Preston Erection Pty Limited v Sandman Holdings Pty Limited

[1992] HCATrans 108

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S78 of 1991

B e t w e e n -

PRESTON ERECTION PTY LIMITED

Applicant

and

SANDMAN HOLDINGS PTY LIMITED

Respondent

Application for special leave
to appeal

MASON CJ TOOHEY J GAUDRON J

Preston(2) 10/4/92

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 10 APRIL 1992, AT 10.16 AM

Copyright in the High Court of Australia

MR G.T.W. MILLER, QC:  May it please the Court, I appear

with my learned friend, MR K.P. SMARK, for the

applicant. (instructed by M.D. Nikolaidis & Co)

MR D.R. PRITCHARD: If the Court pleases, I appear for the

respondent. (instructed by Baker & McKenzie)

MR MILLER:	If it please Your Honours, may we hand up copies of our summary submissions?
MASON CJ:	Thank you.
TOOHEY J:	What happens to the damage point, Mr Miller?
MR MILLER:	We would ask, ultimately, that the matter be

remitted to the Court of Appeal, and what we would

be seeking there is that it be remitted to the

trial judge. The damage point that was put on the

original application I do not wish to argue,

Your Honour. The strongest point in this is the

disqualification point.

TOOHEY J: Well then, if you do not wish to argue the damage

point, what is the relevance of the offer and

acceptance point?

MR MILLER: Precisely, Your Honour. On damage, we say that

there is - what there should have been was a
finding by the trial judge that there was a loss of

opportunity and damages could have been assessed.

MASON CJ: Well, you do wish to argue the damage point.

MR MILLER:  I suppose, in that analysis, yes, Your Honour,

although that is not summarized here.

MASON CJ:  I mean, you need to do it, do you not? Let us

assume, for example, that you do not succeed on

disqualification but you do succeed on your first

point in relation to contract. I would not wish to

indicate, by presenting that as an hypothesis, that

I am indicating that I think you may succeed on it.

MR MILLER:  Your Honour, in short, what we would be seeking:

we do not ask the Court, if leave is granted, to

assess the damages but, rather, to remit the matter

for assessment.

TOOHEY J: But that can only be on the basis that damage was

suffered, can it not?

MR MILLER: Well, Your Honour, we say that there was

sufficient material upon which the district court

judge could have assessed a loss of opportunity

and, therefore, damages. But that is a matter, we

say, need not trouble this Court.

Preston(2) 2 10/4/92

TOOHEY J: In a sense, it has to, does it not?

MR MILLER:  We seek a remitter here only to the Court of

Appeal and from there we would seek that it be

remitted back for damages to be assessed.

TOOHEY J: But why should it go back merely because there

has been a finding of breach of contract if the

evidence, as found by the trial judge and as
supported by the Court of Appeal, was that there
was no evidence of any loss flowing from that

breach? Best it could found an award of nominal

damages.

MR MILLER:  We would seek to argue in a reconstituted Court

of Appeal that there was material upon which the

trial judge could and would have - - -

MASON CJ: But that assumes you are going to succeed on the

disqualification point.

MR MILLER:  Yes, Your Honour, it is the strongest point and,

Your Honour, as it is an appeal from an

intermediate appellate court and there was a

refusal to disqualify, this is the only Court we

would say -

MASON CJ:  We follow that, but what we are putting to you is

that if you do not succeed on the disqualification

point and you succeed only on the contract point,

how do you avoid the damage problem?

MR MILLER: Other than in the manner I have put it, I cannot

avoid it, Your Honour.

MASON CJ: That seems to me to indicate that if you are

pursuing your contract point, you have to pursue

the damage point as well. The only alternative is

to proceed only on the disqualification point.

MR MILLER:  I would seek to maintain the contract point but

only in the manner we have indicated, Your Honour.

MASON CJ: Very well, you had better present your case.

MR MILLER:  The strongest point, Your Honour, we say, in short, is the disqualification point. Two

authorities which are not referred to in the

summary of submissions on the disqualification

point, if I could take Your Honours there, is

firstly, the decision of the Full Court of the

Court of Appeal, five Justices in Australian

National Industries v Spedley Securities Ltd in

which Mr Justice Cole - we have brought copies of

that, Your Honours, and I will come to it shortly.

