JUDGMENT NO. soame2 S/F oonnconccccee! ccencesceseg TCHWORDS PRACTICE AND PROCEDURE - disqualification of judge for reasonable apprehension of prejudgment or bias - principles - reference to warnings in Re J.R.L.; Ex parte C.J.L (per Mason J.) and other cases against too ready withdrawal by a judge upon the application of one side only - special case of a split hearing where findings on liability were alleged to involve prejudgment of the credit of a person who would be an important witness at the later hearing to assess damages. eager v The New South Wales Bar Association (1983) 151 CLR Vakauta v Kelly (1989) 167 CLR 568 Australian National Industries Ltd v Spedley Securities Ltd (in lig.) (1992) 26 NSWLR 411 Re J.R.L.; Ex parte C.J.L. (1986) 161 CLR 342 Re Morling; Ex parte Australasian Meat Industry Employees Union (1985) 66 ALR 608 Re Finance Sector Union of Australia; ex parte Illaton Pty Ltd (1992) 107 ALR 581 PETER EPH v. INALD'S AUSTRALIA LIMITED NG 560 of 1992 ~ Burchett J. Sydney 21 October 1994 RECEIVED 21 OCT 1994 FEDERAL COURT OF AUSTRALIA PRINCIPAL REGISTRY IN THE FEDERAL R! F_AUSTRALIA NEW TH WALES DISTR REGISTRY NG 560 of 1992 EN. VISION wwe wee ww BETWEEN: PETER JOSEPH CARR Applicant AND: McDONALD'S AUSTRALIA LIMITED Respondent CORAM: Burchett J. PLACE: Sydney DATE : 21 October 1994 RDER_ OF THE RT THE COURT ORDERS THAT the respondent pay the applicant's costs of the application which was dismissed on 20 September 1994. uke NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN _THE RT_OF TRALIA NEW_S H_ WALES DI ICT REGISTRY GENERAL DIVISION NG 560 of 1992 BETWEEN: PETER JOSEPH CARR Applicant AND: McDONALD'S AUSTRALIA LIMITED Respondent CORAM: Burchett J. PLACE: Sydney DATE : 21 October 1994 REASONS FOR JUDGMENT BURCHETT J.: On 20 September 1994, the respondent applied, by motion, to have the damages hearing of these proceedings and any further directions hearings heard before a Judge of this Court other than myself, on the basis of a reasonable apprehension of prejudgment or bias. I dismissed the motion; reserved my reasons; and reserved the question of costs. I now publish my reasons and my Py decision on the issue of costs. Before the issues of liability in this case were heard, it was agreed between the parties that the issue of damages should be deferred until after the determination of liability. On 1€ February 1994, I delivered judgment holding the respondent liable, and it is upon certain parts of that judgment that the present application is based. Counsel for the respondent contended that I had made a general finding as to credit which 2. is unfavourable to the respondent's witness, Mr Russo, and favourable to the applicant; and that this finding is relevant to at least two issues which will arise in the damages hearing, upon which it is proposed to call Mr Russo, and to challenge the evidence of the applicant. The respondent pointed to the following passages in my judgment, making special reference to the sentence I now reproduce in italics: "ET]he evidence of Mr Carr does receive some important confirmation from the evidence of Mr Zalfelds, while Mr Russo's evidence is in conflict with his own notes." "Mr Russo, I am satisfied, used the word 'offer'". "I am satisfied, however, that [Mr Carr] was not given other than the most broad indication of the nature of the allegations." "(Aj minimum of information was for the first time given to (Mr Carr]." "Mr McManus and Mr Russo gave evidence to the effect that they intended to give full and fair consideration to the truth of the matter, and to give Mr Carr on 23 June a full and fair hearing. I do not accept this evidence. Generally, where the evidence of the Applicant is in conflict with that of Messrs McManus and Russo, I prefer the applicant." oh "Tl am satisfied that Mr Ritchie did indeed regard McDonald's image as the matter of overriding concern, irrespective of whether the allegations were actually true, and I infer confidently that he communicated this point of view to Mr Russo." The governing principle is clearly set out in Livesey v The New South Wales Bar Association (1983) 151 CLR 288 at 293-4: "That principle is that 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 3. he might not bring an impartial and unprejudiced mind to the resolution of the question involved in it." This proposition was applied in Vakauta v Kelly (1989) 167 CLR 568, where the Court considered statements made by the trial judge in the course of a hearing, that were critical of evidence given by the defendant's medical witnesses in previous cases. Toohey J., at 584, found: "[T])here can be little doubt that his Honour's remarks would excite in the minds of the parties and in members of the public a reasonable apprehension that the trial judge might not bring an unprejudiced mind to the resolution of the matter before him, namely, an assessment based upon the evidence, lay and medical, of an appropriate amount to compensate the respondent for the injuries she had suffered". Brennan, Deane and Gaudron JJ., at 571, referred to "an ill-defined line beyond which the expression by a trial judge of preconceived views about the reliability of particular medical witnesses could threaten the appearance of impartial justice." on And, at 573, they concluded: "While, as we have indicated, the line between comments which would be likely to have that effect and comments which would not is necessarily an imprecise one, we have come to the conclusion that, when they are read in the context of what was said in the course of the trial, his Honour's comments in his judgment fall on the wrong side of that line." In Australian National Industries Ltd v Spedley Securities Ltd (in lig) (1992) 26 NSWLR 411 Kirby P., at 419, referred to 4. 