Philip James Morey v Transurban City Link Ltd & Anor [1998] FCA 459 (18 March 1998)

Last Updated: 18 May 1998

FEDERAL COURT OF AUSTRALIA

PRACTICE AND PROCEDURE - Leave to Appeal - service of application for leave - leave to extend time in which to serve - Interlocutory Judgment - adjournment - reasonable apprehension of bias - leave to appeal - Interlocutory Orders - whether attended with sufficient doubt so as to warrant reconsideration - whether substantial injustice would be caused to applicant if interlocutory order stands - Discretionary Orders - whether error of principle - whether irrelevant consideration taken into account - whether misconception as to nature of application.

Federal Court Rules - O 52 r10(2)(b)

Associations Incorporation Act 1981 (Vic)

Melbourne City Link Act 1995 (Vic)

Niemann v Electronic Industries Ltd [1978] VR 431 - applied

House v The King [1936] HCA 40; (1936) 55 CLR 499 - applied

Livesey v New South Wales Bar Association [1983] HCA 17; (1983) 151 CLR 288 - considered

In re Morling; Ex parte Australian Meat Industry Employees Union (1986) 60 ALJR 402 - referred to

In re Morling; Ex parte Australian Meat Industry Employees Union [No 2] (1986) 60 ALJR 526 - referred to

Re J.R.L.; Ex parte C.J.L. [1986] HCA 39; (1986) 161 CLR 342 - applied

TRANSURBAN CITY LINK LTD and CITY LINK MANAGEMENT LTD -v- PHILIP JAMES MOREY and PAUL ANDREW MEES

VG 124 OF 1996

FOSTER, NORTH & MANSFIELD JJ
18 MARCH 1998
MELBOURNE
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 124 of 1996

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	transurban city link ltd First Appellant city link management ltd Second Appellant
AND:	philip james morey applicant paul ANDREW mees Respondent to appeal
JUDGES:	FOSTER, NORTH & MANSFIELD JJ
DATE OF ORDER:	18 MARCH 1998
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1. The application for leave to appeal be dismissed.

2. There be no order as to costs.

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

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 124 of 1996

ON APPEAL FORM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	transurban city link ltd First Appellant city link management ltd Second Appellant
AND:	philip james morey applicant paul ANDREW mees Respondent to appeal

JUDGES:	FOSTER, NORTH & MANSFIELD JJ
DATE:	18 MARCH 1998
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

(Extempore)

This is an application for leave to appeal by Transurban City Link Ltd ("Transurban") and City Link Management Ltd ("City Link") from the interlocutory decision of Heerey J given on 5 August 1997 on notices of motion of 10 April 1997 and 12 May 1997 brought respectively by Transurban and by City Link for orders, inter alia, that the costs in the proceedings be paid by Paul Andrew Mees ("Mr Mees"), the respondent to this application for leave to appeal.

To identify the issues raised by those notices of motion, and the interlocutory orders from which leave to appeal is sought, it is necessary to refer briefly to the issues in the proceedings generally, and to the previous determinations of the Court in relation to them.

NATURE OF PROCEEDINGS

The Melbourne City Link Act 1995 (Vic) (the "City Link Act") came into operation on 12 December 1995. It facilitated and gave statutory force to the Melbourne City Link project ("the Project"), a very large project involving the construction of roadways and tunnels in the inner suburbs of Melbourne. Transurban is the corporation entrusted with the project for the purposes of the City Link Act and City Link is the manager of the Transurban City Link Trust.

As part of the funding of the project, a public issue of securities was made in February and March 1996. A prospectus dated 20 February 1996 was lodged with the Australian Securities Commission and was issued to the public by Transurban and by City Link. It offered to the public the opportunity to take Equitable Infrastructure Bonds, shares and units ("the security parcels"). Each security parcel comprised 4,999 Equitable Infrastructure Bonds issued by Transurban, plus one share in Transurban, and one unit in the Transurban City Link Trust, managed by City Link. The minimum subscription was two parcels, each costing $500.

