Bradbury v Judicial Conduct Commissioner
[2014] NZCA 441
•8 September 2014 at 10 am
| IN THE COURT OF APPEAL OF NEW ZEALAND |
| CA357/2013 [2014] NZCA 441 |
| BETWEEN | CLIVE RICHARD BRADBURY AND GREGORY ALAN PEEBLES |
| AND | JUDICIAL CONDUCT COMMISSIONER GARRY ALBERT MUIR |
| Hearing: | 1 July 2014 |
Court: | Ellen France, Stevens and Wild JJ |
Counsel: | G J Judd QC for Appellants |
Judgment: | 8 September 2014 at 10 am |
JUDGMENT OF THE COURT
AThe appeal is dismissed.
BThe costs award made in the High Court stands.
CThe appellants must pay the first respondent and counsel for Venning J indemnity costs (their actual costs incurred in relation to the appeal) and usual disbursements. We certify for second counsel for the first respondent.
____________________________________________________________________
REASONS OF THE COURT
(Given by Ellen France J)
Table of Contents
Para No
Introduction [1]
Factual background [5]
The Trinity litigation [6]
The Tahakopa investment [12]
The complaints [22]
The Judicial Conduct Commissioner’s decision [36]
The statutory scheme [43]
The High Court judgment [53]
The appellants’ case on appeal [60]
Our analysis [64]
An implausible complaint? [65]
Relevance of the Judge’s knowledge [71]
The need for inquiry? [89]
Abuse of process [99]
Costs in the High Court [109]
Costs in this Court [113]
Result [114]
Introduction
The appellants and the second respondent[1] had an involvement with a forestry investment scheme known as the Trinity scheme. In 2004 Venning J presided over a lengthy trial in the High Court and found that the Trinity scheme comprised tax avoidance.[2] That decision led to a series of cases challenging in various ways the tax avoidance finding. One of the challenges was that Venning J should have recused himself from hearing the Trinity case because he was a shareholder and director in a forestry investment, the Tahakopa Forest Trust Ltd (Tahakopa). That challenge was unsuccessful.[3]
[1]The second respondent did not appear at the High Court hearing.
[2]Accent Management Ltd v Commissioner of Inland Revenue (2004) 22 NZTC 19,027 (HC) [Accent 2004].
[3]Accent Management Ltd v Commissioner of Inland Revenue (2006) 22 NZTC 19,758 (HC); aff’d Muir v Commissioner of Inland Revenue [2007] NZCA 334, [2007] 3 NZLR 495 [recusal decision].
In late May 2010, the appellants complained to the Judicial Conduct Commissioner (the Commissioner) about Venning J. They alleged, among other things, that the Judge made inadequate disclosure in the context of the Trinity litigation about the circumstances surrounding the establishment in 1992 of Tahakopa. The Commissioner undertook a preliminary examination and decided to take no further action on the complaints under s 15A of the Judicial Conduct Commissioner and Judicial Conduct Panel Act 2004 (the Act). The appellants sought judicial review of the Commissioner’s decision in the High Court. It is from Goddard J’s dismissal of that application[4] that the appellants appeal.
[4]Muir v Judicial Conduct Commissioner [2013] NZHC 989, (2013) 26 NZTC ¶21-019 [judicial review decision].
The appeal raises issues about the proper scope of the Commissioner’s preliminary examination. In particular, the first issue is whether the Commissioner conducted his preliminary examination on the correct basis and in an adequate and proper manner and as to whether the Commissioner approached the complaints in the right way. The second issue is whether Goddard J erred in dismissing, at her own instance, the appellants’ application for judicial review as an abuse of the process of the High Court. Finally, the appellants challenge aspects of the costs award made in the High Court.
For the reasons set out below we consider Goddard J was right to dismiss the application for judicial review. The Judge correctly concluded the Commissioner acted within his powers, considered all relevant matters and that his decision was reasonable. The Judge also correctly dismissed the proceeding as an abuse of process. Before explaining our reasons we first set out the factual background and then summarise the legislative scheme and the approach taken in the High Court.
Factual background
We start by saying a little more about the litigation relating to the Trinity scheme.
The Trinity litigation
As Goddard J noted, Dr Garry Muir, a taxation expert, was the architect of the Trinity investment scheme.[5] In 1996 he and one of the appellants, Clive Bradbury (his legal partner), set up the scheme. Mr Bradbury and Gregory Peebles, the other appellant, along with others, were investors in the scheme and claimed various expenses associated with their investments in the scheme as deductions against other income. The Commissioner of Inland Revenue disallowed the deductions and the taxpayers objected. After the trial in 2004, as we have foreshadowed, Venning J found that the Trinity scheme comprised tax avoidance. Venning J’s judgment in Accent Management Ltd v Commissioner of Inland Revenue (Accent 2004) was delivered on 20 December 2004.[6] Dr Muir gave evidence at the trial and in his judgment Venning J criticised Dr Muir’s approach to the litigation, the manner in which he undertook his discovery obligations and his lack of candour in giving evidence.
[5]We adopt the Judge’s description of this part of the narrative: at [12]–[27].
[6]Accent 2004, above n 2. We call this judgment Accent 2004 for consistency with the terminology used in a series of recent decisions from this Court in the ongoing Trinity litigation: Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue [2014] NZCA 348, (2014) 26 NZTC ¶21-084; Redcliffe Forestry Venture Ltd v Commissioner of Inland Revenue [2014] NZCA 349, (2014) 26 NZTC ¶21-085; Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue (No 2) [2014] NZCA 350, (2014) 26 NZTC ¶21-086; and Accent Management Ltd v Attorney-General [2014] NZCA 351, (2014) 26 NZTC ¶21-087.
Before trial and during the pre-trial management conference the possibility of a site visit to view the subject forest was raised by one counsel. In this context, Venning J indicated that he did not consider a site visit would be particularly helpful or necessary as “he knew a little bit about forests”.[7] He said he “had had an interest in a forest for fifteen years”.[8]
[7]Judicial review decision, above n 4, at [15].
[8]Judicial review decision, above n 4, at [15].
After the judgment in Accent 2004 was delivered, the Commissioner of Inland Revenue sought costs against the plaintiffs and indemnity non-party costs against Dr Muir personally. In response to this application, Dr Muir applied for Venning J to recuse himself from dealing with the issue of costs. The following grounds were advanced: first, the adverse comments the Judge had made about Dr Muir in the judgment; secondly, Dr Muir and his colleagues had apparently fallen out with two forestry consultants, Messrs Hedges and Janett, who were co-directors in Tahakopa; and, finally, a “small suspicion” that because of his involvement in a private forestry investment, Venning J may have been exposed to income tax/gift duty or conveyance duty risks at the time the scheme was set up and this would be known to the Commissioner of Inland Revenue.[9] We return later to the detail of the submissions made in January 2006 by Mr Judd QC on behalf of Dr Muir.
[9]Judicial review decision, above n 4, at [17]–[19].
Venning J issued a minute on 30 September 2005 responding to the application for recusal.[10] The Judge dealt with the various matters raised in the application. For present purposes we need only note that Venning J stated that his investment was a “modest” one and that Tahakopa “is a non trading entity which holds the land on which the forest is planted on trust for all investors”.[11] The Judge said that he did not propose to recuse himself from dealing with the application for costs and that if the recusal request was pursued there would need to be a formal hearing. The matter proceeded to a formal hearing. Venning J declined to recuse himself.[12] The Judge also declined an application by the plaintiffs to have the judgment in Accent 2004 recalled.
[10]Accent Management Ltd v Commissioner of Inland Revenue HC Auckland CIV-2003-404-2966, 30 September 2005.
[11]At [5].
[12]Accent Management, above n 3.
The recusal and the recall decisions were appealed and the appeals heard separately. Both appeals were dismissed by this Court.[13] Venning J’s substantive judgment in Accent 2004 was upheld by this Court[14] and the Supreme Court.[15]
[13]Recusal decision, above n 3; Accent Management Ltd v Commissioner of Inland Revenue (No 2) [2007] NZCA 231, (2007) 23 NZTC 21,366 [recall decision].
[14]Accent Management Ltd v Commissioner of Inland Revenue [2007] NZCA 230, (2007) 23 NZTC 21,323.
[15]Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue [2008] NZSC 115, [2009] 2 NZLR 289.
