S and R Investments Pty Ltd v The Minister for Planning

[2001] WASC 255

S & R INVESTMENTS PTY LTD -v- THE MINISTER FOR PLANNING [2001] WASC 255

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2001] WASC 255
Case No:	CIV:1710/1997	Heard:	4, 6 & 17 SEPTEMBER 2001
Coram:	HASLUCK J	Delivered:	18/09/01
No of pages:	22	Judgment Part:	1 of 1
Result:	Application allowed
Category:	B
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Parties:	S & R INVESTMENTS PTY LTD (ACN 008 698 351) THE MINISTER FOR PLANNING PATRICK JAMES DUFFY CHRISS LUCAS KOUNIS THE MINISTER FOR TOWN PLANNING SERAFINO GALIPO MARIA FLORA GALIPO MANUELA CHICCA SABINA CHICCA
Catchwords:	Land acquisition Compensation claim Application to disqualify trial Judge Association of trial Judge while practising as a barrister with a previous claim by a third party Third party's claim part of comparable sales evidence bearing upon the claim presently before the Court Relevant legal principles Reasonable apprehension of bias test
Legislation:	Land Acquisition and Public Works Act 1902 Public Works Act 1902
Case References:	Ebner v Official Trustee [2000] HCA 63 Johnson v Johnson [2000] HCA 48 Livesey v The New South Wales Bar Association (1983) 151 CLR 288 Locobail (UK) Ltd v Bayfield Properties Ltd [2000] 2 WLR 870 Re Colina & Anor; Ex parte Torney [1999] HCR 57; (1999) 200 CLR 386 Re JRL; Ex parte CJL (1986) 161 CLR 342 Re Polites; Ex parte Hoyts Corporation Pty Ltd (No 2) (1991) 173 CLR 78 Webb v The Queen (1994) 181 CLR 41 Re Media, Entertainment & Arts Alliance; Ex parte Hoyts Corporation Pty Ltd (1994) 68 ALJR 179

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA CITATION : S & R INVESTMENTS PTY LTD -v- THE MINISTER FOR PLANNING [2001] WASC 255 CORAM : HASLUCK J HEARD : 4, 6 & 17 SEPTEMBER 2001 DELIVERED : 18 SEPTEMBER 2001 FILE NO/S : CIV 1710 of 1997 BETWEEN : S & R INVESTMENTS PTY LTD (ACN 008 698 351)

Plaintiff

AND

THE MINISTER FOR PLANNING
Defendant

FILE NO/S : CIV 1711 of 1997 BETWEEN : PATRICK JAMES DUFFY

Plaintiff

AND

THE MINISTER FOR PLANNING
Defendant

FILE NO/S : CIV 1712 of 1997 BETWEEN : CHRISS LUCAS KOUNIS

Plaintiff

AND

THE MINISTER FOR TOWN PLANNING
Defendant

(Page 2)
FILE NO/S : CIV 1713 of 1997 BETWEEN : SERAFINO GALIPO

MARIA FLORA GALIPO
MANUELA CHICCA
SABINA CHICCA
Plaintiffs

AND

THE MINISTER FOR PLANNING
Defendant

Catchwords:

Land acquisition - Compensation claim - Application to disqualify trial Judge - Association of trial Judge while practising as a barrister with a previous claim by a third party - Third party's claim part of comparable sales evidence bearing upon the claim presently before the Court - Relevant legal principles - Reasonable apprehension of bias test

Legislation:

Land Acquisition and Public Works Act 1902

Public Works Act 1902

Result:

Application allowed

(Page 3)

Category: B

Representation:

CIV 1710 of 1997

Counsel:

Plaintiff : Mr C L Caine
Defendant : Mr G T W Tannin

Solicitors:

Plaintiff : Corrin Caine
Defendant : State Crown Solicitor

CIV 1711 of 1997

Counsel:

Plaintiff : Mr C L Caine
Defendant : Mr G T W Tannin

Solicitors:

Plaintiff : Corrin Caine
Defendant : State Crown Solicitor

CIV 1712 of 1997

Counsel:

Plaintiff : Mr C L Caine
Defendant : Mr G T W Tannin

Solicitors:

Plaintiff : Corrin Caine
Defendant : State Crown Solicitor

(Page 4)

CIV 1713 of 1997

Counsel:

Plaintiffs : Mr C L Caine
Defendant : Mr G T W Tannin

Solicitors:

Plaintiffs : Corrin Caine
Defendant : State Crown Solicitor

Case(s) referred to in judgment(s):

