British American Tobacco Australia Ltd v Gordon - [2007] NSWSC 109

No judgment structure available for this case.

CITATION: British American Tobacco Australia Ltd v Peter Gordon & Anor [2007] NSWSC 109
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 13-14 December 2006

JUDGMENT DATE :
22 February 2007

JURISDICTION: Equity Division

JUDGMENT OF: Brereton J

DECISION: Indication that judge would not sit on hearing in which there might be issue as to alleged iniquity. Decline to disqualify from hearing of transfer application. Held that not disqualified by apprehended bias from hearing and determining interlocutory proceedings on 29 November 2006, and further that orders made on 29 November 2006 should not be set aside for non-disclosure.

CATCHWORDS: COURTS AND JUDGES – Disqualification – Bias – Judge in own cause – Procedure – whether notice of motion for disqualification cognisable – whether notice of motion necessary – held, unnecessary - Apprehended bias – whether prior professional relationship between lawyer and client will disqualify lawyer, on becoming a judge, from sitting in proceedings to which former client is a party – whether reasonable apprehension of prejudgment of an issue – whether reasonable apprehension that judge may be predisposed to a view of the issue because of “interest” in propriety of past involvement – whether reasonable apprehension that judge may decide issue influenced by extraneous material previously briefed and subject to legal professional privilege of former client – whether reasonable apprehension of bias on an issue in case disqualifies judge from hearing interlocutory applications in which that issue will not arise – held, it does not.

LEGISLATION CITED: (NSW) Jurisdiction of Courts (Cross Vesting) Act 1987
(USA) Racketeer Influenced & Corrupt Organization Statute 1961

CASES CITED: A1 v King QC (FCA, Merkel J, 31 May 1996, BC 9602233)
Application of Cannar; Re Eubanks [2003] NSWSC 802
Ashburton v Pape [1913] 2 Ch 469
Aussie Airlines Pty Limited v Australian Airlines Pty Limited & Qantas Airlines Limited (1996) 65 FCR 215
Bainton v Rajski (1992) 29 NSWLR 539
Barton v Walker [1979] 2 NSWLR 740
British American Tobacco Australia Services Limited v Cowell [2003] VSCA 43 (23 April 2003)
British American Tobacco Australia Services Limited v John Fairfax Publications & Anor [2006] NSWSC 1175
British American Tobacco Australia Services Limited v John Fairfax Publications & Anor [2006] NSWSC 1197
British American Tobacco Australia Services Limited v John Fairfax Publications & Anor [2006] NSWSC 1328
British American Tobacco Australia Services Ltd v Cowell [2002] VSCA 197
Calcraft v Guest [1898] 1 QB 759
Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337
Gascor t/as Gas & Fuel v Ellicott, Esso Australia Resource Ltd & BHP Petroleum (NW Shelf) Pty Ltd [1997] 1 VR 332
Goddard v Nationwide Building Society [1987] QB 670
J Aron Corp v Newmont Yandal Operations Pty Ltd [2006] NSWSC 720
Johnson v Johnson (2000) 201 CLR 488
Kartinyeri v Commonwealth of Australia [1998] HCA 52
Livesey v NSW Bar Association (1983) 151 CLR 288
Locabail (UK) Ltd v Bayfield Properties Limited [2000] 2 WLR 870, 883 (CA)
McCabe v British American Tobacco Australia Services Ltd [2002] VSC 73
McCabe v British American Tobacco Australia Services Ltd [2002] VSC 150 McCabe v British American Tobacco Australia Services Ltd; sub nom [2002] VSC 172
McCabe v British American Tobacco Australia Services Ltd; sub nom [2002] VSC 112
Precision Fabrication Pty Ltd v Roadcon Pty Ltd (1991) 104 FLR 260
R v Commonwealth Conciliation & Arbitration Commisison; Ex parte Angliss Group (1969) 122 CLR 546
R v Garrett (1988) 50 SASR 392
R v Judge Russell; Ex parte Reid (1984) 35 SASR 417
R v Moss; Ex parte Mancini (1982) 29 SASR 385
Raybos Australia Ltd v Tectran Pty Ltd (1986) 6 NSWLR 272
Re JRL; Ex parte CJL (1986) 161 CLR 342
Re Polites; Ex parte The Hoyts Corporation Pty Ltd (1991) 173 CLR 78
S&M Motor Repairs Pty Ltd v Caltex Oil (Australia) Pty Ltd (1998) 12 NSWLR 358
S&R Investments Pty Ltd v Minister for Planning [2001] WASC 255
Smits v Roach (2006) 228 ALR 262
Taylor v Lawrence [2003] QB 528
Thellusson v Lord Rendlesham (1859) 7 HLC 429, 11 ER 172
Vakauta v Kelly (1989) 167 CLR 568
Western Australia v Watson [1990] WAR 248

PARTIES: British American Tobacco Australia Ltd (plaintiff 5898/06)
British American Tobacco Australia Services Ltd (plaintiff 5940/06)
Peter Gordon (first defendant 5898/06)
Slater & Gordon Pty Ltd (second defendant 5898/06)
Slater & Gordon Pty Ltd t/a Slater & Gordon Lawyers (defendant 5940/06)

FILE NUMBER(S): SC 5898/06; 5940/06

COUNSEL: R M Smith SC w GKJ Rich & JS Cooke (plaintiff 5898/06)
MF Wheelahan SC w RS Hollo & MJ O'Meara (plaintiff 5940/06)
R Merkel QC w JT Rush QC, J Stoljar & CJ Horan (defendants)

SOLICITORS: Baker McKenzie (plaintiff 5898/06)
Corrs Chambers Westgarth (plaintiff 5940/06)
Arnold Bloch Leibler (defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BRERETON J

Thursday 22 February 2007

5898/06 British American Tobacco Australia Limited v Peter Gordon & Anor

5940/06 British American Tobacco Australia Services Limited v Slater & Gordon Pty Limited

JUDGMENT

1 HIS HONOUR: The defendants - who for the sake of convenience I shall call Slater & Gordon – are a law firm practicing principally in Victoria, although they have a Sydney office and practice also. They ask that I disqualify myself from any further participation in each of these proceedings, which have been brought against them by the plaintiffs British American Tobacco Australia Limited (“BATAL”) and British American Tobacco Australia Services Limited (“BATAS”), to restrain the dissemination and use of certain information (“the relevant information”), in which the plaintiffs claim privilege and/or confidentiality, which has come into the possession of Slater & Gordon. The plaintiffs allege that the information came into the possession of Slater & Gordon pursuant to a breach of confidence, in circumstances in which Slater & Gordon should be regarded as having notice of the breach so as to be bound by obligations of confidence. Slater & Gordon contend that the information reveals an iniquity in which the court will recognise no confidence, and wish to use it for the purposes of reopening litigation in the Supreme Court of Victoria, commonly known as the Rolah McCabe litigation. The application is founded on the ground of apprehended bias, said to arise from the circumstance that over a period of about four months in 2003, when at the Bar, I acted for BATAS in other proceedings, which Slater & Gordon contend involve substantially the same issue as will arise in the present proceedings.

2 The issues for consideration were summarised by Mr Merkel QC, who appeared for Slater & Gordon, and for whose clear and courteous exposition of the application I am grateful, as follows:

· Whether I should disqualify myself from hearing “the matter”;

· Whether or not I should discharge the orders made on 29 November 2006 based upon the facts said to require my disqualification; and

· Whether the orders of 29 November 2006 should be discharged in any event for serious material non-disclosure of relevant matters on and prior to 29 November 2006.

3 The application requires some understanding of four sets of litigation: the McCabe proceedings; the Cannar proceedings (which is where my involvement as counsel arose); the Fairfax proceedings; and the current proceedings.

The McCabe Proceedings

4 Rolah McCabe, for whom Slater & Gordon acted, sued BATAS in the Supreme Court of Victoria for damages for personal injury claimed to have been occasioned by her smoking cigarettes manufactured by BATAS over many years. On 22 March 2002, Eames J published reasons for orders (which his Honour made on 25 March 2002) striking out the defence and directing that the trial proceed as an assessment of damages only, on the ground that BATAS had, before the proceedings had been commenced, engaged in a policy of document destruction in order to put beyond the reach of potential plaintiffs evidence which might otherwise be obtained on discovery and used to the detriment of BATAS [McCabe v British American Tobacco Australia Services Ltd [2002] VSC 73]. Damages were assessed, and judgment given for Mrs McCabe on 11 April 2002. On 9 December 2002 the Victorian Court of Appeal allowed BATAS’ appeal and ordered a new trial [British American Tobacco Australia Services Ltd v Cowell (2002) 7 VR 524; [2002] VSCA 197]. Mrs McCabe had died after the appeal was argued but before judgment was given, on 26 October 2002.

5 In the course of the application before Eames J to strike out the defence, many documents were produced on compulsory process and admitted into evidence, claims for legal professional privilege having been overruled on the basis of waiver. Amongst the material that came into evidence in that way was advice given on 2 April 1990 to Mr Cannar, a senior lawyer formerly employed by BATAS, recorded in a note by Mr Oxland (a solicitor of Clayton Utz), which related to BATAS document management policy. On 6 February 2002, Eames J held that privilege in it had been waived, and that the documents which recorded the advice should be produced by BATAS [McCabe v British American Tobacco Australia Services Ltd [2002] VSC 112].

6 On 24 April 2002, Mrs McCabe commenced separate proceedings in the Supreme Court of Victoria, claiming a declaration to the effect that use of such documents was not constrained by any implied undertaking to use them only for the purpose of the proceedings, and Byrne J acceded to that application on 7 May 2002 [McCabe v British American Tobacco Australia Services Ltd [2002] VSC 150]. This occurred in the context of Slater & Gordon having received a request from the US Department of Justice to provide copies of those documents in connection with a claim by the US Department against various cigarette companies (not including BATAS) alleging violation of the Racketeer Influenced & Corrupt Organization Statute 1961 (USA). The Department was apparently interested in the document management policies of the cigarette companies. On 15 May 2002, Byrne J dissolved an interim injunction obtained by BATAS to protect its claimed confidentiality pending appeal [McCabe v British American Tobacco Australia Services Ltd [2002] VSC 172].

7 On 14 June 2002, the injunction was reinstated by the Court of Appeal pending appeal. However, it seems likely that the documents were provided to the US Department in the interim. On 6 December 2002, in the judgment on appeal from Eames J, the Court of Appeal held that privilege in the documents had not been waived as the trial judge had held [McCabe [2002] VSCA 197, [192]]. On 28 April 2003, in a judgment given on appeal from Byrne J’s decision, the Court of Appeal concluded that the implied undertaking continued to attach to the documents in question, and that leave should not be granted to the McCabe estate to use the documents to assist the US Department of Justice in its inquiries into the conduct of the defendant and, perhaps, its solicitors [British American Tobacco Australia Services Limited v Cowell (2003) 8 VR 571].

