Burt and Merrill (No 2)

[2018] FamCA 606

FAMILY COURT OF AUSTRALIA

BURT & MERRILL (NO 2) [2018] FamCA 606

FAMILY LAW – COURTS AND JUDGES – Disqualification Application – Actual bias – Apprehended bias - “fair-minded lay observer” – Objective test – Whether the applicant was prejudiced in the presentation of their case – Actual or apprehended bias not established – Application dismissed.

Australian National Industries Ltd v Spedley Securities Ltd (in liq) (1992) 26 NSWLR 411
British American Tobacco Australia Services Limited v Laurie (2011) 242 CLR 283
Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577
Dunwell v Dunwell [2011] FamCAFC 2
Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337
Johnson v Johnson (2000) 201 CLR 488
Kwan v Kang [2003] NSWCA 336

APPLICANT: Mr Burt

RESPONDENT: Ms Merrill

FILE NUMBER: MLC 9912 of 2013

DATE DELIVERED: 10 August 2018

PLACE DELIVERED: Adelaide

PLACE HEARD: Adelaide

JUDGMENT OF: Berman J

HEARING DATE: 18 May 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Efron

SOLICITOR FOR THE APPLICANT: Efron & Associates

COUNSEL FOR THE RESPONDENT: Wife in Person

SOLICITOR FOR THE RESPONDENT:

Orders

1. That paragraph 1(a) of the Application in a Case filed 13 December 2017 be dismissed.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Burt & Merrill (No. 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: MLC 9912 of 2013

Mr Burt

Applicant

And

Ms Merrill

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

1. Before the Court are the competing claims of Mr Burt (“the husband”) and Ms Merrill (“the wife”) seeking to determine their separate interests in property.

2. The final hearing commenced on 22 August 2016 with evidence concluding on 13 April 2017.

3. Following the preparation of written submissions, final submissions were heard on 16 October 2017 and thereafter judgment was reserved. There have been various interim hearings and at present Notices of Appeal namely SOA64 of 2017 and SOA21 of 2018 are awaiting determination.

4. The husband filed an Application in a Case on 13 December 2017 seeking various orders, but in particular that I should recuse myself from further involvement in the proceedings on the basis of actual and apprehended bias.

5. On 23 April 2018 the husband’s application was listed for hearing on 18 May 2018.

6. Following the submissions on behalf of the husband and the wife appearing in person, judgment was reserved.

7. The husband’s recusal application was initially supported by his Affidavit filed 13 December 2017. However, senior counsel did not seek to rely upon the contents of the affidavit but rather to rely upon the husband’s Affidavit filed 28 February 2018 as to [3] to [13] and supplementary Affidavit filed 27 April 2018.

LEGAL PRINCIPLES

1. In Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577 at [111], Kirby and Crennan JJ reiterated that:-

   …it is important to bear in mind the characteristics of modern litigation…

2. And at [175] of the judgment  Callinan J says the following:-

   This system [the docket system] has its disadvantages and dangers. On the one hand, the trial judge will be well educated in many of the details of the case on each side by the time that the hearing starts. But on the other hand, it may sometimes be difficult for the trial judge, apparently fully conversant with the facts and issues, not to have formed some provisional view at least of the outcome of the case. …

3. At [176] his Honour continues:-

   I mention these matters because in sum they may well incline a trial judge towards a degree of outspokenness of a kind to which he or she would not be inclined in a conventional trial on largely oral evidence. That this is so does not provide any excuse for the manifestation of apparent bias on the part of a trial judge but it may explain why a judge finds himself or herself speaking more candidly and strongly than he or she might otherwise do, or even have been able to do, in the past or in other jurisdictions. The question nonetheless remains whether the fair-minded lay observer might reasonably have apprehended that the judge might not be bringing an impartial and unprejudiced mind to the resolution of the questions that he was required to decide.

4. In British American Tobacco Australia Services Limited v Laurie (2011) 242 CLR 283, the majority comprising Heydon, Kiefel and Bell JJ set out the apprehended bias test at [139]:-

   It is fundamental to the administration of justice that the judge be neutral. It is for this reason that the appearance of departure from neutrality is a ground of disqualification. Because the rule is concerned with the appearance of bias, and not the actuality, it is the perception of the hypothetical observer that provides the yardstick. It is the public’s perception of neutrality with which the rule is concerned. In Livesey it was recognised that the lay observer might reasonably apprehend that a judge who has found a state of affairs to exist, or has come to a clear view about the credit of a witness, may not be inclined to depart from that view in a subsequent case. It is a recognition of human nature.

