Goldsworthy v Local Court of New South Wales [2013] NSWSC 459 | Case summary

Judgment 1HIS HONOUR: These proceedings concern the decision of a magistrate to disqualify himself from the further hearing of civil proceedings in the Local Court that had occupied some seven days. It is the plaintiff's contention that the magistrate should not have disqualified himself and erred in law in deciding to do so. 2The plaintiffs seek declarations and consequential orders in the nature of mandamus and certiorari pursuant to ss 65 and 69 of the Supreme Court Act 1970. 3It is the current practice in litigation for evidence to proceed by way of affidavits that are read and tendered. This case emphasises the need for barristers and solicitors to rigorously ensure that the material contained in tender bundles is confined to that which is admissible and any affidavits that are not read are not before the judicial officer. The orders sought 4By a summons filed on 17 October 2012 Allan Goldsworthy, Robert Ingram, Anthony George Jamieson, and Rory McCrudden, (the plaintiffs), seek the following relief: (1)"An order that the hearing of this summons be expedited. (2)A declaration that the orders made on 13 July 2012 by Magistrate Bradd recusing himself from further hearing of Local Court proceedings number 92137 of 2007 were beyond the power of the learned magistrate and constitute and [sic] error in the exercise of jurisdiction. (3)A declaration that the orders made on 13 July 2012 by Magistrate Bradd recusing himself from further hearing of Local Court proceedings number 92137 of 2007 were based upon an error of law. (4)An order that the record in Local Court proceedings number 92137 of 2007 be corrected by quashing the orders made on 13 July 2012 by Magistrate Bradd. (5)An order that Magistrate Bradd continue to hear and finally determine Local Court proceedings number 92137 of 2007 according to law by entering judgment in favour of the Plaintiffs together with an order for costs in favour of the plaintiffs. (6)An order that the second defendant pay the costs of these proceedings (7)Such further or other order as the nature of the case requires". 5Mr McCulloch SC appeared on behalf of the plaintiffs and Mr Burchett for the second and third defendants namely East Coast Properties Pty Ltd and Frank Santisi. The Local Court of New South Wales, the first defendant, submits to any orders this court might make. Background 6The genesis of the proceedings in the Local Court is a dispute between barristers arising from the formation of "Sydney Chambers", situated at 181 Elizabeth Street, Sydney. There were six plaintiffs in the Local Court whereas there are four in this Court. The explanation for the difference is that Marcel Sahade and Evan Smith did not wish to participate in the present proceedings. Mr Smith is now deceased. 7In an amended statement of claim, the plaintiffs pleaded that Mr Santisi was the sole director and effective controller of East Coast Properties Pty Ltd (East Coast). The plaintiffs alleged that Mr Santisi on behalf of himself and East Coast offered to the second, third, fourth, fifth and sixth plaintiffs and Ross Hanrahan, another barrister, an equal shareholding in East Coast for the purpose of using that company as the corporate vehicle for the establishment of Sydney Chambers. The offer was accepted and monies were paid for one month's rent and set-up costs. The plaintiffs allege that bond monies were paid and that Mr Hanrahan subsequently transferred his rights and entitlements in East Coast to Mr Goldsworthy. The plaintiffs claimed that Mr Santisi breached the agreement by: (1) failing to register their beneficial holdings in East Coast; (2) making unauthorised payments from the East Coast bank account; (3) failing to return the bond monies; (4) causing East Coast to cease being the lessee of Sydney Chambers which caused the plaintiffs to expend monies to incorporate a company to continue operating at the same address; and (5) failing to return monies in the East Coast bank account. In the alternative, the plaintiffs pleaded breaches of s 52 Trade Practices Act 1974 (Cth) and s 42 Fair Trading Act 1987. 8In a defence to the amended statement of claim, the second and third defendants pleaded that Mr Santisi caused East Coast to issue an application to apply for one share in the company to each of the plaintiffs and Mr Hanrahan, but only Mr Hanrahan and Mr McCrudden executed the application. The defendants alleged that Mr Ingram and Mr Jamieson agreed to accept the obligations set out in the document but did not wish to apply for shareholdings. The defendants pleaded that, in consequence of not all floor members being shareholders, East Coast would incur expenses on behalf of floor members and expenses incidental to operating the chambers on the condition of reimbursement by the plaintiffs. 