Barnel Investments Pty Ltd v Conceptual Technologies Pty Ltd
[2022] WASC 8
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: BARNEL INVESTMENTS PTY LTD -v- CONCEPTUAL TECHNOLOGIES PTY LTD [2022] WASC 8
CORAM: TOTTLE J
HEARD: 13 DECEMBER 2021
DELIVERED : 13 JANUARY 2022
FILE NO/S: CIV 1347 of 2019
BETWEEN: BARNEL INVESTMENTS PTY LTD
First Plaintiff
TZANEEN KOELKAMERS CC
Second Plaintiff
SOUTPANSBERG KOELKAMERS PTY LTD
Third Plaintiff
AND
CONCEPTUAL TECHNOLOGIES PTY LTD
First Defendant
STEELE CHRISTIAN WEST
Second Defendant
STEPHEN MARK WEST
Third Defendant
Catchwords:
Practice and procedure - Recusal application - Whether hypothetical lay observer might entertain a reasonable apprehension of bias based on previous proceedings between a defendant and the case managing judicial officer - Turns on own facts
Legislation:
Nil
Result:
Application granted
Category: B
Representation:
Counsel:
| First Plaintiff | : | Mr WCJ Zappia & Mr CC McCavana |
| Second Plaintiff | : | Mr WCJ Zappia & Mr CC McCavana |
| Third Plaintiff | : | Mr WCJ Zappia & Mr CC McCavana |
| First Defendant | : | Mr S Penglis SC & Mr M McKenna |
| Second Defendant | : | Mr S Penglis SC & Mr M McKenna |
| Third Defendant | : | Mr S Penglis SC & Mr M McKenna |
Solicitors:
| First Plaintiff | : | Minter Ellison |
| Second Plaintiff | : | Minter Ellison |
| Third Plaintiff | : | Minter Ellison |
| First Defendant | : | Gilbert + Tobin |
| Second Defendant | : | Gilbert + Tobin |
| Third Defendant | : | Gilbert + Tobin |
Cases referred to in decision:
Charisteas v Charisteas [2021] HCA 29
Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337
Helljay Investments Pty Ltd v Deputy Commissioner of Taxation [1999] HCA 56; (1999) 166 ALR 302
Johnson v Johnson [2000] HCA 48; (2000) 201 CLR 488
Livesey v The New South Wales Bar Association [1983] HCA 17; (1983) 151 CLR 288
R v Commonwealth Conciliation and Arbitration Commission; Ex parte The Angliss Group [1969] HCA 10; (1969) 122 CLR 546
R v Masters (1992) 26 NSWLR 450
R v Sussex Justices; Ex parte McCarthy [1924] 1 KB 256
Rayney v Legal Profession Complaints Committee [2018] WASCA 73
Rayney v Western Australia (No 2) [2020] WASCA 207
Re Polites; Ex parte Hoyts Corporation Pty Ltd [1991] HCA 25; (1991) 173 CLR 78
Smits v Roach [2006] HCA 36; (2006) 227 CLR 423
Vakauta v Kelly [1989] HCA 44; (1989) 167 CLR 568
Webb v R [1994] HCA 30; (1994) 181 CLR 41
TOTTLE J:
Introduction
On 13 December 2021 I acceded to the defendants' application that I should recuse myself from further management of this action on the grounds of apprehended bias.
The trial of the action was listed to commence on 17 January 2022 and the estimated duration of the trial was eight days. The imminence of the trial meant it was necessary to deliver a decision promptly. Assisted by the helpful submissions filed by both parties, I reached a firm conclusion on the disposition of the application and delivered short oral reasons explaining why I considered that I should recuse myself. I said that the oral reasons would be supplemented by written reasons. These are those reasons.
The factual background
The defendants' application was brought by a chambers summons filed on 29 November 2021. Affidavit evidence was filed by both sides.[1] Other than in one respect the critical facts were not controversial and are summarised below.
