British American Tobacco Australia Services Limited v Laurie

[2010] HCATrans 223

[2010] HCATrans 223

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S138 of 2010

B e t w e e n -

BRITISH AMERICAN TOBACCO AUSTRALIA SERVICES LIMITED (ACN 004 069 649)

Appellant

and

CLAUDIA JEAN LAURIE (AS ADMINISTRATRIX OF THE ESTATE OF DONALD HENRY LAURIE AND ON HER OWN BEHALF)

First Respondent

AMACA PTY LIMITED (UNDER NSW EXTERNAL ADMINISTRATION)

Second Respondent

COMMONWEALTH OF AUSTRALIA

Third Respondent

JUDGE JAMES CURTIS

Fourth Respondent

FRENCH CJ
GUMMOW J
HEYDON J
KIEFEL J
BELL J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 1 SEPTEMBER 2010, AT 10.19 AM

Copyright in the High Court of Australia

__________________

MR J.R. SACKAR, QC:   If the Court pleases, I appear with MR P.J. BRERETON, SC and MR M.J. O’MEARA for the appellant. (instructed by Corrs Chambers Westgarth Lawyers)

MR D.F. JACKSON, QC:   If the Court pleases, I appear with my learned friends, MR B.F. QUINN and MR S. TZOUGANATOS, for the first respondent.  (instructed by Turner Freeman Lawyers)

FRENCH CJ:   Thank you.  There are submitting appearances, I note, for the second to fourth respondents.  Yes, Mr Sackar.

MR SACKAR:   If the Court pleases.  May I briefly add to our written submissions on at least three topics.  The first one I want to address is the question of the test to be employed in a prejudgment case.  There is no doubt in this case and there is no doubt in the authorities of this Court that what might be colloquially described as the “two might” test is the appropriate yardstick against which to look at the question of whether or not prejudgment has occurred.

In the prejudgment context we say that that translates into this, that one needs to inquire whether the lay observer might reasonably apprehend that the decision‑maker might not be open to persuasion.  The “open to persuasion” test which is the test enunciated in the decision of this Court in Jia is one to which I will return shortly. 

In particular, reference here though, we say that the majority of the Court of Appeal in purporting to apply that test, because they certainly made reference to Livesey and other cases in this Court where the “two might” test, as it were, has been enunciated, attributed excessive legal knowledge and sophistication to what on any view of the authority is a lay but intelligent and informed observer.

The emphasis is on the notion of lay because the observer is not a lawyer, the observer is not a law student, and the observer is certainly not a bush lawyer and so consequently, when one looks at the majority of the Court of Appeal, one sees both in the judgment of Justice Tobias and that of Justice Basten, we say, an excessive emphasis upon the technicalities and minutiae of matters such as the distinction between interlocutory and final or the distinction between direct and hearsay evidence and, in Justice Basten’s case, the overlay of some understanding or information somehow gleaned by the lay observer about the statutory interstices of the Dust Diseases Tribunal leading to the conclusions his Honours came to.

Can I please take your Honours briefly, first of all to Justice Tobias, at appeal book 363 at paragraph 113.  His Honour notes that he rejected that as a submission and over the page he then accepts that the finding of Judge Curtis was neither provisional or tentative, a matter to which I will return shortly.  He then in 114 explains that part of the judge’s reasoning was, of course, the cross‑examination which the judge, albeit an interlocutory proceeding, permitted of Mr Gulson, who was common both to the Mowbray proceedings that Judge Curtis decided and the Laurie proceedings that we are here concerned with.  He then in 115 says:

In my view, and consistent with the remarks of the justices of the High Court in Johnson and Concrete . . . the hypothetical fair‑minded observer would have some understanding of the nature of the application with which the primary judge was dealing and, in particular, an understanding of the fact that hearsay evidence in such an application was admissible whereas in other circumstances it was not and that his Honour’s findings were only for the limited purpose of allowing inspection of documents which would otherwise be the subject of client legal privilege.  That observer would thus be acquainted with the difference between an interlocutory proceeding and a trial and, in particular, of the significant difference between the evidence admissible in the former as distinct from that admissible in the latter.  That observer would also understand that, perhaps for perfectly proper tactical reasons, BATAS had decided not to call evidence in the interlocutory proceedings to counter that of Mr Gulson which it might well call at trial, thus putting a completely different complexion on the issue of BATAS’ document management policies.  The primary judge expressly acknowledged as much in his reasons in Mowbray which, in my view, would not be lost on the reasonable fair‑minded lay observer.

Accordingly, in the foregoing circumstances, in my opinion such an observer would not reasonably apprehend that his Honour might not bring an impartial and unprejudiced mind to the issue with respect to BATAS’ document management policies once all –

and I emphasise the word “admissible” –

evidence had been elicited by all of the parties at trial and his Honour had had the benefit of full argument from counsel with respect thereto.

Finally it needs to be again emphasised that contrary to the findings of the trial judge in Kwan and in contrast to the findings of Debelle J in Southern Equities and of this Court in Kwan, in my view his Honour did not express himself “in emphatic language of absolute finality” so that there would be a reasonable apprehension -

et cetera.  We say, with respect, there are a number of problems with those passages but the one that I am focusing on for the moment is the level of sophistication on the part of the lay, but informed, but we accept, intelligent observer.  In paragraph, particularly 115, that person is either a lawyer, a law student and likely to have, and only likely to have if he or she shared those qualifications, some appreciation of the matters which his Honour adverts to and is not the kind of observer which the hypothetical construct is used from time to time in the authorities in this Court.  Indeed, it is someone unknown we say, to the authorities. 

FRENCH CJ:   The application of that test becomes more and more challenging, I suppose, the more complex our statutory frameworks become and the nature of decision making in cases of this sort.

MR SACKAR:   The answer to your Honour the Chief Justice is really this.  It will depend on the facts of the particular case, but most importantly the material facts of the particular case.  Laws was a case, for example, where it was necessary there as part of the material factual framework for the lay observer to be in a position to have some view about the defence or the relevance of the defence which was filed in that case. 

Now, here, our learned friends point to the fact that the lay observer would read the judgment of Judge Curtis and, having done so, would glean some sort of understanding of the distinction between interlocutory and final or hearsay and direct evidence.  I want to deal with Judge Curtis in a moment, but in advance of getting to his judgment, what we say is when one goes to that a number of things are clear. 

No criticism of the judge but that judgment was not produced for consumption by a lay person.  It is clearly the workings of a professional judge who adverts to traditional techniques of fact‑finding, and I will come to that in a moment, and adverts to necessary distinctions between the type of application he was dealing with and a trial on the issue which would take place in due course.

Nowhere in the judgment does one find set out, because it is not intended that it be set out, a distinction which a lay, even an informed and intelligent observer might glean between interlocutory and final or might glean between the significance of his ultimate, as we would have it, finding on dishonesty, on admissible evidence as opposed to inadmissible evidence, direct as opposed to hearsay.

GUMMOW J:   I think the starting point has to be Johnson.  There are cases before Johnson which, not to put too fine a point on it, seem to be somewhat over the shop.  It is set out in Johnson, in paragraphs 12 and 13, very deliberately to draw it together and provide a new foundation or reinvigorated foundation and what is said, in particular at paragraph 13, was composed with great deliberation.

MR SACKAR:   May I deal with that directly?

GUMMOW J:   Yes.

MR SACKAR:   I am grateful for your Honour drawing my attention to that.  What we say the lay observer clearly must be taken to know are things such as judges behave impartially and fairly and determine matters according to their judicial oath.  Judges are used to, in a day to day activity, putting matters in and out of their minds for the purposes of particular provisions.  However, when judges make findings, as we say here, of dishonesty, the lay person would take very seriously the fact that a judge has made such a finding.

GUMMOW J:   You keep talking about the lay person.  We are talking about a hypothetical construct.

MR SACKAR:   Yes, we are, but the hypothetical construct is that of a lay observer.  It is not that of, we say with respect, a lawyer, because if it were ‑ ‑ ‑

GUMMOW J:   That is conceded in Johnson, right.

MR SACKAR:   Yes, and the problem with giving too great a level of sophistication or level of knowledge in relation to the minutiae about judges and the way they work and the way they do not work is to run the risk that Chief Justice Mason and Justice McHugh in Webb were at pains to point out, namely, you really substitute the lay observer, informed and as intelligent as he or she might be, with effectively a lawyer, and that is what the construct is not intended to do because it is the court’s view of the public’s view; it is not the court’s own view, we say with respect, that needs to be kept in mind.  We say that there is nothing in the passage that your Honour has referred to in paragraph 13 that does any violence to that notion, so the question ‑ ‑ ‑

GUMMOW J:   It is not a question of doing violence to the notion.  It is a question of what the notion is, and the notion is in paragraph 13, and you will not dissuade me to the contrary by going back to earlier cases.  It is a unanimous judgment of five members of the Court in the year 2000.

MR SACKAR:   I am not going to test your Honour’s patience by going back to earlier cases except briefly, but I do wish to do so because what I want to point out in two earlier cases is that there is nothing inconsistent with what is said in earlier cases - Justice Toohey, particularly in Vakauta v Kelly, to what is said in paragraph 13 of Johnson v Johnson - but to take the point further that the reasonableness of any suggested apprehension is to be considered in the context of ordinary judicial practice.  May I emphasise that fundamental notions such as the presumption of innocence the lay observer would take into account, that judges act fairly they would take into account, that they ‑ ‑ ‑

GUMMOW J:   Wait just a minute.  What do you mean by “presumption of innocence”?

MR SACKAR:   I mean that the lay observer, when considering a matter, would have knowledge of some fundamental legal concepts such as the presumption of innocence.  That is a matter of notoriety and that the lay observer would not need to be lawyer or a law student to know of that.

GUMMOW J:   It is a notion drawn from the criminal law, is it not?

MR SACKAR:   It may be, but it depends on the context one is looking at and all I am saying is that in the particular context ‑ ‑ ‑

FRENCH CJ:   You are not suggesting it has any bearing on this case, of course?

MR SACKAR:   Not at all.  I am trying to be, I thought, helpful, but I am trying to advert to examples of matters which I wish to articulate is part of the lay observer’s understanding of fundamental notions, but the most fundamental one we say with respect to judges is that the lay observer would accept and know that judges act fairly but, may I emphasise, would be seen also to be acting fairly.  They would also not rule out the possibility of bias and so consequently, with respect, I would suggest there is nothing that I am about to put, I think, that runs contrary to what your Honour has pointed out in paragraph 13.

It is, however, we say with great respect, consistent with what this Court has said in other contexts which I wish to come to briefly.  May I deal with Justice Basten, though.  Justice Basten at page 373, paragraph 142, deals with the provisions of the statutory scheme and he sets out at page 374 the particular provisions of the statutory scheme.  Then at paragraphs 144 and 145 he refers to those paragraphs in this particular Tribunal’s activities as permitting the Tribunal to determine issues, as it were, generically and in such circumstances so that they should not need to be repeated.

Clearly, what those provisions are designed to do are in the appropriate cases deal with generic issues such as causation or in the case of asbestos attacks perhaps the ideology of the particular disease of asbestosis, matters of that sort which the Tribunal can conveniently deal with once and once and for all.  In 146 he says:

Ordinarily, rules of procedural fairness would entitle a party to resist the admissibility of material . . . However, the party adversely affected could not complain of pre‑determination which is permitted by the statute.

All these are factors which the fair‑minded lay observer should properly take into account as procedural characteristics of the particular tribunal in which the proceedings were brought.

In this statutory scheme, an applicant would have some difficulty in demonstrating a reasonable apprehension of bias where –

and he sets out four matters, the interlocutory nature of the application, that it had not been determined on a final basis, that is, “the interlocutory determination itself had not been challenged”.  I presume his Honour means no leave to appeal had been sought in relation to that, and that the “interlocutory application was not accompanied by any” and he describes it as “objectionable or emotive language otherwise casting doubt on the willingness” of a party.

In the present case, it is not contended that Curtis J has pre‑judged the issue or is in fact unwilling or unable to consider with an open mind such material and submissions as may be tendered by the applicant for further consideration.  That his Honour may, absent fresh material or differently formulated submissions reach the same conclusion, adverse to the applicant, would demonstrate consistency of approach, not pre‑judgment.

