DOQ17 v Australian Financial Security Authority (No 2)

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FEDERAL COURT OF AUSTRALIA

DOQ17 v Australian Financial Security Authority (No 2) [2018] FCA 1270

File number: NSD 1319 of 2017
Judge: PERRY J
Date of judgment:

23 August 2018
Catchwords:  PRACTICE AND PROCEDURE – recusal application –apprehended bias and actual bias on the ground of pre-judgment alleged based on interlocutory decision refusing leave to amend pleadings and joinder of additional respondents – observations as to potential dangers in receiving sworn evidence in support of disqualification applications – observations as to judge’s duty to sit where no proper basis for recusal – discussion of relevant principles including attributes of fair-minded lay observer in applying test for apprehended bias - where part of the judge’s duty and function is to separate the relevant from the irrelevant, to disregard allegations without evidentiary foundation, and to ensure a fair trial for all parties - where no findings of fact or credit made in interlocutory decision – where no apprehended bias by reason of findings which put aside assertions without evidentiary foundation – where no final opinion expressed in the interlocutory decision on any ultimate fact or issue - where Court’s duties to unrepresented litigants do not extend to obtaining legal representation - application dismissed
Legislation: Legal Profession Act 2004 (NSW)
Cases cited:

Australian National Industries Ltd (In Liq) v Spedley Securities Ltd (In Liq) (1992) 26 NSWLR 411

Bainton v Rajski [1992] 29 NSWLR 539

Barton v Walker [1979] 2 NSWLR 740

Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337

Hamod v New South Wales [2011] NSWCA 375

Hamod v New South Wales (No. 11) [2008] NSWSC 967

House v The King (1936) 55 CLR 499

Isbester v Knox City Council [2015] HCA 20; (2015) 255 CLR 135

Johnson v Johnson [2000] HCA 48; (2000) 201 CLR 488

Kwan v Kang [2003] NSWCA 336

Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 at 100-101

Michael Wilson & Partners v Nicholls [2011] HCA 48; (2011) 244 CLR 427

Minister for Immigration and Multicultural Affairs v Ex parte Jia [2001] HCA 17; (2001) 205 CLR 507

MTI v SUL (No. 2) [2012] WASCA 87

Reid v Commercial Club (Albury) Ltd [2014] NSWCA 98

Re JRL; ex parte CJL (1986) 161 CLR 342

R v Masters (1992) 26 NSWLR 450

Southern Equities Corp Ltd (In Liq) v Bond [2000] SASC 450; (2000) 78 SASR 339

Spalla v St George Wholesale Finance Pty Ltd [2006] FCA 416

SZRUR v Minister for Immigration and Border Protection [2013] FCAFC 146; (2013) 216 FCR 445

Vakauta v Kelly (1988) 13 NSWLR 502

Vidyasagara v The Queen [1963] AC 589

Date of hearing: 19 June 2018
Registry: New South Wales
Division: General Division
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Category: Catchwords
Number of paragraphs: 34
Counsel for the Applicant: The Applicant appeared in person
Counsel for the First, Second, Third and Seventh Respondents: Ms C Amato
Solicitor for the First, Second, Third and…
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Details
Case
[2018] FCA 1270
Decision Date

CaseChat Overview and Summary

In the case of DOQ17 v Australian Financial Security Authority (No 2), the applicant sought the recusal of the judge due to alleged bias stemming from an interlocutory decision. The primary issue before the court was whether the interlocutory ruling by the judge created a reasonable apprehension of bias. The applicant argued that the judge's refusal to allow an amendment to the pleadings and the addition of new respondents indicated a prejudgment that prejudiced the case against her.

The court meticulously examined the criteria for determining actual bias and the reasonable apprehension of bias. It noted that a finding of actual bias requires distinct allegations and clear proof, while an apprehension of bias hinges on whether a fair-minded lay observer would think the judge might not bring an open mind to the trial. The court found that the interlocutory ruling did not contain any credibility findings that suggested the judge had a fixed view on the case's ultimate issues. Instead, the ruling was based on legal and technical deficiencies in the proposed amendments.

