Jess & Jess
[2021] FamCAFC 159
•25 August 2021
FAMILY COURT OF AUSTRALIA
Jess & Jess [2021] FamCAFC 159
Appeal from: Jess & Jess and Ors [2018] FamCA 1179
Jess (Declaration and Recusal) [2019] FamCA 841
Appeal number(s): SOA 74 of 2019 File number(s): MLF 3444 of 2006 Judgment of: ALSTERGREN CJ, STRICKLAND & KENT JJ Date of judgment: 25 August 2021 Catchwords: FAMILY LAW – LEAVE TO APPEAL – APPEAL – DECLARATION – Whether leave to appeal from a declaration is required – Whether a declaration of a finding of fact is interlocutory or final – Whether the primary judge finally determined the rights of the parties – Where the primary judge made clear that she was not yet dealing with the wife’s applications pursuant to ss 79, 79A and 106B of the Family Law Act 1975 (Cth) – Where the declaration does not finally determine the rights of the parties – Where the order, although expressed in declaratory terms, is more akin to a finding of fact – Where leave to appeal is required.
FAMILY LAW – APPEAL – DECLARATION – Where the primary judge made a declaration that a document was not executed on the date that it bears – Whether findings of fact open on the evidence – Whether delay weakens the primary judge’s advantage in having seen the oral and documentary evidence unfold in a coherent manner – Whether the findings are “glaringly improbable” or “contrary to compelling inferences” – Where the primary judge undertook a detailed consideration of her impressions of the credit of the central witnesses in the case – Where any factual findings had an evidentiary foundation – Where there was sufficient factual evidence to persuade the primary judge that the document was not executed on the date it bears.
FAMILY LAW – LEAVE TO APPEAL – APPEAL – DISQUALIFICATION – Whether leave to appeal from dismissal of a disqualification application is required – Whether “decree or decision” is interlocutory or final – Where a decision by a judge in civil proceedings to refuse an application to disqualify themselves does not finally determine the rights of the parties – Where dismissal of a disqualification application is interlocutory – Where leave to appeal is required – Where the decision is attended by sufficient doubt to warrant it being reconsidered and substantial injustice would result if leave were refused.
FAMILY LAW – APPEAL – DISQUALIFICATION – Apprehended bias – Whether the primary judge misapplied the test of apprehended bias – Whether the primary judge focused on whether the fair-minded lay observer would have agreed with the primary judge’s adverse findings rather than what that observer might reasonably apprehend – Where the primary judge made findings of credit and fraud – Where the primary judge’s approach reflects an error in the application of the test.
FAMILY LAW – APPEAL – DISQUALIFICATION – Waiver – Where the appellants sought to have the finding of fact in relation to the document determined as a preliminary issue – Whether the appellants waived their right to seek that the primary judge recuse herself – Where no party raised waiver as an applicable exception to apprehended bias before the primary judge – Where the authorities make it clear that the doctrine of waiver depends upon a litigant being fully aware of the circumstances in which apprehended bias might be inferred.
Legislation: Evidence Act 1995 (Cth) s 140
Family Law Act 1975 (Cth) ss 79, 79A, 90K, 97(3), 106B
Family Law Rules 2004 (Cth) rr 1.04, 1.08
Cases cited: Abalos v Australian Postal Commission (1990) 171 CLR 167; [1990] HCA 47
Allesch v Maunz (2000) 203 CLR 172; [2000] HCA 40
Atkins & Hunt and Ors (2017) FLC 93-774; [2017] FamCAFC 79
Australian Builders Labourers Federated Union of Workers (WA) v J-Corp Pty Ltd (1993) 114 ALR 551; [1993] FCA 360
Australian National Industries Ltd v Spedley Securities Ltd(in liq) (1992) 26 NSWLR 411
Barnes v Australian Telecommunications Corporation [1996] 2 Qd R 1; [1996] QCA 1
Bob Jane Corporation Pty Ltd v ACN 149 801 141 Pty Ltd [2015] FCA 1343
Bowcott & Welling (2016) FLC 93-723; [2016] FamCAFC 144
Bradshaw v McEwansPty Ltd (1951) 217 ALR 1
Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34
British American Tobacco Australia Services Ltd v Laurie (2011) 242 CLR 283; [2011] HCA 2
Brott and Joachim (2001) FLC 93-071; [2001] FamCA 244
Browne v Dunn (1893) 6 R 67
Caboche & Bond v Ramsay (1993) 119 ALR 215; [1993] FCA 920
CDW v LVE (2015) FLC 93-683; [2015] WASCA 247
Construction, Forestry, Mining & Energy Union v Employment Advocate [2001] FCA 1442
Chamberlain v R (1983) 46 ALR 493; [1983] FCA 74
Chamberlain v The Queen (No. 2) (1984) 153 CLR 521; [1984] HCA 7
Computer Edge Pty Ltd v Apple Computer Inc (1984) 54 ALR 767; [1984] HCA 47
Coulton v Holcombe (1986) 162 CLR 1; [1986] HCA 33
Crick & Bennett (2018) FLC 93-832; [2018] FamCAFC 68
D & D [2005] FamCA 356
Day v Perisher Blue Pty Ltd (2005) 62 NSWLR 731; [2005] NSWCA 110
Devries v Australian National Railways Commission (1993) 177 CLR 472; [1993] HCA 78
De Winter and De Winter (1979) FLC 90-605
Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337; [2000] HCA 63
Expectation Pty Ltd v PRD Realty Pty Ltd (2004) 230 ALR 534; [2004] FCAFC 189
Fagan and Fagan (1985) FLC 91-607; [1984] FamCA 58
Fisher & Paykel Healthcare Pty Ltd v Avion Engineering Pty Ltd (1991) 103 ALR 239; [1991] FCA 566
Fox v Percy (2003) 214 CLR 118; [2003] HCA 22
Fraser v NRMA Holdings Ltd (1995) 127 ALR 543; [1995] FCA 9
Hampton Court Ltd v Crooks (1957) 97 CLR 367; [1957] HCA 28
I.C. Formwork Services Pty Ltd v Moir (No 2) (2020) 356 FLR 111; [2020] ACTCA 44
Insurance Australia Limited t/as NRMA Insurance v Iuli & Anor [2014] ACTCA 50
Johnson v Johnson (2000) 201 CLR 488; [2000] HCA 48
Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8
Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392; [2013] HCA 25
Kinsella v Gold Coast City Council [2015] 1 Qd R 274; [2014] QSC 65
Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70; [1990] HCA 31
Lee v Lee (2019) 266 CLR 129; [2019] HCA 28
Livesey v NSW Bar Association (1983) 151 CLR 288; [1983] HCA 17
Measures v McFadyen (1910) 11 CLR 723; [1910] HCA 74
Medlow & Medlow (2016) FLC 93-692; [2016] FamCAFC 34
Metwally v University of Wollongong (1985) 60 ALR 68; [1985] HCA 28
Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427; [2011] HCA 48
Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449; [1992] HCA 66
NZI Securities Australia Ltd v Poignand (1994) 123 ALR 11; [1994] FCA 467
O’Brien v Komesaroff (1982) 150 CLR 310; [1982] HCA 33
Palmer v Dolman [2005] NSWCA 361
R v Exall (1866) 176 ER 850
R v Watson; Ex parte Armstrong (1976) 136 CLR 248; [1976] HCA 39
Re Day (2017) 340 ALR 368; [2017] HCA 2
Rejfek v McElroy (1965) 112 CLR 517; [1965] HCA 46
Robinson Helicopter Company Inc v McDermott (2016) 331 ALR 550; [2016] HCA 22
Sikorski & Sikorski (2008) FLC 93-381; [2008] FamCAFC 145
Smits v Roche (2006) 227 CLR 423; [2006] HCA 36
SS Hontestroom v SS Sagaporack [1927] AC 37
Suttor v Gundowda Pty Ltd (1950) 81 CLR 418; [1950] HCA 35
Sydney Harbour Trust Commissioners v Wailes (1908) 5 CLR 879; [1908] HCA 19
Tattsbet Ltd v Morrow (2015) 321 ALR 305; [2015] FCAFC 62
Thorne v Kennedy (2017) 263 CLR 85; [2017] HCA 49
Thorpes Ltd v Grant Pastoral Co Pty Ltd (1955) 92 CLR 317; [1955] HCA 10
Vakauta v Kelly (1989) 167 CLR 568; [1989] HCA 44
Wallis & Manning (2017) FLC 93-759; [2017] FamCAFC 14
Warramunda Village Inc v Pryde (2002) 116 FCR 58; [2002] FCAFC 58; [2002] FCA 250
Warren v Coombes (1979) 142 CLR 531; [1979] HCA 9
Water Board v Moustakas (1994) 180 CLR 491; [1988] HCA 12
Division: Appeal Division Number of paragraphs: 432 Date of hearing: 19–21 October 2020 Place: Heard in Melbourne (via video link), delivered in Brisbane Counsel for the Appellants: Mr Waller QC with Mr Strum QC and Mr Mereine Solicitor for the Appellants: HWL Ebsworth Counsel for the First Respondent: Mr Dickson QC with Dr Parker Solicitor for the First Respondent: Kenna Teasdale Solicitor for the Second Respondent: Not participating Counsel for the Third Respondent: Mr Austin QC with Ms Papaleo Solicitor for the Third Respondent: Lander & Rogers ORDERS
SOA 74 of 2019
MLF 3444 of 2006APPEAL DIVISION OF THE FAMILY COURT OF AUSTRALIA
BETWEEN: MR JESS JNR
First Appellant
MR BAN
Second Appellant
AND: MS JESS
First Respondent
MR J IN HIS CAPACITY AS THE LEGAL PERSONAL REPRESENTATIVE OF THE LATE MR JESS SNR
Second Respondent
MR K AND MR L AS TRUSTEES OF THE BANKRUPT ESTATE OF MR JESS SNR (INTERVENERS)
Third Respondent
(and others named in the Schedule)
ORDER MADE BY:
ALSTERGREN CJ, STRICKLAND & KENT JJ
DATE OF ORDER:
25 AUGUST 2021
THE COURT ORDERS THAT:
1.The application for leave to appeal Order 2 of the orders made on 15 November 2019 is dismissed.
2.The appellants have leave to appeal Order 4 of the orders made on 15 November 2019 and the appeal from that order be allowed and that order be set aside.
3.The primary judge is disqualified from any further hearing of the proceedings and the balance of the proceedings be determined by a judge other than the primary judge.
4.Any party seeking an order for costs in respect of the appeal shall file and serve within fourteen (14) days a written submission of no more than five (5) pages identifying the order sought and the reasons relied upon for that order.
5.Any party against whom an order for costs is sought shall file and serve within fourteen (14) days of service upon that party of written submissions pursuant to Order 4, a written submission of no more than five (5) pages in response.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Jess & Jess has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALSTERGREN CJ, STRICKLAND & KENT JJ:
Within a broader dispute, the parties to this appeal joined issue as to whether a Deed of Declaration of Trust (“DODT”) was a fraud, having been created some years after the date it bears (28 February 2002), or whether it was in fact executed by the late Mr Jess Snr (“the husband”) on that date. The operative effect of the DODT was to divest the husband of substantial property interests in favour of his son Mr Jess Jnr.
The essential contention of Ms Jess (“the wife”) in the proceedings was that the DODT was a fraudulent document created to deprive her of her legitimate property settlement entitlement.
The primary judge resolved to determine the issue as to the authenticity of the DODT as a discrete issue in advance of determining the substantive property claims of the wife.
On 4 December 2018 the primary judge delivered extensive reasons for judgment (“the 2018 reasons”) recording numerous factual findings including findings to the effect that the DODT is a fraudulent document. However the primary judge did not then make any substantive orders, adjourning the proceedings for further directions. Ultimately on 15 November 2019 the primary judge delivered further reasons for judgment (“the 2019 reasons”) and made the orders the subject of these proceedings.
On 15 November 2019 the primary judge made a declaration that the DODT dated 28 February 2002 was not executed on the date that it bears (Order 2). The primary judge further ordered the dismissal of an application that the primary judge recuse herself from further involvement in determining the proceedings (Order 4).
By Notice of Appeal filed on 13 December 2019 the parties listed as appellants in the schedule attached to the Notice of Appeal seek leave to appeal from Order 2 and to appeal from Order 4. These parties are conveniently referred to collectively as either “the appellants” or “the represented third parties”, as that is how they are referred to by the primary judge. As will shortly be discussed the appellants’ position in relation to whether leave to appeal is required altered just prior to the hearing of the appeal. Whilst the Notice of Appeal contends for orders on appeal including an order that this Court declare that the DODT was executed on 28 February 2002, Queen’s Counsel for the appellants confirmed in final submissions on the hearing of the appeal that the orders sought on appeal were confined to setting aside the orders of the primary judge.
The application for leave to appeal, if leave be required, and the appeal, is opposed by, inter alia, the wife and the trustees of the bankrupt estate of the husband (“the third respondent”).
The third respondent did not participate in the trial but became active as an intervening party once the primary judge had delivered the 2018 reasons. The third respondent participated in the proceedings for the purpose of the primary judge delivering the 2019 reasons. The third respondent filed a Notice of Contention on 3 January 2020 with respect to the primary judge’s dismissal of the recusal application.
