HAGAN v INDEPENDENT COMMISSION AGAINST CORRUPTION

LOWER COURT Supreme Court - Common Law Division JURISDICTION : LOWER COURT SC 5584/2002 FILE NUMBER(S) : LOWER COURT Dunford J JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40715/02

MASON P HODGSON JA DAVIES AJA

Tuesday 8 April 2003 Patricia Agnus HAGAN v INDEPENDENT COMMISSION AGAINST CORRUPTION (ICAC)

JUDGMENT: On application for disqualification 1 MASON P: This Court has been constituted to hear together with other matters in our list today an application for leave to appeal. 2 The claimant, Mrs Hagan, has brought substantive proceedings in the Administrative Law List of the Common Law Division seeking prerogative relief against the Independent Commission Against Corruption. It relates to the manner in which the Commission has dealt with a compliant from the claimant which involves an allegation of corruption. 3 The complaint relates to proceedings known as Hagan v Waterhouse, the final judgment being reported in (1991) 34 NSWLR 308. An appeal from that decision to this Court was compromised. The trial judge was Kearney J, now and for some years a retired judge of the Supreme Court of New South Wales. 4 The application for leave to appeal relates to what I would describe as a procedural aspect of the substantive proceedings. Using that language I am not intending to suggest that it does not raise an important issue. 5 Application was made to Dunford J for orders that the substantive proceedings be determined only by a justice or justices not of the Supreme Court and for a further order that the means by which the aforesaid justice or justices be selected was to be such that the justices selected were "beyond political influence and the influence of the Australian Labor Party". Dunford J dismissed that application (see Hagan v Independent Commission Against Corruption [2002] NSWSC 686). It is from that dismissal that this application for leave to appeal is brought. 6 The claimant through her solicitor, Mr Waterhouse, has moved the Court for various orders which again I can describe loosely as being procedural. The substance of the point is the submission that there is a reasonable apprehension of bias. As developed, the submission was that a feeling of unfairness, in perception at least, would be felt if the present application were heard and determined by the presently constituted Court. 7 Mr Waterhouse has indicated that it is not suggested that any of the individual judges constituting the Court today had any personal involvement in the earlier litigation or the matters giving rise to the serious allegations that have been made arising out of it. 8 The application is however based upon two broad lines of submission. The first is that our very membership of the Supreme Court as justices and in the case of Davies AJA as an acting judge of appeal and an acting judge of the Court means that there would be a reasonable apprehension of bias if we were to determine the present application having regard to its subject matter. 9 Mr Waterhouse submits that, although the substantive proceedings concern the manner in which the Commission has handled the claimant's complaint, nevertheless the underlying matter of concern touches the Supreme Court. In one sense it certainly does because the allegation is a most serious one, even though as I understand the way it is framed it is one that is directed at the manner in which some improper influence was brought to bear upon a single judge of the Court or in relation to his appointment to hear the litigation itself. 10 Mr Waterhouse has very openly conceded, indeed advanced the argument that his concern is directed at any current member of the Supreme Court of New South Wales and (as I understand it) at least any presently appointed acting judge of the Supreme Court of New South Wales. 11 He brings the application for disqualification as a step towards bringing about a situation whereby it would become necessary, in order to deal with the very subject matter of the litigation in this Court, for as he would put it, some outside judge to be appointed at least as an acting judge of the Court to hear and determine the appeal and the application for leave to appeal. 12 The submission is that no member of the Court could be perceived by a fair minded lay observer to be capable of determining in accordance with law the subject matter of the litigation. 13 The second and more specific basis of the application relates to a particular argument that the claimant wishes to advance. 14 Correspondence passed between Mr Waterhouse and the Chief Justice in which submissions were made to the effect that the Chief Justice should use his offices to request the appointment of outside acting judges to hear and determine the present appellate proceedings. Questions were asked in the correspondence and answered by the Chief Justice in the correspondence relating to aspects of what had taken place in relation to the appointment of the judges who were constituted as the Court of Appeal to hear the proceedings that were reported as Heydon v NRMA Ltd (2000) 51 NSWLR 1. 15 Mr Waterhouse has foreshadowed the argument that the Chief Justice either misstated an aspect of the matter or failed to state a relevant aspect of the matter, with the consequence, so the argument goes, that Dunford J who himself referred to some of this correspondence was misled. So the issue which is foreshadowed is that we as judges of the Court will have to determine, the interpretation of the correspondence and stemming from that whether (it having become evidence in the proceedings before Dunford J) led his Honour into some appealable error. 16 The relevant test to be applied in a case such as the present where there is no suggestion of actual bias is stated in Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at 344. There in a joint judgment of Gleeson CJ, McHugh J, Gummow J and Hayne J, it was said that the governing principle is that: Subject to qualifications relating to waiver...or necessity...,a judge is disqualified if a fair minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide. That principle gives effect to the requirement that justice should both be done and be seen to be done, a requirement which reflects the fundamental importance of the principle that the tribunal be independent and impartial.

