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Gobe Hongu Ltd v National Executive Council [1999] PGNC 132; [2000] PNGLR 372 (16 July 1999)

[2000] PNGLR 372

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

GOBE HONGU LIMITED

V

NATIONAL EXECUTIVE COUNCIL;
THE INDEPENDENT STATE OF PAPUA NEW GUINEA;
BARCLAY BROS (PNG) LIMITED;
SOUTHERN HIGHLANDS GULF HIGHWAY LIMITED; AND
SOSO TOMU - INTERVENER

WAIGANI: SEVUA J
7, 14, 16 July 1999

Facts

On 18 May 1999, the presiding judge, Sevua J, granted an interlocutory injunction sought by the plaintiff in a pending action. The interlocutory injunction was returnable before the judge on 8 June 1999 and on this date his honour, after hearing the defendants, ordered the discharge of the interlocutory injunction. Since substantial arguments were raised by the defendants on the return date, the judge read the court file, particularly the statement of claim, the evidence of the parties and the written undertakings as to damages, amongst other material. In His Honour’s reasons for his decision on 8 June 1999, he addressed in some detail the following matters – serious questions to be tried, balance of convenience, undertaking as to damages, etc – thus, and according to the plaintiff’s counsel, dealing with substantive issues to be tried at the trial proper.

The plaintiff’s counsel, Mr Saulep, then in court objected, and applied for Sevua J to disqualify himself from further presiding over this case because, by reading the court file and addressing the substantive matters in some detail, the judge had "overstepped the boundary" and allowable limit in judicial conduct. Sevua J refused to disqualify himself and instead directed Mr Saulep to file a formal application with supporting affidavit and credible evidence, citing bias or apprehension of bias. His Honour then adjourned the matter to 14 July 1999, for hearing of the plaintiff’s application to seek an order to disqualify the judge from further presiding over the case. In support of their application, the plaintiffs did not file any affidavit except by Mr Saulep, counsel for the plaintiff.

In dismissing the plaintiff’s application on the issue of disqualification for apprehended bias, the Judge held: -

Held

1. Mr Saulep’s affidavit did not contain any evidence, but only submissions of points of law. Hence, the court could not accept Mr Saulep’s affidavit as evidence. Affidavits are meant to be written evidence within the exception of the hearsay rule in the law of evidence, not submissions. There was a trend where lawyers were allowing extraneous materials including opinions, legal submissions, law, etc. in affidavits and that must stop.
   
2. There was no evidence by the plaintiff, its directors or shareholders or any other person from the general public present in court on 8 June 1999 when the Judge handed down judgment – to suggest that the judge was biased or that there was a perceived or apprehension of the real likelihood of bias. Such evidence must come from such people who are "objective observers" or "fair minded lay observers" as pronounced by the Supreme Court in PNG Pipes Limited and Sankaran Venugopal v Mujo Sefa & Others [1998] PNGLR 551, but not from the counsel. As counsel, he is neither an objective observer nor a fair-minded lay observer.
   
3. Judges should not too readily accede to applications for disqualification, whereby parties may effectively influence the choice of a Judge in their cause. Re JRL; Ex parte CJL [1986] HCA 39; (1986) 161 CLR 342 at 352; [1986] HCA 39; 66 ALR 239, adopted and applied;
   
4. Judges should resist from being driven from their Courts by the conduct or assertion of parties. Raybos Australia Pty Ltd v Tectran Corp. Pty Ltd (No.4) (1986) 6 NSWLR 674 (at 689).
   
5. A Judge may disqualify himself in circumstances where a fair minded, lay observer, with knowledge of the material facts might entertain a reasonable apprehension that the Judge might not bring an impartial and unprejudiced mind to the resolution of the question in issue. Livesey v NSW Bar Association [1983] HCA 17; (1983) 151 CLR 288.
   
