Courts and Tribunals - allegation of reasonable apprehension of bias - Mareva injunction sought from trial judge between trial and delivery of judgment - time at which supporting affidavit material in Judge's chambers - whether the Judge should be disqualified from determining that question - consequence of prejudicial affidavit material coming to Judge's attention.

Appeals - whether an appeal lies from a decision of a judge to disqualify himself - requirement of there being a judgment or order.

Federal Court Rules O.10 r.1, O.30 rr.4 and 7, O.52 r10(2)(6)

Australian National Industries Ltd v Spedley Securities Ltd (in liquidation) (1992) 26 NSWLR 411

Barton v Walker (1979) 2 NSWLR 740

Fitzgerald v Director of Public Prosecutions (1991) 24 NSWLR 45

Laws v Australian Broadcasting Tribunal [1990] HCA 31; (1991) 170 CLR 70

Livesey v New South Wales Bar Association [1983] HCA 17; (1983) 151 CLR 288

Port of Melbourne Authority v Anshun Pty Ltd (No 2) [1981] HCA 45; (1981) 147 CLR 589

Rajski v Wood (1989) 18 NSWLR 512

R v Watson; ex parte Armstrong [1976] HCA 39; (1976) 136 CLR 248

Counsel for the first applicant : G A A Nettle QC with

J F Styring

Solicitor for the first applicant: Mallesons Stephen Jaques

Counsel for the second and

Counsel for the respondents : G R Ritter QC with

G D Bloch

Solicitor for the respondents : Goldhirsch and Fixler

1. The time for filing and service of the applicants' notices of

motion for leave to appeal be extended to 20 May 1994.

2 The applicants have leave to appeal.

3. The appeals be allowed and the orders made on 28 April 1994 set

aside.

4. Mr Hartley Moses Saunders and Mrs Eva Saunders pay the cost of

Gas and Fuel Corporation Superannuation Fund, A T Cocks and Partners

Pty Ltd and Mr Terry Cocks of the appeals and of the application for

disqualification.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules

DAVIES J I have had an opportunity to read the reasons for judgment prepared by Gummow and Heerey JJ. I agree with their Honours and with the orders proposed. But I would add some words of my own.

2. The trial commenced on 21 February 1994 and concluded on 28 February 1994. The learned trial Judge reserved judgment. On 10 March 1994, before judgment had been delivered, the trial Judge sat to hear a motion brought on by the Gas and Fuel Corporation Superannuation Fund seeking a Mareva injunction precluding Mr and Mrs Saunders from dealing with or disposing of their property. The trial Judge stood over the motion to a date to be fixed. All parties were advised on 10 March 1994 that the proceedings would be listed for judgment on 15 March 1994.

3. On 15 March 1994, at approximately 9:45 a.m., his Honour announced that, in proceedings VG 298 of 1991, he was not satisfied that any of the causes of action raised by Mr and Mrs Saunders against the respondents had been made out and, accordingly, that there should be judgment for the respondents against Mr and Mrs Saunders on that application. His Honour also announced that, in proceedings VG 379 of 1993, there should be judgment for the Gas and Fuel Corporation Superannuation Fund against Mr and Mrs Saunders. His Honour announced that he would publish his reasons later. As the representatives of the parties were not then agreed as to the amount for which judgment should be pronounced in favour of the Gas and Fuel Corporation Superannuation Fund, his Honour adjourned the matter until 4:20 p.m. that day, indicating that, at that time, he would give judgment in the proceedings and would hear the motion for a Mareva injunction.

4. When the matter resumed at 4:20 p.m., counsel for Mr and Mrs Saunders submitted to his Honour that his Honour should disqualify himself as his Honour may have been prejudiced by the affidavits which had been filed in support of the motion for the Mareva injunction.

5. His Honour treated the motion with sensitivity and heard evidence, including evidence from a member of his staff, dealing with the time when the affidavits were filed and when they reached his Honour's chambers. His Honour held that the relevant affidavits and exhibits were first presented at the registry for filing at 11 am on 15 March 1994. Nevertheless, his Honour concluded that a layman might think differently and might conclude that his Honour had been influenced by the affidavits and exhibits.

6. In my opinion, the time of the filing of the affidavits and the time when the affidavits found their way into the file in his Honour's chambers were both substantially irrelevant. Prior to 4:20 p.m., his Honour did not read the affidavits either formally or informally. That should have been an end to the matter.

7. Documents and their contents do not come to the knowledge of a Judge merely by being contained in the Court's file or produced on subpoena, whether held in the Registry or in the Judge's chambers. It is a necessary and fundamental incident of the Court's processes that a Judge is removed from the knowledge which registry officers may have and even from that which members of his own staff may have. In general, a Judge is made aware of matters which the Judge takes into account when evidence is adduced formally in court.

8. As the affidavits had not been read formally to the trial Judge, and even more so as his Honour had not perused the material even informally, there was no ground whatever for the allegation of bias which was made against him. It is regrettable that counsel continued with the submission even after they had had an opportunity to read the transcript of the hearing on 10 April 1994 and had appreciated that his Honour had announced that he should not be informed of the substance of the material until after he had pronounced judgment.

9. As his Honour made orders consequential upon his finding of disqualification, and as those orders have been taken out and sealed, the orders should be set aside.

10. I agree with the orders proposed by Gummow and Heerey JJ.

GUMMOW AND HEEREY JJ After the conclusion of a trial in this Court, but before judgment was delivered, one of the parties sought a Mareva injunction from the trial judge. Before commencing to deal with that application, his Honour announced that, in respect of the substantive proceeding, he proposed to find in favour of the party who had brought the Mareva application and would give his reasons later. The other party applied to have the judge disqualify himself from the substantive proceeding on the basis of an apprehension that affidavits in support of the Mareva application had been read by him prior to the announcement. His Honour upheld that application and in effect ordered a retrial before another Judge. Leave to appeal from these orders is now sought.

2. In February 1994 his Honour tried proceeding No. VG 298 of 1991 in which Hartley Moses Saunders and Eva Saunders, suing as trustees of the H and E Saunders Family Trust, claimed damages against Gas and Fuel Corporation Superannuation Fund ("GFC") and A T Cocks and Partners Pty Ltd and Terry Cocks (collectively "Cocks"). Mr and Mrs Saunders alleged that Cocks, as agent for GFC, made misleading and deceptive statements to them as a result of which they entered into contracts for the sale and purchase respectively of two city buildings and obtained a loan from GFC. By a cross-claim GFC sought an indemnity against Cocks. At the same time his Honour heard proceeding No. VG 379 of 1993, a claim for the balance unpaid of money lent together with interest, brought by GFC against Mr and Mrs Saunders. That proceeding had been initially instituted in the Supreme Court of Victoria and cross-vested to the Federal Court.