His Honour goes on to suggest that were BATAS to be successful, they might be seen as manipulating the system.  We say, with great respect, that approach is likewise erroneous for a number of reasons but, most importantly, because there could be no, we say, sensible connection between the statutory scheme and the knowledge of the lay observer for the purposes of making an assessment of whether or not what Judge Curtis did on this occasion might be seen to be something in respect of which he might not have an open mind.

Now, may I then come to what we want to say briefly about the qualities or characteristics of the lay observer and I have already made some submissions about it.  Let me add very briefly to that, however.  The lay observer clearly must be taken to know the material facts.  In this case there are possibly two, we say only one, we say the Mowbray judgment.  We expect our learned friends would say not only the Mowbray judgment in which his Honour determined various matters, but also his judgment in which he refused the recusal and in part in our submissions we suggest that that is not a relevant consideration or if it were, it should have no weight whatsoever in the determination. 

The lay observer has no special knowledge of the minutiae of the law or of court procedure of this sort, we say with great respect, that Justices Tobias or Basten attribute to the lay observer.  On that basis, we say there is clear error on the part of the court in the way in which they approached the issue and from the vantage point with which they then looked at the question of whether there was or was not pre‑judgment because whilst they purport to use the “two might” test, it is the “two might” test against a backdrop we say of a very highly sophisticated and, indeed, artificial construct which is not the one which this Court has consistently indicated to be the case.

May I go back to three and briefly three pre‑Johnson decisions because they do raise matters which are either not different in substance to that which your Honour Justice Gummow has pointed out to me in paragraph 13 of Johnson or, alternatively, deal with slightly different issues.  The first case if I may go back to is Livesey.  Livesey is on our list at 151 CLR 288. In the judgment of Justices Mason and four other judges at page 298, and I will read briefly from the bottom of the page under the heading “Was there an appearance of prejudgment or bias?”:

It was submitted on behalf of the Association that a reasonable observer would be aware of the ability of any judge of the Court of Appeal to put from his mind evidence heard and findings made in a previous case and to decide the case at bar impartially and fairly on the evidence led in that particular case.  As we have already indicated however, we do not consider that a case such as the present is to be resolved by reference to the ability of the members of a particular court or the public confidence in the integrity of the judiciary.  What is in issue in the present case is the appearance and not the actuality of bias by reason of prejudgment.  The reasonable observer is to be presumed to approach the matter on the basis that ordinarily a judge will so act as to ensure both the appearance and the substance of fairness and impartiality.  But the reasonable observer is not presumed to reject the possibility of prejudgment or bias; nor is the reasonable observer presumed to have any personal knowledge of the character or ability of the members of the [particular judge].

In the decision of the Court in Vakauta v Kelly 167 CLR 568, might I take the Court again briefly to that. Justices Brennan, Deane and Gaudron, as appears from page 570, agreed with Justice Toohey. Justice Toohey, may I take your Honours to at 584, 585, in the first full paragraph on the page, which I will not read, commencing “All members of the Court of Appeal”, his Honour was there dealing with actual bias. He then deals with the issue of apprehended bias from the words commencing in the second full paragraph:

However, there can be little doubt that his Honour’s remarks would excite in the minds of the parties and in members of the public a reasonable apprehension that the trial judge might not bring an unprejudiced mind to the resolution of the matter before him, namely, an assessment based upon the evidence, lay and medical, of an appropriate amount to compensate the respondent for the injuries she had suffered . . . 

I accept the observation of McHugh J.A. in the instant case that “in the case of a professional judge whose training, tradition and oath or affirmation require him to discard the irrelevant, the immaterial and the prejudicial, a conclusion that there is a reasonable apprehension that he is a biased should not be drawn lightly”.  In effect, that is what this Court said in Livesey.  And it is true, as Clarke J.A. pointed out, that it is a “reasonable apprehension” with which the court is concerned.  And, if it adds anything, it is such an apprehension in “a fair-minded observer”: Livesey.  But, in this regard, the public perception of the judiciary is not advanced by attributing to the reasonable ‑ ‑ ‑

GUMMOW J:   That has to be read with paragraph 13 of Johnson, Mr Sackar.

MR SACKAR:   I accept that.  The question though is this, if I may say so.  At what level of sophistication does one attribute to the hypothetical?  What I really said and submit is that you will not rule out that the observer could reasonably come to the view that there was bias.  It will turn upon the facts of the particular case.  It will turn, ultimately, upon the language adopted by the judge, and it will turn, as it does, we say, in this case, not only upon the language, but the procedure or the process which the judge followed, or did not follow, as the case may be, for the purposes of coming to the view.

Whether one describes it as “a clear view”, whether one describes it as “tentative”, whether one describes it as “final”, whether one uses epithets such as “emotional” or otherwise, one has to look at the facts of the case and one is driven, ultimately, by what the particular judge did or is said to have done or might be reasonably seen to have done in the circumstances. 

Now, whilst I accept what your Honour says about paragraph 13 our submission, nonetheless, is that Justice Toohey in Vakauta v Kelly was looked at and has been favourably looked at in other decisions of the Court.  But may I come finally to Webb v The Queen 181 CLR.  With respect, this is a notion which, in our respectful submission, has not changed post Johnson v Johnson.  At page 51 of the decision of the Chief Justice and Justice McHugh, right at the very bottom towards the bottom of the paragraph:

References to the reasonable apprehension of the “lay observer”, the “fair‑minded observer”, the “fair‑minded, informed lay observer” . . . abound in the decisions of this Court and other courts in this country.  They indicate that it is the court’s view of the public’s view, not the court’s own view, which is determinative.

So at the end of the day the question dealing with paragraph 13 is precisely, I would accept, what does one infer?  What does one find that the lay – and it is a lay observer - is taken to know about the judicial process.  Does one exclude any possibility if one accepts that a judge has taken oath in relation to impartiality and otherwise?  Does one accept that it is simply not open for the apprehended bias principle to have any operation where a judge undertakes his or her daily work conventionally?  The answer, clearly, is “no” on the authorities, we say, and certainly on the authority of Johnson v Johnson. 

Can I move to a decision of this Court in Jia Legeng 205 CLR for this reason?  Jia was a case, of course, which dealt with an administrative law officer and your Honour the Chief Justice had sat on the matter at first instance.  It is a case which postdates Johnson v Johnson.  Your Honour Justice Gummow and the Chief Justice made some remarks about the primary argument in the case which had detained both your Honour Justice French, as you then were, and the Full Court of the Full Federal Court, namely a ‑ ‑ ‑

FRENCH CJ:   The actual bias was raised in the – that ground was raised in the Federal Court because the jurisdiction was limited and then ostensible bias was run concurrently with the appeal in the original jurisdiction in this Court, I think.

MR SACKAR:   Correct.  Therefore, the apprehended bias point, yes, was not ventilated until this Court.  Now, your Honour Justice Gummow and the Chief Justice deal with the matter shortly, and I will not read it, at page 531, and your Honours there dealt with the “open to persuasion” argument.  Your Honours then recommenced the consideration at paragraph 95 under the heading “The application under s 75(v) of the Constitution” and their Honours there make reference to what I have colloquially described as the “two might” test, and there refer to Johnson v Johnson in the footnote.  At paragraph 98, their Honours made the observation that:

The new case of apprehended bias requires closer attention to the content of the requirements of natural justice, and the concept of bias.

Your Honours then referred to Ebner, and then at paragraph 100, their Honours then agreed with what Justice Hayne had to say, and I will return to that in a moment.  In the context of consideration of the judicial paradigm as opposed to the administrative officer, the closing remarks in paragraph 102 on page 539 where their Honours say this:

The position of the Minister is substantially different from that of a judge, or quasi-judicial officer, adjudicating in adversarial litigation.  It would be wrong to apply to his conduct the standards of detachment which apply to judicial officers or jurors.  There is no reason to conclude that the legislature intended to impose such standards upon the Minister, and every reason to conclude otherwise.

Their Honours were looking at the question of the degree of detachment that must attach to a judicial officer, and may I then go to Justice Hayne, whose judgment commences at page 561, paragraph 176, and if I may go to paragraph 178 on page 562:

Courts in this country make decisions by procedures that are both formal and adversarial.  They do so by the application of rules . . . The process of adjudication is generally conducted in open court.  The judge must give reasons . . . 

Importantly, the rules about judicial prejudgment recognise that, subject to questions of judicial notice, judges, unlike administrators, must act only on the evidence adduced by the parties and must not act upon information acquired otherwise.  No less importantly, the rules about judicial prejudgment proceed from the fundamental requirement that the judge is neutral.  That requirement for neutrality is buttressed by constitutional and statutory safeguards . . . The central task and, it may be said, the only loyalty, of the judge is to do justice according to the law –

If I may respectfully interpolate, and be seen to be doing so –

Decisions outside the courts are not attended by these features.

Then his Honour goes on to consider the particular statutory provision.  At paragraph 181 on page 563:

The analogy with curial processes becomes even less apposite as the nature of the decision-making process, and the identity of the decision‑maker, diverges further from the judicial paradigm . . . What is appropriate when decision of a disputed question is committed to a tribunal whose statutorily defined processes have some or all of the features of a court will differ –

Then paragraph 183:

To examine those questions it is necessary to consider more closely what is meant by “bias” and “apprehension of bias”.  “Bias” is used to indicate some preponderating disposition or tendency, a “propensity; predisposition towards; predilection; prejudice”.  It may be occasioned by interest in the outcome . . . or, as was said to be the case here, by prejudgment.  Whatever its cause, the result that is asserted or feared is a deviation from the true course of decision-making, for bias is “any thing which turns a man to a particular course, or gives the direction to his measures”.

Paragraph 184:

The development and application of a test of reasonable apprehension of bias avoids any need for a court, which is asked to prohibit a decision-maker from going further or to set aside a decision which has already been made, to attempt some analysis of the likely or actual thought processes of the decision-maker.  It objectifies what otherwise would be a wholly subjective inquiry and it poses the relevant question in a way that avoids having to predict what probably will be done, or to identify what probably was done, by the decision-maker in reaching the decision in question.  As was said in Ebner v Official Trustee in Bankruptcy “[t]he question is one of possibility (real and not remote), not probability”.

Saying that a decision-maker has prejudged or will prejudge an issue, or even saying that there is a real likelihood that a reasonable observer might reach that conclusion, is to make a statement which has several distinct elements at its roots. 

His Honour then sets them out.  Paragraph 186:

Often enough, allegations of actual bias through prejudgment have been held to fail at the third of the steps –

the third of the steps being that the contention is that the decision‑maker will do so without giving the matter fresh consideration in the light of whatever may be the facts and arguments relevant to the particular case.  At paragraph 187 on page 564:

In the case of a court, it will usually be self-evident that the issue, if an issue of fact, is one which ought to be considered afresh for the purposes of the particular case by reference only to the evidence advanced in that case.  Other decision-makers, however, may be under no constraint -

and then he talks about “expert” tribunals.  His Honour then says:

It is critical, then, to understand that assessing how rules about bias, or apprehension of bias, are engaged depends upon identification of the task which is committed to the decision-maker.  The application of the rules requires consideration of how the decision-maker may properly go about his or her task and what kind or degree of neutrality (if any) is to be expected of the decision‑maker.

With respect, we say that the question then for this Court, on the facts of this case applying the hypothetical construct, is clearly enough – or is called upon to clearly enough examine, and I shall do as briefly as I can ‑ ‑ ‑

FRENCH CJ:   There is a degree of detachment in this hypothetical construct from real people, I think, which I suppose just emphasises the way in which it is used to apply some standard to maintain – which is really judicially applied, but one could ask, I suppose, is the hypothetical lay person one to whom one could relatively easily explain how it is a possible for a judge to make a decision of this kind and still go on with an impartial mind and address the same issue on other evidence and in the context of the facts of this case, I suppose, be told “Look, the judge decided this interlocutory application.  It was in another case and he said he decided it only on the evidence before him, some of which had not been tested or contradicted”.

MR SACKAR:   The problem with that is that then one has the lay observer in consultation with an experienced lawyer and that does not appear to be the construct, otherwise the lawyer, in effect, becomes the judge hearing such a matter ‑ ‑ ‑

FRENCH CJ:   You do it either by that fiction or you do it by imputing some level of knowledge to the construct.

MR SACKAR:   Well, for as long as this Court adheres to the notion that this is a lay observer, then it becomes difficult to attach the lay observer to what a junior barrister, a silk, a person who specialises in the jurisdiction in respect of which the issue is raised.

FRENCH CJ:   To say that the judge decided the case only on the evidence before him and said so and made the point that it had not been tested or contradicted would not seem to be a particular arcane proposition requiring a law degree to understand, would it?

