Supreme Court New South Wales Medium Neutral Citation: Mohammed v An; Wais v Autian Taxi Service Pty Ltd; Ma v Top Taxi Management Pty Ltd; Boateng v Top Taxi Management Pty Ltd [2013] NSWSC 80 Hearing dates: 6 February 2013 Decision date: 06 February 2013 Jurisdiction: Common Law Before: Beech-Jones J Decision: Proceedings transferred to Supreme Court. Catchwords: PROCEDURE - transfer of proceedings from Local Court to Supreme Court - where applicant alleges fraud. COURTS AND JUDGES - judges - disqualification for bias - tests for reasonable apprehension of bias - no prejudgment demonstrated - application refused. Legislation Cited: - Civil Procedure Act 2005, s 140(1) Cases Cited: - Auscity Enterprises Pty Ltd v Kismet Ventures Pty Ltd, unreported, 10 April 2012 - The Queen v The Commonwealth Conciliation and Arbitration Commission; Ex Parte the Angliss Group [1969] HCA 10; 122 CLR 546 - The Queen v Watson (1976); Ex parte Armstrong [1976] HCA 39; 136 CLR 248 - Re Lusink; Ex parte Shaw (1980) 55 ALJR 12 - Re JAL; Ex parte CSL [1986] HCA 39; 161 CLR 342 Category: Interlocutory applications Parties: 2012/00281677: Shujauddin Ismail Mohammed (Plaintiff) Feng Feng An (First Defendant) 2012/00294422: Ali Ahmed Ogk Wais (Plaintiff) Autian Taxi Service Pty Ltd (First Defendant) 2012/00294684: Jian Ma (Plaintiff) Top Taxi Management Pty Ltd (First Defendant) 2012/00294693 Anthony Agyenim Boateng (Plaintiff) Top Taxi Management Pty Ltd (First Defendant) Representation: Counsel: Mr David Lloyd (Plaintiffs) Mr George Minas, sol (Defendants) Mr Patrick Reynolds (Mr Q Feng) Solicitors: Riley, Gray-Spencer Lawyers (Plaintiffs) Minas & Associates (Defendants) File Number(s): 2012/00281677 2012/00294422 2012/00294684 2012/00294693 EX TEMPORE Judgment 1Before me are four applications to transfer proceedings that are currently pending in the Local Court to this Court. Each of the four proceedings involves a claim by an owner of a taxi vehicle for the cost of repairs, investigation and demurrage arising out of a motor vehicle collision with another vehicle. The amounts claimed are relatively modest and vary between $5,000.00 and approximately $13,000.00. 2In short, the basis for the application by the defendants in the Local Court proceedings for the transfer of the proceedings to this Court is that in the pleadings that they proposed to file, it will be alleged that the amounts claimed involve a significant element of fraud. In particular it will be alleged that they were fraudulently bolstered by the inclusion of repairs that were not related to the subject accident and by the claiming of amounts for repairs that were not undertaken. 3On 10 April 2002, I heard and determined a similar application to transfer proceedings from the Local Court to this Court (Auscity Enterprises Pty Ltd v Kismet Ventures Pty Ltd, unreported, 10 April 2012). With some reluctance, I allowed the application on the basis that the material then before me indicated that a firm of smash repairers was marketing itself as providing smash and mechanical repairs for taxis. A brochure that was tendered on that application, and which was again tendered on this application, indicates that the firm is offering a service to taxis whereby in the case of accidents where the taxi driver is not at fault, the firm of smash repairers will immediately pay cash compensation and repair the vehicle for free. It is suggested that the firm will then assume the conduct of recovery proceedings on behalf of the taxi driver. 4In Auscity, I noted that the solicitors for the moving party in that case had prepared a pleading alleging fraud and appeared to have material to justify such a serious allegation. In light of the nature of that allegation, the fact that this Court is used to dealing with complicated issues arising out of the allegations of fraud in a civil context and the suggestion that what was alleged to be occurring in that case was being conducted on a systemic basis, I ordered the transfer of the proceedings. I stated that I had some reluctance in doing so given the small amount in dispute. In the judgment in Auscity at [9], I stated that: "In my view, the case for the transfer would be that much stronger if the matter moved from beyond there being the potential for there to be other proceedings to there in fact being other proceedings which raised the same or similar issues involving the same or similar parties. If that were the case, then the overall objectives of s 56 of the Civil Procedure Act 2005 could more easily be seen to be satisfied." 5As I will explain, these proceedings involve the same or similar issues and the same or similar parties. Disqualification Application 6When these applications were called, the solicitor for the defendants to the applications, that is the plaintiffs in the Local Court proceedings, Mr Minas submitted that I should disqualify myself on the basis of apprehended bias. He submitted that I had in effect prejudged the matter by reason of my decision in Auscity . He relied on the paragraph extracted above referring to the potential for other cases. I announced that I refused the application and indicated that I would give reasons in my substantive judgment. I now do so. 7It is important to note that in the Auscity decision, the only matter that was decided was that the matter was suitable to be transferred to this Court. No finding of fact was made nor was any conclusion of law reached. 8In Re JRL; Ex Parte CJL [1986] HCA 39;161 CLR 342 at 352, Mason J stated: "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 authorities, or that his previous decisions provide an acceptable basis for inferring 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 Arbitrations Commission; Ex Parte Angliss Group (1969) 122 CLR 546, at pp 553 and 554; Watson (1976) 136 CLR 248 at 262; and Re Lusink; Ex parte Shaw, (1980) 55 ALJR 12 at p 14." 