FEDERAL COURT OF AUSTRALIA Dunlop v Fishburn (No. 2) [2012] FCA 314 Citation: Dunlop v Fishburn (No. 2) [2012] FCA 314 Appeal from: Fishburn v Dunlop [2009] FMCA 1331 Parties: JAMES HENRY DUNLOP v MICHAEL GEORGE FISHBURN, JOHN JAMES WATSON, CHRISTOPHER MARTIN O'BRIEN, SAMUEL BOYD COUPER AND MORGAN JAMES CHUBB AS TRUSTEE OF THE BANKRUPT ESTATE OF JAMES HENRY DUNLOP File number(s): NSD 1686 of 2011 Judges: KATZMANN J Date of judgment: 27 March 2012 Catchwords: PRACTICE AND PROCEDURE – Application for disqualification – association or interest – judge and two of the parties attended the same university over thirty years earlier – no reasonable apprehension of bias – waiver – whether hearing should be postponed Legislation: Federal Court of Australia Act 1976 (Cth) Federal Court Rules 2011 (Cth) r 4.03 Cases cited: Aussie Airlines Pty Limited v Australian Airlines Pty Ltd (1996) 65 FCR 215 Australian Competition and Consumer Commission v Samton Holdings Pty Ltd [2000] FCA 1201 Cirillo v Consolidated Press Property Pty Ltd (formerly known as Citicorp Australia Ltd) (2007) 245 ALR 374 Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 Edwards v Santos Ltd (No 3) [2011] FCA 886 Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 Michael Wilson & Partners Ltd v Nicholls (2011) 282 ALR 685 Minister for Immigration and Multicultural Affairs v Jia (2001) 205 CLR 507 R v Bow Street Metropolitan Stipendiary Magistrate; Ex parte Pinochet Ugarte (No. 2) [2000] 1 AC 119 Re JRL; Ex parte CJL (1986) 161 CLR 342 Vakauta v Kelly (1989) 167 CLR 568 Webb v The Queen (1994) 181 CLR 41 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 30 Solicitor for the Applicant: The applicant did not appear Solicitor for the Respondents: Mr S Campbell of Fishburn Watson O'Brien Solicitor for the Fifth Respondent: The fifth respondent appeared in person IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1686 of 2011 BETWEEN: JAMES HENRY DUNLOP Applicant AND: MICHAEL GEORGE FISHBURN First Respondent JOHN JAMES WATSON Second Respondent CHRISTOPHER MARTIN O'BRIEN Third Respondent SAMUEL BOYD COUPER Fourth Respondent MORGAN JAMES CHUBB AS TRUSTEE OF THE BANKRUPT ESTATE OF JAMES HENRY DUNLOP Fifth Respondent JUDGE: KATZMANN J DATE: 27 MARCH 2012 PLACE: SYDNEY REASONS FOR JUDGMENT (revised from transcript) 1 The applicant, Mr Dunlop, has applied for an extension of time to seek leave to appeal from a sequestration order made by a federal magistrate on 10 November 2009. The first three respondents are partners in a law firm that previously acted for Mr Dunlop in litigation in the NSW Land and Environment Court and to whom Mr Dunlop remains indebted. They were the petitioning creditors. The remaining respondent, Mr Chubb, is the trustee of Mr Dunlop's bankrupt estate. 2 The application is listed for hearing today. Mr Dunlop objected to me hearing it and wrote a letter to the Court requesting me to recuse myself. I asked the Registry to advise him that I would not be acceding to his request. My reasons follow. Background 3 The application for extension of time was filed on 30 September 2011, nearly two years after the sequestration order was made. Soon after it was filed, Mr Dunlop also sought a stay of a writ of possession over certain land he owned, a writ which had been issued some four months earlier. That matter was listed before me for first directions on 14 October 2011. I indicated at the time that I was not disposed to grant the stay but offered to hear the application for extension of time together with the stay application on 19 October 2011. This seemed the sensible course. If the application for extension of time failed, the stay application would fall with it. If it succeeded, the stay application could then be considered. 4 On 19 October 2011 I raised with the parties the fact that I had realised the previous day that I knew the first respondent, Mr Fishburn. I informed the parties that: 1. I was at university with Mr Fishburn; 2. I would not have seen him more than a handful of times over 30 plus years since and then only by chance encounter in a courtroom; 3. I did not think that would cause any problem at all, noting that Mr Fishburn had not sworn an affidavit in the proceeding. 5 I said I did not know Stephen Campbell, also a solicitor in the firm, who was representing the petitioning creditors in the proceeding and who had sworn an affidavit in the Federal Magistrates Court (which I was later told neither he nor the trustee intended to read in this Court). It turned out that Mr Campbell was a year behind me and Mr Fishburn at university and remembered me but said that our paths had not crossed since and we had probably not exchanged words at university. I did not recognise him. Mr Campbell reminded me that Mr Watson, another of the petitioning creditors, was also in my year at university. I should point out that I left university 33 years ago. 6 I invited Ms Tangsilsat, a solicitor who was then acting for Mr Dunlop, to seek instructions. She informed me that she did not object to me hearing the case. Neither did the other parties. 