Ebner v Official Trustee [2000] HCA 63
Johnson v Johnson [2000] HCA 48
Livesey v The New South Wales Bar Association (1983) 151 CLR 288
Locobail (UK) Ltd v Bayfield Properties Ltd [2000] 2 WLR 870
Re Colina & Anor; Ex parte Torney [1999] HCR 57; (1999) 200 CLR 386
Re JRL; Ex parte CJL (1986) 161 CLR 342
Re Polites; Ex parte Hoyts Corporation Pty Ltd (No 2) (1991) 173 CLR 78
Webb v The Queen (1994) 181 CLR 41

Case(s) also cited:

Re Media, Entertainment & Arts Alliance; Ex parte Hoyts Corporation Pty Ltd (1994) 68 ALJR 179

(Page 5)

1 HASLUCK J: This is an application by the defendant, the Minister for Planning, in respect of various claims for compensation arising out of land being compulsorily taken for public works pursuant to s 17 of the Public Works Act 1902, now the Land Acquisition and Public Works Act 1902 ("the Public Works Act").

2 As a consequence of previous orders and directions, the trials of these four actions were to be heard together. In accordance with the usual processes of the court, the matters were entered for trial and in due course they were listed for hearing for a trial to commence on Wednesday, 3 October 2001. I was appointed to preside at the trial and this led to an application being made by the parties for directions concerning the manner in which the trial was to be conducted. The proposed directions were largely concerned with matters of the usual kind including delivery of an agreed bundle of documents before trial and an exchange of witness statements.

3 The application for pre-trial directions came on for hearing on Tuesday, 4 September 2001, that is to say, some weeks prior to the listed trial date. In the course of discussion concerning the exchange of the reports of expert witnesses, an issue arose which subsequently prompted counsel for the defendant to take further instructions and then to make the application which is now before me, that is to say, an application that I should disqualify myself from hearing the matter as the trial Judge.

4 The parties were directed to file and serve written submissions relevant to the application. The application was then heard on Monday, 17 September 2001, that is to say, two weeks prior to the listed trial date.

5 In order to understand the basis for the application that the listed trial Judge disqualify himself from hearing the matter, it is necessary to say a few words about the nature of the litigation.

6 I will use as a convenient point of reference the pleadings in the matter of Patrick James Duffy v The Minister for Planning, CIV 1711 of 1997. Different properties are involved in the other cases, but it seems that the issues in each case are essentially the same.

7 It appears from the statement of claim in the Duffy action that the plaintiff is the registered proprietor of certain pieces of land in the metropolitan area of Perth. The plaintiffs in the related actions are proprietors of the land in the same vicinity.

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8 I understand that on 9 August 1963, Mr Duffy's land was reserved by the defendant as the Minister for Planning for the purpose of a controlled access highway. Over 30 years later, the land was compulsorily taken for public works pursuant to provisions of the Public Works Act. I understand that the resumption was effected in the course of a programme of resumption in order to construct what has been called the Northbridge tunnel. The land is now vested in the Western Australian Planning Commission and the various plaintiffs, including Mr Duffy, are advancing a claim for compensation pursuant to provisions of the Public Works Act.

9 Claims of this kind obviously bring into issue the question of what value should be attributed to the land the subject of the resumption. Each party intends to adduce evidence from land valuers and I understand that the reports of these valuers will draw attention to comparable sales evidence and to the outcome of other compensation claims in respect of land in the vicinity of the freeway.

10 It was common ground at the hearing before me that the valuers on each side will refer to the settlement of an inchoate claim for compensation advanced by the proprietor of land in the vicinity of the freeway known as the Aberdeen Hotel, being a property owned by Burundi Holdings Pty Ltd at the time the claim for compensation was settled in November 1995. The Aberdeen Hotel abutted the rear of the Duffy property, being the property the subject of the present action.

11 The Burundi/Aberdeen claim was settled in this way. The road reservation affected the rear portion of the subject land. Throughout 1995 valuers for the land owner and the Main Roads Department negotiated with a view to determining the market value of the affected land and the value of the subject property as a whole. On 30 November 1995 the Commissioner of Main Roads disposed of the prospective compensation claim by agreeing to purchase the whole of the subject property on a walk in walk out basis, viewed as a trading concern, for a price of $7,700,000 plus the price of stock.

12 It was against this background that when some reference was made at the directions hearing on Tuesday, 4 September 2001, to the settlement of the Burundi claim as a matter that might have some evidentiary significance in respect of the present group of claims that I felt obliged, as a matter of disclosure, to refer to a previous association with Burundi Holdings.

