to time, for a judge to reconsider matters which have previously been considered or which may have been pronounced upon by that particular judge. Such a person, properly informed, would not in my opinion reasonably apprehend that the judge or judges would bring other than an impartial mind to the determination of the matter: (R v Reid [2004] NSWCCA 301, (2004) 148 A Crim R 425 at 431[26]; R v Kearns [2003] NSWCCA 367.)"

92 Under a heading "Errors of law", the learned judge referred to the argument the appellant intended to present that his Honour made several errors of law and principle and in particular, failed to consider and apply statutes that may have prevented both portions of Marsh Street becoming a public highway, notwithstanding the findings of fact that were made concerning usage.

93 His Honour said that he was "prepared at the time of the disqualification request to reconsider any determination or application of law on the basis of material and argument put by the parties in these costs proceedings and no argument of estoppel by judgment arises as against the council." He concluded that aspect of his consideration by saying: "The claimed errors, accepted on their face at the time of the disqualification request, did not persuade me to accede to that request."

94 The statement that his Honour was prepared to reconsider any determination or application of law on the basis of material put before him by the appellant and the respondents was a statement of what his duty as a judge required of him. If he had not been prepared to comply with that duty, actual bias might have been raised. Counsel for the appellant submitted that it was not a relevant inquiry when dealing with a submission of apprehended bias, because the test concerns what a fair minded lay observer might have reasonably apprehended and not what the judge believed he was capable of achieving. There is some merit in the submission, but nevertheless the undoubted duty of the judge was a relevant consideration for it was something that a properly informed lay observer would be expected to take into account.

95 Next, under a heading "Mistakes of fact", the learned judge dealt separately with the appellant's intention to challenge many of his Honour's findings of fact that were made when he determined the action between the respondents and Mrs Brinckman. He said that he adhered to what he described as his "outline of historic events", adding that if he was wrong, the impugned findings of fact had little or no import in his determination. Once again, his Honour referred to the proposition that an application for costs by a non-party should normally be determined by the trial judge.

96 He accepted as a valid principle what was stated in Bahai v Rashidian (supra) and Symphony Group plc v Hodgson (supra), that the fact that a trial judge in the course of judgment in an action, may have expressed views on the conduct of the non-party, constitutes neither bias nor the appearance of bias. He also referred to the statement of Balcombe LJ in Bahai at 391 [1346], that "bias is the antithesis of the proper exercise of a judicial function".

97 The learned judge concluded his consideration of the argument based on challenges to his findings of fact by announcing: "I saw no reason to disqualify myself from hearing the application on this claimed basis for the disqualification application."

98 With respect, the learned judge erred when he dismissed the impugned findings of fact as having little or no import in his determination. His implicit finding, which I have concluded was erroneous, that the council erred in 1944 by not ensuring that both portions of Marsh Street became a public roadway at that time, had great import, for it was a central plank in his Honour's criticism of the appellant and its decision to take a neutral position between the respondents and Mrs Brinckman. Associated with it was another significant finding, which I have also concluded was erroneous, that T G Brown intended at the time of the division of his land in 1944 and 1945, that both portions of Marsh Street would become a public street.

99 Finally, under a heading "Obiter observations", the learned judge separately considered the intended challenge by the appellant of what his Honour referred to as "a number of observations concerning the role of the council in the varying phases of disputation and the problems which had arisen subsequent to the 1944 proposal survey and subdivision considered by the 'Bellerive Council'." In particular, he referred to his findings that the maintenance by the appellant of a neutral position in the proceedings was regrettable; that the appellant "could have exercised its power to remedy the problem which had arisen as a result of the council's initial error"; that the appellant "ought to have accepted responsibility for that error and rectified or regularised the scheme long ago"; and that "it could still have done so at the time of this disputation between the plaintiffs and the defendant".

