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High Court of Australia |
THE QUEEN v. WATSON; Ex parte ARMSTRONG [1976] HCA 39; (1976) 136 CLR 248
Courts and Judges
High Court of Australia
Barwick C.J.(1), Gibbs(1), Stephen(1), Mason(1) and Jacobs(2) JJ.
CATCHWORDS
Courts and Judges - Bias - Prejudgment of issue in pending litigation - Writ of prohibition - Superior court of record - Family Court of Australia - The Constitution (63 & 64 Vict., c. 12), s. 75 (v.) Family Law Act 1975 (Cth), s. 21 (2).
HEARING
Sydney, 1976, June 8; August 3. 3:8:1976DECISION
August 3.
2. The proceedings were commenced in the Supreme Court of New South Wales by
the wife, who sought dissolution of the marriage and,
inter alia, a settlement
in a lump sum of $182,500. The petition was served on the husband on the 25th
November 1975. Injunctions,
the nature of which is not quite clear, were
granted in the Supreme Court on 15th and 30th March 1976. The wife filed three
affidavits
(sworn respectively on 22nd March 1976, 22nd March 1976 and 26th
March 1976) in which she deposed in some detail as to her husband's
assets,
whose value she stated was of the order of $15,000,000, as to her own assets,
expenses, mode of life and needs and as to
the relationship between her
husband and herself throughout the marriage. In one of the affidavits sworn on
22nd March she claimed
to be entitled to $2,000,000 by way of settlement or as
a lump sum representing maintenance. In that affidavit she swore that she
did
not previously claim the amount to which she believed she was entitled because
her husband had said to her, before she issued
her petition, "If you claim a
substantial sum from me I will destroy you in Court and you won't live to
enjoy the money." (at p251)
3. On 12th April 1976 the proceedings were transferred to the Family Court
and on 20th April the matter came before Watson J. His
Honour then intimated
that he would commence the hearing of the proceedings on 25th May 1976 and
raised the question when information
would be supplied by the husband as to
his financial affairs in accordance with reg. 98 of the Family Law Regulation
and accepted
counsel's advice that an affidavit would be filed by 27th April.
His Honour also said that he wished to have from the wife on affidavit
"details of her financial position, her working capacity, her usual way of
life in the twenty-four months before she was married
to Mr. Armstrong". No
request for evidence of this kind had been made by counsel for the husband but
no objection to supplying it
was made by counsel for the wife at the time when
the learned judge requested it. The further hearing of the matter was then
adjourned
to 30th April 1976 for directions. (at p251)
4. On 27th April 1976 the husband filed a statement of financial
circumstances in the form prescribed by the Family Law Regulations
(form 19).
This showed assets estimated at a little over $600,000 and liabilities
exceeding $845,000. No particulars of these assets
or liabilities were given
and to some questions, particularly as to the husband's real estate and as to
his other property, the answer
given was "N.R." (Not Relevant). On 28th April
1976 the husband made the wife an open offer to forgive debts said to be owed
by her
to him, to cause to be paid debts said to be owed by her to certain
companies and to pay her a lump sum of $300,000. The debts apparently
were
said to total $195,000. The offer stated that the lump sum would be borrowed
and would not come from the husband's personal
assets. The offer has not been
accepted. (at p252)
5. On 30th April 1976 the matter again came before Watson J. His Honour
stated that he had seen an affidavit filed by the wife in
compliance with the
direction given on 20th April. That affidavit is not before this Court but it
apparently contained an objection
to the direction which his Honour had given
requiring the affidavit to be filed. Watson J. said that he rejected the
affidavit on
two grounds, first because he regarded certain paragraphs
(apparently those incorporating the objection) as offensive, and secondly
because although, as he had required, the affidavit dealt with the two years
before the marriage, it appeared that the wife had for
about five years before
the marriage (which was celebrated in 1963) lived with the husband as his
mistress. His Honour said that
he thought that there should be on the file
material indicating the wife's financial position and economic capacity before
she became
associated with the husband, and that he should know something of
her background prior to her marriage. He said that he did not propose
to allow
anybody to rely upon the wife's affidavit and requested that a further
affidavit be filed dealing with her financial position
and financial capacity
until twelve months before she formed a permanent relationship with the
husband, or (as his Honour also stated
it) before she was able to rely on him
for any financial benefits. His Honour then proceeded to deal with other
matters, including
the delivery of interrogatories. (at p252)
6. There were four further appearances before Watson J. before 24th May 1976
and various interlocutory questions were dealt with.
It is unnecessary for
present purposes to do more than state shortly the position which the
proceedings had reached immediately before
24th May. On 14th May the wife had
apparently filed a further affidavit (which is not before this Court, but
which she described
as "an extensive and detailed affidavit setting out my
husband's assets which I estimated to be worth some $10,000,000 to
$15,000,000").
On the same day the husband had sworn what appears to be the
only affidavit so far filed on his behalf as to his financial position.
The
affidavit dealt largely with the property owned by a company called Alexmar
Investments Pty. Ltd. and by a number of other companies
which were
subsidiaries of that company. The affidavit showed that these companies held
assets of very considerable value but it
was stated that most of the shares in
Alexmar Investments Pty. Ltd. were held by the husband and by a holding
company as trustees
of family trusts for the benefit of the husband's children
and remoter issue. It was also stated in the affidavit that further material
would be filed as to two other companies, Aurelius Investment Establishment
and Trident Ltd., which it appears from affidavits filed
by the wife are
incorporated outside Australia. The affidavit did not purport to set out the
assets and liabilities of the husband
himself. The husband had also filed an
affidavit as to the wife's standard of living. In addition he had filed an
affidavit of discovery
which, however, the wife contends is quite
insufficient. The wife had delivered to the husband lengthy interrogatories
but these
had not been answered; however, when, as will be mentioned, the
matter came before the Court on the afternoon of 24th May draft answers
to
about half the questions asked were handed to the wife's legal advisers.
According to the wife, the documents to which she has
had access show that the
husband's financial transactions were on a large scale and of very great
complexity and this statement hardly
seems open to question. She alleged that
large sums had been remitted abroad and that the husband had created at least
thirty-seven
trusts, some of which she said that she proposes to attempt to
set aside. On 20th May 1976 an examination by the wife's legal advisers
of a
letter produced by the Reserve Bank had revealed that a firm of solicitors,
who stated that they were acting on behalf of the
husband as well as on behalf
of two of his daughters, had said that the husband was contemplating leaving
Australia at about the
end of April with a view to taking up residence in
Austria. Thereupon the wife obtained from Watson J., by telephone, an
injunction
restraining the husband from completing certain sales referred to
in the letter. The consideration for one of these sales exceeded
$4.8 million
and the consideration for another exceeded $3.1 million. (at p253)
7. At 10 a.m. on 24th May the matter was again brought before Watson J.
Counsel for the wife then drew his Honour's attention to
the fact that the
interrogatories had not been answered and submitted that the affidavit of
discovery was illusory. The intention
of counsel was apparently to seek an
adjournment of the hearing listed for the following day. In the course of
argument as to the
alleged failure of the husband to disclose his full
financial position the following passage occurred:
"HIS HONOUR: ... I would not at this stage accept theLater there was some discussion as to the right of counsel to inspect certain documents which had been produced but which the learned trial judge declined to allow counsel to inspect at that stage. Counsel for the wife said: "At this rate if I may say so, the wife is never going to be in a position to present a case. The husband has successfully defied every order of this court." His Honour replied:
broad proposition that s. 75 automatically requires the Court
to trace down before every trial the complete financial records
between spouses. All s. 75 obliges the Court to do is to have
regard to the income, property and financial resources of
each of the parties.
If one of the parties does not put in issue his capacity to
meet a reasonable order, or even a quite generous order by
the Court and it says they have that capacity to meet it, and
if, secondly, the Court accepts that admission, and I underline
that because the Court may not, and I certainly would not in
this case accept any admission without corroboration on
either side - let me say on this point, in amplification of what
I have said, it might assist you in handling this matter, I
propose to conduct this case having regard to the
inadequacies of both sides of the case upon the basis I will not find
in my own mind that I am satisfied on either side unless
there is corroboration of a particular matter. That will mean
that there will be no great value to either counsel in
cross-examination of credit because credit is a non-event in this
case.
MR. GRUZMAN (Counsel for the wife): I can only say with
respect I do not accept that so far as may client is concerned.
HIS HONOUR: One great problem that goes to your client's
credit Mr. Gruzman, and there is authority for this in Selby
J.'s judgment some years ago where a spouse makes out an
entirely different set of claims which are set out in her
petition which might be described in the category of
moderately generous in her own view and another set later on which is
so far beyond that you wonder whether you have the same
case before you. When both are made on oath it presents a
threshold problem of credit, exactly the same as the conduct
of the respondent here which I think, to put it at its lowest, is
the combination of companies.
MR. COLLINS (Counsel for the husband): I would like you
to hear me on the interrogatories.
HIS HONOUR: I simply as the judge of the facts in this
matter propose to proceed on the basis that credit is a
non-issue because I require corroboration of any issues. I have to
be satisfied on that."
"When you say present a case Mr. Gruzman, this willHe then outlined the procedure that he proposed to follow on the following day and added: "We do the best we can as we can and look upon this procedure, at this stage until we have all the information in, look upon it generally as an inquiry rather than an adversary procedure." As to the complaint that the interrogatories had not been answered, his Honour proposed that when the proceedings commenced on the following day the evidence of the wife should be concluded and that the husband should then go into the witness box and answer the interrogatories on oath. He said that if that meant that counsel would then have to apply for an adjournment because of lack of material, that could be dealt with as it arose. (at p255)
sound a strange comment but the proceedings in this Court
are not strictly adversary proceedings. The matter in which
I am involved is more in the nature of an inquiry, an
inquisition followed by an arbitration. If it is an inquiry
into the available funds of both parties, there is no such thing
as your client's case and Mr. Armstrong's case. There is a
general inquiry."
8. In the afternoon of 24th May the matter was again brought before Watson J.
Counsel for the wife said that the comments made by
his Honour during the
course of the morning's proceedings were such as to lead him to submit that
the case could not properly be
tried before his Honour. He advanced a number
of grounds in support of this contention but it is unnecessary to recapitulate
his
arguments. It should, however, be mentioned that when counsel submitted
that the effect of what his Honour had said was that neither
party was
entitled to any credit in the proceedings his Honour said:
"I did not say that. What I did say, having regard to theCounsel said that he had thought that his Honour had said that credit was a non-issue, and his Honour said:
nature of your client's application on one side, and the
variations of applications, and having regard to the way the
respondent had conducted his case to date, it was my view in
any matter about which my mind has to be satisfied on either
side, I would require corroboration of any particular fact,
which is (semble not) entirely what you have just put to me."
"I might have used the words non-issue. What I intendedHis Honour rejected the submission that he should not hear the case. Counsel for the wife then applied for an adjournment which was at that stage refused, his Honour saying that the application could be repeated on the following morning. (at p256)
to say is namely where I have to satisfy my own mind in the
issue I would require corroboration of the issue; I would
have thought in the circumstances that credit may have been
a non-issue."
9. On 25th May the matter was called on but Watson J., in proper compliance
with the order nisi for prohibition, which had been
made in the meantime,
declined to proceed further. Counsel for the husband suggested that the matter
be transferred to another judge
but Watson J. informed the parties that this
was not possible because every other judge in Sydney had had some connexion
with one
or other of the parties in the past. (at p256)
10. According to an affidavit filed on behalf of the wife, Watson J., when
dealing with another matter later on 25th May, mentioned
the fact that an
order for prohibition had been made and said: "They have prohibited me - I
think it is something about calling a
character witness from Paraguay." The
wife said that she believed that the reference was to Alexander Barton, who,
as was notorious,
had been engaged in litigation with the husband and who is
said to be a fugitive in Paraguay. The wife said that she believed that
his
Honour's comment suggested that in his opinion her creditworthiness is such
that she would propose to call Barton as a witness
to her character. It may be
said immediately that the deponent to this affidavit was not sure of the words
actually used and that
it is so utterly unlikely that the learned judge
thought that the prohibition had anything to do with calling a witness from
Paraguay
that this evidence should be ignored. It would have been better if so
insubstantial a piece of evidence had not been introduced.
