Fair Work Ombudsman v Complete Windscreens (SA) Pty Ltd

[2014] FCCA 2217

FEDERAL CIRCUIT COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v COMPLETE WINDSCREENS (SA) PTY LTD & ANOR [2014] FCCA 2217

Catchwords:
COURTS & JUDGES – Application for judicial officer to disqualify himself – apprehended bias – judicial officer had prior dealings with party and proposed witness for respondents – application to disqualify granted.

Attorney General of New South Wales v Bar-Mordecai [2009] NSWSC 117

Applicant: FAIR WORK OMBUDSMAN

First Respondent: COMPLETE WINDSCREENS (SA) PTY LTD (ACN 090 479 324)

Second Respondent: LINDSAY DEAN

File Number: ADG 66 of 2013

Judgment of: Judge Simpson

Hearing date: 19 September 2014

Date of Last Submission: 19 September 2014

Delivered at: Adelaide

Delivered on: 26 September 2014

REPRESENTATION

Counsel for the Applicant: Mr A Manos

Solicitors for the Applicant: Fair Work Ombudsman

Counsel for the Respondents: Mr Blyth

Solicitors for the Respondents: Jaak Oks Lawyers

ORDERS

1. Judge Denys Simpson is disqualified from dealing with the matter.

2. The trial scheduled for 22 September 2014 with 5 days set aside is vacated.

3. Further consideration of the matter is adjourned to a date and time to be advised for delivery of reasons.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT ADELAIDE

ADG 66 of 2013

FAIR WORK OMBUDSMAN

Applicant

And

COMPLETE WINDSCREENS (SA) PTY LTD (ACN 090 479 324)

First Respondent

LINDSAY DEAN

Second Respondent

REASONS FOR JUDGMENT

1. On 18 September 2014 I was asked by counsel for the respondents to disqualify myself in relation to these proceedings on the basis of apprehended bias.  It was made clear that actual bias was not alleged. 

2. Solicitors for the respondents had sent a letter to the applicant’s solicitors on 15 September 2014 informing them of a potential disqualification issue. 

3. The applicant’s solicitors had responded to that letter by return letter dated 16 September 2014 in which they expressed the view that it was appropriate to raise the matters referred to in the letter of 15 September 2014 with the Court.

4. On 16 September 2014, solicitors for the respondents sent a letter to the Court addressed to my Associate.  The letter attached a copy of the respondents’ solicitor’s letter of 15 September 2014 and the applicant’s letter of response dated 16 September 2014.

5. When the matter next came on before me on 18 September 2014, counsel for the respondents requested that I disqualify myself on the basis of apprehended bias.  Counsel for the applicant indicated that the applicant did not join the respondents in their application. 

6. I then heard submissions from each of the parties and adjourned the matter to Friday 19 September 2014 to refer to the authorities and consider the matter and to give my decision.  I sought to ensure that disqualification was genuinely necessary before acceding to the request.

7. When the matter came on on 19 September 2014, I disqualified myself and indicated that I would give reasons at a later time.  These are those reasons. 

8. The reason for the application to disqualify arose from the fact that in 2004 I acted as counsel for Hadyn Dean (brother to the second respondent, Lindsay Dean, in the current proceedings) and his wife, Karen Dean, in Federal Magistrates Court proceedings being Action No. AZ 70 of 2004 (“the earlier proceedings”).  Mr and Mrs Dean were at the time bankrupt.  Mr Matthews was trustee of the bankrupt estates of Mr and Mrs Hadyn Dean.  The earlier proceedings sought an enquiry into the conduct of Mr Matthews in his capacity as the trustee.

9. Mr Hadyn Dean is a shareholder and director of the first respondent and is to be a witness for the respondents in the current proceedings.  His trial affidavit was filed on 11 September 2014.

10. On 18 September 2014, Mr Hadyn Dean filed an affidavit in support of the application to disqualify myself.  The relevant passages from the affidavit were in the following terms:

    “1.At all relevant times I was a director and shareholder of the Complete Windscreens (SA) Pty Ltd.

    …

    4.At the start of the 1999 receivership proceedings the first defendant was indebted to Australian Taxation Office (“ATO”) for approximately $90,000.  Ongoing payments were made, however by early 2000 the fees, interest and penalties had raised this debt to approximately $600,000.

    5.By that time, the ATO were unwilling to accept the payment schedule which had previously been arranged.

    6.I was then referred to Anthony Matthews, an insolvency law specialist, by my solicitor at the time, John Taylor.

    7.I was apprehensive in seeking insolvency advice, I therefore prepared a series of questions in my diary which I put to Anthony Matthews (“Matthews”) at our first meeting.  One of these questions was “what will happen to our house?”, to which Matthews replied with words to the effect that my home “would not be touched”.  I inferred from this that my home would not be the subject of any recovery or bankruptcy action.  …

    8.The first respondent and I proceeded on the basis of the advice provided by Matthew at that first meeting.

