BULOW & BULOW (No.2)
[2019] FCCA 2251
•29 July 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| BULOW & BULOW (No.2) | [2019] FCCA 2251 |
| Catchwords: FAMILY LAW – Application for recusal – apprehended bias – application for transfer to Family Court – where matter remitted for re-trial by Full Court – application dismissed. |
| Legislation: Family Law Act 1975 (Cth), ss.79 and 79(2)(iv) Commonwealth Evidence Act 1995 (Cth) |
| Cases cited: Bulow v Bulow [2019] FamCAFC 3 Australian National Industries Ltd v Spedley Securities Ltd (in Liq) & Ors (1992) 26 NSWLR 411 |
| Applicant: | MS BULOW |
| Respondent: | MR BULOW |
| File Number: | ADC 1674 of 2014 |
| Judgment of: | Judge Heffernan |
| Hearing date: | 2 July 2019 |
| Date of Last Submission: | 2 July 2019 |
| Delivered at: | Adelaide |
| Delivered on: | 29 July 2019 |
REPRESENTATION
| The Applicant: | In person |
| The Respondent: | In person |
ORDERS
Paragraphs 1, 2, 3, 5, 6 and 7 of the Application in Case filed by the husband on 28 June 2019 are dismissed.
The proceedings are adjourned to 22 October 2019 at 3.15pm for callover and possible trial listing NOTING the parties are required to personally attend on this day UPON FURTHER NOTING it is requested that counsel properly instructed for trial attend and in the event they are not available, the file principal attend.
The wife’s Application in a Case filed 11 April 2019 which seeks to limit the scope of the trial and the husband’s response and submissions is adjourned for interim hearing on 22 October 2019 at 3.15pm for half hour.
IT IS NOTED that publication of this judgment under the pseudonym is Bulow & Bulow (No.2) approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT ADELAIDE |
ADC 1674 of 2014
| MS BULOW |
Applicant
And
| MR BULOW |
Respondent
REASONS FOR JUDGMENT
(Reasons Settled from Transcript)
Introduction
This matter proceeded before me as an interim argument on an Application in a Case filed by the husband, Mr Bulow. That application sought a number of orders. The first is that I recuse myself from the rehearing of this matter that was ordered by the Full Court in its appeal judgment, to which I will refer later. Secondly, that this matter be transferred to the Family Court. Thirdly, that pursuant to s.79(2)(iv) of the Family Law Act 1975 (Cth) (‘the Act’) a full re-hearing occur before another judge. That is particularised as being within the scope of order 6. I will make a comment about that in a moment.
Fourthly, that the two Applications in a Case filed by the wife on 18 December 2017 and 11 April 2019 be dismissed. I have indicated that I will not deal with those applications at this time. Fifthly, that the “case filed ADC1674/2014 be wholly dismissed if order 6 issued by the Full Court of the Family Court on 18 January 2019 … is not fully enacted to invoke orders 1(a) and 2 of the orders made by [me] on 22 November 2017 and reverse the financial effects of the property division”. That is more in the nature of a submission than it is a ground of application.
Further, the husband seeks an order that there be no further orders issued to alter the property interests of the parties to the marriage. That would appear to be related specifically to me presiding over the matter and be an emphatic restatement of the application for recusal. The application that I recuse myself is opposed by the wife, Ms Bulow.
The Judgment of the Full Court
The Court of Appeal handed down its judgment in this matter on 18 January 2018.[1] It noted that there were some 30 grounds of application raised by the husband. Almost all of those grounds were dismissed. Ultimately, the Full Court allowed the appeal and sent the matter back in relation to some issues relating to the superannuation aspects of this matter. It found that grounds 19, 20 and 27 had some merit and it found that there was an error in failing to take into account information which had not been presented in evidence by the parties relating to the specific nature of the husband’s superannuation interests, the respective contributions of the parties, and the effect upon the respective interests of the parties of any splitting order.
[1] [2019] FamCAFC 3.
I will come back to this point. The Court made the observation and, indeed, it was made explicit in its orders;
“We see no reason why the remitted proceedings cannot be reheard by Judge Heffernan. Indeed, it might be thought expeditious that his Honour does so, however, our orders will leave that issue for the Federal Circuit Court of Australia.”[2]
[2] Ibid at[110]
It went on to say:
“We hasten to point out that nothing we have said suggests that any different splitting order or other order must necessarily be made. Rather, the parties’ respective contentions must be seen in light of evidence that permits a court to understand the effects for both parties of any splitting order and the ramifications of the same within a consideration of section 79 as a whole.”