3. The transactions giving rise to this litigation occurred in July 1988 when Mr and Mrs Saunders sold a property at 456-458 Latrobe Street Melbourne to GFC for $2.05 million and purchased another property at 316-318 Queen Street from a third party for $5.25 million. For that purchase Mr and Mrs Saunders borrowed $3.25 million from GFC. Mr and Mrs Saunders complained of alleged statements by Mr Cocks to Mr Saunders that $5.25 million was a fair market price for the Queen Street property and that it would be worth $7 million in two years time. These statements were alleged to have been made at a conversation at which only Mr Saunders, his son-in-law, and Mr Cocks were present. Mr Cocks denied that he had made either statement or said anything to the like effect. There was also an issue as to whether anything said by Mr Cocks in fact influenced Mr and Mrs Saunders to enter into the transactions. Thus the result would inevitably turn on the trial judge's assessment of the credibility of Mr Saunders and his son-in-law on the one hand and Mr Cocks on the other.

4. The trial commenced on 21 February 1994 and concluded on 28 February when his Honour reserved judgment.

5. It may be safely assumed that nothing his Honour said or did in the course of the trial gave rise to any apprehension of bias; we say that because the subsequent application of Mr and Mrs Saunders made no complaint on that score of his Honour's conduct of the trial.

6. On Thursday 10 March 1994 GFC's solicitors filed in the Victoria District Registry of the Court a notice of motion bearing the heading of No. VG 379 of 1993 together with a letter addressed to the District Registrar in the following terms:

"Gas and Fuel Corporation v H and E Saunders

Action 1993 No. VG 379

Due to the current status of these proceedings and the

nature and circumstances surrounding this application,

Senior Counsel has advised that the affidavit materials in

support of the application not be filed until such time as

Senior Counsel has had an opportunity to address the Court.

We seek the District Registrar's indulgence in permitting

the matter to proceed in this fashion."

7. The notice of motion sought an order restraining Mr and Mrs Saunders from "disposing of, mortgaging, assigning, charging, diminishing or otherwise dealing with or removing from the jurisdiction of this court any of their assets within the jurisdiction of the court".

8. The notice of motion and the letter were brought to his Honour by a Deputy Registrar. In his subsequent reasons for judgment his Honour said:

"The Court files of the two proceedings, or such parts of

them as were not at my home, were in my chambers. The

Deputy Registrar asked whether I would deal with the

proposed motion or refer it to the judge who in that week

would in the ordinary management of the Court's business

hear urgent interlocutory applications. The Melbourne Full

Court sittings were in progress and I considered that I

might be able to deal with the motion more expeditiously

than that judge, because of my familiarity with the

proceedings, at a time when he would be engaged in the

business of the Full Court."

9. On the same day, at 10.13 am, senior counsel for GFC appeared ex parte (but in Court) before his Honour in support of the notice of motion. His Honour told counsel that he would be willing to deal with the matter because he knew more about it than the duty judge. His Honour then said:

"(I)t occurred to me that if you tell me things or prove

matter in support of the application you may disturb the

balance of what I am pleased to call my mind on issues of

credit. And it occurred to me that if I were in a position

to give judgment - I would not be in a position to publish

reasons for judgment in the immediate future - that might

get over the difficulty. Whichever side won would have to

be protected by an order extending the time for appeal until

the reasons were published."

10. His Honour suggested that he order that the notice of motion be served forthwith and the motion itself be adjourned until Tuesday, 15 March. Counsel expressed concern that service of the notice might lead to some action of the kind that the Mareva application sought to restrain. His Honour therefore stood over the motion to a date to be fixed and said that on Tuesday he would be able to give a statement of his conclusions. Once this was done, his Honour said, it would not matter whether he or any other judge heard the application.

11. The two matters VG 298 of 1991 and VG 379 of 1993 were listed on Tuesday 15 March (the Monday was a public holiday). Proceedings were called on at 9.47 am. His Honour said at the outset:

"Last week notice of a motion on the part of Gas and Fuel

Corporation was filed for a Mareva injunction against Mr

Saunders and no evidence was put on the file, wisely,

because that might have had some influence on my

consideration of the case, nor was I told anything about

whatever basis there is for the motion.

I indicated then, as is the fact, that I am in a position to

state my conclusions about the case, though not in a

position to publish reasons, and I indicated that it seemed

to me the best course to take was to state those conclusions

today and make appropriate orders and then protect the

position of the party or parties against whom the decision

goes by making an order extending the time for any appeal

until reasons are published. Do either of you (i.e. counsel

for Mr and Mrs Saunders and Cocks) want to say anything

against my taking that course?"

12. There followed some discussion with counsel, in the course of which his Honour noted that counsel for GFC "had considered the problems and had deliberately abstained from putting any affidavit in support, and indeed there is still no affidavit in support". His Honour then announced his conclusion as to Mr and Mrs Saunders' claim against GFC in the following terms:

"My conclusion is that I am not persuaded that any of the

causes of action raised against any of the respondents has

been made out and accordingly in the proceeding by Mr and

Mrs Saunders there would be a judgment for each of those

respondents."

13. Counsel for GFC having stated that the motion for the Mareva injunction was to proceed, his Honour appointed 4.20 pm as the time at which he would hear the motion and consider the terms of orders disposing of both proceedings.

14. At 4.20 pm senior and junior counsel who had appeared for Mr and Mrs Saunders at the trial appeared before his Honour and asked that he disqualify himself. The stated ground for this application was that GFC on 10 March "put on an application for a Mareva injunction by ex parte notice of motion and filed, as we understood it, affidavits". His Honour interrupted at that stage and said that there was no affidavit filed and the matter had been specifically adverted to by counsel for GFC and himself, that there was "a danger of my hearing something that I might be thought to influence me" and that consequently GFC had not filed an affidavit. Senior counsel for Mr and Mrs Saunders then indicated that he was

"not sure that the absence of the affidavits makes it any

better because we know that a Mareva injunction is based on

their being prima facie evidence of something akin to

dishonestly; dishonestly disposing of assets so as to put

them out of the reach of the judgment creditor. And that is

not only evidence of dishonesty, but it can also amount to

an admission of liability."

