Reasonable apprehension of bias: MSI Developments Pty Ltd & Ors v National Australia Bank (Ruling No 1) [2013] VSC 551

The matter of MSI Developments Pty Ltd & Ors v National Australia Bank (Ruling No 1) [2013] VSC 551 was an application for Almond J to disqualify himself from a proceedings as His Honour was said to:

• have shares in the defendant, the National Australia Bank ('NAB'), through his superannuation fund; and
• have acted as a barrister for the NAB when His Honour was at the Bar.

In dismissing the application, His Honour set out the principles for disqualification for bias. These are as follows:

4 In Livesey v New South Wales Bar Association,[1] the High Court set out the relevant principle as follows:

a judge should not sit to hear a case if in all the 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.^[2]

5 In Ebner v Official Trustee in Bankruptcy,[3] the court described the principle and its application as follows:

the governing principle is that...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 (citations omitted)...
Its application requires two steps. First, it requires the identification of what it is said might lead a judge (or juror) 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 bare assertion that a judge (or juror) has an “interest” in litigation, or an interest in a party to it, will be of no assistance until the nature of the interest, and the asserted connection with the possibility of departure from impartial decision making, is articulated. Only then can the reasonableness of the asserted apprehension of bias be assessed.
...
Similarly, the bare identification of an “association” will not suffice to answer the relevant question.^[4]

6 The test is objective and the hypothetical fair minded lay observer is not assumed to have a detailed knowledge of the law, or of the character and ability of a particular judge.[5]

His Honour noted:

• when at the bar His Honour acted for NAB every two or three years and never had a general retainer; 
• he did not recognise any names on the list of employees of the NAB who were to be called as witnesses in the proceeding; and
• when dealing with the banks as counsel his dealings were primarily with solicitors acting for the bank.

In considering the 'fair-minded lay observer' His Honour said

13 In my view, a fair-minded lay observer would appreciate the following. First, that barristers who practice in commercial law are likely to have, from time to time, acted for banks. Secondly, that the nature of such associations in the practice of commercial law do not necessarily lead to associations which would divert a judge (who has previously acted as counsel for a bank) from deciding a case involving such a party on its merits. In the present circumstances, my view is that a fair-minded lay observer with a general understanding of the way barristers carry out their work would not reasonably apprehend that a judge might bring a partial or prejudiced mind to the resolution of the questions in this proceeding, including the assessment of matters such as the credit of bank witnesses.

Re-opening the plaintiff's case: Matthews v SPI Electricity Pty Ltd & Ors (Ruling No 28) [2013] VSC 523

The matter of Matthews v SPI Electricity Pty Ltd & Ors (Ruling No 28) [2013] VSC 523 was an application, in the bushfires class action, to re-open the plaintiff's case during the trial. The plaintiff sought leave to re-open her case to tender a coach screw found by a metal detector. The defendants opposed the application on the basis that it was too late and the evidence was of little or no probative value. His Honour J Forrest J gave the plaintiff leave to re-open her case and discussed the principles concerning re-opening a case, an extract of which follows.

19. The relevant question raised by the application is whether, on the whole, it is in the interests of justice that leave be granted for Mrs Matthews to re-open her case. 

20. The position in relation to re-opening a case after the close of final submissions or judgment has been delivered is clear. In Spotlight Pty Ltd v NCON Australia Ltd[12] the Court of Appeal agreed with the opinion of Kenny J in Inspector-General in Bankruptcy v Bradshaw[13] that there are four recognised classes of case in which a court may grant leave to re-open a party’s case:[14]

The four classes (with which we respectfully agree) are: (i) where fresh evidence, unavailable or not reasonably discoverable before, becomes known and available; (ii) where there has been inadvertent error; (iii) where there has been a mistaken apprehension of the facts; and (iv) where there has been a mistaken apprehension of the law. 

These classes are not closed; but the present case shares with Bradshaw the distinction that it falls into none of them, and no applicable new category is suggested. The overriding principle is that the court consider whether, taken as a whole, the justice of the case favours the grant of leave to reopen. We are satisfied that, in the present, it does not.

21. This year Sifris J dealt with an application by a plaintiff to re-open its case in Nicholson v Hilldove Pty Ltd & Ors.[15] In that case the application was made after the trial of the proceeding and reasons for judgment had been handed down. His Honour reviewed the authorities and said:[16]

The authorities establish that the existence or discovery of fresh evidence alone is not sufficient to re-open the case. If this were not so decisions would be “of a provisional character only”. Rather, public policy requires a more “stringent rule”. Accordingly a party seeking to re-open a case on the grounds of fresh evidence is required to show “that there was no lack of reasonable diligence on his part and that it is reasonably clear that the fresh evidence would have produced an opposite verdict”.

22. Each of these cases involved re-opening a case after final submissions and in two of the cases (Bradshaw and Nicholson) after the judgment. It is clear that a very powerful reason is required and, of course, one that satisfies the criteria set out by the Court of Appeal in Spotlight. However re-opening a case whilst the trial is still underway is a different kettle of fish altogether. 