9The defendants claimed that the other parts of the agreement included Mr Santisi's sole authority to direct East Coast; that East Coast was entitled to perform an accounting with which the floor members would co-operate; and that no floor member would make use of an employee of East Coast in an improper way, and if a floor member did so, that member would be personally liable for the whole of the costs and expenses. The defendants denied the plaintiffs' assertions of breach. 10By a second further amended cross-claim in which the six plaintiffs and Mr Hanrahan were joined as cross-defendants, East Coast and Mr Santisi (the cross-claimants) claimed that as a consequence of the agreement each of the cross-defendants owed specific amounts that were detailed in the cross-claim. Alternatively, the cross-defendants had been unjustly enriched and East Coast and Mr Santisi were entitled to restitution. The cross-claimants asserted that each of the plaintiffs represented by their conduct that they had accepted an obligation to reimburse and indemnify the cross-claimants, which representations had been accepted and the cross-defendants were estopped from denying the agreement or liability. In a defence to the cross-claim, the cross-defendants denied that East Coast and Mr Santisi were entitled to the amounts claimed. 11The proceedings were heard over seven days in December 2010, March 2011 and May 2012 before Bradd LCM. In a judgment delivered on 17 November 2011, his Honour said at [19]-[21]: "The parties have requested that liability be determined first. The judgement only determines liability in areas that the parties have sought a determination. The plaintiffs seek a determination in relation to: (1) The recovery of the bank guarantee monies; (2) Damages or restitution with respect to an administrative fee of $400 per month; and (3) Damages or restitution with respect to undisclosed charges to supplement fees otherwise payable by Mr Hanrahan. The cross-claimants seek a determination in relation to; (1) Damages or restitution with respect to monies owed by each of the cross-defendants; and (2) Estoppel." 12It appears from the reasons for judgment that his Honour's findings included that: (i) The bank guarantee monies were recoverable by the plaintiffs; (ii)East Coast and Mr Santisi were to restore each of the plaintiffs to their original position with respect to the administrative fee of $400 per month; and (iii)Damages with respect to undisclosed charges to supplement fees otherwise payable by Mr Hanrahan could not be made out. 13As to the cross-claim, his Honour found that the cross-defendants were not liable to pay any of the specified expenses or liabilities, except for goods and services tax and the claim for estoppel failed because the representations relied on by East Coast and Mr Santisi were not made out. 14No determination was made as to the plaintiffs' claim under s 52 of the Trade Practices Act as the magistrate said that the plaintiffs' assertion that East Coast was acting in trade and commerce was not addressed in closing submissions. Leave was granted to either party, if they wished to make submissions on this question to restore the matter to the list on seven days notice. 15East Coast and Mr Santisi applied on 15 May 2012 to have the magistrate disqualify himself. The basis of the application was that his Honour had inadvertently considered in his judgment an affidavit of Trevor Hall, a solicitor, sworn on 13 February 2008 that was not in evidence. 16The hearing in the Local Court had proceeded by way of affidavit and oral evidence. Mr Hall's affidavit had been included in the plaintiffs' tender bundle, but notice had been given that he was required for cross-examination. As Mr Hall was not produced for cross-examination, his affidavit was not read, but was unintentionally not removed from the tender bundle. 17Mr Hall's affidavit included the following: "4. On an occasion in late March or early April 2007 Fiona [Gorrick] came to my office. Fiona said to me "Frank Santisi has just asked me to add extra amounts to the floor fees this month and to hide it from the other barristers at the Chambers". 18One of the issues at the hearing was Mr Santisi's claim for an administration fee of $400 per month. Briefly stated, Mr Santisi gave evidence that he told floor members that he was spending too much time on the bookkeeping for the floor, and if the situation continued he intended charging an administration fee. Following the floor receptionist's resignation in December 2006, Mr Santisi said that he told Mr Jamieson and Mr McCrudden he was going to charge an administration fee, and they both agreed. He said that he later reiterated to each member his intention to set-off an administration fee against fees charged to himself. It was his evidence that he instructed Fiona Gorrick that he had told the other barristers that he was charging an administration fee and it would be put on their monthly accounts as an administration fee. 19It was the plaintiff's case that they had not been told of the administration fee. 20Ms Gorrick gave evidence that in about March 2007, Mr Santisi told her that he was charging a fee for his time, that she was to add $400 to the expense item "other expenses", and that he did not want the expenses stated in the accounts. She said that Mr Santisi said to her, "Don't tell anyone about it". 