Concluding that there was no logical connection between the interlocutory decision and any apprehension of bias, the court dismissed the application for disqualification. The court emphasized that interlocutory rulings alone do not typically create a reasonable apprehension of bias unless they imply a fixed view on the case's merits. The court also highlighted the importance of disregarding unfounded allegations and irrelevant submissions, which the applicant had made extensively. The final order was that the disqualification application was dismissed, and the applicant was directed to pay the respondents' costs.

Orders

Orders of the court

1. The disqualification application is dismissed.

2. The applicant is to pay the respondents’ costs of and incidental to the application as agreed or assessed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

The Court in Reid conveniently summarised the relevant principles as follows:68. A finding of actual bias is a grave matter... Authority requires that an allegation of actual bias must be distinctly made and clearly proved; that such a finding should not be made lightly; and that cogent evidence is required…69. Where the issue is actual bias in the form of prejudgment, the appellant had to establish that the primary judge was "so committed to a conclusion already formed as to be incapable of alteration, whatever evidence or arguments may be presented": Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17; 205 CLR 507 at [72] per Gleeson CJ and Gummow J (Hayne J agreeing at [176]). ….70. As Gleeson CJ and Gummow J observed in that case at [71]:"The question is not whether a decision-maker's mind is blank; it is whether it is open to persuasion."(emphasis added) There are several elements to such a claim of actual bias identified by Hayne J in Jia at [185], namely, the contentions that:(1)the decision maker has an opinion on a relevant aspect of the matter in issue in the particular case;(2)the decision maker will apply that opinion to that matter in issue; and (3)the decision maker will do so without giving the matter fresh consideration in the light of whatever may be the facts and arguments relevant to the particular case. After referring to these elements, the Court in Reid continued: 72. His Honour observed at [186] that allegations of actual bias through prejudgment often fail at the third step he had identified. This was because notwithstanding whatever expression of preconceived opinions by the decision-maker, it does not follow that the evidence will be disregarded. 2.3 Bias and apprehended bias based upon interlocutory rulings Finally, as the fourth respondent submits, generally speaking interlocutory rulings ought not to be regarded as giving rise to a reasonable apprehension of bias or actual bias because they necessarily precede the final resolution of the proceedings and therefore do not finally determine any of the issues: see Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 at 100-101 (by analogy) (Gaudron and McHugh JJ). As for example, the New South Wales Court of Appeal held in R v Masters (1992) 26 NSWLR 450 at 471, after referring to Re JRL: The effect of those unanimous pronouncements was clear. The fact that a judge has decided an issue in a particular way, and is likely to decide in the same way when it arises again, does not amount to prejudgement which may require [her or] him to disqualify [herself or] himself in order to avoid an apprehension of bias. The reasonable apprehension which should lead to disqualification must be that the judge will not decide the case impartially or without prejudice, not simply that he or she will decide the case adversely to one party. However an interlocutory ruling may give rise to a reasonable apprehension of bias if, for example, credibility findings are made which may imply the possibility of a fixed view in the case: see e.g. Southern Equities Corp Ltd (In Liq) v Bond [2000] SASC 450; (2000) 78 SASR 339 at [58]-[63] (Olsson J) and [150] (Bleby J); Kwan v Kang [2003] NSWCA 336 at [95]-[101] (Sheller, Ipp and Tobias JJA).3. CONSIDERATION OF THE APPLICATION FOR DISQUALIFICATION