The Cannar Proceedings

8 As has been mentioned, the US Department brought proceedings against certain tobacco companies in the United States District Court for the District of Columbia, under the RICO statute. Pursuant to a letter of request issued by that court, on 9 December 2002, a representative of the US Department applied for and obtained ex parte orders from James J in this court, requiring the examination of Mr Cannar before an examiner. By motion filed on 5 February 2003, Mr Cannar moved to have the orders set aside. BATAS also filed a notice of motion, on 11 February 2003, claiming orders that it be joined as a defendant, or alternatively leave to participate in the examination, for the purpose of maintaining its claims to confidentiality and privilege, and setting aside the orders for examination, restraining the plaintiff from using privileged material, and for delivery up of privileged material in the plaintiff’s possession. British American Tobacco (Investments) Limited (“BATCO”) also filed a notice of motion seeking leave to appear at any examination and to cross-examine the applicant.

9 One of the topics, if not the chief topic, upon which the US Department wished to examine Mr Cannar was the document management policies of BATAS, and the intervention of BATAS was at least in part for the purpose of maintaining its privilege and confidentiality in the documents which had come to light as a result of the McCabe proceedings, including documents which referred to or evidenced advice about any “document management policy”.

10 Bell J declined to make an order joining BATAS and dismissed its motion, and also declined to hear counsel on behalf of BATAS as amicus curiae to contend that the orders were beyond power [Application of Cannar; Re Eubanks [2003] NSWSC 802]. Her Honour observed that BATAS was not a party to the US proceedings, and that its interest in maintaining its privilege was not a right or interest in the proceedings such that it ought to be joined as a defendant, though it was open to BATAS to attend at the examination and to object to evidence being adduced that would disclose the contents of its privileged communications [at [15]].

11 As senior counsel, I received a brief from Corrs Chambers Westgarth, the solicitors who then and now acted for BATAS, in connection with the Cannar proceedings, in or about late December 2002 or early January 2003. On 13 January 2003 I held a conference. On 14 January 2003 I held another conference. I conferred with Mr Westgarth, Mr Whitaker and Mr Micallef (of Corrs) on 29 January 2003 for 1 hour. I conferred with Mr Leeming (then of junior counsel), Mr Westgarth, Mr Micallef and others on 5 February 2003 for 1 hour. On or about 6 February 2003 I gave some telephone advice. On 15 February 2003 I held a conference and settled BATAS’ motion. A brief comprising some 827 pages was delivered on or about 5 March 2003. I conferred with Mr Westgarth and Mr Micallef on 11 March 2003 for ½ hour. I conferred with Mr Micallef on 2 April 2003 for ½ hour. On 15 April 2003 I settled BATAS’ written submissions, which appear to have been drafted by junior counsel. I probably read a notice to admit served in the proceeding before it was served. There were further conferences (the persons present are not recorded in my records) on 22 April 2003 for 1 hour, and on 29 April 2003 for 1 hour. In addition, there was some reading and preparation undertaken for these conferences. I returned the brief on 13 May 2003, the motion having been set down for hearing on dates for which I was not available. The total fees rendered by me were $5,500 inclusive of GST; they were paid during 2003.

12 The issues addressed in the written submissions that I settled and signed were:

· The basis on which it was contended that BATAS should be joined, namely that the proposed subject matter of Mr Cannar’s examination were such that BATAS had a direct legal interest in the conduct of the examination, so as to preserve its entitlements to confidentiality and privilege;

· The grounds on which it was said the orders for examination should be set aside, namely (1) that they were beyond power, (2) that the application was an abuse of process, and (3) that the judge making the order failed properly to exercise his discretion. The first and third are not relevant for present purposes, but the abuse of process argument contended that when the letter of request was issued and the application made to James J it was manifestly based on material which was and continued to be privileged, it being unclear to what extent the decision of the Victorian Court of Appeal, holding that the documents remained privileged, had been disclosed to the United States District Court in connection with the issue of the letter of request, or to James J on the ex parte application.

· The basis on which the US Department’s use of privileged material should be restrained, it being said that as a result of the decisions of Eames J and Byrne J, which had been held to be erroneous, it had come into possession of material which it ought never have had, and ought now be restrained from using and compelled to deliver up.

13 Neither those submissions, nor the judgment of Bell J, suggest that the question of “iniquity” as a defence to a claim of confidentiality arose or was addressed.

14 Subsequently, on 3 May 2004, I answered an inquiry from a third party, as to whether I would be free of any actual or potential conflict in the event that I accepted a potential brief in proceedings in the Dust Diseases Tribunal against BATAS, to the effect that I would not be free of at least potential conflict. That was in circumstances where it was plain that the third party wished to be assured that there was no possibility of any problem arising at a later stage if a brief were accepted.

The Fairfax Proceedings

15 In circumstances which BATAS and BATAL contend amount to a breach of confidence, certain documents relating to an internal investigation conducted in the wake of the judgment of Eames J by Clayton Utz, the solicitors who acted for BATAS in the McCabe proceedings, which contain what is prima facie privileged information of the plaintiffs, relating to their conduct of and litigation strategy in the McCabe proceedings, reached the press, and excerpts and information derived from them were published in The Age. On 2 November 2006, in the late afternoon, BATAS and BATAL each approached me as duty judge with an application for urgent interim relief restraining John Fairfax Publications Pty Limited (who were then believed to be publishers of The Age and The Financial Review) from using the relevant information. Initially the application was made ex parte, and at the outset the following exchange took place between Mr Reynolds SC, who appeared for BATAS, and me [I have taken the liberty, here and later, of correcting the transcript where I have no doubt as to what was said]:

HIS HONOUR: I once appeared for one of those entities in some sort of application to stop evidence being taken on commission in Australia.

REYNOLDS: I know the matter your Honour is referring to. Brownie J heard evidence on commission.

HIS HONOUR: Are you instructed by Westgarths?

REYNOLDS: Yes.

HIS HONOUR: They were the interests I was appearing for. Does that cause any problem?

16 A little later in the evening, once there was an appearance on behalf of Fairfax by Mr Glasson, I made the following statement:

I should formally disclose the following matters. At some stage in the past, for a short time when I was at the bar, I acted I think for BATAS or one of the BAT companies in connection with an application for evidence to be taken on commission in Australia, in connection with proceedings in the United States District Court in Columbia, I think. As far as I am concerned it causes me no embarrassment or difficulty whatsoever. Having read the affidavit, lest it be thought that Clayton Utz has any interest in the proceedings other than as a former legal representative, I should also disclose that Mr Stuart Clarke is well known to me personally, although I haven't had a professional connection with him for many years. If I were, at some stage, to have to consider his credit, that would occasion a difficulty. But I don't see that any such difficulty arises at the moment. Obviously, if you have something to say about that, I will consider it.

GLASSON: I don't anticipate any difficulties, but I may need to get formal instructions.

17 I proceeded to grant leave to each of BATAS and BATAL to file a summons returnable on 9 November 2006 and granted an interim injunction in each matter, it then being envisaged that a final hearing could be held late the following week [see British American Tobacco Australia Services Limited v John Fairfax Publications & Anor [2006] NSWSC 1197].

18 On 7 November 2006, I dealt with a number of issues in the Fairfax proceedings, concerning subpoenas and notices to produce [see British American Tobacco Australia Services Limited v John Fairfax Publications & Anor [2006] NSWSC 1175]. The Age Company Limited, a Fairfax subsidiary, was added as second defendant. At the request of the Fairfax companies, I vacated the hearing appointed for 9 November 2006 and fixed the matter for hearing commencing on 29 November 2006 for two or three days. Without admissions, Fairfax did not oppose continuation of the interlocutory injunction until the hearing, and The Age Company gave an equivalent undertaking until the hearing.

19 Some of the subpoenas named Mr Stuart Clark, the managing litigation partner in Clayton Utz, as the recipient, and in the course of the proceedings that day I made the following statement:

I should mention - I know I have disclosed this in the presence of some of the parties when the application first came before me last week. There is a new party. Mr Stuart Clark is well known to me, and, on what I know of this case, I have no embarrassment in dealing with the matter. If questions of his credit personally were to arise, I would not be able to deal with the matter. I do not, at this stage, perceive that is likely to be an issue in the case.

20 On 9 November, I dealt with further issues concerning a notice to produce [see British American Tobacco Australia Services Limited v John Fairfax Publications & Anor [2006] NSWSC 1328]. On 16 November, the Fairfax proceedings were again before me for directions, and I dealt with a range of procedural issues, largely related to subpoenas and notices to produce, and preparation of the matter for hearing.

The Slater & Gordon proceedings

21 On 21 November 2006, having discovered that the material that had reached the newspapers had also been provided to Slater & Gordon, counsel for BATAL appeared before Campbell J as duty judge, and obtained an abridgement of time for service of proceedings on Slater & Gordon. In an endeavour to have such proceedings heard at the same time as the Fairfax proceedings, they were made returnable before me on 23 November, when the Fairfax proceedings were listed for further directions.

22 Thus both the Fairfax proceedings, and BATAL’s proceedings against Slater & Gordon, came before me on 23 November 2006. This was the first occasion on which Slater & Gordon were before the Court. They were represented by Mr Rush QC, who has an extensive history in and familiarity with the McCabe proceedings. There were various disputes about the preparation of the matters for hearing, notices to produce and subpoenas. BATAS sought leave to bring proceedings against Slater & Gordon, and interlocutory orders against them. So far as Slater & Gordon are concerned, the following transpired:

RUSH: In relation to Mr Wheelahan's application to join BATAS, there is nothing much I can say about it. … There is no possibility that Slater & Gordon could be ready to commit to a hearing on 29 November.

The material that is relied on by BATAL was served, a draft of it was served 7 o'clock Monday evening. The affidavit was served Tuesday afternoon and proper consideration of the schedule to that affidavit has not been able to take place between counsel and my instructing solicitors. In relation to that matter there has been your Honour, may be aware undertakings have been given by Slater & Gordon in relation to the dissemination of the documents.

HIS HONOUR: I only have the slightest familiarity with what happened before Campbell J this week. I am not aware …

23 Fairfax abandoned its earlier assertion that the proceedings should be dealt with quickly, as did The Age. BATAL pressed for the matter to proceed on 29 November against the newspaper companies, even if it could not proceed against Slater & Gordon. I made further directions in respect of the preparation of the Fairfax matters for hearing. The interlocutory regime affecting the newspaper companies was varied, having regard to the more precisely defined and limited case which the plaintiffs articulated.

24 Counsel for BATAL sought an interim injunction against Slater & Gordon. Mr Rush QC submitted that an opportunity should be afforded to Slater & Gordon to review the situation. When asked what was to happen in the meantime, the following transpired:

RUSH: Your Honour, I think, subject to obtaining instructions, I would offer the injunctive relief until Wednesday that is sought in the Summons.

HIS HONOUR: Mr Smith, it seems to me that Slater & Gordon should have an opportunity to review more closely the Schedule and that if an injunction is granted until the days we have set aside next week in the terms you seek, and the matter can be revisited then, that protects you.

25 In those circumstances, I made the following order:

Upon the plaintiff by its counsel giving to the Court the usual undertaking as to damages, by consent, but without any admission on behalf of the defendants, I order that until and including 29 November 2006 the defendants be restrained from by themselves, their servants or agents publishing, disseminating or using the information contained in those parts of the documents that are identified in Schedule A to the Summons filed on 21 November 2006. I stand over the hearing of the application for interlocutory relief to 29 November 2006 at 10am.