100 His Honour described his statement that the appellant "ought to have accepted responsibility for that error and rectified or regularised the scheme long ago" as unnecessary to his decision on the trial of the action and ought not be regarded as a predisposition towards the outcome he would need to determine on the material advanced on the hearing of the application for costs. The learned judge described the basis of that application as the dealings between the appellant and the respondents, rather than a state of affairs concerning the original parties, who were the respondents and Mrs Brinckman. The respondents supported what was said by the learned judge about those matters in their argument to this Court.

101 His Honour held that "the impugned comments do not outweigh the desirability of the original judge aware of the history of the land and the relevant issues determining a subsequent costs application and ought not require disqualification". He emphasised that he was required to determine the application for costs on the material presented by the parties to it and commented that if that material disclosed differences with the cases argued by the respondents and Mrs Brinckman and showed original error, then he should act on the new material and, if necessary, reach a different conclusion.

102 The learned judge erred when he gave separate consideration to each of the three main bases upon which the appellant relied for disqualification and rejected each of the three as not persuading him to accede to the application. What he should have done instead was consider all three bases in combination with each other and decide whether their collective impact might have caused a fair minded lay observer to reasonably apprehend that his Honour might not bring an impartial mind to the resolution of the question he had to decide.

103 To this Court, the respondents submitted that on the hearing of the application for costs, the appellant was not entitled to challenge the legal and factual findings of the learned judge in the action between the respondents and Mrs Brickman or the making of the order declaring that Marsh Street was a public highway. They argued that if the appellant wished to challenge those matters, it should have done so by appealing against that order to this Court under the Supreme Court Civil Procedure Act 1932, s42(1)(b), which permits the institution of an appeal, with the leave of the Full Court, by a non-party who is aggrieved or whose interests are affected by an order.

104 It is by no means certain that a Full Court would have granted leave to appeal to the appellant, but in any event, there is no merit in the submission. The declaration that Marsh Street is a public highway is binding only between the respondents and Mrs Brickman because they were the only parties to the action when it was made. No one else is bound by it or by any of the findings made by the learned judge in the course of reaching his decision. Brydges v Brydges and Wood [1909] P 187 at 191; Financial Wisdom Ltd v Newman [2005] VSCA 110; (2005) 12 VR 79 at par[49]. Upon the respondents involving the appellant in the case by applying for the order for costs against it, the appellant was entitled to argue, as against the respondents, that the findings and the outcome of the action between the respondents and Mrs Brinckman were erroneous. It was also entitled to resist evidence originally received and to call evidence. Bischof v Adams (supra) at 205.

105 Counsel for the appellant informed this Court that the appellant was content to abide by the outcome of the action between the respondents and Mrs Brinckman until the respondents sought the order for costs against it, when it made a decision to challenge much of what had gone before. The appellant was entitled to adopt that course.

Should the learned judge have disqualified himself?

106 The learned judge should have disqualified himself from hearing the application for costs for reasons I will explain.

107 I refer first to a number of principles that apply. The governing principle is that when considering the question of apprehended bias, the learned judge should have disqualified himself if a fair minded lay observer might reasonably have apprehended that his Honour might not bring an impartial mind to the resolution of the questions he was required to decide. R v Watson; Ex parte Armstrong [1976] HCA 39; (1976) 136 CLR 248 at 262, 263; Ebner v Official Trustee in Bankruptcy (supra) at 344 - 345; Johnson v Johnson (supra) at par[11]; Livesey v New South Wales Bar Association (supra) at 293 - 294.

108 It was made clear in Johnson v Johnson at par[12] that the test is different to the one applied in the United Kingdom. It gives due recognition to the fundamental principle that justice must both be done, and be seen to be done. It is based upon the need for public confidence in the administration of justice. If fair minded people reasonably apprehend or suspect that the tribunal has pre-judged the case, they cannot have confidence in the decision. The test is objective and is founded on the need for public confidence in the judiciary.

