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Precision Fabrications Pty Ltd v. Roadcon Pty Ltd Supreme Court of the Northern Territory
Mildren J

2 and 4 July 1991 at Darwin

COURTS AND JUDGES - bias - trial judge appeared as counsel against Roadcon Pty Ltd in previous proceedings - possible bias as trial judge - application dismissed.

r	Cases applied:
Fingleton v. Christian Ivanoff Pty Ltd (1976) 11 SASR 530

Livesley v. The NSW Bar Association {1983) 151 CLR 288

Lyle v. Christian Ivanoff Pty Ltd {1977) 16 SASR 476

R. v. Cavit and Anor; ex parte Rosenfield {1984-5) 33 NTR 29

R. v. Moss {1982) 29 SASR 385

Raybos Australia Pty Ltd v. Tectran Corporation Pty Ltd {1986)
6 NSWLR 272

Re Renaud; ex parte CJL {1986) 60 ALJR 528

Thelluson v. Lord Rendlesham {1858-9) 7 HLC 429; 11 ER 172

Counsel for the Applicant Defendant: Solicitor for the Applicant Defendant:

Counsel for the Respondent Plaintiff: Solicitor for the Respondent Plaintiff:

J. McCormack Ward Keller
Waters  David Francis &
Associates

IN THE SUPREME COURT
OF THE NORTHERN TERRITORY OF AUSTRALIA
AT DARWIN

No. 578 of 1988
(8817096)

BETWEEN:
PRECISION FABRICATION PTY LTD
Plaintiff

AND:
ROADCON PTY LTD
Defendant

CORAM:	MILDREN J

REASONS FOR JUDGMENT
(Delivered 4 July 1991)

This is an application by the Defendant that I should disqualify myself from sitting as the trial judge of this action, the hearing of which is scheduled to commence before
me on Monday 8 July 1991.
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The application was heard on 2 July 1991. At the end of hearing submissions from counsel for the parties, I refused the application, and I indicated that I would publish my reasons as soon as possible. I also made the following orders:
that the costs of the application be in the cause (2) that the time within which to appeal be extended until these reasons have been delivered (3) certified fit for counsel.

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The		basis   of   the  application was that	in 1987  I	had	appeared as	counsel		for			City	Building		Contractors		{Hiring)	Pty.	Ltd. the			appellant	before			the	Court	of		Appeal		in	proceedings		in which	the	defendant		Roadcon	Pty.	Ltd.	was respondent,		and that,			because		the	issues		which were argued and decided in those proceedings involved  the  same  contract  for  the  sale  of the same land as  is  involved  in  these  proceedings,  the  parties or the public might entertain a reasonable apprehension that I might not bring an impartial or unprejudiced  mind  to  the resolution of the question in issue before me: see Livesley v.
The New South Wales Bar Association	(1983)	151    C.L.R.	288   at
293-4. In order to understand  the  argument  put  by  Mr  McCormack, counsel  for  the  defendant,  it  is  necessary   to briefly canvass the issues in both the  proceedings  before  the  Court of Appeal and in the present proceedings.

The City Building Contractors (Hiring) Pty Ltd v. Roadcon Pty Ltd case.   {Action  No.  278/87;   on  appeal,   AP  11	of	1987).
In	that	case,	City	Building	Contractors	{Hiring)	Pty.	Ltd.
{"CBC"}	sought an interlocutory injunction restraining Roadcon Pty.		Ltd.		("Roadcon")		from	selling   certain		land		at	Berrimah. CBC	was		the		registered		proprietor	of  the	land,		which		it	had mortgaged			to		Roadcon	in		May  1983  to	secure		a  loan  to		CBC		of some			$27,500			approximately.		Following	certain	correspondence from  Roadcon's  solicitor  to CBC,   Roadcon determined to	realise its	security  and instructed  a  firm  of  estate  agents  to   sell the land by auction. The  auction  did  not  achieve  a  sale; however negotiations were then commenced between Roadcon and

Precision Fabrications Pty. Ltd., the plaintiff in the present proceedings, whereby a contract was allegedly executed on 3 March 1987 between Roadcon and the plaintiff for the sale of the land to the plaintiff for $87,200. On 9 April 1987, CBC lodged a caveat forbidding registration of the contract of sale and claiming to be entitled to the land in priority to Roadcon. On 7 May 1987, CBC issued a Writ and statement of Claim seeking a declaration that the exercise of the power of sale by Roadcon was invalid, an order that the sale be set aside and various other relief. CBC also applied for the interlocutory injunction pending the resolution of the action. The hearing of the application for the interlocutory injunction came before Asche, J. (as he then was) on 10 and 11 June 1987. I did not appear in that matter at all, (although I do recall that I later did appear before Asche, J. to obtain an interim injunction pending the hearing of the appeal). His Honour refused the application and ordered that the caveat be removed: see reasons published 15 June 1987. (This brief synopsis of the main facts is taken from His Honour's judgment).