(at p256)
11. The first ground on which prohibition is sought can be dealt with quite
shortly. It is based on the directions of the learned
judge that the wife
should file an affidavit as to her financial position at the time before she
was first supported by the husband.
She claims that because the husband was a
party to the litigation with Barton, which attracted much publicity, she had
become well
known to the public and that there were a number of vicious and
unfounded rumours concerning her life before her marriage. The suggestion
made
on her behalf is that the learned judge had heard these rumours and was
prompted by them to make the orders that he did. This
suggestion is completely
without foundation. There is no evidence even that the learned judge had heard
any such rumours, let alone
that he had acted upon them. One of the matters to
be taken into account in proceedings with respect to the maintenance of a
party
to a marriage, and which may if relevant be taken into account in
proceedings for an order for the settlement of property, is the
physical and
mental capacity of the wife for appropriate gainful employment (see the Family
Law Act 1975, s. 75 (2) (b); s. 79 (4)
(d), and see s. 72). It was
understandable that the learned judge should have thought that evidence as to
the manner in which the
wife had supported herself
at an earlier time would
prove relevant to the question of her present capacity for gainful employment.
It was also understandable
that he should intimate that evidence of that kind
should be available, for he was concerned to shorten,
if he could, what
promised
to be a lengthy proceeding, and the Act declares that it is the duty
of the Court to endeavour to ensure
that proceedings are not
protracted - s.
97 (3) . These considerations sufficiently explain the directions which the
wife now suggests
were due to bias. That suggestion should
be entirely
rejected. (at p257)
12. What has been said does not indicate approval of the course taken by the
learned judge. It is quite unnecessary to consider
whether he had power to
direct the wife to file the affidavit, but assuming that he had such power it
was perhaps unwise to exercise
it on his own motion and by giving a direction
in the terms which he used. If it had seemed to him that the wife's advisers
might
overlook the need to adduce relevant material, it would have been quite
unobjectionable for him to have drawn their attention to
the need for it. When
the wife did file an affidavit, it was premature for the learned judge to
reject it when no one was attempting
to read it, and in any case the affidavit
was not rendered inadmissible simply because it did not contain all the
information which
the learned judge thought was necessary. These matters do
not lend support to a charge of bias, but the active intervention of the
learned judge in this way at this interlocutory stage was consistent with his
remark that the proceedings were not adversary proceedings
but were in the
nature of an inquisition followed by an arbitration. It is impossible to allow
that observation to pass uncorrected.
It indicated a basic misconception as to
the position of the Court in proceedings of this kind under the Family Law Act
1975. Proceedings
in which a wife seeks an order for maintenance or the
settlement of property may involve a dispute as to property of
great value
and
will often be bitterly contested on both sides. The order made determining
such proceedings may be of the utmost
importance to
the future of both
parties. The judge called upon to decide proceedings of that kind is not
entitled to do what has
been described
as "palm tree justice". No doubt he is
given a wide discretion, but he must exercise it in accordance with legal
principles,
including
the principles which the Act itself lays down (in such
sections as ss. 43, 72, 75 and 79, whichever may be applicable). He must also
follow the procedure provided by the law. The provisions of s. 97 (3) of the
Act, which require him to proceed without undue formality,
do not authorize
him to convert proceedings between parties
into an inquiry which he conducts
as he chooses. The provisions of reg.
108 (2) , which enable the court "with
the consent of the
parties to the proceedings" to dispense with such
procedures and formalities
as it thinks fit, show that without such consent
the
Court has no such dispensing power. A judge can neither deprive a party of
the
right to present a proper case nor absolve a party
who bears the onus of
proof from the necessity of discharging it. These remarks
are not intended to
fetter a judge of the Family
Court in the exercise of a proper discretion or
to insist upon the observance of
unnecessary formality; they are designed to
make
it clear that a judge of the Family Court exercises judicial power and
must discharge
his duty judicially. (at p258)
13. It is then necessary to turn to the second ground on which prohibition is
sought, namely, that the learned judge has prejudged
the wife's credit to her
disadvantage. This ground in substance also alleges bias - not of course bias
through interest, nor by reason
of relationship, friendship or enmity, but
bias "by reason of some pre-determination he has arrived at in the course of
the case":
per Isaacs J. in Dickason v. Edwards [1910] HCA 7; (1910) 10 CLR 243, at p 260 .
In stating that there was actual bias in this sense,
the wife
has gone further
than she needs to go,
and, as some would say, further than it was right for
her to go. It is clear that
to disqualify
a judge from sitting it is not
necessary
that it should be shown that he was in fact biased. There has,
however, been
a difference
of opinion as to the test that should be
applied
when bias is suggested. One view is that it is necessary for the person
seeking
prohibition to show that "there is a real
likelihood that the judge
would, from kindred or any other cause, have a bias in
favour
of one of the
parties": per Blackburn J.
in Reg. v. Rand (1866) LR 1 QB 230, at p 233 ; the
other view is that it is enough
that
the judge could "reasonably be suspected
of being biassed": per Lord Esher M.R. in Allinson v. General Council of
Medical Education
and Registration (1894) 1 QB 750, at p
759 . Sometimes these
two tests have been applied in conjunction. It would serve no useful
purpose
to cite the many authorities in
which one view or the other has been espoused.
Some of those authorities were reviewed in
Reg. v. Camborne Justices; Ex parte
Pearce
(1955) 1 QB 41, at pp 47-51 , where it was held that it is necessary
for the applicant
to show a real likelihood of bias. The same
view was taken
in Reg. v. Barnsley Licensing Justices; Ex parte Barnsley and District
Licensed Victuallers' Association (1960) 2
QB 167, at p 187 where Devlin L.J.
said that it is immaterial what impression might have
been left on the minds
of the applicants
or of the public generally, and that it was not enough that
an impression that the tribunal
had been biased might reasonably get
abroad.
However, in Metropolitan Properties Co. (F.G.C.) Ltd. v. Lannon (1969) 1 QB
577 the
Court of Appeal again considered this
question and did not accept the
statement of the law in those two decisions. Lord Denning M.R.
commenced his
discussion by citing
the oft-repeated saying of Lord Hewart C.J. in R. v.
Sussex Justices; Ex parte McCarthy (1924)
1 KB 256, at p 259 : "It is not
merely
of some importance, but is of fundamental importance that justice
should not only be done,
but should manifestly and undoubtedly
be seen to be
done." After saying that he stood by that principle, Lord Denning M.R.
continued
(1969) 1 QB, at p 599 :
"... in considering whether there was a real likelihood ofDanckwerts L.J., who dealt with the matter quite shortly, appears to have accepted that it would be enough to justify the court's interference if a person knowing the circumstances might reasonably feel doubts as to the tribunal's impartiality (1969) 1 QB, at p 602 . Edmund Davies L.J. was clearly of the view that the court should interfere if it considered that it would appear to right-thinking people that there were solid grounds for suspecting that a member of the tribunal responsible for the decision may (however unconsciously) have been biased (1969) 1 QB, at p 605 . He expressed his conclusions as follows (1969) 1 QB, at p 606 :
bias, the court does not look at the mind of the justice himself
or at the mind of the chairman of the tribunal, or whoever it
may be, who sits in a judicial capacity. It does not look to
see if there was a real likelihood that he would, or did, in fact
favour one side at the expense of the other. The court looks
at the impression which would be given to other
people. Even if he was as impartial as could be, nevertheless
if right-minded persons would think that, in the
circumstances, there was a real likelihood of bias on his part,
then he should not sit. And if he does sit, his decision
cannot stand. ... Nevertheless there must appear to be a
real likelihood of bias. Surmise or conjecture is not enough
.... There must be circumstances from which a reasonable
man would think it likely or probable that the justice, or
chairman, as the case may be, would, or did, favour one side
unfairly at the expense of the other. The court will not
inquire whether he did, in fact, favour one side
unfairly. Suffice it that reasonable people might think he
did. The reason is plain enough. Justice must be rooted in
confidence: and confidence is destroyed when right-minded
people go away thinking: 'The judge was biased.'"
"With profound respect to those who have propounded theIt has since been doubted whether in practice materially different results would follow from the adoption of one test rather than another: see Hannam v. Bradford Corporation (1970) 1 WLR 937, at pp 942, 949; (1970) 2 All ER 690, at p 700 . No doubt in many cases it will be immaterial which test is applied, but that is not universally true, as Edmund Davies L.J. pointed out in the passage already cited from Metropolitan Properties Co. (F.G.C.) Ltd. v. Lannon (1969) 1 QB, at p 606 . It has also been said that the "two tests are often overlapping and it may be that one is appropriate to one situation and another is appropriate to another situation": Reg. v. Altrincham Justices; Ex parte Pennington (1975) 1 QB 549, at pp 553-554 . However that may be, the judgments of the Court of Appeal in Metropolitan Properties Co. (F.G.C.) Ltd v. Lannon provide authority for the proposition that if there is a reasonable suspicion of bias against a judge that is enough to warrant the court's interference. (at p260)
'real likelihood' test, I take the view that the requirement that
justice must manifestly be done operates with undiminished
force in cases where bias is alleged and that any development
of the law which appears to emasculate that requirement
should be strongly resisted. That the different tests, even
when applied to the same facts, may lead to different results
is illustrated by Reg. v. Barnsley Licensing Justices (1960) 2 QB 167
itself, as Devlin L.J. made clear in the passage I have
quoted. But I cannot bring myself to hold that a decision
may properly be allowed to stand even although there is
reasonable suspicion of bias on the part of one or more
members of the adjudicating body."
14. In Australia there has been a similar conflict of authority, and it has
been similarly resolved. In Dickason v. Edwards both
O'Connor J. (1910) 10
CLR, at p 256 and Isaacs J. (1910) 10 CLR, at pp 258-260 accepted that the
principle was correctly stated
by Lord Esher M.R. in Allinson v. General
Council of Medical Education and Registration (1894) 1 QB, at p 759 . The same
principle
was followed and applied by the Full Court of New South Wales in Ex
parte Schofield; Re Austin (1953) 53 SR (NSW) 163, at pp 165,
167, 168 , a
case in which prohibition was granted where a magistrate had, in an earlier
case, expressed strong views as to the credibility
of two persons who had been
the defendants in that case and were the complainants in the later proceedings
in which prohibition was
sought. Herron J. said that the circumstances in
which the magistrate dealt with the later proceedings "could give rise to a
suspicion
in the mind of a passer-by that the cases had been predetermined by
the Court, and that a fair hearing was not able to be obtained"
(1953) 53 SR
(NSW), at p 168 . However, later in the same year this Court in Reg. v.
Australian Stevedoring Industry Board; Ex parte
Melbourne Stevedoring Co. Pty.
Ltd. [1953] HCA 22; (1953) 88 CLR 100 held that a delegate of the Australian Stevedoring
Industry
Board was not disqualified
from holding an inquiry because he had
made
some comments from which it might well have been inferred
that he had
prejudged some
aspects of the case. Dixon C.J. and Williams,
Webb and Fullagar
JJ. said in their joint judgment (1953)
88 CLR, at p 116 :
"But when bias of this kind is in question, as distinguishedThe learned justices in that case appear to have considered that to warrant the grant of prohibition it is necessary that there should be shown a real likelihood of bias, and that the fact that reasonable persons would distrust the result is evidence of, or perhaps a consequence of, that likelihood. However, if doubts were left by that decision as to the correct approach to this question, they were removed by Reg. v. Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group [1969] HCA 10; (1969) 122 CLR 546 . In that case it was again submitted that observations made by the tribunal against which prohibition was sought suggested that it had prejudged the issue. It was held that the expression of an attitude of mind by members of the Commonwealth Conciliation and Arbitration Commission on a matter of principle would not justify a reasonable apprehension that those members might not bring fair and unprejudiced minds to the resolution of the question arising before them. In a joint judgment, delivered by all seven members then constituting the Court, it was said (1969) 122 CLR, at pp 553-554 :
from a bias through interest, before it amounts to a
disqualification it is necessary that there should be strong
grounds for supposing that the judicial or quasi-judicial
officer has so acted that he cannot be expected fairly to
discharge his duties. Bias must be 'real'. The officer must
so have conducted himself that a high probability arises of a
bias inconsistent with the fair performance of his duties, with
the result that a substantial distrust of the result must exist
in the minds of reasonable persons. It has been said that
'preconceived opinions - though it is unfortunate that a judge
should have any - do not constitute such a bias, nor even the
expression of such opinions, for it does not follow that the
evidence will be disregarded', per Charles J., Reg. v. London
County Council; Ex parte Empire Theatre (1894) 71 LT 638, at p 639 ."
