New South Wales Supreme Court CITATION : Sellers v Marchant [2008] NSWSC 120 HEARING DATE(S) : 7 December 2007 JUDGMENT DATE : 26 February 2008 JUDGMENT OF : Price J at 1 DECISION : 1. Leave to appeal granted. 2. The matter be remitted back to the Chief Magistrate of New South Wales so that he might allocate it to another judicial officer of the Local Court to be heard and determined according to law. 3. Each party pay their own costs of this appeal. CATCHWORDS : Civil Procedure - disqualification - reasonable apprehension of bias - costs. LEGISLATION CITED : Local Courts Act 1982 s 74, s 74(2)(a), s 75, Suitors Fund Act 1951 s 6C CATEGORY : Principal judgment Northern NSW FM Pty Limited v Australian Broadcasting Tribunal (1990) 26 FLR 39 CASES CITED : Re J.R.L, Ex Parte C.J.L (1986) 161 CLR 342 Sellers v Marchant & Anor [2007] NSWSC 309 PARTIES : Raymond John Sellers John Marchant FILE NUMBER(S) : SC 2007/13651 COUNSEL : P Aldridge SC and D Rayment (Plaintiff) R Winfield (Defendant) SOLICITORS : Macedone Christie Willis (Plaintiff) Delwyn A Bishop (Defendant) LOWER COURT JURISDICTION : Local Court LOWER COURT JUDICIAL OFFICER : Bradd LCM LOWER COURT DATE OF DECISION : 21 June 2007 IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION PRICE J 26 February 2008 2007/13651 Raymond John Sellers v John Marchant & Anor JUDGMENT 1 His Honour: The plaintiff seeks orders under ss 74 and 75 of the Local Courts Act 1982 for leave to appeal against the orders made on 21 June 2007 by the Magistrate and the setting aside of those orders. 2 Proceedings had been commenced in the Local Court of New South Wales by the plaintiff in which he claimed that the sum of $60,000 pursuant to an agreement that the first defendant acquire his share of the business Planwise Pty Limited. The proceedings were defended and the first defendant also brought a cross-claim. It was, shortly stated, the defendant's case, that there was an agreement for the plaintiff to transfer his share in various items for the consideration of one half of the written down value of those items. The first defendant contended that the written down value was $31,500 which, by error, he had paid. 3 After a hearing lasting two days the Magistrate was not satisfied that the parties had agreed that the first defendant was to pay the plaintiff $60,000. His Honour was satisfied that the first defendant had paid $31,500 by mistake. Judgment was entered for the defendants on the plaintiff's claim and on the cross-claim for the cross-claimant against the cross-defendant in the amount of $15,750.00. 4 The plaintiff then brought proceedings in this Court. In Sellers v Marchant & Anor [2007] NSWSC 309, Associate Justice Malpass determined that the Magistrate had misdirected himself as to the issues and the evidence and had failed to give sufficient reasons. The Associate Justice said: at [17]-[25] "17 Accordingly, the Magistrate had before him pleadings which threw up competing issues involving oral agreement. 18 Both the plaintiff and the defendant tendered affidavit evidence. This material contained competing versions of the disputed oral agreement. Both parties were cross-examined. The plaintiff also tendered certain electronic communications (referred to in the judgment by the Magistrate as emails). 19 In addressing the evidence, the Magistrate directed his concentration to the emails. Largely, there was little reference to the oral evidence. 20 The conclusions reached by him (which are set forth in paragraphs 12-15) give the impression that they were founded on the contents of the emails. If that be the case, he has misdirected himself as to both the issues and the evidence. 21 The issues required him to analyse the contents of the affidavits and the oral evidence, in the light of the emails, and make findings concerning the conflicting material that was before him. The fact-finding process involved assessments of reliability and credibility concerning the evidence given by the plaintiff and the defendant. If the Magistrate did perform such a fact-finding process, the judgment does not sufficiently set out his reasoning process and his findings. 22 Leaving those matters aside, there are other areas of insufficient disclosure (including how he came to be satisfied that the payment of $31,500 was made by mistake). 23 There is no dispute that an insufficient disclosure of reasoning process constitutes error in point of law. This requirement of disclosure is intended to serve a number of purposes (inter alia, to facilitate the appellate process and to enable the losing party to understand the reason for lack of success). Authority makes it clear that what will suffice may vary from case to case. Each case has to be looked at having regard to its own particular circumstances. 24 In my view, the Magistrate has fallen short of sufficiently disclosing his reasoning process in this particular case. 25 The plaintiff bears the onus of satisfying the Court that there is error in point of law that justifies the disturbing of the decision of the Magistrate. In my view, the onus has bee discharged in this case." 5 As error in point of law had been found, the decisions of the Magistrate were set aside and the matter was "remitted back to the Local Court for determination according to law": Sellers at [27]. 