Hillier v Martin (No 19)
[2024] FCA 210
•8 March 2024
FEDERAL COURT OF AUSTRALIA
Hillier v Martin (No 19) [2024] FCA 210
File number(s): SAD 113 of 2020 Judgment of: O'SULLIVAN J Date of judgment: 8 March 2024 Catchwords: EVIDENCE – Legal Professional Privilege – where fourth to sixth respondents claimed various documents to be subject to legal professional privilege on behalf of the first respondent – whether by reason of an iniquity the documents have either had privilege displaced or never attracted the privilege in the first place – whether there is prima facie evidence of iniquity – order made for production of documents and inspection
PRACTICE AND PROCEDURE – application for an order that the presiding judge be recused on the grounds of both actual and apprehended bias – first respondent alleging bias on the basis that the presiding judge had previously heard and issued a decision on an interlocutory application involving the applicant in another Court – where no factual findings were made in that decision – no cogent (or any) evidence of actual bias – no material identified such that a fair minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide – application dismissed
Legislation: Competition and Consumer Act 2010 (Cth), Sch 2 Australian Consumer Law, ss 237, 243
Evidence Act 1995 (Cth), ss 55, 118, 119
Federal Court of Australia Act 1976 (Cth), ss 35A(7)(b), 37M(1), 37N(1), 37N(4), 51A
Federal Court Rules 2011 (Cth), r 20.17(2)(c)
Trustee Act 1936 (SA)
Cases cited: AKS Investments Pty Ltd v Queensland Police Service [2018] QSC 4
Attorney-General (N T) v Maurice [1986] HCA 80; (1986) 161 CLR 475
Attorney-General for the Northern Territory of Australia v Kearney [1985] HCA 60; (1985) 158 CLR 500
AWB Ltd v Cole [2006] FCA 571; (2006) 152 FCR 382
Bullivant v Attorney-General (Vict) [1901] AC 196
Carter v Managing Partner, Northmore Hale Davy & Leake [1995] HCA 33; (1995) 183 CLR 121
Charisteas v Charisteas [2021] HCA 29; (2021) 273 CLR 289
Commissioner of Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3; (1997) 188 CLR 501
Commissioner of Taxation (Cth) v Pratt Holdings Pty Ltd (2005) 225 ALR 266, 279
Craig & Ors v Hillier & Ors [2018] SADC 114
Crescent Farm (Sidcup) Sports Ltd. v. Sterling Offices Ltd. [1972] Ch. 553
Ebner v Official Trustee in Bankruptcy [2000] HCA 63; 205 CLR 337
ESSO Australia Resources Ltd v Federal Commissioner of Taxation [1999] HCA 67; (1999) 201 CLR 49
Grant v Downs [1976] HCA 63; (1976) 135 CLR 674
Hillier v Martin (No 2) [2021] FCA 509
Hillier v Martin (No 11) [2022) FCA 407
Hillier v Martin(No 12) [2022] FCA 952
Hillier v Martin (No 13) [2022] FCA 939
Hillier v Martin (No 15) [2022] FCA 996
KadlungaProprietors v Electricity Trust of South Australia (1985) 39 SASR 410
Martin v Hillier [2021] FCA 800
Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17, (2001) 205 CLR 507
O’Rourke v Darbishire [1920] AC 581
QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] HCA 15; 409 ALR 65
R v Australian Stevedoring Industry Board; Ex Parte Melbourne Stevedoring Co-Pty Ltd [1953] HCA 22, (1953) 88 CLR 100
R v Bell: Ex parte Lees [1980] HCA 26; (1980) 146 CLR 141
R v Kearney; Ex Parte Attorney-General (NT) (1984) 3 FCR 534
R v Rich (Ruling No. 21) [2009] VSC 32
Russell v Jackson (1851) 9 Ha, 68 ER 558
Southern Equities Corporation Ltd (in liq) v Arthur Anderson & Co (1997) 70 SASR 166
Sun Zhan Qui v Minister for Immigration and Ethnic Affairs [1997] FCA 1488; (1997) 81 FCR 71
The Daniels Corporation Inter-National Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; (2002) 213 CLR 543
Webb v The Queen (1994) 181 CLR 41, [1994] HCA 30
Zaltni v Minister for Immigration and Multicultural Affairs [2000] FCA 399
Division: General Division Registry: South Australia National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 233 Date of last submission: 22 December 2023 Dates of hearings: 18, 25, 26 October 2023, 8 December 2023, 7 February 2024 Counsel for the Applicant: Mr R Whitington KC with Ms H Doyle Solicitor for the Applicant: Sykes Bidstrup Counsel for the First and Second Respondents: No appearance Counsel for the Third Respondent: No appearance Counsel for the Fourth, Fifth and Sixth Respondents: Mr D Blight KC with Mr T Kentish Solicitor for the Fourth, Fifth and Sixth Respondents: Gilchrist Connell ORDERS
SAD 113 of 2020 BETWEEN: JAMES HILLIER
Applicant
AND: VICTORIA MARTIN
First Respondent
NORDBURGER OPERATIONS PTY LTD
Second Respondent
ERIK VARI PTY LTD (and others named in the Schedule)
Third Respondent
ORDER MADE BY:
O'SULLIVAN J
DATE OF ORDER:
8 MARCH 2024
THE COURT ORDERS THAT:
Legal professional privilege application
1.The documents identified in the Lists of Documents served on the applicant by his solicitor by the fourth, fifth and sixth respondents on 2 June 2023 as being the subject of a claim to legal professional privilege in favour of the first respondent (and any entity or entities simply described therein as Nordburger) are not the subject of legal professional privilege.
2.The first, fourth, fifth and sixth respondents are to produce for inspection by the applicant, those documents asserted in the Lists of Documents referred in order 1 herein as being subject to a claim to legal professional privilege, forthwith.
3.Subject to order 4, the fourth, fifth and sixth respondents are to pay the costs of and incidental to the applicant’s application filed 18 August 2023, such costs to be agreed or taxed.
4.The fourth, fifth and sixth respondents have liberty to apply within seven days of the date of publication of these reasons for any variation to the order for costs made in order 3 herein.
Recusal application
5.The first respondent’s recusal application filed 24 November 2023 is dismissed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
O’SULLIVAN J:
These reasons address two interlocutory applications. The first in time is an interlocutory application brought by the applicant (Mr Hillier) for orders that documents claimed by the fourth to sixth respondents (together NW Parties) to be the subject of legal professional privilege in favour of the first respondent (Ms Martin) and any entity or entities simply described as “Nordburger” are not the subject of the privilege (LPP application).
The second, filed by Ms Martin on 24 November 2023, sought a number of orders including order 5 that I am:
“… disqualified from presiding over the within proceedings, on the grounds set forth in the First Respondent's Affidavits of 17 October 2023, 25 October 2023, and 22 November 2023, respectively, and the First Respondent's Submissions dated 18 October 2023”.
(Recusal application)
These reasons address the LPP application, but only that part of Ms Martin’s interlocutory application comprising the Recusal application.
Issues
The issue that arises on the LPP application is whether by reason of an iniquity, the documents claimed to be the subject of legal professional privilege have either had that privilege displaced or never attracted the privilege in the first place.
It is for the reasons which follow that there will be an order requiring the NW Parties to produce for inspection those documents asserted to be the subject of legal professional privilege in favour of Ms Martin, or any entity or entities simply described as Nordburger in the list of documents in which legal professional privilege is claimed.
The issue that arises on the Recusal application is whether I should recuse myself from hearing these applications and the proceedings generally.
At a case management hearing on 7 February 2024, I delivered my decision on the Recusal application in which I dismissed the application and indicated I would publish reasons for doing so. These are those reasons.
PROCEDURAL BACKGROUND
Regrettably, it is necessary to set out the procedural history to these two applications.
Ms Martin is unrepresented in this matter and has not attended, nor been represented, at any case management hearing or any other type of hearing since I was allocated this matter on 1 September 2022. The second respondent, Nordburger Operations Pty Ltd, is also unrepresented and has not appeared at any case management hearing since November 2022. Operations is a company which has as its sole director Thomas Patrick Martin (Mr Martin) who is the husband of Ms Martin. Prior applications made by Mr Martin, who is legally qualified and a potential witness, for him to represent Operations have been refused. Ms Martin is Mr Hillier’s sister.