6. A Judge should disqualify himself by reason of apprehension of bias, under one or more of the following principles, where it is demonstrated that, firstly, he has an interest in the case before him, which interest may be direct, indirect, pecuniary or otherwise. Secondly, by his conduct including published statements, whether such conduct is in the course of, or outside the proceedings. Thirdly, where the Judge, through association or relationship, either by himself, his spouse or children, has a direct pecuniary interest in the case. And finally, disqualification by extraneous information, where the Judge had presided over an earlier case or he has had some knowledge of prejudicial and inadmissible facts. Webb v R [1994] HCA 30; (1994) 181 CLR 41.
   
7. It is of fundamental importance in the administration of justice that litigants and the general public have full confidence in the integrity, including the impartiality of those entrusted with the administration of justice so that the impartiality and the Constitutional independence of the judiciary is not interfered with.
   
8. The test of an ‘objective observer’ established by the Supreme Court in PNG Pipes Ltd & Anor v Mujo Sefa & Ors. (supra) should also include ‘a fair minded, lay observer’ as considered in Livesay v NSW Bar Association (supra).
   
9. The plaintiff’s application was dismissed.
   

Papua New Guinea case cited

PNG Pipes Ltd & Anor v Mujo Sefa & Ors [1998] PNGLR 551.

Other cases cited

Galea v Galea (1988) 19 NSWLR 263.
Livesey v New South Wales Bar Association [1983] HCA 17; (1983) 151 CLR 288; 47 ALR 45.
Metropolitan Properties Co. (FCE) Ltd v Lannon [1968] EWCA Civ 5; [1969] 1 QB 577.
R v Leckie; Ex parte Felman (1997) 18 ALR 93; 52 ALJR 155.
Raybos Australia Pty. Ltd. v Tectran Corp. Pty. Ltd. (No.4) (1986) 6 NSWLR 674.
Re JRL; Ex parte CJL [1986] HCA 39; (1986) 161 CLR 342.
Re Keely; Ex parte Ansett Transport Industries (Operations) Pty Ltd [1990] HCA 27; (1990) 94 ALR 1; 64 ALJR 495.
Trustee of Christian Brothers v Cardone [1995] FCA 1309; (1995) 130 ALR 345.
Webb v R [1994] HCA 30; (1994) 181 CLR 41; 122 ALR 41.

Counsels

R Saulep, for plaintiff.
S Carter, for first and second defendants.
D Lighfoot, for third and fourth defendants.
S Soi, for intervener.

16 July 1999

SEVUA J. This is an application by the plaintiff seeking an order that I disqualify myself from further presiding over this case.

At the hearing of this application, I refused to accept the affidavit of Mr Saulep for two reasons. Firstly, there was no evidence by the plaintiff itself or directors of the plaintiff or directors of shareholders of the plaintiff company that I have been biased or that there is perceived or apprehension of the real likelihood of bias. If that was the feeling or impression of the plaintiff, I expected the plaintiff to file necessary affidavits to that effect, not Mr Saulep as counsel. Secondly, the contents of the affidavit were basically submissions of law, not evidence to support the application. Affidavits are written evidence, within the exception of the hearsay rule in the law of evidence, not submissions. There is a trend now where lawyers are allowing extraneous materials including opinions, legal submissions, law etc. in affidavits and this must stop.

The primary facts are that, on 18 May 1999, I granted an interim injunction sought by the plaintiff. The interlocutory injunction was returnable before me on 2 June 1999, when I heard the defendants’ submissions as to whether or not the injunction should continue. On 8 June, I ordered that the interlocutory injunction be discharged.

On the return date of the injunction, substantial arguments were raised. In my reasons for decision delivered on 8 June, I addressed those principles in detail – serious questions to be tried, balance of convenience, undertaking as to damages, etc. As far as I was concerned, in order to adequately address the relevant fundamental principles of law, I had alluded to, I was entitled to look at the evidence of the parties, the statement of claim, the written undertakings as to damages and other materials, although, I was not determining the substantive issues, which are left to the trial proper.

In addressing those principles in detail, the plaintiff’s counsel said I have overstepped the boundary and limit of what I should say.