That is the context in which the orders were made and the limited basis upon which the appeal was allowed and re-mitted for rehearing. The Court used qualified language in its conclusions and orders starting at paragraph 106 of its reasons. At paragraph 106 it stated:
“The form of his Honour’s orders saw each of the parties retaining property in their respective ownership or possession, a cash sum payable from the proceeds of sale of the former matrimonial home being paid to the husband and the balance of proceeds paid to the wife. Separately, as has been seen, a splitting order was made in respect of the husband’s superannuation interest. We consider that error attends the assessment of contributions applicable to the latter.”
I depart from quoting from the judgment further at this point to emphasise that that final sentence means that error attended the assessment of contributions applicable to the husband’s superannuation interest. The Court then proceeds at paragraph 107 to state:
“However, as we have sought to explain, that error which pertains to the nature, form and characteristics of the husband’s superannuation interest has ramifications for the totality of the section 79 orders. A consideration of the same impacts potentially upon any splitting order, but also by reason of the scheme specific provisions in respect of any splitting order upon an assessment of the relevant 75(2) factors.”
The implication of the Full Court judgment is that the parties’ respective contentions must be seen in light of evidence that permits the Court to understand the effects for both parties of any splitting order and the ramifications of the same within a consideration of s.79 as a whole. For reasons I will explain during the course of these reasons, it was a limited basis upon which the Full Court sent this matter back for re-hearing. That limited basis is something which is directly relevant to the husband’s application for a recusal.
It is also relevant to this application that there was no finding by the Full Court of procedural unfairness, contrary to the submission of the husband, and I refer to paragraphs 66 to 71 of the judgment of the Full Court, where it noted that the late provision of the expert report raised real concerns about procedural unfairness, but observed:
“We are not, however, persuaded that injustice is demonstrated.”
The Court later observed that the submissions sought to be advanced by the husband were not at all impeded by the updated valuation, nor was it suggested that it would have had an impact at all upon those submissions. The Court also observed that on any view it was plain that the wife was relying on the 2016 valuation in the more recent superannuation report.
This application must also be considered in light of the fact that the husband’s many complaints about findings of fact and weight to be given to the evidence were rejected by the Court of Appeal.
The husband’s submissions
The husband’s opening submission in relation to this application was
“I maintain there’s a perception of – in the first case it was demonstrated … a matter of law, was an error on a matter of law, and I put that aside, because that’s a matter of law, but in terms of perception of procedural unfairness and, in my view, judicial bias, there is… still standing”[3]
[3] Transcript 2/7/19 p.5
I have already dealt briefly with the procedural unfairness aspect. Contrary to the submission of the husband the Full Court did not find that any injustice had been caused because of procedural unfairness. The husband uses the term “judicial bias”. It was not immediately apparent to me whether the husband was referring to actual bias or apprehended bias. They are two different things. Actual bias means that someone has an actual tangible bias towards a matter, or fact or person or their cause. Apprehended bias means that there is a danger that there will be a perception of bias.
Mr Bulow explained his position by saying he was alleging that there was a bias on applying judicial discretion and a bias in considering or not considering the evidence. He did not make it clear what evidence he was referring to. But I repeat that the Full Court found that one of the errors that I made was in not considering evidence which had not been presented to me by either party. How that could give rise to a perception of bias on my part is not entirely clear on Mr Bulow’s submission.
Mr Bulow was given considerable opportunity to expand upon his submissions. One of the main points he made in his affidavit, to which I will refer in a moment, was at paragraph (d) of that affidavit where he drew attention to the fact that at a directions hearing earlier this year I said words to the effect that the Court, meaning the Full Court, could not possibly have intended that I revisit certain findings of fact and credit that I had already made.
Mr Bulow says that that is a clear example of bias. He described it as “a very clear evidence of bias” in his submissions. Of course, that comment, as I have sought to explain to Mr Bulow previously – that comment by me was made in the context of a fair-minded reading of the Appeal Court’s judgment. Mr Bulow’s submission is that the Full Court has, effectively, said that we go back to square one, and that all of the evidence in the matter must be considered again and that we have a new trial and fresh evidence on every matter.
That was clearly not what was intended by the Full Court in its judgment. What I meant at the time – and what I thought I made fairly clear at the time, and what I will reiterate now, is that because of the nature of the ruling and the decision of the Court of Appeal, this matter must have been sent back for re-trial on limited issues, on a limited basis, not to start again as if there had not been a previous trial, not been previous evidence, and not been previous cross-examination of Mr Bulow.
I am fortified in that view because of the nature of the decision made by the Court of Appeal, but also the fact that they said that it was probably preferable that I hear the matter again. That brings me to the point that Mr Bulow complains about: that my comments demonstrate bias. What I was saying was that if the Full Court has said that the matter should be reheard by me they can hardly be taken or be understood to have said or ruled in their judgment that I must ignore all of the previous evidence and findings in this matter that were not disturbed by the Full Court or appeal. It is not intended that I pretend that previous evidence did not occur or that I should potentially make different findings of fact and credit on a full re-hearing of the entire matter.