[1] Affidavit of Stephen Mark West sworn 29 November 2021; Affidavit of Jessica May Edmeades affirmed on 3 December 2021; Second affidavit of Stephen Mark West sworn 11 December 2021; Affidavit of Angus Charles Paterson affirmed 9 December 2021.
In 2004 Mr Stephen West (the third defendant and a director of the first defendant) and his wife Ms Dianne Elizabeth West, commenced proceedings for damages for negligence in this court against 12 defendants (the prior proceedings). The defendants included two barristers who practised in Melbourne and the partners of two law firms based in Perth. One of the law firms was a partnership of which I had been a member and the defendants included the legal practitioner with whom I had been in partnership and me.
Relevantly the prior proceedings were based on a claim of breach of contract and negligence in respect of legal services provided to Mr West and his wife between August 1998 and late 2001 by, among others, the firm of which I was a partner.
A copy of the statement of claim in the prior proceedings was attached to Mr West's affidavit. In summary, the claim pleaded against me arose by reason of my membership of the partnership, and not as a result of any work completed, or advice provided, by me personally. It was apparent from the evidence filed on this application that Mr West was aware that the defence of the proceedings was conducted by insurers.
In the course of the hearing of the application I informed the parties that my recollection was that the partnership between my former partner and me had come to an end in 2003.
By 2006, the claims against the other defendants appeared to have been resolved and the only remaining claims were against my former partner and me. Those claims were settled in 2011. In his evidence Mr West deposed that the terms of settlement were confidential. Prior to the hearing, and through my associate, I made a disclosure to the parties about my personal involvement in the settlement.
I had been the case manager of this action since May 2020. Over recent months the action has been the subject of intensive case management. This had arisen because of the complexity of the technical issues on which evidence will be adduced from experts within the fields of electrical and mechanical engineering and computational fluid dynamics. Two assessors have been appointed to sit with the trial judge.
A major objective of the case management had been to ensure that the January 2022 trial dates could be preserved. The preservation of the trial dates was a matter of particular concern to the plaintiffs.
Although the major issues in the action are technical engineering issues, the action does involve factual issues concerning the making of representations. Mr West's credit may be relevant to these issues.
The one area of factual controversy concerned Mr West's evidence to the effect that he did not raise any concerns about the prior proceedings at an earlier stage of the present proceedings because he was unaware that my involvement as a defendant in the prior proceedings was a matter that might give rise to a reasonable apprehension of bias that might, in turn, require my recusal. His evidence was to the effect that he did not appreciate the significance of the fact that I was one of the lawyers whom he had sued until he had a discussion with his lawyers about 'bias' in the context of the selection of suitably qualified experts who might be appointed to act as assessors. During these discussions Mr West said he was made aware of the decision Charisteas v Charisteas.[2] Mr West's evidence was to the effect that he informed his solicitors of the prior proceedings on 25 November 2021. The recusal application was foreshadowed by counsel for the defendants at a strategic conference held on 26 November 2021.
[2] Charisteas v Charisteas [2021] HCA 29.
Mr West's account of his understanding of his right to bring the present application was not accepted by the plaintiffs. In written submissions the plaintiffs argued that Mr West had waived the right to bring the application.
It is appropriate that I should record that the possibility that I had any prior association with Mr West before I became the case manager of the action was not something that had occurred to me. It was only after the recusal application was foreshadowed at the strategic conference on 26 November 2021 that I had any appreciation that Mr West was a person who had sued my former partner and me.
Legal principles
A judge should be disqualified from hearing a matter if a fair‑minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide.[3] In determining this question two things must be remembered:
(1)the fair-minded lay observer is taken to be reasonable, but is not taken to have a detailed knowledge of the law or of the character or ability of a particular judge;[4] and
(2)the judge is a professional 'whose training, tradition and oath or affirmation require [the judge] to discard the irrelevant, the immaterial and the prejudicial'.[5]
[3] Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 [6].
[4] Johnson v Johnson [2000] HCA 48; (2000) 201 CLR 488 [12] - [13]; Webb v R [1994] HCA 30; (1994) 181 CLR 41, 73 (Deane J).
