British American Tobacco Australia Services Limited v Laurie [2011] HCA 2 (9 February 2011)

Heydon, Kiefel and Bell JJ allowed the appeal of British American Tobacco Australia Services Limited (“BATAS”) in respect apprehended bias of Curtis J. French CJ, and Gummow J dissented and dismissed the appeal.

 High Court case summary notes (background):

 Mrs Claudia Laurie is the widow and administratrix of the will of Mr Donald Laurie who died in 2006. In proceedings (“the Laurie proceedings”) commenced in the Dust Diseases Tribunal (“the Tribunal”), she pleaded that British American Tobacco Australia Services Limited (“BATAS”) had pursued a policy of intentionally destroying documents that tended to prove that its tobacco products could cause lung cancer. Those proceedings came on before Justice Curtis.

In unrelated proceedings between Brambles Australia Limited (“Brambles”) and BATAS, Re Mowbray; Brambles Australia Limited v British American Tobacco Australia Services Limited [2006] NSWDDT 15 (“Re Mowbray“), Justice Curtis was required to determine whether Brambles could adduce privileged evidence to the effect that BATAS had dishonestly destroyed prejudicial documents for the purpose of suppressing evidence in anticipated litigation. On 30 May 2006 his Honour held that it could and admitted the evidence on the basis that the evidence constituted communications “in furtherance of the commission of a fraud” within the meaning of s 125(1)(a) of the Evidence Act 1995.

By notice of motion, BATAS then sought an order that Justice Curtis disqualify himself from hearing the Laurie proceedings. On 27 May 2009 his Honour declined to do so.

BATAS subsequently filed two summonses. The first sought leave to appeal from Justice Curtis’ refusal to recuse himself pursuant to s 32(4) of the Dust Diseases Tribunal Act 1989. In the second, BATAS sought an order under s 69 of the Supreme Court Act 1970 prohibiting Justice Curtis from further hearing or determining the Laurie proceedings.

On 17 December 2009 the Court of Appeal (Tobias & Basten JJA, Allsop P dissenting) dismissed both summonses. As to whether Justice Curtis had erred in not disqualifying himself on the grounds of apprehended bias, Justices Tobias and Basten held that he had not. Their Honours found that a fair-minded lay observer would not reasonably apprehend that Justice Curtis might not bring an impartial and unprejudiced mind to the Laurie proceedings. President Allsop however disagreed, finding that Justice Curtis had created an apprehension of bias arising out of Re Mowbray.

 Heydon, Kiefel and Bell JJ:

The apprehended bias test

 139.

It is fundamental to the administration of justice that the judge be neutral. It is for this reason that the appearance of departure from neutrality is a ground of disqualification[179]. Because the rule is concerned with the appearance of bias, and not the actuality, it is the perception of the hypothetical observer that provides the yardstick. It is the public’s perception of neutrality with which the rule is concerned. In Livesey it was recognised that the lay observer might reasonably apprehend that a judge who has found a state of affairs to exist, or who has come to a clear view about the credit of a witness, may not be inclined to depart from that view in a subsequent case. It is a recognition of human nature.

140.

Of course judges are equipped by training, experience and their oath or affirmation to decide factual contests solely on the material that is in evidence[180]. Trial judges are frequently required to make rulings excluding irrelevant and prejudicial material from evidence. Routine rulings of this nature are unlikely to disqualify the judge from further hearing the proceeding. This is not a case of that kind. It does not raise considerations of case management and the active role of the judge in the identification of issues with which Johnson was concerned. At issue is not the incautious remark or expression of a tentative opinion but the impression reasonably conveyed to the fair-minded lay observer who knows that Judge Curtis has found that BATAS engaged in fraud and who has read his Honour’s reasons for that finding. Some further reference should be made to those reasons.

141.

His Honour drew inferences adverse to BATAS from the appearance of the policy adopted in 1985, styled the “Amatil Ltd Policy on Document Retention/Destruction” (Amatil being BATAS’s former name). Judge Curtis described this policy as “a model of brevity”[181]. In context this was not an encomium. His Honour considered that it was remarkable that BATAS had replaced a long-standing detailed policy comprised of 45 pages, which prescribed mandatory retention and destruction periods for documents falling within each of 14 categories, with the 1985 policy. He noted that the 1985 policy, in two pages, reduced the categories of documents to three, of which the third, “valuable business documents … in the sense that the business cannot do without it”, was subject to the direction that these were to be retained only after the document had been “carefully reviewed to establish that it is truly valuable”[182].

142.

Judge Curtis discussed Mr Gulson’s evidence concerning an English firm of solicitors that had sent a team of three lawyers to Australia to ensure the implementation of the Document Retention Policy. This followed Mr Gulson’s report that sensitive smoking and health documents were being held at BATAS’s scientific library. Of this evidence, Judge Curtis said[183]:

“This is direct evidence, which has not been challenged or contradicted. In the absence of evidence from BATAS, I find it difficult to understand how it was thought necessary that three English lawyers attend a scientific library to implement a Document Retention Policy which only permitted destruction of documents which were not ‘valuable business documents’. If BATAS was not selectively destroying scientific documents prejudicial to its position in future litigation, how is it that lawyers rather than scientists were assigned to judge the value of research material? This may be explained at the trial; however, the evidence of Mr Gulson gives rise to an obvious inference that has not yet been rebutted by BATAS.” (emphasis added)

143.

