Leedman v Chahhoud [2024] NSWSC 1566 | Case summary

Applicable principles

Subject to qualifications relating to necessity (which is not presently relevant) and waiver, a judge is disqualified from determining a case if the judge is unable to bring an impartial and unprejudiced mind to the resolution of the issues that the judge is required to decide (actual bias), or if a fair-minded lay observer might reasonably apprehend that the judge might not do so (reasonable apprehension of bias). [2]
As Gageler CJ, Gleeson, Jagot and Beech-Jones JJ recently reaffirmed in Director of Public Prosecutions v Smith with reference to earlier High Court authority: [3] "The test for a reasonable apprehension of bias requires: '(1) identification of the factor which it is said might lead a judge to resolve the question other than on its legal and factual merits; (2) articulation of the logical connection between that factor and the apprehended deviation from deciding that question on its merits; and (3) assessment of the reasonableness of that apprehension from the perspective of a fair-minded lay observer."
The test is an objective test. The hypothetical fair-minded lay observer is: [4] "… a deliberate and necessary construct which tethers the court's analysis to the ultimate purpose of maintaining public confidence in the impartiality of the judicial system. The construct provides 'the standard by which the courts address what may appear to the public served by the courts to be a departure from the standards of impartiality and independence which are essential to the maintenance of public confidence in the judicial system'."
The fair-minded lay observer is neither complacent nor unduly sensitive or suspicious. They are taken to know that a judge is a professional whose training and tradition and loyalty to oath or affirmation require them to discard matters that are irrelevant, immaterial or prejudicial. [5]
Being a lay person, the fair-minded observer is not assumed to have a detailed knowledge of the law. However, they are taken to have a basic knowledge of the issues to be decided, and to be aware of the nature of the proceedings, the nature of the decision to be made, and the role to be played by the judge. They are also taken to have a broad knowledge of the material objective facts. [6]
Each case must be considered by assessing the totality of its own circumstances. [7] As the plaintiffs submitted, it is not the case that a judge who has made credibility findings adverse to a party must necessarily disqualify themselves from determining any question that may remain to be determined in the proceedings. The question is whether a fair-minded lay observer might reasonably apprehend that, by reason of those adverse credibility findings, the judge might not bring an impartial mind to the determination of the remaining questions on the basis of their legal and factual merits. [8]

