G & B

[2006] FamCA 748

[2006] FamCA 748

FAMILY LAW ACT 1975

FAMILY COURT OF AUSTRALIA  

AT MELBOURNE  

IN THE MARRIAGE OF:

G

(Husband)

and

B

(Wife)

EX TEMPORE JUDGMENT DELIVERED BY

THE HONOURABLE JUSTICE YOUNG

Date of Hearing:              8 August 2006
Date of Judgment:           8 August 2006

Appearances:                  

Mr Kirkham QC with him Mr Sweeney of counsel for the wife
Mr Ackman QC with him Ms MacMillan of counsel for the husband

Family law – reasonable apprehension of judicial bias – Judge had previously engaged the professional witness in a personal capacity – whether a reasonable person would be able to have a clear perception of the demarcation of issues and understand how the original affidavit could be put to one side in the context of only the financial and property issues - counsel for the wife sought to rely on another, almost identical, affidavit sworn by another witness instead – content of the original affidavit could be found in source documents and other documents already in the public domain.

1. The matter of B v G is before me to determine a number of interim applications dealing with issues of residence, spousal maintenance, departure from an assessment for child support, injunctions, security for costs and the sale of various properties pending trial.  I now deliver extempore reasons for judgment on a separate preliminary application.

2. The matter was before me yesterday on the issue of the validity of a subpoena seeking production of documents.  A third party, V Pty Ltd, was applicant and they were represented by Mr Houghton of Senior Counsel, with him Mr Strum.  In those proceedings, Mr Kirkham QC with him Mr Sweeney, appeared for the wife.  That matter was heard and determined as a discrete issue and judgment was reserved.

3. Mr Ackman QC, with him Ms MacMillan, did not make submissions in yesterday's hearing, though junior counsel was present in court throughout all of the hearing.  This morning, the husband and wife are the only parties in court, V Pty Ltd having been excused as was requested by its counsel as it has no interest in the interim proceedings now before the court. 

4. A preliminary issue arose this morning when counsel for the husband, by oral application, objected to my continued hearing of any interim financial or property matter for reasons that I will shortly outline.  It would be appropriate to foreshadow that he had identified the previous day, at the callover of this matter, that such an objection would likely be made.

5. The interim proceedings before the court involve both parenting, financial, property, injunctive and other issues.  There have been substantial affidavits filed, both by the parties, members of their immediate family, accountants and other professional witnesses.  A very significant sum of money has already been expended on the engagement of solicitors and highly experienced senior and junior counsel.

6. Some days before this matter commenced before me the wife elected to terminate the professional services of her former solicitors and former senior and junior counsel, and only days prior to this interim hearing commencing on 7 August 2006, she retained her current solicitors and counsel. 

7. The background to this matter is that it is at the early stage of litigation.  It is in the complex cases list.  I have been appointed judge manager.  The matter has not previously been listed for hearing before me, but there are various procedural and other orders on file from Guest J and other court officers.

8. At the centre of the current interim financial proceedings is the need for the parties to determine what is contained in the net pool of assets.  The husband has filed a number of affidavits.  In the initial affidavit filed 1 February 2006, at paragraph 41 thereof, he deposed to his holding of over a million shares in the A Group Ltd Employee Share Purchase Plan as trustee for the G Family Trust.  During the period that the wife retained her former solicitors and counsel and the services of an accountant, there does not seem to have been any detailed investigation nor inquiry of that aspect of the evidence of the husband that has, at this stage, been brought to my attention.

9. When the matter commenced before me, leave was sought by senior counsel for the wife to file an affidavit of T, chartered accountant.  The document was a short seven paragraph affidavit, annexed to which was a report dated 4 August 2006 that had just been prepared by and under the signature of T and delivered to the solicitors now acting for the wife.  That affidavit was, by leave of all parties, filed with the court before the proceedings commenced.  The affidavit was specifically before me without objection in the proceedings yesterday on the subpoena issue.  Indeed junior counsel for the wife, who conducted the subpoena argument, relied upon and read from that affidavit, as did senior counsel for V Pty Ltd in reply.  I therefore read both the affidavit and the annexure without objection on that subpoena issue.

