Hancock v Hancock Prospecting Pty Limited

Catchwords

(2021) 64 Fam LR 94 Daley v Donaldson [2022] NSWCA 96 Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 214 CLR 496[2003] HCA 26 Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337[2000] HCA 63 Hockey v Yelland (1984) 157 CLR 124[1984] HCA 72 Jaycar Pty Ltd v Lombardo [2011] NSWCA 284 Kirk v Industrial Court of New South Wales (2010) 239 CLR 531[2010] HCA 1 Ku-ring-gai Council v Ichor Constructions Pty Ltd (2019) 99 NSWLR 260[2017] NSWCA 206 Smith v East Elloe Rural District Council [1956] AC 736[1956] 1 All ER 855 The Age Company Ltd v Liu (2013) 82 NSWLR 268

Judgment (11 paragraphs)

[1]

Principal judgment Parties: John Langley Hancock (First applicant) Bianca Hope Rinehart (Second applicant) Hancock Prospecting Pty Ltd (First respondent) Hancock Minerals Pty Ltd (Second respondent) Tadeusz Watroba (Third respondent) Westraint Resources Pty Ltd (Fourth respondent) HMHT Investments Pty Ltd (Fifth respondent) Hope Downs Iron Ore Pty Ltd (Sixth respondent) Roy Hill Iron Ore Pty Ltd (Seventh respondent) Mulga Downs Iron Ore Pty Ltd (Eighth respondent) Georgina Hope Rinehart (Ninth respondent) 150 Investments Pty Ltd (Tenth respondent) Hope Rinehart Welker (Eleventh respondent) Ginia Hope Frances Rinehart (Twelfth respondent) Hancock Family Memorial Foundation Ltd (Thirteenth respondent) Mulga Downs Investments Pty Ltd (Fourteenth respondent) Representation: Counsel: DFC Thomas SC, DP Hume, and TM Rogan (Applicants) N Hutley SC, J Hutton, K Sutton, and P Springthorpe (First to Eighth Respondents) PD Herzfeld SC and HD Ryan (Ninth and Tenth Respondents)

JUDGMENT

BRERETON JA: The relevant background to this application for leave to appeal from a judgment in the Commercial List [1] refusing to declare, in the exercise of cross-vested jurisdiction under s 13(4) of the Commercial Arbitration Act 2012 (WA) ("the WACA Act"), that there were justifiable doubts as to the impartiality or independence of a member of an arbitral tribunal, said to arise from the circumstance that his now wife had at an earlier time, and when in a relationship with him, acted for one of the parties now involved in the arbitration in connection with transactions that will be relevant to the arbitration, are set out in the judgment of Mitchelmore JA, which I have had the benefit of reading in draft.
There is no more close and confidential relationship than the personal relationship between spouses. It is therefore unsurprising that it might ordinarily be regarded as unwise if not impermissible for a judge to hear a case with which his or her spouse has, or has had, any connection. In Charisteas v Charisteas, the High Court held that a non-intimate social relationship between a judge and a party's barrister, involving communications between them during but unrelated to the substance of the case, which were not disclosed to other parties, created a reasonable apprehension of bias in the mind of a fair-minded observer, and that the Full Court of the Family Court had erred in applying a test of a fair-minded observer who was conceived of as a lawyer rather than a layperson. [2] Perhaps closer to the present circumstances, in a case which is unreported but was well known and widely publicised at the time, and is noted in Forbes' Justice in Tribunals, a Family Court judge was held to be disqualified by apparent bias where she had heard and determined a matrimonial property dispute "while in an intimate relationship with a solicitor who had previously handled the wife's case" (emphasis added), without disclosing it. [3] Both those cases were decided according to the applicable test for ostensible bias referred to in Ebner v Official Trustee in Bankruptcy. [4] Whether that test, had it been applicable, would have resulted in a different outcome in this case, which involves not a judge but an arbitrator, and where the question was whether "there is a real danger of bias on the part of the arbitrator in conducting the arbitration", [5] does not presently arise.
The first question is whether the application for leave to appeal is incompetent, [6] by reason that the judgment below is "final" and unappealable by operation of s 13(5) of the WACA Act, at least insofar as it was not outside "the limits of the authority of the Court".
