Waterhouse v Independent Commission Against Corruption

Supreme Court of NSW|2014-04-02|Before: Garling J

Judgment 1By an Amended Statement of Claim filed on 27 June 2013, Mr Waterhouse, the plaintiff, claims relief from this Court with respect to the defendant, the Independent Commission Against Corruption ("the ICAC"). 2Putting it only in summary form, the relief sought in the Amended Statement of Claim, by way of various orders and declarations, is directed towards compelling the ICAC to investigate and, as well, to conduct a public inquiry into the facts, matters and circumstances raised by a 900 page complaint lodged by Mr Waterhouse with the ICAC on 24 January 2012. 3The relief sought by Mr Waterhouse is said to be necessary and appropriate because of the gravity of the facts, matters and circumstances raised by the complaint; the statutory and public duty falling on the ICAC; and the fact that the ICAC has declined to investigate the matter.

Interlocutory Motions 4On 18 July 2013, the ICAC filed a Motion in which it sought an order for the summary dismissal of the proceedings pursuant to r 13.4 of the Uniform Civil Procedure Rules 2005 ("UCPR"). It sought in the alternative, an order pursuant to r 14.28 of the UCPR that the Amended Statement of Claim be struck out. 5On 1 August 2013, Mr Waterhouse filed a Motion in which he sought summary judgment against the ICAC pursuant to r 13.1 of the UCPR. These two motions were listed for hearing together before the Court on 1 April 2014. It will be convenient to refer to these motions as the summary relief motions. 6On 24 February 2013, Mr Waterhouse filed a further Motion which sought orders with respect to the disqualification of the trial Judge and any permanent full-time member of the Supreme Court. This Motion was also listed for hearing on 1 April 2014. It will be convenient to refer to this as the disqualification motion. 7I determined, with the agreement of both parties, when the matter was called on for hearing on 1 April 2014, that I should hear and rule upon the disqualification motion before hearing the summary relief motions. This judgment deals only with the disqualification motion.

Disqualification Motion 8For the purposes of this judgment, the relevant orders sought in the disqualification motion are set out in Orders 1 to 3. They are in the following form: "(1) That the Justice assigned is disqualified for apprehension of bias. (2) That the Supreme Court of New South Wales as an institution is disqualified from dealing with the matter for apprehension of bias. (3) That the Supreme Court of New South Wales is not the appropriate forum for the matters raised in the Amended Statement of Claim." 9Mr Waterhouse made it plain that the basis for the submissions that the trial Judge should disqualify himself, as set out in Order 1, was only that the trial judge was a permanent member of the Supreme Court. He did not submit that there was anything else about the trial Judge which gave rise to any apprehension of bias. 10In submissions, Mr Waterhouse made it plain that what he was seeking by the disqualification motion, was that any permanent or full-time member of the Supreme Court ought be disqualified. He submitted that an acting Judge appointed from outside of New South Wales simply to hear these proceedings would not be disqualified. The ICAC opposed the relief sought in the motion. 11Mr Waterhouse made it plain in his submissions that he was relying upon the principles relating to apprehended bias in support of his disqualification motion.

