AUSTRALIAN COMPETITION TRIBUNAL Seven Network Limited (No 1) [2004] ACompT 5 PRACTICE AND PROCEDURE – application for disqualification of Tribunal member – apprehended bias – whether Tribunal member should decide application – whether matter for whole Tribunal – principles of reasonable apprehension of bias. Trade Practices Act 1974 (Cth): ss 37, 42(1) Bainton v Rajski (1992) 29 NSWLR 539 referred to Barton v Walker [1979] 2 NSWLR 740 referred to Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 considered Quigley v Legal Practitioners Complaints Committee [2003] WASCA 228 considered R v Bow Street Metropolitan Magistrate; Ex parte Pinochet Ugarte (No 2) [2000] 1 AC 119 considered Livesey v New South Wales Bar Association (1983) 151 CLR 288 referred to Johnson v Johnson (2000) 201 CLR 488 referred to Webb v R (1994) 181 CLR 41 referred to Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 referred to JRL Re: Ex parte CJL (1986) 161 CLR 342 referred to File No 10 of 2003 RE: APPLICATION FOR REVIEW OF THE DECISION OF THE AUSTRALIAN COMPETITION AND CONSUMER COMMISSION MADE ON 12 DECEMBER 2003 ON THE SECTION 152ATA DIGITAL PAY TV ANTICIPATORY INDIVIDUAL EXEMPTION APPLICATIONS LODGED BY TELSTRA CORPORATION AND TELSTRA MULTIMEDIA BY: SEVEN NETWORK LIMITED (ACN 052 816 789) and C7 PTY LIMITED (ACN 082 901 442) File No 11 of 2003 RE: APPLICATION FOR REVIEW OF THE DECISION OF THE AUSTRALIAN COMPETITION AND CONSUMER COMMISSION MADE ON 12 DECEMBER 2003 ON THE SECTION 152ATA DIGITAL PAY TV ANTICIPATORY INDIVIDUAL EXEMPTION APPLICATION LODGED BY FOXTEL MANAGEMENT PTY LIMITED (FOR AND ON BEHALF OF THE FOXTEL PARTNERSHIP AND FOXTEL CABLE TELEVISION) BY: SEVEN NETWORK LIMITED (ACN 052 816 789) and C7 PTY LIMITED (ACN 082 901 442) GOLDBERG J (President) 15 APRIL 2004 MELBOURNE IN THE AUSTRALIAN COMPETITION TRIBUNAL File No 10 of 2003 RE: APPLICATION FOR REVIEW OF THE DECISION OF THE AUSTRALIAN COMPETITION AND CONSUMER COMMISSION MADE ON 12 DECEMBER 2003 ON THE SECTION 152ATA DIGITAL PAY TV ANTICIPATORY INDIVIDUAL EXEMPTION APPLICATIONS LODGED BY TELSTRA CORPORATION AND TELSTRA MULTIMEDIA BY: SEVEN NETWORK LIMITED (ACN 052 816 789) First Applicant C7 PTY LIMITED (ACN 082 901 442) Second Applicant File No 11 of 2003 RE: APPLICATION FOR REVIEW OF THE DECISION OF THE AUSTRALIAN COMPETITION AND CONSUMER COMMISSION MADE ON 12 DECEMBER 2003 ON THE SECTION 152ATA DIGITAL PAY TV ANTICIPATORY INDIVIDUAL EXEMPTION APPLICATION LODGED BY FOXTEL MANAGEMENT PTY LIMITED (FOR AND ON BEHALF OF THE FOXTEL PARTNERSHIP AND FOXTEL CABLE TELEVISION) BY: SEVEN NETWORK LIMITED (ACN 052 816 789) First Applicant C7 PTY LIMITED (ACN 082 901 442) Second Applicant THE TRIBUNAL: JUSTICE GOLDBERG (President) DATE: 15 APRIL 2004 PLACE: MELBOURNE RULING Introduction 1 On 23 February 2004, the applicants, Seven Network Limited and C7 Pty Limited, made an application to the Tribunal that Mr Rodney Shogren should not be a member of the Division of the Tribunal constituted to hear and determine these reviews on the basis that he was the presiding Commissioner in the arbitration proceedings before the Australian Competition and Consumer Commission ("the Commission") pursuant to Pt XIC of the Trade Practices Act 1974 (Cth) ("the Act") regarding C7 Pty Limited's access to analogue pay TV carriage services. It was said that a number of the issues and expert reports before the Tribunal in these reviews were previously raised and considered by the Commission in the context of the Pt XIC analogue access arbitrations. 2 Material was filed in support of the application as were written submissions. The applicants submitted that Mr Shogren alone should determine whether he should continue to sit as a member of the Tribunal. 3 Section 42(1) of the Act provides: "A question of law arising in a matter before a Division of the Tribunal (including the question whether a particular question is one of law) shall be determined in accordance with the opinion of the presidential member presiding." 4 I consider that the issue of the composition of the Division of the Tribunal to hear and determine the applicants' application is a question of law to be decided by the presidential member. Composition of the Division of the Tribunal 5 The hearing of the application proceeded on the basis that it was appropriate for the Division of the Tribunal to sit as constituted to hear the application, but that it was Mr Shogren who would decide the matter of his participation and give reasons for his decision. The applicants agreed with the Tribunal's approach in this regard, saying that it was for the member in question to make a decision on the application and that it was not a matter which was a matter of law to be decided by the presidential member of the Tribunal, or a matter for the Division of the Tribunal as a whole or a majority of it. FOXTEL Management Pty Limited and FOXTEL Cable Television Pty Ltd ("Foxtel") did not dissent from, or challenge, this approach in the course of their oral submissions. 