For the reasons which follow we are not persuaded of any merit in the appellants’ complaints on appeal concerning Order 2 of the orders made on 15 November 2019. It follows that the application for leave to appeal from that order is dismissed. We are, however, persuaded of merit in the complaint that the primary judge ought to have recused herself. It follows that the appellants should be granted leave to appeal (we have determined that leave is required) from Order 4 of the orders made on 15 November 2019 and that order be set aside. It also follows that an order should be made that the primary judge is disqualified from the further hearing of this proceeding.
IS LEAVE TO APPEAL THE DECLARATORY ORDER REQUIRED?
As mentioned at the commencement of these reasons, the appellants’ position in relation to whether leave to appeal is required altered just prior to the hearing of the appeal. The appellants filed an Outline of Submissions on 12 October 2020 contending that the declaration is a final order which finally determined the rights of the parties in relation to the DODT, and thus leave to appeal is not required.
The wife and the third respondent contend that leave to appeal is required to appeal the declaratory order. The third respondent’s submissions aligned with those of the wife’s in relation to leave to appeal, and so we only need advert to the submissions of the wife.
The appellants relied upon various authorities for the proposition that a declaratory order cannot be an interlocutory order as it declares the rights of the parties as to an issue (see Warramunda Village Inc v Pryde (2002) 116 FCR 58 (“Warramunda”); Insurance Australia Limited t/as NRMA Insurance v Iuli & Anor [2014] ACTCA 50; and I.C. Formwork Services Pty Ltd v Moir (No 2) (2020) 356 FLR 111). The appellants made specific reference to the following passage from Warramunda, where Finkelstein J opined:
68.… An order of a court is either final or interlocutory: Standard Discount Co v Otard de la Grange (1877) 3 CPD 67 at 69 per Bramwell LJ. Thus if an order is not interlocutory it must be final and, conversely, if it is final it cannot be interlocutory. According to existing law the only declaration that may be granted is a final and conclusive declaration: Inland Revenue Commissioners v Rossminster Limited [1980] AC 952 at 1014 per Lord Diplock, 1027 per Lord Scarman; Clarke v Chadburn [1985] 1 WLR 78 at 81 per Megarry VC. The reason for this is that a declaration declares the rights of parties and it would be illogical for a court to declare that a person has certain rights on one day and different rights on the next. Put another way, an interlocutory declaration is an inherently contradictory notion: International General Electric Co of New York Ltd v Commissioners of Customs and Excise [1962] Ch 784. Accordingly, a declaration must produce a state of finality in relation to a particular issue, whether or not there are other issues in the case that still require resolution by a final order.
However, Queen’s Counsel for the wife urged us to consider not just that passage, but the surrounding paragraphs of the judgment of Finkelstein J, including the following:
66.I need to qualify the generality of the foregoing propositions. Before any order of a court, including a declaratory judgment, can operate in law either as a res judicata or an issue estoppel, certain well known requirements must be satisfied. One of those requirements is that the judgment must be final. This does not mean that the judgment must be final as distinct from interlocutory, a distinction to which I will return shortly. The requirement is that the judgment should be “final and conclusive on the merits”: Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] AC 853 at 935. So, in a case that involves a number of specific issues and one of those issues is tried before the others, the judgment on that issue, though an interlocutory judgment, will result in “the primary judge’s hand [being] tied in respect of all matters of fact and law involved in that determination”: Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 at 360, citing Fidelitas Shipping Co Ltd v V/O Exportchleb [1966] 1 QB 630 at 642 where Diplock LJ said:
“Where the issue separately determined is not decisive of the suit, the judgment upon that issue is an interlocutory judgment and the suit continues. Yet I take it to be too clear to need citation of authority that the parties to the suit are bound by the determination of the issue. They cannot subsequently in the same suit advance argument or adduce further evidence directed to showing that the issue was wrongly determined. Their only remedy is by way of appeal from the interlocutory judgment and, where appropriate, an application to the appellate court to adduce further evidence.”
67.The requirement of finality makes it necessary to determine the status of a declaratory judgment given before the final disposition of a case, for example when there is a “split trial” and questions of liability are tried before any issue as to damages. There are a number of authorities which have held that a declaration granted at the conclusion of a trial on liability, is an interlocutory order: see, for example, Australian Builders’ Labourers’ Federated Union of Workers – Western Australian Branch v J-Corp Pty Ltd (1993) 42 FCR 452 at 454; Fisher & Paykel Healthcare Pty Ltd v Avion Engineering Pty Ltd (1991) 103 ALR 239 at 242; Caboche v Ramsay (1993) 119 ALR 215 at 226; NZI Securities Australia Ltd v Poignand (1994) 51 FCR 584 at 593-594; Fraser v NRMA Holdings Limited (1995) 55 FCR 452 at 457. (In none of these cases was it suggested that a declaration should not have been granted at the conclusion of the hearing. When leave to appeal was given, on the appeal the dispute was considered on the substantive merits.)
…
69.For all this, I must concede that I feel myself overwhelmed by the weight of the many Full Court decisions that are to the contrary effect. In addition to the cases that I have already mentioned, more keep piling up. I have discovered another decision of the Full Court holding that a declaration made at the end of the first part of a “split case” is interlocutory. The case is Construction, Forestry, Mining and Energy Union v Employment Advocate [2001] FCA 1442, which was handed down only four months ago. There is no point in criticising those cases on the basis that they do not mention the contradiction I see as inherent in a finding that a declaratory judgment is interlocutory. The position is that the Full Court has laid down the law and I am bound to follow it, right or wrong.
70.In any event, there may be a middle ground. The answer may be that a judgment may be interlocutory for some purposes and final for others. Cases such as Carl Zeiss Stiftung v Rayner & Keeler Ltd and Joseph Lynch Land Co Ltd v Lynch [1995] 1 NZLR 37 have held that an issue may be finally determined in what are interlocutory proceedings so that an issue estoppel will arise. According to these cases the question to be asked is whether in the circumstances of a particular case it is reasonable to regard the earlier decision as a final determination of the issue that one of the parties wishes to raise again: Makhoul v Barnes (1995) 60 FCR 572. See also AustralianTelecommunications Corporation v Barnes (1995) 125 FLR 335 where the Queensland Court of Appeal held that a declaratory judgment made after a hearing on liability finally determined some of the issues in the action but was not a final judgment for the purposes of the appeal provisions. While this approach is certainly a satisfactory method of determining whether a decision is final for the purposes of res judicata or issue estoppel (a point which seems to me to raise somewhat different issues), I am not persuaded that it can be said that a declaration is interlocutory for any purpose. I repeat that if it be correct that a declaration is necessarily a final order, I cannot see on what basis it can be treated as interlocutory for some purposes. I favour the view that once an order has been characterised as either a final order or an interlocutory order, it will retain that character for all purposes. Put another way, I do not accept the notion that is inherent in the proposition that a declaration may be interlocutory, namely that it can begin life as an interlocutory order and later transform itself into a final order. An order of the court is not like a caterpillar which, through a process of metamorphosis, becomes a butterfly.
The wife submits that, when properly construed and considered in the context in which it was made, the declaratory order was not a declaration in the sense referred to in the authorities upon which the appellants rely. It is contended that the primary judge did no more than formally record her finding of fact in the nature of a declaration, which was the course sought by the appellants after the delivery of the 2018 reasons, and her Honour does not, and does not purport to deal with, the rights of the parties. The fact that the primary judge did not intend to declare the rights of the parties is made clear by her Honour stating that she was not yet dealing with the wife’s applications pursuant to ss 79A, 79 and 106B of the Family Law Act 1975 (Cth) (“the Act”), and that the “represented third parties’ “interests” are not at risk or in need of protection unless, or until, the Court starts to deal with the wife’s s 79 and s 106B of the Act applications” (at [27] of the 2018 reasons). Her Honour goes on to say that it was “out of an abundance of caution and the declining health of the husband that the represented third parties have participated fully in the proceedings” thus far (at [28] of the 2018 reasons).
In those circumstances, we agree with the wife’s submissions in that the order, although expressed in declaratory terms, is less akin to cases involving declarations as to rights and more akin to appeals involving findings of fact (see Brott and Joachim (2001) FLC 93-071 (“Brott and Joachim”)). The Full Court of the Family Court in Brott and Joachim held that leave to appeal was required to appeal from an interlocutory finding before the final judgment was determined in relation to setting aside a costs agreement. Relevantly to this case, their Honours said the following about appealing interlocutory findings of fact:
33. In our view, the matters complained of by the applicant do not at this stage merit a grant of leave to appeal. Any error of the trial Judge in respect of her conclusion as to the existence or otherwise of a signed costs agreement and as to whether or not such an agreement should be set aside will be capable of being dealt with on an appeal from any substantive order made by the trial Judge at the conclusion of the proceedings. At this stage there is no indication one way of [sic] the other as to whether or not Mr Brott will be allowed to rely upon the agreement. Her Honour may well dismiss the application to set the agreement aside, having regard to all of the surrounding circumstances of the case. It is merely speculative to assume that because her Honour has made a finding that there is a preliminary bar to allowing Mr Brott to rely on the agreement, namely a finding that he had not signed it at what she perceived to be the relevant time, such a finding will necessarily lead to the agreement being set aside. We do not perceive that the hardship that Mr Brott will have to undergo to deal with the discretion issue is such that merits the respondent being obliged to undertake exactly the very evil that the Court spoke of in Re the Will of FB Gilbert (supra) namely that the disposal of a case can be delayed interminably and costs seeped up indefinitely in challenging each exercise of discretion in an interlocutory application.
34.In determining this issue we are not seeking to draw any conclusions about the validity of the matters complained about by Mr Brott in his proposed Notice of Appeal nor in his submissions. We make no ruling whatsoever on whether or not her Honour erred in finding that the agreement had been signed by Mr Brott a short time prior to the hearing. We make no finding on whether or not the correspondence surrounding the Agreement can be looked at as providing the necessary signature for the purposes of the Family Law Rules. We make no finding on who bears the onus of proof in respect of whether or not the costs agreement should be set aside in the event that there has been non-compliance with O 38 sub-r 27(2), (3) and (4). We do not conclude, however, that Mr Brott will suffer such prejudice or hardship as to make it appropriate at this stage to interfere with the process that her Honour is undertaking in determining whether or not to grant the application of the wife, namely to set the costs agreement aside. It is our view that the proceedings should run to its natural conclusion by her Honour determining whether or not to exercise her discretion before it is appropriate that there be an appellate review of the outcome.
(Emphasis added)
In Computer Edge Pty Ltd v Apple Computer Inc (1984) 54 ALR 767 (“Computer Edge”), the High Court of Australia (“the High Court”) was concerned with whether the judgment was final or interlocutory, after some of the issues in the case had not yet been determined, whilst others had. The High Court held at 767-768 (per Gibbs CJ, with whom Murphy & Wilson JJ agreed):
The test for determining whether a judgment is final, which has been laid down in a number of cases including Carr v. Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246, 34 ALR 449, is whether the judgment finally determines the rights of the parties, and the authorities have held that the court in applying the test must have regard to the legal rather than the practical effect of the judgment. So that the question in the present case is whether the whole judgment finally determined, in a legal sense, all the rights of the parties that were at issue in these proceedings. And the answer is, plainly, that it did not, because it left undetermined the question whether any, and what, damages were payable. The conclusion that the judgment is not a final judgment is supported by a short passage from the judgment of Dixon CJ in John Grant & Sons Ltd v Trocadero Building and Investment Co Ltd (1938) 60 CLR 1 at 35, where his Honour said:-
“The judgment of the Supreme Court did not determine the action, for the demurrers did not affect pleas to or replications in relation to all counts of the declaration. The judgment was, therefore, interlocutory, and this appeal did not lie without leave.”
The wife submits that the principle from Computer Edge, namely that a judgment is interlocutory in nature for the purpose of the requirement of leave to appeal if the proceeding is continuing regardless of whether the particular order made is itself final in nature, has been applied in numerous subsequent authorities of the Full Court of the Federal Court involving declarations made prior to the conclusion of proceedings (see Australian Builders Labourers Federated Union of Workers (WA) v J-Corp Pty Ltd (1993) 114 ALR 551; Fisher & Paykel Healthcare Pty Ltd v Avion Engineering Pty Ltd (1991) 103 ALR 239; Caboche & Bond v Ramsay (1993) 119 ALR 215; NZI Securities Australia Ltd v Poignand (1994) 123 ALR 11; and Fraser v NRMA Holdings Ltd (1995) 127 ALR 543).
We also refer to the decision in Construction, Forestry, Mining & Energy Union v Employment Advocate [2001] FCA 1442, where the trial judge made declarations that the relevant legislation under the Workplace Relations Act 1996 (Cth) had been contravened and then adjourned the further hearing as to penalties. An appeal was brought against the declarations, and in determining whether they required leave to be appealed from, the Full Court of the Federal Court held the following:
6.… For the purpose of any proceeding under Division 6 of the Act for an order or orders under s 298U, a mere finding that a person has engaged in conduct in contravention of Part XA - and any consequential declaration to that effect - can only be characterised as a step along the way to finally disposing of the rights of the parties. Given that the award of relief under s 298U is discretionary and that the trial judge in this matter has not determined that penalties are to be imposed, the trial judge cannot be said to have as yet determined whether any order would be made under s 298U.
