Facts
A joint venture was established to purchase a site at Nelson Bay, New South Wales, with the intention to design, build and sell for profit, a unit development upon it. The venturers were Landmark Building Developments Pty Ltd (“Landmark”) and Toyama Pty Ltd (“Toyama”). No written joint venture agreement was entered into.
Landmark was established by Mr Fares, an architect, along with Mr Barrak, a solicitor. Mr Fares was also the sole director and shareholder of Parramatta Design and Developments Pty Ltd (“Parramatta Design”). Landmark and Toyama purchased the site. They agreed that Parramatta Design would perform the architectural services for the development. Parramatta Design then authored the necessary architectural plans and drawings (“the plans”). The joint venture paid the fees for the plans.
Initially the plans provided for an 8 unit development, however after a neighbour to the site successfully obtained approval to build a 16 unit development, Mr Fares convinced Toyama to agree to increase the intensity of the development to 14 units. Toyama eventually relented when it was agreed that Parramatta Design’s fees for the amended plans would be confined to the fee that it was paid for the plans in respect of the 8 unit development. Following the lodgment of the amended plans, Council consent was granted for a 14 unit development.
A dispute arose as between the venturers, and the development did not proceed. Trustees were appointed, and they sold the site. Parramatta Design however, refused to give its permission to the purchaser, Concrete Pty Ltd (“Concrete”), to use the plans.
Implied licence to use the plans?
The High Court held that Concrete had the benefit of an implied licence to use the plans in order to develop the land in accordance with the development approval. In reaching its decision, the High Court focused upon the terms of the joint venture agreement, and the effect that the joint venture relationship had upon the parties. This contrasted with the Full Court’s approach of examining the terms of the joint venture agreement and the agreement as between architect and client, without analysing the obligations imposed upon the joint venturers.
Apprehension of bias
Judicial bias may be actual or apprehended. The High Court confirmed the test to be employed when determining whether a judge should be disqualified for apprehended bias, as adopted in Johnson v Johnson (see: (2000) 201 CLR 488 at 492 [11] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ.), namely, “whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide” (An apprehension of bias may arise from any number of situations, including, extra-judicial publications, speeches or comments, whether made prior to or during a judge’s appointment, communications with counsel, litigants or witnesses prior to or during trial, within the reasons for judgment, or even arising from interests, attitudes or relationships of the judge. see Enright, Christopher, Federal Administrative Law, 2001 at 450-462.).
During the trial in Concrete v Parramatta Design, application was made by the respondents seeking the disqualification of the primary judge, Conti J, on the ground of apprehended bias. Junior counsel for the respondents took that view, whilst senior counsel for the respondents did not. Hence it was junior counsel who made the application. That application was refused. Callinan J suggests (at [143]) that “this might explain why subsequently another senior counsel was briefed to make an application that his Honour disqualify himself.” The newly instructed senior counsel provided further written submissions to the primary judge seeking leave to reopen the disqualification application. Leave was refused.
The respondents contended that a reasonable apprehension of bias arose as the result of the cumulative effect (see: Callinan J at [179] noted that the Full Court “was right in determining this issue to look not only at the course of the trial, but also the reasons for judgment, and to read them together to see whether the cumulative effect was one of apparent bias.”) of the following conduct (Only an indicative sample of the events raised by the respondents are set out in this paper. Callinan J’s judgment (at [140] — [149]) sets out a detailed description of them):
Exchange with Counsel
During discussions with respondents’ counsel in the opening stages of the trial, the primary judge remarked (see at [140]), inter alia:
“Except that there is just this overriding troublesome element in the complex circumstances in this case, that is that the copyrighter has profited from the sale of the land by virtue of the fact that he prepared plans which were used to obtain a development consent and presumably the purchase price was geared to the existence of that development consent, it would be amazing if it was not. It would be an inference one would normally draw unless there was some strong evidence to the contrary, so that there is a — I am not saying that it falls with the equitable doctrine of clean hands but there is something of considerable concern as having profited indirectly by the sale of land, the copyrighter then says: ‘well, I’ve got the money in my pocket now. Bad luck, he can’t use those plans.’ Now is that a distorted way of looking at the facts of the case? ...” .