26 In the course of discussion with Mr Rush, I made the following statement (emphasis added):

HIS HONOUR: Just to complicate things, I have just noticed something about the courtroom. I have made a whole lot of disclosures in these proceedings about various relationships with various parties. I was not aware until today that Slater & Gordon were going to be a party in the proceedings. I see that a partner in the firm, who is instructing Mr Rush in court, is well known to me. I don't think at this stage it causes me any more embarrassment than Mr Clark's involvement in the proceeding, but the parties should be aware of that.

27 No further inquiry was then made as to the disclosures I had previously made, or as to which parties it was with which I had had relationships.

28 Leave was granted to BATAS to file a summons instituting its proceedings against Slater & Gordon. BATAS sought an interlocutory injunction in substantially the same terms as BATAL had obtained. The following transpired:-

HIS HONOUR: … Any difficulty if we pronounce in those proceedings an injunction in the same terms as in the other proceeding?

RUSH: No, your Honour.

HIS HONOUR: Upon the plaintiff by its counsel giving to the Court the usual undertaking as to damages, by consent, but without any admission on the part of the defendants, I order that until and including 29 November 2006 the defendants be restrained from by themselves, their servants or agents, or howsoever publishing, disseminating or using except for the purposes of defending these proceedings the information described in annexures A and B to the Summons. I direct that these orders be entered forthwith.

RUSH: May I be excused from the bar table.
HIS HONOUR: I think that exhausts your interests for the day. We will see you next week.

29 Further directions were made in the Fairfax proceedings with a view to preserving the possibility of hearing those matters commencing on 29 November, but contemplating that the cases may not then be able to proceed on a final basis. It was envisaged that the question of the continuation of the interim injunctions in the Slater & Gordon proceedings would also be heard on 29 November.

30 Although the transcript records all four proceedings as being listed for directions on 27 November 2006, in fact only the Fairfax proceedings were before me that day, the Slater & Gordon proceedings having been stood over to 29 November to suit the convenience of their counsel. On 27 November 2006, I dealt with a number of notices to produce and subpoenas; although the Slater & Gordon proceedings were not before the Court, Mr Smith SC for BATAL indicated that there had been some correspondence about the form of injunction, and I indicated that that could be dealt with on Wednesday 29 November.

31 By facsimile on the afternoon of 28 November, Arnold Bloch Leibler solicitors, who had by then commenced to act for Slater & Gordon, foreshadowed to the other parties and the court that it was intended to file in court on 29 November a motion that the proceedings be transferred to the Supreme Court of Victoria under the Jurisdiction of Courts (Cross Vesting) Act 1987 (NSW), and directions in connection with that motion (a draft of which was enclosed).

32 On 29 November 2006, all four proceedings were before me. Slater & Gordon were represented by Mr Stoljar of counsel. In BATAS v Fairfax, all the applications before the court were stood down to permit discussions between the parties to proceed. In BATAL v Fairfax, BATAL sought to proceed for final relief. In both Slater & Gordon proceedings, Slater & Gordon proposed a timetable for the preparation of the matter for hearing, as did BATAS. The timetable was agreed, except that BATAS sought pleadings in order to crystallise the issues. The other contentious issue was that of a variation of the current interim injunctive regime. As to that, Mr Reynolds SC for BATAS said (emphasis added):

The second matter is the question of variation of the current interim injunctive regime. Your Honour will see that's dealt with in the next set of short minutes. I think that the only issue of dispute between me and Mr Stoljar on this point, that is on the form of injunctions, are that his client wishes to have an exception similar to that in proposed order 3 to allow his client to use the information as we have described it in order to mount not only a cross claim against my client in these proceedings, but also a cross claim against Mr Douglas' client in the other proceeding. We don't at the moment have any idea what this cross claim is. Obviously, we would need to know a little bit more about that issue. Regardless of what it is, we will be suggesting it will defeat the primary purpose of our case to enable a proceedings to be run by way of cross claim back against us using these documents when if our --

HIS HONOUR: This is a cross claim by Slater & Gordon?

33 A third issue was a motion seeking an order for the provision of information identifying the persons to whom Slater & Gordon had distributed the relevant information.

34 Mr Smith SC, for BATAL, broadly adopted the same position as BATAS. Fairfax indicated that it would not oppose appropriate orders being made on a final basis in the proceedings brought against it by BATAL, but sought to be heard separately on the question of costs. After the issues had been outlined in that way, I indicated that BATAS v Fairfax would stand down for the time being as requested; I would deal first with the various applications in the Slater & Gordon proceedings; and I would then return to BATAL v Fairfax.

35 The short minutes proposed by Slater & Gordon in BATAS v Slater & Gordon were expressed as follows:

By consent and without prejudice, the court orders:

1. On the plaintiff’s usual undertaking as to damages, the defendant by itself and its servants or agents be restrained until such time as the court may order, from publishing, disseminating nor using the information contained in those parts of the documents that are identified in annexures A and B to the summons filed on 23 November 2006, save that the defendant is not precluded by this order from using the said information for the purpose of defending or prosecuting a cross claim against the plaintiff in these proceedings and in New South Wales Supreme Court proceeding number 5898 of 2006.

Jurisdiction of Courts (Cross Vesting) Act

3. That the plaintiff file and serve any affidavits in reply by 5 pm on 12 December 2006;

4. That the defendant file and serve any affidavits in reply to the plaintiff’s affidavits by 5 pm on 19 December 2006;

5. That the defendant file and serve its outline of submissions by 5 pm on the day ten business days before the date listed for hearing of the motion;

6. That the plaintiff file and serve its outline of submissions by 5 pm on the day five business days before the date listed for hearing of the motion;

7. That the parties file and serve any submissions in reply by 5 pm two business days before the date listed for hearing of the motion;

8. That the defendant’s motion be listed for hearing at 10 am on a date to be fixed by the court;

9. That the notice to produce issued to the defendant dated 24 November 2006 be stood over until …………;

10. Liberty to apply on two day’s notice;

11. Such further or other orders as the court deems fit;

12. Costs.

36 It will be observed that para 1 proposed an interlocutory injunction restraining use of the relevant information, save for a limited purpose (which did not include reopening the McCabe proceedings). The corresponding directions proposed by BATAS (“BATAS short minutes of directions for pleading and cross-vesting application”) were as follows:

By consent, the court directs:

Jurisdiction of Courts (Cross Vesting)

Act

2. The plaintiff file and serve its statement of claim and any affidavits in reply by 5 pm on 12 December 2006.

3. The defendant file and serve its defence and any affidavits in reply to the plaintiff’s affidavits by 5 pm on 19 December 2006.

4. The defendant file and serve its outline of submissions by 5 pm ten business days before the date listed for the hearing of the motion.

5. The plaintiff file and serve its outline of submissions by 5 pm on the day five business days before the date listed for the hearing of the motion.

6. The parties to file and serve any submissions in reply by 5 pm on the day two business days before the date listed for the hearing of the motion.

7. The defendant’s motion be listed for hearing at 10 am on a date to be fixed by the court.

37 BATAS also proposed separate directions in connection with the notice to produce issued by it to Slater & Gordon, providing for its adjournment, and in connection with the interlocutory the short minutes proposed by BATAS were as follows:

By consent but without admission, the court orders:

1. The injunctive orders made in these proceedings on 23 November 2006 be vacated;

2. Upon the plaintiff by its counsel giving the usual undertaking as to damages, and subject to order 3, the defendant by itself its servants or agents be restrained until …….. from publishing, disseminating or using the information described in annexures A and B to the summons filed on 23 November 2006 (“the information”).

for the purpose of defending these proceedings

The court notes that the lawyers retained to act for the defendant in these proceedings undertake to keep the information confidential.

38 Thus BATAS also proposed an interlocutory injunction restraining use of the relevant information, save for a limited purpose (which was narrower than that proposed by Slater & Gordon). The italicised portion of paragraph 3 was added in the course of argument, as it became apparent that the use which the defendant’s solicitors could make of the relevant information – in particular, whether it would be limited to defence of the instant proceedings or extended to defence of the BATAL proceedings and bringing a cross-claim - was the critical distinction between the positions of the parties. I granted leave to Slater & Gordon to file their transfer motion in each proceeding in which they were a party, made it returnable instanter and dispensed with further service. Slater & Gordon did not oppose the direction sought by BATAS for pleadings but sought a lengthier period in which to file a defence, until approximately mid-January. I acceded to that request, and made directions in accordance with the BATAS short minutes of directions for pleading and cross-vesting application, but substituting 15 January 2007 for 19 December 2006 in paragraph 3. I stood over to 26 February 2007 the hearing of the transfer motions.

39 Thus on the issue of injunctive relief, it was common ground that there should be an interlocutory injunction, and substantial agreement as to its terms, the essential difference between the positions of the parties being whether there should be excepted from the restraint on use of the information its use to prosecute a cross-claim against BATAS, and against BATAL in the other proceeding. Slater & Gordon were unable to articulate what cross-claim they might bring in either proceeding. BATAS contended that to permit information to be used for the purpose of the other albeit related proceeding would potentially destroy the privilege which the proceedings were intended to preserve, referring in particular to Calcraft v Guest [1898] 1 QB 759 and Ashburton v Pape [1913] 2 Ch 469. Reference was made to the possibility that Slater & Gordon might require separate representation in each proceeding to deal with the problem. After discussion, I indicated that I was inclined to allow the more limited exception at that stage, and to consider further the implications of the wider exception, about which the parties might wish to make further submission. I foreshadowed making an interim order and reserving liberty to apply, which might be exercised to seek leave to use the information the subject of the injunction in one proceeding for the purpose of bringing a cross-claim in that proceeding, or to defend or bring a cross-claim in the other proceeding. Accordingly, I made the following orders in BATAS v Slater & Gordon:

(1) Discharge, with effect from today, the injunctive orders made on 23 November 2006.

(2) Upon the plaintiff, by its counsel, giving to the court the usual undertaking as to damages, and subject to order (3) below, the defendant be restrained until further order from by itself, its servants and agents, publishing, disseminating or using the information described in annexures A and B to the summons filed on 23 November 2006 ("the information").

(3) Order (2) is not intended to and does not preclude the defendants from publishing or disseminating the information for the purpose of defending these proceedings:

(a) to such of the lawyers who it has retained or who it may retain to act for it in these proceedings who have executed an undertaking to keep the information confidential;

(b) to such other persons as the plaintiffs may, in writing, agree upon such terms as the plaintiff may stipulate;

(c) with the leave of the court.

40 I made equivalent orders in BATAL v Slater & Gordon, reserving further consideration of the extent of the exceptions contained in paragraph 3 of each set of orders.

41 I then embarked on directions in respect of BATAS’ application for orders for disclosure of the identities of those to whom Slater & Gordon had provided the relevant information. Provision was made for the hearing of that motion, and any application by Slater & Gordon to set aside a related notice to produce, on 1 December. Similar directions were made in respect of any application to set aside a notice to produce served by BATAL on Slater & Gordon. Mr Stoljar was excused.

42 Thereafter I dealt with the Fairfax proceedings. I made final orders, which were not opposed, in BATAL v Fairfax, and I made directions for the filing of a motion for a special costs order which was made returnable on Thursday 7 December 2006. On 30 November, in BATAS v Fairfax, I made final orders by consent.

