Charisteas v Charisteas & Ors
[2021] HCATrans 141
[2021] HCATrans 141
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Perth No P6 of 2021
B e t w e e n -
G CHARISTEAS
Appellant
and
Z V CHARISTEAS
First Respondent
L W BANDY
Second Respondent
A CHARISTEAS (BY HER CASE GUARDIAN R ELIAS)
Third Respondent
E A CHARISTEAS
Fourth Respondent
K A SOTIROSKI
Fifth Respondent
S M MANOLAS
Sixth Respondent
L W BANDY & A CHARISTEAS (AS EXECUTORS OF THE ESTATE OF D CHARISTEAS)
Seventh Respondent
YWB PTY LTD
Eighth Respondent
KIEFEL CJ
GAGELER J
KEANE J
GORDON J
GLEESON J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA BY VIDEO CONNECTION TO BRISBANE, SYDNEY AND MELBOURNE
ON FRIDAY, 3 SEPTEMBER 2021, AT 10.15 AM
Copyright in the High Court of Australia
____________________
KIEFEL CJ: The record will show that I, together with Justice Keane, am sitting in Brisbane, Justices Gageler and Gleeson in Sydney, and Justice Gordon in Melbourne. In accordance with the protocol relating to remote hearings, I will announce the appearances for the parties.
MR S. PENGLIS, SC appears with MR F.A. ROBERTSON for the appellant. (instructed by DS Family Law)
MR P.J. WARD appears with MS A.L. SPENCER for the first respondent. (instructed by Williams + Hughes)
The fourth respondent does not appear but has filed written submissions. All other respondents do not appear.
KIEFEL CJ: Yes, Mr Penglis. I understand there is an application by the first respondent for an extension of time to file a notice of contention.
MR PENGLIS: Yes, your Honour.
KIEFEL CJ: Is that opposed?
MR PENGLIS: It is opposed in the sense that we neither oppose nor consent, your Honour. It is a matter for the Court.
KIEFEL CJ: All right. The Court will hear from the first respondent on the matter and reserve its position.
MR WARD: Your Honours, the first respondent seeks an extension of time to deliver a notice of contention. The basis upon which that extension is sought is set out in the affidavit of Tully Carmady sworn on ‑ ‑ ‑
KIEFEL CJ: Yes, we have that, Mr Ward.
MR WARD: Thank you, your Honour.
KIEFEL CJ: The basis of the notice of contention is that there was a waiver.
MR WARD: Yes, the basis ‑ ‑ ‑
KIEFEL CJ: Is that an issue already raised in the proceedings?
MR WARD: It was a matter that was raised as a contention before the Full Court. It was not raised by way of a notice of contention there because of the procedure as it applied in the Full Court. Upon receipt of the brief in this matter I took the view that procedurally in this Court in order to rely on that point it was necessary to file a notice of contention and, given that I was not briefed until April, that is the explanation for it being filed out of time, your Honour.
KIEFEL CJ: Mr Ward, we will hear argument on the notice of contention from you in the course of proceedings and we will reserve position as to whether the extension of time is granted.
MR WARD: May it please the Court.
KIEFEL CJ: Yes, Mr Penglis.
MR PENGLIS: May it please the Court. I will address the Court in regard to ground 1. My learned friend, Mr Robertson, will address the Court with respect to the remaining grounds of appeal. Your Honours, some very minor housekeeping, if I may. If you can turn up our primary submissions, just some corrections.
KIEFEL CJ: Are they substantive?
MR PENGLIS: No, they are not substantive, they are effectively typographical errors, and one needs to be ‑ ‑ ‑
KIEFEL CJ: Well, if they are self‑evident I do not think you need to.
MR PENGLIS: Thank you, your Honour.
KIEFEL CJ: Let us proceed with the matter.
MR PENGLIS: Your Honour, the first ground concerns what we submit is the diametrically opposed approaches that the judges below took to the issue of bias. We submit that although there was no issue as to what the proper law was, the manner in which they approached the matter at hand, as I have submitted, was fundamentally different and we say that the approach of the majority was fundamentally flawed, which has given rise to the wrong result.
The starting point, your Honours, is to take you to what disclosure was made because it is the approach that the judges have taken below to the disclosure that, in our respectful submission, belies the error that has befallen the majority of the court.
Can I give your Honours some dates - they are in the chronology, but they are fundamental dates to bear in mind and they are five. First, the trial was listed – the listing of the trial occurred on 22 March 2016. The trial commenced on 3 August 2016. The evidence concluded on 17 August 2016. Oral closing submissions were made on 13 September 2016 whereupon judgment was reserved. Judgment was delivered on 12 February 2018.
So, your Honours, having stated that, can I take you directly to page 544 of the second volume of the appeal book because this is the disclosure, the terms of the disclosure made as a result of inquiry of both the trial judge and trial counsel for the wife. Can I ask the Court to bear in mind, because I will come back to it, that as at the date of the hearing below and as at today there has been no disclosure by the trial judge. The only disclosure, albeit belated, was by counsel for the wife and it was in these terms.
The following, simply on the face value of this document - from its face the following information is discerned and that is from 20 June 2016 to 1 August 2016, that is two days before the trial, trial counsel for the wife said that there were “numerous” text messages between herself and the trial judge. The disclosure shows that from 2 August 2016, that is the day before the trial, to 19 August 2016, that is two days after evidence had concluded, there were no text messages.
It shows that from 20 August 2016, which is before oral submissions, to 15 September 2017, which was a year or so after judgment had been reserved, there were “numerous” text messages ‑ I will come back and show you that in a moment, if I can just continue with this listing – and that from 15 September 2017 through to 12 February 2018, when judgment was delivered, there were “occasional” text messages. So, we are not told, of course, what “occasional” means. The point here is – and I will come back to the drinks and the telephone contact in a moment – the contact was not just once or twice. It was not in isolation - there were many.
Can I explain to the Court how you get the proposition that from 20 August 2016 to 15 September 2017 there were numerous texts, and it is this. If you look at numbered paragraph 3 starting at line 20 on page 544, where the counsel indicates the contact, and you go to (c), you will see that the period described as “numerous” in (i) starts on 20 June 2016 and goes to 15 September 2017.
The relevance of the date “20 June 2016” is paragraph 2 on this page. In other words, it is the date from when counsel has records – that is the relevance of that date. The point is that (ii) is a subset of (i). So, although there were no communications between 2 August 2016 and 19 August 2016, from 19 August 2016 – back to (i) – 15 September 2017 there were “numerous”. Then in (iii), from that date to judgment, the “numerous” became “occasional”. That is the analysis, if you like, on the face of the document of the contact….. In addition to that, in 3(a) the letter discloses that there was:
Personal contact for a drink or coffee on approximately four occasions, between 22 March 2016 and 12 February -
We are not told when. So that response allows for the possibility that those contacts occurred before the trial, during the trial or whilst judgment was reserved. We do not know. The final nature of the contact is 3(b):
Telephone contact on five occasions between January 2017 and August 2017 -
five occasions of telephone contact while judgment was reserved. We submit that is an extraordinarily concerning amount of contact between a trial judge and counsel for one of the parties. It required disclosure. There was no disclosure during the trial. The disclosure came well after the event, only after the question was raised, and the disclosure that has come is in those terms and nothing from the trial judge. So, if you like, they are the facts that we say are known and would be taken into account by the hypothetical lay observer.
KIEFEL CJ: What is the level of contact, Mr Penglis, during the period that the application for recusal was made and reasons given between September and November 2016?
MR PENGLIS: Well, in that period we were left with numerous texts because that is in the period 20 August 2016 to 15 September 2017, and we are left with the possibility of a drink or coffee on one or more occasions. But what we do know is that there were numerous texts, your Honour.
Your Honour has raised a point which I will deal with now. It is bad enough, in our respectful submission, for none of this to be disclosed but it makes the non‑disclosure more egregious when in these proceedings an application is made to have the trial judge recuse himself. There has been contact between the trial judge and counsel for one of the parties and no one tells us that ‑ ‑ ‑
GAGELER J: Mr Penglis, do you take anything from the last sentence of the communication…..a letter that says that “communications did not concern the substance of the . . . case”. Does that leave open that the communications concerned adjectival aspects of the case?
MR PENGLIS: Yes, your Honour, and that is identified by the learned Chief Justice below, exactly. But there is another comment, another observation we make with respect to that comment, and the comment is this. This is not a case of actual bias, it is a case of ostensible bias. It is no answer to say, well, we met in secret but take my word for it, we did not discuss the substance of the case. If they discussed the substance of the case we would be in the territory of actual bias.
The cases say that the reason why there is the stricture in place, this prohibition about contact, is not because necessarily a trial judge and a counsel will discuss the substance of the case, but it affords of the opportunity to do so and, impartiality being the bedrock of our system, impartiality not only needs to occur in fact but be seen to occur, and the opportunity afforded by non‑disclosed communications of a regular nature significantly erodes that confidence, and that is why we say the correct conclusion is that of the learned minority, the learned Chief Justice below.
But what I am going to do now is to take your Honours to the reasons for decisions briefly and show how we submit the Chief Justice approached this correctly and how we submit the learned majority approached it, not only incorrectly – and when I say incorrectly, we submit what the learned majority did was to infer matters through the prism of a judicial lens rather than through the lens of the hypothetical lay observer by inferring matters which we say the hypothetical lay observer would not infer.
But we go further – and I make good this proposition – even if you approach it with a judicial eye the conclusions reached by the majority are just plain wrong, there is no other way to put it, and I will make good that proposition.
GLEESON J: Mr Penglis, before you leave the letter, looking at the paragraph numbered 4, would it be fair to infer that the barrister is addressing this as though it is a question about her professional conduct ‑ that is, that paragraph 4 seems to be directed to the Bar rule that might be relevant to her conduct?
MR PENGLIS: Well, it is open to infer that – so, the answer is yes, it is open to infer that, but one needs to be very careful about how to approach this letter because we can start approaching it as members of the profession and judges. Let us not forget that the test here is the hypothetical lay observer.
So, if the hypothetical lay observer is taken to know that rule, then perhaps you can have regard to it, but we would submit the hypothetical lay observer is not taken to know these niceties and that is the prism from which these need to be examined. I hope I have answered your Honour’s question. Yes, it can be construed that way, but one needs to be careful, when construing this letter, to ensure that we keep in mind at all times what the test is.
GORDON J: Can I ask about that, Mr Penglis? When you say, “the test”, is the complaint one of conduct, association, extraneous information or all three? I assume it is not interest.
MR PENGLIS: Conduct/relationship.
GORDON J: The reason I ask that is because in response to your question to Justice Gageler it would appear that - I had understood that it was apparent that there had been something disclosed, or that the inference to be drawn was that there had been something disclosed about the case but not the substance of it. That is why I ask you - what is the complaint?
GLEESON J: Mr Penglis, why would it not also – why would you confine yourself to ‑ ‑ ‑
MR PENGLIS: I am going to withdraw my confinement on myself. Can I put it that the primary ground is the contact. The relationship frames the conduct, but we do not complain about the relationship. You could be forgiven to think that because of the respondents’ submissions that keep on going about the relationship and we do not complain that there was a non‑disclosed relationship.
We complain about the fact that there was conduct of a serious nature that was not disclosed and we complain about the fact that, furthermore, we are told that the communications did not concern the substance of the [Charisteas] case, which, as the Chief Justice below says, that begs the question, what was the discussion about the [Charisteas] case if not about its substance? So, can I readjust my answer to your Honour Justice Gordon in that way.
Unless there is anything more for me at the moment, I would like to take your Honours for a very quick walk through the reasons for decision below.
GAGELER J: That seems like your complaint is one of ex parte communication about the case, but maybe that is too simple.
