Emanuele v Emanuel Investments Pty Ltd

[1997] SASC 6177

IN THE FULL COURT OF THE SUPREME COURT OF SOUTH AUSTRALIA

MATHESON, OLSSON AND WILLIAMS JJ

Procedure - courts and judges generally - judges - disqualification for interest or bias - appeal from an order of the Supreme Court dismissing various applications brought by the appellants - issue of judicial bias considered and whether, if there was bias, other relevant proceedings were tainted - no basis in law on which to join the Master as a party in the proceedings - whether there was actual bias or a reasonably apprehended bias of the Master who had presided over a series of examinaitons, pursuant to section 596A and 596B of the Corporations Law - relationship between counsel and Judicial Officer considered - whether there was any standing to seek ruling in respect of proceedings in which appellants not directly involved - whether claim for destruction of transcript has any basis in law. Craig v State of South Australia (1995) 131 ALR 595; Russell v Duke of Norfolk [1949] 1 All ER 109; National Companies & Securities Commission v News Corporation Ltd (1984) 156 CLR 296; Ainsworth v Criminal Justice Commission
(1992) 175 CLR 564; Grimwade v Meagher (1995) 1 VR 446; Re Monadelphous Engineering Associates (NZ) Ltd (in liq); ex parte McDonald and Watson (1989) 7 ACLC 220; Shapowloff v Stirling Henry Ltd (in liq) [1992] 2 NSWLR 691; Re Stirling Henry Ltd (in liq) [1972] 1 NSWLR 497, discussed. Webb and Hay v The Queen (1994) 68 ALJR 582; Simionato v Farugia and Macks (Lander J, 17 January 1996, unreported); Re Polites; ex parte Hoyts Corporation (1991) 65 ALJR 445; In re JRL; ex parte JRL (1956) 161 CLR 242; Legal Practitioners Complaints Committee v A Practitioner (1987) 46 SASR 126, considered.

ADELAIDE, 7 April 1997 (hearing), 30 May 1997(decision)

#DATE 30:5:1997

#ADD 2:6:1997

Appellants:

Counsel: Mr Hevey with him Mr Dal Cin

Solicitors: Cowell Clarke

Respondents:

Counsel: Mr M Blue

Solicitors: Fisher Jeffries

Respondent Douglas Meagher QC:

In person

Intervener Australian Securities Commission:

Represented By: Mr N Bamptonona

Order: appeal dismissed.

MATHESON J

1. I agree with Olsson J that this appeal should be dismissed and I agree with his reasons for its dismissal. I merely add a few remarks on the issue that did not really fall to the Full Court to decide, but which was debated on the initiative of the court during the hearing, namely, whether Debelle J was correct in stating that "both a reasonable member of the public and the plaintiff as persons who must submit themselves to further examination, would entertain a reasonable suspicion that Judge Anderson might not bring an impartial and unprejudiced mind to the adjudication of rulings in the examinations and to orders to be made in the course of proceeding. It was, therefore, not only appropriate but necessary for the Judge to desist from presiding over the examination and from hearing any applications in the proceedings No'd 1021 of 1995".

2. Both Olsson and Williams JJ have disagreed with that ruling. I regard the question of whether or not it was correct as very finely poised indeed, and fortunately do not find it necessary to express a final view. The circumstances were exceptional as Olsson and Williams JJ have pointed out, but the very fact that what happened has led to a conflict of judicial opinion has left me with the conviction that at least Judge Anderson was very wise to disqualify himself. What happened in this case indicates that generally speaking social encounters such as occurred here should be avoided as far as reasonably possible.

OLSSON J

3. This is an appeal from an order made by Debelle J, whereby he dismissed an action brought by the present appellants against the respondents, seeking a variety of forms of relief.

4. The action focused on a social incident which occurred at the time of the ongoing conduct of certain examinations before a Master, pursuant to the provisions of sections 596A and 596B of the Corporations Law. Those examinations followed the winding up of the first respondent and certain other companies forming part of the so called Emanuel Group. The first appellant is a director of one or more of those companies and the second appellant (his father) is alleged to be a contributory.

5. Following the making of the winding up order, application was made to this court by the liquidator for the examination of a significant number of persons associated, in various manners, with the Emanuel Group. Those persons included the two appellants.

6. The application for examinations first came before Master Burley on 25 May 1995 and was adjourned over. Thereafter, it was dealt with by Master Anderson who, over a period extending from 11 December 1995, made some 36 different orders, including orders summoning a substantial number of "examinable officers" and "examinable persons". Orders relating to the first appellant were made on 31 May and 4 August 1995, and other orders were made in respect of the second appellant on 21 June and 4 August 1995. At the time of the making of the orders, the liquidator was represented by Mr Marsh of counsel.

7. The firstnamed appellant attended for examination on 20 and 21 July, 7, 9 and 10 August and 11 and 12 December 1995. The secondnamed appellant was examined on 17 and 19 July 1995. Master Anderson presided on all of those dates. Mr Meagher QC conducted each examination on behalf of the liquidator. He first appeared on 17 July 1995.

8. It should be mentioned that, between mid July 1995 and 18 December 1995, a total of 23 persons (including the appellants) appeared before the Master for examination.

9. The examinations of the appellants, technically, still remain open, although it is not clear as to whether it is likely that they will, in fact, be recalled.

10. As Debelle J has pointed out, the questions asked of the appellants have not proved highly contentious, as very few objections were taken, by counsel representing them, to questions asked by Mr Meagher QC.