109 Two things in particular need to be remembered. The observer is taken to be reasonable, and the person being observed is a professional judge of whom training, tradition and oath require the discarding of the irrelevant, the immaterial, and the prejudicial. While a fictional observer is not to be assumed to have a detailed knowledge of the law, or of the character or ability of the particular judge, the reasonableness of any suggested apprehension of bias is to be considered in the context of ordinary judicial practice. Johnson v Johnson at pars[12] and [13].

110 The reasonable apprehension of bias that is asserted here is based on the pre-judgment of legal and factual issues by the learned judge at the trial between the respondents and Mrs Brinckman. That pre-judgment extends to the ultimate issue concerning whether Marsh Street was a public highway. The appellant intended to seek judicial determinations that were contrary to many made by the learned judge before, including the making of the declaratory order. If successful, the appellant would have demonstrated that the original judgment of the learned judge was erroneous in many respects and that the declaratory order should not have been made. It would have followed that the order that the respondents and Mrs Brinckman pay their own costs would also have been shown to be erroneous. The learned judge would have had to admit to many errors. As I said earlier, much of the hearing that was facing the learned judge was in the nature of an appeal from himself.

111 The extent to which pre-judgment of issues may be the basis for disqualification has been considered in a number of cases. It was made clear by Mason J (as he then was) in Re JRL; ex parte CJL [1986] HCA 39; (1986) 161 CLR 342 at 352 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 or she 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 or she is likely to decide issues in a particular case adversely to one of the parties. But that does not mean either that he or she will approach the issues other than with an impartial and unprejudiced mind, or that his or her previous decisions provide an acceptable basis for inferring that there is a reasonable apprehension that he or she will approach the issues in that way. Mason J said that in cases of that kind, disqualification is only made out by showing that there is a reasonable apprehension of bias by reason of pre-judgment and this must be firmly established, referring to R v Commonwealth Conciliation and Arbitration Commission; ex parte Angliss Group (1969) 122 CLR 546 at 553 - 554, R v Watson; Ex parte Armstrong (supra) at 258 - 263 and Re Lusink; ex parte Shaw (1980) 55 ALJR 12 at 14. His Honour urged caution against acceding too readily to suggestions of an appearance of bias.

112 In Helljay Investments Pty Ltd v Deputy Commissioner of Taxation (supra) at par[11], Hayne J summarised the authority of what was said by Mason J by saying that what must be demonstrated to the requisite degree is the appearance of pre-judgment, not simply that a particular outcome of the litigation is likely or unlikely. At par[12] he made the point that the bare fact that earlier a judicial officer expressed an opinion on questions of law will seldom, if ever, warrant a conclusion of appearance of bias, no matter how important that opinion may have been to the disposition of the past case, or how important it may be to the outcome of the instant case. That "the reasonable onlooker might have thought that the appellants would not have much chance of succeeding ... is not the same thing as feeling or believing that they would not get a proper hearing". Ewart v Lonie [1972] VicRp 32; [1972] VR 308 at 311 - 312.

113 Nevertheless, the following statement of Mason, Murphy, Brennan, Deane and Dawson JJ in Livesey v New South Wales Bar Association (supra) at 300 is highly persuasive in the circumstances of this case:

"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."

114 Notwithstanding the undoubted merit in the respondents' submission that an application for costs against a non-party should ordinarily be decided by the trial judge, I find this to be an exceptional case because of the extent to which his Honour was to be faced with having to judge the correctness of so much of what he had judged before. The hearing was not to be a mere adjunct to the trial of the action. To a substantial extent a rehearing of issues was required, and a fair minded lay observer would have had sound bases for a reasonable apprehension that the learned judge might not bring an impartial mind to the resolution of the questions he was required to decide. The issues of fact and value judgments together with issues of law that had to be reconsidered were considerable, in substance and number, and required the attention of a judicial officer who was unfettered by the findings and determinations he had made before.

115 For those reasons, the learned judge should have disqualified himself from hearing the application. It follows that the first ground of appeal is successful and that this Court should determine the application for costs itself.

Should an order for costs be made against the appellant?