At a case management hearing held on 3 August 2023, Mr Hillier foreshadowed an interlocutory application challenging the claim by the NW Parties on behalf of Ms Martin to legal professional privilege in respect of approximately 7000 discovered documents.
The challenge to the claim to legal professional privilege was indicated by Mr Hillier as being based on iniquity. Accordingly, it was never contended that it would be necessary for anyone to inspect the approximately 7000 documents.
Since I had no availability to hear any interlocutory application prior to the commencement of the 5 week trial in this matter listed to commence on 23 October 2023, I referred any interlocutory application challenging the claim to legal professional privilege for hearing and determination by a Registrar of this Court.
I also ordered that a copy of the transcript be made available to Ms Martin. That transcript recorded my unavailability to hear any interlocutory application prior to trial.
On 15 August 2023, Mr Hillier filed the LPP application in which he challenged the claim to legal professional privilege on the grounds of iniquity.
On 22 August 2023, the Registrar of this Court to whom the LPP interlocutory application had been assigned, held a case management hearing at which time Ms Martin did not attend. The Registrar listed the LPP application for hearing on 6 September 2023 at 2.15pm (AEST).
Approximately 45 minutes before the hearing on 6 September 2023 was due to commence, Ms Martin applied by email, pursuant to s 35A(7)(b) of the Federal Court of Australia Act 1976 (Cth), for the LPP application to be heard by a judge of the Court. That being the case, the Registrar was unable to hear the interlocutory application.
It is not apparent why Ms Martin waited until approximately 45 minutes prior to the hearing before the Registrar was due to commence before making her request that the matter be heard by a judge and no explanation has been proferred by her.
In any event, the application by Ms Martin that a judge hear the LPP application had (at least) three consequences:
(1)First, since no other judge of the Court was available to hear the LPP application it was not until I became available in the week commencing 16 October 2023 that the LPP application could be heard;
(2)Second, if Mr Hillier was successful on the LPP application it would not be possible for his solicitor and counsel to inspect any of the approximately 7000 documents over which legal professional privilege has been claimed prior to trial; and
(3)Third, the inevitable consequence was that the trial listed to commence on 23 October 2023 would have to be vacated.
On 12 September 2023, I made timetabling orders for the hearing of the LPP application in which the matter was listed for argument on 18 October 2023 at 10.00am (ACDT) before me. Orders were also made requiring, amongst other things, Ms Martin to file and serve any written outline of submissions, limited to 20 pages, together with any affidavits in response by on or before 2 October 2023.
On 27 September 2023, I ordered by the consent of Mr Hillier and the NW Parties, that the trial by adjourned. No response to the request for the consent of Ms Martin or Operations to the adjournment of the trial was received by either Mr Hillier or the NW Parties.
No submissions or affidavits were filed by Ms Martin by 2 October 2023.
On the evening of 17 October 2023, Ms Martin sent an email to the Court’s Registry attaching initially an unsworn affidavit and then a short time later a sworn version of the same affidavit which she had affirmed that day. The affidavit requested that the hearing of the LPP application listed on 18 October 2023 be vacated.
When the matter was called on on 18 October 2023, there was no appearance for or on behalf of Ms Martin.
I considered Ms Martin’s affidavit and heard submissions from Mr Hillier and the NW Parties in relation to the requested adjournment. Save for a request in the affidavit for the adjournment, no interlocutory application was filed to vacate the hearing of 18 October 2023. I declined to adjourn the hearing: ss 37M(1), 37N(1) and 37N(4) of the Act.
At 10.08am on the morning of 18 October 2023, after the hearing had commenced, Ms Martin sent an email to my chambers attaching an unsealed set of submissions relating to the LPP application being heard at that time.
I refused to accept the submissions emailed by Ms Martin on 18 October 2023 on the basis that Ms Martin was in breach of the Court’s orders which required any submissions to be filed and served by 2 October 2023.
The hearing did not conclude on 18 October 2023 and was adjourned to continue on 25 October 2023.
At 4.21pm on Wednesday 25 October 2023, 9 minutes before the close of the hearing that day, Mr Martin, who is a non-party, sent an email to the Court’s Registry attaching an interlocutory application and requesting that the interlocutory application be filed. That interlocutory application sought, amongst other things, leave for Mr Martin to file evidence and written submissions in response to allegations made against him by Mr Hillier in support of the LPP application.
In 2022, Mr Martin had filed an interlocutory application seeking the same orders but on that occasion in relation to an application made by Mr Hillier to join further parties. I declined to grant leave on that occasion: Hillier v Martin (No 13) [2022] FCA 939. In the circumstances, I directed the Registrar not to accept Mr Martin’s 25 October 2023 interlocutory application for filing.
The LPP application hearing concluded on 26 October 2023 at which time I reserved my decision.
On 24 November 2023, Ms Martin filed the Recusal application.
I listed the Recusal application for a case management hearing on 8 December 2023. Ms Martin did not attend on that occasion, having notified the Registry shortly prior to the hearing that she would not be attending.
On 8 December 2023, I noted on the orders that:
(a)There had been no attendance by Ms Martin today, with Ms Martin emailing the Registry informing them she would not attend today, explaining that she had childcare responsibilities;
(b)The Court has endeavoured to allow sufficient time between the filing of any interlocutory applications and the return date for the purposes of allowing Ms Martin to make any such arrangements as are necessary for her childcare responsibilities;
(c)Ms Martin has failed to do so and has not applied to appear by electronic means today;
(d)This litigation cannot be conducted by Ms Martin filing interlocutory applications and then not attending; and
(e)On this occasion, the Court will make orders to address Ms Martin’s application that I recuse myself from hearing this matter.
I made timetabling orders on 8 December 2023 in relation to the Recusal application and adjourned further consideration of the other orders sought in Ms Martin’s interlocutory application filed 24 November 2023 to a case management hearing on 7 February 2024. Order 4 of the orders provided:
The balance of the first respondent’s interlocutory application filed 24 November 2023 is adjourned to a case management hearing at 9.00am (ACDT) on Wednesday 7 February 2024 at which time the first respondent is to appear or the application will be dismissed.
At the adjourned case management hearing on 7 February 2024, Ms Martin did not appear. Ms Cohley of counsel attended as a friend of the Court. As I have noted above at [7], on that occasion I dismissed the Recusal application and indicated I would publish reasons.
As a result of Ms Martin failing to appear on her interlocutory application on 7 February 2024, I dismissed the balance of Ms Martin’s interlocutory application that day.
THE DISPUTE ON THE PLEADINGS
These proceedings were commenced in August 2020. At that time, Ms Martin was the sole respondent. By orders made on 1 July 2021, Operations, whose sole director is Mr Martin, was joined as the second respondent. Mr Martin is not a party to the proceedings. The NW Parties were joined on 20 September 2022.
The current version of the statement of claim is the fifth amended statement of claim. The NW Parties have been joined as parties to the action since the third amended statement of claim, however that does not affect the pleaded dispute as between Mr Hillier, Ms Martin and Operations.
The dispute on the pleadings as between Mr Hillier, Ms Martin and Operations, as it existed in the then third amended statement of claim was summarised, helpfully, by Charlesworth J in Hillier v Martin(No 12) [2022] FCA 952 at [10]-[17]. That summary, updated and added to in order to reflect the current pleading in the fifth amended statement of claim (5ASOC), is as follows.
The primary dispute, as between Mr Hillier, Ms Martin and Operations concerns the ownership of a hamburger restaurant business trading as Nordburger (the Nordburger business). It is common ground that the Nordburger business is presently conducted, and its assets are otherwise held, by a number of companies that together may be referred to as the Nordburger group. Within that structure, revenue from the hamburger restaurants is or has been derived by various trading entities each of which conducts the business of a hamburger restaurant. Certain expenses of the trading entities (including wages) are borne by a non-trading entity, Nordburger Pty Ltd. Ms Martin is a Director of the trading entities and Nordburger and is described in business records as having the title “Managing Director”.