From that decision, CBC appealed to the Full Court, and I appeared as counsel for CBC on both the application for leave to appeal and on the hearing of the appeal. The main grounds of appeal, (as appears from my written outline of argument) were as follows:-
His Honour had found that there was a serious issued to	be	tired	as to	whether	Roadcon	exercised	its

power	of	sale	in good	faith,	but found	that	the

balance	of	convenience	favoured submitted that this was in error.

Roadcon.	It	was

His Honour had found that no valid notice as required by s.132 of the Real Property Act had been given, but that CBC had waived the necessity for such a notice or had acquiesced in the sale to the plaintiff without a valid notice. It was submitted that there was no evidence of waiver or acquiescence.

No findings of primary fact were disputed at the appeal. The Court of Appeal (consisting of Nader, Kearney and Rice, JJ.) unanimously		allowed		the		appeal.			Nader	and	Kearney,	JJ.		in their joint judgment, found that there was no evidence before Asche, J. upon which he could find that CBC had acquiesced or waived its rights, that no valid notice pursuant to s.132 of the	Real		Property			Act		had	been	given,		and	that	the interlocutory		injuncti·on		should		have been granted.		Rice, J. also held that no valid notice was given pursuant to s.132 of the  Real	Property	Act,	and that the balance		of convenience favoured CBC as it was through no error on its part that the purported power of sale was wrongly exercised.

The issues in the present action.
In this action, the plaintiff claims damages against Roadcon for breach of the contract of sale of the land dated 3 March

1987 on the basis that (1) Roadcon did not have title to the property or the means of compulsorily acquiring a title to the property; alternatively (2) Roadcon wrongfully neglected and refused to complete the contract, and expressed to the plaintiff its unwillingness inability and refusal to complete and that this amounted to a repudiation of the contract which the plaintiff accepted. Roadcon, by its Amended Defence, does not admit the existence of the contract for the sale of the land; denies that it did not have title to the property,  or the means of compulsorily acquiring a title to the property; denies that it wrongfully neglected or refused to complete the contract or repudiated the contract; pleads that if there was an enforceable agreement it was frustrated by the Order of the Court of Appeal; and alternatively says that if it did not  have the title or the means of acquiring title, the plaintiff suffered no loss or alternatively is limited in the damages claimable by the rule in Bain v. Fothergill [1874] L.R. 7 H.L.
158. Further, in paragraph 6 of the Defence, Roadcon pleads:

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!		"If as is alleged by the Plaintiff in paragraph 5 of the Statement of Claim the Defendant did not have, at the material times, title to the said property  (which is denied), the Defendant says that such lack of title was not caused  or contributed to by:
{a)	the Defendant;
any representations (fraudulent or otherwise) by the Defendant;
any act of a fraudulent nature on the part of the Defendant;
any wilful act or conduct of the Defendant;
any negligence of the Defendant and/or any breach of duty by the Defendant either as alleged in paragraph 6 of the Statement of Claim

or at all."

The alleged perception of bias.
Mr McCormack, counsel for Roadcon, submitted that there was a reasonable apprehension of bias for the following reasons:
as	counsel	for	CBC,	I	had	called	into	question Roadcon's bona fides;

as counsel for CBC, I had successfully persuaded the Court of Appeal to grant an interlocutory injunction
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restraining the alleged sale which gave the plaintiff the opportunity to bring these proceedings;

that one issue I would be called upon to determine in these proceedings was Roadcon's right to sell the land to the plaintiff and I had argued on behalf of CBC against Roadcon that it had no such right;

no-one was to know what instructions I may have been given concerning Roadcon's integrity, honesty or bona fides, and what view I may have formed of those matters.

