Melsom, Peter Michael v Forrest, B M, Deputy President of the Administrative Appeals Tribunal
[1997] FCA 1363
•28 NOVEMBER 1997
FEDERAL COURT OF AUSTRALIA
PROCEDURE - stay - application to stay hearing of proceedings for discharge from bankruptcy - application to be joined as party to Administrative Appeals Tribunal proceedings previously refused - appeal to Federal Court dismissed - appeal to Full Federal Court dismissed - new joinder application - judgment against bankrupts in Supreme Court of Western Australia - initial refusal to list joinder application but subsequently listed - proximity of hearing of joinder application to substantive hearing - whether reasonable apprehension of bias
EQUITY - interlocutory relief - whether serious question to be tried - balance of convenience - whether reasonable apprehension of bias - whether merit of conduct of party to Administrative Appeals Tribunal relevant.
Judiciary Act 1903 (Cth), s 39B
Khadem v Barbour, Senior Member of the AAT (Hill J, Federal Court of Australia, 30 August 1995 unreported) referred to
Lord v Spinelly (1991) 4 WAR 158 referred to
Livesey v New South Wales Bar Association (1983) 151 CLR 288 applied
Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 referred to
Re Media Entertainment and Arts Alliance; Ex parte Hoyts Corporation Pty Ltd (1994) 68 ALJR 179 referred to
PETER MICHAEL MELSOM & ORS v B M FORREST, DEPUTY PRESIDENT OF THE ADMINISTRATIVE APPEALS TRIBUNAL & ORS
WAG 145 of 1997
R D NICHOLSON J
PERTH
28 NOVEMBER 1997
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
WG 145 of 1997
BETWEEN:
PETER MICHAEL MELSOM and STANLEY FREDERIC ROBSON
ApplicantsAND:
B M FORREST, DEPUTY PRESIDENT OF THE ADMINISTRATIVE APPEALS TRIBUNAL
First RespondentMARIE SPINELLY and JACQUES SPINELLY
Second RespondentsINSPECTOR-GENERAL IN BANKRUPTCY
Third Respondent
JUDGE:
R D NICHOLSON J
DATE OF ORDER:
28 NOVEMBER 1997
WHERE MADE:
PERTH
THE COURT ORDERS THAT:
Pending the determination of this application the hearing of reviews V94/783 and V94/784 by the first respondent be stayed.
The time for service be abridged.
Costs be reserved.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
WG 145 of 1997
BETWEEN:
PETER MICHAEL MELSOM AND STANLEY FREDERIC ROBSON
ApplicantAND:
B M FORREST, DEPUTY PRESIDENT OF THE ADMINISTRATIVE APPEALS TRIBUNAL
First RespondentMARIE SPINELLY AND JACQUES SPINELLY
Second RespondentsINSPECTOR-GENERAL IN BANKRUPTCY
Third Respondent
JUDGE:
R D NICHOLSON J
DATE:
28 NOVEMBER 1997
PLACE:
PERTH
REASONS FOR JUDGMENT
(EX TEMPORE)
HIS HONOUR: This is an application for interlocutory relief seeking an order that pending the determination of this application the hearing of reviews V94/783 and V94/784 be stayed in the Administrative Appeals Tribunal (‘the Tribunal’). I understand that order would apply to the hearings in both those matters listed on 2 December 1997 in the Tribunal in Melbourne involving both a hearing of an application to join party listed for 10 am and a hearing listed for 11 am.
The substantive application pending the determination of which the interlocutory relief is sought is an order the first respondent cease hearing those reviews. As has been made apparent during oral argument, the ground of the application is there is or would be a reasonable apprehension of bias if he were to do so.
The application seeks to rely on the jurisdiction of the Court pursuant to s 39B of the Judiciary Act 1903 (Cth). In the event there are no contradictor submissions in that the first respondent appears to abide the decision of the Court, the second respondents urge the Court to allow the proceedings to continue but do not address the legal issues because they are unrepresented, and the third respondent appears to abide the decision of the Court, subject to one particular aspect to which I will refer subsequently. The authority of the Court to make an order in the final form sought by the applicants is supported in the applicants' case by reference to the decision Khadem v Barbour, Senior Member of the AAT (Hill J, Federal Court of Australia, 30 August 1995 unreported).
The application for interlocutory relief requires the Court to consider whether there is a serious issue to be tried and whether the balance of convenience favours the relief pending the final determination of the claim. In order to reach a view in relation to the serious issue to be tried, it is necessary that I briefly sketch some of the background to the matter.
