Federal Court of Australia

Ambrose v Badcock [2021] FCA 881

ORDERS

THE COURT ORDERS THAT:

1.    The originating application be allocated to another judge of the Court.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

CHARLESWORTH J

1    On 8 July 2021 I determined, in the absence of the respondent, that I should disqualify myself from presiding in this matter. I made an order that the matter be reallocated to another justice of the Court and delivered reasons for judgment ex tempore. I indicated to the applicant that publication of written reasons would be delayed until such time as the respondent had been served with the originating process. The respondent has now been served. What follows is a written record of the reasons previously given orally, with some minor amendments.

2    The applicant is the Trustee of the bankrupt estate of the respondent, Mr Robert John Badcock. The Trustee alleges that Mr Badcock has conducted, and continues to conduct, a business for the sale of motor vehicles. Among other things, the Trustee alleges that the motor vehicles in Mr Badcock’s possession form a part of the after acquired property of Mr Badcock for the purposes of the Bankruptcy Act 1966 (Cth) and so vest in him.

3    The originating application seeks relief described as “interim relief”. Proposed order 1 is to the effect that the application for injunctions by way of interim relief be initially heard on an ex parte basis without a requirement to serve or notify the respondent prior to the initial nominated hearing.

4    The matter was allocated to me in the usual course, including for determination of whether an ex parte hearing should proceed.

5    The proposed interim injunctions are those contained in [11] and [12] of the originating process, namely, that until further order, Mr Badcock be restrained by injunction from transferring, selling, charging, pledging, mortgaging, signing, advertising, marketing or dealing in any way with “motor vehicles” without the consent of the applicant. The motor vehicles forming the subject matter of that proposed order are defined elsewhere in the originating process. An order is also sought requiring Mr Badcock to grant the Trustee access to the defined motor vehicles so as to permit him to inspect them for various purposes relating to the discharge of his functions under the Bankruptcy Act.

6    If I were to proceed to hear the application, it would be necessary to first satisfy myself that there was a proper basis for proceeding in Mr Badcock’s absence. It will then be necessary to satisfy myself that the criteria for the grant of at least interim relief, were satisfied. Whilst that may be a low threshold, it would require an assessment to be made about whether an ex parte order preserving the subject matter of the proceedings would be necessary, which may require a prima facie assessment to be made about whether Mr Badcock could reasonably be expected to preserve the property forming the subject matter of the dispute absent a court order compelling him to do so.

7    Upon reading the affidavit of the Trustee in advance of the hearing, I have determined that I should not preside in this matter on the basis that I am disqualified from doing so in accordance with the principles stated in Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337, that is, on the ground of apprehended bias.

8    The test for apprehended bias is sometimes referred to as the double-might test. It is whether a fair-minded lay observer might reasonably apprehend that the decision-maker might not bring an impartial mind to the resolution of the issue he or she is to decide. As has been mentioned, one of the issues I need to decide, albeit on a prima facie basis, relates to the likely cooperativeness or uncooperativeness of Mr Badcock.

9    In May 1997, a story was broadcast on the public affairs program Today Tonight concerning a business trading under the name Decorator Warehouse. The story made allegations of wrongdoing in relation to that business. The proprietor of the business was Mr Badcock. Between 1992 and 1996, I was a journalist employed by Channel 7 Adelaide Pty Ltd or a related entity as a researcher for Today Tonight. From about January 1997 I was then a freelance journalist and producer regularly engaged by Channel 7 and related entities, and in that capacity I was engaged from time to time to work for Today Tonight. I cannot recall whether I was engaged to work for Today Tonight on the particular date that the story featuring Mr Badcock’s business was broadcast. I consider it likely that I was. I presently remain a friendly acquaintance of the former Executive Producer of the program, Mr Graham Archer.

10    In around 2003, Mr Badcock commenced defamation proceedings in the District Court against Channel 7 and other defendants, including Mr Archer. I was, by that time, an admitted legal practitioner employed as an Associate and then as a Senior Associate in the law firm Kelly & Co Lawyers. In that capacity, I acted for Channel 7 and the other defendants in defending Mr Badcock’s action both as solicitor and as counsel. In that capacity, I had regular dealings with Mr Badcock in his capacity as the self-represented plaintiff, including by way of written and in-person dealings in the context of the Court proceedings. Among other things, the written correspondence complained on behalf of the defendants of Mr Badcock’s non-compliance, or perceived non-compliance, with the rules of the District Court.

11    Judgment in the District Court proceedings include those with the citations Badcock v Channel Seven Adelaide Pty Ltd & Ors [2005] SADC 32 and Badcock v Channel Seven Adelaide P/L & Ors [2006] SADC 7. I cannot recall whether the proceedings progressed to a stage by which the defendants were required to file a defence. In the ordinary course, however, I would have informed a plaintiff in Mr Badcock’s position of the defence upon which the defendants relied. In the ordinary course, the foreshadowed defences would have included the defence of justification, that is, that any defamatory imputations conveyed by the publication were true.

12    I made submissions in the proceedings concerning the significance of Mr Badcock’s status as an undischarged bankrupt. Over that time, Mr Badcock claimed to be a person who was impecunious, including by reason of his bankruptcy, particularly in response to an application for security for costs I was instructed to bring on the defendants’ behalf. When I left my employment with Kelly & Co in 2006, the litigation had not resolved and I do not know whether (or how) they were finally resolved.

13    A reasonable person having access to the correspondence might also conclude that I was critical of Mr Badcock’s conduct as a litigant in those proceedings. At the time of our dealings, I believe Mr Badcock was then unaware of my status as a former employee and freelance contactor with Channel 7 or its related entities and my acquaintance with Mr Archer in that capacity. A reasonable observer, having that knowledge, might form the view that I personally held the opinion that any defamatory imputations made against him in the Today Tonight program were true.

14    My dealings with Mr Badcock occurred more than 15 years ago and the story he complained of was broadcast more than 20 years ago. However, the correspondence annexed to an affidavit relied upon by the Trustee in this proceeding fairly supports the inference that Mr Badcock presently persists in the belief that the Today Tonight story precipitated the demise of his business and ultimately resulted in his bankruptcy.

15    It is also apparent that Mr Badcock does not accept the validity of his bankruptcy and that he has denied the legal force of the sequestration order since it was made in 2001. It may fairly be anticipated that in defending the current action, Mr Badcock may wish, rightly or wrongly, to raise matters occurring throughout the bankruptcy, dating back some 20 years and, perhaps, beyond. In that event, it would be necessary to determine whether his arguments should be permitted to be raised and (if so) to substantively determine them.

16    I have concluded that the combination of circumstances summarised above is sufficient to satisfy the test of apprehended bias so warranting an order that I disqualify myself from presiding in this matter. That is especially so given that the Trustee seeks, firstly, an order that the hearing proceed ex parte, that is, without Mr Badcock having an opportunity to be heard. It necessarily follows that I cannot offer Mr Badcock an opportunity to be heard as to whether or not I should recuse myself without drawing his attention to the existence of the action. As I have said, in support of his application for ex parte relief, the Trustee relies on an alleged history of non-compliance and uncooperativeness on Mr Badcock’s part as the basis for the hearing proceeding ex parte¸ at least initially.

17    In the circumstances, I am satisfied that I should make an order that the matter be allocated to another justice of the Court, including for the purpose of determining whether any part of the proceedings should be heard in Mr Badcock’s absence.

Associate:

Dated:    8 July 2021