Supreme Court New South Wales Medium Neutral Citation: Gabriel v Grech (No 4) [2020] NSWSC 726 Hearing dates: On the papers Decision date: 11 June 2020 Jurisdiction: Common Law Before: Adamson J Decision: (1) Refuse the second defendant's application that I recuse myself from hearing the balance of the matter. (2) Reserve the costs of the application. Catchwords: CIVIL PROCEDURE — Request for disqualification — where second defendant made application that judge should disqualify herself because of apprehended bias — whether statements made during course of hearing would lead to reasonable apprehension of bias — where first defendant did not appear at hearing of appeal — where directions made to notify first defendant of outcome of appeal Legislation Cited: Local Court Act 2007 (NSW), ss 39, 40 Cases Cited: Bainton v Rajski (1992) 29 NSWLR 539 Chamoun v District Court of New South Wales [2018] NSWCA 187 Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337; [2000] HCA 63 Gabriel v Grech (No 3) [2020] NSWSC 218 Hot Holdings Pty Ltd v Creasy (2002) 210 CLR 438; [2002] HCA 51 Re Refugee Tribunal; Ex Parte H [2001] HCA 28; 75 ALJR 982 Studer v Konig (Supreme Court (NSW), McLelland CJ at Eq, 4 June 1993, unrep) Category: Procedural and other rulings Parties: Joseph Gabriel (Plaintiff) Paul Grech (First Defendant) Drive My Car Rentals Pty Ltd (Second Defendant) Mark Gabriel (Third Defendant) Representation: Counsel: S A Baron Levi (Plaintiff) M Ashurst SC / P Barham (Second Defendant) Solicitors: William Roberts Lawyers (Plaintiff and Third Defendant) Lawandi Lawyers (First Defendant) Fraser Clancy Lawyers Pty Ltd (Second Defendant) File Number(s): 2017/273635 Judgment 1. On 2 June 2020, Drive My Car Rentals Pty Ltd, the second defendant (DMC), made a written application by email to my Associate that I disqualify myself from taking any further part in the proceedings of this matter on the ground of reasonable apprehension of bias. They have confirmed that no allegation of actual bias is made. 2. The appropriateness of this course, written communication to the judge's Associate, together with written submissions, rather than notice of motion or oral application, has been confirmed in Bainton v Rajski (1992) 29 NSWLR 539. 3. The circumstances in which the application arises can be shortly summarised. 4. Joseph Gabriel (the plaintiff) brought proceedings in the Local Court against Paul Grech claiming damages for loss suffered when a car which he alleged was owned by him was struck from the rear by a vehicle driven by Mr Grech. Mr Grech in turn cross-claimed against DMC, the company from which he had hired the vehicle. The Local Court found that Mr Grech's negligence had caused the collision and that DMC would have been liable on the cross-claim if Mr Grech had been liable to the plaintiff. However, the Local Court found that Mr Grech was not liable to the plaintiff because the plaintiff did not own the car which was struck from the rear. 5. The plaintiff appealed to this Court under ss 39 and 40 of the Local Court Act 2007 (NSW). In this Court, Mr Grech was joined as the first defendant, DMC was joined as the second defendant and Mark Gabriel, the plaintiff's son (who had been driving the car at the relevant time) was joined as the third defendant. 6. In this Court, the plaintiff and the third defendant were jointly represented. Mr Grech, who I understood to have been properly served, was represented by Mr Rollinson of counsel before the Registrar on 19 September 2017 and 6 February 2018 and before Walton J on 20 March 2018 for the hearing of DMC's notice of motion dated 5 December 2017 that the amended summons be struck out as incompetent having been filed out of time. Notwithstanding these earlier appearances, Mr Grech did not appear at the substantive hearing before me. 7. At the commencement of the hearing, I enquired as to whether Mr Grech was to appear. I was informed by Mr Baron Levi that he understood there to have been no appearance of the first defendant at any point. As referred to above, there had in fact been earlier appearances of which I was then unaware and Mr Baron Levi can also be taken to have been unaware. It was common ground that Mr Grech had been served. 8. By judgment delivered on 11 March 2020, I allowed the appeal and set aside the judgment for Mr Grech in the Local Court and entered judgment for the plaintiff: Gabriel v Grech (No 3) [2020] NSWSC 218. I reserved the question of the costs of the proceedings and the costs in the Local Court. I made directions for the parties to agree on a timetable for submissions on the cross-claim and costs. 9. The parties provided written submissions on these questions, which I reviewed. 10. On 18 May 2020, my Associate sent an email to the parties at my direction as follows: "Dear Practitioners, Justice Adamson, after considering the submissions on orders and costs which the parties have provided, is concerned about the position of the first defendant, Mr Grech, who did not file a notice of appearance. In light of the orders her Honour has made concerning the appeal by Mr Gabriel (the plaintiff), the plaintiff now has a judgment in his favour against Mr Grech. However, as there was no defensive appeal lodged in respect of the cross-claim (in the event that Mr Gabriel's appeal was allowed), Mr Grech is liable for the judgment in favour of Mr Gabriel. Mr Grech may not have appreciated that this was a consequence of his inaction, having regard to the active part played in the appeal by Drive My Car Rentals Pty Ltd. In these circumstances, her Honour has made the following orders: 1. Direct the plaintiff to notify the first defendant, Paul Grech, of the outcome of the proceedings and provide him with a copy of the judgment of Adamson J delivered on 11 March 2020. 