15. The matter was then adjourned. Further argument took place on the following day.

16. The matter resumed on 17 March. It then emerged that there was a dispute concerning two affidavits filed by GFC in support of its Mareva application. The disputed issue was whether the affidavits had reached his Honour's chambers before or after he pronounced his conclusion as to the result of the trial, which event occurred shortly after 9.47 am on Tuesday 15 March.

"Well, does anybody say I should not determine the question

of fact as to the time at which the - is it plural,

affidavits - the affidavits came, I suppose into my chambers

rather than into the file. It does not really matter

whether they were in the file or whether they were somewhere

else in my - when I say, my chambers, that includes the

chambers adjoining where the associate and the secretary

are. Does anybody say I should not determine that question

of fact?"

"From our point of view, your Honour, no. We say that

without, of course, waiving the perceived bias objections

that have already been outlined."

18. The genesis of this dispute was a conversation between Mr Trevor Sheehan, the solicitor for GFC, and Mr Stephen Shnider, the solicitor for Mr and Mrs Saunders, immediately after his Honour left the bench on the morning of 15 March. Both gentlemen subsequently gave evidence before his Honour. Mr Shnider's version was that he asked Mr Sheehanfor a copy of the notice of motion and was told that a copy would be delivered to his office by 11 am that morning. Mr Shnider then asked whether any affidavits would be filed and Mr Sheehan said they had been filed late on Friday 11 March. Mr Sheehan admitted that he was asked by Mr Shnider whether "material" or "affidavits" (he could not remember which word had been used) had been filed and he responded, by mistake, in the affirmative. He then corrected his answer by saying that only the notice of motion, and not the affidavits, had been filed. Mr Shnider denied that any correction had occurred.

19. Counsel for Mr and Mrs Saunders submitted that if the documents were available to his Honour before he announced his conclusions, a reasonable apprehension would arise in the mind of an observer that he had read them before stating those conclusions and had been influenced against Mr and Mrs Saunders by what he read.

20. A number of witnesses were called by GFC and Mr and Mrs Saunders on this issue. The witnesses called on behalf of Mr and Mrs Saunders included Mr Mark Westgate, a clerk in the Victoria District Registry of the Court, who said that he received on the morning of 15 March two affidavits and copy exhibits in VG 379 of 1993. Believing that the documents would be required for use later that day, he took them to his Honour's chambers where his Honour's secretary Miss Lois Bendall gave him the file VG 379 of 1993. Mr Westgate placed the documents in the file and made an entry on the file index. Miss Bendall then returned the file to his Honour's room. Mr Westgate's recollection was that he put the documents in the file at some time between 9.15 and 10.15 am. Miss Bendall gave evidence that the events related by Mr Westgate happened before the court opened at 9.47 am, she having on that day also acted as his Honour's Associate.

21. GFC called as a witness Mr Simon Wilson QC who had appeared for GFC on 10 and 15 March. His evidence was that he received the two original affidavits and exhibits from his instructing solicitor on 10 March and kept them in his chambers until the morning of 15 March. He swore that about 10.15 am on that day his instructing solicitor telephoned him and told him of his Honour's pronouncement of conclusions. The instructing solicitor asked Mr Wilson to leave the original affidavits and exhibits with his secretary for collection by one of the solicitor's staff. This was done. Miss Katherine Voon, an articled clerk employed by GFC's solicitors, said that on 15 March at about 10.30 am she delivered copies of affidavits to the office of Mr and Mrs Saunders' solicitors. She then went to Mr Wilson's chambers where she received from his secretary the original affidavits. She then took these to the registry and filed them at about 11.00 am. It was common ground that copies of the affidavit were delivered to the office of Mr and Mrs Saunders' solicitors at about 11.00 am.

22. The case finally advanced on behalf of Mr and Mrs Saunders on the issue was that, at best, the affidavits were filed on the morning of Tuesday 15 March and reached his Honour's chambers some time before 9.47 am on that day. The original suggestion of a filing on Friday 11 March, based on Mr Shnider's understanding of what Mr Sheehan had told him, was no longer pursued.

23. On 28 April 1994 his Honour handed down reasons for judgment on the disqualification application. His Honour rejected the submission advanced on behalf of Mr and Mrs Saunders that the bare knowledge that an application for a Mareva injunction had been made would necessarily import an allegation of discreditable conduct on the part of the persons against whom the claim was made and hence could found a case of apprehended bias. His Honour's conclusion on that point was not challenged before us.

24. His Honour then reviewed the evidence on the issue as to the time at which the affidavits reached his chambers. His Honour found that the affidavits and exhibits filed on 15 March 1994 were first presented at the registry for filing at around 11.00 am that day.

25. In discussing the evidence, His Honour said that Mr Westgate and Miss Bendall gave their evidence "with complete honesty and anxious care to be accurate". However they were, he said, engaged that morning in carrying out a number of different tasks and neither had any reason to fix in their mind the time at which the particular incident took place. On the other hand, Mr Wilson and Mr Sheehan "had good reason to recall easily the sequence, if not the time, of the several events with which their evidence deals". His Honour concluded that their evidence, and that of Miss Voon, was most unlikely to be honestly mistaken. His Honour concluded that the possibility of any of Mr Wilson, Mr Sheehan and Miss Voon giving deliberately false evidence was "so slight as to lead to the conclusion that, as a matter of probability, Mr Westgate and Miss Bendall were mistaken in their recollection of the time of the occurrence of the incidents that they relate".