As identified below, on any party’s case, Operations holds the shares pursuant to a trust known as the Nordburger Holdings Trust (NH Trust) and not for its own benefit or the benefit of its shareholder(s).
Mr Hillier pleads that:
(1)From 2012, there existed a joint venture agreement (Nordburger Joint Venture Agreement) between Mr Hillier, Ms Martin and Mr Andrew Craig on behalf of the third respondent, Erik Vari Pty Ltd, an entity controlled by Mr Craig’s father, Mr Robert Craig (Craig Interests) pursuant to which the Nordburger business traded (Joint Venture): 5ASOC, [3], [10], [10(p)].
(2)At that time, the parties’ interests in the Joint Venture were 50% to Mr Hillier, 30% to Mr Craig and 20% to Ms Martin: 5ASOC [12.5]-[12.5.3].
(3)Under an implied term of the Nordburger Joint Venture Agreement, the parties were entitled to enjoy the profits of the Joint Venture according to their shares in the Joint Venture and Mr Hillier was entitled to participate in the control of the Joint Venture to the extent of his interest: 5ASOC, [14], [14.1], [14.2].
(4)In November 2014, the parties agreed to a variation of their interests in the Joint Venture including by way of Mr Hillier offering to Ms Martin a 10% share as a gift and Mr Craig on behalf of the Craig Interests selling a 5% share in the Joint Venture: 5ASOC, [15.2.1].
(5)In March 2015, Heads of Agreement were executed by Mr Hillier, Ms Martin and Mr Craig confirming matters they had previously discussed as to their ownership interests, reflecting 40% to Mr Hillier, 35% to Ms Martin and 25% to Mr Craig. Mr Hillier alleges the gift offered or made to Ms Martin has no effect in law or equity because of other pleaded matters, such that Mr Hillier retains a 50% interest: 5ASOC, [16] -[16.3], [17]-[18].
(6)On 14 March 2013, Nordburger was incorporated at which time Ms Martin became its sole director: 5ASOC, [19.2], [19.4].
(7)Ms Martin acquired the legal interest in all of the 100 issued shares in Nordburger on the terms of the Nordburger Joint Venture Agreement: 5ASOC, [19.3].
(8)Through entities which Mr Hillier owned, held an interest in or controlled, Mr Hillier caused further contributions of money to be made to or for the benefit of the Joint Venture in the sum of approximately $342,000. That sum was primarily devoted to the establishment of a Nordburger restaurant in Norwood, South Australia: 5ASOC, [19.8].
(9)Ms Martin made no monetary contribution to the establishment of the Nordburger restaurant in Norwood and save for an initial capital contribution in or about November 2011 prior to the formation of the Joint Venture, has contributed no capital of her own to the Joint Venture: 5ASOC, [20].
(10)By virtue of the Nordburger Joint Venture Agreement, Ms Martin has been the trustee “of the businesses and other assets and income” of the Joint Venture for the benefit of herself, Mr Hillier and Mr Craig in accordance with the terms of the Nordburger Joint Venture Agreement: 5ASOC, [21].
(11)By virtue of her position as trustee of the businesses and other assets and income of the Joint Venture, Ms Martin has held the shares in Nordburger and any other corporate entities established by her to conduct the businesses of the Joint Venture on trust for herself, Mr Hillier and Mr Craig in accordance with the terms of the Nordburger Joint Venture Agreement: 5ASOC, [22].
(12)Ms Martin owes fiduciary duties to Mr Hillier, both by virtue of her position as trustee and by virtue of her position as a joint venturer, namely: a duty to act in the best interests of Mr Hillier; a duty not to profit from her position as trustee or fiduciary without the informed consent of the other joint venturers; and a duty to avoid a conflict between her own interests and her duties as trustee or fiduciary without the informed consent of the other joint venturers: 5ASOC, [23]-[24.3].
(13)In addition to the Norwood restaurant, additional restaurants were established in South Australia at Hindmarsh, Frewville and Chinatown: 5ASOC, [25]-[25.3].
(14)There have been attempts to establish and document a formal structure for the Joint Venture in accordance with its terms. In the course of those attempts, Ms Martin represented to Mr Hillier that he had at least a 40% interest in the Joint Venture and its assets and businesses, that she held no more than a 35% interest, and that any interest she had in Nordburger was held on terms that reflected the ownership interests in the Joint Venture and its assets and businesses (equity representations): 5ASOC, [26]-[27.3].
(15)The equity representations embodied a representation that Mr Hillier was entitled to receive payment of a share of the Joint Venture profits as and when they were derived proportionate to his share in the Joint Venture, and to participate in the control of the Joint Venture as and when the occasion arose, with an effective participation proportionate to his share in it: 5ASOC, [31]-[31.2].
(16)On 28 April 2016, Ms Martin telephoned Mr Hillier and requested a meeting take place at the offices of the fifth respondent (Norman Waterhouse (A Firm) (NW)) to discuss the best means to document the equitable interests in the Joint Venture and possible capital gains tax ramifications. Ms Martin represented to Mr Hillier that she and Mr Martin had been taking a further legal opinion on the restructure of the Joint Venture (meeting invitation conduct): 5ASOC, [33]-[34].
(17)On 29 April 2016, Mr Hillier attended a meeting at the offices of Norman Waterhouse joined by a number of others, including Ms Martin, Mr Martin and the fourth respondent (Stephen Bradley Williams), during which a number of statements were made by Mr Williams and Mr Martin. At the meeting, Mr Hillier was presented with a “Deed Poll”: 5ASOC, [35]-[43] (29 April 2016 meeting conduct).
(18)The 29 April 2026 meeting, and Ms Martin’s invitation to Mr Hillier to attend that meeting, formed part of a scheme or plan devised by Ms Martin, Mr Martin and Mr Williams to take control of the Nordburger assets and businesses held within the Joint Venture from Mr Hillier and Mr Craig and thereafter to claim ultimate economic ownership of those assets and business for Ms Martin (“the Plan”): 5ASOC, [45A].
(19)The Plan was dishonest by the ordinary standards of reasonable and honest people and between 12 January 2016 and 2 December 2019 Ms Martin, Mr Martin and Mr Williams wrongfully and by unlawful means conspired and combined together to create and execute the Plan: 5ASOC, [56]-[63]; [66]-[77].
(20)In 2016, Mr Hillier executed the Deed Poll. Mr Hillier was induced to execute the Deed Poll in circumstances amounting to economic duress, undue influence, unconscionable conduct in equity and within the meaning of the Australian Consumer Law as found in Schedule 2 of the Competition and Consumer Act 2010 (Cth) (ACL) as well as misleading and deceptive conduct such that it is void at law or liable to be set aside: 5ASOC, [41], [47]-[51.3].
(21)Ms Martin procured and agreed in the conduct of the 29 April 2016 meeting, including the presentation of the Deed Poll, as a consequence of which she engaged in conduct incompatible with the equity representations: 5ASOC, [43], [44].
(22)By no later than 29 April 2016, Ms Martin claimed to be the ultimate economic owner of the Joint Venture and its assets and businesses to the exclusion of any legal or equitable interest of Mr Hillier in the Joint Venture, including by engaging Mr Williams and NW to prepare what is known as the “William Buck Brief” which was used by Ms Martin in the meeting on 29 April 2016: 5ASOC, [45].
(23)The 29 April 2016 meeting conduct was designed and intended to, amongst other things, isolate Mr Hillier from Mr Craig and the Craig interests: 5ASOC, [45E.3].
(24)As a consequence of the matters in 5ASOC [45E], Mr Hillier was precluded from liaising with Mr Craig and the family of Robert Craig in relation to the repayment of monies for an investment in a hospitality venture called “The Store”, resulting in the breakdown in his relationship with Mr Craig and the family of Robert Craig: 5ASOC, [45F.2].
(25)Robert Craig instituted District Court of South Australia proceedings (Action Number 423 of 2017) (District Court proceedings) naming Mr Hillier and other entities (not Ms Martin) as defendants in relation to the repayment of monies invested in The Store to Mr Craig’s parents and an associated company: 5ASOC, [45F.3].
(26)Mr Hillier defended the District Court proceedings on the basis of instructions, advice and material supplied by Mr Martin and Mr Williams, including the William Buck Brief: 5ASOC, [45F.4].
