Jury v Westpac Banking Corporation Jury, Houda v Westpac Banking Corporation

[1998] FCA 228

FEDERAL COURT OF AUSTRALIA

APPEAL - apprehended bias - whether circumstances to be considered by a fair-minded person included counsel’s disavowal of any application to the judge to disqualify himself - whether apprehended bias could be waived and whether it was waived in this case.

Regina v Barnsley Licensing Justices, Ex parte Barnsley and District Licensed Victuallers’ Association [1960] 2 QB 167, referred to
Webb v The Queen (1994) 181 CLR 41, applied
The Queen v Watson; Ex parte Armstrong (1976) 136 CLR 248, applied
Re J.R.L.; Ex parte C.J.L. (1986) 161 CLR 342, applied
Livesey v The New South Wales Bar Association (1983) 151 CLR 288, applied
Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70, applied
Vakauta v Kelly (1989) 167 CLR 568, applied
Cooke v Purcell (1988) 14 NSWLR 51, referred to
Re Alley; Ex parte The Australian Building Construction Employees’ and Builders Labourers’ Federation (1985) 60 ALJR 181, referred to

ERIC JURY v WESTPAC BANKING CORPORATION
HOUDA JURY v WESTPAC BANKING CORPORATION

NG 401 and 402 of 1997

Burchett, Foster and O’Connor JJ
Sydney
18 March 1998

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 401 of 1997

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	ERIC JURY Appellant
AND:	WESTPAC BANKING CORPORATION Respondent

NG 402 of 1997

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	HOUDA JURY Appellant
AND:	WESTPAC BANKING CORPORATION Respondent
JUDGES:		BURCHETT, FOSTER AND O'CONNOR JJ
DATE OF ORDER:		11 MARCH 1998
WHERE MADE:		SYDNEY

THE COURT ORDERS THAT:

Each appeal be dismissed with costs.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 401 of 1997

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	ERIC JURY Appellant
AND:	WESTPAC BANKING CORPORATION Respondent

NG 402 of 1997

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	HOUDA JURY Appellant
AND:	WESTPAC BANKING CORPORATION Respondent
JUDGES:		BURCHETT, FOSTER AND O'CONNOR JJ
DATE OF ORDER:		18 MARCH 1998
WHERE MADE:		SYDNEY

REASONS FOR JUDGMENT

THE COURT
The appellants in these two appeals are husband and wife.  They appeal against sequestration orders made in respect of their estates by a judge of the Court upon creditor’s petitions pursued by the respondent.  The judgments which founded the petitions were entered by Rolfe J in fully contested proceedings brought in the Supreme Court of New South Wales.  On the appeals, the sole ground argued was that this Court should not have acted upon these judgments because Rolfe J should have disqualified himself pursuant to the doctrine of apprehended bias.

In a case where apprehended bias is alleged, it is, as Devlin LJ pointed out in Regina v Barnsley Licensing Justices, Ex parte Barnsley and District Licensed Victuallers’ Association [1960] 2 QB 167 at 187, “not necessary that actual bias should be proved”, and in this case any such suggestion was expressly eschewed by counsel. To prove a case of apprehended bias, what must be shown is that, in all the circumstances, “fair-minded people might reasonably apprehend or suspect that the judge has prejudged or might prejudge the case”: Webb v The Queen (1994) 181 CLR 41 at 47; and see The Queen v Watson; Ex parte Armstrong (1976) 136 CLR 248 at 263; Livesey v The New South Wales Bar Association (1983) 151 CLR 288 at 293-294, 300; Re J.R.L.; Ex parte C.J.L. (1986) 161 CLR 342 at 350, 351, 370-371; Vakauta v Kelly (1989) 167 CLR 568 at 575, 584; Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 at 87, 99-100.

At the commencement of the proceedings before Rolfe J, on 26 September 1995, Mr P Graham QC, who was appearing for the appellant Mr Jury, and was accepted by counsel for the appellants in the present appeal as then speaking on behalf of both of them, is recorded in the transcript as having drawn the judge’s “attention to the fact that his Honour might have had some involvement formerly with Cambridge Credit Corporation, one of the people involved in that organization being Mr Whitbread who was a witness in this matter.”  The transcript continued:  “Mr Graham indicated that although he brought this to his Honour’s attention, it did not cause him any concern.”  Rolfe J responded:

“At the moment my recollection is I was briefed to appear, I think, in some capacity with Mr Gormly of Queen’s Counsel in the prosecution.  The prosecution got as far as an application being made before Mr Gilmore, Stipendiary Magistrate, for a stay on the basis of the delay in bringing the prosecution.  That was argued, I think, by Mr Gormly before the Magistrate and the matter came up and was heard by Justice Maxwell.  He granted a stay and the Court of Appeal upheld his Honour’s decision.  Certainly on that short narration, I do not feel embarrassment.”

