Rustom v Ismail

IN THE SUPREME COURT OF VICTORIA	Not Restricted
AT MELBOURNE COMMON LAW DIVISION
No. 10514 of 2008
SAYED RUSTOM (TRADING AS SNAB	Appellant
HOME IMPROVEMENTS)
V
MOHAMMED ISMAIL	Respondent

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JUDGE:	CAVANOUGH J
WHERE HELD:	Melbourne
DATE OF HEARING:	4 August 2009
DATE OF JUDGMENT:	24 December 2009
CASE MAY BE CITED AS:	Rustom v Ismail
MEDIUM NEUTRAL CITATION:	[2009] VSC 625

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ADMINISTATIVE LAW – Natural justice – Reasonable apprehension of bias – Victorian Civil and Administrative Tribunal – Building case - Prior decision by same Tribunal Member concerning same party – Adverse credibility finding made in prior case – Further comments made at outset of present case reflecting adversely on same party’s credit – Decision set aside and matter remitted for rehearing.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr J R Gurr	Graham Legal
For the Respondent	Mr C G Fairfield	Lawcorp Lawyers

_________________________________________________________________________________
HIS HONOUR:

This is an appeal under s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (“the VCAT Act”) pursuant to leave given by Associate Justice Lansdowne on 2 March 2009.
The appeal is from a decision of the Victorian Civil and Administrative Tribunal (“the Tribunal”) in a proceeding in the Domestic Building List of the Tribunal. The proceeding at the Tribunal arose out of a dispute between the plaintiff as the builder and the defendant as the owner in relation to the building of a residence for the owner. The builder claimed $157,099.76 against the owner under the building contract. The owner counterclaimed for $177,238 against the builder, primarily for rectification costs and liquidated damages.
On 3 December 2008, after a hearing which occupied some 15 hearing days, the Tribunal made an order as follows:

“(1) The applicant [the builder] must pay the respondent [the owner]
$99,363.09.

(2) The question of costs and any further interest is reserved and
either party may apply to the Tribunal for them.”

