Kang v Kwan & 2 Ors

[2001] NSWSC 708

CITATION:	Kang v Kwan & 2 Ors [2001] NSWSC 708 revised - 22/08/2001
CURRENT JURISDICTION:	Equity
FILE NUMBER(S):	SC 3510/99
HEARING DATE(S):	17/08/01
JUDGMENT DATE:	17 August 2001
PARTIES :	Wei Ling Kang (Plaintiff) Christopher Anthony Kwan (First Defendant) Kate Woowin (Second Defendant) Eileen Woowin (Third Defendant)
JUDGMENT OF:	Santow J

COUNSEL :	G C Lindsay, SC/ M A Robinson (Plaintiff) M L D Einfeld, QC/ F P Donohoe (First Defendant) C Champion (Schrader & Associates/ Mr Davidson)
SOLICITORS:	Legal Aid Society (Plaintiff) Verekers (First Defendant)
CATCHWORDS:	PROCEDURE — Disqualification of a judge — Relevant factors — Waiver — Prudential issues that may nonetheless persuade a judge not to sit or to sit.
LEGISLATION CITED:	Evidence Act s125, s133
CASES CITED:	Carver v The Law Society of New South Wales (1997) 43 NSWLR 71 Ebner v Official Trustee in Bankruptcy (2000) 176 ALR 644 Galea v Galea (1990) 19 NSWLR 263 Re JRL; Ex parte CJL (1986) 161 CLR 342 Livesey v New South Wales Bar Association (1983) 151 CLR 288 R v Lusink Ex parte Shaw (1980) 32 ALR 47 Webb v The Queen (1994) 181 CLR 41
DECISION:	Judge not disqualified and should sit.

REVISED — 22 August, 2001
IN THE SUPREME COURT
OF NEW SOUTH WALES
IN EQUITY

SANTOW J

No. 3510/99
Wei Ling Kang
Plaintiff
Christopher Anthony Kwan
First Defendant
Kate Woowin
Second Defendant
Eileen Woowin
Third Defendant
JUDGMENT

INTRODUCTION

1    Following the handing down of one judgment in writing and one ex tempore judgment on 16 August 2001, an application was made by the First Defendant on 17 August 2001 that I should disqualify myself from further hearing of the matter on the ground of reasonable apprehension of bias. What follows are my written reasons for declining to do so, amplifying those delivered orally.

2    The first-mentioned judgments determined, against the First Defendant and the other two Defendants (the latter two taking no part in the proceedings beyond filing a defence and being since uncontactable), that certain communications and documents were admissible. This was on the basis that, though legally privileged, they were nonetheless able to be adduced as evidence in the proceedings before me between the above parties on various grounds. I determined that certain of those materials could be adduced by reason of s125 of the Evidence Act. The latter provision is applicable, speaking generally, where there are reasonable grounds for finding that a fraud or abuse of power was committed and the communication or document was in furtherance of the commission of the fraud or abuse of power.

GROUNDS ADVANCED

3    Senior Counsel for the First Defendant put the ground for such disqualification on several bases. These all pertained to the terms of my written judgment of 16 August 2001 and in particular the expression of the findings there made, as well as what were said to be certain factual errors in the judgment. It was also put that at least at one point in the judgment the findings were not put on the basis of prima facie or reasonable grounds but as ultimate determinations of the very questions which were the subject of the substantive proceedings. The instance cited of this was in para 37. It was also said that the judgment was expressed with a degree of robustness or as “dictating a strong assessment”. It was said that “a Judge delivering this decision would find it extremely difficult, acknowledging with full force the usual matters that are acknowledged as to the Court’s capacity to do that”, “to bring to bear an impartial decision when it came to determine that [matter] finally” (T, 477.28-.45). It is then submitted that those matters gave rise to a reasonable apprehension of bias or pre-judgment, expressing these in terms of the test set out in para 17 below.

4    Counsel made clear that in making such application he did not thereby seek to controvert those findings or conclusions, though without conceding that those conclusions or findings were in any way accepted. He also made clear he did not allege actual bias.

5    Prior to that application for disqualification being made or foreshadowed, I had drawn to Counsels’ attention that, these judgments having been prepared in circumstances of considerable urgency (in order to maintain what was left of the hearing dates), there were some corrections of fact that I would wish to make, not affecting the overall conclusions.