2. Direct Mr Grech to make any application he wishes to make to extend the time within which he is to appeal against the dismissal of the cross-claim by the Local Court within 21 days of the date hereof." 1. On 1 June 2020, Mr Grech filed a notice of appearance. 2. In written submissions filed on 2 June 2020, Mr Ashurst SC and Mr Barham, who appeared for DMC, sought to have me disqualify myself on the grounds of apprehension of bias. They contended that the direction, when read with comments I made in the course of the hearing, would be such as to give rise to a reasonable apprehension of bias. They submitted that, in expressing concern for Mr Grech's situation (in the email referred to above), I had compromised the appearance of impartiality. They relied on Studer v Konig (Supreme Court (NSW), McLelland CJ at Eq, 4 June 1993, unrep). 3. DMC further submitted: "14. … [T]he Court was aware that no notice of appearance had been filed by the First Defendant however the Court made no attempt at that stage of the proceedings to ensure that the First Defendant took part in the appeal proceedings. It would seem the Court assumed (correctly) that the First Defendant had been properly served. DMC contends that this should have been the extent of the Court's concern for how the outcome of the proceedings would affect the First Defendant. That is, that the First Defendant had been properly notified of the appeal." 1. DMC also relied on various statements I made in the course of the hearing about the question whether ownership of the car had been admitted on the pleadings. 2. Rather than summarising DMC's further submissions, it is convenient to set them out verbatim. "37. DMC contends that it is a reasonable inference available to the reasonable observer that the orders made by the Court on 18 May 2020 were made for the express purpose of the Court assisting both the Plaintiff and the First Defendant by avoiding making the inevitable orders against the First Defendant (in favour of the Plaintiff) and dismissing the Plaintiff's proceedings as against DMC and making consequential costs orders in favour of DMC as a result. That is to say the Court made those orders as a means of avoiding making orders favourable to DMC. DMC submits, respectfully, that there is an apprehension that the Court has (to use the language of Mahony JA and Denning LJ) lost 'the appearance of neutrality' and "assumed the role of advocate". 38. DMC points to the following facts that support this inference: a. The Court had before 18 May 2020 taken no steps to ensure that Mr Grech was fully aware of his rights in relation to the appeal; b. The Court had previously assumed (incorrectly it is submitted) in the Plaintiff's favour that the Plaintiff had standing to appeal the decision as between the First and Second Defendants pursuant to section 22 of the Civil Procedure Act; c. The Court had previously raised arguments not identified by the Plaintiff's counsel in favour of the Plaintiffs contentions; d. The Court had previously referred to the financial benefit that the Plaintiff would obtain from being able to prosecute the First Defendant's appeal of orders between the First and Second Defendants; e. The Court had previously stated 'the matter of costs and final order[s] to be determined on the papers.' f. The court did not invite any submissions from the parties (in particular from DMC who would be directly prejudiced by the orders) before the orders of 18 May 2020 were made; g. The email that accompanied the orders of 18 May 2020 provided advice that would be of assistance to the First Defendant in any subsequent application the First Defendant may wish to make in extending time to appeal. 39. In the circumstances DMC contends that a reasonable apprehension of bias has been created. In particular there is a reasonable apprehension that the Court is: a. Taking deliberate steps so as to ensure that the First Defendant is granted an extension of time for lodging an appeal and does lodge an appeal; b. Taking deliberate steps to avoid pronouncing a judgment that would be adverse to the Plaintiff as against the Second Defendant; c. Creating a situation whereby final orders will only be made that will maximise the benefit to the Plaintiff and the First Defendant at the expense of DMC. [Footnotes omitted.]" 1. On 3 June 2020, my Associate sent an email to the parties inviting the plaintiff, if he so chose, to provide written submissions in response by close of business on 5 June 2020 and providing that DMC would have until close of business on 9 June 2020 to reply. 