MR PENGLIS: We do not have to go that far. We do, but we do not have to go that far, your Honour. Even if there was no ex parte communication, even if they had said that we did not discuss the case at all, we would still…..this application on the basis of the undisclosed communications between the parties of a numerous nature and the erosion by that fact in the eyes of the fair‑minded lay observer of the notion of independence and impartiality. The point I suppose I am making, and obviously not making well, is that the fact that there is paragraph 4 makes our complaint more egregious, but our complaint does not just rely on paragraph 4.
GAGELER J: I suppose, Mr Penglis, my concern is that the case law for the last 20 years has made it incumbent on a party seeking to establish bias to articulate the way in which impartiality is said to be compromised. It is something more than the pub test, it has to be a reasoned elaboration of the problem.
MR PENGLIS: It is, and it is elaborated in the manner identified by the learned Chief Justice, and that is – as I said, this is a case of ostensible bias and the first test in Ebner is satisfied by the fact that there were undisclosed communications between the parties. That gives rise to the inquiry in the second limb as to whether in those circumstances a fair‑minded lay observer would have the necessary concern identified and established in the authorities.
Can I make good that by taking your Honours to the Chief Justice’s reasons because we, with respect, adopt them. No surprise there, I suppose, but can I take your Honours to page 551 of the appeal book and starting at the top, paragraph 45:
It is, or should be, obvious that anything other than accidental or fleeting private contact between a legal practitioner and a judge when the judge is seised of a matter . . . has the propensity to create apprehension in the mind of the fair‑minded observer as to the impartiality of the presiding judge. This is because that legal practitioner has had the opportunity to make ex parte representations to the judge about the case.
Then there is an observation in paragraph 46, an observation on the facts in 47. Then can I take you to 48:
Even when the private meetings and exchanges ‑ ‑ ‑
GLEESON J: I am sorry, Mr Penglis, just pausing there, that last sentence of 45, speaking for myself, I would not have thought that that would be the only reason why a fair‑minded observer would have apprehension.
MR PENGLIS: No, not at all.
GLEESON J: All right.
MR PENGLIS: But it is a reason that his Honour has identified. So, then, what I am about to take you to is his Honour’s analysis in 48:
Even when the private meetings and exchanges between counsel for the wife and the judge did come to light, the disclosures were made by counsel for the wife (the primary judge having retired) were, with respect, hardly candid. Those disclosures provided no particularisation of dates on which the contact occurred, the venue or the length of such meetings, save that they took place “over a drink or coffee”. It appears, although the disclosure does not make clear, that there could have been more than four such meetings.
It is equally left unsaid whether the meetings took place during or after the trial. Whilst there is a denial of such contact by text messages between 2 and 19 August 2016, the same is not said of personal contact. And as there is no suggestion that the meetings were for a professional reason, it can be inferred that they were for a personal or a social purpose.
As to the phone calls, no specific dates are volunteered. Given that in the letter dated 22 May 2018, counsel for the wife makes reference to records prior to 20 June 2016 not being available, it can be inferred that the records for the remaining periods in paragraphs 3(i) (iii) were available, but that she chose not to include them.
The text messages disclosure is equally opaque. Whilst it is disclosed that numerous text messages were exchanged between 20 June 2016 and 15 September 2017, no dates are provided. Again, it is reasonable to be inferred that the records are available given the reference to records in paragraph 2 of the letter dated 22 May 2018.
It is also not apparent what difference counsel for the wife intended by her reference to “numerous” contact . . . on the one hand, and . . . “occasional”, on the other hand.
Further, it is striking that counsel for the wife has not sought to explain the content or substance of their communication, and instead limited the disclosure to the assertion that “the communications did not concern the substance of the . . . case”. Such an assertion, with respect, begs more questions than it answers. One obvious question left unanswered is; if not the “substance” of the case, what precisely was said about it?
We respectfully urge the Court to adopt those observations. What his Honour then did was to look at an observation made by Justice Merkel - there are only two cases I am going to take the Court to and that is one of them – and then concluded at 56 on page 552:
The simple and obvious fact of the matter in this case is that the disclosed communications should never have occurred, and once they had occurred . . . counsel and the primary judge should have made appropriate disclosures, which they did not.
Such failure to disclose, of itself, can, and in my view in this case, does give rise to a reasonable apprehension bias.
The contact was not accidental –
et cetera.
GORDON J: Mr Penglis, at an appropriate point I would be very grateful if you could address it from the perspective of the judge, in this sense, that in Ebner the Court said that it was incumbent upon the trial judge to lay out all the relevant facts and matters. I ask that in this question because by this time he had retired but it does impact, I think, upon the way in which he dealt with the recusal application before this matter was raised in the Full Court.
MR PENGLIS: I will deal with that now, if I may.
GORDON J: You can do it at a time convenient to you.
MR PENGLIS: I will deal with it now. Your Honour, the fact that the judge retired I suppose draws a line in the sense that there was no continuing obligation on him having not remained in judicial position to say or do anything. That does not matter, in our respectful submission, because the damage had already been done.
The disclosure should have been made at the time. That is the effect of what we say to be the stricture. He did not do it. But it is made, as I said earlier, Justice Gordon, more egregious by the fact that an application is made to the judge on the question of ostensible bias. The judge sits there, hears the application knowing that there have been communications between himself and trial counsel for the wife that we do not know about, we could not know about, but he knew about it and counsel for the wife knew about it.
If it was not apparent to his Honour beforehand that such matters needed to be disclosed, and we do not accept that for one moment, it must have been apparent to his Honour that there was information known to him and one of the parties directly relevant to an application being made by a party to him where the facts were not known to that party.
It elevated – I do not know how you elevate this obligation. It is of the highest order. Rather than saying “elevated”, I can only repeat myself by saying it makes this whole situation more egregious. It is not as though no one turned their mind to the question of ostensible bias. It was raised and made front and centre in this case, yet not a word.
So, the fact that he subsequently retired obviously may impact upon whether or not – well, the court’s approach as to his conduct by not responding to the request made of him, it may – I am not saying does – may explain the reason why he did not answer. But the fact of the matter is we do not have an answer, and the fact of the matter is we should have known before he retired.
GAGELER J: Mr Penglis, can I ask you a question about paragraph 34 of the Chief Justice’s judgment where he sets out a rule about private communications…..said correctly to be “well known and understood by legal practitioners”. How do we make use of that rule in analysing the bias question? Is that rule said to be known to the lay observer or is it a rule that somehow responds to the inferred concerns of the lay observer?
MR PENGLIS: It responds to the concerns of the lay observer. It is not part of my case that the lay observer would be familiar with the rule. What the lay observer will be familiar with, however, is previously identified by the Chief Justice, and that is the strictures that are in place generally, not the guide, but the strictures in place generally to ensure that impartiality is not only preserved but seen to be preserved, and that is dealt with in the earlier paragraphs of his Honour’s reasons for decision, including by reference to decisions of this Court.
GAGELER J: A lay observer might have difficulty in the distinction that practitioners and judges readily draw between the day that the hearing commences and the week before the hearing commences. How do we accommodate that in the analysis?
MR PENGLIS: We respectfully submit that the lay observer will be taken to know – if I can just have one moment. In my respectful submission, what the lay observer is entitled to know, and must know – and I do not think it is put against us to the contrary, but that is neither here nor there, I suppose, in this Court – that these rules exist for the purpose of preserving the sanctity of the court.
Your Honour started with a proposition about the guide. What your Honour has taken me to is a guide that starts at paragraph 32 and what his Honour is doing there is simply identifying the fact that the protection that has been afforded in the common law has actually been, if you like, confirmed in the Australasian Institute of Judicial Administration Guide to Judicial Conduct. I am not suggesting the fair‑minded lay observer will be familiar with that. What the judge I think is there doing is highlighting the fact that this judge just could not not know the rule, because the rule is not only a clear rule of common law but it is in this guide.
That is why he has referred to the guide. I do not think the Chief Justice anywhere in his decision suggests that the fair-minded lay observer is cognisant of this guide. He says that the fair-minded lay observer is cognisant of the strictures which are in place in the common law to protect against this and that is - and certainly when the trial has commenced – I am happy to leave this case on the basis of when the trial is commenced through to judgment there is no undisclosed communication between the trial judge and counsel, not because something will be said but to protect the sanctity of the institution to ensure that it is seen that nothing may be said.
Your Honours, I want to take you to the majority decision to just now indicate where we say – and I say this advisedly – it went very wrong. I want to start at page 575 of the reasons. We do not quarrel with paragraph 134, we do not quarrel with 135 or 136, nor do we quarrel with 137. In particular over at page 577:
However, once the trial has commenced, private communication, without the knowledge and consent others involved in the case, is an obvious departure from the norms of behaviour understood by judges and the profession alike and will usually be sufficient to establish the first limb of Ebner.
That is why we do not quarrel with the law in this because all three judges below correctly identified the law. It is how they approached the disclosure and then applied the facts to the law that is in issue.
The analysis starts at page 585. I am going to take a little bit of time on this but, subject to any questions that the Court has, other than referring to two cases, that will be the end of my submissions. Paragraph 164:
Clause 3 of counsel’s letter shows that once the trial commenced, the primary judge and counsel for the wife adjusted the nature and extent of their social interaction. As to the nature of those changes, clause 3 is somewhat confusing.
We agree.
On a literal reading, it suggests that private text communication ceased . . . but there may have been personal contact for a drink -
Then there is this comment or finding:
But it makes no sense to interpret the clause as meaning that the interlocutors ceased the most private form of communication but possibly continued to meet or speak to each other where they could be seen or might be overheard.
We say two things to that. We say that is not how a hypothetical lay observer would approach this. Secondly, even approached through the prism of a judicial lens, why?
GLEESON J: I think there is another point. Why would you assume that they were having a drink in public?
MR PENGLIS: Quite, but it does not matter where it is. I accept that, Justice Gleeson, but my point is it just does not – it is not bolted to anything, this finding. It says, “On a literal reading” of the letter this is what it means, but surely that cannot be right. That is what it amounts to. They use that later on but let us keep going. We get a glimpse of what is happening here in the next paragraph, paragraph 165:
We agree with senior counsel for the wife who appeared in the appeal, that the proper interpretation of clause 3 –
What the court has done here, the majority, is effectively embark on what they have called the proper interpretation of a disclosure almost as if it was a contract. It is not a matter for proper interpretation, and certainly not through the prism of a judge. It may be for the proper interpretation of a fair‑minded lay observer but not a judicial analysis, and that is at the heart of this majority decision. I will keep going.
GORDON J: Before you keep going, though, in that next paragraph it deals with two dates which is only the evidence period anyway, is it not?
MR PENGLIS: Sorry, I have not finished that paragraph. I am going to deal with it ‑ ‑ ‑
GORDON J: I apologise.
MR PENGLIS: No, not at all. I was pausing on the proper interpretation words and just emphasising that really that gives clue to what is happening here, and we say it is an error to do so. So, they agree:
that the proper interpretation of clause 3 of counsel’s letter is that there was no private communication of any kind between the primary judge and counsel for the wife from 2 August 2016 until 19 August 2016, which is when evidence was taken.
That was one of the propositions, Justice Gordon, that I foreshadowed before that I will make good. It is just plain wrong.
GORDON J: Well, there are two points I think, are there not? It may be wrong factually but also the period itself is too narrow, on your case.
MR PENGLIS: Yes, correct. Thank you, yes, I agree. But that follows through to the next:
They did not speak by telephone and all text contact between them ceased.
Well, that may well be for the period 2 August to 19 August, but it is just wrong in regard to the broader period. Then there is this:
As their usual and most frequent pattern of contact was via text message, this was a significant and deliberate change.
Well, with respect, where does the deliberate change come? There is nothing in this letter from counsel to show that the change was deliberate. Then it gets worse, in our respectful submission:
It points to them being aware that the standards of judicial and professional practice required that there be no private communication between them once the trial was underway.