Consideration

Ms Chahhoud's email attached written submissions identifying the following grounds of her recusal application: [9] "1. Exclusion of Crucial Evidence: Justice Williams denied the inclusion of Mr Roi's affidavit, a critical component of my defense. Mr Roi, the accountant for the entities in question, was positioned to confirm essential facts, including: • The reasons for my appointment as director and the instructions under which documents were prepared. • The benefits, if any, received by myself and the plaintiff from the patent. • The dollar value of the patent. • Discrepancies in stock values and Class 1 Form figures provided by the plaintiff, Kim Leedman, to Mr Roi to prepare the company tax returns prior to the defendants executing the deed. This omission raises concerns about the court's willingness to address significant discrepancies and implications, including whether: • The plaintiff misled Mr Roi to evade tax obligations. • The plaintiff misled me and Mr Taleb into entering into the deed agreement under false pretences. 2. Failure to Address Plaintiff Credibility: Justice Williams failed to critically evaluate the plaintiff's credibility despite significant inconsistencies in their testimony: • Claims about the timeline of events, such as dinners and visits, were demonstrably inaccurate based on provided evidence. • Assertions about wage responsibilities were inconsistent with documented communications, such as a screenshot sent by Mr Leedman to Mr Roi on 9 July 2015, which clearly stated, 'Seb usually does it', indicating that Elias was not involved in wage-related matters. See Attachment. 3. New Supporting Affidavits: The affidavits submitted by Mr Robert Dansby and Ms Jenne Mussig, the Justice of the Peace, are more credible than the plaintiff's claims. These affidavits highlighted: • My limited English proficiency as of 2019, contrary to the plaintiff's assertions. 4. Violation of My Legal Rights: My right to independent legal advice, as protected by law and precedent, was not upheld. This fundamental oversight raises significant concerns about the fairness of the proceedings. 5. Plaintiff's Misleading Conduct: The plaintiff provided misleading testimony under oath, including fabricated details about the deed's execution. Their counsel mocked my ability to recall specific incidents, despite such memories being vivid due to the trauma associated with the events. How could Mr Rob Anderson remember who came first given the passage of time but could not recall if I initialed the deed? That alone should disqualify him as a credible witness. Request for Expert Analysis The plaintiff holds the original deed, yet instead of seeking an expert's analysis to authenticate it, they have engaged in costly subpoena and fishing expeditions. This approach suggests an unwillingness to conclusively establish facts and further erodes confidence in the plaintiff's position."
As I understand those submissions, Ms Chahhoud contends that one or more of the five matters articulated demonstrates either that I am unable to bring an impartial and unprejudiced mind to the resolution of the issues raised by the plaintiffs' notice of motion filed on 27 November 2024, or that a fair-minded lay observer might reasonably apprehend that I might not bring an impartial and unprejudiced mind to the resolution of those issues.
Although Ms Chahhoud's submissions do not expressly say so, I accept the plaintiffs' submission that I should treat the application as also being based on my adverse assessment of Ms Chahhoud's credibility in the principal judgment. [10]
As I have mentioned earlier in these reasons, orders have already been made for the judicial sale of the Peak View Property and for the appointment of the plaintiffs as the agents of the Court to effect that sale. The question that I am required to determine in order to dispose of the plaintiffs' notice of motion filed on 27 November 2024 is whether the Court should direct that the sale be conducted by private treaty, rather than by public auction. As I said in my principal reasons for judgment, a judicial sale is ordinarily conducted by public auction in order to ensure that the market is fully tested and the best price is obtained for the property. However, the Court may order a sale by public tender or by private treaty rather than by public auction. [11] The issues raised for by the plaintiffs' notice of motion filed on 27 November 2024 are: (1) whether a sale of the Peak View Property by private treaty is more conducive to obtaining the best price for the property than a sale by public auction, having regard to the nature, location and features of the property; and (2) if so, whether any direction that the sale proceed by private treaty should be subject to conditions designed to ensure that the sale price achieved by private treaty is not less than the market value of the property. The nature of those issues means that they are likely to be determined on the basis of evidence of property agents and valuers. I cannot presently see how evidence from the parties themselves would be relevant to those issues, much less how the determination of those issues would turn on the credibility of any evidence from the parties themselves.
As to the first matter identified by Ms Chahhoud - "Exclusion of Crucial Evidence" - Mr Roi's affidavit was rejected at the hearing in July and August 2024 on the grounds of relevance after I identified for Ms Chahhoud the issues raised by the pleadings and after I considered Ms Chahhoud's submissions about why she contended that the affidavit was relevant to those issues. [12]
I note that the matters to which Ms Chahhoud now says Mr Roi's affidavit was relevant were not identified in her submissions as to the relevance of the affidavit at the time that I made the ruling in question.
Even assuming (without expressing any view about it) that my ruling might be successfully challenged in any appeal that Ms Chahhoud may pursue from the principal judgment and orders made on 16 October 2024, I do not consider that my assessment of the issues raised by the pleadings, and my determination that Mr Roi's affidavit was not relevant to those issues, demonstrate that I am unable to bring an impartial and unprejudiced mind to the determination of the issues now raised by the plaintiffs' motion. Nor do I consider that a fair-minded lay observer might reasonably apprehend, by reason of my ruling rejecting Mr Roi's affidavit on the grounds of relevance, that I might not bring an impartial and unprejudiced mind to the determination of those issues. Ms Chahhoud has not articulated any logical connection between my ruling rejecting Mr Roi's affidavit and the alleged apprehended deviation from deciding the issues raised by the plaintiffs' motion on their merits. I note that Ms Chahhoud made no application at the time of that ruling, or at any time during the hearing, that I recuse myself on the basis that the ruling demonstrated actual bias or might give rise to a reasonable apprehension of bias.
The second matter raised by Ms Chahhoud - "Failure to Address Plaintiff Credibility" - raises a substantive challenge to my assessment of the credibility of the plaintiffs' witnesses and, implicitly, my findings of fact that were predicated on acceptance of the evidence of one or more of those witnesses.
