Rajski v Bainton

[1991] HCATrans 284

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S9 of 1991

B e t w e e n -

LESZEK JOHN RAJSKI

Applicant

and

R.J. BAINTON

Respondent

Application for special leave

to appeal

BRENNAN J
DAWSON J

TOOHEY J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 4 OCTOBER 1991, AT 3.11 PM

Copyright in the High Court of Australia

Rajski(2) 1 4/10/91

MR J. BASTEN:  I appear for the applicant in this matter if

the Court pleases. (instructed by Johnson & Co)

MR P.M. JACOBSON: If the Court pleases, I appear for the

respondent. (instructed by Bruce & Stewart Turton)

BRENNAN J: Yes, Mr Basten?

MR BASTEN:  Your Honours, might I go straight to the grounds

which are set out on page 193 of the appeal papers.

May I take the Court to the first ground which

appears at line 14 on that page in relation to the

question of Mr Justice Handley's disqualification

on the basis of an apprehension of bias. The

matters upon which that ground are based appear

briefly in the affidavit which precedes those pages

at pages 191 at line 24 through to the top of the

next page.

The basis of the claim is set out in a letter

which was tendered to the Court at the outset of the proceedings and which appears at page 235 of the appeal papers, and perhaps it would be simplest

if I take the Court through the matters raised in

that letter. The first matter which is raised is a

matter I will pass over for the present purpose.

It concerns an attempt by the applicant to brief

Mr Handley in 1983, and I pass by that matter.

At about point 7 on the page, the second

matter raised is that in 1986 Mr Handley accepted

instructions on behalf of Tectran Corporation in

the proceedings which are referred to as the legal

aid proceedings, in which Tectran sought to have

the legal aid grant to the applicant for the
purposes of two existing substantive proceedings,

the 1980 and 1985 proceedings, terminated.

Might I interpolate there that the 1980

proceeding was one brought by Tectran against the

applicant alleging a breach of contract on the

applicant's part in relation to the delivery of

some software of which he was, he said, the author

and which the company, Tectran, said failed to live

up to the specifications required.

DAWSON J:  Mr Basten, before you go on, were any of these matters raised at the hearing?

MR BASTEN: Yes, Your Honour. This letter was indeed handed

up. It was given to the registry prior to the

commencement of the proceedings and it was dealt

with in the transcript at page 240 of the appeal

papers. This is the transcript in the Court of

Appeal on 26 February last year. The acting

Rajski(2) 4/10/91

president at line 13 referred to a letter which he

says he had seen addressed to Mr Justice Handley.

I think that is an inaccuracy. Justice Handley

then notes:

Mr Rajski, when I received your letter, a copy

of your letter from the Registry of the

Court -

and that is the one to which I was taking

Your Honours -

there was one matter which concerned me in the

matters that you mentioned and I had inquiries

made -

That is the fourth matter concerning a circular

which he issued as president of the Bar Association

and which need not detain the Court in relation to

this application. Over the page at page 241 at

about line 10, Mr Rajski sought to put certain

matters in evidence in support of the matters he had set out in the letter. The acting president said:

We can assume that the matters are so - I think that should be a full stop -

they do not amount to any reason in

Mr Justice Handley's view for disqualifying

himself.

BRENNAN J: Whereabouts is that, Mr Basten?

MR BASTEN:  I am sorry, at line 10. I should perhaps note -

perhaps I jumped a little bit, Your Honour. On the

previous page, having referred to the matter at

line 15 to 24 in relation to the circular,

His Honour stated that he saw no reason why he

should not sit on the case.	I think what Dr Rajski
was seeking to do was to draw his attention to

other matters which had been raised in the letter

and evidence thereof. There is the interchange to

which I took Your Honours on 241 where the acting

president sought to stop Dr Rajski and there is

some further discussion which I need not take

Your Honours through in detail. It goes over to

242 at about line 17 where the acting president

said:

I have said that this letter, all of these

documents will be initialled by me and placed

with the papers. A note has been taken of

that and you will be amply protected -

Rajski(2) 4/10/91

The matter is still pursued and at the bottom of the page the acting president said:

I do not think there is any dispute about the

facts that you put in the letter. No one is

saying that the basic facts in the letter are

wrong -

apart from the question of what was said to the journalists, which is irrelevant. Again, after

some further pressure, at page 243 at the middle of

the page at line 13, again the acting president

said:

I do not think there can be that objection.

If you take the matter to the High Court no

one is challenging what you say in the letter.

It is said the matters in the letter

Mr Justice Handley does not find to be grounds

for his disqualifying himself, so that is

clear enough.

MAHONEY JA:	Even if they were proved to be
true.

SAMUELS AP: Let us assume they were true,

they do not amount to grounds ..... that

protects you completely.

There are then some other matters raised and

Mr Justice Handley responds at the top of page 245.

I do not seek to take Your Honour to that matter.

Mr Justice Handley refers in the middle of that page to the fact that he had acted for Tectran

Corporation in the attack on the legal aid

certificate in proceedings which were filed against

the Legal Aid Commission. This was something that

was drawn to the applicant's attention by the

registrar, he says. There is some further

suggestion about point 8 on that page, I think

line 23, by the applicant:

The next one is Mr Bainton QC, I can prove,

acted with Mr Handley in legal aid proceedings

on 26 February 1986. I have minutes of

meetings of Mr Bainton -

That is a matter which is referred to in the

letter. On the following page, again at about

line 20, Dr Rajski is expanding upon the matters

which were the subject of the 1985 proceedings.	He
refers to Mr Handley being briefed with an
affidavit of Mr Davidson, if Your Honours have it, at the bottom of that long paragraph at line 20.
There is quite considerable discussion, in other
words.	Then finally on page 247 Mr Justice Handley

at about line 18:

Rajski(2) 4 4/10/91

I think I understand sufficiently at the moment, Mr Rajski. I do not retain in my

memory any of the detail of the legal aid

proceedings, and at the moment I do not see

any reason why what recollection I do have

should embarrass the fair adjudication by me

of this appeal.