6 At the end of oral submissions after I announced again that Mr Shogren would decide the matter, counsel for Foxtel expressed a concern that Mr Shogren's determination of the issue alone may not be entirely consistent with s 37 of the Act which states: "The Tribunal shall, for the purpose of hearing and determining proceedings, be constituted by a Division of the Tribunal consisting of a presidential member of the Tribunal and two members of the Tribunal who are not presidential members." 7 When clarification of the submission was sought, counsel for Foxtel stopped short of submitting affirmatively that the three members of the Tribunal should determine the matter of Mr Shogren's participation. Rather, counsel said that "it would certainly be preferable" that the whole of the Tribunal resolved the matter, rather than there be a possibility that the decision be invalid for failure to comply with s 37 of the Act. 8 For the reasons to which I shall refer I consider that it is for Mr Shogren alone to determine whether he should not sit as a member of the Division of the Tribunal constituted to hear these reviews, but that he should apply the legal principles referred to in this ruling. 9 Section 37 of the Act specifies the manner in which the Tribunal is to be constituted for the purpose of hearing substantive applications filed in the Tribunal. It does not require the three members to hear every procedural matter brought before it. For example s 103(2) of the Act enables the presidential member of a constituted Division of the Tribunal to resolve procedural issues which may arise. Section 37 does not contemplate a situation where one member is asked to disqualify himself or herself from sitting on a matter and it is therefore necessary to seek guidance and direction from the decided cases. The authorities make it clear that it is for the person sought to be disqualified to determine his or her participation. It is implicit, if not explicit, in the cases to which I shall refer, that where an application is made before a multi-person court or tribunal for one of its number to be disqualified from participating in the hearing, it is for that member alone and not for the other members of the court or tribunal to determine whether he or she should disqualify himself or herself from participating in the hearing. The reasoning in the authorities is predicated on the proposition that, like s 37 of the Act, jurisdiction is given to courts and tribunals to hear matters as a multi-person court or tribunal, but that the court or tribunal as a whole does not make any decisions on the disqualification of one of its members for apprehended bias. That decision-making function is committed to that member alone. 10 In Bainton v Rajski (1992) 29 NSWLR 539 Mahoney JA and Cripps JA, in the Court of Appeal of New South Wales, gave reasons for refusing the respondent's objection to their Honours sitting to determine the application in the proceeding on grounds of bias. No allegation of bias was made against Priestley JA, who was the other member of the Court of Appeal constituted to determine the proceeding. Accordingly, he did not make a decision or give reasons in relation to the allegations of bias made against the other judges. Mahoney JA and Cripps JA followed the decision of the Court of Appeal of New South Wales in Barton v Walker [1979] 2 NSWLR 740 where the Court considered the procedure to be followed by a judge faced with the question of whether or not he or she should hear and determine a proceeding. 11 Mahoney JA referred, with approval, to the judgment of Samuels JA, with whom Reynolds JA and Glass JA agreed. Mahoney JA said at 544: "Samuels JA, in a judgment with which the other members of the court agreed, referred to the 'informal practice which requires the individual judge to determine his own disqualification' (at 749D); which, in the experience of the court 'is seen to work well' (ibid). His Honour held that 'a motion to disqualify a judge of the Supreme Court is not cognizable' (at 750B). He said that 'the proposition that one judge of this Court has authority to declare that another is disqualified from sitting in a particular proceedings seems to me, if I may say so, quite absurd' (at 756A). Barton v Walker