Karadaghian v Big Beat

Principles for Apprehended Bias 19The principles relating to the apprehension of bias admit the possibility of human frailty: Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 at 345 [8], per Gleeson CJ, McHugh, Gummow and Hayne JJ. The principles have been stated many times and are well-known and easily recited, but often difficult to apply. 20Often the application of the principles bear the hallmarks of intuition or, in the Aristotelian sense "unconscious expertise". The High Court most succinctly summarised the principles applicable to an application of this kind in Johnson v Johnson [2000] HCA 48; (2000) 201 CLR 488 at [11]: [11] It is not contended that Anderson J was affected by actual bias. It has been established by a series of decisions of this Court that the test to be applied in Australia in determining whether a judge is disqualified by reason of the appearance of bias (which, in the present case, was said to take the form of prejudgment) is whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide." 21An understanding of the issues associated with apprehension of bias must commence with the principle that justice must not only be done, it must seen to be done. A judicial officer, as part of the oath of office, is required to bring an impartial mind to the issues to be decided. That oath, taken on appointment, is taken extremely seriously by all judicial officers and deals with the approach to be taken by a judicial officer in the fulfilment of their duties. The purpose of the rules on bias and apprehended bias is to ensure impartiality and independent assessment, in accordance with that oath, both in fact and in appearance: Australian National Industries Ltd v Spedley Securities Ltd (in liq) (1992) 26 NSWLR 411 at 418 and following. 22Expanding the statement of the High Court in Johnson, above, the general principle is that a judge should disqualify herself or himself if, in all the circumstances, the parties, or the public, properly informed of the procedure and circumstances, might entertain a reasonable apprehension that the judge might not bring an impartial or unprejudiced mind to the resolution of the issues to be heard and determined: Livesey v New South Wales Bar Association [1983] HCA 17; (1983) 151 CLR 288 at 293-294; R v Watson; Ex parte Armstrong [1976] HCA 39; (1976) 136 CLR 248 at 258-263. 23The difficulty of application of the principles was noted by Kirby P in ANI v Spedley, supra, where the then President said, at 417-418: "It is no disrespect to the judges who have ventured their opinions upon the resolution of problems such as this to identify a certain ambivalence in the expression of the tests which are to be applied. One decision upholds the asserted apprehension of bias. The next dismisses it. One decision asserts the duty of the judicial officer to sit and not disqualify himself or herself. Thenext reverses a decision of a judge to sit on the ground of apprehended bias. As in this case, different judges considering the same facts reach different conclusions. To say this merely acknowledges the unique features of each case; the differing composition of the courts and tribunals concerned; theinescapably different predilection and sensitivities of judges seeking to interpret the response of the hypothetical reasonable or fair-minded observer; and the ebb and flow of judicial opinion over time. There is no final or ultimate formula which can be easily applied to dispose of cases such as the present. In each case, the judicial officers concerned, whether at first instance or on appeal, must apply the well-worn words. But in the end, the response which each gives may be more instinctive and less deductive than the reasoning of the courts has tended to suggest. That words can be found in the authorities, even in recent times, toencourage a judge said by reason of pre-judgment to be disqualified for apprehended bias, to stay with the case cannot be doubted. The following is a representative sample of the injunctions that are typically called to the judge's attention: (a) Judges by their training and experience are able to bring a detached mind to the task in hand: see Re The Queen and His Honour Judge Leckie; Ex parte Felman (1977) 52 ALJR 155 at 160; 18 ALR 93 at 102-103; (b) Judges should not too readily accede to applications fordisqualification, otherwise litigants may succeed in effectively influencing the choice of the judge in their own cause: see Re JRL; Ex parte CJL (1986) 161 CLR 342 at 352; Raybos Australia Pty Ltd v Tectran Corporation Pty Ltd(1986) 6 NSWLR 272 at 276; Fitzgerald v Director of Public Prosecutions (1991) 24 NSWLR 45 at 49; (c) Judges should resist being driven from their courts by the conduct orassertion of parties, including assertions of actual or imputed bias: see Raybos Australia Pty Ltd v Tectran Corporation Pty Ltd [No 4] (1986) 6 NSWLR 674 at 689; (d) Judges in the course of litigation, in exchanges with parties and their representatives or in interlocutory decisions may express their preliminary views with vigour but this should not necessitate