FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Samton Holdings Pty Ltd

[2000] FCA 1201

COURTS AND JUDGES – apprehended or perceived bias – association between judge and party – disclosure by judge – disqualification – test to be applied to determine – fair-minded observer – knowledge to be imputed to fair-minded observer.

Re JRL; Ex parte CJL (1986) 161 CLR 342 applied

R v Lilydale Magistrates Court [1973] VR 122 referred to

Aussie Airlines Pty Ltd v Australian Airlines Pty Ltd (1996) 65 FCR 215 applied

Webb v The Queen (1994) 181 CLR 41 referred to

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v SAMTON HOLDINGS PTY LTD

WG 20 of 1999

CARR J

9 AUGUST 2000

PERTH

THE COURT ORDERS THAT:

1.         The motion be dismissed.

2.         Costs of the motion be costs in the cause.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

introduction

1                     This is a motion, (brought orally in the context of a directions hearing today) by the first to seventh respondents (inclusive) that I should disqualify myself from hearing the principal application.  The principal application is listed for hearing for five days commencing on 13 November 2000.

2                     In the principal application the applicant seeks a declaration that the first respondent has engaged in unconscionable conduct contrary to s 51AA of the Trade Practices Act 1974 (Cth) (“the Act”).  It also seeks a declaration that the second to seventh respondents were directly or indirectly knowingly concerned in or party to the conduct of the first respondent which is said to be unconscionable.  These individual respondents were either the lessors of the property with which this case is concerned or directors of the first respondent or both.  The applicant further seeks a declaration that the eighth respondent, who is a solicitor, was directly or indirectly knowingly concerned in or party to the conduct of the first respondent that it alleges was unconscionable.  In summary, this conduct is said to have been in connection with the lease of the premises and an assignment of that lease.  The applicant seeks against all respondents an injunction, compensation to be paid under s 87(1A) of the Act, publication at their expense of a public notice, findings of fact and the undertaking of compliance programmes.  I do not think that for the purpose of this motion it is necessary to go into more detail other than to say that the proceedings are defended by all respondents.  As I have mentioned, the motion is made on behalf of the first to seventh respondents inclusive.  The eighth respondent does not join in the motion and has not made any submissions in relation to the motion.  The first and second cross-respondents have taken the same course.  The applicant, in essence submits that how I dispose of the motion is “essentially a matter for me”, but has, in both written and oral submissions, contended that the grounds for the motion have not been made out.

factual background

3                     The motion arises out of my long-standing professional interest in the area of Trade Practices law.  This has included my attendance at at least half a dozen Trade Practices Workshops since 1977 conducted by the Business Law Section of the Law Council of Australia in various parts of Australia.  The workshops are held annually.  On most of those occasions I was accompanied by my wife.  The attendance at the Workshops has traditionally been by invitation from the Organising Committee.  The number of delegates invited has been restricted deliberately (although the composition of the group varies) and is currently between 80 and 100.  There is a strong emphasis on full participation by the delegates in either presenting or commenting on papers, chairing sessions and engaging in debate.

4                     On 28 June 2000 I caused my associate to send a letter to the solicitors for the applicants and all respondents.  That letter, omitting formal parts, read as follows:

“Carr J has asked me to write to the solicitors for the parties in this matter to inform them of circumstances which he considers it appropriate to be made known.

For some considerable number of years (stretching well back before his appointment to the Bench) his Honour has, from time to time, attended the annual Trade Practices Workshop conducted under the auspices of the Law Council of Australia.  Usually Mrs Carr has accompanied him.

At the 1993 Trade Practices Workshop, Mrs Carr met Mrs Fels, wife of the Chairman of the then Trade Practices Commission.  Mrs Carr had known Professor Fels (as he now is) since her undergraduate days at the University of Western Australia.  Over the years Mrs Fels and Mrs Carr have become friends, usually meeting at Trade Practices Workshops in various parts of Australia and occasionally on social occasions in Melbourne.

Last month, at the telephonic invitation of Mrs Fels to Mrs Carr, Carr J and Mrs Carr had lunch at the Fels’ home in Melbourne.  Apart from members of the Fels’ family, the only other persons present were Mr & Mrs R A St John, mutual friends.  Carr J has known Mr St John since they were at the University of Melbourne Law School.  Until this lunch, to the best of Carr J’s recollection, his only social contact with Professor Fels has been at the Trade Practices Workshop.

At no stage during the lunch was this or any other litigation in Carr J’s docket discussed, although his Honour told Mrs Fels that he proposed to inform the parties to any litigation involving the Commission before him that he had attended the lunch last month.