(27)The District Court proceedings were resolved at a mediation but at unnecessary legal expense totalling approximately $420,789 (Craig litigation conduct): 5ASOC, [45F.6]-45F.9].
(28)Mr Hillier received payments out of the income of the Joint Venture, including payments of $4,000 per week between November 2016 and November 2019. The payments were by way of weekly distributions and not pursuant to a consultancy agreement prepared by Nordburger (upon which the respondents rely): 5ASOC, [53]-[55].
(29)Since April 2019, Ms Martin has taken or assumed the sole and effective control of the Joint Venture and its assets and its businesses to the exclusion of Mr Hillier. The assumption of control by Ms Martin was undertaken in pursuance of the Plan: 5ASOC, [56], [56A].
(30)Ms Martin’s assumption of control constitutes a breach of the Nordburger Joint Venture Agreement, a breach of trust, a breach of her fiduciary obligations and contraventions of the ACL: 5ASOC, [57].
(31)Since April 2016, the Joint Venture has earned profits which have been received and dealt with by Ms Martin: 5ASOC, [61].
(32)Since 6 October 2019, to on or about 5 October 2021, Ms Martin and thereafter Operations, have caused the funds, assets and businesses belonging to the Joint Venture to be depleted without the approval of the joint venturers: 5ASOC, [62].
(33)Ms Martin has caused Nordburger to pay to herself a salary of $208,000 per annum and to Mr Martin approximately $50,000 per annum without providing services to the Joint Venture commensurate with such as to justify such payments without approval of the joint venturers as well as making other payments, including to NW and the sixth respondent (Norman Waterhouse Lawyers Pty Ltd (NWPL)), without the approval of the joint venturers: 5ASOC, [62.1], [62.2].
(34)The depletion of the funds, assets and businesses of the Joint Venture was a breach of trust, a breach of the Nordburger Joint Venture Agreement by Ms Martin, a breach of fiduciary duties, a departure from the equity representations and contraventions of the ACL: 5ASOC, [63]-[63.5].
(35)In January 2020, Ms Martin informed Mr Hillier for the first time that she had restructured the Nordburger business by utilising a trust structure that provided for him as a beneficiary (Restructure): 5ASOC, [66].
(36)In response to a request for information Mr Hillier had made under the Trustee Act 1936 (SA), he was provided with documentation relating to a new discretionary trust established on 29 October 2019, which is the NH Trust: 5ASOC, [68].
(37)The documentation provided to Mr Hillier records:
(a)The establishment of Operations (a company then wholly owned and controlled by Ms Martin): 5ASOC, [69.3];
(b)The appointment of Operations as trustee of the NH Trust on 2 December 2019: 5ASOC, [69.3];
(c)The transfer by Ms Martin of intellectual property owned by the Joint Venture to Operations: 5ASOC, [69.5];
(d)Ms Martin claims to be the ultimate economic owner of the assets purportedly the subject of the NH Trust, which assets are properly the assets of the Joint Venture: 5ASOC, [69.6]; and
(e)NWPL prepared the transactional documents for the matters in (a)-(d) above: 5ASOC, [69.7].
(38)The actions recorded in the documents were undertaken by Ms Martin and were undertaken:
(a)In breach of the Nordburger Joint Venture Agreement;
(b)In breach of trust;
(c)In breach of Ms Martin’s obligations as a fiduciary;
(d)At a time when Ms Martin was the sole director and shareholder of Nordburger and Operations and their controlling mind; and
(e)In pursuance of the Plan: 5ASOC, [70]-[70.6].
(39)Ms Martin first instructed NWPL to advise upon and implement the Restructure in June or July 2019 but had concealed that fact from Mr Hillier: 5ASOC, [69A].
(40)The actions recorded in the documents were of no valid effect on the terms and operations of the Nordburger Joint Venture Agreement and the Joint Venture: 5ASOC, [70.4].
(41)The claim against the NW Parties is pleaded as knowing assistance in each of Ms Martin’s breaches of fiduciary duty and/or breaches of trust.
Third amended originating application
The relief sought is that specified in the third amended originating application filed on 30 September 2022 in which:
A. As against Ms Martin and Operations; declarations:
(a)That Mr Hillier and Ms Martin are bound by the Nordburger Joint Venture Agreement;
(b)As to the proportionate shares in which Mr Hillier and Ms Martin hold their interests in the Joint Venture, its assets and businesses;
(c)That at all material times Ms Martin has held the shares in Nordburger on trust on the terms of the Nordburger Joint Venture Agreement;
(d)That Ms Martin holds, and at all material times held, the shares in Operations on trust on the terms of the Nordburger Joint Venture Agreement; and
(e)That Operations holds the shares in Nordburger and the intellectual property rights purportedly transferred to it by Nordburger (which transfer is not admitted) on trust on the terms of the Nordburger Joint Venture Agreement.
B. In relation to the Deed Poll:
(a)A declaration that the Deed Poll is void, and orders that it be set aside in equity or pursuant to s 237 of the ACL.
C. Further Orders
(a)Further orders sought include that Ms Martin provide:
(i)An accounting to Mr Hillier in relation to the conduct of the businesses of the Joint Venture since 31 December 2015;
(ii)An accounting to Mr Hillier of all income, profits, and the disposition of profits and assets, of or derived by a trust known as the Hillier PIAH Trust since 31 December 2015; and
(iii)An accounting to Mr Hillier of all income, profits, and the disposition of profits and assets, of or derived by the NH Trust since its inception in or about October 2019;
(b)That Operations provide an accounting to Mr Hillier of all income, profits, and the disposition of profits and assets, of or derived by the NH Trust since its inception in or about October 2019;
(c)An order pursuant to s 243 of the ACL and/or s 243 of the Australian Consumer Law (SA) that Ms Martin refund any monies and return any property which she has taken from or caused to be taken from the Joint Venture, Nordburger, Operations, the NH Trust, or any other corporate entity established to conduct the business of the Joint Venture in excess of any amount properly due to her for any services she has performed;
(d)Ms Martin pay Mr Hillier:
(i)Damages for breach of the Nordburger Joint Venture Agreement;
(ii)Equitable compensation for breach of trust and/or fiduciary duty; and
(iii)Interest pursuant to s 51A of the Act;
(e)Ms Martin and the NW Parties pay Mr Hillier damages; and
(f)The NW Parties pay equitable compensation to Mr Hillier in an amount to be assessed.
Without doing a disservice to Ms Martin, in broad summary, Ms Martin denies the existence of the Joint Venture, which is undocumented. She alleges that the establishment of the NH Trust, the appointment of Operations as trustee, and the transfer of property to it were actions taken lawfully by her, including in her capacity as sole director of Nordburger. She alleges that since 2 December 2019 “all rights, title and interests in the Nordburger business” have been held by Operations as trustee of the NH Trust. She alleges that Mr Hillier’s only interest in the Nordburger business is that of a beneficiary of the discretionary NH Trust.
It is common ground that the primary beneficiaries of the NH Trust (if it be valid) are Ms Martin and Mr Hillier. The secondary beneficiaries also include Mr Martin, who is now the sole director of Operations as trustee. Distributions under the terms of the NH Trust (if it be valid) are at the discretion of Operations as trustee and so effectively within the control of Mr Martin.
THE RECUSAL APPLICATION
The Recusal application was filed one month after the argument on the LLP application. It is framed in terms of me being “disqualified” from presiding over these proceedings and there is suggestion in the submissions filed by Ms Martin of both actual and apprehended bias.
Since such an application goes to the fundamental principle that a judge must bring an impartial mind to the resolution of the question the judge is required to decide, it is a threshold question. Accordingly, I set out my reasons for dismissing the Recusal application first.
Actual bias - principles
A claim of actual bias requires cogent evidence: R v Australian Stevedoring Industry Board; Ex Parte Melbourne Stevedoring Co-Pty Ltd [1953] HCA 22, (1953) 88 CLR 100, 116 (Dixon CJ, Williams, Webb and Fullagar JJ).