26. His Honour then proceeded to explain why, notwithstanding his finding of fact, he nevertheless proposed to uphold the disqualification application. His Honour said:

"I am firmly persuaded of the correctness of my finding that

the affidavits did not come into my possession until after

those conclusions had been stated. I hope that lawyers

practising in this State would have no difficulty in

accepting that finding. But I think it likely that a layman

in Mr. Saunders' position would reasonably think such a

finding wrong. Such a layman would be expected to be

acutely conscious of what he would see as the interest each

of Messieurs Sheehan and Wilson and Miss Voon had in a

refusal of the motion that I disqualify myself, and

conscious of the starkly contrasting disinterestedness of

Mr. Westgate and Miss Bendall. Such a person would find it

difficult to repress the thought that the judge who made the

finding and the three witnesses whose evidence he had

accepted were all members of the legal profession working in

the same city. In Livesey v. New South Wales Bar

Association [1983] HCA 17; (1983) 151 CLR 288 at 299 the High Court

pointed out:

'The reasonable observer is to be presumed to

approach the matter on the basis that ordinarily

a judge will so act as to ensure both the

appearance and the substance of fairness and

impartiality. But the reasonable observer is

not presumed to reject the possibility of

prejudgment or bias; nor is the reasonable

observer presumed to have any personal knowledge

of the character or ability of the members of

the relevant court (see Hannam v. Bradford

Corporation (1970) 1 WLR 937, at p 949;

(1970) 2 All ER 690, at p 700; Reg. v.

Liverpool City Justices; Ex parte Topping (1983)

1 WLR 119, at p 123; (1983) 1 All ER 490,

at p 494.)'

If it were reasonable of a person in Mr. Saunders position

to think my finding the product of bias and wrong, the

question arises as to whether that person might reasonably

think that I had looked at the affidavits before stating my

conclusions, and that I had been thereby biased against Mr.

and Mrs. Saunders in reaching those conclusions.

Mr Ritter submitted that the transcript of what I said in

court on 10 March could be taken as indicating that I had

not then reached a conclusion as to the result of the trial.

In fact I had reached such a conclusion and had commenced to

write reasons for judgment. But, on reading the transcript

in the light of Mr. Ritter's submission, I think there is

force in the submission. I used the words, 'if I were in a

position to give judgment', which might be taken to indicate

that I would attain that position in the future.

While it might seem improbable to a lawyer experienced in

litigation that a judge who had stated his intention of

announcing his conclusions about proceedings tried over a

period of 6 days would be susceptible to influence by the

contents of an affidavit which he read during the half hour

preceding the announcement, a layman might reasonably think

that he would be so influenced.

I return to the question whether a person in Mr. Saunders'

position might reasonably suspect that I had in fact read

any of the documents before stating my conclusions. There

is authority that where the means of communicating to the

judicial officer information or opinion likely to excite

bias is a person, the oath of the judicial officer that no

such a communication had occurred, or acceptance by counsel

for the party claiming disqualification that no such a

communication had occurred, does not preclude a finding that

an interested person might reasonably have suspected that

the communication was made: R. v. Sussex Justices; ex parte

McCarthy (1924) 1 KB 256; R. v. Magistrates Court at

Lilydale; ex parte Ciccone [1973] VicRp 10; (1973) VR 122 at 128. Is the

position the same where the means of communication

is a document in the judicial officer's possession? In the

particular circumstances of this case a suspicion that I had

read the documents before stating my conclusions would

entail the suspicion, not only that I had falsely stated the

contrary, but a suspicion that I had falsely found that the

documents were filed at 11 a.m., well knowing that they had

been filed before 9.45 a.m. There seems no good reason to

accord less weight to the oath of a Sussex justice of the

peace than to the unsworn statements of a judge. That

circumstance affords an example of the dangers, to which

Mahoney J.A drew attention in Bainton v Rajski (1992) 29

NSWLR 539, inherent in determination of disputed facts

by a judge who is asked to disqualify himself. Counsel for

all the parties invited me to take that course, but it may

now perhaps be seen to have been an unwise course. If that

course had not been taken, a person in Mr Saunders'

position, having been informed by his solicitors of what Mr.

Westgate had told them, might reasonably have suspected that

I had read the documents, notwithstanding my statement that

I had not, and might reasonably have suspected that I had

been biased against him by what I read before reaching the

conclusions I stated on 10 March.

There remains the question whether either of the affidavits

or any of the exhibits does indicate a discreditable

intention or action on the part of Mr. Saunders. I have

stated that I have not read the documents because counsel

for all the parties desired that I should not. In the

circumstances I think that I should infer that in the

documents there is matter that a person in Mr. Saunders'

position would reasonably think likely to create a bias in

my mind against Mr. Saunders' credit as a witness.

My conclusion is that a person in Mr Saunders' position, or

an interested person concerned to understand these

proceedings, might reasonably have apprehended, after

hearing the evidence of Mr. Westgate and Miss Bendall, that

I might have been biased against Mr Saunders when I reached

my conclusions because of what I had read in the affidavits

and exhibits, and that that apprehension was not dispelled

by what happened after those two persons had given evidence.

In all the circumstances I consider that I should not

proceed to give effect by orders to the conclusions stated

on 15 March, but should order a new trial by another judge

of the court."

27. The following order was taken out and sealed on behalf of the District Registrar on 11 May 1994:

"THE COURT ORDERS THAT:

1. The proceeding no longer stand for judgment.

2. The proceeding be placed in the list of cases to be

fixed for hearing.

3. The proceeding be fixed for hearing before the same

judge and on the same date as the proceeding number

VG379 of 1993.

4. Each party's costs of the trial had in February 1994

and each party's costs of the hearing on the morning

of 15 March, 1994 and each party's costs of the motion

for disqualification be reserved to the judge who

shall hereafter try the proceedings.

5. The directions hearing be adjourned to a date to be

fixed by any party on reasonable notice to the other

party."

28. It is now accepted that the orders which his Honour made on 28 April 1994 were interlocutory. Thus the Rules required that any application for leave to appeal be filed and served within seven days: O. 52 r.10(2)(b). An application was not filed within that period. GFC initially considered the possibility of appealing against his Honour's judgment and in the first instance made a decision to pursue an early retrial, but on the basis that that decision would be reviewed if Cocks took any appeal steps. The solicitors for Cocks received instructions to appeal on 13 May but initially assumed that an appeal lay as of right and that therefore a notice could be lodged within 21 days. They in fact filed and served a notice of appeal on 18 May. When this notice came to the attention of the solicitors for GFC they reviewed their position and obtained instructions from their client to seek leave to appeal. The relevant documents were filed on 19 May.

29. We think that an extension of time should be granted for both GFC and Cocks to apply for leave to appeal and that such application should be granted. The draft notices of appeal attached to the applications for leave should stand as the notices of appeal.