The builder appeals on what is, in essence, a single ground, namely reasonable apprehension of bias (in the form of pre-judgment), amounting to a failure to comply with the rules of natural justice, contrary to s 98(1)(a) of the VCAT Act and the common law. There is no suggestion that the Tribunal was actually biased against the builder.
Reluctantly, I have come to the conclusion that the decision of the Tribunal must be set aside on the ground of apprehended bias, as the builder claims. I have hesitated before arriving at this conclusion because the Tribunal invested a great deal of time and effort in hearing the claims and the evidence of the parties, took due account of the fact that the builder was not legally represented and produced a detailed and painstaking set of reasons for decision. The prospect of a full or even partial rehearing at the Tribunal is not a happy one. However I am satisfied that the matters relied upon by the builder, in combination if not individually, establish a case of reasonable apprehension of bias on the part of the Tribunal. Although it is common ground that, procedurally, the Tribunal conducted the hearing in a manner that was conspicuously fair to the builder as an unrepresented litigant, the owner has failed in his attempt to persuade me that I should, for that reason, refrain from making a finding of reasonable apprehension of bias.
The builder relies on two things: first, a prior decision of the same senior member (Senior Member Lothian) in a proceeding brought by the builder against a different owner and, second, comments made by Senior Member Lothian on the first day of the proceeding presently in question, including comments about the prior decision.
The plaintiff is registered as a builder under the Domestic Building Contracts Act 1995 (“the Act”). In the previous Tribunal proceeding he had made a claim against a building owner called Dagisthani (“the Dagisthani proceeding”). It was commenced by points of claim filed on 28 May 2007. Because the amount claimed (after the abandonment of a small excess) was not more than $10,000, the Tribunal treated the matter as a small claim. It was heard on 26 October and 5 December 2007. The decision was given on 25 January 2008. That was only about five months prior to the commencement, on 30 June 2008, of the hearing of the present proceeding.
The builder claims that in the Dagisthani proceeding Senior Member Lothian made findings adverse to his credibility. Details of this were given in his comprehensive written outline of submissions filed in this Court.[1] Initially, in the written outline of submissions filed on the owner’s behalf[2], the owner did not dispute this claim. Indeed, he virtually admitted it, in that he submitted that “the fact that the Senior Member had made adverse findings against the plaintiff as to his credit in the Dagisthani proceeding would not lead a reasonable observer to conclude that the Senior Member might have prejudged any of the issues in the proceeding”.[3] I note the reference to “credit”, which, in this context, may be an even stronger word than “credibility”,[4] although it may not always carry the connotation of deliberate lying.[5] The owner’s outline had been prepared by Mr J H Shaw of counsel, who had appeared for the owner before the Tribunal in both proceedings. Mr Shaw’s approach in his written submissions was to confess and avoid. He submitted that the “adverse findings” in the Dagisthani proceeding “were inevitable given the circumstances of that proceeding”.[6] In that regard, he sought to draw an analogy with the approach of Beach J in Kay v Legal Profession Tribunal[7]. I will return to that matter. New counsel, Mr Fairfield, appeared for the owner before me. He took a very different path. He submitted that the Tribunal had not made any adverse credibility finding in respect of the builder in the Dagisthani proceeding. Rather, he submitted, the Tribunal had merely weighed up the competing evidence relating to the various items in dispute in that proceeding and had arrived at conclusions accordingly, uninfluenced by questions of credit.[8]
[1]              Dated 27 April 2009.
[2]              Filed 11 May 2009.
[3]              Defendant’s Outline of Submissions, para 21. See also para 2 which refers to the builder having submitted that Senior Member Lothian had “made findings adverse to him with respect to his credit” in the earlier proceeding. Neither in paragraph 2 nor elsewhere in the submission is there any quibble with that description of the Tribunal’s findings.
[4]              See and compare Livesey v New South Wales Bar Association (1983) 151 CLR 288 at 293 and Vakuata v Kelly (1989) 167 CLR 568 at 571.
[5]              Compare Smith v New South Wales Bar Association (1992) 176 CLR 256 at 268-269.
[6]              Para 16.
[7] [2000] VSC 463 at [24], [27].
[8]              Transcript, 59-60.
I do not accept Mr Fairfield’s submission in this regard. In my view the Tribunal did make adverse findings about the credit of the builder in the Dagisthani proceeding.
Most of the claims in the Dagisthani proceeding turned on oral evidence as to alleged oral variations of an oral building contract. Because of the absence of writing, if the builder was to recover anything he needed to persuade the Tribunal that there were “exceptional circumstances” or that he would suffer “exceptional or significant hardship”: the Act, s 38(6). That, in turn, meant, generally speaking, that the builder needed to persuade the Tribunal that there was some agreement about each variation.[9] There were 6 alleged variations in dispute. It is true that the builder achieved total or partial success in relation to the second, third and fourth alleged variations. But he failed completely in relation to the first, fifth and sixth alleged variations. The Tribunal was apparently unimpressed by Mr Rustom and by Mr Dagisthani. Mr Rustom, as the builder, only succeeded where the alleged conversation on which he relied was corroborated by another witness, albeit a witness who had worked with him. That occurred only in relation to the second, third and fourth variations. The Tribunal put it as follows (my emphasis)[10]:
[9] See paras [23] and [25] of the Tribunal’s reasons in the Dagisthani proceeding at CB 173, applying Pratley Constructions v Racine [2004] VCAT 2035.
[10] Paras [28]-[29].

“28

Mr Bulos Saad, a carpenter who works with Mr Rustom, gave evidence for him. Mr Saad impressed me as a careful and truthful witness and his evidence is the best evidence in the absence of credible evidence from the parties. He gave evidence about the second, third, fourth and fifth variations only. Of the fifth, he said he did not hear any conversation. Of the second, third and fourth, he recalled that Mr Dagisthani asked for each variation and agreed to pay the cost, which I take to mean the reasonable cost of undertaking the variation. Where Mr Dagisthani asked for a variation, received the benefit of it and agreed to pay something for it, it is not unfair that he should pay the reasonable cost.

