Silkchime Pty Ltd v Warwick Entertainment Centre Pty Ltd
[2013] WASCA 164
•22 JULY 2013
SILKCHIME PTY LTD -v- WARWICK ENTERTAINMENT CENTRE PTY LTD [2013] WASCA 164
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2013] WASCA 164 | |
| THE COURT OF APPEAL (WA) | 22/07/2013 | ||
| Case No: | CACV:105/2012 | 1 JULY 2013 | |
| Coram: | PULLIN JA | 1/07/13 | |
| 8 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | SILKCHIME PTY LTD WARWICK ENTERTAINMENT CENTRE PTY LTD |
Catchwords: | Courts and judges Application for judge to disqualify himself from sitting Whether any reasonable apprehension of bias based on a comment made during submissions in another appeal Principles governing the application |
Legislation: | Nil |
Case References: | Carey v Commissioner for Consumer Protection [2012] WASC 8 Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 Johnson v Johnson [2000] HCA 48; (2000) 201 CLR 488 Laws v Australian Broadcasting Tribunal [1990] HCA 31; (1990) 170 CLR 70 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : SILKCHIME PTY LTD -v- WARWICK ENTERTAINMENT CENTRE PTY LTD [2013] WASCA 164 CORAM : PULLIN JA HEARD : 1 JULY 2013 DELIVERED : 1 JULY 2013 PUBLISHED : 22 JULY 2013 FILE NO/S : CACV 105 of 2012 BETWEEN : SILKCHIME PTY LTD
- Appellant
AND
WARWICK ENTERTAINMENT CENTRE PTY LTD
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram : LE MIERE J
Citation : WARWICK ENTERTAINMENT CENTRE PTY LTD (RECEIVERS AND MANAGERS APPOINTED) atf THE WARWICK ENTERTAINMENT CENTRE UNIT TRUST -v- SILKCHIME PTY LTD (RECEIVERS AND MANAGERS APPOINTED) atf THE SILKCHIME UNIT TRUST [No 2] [2012] WASC 275
File No : CIV 1094 of 2008
(Page 2)
Catchwords:
Courts and judges - Application for judge to disqualify himself from sitting - Whether any reasonable apprehension of bias based on a comment made during submissions in another appeal - Principles governing the application
Legislation:
Nil
Result:
Application dismissed
Category: B
Representation:
Counsel:
Appellant : Mr A Metaxas
Respondent : Mr J A Thomson SC & Ms V MacMillan
Solicitors:
Appellant : Metaxas & Hager
Respondent : Corrs Chambers Westgarth
Case(s) referred to in judgment(s):
Carey v Commissioner for Consumer Protection [2012] WASC 8
Fox v Percy [2003] HCA 22; (2003) 214 CLR 118
Johnson v Johnson [2000] HCA 48; (2000) 201 CLR 488
Laws v Australian Broadcasting Tribunal [1990] HCA 31; (1990) 170 CLR 70
(Page 3)
1 PULLIN JA: When this appeal came on for hearing on 1 July 2013, the appellant made an application that I disqualify myself from sitting on the appeal. After hearing submissions, I refused to do so and dismissed the application with reasons to follow. These are the reasons for that decision.
2 To understand the appellant's application, it is necessary to say something briefly and in broad terms about the current appeal and then to mention likewise the circumstances of another earlier appeal on which I sat.
This appeal
3 In this appeal, the appellant (Silkchime) alleges that Le Miere J erred in deciding that Silkchime was indebted to the respondent (Warwick) in the sum of approximately $12 million. Silkchime admitted that it had borrowed $3.6 million from Warwick, and denied that there had been other advances. Silkchime also contended that there was a joint venture agreement between Warwick and Silkchime relating to the development of Silkchime land on the basis that Warwick would receive a 25% profit share from the development of the land, and that loans would be 'interest free' and 'provided on a non-recourse basis' with the consequence that the admitted loan of $3.6 million, and any other amounts the trial judge found had been advanced, were not payable.
4 The denial of any loan exceeding $3.6 million and the claim that there was a joint venture agreement, turned significantly on the testimony of Mr Norman Carey, who was a director of Warwick and of Silkchime. Le Miere J did not accept Mr Carey's testimony about the existence of the joint venture agreement and found that there was no such agreement. His Honour also found that Westpoint had loaned Silkchime sums which, together with interest, amounted to just over $12 million. Le Miere J based his findings on inferences to be drawn from numerous contemporaneous documents and facts or circumstances which were contrary to Mr Carey's evidence.