6    Thereafter, in the course of then putting the grounds for seeking my disqualification, Counsel for the First Defendant drew attention to what he described as two categories of actual or potential factual error in the judgment. These are sufficiently identified in the transcript of 17 August 2001. The first category was entirely uncontroversial; corrections were made straight away, as indeed they would have been in any event once drawn to the Court’s attention. One particular matter was emphasised in the revised judgment, as noted in para 7 below. The conclusions in the revised judgment reached remained unaltered.

7    I consider the second category were really matters for future submissions by the First Defendant (and Plaintiff). No changes were made in respect of those, it not being yet apparent that, on the evidence so far, there was any error in what were conclusions on a prima facie, reasonable grounds basis. The matter of emphasis appears in the revised judgment in the penultimate paragraph 46, as follows:

“I should emphasise, so as to leave no room for misunderstanding, that that finding, and the anterior matters that I have determined are only determined at the prima facie level of there being reasonable grounds. They do not constitute binding findings of fact and may be controverted for the purposes of the substantive issues still to be determined. It remains therefore open to the First Defendant to adduce such evidence and make such submissions as are relevant to those substantive issues.”

8    Those matters earlier noted were all said to give rise to a reasonable apprehension that I would be unable to bring to bear an impartial and unbiased mind to the determination of the issues in this case, or would otherwise give rise to a reasonable apprehension of pre-judgment.

DETERMINATION

9    The revised judgment must speak for itself. This includes whether, read in its original or revised form, there could be any room for doubt as to the findings in relation to s125 being on a prima facie basis of reasonable grounds. It is entirely inappropriate for a judge to attempt to explain or justify his or her judgment once delivered or descend into detailed explanation. That is no less important in an application for disqualification, where avenues of appeal are the proper forum for any debate about the correctness of the judgment.

10    Indeed applications for disqualification of a judge are rarely if ever based upon the actual expression or terms of a judgment. It is conceivable that a judgment might be expressed in such extreme terms as to prompt such an application. But absent that exceptional case, it is important to emphasise that an appeal is the proper means to correct judicial error in a judgment. Otherwise judges would be inhibited in giving judgment without fear or favour, where forthrightness, even robust expression, may be called for, within overall bounds of fairness..

11    In the nature of a determination of whether or not s125 of the Evidence Act permits the adducing of otherwise privileged communications or documents, the judge will have to form a view, though importantly only at the prima facie or reasonable grounds level, of whether fraud or abuse of process has occurred. That concept of fraud carries with it the notion of dishonesty. But it does not follow that, in assessing all of the evidence including evidence later given by the party concerned, I, as the trial judge, cannot apply to that evidence an impartial mind, free of prejudgment, assessing the credit of the witness accordingly. Indeed it is relatively commonplace (see para 19 below) for a judge to hear interlocutory determinations, or consider material ultimately not admitted. This is without there being any reasonable apprehension to a fair-minded observer that the judge could not thereafter bring to bear a mind free of bias or pre-judgment when it comes to a final determination of the issues.

12    It is nonetheless put by the First Defendant, after acknowledging this, that the process which I have necessarily had to pursue, including consideration of privileged documents, some of which retain their privilege and are not to be adduced, nonetheless make it reasonable for the fair-minded observer reasonably to apprehend bias or pre-judgment on my part. That was said to be the case here, or would be so when coupled with the other matters raised.

13    I do not accept that that is so, for the reasons I have just explained. There is moreover an issue of waiver as regards that process. It is clear from the transcript, and not disputed, that before embarking on consideration of any privileged documents in the context of s125, I raised the question whether I should myself consider those evidentiary issues or find another judge to do so. Counsel for the First Defendant, after obtaining instructions over the lunch hour, confirmed on behalf of the First Defendant to my Associate that there was no objection to my dealing with that matter. That was subsequently confirmed in open Court; T, 185.44-.46 (and similarly confirmation was received from Senior Counsel for the Plaintiff in that regard). That would suggest that even if there were otherwise objection to the same judge then hearing the matter to final determination, that objection was waived.

14    To this, the First Defendant contends that waiver necessarily presupposes knowledge on the part of the party waiving, of those factual matters which bear upon the waiver. It is then said that in the nature of things, what was ascertainable from all the privileged documents was not known in advance to the First Defendant, nor that I would express my judgment in the way I did. The First Defendant cites Carver v The Law Society of New South Wales (1997) 43 NSWLR 71 at 90 per Powell JA. It is however important that I quote what he actually said:

