Excel Finance Corporation Ltd v England, R.A.F

[1995] FCA 330

CATCHWORDS

PRACTICE AND PROCEDURE - disqualification of judge for reasonable apprehension of prejudgment or bias - principles - reference to warnings in Re J.R.L.; Ex parte C.J.L (per Mason J.) and other cases against too ready withdrawal by a judge upon the application of one side only.

Livesey v The New South Wales Bar Association (1983) 151 CLR 288
Vakauta v Kelly (1989) 167 CLR 568
Re J.R.L.; Ex parte C.J.L. (1986) 161 CLR 342
Re Finance Sector Union of Australia; ex parte Illaton Pty Ltd (1992) 107 ALR 581

In the matter of EXCEL FINANCE CORPORATION LTD (Receiver and Manager Appointed)
The application of RICHARD ANTHONY FOUNTAYNE ENGLAND
SG 3040 of 1992
SG 3024 of 1993

Burchett J.
Adelaide
11 May 1995

IN THE FEDERAL COURT OF AUSTRALIA )
  )
SOUTH AUSTRALIAN DISTRICT REGISTRY    )    SG 3040 of 1992
  )    SG 3024 of 1993
GENERAL DIVISION                 )

In the matter of EXCEL FINANCE CORPORATION LTD (Receiver and Manager Appointed)

The application of RICHARD ANTHONY FOUNTAYNE ENGLAND

CORAM: Burchett J.
PLACE: Adelaide
DATE : 11 May 1995

REASONS FOR JUDGMENT

BURCHETT J.:

I have been allocated, under the procedures of the Court, two matters for hearing - Application number SG 3040 of 1992, which concerns one Worthley, and Application number SG 3024 of 1993, which concerns one Crase.  Messrs Worthley and Crase have now brought a motion that I should disqualify myself.  The grounds are two. 

One ground of disqualification asserted is that in a matter Whelan v Australian Securities Commission (1994) 13 ACSR 427, raising questions similar to those raised by the present matters, I made (at 437-438), some comments on a submission that a receiver authorised under s. 597 of the Corporations Law to examine an auditor of a company was "not likely to investigate a possible liability of the trustee who appointed him".  My comments included the following:

"In any case, on the facts of the present matter, I am satisfied that the result of success of the applicant would not be pursuit of the trustee by an examination, but no examination.  For it is not suggested that the Australian Securities Commission would fund an examination if the receiver were denied authority to undertake one.  There is thus a strong element of hypocrisy in the applicant's claim that he has no objection to an examination - only to an examination conducted by the receiver."

Counsel submits the reference to "hypocrisy" in that judgment could affect the applicants in the motion, who wish in the proceeding to put an argument similar to that I so characterized in Whelan.

But it should be observed that Whelan was a different case decided on its own evidence.  A proposition is not maintained hypocritically in one situation simply because that proposition would be hypocritical if asserted in another situation.  It depends on the circumstances.  And in Whelan I said "on the facts of the present matter", which included that "it is not suggested that the Australian Securities Commission would fund an examination if the receiver were denied authority to undertake one".  I concluded: "There is thus" - and I now add emphasis to the word "thus" - "a strong element of hypocrisy in the applicant's claim ... ."  No reasonable person, I think, would infer that there might be prejudgment of the genuineness of a contention advanced on other facts by another person. 

The second matter argued is closer to these cases in the sense that it involves one of the parties, Mr Worthley.  I
gave a judgment in a previous application by him, Worthley v Australian Securities Commission (1994) 13 ACSR 532, concerned with a different skirmish in the same litigation. In that judgment, I said (at 539):

"What may possibly have been, in strictness, a quite separate argument was mounted by counsel - that the receiver, in seeking the authorisation, had an improper purpose.  This, it was said, vitiated the authorisation.  However, I am satisfied there is no evidence from which I would be prepared to draw the conclusion that Mr England had an improper purpose, either when he made his application for authorisation, or at any other time.  The point is entirely without substance. ..."

