Jones v Official RECEIVER (No 3)
[2016] FCCA 3451
•28 October 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| JONES v OFFICIAL RECEIVER & ANOR (No 3) | [2016] FCCA 3451 |
| Catchwords: PRACTICE & PROCEDURE – Interlocutory application – application for recusal. |
| Legislation: Federal Circuit Court (Bankruptcy) Rules 2006 (Cth), r.2.06 |
| Cases cited: ALA15 v Minister for Immigration & Border Protection (2016) FCAFC 30 Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 Jones v Thomson & Anor (No. 2) [2016] FCCA 931 |
| Applicant: | RICHARD JONES |
| First Respondent: | OFFICIAL RECEIVER |
| Second Respondents: | JASON PORTER PAUL GERARD WESTON |
| File Number: | SYG 2492 of 2014 |
| Judgment of: | Judge Smith |
| Hearing date: | 28 October 2016 |
| Date of Last Submission: | 28 October 2016 |
| Delivered at: | Sydney |
| Delivered on: | 28 October 2016 |
REPRESENTATION
| The applicant appeared in person. |
| Counsel for the Second Respondents: | Mr A. Spencer |
| Solicitors for the Second Respondents: | Bamford Lawyers |
ORDERS
The interim application seeking the recusal of Judge Smith be dismissed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 2492 of 2014
| RICHARD JONES |
Applicant
And
| OFFICIAL RECEIVER |
First Respondent
| JASON PORTER AND PAUL GERARD WESTON |
Second Respondents
REASONS FOR JUDGMENT
(Delivered Ex Tempore & Revised)
The applicant has made an application that I recuse myself. Initially that application was made on the basis of a reasonable apprehension of bias. However, at the hearing the applicant added the ground that I was actually biased. It is well established that, although there are degrees of seriousness between the two, both of such allegations must be clearly made and clearly established: see Minister for Immigration & Multicultural Affairs v Jia Legeng (2001) 205 CLR 507 (“Jia Legeng”) at 531, [69] per Gleeson CJ and Gummow J. I will deal with apprehension of bias issue first.
The test for apprehension of bias is relatively well settled, although often difficult in application. It is whether a fair-minded and appropriately informed lay observer might reasonably apprehend that the Court might not bring a fair, impartial and independent mind to the determination of the matter on its merits: see for example, Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 (“Ebner”) and British American Tobacco Australia Services Limited v Laurie (2011) 242 CLR 283.
There is a two-stage process described by the High Court in Ebner and followed since. In ALA15 v Minister for Immigration & Border Protection (2016) FCAFC 30 at [36], the Full Court of the Federal Court described the approach:
(a)At least the following two steps are involved in a case involving an allegation of apprehended bias:
(i)there must be an identification of what it has said might lead a judge to decide a case other than on its legal and factual merits; and
(ii)there must be an articulation of the logical connection between the matter and the feared deviation from a course of deciding a case on its merits;
(b)An allegation of bias against a judge on the basis of prejudgment is a serious matter not the least because it carries with it the suggestion that the judge has failed to honour his or her judicial oath as such might be questioned by the fair-minded observer. As is also the case where such an allegation is made against an administrative officer, the allegation must be “distinctly made and clearly proved”;
(c)as noted above, the test assumes that the hypothetical fair-minded lay observer is to be attributed with appropriate knowledge of relevant matters so as to be in a position to make a reasonably informed assessment of the likelihood of apprehended bias.
(Citations omitted)
In support of his application, the applicant relies upon an affidavit affirmed on 26 October 2016. In that affidavit, as well as in his oral submissions at the hearing, the applicant relied upon a number of procedural matters that had taken place during the conduct of this matter by myself since November of last year when the matter first came into my docket. Essentially, the applicant says that I have applied the rules unequally between the parties and have favoured the respondents. This favouring of the respondents is said to have given rise to a promulgation of the proceedings to the advantage of the respondents and disadvantage of the applicant and other litigants in the case, being a reference to the cross-respondents. The applicant also relies upon a number of interlocutory judgments that I have made in the matter, the first of which, Jones v Thomson & Anor [2016] FCCA 687 (“March judgment”), was given Ex Tempore on 3 March 2016. That was a judgment in which I dismissed an application by the applicant for summary judgment against the respondents for their failure to comply with the rules of the Court.
The second judgment, Jones v Thomson & Anor (No. 2) [2016] FCCA 931 (“Jones (No.2)”), was a decision in which I dismissed an application by the respondents for an order for security for costs against the applicant. As part of that judgment I considered, as was relevant according to the authorities, the prospects of success of the substantive application. Mr Jones relies upon my conclusion stated in that judgment that the trustees have a strong case on the material before me and, at [22], that “there is some, albeit currently slender, prospect that Mr Jones’ application” would succeed.