The applicant in the principal proceedings, Philip James Morey ("Mr Morey"), did not intend to apply for any security parcel. He is a member of the Public Transport Users Association (the "PTUA"), a corporation registered under the Associations Incorporation Act 1981 (Vic). The PTUA is essentially a voluntary association of persons who support its objectives. The PTUA is opposed to the Project. Mr Mees, at material times, had been president of the association.

Mr Morey's claim against Transurban and City Link was for declarations that the prospectus inviting investment and security parcels in relation to the Project, did not fully, fairly and adequately inform potential investors and was misleading and deceptive as to the projected returns for investment in security parcels and in other respects. He sought an injunction to restrain the publication and distribution of the prospectus and other orders.

DECISIONS OF THE COURT

The application was heard promptly. On 22 May 1996, Northrop J, after a hearing of some days, delivered judgment. His Honour dismissed the application, and adjourned the question of costs to a date to be fixed.

On 30 May 1996 and 18 June 1996 Transurban and City Link respectively moved the Court for orders that the costs of the proceedings be paid by the PTUA as well as by Mr Morey. Mr Mees gave evidence on the hearing of that application. On 7 February 1997, Northrop J gave judgment on that costs issue. He refused to order that the PTUA pay the costs of the application, but ordered that Mr Morey pay such costs. In the course of so doing, his Honour made findings as to the role of Mr Mees in relation to the conduct of the action. He was not satisfied that Mr Mees, in respect of his actions upon which the notices of motion were brought, was acting on behalf of the PTUA, nor in the exercise of powers conferred upon him by the PTUA.

On 11 July 1997 the Full Court (Lockhart, Heerey and Sundberg JJ) delivered judgment in an appeal from the decision of Northrop J of 22 May 1996. It allowed the appeal and set aside the judgment. It ordered that there be a new trial of the proceeding, limited to certain confined questions raised in the pleadings. It reserved the costs of the appeal. It also ordered that the costs of the first trial be reserved for the judge hearing the new trial. We are satisfied, despite submissions to the contrary based upon a somewhat equivocal passage in the transcript of the hearing, that the Full Court's order vacated the costs order made by Northrop J on 7 February 1997. The new trial has not yet occurred.

THE PRESENT ISSUES

The two notices of motion dated 10 April 1997 and 12 May 1997 sought orders, inter alia, that costs in the proceedings be paid by Mr Mees. Those motions came on for hearing before Heerey J prior to his Honour's participation in the Full Court hearing and decision.

On 12 June 1997 Heerey J made rulings as to the admissibility, for the purposes of the hearing of those notices of motion, of certain evidence given by Mr Mees and by Mr Morey in the hearing of the earlier notices of motion for orders that costs be paid by the PTUA, and also as to the extent to which his Honour could use the reasons and decision of Northrop J of 22 May 1996. To an extent, of course, that latter issue has been overtaken by the decision of the Full Court but perhaps similar questions may arise in respect of the reasons for decision of the Full Court.

The two motions came on for further preliminary hearing before Heerey J after the decision of the Full Court on the appeal. On that occasion, Transurban and City Link, in the light of the Full Court decision, made two applications:-

(1) that the motion should be adjourned to be heard by the judge hearing the new trial, and

(2) that, in any event, Heerey J should no longer hear and determine the two motions because there was a reasonable apprehension of bias arising from his Honour's participation in the Full Court hearing, and in the reasons for decision of the Full Court.

On 5 August 1997, after hearing argument in these applications, his Honour declined to refer the motions to the trial judge. His Honour ordered that the further hearing of the two notices of motions be adjourned for hearing before himself to a date to be fixed after the hearing and determination of the new trial of proceedings and reserved the question of costs of the two notices of motion to a later date. He also declined to disqualify himself. He gave reasons for these decisions.