7.It is unnecessary here to consider in any detail the differentiating characteristics of orders that are final and those that are interlocutory for the purposes of the leave requirement imposed by s 24(1A) of the Federal Court of Australia Act 1976; but see eg the discussion in Malouf v Malouf (1999) 86 FCR 134. It is sufficient to say that an order will be final for the purposes of an appeal when, even though interlocutory in form, it is final in substance in that it finally disposes of the rights of the parties: Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564 at 583-584; Arrowcrest Group Pty Ltd v Gill (1993) 46 FCR 90; National Australia Bank Ltd v Maher (No 2) [1999] 3 VR 589 at 592-595; see also French Caledonia Travel Service Pty Ltd (t/a Connection Holidays) v Elatri, unreported, FCA, Full Court, 22 May 1992: Williams, Civil Procedure Victoria, I 64.01.455.
8.In the present matter, while the making of a finding of contravening conduct was a necessary precondition for the grant of relief under s 298U, such a finding even when expressed in a declaration (as here) did not of itself determine any liability of that conduct to any of the forms of relief specified in the section. It “left undetermined the question whether any, and what [penalties] were payable”: Computer Edge Pty Ltd v Apple Computer Inc (1984) 54 ALR 767 at 768. It was not equivalent to an order awarding penalties “to be assessed”: cf Hall v Busst (1960) 104 CLR 206 at 218; and see generally on this distinction National Australia Bank Ltd v Maher (No 2), above, at 592-595.
9.The declaratory orders made were clearly interlocutory in character: see Australian Builders’ Labourers’ Federated Union of Workers - Western Australian Branch v J-Corp Pty Ltd (1993) 42 FCR 452 at 454. Leave to appeal is required.
Having found that leave was necessary, the Full Court of the Federal Court went on to refuse leave to appeal, and for reasons which the wife says are analogous to the present appeal, as follows:
12.… Other than to observe that the present applicants…are attempting to undertake the forbidding task of challenging what might be considered to be careful fact findings made in a setting of adverse findings on credibility, we refrain for the reasons we give below from expressing any view on whether any doubt attends the trial judge's decision.
…
15.It was, in a sense, fortuitous that the trial judge proceeded actually to make orders (rather than to foreshadow orders to be made) in advance of determining the question of penalties. It was this that provided the opportunity to institute the present “appeal”…
16.The consequences of the present applicants having sought to appeal prior to that determination are several. First, it interrupted the orderly and planned resolution of the matter in the manner foreshadowed by the trial judge and apparently acquiesced in by the parties; secondly, it effected no potentially significant saving in costs given that no evidence was to be called on the penalty issue; and, thirdly, it had the potential to fragment the appellate process itself in that, if leave was granted but the appeal was dismissed, a further appeal could be brought contesting any penalty later imposed. Such further appeal would be as of right as the order imposing penalties would ordinarily be a final order.
17.It is well accepted practice in the case of appeals in criminal matters that, exceptional cases apart, all considerations of convenience point to the Court entertaining an application for leave to appeal against conviction only after sentence has been passed…
18.Though the present is not a criminal matter, it is in our view sufficiently analogous in the circumstances in relation to the issue of leave to appeal as to warrant the adoption of a like approach for like reasons of convenience to those given by McInerney J. There was, in addition, no significant advantage to be secured, or detriment to be averted, in seeking to appeal prior to (rather than after) the making of an order on penalties. The course taken disrupted the intended finalisation of the matter. The foreshadowed appeal itself raised no issues of general importance. As we have noted, the challenge is to findings of fact and this in a setting where adverse credibility findings affected some of those findings. Even were we to assume that the trial judge’s decision was wrong, no substantial injustice to the unions and officials concerned would result. They will remain able to appeal at the usual and proper time, ie when final orders are made on the determination of penalties.
19.The course that has been taken by the applicants is not one to be encouraged. We would refuse leave to appeal.
(Emphasis added)
The wife relies upon further State Court authority for the proposition that, although declarations may be seen as final in their effect of a particular issue, they can nonetheless be interlocutory for the purposes of appeal provisions (see Kinsella v Gold Coast City Council [2015] 1 Qd R 274; Barnes v Australian Telecommunications Corporation [1996] 2 Qd R 1).
We agree with that proposition.
Lastly, as contended for by the wife, the appellants’ presentation of their case at first instance before the primary judge in relation to the requirement for leave to appeal was contrary to their position on appeal, and as a result, they should be precluded from now raising on appeal that leave is not required (Metwally v University of Wollongong (1985) 60 ALR 68 (“Metwally”)).
The wife objected to the appellants’ application for the primary judge to express her finding of fact as a declaratory order because of the very reason that it would provide the appellants with a vehicle to further delay the substantive case with an interlocutory appeal (at [20] and [25] of the 2019 reasons). Her Honour acknowledged this at the hearing on 6 June 2019, but suggested that the appellants would require leave to appeal and that the concerns raised by the wife could properly be made to the Full Court of the Family Court (see Transcript 6 June 2019, p.7
lines 1–20; and at [26] of the 2019 reasons). Queen’s Counsel for the appellants expressly adopted that course in urging her Honour to make the declaration and stated that “whether or not we obtain leave to appeal is a question for another court at another time” (Transcript 6 June 2019, p.7 lines 16–17). As such, it is contended that her Honour’s decision in making the declaratory order over the objection of the wife was expressly based in part on the operation of the leave requirements in the appeal court and an expectation engendered by Queen’s Counsel for the appellants that the requirement of leave to appeal would operate as a safeguard to ensure the wife’s concerns were properly assessed.
As a result of the above, we find that leave to appeal the declaratory order is required.
BACKGROUND
The husband was a business identity who achieved notoriety for his chain of businesses trading as Y Business. The husband passed away in 2018 aged 88 years.
The husband and the wife separated in 2006 after 18 years of marriage and 20 years of cohabitation. Their relationship produced three now adult children.
Mr Jess Jnr is the husband’s son from an earlier relationship with Ms D Jess. Ms C Jess is Mr Jess Jnr’s wife. Mr Ban is a director of X Corporation Pty Ltd (“XC”). Each of Mr Jess Jnr and Ms C Jess and Mr Ban were central witnesses in the proceedings before the primary judge and each are parties to the proceedings.
Following the 2006 separation, on 18 December 2006 the wife commenced property settlement proceedings pursuant to s 79 of the Act against the husband (“the first family law proceedings”).
In 1983 a unit trust known as the Y Unit Trust (“the YUT”) had been established by the husband with the company which became known as XC as trustee. Within the YUT was held the relevant corporate and business interests of what may conveniently be referred to as “the X business”. When the wife commenced the first family law proceedings XC was being operated by the husband in conjunction with Mr Jess Jnr as chief executive officer (“CEO”) and Mr Ban as a director. The wife’s application for property settlement contemplated that the assets of the XC/YUT, the X business, would form part of the property interests to be considered in the s 79 proceedings.
However on 30 March 2007, some three months after the wife had instituted the s 79 proceedings, the husband alleged that all of his previous interests in the YUT had passed to Mr Jess Jnr pursuant to the terms of the DODT bearing an execution date of 28 February 2002. Broadly stated, clause 6 of the DODT provided that if Mr Jess Jnr as CEO caused XC to achieve, as determined in its Management accounts, earnings before interest and tax (“EBIT”) of in excess of $10 million in any financial year within seven years of the date of the DODT, the trust interest would vest in Mr Jess Jnr. The husband contended that such triggering event had occurred in the 2006 financial year with the consequence that his previously held interests in the YUT via his unitholding had vested in Mr Jess Jnr. On that contention those interests, the X business, did not form part of the husband’s property interests for the purpose of the first family law proceedings.
It may be interpolated here that the substantial rationale for the DODT was contended by Mr Jess Jnr to be Mr Jess Jnr having the future expectation of entitlements as provided for in the DODT on the basis of trading XC and the X business out of serious financial difficulties as CEO. In this context a precursor to the DODT was said to be a 2 February 2002 letter Mr Jess Jnr had written to the husband seeking to establish Mr Jess Jnr’s security and future entitlements to XC if he was to devote himself to the business. This letter became known and referred to in the proceedings as “the Dear Dadda letter” and was characterised as being contemporaneous with, and corroborative of, the authenticity of the DODT.
On 24 July 2007 Mr Jess Jnr instituted proceedings in the Supreme Court of Victoria seeking declaratory relief against the husband, the wife and others to the effect that his entitlement under the DODT had vested and that he was thus entitled to be registered as the holder of the husband’s units in the YUT (“the trust proceedings”). The wife was the only party who opposed the relief sought by Mr Jess Jnr in the trust proceedings.
In the event, the trust proceedings and the first family law proceedings were resolved by agreement of all parties in September 2009. The parties to the trust proceedings entered into a Deed of Settlement on 20 September 2009 (“the Deed of Settlement”) and agreed to discontinue those proceedings in the Supreme Court of Victoria. Final property settlement orders, as between the husband and the wife, were made in the Family Court of Australia on 24 September 2009 (“the consent orders”) and the husband and the wife entered into a Binding Financial Agreement on 20 September 2009 (“the BFA”). The wife received certain property and some $17 million in assets.
The DODT was implemented in favour of Mr Jess Jnr. When the terms of the DODT were disclosed to the Australian Taxation Office (“the ATO”) it triggered a taxation liability for the husband initially claimed, in March 2009, at $53 million but later rising to a claim in the order of $92 million.
The husband was admitted to hospital twice in May 2010. In late May 2010 the husband told his daughter that he wanted to see the wife urgently. On 31 May 2010 the husband allegedly confessed to the wife to certain wrongdoing in the course of the first family law proceedings. The wrongdoing included his participation in duping the wife with respect to the DODT which the husband then claimed was a fraudulent document brought into existence well after the date it bears.
In September 2012 the wife returned to live in the husband’s home as his carer. On 16 April 2014 the wife instituted, by an Amended Initiating Application, the current proceedings pursuant to s 79A of the Act. In summary, by these proceedings the wife seeks to set aside the consent orders for property settlement and the Deed of Settlement from the trust proceedings, with the effect that any determination of her further final alteration of property interests could affect assets and financial interests relevant to the trust proceedings and which have been held or are now held by, inter alia, Mr Jess Jnr and other third parties in the substantive proceedings.
The wife’s Amended Initiating Application filed on 16 April 2014 seeks that pursuant to s 79A(1)(a) of the Act:
(a)The consent order be set aside on the basis that a miscarriage of justice has occurred by reason of fraud and the giving of false evidence by the husband; and
(b)An order for property adjustment as between the husband and the wife under s 79 of the Act in substitution for the consent order having regard to the husband’s property interests consequential upon the setting aside or rendering nugatory of the consent order, the Deed of Settlement, the DODT purportedly made on 28 February 2002, and the BFA.
The wife also seeks orders pursuant to s 106B of the Act to set aside the DODT or to have it declared a sham and further, pursuant to s 90K(1) of the Act, that the BFA entered into as part of the settlement in September 2009 be set aside.
The husband became bankrupt in the course of the substantive proceedings and his bankruptcy trustees were joined to the proceedings on 22 August 2016, but did not participate in the trial. Consequent upon the death of the husband in 2018, the wife’s Amended Initiating Application filed on 16 April 2014 was continued against the legal personal representative of the husband under s 79A(1C) of the Act.
As already noted, it has been necessary for a number of third parties who interests may be affected by the relief sought by the wife in the substantive proceedings to be joined as parties to the proceedings (“the represented third parties” or “the appellants”).
By an Application in a Case filed on 8 July 2014 the appellants sought an order that the wife’s Amended Initiating Application, which sought that the DODT purportedly made on 28 February 2002 be set aside and/or declared a sham, be determined as a preliminary issue.
On 29 July 2015 the appellants sought that the hearing listed to commence on 29 July 2015 concern the determination of one issue of fact, namely, when and by whom the DODT dated 28 February 2002 was executed.
Consistent with the evidence of the husband, the wife advanced a case that the DODT was not executed by the husband and was brought into existence in 2006 or 2007.
The primary judge addressed the issue to be determined as a discrete issue within the substantive s 79A proceedings in the 2018 reasons in the following terms:
33.At this point, I am only required to determine, as a matter of fact whether the DODT executed on the date that it bears. It is a finding about a factual issue from which consequential Orders may flow, but the consequential steps, such as the setting aside s79A(1)(a) and the wife’s s79 application, are not a matters for me to consider at this time. Of course, in terms of adducing evidence, the seriousness and far-reaching implications of the wife's applications under Part VII of the Act affect the process by which “reasonable satisfaction” will be reached about whether the DODT was executed on the date it bears. To that extent, the represented third parties have participated fully in, and have largely driven, the finding of fact as a separate issue as a preliminary step.