With respect, that is not the right test and

Dr Rajski makes the point that it is a different

issue, it is not the point about His Honour's

recollection. At line 24 he refers, I think that

is, to Vakauta's case. At the bottom of the page

the acting president notes the correct test. There
is some further discussion about the

interconnection of the matters. Then perhaps the

last matter is at line 22 where the applicant says:

Yes, I have. Yes, I put. The next one is

that, in fact relates to Mr Handley's advice,

and after a call on subpoenas to obtain

records of payments by me and my mother for

flat which I was living at the time and I am

still living, the price.

That is still a matter connected with the legal aid proceedings going to the means. That is the full

extent, I think, of the discussion in the court of

the matters which were raised, but it is clearly

put on the record. I think all of the matters that

were dealt with in the letter which appears at page

235 were ventilated as far as they could be.

BRENNAN J:  Mr Basten, if I could take you back to page 245

where there is a discussion about the Tectran

representation in the legal aid proceedings, at

line 13 or thereabouts Mr Justice Handley responds

and indicates what on his understanding was the

nature of those proceedings which had nothing to do

with and appear to be remote from the issues

arising in the appeal before the Court of Appeal.

I appreciate that Mr Rajski is concerned that there

was some affidavit with which Mr Handley, as he
then was, may have been briefed, but at page 247

Mr Justice Handley returns to the question and says that in his memory of the matter there is no reason

why he should not sit. In those circumstances,

does anything appear in these papers which suggests

that Mr Justice Handley's appreciation of it was

wrong?

MR BASTEN:  I think it does, Your Honour. If I might go

back to the letter - may I just explain what the

1980 and the 1985 proceedings were very briefly.	I
had indicated what the 1980 proceedings were.	They
were the claim by Tectran.	The applicant's

response to that had been that these proceedings

Rajski(2) 5 4/10/91

were not only meritless but were known by the

company to be meritless on the basis that their own

experts and employers had said that the product was

as promised.

He then attempted to file a cross claim which

alleged that the company, its officers and its then

solicitors, Allen Allen and Hemsley, or certain

partners thereof, had been responsible for that

action which constituted an abuse of process. It

was that attempt to file a cross claim which came

before Mr Justice Miles in 1984 and in relation to

which His Honour held that there was an arguable

case of a conspiracy in relation to certain of the

solicitors and officers and the company.

He declined to join that cross claim to the

1980 proceedings and it was that cross claim which

was in due course filed as separate proceedings in

1985.      So that the matters which were raised in the

1980 and 1985 proceedings really went to the heart

of not only the dispute raised by Tectran, but also

the claim for conspiracy. The allegations which

were made in the legal aid proceedings are set out

in the letter, if I may return to the letter, at

page 236. Probably I can take Your Honours

straight to - at about point 7 on page 236 there is

a rather indistinct letter (b), I think, in the

left-hand margin. It says:

Handley QC was briefed in the legal aid

proceedings with affidavit of C.M. Davidson of

BDW sworn 11 February 1986 which annexed the

pleadings in the 1980 and 1985 proceedings and

certain correspondence between BDW and the

Legal Aid Commission of NSW, including the

letter from BDW to the Commission dated

14 October 1985.

The said letter alleged that:

(i) the claim by Raybos & Rajski in the 1980

and 1985 proceedings are without substance and

will fail;

(ii) that Rajski & Raybos have not made

complete disclosure of their assets and

financial position in their applications to

the Commission for legal aid.

So that what is being asserted in the letter is

that both the merits and the means were being

challenged in the legal aid proceedings and that

one may therefore infer His Honour, then

Mr Handley QC, being briefed as senior counsel for

Tectran in those proceedings had given consideration not only to the question of the

Rajski(2) 6 4/10/91

merits of the 1980 and 1985 proceedings, but also
to the means and what one might think is a

potential allegation of fraud against Dr Rajski in

relation to the application to the Legal Aid

Commission.

BRENNAN J: That may well have been included in his brief,

but the nature of the proceedings, if

Mr Justice Handley's recollection was correct, were

a very narrow question of legality in the conduct

of the Legal Services Commission.

MR BASTEN: It is fair to say, I think, Your Honour, that

the further details of those proceedings do not

appear and were not presented in the Court of

Appeal, but I think it is also fair to say that

Dr Rajski was prevented by being told that he was

protected and did not need to establish the
substance of the matters set out in his letter - I

think it is fair to say that the legal aid

proceedings were proceedings in the administrative

law division of the supreme court. They certainly

sought a review of the grant or grants of legal aid

that the applicant had received. In fact they went

off on a point of whether or not the company could

subpoena documents from the commission.

That was a matter which was dealt with before

Mr Justice Lee and then on appeal. So that what in

fact was argued in those proceedings did not attach

to the matters raised in the letter. It was the suggestion that the matters which were raised in the letter were indeed part of the proceedings and

matters in relation to which Mr Handley had been

briefed and would no doubt have been there to

argue, had the subpoena matter not intervened.

BRENNAN J: But is it not necessary before the test is

satisfied that material should appear from which

the interested onlooker would draw the inference

that the issue which the judge is then called upon

to decide is an issue which he has prejudged by

reason of some previous conduct?

MR BASTEN:  Is an issue in relation to which he has acted on

the other side perhaps from the applicant in the

present proceedings. That in my submission would

be sufficient. The attack on the 1980 and 1985

proceedings, if as is suggested it goes to the
merits and that was accepted, of those proceedings,

is very much a matter in relation to which one

would assume that counsel briefed on the other side

had formed a view and had been briefed with

material which would permit him to form a view.

Mr Davidson's affidavit annexed and filed in those

proceedings, or at least contained in the brief in

those proceedings, was an affidavit which both

Rajski(2) 4/10/91

adverted to these matters and included the

pleadings in those proceedings.