All that the plaintiff’s counsel was able to say was that I had already addressed the substantive issues in my interlocutory ruling on 8 June 1999, which case will be argued again in the trial proper. I do not agree with that unsubstantiated and misconceived view. As far as I am concerned, my ruling was based on the relevant legal principles that counsel for the defendants had raised.

The plaintiff’s counsel has failed to address the court on the exact materials that I had expressed opinions on, which he asserted to be biased against his client. What exactly are those issues and what is it that I said in my ruling of 8 June, which amounted to an expression of bias or apprehension of bias against the plaintiff?

The plaintiff company or its chairman or directors have not filed any affidavit to show that I have been biased or likely to be biased against the plaintiff, therefore the propriety or otherwise of bringing this application must rest on Mr Saulep. Since he has questioned my integrity and impartiality in presiding over this case without any evidence of his allegations, I should also ask what authority he has in filing an appeal on this motion, when he has not provided any credible evidence to support his application, but more so, when he has failed to comply with the court’s direction, which I will refer to.

The following facts will highlight what I perceive to be his impropriety in this application, and whether he was properly authorised to appear for the plaintiff in this matter.

Court records will show that on 7 July, I gave a ruling on an application by one Soso Tomu, who sought leave to intervene pursuant to s 143(3) of the Companies Act. The intervener is a director of the plaintiff company. In that application, there was evidence by him and two other directors that the decision to proceed with this court action did not come from a formal resolution of the plaintiff’s board. The plaintiff did not refute that evidence.

Because of concerns over legal costs and other matters in this case explained by those three directors, I considered it in the best interest of the shareholders of the plaintiff company that the powers of the court in s 145 of the Companies Act should be exercised. Accordingly, I decided that any future conduct of this case by the plaintiff must be properly authorised by a formal resolution of the plaintiff’s board of directors. The court has the power to make that order pursuant to s 145(b) of the Companies Act.

As soon as the ruling was handed down, Mr Saulep quickly stood up and made an oral application for me to stay further proceedings in this case because of that ruling and also because he had filed an appeal to the Supreme Court against my interlocutory ruling on 8 June. Furthermore, he had filed an application to stay further conduct of this case. I refused to entertain that application, and said I would only stop when ordered by the Supreme Court.

Following that refusal, Mr Saulep, again, quickly stood up and made a verbal application that I should disqualify myself. He did not have any evidence to support that oral application. In any event, I insisted on a proper and formal application supported by credible evidence. In fairness to the other parties, I directed that a proper application be filed and served and I would hear the application on 14 July 1999. I highlight two important issues here. Firstly, where did these instructions come from? Each oral application was made abruptly and immediately after each ruling. If he had full instructions and proper authority why didn’t Mr Saulep file proper notice of motion instead of interjecting with these oral applications? Secondly, Mr Saulep and his clients have failed to comply with the directions the court issued on 7 July 1999. They have come to seek audience with this court without having the courtesy and respect to comply with the directions of this court. This application should therefore be dismissed for that reason alone as the opposing counsel submitted. However, since I have been fair to them and had permitted Mr Saulep to move his motion, I allowed the opposing counsel to also address the court.

Having addressed those matters, I now come to the law in this area.

The relevant principles and the test applicable in an application for a judge to disqualify himself are contained in the recent decision of the Supreme Court in PNG Pipes Limited and Sankaran Venugopal v Mujo Sefa & 2 Ors [1998] PNGLR 551. The Supreme Court referred to a number of similar cases and statements of principles in overseas jurisdiction and applied those principles and the test as the law in our jurisdiction. I consider that the test of an ‘objective observer’ established there, should include a ‘fair minded, lay observer’ as in Livesey v NSW Bar Association [1983] HCA 17; (1983) 151 CLR 288.

In Trustees of Christian Brothers v Cardone [1995] FCA 1309; (1995) 130 ALR 345, the trial judge was an ex-pupil of the appellants’ school and chairman of the school board. He knew three of the appellants’ witnesses, one of whom was also on the school board. The respondent was a student at a school owned and operated by the appellants and was injured whilst at the school. He sued the appellants for damages for negligence. At the start of the trial, the appellants made an application to the trial judge to disqualify him from hearing the case on the grounds of apprehended bias. However, the trial judge declined to disqualify himself on the grounds that the appellants’ lawyers were aware of the trial judge’s association with the appellants when the case had first been listed for trial, but had raised no objection.