Before dealing with those submissions, I should say that I have very little recollection of the CBC v. Roadcon matter which I argued nearly four years ago. I am not, in fact, biased against Roadcon, and I believe that I can bring an

impartial and unprejudiced mind to the resolution of these issues. Mr McCormack, to be fair, did not submit otherwise, but as I have said before, based his application on the appearance of bias.

The attitude of the Plaintiff.
Mr Waters, who appeared for the plaintiff, opposed the application, after I indicated to the parties that if I were to accede to Mr McCormack's submission the trial of this action would have to be postponed possibly until next year, as there was no other judge of this Court available to hear it next week. Mr Waters submitted that the plaintiff would be prejudiced by the costs thrown away by the adjournment, and by the delay in obtaining a further hearing date. He further submitted that the decision of the Full Court prejudiced the
rights of both parties, not merely those of Roadcon, and that as my brief in the CBC v. Roadcon matter  was  limited  to arguing an appeal, I did not in fact call into question the bona fides of Roadcon when it entered into the alleged contract of sale. He further submitted that when the relevant facts as to my involvement in the matter were examined, no reasonable observer could entertain an apprehension that I might be biased.

The legal principles involved.
The relevant legal principles to be applied in a case such as this are:-
A	judge	should	not	sit	to	hear	a	case	if	in	all

circumstances the parties or the public might entertain a reasonable apprehension that he might not bring an impartial and unprejudiced mind to the resolution of the question involved in it: Livesley v. The New South Wales Bar Association (1983) 151 C.L.R. 288 at 293-4.

A judge should not sit if he considers that there is any real possibility this his participation in the case might lead to a reasonable apprehension of pre-judgment or bias: Livesley, supra, at p.294.

However, it would be an abdication of judicial function for a judge to automatically disqualify himself whenever he was requested to do so by one party on the grounds of apparent bias, regardless of the wishes of the other party to the suit: Livesley, supra, at p.294; Raybos Australia Pty Ltd v. Tectran Corporation Pty Ltd (1986) 6 NSWLR 272.

Commonly the types of cases which arise where there is an apprehension of bias, are cases where the judge has an interest in the result, or where the judge has indicated to the parties that he has already made up his mind on some issue in the case without giving the affected party a proper opportunity to submit his case, or where the judge is a friend or relative of one of the parties or of a material witness or where the judge occupies some other position in the case which is incompatible with his

judicial function. A recent example of the last type of situation was considered by this Court in R. v. Cavit and Another; ex parte Rosenfield (1984-5) 33 N.T.R. 29, where a Crown Prosecutor who was appointed an Acting Magistrate was held to be disbarred from hearing the summary prosecution of an accused person because of his position as a prosecutor. But these are all but instances of the general rule referred to in Livesley, supra. Bias does not come in closed categories: Fingleton v. Christian Ivanoff Pty Ltd (1976) 11 S.A.S.R. 530 at 549.

In determining whether a fair-minded person would entertain a reasonable apprehension of bias, that person is expected to know the objective facts and the legal history of the matter, but not to have any individual knowledge of the judge concerned: Fingleton v. Christian Ivanoff Pty Ltd, supra, at 533, per Bray, CJ; R. V. Cavit, supra, at p.34.

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It is common practice for a judge to disqualify himself where a former client of his, whilst at the bar, becomes a litigant in a matter to come before him: Lyle v. Christian Ivanoff Pty Ltd (1977) 16 S.A.S.R. 476 at 484, per Bright, J. Likewise, a judge should not, in my opinion, hear a matter if he had previously been briefed as counsel in that matter: Thelluson v. Lord Rendlesham
{1858-9)	7	H.L.C.	429;	11	E.R,	172;	where	Lord
Chelsmford,	L.c.	disqualified	himself	from	taking	part

(although not from sitting) in the House of Lords on an appeal in which he had previously been briefed as counsel. However, merely being involved as counsel in

peripheral disqualify

litigation	may	not himself:	Thelluson,

require	a supra,	where

judge Lord

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st.

Leonards who had previously been briefed as counsel 'in various branches of this cause on different occasions 1 did not disqualify himself, although, as Wells, J. observed in R. v. Moss (1982) 29 S.A.S.R. 385 at 428, "the standards of reason and right conduct in public affairs have undergone a substantial - sometimes even a dramatic metamorphosis" since then. There does not appear to be any rule of practice that a judge who has previously appeared as counsel against a party who has become a litigant in a matter to come before him should disqualify himself merely on that account.