MR SACKAR:   But to say that the judge on the issue which was going to be an issue in that trial and we say is an issue here on a basis beyond, let us say, a prima facie basis or beyond putting it into starker focus on the basis that there are reasonable grounds for finding ‑ ‑ ‑

FRENCH CJ:   Section 125(2)?

MR SACKAR:   Section 125(2) – is an altogether different matter because that is what we say are the facts here, and we have said and adhere to the proposition that whatever the notion of reasonable grounds for finding means, and we say that it means no more probably and best than prima facie, when one fairly reads what Judge Curtis did here and the level of satisfaction that it appears, simply looking at the language he uses – and I will come to a couple of paragraphs in a moment – he went beyond simply saying the issue is not determined here, it is only that there are reasonable grounds for finding. 

When one looks at what he did from a number of vantage points, he uses perfectly orthodox and, if I may say so, impeccable methods used day in, day out by judges who are finally determining issues.  For example, he looked at how long the issue had been on the table.  I will come to that in a moment, but that has some significance here.  He was detained, at least in two paragraphs, to observe that it was not a new issue.  It was one that BATAS has been confronted with some years previously.  It was one which they had had fair opportunity to deal with in the proceedings before him in two ways.  First, they had been served statements and, by implication at least, some of those statements were those of Mr Gulson who features very prominently in his Honour’s reasons.

KIEFEL J:   Are you speaking from the point of view of the lay observer at this point?

MR SACKAR:   Yes.

KIEFEL J:   You seem to be attributing some understanding of litigation.

MR SACKAR:   Yes, I may be, but what I am leading up to is, to take his Honour the Chief Justice’s paradigm, that the lay observer is saying, why does his Honour make mention in paragraphs 13 and 22 that this was an old allegation?  Should I take that seriously or how should I read it?  I am just using the construct that the lay observer has access for the purposes of coming to an informed and intelligent view, has access to someone who, if he or she needs to be enlightened, can be given some information.  So I am assuming, because the lay observer would be fair‑minded, the lay observer would never think of doing anything other than reading the matter as a whole and he or she, we would submit, if they had access to that level of sophisticated insight, would ask questions; what does this paragraph mean, what does that mean?

What does it mean in paragraphs 56 or 55 when he says “I am persuaded that”?  How should I look at that?  His Honour, of course, in the interlocutory process that he entertained, permitted cross‑examination.  Nothing wrong with that.  He was entitled to run the procedure as he decided was appropriate.  But in permitting cross‑examination in circumstances where the witness, Gulson, who was critical in the Mowbray proceedings and is common in the Laurie proceedings, by having him cross‑examined, by listening to him, by looking at other pieces of evidence which his Honour took on board and deciding that the attack on his credit was not an appropriate or adequate one because it did not really put to him in Browne v Dunn terms that the central allegation which Gulson was asserting about evidence about document destruction, was directly challenged. 

That is a very conventional technique which is used by judges often to be more satisfied about inferences they may draw or not.  But then to permit that process, which no one criticises the judge for, he permitted that process to be undertaken in that way.

But in the context of a section 125(2) inquiry he permitted what appears, on the face of it at least, to be a reasonably extensive analysis and/or contest in relation to some issues which went to the very heart of the document destruction case there and, we would say, here and then determines that Gulson’s credit has not been successfully challenged in part because it was not directly challenged; as I say, notions or strains of Browne v Dunn.  He then goes on and finds corroboration for the Gulson testimony and then decides that maybe it was part of a clever strategy or maybe it is not and that is against the backdrop of an allegation which is not new and is not one which has taken BATAS by surprise. 

So, at what level does one have this dialogue between lay person and lawyer?  What questions might be asked if that is the construct and if one assumes that there will be free flow of information, not endlessly, only to permit the lay observer to come upon a fair reading, to a reasonable apprehension or not?  But that starts to, if I may say so, with respect, tease out where does one go with that?  Then the point we have made a little earlier is that one must keep in mind, if Webb is still authority in this Court, which we submit it certainly is, it is the Court’s view of the public’s view, that does not answer the question, I accept, but it is ultimately the Court’s view of the public’s view.

The question is, how informed about the judicial process, more importantly, trial techniques or orthodox measures which might be used day in, day out, by fact‑finders in every court in this country – how far does one go in explaining, well, I think the judge has in mind this?  It is a perfectly sensible question to ask, we say with great respect, if one is looking at the informed observer wishing to be told or informed.  Why did the judge say this?  What significance is he putting on that?  I will come to that just in a moment.

KIEFEL J:   You have raised a lot of questions.  Can you say in summary, what do you say is the correct approach in relation to the extent of understanding that the lay observer is to have?  Is it, for example, having regard to Johnson, about the professional abilities which might be assumed in relation to a judge and then do you allow the facts to carry the day in relation to the particular circumstance?  Where do you set the bar?

MR SACKAR:   I set the bar perhaps along these lines.  As I have accepted already, it is a fair‑minded lay observer.  He or she must be taken to appreciate that judges sit and decide things impartially on the material before them, but they should be seen to be doing so as well because the lay observer is acutely conscious of the appearance of justice and the need for the judiciary to have its integrity maintained by, indeed, ticking both of those boxes, not just the first.  So, therefore, the fact that he or she might be told the judges will exclude, for example, material which is immaterial or irrelevant in doing so or in coming to a decision in the particular facts of the particular case, the question nonetheless turns upon what has the judge done or what does it appear reasonably that he or she has done.

So, yes, in the end, we say that there is a high level of appreciation, perhaps at lower levels since Johnson, on one view, but how much lower does one go beyond saying that one assumes or is taken to know impartiality, but how far does then one go to inform the lay observer of the minutiae of the particular procedure?

Now, I would accept if the material facts of the case, in this case certainly is the judgment so the lay observer will read that judgment, but it has to be a fair reading and is it a fair reading to be in company with an experienced litigation lawyer in the field in which the judge is giving judgment?

KIEFEL J:   Does Johnson suggest that a starting point might be to consider that a professional judge has particular characteristics such as the ability to put aside a conclusion until all evidence is in, to objectify matters?  I mean, are these all of the things that you have to first attribute and then say well, in the circumstances, either one of these was not shown to exist, or the circumstances were such that a lay observer just could not assume that that would operate in this particular case?

MR SACKAR:   Yes, and my task though is only to show, if I am able to, on what the judge has done, that he, in this case, might not be open to persuasion.  In the “might not be open to persuasion” there is that difficult question of how much knowledge.  If one assumes from the point of view that professional judges who take the oath will exclude, then it may be that apprehended bias has no work to do at all.  That does not appear to be the law because judges, when they determine, as we say has happened here, matters of dishonesty at this level of satisfaction, and if we are correct, have gone beyond what was otherwise necessary for the judge to do in the section 125(2) context, the lay observer will take seriously that a judge has formed a carefully considered view of a serious allegation.

So although the lay observer will say, yes, under normal circumstances that judge would be bound by his judicial oath to do his best, the question is what is the appearance, given the nature of what in fact he has done in this case, the way he has done it, the process he undertook, the ambit of the exercise that he was engaged in, but, indeed, the level of persuasion he appears to have reached, which, as I have said, goes, in our respectful submission, way beyond merely finding that they are reasonable grounds for finding.  One can imagine any number of formulae which could easily have been used, even a slavish adherence to the provision itself may well have provided a very different result to the one that we say occurred here.

KIEFEL J:   Do you go so far as to say that in relation to a finding of fraud the test would usually require a judge to disqualify herself or himself?

MR SACKAR:   If that issue is going to be determined in subsequent proceedings, yes, and particularly if, as here, if we are right, that he has gone beyond the section 125(2) exercise or ambit and in circumstances ‑ ‑ ‑

KIEFEL J:   You mean actual persuasion rather a reasonable basis for it.

MR SACKAR:   Yes, and more to the point, one adds to it here the determination of this gentleman’s credit.  It is, on one view, hard to imagine, at an interlocutory hearing, given the statutory parameters of section 125(2), that a finding of credit was necessary at all.  That is no criticism of the judge, as I say, because that is the way the matter was conducted, and the parties were party to it. 

But the question is, going forward – calling in aid some of the terms in Jia – does one see a sufficient neutrality or detachment from that issue, or rather from Mowbray, is one persuaded reasonably that he might have an open mind or might be open to persuasion and to display, not just actually undertake his work professionally, which one assumes he will undoubtedly do, but will he be seen to be able to perform his future judicial tasks with the level of neutrality and detachment which the appearance of justice, we say with great respect, requires.

That necessarily must focus upon - whatever attributes the lay observer may or may not have in the end - it must focus upon, indeed, what he seems to have done because that is really, we say with great respect, a starting point.

So on that basis, can I very briefly, because I have outlined already some of the things that we say that his Honour did, but may I just allude to some paragraphs in his judgment.  The trial that was going to take place in this matter in Mowbray – his Honour’s judgment starts at, the text of it, at 221 of the appeal book.  The trial that was going to take place in this matter is the trial that he – the ultimate issue in the trial, at least, was going to be that set out in paragraph 3.  This was an action brought by Brambles for contribution against BATAS.  Then in paragraphs 4 and following, he sets out the application which was the application for further and better discovery. 

I need not trouble your Honours with the early paragraphs, except to highlight paragraph 12 at 225.  They were the specific allegations here, that is, here being Mowbray, and those allegations we say, and the case was being conducted all the way to this Court on the basis that substantially the same allegations arise or will arise in Laurie.  The first comment that I alluded to earlier is in paragraph 13:

These allegations are not new.  They were the subject of evidence given in McCabe v British American Tobacco Australia Services Ltd [2002] VSC 73 . . . They were the subject of statements served by Brambles upon BATAS and tendered in support of the present application.

He then goes on to deal with the utility of discovery and the rules of court.  Then in paragraph 19, he then commences what is clearly of some significance and it is the prominence that he gave, and thought it was necessary to give, the evidence of Mr Gulson who came along and not only were there two statements tendered of Mr Gulson’s, but he gave oral testimony.  His Honour then sets out in paragraph 19:

He has given evidence before me and two written statements by him have been tendered.  The first of those comprises a transcript of evidence he gave in the matter of United States of America –

Then his Honour sets out in a number of pages a number of extracts from Mr Gulson’s evidence with emboldened sections which he indicates in paragraph 19 that he has chosen to emphasise and those paragraphs, without going to any of them, when one reads them, they are paragraphs which allude to the dishonesty, if you like, of a so-called document strategy or document retention strategy.  Then in paragraph 20 he says that Mr Gulson, in a further statement, gave some evidence and he quotes:

It was obvious to everyone in the know what the strategy was.  That is, its purpose was to get rid of all the sensitive documents, but do so under the guise of an innocent housekeeping arrangement -

Paragraph 21 is the first reference to the notion of interlocutory and he says:

BATAS submit that the evidence of Mr Gulson contained within these two documents is inadmissible -

Now, the two documents is not a reference to Gulson’s oral testimony before the judge, it is a reference to the two statements that he has previously identified.

GUMMOW J:   Back on paragraph 19?

MR SACKAR:   Yes.  The question of the admissibility of hearsay evidence is, it seems, as obviously it would be, limited to those statements, not to the oral testimony.  He rejects the argument on admissibility and in paragraph 22 says this - this is the primary reason because:

Mr Gulson names and identifies the sources of his information as to the Document Management Policy.  He has been subjected to cross‑examination on his evidence.

This is the point we emphasised a little earlier, generally:

BATAS has had the opportunity to investigate his claims and call evidence in rebuttal.

Then he talks about the hearsay objection but then deals with section 135 of the Evidence Act and clearly exercises his discretion on the two statements that their probative value overwhelms or outweighs the prejudicial value and, therefore, he exercises his discretion to allow those two statements in.  He then deals with section 125 and sets out the provisions and notes in paragraph 24 that Mr Middleton, as he then was, invited his Honour not to deal with those matters.

Going back, very briefly, apart from setting out the heading in section 75, there is no other explanation in paragraph 21 as to what an interlocutory proceeding is.  In any event, it is somewhat clouded by the distinction drawn between the written statements in the oral testimony.  He then deals with the question of what is it that he needs to find for the purposes of section 125 relevantly in terms of motivation.  He then says in 28:

The issue is not here without significance.  If Mr Gulson is to be accepted, the intentional destruction of documents by BATAS has inhibited the ability of Brambles . . . That destruction was not fraudulent or dishonest if it was unconcealed and professedly conducted for the purpose of forensic advantage. 

