Major Engineering Pty Ltd v Timelink Pacific Pty Ltd
[2008] VSCA 90
•30 May 2008
SUPREME COURT OF VICTORIA
COURT OF APPEAL
No. 4122 of 2005
| MAJOR ENGINEERING PTY LTD | |
| Appellant | |
| v | |
| TIMELINK PACIFIC PTY LTD | Respondent |
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APPLICATION ON SUMMONS
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JUDGES: | BUCHANAN, NETTLE and NEAVE JJA |
WHERE HELD: | MELBOURNE |
DATE OF HEARING: | 30 May 2008 |
DATE OF JUDGMENT: | 30 May 2008 |
MEDIUM NEUTRAL CITATION: | [2008] VSCA 90 |
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Courts and judges – Bias – Prejudgment of issues in pending litigation – A fair-minded lay observer might reasonably apprehend that the Court might not bring an impartial mind to the resolution of the case – Court disqualified itself.
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| APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr B N Caine SC with Mr A Herskope | Kalus Kenny Lawyers |
| For the Respondent | Dr G Griffith AO, QC with Mr J A F Twigg | Vadarlis & Assocs |
BUCHANAN JA (for the Court):
On 4 August 2006, a judge of the Trial Division gave judgment in favour of the respondent, Timelink, for damages to be assessed on a claim that the appellant, Major Engineering, had breached its contract by providing Timelink with hydraulic cylinders that lacked the capacity to withstand a working force of 262 kilonewtons.
On 16 October 2007, we allowed an appeal by Major Engineering and set aside the judgment. We held that the judge had erred in holding that the contract bound Major Engineering to provide cylinders capable of withstanding a static force in operation of not less than 1.18 times 262 kn. We were of the view that, if the judge was satisfied on the balance of probabilities that the cylinders failed in operation at a static force of not more than 262 kn, there should be judgment for Timelink, and, if his Honour were not persuaded on the balance of probabilities that the force was not more than 262 kn, there should be judgment for Major Engineering. Consequently, we remitted the matter to his Honour to make a finding as to the static force at which these cylinders failed in operation.
On 22 February 2008, the judge handed down a further judgment (‘the second judgment’) in favour of Timelink, in which his Honour found that the static force at which the cylinders failed in operation was not more than 262 kn. On 7 March 2008, Major Engineering filed a notice of an appeal (‘the second appeal’) against the second judgment on the ground, inter alia, that the judge could not reasonably or properly have been satisfied on the balance of probabilities, on the evidence before him, that the force at which the cylinders failed was not more than 262 kn.
This is an application by Timelink made by summons dated 8 May 2008 that we exclude ourselves from hearing the second appeal. It is contended that our reasoning in the first appeal so much conflicts with the judge's second judgment that ‘the perceived issue on appeal is now the question of whether the views of the judge in his second judgment or those of the prior appeal court judgment are to be vindicated’.
Three matters in particular are relied on. The first arises out of our rejection of an argument by Timelink in the first appeal that the judge found in the first judgment that he was satisfied on the basis of theoretical calculations that the cylinders had a capacity of less than 262 kn. As we construed the first judgment, his Honour was not satisfied that the theoretical calculations could be relied on as an accurate indication of what occurred in fact. Now, however, the judge has included an explicit statement in the second judgment that he was never in any doubt about the accuracy of the theoretical tests and that they show that the capacity of the cylinders was less than 262 kn. On that basis, counsel for Timelink submits that there is such a direct conflict between, on the one hand, the way in which we interpreted the judge's perception of the theoretical calculations and, on the other hand, his Honour's re-statement of his perceptions in the second judgment that 'the perceived issue on appeal is now the question whether the views of the trial judge in his second judgment or those of the prior appeal court are to be vindicated'.
We do not accept that submission. No doubt there is a difference between what we took from the first judgment to be his Honour's perceptions of the theoretical calculations and his Honour's re-statement of them in the second judgment; but, for present purposes, it is a difference devoid of consequence. There is no issue in the second appeal as to whether we were correct in the way in which we construed the first judgment. In light of the second judgment, it cannot now be doubted that the judge has found that the theoretical calculations may be relied upon as an indication that the cylinders failed in operation at a static force of less than 262 kn. Relevantly, the only question for the purposes of the second appeal is whether the theoretical calculations can be relied upon in that way, and that is a question which we have not yet considered.
The second matter concerns our reasons for concluding in the first appeal that the judge did not make a finding in the first judgment as to whether the cylinders failed in operation at a static force of not more than 262 kn. We said that:
It appears to me, therefore, that when the judge said that he accepted the accuracy of Mr Jones's design assessment, his Honour intended to convey no more than that he accepted that the cylinders failed in operation at a static force which may have been greater than 262 kn, but by a factor less than the expert witnesses would consider sufficient. As I read his Honour's conclusions, he was either not satisfied that the static force at which the cylinders failed in operation was or was less than 262 kn, or, alternatively, he deliberately avoided reaching a conclusion as to whether it was or was less than that figure. I add, however, that if I were wrong about that, I would take leave to doubt that Mr Jones's design assessment may be relied upon as establishing that the static force to which the keel was subjected in operation could not have exceeded 262 kn.