How can that be so? How can you find that when we know from counsel’s letter that as soon as the evidence finished they were contacting each other again by text, numerous times, then by telephone and who knows how many times in person?
Furthermore, it shows that each them took these standards seriously and were determined to comply.
We submit that is an extraordinary finding, but extraordinary or not, it is simply not open to find that, even through a judicial lens, on the information before the Court. Then we continue.
It is difficult to determine precisely when text message contact resumed. Clause 3 of counsel’s letter discloses that there were “numerous” text messages between 20 June 2016 and 15 September 2017 (ceased during the trial until 19 August 2016) and was “occasional” thereafter. Counsel’s letter does not delineate contact between 19 August 2016, when the evidence was completed and 13 September 2016, when final addresses were made. Thus it is theoretically possible that there may have been personal contact for a drink and text message contact.
We agree, but then this is what the Court says. This is how the Court deals with it:
However, given the self-imposed embargo on contact during the trial itself –
That needs to be read not “during the trial itself” but “during the hearing of evidence” because we know that there were communications after the close of evidence even before written submissions, oral submissions:
we think it highly unlikely that there was any private communication between the close of evidence and when judgment was reserved.
That is another example, if I may say Justice Gordon, coming back to this proposition that I said at the outset. Not only do we submit that the hypothetical lay observer would not approach it this way but even through the judicial lens it is a finding that is just not open. What has happened is that the majority has bent over backwards ‑ and I say that advisedly – it seems to have bent over backwards to mitigate this egregious conduct to come to the conclusion that a hypothetical or lay observer would not be troubled by this at the end of the day. We go on:
The primary judge and counsel alike would have understood that the trial was not finished until final addresses were given and judgment was reserved, and thus, the approach adopted during the evidence phase of the trial would have continued until judgment was reserved.
We know that is just wrong because the numerous text messages resumed. So, it is by that analysis that the majority found that notwithstanding, prima facie, this sort of conduct can satisfy the first limb of Ebner, analysed in the way that they did, it does not. We say that is an error and we submit an obvious error. But it keeps going because what the court did was to at least accept that the contact after judgment was reserved did satisfy the first limb. We go over to page 586, paragraph 169:
In relation to their face to face meetings, as that style social interaction spanned from 22 March 2016 until 12 February 2018, it is inferred that some occasions took place prior to the commencement of the trial and some occurred after judgment was reserved. This means that at its highest, there were three social meetings in the 17 months that judgment was reserved.
I do not quite understand that, but in any event, it was at least accepted that there were three:
There is no suggestion that the friendship included private entertainment and it is inferred that these meetings took place in a public setting -
Well, again, where does that come from? It is an inference not available. It is an inference that the hypothetical – the fair‑minded lay observer would not reach but it is, with respect, an inference that a judge should not reach either based solely on the material before them. But they go on to accept that:
However, although in a public setting, no other person was present who could temper discussion of the case or provide an independent account of the meeting. The text messages and telephone discussions are even more private.
It follows that . . . the first limb of Ebner –
is satisfied:
Namely, that the primary judge and counsel for the wife were in private communication, without the previous knowledge and consent of the other parties, and counsel was thus given the opportunity to make private representations to the judge on behalf of her client.
The hypothetical observer would be interested in the whole of the circumstances and thus it is necessary to examine the nature of the communication, the situation in which it took place, its relationship to the issues for determination and the nature of the disclosure made by the judge and counsel.
Again, just in regard to the last point, can I emphasise the point that we say that is not a necessary inquiry in the case of ostensible bias. Ostensible bias does not require, or cannot be answered by someone simply saying, well, we did all these things, we met in private, but we did not talk about the case. If we talked about the case that would be actual bias. Now, 172:
The primary judge did not disclose his social interaction with counsel for the wife and it would seem that no enquiries were made of him about it.
Well, that is an interesting proposition. Is it somehow putting the onus on someone who does not know of the relationship a duty to make an inquiry of something they do not know? Of course, the obligation is on the part of the judge to make the disclosure without an inquiry being made.
The husband contends that the judge’s failure to disclose the communication lends support to the notion that the primary judge may not have brought an impartial mind to the proceedings.
Reference is then made to Kennedy and Cahill:
Kennedy was an unusual case –
I do not need to trouble you with that. Then at 173:
The plurality in Ebner at 360 explained that as a matter of prudence and professional practice, judges should disclose interests and associations if there is a serious possibility that they are potentially disqualifying. The qualification is important, as a practice of disclosure of facts and associations which would not give rise to a serious question as to the constitution of the court would only cause unwarranted consternation amongst litigants.
KIEFEL CJ: Mr Penglis, we have read…..and we can read it. You do not need to read it out for us.
MR PENGLIS: I am sorry, your Honour.
KIEFEL CJ: Perhaps you could just make your points by reference to the paragraph.
MR PENGLIS: Yes. Well, can I make – I will get onto it then. I am sorry, your Honour. Can I take you then to 175:
There was no requirement that the primary judge in this case disclose his friendship with counsel . . . or, until immediately before the trial commenced, for him to seek permission from the other parties before they were in private contact . . . However, after judgment was reserved, before he participated . . . That this did not happen suggests that the primary judge did not appreciate that the strictures against private communication which applied when the hearing was underway continued until judgment was given.
We submit that is an extraordinary proposition. Because a judge had a communication after the event suggests that he just did not know that he should not. Then:
However, the hypothetical observer would understand that a judge –
might be wrong:
and, as a reasonable person, would not regard the lack of disclosure as suggestive of anything sinister about the contact.
Forget the word “sinister”. That is a red herring. It does not have to be sinister, but the notion that a hypothetical lay observer would simply say, “He will make mistakes; I am not going to be troubled by it” is of great concern and, we submit, wrong. Then:
As to the contact itself, based upon there being no challenge to or further explanation sought as to the content of paragraph 4 . . . we accept that counsel made no representations to the primary judge on behalf her client and there was no discussion of any matter that the primary judge would decide or which might potentially influence that decision . . . nothing was discussed that pertained to the adjudication and determination.
We say, firstly, again it is not the question of making a finding as to what was said in this discussion; it is the fact that the discussion occurred without disclosure. That is what this case is about. Secondly, a rhetorical question: how does one come to that conclusion where the communication actually says – this is the disclosure paragraph 4 – the communications do not concern the substance of the case, which has already been noted and begs the question, if not the substance, then what? In paragraph 176, the court continues:
the hypothetical observer would give this matter anxious consideration, as we have, because the fact that there was any discussion about the case is troubling.
We accept that.
Thus, careful consideration would be given to the fact that this was a professional judge who had taken an oath of office to do right by all manner of persons and to conduct himself without fear or favour, affection or ill will. And that as an officer the court, it is to the court and not to her client that counsel owed her paramount duty.
Then 177 ‑ ‑ ‑
GLEESON J: Mr Penglis, just looking at those last two sentences, do you accept that aspect of the majority’s reasons?
MR PENGLIS: Good question.
KEANE J: Mr Penglis, do not the last two sentences speak from the perspective of the judge? They do not speak from the perspective of a hypothetical lay observer.
MR PENGLIS: I accept that, your Honour.
KEANE J: A hypothetical lay observer does not share the appreciation that judges and lawyers have for each other.
MR PENGLIS: Having heard that, I would respectfully adopt your Honour’s observation. The answer to Justice Gleeson is no, we do not accept that. I have one more page to go.
GAGELER J: There is also a tension, is there not, Mr Penglis, between what is said in 175 and what is said in 176? In 176 we are told you can take into account this was a professional judge, whereas in 175 we are told to accept that this might be a judge who does not understand the basic rules of professional conduct.
MR PENGLIS: I would respectfully agree and adopt your Honour’s observations. One more page to go, and two cases, and then I will sit down. At 177 – I know this is very long, but I need to disassemble, in effect, the majority’s reasoning:
The cessation of communication by text messages during the trial . . . would be seen as very significant and, as we said earlier, demonstrates that the primary judge and counsel strove to ensure that they were true to their oaths and duty to the court and thus the administration of justice. That they misapplied the principle . . . is not unheard of –
All of these matters, we say, in our respectful submission – 177 really repeats the matters already said and we take issue with everything in it. At 178:
There is no scope for misunderstanding the principle . . . No less importantly, counsel for the wife makes it plain that “the communications did not concern the substance of the . . . case”, and that explanation went unchallenged –
This is an issue in respect to the onus which the majority take. They say well, it is our onus to establish bias, you did not establish all the facts, you did not challenge it, so, therefore, you take as accepted the unchallenged evidence:
Thus, the hypothetical observer is not left wondering about whether private representations were made and knows they were not.
Again, where does that come from? There is just no foundation whatsoever for that observation. The rest of the paragraph basically says the hypothetical lay observer will know that if there was anything of……the judge would have put his hand up and told everyone. There is a tension between that and the proposition that we know the judge did not do what he was supposed to do.
So, how does the hypothetical – the fair‑minded lay observer say, well, okay, we accept that had anything serious happened he would have put his hand up – again, something that the hypothetical or fair‑minded lay observer probably would not know anyway, but even if they did, how could he reconcile that proposition with the fact that the fair‑minded lay observer will know that this judge in fact did what he should not have done.
Paragraph 179 is entirely irrelevant to the consideration, it is neutral. So, this is the end result:
The net effect of this is that although we agree with the husband that at first blush the hypothetical observer would have reasonable grounds to be concerned about private communication between the primary judge and counsel for the wife after judgment was reserved, the totality of the circumstances would be sufficient to dispel concern –
We say that is just plain wrong. The fair‑minded lay observer would be horrified by what has happened here – and I use those words advisedly. They would be horrified by what has happened here.
Two final points, subject to anything further that the Court has for me – two authorities. In the joint book of authorities, volume 5 at Part D, page 628 is the Aussie Airlines Case, Justice Merkel. At page 633 of the book, page 758 of the report, his Honour identifies the:
circumstances which may give rise to a duty of disclosure and those which give rise to a duty to disqualify.
Can I take the Court down to the final paragraph on that page:
Secondly, the failure to disclose, of itself, can be one of the circumstances which together with others may give rise to a reasonable apprehension of bias . . . A party or the public may well be left with the impression that there was intentional concealment or non disclosure, or that something was “wrong about it all”.
We say that is entirely apposite for this case.
A failure to disclose, no matter how unwitting, can undermine public confidence in the integrity of, and the administration of justice by, the judicial officer or the tribunal concerned.
I will not read it all, but if I can just read part of the next paragraph:
Thirdly, disclosure, of itself, necessarily assists in securing the object that justice is “seen” to have been done . . . That is particularly so where the duty to disclose may arise in respect of circumstances known to the tribunal and possibly some, but not all, of the parties or their legal representatives. In such circumstances the duty to disclose may be a duty owed by both the tribunal and the parties aware of the relevant circumstances.
GAGELER J: What is the source of the duty?
MR PENGLIS: The source of the duty is - in my respectful submission, the source of the duty arises from ensuring that, in a democratic society, the judicial arm is seen to discharge its obligations, as it must, impartially and be seen to do so impartially. The authorities which indicate such a duty are in fact referred to by the majority and the minority in this case.
GAGELER J: So, the way you put it, it is just a flipside of the “reasonable apprehension of bias” test?
MR PENGLIS: It is not the flipside of the “reasonable apprehension of bias” test. It is what gives rise to the “reasonable apprehension of bias” test.
GLEESON J: Mr Penglis, is another way of looking at this really that it is about not having the communications at all, because realistically, it seems rather unlikely that the judge would have the communications and disclose them. The issue really is about whether or not the communications have occurred.