34.I accepted that, within the context of the wife's potential application under s79 of the Act, a finding that the DODT had been executed on the date that it bears would dispose of the wife’s application to have it set aside and/or declared a sham; it being common ground that the transactions contemplated by the DODT have been effected.
35.The Court’s power to decide an issue in isolation from other issues relevant to the Cause of Action finds expression in rule 10.14(b) of the Family Law Rules 2004 (Cth) (“FLR”) as “a hearing about a fact”. The bases for so doing are that
thedeciding an issue may dispose of all or part of the case (r10.13(a)), make a trial unnecessary (r10.13(b)), and/or save substantial costs (r10.13(d)). Perhaps ironically, for a hearing that has proceeded for 87 days against an initial estimate of 5 days, I remain of the view that any final hearing will be substantially shorter than it would have been if all issues were heard and determined contemporaneously (r10.13(c)).DECLARATORY RELIEF
36.The represented third parties have sought a declaration that the DODT was executed on 28 February 2002. This application was not made at the hearing or orally, and in fact is inconsistent with submissions of Senior Counsel for the represented third parties. It appears for the first time as paragraph four of their written closing submissions dated 30 August 2017. I will treat it as an application noting that the wife had a right to respond (although did not respond on this point).
(Tracked changes in original) (As per the original) (Footnote omitted)
As already noted, on 15 November 2019 the primary judge made the following declaration and the following order respectively, that are the subject of these appeal proceedings:
2.I declare that the Deed of Declaration of Trust dated 28 February 2002 was not executed on the date that it bears.
…
4.I dismiss the application of the Represented Third Parties that I recuse myself from these proceedings.
By Notice of Appeal filed on 13 December 2019 the appellants seek leave to appeal from Order 2 and, if leave is granted, for that order to be set aside. The appellants contend that they appeal as of right from Order 4 and seek that that order also be set aside. Taken from the appellants’ Notice of Appeal the relevant relief sought by the appellants in lieu of Order 4 is that an order be made disqualifying the primary judge from further hearing the proceedings.
The application for leave to appeal and the appeal is opposed by each of the wife and the third respondent.
Each of those respondents contend that the appellants require leave to appeal not only the declaration that was made but the order refusing the recusal application.
NATURE OF APPELLATE REVIEW
Before engaging with the challenges mounted on appeal it is necessary that we make some observations about the protracted nature of the proceedings before the primary judge.
We are of course mindful of our obligation, as an intermediate appellate court undertaking an appeal by way of rehearing, to undertake a real review of the proceedings below. However, we consider that this obligation is tempered where, as in this case, the proceedings below were unduly protracted and appear to involve extensive evidence going to some peripheral or irrelevant issues, or excessively protracted evidence.
Put simply, the discrete issue falling for determination by the primary judge, dealt with as a preliminary issue, was the authenticity of the DODT. Even accepting that issue to be laden with factual disputes, and its determination being driven by the need to carefully assess the credibility and evidence of a number of central witnesses, we cannot reconcile that it was strictly necessary for this case to occupy some 87 days (or part-days) of hearing time spanning the period from the commencement of the hearing on 16 July 2014 to the last written submission being filed more than three years later on 16 October 2017, even allowing for the interruption of an appeal on an interlocutory ruling concerning a disclosure issue. One consequence of the expansive approach is that the transcript of the proceedings thus far occupies 5,959 pages. The appeal book for this appeal occupies in excess of 7,300 pages.
Section 97(3) of the Act requires, inter alia, that the court endeavour to ensure that proceedings are not protracted. The Family Law Rules 2004 (Cth) impose specified responsibilities upon parties and lawyers (for example r 1.08) directed to ensuring that cases are resolved in a just and timely manner at a cost to the parties and the court that is reasonable in the circumstances of the case (r 1.04). These requirements have not been met in this case. Some obvious examples suffice to demonstrate this beyond the fact that the hearing occupied a total of 87 days spanning the time period referred to.
Because of his failing health, and the risk of the husband’s demise before the substantive proceedings could be heard, the husband’s cross-examination was not limited only to the issue of the authenticity of the DODT but embraced also the issues in the substantive proceedings. Even allowing for that expansion, and acknowledging that by reason of his ill-health the husband’s cross-examination was punctuated by adjournments, cross-examination of the husband took place over no less than 23 days between 5 September 2014 and 27 August 2015. During that cross-examination a total of no less than 262 exhibits were tendered into evidence.
Next, even though as the primary judge acknowledged the wife could not provide any direct evidence concerning the authenticity of the DODT(at [63] of the 2018 reasons), the appellants’ cross-examination of the wife was undertaken for a total period of some 22 hours over 7 separate days in February 2016 (at [58] of the 2018 reasons).
A final example, taken up with Queen’s Counsel for the wife in the course of argument of the appeal, concerns an interlocutory issue of disclosure. In summary, the wife sought disclosure of documents in relation to which Mr Jess Jnr claimed privilege, a claim which was eventually unsuccessful. We were informed from the bar table by reference to the relevant documents that the dispute in relation to this privilege claim occupied about 11 days of hearing time, albeit that Queen’s Counsel for the appellants took some issue with that total. In any event, it appears that the hearing time consumed by this dispute was out of proportion to the subject matter.
Whilst the appellants seek to emphasise our obligation to undertake a real review of the proceedings below we record that we do not intend to engage in any repetition of what occurred in the proceedings below by way of undue indulgence of peripheral issues or engagement with excessive evidence.
The appellants contend that a significant delay attended the primary judge delivering judgment with the consequence that it is incumbent upon this Court to look with special care upon any finding of fact challenged on appeal. The appellants point to the delay between the hearing of evidence and the delivery of the primary judge’s 2018 reasons. In reliance upon Expectation Pty Ltd v PRD Realty Pty Ltd (2004) 230 ALR 534 (“Expectation”), Tattsbet Ltd v Morrow (2015) 321 ALR 305 and Wallis & Manning (2017) FLC 93-759, the appellants submit that the fact of long delay weakens the primary judge’s advantage in having seen the oral and documentary evidence unfold in a coherent manner. On this basis the appellants contend that delay must be taken into account when reviewing findings made by the primary judge after a significant delay from the time when the relevant evidence was given.
Whilst the primary judge made numerous and detailed references to the trial transcript in the 2018 reasons we accept that in this case it is necessary to look with special care at the findings of fact challenged on appeal in the circumstances of there being a significant delay between the primary judge receiving the evidence and delivering the 2018 reasons.
We accept that this means, in practical terms, that an appeal court must ensure that the primary judge has provided a more comprehensive explanation than might otherwise be required. The Court in Expectation (at [71]–[72]) observed that, where there has been a significant delay:
(a)A more comprehensive statement of the relevant evidence than would normally be required should be provided by the trial judge in order to make manifest, to the parties and the public, that the delay has not affected the decision; and
(b)It is incumbent upon a trial judge to inform the parties of the reasons why the evidence of the particular witness has been rejected. It is necessary for the trial judge to say why he or she prefers the evidence of one witness over the evidence of other witnesses.
Expectation is also authority for the proposition that where a trial judge demonstrates by the reasons for judgment that full consideration has been given to all of the evidence, the parties and the public may be satisfied that the delay has not affected the decision. More specifically, if the reasons demonstrate that the delay has not weakened the trial judge’s advantage, confidence will be maintained in the decision (Expectation at [71]–[73]).
The 2018 reasons are extensive, running to 972 paragraphs and 298 pages, including annexures. The index to the 2018 reasons reflects that they deal with numerous witnesses and brackets of evidence on multiple topics. The affidavit evidence was extensive and the exhibits tendered during the trial were numerous. As already noted the appeal book comprises in excess of 7,300 pages.
Review of the 2018 reasons confirms that this fact-laden case required numerous factual findings by the primary judge on disparate issues, with the fact finding exercise being driven in large part by the assessments made by the primary judge of the demeanour and credibility of some 25 witnesses who were called to give oral evidence. The primary judge enjoyed the well-known advantages of a trial judge including the advantage of hearing and seeing the witnesses give evidence, and to consider and reflect upon the evidence as it unfolded in what turned out to be a lengthy trial.
In Fox v Percy (2003) 214 CLR 118 (“Fox v Percy”) the majority of the High Court expressed the advantage enjoyed by a trial judge in these terms, accepting that the appellate court:
23.…must, of necessity, observe the “natural limitations” that exist in the case of any appellate court proceeding wholly or substantially on the record. These limitations include the disadvantage that the appellate court has when compared with the trial judge in respect of the evaluation of witnesses’ credibility and of the “feeling” of a case which an appellate court, reading the transcript, cannot always fully share. Furthermore, the appellate court does not typically get taken to, or read, all of the evidence taken at the trial. Commonly, the trial judge therefore has advantages that derive from the obligation at trial to receive and consider the entirety of the evidence and the opportunity, normally over a longer interval, to reflect upon that evidence and to draw conclusions from it, viewed as a whole.
(Footnote omitted)
In Abalos v Australian Postal Commission (1990) 171 CLR 167 at 178 the High Court (per McHugh J, with whom Mason CJ, Deane, Dawson and Gaudron JJ agreed) cited the following observations of Lord Sumner in SS Hontestroom v SS Sagaporack [1927] AC 37 at 47 with approval:
…not to have seen the witnesses puts appellate judges in a permanent position of disadvantage as against the trial judge, and, unless it can be shown that he has failed to use or has palpably misused his advantage, the higher Court ought not to take the responsibility of reversing conclusions so arrived at, merely on the result of their own comparisons and criticisms of the witnesses and of their own view of the probabilities of the case. The course of the trial and the whole substance of the judgment must be looked at, and the matter does not depend on the question whether a witness has been cross-examined to credit or has been pronounced by the judge in terms to be unworthy of it. If his estimate of the man forms any substantial part of his reasons for his judgment the trial judge's conclusions of fact should, as I understand the decisions, be let alone.
In Devries v Australian National Railways Commission (1993) 177 CLR 472, Brennan, Gaudron and McHugh JJ observed at 479:
More than once in recent years, this Court has pointed out that a finding of fact by a trial judge, based on the credibility of a witness, is not to be set aside because an appellate court thinks that the probabilities of the case are against - even strongly against – that finding of fact. If the trial judge's finding depends to any substantial degree on the credibility of the witness, the finding must stand unless it can be shown that the trial judge “has failed to use or has palpably misused his advantage” or has acted on evidence which was “inconsistent with facts incontrovertibly established by the evidence” or which was “glaringly improbable”.
(Footnotes omitted)
None of the foregoing is intended to support a conclusion to the effect that the recognised advantages enjoyed by the primary judge relieve this Court of undertaking a “real review” of the evidence given at first instance. In Lee v Lee (2019) 266 CLR 129 the High Court cited numerous other authorities (including Fox v Percy; Robinson Helicopter Company Inc v McDermott (2016) 331 ALR 550; Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392; Thorne v Kennedy (2017) 263 CLR 85; and Warren v Coombes (1979) 142 CLR 531) when expressing this:
55.A court of appeal is bound to conduct a “real review” of the evidence given at first instance and of the judge’s reasons for judgment to determine whether the trial judge has erred in fact or law. Appellate restraint with respect to interference with a trial judge’s findings unless they are “glaringly improbable” or “contrary to compelling inferences” is as to factual findings which are likely to have been affected by impressions about the credibility and reliability of witnesses formed by the trial judge as a result of seeing and hearing them give their evidence. It includes findings of secondary facts which are based on a combination of these impressions and other inferences from primary facts. Thereafter, “in general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge”…
(Footnotes omitted)
In Fox v Percy¸ Gleeson CJ, Gummow and Kirby JJ observed:
28.Over more than a century, this Court, and courts like it, have given instruction on how to resolve the dichotomy between the foregoing appellate obligations and appellate restraint. From time to time, by reference to considerations particular to each case, different emphasis appears in such reasons. However, the mere fact that a trial judge necessarily reached a conclusion favouring the witnesses of one party over those of another does not, and cannot, prevent the performance by a court of appeal of the functions imposed on it by statute. In particular cases incontrovertible facts or uncontested testimony will demonstrate that the trial judge's conclusions are erroneous, even when they appear to be, or are stated to be, based on credibility findings.
29.That this is so is demonstrated in several recent decisions of this Court. In some, quite rare, cases, although the facts fall short of being “incontrovertible”, an appellate conclusion may be reached that the decision at trial is “glaringly improbable” or “contrary to compelling inferences” in the case. In such circumstances, the appellate court is not relieved of its statutory functions by the fact that the trial judge has, expressly or implicitly, reached a conclusion influenced by an opinion concerning the credibility of witnesses. In such a case, making all due allowances for the advantages available to the trial judge, the appellate court must “not shrink from giving effect to” its own conclusion. Finality in litigation is highly desirable. Litigation beyond a trial is costly and usually upsetting. But in every appeal by way of rehearing, a judgment of the appellate court is required both on the facts and the law. It is not forbidden (nor in the face of the statutory requirement could it be) by ritual incantation about witness credibility, nor by judicial reference to the desirability of finality in litigation or reminders of the general advantages of the trial over the appellate process.