The force of the rhetorical question is not lessened by the concluding sentence.

144.

The hypothetical observer is reasonable and understands that Judge Curtis is a professional judge. Nonetheless, the observer is not presumed to reject the possibility of pre-judgment[184]. If it were otherwise an apprehension of bias would never arise in the case of a professional judge.

145.

Whenever a judge is asked to try an issue which he or she has previously determined, whether in the same proceedings or in different proceedings, and whether between the same parties or different parties, the judge will be aware that different evidence may be led at the later trial. Judge Curtis’s express acknowledgment of that circumstance does not remove the impression created by reading the judgment that the clear views there stated might influence his determination of the same issue in the Laurie proceedings. Allsop P’s conclusion was correct. In addition to the possibility of the evidentiary position changing, a reasonable observer would note that the trial judge’s finding of fraud was otherwise expressed without qualification or doubt, that it was based on actual persuasion of the correctness of that conclusion, that while the judge did not use violent language, he did express himself in terms indicating extreme scepticism about BATAS’s denials and strong doubt about the possibility of different materials explaining the difficulties experienced by the judge, and that the nature of the fraud about which the judge had been persuaded was extremely serious. In the circumstances of this unusual case, a reasonable observer might possibly apprehend that at the trial the court might not move its mind from the position reached on one set of materials even if different materials were presented at the trial – that is, bring an impartial mind to the issues relating to the fraud finding. Johnson v Johnson[185] is distinguishable.

Exceptions to the rule

 146.

Exceptions to the apprehension of bias rule include necessity, waiver and, possibly, special circumstances[186].

Necessity

 147.

The Court of Appeal rejected a submission that Judge Curtis’s refusal to recuse himself was justified upon the grounds of necessity[187]. While the Tribunal is a small one and is currently constituted by three judges, the persons qualified to be members of the Tribunal include Judges or Acting Judges of the Supreme and District Courts of New South Wales[188]. Mrs Laurie did not file a notice of contention seeking to uphold the decision below on the ground of necessity.

Waiver

 148.

Something should be said about the delay in bringing the recusal application. On 20 April 2006, Judge Curtis was appointed to take Mr Laurie’s evidence in Texas in the United States, and to be the trial judge. Mr Laurie died on 29 May 2006. The following day Judge Curtis delivered judgment on the discovery application in the Mowbray proceedings. On 16 June 2006, Mrs Laurie filed a notice of motion claiming various orders including to reconstitute the proceedings. There were delays attending the latter. Mrs Laurie obtained a grant of probate in the Supreme Court of New South Wales on 14 June 2007. On 11 July 2007, the Tribunal made an order substituting Mrs Laurie as the plaintiff in the proceedings and giving her leave to file an amended statement of claim. The amended pleading was filed on 13 July 2007. Thereafter the proceedings were subject to further delays as the result of Mrs Laurie’s decision to retain new solicitors to act for her. On 9 November 2007, the newly retained solicitors wrote to those acting for BATAS stating their view that Mrs Laurie’s claim “should not be litigated” until certain proceedings against BATAS in Victoria were determined.

149.

On 6 December 2007, BATAS filed an application in the Supreme Court of New South Wales seeking to have the Laurie proceedings transferred to the Supreme Court of Victoria. At a directions hearing held shortly thereafter, and before the cross-vesting application had been heard, BATAS foreshadowed that it would apply to the Tribunal for an order that Judge Curtis disqualify himself from hearing Mrs Laurie’s claim in the event that the proceedings were not transferred.

150.

BATAS’s cross-vesting application was dismissed on 27 February 2009. On 5 March 2009, the Tribunal made directions in light of the foreshadowed recusal application. On 9 March 2009, BATAS filed its recusal motion.

151.

Mrs Laurie does not submit that the delay in bringing the recusal application amounted to a waiver of BATAS’s rights. The delay was not agitated before the Court of Appeal as a reason for denying BATAS the prerogative relief claimed in its summons. While the fact of the delay was noted in the submissions filed in this Court, it was not submitted that delay was a circumstance which would justify the refusal of relief in the event that the apprehension of bias rule was engaged.

 Special circumstances

 152.

Livesey left open the question whether special circumstances may also amount to an exception to the rule[189]. This appeal does not raise for consideration what special circumstances might justify a judge sitting to determine a case despite being reasonably suspected of having pre-judged an issue. The fact that Judge Curtis took the evidence of the late Mr Laurie at his bedside is not relied upon in this respect. In circumstances in which the evidence was transcribed and video-recorded, such a contention would have been forlorn.

Orders

 153.

The appeal should be allowed and the second order of the Court of Appeal should be set aside. An order under s 69 of the Supreme Court Act 1970 (NSW) prohibiting the fourth respondent from further hearing or determining the Laurie proceedings should be made. The appellant should pay the first respondent’s costs of the appeal in this Court.

 Brisbane Barrister – David Cormack

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