9I can well accept that one might perceive from my decision in Auscity that I would decide these applications in a particular way. However, that is not the form of prejudgment involved in an allegation of apprehension of bias. The relevant question is whether it is established to the relevant standard that I might not decide the applications before me impartially or that I will simply not be prepared to be persuaded to the contrary. Nothing in Mr Minas' submissions establishes that. Transfer application 10Each of the four applications for transfer was supported by an affidavit of the moving parties' (the defendants in the Local Court) solicitor, James Bernard Riley. Mr Riley is a principal of the firm Riley, Gray-Spencer Lawyers. He states that he has been conducting insurance litigation since 1987. He confirms that he is acting on the instruction of Zurich Financial Services Pty Ltd ("Zurich"). Presumably Zurich is the insurer of the driver of the vehicle said to be at fault in the accident. 11In each of his affidavits, Mr Riley explains that the work undertaken to investigate whether there was any possible fraud of the kind I have referred to in relation to those claims. He states that in each case a repairer's report was completed which involved a physical inspection of the repairs, a consideration of some photographs of the relevant vehicle at various times and a review of the estimate and tax invoice said to support the claims of the relevant plaintiff in the Local Court. 12The reports of the investigator were tendered before me over objection. On their face they provide some factual support for the proposition that the repairs may have been inflated in the manner that I have described. 13Annexed to each of Mr Riley's affidavit is a proposed amended notice of grounds of defence and a proposed cross-claim. The proposed cross-claim names as the proposed cross-defendant persons said to have undertaken their repairs. They have not been heard on any application for leave to issue the cross-claims and I will not mention their position further. The proposed defences take issue with aspects of the claim for negligence, include a non-admission that any loss has been suffered and positively assert that the amounts claimed for repairs were excessive. The defences also plead, by way of set off, that the relevant invoice supporting the repairs was false, to the knowledge of the relevant plaintiffs in the Local Court and claim various set-offs against the plaintiffs' claims. 14Each of the proposed pleadings in the proceedings raises a common issue of fraud identifying the same primary fraudster. As I have said, the flier that has been tendered provides support for the allegation that this alleged fraud was conducted on a systemic basis. 15Mr Minas opposed the application for transfer. A number of matters were pointed to. First, he submitted that there was an inadequate factual foundation for the allegation of fraudulent activity. I wish to make it clear that I am not making any findings as to whether any such activity occurred but it suffices to state that the reports appear to me to provide a proper basis for the allegation to be raised. 16Second, Mr Minas submitted that the Local Court and, in particular, the Small Claims Division is capable of dealing with claims of inflated repairs. He points to a procedure it has which involves the use of a single expert report in a cost efficient manner. I have no doubt that the Small Claims Division has considerable expertise and tailored provisions for dealing with the multitude of cases before it, many of which no doubt involve an assertion that an excessive amount for repairs of damaged motor vehicles has been claimed. However, that is not this case. The allegation of the defendants in the Local Court is not of inflated repairs but of a fraudulent scheme to inflate repairs. There is a significant difference between the two. The law attaches great importance to allegations and findings of fraud. In particular, it imposes great burdens on those who make the allegations and attaches serious consequences to those who are found to have engaged in it. 17Third, Mr Minas also pointed to what would undoubtedly be the extra and significant costs to his client from having to litigate these matters in the Supreme Court. I accept that this is so and it is clearly a significant matter weighing against the transfer. To what extent the costs will be exacerbated is not a matter I am in a position to judge at this stage. It will, in large part, I suspect depend upon the extent to which the defendants in the Local Court proceedings can persuade me that Mr Minas' clients had some role in the alleged scheme which travel beyond merely presenting a damaged taxi to a repairer. 18If, for example, the plaintiffs in the Local Court proceedings are confined to simply saying that they were involved in an accident and they presented their cars to a third party repairer then at the very least their case in-chief might be seen to be relatively short. Against that, at this stage, I cannot rule out the possibility that some applications for discovery and the like will be made against them. In weighing up the balance, I accept that there is a real possibility of significant costs being incurred by Mr Minas' clients. 19One matter that may ameliorate that cost is that, if at the end of the day, all that is revealed so far as their position is concerned is that they claimed an excessive amount for repairs but did not do so fraudulently. In that event and subject to further argument, it seems to me likely that Zurich would have to wear the significant costs of them having to litigate in this forum. 20Although the question of cost weighs against the transfer it does not alter my conclusion. Given that an experienced legal practitioner is prepared to make an allegation of fraud which appears to have an adequate factual foundation and that there is material suggesting that the alleged fraud is being conducted on a systemic basis, the transfer of these four proceedings to this Court is warranted. I so order. 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: 21 February 2013