Re Australian Theatrical and Amusement Employees' Association; Ex parte The Hoyts Corporation Pty Limited

[1991] HCATrans 93

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Melbourne	No M40 of 1990
In the matter of -

An application for a writ of

mandamus directed to

THE HONOURABLE MR DEPUTY
PRESIDENT POLITES, a member

of the Australian Industrial Relations Commission and the

AUSTRALIAN THEATRICAL AND
AMUSEMENT EMPLOYEES'

ASSOCIATION

Respondents

Ex parte -

THE HOYTS CORPORATION PTY

LIMITED, DELARENE PTY LTD

and RAMPTON PTY LTD

Prosecutors

BRENNAN J GAUDRON J McHUGH J

Hoyts 1 12/4/91

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 12 APRIL 1991, AT 11.43 AM

Copyright in the High Court of Australia

MR R. MERKEL, QC: If the Court pleases, I appear with my

learned friend, MR L. KAUFMAN, for the prosecutors.

(instructed by Mark G. Caldwell)

BRENNAN J:  The Deputy Registrar of this Court certifies

that she has received a letter from the Australian

Government Solicitor advising that

Mr Deputy President Polites does not wish to appear at the hearing of this matter and submits to the

jurisdiction of the Court.

The Registrar certifies that he has been informed by Ryan Carlisle Thomas, solicitors for

the respondents, that they will not be represented

at the hearing and that if the application is

successful they wish to reserve argument on the

question of costs.

MR MERKEL:  If the Court pleases. Can we hand up an outline

of our submissions, and can we also hand up with it

a chronology which sets out the relevant dates and

events by reference to the application book.

BRENNAN J: Yes, Mr Merkel.

MR MERKEL: If the Court pleases, the issue, in our

submission, revolves around the letter of advice

given by the Deputy President in 1986 and that

letter was drafted by a solicitor in his firm, but

signed by him, is at appeal book pages 94 to 96.

The issue we have sought to define in paragraphs 5

and 6 in our outline and, in our submission,

relying on what was said in Livesey's case, the

question really amounts to whether he gave advice

to the client, that is one of the prosecutors,

Hoyts Corporation Pty Ltd, in respect of a live and

significant issue in the matter presently being

determined by the Full Bench.

The submissions that we will be making is that

the issues that arose in respect of a dispute in

1986 which he had advised upon in July 1986, but an

advice that was concerned only with the tactics to

be pursued by the employer, did not touch on the

merits of that particular dispute, and in any event

it was a dispute that was resolved in 1986.

A quite new dispute arose in 1988. That

became the subject of a number of notifications by

the employer and the unions as well as applications

for a new award by the employer. The documents in
respect of that new dispute are set out in volume 2

of the application book and are set out in

exhibits MGC 1 to 6.

We say that ultimately the issue before the

Court and, indeed, the issue before the Full Bench,

Hoyts 2 12/4/91

when the application for disqualification was made,

relate to whether the issues to be determined, and

to be determined in respect of the matters

presently before the Full Bench could, on any view,
be said to be the same as the issues which the

Deputy President had advised upon in 1986.

We want to briefly comment on the law.

been fairly well defined, particularly in recent
decisions, but we wanted to emphasize at the outset

It has

that this is a case where the injustice that will

occur if the Deputy President's disqualification is

allowed to stand is substantial, and we say that

does not give rise to a different test, but what we do say is that it emphasizes the need for the Court

to be clearly satisfied that there is a real

likelihood of bias. We have referred to a number

of authorities which are on our list of

authorities, which in various ways express, in

effect, the standard that is required to be met

before a disqualification occurs.

In the JRL case, 161 CLR 342, which is No 7 on

our list of authorities, and at page 352 it was
emphasized that the need for bias must be firmly

established. In Watson's case, which is No 4 - I

do not need to take Your Honours to it at this

stage, but in Watson's case, 136 CLR 248, it was

emphasized that there should be shown to be a real

likelihood of bias. And the third case which I did

want to briefly take the Court to, the Australian

Stevedoring Industry Board case, 88 CLR 100, No 1

on our list of authorities, the Court was dealing

with an industrial tribunal, and it is in that area

that we particularly.wanted to emphasize the courts

have departed from looking at the niceties and have

been required to be satisfied, very clearly, that

the apprehension of bias is real, and that there

are strong grounds for disqualification.

The Australian Stevedoring Industry Board case

of robustness in this jurisdiction and do not apply	is a good example of how the courts accept a degree
the standards one may otherwise expect in the courts of law in industrial relations tribunals.
That has been the case in England, in Canada and,
we would submit, in Australia.

May I just briefly refer to the background

facts. In that particular case, as is set out in

the second-last paragraph of the headnote, prior to
an inquiry by the board in that particular case, a

delegate had had a conversation with a newspaper

reporter and had indicated that he did not expect

the employers:

Hoyts 3 12/4/91

"to be able to hold the men on the job but we do expect them to exercise proper supervision to find out whether men on their payroll are

missing. If they can wander away without the

Company's knowledge it suggests lax

supervision and that's why are are holding the
inquiry".

And the inquiry was whether the employer should cease to be registered because of the manner in

which it had been conducting its business. At

page 116, in the joint judgment of the

Chief Justice Sir Owen Dixon and Justices Williams,

Webb and Fullager, Their Honours said, in the

middle of the page:

It is not difficult to understand that the

employer whose case he must judge should feel

alarmed at a statement appearing in the press

from which it might well be inferred that upon

some of the contentions he wished to advance

his case had been prejudged. But when bias of

this kind is in question, as distinguished

from a bias through interest, before it

amounts to a disqualification.it is necessary

that there should be strong grounds for

supposing that the judicial or quasi-judicial

officer has so acted that he cannot be

expected fairly to discharge his duties. Bias

must be "real". The officer must so have

conducted himself that a high probability

arises of a bias inconsistent with the fair

performance of his duties, with the result

that a substantial distrust of the result must

exist in the minds of reasonable persons. It

has been said that "preconceived opinions -

though it is unfortunate that a judge should

have any - do not constitute such a bias, nor

even the expression of such opinions, for it

does not follow that the evidence will be

disregarded" .

Now, of course, those comments were made in a

general sense and were not intended to be

restricted to industrial tribunals. What we wanted

to indicate is that, first of all, viewing it in a

general sense, there are substantial factors that

will give rise to injustice, in effect, on the

other side of any other bias scale in the present

case.

BRENNAN J:  What were the powers that could be exercised on

the conduct of an inquiry such as was considered in

the Australian Stevedoring Board case?

MR MERKEL:  I think, in effect, deregistering.the employer,

Your Honour. If the employer was unfit to continue

Hoyts 4 12/4/91

to be registered the board may cancel the

registration of the employer.

Just by background to the present case, if the

Deputy President's disqualification of himself

stands under section 34 of the Act, there is no

discretion to, in effect, reconstitute the bench

and start again. What occurs is that a member,

upon becoming unavailable, shall be replaced by the

President and, under section 34(4):

the Commission, as reconstituted, shall have

regard to the evidence given, the arguments

adduced and any award ..... made in relation to

the matter before the Commission.

So, that the situation that we would be confronted

with, in the present case, is not an opportunity to

have, in effect, the matter commence again but to
have a member who has no familiarity with the case;

has not seen any of the evidence; has not

participated in the discussions by the Commission

amongst themselves in the course of the evidence,

in effect, commenced the hearing of the matter

after the close of the applicant's case.

The background is that the hearing commenced

on 23 November 1989. There had been some 2500

pages of transcript, some 27 hearing days,

96 exhibits and inspections both in the United

States and in Australia of various cinema sites and

multiplexes which are the subject, in effect, of

the application.

The applicant's case had closed and the unions

had commenced their case. The particular situation

in this Commission is, of course, a highly

sensitive one and we would say, particularly, in

the Commission, applications for disqualification

for bias or apprehended bias should be treated with

a great deal of caution and, indeed, we have in

mind the warning by the Chief Justice, as he then

was Mr Justice Mason, in the JRL case, 161 CLR 342

and, in particular, at page 352 where His Honour

warned against the problem of judges too readily

acceding to applications for disqualification on

the grounds of bias, and His Honour had indicated

that as a result of the decisions of this Court in

Watson and Livesey, there had been:

an increase in the frequency of applications

for disqualification.	This is in the first
paragraph at page 352.	And His Honour said:

It needs to be said loudly and clearly that

the ground of disqualification is a reasonable

Hoyts 5 12/4/91

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. There may be

many situations in which previous decisions of

a judicial officer on issues of fact and law

may generate an expectation that he is likely

to decide issues in a particular case

adversely to one of the parties. But this

does not mean either that he will approach the

issues in that case otherwise than with an
impartial and unprejudiced mind in the sense
in which that expression is used in the

authorities or that his previous decisions

provide an acceptable basis for inferring that

there is a reasonable apprehension that he

will approach the issues in this way. In
cases of this kind, disqualification is only

made out by showing that there is a reasonable

apprehension of bias by reason of prejudgment

and this must be "firmly established".

Then His Honour added:

Although it is important that justice must be

seen to be done, it is equally important that

judicial officers discharge their duty to sit

and do not, by acceding too readily to

suggestions of appearance of bias, encourage

parties to believe that by seeking the

disqualification of a judge, they will have

their case tried by someone thought to be more

likely to decide the case in their favour.

There could be few more contentious

jurisdictions in this country than the Industrial

Relations Commission jurisdiction and the potential for misuse of this power, or excessive use of this

power to - not "power", the right to seek

disqualification of a bias, is one that, we would

submit, requires great caution with dealing with a

bias allegation in that particular jurisdiction,

and that is why, at the outset - - -

McHUGH J:  Mr Merkel, my recollection is that there is a

distinction between the test for bias in the case of a judicial officer and those sitting on a club

or tribunal or something. Am I right in that, and

if so, what is the relevant test in this particular

jurisdiction?

MR MERKEL:	Your Honour, I am not sure that the cases suggest that the test would be framed differently.
It is seen that the courts take a far less rigid or
more flexible view, for example, in the industrial
relations jurisdiction, than they would with

Hoyts 6 12/4/91

respect to a court by reason of the requirement

under the Act that persons with experience in the

area be appointed to members of the tribunal and

that such persons will, in the normal course,

particularly in relation to this Commission, have

evolved from the past history of employer

organization involvement and representation or

union involvement and representation, and in those

circumstances the courts have said the fair-minded observer will accept a degree of prejudgment, even

in respect of issues that arise in the case, that

one may find may not be accepted in a court, but it

does not seem that the test is formulated in a

different way.

McHUGH J:  I just had a recollection that in a case decided

in the New South Wales Court of Appeal, before I

was a member of it, I think the name of it was

Maloney v National Coursing Association. The court

suggested that there was a different test, but my

recollection may be wrong.	I will see if it can be
found.

MR MERKEL:	I would be reluctant to embrace it in the present case because when one looks at Livesey, one
goes back to Angliss, to the Stevedoring Industry
case, which seemed to found the basis for the
present test, but Your Honour may be right in respect of domestic tribunals.

McHUGH J: But that raises the question as to whether or not

the Arbitration Commission would be covered by the
sort of rule that you have got in JRL, or whether

there is perhaps a higher standard required before

it.

MR MERKEL:  It may be, Your Honour. embrace it because the courts do not suggest that I express reluctance to

that is the result, but we were troubled by the

fact, it seems to be accepted and I think it was

discussed ain Sankey v Whitlam in the Court

of Appeal in New South Wales, that the niceties

that one may bring to bear on a decision not to sit
at the commencement of a case are not quite the
same as the realities you bring to bear in deciding
to disqualify yourself halfway through a case, but

bias is bias and, if the apprehension is there, it

seems that it is not easy to accept a different

test, depending on the stage at which the decision

is made, but what we do say is that the injustice

on the other side of the scale may give rise to

special circumstances which, in Livesey, was

accepted but never defined as possibly permitting a
biased tribunal to proceed, or the exception for

necessity, but this is not a necessity case. But

we would prefer, in the present case, to not have

to go so far as to say we need a new test. We feel

Hoyts 12/4/91

very comfortable with any of the present tests, but

that is why we emphasize that it is not the

possibility of bias, you must examine the facts in

all the circumstances and ask, has the real

likelihood of bias been shown.

I think in the industrial relations

jurisdiction, the courts in this country and there

are some very helpful Canadian decisions, seem to

have taken a more robust approach and have

permitted - in fact have held to be untenable,

allegations against a member sitting in respect of

the very matter on which he had expressed

prejudgment on prior to sitting because the very

nature of this jurisdiction would have the fair-

minded observer accept that whilst that may be the

case it does not follow that he will not be able to
bring an impartial mind to deal with the evidence

before him or -

McHUGH J:  The same sort of thing was said in Angliss, was

it not?

MR MERKEL:  Yes, Your Honour, very much, that same sort of

approach and what I was going to do is that,

leading in from the Stevedoring Industry Board

case, we really raise those sorts of issues, in

paragraph 3 of our outline. It really does stern

initially from sections 10 and 20, but more

section 10 of the Industrial Relations Act.