As Mitchelmore JA explains, the applicants rightly accepted that had their proceeding been commenced in the Supreme Court of Western Australia and decided by a judge of that Court, s 13(5) of the WACA Act would have precluded any appeal, at least except insofar as it complained of jurisdictional error. I doubt that s 101 of the (NSW) Supreme Court Act 1970 suffices to create a right of appeal to this Court from a decision of a judge exercising cross-vested jurisdiction under WACA Act s 13(4), where that decision is made final by s 13(5). The only way in which the Supreme Court of New South Wales gains jurisdiction in the matter at all is by the combined operation of s 9(a) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW) ("the NSW Cross Vesting Act"), and s 4(3) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (WA) ("the WA Cross Vesting Act"). The former gives the Supreme Court such jurisdiction (whether original or appellate) as is conferred on it by a provision of a law of a State relating to cross-vesting of jurisdiction - which includes s 4(3) of the WA Cross Vesting Act. The latter confers on the Supreme Court of (inter alia) New South Wales, "original and appellate jurisdiction with respect to [Western Australian] State matters". A matter arising under s 13(4) of the WACA Act concerning a Western Australian arbitration is a Western Australian "State matter". However, because of s 13(5) of the WACA Act, it is a matter in respect of which there is no appellate jurisdiction to be conferred by s 4(3) of the WA Cross Vesting Act, nor thus by s 9(a) of the NSW Cross Vesting Act (at least, except to the extent that the judgment is not "within the limits of the authority of the Court"). Even if s 101 otherwise and independently gave a right of appeal, the matter in this Court, on an appeal by way of rehearing, would involve a right of action arising under a written law of Western Australia, namely WACA Act, s 13, and this Court would be required, by s 10(1)(b) of the NSW Cross Vesting Act, to apply the law of Western Australia in determining the matter - under which law the decision of the primary judge is "final".
However, it is unnecessary finally to resolve this question because, as Mitchelmore JA explains, even if the circumstance that the applicants invoked the cross-vested jurisdiction of the Supreme Court of New South Wales provided a "quirk" by which they have a right of appeal under s 101 of the Supreme Court Act, the scheme of the uniform Commercial Arbitration Acts, in providing that the first instance decision should be "final", is a powerful reason for refusing leave. In circumstances where the primary judge was exercising the jurisdiction of the Supreme Court of Western Australia, and had the proceedings been brought in Western Australia there would admittedly be no appeal, it would be incongruous both with the scheme of the Commercial Arbitration Acts and with the Cross-Vesting scheme to permit an appeal. The Court should not lend its aid to circumvention of the intent of that scheme by resort to the cross-vested jurisdiction of a state other than that under whose law the relevant arbitration is being conducted. Moreover, proposed Grounds 2 and 3 do not raise any such issue of principle, question of public importance or reasonably clear injustice going beyond something that is merely arguable, as to warrant a grant of leave to appeal, even upon the assumption that an appeal is available.
That, however, does not dispose of the application insofar as it raises, in Ground 1, a complaint of jurisdictional error. A note to s 13 states: Note for this section: Section 13 (other than subsection (5)) is substantially the same as Art 13 of the Model Law. Subsection (5) makes it clear that, although a decision of the Court is generally final, review of a decision of the Court that is not made within the limits of its powers and functions is not precluded.
I do not accept the respondents' argument that the effect of the limitation of the finality given by s 13(5) to a "decision of the Court under subsection (4) that is within the limits of the authority of the Court" is to preserve only judicial review by way of prerogative relief for jurisdictional error where it is otherwise available, as in the case of an inferior but not a superior court. The effect of the word "final" in s 13(5) is to render the decision unappealable, where there might otherwise be a right of appeal; [7] but a provision that a decision is "final" does not exclude certiorari. [8] If all that was intended was to preserve judicial review by way of prerogative relief, the limitation of finality to a decision "within the limits of the authority of the Court" was unnecessary. That limitation preserves not only certiorari where it is otherwise available, but also a right of appeal, where the decision is outside "the limits of the authority of the Court". In WACA Act, s 2(1), "the Court" is defined as follows: the Court means, subject to section 6(2), the Supreme Court.
Section 6 provides as follows: 6. Court for certain functions of arbitration assistance and supervision (cf. Model Law Art 6) (1) The functions referred to in sections 11(3) and (4), 13(4), 14(2), 16(9), 17H to 17J, 19(6), 27 to 27B, 27H to 27J, 33D, 34 and 34A are, subject to subsection (2), to be performed by the Supreme Court. (2) If - (a) an arbitration agreement provides that the District Court or the Magistrates Court is to have jurisdiction under this Act; or (b) the parties to an arbitration agreement have agreed in writing that the District Court or the Magistrates Court is to have jurisdiction under this Act and that agreement is in force, the functions are to be performed, in relation to that agreement, by the District Court or the Magistrates Court, as the case requires.
