Ding and Ding (No 4)

[2017] FamCA 1178

FAMILY COURT OF AUSTRALIA

DING & DING (NO. 4) [2017] FamCA 1178

FAMILY LAW – APPREHENDED BIAS – interim ruling in a trial about a call for the production of a document upon which a claim for legal professional privilege is raised – matter determined on the basis of which of two versions is the more probable – acceptance of one party’s version on the balance of probabilities does not mean that the credit of the other person is rejected or that such a finding permeates all disputed facts to the extent that he reasonable observer would consider that the matter has been prejudiced.

Family Law Act 1975 (Cth)

British American Tobacco Australia Services Limited v Lawrie and Ors [2011] HCA 2; (2011) 242 CLR 283
Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337
Johnson v Johnson (2000) 201 CLR 488
R v Watson; exparte Armstrong [1976] HCA 39; (1976) 136 CLR 248
Vakauta v Kelly [1989] HCA 44; (1989) 167 CLR 568

APPLICANT: Ms Ding

RESPONDENT: Mr Ding

FILE NUMBER: ADC 4389 of 2012

DATE DELIVERED: 18 October 2017

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 12 October 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Mcquade

SOLICITOR FOR THE APPLICANT: Harry Alevizos

COUNSEL FOR THE RESPONDENT: Mr Oakes

SOLICITOR FOR THE RESPONDENT: Jaak Oks Lawyers

Orders

1. That the application in a case filed 6 October 2017 is dismissed.

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

IT IS NOTED that publication of this judgment by this Court under the pseudonym Ding & Ding has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: ADC 4389  of 2012

MS DING

Applicant

And

MR DING

Respondent

REASONS FOR JUDGMENT

1. By her application in a case filed in Adelaide on 6 October 2017, Ms Ding (“the wife”) sought an order that I disqualify myself from completing the determination of her property and spousal maintenance application. The ground relied upon is apprehended bias.

2. To the extent it is necessary to contemplate the views of the Mr Ding (“the husband”), he opposed the application.

3. The substantive trial of the parties’ property and spousal maintenance proceeding was heard in Adelaide over four days in April 2017 and three days in June 2017.  Judgment was reserved on the last day to await written final addresses that were due from each party but in this case particularly, from the wife by 17 July.  The wife’s final address in writing however was delayed because of the illness of her counsel.  That submission was received on 8 August 2017 without demur from the husband and it was accepted.

4. The reasons for judgment and to the consequent ruling (to the extent that it was a ruling as distinct from an order) were delivered ex tempore on 15 June 2017. No appeal was subsequently lodged. On the following day, judgment was reserved. Nothing further was raised by the wife until her application on 6 October 2017.

5. The foundation for the application arises because on 14 June 2017 in the midst of cross-examination of the husband, the wife’s counsel called for production of a letter over which the husband claimed privilege.  The cross-examination was then stopped while argument ensued about the letter and its status.

6. The dispute arose in the following way. Although the wife made no reference in her affidavit of evidence in chief to the disputed letter, senior counsel for the husband cross-examined her (she was both the applicant and the first witness) about when and how she came to possess a letter said to have been written by the husband’s solicitor and dated 29 March 2010.  The cross-examination was in the context of questions about other personal property items which the wife had not mentioned in either her affidavit or her financial statement. That context became clear when I asked senior counsel about the relevance of the cross-examination. As there was no objection taken by counsel for the wife. I accepted the cross-examination was relevant.

7. The wife said she found the letter on the husband’s desk and, having regard to the timing, that was when the parties were still living in the home of the husband’s parents. She said she assumed the husband had read it and when she saw her name on it, as English was not her first language, she did not understand what it was about.  She said she asked the husband and he told her it was not important. 

8. Senior Counsel for the husband accused the wife of opening the husband’s mail but she denied that saying that it was her father-in-law who collected the mail and not her.

9. The wife then said that when the parties moved out of the parents’ home in 2012, she gathered up the documents and later put this letter in a safety deposit box which she had somehow obtained. In subsequent proceedings in the District Court of South Australia, an order was apparently made that this safety deposit box be opened by the wife in the presence of the husband and their two solicitors and that happened.

10. On the subject of his knowledge of the letter, the husband’s evidence was that he had never seen the letter until the day the safety deposit box was opened as a result of the District Court proceedings.

11. There was much mystery surrounding this letter. It seems that it was attached to an affidavit of the wife in the Federal Circuit Court and objection was taken to that. The document was removed from the affidavit and the court file. There was said to be an agreement between solicitors about the letter being returned on the basis that it was privileged.

12. In cross-examination of the husband, counsel for the wife called for the production of the letter and that led to the dispute about its status.