Counsel for Timelink submits that our reasons stand in conflict with the judge's statement in the second judgment, that:
The keel and the associated hydraulics were designed to operate with a cant of the keel at a maximum of 19.5 degrees. This is the worst case scenario for the cylinders, for it is at this point that they are fully extended and therefore at their weakest. At the time of the incident, the cant was 17 degrees, so that the longitudinal dimension of the cylinder was reduced by 51 millimetres from full extension. The evidence showed that a cylinder which would fail at 262 kn when fully extended would not fail until subjected to a force of 283 kn when extended only for a 17-degree cant. Accepting that the design specification of 262 kn was the worst case scenario, this would mean that the cylinders were below contract strength if, at 17 degrees cant, they were unable to withstand a force of 283 kn. The Court of Appeal, however, was of opinion that the remitted question should not refer to a force other than that of 262 kn. Although respectfully unrepentant on this point, I will address the question as formulated.
As counsel for Timelink would have it, the judge's statement directly contradicts our conclusion that his Honour did not determine in the first judgment whether the cylinders buckled at less than 262 kn; and, in counsel's submission, the existence of that sort of conflict means that the perceived issue on appeal is now a question whether the views of the trial judge in his second judgment or those of the prior appeal court judgment are to be vindicated.
In our view, that is not so. There is no contradiction of the kind suggested. To the contrary, there is an express statement by the judge in the second judgment that:
It was not therefore necessary for me in the first judgment to reach a conclusion as to the question whether the cylinders had the capacity to withstand a static force of 262 kn in operation, because I concluded that Major Engineering was contractually obliged to provide cylinders which met that specification plus a factor of safety. On no view had it done so. Now, with the factor of safety removed, the question is whether the evidence permits me to conclude that the cylinders failed to meet the contract specification.
The third matter is a doubt which we expressed in the first appeal as to the reliability of Mr Jones's design assessment. Counsel for Timelink submits that it is inconsistent with the judge's affirmative finding, based on the theoretical calculations in the second judgment, that the pistons failed in operation at a static force of not more than 262 kn. In counsel's submission, the existence of such an inconsistency means that it is inevitable that a disinterested but informed bystander would apprehend that the determinative issue in the second appeal is 'the difference between the trial judge, who, after the first appeal was allowed, has maintained the result at first instance, and the appeal court, which expressed a contrary explanation of the trial judge's position on finding a vitiating error in the first judgment'.
We do not accept that submission either. Admittedly the judge's finding that the cylinders failed in operation at not more than 262 kn tends to vindicate Mr Jones's design assessment, and to that extent may be inconsistent with the doubt which we mentioned, but we have not yet had to consider the reliability of the theoretical calculations or thus whether they should be accepted. As may be seen in our reasons in the first appeal, we had in mind to explore that question as part of the first appeal, but we eschewed that course in response to the requests of both parties that we remit the matter to the judge for his Honour to make the finding.
There is, however, a further aspect of the second judgment which arose in the course of argument, which is a cause for concern. It consists in what may be the repetition in the second judgment of what we perceived to be an error in the first judgment and identified in the first appeal as follows:
As the judge found, Mr Jones endeavoured to calculate the maximum static force to which the cylinders could be subjected in operation by reference to the ABS guide, and thus by incorporating a safety factor of two. But as against that, Mr Jones noted, Mr Raymond, who was an expert called by Major Engineering, was of opinion that the static forces to which the keel could be subjected during a knockdown were simply the beginning of the design process, to which must then be added the acceleration and deceleration forces, plus pulse loads, which are likely to occur in bad weather. The judge rejected Mr Raymond's view on the basis, he said, that Professor Joubert and Dr Keyes accepted that Mr Jones was correct in using ABS and thus a factor of two to arrive at a worst case scenario. But, with respect, that was not the tenor of their evidence. With the exception of Mr Jones, the weight of expert opinion on both sides was that a safety factor of two was not enough.
We then extracted, in paragraphs [76]-[79], the evidence in support of that analysis. The judge, however, said in the second judgment:
The Major Engineering technical witnesses, not surprisingly, placed great reliance upon the tests and the fact that buckling did not occur in the second test until a load of about 325 kn had been imposed. They accepted, too, as did the plaintiff's technical witnesses, that in ordinary racing conditions no force approaching this magnitude might be expected to be applied to the cylinders. Their view was that Mr Jones's design load of 262 kn would be sufficient for those conditions, but it cannot be denied that the cylinders failed in operation. The significance of this for my present purposes is that Major Engineering, contending that its cylinders had the capacity to withstand a force of 262 kn, or even a force of 325 kn, had to provide some explanation for the fact of failure in order to rebut the inference proposed on behalf of Timelink.
It is possible that a repetition of the errors in the second judgment has led the judge improperly to exclude, as a possible explanation for the fact that the cylinders failed in operation, that the forces to which the cylinders were subject in normal operating conditions could have exceeded the figure of 262 kn as calculated by Mr Jones. Needless to say, we have not had the benefit of argument on the point or the opportunity for mature consideration, and it may be that we would come to a different view with time and the assistance of counsel. But, with deference to counsel's submission that justice should not only be done but be seen to be done, it is preferable that the task be left to other judges.
Counsel for the appellant submitted that, because there were practical advantages in the Court as now constituted hearing the matter, it should do so unless persuaded that there was a reasonable apprehension of bias. This is not the usual case, where a judge has been allocated in the normal way, but is a case of a specially appointed court. We think that the better view is that an order should not have been made for the matter to be heard by the Court as at present constituted if there was a significant risk of the kind of controversy which has arisen. Accordingly, we think that the order made by the master should not have been made.
There will be an order that the appeal be heard by a Court constituted by judges other than the members of this Court.
(Discussion ensued concerning costs.)
BUCHANAN JA:
In this case the successful applicant has sought an order for the costs of the application and the costs reserved by the master below. Having regard to the fact that the question involves principally the way in which this Court is administered, we think it appropriate in this case to order that the costs of the application and the costs reserved before the master should be costs in the appeal.
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