“I have not, when making that observation, overlooked the decision of the High Court in Vakauta v Kelly (1989) 167 CLR 568 or, for that matter, the earlier observations of Isaacs J (as he then was) in Dickason v Edwards (1910) 10 CLR 243 at 260, to the effect that, in an appropriate case, an objection upon the ground of bias may be taken to have been waived. However, it seems to me that, just as, in any other case in which it is asserted that a party has waived a right, it must appear that the party in question had knowledge of the facts which gave rise to that right, so also, in a case such as this is now said to have been, a party cannot be said to have waived a right to object on the ground of bias unless he had — as it is clear that, in the present case, neither the appellant nor Mr Skiller in fact had — appropriate knowledge of the facts which would, in my view, clearly have given rise to the right to object — and to maintain the objection — to Mr Clisdell sitting as a member of the Tribunal: see, eg, Sargent v ASL Developments Ltd (1974) 131 CLR 634; S & M Motor Repairs Pty Ltd v Caltex Oil (Australia) Pty Ltd (1988) 12 NSWLR 358 at 373, per Kirby P (as he then was).”

15    Here, the facts known at the outset to the First Defendant as pertain to waiver must necessarily include the fact that I would shortly have access to privileged documents, many of which the First Defendant knew he had not seen. Indeed I made it clear at the outset that I would consider such documents pursuant to s133 of the Evidence Act. The First Defendant, as the party waiving, must be taken therefore to have clear advance knowledge about that fact or circumstance, namely that privileged documents would be seen by the trial judge that had not been seen by the First Defendant (or the Plaintiff).

16    The other basis put both in relation to waiver, and more generally, starts with the proposition that bias, or the circumstances that may give rise to its reasonable apprehension, may be manifested not only at the inception of a case but during the hearing of the case; Galea v Galea (1990) 19 NSWLR 263 at 268. It is then put that it could not have been anticipated or known by the First Defendant for the purpose of waiver that the terms of the judgment of 16 August 2001 would be expressed as it was. It was then said that these factors gave rise to the possibility, in the reasonable apprehension of a fair-minded bystander, of my being unable to bring an impartial mind to bear on those same issues.

17    Clearly enough waiver could not preclude that basis for disqualification, were it to have substance. When it is raised, I as the judge concerned must carefully consider whether in those circumstances and in the context of the issues before me, the fair-minded bystander informed about the circumstance of the case, would reasonably apprehend the possibility of bias. I here apply that formulation of the test by the High Court in Webb v The Queen (1994) 181 CLR 41 at 47 (per Mason CJ and McHugh J, affirming the statements of principle in Livesey v New South Wales Bar Association (1983) 151 CLR 288 and Re JRL; Ex parte CJL (1986) 161 CLR 342 at 352):

"When it is alleged that a judge has been or might be actuated by bias, this Court has held that the proper test is whether fair-minded people might reasonably apprehend or suspect that the judge has prejudged or might prejudge the case. The Court has applied the same test to a Commissioner of the Australian Industrial Relations Commission and to a member of the Australian Broadcasting Tribunal. The Court has specifically rejected the real likelihood of bias test. The principle behind the reasonable apprehension or suspicion test is that it is of ‘fundamental importance that justice should not only be done, but should manifestly and undoubtedly be seen to be done’ ".

18    The most recent statement by the High Court on apprehension of bias is to be found in Ebner v Official Trustee in Bankruptcy (2000) 176 ALR 644. At para [8] the joint judgment of Gleeson CJ, McHugh, Gummow and Hayne JJ refers to the essential two steps of the analysis

“… First, it requires the identification of what it is said might lead a judge (or juror) to decide a case other than on its legal and factual merits. The second step is no less important. There must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits. The bare assertion that a judge (or juror) has an “interest” in litigation, or an interest in a party to it, will be of no assistance until the nature of the interest, and the asserted connection with the possibility of departure from impartial decision-making, is articulated. Only then can the reasonableness of the asserted apprehension of bias be assessed.”

19    When these various matters articulated by the First Defendant are considered, against the feared deviation of lack of impartiality or pre-judgment, I am unable to agree that the necessary conclusion can be drawn from the terms or expression of the judgment and the particular matters of actual or suggested error, that there is that basis for a reasonable apprehension that those matters “might lead a judge … to decide a case other than on its legal and factual merits.” While reasonable apprehension of bias, or pre-judgment, is expressed only in terms of possibility, connoted by the word “might”, it must still be “firmly established” (R v Lusink Ex parte Shaw (1980) 32 ALR 47). Moreover, it must be based upon the “reasonable apprehension” of a “fair-minded” observer, informed of the circumstances of the case. In that regard, what is said by Mason J in Re JRL; ex parte CJL (supra) at 352 has relevance, when applied to the present circumstances of an interlocutory judgment preceding the giving and testing of evidence leading to the conclusion of a final hearing:

“There may be many situations in which previous decisions of a judicial officer on issues of fact and law may generate an expectation that he is likely to decide issues in a particular case adversely to one of the parties. But this does not mean either that he will approach the issues in that case otherwise than with an impartial and unprejudiced mind in the sense in which that expression is used in the authorities or that his previous decisions provide an acceptable basis for inferring that there is a reasonable apprehension that he will approach the issues in this way. In cases of this kind, disqualification is only made out by showing that there is a reasonable apprehension of bias by reason of prejudgment and this must be ‘firmly established’.”