21In considering the claim for an administration fee, the magistrate said at [108] - [109]: "Mr Hall, a principal solicitor, has sworn an affidavit, which states that in late March or early April 2007, Ms Gorrick came to his office and told him that Mr Santisi had asked her to add extra amounts to floor fees this month and hide it from the other barristers in the chambers. She told him that Mr Santisi wanted to add a $400 accounting fee to the barristers accounts, as well as an extra fee to cover Mr Hanrahan, and that the figures were not to be represented in the accounts and she was not to mention it to the other barristers; after which, he gave her certain advice. I conclude that Mr Santisi did not have the agreement of any of the plaintiffs to charge a monthly administration fee. The accounting treatment of the administrative fee was such that it was not disclosed on each member's monthly account, which supports the contention of Ms Gorrick. I find the evidence of Ms Gorrick to be persuasive, her evidence is corroborated by Mr Hall, and she kept contemporaneous notes of the instructions she received from Mr Santisi." 22Further reference was made to Mr Hall's affidavit when his Honour came to consider the cross claimants' claim for damages or restitution with respect to undisclosed charges to supplement fees otherwise payable by Mr Hanrahan. His Honour said at [114] and [116] - [117]: "Mr Hall, a principal solicitor has sworn an affidavit, which states in late March or early April 2007, Ms Gorrick came to his office and told him that Mr Santisi had asked her to add extra amounts to floor fees this month and hide it from the other barristers in the chambers. She told him that Mr Santisi wanted to add a $400 accounting fee to the barristers accounts, as well as an extra fee to cover Mr Hanrahan, and that the figures were not to be represented in the accounts and she was not to mention it to the other barristers; after which, he gave her certain advice. ... I conclude that there was no agreement about member's contributing to a levy to cover the outstanding fees of Mr Hanrahan. The evidence of Ms Gorrick is credible. It is corroborated by Mr Hall. Her evidence is consistent with the accounting treatment of the levy". 23In written submissions, Mr Santisi contended that the magistrate should disqualify himself for apprehended bias. The "compelling inference" was said to be that not only had Mr Santisi's evidence been discounted on evidence which should not have been considered, but had also affected the judicial officer in making an assessment of his evidence where it was at odds with the plaintiffs and Mr Hanrahan. Mr Santisi argued "that the fair-minded lay observer could not help but conclude the real possibility of the judge not bringing an impartial and unprejudiced mind even when the evidence of Mr Hall is expunged from the judges [sic] mind giving the findings of fact already made against the Cross Claimants and the further decisions to be made to conclude the hearing ..." (Mr Santisi's affidavit 23/11/12 annexure A p 25 par 5c) 24In further submissions, Mr Santisi contended that the magistrate had ignored documentation that had contradicted Ms Gorrick's evidence as he had regard to the evidence of Mr Hall which was not in evidence. He submitted that the magistrate's mind had been polluted "as to the integrity or lack of in the case of Mr Santisi which outcome would not have been likely had the court not read material that was not in evidence." Mr Santisi suggested that actual bias was raised in the sense that there was no adequate explanation why documentary evidence that contradicted Ms Gorrick was ignored (Mr Santisi's affidavit 23/11/12 annexure B par 23). 