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13 After some discussion, with a view to making a full disclosure to the parties in case it was thought to be a matter of importance, I described the nature of my association with Burundi Holdings Pty Ltd.

14 I said that prior to my appointment to the Supreme Court in May 2000 I was practising as a barrister and as a member of the Bar Association in Allendale Square, Perth. I said that in the normal course of being a barrister I received a wide range of instructions from solicitors in commercial law and other matters.

15 I recalled that about fouror five years ago I was instructed by a firm of solicitors in the usual way to provide some advice to the proprietor of the Aberdeen Hotel concerning an envisaged resumption process in the vicinity of Burundi's premises. I seemed to recall that at the time the matter came before me there was some question as to whether the whole of the property would be resumed or only a portion at the rear of the property because the boundary of the freeway, or perhaps of the reserve, encroached upon the rear portion of the property only.

16 My recollection was that I met the principal or a director of the owner, who I understood to be Burundi Holdings Pty Ltd. There was a conference in the usual way of a barrister in which the principal of the company and the instructing solicitor were present. I was required to advise on some aspect of the matter. I went on to say that I could not recall whether the discussion concerned the issue of value or some issue of compensation criteria or partial resumption of a piece of land.

17 At such a distance in time I could not say positively whether the advice I gave on that occasion was followed up with a written opinion or memorandum of advice. I said that the parties should work on the assumption that some written advice did emerge. I said further (at the hearing on 4 September 2001) that my involvement with whatever was put before me, to the best of my recollection, was comparatively brief. There might have been some other communications but I could not really recall them.

18 Since the hearing on 4 September 2001, I have had an opportunity to check an index card forming part of my records as a barrister. I find that I was first contacted by the instructing solicitor on or about 4 September 1995 and I rendered an account on 29 September 1995. This suggests that I gave some advice about the matter between those two dates. The entry on the index card confirmed my previously expressed recollection that I had only a brief association with the matters in issue, although it now

(Page 8)

seems that the conference in question occurred six years ago, rather than four or five years ago. The size of the account rendered confirms my impression that I had only a brief involvement of the kind mentioned earlier. I was, I presume, remunerated for the advice given in due course.

19 I take this opportunity to confirm that I have had no other association with Burundi Holdings Pty Ltd or the officers of that company, or with any other landowner in the vicinity of the freeway.

20 I understand from the submissions made to me that the Minister for Planning as the party applying for an order that I should disqualify myself does not make any allegation of actual bias. The submission is that in circumstances of this kind there could be a reasonable apprehension of bias.

21 The grounds relied upon by the defendant are reflected in the following paragraphs of its written submissions:

"1. The subject matter of the action before the Court is a valuation of land in Newcastle Street Northbridge as at 27 October 1995.

2. The evidence before the Court will primarily consist of the expert evidence of land valuers. The plaintiff will call two valuers: Mr S B McMahon and Mr T R Dix. The defendant will rely on valuations by Mr G R Elliott and Mr J A Spencer, but also seeks leave to call Mr B E Zucal and Mr G R Wilkinson with respect to related issues. Mr Wilkinson's evidence is particularly relevant to this application. Valuation reports to be relied upon by the parties have been exchanged.

3. The methodology employed by each of the valuers was, in essence, that of an analysis of comparable sales evidence.

4. The main comparable sale relied upon by Mr McMahon is that of the Aberdeen Hotel in November 1995. The owner of the hotel, Burundi Holdings Pty Ltd, sold it to the Commissioner of Main Roads in November 1995 in circumstances of a pending resumption of part of the land on which the hotel was situated. That land abuts the rear of the property the subject of this action. The resumption was for the same purpose as that affecting the subject

(Page 9)

land, the Northbridge Tunnel project. The sale price of the hotel and land was $7,700,000.

5. In his report of January 1999, Mr McMahon analyses the sale of the Aberdeen Hotel to arrive at a figure for the land component of the sale price. He states at page 36 of his report that the sale price '... represents the best evidence, or primary evidence, of the value of the subject land' and that ' … the sale price is more likely to be less than market value'. In providing his estimate of the value of the subject land, Mr McMahon states that 'The estimate is based on the sale price of the Aberdeen Hotel ... The Aberdeen Hotel his been used as the basis of the estimate … '

6. Mr Dix does not rely on the sale of the Aberdeen Hotel as a comparable sale. However, he devotes a separate section of his report of 31 August 2001 to an assessment of the Aberdeen Hotel sale. At page 24 he states that 'In terms of value, this is the most significant sale along the Northbridge Tunnel … ' and then expresses concern that ' … the information supplied is insufficient for any meaningful assessment to be made … ' He states further, 'Without the benefit of additional information we are unable to confirm the manner in which the purchase price was arrived at, nor the under-lying value of the land.'