17 Applying that test in relation to the issues to be determined in this application I am of the view that a fair minded lay observer would not reasonably come to any such apprehension. That observer would be aware of the facts that judges daily determine legal and factual issues that are difficult and at times distasteful. That observer would if acting reasonably know or apprehend that, if a judge had any particular cause based upon some association or otherwise to perceive that he or she might not bring the requisite state of mind to the resolution of the question, then he or she would bring it to the fore and subject to hearing submissions, if necessary recuse. 18 The same observer would apprehend that appeal judges are every day of the week sitting in judgment in relation to the conduct of colleagues and that the discipline of sitting in public and giving reasons for decision is the spur and the guarantee of appropriate observance of the judicial oath. 19 The matters which have been foreshadowed do not lead me to think it is appropriate or proper that I should disqualify myself and I decline to do so. 20 HODGSON JA: I agree with the reasons given by the President and I adopt them as applying to my own decision. I do not for a moment believe that a fair minded lay observer might reasonably apprehend that I might not bring an impartial mind to the resolution of the questions raised by the application for leave to appeal. For that reason I would not disqualify myself from hearing the application. 21 DAVIES AJA: I agree with the remarks of the President and am of a like view.

JUDGMENT - On application for leave to appeal 22 MASON P: The judgment I gave earlier today provides the background to the application that is before the Court. The claimant seeks leave to appeal against the orders of Dunford J made in Hagan v Independent Commission Against Corruption [2002] NSWSC 686. 23 Application had been made by the claimant for orders set out in a notice of motion filed 18 January 2002 as follows: 1. That this matter be determined only by a justice/s not of this Court. 2. That the means by which the aforesaid justice/s be selected is such that the justice/s selected are beyond political influence and the influence of the Australian Labour Party to such further or other orders or relief as the nature of the case may require. 24 Dunford J made a declaration that the proceedings were not suitable for hearing by an acting judge and except to that extent dismissed the notice of motion. 25 It is from those orders that this application for leave to appeal is brought. Appellate proceedings are in relation to orders and not in relation to reasons except so far as reasons are translated into or are the basis of orders which are themselves the subject matter of the challenge. 26 The primary matter agitated before Dunford J was very similar to the primary matter agitated before us in the application that each member of this presently constituted Court should disqualify himself. The substantive point being advanced was that the orders sought were necessary because it would not be possible to find within the present constitution of the Supreme Court of New South Wales a judge who would be able to hear and determine the substantive issue. 27 Dunford J indicated why he could not accept such a blanket claim in paragraphs 13 and following of his reasons for judgment. Subject to one matter to which I will return I agree with what his Honour said there. The nub of the point is really similar to some of the issues that were agitated earlier today. Questions of recusal are matters to be determined in a particular context and by the judge appointed by due process to hear a particular case. The subject matter of the present litigation was not of such a nature as to provide any basis for a blanket disqualification of each and every judge and, I would add, acting judge presently a member of the Supreme Court of New South Wales. 28 His Honour at paragraphs 22-26 indicated that some of his reasons did not apply with the same force to acting judges and he referred to the statutory provisions dealing with the appointment and tenure of acting judges of the Supreme Court. His Honour expressed the view that this was not a suitable case to be tried by an acting judge. 29 Having expressed that view and in a context where his Honour was clearly satisfied that there would be no difficulty finding a permanent member of the Court who would not be obliged to disqualify himself or herself, his Honour made a declaration to which I earlier referred, namely that proceedings were not suitable for hearing by an acting judge. 30 This was in no way at the forefront of the claimant's argument before us. But the claimant accepted when it was pointed out to him that the declaration that had been made would (if read literally) frustrate the very object of his substantive complaint or allegation. It would preclude in form and terms the appointment of an acting judge who in the language that had been used in the argument was a total outsider to New South Wales. The claimant certainly does not wish to pre-empt that possibility. 31 I must say that I entertain considerable doubts as to whether it was open to his Honour to have made a formal and binding declaration in the terms that he did. It is one thing to say that the Court cannot by its processes compel the Governor to appoint acting judges to hear and determine proceedings before it. It is another thing entirely for the Court by its processes of declaration or order to pre-empt entirely the possibility of this occurring. 32 The matter was raised with counsel appearing for the Commission and the Court was informed that the Commission did not oppose the dissolution of that declaration. I will be proposing orders that will give effect to that. I reiterate that in doing that I am not endorsing or indicating any method whereby the balance of these substantive proceedings are to be heard. That will be a matter to be determined by the List Judge, the Chief Judge of the Division and the Chief Justice to the extent, if any, that each assumes any role in this matter in the appointing of a judge to hear the substantive matter. 33 I wish to make it plain that I am not indicating a view either way as to whether the substantive proceedings should be heard by a permanent judge or an acting judge, be he or she a presently acting judge of the Supreme Court or one that has not at this point in time been appointed. 34 The other substantive matter agitated before Dunford J related to the role of the Chief Justice in taking any steps to bring about a situation whereby the Governor appointed acting judges inter alia for the purpose of hearing a particular proceeding which was not appropriate to be heard and determined by a serving member of the Court. 35 It was in this context that we were referred to correspondence that had passed between the claimant's solicitor and the Chief Justice which informed the solicitor of information, most if not all of it already on record, dealing with the steps taken leading to the constitution of the Court that heard Heydon v NRMA Ltd. 36 The order that was being sought in the notice of motion was an order that a single judge of the Common Law Division make some order which directly or indirectly would require the Chief Justice to take some steps which directly or indirectly would bring about the appointment of an acting judge who could hear the substantive proceedings. 37 In that context, Dunford J referred to the provisions of the Supreme Court Act which confer powers upon the Chief Justice and the Chief Judge of the Common Law Division. It is in that context that he said in paragraph 11 of his reasons that section 39(2) of the Supreme Court Act did not confer any power on the Chief Justice or the Chief Judge of the Division to appoint or cause to be appointed or to compel the Governor to appoint any person or any class of person as a judge of the Court. 38 I think Mr Waterhouse has misunderstood what his Honour was saying here because he was stating that there was no power conferred by the Supreme Court Act which would enable the Chief Justice acting in his office as such to do any of the matters referred to. 39 The claimant submits through her solicitor that the Chief Justice, indeed anyone may petition the Attorney General and through the Attorney General, the Governor concerning the appointment of anyone to judicial or other office. To recognise that fact has nothing to do with any power conferred by the Supreme Court Act or any other law upon the Chief Justice as Chief Justice. 40 Dunford J was saying and in my view he was perfectly correct in saying, that no judge had any power to order the Chief Justice to take any step in relation to the appointment of a judge of the Supreme Court. 41 I agree with his Honour's reasons in that portion of his reasons for judgment. 42 Accordingly for these reasons I propose the following orders.