[5] Johnson v Johnson [12].
There must be a logical connection between:
(1)the matter identified as the basis upon which it is said that the judge might decide the case other than on its merits; and
(2)the feared deviation from the course of deciding the case on its merits.[6]
[6] Ebner v Official Trustee in Bankruptcy [8].
While a judge should refrain from sitting on a matter if his participation might lead to a reasonable apprehension of pre-judgement or bias a request by a party for the judge to disqualify himself does not of itself establish the grounds for a possible appearance of pre‑judgment or bias.[7]
[7] Livesey v The New South Wales Bar Association [1983] HCA 17; (1983) 151 CLR 288, 294.
If a party does not object to a judge hearing a case as soon as the facts necessary to establish an apprehension of bias are known, then that party will be seen to have waived the right to subsequently object.[8]
[8] Vakauta v Kelly [1989] HCA 44; (1989) 167 CLR 568, 572 (Brennan, Deane and Gaudron JJ); Smits v Roach [2006] HCA 36; (2006) 227 CLR 423 [43] (Gleeson CJ, Heydon and Crennan JJ).
The apprehension of bias principle is based on the view that it is of fundamental importance that justice should not only be done but should manifestly and undoubtedly be seen to be done.[9]
[9] R v Sussex Justices; Ex parte McCarthy [1924] 1 KB 256, 259 (Lord Hewart CJ); Rayney v Legal Profession Complaints Committee [2018] WASCA 73 [2] (Martin CJ).
While a reasonable apprehension of bias must be firmly established to justify a judge recusing themselves from hearing a matter,[10] in a case of real doubt it will often be prudent for a judge to decide not to sit in order to avoid the inconvenience that could result if an appellate court were to take a different view on the matter of disqualification.[11]
[10] R v Commonwealth Conciliation and Arbitration Commission; Ex parte The Angliss Group [1969] HCA 10; (1969) 122 CLR 546, 553-554.
[11] Ebner v Official Trustee in Bankruptcy [20].
In Rayney v Western Australia (No 2)[12] Murphy JA provided the following review of the statements of principle in the leading authorities:[13]
[12] Rayney v Western Australia (No 2) [2020] WASCA 207.
[13] Rayney v Western Australia (No 2) [80] - [86] (Murphy JA).
In Ebner v Official Trustee in Bankruptcy, Gleeson CJ, McHugh, Gummow and Hayne JJ said:[14]
[14] Ebner v Official Trustee in Bankruptcy [19].
Judges have a duty to exercise their judicial functions when their jurisdiction is regularly invoked and they are assigned to cases in accordance with the practice which prevails in the court to which they belong. They do not select the cases they will hear, and they are not at liberty to decline to hear cases without good cause. Judges do not choose their cases; and litigants do not choose their judges. If one party to a case objects to a particular judge sitting, or continuing to sit, then that objection should not prevail unless it is based upon a substantial ground for contending that the judge is disqualified from hearing and deciding the case.
In Livesey v The New South Wales Bar Association the High Court said:[15]
[15] Livesey v The New South Wales Bar Association (294).
If a judge at first instance considers that there is any real possibility that his participation in a case might lead to a reasonable apprehension of pre-judgment or bias, he should, of course, refrain from sitting. On the other hand, 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 the hearing of the case had been entrusted by the ordinary procedures and practice of the particular court.
In Ebner, their Honours also said:[16]
[16] Ebner v Official Trustee in Bankruptcy [6].
Where, in the absence of any suggestion of actual bias, a question arises as to the independence or impartiality of a judge …, the governing principle is that, subject to qualifications relating to waiver … or necessity …, a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide.
There must be an articulation of the logical connection between (1) the matter identified as the basis upon which it is said that the judge might decide the case other than on its merits, and (2) the feared deviation from the course of deciding the case on its merits.[17]
[17] Ebner v Official Trustee in Bankruptcy [8].