30. As long as his Honour's order stands, significant adverse consequences will be suffered by GFC and Cocks. They will have lost the benefit of judgment in their favour in a trial involving a large sum of money where issues of credit were resolved in their favour: See Decor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 655; (1991) 33 FCR 397 at 399 - 400. It was not suggested that Mr and Mrs Saunders had suffered any prejudice by the passage of the time since the expiration of the seven day period.

31. Does an appeal lie where a judge upholds an application that he disqualify himself from further hearing the matter on the ground of apparent bias? Senior counsel for Mr and Mrs Saunders contended that no such appeal lay. He relied on Barton v Walker (1979) 2 NSWLR 740 where the New South Wales Court of Appeal held that an appeal did not lie from refusal of an application that a judge disqualify himself. The trial judge had rejected the affidavit relied on by the applicant, directed that it be taken off the court's file, stated that he would not hear any argument and "reject(ed) the application in its totality". Samuels JA, with whom Reynolds and Glass JJA agreed, held that a motion to disqualify a judge of the Supreme Court was "not cognizable" (at 750). His Honour referred (at 751) to a passage in R v Watson; ex parte Armstrong [1976] HCA 39; (1976) 136 CLR 248 at 266 where Barwick CJ, Gibbs, Stephen and Mason JJ said:

"It was submitted on behalf of the husband that the wife's

proper remedy was to appeal to the Full Court of the Family

Court. As to that submission no more need be said than that

an appeal lies only from a 'decree' (s.94(1)) which means a

'decree, judgment or order' (s.4(1)), and a judge who simply

continues to sit after it has been submitted that he is

disqualified does not make a 'decree'".

"Nor does he make an order, I would think, if he announces

that he will sit or gives reasons for deciding to do so. I

do not consider that any order was made in the present case

from which an appeal can be brought."

32. However in a case (like Barton) where the judge rejects an application to disqualify himself for bias, a remedy is available to the unsuccessful applicant if the ultimate judgment in the case proves adverse. As was said in Watson (at 266), immediately following the passage cited by Samuels JA:

"No doubt an appeal could have been brought if the learned

judge had finally given judgment in the matter, but it would

be obviously inconvenient to allow him to complete the

proceedings when he is disqualified to sit".

(The latter part of this passage and the actual result in Watson, can be reconciled with Barton only on the ground that Watson concerned a writ of prohibition to a judge of the Family Court under s.75(v) of the Constitution.)

33. The converse situation occurred in Mann v Northern Territory News (1988) 53 NTR 15, a decision of the Full Court of the Supreme Court of the Northern Territory. In that case a trial judge had acceded to an application that he disqualify himself. Asche CJ said (at 16):

"His Honour has given very careful and most conscientious

consideration to his position, and having done that he has

considered that he should not sit on this case.

In those circumstances an additional factor arises which

does not arise in the opposite case where a judge refuses to

disqualify himself in cases where a Court of Appeal

subsequently takes a view that he should have indeed

disqualified himself.

The additional factor is that a judge, who has given careful

consideration to his position, has determined that he cannot

sit on that case. In those circumstances it seems to me

that it would be virtually impossible, and certainly highly

embarrassing, for any superior court to demand that a judge

who had openly stated that particular view, should return to

adjudicating on the very case in which he had disqualified

himself.

That would, in my view, render it an impossible position for

the judge concerned. A highly embarrassing situation for

him and one into which he should never be placed."

"... when a judge decides not to hear a case or not to

continue hearing a case because he considers there may be

reasonable apprehensible decision of bias, that is a

decision entirely for that judge to make and for no one

else."

34. In Fitzgerald v Director of Public Prosecutions (1991) 24 NSWLR 45 a District Court judge had declined to conduct the trial of the appellant upon the second count of a severed indictment. In the Court of Appeal the appellant sought an order that would require the District Court judge, and that judge only, to conduct the trial. In rejecting the application the Court of Appeal took the view that on the facts of the case there was no proper cause requiring the District Court judge to disqualify himself. Samuels JA (with whom Meagher JA agreed) said (at 50):

"This seems to also have been the judge's conclusion. I do

not really understand therefore what was the basis of his

decision to the contrary, which seems to have depended upon

some deference to the views expressed by the Crown. That is

not a proper ground for disqualification."

35. In that setting Samuels JA, having decided that he would refuse an order of mandamus on discretionary grounds, said that he was "not entirely satisfied" that this was a case where there was jurisdiction. His Honour said (at 51):

"It seems to me that what is necessary for an applicant to

show is that the respondent is under a legal duty to do what

the applicant contends he failed to do, whether or not it is

requisite also that the legal duty must be owed to the

applicant personally and not to the public at large. ...

although Mason J in Re JRL; ex parte CJL spoke (at 352), of

the importance that 'judicial officers discharge their duty

to sit', I think there is considerable room for doubt

whether a judge who mistakenly, but bona fide, disqualifies

himself or herself, is then compellable by mandamus to sit."

"... prima facie when a judge decides not to hear a matter,

what he does is not a 'judgment or order' or otherwise such

a determination as is subject to appeal or formal judicial

review as such. This is the effect of Barton v Walker

(1979) 2 NSWLR 740. This does not mean that what he has

done may not be called into question. If he sits when he

should have retired for, for example, apprehended bias, that

may be relied on as a matter showing that the trial has

miscarried and his judgment may be set aside. This has been

amply demonstrated in recent times: see Vakauta v Kelly

(1989) 167 CLR 578.

An order made in consequence of his having decided that he

should not hear a proceeding may be appealable as such:

thus, if a judge decides that he has no jurisdiction to hear

a matter and, in consequence, determines not to sit but to

dismiss the proceeding, the order for dismissal will be a

judicial act which will attract review in formal procedures.

The position may be different where statutory provisions

operate to impose a legal obligation on a judge to hear, or

continue to hear, a particular proceedings: see, eg, the

provisions of the Industrial Relations Act 1988 (Cth), Pt 2,

Div 2, s 34 and s 36; the Australian Constitution, s 75(v)

and Re Polites; Ex parte Hoyts Corporation Pty Ltd (1991) 65

AIJR 445; [1991] HCA 31; 100 ALR 634. And if a judge enters upon the

hearing of a proceeding, it may be that, in particular

circumstances, he will become subject of an obligation to

continue to hear it or, at least, not to cease to hear it

without appropriate cause.

It is not necessary in this case to consider the powers

which may, in a particular court, be exercisable by the

Chief Justice, the Chief Judge, or the Chief Judge of a

Division. It has not been suggested in this case that such

matters are relevant.

