Shuren & Fang (No 5)
[2023] FedCFamC1F 966
•29 November 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Shuren & Fang (No 5) [2023] FedCFamC1F 966
File number MLC 3815 of 2023 Judgment of WILSON J Date of judgment 29 November 2023 Catchwords FAMILY LAW – MAJOR COMPLEX FINANCIAL PROCEEDINGS LIST – recusal application – allegation of reasonable apprehension of bias – aggregation of alleged instances of bias – the double might test – relevant test not made out on application – recusal application dismissed. Legislation Corporations Act 2001 (Cth) s 285, 285, 1306
Family Law Act 1975 (Cth) s 79A
Migration Act 1958 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021
Cases cited Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199
Australian Securities and Investments Commission v Healey (2011) FCR 291
Amos v Wiltshire [2016] QCA 70
Bainton v Rajski (1992) 29 NSWLR 539
Brayton & Brayton [2021] FedCFamC1F 337
Bienstein v Bienstein (2003) 30 Fam LR 488
Brisciani v Piscioneri [No 1] [2016] ACTCA 30
Brisciani v Piscioneri [No 2] [2016] ACTCA 24
Brisciani v Piscioneri [No 3] [2016] ACTCA 31
British American Tobacco v Laurie (2011) 242 CLR 283
Charisteas v Charisteas (2021) 273 CLR 289
CNY17 v Minister for Immigration and Border Protection (2019) 268 CLR 76
Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577
Duke Group Ltd (In liq) v Pilmer [No 3] [2001] SASC 215
Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337
Erris Promotions Ltd v Commissioner of Inland Revenue (2003) 16 PRNZ 1014
Forge v Australian Securities and Investments Commission (2006) 228 CLR 45
Frugtniet v Secretary, Dept of Social Services (2021) 285 FCR 159
Girlook (Sales) Pty Ltd v Hurrell (1982) 149 CLR 155
Goodheart & Goodheart [2023] FedCFamC1F 715
Holloway v McFeeters (1956) 94 CLR 470
In The Marriage of Ruby (1991) 15 Fam LR 47
Isbester v Knox City Council (2015) 255 CLR 135
Islam v Minister for Immigration & Citizenship (2009) 51 AAR 147
Jackson v R [2019] VSCA 65
Johnson v Johnson (2000) 201 CLR 488
Livesey v New South Wales Bar Association (1983) 151 CLR 288 at 294
Mann v Northern Territory News (1988) 88 FLR 194
Masi-Haini v Minister for Home Affairs [2023] FCA 430
Michael Wilson & Partners Limited v Nicholls (2011) 244 CLR 427
Morley v Statewide Tobacco Services [1993] 1 VR 423
North Australia Aboriginal Legal Service Inc v Bradley (2004) 218 CLR 146
QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affair [2023] HCA 15
Rayney v Western Australia [2020] WASCA 206
Rayney v Western Australia [No 2] [2020] WASCA 207
Rayney v Western Australia [No 3] [2020] WASCA 209
Re JRL; ex parte CJL (1986) 161 CLR 342
Re Lusink; ex parte Shaw (1980) 55 ALJR 12
Re Refugee Review Tribunal; ex parte H (2001) 75 AJLR 982
R v Watson; ex parte Armstrong (1976) 136 CLR 248
Setka v Gregor [2011] FCAFC 64
Shuren & Fang [2023] FedCFamC1F 712
Shuren & Fang (No 2) [2023] FedCFamC1F 880
Shuren & Fang (No 3) [2023] FedCFamC1F 906
Shuren & Fang (No 4) [2023] FedCFamC1F 934
Slaveski v Attorney-General (Vic) [2013] VSCA 165
Smits v Roberts (2006) 227 CLR 423
SZVBN v Minister for Immigration & Border Protection [No 2] [2017] FCA 123
SZVBN v Minister for Immigration & Border Protection [No 3] [2017] FCA 126
Vakauta v Kelly (1989) 167 CLR 568
Valdez v Frazier [No 3] [2015] FamCAFC 205
Wark v Western Australia [No 2] [2023] WASCA 67
Wark v Western Australia [No 3] [2023] WASCA 68
Webb v R (1994) 181 CLR 41
Division Division 1 First Instance Division Division 1 First Instance Number of paragraphs 164 Date of last submission 3 November 2023 Date of hearing 3 November 2023 Place Melbourne Counsel for the husband Mr G Dickson KC, Mr A Baker and Ms H Renwick Solicitors for the husband Aston Legal Group Counsel for the wife and B Pty Ltd Mr L Glick KC and Dr Ingleby Solicitors for the wife and B Pty Ltd Australian Legal Advisory Centre ORDERS
MLC 3815 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN MR FANG
Applicant
AND MS SHUREN
First Respondent
C PTY LTD
Second Respondent
B PTY LTD
Third Respondent
ORDER MADE BY
WILSON J
DATE OF ORDER
29 NOVEMBER 2023
THE COURT ORDERS THAT
1.The applicant husband’s recusal application is hereby dismissed.
2.The applicant husband’s application to vacate the trial date is hereby dismissed.
3.A directions hearing shall be fixed on a date to be determined to ensure the February 2024 trial date is maintained.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Shuren & Fang has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
WILSON J
INTRODUCTION
By application in a proceeding filed 1 November 2023 the husband sought an order vacating the trial of this proceeding as well as an order that I recuse myself for apparent bias.
He contended that he has been unsuccessful on each interlocutory application in this proceeding before me and he takes the view that he will not receive a fair and impartial trial.
As these reasons explain, the husband failed to demonstrate that the three criteria for the existence of a reasonable apprehension of bias as adumbrated by the High Court in QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs[1] were proved. In those circumstances, the husband’s application for me to recuse myself failed. It followed that at present, no basis has been shown for the trial, presently three months away, to be vacated.
[1] [2023] HCA 15.
THE HUSBAND’S CASE IN OVERVIEW
On behalf of the husband, Mr Dickson KC (who appeared with Mr Baker and Ms Renwick of counsel) submitted that the relevant apprehension of bias was constituted by a variety of events said to have occurred during the many applications when this proceeding has been before me. He submitted that taken in isolation each of the several incidents on which the husband relied do not amount to a reasonable apprehension of bias, properly so characterised, yet when aggregated, Mr Dickson submitted that according to the “double might test”[2] a fair-minded observer might take the view that I might not bring an impartial mind to bear to the determination of this litigation.[3]
[2] Johnson v Johnson (2000) 201 CLR 488, Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337, Bienstein v Bienstein (2003) 30 Fam LR 488, Isbester v Knox City Council (2015) 255 CLR 135, CNY17 v Minister for Immigration and Border Protection (2019) 268 CLR 76, Charisteas v Charisteas (2021) 273 CLR 289, QYFM [2023] HCA 15, Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577, British American Tobacco v Laurie (2011) 242 CLR 283, Michael Wilson & Partners Limited v Nicholls (2011) 244 CLR 427.
[3] Transcript 3 November 2023 T 3 L 35 – 39.
THE WIFE’S CASE IN OVERVIEW
On behalf of the wife and B Pty Ltd for whom Mr Glick KC appeared with Dr Ingleby of counsel, several propositions were advanced. They were –
(a)this proceeding has been commenced by the wife for orders under s 79A of the Family Law Act setting aside consent orders made by a registrar on 1 October 2020;
(b)in this s 79A proceeding, the wife contends that the consent orders were made by reason of deficiencies in the husband’s disclosure and by reason of fraud;
(c)the applications heard and determined thus far in this litigation[4] have related to matters that do not bear upon a s 79A application;
(d)the question in this litigation is whether or not to make a s 79A order but the question in this litigation does not relate to the composition of the board of B Pty Ltd; and
(e)if any apprehension of bias were demonstrated, which the wife and B Pty Ltd said was not, then the husband has waived any reliance upon it by reason of his failure until now to raise any alleged apprehended bias.
[4] Shuren & Fang [2023] FedCFamC1F 712, Shuren & Fang (No 2) [2023] FedCFamC1F 880, Shuren & Fang (No 3) [2023] FedCFamC1F 906, Shuren & Fang (No 4) [2023] FedCFamC1F 934.
REASONABLE APPREHENSEION OF BIAS – THE TEST
Over a large number of years and in an equally large number of authorities, significant observations have been expressed by the High Court of Australia about –
(a)apprehended bias and its constituent elements;
(b)when and to whom a recusal application should be made; and
(c)the content of the judicial duty to hear and determine cases assigned to the judge in respect of whom apprehended bias is alleged.
Each of those matters was examined in the High Court’s latest decision on point in QYFM v Minister. In the passages that follow I have extracted the more salient holdings from the reasons for judgment in that case. At this juncture it is utile to record what Jagot J in QYFM v Minister called “the duty to sit”.[5] The reasoning is attributable to the decision of Sir Anthony Mason in Re JRL; ex parte CJL[6] where his Honour held as follows –
“Although it is important that justice must be seen to be done, it is equally important that judicial officers discharge their duty and do not, by acceding too readily to suggestions of appearance of bias, encourage parties to believe that by seeking the disqualification of a judge, they will have their case tried by someone thought to be more likely to decide the case in their favour.”
[5] QYFM (op cit) at [277].
[6] (1986) 161 CLR 342, 352.
Of course, that duty applies where no actual or apprehended bias exists.
Observations to like effect as those pronounced by Mason J in Re JRL; ex parte CJL were made in Bienstein v Bienstein, although in QYFM v Minister, Gordon J adopted the nomenclature of judges having a professional obligation to sit on any case allocated to that judge unless there are grounds for recusal. Gordon J adopted the explanation given in Ebner[7] namely–
“Judges have a duty to exercise their judicial functions when that jurisdiction is regularly invoked and they are assigned to cases in accordance with the practice which prevails in the court to which they belong. They do not select the cases they will hear, and they are not at liberty to decline to hear cases without good cause. Judges do not choose their cases; and litigants do not choose their judges.”
[7] Op cit at [19].
In QYFM v Minister, Jagot J made observations about the duty to sit between paragraphs 277 and 279. Those were as follows–
A judge who is subject to a reasonable apprehension of bias in respect of a matter is disqualified from deciding that matter. But a judge who is not so disqualified generally has a duty to hear and decide the matters assigned to that judge (referred to as the “duty to sit”[8]). A further part of the judicial oath or affirmation is that the judge must “well and truly serve” the current sovereign, and their heirs and successors. Such service is performed by discharging the functions of judicial office. If, from a judge’s too ready acceptance of spurious or ill-considered applications for disqualification for apprehended bias, a party could influence the constitution of the court, another source of apprehended bias would arise — a prospect which has been described as “intolerable”[9]. Accordingly, judges are mindful that “[d]isqualification on trivial grounds creates an unnecessary burden on colleagues, parties and their legal advisers” and that they must “be careful to avoid giving encouragement to attempts by a party to use procedures for disqualification illegitimately, such as in an attempt to influence the composition of the bench or to cause delay”[10].
In applying the test for apprehended bias, with its “double might”[11] components, a judge must be faithful to their judicial duty to discharge the functions of their judicial office. This duty to sit underlies such statements as that: (a) it “would be an abdication of judicial function”[12] for a judge to adopt the approach that the judge will not sit if a party requests the judge not to do so on the ground of apprehended bias; (b) “[a]lthough it is important that justice must be seen to be done, it is equally important that judicial officers discharge their duty to sit”[13]; and (c) a conclusion of apprehended bias “must be firmly established and should not be reached lightly”[14].
Yet the intensity and demands of this duty of judicial office may also yield to circumstance. The duty to sit is not absolute, even where no reasonable apprehension of bias is involved. Accordingly, in “a case of real doubt, it will often be prudent for a judge to decide not to sit in order to avoid the inconvenience that could result if an appellate court were to take a different view on the matter of disqualification”[15]. This reflects the fact that, along with their duty to sit, a judge has a duty to ensure continuing public confidence in the administration of justice. Generally, the latter duty is best fulfilled by judges adhering to the former duty unless they are disqualified from so doing on a proper basis (be it a reasonable apprehension of bias or actual bias). But if tension between these two duties exists and is irreconcilable, the latter must prevail.”