Section 10 requires that persons appointed to

the Commission have had experience, if I may use it

that way, "in the field".	The President must have
had experience:

because of the skills and experience in the

field of industrial relations -

and a Deputy-President, if, and under

section 10(2)(b):	the person has had experience at a high level	in industry or commerce or in the service of:
(i)  a peak council ..... of employers or employees; or
(ii) a government or an authority of a

government.

So that by definition such persons will not only have had considerable experience, they will

also have had previous association with parties in

industrial conflict ..... having regard to the

structure of industrial relations in this country,

peak organizations as such representing a large

Hoyts 12/4/91

number of unions, they will in many cases be

expected to determine matters that will involve

organizations that they had represented or acted
for before the Commission, and maybe in respect of
very much the same issues that they will be

required to determine. But a history of such

associations or previous expression of such

opinions which relate to the matters in issue has

not been held in the past to be a disqualifying

feature.

There is a very helpful discussion of those

matters in the Industrial Commission of South
Australia case - that is No 2 on our list of

authorities - Reg v The Industrial Commission of

South Australia; ex parte Adelaide Milk Supply

Co-operative Limited, (1978) 18 SASR 65. In that

case it is a decision of the Full Court in South

Australia. If I can just read the headnote where

the facts are summarized:

An application was made to the Industrial

Commission of South Australia for variation of an award by making provision for the effect of

redundancy on employees covered by the award.

The application came on for hearing before a

Commissioner who had previously been a member

of an Australian Labor Party Committee which

had submitted a report upon several matters

including the dismissal of employees for

redundancy. Employers opposing the

application for variation of the award

submitted that the Commissioner should

disqualify himself from hearing the

application for.bias, and, upon his refusing

to do so, applied to the Supreme Court for - a writ of prohibition. The background to that

report is set out at the bottom of page 66 in

Chief Justice Bray's judgment where His Honour

accepted,and this is four lines from the top of the

second-last paragraph -

there was a remarkable similarity between the

recommendations of the report on the question

of redundancy and the claim for variation of
the award to cover dismissals for redundancy.

Mr Gray pointed out that the two were not

completely identical.

However, His Honour dealt with the case as if the contentions were correct, and he thought to a large

extent they are.

Now, at pages 70 to 71 the writ was refused for three reasons. The first is at page 70 about a

Hoyts 9 12/4/91

third of the way down the page. His Honour

commented that -

it is inevitable that many questions should

come before a tribunal to which the person

constituting the tribunal has given previous

consideration and has, perhaps, come to some

tentative view.

Then over the page the second reason at page 71

related from the kind of statutory provision that

we have in the Industrial Relations Act such as

section 10. In the middle of the page His Honour

said:

It will be seen then, that Parliament has

contemplated that a commissioner should be a

person with considerable experience of

industrial affairs and a previous association

with one side or the other in the industrial

conflict. It can hardly have been unaware of

the possibility, indeed the probability, that

such persons would come to the Commission with

opinions, and it may be strong opinions, on

many industrial questions and with a history

of previous expression of those opinions.

These things cannot be automatically

disqualifying.

Then His Honour went on to discuss the redundancy

aspect which was peculiar to that particular case.

The Canadian jurisdiction has experienced this

kind of problem and has shown how far one must go

before getting disqualification, and there are

three decisions which are not on our list of

authorities. If I can just briefly take the Court

to those. We have had photocopies made of them.

BRENNAN J:  Mr Merkel, before you go to the Canadian cases could I take you back to this South Australian

case? One can readily appreciate that where the

ground on which supposed bias rests is prejudgment,

then one looks to see the kind of situation in

which the prejudgment may have taken place, one can

understand how the application would have been made

in the Industrial Commission case in South

Australia, but the court took the view obviously

that the robust approach was the appropriate

response.

But where the problem is not one of

prejudgment simpliciter, but one of advice to one

of the parties in the following of the conduct

which is relevant to be assessed, is it the same

case?

Hoyts 10 12/4/91

MR MERKEL:  No, Your Honour, it is not the same case, but a

very similar approach applies, and if I can explain

briefly why. There are two common category of

cases. One is where there is prejudgment - in one

of two senses - of the issue, but not necessarily

in respect of a party before the Commission; the

other which appears in the Canadian cases is

prejudgment of the issue, even in respect of the

very matter before the Commission, and indeed the

Australian Stevedoring case is an example of that.

The second category of cases is where

disqualification has been sought by reason of a

prior association with one of the parties, and
particularly in respect of matters of the same kind

as that person is now required to adjudicate upon,
and the cases there say that association as counsel

or as a solicitor acting for the party before the Commission, or indeed some cases before the Court

it may be, but I am trying to confine myself more

to the industrial jurisdiction, association in

respect of cases of the same kind does not result

in an apprehension of bias. Therefore one gets to

what the third category would be where you, in

effect, have association with the client in respect

of a matter that could be in issue. It, in effect,

combines the first two, and it seems that there is

no different test applied, but what we would say is

that Livesey, particularly in the industrial

relations jurisdiction, would suggest there must

have been advice which would amount to a

predetermination or an involvement on the merits in respect of a matter that we would say is a live and

significant issue in the case.

So that there we move to the realities, not

the niceties, and whether it is a robust approach
for prejudgment, a robust approach to prior

association, or a robust approach to involvement in

some shape or form in the matter, we say, the

result should be no different. For example, we

would have little difficulty in accepting that even

in the Industrial Relations Commission, if a

Commissioner had or a Deputy President, advised on

the merits of the matter he was required to

determine, that would probably be appropriate for

disqualification.

McHUGH J; I understand that, but take the case - supposing

counsel had appeared either for the employers or
the union in a national wage case, and he was

appointed to the bench and sat on the next national

wage case; now, there is always a flow-on from one

hearing to the next; they are not separate

entities, in effect.	Now what about the judge in
that situation?

Hoyts 11 12/4/91

MR MERKEL:  That would probably be the very kind of case

where it would be very rare for disqualification to

occur because counsel appearing for peak

organizations, representing, as they do, maybe

numerous unions, would be very likely to have to

participate as a Deputy President, or a

Commissioner, on the very application of the

principles which flow down to the whole of the

Industrial Relations Commission, and whether it is

in respect of one of the parties would really be

moot and the cases, we would submit, show that the

reasonable observer would not conclude that that

prior association was such as to make it probable,

or establish a real likelihood, that that person

would not bring an impartial and unprejudiced mind

to the matter before him or her in the Commission.

It is those sorts of circumstances that really set that jurisdiction apart, and it is probably

helpfully discussed in the Canadian cases which, I
think, come very close to the kind of question

Your Honour was asking me about, although not

really so close that you have solicitor or counsel

acting in the same matter, but if the Deputy

President had advised on the merits of the

application he is now about to adjudicate upon, we

would see that as a case that would give rise to a

probability that he should disqualify himself.

When we come to detail the facts we will seek to

persuade the Court that really there are two

separate matters, and not even at the fringes is

there an overlap, but if there was an overlap in

some historical sense, then we say that Livesey,

particularly for this jurisdiction, says that the

overlap must be in respect of a live and

significant issue, and there is none in the present

case.

BRENNAN J: That may be the answer to my problem because, at

the moment, I have no difficulty with the counsel/

solicitor advocate problem because that is simply

performing two different functions, one as counsel,

one as judge in due course, and those are

notoriously different functions to perform. But

when it is a question of advising on following a

course of action and the course of action is

followed and it is then necessary to evaluate the

court of action, it seems to me that it is a

different problem.

MR MERKEL:	Yes. Again, I will come to this when I get into the particular facts, but the Deputy President's
advice was in respect of tactics rather than the
merits. The advice was, in fact, not acted upon
and the dispute that arose, quite independently of his advice, was settled and then when a new dispute arose in 1988 it was not based upon any facts that

Hoyts 12 12/4/91

existed in 1986. It was a totally new matter and

on no view of his advice could he be said to have

advised upon the issues that arose some two years

later in a quite different environment. But I will

take Your Honours to that when I come to that.

BRENNAN J:  I do not want to take you out of your order,

Mr Merkel.

MR MERKEL:  But I think what I wanted to emphasize is the

way in which the courts have given some helpful

guidance in this particular area and the Canadian

cases which I was about to take the Court to do

show how far they go and, in fact, draw the kind of

line that Mr Justice McHugh raised with me earlier

about the approach to an industrial tribunal as

against a court.

There are three decision that we wanted to -

the first decision is that in the Privy Council of

the Labour Relations Board of Saskatchewan v John

East Iron Works Ltd, (1949) AC 134. This concerned

the Labour Relations Board, a board not dissimilar to the Industrial Relations Board and the question

arose, in part, and it was a constitutional

question as to whether it was a court and

Lord Simonds, delivering the judgment of the Privy

Council at page 151 did discuss, particularly in

this area, the kind of different consideration that

would apply to a court as opposed to such a
tribunal and can I just take the Court to page 151

where His Lordship said, about eight or 10 lines

from the top of the page:

For wide experience has shown that, though an

independent president of the tribunal may in

certain cases be advisable, it is essential

that its other members should bring an

experience and knowledge acquired

extra-judicially to the solution of the

problems.	The members of the board are to be
equally representative of organized employees

and employers and in a certain event of the

general public. That does mean that bias or

interest will lead them to act otherwise than

judicially, so far as that work connotes a

standard of conduct, but it assuredly means

that the subject-matter is such as profoundly

to distinguish such a tribunal from the courts

mentioned ins. 96.

Section 96 are the courts exercising the judicial

power as we would know it in this country.	Of
course, that raises the question, I think
Your Honour Mr Justice McHugh raised with me
earlier, but we say that does not result in a

different test, it just results in a different

Hoyts 13 12/4/91

approach as to how one may view the fair-minded

observer approaching this problem.

The next case is a decision of the Nova Scotia

Supreme Court in the Appeal Division, Tomko v Nova
Scotia Labour Relations Board, (1975) 9 NSR

(2d) 277, and it related to, what I would say, was

the third category I had raised with Your Honour

Mr Justice Brennan, namely where a member of the

tribunal has had direct involvement in the matter

to be determined by the tribunal. True, it is not

as counsel or solicitor, but it was as President of

the particular trades council. Can I take the

Court to page 297 - unfortunately, it has got the

page photocopied - the number is not on it.	I
think it goes from 296 - - -

BRENNAN J: It is written on, I think, Mr Merkel.

MR MERKEL:  Thank you. I did not realize it had been

written on. It is really page 297 through to 299.

The facts of that case were at paragraph 50.

MacNeil, who was a member of the board:

MacNeil's bias was allegedly shown by his

active participation in meetings respecting

the subject matter of the complaint, and, in

particular, a meeting of Thursday, May 2, 1974, between the employer and the Trades

Council, five days before the cease and desist order was issued.

He was a member of the Board that issued the cease

and desist order requiring the union to cease its

strike.

Minutes of that meeting were attached to the

plaintiff's affidavit. They showed that

present were representatives of the employer,
the plaintiff Tomko, representatives of five

other unions, MacNeil as president of the

Council -

that is the trades council -

and Mr. Daniel MacDonald, general

representative for all unions of the site.

And can I go to paragraph 52:

The minutes, showing as their purpose "to discuss illegal walkout".

And then Their Honours set out the extracts from

which bias is said to be shown by MacNeil.	Can I
go to the second paragraph:

Hoyts 14 12/4/91

Mr MacNeil admitted that the Labourers should have followed procedure but they chose not to

and that was why we are here.

At the bottom of the page, Mr MacDonald, who was

another member of the tribunal, stated:

it was an irresponsible thing to do after

agreeing to go to arbitration -

that is not pulling the strike, and then at the

next paragraph, after some strong words by Mr Tomko

at the top of the page, not unfamiliar in this

jurisdiction:

Mr MacNeil stated he would like to see the job back again and that he was against the method

used by the Labourers for not going through

the proper grievance procedure.

then there was some references to de Smith, and

then there was a reference to Lord Simmonds in

John East in paragraph 54, and then at paragraph 55

Their Honours said:

the many unions and many subcontractors and

suppliers involved in any single construction

project make it inevitable that union

representatives on the Panel and most employer

representatives would each have at least an

indirect interest, much knowledge and many

preconceptions and prejudgments respecting any

matter coming before the Panel. Thus mere

knowledge of the particular case or
preconceptions or even prejudgments cannot be

held per se to disqualify a Panel member.

Can I just comment there, that is not dissimilar to

the Australian Stevedoring Industry case I took the

Court to at the outset.

GAUDRON J:  Was the panel here a public instrumentality of

government?

MR MERKEL:  In this case it was, Your Honour.

GAUDRON J: Or was it a - - -

MR MERKEL:  It was a public instrumentality in the sense

that it was a board exercising jurisdiction which

had the power to make cease and desist orders, and

there was penalty to attach if those orders were

not adhered to. So it was not in any sense a

domestic tribunal. It had the power to act under

the statute and make orders under the statute.

Hoyts 15 12/4/91

GAUDRON J: It sounds very much like a creature sometimes

known in industrial relations in this country like

a local industry board which I would have thought

might well attract different considerations from a

full bench of a public instrumentality of

government.