establishes two things: that it is, in principle, for the judge in question to determine whether he should hear a particular proceeding; and that that decision may be made without formalities such as a motion for his disqualification, the hearing of evidence, or the like." 12 In Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 Callinan J noted at 397 that the decision as to whether the facts established the relevant apprehension of bias had "conventionally been made by the judge in respect of whom the claim is advanced." However, he expressed the opinion that, provided there was no legal inhibition and it were convenient, it would be preferable that such a decision be made by another judge. However, Gleeson CJ, McHugh, Gummow and Hayne JJ were unable to agree with his Honour's view, saying at 361: "We note that Callinan J, in relation to the third matter referred to in his reasons for judgment, has expressed the view that it would be preferable in future for challenges of apprehended bias to be determined, where possible, by a judge other than the one who has been asked to disqualify himself or herself. With respect, we are unable to agree. On that approach, for example, some other judge of the Federal Court would have considered the challenge made to Goldberg J in Ebner. Adopting such a procedure would require examination of the power of that other judge to determine the question and the way in which that other judge's conclusion would find its expression. In particular, is the question of possible disqualification to be treated as an issue in controversy between the parties to the proceeding and is it to be resolved by some form of order? The issue is not one which was argued in the present appeals, and it is sufficient to say that, in our view, Goldberg J adopted what was both the ordinary, and the correct, practice in deciding the matter himself." 13 In Quigley v Legal Practitioners Complaints Committee [2003] WASCA 228, the Full Court of the Supreme Court of Western Australia considered the issue whether a member of a tribunal against whom allegations of perceived bias were made should make the decision whether he or she should be disqualified, or whether it should be made by the other members of the tribunal. The issue was raised in the context of an appeal from a decision of the Legal Practitioners Disciplinary Tribunal, constituted by four members. Amongst other grounds, the appellants contended that a member of the tribunal erred in law in failing to disqualify himself on the ground of reasonable apprehension of bias, and further that the other members of the tribunal should have heard and determined this issue. Parker J, with whom Malcolm CJ and Anderson J agreed, decided that the tribunal member had not erred in his approach to the issue of perceived bias and that he was correct in deciding not to disqualify himself. Further, after referring to the views expressed by Callinan J and Gleeson CJ, McHugh, Gummow and Hayne JJ in Ebner v Official Trustee in Bankruptcy (supra), Parker J found (at [100]) that the "procedure followed in this case was in accordance with what has been the accepted and ordinary practice as recognised in the Ebner decision at 361". Parker J concluded that there was no error made by this issue being decided by the Tribunal member. 14 In a subsequent written submission, counsel for Foxtel noted that the decision in Bainton v Rajski (supra) suggested that the practice in New South Wales was that where an application is made that a judge or judges of the NSW Court of Appeal should not sit on a matter on the ground of apprehended bias, it is for the judge or judges concerned to decide the matter. However, counsel contended that the view that this question is one for the Tribunal as a whole finds inferential support in R v Bow Street Metropolitan Magistrate; Ex parte Pinochet Ugarte (No 2) [2000] 1 AC 119. The House of Lords was called on to consider a petition to set aside the decision of the House of Lords in R v Bow Street Metropolitan Magistrate; Ex parte Pinochet Ugarte (No 1) [2000] 1 AC 61 on the ground of the apparent bias of Lord Hoffman, one of the Law Lords who participated in that case. Subsequent to the handing down of judgment, it emerged that Lord Hoffman was a director and chairperson of Amnesty International Charity Ltd, an organisation closely linked with Amnesty International Ltd, which was an intervening party in the proceeding. Lord Hoffman did not sit on the hearing of the application in relation to apprehension of bias. The House of Lords was reconstituted to determine the claim. 15 Foxtel contended that it was possible to infer from the speeches of the members of the House of Lords that had the question of Lord Hoffman's position been raised before the House of Lords in the proceeding and had Lord Hoffman decided he could sit on the appeal, the remaining Law Lords would have decided that there was a reasonable apprehension of bias and required him to excuse himself. I am unable to see how this inference can be drawn from the reasoning. The members of the House of Lords did not allude to these matters in their reasons. The petition was made subsequent to the handing down of judgment, therefore the question of Lord Hoffman making the decision as to whether he should be disqualified was not considered. Rather, the decision appears to stand for the proposition that where an earlier order of the House of Lords has been found to cause injustice or to subject a party to an unfair procedure, that order can be rescinded or varied. 16 Further, the House of Lords found that the principle that a judge must not be a judge in his or her cause was not limited to automatic disqualification on the grounds of pecuniary interest, but extended to include the non-pecuniary interest of Lord Hoffman in the promotion of the same cause in the same organisation as a party to the proceeding. Lord Hoffman was found to be judge in his own cause in that he had a relevant non-pecuniary interest in the subject matter (equivalent to pecuniary or proprietary interests) which gave rise to automatic disqualification. Accordingly, the order in the proceeding was set aside and a rehearing ordered. 17 Counsel for Foxtel also asserted that a decision of a tribunal is void where the tribunal fails to accord procedural fairness. It was submitted that the question whether an individual member of a multi-person tribunal should be disqualified by reason of apprehended bias is an issue of concern for the whole tribunal as it is a question which affects the jurisdiction of the tribunal as a whole. Counsel referred to Forbes v NSW Trotting Club (1979) 143 CLR 242 and Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 as authority for the proposition that if a tribunal does not accord procedural fairness, its decision is void, but counsel did not refer to any authority which supported the contention that what followed from this proposition was that a multi-person court or tribunal should decide whether one of its members should be disqualified on the ground of a reasonable apprehension of bias. I am unable to find any authority for such a contention. Rather, the authorities suggest to the contrary, namely that the usual procedure in tribunal matters is the same as the procedure followed in the courts; that is, the member against whom the claim is made decides the matter: Quigley v Legal Practitioners Complaints Committee (supra). 18 Counsel for Foxtel submitted further that a multi-member tribunal had jurisdiction to determine questions of procedural fairness. Counsel relied on Stollery v Greyhound Racing Control Board (1973) 128 CLR 509 for the proposition that a decision of a tribunal can be invalidated by the presence, during the deliberations and decisions of the tribunal, of a member of the tribunal who has an interest in the proceeding, but who does not adjudicate on the proceeding. Counsel referred to R v Sussex Justices; ex parte McCarthy [1924] 1 KB 256 for a similar proposition. Counsel concluded that in those circumstances a tribunal exercises jurisdiction to regulate it's own proceedings to ensure that they are not affected by a reasonable apprehension of bias. Accordingly, there seemed no logical reason why a tribunal should not exercise jurisdiction to determine the question whether a sitting member should be disqualified for reasonable apprehension of bias. The short answer to that submission is that the weight of authority (referred to above) leaves the determination of that question to the particular member challenged. Test for reasonable apprehension of bias 19 A second question of law raised by this application, which is to be determined by the presidential member in accordance with s 42(1) of the Act relates to the principles for determining whether a decision-maker should disqualify himself or herself from a proceeding by reason of there being a reasonable apprehension of bias on the part of the decision‑maker. The principles were discussed by the High Court in Livesey v New South Wales Bar Association (1983) 151 CLR 288 at 293-294. Those principles have been subsequently applied by the High Court in later cases and were recently restated and applied in Johnson v Johnson (2000) 201 CLR 488. Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ said at 492: "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 (which, in the present case, was said to take the form of prejudgment) 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." See also Webb v R (1994) 181 CLR 41; Kartinyeri v Commonwealth of Australia (1998) 156 ALR 300; Ebner v Official Trustee in Bankruptcy (supra). 20 The same test applies in relation to tribunal members: Laws v Australian Broadcasting Tribunal (supra); Quigley v Legal Practitioners Complaints Committee (supra). 21 The principle behind the test is the fundamental importance that justice should not only be done, but should be seen to be done: Johnson v Johnson (supra) at 492‑493; Webb v R (supra) at 47, 50; JRL Re: Ex parte CJL (1986) 161 CLR 342 at 351‑352. 22 The extent of knowledge with which the observer must be attributed has been variously outlined in the authorities. Deane J in Webb v R (supra) at 67‑68 attributed the fair‑minded lay observer with knowledge of the "material objective facts". In Laws v Australian Broadcasting Tribunal (supra), Mason CJ and Brennan J said at 87: "In assessing what the hypothetical reaction of a fair‑minded observer would be, we must attribute to him or her knowledge of the actual circumstances of the case." In that same case Gaudron and McHugh JJ said at 100: "A reasonable bystander does not entertain a reasonable fear that a decision-maker will bring an unfair or prejudiced mind to an inquiry merely because he has formed a conclusion about an issue involved in the inquiry: [cases omitted] When suspected prejudgment of an issue is relied upon to ground the disqualification of a decision‑maker, what must be firmly established is a reasonable fear that the decision‑maker's mind is so prejudiced in favour of a conclusion already formed that he or she will not alter that conclusion irrespective of the evidence or arguments presented to him or her." 23 The attributes of the fair‑minded observer have also been considered in several cases. In Johnson v Johnson (supra) Kirby J said at 508: "The attributes of the fictitious bystander to whom courts defer have therefore been variously stated. Such a person is not a lawyer. Yet neither is he or she a person wholly uninformed and uninstructed about the law in general or the issue to be decided. Being reasonable and fair-minded, the bystander, before making a decision important to the parties and the community, would ordinarily be taken to have sought to be informed on at least the most basic considerations relevant to arriving at a conclusion founded on a fair understanding of all the relevant circumstances. …The fictitious bystander will also be aware of the strong professional pressures on adjudicators (reinforced by the facilities of appeal and review) to uphold traditions of integrity and impartiality." 24 It is clear that a decision-maker must not accede too readily to suggestions of prejudgment or apprehended bias. In Livesey v New South Wales Bar Association (supra), the High Court said at 294: "…it 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 so to do 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 to whom the hearing of the case had been entrusted by the ordinary procedures and practice of the particular court." 25 Mason J in Re JRL; Ex parte CJL (supra) said at 352: "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 that 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'." 26 I consider that the principles set out above are the relevant principles to be considered by Mr Shogren in determining whether he should not continue as a member of the Division of the Tribunal constituted to hear these proceedings. The existence of apprehended bias is, for the reasons set out above, a matter for Mr Shogren and he should decide the applicants' application concerning his participation in this proceeding. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Ruling herein of Justice Goldberg (President). Associate: Dated: 15 April 2004 Counsel for the applicants: Mr BW Walker SC with Mr JRJ Lockhart Solicitors for the applicants: Freehills Counsel for FOXTEL Management Pty Limited and FOXTEL Cable Television Pty Limited: Mr NJ O'Bryan SC with Mr MH O'Bryan Solicitors for FOXTEL Management Pty Limited and FOXTEL Cable Television Pty Limited: Allens Arthur Robinson Counsel for the Australian Competition and Consumer Commission: Ms MAC Painter Solicitor for the Australian Competition and Consumer Commission: Australian Competition and Consumer Commission Date of Hearing: 8 March 2004 Date of Submissions: 15 March 2004 Date of Ruling: 15 April 2004