[8] Re JRL; ex parte CJL (op cit) at 352.
[9] Ebner (op cit) at 348 [20].
[10] Australasian Institute of Judicial Administration, Guide to Judicial Conduct, 3rd ed (rev) (2022) at 12.
[11] CNY17 v Minister (op cit) at 87 [18]
[12] Livesey v New South Wales Bar Association (1983) 151 CLR 288, 294.
[13] Re JRL; ex parte CJL (op cit) at 352.
[14] Re JRL; ex parte CJL (op cit) at 374.
[15] Ebner (op cit) at 348 [20].
In those circumstances, absent my concluding that apprehended bias exists, I am duty bound or professionally obliged to sit in this case until the handing down of reasons for judgment after trial.
THE “DOUBLE MIGHT” TEST
In QYFM v Minister, Kiefel CJ and Gageler J identified the decision in Ebner as being the authoritative framework for two propositions, the first being that impartiality is an indispensable aspect of the exercise of judicial power[16] and the other being that actual or apprehended bias connotes the absence of impartiality. Their Honours held that an actuality or apprehension of bias is inherently jurisdictional in that it negates judicial power.
[16] In that respect their Honours called in aid the decisions in North Australia Aboriginal Legal Service Inc v Bradley (2004) 218 CLR 146, Forge v Australian Securities and Investments Commission (2006) 228 CLR 45 and British American Tobacco Australia Services Ltd v Laurie (2011) 242 CLR 283.
Kiefel CJ and Gageler J reiterated an observation in Charisteas v Charisteas,[17] about the tasks involved when applying the criteria identified in Ebner. Their Honours held as follows at paragraphs 37 and 38 –
“The criterion for the determination of an apprehension of bias on the part of a judge was definitively stated in Ebner by reference to previous authority[18] and has often been repeated[19]. The criterion is whether “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”[20]. The “double might”[21] serves to emphasise that the criterion is concerned with “possibility (real and not remote), not probability”[22].
Application of the criterion was identified in Ebner[23] , and has been reiterated[24], logically to entail: (1) identification of the factor which it is said might lead a judge to resolve the question other than on its legal and factual merits; (2) articulation of the logical connection between that factor and the apprehended deviation from deciding that question on its merits; and (3) assessment of the reasonableness of that apprehension from the perspective of a fair-minded lay observer.”
[17] (2021) 273 CLR 289.
[18] Ebner (op cit) at [6], 348 [22], 362–363 [79] – [81]. See also North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146, 162 –163 [27], Forge v Australian Securities and Investments Commission (2006) 228 CLR 45, 76 [64], 77 [66]–[67], British American Tobacco Australia Services Ltd v Laurie (2011) 242 CLR 283, 300 [32], 331 [139].
[19] See Charisteas v Charisteas (op cit) at 296 –297 [11] and s 501CA(4)(b)(ii) of the Migration Act 1958 (Cth).
[20] Charisteas v Charisteas (op cit) at 296 [11].
[21] CNY17 v Minister for Immigration & Border Protection (2019) 268 CLR 76, 87 [18], quoting Islam v Minister for Immigration & Citizenship (2009) 51 AAR 147, 154 –155 [32].
[22] Ebner (op cit) at 345 [7].
[23] Ebner (op cit) at 345 [8].
[24] Charisteas v Charisteas (op cit) at 296 –297 [11].
A relatively early statement of the fictional lay observer’s characteristics was given by the plurality[25] in Johnson v Johnson.[26] There, the plurality held as follows –
Whilst the fictional observer, by reference to whom the test is formulated, is not to be assumed to have a detailed knowledge of the law, or of the character or ability of a particular judge[27], the reasonableness of any suggested apprehension of bias is to be considered in the context of ordinary judicial practice. The rules and conventions governing such practice are not frozen in time. They develop to take account of the exigencies of modern litigation. At the trial level, modern judges, responding to a need for more active case management, intervene in the conduct of cases to an extent that may surprise a person who came to court expecting a judge to remain, until the moment of pronouncement of judgment, as inscrutable as the Sphinx. In Vakauta v Kelly[28] Brennan, Deane and Gaudron JJ, referring both to trial and appellate proceedings, spoke of “the dialogue between Bench and Bar which is so helpful in the identification of real issues and real problems in a particular case”[29]. Judges, at trial or appellate level, who, in exchanges with counsel, express tentative views which reflect a certain tendency of mind, are not on that account alone to be taken to indicate prejudgment. Judges are not expected to wait until the end of a case before they start thinking about the issues, or to sit mute while evidence is advanced and arguments are presented. On the contrary, they will often form tentative opinions on matters in issue, and counsel are usually assisted by hearing those opinions, and being given an opportunity to deal with them.
[25] Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ.
[26] (2000) 201 CLR 488, 493 (at [13]).
[27] Webb v R (1994) 181 CLR 41, 73, per Deane J.
[28] (1989) 167 CLR 568, 571.
[29] See also Re Lusink; ex parte Shaw (1980) 55 ALJR 12, 15 (Murphy J).
Those observations are relevant in the determination of this recusal application for several reasons. First, they encapsulate the desirability of modern trial judges participating in active case management. Second, they contain a statement in unqualified terms that the reasonableness of any suggested apprehension of bias is to be considered in the context of ordinary judicial practice in respect of which the governing rules and conventions are not frozen in time. Third, they refer to the helpful dialogue between Bench and Bar (a matter identified as early as 1989 in Vakauta v Kelly[30]) in the identification of real issues and real problems in a particular case. Fourth, they contain the statement that judges are not expected to wait until the end of the case before starting to think about the issues nor are judges expected to sit mute while evidence is advanced and arguments are presented.
[30] Vakauta v Kelly (op cit) at 571.
On this application, the husband contended that in arguendo on various applications heard by me, I made statements that revealed the unlikelihood that I would bring an impartial mind to bear to the determination of this s 79A application. As the reasoning set out below reveals, in my view the transcript references on which the husband relies were –
(a)taken out of context; or
(b)demonstrated no more than active participation in case management to get to the real issues and real problems in the relevant application then before me.
In Johnson v Johnson, Kirby J held the adversary system depends on vigorous interaction not only between parties and their representatives but also between the adjudicator (relevantly here, me) and those persons.
It has been pointed out time and again that the hypothetical fair-minded lay observer is a deliberate and necessary construct. As was observed in Charisteas v Charisteas, the construct –
(a)tethers the court’s analysis to the ultimate purpose of maintaining public confidence in the impartiality of the judicial system; and
(b)provides the standard by which courts address the apparent departure from standards of impartiality and independence, essential to the maintenance of public confidence in the judicial system.
The hypothetical fair-minded lay observer must be placed in a contemporary setting.
Being “lay”, the hypothetical fair-minded lay observer is not to be assumed to have a detailed knowledge of the law or of the character or ability of a particular judge, as was held in Johnson v Johnson[31] and in Charisteas v Charisteas.[32]
[31] Johnson v Johnson (op cit) at [13].
[32] Charisteas v Charisteas (op cit) at [12].
Being “fair-minded” the lay observer –
(a)is neither complacent nor unduly suspicious;[33]
(b)is cognisant of human frailty[34]and is all too aware of the reality that the judge is human; and
(c)understands that information and attitudes consciously and conscientiously discarded might still sometimes have a subconscious effect on even the most professional decision-making.[35]
[33] Johnsonv Johnson (op cit) at 508.
[34] Ebner (op cit) at [8].
[35] CNY17 v Minister (op cit) at [28].
It is utile to restate the propositions propounded by Kiefel CJ and Gageler J about the three matters logically entailed in applying the Ebner criterion of the double might test. While paraphrasing the three, they are –
(a)first, identification of the factor which is said might lead the judge to resolve the question other than on its legal and factual merits;
(b)second, articulation of the logical connection between that factor and the apprehended deviation from deciding that question on its merits;
(c)and third, assessment of the reasonableness of that apprehension from the perspective of a fair-minded lay observer.
Gordon J in QYFM v Minister held that the Ebner test has two steps. They were –
(a)the identification of what is said might lead to a judge deciding a case other than on its legal and factual merits; and
(b)there must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on the merits.
Her Honour held that once those two steps are undertaken, the reasonableness of the asserted apprehended bias can then ultimately be assessed, citing Concrete Pty Ltd v Parramatta Design and Developments Pty Ltd.[36]
[36] (2006) 229 CLR 577.
Her Honour held that four aspects of the test were critical. They were –
(a)the test is objective, not requiring a conclusion about the judge’s actual state of mind;
(b)the test is one of possibility not probability;[37]
(c)the test is not prescriptive about the way in which a reasonable apprehension might arise; and
(d)the adjective “lay” in reference to the fair-minded observer is critical and that observer is a member of the public.[38]
[37] Re Refugee Review Tribunal; ex Parte H (2001) 75 AJLR 982 (at 28]).
[38] Webb v R (op cit) at 52.
Gordon J held that the conventional practice in Australia is for the judge who is alleged to be affected by apprehended bias to determine whether that judge is disqualified and such a practice applies whether the judge sits alone or as a member of an appeal bench. Edelman J expressed his Honour’s support for that approach as adumbrated by Gordon J by a wealth of authority.[39]
[39] Mann v Northern Territory News (1988) 88 FLR 194, 194, Bainton v Rajski (1992) 29 NSWLR 539, 540, Duke Group Ltd (In liq) v Pilmer [No 3] [2001] SASC 215, [71], Setka v Gregor [2011] FCAFC 64, [2] –[4], Slaveski v Attorney-General (Vic) [2013] VSCA 165, [6], Valdez v Frazier [No 3] [2015] FamCAFC 205, [8], Brisciani v Piscioneri [No 1] [2016] ACTCA 30, [1], Brisciani v Piscioneri [No 2] [2016] ACTCA 24, [4], Brisciani v Piscioneri [No 3] [2016] ACTCA 31, [1], Amos v Wiltshire [2016] QCA 70, [1] –[4] , [18], SZVBN v Minister for Immigration & Border Protection [No 2] [2017] FCA 123, [1] –[2], SZVBN v Minister for Immigration & Border Protection [No 3] [2017] FCA 126, [1] –[2], Jackson v R [2019] VSCA 65, [5] , [34], Rayney v Western Australia [2020] WASCA 206, [13], Rayney v Western Australia [No 2] [2020] WASCA 207, [1], Rayney v Western Australia [No 3] [2020] WASCA 209, [1], Frugtniet v Secretary, Dept of Social Services (2021) 285 FCR 159, 160 [2], Wark v Western Australia [No 2] [2023] WASCA 67, [6], Wark v Western Australia [No 3] [2023] WASCA 68, [1], Masi-Haini v Minister for Home Affairs [2023] FCA 430, [3] – [7]. See also Erris Promotions Ltd v Commissioner of Inland Revenue (2003) 16 PRNZ 1014, 1019 [22].
The emphasis on there being a “logical connection” between the circumstances of the grounds said to form the basis of the recusal application and the matter ultimately to be decided was pointed up by Steward J in QYFMv Minister yet his Honour held that there was no relevant logical connection on the facts of the case. Gleeson J likewise was of the view that there was no basis to conclude that the double might test had been properly invoked.
MICHAEL M WILSON & PARTNERS
During debate on 3 November 2023, heavy reliance was placed by counsel for the wife and B Pty Ltd on the High Court’s decision in Michael Wilson & Partners Ltd v Nicholls,[40] judgment in which was handed down on 1 December 2011, subsequent to Johnsonv Johnson and Ebner yet earlier that CNY17, Isbester, Charisteas v Charisteas and QYFM v Minister. The decision in Michael Wilson has not been disapproved nor overruled. It continues to retain currency in the evolution of High Court authorities on apprehended bias commencing with Webb v R.[41] Whether it might be said to be fact-specific does not in any way diminish the impact and importance of the observations of the plurality[42] and of Heydon J who agreed in the result although for separate reasons. The facts of the case have no parallel to those with which these reasons are concerned yet it is necessary to briefly recite the facts of Michael Wilson so as to better understand the court’s reasoning.