McHUGH J:	Or the conciliation committees in New South Wales where you have a commissioner and you have
employers and trade union representatives.

MR MERKEL:  I think it went higher, Your Honours. It was a

government board. It actually had powers to make

orders, so this went far further than just

conciliation and those orders had the force of law

and there were penalties to attach.	I have not
tried to master the - - -

McHUGH J:  The conciliation committees in New South Wales

make awards. Usually the reality is there is a

commissioner who makes the award notwithstanding

the fact that there are employers and trade union

representatives on the committee, because they

invariably disagree.

MR MERKEL:	My understanding of the case is this board had power which we would say is very analogous to the
Industrial Relations Commission. Indeed, there is
a certain irony that the very debate in this case
was whether it was exercising judicial power under
the British North American Act, 1867, very much
like some of the constitutional questions we have
had in this country in respect of very much the
same kind of powers.  So I do not think it comes
within the category of the kind of boards that have
conciliatory functions rather than - we would say
it comes very much within the category of the
Commission and the cease and desist orders were
ones that attracted penalties when not obeyed. But
I will seek to find passages that set out its
jurisdiction and I will give you the page
references.  I will come back to that if I may.
BRENNAN J:	Mr Merkel, however constituted was the meeting

to which reference is made at the bottom of 297, a

function being performed by the panel which was

then called upon to exercise powers to which

reference is made at 297?

MR MERKEL:  No, Your Honour. As I understand the case, my

understanding is that they acted in their private

capacities which then later in a difference sense

made them members of the board. They were acting

in different capacities when acting as a board.

They were acting in a quite separate capacity when

acting at the meeting.	They were not acting as a
board conciliating at that meeting.	Mr McNeil was

Hoyts 16 12/4/91

at the meeting as President of the Trades Council.

McDonald is a general representative of unions.

The board in that case had to have equal numbers of

employer and employee representatives, but did not

have to have, I do not think, those persons, but

they were not acting as members of the board at the

meeting. So that they had a direct involvement in

the matters that they were required to determine,

and it really comes to applying that robust

approach to - - -

GAUDRON J:  But the circumstances, the composition is

different in a board of that nature from the
composition of a tribunal like the Full Bench of
the Industrial Relations Commission which consists
of full-time members, appointed, who take an oath

of office, including to act without fear or favour,

as I remember.

Your Honour, I will have a closer look at this

board. It is a case we only came across by

reference to another Canadian decision and I have

only looked at it more closely this morning.	I
will try and have a closer look at it over the

adjournment, but I must say my quick reading seemed

to put it in a category very similar to the

Commission, save that it seemed to require employer and employee representatives and that certainly is

different to our Commission, but the point was not

employer and employee representatives from the

unions concerned, it was from the industry. They

were selected by reason of their background in the

industry and really, therefore, looking at it by

reference to the kind of preconceptions,

prejudgments that such people will inevitably have,

it does not authorize, if I may put it that way,

prejudgment in respect of a matter that they are

dealing with any more than it would under our Act,

and we, I must say, had seen - and particularly the

reliance of John East, which dealt with the general

point, that the distinction between a court and

such tribunals is quite profound, that really,

using a neutral term, the more robust approach is

applied to them and that is what happened here.

I should say that one of the reasons I am

taking you to this decision is that it went on
appeal to the supreme court and the allegation of

bias was found to be unsustainable, so that we

would say it shows how far one goes in this

jurisdiction, because of the necessity and the

reason for appointment of such persons, who will
have had very strong views, and they will have been

publicly expressed.

McHUGH J: Well, perhaps there is a difference between the

Commission when it is exercising functions akin to

Hoyts 17 12/4/91

the judicial function and those when it is
exercising its arbitral function. In the
Stevedoring Industry case, that was a case of

deregistration, so you were taking away somebody's right. Here we are concerned with making an award

to govern peoples relationships for the future. I

know in Angliss it was assumed that these bias

rules applied, but what is the theory on which the

bias rules apply to what is, in effect, a

legislative-type function?

MR MERKEL:  I have not discerned in the cases, Your Honour,

a difference of approach in the sense Your Honour

has raised.

McHUGH J:  Has anybody every been held to have been

disqualified for bias in a truly arbitral case, in

terms of making an award?

MR MERKEL:  I am sure some of the cases I will take you to will show that they have. Your Honour, indeed an

Energy Board case which I will take you to from

Canada again showed a not dissimilar function about
pipeline decisions, not industrial, but

nevertheless of the kind of decisions we are

talking about.

McHUGH J:	But are you interfering with the existing rights in any way at all?
MR MERKEL:	Your Honour, I am not sure that an award quite

lacks that kind of interference. For example, in the present case it could be made retrospectively

to an earlier date and therefore bring into account

obligations that will apply to the past, rather

than just to the future. It arises in the very

present case, because there were some subsidiaries

of Hoyts that actually employed employees and it

may be open to the Commission to make an award and

make it retrospective, so that the obligations go

back rather than just forward.	I myself do not
jump too readily to seek to distinguish the natural

justice principle one would apply to an arbitral

function or that which one would apply to something

that is more judicial, although they are not

exercising judicial power.

McHUGH J: There is no doubt the cases hold that an

arbitrator has got to apply the rules of natural
justice but we are dealing with this area of bias

or reasonable apprehension of bias.

MR MERKEL:  We have preferred to come at it, Your Honour, on

the basis we have, namely that the courts require
far more, not because of a different principle, but
because the fair-minded observer would take for

granted the kind of situations that we are looking

Hoyts 18 12/4/91

at, rather than, in the same situation before a

court, where that background is by no means to be
assumed and therefore you may find, not a different

test, but a lower threshold before one gets to an apprehension of bias. But the niceties of courts do not match the realities of the industrial

relations jurisdiction.

GAUDRON J: 

In this case one has got to deal with parties,

albeit representative parties, who represent people
who, at least in times of industrial conflict,

frequently let their passions run high and it may not always be appropriate to translate the notion of fair-minded observer into an industrial

relations context. The very nature of the
jurisdiction is one in which passions run high.

MR MERKEL: 

Your Honour - - -

GAUDRON J: 

The very nature of the jurisdiction is one in

which passions run high.

MR MERKEL:  Yes, I think, Your Honour, our response to that

would be that that would be all the more reason why

the courts would seek to maintain the objective

standards and apply them because they are the very

circumstance that Mr Justice Mason warned against

in JRL with have a very fertile breeding ground,

namely, applications of that kind would be prolific

and it would be very difficult for members not to

accede to them if they were to have regard to the

emotion before them.

GAUDRON J: Perhaps it indicates though that there are a

range of considerations to be taken into account in

determining whether there could be an apprehension

of bias in circumstances that are somewhat

different from those that might be taken into

account in a purely judicial process.

MR MERKEL:  Yes. Your Honour, of course I cannot deny that.

It is just that the courts do not seem to have

accepted that thus far anyway as a factor that

should militate other than in favour of the

argument we are putting, caution and objectivity,

rather than, in effect, lowering the standard to

meet what may be an emotion at the time but will

cause a far greater harm to the system if acceded

to too readily, because of course so many of the

members are drawn from peak employer or employee

organizations and there is so much scope for this

problem.

GAUDRON J: This is not a question so much of the identity

or background, it is a question of an issue about

which, as I said, passions sometimes run high.

Hoyts 19 12/4/91

MR MERKEL:  I certainly have no quarrel with the passions

sometimes running high, indeed, one can see it in

the very case I am taking you to, the very notion

of strikes will do that.

GAUDRON J:  And it is an issue to the extent that - we will

come to the issue later, but it is not quite the same sort of thing, is it, as what should be the

wage rate?

MR MERKEL:  Your Honour, I am not sure that what should be

the wage rate has not generated maybe in a

microcosm rather than in a macroeconomics sphere,

the very kind of passions that Your Honour has

mentioned.

GAUDRON J: But we are talking about the nature of the

regulation that should be effected in the

employer/employee relationship.

MR MERKEL:  Yes, I would be prepared to assume that, in many

instances, that will be very emotional but we would

find it very difficult to see why that emotional

factor should generate one standard for what I

might call emotional cases and a different standard

where the issue may not be any different, but there

is no emotion. We would say the same principle

would have to apply and we would say that there

would be probably very high public policy reasons
why that should be so.

But having said that, circumstances are as wide-ranging and variable as one can imagine and we

are not suggesting, for one minute, one divorces

the decision from the particular facts and a

situation we have some trouble with, which is not

same principle should apply but one could understand he may more readily accede to the

this case, had such an application been made to the

application than we say he should have in this

case. But I am troubled by that because if I say

the same principle applies you should get the same

result but the court seemed to have accepted that

niceties are maybe more appropriate at that stage
than later, particularly having regard to what the

present Chief Justice said in JRL and the prone for

misuse of this application to disqualify,

particularly in the industrial arena, it seems that

the kind of questions raised in that arena for

disqualification need to be dealt with very clearly

and we say the principles are the same but have a

certain robustness about that jurisdiction.

BRENNAN J:  When you say robust, is it saying any more than

this: that if one applies the overall principle to

a variety of tribunals one looks at the statutory

Hoyts 20 12/4/91

provisions dealing with the constitution and function of the tribunals and allows for the necessary incursions that any of those provisions

might make on the standard that would otherwise be

applicable.

MR MERKEL:  Yes, Your Honour.

BRENNAN J: In other words, it is a necessity case.

MR MERKEL:  Yes, Your Honour.

BRENNAN J: In other words, it is a necessity case.

MR MERKEL:  I would agree with everything but, with respect,

the very last conclusion. The necessity case,

Your Honour, seems, as I understand the principle,

but it may be Your Honour has used it in a

different way, necessity is one ground for

permitting a biased member to continue.

BRENNAN J: Yes, you are quite right. It is not the same

principle. What I had in mind was that if you

provide that you shall draw your membership of this

tribunal from patently biased sources, then you

have got to take the bias that you have got and

that is all there is to it.

MR MERKEL:  Yes. I would say patently ideological sources

but they are different words for the same point,

Your Honour.

BRENNAN J:  I have to take it further to cope with the Privy

Council decision where you say that you may utilize your extrajudicial or extra tribunal knowledge for

the purpose of reaching decisions and that may be,

in other senses, a source of bias.

MR MERKEL:  Yes, Your Honour, and I certainly have no

quarrel with that proposition. We go to these

cases to show instances of really what we would say

is an application of that kind of principle.

BRENNAN J: Yes. Well, if we come back to this case we will

still have that fundamental question that you are

going to address about the nature of the issues in

this case.

MR MERKEL:  Certainly. I do not want the Court to think

that I am seeking to set some threshold that is

very high. In fact, we say, when we come the

facts, that these questions may be said to be

interesting but one does not have to go beyond the
usual application of them and, indeed, when we come

to the facts of the present case we say that had

this been an application made to a judge in the

same circumstances it should not have been acceded

Hoyts 21 12/4/91

to. But in the event the Court takes a different

view of the facts, I really want to go to these

cases to indicate why there is, in effect, a higher

practical threshold, and that has been found to

exist in the courts.

McHUGH J: But might it not be better if we are taken to the

issues and the facts first rather than we come to the question of the principles At the moment I am vaguer, concerning the facts of the case, than I

would like to be. I have got a general idea of it

from reading the books.

MR MERKEL:  Yes, Your Honour. I have no difficulty with

that. Indeed, I think I was almost about to go

there, Your Honour. Possibly, if I can just finish

with this case and then I am happy to just refer

briefly to the other two cases which are really at

the end of paragraph 3 and then I was going to go

to the facts, Your Honour.

McHUGH J:  My concern at the moment is whether the documents

really put us in the full picture so far as the
overall case is concerned; what the issues are and

what case the union was going to run.

MR MERKEL:  Your Honour, I was about to do that as soon as I

had finished, in effect, this excursion which has

taken a little longer than I had expected but that

is my fault because I have tried to emphasize how

far the courts have gone in this particular area,

both in Australia, in Canada and, it seems,

accepted as a correct approach in the Privy

Council.

I was just going to, lastly, refer to

paragraph 58 where Their Honours concluded - this

is at page 299, after referring to actual bias,

Their Honours concluded they:

cannot find on the evidence that MacNeil had

bias that should disqualify him as a a member	the kind of interest or displayed the kind of
of the Panel. He obviously knew all about the
walkout and its causes, thought it was an
illegal work stoppage, knew that the plaintiff
was involved in it and had "condoned" it, and
was fully aware of the plaintiff's commanding
position in the Labourers' Union. I cannot
see, however, that such knowledge and opinions
show likelihood of bias, likelihood that MacNeil would be unable to execise his duties
impartially as a member of the Board.

The word "unable" I would not accept as the correct

test but be that as it may, that matter did go on

appeal to the Supreme Court of Canada and we have

Hoyts 22 12/4/91

just picked out the relevant extract. That is

reported in (1976) 14 NSR (2d) 191, and at page 204

it was clear that the Supreme Court - and this was

unanimous of all members of the court, presided

over by Chief Justice Laskin. The last three lines

of paragraph 20 shows how that court saw it:

There was also an allegation of bias against a

member of the Panel but this Court did not
require the respondents to meet it, holding

the allegation to be without substance.