'the stringency which is required, by decisions of the highest courts, of all those who exercise judicial office or have equivalent functions in Australia. Although it was formerly necessary to demonstrate a 'probability' or 'real likelihood' that a reasonable observer would apprehend bias by pre-judgment on the part of the judicial officer concerned, such is not now the case in this country. By repeated decisions of the High Court the test is now expressed in terms of possibilities, that is, whether the parties or the public 'might entertain a reasonable apprehension that the judge might not bring an impartial and unprejudiced mind to the resolution of the question involved...'". Samuels J.A., at 430, saw the doctrine of apprehended bias on the ground of prejudgment as essentially "the product of judicial policy designed to preserve the public interest in the due administration of justice and to ensure the perceived integrity of the judicial system ... . It raises the question whether justice is seen to be done if a judge who has already decided a point comes to it again in proceedings in which the contestants are not bound by the prior determination. " See also Webb v R. (1994) 122 ALR 41 at 44; Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 at 99-100; Re Media,Entertainment and Ar lliance;: Ex parte Hoyts Corporation Pt Ltd (1994) 119 ALR 206 at 210; Australian and Overseas Telecommunications Corporation Limited v McAuslan (1993) 47 FCR 492 at 494-495, 514: Gas & Fuel Corporation Superannuation Fund yv_Saunders (1994) 123 ALR 323; and Shields v CBFC Limited (Spender, Foster and O'Loughlin JJ., unreported, 6 September 1994). 5. Side by side with these strong reflections of the judicial policy of the High Court to which Samuels J.A. referred, there have been equally strong warnings that a Judge should not disqualify himself or herself without good reason. The loss to the administration of justice and the burden placed on others by doing so must be taken into account. In Re J.R.L.; Ex parte C.J.G. (1986) 161 CLR 342 at 352, Mason J. stated the point with vigour: "It seems that the acceptance by this Court of the test of reasonable apprehension of bias in such cases as Watson ((1976) 136 CLR 248) and Livesey [supra] has led to an increase in the frequency of applications by litigants that judicial officers should disqualify themselves from sitting in particular cases on account of their participation in other proceedings involving one of the litigants or on account of conduct during the litigation. It needs to be said loudly and clearly that the ground of disqualification is a reasonable apprehension that the judicial officer will not decide the case impartially or without prejudice, rather than he will decide the case adversely to one party. There may be many situations in which previous decisions of a judicial officer on issues of fact and law may generate an expectation that he is likely to decide issues in a particular case adversely to one of the parties. But this does not mean either that he will approach the issues in that case otherwise than with an impartial and unprejudiced mind in the sense in which that expression is used in the authorities or that his previous decisions provide an acceptable basis for inferring that there is a reasonable apprehension that he will approach the issues in this way. In cases of this kind, disqualification is only made out by showing that there is a reasonable apprehension of bias by reason of prejudgment and this must be 'firmly established' ... . Although it is important that justice must be seen to be done, it is equally important that judicial officers discharge their duty to sit and do not, by acceding too readily to suggestions of appearance of bias, encourage parties to believe that by seeking the disqualification of a judge, they will have their case tried by someone thought to be more likely to decide the case in their favour." on 6. Similarly, in Livesey v New South Wales Bar Association (supra), the Full Bench of the High Court stated (at 294): "(I)t would be an abdication of judicial function and an encouragement of procedural abuse for a judge to adopt the approach that he should automatically disqualify himself whenever he was requested by one party to do so on the grounds of a possible appearance of pre-judgment or bias, regardless of whether the other party desired that the matter be dealt with by him as the judge to whom the hearing of the case had been entrusted by the ordinary procedures and practice of the particular court. Once it is accepted that a judge should not automatically stand aside whenever he is requested so to do, it is inevitable that appellate courts, removed from the pressure of a possible need for immediate decision and enjoying the advantages both of hindsight and, conceivably, further material and information, will on occasion conclude that a decision of a judge at first instance that he should sit was mistaken and has resulted in a situation where one of the parties or a fair-minded observer might entertain a reasonable apprehension of bias or pre- judgment. Such a conclusion does not involve any personal criticism of the judge at first instance or any assessment of his qualities or of his ability to have dealt with the case before him fairly and without pre-judgment or bias." In Australian National Industries Ltd v Spedley Securities (supra), Samuels J.A. (in dissent, together with Gleeson C.J.) quoted, at 427, from Mason J.'s judgment in Re J.R.L. (supga), and at 430 he referred to "other public interests" which "go to preserve the due administration of justice": "It is in the public interest that litigation which stems from a very large corporate failure which represents a risk inherent in our market economy should be disposed of as quickly and as frugally as circumstances permit. If one regards the doctrine of apprehended bias, and the doctrine, not of necessity strictly so-called, but which demands effective judicial administration, as representing competing public interests, the balancing exercise with which the courts are familiar becomes much easier to accomplish. ... I think that regard being had to the 7. pressures under which our system of justice operates at the moment, the courts should conclude that in circumstances such as the present what is clearly the most effective way of handling this litigation should not be abandoned save upon grounds firmly and clearly established." While Meagher J.A. reached the opposite