At page 25 of that report Mr Dix states

'We are of the opinion that the market place was well aware of the transaction (the sale of the Aberdeen Hotel) and negotiations leading up to the final agreement. We note that the owner appeared concerned that sensitive commercial information had found its way into the hands of competitors, which would support this view. If that is the case it seems to us that the level of land component of value disclosed by this sale would have exceeded $3,000/m2 and would have influenced the market as it was an important sale of land with a plot ratio of 3.0, and as the sale price was substantially higher than other sales. This negotiated settlement may reflect the

(Page 10)

'unaffected' value of the property after ignoring the blight, whereas other market sourced sales appear to be clearly based on the blighted conditions in the area that reflect the reservation of the land. In the absence of further information we are unable to adopt this sale of evidence of value, however if that information is forthcoming we reserve the right to reconsider the value we have ascribed to the subject land.'

7. In a report of 25 March 1999 in response to Mr McMahon's report of January 1999, Mr Elliott and Mr Zucal criticise Mr McMahon's reliance on the Aberdeen Hotel sale. They provide a relatively detailed analysis of the background of the sale, referring to negotiations with Mr Rasheed of Burundi Holdings Pty Ltd and to the sale price being based on the hotel as a going concern.

8. Mr Wilkinson, a colleague of Mr Spencer's, provided a similar responsive letter dated 30 March 1999 in which he discusses the basis of the 1995 valuations of the Aberdeen Hotel in the course of expressing his opinion that it should not be used as a comparable sale.

9. It is apparent from the foregoing that the details of the sale of the Aberdeen Hotel are potentially central to a proper determination of this action.

…

16. There are two matters of concern:


(i) the appointed trial judge's association with a landowner who was affected by the resumption of land abutting the subject land

(ii) that the appointed trial judge is likely to or may have been privy to independently acquired information relevant to the issues to be determined between the parties to the action.

(Page 11)

17. As to the first matter, a fair-minded lay observer might reasonably apprehend that, prior to his appointment to the bench, the appointed trial judge had sufficient connection with an affected landowner to result in the possibility that the appointed trial judge might not bring an impartial and unprejudiced mind to the question of valuation of land owned by another affected landowner. This is particularly so given the immediate proximity of the two portions of land the subject of valuation controversy involving the Defendant.

18. As to the second matter, there is a real possibility that in order to provide advice in his previous capacity as an independent Barrister to the owner of the Aberdeen Hotel, it was necessary for the appointed trial judge, to have been made aware of information relevant to its valuation and sale which information is not available to or ascertainable by the parties.

19. Although His Honour the appointed trial judge does not, at present, recall the full extent of that information, as related evidence is adduced at trial, His Honour's recollection may change. Moreover, the extent of His Honour's present recollection does not mean that information previously obtained may not have some indirect influence on his determination.

20. The sale of the Aberdeen Hotel is a central issue in the plaintiffs case. A decision as to the comparability of that sale will necessarily influence the determination of the value of the subject land. There are also issues of injurious affection, solatium and resumption relevant to the Aberdeen Hotel which are likely to be common with the present determination.

21. It would therefore be open for a reasonable lay observer to apprehend the possibility that information independently acquired by the appointed trial judge may influence his decision.

22. Of further concern is the real possibility that the appointed learned trial judge may, as the evidence unfolds before him in the course of the trial, increase his

(Page 12)

recollection of the relevant information, forcing the trial to abort. The potential for such a self-evidently undesirable result should be avoided in the interests of efficient case flow management: Rules of the Supreme Court 1971, Order 1, rule 4B.

23. The Defendant does not seek and wishes to avoid any delay in the hearing and proper determination of this action.

24. Given the appointed trial judge's previous involvement with the owners of the Aberdeen Hotel in relation to the resumption, valuation or sale of that property, and given the importance of that sale in the plaintiff's case, it is open for a reasonable lay observer to apprehend the possibility that the appointed trial judge's decision may be influenced by that involvement.

25. In these circumstances, it is in the interests of justice that the appointed trial judge disqualify himself from further hearing of the action."