There have been numerous attempts subsequently by some of the Trinity investors, including the appellants, to relitigate these issues. We set out in Appendix 1 those which have a particular focus on Venning J.[16]
The Tahakopa investment
[16]The list is not intended to be exhaustive.
To put the complaints of inadequate disclosure in context, it is helpful to first discuss some of the details of the Tahakopa investment.
As Venning J told the Commissioner, the forest investment was promoted by Messrs Hedges and Janett. Venning J was introduced to the investment and to the promoters through a Mr Derm Martin, a friend and another proposed investor. Venning J was, at that time, in practice in litigation in Christchurch. The Judge initially held 16 out of the total of 100 shares in Tahakopa. His shareholding increased to 25 per cent of the company in 1999. The information before us suggests there were initially six principal shareholders each holding 16 shares and that by 1 February 1999 there were four shareholders, each holding 25 per cent.
Messrs Hedges and Janett, as promoters, took responsibility for giving instructions to White Fox and Jones, an independent firm of solicitors, in relation to the preparation of documents to complete the purchase of the land and establishment of the investment structure.
Tahakopa entered into an agreement for sale and purchase of the forestry block (some 220 ha in Southland) from the then owners of the land, Mr and Mrs Flight, in June 1992. The June date was subsequently amended to 6 July 1992.
Tahakopa was incorporated as a private company on 21 July 1992. At that point in time, as Goddard J explained, the Land Settlement Promotion and Land Acquisition Act 1952 (LSP Act) required that, in order to acquire land, a company either had to make an application for consent, or be incorporated with at least 10 shareholders and file a statutory declaration stating that the purchaser had entered into the transaction solely on its own behalf as the person beneficially entitled under the transaction.[17]
[17]Judicial review decision, above n 4, at [105]. The Land Settlement Promotion and Land Acquisition Act 1952 was repealed in January 1996.
In the absence of Messrs Hedges and Janett, on 27 July 1992 Venning J signed two LSP Act declarations to the effect that the purchaser had entered into the transaction on its own behalf as the person beneficially entitled thereunder. Two declarations were required so that one could be sent to each of the two relevant land registration district offices. Those declarations referred to the agreement for sale and purchase with the Flights dated 6 July 1992. Mr Janett had earlier (22 July 1992) signed LSP Act declarations but those referred to the 23 June agreement for sale and purchase. The Judge also signed the 1994 annual return for Tahakopa and witnessed a mortgage by Messrs Hedges and Janett in favour of the Flights as vendors for some vendor finance.
During the course of the Commissioner’s preliminary examination, Venning J told the Commissioner that a search of the solicitors’ files disclosed that at some time after the LSP Act declarations were signed, Mr Hedges met with the solicitors. After that meeting the solicitors prepared a deed appointing Tahakopa as a custodian trustee. It appears that the deed was sent to Mr Hedges on 14 August 1992. The draft deed on the solicitors’ file shows that the company agreed to become registered as proprietor of the land in trust for the investors as tenants in common in their respective shares.
Venning J also informed the Commissioner that the solicitors confirmed that, apart from the certificates of title to the land, they do not hold any relevant executed deeds or documents. The Judge’s inquiries of Messrs Hedges and Janett disclosed that they do not hold a fully executed copy either, although Mr Hedges holds copies of the deed which has been executed by some of the parties. Neither of the copies held by Mr Hedges have been executed by Venning J. The Judge said: “With the passage of time, I am not able to say whether I executed the document or not.” However, he accepted it was likely he did so at some time but has no independent recollection of that.
For completeness reference should also be made to information provided by the appellants in one of the complaints to the Commissioner to the effect that Tahakopa registered in 2009 under the New Zealand Emissions Trading Scheme for the allocation of New Zealand units under the Climate Change Response Act 2002. The appellants’ advice to the Commissioner was that this was only possible if Tahakopa retained the freehold interest in the forest and had not leased it to another entity or created a registered forestry right over the forest, or if it had done so with the consent of the leaseholder or registered forestry right holder.[18] They say that the relevant titles have no registered forestry right or registered lease memorial.
[18]Presumably with reference to s 187(1)(a) of the Climate Change Response Act 2002.
We add that the establishment of Tahakopa took place prior to the Judge’s appointment, in 1995, as a Master of the High Court and then as a Judge of that Court in 2002. The Judge remained a director of Tahakopa until 1 April 2008.
The complaints
Like the Trinity litigation itself, the complaints to the Commissioner have developed in instalments. There was an initial complaint dated 31 May 2010. The complaint was provided in a restated form on 14 February 2011 following a response to the Commissioner from Venning J dated 26 July 2010. There was a second restatement of the complaint dated 6 September 2011.
The initial letter of 31 May 2010 identified two complaints. It was supported by 220 pages of annexures. The first complaint was an allegation that Venning J failed to make adequate disclosure about the circumstances surrounding the acquisition by Tahakopa of forestry land “where knowledge of any irregularities in relation to that acquisition would be known both to the judge and to another party who regularly appears before His Honour [the Commissioner of Inland Revenue]”. Under this heading, reference was made to Venning J’s statement in the September 2005 minute that Tahakopa holds the land on trust. It was suggested that if Tahakopa was a trustee at the time the forestry land was purchased then Venning J’s LSP Act declarations in 1992 that Tahakopa was purchasing the land on its own behalf as “the person beneficially entitled thereunder” would have been false albeit unknowingly. It was also suggested that the statutory declarations may have been knowingly false. The suggestion that the declarations were false is not pursued on this appeal.
The second complaint was that Venning J should have disclosed and obtained consent from the Chief High Court Judge to be involved as a director in the forestry investment pursuant to s 4(2A) of the Judicature Act 1908.[19]
[19]Section 4(2A) states that a judge must not undertake “any other paid employment or hold any other office (whether paid or not) unless the Chief High Court Judge is satisfied that the employment or other office is compatible with judicial office”.
Venning J responded to the Commissioner in relation to the initial complaint in his letter of 26 July 2010. The Judge said he rejected any suggestion that the statutory declarations were false. He attached a letter from Ms Lowe, the independent solicitor acting on the establishment of Tahakopa, in which Ms Lowe confirmed that Tahakopa was the person beneficially entitled under the agreement to purchase. Venning J also rejected any suggestion he had withheld information known to him to be material. He accepted that if he had made “a full enquiry” at the time he “would have obtained information that may have been relevant to the issue of when the beneficial ownership passed from [Tahakopa] to the investors”. But, the Judge said, at the relevant time there was no reason to carry out those inquiries. Venning J then set out his reasons for that conclusion.
Essentially, given the way the matter had developed and the arguments had been put, Venning J said it did not occur to him that there was “anything about the detail of the structure of the investment or the circumstances of the acquisition of the land that could be relevant” to his ability to deal impartially with the costs application or that necessitated further inquiry.
Because of the complaint, Venning J explained that he had obtained further information he was not aware of at the time of the recusal application. The Judge thought it proper to disclose this further material to the Commissioner although he did not consider it was relevant to the inquiry. In particular, Venning J advised the Commissioner that he had obtained the solicitors’ files relating to the establishment of Tahakopa. He explained what the files showed about the transfer of beneficial ownership. This is a reference to the material we have discussed above[20] involving the preparation of a deed appointing Tahakopa as a custodian trustee.
[20]At [18]–[19].
The Judge then went on to deal with the second complaint relating to s 4(2A) of the Judicature Act. That complaint is relevant now only as part of the context. As it is now not pursued, we do not need to discuss this part of the Judge’s response.
There was further correspondence from the appellants and the Judge to the Commissioner but for present purposes we can move to the first restatement of the complaint dated, as we have noted, 14 February 2011. In this restatement, some 66 pages in length, the appellants refer to the fact that although there is some “cross-over” between the original two complaints, “in essence” those complaints remain; but these were expanded and “supplemented” by two new complaints, namely that:
(a)the Judge is not a fit and proper person to hold judicial office, and
(b)the Judge appears to have misled the Judicial Conduct Commissioner in material respects.
The expanded complaint about non-disclosure included various suggestions, now not pursued, of deliberate cover up. The complaint relating to inadequate disclosure that is still pursued is best summarised by the following excerpts:
[T]he Judge has put himself in a position where he and the Commissioner of Inland Revenue know facts that should have been disclosed by the Judge, thus creating an asymmetry of relevant knowledge between the parties before him and constituting an abuse of judicial office.