The Court proceeded with the preliminary stages of the case, and then there was a short adjournment.  After this adjournment, Rolfe J said:

“Mr Graham, I am just wondering about what I said earlier.  I would like to make my position clear.  I had been briefed by the Corporate Affairs Commission [on] the proposed prosecution, amongst others, of Mr Whitbread.  Mr Gormly was senior counsel.  There were some junior counsel.  The matter came before Mr Gilmore when an application was made for a stay that was argued before a magistrate and then the Corporate Affairs Commission appealed against that decision and I, on behalf of the Corporate Affairs Commission, appeared as leading counsel before Justice Maxwell who upheld the stay and in the Court of Appeal which upheld Mr Justice Maxwell.  That has been my involvement.”

Mr Graham responded:

“I think the matter that concerned us was if your Honour had held a brief to prosecute Mr Whitbread your Honour may have found some difficulty in dealing with Mr Whitbread in relation to evidence in this case.  Our view was, understanding that to be [the] case, we were not in the least bit troubled by it and did not want your Honour to be embarrassed halfway through the case.”

The last words upon the subject at the trial were then spoken by the Judge, who said:

“Thank you for drawing that to my attention.  What I said earlier today remains.  I am not in the least bit embarrassed.  It was not any part of my function to form any view of what Mr Whitbread may or may not have done.  I do not consider I should of my own motion and I certainly would not disqualify myself.”

It will be apparent that at no stage did Mr Graham ask Rolfe J to disqualify himself on the ground of apprehended bias, or on any ground.  As the matter was left, the Judge’s final words show he understood the position to be that, if he were to withdraw from the case, he would be doing so “of my own motion”. 

It is plain from what was said by Mr Graham, the person by whom the matter was raised, that he was aware of the involvement of Mr Rolfe QC (as he then was) in the widely known prosecution of certain former officers of the failed Cambridge Credit Corporation.  In the absence of any evidence to the contrary, we think the natural inference, which we should draw, is that Mr Graham had read the reported case Cooke v Purcell (1988) 14 NSWLR 51. Unless he had done so, he would hardly have felt able to say of the situation, as he did, “we were not in the least bit troubled by it”; for he would not have known whether to be troubled or not. A reading of Cooke v Purcell would have told Mr Graham that Mr Rolfe QC had indeed appeared for the Crown and, as was stated in the judgment of Mahoney JA at 61, had “submitted that the plaintiffs [who included Mr Whitbread] were clearly guilty and that it [was] in the public interest that their trial proceed.” He would also have discovered, from the judgment of Clarke JA at 80 et seq that Mr Rolfe QC had claimed the prosecution case “to be almost completely documentary”, and that he had pressed for the admissibility before the Court of “in excess of 3,000 documents tendered”, some of which “ran to many many pages”.  It would have been quite apparent that Mr Rolfe QC must have studied a vast volume of papers, on the basis of which he had felt able to make the strong submission put to the Court of Appeal.  Of course, any reading of the case would have revealed that the criminal charges in question were very serious charges involving conspiracy to defraud.

Lockhart J, to whom the appellants’ argument was put at the hearing of the petitions in bankruptcy, accepted that Mr Whitbread was an important witness in the proceeding before Rolfe J, but concluded:

“I am not persuaded that fair-minded people might reasonably apprehend or suspect that Rolfe J had prejudged the case.  The evidence does not establish that Rolfe J’s earlier involvement as counsel in the Whitbread proceedings would lead the fair-minded observer to think that Rolfe J might not resolve the case before him in a fair way and with an unprejudiced mind.”

Accordingly, he did not find it necessary to consider an argument advanced by Westpac Banking Corporation that Mr Graham had waived any objection on the ground of apprehended bias. 

We are of the same view as the trial judge.  A strong case, even one well supported by a vast accumulation of documentary evidence enabling counsel for the prosecution to submit to a court that the accused “were clearly guilty”, is not at all the same thing as an actual finding of guilt by a jury.  Nor does the making of the submission suggest that the counsel who made it had gone beyond a proper consideration of whether the documentary evidence, and such other proofs as he had, could justify a submission in these terms.  The judgment of Mahoney JA in Cooke v Purcell at 61-62 makes it plain that the submission about the strength of the Crown case was put as part of an argument that “it [was] in the public interest that [the] trial [of the accused] proceed”. Of that submission, his Honour then commented:

“Mr Rolfe QC ... put the public interest with fairness.”

Mahoney JA went on to say he would assume “that the Crown case against the accused is strong”, but he added:  “In making that assumption, I do not, of course, draw any conclusion as to the guilt or otherwise of any of them.”  (Emphasis added.)  We see no reason to think that Mr Rolfe QC then, or later as Rolfe J, adopted any different attitude.

It is of the nature of court proceedings that submissions are made, based on the evidence, which may or may not be acceptable upon objective examination.  Provided they are fairly open upon the evidence, counsel may properly make them.  It is not their task to usurp the function of the court, and by failing to put forward a submission, to deny the parties they represent the chance that the court may consider that submission sound.  If submissions were not made except on the basis of counsel’s conviction that if he or she were the judge they would actually succeed, the party would be denied the court’s determination in favour of counsel’s. 