(Footnotes omitted)
In this appeal the appellants bear the onus, in relation to seeking to have this Court interfere with factual findings of the primary judge, of demonstrating that the targeted finding is “glaringly improbable” or “contrary to compelling inferences” where any such finding can be seen as likely to have been affected by impressions about the credibility and reliability of witnesses. The question of delay goes to the scrutiny to be applied to the 2018 reasons in considering whether those reasons manifest that delay has not affected the fact finding task or weakened the primary judge’s advantage with respect to any challenged finding.
GROUNDS OF APPEAL IN RESPECT OF ORDER 2 OF THE ORDERS MADE ON 15 NOVEMBER 2019
Whilst we propose to deal with each ground of appeal discretely in topic form there is obviously significant overlap between some grounds and moreover the discussion of some grounds informs the discussion of others. For example, some of the broad grounds to be discussed are informed by some of the narrower particular grounds. To avoid repetition we will
cross-reference where necessary. The grounds of appeal are set out as stated in the Notice of Appeal filed on 13 December 2019, including typographical errors.
Ground 1: Wrong question determined
1.In circumstances where the primary judge had earlier ruled that the question to be determined by the Court was when and by whom the Deed of Declaration of Trust dated 28 February 2002 (DODT) was executed, the primary judge erred in holding that she was only required to determine as a matter of fact whether the DODT was executed on the date that it bears ([33]) and that it was not necessary for the wife to prove the date on which the DODT was executed ([53]).
Reference has earlier been made to the primary judge’s articulation of the issues to be determined as a preliminary issue.
At [49] of the 2018 reasons the primary judge set out the wife’s case followed at [50] by the reference to the wife’s burden of proof in the following terms:
49.The wife’s case is that the DODT was not executed on the date that it bears. The wife contends that the DODT:-
a) is not a copy of a genuine document;
b) was not executed on 28 February 2002;
c) was created sometime during the post-separation period of the husband and wife’s relationship and after the first meeting between the husband and divorce lawyers, P Lawyers, on 19 December 2006.
50.The burden of proof is governed by s 140 of the Evidence Act 1985 (Cth) which provides that proof is on the balance of probabilities. By virtue of the allegation of fraud and the gravity of matters alleged, clear or cogent or strict proof is necessary to satisfy the Court that the DODT was not executed on the date that it bears, namely 28 February 2002.
(As per the original)
Having set out the principles regarding the burden of proof by reference to authority, the primary judge then referred to the wife’s onus of proof in these terms at [53] of the 2018 reasons:
53.As the wife argued that the DODT was a fraud, the onus was on her to prove, on a balance of probabilities, that the DODT was not executed on 28 February 2002. The represented third parties submitted that as the wife “abandoned every other basis on which her claim was originally brought…” the onus was on her to prove that the DODT was typed by Mr Jess Jnr after he had shown a hand written copy to Mr M. They argue that the wife failed to discharge her burden of proving the DODT was not executed in February 2002 but was, in fact, produced by Mr Jess Jnr between 23 (or 29) January and 30 January 2007 and that she did not put this allegation to Mr Jess Jnr, Mr Ban or Ms C Jess in cross-examination. I do not accept that it is necessary for the wife to prove the date upon which the DODT was executed. I regard it as sufficient if she persuades me that it was not executed on 28 February 2002. As the thrust of the wife’s case is that the original DODT and the copy DODT did not exist in 2002, 2003, 2004 and 2005, if I am persuaded that the wife is correct on that count, then it follows that she has discharged the onus in relation to the DODT not having been executed on 28 February 2002. It is not necessary for me to be satisfied that the DODT was not produced until in or after January 2007.
It is tolerably clear when the 2018 reasons are read as a whole that the primary judge recorded findings that the DODT was fraudulent. There are numerous references to it in those terms.
At [604] of the 2018 reasons under the heading “[w]as the DODT created in 2006/2007?” the primary judge recorded this:
604.The wife will discharge her onus if she can demonstrate that the DODT was not executed on the date it bears. It was common ground that the wife does not need to establish the date on which the DODT was executed. However, she infers that it was created in the period from mid-2006, when the relationship between husband and wife was coming to an end, and 30 January 2007 when a copy was produced to Mr P. The represented third parties attempted to establish that there was evidence of the DODT existing in this period. They seek to rely on Mr Jess Jnr and Mr Ban’s evidence that the DODT was “raised and discussed” at a meeting with P Lawyers on 19 December 2006 and at a meeting with Mr CC on 9 January 2007.
There follows a detailed and extensive discussion of evidence relating to that topic. However, the point of emphasis for present purposes is that at [808] of the 2018 reasons the primary judge recorded a finding that “Mr Jess Jnr and Mr Ban were the drivers of creating the fraudulent DODT”. At [809] of the 2018 reasons the primary judge records this:
809.… The fact that Mr Jess Jnr and Mr Ban were so deeply involved in the early 2007 period in instructions to the divorce lawyers and preparing the Form 13 goes to the point that the DODT was fraudulently manufactured at some point significantly after 2002.
(Emphasis added)
Commencing at [965] of the 2018 reasons the primary judge set out a summary of her essential conclusions in the case. These bear quoting in full as follows:
965.In considering this matter I have regard to the very serious consequences which may flow from a finding that the DODT was not created on the date which it bears. In due course those consequences may include a loss of what was believed to be property interests of Mr Jess Jnr, the possibility that there will be a reduction in the assets owned or controlled by Mr Jess Jnr as a result of the wife’s potential s 79 claim (a matter which is yet to be decided) and tax consequences of unspecified proportions. There may also be criminal consequences or civil penalties imposed by reason of some of the main actors also being company office holders.
966.The matter is made more complex by the role of the husband. He “changed sides” over the life of the various Court proceedings both in this Court and in the Supreme Court of Victoria. I have earlier found that the husband had a tendency to allege fraud when it suited him and he did not want to comply with promises and agreements he made. Truthfulness was incidental to the husband. Little or no reliance can be placed upon what the husband says, what he told the wife at various times or any other evidence of the husband unless it is corroborated or unless independent plausible evidence standing apart from the husband’s evidence establishes to the requisite standard, facts which support a finding.
967.Those representing the wife have recognised that their client bore a burden to satisfy the Court of the fact alleged; that is that the DODT was not created on the date which it bears. They set about their task by constructing an elaborate case based upon an examination of many documents and pulling together the strands of a complicated story. They discharged their duties skilfully and diligently.
968.It is even harder for the wife because she was not privy to the alleged shenanigans. She was remote from the unscrupulous and dishonest conduct which, on balance, I am satisfied gave rise to the DODT. The burden lies with the wife to prove, on a balance of probabilities, that the DOD T was not executed on the date that it bears. She must satisfy the court, positively, of a negative proposition. I find that she has done so. In all of the evidence I have read and heard and reviewed, there has been no evidence, which I accept, which satisfies me that the DODT was in existence as at 2002 - which is not to reverse the onus but merely to state an obvious fact.
969.The husband’s credibility was demolished by the represented third parties. However, the successful attack, with its emphasis on his business dealings, attack and avoid strategies, habitual allegations of fraud and forgery, are entirely consistent with the husband having done precisely what the wife alleges. The probability of the DODT being in existence in 2002 was undermined by there being no credible evidence of the existence before 2006. The manner in which the DODT was allegedly brought into existence is implausible. When all of the elements, including the inability to produce an original document, the inability to verify its creation, the imprecision of its terms, the actions of Mr Jess Jnr and the husband which were inconsistent with its existence, that it was not implemented in accordance with its terms (as to a measurement against the Management accounts), it is an incredible scenario. There was the damaging contemporaneous evidence of the husband’s lawyers (Mr P, Mr N
’, Mr M, Ms Q and Ms R) encapsulated by the comment of Mr M that “it doesn’t pass the sniff test”. There was the articulation, by Mr Jess Jnr, that an alternative way of dealing with the ATO difficulties would be to disavow the DODT and about which I do not accept his explanation.970.A finding of fact is not a binary exercise. Satisfaction is reached by looking at all of the evidence including
thehow it was adduced and the way in which the evidence was given. The fact that the represented third parties damaged the wife’s case in many respects including with the metadata evidence, the wife’s animosity to Mr Jess Jnr, the death bed confession, does not detract from the convincing aspects of her case. That a convincing aspect of the wife’s case is the continual absence of credible evidence where, if the DODT existed in 2002, one would rationally expect evidence is referrable to the wife seeking to prove a negative position.971.The wife was confronted by well-resourced and skilfully represented opponents who prepared their case meticulously. It is the skill and diligence of those representing the represented third parties which eases the burden for the Court in reaching a conclusion. The Court can be certain that everything that could have been done was done and the evidence as it stands is the best evidence available. My findings on the evidence discussed above lead me to the conclude comfortably and on the balance of probabilities, that the DODT was not executed on the date that it bears.
(Tracked changes in original) (As per the original)
It is tolerably clear that the issue for determination as a preliminary issue was whether the DODT was a fraud having been created some years after the date it bears, or whether it was in fact executed on 28 February 2002. The wife bore the onus of proving that the DODT was a fraud on the basis that it was not in fact executed on 28 February 2002 but was created on a date during or after 2006.
The primary judge expressed the findings to which we have referred reflecting that the primary judge was satisfied that the wife had discharged her onus of proof.
We consider that the wife’s onus of proof could not feasibly have extended to proving precisely when the DODT was created and by whom. The wife contended that she was a victim of fraud. She proved that by proving the DODT was not entered into on the date which it bears but was created years later. We do not consider that the wife’s onus of proof extended to proving when and by whom precisely the fraudulent document was created, albeit that the primary judge recorded the finding to which we have referred that “Mr Jess Jnr and Mr Ban were the drivers of creating the fraudulent DODT” (at [808] of the 2018 reasons).
We also do not consider that the exchanges in final submissions at trial support any proposition to the effect that the appellants were unaware of the issue in relation to which the wife bore the onus of proof. The following transpired in the course of exchanges between the primary judge and Queen’s Counsel for the appellants:
[QUEEN’S COUNSEL FOR THE APPELLANTS]: Yes. For completeness, we understand my learned friend has closed his case and we said that we would give consideration to whether we wanted to request [Mr Jess Snr] again for further cross-examination. Your Honour, we do not. So we regard [Mr Jess Snr’s] case as closed as well. So, your Honour, to open the case on behalf of the Appellants, your Honour, the issue for determination in this part of the proceeding is on what date was the deed of declaration of trust bearing the date 28 February 2002 executed. That comes out of your Honour’s ruling.
HER HONOUR: Isn’t it really whether it was executed on the date that it bears?
[QUEEN’S COUNSEL FOR THE APPELLANTS]: I’m drawing that language from the ruling your Honour made on 29 July 2015.
HER HONOUR: I might not have said it very well. But I don’t — if find that it was not — if it was executed years afterwards, I don’t need to be satisfied as to what specific date years afterwards.
[QUEEN’S COUNSEL FOR THE APPELLANTS]: Well, we say that the date — well, our case, your Honour, is that, as your Honour knows, it was – it was executed on the date that it bears.
HER HONOUR: Right.
[QUEEN’S COUNSEL FOR THE APPELLANTS]: The case that we’ve had to meet is that it was executed at a later time. We’ve heard the evidence of [Mr Jess Snr] which was that he first became aware of it on 27 March 2007. That’s why your Honour may not be able to determine with precision, if your Honour does not accept our case, what date the deed of declaration of trust was executed. But we say for our part it was executed on the day that it bears and that has always been our case, and it certainly was not executed in 2006 or 2007. Your Honour, we say that the declaration of trust was a product of two necessities which arose in January and February of 2002.
(Transcript 2 December 2016, p.1017 line 20 to p.1018 line 3) (Emphasis added)
We find no substance in the complaint that the primary judge determined the wrong question. It is clear that the primary judge concluded that the DODT was fraudulent and that was the ultimate question to be determined.
Ground 2: Standard of proof not satisfied
2.Given that the allegations concerning the DODT were matters of the utmost gravity, such that clear, cogent and strict proof was necessary in accordance with section 140 of the Evidence Act 1995 (Cth), the primary judge erred in finding that:
(a) the DODT was not executed on 28 February 2002 ([968]);
(b) “unscrupulous and dishonest conduct” gave rise to the DODT ([968]);
(c) the Dear Dadda letter was a “document manufactured to be evidence in a case” ([187]) and “a document constructed to lend authenticity to the DODT” ([188]);
(d) the 4 September 2006 documents:
(i)“were invented to facilitate a false trail of evidence to corroborate the existence of the DODT prior to 19 December 2006” ([560]);
(ii)“the 4 September documents were created to undermine the wife’s case” ([570]);
(iii)“the only plausible explanation of the creation of the documents is that the documents were created by someone who wished to prove that the DODT was executed on the date it bears” ([579]);
(iv)“even if the husband’s signatures were genuine, the 4 September documents could still have been created by or at the direction of the husband assisted by Mr Jess Jnr and Mr Ban and for the fraudulent purposes.”[547]; and
(e)the documents annexed to the supplementary affidavit of Mr V were not authentic ([277], [285] and [321]).
The primary judge ought to have found that Ms Jess’s case rose no higher than inexact proofs, indefinite testimony and indirect inferences such that the Court could not be reasonably satisfied to the requisite standard that the DODT was not executed on 28 February 2002.