MR PENGLIS: Quite, they should not have occurred. The authorities – I am not going to go through them; they are in the reasons – made clear that there should not be communication. That is the rule. To preserve the sanctity of the judicial process there should be no communication. That is the starting point. It is not that you can have communication and then disclose it. The starting point is that there is no communication, and you only communicate, during this period, if you, in effect, have the agreement – you disclose the need to communicate and you have the advanced agreement of the other party. That is the rule. This is all after the event.
Can I put it this way? The conduct here is the communication. That should not have happened. It is made more egregious by the fact that having happened there was no disclosure of it. That was made even more egregious by the fact that we had an application to disqualify this judge for ostensible bias and, again, the judge sat there, counsel for the wife sat there, knowing relevant information, and kept quiet. That is how we analyse it. The last thing I want to do is to – to try and avoid dealing with this in reply ‑ ‑ ‑
GORDON J: Sorry, Mr Penglis, can I make sure that I understand your submission. Is it the complaint made that, to pick up Justice Gleeson’s point, there was no seeking of consent to any communication over the entire period?
MR PENGLIS: Yes.
GORDON J: The second complaint is the non‑disclosure, consistent with Ebner at 185 that the trial judge was at least obliged to lay all relevant facts and matters on the table, especially at the time of recusal?
MR PENGLIS: Yes.
GORDON J: Then, thirdly, the form of the disclosure that is then made by counsel for the wife, in effect, completes the picture?
MR PENGLIS: We say it does not – well, the answer ‑ ‑ ‑
GORDON J: …..probably the wrong word, but in a sense it sets the ‑ ‑ ‑
MR PENGLIS: It does not neutralise what has happened before ‑ ‑ ‑
GORDON J: You say it exacerbates it.
MR PENGLIS: It exacerbates it. Yes, your Honour.
GORDON J: In Ebner, the Court identified the reasons - in a sense why there was this requirement for non‑disclosure by having regard to the fact – I withdraw that – for non‑communication by reference to the fact that it is an adversarial trial and consistent with democracy and the other provisions to which they refer, you are entitled to have an independent and impartial tribunal hear and determine your matter. Is that where, in a sense, this obligation arises from, in that way, rather than some duty?
MR PENGLIS: Yes, your Honour, but there is an overlay and not only does that have to happen, it has to be seen to happen.
GORDON J: The way Ebner put it, in a sense is, the judge is disqualified – if you accept that as the principle, then they would say a judge is disqualified if the fair‑minded observer might reasonably apprehend that they do not bring that impartial mind and then the end play, I think, then is of course there is a retrial if that is upheld.
MR PENGLIS: That is the inevitable consequence of all this.
GORDON J: Yes, I see.
MR PENGLIS: There is no halfway house.
GORDON J: Thank you.
MR PENGLIS: I will leave it at that. There is an authority my learned friend wants to refer to that is not in the book, but I will deal with it later.
GLEESON J: Mr Penglis, I did have just one more question. Could you go to pages 540 and 541 of the appeal book.
MR PENGLIS: Yes, your Honour.
GLEESON J: You see that extract from the judgment in Concrete.
MR PENGLIS: Yes.
GLEESON J: Was the husband put to the election that is identified at the top of 541 before the Full Court?
MR PENGLIS: I was not there. Can I take instructions?
GLEESON J: Thank you.
MR PENGLIS: No, I am instructed, your Honour. Unless there is anything further, I will ask Mr Robertson to deal with the remaining grounds.
KIEFEL CJ: This might be a convenient time for the Court to take its morning break.
AT 11.21 AM SHORT ADJOURNMENT
UPON RESUMING AT 11.38 AM:
KIEFEL CJ: Yes, Mr Robertson.
MR ROBERTSON: May it please the Court. Grounds 2 to 4 advance the proposition that the majority below erred in failing to conclude that the primary judge erred in his interpretation decision and as a consequence it was beyond his power to make further orders pursuant to section 79 of the Family Law Act.
After hearing the original trial in this matter in December 2011, Justice Crisford determined in her discretion that the net assets of the parties should be divided 62 per cent as to the husband and 38 per cent as to the wife. The orders reflecting that determination appear at page 5 of the appellant’s book of further materials, which I will take your Honours to in due course.
The orders, in particular, paragraph 5, on page 6, required, among other things, the sale of the former matrimonial home; at paragraph 7 for the wife to transfer here shareholding in a company to the husband and at paragraph 8 made provision for a superannuation‑splitting order pursuant to section 90MT of the Act.
Paragraph 1 of those orders, in our submission, simply summarises her Honour’s ultimate determination as to how the net assets of the parties should be divided but does not of itself actually affect any alteration of property interests as contemplated by section 79 of the Act.
As your Honours will see from the orders, there was a requirement upon the vesting of the trust, which is dealt with at paragraphs 2 to 4, to pay the fourth respondent in this Court, who was the fifth respondent before Justice Crisford, the sum of $338,000. Paragraphs 2 to 4 were the subject of a successful appeal, the decision of the Full Court appearing in that core appeal book. In particular, I would like to take your Honours to page 113 of the core appeal book, at paragraph 95, where the Full Court expressed great reservations about:
whether the conclusion that her Honour apparently reached, that in all the circumstances it was “proper” to make the proposed orders, was open to her having regard to –
a number of matters which included the findings that Justice Crisford had made in relation to the genesis of the assets in the trust, that the ultimate controller of the trust was the husband’s mother, the fourth respondent, and in relation to the historical distributions that were made from the trust to the husband’s mother. Ultimately, the Full Court concluded that the fourth respondent’s appeal must succeed and then at page 115 of the core appeal book dealt with the future conduct of the proceedings and at paragraph 102 pointed out that:
the only relief sought by the appellants . . . was that the three orders appealed be set aside.
They go on to make the observation about the “uncertain situation” that the parties would then find themselves in, particularly given what the Full Court termed the:
unusual terms of the trial judge’s first order –
which was the order to divide:
the net assets of the parties (as set out in the schedule –
in particular percentages. The Full Court also noted that:
neither the husband nor the wife –
had appealed any of the other orders made by her Honour Justice Crisford, and so there is nothing that they can do about those. What the Full Court then did was make a suggestion that:
one course open to the husband and the wife would be to make an application . . . under s 79A(1)(b) (circumstances have arisen making it impracticable for the orders to be carried out) –
Now, stopping briefly on this question of impracticability, the only order which could even remotely be possible of characterisation as being impracticable would be paragraph 1 of the orders, which simply specified the percentages to which the net assets of the parties were to be divided.
That order was not, we say, an order that actually altered the interests of the parties or either of them in any particular property, at least as that concept was discussed by this Court in Mullane which appears at volume 3 of the joint book of authorities commencing on page 288. Properly construed, we submit the order simply reflects in summary form the ultimate conclusions reached by the primary judge in the exercise of her discretion.
The second point I would seek to make in relation to that is that no attempt was made by the Full Court in 2013 to actually assess by reference to evidence whether there was as a matter of fact any impracticability. It is to be remembered that the findings of the primary judge as to the net assets of the parties, which appears in the schedule appended to her Honour’s orders, include two‑fifths of the trust, namely, the parties’ interest in the trust.
Now, that interest did not cease to exist, and the parties retained the proprietary interest in the trust in the same nature as a specified beneficiary in what is otherwise a general discretionary trust has an interest in the trust. But no attempt was made to ascertain whether the percentage division, 62 per cent to the husband and 38 per cent to the wife overall, could otherwise be met by, for example, topping up the wife’s entitlement one way or another from the proceeds of sale of the former matrimonial home in [R property].
As it transpired, the first respondent did bring the foreshadowed section 79A application. That was eventually distilled down into a number of orders which were the disputed issues which ultimately were heard on 22 and 23 January by the primary judge. Slightly over a year after they were heard, the primary judge published the interpretation judgment, concluding that:
the power of the Court to make orders under s 79 had not been exhausted or “spent” –
and in doing so dismissed the applications for relief by the wife, in particular paragraphs 2, 3 and 4 which included the wife’s applications for declarations that the court continued to have power to make further orders and dismissed the wife’s section 79A application.
That dismissal occurred notwithstanding a conclusion by the primary judge that if he was wrong in relation to the power to make further orders that he considered they would be liable to be set aside pursuant to section 79(1)(b) of the Family Law Act on the basis of impracticability.
However, again, in reaching that determination there was no consideration by the primary judge factually of whether the orders were indeed practicable. Rather, the conclusions of the primary judge focused not on impracticability but on whether the orders reflected the spirit and intent of her Honour Justice Crisford’s reasons. We say in doing that the primary judge erred and approached it through the incorrect lens.
In any event, the power that was ultimately exercised by the primary judge was not an exercise of section 79A power but, rather, a further exercise of section 79 power. Whilst it is accepted that in doing so the primary judge did not, at least expressly, set aside the earlier orders made by Justice Crisford, the orders that were made by the primary judge were obviously and fundamentally inconsistent with the earlier orders.
We have set out at paragraph 63 of our written submissions examples of why that is the case, but one example is the competing superannuation‑splitting orders are obviously incapable of reconciliation. The order made by Justice Crisford was to split 50 per cent of the husband’s interest in the fund to the wife, whereas the orders made by the primary judge were to split 100 per cent of the superannuation to one or other of the spouses, depending on what happened with the other assets.
The alternative answer which is advanced by the first respondent, namely, that the primary judge was continuing to exercise what they describe as the iterative power referred to in cases such as Hickey & Hickey, which appears in volume 5 of the joint book of authorities commencing at page 720, and the case of Gabel v Yardley (2008) 40 Fam LR 66, which is at volume 5, Part D of the joint book of authorities commencing on page 690, we say cannot and ought not be accepted.
In Hickey the Full Court of the Family Court of Australia discussed the notion that:
an order made under s 79 is a “once and for all proposition” –
The discussion to which I specifically refer is at paragraph [46] of the Full Court’s decision which your Honours will find at page 736 of the joint book of authorities where the Full Court refers, with approval, to the observations of Justice Nygh which were then recently affirmed by the Full Court in In the Marriage of Sommerville, and then at paragraph [47] go on to say:
The principle demonstrates that but for the operation of s 79A, the court has power to make only one order for property settlement pursuant to the provisions of s 79. Thus, any such order inherently has the effect of finally disposing of all issues relating to the disclosed property of the parties. This has two significant effects on property orders. First, it means that “catch all” –
provisions are ineffectual:
Second, an order for property settlement made pursuant to . . . s 79 cannot legally constitute “orders” in the plural sense, but rather is a single order made up of various paragraphs or clauses.
Now, the proposition that we advance is that when Justice Crisford made orders in December 2011, Justice Crisford exercised the section 79 power once and for all. It is not suggested, or I do not think it is suggested, that but for what occurred in relation to the appeal the court would have retained any further power to make a further order pursuant to section 79 or that Justice Crisford’s orders were something other than the final exercise of that “once and for all” proposition.
KIEFEL CJ: Mr Robertson, I take it that when the Full Court effectively revoked orders 2, 3 and 4 that the means by which the ultimate settlement ordered by Justice Crisford, the means were - part of the means were removed?
MR ROBERTSON: That may have been the factual outcome but the difficulty with that proposition, Chief Justice, is that the ultimate division, I suppose, of the net sale proceeds depended on what was actually realised from the trust. So, the trust assets held at the time were not held in cash but were rather held in various items of property, real estate and the like.
KIEFEL CJ: Was the wife a beneficiary, would have received under a distribution?
MR ROBERTSON: Both parties and their three children were all specified beneficiaries. The fourth respondent was a general beneficiary of the trust. The reason why in the schedule it is only two‑fifths of the trust that is included is because Justice Crisford made the finding that in the peculiar circumstances where this trust lacked an appointor the five beneficiaries had, in effect, a fixed entitlement in the corpus of the trust if it were to vest.