7 At this point Ms Tangsilsat sought an adjournment of the application for extension of time, saying she had a witness, upon whose evidence she wished to rely (although he had not sworn an affidavit) who was unavailable. I granted the adjournment. I then proceeded to hear the stay application, and stood the application for extension of time over to a date to be fixed. Two days later I dismissed the stay application: Dunlop v Fishburn [2011] FCA 1194. At the same time I made orders for the filing and service of any further evidence in support of the application for an extension of time, anticipating that any hearing would take place in early December. (The delay was brought about by Ms Tangsilsat's impending trip to Thailand.) In the meantime I was notified that a hearing could not take place then and more time would be required because Mr Dunlop was unwell. 8 On 2 December 2011 Ms Tangsilsat filed a notice of intention to cease to act and on 27 January 2012 she filed a notice of ceasing to act, giving in it Mr Dunlop's last known residential or business address. Mr Dunlop, himself, filed a notice of address for service on 20 December 2011, which provided his residential address and his partner's email address. 9 At a directions hearing on 5 December 2011, at which Mr Dunlop appeared for himself, I made orders relating to the filing and serving of any further affidavits and submissions, and any request for cross-examination of any deponent. I also ordered that any party wanting an oral hearing notify my chambers by 2 March 2012 and that, in the event that I decided to proceed by way of oral hearing, that hearing would take place on 26 March 2012. On 2 March 2012 Mr Dunlop (alone amongst the parties) advised that he wanted an oral hearing and I granted his request, confirming the hearing date fixed on 5 December 2011. 10 Mr Dunlop has filed three affidavits in support of his application, Mr Chubb one, the petitioning creditors none. The parties have also filed submissions. Mr Dunlop's submissions were written by Ms Tangsilsat and annexed to one of his affidavits. 11 On 7 March 2012 Mr Chubb advised the Registry that there was no money remaining in Mr Dunlop's estate to pay a lawyer and that he would now be representing himself. He also advised that he would be out of the country until the day the matter was fixed for hearing and asked that the matter be stood over for hearing the next day. 12 On 8 March 2012 the Registry advised the parties that Mr Chubb was overseas until 26 March 2012 and that I proposed to hear the matter the following day. On 14 March 2012 I formally vacated the order for a hearing on 26 March 2012 and listed the application for hearing the next day. 13 The same day, that is, 14 March 2012, Mr Dunlop advised the Court that he wanted Mr Chubb and Mr Campbell to be available for cross-examination. This request was well outside the time he was required to notify the court under the orders I made on 5 December 2011. Mr Dunlop also advised that 27 March was "not suitable as my representative has other commitments and is unable to attend" but that any date after 7 April 2012 was fine with him. The reference to a representative was puzzling. This was the first time I had been told that Mr Dunlop had a representative. No lawyer has filed a notice of acting as required by the Federal Court Rules 2011 (Cth) (r 4.03). In all the circumstances I confirmed that the hearing would take place on 27 March 2012. 14 On 20 March 2012, a week before the scheduled hearing, the Registry received a letter from Mr Dunlop marked for my attention. The letter was not apparently copied to the other parties. It reads: I write with concern of bias and or a miscarriage of justice in my appeal and ask your immediate removal from presiding over my hearing. As you are aware the defendant Lawyers - Michael George Fishburn and John James Watson are acquainted to you, which may prejudice my case, in the least there is a conflict of interest. I no longer use my former lawyer, as I was deeply concerned that she allowed your continuance after it was made known your long acquaintance with Mr Michael George Fishburn and Mr John James Watson. I have written to Chief Justice Keane at the Federal Court of Australia QLD asking the same, and to reschedule the hearing date to coincide equally for all parties. I am in no position to attend Court on 27 March 2012. Should Court proceed in my absence it would leave no alternative but to take the matter further to find justice. I trust in your understanding. Why recusal is not justified 15 It is not clear whether Mr Dunlop contends that I am actually biased against him or that there is a reasonable apprehension that I might be. But if either contention is made good, I am obliged to recuse myself. If not, I am obliged to hear and decide the case. As it happens, neither actual nor apprehended bias is made out and the application that I "remove" myself must be refused. 16 An allegation of actual bias is not lightly to be made and will not be upheld without distinct proof: Minister for Immigration and Multicultural Affairs v Jia (2001) 205 CLR 507 at [69] and [127]. Here, Mr Dunlop has proved nothing. 