Kirby and Crennan JJ (at [105]) were of the view that in exchanges with respondents’ counsel, the primary judge “sought to crystallize the issue as one where the second respondent, Mr Fares, the architect, denied that Concrete had a licence to use the drawings even though Concrete had purchased the site on the basis that the site was subject to a particular development consent. The primary judge’s comments were understandable and clearly part of dialogue between bench and bar aimed at clarifying the issues in the case.”
Criticism of lack of evidence
Comments made by the primary judge to Mr Barrack, a solicitor and director of Landmark, and Mr Fares, the architect, during their cross examination were raised, including:
“His Honour: They are not in evidence. I don’t know whether they exist or not but for some reason you have chosen, in the time you were a solicitor on the record, not to adduce that material into evidence. I just think I should tell you what is on my mind, because at the moment I find the whole of this evidence that’s been put on behalf of the respondents as extraordinary —
Mr Barrack: Your Honour –
His Honour: …and I’ve been in commercial law all my life. I haven’t seen anything like it in 30 or 40 years’ practice.”
…
“His Honour: …I just don’t understand how legitimately, leaving aside the questions of morality and ethics, I just don’t understand how legitimately Concrete Pty Ltd has been drawn into this dispute which is basically a dispute between joint venturers, or that’s certainly its genesis.”
…
“His Honour: …But I mean, it’s as obvious as night follows day, that if you’re an owner of property, particularly an owner who’s bought it for the purpose of development, and the basis of a development approval that attached to these plans, that you’re inherently aggrieved.
Mr Donovan [counsel for respondents]: No, no, because we don’t know what Concrete proposes to do.
His Honour: …So we’ve — well, they’re either going to — well, at any rate, look, I’ll say no more, but you really are — I hope you’ve got some better submissions than that one.”
When referring to the first discussion with Mr Barrack (as partly set out above), Kirby and Crennan JJ (at [106]) noted that the primary judge conveyed what he believed to be “the paucity of Parramatta Design’s documentary records and indicated that he thought that was unusual. His Honour stated that he thought it was fair that he should indicate his concern to both parties and stated: “[i]t may well be that I’ve misunderstood or I haven’t got an appreciation of the whole of the evidence, so I’ll certainly keep an open mind…””
In respect of the discussion between the primary judge and Mr Barrack, Callinan J found (at [178]): “It was certainly not wrong for his Honour to point out to the witness that written material to which the witness was referring was not in evidence…”; and with respect to the above discussion the primary judge had with Mr Donovan, “… [a]lmost every counsel of any experience has, on occasion, been the subject of a judicial observation of that kind.”
Comments in reasons for judgment
Extracts the respondents relied upon included the following final remark in the primary judge’s reasons (see: [2004] FCA 1312 at [303]):
“I conclude by observing the underlying reasons for this litigation are mystifying. It is somewhat enigmatic that such expensive and protracted litigation could have occurred in circumstances where Landmark and Toyama made such a substantial capital profit from their Nelson Bay venture in such a relatively short period of time, and why the persons respectively standing behind those companies have become locked into expensive litigation in this Court and (shortly) in the Supreme Court, and why Concrete as a third party has become embroiled in such extraordinary litigation in the first place. Perhaps there is more to the circumstance of this litigation than ‘meets the eye’, but whatever the case may be, the Court has not been spared the task of a ten day hearing and of subsequent consideration of hundreds of pages of written submissions, and in the case of the respondents [Parramatta Design] and Mr Fares, containing a considerable body of material having no or no sufficient bearing upon the critical issues falling for resolution.”