5 There are numerous grounds of appeal, but according to counsel for Silkchime, three of them, grounds 4, 6 and 10, allege error by the trial judge by preferring objective facts, circumstances and documents, rather than accepting the evidence of Mr Carey.
6 On this appeal, this court would have to decide whether Le Miere J erred in accepting the objective evidence in preference to Mr Carey's evidence. If Le Miere J did err as alleged and a miscarriage of justice
(Page 4)- occurred, then the judgment will either be set aside or there would have to be a retrial.
The Carey appeal
8 The earlier appeal was Carey v Commissioner for Consumer Protection CACR 14 of 2012 (Carey Appeal) which was heard by this court on 9 April 2013. That was an appeal from the judgment of Murray J, who dismissed an appeal by Mr Carey against his conviction in the Magistrates Court. I was a member of the court which heard the appeal. The other judges were Martin CJ and Newnes JA. The court reserved its decision after the hearing and judgment has not yet been delivered.
9 Mr Carey had been charged in the Magistrates Court with an offence under s 81(1) of the Fair Trading Act 1987 (WA), which provided that where a corporation is convicted of an offence against the Fair Trading Act, each person who, at the time of the commission of the offence, was a director of the corporation, was also guilty of an offence, unless he proved that he could not, by the exercise of reasonable diligence, have prevented the commission of the offence.
10 Without going into too much detail, Mr Carey was the director of a company (Lanepoint) which via another company - Westpoint Realty Pty Ltd (Westpoint) - had sold residential units off a plan pending development of the land. Mr Carey was also a director of Westpoint. Eventually, some of those purchasers were persuaded by agents employed by Westpoint to abandon the contracts to purchase the units as a result of misrepresentations. The company was then free to resell the units at a higher price. Westpoint was convicted of an offence against the Fair Trading Act because of such conduct. The issue then was whether Mr Carey could prove that he used reasonable diligence to prevent the commission of the offence.
11 The magistrate, in his reasons for decision, did not accept certain oral evidence given by Mr Carey because there was 'considerable doubt about the credibility' of his evidence. As a result, much turned on documents, including written advice given by a lawyer (Ms James) in a memorandum dated 17 October 2005 expressing concern about whether there was any basis to terminate the contracts which had been entered into by the
(Page 5)- purchasers who had bought off of the plan. Mr Carey saw the memorandum. Another document was a memorandum prepared by Mr Carey dated 27 October 2005, which was copied to the agents who met with the purchasers. The question was, what inference should be drawn from the documents, and whether it could be inferred from them and other evidence that reasonable diligence was exercised by Mr Carey to prevent the commission of the offence by the company.
13 Mr Carey appealed to this court alleging that Murray J erred in law in upholding the magistrate's finding that Mr Carey had not proved that he used reasonable diligence to prevent the offence by the company. During the course of submissions by Mr De Kerloy, counsel for Mr Carey on 9 April 2013, there was discussion between members of the court and counsel about Ms James's memorandum and the Carey memorandum between ts 46 and 50. At ts 46, there was a reference to the memorandum from Ms James, and then, at ts 47, to Mr Carey's memorandum.
14 The submission that I should disqualify myself was supported by the production of ts 50 which recorded submissions by Mr Carey's counsel and comment by me. The relevant interchange began on page 49. On ts 49 I asked counsel whether he was submitting that reasonable diligence was shown because Mr Carey did not know the offence was going to be committed by the company. Counsel answered this indirectly by saying 'we [meaning Mr Carey] couldn't do anything to stop [the] … offence being committed'.
15 Then at ts 50, I put to counsel for Mr Carey the alternative inference which could be drawn from the documents, and that was that Mr Carey was setting up circumstances where, although the Carey memorandum referred to Westpoint's 'core values and client for life philosophy', the agents who met with the purchasers and made the misrepresentations were led to believe that Westpoint was entitled to terminate, that the purchasers were to be told that Lanepoint could legally terminate, and that Mr Carey with a 'wink' implied that Lanepoint wanted to terminate because it wanted to sell at a higher price. In effect, on pages 49 and 50 of the transcript, I put to counsel for Mr Carey the two counter-arguments in the case: the first being the appellant's argument, which was that Mr Carey
(Page 6)
used reasonable diligence to prevent the commission of the offence by the company, and the other argument being that he failed to do so.