6 When the proceedings were remitted back to the Local Court, they were on 21 June 2007 placed before his Honour. Counsel for the plaintiff applied to have the proceedings listed before another Magistrate and for the Magistrate to disqualify himself which he refused. The plaintiff seeks leave to appeal against the rejection of these applications by the Magistrate. 7 The defendants neither oppose nor consent to the orders sought by the plaintiff and will submit to any order of the Court save as to costs. 8 It is well established that a judicial officer should not recuse without adequate cause. The principle to be applied was enunciated by Mason J in Re J.R.L, Ex Parte C.J.L (1986) 161 CLR 342 at 351: "The problem is governed by the principle that a judge should disqualify himself from hearing, or continuing to hear, the matter if the parties or the public entertain a reasonable apprehension that he might not bring an impartial and unprejudiced mind to the resolution of the issues: Reg. v Watson; Ex parte Armstrong (1976) 136 CLR 248 at pp 258-263; Livesey v NSW Bar Association (1983) 151 CLR 288, at pp 293-294. This principle, which has evolved from the fundamental rule of natural justice that a judicial officer should be free from bias, reflects a concern with the need to maintain public confidence in the administration of justice. This concern is expressed in the cognate principle that, not only must justice be done, it must be seen to be done. 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 (1983) 151 CLR 288 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 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': Reg. v Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group (1969) 122 CLR 546, at pp 553-554; Watson (1976) 136 CLR at p 262; Re Lusink ; Ex parte Shaw (1980) 55 ALJR 12 at p 14;…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." 9 It might be that his Honour had this principle in mind when he rejected the plaintiff's application. Furthermore, the transfer of the proceedings to a different Magistrate would involve a full rehearing, with the costs and delays associated with that course of action, subject to any agreement between the parties as to the use of evidence previously given. The savings in time and costs if the proceedings continued before his Honour are obvious. 10 Regrettably, his Honour neither allowed the plaintiff's argument to develop nor were reasons given for his refusal. When the application was made, the following exchange took place: "Bench: Thank you. Alright, well how would you like to go about this? Rayment: I'm not sure how it has come to be before your Honour. It may be that its best the best way to proceed is. Bench: Do you just want to make new submissions on the points that you want to raise on the question of the old, it is the old matters isn't it? Rayment: Your Honour it is our position that it should be remitted to a new magistrate. Your Honour has expressed a view on the matter. Bench: I can't be. Rayment: You disagree? Bench: No that's not true. Rayment: As I was saying, the parties agree that Your Honour can't deal with this matter any further. Bench: I can't? Well. I just completely disagree with that. The Supreme Court has decided that I should give additional reasons and I'll do that… Rayment: I don't believe that's… Bench: and once you've made those submissions I'll do that. Rayment: Your Honour, it's not the Supreme Court's direction that you produce additional reasons. Bench: What is what is it then? Rayment: It remitted the matter to the Local Court. Bench: Right. Rayment: Which means that it's before that Chief Magistrate. Bench: I don't agree with that. Rayment: And the Chief Magistrate allocates a new Magistrate is the ordinary… Bench: I disagree. Rayment: Your Honour, it is as I understand it the position of both parties that it has to be put before a new Magistrate and that Your Honour has expressed a view in Your Honour's judgment which makes it liable to a reasonable apprehension of bias. (Untranscribable) I am not suggesting that there is bias. Bench: I completely disagree with you. Rayment: May it please the Court." 11 The plaintiff contends that the need for the proceedings to be heard by another judicial officer becomes apparent when what was said by the Magistrate is considered. His Honour thought, the plaintiff says, that all he had to do was to give some further reasons for the decision that had already been given. In the eyes of a disinterested bystander, the plaintiff argues, a further hearing before the same Magistrate would be considered to be worthless. Authorities were cited for the general principle that when decisions in judicial proceedings are set aside and the matter is remitted to the lower court, justice is better seen to be done if the court is reconstituted for the purpose of the rehearing. 