By notice of motion dated 12 August 1997, Transurban and City Link now move the Full Court for orders that they be given leave to appeal from the whole of the interlocutory judgment and orders of Heerey J given on 5 August 1997. The draft notice of appeal indicates that if leave is granted, Transurban and City Link will seek orders allowing the appeal and setting aside the orders of Heerey J made on 4 August 1997. Substitute orders that (1) the further hearing of the two notices of motion be adjourned to be heard by the judge hearing the new trial ordered by the Full Court, (2) that Mr Mees pay the costs of and incidental to the hearing before Heerey J on 5 August 1997, and (3) that Mr Mees pay the costs of the appeal, are sought.

It appears that the notice of motion seeking leave to appeal, although filed within the time specified by O 52 r 10(2)(b) of the Federal Court Rules, was not served within the seven day period permitted. It was served on Mr Mees only on 28 August 1997. The affidavit of Leigh William Duthie of 28 August 1997 deposes to the circumstances giving rise to that failure to comply with the Rules, and seeks the leave of the Court to extend the time for serving the notice of motion until 28 August 1997. In the circumstances outlined in that affidavit, and in the absence of any evidence asserting prejudice on the part of Mr Mees by reason of the delay in serving him with the notice of motion, we have decided to grant the extension of time as requested.

Apart from the issues identified in the notice of motion and the draft notice of appeal, Mr Mees has also filed an affidavit in this matter dated 5 September 1997, seeking orders that the motion seeking leave to appeal should be refused, and additionally, that the two notices of motion of 10 April 1997 and 12 May 1997 should be dismissed with costs. It is further sought that Transurban and City Link should be directed that they may not issue any further notices of motion or other applications against him in the proceedings without first obtaining the leave of the Court. He seeks to contend by that affidavit that the notices of motion are "vexatious, frivolous and an abuse of the process" of the Court. Clearly, in order to seek this additional relief from the Court, he must also obtain leave to appeal against the orders of Heerey J, as the effect of those orders is that Heerey J will himself decide the notices of motion on a hearing date to be fixed after the determination of the new trial.

It is convenient at this point to refer to the well-known principles applicable to the grant or refusal of leave to appeal from an interlocutory judgment, as stated in Niemann v Electronic Industries Ltd [1978] VR 431 at 433. They are that such leave to appeal should be granted only if the order from which leave to appeal is sought "is attended with sufficient doubt to warrant its being reconsidered on appeal and whether substantial injustice will be caused to the applicant if the order" from which leave to appeal is sought, is allowed to stand.

Also, the orders made by Heerey J are discretionary in their nature, and consequently regard must be paid to the well-known principles enunciated in House v The King [1936] HCA 40; (1936) 55 CLR 499 at 504-505.

The applicants have provided the court with written submissions and have addressed oral arguments to us. In relation to the adjournment, the applicants have repeated the arguments addressed to Heerey J. They assert that it would be preferable for the trial judge to hear the motions after the decision of the trial, as this would be, "the most expedient and appropriate course" since:-

"the question of whether there is in existence a costs order in the appellant's favour to which the motions brought against Mr Mees as a non-party may be attached, will depend upon what orders the Judge hearing the new trial makes in respect of the costs of the first trial;..."

Heerey J, having decided that the cost order of Northrop J had been set aside by the Full Court, a decision which, as we have said, was clearly correct, expressed the view that for him to continue hearing the present application before the new trial was heard and determined would involve hearing the proceeding on a hypothetical basis. His Honour expressed the view, which is not contested, that the motions themselves should not be dismissed. Accordingly, the hearing of the motions was to be adjourned, the only question in this regard being whether the further hearing should take place before him or before the trial judge.

Having considered the applicants' submissions on this aspect of the matter, his Honour decided that the further hearing should take place before him. He gave the following reasons:-

"Having the judge hearing the new trial deal with the question of Mr Mees' liability would not be efficient because the issues raised in the application against him are quite separate from the substantive issues raised by Mr Morey against the respondents. In the application against Mr Mees the respondents have raised questions as to Mr Morey's and Mr Mees' financial positions, Mr Mees' role in the Public Transport Users' Association and Mr Mees' conduct in the preparation and running of the first trial. None of these matters will have anything to do with the new trial, which is limited to the matters directed by the Full Court."