43 On 1 December, I heard the applications of BATAS and BATAL for an order that Slater & Gordon file an affidavit disclosing the identity of persons to whom the information had been distributed, and an application by Slater & Gordon to set aside a notice to produce. Mr Stoljar indicated that the defendants had the practical difficulty he had foreshadowed on 29 November about use of the relevant information the subject of one proceeding for the purpose of the other proceeding, and the following exchange took place:

Without trespassing on your Honour's time too much, can I identify we, meaning the defendants, have a practical difficulty, namely, the difficulty subject of the discussion on Wednesday. Your Honour won't have had the opportunity to reflect on the form of the injunctive relief, but your Honour will recollect the difficulty.

HIS HONOUR: I have to some extent, and I have had a close look at Lord Ashburton v Pape and Calcraft v Guest and the decision of Campbell J in NSW Law Reports, the name escapes me, and Slanders , the combined effect of which provisionally is that you may have been lucky to get the carve out that you got.

STOLJAR: That raises a further issue.

HIS HONOUR: I will hear further argument on that as I have indicated. I have to say a review of those cases has provisionally, if anything, fortified me in the narrower, rather than persuading me towards the broader, view.

44 Ultimately I made an order - to which Slater & Gordon did not object - for the filing and service of an affidavit disclosing the identity of persons from whom the subject documents had been obtained and to whom the subject documents or information contained in them had been disseminated. I extended time for compliance with notices to produce issued by the plaintiffs in each Slater & Gordon proceeding to 7 December, and refused applications to set aside those notices.

45 At the conclusion of the proceedings on 1 December 2006, when the applications had proceeded before me, on and off, for three consecutive days, the following occurred:

STOLJAR: The second point I need to raise is this, that it appears to the defendants having reviewed the transcript in proceedings 5611 and 5612 of 2006 [the Fairfax proceedings] that your Honour raised with the parties to those proceedings the fact that your Honour had had some connection at some point with a partner of Clayton Utz. Depending on the content of the confidential information, it is at least conceivable that it could become an issue in these proceedings. My clients at this point only wish to place on record that they wish to give that issue some further consideration and reserve their position.

HIS HONOUR: I am not sure that you were here when I drew attention to the fact that I had a virtually identical and corresponding association with Mr Lewis who is now a partner in your client and who was instructing at that time, and you have probably seen this in the transcript as well, that at one stage in the Cannar and Eubanks proceedings I had a brief from one of the BAT companies, I forget which one, … the parties in the media proceedings, that was disclosed to them a couple of times and no doubt you have seen that in the transcript as well.

46 Accordingly, the position after 1 December 2006 may be summarised as follows:

· In BATAS v Fairfax, final orders had been made by consent.

· In BATAL v Fairfax, final orders had been made, unopposed, but an application for a special costs order remained outstanding.

· In the Slater & Gordon proceedings:

· BATAL and BATAS sought by way of final relief injunctions restraining the use of the subject documents and information contained in them and orders for delivery up.

· Interim relief had been granted on 23 November on a consensual basis.

· On 29 November, the interim relief was varied in circumstances where it was common ground that Slater & Gordon would be restrained until the hearing from using the subject documents and information contained in them other than for the purpose of defending the relevant proceeding, and the only dispute was whether they should also be permitted to use the information to defend the other proceeding and/or to bring a cross claim in the proceeding or the other proceeding. I had ruled that at that stage use for those additional purposes should not be permitted, but reserved liberty to apply in that respect. No such application had, or has yet, been made.

· The hearing of the transfer applications had been set down for 26 February 2006 before me.

47 Accordingly, there remained in the Slater & Gordon proceedings:

· The interlocutory hearing of the transfer motion fixed to be heard by me on 26 February 2007;

· The possibility of an application pursuant to the liberty reserved in respect of the further use which might be permitted of the subject documents in the interim; and

· The hearing in due course of the claims for final relief.

48 There had been no occasion, up to that point, to consider in the Slater & Gordon proceedings whether BATAL and BATAS had a seriously arguable case of privilege or confidentiality, because it had always been common ground that there would be an interlocutory injunction, and the only dispute was as to the scope of the “carve out”.

The disqualification and related applications

49 On 6 December 2006, Arnold Bloch Leibler wrote to my associate, asserting that the disclosure made on 1 December 2006 was the first occasion on which they or their clients were made aware of my having acted for BATAS in the Cannar proceedings, that they had not until that week obtained a copy of the transcript of 2 November 2006 when the earlier disclosure was made, and that they were now instructed to file an application seeking orders that I disqualify myself from hearing the proceedings and to have it heard at the earliest opportunity when the proceedings next came before the court, on 7 December 2006. Having extracted from my old practice records a fee note and a copy of a letter, my associate responded the same day, as follows:

Thank you for your letter of today.

His Honour will hear your clients’ application, as you request, tomorrow 7 December 2006 at 0930.

As a result of your letter, his Honour has extracted and examined such relevant records as he has, and has asked me to convey the following information as to his involvement in the Eubanks/Cannar proceedings.

As Senior Counsel, his Honour received a brief from Corrs Chambers Westgarth, for BATAS, in or about late January 2003. To the best of his recollection, it related to the orders that had been made by James J on 9 December 2002 for examination of Mr Cannar, and led to the motion filed by BATAS on 11 February 2003, which was ultimately heard by Bell J on 4 June 2003 [[2003] NSWSC 802].

He conferred with Mr Westgarth, Mr Whitaker and Mr Micallef (of Corrs) on 29 January 2003 for 1 hour. He conferred with Mr Leeming (then of junior counsel), Mr Westgarth, Mr Micallef and others on 5 February 2003 for 1 hour.

He conferred with Mr Westgarth and Mr Micallef on 11 March 2003 for ½ hour. He conferred with Mr Micallef on 2 April 2003 for ½ hour. There were further conferences (the persons present are not recorded and his Honour does not recollect) on 22 April 2003 for 1 hour, and on 29 April 2003 for 1 hour. In addition, there was some reading and preparation undertaken for these conferences.

His Honour returned the brief on 13 May 2003, the motion having been set down for hearing on dates for which he was not available.

The total fees rendered by his Honour were $5,500 inclusive of GST.

50 On the evening of 6 December, Arnold Bloch Leibler forwarded by facsimile a notice of motion seeking the following orders:

1. That this notice of motion be returnable instanter.

2. That his Honour Justice Brereton disqualify himself from further hearing or determining the proceedings.

3. That the orders and directions numbered 2, 3, 4, 5, 6, and 7 made by his Honour Justice Brereton on 29 November 2006 be vacated.

4. That the orders and directions numbered 1 and 2 made by his Honour Justice Brereton on 1 December 2006 (copy attached) be vacated.

5. The proceedings be listed for directions on a date to be fixed by the court.

6. The plaintiff to pay the defendant’s costs of this notice of motion.

51 The orders and directions sought to be set aside were the directions for pleadings, affidavits, submissions and hearing of the transfer motion, and orders dismissing with costs the defendant’s motion to set aside the plaintiff’s notices to produce of 23 November 2006. The motion did not seek to have the interim injunction of 29 November 2006 set aside.

52 When the matter came before me on 7 December 2006, a question arose as to whether the disqualification application should proceed formally on notice of motion, in the light of observations of the Court of Appeal in Barton v Walker [1979] 2 NSWLR 740 to the effect that a motion that a judge of the court disqualify himself or herself from commencing or completing a case on the ground of suspicion of bias or otherwise was not cognizable [Barton v Walker, 749A – 750B; see also Bainton v Rajski (1992) 29 NSWLR 539, 541, 544D-E]. In Bainton v Rajski, Mahoney JA observed (at 544) that a judge’s determination whether or not to hear a particular proceeding may be made without formalities such as a motion for disqualification, the hearing of evidence, or the like. In Kartinyeri v Commonwealth of Australia [1998] HCA 52, Callinan J observed that no formal motion had been filed or was necessary. Nonetheless, there are cases in which a motion has been filed [S&M Motor Repairs Pty Ltd v Caltex Oil (Australia) Pty Ltd (1998) 12 NSWLR 358; J Aron Corp v Newmont Yandal Operations Pty Ltd [2006] NSWSC 720]. While I incline to the view that it is not impermissible to proceed on a notice of motion claiming an order that a judge disqualify himself or herself, it seems plain that such a motion is not necessary, and by agreement the application proceeded, insofar as it sought my disqualification, informally without a notice of motion.

53 The motion to set aside the procedural directions made on 29 November was ultimately not pressed. However, as will appear, Slater & Gordon have also filed a motion in each matter, claiming an order discharging orders that I made on 29 November 2006 which, although initially made returnable on 22 February 2007, are also before me for determination and may require consideration, at least if I uphold the submission that I should disqualify myself from further participation in the matters.

54 On 7 December, Mr Wheelahan SC, for BATAS, supplemented the information contained in my associate’s letter and produced a copy of the submissions to which I have referred; the history of my involvement in Cannar earlier set out consolidates the information so provided with that which I had disclosed. Notwithstanding that the letter from Arnold Bloch Leibler had asked to have the disqualification application heard at the earliest opportunity on 7 December 2006, Mr Rush QC said that a substantial amount of documentation now had to be examined, and sought an adjournment for that purpose. In the course of discussion, it was identified that the next significant step in the proceedings was the transfer application, and that the odds were about 15 or 14 to one against my presiding at the final hearing. The following exchange then took place:

RUSH: Your Honour raises the matter of the final trial being heard by another judge of this division. The fact of the matter is, we will submit, that the next primary step in this matter is a cross vesting application.

HIS HONOUR: Yes.

RUSH: We would see that as the immediate step that should be undertaken, having regard to your Honour's role in the British America Tobacco Australia Services in the Cannar proceedings and letter of request that was made from the District Court of Columbia. That application, we would submit, should be heard before another judge of this Court.

Your Honour, if I need to seek instructions in relation to this but, we would say that, in relation to the preservation of the status quo in relation to these documents, that has generally occurred with your Honour, in your Honour making the orders that have been made.

Now, in relation to those matters, we would submit there is no urgency in relation to the protection of what the plaintiffs in these proceedings allege is privileged or confidential information. Therefore, we would submit the next step should be the cross vesting application.

HIS HONOUR: What I am slightly intrigued about is, if I am disqualified by bias, then the orders I have made in that respect are just as void as the ones that you seek to set aside, yet you don't seek to set them side; why?

RUSH: We would say in the notice of motion there are orders we seek to set aside.

HIS HONOUR: But not the injunctions. You seek to set aside procedural directions and the orders about the Notice to Produce, but not the injunctions relating to further disclosure of the documents.

RUSH: We would say that is, in the context of what has gone on before your Honour, isn't surprising. We don't want to revisit old territory in relation to that. What we do want to do is try, attempt to put this matter on a course that is satisfactory and satisfactory in the sense that it will be conducted by a judge where, from my client's perspective, there could be no apprehension of bias.

…

RUSH: Would your Honour excuse me?

I am reminded, your Honour, that the injunctions were consented to in relation to that issue your Honour raises.

HIS HONOUR: Mr Stoljar told me last time that they were not.

RUSH: I think I appeared and I consented to them.

55 Thus it appears that, at that stage, the issue for Slater & Gordon was whether I should hear the transfer application, and it was apparently accepted that the interlocutory injunction would stand, having been granted substantially by consent though there was some dispute as to the “carve out”. Ultimately, over the opposition of BATAS and BATAL, I acceded to the application for an adjournment, although not for as long as Mr Rush had sought. I made directions for BATAS to serve an affidavit asserting and verifying its claim for privilege in respect of documents production of which had been sought by Slater & Gordon, and indicated that I would hear the disqualification application on 13 December.

