British American Tobacco Australia Services Limited v Laurie & Ors

[2010] HCATrans 132

[2010] HCATrans 132

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S10 of 2010

B e t w e e n -

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

Applicant

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

Application for special leave to appeal

FRENCH CJ
HAYNE J
BELL J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 28 MAY 2010, AT 12.00 PM

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 applicant.  (instructed by Corrs Chambers Westgarth)

MR P.C.B. SEMMLER, QC:   May it please the Court, I appear with my learned friend, MR S.O. TZOUGANATOS, for the first respondent.  (instructed by Turner Freeman Lawyers)

FRENCH CJ:   Yes, Mr Sackar.

MR SACKAR:   The error which we say manifested by the majority decision in the Court of Appeal and which raises a matter of general importance is what level of knowledge or experience of the law should the lay observer be endowed with for the purposes of addressing the apprehended bias principle, bearing in mind that that principle in Australia at least is to be determined on the basis of possibilities, not probabilities.  We say with respect that the error on Justice Tobias’ part was to endow the lay observer with a deft ability to determine the difference between not only an interlocutory and a final hearing, but the difference between hearsay evidence and direct evidence.  I will return to that just in a minute.

Justice Basten endowed the lay observer with indeed, on one view of his judgment, a level of minutiae, that is, an understanding of particular and perhaps analogous provisions of the Dust Diseases Tribunal Act from which his Honour said the lay observer would necessarily view what Judge Curtis had done in the Mowbray Case, which is the previous proceeding. 

Now, the Mowbray Case, you will see from the written material, gave rise to two considerations.  The first was an allegation of document destruction.  That allegation is common in the Laurie matter.  Mr Gulson, the witness who was called before his Honour Judge Curtis in those proceedings which took five to six days to determine, gave evidence, was cross‑examined and Judge Curtis accepted on the material then before him ‑ ‑ ‑

FRENCH CJ:   That was his important qualification, was it not?

MR SACKAR:   Yes, it was, but as Justice Allsop says – the President says - the judge could do little else and indeed, he was bound to determine that application on the material before him.  But both Justice Allsop and Justice Tobias characterised what the judge did in these terms.  In the judgment of the President at page 27 of the application book, paragraph 8 – and we submit this is a correct characterisation of what the judge did – the President says:

The finding was one of fraud.  It was not provisional.  It was not merely a conclusion that the evidence before him was sufficient to characterise the case as sufficiently strong . . . A relevantly unqualified finding of dishonesty and fraud was made.

That is unsurprising, given that section 125 of the Evidence Act is the statutory embodiment of the Cox & Railton line of authority and therefore the point that was being argued before Judge Curtis was that the evidence of Mr Gulson, to which objection had been taken by British American Tobacco on the basis it was privileged, ought not to be sustained because of, if you like, the fraud or dishonest scheme of document destruction which British American Tobacco was set upon.  Justice Tobias equally at application book 62 says at the top of that page:

I further accept that there was nothing provisional or tentative about his Honour’s finding given the standard of proof to which he was required to be satisfied before making that finding.

What we say, with respect, is that, if I may stay with Justice Tobias just then for another moment, towards the bottom of that page in paragraph 115 on application book 62, his Honour’s reasoning process turns upon a notion that:

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 –

He goes on.  There, we say with the greatest of respect, the level of specialised and detailed knowledge and understanding of the law is not that of a law student, nor of a new fresh graduate, but that of an experienced, shrewd, litigation lawyer because it encompasses not only something which bedevils practitioners of all seniority from time to time, namely the difference between interlocutory and final, but it also suggests that the lay observer from their lay position would be able to second‑guess that there might be some strategic or forensic strategy which was at play and which might otherwise explain what occurred in the proceedings.

That gets to a level of, as I have said before, endowing the lay observer with such a degree of specialised and detailed knowledge of the law as to be contrary to principle.  The lay observer, of course, knows that judges should and do behave impartially, but there are human frailties which from time to time intrude into cases and remarks may be made and things may be said and done, which ideally ought not to have been said and done.  But once you start getting down to a level of detailed knowledge, then you start to arguably corrode the principle. 