The point we say is that there is conflict in the

law as administered in the New South Wales Court of

Preston(2) 3 10/4/92

Appeal in relation to the stringency of the test to

be applied in relation -

MASON CJ:	What is the conflict?
MR MILLER:	As to whether or not, in appreciating an

application, the reasonable bystander might infer

apprehended bias or whether the test is one that it

should be demonstrated to the extent that a

reasonable man with no inside knowledge would

infer. Mr Justice Meagher, in that judgment -

perhaps if I take Your Honours to it now. It is

only three pages. Can we hand up four copies,

Your Honour. Perhaps if we go to the last

judgment. It is the last three pages of that

judgment. At the bottom of the page:

The law relating to disqualification

through bias was stated in the High Court in R

v Australian Stevedoring Industry Board;

Ex parte Melbourne Stevedoring Co -

and His Honour quotes the passage, and then says:

Until Livesey's Case, that was considered

to be a precise and accurate statement of the

law. If it still represented the law, the

present appeal would have to be dismissed.

But the High Court, in Livesey's Case, laid

down an entirely different principle.

And His Honour there referred to:

the circumstances of 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."

This principle has been analysed by

Mahoney JA. The most significant difference

is that former required at least a

probability, and perhaps a high probability,

of distrust to arise in the mind of a

reasonable observer, whereas the latter

requires nothing more than a mere possibility.

To make things more difficult, the High Court,

differently constituted, in Re Polites seemed

to treat the two cases as if there were not
inconsistency between them and as if the test

propounded in the earlier case was still good law. However, I should have thought it clear enough that if in Livesey's Case itself the

earlier law had been applied a different

result would have ensued.

And then down to the bottom of page 3:

Preston(2) 4 10/4/92

With the greatest respect for the authorities

which undoubtedly bind me, I should have

thought that any reasonable observer who was

acquainted with the idea of a judge at all

would assume that a judge had precisely -

I am sorry, I should not read that, Your Honours.

That related to the particular facts. But that

shows the distinction that His Honour appreciates

there.

Mr Justice Samuels at page 6 - and the

judgments are not continuously numbered - referred

to Polites, and then at the top of page 7 to

Your Honour the Chief Justice's judgment in Re JRL;

Ex parte CJL, and I will not read in detail the

passage that is set out. But Your Honours will see

that Mr Justice Samuels then says:

It will be observed that Mason Jin that

statement said (loudly and clearly) that the

ground of disqualification is a reasonable

apprehension that the judicial officer will

not decide the case impartially or without

prejudice, rather than that he will decide the

case adversely to one party.

So, we have "might" as distinct from "will".

In another case, if I could provide a copy to

Your Honour - - -

TOOHEY J: But in any approach, Mr Miller, the qualification

of "reasonableness" exists, does it not?

MR MILLER:  Yes.

TOOHEY J:  I mean it is not simply any apprehension,

however ill-founded, however fanciful it might be.

MR MILLER: No. There is conflict in that judgment as to

the approach or the stringency of the test to be

applied, but I take the point that Your Honour

makes in respect of the reasons.

TOOHEY J: Well, it may be of some importance in this case

because it might be said that on any approach that

you could take it is impossible to conclude that

there could be a reasonable apprehension of bias.

MR MILLER: In the particular case.

TOOHEY J: Well, it is the particular case we are concerned

with.

MR MILLER: Yes, Your Honour. I should indicate,

Your Honours, because it will come to the question

Preston(2) 5 10/4/92

of whether or not the particular case Your Honour

had here is the appropriate vehicle, that upon

inquiry a moment ago to the Deputy Registrar, we

learnt that at 4 pm yesterday afternoon an

application for special leave was filed in the ANI

v Spedley case.

TOOHEY J:  But it is worlds apart, is it not? I have not

read that case but, as I understand it, it relates

to fact finding by a primary judge.

MR MILLER:  Yes, it does, and of material from which it

could be indicated that the trial judge or the

potential trial judge had prejudged the issue, as

distinct from the situation we have here where

His Honour Mr Justice Clarke had appeared as

counsel in strongly contested proceedings which are

reported in which Mr Preston, the alter ego of the

applicant, was moved against for contempt. So far

as Mr Preston was concerned, or we would submit

that a reasonable conclusion or the conclusion of a

reasonable bystander, having regard to the decision

of Mr Justice Hunt in that case, would be to

conclude that so far as - particularly Mr Preston

would be concerned, there would be a feeling on his

part that those findings were attended with - well,
a feeling of an adverse finding against himself

sufficient that any reasonable bystander devoid of

legal training but with a knowledge of those

proceedings might consider - - -

MASON CJ: That just does not come through in the material

before us. What I am putting to you is this,

¥r Miller: what basis is there for apprehending or

inferring that Mr Justice Clarke would have an
adverse view of this particular company or, more

particularly, a view adverse in relation to the

issues that came before the Court of Appeal for

determination?

MR MILLER: Because His Honour had already disqualified

himself on an application being made. That appears

from the transcript of the argument before the

Court of Appeal.

TOOHEY J: But in an appellate matter?

MR MILLER:  No, in a matter which came before His Honour in

the commercial division on a directions hearing.