116 The Supreme Court has power to make an order that a non-party pay the costs of proceedings. Supreme Court Civil Procedure Act, s12(2). Knight v FP Special Assets Ltd [1992] HCA 28; (1992) 174 CLR 178. It has a discretion whether to do so.

117 The usual order in an action is that the loser should pay the winner's costs. For that reason, the order made between the respondents and Mrs Brinckman was an unusual one, and it is arguable that it should not have been made, and that costs should have followed the outcome of the action between the plaintiffs and the defendant. However, that does not have to be determined.

118 A useful summary of the principles that are applicable to the exercise of the discretion against a non-party is to be found in Professor Dal Pont's Law of Costs, 2nd ed, at pars[22.16] - [22.65]. A non-party order will only be made where the interests of justice justify a departure from what is a general rule that only the parties to the proceedings are to be subject to costs orders. Naomi Marble and Granite Pty Ltd v FAI General Insurance Co Ltd (No 2) [1998] QSC 18; [1999] 1 Qd R 518 at 544. It must be shown to be just and equitable that the order be made.

119 Judicial statements have cautioned against the exercise of the power and suggest that it should only be exercised sparingly in exceptional circumstances making it reasonable and just. See, for example, Symphony Group plc v Hodgson (supra) at 193 (153); Arundel Chiropractic Centre Pty Ltd v Deputy Commissioner of Taxation (2001) 179 ALR 406 at 413; Knight v FP Special Assets Ltd (supra) at 203; O'Neill v De Leo [1993] TASSC 162; (1993) 2 Tas R 225 at 230; Re JJT [1998] HCA 44; (1998) 195 CLR 184 at 189.

120 Professor Dal Pont at par [22.19] points out that central to the exercise of the discretion is the non-party's connection with the proceedings and the incurrence of the costs. This involves a two-pronged inquiry, namely the connection between the non-party and the proceedings, and the causal connection between the non-party and the costs. Bischof v Adams (supra) at 205; National Mutual Life Association of Australasia Ltd v Chris Poulson Insurance Agencies Pty Ltd (1998) 8 Tas R 123 at 135; Wentworth v Wentworth [1999] NSWSC 317; (1999) 46 NSWLR 300 at 310; Re Bonlac Foods Ltd (2001) 37 ACSR 457 at 463.

121 The learned judge held that the appropriate test for this case was that of connection and capacity to initiate or control the processes of resolution or outcome of the matter giving rise to the litigation, citing as authorities for that test Marriage of Millea and Duke (1994) 122 FLR 449; Collins and the Victorian Legal Aid Commission (1984) FLC 91-508 and Kelly v South Health Authority [1997] 3 All ER 274.

122 Such a test was not stated in Millea. At 453, Murray J was of the view that in the circumstances of the case she was considering, before she was to make an order for costs against a non-party, there were at least three prerequisites. The first was a sufficient connection between the non-party and the proceedings to provide a proper basis upon which to award costs against it. She restated the test, in summary form, as that the non-party must be the "real party" to, or the "real instigator" of, the litigation. The second prerequisite was a causal connection between the non-party and the incurring of costs, and the third was that the interests of justice and reason demanded that such an order be made.

123 The reference made by the learned judge to Collins, was to a judgment at first instance in the Family Court, in which it was determined that the Victorian Legal Aid Commission should pay the costs of the successful husband in family law proceedings, because it had made an unwarranted grant of legal aid. The Full Court overturned the non-party costs order in In the Marriage of Collins (1985) 75 FLR 84. There was no mention in its judgment of the test upon which the learned judge relied in this case.

124 In Kelly v South Manchester Health Authority (supra) it was found that an adjournment of an action was caused by the failures of a solicitor at the office of the Legal Aid Board and of the plaintiff's solicitor to authorise and obtain a report from an expert witness in time for a trial. An order was made that the Legal Aid Board should pay the client's costs of the adjournment. Thomas J cited Symphony Group plc v Hodgson (supra) at 191 - 194 (151 - 154), to which I will refer shortly, and held that the circumstances of the case were wholly exceptional and that an order for non-party costs should be made. He found jurisdiction based on the fact that the relationship of the board to the litigation was very close, and its role in its financing and the effects of its actions upon the efficiency and speed of the litigation were such as to make it an exceptional case.

