Ebner v Official Trustee in Bankruptcy

The High Court of Australia heard appeals in *Ebner v Official Trustee in Bankruptcy* and *Clenae Pty Ltd v ANZ Banking Group Ltd*. The central dispute in both cases concerned whether a judge is automatically disqualified from hearing a matter due to a shareholding in a listed public company that is a party to the proceedings or has a direct financial interest in their outcome. In *Ebner*, the judge disclosed his shareholding, while in *Clenae*, the judge inherited shares after reserving judgment and did not disclose this fact.

The legal issues before the Court were whether a judge's shareholding in a corporation, however small, automatically disqualifies them from hearing a case involving that corporation, and the principles governing the apprehension of bias. The Court also considered the implications of Chapter III of the Australian Constitution regarding the impartiality of the judiciary and the circumstances under which the principle of necessity might operate to permit a judge to continue hearing a case despite a potential conflict.

The Court reasoned that the fundamental principle is that courts must act impartially and be seen to act impartially, a requirement derived from both common law and Chapter III of the Constitution. However, it was held that a judge is not automatically disqualified by a shareholding in a listed public company. Instead, the test is whether a fair-minded lay observer, knowing the relevant facts, would apprehend that the judge might not bring an impartial mind to the issue. The Court affirmed that judges do not choose their cases and are not at liberty to decline jurisdiction without substantial grounds, as this could allow parties to improperly influence the composition of the bench. The principle of necessity was also discussed, particularly in the context of *Clenae*, where it was considered whether the circumstances justified the judge continuing to hear the case despite the inheritance of shares.

Both appeals were dismissed with costs. The Court concluded that the apprehension of bias test, rather than automatic disqualification, was the appropriate standard. In *Ebner*, it was conceded that no reasonable apprehension of bias could be established. In *Clenae*, while the judge did not disclose his inheritance, the Court found that the circumstances, including the length of the trial and the death of a key witness, supported the application of the principle of necessity, allowing the judgment to stand.