Then in paragraphs 29 and 30 ‑ ‑ ‑

FRENCH CJ:   The relevant dishonesty in this case was the concealment of the true purpose of the policy, was it not?

MR SACKAR:   Yes, it was putting forward an artificial set of reasons, a pretext, as it were, appearing to be acting under the advice or upon the advice of lawyers but, in fact, to leave plenty of room, as it were, to go about and destroy documents, albeit on its face, give the appearance that it was being done consistently with legal advice.  He finds in paragraphs 29 and 30 that in order to determine the question for section 125, in other words, to remove the privilege or rule that the privilege should no longer be obtained, he having earlier ruled that it should, prima facie, be found that he needed to find some element of dishonesty.  Now, we do not cavil at that on the authorities and then he calls in aid Justice Santow.  He then says in 32:

The question must then be posed; What is the allegation of fraud with which we are presently concerned? 

He goes on to deal with further evidence of Mr Gulson but then looks at some documentary materials.  He does so for the purposes, as one emerges in the next few paragraphs, of contrasting the document retention policy which did exist - which he describes as a detailed 45‑page instruction with schedules - he juxtaposes that in paragraph 36 on page 241 with the policy evidenced by a copy dated 29 September and he describes it as a model of brevity.  Then in 37:

What is remarkable about this document is that it replaced in two pages the previous Document Management Policy, which operated from the 1950s to 1985, and which established, in 45 pages of detailed instruction, 14 categories –

and so on.  He then talks in 38 and 39 on page 242 about the so‑called “‘valuable’ business documents” definition which is part of the pretext used to destroy documents.  I will not read the following paragraphs but he then in 39 to 43 describes Mr Gulson’s concern and his going to ultimately, first of all, Clayton Utz and then Allen Allen and Hemsley to get some advice.  Then in 44, at the bottom of page 243:

The sting in Mr Gulson’s evidence is not simply that BATAS destroyed prejudicial documents for the purpose of suppressing evidence in anticipated litigation.  Whether such destruction is contrary to public policy may be, as I indicated earlier, a moot point.  The substance of the complaint by Brambles, and that which, on the present evidence before me, may trigger the operation of s125 of the Evidence Act, is that BATAS dishonestly concealed this purpose by pretence of a rational non‑selective housekeeping policy . . . 

45.      I should make it plain that BATAS has at all times maintained that its document management policies and practices at no time permitted selective destruction of prejudicial documents.  The assertion by Brambles to the contrary remains a live issue for the trial.

Then he talks about the Victorian Court of Appeal.  Again, in 47:

It may be that a party is entitled to destroy documents solely . . . I do not here decide that question.  However, to adopt that course and, by sham and contrivance, intentionally conceal . . . would not only be unfair, it would be dishonest.

48.      I accept that to a large extent the evidence of Mr Gulson is vague . . . I also accept that the standard of proof required when dishonesty is alleged must take into account the importance of the evidence to the proceedings and the gravity of the matters alleged.

49.      The evidence of Mr Gulson is vitally important . . . 

50.      An interlocutory finding –

Again, no explanation follows except one can, let us assume tentative, but this is an interlocutory finding ‑

that, upon the only evidence presented, BATAS has selectively destroyed documents for the purpose of avoiding discovery does not necessarily impugn the conduct or the advice of its solicitors.

It is limited in that context to whatever he is about to do not being taken as anything derogatory of the solicitors.  Then:

51.      Attacks were made on the credit of Mr Gulson in cross‑examination.  He conceded that at one time, by artificial or sham transactions, he took control of a company –

Then he goes on to recite other things that Mr Gulson accepted.  He then says:

He did not pursue that claim.  I do not accept the submission by BATAS that these matters tend to make it unsafe and unsatisfactory to accept the evidence of Mr Gulson.

52.      Mr Gulson’s evidence stands uncontradicted.  He has not yet been tested by a contrary version of events.  Mr Middleton QC for BATAS in cross‑examination of Mr Gulson did not directly put to him that his evidence was untruthful, unreliable, or actuated by malice.  Nor did he suggest that the persons named by Mr Gulson did not explain to him the actual workings and purpose of the Document Retention Policy.  In particular he did not suggest to Mr Gulson that Nick Cannar, who he identified as “senior counsel at BATCo”, did not say to him –

and then sets out an important passage.  Then:

53.      There may be good reasons why BATAS has not yet joined issue with, and called evidence to contract, Mr Gulson, however I must determine the proceedings now before me –

If one assumes the lay observer – the lay observer, we say, would ask the lawyer, if that is the way the construct works – why did his Honour make reference, for example, in paragraph 13 to it being old allegation?  What is the relevance of that - or not a new one?  He then says in paragraph 54:

Mr Gulson said that he personally attended upon the scientific library of BATAS at Pagewood for the purpose of checking whether the Document Retention Policy had been there implemented and there came across what he described as “sensitive smoking and health documents that were supposed to have been destroyed under the policy” . . . 

Mr Gulson also says that he personally introduced the lawyers to the staff at Pagewood.

Then, if I may say so, he makes the point –

This is direct evidence which has not been challenged or contradicted.  In the absence of evidence from BATAS, I find it difficult to understand how it was thought necessary that three English lawyers attend a scientific library –

et cetera.  Then in 56 and 57, he then come to what he purports or suggests are his findings at 125.  One does not find reasonable grounds for believing or accepting or finding, I should say, he says:

I am persuaded on the present state of the evidence that BATAS in 1985 drafted or adopted the Document Retention Policy for the purpose of a fraud within the meaning of s125 –

Now, that phrase there and the phrase used again in paragraph 57, which I will come to, we say with respect, reasonably harks back to it having the requisite degree of dishonesty associated with it.  Those passages of Mr Gulson’s evidence which privileges claim refer to communications made:

The terms of the policy would appear to be so contrived that BATAS may secure legal sanction . . . Those terms permitted BATAS to determine that which was a “valuable business document” entirely without scrutiny or chance that it may later be held accountable . . . A claimant in subsequent litigation could not compare the identity . . . Such proof could raise an inference that the destruction of documents was selective and in aid of a forensic advantage, rather than an orderly administration . . . 

In the absence of evidence to the contrary, I infer that legal advice to the effect that destruction of documents pursuant to the terms of the policy was not contrary to law, was integral to the decision of BATAS to persist with its policy of selective destruction.  That advice gave BATAS the confidence that, in the event that the terms of policy were revealed, those terms would give a potential litigant no cause for legal complaint, nor clue as to the manner in which the policy had been implemented.  I find that the communications made for the purpose of obtaining that advice were communications in furtherance of the commission of a fraud ‑ ‑ ‑

FRENCH CJ:   That may make no difference at all to your submissions, but there is not a precise identity, is there, between the issue being determined and reflected in that finding and the issue raised in the pleadings in the Laurie litigation which was attached to the destruction of the documents themselves as being evidence of knowledge of the risks of smoking and lung cancer?

MR SACKAR:   The answer is yes, in part.  The allegation of concealment and destruction in substance is in the Laurie proceedings and we have given your Honours references to ‑ ‑ ‑

FRENCH CJ:   But the fraud that is addressed here – I know it is closely connected – is the concealment of the true purpose of the document retention policy.

MR SACKAR:   The answer is, the concealment policy is undoubtedly pleaded.  Mr McIntyre, in the exchange which was set out in our submissions in reply at page 2 of those submissions is an exchange between Mr McIntyre and his Honour Judge Curtis, in the recusal application and his Honour there elicits from Mr McIntyre, fairly if I may say – you will see on page 2 – he invited Mr McIntyre to go to paragraph 12.  That is paragraph 12 of the Mowbray judgment we are dealing with.  That is where at page 225 of the appeal book, one has an articulation in the Mowbray proceedings of the intentional destruction, placing in the hands of third parties and falsely asserting in (d):

Falsely asserted an innocent housekeeping explanation –

What Mr McIntyre says:

I do not think D is specifically pleaded within the pleadings, your Honour, but I must say . . . but I must say I could not rule out the potential for counsel who often appears for the plaintiff to seek leave to include it.

Then his Honour said:

They were distinctions about [scil without] difference – the same issues arise.

Then Mr McIntyre fairly says:

I think that is probably the case, your Honour.  On the pleadings they probably do not yet but I think there is a good chance that ultimately they will.

So to answer your Honour, the germ of it is there, the substance is there and Mr McIntyre fairly made the concession that the likelihood is that the specificity in paragraph 12 in the Mowbray judgment we are dealing with will emerge in the Laurie proceedings and the matter has been conducted on that basis in the courts below.  I need only briefly refer to the evidence of Mr Welch and Dr Wigand.  His Honour considers the evidence of Mr Welch, and at page 252 of the appeal book, paragraph 63, Mr Welch had a statement which was tendered before his Honour.  That statement one sees from page 249, paragraph 59, was from what is called direct examination in the United State of America v Philip Morris matter.  His Honour observes, in paragraph 63:

This evidence of Mr Welch has not yet been challenged.  He was not required for cross‑examination.  The sole objection to his evidence was on the ground of relevance.

Then he goes on to find that it was “corroborative”, in any event, “of the evidence of Mr Gulson.”  Dr Jeffrey Wigand, whose statement was also tendered in the proceedings, relevance was the only objection, and paragraph 68 on page 254 of appeal book:

I believe the evidence of Mr Wigand to be relevant.  That evidence is inconsistent with BATAS, as a subsidiary of BATCo, maintaining an independent and innocent document retention policy administered non‑selectively.  It is corroborative of the evidence of Mr Gulson –

Then at paragraph 69, when he comes back to the overall case and the discovery application, he talks about:

the evidence of Mr Gulson, Mr Welsh, and Dr Wigand . . . has sufficiently discharged an onus of demonstrating, prima facie, that it can make good the allegations pleaded –

He says “paragraph 11”, that clearly must be paragraph 12, however, because paragraph 11 has nothing to do with it.  That is really the extent of the judgment and what we say is, yes, there are references to interlocutory, yes, there are references to the evidence as it currently stands, yes, there are references to witnesses not yet being tested.  All of those apparent caveats or qualifications, however, in the real world have to be looked at in the context of the approach that his Honour adopted, as I have said now somewhat tediously, adverting to perfectly conventional trial techniques, as it were, looking at the fundamental theory or thesis of the case put prominently by Mr Gulson who was called and was cross‑examined, according to his Honour ineffectively and certainly not such as to concern his Honour that, notwithstanding the context in which he was deciding the issue, he went on to determine that he accepted Mr Gulson’s credit on the fundamental allegation of matters which he is expected to give evidence of again in the Laurie proceedings.

So therefore, when one looks at those findings, most particularly at what even his Honour Justice Tobias accepts are neither provisional nor tentative, as it were, in paragraphs, I think, 56 and 57, one asks the question then could the observer - how well informed the observer might be about the judicial process and might be about the fact that the lay observer could put out of his or her mind any actual bias, the judge’s oath is quite contrary to any notion of actual bias is it nonetheless open reasonably to conclude that the observer, however well informed the observer might be, could reasonably come to the view that the judge’s mind on this issue might not be open to persuasion, and we say, with respect, that is certainly open.  We say that we would fulfil that task on an examination of a fair reading of his Honour’s judgment.

The significance of a determination in the prejudgment context on an issue of credit is one which has been the matter of particular reference by the High Court.  May I simply do no more than give your Honours the references to three places where the issue of credit and the significance of a view on credit has been seen as being a problem in the prejudgment context and not a problem but a difficulty in terms of resisting an “apprehension of bias” case.  In Watson 136 CLR, your Honours will find a discussion in the judgment of the Court at 264 of credit.  In Livesey 151 CLR at page 300, there is a discussion of credit and the relevance of it in this context, and in Vakauta v Kelly ‑ ‑ ‑

GUMMOW J:   What page?

MR SACKAR:   I am so sorry, in Livesey at 300, 151 CLR 300. In Vakauta v Kelly 167 CLR at page 571 and it goes without saying that it does assume where it arises some special importance where the issue is going to arise again and if the judge has formed an impression, particularly one where it was formed as a result of cross‑examination, and I will not rehearse the observations his Honour made by looking at that problem.

KIEFEL J:   Did those cases mostly, however, involve negative findings?

MR SACKAR:   Yes.

KIEFEL J:   Is there a difference then when there is a positive finding in relation to an uncontradicted witness?