There are three other decisions we have

briefly referred to at the end of paragraph 3.	In
the light of what Your Honour Mr Justice McHugh

said I will not go to those decisions at this

stage, but can I just indicate that those decisions

are cases where a particular solicitor or counsel

had acted in respect of a similar matter for the

same client, and it was held that having acted for

the same client in respect of the same kind of

issue, did not and could not bring about a basis

for disqualification.

With those introductory words,. I would seek to

go to the facts, but can I just remind the Court

what was again said in Livesey, and we set it out

in paragraph 4 of our submission, namely, that this

Court is removed from the problems before the

Commission, has the advantage of hindsight and the

material to which we will now go.

The point we want to make is that the inquiry

is an objective one. That has been accepted for a

long time, and that the Deputy President is not to

have his reasons given any special weight to.	So
that when we go to these facts, we say, which
define the issues and define the nature of the
advice given in 1986, this Court is in as good a

position as the Full Bench, and in particular the

Deputy President, to review those facts and decide

whether the apprehension of bias of the requisite

standard is made out in the present case.

BRENNAN J: Mr Merkel, we will adjourn now, but before we do

could I just ask you this question: there are several affidavits which have been filed. The

affidavits which have been filed in conformity with

the order nisi, that is, within the time limited by

the ordar nisi, by your side of the record are, of

course, available. What do you say about the other

affidavits, that is, those by the party respondent

and those which have been filed outside the

21 days?

MR MERKEL:  We certainly would not wish to exclude the material of the respondent, particularly in their

Hoyts 23 12/4/91

absence. We have filed a further affidavit which I

will get instructions on, but I believe was served
on the respondent. I should say that that affidavit
is not critical to the application but it does, in
effect, explain other matters, but they not having

been challenged, it really is explanatory rather

than raising a new issue, and if there was a

hesitation about whether that should be relied upon

we would not try and - - -

BRENNAN J:	You would do it from the bar table?
MR MERKEL:	The material is there, Your Honour, but we filed

it at a time we expected opposition, and it may be

that if there is a reluctance to have us rely on it

it certainly will not impede our argument.	It is
just a matter that really explains by way of

background what I would call as reasons why it is

unjust for a new member to be brought into this

hearing at this stage. But that may be an obvious

proposition that does not really need further

explanation or expansion on.

AT 12.48 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.17 PM:

BRENNAN J: Yes, Mr Merkel.

MR MERKEL:  If the Court pleases, just before going to the

facts, I did have another look at the Tomko case

over the adjournment and what I did say to the

Court before the adjournment was right, it did

exercise a jurisdiction in which it made orders

which were injunctive, in effect, although they

were penalties if they were breached and the	could not be enforced as injunctions, but there	penalties would run, I think, at $1000 a day for
the period of a breach for individuals and $10,000
a day for the organization, so that it was as I
indicated.

If I could now move to the facts and if I

could do so by reference to the document I handed

up at the outset, the chronology, which is a

helpful way of trying to sort out the relevant

facts. We have set it out starting in 1981. One

thing that does not appear there is that the

relevant award, if I can refer to it as the

ATAEA Award, was made in 1981. That. is not in the

chronology. There was an over-award agreement

Hoyts 24 12/4/91

which has been referred to in the material as the

Canberra Agreement between the Union, the Hoyts

Greater Union and Village Theatres. That was made

in 1981. It was renewed in 1983 and if I can now

come to the 1986 period, which was relevant to the

issues in the present case. In 1986 Hoyts and the

Union started their negotiations for the staffing

at the proposed Chadstone Multiplex Complex. That

was going to be a new type of cinema complex which,

in effect, had a projection room which projected to

a number of cinemas from the one spot, as opposed

to having different projection rooms for various

cinemas, and this was a new innovation and the

staffing problem was a point of some contention.

They, in July, before any disputation had

occurred and prior to the cinema opening, attended

a meeting at Freehill Hollingdale & Page concerning that Multiplex - that was attended by Mr Hodges who was representing Hoyts; Mr Polites, a partner of

Freehills and Mr Smith, a solicitor at Freehills.

There was a letter from Hoyts which sought advice -

that is at appeal book page 98, and then there was

a draft letter of advice prepared by Mr Smith, and

that was then, in effect, signed and adopted by

Mr Polites, who was then a member of the firm.	And
that appears at appeal book, pages 94 to 96.	I

will come to that advice shortly, if I may, but the

advice basically concerned tactics and options

which the employer might adopt in trying to deal
with the looming industrial problem in respect of

the Chadstone Multiplex cinemas.

The advice was never acted upon and that

appears from appeal book page 14, and then what

occurred in respect of the dispute, prior to the

opening of the Multiplex, Hoyts had resisted or

delayed in signing the 1986 Canberra Agreement.	It
had - - -

BRENNAN J: Just before you go on, you say that it was not

acted on. That is based upon the affidavit, is

that correct?

MR MERKEL:	Yes, Your Honour.
BRENNAN J:	Is there any other evidence which supports that?
MR MERKEL:	Yes, Mr Hodges, in evidence, gave evidence to

the effect that they did not - they resolved the

dispute, but they never took any steps in respect

of that advice, but I will try and find Mr Hodge's

evidence in that regard.

There were two aspects to the advice,

Your Honour. One was the way in which the threat

of an American corporation, it is referred to as

Hoyts 25 12/4/91

AMC, to possibly enter the Australian market could

possibly be used by the employer. That never came about. And the second related to the possible use

of subsidiary or related companies as an employer

of labour at the cinemas and therefore those

employer companies would not be bound by the award.

That also did not come about. Hoyts remained the employer and remained bound by the award and one of

the possibilities was that they would not sign a renewal of the Canberra Agreement, but it was in

fact signed in 1986, but I will come to that, if I

might,. in stages.

BRENNAN J:  How long was the 1983 Canberra Agreement to run

for?

MR MERKEL:  It was due for renewal in 1986, Your Honour, and

the other two parties, Greater Union and Village,

had signed and Hoyts, I think the evidence was, had

agreed, in principle, but then started to consider

its negotiating options and when later on in the

year disputation emerged, it signed the agreement

and the dispute was resolved and it did not use any

of its subsidiaries to employ labour. So that it

was bound by the award in respect of Chadstone and
it had agreed to abide by the Canberra Agreement

which was the over award agreement which it had

signed in resolution of the industrial dispute.

So that what, in fact, happened in 1986 is that the dispute that was created, and it was the

subject of a notification, and that occurred on

17 November and is at the top of page 2 of our

chronology concerning staffing levels at the

multiplex that was to open in December, was

resolved when in December the Canberra Agreement

was signed. There was an agreement concerning

Chadstone and that comes out from the evidence of

Mr Hodges. Where we have got lAB, that is the

first volume of the appeal book at page 28 and also

in the exhibit to Mr Stewart's affidavit which is

appeal book 172.

GAUDRON J: That was a separate agreement, was it, from the

Canberra Agreement?

MR MERKEL:  Yes, Your Honour. What happened, there was a

resolution in the Commission of how Chadstone was
to be resolved and the effect of that was the

Canberra Agreement was to be applied and the award observed and there was no application for any

variation of the award or any changed

circumstances, and that meant Chadstone opened as

was planned in December 1986. That evidence is

given by Mr Hodges, application book pages 42 and

43.

Hoyts 26 12/4/91

GAUDRON J:	Do I take it that, but for the proceedings in the Commission, the multiplex complex would not
have been the subject of the award?
MR MERKEL:	No.
GAUDRON J:	I just did not understand your reference that

the award should be observed.

MR MERKEL: Sorry. There would be no application to vary

the award or to take any steps that would make the

award inapplicable, I think that is a more accurate

way of putting it.

GAUDRON J: Yes. So that was the issue, at that stage,

whether the award would be applied?

MR MERKEL: Whether the award would govern Chadstone; the

Canberra Agreement, probably more accurately,

because that was an over award rather than an award

would govern Chadstone, and staffing levels would

be observed in accordance with the Canberra

Agreement. So that, in effect, there would not be

a revolution in the industry because of the

multiplex cinemas. It was really about staffing

levels more than anything else because the whole

point of the multiplex cinemas was to make the

cinema industry more cost effective and more
efficient by using less or fewer staff and that

was, really, the industrial issue that one was

seeing looming with the opening of these complexes.

Now what occurred is that that matter

therefore came to an end as I indicated. That

appears at pages 42 and 43 of the application book

but it also is described in the affidavit of my

instructing solicitor which is at appeal book

page 14 in paragraphs 40 to 43 and, also, appeal

book pages 28 to 29.

BRENNAN J:  I must say, reading page 43 ever so quickly, it

is not apparent that this dispute was settled at

that time. There was a six month agreement to get

Chadstone opened. Is that right?

MR MERKEL:  Yes, that is what is said there, Your Honour,

but the agreement did apply and the question of

renewel of Canberra did not come up until 1988.

But I do not think there was any - there was no

further disputation, that what, in fact, happened

was that the matter in the Commission proceeded no

further and the Canberra Agreement was signed, the

staffing levels that the Union had required were

observed and that was the end of the matter. Put

another way, Your Honour, if there was something

that was possibly going to happen in six months,

nothing did.

Hoyts 27 12/4/91

I am informed by my learned junior that what

was thought was that the Union would look at

staffing levels within the six months but nothing

really happened after that period of time, and that

is where matters rested. There was no longer

anything left to resolve in respect of the

notification of the staffing level dispute at

Chadstone. Chadstone opened and that was

effectively the end of that matter.

But I really ought at this stage to take you

to the way in which this matter then came up in the

Commission concerning 1986. In the course of

Mr Hodge's evidence, and this is after the employer's case had closed, he was asked some

background questions about 1986 and that had jogged

the Deputy President's mind as to some involvement

at that point of time.	It came up in Mr Hodge's
evidence at appeal book pages 27 to 30.	The Deputy

President made a statement at page 29. I should

indicate that when I take you to the advice, not

surprisingly it is a matter that had not occurred

to him until it had, in effect, come up in the

course of his evidence which really was going as to

background matters, and at page 29 about two-thirds

of the way down the page, he mentioned that he -

should state as a matter of fairness -

that he thought in 1986 Hoyts consulted his law

firm -

in relation to some advice about the opening

of the Chadstone Multiplex. I was involved in

giving certain of that advice ..... the nature
of the advice, obviously, I cannot disclose
but I can say that following the giving of the
advice I had no further contact with Hoyts in

the period ensuing that. But I thought as a

matter of fairness I ought to make that plain.

was a one-off occasion and they gave that advice	In fact, what happened is the visit to Freehills
and that was the last contact they had with the
matter. So that was the context.

He was asked to give a fuller recollection of

what he knew, and that was at page 61. Just by way

of background, that request to state the extent of his knowledge was a matter that arose in a case in

Victoria before the Full Court. It is No 12 on our

list of authorities, Reg v Industrial Appeals

Court; ex parte Maher, (1977) VR 126, where a

member who had some prior association with the

matter was, in effect, requested to state his
recollection and did not and was disqualified, the

point in that case being somewhat different to the

Hoyts 28 12/4/91

present, that if he had any knowledge of any facts

that were relevant he should afford the parties an

opportunity to know what those matters were and
they could therefore deal with them.

At page 61 the Deputy President responded to the invitation to state the extent of his

recollection, and he said in the middle of the

page:

I recollect perusing a letter of instruction

and seeing at least Mr Hodges in conference in

company with Graeme Smith.	I do not recall
whether there were any other representatives .....

Certainly the discussion involved the
difficulties faced by Hoyts in connection with

the opening of the Chadstone Multiplex, and I

recollect a discussion of the potential

competitor who was referred to in evidence.

That was in fact what jogged my memory. I

settled the letter of advice to be given to

Hoyts. That is as much as I can remember.

The letter of advice that he gave and signed

was at pages 94 to 96 and, for the purpose of the

application, this is obviously the critical

document, and if I can take the Court to that

letter. He sets out in the first paragraph - he

referred to the meeting and indicated that he was

instructed that Hoyts:

Village Theatres Ltd and The Greater Union
Organization Pty Limited are respondents to
the Federal Theatrical Employees (Cinema and

Drive-In Industry) Award 1983 which covers

employees of the companies working in cinemas

as projectionists, booking clerks/cashiers and

ushers.

Can I just stop there for a moment? I have not

mentioned, of course, there was a second employee

organization involved in the hearing. That was the
Theatre Managers' Association. They strongly
opposed the application by ATAEA that the

Deputy President stand down, but I will return to

that later.

We have also been provided with copies of two

private agreements between the companies and

the Australian Theatrical and Amusement

Employees' Association which contain

additional terms and conditions of employment.

The original agreement operated from 1981 to
1983 when it was superceded by the second

agreement which was to operate for a further

Hoyts 29 12/4/91

two years. We are instructed that the second

agreement has now expired and a new agreement

has been agreed in principle but not yet

executed.

The Company proposes to construct and operate

12 to 15 multiplex cinema complexes throughout

Australia the first of which is due to open in
Chadstone in December 1986. Both Village

Theatres and Greater Union are also proposing

to develop and operate a series of multiplex

cinema complexes. We are also instructed that

an overseas corporation known as American

multi Cinema ("AMC") is seriously considering

moving into the Australian market and

developing such complexes.