[40] (2011) 244 CLR 427.
[41] Webb v R (op cit) at 41.
[42] Gummow ACJ, Hayne, Crennan & Bell JJ.
Michael Wilson & Partners Ltd (‘MWP’) carried on business as a law firm, practising in Kazakhstan. MWP was controlled by Michael Wilson. A solicitor called Emmott became a director of and shareholder in MWP in January 2002. Another solicitor, Nicholls, was employed by MWP as a senior associate between 2004 and 2006. A third solicitor, Slater, was employed by MWP as an associate from September 2005 to January 2006. MWP alleged that when Emmott, Nicholls and Slater left MWP, they conspired to divert business and clients away from MWP for their own benefit. By reason of the relief sought by MWP being in several jurisdictions, MWP commenced an arbitration in London against certain parties as well as a proceeding in the Supreme Court of New South Wales. The London arbitration ran from November 2008 to February 2009. The proceeding in the Supreme Court of New South Wales ran between June and September 2009. In February 2010 the London arbitrators refused relief to MWP against Emmott, finding that once Emmott left MWP clients would not have remained with MWP as they did not wish to deal with Mr Wilson. As against Nicholls and Slater, the arbitrators found that the relief ordered against them in the Supreme Court was the extent of their liability. MWP challenged the manner in which Einstein J conducted the proceeding in the New South Wales Supreme Court, contending that his Honour had exhibited apprehended bias on several occasions in several different ways. MWP twice submitted that Einstein J should recuse himself on the basis of a reasonable apprehension of bias. Einstein J dismissed both applications. The case went on appeal to the Court of Appeal then later to the High Court.
The High Court narrated various interlocutory applications made to Einstein J by MWP on which MWP based its contentions that Einstein J exhibited a reasonable apprehension of bias. Having regard to the fact that in this recusal application the husband relies on several interlocutory applications before me, it is utile to focus on each such application before Einstein J if for no other reason than to observe how more serious were the circumstances before Einstein J than before me, yet the High Court held no reasonable apprehension of bias had been exhibited.
In October 2006 Palmer J made freezing orders against Nicholls and Slater requiring them to file affidavits identifying all of their assets. Bergin J later ordered by consent that disclosure of information in those affidavits was restricted to MWP’s legal advisors. During 2007 and 2008, Einstein J heard and determined several applications brought by MWP without notice to the defendants.
The first was an application said to have been urgent, brought by MWP without notice for orders permitting MWP to use the information disclosed in the affidavits of Nicholls and Slater for the purpose of commencing a proceeding in the Eastern Caribbean Supreme Court and in the High Court of the British Virgin Islands. The foreshadowed proceeding in the British Virgin Islands was to appoint receivers to entities allegedly controlled by Nicholls and Slater. Einstein J dealt with that application in closed court and made orders as sought by MWP. Einstein J ordered that MWP’s notice of motion and the affidavits on which MWP relied not be placed on the court file and that no part of what occurred during the hearing or the transcript be communicated to any person other than a legal advisor of MWP.
On 28 March 2007 the proceeding returned before Einstein J upon documents having been produced pursuant to a subpoena. On MWP’s application, Einstein J made orders for the use of documents produced in response to the subpoena and stood the matter over to 30 March 2007. The hearing on 28 March was conducted in closed court and orders preventing the communication of what happened in court that day were also made.
On 30 March 2007, Einstein J heard the litigation again, once more in closed court with orders being made preventing communication of what happened before his Honour that day. On that day counsel for MWP informed Einstein J that an order for the appointment of receivers had been made in the British Virgin Islands. The proceeding was adjourned to 4 April 2007 to enable document production pursuant to the subpoena to be completed.
On 5 April 2007, on MWP’s application, Einstein J made orders lifting restrictions on publication previously made and his Honour directed MWP to file and serve on the respondents redacted copies of the notices of motion, supporting affidavit material, orders and the transcript of the hearing on 26 March 2007.
On 11 April 2007[43] MWP applied again, ex parte, seeking orders permitting MWP to make a criminal complaint to Swiss authorities and to assist the receiver in the British Virgin Islands to provide a money laundering report to the Financial Investigation Authority in the British Virgin Islands. MWP informed Einstein J that the application was urgent because, so counsel argued, “as more time passes, more and more of the assets which are in the hands of Emmott, Nicholls and Slater… will be dissipated and unrecoverable”. Einstein J made the orders sought, delivered reasons for judgment on 12 April 2007 and adjourned the further hearing of the proceeding to 6 June 2007.
[43] The plurality expressed uncertainty about whether the appearance was on 11 or 12 April 2007 ([45]).
On 6 June 2007, Einstein J further adjourned the proceeding to a date in July, upon his Honour being satisfied that no alteration to the then existing regime was required.
The hearings on 6 June and the one in July were concluded with orders being made preventing disclosure of what had taken place in terms similar to the earlier ex parte applications.
On 11 October 2007 counsel for MWP informed Einstein J that investigations in England, Switzerland and in the British Virgin Islands were continuing. MWP requested Einstein J to direct that material used in various earlier applications no longer be retained in his Honour’s chambers but be placed in a sealed envelope on the court file and that the envelope not be opened until further order. Einstein J made orders as requested, giving reasons for judgment on 18 October 2007.
On 12 May 2008, the defendants requested Einstein J to disqualify himself from hearing any further interlocutory applications in the proceeding. The bases on which that application was made were not evident to the plurality in the High Court, which inferred that the application for disqualification was based on what happened in the earlier interlocutory applications.
In support of the application for orders that Einstein J disqualify himself from hearing any further interlocutory applications, the defendants relied on five main matters. They were –
(a)Einstein J had entertained controversial ex parte applications brought by MWP in closed court on seven separate occasions;
(b)Einstein J had delivered three sets of confidential reasons for judgment;
(c)Einstein J had made an order designed to expose the defendants to criminal investigations overseas;
(d)Einstein J had invited MWP to prepare written submissions that were adopted in the preparation of reasons; and
(e)Einstein J had not disclosed the confidentiality proceedings to the defendants when an opportunity to do so naturally arose.
Einstein J rejected the disqualification application. The trial before Einstein J proceeded and MWP succeeded. The defendants appealed to the Court of Appeal which upheld the defendants’ appeal. MWP obtained special leave to appeal from the High Court.
In the course of the plurality’s reasons in the High Court, consideration was given to the manner in which the Court of Appeal erroneously allowed the appeal from Einstein J. The plurality held at paragraph 67 of its reasons that it was fallacious to conclude that because one side lost the litigation before Einstein J his Honour was biased.
The plurality further held the central and determinative question was – might what was done in connection with MWP’s ex parte application reasonably cause a fair-minded lay observer to apprehend that the judge might not bring an impartial mind to the resolution of a question for decision at trial.
The plurality addressed the concern expressed by Basten JA that the party appeared before Einstein J on seven separate days in closed court. The “concern” was said to reside in “the probability of finding the evidence led at trial to a pre-existing mental structure.”[44] The plurality in the High Court observed the need to carefully analyse the connection asserted between the conduct and disposition of the interlocutory applications and the possibility of prejudgment arising from circumstances in which the judge’s mind becomes familiar with the character of the plaintiff’s case to an extent that consciously or subconsciously, there will be a tendency to place the further evidence within the pre-existing mental structure.
[44] (2010) 243 FLR 177, 199 (at [85])
The plurality held that the fact that Einstein J made several ex parte interlocutory orders and on each occasion decided that the applications, the supporting material, the reasons and the orders themselves not be disclosed to one side of the litigation did not found a reasonable apprehension of prejudgment of the issues to be fought at trial.
The plurality held that in none of the applications heard by Einstein J was his Honour required to make, nor did his Honour make any determination of any issue that was to be decided at trial. That observation became an important buttress in the wife’s and B Pty Ltd’s contention on this recusal application when each argued the applications that have been determined to date by me have no bearing whatsoever on the subject of the s 79A application in respect of which a trial is pending. At paragraph 72 of the plurality’s reasons it was held that in none of the applications before Einstein J was it necessary for his Honour to make any findings about the reliability of any party or witness and in none did his Honour do so.[45] The plurality of the High Court further held that Einstein J was not required to make any choice between competing versions of events. The plurality held that all Einstein J was required to do, and all his Honour found, was that apparently credible evidence existed of a sufficient state of dissipation of assets to warrant the making of the confidentiality order that his Honour duly made. Credit was not challenged. No finding about credit was made.
[45] That was contrasted to the circumstances in R v Watson; ex parte Armstrong (1976) 136 CLR 248.
The plurality held (in which Heydon J agreed) that the Court of Appeal erred in overruling Einstein J’s refusal to recuse himself.
THE HUSBAND’S CONTENTIONS ON THIS RECUSAL APPLICATION
In addition to mounting a forceful viva voce recusal application on 3 November 2023, on behalf of the husband a 15 page written summary of argument was prepared in which various contentions were advanced, each calling for examination.
In essence, the husband contended that by reason of the aggregation of a collection of individual factors, a reasonable apprehension of bias had been exhibited such that I should recuse myself. The husband’s counsel submitted that taken individually, those matters could not and did not amount to apprehended bias. Yet when they were considered in aggregate, apprehended bias was thereby demonstrated. Counsel for the wife and for B Pty Ltd submitted that even in aggregate the issues on which the husband relied do not amount to apprehended bias. Further, counsel for the wife submitted that the incidents on which the husband relied were often taken out of context and when the true context of the relevant incident was properly understood, then either a legitimate enquiry was being made by me or the exchange disclosed proper case management, as was not only permitted but which was encouraged by the High Court.
To better understand what follows, it is necessary for me to delve into the several applications that were brought before me subsequent to the decision handed down on 24 August 2023.
FIRST INTEGER ALLEGED – JUDGMENT DELIVERED 24 AUGUST 2023
At the outset it is necessary to repeat that the initiating application in this proceeding is for relief under s 79A of the Family Law Act. The wife seeks orders setting aside consent orders made by a registrar on 1 October 2020. Among the issues to be determined at the trial of the s 79A application will be the sufficiency of the parties’ disclosure of assets leading to the consent orders being made. Issues about the present composition of the board of B Pty Ltd is not among the matters that fall for determination on the hearing of the s 79A application.
On 3 November 2023 counsel for the husband informed me that my decision made 24 August 2023 is the subject of appeal, to be heard on 6 December 2023 and that the husband appeals against the order restricting him from taking any step to remove the wife as a director and secretary of B Pty Ltd. Counsel for the husband submitted on 3 November 2023 that every shareholder in B Pty Ltdpossesses a right to call a shareholders’ meeting yet the effect of paragraph 5(a) of the orders made on 24 August 2023 is that any such right does not extend to the husband. Counsel for the husband submitted that a fair-minded lay observer might take the view, based on the terms of paragraph 5(a) of the orders made 24 August 2023, that I might not bring an impartial mind to bear on the hearing and determination of the trial of this s 79A proceeding.
Before examining that contention in detail, it is important to point out that counsel for the husband omitted several issues when advancing his propositions about the 24 August 2023 orders. First, paragraph 5(a) of the orders made that day is expressed to be “pending further order of this court”, wording commonly employed by judges sitting in courts across the Commonwealth of Australia to put a temporal limitation on the duration in the operation of the order. For example, interim injunctions are routinely expressed to operate until the hearing and determination of the trial of the proceeding “or further order”, indicating that the orders are not permanent and that they can be reviewed if a party wishes to apply for such a review at any time up until the hearing and determination of the proceeding at trial.