13. Counsel for the wife’s position (amongst other things) was that it was not the  wife’s intention was not to seek to adduce the letter into evidence but rather, to inspect it and he then described it as an application akin to discovery.  But significantly, the argument centred on whether or not the letter lost its alleged protected status on the basis of inter alia, waiver and that the husband’s actions were in the furtherance of a fraud on the wife, presumably the court but also that it was a fraud on the revenue. It was submitted that if so found, the letter could not be protected by legal professional privilege. To confuse the position further, it was said that there was no suggestion of any wrong-doing on the part of the solicitor who apparently wrote the letter.

14. Finally, it was submitted that if the letter was not produced, unfairness to the wife would result.

15. Senior counsel for the husband submitted that the court had to determine whether or not the husband had received the letter on the basis that if he knew nothing of it, there could be no fraud.

16. In reply, counsel for the wife did not argue that a finding such as advocated by the husband should not be made or that any reasoning for any order should be delayed.

17. The ruling was given the next morning after which, the trial continued to its conclusion and that included the completion of the cross-examination of the husband.

18. In my reasons I said:

    [10]In cross-examination, rather than it being raised in her evidence-in-chief, the wife was asked about the contentious letter.  .  The context of that cross-examination too, has some bearing on whose version I should accept.  The wife agreed she had a safety deposit box and that she had been ordered by the District Court of South Australia to open it as part of the civil case in that court. In it, there were all sorts of things, such as rings, bracelets, gold coins and a pendant with a diamond. She confirmed that none of those had been included as her assets before this Court.  When asked why, she said did not know that she had to, because she thought it would be divided.  In the context of a person who had legal advice, that seems a rather strange response.

19. It is important to note the first sentence of paragraph [11] in which I said:

    [11]Whether all of that is relevant remains to be seen as the trial is not finished.  It was senior counsel for the husband who asked the wife about the letter in the box.  She agreed it was there.  She confirmed the letter was addressed to the husband.  She confirmed the box was still with the District Court.  When asked how she obtained the letter, she said that she found it on the husband’s desk.  When the husband moved out of the home, she said it was on his desk.  It is not entirely clear what she means.

20. Of the husband’s position, I said:

    [14]The husband’s position is that he did not know of the letter until the examination in the District Court. The husband’s version was that he had no discussion with the wife about the letter.  In fact, that makes sense if he had not seen it.  There is no evidence that he sought the advice that is said to be in the letter.  His version and that of the wife are in conflict on how the wife came to have the letter.

21. It may have been that no privilege existed if the letter had not been a communication to him or sought by him but that issue was not argued. 

22. Having regard to the current application and the way it was put, it is unnecessary for me to deal with any issue of waiver.

23. Having addressed the factual issues upon which the parties sought a ruling, I said:

    [58]Of the husband’s knowledge, the onus of proof lies with the wife and she has to show a prima facie case of fraud. Whilst the test has a very low bar, that is of no relevance unless the husband was privy to the advice.  In respect of looking at the document, I am conscious that that I have the sworn evidence of the husband and that of the wife but objectively, I prefer the husband’s version for the reasons that follow.

24. I rhetorically asked:

    [60]Is it more probable in this case that there was no conversation between the husband and wife, as asserted by the wife?  Is it more probable than not that the wife simply took the letter, as asserted by the husband?  There is no evidence as to where the letter was kept until it entered the safety deposit box.  On my assessment of the evidence at this preliminary stage, it would seem that it was in the wife’s possession for some time.

    [61]I find the evidence of the wife does not give me a lot of assistance.  The wife relies only on the fact that she saw her name.  I do not consider that I can conclude from that that the letter refers to anything in relation to the husband’s conduct, vis-à-vis the wife.  Why would it, where the evidence of the wife is that there was no problem with the husband at that particular time?  There is no evidence that the husband sought the advice said to have been given in the letter.  If the letter was so controversial, why did the wife hide it in the safety deposit box when she knew nothing of its contents because of her English language skills?  If the letter was scooped up with all of the other papers when the move between houses occurred, why was only that letter put in the box?  All of that evidence tends to suggest that there was some surreptitious act on her part, because she saw it was important.  Why it was important remains a mystery.

25. At [63], I said:

    [63]There is the evidence of the husband that he knew nothing of the letter until the District Court proceedings.  That evidence is sworn.  I do not know whether credit affects this determination, because I have not concluded the case, nor have I heard final submissions but of the two versions about the letter, the husband’s version seems to be the more probable.  As such, I could not find that he was aware of the existence of the letter and, accordingly, could not find that he waived the privilege in the way in which it is asserted that he has by counsel for the wife.  (My emphasis)

26. I turn then to the immediate application for recusal. At the outset, counsel for the wife maintained the only issue was apprehended bias.  In substance, it was submitted that the finding in favour of protecting the husband’s claim of privilege meant that the court had found that the wife was the type of person who would interfere with mail by opening it.  It was submitted that such a finding, and the implication from it, was that the court had accepted that the wife had not only opened the husband’s mail but that she was a person who would do illegal things. 

