Srinivasan v Bank of Western Australia Ltd

The appellant's argument for a stay 5 The appellant argued that, were no stay granted, he may have difficulty because of the impact of the bankruptcy in pursuing his appeal based on the alleged incompetence of the Federal Magistrates Court to hear and determine any matter. He contended that the trial judge should have recused himself because of the issues in the Pension case and also his Honour's abstention from participating in it. He further argued that his Honour ought to have disqualified himself because another bankruptcy matter was in the list for directions before him when he pronounced his judgment on 12 March 2012. During the course of discussions with counsel in that other matter, his Honour said that if it was at all possible he would decide that matter without deciding the question ultimately in issue in the Pension case, just as he had done in the present case.

Consideration 6 The appellant unquestionably should have his estate sequestrated, being completely insolvent and having failed to comply with a bankruptcy notice last year. Counsel for the appellant was unable to identify any prejudice that would accrue to his client were a stay refused. 7 If I were to grant a stay in this matter, the consequence would be to suggest that every decision and order made by the Federal Magistrates Court had no validity. Were the appellant's argument accepted, it could make it impossible for any Federal Magistrate to hear and determine any matter filed in the Federal Magistrates Court. That is a serious step for any court to take. I am of opinion that the appellant's argument must be rejected. 8 The principles on which interlocutory relief, such as the stay sought by the appellant, is granted in cases involving challenges to the validity of a statute were discussed by Mason ACJ in Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 at 153-157: approved in Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 at 82 [66] per Gummow and Hayne JJ with whom Gleeson CJ and Crennan J agreed at 68 [19]. Mason ACJ identified the public interest as a prime consideration in assessing the balance of convenience in such a case. In the ordinary course, the balance of convenience requires a person who challenges the Constitutional validity of a law to obey that law pending the Court's decision: Castlemaine Tooheys 161 CLR 155. Here the balance of convenience is overwhelmingly against the grant of a stay. 9 The Federal Magistrates Court was created by Parliament pursuant to s 71 of the Constitution. It has a wide jurisdiction. The question of the pension arrangements for its judges goes to the adequacy with which they may be remunerated. That question is pending before Buchanan J in the Pension case that is proceeding to a full hearing in due course. 10 In the meantime, it is the duty of the Federal Magistrates Court to hear and determine all matters within its jurisdiction. That is the duty of every judge of every Court: Ebner v Official Trustee in Bankruptcy (2001) 205 CLR 337 at 348 [19] per Gleeson CJ, McHugh, Gummow and Hayne JJ. The principle of necessity requires that judges sit in cases where there is no practical alternative. In a case such as the present that principle justifies judges of the Federal Magistrates Court exercising the jurisdiction vested in a Court that was constituted by a prima facie valid Act of the Parliament. 11 The test for ascertaining whether a judge is disqualified for apparent bias is if a fair-minded lay observer would reasonably apprehend that the judge would not bring an impartial mind to the question he or she was deciding, for example because he or she was a party or of his or her interests may conceivably be affected by the decision. Indeed, in Constitutional questions, the High Court sometimes faces that very situation, but is charged under the Constitution as being the final arbiter of the ambit of power of the three arms of government created by the Constitution itself. However, Gleeson CJ, McHugh, Gummow and Hayne JJ recognised that qualifications of waiver and necessity applied to situations in which a judge might otherwise be disqualified for apparent bias: Ebner 205 CLR at 344 [6] and 359 [63]. 12 In my opinion, no fair-minded lay observer would consider that the Federal Magistrates Court as a whole or any of its judges, whether or not he or she was or was not a party to the Pension case, should not continue to hear and determine any matter prima facie within the jurisdiction of that Court simply by reason of the existence or pendency of that case or that judge's participation, or abstention from participation, in it. A fair-minded lay observer would not be capable of reasonably apprehending that any of the judges constituting the Federal Magistrates Court might not bring an impartial mind to the resolution of any question before them in any individual litigant's case merely by reason of the pendency of the Pension case. A fair-minded lay observer would regard any Federal Magistrate sitting to hear and determine any matter before him or her as simply doing the very task which judges of that Court are charged by the Constitution and the Acts under which they exercise their jurisdictions to do. 13 The appellant also argued that the fact that in this case the trial judge had abstained from being party to the Pension case indicated that his Honour may have had a view about its likelihood of success or otherwise. I fail to see how that would influence a fair-minded lay observer's assessment that his Honour would do anything other than bring a fair and impartial mind to the resolution of the dispute and, indeed, how any person could have thought that the result in the appellant's matter was anything but inevitable and entirely appropriate. 14 In my opinion, the remark made by his Honour during the directions hearing on 12 March 2012 was entirely appropriate. It would not suggest to a fair-minded lay observer that his Honour had entered into any prejudgment in relation to the present proceedings or any other proceedings. Judges do not have to decide questions that are not necessary to the resolution of proceedings. By saying that, to the extent that it was not necessary to decide a matter, he would not decide it, did not reveal any prejudgment by his Honour of the issues the subject of the complaint in this case or any other case. 15 In my opinion, the overwhelming public interest is that the appellant should have his estate sequestrated and controlled by an independent trustee in bankruptcy. I am unable to detect any prejudice to him in refusing a stay. Accordingly, I dismiss the interlocutory application for a stay and I order the appellant to pay the respondent's costs of that application. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares.