ELDRED & ELDRED
[2014] FamCA 890
•23 May 2014
FAMILY COURT OF AUSTRALIA
| ELDRED & ELDRED | [2014] FamCA 890 |
FAMILY LAW – COURTS AND JUDGES – Oral application for recusal – application dismissed.
| APPLICANT: | Ms Eldred |
| RESPONDENT: | Mr Eldred |
| INTERVENER: |
| INDEPENDENT CHILDREN’S LAWYER: |
| FILE NUMBER: | MLC | 10616 | of | 2012 |
| DATE DELIVERED: | 23 May 2014 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Bennett J |
| HEARING DATE: | 23 May 2014 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr St John QC |
| SOLICITOR FOR THE APPLICANT: | Tolhurst Druce & Emmerson |
| COUNSEL FOR THE RESPONDENT: | Mr A Robinson |
| SOLICITOR FOR THE RESPONDENT: | Clancy & Triado |
Orders
1.I dismiss the husband’s application that I recuse myself from further hearing these proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Eldred & Eldred has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT |
FILE NUMBER:
| Ms Eldred |
Applicant
And
| Mr Eldred |
Respondent
REASONS FOR JUDGMENT
ex tempore
Introduction
At the commencement of the third day of the final hearing of proceedings between the respondent husband and the applicant wife for parenting orders, final alteration of property interests, spousal maintenance and child support, the husband makes an oral application that I recuse myself from further hearing these proceedings by virtue of a reasonable apprehension of bias.
The contention by counsel for the husband is that on the second day of the hearing[1], during his cross-examination of the single expert witness valuer, Mr GG, there was a discussion between us in which I raised various matters (detailed below) which, he contends, injected into the wife’s case arguments or matters hitherto not relied upon by her or expressed or identified as issues on her behalf and otherwise not available to the wife on the evidence upon which she relies.
[1] Tuesday, 21 May 2014.
It is further contended that my conduct could, in the context of this case, be reasonably apprehended to be assisting the wife’s case to the extent that a fair minded lay observer might reasonably apprehend that I would not bring an impartial and unprejudiced mind to the determination of the case.
I took some time to retrieve the relevant audio recording of the proceedings and then decided to adjourn the proceedings to today. These reasons are necessarily composed without access to official transcript.
background
I will set out some history about the parties and the proceedings to provide some context to the matters which counsel for the husband contends give rise to a reasonable apprehension of bias.
Each party relies upon and has filed a case outline document(s) in relation to all issues before the court, namely, parenting arrangements, final alteration of property interests, spousal maintenance and child support. The details referred to below are from the parties’ case outlines and/or their affidavit evidence. The below statements are not findings of fact by me nor the conclusions to which I will come after having had the benefit of evidence which is tested and submissions. I have drawn the facts largely from the parties’ outlines of case and for the stated purpose of giving some context to the application.
The husband is 46 years old and employed in a sales role by a large city business, N Pty Ltd. The wife is 39 years old and works in the finance industry operating her own businesses P Pty Ltd as a sole proprietor and another business, Q Pty Ltd, with two other persons.
The wife asserts that she is in good general health but has suffered serious and debilitating back and leg pain since approximately 2010. There is medical evidence by the wife’s treating specialist to the effect that her condition has slowly improved with rehabilitation but that she remains significantly disabled, her prognosis is guarded and she is unlikely ever to be pain free. The specialist concludes that the wife has decreased tolerance for standing, driving and sitting and the most likely extent of her future ability to work is eight to twelve hours per week of administrative duties. The husband has not adduced any competing medical evidence and does not seek to cross-examine the wife’s specialist.
The parties married in 2001. There is a dispute about direct financial contribution at the commencement of cohabitation. It is not disputed that the wife operated the finance businesses when the parties commenced cohabitation. The income of the businesses was and continues to be by way of upfront commission paid on the gaining of new business and by other commissions paid during the currency of the gained business.
Both parties were successful in their respective careers. In 2007 the husband became a senior executive at N Pty Ltd deriving an income in excess of $250,000 per annum by a combination of salary and commission on sales. The wife’s businesses were successful and she generated income and benefits reasonably comparable with the husband’s income. The parties purchased and sold various real properties in which they lived.
The parties’ first child, B, was born in March 2006. In contemplation of the birth, the wife hired Mr X to work in her businesses as a full time manager gaining business and the wife commenced to work minimal hours on a part time basis from home. The wife has also employed other persons although it appears to me that these may have been administrators or assistants. Mr X worked for the wife from approximately 2006 to 2011. The parties’ youngest child, C, was born in October 2008.
In 2009 the husband retired from his position at N Pty Ltd. There is a dispute about the extent to which the husband made any contribution to the wife’s businesses before or after his retirement and his contributions generally.
The wife underwent back surgery in October 2010 and September 2011.
In June 2011 Mr X gave the wife three months’ notice of his resignation and he left her employ in September 2011 at which time the wife’s case is that she “[discovered] the full time [business] manager of [P Pty Ltd], [Mr X] has tainted clients and is setting up a … business in competition.” In September 2011, the wife initiated proceedings against Mr X et al in the Supreme Court of Victoria. Those proceedings were settled on 8 February 2012 with Mr X and associated entities agreeing to a 12 month restraint of trade in relation to approaching the wife’s clients and payment of costs.
In February 2012 B started Preparatory Grade and C commenced kindergarten. The husband attended upon a psychiatrist and was prescribed Ritalin, the wife says for treatment of symptoms consistent with ADHD. On 19 February 2012 the husband went back to work at N Pty Ltd in a sales role earning, according to the wife, $20,000 per month as a retainer and commission on sales. Later in February 2012 the parties separated with the husband absenting himself from the former matrimonial home and they then reconciled in late March 2012. During the brief reconciliation the wife entered into a three year lease of business premises close to the family home at a rental of approximately $42,000 per annum. The parties put the former matrimonial home on the market for sale and sold it for $3,025,000 on 12 May 2012. The husband and wife separated finally on 28 May 2012. Settlement of the sale of the former matrimonial home was effected in September 2012 and the net proceeds of sale, some $900,000, is invested on behalf of the parties.
In about October 2012 the husband changes employment to N Pty Ltd Marketing for a fixed annual salary $175,000 (no commission). The wife alleges, and the husband denies, that he has equity or a proprietorial entitlement in N Pty Ltd Marketing. It is an issue for the trial.
Whereas the husband deposes to an income of approximately $175,000 per annum plus superannuation derived solely as a salary (no commission on sales), the wife contends that the husband “is a highly experienced [salesperson], with experience in [sales] development. He is also a licenced [tradesman]. He has the capacity to earn at a substantially greater level than his presently disclosed income”. In the context of s 75(2) the husband contends in his case outline document that “[the husband] has a higher earning capacity than the Wife, although both parties have a high earning capacity and the Husband maintains that the Wife can support herself”.
Post separation the parties established themselves in rental accommodation. The wife has primary care of the children, the husband seeks equal shared care and has 4 or 5 out of 14 nights with the boys. In November 2012 the wife made application for child support and also initiated these proceedings in the Federal Circuit Court in Melbourne (“FCC”).
On 8 February 2013, the matter was not reached on its first return date in the FCC and the restraint of trade period for Mr X and others expired. Interim orders were made in the FCC in late February 2013. The parties prepared for the final hearing in the FCC which was set down for 21 August 2013 but the matter was not reached and was transferred to this court because of a revised estimate of hearing time. The wife sought and obtained a priority hearing here.
The proceedings came before me on 28 October 2013 and orders were made for a single expert witness to value the wife’s businesses, and for a family report. Each party had previously obtained a valuation of the wife’s business. By this stage the parties had each received a payment of $20,000 and $150,000 from the invested proceedings of sale of the home and the remaining funds approximated $500,000. The other property of significance was the wife’s business to which the husband’s valuer ascribed a value of $725,000 and the wife’s valuer ascribed a value of $167,000. The husband had traded in his Porsche Model 1 motor vehicle to acquire a Porsche Model 2 thereby assuming a liability for car lease repayments. The wife had sold her Porsche Model 3 motor vehicle, borrowed a car for three or so months and then acquired a BMW vehicle for which the loan repayments are $1,300 per month as opposed to the $3,200 per month due on the car driven by the wife during the marriage.
The wife and children moved rental houses a number of times. The wife filed and served lengthy affidavits and all but one is replete with complaints that she has no funds, that she has not been able to generate sufficient business income to support herself, that she has incurred expenses that she cannot meet and that the husband pays insufficient child support.
On 5 March 2014 the single expert witness, Mr GG, reported on the value of the wife’s business at $277,000. A final hearing was fixed before me on 24 March 2014 but did not proceed because I was unavailable to sit for that month. The wife’s practitioners pressed for the earliest possible hearing date based on her alleged adverse financial situation and lack of funds. Finally, this hearing was allocated to commence before me on 20 May 2014.
On the day prior to the hearing, the husband made urgent application for the single expert witness valuer to confer with his shadow accountant/valuer. The application was initially opposed by the wife but granted by me on the basis that her shadow accountant/valuer could also participate. At the commencement of the hearing, the parties had not agreed on any values other than the quantum of funds that each had received from the sale proceeds of the home and, even then, the characterisation of those funds remained in dispute.
By the end of the first day, by discussion between counsel and the Court, the parties had clarified the dispute about the value of the cars retained by them at separation, defined the amounts in respect of which adjustment could be made for certain monies received since separation and agreed on the amount of post separation credit card and loan debt carried by the husband in the sum $28,143 and by the wife at $95,415. By the morning of the second day the parties had agreed on nearly all relevant figures although there remained a dispute about household furniture. The parties had agreed on some children’s orders, although no major issues. The parties had mutually agreed to abandon formal objections to affidavits. The parties had considered a memorandum prepared by me of issues in relation to property. I now direct that that document should be marked “Exhibit C2” and remain on the Court file. Counsel for the husband informed me on the second day that he considered that the characterisation of the $50,000 received by the husband was an issue which should be included. That was the only amendment.
I was informed that the conference between the single expert witness, Mr GG, and each party’s accountant had resolved the value of the wife’s business in the sum of $240,000. The reduction in value, below the earlier value calculated by Mr GG, was said to be in consequence of Mr GG being given access to a combination of external accountant’s figures and internal figures for the wife’s businesses for the 12 months up to March 2014. I was informed that the methodology of the valuation, which had hitherto been in dispute, was also agreed. Hitherto the husband’s accountant had opined that the correct approach was future maintainable earnings and application of a multiplier of five. There was no affidavit from Mr GG. His report dated 5 March 2014 had been tendered by consent but it was superseded by the agreement reached with the parties’ accountants. It was agreed that Mr GG would commence his evidence, by cross-examination, when we resumed after the lunch adjournment at 1.45 p.m. He did so.
I indicated to counsel that I would be assisted by some evidence of the wife’s actual income or benefits from the business having regard to her application to change all child support assessments issued since separation. I asked Mr GG some questions as did counsel for each party. He gave some general observations and discussed general principles in relation to assessing what benefits proprietors can get from a business other than by declared salary or income.
Consistently with his report, Mr GG’s evidence was that the wife’s businesses had been consistently profitable until the 2012/13 financial year but there was a very significant reduction in up front commissions consequent on very little new business being gained and a reduction in other commissions too. There was no issue about the restraint of trade against Mr X having expired in February 2012. The wife’s affidavit evidence was that her subsequent arrangement with one of the co-proprietors of Q Pty Ltd (Mr A) to give him 65 per cent of the commission on any new business generated but that this arrangement had not resulted in significant business or income for her.
Whilst being cross-examined by counsel for the husband, Mr Robinson, Mr GG readily agreed that the drop in income in the financial year ended 30 June 2013 was “simply a product of not [gaining] any new business” or words to that effect. He also agreed that the “short answer” for the fall in other commissions for the 2012/13 financial year was “because no new business was [gained]” or words to that effect.
impugned conduct
It appears that the discussion which counsel for the husband (Mr Robinson) identifies as giving rise to a reasonable apprehension of bias on my part and in favour of the wife commenced at approximately 3.20 p.m. and was as follows:-
MR ROBINSON: (addressing the single expert witness Mr [GG]) …If you were to hypothesise that there had been the ongoing [gaining] of upfront [business]…I’ll try again …ongoing [gaining] of [business] that generated up-front commission at the same level as previous years – it had not dropped from the 78, the earnings of the business would have been much higher, wouldn’t they?
MR [GG]: Hypothetically, Your Honour, yes..
HER HONOUR For what purpose would you hypothesise?
MR ROBINSON: Is Your Honour asking me what…
HER HONOUR: Yes, I am asking because Mr St John hasn’t objected but I don’t understand why I am sitting here listening to hypothetical evidence. Either the wife gets somebody else that she hopes doesn’t rip her off or she goes back into the business [inaudible…]and trains someone new to…at which [inaudible]….enter into a new business relationship at that time
MR ROBINSON: Well, certainly that is what I would be urging Your Honour to find that she could have entered into a new arrangment….
HER HONOUR: Or would you be saying, well she could get someone to do it now?
MR ROBINSON: Yeh…
HER HONOUR: Okay. Where would they work from? Where are her business premises?
MR ROBINSON: At her home?
HER HONOUR: Right. What is her home like Mr Robinson?
MR ROBINSON: I don’t know Your Honour.
HER HONOUR: Okay, well if you don’t know how can you say that they can work from there?
MR ROBINSON: Well, simply because she says she runs her office from her home and she has done so for a number of years.
HER HONOUR: Yes, but you are talking about having somebody else in your house doing it.
MR ROBINSON: I don’t know if someone else is in the house the whole time or travelling around doing it. I am not sure because we have not got to those questions yet.
HER HONOUR: If they are travelling around, what are they travelling around in? The car that doesn’t exist at the moment because she has got the car that is supported by the company?
MR ROBINSON: Until I am able to ask [the wife] the questions about how she operates her business, how it operated with Mr [X] and other employees I can only speculate about those things, Your Honour, but she did not have an office prior to renting [Y Property] and they maintained a very profitable business.
HER HONOUR: They had a house before, they had a very big house …before separation and her material is that sometimes in order to escape all of the people that were going in and out of her house participating in her business, her and her husband, and sometimes the children, used to go and stay in a hotel … right, it wasn’t always happy families the way that I read the material…..it didn’t coexist all that happily. That is, by the way, affidavit evidence that your client hasn’t responded to so I take it that if he took issue to the facts in it I would have seen something to that effect.
MR ROBINSON: My recollection is that the attendance at the hotels takes over about an 18 – 24 month period…
HER HONOUR: Mmm …Prior to separation …
MR ROBINSON: and coincides with her back operations …
HER HONOUR: No, she says that part of it was nothing to do with back operations but that it was trying to get some sanctuary from a house that was either full of a … production company or full of employees in relation to a business.
MR ROBINSON: My recollection is a period…..
HER HONOUR: Just bear in mind please that I will deal with practicalities and realities and not hypothetical situations.
MR ROBINSON: I take it that Your Honour is giving a clear indication that you don’t think it’s at all reasonable for the wife to have employed anyone?
HER HONOUR: I don’t know….but I don’t see how….
MR ROBINSON: I don’t at this point either Your Honour which is why I am asking the questions of this witness in relation to if she had what you could reasonably expect the earnings of the business to have been. That is the only reason why.
HER HONOUR: Well, is there some other law inventive or creative way you can approach adducing evidence. Is it for this witness to currently leave the witness box and to put the wife….see if Mr St John would allow the wife to be put into the witness box to give that evidence so that he can hear it, we can hear it, and then you can ask him?
MR ROBINSON: I didn’t think that it was necessary at this point because I didn’t think I need to put this witness the certainty or otherwise of her capacity to employ someone else. I was really putting to him the effect of having to continue …having [gained business], that is effectively all and I don’t think the wife can add to that. But Your Honour has simply raised with me the question of why I would ask hypotheticals and that is how we have engaged in this discussion.
HER HONOUR: Well, OK, so you [gain business], you get [other] commissions, you get upfront commission. Yes, anything else?
MR ROBINSON: In paragraph 71 you estimate future maintainable earnings at $136,000. Can I ask why that wasn’t simply the total of the three years divided by three?
MR [GG]: Yes, Your Honour, there is a clear downward trend in those three years from 160 down to 92,000. I’d formed the view from the evidence and from speaking to the wife that it was highly unlikely given the state that she was in and the use of Mr [A], who was an associate of the wife in the business, it was highly unlikely that the level of [business] that were going to be [gained] to correspond back to those early years was probably, was not probable and the existence of the decline in the [other commissions] income was evident from the information that I had so I used a weighted average that weighted the 2013 higher than the previous years Your Honour.
MR ROBINSON: And if the EBIT was at the same level this was the hypothetical we just…[inaudible]…it was thought that [business] would continue to be [gained] I presume there wouldn’t have been a weighted average applied it would have been a simple average?
MR [GG]: That would depend on the outcome of the hypothetical year less any hypothetical expenses incurred to increase the income.
MR ROBINSON: But if it had been at the same level it wouldn’t have been a weighted average is all I am saying.
MR [GG]: In valuation terms I would probably use an average, yes.
MR ROBINSON: So a straight average?
MR [GG]: A straight average.
Relevant legal Principles
Counsel for the husband referred me to the recent decision of Hillier & Wootton [2013] FamCAFC 11 in which the Full Court, comprising Finn, May and Strickland JJ considered an appeal from the decision of a Federal Magistrate (as he was then known) to dismiss an application by a party to proceedings that his Honour recuse himself for reasonable apprehension of bias.
In the reasons of May J, with whom Finn and Strickland JJ agreed in the result, her Honour referred to the following “well known excerpts” as “demonstrating the development of the legal principles applicable to a reasonable apprehension of bias:-
56. In Johnson v Johnson (2000) 201 CLR 488, their Honours Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ summarised the test to be applied in cases in Australian courts where apprehension of bias is claimed (at page 492):
11 … It has been established by a series of decisions of this Court that the test to be applied in Australia in determining whether a judge is disqualified by reason of the appearance of bias (which, in the present case, was said to take the form of prejudgment) 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 [eg, Re Lusink; Ex parte Shaw (1980) 55 ALJR 12; 32 ALR 47; Livesey v NSW Bar Association (1983) 151 CLR 288; Vakauta v Kelly (1989) 167 CLR 568; Webb v The Queen (1994) 181 CLR 41].
57. The specific two-step inquiry to be applied upon such claim being made was explained by Gleeson CJ, McHugh, Gummow and Hayne JJ in the subsequent case of Ebner v Official Trustee in Bankruptcy; Cleane Pty Ltd v ANZ Banking Group Ltd (2000) 205 CLR 337 (at page 345):
8 … First, it requires the identification of what it is said might lead a judge (or juror) to decide a case other than on its legal and factual merits. The second step is no less important. There must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits. …
58. The rationale for the description of the fair-minded lay observer and explanation for the test was explained by their Honours in Johnson (at pages 492-493):
12. …It is based upon the need for public confidence in the administration of justice. “If fair-minded people reasonably apprehend or suspect that the tribunal has prejudged the case, they cannot have confidence in the decision”. The hypothetical reasonable observer of the judge’s conduct is postulated in order to emphasise that the test is objective, is founded in the need for public confidence in the judiciary, and is not based purely upon the assessment by some judges of the capacity or performance of their colleagues. At the same time, two things need to be remembered: the observer is taken to be reasonable; and the person being observed is “a professional judge whose training, tradition and oath or affirmation require [the judge] to discard the irrelevant, the immaterial and the prejudicial” .
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. The rules and conventions governing such practice are not frozen in time. They develop to take account of the exigencies of modern litigation. At the trial level, modern judges, responding to a need for more active case management, intervene in the conduct of cases to an extent that may surprise a person who came to court expecting a judge to remain, until the moment of pronouncement of judgment, as inscrutable as the Sphinx. In Vakauta v Kelly Brennan, Deane and Gaudron JJ, referring both to trial and appellate proceedings, spoke of “the dialogue between Bench and Bar which is so helpful in the identification of real issues and real problems in a particular case”. Judges, at trial or appellate level, who, in exchanges with counsel, express tentative views which reflect a certain tendency of mind, are not on that account alone to be taken to indicate prejudgment. Judges are not expected to wait until the end of a case before they start thinking about the issues, or to sit mute while evidence is advanced and arguments are presented. On the contrary, they will often form tentative opinions on matters in issue, and counsel are usually assisted by hearing those opinions, and being given an opportunity to deal with them.
(footnotes omitted)
As is summarised by May J in Hillier’s case at [22], the “impugned conduct consisted of comments and inquiry, initiated by the Federal Magistrate on the second day of trial. As will be explained, the dialogue between the Federal Magistrate and counsel for the parties took place in a semi-closed court, and included an inquiry by his Honour whether “battered woman syndrome” formed a part of the wife’s case. In essence it is argued that by his conduct the Federal Magistrate could, in the context of this case, be reasonably apprehended to have sought to assist the wife’s case, such that a fair-minded lay observer might reasonably apprehend that his Honour might not bring an impartial and unprejudiced mind to the resolution of the case.”
Mr Robinson submitted that the circumstances of Hillier & Wootton are similar to the circumstances of this case.
Hillier’s case at first instance was an application by a wife for a declaration that there was no binding financial agreement between the parties because she had not received independent legal advice as required under s 90G of the Act or, alternatively, it should be set aside on the ground that it was void and/or voidable as a result of duress. Particulars of the duress were provided in a written outline of the wife’s contentions which included that the husband had engaged in a history of violent, threatening and intimidatory conduct directed to the wife from 2001 to 2007 (when the agreement was signed) and that the husband had assaulted and threatened the wife on numerous occasions in the months preceding her execution of the agreement which conduct had the effect of compelling or persuading the wife to enter into the agreement and that the husband intended or was aware that such behaviour would have that effect on the wife.
In Hilliers’ case, there had been lengthy discussion before the Federal Magistrate on the first day of the hearing as to how the wife’s case was put and what evidence was to be relied upon. After it was confirmed that the full extent of the wife’s case was before the court, at his Honour’s initiative, his Honour had “a quick word just to the lawyers by themselves” and, in the absence of anyone else, queried of counsel appearing whether “battered wife’s syndrome” was part of the landscape of the case.
No mention had been made of “battered wife’s syndrome” in the wife’s contentions and no reference was made to the syndrome in the expert evidence upon which the wife relied. May J described the thrust of the husband’s argument in Hilliers’ case as being “that his Honour’s comments and inquiries could reasonably be interpreted as assisting the wife’s case to the point of injecting a new issue into it, thus calling into doubt the Federal Magistrate’s impartiality in hearing and dealing with the trial.” It is the argument that the trial judge’s comments appeared to be “injecting a new issue” into the proceedings to the advantage of a party who had not constructed her case to include the issue, that Mr Robinson aligns his submission in this case.
May J makes the following observations:-
75. It was submitted for the husband that the cases referred to by the Federal Magistrate in his reasons for judgment speak in terms of clarification or narrowing of issues. Senior counsel sought to distinguish his Honour’s exchange from such clarification or narrowing of issues, which are open on the facts or evidence before a Court. His Honour’s exchange, it is submitted, was akin to suggesting to a party (the wife) that they ought expand the case, by adding a new issue or claim.
76. The submission that battered wife syndrome was not open on the evidence put before the Court by the wife is of some significance. To raise battered wife syndrome in this case would necessarily have involved compelling and further evidence from the wife and suitably qualified experts. Yet the evidence was closed subject to the wife and her witnesses being cross-examined.
77. The impression created by his Honour, it is said, is that he thought battered wife syndrome was something which fitted with the evidence, or that he would likely allow the wife, upon application, to change her case and call evidence in that regard. Consequently, it is submitted, his Honour’s ability to thereafter impartially deal with any application by the wife to adduce further evidence, or even in the absence of such evidence, to make submissions on the topic, was so compromised that the appearance of a fair trial had been lost. I accept the submission of senior counsel that subsequent assurances from the Bench, that the Federal Magistrate had not made up his mind about anything yet, are irrelevant in a matter where the allegation is an apprehension of bias.
Her Honour discussed at [83] the elements of the syndrome as it is raised in defence of a criminal charge and observes at [87] that, “Importantly, in this case the evidence about the wife’s psychological state and the effect she said the husband’s conduct had upon her bore no resemblance to such symptoms. As importantly, the expert psychologists for the wife had not identified such a syndrome as being suffered by her.”. Her Honour concluded that:-
97. Raising such a specific possible claim, not mentioned at all in the wife’s application, her outline of contentions or indeed the experts’ evidence in her case, in circumstances where lengthy discussions had been had in the lead up to and on the first day of trial about the parameters of the wife’s case, then this being finalised and the evidence effectively confirmed as “closed” was not, in my view, a reasonable inquiry or clarification.
98. The test identified in Ebner and in Johnson and confirmed in Michael Wilson is met, having regard to the context of the whole trial and the circumstances of the intervention (Galea). It is the Federal Magistrate’s raising of a specific claim, not raised by the wife, in the absence of the parties, at a time in the proceedings when the parameters of her case and evidence were accepted as closed, which might be reasonably apprehended as leading his Honour to decide the case other than on its legal and factual merits. There is a clearly articulated, logical connection between that specific claim and the circumstances in which it was raised, and the issues for determination before his Honour, such that I accept it might be reasonably apprehended that his Honour would not bring an impartial and unprejudiced mind to the resolution of the question his Honour was required to decide.”
May J was satisfied that the lengthy discussions which had occurred between Federal Magistrate and counsel on the first day of the hearing dealt conclusively with the parameters of the wife’s case and thereby prevented the Federal Magistrate’s comments as being characterised as “clarification, frank dialogue or inquiry”.
The reasons of the majority in Hillier’s case, being Finn and Strickland JJ, agreed with May J that the appeal ought to be allowed but on a different basis. Their Honour’s stated:-
16. In our view, this case is indeed borderline as to whether his Honour’s question was no more than a valid query made to assist him understand the wife’s case, or whether the reasonable and properly informed observer would understand the question as being one which was designed to assist the wife’s case thereby leading to a perception of partiality on his Honour’s part towards her case and an apprehension that the case would not be decided impartially.
…
19. Nevertheless, and leaving to one side the scope of the law relating to “battered wife syndrome”, we are concerned that use of the expression could itself carry an implication or impression of partiality towards a party to proceedings who has raised in support of his or her case, allegations of violence against the other party. Accordingly, and on balance, we agree with May J that his Honour should be disqualified from further hearing the proceedings between the husband and the wife on the basis of apprehended bias.
Discussion
In the present case, the discussion relied upon by counsel for the husband as evidence upon which a reasonable apprehension of bias can be drawn did not occur after a comprehensive statement of a party’s case in circumstances where my comments introduced a new issue much less a new issue which could not be advanced in the absence of supporting expert evidence. Our discussion arose during counsel’s cross-examination of the single expert witness whose evidence, as to the methodology of valuing the wife’s business and the value of that business, had been accepted by both parties. The comments related to the steps that would need to be covered before the responses to the hypothetical questions posed could be of probative value.
At this point in counsel’s cross-examination of Mr GG, Mr GG had twice stated that the reduction in commissions received by the wife’s business in the 2012/2013 financial year was because no new business was being gained. The single expert witness had agreed that the reduction in the earnings before interest and taxation (EBIT), as calculated by him, was reasonably equatable to the drop in up front commissions.
It is, in any event, self-evident that new business was the source of upfront commissions and in due course other commissions and that, if the incidence of new business in 2012/2013 could have been be kept at the level at which the wife’s business was performing before the 2011/12 financial year, the upfront commissions for 2012/13 would have been similar to the earlier years. It was in this context that I raised the utility of hypothetical evidence.
Counsel for the husband contends that my statements indicate, to the extent required to make out a reasonable apprehension of bias, that I would be favourably disposed to accept evidence from the wife which is consistent if that evidence was to be given by her as an excuse for not having employed a replacement full time manager to the businesses following the resignation of Mr X. Furthermore, it is submitted that those excuses or justifications are not relied upon by the wife anywhere in her evidence or in her outline of case or available to her on her evidence. I am unable to accept that submission.