20    At para [19] of Ebner (supra) the joint judgment states that judges have a duty to exercise their judicial functions and are not at liberty to decline to hear cases without good cause.

21    However, the joint judgment at paras [20] and [21] still leaves room for a judge to conclude that it would be prudent to decide not to sit in a particular case. Thus the example given is where there is a case of real doubt, so avoiding the inconvenience that could result if an appellate court were to take a different view on the matter of disqualification. The High Court then gives an important warning: “If the mere making of an insubstantial objection were sufficient to lead a judge to decline to hear or decide a case, the system would soon reach a stage where, for practical purposes, individual parties could influence the composition of the Bench”. They add with emphasis, “[T]hat would be intolerable.” It is important that the Court not place itself in a position where a party may seek the disqualification of the judge hearing the matter depending upon how the judge has heard a preliminary or interlocutory matter.

22    At para [21] the joint judgment deals with some of the factors that may in a particular case bear upon the matter of prudence, adding that it is not possible to state in a categorical form the circumstances in which a judge, although personally convinced that he or she is not disqualified, may properly decline to sit. I quote the relevant part of para [21] below:

“ [21] It is not possible to state in a categorical form the circumstances in which a judge, although personally convinced that he or she is not disqualified, may properly decline to sit. Circumstances vary, and may include such factors as the stage at which an objection is raised, the practical possibility of arranging for another judge to hear the case, and the public or constitutional role of the court before which the proceedings are being conducted. These problems usually arise in a context in which a judge has no particular personal desire to hear a case. If a judge were anxious to sit in a particular case, and took pains to arrange that he or she would do so, questions of actual bias may arise.”

23    Having reached the conclusion that I am not disqualified from continuing to hear the rest of this case, there are some factors which take the case to the point where it would be open to me to consider, as a matter of prudence, whether in light of the relevant circumstances this is a case where I may (or may not) properly decline to sit.

24    Amongst the matters relevant to that consideration is the impact upon the party who does not wish the trial aborted. That impact includes, but is not limited to, the extra costs that would follow. I earlier raised in open Court whether the First Defendant would be willing to pay the costs of aborting the trial. I emphasised that the First Defendant was to consider himself under no pressure to do so. I raised that matter as but one of the factors of the kind the High Court would have contemplated might be taken into account. In raising that matter I also had regard to the fact that the First Defendant did not indicate to the Plaintiff or the Court, when consenting to my hearing the s125 issue, that thereafter he might wish to review the possibility of the same judge hearing the rest of the matter to its conclusion, following that interlocutory determination. The First Defendant stated that he would be willing to pay the costs thrown away, on a party and party basis, if another judge sat.

25    The Plaintiff responded that having determined that I need not disqualify myself, the Plaintiff desired that I sit. The Plaintiff stated that payment of Plaintiff’s costs, in circumstances where the Plaintiff has given evidence and completed his cross-examination, would not adequately compensate the Plaintiff for the strain and prejudice he would suffer from aborting the trial, thereby prolonging the proceedings. I must remember that this is not a case between wealthy companies but between individuals and that the strain of litigation can bear heavily on the parties.

26    The other factors include availability of another judge or myself to hear the case. As it happens, no hearing days will be vacated as the case has already, regrettably, exceeded the trial dates set down. I do not therefore consider these matters in practice tend either way. But it is certainly clear that an aborted trial will add to costs, cause additional strain on the parties and further delay.

OVERALL CONCLUSIONS

27    In all the circumstances I have concluded that:

(a) I am not disqualified from hearing the balance of this case on the ground raised by the First Defendant of apprehended bias or pre-judgment,

(b) taking into account the circumstances, I am not persuaded that as a matter of prudence I should decline to sit or may properly do so; indeed I consider that it is my duty to continue to sit in the circumstances.

28    I reserve costs in relation to the matters the subject of my judgments (two) of 16 August and of this judgment.

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Last Modified: 08/23/2001