The conduct alleged in relation to the present

respondent is conduct which would constitute if

found joinder by him in the very conspiracy which

was asserted against Allens and the officers of the

company in the 1985 proceedings. So that is the

connection in my submission between the two
proceedings. Of course, one has to know something

about the case before the Court of Appeal in order

to understand part of that connection, but in so

far as Mr Handley's role in the earlier proceedings

goes, in my submission there is ample material

contained in that affidavit and the letter and

pleadings.

BRENNAN J: In which affidavit?

MR BASTEN:	The affidavit of Mr Davidson which is referred to and discussed by - I think Your Honour drew my
attention to the passage at which Mr Justice Handley had adverted to the affidavit
himself. If I take Your Honour to page 237 - it
was the page from which I was reading from the
letter - there is some history given to the
allegations which appears at point 3 on that page
in relation to the allegations before Mr Justice Miles. There is then an assertion at
para (ii) of the abundant evidence available to consultants and to the solicitors.

BRENNAN J: But this is not an affidavit.

MR BASTEN:  No, but this is material which was placed before

therein is all true and you do not need to present material to establish the truth of the contents or the truth of the allegations contained

the Court of Appeal and in relation to which the contained

in this letter." Those are the passages to which I

took Your Honour.

BRENNAN J: Yes, that is right, I had forgotten that

passage.

MR BASTEN:  Then at about point 7, paragraph (iii):

the Commission made examination of Holland J's

judgment and was satisfied that Rajski &

Raybos had not deceived the Commission .....

(e) On 27 May 1986 Handley QC referred Lee J

to the said letter of 14 October 1985 -

Rajski(2) 4/10/91

which contained the allegations referred to at the

foot of the previous page.

(f) On 27 and 28 May 1986 before Lee J

Handley QC relied on remarks of Holland J

about a grant of legal aid ..... on

23 September 1986 he stated to the Court of

Appeal that Holland J expressed himself rather

strongly that the Commission had mis-exercised

its power or had been misled by Rajski into

granting him legal aid or some combination of

the two in the 1980, 1985 and 1986

proceedings -

Then the letter turns to a third paragraph which

notes that the applicant had made complaints about

the conduct which was the subject of the present

proceedings in relation to the respondent to the

New South Wales Bar Association and that
Mr Handley QC had been the vice president and

subsequently president of the Bar Association at the time those complaints were being considered.

There is also evidence that there was a reply from

the respondents, the Bar Association, the contents
of which have never been disclosed to the present
applicant.

It is my submission that where counsel has been involved on the other side of proceedings in

relation to matters which are closely connected and

which verge on allegations of fraud against another

party, it is inappropriate that he, when he comes

to the bench, should sit upon related proceedings

brought by the person who has been the subject of

such severe criticisms in the proceedings in which

he acted and proceedings which of course, if they

had been successful, would have terminated the

applicant's access to legal representation in those

proceedings with, one might think, fairly desperate

results for an impecunious litigant who was deeply

immersed in complex litigation. That of course

ultimately has been the result.

In so far as the connection with the present

proceedings is concerned, it may be of assistance

if I took Your Honours to the description of the

present allegations, firstly in the judgment of

Mr Justice Clarke at page 19 of the application

book. It is probably sufficient if I refer

Your Honours to the nature of the allegations which were outlined against Messrs Jones and Esler, the two solicitors, which appear at letter P.

His Honour Justice Miles is quoted as making a

finding that an arguable case existed that:

Taking all into account I believe that a

possible explanation of the conduct of the two

Rajski(2) 9 4/10/91

solicitors after action was brought is that

they lacked any belief that the Tectran claim

had merit, that they persisted in the

application for access to the tapes - - -

DAWSON J: What page is this, Mr Basten?

MR BASTEN:  I am sorry, at page 19 of the appeal papers. It

is Mr Justice Clarke quoting - I am sorry, they are

the handwritten numbers at the top right.

DAWSON J:	I was looking at the wrong numbers.
MR BASTEN:	He is quoting Mr Justice Miles in the 1984

application -

that they persisted in the application for

access to the tapes in the hope that something

might turn up or simply in the hope of

creating a smoke screen, at all times being
aware that the prime purpose of the client in

bringing the litigation was not to recover damages as claimed ..... but either to force

Raybos to renegotiate the contract or crush

Raybos commercially.

Over the page he notes that:

Mr Esler came in for some special attention

from his Honour in connection with his part in

the attempt to obtain access to the master

tapes •.... In his Honour's view the inference

was open that that application to the court

for access to the master tapes and for
assistance in loading and running the Raybol
software system was not bona fide.

In broad terms, therefore, his Honour found the existence of an arguable case that there

was an abuse of process, or a conspiracy,

involved in the institution of the proceedings

of an application for access which was not and also, at a later stage, in the maintenance bona fide -

that is access to the software; again the matter
being closely related to the matter which was

alleged against the present respondent because it

was his conduct in relation to access to the

software in November 1984 and January 1985 which

was the subject of complaint. When the matter came

before the Court of Appeal, a similar summary of

the case which was being raised by the applicant in

relation to both the issues of bona fides at

page 143 and in relation to access to the tapes at

pages 146 through to 147 - and if I might just read

Rajski(2) 10 4/10/91

from the passage at page 148, at the top of the

page His Honour says:

Clarke JA did not form any opinion as to

whether the purpose, or the dominant purpose,

of Tectran was such. His Honour referred to

the "weakness" of Tectran's case in the 1980

proceedings but went no further.

In these circumstances, I do not formally decide this issue because, in my opinion, it

is proper to act in this application upon the

basis that Mr Rajski has an appropriately

arguable case .....

I come therefore to the question whether

Mr Rajski has an appropriately arguable case

that Mr Bainton believed that Tectran's case

was in this sense not bona fide.

He returns to that theme at page 153 at line 8,

noting that:

Mr Bainton was first briefed in June 1984. He

was involved in the proceeding before Miles J.