His Honour referred also to the fact that substantial time and cost had already been expended on the matter and that as a matter of efficiency he should continue to hear it.

Nothing that has been put to us persuades us that his Honour erred in principle in taking this course rather than that advocated by the applicants. Certainly, his decision in this regard was not attended with sufficient doubt to warrant the granting of leave to appeal. Accordingly, the applicants' submission in this area of the case is rejected. We also necessarily reject Mr Mees' submission that we should deal with and dismiss the substantive motions on the ground that they are frivolous and vexatious. For this to occur it would be necessary for us to uphold the appeal from Heerey J's order, which currently requires that his Honour hear these motions himself.

Mr Mees, in fact, opposed the granting of leave to appeal from that order. We do not agree that, for reasons he advanced, we stand in the shoes of Heerey J and can, therefore, exercise his first instance jurisdiction in relation to the motions. Indeed, in the course of argument, as we understand it, Mr Mees conceded that the Full Court should not deal with the motions in the way he sought.

This leaves the question whether leave should be granted to appeal from his Honour's refusal to disqualify himself on the ground of apprehended bias. It was the applicant's submission that the principles stated by the High Court in Livesey v New South Wales Bar Association [1983] HCA 17; (1983) 151 CLR 288 required that he should do so. His Honour set out the relevant passage from the judgment at page 293 as follows:-

"That principle is that 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."

The applicants submitted to his Honour that there were four reasons why the test applied. His Honour summarised these in his judgment:-

"The first was that I was a member of the Full Court which rejected the respondents' primary submissions as to the two relevant misrepresentations alleged and concluded ... that there was a prima facie case of misleading and deceptive conduct. Secondly, the Full Court expressed a view as to the meaning of the word `utilising'... Thirdly, the Full Court said that the wrong definition of light commercial vehicle had been used in the traffic report and that an inference ought to be drawn from the non-production of the report by the respondents... Fourthly, there were expressions of disapproval, both in the Full Court judgment and by myself as recorded in the transcript of argument, as to the non-production of the report."

These reasons were also relied on in this application. We were taken to the relevant material, particularly passages in the judgment of the Full Court and in the transcript of the hearing, where some criticism was voiced as to the conduct of the appellants in the hearing before Northrop J. It is clear that during the submission to him that he should disqualify himself, his Honour was also taken to these passages. His Honour said of these submissions:

"I am not satisfied that these matters, either individually or in combination meet the standard laid down in Livesey."

After consideration of this material, we are satisfied that no sufficient doubt attends his Honour's decision in this regard, such as to warrant its reconsideration by a Full Court. Indeed, it is considered that the passages are not capable of raising the required reasonable apprehension, see In re Morling; Ex parte Australian Meat Industry Employees Union (1986) 60 ALJR 402 per Dawson J, confirmed by Full Court of High Court, in In re Morling; Ex parte Australian Meat Industry Employees Union [No 2] (1986) 60 ALJR 526 per Mason J (as he then was).

However, other submissions were put to us by the appellants based upon other portions of his Honour's judgment. It is convenient to deal with these by considering those portions of the judgment in sequence. First, his Honour said immediately after the sentence last referred to:-

"I note that during the earlier course of the application against Mr Mees it was mentioned to the parties that I was to be a member of the Full Court which would hear the appeal. No objection was taken either to me continuing to hear the application against Mr Mees or being a member of the Full Court."

This was said to indicate that his Honour had taken into account an irrelevant consideration which could vitiate the exercise of his discretionary judgment. It was said to be irrelevant because no objection could reasonably have been taken before the Full Court hearing and decision. It cannot be accepted that the observation was irrelevant. It at least indicated that the applicants raised no objection to Heerey J sitting in the Full Court to hear the appeal while at the same time hearing the non-party cost application. This was a matter which the reasonable observer might take into account in all the circumstances, at least peripherally, on the question of the judge's impartiality.