The principle is not what the judge thinks ought to have been the case, what does the public think about the position.  The public is not utterly ill informed.  It does behave with a degree of common sense.  But the public is not in a position to debate the difference and the niceties, or distinction between interlocutory and final, nor would the public necessarily understand that a finding of dishonesty and fraud, for the purposes of a section 125 application, should be regarded as less serious or grave than a finding in another setting at another time and perhaps on different evidence.

HAYNE J:   At the root of the application is that there is an appearance of prejudgment.  Is that right?

MR SACKAR:   Yes.

HAYNE J:   What is it that you say is the subject of the apparent prejudgment?

MR SACKAR:   His Honour Judge Curtis in the Laurie proceedings, purporting to proceed to hear those proceedings where the question of document destruction arises again in a form virtually identical to that determined – or which was going to be determined in the Mowbray proceedings – and where Mr Gulson, the witness called in the Mowbray proceedings, whose credit was attacked and who his Honour accepted as a witness credible on the question of whether he should make a finding reasonably that there was a dishonest scheme afoot, is also going to be in evidence in the Laurie proceeding. 

So the appearance is that the matter substantially – that is, a core issue in the Laurie proceedings – has already at least in the context in which it was looked at, been determined by the same judge who will now sit to determine the same document allegation issue with arguably the benefit of the same witness, or at least a common witness, namely Gulson, who was put forward as the primary witness in the Mowbray proceedings, he having been the prior in-house counsel at British American Tobacco.

HAYNE J:   That seems to put the chief weight of the argument on the proposition that there is prejudgment on an issue that could be identified as whether the evidence of Mr Gulson persuades the Tribunal, the court, that BATAS was guilty of dishonesty and fraud.  Is that the way you portray the issue?

MR SACKAR:   Yes.

HAYNE J:   Not simply, or the more general issue, whether BATAS has been guilty of dishonesty and fraud in its document destruction policy.

MR SACKAR:   Yes.  I think I would prefer to put it both ways.  But certainly, at least the way your Honour ‑ ‑ ‑

HAYNE J:   Counsel want the belt and the braces.

MR SACKAR:   Yes, notoriously.  However ‑ ‑ ‑

HAYNE J:   That is what you are paid to do, I think, Mr Sackar.

MR SACKAR:   Well, if you do not ask.  Yes, and therefore, the niceties of the distinction between the procedural issues that Justice Tobias addressed, whether they be matters of evidence and the qualitative difference between the evidence of a hearsay nature and that of a direct evidence, bearing in mind that Judge Curtis, although he addressed certain issues of Mr Gulson as being hearsay, Mr Gulson did, along with one other witness, Mr Welch who came along before the judge in the Mowbray Case, and he gave more direct evidence of document destruction.

One must remember, as I think I have described this in another context, this was effectively a mini-trial on this issue.  It was dealt with over a number of days.  The Gulson dishonesty issue was not the only one, but it was the prelude not only to getting rid of the legal professional privilege, it was the prelude to an application which succeeded for further and better discovery of documents.

Now, Justice Basten in agreeing with Justice Tobias goes, we say, further and your Honours will see at page 71 of the application book, paragraph 142, his Honour commences in his eighth proposition in examining the statutory scheme under which the Dust Diseases Tribunal operates, and he then sets out in some little detail, paragraphs 25 and 25B, over the page at application book 72.  At paragraph 144, application book 73:

These provisions provide a statutory indication that issues can, in the circumstances identified, be pre-determined and may not necessarily be relitigated or reargued, even if the party adversely affected was not involved in the earlier proceeding.