MR SACKAR:   No, it would seem not, your Honour, because it is really a question of has the judge gone beyond a Fox v Percy analysis of, let us say, contemporaneous documents and merely formed the view that the testimony should be not accepted because it is unreliable or run in contrary to contemporaneous documents.  To reject or to accept a witness on a credit issue necessarily involves keen observation on the part of the judicial officer and a reference often to factors which go beyond corroboration independently, but here of course the judge not only, we say, determined the issue of credit favourably in Mr Gulson’s case, but sought and found – identified, I should say more accurately – corroboration both in terms of documentary materials by the juxtaposition between the model of brevity and the other documents, and by the witnesses, Welch and Dr Wigand.

KIEFEL J:   But that is objective corroboration, is it not?  It is not something ‑ ‑ ‑

MR SACKAR:  No, it is.  It certainly is. 

KIEFEL J:   His Honour, when he expressed himself as not satisfied that he should not accept Mr Gulson’s evidence at paragraph 51, was really dealing with the discrete issue about Mr Gulson, was he not, and his conduct in other proceedings?

MR SACKAR:   Yes, indeed.  Yes, it was.

KIEFEL J:   So the finding was not really a finding about the acceptance or reliability of Mr Gulson as a witness generally?

MR SACKAR:   We would say, with respect, no, it was and it was for these reasons.  His Honour observed the convergence of a number of forensic issues.  Number one, an issue that was not new, an issue that was well know to BATAS both previously in relation to court cases in 2002, some four years before this matter was conducted, but, secondly, by reason of statements that were filed in this very case and about which they, it is by implication, clearly had notice. 

Secondly, when they got to cross‑examine him, they seemed to cross‑examine him on everything except the actual central assertions that he was making about his direct information and, in particular, his conversations with Mr Cannar.  So, his Honour observed that when given that opportunity, an opportunity which they had had ample opportunity to fully investigate, a comment he makes in paragraph 22, did not actually put to him in Browne v Dunn terms that his version, which was adverse to BATAS, was in fact ‑ ‑ ‑

KIEFEL J:   But that just enables an inference about the conduct of the litigation by a party.  His Honour is not saying that that would tell him something about the witness personally.

MR SACKAR:   Well, it did in this sense, that he seems to say, “I have a greater reason to believe Mr Gulson because when given the opportunity, he was not directly challenged”, and that is a perfectly impeccable application of the rule in Browne v Dunn.  So he was saying, with respect, “Well, I hear what he says and I believe him and in part I believe him because when given an opportunity, they have not confronted him with it”, and that is the strains of Browne v Dunn.  I think I gave your Honours the reference in ‑ ‑ ‑

HEYDON J:   You can draw in inference about the instructions.

MR SACKAR:   Correct.  And instructions would play an important part here because of the longevity of the allegation and the opportunity given to BATAS to challenge and contradict.  So what he is saying is this is a serious allegation, “I need to be” and he makes the observation in another paragraph, “I need a particular level of persuasion here before I am prepared to make a public statement about it, but I am able to do so for any number of reasons, one of which is that when given the opportunity, they did not put it to him” and that is a very conventional mechanism or technique used by trial judges, as we know, to give him or her comfort that the version should be accepted. 

The last point I just want to make a very short remark about is the relevance of his Honour’s recusal judgment.  Let it be assumed for the moment that it is relevant to take into account.  Here the recusal judgment is, on any view of it, and we say with very great respect, either his Honour’s view that he would have no difficulty in sitting on the matter going forward or, alternatively, if he were looking at it from the Webb v Queen vantage point, in his opinion, the public would have no difficulty in him doing so or there would be no appearance of that.  It is an objective and hypothetical construct.  The subjective views of the judge ‑ ‑ ‑

GUMMOW J:   The submissions made on this motion do not appear to have included a reference to Johnson, do they?

MR SACKAR:   On the recusal motion?

GUMMOW J:   Yes.  We have a long transcript.

MR SACKAR:   I personally cannot recall.  I will look for that detail.

GUMMOW J:   It starts at page 49.

FRENCH CJ:   It is not mentioned in the judgment, is it?

MR SACKAR:   No.

GUMMOW J:   It does not seem to be mentioned in the submissions, so I am not surprised it is not in the judgment, but at what stage of the litigation was not motion filed on 9 March, appearing at page 45, put on?

MR SACKAR:   It was at a time when the Laurie proceedings had been on foot for some years ‑ ‑ ‑

GUMMOW J:   They started on the 26th, did they not.

MR SACKAR:   They did, and may I pick up the chronology perhaps this way.  In broad terms, between 2006 when the proceedings were started and late 2007 what had happened in the proceedings was a claim and an amended claim and a defence.  The amended claim and the defence is in the appeal book.  The chronology, in more detail, to which I am alluding your Honour will find in the affidavit of Mr Pagent commencing the appeal book at page 101.

GUMMOW J:   The litigation being the subject of some management directions or not?

MR SACKAR:   Yes.  There had been directions of a procedural nature only and your Honour will see, for example, at 105, his Honour was called upon to deal with some amendments, paragraphs 28 and 29, for example, statements ‑ ‑ ‑

GUMMOW J:   Just a minute, is there a system at the Tribunal that cases are allocated for management by particular judges who ‑ ‑ ‑

MR SACKAR:   I cannot answer that, your Honour, from my experience.  I do not know.  This is the first time I have appeared before the Tribunal, so I do not know.

GUMMOW J:   This is the sort of thing we had of mind in Johnson actually.  One would want to know these things.

MR SACKAR:   The answer is I cannot answer your Honour.  It might be somewhere in here and I have missed it, but I cannot answer it.

GUMMOW J:   But it does seem, does it, that Judge Curtis had been dealing with a number of interlocutory steps over the years?

MR SACKAR:   Yes, all of a procedural nature and, importantly, then what occurs is that when Mr Laurie died, there were delays from time to time because of probate and because of issues that arose in relation to that.  Then, in paragraph 40 on page 107, for reasons I will not go into but are otherwise explained in Mr Pagent’s affidavit, the current solicitors instructing my learned friend came in in lieu of Slater & Gordon, and then in the December of 2007, paragraph 44 on page 107, the Tribunal stood the proceeding over for a transfer application to be made and his Honour was then told in late 2007 that there was likely to be, if the cross‑vesting application was not successful, there would be a disqualification application.  What had happened previously –paragraph 40 on page 107, the plaintiff indicated that:

Mrs Laurie’s claim “should not be litigated until such time as” proceedings in Victoria . . . “are determined”.

So although his Honour dealt with procedural issues up to and including 9 November, from 9 November 2007 the attitude of Mrs Laurie is that the Laurie proceedings should not be proceeded with until the particular litigation which is otherwise explained in Mr Pagent’s affidavit, commencing paragraph 54 and following, has been concluded.  Those proceedings are extant in the Supreme Court of Victoria.

GUMMOW J:   At what stage was the motion filed?

MR SACKAR:   The motion was filed ‑ ‑ ‑

GUMMOW J:   What stage had the litigation reached on 9 March 2009?

MR SACKAR:   At that stage, from November 2007, the plaintiff’s position was that it did not want the Laurie matter proceeded with in the Dust Diseases Tribunal before the matter, which your Honours will see later in the affidavit, in Victoria was concluded.  It came to a standstill, at least on and from 9 November.

GUMMOW J:   Your side had a cross‑vesting application.

MR SACKAR:   Which failed.

GUMMOW J:   Which failed.

MR SACKAR:   Yes.  Then we made the application in ‑ ‑ ‑

GUMMOW J:   It failed in February.

MR SACKAR:   Yes, and we made the application in March 2009, which your Honours will see from paragraphs 48 through 51.  It was made within a short time of the cross‑vesting application failing.

GUMMOW J:   But was it understood at that time that the judge would be the trial judge?

MR SACKAR:   I do not think it is clear.  What occurred was that back in 2006 Judge Curtis took the evidence of Mr Laurie de bene esse.  The question of necessity, for example, arose in the recusal application and his Honour indicated that there was no necessity in this case.  That appears from the exchange in the transcript, which I will find in just one moment.  Yes, Mr Brereton points out to me that in paragraph 9 on page 102:

On 20 April 2006, the Tribunal made orders for the taking of Mr Laurie’s evidence –

Further, in (c), that he –

be the member before whom the proceedings be heard ‑ ‑ ‑

GUMMOW J:   Thank you.

MR SACKAR:   The question of necessity arose in the course of argument before ‑ ‑ ‑

GUMMOW J:   Anyhow, the point is that April, it is, perhaps that from 2006, nothing was done to disqualify the judge.

MR SACKAR:   That is true except the judgment in Mowbray - it does not explain ‑ ‑ ‑

GUMMOW J:   That is in 2006?

MR SACKAR:   30 May.

GUMMOW J:   That is 30 May?

MR SACKAR:   Yes.  His Honour was told at the end of 2007, shortly after the plaintiffs indicated they did not want the proceedings to progress in the DDT until Victoria was dealt with, so the matter was, from the plaintiff’s point of view, put on hold from November 2007.  His Honour was told in the December that a cross‑vesting application would be made and as a fallback position or as an alternative application he would be asked to recuse.  So for some two years or 18 months prior to that, or after that I should say, the matter did not progress until the recusal application was made. 

Now, the necessity point was taken before the judge but rejected by him as being a relevant consideration and Justice Tobias makes the finding to that effect at 365 paragraph 118.  Necessity was raised again in the Court of Appeal and at page 365, paragraph 119:

As I consider that his Honour did not so err, the issue of necessity becomes academic.  Nevertheless, in my view it has no merit for two reasons.  First, the evidence established that Mr Laurie’s evidence was both transcribed and videotaped.  Second, during the course of argument on the application to disqualify him, his Honour made clear that no question of necessity arose in the present case.

I will find the transcript reference for that in the recusal application.

GUMMOW J:   Is this for the Mowbray litigation proceeding as well.  Is there any indication in the material of that?

MR SACKAR:   I am so sorry?

GUMMOW J:   What was happening in the Mowbray litigation after 2006?

MR SACKAR:   The Mowbray litigation – I will just have a look in the affidavit again.  It is no longer extant.  Your Honours will find the history of the Mowbray litigation at page 110 which is part of Mr Pagent’s affidavit.  Relevantly, in paragraph 67:

The Tribunal handed down its judgment on the Discovery Motion on 30 May 2006

On 5 July 2006, the Tribunal made orders dismissing Brambles’ cross‑claim with no order as to costs -

which was the Brambles’ cross‑claim.

HEYDON J:   That is presumably a consent order, is it not?

MR SACKAR:   Yes, I believe so.

GUMMOW J:   Thank you.

MR SACKAR:   So that is the history.  With respect, what we say, or at least what we do say in relation to his Honour’s judgment on refusing the recusal that for the various reasons advanced it is either not relevant or alternatively carries or should carry little, if any, weight.

There may be judgments where judges refuse to recuse and where some insight into the workings of the Tribunal, in respect of which the judge gives a judgment, might provide some insight to issue such as necessity.  For example, the judge may make comment about the way in which a list operates or the way in which proceedings need to be or are to be proceeded with, but here the necessity issue was rendered irrelevant by his Honour’s remarks.

GUMMOW J:   Nothing seems to be made of it, but to my mind the question is, given the order set out at page 102 that this judge was to have this case and to be the trial judge, you then did not move promptly after 30 May in that year.

MR SACKAR:   They are the facts.  The question, though – first of all, his Honour accepted the proposition that there was no necessity, at page 61 of the appeal book in the penultimate exchange on that page where his Honour says, “Well, there is no necessity here”, and the question then becomes, the discretionary argument, that is the delay argument, not having been ventilated before his Honour nor, as I apprehend it, before the Court of Appeal, there is no issue being taken and, indeed, I am not entirely sure that the issue was taken here.

GUMMOW J:   It would have been a factor present to my mind on the special leave application, however, but anyhow, you have your special leave.

MR SACKAR:   I hear what his Honour says, but we have not dealt with that issue and if it is to be dealt with, then we would wish to say something about it and I will say it at an appropriate time.

FRENCH CJ:   Thank you, Mr Sackar.  Yes, Mr Jackson.