In circumstances where, but for special agreement between the parties, "the Court" means the Supreme Court, it would be surprising in the extreme if the reference to "the Court" in s 13(5) did not include the Supreme Court. Where there is a right of appeal, jurisdictional error can (and ordinarily should) be challenged by appeal, rather than by prerogative relief. Although certiorari is not available for jurisdictional error by a judge of a superior court, such error may be, and routinely is, challenged by appeal.
It is true that in Ku-ring-gai, Bathurst CJ (with whom Beazley P and Ward CJ in Eq, as their Honours then were, agreed) said: [9] "The use of the words 'within the limits of the authority of the Court' envisage the possibility of review of a purported decision under s 14(2) for jurisdictional error, which could be relevant in circumstances where the District Court or the Local Court are exercising the jurisdiction conferred by s 6(2) of the Act. However, the inclusion of those words tends to suggest that the legislature considered that only a limited form of review should be available." However, the point of that observation, while recognising some circumstances in which jurisdictional error could be relevant, is that the right of review preserved was a limited one. It does not state that a decision of a superior court that is not "within the limits of the authority of the Court" is not appealable.
It follows, in my opinion, that a decision under WACA Act s 13(4) that is not within the limits of the authority of the Court is not final; that is to say, it is appealable (as well as being amenable to certiorari in the case of an inferior court), and that this is not confined to decisions of inferior courts, but extends to decisions of the Supreme Court.
That leads to consideration of the content of the phrase "within the limits of the authority of the Court". While bearing some resemblance to the notion of jurisdictional error, the statutory phrase conspicuously does not use that conventional terminology. Instead - like the note that explains it - it appears concerned with an excess of jurisdiction, analogous to what might once have been described as ultra vires in the narrow sense. [10] The statutory phrase does not readily accommodate the common law concept of jurisdictional error by a constructive failure to exercise jurisdiction. A construction of the phrase that confines its application to decisions that exceed the limits of the Court's jurisdiction reflects the words used, promotes the "paramount object" of the uniform Acts stated in, namely, to "facilitate the fair and final resolution of commercial disputes by impartial arbitral tribunals without unnecessary delay or expense", [11] and is consistent with the purpose of the UNCITRAL Model Law from which the uniform Acts are derived in avoiding delay by providing that decisions are, generally, not appealable. [12]
In seeking to bring their case within the exception, the applicants contended, by Ground 1, that the primary judge denied them procedural fairness and constructively failed to exercise jurisdiction "by failing to consider, respond to and determine their substantial and clearly-articulated contention that in consequence of Ms Martin's association with Gina and HPPL, there are justifiable doubts about Mr Martin's capacity to decide impartially whether Gina's and HPPL's conduct was fraudulent, because such a finding would associate Ms Martin with that fraud". The use of the phrase "substantial and clearly articulated contention" invoked the authority of the statement in Dranichnikov v Minister for Immigration and Multicultural Affairs that "[t]o fail to respond to a substantial, clearly articulated argument relying upon established facts was at least to fail to accord ... natural justice" and might also be characterised as "a constructive failure to exercise jurisdiction". [13]
On the construction of s 13(5) to which I incline, a constructive failure to exercise jurisdiction of the kind referred to in Dranichnikov does not result in a decision that is not "within the limits of the authority of the Court"; at least, it did not do so here. It was plainly within the limits of the authority of the primary judge to refuse to grant the relief sought, as his Honour did.