11. It appears that the last two sitting days for examinations prior to Christmas 1995 were on 18 and 19 December 1995 respectively. The examination of the firstnamed appellant had been concluded on 12 December and a witness Winter was then under examination.

12. It is common ground that, late on the afternoon of 14 December 1995, the first named appellant and one Biddle, who had also just been examined before Master Anderson, were

present at a wine bar in Rundle Street East. They observed Master Anderson and Mr Meagher QC enter the premises, sit down at a table and spend about an hour in the company of one another, drinking wine. It seems a proper inference that they were well known to each other on a social basis, if not personal friends.

13. Debelle J, in the course of careful reasons published by him, found:-
(1) The incident was a purely social affair, for the purpose of having a Christmas drink.
(2) No discussion took place, or was intended to take place, concerning the proceedings the subject of this appeal.
(3) Both Master Anderson and Mr Meagher QC each paid their own separate accounts.
(4) No other person was with them, nor had anyone else been invited.
(5) The incident was of an impromptu nature and had probably been arranged some time within the preceding 24 hours.
(6) Persons other than the appellants having been examined on 18 and 19 December 1995, the examinations were then stood over until 15 January 1996, when they resumed. Witnesses other than the appellants appeared before Master Anderson on 15, 16, 17 and 18 January 1996.
(7) On 15 January 1996, that is to say, a full month after the wine bar incident, the solicitors for the appellants wrote to Master Anderson. They drew attention to what had occurred at the wine bar and invited the Master to disqualify himself from further sitting in the examination proceedings.
(8) When sitting on 16 January 1996 the Master announced, in open court, that he had received private correspondence from the solicitors for the appellant (who were not then appearing or represented before him). He stated, inter alia, that, as then advised, he was not prepared to disqualify himself.
(9) Shortly thereafter, copies of the letter were sent to Mr Meagher QC and came into the hands of the solicitors for other parties.
(10) On 17 January 1996, Master Anderson asked counsel for the appellants to attend before him in court. He asked whether the appellants still desired to press the matter and announced his version of what had taken place on 14 December 1995. Having heard counsel as to the attitude of the appellants, he appointed 19 January 1996 as the time when he would hear full representations from the parties concerning the matter.
(11) On 19 January 1996, having received full submissions from counsel for the appellants and one other examinee, Master Anderson indicated that the incident had been an entirely innocent social occasion, which had, in no sense, influenced his in-court conduct. He announced that he proposed to withdraw from further involvement in the proceedings. It subsequently transpired that he adopted that course following consultation with a Judge of this Court. At the time, counsel for the appellants unreservedly accepted the innocence of the occasion, but pointed to the principle of reasonable apprehension of bias.
[During the hearing of this appeal some contention arose as to the basis upon which Master Anderson desisted from further sitting on any examinations. The transcript discloses that he did so following detailed oral submissions to him by counsel for the appellants, asserting reasonable apprehension of bias. The curious feature of those submissions was that neither appellant was then under examination, nor was it by any means certain that either of them would be recalled. A very real question arises as to what standing the appellants had to seek that the Master desist further from presiding over all examinations, regardless of who the examinees were to be. However, I will, in due course, return to another aspect of that situation.]
After returning to Court, following a luncheon adjournment, the following relevant exchange occurred between Master Anderson and counsel for the appellants, counsel for the other parties not having, at that juncture, had an opportunity to address the Master.
"RESUMING 2.15 P.M.
HIS HONOUR: Mr Hevey, as I understand the nature of the application, it is that I disqualify myself from any involvement in the future of this entire examination.
MR HEVEY: That is the application.
HIS HONOUR: That is what is joined in by you, Mr Beaumont.
MR BEAUMONT: Yes. And otherwise - at least insofar as my clients are concerned. It seems to me it would be very difficult, in the circumstances, to have somebody conduct part of the examination and someone else -
HIS HONOUR: I propose to accede to the application. Before I do so, however, I wish to say this: That the event in question was an event that was, of its character, wholly innocent; it was a wholly innocent social occasion. But I have come to the conclusion that I will announce in a moment based upon some further reflection, with the assistance of the submission of counsel.
I would like it to be recorded that I have no view at all about these proceedings or any of those who have taken part in them or who may in the future take part in them; and that, in my opinion, at least, that position has been demonstrated by my conduct of the proceedings.
I disqualify myself from further involvement in these proceedings, and I shall arrange for another master to assume the conduct of them. For that purpose, the proceedings should be adjourned until 10.15 a.m. on Monday next."
Mr Hevey, of counsel for the appellants, strongly contended that this pronouncement constituted an unequivocal acceptance by Master Anderson of all that had been put to him on the issue of reasonably apprehended bias; and that it was not open to him, at some later stage, to seek to proffer some other explanation of his attitude. I do not accept that proposition. All that fell from the learned Master was a bald intimation that he proposed to accede to the application that he disqualify himself. The basis of so doing was not articulated.]
(12) At that point no application had been made concerning examinations which had already taken place and the transcript in relation to them, or with regard to the continuing role of Mr Meagher QC as counsel for the liquidator.
(13) On 24 January 1996 Master Anderson sat to hear a request from counsel for the liquidator to clarify the basis upon which he had withdrawn from the proceedings. The Master's response was to the effect that he had acceded to the application as a matter of pragmatism, to avoid delay in the proceedings, as there was another Master available to deal with them. He went on to comment that he saw the application as a step taken to delay the proceedings and made reference to what had been said by Lander J, during the preceding week, in the course of a judgment published by him concerning the conduct of the appellants directed at that very type of strategy.
(14) Thereafter Master Burley assumed responsibility for the ongoing conduct of the relevant proceedings. 14. In February 1996 the appellants issued a summons, giving rise to the application before Debelle J, naming a variety of defendants, including Master Anderson and Mr Meagher QC, both of whom submitted to any order which the court might see fit to make. I pause at this point to express the view that it is impossible to perceive any proper basis upon which Master Anderson was joined as a party. Quite apart from the fact that, as a member of a superior court, he was not amenable to proceedings in the supervisory jurisdiction of this Court (cf Craig v State of South Australia (1995) 131 ALR 595), the fact is that no specific relief was sought against him. He should, in my view, be dismissed from this action.