Legal Principles 12The decision of the High Court of Australia in Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 at [6] is authority for the proposition that the test for disqualification for apprehended bias on the part of a judge is that: "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." 13This test was recently reaffirmed by the High Court of Australia in Michael Wilson & Partners Limited v Nicholls [2011] HCA 48; (2011) 244 CLR 427 at [31] where Gummow ACJ and Hayne, Crennan and Bell JJ said: "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...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." 14The concept of the hypothetical reasonable observer was explored by the High Court of Australia in Johnson v Johnson [2000] HCA 48; (2000) 201 CLR 488 at [12] where Gleeson CJ and Gaudron, McHugh, Gummow and Hayne JJ said that: "The hypothetical reasonable observer of the judge's conduct is postulated in order to emphasise that the test is objective, is founded in the need for public confidence in the judiciary, and is not based purely upon the assessment by some judges of the capacity of performance of their colleagues. At the same time, two things need to be remembered: the observer is taken to be reasonable; and the person being observed is a 'professional judge whose training, tradition and oath or affirmation require the judge to discard the irrelevant, the immaterial and the prejudicial'." 15This statement was reaffirmed by the plurality in Michael Wilson at [32]. 16One basis, which might lead to an apprehension of bias, is where the presiding judge is interested in the outcome of the proceedings. A fundamental principle of the administration of justice is that the tribunal constituted to hear and determine any matter is both independent and impartial. As the plurality said in Ebner at [60]: "It was said earlier that the fundamental principle to which effect is given by disqualification of a judge is the necessity for an independent and impartial tribunal. Concepts of independence and impartiality overlap, but they are not co-extensive. In order to maintain both the reality and the appearance of independence, as well as impartiality, there must be a prohibition upon a judge sitting in a case to which he or she is a party, and that would include a case where one of the parties on the record is a nominee or alter ego of the judge." 17Their Honours went on to say at [63] in Ebner this: "A judge is disqualified from deciding a case to which he or she is a party, even if the judge has no pecuniary interest in the outcome of the case. Again, this rule is subject to qualifications of waiver and necessity." 18It is appropriate to examine the principle of necessity. One of the recognised exceptions to the principles relating to the disqualification of judges for apprehension of bias is the principle of necessity. In Laws v Australian Broadcasting Tribunal [1990] HCA 31; (1990) 170 CLR 71 Mason CJ and Brennan J said, at page 88, this: "... the operation of the rule of necessity would ensure that the Tribunal is not disabled from performing its statutory functions. The rule of necessity permits a member of a court who has some interest in the subject matter of the litigation to sit in a case when no judge without such an interest is available to sit...The existence of the principle has been recognised in this Court by Isaacs J in Dickason v Edwards and by Brennan and Deane JJ in Builders' Registration Board (Queensland) v Rauber. In the latter case, Brennan J had no hesitation in holding that the principle applied to a statutory tribunal as well as to a court...The rule of necessity gives expression to the principle that the rules of natural justice cannot be invoked to frustrate the intended operation of a statute which sets up a tribunal and requires it to perform the statutory functions entrusted to it. Or, to put the matter another way, the statutory requirement that the tribunal perform the functions assigned to it must prevail over and displace the application of the rules of natural justice." 19At page 96, Deane J said the purpose of the rule of necessity was to prevent a failure of justice and to avoid public or private detriment. He said the principle only applies to the extent that necessity justifies. 20The existence of the principle was also recognised and affirmed in Ebner at [64] to [65] by Gleeson CJ, McHugh, Gummow and Hayne JJ; at [178] to [179] by Kirby J; and at [183] by Callinan J. 21At [65] in Ebner, Gleeson CJ and McHugh, Gummow and Hayne JJ said that the purpose of the principle was to avoid consequences which would not promote public confidence in the administration of justice. 22In considering the disqualification motion, it is also necessary to bear in mind the principle that it is wrong for a judge to automatically disqualify himself or herself simply upon the request of a party. It is important that judges discharge their duty to sit rather than to abdicate their judicial function and not to too readily accede to applications to disqualify themselves. See Livesey v New South Wales Bar Association [1983] HCA 17; (1983) 151 CLR 288 at 294; see also Re JRL; Ex parte CJL [1986] HCA 34; (1986) 161 CLR 342 at 352.