Further, Dranichnikov was concerned with a decision of an administrative tribunal, in circumstances where, as Basten JA explained in Torbey Investments Corporated Pty Ltd v Ferrara, [14] the relevant statute implicitly required the tribunal to address the matters identified by the applicant as the basis of his or her application. As Basten JA also explained in Petch v DPP (NSW): [15] "[47] … In Whisprun Pty Ltd v Dixon [(2003) 77 ALJR 1598; [2003] HCA 48] the High Court considered an appeal from this Court which had set aside a judgment in the Common Law Division on the basis that the trial judge had failed to give proper consideration to the medical evidence concerning chronic fatigue syndrome, on which the plaintiff relied. By a majority (Gleeson CJ, McHugh and Gummow JJ) the Court allowed the appeal, stating: [62]… Further, it should not be accepted that Newman J failed, at least in a general way, to consider the matters to which the Court of Appeal referred. The fact that his Honour did not refer to these matters in his judgment is not decisive. A judge's reasons are not required to mention every fact or argument relied on by the losing party as relevant to an issue. Judgments of trial judges would soon become longer than they already are if a judge's failure to mention such facts and arguments would be evidence that he or she had not properly considered the losing party's case. [63] However, it is unnecessary to determine whether the matters to which the Court of Appeal referred were or should have been considered by the trial judge. For the reasons that we have given, they were not part of Ms Dixon's case. To suggest that a trial judge has not properly considered a party's case is a serious charge. Such a suggestion should be accepted only when the record of the trial or other evidence persuasively suggests that the judge failed to discharge that paramount judicial duty. With great respect to the learned judges of the Court of Appeal, we do not think that the evidence met that standard. [48] The principle identified in Whisprun, together with the qualification, has been referred to in a number of cases, each of which turns on its own particular circumstances. As stated by Leeming JA in Tonab Investments Pty Ltd v Optima Developments Pty Ltd [(2015) 90 NSWLR 268; [2015] NSWCA 287 at [121] (Meagher JA agreeing)], "[a] failure to address a substantial component of a party's case can amount to jurisdictional error", leaving open the circumstances in which such a complaint might be established."
Thus a failure explicitly to address a substantial component of a case will not invariably amount to jurisdictional error, and much will turn on the express and implicit requirements of the applicable statute.
Here, the question for the primary judge was whether there was "a real danger of bias on the part of the arbitrator in conducting the arbitration". As the applicants accepted, his Honour addressed, and rejected, each basis on which it was contended that there was such a danger. However, they argue that procedural unfairness - or a constructive failure to exercise jurisdiction - arose from the primary judge's failure to address the cumulative effect of the circumstances on which they relied, and whether those circumstances, "once combined to give content to Ms Martin's association with the respondents' conduct, could unconsciously react with Mr Martin's affections to cause him unfairly to disfavour the applicants' case".
As Mitchelmore JA explains, the primary judge was not oblivious to this argument, and summarised it thus: "[39] The second point raised by the plaintiffs goes to the heart of their case. It was put in various ways at various levels of generality but in substance the submission is that in the arbitration they allege that one of the ways that Gina sought to improve her position in the Hancock group to the detriment of her children was by asserting in the counterclaim filed in CIV 2121 that a number of the Hope Downs Tenements were held on trust for HPPL and by eventually resolving that dispute by transferring all of the tenements to HPPL. The plaintiffs' case is that there is a real danger that Mr Martin will not be able to consider that submission impartially because his wife was intimately involved in the counterclaim and its settlement. That risk is said to arise from the fact that Mr Martin might consciously or unconsciously think that the findings for which the plaintiffs contend may reflect poorly on his wife." Moreover, as her Honour also explains, there is considerable force in the respondents' submission that the conclusion that each of the individual matters relied upon did not establish a real danger meant that their accumulation could not do so.
Regardless, the proposition that in not expressly addressing their cumulative effect, having rejected each of them individually, the primary judge denied the applicants procedural fairness or constructively failed to exercise jurisdiction - let alone acted outside "the limits of the authority of the Court" - is insufficiently arguable, in the factual and statutory context of this case, to justify a grant of leave to appeal.
For these reasons, and those given by Mitchelmore JA, I agree with the order proposed by her Honour.
MITCHELMORE JA: The applicants seek leave to appeal from a decision of Ball J dismissing their Summons for a declaration that there were justifiable doubts as to the impartiality or independence of the Honourable Mr Wayne Martin AC QC to be a member of the arbitral tribunal in the arbitration between the parties ("Arbitration"): Hancock v Hancock Prospecting Pty Limited [2022] NSWSC 724. The reference in the declaration sought to "justifiable doubts as to the impartiality or independence" of Mr Martin derives from s 12 of the Commercial Arbitration Act 2012 (WA) ("WA CA Act"), which relevantly provides: "12. Grounds for challenge (cf. Model Law Art 12) (1) When a person is approached in connection with the person's possible appointment as an arbitrator, the person must disclose any circumstances likely to give rise to justifiable doubts as to the person's impartiality or independence. (2) An arbitrator, from the time of the arbitrator's appointment and throughout the arbitral proceedings, must without delay disclose any circumstances of the kind referred to in subsection (1) to the parties unless they have already been informed of them by the arbitrator. (3) An arbitrator may be challenged only if circumstances exist that give rise to justifiable doubts as to the arbitrator's impartiality or independence, or if the arbitrator does not possess qualifications agreed to by the parties. (4) …. (5) For the purposes of subsection (1), there are justifiable doubts as to the impartiality or independence of a person approached in connection with a possible appointment as arbitrator only if there is a real danger of bias on the part of the person in conducting the arbitration. (6) For the purposes of subsection (3), there are justifiable doubts as to the impartiality or independence of an arbitrator only if there is a real danger of bias on the part of the arbitrator in conducting the arbitration. Note for this section: This section (other than subsections (5) and (6)) is substantially the same as Art 12 of the Model Law. Subsections (5) and (6) provide that the test for whether there are justifiable doubts as to the impartiality or independence of a person or arbitrator is whether there is a real danger of bias."