Stopping there just for one moment, one can see, insofar as one tries to make some relevance to this proposition in a moment, that those provisions deal with issues about historical evidence and general medical practice, so that, for example, one could imagine an issue such that “asbestos causes mesothelioma” would not be an issue that the Dust Diseases Tribunal would expect over and over again to have to determine.  So what precise part that plays one only gleans when one reads the next few paragraphs of Justice Basten.  Although he says in paragraph 145:

These provisions were not relied upon [in] the present case; indeed, on the contrary, the Tribunal was at pains to identify the fact that it had not determined particular issues adversely . . . Nevertheless, the fact that a different approach might be available in respect of “issues of a general nature” indicates a statutory intention that the Tribunal not be required to reassess such matters repeatedly . . . 

Ordinarily, rules of procedural fairness would entitle a party to resist -

and then he goes on and 147, importantly:

All these are factors which the fair-minded lay observer should properly take into account -

Now, what is it supposed the lay observer – not the law student – but what should the lay observer take into account?  The fact that there are provisions which have very different import and different objectives in the Dust Diseases Tribunal, and which permit the Tribunal once and once only, or at least for limited purposes, determine issues, is somehow or other is it to be related to why the lay observer would think that there should be no reason why this matter should be re-agitated in some way or other.

It is a very difficult part of the reasoning process of Justice Basten to actually, if I may say with the greatest of respect, understand precisely what it is his Honour is suggesting.  It is something, which in his view, the lay observer “should properly take into account”, paragraph 147, and then the next paragraph:

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

(a)the earlier determination was made on an interlocutory basis;

(b)the Tribunal permitted re-agitation of the same issue, which had not been determined on a final basis;

(c)the interlocutory determination itself had not been challenged . . . and

(d)the interlocutory application was not accompanied by any objectionable or emotive language -

The admixture of the reasons advanced by Justice Tobias and Justice Basten, as I have said at the beginning of this, really have the effect of running contrary to principle, at least enunciated in this Court because we submit, with respect, that provided the court, personifying the reasonable man, were to take an approach which is based on broad common sense without inappropriate reliance on special knowledge or the minutiae of court procedural or other matters outside the vision of ordinary, reasonably, well‑informed members of the public, the right result might be obtained. 

But whereas here, the result is obtained only by endowing the lay observer with a highly degree of specialised knowledge, not only of the very fine distinction which often arises between final and interlocutory, or hearsay or direct evidence, but also the interstices and what statutory objective of the Dust Diseases Tribunal, sufficient on a basis of possibilities, not probability, to dismiss from his or her mind as a member of the public, watching justice being seen to be done, dismiss as reasonable a trial or a set of proceedings where an identical issue of document destruction is going to arise between the parties and the same judge, where at least Mr Gulson, the witness common to the first proceedings, is coming along a second time around, we say, with great respect, the Court of Appeal is wrong, and there is a matter of general importance given the attributes or the qualities which the Court of Appeal majority had to bring into play for the purposes of dismissing our application.

FRENCH CJ:   Did Judge Curtis rely upon section 125(2)?  His finding seems to be expressed in a way that would meet the requirements of subsection (1) - in Mowbray, I mean.

MR SACKAR:   Yes, I cannot give your Honour an immediate answer ‑ ‑ ‑

FRENCH CJ:   The reasonable grounds basis for a ‑ ‑ ‑

MR SACKAR:   We sent up Judge Curtis the other day.  I am not sure that – I will be corrected from my left‑hand side, I hope, in a moment.  I am not sure that his Honour Judge Curtis ‑ ‑ ‑

FRENCH CJ:   Paragraph 56 seems to be fairly unequivocal, I think.

MR SACKAR:   It is, and paragraph 56 is coupled unsurprisingly with paragraph 57, but at the end of paragraph 57, he says:

I find that the communications made for the purpose of obtaining that advice were communications in furtherance of the commission of a fraud within the meaning of s 125.

FRENCH CJ:   But he is not, in terms, relying on subsection (2).