"The common law principles of natural justice are wellIn later cases, in the Supreme Courts of some of the States, it has been accepted that prohibition will lie to a tribunal which in all the circumstances may be reasonably suspected of bias: Ex parte Qantas Airways Ltd.; Re Horsington (1969) 1 NSWR 788, at pp 790-791 ; Reg. v. Peacock; Ex parte Whelan (1971) Qd R 471 ; Ewert v. Lonie [1972] VicRp 32; (1972) VR 308, at p 313 . (at p262)
understood though they have been variously expressed. It is
sufficient here in relation to that aspect of those principles
which is called in aid by the applicant to recall the well
known passages from Allinson v. General Council of Medical
Education and Registration (1894) 1 QB 750 , as cited and commented
upon by Isaacs J. in Dickason v. Edwards [1910] HCA 7; (1910) 10 CLR 243, at p 258 ,
and from R. v.
Sussex Justices; Ex parte McCarthy (1924) 1 KB 256 . A recent
exposition is to be found in the judgment of the Master of the Rolls
in Metropolitan Properties Co. (F.G.C.) Ltd. v. Lannon (1969) 1 QB 577 .
Those requirements of natural justice are not infringed by a
mere lack of nicety but only when it is firmly established that
a suspicion may reasonably be engendered in the minds of
those who come before the tribunal or in the minds of the
public that the tribunal or a member or members of it may
not bring to the resolution of the questions arising before the
tribunal fair and unprejudiced minds. Such a mind is not
necessarily a mind which has not given thought to the
subject matter or one which, having thought about it, has not
formed any views or inclination of mind upon or with respect
to it."
15. The view that a judge should not sit to hear a case if in all the
circumstances the parties or the public might reasonably suspect
that he was
not unprejudiced and impartial, and that if a judge does sit in those
circumstances prohibition will lie, is not only
supported by the balance of
authority as it now stands but is correct in principle. It would be wrong to
regard the observations
of Lord Hewart C.J. in R. v. Sussex Justices; Ex parte
McCarthy (1924) 1 KB, at p 259 as meaning that the appearance of justice
is
of more importance than the attainment of justice itself: cf. Reg. v. Camborne
Justices; Ex parte Pearce (1955) 1 QB, at p 52
. However, his statement of
principle, which was recently reaffirmed in this Court in Stollery v.
Greyhound Racing Control Board
[1972] HCA 53; [1972] HCA 53; (1972) 128 CLR 509, at pp 518-519 does go to
the heart of the matter. It is of fundamental importance that the public
should have
confidence in the administration of justice. If fair-minded people
reasonably apprehend or suspect that the tribunal
has prejudged
the case, they
cannot have confidence in the decision. To repeat the words of Lord Denning
M.R. which have already
been cited, "Justice
must be rooted in confidence: and
confidence is destroyed when right-minded people go away thinking: 'The judge
was biased.'" (at
p263)
16. Of course under the general law prohibition was not directed to a
superior court. By the Family Law Act 1975 the Family Court
of Australia is
declared to be a superior court of record: s. 21 (2) . Such a declaration
would not in itself mean that prohibition
would not lie to that Court:
Attorney-General (Q.) v. Wilkinson
[1958] HCA 21; (1958) 100 CLR 422, at p 431 . However, it
is in
any case firmly
established that under s. 75 (v.) of the Constitution
prohibition will lie to a judge of a tribunal set up by the Commonwealth
Parliament notwithstanding that it is declared to be a superior
court: see the
authorities cited in R. v. Commonwealth Court of Conciliation and Arbitration;
Ex parte Ozone Theatres (Aust.) Ltd.
[1949] HCA 33; (1949) 78 CLR 389, at p 399 . It was not
in the present case doubted that prohibition would lie to a judge of the
Family Court. (at
p263)
17. The fact that prerogative writs did not lie to a superior court did not
mean that the rule that a judge who might reasonably
be suspected of bias
should not hear the cause was not applicable to superior courts; it meant only
that a particular remedy was
not available to redress a departure from the
rules of natural justice if it occurred in a superior court. It would be
absurd to
suggest that the administration of justice should be less pure in a
superior than in an inferior court, or that the confidence upon
which justice
rests is less necessary in the case of the former than in the latter. The rule
that a judge may not sit in a cause
in which he has an interest has been
applied to the most eminent of judicial officers: Dimes v. Proprietors of the
Grand Junction
Canal [1852] EngR 789; [1852] EngR 789; (1852) 3 HLC 759 (10 ER 301) . In the same way, the rule
that a judge may not sit to hear a case if it might reasonably be
considered
that he could not bring a fair and unprejudiced mind to the decision applies
to every court in Australia, subject only
to the exceptions
(statutory
authority, necessity and waiver), mentioned by Isaacs J. in Dickason v.
Edwards (1910) 10 CLR, at pp
259-260 none of
which has any application to the
present case. (at p264)
18. It remains, then, to apply these principles in the circumstances of the
present case. The question is not whether there was
a real likelihood that
Watson J. was biased. The question is whether it has been established that it
might reasonably be suspected
by fair-minded persons that the learned judge
might not resolve the questions before him with a fair and unprejudiced mind.
(at p264)
19. The remarks on which the wife's submission was founded were made during
argument in an interlocutory proceeding. One must be
careful not to exaggerate
the importance of remarks of that kind. During the course of argument a judge
will often follow the common,
and sometimes necessary, course of formulating
propositions for the purpose of enabling their correctness to be tested, and
as a
general rule anything that a judge says in the course of argument will be
merely tentative and exploratory. However, a fair-minded
observer would have
been justified in thinking that the remarks of the learned trial judge in the
present case were not of that description.
He expressly said that he thought
it might assist counsel in handling the matter to know that he would not
accept the evidence of
either party - or even an admission - unless it were
corroborated. He repeated, and gave reasons for, his rejection of the credit
of both parties. He adhered to his statements even after it had been submitted
that he should decline to hear the proceedings further.
No doubt he had read
and considered the affidavits already filed, but he had not seen either party
in the witness box, and the matters
which led him to hold that he could not
believe them had not been fully examined either in evidence or in argument. It
hardly needs
to be said that he was not at that stage entitled to form the
settled view that neither party was worthy of credit, or to impose
on them
both the extra-legal requirement that their evidence must be corroborated, but
a reasonable observer would have been justified
in thinking that he had done
so. (at p264)
20. As the cases show, there are some matters on which a judge may have
preconceived opinions, and yet be qualified to sit, but
speaking generally the
credit of an essential witness, where the case may turn on credibility, is not
one of them. It is apparent
from the facts that have been recited that it is
possible, if not probable, that an assessment of the credit of the witnesses
may
play an important part in the resolution of the proceedings between the
husband and the wife. This has indeed already been shown
by the fact that the
learned judge has drawn an inference adverse to the wife because she has
greatly increased the amount which
she has claimed. Clearly no such inference
could be drawn from the mere fact that she had increased her claim if it was
true that,
as she said, she had in the first place been influenced by her
husband's threats to claim less than she believed was her entitlement,
but in
any case the statement of the amount which she sought by way of settlement or
maintenance was only a claim and, although verified,
was not a sworn assertion
as to a statement of fact, so that the increase in the amount claimed can
hardly affect her credibility.
Further, the extent of the husband's assets
appears to be an important issue in the proceedings. The question whether sums
of between
$1,000,000 and $2,000,000 placed to the credit of funds in
Switzerland and Liechtenstein are in fact the property of the husband
may
depend on whether the evidence of the husband or of the wife is believed. As
to this matter the wife said in her affidavit:
"Because of the manner in which Anstalts is (sic) createdThis passage was very clumsily expressed. Obviously the wife could not complain if she were treated equally with her husband. However, what she may have intended to say, and what at any rate is true, is that if it were necessary for her credit to be accepted to enable her to succeed in proving that the property was that of her husband, she would be gravely prejudiced if she were disbelieved in advance, even if the husband were disbelieved as well. (at p265)
and transferred the determination of this question may rest
solely on credit. I believe that numerous major issues will
emerge in which my credit may be a determining factor.
I believe that if His Honour puts my credit on no higher
basis than my husbands credit, I am gravely prejudiced
before the taking of evidence has commenced."
21. It was said that there was no bias because the judge had formed an equal
distrust of both parties. The formation of a preconceived
opinion that neither
party is worthy of belief amounts to bias in the sense in which that word is
used in a number of the authorities
already cited. To form such an opinion is
to predetermine one of the issues in the case, and may operate unfairly
against one party,
even though both are discredited. A prejudice against the
credit of both parties will not necessarily damage both parties equally.
It
will prove more damaging to that party who wishes to establish a fact by means
of his or her own unsupported evidence. A party
who believes, on reasonable
grounds, that the judge has decided, in advance, to disbelieve her evidence
cannot have confidence in
the result of the proceedings, even if the judge has
decided to reject the evidence of her adversary as well. (at p265)
22. In the background of the case lay the fact that the learned judge had not
at that stage granted the wife's application for an
adjournment. It hardly
seems possible that the complexities of the husband's financial situation
could have been unravelled with
fairness to the wife if she had been forced to
proceed before proper discovery had been made and proper answers to the
interrogatories
had been delivered. Having regard to the nature of the issues
and of the interrogatories themselves, the course of obtaining answers
viva
voce appeared to have little to commend it. If an adjournment were to be
granted, it might have seemed preferable to avoid requiring
the parties to
attend court on 25th May, and then face the prospect of a trial. We are not
directly concerned with these matters,
but they cannot be ignored in
considering what effect the judge's remarks might reasonably have had on the
wife. (at p266)
23. In the unusual circumstances of the present case, it has been established
that the wife might reasonably suspect that Watson
J. has prejudged an
important question in the case, and that she might therefore reasonably have
no confidence in the result if that
learned judge proceeded to decide the
matter. Therefore, prohibition should issue. (at p266)
24. Two matters remain to be mentioned. It was submitted on behalf of the
husband that the wife's proper remedy was to appeal to
the Full Court of the
Family Court. As to that submission no more need be said than that an appeal
lies only from a "decree" (s. 94 (1) ), which means a "decree, judgment or
order" (s. 4 (1) ), and a judge who simply continues to sit after it has been
submitted that he is disqualified does not thereby make a "decree".
No doubt
an appeal could have been brought if the learned judge had finally given
judgment in the matter, but it would be obviously
inconvenient to allow him to
complete the proceedings when he is disqualified to hear them. The fact (if it
be a fact) that no other
judge of the Family Court in Sydney is available to
hear the case is no obstacle to the grant of prohibition since there are other
judges of the Family Court available elsewhere in Australia who could come to
Sydney for the purpose. (at p266)
25. The order nisi should be made absolute. (at p266)
JACOBS J. This is an application to make absolute an order nisi granted on
24th May 1976 calling upon Watson J., a judge of the
Family Court of
Australia, to show cause why a writ of prohibition should not issue
prohibiting him from hearing or further hearing
the application for
dissolution of marriage and ancillary relief No.S.4811 of 1976 in the Family
Court of Australia, the proceedings
there being between the prosecutrix wife,
the applicant here and in the Family Court, and her husband. The grounds of
the order nisi
are: 1. that his Honour is biased against the applicant, and 2.
that his Honour has prejudged her credit to her disadvantage. (at
p267)
2. I propose to assume that the remedy of prohibition is available upon the
ground that a judge of a superior court of record has
prejudged credit or is
biased where the bias is not a bias by interest in the proceedings. If the
remedy is available then there
is an original jurisdiction in this Court to
grant the remedy, a judge of a federal court being an officer of the
Commonwealth within
the meaning of s. 75 (v.) of the Constitution. I do not
base my decision on any ground of unavailability of remedy because no occasion
in fact is disclosed for grant of the writ
and it is desirable in the
interests of maintaining public confidence in the administration of justice
generally and in the Family
Court in particular that this should be made
clear. The test is whether a real apprehension of bias would be raised in the
mind of
a reasonable and intelligent man in the circumstances of the case.