In addition to the declaratory relief, the applicants sought an order pursuant to s 13(4) of the WA CA Act terminating the mandate of Mr Martin as an arbitrator in the Arbitration. Section 13 provides: "13. Challenge procedure (cf. Model Law Art 13) (1) The parties are free to agree on a procedure for challenging an arbitrator, subject to subsection (4). (2) Failing such agreement, a party who intends to challenge an arbitrator must, within 15 days after becoming aware of the constitution of the arbitral tribunal or after becoming aware of any circumstance referred to in section 12(3), send a written statement of the reasons for the challenge to the arbitral tribunal. (3) Unless the challenged arbitrator withdraws from office or the other party agrees to the challenge, the arbitral tribunal must decide on the challenge. (4) If a challenge under any procedure agreed on by the parties or under the procedure of subsections (2) and (3) is not successful, the challenging party may request, within 30 days after having received notice of the decision rejecting the challenge, the Court to decide on the challenge. (5) A decision of the Court under subsection (4) that is within the limits of the authority of the Court is final. (6) While a request under subsection (4) is pending, the arbitral tribunal, including the challenged arbitrator, may continue the arbitral proceedings and make an award. Note for this section: Section 13 (other than subsection (5)) is substantially the same as Art 13 of the Model Law. Subsection (5) makes it clear that, although a decision of the Court is generally final, review of a decision of the Court that is not made within the limits of its powers and functions is not precluded."
Consistently with s 13(2) of the WA CA Act, by letter to the arbitral tribunal dated 22 February 2022, the applicants challenged Mr Martin's appointment in the Arbitration. The other two members of the tribunal, the Hon Dr Kevin Lindgren AM QC and Dr Michael Hwang SC, decided that challenge adversely to the applicants, giving comprehensive reasons with which Mr Martin concurred. Following the decision of the arbitral tribunal, the applicants commenced the proceedings below pursuant to s 13(4) of the WA CA Act on 12 April 2022.
The primary judge noted that there was no objection from the respondents to the applicants bringing the proceedings in the Supreme Court of New South Wales, relying on s 4(3) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (WA) and s 9(a) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW) ("NSW Cross-Vesting Act"): at [2]. Section 9(a) of the NSW Cross-Vesting Act provides that the Supreme Court "may exercise jurisdiction (whether original or appellate) conferred on that court by a provision of this Act or of a law of the Commonwealth or a State relating to cross-vesting of jurisdiction".
The applicants sought expedition of the proceedings before the primary judge. His Honour heard the matter on 18 and 19 May 2022 and gave judgment on 3 June 2022. The applicants did not file the Summons in this Court until 30 June 2022, being the penultimate day of the 28-day period permitted by the rules (see rule 51.10 of the Uniform Civil Procedure Rules 2005 (NSW)).