MR SACKAR:   No.  One of the points that arises, of course, in part as a result of what your Honour the Chief Justice has said, once you start endowing the lay observer with these sorts of qualities, it would follow necessarily that the lay observer would be intimately familiar with the level of persuasion that might be needed by application of the Briginshaw test, and therefore, if one approaches it from that point of view, the lay observer would say to himself or herself “The judge must have been pretty satisfied about this fraud,” because first of all, he is ruling that legal professional privilege should no longer be relied upon, which in itself, is a fundamental right. 

Secondly, Briginshaw was really such that he was required to come to a significant level of persuasion, because he finds – and no complaint is made as to his construction of section 125, as I said it having the common law history of Cox & Railton behind it – but it was needed to require him to find a level of dishonesty for the purposes of determining whether or not the privilege would be lost.  The level of dishonesty, of course – it should not

matter what the issue was, but here the dishonesty was a scheme to engage in document destruction of the sort as would disadvantage putative litigants.

HAYNE J:   Just to go back to paragraphs 142 and following of Justice Basten, do I understand your point to be that it is a non sequitur to move from the observation that the Tribunal can decide some issues by reference to earlier judgments to a conclusion that that power bears upon whether there is an appearance of prejudgment of an issue, expressly stated not to be being resolved by reference to an earlier judgment?

MR SACKAR:   Correct.

HAYNE J:   Is that the essence of it?

MR SACKAR:   It is, and may I elaborate just ever so slightly.  The provisions, section 25 and 25B, have nothing whatever to do with section 125 or the issue that his Honour was there concerned with.  It seems sub silentio from paragraphs 147 and 148 that what he is really saying is that as part and parcel of the lay observer’s appreciation of the problem there is to be some analogy drawn from unrelated provisions because habitually, or as part of the structure or part of the statutory objective, if you like, of the Dust Diseases Tribunal, is indeed not to permit re-agitation of issues.  That is then to be looked at in the context of it being interlocutory, which adds another layer of complexity.  They are our submissions.

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

MR SEMMLER:   Your Honour the Chief Justice asked whether his Honour Judge Curtis had relied upon the reasonable grounds provision in section 125.  In our submission, it is not clear, but the likelihood is that indeed he did, and we say that for this reason.  In paragraph 56 he qualifies the words “I am persuaded” by the words “on the present state of the evidence” rather than simply absolutely communicating his level of persuasion, and at paragraph 57 he says “In the absence of evidence to the contrary, I infer”. 

What we ask your Honours to do is to take his words at paragraph 56, “I am persuaded” as being a way of describing that he finds, as a fact, that this conduct occurred.  Your Honour, we say that that is the most reasonable way in which to interpret what he says in paragraph 56 because of what he says in paragraph 69 much later where, in effect, he is summarising what he has done and what he has found.  He says in that paragraph:

I find that on the evidence of Mr Gulson, Mr Welch, and Dr Wigand presented on this application, Brambles has sufficiently discharged an onus of demonstrating, prima facie, that it can make good the allegations -

The use of that language is consistent with his reliance upon the reasonable grounds provision of section 125.  The section does not say that he has to spell out that he has done so.  It simply says that if there are reasonable grounds for finding, he may make that finding and, in our submission, that is what ‑ ‑ ‑

FRENCH CJ:   Your position would be stronger if he had so.

MR SEMMLER:   If he had relied only upon the reasonable grounds provision.

FRENCH CJ:   And said he was doing that.

MR SEMMLER:   It would be, but he was not obliged to do so, and we say the inference is he did in fact do that.

BELL J:   It is the concluding sentence in paragraph 57 that causes you some difficulty, is it not?

MR SEMMLER:   With respect, no, your Honour, because that is what he was entitled to do once reasonable grounds were made out.  The section says the court may find the communication was made “in furtherance of the commission of a fraud”.  All he is doing there is what he is entitled to do once he finds reasonable grounds.  The fact that he expresses it in direct language does not detract from that likelihood, given what he says in paragraph 69.

BELL J:   So you take issue both with the characterisation of the President and Justice Tobias?