22 Before leaving the defendant's submissions, I pause to note that they were supported by the affidavit of the defendant's solicitor, Brian Robert McMurdo sworn 13 September 2001. I will not traverse all the matters in the affidavit, but, in essence, the affidavit outlines the events and related correspondence leading up to the purchase of the Aberdeen Hotel in late 1995.

23 It appears from the correspondence that there had been lengthy exchanges between the relevant valuers prior to my conference with Burundi in early September 1995. The Main Roads Department, as the prospective purchaser, contended for a figure as the fair market value of the entire property which was not very far removed from the figure of $7.7 million agreed eventually. A letter dated 5 September 1995 (being close to the date on which I was consulted) from the owner's valuer Richard Ellis to the Department's valuer suggests that the only matter remaining in issue at that time was whether the solatium allowed to the owner should be 10 per cent or 5 per cent as proposed by the Department's valuer. It seems from the correspondence that the price finally agreed on 12 September 1995 represented the average of the highest and lowest valuations with provision being made for a solatium of 10 per cent. There

(Page 13)

are no indications that the advice of counsel on either side had an effect on the negotiations or the agreed price.

24 I must also mention that in addition to the matters referred to in its written submissions, the defendant by counsel gave notice that it intended to subpoena and lead evidence at the hearing from various witnesses associated with Burundi Holdings Pty Ltd and the advancement of its claim for compensation six years ago, including the principal director and the relevant valuers.

25 The plaintiff's written submissions were to the effect that it was not appropriate for the plaintiff to either support or defend the defendant's application. The plaintiff did, however, make these submissions:

"3. The grounds for the defendant's application is the trial judge's declaration that whilst a member of the independent bar some 5 or 6 years ago he advised the owner of a [sic] the property known as the Aberdeen Hotel as to the resumption process, in particular the resumption of part only of the property.

4. There is no suggestion of actual bias on the part of the trial judge. There is no suggestion that the trial judge has a real or perceived interest in the outcome of the case. Neither is there any suggestion that the trial judge has or has had an association with any of the parties which may disqualify him.

5. In order to succeed with its application the defendant must therefore establish that by reason of the trial judge having acted in the manner referred to above there is a 'possibility' (real not remote) that the trial judge might not bring an impartial mind to the matter and might decide the case other than on its legal and factual merits.

6. In Locabail [sic] (UK) Ltd v Bayfield Properties Ltd [2000] 2 WLR 870 at 883 the Court of Appeal of England held that in this context 'possibility' means 'real danger'.

7. There is no suggestion that the judge gave the owner of the Aberdeen Hotel any advice or expressed any opinion as to the value of the property at the relevant time.

(Page 14)

8. The sale of the Aberdeen Hotel to the defendant is one of the sales used by the plaintiffs valuers to estimate the value of the plaintiffs property for compensation purposes.

9. The report of one of the plaintiffs valuers for the purpose of this case includes the following summary of comparable sales one of which is the Aberdeen Hotel.

26 Before turning to the issue before me, it will be convenient to look at a number of decided cases in which the principles bearing upon an application of this kind are referred to.

27 The decided cases indicate that a judicial officer should not sit to hear a case if, in all the circumstances, the parties or the public might entertain a reasonable apprehension that he or she might not bring an impartial and unprejudiced mind to the resolution of the question involved in it.

28 That test was applied in Livesey v The New South Wales Bar Association (1983) 151 CLR 288. It was emphasised by the High Court in that case that actual bias by reason of prejudgment or partiality, is not an issue in this kind of case. What is in issue is the appearance of bias.

29 The court went on to say, however, at page 294:

(Page 15)

"If a judge at first instance considers that there is any real possibility that his participation in a case might lead to a reasonable apprehension of prejudgment or bias, he should, of course, refrain from sitting. On the other hand, it would be an abdication of judicial function and an encouragement of procedural abuse for a judge to adopt the approach that he should automatically disqualify himself whenever he was requested by one party so to do on the grounds of a possible appearance of prejudgment or bias, regardless of whether the other party desired the matter to be dealt with by him as the judge to whom the hearing of the case had been entrusted, by the ordinary procedures and practice of the particular court."

30 Further, the court said, at page 299, at I quote:

"The reasonable observer is to be presumed to approach the matter on the basis that ordinarily a judge will so act as to ensure both the appearance and the substance of fairness and impartiality. But the reasonable observer is not presumed to reject the possibility of prejudgment or bias, nor is the reasonable observer presumed to have any personal knowledge of the character or ability of the members of the relevant court."