The primary judge observed at [3] that the applicants' claims in the Arbitration are complicated, and many of them are vigorously contested by the respondents. It is unnecessary for the purposes of the leave application to consider them in detail. It is sufficient to set out the primary judge's simplified account of the applicants' claims, the correctness of which is not challenged: "[4] The plaintiffs claim that their mother, the ninth defendant, Mrs Georgina Rinehart (Gina), in breach of various duties she owed, engaged in or procured a series of transactions by which she, or companies controlled by her, obtained ownership of or control over certain valuable mining assets that her father, Mr Lang Hancock (Lang), had bestowed on her four children, including the plaintiffs. The other two children are defendants in this proceeding and respondents in the arbitration. [5] The children's rights are said to arise from a handwritten agreement entered into in June 1988 (the 1988 Agreement) between Gina and Lang concerning the ownership of two companies, Hancock Prospecting Pty Limited (the first defendant) (HPPL), and The Hancock Family Memorial Foundation Ltd (the thirteenth defendant) (HFMF). The Hancock group of companies, which include HPPL and HFMF, owned (and continue to own) rights in respect of large iron ore deposits in Western Australia. Lang controlled the group until his death on 27 March 1992. [6] At the time that it is alleged that the 1988 Agreement was entered into, Gina and Lang were in dispute. Gina, who at the time held a third of the shares in HPPL, claimed that, following the death of Lang's second wife (and Gina's mother) and Lang's marriage to Ms Rose Porteous (Rose), Lang, in breach of his duties, diverted assets, opportunities and income of HPPL to HFMF and subsidiaries of HFMF, including a company then known as Hancock Resources Limited (HRL), which Lang controlled eventually through a company known as Zamoever Pty Ltd. He did so, Gina alleges, to fund an extravagant lifestyle that he had Rose had adopted. [7] The plaintiffs claim that the purpose of the 1988 Agreement was to resolve the dispute between Gina and Lang. They contend that, in accordance with the agreement, Lang established two trusts in favour of his grandchildren known as the Hope Margaret Hancock Trust (the HMH Trust) and the Hancock Family Memorial Foundation Trust (the HFMF Trust). [8] Under the terms of the 1988 Agreement, it is said that Lang agreed to hold his late wife's one third interest in HPPL on trust (the HMH Trust) and that, on his death, a 17.7 percent interest in HPPL would pass to Gina and the balance (amounting to 15.6 percent) would be held on trust for the four children until the youngest turned 25. That trust was, in fact, established by a deed of settlement dated 27 December 1988. The plaintiffs contend that the second trust over all the shares in HFMF arose from the 1988 Agreement itself. In accordance with the agreement, it is said that Lang agreed to transfer his one third share of HPPL to HFMF and to declare that he held his interest in HFMF on trust for the children. The result of the two trusts is said to be that, on Lang's death, the children obtained a 49 percent interest in HPPL and Gina obtained a 51 percent interest. In addition, it is alleged that at the time, HFMF, through HRL, owned a number of valuable mining tenements, including the Hope Downs Tenements, with the result that, on Lang's death, the children would obtain the right to those tenements as well. The plaintiffs also claim that the HFMF Trust was confirmed by a deed executed by Lang on 20 March 1992 (the 1992 Deed) by which Lang declared that he held the whole of his interest in Zamoever on trust for the children. Following Lang's death on 27 March 1992, it is said that Gina became the trustee of the two trusts. [9] Following Lang's death, Rose commenced proceedings in the Supreme Court of Western Australia, CIV 2121 of 1992 (CIV 2121), against HFMF, HPPL, Gina and two BHP companies claiming, among other things, that the 1992 Deed was void or voidable, with the result that the shares in Zamoever remained part of Lang's estate. Gina and HPPL filed a counterclaim in those proceedings in which they contended that HRL held its interests in seven of the nine Hope Downs Tenements on a constructive trust for HPPL. That constructive trust was said to arise because those assets were among those that Lang had improperly diverted from HPPL. The plaintiffs make two points about the counterclaim. First, they say that to Gina's knowledge the allegation in the counterclaim was false because the claim that Lang had breached his duties had been released by the 1988 Agreement and the 1992 Deed. Second, they make much of the fact that the courterclaim (sic) only related to 7 of the 9 Hope Down Tenements. [10] The plaintiffs also claim that Gina breached duties she owed relevantly in two other ways. First, it is alleged that she caused a deed known as the Debt Reconstruction Deed to be entered into on 24 October 1995 by which HFMF obtained $9.3 million in exchange for its shares in HPPL, which were cancelled. That transaction is said to have occurred at a gross undervalue. It is alleged that approximately three years earlier Gina had engineered a situation in which HFMF was required to give up its shares in HPPL which itself involved breaches of duty by her. However, as will become apparent, that conduct is irrelevant to the challenge and nothing more needs to be said about it. The effect of the Debt Reconstruction Deed was to increase Gina's share of HPPL and to decrease the children's share. [11] Second, by a Deed of Compromise of Litigation made on 20 February 1996, HRL and HPPL compromised the counterclaim on the basis that HRL acknowledged that it "does not have and never has had any beneficial estate or interest in the [Hope Downs] Tenements …" and that "in consequence of the November 1992 Deed … it holds and has always held the [Hope Downs] Tenements … upon trust for HPPL". [12] The result of these transactions was that the children's interest in HPPL was diluted and the children lost their interest in the Hope Downs Tenements (except to the extent that they continue to hold an interest in HPPL)."