Consideration
I do not propose to deal with each and every one of the factual allegations relied upon by the applicant. Some of the allegations are not properly proven. However, for the present purposes, I am willing to accept and act upon the basis that what is set out in the applicant’s affidavit is correct. What I do propose to do is to examine what appear to be the primary facts relied upon by the applicant. I will then examine those on the whole, to determine whether the test for apprehension of bias is made out.
The first matter relied upon by the applicant is that, whereas in my March judgment I found that the word “hearing” in r.2.06 of the Federal Circuit Court (Bankruptcy) Rules 2006 (Cth) did not relate to an interim hearing or a directions hearing, I nevertheless required the cross-respondents – being a Ms Hombsch and Crest Proprietary Limited (Crest) – to file a notice of appearance. This, it was said by Mr Jones, was contradictory and clearly favouring the respondents.
A well-informed observer would understand that the March judgment was a judgment made in respect of an application for summary judgment. The reasons for the summary judgment included, as Mr Jones pointed out, my determination of the proper meaning of r.2.06 in the Bankruptcy Rules. That does not mean, however, that subsequent directions made by me in connection with the substantive proceedings were in any way inconsistent with that ruling. Once the matter came before me, having disposed of two applications that had been outstanding for some 15 or 16 months, what fell to the Court was to make orders to prepare the matter for final hearing. It was in the course of that, when cross-respondents were joined to the proceedings, that orders were made for notices of service in order that the other parties are able to properly serve those parties in connection with the preparation for hearing.
On that basis, a well-informed observer could not see any logical connection between that, and any prospect that I might not bring a fair and impartial independent mind to the determination of the merits of the substantive case.
The second matter relied upon by the applicant is that he was required to file an application and affidavit in his application for bias. This is not quite accurate. However, taking it at face value, what Mr Jones says is that that is inconsistent with the way in which the respondents were able to file, or given leave to file a cross-claim, without a similar application in a case and affidavit in support. A fair-minded, well-informed lay observer would understand that, as I have noted already, an allegation of bias is a very serious matter that must be clearly and distinctly made and proved. It is not something that ordinarily would be made without sufficient evidence and the requirement for formal evidence not only addressed that question, but also the ability of the respondents to respond properly to any allegation.
As it turns out, Mr Jones did not comply with the orders that he serve any affidavits upon which he relied. This left the matter to be dealt with somewhat informally before me. Nevertheless, it was dealt with. For those reasons, this point has no merit.
The third point is that in my March judgment I said, at [13]:
If no affidavits are filed, then the ordinary consequence, subject, of course, to all the circumstances, is that affidavits filed outside of that time may not be relied on.
I also said at [16]:
While failure to comply with directions is, in my view, ordinarily deplorable...
Mr Jones takes this and compares it to what he says is a very lax attitude on my part to the respondents failure to comply with the directions concerning evidence in this matter. On 22 July 2016, I made orders for the serving of evidence, including that the first respondents and cross-claimants file and serve all their affidavits by 2 September 2016. The first respondents did not comply with that, however they did comply three days later, when an affidavit upon which they proposed to rely was served upon Mr Jones. I do not consider that to be deplorable in any sense of the word, and Mr Jones has not said that there was any prejudice suffered by him in that connection.
Further, as any reasonable bystander would understand, I have not yet made any decision about whether or not to admit affidavits. That decision will be made at the trial, and be made upon all of the evidence and submissions made at the time. In this respect, Mr Jones also said that, at a directions hearing which took place on 21 October 2016, I said that I would not allow any affidavits that were filed by him at the hearing. I do not have any independent recollection of saying that. Nevertheless, for present purposes I will accept that I did say that.
Such a statement however, is unremarkable. I made, as I have said, directions for the filing of evidence on 22 July 2016. The purpose of this was to enable the parties to know the evidence that is put against them in order for each party to be able to respond to that evidence and, thus, to have a fair hearing. It would be inconsistent with that purpose to allow, without any change in circumstances, evidence to be filed so late in the proceeding.
Even if I am wrong about that, the overarching purpose of directions for the filing of evidence would be understood by a lay observer, and the statement made in the context of making such directions, would not give rise to any reasonable apprehension that I had made up my mind about the substantive matters or issues in the proceedings.