17 An apprehension of bias can arise in a range of different circumstances and can include interest, whether pecuniary or not, and contact or association with a person involved in a proceeding: Webb v The Queen (1994) 181 CLR 41, 74. The general principle, however, is the same and it applies to all cases of apprehended bias, whether arising out of prejudgment, conduct, extraneous information or, as the allegation is here, association or interest: Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at [33] ("Ebner"). That principle has been stated and restated by the High Court on numerous occasions, most recently in Michael Wilson & Partners Ltd v Nicholls (2011) 282 ALR 685 ("Michael Wilson v Nicholls"). It is this. Apart from any question of necessity (which is irrelevant here) or waiver (about which I will say something later), there will be an apprehension of bias if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the issues in dispute: Michael Wilson v Nicholls at [31]. On the other hand, judges have a duty to sit. They must not too readily accede to applications for disqualification so as to encourage a party to believe that by seeking the judge's disqualification they will have their case decided by someone thought to be more likely to decide it in their favour: Re JRL; Ex parte CJL (1986) 161 CLR 342 at 352. A judge will not be disqualified from sitting unless there is a substantial ground for saying that he or she should not do so: Ebner at [19]. In this case there is no such ground. 18 I do not accept that a fair-minded lay observer might reasonably apprehend that I might not bring an impartial and unprejudiced mind to the resolution of the issues in dispute. The hypothetical fair-minded lay observer is assumed to have knowledge of those issues and the circumstances in which they come to be decided: Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 at 87 per Mason CJ and Brennan J. Here, the only question is whether there should be an extension of time. Neither Mr Fishburn nor Mr Watson has filed an affidavit. I will not therefore have decide whether to accept their evidence in preference to Mr Dunlop's. 19 This is not a case where the judge has a pecuniary interest in the outcome of the litigation or any other interest in its result or subject-matter by reason of an association with a person interested in or associated with the litigation that could shake public confidence in the administration of justice. Cf. R v Bow Street Metropolitan Stipendiary Magistrate; Ex parte Pinochet Ugarte (No. 2) [2000] 1 AC 119. 20 As the plurality pointed out in Ebner at [8] and again at [30], it is insufficient simply to assert that a judge has an "interest" in litigation or in a party to it: The apprehension of bias principle admits of the possibility of human frailty. Its application is as diverse as human frailty. Its application requires two steps. First, it requires the identification of what it is said might lead a judge (or juror) to decide a case other than on its legal and factual merits. The second step is no less important. There must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits. The bare assertion that a judge (or juror) has an "interest" in litigation, or an interest in a party to it, will be of no assistance until the nature of the interest, and the asserted connection with the possibility of departure from impartial decision making, is articulated. Only then can the reasonableness of the asserted apprehension of bias be assessed. 21 These requirements apply regardless of the ground upon which disqualification is sought to be achieved. In Michael Wilson v Nicholls (a case of apprehension of bias based on prejudgment) at [67] the High Court again emphasised the need for an objective assessment of the logical connection between the facts and circumstances said to give rise to the apprehension and the asserted conclusion that the judge might not decide the issues in an impartial way. In this case Mr Dunlop has not made that connection. He has not shown how my acquaintance with either Mr Fishburn or Mr Watson might reasonably be thought to affect my capacity to hear and decide the legal or factual issues impartially and without prejudice. In effect, all Mr Dunlop relies upon is the bare identification of an association. He states there is a conflict of interest but he does not articulate how the conflict might arise. The hypothetical fair-minded lay observer would appreciate that judges come across solicitors all the time. Mere acquaintance cannot be enough to create the relevant apprehension. In Aussie Airlines Pty Limited v Australian Airlines Pty Ltd (1996) 65 FCR 215, Merkel J observed at 222 that in a case where disqualification is sought by reason of association based on the relationship between a decision-maker (in that case an adjudicator) and a party, there must be "something in the nature or the extent of the association which leads the bystander to conclude, whether for friendship, love, money, fear, favour or otherwise, that the [decision-maker] might be influenced by the association". In Australian Competition and Consumer Commission v Samton Holdings Pty Ltd [2000] FCA 1201, Carr J declined to disqualify himself, though he had an association with Professor Alan Fels, the then chairman of the ACCC and its public face. His Honour informed the parties that he had known Professor Fels for some time, their wives were friends and he and his wife had had lunch at the Fels' home in Melbourne in the company of only two others who did not belong to the Fels' family only a month beforehand. 