10. The background to which I earlier referred and now return was that senior counsel for the husband had fairly foreshadowed an issue by way of objection to the affidavit of T being relied upon insofar as I would hear and determine interim property and financial, but not parenting and children issues. 

11. Senior counsel for one or more parties were aware that in my prior life as a member of the Bar, I had engaged T as my personal family accountant.  Senior counsel sought to raise that issue early in the proceedings as he, and other legal practitioners, had prior knowledge of that fact.  I have subsequently advised counsel and, for the record, confirm that T was my accountant for the period from the late 1970s through to the early 1990s or thereabouts, at which time I was transferred to a different accounting partner, but within the same firm.

12. In the course of these proceedings I have indicated to counsel that T has not performed any professional work for me or my family for the better part of 10 years, and likely I have not seen or spoken to him, certainly professionally, for two years or thereabouts.  It is with that background that objection is taken, at least on the interim hearing, for me to disqualify myself as that may involve evidence from or touch upon the credit, knowledge or understanding of T in his professional capacity and how I may receive or accept same.

13. As I said, I have clearly read and examined the affidavit and annexure of T.  I did so without objection in the prior interim hearing.  It does strike me as somewhat incongruous that I am, within the same proceedings, but where different parties may be then involved, entitled to rely upon that affidavit for some contentious issues, but not otherwise for other issues. That is in the context that the husband was and remains a director of V Pty Ltd and is one of two shareholders in that company; that position having been fully explored yesterday.

14. The specific objection taken by senior counsel for the husband is that, in his own words, "the problem is not only the actuality of the case but the perception."  Senior counsel emphasised that his proper objection raised with the court was on the basis that his client might not, could not or did not have a clear perception of the demarcation of issues and it might be that he, as a reasonable member of the community, would be unable to or could not understand how that evidence may, could or would be put to one side or appropriately dealt with in the context of the decisions to be made.

15. I should immediately say that the objection taken on behalf of the husband for me to disqualify myself on the basis of some form of apprehended bias or the perception that it may lead to an injustice was wholly and strongly opposed by counsel for the wife. 

16. The affidavit of T, other than detailing his experience and qualifications, is structured to first deal with the subpoena issue and otherwise in his report and in paragraphs 6-12 (inclusive) to deal with an issue of and concerning the A Group Ltd, the husband's purported shareholding and the basis of such shareholding, and then an opinion being expressed by T as to the beneficial ownership thereof by the husband.

17. The somewhat intriguing aspect of this case is that a chartered accountant, F, has been in court for much of the interim proceedings, at least this day.  He has a substantial background and qualification as a chartered accountant, having been in public practice for the past 16 years, and is a member of the Institute of Chartered Accountants.  During his submissions, senior counsel for the wife indicated that it was this professional gentleman who first discovered and alerted current solicitors to the husband's shareholding and, more particularly, the basis of that shareholding in the A Group Ltd.

18. What transpired this morning was that leave was sought by senior counsel for the wife to file an affidavit of F.  Without objection that leave has granted and that affidavit has now been filed, is in evidence and has been read by me.  That affidavit as to paragraphs 6 and 7, thereof is in identical terms to the affidavit of T.  The annexed report on the letterhead of F, is likewise identical, in all substantial aspects, to the earlier annexure and report of T.  The same opinion is expressed, the same information is detailed.

19. The wife's case is now, as from the filing by leave of this affidavit this morning, conducted on the basis that the witness that will be called is F in lieu of T.  The submissions of senior counsel for the wife were specifically and clearly to the effect that the credit of T is not an issue.  What the court was told was that the wife does not now rely upon the evidence of T.  It is the almost identical report and affidavit of F that is relied upon, and he will be the professional witness, or at least one of them, in this case.

20. I have very carefully considered and evaluated all aspects of these circumstances.  I find that I will not be, in any way whatsoever, embarrassed or conflicted.  I can and will fairly hear and conclude the case.  It is unique that the material is almost identical but this case will be concluded on the evidence, including professional opinion properly given.  It is both the giving and the testing of that evidence in cross examination, and other professional or relevant evidence that will be important.  I wholly reject that I will be unable to separate the prior opinion of T.  That will not hereafter be in evidence.  I find that there should be no apprehension of likely bias.  I will decide all issues with a fair and impartial mind and approach.