Reg. v. Australian Stevedoring Industry Board; Ex parte Melbourne
Stevedoring
Co. Pty. Ltd. [1953] HCA 22; (1953) 88 CLR 100, at p 116 , per Dixon C.J., Williams, Webb and
Fullagar JJ.:
"But when bias of this kin is in question, as distinguishedI now turn to the circumstances of this case. (at p267)
from a bias through interest, before it amounts to a
disqualification it is necessary that there should be strong
grounds for supposing that the judicial or quasi-judicial
officer has so acted that he cannot be expected fairly to
discharge his duties. Bias must be 'real'. The officer must
so have conducted himself that a high probability arises of a
bias inconsistent with the fair performance of his duties, with
the result that a substantial distrust of the result must exist
in the minds of reasonable persons. It has been said that
'preconceived opinions - though it is unfortunate that a judge
should have any - do not constitute such a bias, nor even the
expression of such opinions, for it does not follow that the
evidence will be disregarded', per Charles J., Reg. v. London
County Council; Ex parte Empire Theatre (1894) 71 LT 638, at p 639 ."
3. The proceedings before Watson J. were proceedings under the Family Law Act
1975 (Cth) for dissolution of marriage and ancillary
relief, namely, orders
for maintenance of the wife by the husband under s. 74, including a claim for
payment of a lump sum under
s. 80, and it would appear, orders under s. 79 for
settlement of property. The proceedings had been commenced in the Family Law
Division
of the Supreme Court of New South Wales
on 25th November 1975 by
petition under the previous legislation. By this petition the wife
petitioner
sought maintenance for herself
in a lump sum of $182,500 together with other
financial relief the nature of which has
not been disclosed in these
proceedings. The
husband respondent did not in any defence specify pursuant to
r. 200 of the Matrimonial
Causes Rules particulars of his financial
position.
He was required by that rule so to do if he wished to oppose the making of the
order sought. (at p268)
4. Injunctions were granted by Carmichael J. in the Supreme Court of New
South Wales on 15th March 1976 and on 30th March 1976.
It is not wholly clear
what those injunctions were but one of them, it may be inferred, related to
the respondent husband leaving
the country and another related to his
disposing of property. An application was filed by the husband in the Family
Court of Australia
for transfer of the proceedings to that court. It is not
clear that the Family Court had power to make such an order. Be that as
it
may, Carmichael J. of his own motion on 12th April 1976 transferred the
proceedings under s. 45 (2) from his court to the Family
Court of Australia
in Sydney. Meanwhile, various affidavits had been sworn by the wife, two on
22nd March 1976 and one on 26th March
1976 and, on 29th March 1976, the wife
had filed an application in the proceedings claiming, in lieu of the amount
previously claimed,
a sum of $2,000,000 by way of lump sum maintenance or
property settlement. By virtue of s. 9 (4) of the Family Law Act 1975 the
proceedings
for maintenance and property settlement, not being proceedings for
principle relief, were continued and fell to be
dealt with as
if they were
proceedings instituted under the Family Law Act 1975. (at p268)
5. The transferred proceedings came before Watson J. on 20th April 1976. It
would appear that one matter then outstanding was an
injunction granted by
Carmichael J. which related to the husband's passport. Watson J. declined to
vary that order saying that he
did so for reasons given in one of the wife's
affidavits. The judge made clear that he regarded the whole proceedings as
being then
before him for the making of any appropriate order including an
order under reg. 81 of the Regulations made under the Family Law
Act 1975. He
then asked the husband's counsel when the court was going to get information
from the husband on financial matters and
was told
that it would be in the
coming week. His Honour indicated that the statement of financial
circumstances in accordance with
form 19
and pursuant to reg. 98 should be
filed by 4 p.m. on Tuesday, 27th April. (at p269)
6. The learned judge then turned attention to the hearing date. He specially
fixed the hearing for 25th May and indicated that before
then the matter
should go in the list for further mention and directions. He fixed 11 a.m. on
Friday, 30th April, subject to any
approach for a different date. He ordered
that all the orders of Carmichael J. be continued until further order, and
then continued:
"Mr. Gruzman, I would like to have from your client onMr. Gruzman replied "We should Your Honour" and then went on to ask for an interim order for maintenance under s. 77. This was refused. The question was again raised of dates for hearing and his Honour stated that he would reserve the 25th, 26th, 27th and 28th of May. Mr. Gruzman indicated that those dates did not suit him personally but his Honour adhered to his decision and stated further that he did not propose to list any long matters between 25th May and 9th June, thus allowing nine sitting days. (at p269)
affidavit details of her financial position her working
capacity, her usual way of life in the 24 months before she
was married to Mr. Armstrong. I regard that as a relevant
matter. You can take it from the relevant sections of the
Act. Information concerning 75 (2) (b) relating to your client
over a period of two years before she married Mr.
Armstrong. You should be able to file that before 2.00 p.m.
on the 27th April."
7. The matter was then adjourned to 30th April and it came on again before
his Honour on that day. The transcript reads in its first
presently relevant
part:
"MR. GRUZMAN: On the last occasion Your Honour
indicated that Mrs. Armstrong should file an affidavit as to
her financial circumstances prior to the two years of the
marriage.
HIS HONOUR: I have seen that affidavit. It has been
filed. I propose to reject the affidavit. I find pars 1 and 2,
particularly par. 2, quite offensive. It is an unnecessary
piece of pleading. It is open to counsel when the matter is
being discussed at the hearing to raise objections. It is not
open in my view when this court gives a direction that
certain material shall be filed to include in an affidavit
material of the nature of par. 2.
Secondly although, I have looked at the transcript, the
affidavit itself in fact dealt with the two years prior to the
marriage, it appears from the affidavit that the two years
dealt with are actually two years of de facto marriage
between Mr. & Mrs. Armstrong. What I do regard as
relevant and I do believe should be on file is material
indicating Mrs. Armstrong's financial position and her
capacity for her economic faculties as at the time before she
became associated in a de facto marriage with Mr.
Armstrong. I am concerned that, as she was born in 1921
and this relationship did not commence until 1961, I should
know something of her background prior to the marriage.
I therefore do not propose to allow anybody to rely upon the
affidavit of 22nd April. It is not necessary for the
respondent to reply to it.
I request that a further affidavit be filed dealing with her
financial position and her financial capacity until twelve
months before she became part of a permanent relationship
with Mr. Armstrong.
MR. GRUZMAN: Until one year before she became ...
HIS HONOUR: In other words, before she was able to rely
on Mr. Armstrong for any financial benefits." (at p 270)
8. His Honour then turned to the husband's counsel:
"HIS HONOUR: You filed, Mr. Goldstein, a statement ofDiscussion then turned to the question of an open offer by the husband and subsequently to a submission by the wife's counsel that the form 19 filed by the husband was not meaningful. It is not possible to avoid setting the transcript out at length partly because portions of it are relied on in this application and partly because it is very important to examine the whole context of events:
financial circumstances?
MR. GOLDSTEIN: Yes.
HIS HONOUR: And something else called balance sheets,
without any verification at all. You filed no general
affidavit of your client?
MR. GOLDSTEIN: No. And such affidavits as I would be
filing, I would indicate to Your Honour I would be filing these
within the forthcoming ten days."
"MR. GRUZMAN: I understand Your Honour's direction toThere was mention of other matters not of especial significance at this time and the proceedings were adjourned. (at p273)
my friend. Form 19 was intended to be meaningful, and
Your Honour perhaps notes that the wife's affidavit indicated
the assets of her husband at $10M. to $15M. The husband
has produced a document which showed he was insolvent to
the extent that his property is said to be worth $600,000 and
his debts $845,000, a fair discrepancy. That by the fact that
the husband states in his affidavit that his real estate is not
relevant and that his bank accounts are not relevant, and his
building society not relevant, and all other property is not
relevant. So that we would submit that that form does not
apply to either the letter or the spirit of what the Court says.
HIS HONOUR: Would the parties direct their attention to
reg. 99.
MR. GOLDSTEIN: What we were minded to do ...
HIS HONOUR: You see, gentlemen, this Court is an
extremely busy Court as you know, and whilst Mr. and Mrs.
Armstrong have their rights to litigate matters, I take the
personal view that dealing with young children and a whole
lot of other things that crop up, are of equal importance, if
not of greater importance. Yesterday or the day before, in a
matter, nothing like the magnitude of this, but a matter
somewhat similar, the Deputy Registrar appointed one of the
accountants on the A. Panel of the Equity Court of New
South Wales to carry out an enquiry under my direction
under 99.
MR. GOLDSTEIN: We were minded either to call evidence
ourselves or, if you want it done the other way?
HIS HONOUR: What is your view on this approach, Mr.
Gruzman? My faculties for understanding balance sheets,
interlocutory, and whether capital has been watered down,
etc. is not my training.
MR. GRUZMAN: The problem is that. Who is to decide
whether the truth is being told. Your Honour sees the
problem. Here is a woman who alleges her husband has
fabulous wealth and the man says he is virtually
bankrupt. A lot of that is going to depend on deciding who
is telling the truth about certain things. If there were any
sort of informal arrangement where Mr. Armstrong is not
subject to cross examination, and even if he were, is the
Accountant to decide?
HIS HONOUR: I think that is the crunch, Mr.
Gruzman. It means we cannot avoid a Court hearing and the
only alternative would be to send it out to the Registrar who
has the capacity under the regulations, of cross-examination,
as well as the old certificate of means. But, I regard that as
completely alien. It only meant when it came to the Court
you went through the whole thing again. It looks as though
the Court cannot escape its obligations in this regard.
MR. GRUZMAN: May I suggest a lot of the work can be
done out of the Court. I would like to suggest that Your
Honour direct that proper answers be given; and, that real
estate is not relevant, we suggest that is not a proper
answer. I would respectfully suggest that Your Honour may
see fit to give directions that form 19 be complied with
literally and, if it is nil, that is all right.
HIS HONOUR: We can get around it another way, Mr.
Gruzman. I now draw your attention to reg. 91. What I
suggest is this, and it should not be beyond your capacity, or
your advisers to do so. I suggest within a very short time
you draw up what is in the nature of interrogatories. We
then have a clearing house hearing of these interrogatories
... (sic) originally a regulation which provided for
interrogatories ... (sic) Supreme Court relies. But,
unfortunately, in other States where enlightenment is not so great
they have been using interrogatories for a hundred years or
so and there is resistance. What 91 is is a Court trial system
of interrogatories. I am not going to sit here and advise
specific questions because I do not know enough about
financial machinations. I would have thought you and your
advisers would have been able to draw up a number of
specific questions on interrogatories and I could rule very,
very quickly whether I thought they were relevant or not and
that would average out the information that we should
have. On that day, or perhaps at some subsequent date, and
time is moving on because we have a hearing date of 25th
May, subsequent to that date and before the actual hearing,
you could make a return day for subpoenas and summonses,
some day before the hearing. A week before if you
like. Except for the small inconvenience of counsel and
solicitors having to go to this Court precincts and look at the
documents here, it means you can do all your work before you
start instead of the Judge sitting around all day while you go
through reams of paper.
MR. GRUZMAN: We will undertake to prepare both
interrogatories and subpoenas. Would Your Honour indicate
a date.
HIS HONOUR: You would want to do those
simultaneously. You can do it in two steps. You can submit
your interrogatories for my approval and also your main
bodies of summonses on the one day and, having regard
to the answers given to those specific questions, you can
have a second bite at summonses two or three days before
the hearing. Can you see any objection to that approach,
Mr. Goldstein.
MR. GOLDSTEIN: No Your Honour. It seems unfortunate
that, in the light of an offer which really amounts to about
$500,000, that we are going ahead with all this.
HIS HONOUR: Mr. Goldstein, I cannot control that. If I
come to the conclusion at the end of this case that the case
ought not to have been fought, that the offer was sufficiently
generous, albeit, an amount upwards of half-a-million dollars
of a man otherwise insolvent]
MR. GOLDSTEIN: That is what has been said.
HIS HONOUR: Mr. Goldstein, the situation is this, that you
have made an open offer. This is obviously a case where a
claim is being made. If it is rightly made probably costs do
not come with it under the general regulation relating to
cost; if it is wrongly made and if it is falsely based, and if
your client has been put to expense which he ought not to
have been put, then the Court has some control over
costs. The cost rule gets away from the old preferred
position of the wife's costs. That has gone forever and it provides
for each party to pay his own costs. It covers matters
of dissolution and custody. If I am of the opinion in a
particular case that circumstances justify costs and if it is
shown that a great deal of time has been wasted over false
issues and seeking unjust claims, the Court has its powers.