2. In submissions filed on 5 June 2020, the plaintiff submitted that I had a duty not to withdraw from the present matter. Mr Baron Levi contended on behalf of the plaintiff that: "45. … The inference likely to be drawn by a reasonable observer is that the step was taken for the reasons explained in the email of the Associate to her Honour of 18 May 2020 – and for the reasons which appear obvious upon the face of the orders of 18 May 2020: namely, that Mr Grech, who is a named party and affected by the outcome of the proceedings, is to be advised of the outcome to date and given an opportunity to participate in the remainder of the proceedings. … 49. It should be perfectly obvious to any reasonable observer that the Court's orders of 18 May 2020 did nothing other than ensure that an unrepresented and non-appearing party who would be affected by the outcome of the proceedings was aware of the outcome of the proceedings to date and would have an opportunity to participate in the remainder of the proceedings. In other words, the Court's conduct fell squarely within the appropriate and permissible conduct set out and referred to by McLelland CJ [in Eq in Studer v Konig]. The Court's orders of 18 May 2020 simply ensures that Mr Grech has the same knowledge of what has occurred to date and the same opportunity to be heard that each of the other parties have. It could not genuinely be suggested that the Court has now conferred upon Mr Grech a positive advantage over and above the other parties. There is no such advantage that has been identified by DMC – and no such advantage that conceivably arises. 50. DMC's real complaint is that it may now have lost the purely tactical advantage it attempted to benefit from as a result of the defendant's lack of knowledge as to what is occurring in the proceedings and lack of representation. 51. It follows inexorably from the judgment on the appeal that Mr Grech must succeed on the cross-claim. The only way DMC could even potentially avoid an order for indemnity is – quite literally – if Mr Grech fails – through ignorance of the proceedings and lack of representation – to walk through the court room door. 52. The suggestion that a single step taken in the proceedings – to ensure an unrepresented party is aware of the outcome to date and afforded an opportunity to participate – gives rise to a reasonable apprehension of bias is devoid of basis or merit." 1. On 5 June 2020 Mr Grech filed a summons seeking orders which include an extension of time to file the summons for appeal. The summons also seeks that the order made by the Court below relating to the cross-claim be set aside and, in lieu thereof, there be judgment for Mr Grech on the cross-claim against DMC. Consideration 1. The test for reasonable apprehension of bias has been authoritatively stated in Re Refugee Tribunal; Ex Parte H [2001] HCA 28; 75 ALJR 982 at [28]: "[whether] a hypothetical fair minded lay person who is properly informed as to the nature of the proceedings, the matters in issue and the conduct which is said to give rise to an apprehension of bias [would reach that conclusion]." 1. The principle, as articulated in Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337; [2000] HCA 63 at [6] (Gleeson CJ, McHugh, Gummow and Hayne JJ) is: "... a judge [or other decision-maker] is disqualified if a fair-minded lay observer might reasonably apprehend that the judge [or other decision-maker] might not bring an impartial mind to the resolution of the question the judge is required to decide." [Footnotes omitted.] 1. The hypothetical fair-minded observer is to be assumed to be aware of the actual circumstances of the case: Hot Holdings Pty Ltd v Creasy (2002) 210 CLR 438; [2002] HCA 51 at [68] and [76]. Thus the hypothetical fair-minded observer would be aware of the proceedings in the Local Court and the basis on which they were decided, the proceedings in this Court and the involvement of the various parties. Such an observer would also be aware that the expression by a judicial officer of a preliminary or tentative view, or the enunciation of a proposition which is contested, is a time-honoured way of according procedural fairness and obtaining assistance from counsel in the determination of the matters in issue: see the authorities referred to in Chamoun v District Court of New South Wales [2018] NSWCA 187 at [42]-[43] (Gleeson JA, R A Hulme and Button JJ agreeing). 2. The hypothetical fair-minded observer would also be aware that the direction I made on 18 May 2020 provided Mr Grech with an opportunity to make an application if he saw fit. Such an observer would have inferred that the purpose of the directions was to give all parties an opportunity to make submissions on the question whether, if an application is made, it ought be granted and, if so, on what terms. 3. I am not persuaded that the relevant fair-minded observer would infer from my making directions about such an application, that it would be acceded to. Indeed, the observer would cease to belong to the category of "fair-minded" were he or she to infer that I would engage in an arid process of making directions which allowed for the possibility that Mr Grech would make an application (with the associated rights to be heard which would necessarily be conferred on the other parties) if I had already decided to grant it. 4. In these circumstances, I do not propose to recuse myself from the further conduct of this matter. 5. The plaintiff sought his costs of the application by DMC that I recuse myself. DMC did not respond to this request in its submission in reply. I consider it to be more appropriate to deal with the question of the costs associated with the submissions on this matter when I hear submissions on the remaining matters in issue. Accordingly, I will reserve the question of costs. Orders 1. For the reasons set out above, I make the following orders: 1. Refuse the second defendant's application that I recuse myself from hearing the balance of the matter. 2. Reserve the costs of the application. ********** 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: 11 June 2020