Decision

Reasons for decision

Ultimately, therefore, the applicant’s application for disqualification is reflective of her strong disagreement with the decision in DOQ17 (No 1) to refuse her leave to amend the pleadings and to join additional respondents. However, as the fourth respondent points out, “there will be a winner and a loser where opposing sides contend for different outcomes”: so much is inherent in litigation. The mere fact that a decision was reached which was unfavourable to the applicant is insufficient to give rise to a finding of apprehended bias. As for example, Kenny J held in Spalla v St George Wholesale Finance Pty Ltd [2006] FCA 416 with respect to an interlocutory ruling:14. … the mere fact the litigant does not gain rulings in his or her favour in the course of the trial does not reasonably create an apprehensive of bias on the part of the fair-minded lay observer. As I have said, when such rulings are made, they will almost inevitably suit the immediate interests of one party rather than another. It may be that the less favoured party is discouraged by the turn of events, though these events may have no ultimate bearing on the outcome of the case. Whatever the ultimate and as yet unknown effect of a ruling or rulings on the ultimate outcome, an adverse ruling of this kind does not indicate that the judge has reached any view on the ultimate merits.See also e.g. Hamod v New South Wales (No. 11) [2008] NSWSC 967 at [20] (Harrison J) (approved on appeal in Hamod at [269]); MTI v SUL (No. 2) [2012] WASCA 87 at [14] (the Court). 4. CONCLUSION For these reasons the application seeking my recusal from continuing to hear and determine the matter is dismissed with costs.

Ratio Decidendi

Legal Principle Established

However an interlocutory ruling may give rise to a reasonable apprehension of bias if, for example, credibility findings are made which may imply the possibility of a fixed view in the case: see e.g. Southern Equities Corp Ltd (In Liq) v Bond [2000] SASC 450; (2000) 78 SASR 339 at [58]-[63] (Olsson J) and [150] (Bleby J); Kwan v Kang [2003] NSWCA 336 at [95]-[101] (Sheller, Ipp and Tobias JJA).3. CONSIDERATION OF THE APPLICATION FOR DISQUALIFICATION In relation to the claim of apprehended bias and applying the approach required by Ebner, I have identified the matters said to lead to the conclusion that I might decide the matter other than on its legal and factual merits. However, I have found that there is no logical connection between those matters and the claimed apprehension of bias, whether those matters are considered individually or cumulatively. First, in her disqualification application and submissions in reply the applicant placed particular weight upon the following paragraph in the interlocutory judgment in DOQ17 (No. 1): 35. By way of preliminary matters, I note first that I have disregarded the many allegations by the applicant in her written submissions that the legal representatives for the respondents have misled the Court in various ways, as well as the applicant’s many disparaging comments about the respondents’ legal representatives. The fact that a litigant is unrepresented does not justify the making of scandalous and unfounded allegations of misconduct or disparaging comments against the legal representatives for other parties. The Court expects all litigants to act with courtesy and respect. Many of the applicant’s submissions were also irrelevant, and made allegations amongst other things about third parties: see e.g. the allegations in the applicant’s written submissions at [46]. These have also been disregarded. The applicant alleges that I found her to be “a liar”, apparently relying in particular on the preliminary matters dealt with in DOQ17 (No. 1) at [35]. No such finding however is made in DOQ17; nor is the applicant’s credit considered in that interlocutory decision. The proposed new causes of action which the applicant wished to plead in her proposed amended FASC failed by reason of legal or technical defects, as opposed to findings of fact or credit. For example, leave to amend to insert proposed pleadings alleging defamation was refused because they failed to identify any alleged defamatory imputations and were in any event statute barred (DOQ17 (No. 1) at [45] and [46]). Similarly, leave to amend to plead that the respondents and proposed respondents had acted in breach of a duty of care or other duties as practising solicitors was refused because there was no allegation, and none could be made, that any of the respondents or proposed respondents were retained to act for the applicant (DOQ17 (No. 1) at [48]). As a further example, leave to amend to plead a cause of action allegedly based upon s 723 of the Legal Profession Act 2004 (NSW) was refused on the ground that that section creates a criminal offence and not a statutory cause of action, among other difficulties which that proposed pleading confronted as a matter of law (DOQ17 (No. 1) at [53]-[57]).