Against this background, the applicants contended that there were circumstances giving rise to justifiable doubts as to Mr Martin's impartiality or independence within the meaning of s 12 of the WA CA Act. The primary judge summarised those circumstances at [23]-[25]. Relevantly for present purposes, the circumstances included the following at [23]: "First, Blake Dawson Waldron (BDW) acted for HPPL and Gina in CIV 2121 from 9 June 1993 to 14 November 1995 (when Freehill Hollingdale and Page took over the conduct of the matter on behalf of HPPL and Gina). The employed solicitor at BDW with the day-to-day carriage of the matter was Ms Margaret O'Halloran, who was in a relationship with Mr Martin at that time and who has been his wife since 1996. The plaintiffs submit that of most significance is the fact that (1) Ms O'Halloran attended a series of meetings on 9 September 1994, and kept a file note of those meetings, at which HRL agreed to give up its interest in the Hope Downs Tenements and (2) Ms O'Halloran was responsible for preparing a version of the Deed of Compromise of Litigation."
By their application for leave, the applicants seek to challenge the primary judge's conclusion that the above circumstances did not give rise to justifiable doubts as to Mr Martin's impartiality or independence. The draft Notice of Appeal advances three grounds of appeal. Ground 1 alleges that the primary judge denied the applicants procedural fairness and constructively failed to exercise jurisdiction "by failing to consider, respond to and determine their substantial and clearly-articulated contention that in consequence of Ms Martin's association with Gina and HPPL, there are justifiable doubts about Mr Martin's capacity to decide impartially whether Gina's and HPPL's conduct was fraudulent, because such a finding would associate Ms Martin with that fraud". In so alleging, the applicants accept that his Honour considered each of the circumstances of Ms Martin's involvement on which they relied. Nonetheless, they submit that his Honour failed to consider the combined effect of those circumstances.
Ground 2 alleges that his Honour erred at [43] and [50] in considering that even if there were justifiable doubts as to Mr Martin's impartiality, the availability of rational arguments distancing Ms Martin from the respondents was sufficient to overcome such doubts. The applicants argue that the only relevant question was whether, in the circumstances, there was a real danger of bias on the part of Mr Martin, the answer to which cannot be affected by the possibility of conscious critical reflection on Mr Martin's part. The applicants characterise this ground as involving a misconstruction of s 12(3) of the WA CA Act.
By Ground 3 of the draft Notice of Appeal, the applicants allege that the primary judge erred by construing s 12(3) of the WA CA Act as setting a higher threshold for removal than the test in Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337; [2000] HCA 63 ("Ebner").

Proposed Ground 1

Ground 1 of the draft Notice of Appeal alleges a denial of procedural fairness. It is no small thing to allege that a judge has acted in a way which is procedurally unfair: Daley v Donaldson [2022] NSWCA 96 at [52] per Leeming JA. The applicants contend that procedural unfairness arose in the present case from the primary judge's failure to address the cumulative effect of the circumstances on which they relied, and whether those circumstances, "once combined to give content to Ms Martin's association with the respondents' conduct, could unconsciously react with Mr Martin's affections to cause him unfairly to disfavour the applicants' case".
I have set out above [23] of his Honour's reasons, where his Honour identified the circumstances to which this ground relates. At [37], his Honour identified the three ways in which the applicants put their case as to these circumstances, one of which was that "there is a real danger that Mr Martin will not be able to consider impartially submissions that they intend to make about CIV 2121 and the events relating to it because of Ms O'Halloran's involvement in those events". His Honour confirmed that formulation with Senior Counsel appearing for the applicants at the hearing, in a passage that the HPPL Parties reproduced in their submissions on the leave application: "HIS HONOUR: I mean the question for present purposes is whether there is some submission that you want to put to the tribunal where there is a risk that Mr Martin can't be impartial in deciding the question whether to accept that submission or not. [Senior Counsel]: That's right. HIS HONOUR: That's the essential question, isn't it? [Senior Counsel]: That's' (sic) right"
The primary judge described this issue as going to "the heart" of the applicants' case, and having been put "in various ways at various levels of generality": at [39]. His Honour recognised, however, that the applicants' challenge to Mr Martin under s 13(4) related to the submission they intended to make at the arbitration, that "one of the ways that Gina sought to improve her position in the Hancock group to the detriment of her children was by asserting in the counterclaim filed in CIV 2121 that a number of the Hope Down Tenements were held on trust for HPPL and by eventually resolving that dispute by transferring all of the tenements to HPPL". The "real danger" on which the applicants relied as giving rise to justifiable doubts about Mr Martin's impartiality or independence related to that submission. As the primary judge formulated it at [39]: "The plaintiff's case is that there is a real danger that Mr Martin will not be able to consider that submission impartially because his wife was intimately involved in the counterclaim and its settlement. That risk is said to arise from the fact that Mr Martin might consciously or unconsciously think that the findings for which the plaintiffs contend may reflect poorly on his wife."