MR SEMMLER:   We do, because the President’s concern about all of this was founded on two issues.  One is, he said the fact that he was actually persuaded – and for the reasons I have just articulated, we say he was not.  The reasonable interpretation of what he says is that when he says “I am persuaded”, he is saying in effect, “I make a finding”.  Second, his Honour the President was concerned about the gravity of the finding.  In our submission, that by itself cannot be a reason, simply because a judge is called upon to make an interlocutory finding which is about a grave matter that, with respect, per se, does not mandate that he be disqualified because of apprehended bias.

That could not be the case, with respect.  If that line of reasoning were followed it would bring the administration of justice into disrepute because the observer in the back in the court would say but all he is doing is what he was required to do.  Once a litigant invokes that section, which includes fraud, the judge is obliged to make a decision.  The decision has to be clear.  It has to be clear for the purposes of the interlocutory application, of course it does.  If he said something nebulous, then he would no doubt be criticised for it.  He had to make a clear finding, but what is clear for the purposes of interlocutory applications is not necessarily clear for the purposes of the final determination of the matter. 

That, with respect, is where my learned friend does not refer to all of the authorities.  He refers to Livesey’s Case and says the Court there said if a judge makes a clear finding and so on.  True it is the finding needs to be clear, but the context has to be looked at.  There are a whole lot of other issues that need to be considered, including the finality of the finding, the context in which it was given, and so on.

BELL J:   Just looking at the context, in paragraph 51, Judge Curtis refers to the attacks that were made on the credit of Mr Gulson and in the concluding sentence he rejects the BATAS submission that those matters make it “unsafe and unsatisfactory to accept” the evidence of Mr Gulson.  When one understands that Mr Gulson was cross‑examined at some length, and his credit was very much in issue, and his Honour on this question rejects the attack that was made on Mr Gulson, that starts to look like a clear finding, does it not?

MR SEMMLER:   With respect, no, your Honour.  We are confined, or at least the court in attempting to decide what the reasonable observer would think of all of this, is confined on BATAS’ own admission to a reading of what Judge Curtis said.  We cannot assume that Mr Gulson was cross‑examined for days and days.  We know the hearing took days and days – we know it took six days, from a reading of this document.  We cannot assume he was cross‑examined for that length of time.  With respect, your Honour, it is not correct to say that his credit relevantly was a matter that was very much in issue.  That cannot be gleaned from a reading of this document.  The credit issues were peripheral, they were collateral.  They were not about facts in issue.

BELL J:   BATAS invited the judge not to accept his evidence.

MR SEMMLER:   Because his Honour explained, with respect – Judge Curtis explained the basis for that application and it was that on some very, we would say, peripheral issues he had been cross‑examined and had made some admissions.  But none of those issues went to the facts in issue on the application ‑ ‑ ‑

BELL J:   They went to Mr Gulson’s credit, did they not?  That was surely the purpose of asking the question.

MR SEMMLER:   That is true.  They did go to his credit in a peripheral sense, but his Honour was entitled, with respect, to reach a conclusion that that did not detract from the overall effect of his evidence on the facts in issue.  The critical thing in all of this, when one puts oneself in a position of the reasonable observer at the back of the court, the critical thing is BATAS did not put the facts in issue as part of their cross‑examination. 

They did not say “Look, Mr Gulson, you are wrong.  None of these things were said to you, there was not this duplicitous document destruction program” and so on.  None of that was put.  What has happened is the judge has said “Yes, there was some cross‑examination on his credit.  Some admissions were made on very peripheral issues” and he articulates what they were.  “However, I accept that on the facts in issue, because this is uncontradicted, and such a dent in Mr Gulson’s credibility has not been made, I accept what he says on the facts in issue”. 

Now, not having put those matters in issue, not having appealed against what Judge Curtis found on that interlocutory application BATAS comes along here today and says there is a reasonable apprehension of bias.  The person in the back of the court would say “How can that be.  The judge only did what he was required to do once a litigant invoked section 125, and he did it on the basis of unchallenged evidence”.  There was no evidence to the contrary on the facts in issue.  He has made quite clear in the language he used that this is not a final decision.  That is the other issue.  It is canvassed by Justice Tobias.  He qualifies it.  He uses language which says “I am not shutting my mind to the real issue ‑ ‑ ‑

FRENCH CJ:   What you are putting here is the, if you like, extent of the escape clauses the judge wrote into his judgment ‑ ‑ ‑

MR SEMMLER:   Yes.