…
[I]n the absence of plausible explanation there is evidence that the Judge continues to owe the [Commissioner of Inland Revenue] money (non-payment of stamp and gift duty) in circumstances where it is also open to a Panel to find that the Judge knows that such a liability exists but has neither satisfied it, nor brought it to the [Commissioner of Inland Revenue’s] attention; failure to do so almost certainly involving a continuing revenue offence (e.g. s.143A(1)(b) Tax Administration Act 1994);
The appellants focus on stamp and gift duty. They say that liability to pay conveyance duty under the Stamp and Cheque Duties Act 1971[21] and to pay gift duty arose on the transfer of the beneficial interest to the investors as beneficiaries of the trust from Tahakopa to itself as trustee at the point when Tahakopa became the custodian trustee. They also say that no relevant exemption from stamp duty appears to apply to the declaration by Tahakopa that it held the land conveyed to it by the Flights on trust. The appellants point out that stamp duty was payable on an “instrument of conveyance”.[22] That includes “[e]very instrument of declaration of trust of any property”.[23] An instrument of declaration of trust includes an instrument “creating an express trust or acknowledging the existence” of a trust already set up “whether the instrument is executed by the creator of the trust or by the trustee, and whether the creator … and the trustee are the same or different persons”.[24]
[21]Stamp duty was abolished by the Stamp Duty Abolition Act 1999.
[22]Stamp and Cheque Duties Act 1971, ss 10 and 15.
[23]Section 7(b).
[24]Section 2, definition of “Instrument of declaration of trust”.
The Commissioner asked Venning J to respond to the restated complaint and the Judge did so by letter dated 15 March 2011. In dealing with the complaint about non-disclosure, Venning J noted that while he did not accept the complainants were right that the establishment of Tahakopa resulted in a tax liability, that issue could not be resolved as part of the Commissioner’s preliminary examination. Accordingly, the Judge said he accepted it was appropriate for the Commissioner to “proceed on the basis that some liability could ultimately be established”.
Venning J explained that the matters now highlighted in the complaint were “very much subsidiary issues” at the time of the recusal hearing in 2006. He said that at the time of the Accent 2004 trial and at the time of the recusal application he had no recollection about the detail of the establishment of the investment, his involvement in its establishment was very limited, and he had “no reason to be concerned about the investment” in terms of any possible tax liability.
The second restatement of the complaint dated 6 September 2011 extended to over 80 pages or 303 paragraphs of fairly closely written material. The earlier complaints were, broadly speaking, maintained. The complaint of material non-disclosure was expanded and included allegations, now not pursued, that the Judge signed false and/or sham documents which misled the District Land Registrars in Otago and Southland Land Registries into accepting an illegal contract as legal.
What was described as an “implied third complaint” was based on the cumulative effect of the Judge’s conduct which it was said was such that he is not a fit and proper person to continue to hold office as a High Court judge. The fourth complaint related to Venning J’s letter to the Commissioner of 26 July 2010 which was said to contain a number of “wrong or misleading allegations and representations of fact which, if made knowing they were incorrect or incomplete, could be grounds in itself for recommending that a Panel be appointed”.
The Judicial Conduct Commissioner’s decision
The Commissioner’s decision was delivered on 30 November 2011.[25] The Commissioner set out the essence of the complaints and the Judge’s responses. On the complaint relating to the alleged breach of s 4(2A) of the Judicature Act, the Commissioner concluded that Venning J’s behaviour did not warrant further inquiry either by him or by a Judicial Conduct Panel or by the Head of Bench. The Commissioner decided to take no further action in respect of this complaint.
[25]David Gascoigne Decision of the Judicial Conduct Commissioner as to complaints by Messrs Bradbury, Peebles and Muir concerning Justice Venning (30 November 2011) [Commissioner’s decision].
In relation to the complaint about the adequacy of disclosure by the Judge, the Commissioner first explained the steps he had taken which included interviews of Ms Lowe and Messrs Janett and Hedges. The Commissioner said that the purpose of these interviews was to “ascertain the Judge’s state of knowledge regarding the circumstances surrounding Tahakopa’s investment structure and land acquisition, and to ascertain the extent of his involvement in the company generally”.[26] The Commissioner recorded that the interviews he had conducted separately with these three persons confirmed the accuracy of the Judge’s responses to him. The Commissioner said that the “key issue” on this complaint was “the extent of the Judge’s knowledge of the circumstances surrounding the acquisition”.[27] On this aspect, the Commissioner’s conclusion was as follows:
172.It was clear from my separate interviews with Ms Lowe and Messrs Janett and Hedges that the Judge not only played no role in the preparation of documentation relating to Tahakopa’s acquisition of land or the Deed of Trust, but also that he never received any communication from – or had any reason to be aware of any circumstances that could result in potential liability to – the [Commissioner of Inland Revenue].
[26]At [163].
[27]At [171].
The Commissioner considered it was “perfectly acceptable” in a case such as this “when a client has engaged a lawyer to complete the formalities of a transaction” to assume that “proper process has been followed, without feeling the need personally to undertake a minute scrutiny of all that has been done by the lawyer engaged to undertake the task”.[28]
[28]At [174].
The Commissioner then reviewed the disclosure made by Venning J and concluded that further disclosure was not needed. The Judge could not “disclose” matters that were not in fact the position, or which were not known to him. What information he did have was not relevant to his ability to sit on the case concerned, and did not need to be disclosed.
The Commissioner accepted the Judge’s explanation about his state of knowledge concerning the circumstances in which Tahakopa acquired the land. He then dealt with the complainants’ suggestion that it may be plausible that the Commissioner of Inland Revenue possessed information indicating that Venning J is liable to the Commissioner of Inland Revenue “which would create an ‘asymmetry of knowledge’ between the Judge and the [Commissioner of Inland Revenue]”.[29] The Commissioner noted that the Judge did not hold the opinion that there had been “transgressions” nor that there “is potential liability to the [Commissioner of Inland Revenue]”.[30] It followed that there was nothing for the Judge to disclose in this regard and that none of the complainants’ allegations were plausible. The Commissioner therefore concluded that Venning J’s conduct in relation to this complaint did not necessitate any further inquiry.
[29]At [213].
[30]At [214].
The Commissioner also accepted as credible Venning J’s explanation that “he was not aware of any potential discrepancies or any liability to the [Commissioner of Inland Revenue] that arose from the circumstances in which Tahakopa was established and acquired land”.[31] He said that it followed that there was no deliberate non-disclosure.
[31]At [232].
The Commissioner similarly concluded that the complaint that the Judge was not a fit and proper person was neither plausible nor merited any further inquiry. Finally, the Commissioner said there was no attempt to mislead him. Again, no further inquiry was needed. By a small margin, the Commissioner did not consider that he could treat the complaints as frivolous, vexatious or not in good faith under s 16(1)(d) of the Act.
The statutory scheme
The purpose of the Act is to “enhance public confidence in, and to protect the impartiality and integrity of, the judicial system” by doing three things:[32]
(a)providing a robust investigation process to enable informed decisions to be made about the removal of Judges from office:
(b)establishing an office for the receipt and assessment of complaints about the conduct of Judges:
(c)providing a fair process that recognises and protects the requirements of judicial independence and natural justice.
[32]Judicial Conduct Commissioner and Judicial Conduct Panel Act 2004 [the Act], s 4.
The Act establishes the office of the Judicial Conduct Commissioner.[33] The Commissioner’s functions are as follows: first, to receive complaints about judges and to deal with those complaints “in the manner required” by the Act; secondly, to “conduct preliminary examinations of complaints”; and, thirdly, “in appropriate cases” to recommend the appointment of a Judicial Conduct Panel to inquire into any matter “concerning the conduct of a Judge”.[34] The Commissioner has all the powers necessary for carrying out his or her functions and is required to act independently in carrying out those functions.[35]
[33]Section 7(1).
[34]Section 8(1). Section 8(2) makes it clear that it is not the Commissioner’s function to “challenge or call into question the legality or correctness” of, amongst other matters, a “judgment, or other decision given or made by a Judge in relation to any legal proceedings”.
[35]Sections 8(3) and 9. The Act also provides for a Deputy Judicial Conduct Commissioner to be established and for that person’s functions and powers: ss 8A and 8B.