KIEFEL CJ: But for the purposes of the orders made by Justice Crisford, a distribution to the husband and the wife was part of the means by which the division of property was to be achieved.
MR ROBERTSON: A vesting of the entire trust was what was occurring, which would have involved distributions out to all five specified beneficiaries, yes.
KIEFEL CJ: Yes, after vesting.
MR ROBERTSON: Yes.
KIEFEL CJ: If that is the case, would not the orders made by the appellate court remove the finality of the orders made by Justice Crisford? Do they not then become something more in the nature of an interim order with further orders necessary as the appeal court itself suggested?
MR ROBERTSON: We respectfully disagree with that proposition, Chief Justice. We say that the Full Court had the power to remit that aspect of the application for rehearing, particularly in circumstances where the appeal was allowed on what was ultimately a denial of procedural fairness. The Full Court could have remitted that but expressly considered remittal and declined to remit and in those circumstances we say that does not change what is otherwise ‑ ‑ ‑
KIEFEL CJ: It did so because the Full Court considered it was not seized of the matter, there being no ground of appeal to cover it, which is by the by now, but the effect of the orders made by the Full Court is to leave something undone, is it not, that needed to be done to achieve the ultimate resolution of the division of property?
MR ROBERTSON: That is probably correct, Chief Justice, but it was by no means absolutely necessary for the trust to vest. That is the point that we make, that at no point either the Full Court in 2013, the primary judge or the majority of the Full Court below expressly considered whether it might have been possible for the wife to have received her 38 per cent interest in the net assets by topping up from the former matrimonial home.
KIEFEL CJ: Mr Robertson, was a distribution under the trust made?
MR ROBERTSON: No, there was no distribution.
KIEFEL CJ: So, the trust remains unvested and undistributed.
MR ROBERTSON: That is correct, yes. The point that we make is in relation to paragraph 6 of the orders made by Justice Crisford, which provided that the balance of the sale price for the former matrimonial home was to be divided between the wife and the husband as they may agree or as ordered by the court.
So, it was at least conceivable that in dollar terms the wife’s entitlement to 38 per cent of the net assets could be met by operation of paragraph 60 of Justice Crisford’s orders. It may have required giving the wife 100 per cent or something less than 100 per cent but it certainly was by no means, in our submission, impractical.
KIEFEL CJ: You mean it was open to the husband to achieve the result ordered by Justice Crisford by doing that - or the parties agreeing to do that?
MR ROBERTSON: The parties, yes.
KIEFEL CJ: But they did not, so by the time Justice Walters became seized of the matter and in effect made different orders, none of these things had occurred and the matter had not been finalised.
MR ROBERTSON: That aspect of the wife’s application had been set aside and not remitted for rehearing. The proposition that we really rest on in relation to these grounds is that the orders made pursuant to section 79 of the Act cannot become retrospectively interim, or their nature or their characterisation as final orders cannot be retrospectively altered by the happening of a future event.
KIEFEL CJ: That is if the orders remain in place, but they did not. They were changed by the Full Court.
MR ROBERTSON: Three of the paragraphs were set aside but the balance remained, and I suppose if ‑ ‑ ‑
GORDON J: Mr Robertson, the problem you have I think is exactly as the Chief Justice puts to you because the orders that were set aside were orders which were probably made under 90AE or 90AF, being orders attached to the 79 order to bind third parties in order to effect the settlement, and absent those orders there can be no effecting of the settlement of the property. They are not there, they do not exist, it cannot be done.
MR ROBERTSON: I agree with the proposition your Honour Justice Gordon puts. The part at which we diverge is whether those orders were necessary to effect a property settlement as between the husband and wife at the time and we say, based on the structure of Justice Crisford’s orders, that was not necessarily the case and for that reason, the power, I suppose, remained spent but the avenue that was open to the parties was pursuant to section 79A, but of course no orders were ever made pursuant to section 79A, nor was any consideration given as to whether the orders were as a matter of fact impracticable.
GORDON J: You accept, do you not, that even if you are wrong about that you have the inconsistency between Justice Crisford’s and Justice Walters’ orders?
MR ROBERTSON: There is manifest inconsistency between them, yes.
GORDON J: So, in a sense, whether they are final or not, one has two sets of orders on foot which are inconsistent, as I understand your case?
MR ROBERTSON: That is correct, and we say that inconsistency cannot stand, and it must mean that the later set of orders made by Justice Walters was made outside of the power, the power having already been exercised by Justice Crisford. The proposition put against us is that the court, in effect, retains power to make a further property settlement order if there is any property that has not been dealt with. There is, of course, difficulty with that proposition because the observations of the Full Court, again in Hickey at paragraph [49], talk about a further application cannot be brought in relation to both specified and non‑specified items of property except pursuant to section 79A.
If it is correct that if there remains property outstanding of the marriage that a further application for property settlement can be made, one is left to wonder what work section 79A(1)(a) has to do, which permits the Court to vary orders where the Court is satisfied:
there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance -
The short point is that the proper way to remedy the problem was pursuant to 79A, not a further exercise of section 79 power, and in order to properly exercise the section 79A power, the primary judge had to give consideration to questions of impracticability, which he did not do. Rather, the primary judge seems to have just seized upon the suggestion, and it was no more than a suggestion, made by the Full Court in 2013 that section 79A(1)(b) may be an appropriate way for these parties to deal with the matter further.
But, of course, there is no reason why the Full Court could not have remitted that aspect of the wife’s application that related to the vesting of the trust. Whilst there was no appeal in relation to the other orders, paragraphs 1 and 5 onwards, the appeal in relation to paragraphs 2, 3 and 4 could have, in our submission, been remitted but was not. Unless your Honours have any questions in relation to that aspect, I seek to move on to the question of waiver.
In relation to waiver, an appeal can only lie against a decree made by the Family Court of Western Australia pursuant to section 94 of the Family Law Act. It is well settled that the words “judgment, decree or order” have the same meaning as “all judgments, decrees, orders” in section 73 of the Constitution and refers to the formal orders which the Court may make.
It follows that the mere expression of reasons does not give independent, or independently give rise to a right of an appeal, and relevantly, the judgment only refers to operative judicial acts. It is not used, as it often is in other contexts, as a convenient abbreviation for reasons for a decision or reasons of judgment.
In our submission, there was nothing to appeal when the interpretation decision was made, because it was simply a determination on a question of law which would ultimately affect the final outcome. It did not fall within the definition of “a decree”, and it would not have been competent to appeal that decision for that reason. It was, in our submission, erroneous for the majority to conclude that the reasons finally concluded an important question of law, thus apparently elevating those reasons to the status of a decree.
Based on the reasons of the Full Court, a decision prior to trial on any important question of law, without any formal orders being made or entered, is now a “decree” for the purposes of section 94 of the Family Law Act and can be the subject of an appeal. But that then begs the question of precisely what constitutes an important question of law.
We also submit that it would be unfair to impute a waiver of a right of appeal in respect of which a decision does not fall squarely within the definition of “a decree” because of a subsequent assessment of the relative importance of the decision some years down the track. Questions of law, at least to lawyers, but probably to the party affected by them, are rarely, if ever, unimportant. Does it follow, then, that they are all capable of appeal? The answer, in our submission, must be no, but it is unclear where the line is drawn. For example, a separate decision on liability has long been held to be capable of appeal once damages are assessed.
The decision of whether the court retained power to make the orders sought as distinct to whether it should make the orders sought is, in our submission, sufficiently analogous to a separate decision on liability, so in our submission, the right to appeal the interpretation decision only arose when his Honour made final orders, because it would have been open to his Honour to revisit his determinations on the questions of law, an interlocutory question of law, at any point up to and including the delivery of his final judgment.
For that reason, we say there can be no waiver, irrespective of the subsequent assessment of the relative importance of the question of law, as was the approach taken by the Full Court, which, we submit, was erroneous. Unless the Court has any questions, those are my submissions.
KIEFEL CJ: Yes, thank you, Mr Robertson. Yes, Mr Ward.
MR WARD: Thank you, your Honours. Can I start with responding to Mr Robertson’s submissions. For the reasons set out in our oral outline, in paragraph 1, essentially, if Mr Robertson’s submissions are correct and the orders that were made by Justice Crisford were final orders that were not upset and completely disposed of the power under section 79, then the consequence is that Justice Walters had no power to make any further orders, and what flowed from that was all ultra vires. That would mean that essentially Justice Walters assumed jurisdiction when he did not have it, to continue to hear and determine matters under section 79. My learned friend’s written submissions at page 17, paragraphs 69 through to 71, refer to ‑ ‑ ‑
GLEESON J: I am sorry, Mr Ward, did you raise that issue in the Full Court?
MR WARD: I was not counsel in that matter, and I apologise, your Honour, I just do not know if that was raised in submissions or not. I was going to refer to paragraphs 69 through to 71 of my learned friend’s submissions, written submissions. They refer there to operative judicial acts as falling within judgments. In my submission, the assumption of jurisdiction by Justice Walters following from the interpretation judgment, and in particular, the making of an order that the parties do things for the purposes of continuing the trial of the substantive matter, is an operative judicial act.
My learned friends refer to Mullane and Gerlach as instances where there were rulings on matters of law that could be raised at an appeal following the determination of the final matter. In my submission, those are both distinguishable. Mullane was a case where there was a preliminary objection that certain grounds of appeal were not available, and Gerlach was an interlocutory order dealing with dispensing with the jury for the determination of the matter.
Those are properly described as interlocutory orders within jurisdiction, within the conduct of a matter. They should be distinguished, in my submission, from the present situation where, if my learned friends are right that the power was spent, there simply was no jurisdiction for Justice Walters to consider - to continue to consider matters under section 79. That should be the end of the matter.
Their failure to take any action consequent upon that interpretation judgment is now fatal to it being raised, both for the reason that it could have been dealt with as an appeal by leave from his interlocutory order that the parties do things to further prosecute the matter, or it could have been dealt with by writ of prohibition, and also for the reason that, following Justice Walters making that order, the appellant then went on to positively propose different orders being made under section 79, positively engaged with the case before Justice Walters, and sought the exercise of power under section 79 himself.
That can be seen, your Honours, in the Full Court’s decision at paragraph 212, page 599 of the consolidated appeal book, where their Honours set out a list of 11 points, and it is particularly points 8, 9 and 10 in that paragraph, where they specifically refer to instances of the appellant relying on section 79.
GLEESON J: But, Mr Ward, maybe I am missing something, but that would mean that the Full Court was wrong in dismissing the appeal, would it not? They ought to have set aside the orders of the primary judge on the basis that they were a nullity.
MR WARD: Only if my learned friends are right about the operation of section 79. So, my submission is that the majority is right as to the operation of section 79. The true position is that the power was not spent, following the Full Court’s decision. The starting premise of the orders made by Justice Crisford was that the trust would vest. There would be approximately – I think it was $2.49 million distributed from the trust to each of the husband and the wife.
Then the property distributions that were then – well, property adjustment orders that were then made under section 79 were determined by her Honour Justice Crisford to be just and equitable on that premise, that they had already got $2.49 million out of the trust. What is just and equitable changes if that does not happen, given – particularly, given that this trust otherwise does not vest until 2064, I think it is.
KIEFEL CJ: Mr Ward, what you have just said about section 79, in effect, not being completed, a conclusion that the division of property as just and equitable has not – the point has not been reached, is that consistent with what Justice Finn said in Gabel v Yardley at paragraph [126]?
MR WARD: I might just take a moment to turn that up, your Honour.
KIEFEL CJ: Her Honour seems to be referring to an earlier order made for property which might be characterised as an order pending further orders being made under exercise of power and until all of that is done a conclusion that the final exercise of the section 79 power is just and equitable cannot be reached.