Paragraph 5(a) of the orders was expressed to be subject to such a temporal limitation, namely, “pending further order of this court”. The husband has not sought to avail himself of the opportunity to apply to the court in respect of paragraph 5(a). The background facts leading to the orders made on 24 August 2023 related to the husband’s application of the provision of the Corporations Act for the removal of a director of B Pty Ltd. He did not apply the relevant stipulations of the Corporations Act. In my reasons[46] I examined the manner in which the husband purported to remove the wife as a director and the manner in which his purported removal contravened various provisions of the Corporations Act. The wife applied for orders preventing the husband from engaging in a repeat of the steps leading to her application declaring as invalid her purported removal as a director and secretary of B Pty Ltd. An order in the form of paragraph 5(a) was made but it was not of indefinite duration. Naturally, as a shareholder in B Pty Ltd the husband’s company enjoys what has been described academically as a shareholder’s “precious right” to call for the holding of an extraordinary general meeting. In this instance, the exercise of that precious right is subject to court order. Contrary to the submissions of counsel for the husband, there was no unqualified or absolute prohibition on the husband from taking further steps to remove the wife as a director and secretary of B Pty Ltd embedded in paragraph 5(a) of my 24 August 2023 orders.
[46] Shuren & Fang [2023] FedCFamC1F 712.
Counsel for the husband submitted that the effect of my 24 August 2023 orders (I assume he confined that comment to paragraph 5(a) of my orders made 24 August 2023) was to put his client in an entirely different position to that of the wife.[47] He submitted that he could only call a meeting of shareholders upon obtaining an order to do so whereas the wife was under no such constraint. Counsel for the husband submitted that the requirement for the husband to apply to this court before any shareholders’ meeting is convened by him is not a requirement imposed on any of the other shareholders so the terms of paragraph 5(a) indicate prejudgment of this case.[48]
[47] Transcript 3 November 2023 T6 L8.
[48] T7 L31.
It is important to record that authority exists[49] to the effect that where it is alleged that a reasonable apprehension of bias exists based upon a collection of distinct integers, those integers must be aggregated into a composite whole and that the reasonable apprehension of bias must be demonstrated by reference to that composite aggregation of the discrete integers. In other words, ordinarily it is insufficient for a party to assert that a reasonable apprehension of bias exists based on a discrete stand-alone incident in circumstances where a collection of incidents is said to ground the reasonable apprehension of bias. The issue was not developed by the husband’s counsel in his viva voce address on 3 November 2023.
[49] McMillan J considered the authorities in AZ v The Age (No 2) [2013] VSC 436 (at [20]). They include the Federal Court’s treatment in Parramatta Design & Developments Pty Ltd v Concrete Pty Ltd (2005) 144 FCR 264, subsequently approved by the Hight Court.
EVENTS PRIOR TO THE HEARING ON 11 OCTOBER 2023 – 18 SEPTEMBER 2023
On 18 September 2023 this proceeding was before me pursuant to paragraph 6 of the orders made on 24 August 2023.
On 18 September counsel for the wife sought a trial date for the hearing and determination of the bifurcated s 79A application on an estimated duration of three days. By the time the mention was conducted on 18 September 2023, the husband had filed a notice of appeal against my orders made on 24 August 2023. As at the date of the handing down of these reasons, that appeal has not been heard. Both counsel agreed that four days, namely 20, 21, 22 and 23 November 2023 were suitable for the trial of the s 79A application.
Counsel then appearing for the husband sought a return date for the hearing of an interlocutory application filed on 15 September 2023. That application was filed by the husband. In it, the following relief was sought –
1)That the Wife be restrained from interfering in, or seeking to interfere in, the day-to-day management of [B Pty Ltd].
2)That the Wife be required to give the Husband at least two business days’ notice before attending [B Pty Ltd’s] Offices at [CC Street], [Suburb F], in the State of Victoria.
Counsel for the husband requested that the interlocutory application filed 15 September 2023 be heard on a date offered by me, namely 17 October 2023.[50] I duly fixed that date. No suggestion of unseemly urgency in the allocation of the date for the trial of the s 79A application or of the hearing of the interlocutory application was made by any counsel on 18 September 2023. A sticking point emerged about a matter of valuation. Counsel for the husband wanted to engage in a lengthy debate on that issue. I was part heard in another case in the Major Complex Financial Proceedings List so I offered counsel for the husband 11.30am on Thursday 21 September 2023 for that valuation issue to be fully debated, which counsel for the husband accepted and accordingly I adjourned the further hearing of this proceeding to 11.30am on Thursday 21 September 2023.
[50] Transcript 18 September 2023 T 4 L 22 – 47 and T 5 L 1 – 15.
21 SEPTEMBER 2023
The proceeding returned before me on 21 September 2023 at a time when I was sitting in Sydney so the hearing was by video. On that hearing, the husband was represented by senior counsel who had not previously appeared on any aspect of this proceeding before me. Mr Glick KC for the wife informed me that he put the husband’s counsel on notice that the husband’s application recorded in his 15 September 2023 application in a proceeding for orders that the wife be restrained from interfering in or seeking to interfere in the day-to-day management of B Pty Ltd was an injunction no court will ever make.[51] During the course of debate on 21 September 2023, Mr Glick KC outlined how the wife cast her case for orders under s 79A of the Family Law Act, submitting that the wife relied on the provisions dealing with obtaining orders by suppressing evidence. Mr Glick explained that valuations of real properties as at historic dates were involved. Mr Glick submitted that the parties should try to meet the 20 November 2023 date.[52] On behalf of the husband his senior counsel submitted that the wife bore the evidentiary burden to prove what was the true value of properties at a particular date which is not a matter for a single expert and that the husband should not be required to pay for the wife to adduce evidence to prove her case.
[51] Transcript 21 September 2023 T 4 L 16.
[52] Transcript 21 September 2023 T 15 L 14.
I raised with Ms BB, then appearing for the husband, that costs associated with the single expert could be adjusted after the single expert’s report was to hand but that in view of the proximity of the trial on 20 November 2023, a single expert should be retained.[53]
[53] T 19 L 9.
Ms BB submitted that the husband’s application for orders restraining the wife from interfering with the day-to-day management of B Pty Ltd would not be heard prior to a notice of extraordinary general meeting called by the wife to remove the husband as a director of B Pty Ltd, scheduled to be held on 16 October 2023.
Ms BB informed me that the husband was proposing to commence an oppression proceeding as a standalone application before me.[54] She submitted that if there was no hearing prior to 16 October when the extraordinary general meeting of shareholders was to be held, the date 17 October 2023 became nugatory.[55]
[54] T 21 L 40.
[55] T 23 L 20.
Pausing at that juncture in the narrative, on 3 November 2023 counsel for the husband submitted several times that no urgency existed in the hearings conducted on and after 11 October 2023. That was a curious submission having regard to the contentions advanced by Ms BB on 21 September 2023 that her client sought orders in the nature of a timetable to have a prospective but unissued oppression proceeding heard.[56] In response, I told Ms BB that I would not make orders in relation to an oppression proceeding which the husband had not even issued.[57] Ms BB said she understood and would not press the matter further.[58] In the final moments of the hearing on 21 September 2023 Ms BB said the following which became relevant to the 11 October application –
[MS BB]: The only thing I wanted to say, your Honour – it’s simply because Mr Glick has been emphatic about matters going on the court record and that he wants it to be – but we in fact did make a contact – my instructor did contact by letter on 31 August the other side asking for variations of the intervention order to permit my client to partake as a shareholder. We did not hear a thing back, no response, until 19 September. And that response was, “You can do anything you like in writing”, but, of course, his rights as a shareholder are still compromised even if he could do anything in writing, and he’s not permitted to engage an agent under the terms of the IVO and also - - -
MR GLICK: I’ve made it clear, your Honour, we will cooperate. What they want they can have. I’ve made it clear three times. I will say it a fourth time. If they want for the purposes of the extraordinary general meeting of the shareholders a variation of the agreement, they can have it.
HIS HONOUR: Okay. So - - -
[MS BB]: Yes. Your Honour, I don’t want to harass – but there are processes. Your Honour will know that from – we have to get the police onboard. They have to approve it, etcetera, etcetera. But that’s all on record now.
HIS HONOUR: Okay. Well, so this discussion about valuations is stood over until 9.30 on 28 September. It will be by Teams unless I’m back in the fair city of Melbourne. Whether we have the privilege of an appearance by [Ms BB] is within her control and thank you for alerting me to what you have. Is there anything else we need to talk about today?
[56] T 24 L 5.
[57] T 24 L 11.
[58] T 24 L 13.
The husband was the subject of an intervention order which prevented him from being within a prescribed distance of the wife. The intervention order prevented his attendance at the extraordinary general meeting of shareholders then scheduled to be held on Monday 16 October 2023. The husband required a variation to the intervention order so that he could attend at and participate in the extraordinary general meeting of the members of B Pty Ltd. Mr Glick KC indicated his client was willing to provide a variation to the intervention order.
The proceeding was otherwise stood over to 28 September 2023. On that day, a mention was heard in Sydney. It led to orders being made concerning the appointment of a single expert witness to prepare valuation reports. The trial date of 20 November 2023 was vacated in favour of a new date for a six day trial commencing on 2 February 2024.
The extraordinary general meeting was to be held on Monday 16 October 2023. The husband’s application issued on 15 September 2023 had been fixed for hearing on Tuesday 17 October 2023 pursuant to orders made on 18 September 2023. The Magistrates’ Court wrote to the husband’s solicitors on 11 October 2023 indicating that on 12 October 2023 the Magistrates’ Court would consider the application to vary the intervention order the operation of which in its unamended form prohibited the husband from attending the extraordinary general meeting of shareholders in B Pty Ltd. It seems that the wife had refused the husband’s request to agree to adjourn the convening of the extraordinary meeting of shareholders in B Pty Ltd.
On 11 October 2023 I was sitting in Sydney. At 11.30am or thereabouts on 11 October 2023 the husband’s solicitors sent an email to my associate seeking the urgent listing of this proceeding. Consonant with the imperatives of the Major Complex Financial Proceedings List of judicial availability and flexibility, I arranged my judicial workload on that day to accommodate the husband’s request for an urgent hearing at 2.15pm that day. The hearing was duly held.
SECOND INTEGER ALLEGED – THE 11 OCTOBER 2023 HEARING
Debate on 11 October 2023 commenced at 2.20pm and ended at 4.33pm. The husband was represented by King’s Counsel and junior counsel. Mr Glick KC appeared for the wife.
The husband’s written submissions on this recusal application and senior counsel’s viva voce address on 3 November 2023 did not present anything remotely approximating a complete (or for that matter, balanced) version of what actually took place on 11 October 2023. The observations that follow have been extracted from the transcript of the proceeding on that day in this proceeding.
Immediately after appearances were announced, Kings Counsel for the husband who had not previously appeared in this litigation identified the nature of the husband’s urgent application. He said the following[59] –
“MR STRAHAN: Yes. Thank you, your Honour. Your Honour, this is an application for urgent interim relief to prevent a meeting which my client contends would resolve to remove him as a director of [B Pty Ltd], which is the second respondent in this proceeding. Your Honour, the application materials, and the matters that I want to take your Honour to, are as follows. There’s an amended application, dated 27 November 2023. And an application - - - ”
[59] Transcript 11 October 2023 T 2 L 13 - 19.
Unambiguously, the husband sought orders enjoining the convening of a properly requisitioned extraordinary general meeting. King’s Counsel for the husband indicated that he relied on –
(a)the husband’s amended application dated 27 September 2023; and
(b)the husband’s affidavit made 27 September 2023.
King’s Counsel for the husband opened by indicating that the husband sought an order restraining B Pty Ltd from removing the husband as a director. He said[60] that application was listed for 17 October 2023. He said it appeared that a hearing was to take place in the Magistrates’ Court which would likely see a variation to the intervention order. He said[61] –
If that happens, there will be nothing to prevent the meeting from happening on the 16th, which would render the application presently listed before your Honour on the 17th as nugatory, because the meeting would already have happened.”