Carr J is also scheduled to attend the Trade Practices Workshop at Coolum in Queensland in August 2000.  He proposes, in view of the fact that this case is in his docket, to keep any contact with Professor Fels or any other representatives of the Commission to a reasonable minimum, given the fact that the hearing of this application will by then be about three months later.

His Honour has asked me to let you know that he considers that nothing arising out of the above circumstances will in any way affect his ability to bring a completely unbiased approach to the hearing and determination of the above application.  However, he thinks that it is appropriate that the parties should be made aware of them.”

5                     In response to that letter the solicitors for the first to seventh respondents wrote to my associate stating:

“On the basis of the matters in your letter my clients are of the view that it would be inappropriate for His Honour to continue to deal with these proceedings.”

6                     I then caused arrangements to be made so that those respondents could move orally for an order of disqualification.  The terms of that oral motion are for an order “that the Honourable Justice Carr disqualify himself from sitting as the presiding Judge at the trial of this application”.

Submissions on behalf of the first to SEVENTH respondents and my reasoning

7                     As a matter of convenience, I shall henceforth refer to the first to seventh respondents as “the respondents”.  From the respondents’ submissions it is clear that they contend that I should disqualify myself, not due to actual bias, but due to apprehended or perceived bias.  The respondents say that my confidence in my ability to decide the case without bias is “not relevant”.  In summary their arguments are as follows:

·          Professor Fels is the public face of the applicant, is very visible in the media and seems actively to seek out opportunities to be seen and heard. (These I stress are the respondents’ arguments);

·          this application is, so the respondents submit, a “test case” on s 51AA of the Act, being only the second such case brought by the applicant; 

·          next the respondents say, in paragraph 6 of their written submissions, that Professor Fels may be embarrassed if certain matters emerge in evidence at the trial relating to the conduct of some of the cross-respondents on whose behalf the applicant brings that part of the application which is concerned with compensation for the first and second cross-respondents;

·          if the application is dismissed Professor Fels “… should be criticised for his use of the media to attack the respondents unfairly and for the manner in which he has seen fit to squander public resources”;

·          the Parliament may question how the applicant could select this case to be “… the beneficiary of public monies when Legal Aid is unfunded to the extent that parents are unrepresented in custody contests in the Family Court”;

·          in those circumstances the respondents submit that a reasonable observer “without an unnecessarily conspiratorial mind” would “accept that (my) assessment may be affected by what is described as my wife’s long-standing friendship with Professor Fels, her friendship with Mrs Fels and the probability that my wife and I will again meet Professor and Mrs Fels at the next Trade Practices Workshop.

8                     The respondents, in their written submissions rely upon what was said by Mason J in Re JRL; Ex parte CJL (1986) 161 CLR 342 at 350-352.  Much ofthat citation is of little assistance to me in deciding this motion.  That is because that case involved a private communication seeking to influence the outcome of the custody proceedings in that matter.  The citation from R v Lilydale Magistrates Court [1973] VR 122 at 127 provides some useful guidance, but the facts of that case were also very different from the facts of this case.  The most presently useful passage is the recitation of the well-known principle to be applied, namely:

“… a judge should disqualify himself from hearing, or continuing to hear, the matter if the parties or the public entertain a reasonable apprehension that he might not bring an impartial and unprejudiced mind to the resolution of the issues (R v Watson; Ex parte Armstrong (1976) 136 CLR 248 at 258-63; Livesey v New South Wales Bar Association (1983) 151 CLR 288 at 293-4).”

9                     The respondents submit that the disclosure made in my letter of 28 June 2000 “… creates an unhealthy and unhelpful climate that will be easily resolved by appointment of another judge.”  In their submissions they refer to the first sentence of the fifth paragraph of the letter dated 28 June 2000 which reads “At no stage during the lunch was this or any other litigation on Carr J’s docket discussed …” and (again in their written submissions) the respondents ask, presumably rhetorically:

“Are these words carefully chosen?  If so, they would not exclude the possibility that the proper ambit of Section 51AA was discussed.  As an issue that is not this case or any other case.”

10                  In my view, if the proper ambit of s 51AA had been discussed at the lunch referred to in that letter, that also should have been the subject of disclosure in accordance with the duty explained by Merkel J in Aussie Airlines Pty Ltd v Australian Airlines Pty Ltd (1996) 65 FCR 215 at 220-222.  The fact is that neither that subject, nor any other subject which would require disclosure, was discussed at the lunch.

11                  Finally the respondents submit that:

“It is unseemly to have litigants casting their minds to such issues and for Judges to feel that there may be doubts over their impartiality.  It is likely to bring the administration of justice into disrepute.  The remedy is totally undramatic and involves no cost or inconvenience.  The reluctance to adopt it suggests that there may be some reason not to do so.”