The primary judge was clearly cognisant of the “very serious consequences” which may flow from a finding that the DODT was not authentic, referring to such consequences at [965] of the 2018 reasons which we have already quoted above.
The primary judge articulated the applicable standard of proof by reference to authority in the following terms at [49]–[57] of the 2018 reasons:
49.The wife’s case is that the DODT was not executed on the date that it bears. The wife contends that the DODT:-
a) is not a copy of a genuine document;
b) was not executed on 28 February 2002;
c)was created sometime during the post-separation period of the husband and wife’s relationship and after the first meeting between the husband and divorce lawyers, P Lawyers, on 19 December 2006.
50.The burden of proof is governed by s 140 of the Evidence Act 1985 (Cth) which provides that proof is on the balance of probabilities. By virtue of the allegation of fraud and the gravity of matters alleged, clear or cogent or strict proof is necessary to satisfy the Court that the DODT was not executed on the date that it bears, namely 28 February 2002.
51. As Gordon J recently stated in Re Day (citations omitted):
[15] “Where, as here, fraud is alleged, “reasonable satisfaction” is not produced by inexact proofs, indefinite testimony, or indirect inferences. This does not mean that the standard of persuasion is any higher than the balance of probabilities. It does mean that the nature of the issue necessarily affects the process by which the reasonable satisfaction is reached.
[16] Why? There is a conventional perception that members of society do not ordinarily engage in fraudulent conduct and a Court should not lightly make a finding that, on the balance of probabilities, a party to civil litigation has been guilty of such conduct.
[17]The nature of the allegation requires, as a matter of common sense, the careful weighing of testimony, the close examination of facts proved as a basis of inference and, on appeal, a comfortable satisfaction that the tribunal reached both a correct and just conclusion.
[18] The tribunal must feel an actual persuasion of the occurrence or existence of a fact before it can be found. Where direct proof is not available and satisfaction of the civil standard depends on inference, “there must be something more than mere conjecture, guesswork or surmise”- there must be more than “conflicting inferences of equal degrees of probability so that the choice between them is [a] mere matter of conjecture”. An inference will be no more than conjecture unless some fact is found which positively suggests, or provides a reason in the circumstances particular to the case, that a specific event happened or a specific state of affairs existed. ”
52. Re Day is consistent with the earlier decision of Palmer and Dolman [2005] NSW CA 361 which summarises the position where fraud is to be inferred from circumstantial evidence, as follows:-
The relevant principle in regard to civil cases was expressed by the High Court in the case of Bradshaw and McEwans Pty Ltd (1951) 217 ALR 1 at 5, in a passage referred to as having been repeated many times. The passage is:-
“Of course as far as logical consistency goes many hypotheses may be put which the evidence does not exclude positively. But this is a civil and not a criminal case. We are concerned with probabilities, not with possibilities. The difference between the criminal standard of proof in its application to circumstantial evidence and this civil is that in the former the facts must be such as to exclude reasonable hypotheses consistent with innocence, while the latter you need only circumstances raising a more probable inference in favour of what is alleged. On questions of this sort, where direct proof is not available, it is enough in the circumstances appearing in the evidence give rise to a reasonable indefinite inference: they must do more than give rise to conflicting inferences of equal degrees of probability so that the choice between them is mere matter of conjecture: (see per Lord Robson, Richard Evans & Co Ltd v Astley [1911] AC 674, at 687). But if circumstances are proved in which it is reasonable to find a balance of probabilities in favour of the conclusion sought them, though the conclusion may fall short of certainty, it is not to be regarded as mere conjecture or surmise - there must be more than “conflicting inferences of equal degrees of probability so the choice between them is [a] mere matter of conjecture”. An inference will be no more than conjecture unless some fact is found which positively suggests, or provides a reason in the circumstances particular to the case, that a specific event happened specific state of affairs existed.”
The civil standard proof is not a simple matter of belief and persuasion but of “reasonable satisfaction” following a real search for the truth and evaluating the evidence adduced. The evaluative process has regard to the matters mentioned in s140(2) and other relevant variable factors, including those referred to by Sir Owen Dickson in Briginshaw v Briginshaw, being the inherent unlikelihood of an occurrence of a given description or the gravity of the consequences flowing from a particular finding and the parties’ respective power or capacity to produce or contradict the evidence. It takes account of the instinctive judicial feeling that even in civil proceedings a Court should be surer before finding serious allegations proved than when deciding less serious or trivial matters. The law looks for probability not certainty and envisages a degree of probability to the point that it can be satisfied that the alleged fact in issue is more likely than not.
Where, as here, proof of a fact in issue hinges on rational inferences based on circumstantial, as distinct from, direct evidence, the conclusion contended for must be rational and reasonably open. There has to be something more than mere conjecture or suspicion. A proposition is proved on the balance of probabilities in a circumstantial case when the combined weight or preponderance of the totality of the available evidence favours it as the most likely explanation. The more information consistent with one of a number of competing hypotheses, the more probable that explanation becomes.
53. As the wife argued that the DODT was a fraud, the onus was on her to prove, on a balance of probabilities, that the DODT was not executed on 28 February 2002. The represented third parties submitted that as the wife “abandoned every other basis on which her claim was originally brought…” the onus was on her to prove that the DODT was typed by Mr Jess Jnr after he had shown a hand written copy to Mr M. They argue that the wife failed to discharge her burden of proving the DODT was not executed in February 2002 but was, in fact, produced by Mr Jess Jnr between 23 (or 29) January and 30 January 2007 and that she did not put this allegation to Mr Jess Jnr, Mr Ban or Ms C Jess in cross-examination. I do not accept that it is necessary for the wife to prove the date upon which the DODT was executed. I regard it as sufficient if she persuades me that it was not executed on 28 February 2002. As the thrust of the wife's case is that the original DODT and the copy DODT did not exist in 2002, 2003, 2004 and 2005, if I am persuaded that the wife is correct on that count, then it follows that she has discharged the onus in relation to the DODT not having been executed on 28 February 2002. It is not necessary for me to be satisfied that the DODT was not produced until in or after January 2007.
54.The task at hand is to reach a conclusion on where the truth lies assisted by, but not limited to, the civil standard of the balance of probabilities. That is, I do not need to stop short of considering what in truth occurred but I must, at the very least, be satisfied on the balance of probabilities that something did or did not happen before I make a finding to that effect.
55.In Whisler & Whisler [2010] Fam CAFC 18, Warnick J stated that a judge need not specifically deal with every possibility raised in a case. His Honour referred to the comments by Gleeson CJ, McHugh and Gummow JJ in Whisprun Pty Ltd (formerly Northwest Exports Pty Ltd v Dixon (2003) 200 ALR 446 at [62]:
[...] A judge's reasons are not required to mention every fact or argument relied on by the losing party as relevant to an issue. Judgments of trial judges would soon become longer than they already are if a judges failure to mention such facts and arguments would be evidence that he or she had not properly considered the losing party's case.
56.I would have liked these Reasons to be shorter but judicial fact finding is of its nature methodical, uncreative, and particular. This is a fact-heavy case which spans 2002 to 2010 sometimes in minute detail and from a number of perspectives. The practitioners for the parties have trawled through an enormous amount of evidence to extract every point they think could help them and/or damage their opponent(s) to establish if the DODT was executed on the date it bears. Not much remains obscure.
57.I have reflected on the evidence relevant to the date on which the DODT was executed and I have tried to deal with most of the submissions. Just because I have not mentioned a fact or an argument does not mean that it is a matter to which I have not had regard.
(As per the original)
Again, whilst the primary judge spoke in terms of a “probability” there was no certainty at all about a further listing of the matter. There was, as would be obvious, certainly no particular questions the primary judge could then have had in mind. The primary judge was simply allowing for a contingency in the event that there were remaining questions once her Honour had considered the written submissions.
The appellants filed lengthy written closing submissions traversing every aspect of the evidence before the Court which they sought to address to the primary judge. The appellants’ submissions ran to some 100 pages with more than 1,000 footnotes. The wife’s submissions consisted of 81 pages with 116 footnotes. The appellants’ submissions in reply were a further 59 pages with a further 460 footnotes. In summary, the primary judge considered a total of 240 pages of detailed written submissions that included reference to a total of more than 1,608 footnotes.
On the hearing of the appeal we gave leave to the appellants, there being no objection by the wife or the third respondent, to receive by way of further evidence on appeal the affidavit of the solicitor for the appellants filed on 4 September 2020 setting out communications between the Court and the parties that occurred following final submissions in the trial.
On 24 September 2018 the primary judge’s Associate sent correspondence to the parties which:
(c)Asked that Queen’s Counsel for the parties confer as to a suitable date for a mention after 31 October 2018; and
(d)Stated that the primary judge will make an order in Chambers requesting further information from the parties in sufficient time for counsel to prepare any responses.
On 16 October 2018 the primary judge’s Associate sent an email to the parties’ lawyers in which she said that the matter had been listed for a further mention at 10.00 am on 2 November 2018.
On 31 October 2018 the primary judge’s Associate sent an email to the parties’ lawyers stating that the primary judge will not be in a position to provide questions prior to the current listing on Friday, 2 November 2018, requesting that the provision of questions be delayed for one week and that the matter be listed on 8 or 9 November in lieu of 2 November 2018.
On 1 November 2018 Queen’s Counsel for the wife sent an email to the primary judge’s Associate on behalf of himself and Queen’s Counsel for the appellants stating that “[i]t would be most helpful if we could receive [h]er Honour’s questions/list of issues to be raised at the proposed further mention” to determine:
(e)How long each side might need to digest, and be in a position to respond to those questions; and
(f)How much Court time, if any, will be necessary or whether the matters raised can be dealt with by further written submissions.
On 1 November 2018 the primary judge’s Associate sent an email to the parties’ lawyers stating that the joint proposal of Queen’s Counsel for the parties was suitable to her Honour, that the hearing on 2 November 2018 would be vacated and the parties would be advised “in due course of an order with questions/list of issues”.
On 30 November 2018 the primary judge’s Associate sent an email to the parties’ lawyers stating that “[h]er Honour has directed that I advise the parties that, further to the letter from Chambers dated 24 September 2018, there will be no further mention of this matter or an order made requesting further information from the parties”.
It was on 4 December 2018 that the primary judge published the December 2018 reasons.
It is tolerably clear from the above chronology that whilst the primary judge may have held a preliminary view that she might need the assistance or further assistance by the direction of a list of questions or a list of issues to be addressed by the parties, the primary judge ultimately resolved that this was not required. No error is demonstrated in anything that transpired concerning the primary judge’s communications in this respect.
This is not a case where the appellants sought an opportunity to make oral submissions but were denied that opportunity. It was the primary judge who raised the prospect that she may need “further assistance” once she had received and considered written submissions. In the event, unsurprisingly given the extent and detailed nature of the submissions received, the primary judge did not turn the prospect of a further hearing into a reality.
The right to procedural fairness requires that before a person can be adversely affected by an order that party must be afforded an adequate opportunity to be heard (Allesch v Maunz (2000) 203 CLR 172). The appellants were afforded the opportunity to be heard and took that opportunity by filing extensive written submissions.
Nothing which fell from the primary judge either in terms of the statements the primary judge made in Court as referred to or the terms of the order the primary judge made on 19 July 2017, which reserved until the filing of written submissions the question of “whether” there would be a further mention of the matter, rendered it unclear to any interested party that there would certainly be some further mention or further opportunity to make yet further submissions.
As is pointed out by the wife, had the appellants sought to make further oral submissions or to seek a listing to argue for the right to do so, they had four days after the 30 November 2018 notice from the Court concerning the listing of the matter for the delivery of the 2018 reasons in which to do so.
We also accept the wife’s submission that it is unclear as to any asserted nexus between this ground of complaint and the appellants’ complaints about typographical and transcription errors and the alleged pressure to publish the judgment.
In this context the authorities relied upon by the appellants are directed to the risk that if a trial judge is under pressure to deliver a judgment at the last minute, the decision that is easiest to make and express will have great psychological attraction. However, when regard is had to the length and detail of the primary judge’s 2018 reasons, including the extensive
cross-referencing to transcript evidence and exhibits, we do not see how this decision can be characterised as one being the easiest to make and express.
We find no merit in this ground.
GROUNDS OF APPEAL IN RESPECT OF ORDER 4 OF THE ORDERS MADE ON 15 NOVEMBER 2019
Ground 26: Failure by the primary judge to disqualify herself
41.The primary judged erred in failing to disqualify herself from the further hearing of the proceeding in circumstances where her Honour:
(a) had found that a fraud had been committed by Mr Jess Jnr and Mr Ban;
(b)had found that Mr Jess Jnr, Mr Ban and Ms C Jess lacked both credit and credibility as witnesses; and/or
(c)appeared to have pre-judged two issues in relation to which the Represented Third Parties had not yet had an opportunity to file evidence and make submissions.
42. The primary judge:
(a)misapplied the proper test to determine whether a judge is disqualified by reason of the appearance of bias; and
(b)failed to find that a fair-minded lay observer might reasonably apprehend that her Honour might not bring an impartial mind to the remaining issues still to be determined in this proceeding.