However, more significantly, we consider that the observation is not, as a matter of construction of his Honour's judgment, part of the substance of it. He had already dealt with and rejected the only submissions that had been put to him on the Livesey test. Clearly, the appellants relied on nothing else. We are unable to accept the submission that in some unacceptable way this consideration guided or influenced his Honour's judgment on those submissions. Heerey J continued by stating that the issues in the cost application were distinct from those in the appeal. This was so. We do not understand that any exception was taken to this portion of the judgment, and to the two sentences that follow and which are connected with it. His Honour then said that portion of the judgment of Mason J in Re J.R.L.; Ex parte C.J.L. [1986] HCA 39; (1986) 161 CLR 342 at 352 was applicable. The passage reads as follows:-

"It seems that the acceptance by this Court of the test of reasonable apprehension of bias in such cases as Watson and Livesey has led to an increase in the frequency of applications by litigants that judicial officers should disqualify themselves from sitting in particular cases on account of their participation in other proceedings involving one of the litigants or on account of conduct during the litigation. It needs to be said loudly and clearly that the ground of disqualification is a reasonable apprehension that the judicial officer will not decide the case impartially or without prejudice, rather than that he will decide the case adversely to one party. There may be many situations in which previous decisions of a judicial officer on issues of fact and law may generate an expectation that he is likely to decide issues in a particular case adversely to one of the parties. But this does not mean either that he will approach the issues in that case otherwise than with an impartial and unprejudiced mind in the sense in which that expression is used in the authorities or that his previous decisions provide an acceptable basis for inferring that there is a reasonable apprehension that he will approach the issues in this way. In cases of this kind, disqualification is only made out by showing that there is a reasonable apprehension of bias by reason of prejudgment and this must be `firmly established': Reg. v. Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group; Watson,; Re Lusink; Ex parte Shaw. 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."

The applicants make these submissions founded upon the judge's inclusion of this passage in his judgment. First, it is put that his Honour misdirected himself and applied the wrong test of apparent bias by looking to the likelihood, rather than the possibility, of such bias. This submission appears to be based upon the use of the phrase "reasonable apprehension that the judicial officer will not decide the case impartially", and the suggestion that Heerey J inappropriately accepted this expression as indicating the necessary degree of satisfaction of apprehended bias. We are not persuaded that his Honour so erred. As we have previously observed, his Honour stated the Livesey test and clearly applied it. Moreover, the paragraph immediately preceding the paragraph quoted from J.R.L. repeats and affirms the Livesey test, citing the case itself. It is obvious that his Honour did not misdirect himself by assuming that there had been any alteration to that test.

Secondly, it was submitted that Heerey J appears to have misconceived the appellants' application as one founded upon an apprehension that the judge would prejudge the issues on the cost motion, this not being the way in which it had been put. We reject this submission. It is clear from the judgment, as we have said, that his Honour considered and rejected the applicants' submissions and did not fail to comprehend the nature of the application. The reference in the cited passage to "bias by reason of prejudgment" does not arguably, in our view, indicate that his Honour mistook the basis of the appellants' application. We are persuaded that his Honour included the passage mainly to emphasise what is indeed a major message in it, that judges should not too readily disqualify themselves because of prior involvement in litigation involving one of the parties in cases before them. The appellants, in their written submission, submitted that substantial injustice within the meaning of the Niemann principles could be occasioned to them. The matter was not raised in oral submissions and it has not been satisfactorily demonstrated that substantial injustice would occur. For these reasons we dismiss the application for leave. In all the circumstance we have come to the conclusion that there should be no order as to costs.

I certify that this and the preceding nine (9) pages are a true copy of the Reasons for Judgment herein of the Court.

Associate:

Dated: 18 March 1998

Counsel for the Appellants:	Mr T.J.P. Walker
Solicitor for the Applicant:	Baker & McKenzie
The respondent appeared in person
Date of Hearing:	18 March 1998
Date of Judgment:	18 March 1998