FEDERAL COURT OF AUSTRALIA
Shaw v Australian Pump Industries Pty Ltd [2015] FCA 547
Citation: Shaw v Australian Pump Industries Pty Ltd [2015] FCA 547 Parties: JOHN RASHLEIGH SHAW v AUSTRALIAN PUMP INDUSTRIES PTY LTD (ACN 061 619 234) File number: NSD 322 of 2014 Judge: FOSTER J Date of orders: 9 October 2014 Date of publication of Reasons: 2 June 2015 Catchwords: PRACTICE AND PROCEDURE – whether the docket judge was obliged to recuse himself for apprehended bias by reason of pre-judgment from determining whether a bankrupt is entitled to prosecute some or all of the claims for relief made by him in a proceeding the existence of which pre-dated the making of a sequestration order, such bias said to have been demonstrated by remarks made at a Directions Hearing Legislation: Bankruptcy Act 1966 (Cth), s 60 Cases cited: Shaw v Yarranova Pty Ltd [2014] FCAFC 171
Yarranova Pty Ltd v Shaw (No 2) [2014] FCA 616
Embertec Pty Ltd v Energy Efficient Technologies Pty Ltd (No 2) [2013] FCA 347Date of hearing:
9 October 2014
Place:
Sydney
Division:
GENERAL DIVISION
Category:
Catchwords
Number of paragraphs:
40
Solicitor for the Applicant:
The Applicant appeared in person
Counsel for the Respondent:
Mr RI Bellamy
Solicitor for the Respondent: Robilliard Lawyers
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 322 of 2014
BETWEEN: JOHN RASHLEIGH SHAW
ApplicantAND: AUSTRALIAN PUMP INDUSTRIES PTY LTD (ACN 061 619 234)
Respondent
JUDGE:
FOSTER J
DATE OF ORDER:
9 OCTOBER 2014
WHERE MADE:
SYDNEY
THE COURT NOTES THAT:
1.Foster J declines to recuse himself from this proceeding.
THE COURT ORDERS THAT:
2.The claim for relief made in par 1 of the Interlocutory Application filed by the applicant on 26 August 2014 be dismissed.
3.The remaining claims for relief made in the said Interlocutory Application, being the claims made in paragraphs 2, 3, 4 and 5 of that Application, be adjourned to 9.30 am on 9 December 2014 before Foster J at which time further consideration will be given to the ways in which those claims might be addressed by the Court in light of all circumstances then known, including whether or not the applicant’s appeal against his bankruptcy has been decided and, if that appeal has been determined, in what way those claims might be addressed in light of that particular circumstance.
4.The costs of the applicant’s Interlocutory Application referred to in par 2 above and the costs of today generally be reserved.
5.Liberty be granted to both parties to apply on three (3) days’ notice or on such shorter notice as a Judge might allow.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 322 of 2014
BETWEEN: JOHN RASHLEIGH SHAW
ApplicantAND: AUSTRALIAN PUMP INDUSTRIES PTY LTD (ACN 061 619 234)
Respondent
JUDGE:
FOSTER J
DATE:
2 JUNE 2015
PLACE:
SYDNEY
REASONS FOR JUDGMENT
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- Case
- [2015] FCA 547
- Decision Date
CaseChat Overview and Summary
The legal issues the court was required to decide were centered around the judge's potential bias due to pre-judgment, which could potentially influence the decision-making process. The court had to determine whether the remarks made by the judge during the Directions Hearing were enough to cause a fair-minded lay observer to reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question at hand.
In reaching its decision, the court examined the relevant principles governing disqualification of a judge for apprehended bias by reason of pre-judgment, as outlined in Embertec Pty Ltd v Energy Efficient Technologies Pty Ltd (No 2). The court considered the possibility that a fair-minded observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the case, due to the pre-judgment principle. However, the court found that the remarks made by the judge were not enough to establish a reasonable apprehension of bias. The court concluded that the judge's comments were based on the legal and factual merits of the case and did not indicate any pre-judgment on the part of the judge.