15. The summons, as later amended, is a lengthy document, but Debelle J summarised the essential thrust of it in these terms-
"The plaintiffs claim that they apprehend and suspect that the judge exhibited actual bias on 24 January by asserting that the plaintiffs had engaged in delaying tactics. They claim that there is no foundation in fact for that allegation. I will return to that claim.
In addition to the claim of actual bias, the plaintiffs also claim that the fact that the judge shared a social occasion with Mr Meagher gives rise to a reasonable apprehension of bias. They claim that the whole of the examination has thereby been contaminated. They claim also that the examinations which are now continuing before Judge Burley are also contaminated because the directions and orders made by Judge Anderson continue in force and are referred to in the course of the examinations. It is for that reason that they claim to be entitled to an order staying the examination as well as ... orders destroying the transcript and setting aside all of the orders made in the proceedings numbered 1021 of 1995. As against Mr Meagher, the plaintiffs assert that the proper administration of justice requires that he be restrained from continuing to represent the first defendants and the second defendant, the liquidator Mr Macks, in the examinations or in anything connected with the proceedings." 16. On the hearing before Debelle J, the appellants sought to contend that the events of 14 December 1995 gave rise to a reasonable apprehension of bias, whilst the comments of Master Anderson on 24 January 1996 constituted evidence of actual bias.

17. It is fair to say that Debelle J summarily rejected the suggestion of actual bias, pointing out that the learned Master was, at the relevant time, doing no more than "pick up" observations made by Lander J in a judgment published by the latter on 17 January 1996, to which I will later refer. In that regard Debelle J pointed to a combination of the delay in

applying to the Master that he should disqualify himself, the lengthy time that had been occupied by the examinations and the fact that, at worst, the Master's remarks could not possibly bear on any events preceding 14 December 1995.

18. All that need be said in that regard is that it is impossible to conceive how those conclusions can, logically, be questioned.

19. As to the issue of reasonably apprehended bias, based on the wine bar incident, Debelle J made these points:-
* it was inappropriate, at the relevant time, for Master Anderson to have socialised with Mr Meagher QC as he did, although it had to be noted that the incident had been public, in a manner which tended to confirm its innocence. [As to the issue of inappropriateness, I have the misfortune to hold a view which differs from that expressed by Debelle J. However, I will return to that aspect in course.]
* On 19 January there had been an unqualified acceptance by the appellants of the actual innocence of the occasion, although their later professed attitude changed, due, it seems, solely to the remarks made by Master Anderson on 24 January.
* The obvious inference, on the facts, was that the incident of 14 December 1995 was the only relevant meeting which had occurred between Master Anderson and Mr Meagher QC. 20. In the course of his reasons the learned Judge at first instance carefully reviewed the authorities dealing with the topic of reasonable apprehension of bias. Having stated that it was well settled that it is inappropriate that a Judge, while adjudicating at a trial, engage in private communication with a party or his legal representatives without the knowledge and consent of the other, Debelle J, nevertheless, stressed that the requirements of natural justice depend on the particular circumstances of the case (Russell v Duke of Norfolk [1949] 1 All ER 109 at 118, National Companies & Securities Commission v News Corporation Ltd (1984) 156 CLR 296 at 311-312, 319-320, 326). This applies, he said, not only to the manner in which a court or tribunal must conduct itself, but also to the consequences of a breach of the requirement.

21. He elsewhere stated:-
"It will be noticed that, notwithstanding the imperative that the judicial process and its integrity must be maintained and the concern to ensure that the public has confidence in the judicial process, the principle is, for understandable reasons, not expressed in absolute terms. As Mason J observed in the passage just quoted, it is necessary to examine the circumstances of each case and, in the case of private communication, to examine such matters as any explanation for the communication, the nature of the communication, the situation in which it took place and its relationship to the issues for determination: cf also Wilson J at 359-360 and Dawson J at 371-372. But the court will not inquire whether the private communication in fact worked to the prejudice of the party against whose interests they were made; it is enough that it might do so: see Gibbs CJ at 349. For the reasons which follow, I think that this observation of Gibbs CJ does not have unqualified or absolute operation in respect of a proceeding for an examination under s596A or s596B." 22. It was his view that a similar view should necessarily be taken in situations in which the relevant judicial officer was presiding over proceedings in court of a non-adjudicatory nature. Where, as here, the proceedings were merely investigatory, the test was that, nevertheless, they must be seen to be conducted fairly (Ainsworth v Criminal Justice Commission
(1992) 175 CLR 564 at 577).

23. He went on to point out that the mere occurrence of private communication did not, per se, give rise to a necessary conclusion of apparent bias. In some cases an explanation for it may quickly dispel any appearance of bias. It was his conclusion that, in the instant case, the apparent opportunity of Mr Meagher QC to discuss matters related to the examinations was sufficient to give rise to a reasonable perception that the Master's capacity for independence and impartiality might well be impaired. It had therefore been necessary for Master Anderson to disqualify himself.