21. Specifically the use of F's affidavit was identified by senior counsel for the wife to be that it would indicate a line of inquiry to be followed to ascertain the available pool of assets.  I pause there to reflect on the wife's change of solicitors, but also the short notice and timetabled afforded to the husband's solicitors and to counsel for the husband.  It may have been that the issue was flagged between junior counsel at a slightly earlier date and time, but certainly senior counsel for the husband received, by way of information from his junior counsel, on Saturday morning last - that is 5 August 2006 - the information contained within T’s then affidavit and report which subsequently has been overtaken by the now current affidavit and report of F.

22. There are, as I indicated, two aspects of those documents; one dealing with an issue where judgment is now reserved and where no objection was taken, the other dealing with what is likely to be a central and contentious issue in this case, that issue being whether or not the husband beneficially owns or controls the shares in the A Group Ltd.

23. Central to submissions of senior counsel for the wife were the fact that information is available on that latter issue from other sources.  What was an exhibit marked “W1” in the proceedings yesterday and therefore in this case was the financial report for the period 1 July 2004 to 31 December 2004.  That document has been seen by all counsel in this case today.  It has been made available to them, and indeed I have had my court officer photocopy what was identified as the relevant page, that is page 41.  There was no objection taken this day to that document in this oral application hearing.

24. What is recorded in the exhibit under the heading of Director's Disclosures/Director‑Related Parties is the fact that the husband does have a beneficial interest in a fund, together with another individual, totalling $3,618,078.  There has been some discussion as the matter proceeded by way of submissions, it being an interlocutory application, that the shares are listed on the Australian Stock Exchange and have a value in excess of $2.50 each. 

25. Senior counsel for the husband has submitted that one of the issues in this case is that by trying to bring these shares to account as an asset within the available pool of assets, the wife is endeavouring to increase the pool by approximately $4 million or thereabouts.  There was no particular accuracy with the figures, nor do I currently expect same.  I am merely identifying that as it is incorporated by senior counsel for the wife within his argument which is that it is not simply or solely the affidavit of F and formerly that of T which identifies the issue, but it is the public records and financial statements of the listed entity wherein the husband was a director until his resignation on 22 April 2005 as is recorded in the preamble to its accounts.

26. I turn to the position in law and the principles upon which I should decide an application for disqualification.  Initially I am greatly helped by the observations of his Honour Mason J (as he then was) in Re  JRL; ex parteCJL (1986) CLR 342. His Honour there observed:

    "The problem is governed by the principle that a judge should disqualify himself from hearing or continuing to hear a matter if the parties or the public entertain a reasonable apprehension that he might not bring an impartial or unprejudiced mind to the resolution of the issues."

27. Thereafter his Honour continued:

    "This principle, which is evolved from the fundamental rule of natural justice, that a judicial officer should be free from bias reflects a concern with the need to maintain public confidence in the administration of justice.  This concern is expressed in the cognate principle that not only must justice be done, it must be seen to be done.

    It seems that the acceptance by this court of the test of reasonable apprehension of bias in cases such as Watson and Livesey has led to an increase in the frequency of applications by litigants that judicial officers should disqualify themselves from sitting in particular cases on account of their participation in other proceedings involved with one of the litigants or on account of the conduct of the litigation.

    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 that he will decide the case adversely to one party.  There may be many situations in which previous decisions of the 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 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."

28. His Honour after referring to various other judgments continued and 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 a disqualification of a judge, they will have their case tried by someone thought to be more likely to decide the case in their favour."

29. There is no suggestion in this case that senior counsel for the husband seeks to have the case on behalf of his client tried by someone more likely to decide the case in his favour.  Senior counsel also submitted - and this is relevant both to this case and other reported cases to which I will refer - that this case is seemingly somewhat unique and does not really meet the factual situation of earlier cases.  There is merit in that submission.  This is not a case where it is a comment or a past decision from the bench that gives rise to the application.  It is the particular knowledge of senior counsel or others of the facts that I have earlier disclosed that gives rise to this application.