31 The reasonable apprehension test is not necessarily an easy one to satisfy. A prior relationship of legal adviser and client, between the member of a tribunal and a party to litigation before it was thought to be insufficient in Re Polites; Ex parte Hoyts Corporation Pty Ltd (No 2) (1991) 173 CLR 78.

32 In the Polites case, the Deputy President of the Australian Industrial Relations Commission disqualified himself after proceedings were well advanced, on its being objected that he had, in his previous practice as a solicitor, given advice to an applicant, which advice merely set out available negotiating options. It was held there that no foundation existed for the apprehension that he would not have determined the live issues with an impartial and unprejudiced mind. He had been mistaken to think that there was such a foundation, and the court ordered mandamus to go to direct him to hear and determine the proceedings.

33 The court, in that case, approved the reasonable apprehension principle enunciated in Livesey's case. The court emphasised, however, that it is a reasonable apprehension that the judicial officer will not decide

(Page 16)

the case impartially or without prejudice, rather than an apprehension that he would decide the case adversely to a party.

34 Members of the High Court said also that a prior relationship of legal adviser and client does not generally disqualify the former adviser, on becoming a member of a tribunal (or court), from sitting in proceedings before the tribunal to which the former client is a party. However, if the correctness or appropriateness of advice given to the client is a live issue for determination by the tribunal, the formal adviser should not sit. A fortiori, if the advice has gone beyond an exposition of the law and advises the adoption of a course of conduct to advance the client's interests, the former adviser should not sit in a proceeding in which it is necessary to decide whether the course of conduct taken by the client was legally effective or was wise, reasonable or appropriate. Much will depend on the nature of the adviser's relationship with the client, the ambit of advice given and the issues falling for determination.

35 There have been a number of more recent decisions bearing upon the question of disqualification for bias.

36 In Re Colina & Anor; Ex parte Torney [1999] HCR 57; (1999) 200 CLR 386, a party had been charged with contempt of the Family Court. The charges were not described as being on indictment. Before the charges were heard by a Judge of the Family Court, the Chief Justice of that court made public statements critical of certain persons and taking issue with criticisms made of the court. The High Court held that the Chief Justice's statements did not provide grounds for reasonable apprehension that the trial Judge might not bring a fair and unprejudiced mind to the performance of his task.

37 The Chief Justice was not the Judge designated the hear the contempt matter. Thus, Gleeson CJ and Gummow J noted at par 29 that the flaw in the argument concerning bias was that it assumed a relationship between a Chief Justice and a member of his or her court which was contrary to fundamental principles of judicial independence. It is frequently overlooked that the independence of the judiciary includes independence of Judges from one another. The Chief Justice of a court has no capacity to direct, or even influence, Judges of the court in the discharge of their adjudicative powers and responsibilities. Corresponding to the Chief Justice's lack of capacity to control or influence the designated Judge's exercise of judicial power, there is a duty upon the designated Judge to act independently, and in accordance with his judicial oath. The High Court therefore considered that there was no ground for any reasonable

(Page 17)

apprehension that the designated Judge might not bring a fair and unprejudiced mind to the performance of the judicial task ahead of him.

38 More recently, in Johnson v Johnson [2000] HCA 48, the High Court said that the test to be applied is whether a fair-minded lay observer might reasonably apprehend that the Judge might not bring an impartial and unprejudiced mind to the resolution of the question the Judge is required to decide.

39 The majority of the court indicated that two things need to be remembered. The observer is taken to be reasonable; and the person being observed is a professional Judge whose training, tradition and oath or affirmation require that the Judge discard the irrelevant, the immaterial and the prejudicial.

40 A majority of the Court noted at par 12 that the test just mentioned has been adopted in Australia in preference to the differently expressed test that has been applied in England in Locobail (UK) Ltd v Bayfield Properties Ltd [2000] 2 WLR 870 for the reason that the former test gives due recognition to the fundamental principle that justice must be done, and be seen to be done. It is based upon the need for public confidence in the administration of justice. It seems to follow that I am not at liberty to apply the Locobail reasoning in the manner urged upon me by counsel for the plaintiff in the present case.

41 The High Court in Johnson's case approved the reasoning reflected in Re JRL; Ex parte CJL (1986) 161 CLR 342 where it was said that judicial officers should not accede too readily to suggestions of an appearance of bias.

42 In Ebner v Official Trustee [2000] HCA 63, it was said at par 8 that application of the reasonable apprehension test required two steps to be taken, namely, the identification of what it is said might lead a Judge (or juror) to decide a case other than on its factual or legal merits. Second, there must be the articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits.