[60] T 3 L 16.
[61] T 3 L 30 – 33.
After little more than that broad outline, Mr Glick KC informed me that the application was opposed. He said –
“Mr Strahan, regrettably, has not had the benefit of earlier hearings. And, your Honour, we oppose it. We think it’s utterly misconceived. It’s contrary to the Corporations Act. It’s contrary to every principle of law. And it’s contrary to their own submissions.”[62]
[62] T 4 L 45 – T 5 L 1.
I asked Mr Strahan KC what the pressing urgency was. He responded by stating that one reason for bringing the application was an apprehended fear that if the husband were removed from the office of director of B Pty Ltd, that could trigger an event of default in the lending facility between J Bank and B Pty Ltd.[63] That said, Mr Strahan conceded that no evidence was before the court that the lender had been informed of “these matters”, which I took him to mean the convening of the extraordinary general meeting on 16 October 2023 or of this urgent application for orders preventing the convening of that meeting. Mr Strahan KC submitted as follows[64] –
“But the only responsible thing we thought we could do was bring the matter before your Honour so your Honour could make a determination about whether you thought it was appropriate to preserve the subject matter of the proceeding”.
[63] T 7 L 26.
[64] T 9 L.
Mr Strahan corrected himself after I pointed out that the subject matter of the proceeding was the s 79A application and not the husband’s status as a director of B Pty Ltd.[65] Mr Strahan’s correction was consistent with the wife’s statement of claim filed 22 May 2023 and the husband’s defence dated 8 June 2023 in neither of which is the husband’s status as a director of B Pty Ltd pleaded. Mr Strahan’s correction was appropriate and also accurate because issues concerning the composition of the board of B Pty Ltd are not and never have been the subject of this proceeding for the simple reason that this proceeding is for s 79A relief.
[65] T 9 L 44 – T 10 L 3.
Mr Strahan made unmistakably plain that the urgent application being brought on by the husband at 2.15pm on 11 October 2023 was the husband’s application to restrain the convening of the meeting on 16 October 2023.[66] Mr Strahan repeated that the matter was urgent.[67] Mr Strahan agreed that no evidence existed of what J Bank might do in the event of default by B Pty Ltd.[68] Mr Strahan indicated that the wife’s application to vary the intervention order was the subject of the husband’s consent.[69]
[66] T 11 L 11.
[67] T 14 L 6.
[68] T 15 l 20 – 25.
[69] Shuren & Fang (No 2) [2023] FamCFC1F 888 (at [22]).
On behalf of the wife Mr Glick made a collection of submissions. Many were recorded in my ex tempore reasons handed down although when I handed down those reasons I did not have the benefit of the transcript of argument conducted on 11 October 2023 which I now do for the purpose of preparing those reasons.
Mr Glick submitted that the husband’s application and conduct to restrain the convening of the 16 October 2023 extraordinary general meeting of B Pty Ltd’s shareholders was “a tactical contrived application”.[70] Mr Glick submitted that the husband himself has informed the court that if the wife was unhappy she could do as the Corporations Act authorised her to do, namely, to call a meeting of shareholders to dismiss the husband from the board of B Pty Ltd. The husband’s legal representatives seized upon Mr Glick’s characterisation of that entitlement as a shareholder’s “precious right”.[71]
[70] Transcript 11 October 2023 T 20 L 35 and 36.
[71] The husband’s written submissions at paragraph 21 referred to those words in parenthesis. In his address on 3 November 2023, senior counsel for the husband also referred to the words “precious right” at T 4 L 43.
Mr Glick KC pointed out that the husband had not challenged in any form the documentation or mechanism pursuant to which the extraordinary general meeting was to be held.
Mr Glick KC submitted that the husband only brought the urgent application that I listed at 2.15pm on 11 October 2023 because the Magistrates’ Court informed the husband’s legal representatives that the application to vary the intervention order would be heard almost immediately. Mr Glick KC submitted in the intervening period between 24 August 2023 and 11 October 2023, the case was before me on 28 September 2023 when the husband’s senior counsel announced that the husband’s remedies for oppressive conduct would be pursued, yet as at 3 November 2023 no such application had been brought.
Mr Glick KC relied on my decision in Brayton & Brayton[72] to contend that in relation to the injunction sought by the husband, the husband was unable to establish the existence of a serious issue to be tried or that some irreparable harm would be suffered. Mr Glick said the husband lacked bona fides in the making of the urgent application he made on 11 October 2023.[73]
[72] [2021] FedCFamC1F 337.
[73] T 23 L 7.
That was because the husband sought an urgent hearing on 11 October 2023 once he learned that the Magistrates’ Court would entertain the application to vary the intervention order prior to late 2023 when the meeting was scheduled to be held.[74]
[74] T 23 L 25 – 28.
Mr Glick KC submitted that the husband advanced an inconsistent position in relation to the hearing fixed for 17 October 2023 because the husband initially sought orders for the 17 October 2023[75] hearing to be vacated and that the hearing otherwise fixed for 17 October be heard earlier than 16 October 2023. Then, the husband wanted the hearing on 17 October 2023 to go ahead but that the 16 October 2023 extraordinary general meeting of shareholders be cancelled.
[75] T 23 L 30 – 42.
Next Mr Glick KC submitted that the party the husband wanted restrained was B Pty Ltd (the company) whereas the proper person to be restrained was not the company but its shareholders, two of whom (Mr FF and Ms N) had not been given notice of the application brought on urgently at 2.15pm on 3 November 2023.
Mr Glick KC addressed the husband’s application that the wife be restrained from interfering in the day-to-day management of B Pty Ltd. Mr Glick submitted that as a director the wife was bound by duties to the company as a whole and that since cases such as Australian Securities and Investments Commission v Healey[76] as well as Morley v Statewide Tobacco Services,[77] a director has been required to be an active participant in the management of the company he or she directs. Mr Glick KC further submitted that in accordance with the observations of Gleeson CJ in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd,[78] an injunction should only be granted if it goes to protect some final relief and no final relief is sought in this case for the wife to be restrained from entering B Pty Ltd’s premises.
[76] (2011) FCR 291.
[77] [1993] 1 VR 423.
[78] (2001) 208 CLR 199.
In his reply, Mr Strahan KC submitted that an order should be made preserving the position as it inured as at 11 October 2023.[79]
[79] T 46 L 23.
On hearing of this recusal application, the husband’s counsel argued that in relation to the 11 October 2023 hearing I allegedly dismissed an application that he said was not clearly before me on that day.[80] He submitted that the husband’s counsel on 11 October were not pressing for the hearing of the entire application. He submitted[81] that I was required to deal with applications that were before me, not with applications before me on later dates. Senior counsel for the husband repeated his contention[82] saying that I dismissed an application that was returnable on some later day.
[80] Transcript 3 November 2023 T 18 L 39.
[81] T 7 L 35 – T 9 L 4.
[82] T 15 L 45.
During debate on 3 November 2023, senior counsel for the husband (who was not senior counsel for the husband who appeared on 11 October 2023) informed me that I was confused on 11 October.[83] Aside from the staggering content of that submission, it was wrong. I informed senior counsel then appearing that any such confusion, if there was any (and there was not, at least not on my part) that the so-called confusion may have been the product of “advocacy that did not go in the right direction”.[84] In response, senior counsel for the husband argued that the confusion might be perceived by a lay observer that no point was to be served in hearing the argument on 17 October because the meeting on 16 October 2023 was not going to be postponed. He went on to submit that no one was asking for the application returnable on 17 October 2023 to be heard at 2.15pm on 11 October 2023.
[83] Transcript 3 November 2023 T 22 L 21.
[84] Transcript 3 November 2023 T 22 L 27.
It became necessary to examine the validity of that submission.
Several times on 3 November 2023,[85] Mr Dickson KC submitted that on the hearing of the urgent 2.15pm application on 11 October, orders were sought restraining the convening of the meeting on 16 October 2023 for the husband’s removal from the board of B Pty Ltd. However, once it became self-evident that the Magistrates’ Court would hear the application to vary the intervention order almost immediately to permit the husband to attend the meeting, the debate focused on the timing and purpose of the husband’s application returnable to 17 October 2023 pursuant to orders made in September.
[85] Transcript 3 November 2023 T 2 L 13 – 18 and T 11 L 11.
The first component of the husband’s application then returnable on 17 October 2023 related to a restraint of B Pty Ltd from convening the meeting to be held on 16 October 2023. The husband wanted that meeting deferred. Yet the husband’s application was for orders against B Pty Ltd restraining B Pty Ltd from convening the meeting when any such relief could only be obtained against the shareholders in B Pty Ltd, none of whom were parties to that restraint application. In other words, it was arguable that relief was sought by the husband against the wrong party. Yet the husband wanted to enjoin B Pty Ltd (not its shareholders) from convening the meeting scheduled for 16 October 2023 until some later date. It was relevant for me to explore (in accordance with good case management practice as well as in accordance with principles relating to the grant of injunctions) how a constellation of fast moving events impacted on the matters then before me at 2.15pm on 11 October 2023. As has already been recorded above, I was not obliged to remain Sphynx-like during all counsels’ addresses on 11 October. To the contrary, it was incumbent upon me to ascertain the consequences of approving or rejecting the proposals put forward by all parties on 11 October at 2.15pm.
Relevant to those considerations was a better understanding of the purpose to be served by acceding to the husband’s application to adjourn the meeting scheduled for 16 October 2023. Anterior to that was the Magistrates’ Court application on 12 October 2023. In view of the fact that the variation application was by consent, it was likely that the variation application would be successful, the effect of which would enable the husband to attend the extraordinary general meeting on 16 October 2023. The husband wanted orders to be made restraining the holding of that meeting. Naturally, it was appropriate for me to examine (even in a cursory manner) the details of the husband’s application returnable on 17 October 2023. Two matters became apparent. First, orders restraining B Pty Ltd from convening the meeting were sought rather than orders being sought restraining the shareholders in B Pty Ltd from convening the meeting. Second, the husband sought orders preventing the wife from participating in the day-to-day activities of B Pty Ltd, the very things a director is by the Corporations Act required to do. Those considerations went into my cogitation of the strength of the husband’s serious issue to be tried on his injunction application to restrain the holding of the 16 October extraordinary general meeting. The balance of convenience was another consideration I was required to address on the husband’s injunction application. One issue that became important was the utility to be served in granting the injunction having regard to the possibility that the husband may encounter obstacles (and I put it no higher than “may”) in persuading me that B Pty Ltd (not its shareholders) should be restrained from holding the meeting.
On 3 November 2023 the husband’s senior counsel placed great store in his contention that no one asked for the matters fixed for 17 October to be addressed on 11 October 2023. That submission wholly missed the point that when considering the injunction application the husband brought at 2.15pm on 11 October 2023 I was commanded by law to examine the serious issue to be tried and the balance of convenience before ordering the injunction sought by the husband.
By examining the serious issue to be tried and the balance of convenience I did not exhibit a reasonable apprehension of bias, contrary to the contentions of the husband. His complaints about my handling of the husband’s urgent 2.15pm application on 11 October 2023 are without foundation.
My ex tempore reasons handed down on 12 October 2023[86] record the manner in which the application heard on 11 and 12 October 2023 unfolded. The orders made by me broadly provided for –
(a)the dismissal of all applications by the husband in his amended application in a proceeding filed 27 September 2023; and
(b)the trial of this proceeding in February 2023 to go ahead as previously ordered.
[86] [2023] FedCFamC1F 880.