…
In Johnson v Johnson, Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ said:[18]
The hypothetical reasonable observer of the judge’s conduct is postulated in order to emphasise that the test is objective, is founded in the need for public confidence in the judiciary, and is not based purely upon the assessment by some judges of the capacity or performance of their colleagues. At the same time, two things need to be remembered: the observer is taken to be reasonable; and the person being observed is ‘a professional judge whose training, tradition and oath or affirmation require [the judge] to discard the irrelevant, the immaterial and the prejudicial’.
Whilst the fictional observer, by reference to whom the test is formulated, is not to be assumed to have a detailed knowledge of the law, or of the character or ability of a particular judge, the reasonableness of any suggested apprehension of bias is to be considered in the context of ordinary judicial practice. (emphasis added)
In Re Polites; Ex parte Hoyts Corporation Pty Ltd,[19] Brennan, Gaudron and McHugh JJ said (albeit with particular reference to the decision in Livesey):
In applying this test, it is necessary to bear in mind the caution expressed by Mason J in Re JRL; Ex parte CJL:
'It seems that the acceptance by this Court of the test of reasonable apprehension of bias in such cases as Watson and Livesey 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. (emphasis added)
[18] Johnson v Johnson [12] - [13].
[19] Re Polites; Ex parte Hoyts Corporation Pty Ltd [1991] HCA 25; (1991) 173 CLR 78, 86; see also Helljay Investments Pty Ltd v Deputy Commissioner of Taxation [1999] HCA 56; (1999) 166 ALR 302 [11]; R v Masters (1992) 26 NSWLR 450, 471.
In their written and oral submissions both parties sought to draw parallels between this case and the decisions in other recusal applications involving allegations of apprehended bias. Although how similar issues have been approached in other cases is always interesting, the fact specific nature of the cases means that the guidance to be derived from them, beyond the identification of the governing principles, is limited. For that reason, I have not referred to many of the decisions cited in argument.
The defendants' contentions
The defendants' contentions may be summarised as follows:
(a)As put in oral submissions it was contended, in effect, that because I had been sued by Mr West I may harbor, what counsel for the defendants expressed as an 'ill or unfavourable view' towards Mr West and the defendants,[20] which the hypothetical lay-observer may think would cause me to deviate from my obligation to decide the issues impartially.
(b)The hypothetical lay-observer might expect a judge to disclose a prior association with a defendant, where the prior association involved the defendant making serious claims against the judge with the claim remaining on foot for approximately seven years and resulting in a settlement.[21] In this case, the defendants contended that it would have been expected that I would have disclosed my 'association with [the third defendant] in open court'.[22]
(c)Where the substantive proceedings require a finding on whether representations were made by the defendants and, if so, what was said, inevitably involving findings about Mr West's credibility, a hypothetical lay-observer might consider that a judge might not bring an impartial mind to the question of Mr West's credibility given the history of the prior proceedings.
(d)Recusal is necessary and appropriate in the present case to ensure that justice is not only done, but manifestly and undoubtedly seen to be done. Further, recusal is necessary and appropriate in order to avoid the time, expense and inconvenience that could arise if an appellate court were to take a different view on the matter of disqualification.
[20] ts 71.
[21] As put, the submission disclosed the substance of the settlement but to protect the confidentiality of the settlement I have recorded the effect of the submission in more general terms.
[22] Defendants' outline of submissions in support of application for recusal filed 6 December 2021, 8.
The plaintiffs' contentions
The plaintiffs' contentions may be summarised as follows:
(a)There is no logical connection between the prior proceedings, including the settlement of those proceedings, and any feared departure from deciding the present case on its merits.
(b)Even if there was a logical connection, a hypothetical lay‑observer knowing that a judge is 'a professional whose training, tradition and oath or affirmation require [the judge] to discard the irrelevant, the immaterial and the prejudicial',[23] it could not be reasonably apprehended that I might not bring an impartial mind to the questions I must decide in these proceedings.
(c)The failure of the defendant to consider until November 2021 that the prior proceedings and their settlement might give rise to a reasonable apprehension of bias reinforces that there is no substantial ground establishing such an apprehension of bias.