The court ultimately dismissed the claim for relief made in paragraph 1 of the Interlocutory Application filed by Mr. Shaw. The remaining claims for relief were adjourned to a later date, allowing the court to further consider the matter in light of all circumstances known at that time, including the outcome of Mr. Shaw's appeal against his bankruptcy. The costs of the Interlocutory Application and the proceedings were reserved, and both parties were granted liberty to apply on three days' notice or such shorter notice as a Judge might allow.
In conclusion, the Federal Court determined that the remarks made by the judge during the Directions Hearing were not sufficient to establish a reasonable apprehension of bias by reason of pre-judgment. The court dismissed the claim for relief made in paragraph 1 of the Interlocutory Application and adjourned the remaining claims for relief to a later date.
Orders
Orders of the court
2. The claim for relief made in par 1 of the Interlocutory Application filed by the applicant on 26 August 2014 be dismissed.
3. The remaining claims for relief made in the said Interlocutory Application, being the claims made in paragraphs 2, 3, 4 and 5 of that Application, be adjourned to 9.30 am on 9 December 2014 before Foster J at which time further consideration will be given to the ways in which those claims might be addressed by the Court in light of all circumstances then known, including whether or not the applicant’s appeal against his bankruptcy has been decided and, if that appeal has been determined, in what way those claims might be addressed in light of that particular circumstance.
4. The costs of the applicant’s Interlocutory Application referred to in par 2 above and the costs of today generally be reserved.
5. Liberty be granted to both parties to apply on three (3) days’ notice or on such shorter notice as a Judge might allow.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Mr Shaw answered in the affirmative and then returned to his s 60(4) point. The exchange then proceeded in the following terms (transcript p 5/31–transcript p 6/37):MR SHAW: That aspect, certainly, your Honour, but I do still maintain that 60(4) applies to my action and I may need to, obviously, make an application for that to be heard.HIS HONOUR: Well, if you wish, you can do that but I will indicate to you that I do have a view about it as I conveyed it to you but, in any event, I will hear it but I won’t hear it until after the appeal because there’s no point. If you win the appeal, you can bring the action anyway. Do you follow?MR SHAW: But if it’s delaying my right to pursue the action if I - - -HIS HONOUR: That’s the worst that’s happening. Yes.MR SHAW: Yes. Well, is that fair?HIS HONOUR: Well, I think so. You obviously don’t. MR SHAW: Well, it seems like you’re prejudging the issue before you’ve seen the evidence, your Honour.HIS HONOUR: It’s not – it’s a legal point. You’re suing for breach of contract, aren’t you?MR SHAW: And also for personal damage.HIS HONOUR: What personal damage?MR SHAW: Personal damage to myself.HIS HONOUR: All right. Well, if you want to bring that application, I will consider whether I will hear it before the appeal but I’m indicating to you, it’s very unlikely I will.MR SHAW: Well, it seems that you are prejudging this issue.HIS HONOUR: Well, you can say that. MR SHAW: I beg your pardon.HIS HONOUR: You can make – you can say that if you wish. You can make an application about that if you wish but the first thing you need to do is bring forward your application that this matter somehow be continued in the face of the bankruptcy. That’s the first thing you need to do. All right. Now, if you want to do that, please do it. It doesn’t help spending resources and time and money on things like that. All right. Well, the only order I will make today is the one I’ve made. The matter will stand over to 9 December 2014 at 9.30 am before me. I note that Mr Shaw has indicated he wishes to make an application of some kind directed to the proposition that, notwithstanding his bankruptcy and pending the determination of his appeal from the sequestration order made against his estate, he is entitled to seek to have further directions made in the present proceeding at this time.MR SHAW: Fair enough. Thank you.HIS HONOUR: All right.CONSIDERATIONThe Relevant Principles (Apprehended Bias) In Embertec Pty Ltd v Energy Efficient Technologies Pty Ltd (No 2) [2013] FCA 347, at [4]–[13], I set out my understanding of the relevant principles governing disqualification of a judge for apprehended bias by reason of pre-judgment in the following terms:4A judge should not sit to hear a case if, in all the circumstances, 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 which he or she is required to decide (Johnson v Johnson (2000) 201 CLR 488 at 492–493 [11]–[12] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ; Livesey v New South Wales Bar Association (1983) 151 CLR 288 at 293–294 per Mason, Murphy, Brennan, Deane and Dawson JJ; and Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at 344–345 [6]–[8] per Gleeson CJ, McHugh, Gummow and Hayne JJ). 