It is apparent from this articulation of the applicants' case that the primary judge was alive to the very issue that the applicants claim he failed to consider. Although formulated as a denial of procedural fairness, the applicants' real complaint is with the manner in which the primary judge proceeded to answer that question. His Honour did so by identifying the submissions that might reasonably be put "that might reflect, or might be thought to reflect, poorly on Ms Martin so as to give rise to a real danger that Mr Martin will not be able to consider those submissions (and the evidence on which they were based) impartially": at [40]. In circumstances where submissions were not reasonably in prospect that would directly criticise Ms Martin's professional conduct, his Honour characterised the risk on which the applicants relied ("if there is one") as arising as a matter of inference "because of some other finding that the Tribunal is asked to make": at [41]. His Honour proceeded to analyse that risk by reference to four findings that the applicants identified as being of that type (at [42]-[51]), and other submissions that the applicants foreshadowed that the arbitral tribunal might need to consider (at [52]-[57]).
Senior Counsel for the applicants spent considerable time in oral submissions on the application for leave contending that the primary judge adopted too narrow an understanding of what would reflect "poorly" on Ms Martin, by reference to her compliance or otherwise with her professional duties. In my view, a fair reading of his Honour's reasons indicates that his Honour's consideration of what might reflect poorly on Ms Martin was not by reference to compliance with professional duties alone. That said, and in any event, his Honour necessarily focused upon Ms Martin acting in a professional capacity because that was the basis of her involvement in the matters that the Arbitration would need to examine on the applicants' case. His Honour concluded, as a matter of fact, that none of the findings that might be sought as to those matters would reflect poorly on Ms Martin in her professional capacity. The definitive terms in which his Honour expressed his conclusion on the "subordinate strands" of the applicants' case (as to which see [42]) tell against there being anything left for his Honour to consider on a cumulative basis: 1. As to the proposed finding to the effect that there was no foundation for the constructive trust claim, his Honour concluded that "there cannot be a real risk that Mr Martin would be unable to consider that claim impartially because of Ms O'Halloran's role in CIV 2121": at [43]. 2. As to the proposed finding that the decision to exclude two of the Hope Downs tenements (the "Balance Tenements") from the counterclaim was a deliberate decision because there was no basis for inclusion of those tenements, his Honour concluded that "it is difficult to see how the finding for which the plaintiffs contend in the arbitration in relation to the drafting of the counterclaim could reflect poorly on Ms O'Halloran": at [44]. 3. As to the proposed finding that a particular recital was included (on the express instructions of Gina and/or HPPL) in a predecessor to the Deed of Compromise of Litigation, which incorrectly recorded that HPPL had a claim in respect of all Hope Downs Tenements, his Honour did not see how that recital in the earlier deed shed any light on the real question in the arbitration, namely, whether HPPL was entitled to obtain the Balance Tenements as happened as a consequence finally of the Deed of Compromise of Litigation: at [45]-[47]. 4. As to the proposed finding that HRL did not have the benefit of legal advice at the meeting on 9 September 1994 at which HRL agreed to give up the Hope Downs Tenements, and that those representing HRL were important officers and senior executives of HPPL and thus in a position of conflict, his Honour concluded by reference to the circumstances surrounding the meeting that "it is difficult to see how any submission that the interests of HRL were not properly protected could reflect poorly on Ms O'Halloran": at [48].
In relation to the 9 September meeting, his Honour also concluded that there was "no foundation" for the further submission that Mr Martin would unconsciously resist accepting the submission that the meetings between HPPL and HRL on 9 September were not arm's length negotiations because it would involve an implied criticism of Ms Martin. Additionally, his Honour found it "difficult to see why there would be a real risk" that Mr Martin would not be able to undertake the task of interpreting Ms O'Halloran's file notes of the meetings impartially: at [51].
There is thus significant force in the submission advanced by both of the respondent parties that his Honour's rejection of each of the "subordinate strands" as giving rise to no real risk meant there was nothing left for the primary judge to address in terms of the cumulative effect of those strands. Having regard to his Honour's findings of fact, it is difficult to see how not looking at the submission "in the round", as the applicants submitted orally, gives rise to a denial of procedural fairness. The ground is arguable but weak and raises no issue of principle or reasonably clear injustice warranting a grant of leave.

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Cases Cited (27)