12                  I must say that I was somewhat surprised to read these last two submissions.  I have already dealt with the second last submission.  The first part of the last submission does not accurately state the test to be applied where there is an assertion of apprehended bias.  If it were consistent with my duty, I would gladly hand over this case to another judge in exchange for a trial of comparable length.  However, as Mason J explained in Re JRL at 352:

“Although it is important that justice must be seen to be done, it is equally important that judicial officers discharge their duty to sit and do not, by acceding too readily to suggestions of appearance of bias, encourage parties to believe that by seeking the disqualification of a judge, they will have their case tried by someone thought to be more likely to decide the case in their favour.” 

13                  In my view, particularly as this application has always been in my docket and has, for some months now, been set down for hearing later this year, I should hear the disqualification motion – see also Merkel J on this point in Aussie Airlines at 218-219.

14                  I have found the Aussie Airlines case most helpful in the disposition of this motion.  It provides a comprehensive review of the principles established by the cases in relation to the duty of disclosure and the tests for apprehended bias, including the knowledge to be imputed to the fair-minded observer.  As his Honour observed, the test for apprehended bias is an objective one.

15                  It is apparent that the disqualification sought in this matter is of the third category referred to in Webb v The Queen (1994) 181 CLR 41 at 74 i.e. disqualification by association.

16                  I now turn to consider whether a reasonably well-informed and fair-minded observer might entertain a reasonable apprehension that I might not bring an impartial and unprejudiced mind to the resolution of the questions raised in this application by reason of my association (including any indirect association through my wife and Mrs Fels) with Professor Fels.

17                  If the matters referred to in paragraph 6 of the respondents’ written submissions are the subject of admissible evidence then they will become a matter of public record and that will happen no matter which judge hears the case. 

18                  I accept, as a matter of judicial knowledge that Professor Fels is, as the respondents contend, very visible in the media.  I have no way of deciding whether this is because he seems (as the respondents assert) actively to seek out opportunities to be seen and heard or whether the media seek him out.  There is insufficient material before me to decide whether, as the respondents submit, this case is a “test case” or whether, as the applicant asserts, this is “just another Trade Practices Act claim”.  I will assume, for the purposes of deciding this motion, that, because it is only the second case brought by the applicant under s 51AA, it is regarded as being in the nature of a test case.  I will also assume, for the same purposes (i.e. to decide this motion) that the applicant has publicised the institution of these proceedings in its normal manner and that the respondents, if they win the case, will (as they say they will) make vigorous public criticism of the applicant and of Professor Fels in particular.

19                  I accept that a significant portion of the public identifies Professor Fels with the applicant, but the truth is that he is one of several members of the applicant Commission.  The reality is that the applicant is a very large organisation with numerous staff members supervising the conduct of litigation by (in this case) the Australian Government Solicitor and counsel.  There is simply no reason why, as a result of my fairly limited contact with Professor Fels, I should show fear of or favour to the applicant.  

20                  The friendship between my wife and Mrs Fels involves their meeting perhaps once or twice per year and about the same number of telephone conversations.  Mrs Fels’ invitation to lunch resulted from her learning (from the mutual friends referred to above) that my wife and I would be in Melbourne on that weekend.  My contact with Professor Fels has been minimal.  Apart from the lunch in May of this year it has been confined to socialising at the Trade Practices Workshops.  The lunch is probably the matter which would most interest the fair-minded observer.  It is certainly the matter upon which Mr Metaxas, counsel for the respondents, focussed in oral argument this morning.  It was perfectly proper for him to do so.  But the trial date (at the time of the lunch) was then six months away.  Professor Fels is not going to be a witness in the case.  Professor Fels is also a lawyer.  So far as I am aware, he has no involvement in the preparation of the case for trial.  There was no discussion of this case or any other case or any relevant issue.  In retrospect, I acknowledge that it would have been wiser not to attend the lunch, but only because it has put the parties to the expense of this motion.

21                  Whether the fair-minded observer examined the various aspects of my “association” or “relationship” with Professor Fels separately or cumulatively, I do not think he or she would have a proper basis for concluding that I might not bring an impartial mind to the resolution of the issues raised in the principal application.

22                  The trial of this application is now three months away.  In view of the concerns expressed by the respondents, I shall, as a matter of abundant caution, endeavour to have no contact at the Trade Practices Workshop this month with anyone connected with the applicant.  I shall also ask my wife to do likewise, and am reasonably confident that she will comply with that request.

CONCLUSION

23                  For the foregoing reasons the respondents’ motion will be dismissed.  I propose to order that costs of today be costs in the cause, but I will hear counsel.

Associate:

Dated:              28 August 2000