25The plaintiffs in written submissions contended that the only fact verified or corroborated by Mr Hall's affidavit was Ms Gorrick's evidence that Mr Santisi told her not to tell the other barristers about the extra charges. The plaintiffs submitted that leaving Mr Hall's affidavit aside, there was enough evidence upon which the court could come to the conclusive finding that Mr Santisi had instructed Ms Gorrick not to tell the other barristers about these additional charges. The plaintiffs argued that Mr Santisi had not pointed to any evidence that could or might demonstrate that his Honour had erred in his assessment that Ms Gorrick was a credible witness. The plaintiffs submitted that Mr Santisi had not been denied procedural fairness. Furthermore, Mr Burchett, the defendants' counsel, had cross-examined the gravamen of Mr Hall's affidavit into evidence by eliciting evidence from Ms Gorrick that she was being asked to do "the wrong thing" and in effect, that she spoke to Mr Hall about that. 26In a judgment delivered on 13 July 2012, the magistrate noted that he had read the parties written submissions. He referred in general terms to Mr Santisi's submission that he recuse himself from the hearing. His Honour remarked at [10] that "[g]iven the length of time between the tender of the affidavit and the close of the case for the plaintiffs/cross-defendants, it is understandable that counsel for the plaintiffs/cross-defendants might have forgotten about [Mr Hall's affidavit]." 27His Honour concluded at [11]: "The oversight has led to a procedural unfairness, which can only be cured by me recusing myself from further hearing the case." 28The magistrate at [12] directed the parties to make a request to the office of the Chief Magistrate if a party sought "a continuance" of the hearing. Argument on appeal 29The plaintiffs contended that the sole basis for the magistrate's recusal was that he had erred in referring to and relying upon Mr Hall's evidence that was not before him in the proceedings, which could not be a proper basis for recusal and was an error of law. The plaintiffs submitted that recusal is a step to be taken only in limited cases, which does not include error in the consideration of material which was not in evidence. The plaintiffs argued that the incorrect reference to and reliance upon material that is not in evidence is not an act of impartiality but an error in the identification of relevant evidence which may give rise to a ground of appeal. 30The plaintiffs submitted that the magistrate's recusal was a "jurisdictional error" in the sense discussed in Kirk v Industrial Relations Commission of NSW [2010] HCA 1; (2010) 239 CLR 531. It was argued that the magistrate's decision shows that he misunderstood the nature of his power and purported to exercise a power when he did not have a proper jurisdictional basis to do so. Furthermore, he could have determined the case by delivering a second decision in which he made it clear that he arrived at the same conclusion without reference to Mr Hall's affidavit. 31In the alternative, the plaintiffs contended that the application for recusal should have failed on the material argued before the magistrate. A further submission was that the doctrine of necessity applied as the case had lasted for seven hearing days with a further hearing day to deal with the recusal application and the Local Court traditionally had difficulty dealing with civil matters. There is, it was said, a need for a speedy determination consistent with s 56 Civil Procedure Act 2005 and the magistrate should have continued to determine the matter by entering judgment for the plaintiffs together with an order for costs. Section 65 of the Supreme Court Act was said to provide the court with "broad powers" to require any person to fulfil any duty. 32The second and third defendants submitted that s 65 does not change the substantive law or materially enlarge the circumstances, in which relief of the nature of mandamus can be given, namely where there is found to be an excess or want of jurisdiction. The second and third defendants were of the view, with respect to s 65, that the plaintiffs need to demonstrate that there has been a fundamental mistake by the magistrate as to the scope of his power which is impossible as the decision to disqualify on the grounds of apprehended bias is a decision that is within his jurisdiction and the magistrate understood his task. 33It was submitted that the fifth order sought by way of mandamus goes well beyond commanding the magistrate to perform his duty to hear the proceedings and extends impermissibly to tell him how to perform it. 34As to s 69 Supreme Court Act, the second and third defendants submitted that the magistrate's interlocutory decision to recuse himself did not dispose of any rights, was not an 'ultimate determination', and was not susceptible to review by way of certiorari. 35Another issue raised by the second and third defendants was that Mr Sahade and Mr Evan's Estate should have been joined as defendants, if not as plaintiffs. It was also said that Mr Hanrahan, as a cross-defendant, should have joined in these proceedings. 36It is convenient to deal now with this issue. Prior to his death, Mr Smith signed a letter expressing his wish not to participate in the present proceedings and that he would abide by the decision of the court. The plaintiffs were granted leave to file in court a letter in the same terms that had been signed by Mr Sahade (ex B). Both Mr Evans (before his death) and Mr Sahade have in effect submitted to the orders of the court. 