Submissions 23Mr Waterhouse submits that none of the permanent full-time judges of the Supreme Court can sit to hear the summary relief motions and the proceedings generally because of an apprehension of bias on their part. He submits that the apprehension of bias arises because of the subject matter of the complaint which he seeks to have investigated by the ICAC on orders from this Court. He submits that the Court is in effect and in substance a party to the proceedings. He also submits that it cannot be impartial because the relief sought, namely the holding of a public inquiry, would be contrary to the interests and reputation of the Court to such an extent that the reasonable observer might apprehend that the Court and any permanent member of it, might not bring an impartial mind to the determination of the relief, and make a decision which favoured the Court's interest. 24To fully understand the submissions of Mr Waterhouse, it is necessary to say something about the complaint, or at least the description of it in the Amended Statement of Claim. A sufficient sense can be obtained from paragraph 2 of the pleading, which is in the following form: "On 24 January 2012 the plaintiff delivered to the ICAC a brief of complaint. This complaint consisted of two lever arch volumes of approximately 900 pages; and contained materials and evidence supporting allegations to the effect that there exists a confederacy between, inter alia, the following public institutions and certain of their personnel: - The Supreme Court of New South Wales; The Attorney-General's Department; The Independent Commission Against Corruption and the Office of its Inspector; The New South Wales Police Service, including its State Crime Command; The Police Integrity Commission and the Office of its Inspector; and The New South Wales Crime Commission with the alleged extended common criminal purpose of, inter alia, covering up and keeping covered up an alleged Supreme Court judge fixing and perversion of justice by the former Premier of New South Wales, Neville Kenneth Wran, and the former bookmaker William Stanley Waterhouse and his bookmaker son Robert William Waterhouse and his daughter Louise Waterhouse and also necessarily their own institutions and personnels, many and diverse alleged criminal and corrupt acts in doing so." 25The plaintiff by reference to the general subject matter of the proceedings submits that in any public inquiry into his complaint there is a real possibility that the conduct of one or more judges of this Court will be called into question, the processes and reputation of the Court will be called into question, and that a significant number of retired judges of the Court, and one presently sitting judge of the Court, may be required to provide statements of evidence to any public inquiry and may be required to give evidence publicly on the subject matter of the complaint. 26Accordingly, he submits that the Court and all members of it, unless comprised of an acting Judge drawn from outside of New South Wales, cannot hear the proceedings because of an apprehension of bias. 27He further submits that the principle of necessity has no application because of the gravity and seriousness of the conduct which he alleges in the Amended Statement of Claim, ought be the subject of a public inquiry.

Discernment 28The Supreme Court is clearly not a named party to the proceedings, nor are any of the Judges of the Supreme Court named as a party in the proceedings. 29It cannot properly be said that the ICAC, which is a statutory corporation with the objects and functions given to it by the Independent Commission Against Corruption Act 1988, is the alter ego or nominee of the Court or any member of it, for the purposes of these proceedings. There is simply no connection between the two bodies. They are each part of separate arms of government in New South Wales. The ICAC is not a judicial body, it is an administrative one with the functions given to it by statute, with obligations to report to the Parliament, and to be subject to oversight by a Parliamentary Joint Committee. 30The Supreme Court, created by Royal Charter, is an independent body invested with all of the jurisdiction needed to administer justice in New South Wales. It is not an administrative body. It does not form a part of either the Executive of New South Wales or of the Legislature. It stands together with other independent courts as the judicial arm of government in New South Wales. It is not subject to direction from Parliament. Nor is it subject to the direction of any Minister of the Crown. 31Whilst I accept that the concept of interest may be a protean one, there is simply no basis for the assertion that the Court is a party to the proceedings. I would not uphold the disqualification motion on the basis that the Court or any member of it, is an interested party. 32As the principles make clear, the reasonable hypothetical observer is not a wholly uninformed person. I do not accept that any reasonable observer might, in the circumstances of this case, form a view that a judge of this Court might not be impartial when considering whether to grant relief which directly affects the ICAC, even though it may indirectly affect retired members of this Court. 33In forming this conclusion, I have had regard to, and taken into account, all of the relevant matters. Since this is, in effect, an ex tempore judgment, it is unnecessary to list all of the relevant facts, matters and circumstances; but the principal ones to which I draw attention are the following. 34First, the relief being sought, namely, the ordering of the ICAC to hold a public inquiry and to investigate Mr Waterhouse's complaint does not involve the making of, and the Court is not being asked itself to make, any findings about the conduct of any Judge or former Judge of the Court. Nor is the Court being asked to make any finding about the conduct of the Court as an institution. Rather, all the Court is being asked to do in these proceedings is to determine whether it should order the ICAC to do its public duty, and if so, in what way. 35Secondly, the events which are the subject matter of the complaint to the ICAC and which would be subject to a public inquiry, happened over twenty years ago and do not concern any present member of the Court. The fact that one judge of the Court may be called as a witness in respect of events which occurred whilst he was a barrister and before he became a Judge, does not affect the conclusion to be drawn that there is no presently interested party in any inquiry who is a member of the Court. 36Thirdly, to the extent that the Court has an interest in preserving its reputation, that interest exists because of the Court's role in the impartial administration of justice in New South Wales. There is no reason for a reasonable hypothetical observer to suppose that the interest of the Court is in preventing a public inquiry. On the contrary, it is just as likely that the reasonable observer would suppose that the reputation of the Court would be enhanced by the exposure of any corruption in the administration of justice twenty years ago, if that is in fact what happened. 37I am therefore not satisfied that any apprehension of bias arises, and I would not be prepared to uphold the motion on the basis of an apprehension of bias. 38However, even if I am wrong in my conclusions that the Supreme Court is not an interested party to the proceedings, or my conclusion about whether a reasonable apprehension of bias would arise, then this is a matter to which the principle of necessity would clearly apply.