In Sun Zhan Qui v Minister for Immigration and Ethnic Affairs [1997] FCA 1488; (1997) 81 FCR 71 (Wilcox, Burchett and North JJ), North J described actual bias in these terms: at p 134
Actual bias exists where the decision-maker has prejudged the case against the applicant, or acted with such partisanship or hostility as to show that the decision-maker had a mind made up against the applicant and was not open to persuasion in favour of the applicant.
(Citations omitted)
In R v Rich (Ruling No. 21) [2009] VSC 32, [7] Lasry J said:
A party asserting actual bias on the part of a decision-maker carries a heavy onus; the allegation must be “distinctly made and clearly proved”. It has been said, and I agree, that a finding of bias is a “grave matter” and cannot be made lightly. Apart from corruption, it is hard to think of a more serious allegation that can be made against a judge.
(Citations omitted)
In Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17, (2001) 205 CLR 507, 519 at [35]-[36], Gleeson CJ and Gummow J referred with approval to statements made by French J (as his Honour then was) at first instance in which his Honour had cited with approval judicial statements that actual bias involves a pre-judgement and an applicant must show that the decision maker “had a closed mind to the issues raised and was not open to persuasion by the applicant’s case” and that actual bias exists where “the decision-maker has prejudged the case against the applicant, or acted with such partisanship or hostility as to show that the decision-maker had a mind made up against the applicant and was not open to persuasion in favour of the applicant”.
In Zaltni v Minister for Immigration and Multicultural Affairs [2000] FCA 399, the Full Court (Einfeld, Lindgren and Tamberlin JJ) said in relation to the evidentiary requirement for a finding of actual bias: at [59]
A finding of actual bias should not be made lightly and cogent evidence is required; cf R v Australian Stevedoring Industry Board; ex parte Melbourne Stevedoring Co Pty Ltd (1953) 88 CLR 100 at 116 per Dixon CJ, Williams, Webb and Fullagar JJ; Sun (FC) at 123; Jia Le Geng [1999] FCA 951 at [104] per Cooper J and cases there cited. On the other hand, too high an evidentiary requirement might make impossible the presentation and proof of a justifiable case.
As the authorities referred to above show, Ms Martin must demonstrate by reference to cogent evidence that I have pre-judged the action, such that as noted by Gleeson CJ and Gummow J in Jia Legeng referred to at [50] above, I have “… a closed mind to the issues raised and am not open to persuasion by [the respondents] case”; or I have “… prejudged the case against [the respondents] or acted with such partisanship or hostility as to show that [I] had a mind made up against [the respondents] and was not open to persuasion in favour of [the respondents].” (brackets provided)
Apprehended bias - principles
The principles applying to apprehended bias are different to those applying to actual bias.
In QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] HCA 15; 409 ALR 65 at [37] (Kiefel CJ and Gageler J), the High Court affirmed the test for apprehended bias in Ebner v Official Trustee in Bankruptcy [2000] HCA 63; 205 CLR 337 as being that a judge is disqualified if:
… a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide. The “double might” serves to emphasise that the criterion is concerned with “possibility (real and not remote), not probability”.
(Citations omitted)
See also Gordon J at [67], Gleeson J at [221] and Jagot J at [274].
Kiefel CJ and Gageler continued: at[38]
Application of the criterion was identified in Ebner, and has been reiterated, logically to entail: (1) identification of the factor which it is said might lead a judge to resolve the question other than on its legal and factual merits; (2) articulation of the logical connection between that factor and the apprehended deviation from deciding that question on its merits; and (3) assessment of the reasonableness of that apprehension from the perspective of a fair-minded lay observer.
In Charisteas v Charisteas [2021] HCA 29; (2021) 273 CLR 289 the High Court said: at [11]-[13]
11.The apprehension of bias principle is that “a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide”. The principle gives effect to the requirement that justice should both be done and be seen to be done, reflecting a requirement fundamental to the common law system of adversarial trial - that it is conducted by an independent and impartial tribunal. Its application requires two steps: first, “it requires the identification of what it is said might lead a judge ... to decide a case other than on its legal and factual merits”; and, second, there must be articulated a “logical connection” between that matter and the feared departure from the judge deciding the case on its merit. Once those two steps are taken, the reasonableness of the asserted apprehension of bias can then ultimately be assessed.
12.As five judges of this Court said in Johnson v Johnson, while the fair-minded lay observer “is not to be assumed to have a detailed knowledge of the law, or of the character or ability of a particular judge, the reasonableness of any suggested apprehension of bias is to be considered in the context of ordinary judicial practice”.
13.Ordinary judicial practice, or what might be described in this context as the most basic of judicial practice, was relevantly and clearly stated by Gibbs CJ and Mason J in Re JRL; Ex parte CJL in 1986 by adopting what was said by McInerney J in R v Magistrates’ Court at Lilydale; Ex parte Ciccone in 1972:
“The sound instinct of the legal profession - judges and practitioners alike - has always been that, save in the most exceptional cases, there should be no communication or association between the judge and one of the parties (or the legal advisers or witnesses of such a party), otherwise than in the presence of or with the previous knowledge and consent of the other party. Once the case is under way, or about to get under way, the judicial officer keeps aloof from the parties (and from their legal advisers and witnesses) and neither he nor they should so act as to expose the judicial officer to a suspicion of having had communications with one party behind the back of or without the previous knowledge and consent of the other party. For if something is done which affords a reasonable basis for such suspicion, confidence in the impartiality of the judicial officer is undermined.”
(Citations omitted)
In Ebner at [6], (Gleeson CJ, McHugh, Gummow and Hayne JJ) the plurality said:
Where, in the absence of any suggestion of actual bias, a question arises as to the independence or impartiality of a judge (or other judicial officer or juror), as here, the governing principle is that, subject to qualifications relating to waiver (which is not presently relevant) or necessity (which may be relevant to the second appeal), a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide. That principle gives effect to the requirement that justice should both be done and be seen to be done a requirement which reflects the fundamental importance of the principle that the tribunal be independent and impartial. It is convenient to refer to it as the apprehension of bias principle.
(Citations omitted)
Their Honours continued: at [19]
Judges have a duty to exercise their judicial functions 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.
In Webb v The Queen (1994) 181 CLR 41, [1994] HCA 30 at p 74 Deane J said:
The area covered by the doctrine of disqualification by reason of the appearance of bias encompasses at least four distinct, though sometimes overlapping, main categories of case. The first is disqualification by interest, that is to say, cases where some direct or indirect interest in the proceedings, whether pecuniary or otherwise, gives rise to a reasonable apprehension of prejudice, partiality or prejudgment. The second is disqualification by conduct, including published statements. That category consists of cases in which conduct, either in the course of, or outside, the proceedings, gives rise to such an apprehension of bias. The third category is disqualification by association. It will often overlap the first and consists of cases where the apprehension of prejudgment or other bias results from some direct or indirect relationship, experience or contact with a person or persons interested in, or otherwise involved in, the proceedings. The fourth is disqualification by extraneous information. It will commonly overlap the third and consists of cases where knowledge of some prejudicial but inadmissible fact or circumstance gives rise to the apprehension of bias.
(Citations omitted)
The District Court proceedings
The Recusal application is based on an interlocutory decision I delivered on 14 November 2018 when presiding as a Judge of the District Court of South Australia over an interlocutory application in the matter of Craig & Ors v Hillier & Ors [2018] SADC 114.
The plaintiffs were Mr Craig’s parents, Robert and Judith Craig, together with a corporate third plaintiff. Mr Hillier was the first defendant. The second defendant was a corporate defendant. There were two named third parties, Mr Craig as the first third party and William Buck SA Pty Ltd, a firm of accountants as the second third party, notwithstanding it had not yet been joined as a third party to the proceedings. Ms Martin is named on the interlocutory decision as a non-party and was represented on the argument before me by counsel instructed by Norman Waterhouse.
The proceedings were a loan recovery claim commenced on 31 March 2017. It was alleged by the plaintiffs that Mr Hillier and the second defendant had obtained loans from the plaintiffs through the intermediary of Mr Craig, a member of William Buck.
I did not hear the trial of the action and I note from the pleadings in this matter that the matter settled.
