Sommer v C Pty Ltd (No.5) - [2020] FCCA 2792

FEDERAL CIRCUIT COURT OF AUSTRALIA

SOMMER v C PTY LTD (No.5)

[2020] FCCA 2792

Catchwords:
BANKRUPTCY – PRACTICE AND PROCEDURE – Application for recusal – whether judge rendered assistance to an unrepresented litigant beyond that which is permitted – whether because judge gave an interlocutory judgment on jurisdiction and other matters a fair-minded lay observer might reasonably apprehend the judge might not determine impartially questions of jurisdiction the first respondent has raised – application for recusal dismissed.

Legislation:

Supreme Court Act 1970 (NSW), s.69

Cases cited:

Cheung v Burness (Trustee) [2016] FCA 1381

Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337

FKP17 & Ors v Minister for Immigration & Anor [2018] FCCA 2053

Flightdeck Geelong Pty Ltd v All Options Pty Ltd [2020] FCAFC 138

Neil v Nott (1994) 68 ALJR 509

Obrart v Grego [2017] FCCA 929

Olivieri v Stafford (1989) 91 ALR 91

Re Riviere; Ex parte Original Mont de Piete Ltd [1919] NSWStRp 56; (1919) 20 SR (NSW) 77

Re Vernon Arnfield [1925] NSWStRp 63; (1925) 25 SR (NSW) 517

Sommer v C Pty Ltd [2020] FCCA 1412

Sommer v C Pty Ltd(No.2) [2020] FCCA 1898

Sommer v C Pty Ltd(No.3) [2020] FCCA 2156

Sommer v C Pty Ltd (No.4) [2020] FCCA 2589

Vakauta v Kelly [1989] HCA 44; (1989) 167 CLR 568

Wilkinson v Osborne & Anor [1915] HCA 92; (1915) 21 CLR 89

Wren v Mahony [1972] HCA 5; (1972) 126 CLR 212

Applicant:

MS SOMMER

First Respondent:

C PTY LTD

Second Respondent:

MS M, IN HER CAPACITY AS A COSTS ASSESSOR

File Number:

SYG 697 of 2020

Judgment of:

Judge Manousaridis

Hearing date:

12 October 2020

Date of Last Submission:

12 October 2020

Delivered at:

Sydney

Delivered on:

14 October 2020

Orders Pronounced:

13 October 2020

REPRESENTATION

Applicant in person, by video

Counsel for the First Respondent:

Mr D Williams SC and Ms M Castle, by video

Solicitors for the First Respondent:

ICL Lawyers

No appearance by or on behalf of the second respondent

ORDERS

The application that Judge Manousaridis be recused on the ground of reasonable apprehension of bias is dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Sommer & C Pty Ltd (No.5) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 697 of 2020

MS SOMMER

Applicant

And

C PTY LTD

First Respondent

MS M, IN HER CAPACITY AS A COSTS ASSESSOR

Second Respondent

REASONS FOR JUDGMENT

Introduction

The first respondent (respondent) applies that I recuse myself on the ground of reasonable apprehension of bias. The respondent relies on three grounds:
a)My duty “to remain an impartial observer has been compromised” by my actions in assisting the applicant as a self-represented litigant. The respondent submits I have “effectively been the architect of the case which the [respondent] now has to meet”.[1]
b)I have predetermined the question of jurisdiction.
c)I…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] FCCA 2792
Decision Date: 14 October 2020

CaseChat Overview and Summary

This matter concerned an application for the recusal of Judge Manousaridis, brought by the respondent, C Pty Ltd. The dispute arose from a bankruptcy notice proceeding where the applicant, an unrepresented litigant, was seeking to set aside the notice. The respondent alleged that the judge had impermissibly assisted the unrepresented applicant by identifying and expanding upon grounds for setting aside the notice that the applicant had not initially relied upon, thereby potentially exceeding the court's jurisdiction and prejudicing the respondent.

The court was required to determine two principal questions. Firstly, whether the judge had impermissibly identified or introduced issues into the proceeding beyond the scope of the application to set aside the bankruptcy notice. Secondly, and contingent on the first question, whether, if the judge had introduced such issues, a fair-minded lay observer, possessing knowledge of the principles governing a judge's obligations to an unrepresented litigant, might reasonably apprehend that the judge would not bring an impartial mind to the resolution of the matters in dispute.

The court dismissed the application for recusal. It reasoned that a judge has a duty to ensure a fair trial and, in particular, to ensure that unrepresented litigants do not suffer disadvantages due to their lack of legal knowledge or objectivity. This includes informing them of procedures that may prove advantageous and ensuring they have not failed to claim rights or put forward arguments due to a lack of legal skill. The judge's actions in identifying potential grounds for the applicant, and directing the filing of a Statement of Applicant's Case, were found to be within the permissible scope of assistance to a litigant-in-person, aimed at ensuring procedural fairness and allowing the applicant to effectively present her case. The court concluded that these actions did not give rise to a reasonable apprehension of bias in a fair-minded lay observer.