23. The High Court in Smith v New South Wales[17] referred to the considerations relevant to determining whether to permit the re-opening of a case during the course of a trial:[18]

If an application is made to re-open on the basis that new or additional evidence is available, it will be relevant, at that stage, to enquire why the evidence was not called at the hearing. If there was a deliberate decision not to call it, ordinarily that will tell decisively against the application. But assuming that that hurdle is passed, different considerations may apply depending upon whether the case is simply one in which the hearing is complete, or one in which reasons for the judgement [sic] have been delivered. It is difficult to see why, in the former situation, the primary consideration should not be that of embarrassment or prejudice to the other side. In the latter situation the appeal rules relating to fresh evidence may provide a useful guide as to the manner in which the discretion to re-open should be exercised.

24. Thus the primary consideration is whether the interests of justice require that the application be allowed. In this state the Court’s broad powers of case management under the Civil Procedure Act 2010 (Vic)[19] need to be noted: to achieve the objective of ‘[facilitating] the just, efficient, timely and cost-effective resolution of the real issues in dispute’ the Court may make any order or give any direction with regard to the objects listed in s 9(1)[20] including (a) the just determination of the civil proceeding and (c) the efficient conduct of the business of the court. 

25. Section 49(1) of the CPA also gives the Court the power to ‘give any direction or make any order it considers appropriate to further the overarching purpose in relation to the conduct of the hearing in a civil proceeding’ before a hearing commences or during a hearing.'

In granting leave, His Honour considered that:

• The delay in searching for the screw was explicable.
• The failure to tender the screw earlier was the result of a misunderstanding or misjudgment of counsel.
• The evidence was relevant, and in so finding His Honour said, 'It merely requires the court to ask: could the evidence if accepted, affect the probability, even indirectly, of the existence of a fact in issue in the proceedings? There need only be a minimal logical connection between the evidence and a fact in issue. It is important not to confuse relevance with sufficiency or weight (at [45]).'
• Any prejudice in re-opening the case would be minimal, and it was particularly important that the plaintiff submitted that it was not intended to conduct an expert analysis of the screw and therefore avoid 'instigating another battle of expert evidence'.

Injunctions and disputed facts: Mendonca v Mason [2013] VSC 516

Mendonca v Mason [2013] VSC 516 was a hearing before Macaulay J in the Supreme Court of Victoria in which a tenant was seeking to restrain a landlord from taking possession of a property in which the tenant resided. In essence, a mortgagee took over from an insolvent landlord and claimed that she had not been paid and that the lease documents were non-existent. The tenant claimed to have paid the insolvent landlord and the two mortgagees, and that being removed from the premises would leave him homeless. The mortgagee alleged that payment to anyone other than her did not discharge the obligations to her.

Macaulay J discussed the principles for granting interlocutory injunctions. In particular, His Honour considered that contested facts do not automatically satisfy the 'serious question to be tried' limb, and that adequacy of damages is to be considered in the context of whether the defendant succeeded at trial.

The end result was that Macaulay J dismissed the injunction, finding that there was serious question to be tried, albeit a weak case, but that damages were an adequate remedy and that the balance of convenience favoured the mortgagee. In particular, Macaulay J questioned how the tenant could claim that he would be homeless when he claims to have been paying rent to the landlord and mortgagees on an ongoing basis, and he could apply those payments elsewhere.

On a 'serious question to be tried', His Honour said:

[21] Accepting that a genuine conflict on the evidence about a fact important to the claim often denotes a ‘serious question’ for trial, the mere existence of that conflict does not foreclose the court’s consideration of the strength of the plaintiff’s claim. In ABC v O’Neill, Gummow and Hayne JJ (Gleeson CJ and Crennan J agreeing) rejected the idea that so long as the court is satisfied that there is a question for determination that is not frivolous and vexatious there will necessarily be a serious question to be tried sufficient to satisfy the first of the usual elements. Instead, their Honours described the ‘governing consideration’ as ‘the strength of the probability of ultimate success [which] depends upon the nature of the rights asserted and the practical consequences likely to flow from the interlocutory order sought’.

[22] Therefore, it is not necessarily sufficient, in order to shift the focus solely to the balance of convenience (including the adequacy of damages), for a plaintiff to simply identify a contested fact upon which his or her entitlement to relief depends. In assessing the seriousness of the question to be tried, the court will also consider the strength of the probability of success. The degree to which the court may wish to consider that relative strength will vary from case to case.

On whether damages are an adequate remedy, His Honour said:

[18] The second consideration (often combined with the third) is whether or not damages would be an adequate remedy. 

[36] If I declined to order an interlocutory injunction, yet Mendonca [the tenant] ultimately succeeded at trial, in my view damages would be an adequate remedy. In fact, it was not specifically put to me that damages would not be an adequate remedy.

The matter went on to appeal shortly after the decision, and the Court of Appeal dismissed the appeal. The special leave application was dismissed also.