The applicants are the trustees of the bankrupt estate of the second respondents. By letters dated 4 and 10 April 1995, the applicants applied to be made a party to the proceedings being proceedings brought by the second respondents for discharge. Prior thereto, the applicants had on 28 April 1994 lodged objections to discharge of the second respondents. On 13 September 1995 the first respondent reached the decision that the application for joinder should be refused. That came before me for review on 23 May 1996 and the application for review was dismissed. That decision itself was appealed to the Full Court of the Federal Court and on 17 October 1996 the appeal was dismissed.
At the time the second respondents became bankrupt, the most significant creditor was a Mr Lord. He took action against the second respondents in the Supreme Court of Western Australia alleging misappropriation of moneys by the first-named second respondent whilst employed as his bookkeeper and alleging as against the second-named second respondent that he was knowingly concerned in the misappropriation. Following a five-day trial in 1990, at which the second respondents were legally represented, it was found there was a liability as against the first-named second respondent in the sum of $166,139.69 with interest in the sum of $85,473.25. A consent judgment was issued against the second-named second respondent in the sum of $25,638. Costs were awarded against each of them. The decision in the proceedings is reported as Lord v Spinelly (1991) 4 WAR 158.
The trustees, having failed in their application to be made parties to the application for discharge, sought to have the third respondent seek to have the Tribunal determine as a preliminary point whether the Tribunal was bound by the decision of the Supreme Court. On 29 May 1997 the third respondent stated it would request the Tribunal to determine that issue as a preliminary point. On 23 October 1997 the third respondent advised that at a directions hearing on 30 September 1997 a request for the Tribunal to determine whether it was bound by the Supreme Court's decision was met with the response that such a determination was not appropriate for the directions hearing. In the view of the applicants, the third respondent has failed to take any steps to have the preliminary point determined independently of the substantive hearing of the application to discharge.
In the same letter of 23 October 1997 the third respondent advised the applicants it did not consider there was any requirement for it to forward the statement of facts and contentions and did not intend to do so in view of the previous decisions in the Tribunal and the Federal Court and as the applicants were not a party, there was no point in advising their solicitor of the hearing date.
The merits of the conduct of the third respondent are said on his behalf not to be an issue on this application. I accept that submission. It is not put in contest for the applicants. The only relevance of referring to these matters is because of the manner in which both the application in the Federal Court before me and before the Full Court was disposed of. In the course of the reasons, on both occasions there was an expectation that there would be, in the discharge of the statutory functions of the third respondent, a capacity for the applicants to be informed by the third respondent. Without in any way encroaching on the merits of those matters, it is sufficient to say that they provide to the applicants the reasons for the steps which they then took; in their view rightly.
The step which they did take was on 31 October to make a fresh application for joinder. The response to that from the Tribunal came in a letter from the District Registrar, Melbourne Registry, dated 19 November 1997 and reads:
“Dear Sirs
Re: Marie Spinelly and Inspector-General in Bankruptcy - V94/783;
Jacques Spinelly and Inspector-General in Bankruptcy - V94/784
An application by your clients Messrs. Melsom and Robson to be made a party to the abovenamed matters has been received.
As you are aware, the Tribunal has already decided an application by your clients to be made a party to these matters. That decision was the subject of an appeal by your clients heard by a single Judge of the Federal Court and in turn on further appeal by your clients by a Full Court of the Federal Court.
Having already decided the question of joinder in these proceedings, the Tribunal does not have power to do so again. Quite apart from that, the matters have a long history in the Tribunal and should proceed to a hearing on the merits without further delay. The substantive hearing has been listed for 2 December 1997.”
That produced a response of 20 November 1997 to the Tribunal from the solicitors for the applicants in which they asserted that, among other things, it was necessary for the new application to be heard and determined on its merits. The response to that from the Tribunal under the signature of the Deputy Registrar of the Melbourne Registry was dated 21 November 1997 and reads:
“Dear Sir,
RE: SPINELLY & ITSA - AAT REFS: V94/783784
I refer to your facsimile message dated 20 November, with respect to your application to be made a party to the above proceedings.
After further discussions with the Presiding Member, your joinder request has been formally accepted. The parties have been given 7 days to either consent or oppose the application.
If the application is opposed, a hearing of that application will be held by the Tribunal on 2 December 1997 at 10.00am. The Tribunal will advise you further if a hearing is required.
Should you wish any further information or assistance please contact me on the telephone number or at the address listed above.”
It is submitted for the applicants that while in its terms the letter of 19 November 1997 makes no reference to the first respondent having exercised any decision making capacity in relation to the new application, when the letter of 19 November is read with the letter of 21 November, there is an inference arguably able to be drawn that such was the case. This is based upon the use of the words "after further discussions with the Presiding Member" as they appear in the letter of 21 November. In my view, for the purpose of determining whether there is a serious case to be tried, that argument is clearly open and arguable.
There are two matters which the case for the applicant says point to a proper foundation for an ultimate finding of reasonable apprehension of bias. They derive from the text of the letter of 19 November 1997. The first is that there has been a determination of the new application.