By letter dated 24 July 1986 the Company has suggested - - -

BRENNAN J:  The Court has read this letter. So there is no

need to take us through each line.

MR MERKEL:  Thank you, Your Honour. The points I want to

make about the letter, if I may, is that what, at

that stage, was raised in that paragraph was the

possibility of manning levels being in disputation

and it is suggested the Union will probably be of

the view that more persons should be employed.	So,
at that stage there was no dispute.	And what the

letter really sought was to advice on, what I might

call, negotiating options or a negotiating stance.

The next paragraph deals with how the possible

competition of AMC in the market may be used in negotiations with the employee organization and

that is dealt with for the rest of page 95 down to

the second-last paragraph on page 96. So that all

of the matters there dealt with are based on a

hypothesis that has never eventuated and therefore

was a possibility being mooted in 1986; was not

paragraph which related to the possibility of having a separate company employ labour in the

acted upon and did not come to anything of any
significance, the point being that it could not
possibly form the basis for the dispute currently

before the Commission. It is irrelevant.

complexes and he mentions that that would be likely

to result in a roping-in of those companies to the

existing award.

Now, two points need to be made about that.

The first is that that, as a matter of legal

advice, was well known to practitioners in the

area, namely, that if a party is not a respondent

to an award it would not be bound by it but there

Hoyts 30 12/4/91

was a well-establish practice in the Commission of

roping-in those parties if they ought to be bound

by the award, and secondly, it was a

possibility - - -

GAUDRON J: Well, you still have to have an interstate

industrial dispute.

MR MERKEL:  Yes.

GAUDRON J: It is not automatic, is it?

MR MERKEL:  No. Sorry, that is absolutely correct,

Your Honour.

GAUDRON J: Yes. The reference is to an "attempt to rope-

in" and there are often insurmountable difficulties

in roping-in employees if they are in a single

State.

MR MERKEL:  Your Honour, that is, of course, correct. The

only point I really make is that these matters were

not secrets in the heart of the privileged few in

the industrial arena, they were matters known as

possibilities that were capable of being exploited

or used, whatever way one may wish, in the area.

The second point, of course, is that it did not

happen. The employer did not utilize or threaten

this option. It remained the employer and settled

the dispute without acting on this letter.

So that the point we make about the letter is that it first of all deals with a tactical stance

and how to proceed in negotiations in anticipation

of the opening of Chadstone and the problem that

would arise in respect of staffing and, secondly,

it deals with two distinct matters, neither of

which occurred.

BRENNAN J:  Is that an answer to the problem though? I

mean, correct me if I am wrong, but as I understand

the nature of the problem, at all events as

perceived by Deputy-President Polites, it was

this, that there is an application under

section lll(l)(g) to abstain from exercising the

Commission's powers with respect to the

prosecutor's applications, and that if there is an

award to be made, it ought to be, to use

Mr Stewart's phrase, I think, a highly prescriptive

award. In other words, there are discretionary

powers here being exercised and are sought to be

governed by the Commission's understanding or

evaluation of the conduct in which Hoyts and its

subsidiaries have engaged and here is a letter

which sets out what is recommended as the course of

conduct to be engaged in. Now it may be that it

was given in relation to a dispute that is passed

Hoyts 31 12/4/91

and finished, but none the less it is a template

for present conduct.

MR MERKEL: Well, Your Honour, with respect, when I come to

the Deputy President's reasons, he has, with

respect, mixed up subject-matters. The

section lll(l)(g) dispute related entirely - and

this is on Mr Stewart's own affidavit and on the

transcript - to dismissals by Hoyts' staff during

the course of the hearing that occurred in April/

May 1990, and it was so confined - I will come to

that, but having said it can I give you the

references. It is in paragraph 4(f)of Stewart's

second affidavit at application book pages 179

to 180 and it also appears in the transcript in

exhibit MGC16 appeal book pages 259 to 261. Sorry,

I am corrected. I had said "dismissals". I think

it was signing new contracts of employment.

BRENNAN J: Yes, but at all events, it is a discrete and

narrow area.

MR MERKEL:  Yes, it certainly is, and the matters before the

Commission all arose in respect of disputes in

1988/1989, so just in principle, those matters

could not be dismissed in respect of matters that had taken place some years earlier. The point we
emphasize is not only is the section lll(l)(g)

point very narrow and confined, but it is not

capable of being extended, because the environment

and the matters before the Commission presently

have nothing to do with the matters in 1986,

because in 1986 there was an anticipated opening of

the first multiplex complex. In 1990 there has in

fact been an opening of four such complexes with

four years experience as to what are appropriate

staffing levels and employment conditions, as well

as 10 others in Australia, so that the whole

question of an appropriate award, in 1990, can take

nothing from the complexion of an anticipated

problem in 1986.

Indeed, to show you how far removed they are, there was an extensive application by the unions to

summons Mr Hodges and other Hoyts' witnesses who

were not called in the applicant's case, and many

reasons were given, but none of them were given

that related to any disputation in 1986. We only

got into 1986, in effect, as part of the background

narrative, to just show how we get to 1988, rather

than starting in that particular period, and it

really only came up accidentally and it is

therefore understandable that, notwithstanding that

this matter had been in the Commission for the best

part of the year, the Deputy President had never

had reason to recall his role in 1986, because it

Hoyts 32 12/4/91

really did not touch upon anything that he had

before him.

That is why we say that, even pushing the matter to its outer limits, one cannot really get

to an overlap between what occurred in 1986 and in

1988. There is one exception, and it is in form

but not in substance, and that is that in 1988 the

company did form two subsidiaries and did, in fact,

in a particular way which is set out and I will

come to, employ employees through those

subsidiaries. But in the matter before the

Commission, there has not been any issue about

those subsidiaries being roped in. No point has

been taken and indeed, to indicate how dead the

point is, in the document which was put before the joined in as the one matter - and this appears in

the second volume at pages 249 to 250.

These documents are not easy and it is no

criticism of the way in which they were put
together at the time but, in substance, all six

matters were proceeding within the Commission and

there was an application to the President to have

them all referred to a Full Bench, and the annexure

at pages 249 to 250 was, in effect, part of the
material relied upon to have them referred to the

Full Bench. So, to that extent, it assists in

identifying what was referred. And at the top of

page 250, or I should take you to the bottom of

page 249. I am sorry, I should explain the first

two paragraphs if I can just keep going backwards

to the top of the page. What was really being put

was that the current.award, which was a 1983 award

at that time, was no longer realistically relevant

to Hoyts operations and it was Hoyts desire to

restructure the award. Now, that really is the

matter before the Commission. At the bottom of the

page it said that:

The awards are outdated in that they do not

provide for the flexibility of hours required

to efficiently operate multi-screen cinemas.

And then, at the top of the next page:

Delarene Pty Ltd and Rampton Pty Ltd have been

established -

and this occurred in 1988 -

in order that junior employees can be employed

in Hoyts theatres at appropriate junior

rates -

Hoyts 33 12/4/91

GAUDRON J: That is, other than at the award rates, I take

it?

MR MERKEL: Sorry, yes, other than at award rates.

GAUDRON J:	And the operating costs, I take it, were also adjusted on some basis that they were not
immediately covered by the awards?
MR MERKEL:	Yes, that is so, Your Honour.

GAUDRON J: Well, then, I fail to see how it can be said

that that is dead. I mean, that must surely be

relevant in terms of an application for a

prescriptive award and in the context in which

people are agitating the negotiated tactics that

have been employed in the past?

MR MERKEL:  But it is the next paragraph, Your Honour,

because it is not in issue that there be a roping

in - - -

GAUDRON J: Yes, by the restructured awards. That is not

the point, the point is that this was done for the

purpose and with the consequence of avoiding the

application of the existing award. That is what

that paragraph says at the top of page 250.

MR MERKEL:  Your Honour, the point I make, and it is really

the next paragraph, is that in the matter before

the Commission, and this is the initiating

document, there is no issue but - - -

GAUDRON J: Yes, in the matter before the Commission, and

that is the award that the company is seeking to

have made.

MR MERKEL:  Yes .

GAUDRON J: It seeks to take itself outside the existing

pattern of award regulation - right outside it -

and on the assumption that it can take itself right

outside it its preserving the status quo, or

protecting itself from any claim that might arise

if these people were later to be seen as suffering

a loss.

MR MERKEL: Well, it may have a retrospective award; it may

have an award made in terms other than the

application. The only point that is being made

here and it is in the next paragraph, is that there

is no issue but that the two companies be bound by

the restructured awards.

GAUDRON J:  But you can well see that that might very well

be a matter of heated issue with the•Union. The

Hoyts 34 12/4/91

fact that it is a dead issue, from your point of

view, does not resolve the problem.

MR MERKEL:  No, it is not a dead issue from our point of

view. All I am saying is that the use of these

companies, whichever way one wishes to view it, is

a matter that takes you back to 1988; takes you

back to what occurred then and it has not been in

issue that those companies be roped in or bound by

whatever the result of the Commission is.

GAUDRON J:  But it is also not in issue, from what you have

said at the bar table, that that, if it was done

independently of the advice in 1986, was done for

the purpose of achieving the end that was

contemplated in the advice in 1986.

McHUGH J:  The advice that was given ..... to use these

companies was independent advice and they were not

aware of Mr Polites' advice. Is that not the

evidence?

MR MERKEL: That is what occurred, that Mr Polites' advice

was given in respect of a possibility that was

never acted upon and a later solicitor, not aware

of that advice, recommended a particular course and

that has been specifically dealt with. It is not

the same as Mr Polites. In fact, it operated in a

very distinct way and it operated with distinct

classes of employees and that occurred in 1988 and

1989, and there is not the slightest doubt that

what occurred in 1988 and 1989 is relevant to the

matter before the Commission because that led, in

part, to the totality of the industrial dispute.

The point we make is that that both causally and

factually has got nothing whatsoever to do with

what occurred in 1986.

GAUDRON J:  You may say that but the unions may wish to

cross-examine to the contrary effect; may wish to

put a case diametrically opposite.

MR MERKEL:  They may, but they have not.

GAUDRON J: They have not put their case.

MR MERKEL:  But that is the very point, Your Honour.

McHUGH J: Mr Stewart's affidavit: he says, "the nature of

our case appears from the cross-examination which

has already taken place", so - - -

MR MERKEL:  It is not there, Your Honour, and the point

about it - and that is what we wanted to come to

when we finally deal with Mr Stewart's affidavit -

the nature of the case is to be derived from what

has occurred and what has been done in the

Hoyts 35 12/4/91

Commission, not what someone may say they wish to

do or may do in the future. One looks to the

issues as they have evolved and must decide whether

there is a basis for a real apprehension of bias

based on what the matters to be determined
presently are. If that changes in the future, so

be it, but we are confined to what we have before
us in the Commission and 1986 does not form part of

any of the matters in issue before the Commission.

When Mr Hodges was sought to be summonsed, the

reasons given for summonsing him, because he is the

Union,.s witness, did not touch upon 1986, and I can

take you to those because it is Mr Stewart's

affidavit that put them in. He put in his reasons

in exhibit IS 1 which is appeal book page 116, but

if I can summarize it because it goes over a number

of pages, if one can follow it. But at page 122 he

indicated one of the reasons was he wished to test

Hoyts' proposals as in their draft awards. It is

probably easier to summarize them rather than read

them but if I can just summarize them because the transcript is somewhat verbose and extensive, but

my understanding of the reasons put forward for

summonsing Mr Hodges~ and these reasons do not

mean that they are in issue in the proceedings but

I am putting the case against us at its highest,

going outside what is in issue and looking at what

may be apprehended to be in issue, he said he

wanted to call Mr Hodges to test Hoyts' proposals

in draft awards, at page 122.

At page 139: because Mr Hodges' duties

extended to staffing and he wanted to ask about
staffing matters. At 140: safety, health and

other legislation, and he wanted to ask Mr Hodges

questions about the treatment of union personnel

within Hoyts during the 1988 strike, and at

page 141: he wanted to draw upon Mr Hodges' great

experience in the industry and wanted to ask him

questions about the industry. In other words, until this opportunity

presented itself to remove a member of the bench
for whatever reason, 1986 did not emerge as a
matter of significance or relevance in these
proceedings.

BRENNAN J:  I must confess, the whole problem that I am

encountering at the moment, is to understand what

are the issues before the Commission, and can I

just tell you where my difficulty is presently

lying, Mr Merkel, so that you can deal with it. I

thought that perhaps the best way to discover what

the issues might be, from the point of view of the

respondent, is to look at Mr Stewart's affidavit,

and there I saw that there were two matters which

Hoyts 36 12/4/91

he agitated at page 110. One was the

section lll(l)(g) issue, which you have mentioned and which you will deal with. The second is that there is a consideration to be given to the past

conduct of Hoyts, in order that the Commission

might form a proper view as to the level of

prescriptiveness of the provisions to go in the new

award and that, in considering the past conduct of
Hoyts, it was necessary to look at the whole of it,
and in looking at the whole of it, albeit it is

only a matter of history, one finds that what has

happened has been consistent with, even though not

caused by, the advice that was given in 1986, and

therefore, the person who was called upon to

evaluate that conduct has to determine for himself,

in a quasi judicial capacity, whether conduct which

accords with the advice that he gave is conduct

which ought to result in a prescriptive award.