MR WARD: Yes, in my submission, that would be consistent. As to my first proposition about the power being spent, some assistance might be drawn from the administrative law principles in that regard relating to ultra vires. But there is a distinction perhaps to be drawn between the administrative principles relating specifically to ultra vires, actions of an administrative decision‑maker versus the principle of finality in courts, although I note that the Western Australian Court of Appeal has referred to it as being a jurisdictional issue as well.
An authority not in the book, but in Polo Enterprises Australia Pty Ltd v Shire of Broome [2015] WASCA 201, supplementary decision at paragraphs 8 to 9, their Honours refer to it as being a jurisdictional issue as to whether or not there is power to enter upon orders that were previously perfected other than pursuant to the slip rule.
That is all I wish to say in response to those grounds of appeal, your Honours. If I could return then to the question of apprehended bias and I preface all of this by saying I do not wish to be seen as condoning the contact that occurred. I accept that it should not have occurred. It would have been far preferable that it had not occurred, but we have to accept that it has occurred, as set out in the letter and the real issue for this Court is, what would a fair-minded observer make of that?
Can I start on that firstly with the source of the duty, a question that came up in discussions between the Court and Mr Penglis. Justice Gordon referred to the question of whether there was an obligation rather than a duty. Your Honours, in my submission there is no rule of law that prohibits contact between counsel and a judge seized of the matter. It is not a rule of law. It is a matter of guidelines, as set out in the guide to judicial conduct, or matters of prudence, as is said in Ebner. It is important to distinguish between matters of prudence and matters of law.
KIEFEL CJ: Perhaps not in their consequences, though.
MR WARD: No. I am not suggesting that it should occur. What I am saying is that there is not a rule of law that prohibits it and if it occurs then it is necessary to consider whether that which occurred has the consequence of rendering the court unable to deliver a judgment with the degree of authority, independence, that the fair-minded observer would expect.
One can see that it is not an absolute rule from the Legal Profession Conduct Rules and from the Western Australia Bar Association Rules. They only refer to contact or communications on the substance of the matter, the express words used. If the judge is my next‑door neighbour, I am perfectly entitled to talk to the judge during the trial about my dog barking at his fence, without that having to be disclosed in court by the judge to the parties.
Taylor v Lawrence is a good example, your Honours, of the court essentially saying that judges ought not disclose matters that do not reasonably give rise to an apprehension of bias. Similarly, in Ebner, the requirement to disclose was described as going to matters that have the potential to give rise to an apprehension of bias. Not all contact or communications have that potential.
I am saying this by way of preface to say that we are not talking about an absolute prohibition. We are not talking about a rule of law. We have to look at this contact in the context of how a fair‑minded observer would see it with all of the attributes of that fair‑minded observer that are set out in the authorities. One particularly important one is that the fair‑minded observer would be taken to know of the operation of the Bar and the role of counsel as set out in Aussie Airlines.
KIEFEL CJ: Why is that so, Mr Ward, because the fair‑minded observer is not a barrister, the fair‑minded observer is not a judge, the fair‑minded observer is a hypothetical person who is bringing into account what people outside the profession and outside the judiciary may think about this conduct. That is the point of the lay‑minded observer. They are not a barrister or a judge.
MR WARD: Well, respectfully, your Honour has to some extent hit exactly on the point as to what is to be attributed to the fair‑minded observer and there appear to be two schools of thought in the authorities. The first, which comes through relatively clearly in Aussie Airlines, and also in Day, the Queensland decision that was provided supplementary, are to the effect that a fair-minded observer would have an appreciation of the role of the judge and the role of counsel and the relationships between counsel and Bench.
The other school of thought, which is referred to by Justice Merkel in Aussie Airlines and is in a passage that is cited by my learned friends at paragraph 37 of their submissions, comes from Justice Kirby. Justice Kirby, with respect to his Honour, appears to be a little isolated on this point.
So if I start with, perhaps, Smits v Roach, the situation there, we had the trial judge determining the matter, when his own brother was a named defendant, as the chairman of the partners of the law firm, and only Justice Kirby would have imputed to the fair‑minded observer a degree of what I have referred to in the written submissions as “scepticism” as to how the judge would set aside his personal relationships and exert his independence in determining the matter without fear or favour.
Justice Kirby had earlier said, in S & M Motor Repairs v Caltex, which is the case cited in Aussie Airlines, that the test is the man on the Emu Plains omnibus. Now, the man on the Emu Plains omnibus is more consistent with what your Honour Chief Justice Kiefel has referred to as the ordinary person who might not know of those circumstances of the Bar, the traditions of the Bar, the role of counsel, and the role of the judge, but, in my submission, those approaches to the fair‑minded observer are not supported by the majority of the authorities, which say that the fair‑minded observer is to be taken to have that degree of knowledge.
GORDON J: I, for my part, find some difficulty with that submission, in the sense that Ebner makes clear that you start from the proposition, I think, that, as I put to Mr Penglis, that you have the common law system of adversarial trial conducted by independent and impartial tribunal. It is that principle which, in a sense, is brought to the lay, fair‑minded observer, because the governing principle in a case of apprehended bias is that that person might reasonably apprehend that the judge did not bring an impartial mind to the resolution.
So, the knowledge of the rules of conduct of the barrister and the judge are not imputed. What they say is we have conversation, we have conduct, we have association, we have interest, and that is why it is necessary and important to identify upfront what it is that is said to give rise to the apprehended bias in order to test whether or not there is a possibility of apprehended bias in the way it is set out in paragraph 6. Have I missed something?
MR WARD: No, with respect, your Honour. I will come to what it is that is said to be the problem in a moment, but can I just deal, firstly, with the point about what the fair‑minded observer might know, by reference to the Queensland Court of Appeal’s decision in Day. Can I ask your Honours to look at paragraphs [53] and [54] of that decision.
At paragraph [53], their Honours talk about that relationship between lawyers and judges, and the ability of judges to put aside those personal associations, and the relevance of their oaths of office. Then, at paragraph [54], they specifically say that these are:
publicly known considerations . . . comfortably within the category of considerations -
and I will not read the rest of the sentence, but, in my submission, that is why Justice Kirby is out on his own when he talks about the man on the Emu Plains omnibus. The weight of authority is to the effect that some understanding of the structure of the legal profession and the role of counsel is to be attributed to the fair‑minded observer.
GLEESON J: Mr Ward, do you say that the fair‑minded lay observer would understand that this was a small Bar, a small profession in WA, practising in family law?
MR WARD: Yes, your Honour.
GLEESON J: Because if you do, why might not the fair‑minded lay observer think that this was an important matter for the counsel, that there are not a lot of big matters in the family law area, and therefore might be concerned that the judge might want to – might be disposed to giving his friend a good outcome?
MR WARD: Well, your Honour, firstly, can I say, if one goes back through all of the judgments that have been delivered in this matter, one will see that it has probably involved almost every family law practitioner in this State. It is not just one person who is involved here. Counsel who is in question here only was briefed in the matter, I think it was early 2016, and only dealt with two stages of the proceeding out of the, what is there now more than 15 judgments that have been delivered in it. So, it is not as if others did not also have an interest in that sense, if you were going to say, well, this is a small Bar and whoever has the brief should be favoured.
The second thing is, I do not say that a fair‑minded observer would take it into account as being anything more than just it is a factor that explains why there are likely to be friendships and relationships as between Bar and Bench. It is such a small pool of people that it is inevitable that there will be those sorts of friendships.
KIEFEL CJ: Mr Ward, does the case in the Queensland Court of Appeal decision in Day say any more than that the mere fact of a friendship between a judge and practitioner is not an automatic disqualification? What I am saying is they are not concerned with the position we have here where there was communication during the course of a hearing and after judgment was reserved.
MR WARD: That is right, your Honour, but we need to then come to the question of what that communication was and what is the relevance of that communication to the fair‑minded observer, which is where I was going to come to in a moment, but perhaps if I could head down that path now.
Mr Penglis took your Honours to the terms of counsel’s letter. Can I start by going back and putting that in a bit more context, your Honour. The letter itself appears at page 531 of the consolidated appeal book. Can I ask your Honours to note the second paragraph – or the first and second paragraphs of that letter. We see there that back in February 2016 then senior counsel for the husband inquired through another lawyer as to the nature of the relationship between the judge and counsel.
Now, having regard to the authorities dealing with the relationships between R and Bench, such as Aussie Airlines, in context that inquiry can only have been asking if there was something more to the relationship if it was a relationship in the nature of that dealt with in Kennedy and Cahill, which might have some exclusionary relevance because there was no reason to ask that question if the relationship was only one of friendship, as one would expect, as is said in Aussie Airlines. This was an inquiry about whether or not there was a personal intimate relationship.
GLEESON J: Yes, but, Mr Ward, your submission suggests that there is only one form of friendship.
MR WARD: No, I am not suggesting that there is only one form of friendship, but I am saying that there is a level at which the relationship might cross a boundary. An example of that is Kennedy and Cahill, where it was accepted, although not expressly an agreed fact, that the circumstances would lead a hypothetical observer to believe that there was an intimate relationship between the judge and the solicitor. That is over the line.
Yes, I accept that there will be graduations between somebody who was merely a colleague in chambers on another floor, versus the person who was in the room next to you, versus somebody who as in – forgive me, your Honours, I have forgotten the name of the case off the top of my head, but one of the authorities that was referred to the judge actually made a speech at the counsel’s wedding - they were that close.
GLEESON J: I might also suggest to you that there is not only one form of intimate relationship. The nature of a relationship that a practitioner and a judge might have is not to be expressed in a friendship or an intimate relationship.
MR WARD: I agree they are not binary, your Honour. There are scales. I am merely referring to this to try to set the context and what I am saying is that an inquiry that was being made in early 2016 must have been an inquiry as to whether there was something more than the usual friendships that arise between colleagues at the Bar and Bar and Bench. There was an inquiry as to whether there was something that was crossing the line and it was taken no further when he was told to ask for himself rather than send an emissary. It goes absolutely no further until after judgment.
So, if I can take your Honours then to the letter of 8 May 2018 at page 524 of the consolidated appeal book. In this letter, in the second and third paragraphs, the word “gossip” is used at least four times, gossip about the judge and counsel engaging outside of court in a manner inconsistent with their obligations.
To answer a point that came up in discussion with Mr Penglis about how can you say it is public, or how did the majority infer it is public, well it was conveyed by at least five practitioners. So, it is not as if it has been hidden. But this is all about gossip, about engagement between the judge and counsel. It is not about, and nowhere is it said here, an allegation that the judge may have been biased or may have been given information that he should not have had. This is an inquiry personal to counsel as to her relationship, her engagement with the judge. In fact, five times I think the word “gossip” appears because it is at the top of page 525 as well.
GAGELER J: Mr Ward, where is all this going? Are you trying to ask us to understand the facts differently?
MR WARD: The facts go no further than the letter. There are no findings of fact here. Everything we are talking about is an inference ‑ ‑ ‑
GAGELER J: Does this background somehow bear on what we infer from the letter?
MR WARD: Yes, it does, your Honour.
GAGELER J: In what way?
MR WARD: Where I am going is to say that all she was ever asked to do was to outline the circumstances of her dealings with the judge in the context of a letter that was written about gossip in the legal profession about them. That is all she was ever asked to do, and she did that. There is no allegation of apprehended bias at that point. There is nothing raised in that letter. The criticism is that she has been ‑ ‑ ‑
GLEESON J: I am sorry, Mr Ward. The second paragraph suggests that there has been conduct that was inconsistent with the barrister’s obligations and those of the judge. What else could that be directed to?
MR WARD: It could be directed to whether or not there was a relationship of the nature in Kennedy and Cahill and in my submission probably is ‑ ‑ ‑
KIEFEL CJ: Mr Ward, it might be more pertinent for you to concentrate on the communications that actually occurred and then tell us what we are to draw from them.