43 Implicit in this line of reasoning was that the bare assertion that the Judge has an "interest" or an interest in a party to it, will be of no assistance until the nature of the interest, and the asserted connection with the possibility of departure from impartial decision-making is articulated. Only then can the reasonableness of an asserted appearance of bias be assessed.

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44 I pause to note in passing that in the Ebner case, Goldberg J had declared that he had a contingent beneficial interest under a family trust which owned 8,000 to 9,000 shares in the litigant bank which was a creditor of the bankrupt estate under notice. The application for disqualification failed. Likewise, in the related case of Clenae, in which a bank was suing the borrower of foreign currency, the fact that the trial Judge had inherited a small parcel of shares in the bank prior to delivery of his reserve judgment, was felt not sufficient for him to be required to disqualify himself. In those cases, the court endorsed the practice concerning disclosure of a possible interest whereby the Judge is to lay out the facts for consideration in the manner that was done by Goldberg J. The court also considered at par 74 that it was not appropriate for the issue to be dealt with by some Judge other than the person asked to disqualify himself.

45 In Webb & Anor v The Queen (1994) 181 CLR 41 Deane J at page 74 identified four categories of potential disqualification, namely, interest, conduct, association and extraneous information. He said that the fourth category will commonly overlap the third category where knowledge of some prejudicial but inadmissible fact or circumstances gives rise to the apprehension of bias. Nonetheless, it is quite clear from the reasoning of the High Court in Johnson's case that the connection between the matter brought into issue and the prospect of the Judge departing from impartial decision-making must be clearly articulated.

46 Against the background of these cases, I must now turn to the circumstances before me. It is apparent that the test to be applied is whether a fair-minded lay observer might reasonably apprehend that the Judge might not bring an impartial and unprejudiced mind to the resolution of the question the Judge is required to decide. The observer is taken to be reasonable. Some weight will be given to the Judge's professional background and his capacity to exclude the irrelevant, immaterial and prejudicial. There must be an articulation of a logical connection between the matter or category of concern and the feared deviation from the course of deciding the case on its merits.

47 I am satisfied, having regard to the evidentiary materials before me, that the settlement of the Burundi/Aberdeen claim in November 1995 is an important constituent of the plaintiff's case. The plaintiff's valuer, Mr Dix, has said that in terms of value this is the most significant sale along the route of the Northbridge tunnel and the sale is so close to the valuation date of the subject property that a valuer would be negligent if the sale were not considered before undertaking a valuation of the subject

(Page 19)

property. He is cautious in translating the figure of $7.7 million paid by the Main Roads Department to purchase the Aberdeen Hotel as a going concern to the circumstances of the present case. Nonetheless, it is quite apparent, for the reasons given by Mr Dix, that this sale will have to be looked at closely.

48 The plaintiff's other valuer, Mr McMahon, places greater reliance upon the sale in question. He says that the sale to the Commissioner for Main Roads would not normally be considered comparable because it was made under threat of resumption, and the sale price includes solatium and other heads of compensation. He goes on to say, however, that the special circumstances of the sale render it the most "useful guide to the unaffected value of the subject land as at the date of resumption". He repeats that thought in various sections of his report and, in contending that $7.0.2 million represents the improved value of the Duffy property, asserts that his estimate is based upon the sale price of the Aberdeen Hotel. He goes on to say that "the Aberdeen Hotel has been used as the basis of the estimate for the reasons given in the approach to valuation section of this report and because fewer adjustments are required to the sale price for comparison purposes than for any other sale".

49 It is clear also from the evidentiary materials that the defendant will be obliged to address this central issue and in doing so will draw attention to various factors which are said to distinguish the settlement of the Burundi/Aberdeen claim from the Duffy claim. I have already noted that the defendant will lead evidence from witnesses associated with the Burundi/Aberdeen claim. It seems likely that these witnesses will draw attention to various distinguishing factors and emphasise the individual nature of the Aberdeen Hotel as a trading operation.

50 The first matter of concern articulated by the defendant in support of its application is set out in pars 16(i) and 17 of its written submissions mentioned earlier, that is to say, the notion that a fair-minded lay observer might reasonably apprehend that, prior to his appointment to the bench, the appointed trial Judge had sufficient connection with an affected landowner to result in the possibility that the appointed trial Judge might not bring an impartial and unprejudiced mind to the question of valuation of land owned by another affected landowner.