12 In Northern NSW FM Pty Limited v Australian Broadcasting Tribunal (1990) 26 FLR 39 at 42 Davies and Foster JJ said: "If a decision has been set aside for error and remitted for rehearing, it will generally seem fairer to the parties that the matter be heard and decided again by a differently constituted tribunal. This is because the member constituting the Tribunal in the original inquiry or hearing will already have expressed a view upon facts which will have to be determined in the rehearing. The aggrieved party may think that a rehearing before the Tribunal as originally constituted could be worthless, for the member's views have been stated. Thus, if a decision of the Administrative Appeals Tribunal has been set aside and the matter remitted for rehearing, the President of that Tribunal ordinarily allocates to the rehearing a different member of the Tribunal. There are, of course, cases where it is convenient for the Tribunal as previously constituted to deal with the matter. And occasionally the Court expresses such a view, so as to make clear that it would not be improper for the Tribunal as previously constituted to consider the matter again." 13 In the present case, it is evident, with respect, that his Honour incorrectly understood that the decision of Associate Justice Malpass required him to give reasons for the judgments which had been given. The judgments, however, had been set aside in their entirety which required the proceedings to be re-determined. Moreover, as his Honour's reasons were inadequate, it is impossible to determine how his assessment of the honesty and reliability of the witnesses had impacted upon the ultimate decisions which he made. 14 It seems to me that this is a case where, if the proceedings continued before his Honour and the judgments remained the same, it would be very difficult to persuade a reasonable person in the shoes of the aggrieved plaintiff that justice had been done. A reasonable apprehension of bias by reason of prejudgment in my opinion has been firmly established. A error of law has been identified. The proceedings are to be remitted to another Magistrate for hearing. 15 The plaintiff seeks an order that the defendants pay the costs of the appeal. The principle contention is that a plaintiff is entitled to costs unless the defendant either consents or files a submitting appearance or there is some discretionary reason why costs should not be awarded. The plaintiff submits that the proceedings could have been dealt with by a consent order in this Court. The defendants submit that the plaintiff's application as to costs is misconceived. The defendants, it is argued, have consistently neither opposed nor consented save as to costs, to the orders sought by the plaintiff. The defendants contend that it is for the moving party to satisfy the Court that it is appropriate to grant leave to appeal and their consent is irrelevant. 16 Although there is controversy concerning the enunciation by the plaintiff's counsel before the Magistrate that "the parties agree that Your Honour can't deal with this matter any further", it is plain that the defendants did not oppose the application. In any event, the announcement of such an agreement had no impact upon his Honour nor should it have done. Whether a judicial officer should recuse himself is not a matter for agreement between the parties. It is a discretion to be exercised by the judicial officer in accordance with well established principles. 17 The decisions of his Honour are interlocutory judgments within the meaning of s 74(2)(a) of the Local Courts Act and leave to appeal to this Court is required. This is not a matter which could be determined by consent orders. It is not surprising given the disagreement between counsel and the correspondence between the respective solicitors that the defendants would wish to be represented upon the appeal so as to be heard on the question of costs. The defendants did nothing to cause the appeal nor did they oppose the application for leave. I am not persuaded that they should pay the plaintiff's costs. Orders 18 I make the following orders: (i) That leave to appeal be granted. (ii) That the matter be remitted back to the Chief Magistrate of New South Wales so that he might allocate it to a judicial officer of the Local Court other than Bradd LCM to be heard and determined according to law. (iii) That each party pay their own costs of this appeal. 19 The plaintiff has succeeded against the decisions of the Magistrate on a question of law. As the applicant to the appeal, the plaintiff, it appears, is not entitled to payment from the Suitors Fund under ss 6, 6A or 6B of the Suitors Fund Act 1951. I would, however, recommend to the Director-General of the Attorney General's Department that a payment be made towards the plaintiff's costs under s 6C of the Suitors Fund Act. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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