MR. GRUZMAN: May I invite Your Honour's attention to
one aspect? The wife's affidavit of 22nd March, dealing
with her husband's assets, is not in general terms, but in very
specific terms, dealing with specific properties, the actual cost
prices, and so on. There is no answer by the husband to that
affidavit. It is not a case of the wife having made general
allegations of her husband's position, but specific and
precise. If you could see fit to direct an answer to that
affidavit, and affidavits generally?
HIS HONOUR: I will not, I don't think. The respondent's
application is set out in regulation 58. If he wishes to seek an
order during the hearing of the application, he may file an
affidavit in answer. I can't force him to file an affidavit in
answer. I can draw certain conclusions, of course, if he does
not.
The difficulty here is that reg. 58 is designed in a way to
cut down paper work and, of course, is a regulation which
covers not only a case of this nature but the issue of
maintenance in the Blacktown Children's Court, and it is
deliberately so designed.
I cannot require him to file an answer, but if a man has an
allegation made against him and he doesn't bother to answer
it, it puts you in an advantageous position and I will leave it
at that.
What about the 7th May? Can you get your
interrogatories ready by then? They would have to be served
before then to give Mr. Goldstein a look at them.
MR. GOLDSTEIN: I would be issuing some myself.
HIS HONOUR: Can you exchange your informal
interrogatories? Because they do not become formal until I
approve under 91. Can you serve and exchange by 4 p.m.
next Wednesday?
MR. GRUZMAN: We can.
MR. GOLDSTEIN: Yes, Your Honour.
HIS HONOUR: The application specifying the questions to
be answered by each party, rather to be filed and served by
each party on the other by 4 p.m. on Wednesday, 5th
May. Then the hearing of the applications, the mutual
applications under regulation 91, to be fixed for 2 p.m. on
Friday, 7th May at 2 p.m. You will have a better chance
then of getting a fairly quick hearing."
9. Hearing was resumed on 7th May. Discovery and inspection by 18th May 1976
were ordered. Then a start was made on settling the
interrogatories. The
transcript proceeds:
"MR. COLLINS: Yes. So far as the request, or questions,And then the Court settled down to a detailed examination of the husband's request for interrogatories. After his Honour had indicated that the matter would be adjourned to Monday 10th May, a discussion followed on the nature of the issues which arose in the proceedings. In order to keep matters in context it is necessary to set out the transcript.
or interrogatories, or whatever one terms them, there was on
Wednesday night, at 4 o'clock, served on my instructing
solicitors, that bundle of documents, which comprises on a
quick count, 881 questions, many of which are divided into 8
sub-questions. There are attached 346 pages of documents
and it has been a sheer physical impossibility - with one set
of documents needing to pass through a number of hands -
for the matter to have proper consideration. To make it
quite apparent, we would submit that this is not a valid
exercise of the powers under the rules to ask questions on
relative matters. Much of the material sought to be asked
goes to matters which range far and wide beyond the scope of
the inquiry before this court.
HIS HONOUR: Before we proceed with that, can we deal
with your request which seems to be shorter. Any
objections to any of the questions raised, Mr. Gruzman?"
"HIS HONOUR: Mr. Gruzman, I have not finally decided,--------------------------------------
but it might be a matter for the parties to consider. It seems
to me to be common sense, your lady came to this alliance in
a certain financial position and with certain faculties for
standing on her own feet, about which specific questions are
being asked and answers will be provided. Then Mr.
Armstrong went through a series of fairly notorious
episodes. One was a very long case; the next was the
change in his Parliamentary status; the next was a series
of, I think, one divorce in which Mrs. Armstrong was in some
way mentioned or involved; and, lastly, a fairly lengthy
trial in respect of a company. I notice, in glancing through
an extremely voluminous affidavit filed by Mrs. Armstrong,
that all this matter has been re-activated. There has been
nothing filed by Mr. Armstrong to attack the fact that while
she certainly does not come into the category of a parent,
except in relation to step-children, there is no attack made by
Mr. Armstrong, as I understand it, on her general capacity as
a homemaker, in so far as section 79 operates; In so far as
he does not attack overall her fitness as a wife. She cannot
get one extra cent either on the old law, or the new, from any
misconduct of his and she is saddled with the financial
position albeit whatever it is that he presently finds himself
in.
My preliminary view, therefore, is that all those interim
upsets are irrelevant, like a man having won the lottery the
day before the hearing commences, or the man who finds the
share market has collapsed. I have to deal with practical
matters. The real issue is how much is he worth and what is
a proper share, if any, of that worth that Mrs. Armstrong is
entitled to receive. That is the simple issue, although the
implications are quite profound. I can see some value in
having researches as to just what his financial position
presently is, or what his prospects are, particularly having
regard to the rather cavalier way he answered form 19. I
can see no basis on which this case can in any way be a
retrial of Barton and Armstrong, or Eskell and Eskell and the
alleged company fraud case or of the fact that he was
expelled from the Parliament. What we are concerned with
here is with the size of the pint pot. We are concerned what
is in the pot and what is the distribution of it at this time and
I will need a great deal of persuading that any of that
material which relates to the periods of years in between -
what may have been regarded as the halcyon years - I would
have a great deal of difficulty in seeing that as relative before
me.
I also point out my very heavy obligation under s. 97 that
these proceedings are not to be protracted.
I just throw out those for the parties to consider. It may be
if we look at the absolute relatives, which is simply how
much has he got and how much is she entitled to as a
settlement. We will probably get to the jugular of this much
more quickly.
MR. GRUZMAN: We are really anxious to present such
evidence, and only such evidence as is relevant. The
problem that we see is that it has been rather difficult, for us
at least, to know, firstly, what are the criteria upon which a
division is made, and we know the old basis of contribution
by the wife, as it were, to the family fortune, was exploded, in
fact, and yet it is said - what is the Section?
HIS HONOUR: Section 79?
MR. GRUZMAN: When you look at the Act to try and get
some guidance of what evidence should have been used, it
says you have got to look at the financial contribution made
directly or indirectly to the equity, conservation or
improvement of the property.
Now, what the wife says here is that if it hadn't been for
her, in particular, shall we say, gross vicissitudes, that the
husband passed through, there would have been no property.
HIS HONOUR: If it hadn't been for her contributions to Mr.
Armstrong, he would be much worse off than he is. Now if
he says that, and he doesn't deny it, we are then back at the
position that we are now in?
MR. GRUZMAN: I agree. I am only indicating, not
without some misapprehension, that it was truly relevant if that
material was introduced.
HIS HONOUR: If Mr. Armstrong wants to put it in issue,
it is a new ball game. He hasn't yet.
The line Mrs. Armstrong takes is that he would be in a far
worse position today if she hadn't been such a good wife and
support. He hasn't denied that at this stage.
She gets some credit from that as is available to her,
having regard to the shortness of the marriage, etc., etc. She
is not in the same category, of course, of a woman who has
lived with a man for thirty years and brought up five or six
children. She is in a different category and gets such credit
as is available.
What follows from that is this proposition: that is that it
would be more useful to me to examine the principal question
first; the principal question of how much Mr. Armstrong
got and Mrs. Armstrong got, and should there be any
re-distribution of that financial position. That is the crucial
question.
Now, if, as a corollary to that, we are then cast into a wider
field of saying, yes, there is the financial balance between
them and other things being equal, the just re-distribution, if
any, is that if Mr. Armstrong seeks to know in argument
whereby she is not entitled to that just re-distribution
straight out, then we may be in a new ball game and the cost
pendulum might start to swing the other way. I do invite
counsel to give their attention to the ascertainment of the
financial business first. In other words although it is gone,
really, what I should be conducting first in this case is a
certificate, something like the old Certificate of Means
Inquiry, but with a little bit more finesse and
flexibility. What is available in this case?
MR. GRUZMAN: If I may say, from our point of view, we
are perfectly agreeable to that course, provided we know what
the matter is. If Your Honour thinks it is a desirable and
proper course for the proceedings on the 24 to really
constitute a means inquiry to see just what there is, then we
equally agree.
HIS HONOUR: Lets start that one first, Mr. Collins?
MR. COLLINS: In anticipation of Your Honour
accepting that as being a central issue, issues have been put in
train to acquire, collate and present before Your Honour the
evidence as to the true position from the sources. (That
evidence will be filed, I anticipate, very shortly.
MR. GRUZMAN: Your Honour we are going to be in the
position that between 18 and 25 we are going to be faced with
an enormous mass of material on which we are supposed to
assist Your Honour to decide whether Mr. Armstrong is a
bankrupt to the extent of $150,000 of solvent to the extent of
$10,000,000 or more. That time schedule is pretty short.
What I am coming to is that my friend says he is putting
on affidavits as to what he says is Mr. Armstrong's
position; I would ask Your Honour that that should be put
on within 7 days maximum.
HIS HONOUR: That is fair enough, you should have been
on by now, Mr. Collins?
MR. COLLINS: I suppose much of the interim has been
spent reading these novelettes.
HIS HONOUR: It is fair enough that if you want to put any
further primary material, it ought to be on seven days from
today?
MR. COLLINS: That will, of course, include material as to
matters not strictly financial?
HIS HONOUR: Yes. If you want to place any primary
material before the court. You have heard what I said about
the affidavit, I am not foreclosing your answering that
affidavit if you want to widen the area.
MR. COLLINS: It is not a case of widening the area. Your
Honour would appreciate that a great deal of that material
would not stand unanswered.
HIS HONOUR: I am simply suggesting you do not reply to
it. If later on the option is open - that is what I am trying to
say to you, that the issue before me at the moment is a
financial one and that is the one we should get out of the
road.
I would be quite happy to conduct this case on this basis, of
saying, well, having spent the first few days of this hearing, I
admit Mr. Armstrong is worth X amount of dollars, or has
control of X amount of dollars and Mrs. Armstrong is worth
X amount of dollars or has control of X dollars, I am now
prepared either to decide that on general principles of
fairness and equity, without further adieu (sic) or if anybody
wants further adieu (sic), we have it.
I am trying to shorten this. Even though there are no
children in this case, the basic principle of my approach to
Family Law matters is still with me and that I see no reason
in widening the area which a person's respect on either side
can be trampled upon. In the ultimate it doesn't gain
anything.
MR. COLLINS: We would respectfully adopt that as a
principle, but, of course, we are not the moving party in the
raising of these matters.
HIS HONOUR: A game of chess is not merely to move, it
also to counter move. You will file all primary material
other than conduct if I can put it that way?
MR. COLLINS: Some of the primary material may require
verification from a qualified accountant. May I be granted
leave beyond the seven days to file material, it would be
creative. The information would certainly be before Your
Honour and available to my friend in seven days.
MR. GRUZMAN: If there is some problem of getting some
sworn, may we have it in the unsworn state within the seven
days?
HIS HONOUR: It is your responsibility to file all primary
material, other than issues of conduct, by 4 p.m. on the 14th
May, Mr. Collins?
MR. COLLINS: I suppose if there is any material in reply to
it -
HIS HONOUR: Primary material, and I use the word
'primary' deliberately. I am not terribly impressed with
papers coming up in reply. I think that the rules and
regulations intend that you see what each side generally says
and we let the replies fall where they will?
MR. COLLINS: Very good, Your Honour.
HIS HONOUR: Any counsel seek any other directions
today?
MR. COLLINS: No.
HIS HONOUR: Then I adjourn the further directions in this
matter to Noon on the 10th May, 1976?
MR. COLLINS: There is one other matter, may I ask my
friend, through Your Honour, if we may have another
telephone book.
MR. GRUZMAN: I don't think so, I will find out; I don't
think we have got enough.
HIS HONOUR: It is a very fair request, Mr. Gruzman?
MR. GRUZMAN: I don't dispute that but -
HIS HONOUR: If you are unable to comply with this, Mr.
Collins may even be able to borrow yours and you get
another one?
MR. GRUZMAN: I will do that, I think I know what is in it.
THE FURTHER HEARING OF THIS MATTER(at p278)
IS ADJOURNED TO MONDAY, 10 MAY, 1976."