Importantly, for present purposes, the Commissioner is required to deal with a complaint by, first, taking the steps set out in s 14 which require acknowledging the complaint and dealing with it promptly.[36] Sections 14(2) and 14(3) provide that the Commissioner may send a copy of the complaint to the Judge and the Judge is entitled to request and receive a copy of the complaint. The next step is to conduct a “preliminary examination” under s 15.
[36]A complaint must be made in writing, identify the Judge who is the subject of the complaint, identify the complainant and state the subject matter of the complaint: s 13(1).
Section 15(1) requires the Commissioner to conduct a preliminary examination of each complaint and “form an opinion” on four matters. First, whether there are any grounds for exercising the power under s 15A to take no further action in relation to the complaint. Secondly, whether there are any grounds for dismissing the complaint under s 16. Thirdly, whether the subject matter of the complaint, if substantiated, could warrant referral of the complaint to the Head of Bench under s 17. Finally, the Commissioner must form an opinion as to whether the subject matter of the complaint, if substantiated, could warrant consideration of the removal of the Judge from office by way of a recommendation under s 18.[37]
[37]By virtue of s 3, an overview of the process for the Commissioner and the Judicial Conduct Panel is set out as sch 1 of the Act and we attach a copy as Appendix 2 to this judgment.
Once the preliminary examination is completed and the Commissioner has formed the opinion required by s 15(1), the Commissioner must take one of the following steps:[38]
(aa)exercise his or her power to take no further action in respect of the complaint (section 15A); or
(a)dismiss the complaint (section 16); or
(b)refer the complaint to the Head of Bench (section 17); or
(c)recommend that the Attorney-General appoint a Judicial Conduct Panel to inquire into any matter or matters concerning the conduct of a Judge (section 18).
[38]Section 15(5).
The Commissioner’s power to take no further action is dealt with in s 15A. The Commissioner may take no further action in relation to a complaint “if satisfied that further consideration of the complaint would, in all the circumstances, be unjustified”.[39] Section 15A(2) lists some of the reasons why further consideration would in all the circumstances be unjustified. They include the fact that the complaint has been resolved to the complainant’s satisfaction following explanation from the Judge or that the complaint is genuine and made in good faith but is based on a misunderstanding. Section 15A(4) makes it plain that the examples given in subs (2) do not limit the Commissioner’s power under subs (1).
[39]Section 15A(1).
Under s 16, the Commissioner must dismiss complaints that fail to meet the required threshold. Various matters are then listed, for example, that the complaint is not within the Commissioner’s jurisdiction or the complaint has no bearing on judicial functions or judicial duties. In terms of s 16(1)(d), the Commissioner must dismiss the complaint if he or she is of the opinion that “the complaint is frivolous, vexatious, or not in good faith”.
Under s 17, the Commissioner must refer a complaint to the Head of Bench unless the Commissioner either exercises the power under s 15A to take no further action, dismisses the complaint under s 16 or recommends under s 18 that a Judicial Conduct Panel be appointed.
Section 18 sets out the Commissioner’s power to recommend that the Attorney-General appoint a Judicial Conduct Panel. Section 18 provides as follows:
(1)The Commissioner may recommend to the Attorney-General that he or she appoint a Judicial Conduct Panel to inquire into any matter or matters concerning the alleged conduct of a Judge if the Commissioner is of the opinion that—
(a)an inquiry into the alleged conduct is necessary or justified; and
(b)if established, the conduct may warrant consideration of removal of the Judge.
(2)The Commissioner must give reasons with his or her recommendation under subsection (1).
(3)The Commissioner must give the complainant and the Judge who is the subject of the complaint written notification of any action taken under subsection (1).
The Act then deals with the appointment of a Judicial Conduct Panel by the Attorney-General. Section 21 provides that the Attorney may appoint a panel to inquire into or report upon those matters the subject of a recommendation by the Commissioner under s 18. Hearings of a panel are, generally, to be in public.[40] A panel must report to the Attorney-General at the conclusion of its inquiry.[41] As the Full Court of the High Court said in Wilson v Attorney-General a panel report recommending removal be considered “is a prerequisite to removal (unless the Judge has been convicted of a serious criminal offence, in which case the Attorney may act independently of the Act)”.[42] If the panel concludes that removal of a Judge is justified, the Attorney-General must determine, in his or her “absolute discretion” whether to take steps to initiate removal.[43]
The High Court judgment
[40]Section 29; contrast to proceedings before the Commissioner: s 19.
[41]Section 32.
[42]Wilson v Attorney-General [2011] 1 NZLR 399 (HC) at [38].
[43]Section 33.
Goddard J dealt with the challenges in relation to the Commissioner’s decision on each of the four complaints in turn. The Judge’s approach reflected that in the amended statement of claim. That set out various particulars and challenges to the Commissioner’s decision and then sought orders, amongst other matters, setting aside the Commissioner’s decision to take no further action and directing a reconsideration.
On the first complaint relating to alleged non-compliance with s 4(2A) of the Judicature Act, the Judge said there was “no rational basis” for the Commissioner to have rejected Venning J’s explanation he had not appreciated the requirements of s 4(2A) at the time it came into force or appreciated it might have applied to his interest in Tahakopa.[44]
[44]Judicial review decision, above n 4, at [99].
As to the second complaint of material non-disclosure, Goddard J concluded the opinion formed by the Commissioner was open to him. As the third complaint about fitness to hold office was subsumed in to the first two complaints, logically, there was no error in the Commissioner’s approach to this complaint. Finally, the Judge said the Commissioner’s conclusion as to the complaint based on Venning J’s disclosure to the Commissioner was open to him.
In explaining the reasons for these conclusions, Goddard J said the Commissioner had followed the approach set out in Wilson. That case dealt with the decision of the Commissioner to recommend the appointment of a Judicial Conduct Panel. Her Honour continued:[45]
[157] While the plaintiffs’ allegations are undoubtedly serious, that of itself does not constitute substance. The suggestion that an allegation of itself, or the mere assertion of a complaint per se, obliges the Commissioner to proceed on the basis that it is capable of substantiation is plainly wrong. The Commissioner is not a “mere conduit for complaints but a decision‑maker”. He has a duty to filter and assess evidential sufficiency through the careful examination of available information. An allegation of itself carries no weight at all. An opinion by the Commissioner as to whether a complaint has sufficient plausibility to be capable of being established at a hearing can only be formed following such an exercise.
[45]Footnote omitted.
The Judge, after a review of the facts, considered it was open to the Commissioner to conclude that, absent any deliberate wrongdoing, a panel could not conclude the Judge’s conduct warranted removal. On that basis, an inquiry into the alleged conduct was neither necessary nor justified under s 18(1)(a) of the Act.
The Judge also took the view that it was open to the High Court in the exercise of its inherent jurisdiction to dismiss the application for judicial review on the basis the application was an abuse of process. That was so even though the Commissioner concluded s 16 did not apply. Her Honour considered the application was an abuse because it was a collateral attack on the substantive Accent 2004 decision. Goddard J said this:
[189] In summary, the plaintiffs’ complaints are all founded on the same premise of collusion and bias. They are a continuing allegation of unlawful conduct by the Judge that was first levelled in 2006. I have no difficulty in concluding that the complaints are in substance and effect a further attempt to impugn the decision in Accent [2004] and thus are a collateral attack on that judgment and an abuse of both the judicial complaints procedure and the High Court’s supervisory jurisdiction.
Goddard J awarded costs in favour of the Commissioner on a 3C basis including costs for second counsel on a 3B basis. Costs were awarded in favour of counsel for Venning J on a 3C basis. The Judge issued a further decision about costs after a dispute about the application of the banding to some of the steps in the proceeding.[46]
The appellants’ case on appeal
[46]Muir v Judicial Conduct Commissioner [2013] NZHC 3507 [costs decision].
The appellants’ case now focuses on what they say is material non-disclosure arising from the Judge’s potential liability for stamp and/or gift duty. There is no issue now about alleged compliance with s 4(2A) of the Judicature Act and no suggestion that the LSP Act declarations were false. Essentially, the appellants say that the Commissioner should have proceeded on the basis there was material non-disclosure either because the Judge did not disclose his potential indebtedness to the Commissioner of Inland Revenue or did not disclose information that would lead others to that conclusion until he made his further disclosures to the Judicial Conduct Commissioner.