MR MERKEL:  Your Honour, we would say that that is putting

it at its highest for Mr Stewart. There are two
responses: firstly, the court is required to look,

not at his affidavit as to what he may now wish but

what, in fact, is before the Commission as the

issues and we take you to the notifications and the

transcript for that. So therefore one should come

to his assertions with some caution. They must be
not assertions, but based on material, and he has

not done that. Equally importantly, at the heart

of what Your Honour has put to me, is conduct by

Hoyts. The conduct by Hoyts prior to 1988 was one

of compliance with the Canberra Agreements,
compliance with the awards and a dispute which was
resolved in 1986, without going outside either of

those two documents, and that - - -

BRENNAN J: Well, as to the second of those propositions, it

seemed to me that it was by no means clear, not

only from pages 42 and 43, but from the following

pages, that that matter of 1986 was exhausted and

formed no relevant and ongoing part of the conduct

which fell for evaluation.

MR MERKEL: Well, Your Honour, I will look to the totality

of what I believe is relevant to that. I believe

we have put it before you, because it has never

really been a matter in issue and the reason why it

was never an issue is that there was no conduct of

Hoyts relevant to these proceedings that the Union

could complain of, prior to 1988, and therefore it

comes up as a sidewind, and that really

corroborates what I have said, that there is just

no extraneous evidence or facts one can go to to

show that one can look successfully back at

anything prior to 1988, other than to say in 1988

there was a departure from the past and, as

Your Honour had indicated in your formulation to

Hoyts 37 12/4/91

me, the evidence requires that there be no causal

link between 1988 and 1986. If there is no causal
link and there is no conduct prior to 1988, then

there is nothing in issue before the Commission

that requires it to look at anything before 1988,

other than Hoyts' conduct in compliance with the

Canberra Agreement and other matters, and the

reason then is, why did it depart from that in 1988

and 1989, and I have no difficulty with the

relevance of those matters to the contest in the

Commission, and it is really that aspect which we

say corroborates and confirms what we are putting

and explains why the Deputy President was not even

troubled by this, until it came up in an historical

and purely an historical sense.

That is why I emphasized at the outset, moving

away from this jurisdiction but looking at Livesey,

even in a court, this function of disqualification

should only be exercised in respect of what is a

significant and live issue; not a peripheral, not a

marginal or a background issue, because the

observer that we are looking at is well able to say that participation in some shape or form with these peripheral or background issues will not, to the

reasonable observer, result in a conclusion that

there will not be an independent, impartial and

unprejudiced adjudication.

So that is why we emphasize that and we take

you to this material. But the real matter before

the Commission is really what is in exhibits MGC 1
to 6. That starts at page 193 of the second volume

and those documents are, I would hope, helpfully

summarized in our chronology at page 2 because

there is no doubt that in 1988 conduct of Hoyts

which is the subject-matter of the dispute and

therefore to be examined - - -

McHUGH J:  What page is this, Mr Merkel?

MR MERKEL:  It is page 2 of the chronology, Your Honour, and

it starts by reference to August 23 1988 and the

actual notification is in the second volume at

page 193.

So the current matters came before the Full

Bench by reason of notifications or logs of claims

which are respectively exhibits MGC 1 to 6, and

they are at page 193 and following in the

application book. Those matters came before the

Full Bench by reason of the President's reference

on 1 September 1989.

Can I just go in and identify what they are.

I do not want to waste the Court's time by going

into the detail of them, but the first notification

Hoyts 38 12/4/91

was on August 23 by Hoyts of a dispute with the

ATAEA re staffing levels, wage adjustments and

conditions of employment. The next relevant step

in the chronology is on August 30 when, connected

obviously with the dispute notified on the 23rd,

Hoyts did not re-execute, in effect, the 1988

Canberra Agreement because now for the first time

it was parting ways with the other employers as to

the way to deal with multiplex cinemas.

On September 16th the ATAEA gave its

notification and that concerned staffing reductions

and the standing down of staff, and that is at

appeal book page 200 in MGC 2. On October 5th is

notification by the Union of a further dispute

arising out of redundancy notices to 44 employees

and certain casual employees were no longer

required. That is at appeal book page 199.

October 31st there is a further notification of a dispute in Perth concerning work classification.

That is at 196.

Then on December 9th the Theatre Managers

Association served a log of claims on Rampton seeking a roping in of that company to the award.

That is at 214. On December 22nd the ATAEA log of

claims was served on Delarene and Rampton because

these companies had begun employing staff, and I

will take you to the details of that in a moment,

but that occurred in 1988, and they sought to rope

in Delarene to the existing award.

In 1989 there was an application by Hoyts to

vary the ATAEA award and they sought a new award

saying the old award was not appropriate and that

what they were doing was consistent with the

structural efficiency principle of the national

wage principles. On June 8th there was an

application by Hoyts to vary the Theatre Managers

award, and there was an application to refer all

matters to the Full Bench.

GAUDRON J:  I am sorry, was there an application by Hoyts

for a different award or just to be excluded from

the last award?

MR MERKEL:  I think, Your Honour, the application to vary

was that they be deleted and that was, in effect, a

new award application.

GAUDRON J: Yes. But the effect of that was to make them

award free?

MR MERKEL:  No, to give them a new award based on their

current and existing staffing contracts.

GAUDRON J:  I see.

Hoyts 39 12/4/91

MR MERKEL: No one is suggesting they should not be bound by

an award. The issue, and the only issue, between

the parties is what is the award.

GAUDRON J: Yes. Well, what award should be made. I am

sorry, there is a prior issue, is there not? There

is the issue whether or not they should be excluded

from the existing award?

MR MERKEL:  Yes, whether they should be excluded from the

existing award. But putting this in context,

Your Honour, can I take you to page 315, because

returning for a moment from the esoteric world of

awards that were made in 1981 and 1983 to the real

world in 1990, on both sides of the case there was

not the slightest doubt that the existing award

bore little relationship to or relevance to the

industry. The Canberra over award agreement had

been governing the way things were operating, but

Mr Ophel, who was the industrial advocate for

ATAEA, at page 315, conceded that the award had to

be restructured. What he said when these

proceedings opened, when he was asked by the

Commissioner to state the elements he cannot agree

with, in effect with Hoyts' proposed award, Mr

Ophel said:

We would see it that the document is so

radically different to the existing award that

to simply start at the beginning of the Hoyts

documents and work the way through saying,

yes, no, yes, no, would not be a terribly

productive exercise. It would be better to

commence by identifying areas such as hours-of

work and annual· leave and so on, not clauses

in the award and whatever and say what are the

problems that exist in the industry at the

moment from the employers point of view.

Does the union acknowledge that there are

difficulties in those areas, and indeed we

have in informal talks with Hoyts, as well as

talks with the other employers, said we
readily admit that the existing award is not
suitable for the -

I think that probably should be the 1980s -

and the 1990s. There are provisions in that
award which simply are not applicable any more and confuse both our members and the employers

and management attempting to interpret the

award and so on.

There is no argument about that at all. There

is an additional complexity in the matter, and

that is since 1981 the three major exhibitors

Hoyts 40 12/4/91

in Australia have been parties to agreements

with the union which have not only contained

over-award payments, if you like, but have

taken into account the changing nature of the
industry.

There are provisions in those agreements which simply do not appear in any form - in any

other form either in the award because the

larger operations, the building of multi-

screen cinemas and so on has been primarily

the province of the large employers.	Hence we
have dealt with those in the agreements.	To
simply look at the old award which has not

been applied in a lot of ways since 1981 would

suggest that one is simply looking at changing

that would be to ignore the fact that it has

been changed in a de facto way.

So that with respect, Your Honour, when Your Honour

Justice Gaudron put to me, well, this is looking a

bit one sided, employers were escaping an existing

award, it was an award that on any view the unions

said had no relevance to these sort of operations

and the unions, on the other way, were putting it

in an over award agreement, so that what is now

before the Commission is simply what is the

appropriate award. Putting the niceties aside,

that really is the matter to be determined.

Now, the roping-in of these subsidiaries may

take it retrospectively back to when they started

employing employees.	They may be matters that are
relevant to these issues.	How they will be applied
is another matter.	But on no view of that matter

can one go back to a dispute that existed before

the multiplex cinemas had opened and to a point of

time before companies had employed employees. So

that that is why we say, on no coloured view, and

certainly on no objective view of the facts, can

and it is for those reasons that we say that rather	1986 bear upon the issues before the Commission,
than do what, with respect, the Deputy President
seems to have done and asked, "In the future might
the past have relevance?", he was required to look at the present and ask, "On the issues I now have to decide today, what is the relevance of my advice
in 1986?" If he had asked himself that question he
would have answered, "No, of no relevance." And that really is the complaint we have with the way
in which this was approached.

It was approached looking at the niceties

which would not justify disqualification if the

matter was about to begin. But to say that that

association with the past based on the authorities

should disqualify him after the close of the

Hoyts 41 12/4/91

applicant's case, we say, there is just no possible

basis for the observer, the objective observer to

conclude that he could do anything other than bring

an impartial and unprejudiced mind to adjudicate on

the matters before him.

Now, of course, looking at it even broadly, if

you ask what is the origin of the 1988 to 1990

dispute, it was the failure to re-sign the over

award agreement in 1988. It was the dismissal of

certain employees. It was the classification and

staffing problems that came to light in 1988 and it

was the roping-in as a result of what happened in

1988.       And can I take you to that because that is

set out at appeal book pages 14 to 15 and it is

that and that alone that we say can have relevance

to the adjudication of the Commission.

At page 14 it is really set out in

paragraphs 47 to 48. There is a slight correction, if I can ask you to note it at paragraph 45. It is

corrected in a later affidavit but it is not easy

to follow. Chadstone opened in 1986 but between

that opening and August 1988, Hoyts, and its then

partner, CIC, opened its "three new", not "10 new

multiplex locations". What, in fact, happened was

that there was a total of 10 opened in Australia,

three of which were Hoyts. So that the case

involving Hoyts deals with the four multiplex

locations in New South Wales and Victoria, Hoyts in

December 1986, and the other three up to August

1988.

The subsidiary point comes up in paragraph 47:

In 1988, upon the advice of counsel briefed by

me, Delarene Pty Ltd and Rampton Pty Ltd which

are wholly owned subsidiaries of Hoyts,

commenced to employ persons in all existing

Hoyts and Hoyts/CIC locations thereby enabling

labour to be employed on terms and conditions

other than those prescribed by the awards.

It has not been said but the reality is other than those prescribed in the Canberra agreement as well.

GAUDRON J: Yes. Is that all labour, or only some of it?

MR MERKEL:  Some, Your Honour, it is in paragraph 49 that I

think Your Honour's question ge~s answered.

Some of the persons employed by Delarene and

Rampton, had previously been employed by

Hoyts. I was then unaware of the advice given

by Mr Polities and so I believe was counsel.

Accordingly, Mr Polites advice had no part to

play in the advice tendered to the applicants.

Hoyts 42 12/4/91

BRENNAN J: Those sentences do not seem to me, with respect,

to have anything to say to the issues before this

Court. Is that right or is that wrong?

MR MERKEL: Other than to say, Your Honour, that if an

inference or evidence need to be adduced that the

events in 1988 were not causally linked with the

advice in 1986, but put another way, Your Honour,

there is no basis at all on the evidence to suggest

that there could be any causal link between what

occurred in 1988 and Mr Polities' advice in 1986.

BRENNAN J: Well, the question being reasonable apprehension

of bias, would the question not be whether the

conduct that was engaged in in 1988 was consistent

with the advice given in 1986?

MR MERKEL:	With respect, no, Your Honour, because the observer is wiser and better informed than that.
BRENNAN J:	By this affidavit? At the time that the decision is made by the tribunal member, he does
not know whether or not what was done in 1988 was
done in consequence of his advice or independently
of it, nor does the bystander know.whether or not
there is a causal connection or otherwise.

MR MERKEL:  Yes. Would Your Honour just excuse me for a

moment. I think, Your Honour, that was probably

dealt with in the submissions that were put at the

time before the Commission. I think I accept the

force of what Your Honour says, that one has to

look at the facts as they existed.

McHUGH J:  I am not sure that that is right, is it? I

thought we examined the situation when one knew all

the facts.

MR MERKEL:  Yes, I think that is probably - - -

McHUGH J:	You attribute to the hypothetical.
MR MERKEL:	Yes, I think Your Honour is right.	I think I

have answered it too quickly. I have in mind in

fact what I have said in my own outline that this

Court can receive further evidence and look at it,

not in the light of what Mr Polities knew, but in

the light of the facts as they exist and as they

are.I think that is correct.

BRENNAN J:	One can always look at the facts, but what are the relevant facts, and are the relevant facts not
these, that there was evidence of conduct and
evidence of advice and an assertion of coincidence
between the conduct and the advice.