FRENCH CJ:   But what is put against you is, if you like, the capabilities, the standard of capability of the reasonable hypothetical lay observer ‑ ‑ ‑

MR SEMMLER:   Yes, I appreciate that ‑ ‑ ‑

FRENCH CJ:   ‑ ‑ ‑ as the special leave point.

MR SEMMLER:   I understand that, and that is ‑ ‑ ‑

FRENCH CJ:   That is what you really have to deal with, is it not?

MR SEMMLER:   That is correct, and I shall do that.  The first point we make about that is this.  The test for apprehended bias, in order to accommodate the various possible situations throughout this country where an application for disqualification of a judge may arise, in order for that test to accommodate those situations, it has to be flexible.  What my learned friend is inviting your Honours to say, “No, in this kind of case you cannot impute this kind of knowledge to the reasonable observer.  He must not know, or he cannot be reasonably said to know about particular procedural provisions of the Dust Diseases Tribunal Act” and so on.  We say the test has been left deliberately broad and flexible and all we are hearing about here is a dispute about the application to the facts in this case.

The second thing we say is this, that the authorities are not all one way on this issue of the reasonable observer not having a deeper understanding of the issues than my learned friend would suggest.  In the laws in the Australian Broadcasting Tribunal Case, at least two members of this Court decided that the reasonable observer could be taken to know that when a party files an unverified defence that the party does not necessarily believe the statements in that defence.  That is what the Court said.

That involves a level of sophistication of understanding of what happens in the legal world that many people would say, and no doubt my learned friend would say today, that is way beyond the kind of attributes that the broad generalisations that are being used in cases about what the reasonable observer is taken to know would encompass.  We say that is an example where the court in effect is saying the reasonable observer could be taken to know and understand enough about this to make a reasonable decision about it.  That is all that Justice Basten was saying.

The other point I make about my learned friend’s criticism of him invoking section 25 of the Dust Diseases Tribunal Act is that that was a subsidiary part of his Honour’s conclusion.  If you look at his conclusion in the appeal book, what he said was, in effect, “I agree with Justice Tobias” – this is at page 75.  He says:

When the reasoning of Tobias JA is viewed against the statutory scheme . . . and by reference to the reasons of the Tribunal . . . his Honour’s conclusion that prohibition should be refused is, in my view, strengthened.

His primary position is “I agree with the analysis of Justice Tobias”, which as we know was based upon the language used.  What other basis can one decide these issues except to look at the words that are used and decide whether they give rise to the reasonable apprehension.  His Honour Justice Basten said, having accepted Justice Tobias’ reasoning, “I offer the additional comment that there is this statutory scheme that can be taken into account, as well as his Honour’s own reasons”.

What we would say about that is this.  That is probably the strongest point – indeed, it may be the only point that the applicant for special leave in this case can identify as involving even some peripheral relevance to a major legal principle and we say that if that was perhaps in this case taking it a bit far, that was a factual issue.  The question of the existence of apprehended bias is a question of fact involving questions of degree.

His Honour clearly indicated in that passage that I have just read to your Honours that his primary basis was that he accepted Justice Tobias’ analysis and we say that there would be no miscarriage of justice in this case if that reasoning were allowed to stand.  Cases are different.  The Laws Case was different, and some judges might disagree with the opinion that the reasonable observer in the back of the court would know that what you put in your pleading is not what you believe necessarily.  All cases are different, and there should be no rigid test whereby this Court, in effect, further and further confines – and we would say in effect, dilutes the principle for apprehended bias.