24. As to the assertion that that was not enough and that the whole examination proceedings ought to be quashed and the transcript destroyed, Debelle J pointed to the nature of those proceedings. He stressed that they were purely investigatory in nature and created what was tantamount to a form of discovery. That outcome did not affect the rights of an examinee in any direct sense. The course of the proceedings had been such that there had been no complaints of oppression or vexatious conduct; and, as earlier noted, there had been relatively few objections to questions asked.

25. The inherent bona fides of the application fell to be tested against the fact that the application sought to quash all orders made, regardless of who had made them and whether or not they had been made after 14 December 1995. Nor, he pointed out, did it seek to discriminate between orders made before Mr Meagher QC first appeared in the proceedings and those made subsequently.

26. As the learned Judge stressed, it could not seriously be suggested that any reasonable apprehension of bias, arising from the circumstances above recited, could possibly have affected the proceedings on the wholesale basis contended for by the appellants.

27. Having reviewed the course of the examinations, Debelle J, not surprisingly, found that there was simply no basis for concluding that the proceedings prior to 14 December 1995 were "tainted" by the events of that day. He also pointed out that all orders made subsequently (other than one inconsequential direction) had been made by judicial officers other than Master Anderson; and that these orders (and also his activities post 14 December 1995) did not directly affect the interests of the appellants. They focused on other examinees. Moreover, there was not a scintilla of evidence to suggest that what had taken place post 14 December 1995 was other than entirely appropriate. No steps had ever been taken to appeal against, or otherwise challenge, what had been done.

28. In relation to the proposed destruction of transcript, Debelle J pointed out that, not only had any objections made been few and far between, but, also, a perusal of the transcript failed to reveal that rulings given had been other than entirely appropriate in the circumstances. Oppression or abuse of process was never, remotely suggested.

29. In this regard Debelle J found, in relation to the examination of the appellants:-
* on occasions, two or three days passed without a single objection;
* in all, only eight objections were raised up to 12 December 1995. Some were allowed and some overruled;
* in response to some objections the question was withdrawn or reframed - or an accommodation had been come to between counsel;
* in three cases in which an objection was overruled, the question did not, in the event, elicit a response or catalyse a line of questions of any real significance. 30. [Mr Hevey criticised this analysis of the transcript as being inappropriate. However, it is difficult to perceive how Debelle J could, logically, have exercised any discretion in this matter without reviewing it as he did. Further, it served to illustrate the essential invalidity of the line of endeavour propounded by the appellants in the present action.]

31. The learned Judge drew attention to the fact that the potential use of transcripts of evidence is the subject of various safeguards in favour of the appellants and that, even if the transcripts were destroyed, there was nothing to prevent the conduct of the examinations all over again, presumably with the same resultant evidentiary outcome.

32. He therefore declined to accede to the applications made in that regard, or to grant any stay of further examinations before a judicial officer other than Master Anderson.

33. As to the relief sought in relation to the continued appearance of Mr Meagher QC, Debelle J noted that this was founded on the decision in Grimwade v Meagher (1995) 1 VR 446, in which it was held that, because the respondent had prosecuted a long criminal trial against Grimwade, there was a real risk of conflict of interest and duty, leading to a likely lack of objectivity (and thus of unfairness) in the conduct of subsequent civil proceedings.

34. Here, opined the learned trial Judge, there is no possibility of conflict of interest. At best, it is suggested that Mr Meagher QC might, as a result of the objection related to Master Anderson and the bringing of these proceedings, be motivated by a desire for vengeance; and thus conduct himself improperly as counsel.

35. Debelle J stressed that there could be no suggestion of any motive for Mr Meagher QC to exercise vengeance or spite towards any person, other than the appellants, yet to be examined - presided over by a different judicial officer, who could and would control the proceedings to ensure objectivity and propriety. Moreover there would be serious prejudice and substantial cost to the liquidator if, at this stage, he was deprived of counsel of his own choice.

36. This aspect of the plaintiffs' application was also rejected.

37. On the present appeal counsel for the appellants continued to press, essentially, the same lines of endeavour as were pursued before Debelle J.

38. Having studied the carefully reasoned judgement of Debelle J I would, but for the practical importance of certain of the issues raised and my disagreement with one conclusion to which he came, have contented myself with saying that his general reasoning and ultimate decision were plainly correct; and that the present appeal was, patently, ill conceived and must inevitably fail.

39. Whilst that is, in substance, my view, there is, nevertheless, one fundamental issue to which some comment must be directed, on an aspect in relation to which I have the

misfortune to take a quite different view - although I hasten to point out that it does not compel me towards an outcome of the proceedings different from that ordered by Debelle J.

40. I specifically differ from him in relation to his view as to whether or not it was incumbent upon Master Anderson, in the relevant circumstances, to disqualify himself - either on the basis of reasonable apprehension of bias, or otherwise.

41. It cannot be stressed too strongly that, the test of reasonable apprehension of bias involves a consideration of the likely mental state of a fair minded and properly informed member of the public (Webb and Hay v The Queen (1994) 68 ALJR 582).