MR WARD: Thank you, your Honour. I was about to come back to how she responded and, as I say, she was only…..an outline of her dealings. She provided that outline. She was never asked to provide anything more. There was never any query raised about the extent of what she had said. What happened as a consequence of this letter of 28 May was that the appellant then amended its grounds of appeal in the Full Family Court and that amendment specifically asserts that a relationship was maintained. It is not about the contact. The ground of appeal below was about a relationship.
KIEFEL CJ: Mr Ward, this just does not seem to be particularly relevant. Why are you not focusing on the communications that were had between counsel and the judge, and tell us why – whether they do or do not, what we are supposed to make of them in the context of reasonable apprehension of bias?
MR WARD: Your Honour, where I was going with this is to say that, in that context, she has disclosed the existence of meetings, telephone calls, and text messages. The question then becomes what is it, out of that, that would cause a fair‑minded observer who is aware of the relationship between counsel – the general relationship between counsel and Bench, to think that the judge might not have brought fair mind to the matter?
There really can only be two points. The first is that there was something more to the relationship, that there was a relationship of the type in Kennedy and Cahill. That is expressly denied in the letter, and there is no basis on which a reasonable fair‑minded observer would conclude that she is lying on that point. The second basis has to be that there was a communication on something specifically relating to the case.
Now, both in the court below and in my learned friend’s submissions, the argument is made that when she responded in the letter, paragraph 4 at page 532, to say that:
The communications did not concern the substance of the [Charisteas] case -
that that necessarily means that she did communicate relating to the case, but just not the substance of it. In my submission, the fair‑minded observer would not necessarily reach that conclusion. Whilst, literally, it is open on the language, the far more likely explanation is that, in responding in that way, she was expressly adopting the words of the conduct rules, that is, that anything that she did say to the judge was either completely unrelated or did not touch on the substance of the case. There has never been any contest to her denial that they spoke about the substance of the case.
KIEFEL CJ: That rather leaves open the distinct possibility that they discussed the case in some way.
MR WARD: I accept, your Honour, that on the terms of the letter that is an inference that is open. The question is whether a fair‑minded observer would draw that inference in the first place or whether the fair‑minded observer would say, well, this is a professional counsel dealing with a professional judge and albeit they might be friends who have spoken, would they have discussed the substance of the case? Would they have deliberately misconducted themselves in such a serious manner? Would the fair‑minded observer draw that conclusion? In my submission, they would not. A fair‑minded observer does not just draw a negative inference.
GAGELER J: Mr Ward, do you defend paragraph 175 of the Full Court’s reasoning, which is to the effect, I think, that a fair‑minded observer would say, well, here is a professional judge and here is a professional counsel, but I will understand if they are mistaken as to their professional obligations?
MR WARD: I do not defend it absolutely, your Honour. I do adopt what is said about them being professionals, but as to whether they are mistaken, that depends upon the first question that I addressed as to whether there is an absolute prohibition or a rule of law that prohibits any communications. When you are referring to their obligations is it an obligation, as I said, for me not to talk to the judge next door about my dog barking at his fence, or is it only an obligation not to talk about the substance of the case, as set out in the conduct rules?
GAGELER J: You take very easy examples. What about responding to an invitation to go to a barbecue?
MR WARD: Again, that would depend entirely on the circumstances, your Honour. If it is a Bar/Bench barbecue at which there will be a large number of members of the Bar and large numbers of judges there, it is not a problem, provided they do not talk about the substance of the case. That is the specific express prohibition in the conduct rules, both of the Bar and the legal profession. It is also the specific point made in Re JRL, communications on the substance of the case.
GLEESON J: Mr Ward, would you accept that how the fair‑minded lay observer would deal with this might depend on the subject matter of the case?
MR WARD: In my submission, it would have to be a fairly extraordinary – well, it would be very fact‑specific, as is said in Ebner. It would depend on the subject matter of the case, perhaps the value of the matters involved and the nature of the – the importance of the case to the parties and their counsel. I am sorry, your Honour, I cannot give you a direct answer on that.
GORDON J: Do you add to that list, the judge’s response to the recusal application 1 May?
MR WARD: Your Honour, what I say about the judge’s response to the recusal application is, firstly, that that was a recusal application that was entirely concerned with the judge’s conduct in court. It was about the way the judge questioned witnesses, particularly the husband, and noting, as the Full Court did, as well, that the husband did not join in that application. The husband – there may be some difference of view, on reading of the Full Court’s judgment on that point, but on my reading of the Full Court’s judgment the husband made submissions in support of the other respondents, the trust’s recusal application, but did not himself apply, on the basis that the judge might not bring a fair mind to his case.
That was my reading of the Full Court’s decision, I understand – thank you, my learned friend has confirmed it. Sorry, I lost my train of thought there with that, but to come back to the recusal application, it was entirely related to the judge’s conduct in court. It was all about pre‑judgment. It was not about anything to do with relationships outside of court, and to the extent that it is then asserted that, well, just because a recusal application has been made on that basis, that the judge should then empty his pockets as to everything that might possibly form a basis for further recusal submissions, in my submission, that is not consistent with the authorities, particularly Taylor, that say that a judge ought not disclose matters that cannot reasonably rise to that level.
If the communications are what we are concerned about, if the communications were, to use my simplistic example about the dog barking at the fence, that cannot possibly rise to that level. So, the judge was under no obligation to make a disclosure unless the communications were matters that specifically related to the case, and more to the point, to the substance of the case. If there had been substance, there is no doubt the judge would have been out.
The question is, would the fair‑minded hypothetical observer infer that the judge and counsel deliberately withheld information, deliberately breached their professional obligations, and actually communicated, or were likely to have communicated on the substance of the matter, contrary to those obligations? In my submission, a fair‑minded observer would not. Perhaps Justice Kirby’s observer on the Emu Plains omnibus might have, but the fair‑minded observer as described in Day and in Taylor and in Aussie Airlines would not have reached that conclusion.
KEANE J: Mr Ward, looking at the last two sentences of paragraph 176, which refer to the consideration that will be given to the fact this was a professional judge who had taken an oath and counsel was an officer of the court and that would quell any concern, that being so, why would anyone – if that is right, if those propositions are right, why would anyone – why would any hypothetical observer ever have cause to give anxious consideration to these private communications at all?
MR WARD: It would depend, your Honour, on the nature of the communications and what was disclosed.
KEANE J: But we do not know what those communications were. We just know that they occurred in private and in circumstances where neither the judge, nor counsel, told the other side that they were going to occur.
MR WARD: Your Honour, can I answer that by going through a few steps. The first is to say that on the authorities the finding that a professional judge has an apprehension of bias should not be reached lightly. A lot of weight is placed in the authorities on the ability of a judge through years of training in the disciplines of the law to be able to exclude personal relationships, exclude extraneous factors and to decide cases on their merit and the fair‑minded hypothetical observer would be aware of that.
There may be situations that do cross the line in the sense that there is something to point to as a fact that would cause a fair‑minded hypothetical observer to doubt the ability of the judge to abide by his or her oath of office and ‑ ‑ ‑
KEANE J: So, there would have to be something extra beyond private communications. That would seem to be a test impossible to meet because the very nature of private communications is that no one knows about them except the parties to them.
MR WARD: Well, your Honour, examples of things that go beyond those private communications are evident in cases such as Aussie Airlines where the judge also had financial relationships with counsel in the matter. But just dealing specifically with communications, I accept that in the nature of private communications the parties might never know what was communicated unless the judge discloses it, or counsel discloses it.
The position, as expressed in Taylor and also in Ebner is that matters that – communications that have the potential to give rise to an apprehension of bias should be disclosed, and in Ebner they talk about that as a rule of prudence. To some extent, everybody has to rely on the judge doing the right thing and disclosing it, as occurred in Re JRL. If we ever got to a situation where a judge did receive communications on the substance of the case, but stayed private, did not disclose those matters, then, as Mr Penglis said, we are dealing with actual bias, not apprehended bias.
KEANE J: That is right, and your approach, or certainly the approach of the plurality in the Full Court, is really to say that because judges take oaths and barristers are officers of the court, that no one can reasonably apprehend bias where they engage in private communications while a judgment is reserved, or during the conduct of a case. There would be no rule about apprehended bias. The only rule would be a rule of actual bias, and we could forget about justice having to be seen to be done, we would just be worried about whether it has actually been done.
MR WARD: I am not meaning to be that absolute, if that is the way my position is coming across, your Honour. Perhaps, if I could ‑ ‑ ‑
KEANE J: Well, what I am putting to you is that that is the position that seems to be being asserted in paragraph 176 of the plurality’s judgment, and I am taking you to be supporting that.
MR WARD: Well, I am supporting the proposition that significant weight would be given to the professional judge’s training and oath of office ‑ ‑ ‑
KEANE J: No, their proposition is not that significant weight is given to it, their proposition is that carefully considering, in that circumstance, it removes any concern. It is not that weight is given to it, it is that it is decisive. My question to you is, why, if that is so, would anyone be anxious about it at all?
MR WARD: Well, firstly, your Honour, I do not - in my submission, that is not the reading that I would give to that second‑last sentence, that it is decisive:
careful consideration would be given –
in my submission, is a factor, and it is a factor that might carry weight, but it is not necessarily decisive.
As to the proposition that communications that do not concern the case or the substance of the case could never give rise to an apprehension of bias, that is probably right. If one comes back to the four categories of apprehended bias that Justice Deane set out in Webb, the two relevant categories are the relationship and the disclosure of information outside of the course of the trial.
GORDON J: That is just not possible, is it, in this sense, they overlap. One of the reasons why you have association is that you may have so many communications not about the substance, but the relationship between them is so close that they find difficulty in bringing about impartiality. They overlap for very good reason. One cannot, in effect, compartmentalise them.
MR WARD: I accept that, your Honour.
GORDON J: One cannot say just because we are not talking about the substance of the case, that that is a complete answer.
MR WARD: No, and that is effectively what I have said in our written submissions, your Honour, which is that the communications are not, of themselves, the issue. What the communications do is they bear on - they are evidence of the strength of the relationship, and it is the relationship that is the factor. That was the way I expressed it in our written submissions.
KIEFEL CJ: This might be a convenient time to adjourn, Mr Ward. The Court will adjourn until 2.00 pm.
AT 1.00 PM LUNCHEON ADJOURNMENT
UPON RESUMING AT 2.00 PM:
KIEFEL CJ: Yes, Mr Ward.
MR WARD: Thank you, your Honour. Could I come back to the questions that each of Justice Keane and Justice Gordon raised just before lunch and try to answer them in a clearer way by talking this through in a bit of a logic tree method of analysis.
The question concerns private communications. Let us assume that there were private communications made between counsel and the judge. There are three possibilities as to what happened with those communications. The first possibility is that they were disclosed by the judge to the parties. The second possibility is that they were undisclosed but later came to light and that is akin to the position of the judge’s inheritance of shares in Clenae v ANZ, the second case that was dealt with Ebner. The third possibility is that they might never have been disclosed, might never come to light.
We can discard that possibility for present purposes because you never would end up with any applications in respect of that if they never came to light. What we are really concerned with is the undisclosed private communications. Out of those undisclosed private communications there are two possibilities. They could either be on the substance of the case or they could be unrelated to the substance of the case. If they are unrelated to the substance of the case, then they cannot meet the second stage of the test in Ebner because they cannot be thought to have an effect on the outcome.
If they are related to the substance of the case, then there are two possibilities under that. Either they might affect the outcome of the case, in which case we are in apprehended bias territory, or they did affect the outcome of the case, in which case we are in actual bias territory.
GLEESON J: That cannot work because otherwise you would not have the blanket rule that you have that prevents members of a household holding a brief in a matter in front of their parent.