37There is neither a potential adverse order that can be made against Mr Sahade and Mr Evan's Estate nor is it suggested that the plaintiffs are unable to meet a costs order if the summons is dismissed. As to Mr Hanrahan, it was the cross-claimants who joined him as a cross-defendant and he did not actively participate in the Local Court proceedings. 38Part 6, r 6.20(1) Uniform Civil Procedure Rules 2005 provides: "(1) Unless the court orders otherwise, all persons jointly entitled to the same relief must be joined as parties in any claim for that relief that is made by any one or more of them." 39The obligation to seek to give effect to the overriding purpose of the Civil Procedure Act (s56(2)) and to act in accordance with the dictates of justice (s 58) points plainly to the conclusion that no other persons or Mr Evan's Estate ought to have been joined as a party in the present proceedings. I reject the second and third defendants' argument. 40In written submissions, the second and third defendants referred to the plaintiffs' summons being filed out of time but I do not think it is necessary to consider this issue which was not developed further in oral argument. Disqualification for bias - legal principle 41The test of apprehension of bias is whether a fair-minded lay observer might reasonably apprehend that a judicial officer might not bring an impartial and unprejudiced mind in determining the issues for decision: Michael Wilson & Partners v Nicholls [2011] HCA 48; (2011) 244 CLR 427; Johnson v Johnson [2000] HCA 48; (2000) 201 CLR 488 at [11]; Barakat v Goritsas (No 2) [2012] NSWCA 36 at [7]-[11]; In the matter of Cheal Industries Pty Ltd; Fitzpatrick v Cheal [2012] NSWSC 812 at [23]. 42The application of this test requires two-steps: (1)Identifying what it is said that might lead the judicial officer to decide a case or legal question other than on its legal and factual merits (Ebner v Official Trustee in Bankruptcy [2000] HCA 63, (2000) 205 CLR 337 at [8], In the matter of Cheal Industries Pty Ltd; Fitzpatrick v Cheal at [23]; and (2)Articulation of the logical connection between the matter identified and the feared deviation from the course of deciding the question other than on its merits (Ebner v Official Trustee in Bankruptcy at [8], as recently confirmed by the High Court in Michael Wilson & Partners Ltd v Nicholls at [31], [63]). 43In Spencer v Bamber [2012] NSWCA 274 Campbell JA (with whom Basten JA & Macfarlan JA agreed) referred to the conceptual difference between actual and apprehended bias. His Honour said at [106] - [107]: "There is a conceptual difference between apprehended bias and actual bias. The difference emerges in the discussion by Gleeson CJ, McHugh, Gummow and Hayne JJ in Ebner at [7] of what apprehended bias is not: 'The apprehension of bias principle may be thought to find its justification in the importance of the basic principle, that the tribunal be independent and impartial. So important is the principle that even the appearance of departure from it is prohibited lest the integrity of the judicial system be undermined. There are, however, some other aspects of the apprehension of bias principle which should be recognised. Deciding whether a judicial officer (or juror) might not bring an impartial mind to the resolution of a question that has not been determined requires no prediction about how the judge or juror will in fact approach the matter. The question is one of possibility (real and not remote), not probability. Similarly, if the matter has already been decided, the test is one which requires no conclusion about what factors actually influenced the outcome. No attempt need be made to inquire into the actual thought processes of the judge or juror.' (emphasis in original) The actual thought processes of the judge need only be enquired into in deciding whether a judge has been actuated by actual bias..." 44Basten JA further said in Spencer at [16]: "... the focus of attention differs in a claim of actual bias, as compared with a reasonable apprehension of bias. In the former case it is the actual state of mind of the judge (or juror) which is in issue; in the latter case, the focus is on the apprehension of the fair-minded bystander. The latter test is usually easier to satisfy, particularly where the evidential basis is limited to statements made by the judicial officer in the course of the proceedings: see Michael Wilson & Partners Ltd v Nicholls [2011] HCA 48; (2011) 244 CLR 427 at [33]." 