The appellant's submissions in support of the application
16 The appellant supported the application by extracting from the transcript in the Carey Appeal only the reference to the comment which appeared on page 50 of the transcript.
17 Counsel for the appellant referred to the comment I made at ts 50 as a 'finding'. Later, he submitted that this one comment showed I had 'concluded' that Mr Carey's memorandum was a subterfuge; that I had 'formed the view' that Mr Carey was dishonest; that I had 'concluded' that Mr Carey's memorandum 'was not an honest attempt' and 'indicative' of my state of mind; and that 'an objective bystander' would accept that I had formed an 'adverse opinion' of Mr Carey. Counsel, in effect, submitted that there arose a reasonable apprehension of bias (in the form of prejudgment) concerning Mr Carey's credibility.
The principles governing the application that I disqualify myself
18 Counsel for the appellant made no suggestion that I was actually biased. Counsel for the appellant made it plain that his application was based on what the view of a fair-minded observer might have been. Thus, the contention was that I was disqualified by reason of an apprehension of bias.
19 The principle distilled from a large number of High Court cases and succinctly stated by Gleeson CJ, Gaudron, McHugh, Gummow & Hayne JJ in Johnson v Johnson [2000] HCA 48; (2000) 201 CLR 488 [11] therefore applies to this application. That is, that the test to be applied in Australia in determining whether a judge is disqualified by reason of appearance of bias in the form of prejudgment is whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide.
20 The fair-minded lay observer is a person who has attributed to him or her knowledge of the actual circumstances relevant to the application: see Laws v Australian Broadcasting Tribunal [1990] HCA 31; (1990) 170 CLR 70, 87 (Mason CJ and Brennan J).
21 Because reliance is placed upon a comment I made during the course of submissions by the appellant's counsel in the Carey Appeal, it is necessary to refer to something else said in Johnson by the plurality,
(Page 7)
- namely that judges, both at trial and 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 or 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: Johnson [13].
23 Kirby J went on to say at [46] that uninformed members of the public are sometimes surprised by the robust exchanges which take place in court between a judge and experienced lawyers, but that such dialogue can have great value.
Conclusion
24 There are two reasons why I refused to disqualify myself. The first reason is that no reasonably informed and fair-minded lay observer could conclude that there was any perception of bias against Mr Carey. All that happened was that I made comments about what might be inferred from the relevant documents. Such comment is not a 'finding' or a 'conclusion' or the formation of a view that Mr Carey was dishonest, or a comment 'indicative of … [my] state of mind'. The comment was made to give counsel the opportunity of addressing the inference which might have been drawn from the relevant documents. As it was, counsel took that opportunity.
25 The second reason is that, in any event, there is no circumstance in this appeal where this court will be called upon to judge whether it believes Mr Carey or not. This case involves a question about whether or not Le Miere J erred in concluding that Silkchime had borrowed money or was liable to repay money it had borrowed from Westpoint, and, in particular, whether the trial judge overlooked relevant evidence, or made findings against the weight of the evidence, or drew incorrect inferences
(Page 8)
- from admitted or proven facts or documents in preference to the evidence of Mr Carey. If Le Miere J did err, then, as mentioned above, either the judgment will be set aside, or there will have to be a new trial. As a member of the court, I will not be called on to judge Mr Carey's credibility as a witness, nor would that be possible because this court did not see or hear Mr Carey give evidence. One of the 'natural limitations' that must be observed by an appellate court when conducting an appeal by way of rehearing is the inability to evaluate the credibility of a witness: Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 [23]. That is not to say that this court will not, in this appeal, refer to express or implied conclusions of Le Miere J about Mr Carey's credibility, but that will be in the context of a review of the trial judge's reasons and whether the trial judge's findings were open. It will not involve this court forming its own judgment about Mr Carey's credibility as though this were a trial court. As a result, because there will be no judgment by this court about Mr Carey's credibility other than in the manner referred to, there could be no prejudgment.
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