conclusion in the particular case, he stated (at 447) that he did so "with great reluctance". There are, in addition, important authorities which make the point that it is a special situation where you have one piece of litigation divided into more than one hearing, whether by consent or on some other basis. In such a case, complete disentanglement of issues is likely not to be possible on a second hearing, whoever hears it. In any case, it must be assumed that the court and parties contemplated, at the time the order for separate hearings was made, that the kind of problem now raised might simply have to be accepted. In Re Morling; Ex parte Australasian Meat Industry Employees Union (1985) 66 ALR 608, Morling J. had been asked to hear a claim for a permanent injunction, deferxing to a later time a claim also made for damages. Following. his Honour's decision on the application for an injunction, the objection was raised that he had formed a prejudgment in favour of the credibility of a particular key witness, and an order nisi for prohibition was sought from the High Court to prevent him from continuing to hear the matter. The application for the order nisi came before Dawson J., who was (as he said at 611-612) 8. "not persuaded that there is any foundation for supposing that Morling J, in expressing' the conclusions which he did upon the evidence which was then before him, was demonstrating any incapacity to bring to the resolution of the question of damages an impartial or unprejudiced mind. The course which the proceedings before him took, and which apparently commended itself to the parties at the time, required him to reach separate conclusions in relation to the issue of injunctive relief and the issue of damages. This must have been obvious when that course was adopted. But having expressed his view regarding the evidence adduced upon the question of injunctive relief, there is no reason to suppose that, upon the question of responsibilty of the union for any loss or damage suffered by the claimant and the extent of any such loss or damage, his Honour will not reach his conclusions in accordance with the evidence which, having regard to the course taken, may not be the same evidence as that upon which his Honour granted an injunction. ... It was submitted that, in making the observations to which I have referred, Morling J expressed views which went beyond what was necessary to dispose of the claim for an injunction. Be that as it may, he reached those views at a time when the whole of the proceedings before him had not been completed and there is nothing to indicate that they represented concluded views whatever course the proceedings might thereafter take. Indeed, the piecemeal nature of the proceedings required conclusions to be reached at different stages upon the material then before the judge. Difficult, perhaps undesirable, as such a mode of proceeding might be, it does not carry with it the implication that the judge, in reaching a conclusion upon one issue in the case must subsequently approach another issue with a closed mind, unable to give proper weight to any further material which might be put before him. Particular reliance was placed by the union upon the view expressed by Morling J in granting an injunction that he found Mr Pendarvis to be a reliable witness. It was said, and I accept, that Mr Pendarvis is likely to be a crucial witness upon the question of damages. However, it does not seem to me that in saying that at the time he found Mr Pendarvis to be a reliable witness, Morling J was thereby indicating that he would be unresponsive to any proper attack subsequently made upon his credibilty, particularly an attack made upon the basis of further material or cross-examination." on 9. In Re Finance Sector Union of Australia: ex parte Illaton Pty Utd (1992) 107 ALR 581, two sets of proceedings had arisen under the Industrial Relations Act 1988 (Cth) from a common set of facts and between the same interests. Refusing an application to have the Deputy President of the Commission precluded from participating in the second proceeding, Deane, Toohey and Gaudron JJ. said (at 583-4): "It is true that Deputy President MacBean's reasons for decision on the application pursuant to s 111(1)(g) of the Act contain some strongly worded conclusions in relation to some issues of fact which may be involved in the s 115 proceedings. Those conclusions were reached by him after a hearing extending over some 45 days of the Commission's time. If what was involved were two sets of proceedings between different interests about unrelated matters, Deputy President MacBean may well have been disqualified from participating in the s 115 proceedings by reason of an impermissible appearance of bias and prejudgment. The s 111(1)(g) and the s 115 proceedings are, however, related proceedings between the same interests. Indeed, both sets of proceedings must be seen as steps in one overall contest between the same group of interests and arising out of a common set of facts. In that context, it appears to us to be unreasonable and impractical to think that the determination of factual issues at one point in the resolution of the overall contest could or should preclude involvement in other steps, the outcome of which may depend on the same = facts or some aspect of them." In the light of these principles, I was satisfied at the hearing of this motion that the facts raised no relevant apprehension, and that I should not disqualify myself from hearing the issue of damages or any further directions hearing of these proceedings. 10. Turning now to the question of costs, I am of the opinion that the applicant should have his costs on the footing that costs follow the event. I certify that this and the preceding nine (9) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Burchett. Associate: Phakic Ob La Date: 21 October 1994 Counsel for the Applicant: Mr J.M. Stowe QC Solicitors for the Applicant: Messrs Champion & Partners Counsel for the Respondent: Mr L.G. Foster Solicitors for the Respondent: Messrs Baker & McKenzie Date of hearing: 20 September 1994 a