    9.However, after a further period of time, Anthony Matthew placed a caveat on my family home in or about 2004, and then issued proceedings as trustee in bankruptcy to have the house sold.

    10.I subsequently instructed my solicitor, Jaak Oks, to issue proceedings against Matthews in the Federal Magistrates Court of Australia – action number ADG70 of 2004 (“the previous action”).

    11.On my instructions, my solicitor retained Mr Denys Simpson (now “Judge Simpson”) as counsel to act for me in the previous matter.

    12.The proceedings went to trial and settled after, I believe, two days of evidence.

    13.During the preparation for trial, Judge Simpson was provided with intimate knowledge of the first respondent’s business, including the methods used in running the business, policies, payments, and accounting processes.  These details were relevant to the previous action.

    14.In the period leading to the trial Judge Simpson met with myself, my brother Lindsay Dean, and my mother Coral Dean on several occasions at both his offices in the SGIC building and the offices of Roger Sallis, in Victoria Square.

    15.During these meetings I informed Judge Simpson of my interview with Matthews and showed him my diary entry containing the notes referred to paragraph 7 above.  One of the issues in the previous action was the content of the conversation referred to in that paragraph.  I advised Judge Simpson of this conversation at the first meeting I had with him.  However during one of the meetings prior to trial, Judge Simpson indicated to me that my account of the conversation with Matthews “lacked veracity” (which to the best of my recollection, were the actual words used”) and advised me that he would not allow me to give his evidence in court nor tender my diary as evidence at the trial.

    16.After two days at trial an offer was put to us to pay $140,000 to the trustee and in exchange they would allow us to keep our home.  As we could not afford the costs related to continuing the trial and we had not been permitted to use my diarized and verbal evidence, my wife and I ultimately accepted the offer, thereby concluding the trial.  The decision to settle was based on the advice of Judge Simpson, and came despite me (sic) suspicion that we have a good case.

    …

    18.I was disappointed that Judge Simpson had decided not to use the evidence of my conversation with Matthews.  I was left with the impression that Judge Simpson did not believe my account.

    19.I believe that it would have been a much better result in the previous action if Judge Simpson had not mistrusted my evidence.

    …”

11. On 19 September 2014, the respondents filed a further affidavit in support of their application for disqualification.  The affidavit was sworn by Mr Jaak Oks who was solicitor for the respondents both at the time of the earlier proceedings and the present proceedings.  In my view, the second affidavit adds little to the facts that might justify disqualification in this case and I do not propose to further deal with it.

12. Whilst I do not agree that all that is contained in the written material provided by the respondents is accurate, there is, in my view, sufficient uncontested facts to justify my disqualification.  I agree with the statement made by Rothman J in Attorney General of New South Wales v Bar-Mordecai[1] that “… it is inappropriate for a judge, faced with an application to excuse himself (or herself) for apprehended bias, to descend into factual contest with the party who makes the application.”

    [1] [2009] NSWSC 117.

13. Whilst the events in relation to the earlier proceedings are a distant memory to me, I accept that whilst acting as counsel for Mr Hadyn Dean in the earlier proceedings, it is more probable than not that I advised him that the evidence that he proposed to give was not credible, was unlikely to be believed, and that therefore it would be prudent for him to settle the matter.  It is in my opinion, reasonable for Mr Hadyn Dean to have inferred from my advice that I had formed the view that he was prepared to lie on oath to get the result that he sought in the earlier litigation.  In the circumstances, whilst I am confident that I could bring an impartial mind to a decision in the trial of this action, I believe that a fair minded lay observer might reasonably apprehend that I might not bring an impartial and unprejudiced mind to the resolution of issues raised in the current proceedings.

14. I have taken into account the fact that the respondents application comes late.  The proceedings were commenced on 22 March 2013 and the respondents were served soon thereafter.  The respondents say that they were not aware of the potential problem until Thursday 11 September 2014 when, for the first time, Mr Hadyn Dean attended Court in relation to this matter.  He recognised me as the barrister who acted for him in relation to the earlier proceedings. 

15. Mr Oks and Mr Lindsay Dean each say that they had forgotten about my involvement in the earlier proceedings until reminded of it by Mr Hadyn Dean.  It certainly came as a surprise to me when I was informed on 16 September 2014 that I had had previous dealings with the Dean families, and in particular, Messrs Hadyn and Lindsay Dean and that they were to be witnesses in the trial of these proceedings before me.

16. Whilst it is unfortunate that this potential problem was not identified at the commencement of the litigation, it is fortunate that the respondents became aware of it before the commencement of the trial which was due to commence on 22 September 2014. 

17. I make the orders to be found at the beginning of these reasons.

I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of Judge Simpson

Associate: 

Date:  26 September 2014