The Australian Federal Court, in dismissing the appeal on the issue of disqualification for apprehended bias held:

"It was not enough that the apprehension of bias arose in the convoluted way argued by the appellants. The apprehension of bias must be reasonably and not fancifully entertained. The appellate Court must be satisfied, upon examination of the surrounding facts, that an objective observer would be left with an apprehension, not a conviction, that the Judicial Officer was predisposed, by matters extraneous to a proper adjudication to reach a particular conclusion"

In Metropolitan Properties Co (FCE) Ltd v Lannon [1968] EWCA Civ 5; [1969] 1 QB 577 at 598, Lord Denning MR said:

"... in considering whether there was a real likelihood of bias, the Court does not look at the mind of the Justice himself ... It does not look to see if there was real likelihood that he would or did, infact favor one side at the expense of the other. Even if he was as impartial as could be, nevertheless if right-minded persons would think that, in the circumstances, there was a 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 real likelihood of bias. Surmise or conjecture is not enough"

In considering these principles, I am of the view, that the plaintiff has not provided any evidence before this court from an objective observer that, after the hearing of arguments by all parties on 2 June, and my decision on 8 June, the objective observer has been left with an apprehension of bias that I would reach a decision in the trial proper, which will be unfavorable to the plaintiff.

I ask here, is Mr Saulep an objective observer? I think Mr Soi correctly submitted that there was no evidence from shareholders or members of the plaintiff company or members of the public who were affected by the ruling of 8 June. I do not consider that it is a question of a conviction that a judge was or would be biased, but an apprehension of bias by an objective observer. I consider that Mr Saulep was not an objective observer.

It is my view that Mr Saulep was not an objective observer, he could not be. The manner in which this application was made orally, and the manner in which another oral application was also made after my ruling on 7 July, could not make Mr Saulep an objective observer. In my view, members of the plaintiff company who sat in court and listened to the submissions by all counsel on 2 June, and who sat in court and listened to the reasons for decision I handed down on 8 June, would be objective observers. I am aware from my own observations that this case had attracted a good size of audience, people who are members of the plaintiff company who supported the plaintiff’s chairman, and those who supported the intervener and his witnesses. In my view, these are the people who should have filed affidavits as to their observations and impression of my conduct on 2 and 8 June. They, in my view, would be the objective observers, not the plaintiff’s counsel.

The Supreme Court, in the PNG Pipes Limited case, adopted the principle that the court looks at the impression which would be given to other people. It does not look at the mind of the presiding justice and it does not look to see if there is a real likelihood that the justice would or in fact favor one side at the expense of the other. The plaintiff, in the present case has failed to establish the impression of the people, that the Supreme Court adverted to.

The dissenting judgment of Justice Gallop in the Australian Federal Court case, in my view, provides a very worthwhile line of views in Papua New Guinea because of the trend that I adverted to at the beginning of this judgment. The expressions by His Honour, in my opinion, provide some very fundamental principles that litigants in Papua New Guinea and their lawyers must consider before embarking on an application for a judge to disqualify himself from hearing a case.

These principles are so fundamental that, in my view, they reflect due consideration that all litigants and their lawyers must study before they embark on questioning the integrity and impartiality of a judge each time they lose an interlocutory application. In my view, the Court must draw a well-defined demarcation line between a spurious and misconceived application, and a genuine application. The courts must ensure that disgruntled litigants and their disgruntled lawyers do not manipulate the judiciary and its judicial process by running to Court each time an interlocutory decision is made against them. In my view, disgruntled litigants and their lawyers must never be allowed to manipulate the judiciary and the judicial process. It is tantamount to attacking the constitutional independence of the judiciary. I consider therefore that it is of fundamental importance that litigants including members of the public, have full confidence in the integrity and impartiality of those entrusted with the administration of justice so that, the impartiality and constitutional independence of the judiciary is not interfered with.