42. The theoretical properly informed person would, as Debelle J emphasised, be aware, in the instant case, of the facts that:-
* Master Anderson and Mr Meagher QC were personal friends;
* the proceedings were of an investigatory and largely non contentious nature - and not adjudicatory in nature;
* they would, almost inevitably, have gone forward, in the manner in which they did, regardless of whether Master Anderson or some other judicial officer had been involved;
* it was hard up on Christmas and the incident was purely social in nature. It occurred in a public and open manner, on an impromptu basis;
* no discussion took place at the meeting concerning the examinations, nor was it ever intended that it should. 43. [To those points I would add that the fair minded, informed person would also be aware that it is a normal incident of the relevant statutory procedure that orders for examination are obtained ex parte in circumstances in which private dialogue routinely occurs between the representative of the liquidator and the Master and the material put before the latter is then sealed up and kept confidential apropos any examinee (See Simionato v Farugia and Macks (Lander J, 17 January 1996 unreported). Furthermore, rulings given during an examination may well need to be made on the basis of information already privately communicated to the Master in the confidential material placed before him.]

44. Presumably that person would also view the situation in the context that the appellants had already been examined, they had, as Lander J found, exhibited a history of engaging in deliberate delaying tactics to attempt to circumvent the inquiries and administration of the liquidator, and had waited a full month to raise an issue of apprehended bias - circumstances which bear, very adversely, on their bona fides.

45. It cannot be stressed too strongly that the issue in this matter is not whether, in the same circumstances, I would have embarked upon the occasion of social intercourse here complained of, or not. It is, rather, whether that occasion necessarily gave rise to a reasonable apprehension of bias.

46. The days are long past when it was the expectation that, on appointment to judicial office, a Judge was expected to withdraw from social relationships with his or her former professional friends and, for that matter, the community at large; and live the life of someone substantially removed from the general community. Indeed, in the contemporary scene, members of the judiciary tend, publicly, to be criticised if they seek to do so. It is, rightly, perceived that such a course would be a distinct disadvantage in discharging the judicial function, because of the cultural isolation from community norms and mores, which would result.

47. Moreover, there is a world of difference between a situation in which, during ongoing, inter partes litigious processes, private intercourse occurs between a litigant personally (or someone seeking to approach such officer, specifically on the litigant's behalf) and a presiding judicial officer whose function is adjudicatory in nature, by way of contrast with a member of the profession, who happens to be a personal friend of the judicial officer, but, as it happens, has currently been retained by a litigant.

48. If it be said that it was improper for two friends such as Master Anderson and Mr Meagher QC to have a social drink with one another (in a perfectly innocent context) then it would be equally improper for (any) counsel and a judge who had regularly played golf or tennis with one another each week for years to continue to do so (in the instant case for a potential period of 6-12 months), or for a judge to attend a family Christmas function because (say) his child, nephew or niece was currently engaged as counsel before him [a situation which, in my own personal circumstances, could well occur].

49. To state these examples is to expose the preposterous nature of what is now contended for by the appellants. Any fair minded, properly informed member of the public would reject the appellants' propositions for the specious contentions that they truly are. As Mr Meagher QC pointed out, it is, in contemporary times, common place for members of the bench and bar to socialise, regardless of what briefs are held by counsel, on the basis that they are professional persons who will appreciate and adhere to the ethics applicable to the situation.