30. In Johnson v Johnson (2000) 201 CLR 485, Kirby J, after referring to JRL; ex parte CJL (supra) said at page 504:

    "Such considerations lie behind the salutary warning in Re JRL; ex parte CJL that judicial officers in Australia were obliged to disclose their professional duties unless disqualified by law.  They were told not to accede too readily to suggestions of an appearance of bias lest parties be encouraged to seek such disqualification without justification.  Applications of that kind might sometimes be made in the hope of securing an adjudicator more sympathetic to a party's case.  They might be made because of the strategic advantage, but that may thereby be secured, especially the interruption of lengthy proceedings and the delays consequent upon obtaining a fresh start in a busy court or tribunal."

31. Again I emphasise that this is not a case where I proceed on the basis that senior counsel for the husband has made a tactical application on behalf of his client.  Far from that, he has endeavoured to persuade me that there may be a real perception or indeed a reasonable likelihood of an apprehended bias.  I am, however, very conscious of those words of Kirby J, given the length that the litigation in this case is likely to proceed along, the delays with all of the interim matters before me and when and how those matters will be determined.  However, having said that, the overwhelming interest of justice comes first, and it will come first in this judgment.

32. Senior counsel for the wife referred me to the decision of Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at 348, and this judgment is of particular assistance. The High Court there said:

    "Judges have a duty to exercise their judicial function when their jurisdiction is regularly invoked and they are assigned to cases in accordance with the practice which prevails in the court to which they belong.  They do not select the cases they will hear, and they are not at liberty to decline to hear cases without good cause.  Judges do not choose their cases and litigants do not choose their judges.  If one party to a case objects to a particular judge sitting, or continuing to sit, then that objection should not prevail unless it is based upon a substantial ground for contending that the judge is disqualified from hearing and deciding the case.

    This is not to say that it is improper for a judge to decline to sit unless the judge has affirmatively concluded that he or she is disqualified.  In a case of real doubt, it will often be prudent for a judge to decide not to sit in order to avoid the inconvenience that could result if an appellant court were to take a different view on the matter of disqualification.  However, if the mere making of an insubstantial objection was sufficient to lead a judge to decline to hear or decide a case, the system would soon reach a stage where, for practical purposes, individual parties could influence the composition of the bench.  That would be intolerable."

1. He otherwise submitted various well-known decisions to me, the first of which is the matter of an application for a writ of prohibition against Margaret Lusink J of the Family Court of Australia andShaw v Shaw (1980) 32 ALR 47. I do remember the case as I was junior counsel at first instance in the Full Court and High Court. What the court there said and what senior counsel for the wife has reinforced is:

   "Of course the court which is asked to grant prohibition will not likely conclude that the judge may be reasonably suspected of bias in this sense.  It must be firmly established that such a suspicion may reasonably be engendered in the minds of the parties or the public."

2. In Livesey v New South Wales Bar Association (1983) 151 CLR 288, it was highlighted that:

   "In a case such as the present where there is no allegation of actual bias, the question whether a judge who is confident of his own ability to determine the case before him fairly and impartially on the evidence should refrain from sitting because of a suggestion that the views which he has expressed in his judgment in some previous case may result in an appearance of prejudgment can be a difficult one involving matters of degree, and particular circumstances may strike different minds in different ways .....

   It would be an addication 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 that particular court."