27. Counsel for the wife submitted that his client was entitled to conclude that by rejecting her version of events relating to her discussion with the husband over the letter, I would not have an impartial mind in respect of her claim for a property settlement. A major issue in the substantive proceedings is whether there is any property of substance in the hands of the husband and the wife to be divided. It is the wife’s case that the husband divested himself of a large number (if not all) of the assets in his name in 2010 and she now seeks the setting aside of transactions between the husband and his family members in, and after, 2010.

28. Of the bias application, the solicitor for the husband only submitted that the court had been asked to determine a fact and had done so but that did not mean that all issues would have been found against the wife.

29. In his submission, counsel for the wife relied upon a number of authorities and it is to those that I now turn.

30. It is not controversial that the test to be applied in Australia in determining whether a judge is disqualified by reason of the appearance of bias is whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide (see Johnson v Johnson (2000) 201 CLR 488).

31. In R v Watson; exparte Armstrong [1976] HCA 39; (1976) 136 CLR 248 the plurality heard an application for a prohibition against Watson J. Watson J had embarked upon a property hearing and indicated that he would not accept the evidence of either party unless it was corroborated.

32. The application was brought by the wife and an order nisi had been granted the grounds of which were that Watson J was biased against the wife and that he had prejudged her credit to her disadvantage.  Their Honours referred to this as being an allegation of pre-determination and noted that this was a claim of actual bias.  Their Honours view that it was unnecessary to show that the judge was biased.

33. The plurality said at [21]:

    A party who believes, on reasonable grounds, that the judge has decided, in advance, to disbelieve her evidence cannot have confidence in the result of the proceedings, even if the judge has decided to reject the evidence of her adversary as well.

34. The court held that Watson J had prejudged “an important question in the case” and that therefore, the wife might reasonably have no confidence in the result if the matter proceeded further.

35. As can be seen from the excerpts from the judgment that I delivered extempore above, I did not reject the wife’s evidence but rather found that on that discrete issue on the balance of probabilities, I should accept the husband’s version.  As can be seen, I noted that there were other matters still to proceed and submissions to be heard.  I made specific reference to credit.

36. Counsel for the wife also referred to Vakauta v Kelly [1989] HCA 44; (1989) 167 CLR 568. This was a personal injuries case in which the trial judge made remarks to disclose a view that evidence given by three doctors was “usually slanted in favour of” the insurer. Dawson J at [9] remarked that such a statement of itself did not indicate that the trial judge would not accept the evidence of those doctors. His Honour pointed to the fact that to show a closed mind on the question of the credibility of those witnesses, would give rise to a reasonable apprehension of bias because it was indicative of a closed mind. His Honour held that the remarks carried no necessary implication of that kind.

37. Dawson J went on to say:

    [9]Indeed, to recognise a preconception and alert the parties to it is likely to assist rather than hinder an impartial approach.  It is plain that, notwithstanding the views that a judge may have formed in other cases, he may nevertheless be able to assess the evidence in the case before him fairly and to recognise when and where it does not confirm his previous experience.

38. Vakauta v Kelly is distinguishable on its facts but it is important to note that the focus of an application must be on the question of a closed mind in respect of the substantive issue and no doubt, there will be cases where adverse findings as to credit will indeed give rise to an apprehension of a closed mind.  That was not the case before me. 

39. In the more recent decision of British American Tobacco Australia Services Limited v Lawrie and Ors [2011] HCA 2; (2011) 242 CLR 283 (“BATAS v Lawrie”), the majority (Hayden, Kiefel and Bell JJ) upheld a claim for prohibition based upon a trial judge’s previous finding which had been expressed without qualification or doubt.  There was no dispute about the principle of the reasonable observer.  However, some of the observations of the members of the court are worth contemplating.  The majority at [140] said:

    Trial judges are frequently required to make ruling excluding irrelevant and prejudicial material from evidence.  Routine rulings of this nature are unlikely to disqualify the judge from further hearing the proceeding.

    Their Honours went on to observe that the case under consideration was not of that kind because it did not raise considerations of case management and the active role of the judge in the identification of issues (such as had been contemplated in Johnson).  Their Honours continued:

    At issue is not the incautious remark or expression of attentative opinion but the impression reasonably conveyed to the fair-minded lay observer who knows that (the judge) has found that BATAS engaged in fraud and who has read his Honour’s reasons for that finding. 