The Full Court cannot be sensibly understood to have intended that. One of the reasons why the Full Court cannot be sensibly understood to have intended that can be demonstrated by reference to the case of Australian National Industries Ltd v Spedley Securities Ltd (in Liq) & Ors[4] where the Court observed that:
“There will be an unacceptable appearance of prejudgment if the judge has previously dealt with the issue of fact or credibility which is before him in the instant case.”
[4] (1992) 26 NSWLR 411 at p 438.
If a judge has already made a material finding about credibility or fact at some stage of the proceeding there is likely to be an unacceptable appearance of prejudgment if that very issue is re-litigated at a trial. Given that is such an obvious principle in the legal authorities relating to apprehended bias, I must proceed on the basis that the Full Court understood that, because that is the law. Accordingly, when they said, “It would be most expeditious for his Honour, Judge Heffernan to rehear the matter”, they were anticipating that the problem of unacceptable appearance of prejudgment would not arise. Why would it not arise? Because they only sent the matter back on a limited basis. And that limited basis, as I have already pointed out, was described by the Full Court in paragraphs 106 to 111 of its judgment.
I raised that matter on a number of occasions during the course of submissions with Mr Bulow. Why, if there was a perception of bias or if there was actual bias, would the Full Court have said that the matter should be reheard by me? Mr Bulow did not have a substantive submission to make in response. In other words, it was a question he could not answer.
With respect to the application that this matter be transferred to the Family Court, the submission essentially came down to Mr Bulow’s contention that because there had been an error of law and also on his submission an error of fact identified by the Full Court that of itself was sufficient to warrant the matter being transferred to the Family Court. That was not a matter that was commented on by the Full Court. Clearly, they anticipated, having heard the appeal and having read the transcript, that the matter come back to this Court. There is no basis, in my view, for transferring the matter to the Family Court.
Mr Bulow also made the submission that given the view that I take of the Full Court judgment – in other words, that they sent the matter back on a very narrow basis – this was itself a sufficient reason to request that I recuse myself and for the matter to be transferred to a different judge. I reject that submission. I am confident that the reading I have made of the judgment of the Full Court is a fair and intelligible reading of those reasons. And I repeat, the question that Mr Bulow was not able to answer on a number of occasions, was why would the Full Court have said that it was preferable, in the sense of being most expeditious, for me to rehear the matter if there was an obvious problem of apprehended bias or, indeed, actual bias.
The further submission by Mr Bulow was that my judgment at first instance was a punishment and not a judgment. I simply repeat the observation that I made during submissions. That is not borne out by the judgment of the Full Court, which referred on, at least one occasion, to the very close attention that was given to the evidence in my judgment. The Full Court did not say “very close attention given to the evidence and errors or unfair findings made”. It did not disturb the factual findings I made. It was referring to findings that potentially could have been made on the basis of evidence that was not before me.
The final aspect of Mr Bulow’s application that I recuse myself is because the wife has made an application for costs in relation to the first trial in this matter and that there has been an application on the court file for some time now and affidavits supporting it. I have made comments during the course of argument about the fact that I have not made any findings in relation to that application. I am not aware of having read the affidavits and I have not heard argument in relation to it.
Mr Bulow says there is a danger – even though I have informed the parties that the documents have been isolated and are in a sealed envelope on the court file –that the mere fact that those documents are on the file creates a perception of bias. I reject that submission and I will explain a little bit more about why when I discuss the legal principles relevant to this matter. One way of answering at Mr Bulow’s submission in that regard is to note that it is not a foregone conclusion that even if I had read the affidavits in preparation for an argument, which I did not, that if I simply read the affidavits that I would have to recuse myself.
Matters relating to offers between the parties and negotiations are not admissible as evidence pursuant to the Commonwealth Evidence Act 1995 (Cth). The Court should not know of those matters. In my view, that is very far from standing for the principle that if a judge does become aware of prior negotiations or letters of offer that the judge is disqualified and must recuse themselves from hearing the trial. An analogy can be drawn with applications to exclude evidence.
For example, if one party in a parenting proceeding before this Court illegally recorded a telephone conversation between the father and a child who was the subject of the proceedings, and the mother has illegally recorded that telephone conversation and attaches a transcript of that to her trial affidavit, the father might oppose and seek to have excluded on grounds of unlawfully or improperly obtained evidence, the transcript of that recording. In order to determine that application it would be necessary for the trial judge to read the transcript.
If the transcript of the recorded conversation showed the father behaving in a way that was contrary to the mother’s relationship with the child – for example, trying to alienate the child from the mother’s affections, trying to encourage the child to gang up against the mother, trying to persuade the child to express views that were really the father’s views to a family assessment report writer, or so forth – so if the illegally obtained conversation showed the father doing things that were highly relevant and damaging to his credit but nonetheless the conversation had been obtained unlawfully and the judge excluded it, would the judge then have to recuse themselves because they had read that unflattering material that pointed against the father’s credit?