56 On 12 December, Arnold Bloch Leibler forwarded to the other parties and my associate a letter indicating that in addition to the application for my disqualification, they had taken out a motion intending to seek leave for it to be heard and determined together with the disqualification application, seeking the discharge of the interlocutory injunction as varied in each proceeding on 29 November 2006, upon the twin grounds that the defendants had failed to disclose material facts concerning my prior involvement, and that if I acceded to the disqualification application it followed that the injunction should be set aside.

57 When the disqualification application came on for hearing before me on 13 December 2006, Mr Merkel QC explained what was sought as follows:

MERKEL: The events that have occurred have mushroomed into a matter of some complexity. All we are seeking to do before your Honour today is, firstly, to proceed with the application foreshadowed on the previous occasion that your Honour disqualify yourself from dealing with both matters. Of quite considerable significance is the other side of that application, which is that if we are correct in our contention that your Honour ought not sit in the matter, it would on our submission follow from the authorities that the orders made by your Honour on 29 November ought to be discharged.

…

Can I make it clear, so there is no doubt about what this case is truly about and why we are making this application, what the consequences would be if your Honour made these orders. Whatever may have been said or done in the past - and I do not wish to resile from that and we do not say anything has been improperly done by the clients we represent - as far as the future is concerned Slater and Gordon and Peter Gordon have only one interest in the information the subject of these proceedings, and that is to pursue an application to reopen the McCabe judgment.

There are three possibilities: one by an original proceeding in the Supreme Court, which is unlikely given her death. Secondly, to have the matter reopened in the Court of Appeal on the grounds that the Court of Appeal proceeded on a wrong basis as to the facts and was misled as to the facts relevant before it.

As an adjunct to that it is put by reason of the matters in the documents before your Honour she was denied a fair hearing in the Court of Appeal by reason of Mr Wilson’s intervention and the role he played in the Supreme Court which played no small part in the judgment.

There are serious questions about the jurisdiction of the Court of Appeal to reopen a matter where judgment has been entered. It may well be - and I have only come into this very recently - the only proper course is to apply for special leave in the High Court.

I make no qualms about it on the basis that the tobacco companies are seeking to repress. They revealed matters that are central to the issues in the McCabe litigation.

Having said that, what I would be proposing is we are not asking your Honour to discharge the orders on discretionary grounds and therefore lead to information that is sought to be unprotected. I hand up undertakings we would be proposing to offer to the court to ensure that the discharge of those orders will not result in any prejudice to the tobacco companies in respect of their information.

What we would be proposing, and what we are instructed to do, is to ensure that the status quo, whatever that might be, remain and that there will be no publication or dissemination of the information claimed to be protected. Your Honour will see we have put in square brackets that we will not publish and disseminate the information. I understand a statement of claim has been filed and there can be modifications to the schedules. If those are not substantial we do not have any qualms if it is the schedules which are now sought to be protected (reads undertakings).

We will be putting to your Honour whatever view was taken of the present matter which can be contended, we say it would be a brave contention to say anything in this court should have the consequence of preventing the executors of the McCabe estate from issuing proceedings in the High Court or the Supreme Court of Victoria, which are the only two courts in which the matter can be heard.

What we wish to say, and this being the first occasion on which we are able to be heard now having acquainted ourselves with the background facts as best we can, we say it is appropriate for your Honour to approach the matter in that way and to deal with the issues before you as a matter of substance. We say that certainly the issues as they will unfold, and the facts as I hope to outline them to your Honour, will demonstrate the validity of what I wish to say.

58 At this point, the following observations are apposite. First, the undertakings proffered specifically exclude from prohibited uses of the information its use for the purpose not only of defending both the Slater & Gordon proceedings, but also for the purposes of instituting proceedings in the Supreme Court of Victoria in either the trial or appellate division or in the High Court of Australia on behalf of the McCabe estate. Permitting such use would at least potentially destroy the privilege and confidentiality which the plaintiffs seek to assert in these proceedings. Indeed, cases such as Lord Ashburton v Pape and Goddard v Nationwide Building Society [1987] QB 670, suggest that it is for that very purpose that injunctions of the type sought by the plaintiffs may be granted. Unsurprisingly the undertakings were unacceptable to the plaintiffs. Secondly, no order presently in force or sought in these proceedings prohibits the McCabe estate from issuing proceedings in the Supreme Court of Victoria or in the High Court; the orders prevent on an interim basis the use of the information in which confidentiality is claimed, not the institution of proceedings.

59 Towards the end of the hearing, discussion returned to the context and purpose of the application, given that the final hearing had not been set down and was unlikely in the extreme to be set down before me, and that the only matter presently set down before me was the transfer application. Mr Merkel QC submitted that transfer application was entirely academic at this stage; that Slater and Gordon’s sole interest was to use the information as the basis for an application to re-open the McCabe judgment; that to do that, it was necessary to have the injunctive relief discharged; that the basis for the discharge was that the injunctions ought not have been granted because I was, as a matter of law, disqualified from dealing with the injunctive relief (on 23 November) or the return of the injunctive relief (on 29 November). In the course of the submissions in reply, the following transpired:

HIS HONOUR: … The only matter which, as things stand, I will be called on to judge is the cross vesting application. And Mr Smith's argument is why would any reasonable bystander apprehend that I would not be able to deal with an assessment of what is simply the balance of convenience of this case being heard in Victoria as against New South Wales? Why would anyone think that I might not deal with that impartially?

MERKEL: Your Honour, this whole application, as your Honour has seen since yesterday, has proceeded on the basis that the matter before your Honour is your Honour's disqualification on the basis that your Honour should not have had an involvement, should not have any further involvement in the issue of the injunctive relief. And your Honour, that requires a decision on our motion that discharges the injunction that was made.

…

HIS HONOUR: Is the transfer application pressed or not?

MERKEL: Your Honour, the transfer application is still one that is presently pursued, but --

HIS HONOUR: Is there any reason why I shouldn't hear it?

MERKEL: Yes, your Honour. Because we say that until next before next February we would be seeking to issue proceedings in another court and asking for the injunctive relief that your Honour granted to be discharged. That is the basis upon which we were here yesterday, and it's the very first thing I clarified before your Honour. We have a motion which is being heard by your Honour for the discharge of the order made on 2 November, and for one and a half days I addressed that motion.

HIS HONOUR: Mr Merkel, that application was made fairly and squarely not on the basis of the merits of the injunction, but on the basis that the judge who granted it however slightly disputed at the time was disqualified.

MERKEL: Yes. And that was not put on that basis and your Honour has heard not one submission

HIS HONOUR: I didn't apprehend and I am sure it's the case that that motion was not filed for the purpose of creating an issue that would not otherwise have to be addressed.

MERKEL: No, your Honour, it was not, it was not filed to create an issue. It was filed, your Honour, so that there would be a legal framework for dealing with the substantive issue. But the substantive issue I have addressed for one and a half days has not been whether your Honour should hear and determine an application next February. I did not mention the application next February. The transfer to the Supreme Court of Victoria is inconsistent with the course I outlined to your Honour yesterday, and it was never suggested that I was under some misconceived basis.

We have a motion before your Honour which your Honour late yesterday said may be considered in two parts; namely, whether you should be disqualified from hearing the matter and whether your Honour should discharge the order or what course would follow if your Honour is disqualified. But we have been here on the footing, your Honour, of a motion to discharge the injunctive relief, and we would offer undertakings, as I indicated, as a substitution for it.

That is the matter of substance which we say is before your Honour, and it is the matter of substance addressed by Mr Wheelahan, and we say that's the issue that we have asked your Honour to deal with.

I would say, your Honour, that at this stage the question of a transfer is something that I would have to look at as an independent question, but it's certainly not formed part of my submissions over the last one and a half days.

And can I say this, your Honour

HIS HONOUR: Yes, certainly.

MERKEL: On 23 and 29 November injunctive relief was granted against our clients without them being informed or aware of your Honour's prior association.

HIS HONOUR: I understand that.

MERKEL: They feel, your Honour, for reasons I have been endeavouring to labour over for one and a half days, that that should never have happened without the disclosure. They came back to your Honour, as was appropriate practice, on the first occasion they were aware of this issue arising. They have expended considerable energies, amongst other things, in having your Honour deal with this matter on the basis that the result should be the discharge of those injunctions. We say those injunctions should never have been granted.

They are our submissions, your Honour.

…

Quite frankly, your Honour, we would have been wasting your Honour's time if all we had been talking about was a hypothetical or potential application next February.

…

60 I have set this passage out at length, because it is of great importance in indicating the nature and purpose of the present applications as ultimately put. In contrast to when it had first been advanced by Mr Rush QC, when it was focussed on my hearing of the transfer application, both the question of a transfer application and any final hearing were peripheral to the application as ultimately put, the essential purpose of which was to procure the discharge of the interlocutory injunction granted on 29 November 2006, so as to permit the relevant information to be used for the purpose of the McCabe estate instituting proceedings in the Supreme Court of Victoria or the High Court of Australia. As Mr Merkel QC emphasised more than once, the second limb of the application – the setting aside of the interlocutory injunction – was a very important aspect of it. Indeed, it was the true purpose of the application.

61 Essentially, therefore, the present application is concerned with proceedings that have already been heard and determined (on an interlocutory basis), although they use as the springboard for that application the potential “further hearing or determining the proceedings”. Although I have some doubt as to whether an application to a judge at first instance to set aside interlocutory orders previously made by that judge is the appropriate means of procuring their setting aside for bias – ordinarily, an application for leave to appeal from the orders would seem the more appropriate course – in this case, as it has been fully argued and as Slater & Gordon were unaware of my having acted for BATAS when the orders were made – I propose to decide that issue.

Apprehended bias

62 Slater & Gordon eschewed any suggestion of actual bias, and founded their application on apprehended bias. The general principle relating to apprehended bias 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 [Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337, 344, [6]]. The decision whether a judicial officer might not bring an impartial mind to the resolution of an issue does not involve prediction: the question is one of possibility (albeit it real and not remote), not probability. Where the matter has already been decided, the test requires no conclusion about what factors actually influenced the outcome [Ebner, 345 [7]]. However, it is important that judicial officers discharge their duty to sit, and do not by acceding too readily to suggestions of appearance of bias encourage the belief that a party can, by making a disqualification application, obtain a hearing before a judge thought to be more likely to be favourable [Re JRL; Ex parte CJL (1986) 161 CLR 342, 352]. In Raybos Australia Ltd v Tectran Pty Ltd (1986) 6 NSWLR 272, the Court of Appeal emphasised that the duty of a judge to disqualify for proper reason was matched by an equal duty not to disqualify save for a proper reason. Thus, for a judge to be disqualified, there must be a “substantial basis” for the conclusion of apprehended bias [Ebner, 348 [19]]; the apprehension must be “firmly established” [JRL, 352; R v Commonwealth Conciliation & Arbitration Commission; Ex parte Angliss Group (1969) 122 CLR 546, 553–4]. The issue is not whether it would be better for another judge to hear the case, but whether the judge appointed to hear the matter might not bring an impartial and unprejudiced mind to its resolution [Aussie Airlines Pty Limited v Australian Airlines Pty Limited & Qantas Airlines Limited (1996) 65 FCR 215, 230G].