125 A number of relevant propositions can be extracted from the judgment in Symphony Group plc v Hodgson. Courts have made orders for costs against a non-party where the non-party had some management of the action, or maintained or financed the action, or caused the action, or where the non-party was a party to a closely related action which had been heard at the same time but not consolidated. The categories of cases in which such orders may be made are neither rigid nor closed. The discretion to award costs is a very wide one and there are no immutable rules. Material considerations to be taken into account include, but are not limited to:

• an order for the payment of costs by a non-party will always be exceptional and the judge should treat any application for such an order with considerable caution;

• it will be even more exceptional for an order for the payment of costs to be made against a non-party where the applicant has a cause of action against the non-party and could have joined him as a party to the original proceedings;

• even if the applicant can provide a good reason for not joining the non-party against whom he has a valid cause of action, he should warn the non-party at the earliest opportunity of the possibility that he may seek to apply for costs against him;

• the judge should be alert to the possibility that an application against a non-party is motivated by resentment of an inability to obtain an effective order for costs.

126 The respondents could have joined the appellant as a party to the action against Mrs Brinckman, but did not do so. The decision may have been based on legal advice. Whether that was the case is immaterial for present purposes. What is material is that they did not join the appellant, and at no time did they warn the appellant that they might seek an order for costs against it. It must have been in their minds, and it certainly should have been, that by failing to join the appellant the question of the costs of the action would be resolved between them and Mrs Brinckman only.

127 Further, the respondents sought positively to discourage the appellant from seeking to be joined or to be heard. As I noted earlier, on 24 October 2005 they advised the appellant that they had instructed a solicitor to issue the writ against Mrs Brinckman only. When providing that advice, they stressed that the issue concerning Marsh Street was a private one between them and Mrs Brinckman. Subsequently, on 2 June 2006, nearly 10 months before the trial of the action, the first respondent, in his letter to the appellant's manager on behalf of both respondents, categorically stated that the writ had not been served on the appellant and that the action was a private one against Mrs Brinckman and not the responsibility of the appellant. In those ways they made it clear that they did not want the appellant to intervene. Having regard to that correspondence, the making of the order against the appellant was inappropriate. It should not have been made.

128 According to findings of the learned judge in the judgment from which this appeal has been brought, in certificates under the Local Government Act 1993, s337, or equivalent certificates under earlier legislation, officers of the appellant gave inconsistent advice to the owners of properties fronting the Brinckman portion of Marsh Street in the period from 1988 until the original judgment on 14 August 2007, concerning whether the appellant was responsible for the repair and maintenance of Marsh Street. In three of the certificates the advice was that the Council was responsible, but in three other certificates the advice was that it was not responsible.

129 However, as between the appellant and the respondents, the appellant maintained a consistent position concerning Marsh Street, certainly from 6 October 2003. The dispute that developed was largely between the respondents and Mrs Brinckman, although they directed many of their arguments through the appellant. Most of the arguments were presented in correspondence. The respondents consistently maintained that they should be allowed to subdivide the Howlin land, using the Brinckman portion of Marsh Street as a public street access. Mrs Brinckman consistently maintained that she owned that portion and that although it was subject to privately owned rights of way, it was not a public highway which could be used for the benefit of the respondents' proposed subdivision.

130 From time to time, and particularly when presented with advice the respondents had received from legal advisors, the appellant sought counsel's opinion. Following receipt of an opinion, the appellant acted in accordance with it. In evidence are counsel's opinions to the appellant dated 21 October 2003, 15 December 2003, 14 July 2004, 10 November 2004, 17 February 2005, 9 December 2005 and 7 August 2006.