3. Both senior counsel have in their submissions referred to and identified the decision given at first instance on an extempore basis by Guest J in the reported decision of EL and ML and DM (2005) FLC 93-245. I have read and evaluated that judgment and also the judgment of the Full Court earlier reported (2005) FLC 93-244, and in particular paragraphs 20-25 at first instance. His Honour therein referred to the decision of Taylor and Anor v Lawrence and Anor (2002) 3 WLR 640 where the English Court of Appeal observed:

   "61.  The fact that an observer has to be “fair minded and informed” is important.  The informed observer can be expected to be aware of the legal traditions and culture of this jurisdiction.  Those legal traditions and the culture have played an important role in ensuring the high standards of integrity on the part of both the judiciary and the profession which happily still exists in this jurisdiction.  Our experience over centuries is that this integrity is enhanced, not damaged, by the close relations that exist between the judiciary and the legal profession.  Unlike some jurisdictions, the judiciary here does not isolate itself from contact with the profession.  Many examples of the traditionally close relationship can be given:  the practise of judges and advocates lunching and dining together at Inns of Court; the Master of the Rolls's involvement in the activities of the Law Society; the fact that it is commonplace, particularly in specialist areas of litigation and on circuits, for the practitioners to practise together in a small number of chambers and in a small number of firms of solicitors, and for members of the judiciary to be recruited from those chambers and firms.

   62.  It is also accepted that barristers from the same chambers may appear before judges who were former members of their chambers or on opposite sides of the same case.  This close relationship does not prejudice but enhances the administration of justice.  The advantages in terms of improved professional standards which can flow from these practices have been recognised and admired in other jurisdictions.  Again by way of example, in the United States they have in recent years established the rapidly expanding American Inns of Court modelled on their English counterparts with the objective of improving professional standards.

   63.  The informed observer will therefore be aware that in the ordinary way contacts between the judiciary and the profession should not be regarded as giving rise to a possibility of bias.  On the contrary, they promote an atmosphere which is totally inimical to the existence of bias.  What is true of such relationships is equally true of normal professional relationships between a judge and the lawyers he may instruct in a private capacity.

   64.  A further general comment which we would make, is that judges should be circumspect about declaring the existence of a relationship where there is no real possibility of it being regarded by a fair‑minded and informed observer as raising a possibility of bias.  If such relationship is disclosed, it unnecessarily raises an implication that it could affect the judgment and approach of the judge.  If this is not the position no purpose is served by mentioning the relationship.  On the other hand, if the situation is one where a fair‑minded and informed person might regard the judge as biased, it is important that disclosure should be made.  If the position is borderline, disclosure should be made because then the judge can consider, having heard the submissions of the parties, whether or not he should withdraw.  In other situations disclosure can unnecessarily undermine the litigants' confidence in the judge. …”

4. Like his Honour Guest J, I also found the reported decision of Taylor (supra) of assistance, though it is a different factual situation.  The issue in this case is largely whether I would be influenced or if an apprehension of bias would arise from by my past knowledge or professional association with or respect for the professional views of T.  Counsel in this case have not directed me to a similar factual situation.  However, what is of fundamental issue is that the evidence in this case has moved on, and T is no longer the witness relied upon by the wife.  This case now can and should also move on to a hearing before me.

5. That situation seemingly is not wholly accepted by senior counsel for the husband in his final submission because he relies on the fact that the affidavit was filed, that I had read that affidavit and report, and it might be that I, and of course he refers not generally to judges, but specifically to myself, might be influenced or affected as to give an impression or possibility, let alone likelihood, of apprehended bias.

6. I am somewhat attracted to paragraph 25 of his Honour Guest J in EL and ML and DL (supra) where his Honour said:

   "One must look at the realities of everyday practice in court and the due administration of justice, balancing of course the integrity of the legal process.  This must be observed 'in the real world of actual litigation', (per Brennan, Deane and Gaudron JJ in Vakauta v Kelly (1989) 167 CLR 568 at 570), and procedural dispositions 'governed by the reality of the situation', (per Merkel J in Aussie Airlines v Australian Airlines at page 233)”.

7. There are other cases to which I have either been referred or which are identified in the cases which I have read and I have considered.  This is an extempore judgment given immediately after argument and without any benefit of leaving the bench, save for the organisation of the file and cases.  I am specifically delivering this judgment without a written document in front of me, but on the basis of submissions made throughout the day, and reference to authorities.

8. The actual objection taken by senior counsel for the husband was initially on the basis of interim issues only.  Senior counsel then reserved his position as to a final hearing and whether he would then have a similar position.  Subsequently, and perhaps on reflection, he somewhat stood back from that initial submission, and it would seemingly be that the oral application of the husband now before the court is that I should be wholly disqualified hereafter from determining any financial issue, be it property, spousal maintenance, departure from child support or like monetary issues, but not child or parenting issues.