5. At [37] of French CJ’s judgment in British American Tobacco Australia Services (supra) his Honour referred to Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 and identified that there is a two-step approach identified in Ebner:-

   … The first is “the identification of what is said might lead a judge…to decide a case other than on its legal and factual merits”. The second is an “articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits”. In Ebner the constructed observer was the “fair-minded lay observer” concerned only with a reasonable apprehension of bias. The test is generally applicable to cases of asserted apprehended bias…

   (footnotes omitted).

6. In Australian National Industries Ltd v Spedley Securities Ltd (in liq) (1992) 26 NSWLR 411 Mahoney JA observed at 438:-

   In my opinion, four things emerge from the decision in Livesey and the cases which have succeeded it: (a) the disqualification of a judge for apprehended pre-judgment depends on form rather than substance; (b) whether there is an unacceptable appearance of pre-judgment is to be decided, not according to likelihood, but according to possibility; (c) it is to be judged, not according to what the court and the parties know, but according to the impressions of a lay person who does not know the facts; and (d) there will be an unacceptable appearance of pre-judgment if the judge has previously dealt with the issue of fact or credibility which is before him in the instant case.

7. In Kwan v Kang [2003] NSWCA 336 the test in Ebner (supra) and Johnson v Johnson (2000) 201 CLR 488 affirmed that the court should consider the nature and extent to which the appearance of impartiality should be determined:-

   [77]Despite the importance of the appearance of justice being seen to be done, there is a strong need for courts to apply realistic criteria in considering whether a reasonable apprehension of bias has been established. This is particularly so when dealing with a disqualification application based on what is said to be pre-judgment by a judicial officer. This has often been stressed.

8. At [82]:-

   While the test for apprehended bias by reason of pre-judgment is based on what may be regarded as a fairly low threshold of satisfaction, namely, “whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind” to the issue, the element of reasonableness needs to be stressed. In Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 at 100 Gaudron & McHugh JJ pointed out:

   A reasonable bystander does not entertain a reasonable fear that a decision-maker will bring an unfair or prejudiced mind to an inquiry merely because he has formed a conclusion about an issue involved in the inquiry.

9. The Court went further and said:-

   [86]It is not unknown for judges to make findings on an interlocutory issue and to express those findings in a way that indicates that they have come to a final conclusion. If that conclusion is as to a significant issue on which the ultimate result of the trial depends, and further evidence is still to be led and final addresses are still to be made, the likely consequence is that the judge concerned will have to disqualify himself or herself.

   [87]The reason for this is that a finding expressed in terms of finality, when made at an interlocutory stage, will usually give the impression that the judge’s mind is made up. If the judge’s mind is made up before evidence and final addresses are complete, it will mean that a conclusion has been unfairly arrived at. There is then likely to be an apprehension that, when the time comes to give final judgment, the judge might not be impartial or might be prejudiced against the party who was unsuccessful in the interlocutory judgment. It will then not merely be an apprehension that the judge will decide the case adversely against that party.

10. In Dunwell v Dunwell [2011] FamCAFC 2 Finn J considered that the test is objective and not subjective. Her Honour said:-

    [51]When regard is had to the observations concerning modern judicial practice made by members of the High Court in Johnson (in the paragraph ([13]) which I earlier cited), I considered that his Honour’s questions and observations, when read in context, concerning the strength that the letter of 11 May 2009 appeared to give to the case for the restraining order against the wife’s solicitors, and the apparent reliance, at least at that stage, by the wife’s side only on her affidavit, did not exceed the bounds of legitimate questions and observations by a judge (as referred to in paragraph 13 of Johnson). In these circumstances, the fictional lay observer, whose position is to be understood in light of what is said in paragraph 13 of the High Court decision in Johnson, could not reasonably apprehend that his Honour might not bring an impartial mind to the resolution of the case for the restraining order in relation to the wife’s solicitors. (See also the observations in Concrete Pty Ltd v Parramatta Design and Developments Pty Ltd (2006) 229 CLR 577 of Gummow ACJ at [4] and Callinan J at [173] to [180].)