1. Grant leave to appeal limited to the challenge to the declaratory order made by Dunford J. 2. Uphold the appeal and set aside the said declaration. 3. Otherwise refuse leave to appeal. 4. Claimant to pay the opponent's costs of the application. 43 I propose the costs order that I have because the application in substance has failed and was doomed to fail. 44 HODGSON JA: I agree with the orders proposed by the President and with his reasons. There were in substance three errors suggested in the primary judge's decision. 45 The first related to comments made on the evidence. Those comments did not relate to or support the orders ultimately made and could not have amounted to errors vitiating the decision. 46 The second substantial complaint was an alleged factual error in asserting that the Chief Justice does not have power to arrange the appointment of a judge. It was submitted that the Chief Justice is in a position to recommend to the executive the appointment of a judge and is in such a position that that recommendation is likely to be adopted. 47 In my opinion the primary judge was talking about actual legal power and not the question whether the Chief Justice could make recommendations. In any event this again was not the substantial basis of the decision, which was that no case of apprehended bias against every judge of the Supreme Court had been made out. 48 The third suggested error was a statement that judges cannot be subject to political influence. That statement has to be read in the context of the submission being dealt with, namely a submission that because there is presently a Labor government in power in New South Wales the government may exert influence over the judges of the Court. 49 The primary judge was showing how that submission was baseless because of arrangements concerning the appointment and removal of judges. So interpreted, there was no error in that statement. 50 As I have said, I concur in the orders proposed by the President. 51 DAVIES AJA: I agree with the President and with the orders proposed. 52 MASON P: The orders of the Court will be as I have indicated.

JUDGMENT - On paragraph 3 of the notice of motion 53 MASON P: When the matter was before me for directions on 7 March 2003, Mr Waterhouse foreshadowed that his client would object to the constitution of the Court no matter who was constituted to hear it. 54 He was directed to file a notice of motion supported by an affidavit in support of that application. No leave was given nor directions given concerning any wider form of interlocutory motion. 55 In any event, the relief that is sought in paragraph 3 which is to the effect that the whole matter be remitted to the Independent Commission Against Corruption with that Commission being ordered to take certain steps in relation to it is, as Hodgson JA has pointed out in argument, part of the substantive relief sought in the substantive proceedings which are not before this Court in this application which concerns what I have previously described as the procedural aspects of the substantive proceedings. 56 It is unnecessary to consider whether the Supreme Court however constituted would have power to give relief in accordance with paragraph 3 of the notice of motion, but for the reasons I have indicated I propose that that paragraph and the balance of the notice of motion be dismissed with costs. 57 HODGSON JA: I agree. 58 DAVIES AJA: I agree.

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