I have no independent recollection of the application but from reading the judgment, there were three interlocutory applications before the Court, the first by the plaintiffs which was a challenge to the defendants’ claim for common interest privilege. The remaining two interlocutory applications were brought by the defendants. The first of those two interlocutory applications were for dismissal of the proceedings as an abuse of process or in the alternative striking out the statement of claim as an abuse of process.
The second of the two interlocutory applications sought leave to file an amended pleading against a third party as well as joinder of William Buck to the proceedings. The second interlocutory application was stood over. I do not know if it was ever argued but if it was, it was not before me.
The documents over which the plaintiffs sought production, and thereby challenged the claim to legal professional privilege by the defendants comprised what is known in both the District Court proceedings and in these proceedings as the William Buck Brief.
The William Buck Brief is not the subject of the LPP application in these proceedings.
The argument proceeded on affidavits. No deponents gave oral evidence or were cross-examined.
After hearing argument, I prepared written reasons for the decision in which I upheld the claims by Mr Hillier and Ms Martin for legal professional privilege over the William Buck Brief.
Mr Williams swore what is referred to in the decision as the second Williams affidavit as to the preparation of the William Buck Brief on the instructions of Ms Martin. At [20]-[29] of the reasons, I set out the history of the preparation of the William Buck Brief as deposed to by Mr Williams in the second Williams affidavit and the provision of the William Buck Brief to the then managing partner of William Buck, Mr McKeough. Within this passage, I also set out what Mr Williams had deposed to in relation to what occurred at a meeting on 29 April 2016. That is the meeting the subject of pleadings in this case.
Ms Martin appeared through counsel at the hearing before me, on the basis of an invitation extended to her by a Master of the District Court at a prior hearing heard before the matter was referred to me. That invitation was for Ms Martin to address submissions to the Court concerning the plaintiff’s challenge to the defendant’s claim for common interest privilege.
I did not inspect the documents the subject of the William Buck Brief: reasons [66].
At reasons [30], I identified a number of issues arising out of the application as follows:
(a)Does legal professional privilege arise over the William Buck Brief and if so, what type of privilege?
(b)Has the provision of the William Buck Brief to William Buck resulted in privilege being waived?
(c)Does without prejudice privilege arise out of the provision of the William Buck Brief to William Buck?
(d)If privilege does arise, does common interest privilege arise as a result of the provision of the William Buck brief to William Buck?
(e)If privilege does arise, does common interest privilege arise as a result of the provision of the William Buck Brief to the defendants’ solicitors, Randle & Taylor?
(f)Is the request for the William Buck Brief fishing?
After discussing the applicable principles, I concluded at reasons [109]:
(a)There is advice privilege in existence, however production is not sought of any documents which fall within that privilege alone.
(b)There is no litigation privilege or if there is, it has been waived.
(c)There is no common interest privilege arising out of litigation privilege between the non-party (Ms Martin) and William Buck.
(d)There is without prejudice privilege as between Ms Martin and William Buck.
(e)There is common interest privilege based on without prejudice privilege as between the Ms Martin and the defendants.
(f)However, a more detailed description of the documents claimed to be the subject of privilege is required. Accordingly, I ordered a Kadlunga list be provided by the defendants to the plaintiffs to enable the plaintiffs to determine which of the documents (if any) comprise the William Buck Brief are open to challenge on the basis of the asserted privileges. If necessary, a Master of the Court was to inspect the documents under challenge.
(g)Ms Martin’s arguments as to the relevance, fishing and abuse of process by the plaintiffs was rejected.
The parties’ submissions on the Recusal application and consideration
At the outset, Mr Hillier submitted the Recusal application is an abuse of process as being the latest in a series of interlocutory applications filed by or on behalf of Ms Martin in these proceedings seeking recusal of presiding judicial officers. The applicant refers to interlocutory applications filed by Ms Martin:
(a)On 26 March 2021, (Charlesworth J) – dismissed in Hillier v Martin (No 2) [2021] FCA 509;
(b)On 13 July 2021, (Besanko J) – granted in Martin v Hillier [2021] FCA 800 on the basis that Besanko J was a member of the Full Court that delivered a judgment strongly critical of Mr Martin’s conduct in other proceedings and in circumstances where the conduct will or may be an issue on an application for leave to appeal by Ms Martin against an interlocutory decision of another judge of this Court; and
(c)On 25 July 2022, (Charlesworth J) – dismissed in Hillier v Martin (No 15) [2022] FCA 996.
Mr Hillier submits the application is an abuse of process on the basis that the question of whether I should recuse myself, albeit obliquely raised in Ms Martin’s affidavit affirmed on 17 October 2023 and in circumstances where Ms Martin had not attended the hearing, was dealt with by me on 18 October 2023.
In these particular circumstances, it is not necessary for me to consider whether the Recusal application is an abuse of process given the Recusal application is the first occasion in which a formal application that I recuse myself has been made.
Ms Martin filed and served written submissions on 15 December 2023 and 22 December 2023 in accordance with the procedural orders made 8 December 2023. Mr Hillier filed and served submissions dated 20 December 2023.
The Recusal application makes reference to Ms Martin’s affidavits affirmed 17 October 2023, 25 October 2023 and 22 November 2023 and her submissions dated 18 October 2023.
Affidavit 17 October 2023
The affidavit affirmed 17 October 2023 was filed without leave and was not formally read on the application but I raised the affidavit with counsel for Mr Hillier and the NW Parties who were present.
Insofar as the Recusal application refers to that affidavit, Ms Martin deposes: at [17]
It is a perverse feature of this application that lawyers for my brother appeared, together with my lawyers, before the same judge in 2018, in the District Court, in relation to the same issue of legal professional privilege. On that occasion, my brother was seeking to uphold the very same rights of privilege which he now attacks. The judge's decision upheld legal professional privilege to a substantial effect on that occasion. I do not think it is appropriate for the applicant to now argue for the opposite outcome, or for this judge to hear this application, having already heard and determined the same issues.
At the hearing on 18 October 2023, I raised that paragraph with counsel.
Mr Whitington KC, counsel for Mr Hillier, submitted that the LPP application that I was about to consider concerned a different issue to that which was considered in the District Court proceedings and that Mr Hillier’s challenge to privilege on this occasion is based upon an entirely different basis or events which have occurred subsequently. The contention on the LPP application is that Mr Hillier was a victim of a plan or strategy involving iniquity which defeated the privilege. That was not the point in the District Court proceedings.
I accept that submission. The issue of whether there was an iniquity did not arise in the District Court proceedings, primarily because at the time there was no dispute between Ms Martin and Mr Hillier.
Mr Blight KC, who appeared for the NW Parties, made no submissions one way or the other on the question of whether I should recuse myself.
In the circumstances, I declined to recuse myself at the hearing on 18 October 2023.
Affidavit 25 October 2023
As with Ms Martin’s 17 October 2023 affidavit, her affidavit affirmed 25 October 2023 was filed without leave and was not formally read on the LPP application for the same reasons.
Insofar as the Recusal application refers to that affidavit, Ms Martin deposes: at [6]
To the extent that James [Hillier] asserts that my allegations of misconduct by Andrew Craig were unjustified, or advanced for an ulterior purpose, I deny that entirely, and say further that James himself made allegations of very serious misconduct about Andrew Craig in court proceedings from 2017 to 2019, including before the Honourable Justice O'Sullivan in the District Court of South Australia. These allegations include undue influence, misleading and deceptive conduct, negligence, and fraud, in relation to events and circumstances with which the William Buck Brief is concerned.
The fact that Mr Hillier made allegations of “very serious misconduct about Andrew Craig in court proceedings from 2017 to 2019”, including before me in the sole argument I heard in the District Court proceedings is of no moment. Any allegations of misconduct on the part of Mr Craig were not the subject of any findings by me.
Affidavit 22 November 2023
As with Ms Martin’s 17 October 2023 affidavit, her affidavit affirmed 22 November 2023 was also filed without leave and was filed after the LPP application was heard and the decision reserved.
This affidavit deposes to searches of files in the Civil Registry of the District Court of South Australia.
Ms Martin deposes to her opinion that there is an overlap of the subject matter between the proceedings in this Court and the District Court proceedings.