Orders

Orders of the court

The application that Judge Manousaridis be recused on the ground of reasonable apprehension of bias is dismissed.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

The first ground relies on what the Judge did commencing on 5 June 2020 when he delivered the first judgment. Since that time the Judge delivered three other substantial interlocutory judgments, one on 14 July 2020, one on 7 August 2020, and one on 18 September 2020.[2] The respondent submits that in paragraphs 46 and 47 of the first judgment the Judge impermissibly identified grounds on which the applicant, an unrepresented litigant, did not rely; and, by doing so, the Judge had impermissibly transformed the proceeding before him – an application to set aside the bankruptcy notice – into a proceeding that purports to incorporate issues that fall outside this Court’s jurisdiction. The respondent further submits that the Judge expanded those issues in the third judgment, particularly in paragraphs 38 and 39 of that judgment. It appears the respondent also submits the Judge induced the applicant to further expand her claims in the “Statement of Applicant’s Case” (SAC) which, on 21 August 2020, the Judge directed the applicant file and serve.[2] Sommer v C Pty Ltd [2020] FCCA 1412 (first judgment); Sommer v C Pty Ltd (No.2) [2020] FCCA 1898; (second judgment); Sommer v C Pty Ltd (No.3) [2020] FCCA 2156 (third judgment); Sommer v C Pty Ltd (No.4) [2020] FCCA 2589 (fourth judgment) Two questions arise. The first is whether the Judge impermissibly identified or introduced issues in the proceeding. The second is, to the extent the Judge did, 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” .[3] That question must be answered by reference to the hypothetical fair-minded lay observer. [3] Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 at [6] (Gleeson CJ, McHugh, Gummow and Hayne JJ) In addition to the knowledge and qualities that are usually attributed to a fair-minded lay observer,[4] it is relevant to this application that two further qualities be attributed to such observer. One is knowledge, in general terms, of the principles that govern the obligations of a judge in relation to an unrepresented litigant. The respondent identified a number of the relevant authorities;[5] but it will be sufficient if I refer to the following passages from the judgment of the Full Federal Court of Australia in Flightdeck Geelong Pty Ltd v All Options Pty Ltd (emphasis added):[6]The submissions advanced on appeal revealed the existing lack of clarity as to the obligations of a court to a litigant-in-person. Though the principles might be succinctly stated at a high level of generality, their application in a particular case is somewhat more problematic. Statements to the effect that, “Courts have an overriding duty to ensure that a trial is fair”: see, eg, Dietrich v R (1992) 177 CLR 292, 330, 362; or that judges must ensure that trials are conducted fairly and in accordance with law: MacPherson v R (1981) 147 CLR 512, 523, are axiomatic but do not offer any great assistance in the particular circumstances of a trial. On the other hand, the observations of Mason J (as his Honour then was) in MacPherson at 534 that the general duty to ensure that litigants do not suffer any disadvantage from exercising their right to be self-represented, includes the obligation to ensure that they do not remain in ignorance of a fundamental principle which, if invoked, may prove advantageous to them, do offer assistance at a more granular level. The disadvantages to which Mason J referred are usually identified as a lack of knowledge (both of the law and the processes of the court) and a lack of objectivity: Tomasevic v Travaglini (2007) 17 VR 100, 130 [140] (Bell J).In practical terms, the Court may find it appropriate to provide the following kinds of assistance to a litigant-in-person:(a)Ensuring the litigant has sufficient information about the practice and procedure of the Court to make effective choices in the conduct of the matter: Hamod [311]. For example, failing to explain the difference between formal sworn testimony and statements made from the bar table, and the significance of failing to file an affidavit, to enable a litigant-in-person to choose whether or not to give oral evidence, may amount to a denial of procedural fairness: SZRUR [39]. Additionally, failing to explain the risks in not leading evidence where adverse inferences might be drawn may also constitute a denial of procedural fairness: Downes v Maxwell Richard Rhys & Co Pty Ltd (in liq) (2014) 46 VR 283.(b)Ensuring the litigant is informed of procedures which, if invoked, may prove to be advantageous: MacPherson, 534. For example, failing to inform a litigant-in-person of their ability to apply for an adjournment may amount to a denial of procedural fairness: AMF15, 50 [47].(c)Ensuring the litigant has not, because of a lack of legal skill, failed to claim rights or put forward arguments: Rajski. [4] As to which, see the authorities to which I refer in FKP17 & Ors v Minister for Immigration & Anor [2018] FCCA 2053, at [23], [24][5] Outline of Argument on Behalf of the Applicant, [19]-[25][6] Flightdeck Geelong Pty Ltd v All Options Pty Ltd [2020] FCAFC 138, at [55]

Ratio Decidendi

Legal Principle Established

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