29 I make no allowance for the first, fifth or sixth variations.”

In that passage, the Tribunal spoke of an absence of “credible” evidence from the parties (including the builder) and in that regard contrasted the parties with Mr Saad, who was found to be “a careful and truthful witness”. I do not accept Mr Fairfield’s submission that the Tribunal had merely found the builder’s evidence to be unreliable, for some (unidentified) reason unconnected with his credit.
Overall, the apparent import of the Tribunal’s observations and findings in the Dagisthani proceeding is not diminished by what was said by the Tribunal in the later (Ismail) proceeding. If anything, it is confirmed.
Mr Rustom had legal representation during the interlocutory stages of the Ismail proceeding. However he had none at the hearing thereof. Arabic is his first language. He has limited English. His wife, Mrs Rustom, accompanied him at the hearing. An interpreter had been arranged, but was late arriving. Near the very beginning of the hearing Mr Rustom said in English to the Tribunal that he wanted to raise an “objection”. His wife then took over as his temporary, informal interpreter. She said (for him):[11]
[11] CB 337.
“You have heard a case of mine beforehand. I was not happy with your decision of that case because you believed his witness Boulos Saad and not Mr Rustom.”
The Senior Member responded:
“Okay, I believed the other side. Sure.”
Mr Rustom then said:
“And the Mr [Dagisthani], if you recall, ma’am.”
The Tribunal replied:
“Yes. … .”
Discussion then ensued about the seriousness with which the Rustoms, as Maronite Christians, viewed swearing on the Bible. The Senior Member then said:
“… Let me rephrase what I think you’re saying and then we will take it from there. So you’re saying that what you do on earth has the importance as if you were doing it in Heaven and so you’re concerned that I didn’t believe, or that I put less weight on your version of the facts that were before me last time, than this time.

Mr RUSTOM: Yes.
SENIOR MEMBER: Is there anything else you want to say and
then I will talk to you about that?
Mr RUSTOM: I do ask of you, ma’am, that when you make your decision, that decision is not that of bias or prejudice, not to me only, but to the other party as well.”

At this point the interpreter arrived and was affirmed. Then the Senior Member ruled on Mr Rustom’s “objection”. She said[12]:
“Mr Rustom, when I saw that this matter was listed before me I considered whether somebody else should hear the case because you have been before me on another occasion and on that occasion I preferred most but not all of the other party’s evidence to yours. However I do not believe that I am prejudiced against you. I believe that at the moment I will be giving the same weight to your evidence as I will be giving to the evidence of Mr Ismail and also of Mr Po. Some very strange things have happened in this case. It seems that there have been significant differences between the contract drawings and the building as built. I have a problem with that as I always do with any builder but I also have a problem with payments made in cash. Payments made in cash are usually made to avoid the involvement of the Taxation Department and if a person expects to drive on the roads for an ambulance to come when they are unwell or for the police to come when they have a problem they pay their taxes. I also have a significant problem with the fact that there was a deal between the architect and Mr Rustom that money should be paid by the builder to the architect. It smacks of corruption. So let me tell you, gentlemen, you are all starting in a position where you are going to have to convince me that what you are saying is true. I start with the assumption that everybody is trying to tell me the truth but there is a difference between deliberately lying and being inaccurate. As time goes by we become more certain and less reliable about things that have happened in the past so I am not going to step down from this case, I am going to hear it.”
[12] CB 340-341.