their disqualification: seeGalea v Galea (1990) 19 NSWLR 263 at 278f; Fitzgerald (at 49); Re Keely; Ex parte Ansett Transport Industries (Operations) Pty Ltd (1990) 64 ALJR 495; 94 ALR 1; and (e) Judges should perform the duties of their office which, of their nature, will often be painful and unrewarding. They should do so with courage and decisiveness avoiding the relinquishment of their duties which will thennecessarily fall to another judicial officer for whom the task may be no more congenial. Such relinquishment will also involve costs delay and inconvenience to parties who are otherwise entitled to have the decision of thejudicial officer appointed to their case: see Re JRL; Ex parte CJL (at 352); Re Polites; Ex parte Hoyts Corporation Pty Ltd (1991) 173 CLR 78." 24The importance of adherence to the principle of impartiality is fundamental to the administration of justice. So too the appearance of impartiality is fundamental not only to the parties, but to the public and the integrity of the court and justice system. In the common law system, it is fundamental to the rule of law. If the public were to have the impression that partiality affected the decisions of courts, then the courts could not function in the manner that they do. In a democracy such as ours, the exercise of power, including judicial power, depends upon the legitimacy of the institution exercising it. 25The legitimacy of the institution and the impartiality of the administration of justice also depends upon the proposition that parties ought not be able to pick and choose the judges who sit on any particular case. That is a matter for the administration of the court. 26As a consequence, notwithstanding that the easier option for a judge dealing with a recusal application is to grant it and allow another judge to preside, it is necessary that such an application be dealt with on the basis of principle; that where the application of the principles do not disqualify a judge from sitting, the judge continue to preside in order to ensure that "judge shopping" does not undermine the independence, impartiality and legitimacy of the justice system: Re JRL; Ex parte CJL [1986] HCA 39; (1986) 161 CLR 342 at 352; Re Polites; Ex parte Hoyts Corporation Pty Ltd [1991] HCA 25; (1991) 173 CLR 78; Raybos Australia Pty Ltd v Tectran Corporation Pty Ltd (No 4) (1986) 6 NSWLR 674 at 689. 27The circumstances of the Hoyts judgment above, bear repeating. In Hoyts, the High Court required a judicial member of an Industrial Tribunal to preside in circumstances where the member had disqualified himself. Prior to his appointment as a member of the Tribunal, the judicial member had advised a party to the proceedings with which he was dealing on the employment structure to be implemented by it or that could be implemented by it, which structure was the subject of the proceedings before him. 28Nevertheless, the High Court required the judicial member to sit. There were ameliorating issues in the Hoyts case. First, the Tribunal was an Industrial Tribunal in which its members generally have an understanding of a number of the corporations and the industrial organisations that operate in industry. 29Secondly, the application was made after the proceedings had been continuing for some significant period of time. Nevertheless, whatever be the inclination of the judicial officer concerned, it is necessary for such a judicial officer, faced with an application of this kind, to determine whether there is a reasonable apprehension that an impartial mind cannot be brought to the issues before the Court. 30In this matter, the apprehension of bias application is complicated by the fact that the apprehension of pre-judgment arises from interlocutory proceedings in this very matter. There are examples of issues involving the credit of witnesses in one proceeding affecting the ability of a judge to preside in a later proceeding, on the basis of apprehended bias. 31The judgment of the High Court in Livesey, supra, is one such example. In Livesey, adverse findings of credit by two of the judges of the Court of Appeal in earlier proceedings against the person who was a central witness in the proceedings in which the application for bias was made, were held not to be able to sit on the latter case. Yet, both Livesey and Spedley are cases involving adverse findings in prior litigation. 32Different nuances exist in relation to interlocutory judgments in one proceeding. For example, liability may be separated from damages. Can it seriously be suggested, in those circumstances, that a credit finding, assuming there were one, in a liability judgment would preclude the judge from determining damages, assuming, as one might, that there was an overlap of witnesses? 