On his advice certain steps were taken in relation

to what he describes as the copyright issue. At

line 16:

Mr Bainton's submission has been generally
that, whatever be the strength of Tectran's
claim when made in 1980, by 1984 the
likelihood of its success based upon the
copyright issue was such as to increase

significantly the likelihood of success of the

proceeding overall -

and so on. That in my submission establishes the

connection between both the 1980 and 1985

proceedings, the merits of which had been cast in

doubt in the legal aid proceedings and the

proceedings which were being brought against the

present respondent.

BRENNAN J: When you say it cast some doubt in the legal aid

proceedings, do you mean that there was an

affidavit filed in those legal aid proceedings

which asserted that?

MR BASTEN: Asserted that the claims were baseless, yes.

BRENNAN J: But do we know the real nature of these

proceedings in the legal aid matters? Whatever

might be filed is one thing, but what were the

issues that fell for determination?

Rajski(2) 11 4/10/91

MR BASTEN:  It is hard to determine what the issues were,

Your Honour, because the summons is brief, as one

might expect. It seeks to review the grant of aid.

The affidavit in support simply annexes the

pleadings in the earlier proceedings and the letter

of 14 October 1985. The letter asserts, as

Dr Rajski says in his letter, that the proceedings against Tectran were baseless and without merit and

then goes on to make significant allegations about

his non-disclosure of funds. One assumes that the

intent of the proceedings was to have the grant

reviewed by the administrative law judge on either

or both of these bases.

DAWSON J:  Who initiated those proceedings?

MR BASTEN:  Those proceedings were initiated by Tectran. It

was in those that Mr Handley acted for Tectran.

Mr Rajski was joined as a defendant to those

proceedings, although the principal defendant was of course the Legal Aid Commission whose decision

was being reviewed. Your Honours, in connection

with that matter, in my submission the case falls,

if I may adopt some words that Your Honour

Mr Justice Dawson used on 10 May 1991 in relation

to the claim in respect of

Mr Justice Badgery-Parker's dismissal:

if, for instance, a judge, whilst he has been

at the bar, has held a brief in relation to a

certain litigant not unconnected with the
matters which come before the court, he does

not say, "Well, I've forgotten all about it",

even if that be the fact ..... He says, "I do

not sit."

That is a basic principle in our submission which

would be applicable in the present case. If that

be correct, then it is appropriate that this court

review the decision of Mr Justice Handley because,

as has been said on numerous occasions, it is

appropriate that someone other than the person who

is intimately involved in the application for

disqualification should be able to take an

objective view of the facts which are alleged

against him. Your Honours, on that basis we say

that it is appropriate that special leave be

granted to review that aspect of the matter.

BRENNAN J: What would be the result of reviewing that

aspect of the matter?

MR BASTEN:  If that aspect alone were reviewed, Your Honour,

the matter I think would have to go back to the

Court of Appeal for reconsideration as to whether

or not the strike-out motion had been properly

upheld by Mr Justice Clarke.

Rajski(2) 12 4/10/91

DAWSON J:  What if, apart from this aspect of the matter, we

were of the view - we have not come to that yet -

that the decision below did not warrant special

leave for whatever reason?

MR BASTEN:  I think in that case it would have to go back on

this ground because it is surely a question of

natural justice that the person be allowed a proper

hearing in relation to his appeal and if indeed he

did not obtain a proper hearing - I may have

misunderstood Your Honour. Does Your Honour mean

if the court did not go on to consider - - -

DAWSON J: For instance - and this is merely hypothetical -

take the extreme case that we decided - not

extreme, but a possible situation that we decided

that the decision below was correct irrespective of

who was sitting.

MR BASTEN:	That would be a matter which might affect the grant of special leave, but in my submission it
would be an extraordinary approach.
DAWSON J:	In other words, if there was bias, it did not

affect the outcome at all.

MR BASTEN: In my respectful submission, I do not think

there has been a case in which bias has been found

and yet the matter has not been returned for a

rehearing. That in itself would, I would have

thought, be a matter which would justify

consideration by this Court in some depth and would

therefore justify a grant of special leave. I

would not see that as a basis upon which special

leave would be refused; perhaps rather the

contrary.

TOOHEY J:  Mr Basten, what you must challenge is the order

made by the Court of Appeal, is it not?

MR BASTEN: That is so, Your Honour.

TOOHEY J:  I only put it to you in that way because you said

a moment ago - or you spoke of the decision of

Mr Justice Handley to sit, but that is not a

decision which, of itself, can be the subject of

any application to this Court.

MR BASTEN: 

No, the allegation of reasonable apprehension of

bias must be the basis for an attack upon the
substantive decision of the court, that is so,

Your Honour.

BRENNAN J: 

So the proposition then is that

Mr Justice Handley's decision to sit in the

circumstances of the case vitiates whatever

Rajski(2) 13 4/10/91

conclusion the Court of Appeal, as a whole, arrived

at?

MR BASTEN:  In my submission, yes, and particularly so in

this case where His Honour was part of a majority decision in certain aspects of the case and there

were differing views as to how the matter should be

dealt with within the court, His Honour in each

case being on the majority side.

DAWSON J: But if you are right, then, you would never get

to the other question because it would have to go

back.

MR BASTEN:  The only way I would get to the other question

would be that if the other question had merit, it

might be a matter which would not need to go back.

In other words, if this Court took the view that

the Court of Appeal had been wrong in dismissing the appeal, then it would not need to go back to the Court of Appeal for reconsideration on the

merits, the matter could either be reconsidered by

a single judge at first instance or go straight to
a hearing, depending on what the respondent sought

to do.

DAWSON J:  So it really only works one way. On the other

hand, if the Court came to the conclusion that

there was nothing in the argument that the decision

was wrong, it would nevertheless have to go back.