The answer to that is of course not. Judges regularly put out of their minds matters that are irrelevant or prejudicial and that they should not know. They regularly exclude evidence of matters before them and sometimes the matters excluded from their consideration relate, for example, to the credit of one party or another.
So that is a somewhat longwinded way of saying even if I were to have read that affidavit filed by the wife on the costs application it does not automatically establish that I would have to recuse myself.
In any event, the main thing is I have not made any findings in relation to the costs argument or any further findings of credit on the basis of the affidavit in support of the costs argument.
Mr Bulow’s submissions were, in effect, summed up when he said:
“Why is it not possible to, at least, consider this case to have a fair hearing in this court or a different court for that matter? It’s just a simple question of access to justice in here. You know, the question is as basic as that. I am seeking to have a fair hearing and fair justice in here. That’s as simple as that. Access to fair and unbiased judges: justice.”
What Mr Bulow seems to be submitting is that if the Court does not accept his arguments that that will automatically mean that he does not get a fair hearing or unbiased justice. I do not accept that submission and there is no authority suggesting that that is the case.
The test for Apprehended Bias
With respect to the test – and it is a legal test that has to be applied when considering an application to disqualify for apprehended bias, the Full Court of the Family Court has recently discussed the question of recusal for apprehended bias in a judgment published this year of Sellers v Burns[5].
[5] [2019] FamCAFC 113.
The Court, for obvious reasons, reiterated that the leading authority on this question is Ebner v Official Trustee in Bankruptcy.[6] The test is this. To find grounds for a recusal it must be established by the party alleging apprehended bias that a “fair-minded” lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question to be decided. There are two aspects of that that I wish to emphasise. One is “a fair-minded lay observer” and the second “might reasonably apprehend”. So it is an objective test on the basis of a fair-minded person who has a reasonable apprehension.
[6] (2000) 205 CLR 337.
Secondly, an impartial mind has to be brought to the question to be decided, which was why I said at the beginning of these reasons, that the limited basis upon which the Court remitted this matter for re-hearing is a relevant consideration. It did so on the limited basis that I have already described in these reasons.
It will not be necessary on the rehearing for me to revisit findings of fact I have already made except insofar as any new superannuation evidence as identified by the Full Court impacts on my assessment of the relevant s.75(2) factors and the totality of the s.79 orders.
In order to satisfy the test for recusal Ebner’s case stands for the proposition that the applicant must first identify the matter that it is said might lead the judge to not bring an impartial mind to the resolution of the issue. And, secondly, the applicant must demonstrate a logical connection between the identified matter and the possibility that the judge might depart from impartial decision-making.
Further, in the case of Royal Guardian Mortgage Management Pty Ltd v Nguyen & Anor,[7] the New South Wales Court of Appeal said, that “the hypothetical observer is taken to be a rational person who is neither complacent nor unduly sensitive or suspicious and to be someone who is aware of the oath or affirmation taken by judges and their judicial obligations more generally”.
[7] (2016) 332 ALR 128.
With that in mind, I am not satisfied that a fair-minded lay observer who understands the oath of office that is taken by judges, judicial obligations and the question to be decided, would reasonably apprehend that I might not bring an impartial mind to the resolution of the questions to be determined on the re-hearing of this matter.
So I turn, in case I have not already mentioned this, to another matter raised in the husband’s affidavit supporting this application. That is that I made findings of credit against him in my reasons for judgment.
Those findings of credit were not disturbed and, as I have explained on a number of occasions throughout the course of these reasons, because the Full Court sent this matter back on a limited basis it did not indicate in its judgment that those findings of credit or other matters upon which evidence had been obtained were being disturbed. It was the question of this Court needing to obtain on re-hearing further information in relation to the specific question of the superannuation interests and to consider that information in light of findings already made and s.79 as a whole.
Another submission that Mr Bulow made is that the Full Court in its reasons for judgment set aside paragraphs 1(a) and 2 of the orders that I made in relation to this matter, which is the division of property and the superannuation splitting order. It explained in its reasons why it was necessary to do so and, as I said when I commenced these reasons, the language in its conclusions and orders is couched in a way that, in a sense, seems cautious, because it is pointing out the specific basis upon which it found it was necessary to allow the appeal and explaining why it was that that had an impact upon the s.79 orders as a whole.
The fact that both of those orders were set aside does not mean, as Mr Bulow appears to believe it does, that the Court was remitting the matter in its entirety for a full re-hearing.
For those reasons I make the orders to be found at the beginning of these settled reasons.
I certify that the preceding forty-seven (47) paragraphs are a true copy of the reasons for judgment of Judge Heffernan
Associate:
Date: 20 August 2019
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