10. It may be observed from this transcript that his Honour had familiarized
himself with the voluminous affidavits which had been
sworn by the wife. I do
not think that it is necessary for me to refer to them in detail. They covered
at least three main subjects
- the wife's assets (or lack of them) and her
needs to support the claim for $2,000,000; the husband's assets which she
estimated
to be of a value of $15,000,000; and a history by the wife of her
relationship with the husband, particularly over years of litigation,
the
purpose being, it would appear, to show her contribution to the acquisition of
the husband's wealth. It is sufficient to say
that there was nothing in them
to belie fears of the far ranging and prolonged course which the litigation
might take and the need
for such action as was open to the Judge to attain a
clarification and acceptance by the parties of the real issue which had to be
determined by him on the application for a maintenance and property
settlement. (at p278)
11. The afternoons of Monday 10th May, Wednesday 12th May and Friday 14th May
were all devoted to going through the requests for
interrogatories, the size
of which appears from the transcript which I have set out. On 18th May the
questions on discovery and inspection
were investigated by the Deputy
Registrar. (at p278)
12. On 20th May accountants engaged by the wife were examining documents
produced by the Reserve Bank of Australia when they discovered
an application
under Exchange Control Regulations. The details need not be stated but they
led Watson J. to grant an immediate ex
parte injunction on the application of
the wife restraining a number, if not all, of the transactions indicated in
the application
to the Reserve Bank. The injunctions were to operate until
further order of the Court and further hearing was fixed for 21st May
at 5.30
p.m. in Sydney. (at p278)
13. I can find no transcript of proceedings of this date but the matter came
before his Honour at 10 a.m. on 24th May. Reluctant
though I am to overload my
reasons with transcript I have come to the conclusion that there is no
alternative but to set it out in
full, omitting only that part where there was
a call on subpoena and later a discussion of the place of sitting.
"HIS HONOUR: Why is this matter before me today?There then follows the call on subpoena of Kenneth Eric Lovell solicitor for the respondent's daughters and thereafter the transcript proceeds:
MR. GRUZMAN: This is the return of an application for an
interim ex parte injunction which was sought from your
Honour as a matter of extreme urgency on Thursday by
telephone.
HIS HONOUR: I granted that application until further
order, and the hearing is tomorrow. What is the attitude
until tomorrow.
MR. COLLINS: So far as the application is concerned,
naturally enough our first notice came by telephone after it
had been granted. The documents were served on
Friday. My instructions are these: that there was no prior
application for any undertakings to be given in respect of the
matters, the subject of the application. Had such a request
been made, the undertakings would have been given.
I am now instructed as I have always been, to give any
undertakings pending the determination of this suit and the
implementation of whatever orders your Honour may see fit
to make. No action will be taken in respect of any of the
matters in dispute and my further instructions are that if
such undertakings had been requested prior to the making of
this application then they would have been given.
HIS HONOUR: That is a matter that would go to costs.
MR. GRUZMAN: So far as I can see Mr. Armstrong is not
in Court.
HIS HONOUR: I do not propose to lift the injunction on
this case. The case is listed for tomorrow, and application
can be made at any time during the case. If the injunction
was obtained without proper approach having regard to its
urgency, you have your protection as to costs. I do not have
to make any further order. What else is there?
MR. GRUZMAN: I would like to bring before your Honour
two matters.
MR. COLLINS: May I say that I was told about this only at
two minutes to 10 o'clock.
MR. GRUZMAN: One matter I am about to raise first, is the
subject of a letter last week and numerous conversations with
my friend, and that is the question of the interrogatories and
questions directed by the Court and which the Court
permitted to have directed to Mr. Armstrong and directed to
be answered. I have had no answers.
HIS HONOUR: I think the answer given is that simply if
the answers are not given and there is a great deal of
difficulty in this case because of the early hearing I gave you,
and that these are in a special form in an attempt to cut
down the hearing time of the trial, well if the information is
not available within a reasonable time before trial, and if it
has to be obtained during the trial viva voce, then again it is
a matter of costs.
MR. GRUZMAN: May I point out what Mr. Armstrong has
succeeded in doing is to put in an affidavit of discovery, and
that is a matter I mentioned to my friend just before 10
o'clock. It only has just come to my knowledge, and the
affidavit of discovery in this case is in a form which we
suggest is illusory. Perhaps your Honour would care to read
it.
HIS HONOUR: I have it in front of me.
MR. GRUZMAN: Your Honour will see by some legalistic
means, Mr. Armstrong makes out an affidavit disposing of
discovery of financial documents. The whole purpose of the
proceedings tomorrow is to determine the financial position
of both parties.
HIS HONOUR: I think you have used your pre-trial
proceedings up as far as you can take them. If they are
either directly aborted or misrepresented, one must deal with
the situation as it arises. What can I do today to change the
situation between now and 10 o'clock tomorrow?
MR. GRUZMAN: The affairs of Mr. Armstrong are not only
complicated, but we have a leading firm of accountants, who
have three or four accountants with your Honour's
permission, looking at the books. They are finding extreme
difficulty in knowing just what has occurred. The answers
to those questions were sought in order to elucidate the
matter so that we can present a case to the Court. As we
understood the Family Law Act, it is not the intention of that
Act that a husband can in one legal way or another conceal
things so that the wife is left in a position of not knowing
about. The intention of the Act, as we understand it, the
husband has failed to disclose.
HIS HONOUR: I am not certain that this is a complete
statement. There are three cases with regard to this under
the Matrimonial Causes Act.
The first one was Hains v. Hains (1970) 16 FLR 185;
(1970) 91 WN (NSW) 600 in which it was said
that the husband said he had sufficient to meet the wife's
claim. An investigation of the husband's interests then
became irrelevant.
But that is not the case here, of course, because the
husband has not offered to meet either the wife's first or
second claim, the second claim being greater than the first
claim.
The second one is Aboud v. Aboud 1972; unreported. in which there
again it was more or less said that as the husband had
indicated there was sufficient to meet the wife's prior claim,
then there was not any question of examination of financial
responsibility.
The third case, Simmonds v. Simmonds (1973) 1 NSWLR 647 in which the
Court of Appeal said the husband had refused to disclose his
financial position, the wife got an order for $25,000 for,
emergencies, and it lasted for about 200 days. The Court of
Appeal used the non-disclosure in the exercise of discretion
against him.
None of those cases go to the situation here, but I would not
at this stage accept the broad proposition that s. 75
automatically requires the Court to trace down before every
trial the complete financial records between spouses. All
s. 75 obliges the Court to do is to have regard to the income,
property and financial resources of each of the parties.
If one of the parties does not put in issue his capacity to
meet a reasonable order, or even a quite generous order by the
Court, and it says they have that capacity to meet it, and if,
secondly, the Court accepts that admission, and I underline
that because the Court may not, and I certainly would not in
this case accept any admission without corroboration on
either side - let me say on this point, in amplification of what
I have said, it might assist you in handling this matter, I
propose to conduct this case having regard to the
inadequacies of both sides of the case upon the basis I will not find
in my own mind that I am satisfied on either side unless
there is corroboration of a particular matter. That will mean
that there will be no great value to either counsel in
cross-examination of credit because credit is a non-event in this
case.
MR. GRUZMAN: I can only say with respect I do not accept
that so far as my client is concerned.
HIS HONOUR: One great problem that goes to your client's
credit Mr. Gruzman, and there is authority for this in Selby
J.'s judgment some years ago where a spouse makes out an
entirely different set of claims which are set out in her
petition which might be described in the category of
moderately generous in her own view and another set later
on which is so far beyond that you wonder whether you have
the same case before you. When both are made on oath it
presents a threshold problem of credit, exactly the same as
the conduct of the respondent here which I think, to put it at
its lowest, is the combination of companies.
MR. COLLINS: I would like you to hear me on the
interrogatories.
HIS HONOUR: I simply as the judge of the facts in this
matter propose to proceed on the basis that credit is a
non-issue because I require corroboration of any issues. I have to
be satisfied on that.
MR. GRUZMAN: I do not want to take up your time but
your Honour we have a very real problem here and one which
unless it can be solved, will lead in our submission to a
complete miscarriage of justice. May I start this way. The
wife put in an affidavit showing that the husband was worth
$10 million to $15 million, which is an enormous sum of
money.
HIS HONOUR: She believed her husband as to that
amount?
MR. GRUZMAN: The husband put in form 19 which
showed that he had a minus quality - $250,000 minus.
What the examination of the books has shown is that
in the course of these complicated affaits there have been
created, I am told, thirty-seven trusts, so that even after one
has examined, as the accountant is seeking to do at the
moment, the twenty or so companies which are concerned, all
that means nothing because one then has to go to the
thirty-seven trusts. We did not even know of the existence of those
trusts when this case commenced. It is only on subpoena
that they have produced them.
So far we have not had access to them and we cannot say
we blame anyone for it but we did not know of the existence
of the trusts. In respect of each trust I am informed there
will be minutes, ledgers and books of accounts, balance
sheets, profit and loss accounts, and private ledgers, and it
will not be until we look at these that we will for the first time
be able to get some idea of the position. It may be that Mr.
Armstrong has completely got out of his possession every
penny. That may be the position in a technical sense.
We are presently preparing with great difficulty an
application to Your Honour to set aside those transactions, to
even know what to seek, what orders to seek and to put
before the court requires an examination of these additional
documents. The accountant is doing his best at the moment
to prepare the answer to formulate an application to the
court. The object of the discovery was to have produced
relevant documents. The relevant documents relating to his
financial position have not been produced.
HIS HONOUR: Were they produced on summons.
MR. GRUZMAN: A summons, yes.
HIS HONOUR: Talking about summonses, I understand
there are a few this morning, are these people outside.
MR. GRUZMAN: Mr. Lovell is outside."
"HIS HONOUR: You claim privilege in respect of theseThen followed the discussion of the place of sitting and the proceedings ended with the following:
documents?
MR. LOVELL: Yes, I do.
HIS HONOUR: You may leave. In respect of your next
application Mr. Gruzman which is to inspect these
documents -
MR. GRUZMAN: May I tell Your Honour the position.
HIS HONOUR: Just a moment. I think we are in a bit of a
bind and that is this. Until the case proceeds a certain way,
Mr. Armstrong by virtue of his involvement in this case in
probably a direct or implied way as to privilege in many
regards but in respect of the three parties even though they
are officially formal the privilege is put on a different
basis. I propose to retain these documents not to inspect
them myself at this stage and when there is a sufficient
nexus created from the evidence you can renew your
application.
MR. GRUZMAN: Would Your Honour just reserve a little on
this at the moment until Your Honour has heard the rest of
what I want to submit because Your Honour may come to a
different view.
HIS HONOUR: I have no nexus.
MR. COLLINS: Your Honour has no evidence.
MR. GRUZMAN: At this rate if I may say so, the wife is
never going to be in a position to present a case. The
husband has successfully defied every order of this Court.
MR. COLLINS: I object to this statement being made.
HIS HONOUR: When you say present a case Mr. Gruzman,
this will sound a strange comment but the proceedings in this
Court are not strictly adversary proceedings. The matter in
which I am involved is more in the nature of an inquiry, an
inquisition followed by an arbitration. If it is an inquiry
into the available funds of both parties, there is no such thing
as your client's case and Mr. Armstrong's case. There is a
general inquiry. I would have thought the way the matter
should be conducted is as follows. First tomorrow morning
we look at the affidavit evidence, a great deal of which will be
objected to and there will be rulings upon a substantial
part. I have already indicated your client's long
affidavits. The next thing is that Mrs. Armstrong gives
evidence and is cross-examined on it and she calls such
witnesses if any that she has to support her claim. It is
obvious that there is another side of this claim. It then falls
into the area of the husband's willingness to disclose. I
would not listen to any application at the end of Mrs.
Armstrong's evidence that because there were weaknesses in
the case she is unable to prove it. I would not allow any
tactics to prevail in this court where somebody said I am not
going to call that particular person because I have nothing to
answer. I would make that particular witness my
witness. I think the rather interesting battle of tactics that
seems to be going on, the answer to these problems is that we
are starting tomorrow as best we can. While we are involved
in presenting Mrs. Armstrong's evidence and the evidence in
support that she may have, the work of discovering what is
in the documents produced can continue.
If then at the end of a certain part of the case we have
reached a point where you are able to show me it is
impossible to carry on until further material is given, I will
have to make decisions and concern myself as to further
restraints. At the back of mind is the fact that Mr.