40. French CJ and Gummow J dissented but the Chief Justice observed at [39]:

    A gratuitous observation, adverse to a party, made in the course of proceedings or in extra-curial speech is one thing.  A finding properly made by a judge in the course of an interlocutory ruling or in earlier proceedings is another.  The latter is the area of concern in this appeal.  It is an area in which courts should be astute not to defer to that kind of apprehension that is engendered by the anticipation of an adverse outcome, rather than a legitimate concern about partiality.  By way of example, the fact that a judge who has made a finding of fact adverse to a party on particular evidence is likely to make the same finding on the same evidence, is not of itself indicative of bias.

41. Albeit a dissenting judgment, the relevant point is that the issue is partiality rather than a concern about the ultimate outcome.  I made a finding on the discrete basis of which of the two was the more probable version.  I reject the suggestion that an implication would be drawn by a reasonable and well-informed observer that I would reject the wife’s case in respect of other matters.  This was a discrete issue and counsel for the wife knew the husband’s position was in conflict with the wife and pressed for a ruling which had to focus on the question of whether the husband knew of the letter’s existence at the time the wife took it into her possession.

42. The majority in BATAS v Lawrie (supra) held that the finding of the relevant judge was substantially based upon an acceptance of one witness and that BATAS had drafted or adopted its document retention policy (which was what the witness had alleged) for the purposes of a fraud. That was a very significant finding of credit against BATAS and from which the reasonable observer could not have concluded anything other than there had been an element of dishonesty. As the majority observed at [17]:

    (The judge) did not state his findings were made merely because there were reasonable grounds for finding fraud.  He found fraud (under the Evidence Act).

1. It is also important to observe that in Johnson v Johnson (supra) the High Court said:

   [13]Whilst the fictional observer, by reference to whom the test is formulated, is not to be assumed to have a detailed knowledge of the law, or of the character or ability of a particular judge, the reasonableness of any suggested apprehension of bias is to be considered in the context of ordinary judicial practice.

2. Here, a ruling was required.  That ruling had to be determined on the basis of which version was more probable.  I reject any suggestion that the fictional observer would consider that I determined the issue on the basis of rejecting the wife’s evidence generally or even specifically on the basis of credit.  The extempore reasons even if infelicitously expressed, indicate that the husband’s version was more plausible.

3. In Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 the plurality pointed out that the application of the apprehension of bias principle requires two steps. First, it requires the identification of what it is said might lead the judge to decide a case other than on its legal and factual merits. Secondly, there must be a logical connection shown between what is said and the feared deviation from the course of deciding the case on its merits.

4. The evidence of the wife was that she found the letter already opened on the husband’s desk and although it was put to her by senior counsel for the husband that she opened the mail, she was emphatic in denying that. In addition, nothing in re-examination was taken up about this letter.

5. Rather than it being an issue of whether the wife was lying about the letter, senior counsel for the husband had submitted that, on the plausibility of versions, if the husband was perpetrating a fraud on the wife, why would he leave a letter of that nature lying around if he knew about it. 

6. I accepted the husband’s version on the balance of probabilities bearing in mind the issue was whether there had been a waiver or loss of privilege.

7. In my view, a properly informed and reasonable observer aware of the discrete issue would understand that this was a ruling on which of two versions was the more probable and nothing more.  As said in Ebner (supra), there must be a logical connection between that and the feared deviation from the course of deciding the case on its merits.  The wife submits that the finding amounts to an implication that she is a person who would do illegal things such as open and take mail.  In my view, a reasonable observer would understand that a professional judge who is constantly required to assess evidence would decide a factual dispute between two versions based on which was more probable and that would be done without finding that the wife was untruthful or that her whole case was without foundation. That reasonable observer would also know that there was evidence from the wife that in March 2010, the parties were still living together and that nothing had been said by the wife to the husband about dissatisfaction with him or a desire, either imminently or in the future, to separate.  That same observer would know that even on the wife’s version, the letter would have been left lying around which would seem inconsistent with someone in the husband’s position being dishonest at that time and with no obvious problems in the marriage.

8. In saying that, I accept there is a submission by the wife that in her written material, she said her marriage was in trouble but there is also evidence to the contrary arising from her cross-examination.

9. Because of the stage of the trial at which this issue was raised, the observer would also be aware that there had been discussions between the parties’ lawyers in which it had been accepted at some stage early in the proceedings that the wife acknowledged that the letter was covered by privilege.

10. In my view, the connection is missing to show that even if I made a finding and ruled against the wife in respect of the version of evidence she gave about the letter, it amounted to a rejection of other evidence upon which she relied or that I would find against her generally wherever there was a disputed issue of fact. I made the latter clear in the ex tempore reasons given at the time and that there was still further evidence and submissions to be heard.

11. I reject the wife’s assertion of bias and her application is therefore dismissed.

I certify that the preceding Fifty Three (53) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 18 October 2017.

Associate: 

Date:  18 October 2017