33During the course of its submissions, the applicant on the motion relied on the reasons for judgment of French CJ in British American Tobacco Australia Services v Laurie [2011] HCA 2; (2011) 242 CLR 283. The circumstance that his Honour the Chief Justice was in dissent in this judgment of the High Court does not detract from his Honour's statement of the principles to be applied. The Chief Justice said: "[42] A claim of apprehended bias succeeded where a judge in interlocutory proceedings in the Family Court said that he would not accept the evidence of either the husband or the wife unless it were corroborated. In that case, R v Watson; Ex parte Armstrong, Angliss was quoted by Barwick CJ, Gibbs, Stephen and Mason JJ. Their Honours essayed a "fair-minded person" test: 'It is of fundamental importance that the public should have confidence in the administration of justice. If fair-minded people reasonably apprehend or suspect that the tribunal has prejudged the case, they cannot have confidence in the decision.' The judge's statement in Watson precluded the possibility of his acceptance of the uncorroborated evidence of either party on its merits. That situation differs materially from a case such as the present in which a judge makes an interlocutory finding expressly acknowledging the possibility that there might be a different outcome on different evidence or after a full trial. [43] Watson was applied in Livesey v New South Wales Bar Assn and the principle restated thus: 'a judge should not sit to hear a case if in all the circumstances the parties or the public might entertain a reasonable apprehension that he might not bring an impartial and unprejudiced mind to the resolution of the question involved in it.' The Court invoked the "reasonable observer", also designated as the "fair-minded observer", who was presumed to approach the matter on the basis that a judge would ordinarily act so as to ensure both the appearance and the substance of fairness and impartiality. The Court acknowledged the impossibility of any inflexible rule and the need to determine each case by reference to its particular circumstances. [44] The fact that a judge has expressed a strongly worded view at the outset of a hearing does not prevent characterisation of that view as provisional. In such a case the reasonable apprehension of bias must be "firmly established" before prohibition will issue. Sometimes the line of judgment is "ill-defined". On the other hand, a gratuitous statement in a judgment given in one case adverse to a person not involved in that case against whom a prosecution was pending, was sufficient to disqualify the judge who made the statement from sitting on an appeal arising out of the prosecution. [45] The scrutiny required of claims of bias based on prior findings by a decision-maker was emphasised, in relation to administrative decisions, by Gaudron and McHugh JJ in Laws v Australian Broadcasting Tribunal. Their Honours, after referring to R v Australian Stevedoring Industry Board, Angliss and Shaw, said: 'When suspected prejudgment of an issue is relied upon to ground the disqualification of a decision-maker, what must be firmly established is a reasonable fear that the decision-maker's mind is so prejudiced in favour of a conclusion already formed that he or she will not alter that conclusion irrespective of the evidence or arguments presented to him or her.' (emphasis added) The requirement that an apprehension of bias, based on judicial conduct, be "firmly established" is consistent with the most recent decisions of this Court and gives content to the requirement that an apprehension of bias, in that class of case, be reasonable." (citations omitted)

Consideration 34The submissions on behalf of the first defendant on the Motion rely heavily on the judgment of the Court of Appeal in Spedley. The first defendant categorises Spedley as a situation in which interlocutory judgments were given from which an apprehension of bias was determined. That, in fact, is not the case. 35In Spedley, credit findings were made in one set of proceedings and the bias application was determined in another proceeding involving similar, but not the same, parties and in which the witnesses would be the same. It is in that context that the statement of Mahoney JA (with whom Meagher JA agreed) must be understood. 36Moreover, in Spedley, the trial judge (Cole J) had expressed firm views about the involvement of ANI in the breach of fiduciary duty that had been alleged and the motivation in relation to other aspects being "an endeavour to prevent the disclosure" of information. In so doing, the trial judge had rejected the testimony of two witnesses. 37In relation to one of those witnesses, he concluded that his evidence was "false" and, in the words of Kirby P, the trial judge left "the reader of his reasons in no doubt about the impression gained by his Honour as to their credit". 38The situation before the Court here is very different. The first defendant sought to withdraw an admission made in 2008, which admission was formalised in the pleadings. As a consequence, the first defendant, Big Beat, was required to satisfy the Court that the admission was wrong or contrary to the facts. 