51 I am not satisfied in the circumstances of the present case that I should disqualify myself upon such a ground. It appears from the matters of disclosure provided to the parties that I have had no association with the parties before me, save for a comparatively brief role as a legal adviser

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to Burundi in September 1995 at a time when the parties were very close to a final agreement. It is quite clear that I was acting in a purely professional capacity and did not maintain any continuing connection to the client. The decided cases indicate that some weight must be given to the Judge's professional background and his capacity to exclude the irrelevant, immaterial and prejudicial. I therefore doubt, in the context of the present case, that a fair-minded lay observer would conclude that a Judge was likely to be swayed by a brief professional connection to a client some six years ago, bearing in mind that upon the face of the evidentiary materials before me there is no suggestion of any continuing connection or a connection that might have an influence upon the impartiality of the trial Judge.

52 The second articulated matter of concern is reflected in pars 16(ii) and 18 of the defendant's written submissions, that is to say, the notion that the appointed trial Judge is likely to or may have been privy to independently acquired information relevant to the issues to be determined between the parties to the action.

53 Counsel for the defendant was unable to identify any specific indication in the evidentiary materials before the Court that special or extraneous information might have been conveyed to me as a legal adviser to Burundi. If anything, the indications are to the contrary in that, as I have already observed, it seems that the arrangements between the parties were very close to a final agreement when the matter was brought to my attention, save for an outstanding issue concerning the size of the solatium. There are no indications that as a legal adviser to Burundi I contended for any proposition of law that proved to be decisive and might be thought to have a continuing influence upon my attitude to compensation claims of the kind presently before the Court.

54 It was for this reason, it seems, that counsel for the defendant emphasised the principle underlined by the High Court in Johnson's case that justice must not only be done, but be seen to be done. Rules of professional privilege would preclude disclosure of any special or extraneous information that might have come to the attention of the trial Judge in his former role as legal adviser. This means that a fair-minded lay observer might continue to harbour a doubt as to whether the trial Judge's decision was based simply upon the evidence brought before him in open court.

55 I found it somewhat unsatisfactory that counsel for the defendant was unable to single out any hint of extraneous information in the evidentiary

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materials before me or to present persuasive examples of the kind of information that might lead a fair-minded observer to conclude that the impartiality of the Judge might be affected by his previous knowledge. Nonetheless, speaking hypothetically, one can certainly envisage circumstances in which a settlement was arrived at as a consequence of various commercial considerations which were not necessarily related to the legal advice given. This would mean, in the hypothetical case I have posited, that a fair-minded observer might conclude that the trial Judge regarded the transaction relied upon as a comparable sale with a sceptical eye.

56 Accordingly, I have come to the conclusion that I should disqualify myself upon this ground. In doing so, I am conscious, having regard to the precepts reflected in the decided cases, that a trial Judge should not too readily accede to an application for disqualification. However, in the circumstances of this case, I consider that the need for public confidence in the administration of justice is better served if arrangements are made for the trial to be conducted by a Judge without any prior connection to a transaction that may prove to be decisive in determining what value should be attributed to the subject land.

57 My decision to accede to the defendant's application is reinforced when I turn to the final matter of concern raised by counsel for the defendant, being a matter raised at the hearing.

58 I have already indicated that, in my view, the Burundi/Aberdeen transaction is bound to be of importance in resolving the valuation issue at the heart of the present claims. It therefore seems to me that if the defendant proceeds to lead evidence from various witnesses associated with Burundi Holdings and the advancement of that company's claim, a trial Judge who has previously acted for Burundi will be placed in a difficult position. A fair-minded lay observer might conclude that in such circumstances the trial Judge would be likely to give weight to the views expressed by those witnesses because he was associated with them previously. Furthermore, it might be thought that a trial Judge who has previously acted as a legal adviser to Burundi will be inclined to support the fairness and appropriateness of the settlement previously arrived at, and this might colour his approach to the valuation issues placed before him some years later.

59 For this reason also, I consider that a fair-minded lay observer might reasonably apprehend that the Judge might not bring an impartial and unprejudiced mind to the resolution of the question he is required to

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decide. The decided cases suggest that a former adviser should not sit in a proceeding in which it is necessary to decide whether the course of conduct taken by the client was legally effective or was wise, reasonable or appropriate.

60 In summary, then, I note that the Minister for Planning, as the party applying for an order that I should disqualify myself, does not make any allegation of actual bias. The submission is that, in the circumstances of the present case, there could be a reasonable apprehension of bias in that some years ago I acted as legal adviser to a landowner with a claim similar to the claims being advanced in the present action. Accordingly, I do propose to disqualify myself. The defendant's application will be allowed.