Findings in respect of bias
The Full Court allowed the appeal and unanimously found that the trial had miscarried on the ground of apprehended bias, and whilst making specific reference to the “substantial intervention made by the judge, during the course of the cross examination of Mr Barrack” (see: (2005) 144 FCR 264 at [41]), found that it was the “cumulative weight of the material that [Parramatta Design] relied upon”, rather than any particular event which led them to this conclusion. The High Court found otherwise.
Kirby and Crennan JJ stated (at [110]—[111]) that the appeal in respect of the apprehended bias issue involved “the application of well-established principles, which were not in dispute and were both reiterated and explained in Ebner v Official Trustee in Bankruptcy…” (see: (2000) 205 CLR 337 at 344-345 [6]-[8] per Gleeson CJ, McHugh, Gummow and Hayne JJ (footnotes omitted):
“Where, in the absence of any suggestion of actual bias, a question arises as to the independence or impartiality of a judge … a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide. That principle gives effect to the requirement that justice should both be done and be seen to be done, a requirement which reflects the fundamental importance of the principle that the tribunal be independent and impartial. It is convenient to refer to it as the apprehension of bias principle …
The apprehension of bias principle admits of the possibility of human frailty. Its application is as adverse as human frailty. Its application requires two steps. First, it requires the identification of what it is said might lead a judge … to decide a case other than on its legal and factual merits. The second step is no less important. There must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits.”
The High Court in Concrete v Parramatta Design (at [111] per Kirby and Crennan JJ) also referred to its decision in Johnson v Johnson (see: (2000) 201 CLR 488 at 493 [13] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ (footnotes omitted):
“… Judges, at trial or appellate level, who, in exchanges with counsel, express tentative views which reflect a certain tendency of mind, are not on that account alone to be taken to indicate prejudgment . Judges are not expected to wait until the end of a case before they start thinking about the issues, or to sit mute while evidence is advanced and arguments are presented. On the contrary, they will often form tentative opinions on matters in issue, and counsel are usually assisted by hearing those opinions, and being given an opportunity to deal with them.”
In Johnson v Johnson (see: (2000) 201 CLR 488 at 504 [46], and this topic is further discussed by Kirby J in Antoun v The Queen (2006) 80 ALJR 497 at 503 [27]-[33]), Kirby J commented “…opinions favouring silence on the part of the adjudicator during a hearing … (which is the surest means of avoiding most allegations of prejudgment) are now seen as carrying risks of an even greater injustice … A frank dialogue will commonly be conducive to the avoidance of oversight and the repair of misapprehensions. Uninformed members of the public are doubtless sometimes surprised by the robust exchanges which take place in court, especially between a judge and experienced lawyers. But judges and other adjudicators and lawyers know that such dialogue can have great value.”
Kirby and Crennan JJ (at [113]-[114]) found that “[a]ll the comments made by the primary judge about which complaint has been made have to be considered in the context of the most striking feature of the facts of this case. The architect who claimed copyright in the drawings and purported to deny any implied consent to Concrete, the purchaser of the land with the benefit of a development consent, was also a principal of Landmark, the tenant-in-common as to a two-thirds share of the land, and had agreed to the sale of the land with the benefit of the development consent …. [t]he inherent tension in the architect’s dual roles led to the architect adopting inconsistent positions in respect of the facts which his Honour was attempting to understand .….”. Their Honours continued (at [114]) “… the Full Court … erred in failing to analyse, and give due weight to, the tension in the architect’s dual roles and the inconsistent positions the architect adopted to the facts, at different stages of the dispute.”
The primary judge was clearly frustrated with all parties at trial. Critical comments were directed to both ends of the bar table with regards to the extent and relevance of the issues argued, and the length of written submissions. Gummow ACJ (at [4]) adopted Lord Walker of Gestingthorpe’s findings sitting in the Privy Council in Almeida v Opportunity Equity Partners Ltd (see: [2006] UKPC 44 at [103]):
“[T]he judge’s interventions were motivated, not by partiality, but by the wish to understand the evidence (which was often obscure and inconsequential) and to push on the trial process.”