22 In this case the logical connection between my association with Messrs Fishburn and Watson and the disposition of the case on the merits is opaque. In the circumstances the application that I recuse myself must fail. 23 Even if Mr Dunlop's application were soundly based, it should fail. That is because by his conduct Mr Dunlop is taken to have waived any objection. When a party is in a position to object but takes no step to do so, that party cannot be heard to complain later that the judge was biased: Vakauta v Kelly (1989) 167 CLR 568 at 587 ("Vakauta"). The objection must be taken at the earliest possible opportunity, rather than saved up for later use: Edwards v Santos Ltd (No 3) [2011] FCA 886 at [49]. Mr Dunlop was made aware of the very circumstances upon which he now relies some five months ago. He raised no objection then. Indeed, his solicitor informed the Court that she did not object and she did so after I invited her to take instructions. Mr Dunlop is bound by the course his solicitor took. In any event, Mr Dunlop represented himself at the directions hearing on 5 December 2011 and raised no objection then either. The circumstances have not changed in the meantime. The Court explained in Vakauta at 588: Waiver involves a decision by the party against whose case bias is shown to raise no objection … The situation is one in which the law prevents a party to litigation from taking up two inconsistent positions; he is held to his election. While, of course, the community has an interest in knowing that cases are decided impartially, that interest is not affected adversely by a doctrine which refuses a party to litigation the opportunity to resile from a position he has taken. 24 In Vakauta the appellant was on this basis held to have waived any entitlement to have the trial judge disqualified on the basis of comments he had made during the hearing. In this case, Mr Dunlop is taken to have waived any entitlement to ask that I disqualify myself from hearing this case because of my acquaintance with two of the petitioning creditors. 25 The timing of the application suggests that the only reason for it is dissatisfaction with the outcome of Mr Dunlop's request that the Court not proceed with the hearing on 27 March. 26 Yesterday, a letter under Mr Dunlop's signature addressed to me (and copied to various others including the Chief Justice and the Queen) was faxed to the Court informing me that Mr Dunlop did not intend to appear, did not consent to a hearing "ex parte without [his] presence", did not consent under the current circumstances for me to preside over the hearing, that he had a right under the Constitution to trial by jury, and repeated the request for me to "stand down". Nothing said in that letter casts any doubt on the correctness of the conclusions I have reached. Should the hearing be postponed? 27 In his letter of 19 March 2012 Mr Dunlop did not formally seek an adjournment but it is reasonable to infer that that is what he was after. The remaining question, then, is whether I should adjourn the hearing. In considering whether or not to do so I must give effect to the provisions of s 37M of the Federal Court of Australia Act 1976 (Cth), which require that the Court's powers be exercised in the way that best promotes the overarching purpose of the civil procedure provisions of the Act and Rules. That purpose is the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. The overarching purpose includes the following objectives: (a) the just determination of all proceedings before the Court; (b) the efficient use of the judicial and administrative resources available for the purposes of the Court; (c) the efficient disposal of the Court's overall caseload; (d) the disposal of all proceedings in a timely manner; and (e) the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute. 28 Mr Dunlop no longer appears to advance the argument he put on 14 March 2012. In his letter of 19 March 2012 he said he was "in no position to attend Court" but offered and continues to offer no reason why this may be so. The proposal that the hearing be adjourned is not supported by any evidence. 29 The Court will always attempt to accommodate the parties and their legal representatives. But that is not always possible nor necessarily desirable. At Mr Dunlop's request I have already postponed the proceeding twice. No doubt that has inconvenienced the other parties. Mr Chubb has lost his legal representative in the meantime. Mr Dunlop's interests are not the only ones that I must take into account. The interests of the respondents matter, too. What is more, in this case the interests of non-parties are also relevant. There is a public interest in the expeditious determination of alleged insolvencies: Cirillo v Consolidated Press Property Pty Ltd (formerly known as Citicorp Australia Ltd) (2007) 245 ALR 374 at [51]. Mr Dunlop has already delayed in prosecuting his application for an extension of time. This is against the background of a two-year delay in challenging the sequestration order from which he now wishes to appeal. If I were to accede to his request, I would not be in a position to hear the application until early June 2012 – eight months after the application for an extension of time was filed. That is unacceptable. It would not in my view promote the overarching purpose if I were to postpone the hearing again. 30 In some circumstances, the refusal to adjourn a matter on request can amount to a denial of procedural fairness: This, however, is not one of them. Mr Dunlop has had more than an adequate opportunity to present his case. In accordance with my orders of 5 December 2011 everything he apparently wants to say is before me. In all the circumstances I am satisfied that there would be no denial of procedural fairness for this matter to proceed to hearing today — with or without his attendance. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Katzmann. Associate: Dated: 29 March 2012