The precise detail of the husband’s amended application filed 27 September 2023 incorporated six applications. They were as follows –
(1)that the interim hearing on 17 October 2023 be vacated and the orders sought in this application be listed for interim hearing as soon as practicable and prior to 16 October 2023;
(2)pursuant to rule 3.03(4) of the Federal Circuit and Family Court of Australia (Family Law) Rules (2021), [K Pty Ltd], ACN […] be joined as a party to this proceeding;
(3)until the determination of this proceeding or until further order, the second respondent, [B Pty Ltd] be restrained from –
(a) removing [Mr Fang] as the director of the company; and
(b) appointing [Ms P] and [Ms N] as directors;
(4)until the determination of this proceeding or until further order, the wife be restrained from interfering in, or seeking to interfere in, day-to-day management of [B Pty Ltd];
(5)until further order the wife be required to give the husband at least two business days' notice before entering [B Pty Ltd 's] office at [CC Street], [Suburb F] in the state of Victoria; and
(6) the wife pay the husband's costs of and incidental to the application.
In paragraph 30 of my ex tempore reasons for judgment delivered on 12 October 2023, I made several observations relevant to the husband’s application restraining B Pty Ltd from removing the husband as a director of B Pty Ltd and from appointing Ms P and Ms N as directors. I held as follows –
(a) no evidence was put before me to the effect that either order sought is a necessary interlocutory order so as to preserve some semblance of status quo prior to determining the ultimate issue to which paragraphs 3(a) and (b) are directed;
(b) a property adjustment order is sought so precisely how an order preventing the removal of the husband as a director or an order preventing the appointment of [Ms P] or [Ms N] was relevant to that s.79 application was not said;
(c) the husband did not establish that orders preventing his removal from the board of [B Pty Ltd]or that orders for the appointment of [Ms P] and [Ms N] went to a serious issue to be tried in the proceeding, that those orders if made represented an irreparable injury incapable of redress by damages or that the orders sought in paragraph 3 were orders that the balance of convenience favoured;
(d)shareholders in general meeting should decide who makes up the board of [B Pty Ltd];
(e)no suggestion has been made that some defect exists in the notice of the meeting to be held on 16 October 2023 or that some procedural irregularity otherwise exists;
(f)the members of a company in general meeting should be free to resolve all internal matters referable to the composition of the board of a company, so long as any such meeting is validly constituted and nothing was here said to the effect that the meeting to be held on 16 October 2023 raises any issues that may constitute invalidity;
(g)the asserted reason why the meeting should be enjoined, namely that the lender will or may collapse the financial accommodation it presently extends to [B Pty Ltd] was not supported by the evidence;
(h) the husband’s procurement of [B Pty Ltd] to pay [Z Pty Ltd] some management fee is properly the subject of agitation and debate at an extraordinary general meeting of members, as proposed; and
(i)the balance of convenience does not favour the granting of the restraints sought in paragraph 3 of the husband’s amended application in a proceeding.
THIRD INTEGER ALLEGED – THE APPLICATIONS ON 17 OCTOBER 2023
The case returned before me on 17 October 2023. The husband advanced several contentions to support his premise that my handling of the applications brought by the wife on 17 October 2023 gave rise to a reasonable apprehension of bias. Before addressing the husband’s criticisms, it is necessary to put the events of 17 October 2023 in chronological context.
On 12 October 2023 the intervention order operative as between the husband and the wife was varied by consent.
On 16 October 2023 the extraordinary general meeting of shareholders in B Pty Ltd was duly held. The shareholders voted to remove the husband from the board of B Pty Ltd. They also voted to appoint Ms P and Ms N as directors of B Pty Ltd.
Events relevant to the wife’s application on 17 October began to unfold at a temporally proximate time to the holding of the extraordinary general meeting.
It is now common cause that B Pty Ltd carries on business as a trustee of a unit trust. As a trustee, it owes a variety of fiduciary obligations to the beneficiaries of the trust of which it is trustee. Other obligations arise by operation of the Corporations Act, especially concerning record keeping.
By 17 October 2023, the husband was not a director of B Pty Ltd. His status as an employee of B Pty Ltd was then not known by me. He had called himself “managing director” in affidavit material yet that title was a disputed fact. As at 17 October 2023 both the husband and the wife were guarantors of large sums due by B Pty Ltd to J Bank. By 17 October 2023, B Pty Ltd was still engaged in the construction of several property development projects.
No order had been made vacating the hearing of this proceeding before me on 17 October 2023. I listed it for 10am on that day. That seemed to accord with the parties’ expectations because at 10.02 am when the case was called, Mr Glick KC appeared for the wife and Mr Boadle of junior counsel appeared for the husband. Once the case was called on, Mr Glick KC announced that he applied for costs. He said[87] the wife made a complaint about the way the husband was conducting “this”, which I took him to mean the various applications brought before me. Mr Glick KC put the point in the following terms –
[87] Transcript 17 October 2023 T 8 L 46.
“MR GLICK: No, your Honour. Not at all. I’m saying that all this confusion has arisen because your Honour is told one thing and another thing happens.
HIS HONOUR: But – okay. That might be the case. But we had senior counsel for both sides.
MR GLICK: Yes.
HIS HONOUR: The point was argued - - -
MR GLICK: Uphill and down dale.
HIS HONOUR: Well, it took all afternoon.
MR GLICK: Yes.
HIS HONOUR: It went – it started at 2.15 and ended after 4.30.
MR GLICK: And the husband argued every point. The husband argued the following. Does your Honour recall? I will put the arguments. Yes. I accept everything your Honour says. I’m coming to the point in a moment. It’s really just a complaint about the way this case is descending into confusion because of the way the husband is conducting it, your Honour, with oral applications not done properly in accordance with the rules, although they say come to court urgently when this application was known for weeks, and they bring it on a Thursday before the trial.
HIS HONOUR: But here we are - - -
MR GLICK: Before the hearing.
HIS HONOUR: - - - today, and - - -
MR GLICK: What am I seeking? Seeking costs, your Honour.
HIS HONOUR: This is a costs argument.
MR GLICK: It is.
HIS HONOUR: Okay.”
The wife sought costs of and incidental to the urgent applications on 11 October 2023 and on 17 October 2023.
Mr Boadle, counsel for the husband, sought time for the preparation of written submissions. I gave him until 24 October 2023 to file and serve those. I also adjourned the further hearing of this proceeding in the overall to ensure it was progressing adequately, the return date for that being 10am on 22 November 2023.
At 10.46am on 17 October 2023 I stood down from this case so as to deal with other court business.
Shortly prior to 11.25am my associate received an urgent email requesting me to return to the bench to hear some aspect of this litigation, which I did, taking my seat on the bench at 11.25am on 17 October 2023. Mr Glick KC only appeared. The exchange was as follows[88] –
“HIS HONOUR: Mr Glick, I’ve returned in response to an urgent email from someone.
MR GLICK: Yes, your Honour. May I – your Honour, in the absence of the other side, may I for the purposes of the transcript record the following. When I left court, I was told, not having been told before regrettably, that yesterday when the wife went back to the office to look at the computers about the books and records, all of the computers have been removed. Most of the documents had been removed from the office. The offices have been stripped. And people were physically taking [B Pty Ltd] documents out and putting them into a car, removing everything. And when I say everything, it hasn’t been completed. There are some odds and ends still there.”
[88] Transcript 17 October 2023 T 22 L 40 – T 23 L 3.
The husband was called by my associate both in court and in the precinct of the court. He did not respond to the call. Mr Glick informed me that he had requested that the husband’s legal representatives stay because the wife was seeking to have me resume on the bench. Having heard the small amount of information provided to that point at 11.25am, I said to Mr Glick[89] that I gathered he was about to apply for an urgent ex parte injunction to restrain certain activities in respect of B Pty Ltd and I asked Mr Glick whether my assessment was correct to which Mr Glick said he was not proposing to do so ex parte because he did not want to obtain an order that was difficult to implement.
[89] T 23 L 30.
The husband’s senior counsel submitted on 3 November 2023 on the hearing of this recusal application that one integer emerged supportive of the existence of a reasonable apprehension of bias namely, my statement that I gathered Mr Glick was about to apply for an urgent ex parte injunction to restrain certain activities in respect of B Pty Ltd’s property.
Mr Glick put the case for the wife that the husband had removed property belonging to B Pty Ltd, that the husband is not presently a director of B Pty Ltd and that the wife sought a mandatory order compelling the husband to return to B Pty Ltd’s premises that which was removed, especially B Pty Ltd’s computers.
Mr Glick asked for orders requiring the husband to stop anyone else from removing any further documents. Mr Glick KC told me that to his knowledge B Pty Ltd’s computers were removed about 3pm on 16 October 2023. The order I formulated in court was as follows –
Upon hearing ex parte from Mr L. Glick KC for the wife, there being no appearance by or on behalf of the husband, I order as follows –
1.On or before 10.00am on Wednesday 18 October 2023 the wife or her solicitor must file and serve an affidavit deposing to the matters advanced by Mr Glick KC at 11.30am today.
2. The husband whether by himself, his servants or agents or howsoever otherwise, must forthwith restore to [B Pty Ltd] at its proper office all computers and documents or other property of [B Pty Ltd] taken by the husband from [B Pty Ltd’s] offices at about 3.00pm on Monday 16 October 2023.
3. The husband whether by himself, his servants or agents or howsoever otherwise, is forthwith restrained until further order from taking, removing, disposing of or parting with possession of [B Pty Ltd’s] property.
4. The further hearing of this proceeding is adjourned to 2.15pm today, Tuesday 17 October 2023.
5.Orders regarding costs are hereby reserved.
At 11.36am on 17 October 2023 I adjourned the court until 2.15pm that day. The further hearing of this proceeding resumed at 2.23pm on 17 October 2023. Mr Glick KC appeared for the wife and Mr Boadle appeared for the husband. Mr Glick commenced by stating in open court[90] inter partes the substance of what he told me earlier, submitting as follows –
“MR GLICK: Thank you, your Honour. Your Honour, first I would like to repeat what I said to your Honour ex parte, although there is a transcript of it, my learned friend would not have had the advantage of it. What I said was this that after court concluded this morning, I was advised of something and I, having heard that, I was told that the husband had arranged for computers and documents which incorporated or embodied the information, records – books and records of [B Pty Ltd] to be taken out of the office, and they are no longer there, and that, having heard this, I wanted to come back and mention it to your Honour and I asked my learned friend and his instructing solicitor and clients remain int the court precincts, but they left.”
[90] Transcript 17 October 2023 T 26 L 25.
Mr Glick took me to the wife’s affidavit made 17 October 2023 to which she exhibited photographs.
Mr Glick announced that he had sent text messages to Mr Boadle, the second of which stated that injunctions had been made, the case was back at 2.15pm and that the court expected counsel to attend.[91] Mr Glick said there was no response to that text message. I said to Mr Glick that the failure to respond may have been on instructions,[92] on the basis that sometimes clients demand that no communications be entered into. Mr Glick then referred to the photographs exhibited to the wife’s affidavit made that day (17 October 2023) depicting aspects of the B Pty Ltd office. Mr Glick also relied on a letter signed by the wife and two other directors of B Pty Ltd following the vote at the 16 October 2023 meeting of B Pty Ltd at which the husband was removed from the board of B Pty Ltd. In that letter the husband’s solicitors, the husband, B Pty Ltd’s staff and B Pty Ltd’s accountant were informed that at 3pm on 16 October 2023 Ms P and Ms N would attend the offices of B Pty Ltd to take possession of the books and records of B Pty Ltd as required by s 286 of the Corporations Act. Mr Glick informed me that when the wife arrived, she discovered that the office had been emptied and that people were transporting documents to a car outside.[93] Mr Glick submitted that all documents of B Pty Ltd had gone.[94] Mr Glick agreed that there was no direct evidence as to who actually did the removing of the documents.
[91] Transcript 17 October 2023 T 26 L 45.
[92] Transcript 17 October 2023 T 27 L 9.
[93] T 28 L 41 – 45.
[94] T 29 L 9.
The wife deposed to all B Pty Ltd’s computers having been removed.