MR BASTEN:  I concede that, Your Honour. I would seek to

address Your Honours on that matter, but I concede

that ultimately it - - -

DAWSON J:	It works one way but not the other.
MR BASTEN:	Yes.
BRENNAN J:	Mr Basten, what is the material relevant to this

question, that is to Mr Justice Handley's sitting,

which was before the Court of Appeal? There is the

letter, there is the transcript of the material

which you have thus far given us, what else was

before the Court of Appeal?

MR BASTEN:  Nothing else which was of relevance to these

grounds. There was handed up a copy, I think, of a

newspaper article which is not of any concern in

these proceedings. Various other documents were

sought to be tendered as support for the

allegations made but they were resisted.

BRENNAN J:  Now I take it that there was also before the

Court of Appeal the appeal book in the matter then

pending before it.

Rajski(2) 14 4/10/91

MR BASTEN:  Yes, that is so, Your Honour.

BRENNAN J: Consisting of what?

MR BASTEN:  Consisting of a large volume of material, much

of	the material which had been before
Mr	Justice Clarke. I am not sure what Your Honour

is asking me about that material.

BRENNAN J:  What I am seeking to discover is that if special

leave were granted to you on this point, it would

be necessary to ensure that the material for

consideration by the High Court was precisely the

same as, no more and no less, than the Court of

Appeal had before it. Are we in a position to be

sure that we have precisely that material?

MR BASTEN: 

Your Honours have the material which was before

the Court of Appeal in relation to the application
for disqualification.

BRENNAN J: Relevant to the application for

disqualification, which I imagine must include the

appeal papers with which the court was then seized.

MR BASTEN:  I am sorry, Your Honours on this application do

not have the full set of those appeal papers, no.

BRENNAN J: Only for the purpose of describing what the

proceedings were from which Mr Justice Handley was

asked to disqualify himself.

MR BASTEN:  I appreciate that, Your Honour. I think it is

fair to say that for present purposes the nature of

those proceedings appears from the judgments which

were given and from the material which has been

annexed to the affidavits. I can take Your Honours

to that material for the purpose of describing in

more detail the nature of the proceedings. I do

not think, in fact, that it would be necessary for

Your Honours to have the amount of material that

was before the Court of Appeal on the substantive

appeal in order to judge this particular point, if

that were the limit of the special leave

application. I think it could be done - I am

conceding against myself that it could be done much

more narrowly.

BRENNAN J: Yes.

MR BASTEN:  And if Your Honour is asking me whether it would

be necessary for the Court to be apprized of the

whole of the material which might be relevant to an

application to set aside a judgment on its merits,

I think the answer fairly must be no.

Your Honours, the affidavit to which I referred of

Mr Davidson was, indeed, before Mr Justice Clarke

Rajski(2) 15 4/10/91

on the original strike out application; whether it

became part of the exhibits on the appeal I am not

sure but I can check that.

BRENNAN J: That is the affidavit which was filed in the

legal aid proceedings?

MR BASTEN:  Yes, and the annexures thereto. I was going to

turn then to the questions relating to the merits

of the application if - - -

TOOHEY J:  Can I just ask you this, Mr Basten: the notice of

appeal which is on page 262 speaks of "the whole of
the judgments ..... given on 21 December 1990", but
paragraph (2) deals with the application to adduce

further evidence, which was a decision by a

differently constituted court.

MR BASTEN:  No, constituted identically, Your Honour.

TOOHEY J: Yes, I see.

MR BASTEN: That appears from the index at the beginning of

the book.

TOOHEY J: Yes, I beg your pardon; I misread that. Does

that fall to be dealt with and to stand or fall

with the success or failure of the application

based upon disqualification - - -

MR BASTEN:	Yes, Your Honour, very much so.
BRENNAN J:	Mr Basten, I think we should perhaps hear what

your opponent has to say on this aspect of the

matter before we consider the general merits of the

application.

MR BASTEN: If Your Honours please.

BRENNAN J: Yes, Mr Jacobson.

MR JACOBSON:	Your Honours, the test for whether a judge should disqualify himself is well known to
Your Honours. There must be a reasonable
apprehension in the minds of a fair-minded observer that the judge has prejudged, formed a view about the subject-matter of the proceeding. That has not
been demonstrated in this case. Mr Justice Handley said in the transcript - and Your Honours have read
the transcript - that the legal aid proceeding was
a quite separate and distinct issue. It had
nothing - - -

DAWSON J: Apart from what the judge said, could you tell us

what your version of the proceeding was, the legal

aid proceeding.

Rajski(2) 16 4/10/91

MR JACOBSON:  Your Honour, as I understand those

proceedings, the applicant was Tectran. I was not

involved in the proceedings, Your Honour, and

really Your Honours do not have all that material

in the appeal papers, but it was an application

under which I think Tectran - - -

DAWSON J: Tectran is alleging apparently that legal aid

should be withdrawn, and it was alleging that it
should be withdrawn on the basis that the case was

without substance and that Dr Rajski had not
disclosed his financial circumstances as he ought.

That is as much as I gather from what has been

said.

TOOHEY J: It went further than that, did it not, as we were told? Was it not also on the basis that the action

was groundless or the defence - - -

MR JACOBSON:  I do not think that was the basis upon which

the matter was contested. Your Honours, I am in

some difficulty because the matters just are not in

the appeal papers. It is really, we would

respectfully submit, incumbent upon the applicant

to put those matters before the Court.

TOOHEY J: But if you look at the foot of page 236,

Mr Jacobson, the letter that is referred to by

Dr Rajski, being a letter from Blake Dawson

Waldron, apparently set up two justifications for a

review of the grant of legal aid, the second which

appears at the top of page 237 being the failure to

disclose or make proper disclosure of assets, but

the one at the foot of page 236 is a claim by

Raybos and Rajski "are without substance and will

fail."

DAWSON J: Yes, those are the two things I had in mind. The

Court of Appeal assumed those for the purposes of

deciding the matter to be established, is that not

right?

MR JACOBSON:  Yes, that seems to follow from the transcript,

Your Honour.