The fact that a judge, in determining not to hear a case,

does so for a reason that is wrong, in fact or in law, does

not in my opinion alter the position. If a judge concluded

that he would not sit because of other court commitments,

his decision could not be called into question on judicial

review because in fact he was wrong. And, in my opinion, if

he decides that there is a risk of a reasonable apprehension

of bias such that he should not sit, formal proceedings are

not available to prove that he was wrong." (Emphasis

added.)

36. In Australian National Industries Ltd v Spedley Securities Ltd (in liquidation) (1992) 26 NSWLR 411, a series of complex and related cases were assigned to a judge of the Commercial Division of the Supreme Court of New South Wales. In some of those proceedings the judge made findings in which he was critical of the recollection, credit and commercial conduct of the parties. When asked not to list any more of the related cases before himself the judge refused. An appeal was heard by a five member bench of the Court of Appeal. By a majority, the appeal was upheld. The jurisdictional point was not contested. However Kirby P noted (at 423):

"I agree that it is unnecessary to consider whether the

issue is one properly before this Court having regard to the

holding of the Court in Barton v Walker (1979) 2 NSWLR 740.

It may one day be necessary to review that holding: cf

Rajski v Wood (1980) 18 NSWLR 512 at 518. However, as all

of the parties (and Cole J) invited this Court to rule on

the matter, as the issue could readily be tendered in

another way conformably with Rajski v Wood and as it is

manifestly convenient and desirable that the issue of the

suggested disqualification of Cole J should be decided as

quickly as possible so that the pending litigation may

proceed according to its timetable before a different judge

and without delay, I would simply pass the Barton v Walker

issue by, saying nothing more upon it."

"In Barton v Walker (1979) 2 NSWLR 740, this Court

considered how the question of whether a judge should

refrain from deciding a case for reasons of this kind can be

raised. The Court decided that the question is one to be

decided by the judge himself; it is not an issue to be

decided, as a matter of fact or otherwise, upon motion for

the purpose and after (if necessary) a contest of fact. It

was, in this sense, described as a non-judiciable issue.

That decision has been applied by this Court on a number of

occasions. It has not been in contest in the present

appeal.

It is not necessary that I reiterate the reasons given by

Samuels JA for the decision of the Court in that case. In

general, I am in respectful agreement with what his Honour

said. There are obvious reasons why the issue of, for

example, whether a particular judge is in fact biased or

there is an appearance of bias should not be the subject of

factual context, by evidence and counter-evidence, before

the judge. A fortiori, the issue of whether one judge

should for such reasons not hear a case cannot be brought

before another judge to decide the former's bias,

pre-judgment, or the like, or the effect of them. The principle

adopted and followed has been that (special cases apart) the

matter is to be determined by the judge himself and, if he

be wrong, his error is to be corrected on appeal.

In my opinion, such an approach is correct. Ordinarily

matters of bias or pre-judgment are not susceptible of proof

in the ordinary way, by allegation and counter-allegation;

whether a judge is affected in such fashion is ordinarily a

matter known essentially by him. And I think, if such a

matter were brought to contest in such a way, by evidence

against evidence, the position of the judge and his

impartiality would be - or ordinarily would be - destroyed.

On the other hand, there is obvious convenience in there

being available a method for determining an issue of this

kind before the judge enters upon the hearing of a case,

particularly a long case: cf Rajski v Wood (1989) 18 NSWLR

512. On some occasions, the judge concerned has entertained

an application that the proceeding be not listed before him

or that a date fixed for the hearing of it be vacated. Upon

such an application the parties have canvassed before him

whether he should sit.

Both parties have accepted that the Court should, by means

of the procedure adopted in this case, decide the issue.

Cole J made an order that properly is the subject of appeal

within s 101 of the Supreme Court Act 1970. (Apparently an

order "dismissing the appellants' motions": see 26 NSWLR at

423.) He has, by his judgment, invited the decision of this

Court on the matter. No argument has, I think, been

directed to the contrary.

As I have said, it has not been argued that Barton v Walker

was wrongly decided. I do not think it was. But an appeal

is now properly before this Court. In the circumstances, it

is in my opinion proper to accept that the matter is before

this court for consideration of the judge's orders and the

reasons he has given for them." (Emphasis added.)

37. Where Mahoney JA speaks of the judge's error being "corrected on appeal" we think his Honour must be taken in context as referring to an appeal against the final judgment, this aspect having been adverted to by Samuels JA in Barton (at 758) in a passage which appears later in these reasons.

38. The foregoing cases might at first blush seem to indicate a strong line of authority in the New South Wales Court of Appeal supporting Mr and Mrs Saunders' contention. However, the passages we have emphasised in parts of the judgments of Mahoney JA already cited (in Fitzgerald and Spedley) show the importance in this context of a judge's decision on a disqualification application leading to a judgment or order. Ordinarily, of course, judgments and orders are the gateway to the appeal process. The point was adverted to by Kirby P in Rajski v Wood (1989) 18 NSWLR 512 at 517. The appellant in that case had asked the judge assigned to hear the case to disqualify himself for bias. The judge declined to do so and the appellant then filed a summons seeking declarations from the Court of Appeal that the judge should have disqualified himself. Kirby P pointed out that the declaration sought that the judge in question be disqualified from sitting could not be made; the governing authority was Barton which, his Honour said, "(had) been applied in many cases" (at 517). However, his Honour went on to say (at 518).

"The party having taken the point, if the judge refused to

disqualify himself or herself, the proper course was for the

proceeding to continue. Samuels JA put it (in Barton) (at

758. in these terms:

'... The Supreme Court has - as any court at the

apex of a judicial structure ought to have -

unlimited jurisdiction or authority; and its

judges are, therefore, not amenable to

prohibition, or to remedies of equivalent

purpose. Accordingly, a party must take

suspicion of bias as a ground of appeal after

judgment. He cannot summarily disqualify the

judge; he must fight the case through.'

