Frigger v Kitay [No 8]

[2015] WASC 104

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   FRIGGER -v- MERVYN JONATHON KITAY IN HIS CAPACITY AS LIQUIDATOR OF COMPUTER ACCOUNTING & TAX PTY LTD (IN LIQUIDATION) [No 8] [2015] WASC 104

CORAM:   ALLANSON J

HEARD:   13 FEBRUARY 2015

DELIVERED          :   27 MARCH 2015

FILE NO/S:   CIV 2765 of 2010

MATTER                :Section 78 of the Trustees Act 1962 and Section 1321 of the Corporations Act 2001

BETWEEN:   ANGELA CECILIA THERESA FRIGGER

ANGELA CECILIA THERESA FRIGGER AND HARTMUT FRIGGER IN THEIR CAPACITIES AS TRUSTEES OF THE FRIGGER SUPERANNUATION FUND
HARTMUT HUBERT JOSEF FRIGGER
Plaintiffs

AND

MERVYN JONATHON KITAY IN HIS CAPACITY AS LIQUIDATOR OF COMPUTER ACCOUNTING & TAX PTY LTD (IN LIQUIDATION)
First Defendant

COMPUTER ACCOUNTING & TAX PTY LTD (IN LIQUIDATION)
Second Defendant

Catchwords:

Recusal application - Whether actual or apparent bias - Turns on own facts

Legislation:

Nil

Result:

Application dismissed

Category:    B

Representation:

Counsel:

Plaintiffs:     In person

First Defendant             :     Mr D A Lenhoff

Second Defendant         :     Mr D A Lenhoff

Solicitors:

Plaintiffs:     In person

First Defendant             :     Holborn Lenhoff Massey

Second Defendant         :     Holborn Lenhoff Massey

Case(s) referred to in judgment(s):

Antoun v The Queen [2006] HCA 2; (2006) 224 ALR 51

British American Tobacco Australia Services Ltd v Laurie [2011] HCA 2; (2011) 242 CLR 283

Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337

Frigger v Mervyn Jonathon Kitay in his capacity as Liquidator of Computer Accounting & Tax Pty Ltd (in liquidation) [No 7] [2014] WASC 441

Johnson v Johnson [2000] HCA 48; (2000) 201 CLR 488

Livesey v New South Wales Bar Association [1983] HCA 17; (1983) 151 CLR 288

Michael Wilson & Partners Ltd v Nicholls [2011] HCA 48; (2011) 244 CLR 427

Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 3] [2010] WASC 93

Re JRL; Ex parte CJL [1986] HCA 39; (1986) 161 CLR 342

Reid v Commercial Club (Albury) Ltd [2014] NSWCA 98

1. ALLANSON J:  The plaintiffs have applied for me to recuse myself for bias, both actual and apparent.  Before setting out the grounds, I will first summarise the background and the principles to be applied.

Background

1. These proceedings were commenced in 2010.  I have been managing them since 2013.  In that time, I have been required to rule on multiple interlocutory disputes, as well as make various directions for the management of the litigation.  The plaintiffs have, with few exceptions, appeared unrepresented in directions hearings although they were represented in some of the contested applications.  The proceedings have been marked by a high level of acrimony between the parties, and in particular between the plaintiffs and the solicitor for the defendants.  Concurrently with this application for me to disqualify myself, the plaintiffs have applied for the court to restrain the solicitors acting for the defendants.  That application is to be determined by another judge.

Actual Bias

1. The law relating to actual bias was recently considered by the New South Wales Court of Appeal in Reid v Commercial Club (Albury) Ltd [2014] NSWCA 98 [68] ‑ [74] (Gleeson JA, with whom Emmett JA & Tobias JA agreed). In summary:

   1. A finding of actual bias is a grave matter.  An allegation of actual bias must be distinctly made and clearly proved.  Such a finding should not be made lightly, and cogent evidence is required.

   2.If there is an allegation of prejudgment, the party making that claim must establish that the judge is 'so committed to a conclusion already formed as to be incapable of alteration, whatever evidence or arguments may be presented'.

   3.There are distinct elements underlying an assertion of prejudgment:  that the judge has an opinion on a relevant aspect of the matter in issue in the particular case; will apply that opinion to the matter in issue; and will do so without giving the matter fresh consideration in light of whatever may be the facts and arguments relevant to the particular case.

   4.The test requires an assessment of the state of mind of the judge in question, although it is not confined to an intentional state of mind.  Bias may be subconscious.

Apprehended Bias

1. The test to be applied in determining whether a judge is disqualified by reason of the appearance of bias 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:  Johnson v Johnson [2000] HCA 48; (2000) 201 CLR 488 [11]; British American Tobacco Australia Services Ltd v Laurie [2011] HCA 2; (2011) 242 CLR 283 [104]. It requires an objective assessment of the connection between the facts and circumstances said to give rise to the apprehension and the asserted conclusion that the judge might not bring an impartial mind to the case: Michael Wilson & Partners Ltd v Nicholls [2011] HCA 48; (2011) 244 CLR 427 [67]. That test gives effect to the requirement that justice should both be done and be seen to be done: Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 [6].

2. One of the ways in which an apprehension of bias may arise is where the judge has, in earlier hearings in the same proceedings or in a previous case, expressed clear views either about a question of fact which constitutes a live and significant issue in the subsequent case, or about the credit of a witness whose evidence is of significance on such a question of fact:  Livesey v New South Wales Bar Association [1983] HCA 17; (1983) 151 CLR 288, 300; British American Tobacco Australia Services Ltd v Laurie [126].