In developing this submission, Mr Judd says that the Commissioner has gone off on the wrong basis when he has considered the Judge’s knowledge instead of proceeding on the presumption a tax liability could have been established. The obligation of the Commissioner was to consider the adequacy of disclosure against the facts the Commissioner knew. Mr Judd says, for example, if those facts are compared with those known by this Court, material non-disclosure is apparent. It is also submitted that it was not open to the Commissioner to consider exculpatory matters. In any event, Mr Judd asks how realistic it was for the Commissioner to accept the Judge’s explanation. He says that the Commissioner can only reject those matters which are speculative or implausible.
The appellants also say that the Judge was put on inquiry by the submissions made on behalf of Dr Muir in 2006. At that point the Judge should have made further inquiries about the acquisition of the forestry block by Tahakopa. In addition, it is said that in this way the Judge misled this Court in relation to the appeal against the decision of the Judge not to recuse himself on the costs decision.
Finally, it is submitted that Goddard J was wrong to dismiss the proceeding on the basis of abuse of process. That is so where the Commissioner has rejected the application of s 16. Further, it is submitted that it was not open to the Judge to raise the matter on her own volition. In any event, Mr Judd says, this is not a collateral challenge because the proceeding could not affect the outcome of the Accent 2004 case.
Our analysis
The appellants accept that the Commissioner can decide not to take any further action where the complaint is speculative or implausible. For the reasons we now discuss, we consider the Commissioner was right to conclude that the complaint fell into that category.
An implausible complaint?
The first point we make is that the allegations of deliberate concealment and cover up were inherently improbable. Not surprisingly, these allegations are not now pursued but they were part of the context in which the Commissioner had to form his opinion.
Secondly, it is fanciful to suggest that potential liability for stamp or gift duty arising on the establishment of Tahakopa would lead Venning J to decide the Trinity case, the recusal application or the costs application other than on the merits. As Blanchard J said in Saxmere Co Ltd v Wool Board Disestablishment Co Ltd: “The party alleging apparent bias must also articulate a logical connection between the identified relationship and the ‘feared deviation’ from the course of deciding the [case] on its merits.”[47]
[47]Saxmere Co Ltd v Wool Board Disestablishment Co Ltd [2009] NZSC 72, [2010] 1 NZLR 35 at [20].
An unsatisfied tax liability in itself is not sufficient to form a basis for recusal, as Mr Judd accepted.[48] Mr Judd sought to draw a distinction between the present case and one where at a particular point in the financial year a judge may have a tax liability. However, it is difficult to see how any link could be made between the potential liability now said to arise in this case, even if that could be established, and the Judge’s approach to the litigation. In any event, there has been no suggestion by the Commissioner of Inland Revenue that there is any such liability. Indeed, it is now over 20 years since the establishment of Tahakopa and no steps have been taken by the Commissioner of Inland Revenue to pursue any such liability.
[48]The Senior Courts Act 1981 (UK), s 14 expressly states that a judge of the Senior Courts or of the Crown Court is not incapable of presiding over a proceeding simply by reason of being one of a class of taxpayers liable in common with others to pay tax which may be affected by the proceeding.
We interpolate here that it is problematic as to how Tahakopa might have become liable for stamp duty, notwithstanding the wide definition of “instrument of conveyance” as outlined above.[49] By name and function “Tahakopa Forest Trust Ltd” was incorporated to hold the forestry block for the forestry investors. As we detailed above,[50] when Tahakopa was incorporated in 1992 six investors held 96 of the 100 shares, with four additional shareholders each holding one share, to make up the 10 person company required by the LSP Act. By 1999 there were four investor shareholders each holding 25 shares. On one view, the deed of trust may have been unnecessary being a statement of the obvious. However, we say no more about this because Venning J was prepared to deal with the matter on the basis some liability to the Commissioner for Inland Revenue could be established. That was the basis on which the Commissioner and Goddard J dealt with the matter.
[49]At [31].
[50]At [13].
Against this background, the remaining argument is based on an asymmetry of knowledge between the Judge and parties to litigation before him involving the Commissioner of Inland Revenue. This depends on inferences being drawn about what both the Judge and the Commissioner of Inland Revenue knew and about what the Judge knew about the Commissioner of Inland Revenue’s knowledge. It was well open to the Commissioner to conclude that the drawing of such inferences was speculative. This is not a situation where one could say that at the relevant point in time the Judge was somehow “beholden”[51] to the Commissioner of Inland Revenue. Rather, the appellants’ approach is premised on tacit collusion between the Commissioner of Inland Revenue and the Judge. As Goddard J stated:[52]
Their argument presupposes that the [Commissioner of Inland Revenue], with astonishing clairvoyance, three years before the Judge was appointed as a Master of the High Court, foresaw future opportunities for judgments in the Inland Revenue Department’s favour, if a blind eye were turned to taxation irregularities in 1992.
[51]Saxmere, above n 47, at [25] and [28] per Blanchard J, [46] per Tipping J, [115] per McGrath J, and [123] per Gault J.
[52]Judicial review decision, above n 4, at [168].
In these circumstances, we agree with the Commissioner that the complaint about material non-disclosure was not plausible and, moreover, was “designed to unsettle and disturb the Judge and … contains unjustifiable contentions”.[53] We return to the latter theme when we deal with the abuse of process argument.
Relevance of the Judge’s knowledge
[53]Commissioner’s decision, above n 25, at [221].
In any event, we consider it was open to the Commissioner to approach the matter by considering the state of the Judge’s knowledge of the events in 1992 at the times when it is said he did not comply in a material way with any duty there may have been to disclose.[54] The effect of the Commissioner’s findings is that the Judge had no knowledge of any potential tax liability and was not put on inquiry in 2005 or in 2006 or at the time of this Court’s decision on the recusal application. In that situation, there cannot be any question of material non-disclosure and therefore no basis for the Commissioner to form the opinion under s 18(1) that an inquiry by a panel was necessary or justified.
[54]As to “duty” see below at [90], n 76.
Whether the Commissioner acted correctly in this respect requires consideration of the scope of the Commissioner’s preliminary examination function and of the facts.
As to the scope of the Commissioner’s function there is no dispute that the Commissioner’s task was preliminary in nature. It is not for the Commissioner, who may not necessarily be a lawyer, to decide disputed questions of fact; those are questions for a panel. However, as counsel for the Commissioner submitted, there is a distinction between finding facts and reaching the conclusion that there is an insufficient evidential basis to justify either recommending a panel be appointed or referral to the Head of Bench.
The nature of the Commissioner’s examination is apparent from the Act. The first relevant feature is that the Commissioner does not have power to compel the provision of information.[55] It is unlikely that a body set up to decide disputed questions of fact in this context would have no coercive powers of this sort. Further, the Commissioner is obliged to maintain confidentiality in his process.[56] In any event, s 15 is clear on its face that the examination to be undertaken is a “preliminary” one.
[55]The Commissioner can obtain court documents: s 15(4)(b).
[56]Section 19.
Equally apparent, however, is the fact that, as the High Court put it in Wilson and Goddard J endorsed, the Commissioner is not acting as a “mere conduit” but has to undertake a filtering or screening function of complaints and form an opinion as to which of the four possible approaches is to be taken to the complaint.[57] That filtering function must entail some assessment of the facts and consideration of whether on the facts, if established, removal is possible. The parties to this appeal were content to proceed on the basis that, as the High Court put it in Wilson, “the facts alleged [must be] sufficiently plausible to justify further investigation and … the conduct, if established, [must] be serious enough to warrant consideration of removal” rather than one of the other courses of action available under the Act.[58] As the Court said, the threshold is “low” but is “a definite one”.[59]
[57]Wilson, above n 42, at [42]; judicial review decision, above n 4, at [157]; see also Siemer v Judicial Conduct Commissioner [2012] NZHC 1481 at [26].
[58]At [44]; see also discussion by John McGrath “Accountability of the judiciary” (2014) 25 PLR 134 at 143–144.
[59]At [44].