In the first of the interchanges with the Rustoms referred to above, Senior Member Lothian seems to acknowledge that she had not believed Mr Rustom on the previous occasion, although it is possible that she was merely seeking to paraphrase the Rustoms’ complaint. Later, she plainly was trying to paraphrase the Rustoms’ submissions when she said: “… so you’re concerned that I didn’t believe, or that I put less weight on your version of the facts that were before me last time …”. However, to that stage at least, the Senior Member had not done what one would expect her to have done if, in the earlier case, she had not actually disbelieved Mr Rustom. The Rustoms were expressing concern to her about that very thing. The Senior Member may well have been able to allay those concerns by stating that she had not rejected Mr Rustom’s credit, or that she had not actually disbelieved him, on the prior occasion. The Senior Member did not do that. She did make a reference to putting “less weight” on Mr Rustom’s version, but only in an equivocal way.
In the long passage set out above the Senior Member compounds the problem, in my view. First, she acknowledges that she herself had considered standing down from the hearing, even before any suggestion to that effect was made by the Rustoms. She had certainly not forgotten the earlier case. True, she speaks of having (merely) “preferred” (some of) the other party’s evidence on the prior occasion, rather than of having rejected the credit of Mr Rustom on that occasion.[13] However, that reference needs to be read in the context of all that had gone before (including the language of the reasons published in the Dagisthani proceeding) and all that came afterwards.
[13] Again, compare Smith v New South Wales Bar Association (1992) 176 CLR 256 at 268-269.
The very next thing that the Senior Member said was that she did not believe that she was prejudiced against Mr Rustom. Of course, that was not a correct statement of the applicable test for disqualification on the ground of a reasonable apprehension of bias. It was much too favourable to the Tribunal’s position. Generally speaking, the test applicable to the Tribunal[14] is the same as that applicable to a Court or a judge: see City of St Kilda v Evindon Pty Ltd[15]. The test is as follows[16]:
“Where, in the absence of any suggestion of actual bias, a question arises as to the independence or impartiality of a judge (or other judicial officer or juror), the governing principle is that, subject to qualifications relating to waiver or necessity, a judge is disqualified if a fair minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide. That principle gives effect to the requirement that justice should both be done and be seen to be done, a requirement which reflects the fundamental importance of the principle that the tribunal be independent and impartial.”
[14] In some circumstances, and for some purposes, the Tribunal has been held to be a “court”, especially in its Civil Division: see Pizer, Victorian Administrative Law, para [VCAT 8.60].
[15] [1990] VR 762. See also Justice Stuart Morris: “Apprehension of Bias”, a paper delivered at the Australasian Conference of Planning and Environment Courts and Tribunals on 14 September 2006 at p 7.
[16] Ebner v The Official Trustee in Bankruptcy (2000) 205 CLR 337 at [6]. See also Morris, op cit, at pp 1-2.
One of the grounds included in the builder’s notice of appeal is to the effect that the Senior Member erred by failing to apply this test. The owner concedes that the builder, having been unrepresented, should be taken to have duly made an application to the Senior Member that she disqualify herself on the ground of reasonable apprehension of bias. Nor does the owner raise any defence of waiver, notwithstanding that the proceeding continued for some 15 days after the Senior Member’s ruling without further reference to the matter.[17] However, it became common ground at the hearing that it would not be enough for the builder to show that the Tribunal had failed to apply the correct test. The question whether a decision-maker is in breach of the rules of natural justice does not turn on the decision-maker’s own assessment of the circumstances, but rather on the assessment made by the appellate or supervisory court. Nevertheless, it is unfortunate that the Tribunal did not ask itself the correct question. Had it done so, it may have thrown more light on the issues now arising.[18] In any event, the fact that the Tribunal felt moved to ask itself whether it was actually prejudiced against the builder may be thought to strengthen, and certainly does not weaken, the builder’s position on the present application.
[17] Cf Vakuata v Kelly (1989) 167 CLR 568 at 587-588 per Toohey J (with whom Brennan, Deane and Gaudron JJ agreed on this point).
[18] Compare Johnson v Johnson (2000) 201 CLR 488 at 491-492 [8] and 494 [14].
Next, the Senior Member said: “I believe at the moment that I will be giving the same weight to your evidence as I will be giving to the evidence of Mr Ismail and also of Mr Po”. Mr Po was a person who described himself as an architect, but who was (as the Tribunal later found) an architectural draftsman. His evidence was likely to be very important, because the builder alleged that Mr Po had orally authorised, on behalf of the owner, all or most of the departures from the contract drawings. A witness statement by Mr Po had been filed on behalf of the owner. Indeed, quite extensive pleadings, particulars and witness statements had been filed on both sides in advance of the hearing. The Tribunal had apparently read and considered a great deal of this material, if not all of it, before the hearing began. That must be so, having regard to the rest of the comments made by the Senior Member set out above. The builder fastens on those comments, and submits that the Senior Member, far from intending to convey that she would be giving full weight to the builder’s evidence, meant that, at least as matters then stood, she would be giving it little or no weight. I agree with the builder’s submission in this regard. The Senior Member observed that some “very strange things” had happened in the case. She had “a problem” with the “significant differences” between the contract drawings and the building as built. She had “a problem” with payments made in cash. (This included a reference to payments made in cash by Mr Ismail to Mr Rustom). She observed that cash payments are “usually” made to avoid tax, and she spoke deprecatingly about tax avoiders. She had “a significant problem” with the fact that there was “a deal” between Mr Po and the builder under which money would be paid to Mr Po. This, she said, “smacks of corruption”. Her very next sentence begins with the word “So”, thereby indicating a link with what she had just said, including her reference to corruption. “So let me tell you gentlemen”, she said, “you are all [comprising, I would infer, the builder, Mr Po and Mr Ismail] starting in a position where you are going to have to convince me that what you are saying is true”. (My emphasis).