Armstrong is in two restraints, a personal restraint and an
economic restraint in relation to matters outside
Australia. We do the best we can as we can and look upon
this procedure, at this stage until we have all the information
in, look upon it generally as an inquiry rather than an
adversary procedure.
MR. GRUZMAN: Accepting everything that falls from Your
Honour it is an inquiry, but surely the husband cannot be
allowed to prejudice the wife by defying an order that the
court has made that he answer certain questions -
HIS HONOUR: I am not certain that it is yet defying
having regard to the time schedule. The first thing you can
do when he goes into the witness box and I would possibly be
prepared to allow this to happen, the first thing you can do is
ask him orally and then having asked him orally you are
then in the position that having got you answers, you are in
the situation you should have been a week ago.
MR. GRUZMAN: Would Your Honour allow that to be done
tomorrow morning at 10 o'clock.
HIS HONOUR: I am not making a decision on that now. I
am hoping that something will turn up.
MR. COLLINS: If Your Honour knew how many hours and
how many people have been involved - Saturdays, Sundays,
nights after midnight in answering these questions, these
remarks of my friend would fall very flat.
MR. GRUZMAN: They promised us some answers last
week.
HIS HONOUR: You can only do so much.
MR. GRUZMAN: I suggest and this is the way we see
it. The affidavit evidence will be dealt with at great length,
Mrs. Armstrong will be cross-examined at great length and
the nine days which Your Honour has set aside for this case
will expire, your Honour's personal movements are known to
everyone concerned and the general tactics of the opposition
as we see it, Mr. Armstrong will not enter the witness box at
all.
Up to this moment Your Honour we have had absolutely
nothing. This affidavit of discovery is a disgrace. It is not
an answer to the court's order at all.
HIS HONOUR: You still have your injunction Mr.
Gruzman. The case will commence tomorrow morning. The
affidavits will be read. They will be dealt with
expeditiously - if I can get through a telephone book of
interlocutories - the affidavits having been read you can call
your client and any other evidence you have. You say that
the cross-examination of Mrs. Armstrong will be lengthy, I
can't say it won't be but I don't propose to let this case go
outside the normal parameters which I believe is my area of
decision. I don't anticipate the cross-examination will be
lengthy. As soon as that is concluded if there are any
problems over interlocutories at that stage before anything
further is done Mr. Armstrong can go into the witness box
and answer the interlocutories on oath. If that means that
you will then be in a position where you have to apply for an
adjournment because of lack of material, we will deal with
this as it arises. Of course you have a great volume of
material and you obviously from your previous remarks have
had discovery of matters which have led to the
injunction. You are not as bereft of material as you were a week
ago.
MR. GRUZMAN: We have only in the last day or so become
aware of the trust situation. Instead of formally issuing a
summons I wonder if my friend would undertake to Your
Honour that there would be produced as on summons the
minute books, ledgers, books of account, balance sheets and
profit and loss acounts, private ledgers and taxation returns
of the thirty-seven trusts in respect of each, which are
referred to in the books of account which have been produced.
MR. COLLINS: I cannot answer that Your Honour (a) I
have not seen the books of account, (b) I have no
instructions - I can only give a general undertaking that
proper revelations will be made to the court. Those are my
instructions.
HIS HONOUR: With respect Mr. Collins I need a little bit
more convincing than that. I am trying to be fair to you. I
would not make such an order now. Those summonses of
course can be issued. The recommendation I make is that
you produce tomorrow morning as much of that material -
MR. COLLINS: If it exists - if that is as accurate as a
number of my friend's other statements this morning.
HIS HONOUR: I regard what he has just said to you as a
notice to produce. Let's have a look at the regulation.
MR. GRUZMAN: Regulation 95.
HIS HONOUR: I am regarding what he has just raised - I
am waiving so much of the regulations on what Mr. Gruzman
has just raised as a notice to produce those documents.
MR. GRUZMAN: At 10.00 a.m. tomorrow morning.
HIS HONOUR: At 10.00 a.m. The regulation takes its own
force because you can't produce matters that are not within
you power. If you are able to produce them all the better. I
could order 95 (4) if necessary. I am not making that order
at the moment. I am regarding what Mr. Gruzman has just
put to me as a written notice served on you to require you to
produce those documents.
MR. COLLINS: Might I inquire as to the whereabouts of
the affidavits of discovery and the discovery order.
MR. GRUZMAN: It will be filed and served this morning.
HIS HONOUR: We can approach it in pari deliquito (sic).
MR. GRUZMAN: There is no pari.
HIS HONOUR: I am unable to say at this stage where we
will be sitting".
"HIS HONOUR: ... The transcript up to now has not beenAt 2.25 p.m. the same day counsel appeared again before his Honour:
taken out fully at my discretion. I did not require any
transcript when I dealt with the interlocutories as I felt the
answers were clear enough.
MR. GRUZMAN: There is just one thing. I must say at
one stage I was under the impression that your Honour set
down four days of this week?
HIS HONOUR: I have reserved all of next week too, with
one possible exception to that, I may be required to go to
Adelaide on 3rd June.
MR. GRUZMAN: I have a commitment I cannot get out of
on 4th June.
HIS HONOUR: If you still have me here on 4th June, I
think you will be glad to get out of this Court. I hope it will
be finished before then.
MR. GRUZMAN: Supposing it does not in the time
available, what does your Honour propose to do?
HIS HONOUR: My trip to Adelaide can be moved as it is
partly for the purpose of an inspection. The Parramatta
Court is to be opened shortly and we are hoping to learn from
the mistakes made, so therefore, this presents no problems.
MR. COLLINS: Your Honour, Mr. Hughes will be in the
matter as from tomorrow.
HIS HONOUR: You have fully briefed him I hope with the
various idiosyncrasies of the matters so far?
MR. COLLINS: He will be thoroughly briefed.
MR. GRUZMAN: Supposing it does not end next week?
HIS HONOUR: We shall look at that matter if and when it
arises. Is there anything more?
MR. GRUZMAN: We took the liberty of having brought into
Court the Reserve Bank documents to support the
application.
HIS HONOUR: They can be returned from the
office. There is a box of documents upstairs which I think are
all claiming privilege; they are in my chambers.
MR. GRUZMAN: That is another set of documents.
HIS HONOUR: You can only see them when the case starts
and we have had proper argument on it."
"HIS HONOUR: Why is this matter back before me.
MR. GRUZMAN: At my request.
MR. HUGHES: May I announce my appearance with Mr.
Collins and Mr. Goldstein.
HIS HONOUR: Yes, Mr. Hughes.
MR. GRUZMAN: This application arises out of two
matters: one, the question that we find ourselves unable to
proceed tomorrow; and, secondly, as a result of certain
comments made by Your Honour from the Bench this
morning. At the time, in view of the seriousness of the
matter, I refrained from comment so that I could take proper
instructions.
The first aspect is this ...
HIS HONOUR: The second aspect is more germane, is it
not?
MR. GRUZMAN: Perhaps, Your Honour. Your Honour's
comments this morning - I do not think I need to preface my
remarks, however, I do say I speak with the greatest respect
to Your Honour and the Court. Were such as to lead Mrs.
Armstrong and her advisers to the point that this case could
not be properly tried before your Honour. Your Honour's
comments included several matters. I must say so far as
your Honour's precise comments are concerned, we have not
committed them to writing, but what I am about to say is to
be taken as generally noted. The effect of what your Honour
said was this: firstly, that neither party was entitled to any
credit in these proceedings.
HIS HONOUR: I did not say that. What I did say, having
regard to the nature of your client's application on one side,
and the variations of applications, and having regard to the
way the respondent had conducted his case to date, it was my
view in any matter about which my mind has to be satisfied
on either side, I would require corroboration of any particular
fact, which is entirely what you have just put to me.
I then went on to say that the situation was I would have
thought we would not be wasting many days on Court time in
this case on the examination of credit. I think the
proposition is a very simple one. Do you understand that as an
accurate paraphrasing of what I said?
MR. GRUZMAN: I think your Honour went further than
that. You said that credit was a non issue or words to that
effect?
HIS HONOUR: I might have used the words non
issue. What I intended to say is namely where I have to
satisfy my own mind in the issue I would require
corroboration of the issue; I would have thought in the circumstances
that credit may have been a non issue.
MR. GRUZMAN: I would wish to expand on that and say in
this case we believe that our client is entitled to the highest
credibility. If your Honour decided that her credit was of
value to Mr. Armstrong, your Honour has prejudged a vital
issue in these proceedings.
The second point is the basis upon which your Honour
found, as I understand it your Honour will require
corroboration of anything Mrs. Armstrong said that there had been a
substantial alteration in the amount she claimed in the
petition.
HIS HONOUR: Do you not understand the meaning of an
affidavit? Both applications you verified on affidavit, that
she was the applicant to this Court and so verified.
MR. GRUZMAN: One was an application as to how much
she wanted.
HIS HONOUR: Both were verified by affidavit and both
were on oath surely?
MR. GRUZMAN: Your Honour has to decide whether it
ruins her credit and puts her on an equal with Mr.
Armstrong.
HIS HONOUR: I did not say that Mrs. Armstrong's credit
was ruined at this stage.
MR. GRUZMAN: We understand that the judge says he is
not prepared to accept anything unless it is corroborated and
if credit is a non issue, that both parties start equally at
scratch on that issue. To us one is the vital issue in the
proceedings which has been prejudged.
Secondly, there is a detailed explanation on affidavit by
Mrs. Armstrong which shows that the first application for
$182,000, a capital sum together with other ancillary relief
was made because of fear and harm of destruction in Court.
HIS HONOUR: That is a matter which can be dealt with
during the hearing. I am holding up a very deserving
case. I suggest you make the point you want to make and
make them quickly. I may be forced to cut down entirely
and let the other people come on. What is the other
heading?
MR. GRUZMAN: The reason we are making this
application is that we feel we are duty bound to do so.
HIS HONOUR: Are there any other headings of argument?
MR. GRUZMAN: The next matter is that your Honour
found before having heard a word of evidence in the case that
her original application was moderatley generous, slightly
generous, or something of that kind, by reason of the second
application her credit had gone. Therefore, she is obviously
in the position of having no chance whatever before your
Honour. If your Honour accepted as a proper basis to
consider her claim, the amount of the application which your
Honour has to consider, that means there is no chance for
Mrs. Armstrong to receive the amount of the order she has
applied for and she believes she is entitled to.
HIS HONOUR: I have that point.
MR. GRUZMAN: Well your Honour the next matter is your
Honour's failure to take proper steps to secure for Mrs.
Armstrong the rights of a wife before this Court and
compliance with orders made by the Court designed to reveal
to the wife what the husband's assets revealed to the wife
and to the Court. I do not need to do more than mention the
fact that there was a specious answer to our submissions, and
a complete failure to answer interrogatories to the question.
I might mention that my friend Mr. Hughes had at 2
o'clock handed to me an unsworn draft of replies to
practically one half.
HIS HONOUR: Are there any other matters?
MR. GRUZMAN: Those are the only matters I can recall to
mind. I will deal with the question of the adjournment.
HIS HONOUR: Those are the headings under which you
rely?
MR. GRUZMAN: There is another matter. Although this
matter comes last, I overlooked it when mentioning other
matters. It is very important so far as my client is
concerned.
In an early stage in these proceedings your Honour directed
that Mrs. Armstrong file an affidavit in respect of her
financial affairs during the two years before the
marriage. Mrs. Armstrong is very mindful of the fact that as a
result of a lot of publicity her husband received in an earlier
case, there have been a lot of vicious rumours floating around
as to what she did before her marriage.
We would, therefore, like to add that we were taken back at
the form of your Honour's direction. An affidavit was filed,
your Honour having made the direction.
HIS HONOUR: You complied without demur even when I
rejected the first one and answered another one.
MR. GRUZMAN: When we were here before the Court your
Honour made it clear you wanted that affidavit. There was
so much discretion in a matter like this.
HIS HONOUR: Are you putting that as a ground?
MR. GRUZMAN: I contend that the first affidavit did not
apply, because it showed you requested what she had done a
further twelve months before she met Mr. Armstrong; it
was irrelevant.
HIS HONOUR: That goes to the hearing.
MR. GRUZMAN: I am suggesting it is using knowledge
outside the evidence.