Mr Glick submitted that the wife wanted the continuation of the orders obtained ex parte.[95]
[95] T 30 L 29.
When Mr Boadle commenced to address me, he stated that he had not had an opportunity to confer with the husband. I suggested that it may be proper to list the matter for 10am the following day.[96] Mr Glick pressed the urgency of the matter.[97]
[96] T 31 L 41.
[97] T 33 L 30.
Mr Boadle then addressed on aspects of paragraph 3 of the ex parte orders obtained in the morning of 17 October 2023 and whether it was consistent with paragraph 2 of the same order. Importantly, no protest was made by or on behalf of the husband that the ex parte application or the inter parties return of the orders obtained ex parte had been procured with undue haste. Instead, Mr Boadle made the following submission[98] –
“MR BOADLE: Your Honour, a second matter, might I respectfully raise with the court, on the face of these orders they were made ex parte, and I don’t think there’s any issue about that. The High Court decision of Thomas Edison & Bullock requires a party applying for ex parte orders to bring to the notice of the court all facts material to the determination of the right to the injunction, and it is no excuse for the party to say that he was not aware of their importance. The utmost good faith is required and the party inducing the court to act in the absence of the other party fails in his obligation unless he supplies the place of the absent party to the extent of bringing forward all material facts which that party would presumably have brought forward in his defence to that application.
I will need to read the transcript of what transpired this morning, your Honour. One matter that was raised by my learned friend in his submissions was that my learned friend anticipated that the computers that his client asserts were taken from her company might contain the information of another company. I raise that matter with the court, because I assume that my learned friend raised that with the court this morning in order to obtain these orders and otherwise that that ex parte obligation was complied with in order to obtain the orders. I just want to formally record that position, your Honour.”
[98] T 37 L 3 – 21.
Mr Boadle quite properly asked to what date the case would be adjourned and I informed him that the return date depended on how quickly he was able to amass his affidavit material. Mr Boadle said he could have his affidavit material prepared so that a contested application could be listed on 27 October 2023. I told Mr Boadle I was considering requiring the husband to file his affidavit material in opposition to the wife’s material by 24 October, for the wife to file and serve affidavit material in reply by 31 October and for the matter to be debated before me on 6 November 2023. Mr Boadle said he was content for that. Mr Boadle suggested that the word “restore” in the orders obtained ex parte be replaced by the words “deliver up”. Mr Boadle was squarely asked by me what was his client’s version of events. Mr Boadle told me that according to his instructions the relevant B Pty Ltd property was not taken by the husband.[99] I then put the following to Mr Boadle[100] –
“HIS HONOUR: How will your client be able to meaningfully depose to anything, then, if he just says, “I don’t know. It wasn’t me”.”
[99] T 39 L 35.
[100] T 39 L 45 – 46.
It seemed to me to be important that the husband provide at least his version of events. At 3.08pm I stood the matter down, resuming at 3.21pm. Then followed an exchange to which counsel for the husband on 3 November 2023 attached particular significance, contending that it was another illustration of a reasonable apprehension of bias allegedly exhibited by me. The exchange was as follows –
“HIS HONOUR: Mr Boadle.
MR BOADLE: Thank you, your Honour. The answer to your Honour’s question is that my present instructions are that my client intends to give evidence directed to 10 things that have been removed from the premises are not [B Pty Ltd] company property, as in tangible property that has been removed is not [B Pty Ltd] tangible property.
HIS HONOUR: And who is the relevant actor in what you just said to me?
MR BOADLE: As I understand it, there have been – I can’t give your Honour the names of the people, regrettably.
HIS HONOUR: What was the point of the stand down if you didn’t ask that question?
MR BOADLE: Your Honour, it’s – there’s complications including language - - -
HIS HONOUR: Will your client be taking a privilege against self-incrimination?
MR BOADLE: I don’t know the answer to that, your Honour. Could I also clarify a second thing that has arisen from my most recent instructions, your Honour. I understand that although physical computers belong to companies not the relevant company, there might be on those computers files that could be considered company documents – [B Pty Ltd] company documents. In those circumstances, in my respectful submission, given that order 3, or proposed order 3, preserves company property, as in, in its current terms it prohibits my client from - - -
HIS HONOUR: Yes.
MR BOADLE: - - - among other things, disposing of the property.
HIS HONOUR: This is all a bit abstract, Mr Boadle. Unless and until I see your client’s affidavit, I don’t propose to go down the path that you’re trying to take me.
Orders were pronounced at 3.32pm on 17 October 2023. They were as follows –
1.In paragraph 2 of my ex parte orders dated 17 October 2023 the word “restore” is deleted and substituted by the words “deliver up”.
2.The orders made in paragraph 3 of my orders pronounced at 11.30am today are varied by the addition of the words “otherwise and for the purpose of delivering up [B Pty Ltd’s] property to [B Pty Ltd] at its proper office.”
3.Any application by the husband in relation to orders made this day must be brought by 4.00pm on 24 October 2023 supported by all relevant affidavit material to be filed and served by that time on that date.
4.Any affidavits by the wife in opposition to those affidavits filed on behalf on the husband must be filed and served by 4.00pm on 31 October 2023.
5.The further hearing of this contested application for interlocutory injunctive relief is adjourned to 10.00am on Friday 3 November 2023.
6.The further hearing of this proceeding is adjourned to 10.00am on 22 November 2023 for Mention.
7. Costs of this the afternoon hearing this day are reserved.
Of the inter parties hearing on 17 October 2023, in the written submissions prepared on behalf of the husband on this recusal application, several points were said to support the husband’s contentions of a reasonable apprehension of bias. They were as follows –
(a)the word “forthwith” remained in the orders pronounced at 3.30pm on 17 October 2023 despite submissions advanced on behalf of the husband to the effect that the word “forthwith” should not be included in the orders;
(b)my enquiring whether the husband would rely upon the privilege against self-incrimination; and
(c)the husband’s counsel was pressed for responses to enquiries I made of him.
On behalf of the wife, Mr Glick denied the existence of circumstances giving rise to a reasonable apprehension of bias. Specifically, he submitted –
(a)the husband had read construed the transcript of the two appearances on 17 October as if it were a statute, plucking words here and there;[101]
(b)no basis for recusal was made out by my making the observation that the husband’s counsel may have had instructions to not respond to Mr Glick’s text message;
(c)the husband asked for time to file the material and I gave him longer to do what he sought;
(d)even though “forthwith” does not mean immediately,[102] it does not mean that the moment the court pronounces the order a person is in breach of the order if the order is not complied with;
(e)even though no identification was given of the person who actually removed documents and computers from B Pty Ltd’s premises, the act of removing took place very proximate to the conclusion of the meeting on 16 October 2023;
(f)a high degree of urgency attended the ex parte application because documents of a trustee (B Pty Ltd) were being removed and B Pty Ltd, as a trustee, owes fiduciary duties with which it must comply;
(g)the documents taken related to the operation of a living breathing trustee;
(h)asking whether the husband might take a privilege against self-incrimination was merely a question and the question did not indicate the expression of any view; and
(i)the High Court encourages judges interacting with counsel by asking questions and by not remaining Sphynx-like.
[101] T 87 L 37.
[102] In The Marriage of Ruby (1991) 15 Fam LR 47.
FOURTH INTEGER ALLEGED – THE 20 OCTOBER 2023 HEARING
As has already been recorded, pursuant to orders made on 17 October 2023, this proceeding was returnable on 3 November 2023. Instead, by reason of an urgent request for a hearing being made on behalf of the wife I listed the proceeding for 10am on Friday 20 October 2023. Mr Glick KC announced his appearance for the wife and B Pty Ltd. Mr Baker, counsel who appeared on 24 August 2023, appeared for the husband on 20 October 2023. After almost two hours of debate I delivered ex tempore reasons.[103]
[103] Shuren & Fang (No 3) [2023] FedCFamC1F 906.
By 20 October 2023 the husband had partly performed the task of delivering up to B Pty Ltd all documents allegedly taken from B Pty Ltd’s offices. The wife’s solicitors had written to the husband’s solicitors seeking a more punctual compliance with the orders made on 17 October 2023. During the afternoon of 19 October 2023, my associate received from the wife’s solicitors a request for this proceeding to be again listed as a matter of urgency. I listed it for 10am on Friday 20 October 2023.
It seemed that the fact of listing the proceeding for 20 October spurred the husband into providing an email at 6.42pm on 19 October 2023 identifying certain documents in two categories. The first was entitled “project document list”. The second was entitled “[B Pty Ltd] finance document list”. As the ex tempore reasons handed down on 20 October 2023 revealed, the two lists (extracted from information on B Pty Ltd’s computers that the husband searched in order to produce the two lists) did not represent exhaustive compliance with the orders made on 17 October 2023.
Mr Glick commenced his application on 20 October 2023 by emphasising the operative provisions of s 285 of the Corporations Act. Mr Glick pointed out that a core obligation of a trustee is to maintain separate books and records, to not mix assets of the trust with other assets and to have books and records of the trust available upon demand. Mr Glick submitted that the word “keep” in s 286 meant “retain in the trustee’s physical possession” as well as “record in an up-to-date manner”. Mr Glick submitted that the husband’s staff removed the computers and records from B Pty Ltd on 16 October 2023.[104] Mr Glick submitted that it was open for the court to infer[105] that the husband was implicated in the removal of items from B Pty Ltd’s offices.
[104] Transcript 20 October 2023 T 8 L 13.
[105] Holloway v McFeeters (1956) 94 CLR 470 and Girlook (Sales) Pty Ltd v Hurrell (1982) 149 CLR 155.
Mr Glick submitted that the books B Pty Ltd was required by the Corporations Act to maintain included minute books, resolutions, proposals, dividend distributions, share registers and dividend declarations, to name but a few. Mr Glick submitted that the shareholders in B Pty Ltd are beneficiaries of the hybrid trust of which B Pty Ltd is the trustee.
Mr Glick submitted that the trust’s books and records should be kept in such manner as to be capable of production upon pushing a button on B Pty Ltd’s computer. Mr Glick argued that the husband had not pressed the button.
The husband’s solicitors wrote to the wife’s solicitors on 19 October 2023, as has already been observed. The husband’s solicitors seem to have become dissatisfied at three items of correspondence having been sent by the wife’s solicitors so the husband’s solicitors asking for the wife’s solicitors to refrain from “bombarding our office”, and that it was allegedly “totally unacceptable to make these threats of contempt of further action”. The husband’s solicitors informed the wife’s solicitors that [Z Pty Ltd] staff members would need to review their computers before ascertaining which information pertained to B Pty Ltd and which information pertained to other companies. Mr Glick submitted that the documents that Z Pty Ltd staff were to examine were B Pty Ltd’s documents. Mr Glick relied on every portion of the letter from the husband’s solicitors dated 19 October 2023, including the contents of the letter to identify the person likely to have physically taken the documents and computers from B Pty Ltd on 16 October 2023. The following exchange emerged[106] –
[106] Transcript 20 October 2023 T 19 L 33 – T 20 L 13.
“HIS HONOUR: But just one second. Is it fair to infer that by the very detailed response recorded in this letter – that the question of the identity of the person who physically removed the computers and the information on them points almost inexorably to [Mr Fang]?
MR GLICK: Of course it does. Yes, your Honour.
HIS HONOUR: So the statements by Mr Boadle that were equivocal and possibly very indirect, if not evasive, might turn out to be wrong.
MR GLICK: And having spoken - - -
HIS HONOUR: Well, what’s your answer to that.
MR GLICK: Yes, your Honour. And, indeed, having spoken to his client with the specific request, “Who removed or authorised removal of the documents?” the answer was, “I don’t know. I’ve got no instructions.”
HIS HONOUR: Well, that may well have been the case on the day, and it might be that Mr Boadle, for his own reasons, deliberately did not ask the hard question. But by the same token, parties are not entitled to mislead the court, whether directly or indirectly.