131 Counsel's opinion of 21 October 2003 was that the appellant was unable to approve the respondents' subdivision proposal because the street had not been dedicated to the public and for that to happen, Mrs Brinckman had to consent, but she was not prepared to do so. By the opinion of 15 December 2003, the appellant was advised that it could not accept a dedication without Mrs Brinckman's approval as the owner of the land. The owner had to dedicate the land. Counsel also advised that it was strongly arguable that the appellant had no power to acquire the land in the circumstances that existed, or to do anything that would adjust Mrs Brinckman's rights to her land. Counsel stated that there might be a question of mixed fact and law to be determined between the respondents and Mrs Brinckman concerning whether Marsh Street had been dedicated to, and accepted by, the public as a highway. He said that would depend on a detailed enquiry into the evidence of its use, and in his view, the enquiry should be dealt with by the courts, as it would involve the determination of conflicting rights to property.

132 On 14 July 2004 counsel gave further advice, adding that the grant of easements over the Brinckman portion of Marsh Street was strong evidence against an intention to dedicate by the owner. On 10 November 2004, further advice was given that confirmed previous advice. On 17 February 2005, counsel acknowledged that the respondents wished to rely on evidence of common law dedication by usage and to argue that there was evidence of an intention to dedicate, but he observed that it was only evidence and it might be contradicted by other evidence. He correctly forecasted that Mrs Brinckman would assert that her land had not been dedicated to, or accepted by, the public as a highway. That question was the fundamental issue. Counsel strongly emphasised that the appellant had been invited by the respondents to embark upon an authoritative determination of whether there had been an offer to the public to dedicate the land as a road and whether that offer had been accepted by the public. That was a question of law and not one the appellant should determine. Counsel advised again that an enquiry into the respective rights of the respondents and Mrs Brinckman was better dealt with by the courts.

133 On 9 December 2005, counsel provided further advice following submissions from the respondents to the appellant. Counsel adhered to the views he had previously expressed. He acknowledged that the respondents had commenced an action against Mrs Brinckman and said: "This action is consistent with the views which I previously expressed. It is not the Council's function to declare the law, or adjust the respective rights of the Brinckmans and the Howlins. In my view, this is a matter best left to the Court and I reiterate my previous recommendations to Council to that effect."

134 Finally, on 7 August 2006, counsel provided another opinion consequent upon further submissions received by the appellant from the respondents. He emphasised that the fundamental question was the status of Marsh Street as a public street or private access and that the resolution of the question was best left to the Court. He adhered to previous opinions.

135 It is unnecessary to deal with the various arguments that were advanced by the respondents to the appellant and by Mrs Brinckman to the appellant, either personally or through their legal advisers. There were some negotiations between the parties and some offers made. On 21 August 2006, Mrs Brinckman's solicitors advised the respondents that she would vigorously defend the action although they made an offer of settlement. It was rejected two days later by the respondents. Mrs Brinckman made it clear that her attitude was that the Brinckman portion of Marsh Street was not, and never had been, a highway.

136 From time to time, the respondents had sought approval from the appellant for what were essentially applications for approval of subdivisions. Also from time to time they appealed from refusals of approval to the Resource Management and Planning Appeal Tribunal, which upheld the decisions of the appellant or did not set them aside. Central to the decisions was the status of Marsh Street.

137 In the judgment from which the present appeal was brought, the learned judge said that he did "not resile from the observation that there were other available vehicles of recourse for a difficult and divisive issue", but once again did not identify what was in his mind. Later in the judgment, when referring to the bringing of the action, the learned judge observed that the appellant "chose to allow the question to be determined between two of its ratepayers rather than accept some responsibility as the governance authority directly connected with the issue". Once again, the learned judge did not explain what he thought the appellant should have done by way of acceptance of that responsibility.

138 Still later in the judgment, the learned judge observed that the evidence established that both sides held intractable positions and compromise was impossible, and that without a court determination, neither the respondents nor the appellant could progress the matter further. His Honour added: "The Council had other statutory powers, but decided, in its judgment, not to exercise those powers. Mrs Brinckman was entitled to maintain her position until a declaration of status was made by a judicial body." Once again, the learned judge did not identify what he had in mind concerning the statutory powers that were available to the appellant.