Of course, the law gives them the right to appeal against a decision. The plaintiff, in this case, has already advised they might be lodging an appeal to the Supreme Court. And I do not say that a litigant should not make an application for a judge to disqualify himself. In appropriate cases, where the facts and circumstances favor the making of such an application, a party may make an application. But my concern is that a judge ought not to be driven out of his Court because he has ruled against a litigant in an interlocutory application. I believe that a litigant, by his conduct or assertion, should not be permitted to influence the choice of a judge. If that is allowed, it would, in my view, impugn and impeach the principle of judicial independence. The independence of the judiciary must never be influenced by a group of litigants or a section of the community.

In my view, there is a real danger in allowing applications of this nature every time a litigant loses an interlocutory application. The system of case flow management that the National Court has established in its civil jurisdiction at Waigani is such that a judge deals with all civil cases that are assigned to him from the date of filing to final disposition. He sits on every interlocutory application and gives judgment and makes interim orders. In the light of this, the potentiality of danger and chaos are enormous. Put it simply, there will be no judges left in the country to deal with cases, if all Judges were to disqualify themselves because interim decisions made did not favor some litigants. That is the basis for my view that, disgruntled litigants and their lawyers losing interlocutory applications must not manipulate the judiciary and the justice system. It is a recipe for disaster that the judicial system of this country cannot afford.

Having expressed those views, I now refer to the applicable legal principles expressed by Gallop, J. in Trustees of Christian Brothers v Cardone (supra) at 350:

"On the one hand there are the repeated assertions of the courts that:

(a) Judges by their training and experience are able to bring a detached mind to the task: R v Leckie; Ex-parte Felman (1997) 18 ALR 93; 52 ALJR 155 at 160;

(b) Judges should not too readily accede to applications for disqualification whereby parties may effectively influence the choice of a Judge in their cause: Re JRL; Ex-parte CJL [1986] HCA 39; (1986) 161 CLR 342 at 352; [1986] HCA 39; 66 ALR 239;

(c) Judges should resist from being driven from their courts by the conduct or assertion of parties. Raybos Australia Pty Ltd v Tectran Corp Pty Ltd (No.4) (1986) 6 NSWLR 674 at 689;

(d) Judges should not be disqualified because of the vigor with which they conduct proceedings, some degree of judicial intervention being necessary for the fair disclosure of their provisional views: Galea v Galea (1988) 19 NSWLR 263 at 278f. Re Keely; Ex-parte Ansett Transport Industries (Operations) Pty Ltd [1990] HCA 27; (1990) 94 ALR 1; 64 ALJR 495; and

(e) Judges should perform the duties of their office which, of their nature, will often be painful and unrewarding.

They should do so with courage and decisiveness, avoiding the relinquishment of such duties which would necessarily then fall to another judicial officer for whom the task may be more congenial: Raybos Australia Pty Ltd v Tectran Corp Pty Ltd. (No.9) (unreported)."

His Honour also referred to Livesey v New South Wales Bar Association (supra), a decision of the High Court of Australia which formulated the test in determining whether a judicial officer ("a Judge") is disqualified by reason of the appearance of bias as distinct from proved actual bias. The test is set out at CLR 293-4 to be:

"Whether in all the circumstances a fair minded, lay observer with knowledge of the material objective facts "might entertain a reasonable apprehension that [the Judge] might not bring an impartial and unprejudiced mind to the resolution of the question" in issue."

In a dissenting judgment, Deane, J in the High Court of Australia in Webb v R [1994] HCA 30; (1994) 181 CLR 41 at 67-8; [1994] HCA 30; 122 ALR 41 said at 68, after stating the principles from the Livesey case, that the test directly reflects its rationale, namely, that it is of fundamental importance that the parties to litigation and the general public have full confidence in the integrity, including the impartiality, of those entrusted with the administration of justice. He went further to say that the test is an objective one and the standard to be observed in its application is that of a hypothetical, fair minded and well informed lay observer.