3. In considering this issue I have had regard to the frequent warning in the authorities that a judge should avoid any tendency to be over-ready to disqualify himself or herself from presiding over an appointed trial:  see Antoun v The Queen [2006] HCA 2; (2006) 224 ALR 51 [34]; Re JRL; Ex parte CJL [1986] HCA 39; (1986) 161 CLR 342, 352; British American Tobacco Australia Services Ltd v Laurie [70] ‑ [72].

The allegation of actual bias

1. The allegations are set out in an affidavit of the first plaintiff, sworn 23 February 2015. Mrs Frigger schedules a series of decisions made in the management of the proceedings and states: 'I believe that the decisions … were wrong and were made by a judge who is partial to the defendants in these proceedings' [5]. The only material put forward in support of the allegation of partiality (apart from the decisions themselves) is the claim in par 11 of the affidavit that I am doing everything in my power to delay the trial of these proceedings 'to enable the defendants to carry out their plan to terminate the plaintiffs' service station business on 1 July 2015'.

2. There is no evidence to support the assertion that I am deliberately delaying these proceedings to assist the defendants.  It is not true.

3. The plaintiffs' grounds for this application also rely, in part, on the number of occasions on which I have ruled against them in interlocutory matters.  I do not propose to deal with the decisions I have made and to which the plaintiffs refer.  Most of them were published.  Where a decision was not published, reasons were given orally at the time.  In each case, the reasons for the decision are available for scrutiny.  

4. On only one occasion have the plaintiffs lodged an appeal against an interlocutory ruling, and that did not proceed. 

Apprehended bias

1. The allegations arise out of my earlier decisions, including procedural directions at case management hearings, a recent directions hearing, and the hearing of cross applications by the plaintiffs and the defendants for security for costs.  I have not yet given a decision on the applications for security.  The plaintiffs were offered the opportunity to file additional evidence and I deferred making a decision until that was done.  This plaintiffs' request that I disqualify myself then overtook the decision on those applications.

2. Mrs Frigger, who appeared for the plaintiffs, made a long and detailed submission.  She has also appended a schedule to her affidavit of decisions and references to transcript.  In some cases she has extracted sentences or parts of sentences from the transcript.  Not all of the comments on which she relies were said by me (some were by counsel), but most were.  

3. Many of them are in the context where Mrs Frigger was clearly reading from a submission (which she said was prepared by someone else) dealing with the general principles relating to security for costs.  The particular applications, however, raised quite distinct issues going to the discretion of the court.  On the defendants' application, these included:  the plaintiffs' failure to pay existing costs orders; the plaintiffs' stated intention to leave Australia; and (because the court must consider the question of stultification of proceedings by ordering security against a party who cannot pay it) the plaintiffs' asset position.  On the evidence filed by the defendants, the plaintiffs' had not paid existing costs orders and their major assets are encumbered. 

4. It was, in my opinion, necessary to identify those issues and explore them in submissions.  Identifying a matter that is likely to be relevant or even determinative in the exercise of discretion in a particular application does not involve any findings of fact, provisional or otherwise, that might affect the ability of the judge to later determine the question of fact in the action without prejudgment.  I did ask questions of Mrs Frigger when she was making submissions.  I said at the time that I was not trying to decide questions of fact, but trying to understand the submissions (ts 220, 221). 

5. There is one matter arising out of an interlocutory decision which appears to be of particular concern to the plaintiffs.  I have, in an interlocutory decision, struck out a plea on which the plaintiffs wished to rely.  In 2010, the master ordered that the company, Computer Accounting & Tax Pty Ltd, be wound up in insolvency for failure to comply with two statutory demands:  see Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 3] [2010] WASC 93. The master found that there was no evidence that displaced the presumption of insolvency. This followed a decision of the Court of Appeal, setting aside in part a judgment in favour of the company and requiring the company to pay about $800,000 to Professional Services of Australia Pty Ltd and Martin Banning (the plaintiffs in the winding up application). The plaintiffs pleaded that the judgment and orders of the Court of Appeal were contrary to the terms of a Deed of Company Arrangement in the administration of Professional Services Australia, and that Professional Services Australia and Mr Banning had no right to apply for a liquidator to be appointed to Computer Accounting & Tax because that company was entitled to retain the judgment sum pursuant to the DOCA. In Frigger v Mervyn Jonathon Kitay in his capacity as Liquidator of Computer Accounting & Tax Pty Ltd (in liquidation) [No 7] [2014] WASC 441, I struck out that plea as a collateral challenge to the decision of the master. In my opinion, the plaintiffs cannot in these proceedings challenge the decision to wind the company up in insolvency. In my view, it is a matter of law. If I am wrong, the error should be corrected on appeal.

6. I have considered whether I should deal with the plaintiffs' individual items of complaint, to the extent they are not covered by my general comments above.  To go into other individual matters in detail would, in my opinion, give the appearance of dispute between the party and the court.  I have carefully considered the individual complaints.  I have not been shown (and do not believe I have made) any interlocutory ruling where I have expressed a concluded view on the facts to be ultimately determined.  I have asked questions in the course of submissions, where that was necessary to understand or test a particular proposition.  They are not the expression of a concluded view on the facts, or the credibility of any potential witness.  They involve asking questions of Mrs Frigger, who is a party, only because she has appeared to represent the plaintiffs.  I am satisfied that they do not give rise to the apprehension and the asserted conclusion that I might not bring an impartial mind to the case, or, more immediately, to the resolution of the security application.  I am satisfied that I should not disqualify myself from either task.