139 Several times in the judgment from which the appeal has been brought, the learned judge criticised the appellant for taking a neutral position in the dispute between the respondents and Mrs Brinckman. His Honour observed that "as a public authority it had a responsibility to advance its cause in a superior court" although, with respect, he ignored the fact that the appellant had no cause it wished to advance other than neutrality. Later the learned judge commented "that the Council's response ought to have included consideration of resolution through involvement in the legal process". Still later, the learned judge observed that the failure of the appellant to seek to be joined as a party to the original action was "a factor advantageous to the applicants". I think it not unfair to his Honour to express the thought that whether or not the appellant had intervened in the action, by joinder or otherwise, the learned judge would have ordered it to pay the respondents' costs of the action.

140 With the greatest of respect, the making of the order was erroneous. Even applying the learned judge's test "of connection and capacity to initiate or control the processes of resolution or outcome of the matter giving rise to the litigation", the basis for an order did not appear. The appellant did not have the capacity to resolve the issues concerning Marsh Street. The respondents and Mrs Brinckman were intractable, and compromise between them was impossible. Determination by the Court became the only feasible outcome. The appellant should not have been condemned to pay the respondents' costs of obtaining that determination. It was neither reasonable nor just that such an order be made.

141 The respondents submitted that the litigation would not have been necessary if the appellant had made an early disclosure of documents created in about 1944 and in the following few years. There is no basis for thinking that. The respondents and Mrs Brinckman were aware of the documents by the time of the trial of the action, but their awareness did not stop the proceedings. They were used by the learned judge in favour of the respondents, in my view erroneously, for reasons I have explained.

142 It is also the respondents' case that the appellant took Mrs Brinckman's side and aided and abetted her to maintain her position. That is not so. It did not support the position of either party, leaving it to them to sort it out through the litigation.

143 For the reasons I have given, the appeal should be upheld. It should be ordered that the order that the appellant pay the respondents' taxed costs of the action from 11 December 2005 be set aside and that the application of the respondents against the appellant for costs be dismissed.

CLARENCE CITY COUNCIL v DARRYL ROBERT HOWLIN and

144 I have had the benefit of reading the draft reasons of the Chief Justice in this matter. I agree with those reasons and the conclusions he has reached. I would also allow the appeal and quash the order for costs made by the learned trial judge against the appellant. I would also dismiss the respondent's application for costs.

CLARENCE CITY COUNCIL v DARRYL ROBERT HOWLIN and

145 I agree with the reasons of the Chief Justice and the conclusion he has reached that the appeal should be upheld. I also agree with the orders he proposes.

[1] The contents of this paragraph accord with the findings of the learned judge. However, my interpretation of the original transfers of those lots by T G Brown, which occurred between 20 September 1945 (lot 7) and 4 February 1953 (lot 6) is that lots 1, 5 and 8 were transferred with a right of carriage way over only the Brinckman portion of Marsh Street and the other lots were transferred with a right of carriage way over both portions of Marsh Street.

[2] The Howlin land had a 5.77 metre frontage onto Spitfarm Road at its southern boundary, some distance from Marsh Street. That frontage was inadequate for the respondents' purposes.

[3] No doubt the learned judge, when referring to Mrs Brinckman's land, was intending to refer to the Brinckman portion of Marsh Street.

[4] The source of the passage quoted by the learned judge is not apparent either.

[5] The statement that Mrs Brinckman was dispossessed by the outcome of the action was erroneous. The outcome was merely a declaration that her land was a public highway. Her dispossession occurred at an earlier point in time, whenever the status of the land as a public highway commenced.

[6] It seems that counsel at the trial made no reference to them.

[7] Bischof v Adams is not in fact an authority for that proposition. No question of disqualification arose in it.