The fourth matter relied upon by Mr Jones is the fact that I allowed Mr Bamford to appear at the hearing on 3 March 2016. That is on the summary judgment application and the security for costs application, whereas I did not allow a director of Crest Australia Pty Limited to appear in the proceedings. Mr Bamford was a solicitor acting for the respondents, and was entitled to appear in the proceedings as such. The issue that arose as I recall, although somewhat indistinctly, was that Mr Bamford relied upon his own evidence, that is an affidavit sworn by him. I may be incorrect in that, but if that is the case then it is an entirely different issue to whether or not a director of a company be entitled to appear.
Further, as I recall, a director of Crest did in fact appear at a hearing and was heard, to the extent that she said anything, at that hearing. I have not heard anything further from the director of Crest, Crest itself, or any representatives, to suggest that it has been prejudiced by any requirement to engage lawyers. Mr Jones, apparently on Crest’s behalf, although without any evidence to support that, suggested there might be some unfairness, but that is not established. Accordingly, this complaint does not establish, even in conjunction with any of the other matters, any reasonable apprehension of bias.
Mr Jones also relies upon the fact that on 22 July 2016, I made orders setting the matter down for pre-trial directions at 9.30am today, and then listing his interim application for summary judgment at 10.15am. The applicant says that this reveals that I might have made up my mind about that interim injunction. It is true that on 22 July 2016, I made orders to the effect relied upon by Mr Jones, however what must be understood, and would be understood by a reasonable observer, is that this Court is an extremely busy court and that its lists are almost completely full many months in advance.
Thus, in order for any interim application to be heard, it is often the case that it must be squeezed in either before the final hearing of another matter, or after a directions hearing which, in this Court, often occur on a Friday. Further, the matter was set down for hearing in circumstances where the matter was first commenced in late 2014. There are a series of events, which have been described elsewhere, which led to the matter being dismissed on 30 March 2015, an appeal by leave being granted later in 2015 and the matter then being remitted to a judge of this Court, who then recused himself.
The next judge to which the matter went recused herself; the next judge to which the matter was allocated also recused himself; and finally the matter came to me in November 2015. There were two interim applications outstanding at that time, both of which were dealt with at the first available opportunity. They were finally disposed of by my judgment in April 2016, dismissing, as I have said, the application for security for costs. Thus, a great deal of time had elapsed with very little of any substance occurring.
Further, the matters in issue in these proceedings have a long history, going back almost a decade. In those circumstances, it would not be surprising to any fair-minded observer that an early-as-possible hearing date was granted, and then interlocutory applications were fitted in, in order that should they succeed or should they not succeed, then the matter not be delayed any further. For that reason, a well-informed lay observer, would not apprehend that I might have made up my mind about that interim application.
I would add that, as it turns out, the pre-trial directions have not been made when they were listed at 9.30am today, but rather, the other interim applications were brought forward, this one superseding even the interim application for summary judgment. The applicant said, overall, that I had favoured the respondents and had thus prolonged the proceedings, increasing his financial and emotional distress. I do not see, on the totality of the material relied upon by the applicant, that that could be apprehended to be the case.
Each of the interlocutory decisions made would be understood to be made against the background of a long, outstanding matter involving a number of issues between the parties, and in a court with a very busy list and with many other litigants waiting in turn for hearing dates. For those reasons, I reject the argument that a fair-minded, appropriately informed lay observer might reasonably apprehend that I might not bring a fair, impartial, independent mind to determination of the substantive matter, or of the interim application for summary judgment based upon incompetence.
I turn to the question of actual bias. This, like the apprehended bias argument, is based upon an allegation of prejudgment. In Jia Legeng, Gleeson CJ and Gummow J said at 532, [72]:
The state of mind described as bias in the form of prejudgment is one so committed to a conclusion already formed as to be incapable of alteration, whatever evidence or arguments may be presented. Natural justice does not require the absence of any predisposition or inclination for or against an argument or conclusion.
For essentially the same reasons I have given above, none of the directions made, nor the judgments that I have given, would clearly establish that I have made up my mind in this matter. While it is true that in Jones (No. 2) I concluded that Mr Jones did not have a very strong case, but that the trustees did, I qualified that by saying that I did not consider that Mr Jones would inevitably lose; see Jones (No. 2) at [20].
Conclusion
Bearing in mind that that was an interlocutory application, on limited material, having regard only to the arguments made in respect of security for costs, that could form a basis neither for an apprehension of bias or indeed for actual bias, either alone or in combination with any of the other matters relied upon by the applicant, including those matters that I have not specifically referred to today. For those reasons, I dismiss the application that I recuse myself.
I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of Judge Smith
Date: 7 February 2017
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