These were very strong and very colourful comments. They were made before the Senior Member had heard a word of evidence on oath or affirmation or any cross- examination or any submissions. Their significance is heightened because, although there was a substantial quantity of documentary matters before the Tribunal, there was a dearth of relevant documentary evidence on the critical questions (alleged authorisation). As I have mentioned, the builder was relying heavily on alleged oral authorisations of departures from the contract drawings.
It is true that the Senior Member immediately went on to say: “I start with the assumption that everybody is trying to tell me the truth but there is a difference between deliberately lying and being inaccurate. As time goes by we become more certain and less reliable about things that have happened … “. It is not easy to reconcile these remarks with the Senior Member’s previous observations, especially her prior reference to “very strange things”, cash payments, tax avoidance, a deal that “smacks of corruption”, and a starting position where the parties needed to convince her that what they were saying was true. In any event, at best, the Senior Member was indicating that in her view, at least at that time, the builder was a person of little or no credibility, albeit that his lack of credibility may not have been due to deliberate lying but rather to his having convinced himself, over time, of the truth of untrue propositions.
It is no answer that the Senior Member had the same view of Mr Ismail and Mr Po. In R v Watson; ex parte Armstrong[19], Barwick CJ, Gibbs, Stephen and Mason JJ said:
“It was said that there was no bias because the judge had formed an equal distrust of both parties. The formation of a preconceived opinion that neither party is worthy of belief amounts to bias in the sense in which that word is used in a number of the authorities already cited. To form such an opinion is to predetermine one of the issues in the case, and may operate unfairly against one party, even though both are discredited. A prejudice against the credit of both parties will not necessarily damage both parties equally. It will prove more damaging to that party who wishes to establish a fact by means of his or her own unsupported evidence. A party who believes, on reasonable grounds, that the judge has decided, in advance, to disbelieve her evidence cannot have confidence in the result of the proceedings, even if the judge has decided to reject the evidence of her adversary as well.”
[19] (1976) 136 CLR 248 at 265; cf Johnson v Johnson (2000) 201 CLR 488.
It is true that the relevant ground of disqualification is a reasonable apprehension that the judicial officer will not decide the case impartially or without prejudice, rather than that he or she will decide the case adversely to one party.[20] The mere fact that previous decisions of a judicial officer on issues of fact or law may generate an expectation that he or she is likely to decide issues in a particular case adversely to one of the parties is not of itself an acceptable basis for inferring that there is a reasonable apprehension that he or she will approach the issues in the case otherwise than with an impartial or unprejudiced mind.[21]
[20] Re J.R.L; Ex parte C.J.L. (1986) 161 CLR 342 at 352 per Mason J.
[21] Ibid. See also Gascor v Elliott [1997] 1 VR 332 at 345, 347, 351; Kay v Legal Profession Tribunal (2000) VSC 463; State of Victoria v Bradto [2005] VCAT 2512 (Morris J, President) at [25]; but compare Antoun v R [2006] 224 ALR 51 at [35] per Kirby J.
However, the authorities indicate that a finding in a separate, concluded, prior case adverse to the credibility of a party or relevant witness may have particular significance for the question whether the judicial officer should sit. Many of the cases were collected by Mahoney JA (with whom Meagher JA agreed) in Australian National Industries Ltd v Spedley Securities Ltd (In Liq)[22]:
[22] (1992) 26 NSWLR 411 at 441-442.

“(d) ‘The effect of previous decisions of fact or of credibility’:

The preceding considerations go to the criteria by reference to which the court is to decide, in an instant case, whether there will be the appearance and the apprehension of partiality or the like. However, in respect of some cases the High Court has indicated circumstances which will, ‘necessity and the extraordinary case apart’, give rise to such an appearance and apprehension.

In the Livesey case, the issue of pre-judgment arose because, in ‘the Bacon case’ (Re B [1981] 2 NSWLR 372) (151 CLR at 293); two judges had found that a witness who was apt to be called in the Livesey case ‘lacked both credit and credibility as a witness’ (at 295). The High Court held that for those judges to hear the Livesey case would give rise to the relevant apprehension. The court had decided, in the Bacon case, a matter which was a ‘central issue’ in the Livesey case, viz, ‘whether the money which Ms Bacon lodged as bail was her own money’ and whether Livesey knew it was not (at 300):
In this context, the court (at 299-300) said:
‘Necessity and the extraordinary case (see, eg, Ex parte Lewin; Re Ward [1964] NSWR 446 at 447) make it impossible to lay down an inflexible rule; each case must be determined by reference to its particular circumstances. It is, however, apparent that, in a case such as the present where it is not suggested that there is any overriding consideration of necessity, special circumstances or consent of the parties, a fair-minded observer might entertain a reasonable apprehension of bias by reason of pre-judgment if a judge sits to hear a case at first instance after he has, in a previous case, expressed clear views either upon a question of fact which constitutes a live and significant issue in the subsequent case or about the credit of a witness whose evidence is of significance on such a question of fact. The consideration that the relevant question of fact may be conceded or that the relevant person may not be called as a witness if the particular judge sits would not, of course, avoid the appearance of bias. To the contrary, it would underline the need for the judge to refrain from sitting.”

