Re Munro, D.C. Ex parte Australia & New Zealand Banking Group Ltd

[1993] FCA 508

50 8 1 I 9q.3

JUDGMENT NO. ......+S ......mm e~ata.i*..k

IN THE FEDERAL COURT OF AUSTRALIA	)
1
VICTORIA DISTRICT REGISTRY	) No VP 1541 of 1992
)
BANKRUPTCY DIVISION	)

BETWEEN:  DAVID CHARLES MUNRO

(Judgment Debtor)

EX PARTE:  AUSTRALIA & NEW ZEALAND
BANKING GROUP LIMITED
1A.C.N. 035 357 5221

Coram:  Ryan J

Place: Melbourne

Date:	29 June 1993	3 0 J U L 1993
FEDERAL COURr  L-'

AUSTRALIA

REASONS OF JUDGE HEARING PETITION FOR REFUSING TO DISOUALIFY HIMSELF

Rvan J: The present creditor's pecition was referred 6; a Registrar to the Court constituted by myself on 14 April 1993. On that day the debtor was represented by Mr A McIntosh of Counsel who applied, over the objection of Mr T McLean who has at all times appeared as Counsel for the petitioning creditor ("the Bank"), for an order that the Bank give discovery of various documents.

After hearing argument, I ordered that the hearing of the petition be adjourned for one week, that the Bank have leave to amend its petition to include, in the alternative to one that the debtor was resident in Australia, an allegation that he "was carrying on business in Australia personally". I also affidavit of discovery and made other ancillary orders to ordered that the Bank file and serve by 15 April 1993 an

facilitate the hearing of the petition on the adjourned date, 21 April 1993, together with an order reserving both parties' costs of the day.

After those orders had been pronounced, I made the following statement:

"There is one matter, gentlemen, that has caused me some concern. Mr Munro was known to some extent personally and socially to me when I practised at the Bar. I simply draw that to Counsel's attention. If ~t be consrdered inappropr~ate that I hear the matter - I am not by

any means sure that I would be the judge hear~ng it next Wednesday -

but if it is considered ~nappropriate that I should hear the matter,

I would be grateful lf Counsel could communicate that to my associate

so that other arrangements can be made in ample time before next

Wednesday."

That statement provoked this exchange between Counsel for the
Bank and myself:

"MR McLEAN: Your Honour, my rnstructrons on thls, I can glve them to you, are that we have no difficulty wrth that, but we would be concerned that when we come here next week, that Mr Munro's Counsel drd not get up and use that as another means of o b t a ~ n ~ n g an adjournment. So perhaps ~f ---

HIS HONOUR: No, well, I have srmply taken the course, Mr McLean, of alertlna both partres so that arrangements can be made rn ample time rf either parfy feels any embarrassment arising from my hearing the matter.

MR McLEAN::	Or that if the matter be allocated to another
nonmated judge, then both partles be required to - both partles be	rnformed In advance of next Wednesday who that judge would be so that
a slm~lar attrtude can be formed and expressed to the court. If your Honour pleases."

No submission was then made by Counsel for the debtor in response to my statement or the subsequent discussion between Mr McLean and myself.

No communication having been made to my associate in response to the invitation thus extended on 14 April, the adjourned hearing of the petition was listed before me on 21 April. On that occasion, the debtor was represented by Mr Phillip Ginnane of Counsel who applied for leave to amend the grounds of opposition and for a further adjournment of the hearing of the petition. I acceded to that application to the extent of allowing certain additions to the grounds of opposition but refused the application for a further adjournment . Oral reasons were given immediately for those orders and the present reasons should be read as incorporating fully those ex tempore reasons.

After the orders to which I have just referred had been pronounced, the Bank's petition was stood down to allow other matters in the list to be dealt with. It was called on again at 2.35p.m. after the luncheon adjournment when Counsel for the debtor made the following application:

"Your Honour, before the matters proper are determined I have an applrcation to make whrch I have foreshadowed to my frrend. I mrght preface it, rf I might, your Honour, by saying rt does not give me any personal delrght to make this submission but I have rnstructlons to make a submrssron that your Honour drsqualify yourself from decidrng thrs case on the ground of ostensible bras. The basis of