MR JACKSON:   Thank you, your Honours.  May I go first to the passage in Johnson v Johnson 201 CLR 492, which was referred to earlier, at pages 492 and 493. Your Honours, if I go to paragraph 12, first of all, on page 492, there is a reference there by the five members of the Court to the principle underlying the test and then the test is stated as being, at the top of 493:

“If fair‑minded people –

then your Honours will see the next word –

reasonably apprehend or suspect that the tribunal has prejudged the case, they cannot have confidence in the decision”.

Your Honours will see a reference again in the next line to:

The hypothetical reasonable observer . . . At the same time, two things need to be remembered:  the observer is taken to be reasonable; and the person being observed is “a professional judge –

Your Honours, when one comes to the reasonableness aspect that is dealt with and the context in which that takes place, that is dealt with in paragraph 13 and your Honours will see particularly that it said:

Whilst the fictional observer, by reference to whom the test is formulated, is not to be assumed to have a detailed knowledge of the law, or of the character or ability of a particular judge, the reasonableness of any suggested apprehension of bias is to be considered in the context of ordinary judicial practice.  The rules and conventions governing such practice are not frozen in time.

Your Honours, one has to, in applying that test, in our submission, look to see what is the decision that is said to give rise to the reasonable apprehension of bias.  I said “the decision” because one is talking that class of apprehended bias.  Your Honours, one sees immediately that the type of decision involved is not a final decision in a proceeding, it is one which is interlocutory and stated to be.  I will come back to that, your Honours.  The second point we would seek to make, your Honours, is that if one looks at the decision that is the foundation of the claim, one cannot only take the part that suits one without looking at the qualifications that are stated in it, and I will come back to that also.

The third feature, your Honours, is this, that this is a case perhaps slightly atypically where the judgment which is relied upon to found the contention of apprehension of bias is one which itself states, really, in unexceptional ways the principles of law that someone reading it might have to take into account in deciding whether it could give rise to the apprehension of bias, and by that I mean, to put it shortly, that the judge clearly distinguishes between the type of decision he is giving and one which might be made at the conclusion of the Mowbray proceedings.  He distinguishes between evidence which might be given before him and evidence which might be given at the trial and he also distinguishes between evidence which is hearsay and evidence which is not hearsay.  The reasonable observer should, in our submission, be taken to be aware of those matters and to have read the whole of the judgment. 

Your Honours, if I could come to then to the reasons for judgment in Mowbray.  Your Honours will see that what really lies, in our submission, at the heart of the contention is to be found in the findings which are in paragraphs 56 and 57 which are at page 248.  Your Honours, the question which really arises in relation to them is whether they were sufficiently unqualified or inherently of such a nature that the fair‑minded observer might think that the judge would not be able to eradicate them from his mind in determining not, one observes, Mowbray but the present case.  Your Honours, could I deal with several aspects of that.

The fist is the context in which the earlier decision was made.  Your Honours, it was not a trial, it was an application for discovery by a person not a party to the present proceeding, and one can see that by looking at paragraph 1 of the reasons for judgment in Mowbray.  I will come back to that in just a moment, your Honours.  The proceedings of their nature were not final, they were interlocutory and, secondly, the second aspect of it is that the actual findings made by the judge – and I am speaking, just for the moment, your Honours, about paragraphs 56 and 57 – were expressly stated to be based on the evidence then before the judge and in that application and, your Honours, inherent in that, in our submission, is a recognition that the evidence may be different at a final hearing in that matter and, similarly, or perhaps a fortiori, in a trial in a different matter such as this.

Your Honours, I said that the findings were expressly stated to be subject to the evidence then before the judge, and one can see that in the opening words of paragraph 56 of page 248, “on the present state of the evidence”.  It is the opening words.  Then, your Honours, one sees also in the opening words of paragraph 57 “In the absence of evidence to the contrary”.  It is plain that the judge is speaking of the situation on the evidence before him at that point. 

Your Honours, those qualifications, in our submission, are ones that should neither be disregarded nor muted and, your Honours, inherent in them is the statement that different evidence may give rise to different results and in that regard, if I could just say one further thing, if one looks at the last sentence of paragraph 57, which is the ultimate finding, it is of course subject to the first sentence of the same paragraph.  It should not be read in isolation, your Honours, and it should not be taken out of context.  It should be read in the context in which it appears and that is in the two paragraphs 56 and 57, each of which starts with the qualification to which I have referred.

Your Honours, the third matter to which we wish to refer is that the passages in the reasons in Mowbray, both leading to and following paragraphs 56 and 57, emphasise the provisional and interlocutory nature of the decision.  Your Honours, I want to take you to a number of these passages.  I will do as briefly as I can and I do so appreciating that my learned friend has referred to them to put a particular emphasis on them.  We would seek to put a different one on. 

Could I refer your Honours in passing to the first paragraph for the reasons for judgment in Mowbray at page 221.  The person relying on this judgment is giving rise to an apprehension of bias.  It should be presumed to have read paragraph 1 and identified what the nature of the proceeding was.  One goes then to paragraph 19 at page 228 to a reference to Mr Gulson’s evidence.  Your Honours, we would differ I think, and I do not think in the end it matters very much, from our learned friend’s characterisation of the evidence of Mr Gulson just in this respect.

You will see in paragraph 19 that the judge said in about line 39 that he had given evidence, evidence before him and two written statements by him had been tendered.  Your Honours, the extracts that appear on page 229 and going through to page 223 do seem to be extracts, not from his oral evidence, but from a statement.  You will see at the bottom of page 228, he said, “I set out extracts from that evidence”, and he seems to be speaking of the transcript in United States.  Your Honours can see, for example, in the first printed line on page 229 a reference to page 9 and then about line 35 a reference to page 12.

GUMMOW J:   Just looking at page 228, the third last line, “transcript of evidence . . . in United States of America.”

MR JACKSON:   That is the first of the two written statements, we think, your Honour.

GUMMOW J:   “I set out extracts from that evidence”, that is it, I suppose.

MR JACKSON:   That is what he sets out from that.

HEYDON J:   I am having trouble getting this straight.  My reading of 229 is that that is a transcript of oral answers given to oral questions.  Is that your position?

MR JACKSON:   Yes, it is.

HEYDON J:   Right.

MR JACKSON:   But not in the ‑ ‑ ‑

HEYDON J:   Not before Judge Curtis.

MR JACKSON:   No, that is so, your Honour.

HEYDON J:   But before some American authority.

MR JACKSON:   Yes, your Honour.  It is as simple as that, your Honour.  That is the point we make about it, because I rather thought that at the end of our learned friend’s submissions the impression may have been left that he was speaking about oral evidence given before Judge Curtis in the ‑ ‑ ‑

FRENCH CJ:   The pagination might suggest it was some form of deposition, I suppose.

MR JACKSON:   Yes.

KIEFEL J:   This is the interrogation process they have for discovery.

MR JACKSON:   Yes, that is so, your Honour.  My learned friend accepts what I say.  Your Honours, if I could move on from that paragraph to page 233.  Paragraph 21 deals with the interlocutory nature of proceedings and you will see the heading, “75 Exception:  interlocutory proceedings” and dealing with the question of the hearsay rules.  Your Honours, if I could just say in relation to paragraph 22 at the top of page 234, your Honours will appreciate that the issue there being dealt with is essentially that – that is about line 19:

The safeguard against unreliability is the discretion reserved by s 135 –

then you will see –

if its probative value is substantially outweighed by unfair prejudice –

and it is to that issue, the unfair prejudice issue, that one sees the comments that are made in the third sentence of paragraph 22:

BATAS has had the opportunity to investigate his claims and call evidence in rebuttal.

The judge is simply observing that they had the opportunity to do so, did not do so and that is relevant to the question of prejudice for the purposes of section 135.  Your Honours, could I go then from that, continuing with the reasons for judgment, to paragraph 23.  You will see the way in which the section 125 issue arose.  You will see then, if one goes to page 238 in paragraph 29, the judge commences the paragraph by saying, “For present purposes” and the present purposes are the application with which he is dealing.  He accepts the BATAS submission.  You will see then in paragraph 30 on the same page, in the last four lines of paragraph 30 he said, “I accept for present purposes”, again in the interlocutory matter.

Then if one goes to paragraph 44, your Honours, and really at the top of page 244, the paragraph commences on the preceding page, he says on the fourth line on page 244 “and that which, on the present evidence before me”, your Honours will see a reference to that.  Then your Honours will see at paragraph 45 the judge says:

I should make it plain –

that is, plain to anyone reading the judgment presumably –

that BATAS has at all times maintained that its document management policies and practices at no time permitted selective destruction of prejudicial documents.

Then his Honour says in really the clearest terms –

The assertion by Brambles to the contrary remains a live issue for the trial.

Now, your Honours, that is a very clear distinction being drawn between the matter he was deciding and what he might decide at the trial.  Your Honours, if I could go then to paragraph 49 at page 245, your Honours will see that the judge in the first sentence uses the expression “is vitally important to Brambles in the present application”, and then he is speaking about the discovery process when he says that.  Your Honours, if one goes then to paragraph 50, that paragraph commences with the expression, “An interlocutory finding”.  Your Honours, if one goes from that to paragraph 52, page 246, the judge says:

Mr Gulson’s evidence stands uncontradicted.  He has not yet –

“not yet”, your Honours will see –

been tested by a contrary version of events.

Now, your Honours, it does not appear from the material how long Mr Gulson was cross‑examined for.  He had given evidence, as you have seen from an affidavit and two other documents that were tendered.  The extent to which there was cross‑examination was entirely a matter – I am sorry, your Honours, I will start again – in circumstances where the judge allowed cross‑examination of the witnesses and where cross‑examination was sought, it was entirely a matter for BATAS on an interlocutory application to decide the course that it would take.  Now, the course that it took was as your Honours will see set out at paragraph 52, and, your Honours, the powder, one might have thought, would be being kept dry for the trial of the matter if the matter – a difficult decision has to be made on these matters, your Honours.

HEYDON J:   You pose some rather fanciful attacks on credit in cross‑examination.  That is keeping the powder dry, is it?

MR JACKSON:   Well, I am sorry, your Honour.  Well, yes, it is, your Honour.....say that.

HEYDON J:   It is pouring seawater all over it.

MR JACKSON:   Well, the point I am seeking to make, your Honour, is that the judge had said – you will see at paragraph 45 to which I have referred – that it was a matter for the trial in the end, and there would be a trial, and it was a matter for BATAS to decide, in effect, what it was to do, and that is the course that it chose, the one that is set out in paragraph 52.  He said, “He has not yet been tested by a contrary version of events”, and your Honours will see the word “yet”.  But, your Honours, one does need to bear in mind that what one sees in the next paragraph, paragraph 53, where the judge says:

There may be good reasons why BATAS has not yet joined issue with . . . however I must determine the proceedings now before me on the evidence now before me.

BELL J:   His Honour was presumably satisfied, for the purposes of the cross‑examination going to the extraneous credit issues, of the matters required by 103 of the Evidence Act.  There is a certain degree of artificiality in suggesting that Mr Gulson’s credit was not at issue, is there not?

MR JACKSON:   Your Honour, his credit was, to a degree, attacked, I suppose is right to say.  I think it is right to say, the judge was asked, in effect, not to believe him.  But having said that, it was an attack made to the extent that BATAS chose to do so.  Your Honour, I do not know that I can put it any differently from that.  But could I just say, your Honours, that this a matter upon which it may or may not be appropriate to look at what the judge said in his second judgment in the present case at page 88.  Your Honours, at paragraph 19, you will see that he said:

To the extent that Mr Sackar, unassisted by evidence, presses his factual assertions, it is apparent from my reasons that, far from being tested by cross‑examination “in a red‑blooded way” Mr Gulson’s credit was subject to no more than a peripheral attack.

Your Honours will see the next two sentences including, particularly, the last one.  Your Honours, the material in determining whether a fair‑minded person would take the view provided for by the test, it is a question to determine what was done, and you will see that in paragraph 52 at page 246 the judge is endeavouring to say, in the judgment in Mowbray, what actually took place, and it does not amount to all that much. 

Your Honours, if I could go then to paragraph 55 at page 247.  Your Honours will see a reference in the third line of paragraph 55 it is “In the absence of evidence from BATAS” and then, your Honours, it goes on to say at the top of the next page, the fourth line on page 248 “This may be explained at the trial”, and, your Honours, he is clearly contemplating that – I should have added, your Honours, in the last sentence of paragraph 55, you will see the last line where he uses the phrase “has not yet been rebutted” in the context of saying “This may be explained at the trial”.

FRENCH CJ:   You do not say that in substance he was undertaking a 125(2) exercise?