The court held that, notwithstanding that it was not submitted that either of the judges ‘was actually biased or prejudiced in hearing or deciding the proceedings against the appellant’ (at 293) they must not sit.
In R v Watson; Ex parte Armstrong (at 264), four members of the court, in the majority judgment, said:
‘As the cases show, there are some matters on which a judge may have preconceived opinions, and yet be qualified to sit, but speaking generally the credit of an essential witness, where the case may turn on credibility, is not one of them’.

In the Renaud case (at 372), Dawson J distinguished between an apprehension of bias arising out of the failure to hear a party and bias resulting from “preconceptions”. His Honour said:
‘… It seems to me to follow that it must also be possible to remove an apprehension of bias on the part of a judge which might otherwise arise out of the failure to hear a party. After all, that kind of bias is not bias through interest or preconceptions existing independently of the case. Suspicion of bias of the latter kind, where there are grounds for it, may well be ineradicable. See Reg v Australian Stevedoring Industry Board; Ex parte Melbourne Stevedoring Co Pty Ltd (1953) 88 CLR 100 at 116’.

In Vakauta v Kelly (at 575), Dawson J again referred to the appearance of bias as the result of “preconceptions”: in that case his Honour was referring to ‘the preconceived views which the trial judge had about the defendant’s witnesses and the real defendant, the GIO’ (at 575). His Honour there said (at 575-576):
‘… In Re JRL; Ex parte CJL (1986) 161 CLR 342 at 372, I expressed the view that suspicion of bias may well be ineradicable where the bias is thought to result from preconceptions existing independently of the case. That is so, but it is not to say that bias is inevitably displayed merely because a judge holds preconceptions or reveals that he does’.

I have referred to these matters in order to make clear the view taken by the High Court of the effect of previous decisions of fact and credibility in the application of the pre-judgment principle. With only such reservations as were indicated in, for example, the Livesey case (at 299-300) it is, in my opinion, proper to approach a question of this kind upon the basis that, where decisions of fact or credibility have been made, the pre- judgment principle will apply unless it appears that there is a ‘necessity’ for the judge to sit or that the case is ‘an extraordinary case” or one which involves ‘special circumstances’.”