Apart from the District Court proceedings, Ms Martin refers to proceedings:
(a)Hillier v William Buck and Andrew Craig: Action Number CIV 266 of 2019;
(b)FDC Construction and Fit-Out Pty Ltd v Cherry Hospitality Pty Ltd: Action Number DCCIV 6414 of 2020; and
(c)FDC Construction and Fit-Out Pty Ltd v Ace Up The Sleeve Pty Ltd: Action Number DCCIV 6415 of 2020.
Ms Martin does not depose as to any involvement by me in the William Buck matter listed at (a) above.
Ms Martin deposes that Mr Hillier was a director and shareholder in each of ‘Cherry Hospitality’ and ‘Ace Up The Sleeve’.
Insofar as Ms Martin deposes at [22] that “… there is a dispute on the pleadings about the nature of the Cherry Burger business, and Mr Hillier’s misuse of Nordburger’s confidential information, intellectual property, and packaging stock in establishing and operating Cherry Burger”, that is not correct. There is no pleading in this matter where any of those matters have been put in issue but Mr Hillier makes reference to the business in his trial affidavit. In any event, there is no suggestion I was involved in any way in the Cherry Hospitality matter.
As to the Ace Up The Sleeve matter, the District Court records annexed to Ms Martin’s affidavit reveal that I conducted a number of directions hearings and an application to set aside default judgment. There is no suggestion I heard oral evidence or made any findings in the course of managing the matter.
Submissions - 18 October 2023
As I have noted, shortly after the LPP application commenced, Ms Martin emailed these submissions to my chambers during the course of the argument on 18 October 2023.
The submissions were not formally read on the argument.
Ms Martin appears to raise an issue of apprehended bias on my part, albeit obliquely, but does not explain why. The submissions refer back to the District Court proceedings in which Mr Hillier sought to protect the legal professional privilege in relation to the William Buck Brief. As I have noted, the current application does not concern the William Buck Brief.
Submissions - 15 December 2023 and 22 December 2023
Ms Martin submits that in my role as a Judge in the District Court proceedings, I “… presided over court proceedings directly related to the case of bar involving substantially the same parties and concerning co-extensive or predominantly overlapping subject matter”.
A number of points arise in relation to that submission.
First, the matter to which Ms Martin refers was an application by the plaintiffs in the District Court proceedings that sought to overturn a claim for legal professional privilege maintained by Mr Hillier as a defendant and Ms Martin as an interested third party. The application was determined in favour of Mr Hillier and Ms Martin. Quite why that should give rise to apprehended bias is not immediately apparent.
Second, although Mr Hillier was a party to one of the proceedings to which Ms Martin refers, he was not named as a party in the Ace Up The Sleeve action.
Third, as I have noted, in none of the directions hearings identified did I hear oral evidence from any of the witnesses nor make any findings as to credibility.
It is for these reasons I do not accept that submission.
Next, Ms Martin submits the subject matter in common between the District Court proceedings and the proceedings in this Court includes events of the 29 April 2016 meeting, the Deed Poll executed by Mr Hillier on 2 May 2016, and the allegations of deceit, undue influence and breach of fiduciary duty on the part of Mr Andrew Craig, who was the accountant for Mr Hillier and Ms Martin.
Mr Williams’ second affidavit filed in the District Court proceedings referred to the 29 April 2006 meeting and the Deed Poll as part of the history to the preparation of the William Buck Brief. There was no consideration of the factual circumstances around each of these events and no findings made in relation to them.
As the allegations of deceit, undue influence and breach of fiduciary duty on the part of Mr Craig, to the extent those allegations were made, the only contested hearing I considered was the single interlocutory argument the subject of the decision. That hearing was conducted on the basis of affidavit evidence with no findings made as to the truth or otherwise of the matters deposed to in the affidavits and no cross-examination on those affidavits.
It is for these reasons that I do not accept that submission.
Next, Ms Martin submits that the factual findings for which Mr Hillier now contends in relation to the 29 April 2016 meeting are contradictory of the facts upon which Mr Hillier relied upon in relation to the District Court proceedings.
That may be or may not be so, but in circumstances where no factual findings were made in relation to what occurred at either the 29 April 2016 meeting or the consequences of the Deed Poll, it is of no moment insofar as me hearing this matter is concerned.
Next, Ms Martin submits that Mr Hillier has performed an “about-face” in relation to the factual matters upon which the substance of his claim is underpinned. Again, that may be or may not be the case but as I made no factual findings it is of no moment. Further, contrary to Ms Martin’s submissions, I do not accept that the District Court proceedings are germane to the current claim. One only has to consider the nature of the claim brought by Mr Hillier against Ms Martin, Operations and the NW Parties in this matter to understand that it is far removed from the loan recovery proceedings brought by Mr Craig’s parents.
It is for these reasons I do not accept those submissions.
Next, Ms Martin refers to the District Court proceedings having been brought to my attention on a number of occasions.
Ms Martin refers in her submissions to the legal test for apprehended or actual bias and it is in that context that there is a suggestion in Ms Martin’s submissions of actual bias. That arises by a submission that a conflict has been brought to my attention “on numerous occasions” and that “… a lack of any attempt on [my part] to recognise or reconcile the obvious discrepancy between [my] previous factual findings, and those for which the applicant now contends, may be due to wilful blindness with respect to the disqualifying features …”. (square brackets provided)
Subject to what I have said above in relation to the oblique reference in Ms Martin’s affidavit affirmed 17 October 2023, on none of the occasions identified by Ms Martin in her submissions was an application made whether in writing or orally that I recuse myself for apprehended bias.
Further, this submission proceeds on the basis of what is described as an “obvious discrepancy between previous factual findings and those for which the applicant now contends”.
The difficulty for Ms Martin with that submission is that there are “no previous factual findings”. The interlocutory decision in the District Court proceedings which was decided in favour of Ms Martin and Mr Hillier, who at that stage asserted common interest privilege, was not based on factual findings but on matters deposed to in affidavits which were untested in cross-examination of any of those deponents. Self-evidently, there were no findings as to credit.
Accordingly, I do not accept these submissions.
Next, Ms Martin submits that I possess extraneous information in that I have “... personal knowledge through my own physical observations of the very events and circumstances that are the direct matters in question in these proceedings.”
That is not the case. I have no personal knowledge of what may or may not have happened at the 29 April 2016 meeting, nor the circumstances in which Mr Hillier signed the Deed Poll nor for that matter any other relevant fact. Accordingly, I do not accept that submission.
In her reply submissions dated 22 December 2023, Ms Martin takes a different approach. She contends that Mr Hillier’s claim for relief is based in part on events and circumstances which occurred in the courtroom in my presence. That is simply not the case. As is evident from my description of the pleaded case in the proceedings in this Court, the claim for legal expenses in 5ASOC [45F.6]-[45F.9] refers to legal expenses which are alleged to have been incurred unnecessarily. The fact that there was an interlocutory argument before me is uncontroversial. The allegations in this case that unnecessary legal expenses were incurred in defending the proceedings was not an issue in the District Court proceedings at the time because both Mr Hillier and Ms Martin were not in dispute at that stage. Whether the legal expenses incurred in the District Court proceedings were unnecessary and comprise a cost for which the respondents are liable remains to be determined as part of the proceedings in this Court.
A further submission in the reply submissions is that it is reasonable to infer that my personal knowledge extends to matters concerning “relevant evidence” pursuant to s 55 of the Evidence Act 1995 (Cth). Section 55 of the Evidence Act provides:
55 Relevant evidence
(1)The evidence that is relevant in a proceeding is evidence that, if it were accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding.
(2)In particular, evidence is not taken to be irrelevant only because it relates only to:
(a)the credibility of a witness; or
(b)the admissibility of other evidence; or
(c)a failure to adduce evidence.
It is apparent from s 55 that evidence is relevant, if accepted, if that evidence could rationally affect, directly or indirectly, the assessment of the probability of the existence of a fact in issue in the proceeding. Ms Martin submits that the evidence includes “without limitation the appearance, submissions, demeanour and effectiveness of counsel and solicitors, the presence of various persons in the court room (sic) and the apparent source of instructions for the applicant’s lawyers” and that as a result I am a competent witness.