MR JACKSON:   Yes, your Honour.

FRENCH CJ:   He did not articulate it that way.

MR JACKSON:   Could I just say something about that, your Honour.  If one goes to that section which you will see, I think, set out at page 234 of the appeal book, you will see that subsection (1) is expressed in a way that says:

This Division does not prevent the adducing of evidence of:

(a)      a communication made or the contents of a document . . . in furtherance of the commission of a fraud or an offence –

et cetera.  So it states the rule as such.  Then one comes to subsection (2).  It says:

For the purposes of this section, if the commission of the fraud, offence or act, or the abuse of power, is a fact in issue and there are reasonable grounds for finding that:

…

the court may find that the communication was so made or the documents so prepared.

Now, subsection (1) is really a statement, in a sense, of what – if I can put it this way – the substantive law of evidence is.  I appreciate that is mixing terms a little, your Honours, but having said that you will see subsection (2) opens with the words, “For the purposes of this section”.  It seems to contemplate, really, as one would ordinarily expect that the issue is one which is to arise in the context of proceedings.  It can arise in the context of final proceedings, of course, but can also ‑ ‑ ‑

FRENCH CJ:   That applies with equal force to final proceedings – (2) applies with equal force to final proceedings.

MR JACKSON:   Subsection (2) obviously would apply in final proceedings, but, your Honour, the issue can arise also if proceedings such as those that were brought by Brambles because that was an interlocutory proceeding in what might have been called third party proceedings in the past.  Your Honours, one sees that subsection (2) can really be divided into two parts.  I am not talking about (a) and (b) but divided into two parts in the sense that the finding is to be that the communication was so made or so prepared but what is necessary to make such a finding is set out in the opening words.

Could I just say, your Honours, that if one looks at, for example, paragraph 57 at page 249 and also of course, paragraph 56, there is not a particular reason, in our submission, why one would take the view that the judge was doing other than performing the function set out in section 125(2), that is, he had formed the view that there were reasonable grounds for finding in terms of (2)(a) or (b) and then making such a finding.

BELL J:   When you go to paragraphs 29 and 30 at appeal book 238, his Honour’s reference to fraud sufficient to “fraud sufficient to enliven s125” involving “an element of dishonesty” seems to be picked up again when he speaks of fraud within the meaning of section 125 in 56 and 57.  I would understand that to be the basis of Justice Allsop’s conclusion that the finding was not a provisional one with respect to fraud.

MR JACKSON:   Your Honour, may I come back to that in a moment, because I did want to go to Justice Allsop’s reasons in a moment, but could we just say, I had really got to paragraphs 56 and 57, I will come back to them.  What I was going to say about them was this, your Honour, that if one really just paused at that point, we would submit that a fair‑minded reader of the Mowbray judgment to that point would take the view that the judge was deciding the case on the basis of the evidence before him on the application and was specifically stating that things might be different at a final hearing.  Your Honours, that is, after all, why paragraphs 56 and 57 each commences as it does.  Your Honours, when one goes also beyond paragraphs 56 and 57, that approach is maintained.  Could I in that regard refer your Honours to paragraph 63 at page 252, the commencing part:

This evidence of Mr Welch has not yet been challenged.  He was not required for cross‑examination.

You will then in paragraph 69 at page 255 the reference in the first sentence:

on the evidence of Mr Gulson, Mr Welch, and Dr Wigand presented on this application, Brambles has –

and then you will see the word “prima facie” in the next line.  Then, your Honours, if one goes to paragraph 81, a reference in the last 4 lines:

unnecessary to make interlocutory findings . . . when the events of which he speaks will be central to an important issue at the trial.

The last two references, your Honours, paragraph 85, the second line where he refers to Mr Middleton having made a:

concession:  For the purposes of this proceedings only. 

Then, your Honours, in paragraph 87, the last sentence; he declines to make a particular order saying that:

Brambles will no doubt suggest possible inferences to be drawn from facts proved at the trial.

Your Honours, could I come back then to ‑ ‑ ‑

HEYDON J:   Is this is a convenient moment?

MR JACKSON:   Yes, certainly, your Honour, I was going to move to Justice Allsop’s reasons.

HEYDON J:   Yes.  There is something which I do not think appears in Justice Allsop’s reasons and I do not think it was really put in the arguments by the appellant either.  Let us assume that you are right and Justice Allsop is wrong about paragraphs 56 and 57, namely, they are not statements of actual persuasion but merely provisional, as it were, findings, the thing that I find a little difficult to grapple with is paragraph 55, and there are probably other passages as well.  Let me start in this way, and I trust it will not upset Mr Sackar too much, what the judge is making provisional findings about is a really shocking state of affairs and any hypothetical reasonable observer would be shocked by it.

Judge Curtis does not seem to mind too much about people getting rid of documents just because they might come up in litigation a little bit later.  What he seems to regard as the sting of the allegation is the putting up of the false explanation of it all; a sort of false cover of destroying a lot of innocent as well as damaging documents, but a reasonable hypothetical observer, as I say, would be deeply troubled by what Judge Curtis was making provisional findings about, and a reasonable hypothetical observer might say, “I just do not find it credible that Judge Curtis, having made these supposingly provisional findings, will suddenly turn around at the trial and say, ‘What I said in many pages of my interlocutory is all quite wrong.’  A perfectly satisfy explanation has been given for this conduct.  Mr Gulson is mad, or bad, and I withdraw what I said.”  Is not the reasonable hypothetical observer likely to say, human beings are just not like that when you are dealing with conduct of this character?

MR JACKSON:   Well, your Honour, it goes back to, I think, the second point I tried to make when I was commencing these submissions and that is that one really cannot pick and choose.  What I mean by that is that your Honours referred to paragraph 55 at the bottom of page 247.  If one goes over to the remainder of the paragraph on page 248, you see he says:

This may be explained at the trial, however -

and then he goes on to say that the obvious inference has not yet been rebutted.

HEYDON J:   You may think the accused was in the house merely because he was feeling cold and it was raining outside or you may think, as the prosecution thinks, that he was in there to steal things.  It is entirely a matter for you.  It is a matter for you to examine these explanations.

MR JACKSON:   I appreciate that.  I think I once acted for a man who had that type of excuse. 

HEYDON J:   Did he get acquitted?

MR JACKSON:   Difficult to recall.  Having said that, your Honour, if I may say so with respect, what your Honour has put to me does, in a sense, overstate what is there.  What he is saying is that he is dealing with there some evidence which is direct evidence.  This is in the context where he has earlier referred to what is hearsay.  He is saying there is direct evidence of something that Gulson himself did and he said, third line of paragraph 55:

In the absence of evidence from BATAS, I find it difficult -

et cetera.  Then he makes, on the next page in the same paragraph, the two further qualifications to which I have referred. 

Now, your Honours, the point I seek to make is with taking any statement one has to take the good and the bad together in a sense because these are direct qualifications to what he has said and they are qualifications which indicate that he may have a different view if the matter came to a trial.  I do not think I can take it beyond that.  The point I seek to make is that one cannot really divide up the fish of paragraph 55 into the body without taking the fins and the unpleasant other bits that are with it.  Your Honours, could I come then to ‑ ‑ ‑

GUMMOW J:   Just looking at paragraph 47, the first and second sentences here, is that because the question was not being debated before him - paragraph 47 on page 244?

MR JACKSON:   Yes, your Honour.  It is in a sense a kind of musing by the judge, I suspect.

HEYDON J:   Well, there is a decision of the New South Wales Court of Appeal that answers the question decisively against legality - McPherson’s Case.

MR JACKSON:   Yes, your Honour.  All the judge really is saying is “I am really not just deciding the question.  I am deciding the things that are being argued before me really”.  I do not know if I can take it beyond that, your Honour. That is all he seems to be doing.  Your Honours will see the reference to paragraph 46 where he is just following the Victorian Court of Appeal - he appears to be following what the Victorian Court of Appeal had said.

Your Honours, may I come then to what was said by Justice Allsop at page 329.  Your Honours will see our submission is that his Honour’s conclusion and the reasoning behind it should not be accepted, with respect.  At the heart of the reasoning of Justice Allsop appears the proposition which is at the end of paragraph 10 where he says the findings that were made - and these referring particularly, I think, to paragraphs 56, 57 and 69, that the findings were “relevantly unqualified”. 

But, your Honours, the correctness of that proposition depends on what is meant by “relevantly” and we would submit why is such a finding not relevantly qualified if it is prefaced by, for example, the commencing words of paragraphs 56 and 57, and also referring to - I also will not refer again - but to the other passages to which I referred in the reasons for judgment in Mowbray. 

Your Honours will also see that at paragraph 12 of his reasons, Justice Allsop at page 331, himself recognised or accepted that it was clear that any further consideration of the issue would be on the basis of evidence then laid before Judge Curtis.  Now, your Honours, his Honour then goes on to say that he would “expect nothing less”.  That is the last sentence of paragraph 12.  But, your Honours, of course one would expect that but that is to divert attention from the fact that the judge in his reasons in Mowbray had distinctly adverted to the task that he was performing and to the fact that it was not the trial of that matter.

Now, your Honours, you will see at paragraph 10, page 330, that Justice Allsop appears to have taken the view, and I am looking at about line 28, your Honours:

It is clear, however, that his Honour went further.

What he is saying is that he went further than saying that the evidence was capable if established, “of establishing fraud”, but, your Honours, of course in performing the task that he had to do under 125(2), the judge had to make a finding.  He made a finding expressed in terms of it being that on the evidence before him there was actual dishonesty. 

Your Honours, the reasoning of Justice Allsop has, with respect, underlying it a concentration on particular parts of the judges’ reasoning in Mowbray but, your Honours, why should the fair‑minded observer be able to take part only of the judges’ reasons in circumstances where the part disregarded is an integral part of the whole concept.  Your Honours, those are the principal submissions we wish to make.  May I just add a couple of other things?

FRENCH CJ:   On your submission, does the fair‑minded observer need to know anything more for the purpose of supporting your case than that his Honour limited his finding to the evidence before him and said he was doing so?

MR JACKSON:   The fair‑minded observer needs to, in our submission – I am sorry, I will start again your Honours.  The fair‑minded observer has to form a view.  The purpose of having the fair‑minded observer is to make a decision.  What does the fair‑minded observer look at and understand?  If one is talking about what the fair‑minded observer would look at in the ordinary course of events, the fair‑minded observer should, being a reasonable, fair‑minded person look at the whole of the decision that it is said gives rise to the apparent bias. 

Now, in doing that, what would emerge from reading that decision is what your Honour put to me, that is, that the whole decision was one that was interlocutory rather than final and the consequences of that were, at least in the particular case, spelled out by the judge that there were issues to be determined at the trial and the determination of those issues now did not mean that they would necessarily be decided the same way.

Your Honours, our learned friend has spoken about the minutiae and so on but the fair‑minded observer is not, as our learned friend accepted at the start of his submissions, a bush lawyer.  But the less knowledge of the matter that one attributes to the fair‑minded observer the more likely it is that the fair‑minded is a kind of bush lawyer who is free with an opinion but does not have much to back it up with.  Your Honours, the point I would seek to make really is that even if the word “interlocutory” causes difficulty there are things called ‑ ‑ ‑

FRENCH CJ:   That might be better connected with reality.

MR JACKSON:   If the word “interlocutory” is a difficult word with a number of syllables in it, there are dictionaries your Honour that fair‑minded persons can sometimes look at.  Your Honours, could I just ‑ ‑ ‑

GUMMOW J:   There is a problem, perhaps, that begins with paragraph 8 of Justice Allsop’s reasons on page 329:

The finding was one of fraud.  It was not provisional.  It was not merely a conclusion ‑

It was “relevantly unqualified”.

MR JACKSON:   The point I was seeking to make before, your Honours, was that what Justice Allsop has done, we would submit with respect, has been to concentrate on parts of the reasons of Judge Curtis in Mowbray but to leave out the qualifications.  When he says in paragraph 8:

It was not provisional.  It was not merely a conclusion that the evidence before him was sufficient ‑

and then goes on to say it was “relevantly unqualified” we would accept that on the reasoning of Judge Curtis, he found in Mowbray that on the evidence before him a finding of fraud was warranted.

FRENCH CJ:   He could not make a provisional finding, could he?

MR JACKSON:   No.

FRENCH CJ:   This was not an interlocutory injunction; he had to make a finding of fraud for the purposes of 125, either on the basis that the evidence persuaded him to the appropriate standard that there had been fraud or that there were, in the terms of 125(2), reasonable grounds for finding.