We cannot obtain a transcript of it but

Your Honours will see, by referred to the - if
Your Honours refer to the short transcript, it

becomes apparent from it, where His Honour accepted

the fact that he had already disqualified himself

on application in another matter.

Preston(2) 6 10/4/92

MASON CJ: Yes, but we do not know what that other matter was. For example, if that other matter involved

issues of credibility, fact finding, attending the

giving of evidence by some officer of the company

that he knew, then that would put a particular

complexion upon it. But, here, the Court of Appeal

was confronted with pure questions of law.

MR MILLER:	Your Honours, we appreciate that that is the point that was made by His Honour, namely, because
it involved pure questions of law he should not
then proceed to disqualify himself. The question
we would seek to argue as a matter on appeal, and
we say is a matter which gives rise to an
application for special leave, is whether, if the
appeal is an appeal which involved matters of law
only, as distinct from matters of fact, therefore, there is no obligation to disqualify if,
independently of that, otherwise there would be an
obligation to disqualify. In other words, as a matter of policy, if it involves matters of law only, does that override the obligation to
disqualify?  We say that it cannot because the
obligation to disqualify goes to the very heart of
the administration of justice.

TOOHEY J: There is no question of overriding the obligation

to disqualify. That just begs the question.

MR MILLER:  Your Honour, the question is whether or not, as

a matter of policy, an application for

disqualification should not be entertained if what

is involved is only a matter of law, and we say

that should not be the case. If the test, which is

one of the reasonable bystander, is such that the

prior involvement of the judge is such that to a

person devoid of legal knowledge it appears that
bias might result, then disqualification should
occur irrespective of whether the matter that the

judge is involved with at appellate level is purely

a matter of law.

MASON CJ:  But the reasonable bystander is not a

Neanderthaler. I mean, one has to accept that

there is a distinction between deciding a question

of fact, determining whose evidence is going to be

accepted and deciding a question of law. A

reasonable bystander can draw that distinction.

MR MILLER: 

Your Honour, in a judgment that I was going to

refer to Your Honours, the President of the New
South Wales Court of Appeal, who was in that case

at odds with two of his brethren, Mr Justice Clarke

and Mr Justice Priestley, applied the test of the
reasonable man on the Emu Plains Omnibus as
distinct from his appreciation of the judgment of
Their Honours in that case.

Preston(2) 7 10/4/92

MASON CJ:  Maybe he has a better knowledge of the man on the

Emu Plains omnibus that we have.

MR MILLER: 

We would certainly prefer that, Your Honours, to

the test that His Honour, the President, saw being
applied by his brother judges as being one of
discourse in the muted atmosphere of the bar common

room, and it comes precisely to the point, we say,

Your Honour. It is the reasonable man with the
legally untrained mind and an untrained
appreciation of the fine distinction between the
duty of the judge at appellate level on a matter of

law only, as distinct from matters which involve

fact - factual appreciation.

MASON CJ: Are there omnibuses at Emu Plains?

MR MILLER: There are buses, Your Honour. Whether they

suffer the -

MASON CJ:  I would not have thought there were omnibuses.

MR MILLER: No. Generally single decker, I would

understand, Your Honour. Really, Your Honour, that

is the gist of the application.

So far as contract is concerned, Your Honours

appreciate the evidence or, rather, lack of it. In

respect to damage, we say there is some material

there. And there was the point of general

importance in relation to the question of whether

there was sufficient for the purposes of a

concluded offer. As Your Honours please.

MASON CJ:  The Court need not trouble you, Mr Pritchard.

Neither the issue whether there was, on the

evidence, a concluded contract between the parties

nor the issue as to proof of loss raises any

question of general principle. Moreover, we are

Appeal resolved these issues is attended with	not persuaded that the way in which the Court of	sufficient doubt to warrant the grant of special
leave to appeal.

As for the contention that Mr Justice Clarke

should have disqualified himself, we do not

consider that the point is sufficiently arguable to

warrant the grant of special leave to appeal.

There is no basis for thinking that

Mr Justice Clarke had any preconceived view of the

case or a view adverse to the applicant. The case

involved only questions of law and certainly raised

no question of credibility.

For those reasons the application for special

leave to appeal is refused.

Preston(2)	10/4/92
MR MILLER: If the Court pleases.
MR PRITCHARD:	I would apply for costs, Your Honour,

including the costs reserved by this Court on

14 February.

MASON CJ: Yes. You do not oppose that, do you, Mr Miller?

MR MILLER:	I cannot resist it, Your Honour.
MASON CJ:	The application is refused with costs, including

the reserved costs.

AT 10.36 AM THE MATTER WAS ADJOURNED SINE DIE

Preston(2) 9 10/4/92