I do not accept that submission. The allegation in these proceedings is not the manner in which the litigation was conducted but the fact it was conducted and whether that was as a result of the events of the 29 April 2016 meeting and the Deed Poll. In particular, there is no criticism in the pleadings of how the District Court proceedings were defended but rather the fact that Mr Hillier considered he had no option but to defend them because of the Deed Poll.
It follows that the suggestion that I am a competent witness is untenable.
In his submissions, Mr Hillier refers to the four categories grounding a recusal application cited by Deane J in Webb at p 74 and applied in Ebner at [24].
Mr Hillier submits that the only category identified in Webb relied upon by Ms Martin in her primary submissions is the fourth category, ie, extraneous information.
In Webb, in the passage to which I have referred, Deane J describes this fourth category as:
The fourth is disqualification by extraneous information. It will commonly overlap the third and consists of cases where knowledge of some prejudicial but inadmissible fact or circumstance gives rise to the apprehension of bias.
Mr Hillier submits that Ms Martin had not identified any particular information arising from or out of the conduct of the District Court proceedings which is said to be prejudicial or inadmissible which might give rise to a relevant apprehension of bias. So too, insofar as Ms Martin refers to the Cherry Hospitality and Ace Up The Sleeve proceedings, there is nothing identified by Ms Martin nor any particular information acquired by me in the course of my limited involvement in those proceedings that has any relevance to the within proceedings.
Ms Martin identifies no knowledge of prejudicial but inadmissible facts or circumstances sufficient to give rise to the apprehension of bias.
Further, as to the two-stage test identified by the High Court in Charisteas, the material identified by Ms Martin does not satisfy the first stage of the test for apprehended bias, namely there was material which might lead a judge to decide the case other than on its legal and factual merits. That being the case, there is no basis upon which to consider the second stage and the logical connection between that matter and the feared departure from the judge deciding the case on its merits.
It follows there is no cause to assess the reasonableness of the asserted apprehension of apprehended bias.
As to the suggestion of actual bias, Ms Martin provides no evidence of any type that I have pre-judged the action such that as noted by Gleeson CJ and Gummow J in Jia Legeng referred to at [50] above, I have “… a closed mind to the issues raised and am not open to persuasion by [the respondents] case”; or I have “… prejudged the case against [the respondents] or acted with such partisanship or hostility as to show that [I] had a mind made up against [the respondents] and was not open to persuasion in favour of [the respondents]”. (square brackets provided)
It is for these reasons that I dismissed Ms Martin’s application that I recuse myself.
THE LEGAL PROFESSIONAL PRIVILEGE APPLICATION
The LPP application is brought against the claim in the list of documents filed on 2 June 2013 by Mr Williams and the list of documents filed by NW and NWPL on the same date, that documents are the subject of legal professional privilege in favour of Ms Martin.
The discovery process and the claim for legal professional privilege
It is necessary to explain how it is that the NW Parties claimed legal professional privilege on behalf of Ms Martin.
The NW Parties represented Ms Martin until such time as they were joined to these proceedings in June 2022. Ms Martin did not waive privilege so as to allow inspection of files held by them.
In the ninth affidavit of Fiona Mary Errington sworn 31 August 2023 (ninth Errington affidavit) she deposes that a protocol as between the NW Parties, Ms Martin and Operations which she describes as the “common interest privilege and document access protocol”, was agreed and executed in March 2023.
The protocol is annexure FME 7 to the ninth Errington affidavit and names the privilege holders as Ms Martin, Nordburger and Operations.
The protocol records that the NW Parties have possession of files in relation to which they are subject to professional obligations to keep confidential and to maintain the privilege holders right to legal professional privilege in respect of those files.
In the case of Ms Martin, her Honour found: at [96], that there was no evidence before her Honour:
… as to the particular tasks performed by Mrs Martin in the course of her asserted employment, nor as to the terms of the asserted employment contract.
It may well be that in any trial of this matter, evidence is produced to address the information which was lacking before her Honour but without more at this stage, there is a prima facie case that both Ms Martin and Mr Martin were drawing remuneration from Nordburger for which there was no basis.
It is in that context that Mr Hillier refers to Charlesworth J’s judgment in Hillier v Martin (No 11) [2022) FCA 407, [35]-[38] in which her Honour records that Ms Martin, Mr Martin and an entity named VTPD had received loan advances which as at 21 March 2022 exceeded $600,000 and during the period 2020, 2021 and year-to-date March 2022 had drawn sums in excess of $500,000.
Once again, it may well be that these loans and drawings are able to be explained at trial and I make no findings about those matters. However, there was sufficient material before Charlesworth J which, in the absence of evidence to the contrary, her Honour considered that at an interlocutory stage: at [36] it, “… may be comfortably inferred that the debtors under the loans were either Mr and Mrs Martin personally, or the controllers of trusts or other structures representing the personal interests”.
I draw no inference but I am satisfied that there is an issue which has been raised on the material upon which Mr Hillier relies such as to give colour to the charge of iniquity.
Litigation conduct and other matters
The litigation conduct to which Mr Hillier responds is not the litigation conduct referred to in the pleadings but rather the conduct of Ms Martin in these proceedings since they were commenced on 11 August 2020 as deposed to by Mr Hillier in the interlocutory affidavit at [61]-[70].
Mr Hillier refers to the protracted application for the production of financial records of the Nordburger business including the Xero database which took from 27 September 2020 until 21 March 2022.
The NW Parties refer to the breakdown in the relationship between Mr Hillier and Ms Martin from early 2018, some two years after the 29 April 2016 meeting. They referred to what they describe as objective evidence of a series of events between April 2016 and late 2019. In particular, they refer to the apparent good relations between Mr Hillier and Ms Martin in relation to the management of the Nordburger business. They refer to the liaison between Mr Hillier and Mr Martin in relation to the conduct of the District Court proceedings. They do so in an attempt to highlight that there was a change in the relationship between Mr Hillier and Ms Martin from one of apparent co-operation to one of apparent hostility which, as I understand it, they submit militates against the allegations now put. Again, that may be the case but it is part of the complex factual matrix that will need to be determined at trial and in particular there is an issue over whether as a result of the 29 April 2016 meeting and the signing of the Deed Poll, Mr Hillier’s subsequent actions were undertaken as a result of him being subjected to economic duress, undue influence, unconscionable conduct in equity and within the meaning of the ACL as well as misleading and deceptive conduct. So much so is evident from the submission by the NW Parties that it is only known to Mr Hillier and Ms Martin which led to the breakdown in the relationship from early 2018.
CONCLUSION
Notwithstanding the NW Parties’ comprehensive submissions, I am satisfied from the material to which the Court has been taken by Mr Hillier that there is prima facie evidence of iniquity such as to displace the legal professional privilege on the part of Ms Martin. In the exercise of my discretion, whilst conscious of the seriousness of permitting inspection of documents the subject of a claim for legal professional privilege, I am prepared in all the circumstances to order the documents be produced for inspection: Kearney at p 516 (Gibbs CJ).
I stress that my conclusions as to whether there is prima facie evidence of iniquity in no way reflects any view as to the probable outcome of the litigation nor is it a concluded view as to whether the allegations will ultimately be established in whole, or in part.
It is necessary to say something about Operations. No application was brought against it as no claim for privilege was made by it in the list of documents served by Mr Williams and NW and NWPL on 2 June 2023.
It is for the reasons set out above there will be orders requiring the NW Parties to produce for inspection, those documents asserted in the lists of documents filed on 2 June 2023 to be the subject of legal professional privilege in favour of Ms Martin or any entity or entities simply described as Nordburger in the list of documents in which legal professional privilege is claimed.
There is no reason why the NW Parties should not pay the costs of and incidental to this application although if they contend for some other order, any such application is to be made within seven days of the date of publication of these reasons.
I certify that the preceding two hundred and thirty-three (233) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice O'Sullivan. Associate:
Dated: 8 March 2024
SCHEDULE OF PARTIES
SAD 113 of 2020 Respondents
Fourth Respondent:
STEPHEN BRADLEY WILLIAMS
Fifth Respondent:
NORMAN WATERHOUSE (A FIRM)
Sixth Respondent:
NORMAN WATERHOUSE LAWYERS PTY LTD
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