63 In considering whether a reasonable apprehension of bias has been established, it is necessary first to identify the facts, matters and circumstances by reason of which it is said that a judge might decide a case other than on its merits, and secondly to articulate the logical connection between those facts, matters and circumstances, and the apprehended deviation from the course of deciding the case on the merits [Ebner, 345, [8]; Smits v Roach (2006) 228 ALR 262, [53]-[54], [56]]. The hypothetical fair-minded observer is a lay person informed as to the relevant facts of the case, sufficiently knowledgeable to bring a rational and reasonable assessment to bear on the question of whether the judge might be biased, and having a basic knowledge of the nature of practice at the Bar - including that a barrister does not become identified with the client and is bound by rules of professional ethics, and that a judge is a professional who by training, tradition and oath is required to discard irrelevant, immaterial and prejudicial material and can be ordinarily assumed to comply with the judicial oath [Vakauta v Kelly (1989) 167 CLR 568, 584-5; Precision Fabrication Pty Ltd v Roadcon Pty Ltd (1991) 104 FLR 260, 264]; Aussie Airlines, 224; Taylor v Lawrence [2003] QB 528, 548 [61], 553F [69]; Johnson v Johnson (2000) 201 CLR 488, 493 [12]-[13]].

64 The facts, matters and circumstances which it was said might lead me to decide matters other than on their legal and factual merits may be summarised as follows:

· I acted for BATAS in the Cannar proceedings as set out above. I was briefed with a substantial amount of information amounting to some 800 pages in connection with that matter, the identity of which cannot be known because of legal professional privilege.

· The document management policy was at the heart of the Cannar proceedings, and the intervention of BATAS in that proceeding was to ensure that the document management policy would remain concealed. In substance, though not in terms, my brief was to achieve that result, by preserving the confidentiality and privilege of information that included information the subject of the present proceeding.

· BATAS’ document management policy was also a central issue in the McCabe proceedings, resulting in the judgment of Eames J striking out the defence because that policy had the effect of denying the plaintiff a fair trial.

· The Victorian Court of Appeal set aside the judgment of Eames J on the basis of facts which (so it is said) the information the subject of the present proceedings shows not only to have been incorrect, but to have involved a fraud on the court or a perversion of the course of justice. Slater & Gordon on behalf of the McCabe estate wish to reopen the McCabe litigation for that reason, using the relevant information for that purpose.

· In the present proceedings, the purpose of BATAS and BATAL is to continue the concealment of the document management policy, and the ultimate issue will be whether communications and documents that were prima facie privileged were disentitled to privilege by reason of being made in pursuance of an iniquity, namely the document management policy and its concealment in order to suppress relevant evidence for the purpose of perpetuating a miscarriage of justice.

65 As to the logical connection between those facts, matters and circumstances and the feared deviation from the course of deciding the case on its merits, the argument, as I understand it, proceeds as follows:

1. In these proceedings I would be asked by BATAS to decide as judge what I had been briefed by BATAS to advocate as counsel, in particular to protect the confidentiality and privilege of the document management policy and to reject any allegation of iniquity. As in the Cannar proceedings the submissions that I signed contended that the relevant information and documents were privileged, it was implicit that I had adopted a position that they were not disentitled to privilege or confidentiality by reason of iniquity. A reasonable bystander might therefore think that I had prejudged the iniquity issue (“the prejudgment point”).

3. Moreover, as in the course of conducting BATAS’ case, I was briefed with a substantial amount of material, the content of which cannot now be known because of BATAS’ legal professional privilege, a reasonable bystander might think that having been armed, in order to advocate for BATAS the cause which I would now be called upon to judge, with privileged information not now available to BATAS’ opponents, I might be influenced, even if unintentionally, by material not in evidence (“the extraneous material point”).

66 This raises for consideration the circumstances in which a prior professional relationship between a lawyer and client will disqualify the lawyer, on becoming a judge, from sitting in proceedings to which the former client is a party. A review of the cases reveals much more about the circumstances in which such a relationship is not disqualifying than when it is.

67 The starting point is Thellusson v Lord Rendlesham (1859) 7 HLC 429, in which the House of Lords accepted that counsel in a cause, upon being appointed to the bench, was not thereby precluded from taking part in the hearing and discussion of that case, but might properly decline to do so unless it would entail great inconvenience or expense. Lord St Leonards had been counsel is various branches of the case not in dispute in the House of Lords, but did not conceive that this absolved him from doing his duty in participating in the hearing. Lord Chelmsford LC said there was no doubt about the propriety of that course, but that he had himself been counsel in the very case the decision which was now under appeal (and had settled the Notice of Appeal) and should therefore take no part in the judgment, merely sitting but delivering no opinion. Lord Brougham said that it should not be assumed that having been counsel in a cause operated as a disqualification to prevent the same person upon appointment to the bench taking part in the decision of that cause, as such a rule might in some circumstances produce delay and expense and even an absolute denial of justice. Lord Chelmsford LC rejoined that he did not suggest that he laboured under any disqualification, which would put the matter much too strongly, and had he been the only judge available would have heard the case, but as there were others available abstained from participation, as a matter of personal feeling rather than on account of any disqualification. The case therefore suggests that even having been counsel in the very case in suit is not disqualifying, though discretion might suggest that the judge would not sit. However, as has been pointed out by Wells J in R v Moss; Ex parte Mancini (1982) 29 SASR 385 (at 428), “the standards of reason and right conduct in public affairs have undergone a substantial – sometimes even a dramatic – metamorphosis” since then; see also per Mildren J in Precision Fabrication v Roadcon, 264.

68 In R v Judge Russell; Ex parte Reid (1984) 35 SASR 417, the Full Court of the Supreme Court of South Australia (King CJ, Waters and Mohr JJ) held that no fair-minded person would have reasonable grounds for apprehending that, because a judge had in the course of his professional duties as a barrister acted as counsel for the particular employer, he would on appointment to judicial office in the Industrial Court be unable to bring a fair and unprejudiced mind to the decision of matters involving that employer. There was no suggestion that the judge had as counsel advised on or advocated any issue which arose in the instant proceedings.

· Even having given advice to the former client, present litigant on an issue that arises in the matter before the court does not generally give rise to such an apprehension, because a judge can be expected to approach afresh with an open mind from the bench issues on which he or she has previously advised, illuminated by evidence and argument [Polites; Kartinyeri; A1 v King].

· Nor does having advocated forensically a position on such an issue generally give rise to such an apprehension [Gascor]; indeed the position is a fortiori having given advice, because whereas giving advice involves counsel in reaching and expressing his or her own opinion on the issue, proper advocacy involves no more than presenting a tenable argument, which does not necessarily reflect counsel’s own opinion on the issue; advice therefore involves far greater potential for prejudgment than advocacy.

· However, if the judge may be considered to have an interest in the outcome – for example, if the appropriateness of the advice is in issue, or if it will be necessary to decide whether a course of conduct advised by the judge as counsel was legally effective or appropriate - a reasonable apprehension of bias will arise [Polites; A1 v King].

· Moreover, if the judge as counsel may reasonably be supposed to have gained special knowledge of the facts through prior involvement – including through privileged material in a brief – that may found a reasonable apprehension that as judge he or she may have in mind extraneous material not known to at least one party [S&R Investments], because a lay observer may reasonably think that a judge might not be able to put such information out of his or her mind.

The prejudgment point

86 As to the submission that a reasonable bystander might think that I had prejudged the iniquity issue, in Cannar the issue was not whether or not the documents in question were deprived of privilege or confidentiality by iniquity, but whether the use that had been made of documents which had been held (by the Victorian Court of Appeal) to be privileged rendered the proceedings an abuse of process. That is a different issue from whether or not the documents were disentitled to privilege or confidentiality by reason of iniquity. BATAS’ case in Cannar, as stated in the submissions that I settled, commenced from the proposition that the Victorian Court of Appeal had held that the documents were privileged, and had made orders to endeavour to remedy the consequences of what it held to be the erroneous first instance decision that there had been a waiver, and which upheld the claim for privilege. There is nothing in the submissions that I settled, nor in the judgment of Bell J, to suggest that the iniquity issue was raised in the Cannar proceedings, or that I was called upon to consider, advise on, or advocate a position in respect of it. Just because iniquity may be a reason for overriding a claim of privilege or confidentiality does not mean that it is necessarily considered or addressed when such a claim is advanced, particularly when a Court of Appeal had already upheld the claim for privilege. I do not accept that the iniquity issue was a live one in Cannar.

87 Iniquity does not appear to have been raised in McCabe: Eames J’s first instance decision to admit the documents despite the claim for privilege was founded not on iniquity but on waiver, and the Victorian Court of Appeal’s decision was that his Honour had erred in finding waiver.

88 In the present proceedings, the iniquity issue would arise in a different evidentiary context, illuminated by arguments that were not raised or addressed in Cannar. Accordingly, I do not accept that there is a substantial overlap between the issue in respect of which I was engaged in Cannar and what will be apparently the main issue in these proceedings, namely, iniquity – or, as was submitted for Slater & Gordon, that “there is simply no difference in the substantive privilege issues arising in this proceeding and the substantive privilege issues arising in Cannar and the substantive issues that arose in McCabe”. In McCabe, the privilege issue was one of waiver, not iniquity. In Cannar, there was no substantive privilege issue; the issue being whether BATAS’ apparently already established claims for privilege and confidentiality were a ground on which it might be permitted to intervene, and whether the use made of BATAS’ documents in respect of which that privilege and confidence was asserted, to procure the issue of the letter of request and the order for examination, rendered the proceedings an abuse of process. There was just no live issue about whether the documents were entitled to privilege or not, that issue having apparently been resolved by the Victorian Court of Appeal.

89 It follows that I do not accept that there could be a reasonable apprehension that I might have prejudged the iniquity issue. In my judgment, the case is similar to but a fortiori the decision in A1 v King, since in that case there was a common defect in the notice the subject of the advice and the notice the subject of the proceedings, whereas in this case iniquity just did not arise in Cannar.

The pre-disposition point

90 The submission that a reasonable bystander might think that, having advocated for BATAS the cause which I would now be called upon to judge, I might be predisposed to find for BATAS, particularly when it would be argued that BATAS’ cause (and thus the cause that I advocated) was an improper one, on account of a natural disinclination to find that a cause in which one had been engaged involved iniquity, involves two elements.

91 Insofar as it was put that I was engaged as counsel to achieve the very same purpose now sought to be achieved in these proceedings before me now, no longer as counsel but as judge, that is no more than a submission that having once advocated a cause, counsel on becoming a judge is disqualified from deciding it. Such a proposition would assume that having made submissions on an issue as counsel, a judge, after hearing evidence and argument, would be unable to determine impartially the issue that those submissions addressed. Thellusson v Lord Rendlesham, Gascor and A1 v King show that proposition to be incorrect; although the last of those cases concerned advice and not advocacy, as I have explained there is even less reason to apprehend prejudgment in the case of advocacy as distinct from advice, because adoption of a personal position by counsel is implicit in advice but not in advocacy, and the lay observer is to be taken to understand that.