MR GLICK: And they’re officers of the court. The lawyers are officers of the court.
HIS HONOUR: The solicitors are.”
The husband’s solicitors in their 19 October 2023 letter stated that the wife’s solicitors had many of the documents she was pressing the husband to return.
Mr Glick KC submitted that B Pty Ltd was unable to function without the documents it seeks. He submitted that in accordance with case law making provision for directors performing their duties diligently and faithfully, the directors of B Pty Ltd needed the records of B Pty Ltd in the possession of the husband.
So far as the two lists of documents the husband’s solicitors provided at 6.42pm on 19 October 2023 were concerned, Mr Glick submitted that the two lists failed to include important categories of documents. They were minute books, cheque books, records of directors’ meetings, resolutions, loan documentation between B Pty Ltd and J Bank, lists of assets and liabilities, computer records, B Pty Ltd’s assets register, a depreciation schedule, details of rent, expenses, building contracts, bank details, Z Pty Ltd’s management fees totalling a contested amount of $6m, MYOB records, electronic banking records, contracts for the sale of apartments and all conveyancing documents.
On behalf of the husband, Mr Baker submitted that the steps taken by the husband since 17 October 2023 were appropriate and responsive to the orders made. Mr Baker submitted that the husband’s solicitors will scrutinise any documents prior to their being provided to the wife’s solicitors. I pointed out to Mr Baker that the documents are not being submitted to the husband’s solicitors for the purposes of obtaining legal advice. I informed Mr Baker that the documents either meet the description of “property of the company” or they do not. Mr Baker submitted that such a decision should be made jointly on legal advice. That provoked the following exchange, made relevant in this recusal application because the husband asserted that a reasonable apprehension of bias was exhibited by the following exchange[107] –
[107] Transcript 20 October 2023 38 L 1 – 24.
“HIS HONOUR: I find that – I can’t accept that submission. A corporate director knows probably above anyone else what document is the company’s documents.
MR BAKER: Well, your Honour, this will be responded to fulsomely on Tuesday. But by way of matters that your Honour is already aware of, [Mr Fang] doesn’t speak English.
HIS HONOUR: Well, he has come along, and he has sat through - - -
MR BAKER: No.
HIS HONOUR: - - - all of these proceedings, and he’s dealing with very sophisticated transactions. I suspect his command is better than you say.
MR BAKER: Well, your Honour, I’ve not personally seen any evidence of that, and if – respectfully, that - - -
HIS HONOUR: Well, we don’t need to go down that path. And there would have to be evidence of his command of the language. But, anyway, let’s get on to the more substantive issue. You say you don’t know why you’re here. Is that that - - -
MR BAKER: Well - - -
HIS HONOUR: - - - the thrust of it?”.
Mr Baker submitted that the husband was searching the computers in his possession to ensure that B Pty Ltd’s documents were delivered up.
By way of reply, Mr Glick submitted that the husband must forthwith produce all documents that have been kept in accordance with s 1306 of the Corporations Act. Mr Baker renewed his concerns about the incorporation in any order of the word “forthwith”.
At noon or thereabouts on 20 October 2023 I delivered ex tempore reasons[108] in which I ordered the husband, by 4pm that day, to print and deliver to the solicitors for the wife all books and records as defined by the Corporations Act and all financial documents of B Pty Ltd recorded or stored on any computer in the possession, power or control of the husband alleged by the wife as having been taken on 16 October 2023.
[108] Shuren & Fang (No 3) [2023] FCFAM C1F 906.
In written submissions prepared by the solicitors for the husband in support of this recusal application, they wrote that it was not open on the state of the evidence then in existence for me to form any view that the husband was not complying with the orders made on 17 October 2023.
I did not form any concluded view that the husband was not complying with the 17 October orders. I received submissions from the wife that the husband was partially complying with those orders and that the task of rapid and complete compliance was as simple as pressing a computer button for the production of relevant documents.
The husband’s solicitors submitted that the orders made on 20 October 2023 represented a denial of natural justice. They also contended that my comment that the husband was dealing with very sophisticated transactions and that, insofar as it was said that the husband does not speak English, my comment that his command may be better that Mr Baker stated represented a prejudgment by me that the husband was dishonest.
Of the appearance on 20 October 2023, counsel for the wife on the hearing of the recusal application on 3 November 2023 made a collection of submissions by way of rejection of the husband’s construct that a reasonable apprehension of bias had been exhibited. Those submissions were as follows –
(a)rule 1.06 and table 1 3(h) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 specifically permit a verbal application to me made without the need for an application to be made in writing, supported by affidavit;
(b)it follows that the husband’s complaint that he was denied procedural fairness by my having heard the wife’s application on 20 October 2023 in the absence of an application in a proceeding and in the absence of an affidavit in support should be rejected; and
(c)in any event, the husband’s counsel on 20 October 2023 submitted that Mr Glick KC was entitled to argue that the orders made on 17 October 2023 had not been complied with.[109]
[109] Transcript 20 October 2023 T 32 L 25.
Counsel for the wife emphasised that the gravamen of the application on 20 October 2023 related to a former B Pty Ltd director’s entitlement to retain the assets of the company he formerly directed, that company being a trustee.
FIFTH INTEGER ALLEGED – THE 27 OCTOBER 2023 HEARING
On some date between 20 and 26 October 2023, an issue arose between the wife and the husband about the husband’s possession of two motor vehicles that were said to be owned by B Pty Ltd, about a computer said to be owned by B Pty Ltd and about employment records of two persons said to have been employees of B Pty Ltd. The solicitors for the wife contacted my associate seeking an urgent hearing. I listed the application on Friday 27 October 2023 at 10.00am. Mr Glick KC appeared for the wife and Mr Baker of counsel appeared for the husband.
Before addressing the events on that application, it is useful to mention at this juncture that the husband, in his solicitors’ written submissions prepared in relation to this recusal application, complained that the wife did not file a written application or affidavit material in support of her application. As has already been observed, filing a written application before applying to the court is not a mandatory pre-requisite. Ore tenus applications are common in the Major Complex Financial Proceedings List. Often, they promote the overarching purpose of the rules by enabling the court to get to the heart of the relevant application in a cost effective and time efficient manner. That is especially the case where the relevant supporting affidavit does no more than exhibit correspondence between solicitors.
On 27 October 2023 Mr Glick KC informed me that the husband had in his possession two motor vehicles, the property of B Pty Ltd. He gave the relevant vehicle identification numbers and produced various documents that he said he tendered as business records of B Pty Ltd to demonstrate, at least on a prima facie basis, that ownership of those motor vehicles was held by B Pty Ltd and that conversely, the husband as possessor of those two motor vehicles, was required to surrender the motor vehicles to B Pty Ltd. Documents concerning ownership of the motor vehicles went into evidence although Mr Baker faintly submitted that the registration particulars were not evidence of ownership. While that may have been arguable, other documentary evidence tendered that day revealed that the two motor vehicles appeared in B Pty Ltd’s books and records as well as in its taxation returns. It must not be overlooked that Mr Baker of counsel for the husband did not object to the documents tendered by Mr Glick KC going into evidence. In the husband’s solicitors’ written submissions on this recusal application the solicitors wrote that the husband was “ambushed” by the tendering of those documents. He made no such submission on the day. Those written submissions contained the infelicitous assertion that the wife exhibited “wanton disregard for the court rules applicable to making interlocutory applications”, citing what they described as Chapter 6 of the Federal Circuit and Family Court Rules 2012. The applicable rules were not those. They were the Federal Circuit and Family Court of Australia (Family Law) Rules 2021. The applicable rules have been recorded already. Verbal applications are permitted. I confess to encountering considerable difficulty following, still less accepting, the husband’s contentions that the wife exhibited “wanton disregard for the applicable rules”.
A debate emerged about whether an order preserving the status quo was best served by requiring the husband to return the two vehicles to the possession of B Pty Ltd or whether it was best served by leaving the vehicles in the husband’s possession pending the hearing and determination of a contested application. I took the view that the status quo was best served by ordering the husband to return the vehicles. My reasons for so ordering were set out in my decision.[110] I made orders in relation to the computer said to have been owned by B Pty Ltd. As for employee records, bank statements from J Bank revealed payments to the relevant employees.
[110] [2023] FedCFamC1F 934.
While the husband challenged that B Pty Ltd had made out a prima facie case in relation to the return of the two vehicles, for the computer and for the employee records, the husband offered no evidence of his position. Orders were made as sought by the wife. The husband now argues that the 27 October application was made without notice or proper supporting documentation and without the husband having an opportunity to put his case. As a consequence, he contended that a reasonable apprehension of bias was thereby exhibited.
In opposing that contention of apprehended bias, Mr Glick KC on 3 November 2023 took the court to the events of 27 October 2023 in this case and submitted, in reliance upon Ebner and Michael Wilson that the 27 October 2023 application for the return of B Pty Ltd property had nothing whatever to do with main issue in this litigation, namely making a s 79A order.
The issue of waiver was raised[111] by Mr Glick in case I came to the view that a reasonable apprehension of bias had been exhibited. He submitted that by the husband agreeing to file affidavit evidence in the proceeding about which the husband asserted the existence of apprehended bias, the husband had waived the right to make good his complaint about apprehended bias.[112]
[111] Transcript 3 November 2023 T 60 L 27.
[112] Vakauta v Kelly (1989) 167 CLR 568 and Smits v Roberts (2006) 227 CLR 426 and see my observations on waiver in Goodheart & Goodheart [2023] FedCFamC1F 715 (at [23] – [24]).
At the risk of repetition, the husband relied on the accumulation of the issues he raised as amounting, in aggregate, to the existence of a reasonable apprehension of bias, because if taken individually none would be dispositive.
CONSIDERATION
In my view, the husband’s application for me to recuse myself failed. I say that mainly for the reason that all issues agitated on 11 October 2023, on 17 October 2023, on 20 October 2023 and on 27 October 2023 concerned the board of B Pty Ltd or the recovery of B Pty Ltd property and records, those issues having no bearing whatsoever on the issue pertinent to the trial of this proceeding, namely, a s 79A application.
No findings have been made by me on any of the applications heard on 11 October, 17 October, 20 October and 27 October 2023.
On each application, I engaged in an interactive exchange between Bench and Bar, asking questions with a view to ascertaining the real issues for determination.
It is wholly abstract for the husband’s legal representatives – solicitors and barristers – to pluck a question, a word or a line in an exchange – as being indicative that my mind has been made up against the interests of the husband or that such a result inures according to the double might test.
Judges are encouraged nowadays to actively engage in the debate in the cases before them. The days of sitting Sphynx-like are long gone.
The Federal Circuit and Family Court of Australia (Family Law) Rules permit applications to be made verbally.
It must not be overlooked that circumstances vastly more disadvantageous to the applicant seeking recusal presented themselves in Michael Wilson and the High Court rejected the suggestion that a reasonable apprehension of bias had been demonstrated.
No criticism can be legitimately levelled against me for entertaining applications said by the wife to be urgent. It would be wrong for me to refuse to entertain an application said to be urgent without first knowing what the so-called urgency was in fact.
The Major Complex Financial Proceedings List embeds practices and procedures that reflect modern case management practices. The interlocutory phases of litigation in that list proceed with expedition. Most practitioners who operate in that list are not only aware of that but they encourage and support such an approach for the obvious benefit to their clients in having major complex financial cases heard and determined expeditiously but without compromise of parties’ right to procedural fairness.
DISPOSITION
The husband has failed in his recusal application. This case remains in my docket. A directions hearing shall be convened on a date to be determined to ensure that the February 2024 trial is on track. Otherwise, I dismiss the husband’s recusal application and refuse his application to vacate the trial date.
I certify that the preceding one hundred and sixty-four (164) numbered paragraphs are a true copy of the reasons for judgment of the Honourable Justice Wilson. Associate:
Dated: 29 November 2023
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