43. The primary judge ought to have:
(a)found that the matters set out in paragraphs 41(a), (b) and/or (c) might cause a fair minded lay observer reasonably to apprehend that her Honour might not bring an impartial mind to the issues still to be determined in this proceeding; and
(b) disqualified herself from further hearing the proceeding.
On the hearing of the appeal Queen’s Counsel for the appellants emphasised that this part of the appeal was not in any way directed to Order 2 of the orders made on 15 November 2019 regarding the declaration that the DODT was not executed on the date it bears. Queen’s Counsel for the appellants sought to emphasise this as a discrete appeal dealing with the discrete application made to the primary judge that, having regard to the 2018 reasons, it was no longer possible for the primary judge to preside in any further hearing of the proceedings and that she ought recuse herself.
Following the delivery of the 2018 reasons the appellants brought an application that the primary judge recuse herself from the proceedings. That application was heard on 6 June 2019 and on 15 November 2019 the primary judge delivered reasons for judgment and made Order 4 dismissing the application that she recuse herself.
The recusal application is addressed by the primary judge at [31] and following in the 2019 reasons.
At [35]–[41] of the 2019 reasons the primary judge set out the tests of apprehended bias by reference to the authorities in Johnson v Johnson (2000) 201 CLR 488; Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 (“Ebner”) and British American Tobacco Australia Services Ltd v Laurie (2011) 242 CLR 283 (“BATAS”). It is not contended by the appellants that the primary judge misstated or misapprehended the principles to be applied concerning a complaint of apprehended bias.
Rather, the focus of the appellants’ challenge is upon the primary judge’s application of principle and it is contended that the primary judge misapplied the test by erroneously focusing on whether the fair-minded lay observer would have agreed with the primary judge’s adverse findings, rather than by focusing on whether that observer might reasonably apprehend that the primary judge might not bring an impartial mind to the remaining issues still to be determined by reason of those adverse findings. The appellants contend that this is made clear from the primary judge’s statement at [55] of the 2019 reasons as follows:
55.… Doing the best I can to see the evidence from the perspective of a
fair-minded lay observer I conclude that he/she would himself/herself be reasonably sceptical about how the Represented Third Parties say the terms of the Deed of Declaration of Trust were negotiated. The observer would be sceptical about how and by whom the Deed was created and why there were no records independently of Mr Ban, Mr Jess Jnr and Ms C Jess as to the existence of the Deed of Declaration of Trust much before a critical time in the marriage of the husband and wife.
We accept the contention of the appellants that her Honour’s statement at [55] of the 2019 reasons reflects a misapplication of the relevant test. With respect to the primary judge, it is in the circumstances of this case misplaced to focus upon whether or not a fair-minded lay observer would have doubts about the conduct of Mr Jess Jnr, Ms C Jess and Mr Ban and that therefore there is no relevant apprehension. The focus of the test must be upon whether a
fair-minded lay observer might reasonably apprehend that the primary judge might not bring an impartial mind to resolution of the remaining issues still to be determined in the proceedings.
As we have discussed in addressing Grounds 1–25 of this appeal, the 2018 reasons contain numerous seriously adverse findings as to the credit and credibility of each of Mr Jess Jnr, Mr Ban and Ms C Jess. Those findings are expressed in unqualified terms. That almost inevitably gives rise to a reasonable apprehension of bias. As was observed by the New South Wales Court of Appeal in Australian National Industries Ltd v Spedley Securities Ltd(in liq) (1992) 26 NSWLR 411 at 442 (per Mahoney JA, with whom Meagher JA agreed):
…that a previous decision of the same fact or upon the credibility of a relevant witness will create such an apprehension, normally if not inevitably.
In the 2019 reasons the primary judge referred at some length to the decision of Besanko J in Bob Jane Corporation Pty Ltd v ACN 149 801 141 Pty Ltd [2015] FCA 1343, a case to which she was referred by the applicants in the application for recusal (now the appellants). Her Honour discussed that case at [67]–[70] of the 2019 reasons and it is useful to set out that discussion given our acceptance of Besanko J’s discussion and application of the relevant principles:
67.Mr Waller relied otherwise on the decision of Besanko J of the Federal Court of Australia, Bob Jane Corporation Pty Ltd v ACN 149 801 141 Pty Ltd [2015] FCA 1343, Besanko J determined that he should recuse himself from hearing a second contempt application. The matter involved the husband. Mr Waller appeared for Bob Jane Corporation Proprietary Limited on the instructions of husband. Orders were made by Besanko J that husband not trade as a business under a name that includes “Jane” or trade as a business under or by reference to a trade mark that is deceptively similar to the “Bob Jane” trademark. Besanko J held that husband and a number of the other respondents had been guilty of contempt of such orders. He had stated in his reasons when making the original orders (Bob Jane Corporation Pty Ltd v ACN 149 801 141 Pty Ltd [2014] FCA 637):
16. Thirdly, as I have already noted, the fourth respondent swore two affidavits which were tendered at the hearing. In addition, he was cross examined by counsel for the applicant. Although by the time all the evidence was in there were not many factual disputes between the parties, I did not find the fourth respondent’s evidence particularly convincing. I say that because in a number of areas I thought I was given only half of the story, and some of the explanations were not wholly convincing…Finally, I mention a matter which, on the face of it, appears to be quite a minor matter, but which nevertheless affected my confidence in the reliability of the fourth respondent’s evidence. In his first affidavit sworn on 4 March 2014, the fourth respondent said that he had forwarded the resolution changing the second respondent’s name to the Australian Securities and Investments Commission (“ASIC”), whereas in his second affidavit sworn on 6 March 2014, he said that he did that between swearing his affidavit of 4 March 2014 and his affidavit of 6 March 2014. If in fact that is to be explained by a distinction between the resolution and the Notification of Resolution, then that should have been made clear in the fourth respondent’s affidavit.
[…]
56. Before leaving the findings I have made as to each of the contempts, I should record the fact that I think each breach was wilful and in contumacious disregard for the orders made on 26 November 2013 (see TiVo Inc v Vivo International Corporation Pty Ltd [2013] FCA 1340, at [8] per Pagone J). The fourth respondent was aware of the content of the orders and he made no effort to comply, or cause the other respondents to comply, until shortly prior to the hearing. He sought to deflect responsibility to comply with the orders by suggesting that in some way they fell within proceedings in the Family Court.
68.Besanko J relied on Eber, Livesey and R v Watson; Ex Parte Armstrong (1976) 136 CLR 248 (“Watson”) for the apprehended bias test, and stated:
Ordinarily, 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 where the judge in a previous case has expressed clear views, either about a question of fact which constitutes a live and significant issue in the subsequent case, or about the credit of a witness whose evidence is of significance on such a question: Livesey v New South Wales Bar Association (1983) 151 CLR 288 at 300. (See also The Queen v Watson; Ex parteArmstrong (1976) 136 CLR 248 at 265-266 per Barwick CJ, Gibbs, Stephen and Mason JJ.)
It has been said many times that judges do not choose their cases and they have a duty to sit on the cases which have been assigned or allocated to them. A judge should not accede too readily to applications that he or she disqualify themselves for bias. Having said that, the High Court said there may be cases where the objection is substantial and it may be appropriate for the judge to disqualify himself or herself in a case of real doubt: Re JRL; Ex parte CJL (1986) 161 CLR 342 at 352 per Mason J; Ebner at 348 [19] [20].
There will be cases which are not black and white where a decision-maker has gone some way towards revealing a view about an issue of fact or an issue of credit. That might come about because a decision-maker has made a general statement and is asked to disqualify himself or herself in a subsequent case involving a specific example said to relate to the general statement. It might come about because of a provisional statement or finding in a matter and then an application for disqualification (Johnson v Johnson (2000) 201 CLR 488 at 493 [13] per Gleeson GJ, Gaudron, McHugh, Gummow and Hayne JJ). The question is not whether the decision maker’s mind is blank, but whether it is open to persuasion: Minister for Immigration and Multicultural Affairs v Jia Legeng (2001) 205 CLR 507 (“Jia”) at 531 [7] per Gleeson CJ and Gummow J.
…
I have considered, in relation to the observations set out in paragraphs 16 and 56 of the June 2014 reasons, whether I expressed final or merely provisional conclusions. It is to be remembered that I am to answer this question not by what I intended, but by what a fair-minded lay observer would understand the words to mean. I think he or she would consider that I had formed an adverse view of the fourth respondent’s credit and reliability. I do not think it matters how important the observations were in terms of the issues but, in any event, they could not be considered merely peripheral.
I have considered whether the fourth respondent’s credit could be in issue on the applicant’s application. I frame the issue in this way because it is always possible that he will not give evidence or the case will be decided on an unrelated ground or matter. I am entitled to be satisfied that there is at least a reasonable possibility the fourth respondent’s credit will be in issue. I am so satisfied having regard to his affidavit and the fact that he is the respondent to the charge. At the same time, I do not think that the fourth respondent must establish as a matter of certainty that his credit and reliability will be in issue.
Having regard to the above matters, I am satisfied that I should disqualify myself from hearing this proceeding because I have previously made findings in relation to the fourth respondent’s credibility and there is sufficient prospect that his credibility will be in issue in this proceeding. I will order that the applicant’s application be transferred to another judge for hearing and determination.
69.The Represented Third Parties submit that in Bob Jane Corporation Pty Ltd v ACN 149 801 141 Pty Ltd [2015] FCA 1343, where the findings made were “moderate” and Basenko J was not satisfied with certainty that issues of credit would be raised again in the contempt application, Basenko J recused himself nonetheless.
70.The distinguishing feature between Bob Jane Corporation Pty Ltd v ACN 149 801 141 Pty Ltd and this case is that Basenko J had concluded a discrete application in the proceedings, a contempt application, where as we are part way through a trial in which I have heard the husband’s evidence and saw it tested.
(As per the original) (Footnotes omitted)
As can be seen from [71] of the 2019 reasons the primary judge distinguished this case from that before Besanko J on the basis that the case before Besanko J concerned credit findings made in a separate proceeding.
With respect to the primary judge, that distinction would appear to overlook what the High Court has said in numerous cases, including in R v Watson; Ex parte Armstrong (1976) 136 CLR 248 (at 64); Livesey v NSW Bar Association (1983) 151 CLR 288 (at 300) and BATAS (at [145]). In BATAS Heydon, Kiefel and Bell JJ stated:
145.Whenever a judge is asked to try an issue which he or she has previously determined, whether in the same proceedings or in different proceedings, and whether between the same parties or different parties, the judge will be aware that different evidence may be led at the later trial…
In the circumstances of this unusual case, a reasonable observer might possibly apprehend that at the trial the Court might not move its mind from the position reached on one set of materials, even if different materials were presented at the trial.
In this case, we accept the submission of the appellants that a reasonable observer, having read the various serious credit and fraud findings that the primary judge made adverse to the appellants in one stage of the proceedings, might reasonably apprehend that her Honour might not move her mind in dealing with issues of credit in the next phase of the proceedings. We accept that the primary judge’s approach reflects an error in the application of the test.
One exception to the apprehension of bias rule is the doctrine of necessity which is raised by the Notice of Contention filed on 3 January 2020 by the third respondent.
The doctrine of necessity is principally directed to a situation where the members of a court or tribunal are affected by an apprehension of bias and in such a case, the rule of necessity applies to ensure that the court or tribunal is not prevented from performing its statutory function. In Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 Mason CJ and Brennan J observed at 88–89:
The second reason for rejecting the appellant's case is that, in any event, even if, contrary to the view which we have expressed, there be a case for holding that a reasonable apprehension of bias attaches to all the members of the Tribunal, the operation of the rule of necessity would ensure that the Tribunal is not disabled from performing its statutory functions. The rule of necessity permits a member of a court who has some interest in the subject-matter of the litigation to sit in a case when no judge without such an interest is available to sit: Dimes v. Proprietors of Grand Junction Canal. The existence of the principle has been recognized in this Court by Isaacs J. in Dickason v. Edwards, and by Brennan and Deane JJ. in Builders’ Registration Board of Queensland v. Rauber. In the latter case, Brennan J. had no hesitation in holding that the principle applied to a statutory tribunal as well as to a court. And Deane J. acknowledged that this might be so. The conclusion reached by Brennan J. upon this point conforms to principle and to received opinion in other common law jurisdictions: see the citations in Rauber. The rule of necessity gives expression to the principle that the rules of natural justice cannot be invoked to frustrate the intended operation of a statute which sets up a tribunal and requires it to perform the statutory functions entrusted to it. Or, to put the matter another way, the statutory requirement that the tribunal perform the functions assigned to it must prevail over and displace the application of the rules of natural justice. Those rules may be excluded by statute: Twist v. Randwick Municipal Council; Salemi v. MacKellar [No. 2]; FAI Insurances Ltd. v. Winneke.