45There is a general principle that an application for disqualification should be made as soon as reasonably practicable after the party seeking disqualification becomes aware of the relevant facts otherwise the right to do so may be waived: Vakauta v Kelly [1989] HCA 44; (1989) 167 CLR 568 at [572], [587]; Cassegrain v Commonwealth Development Bank of Australia Ltd [2003] NSWCA 260 at [52]. Decision 46At the core of the proceedings in the Local Court was his Honour's assessment of the honesty and reliability of the evidence that was before him. Mr Santisi's recollection of events was diametrically opposed in important respects to the evidence given in the plaintiffs' case. Testimony that tended to support an account, which was contrary to Mr Santisi's evidence, had significance in undermining his credibility. It is evident from his Honour's reasons for judgment that he found that the contents of Mr Hall's affidavit supported Ms Gorrick's account that Mr Santisi had told her not to tell the other barristers about the administration charge. As her account spoke of the improbity of Mr Santisi's conduct, Mr Santisi's complaint to the magistrate that there was a compelling inference that his evidence had not only been discounted by the consideration of Mr Hall's affidavit, but had affected his Honour's assessment of his evidence where it was otherwise at odds with the plaintiffs had substance. 47One of the arguments advanced by Mr McCulloch was that Mr Hall's affidavit was "no more than a make weight" and "could be easily excised" (T20/3/13 p 7 L 5-6). Whilst it was possible for the magistrate to accept Ms Gorrick's evidence without resorting to the unread affidavit, his Honour did not do so. He expressly referred to it in the passages of his judgment quoted at [21]-[22] above. Another argument was that Ms Gorrick was cross-examined by Mr Burchett in the Local Court to confirm what Mr Hall had put in his affidavit. It appears from the extract of the cross-examination (JW6) that Mr Burchett did ask the witness about making an accusation to Mr Hall, but she was not taken to the content of Mr Hall's affidavit. I do not think that the gravamen of the affidavit was cross-examined into evidence. 48The extent to which Mr Hall's affidavit actually influenced the outcome and impacted upon his assessment of Mr Santisi is only known to the magistrate, but by finding that it "corroborated" Ms Gorrick's evidence, his Honour decided the case other than on its legal and factual merits. 49In written submissions to the magistrate and this court, there was disagreement as to the matters that had not been determined by his Honour in the judgment delivered on 17 May 2011. The plaintiffs put to me that his Honour had upheld the plaintiffs' claim and dismissed both the defence and cross-claim, leaving as the sole issue the plaintiffs' claim under s 52 Trade Practices Act. I was informed that the plaintiffs did not wish to proceed with this alternative claim, leaving the calculation of damages, the awarding of interest and the question of costs, "including a special order for costs" (PWS par 23). 50On the other hand, the defendants contended that unresolved issues included the resolution of the administration fee "by reference to the implied agency"; the "legal fees in the Gorrick matters by reference to the law of implied agency and implied authority and implied right of indemnity" and "the right to set off of the wages, superannuation and other expenses". Other issues that were unresolved, were said to be the costs to be awarded to the defendants for "the plaintiff's failed claims ...and all such other matters in the pleadings not pressed" and "to at least give the first defendant costs...as arising from the setoff and accounting required" (Mr Santisi's affidavit 23/11/12 annexure A p 22 par ZZ). 51Mr Burchett said in oral submissions that there was a need for the magistrate to look at "accounting issues" that were "in fact live issues of liability because they concern this reconstruction that was required by Mr Santisi of the accounts which had gone missing, and whether or not the expenses that he says he levied were [in fact] levied..."(T20/3/13 p 15 L 7-14). 52Mr McCullough agreed that the questions that had been raised as to the defendants' entitlement to costs orders remained but the other issues had been dealt with in the magistrate's judgment. 53The proceedings before the magistrate were conducted in a curious way. As stated in his Honour's judgment in the passage quoted at [11] above, the judgment "only determine[d] liability in the areas that the parties have sought a determination." No formal orders were made entering judgment for the plaintiffs (with damages to be assessed) and for the dismissal of the cross-claims. When his Honour disqualified himself, he referred at [1] to the judgment previously delivered as being "an interlocutory judgement." The terminology used by the magistrate bespeaks a lack of finality. 