Hoyts	43	12/4/91
MR MERKEL:	With respect not, Your Honour.	I think, with

respect, that is putting it in a way that divorces itself from a lot of facts. In other words, if we

only had advice given in July 1986, nothing else

happened and then employment by two subsidiaries

occur in 1988, and nothing else, I would not

concede that that could be the proper inference,

but at least what Your Honour is putting may be

said against us, but we say that divorces what

happened from a lot of facts, namely, Mr Polities

was looking at possibilities that might be employed

before the opening of the Multiplex in 1986, purely

for the purpose of negotiations with the Union.

These were possibilities that could be

considered and could be put to the unions as to why

they should modify their agreement. What occurred

is that Hoyts did not act on that advice; in fact,

acted contrary to it and reached agreement based on

the Canberra Agreement, and that was the resolution of that matter. Nothing further was required until

two years later. The Canberra Agreement was up for

renewal, and at that point of time, with the

multiplexes, not one, but three more actually

opened, the question arose fairly and squarely: how

do we now try and bring these multiplexes into what
everyone seems to acknowledge is an antiquated

award and over award system? And at that point,

acting upon the advice given by other persons,

which was no longer related to tactics, but actual

implementation, certain steps took place, and we

say we must remove ourselves now from the broad

general, which is known. It is hardly a surprise

to anyone in this area that this can be done and is

done, and has been for a very long time, but what

in fact occurred in in paragraph 49: not just doing

something that anyone in the arena knows about, but

looking at what, in fact, was done.

And what was done, Your Honour, was that in

late 1988 in a way that was not causally linked

with 1986 in any way, firstly:

Managers -

who are not covered by the ATAEA -

who had previously been employed by Hoyts,

changed their employment to either Delarene

Pty. Ltd. or Rampton Pty. Ltd.

Can I just stop there. That meant that existing

employees represented by the Managers Association,

who does not seek Mr Polities disqualification, but

opposed it, changed their employment, in (b):

Hoyts 44 12/4/91

Front of house staff and projectionists who

did not go on strike remained employed by

Hoyts.

(c) New front of house employees, known as

cinema workers, have been employed by either

Delarene Pty. Ltd. or Rampton Pty. Ltd. and

were engaged upon the terms and conditions

which the applicants seek to obtain from the

Commission by way of variations to the present

awards.

So no existing ATAEA covered employees were changed

in their employment.

GAUDRON J:  Do I take it that the strikers were not re-

employed, or if they were re-employed, they were

re-employed by the subsidiaries?

MR MERKEL: All I can say is, they were not re-employed.

There may have been some exceptions. I think it is

a little more complicated, because I think many of

them were casuals, but paragraphs 49(a), (b) and

(c), which is not joined in issue, sets out what

occurred. Now, when you look at the specifics, we

are now looking at the way in which particular

employment has done for the future by companies in

respect of staff for the future. There was no

change-over of employment, other than in respect of

managers, and their association does not see any

basis, at all, for calling for disqualification.

GAUDRON J: But, Mr Merkel, this sort of conduct is likely

to be the subject of argument and criticism by a

union in proceedings directed to determining how

the industrial relations of employers, employees

and the trade union should be regulated, is it not?

MR MERKEL:	They may, yes.
GAUDRON J:

I mean this is a matter of ordinary day-to-day

events in the Commission. That is what happens, is

it not?

MR MERKEL:	Yes, they may make their comments about that.
GAUDRON J:	And what they would be doing in this case, if

they were to comment, would be to ask somebody who

advised that something like that be done, pass

judgment on what was done?

MR MERKEL:  But passing judgment on what was done would

require an adjudication of the facts and only on

the facts before the Commission as they existed in

1988.

Hoyts 45 12/4/91

GAUDRON J:  Or even to take it into account - they would be

asking the Commission to take it into account in a

way adverse to the way in which Hoyts was seeking

to have the relationships regulated.

MR MERKEL:  Your Honour, we say that what the member of the

Commission would have to adjudicate upon is a

situation as it was on the evidence before them in

1988-1989, not some moral principle divorced from

those facts, because if it was a moral principle,

every time pronouncements are given by a commission
or a court of a particular matter, and then the

same issue comes before them in another context,

then they would be disqualifying themselves.

GAUDRON J: Let us assume that none of this had happened but

the matter was in the Commission, you could assume

a single member of the Commission, a commissioner,

for example, who says in the presence of both

parties, Oh well, this is clear; you go away and

set up a couple of new companies and employ all new

staff outside the award. Now, if that happened in

the course of a dispute, there would not be any
doubt, would there, that the commissioner had

entered into the arena of the dispute and thereby

disqualified himself?

MR MERKEL:  Your Honour, with respect, it is not so easy in

this area, but can I ask if the hypothesis can be

put on what the letter says.	He did not advise
them to do anything.	He informed them of an option

available to them. That is how it was put. He

said - and it was legal advice which is not

disputed as something well known in the industry,

they may consider doing this.

GAUDRON J: Except, of course - you may say that, but the

answer to that is there is no reference to

successors to a business. I presume the new Act

still contains reference to awards binding

successors to a business.

MR MERKEL:  Yes, it does. But, Your Honour, all Mr Polites

was doing - and we would say that if this were to

be a question of disqualification it would have

some quite extraordinary ramifications. If a

lawyer had given advice as to the state of the law

and the legal options available to a client in

accordance with law and in accordance with what was

well known to practitioners in the industry and

that lawyer, without entering into the merits, this

was not an advice on the merits, it was not an

advice on saying, "I advise you should do A, Band

C and this is how you should implement it", he was

just informing them of a legal option, a well-known

legal option available to them, and he later comes

to adjudicate upon that option, as a matter of law

Hoyts 46 12/4/91

and as a matter of practice on given facts, if his

prior expression of views upon it as an option

legally available was a matter in issue, we would

say that would make a lot of decided cases very

wrong, if it was proper to disqualify himself.

Because he is required to adjudicate on the

facts as they are in evidence before him, and what

he has in evidence before him was not a legal

option open in 1986, it is the facts as they are in

1988 and 1989 in respect of complexes that had

opened, award procedures and systems that had

become antiquated and ignored in practice, and we

say that is just.a very different situation.

It is not as if he was advising upon something

that is a disputed legal proposition. There may be

disputation - - -

GAUDRON J: But you see that is precisely what I have just

put to you~ it might be disputed that that was an

option legally available in 1986 or, indeed, in

1988. That is not foreclosed. If it can be said

that they were successors to the business of Hoyts

that might not be an option.

MR MERKEL:  If and when that is put, no doubt that will be

considered.

GAUDRON J:  And then, what, two months further down the

track, Mr Deputy President Polites should

disqualify himself then?

MR MERKEL:  Your Honour, no. First of all, if he did, it

would be based upon an issue that arises hereafter

and is not there now, and we say the question is to

be confined to the issues presently before the

Commission which must be decided, not those that

may arise in the future. And secondly, this roping

in aspect is not an issue before the Commission.

There is no question before the Commission but that	the two companies, if the Commission wishes to form	the view, will be roped in to whatever the result
is. That is not an issue.

GAUDRON J:  No, the issue that the unions might wish to

agitate, one would anticipate that they would wish

to agitate, is that this was a ploy designed to

avoid established patterns of industrial

regulation.

MR MERKEL: With respect, Your Honour, it would not fall

very comfortably in respect of another ploy which

governed these cinemas, which was the over award

agreements.

Hoyts 47 12/4/91

GAUDRON J:  I am using that as part of the expression "the

established pattern of industrial regulation".

MR MERKEL:  But, Your Honour, we would submit that even that

This is the point about his

still does not bear upon what is raised here. merits of anything.

letter of advice. It cannot be read in any way as

recommending that particular factual consequences

lead to a particular result or outcome. It is not

even recommending a course of action. It is

informing a client, as they are entitled to be

informed, of options available. He is not even

informing them of any more than that is an option

available and that if they do that, it may be

likely to result in an attempt to rope them in and

it may be considered provocative and could result

in industrial action but it could be of assistance

in negotiations. He is not commenting upon an

analysis of facts which, in his view, should result

or should not result in a course of action.

Even if he did, the facts that would have been

analysed would have been facts that bear no

relationship at all to 1988-1989 because the facts

before the Commission in 1988-1989 have all only

arisen since 1986. So that we submit that on no

view could an opinion about an existing option be

held to be capable of being a prejudgment - and

really, what you are putting, with respect, is a

prejudgment - in this area or, indeed, in any other

area because the point made, in case after case, by

this Court is not that a party may believe that the

past association may result in that member

determining the issue adversely to them, but it

must be a factor that leads the observer to believe

that that person is not able any longer, or would

unlikely to bring an impartial and unprejudiced

mind to adjudicate.

Now, he has laid out there what is well known

to any industrial law practitioner. This may be

done; it will be likely to be treated as

provocative to a union; this is what may happen.

That is as far as he has gone and that is as far as

he could go because he was not asked to look at the

merits; he was merely asked to look at tactics that

could be employed in negotiations and they never

were. It is tactics, I emphasize, in conducting

negotiations. He was not even indicating that this

will be done or this must be done or should be

done, and if so, in what manner.

So that we would submit that many decisions of

this Court and, indeed, other courts would be wrong

if a pronouncement of this kind could.be said to

result in a reasonable apprehension of bias. He

Hoyts 48 12/4/91

has not commented upon - and this is really the

issue - how a commission should react to the

conduct that would be a provocation to the union,

would be likely to result to a roping in, he has

not even expressed a view as to whether there would

likely to be a roping in. He has commented on

nothing. That is why we say that what he has said

is extremely limited and extremely narrow.

BRENNAN J:  I think we have that point, Mr Merkel.

MR MERKEL:  Yes, Your Honour. and just finally in conclusion on the roping in So that the point we make,

question, is that that question must be adjudicated

upon but in the light of the fact that it is not a

live and significant issue in the hearing and has

not been treated by the parties as one, because of
the passage I took you to where roping in is not in

question; the question before the Commission are

what are the terms and conditions of the new award

or, if any, should any new award be made.	So we
say that it is, in the final analysis, with respect, very much a red herring.

The Union's case, and we say this is

important, is to oppose Hoyts' applications. It

did not itself open or identify any issues, other

than one which I will come to which is the

section 111 issue, other than those that relate to

the proper terms and conditions of the awards that

should be made. The passages, and if I can just

take you to them - not read them, but inform you of

where the transcript is, the Union did not open its

them - at appeal book page 11, paragraph 25 of

case, and the importance of that is that in not

opening its case, it cannot rely upon Mr Stewart's

affidavit to say what is in issue before the

Commission, other than by reference to the material

before the Commission. In other words, by failing

this Court should confine itself to those	to identify any other or additional issues, we say	identified in the material before the Commission,
that is exhibits MGC 1-6.

BRENNAN J: That may not be strictly accurate, may it,

because if on the evidence thus far given before

the Commission it is open to a party to raise an

issue which is live and significant to the point,

or if it is open to a party to raise an issue as

perceived by Deputy President Polites, then the

view formed by Deputy President Polites is

supportable.

MR MERKEL: With respect, Your Honour, maybe it is how one

views it, the word "open". We say that the issues

Hoyts 49 12/4/91

are confined to those raised on the material before

the Commission.

BRENNAN J: It is difficult to see how issues in any real

sense are raised by the material as such, is it

not? I mean, if you are talking about the conduct

of the employers which ought to lead the Commission

to the formation of a prescriptive award, how do

you describe the issue?

MR MERKEL:  Your Honour, we describe the issue as: what

should be the terms and conditions of that award,
whether it should be varied, and if so, in what

respect and how, and what we say is that that

really in substance is what is before the

Commission. The ambit of variation, of course, is

very large, but that goes to terms and conditions
of employment, nothing more than that. We say that
within that ambit we do not get any assistance from

anything that occurred in 1986.

BRENNAN J: Well, I can perceive that argument. That is

really that it is not a live issue argument, is it

not?

MR MERKEL:  Yes, Your Honour, but it cannot be because

nothing happened in 1986 that could be relevant to

it.

BRENNAN J: Well, that might be the point of dispute.

MR MERKEL: Yes. Well, I understand that, Your Honour.

BRENNAN J: There is another matter which you might bear in

mind and that is, do·you bear an onus of showing

that the view formed by the Deputy President could
not be supported on the material or are you
entitled to say, on the material that was thus far

put before him, nothing has been shown which

justifies his dis qualification?

MR MERKEL:  We would take the latter proposition as the one

that is correct, but we would say on the material

before this Court, because I have in mind what I

had set out in paragraph 4 of our outline which is

really taken from Livesey's case which is that this

Court, removed from the need for an immediate

decision and with the advantage of hindsight, and I
emphasize "further material and information", is to

make its conclusion on whether, on those facts, a

reasonable apprehension of bias can be shown. This

is not an appeal from the Deputy President's

decision. It is based entirely upon what this

Court, forming a view on this material, would

decide the reasonable observer would conclude and

we say that comes very clearly from what is said at

page 294 in Livesey.

Hoyts 50 12/4/91

GAUDRON J: That much is right but was not the situation in

Livesey that the matter was concluded when the question arose? Is that right?