The second is the hearing of the merits needs to be disposed of promptly in view of the long history in the Tribunal.
As will be observed in the letter of 19 November, advice was given to the applicants the substantive hearing was listed for 2 December 1997. As appears from the letter of 21 November, despite the arguable appearance of a decision having been reached and conveyed in the letter of 19 November, a hearing date was then given for the application for joinder. The advice of listing is that the application for joinder would be heard at 10 am on 2 December and the substantive hearing would be at 11 am.
It is the combination and proximity of time of those hearing dates which the case for the applicant says shows there is a serious issue to be tried as to reasonable apprehension of bias. It arises from these circumstances: If the applicants were successful in their joinder application at 10 am, it is patent that, not having been provided with the information by the third respondent in the manner previously referred to, it would not be in a position to be prepared for a hearing at 11 am of the substantive application. It is said the proximate listing is arguably open to the inference that there has been a pre-determination - that is, a reasonable apprehension of such - that joinder would not take place.
The law on reasonable apprehension of bias stems in recent times from the High Court decision in Livesey v New South Wales Bar Association (1983) 151 CLR 288 at 293 to 294 where the High Court said:
“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.”
The reasonable apprehension of bias test as so stated in relation to Judges has been applied to statutory Tribunals: see Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 and Re Media Entertainment and Arts Alliance; Ex parte Hoyts Corporation Pty Ltd (1994) 68 ALJR 179.
As previously mentioned, the test was applied in Khadem v Barbour in relation to a member of the Tribunal. That was a case involving ostensible bias but ostensible bias said to arise from comments made during the course of a hearing. In that respect Khadem v Barbour is distinguishable. Hill J discusses the application of the reasonable bias test and the manner in which it is to be applied by the Courts. Those matters have not been argued other than by a bald reference to Khadem v Barbour before me, but I note that in his reasons Hill J stated:
“The cases involving ostensible bias generally deal with circumstances where it is suggested that a Judge or Tribunal member has a preconceived view that he or she should be disqualified from hearing the case.”
In my opinion, applying the test in Livesey's case to the facts as I have outlined them and to the inference which I have accepted as arguable, there is a serious case to be tried as to whether the first respondent is a person in relation to whom it could be concluded there was a reasonable apprehension of the relevant nature.
Turning then to the balance of convenience, it is the position it is not in dispute that - on the only evidence before me - the first respondent is presently listed to hear the relevant applications on 2 December 1997. It is not disputed the hearing would provide the occasion for the applicants to fully state their case to the first respondent, nor is it disputed that if the first respondent fell into error of law in either of the hearings listed for 2 December 1997, a right of appeal would lie from the Tribunal.
Nevertheless, the central question remains whether as a consequence of the letter of 19 November 1997, read in conjunction with the letter of 21 November and subject to the inference which I have found to be arguably drawable - it can be said the first respondent is a person who has already determined the new application. If, on the full application (the hearing of this application), that was found as a fact, then it would seem to me that it would be inevitable there would be a finding that the serious case was made out. None of the other statutory remedies would provide the applicants a remedy in relation to someone who approached the case pre‑determined, if that were found to be the position as it was able to be apprehended.
I have not been made aware on behalf of the first respondent or otherwise of any inconvenience that would result from interlocutory relief being granted, save in respect of the second respondents who contest there should not be any further delay and understandably do so. However, I regard the issue of justice raised by the applicants as so fundamental that it must outweigh the considerations raised by the second respondents at this time.
Furthermore, I regard any inconvenience to the second respondents as being open rectification within the Tribunal itself - that is, if some other Tribunal Member were to be listed to hear the applications, then the case in respect of the first respondent would not be there and any delay would be avoided. In my view, there is nothing in the balance of convenience which is shown to weigh against the making of the interlocutory order.
If, of course, in some way the first respondent was required to hear the matter, there would be delay pending the hearing of the final application. That is a matter, however, which could be dealt with by the Court listing the substantive application with such promptitude as it is able to provide.
For these reasons I am of the view that the applicants have made out their case for interlocutory relief and that they would be entitled to orders in terms of paragraphs 1 and 2 of the claim. I will hear counsel further as to costs.
I certify that this and the preceding seven (7) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice R D NICHOLSON
Associate:
Dated: 4 December 1997
Counsel for the Applicant: G J O’Hara Solicitor for the Applicant: Kott Gunning Counsel for the First Respondent: P Corbould Solicitor for the First Respondent: Australian Government Solicitor Counsel for Second Respondents: M J D Spinelly (self-represented) Solicitor for Second Respondents: None on record Counsel for Third Respondent: M McClure Solicitor for Third Respondent: Australian Government Solicitor Date of Hearing: 28 November 1997 Date of Judgment: 28 November 1997
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