54Mr Burchett recalled that "confronted with a large amount of material that concerned, in a way, accounting issues, his Honour was thought to deal with effectively preliminary issues to the consideration of the bulk of the material in the hope that ...would set the parameters within which the parties could agree, or a reference out to an accountant..." (T20/3/13 p 15 L 28-34). 55It is not possible on the material before me to identify precisely what matters remained unresolved in the Local Court. In any event, it is evident that not all matters, other than damages and interest, had been decided. Having received submissions from the parties as to the matters to be determined, his Honour made no attempt in delivering his judgment on disqualification to define what issues remained. Furthermore, neither the special costs order sought by the plaintiffs nor the defendants' claims for costs and a set-off are uncontroversial. His Honour, it also appears, had not been informed that the plaintiffs did not intend to proceed with the claim under the Trade Practices Act. 56It seems to be that a fair-minded lay observer might reasonably apprehend in the circumstances of this case that the magistrate might not bring an impartial and unprejudiced mind in determining whatever issues that remained for decision. 57The magistrate did not make a finding of actual or a reasonable apprehension of bias, but disqualified himself as "[the] oversight [had] led to a procedural unfairness" which in his Honour's view could only be cured in that way. His Honour's mindfulness of procedural unfairness was apposite. He made findings on credibility, which were based, at least in part, on material that was not in evidence. In Selstsam Pty Limited v Ghaleb [2005] NSWCA 208; (2005) 3 DDCR 1 Mason P observed at [5]-[7]: "Where an adjudicator hears evidence or receives argument from one side behind the back of another there will be want of procedural fairness without inquiring into the probative impact of that evidence or representation. The same goes for a refusal to entertain a relevant argument that one party wishes to put, is stopped from putting, and later turns out to have been rejected. The reasons are twofold, tracking the twofold function of the doctrine as identified above. First, the appearance of fairness has been shattered in a material respect. As Lord Denning put it on behalf of the Judicial Committee of the Privy Council in Kanda v Government of Malaya [1962] AC 322 at 337-8: The court will not inquire whether the evidence or representations did work to his prejudice. Sufficient that they might do so. The court will not go into the likelihood of prejudice. The risk of it is enough. No one who has lost a case will believe he has been fairly treated if the other side has had access to the judge without his knowing. Secondly, there is virtually no means of discovering the impact of the secret material upon the mind of the adjudicator without transgressing the very assumptions underlying the doctrines of procedural fairness and of judicial (or limited appellate) review..." 58The plaintiffs' argument on necessity was founded on an archaic view of the Local Court, which has the capacity, particularly at the Downing Centre, to hear civil matters expeditiously. The overriding purpose of the Civil Procedure Act to facilitate the just, quick and cheap resolution of the real issues in dispute would have been better served by a new hearing before another judicial officer in the Local Court, rather than by bringing these proceedings in the Supreme Court. 59In my opinion, the magistrate was entitled to disqualify himself in the interests of justice, including its appearance. His Honour did not make a wrong ruling. He did not misapprehend the limits or functions of his powers nor did he lack the power to do what he did: Craig v South Australia (1995) 184 CLR 163; [1995] HCA 58; Re Refugee Review Tribunal; Ex parte Aala [2000] HCA 57; (2000) 204 CLR 82; Kirk v Industrial Relations Commission of NSW. His Honour's decision to disqualify himself was neither a jurisdictional error nor an error within jurisdiction. There is neither error on the face of the record nor was the magistrate's decision to disqualify himself an "ultimate determination". As a consequence, the powers of this court under s 65 and 69 of the Supreme Court Act are not engaged. 60I do not know what his Honour meant by "a continuance" of the hearing (see [28] above). The proceedings are to be re-heard by another magistrate. A sensible approach that might be adopted is that, by agreement the re-hearing be conducted as much as possible on the transcript. It is a pity that this unhappy dispute between barristers has not otherwise been resolved. Orders 61I make the following orders:

The summons is dismissed.
The plaintiffs are to pay the costs of the second and third defendants.

Goldsworthy v Local Court of New South Wales

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