We do not think fair-minded people might reasonably apprehend or suspect that Rolfe J’s views of many years before concerning the strength that might fairly be attributed to a paper case against Mr Whitbread would or might cause him to prejudge Mr Whitbread’s veracity as a witness in the appellants’ case.  Fair-minded people would appreciate that Mr Rolfe QC had never seen the paper case tested at trial, and that he had never heard Mr Whitbread’s explanation of it or answer to it.  Fair-minded people would accept that the natural qualification put on the strength of such a case by Mahoney JA would have been as apparent to Rolfe J as it was to Mahoney JA:  he “ [would] not, of course, draw any conclusion as to the guilt or otherwise of [Mr Whitbread]”.

If we had been of a different opinion, there would have been yet further insuperable obstacles in the appellants’ way.  In the first place, the statements made by counsel on their behalf that the Judge’s position “did not cause him any concern” and that “we were not in the least bit troubled by it”, if taken into account by the hypothetical fair-minded observer, would plainly militate against the entertainment of any apprehension of bias.  The rule, as it was stated in Livesey v New South Wales Bar Association at 293-294, is that “a judge should not sit to hear a case if in all the circumstances the parties or the public might entertain a reasonable apprehension that he might not bring an impartial and unprejudiced mind to the resolution of the question involved in it” (emphasis added).  In this case, those circumstances include the attitude adopted by counsel representing the appellants.  In The Queen v Watson, one of the seminal decisions in Australia in this area, the joint judgment of Barwick CJ, Gibbs, Stephen and Mason JJ firmly grounded the doctrine of the Court on the importance that justice should not only be done, but be clearly seen to be done.  That proposition, they made plain at 262-263, “does go to the heart of the matter”.  They continued:

“It is of fundamental importance that the public should have confidence in the administration of justice.  If fair-minded people reasonably apprehend or suspect that the tribunal has prejudged the case, they cannot have confidence in the decision.  To repeat the words of Lord Denning M.R. ... ‘Justice must be rooted in confidence: and confidence is destroyed when right-minded people go away thinking:  “The judge was biased.”’”

But if this is the logic of the doctrine, it must be acknowledged that, where those who might have objected to the judge sitting adopt an attitude such as was taken up by counsel in the present case, fair-minded people are unlikely to be perturbed.  Of course, it will depend on the circumstances, but there was nothing in the instant circumstances to suggest that the appellants had, or should have had, some unexpressed reservation. 

The final matter, which arises out of the same remarks of counsel, is the issue of waiver.  Although counsel for the appellants contended to the contrary, we accept that we are bound by the unanimous views of the High Court in Vakauta v Kelly to hold that waiver is available as an answer to an appeal grounded on an allegation of apprehended bias. In the joint judgment of Brennan, Deane and Gaudron JJ at 572, it is stated:

“Where such comments which are likely to convey to a reasonable and intelligent lay observer an impression of bias have been made, a party who has legal representation is not entitled to stand by until the contents of the final judgment are known and then, if those contents prove unpalatable, attack the judgment on the ground that, by reason of those earlier comments, there has been a failure to observe the requirement of the appearance of impartial judgment.  By standing by, such a party has waived the right subsequently to object.”

Similarly, Dawson J said at 577:

“There can, I think, be no doubt that an objection upon the ground of bias can be waived.  Even where it is a question of the public apprehension of bias, the parties themselves must be competent to waive the objection.  Although justice must manifestly be seen to be done, where a party, being aware of his right to object, waives that right, there will be little danger of the appearance of injustice.”

And Toohey J said at 587-588:

“In the result, when a party is in a position to object but takes no steps to do so, that party cannot be heard to complain later that the judge was biased.  ...  The situation is one in which the law prevents a party to litigation from taking up two inconsistent positions; he is held to his election.  While, of course, the community has an interest in knowing that cases are decided impartially, that interest is not affected adversely by a doctrine which refuses a party to litigation the opportunity to resile from a position he has taken.”

See also Re Alley; Ex parte The Australian Building Construction Employees’ and Builders Labourers’ Federation (1985) 60 ALJR 181 at 182.

Counsel for the appellants urged that they could only waive what they knew about, and that their knowledge of the matters from which bias might be feared was inadequate.  However, no single feature of Rolfe J’s involvement in the prosecution of Mr Whitbread could be identified which counsel would not have gathered from a reading of Cooke v Purcell.  As we have said, we infer that counsel had read this case.  Even if he had not, there is a great difference between something simply not known, and therefore incapable of being waived, and something of which all that can be said is that its full details are not known.  In the latter case, a party electing not to make any additional inquiry, but, without doing so, to announce a determination to raise no objection, may be fixed with that election.  Here, counsel decided to take the matter no further and to invite the judge to proceed with the hearing.  If there had been any ground of complaint, plainly it would have been waived.

The appeals, as we announced at their conclusion, had to be dismissed with costs.

I certify that this and the preceding seven (7) pages are a true copy of the Reasons for Judgment herein of the Court

Associate:

Dated:  18 March 1998           

Counsel for the Appellants:	Mr W G Hodgekiss
Solicitors for the Appellants:	Central Law
Counsel for the Respondent:	Mr J Marshall and Ms R Pepper
Solicitors for the Respondent:	Clayton Utz
Date of Hearing:	11 March 1998
Date of Judgment:	18 March 1998