5The test for apprehension of bias involves a consideration of possibilities, not probabilities, although the possibilities must be real and not remote (Ebner at 345 [7]; Cadbury Schweppes Pty Ltd v Darrel-Lea Chocolate Shops Pty Ltd (No 2) (2009) 174 FCR 175 at 199 [71] per Greenwood J and at 211–212 [121] per Besanko J). 6The application of the test requires two things. First, it requires the identification of what it is said might lead the judge to decide a case other than on its legal and factual merits. Second, there must be an articulation of the logical connection between that matter and the feared deviation from the course of deciding the case on its merits (Ebner at 345 [8]; Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427 at 445 [63] per Gummow ACJ, Hayne, Crennan and Bell JJ; Cadbury Schweppes Pty Ltd v Darrel-Lea Chocolate Shops Pty Ltd (No 2) 199 [71] per Greenwood J and at 211–212 [121] per Besanko J). 7The reasonable or fair-minded observer is not taken to have a knowledge of the law nor should there be attributed to her or him an awareness of the judicial process that ordinary experience suggests not to be the case (Vakauta v Kelly (1989) 167 CLR 568 at 585 per Toohey J). The reasonable hypothetical observer understands that a judge is professional but is not presumed to reject the possibility of pre-judgment. Were it otherwise, apprehension of bias would never arise in the case of the professional judge (British American Tobacco Australia Services Ltd v Laurie (2011) 242 CLR 283 at 333 [144] per Heydon, Kiefel and Bell JJ). 8The lay observer is not informed by a detailed knowledge of the law nor is he or she invested with “undue knowledge and sophistication” or “highly specialised knowledge” (Johnson v Johnson at 502–503 [42] and 506 [49] per Kirby J; and Cadbury Schweppes Pty Ltd v Darrel-Lea Chocolate Shops Pty Ltd (No 2) at 200–201 [74] per Greenwood J). Nevertheless, the fictitious bystander is not “wholly uninformed and uninstructed about the law in general or the issues to be decided” (Johnson v Johnson at 508–509 [53] per Kirby J). The hypothetical observer is assumed to know the issues to be decided and the circumstances in which they came to be decided. 9Exceptions to the apprehension of bias rule include necessity, waiver and special circumstances (British American Tobacco Australia Services Ltd v Laurie at 333 [146]). 10The pre-judgment principle is one basis upon which a reasonable apprehension of bias may be found to exist. If a fair-minded person reasonably apprehends or suspects that the Tribunal has pre-judged the case, that observer cannot have confidence in the decision (Re Watson; Ex parte Armstrong (1976) 136 CLR 248 at 263). This notion is based upon the fundamental principle that justice must be seen to be done as well as be done. 11The relevant test is whether a reasonable observer might conclude that the decision-maker might not bring to his or her task an impartial mind by reason of pre-judgment, in the sense that the decision-maker might be so committed to a conclusion as to be incapable of persuasion to a different view (Cabcharge Australia Ltd v Australian Competition and Consumer Commission [2010] FCAFC 111 at [25] per Kenny, Tracey and Middleton JJ). Reasonable apprehension of bias by reason of pre-judgment must be firmly established (Re JRL; Ex parte CJL (1986) 161 CLR 342 at 352 per Mason J). A conclusion of reasonable apprehension of bias is not to be drawn lightly (Vakauta v Kelly at 584–585).12The applicant submitted that one instance in which a fair-minded observer might entertain a reasonable apprehension of bias by reason of pre-judgment is if the judge hearing the matter has previously expressed clear views about 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 (Livesey v New South Wales Bar Association at 300). 13In the present case, the applicant relied upon certain remarks which I made about the evidence of a witness called in support of the applicant’s claim for interlocutory injunctive relief (Mr Georgevits). Mr Georgevits is a consulting electrical engineer. The applicant also relied upon the circumstance that I expressed some views, albeit provisionally, in respect of the respondents’ claim that the patent was invalid because it was not fairly based upon the broadest form of the invention as expressed in the specification for the patent.