MR JACKSON:   Yes, your Honour.  He had to do that, but he did it – if I could say this - in a context and with qualifications.  The point we would seek to make about the use of the term “relevantly unqualified” in paragraph 8 and also at the end of paragraph 10 in Justice Allsop’s reasons is that that (a) takes the findings out of context and, more particularly, leaves out of account the qualifications that were expressly stated in relation to the findings.

GUMMOW J:   I think your opponent’s position has to be – I think maybe it is – that this judge simply could not have sat in any subsequent proceeding of this ‑ ‑ ‑

MR JACKSON:   Exactly, your Honour.  It would have to be that, your Honour, because these are – “subsequent” might not be exactly the right word, but they are different – they are other proceedings.  We have not taken any point about time, but it was an issue that took a while to germinate including a trip to Texas to get the evidence from a witness.

Your Honours, could I go on to just deal with a couple of matters and I just wanted to distinguish, if I may, a couple of decisions in which disqualification was required because of prejudgment.  One of them is R v Watson; Ex Parte Armstrong (1976) 136 CLR 248. Now, your Honours, that was a case where a judge had formed a settled view that neither party was worthy of credit, although he had not seen either in the witness box and the matters he relied on had not been examined in evidence or argument. Your Honours will see a summary to that effect of the case in Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 at 101 by Justices Gaudron and McHugh.

Your Honours will recall that Johnson v Johnson was a case where the facts were very similar to those of Watson and, your Honours, that was really the argument in Johnson v Johnson, was that this was the same sort of case and that is why one saw the recasting that one sees in paragraphs 12 and 13 in Johnson v Johnson.  Your Honours, the second case to which I wished to refer was Livesey v New South Wales Bar Association 151 CLR 288. Your Honours, that also was distinguished in Laws 170 CLR at page 101, and if I could just take your Honours to that for a moment?

FRENCH CJ:   Now, you are taking us to Laws?

MR JACKSON:   Yes, I am sorry, your Honour, Laws.

FRENCH CJ:   Yes, all right.

HEYDON J:   The citation of cases which is taking place is occurring at breakneck speed.

MR JACKSON:   I am sorry, your Honour, I will endeavour to slow it down.  I was seeking to distinguish two cases:  one being Watson; Ex Parte Armstrong, the other being Livesey.  Each is referred to in the reasons for judgment of Justices Gaudron and McHugh in Laws 170 CLR.  If one starts at the bottom of page 99, you will see that there is a reference to R v Watson at the bottom of page 99 and the top of page 100.  There is a discussion of the degree thought appropriate, the degree of persuasion thought necessary.  Then one sees at the bottom of page 101, it is said:

The present case is incomparable to Livesey where two judges of the New South Wales Court of Appeal had made findings in earlier litigation –

et cetera.  If I could just pause to say there, your Honours, that the situation in Livesey was that the judges had made findings in other proceedings which were final proceedings, so the findings that are referred to are not interlocutory ones.  If I could just go on then, your Honours, the passage immediately following deals with the situation in Watson; Ex parte Armstrong where it is said in the last three lines on page 101:

where the majority of this Court held that a reasonable observer would have been justified in thinking that the judge had formed a “settled view” –

et cetera.  Your Honours will see that set out at the top of the next page, and it was a very strong case, of course.  Your Honours, could I just say then that there is an area where one thing that is clear is that issues of this kind are ones on which minds may differ and that was adverted to in this Court in Livesey 151 CLR 288 at page 294, and what was said at page 294 - your Honours will see about a third of the way down the page there is a quotation from Justice Aickin and what was said that it:

can be a difficult one involving matters “of degree and particular circumstances may strike different minds in different ways” ‑

What we would say about that, your Honours, is that the Court’s statement in Livesey does not mean the fact that there is a minority view such as that of Justice Allsop or the fact that minds may differ is an argument always in favour of recusal.  Your Honours, that is apparent from the Court’s pronouncement in the passages that immediately follow on and could we refer to page 294 about halfway down the page in the passage that goes to the bottom of the page dealing with that aspect?

Your Honours, the last matter I wanted to say was this, that there are of course dicta in the Court to the effect that judges should not too readily accede to application for disqualification lest litigants succeed in effectively influencing the choice of judge in their own case.  You will see that referred to, your Honours, in Re JRL; Ex Parte CJL (1988) 161 CLR 342 at 352. Your Honours will see a passage in the reasons for judgment of Justice Mason ‑ ‑ ‑

GUMMOW J:   Yes, that is why I thought the statement at page 89 by the primary judge here was rather peculiar.  He accepted a submission that the threshold was very low.

MR JACKSON:   I am sorry.  Your Honour is referring to paragraph 89 ‑ ‑ ‑

GUMMOW J:   Yes, page 89.

MR JACKSON:   Page 89. 

GUMMOW J:   Yes, “the threshold of apprehended bias is very low”.

MR JACKSON:   I am sorry.  I must have the wrong reference.  Your Honour is referring to ‑ ‑ ‑

GUMMOW J:   Page 89 of the appeal book.

MR JACKSON:   I am sorry.  I thought you said pages 8 and 9.

GUMMOW J:   This case, this very case, the first sentence.

MR JACKSON:  

the threshold of apprehended bias is very low.

GUMMOW J:   Yes.

MR JACKSON:   Yes, your Honour, that is the ‑ ‑ ‑

GUMMOW J:   It is news to me.

MR JACKSON:   That is not right, in our submission, really.  The test has been set out in the cases to which reference has been made and if one goes to the passage I was referring to at page 352 of Re JRL; Ex Parte CJL, you will see particularly about the sixth or seventh line of that paragraph:

It needs to be said loudly and clearly that the ground of disqualification is a reasonable apprehension that the judicial officer will not decide the case impartially or without prejudice, rather than that he will decide the case adversely to one party.

Your Honours will see that adverted to through the remainder of the paragraph and then, in particular, the last five or six lines:

It is equally important that judicial officers discharge their duty to sit and do not, by acceding too readily to suggestions of appearance of bias, encourage parties –

et cetera.  Your Honours, in Johnson v Johnson 201 CLR 488 at 504, in paragraph ‑ ‑ ‑

GUMMOW J:   Paragraph 45.

MR JACKSON:   Yes, paragraph 45.  Thank you, your Honour.  That is the reference by Justice Kirby to those observations.  Your Honour, in Ebner 205 CLR 337 at 348 in paragraphs 19 and 20 there is a reference to a similar topic.

Your Honours, a passage from Justice Mason in CJL was picked up by the Court of Appeal in the United Kingdom in Locabail v Bayfield Properties [2000] QB 451 at page 480, paragraph 25. You will see in the passage commencing at about line G on page 480 there is a reference to “The mere fact that a judge, earlier in the same case” and your Honours would see the remainder of that paragraph. I said earlier, your Honours,

there was a reference to what had been said by Justice Mason in Locabail.  I said paragraph 25.  In fact, it is paragraph 22 on page 479, but I wanted to refer earlier to the last part of paragraph 25 to which I have just given your Honours a reference.  Your Honours, those are the submission we wish to make orally and we otherwise rely on our written submissions.

FRENCH CJ:   Thank you, Mr Jackson.  Yes, Mr Sackar.

MR SACKAR:   On the matter that Justice Gummow raised a moment ago on page 89 of the appeal book and the reference by Judge Curtis to the threshold being low, that is a reference, in my respectful submission, to the notion of the “two might” test because one thing is clear on all of the authorities in this area, the question of possibility is the basis upon which real possibility upon which apprehended bias is to be seen and determined and the notion of the low threshold is a phrase which I would like to take responsibility for but sadly, and I do not walk away from it, it is a phrase used by Chief Justice Spigelman to describe the “two might” test in a decision in McGovern v Ku‑ring‑gai Council on our list of authorities at 72 NSWLR 503 and his Honour refers to that in the sense in which, in my respectful submission, Judge Curtis was adverting to it in paragraph ‑ ‑ ‑

GUMMOW J:   I am sorry, which page in McGovern?

MR SACKAR:   Page 508, paragraph 14:

Although the Australian test for apprehended bias, as expressed in the terms of two “mights”, sets a low threshold –

and he goes on to ‑ ‑ ‑

GUMMOW J:   Where did his Honour get paragraph 14 from?

MR SACKAR:   I am so sorry?

GUMMOW J:   Where did the Chief Justice get paragraph 14 from?  I can understand why you latched on to it, but where did he get it from?

MR SACKAR:   From a fair reading of what he goes on to say there, it is the question, rather, the issue that has been time and again referred to in this Court, namely, that the person asserting an apprehension needs only to show that it is a real possibility, not far-fetched and defensible and that one does not have to show probability unlike, as Judges of this Court have remarked, might have been the case in the English context where the term “real danger” in the past had historically been used, although “real danger” was later to be defined as “possibility”.

GUMMOW J:   Yes, that is right.

MR SACKAR:   All I think the Chief Justice is there adverting to is that one looks at this from the point of view of the real possibility, hence might the adjudicator not ‑ ‑ ‑

GUMMOW J:   I think the result of what was being done in Australia was to express some disquiet that the English were pitching the standard too low after the Pinochet Case.

MR SACKAR:   Yes.  Well, too low on one view, too high on another, but imprecise and with a degree of ambiguity which, whether one used “real danger” or whether one used “reasonable suspicion”, was not to be approved over and above the real possibility test.  I think all the Chief Justice is referring to, and I think what I submit what Justice Curtis is referring to, is the notion of a real possibility not a probability.  That is a lower threshold than probability.

In terms of Judge Curtis’ judgment and in terms of whether it is relevantly unqualified or relevantly not, the point that he records as being the attack on Mr Gulson’s credit at paragraphs 51 and 52 on page 246 was that it was put directly to Mr Gulson that he had, in another context, engaged by artificial or sham transactions to take control of a corporation in breach of fiduciary obligations, further, by implication, that he had an axe to grind because he had asserted he was wrongfully dismissed by BATAS and it is in that context that his Honour said that although he says it had not yet been tested by contrary version, the “yet” is rather superfluous.  It simply had not, according to his Honour, been tested by contrary version.  What had been tested was his credit on the basis of a sham transaction and apparently some sort of grudge that he bore.  When one gets to paragraphs 56 and 57, when his Honour goes on to say:

I am persuaded on the present state of the evidence . . . for the purpose of a fraud within the meaning of s 125 –

both in that paragraph and, indeed, paragraph 57 he goes on to describe matters which clearly are dishonest conduct on the part of BATAS.  In paragraph 56 he says:

Those passages of Mr Gulson’s evidence . . . The terms of the evidence would appear to be so contrived –

et cetera, and they do so “entirely without scrutiny”.  Then in paragraph 57:

In the absence of evidence to the contrary, I infer that legal advice to the effect that destruction of documents . . . That advice gave

BATAS the confidence that, in the event that the terms of policy were revealed –

they could do certain things, which would give no clue to their true agenda.  So in both paragraphs, instead of reasonable grounds for finding in either paragraph, he goes on effectively to advert to a level of dishonesty as a backdrop against which he made the findings and in both cases that is why that is not a reference to prima facie case or reasonable ground, it is a reference back to dishonest behaviour.  That is why we say those paragraphs, as both Justice Allsop and Justice Tobias found, were not tentative for provision.  It would relatively ‑ ‑ ‑

FRENCH CJ:   If he were going on a reasonable grounds route, he would still have had to go through reasonable grounds for dishonest behaviour because it was accepted that dishonesty was an element of the fraud addressed by 125.

MR SACKAR:   Quite so, but what section 125 does not permit a judge to do is to prejudge an issue in the trial on a question of whether or not privilege can or cannot be maintained.  The question here is, did he go further than that which he was required to do under section 125 and we say he did.  They are our submissions, if the Court pleases.

FRENCH CJ:   Thank you, Mr Sackar.

MR JACKSON:   Your Honours, may I mention one matter.  It has been drawn to my attention in relation to the question of delay that, in fact, there was a submission made before Judge Curtis on the recusal application that it had taken a long time to make the application and that the point was not further taken and the consequence that would follow from that does not entirely appear, but the issue was not taken further in the Court of Appeal.

FRENCH CJ:   Yes, thank you, Mr Jackson.  The Court will reserve its decision.  The Court adjourns until 10 o’clock tomorrow morning.

AT 12.51 PM THE MATTER WAS ADJOURNED