MR MERKEL: It was concluded, Your Honour, but I do not

think the passage in Livesey was a passage which

was intended to be limited to that particular

situation. It seemed to have a far -

GAUDRON J:  No, but as a matter of logic there may be

different considerations where the matter has not

been completed and a judgment has to be made

whether you sit back and wait until an issue arises

or whether you deal with it on the basis that it

will probably arise.

MR MERKEL:	With respect, Your Honour, we would say that the question of disqualification is a question that, as
I understand what is said in Livesey, is to be
decided on the material before the appellate court or the reviewing court which may be quite different. In other words, if the Deputy President had acted on the basis of the material before him
at that time and he had acted absolutely correctly,
but on the material presented to this Court it was
shown that he should not have done what he
did - - -

GAUDRON J: But when the proceedings are not finished, can

you really shut your eyes to a statement by the

person concerned, that is, the person who, if he

stays there, will make a decision, that something

is a material issue to be determined? That is what

he said. He says, at page 85, that it is a

material issue.

MR MERKEL:  I think, with respect, Your Honour, at page 85,

he indicated that the issue may be relevant.

GAUDRON J:  He says one may be relevant and then he says: the effect of separate corporations employing

labour ..... and the relevance of this conduct
to the claims of the ATAEA in this case are

material issues -

he says they "are material".

MR MERKEL:	Yes and, Your Honour, he said that they are material issues - it is for this Court to decide on
what basis that can be warranted.

BRENNAN J: Yes, you challenge that proposition.

MR MERKEL: Certainly.

Hoyts 51 12/4/91

BRENNAN J:  And you say that the issues, such as they are,

do not include any live issue to which the 1986

events could be relevant?

MR MERKEL:  To which the 1986 advice could be relevant, yes,

Your Honour. And may I define - I am probably just

repeating myself - I am repeating myself - the

definition of that advice is what is relevant and I

have already characterised it in a particular way.

What he indicates in paragraph (b) that

Justice Gaudron took me to was the relevance of

conduct, and that is conduct in 1988.

GAUDRON J: Well, you do not dispute that what he says are

material issues? You really say the 1986 "advice",

in inverted commas, simply cannot bear upon them?

MR MERKEL:  We do not say the first, Your Honour. We say

the effect of using the two subsidiaries is not - I

would rather say "a live issue" because it is

agreed that those two companies will be bound by

any award to be made. It is not a live issue.

McHUGH J:	I know you have put the whole thrust of your argument on whether they are live issues, but the
real and ultimate issue is whether or not he will
not fairly hear the case - hear argument and decide
the case on the evidence.  I must say I tend to
require a high standard than perhaps other courts do in relation to those matters but it seems to me to be a large proposition to say about any judicial
officer that he would not decide the case on the
evidence before him even though he has got some
prior connection with it;  a lot of people can
reasonably have an apprehension of bias about him.
MR MERKEL:	With respect, that is what I have been endeavouring to say and before lunch I took you to
a lot of cases that said it is even harder -
indeed, it is most unusual in this jurisdiction but
apprehension of an adverse decision does not fall it is hard in any jurisdiction. With respect, that is so. That is why I said earlier that foul of the rule. It has got to go much higher
than that.

McHUGH J: But every day magistrates and judges, sitting on

their own, hear most prejudicial evidence in terms

of admissibility of evidence, and then they reject
that evidence as inadmissible and they go on and
deal with the case. They are not going to be

influenced by the fact that they heard some

prejudicial evidence on application to admit

evidence.

MR MERKEL: That is so, Your Honour.

Hoyts 52 12/4/91

BRENNAN J:  Mr Merkel, do you need to go further than this,

or is this the summary of your argument: that the

advice that was given in 1986 was legal advice

stating what legal options were; not commending any

of those courses as industrially desirable but

simply stating what the options were. Secondly, in

any event, what was then dealt with is so far
removed from the events which are relevant to take

into consideration on either of the grounds

advanced by Mr Stewart that the 1986 events are no

longer live issues.	Does that summarize what you
are saying?

MR MERKEL: It does, Your Honour. It does, but can I just

go back briefly to the paragraph which really is of

the essence of the Deputy President's decision at

page 85 because we say that there are two separate

matters dealt with and he has misconceived the

result that should flow from each.	The first:	he
said - was that:

the possibility of a separate company

employing labour at such complexes as

Chadstone. It is clear to me from the proceedings so far that (a) the issue of what

happened in fact between Hoyts and the ATAEA
between 1986 and 1988 may be relevant to
questions which ultimately have to be

determined by the Commission in this case.

The word "may" be relevant is not the right

question. He has got to say "is" relevant and he

has not said that. So, he is looking to the future

rather than the present. And, secondly, what

happened in fact between Hoyts and ATAEA between

1986 and 1988 is that there was compliance with the

Canberra agreement, so it has really nothing to do

with his advice. Secondly, in (b), when he talked

of "the effect" of what occurred, that is a factual

matter which he has to examine which he has

absolutely played no part whatsoever in relation

to.

So, accepting what Your Honour

Mr Justice McHugh said as being the test, and that

has been emphasized time and again, we say that

there can be no possible basis in anything he has dealt with in that paragraph resulting in a fair-

minded observer suggesting he could not bring an

impartial mind to determine those issues.

Now, the other issue that was put forward was

this question of section lll(l)(g). I think I have

given you the references, but we do not understand

why or how that matter can come up because at

Hoyts 53 12/4/91

page 179 to 180 - that is Mr Stewart's affidavit -

at paragraph 4(f), Mr Stewart indicates that:

The "contention" by the ATAEA "that Hoyts' negotiating methods and industrial tactics

have been so unsatisfactory that the
Commission should exercise the discretion

conferred on it by s.lll(l)(g) of the Act"

arose out of events which transpired during

the hearing of the case in April and May,

1990.

And he then exhibits a copy of the transcript and

over the page again repeats that what he was
complaining about occurred between 21 May and

27 April 1990. He exhibits MGC16 and,

particularly, at pages 259 and 261 of that exhibit

you will not see anything there that touches upon

this question of different companies using the

methods we have discussed. What was happening is

they were signing up projectionists on the basis of

their existing agreement - the terms and conditions

of the agreement, and the Union said they should

not be doing that whilst the matter is before the

Commission. That had nothing whatsoever to do with

who was the employer, it was the terms and

conditions of the employment that they were relying

on, on section lll(l)(g). So that, in our

submission, the points in substance put forward

could not produce the result that the Deputy

President arrived at.

If I could just briefly go back to the points

we want to refer to in our outline and I will not

repeat them, but at paragraph 3 we refer to the

Judge Russell case and also the S & M Motor Repairs

case and the minority judgment in the Committee of

Justice and Liberty case, a Canadian case of the

Supreme Court I want to take the Court very briefly

to to indicate how the courts have applied the

test very much as Mr Justice McHugh had indicated

it to me.

The one case I have not taken the Court to,

and I would like to do, very briefly, is the

decision of the Supreme Court of Canada in the

Committee of Justice v National Energy Board,

68 DLR (3d) 716. This case concerned the National

Energy Board's determination of a pipeline

application. The chairman of the board had been

involved in preparing feasibility studies for a

consortium in respect of the same pipeline and the

question arose as to whether that prior association

was such as to disqualify him from participating

and adjudicating upon the application for, in

effect, the permission to operate that pipeline.

Hoyts 54 12/4/91

There was a very clear line of demarcation

between the majority and the minority approach.

The majority decision is probably best summarized

at page 731 in the judgment delivered by

Chief Justice Laskin. The case had been argued

very much on the basis that the functions of the

chairman in, in effect, preparing the application

and his function in adjudicating upon it were very

different and what His Honour the Chief Justice

said at page 731:

Of course, the functions of the Board are

different from the functions of an applicant
or group of applicants for a board

certificate, just as the functions of a Court

are different from those of a litigant seeking

a favourable decision. It does not matter

whether or not there is a lis inter partes, in

a traditional Court sense, in a Board hearing

for the grant of a certificate, so long as the Board is required to apply statutory standards

to any application, and, indeed where there

are, as here, competing applications the

resemblance to a lis is increased.	An
applicant seeking a certificate must

inevitably direct itself to the statutory

prescriptions by which the Board is governed,

taking into consideration of course, the scope
of discretion which those standards permit.
To say, therefore, that the issues before the

Board are different than those to which the

Study Group directed itself is not entirely

correct, save as it reflects the different

roles of the Board and of the Study Group.

Moreover -

and this was central to the majority decision -

it does not meet the central issue in this

case, namely, whether the presiding member of

be said to be free from any reasonable a panel hearing an application under s. 44 can	apprehension of bias on his part when he had a
hand in developing and approving important
underpinnings of the very application which
eventually was brought before the panel.
Now, those underpinnings were not

hypothetical, were not advisory in a general sense
but he actually participated in the preparation and
the detailed preparation of feasibility studies;
economic planning; benefits, all of the sorts of
subject-matters which had to be considered again by

him adjudicating as chairman of the board. So, he

was a participant in the very subject-matter - and

by that I do not mean in general advisory terms but

Hoyts 55 12/4/91

in a participatory sense of the application he now

had to determine.

What was said at the bottom of the page by

His Honour:

Economic and financial feasibility were

involved in the very decision to pursue the

pipeline project by an application to the

Board, and the fact that the proposed

application was later refined or revised did

not make it one to which Mr Crowe was a

stranger before it came to the Board.

So that he had formulated in the planning the very

issue to be decided.	So that at page 732 to 733
one sees a test.

Now, of course, the minority took a very

different view and that is at page 737. The

minority view relied upon the cases that I have

taken you to in respect of the industrial relations

jurisdiction, and it referred to Tomko where it was

said that by having persons of experience and

expertise, such persons will be assumed by the

observer to have been involved in matters of this

kind and to have brought to bear in their inquiry

their views and will not be disqualified as a

consequence.

McHUGH J: But did they not ultimately hold, in this case,

that he was disqualified?

MR MERKEL:  Yes, the majority held he was disqualified and

that was by two steps: one is not treating the

industrial relations jurisdiction approach as

applicable to the National Energy Board and, two,

because of the chairman's detailed involvement in

the factual aspects going to the preparation of the

very application he was to adjudicate upon and

having to advise and participate in the feasibility	and the detailed economic planning, he had, in
effect, become a participant in a real sense. He
was now adjudicating, in effect, upon the
application that he had evolved over an extensive
period of time and after detailed workings on the
factual basis of the present application.

So that what we say is that this case gives an

indication of the kind of involvement that is

necessary before it can be said that

disqualification should arise, and we would submit

that that is a far cry from what the Court has

before it in the present case.

Now, we would submit that for the reasons I

have indicated and, in particular, the simple fact

Hoyts 56 12/4/91

that the Deputy President had no involvement of any

kind in respect of the facts that arise for

decision by him, namely, the conduct by Hoyts, 1988

to 1990, and what should be the terms and

conditions of the new award or any variations to the old award, that there is no proper basis for

this Court to reach the conclusion that he should

have disqualified himself on the basis of the
material presently before this Court.

The final matter we deal with is whether this is appropriate for mandamus and in paragraph 7 we

have referred to passages in this Court in Livesey,

at page 294, and JRL at page 352; also the

Industrial Relations Act, section 107, which makes it clear that he is under a duty to continue

sitting if our submissions are accepted by the

Court, and an example of where a writ of mandamus

has been issued directing a judge who has - or a

magistrate, in that case - wrongfully disqualified

himself to continue to sit appears in Sankey v

Whitlam, which is on our list of authorities at

page 346, and the relevant passages are at page 353

and 359. So, if our submissions are accepted by

the Court, in our submission, this is a case where

it is appropriate for a mandamus to issue.

I think, Your Honours, I had indicated that I

should take the Court to where Mr Douglas referred

to the Freehills involvement, and that appears at

page 69 of the application book where Mr Douglas,

in his submissions, had indicated that the

involvement of Freehills was a one off involvement

and that thereafter the present solicitor,

Mr Caldwell, is the only person who has been

involved in the disputation between Hoyts and the

employees and that occurred from October 1986 on a
continuing basis, and we would submit that the

facts that this Court has before it, as I have

indicated in Livesey's case, are the facts that

should be adjudicated upon.

Finally, in respect of the matter Your Honour

Justice Gaudron raised with me about whether that

passage in Livesey applies only to completed

matters, we would say that in the judgment of the

court, it is very clear that that was a test

setting out the role of the appellate court or the reviewing court in all cases because most of these

cases arise when an application is made at the

commencement or in the running. It is the more

unusual or extreme case where it arises, really, at

the end after, in effect, judgment because it is

conduct that is known to the parties as a result of

something that occurs in the running. So that

these determinations are usually made in the

Hoyts 57 12/4/91

running of a case or a matter, rather than at the

end of it.

So, it is our submission that for those reasons the order nisi should be made absolute.

BRENNAN J: Yes, thank you, Mr Merkel.

MR MERKEL: If the Court pleases.

BRENNAN J:  The Court will consider its decision in this

matter.

AT 4.01 PM THE MATTER WAS ADJOURNED SINE DIE

Hoyts 58 12/4/91