The other issue in this case, your Honour, is that there is no issue of legal principle.  It is a factual matter.  The relevant test is well established.  It is broad and flexible, and there will not be any miscarriage of justice in this case if special leave is refused.  Why, because this applicant saw fit for a forensic reason not to challenge the key witness on the issue which the judge, in the end, inevitably decided in favour of the widow.  They decided we will not adduce evidence to refute Mr Gulson’s assertions given in evidence orally before Judge Curtis ‑ ‑ ‑

FRENCH CJ:   How do you make that point?  Do you make that as a point apparent to the hypothetical reasonable observer?

MR SEMMLER:   No, it goes to miscarriage of justice.  If your Honour’s concern is with the hypothetical observer’s level of knowledge then, your Honours, as I have indicated, it is a question of degree.  My learned friend made a number of comments about how could the reasonable observer know about the difference between interlocutory and final decisions.  How could he or she know about what evidence is admissible?  The answer is that he or she has read Judge Curtis’s judgment.  It is all revealed.  One simply has to read the first paragraph to understand that this is an application for further discovery of documents and later one reads that it is a different thing that is being considered from the trial of the issues on the merits. 

At paragraph 21, the thing that my learned friend says, how could the observer in the back of the court possibly understand that evidence admissible in an interlocutory application may not be admissible in a final hearing, he understands it because he has read paragraphs 21 and 22 of Judge Curtis’s ruling.  All of that information is available to the hypothetical observer in the back of the court.

FRENCH CJ:   What do you say about the effect of Judge Curtis’ explanation in declining to disqualify himself?

MR SEMMLER:   We say it could be taken into account there is clear authority to that effect.  Johnson v Johnson, Justice Deane in Webb v The Queen, it is accepted, and there is no issue of principle in that respect.  The other thing – I notice the lights are on – that we would say is that my learned friend has said, in effect, that Judge Curtis has required his client to, as it were, answer a “show cause” notice.  That is not correct.  Littered, or at least throughout Judge Curtis’ reasons, are – the escape clause that your Honour the Chief Justice referred to.  How else do judges or members of the public decide whether there might be an apprehension, a reasonable apprehension – and reasonableness is the touchstone in this area as in many areas ‑ ‑ ‑

FRENCH CJ:   But maybe that if you are wrong it simply means that the judge who is going to hear the trial of an action should not deal with an interlocutory application of that kind.  That would not be a novel proposition, would it?

MR SEMMLER:   Where is the line drawn, with respect?  How do judges know whether the subject matter is so grave and serious that they ought not to, perhaps, pass it on to somebody else.  That raises the very public policy consideration that Justice Basten referred to and he is not, as it were, Robinson Crusoe in that respect.  That has been adverted to in case after case, that while there is a public policy that underlines the double “might” test, the low threshold, that the public must have faith in the administration of justice. 

There is a countervailing consideration that is equally important, that the public must not be left with the impression that litigants like BATAS or anyone else can sit on their hands, do nothing, allow evidence to come out, a section is invoked, the judge has to make his mind up on it, he has to make a finding on it and they do not appeal against that decision, and then they come along and say “Apprehension of bias, that judge must go”.  That countervailing consideration ‑ ‑ ‑

HAYNE J:   That may simply suggest that there are considerations that are engaged within the context of a single piece of pending litigation that differ

from those that are engaged when there is separate and distinct litigation.  This is a second case, is it not?

MR SEMMLER:   A second case ‑ ‑ ‑

HAYNE J:   This is separate litigation from the litigation in which the finding was made that the evidence of Mr Gulson persuaded the judge that BATAS had been guilty of dishonesty and fraud.

MR SEMMLER:   It is a separate piece of litigation.  The other litigation – we know there was no appeal ‑ ‑ ‑

HAYNE J:   The determination of an interlocutory judgment in a piece of litigation may itself not lead to the further conclusion that that judge is disqualified from hearing further proceedings in that proceeding.  There may be separate questions engaged is all I am saying.