To the extent that these last-mentioned remarks suggest that

the objection to a refusal of a judge to disqualify himself

or herself cannot ever be taken until the very end of the

trial, I respectfully differ. Such a conclusion was not

necessary to the decision in Barton. I do not consider it

to be part of the holding of the Court in that case. It

could involve great inconvenience in a particular case for

the reasons already referred to above. And it is

inconsistent with the essential reason that lies behind the

holding in Barton. This is that no appeal lies to this

Court from the decision of the judge on this issue precisely

because no order or other determination is made which is

susceptible to appeal. If an order is later made which (as

of right or by leave) is susceptible to appeal, the Court

may, in my opinion, consider in conjunction with any such

appeal (or summons for leave to appeal) an attack on the

order based upon arguments as to its invalidity grounded in

the actual or apprehended bias of the judge who made it. A

similar opinion was expressed by Priestley JA in Raybos

Australia Pty Ltd v Tectran Corporation Pty Ltd and by his

Honour. That is the correct way by which, at a relatively

early stage in these proceedings, the opponent might bring

to the Court, in a proper fashion, the objection which he

now wishes to agitate in the present impermissible

proceedings.

There is little doubt that, at a relatively early stage, (if

not already done) an interlocutory order made by

Badgery-Parker J in the principal proceedings would provide a

vehicle to ground a summons on the part of the opponent for

leave to appeal by which he could raise the issue which he

now seeks to argue. Instead of taking that course, he

issued the present summons. The second prayer for relief

flies in the face of Barton. The attempts to distinguish

the holding in that case from the circumstances here are

entirely unpersuasive. That holding requires that the

second declaration sought be rejected. In respect of it,

the claimants are therefore entitled to the summary relief

they seek by their motion." (Emphasis added.)

39. In the same case Priestley JA (at 522) agreed with what Kirby P and Hope A-JA

"... (had) said about the unavailability of relief to a

litigant claiming a judge should disqualify himself, before

the judge has made an order which becomes the subject of an

appeal." (Emphasis added.)

40. We would respectfully agree with those statements from Rajski. If a judge rejects a disqualification application and ultimately gives judgment against the applicant, the applicant can appeal against the orders made on the ground that the disqualification application was wrongly rejected - as Samuels JA pointed out in Barton. If the judge allows the application and, in consequence, makes an order affecting the rights of parties - such as an order for a new trial - there is no logical reason why the correctness of that order as a matter of fact and law should not also be subject to appeal.

41. In the present case the orders pronounced by his Honour on 24 April and entered on 13 May were orders which were (subject of course to obtaining leave) properly the subject of an appeal. They were in the nature of procedural directions and thus interlocutory, but orders nonetheless. The practical and legal effect of what his Honour did was, to use his Honour's words, to "order a new trial by another judge of the Court". Judges of this Court, as a matter of routine, give directions (which are a species of order) that cases be placed in a list for trial, or that a trial commence on a specified date or that a trial date already fixed be vacated: see Federal Court Rules O 10 r 1, O 30 rr 4 and 7. For example, an order of a judge directing that a matter be fixed for trial after rejecting a party's contention that it was not ready could be the subject of appeal. We think therefore the orders that his Honour made for the further disposition of VG 298 of 1991 and VG 379 of 1993 are subject to appeal. It then becomes a question whether his Honour made an error of fact or law in the reasoning which led to his making those orders, such reasoning we point out being the subject of a careful and considered reserved decision published to the parties.

42. The authoritative statement of the law is the passage from Livesey v New South Wales Bar Association [1983] HCA 17; (1983) 151 CLR 288 at 293 which was referred to by his Honour and which it is not necessary to repeat. The majority in Spedley pointed out that the test is now expressed in terms of possibilities, that is to say whether the parties or the public "might entertain a reasonable apprehension that the judge might not bring an impartial or unprejudiced mind to the resolution of the question involved" (per Kirby P at 419, emphasis in original). The members of the majority were agreed that this was a different test, and one easier of satisfying, than the former test dependent on probabilities or "substantial likelihood". See also per Mahoney JA at 439-440 and per Meagher JA at 448.

43. As already noted, the argument that the bare knowledge of the fact that a Mareva application was to be made could amount to apparent bias was not advanced before us. The issue between the parties thus became a narrow one. Should a hypothetical bystander, or Mr and Mrs Saunders themselves, have reasonably apprehended that, notwithstanding his Honour's finding of fact that the affidavits were not available to him to read prior to his pronouncement of his conclusion on the trial, he might in truth have read them and as a consequence might have become prejudiced against Mr and Mrs Saunders and (as it would have to follow in the circumstances) as a further consequence made a decision adverse to them?

44. As Mahoney JA pointed out in Spedley (at 440) the law determines what is to be assumed to be the state of knowledge and reasoning of the person whose apprehension of bias is relevant. His Honour noted:

"The result of this is that, in substance, this matter is to

be judged often, if not ordinarily, according to the view of

one who is mistaken. The fact will ordinarily be that the

court will be impartial in the relevant sense but the judge

will step aside because, though he will be impartial, the

appearance of what he does to a person who does not know,

for example, the integrity of the court, the capacity of a

judge, or the full facts of the case will raise the

reasonable apprehension that he might not be so."

45. But as Mason CJ and Brennan J pointed out in Laws v Australian Broadcasting Tribunal [1990] HCA 31; (1991) 170 CLR 70 at 87:

"In assessing what the hypothetical reaction of a

fair-minded observer would be, we must attribute to him or

her knowledge of the actual circumstances of the case."

46. In our view, in approaching the present case a significant matter must be his Honour's finding of fact as to the time when the Mareva affidavits reached his chambers. Counsel for Mr and Mrs Saunders did not seek to challenge the correctness of that finding. If we may say so, the logical force of the reasoning by which his Honour arrived at that finding is compelling.

47. There are two reasons for thinking his Honour erred in making the orders under appeal.

48. We have not seen the affidavits in question. But even if they contained allegations of the most discreditable conduct against Mr and Mrs Saunders, the fact remains that if the affidavits were read and their contents admitted they then would be evidence and nothing more. There is an important distinction between the present case and cases like Livesey and Spedley where what gives rise to apprehended bias is the fact that a judge has publicly expressed some view adverse to the complainant. In the present case however the judge had not expressed any view and at most had been presented with evidence which might, if accepted, support a conclusion that the complainant had been guilty of discreditable conduct. In trials before a judge sitting without jury, it is an everyday occurrence for evidence to be objected to and, after consideration, rejected by the judge. Such decisions usually cannot be made without the judge seeing the evidence, if it be in documentary form, or being appraised of its substance. Sometimes such evidence may be very damning to the party against whom it is tendered. Yet nobody suggests that a judge should thereby be disqualified from continuing to hear the case.