92 Nonetheless, there is force in the submission that the reasonable bystander might think that, having advocated BATAS’ cause in that case through the written submissions, I was (even if unwittingly) involved in what Slater & Gordon propose to contend was an iniquitous course of conduct involving the suppression of relevant evidence for the purpose of perpetuating a miscarriage of justice, and I might be naturally predisposed on that account against finding iniquity, since it might be embarrassing to conclude that the cause which one was advocating was, knowingly or not, an iniquitous one. In that sense, it could be said that I have an interest in the determination of the iniquity issue.

93 Although this does not fall precisely within the circumstances in which it was said in Polites that a judge should not sit – namely that a former legal advisor should not sit as a judge in a case if the advice went beyond an exposition of law and advised an adoption of a course of conduct to advance the client’s interests, the efficacy, wisdom reasonableness or appropriateness of which would be in issue – because I am far from satisfied that what happened in Cannar will be a relevant issue in the present proceedings - nonetheless some might reasonably think that I had been sufficiently connected with an endeavour to preserve the confidentiality of the document management policy that it would be difficult for me – or at least, more difficult for me than it might be for others who had been not so involved – to conclude that the document management policy, or maintenance of confidentiality in respect of it, involved iniquity.

94 It is to be borne in mind that the test is a relatively undemanding “double might” one, requiring only that the reasonable lay observer might think that the judge might not bring an impartial mind to the matter and decide the case other than on its legal and factual merits (although this requires a real and not remote danger that the judge would do so [Locabail (UK) Ltd v Bayfield Properties Limited [2000] 2 WLR 870, 883 (CA)]. I have come to the conclusion that in this case a reasonable bystander might think that there was a real danger that I might be influenced, even unintentionally, by a natural inclination to avoid a conclusion that a cause with which I had been professionally associated, however briefly, was an iniquitous one, and that I should therefore not sit on a proceeding which would require me to consider the iniquity issue.

The extraneous material point

95 I am reinforced in that conclusion by the circumstance that, despite my assertions that I have no recollection of what comprised the 800 or so odd pages in my brief from Corrs, a lay observer might reasonably wonder whether I had been privy to special or extraneous material, which because it is protected by legal professional privilege cannot be known to the other parties, by which attitudes to the document management policy might consciously or subconsciously have been shaped or influenced, even if I did not now recall the detail. Although the observer is to be taken to know that judges are frequently expected to ignore inadmissible material of which they may gain knowledge, nonetheless a fair-minded lay observer might entertain a doubt as to whether my approach to and decision on the iniquity issue would be based only upon the evidence in open court, where I had apparently had access to a substantial amount of material in respect of which a claim for privilege was maintained, the detail of which could be known only to BATAS and not to Slater & Gordon, which circumstance might be perceived to advantage BATAS.

Does apprehended bias disqualify from interlocutory applications?

96 Accordingly, I have concluded that, objection having been taken, I should not sit on a proceeding in this matter in which the iniquity issue would require consideration. However, that does not mean that I am disqualified from all interlocutory aspects of the case.

97 As Mr Smith SC submitted, the question of apprehended bias must be considered in the context of the issues that the court has to decide. Thus, for example, in Livesey v NSW Bar Association (1983) 151 CLR 288, the test derived from the authorities was said to be that a judge should not hear a case if in all the circumstances the parties or the public might entertain a reasonable apprehension that he or she might not bring an impartial or unprejudiced mind to the resolution of the question involved in it [Re JRL, 349 (Gibbs CJ), 351 (Mason J)]. And in Aussie Airlines, where what was involved was the hearing of two preliminary questions, the judge identified the issue on the disqualification application as being whether the parties or the public might entertain a reasonable apprehension that as the trial judge he might not bring an impartial and unprejudiced mind to the resolution of the questions before him in the present case. These cases show that the question of apprehension of bias is inextricably interwoven with identification of the issues that the judge is called upon to decide. Accordingly, attention needs to be focussed separately on (1) the issues that may arise on the final hearing of the matter; (2) the issues that arose in the proceedings on 29 November 2006; and (3) the issues on the transfer application set down for hearing before me on 26 February 2007.

The final hearing

98 At present, although the pleadings have not yet been completed so as to distil the issues, it seems likely that the iniquity issue will be the major issue on the final hearing. As the final hearing has not been set down before me, insofar as it relates to the final hearing, the application for my disqualification from it is premature, and it is unnecessary and inappropriate that I formally disqualify myself at this stage from a hearing that has not yet been and probably never will be allocated to me. But I will indicate that, assuming that the iniquity issue will be raised, I would not sit on the final hearing.

The proceedings on 29 November 2006

99 However, as I have explained, it does not follow that I am disqualified from hearing every interlocutory aspect of the case, because the question of apprehension of bias is irretrievably linked to the issues for decision. While I do not suggest that the general principle is any different when it comes to interlocutory applications, it is necessary to identify what issues arise for resolution on an interlocutory application before deciding whether there is a reasonable apprehension that the judge will not decide those issues on their merits so as to be disqualified from determining that application. In this case, I have found that there is such an apprehension so far as the “iniquity issue” is concerned. I am prepared to accept that it would be inappropriate for me to hear a contested interlocutory application in which it was necessary to make findings, even on an interlocutory basis, about the “iniquity issue”. However, in the Slater & Gordon proceedings, no occasion for me to do so has yet arisen.

100 As Mr Merkel QC made clear, the focus and purpose of the present application is ultimately to obtain the discharge of the injunction made on 29 November. It is therefore necessary to understand just what was in issue on that date. Both parties came to court with competing sets of short minutes. It will be remembered that on 23 November, when Slater & Gordon were first before the court, Mr Rush QC on their behalf offered to submit to the injunctive relief sought in the summons until Wednesday 29 November; I was not required to decide any issue in that respect. On 29 November, the parties presented competing short minutes, and on the question of the interim injunctive regime, it was common ground that there should be an injunction until further order restraining Slater & Gordon from publishing, disseminating or using the relevant information, except for the purpose of defending the proceedings; the only dispute was whether there should be an additional exception to permit use of the relevant information the subject of one proceeding for the defence of the other proceeding, and/or to bring a cross claim. That issue fell for decision in the context that it was common ground that there would be an interlocutory injunction. Its resolution depended on the effect of cases such as Calcraft v Guest, and the legal consequences of documents for which privilege or confidence was claimed being used in other proceedings. The issue for decision was a narrow one, as to the scope of the “carve out”; it involved no aspect of the iniquity issue.

101 The present application, having as its fundamental purpose the discharge of the interlocutory injunction of 29 November, rather overlooks that the injunction was originally offered on behalf of Slater & Gordon by Mr Rush QC on 23 November pending an adjournment, and that the dispute on 29 November was not as to whether there should be an injunction, but a very limited dispute as to the scope of the “carve out”. Attempts were made to marginalise the significance of the position adopted on behalf of Slater & Gordon on 23 and 29 November. But I am unable to accept that – as it was put - Slater & Gordon had not “the faintest idea that they were being heard on any substantive issue on 29 November”. On 23 November they were represented by Mr Rush QC, who as I have said has a lengthy history in the proceedings, and consented to an injunction until 29 November; on 29 November, having determined to make a transfer application, they proposed short minutes consenting to an interlocutory injunction, and debated only the extent of the “carve out” from the prohibition on use of the information. The injunctions pronounced on 29 November 2006, which Slater & Gordon submit should never have been granted, were, with the exception of the extent of the “carve out”, granted in accordance with the proposals of all parties, including Slater & Gordon. It cannot be overlooked that the short minutes proposed by Slater & Gordon proposed such an injunction.

102 In my view, no issue arose for decision on 29 November in respect of which a reasonable lay observer might conclude that I might resolve it other than on its merits. The only dispute was the extent of the “carve out”, and the iniquity issue did not arise. It follows that in my opinion I was not disqualified by apprehended bias from resolving the very narrow dispute concerning the scope of the interlocutory injunction that was before me on 29 November.

103 I am reinforced in that conclusion by the circumstance that, notwithstanding my disclosure on 23 November, no objection was taken and no further inquiry made. It will be remembered that in the presence of Mr Rush QC on 23 November I indicated (1) that I had already made “a whole lot of disclosures” in the proceedings about various relationships with various parties, which can only have referred to one or other of the tobacco companies, or one or other of the media companies; (2) that Mr Lewis, a partner in Slater & Gordon who had now become a party for the first time, was well known to me; and (3) I was similarly acquainted with Mr Clark, a partner in Clayton Utz who had been the nominated recipient of subpoenas in the proceedings. Although it seems that Slater & Gordon subsequently made further inquiries – after 29 November - of the other parties as to what I had disclosed in respect of Mr Clark, no further inquiry was made about the “whole lot of disclosures” to which I had referred. The proceedings on 29 and 30 November and 1 December involved no further reference to those matters until, at their very conclusion on 1 December, Mr Stoljar raised my connection with Mr Clark, to place on record that Slater & Gordon desired to give some further consideration to the question and reserved their position.

104 Once the reference on 23 November to “a whole lot” of previous disclosures about relationships with various parties had been made, if Slater & Gordon thought that any relationship I might have had with any party was potentially material for the purposes of the applications then before the Court, the time to seek further information was then. It seems to me that the absence of further inquiry at that point illustrates that the issues with which I was then dealing were of a such limited scope that, whatever might be the position on the major ultimate issues in the case, any past associations with any party were not seen as potentially material for then present interlocutory purposes. I do not suggest that this involved a waiver forever of any objection on the basis of those past associations, but it confirms my view that neither the parties nor the public would have apprehended that any past association I might have had with any party might influence my decision on the limited issues then before the Court.

The transfer application

105 There remains for consideration the one matter that is set down for hearing before me, namely the transfer motion on 26 February 2007.

106 On the transfer motion, the essential issue is which court – the Supreme Court of Victoria or the Supreme Court of New South Wales – is the more appropriate forum for hearing the present proceedings. The hearing of the transfer motion will not require resolution on an interlocutory basis or otherwise of the iniquity issue. Assuming, as I have explained, that some might not unreasonably think that I would prefer the iniquity issue to be resolved one way rather than the other, the only “logical” theory that could be advanced for a view that I might not decide the transfer application on its merits is that I might think that the iniquity issue would more likely be resolved favourably to BATAS in New South Wales than in Victoria. There is simply no basis for any such supposition, all the moreso as I have absolutely no way of knowing what judge or judges in New South Wales and Victoria might ultimately be called on to decide that issue. Such a suggestion would be fanciful, not reasonable; and I hasten to add that it was not one advanced by Mr Merkel QC.

107 Accordingly, any apprehension that I might not decide which was the more appropriate or convenient forum on the merits, because of my previous brief from BATAS, would be fanciful, not reasonable, and I do not consider that I am disqualified by apprehended bias from hearing the transfer application, if it is to proceed, on 26 February 2007.

The allegation of material non-disclosure

108 Slater & Gordon also contended that the orders of 29 November should be set aside on the further basis that there had been material non-disclosures, at least by BATAS, of my prior involvement. They submitted that it was incumbent on BATAS to make a full disclosure of my prior involvement, and pointed in particular to Corrs’ response to a request for details of the disclosure I had made about Mr Clarke of Clayton Utz, in which response Corrs referred only to what I had said about Mr Clarke, and not to my disclosure of having previously acted for BATAS.