Honour's family are known to the debtor and have been present, as I	the submrssion, your Honour, 1s that your Honour and members of your
am instructed, wrth the debtor, together with your Honour's spouse at varrous socral functions at the Coll~ns Street Medrcal Clrnrc over a perrod of years and rs privy to certain matters relatrng to disagreements and the llke that have permeated che debtor's involvement in thrs and other matters.
The applrcation rs not made on the basls that your Honour would not b r ~ n g an impartial mrnd to the resolution of the matter before you but that the debtor or a member of the publrc mrght reasonably entertain an apprehension that your Honour would not be m a posltron to brlng an unbiased or rmpartral mind to the resolutron. The refusal of your Honour to accede to the amendments proposed thrs morning of the grounds m opposition, lncludrng the ground alleglng abuse of process, ought to permrt an addrtronal adjournment to the debtor to facilrtate an opportunrty to place before the court evrdence and partrculars of such improper motrve, coupled wlth your Honour's socral and professional acquaintance wrth the debtor.
It can be said to lead to a reasonable apprehensron by the debtor or a member of the publrc that your Honour cannot brlng an rmpartral
mind to the proceeding. Your Honour, it mlght be sald that it is reasonable for the debtor to conclude that your Honour may be endeavouring to be too objective in the sense of errrng too greatly against the judgment debtor's applicatrons and that such arises out of your Honour's undoubted desire to act ob)ectively."

After referring to authority, Counsel for the debtor continued:

"In other words, the submission rs not predicated, your Honour, on the ground that your Honour determined an applicatron adversely to the debtor this morning and, therefore, as a consequence of your Honour's adverse decisron we now seek to claim that your Honour would determine matters prejudicial to us adversely but, rather that because of your Honour's acquarntance wrth the debtor, your Honour may well be regarded by him or by reasonable members of the public to be determlnrng matters - well, berng too objectrve rn determrning matters adverse to the debtor m an attempt to dlsplay your Honour's intended impartiality."

The application was elaborated by further reference to authority, and, after hearing submissions from Counsel for the Bank, submissions in reply by Counsel for the debtor and further submissions by Counsel for the Bank, was refused with an intimation that reasons for the refusal would be provided later, if required. I now furnish those reasons.

It is appropriate first that I set out my recollections of my

acquaintance with the debtor which prompted me to extend the	invitation which I did on 14 April 1993. The debtor and I
were colleagues in practice together at the Victorian Bar from the time when he signed the Roll of Counsel in 1971 until my appointment to this Court in 1986. During that time I never appeared with or against the debtor. We did not share the same clerk or keep chambers on the same or an adjoining floor. However, our respective wlves were, during part of 1985 and 1986 both employed as part-time general medlcal practitioners at the same Collins Street clinic. As a result, I accompanied my wife to a Christmas social function at that establishment at which the debtor and his wife were present. I have no recollection of any discussion on that occasion of the financial affairs of the debtor or his wife or of any other matter relevant to the present petition by the Bank. Apart from the connection which I have just mentioned, my contacts with the debtor were no closer than, or different from, those which I maintained with other members of the Bar with whom I had some acquaintance.
Obviously, I did not regard the acquaintance just described as causing that degree of embarrassment which would lead me of my own motion to refrain from hearing the Bank's petition. Accordingly, when no request was made by either the Bank or the debtor for me to disqualify myself, I entered on the hearing of the petition on 21 April 1993.
As outlined above, it was not until after the luncheon
adjournment on that day and after I had refused the debtor's application for an adjournment and partly refused an
application for leave to amend his grounds of opposition, that a request was made on his behalf for me to disqualify myself on the ground of "ostensible blas".
Reference was made in support of that application to Re JRL ex
parte CJL (1986) 161 CLR 342 where Mason J observed, at 352:

" I t seems t h a t the acceptance by t h ~ s Court of t h e test o f reasonable

apprehension of bias in such cases as Watson (1976) 136 CLR 248 and Llvesey (1983) 151 CLR 288 has led to an lncrease in the frequency of

applications by litigants thar: judicial officers should disqualify

themselves from sitting in particular cases on account of their participation in other proceedings involving one of the lltrgants or on account of conduct during the lltlgation. 1t needs to be sald loudly and clearly that the ground of disqualzficat~on LS a reasonable apprehensron that the judicial offlcez will not decide the case impartzally or without prejudice, rather than that he wlll decide the case adversely to one party. There may be many srtuations in whrch previous decisions of a judlcial offlcer on issues of fact and law may generate an expectation that he 1s lrkely to declde issues in a particular case adversely to one of the partres. But thrs does not mean elther that he will approach the lssues in that case otherwrse than with an rmparkial and unprejudrced mrnd ln the sense in which that expression 1s used in the authorities or that hrs prevlous decisions provide an acceptable basis for inferrrng that there 1s a reasonable apprehensron that he will approach the issues in thls way. In cases of this klnd, disqualification is only made out by showing that there 1s a reasonable apprehen5ion of blas by reason of prejudgment and thls must be "flrmly established": Reg. v Commonwealth Conciliatron and Arbitration Commlsslon; Ex parte Angllss Group (1969) 122 CLR 546, at pp. 553-554; Watson (1976) 136

CLR at p. 262; Re Luslnk; Ex parte Shaw (1980) 55 ALJ'R 12, at p. 14;