50. I agree with his submission to the following effect:-
"19. It is submitted there is no impropriety in social contact between the Bench and Bar in particular, or the Bench and the legal profession in general. Far from being a matter for condemnation, it is submitted that it has been, is being and will continue to be encouraged. It has a marked beneficial effect on the administration of justice. No harm is occasioned, and much good is derived by the development of good relations between all levels of the judicial system.
20. Social contact between Bench and Bar is encouraged in Sydney and Melbourne where Bar Common Rooms are frequented by Judges and Counsel during the working week. There are many long standing friendships, arising before judicial appointment not abandoned thereafter, between Judges and Counsel appearing before them. Other friendships arise by reason of Counsel frequenting the Judge's court, mixing on professional social occasions, dining at each other's homes, or by chance encounter. In London the Judge is likely as not to occupy rooms in the same set of Chambers as Counsel, to dine at the same Inn, and to be on the most cordial of terms. Where solicitors are appointed to the Bench, it will often be the case that counsel and solicitors who were formerly not only social acquaintances but partners in practice will appear before them.
21. No informed bystander could reasonably conclude that a friendship (whether of long or short duration) between Judge and Counsel gives reason to apprehend the possibility of bias. If a perception of friendliness is the criteria for an apprehension of bias, then it would matter not whether it was based on an observation of contact contemporaneous with an appearance before the Judge, or over an extended period of time in the past - indeed, the latter may be the more convincing if one was seeking to establish that such friendship will lead to bias. It has never been put until now that friendship with Counsel debars a Judge from hearing a case, or Counsel from appearing (save in one bizarre case where sexual relations between the Judge and the solicitor for a party was thought too much - In the Marriage of Kennedy and Cahill (1995) 19 Fam LR 173). The observations of Priestly JA in Raybos Australia Pty Ltd v Tectran Corp Pty Ltd (1986) 6 NSWLR 282 at 276 (with Hope and Glass JJA agreeing) are pertinent:
'He [Powell J in his judgment] there accurately referred to the long-established method of appointment of judges in New South Wales (and Australia and England for that matter). That method of appointment means that built into the legal system is public knowledge and long acceptance of the fact that judges will often know to a greater or less degree the counsel and solicitors who appear before them.'
22. That may be contrasted with the situation where the friendship is between Judge and party, which has a different result. In such a case, the Judge declares the friendship, and if there is objection (or perhaps on the Judge's own motion), a different Judge hears the case. It is submitted that the reason is that the law, and the public, perceive a friendship between judge and counsel as not likely to lead to bias. They are engaged in the discharge of their profession, and no rational person would conclude that personal regard of one for the other would lead to a departure from their duty. On the other hand, should the friendship be between Judge and party, then it is perceived as rendering it difficult for the Judge to make findings adverse to the party on issues of credibility, or culpability.
[However, past association between a Judge and party, even if a professional association, does not lead to the disqualification just on that account: Re Polites; Ex parte Hoyts Corp Pty Ltd (1991) 173 CLR 78)]
23. It is submitted that considerations such as these are absent from the reasons for judgment of Justice Debelle. He treats Counsel as if a party, and concludes an informed bystander will apprehend that counsel will press a client's cause on a social occasion (though he recognises in fact it did not happen). A well informed and fair-minded bystander would know that would not occur, just as he would know that a long standing friendship between Judge and Counsel does not give rise to a reasonable apprehension of bias on the part of the Judge towards that counsel's client. See the analogous situation in S & M Motor Repairs v Caltex Oil (1988) 12 NSWLR 358 at 380-1 per Priestly and Clarke JJA, dealing with a Judge who had previously acted on many occasions for the litigant Caltex in a cause he was hearing:
'In the present case a reasonable person knowing nothing of the way barristers do their work might, on first thought, apprehend possible bias. We do not think such a judgment would be reasonable, because founded on insufficient knowledge for arriving at such a judgment. The reasonable observer would, in our opinion, need to inform himself of the circumstances in which the judge had done legal work for Caltex, before being able to form a reasonable judgment on the question of possible bias. Once he understood, in general outline, the way in which barristers carry out the work they do, upon the instructions of solicitors, for clients, and upon understanding, again in a general way, the difference between a large business organisation and the people who work for it, seems to us that it would no longer be reasonable to apprehend possible bias on the judge's part.'
These observations were applied by Merkel J in Aussie Airlines v Australian Airlines (1996) 65 FCR 215, when dealing with complaint of past a present close social, professional
and financial associations between Judge and Counsel lead to a suspicion of bias, a great mischief would be introduced into the law. It would invite investigation of associations between Bench and Bar with the reward of disruption and possible prevention of trials.
24. The approach that leads to this result is set out by Merkel J in Aussie Airlines v Australian Airlines at 230 where he said:
'In seeking to approach the matter on the basis of the principles established in the cases I have referred to, the 'informed' observer, when examining the association in the present case, can be assumed to do so with the presumed general knowledge that:
(a) when barristers act on a client's behalf they do so in a professional capacity as their client's legal advocate selected to act in the case for that purpose. Any barrister so selected could have been briefed to fulfil the same task for the opposite site;
(b) in accepting a brief to act for a client in a particular commercial case, the barrister does not become part of or identified with the client and has no direct or indirect financial interest in the outcome of the case;
(c) the barrister acts as such as a member of an independent Bar. The barrister is instructed by a solicitor or a firm of solicitors to present the client's case and in doing so is bound by a professional code of ethics ensuring that the barrister's conduct is in accordance with his or her professional standards;
(d) it is common place for barristers who are close associates, or friends and who may even be from the same set of chambers, to fight on opposite sides of a case without compromising their professional duties to act in the interests of their clients;
(e) as judges are usually appointed from the senior ranks of the profession, particularly the Bar, it is likely that they will be well acquainted, and have formed close associations, with senior counsel appearing before them. It is also likely that they will have personal and professional associations with many of the counsel appearing before them.'" 51. I am bound to comment that some indication of the real motivation of the appellants, in pursuing the stance which they have sought to adopt, is to be gleaned from the very ambit and extravagance of the claims to relief which they have sought to make.

52. It is to be remembered that they have, in effect, sought to have had all examinations, of all examinees, quashed, and all transcript destroyed, regardless of when the examinations took place, in relation to 14 December 1995.

53. No other examinee has sought to complain or support them and Mr Hevey's metaphor of a drop of ink tainting a whole glass of water is, with respect, nothing short of an extravagant misapprehension of the essential nature of the proceedings.

54. In the first place there is not one glass of water to be considered, but a total of 23 glasses. The very nature of examinations pursuant to sections 596A and 596B of the Corporations Law is that each is a separate proceeding in its own right, generated by a separate order directing the conduct of it. Moreover, the presiding officer sits in what is, essentially an administrative, and not a judicial capacity (Re Monadelphous Engineering

Associates (NZ) Ltd (in liq); ex parte McDonald and Watson (1989) 7 ACLC
220 at 225-6). Further, where, as here, the examinees in issue were persons who fell within the provision of section 596A of the Corporations Law, the making of an order for examination at the instance of the liquidator was well nigh inevitable, even given what residual discretion remained in the Court in relation to such an application.

55. How it could remotely be suggested that all separate examinations conducted prior to 14 December 1995 were necessarily 'tainted' by any events of that day entirely escapes me. What occurred thereafter in no way directly affected the appellants, and could not potentially have affected them personally unless they had subsequently been recalled for further examination. In such an event, if that occurred, the examination would be presided over by another Master.

56. Mr Hevey was, in that situation, driven to argue that what was said by Master Anderson on 19 January 1996 nevertheless indicated actual bias on his part, which necessarily related back, so as to 'taint' all that had taken place, at least in relation to the appellants. All that need be said, by way of response to that suggestion, is that but a moment's consideration of that stance, and the conduct and tactics of the appellants in relation to this matter, viewed in light of what had fallen from Lander J only a few days earlier, readily leads one to conclude that Master Anderson characterised the situation with unerring accuracy. He spoke with the voice of reality - not bias.