In Spedley Mahoney JA was in a majority of 3:2. In R v Masters, Richards and Wunderlich[23], the New South Wales Court of Criminal Appeal declined to follow Spedley, at least in relation to the impact of prior rulings within the same criminal proceeding. Aspects of the various judgments in Spedley were considered by the Victorian Court of Appeal in Rozenes v His Honour Judge Kelly[24] and in Gascor v Elliott[25]. In Rozenes, the Victorian Court of Appeal expressed the view that the dissension within the NSW Court of Appeal in Spedley and from it in Masters and in another New South Wales case “depended not so much on principle as on an attitude towards the facts”.
[23] (1992) 26 NSWLR 450.
[24] (1996) 1 VR 320, esp at 332.
[25] [1997] 1 VR 332, esp at 342, 343 and 348.
In Gascor, Ormiston JA said[26]:
“As the differences of opinion by the members of the Court of Appeal in [Spedley] show, what kind of findings will lead to relevant apprehension of bias must depend upon their significance and nature. Findings as to credibility or ultimate findings as to alleged misbehaviour may more easily be seen as leading to disqualification than incidental findings of fact (and certainly law) or findings which depend on expert evidence and which may be common to many disputes”.
There were several other references in Gascor to the significance of the absence of any prior findings as to credibility.[27] In Southern Equities Corporation Ltd (in Liq) v Bond[28], Olsson J said:
“As Mahoney JA pointed out in Spedley (at 442), a previous decision as to an important fact or bearing on credibility will normally, if not inevitably, create a relevant apprehension of pre-judgment.”
In the same case, Bleby J made similar observations[29], by reference to Livesey and
[26] [2007] 1 VR 332 at 348.
[27] At 344, 345 and 349.
[28] (2000) 78 SASR 339 at 351.
[29] At 151.
Spedley.
I have already expressed my view that in the Dagisthani proceeding Senior Member Lothian made adverse findings in respect of the builder’s credibility. Those findings could easily be read by the fair-minded lay observer as findings of untruthfulness. The Senior Member’s comments on the opening day of the Ismail proceeding may well have confirmed such an impression in the observer’s mind. And those comments went further. They introduced new criticisms of the builder. Again, the spectre of dishonesty was raised. The comments were forcefully expressed. If, by her concluding observations on that occasion (to which I have referred), the Senior Member mitigated the impact of her comments, she did so only slightly. The case remains one in which, to use the language of Livesey v New South Wales Bar Association quoted above[30], the Senior Member had “expressed clear views … about the credit of a witness whose evidence [was] of significance on [a question of fact which was a live and significant issue in the subsequent case].”
[30] (1983) 151 CLR 288 at 299-300. Quoted in Spedley at 441.
If the builder’s present application had been made by reference only to the particular abovequoted comments of the Senior Member that were based on her reading of the current Tribunal file, then the owner may have had more room to argue that there was insufficient indication that the Senior Member had arrived at a settled or concluded view as to the builder’s credibility, as distinct from a view that was open to evidence, argument and revision.[31] However, that is not the case. The combination of the prior finding and the subsequent comments is a powerful one, and leaves very little, if any, room for such an argument.
[31] See and compare Re Watson; ex parte Armstrong (1976) 136 CLR 248 at 264; Johnson v Johnson (2000) 201 CLR 488 at 493 [13]-494 [14] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ, and at 508 [53]-509 [55] per Kirby J.
I do not accept the owner’s suggestion that the prior finding as to the builder’s credibility was inevitable. The evidence from the Dagisthani proceeding is not part of the evidence before me. In any event, it seems that in the Dagisthani proceeding it was principally “oath against oath”. Hence there is no proper analogy with Kay v Legal Profession Tribunal[32] in which Beach J was able to say that the relevant earlier finding by the Registrar of the Legal Profession Tribunal was inevitable, given that it had been based on facts that could not sensibly have been disputed by the legal practitioner.
[32] [2000] VSC 463.
The builder did submit, albeit faintly, that the Domestic Building List of the Tribunal was a specialist or expert list with limited personnel and that the prior decision and the relevant comments of the Senior Member should be accorded less significance for that reason. However the builder did not produce any evidence relevant to this point. Pizer’s Victorian Administrative Law indicates[33] that at present there are at least 8 members of the Tribunal (including Deputy Presidents, Senior Members and Sessional Members) who are designated as able to sit in the Domestic Building List. The builder has not established any case of necessity.
[33] At [V 480].
In the owner’s written submissions in this Court prepared by Mr Shaw, it was not suggested that the builder’s credibility had not been important to the builder’s claim or to its outcome in the Ismail proceeding, although it was submitted that, on a remittal, there could not possibly be a different outcome with respect to the owner’s counterclaim for defective and incomplete work. However, at the hearing before me, Mr Fairfield submitted initially and from time to time that the Senior Member’s decision did not turn on credit at all.[34] However he was not able to support that submission. At best, he was able to identify some findings by the Tribunal which involved acceptance of the builder’s evidence. Even they were few and far between, and on at least one such occasion the builder’s evidence had been uncontradicted.[35] The builder’s counsel, Mr Gurr, had previously identified 5 or 6 examples, some involving large items, where the Senior Member had rejected the builder’s evidence, essentially on the basis of lack of credit. I discussed these with Mr Fairfield, but he was unable to re-characterise them successfully or to explain them away in a satisfactory fashion. Ultimately Mr Fairfield contented himself by submitting that credit “was of minimal significance in the overall scheme”.[36] However, to the contrary, I was satisfied by Mr Gurr’s examples that credit (including, in particular, the builder’s credit) was of great significance in relation to major parts of both the claim and the counterclaim.
