Southern Equities Corporation Ltd (in Liq) v Bond (No 5) No. Scgrg-96-113

SOUTHERN EQUITIES CORPORATION LTD (IN LIQ) & ORS v BOND & ORS (No 5)
[2000] SASC 385

1................ DEBELLE J...... The seventh defendant, Ms Caboche, and the eighth defendant, Mr John Bond, have both asked that I disqualify myself from sitting in this action. Ms Caboche submits that I should disqualify myself from sitting in any respect so that I should not even continue with the pre-trial management of the action. John Bond asks that I disqualify myself from sitting on the trial. It is not clear whether he asks that I disqualify myself from the pre-trial management of the action. I will proceed on the footing that he does.

Neither applicant alleges actual bias. Instead, each says that there is a reasonable apprehension of bias or prejudgment as that expression is understood in Australia and has been most recently articulated in Johnson v Johnson [2000] HCA 48 in para 11. I am particularly conscious that the test is not whether I would decide the issues in this action adversely to the applicants. The test is as stated in Johnson.
“It has been established by a series of decisions of this Court that the test to be applied in Australia in determining whether a judge is disqualified by reason of the appearance of bias (which, in the present case, was said to take 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.”

I apply that test. I remind myself of the effect of the repetition of the word “might”. I have regard to the knowledge attributed to the hypothetical fair-minded observer and the fact that the question is to be viewed against ordinary judicial practice. I have also had regard to the remarks of Mason J in Re JRL; ex parte CJL (1986) 161 CLR 342 at 352 and to all of the decisions to which I was referred by counsel as well as to Re Lusink; ex parte Shaw (1980) 55 ALJR 12. I annex to these brief reasons a list of the decisions to which I have had regard and I apply the principles enunciated in those decisions.

I had initially believed that I should give detailed reasons for my decision. On further reflection, I believe that is inappropriate since there is a risk of the reasons becoming an attempt at self-justification. Whether I have acted in a way which gives rise to a reasonable apprehension of bias is to be ascertained from my acts or words and not by any ex post facto justification on my part, which may have the appearance of “protesting too much”: cf. Aickin J in Re Lusink; ex parte Shaw (supra) at 16. However, the applicants are entitled to a short statement of my reasons. If requested, I will report as to any facts or give more detailed reasons.
I have, of course, given very close and careful consideration to both applications and the grounds on which they were made. Neither Ms Caboche nor John Bond assert that all applications in this action have been decided adversely to them.

The Reasons for the Mareva Order

In support of their applications, both Ms Caboche and John Bond rely on remarks contained in my reasons for judgment published on 14 September 2000 concerning the Mareva application dated 10 February 2000. Particular reference is made to para 45 of those reasons. That paragraph begins with the words, “For the purpose of this application”. That expression qualifies all that follows. It is a common expression frequently used to indicate and was intended to indicate that the findings are made for the limited purpose of the Mareva application before hearing all of the evidence and before hearing full argument. It indicates that a different view may be formed after all of the evidence and submissions have been heard. Remarks made by me on 9 October 2000 reinforce the point that my reasons do not express a concluded view.
It was also submitted on behalf of the applicants that I had made findings which, by implication, indicated that I have formed views adverse to the credit of both as witnesses or at least which give rise to a reasonable apprehension to that effect. Reference was made to the finding that Carindale Land Corporation Pty Ltd (“Carindale”) is the legal and beneficial owner of the land which has been developed by the Carindale Joint Venture. That finding required no view as to the credit of either Ms Caboche and Mr Bond. The question whether Carindale is the legal and beneficial owner of the land was a question of law and my conclusion was based on facts which, for the purpose of the application, were not in material respects seriously in dispute. The finding does not in any respect reflect on the credit of Ms Caboche or Mr Bond.
Mr Harris QC, who appeared for John Bond, referred to certain comments in paras 49 and 50 which, he said, gave rise to an apprehension of bias as to my views as to the propriety of John Bond’s conduct as a director of Carindale and of Hastings Finance. Nothing in those paragraphs gives rise to such an apprehension. I have expressly refrained from making any finding. The finding that profits were diverted to Hastings Finance is consistent with the evidence of Mr Mews contained in the affidavit tendered on behalf of the respondents to the application for a Mareva order.
Finally, whatever comments I have made do not relate to any central issue in these proceedings. The question of the involvement of SHC, Dampier and Carindale are matters which arise for determination only if it is found that the defendants have been involved in the transactions alleged by the plaintiffs and if the plaintiffs prove that monies which were transferred to Carindale represent the proceeds of the sale or other dealings in the works of art the subject of these proceedings.

An Application to Amend

Both applicants also relied on the fact that on 9 October 2000, I allowed an amendment to the statement of claim, the application to amend being made by the plaintiffs after I had delivered my reasons for making the Mareva order. The transcript of my remarks in the course of the application and my brief reasons for allowing the amendment show that I have an open mind on the allegations in the amendment. Nor is there anything in my earlier conduct which gives rise to any reasonable apprehension that I would be prepared to make findings of fact on the matters alleged in the amendment. There was nothing in my reasons delivered on 14 September 2000 which remotely touched upon the source of monies alleged to have been transmitted in the way the plaintiffs allege in the amendment. My observations in para 45 were limited to the use of the funds.