57. Finally, it must be said that the appellants were totally unable to direct attention to any authority for the extraordinary proposition that, in the circumstances, it was proper for the Court to direct destruction of its own record. In this regard it is pertinent to bear in mind that there is no contention that any rulings given were incorrect and also that, on any view, all of the examinees could be ordered to be re-examined before another officer and, presumably, would give the same responses.

58. Absent some evidence of sinister connotation in relation to the social incident in question in these proceedings, I would not have found myself able to conclude that Master Anderson ought to have desisted from presiding over the examinations in question. There could have been no reasonable apprehension by a fair minded, properly informed person of bias in the relevant legal sense, particularly bearing in mind the non adjudicatory nature of the proceedings. Moreover, it is timely to draw attention to what fell from the High Court in Re Polites; ex parte Hoyts Corporation (1991) 65 ALJR 445 and In re JRL; ex parte JRL (1956) 161 CLR 242 at 352. It is not in the interests of the due administration of justice that judicial officers should, too readily, disqualify themselves from continuing to preside, simply because a party seeks to ventilate the issue of possible bias. There must be a real and substantial basis for withdrawal. Such a basis was not here established.

59. In that respect then, I respectfully disagree with what fell from Debelle J.

60. However, even if I be incorrect as to that, then nothing has been said, in the course of this appeal, which persuades me that the reasoning and the conclusions to which he came on the merits were other than entirely appropriate.

61. Indeed, I would go further than that. I consider that Mr Blue, of counsel for the liquidator, was quite correct in his assertion that, in reality, the proceedings before Debelle J were fundamentally misconceived.

62. Given that Master Anderson was a member of this Court and not properly subject to proceedings within its supervisory jurisdiction, no juridical basis for the present action was ever demonstrated by the appellants. Any potential remedy in relation to orders made by him lay by way of appeal - a process which was never initiated. Mere rulings made by him in the course of examinations were not reviewable in any event (See Legal Practitioners Complaints Committee v A Practitioner (1987) 46 SASR 126 at 137).

63. As I have said, the appellants also simply had no standing to seek remedies in respect of examinees other than themselves.

64. It must be re-stressed that the appellants were not parties involved in an inter partes adjudication of rights. Their status was no more than that of mere witnesses who, in particular, had no standing to seek orders related to the destruction of transcript or the mode of representation of the liquidator by counsel, either generally in relation to other examinees or even in relation to any possible further examination of themselves - which possibility had not crystallised into reality (See Shapowloff v Stirling Henry Ltd (in liq) [1992] 2 NSWLR 691 at 693; Re Stirling Henry Ltd (in liq) [1972] 1 NSWLR
497 at 503).

65. Moreover, as was pointed out by Mr Meagher QC:-
"There are a number of significant differences between the examinations pursuant to Part 5.9 Corporations Law and judicial proceedings, they being:
* the examination is ordered on information not disclosed to the examinee. If challenged, the examinee bears the onus of adducing evidence to set aside the orders, being denied an opportunity to be informed as to the information on which the orders were made.
* the examinee is denied any right or entitlement to know what other examinees have said in answer to questions, save the right to attend those examinations conducted in public. Even then, there may be an order excluding future examinees from attendance prior to their interrogation.
* there is no restriction imposed on the judicial officer before whom the examination is conducted to limit his rulings on questions asked, or orders made, to evidence adduced only at that time, or to evidence of which the examinee has been informed.
* the judicial officer is not required to adjudicate and determine substantive issues arising form the information extracted on the examination, nor make any ruling as to credit." 66. Quite apart from these aspects, even if there is some juridical basis for the action, the granting of the type of relief sought is clearly discretionary. As was demonstrated by Debelle J there were powerful reasons for declining to exercise discretion in favour of the appellants in the particular circumstances. As counsel for the ASC (as Intervenor) pointed out, he was entitled to give due weight to the facts that:
"(1) An examination is intended to be an expeditious and inexpensive procedure allowing an eligible person to obtain information about an insolvent company which he or she requires to administer the company's affairs promptly and efficiently.
(2) It is not the intention of Part 5.9 of the Corporations Law to permit examinees to make interlocutory applications which might delay and frustrate the examination process. The subject examinations have been on foot since July 1995.
(3) Although there is nothing other than cost to prevent the liquidator from conducting the examinations for a second time, it is in the interests of neither the respondent companies, nor their creditors for the liquidator to be put to the expense of so doing.
(4) The only respect in which bias might intrude into an examination (leaving aside any order summonsing a person for examination tainted with bias - in which case the appropriate remedy is to apply to set aside the order) is in the case of findings on objections to questions.
(5) Where the examinee is legally represented and no objections have been made during the course of an examination, it is difficult to conceive any circumstances where the existence of the appearance of bias as a result of subsequent event may justify the orders sought.
(6) The rights of an examinee are safeguarded in any event, if it s sought to use his or her evidence in later proceedings. Although by virtue of subsection 597(14) the transcript of an examination may, subject to subsection 597 (12A), be used in evidence in later legal proceedings against the examinee, it is not automatically admissible in the later proceedings. It is open for the examinee to object to the admission of the transcript in the later proceedings. Whether or not it is admissible is a matter for the court before which it is sought to be used, according to the ordinary rules of evidence."
(Douglas-Brown v Furzer (1994) 11 WAR 400) 67. There is simply no demonstrable error in his approach.