Accordingly, in Wilson the High Court concluded there was no error in law on the Commissioner’s part in recommending a panel consider the adequacy of the Judge’s disclosure. That was because there were “unresolved questions of fact about the advice and encouragement the Judge received … as to the disclosure he should make”.[60] The resolution of those factual questions would determine where the Judge’s conduct sat on the spectrum of disclosure. However, the Court in Wilson found the Commissioner had erred in recommending the appointment of a panel to inquire into “any matter” concerning the Judge’s conduct. That was because this reflected a failure on the Commissioner’s part to sift out those matters the Commissioner did not consider warranted inquiry and/or which could not warrant removal.
[60]At [86].
A number of features of the Act support these conclusions about the Commissioner’s task.
First, reference should be made to the purposes of the Act. One of the purposes is to set up a “robust” investigation process to enable “informed” decisions to be made about removal.[61] Importantly also, the process must be a fair one and one which recognises and protects the requirements of judicial independence and natural justice.[62] That balance is important to ensure the maintenance of public confidence in the judiciary and in the administration of justice. We interpolate here that the importance of maintaining judicial independence is reflected in other ways in the Act. One illustration is in the process of appointment of the Commissioner. The appointment is one made by the Governor-General on the recommendation of the House of Representatives[63] after the Attorney-General has consulted the Chief Justice about the proposed appointment and confirmed to the House this consultation has occurred.[64]
[61]Section 4(a).
[62]Section 4(c).
[63]Section 7(2).
[64]Section 7(3); see also Wilson, above n 42, at [40].
Secondly, the Act describes various parts of the Commissioner’s role in a way that indicates some evaluation by the Commissioner. For example, the Commissioner’s functions include recommending the appointment of a panel in “appropriate” cases.[65] Associated with that function is the requirement in s 15(1) to form an “opinion” as to which course should be followed. Further, s 15A(2) envisages a consideration of “all the circumstances” before concluding no action is warranted on a complaint. The circumstances there must include a consideration of factual matters and some exercise of judgment. None of these descriptions would be necessary if the fact or alleged seriousness of the complaints of themselves were sufficient to justify a recommendation to appoint a panel.
[65]Section 8(1)(c).
Thirdly, in the course of the preliminary examination, the Commissioner may seek the Judge’s response and in conducting that examination the Commissioner must act in accordance with the principles of natural justice.[66] Section 15(4) provides that the Commissioner may do a number of things for the purpose of a preliminary examination, namely:
(a)make any inquiries into the complaint that he or she thinks appropriate:
(b)obtain any court documents (including, for example, the transcript of a hearing) that are relevant to an inquiry under paragraph (a):
(c)consult the Head of Bench.
Again, none of this makes sense unless the Commissioner is to make some inquiry and reach some form of judgment. As counsel for the Commissioner states, if there is a proper evidential basis for a complaint, the Commissioner has to form a view as to the seriousness of the alleged conduct and whether it is sufficiently serious to warrant consideration of removal under s 18, insufficiently serious to warrant any inquiry under s 15A, or somewhere in between, in which case it would be referred to the Head of Bench under s 17.
[66]Sections 15(2) and 15(3).
Policy considerations support this approach. A filtering exercise of the sort we envisage is a means of providing some protection of judicial independence and in this way maintaining public confidence in the judiciary. Although the panel process does not lead inexorably to removal, the mere fact of the appointment of a panel is a serious matter for the Judge and a source of considerable pressure.[67]
[67]See Wilson, above n 42, at [49]; BV Harris “The Resignation of Wilson J: A Consequent Critique of the Operation of the Judicial Conduct Commissioner and Judicial Conduct Panel Act 2004” [2011] NZ L Rev 625 at 636; and McGrath, above n 58, at 146–147.
Finally, the legislative history also supports the view that the Commissioner’s functions encompass the exercise he undertook in this case. Prior to the introduction of the Act, a protocol was in place under which complaints were largely dealt with by Heads of Bench.[68] Where the complaint was serious, the protocol proceeded on the basis that the Attorney-General would establish a panel of three retired judges to consider the matter and make recommendations. The Attorney-General would consider the recommendations and then decide whether to place the matter before the House of Representatives. There was also provision for unsatisfied complainants to raise the matter with a Judicial Complaints Lay Observer who could ask the Chief Justice to review the matter or the Head of Bench to reconsider.
[68]Office of the Attorney-General and Office of the Chief Justice of New Zealand Judicial Complaints Process (2001); see also McGrath, above n 58, at 135–136; and Sir Geoffrey Palmer Judicial Administration Issues (Chen Palmer & Partners, 1 November 2002) at [114]. Two statutory provisions (which remain in force) were relevant: Constitution Act 1986, s 23; and District Courts Act 1947, s 7(1).
When the Labour Government came into office in 1999 it moved to implement a manifesto promise to introduce a coordinated approach to appointment and removal of judges. Sir Geoffrey Palmer was asked to provide advice on the topic. He recommended, amongst other things, statutory provision for the appointment of a retired judge as a Judicial Conduct Commissioner.[69] It was plain Sir Geoffrey envisaged that the Commissioner would undertake some screening of complaints to differentiate between serious and other complaints and that the Commissioner would be empowered to dismiss complaints “found to be frivolous or vexatious or that the Commissioner believes lack substance”.[70]
[69]Palmer, above n 68, at [118].
[70]At [120].
The legislation as introduced in substance, although differing in detail, reflected Sir Geoffrey’s proposed approach.[71] The explanatory note to the Bill that in part became the Act, for example, said:[72]
The Commissioner will be the first port of call for all complaints about Judges. The first task of the office will be to screen all complaints to identify those complaints that may give rise to consideration of removal of the Judge.
…
The Commissioner will dismiss complaints found to be frivolous or vexatious or that the Commissioner believes lack substance. Those remaining complaints that do not raise the question of removal of a Judge will be referred to the relevant Head of Bench.
The ability of the Commissioner to take no further action did not feature in the Act as originally passed.
[71]See discussion in McGrath, above n 58, at 136.
[72]Judicial Matters Bill 2003 (71-1) (explanatory note) at 3; see also the comments of the Associate Minister of Justice, the Hon Margaret Wilson, upon the Bill’s introduction: (2 September 2003) 611 NZPD 8300.
It is clear from the explanatory note that examinations of varying levels of depth were envisaged. Explaining the purpose of a preliminary examination, it said:[73]
In some cases, it will be readily apparent that the complaint must be dismissed and an extensive preliminary examination will not be necessary.
[73]At 11.
Legislation in comparable jurisdictions also involves a screening or filtering exercise being undertaken prior to the appointment of a panel or its equivalent.[74]
[74]Harris, above n 67, at 651 refers to the similar approaches in New South Wales (Judicial Officers Act 1986 (NSW), s 18); Canada (Canadian Judicial Council The Conduct of Judges and the Role of the Canadian Judicial Council < at 7; see also the equivalent panel procedure in the Judges Act RSC 1985 c J-1, ss 63 and 65); and in England and Wales (Judicial Discipline (Prescribed Procedures) Regulations 2006 (UK), regs 3 and 14). See also Rees v Crane [1994] 2 AC 173 (PC); Hearing on the Report of the Tribunal to the Governor of the Cayman Islands – Madam Justice Levers (Judge of the Grand Court of the Cayman Islands) [2010] UKPC 24; and Hearing on the Report of the Chief Justice of Gibraltar [2009] UKPC 43.
In this context, it was open for the Commissioner, in order to form the opinion required, to consider the Judge’s knowledge at the time disclosure would have been relevant. It follows there was also no bar to the Commissioner considering exculpatory matters. As Mr Taylor QC put it, matters going to the Judge’s knowledge were exculpatory but they were essential to establish that what occurred met the test in s 18(1).
We also consider the findings made were logical and rational. Why would Venning J have questioned what occurred given his limited role and the fact that the transaction was being handled by Ms Lowe, a partner in an independent firm of solicitors? Self-evidently, the Commissioner’s conclusion was available on the facts.
The need for inquiry?
The appellants say the position was altered by the submissions made on behalf of Dr Muir in 2006 and that the Judge was thereby put on inquiry.
In Saxmere, Blanchard J said that disclosure to the parties of a connection with a party, a witness or counsel was to be encouraged given the size of New Zealand and where “the limited number of … judges reinforces the general obligation for a judge to sit on all cases to which he or she has been assigned”.[75] Tipping J similarly encouraged disclosure “in any case where it is possible that the observer might reasonably think the judge could be biased as a consequence of it”.[76]
[75]Saxmere, above n 47, at [32].