Raising an allegation of bias on appeal
In Concrete v Parramatta Design, the High Court also considered the way in which the respondents had raised the bias issue; both before it, and previously in the Full Court. The respondents had not pleaded bias in their Notice of Appeal before the Full Court, doing so orally, and further, by doing so in the alternative. It was also argued in the alternative by the respondents before the High Court.
In highlighting the serious nature of allegations raising bias, the High Court (see: Per Kirby and Crennan JJ at [116]-[117]) ruled that the relief sought should reflect this. Accordingly, “[a]n intermediate appellate court dealing with allegations of apprehended bias, coupled with other discrete grounds of appeal must deal with the issue of bias first. It must do this because, logically, it comes first. Actual or apprehended bias strikes at the validity and acceptability of the trial and its outcome. It is for that reason that such questions should be dealt with before other, substantive, issues are decided. It should put the party making such an allegation to an election on the basis that if the allegation of apprehended bias is made out, a retrial will be ordered irrespective of possible findings on other issues. Even if a judge is found to be correct, this does not assuage the impression that there was an apprehension of bias (see: Antoun v The Queen (2006) 80 ALJR 497 at 499 [2] per Gleeson CJ). Furthermore, if, as here, an intermediate appellate court finds the allegation made out, but grants no relief because it otherwise finds in favour of the party making the allegation, a defect in the administration of justice has been found to have occurred which, in the absence of any successful appeal on the point, will remain unremedied. Inevitably, this adversely affects public confidence in the administration of justice…” (Also note Callinan J’s comments at [172] with regards to the Full Court ruling on both issues. His Honour stated that a ruling on the copyright issue alone was appropriate, as that would have determined the appeal.).
Although it was not an issue for consideration in Concrete v Parramatta Design, an allegation of bias should be raised promptly to enable the judge to respond (and potentially correct any wrong impression) and then, if necessary, rule on it, in a timely fashion. Delay may result in the claim being deemed to have been waived (see: Vakauta v Kelly (1989) 167 CLR 568 at 572 per Brennan, Deane and Gaudron JJ).
The Federal Court “Individual Docket System”*
When assessing the verbal exchanges that took place between the primary judge and the respondents’ counsel and witnesses, Callinan J in Concrete v Parramatta Design states (at [173]): “[i]t is unfortunate that the trial judge did, on a few occasions, express himself in rather strong language. In my opinion he did not do so however in such terms as could be characterised as manifestations of apparent bias.” His Honour then articulates that the primary judge’s remarks “need to be understood in the light of the way in which trials in the Federal Court, and indeed in some other jurisdictions on occasions, are now conducted”.
When considering the docket system operating in the Federal Court, Callinan J observes (at [174]-[175]):
“In that system a number of cases are assigned to a particular judge who oversees, and makes directions with respect to, all interlocutory matters before hearing a case assigned to him or her. The procedure for trials in the jurisdiction also involves the preparation, exchanging and filing of statements and documents in advance of the hearing which may, and almost always will, be read before the trial begins.