(d)Given the defendants had knowledge of the facts giving rise to the alleged apprehension of bias at least five months, and potentially 18 months, prior to bringing this application, the defendants have waived their right to bring the recusal application. The waiver argument was not pursued at the hearing of the application.
[23] Johnson v Johnson [12].
Disposition
The application of the fair-minded lay observer test involves a value judgment which is to a significant extent an intuitive judgment not readily susceptible of close analysis.
By the end of the hearing I had formed the clear and unequivocal view that I should recuse myself. In reaching that view, I took into account the prejudice that the plaintiffs may suffer because of the likelihood that the existing trial dates would be vacated. Balanced against that prejudice, however, was the risk of the greater prejudice that would be suffered if I refused the application and there was an appeal and the Court of Appeal took a different view of the merits of the recusal application than that taken by me.
It might be observed that those who practise a profession, including legal practitioners in private practice, may regard being sued by those to whom they provide their services as one of the inevitable risks of professional life, a risk against which most, if not all, professionals are obliged to be insured. Thus, when the risk materialises and professionals find themselves as defendants, they may regard that event in a more dispassionate way than those sued in other circumstances might.
While it may be accepted that the fair-minded lay observer is taken to appreciate that a judge is a person 'whose training, tradition and oath or affirmation require [the judge] to discard the irrelevant, the immaterial and the prejudicial', I do not think that the combination of these factors and the pragmatic attitude to being a defendant in a professional negligence action that may be attributed to a lawyer in private practice (and to other professionals) can be attributed to a fair‑minded lay observer.
In my view, the fair-minded lay observer considering the position of a judge who has been sued by a party to an action that is to be tried before the judge would form the view that there was a possibility that the judge might not bring an impartial mind to bear on the resolution of the issues before the court and that this concern might be enhanced if the party's credit was in issue. Although every case has to be determined by reference to its own facts, I think that the fair-minded lay observer may well hold such a view irrespective of the outcome of the prior proceedings against the judge. I should add that in my consideration of the application of the test I attached weight to the fact that in this case the prior proceedings were against a small partnership constituted by only two partners.
My conclusion that I should recuse myself is informed by the underlying principle that not only should justice be done, but that it should be seen, manifestly and undoubtedly, to be done. This principle expresses a concern of fundamental importance that extends beyond the interests of the parties to this action. The public's confidence in the judicial system depends on the observation of the principle. I was concerned that if I did not recuse myself, then that refusal might lead to an erosion of public confidence in the administration of justice.
There are two other matters that I should mention. First, although the plaintiffs did not press the waiver argument foreshadowed in written submissions, had they done so, that argument would not have found favour with me. On the evidence before the court, I could not be satisfied that Mr West was aware of his right to seek my recusal on the grounds of apprehended bias until immediately before the application was made. And, if I had made a finding that was contrary to Mr West's evidence, that adverse finding might itself have formed a separate basis for recusal.
Second, and for the sake of completeness, I will address the defendants' contention that the fair-minded lay observer might have expected that I would have disclosed my 'association with [the third defendant] in open court'. This contention assumes that the inference that should be drawn from the fact that no such disclosure was made was that I was aware that Mr West had been the plaintiff in the prior proceedings before 26 November 2021 but decided not to disclose it. As recorded earlier I was not aware that Mr West was a plaintiff in the prior proceedings until the recusal application was foreshadowed. It is something of an irony that if the fact Mr West had been a plaintiff in the prior proceedings had not been disclosed it is unlikely that I would have come to appreciate that prior association. That said, I cannot discount the possibility that at some later stage in the course of the present proceedings I may have become aware of the prior association. A recusal at a later stage in the proceedings would give rise to even greater prejudice to the parties.
Arrangements have been made to have the action case managed and tried before another judge of the General Division of the court.
I certify that the preceding paragraphs comprise the reasons for decision of the Supreme Court of Western Australia.
RC
Associate to the Honourable Justice Tottle
13 JANUARY 2022
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