109 On 23 November, having mentioned that I had made a number of disclosures of relationships with parties in the proceedings, I referred to my connection with a Slater & Gordon partner, who was then instructing, and mentioned my earlier disclosure about a Clayton Utz partner. On 1 December, Mr Stoljar raised the disclosure I had made about my connection with the Clayton Utz partner, and said that Slater & Gordon reserved their rights in that respect. By a facsimile sent on 1 December at 6:25 pm, Arnold Bloch Leibler sought from the solicitors for BATAS and the solicitors for BATAL details of my disclosure about the Clayton Utz partner, and requested a copy of the transcripts in the Fairfax proceedings in which I had made the disclosure; the request did not refer to my other disclosures. On Monday morning 4 December at 8:29 am, Corrs on behalf of BATAS responded to the request, and provided the transcript that had been requested. When the disqualification application was before the court on 7 December, Corrs produced the written submissions from Cannar, in response to a notice to produce which had been served only on or about 6 December, and provided at the earliest reasonable opportunity additional information to supplement the disclosure that I had made in writing.

110 In my view, BATAS responded with alacrity each time there was a request for information about my involvement. A request for information about my connection with Mr Clark did not require a response that referred to my other disclosures. I do not accept that, as at 29 November, there was any material non-disclosure, nor that any further disclosure was called for from those acting for BATAS – all the moreso given that the proceedings that day were not ex parte, and that the issues were limited in the way that I have described.

Conclusion

111 My conclusions may be summarised as follows:

112 I do not accept the submission that there is no difference between the substantive privilege issues that will arise in this proceeding, the issues that arose in Cannar, and those that arose in McCabe. In McCabe, the privilege issue was one of waiver, not iniquity. In Cannar, there was no substantive privilege issue, the issue being whether BATAS’ apparently already established claims for privilege and confidentiality were a ground on which it might be permitted to intervene, and whether the use made of BATAS’ documents in respect of which that privilege and confidence was asserted, to procure the issue of the letter of request and the order for examination, rendered the proceeding an abuse of process. There was simply no issue about whether the documents were entitled to privilege or not, that issue having apparently been resolved by the Victorian Court of Appeal. It follows that I do not accept that there could be a reasonable apprehension that I might have prejudged the iniquity issue; iniquity did not arise in Cannar.

113 However, I have come to the conclusion that a reasonable bystander might think that there was a real danger that I might be influenced, even unintentionally, by a natural inclination to avoid a conclusion that a cause with which I had been professionally associated, however briefly, was an iniquitous one, and that I should therefore not sit on a proceeding which would require me to consider the iniquity issue. I am reinforced in that conclusion by the circumstance that, despite my assertions that I have no recollection of what comprised the 800 or so odd pages in my brief from Corrs, a lay observer might reasonably wonder whether I had been privy to special or extraneous material, which because it is protected by legal professional privilege cannot be known to the other parties, by which attitudes to the document management policy might consciously or subconsciously have been shaped or influenced, even if I did not now recall the detail.

114 Accordingly, I have concluded that, objection having been taken, I should not sit on a proceeding in this matter in which the iniquity issue would require consideration. However, that does not mean that I am disqualified from all interlocutory aspects of the case. The question of apprehended bias must be considered in the context of the issues that the court has to decide.

115 Insofar as it relates to the final hearing, the application for disqualification is premature, but I will indicate that, assuming that the iniquity issue will be raised, I would not sit on the final hearing. I am also prepared to accept that it would be inappropriate for me to hear a contested interlocutory application in which it was necessary to make findings, even on an interlocutory basis, about the iniquity issue.

116 However, no issue arose for decision on 29 November in respect of which a reasonable lay observer might conclude that I might resolve it other than on its merits: the only dispute was the extent of the “carve out”, and the iniquity issue did not arise. It follows that I was not disqualified by apprehended bias from resolving the very narrow dispute concerning the scope of the interlocutory injunction that was before me on 29 November. I am reinforced in that conclusion by the circumstance that, notwithstanding my non-specific disclosure on 23 November, no objection was taken and no further inquiry made.

117 The iniquity issue will not arise on the transfer application, and any apprehension that, by reason of my previous brief from BATAS, I might not decide which was the more appropriate or convenient forum on the merits, would be fanciful, not reasonable, and I do not consider that I am disqualified by apprehended bias from hearing the transfer application, if it is to proceed, on 26 February 2007.

118 I do not accept that, as at 29 November, there was any material non-disclosure, nor that any further disclosure was called for from those acting for BATAS – all the moreso given that the proceedings that day were not ex parte, and that the issues were limited in the way that I have described.

119 Accordingly, I indicate that I would not sit on a hearing in these proceedings in which there might be an issue as to the alleged iniquity of the document management policy or attempts to preserve its confidentiality. I decline to disqualify myself from the hearing of the transfer application set down for 26 February 2007. I hold that I was not disqualified by apprehended bias from hearing and determining the proceedings on 29 November 2006, and further that the orders made on 29 November 2006 should not be set aside for non-disclosure.

120 As a consequence, it would seem that I should dismiss the defendant’s motion filed in each proceeding on 12 December 2006, but I shall defer doing so until 26 February lest any party wish to make further submissions in that respect. The question of costs may also then be addressed. The proceedings are stood over to 26 February 2007 at 10.30.

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26/02/2007 - Alteration to j'ment date: 2006 changed to 2007 - Paragraph(s) Date

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Citations

British American Tobacco Australia Ltd v Gordon [2007] NSWSC 109

Most Recent Citation

Minter Ellison v Lauro (No 2) [2014] SADC 126

Cases Citing This Decision

54

Kostov v Director of Public Prosecutions (NSW) (No 2) [2020] NSWCA 94

Cases Cited

24

Statutory Material Cited

2

McCabe v British American Tobacco Australia Services Ltd [2002] VSC 73

British American Tobacco Australia Services Ltd v Cowell [2002] VSCA 197

Cited Sections

CITATION:	British American Tobacco Australia Ltd v Peter Gordon & Anor [2007] NSWSC 109 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	13-14 December 2006
JUDGMENT DATE :	22 February 2007
JURISDICTION:	Equity Division
JUDGMENT OF:	Brereton J
DECISION:	Indication that judge would not sit on hearing in which there might be issue as to alleged iniquity. Decline to disqualify from hearing of transfer application. Held that not disqualified by apprehended bias from hearing and determining interlocutory proceedings on 29 November 2006, and further that orders made on 29 November 2006 should not be set aside for non-disclosure.
CATCHWORDS:	COURTS AND JUDGES – Disqualification – Bias – Judge in own cause – Procedure – whether notice of motion for disqualification cognisable – whether notice of motion necessary – held, unnecessary - Apprehended bias – whether prior professional relationship between lawyer and client will disqualify lawyer, on becoming a judge, from sitting in proceedings to which former client is a party – whether reasonable apprehension of prejudgment of an issue – whether reasonable apprehension that judge may be predisposed to a view of the issue because of “interest” in propriety of past involvement – whether reasonable apprehension that judge may decide issue influenced by extraneous material previously briefed and subject to legal professional privilege of former client – whether reasonable apprehension of bias on an issue in case disqualifies judge from hearing interlocutory applications in which that issue will not arise – held, it does not.
LEGISLATION CITED:	(NSW) Jurisdiction of Courts (Cross Vesting) Act 1987 (USA) Racketeer Influenced & Corrupt Organization Statute 1961
CASES CITED:	A1 v King QC (FCA, Merkel J, 31 May 1996, BC 9602233) Application of Cannar; Re Eubanks [2003] NSWSC 802 Ashburton v Pape [1913] 2 Ch 469 Aussie Airlines Pty Limited v Australian Airlines Pty Limited & Qantas Airlines Limited (1996) 65 FCR 215 Bainton v Rajski (1992) 29 NSWLR 539 Barton v Walker [1979] 2 NSWLR 740 British American Tobacco Australia Services Limited v Cowell [2003] VSCA 43 (23 April 2003) British American Tobacco Australia Services Limited v John Fairfax Publications & Anor [2006] NSWSC 1175 British American Tobacco Australia Services Limited v John Fairfax Publications & Anor [2006] NSWSC 1197 British American Tobacco Australia Services Limited v John Fairfax Publications & Anor [2006] NSWSC 1328 British American Tobacco Australia Services Ltd v Cowell [2002] VSCA 197 Calcraft v Guest [1898] 1 QB 759 Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 Gascor t/as Gas & Fuel v Ellicott, Esso Australia Resource Ltd & BHP Petroleum (NW Shelf) Pty Ltd [1997] 1 VR 332 Goddard v Nationwide Building Society [1987] QB 670 J Aron Corp v Newmont Yandal Operations Pty Ltd [2006] NSWSC 720 Johnson v Johnson (2000) 201 CLR 488 Kartinyeri v Commonwealth of Australia [1998] HCA 52 Livesey v NSW Bar Association (1983) 151 CLR 288 Locabail (UK) Ltd v Bayfield Properties Limited [2000] 2 WLR 870, 883 (CA) McCabe v British American Tobacco Australia Services Ltd [2002] VSC 73 McCabe v British American Tobacco Australia Services Ltd [2002] VSC 150 McCabe v British American Tobacco Australia Services Ltd; sub nom [2002] VSC 172 McCabe v British American Tobacco Australia Services Ltd; sub nom [2002] VSC 112 Precision Fabrication Pty Ltd v Roadcon Pty Ltd (1991) 104 FLR 260 R v Commonwealth Conciliation & Arbitration Commisison; Ex parte Angliss Group (1969) 122 CLR 546 R v Garrett (1988) 50 SASR 392 R v Judge Russell; Ex parte Reid (1984) 35 SASR 417 R v Moss; Ex parte Mancini (1982) 29 SASR 385 Raybos Australia Ltd v Tectran Pty Ltd (1986) 6 NSWLR 272 Re JRL; Ex parte CJL (1986) 161 CLR 342 Re Polites; Ex parte The Hoyts Corporation Pty Ltd (1991) 173 CLR 78 S&M Motor Repairs Pty Ltd v Caltex Oil (Australia) Pty Ltd (1998) 12 NSWLR 358 S&R Investments Pty Ltd v Minister for Planning [2001] WASC 255 Smits v Roach (2006) 228 ALR 262 Taylor v Lawrence [2003] QB 528 Thellusson v Lord Rendlesham (1859) 7 HLC 429, 11 ER 172 Vakauta v Kelly (1989) 167 CLR 568 Western Australia v Watson [1990] WAR 248
PARTIES:	British American Tobacco Australia Ltd (plaintiff 5898/06) British American Tobacco Australia Services Ltd (plaintiff 5940/06) Peter Gordon (first defendant 5898/06) Slater & Gordon Pty Ltd (second defendant 5898/06) Slater & Gordon Pty Ltd t/a Slater & Gordon Lawyers (defendant 5940/06)
FILE NUMBER(S):	SC 5898/06; 5940/06
COUNSEL:	R M Smith SC w GKJ Rich & JS Cooke (plaintiff 5898/06) MF Wheelahan SC w RS Hollo & MJ O'Meara (plaintiff 5940/06) R Merkel QC w JT Rush QC, J Stoljar & CJ Horan (defendants)
SOLICITORS:	Baker McKenzie (plaintiff 5898/06) Corrs Chambers Westgarth (plaintiff 5940/06) Arnold Bloch Leibler (defendants)