MR WARD: That is in the nature of the relationship category, Justice Deane’s third category in Webb. The scenario I am trying to deal with here, your Honour, is private communications, to answer Justice Keane’s point.
GLEESON J: I am not sure that you can quarantine them like that.
MR WARD: Your Honour, I would accept that the members of the same household is a category of relationship that is such that an apprehension of bias would arise. In that scenario, it is effectively assumed apprehended bias. It is a different scenario than private communications between counsel and Bench through a relationship of friendship or professional association.
On my logic tree, the path that we are in is going from private communications, which were undisclosed but came out later, and then we have to come down to that next step, were they on the substance of the case or not on the substance of the case. The undisputed denial in counsel’s letter is that they were not on the substance of the case.
So that, on my logic tree, leads us down the path of they cannot meet the second stage of the Ebner test and the only way you get through there is if the fair‑minded observer would reasonably suspect that counsel was lying on that point. Even if we assume for the moment that the communications were on the substance of the case, contrary to that denial, then the next question is might they affect the exercise of the judge’s judicial power? We are in the hypothetical scenario here because there is no evidence that the communications were on the substance of the case and it is denied, as I have said.
GAGELER J: When you use that expression repeatedly, what do you mean by “on the substance of the case”?
MR WARD: I mean in the sense of Re JRL…..matter that has the potential to affect the outcome of the case.
GLEESON J: What if the communications were about some problem that one or other of the parties had and the other one is providing emotional support in relation to that problem and what if the problem is something that would be embarrassing or might reflect the fitness of one or other of them?
MR WARD: Again, your Honour, the question is, does that communication have the potential to affect the outcome of the case? This is in the category of first step in Ebner. Is there a communication that has the potential to affect the outcome of the case? That is the first step. The second step then is, would a reasonable person think it might affect the outcome?
GLEESON J: What if the communication is one that means that one party to the relationship is extremely grateful to the other for, for example, maintaining a confidence?
MR WARD: Again, does it have the potential to affect the outcome of the case? That is always the touchstone. The two steps, you must identify what the communication is, identify the factor, and then would the fair‑minded hypothetical observer think that that might affect the outcome? There are all sorts of what‑ifs we could ask, but that is fundamentally part of the problem, here, is that we do not ‑ ‑ ‑
GLEESON J: That is exactly what the hypothetical fair‑minded lay observer would be doing, asking a whole lot of hypotheticals.
MR WARD: But we do know that there is an uncontested denial that the communications concerned the substance of the case. That is as far as it can be taken. The hypothetical observer might speculate as to what those communications were about. The hypothetical observer might even have asked, as might have been done in this case, but the question is, would the hypothetical observer, fair‑minded hypothetical observer, infer that counsel and the judge were misconducting themselves? In my submission, the fair‑minded hypothetical observer, with the attributes that are attributed to that person as a construct of the law in the authorities, would not make that inference.
Just dealing with this point about whether communications on the substance of the case might affect the exercise of the judge’s decision, one must bear in mind, always, also those instances where judges quite regularly exclude from their mind irrelevant matters, so, inadmissible evidence is the most common example. In Vakauta, there is the exclusion of the judge’s past views of the – what were referred to as the trinity of GIO witnesses.
Judges, by their training, necessarily exclude matters that are irrelevant to their decision. So, even if there is a communication on the substance of the case, it might be that that still does not rise to the level of excluding the judge on apprehended bias, it depends on the circumstances.
But we are not even in that category. We have an uncontested denial that what was said concerned the substance of the case. If it did not concern the substance of the case, it does not meet the second step in Ebner, because it does not have the potential to divert the judge from deciding the matter on its merits.
Just by way of illustrating that, in Aussie Airlines, Justice Merkel made the point that he was in a – “partnership” may not be the right term, but in an investment group with counsel in a hotel. You must assume, or the ordinary person would assume, that there are communications between the investors in that property. Those communications do not concern the substance of the case, they are not an issue.
In Smits, we have the brother of the judge as a defendant. One must assume that there would be communications between brothers. Justice Kirby, particularly, makes the point about the relationship can be assumed to be close, but it is a relationship, the nature of which you would assume would involve personal contact and communications unrelated to the case. They do not cause a problem.
Similarly, and this ties back to where I started with the context, it was widely known, certainly sufficiently known for senior counsel, then, for the husband to inquire, in early 2016, that there was a relationship of sorts between counsel and the judge. These sorts of personal and professional relationships can be assumed to involve personal communications unrelated to the case.
KIEFEL CJ: I think you are tending to go back over on ground you have already covered, Mr Ward.
MR WARD: Thank you, your Honour. Where that leads me to, your Honours, is to submit that even if one were to assume that there were communications touching on the case, although not concerning its substance, then, when one comes to apply the second step in the Ebner test, a fair‑minded hypothetical observer, with all the knowledge that the authorities say they have about the structure of the legal profession, the role of counsel, the role of judges, the oaths of office, the ability of judges to put irrelevancies out of their mind, would not think that those communications would have the effect of diverting the judge from deciding this matter on the merits. One factor that might be taken into account in that is the fact that, even in the judge’s decision, each party had success on separate issues. This is not a case where the decision was all one way.
There are two more matters that I wish to address. One was just to return to the question that was asked about the small jurisdiction - and clarify my answer there. I am not saying that there is any different test to be applied between jurisdictions based on their size. I am simply saying that, as a matter of fact, in a specialised area like this, contact is going to happen. The underlying test remains the same. There is no difference in principle.
The last point I need to deal with, your Honours, is on the question of waiver in this regard. This, in part, comes back to the first step in the Ebner test and identifying what is being complained about because if what is being complained about is a relationship, then that relationship was known. If what is being complained about is contact as an incident of that relationship, then really the contact is not the issue, the contact is just an incident of the relationship. The relationship was known. No point was taken back in 2016.
Where it becomes an issue is if the problem, identified in step one of the Ebner test, is communications. Now, I accept that the contact – the specific contact set out in the letter was not known and that cannot, of itself, constitute a waiver. But that contact was, for all we can see, an incident of the relationship, and that is why I have taken the point, in paragraph…..of the oral outline that there is a lack of clarity on the appellant’s case as to what exactly it is that they are complaining about.
The ground of appeal below was about the relationship. The submissions extend well beyond that and raise questions about whether counsel’s fees have even been paid. I do not appreciate that point to be pressed as a ground of apprehended bias, but there needs to be clarity. You need to actually pick what it is that the parties are complaining about as the factor that might lead the judge not to determine the matter on the merits.
In this case there is a lack of clarity about that. In part, it is a lack of clarity because counsel was never asked – never asked to provide anything more than an outline of her dealings with the judge, which she did. She could have been asked – there were 10 months between the letter and the hearing before the Full Court. She could have been asked. She was not.
Now, there is an issue as between the parties on that as to who had the onus there. My submission is that the onus was on the party seeking to impeach the judgment. There is absolutely nothing to suggest that a fuller answer would not have been provided had it been sought.
That being the case, all that is really left is contact that really is an incident of a relationship. On the terms of the letter we cannot exclude the possibility that some of that occurred, at least in the period between close of the evidentiary phase in submissions, but that is speculation. In that circumstance, really everything ties back to the relationship because it is the relationship – not anything that was said, because we have an uncontested denial that whatever was said concerned the substance of the case. The real issue is the concern that the judge might have been diverted because he was friends with counsel and if that is the basis of the concern, that has been waived.
I did say that was the final point. There was just one very brief matter I did want to pick up on. Mr Penglis, right at the outset of his submissions, broke up the periods of time that are referred to in the letter and referred to there being numerous texts in each of the periods before trial and after trial up to 15 September. That is perhaps, in my submission, a little stretched way of interpolating the data. Just because there were numerous texts over what was set out originally as a 15‑month period does not mean there were numerous texts in one…..to that period before. It is just a matter of how one reads it. But one cannot assume that there were numerous texts in all parts of that period.
Unless there is anything else I can assist your Honours with, those are my submissions.
KIEFEL CJ: Yes, thank you. Do you have anything in reply, Mr Penglis?
MR PENGLIS: Very briefly. Can I just deal with that last proposition. The date of 15 September 2017 is simply a date proffered by trial counsel for the wife, so it is she who drew the line at 15 September from when text communications went from numerous to occasional. So, there is nothing in my learned friend’s point there.
In regard to the waiver point, can I take the Court to page 590 of the second volume of the appeal book to point out that the plurality dealt with this below and they found that there was no waiver. We adopt their reasoning. Indeed, you will see from there that there was even a concession made below on the part of the wife that waiver could not even arise. So, here, where now having raised the point of waiver, where there was a concession below, that waiver could not succeed. But, in any event, for the reasons set out in 185 and 186 it must fail and the primary issue there is that you cannot have a waiver where you complain it is communications of which you did not know.
Also, my learned friend made the observations, your Honour, that below the complaint was in regard to the relationship, not the contact, but, again, that is dispelled in those paragraphs 185 and 186 as being incorrect.
Your Honour the Chief Justice asked my learned friend about Day’s Case and the question, as I recall, was whether or not it was a case about relationships or contact. My learned friend, with respect, correctly answered it was a case only about relationship, but not contact. But, can I invite the Court to please turn up paragraph [54], being one of the paragraphs that you were taken to - my learned friend took you to [53] and [54] and he did not read this part of [54]. In [54] there is a reference to Justice Kirby in Johnson v Johnson and then, three lines from the bottom:
Such an observer would appreciate friendships between lawyers and judges are a mundane incident . . . Hence, the fact that lawyers and judges participating in the same case happen to be well known . . . For that reason, non‑disclosure thereof will of itself be logically incapable of evidencing grounds for apprehension of bias.
Would the Court please read the next sentence and the reference to “potentially concerning forms of ex parte contact during the case” is this case.
Three final points. In regard to my learned friend’s submissions, much of them continue to conflate the distinction between actual bias and ostensible bias. I have dealt with that in my previous submissions. I will not repeat it, but I simply make the observation that that conflation has continued through his submissions.
Can I also make the submission that much of what my learned friend says is simply inconsistent with the statements of law that even – of this Court – I will simply refer to them because they are reproduced in the appeal book – I invite the Court in due course to just re‑read what the Court said in Ebner set out at paragraph 545 and in Lilydale at 546 where, unlike actual bias, the concern is what might happen and the appearance.
The final point I wish to make is this. My learned friend has, on numerous occasions today, said that the communication is not the issue. They reflect on the relationship. That is manifestly incorrect. That is not our case. It is the wrong way around. What we complain of is the undisclosed communications. They are the issue and they have become even more concerning given the overarching friendship between the parties to the conversations. So, in other words, it is the communications that are the subject of our complaint and they are aggravated by the fact that they were undisclosed communications, not just between professionals, but between friends.
To conclude, two final propositions. Justice Gageler posited the example of the barbecue. My learned friend responded, well, it was a barbecue in front of – an official barbecue where there were a lot of other judges and barristers. That is fine. That, of course, is miles from this case. The appropriate analogy is having a private barbecue at the judge’s home, inviting only the trial counsel for the wife. That is the appropriate analogue and it rings alarm bells. It cannot ring alarm bells.
The final proposition is this, and Justice Keane touched on it and we deal with it at paragraph 54 of our written submissions. At the end of the day the rhetoric question must be asked: given such an egregious breach of the strictures, including absence of voluntary disclosure and unsatisfactory nature of disclosure made by one of the parties to the communications, if such a violation of the strictures is to be countenanced, as the majority have been done, why were……strictures at all.
Unless there is anything further, they are our submissions in reply.
KIEFEL CJ: Yes, thank you. The Court reserves its decision in this matter and adjourns to Tuesday, 7 September at 10.00 am.
AT 2.26 PM THE MATTER WAS ADJOURNED
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