(Footnotes omitted)
Whilst Deane J expressed agreement with Mason CJ and Brennan J, his Honour also emphasised some qualifications to the rule of necessity in the following terms at 96:
I agree with Mason C.J. and Brennan J. that the rule of necessity is, in an appropriate case, applicable to a statutory administrative tribunal, as it is to a court, to prevent a failure of justice or a frustration of statutory provisions. That rule operates to qualify the effect of what would otherwise be actual or ostensible disqualifying bias so as to enable the discharge of public functions in circumstances where, but for its operation, the discharge of those functions would be frustrated with consequent public or private detriment. There are, however, two prima facie qualifications of the rule. First, the rule will not apply in circumstances where its application would involve positive and substantial injustice since it cannot be presumed that the policy of either the legislature or the law is that the rule of necessity should represent an instrument of such injustice. Second, when the rule does apply, it applies only to the extent that necessity justifies.
Gaudron & McHugh JJ observed at 102:
Our conclusion that no reasonable bystander would reasonably fear that the members of the Tribunal would bring unfair or prejudiced minds to the inquiry makes it unnecessary for us to determine whether the doctrine of necessity applies to the case of a person who is reasonably suspected of prejudging an issue which arises for decision by him or her. Whatever the precise scope of the doctrine of necessity in the natural justice context, it seems contrary to all principles of fairness that, on the ground of necessity, a person should have to submit to a decision made by a person who has already prejudged the issue. Likewise, there seems much to be said for the view that, in the absence of a contrary statutory intention, the ground of necessity should not require a person to submit to a decision made or to be made by a person who is reasonably believed to have prejudged the issue.
We are not persuaded that the doctrine of necessity has any application to the present case as regards this Court or a single judge of this Court.
The third respondent emphasises the fact of the husband’s death since giving his evidence before the primary judge. However, as has been discussed, the husband was
cross-examined extensively in the proceedings and a transcript of his evidence was taken. In BATAS Heydon, Kiefel & Bell JJ observed:
152.Livesey left open the question whether special circumstances may also amount to an exception to the rule. This appeal does not raise for consideration what special circumstances might justify a judge sitting to determine a case despite being reasonably suspected of having pre-judged an issue. The fact that Judge Curtis took the evidence of the late Mr Laurie at his bedside is not relied upon in this respect. In circumstances in which the evidence was transcribed and video-recorded, such a contention would have been forlorn.
(Footnote omitted)
Whilst that observation was made in the context of “special circumstances”, being another exception which may operate where apprehended bias arises, it is clearly analogous.
The third respondent also relies upon the decision of the High Court in Ebner, which dealt with two appeals heard together in which it was argued that the trial judge in each case ought be disqualified by reason of holding shares in the ANZ Bank. In one case, after the judge had completed the hearing of the case over an extended period of some 18 days, judgment was reserved. Subsequently a critical witness in the case died. Also, the judge’s mother passed away resulting in the judge inheriting ANZ Bank shares. It was in that context that the High Court considered the doctrine of necessity, and as observed by the High Court the witness who died was one whose credibility was of central importance to the issues in the case. Obviously if the trial judge were disqualified it would have required another judge to start from the very beginning.
There are distinguishing features of this case to the circumstances that existed in Ebner. Ebner did not involve a case of reasonable apprehension of bias by reason of prejudgment on matters of credit. It concerned disqualification by reason of the trial judge’s pecuniary interest. Further, in this case there would be no requirement for any evidence of the husband to be revisited or reheard. Whilst Kirby J dissented in Ebner, his observations as follows are apposite:
178.It was suggested that the special circumstances of “necessity” applied in Clenae. This was so, as it was put, because the trial had been long, the decision delayed, an important witness had died and the pecuniary interest arose unexpectedly after the decision was reserved. Callaway JA in the Court of Appeal regarded the exception of necessity as being attracted by the strong reasons of convenience and advantage that warranted delivery of the reserved judgment and the fact that this was required to ensure the conclusion of a “fair trial”. In the context of disqualification for undisclosed pecuniary interest, this case presents the issue as to how much inconvenience can justify a conclusion of necessity. If the trial judge in Clenae were disqualified by operation of law for the undisclosed direct pecuniary interest, a second trial could undoubtedly be had before a different judge. True, there would be disadvantages to both parties by reason of the passage of time and the burden of ultimate costs. There would be a special disadvantage to the bank because of the death of an important witness. Whether or not that witness’s testimony would in any case be admissible under Victorian law, counsel for the appellant in Clenae undertook before the Court of Appeal that no objection to the tender of that witness's testimony would be raised in a retrial. This undertaking was renewed before this Court in the special leave hearing.
179.In my view, this case does not attract the exception of necessity. So to hold would be seriously to debase this notion. Retrial would be inconvenient, costly and a serious burden on the parties and the community. But that is commonly the case where courts conclude that a judge, who has conducted a trial, was disqualified. Retrial is the price that is paid by our system of law for upholding fundamental legal and civil rights. It is a price worth paying if it reinforces the community’s confidence in the administration of justice and demonstrates the important principle that judges, under our law, do not participate in the determination of the rights of parties in which they have a direct, significant and, in this case, undisclosed interest.
(Footnotes omitted)
In this case it is not a matter of retrial but the further hearing of the proceedings.
It was not suggested by any party before us that if the primary judge was disqualified from further hearing of the proceedings that this would involve a fresh hearing of the case in its entirety before another judge. What would be required here is the Court embarking upon a determination of the balance of the issues to be determined.
We are not persuaded that the doctrine of necessity applies in this case as an exception where apprehended bias is established.
The third respondent’s Notice of Contention raises only the rule of necessity. That is, the Notice of Contention does not agitate waiver as an exception. No Notice of Contention was filed by the wife. Moreover, as the 2019 reasons reflect, no party raised in argument before the primary judge waiver as an applicable exception if apprehended bias was otherwise established.
Notwithstanding this, the wife seeks to agitate on appeal the proposition that the appellants have waived their right to seek that the primary judge recuse herself on the basis of apprehended bias by reason of their application in the proceedings below to have the finding of fact in relation to the DODT determined as a preliminary issue. The appellants object to this being raised for the first time on appeal. There is substance in the appellants’ objection in this respect given that this point was not raised before the primary judge.
However, in circumstances where we consider there can be no operative waiver in the circumstances of this case we propose to deal with the argument.
There is ample authority for the proposition that a party to civil proceedings may waive an objection to a judge who would otherwise be disqualified on the ground of actual bias or reasonable apprehension of bias. If a party to civil proceedings, or the legal representative of that party, knows of the circumstances that give rise to the disqualification but acquiesces in the proceedings by not taking objection it will likely be held that the party has waived the objection (see, Vakauta v Kelly (1989) 167 CLR 568 (“Vakauta v Kelly”) (at 577–579 per Dawson J); Smits v Roche (2006) 227 CLR 423 (at 439–440) and Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427 (“Michael Wilson”) (at 449)).
We are unaware of any authority, and none was cited to us, for the proposition that a party, in advance of any apprehension arising, may forever waive the right to seek recusal. In other words, that by seeking a preliminary determination in the present case the appellants were, in effect, waiving in advance, forever, any right to seek the primary judge’s recusal irrespective of the manner in which the primary judge determined that preliminary issue and irrespective of the findings made.
We consider that the authorities make it clear that the doctrine of waiver in this context depends upon a litigant being fully aware of the circumstances in which apprehended bias might be inferred. That is, that the circumstances are then known to the litigant. For example, in Vakauta v Kelly Toohey J observed at 587:
There is no reason why, in authority or in principle, a litigant who is fully aware of the circumstances from which ostensible bias might be inferred, should not be capable of waiving the right later to object to the judge continuing to hear and dispose of the case…
(Emphasis added)
Toohey J further observed at 588:
Once it is accepted that there was bias, at any rate ostensible bias, in the judgment itself, no question of waiver or estoppel can then arise. What was delivered was a reserved judgment, without any opportunity for counsel to question what it contained.
Obviously, in most civil litigation a litigant enters into the case with the prospect that the trial judge might make adverse credit findings, at least in any case where the versions of parties or witnesses are diametrically opposed. It would seem an extraordinary proposition that a litigant, conscious of that prospect, has waived the right to seek a recusal by embarking upon the process irrespective of a reasonable apprehension of bias.
We are not persuaded that the doctrine of waiver applied as an exception to the operation of apprehended bias in this case.
We are satisfied that the test for apprehended bias was met in this case and that the primary judge ought to have recused herself in circumstances where neither necessity nor waiver operated as exceptions.
The wife submits, by reference to the tentative views expressed by the Full Court of the Family Court in Bowcott & Welling (2016) FLC 93-723 (“Bowcott”), that leave to appeal is required with respect to the recusal appeal.
In Bowcott the Full Court addressed the question of leave to appeal (at [80]–[87]), noting that these were tentative views as these were expressed without the benefit of full argument (at [88]). The Full Court there noted that leave to appeal has not previously been deemed necessary to challenge the dismissal of a disqualification application by reference to earlier authorities but considered the question of whether a “decree or decision” disposing of a disqualification application must be “interlocutory” since it does not finally determine rights. The Full Court referred to the authorities discussed in CDW v LVE (2015) FLC 93-683.
There would not appear to be much doubt on the authorities that a decision by a judge in civil proceedings to refuse an application for the judge to recuse himself or herself on account of reasonable apprehension of bias is interlocutory in nature, even though that may constitute a final determination by that judge that the facts and circumstances relied upon by the applicant do not establish the relevant apprehension. As is noted in Michael Wilson (at [78] and following) in general any interlocutory order which affects the final result can be challenged in an appeal against final judgment.
The discussion in Michael Wilson (at [70] and following) would seem to support the proposition that the refusal of a trial judge to accede to an application for recusal is an interlocutory determination attracting the requirement of leave to appeal.
We consider, adopting the reasoning applied in Bowcott, that leave to appeal is required to appeal from the determination by the primary judge to dismiss the application for recusal. However, we are satisfied that applying the relevant test for the grant of leave to appeal as set out in Medlow & Medlow (2016) FLC 93-692 at [42], namely, whether the decision is attended by sufficient doubt to warrant it being reconsidered by the Full Court and whether substantial injustice would result if leave were refused, supposing the decision to be wrong, that test is met.
The appellants ought have leave to appeal from Order 4 made on 15 November 2019 and that order ought be set aside. An order should be made by this Court requiring that the further hearing of the proceedings be heard by a judge other than the primary judge.
ORDERS AND COSTS
For the reasons expressed we make the orders set out at the commencement of these reasons.
Whilst we sought and entertained some submissions as to costs at the hearing of the appeal, and these need not be repeated by the respective parties, we also discussed at the hearing the prospect of allowing the parties to make further submissions when the outcome of the appeal proceedings was known. We have resolved that this is the appropriate course.
We therefore propose to include in our orders a timetable for some further written submissions to be received from the parties on the question of costs of the appeal proceedings in light of a known outcome. We emphasise that there is no need for any party to repeat any submission already made on the question of costs.
I certify that the preceding four hundred and thirty-two (432) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Alstergren CJ, Strickland & Kent. Associate:
Dated: 25 August 2021
SCHEDULE OF PARTIES
SOA 74 of 2019
MLF 3444 of 2006Appellants
Third Appellant:
GGG PTY LTD (ACN …)
Fourth Appellant:
EEE PTY LTD (ACN …)
Fifth Appellant:
HHH PTY LTD (ACN …)
Sixth Appellant:
X CORPORATION PTY LTD (ACN …)
Seventh Appellant:
X-1 PROPERTIES PTY LTD (ACN …)
Eighth Appellant:
SSS PTY LTD (ACN …) AS TRUSTEE OF THE TTT INVESTMENT TRUST
Ninth Appellant:
VVV PTY LTD (ACN …)
Tenth Appellant:
MS C JESS
Respondents
Fourth Respondent:
PPP INVESTMENTS PTY LTD (ACN …)
Fifth Respondent:
AAA PTY LTD (ACN …) AS TRUSTEE OF THE BBB TRUST
Sixth Respondent:
CCC PTY LTD (ACN …) AS TRUSTEE OF THE DDD UNIT TRUST
Seventh Respondent:
JJJ PTY LTD (ACN …)
Eighth Respondent:
LLL PTY LTD (ACN …)
Ninth Respondent:
MMM PTY LTD (ACN …)
Tenth Respondent:
X HOLDINGS PTY LTD (ACN …)
Eleventh Respondent:
X INTERNATIONAL PTY LTD (ACN …)
Twelfth Respondent:
X PROPERTIES PTY LTD (ACN …)
Thirteenth Respondent:
X-1 PTY LTD (ACN …)
Fourteenth Respondent:
X PTY LTD (ACN …) AS TRUSTEE OF THE Y UNIT TRUST
Fifteenth Respondent:
NNN PTY LTD (ACN …)
Sixteenth Respondent:
OOO PTY LTD (ACN …)
Seventeenth Respondent:
QQQ PTY LTD (ACN …) AS TRUSTEE OF THE RRR FAMILY TRUST
Eighteenth Respondent:
Y (NZ) LIMITED (NO. …)
Nineteenth Respondent:
Y (WA) PTY LTD (ACN …)
Twentieth Respondent:
Y INTERNATIONAL PTY LTD (ACN …)
Twenty first Respondent:
X-2 PTY LTD (ACN …)
52
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