[34]             Transcript, 70, 90-91, 101, 102.
[35]             See the discussion between Bench and Bar at transcript 95-96.
[36]             Transcript, 104.
As indicated above, the owner submitted at the hearing (though not in his prior written submissions) that a finding of reasonable apprehension of bias on the part of the Senior Member should not be made because of the extensive steps taken by her to assist the builder, as an unrepresented litigant, in the presentation of his case and because of the careful and painstaking nature of the Tribunal’s written reasons. It was common ground that the Senior Member had acted in those ways. Further, I accept that I may take into account events occurring after the conduct complained of, including the terms of the Tribunal’s decision and reasons, in coming to a judgment as to whether the decision of the Tribunal was invalidated by a reasonable apprehension of bias.[37] However, Mr Fairfield was unable to refer me to any case in which it has been held that that subsequent conspicuously fair procedures or a particularly careful set of reasons had dispelled, or could dispel, what would otherwise have amounted to a reasonable apprehension of bias in the form of prejudgment. Nor have my researches found any such case. In any event, in the present case, I am satisfied that the fair-minded lay observer would retain a reasonable apprehension of bias notwithstanding the matters now relied upon. The Tribunal was, of course, obliged to take considerable pains to assist Mr Rustom as an unrepresented litigant regardless of the Tribunal’s prior conduct.[38] Lengthy and detailed sets of reasons are not unusual in hard fought building cases. Moreover, consistently with the putative reasonable apprehension of bias, the Tribunal’s reasons showed that the Tribunal did go on to reject the builder’s evidence on numerous major issues.
[37] See Vakuata v Kelly (1989) 167 CLR 568 at 573-574, 588; Johnson v Johnson (2000) 201 CLR 488, at 494 [14].
[38] See Tomasevic v Travaglini (2007) 17 VR 100.
I mentioned above that in the owner’s written submissions it had been asserted that the owner’s counterclaim should be treated differently from the builder’s claim upon any remittal. In particular, it was submitted that the owner’s counterclaim had been based on two expert reports of a Mr Lees and that the plaintiff had not called any expert evidence to contradict Mr Lee’s reports. However, at the hearing before me, Mr Fairfield did not press this argument. He could hardly do so, because substantial parts of the counterclaim (as well as of the builder’s claim) clearly depended on the acceptance or rejection of the builder’s assertions that his departures from the contract drawings were authorised by Mr Po as the owner’s agent. Ultimately, Mr Fairfield expressly declined to hive off particular parts of the claim or of the counterclaim as not depending on credit.[39] This was plainly not a case where the result was bound to be the same irrespective of any view formed by the Tribunal as to the builder’s credit.[40]
[39] Transcript 101.
[40] Cf Stead v State Government Insurance Commission (1986) 161 CLR 141; Ucar v Nylex Industrial Products (2007) 17 VR 452 at 505-506 [33]-[36], 514-521 [59]-[80].
After discussion, it became common ground that, if the decision were to be set aside and the matter remitted to the Tribunal, the Tribunal should be left free to decide whether or not to admit further evidence.
For the reasons I have given, I consider that the Tribunal’s decision should be set aside and the matter remitted to the Tribunal, differently constituted, for rehearing and re-determination.
The respondent (Mr Ismail) must pay the costs of the appellant (Mr Rustom) of this appeal. A certificate under the Appeal Costs Act 1998 will be granted to Mr Ismail.

“(1)	The applicant [the builder] must pay the respondent [the owner] $99,363.09.
(2)	The question of costs and any further interest is reserved and either party may apply to the Tribunal for them.”

Mr RUSTOM:	Yes.
SENIOR MEMBER:	Is there anything else you want to say and

“(d)	‘The effect of previous decisions of fact or of credibility’:
The preceding considerations go to the criteria by reference to which the court is to decide, in an instant case, whether there will be the appearance and the apprehension of partiality or the like. However, in respect of some cases the High Court has indicated circumstances which will, ‘necessity and the extraordinary case apart’, give rise to such an appearance and apprehension.
In the Livesey case, the issue of pre-judgment arose because, in ‘the Bacon case’ (Re B [1981] 2 NSWLR 372) (151 CLR at 293); two judges had found that a witness who was apt to be called in the Livesey case ‘lacked both credit and credibility as a witness’ (at 295). The High Court held that for those judges to hear the Livesey case would give rise to the relevant apprehension. The court had decided, in the Bacon case, a matter which was a ‘central issue’ in the Livesey case, viz, ‘whether the money which Ms Bacon lodged as bail was her own money’ and whether Livesey knew it was not (at 300):
In this context, the court (at 299-300) said:

[2009] VSC 625

24 December 2009