MR SEMMLER:   Yes, with respect, that is true.  The final thing ‑ ‑ ‑

FRENCH CJ:   Thank you, Mr Semmler, I think your time ‑ ‑ ‑

MR SEMMLER:   Your Honour, could I just say something on costs.  If your Honours were minded to grant special leave in this case we would ask that it be a condition of that grant that the first respondent widow’s costs be paid in any event and that the current costs orders in the Dust Diseases Tribunal and in the Court of Appeal should stand, and I can briefly articulate our reasons in support of that if that eventuality comes to pass.

FRENCH CJ:   All right, thank you, Mr Semmler.  Yes, Mr Sackar.

MR SACKAR:   Your Honour, the Laws Case is entirely distinguishable because in that case, part of the conduct and therefore part of the way in which the case necessarily had to be conducted was to juxtapose a matter pleaded by the Broadcasting Tribunal in defence in a defamation action brought by Mr Laws and then to contrast that with whether the Tribunal could, in the light of what they actually pleaded in a defence, continue to hear a matter in relation to Mr Laws before the Tribunal.  So there the pleading and therefore the lay observer’s view of the pleading was necessary in order to determine whether or not the test was conformed with or not. 

Your Honour, here, the person Gulson is going to be common and the dishonest destruction of documents is a common issue.  Judge Curtis not only made findings, we say, with respect, of some considerable clarity and rejected the attack on Mr Gulson’s credit, but he then went on to identify matters of corroboration of Mr Gulson’s evidence and in paragraphs 62, 63

and 68 he looked at the evidence of other persons and formed the view that Mr Gulson was corroborated and it is true his credit was attacked on matters which it might be suggested were collateral in that on a Browne v Dunn basis it was not put directly to Mr Gulson that, in fact, the version he gave as to the documents destruction point was itself untruthful, but the fact of the matter is his Honour then rejected that because it might be suggested that he had said things otherwise in different contexts he should not be nonetheless, or should not be accepted when he made his assertions about the document destruction.  That is a common activity to take place in many cases.

One is also left with this impression, we say, with respect.  One interpretation of what the judge has said is that he was not challenged because he could not be and that in the light of his then finding of dishonesty for the purposes of section 125 makes the finding graver.  Paragraph 116 of Justice Tobias on page 63 of the book makes it clear that his finding, which Justice Basten agrees with, as to why the observer would not reasonably apprehend the two “might” test was complied with was because of his or her understanding of issues of an interlocutory versus final, or hearsay versus direct.

It is that level of knowledge which Justice Tobias and Justice Basten necessarily had to find was part of the knowledge to be assumed of a hypothetical lay observer, which in this case and contrary, we say, to principle, led to the disqualification being rejected.  We say, with respect, that does give rise to an important point of principle for that reason.

The question of whether Judge Curtis’ decision ought to be regarded as relevant, my learned friend has Justice Basten only on that issue.  The President, Justice Allsop, did not deal with it.  Justice Tobias thought it was irrelevant, but we say it is nonetheless an important issue and one therefore gives rise to this consideration, invoking the hypothetical and therefore the objective standard, to what extent if ever would it be relevant for the subjective views of the same judge after the event or on an occasion of recusal in expressing his or her confidence in his or her ability to sit.  We say that that does raise an important point of principle, and we say what we say the answer to that should be.

FRENCH CJ:   Mr Sackar, what comment do you have to make on what Mr Semmler had to say about costs?

MR SACKAR:   If your Honour would just pardon me.  If that is a condition of granting leave, I am instructed to accept it.

FRENCH CJ:   Yes, thank you.

There will be a grant of special leave on condition that the applicant pay the first respondent’s cost of the appeal in any event and that cost orders already made not be disturbed.  Do we expect that to take more than a day?

MR SACKAR:   No.

MR SEMMLER:   No, your Honour.

FRENCH CJ:   All right, thank you.

MR SEMMLER:   May it please the Court.

FRENCH CJ:   The Court will adjourn briefly to reconstitute.

AT 12.47 PM THE MATTER WAS CONCLUDED