11. In the same decision Thackray J considered that an application for disqualification must be viewed against the pressure of litigation on a modern Court faced with fiscal restraint and limits. His Honour said:-

    [191]It is important to keep in mind that this was an interlocutory dispute in proceedings the trial Judge properly identified as having the potential to give rise to “satellite litigation”. As his Honour said, such litigation:

    … uses a significant amount of court time. That means other cases waiting to be heard experience longer waiting times. In a time where the judicial resources of the Court are stretched enormously those waiting times become quite unacceptable to most litigants. …

REFUSAL TO ALLOW SUBPOENA AND DISCOVERY

1. The husband considers that he was disadvantaged by the manner in which the Court dealt with the husband’s Application in a Case filed 31 May 2016 seeking extensive discovery, but in particular better detail in relation to bank statements pertaining to the various accounts held and/or under the control of the wife.

2. It is further argued that the Court may have manipulated the listing of the application such that the delivery of judgment would cause “considerable difficulty” for the husband given that the trial was set to commence on 22 August 2016.

3. I reject the husband’s contention. The Application was filed on 31 May 2016, listed for hearing on 1 August 2016 with judgment being delivered on 11 August 2016. The application was heard and determined expeditiously given the proximity of the trial rather than it being the subject of deliberate delay.

4. The judgment dealt with the matters before the Court comprehensively and it was a matter for the husband to take whatever application he may have considered appropriate.

5. The husband complains that leave was not given to issue a number of subpoena seeking production of documents from various individuals and organisations.

6. That issue was dealt with in a judgment delivered 28 February 2017 following a hearing on 20 and 22 February 2017.

7. The application for subpoena to issue was refused on the basis that the husband had not provided the proposed subpoena in draft form, that subpoena is not intended to be an alternative process to discovery and that in the circumstances of this case the husband had failed to establish the relevance of the subpoena that were the subject of objection.

APPLICATIONS IN A CASE FILED 7 JULY 2017 & 27 JULY 2017

1. The evidence in the substantive proceedings concluded on 13 April 2017.

2. The applications were listed for hearing to coincide with the date set for counsel to speak to written submissions. It was anticipated that thereafter judgment would be reserved.

3. The husband was opposed to the wife resolving taxation and other liabilities with the Australian Taxation Office (“ATO”) and sought that he be appointed as a director of the various corporate entities so that he be given standing to engage in the negotiations and discussions with the ATO. The husband’s applications were opposed by the wife.

4. I dismissed the applications for the reasons as set out in judgment delivered 10 August 2017.

TOLERANCE OF THE JUDGE TO THE ALLEGED SIPHONING OF ASSETS BY THE APPLICANT

1. The husband asserts that the manner in which the wife dealt with property and in particular property situate at 5 M Street, Suburb D was such that it sold for a figure considerably less than the true market value and that the obvious reduction in capital gain was such that the Court should have intervened or made critical comment.

2. No evidence was presented in respect of the value of the M Street property. The general position of the husband in respect of the sale was known. It was a matter to be dealt with at trial.

WITHDRAWAL OF ORDER 12

1. The husband contends that the Court gave an accommodation to the wife that was not given to the husband in respect of other procedural applications.

2. There appears to be no clear link between orders made on 10 April 2017 and other unspecified applications.

REFUSAL TO HEAR MAINTENANCE APPLICATION

1. It is argued that the Court took no steps to list the husband’s application for spousal maintenance with expedition.

2. It is the husband’s contention that I was “predisposed to favouritism, is hostile to [the husband] and is certainly not objective nor prepared to afford [the husband] access to equal, fair and equitable justice and balanced objective consideration by the Court”.

3. At the hearing on 20 February 2017 the husband’s Second Further Amended Application in a Case filed 28 December 2016 was listed for hearing on 3 April 2017.

4. Paragraph 25 of the judgment delivered 28 February 2017 sets out the Court’s intention to deal with the application.

5. Following the hearing on 13 April 2017 orders were made on 1 May 2017 which provided for the wife to pay interim spousal maintenance to the husband.

6. Two further Applications for Spousal Maintenance filed 21 September 2017 and 12 February 2018 were listed for hearing on 1 March 2018. On 16 March 2018 orders were made which dismissed the husband’s applications and provided for certain liabilities to be paid from monies to be held by the wife’s former solicitors in an investment trust account.

HUSBAND’S APPLICATION FOR LITIGATION FUNDING

1. The husband’s Application filed 13 December 2017 sought an order for litigation funding in the sum of $60,000 comprised of $30,000 for the husband’s representation on the hearing of his Appeal in SOA64/217 and a further $30,000 for the husband to be represented at the hearing of the husband’s recusal application.