TOOHEY J:  Does it? To be established or to have been

offered as the basis for a review of legal aid.

That was, I take it, as far as Dr Rajski needed to

go.

DAWSON J:  I am sorry, yes, it is ambiguous, what I said -

that they were prepared to assume for the purposes
of this application that that was the case. When I

say this application, the application in relation

to bias.

MR JACOBSON:  Nothing else was put before the court.

Rajski(2) 17 4/10/91

DAWSON J: Perhaps you would take us to the portion again.

What page is it?

MR JACOBSON:  The letter is on 236.

DAWSON J: Yes, but the transcript.

MR JACOBSON:  The transcript commences at 240.

TOOHEY J: There is nothing very mysterious about the

application in respect of legal aid, is there, in

the sense that without really knowing the contents
of the New South Wales Act, these statutes have

provision by which legal aid can be reviewed and if

someone is facing litigation and they contend that

the party who has been granted legal aid ought not

to have been granted because they have assets which

they have failed to disclose or maybe some other
reason why legal aid should be withdrawn, they can
make a case to the appropriate body, in this case

the administrative division of the supreme court.

MR JACOBSON:	Yes.
BRENNAN J:	Is that the case? Do you know that is the way

in which the law works here?

MR JACOBSON:  I think that is correct, Your Honour. Yes,

Your Honour, I am reminded that there was some

issue of standing to bring the application and that

that was a matter of some controversy.

BRENNAN J: What is relevant here is whether or not in these

proceedings for legal aid, Mr Justice Handley's
brief required him to advocate a view of the merits

of the 1980 and 1985 proceedings which were adverse

to Raybos and Rajski in such a way that when the

merits of those proceedings arose for

consideration, if they did arise for consideration

in the current appeal, His Honour ought not to have

sat on the proceedings.	We need to know what was
the nature of the legal aid proceedings and whether

the same issues were connected with the issues

which fell for determination on this appeal.

DAWSON J: All we know is what is in the letter and at

page 243 it was said that no one was challenging

what was said in the letter. That is said by the

acting president.

MR JACOBSON:	Yes, Your Honour, that is so:
No one is challenging what you say in the
letter.

DAWSON J: And the letter says that the proceedings

concerned whether there was a cause of action and

Rajski(2) 18 4/10/91

whether Dr Rajski had not revealed the true story

about his finances.

MR JACOBSON:  Your Honour, all the letter says in my

submission is that - at the top of page 236:

Handley QC acted on behalf of Tectran against

Rajski in the legal aid proceedings and associated appeals in which action Tectran

sought to have legal aid to Rajski and his

company for the purposes of the 1980 and 1985

proceedings terminated.

BRENNAN J: That does not take it very far.

MR JACOBSON: It does not, Your Honour. What is really put

is that Mr Handley was briefed with an affidavit.

That appears from the bottom of page 236. He was

briefed with an affidavit which annexed some

pleadings in the 1980 and 1985 proceedings and

certain correspondence between Blake Dawson Waldron

and the Legal Aid Commission. The letter alleged

that the claim was without substance and would fail

and that Mr Rajski and Raybos had not made complete

disclosure. There is nothing put before

Your Honours to demonstrate that Mr Handley QC, as

he then was, had formed any view, any prejudgment,

of any issue in the proceedings against Mr Bainton

upon the basis of that affidavit of Mr Davidson.

BRENNAN J: What was the issue in the proceedings against

Mr Bainton? Was one of the issues in the proceedings against Mr Bainton the tenability of

the 1980 and 1985 proceedings by Raybos and Rajski?

MR JACOBSON:  Only in the most indirect way, Your Honour,

because the real issue, the substance of the issue

which the applicant seeks special leave to appeal

on, does not concern the 1980 and 1985 proceedings

but rather that Mr Bainton is said to have had

knowledge of an inter partes undertaking and that

he gave certain advice in contravention of an

undertaking of which he is said to have had

knowledge.

The claim in relation to the 1985 proceedings

and the 1980 proceedings as pleaded was that

Mr Bainton had knowledge that the claim that was

made by Tectran in the 1980 proceedings was without

any foundation whatsoever and that notwithstanding

that matter, Mr Bainton as counsel for Tectran

represented to the court and presented the matter

upon the basis that the proceedings were

proceedings which did have a bona fide basis.

DAWSON J:  So that there was a direct connection between the

1985 proceedings and the proceedings against

Rajski(2) 19 4/10/91

Mr Bainton, because the 1985 proceedings alleged a

conspiracy against Tectran and others to injure

Dr Rajski and it was alleged against Mr Bainton, if I understand it correctly, that he was engaged in a

conspiracy to pursue proceedings which were

baseless, by appearing for Tectran. What is said

here is that Mr Handley, insofar as he had appeared

for Tectran, was necessarily involved on the basis

of what appears at the bottom of 236 and the top of

237 in attempting to establish amongst other things

that the claim in the 1985 proceedings had no

proper foundation, was without substance and would

fail.

So that all the proceedings were bound up

together in one way or another. In essence, what

is being put is that Mr Handley, having appeared on

one side of a dispute involving a number of

proceedings, then cannot give the appearance of

being fair handed as a judge in determining one

aspect of the total dispute. If I am wrong in

putting it in those broad terms, perhaps you would

tell me where I am wrong.

TOOHEY J:  I think you would need to go, Mr Jacobson, to

what Mr Justice Handley says on page 245. The

yes, he acted for Tectran, but it was, to use

passage has already been referred to by Mr Basten. page,

his words:

a narrow question about the behaviour of a

government authority in granting, or refusing

to revoke, legal aid.

That puts a quite different complexion on the

matter. It may have been a question of the

construction of a statute in which the rights and

wrongs of the earlier litigation played no part at

all. Of course, conversely it might have been

something which went to those merits, but how are

we to approach the matter?

MR JACOBSON:  Your Honours approach it, in my submission, on

the basis that what Mr Justice Handley said was

correct.