Other Grounds

Ms Caboche also relied on additional grounds. Reference is made to the fact that between January 1996 and May 1997 I heard ex parte applications by the plaintiffs for orders that the issue of these proceedings be confidential until further order or service of the proceedings. At that stage, the liquidator of the first plaintiff was conducting or seeking to conduct examinations under s 596A or s 596B of the Corporations Law. I expressed concern at the outset about confidentiality and as the transcript shows expressed that concern from time to time. At a later stage in 1998 after the proceedings had been served, I asked the liquidator to attend at court and hear directly my concerns. In the result, the confidentiality orders in this action have now been discharged. All of the confidential documents have for some time been available for reading by the defendants. I have not seen any confidential document which is not available to the parties other than an affidavit of the liquidator which I was permitted to examine with the consent of counsel for Miss Caboche. That affidavit was read some two years ago and I have forgotten its content.
It was alleged that my participation in the ex parte hearings and my reading of the confidential affidavits gave rise to an apprehension of bias or prejudgment. It is alleged that there is an apprehension that I have had regard to information extraneous to the evidence to be led at this trial. As I have said, there is nothing which I have seen or read which by now has not been available to be seen or to be read by all of the parties. To the extent that the extraneous information is said to be found in affidavits sworn by or on behalf of the liquidator in this action, those affidavits reflect much of which is contained in the statement of claim. To the extent that there is other material, that material is either irrelevant or will have to be proved and any judge would have no difficulty in putting to one side what he has read in ex parte applications. It is common judicial practice for a judge to put to one side what is contained in affidavits filed in support of ex parte applications and instead to rely on the evidence led at the trial.
I repeat that I have made no findings on any issue which is central to the issues in this action. Nor have I made any finding as to the credit worthiness of Ms Caboche. In other quite separate proceedings in action number 92516 of 1993, I have criticised Ms Caboche’s tardiness and failure to comply with orders of the court. But those comments were based on objective facts and in no respect reflect upon her credit as a witness in this action. Further, the fact that I have decided applications adversely to Ms Caboche in action number 92516 of 1993 does not require me to disqualify myself as those decisions involved questions of law. Neither involved any issue as to the credit of Ms Caboche. Nothing in those matters related to an issue in this action.
Mr Abbott QC, who appeared for Ms Caboche, referred to a memorandum from Master Bowen Pain and said that I ought to have disclosed to Ms Caboche the receipt of that memorandum and the ex parte applications in this action in the period January 1996 to May 1997. The memorandum had been disclosed on an earlier application to Mr Harris, who was then acting for another of the defendants. Mr Harris later appeared as junior counsel for Ms Caboche. Through inadvertence or oversight, the memorandum was not disclosed to Ms Caboche. If there was any fault in failing to disclose the memorandum or the earlier ex parte applications in action number 113 of 1996, that would only affect the validity of the judgment delivered in 1998. It has no present operation. In any event, the memorandum came to the attention of Ms Caboche. It was the basis of a ground of appeal which was later abandoned on the hearing of the appeal: see Re Southern Equities Corporation Ltd (in liq) (1997) 25 ACSR at 418.
Mr Abbott QC also relied on the fact that I heard an urgent ex parte application by the plaintiffs seeking a further Mareva order against Ms Caboche personally on 11 September 2000. The transcript of proceedings and the ex tempore reasons I then published disclose that I was concerned that I was hearing the matter ex parte, particularly as there was extant an application for a Mareva order against Ms Caboche and others. The transcript and my reasons also disclose that I have expressly refrained from making findings, referring to the fact that I did not know what answer Ms Caboche made to the allegations against her. The only order made was an interim order to preserve an asset pending a further hearing.
It was suggested, at least in Mr Abbott’s outline of submissions, that I have been in some way exposed to information in the winding-up action number 92516 of 1993. That submission was not elaborated. In any event, I have not been involved in the winding-up action other than in dealing with applications by Ms Caboche and Mr Alan Bond seeking to set aside orders for examination. The administration of the winding-up has been conducted by Master Bowen Pain.
Mr Abbott QC also referred to some brief comments made by me at different times. In no sense do they constitute grounds for apprehension of bias. They are remarks of a kind not infrequently made by a judge in the course of the management of an action.
I do not think that the fact that I am the judge charged with the management of the action and am to be the trial judge are factors which tell against the application. Further, I do not have regard to the fact that the trial is listed to commence with a hearing concerning admissibility of documents on 11 December 2000 and the hearing of evidence is listed to commence in March 2001.
If I have failed to mention in these reasons anything on which Mr Abbott relied, it does not mean that I have overlooked it. I have carefully considered each ground individually. I conclude that I should not disqualify myself. I have also had regard to the cumulative effect of my words and conduct and of the grounds relied on and do not believe I should disqualify myself. I am confident that I have done nothing which gives rise to a reasonable apprehension of bias or prejudgment.
For these brief reasons, I am not prepared to disqualify myself from sitting either as the trial judge or as the judge responsible for the management of this action.
I therefore dismiss both applications.

APPENDIX

Australian National Industries Ltd v Spedley Securities Ltd (In Liquidation) (1992) 26 NSWLR 411

City of St Kilda v Evindon Pty Ltd [1990] VR 771

Emanuele v Emanuel Investments (1996) 21 ACSR 83 and on appeal 191 LSJS 412

Garrihy v Wyatt (1975) 10 SASR 476

Gascor v Ellicott [1997] 1 VR 332

Grassby v R (1989) 168 CLR 1

Haldane v Chegwidden (1986) 41 SASR 546

Johnson v Johnson [2000] HCA 48

Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70

Livesey v New South Wales Bar Association (1983) 151 CLR 288

R v Magistrates Court at Lilydale; ex parte Ciccone [1973] VR 122

R v Sussex Justices; ex parte McCarthy [1924] 1 KB 256

R v Watson; ex parte Armstrong (1976) 136 CLR 248

Re JRL; ex parte CJL (1996) 161 CLR 341

Re Lusink; ex parte Shaw (1980) 55 ALJR 12

Ronayne v Ellis (1993) 173 LSJS 333

Vakauta v Kelly (1986) 167 CLR 568

Webb v The Queen (1994) 181 CLR 41

[2000] SASC 385

14 November 2000