2. Reasons were delivered on 16 March 2018.  I dismissed the husband’s application for litigation funding on the basis that any surplus funds available to satisfy the husband’s application were exhausted and the balance of monies remaining in the investment trust account of the wife’s former solicitors was to be retained as necessary to discharge a potential tax assessment.

3. The husband was dissatisfied with the orders made on 16 March 2016 and by Notice of Appeal filed 11 April 2018 in SOA21/2018 the husband appeals those orders.  The issue is not one of apprehended or actual bias but rather, the husband disagrees with the Court’s findings and has appealed the decision.

4. There were no funds available to support his application.

ACCESS TO AUDIO TRANSCRIPT

1. In my judgment delivered 28 February 2017, I considered the husband’s application to listen to and obtain copies of audio transcript. I did not consider that it was necessary for the Court to make an order. The judgment reflects that it is a matter of negotiation and agreement between a requesting party, the Registry and the transcript provider.

JUDICIAL PARTICIPATION IN SELECTING SUBPOENA DOCUMENTS

1. As part of the substantive trial, an interim consideration was required in respect of documents in the possession of Ms F. The Court had to determine questions of professional privilege. Reasons were given as part of the Court’s determination.

ACTUAL BIAS

1. The husband argues that the Court’s refusal to admit fresh evidence as set out in the husband’s Affidavit filed 31 July 2017 can only be explained by actual bias.

2. The husband contends that the relevance of his application “went to the very foundation of the purported tax determination issue that is clearly the subject of abuse of process and in all likely far worse by the Wife’s advisors”.

3. The Court’s treatment in respect of the purported taxation liability of the wife and the various corporate entities is a matter for final judgment.

JUDGMENT OF 16 MARCH 2018

1. The interim proceedings considered the husband’s further application for interim spousal maintenance and the application of the husband for litigation funding to enable Queen’s Counsel to be briefed to represent the husband at the hearing of an appeal against orders made 10 August 2017 and to press the husband’s application that I should recuse myself on the basis of actual and apprehended bias.

2. For reasons as set out in the judgment delivered 16 March 2018, the husband’s application was refused.

CONCLUSION

1. I reject the husband’s contention that there has been either an appearance of bias or actual bias in the conduct of the proceedings.

2. The litigation has been ongoing since 2013.

3. Significant court time and resources have been invested in the management, hearing and determination of the litigation.

4. Interim judgments have been delivered on 11 August 2016, 2 November 2016, 28 February 2017, 1 May 2017, 8 June 2017, 10 August 2017 and 16 March 2018.

5. The husband has appealed several of the interlocutory judgments. An Appeal in relation to order made 10 August 2017 (SOA64 of 2017) and an Appeal in relation to orders made 16 March 2018 (SOA21 of 2018) are yet to be heard and determined.

6. It could not be said that a “fair minded lay observer” may apprehend that I have not brought an impartial and unprejudiced mind to the proceedings. Each application made by either party has been heard and determined. Where significant, the determination has been reflected in a written judgment.

7. At the heart of the husband’s application is his apprehension that the Court will come to a different determination than that which is promoted by him, particularly in relation to the following issues:-

   (1)Whether the Court will find that it is just and equitable to alter the interests of the parties in their separate property;

   (2)The determination of whether a tax liability should be brought to account and, if so, in what manner; and

   (3)The impact, if any, arising from the husband’s assertion that the wife’s post-separation expenditure should be considered as profligate and wasteful and should be treated as an “add back”.

1. The trial was conducted over a number of days with each of the parties being represented by Queen’s Counsel.

2. At the conclusion of the evidence the Court was prepared to entertain written submissions and an opportunity for counsel to speak to the submissions.

3. I do not consider that there is merit in the husband’s submission that the presentation of his case was in any way prejudiced by the manner in which the Court conducted the proceedings.

4. It is not a matter that the husband disagrees with the Court’s findings, but rather whether a lay observer would consider that my conduct was such as to prevent the husband from presenting his case, or that I had in some way pre-judged the issues.

5. I do not consider that the husband has established that actual bias exists or that an objective consideration of the matters raised by the husband would permit a finding of pre-judgment based upon actual or apprehended bias.

6. I propose to dismiss the husband’s application.

I certify that the preceding sixty-three (63) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Berman delivered on 10 August 2018.

Associate:

Date: 10 August 2018