68. I would, unhesitatingly, dismiss the appeal.

WILLIAMS J:

69. The facts of this matter have been extensively canvassed by Olsson J.

70. In my opinion this appeal should be dismissed.

71. However, as set out hereunder there are two points upon which I disagree with the reasons for decision of Debelle J at first instance:
(1) His Honour regarded it as improper for Judge Anderson to have had social contact with Mr Meagher QC. I do not consider that there was a departure from proper standards of judicial behaviour and no basis upon which relevantly there could be a perception of judicial bias.
(ii) I do not consider that Judge Anderson as a member of this court - a superior court - should have been joined as a party to the proceedings. I can see no procedural justification for such a step. The Court's jurisdiction with respect to its officers does not extend to its members. 72. In meeting with the Judge, Mr Meagher was not acting as a representative of a client. His was a personal meeting with a friend. I do not consider that (if properly informed) the parties or the public should hold a reasonable apprehension that the Judge might not be bringing an impartial and unprejudiced mind to his duties in the circumstances. (see Liversey v New South Wales Bar Association
(1983) 151 CLR 288 at 293-4).

73. A fair minded person with an appreciation of the legal system would recognise as inevitable the warm friendships which exist between the Bench and the Bar. The ability to put these personal associations aside whilst discharging public responsibilities is a capacity which is to be generally expected of judges and senior counsel. I reject the criticism of Judge Anderson's conduct.

74. However, in my view each case must be decided upon its own particular facts.

75. The principles are conveniently summarised by Merkel J in Aussie Airlines v Australian Airlines (1996) 135 ALR 753.

76. The informed observer would know that a barrister does not become identified with his client in a personal sense and that barristers on opposite sides in a case may retain their personal friendship without compromising the interests of their clients. Likewise, the informed observer would know that it is inevitable that within a Court some Judges will have personal associations with the senior counsel who professionally appear in the Court.

77. When the paths of a judge and senior counsel cross socially, it will not be assumed that they have overlooked their responsibilities - unless the circumstances suggest otherwise. In the present case two professionals - each with extensive experience and qualifications - met on a purely social occasion and not in circumstances which had any connection with judicial business. Each paid for his own drinks and it has been accepted after enquiry that the matters upon which counsel was appearing were not discussed. I do not consider that a reasonable bystander would perceive bias arising from this Christmas drink. Of course, if a judge received some perceived benefit from a situation then different considerations may prevail. The giving of presents and the acceptance of lavish hospitality are matters where particular care is needed and which would invite scrutiny. Likewise if there were any hint of emotional involvement between two people - as in the case of Re Kennedy (1995) 19 FAMLR
113 the situation will be different. None of these considerations apply in this case.

78. To a degree, some judges may choose to deny themselves the fellowship of their friends within the legal profession; by so doing they will seek to avoid opportunistic criticism or the perception (by the ill informed) of a departure from proper standards of conduct. Despite the advantages of such a judicial choice, the practice of self denial is far from universal and does not give rise to any rule.

79. Whether an association between a judge and counsel will give rise to a reasonable perception of bias (within the principle identified in Liversey) will depend upon the nature and extent of the nexus which a reasonable bystander would perceive between the personal association and its capacity to affect the judge's mind in the discharge of judicial duties.

80. The identification of a relevant nexus between two concepts is, of course a process well known in many branches of the law but the application of the principle to cases such as the present may cause controversy. Moreover, the identification of the characteristics of the reasonable bystander may compound the problem. The conflicting attitudes of the majority and the minority in S & M Motor Repairs (1988) 12 NSWLR 358 demonstrate the differences of approach to the qualities of the relevant hypothetical observer and the degree of cynicism which that fair minded person will still retain when the traditions with which lawyers are imbued and the effect of the judicial oath are properly explained.

81. Bearing in mind these difficulties I am not prepared to associate myself with the broader expression of Olsson J as being representative of a code of conduct which is currently appropriate in Adelaide. Acceptable practices based upon English or other experience are not necessarily those which will be perceived in the same way under different social conditions.

82. However, as Toohey J pointed out in Vakauta v Kelly (1988-89) 167 CLR
568 at 585 a conclusion of reasonable appearance of bias will not be lightly drawn in the case of a professional judge whose training, tradition and judicial oath (or affirmation) require that he discard the irrelevant.

83. My remarks are confined to the relationship between a judge and senior counsel and with respect to the particular facts of the case. It would only require a slight change in the facts for my decision to be different in the application of principle.

84. The examination which gave rise to the present proceedings was conducted before Judge Anderson pursuant to Pt 5.9 Div 1 of the Corporations Law. In accordance with s58AA and s596A of the Corporations Law the examination was conducted under the auspices of a "court" as therein described namely the Supreme Court of South Australia. It is clear that in exercising jurisdiction the Master constituted the Court and was not acting persona designata. The constituent members of the Court include the Masters (see Supreme Court Acts7(1)).

85. Judge Anderson has been joined as a party to the present proceedings. In my view it is not competent in proceedings initiated in a Superior Court to join one of its members as a party arising out of his discharge of his function within the Court. The ability of a Court to exercise jurisdiction over its officers is exemplified by Sydlow v Kotselas (1996) 65 FCR 234 at 240-241 - where the situation of a liquidator is discussed. This is to be distinguished from the relationship which applies between a superior Court and its constituent members - see Jarman ex parte Cook (High Court of Australia Judgment of 3 April 1997) in particular per Dawson J at p11-12. That case concerns the availability of prerogative process at common law and the use of the "constitutional writs"; applying the reasoning of Jarman and bearing in mind how the Supreme Court of South Australia is constituted, it would be incongruous to allow a Master of the Court to participate as a party in the present proceedings or to subject him to the summons of the Court. I would strike out the name of Judge Anderson as a party. I would then dismiss the appeal.