39The difficulty Big Beat suffered, as is pointed out in the first judgment, is that the person involved in the negotiation of the contractual relationship giving rise to the provision of a security guard on its behalf was, on the evidence before the Court, no longer competent to give evidence. Mr Waterson, the financial officer, had no involvement in the negotiation of the arrangements for the provision of the security guard. He wrote the letter and gave the instructions from which the defence was drafted. 40The "misapprehension" under which Mr Waterson states he was operating was a reconstruction of what occurred based upon his understanding of documents. The documents were in evidence. There was no adverse finding against Mr Waterson. Nor could there have been. 41As to the difference between Mr Dupre and Mr Moraitis, again there was no adverse finding on credit. There is no contest that Mr Moraitis and Mr Page negotiated the arrangement whereby a security guard was provided. That is uncontroversial. 42The admission (and the withdrawal of the admission) relates to which of a number of companies Mr Moraitis was representing, if any. It is no criticism of Mr Moraitis that there was, as is the case in a number of private business operations, a failure to clearly define between the operations of some corporate entities from the operations of others. 43The stark issue before the Court was whether the arrangement for the provision of the security guard was made with Ambiant Pty Ltd or with Southland. The evidence of Mr Dupre (a Director of Southland), together with the documents produced, showed that Mr Moraitis was no longer acting as a Director of Southland at the time of the negotiation of the arrangement with Big Beat. 44As stated in the first judgment, it was unnecessary for the Court to determine issues of credit, finally or otherwise. The evidence could be reconciled and was. The stated preference for the evidence of Mr Dupre over Mr Moraitis, qualified as made only if it were necessary having already stated that it was not, was a reference to the independent contemporaneous records which disclose when it was Mr Moraitis gave up involvement in Southland. 45Ultimately, the first defendant did not satisfy the Court that the admission in the pleadings was contrary to the facts (proved or capable of being proved) or had been disproved. Big Beat had failed to satisfy the onus placed upon it. 46At the trial, to the extent that these matters are issues in the proceedings, it will be for the plaintiff to prove them. The only other aspect that requires comment, in relation to the evidence of Mr Waterson, is that the evidence adduced at the interlocutory proceedings that gave rise to the first judgment excluded evidence from Mr Waterson that Mr Page was not consulted and did not give advice or direction relating to the admission in 2008. That evidence is crucial. 47The "misapprehension" of Mr Waterson was based upon his non-involvement in the negotiations with Mr Moraitis. Mr Page was involved in those negotiations. Mr Page was capable of giving instructions and directions in 2008, at the time the letter was written containing the admission on the basis of which the Statement of Claim was drafted and the defence pleaded. In the absence of such evidence, Big Beat could not establish relevant lack of knowledge by the corporation when it wrote the letter in 2008. 48The only other issue relates to employment. The only persons directly concerned in the question of which entity employed the security guard are Mr Moraitis (the principal of all of the companies that could possibly have been employing the guard) and the guard himself. Each of them says the guard was employed by Ambiant Pty Ltd. 49Frankly, I do not understand that any credit finding has been made and I do not consider a fair-minded lay observer, fully informed of the circumstances, might reasonably apprehend that I would bring other than an impartial mind to the resolution of any factual issue in the final proceedings. 50I make no criticism when I say that in some senses this application is a little premature. It is premature, because there is no guarantee, and a considerable lack of likelihood, that I will be the presiding judge at the trial. 51Counsel for the plaintiff has informed the Court that a change of presiding judge would add significantly to the length of the trial (2 week duration rather than a 1 week duration). It seems to me such a submission suffers from advocate's flourish. It is difficult to imagine that any judicial officer in this Court could not become familiar with the issues in these proceedings relatively quickly by reading the pleadings and the statements of evidence that will be or have been filed and served. 52I do not consider that the trial would be significantly longer if another judicial officer presided and I do not take that factor into account. Even if it were the case, an apprehension of bias and the importance of the perception of impartiality are far more important than any case management consideration. 53For the foregoing reasons, the Motion for disqualification is dismissed. Costs are the plaintiff's costs in the cause. To the extent thought necessary, I will hear the parties on any different costs order.

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