[76]At [48]. In Ebner v Official Trustee in Bankruptcy [2000] HCA 63, (2000) 205 CLR 337 at [69], the High Court of Australia referred to the desirability, “[a]s a matter of prudence and professional practice”, of disclosing interests and associations if there is a serious possibility that they are potentially disqualifying. The Court went on to observe at [70] that “[i]t is, however, neither useful nor necessary to describe this practice in terms of rights and duties. At most, any ‘duty’ to disclose would be a duty of imperfect obligation. A failure to disclose is relevant (if at all) only because it may be said to cast some evidentiary light on the ultimate question of reasonable apprehension of bias. A failure to disclose has no other legal significance. In particular it does not, of itself, give a litigant any right to have the judge desist from further hearing the matter or to have the ultimate decision in the matter set aside for want of procedural fairness.” (Footnote omitted.)
That approach is reflected in the Guidelines for Judicial Conduct which provide:[77]
41.Adequate disclosure protects the integrity of the judicial process and is also a defence against later applications for disqualification. It does not constitute an acknowledgement that the circumstances give rise to a reasonable apprehension of bias. Disclosure of any matter which might give rise to objection should be undertaken even if the judge has formed the view that there is no basis for disqualification. There may be circumstances not known to the judge which may be raised by the parties consequentially upon such disclosure.
[77]Guidelines for Judicial Conduct (Ministry of Justice, March 2013) Courts of New Zealand <>
However, the thrust of the observations in Saxmere and the Guidelines is on ensuring parties have “enough information, shorn of unnecessary detail” to decide whether to make a recusal application.[78] The Guidelines reflect that and refer to the Judge ensuring parties have “sufficient information, without unnecessary detail”, to decide whether to make a recusal application.[79]
[78]Saxmere, above n 47, at [34] per Blanchard J.
[79]At [42].
There is an area of debate around the scope of inquiry that should be made and in particular as to how well a judge has to be informed of his or her own affairs. Sir Grant Hammond refers to an ethical obligation that “a judge should be sufficiently well informed about his or her affairs and associations” that matters can be disclosed to counsel and the parties as to matters “which might give rise to concern” concerning a case on which he or she is to sit.[80] Sir Grant notes this is a statutory obligation in the United States federal jurisdiction.[81]
[80]Grant Hammond Judicial Recusal: Principles, Process and Problems (Hart Publishing, Oxford, 2009) at 147; see Gerard McCoy “Judicial recusal in New Zealand” in HP Lee (ed) Judiciaries in Comparative Perspective (Cambridge University Press, Cambridge, 2011) 322 at 335; and Melissa A Perry Disqualification of Judges: Practice and Procedure: Discussion Paper (Australasian Institute of Judicial Administration, 2001) at [7.2]–[7.4].
[81]28 USC § 455.
We do not consider we need to resolve these broader questions. Given the Commissioner’s finding as to the state of the Judge’s knowledge at the relevant time there was no reason for any further inquiry to be made. Certainly, given what the Judge knew, any non‑disclosure cannot have been deliberate.
Further, an examination of Mr Judd’s 2006 submissions shows that the primary thrust of the challenge was based on alleged similarities between Tahakopa and the Trinity scheme. Accordingly, Mr Judd said that Tahakopa was not a “straightforward passive investment” and may raise the same sorts of income tax considerations as the Trinity scheme and, as a director, the Judge may have been involved in disputes with the Commissioner of Inland Revenue. The present concern as to possible stamp and gift duty liability was postulated as “some small suspicion”.
That the current concern was by no means in the forefront is apparent also from this Court’s recusal decision. In dismissing the appeal against Venning J’s refusal to recuse himself, the Court worked through each of the bases for the allegation of bias. The first of these was characterised as follows: “[t]he Judge’s investment must be very like Dr Muir’s and raise similar issues, and therefore the Judge should not be sitting on Dr Muir’s case”.[82] The second complaint arose from allegations the Judge must necessarily have been involved in a consideration of similar commercial issues which somehow might spill over into the case. Thirdly, there were allegations based on the association with Messrs Janett and Hedges who, it appears, had fallen out with Mr Bradbury and Dr Muir. The final head of concern related to the impact of the Judge’s criticism of Dr Muir.
[82]Recusal decision, above n 3, at [80].
Against this background, the Judge cannot now be criticised for not making further inquiry of the sort it is now said he should have undertaken either at the time the submissions were filed in 2006 or after this Court’s decision on the recusal application. The appellants have adopted a scatter-gun approach with shifting allegations and emphasis over time. At the points prior to the complaint to the Commissioner, the central allegations were directed towards the Judge’s ability to sit on the Trinity case. The Judge had to do the best he could in response. In our view, in this situation the Judge cannot be expected to go over a lengthy complaint with a microscope in the hope of finding some grain of relevance. Further, even in 2006, the Judge was looking back on events of some 14 years previously. That gap in time has some relevance to the extent of any inquiry he could later be expected to make, given the absence of any indication tax liability may be in issue. Finally, to the best of the Judge’s knowledge there was nothing for the Judge to correct in terms of this Court’s judgment on recusal.
For these reasons, we consider Goddard J was right to dismiss the application for judicial review on its merits. We turn then to discuss abuse of process.
Abuse of process
We consider the decision of Goddard J to dismiss the application for review as an abuse of process was the proper exercise of the inherent jurisdiction.
In Lai v Chamberlains, the Supreme Court referred to the “broad inherent procedural power to strike proceedings out as an abuse of process”.[83] In the course of explaining the jurisdiction, Elias CJ, Gault and Keith JJ described the power as an “independent duty of the Court to prevent abuse”.[84]
[83]Lai v Chamberlains [2006] NZSC 70, [2007] 2 NZLR 7 at [59].
[84]At [63].
The notion of the Court’s independent duty is apparent in this Court’s earlier decision in New Zealand Social Credit Political League Inc v O’Brien.[85] It involved an application to strike out, of which, in the High Court, “proper notice had not been given”.[86] This Court on appeal heard argument on the point and, as Cooke J found, in those circumstances “it would not be right to refuse to allow the League to rely on it”.[87]
[85]New Zealand Social Credit Political League Inc v O’Brien [1984] 1 NZLR 84 (CA).
[86]At 89.
[87]At 89.
Cooke J cited the inherent jurisdiction as an alternative or overarching reason to consider strike-out even when an application was not properly before the court. He said:[88]
Moreover the inherent jurisdiction to strike out a statement of claim as an abuse of process is one which the Court may come under a duty to exercise. It is more than a matter of discretion.
Cooke J noted that the Court was prepared to hear “argument extending beyond the scope of the abuse of process ground as formulated” and stated that:[89]
… this Court would be failing in its responsibility if we did not approach the issue of abuse of process in a broad way.
[88]At 89 (citations omitted; emphasis added).
[89]At 89.
To the same effect, Somers J, following citation of a useful collection of authorities, said:[90]
It is not in my view material that the League and Mr Riddoch have not pleaded abuse of process save in a limited way. The Court in this field is concerned with proceedings which are ex facie lawful, that is to say are within the rules about procedure. But to prevent those rules being used oppressively the Court will intervene proprio motu if necessary. It recognises that the literal application of the law itself can be a tyranny.
The Latin term “proprio motu” means on his or her own impulse or accord.[91]
[90]At 95.
[91]Peter Spiller Butterworths New Zealand Law Dictionary (7th ed, LexisNexis, Wellington, 2011) at 195.
Casey J also considered that the case was one of those rare ones “when the Court is under an obligation to step in”.[92]
[92]At 100.
There may be issues in a particular case as to whether the inherent jurisdiction has been overridden or cut back in some way by a statutory instrument. But that is not an issue in this case. Indeed, the Judge’s approach is consistent with that of this Court in Siemer v Stiassny.[93] There, this Court approved decisions of Cooper J in the High Court to strike out applications on his own motion, in spite of a submission that the requirement in r 7.43(3) of the High Court Rules that the parties must be heard had not been observed.[94] The Court noted that Cooper J’s orders were final, not interlocutory, and second that “in any event, the High Court has an inherent jurisdiction to prevent an abuse of its process”.[95]
[93]Siemer v Stiassny [2011] NZCA 466.
[94]A failure to observe this requirement resulted in a strike-out being set aside in Deliu v Hong HC Auckland CIV-2010-404-6349, 21 December 2011.