32 ALR 47, at pp. 50-51. Although lt is important that justice must be seen to be done, ~t is equally important that judicial offlcers
discharge then duty to sit and do not, by acceding too readily to

suggestions of appearance of bias, encourage partres to believe that by seeking the dlsquallf~catlon of a judgf, they will have their case tried by someone thought to be more lrkely to decide the case in hrs

favour . "

Reg v Watson, Re Lusink and Livesey v New South Kales Bar Association were all cases ln which the judiclal officer or officers had, in the course of the same or related litigation indicated some view about the credibility of a witness or an issue which had not finally been determined. That was not the

present case. Here the apprehension was one of bias through	interest and was said to have been created in a most
convoluted way. The interest was not suggested as financial or arising as Blackburn J said in Reg v Rand (1866) L.R. 1 Q.B. 230 at 284 "from kindred". Rather, it was claimed to
arise from a social or professional acquaintance which can only be described as tenuous. In that respect the present case was somewhat analogous w ~ t h that considered by the High Court In Re Polites ex parte lioyts Corporation Pty. Ltd. (1991) 173 CLR 78. There a relationship of solicitor and client had subsisted two or three years earlier between a Deputy President of the Australian Industrial Relations Commission and a large corporation in the course of which a letter of advice had been written by the erstwhile solicitor to his client. Those circumstances were held not to disqualify the Deputy President from hearing and determining as a member of a Full Bench proceedings to which the corporation was a party. After noting that the circumstances in 1988 which gave rise to the proceedings before the Commission were very different from those which prompted the letter of advice in 1986, Brennan, Gaudron and McHugh JJ in a joint judgment continued, at 91:

"The posrtion in 1986, at least so far as concerned those giving the advlce, was that a new employment situation was about to occur whlch, according to their instructions, was drfferent from the situatron generally obtainrng in the industry. In that context, the advice merely detailed avarlable negotiating options. In particular, it carried no recommendatron as to the wisdom, reasonableness or appropriateness of the course of action indicated, whether generally or ln the lrmlted circumstances in whlch that advrce was given. In the llght of these conslderat~ons and the fact that appointees to the Comm~ssion wrll often have had a close assocratron with parties before, or with Issues to be determ~ned by, the Comm~ssron, rt would not be open to the partres or to a member of the publlc to entertain a reasonable apprehension that, by reason of the adv~ce grven In the qu~te different circumstances of 1986, Mr. Deputy President Polites might not brlng an rmpartial and unpre2ud~ced mind to the assessment

of the prosecutors' conduct in 1988 or to the determ~nat~on of appropriate wages and condrt~ons, whether they be determined retrospectively to 1988 or otherwrse, for employees in Hoyts theatres."

In my view, similar considerations militated against my disqualifying myself from continuing to hear the petition in the present case

Moreover, the interest imputed to me by Counsel for the debtor was said to operate inversely to create a suspicion of bias against his client. By that I mean that the submission on behalf of the debtor was not founded on any perception that my acquaintance with him could have engendered some animus against him. Rather, the apprehension was that, in order to avoid a suspicion of partiality to the debtor which my cordial acquaintance with him might have been regarded as creating, I might make some finding of fact, or exercise some discretion in favour of the Eank to which it would not be entltled on an objective view of the merits.

That hypothesis 1s rejected as fanciful. The issues raised by the petition and the grounds of opposition did not, as I understood them, require any assessment of the credibility of

he debtor. Nor was there otherwise any serious contest on a

question of fact. The scope for the exercise of discretion adversely to the debtor without committing an error which could be corrected on appeal was also small. It is true that Counsel for the debtor sought to support his hypothesis by

pointing to my refusal on the morning of 21 April of his	application for a further adjournment and, in part, his
application for leave to amend his grounds of opposition. However, for reasons which I shall develop, I consider that the claim for disqualification for ostensible bias on the basis argued by the debtor must be evaluated at the time when the judicial officer enters on the hearing and cannot be reinforced or weakened by anything done in the course of the hearing.
I was primarily influenced to reject the debtor's application
by the lateness of its making and the fact that nothing was adduced in evidence, either orally or on affidavit, in support of it. Once he became apprised, as I infer that he did, of my invitation of 14 April 1993, it was incumbent on the debtor to set out with full particulars his perception of my acquaintance with him so as to afford the Bank and the Court an opportunity to consider whether it created a reasonable apprehension that I would not decide the case impartially or without prejudice, thereby satisfying the test restated in R e
LTRL e x p a r t e CJL ( supra) .
The debtor's failure to support hls application by any evidence at all reinforces the impression created by the lack of any response to my invitation of 14 April, that he was content, at the commencement of proceedings on 21 April, for me to hear the petition. There is ample authority to the effect that a litigant who, know~ng of circumstances which
arguably require the d~squalification of a jud~cial oficer, stands by while that judicial officer continues to hear the
matter, cannot subsequently invoke those circumstances in support of a request for disqualification. That is particularly so where the request is made after the judicial officer has made an interlocutory ruling or final determination which LS adverse to that litigant. Thus in
Vakauta v K e l l y (1989) 167 CL2 568 Dawson J observed at 577:

" I t cannot be t h e p o s l t i o n t h a t a p a r t y can wa l t t o see whether t h e

outcome of a case rs favourable to hlm before raising an objectron, the ava~lability of which he was previously aware, on the ground of

bias. See R. v Sussex Justices; Ex parte McCarthy [l9241 1 KB 256, ground of bras can be waived. Even where it rs a questron of the public apprehension of bias, the parties themselves must be competent to warve the ob-~ection. Although justice must manrfestly be seen to be done, where a party, being aware of h ~ s right to ob-~ect, waives that rlght, there will be lrttle danger of the appearance of injustrce. In the case of a crimrnal prosecutron where the public is d~rectly interested In the outcome, it may be d~fferent, but even rn such a case, Isaacs J., in Dickason v Edwards (1910) 10 CLR 243, at p.260, was clearly of the view that a party may walve the objection. He sard: at 259. There can, I thrnk, be no doubt that an objection upon the

"So that the prrncrple seems to me to be thrs - that, if the person whose presence is challenged can fairly be said to be b~ased, erther by reason of his necessary Interest or by reason of some pre-determinatron he has arrrved at rn the course of the case, then he ought not to act unless there is something to relieve hrm from these disqualifications. Even rn a publrc prosecution a party may warve the ob-~ection. One of the strongest examples of thrs is the case of Wakefield Local Board of Health v West Riding and Grimsby Rallway CO (1986) 6 B & S 794 [l22 ER 13861. There the Statute prov~ded that the justices should be drsrnterested partres, but the words were held not necessarrly to prevent warver. A dlstinctron has been drawn between publrc ~udrcial tribunals and prrvate judicial trrbunals, but I am not satrsfied that that rs a sound drstinction."

There is abundant authorrty which establishes, at all events rn crvll cases, that a party may waive hrs r~ght to object on the ground of

bias.	As Hood J sard In Re McCrory; Ex parte Rzvett (1895) 21 VLR 3,
at p.6:

"A lrtigant who knows (as the applicant drd here) that there may be some ob-~ection to the constrtution of the Bench is bound to mention it at once, In fairness both to the magistrate and to the other srde, and even ~f the ob-~ectron be a good one the lltigant cannot afterwards be allowed to complain if with knowledge he remains srlent ..."

See also Reg. v Cheltenham Conunzsszoners (1841) 1 QB 467 [l13 ER 12111; "The Vernon" (1864) 1 QSCR 119; Raven v Burnett (1895) 6 QLJ 166; R. v Byles; Ex parte HOllldge (1912) 108 LT 270; R. v Essex	Justices; Ex parte Perklns [l9271 2 KB 475; In the Marriage of Murphy	and Armstrong (1978) 35 FLR 482; Nickelseekers v Vance [l9851 1 Qd
R.266.

To the authorities collected by his Honour, I add a reference

to R v Lilydale Magistrates' Court; Ex parte Ciccone [l9731 VR
122 where McInerney J observed, at 135:

"For myself, I doubt whether any one test should be regarded as the exclusrve test. Certarnly, if a case of "lymg by" rs made out,

certiorari would be refused. Equally, lf a clear case of election is

made out, that rs, that the applicant knowlng the facts and knowlng what alternatrve courses are open to hrm on those facts, rntentlonally chooses one rather than the other, he wrll be held to that cho~ce (or election). In my view, however, an applicant for certiorari may also be refused relief if it is shown that wrth knowledge of the facts entrtling him to object to a continuance of the legal proceeding, he has not objected but has taken an actlve part in the proceedings right down to judgment. This seems to have been the view taken by Hood J., in Re McCrory; Ex parte Rivett (1895), 21 VLR 3, at p . 6 . "

Even if the debtor's conduct did not amount to waiver in accordance with the principles outlined in the authorities just cited, I considered that the fact of my invitation of 14 April and the debtor's reaction to it would have combined to preclude a hypothetical objective observer, apprised of all the circumstances from reasonably apprehending that I would be prejudiced or partially disposed towards making a sequestration order.

It was for these reasons that I declined to disqualify myself

from continuing to hear and determine the petition.

I certify that this and the

preceding ten (10) pages are a true copy of the reasons for judgment of his Honour Mr Justice Ryan

Associate: J G L ~

Date:  &c( ;jY, ,493

Solicitor for the debtor:	Barbour Arnold & Cousins
Counsel for the debtor:	Mr P Ginnane
Solicitor for the creditor:	Corrs
Counsel for the creditor:	Mr T J McLean