BRENNAN J:  The difficulty about that is that the letter

appears to say something different and the

applicant was advised that he could proceed on the

footing that what was in the letter was correct.

So we are faced with a seeming contradiction. It

may yield to an analysis of what the issues were in

the legal aid proceedings; I do not know.

But may I say for myself that there are two

problems with this application. One is that it is

Rajski(2) 20 4/10/91

highly undesirable that special leave should be
granted in order to consider this question if the

material upon which the court below proceeded is

not sufficiently clear to allow an accurate

appreciation of the precise questions of fact that

will arise for determination.

The second question is that all of these

matters arise in litigation which is collateral to

litigation between Tectran on the one hand and

Raybos and Dr Rajski on the other raising issues for determination in that collateral litigation which really fall for determination in the

principal litigation between Tectran, Rajski and

Raybos which has not yet been brought to trial. It

seems to me to be unthinkable that issues should be

determined in the collateral proceedings before

they are ever determined in the principal

proceedings. One wonders whether the appropriate

order to make, even if Mr Basten's application
appears prima facie to be well founded, is to stand

over this matter until the resolution of the

principal proceedings, to stay it.

MR JACOBSON: There is also this, we would respectfully put,

Your Honours, that even if the application in

respect of Mr Justice Handley had any foundation,

the Court of Appeal decided the issue, the subject

of the application, unanimously. It could have

made no difference, the result, because the other

two judges decided the matter against the

applicant.

DAWSON J: That just will not wash, it is the principle that

if the judge were biased, he may influence the

others. One does not know. When one is talking

about the appearance of justice, that is an

argument that just must fail at the outset.

TOOHEY J:  Mr Jacobson, one of the documents we do not have,

and this is not directed at you in any way, but we

do not have the orders of the Court of Appeal. I

notice on page 184, it says the orders were not
entered. It may be because the present applicant
filed a notice of motion seeking to have that court

reconsider its decision, although it is not clear

why that would be a reason for not entering the

orders. What is the status of the action against

Mr Bainton?

MR JACOBSON:  The status is that the Court of Appeal

delivered a judgment on the application for the

court to reconsider its decision and the result was

adverse to the present applicant, Mr Rajski. That

judgment was delivered on - - -

Rajski(2)	21	4/10/91
TOOHEY J:	I am not sure what that means when you say "adverse to".	What were the orders made?

MR JACOBSON:  The orders were that the application was

dismissed and the orders that were made, I think on

21 December 1990, were eventually entered some time

in January of 1991.

TOOHEY J: But what was the effect of those orders on the

action against Mr Bainton?

MR JACOBSON:  The appeal was dismissed and the judgment of

Mr Justice Clarke stood.

TOOHEY J:  The next question is: what was the effect of the

judgment of Mr Justice Clarke?

MR JACOBSON:  The effect was to dismiss the applicant's

claim against Mr Bainton.

TOOHEY J:  So that merely to adjourn this application for

special leave would have the consequence that the

action against Mr Bainton could not be pursued

because it has been dismissed effectively.

MR JACOBSON:	Yes.
DAWSON J:	So there is no question of a stay.
MR JACOBSON:	No, because the application was dismissed.

BRENNAN J: If we were to adjourn this application and if

the principal proceedings were to be resolved

ultimately in favour of Dr Rajski and Raybos so

that those issues which are common to that

litigation and to this have been finally determined

in the principal litigation, it would be open at

that stage for Raybos and Rajski to renew the

present application and pursue whatever relief they

might be entitled to.

MR JACOBSON:  Yes, that is so, Your Honour. Your Honours

really, in my submission, need to look at the

notice of appeal which is sought to be filed

against the decision of the Court of Appeal because

all that is raised in the notice of appeal is that

Mr Bainton is - perhaps I can take Your Honours to

it. It is at page 262 and following in the appeal book. Your Honours need not look at page 262. At

263 it is said that the court erred in holding that

the application to adduce further evidence should

be rejected. That was a letter of 7 October 1981

which was said to contain an undertaking.

That matter has no relationship to the 1985 proceedings because it is concerned with a claim

based upon breach of an undertaking, an inter

Rajski(2) 22 4/10/91

partes undertaking. That could not have had any

relationship whatsoever with the grounds upon which

Mr Justice Handley was asked to disqualify himself,

and really that matter has no bearing upon the

matters which Your Honours are asked to consider in

the special leave application.

BRENNAN J:  The draft notice of appeal does not suggest that

it does. The grounds in relation to

Mr Justice Handley appear in subparagraph (l);

other grounds appear in subparagraphs (2) and (3),

is that not so?

MR JACOBSON:  Your Honour, those matters in my submission

have nothing to do with the basis upon which the

challenge was made against Mr Justice Handley.

BRENNAN J:	What matters?
MR JACOBSON:	The matters set out in paragraphs (2) and (3)

on page 263.

BRENNAN J: That is right.

TOOHEY J: What follows from that?

MR JACOBSON: It follows, Your Honour, that even if the

legal aid proceeding had any connection with the

subject-matter of the proceedings against

Mr Bainton, what is sought to agitate before this

Court is a matter which had no connection with the

legal aid proceeding because it involves an inter

partes undertaking given between, so it is said,

the solicitors for Mr Rajski and the solicitors who were then acting for Tectran. That is not a matter

which has any connection whatsoever with the

complaints that were made against Mr Handley as set

out in the letter on pages 236 and following.

TOOHEY J:  No, but they are independent grounds of appeal, are they not?

MR JACOBSON:  Yes, but there is no ground of appeal which

puts in issue the dismissal of the proceedings on

the ground that Mr Bainton was party to a

conspiracy which involved the suggestion that

Tectran had no bona fide case.