49. The same principle applies here. Even if, notwithstanding his Honour's finding, a reasonable person might apprehend that the judge might have seen material which might have been discreditable to Mr and Mrs Saunders, that person could not reasonably be satisfied of the ultimate link in the chain of reasoning essential for a conclusion of apprehended bias. That link is the inference that the judge, having seen evidence discreditable to Mr and Mrs Saunders (but of course irrelevant and inadmissible for the purposes of the substantive proceedings) would be influenced by that evidence in a way damaging to the interests of Mr and Mrs Saunders.

50. Of course his Honour, and the solicitors and counsel for GFC, recognised at the outset of the Mareva application that if he were to read the affidavits before pronouncing judgment in the substantive proceedings undesirable complications and misunderstandings could well arise. It was not his Honour's fault that the practical course he adopted to avoid even the appearance of that occurrence went awry. But the law has to be applied in the light of the actual events. The fact that it was reasonable to take precautions against an eventuality does not necessarily determine the legal consequences when that eventuality in fact happens.

51. The second reason arises from the fact that his Honour, at the invitation of all parties, including Mr and Mrs Saunders, tried the disputed issue of fact as to when the affidavits were filed. Thus what has sometimes been raised (for example by Mahoney JA in Spedley) as a theoretical and undesirable eventuality in fact occurred in this case. However, the learned judge can hardly be criticised for embarking on the trial of this issue. He was invited to do so by the parties. The alternatives were worse.

52. Witnesses gave evidence on oath and were cross-examined. His Honour handed down a reserved decision giving a reasoned explanation as to how he resolved the issue.

53. In deciding nevertheless to uphold the disqualification application his Honour relied on R v Sussex Justices; ex parte McCarthy (1924) 1 KB 256. That case is notable as the source of Lord Hewart's famous aphorism (at 259) that justice "should not only be done, but should manifestly and undoubtedly be seen to be done". Mr McCarthy was convicted by lay justices of dangerous driving. Prior to the hearing, a firm of solicitors wrote a letter of demand to him on behalf of two persons injured in the accident, the subject of the dangerous driving charge. The deputy clerk to the justices was a member of that firm. He retired with the justices when they considered their decision. In an affidavit sworn in the certiorari proceedings the justices stated that "in fact (they) came to their decision to convict the applicant without consulting the deputy clerk, who scrupulously abstained from referring to the case" (at 257). On the return of the rule nisi for certiorari, counsel for the justices argued (at 258) that however undesirable it may have been in the circumstances for the deputy clerk to retire with the justices, "the fact that he did so does not invalidate the conviction, seeing that he took no part in the justices' deliberations". On making the rule absolute Lord Hewart CJ said (at 258):

"It is said, and, no doubt, truly, that when that gentleman

retired in the usual way with the justices, taking with him

the notes of the evidence in case the justices might desire

to consult him, the justices came to a conclusion without

consulting him, and that he scrupulously abstained from

referring to the case in any way."

54. His Lordship, after making the observation about justice being seen to be done, continued:

"The question therefore is not whether in this case the

deputy clerk made any observation or offered any criticism

which he might not properly have made or offered; the

question is whether he was so related to the case in its

civil aspect as to be unfit to act as clerk to the justices

in the criminal matter. The answer to that question depends

not upon what actually was done but upon what might appear

to be done. Nothing is to be done which creates even a

suspicion that there has been an improper interference with

the course of justice. Speaking for myself, I accept the

statements contained in the justices' affidavit, but they

show very clearly that the deputy clerk was connected with

the case in a capacity which made it right that he should

scrupulously abstain from referring to the matter in any

way, although he retired with the justices; in other words,

his one position was such that he could not, if he had been

required to do so, discharge the duties which his other

position involved. His twofold position was a manifest

contradiction."

"It must be clearly understood that if justices allow their

clerk to be present at their consultation when either he or

his firm is professionally engaged in those proceedings or

in other proceedings involving the same subject matter, it

is irrelevant to inquire whether the clerk did or did not

give advice and influence the justices. What is

objectionable is his presence at the consultation when he is

in a position which necessarily makes it impossible for him

to give absolutely impartial advice."

56. The objective and indisputable fact on which Sussex Justices turned was the retirement with the justices of a deputy clerk who had an obvious interest in the outcome of the case. In the present case, the comparable facts are that Mr Westgate placed the affidavits in the file and Miss Bendall placed the file in his Honour's room. In itself that conduct of persons totally disinterested in the proceedings could not excite the apprehension of the most sensitive bystander or the most suspicious litigant. The only aspect which could have gotten an apprehended bias case off the ground was perhaps the question of timing. That issue, in contrast to anything which occurred in Sussex Justices, was the subject of a forensic contest and judicial determination. With respect to his Honour, this was not a case where the parties were asked merely to accept "the unsworn statements of a judge" as to a disputed question of fact.

57. The law usually sets its face against persons who seek to reopen issues determined by a court. It is no longer necessary to cite Latin maxims to support that self-evidently essential element of any system of justice. The law of issue estoppel is premised on such a principle. Indeed, even an issue which could have been raised, but was not, cannot be litigated in subsequent proceedings: Port of Melbourne Authority v Anshun Pty Ltd (No 2) [1981] HCA 45; (1981) 147 CLR 589.

58. Therefore it would be wrong in our opinion to give effect to a hypothetical belief by a bystander (supposedly reasonable and fair-minded) that his Honour's reasoned finding of fact could be ignored and replaced by irrational prejudice. Acceptance of judicial decisions, unless and until lawfully set aside, is fundamental to the rule of law. It would be paradoxical for courts themselves to reach a result which necessarily required the abandonment of that principle.

59. The conclusion is all the more stronger in the case of Mr and Mrs Saunders themselves. Through their counsel they joined in asking his Honour to determine the issue of fact and called evidence but did not attempt to argue before us that the finding was wrong.

60. It is regrettable that counsel continued with the submission even after they had had an opportunity to read the transcript of the hearing on 10 April and had appreciated that his Honour had announced that he should not be informed of the substance of the material until after he had pronounced judgment.

61. The appeals will be allowed and the orders made on 28 April 1994 set aside. There will be an order that Mr and Mrs Saunders pay the costs of GFC and Cocks of the appeals and of the application for disqualification.