Conclusions.
As to the first of Mr McCormack's submission, it has not been
r	demonstrated	to me that I called	Roadcon's	bona fides into question. It is true that my Outline of Argument refers to CBC
challenging the sale on the basis that it was not bona fide, but in context, it is clear to me that all I did was recite to the Court of Appeal one of the grounds for the original application before Asche, J. I do not believe that I developed any argument in support of this claim. It was not necessary for me to do so. Asche, J. had already found that there was a serious  issue to be tried as to whether  or not Roadcon had

exercised its power of sale in good faith: see His Honour's reasons, at pps 20-22. The question which it is apparent to me from reading the Outline of Argument and the Full Court's reasons which I raised was whether, in the light of that finding, Asche, J. was correct in refusing the interlocutory injunction on the grounds of the balance of convenience. I therefore reject the suggestion that Roadcon or a member of the public might entertain a reasonable apprehension of bias on that ground.

As to the second submission, it is true that a reasonable observer might conclude that, as a result of my submissions, an interlocutory injunction was granted against Roadcon which in one sense made these present proceedings possible. However, the plaintiff  was not a party  to the CBC  v.  Roadcon  action, and the possibility of the present proceedings was the result of the Full Court's decision, not because of my advocacy. If, as a result of the Court of Appeal's decision, the contract, if one existed, was frustrated, either by the decision itself, or by the opportunity which the decision created for CBC to redeem the mortgage (if that is what happened), those

consequences		have		no	bearing	on	my ability,	to	now	properly	adjudicate

ability,		or	perceived on	the	rights	of	the

parties to this action. I was never briefed in the present litigation, nor was I at any time involved in any issue as between Roadcon and the plaintiff. The matters in which I was involved concerned only issues as between Roadcon and CBC, and whether there was any evidence before Asche, J. warranting the

inferences His Honour drew as to waiver and acquiescence.	I accordingly reject the submission that Roadcon or a member of the public would entertain	a reasonable apprehension	that I might not be able to determine	the issues flowing from the consequences of the Court of Appeal's decision with fairness or impartiality. In my opinion, I am in no worse position than a member of the Full Court would be if he were called upon to try this cause, and I fail to see why any member of the Full Court	would	be	disqualified:	see	Re	Renaud:	ex	parte	CJL (1986} 60 A.L.J.R. 528 at 531-2, per Mason, J.

With respect to the third submission, in my opinion there is  no substance to this argument for the same reasons as I have given in relation to the second submission. Furthermore, I did not argue that Roadcon had no right to sell the land to the plaintiff. That finding had already been made by Asche, J. If it is still open to Roadcon in these proceedings to argue otherwise (about which I express no opinion) I see no reason why a reasonable observer should apprehend that I might not bring an unprejudiced mind to the resolution of that question.

As to Mr McCormack's final submission, firstly, I should say that I cannot recall forming any views about Roadcon's integrity, honesty or bona fides, and I think it unlikely in the extreme that I might have formed some view of those matters. The only evidence touching on those matters of which  I am aware is that referred to in the judgment of Asche, J. at pps 20-21 of his judgment. That being the only material of

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which	I	am		aware	touching	this	issue,			I		am		in	no	different position		from		any	other		judge		who		has			read		Asche,	J's decision,			and I		would	expect	that		it	is	common	practice	for all	judges		of	this Court to read the judgments  of  the  other judges. As to what I might have been told by an instructing solicitor,  there  is,  firstly,  no evidence  that  I   was told anything other that  what  was  in  the  Appeal  Book,  and  it  is unlikely in the extreme that any instructions would  have  been given to me other  than what  was  contained  in  the  Appeal  Book. As I have not seen the Appeal Book  since  1987,  I  cannot  be certain that there was  not  some  other  material  not specifically  referred  to  by Asche,  J.  or  by   the   Full  Court. But, be that  as  it  may,  whatever  was  in  the  Appeal  Book  was also available to the Full Court, and for the reasons already given, I do not  consider  myself  to  be  in  any  worse  position  than any member of that Court would be if called upon to try

this	action.	In my	opinion, does		not	establish		that

this	ground	is	speculative,	and an	observer		would	entertain		a

reasonable apprehension of bias.

For these reasons, the application is dismissed.