Commonwealth Bank of Australia v Haughton [No 2]

[2020] SASC 187

Supreme Court of South Australia

(Civil: Application)

COMMONWEALTH BANK OF AUSTRALIA v HAUGHTON [NO 2]

[2020] SASC 187

Ruling of The Honourable Justice Livesey (ex tempore)

28 September 2020

COURTS AND JUDGES - JUDGES - DISQUALIFICATION FOR INTEREST OR BIAS - GENERALLY

Mr Haughton made an application for an order that a Judge of the Supreme Court disqualify himself from hearing the trial in this action.  The basis for the application was that a family trust associated with the Judge held shares in the applicant Bank, a listed public company.

Held; the application is dismissed.  There is no realistic possibility that the outcome of the case will affect the value of the shareholding.

Commonwealth Bank of Australia v Haughton [2020] SASC 135; Contract Mining Services Pty Ltd v Adelaide Brighton Cement Ltd [2020] SASC 69; Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337, considered.

COMMONWEALTH BANK OF AUSTRALIA v HAUGHTON [NO 2]
[2020] SASC 187

Civil:        Ruling

1. LIVESEY J:        For some months now this matter has been listed for trial commencing today.  I explained the background to this litigation in my reasons delivered on 17 July 2020, Commonwealth Bank of Australia v Haughton.[1]

   [1]    Commonwealth Bank of Australia v Haughton [2020] SASC 135.

2. Mr Haughton did not appear when this matter was called on for directions on earlier occasions.  In addition, Mr Haughton has failed to file documents despite there being orders that he do so.  When the matter was called on earlier today, Mr Haughton asked the Court to receive an affidavit on the basis that it was relevant to his application or request that the trial in this matter not proceed today.  I received the affidavit for that purpose without objection from the Bank.

3. When addressing his affidavit, Mr Haughton declined to explain its meaning, telling me that the affidavit “speaks for itself”.  However, Mr Haughton did read out on a number of occasions extracts from what sounded like the test for disqualification for ostensible bias.  Part of his script included a series of questions directed to me.  These included questions about whether I was impartial or biased and, at one point, he asked me to verify my impartiality on oath.  I assured Mr Haughton that I did not regard myself as partial or biased but I declined to verify any of that on oath.

4. Mr Haughton then asked whether I had a financial interest in this case.  I assured him that I did not have a financial interest in this case.  Mr Haughton then asked whether I had a financial interest in the Bank.  I told Mr Haughton that I would check.  After doing so I informed him that a family trust associated with me held shares in the Bank.  I told Mr Haughton that I was a trustee and beneficiary of that trust.  Though Mr Haughton did not in terms suggest that this gave rise to ostensible bias, he said that he wanted “leave to appeal” because I was engaged in what he described as “an abuse of process”.  I explained to Mr Haughton that no decision had been made by me and so it was premature to consider an appeal or leave to appeal.

5. The Bank opposed disqualification.  Insofar as Mr Haughton complained that I was acting without the benefit of what Mr Haughton's affidavit had described as a “true bill” it submitted that I had not ruled on that issue.  In fact, I had asked the Bank to consider obtaining an affidavit to verify the extent of its claimed debt.  A few moments ago I have been assured that an affidavit in those terms will be produced by the Bank.

6. Insofar as Mr Haughton raises the question of the investment of my family trust, I considered the question of disqualification a little earlier this year in Contract Mining Services Pty Ltd v Adelaide Brighton Cement Ltd.[2]   As I then emphasised, it is necessary for a litigant in these circumstances to articulate the “logical connection” between the matter the subject of complaint and the “feared deviation from the course of deciding the case on its merits”.[3]  In argument before me today the Bank relies upon Ebner v Official Trustee in Bankruptcy where Gleeson CJ, McHugh, Gummow and Hayne JJ said:[4]

   ….  However, in the ordinary case, where a judge owns shares in a listed public company which is a party to, or is otherwise affected by, litigation, and there is no other suggested form of interest or association, the question whether there is a realistic possibility that the outcome of the litigation would affect the value of the shares will be a useful practical method of deciding whether a fair-minded observer might hold the relevant apprehension.  In such a case, if the answer to the question is in the negative, the judge is not disqualified.  If the answer to the question is in the affirmative, the judge is disqualified, not “automatically”, but because, in the absence of some countervailing consideration of sufficient weight, a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the case.

   [2]    See Contract Mining Services Pty Ltd v Adelaide Brighton Cement Ltd [2020] SASC 69, [7]-[12].

   [3]    Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337, [8] (Gleeson CJ, McHugh, Gummow and Hayne JJ).

   [4]    Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337, [37].

7. Although Mr Haughton emphasised the approach of Gaudron J in Ebner, that is a minority view and not binding on this Court.  With all respect to Mr Haughton, there is no “realistic possibility” that the outcome of this case will affect the value of the shares held in a listed public company such as the Bank, and he did not suggest otherwise.

8. In these circumstances I decline to disqualify myself from sitting on the trial of this matter.