BRENNAN J:  Mr Jacobson, the case that Mr Basten has thus

far made is founded on ground 2, subground (1),

which appears on page 262, if I understand it, and

has been limited to what appears on that page

alone. The argument is that if Mr Justice Handley

was disqualified, then the other questions do not

arise in any event because the judgment was

vitiated and the appeal must be reheard by the

Rajski(2) 23 4/10/91

Court of Appeal, so that we do not turn the page, as it were, at this stage.

You have to meet, do you not, the question of

whether or not sufficient is shown in the papers to

justify the grant of special leave with respect to

the ground numbered 2(1) on page 262? I am

reminded that no doubt Mr Basten would say if he

fails on this first ground - because we asked him

to limit himself to this first ground and then to

call on you - if he fails on this first ground, he

would then have other grounds which he would seek

to agitate for the grant of special leave, but we

are not dealing with those at the moment.

MR JACOBSON:  I appreciate that, Your Honour. My submission

really is this: it was for the applicant to put

before the Court material which indicated that

Mr Justice Handley had access to information from

which it could be reasonably argued that he had

formed some prejudgment about the issues in the

case, and that has not been put before the Court.

DAWSON J: At least he put before the Court what was before

the Court of Appeal.

TOOHEY J: That would be a pretty powerful argument if the

Court of Appeal had not said to Dr Rajski, "We have

your letter and we're prepared to assume that

what's said in it is correct." I do not read what

the Court of Appeal says as necessarily meaning

that they are prepared to treat the allegations as

correct; simply that they are prepared to treat

the allegations as having been made.

MR JACOBSON:  Yes, Your Honour. That does not take it far

enough from the applicant's point of view, in my

submission.

TOOHEY J: It might.

BRENNAN J: What do you have to say about the suggestion of

a stay, or rather an adjournment of this

application?

MR JACOBSON:  That may be an appropriate course on one view

of it, Your Honour.

BRENNAN J: What is your submission?

MR JACOBSON:	My submission is that it was up to the applicant to put the material before the Court and
he has not, and that Your Honours really have to proceed upon the basis that what Mr Justice Handley
said at page 246 is correct. The applicant has not
put anything before you to suggest otherwise. What
is being put is that Mr Justice Handley, or

Rajski(2) 24 4/10/91

Mr Handley QC as he then was, read an affidavit, an

affidavit of Mr Davidson which alleged that certain

claims made by Mr Rajski were false, without basis.

That is all that has been put.

TOOHEY J:	Is that quite right? I thought it went further to suggest that Mr Handley had been briefed in
those proceedings.
MR JACOBSON:	Yes.

TOOHEY J: That is something additional to reading a piece

of paper.

BRENNAN J: The real question is this, is it not: in the

proceedings which Mr Justice Handley was to sit on

judicially, the question was going to be agitated

as to whether or not the 1980 and 1985 proceedings

were without any merit on the part of Tectran. In

the legal aid proceedings Tectran, according to the

Rajski letter, was alleging that the 1980 and 1985

proceedings were without merit on the part of

Rajski and Raybos.

If Mr Handley, in the course of his

representation of Tectran in the legal aid

proceedings, was advocating the absence of any

merit in the proceedings in 1980 and 1985 on the part of Raybos and Rajski, then impliedly he was

asserting that there was real substance in the

Tectran case in those two pieces of litigation.

That submission, if he was then retained to make

it, was one of the questions that he might be

called upon to determine judicially in the

proceedings which were then pending before the

Court of Appeal.

MR JACOBSON: 

The issue before the Court of Appeal was Mr Bainton's belief in the bona fide nature of the

1980 and 1985 proceedings. That, in my submission,

is a different matter. 

BRENNAN J: 

If it was so narrowly limited, but of course the

question of Mr Bainton's belief might itself turn
on the existence of any merit in the proceedings

which were susceptible of being believed in. I am

not suggesting what the result of this is; I am

just trying to identify the issues that would fall

for determination.  The problem is that we do not

have a really satisfactory analysis of the legal
aid proceedings to know what the issues were in

that case.

MR JACOBSON: 

Your Honour, I think I am repeating myself,

but it is not our function. If Your Honours are in

any way disposed toward granting the application on

Rajski(2) 25 4/10/91

this ground, at the very least an adjournment

should be granted.

BRENNAN J:  Thank you, Mr Jacobson. Mr Basten?

MR BASTEN:	I think from what Your Honour was saying, the suggestion was that the Court might grant special
leave but stand over the hearing of any appeal until the principal proceedings were determined.
BRENNAN J:	No, adjourn the application for special leave.

DAWSON J: Without prejudice to your position.

MR BASTEN: Yes, that would be my only submission in that

regard, that I think the Court would be justified

in going to the extent that I suggested, otherwise

I have no further submissions to make.

BRENNAN J: Let me understand that correctly.

MR BASTEN: 

In my submission the Court would be justified in

granting special leave on the ground which has been
considered, but stand over the hearing of the

appeal until after determination of the principal

proceedings to which Your Honour referred.

BRENNAN J: 

It may be that at the end of the day there will

be no need to consider the matter further.

MR BASTEN: That may well be so.

BRENNAN J:  So in that event it is better, is it not, to

adjourn it at this stage?

MR BASTEN:  A grant can always be revoked if the

circumstances change in that regard, Your Honour.

DAWSON J:  A grant can always be made too.

MR BASTEN: That is so, Your Honour. There is nothing

further I wish to say.

BRENNAN J: The order of the Court is that this matter will

stand adjourned to a date to be fixed, to be

brought on on one month's notice by either party to

the other. The Court would intimate that we would

not expect that any such notice would be given or

any attempt be made to bring the matter on at any

time prior to the resolution of the principal

litigation from which this litigation has stemmed,

that is the litigation between Tectran on the one

hand and Raybos and Dr Rajski on the other.

Rajski(2) 26 4/10/91

Accordingly, the order is that the matter

should stand adjourned to a date to be fixed.

AT 4.27 PM THE MATTER WAS ADJOURNED

TO A DATE TO BE FIXED

Rajski(2) 27 4/10/91