This system has its disadvantages and dangers. On the one hand, the trial judge will be well educated in many of the details of the case on each side by the time that the hearing starts. But on the other hand, it may sometimes be difficult for the trial judge, apparently fully conversant with the facts and issues, not to have formed some provisional view at least of the outcome of the case. The justifications for the provision of written statements in advance of trial have been thought to be the avoidance of surprise and the shortening of hearing time. These advantages will often be more illusory than real. The provision of written statements by one side will afford to the other an opportunity to rehearse in some detail his or her response. It is also impossible to avoid the suspicion that statements on all sides are frequently the product of much refinement and polishing in the offices and chambers of the lawyers representing the parties, rather than of the unassisted recollection and expression of them and their witnesses. This goes some way to explaining the quite stilted and artificial language in which some of the evidence is expressed in writing from time to time, as it was here. Viva voce evidence retains a spontaneity and genuineness often lacking in pre-prepared written material …”
Callinan J further states (at [176]): “I mention these matters because in sum they may well incline a trial judge towards a degree of outspokenness of a kind to which he or she would not be inclined in a conventional trial on largely oral evidence. That this is so does not provide any excuse for the manifestation of apparent bias on the part of a trial judge but it may explain why a judge finds himself or herself speaking more candidly and strongly than he or she might otherwise do, or even have been able to do, in the past or in other jurisdictions …”
In Designer Entertainment Pty Ltd v D Club Pty Ltd (see: [2003] FCA 1445 (24 October 2003) at [9]), Emmett J proposed one method that a docket judge might adopt in order to avoid forming any preconceived views on the evidence prior to trial. His Honour, not being the docket judge in that case, gave directions that if the docket judge considered that the foreshadowed interlocutory application would raise issues of credit that would make it difficult for the docket judge to hear the trial, that he would avoid causing the docket judge any potential for embarrassment in terms of the final hearing by the matter remaining on his Honour’s (Emmett J’s) docket for the purpose of dealing with the interlocutory application only.
In an address discussing the commercial list operating in the Supreme Court of Queensland, Chesterman J (see: Queensland Courts website, (http://www.courts.qld.gov.au/), Publications, Articles & Speeches, Mr Justice R.N. Chesterman RFD, “Commercial Causes Jurisdiction – Address given to Minter Ellison Staff”, 10 June 2004 at 11) also advocated flexibility when managing proceedings and suggested that if a party has any concerns that the trial judge may have predetermined the case through his of her involvement in interlocutory disputes, then “it is easy enough to have the commercial list judge who has not overseen its preparation hear the trial.”
Comment
When assessing the making of an application for disqualification on the grounds of apprehended bias, the cumulative effect of the conduct of the judge will need to be considered, rather than being overly sensitive to particular events, which of themselves may not amount to bias. This necessarily involves the difficult balancing exercise of deciding when there is sufficient evidence to raise bias, and the requirement to do so at an early opportunity.
The High Court in Concrete v Parramatta Design makes it clear that in cases involving a trial judge’s refusal to disqualify him or herself on the ground of bias, this issue should be raised as the primary ground on appeal.
The relative strengths and weaknesses of a litigant’s case, as well as issues of credit, will often present for determination at an interlocutory stage, such as during applications for summary judgment, mareva injunctions and security for costs. In Concrete v Parramatta Design, Callinan J observes that difficulties may arise for parties, and indeed the judiciary, when a judge, having heard such an application, as well as any other number of other pre-trial skirmishes, then presides at trial.
Even in a court system not adopting a docket style or list system, there will always be a possibility however, that a judge, having heard an interlocutory application in a particular matter, is then listed as trial judge. Flexible judicial management as suggested by Emmett and Chesterman JJ above seems a prudent way of avoiding the potential for such a scenario should difficulties arise. Communication with the other parties of such concerns prior to listing for trial would no doubt be appropriate.
The decision in Concrete v Parramatta Design provides a useful examination of the issues involved when assessing apprehended bias in the context of both pre-trial case management and the conduct of a judge at trial. Parties who feel aggrieved by judicial observations in the course of litigation should carefully consider whether the conduct amounts to nothing more than proactive judicial involvement.
John Meredith
*The Federal Court website (http://www.fedcourt.gov.au/) lists the objectives of the docket system as follows:
“Savings in time and cost resulting from the docket judge’s familiarity with the case. In particular, the system seeks to eliminate the necessity to explain the case afresh each time it comes before a judge.
Consistency of approach throughout the case’s history.
Fewer management events with greater results. In particular, the system aims at reducing the number of directions hearings and other events requiring appearances before the Court.
Discouragement of interlocutory disputes or, alternatively, swift resolution of those disputes.
Better identification of cases suitable for assisted dispute resolution (mediation).
Earlier settlement of disputes or, failing that, a narrowing of the issues and a consequent saving of Court time.
Early fixing of trial dates and maintenance of those dates.”
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