My assessment of the credibility of the plaintiffs' witnesses is addressed in the principal judgment at [22]-[24]. My assessment of Ms Chahhoud's credibility is addressed in the principal judgment at [25]-[54]. My findings of fact, the evidence on which those findings are based, and my reasons for those findings, are disclosed in the principal judgment at [56]-[295].
Even assuming (without expressing any view about it) that my assessment of the credibility of witnesses, or my findings of fact based wholly or partly on acceptance of evidence given by the plaintiffs' witnesses and/or rejection of Ms Chahhoud's evidence, might be successfully challenged in any appeal that Ms Chahhoud pursues, I do not consider that my credibility assessments or findings demonstrate that I am unable to bring an impartial and unprejudiced mind to the determination of the specific issues now raised by the plaintiffs' motion. Nor do I consider that a fair-minded lay observer might reasonably apprehend, by reason of my credibility assessments and findings, that I might not bring an impartial and unprejudiced mind to the determination of those issues. Ms Chahhoud has not articulated any logical connection between my credibility assessment in relation to any particular witness, or any particular finding or category of findings of fact, and the alleged apprehended deviation from deciding on their merits the issues now raised by the plaintiffs' motion. As I have already explained, I cannot presently see how the determination of the issues raised by the plaintiffs' motion could turn on the credibility of any evidence given by the parties in relation to that motion.
I note for completeness that the "documented communications" referred to and attached to Ms Chahhoud's submissions, which she contends are inconsistent with the plaintiffs' evidence, are screenshots of text messages that were not tendered in evidence during the hearing.
The third matter raised in Ms Chahhoud's submissions - "New Supporting Affidavits" - relies on affidavits affirmed by Mr Robert Dansby and Ms Jenne Mussig which Ms Chahhoud did not seek to read at the hearing of these proceedings in July and August 2004. Those affidavits were affirmed on 4 and 5 November 2004, several weeks after the principal judgment was delivered on 16 October 2024. I do not consider that any inconsistency (if any) between those new affidavits and the plaintiffs' evidence concerning their observations of Ms Chahhoud's proficiency in the English language in 2017 is logically capable of demonstrating actual bias or giving rise to a reasonable apprehension of bias.
The fourth matter raised by Ms Chahhoud - "Violation of My Legal Rights" - is an inaccurate gloss on the principal judgment. I refer, in particular, to paragraphs [216] and [296]-[335] of the principal judgment.
I understand the fifth matter raised by Ms Chahhoud - "Plaintiff's Misleading Conduct" - to include the "Request for Expert Analysis". In substance, the fifth matter is a challenge to my assessment of the evidence and my findings of fact about the course of events in Ashurst's offices on 16 June 2017 which resulted in Mr Taleb and Ms Chahhoud executing the deed that was the subject of these proceedings, and associated documents, on their own behalf and in their capacity as directors of Steadiform Holdings Pty Ltd, Class 1 Form Pty Ltd, Steadiform Pty Ltd, Akena Pty Ltd and Akena Installations Pty Ltd (in the case of Mr Taleb) and Elias Pty Ltd (in the case of Ms Chahhoud). Those findings, the evidence on which they are based, and the reasons for the findings, are set out in the principal judgment at [185]-[246].
Even assuming (without expressing any view about it) that my assessment of that evidence and/or my findings of fact based on that evidence might be successfully challenged in any appeal that Ms Chahhoud pursues, I do not consider that this is logically capable demonstrating that I am unable to bring an impartial and unprejudiced mind now to the determination of the issues now raised by the plaintiff's motion. Nor do I consider that a fair-minded lay observer might reasonably apprehend, by reason of my assessment of the evidence and my findings of fact concerning the execution of the deed, that I might not bring an impartial and unprejudiced mind to the determination of those issues. Ms Chahhoud has not articulated any logical connection between my assessment of that evidence and those findings of fact, on the one hand, and the alleged apprehended deviation from impartially determining those issues, on the other hand.
By her request for expert analysis of the original deed that is the subject of these proceedings, Ms Chahhoud is seeking to engage forensic processes that should have been invoked prior to the hearing that commenced in July 2024, if they were to be invoked at all. I note that Ms Chahhoud was represented by solicitors for a period prior to the commencement of that hearing, including at the time when she prepared and affirmed her second affidavit setting out her detailed account purporting to recall the events of 16 June 2017 that culminated in the execution of the deed. In circumstances where Ms Chahhoud does not dispute signing the deed, [13] I reject Ms Chahhoud's submission that the plaintiffs' failure to have the original deed forensically examined "suggests an unwillingness to conclusively establish facts and further erodes confidence in the plaintiffs' position". The relevance of the forensic examination of the original deed that Ms Chahhoud apparently now wishes to undertake, notwithstanding her concession that she signed the deed, is not apparent to me. In any event, subject to any leave that the Court of Appeal may grant to the parties to rely on fresh evidence in any appeal proceedings, the time for such forensic processes to be undertaken has long passed.
I record, for completeness, that I reject Ms Chahhoud's submission that counsel for the plaintiffs "mocked" her ability to recall the events of 16 June 2017 in the level of detail that she claimed to remember. Counsel for the plaintiffs challenged Ms Chahhoud's claimed detailed recollection of those events, which had emerged for the first time in her second affidavit made for the purpose of these proceedings, and put to her that the elaborate account did not reflect her recollection of events and that what she had done in her second affidavit was to "simply reconstruct in your head what you think happened, but you don't in fact remember what happened at all on the morning on 16 June, other than you met some lawyers and you signed some documents". [14] The cross-examination was undertaken robustly, but respectfully, as is appropriate.
For those reasons, I do not consider that the matters identified in Ms Chahhoud's submissions, whether considered separately or as a whole, demonstrate actual bias, or might give rise to a reasonable apprehension of bias in respect of my hearing of the plaintiff's motion. To the extent that Ms Chahhoud's complaints are intended to raise allegations of actual bias, the complaints seem to me to amount to nothing more than "the fallacious argument that because one side lost the litigation the judge was biased, or the equally fallacious argument that making some appealable error, whether by not dealing with the losing side's arguments or otherwise, demonstrates prejudgment". [15]

Leedman v Chahhoud

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Cases Cited (20)