All of the matters to which I referred, in the context of the utility of obtaining hypothetical evidence from the single expert witness, are matters which appear in the wife’s affidavits. The fact that the evidence is not specifically marshalled as a response to an allegation by the husband that the wife could have maintained the same volume of new business after Mr X’s departure as she had before, either by working longer hours herself or by employing a new full time business manager, is because that allegation did not appear in any of the affidavits or contentions (outline of argument) relied upon by the husband to which the wife had an opportunity to respond.
These were proceedings transferred from the FCC. By the time the proceedings were accorded priority in this court, the wife had sworn 4 very detailed long affidavits. By the time it came on for hearing this week, she had sworn two further long affidavits. Notwithstanding that the wife had obtained permission from me at an early directions hearing to rely upon previously filed affidavits instead of having to produce one trial affidavit, on the day prior to the hearing commencing, counsel for the husband raised with me his concern that the wife’s affidavit evidence had proved to be difficult to respond to. Counsel did not object to it and seek that it be struck out. He did not make an application to adduce viva voce evidence in reply. Counsel appeared to be trying to justify why his client’s affidavit evidence did not address all aspects of the wife’s evidence.
The wife’s affidavit evidence is long, detailed and somewhat punctilious but it is not repetitive or, at first blush, irrelevant save as to matters of comment and argument and both parties were equal offenders in that regard. The parties’ financial dealings since separation are relevant in this case. First, in the context of me deciding how to treat the monies which have been spent by the parties but which were taken from the proceeds of sale of the home, received by way of a taxation return on pre-separation income or received when each disposed of the car which they had at separation. Second, because the wife seeks a relief in relation to each and every child support assessment raised in this matter.
Turning to the discussion which counsel for the husband says is the conduct which gives rise to a reasonable apprehension of bias. The inference which I drew in relation to the wife likely wanting to be cautious before employing another full time manager was, I consider, an inference reasonably available to me from the wife’s evidence which is that she had not been aware that Mr X had been approaching her clients and negotiating business for his own benefit whilst still in her employ and that she promptly initiated proceedings in the Supreme Court to protect her business. That is not necessarily the conclusion to which I will come after hearing the wife’s evidence tested in cross-examination but it was an inference reasonably available to me in trying to investigate the utility of hypothetical evidence.
The inference that I drew in relation to the wife’s capacity to have run a business from home if that business included a full time employee in addition to herself was based on the wife’s evidence that even the former matrimonial home was not large enough to accommodate the family and the business all of the time together with her evidence that her residences since separation have been more modest.
The inference which I drew in relation to her probably not having the personal or financial resources to hire an employee are based on the numerous statements in her affidavit about suffering pain constantly and being compelled to borrow money from relatives or by way of cash on her credit card facilities or by way of loan from the bank. Again, the inference is not necessarily how I will assess the evidence when it is tested.
Hypothetical questions are rarely of assistance when asked in cross-examination, particularly when the witness is an expert. They are usually permitted if there is other evidence or inferences available from other evidence to justify asking such a question. The justification lies in the fact that if other evidence is accepted or inferences drawn, the answer to the hypothetical question may have some probative value. In this case I asked counsel for both parties if they considered that there was any prejudice to the single expert witness valuer being called out of turn. I specifically mentioned the need for the valuer to consider any evidence which the parties may give in cross- examination or otherwise. Neither raised any difficulty.
The exchange with counsel for the husband centred upon my seeking to discern from counsel the facts or inferences which he would submit justified the asking of hypothetical questions.
This situation is entirely different from that discussed in Hillier’s case and I find that the facts of this case can comfortably be distinguished from the principles therein discussed. I further find that a fair minded observer who understood the broad discretion which is to be exercised by this court in proceedings such as those I am hearing would not apprehend that I have brought anything other than an impartial mind to the task of identifying the issues and determining how the evidence sought to be adduced advances one case or the other.
Conclusion
For the above reasons, I dismiss the husband’s application that I recuse myself from further hearing these proceedings on the basis of a reasonable apprehension of bias.
I certify that the preceding fifty four (54) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Bennett delivered on 23 May 2014.
Associate:
Date: 23 May 2014
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