Principle of Necessity 39It is to be recalled that the principle of necessity permits a member of a court who has some interest in the subject matter of the litigation to sit where no other judge of the same court without such an interest is available to sit. 40As well, it is to be recalled that there is a public, as well as a private, interest in the application of the rule of necessity in circumstances where it arises. 41On 21 March 2013, and again on 31 July 2013, Mr Waterhouse, by letter, asked the Chief Justice of the Supreme Court to take such steps and to pursue such administrative arrangements as were open to him to invite the Executive Council to appoint an acting judge from outside of New South Wales to hear and determine these proceedings, including the summary relief Motions. 42On 9 August 2013, the Chief Executive Officer and Principal Registrar of the Court responded to those letters on behalf of the Chief Justice. She indicated that the Chief Justice did not propose to take any action in respect of the matters raised in the correspondence of Mr Waterhouse. 43Further attempts by Mr Waterhouse to have steps taken by the Chief Justice have been unsuccessful. The Executive Council itself has not appointed any acting judge from outside New South Wales to hear and determine these proceedings. 44Both parties accept that this Court is the only court which can hear and determine these proceedings. Both parties accept that there is no other court which would have the jurisdiction to make the orders sought in the Amended Statement of Claim. 45To the extent that the submissions of Mr Waterhouse rely upon the decision of Bongiorno J in McLean v Nicholson [2002] VSC 446, that decision is entirely distinguishable and ought be distinguished from the circumstances of this case because in McLean the parties accepted that there was an alternate Court which had jurisdiction in the matter and it was open to his Honour to exercise the Court's jurisdiction pursuant to the Jurisdiction of Courts (Cross-vesting) Act 1987 (Vic), to transfer the proceedings to the Supreme Court of Queensland. That is what his Honour did. Here, as I have said, there is no other Court which can hear the proceedings. 46Every judge of the Court who is presently able to hear these proceedings has, to the extent that a Judge of this Court has an interest in the subject matter of the litigation, and I am far from persuaded that this is so, but even if I were to accept Mr Waterhouse's submission that every Judge has an interest in the litigation, then there is simply no Judge available without such an interest to sit, hear and determine these proceedings. 47In those circumstances, even if I did come to the view, and I do not, that the reasonable observer would apprehend that a fair-minded lay observer might reasonably apprehend that the Judge might not bring an impartial mind to the resolution of these proceedings, then the principle of necessity requires that, in the public interest, a member of this Court ought hear and determine these proceedings. And that is what I shall do. 48I dismiss the Notice of Motion of 24 February 2014 insofar as the relief set out in Orders 1, 2 and 3 contained therein is concerned.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 April 2014

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