Comlin Holdings Pty Ltd v Metlej Developments Pty Ltd

[2019] NSWCA 62

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:	Comlin Holdings Pty Ltd v Metlej Developments Pty Ltd [2019] NSWCA 62
Hearing dates:	19 March 2019
Decision date:	19 March 2019
Before:	Basten JA
Decision:	Refuse the application for recusal.
Catchwords:	CIVIL PROCEDURE – recusal application – whether reasonable apprehension of bias – exchange with counsel in the course of argument – nature of costs order – further listing of interlocutory application
Category:	Procedural and other rulings
Parties:	Comlin Holdings Pty Ltd (Applicant) Metlej Developments Pty Ltd (First Respondent) Nova Scotia Developments Pty Ltd (Second Respondent) Kayrouz Constructions Pty Ltd (Third Respondent) L.A.D.S. Developments Pty Ltd (Fourth Respondent)
Representation:	Counsel: P King (Applicant) J Stoljar SC; L Gor (First and Second Respondents) A d’Arville (Third and Fourth Respondents)   Solicitors: McKell Solicitors (Applicant) Sachs Gerace Broome (First and Second Respondents McLachlan Thorpe Partners (Third and Fourth Respondents)
File Number(s):	2018/185926
Decision under appeal	Court or tribunal: Supreme Court Jurisdiction: Equity Division Citation: [2018] NSWSC 761 Date of Decision: 28 May 2018 Before: Parker J File Number(s): 2014/285405

Judgment

1. BASTEN JA: Mr King, for the appellant, has raised at the outset of the hearing today an application that I recuse myself from the further hearing of the matter. The application was first made by a notice of motion filed on 4 February 2019. That motion was before the Court on 7 February 2019. Despite an invitation to Mr King to indicate whether or not he wished to pursue the matter, he declined to pursue it at that time. He now raises it this morning.

2. The application is based, he says, on two matters which arose in the course of a directions hearing on 13 December 2018 and a third which arose on 7 February 2019. The first matter arose in the course of dealing with the respondents’ application for security for their costs of the appeal. On 12 November 2018 it was accepted that security would be provided in a certain amount and by security over one or more properties. The appellant read an affidavit of a third party, Mrs Betty Bassil, who offered to permit the lodging of a caveat over one of three unencumbered properties of which she was the registered proprietor as security for costs.

3. When the matter came before the Court on 13 December 2018, counsel for the respondents, Mr Gor, noted that there was a problem with respect to the use of the properties by way of security, they being subject to a testamentary trust. Mr King responded, describing Mr Gor as saying that to use the properties as security "is to suggest either there's some threatened breach of trust or a breach of trust and if so, what is the breach of trust? We don't know what his case really is."

4. There was further discussion by Mr King as to whether there was a breach of trust or not. I noted, in relation to that issue, that Mrs Bassil had sworn an affidavit saying she was a registered owner of land and was prepared to caveat it in favour of a third party to the trust, "who has no interest in it and which on ordinary principles is well beyond the power of a trustee". I added, "it would be a breach of trust, it would probably be a form of fraud". It was that statement to which Mr King immediately took objection. He said that it was “completely inappropriate.” I then said that I had no knowledge about how these things had arisen and I was putting matters to him for his response, Mr Gor having raised the issue of a breach of trust. A breach of trust involves at least equitable fraud. The issue had been raised as to whether the offer put forward by Mrs Bassil could be accepted in these circumstances.

5. The further discussion in the transcript may or may not have clarified the issue, but it had nothing to do with the merits or otherwise of the appellant's case. It was to do with the proffer of the properties by a third party as security for costs, without explanation that the properties were the subject of a testamentary trust. In my view, there was nothing in the exchange which would have caused a lay observer, informed as to the issues in dispute and the matters before the Court, to form a view that I had prejudged any relevant issue. In these circumstances I am not satisfied that the observer may have formed the view that I might not bring an impartial mind to the resolution of the issues on that basis.

6. The second basis of the application was that I had made an order that the appellant pay the costs of the proceedings on 13 December with respect to security for costs, such costs to be payable forthwith. Mr King described the order that they be payable forthwith as a “penal order”. In fact, he took objection to that aspect of the order immediately it was pronounced. It was said to demonstrate a reasonable apprehension of bias because an order in those terms had not been sought by the respondents.

7. This complaint is also without substance. The respondents had sought to increase the quantum of the security to be provided, because of the steps which needed to be taken as a result of what they referred to as “misinformation” provided in relation to the properties which were in the name of a trustee. I declined to make that order, stating in my reasons, "I do not propose to increase the quantum of the security, but the appellant must pay the costs of the proceedings today with respect to the security for costs issue, such costs to be payable forthwith". The provision to the respondents of less than they had sought cannot demonstrate a reasonable apprehension of bias against the appellant.

8. The third matter was that, when on 7 February 2019 counsel for the appellant objected to the listing of his application to tender further evidence on the appeal before a single judge, I had accepted his objection and indicated that the matter would be listed before three judges of the Court. It was so listed. It appears that Mr King may have understood that to mean that it was to be listed before three judges who would not to be the judges hearing the appeal. There was no indication at that directions hearing that Mr King had wanted it to be listed only before the three judges who would hear the appeal; but, in any event, there was no suggestion that it would not be so listed. In fact, it has been so listed. The third matter raised cannot possibly give rise to any apprehension of bias in making an order in accordance with the proposal raised by the appellant’s counsel himself.

9. For these reasons, I decline to recuse myself.

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