9. I have reflected on the submissions of senior counsel for the husband, both in the making of his argument and then in reply.  Rhetorically he asked could I, as the judge manager of this case and determining financial interests, disregard the affidavit of T.  Positively I find that I can answer that question in the affirmative.  I have no difficulty in wholly disregarding that affidavit because it will not be relied upon by the wife.  The evidence will be given by another professional witness and it will largely be the testing of that witness in cross‑examination and the future evidence and submissions that will determine what appropriate orders are or should be made in the interests of justice.

10. I am also attracted to the submission of senior counsel for the wife that the evidence could be before the court in another form, either by way of source documents or documents in the public record as for example are the financial accounts of the A Group Ltd to 31 December 2004.  An issue that hereafter may arise is whether the husband has dealt with, or whether the servants or agents of the husband have dealt with, or perhaps others, the shareholding that he as a director then disclosed to the Australian Stock Exchange as at 31 December 2004 in those published financial accounts. 

11. That is not a matter to which I have turned my mind or give judgment.  It clearly is another matter for another day in another hearing, and on evidence.  Senior counsel for the wife’s point simply is at this stage, there is or could be documentary evidence other than from F before the court to prove financial and beneficial interests in and ownership of those shares in dispute, and which were first identified by the husband himself in paragraph 41 of his initial affidavit.

12. Having regard to the substantial authorities, I am particularly conscious of the need to determine a just, fair and proper outcome.  If I was of the view that there was a real or a perceived apprehension of bias, I would so find.  If T was himself to give specific evidence and be subject of cross‑examination, I may likely have stood aside as was to be the case yesterday.  If however T, as a professional witness, is now to be excluded from the case, and evidence and cross‑examination is to be of others, it is their evidence and their cross‑examination, and such other evidence as the parties may call that will determine the contentious issue in this case of and related to the composition of the pool of assets, other interim issues and eventually a just and equitable alteration of property interests.

13. I do not find myself in any way compromised or embarrassed.  I specifically find that I will have no difficulty or issue whatsoever in wholly putting to one side the affidavit and report of T, as it is no longer before the court.  The husband should in no way feel that he will be prejudiced or I will have any form of pre-judgment, bias or influence or in any way be affected by that now withdrawn affidavit, and I mean withdrawn in the sense that it is not relied upon.  It of course remains on the court file.

14. I am also acutely aware, as I indicated at the commencement of these extempore reasons, that T’s affidavit was allowed to remain before the court and submissions were given in the subpoena issue yesterday, and I have a judgment reserved without objection on those issues and on the basis of that affidavit.  There has to be some consistency and regularity in a situation where the husband is personally involved in taking an objection on the advice of senior counsel, but otherwise when, as one of three directors, there was not the slightest issue raised with the court or concern by counsel appearing for the corporate entity yesterday.  That should not be taken as saying that I am of the view that there should have been any concern echoed by Mr Houghton yesterday.  He fully, fairly and very ably conducted the case on behalf of V Pty Ltd.

15. Accordingly and for those brief extempore reasons I am wholly confident that justice can be fairly and properly discharged, that I should not disqualify myself and that I should proceed to hear in the available time any and all applications in an order that I will determine after hearing counsel. 

16. I will have these reasons for judgment transcribed, placed upon the court file and made available to counsel. 

17. I therefore order:

    1THAT the oral application of the husband made by leave this day for me to disqualify myself in the hearing of these interim proceedings be dismissed.

    2THAT the extempore reasons for judgment delivered this day be transcribed, be placed upon the Court file and be made available to the parties.

    IT IS CERTIFIED

    3THAT pursuant to Rule 19.50 of the Family Law Rules this matter reasonably required the attendance of Senior Counsel and Counsel for each of the husband and wife.

I certify that the preceding paragraphs are
a true copy of the reasons for judgment herein
of The Honourable Justice Young

………………………………………………………..
Associate: 
Date:  16 August 2006