HIS HONOUR: Is there any other evidence outside this
application?
MR. GRUZMAN: This has happened with a bit of a rush so
far as I can recall at the moment, subject to a transcript of
your Honour's remarks.
HIS HONOUR: Are you continuing?
MR. HUGHES: We are opposing.
HIS HONOUR: The application is rejected. You now want
an adjournment?
MR. GRUZMAN: Mr. Armstrong's affairs are
extraordinarily complicated. Probably the most complicated set of
financial affairs ever to come before this Court or any other
Court of which I am aware. The amounts involved are
extremely large.
HIS HONOUR: This matter was partly dealt with this
morning. I do have another case which I have interrupted to
allow you to make this application for an adjournment. The
best time to do this is at 10 o'clock tomorrow morning. The
case is specially fixed for then, and Mr. Armstrong is under
both personal and economic restraint because of the orders
made by His Honour Carmichael J. and repeated by
myself. I have constantly delayed my other work in this
Court and made myself available by starting in Melbourne to
meet the demands to get this case ready. This Court has
gone to an extraordinary length to try your application in
this case and I do not see that I should continually interrupt
my other work in respect of this matter, having made it the
best part of a fortnight's special fixture.
I think if you want to make an application for an
adjournment, that should be done at the time of the fixed
hearing of the case which is at 10 o'clock tomorrow morning.
MR. GRUZMAN: We thought you would prefer to have the
application now.
HIS HONOUR: I have another case to deal with and I do
not see why I should become part heard in that second case,
because I have been dealing with an application made out of
turn. If you want to make an application for an
adjournment you make that application.
MR. GRUZMAN: Would you take this as notice?
HIS HONOUR: It is not a question of my taking notice.
The matter will be heard in this Court tomorrow. We will
not be adjourning to Lasalle. This Court room will be made
available throughout. One of the reasons is in order to
maintain some security over documents which is not
available at Lasalle.
I have already indicated that I will be doing a few short
matters at 11 o'clock. I do not propose to adjourn for the
morning break.
MR. GRUZMAN: May I file in Court the affidavit of
discovery of Mrs. Armstrong, a copy of which has been
handed to my friend.
MR. HUGHES: I have no application, your Honour." (at p290)
14. Later the same afternoon the application was made to this Court. In
support an affidavit was sworn by the wife. The course of
events is summarized
and there is some argumentative commentary thereon. Paragraph 54 states the
grounds on which the application
was made:
"54. I respectfully submit to this Honourable Court:
(a) that His Honour has pre-judged the issue as to my
credit;
(b) that His Honour has pre-judged the issue as to the
propriety of making a claim with respect to the sum of
$2 Million Dollars;
(c) that His Honour has had regard to rumours about
my life prior to my meeting Mr. Armstrong and is and
intends to have regard to such rumours when making
findings adverse to me;
(d) that His Honour declined to hear an application
today for an adjournment notwithstanding that I am
unable at this stage without the knowledge as to
the detailed issues which will arise and without the
benefit of detailed investigation thereof to present
evidence to support my case. And further to his
Honour's finding as to credit His Honour has ruled
that the normal inferences which follow from the
failure to answer allegations properly made will not
apply to these proceedings." (at p290)
15. The statement of this last ground in the affidavit shows that a purpose
of the application to this Court was in order to ensure
that the hearing did
not proceed the next day. If that were the primary purpose, the situation
would be a grave one indeed. However,
with such a purpose to impute bias to a
judge would be so serious a misdemeanour that an inference of such a purpose
is not enough
to permit any conclusion that it was the primary purpose of the
application. (at p290)
16. The first objection of the applicant wife is that in the words spoken by
the judge he indicated that he would require corroboration
and there would be
"no great value to either counsel in cross examination of credit because
credit is a non-event in this case".
Her attitude is expressed in par. 43 of
her affidavit of 24th May:
"43. I believe that if His Honour puts my credit on no higher
basis than my husband's credit, I am gravely
prejudiced before the taking of evidence has commenced." (at p291)
17. This is a most extraordinary proposition - that the judge is biased
because he approaches the two parties without bias, because
he does not regard
the credit of one as higher than the credit of the other] A party obsessed
with his or her own case may perhaps
be forgiven for such a distortion of
reality but it is difficult to understand how it could be made the basis of an
application to
this Court for a writ of prohibition. When all the events
relied upon occurred, as they did, in court, it is difficult to regard
the
advice given to her to commence these proceedings on such a ground as free
from that same obsession. I so state because I will
not assume that there was
any ulterior and quite impermissible purpose. (at p291)
18. What I have said is itself sufficient to dispose of the allegation of
bias. But in view of the allegations generally something
more should be said.
It was the judge's view that an element in the case which might but did not
necessarily need to be established
was the assets position of the respective
parties. His view was that if capacity to meet any order was not raised, there
was no such
need. His comments on an earlier day, which I have set out and
which I shall not repeat, show this clearly but they also show that
he was
aware that other questions of fact would or could arise. It being recognized
that there could be a need to get the assets
position established, the judge
was anxious to establish this by an inquiry which he recognized would be not
unlike the inquiry into
means under the prior legislation. His view was that
such an inquiry was best not regarded as an adversary procedure. He may have
been right or wrong but the error, if it was an error, could be corrected in
the Family Court itself. On any view of the availability
of the remedy of
prohibition directed to a superior court, such a matter, going to procedure
only, could not ground a writ of prohibition.
(at p291)
19. Next, though the remarks of the judge made on 24th May were, I would say,
unwise, they were nevertheless remarks which he was
entitled to make without
suffering the imputations which have been made. He had spent days dealing with
preliminary stages of the
application and was no doubt fully apprised of the
affidavits and other documents which had been filed by each party. On the one
hand he had a husband who swore that, far from possessing any assets, he was
in fact insolvent - an insolvent who could however offer
a lump sum of
$350,000 in settlement of the maintenance and property settlement claim. On
the other hand, he had a wife who swore
that her husband had assets worth
$15,000,000; that her support and a just and equitable settlement of property
upon her required
the making of an order in an amount of $2,000,000; that her
requirements apart from anything else were a residence in Sydney which
would
cost $175,000 to $200,000 (in addition to her residence in England estimated
by her to be worth in all $100,000) and, as well,
a residence in Monte Carlo
which would cost in all $250,000 and a residence in the United States which
would cost $75,000; and, further,
that the cost of upkeep of the residence in
England, with food and staff will be $40,000 per year and of the other
residences $15,000
per year plus $175 per week for staff. It is understandable
that the judge should approach the matter with a determination to concentrate
his attention on independent evidence. Whether he should have said so is
another matter but to say so does not remotely ground a
writ of prohibition.
(at p292)
20. The next matter alleged to show bias is the fact that his Honour on 20th
April required the applicant wife to file an affidavit
giving details of her
financial position, her working capacity and her usual way of life in the two
years before her marriage; that
on 30th April he reprimanded her legal
advisers for filing an affidavit by the wife swearing her information or
belief that the information
so required by the judge was irrelevant; that, on
discovering that in the two years nominated by him the applicant had been kept
by the respondent husband, he required an affidavit on the same matters as
previously required but in respect of the period of twelve
months prior to the
time when she became part of a permanent relationship with her later husband,
before she was able to rely on
him for any financial benefits. (at p292)
21. No suggestion that this requirement was extraordinary was made until the
application made to the judge not to hear the case
on the afternoon of 24th
May. Mr. Gruzman for the wife referred to this requirement of his Honour and
said "Mrs. Armstrong is very
mindful of the fact that as a result of a lot of
publicity her husband received in an earlier case, there have been a lot of
vicious
rumours floating around as to what she did before her marriage". He
then suggested that the judge was using knowledge outside the
evidence the
only inference being that he was referring back to the last mentioned matter.
The suggestion was impertinent on any
view of the matter and contemptuous of
the court's dignity, whether or not it amounted to criminal contempt. Here
again it may be
possible to explain the wife's attitude, stated thus in court
and repeated in her affidavit, in terms of her obsession with her own
case.
But I find it difficult to explain the conduct of the adviser, who must be
taken to have known the terms of s. 72 of the Family
Law Act 1975 whereby a
party to a marriage is liable to maintain the other party "if, and only if,
that other party is unable to
support herself
or himself adequately, whether
by reason of having the care or control of a child of the marriage who has not
attained
the age of
18 years" (not relevant in the present case) "or by reason
of age or physical or mental incapacity for appropriate gainful
employment
or
for any other adequate reason having regard to any relevant matter referred to
in sub-section 75 (2)". The judge had
referred
specifically to s. 75 (2) (b)
when he first required the affidavit on 20th April. The suggestion that he had
any matter
in mind other than his obligation
under s. 72 is more than
far-fetched. It is the product either of obsession or of ulterior purpose.
I
shall assume that it is the former rather
than give it the grave implications
which would attend the latter. (at p293)
22. After the order nisi was granted a further event occurred in the judge's
court. In the course of another matter on the day following
the granting of
the order nisi the judge is reported to have said words to the following
effect:
"I have caused the High Court enough trouble in the lastOn reading the affidavit of the person who deposed to these words being said, the applicant swore an affidavit containing the following paragraphs:
twenty-four hours ... (then some comment which is not
recollected) ... They have prohibited me - I think it is
something about calling a character witness from Paraguay".
"2. I believe that the reference to a character witness from
Paraguay must refer to Mr Alexander Barton who has
received wide publicity as an alleged fugitive residing
in that country.
3. I have had no connection with or knowledge of Mr
Barton except from what I have read in the newspapers
since the termination of the Barton and Armstrong
proceedings before His Honour Mr Justice Street in
1969.
4. In these proceedings Mr Barton was opposed to my
husband and I believe that His Honour's comment
suggests that in his opinion my credit worthiness is
such that I would propose to call Mr Barton as a
witness as to my character." (at p294)
23. It may fairly be inferred that his Honour had in mind a member of the
Barton family in view of the litigation between Barton
and Armstrong and the
notorious presence of Alexander Barton in Paraguay. What else the comment
meant it is impossible to say. Certainly
it is impossible to construct out of
it that which the applicant wife deposes to be her belief. The judge may have
been mistaken
or he may have been attempting inadequately to recollect in his
mind what possible ground there was for an application to this Court.
It would
have been better not to have said anything of the sort, but that is not a
ground for prohibition. The aphorism that justice
must appear to be done can
do more harm than good if its application is extended to areas of conjecture
and speculation. (at p294)
24. In saying what I have said I think that I have made it sufficiently clear
that I do not regard the course of events before Watson
J. as a model course.
The lesson to be learned is that the dialogue commonly accepted between Bench
and Bar has dangers which no
doubt make silence the counsel of perfection. It
is a counsel which is hard to learn and, to speak of my own experience, is
never
fully learned. But it will be a sad day when the comments of a judge,
during pre-trial procedures or during the course of a trial,
are taken to
reflect on that integrity which has fitted him for the office which he holds.
He is justified in proceeding upon the
basis and in the confidence that his
integrity is beyond question. That confidence may lead him into words or
conduct in court which
fall short of that model of conduct we would all aspire
to but which none of us attain. Then it is fair and right that his words
or
conduct should be disapproved. But let it be remembered that it is confidence
in his own integrity which supports him not only
in his judgment but in all
his words and conduct, both that which may be approved and that which may be
disapproved. Let none by
conjecture or base imputation undermine that
confidence, however much they may criticize his judgment or the way he
conducts his
court. To do so is to shake the foundations of justice. (at
p294)
25. Lastly, I would state that whether or not Watson J. continues to deal
with the application is a matter for him and for him alone.
It would be an
easy course for him, discomforted as he must be by the course of events, to
decide not to deal further with the application
but to hand it over to another
judge. But what must be borne in mind is that so to decide would be to enable
these proceedings to
achieve that result which was the purpose of their
institution, a result which is not achieved by the conclusion which I reach in
these proceedings. (at p295)
26. I would discharge the order nisi with costs, including the costs of the
husband who was not made a party to the application
but who was served with
notice pursuant to the order nisi and who was given leave to appear. (at
p295)
ORDER
Order absolute in terms of order nisi. Alexander Ewan Armstrong who, as the respondent in Application No. S. 4811 of 1976 in the Family Court of Australia, was heard in these proceedings in opposition to this application, to pay prosecutrix's costs.
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