[95]At [6] (footnote omitted).
A similar approach has been adopted in the United Kingdom.[96]
[96]Henderson v Henderson (1843) 3 Hare 100, 67 ER 313 (Ch); Hunter v Chief Constable of the West Midlands Police [1982] AC 529 (HL) at 536 per Lord Diplock; Jameel (Yousef) v Dow Jones & Co Inc [2005] EWCA Civ 75, [2005] QB 946 at [54]–[55]; and see Johnson v Gore Wood & Co (a firm) [2002] 2 AC 1 (HL) at 22 where the House of Lords continued to apply the jurisdiction notwithstanding the re-enactment of the courts’ ability to strike out proceedings on their own initiative in the Civil Procedure Rules 1998 (UK).
We do not see the fact that the Commissioner, by a fine margin, decided the complaint was not frivolous or vexatious is determinative. Having brought the judicial review proceeding the appellants’ own conduct in and about their complaint to the Commissioner was properly open to scrutiny. There is no reason why the Court should allow the abuse of its processes to go unremarked. The only issue is whether there was any failure to follow proper process or prejudice to the appellants by the late raising of the issue. We are satisfied there was none. Whether the proceeding was an abuse of process was addressed in submissions.
Finally, for the reasons given by Goddard J, we agree the proceeding was an abuse of process. The point is neatly captured by Mr Bradbury’s response to Mr Judd’s question to him on 2 December 2012. Mr Judd asked Mr Bradbury what answer he should give if asked whether there was an intention to have Accent 2004 set aside for apparent bias. Mr Bradbury replied: “Your answer would be yes.” This proceeding is part of an extended course of conduct directed at reopening the earlier litigation. This conduct is unfair and oppressive to the Judge. This is not consistent with the purpose of the complaints process.
Costs in the High Court
If the appeal is dismissed, the appellants seek a revision of the costs award in the High Court. The appellants say band C is excessive for three of the items in the schedule.
First, it is said that costs for item 2 (commencement of defence) and item 33 (preparation for hearing) are excessive as they represent a doubling up. The submission is that these items should be dealt with on the basis of band C for one item and band B for the other. Secondly, it is submitted that four days is excessive for item 32 (the preparation of the list of issues, authorities and common bundle).
Goddard J dealt with these matters in her subsequent decision on costs.[97] Her Honour said that band C was appropriate for these three steps and that six days was required for item 2. That was because the statement of claim and the amended statement of claim were “dense and lengthy documents” each more than 50 pages.[98] In addition, the Judge considered the “wide range of attacks” coupled with the way the case was “framed” justified band C.[99]
[97]Costs decision, above n 46.
[98]At [14].
[99]At [14].
In the absence of the identification of any error of principle in the Judge’s approach it is not appropriate for us to intervene.[100] In any event, as counsel for the Commissioner submits, given the Judge’s involvement with a fairly extensive and complex case which ran for four days, the Judge was well placed to make the assessment she did. Goddard J turned her mind to the matter and her decision was a reasoned one.
Costs in this Court
[100]Shirley v Wairarapa District Health Board [2006] NZSC 63, [2006] 3 NZLR 523 at [15].
The first respondent seeks costs on an indemnity basis. We consider that an award on that basis is appropriate and should apply also to counsel for the Judge. Notwithstanding the High Court Judge having concluded the proceeding was an abuse of process, the appellants have persisted. As this Court said very recently in Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue (No 2), this case is one of a number that are “repetitious in nature and have reached the point where they are improperly brought”.[101]
Result
[101]Ben Nevis (No 2), above n 6, at [58].
The appeal is dismissed.
The costs award made in the High Court stands.
The appellants must pay the first respondent and counsel for Venning J indemnity costs (their actual costs incurred in relation to the appeal) and usual disbursements. We certify for second counsel for the first respondent.
Solicitors:
Wynyard Wood, Auckland for Appellants
Gault Mitchell Law, Wellington for First Respondent
Bell Gully, Wellington for Justice VenningAPPENDIX 1
1. Accent Management Ltd v Commissioner of Inland Revenue (2010) 24 NZTC 24,126 (HC) Unsuccessful application by some of the Trinity investors including the present appellants for judicial review on the basis on which the Commissioner of Inland Revenue decided to assess them for tax in relation to the Trinity investments. Keane J dismissed this proceeding as an abuse of process. 2. Redcliffe Forestry Venture Ltd v Commissioner of Inland Revenue [2011] 1 NZLR 336 (HC) Application to have Accent 2004 set aside on the basis that the Commissioner of Inland Review had obtained the decision in his favour by fraud. After an unsuccessful attempt to review the assignment of this case to Venning J, Redcliffe Forestry Venture Ltd v Commissioner of Inland Revenue (2009) 24 NZTC 23,991 (HC), the application was heard by Venning J who struck it out. 3. Redcliffe Forestry Venture Ltd v Commissioner of Inland Revenue [2012] NZCA 638, [2012] 2 NZLR 823 Successful appeal to this Court from decision of Venning J in Redcliffe [2011] 1 NZLR 336 (HC). 4. Commissioner of Inland Revenue vRedcliffe Forestry Venture Ltd [2012] NZSC 94, [2013] 1 NZLR 804 Venning J’s decision in Redcliffe [2011] 1 NZLR 336 (HC) was restored by the Supreme Court. 5. Accent Management Ltd v Attorney-General [2013] NZHC 1447, (2013) 26 NZTC ¶21-020 Application to have Accent 2004 set aside and declared to be in excess of the Court’s jurisdiction. Priestley J dismissed the proceeding as a collateral attack on two Supreme Court judgments and on the grounds that the High Court had no jurisdiction to obtain the relief sought. 6. Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue [2013] NZHC 2361, (2013) 26 NZTC ¶21-032 Application for orders setting aside Accent 2004 and reopening the original challenge proceedings on the grounds of presumptive bias on the part of Venning J. The application alleged that when the Judge delivered the 2004 judgment, he was liable to the Commissioner of Inland Revenue in respect of certain duties arising out of his own investment in Tahakopa. The applicant argued that Venning J was, as a result, “beholden” to the Commissioner of Inland Revenue. Katz J held that the High Court no longer had jurisdiction to reopen the proceedings. 7. Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue (No 2) [2014] NZCA 350, (2014) 26 NZTC ¶21-086 Unsuccessful appeal from decision of Katz J. 8. Accent Management Ltd v Attorney-General [2014] NZCA 351, (2014) 26 NZTC ¶21-087 Unsuccessful appeal from decision of Priestley J. 9. Accent Management Ltd v Commissioner of Inland Revenue [2013] NZHC 3197, (2013) 26 NZTC ¶21‑050; Bristol Forestry Venture Ltd v Commissioner of Inland Revenue [2013] NZHC 2819, (2013) 26 NZTC ¶21-042; Redcliffe Forestry Venture Ltd v Commissioner of Inland Revenue [2013] NZHC 2818, (2013) 26 NZTC ¶21‑041 There has also been an application to have the statutory demands issued by the Commissioner of Inland Revenue in relation to the tax assessments upheld in Accent 2004 set aside. 10. Accent Management Ltd v Commissioner of Inland Revenue [2013] NZCA 155, [2013] 3 NZLR 374 Unsuccessful application for orders that the Crown Law Office and Crown counsel be debarred from acting for the Commissioner of Inland Revenue in a number of proceedings to which the taxpayers and the Commissioner of Inland Revenue are parties. The application was made on the basis that the Crown Law Office would not be able to act with the degree of independence required of lawyers and that counsel from that Office would not be able to comply with their duties to the court. 11. Commissioner of Inland Revenue v Muir [2013] NZHC 2881, (2013) 26 NZTC ¶21-044 Counsel for the Commissioner notes that other attempts to overturn Accent 2004 appear to be on foot. In Commissioner of Inland Revenue v Muir the Commissioner of Inland Revenue successfully applied for 66 proceedings brought by 11 challengers in the Taxation Review Authority to be transferred to the High Court and consolidated with: each other; two other proceedings transferred to the High Court in 2002; and the Muir appeals against the Taxation Review Authority’s decision striking out Dr Muir’s Trinity challenge and refusing to recall the strike-out decision. APPENDIX 2
Schedule 1
Overview of process for Judicial Conduct Commissioner and Judicial Conduct Panel
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