Counsel argues that the description of the contention then advanced as "entirely without substance" raises an appearance of bias.   Again, it should be stated plainly that the point being made related to the absence of evidence from which the conclusion of improper purpose could be drawn.  There is nothing in the passage relied upon to suggest that different evidence might not have led to a different conclusion. 

Counsel referred me to Vakauta v Kelly (1989) 167 CLR 568. In that case (at 571) Brennan, Deane and Gaudron JJ. spoke of "preconceived views" that "could threaten the appearance of impartial justice". The principle, as was said in Livesey v The New South Wales Bar Association (1983) 151 CLR 288 at 293-294,

"is that a judge should not sit to hear a case if in all the circumstances the parties or the public might entertain a reasonable apprehension that he might not bring an impartial and unprejudiced mind to the resolution of the question involved in it."

But in Re J.R.L.; Ex parte C.J.L. (1986) 161 CLR 342 at 352, Mason J said:

"It needs to be said loudly and clearly that the ground of disqualification is a reasonable apprehension that the judicial officer will not decide the case impartially or without prejudice, rather than that he will decide the case adversely to one party.  There may be many situations in which previous decisions of a judicial officer on issues of fact and law may generate an expectation that he is likely to decide issues in a particular case adversely to one of the parties.  But this does not mean either that he will approach the issues in that case otherwise than with an impartial and unprejudiced mind in the sense in which that expression is used in the authorities or that his previous decisions provide an acceptable basis for inferring that there is a reasonable apprehension that he will approach the issues in this way.  In cases of this kind, disqualification is only made out by showing that there is a reasonable apprehension of bias by reason of prejudgment and this must be `firmly established'."

A little later, his Honour said:

"Although it is important that justice must be seen to be done, it is equally important that judicial officers discharge their duty to sit and do not, by acceding too readily to suggestions of appearance of bias, encourage parties to believe that by seeking the disqualification of a judge, they will have their case tried by someone thought to be more likely to decide the case in their favour."

The same point was strongly made by the judgment of the High Court in Livesey (supra, at 294):

"(I)t would be an abdication of judicial function and an encouragement of procedural abuse for a judge to adopt the approach that he should automatically disqualify himself whenever he was requested by one party so to do on the grounds of a possible appearance of pre-judgment or bias, regardless of whether the other party desired that the matter be dealt with by him as the judge to whom the hearing of the case had been entrusted by the ordinary procedures and practice of the particular court."

And in Re Finance Sector Union of Australia; Ex parte Illaton Pty Ltd (1992) 107 ALR 581, the remarks of Deane, Toohey and Gaudron JJ (at 583-584) are to similar effect, although coloured by the special facts of the particular case:

"It is true that Deputy President MacBean's reasons for decision on the application pursuant to s 111(1)(g) of the Act [i.e. the Industrial Relations Act 1988 (Commonwealth)] contain some strongly worded conclusions in relation to some issues of fact which may be involved in the s 115 proceedings.  Those conclusions were reached by him after a hearing extending over some 45 days of the Commission's time.  If what was involved were two sets of proceedings between different interests about unrelated matters, Deputy President MacBean may well have been disqualified from participating in the s 115 proceedings by reason of an impermissible appearance of bias and prejudgment.  The s 111(1)(g) and the s 115 proceedings are, however, related proceedings between the same interests.  Indeed, both sets of proceedings must be seen as steps in one overall contest between the same group of interests and arising out of a common set of facts.  In that context, it appears to us to be unreasonable and impractical to think that the determination of factual issues at one point in the resolution of the overall contest could or should preclude involvement in other steps, the outcome of which may depend on the same facts or some aspect of them."

Applying these principles to the circumstances confronting me, I am satisfied there is no proper basis for me to withdraw from the hearing of the cases assigned to me.  Accordingly, the motion is dismissed.

I certify that this and the preceding five (5) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Burchett.

Associate:

Date: 25 May 1995

Counsel for the Applicant        Mr J. Jarvis

(Respondent in the motion)

Solicitors for the Applicant     Kelly & Co

(Respondent in the motion):

Counsel for the Respondent       Mr P. Keene

(Applicant in the motion):

Solicitors for the Respondent        Finlaysons

(Applicant in the motion):

Date of hearing:                 8 May 1995