Deane, J continued by classifying into four distinct but somehow overlapping main categories, the doctrine of disqualification by reason of the appearance of bias. That statement of the law is a sound one, which in my view, is relevant and should be applied in Papua New Guinea. I quote it in full because I consider it to be of some persuasive reasoning.

"The first is disqualification by interest, that is to say, cases where some direct or indirect interest in the proceedings, whether pecuniary or otherwise, gives rise to a reasonable apprehension of prejudice, partiality or prejudgment. The second is disqualification by conduct, including published statements. That category consists of cases in which conduct, either in the course of, or outside, the proceedings, gives rise to such an apprehension of bias. The third category is disqualification by association. It will often overlap the first [eg, a case where a dependent spouse or child has a direct pecuniary interest in the proceedings] and consists of cases where the apprehension of prejudgment or other bias results from some direct or indirect relationship, experience or contact with a person or persons interested in, or otherwise involved in, the proceedings. The fourth is disqualification by extraneous information. It will commonly overlap the third [eg, a case where a Judge is disqualified by reason of having heard some earlier case: see, eg, Livesey v NSW Bar Association [1983] HCA 17; (1983) 151 CLR 288; Australian National Industries Ltd v Spedley Securities Ltd (in liq) (1992) 26 NSWLR 411] and consists of cases where knowledge of some prejudicial but inadmissible fact or circumstances give rise to the apprehension of bias."

It is my humble opinion these principles of law are quite relevant and applicable in the present case and to the circumstances of Papua New Guinea in the light of the trend that I have adverted to earlier. Pursuant to Schedule 2.4 of the Constitution, I would adopt and apply these principles as part of the National Court’s duty in the development of our underlying law.

In the present case, I find that counsel for the plaintiff is not an "objective observer". Accordingly, he could not have held a fair and independent view in relation to the issue of bias. He was observed to be quite emotional about the decision that he could not accuse me of bias or prejudice. By the same token, I consider that Mr Saulep could not have been a right-minded person either, in so far as the issue of bias was concerned, not when he was emotional. In my view, the plaintiff’s counsel’s convoluted manner in bringing this application was nothing more than a surmise and conjecture. It was based on emotions rather then genuine concerns, and it was raised by the counsel rather than members of the plaintiff company or members of the public. A counsel can never be an objective observer or a fair minded lay observer.

I am of the view that the conduct or assertion of the applicant and his counsel must be genuine and reasonable. It is quite irrational and unreasonable for a litigant to accuse a judge of perceived or apprehended bias just because the judge’s decision in an interlocutory application went against him. The test is objective and the litigant must exercise some objective observations, in my view. It is a very serious matter, in my view, where a judge is driven out of his court by the unreasonable, emotive and non-objective view of a counsel. Furthermore, a judge should not be disqualified because of the vigor, firmness and decisiveness he has conducted a case. The fact that he may have been very firm and vigorous in dealing with that case does not necessarily imply that he is biased or it can be inferred that there is apprehension of bias. For there are varied reasons which a judge may say something which admonishes a litigant or his lawyer. I see no prejudice or bias in a judge admonishing or criticising a litigant or his lawyer. Does the admonition or criticism amount to bias or apprehension of bias? I do not think so.

On the basis of the test in Livesey v NSW Bar Association (supra), Mr Saulep could not be a "fair minded, lay observer" for the same reasons that I have adverted to earlier. Furthermore, on the basis of the principles in Webb v R (supra), I consider that this application should fail. The doctrine of disqualification by reason of appearance of bias that Deane, J adverted to in his judgment is quite relevant and of persuasive value that I adopt here. In my view, when a litigant applies for disqualification of a judge, he must be able to show all or any of the four main categories of disqualification discussed in that case. I consider that those principles are applicable in the present case.

I consider that an applicant must establish that, firstly, the judge has some direct or indirect pecuniary or other interests. Secondly, he must show that the judge, by his conduct, whether during the proceedings in court or outside court, has demonstrated by words or conduct that he may be biased. Thirdly, it must be shown that a judge has some form or degree of association with a party in the litigation before him. Either the party is a relative, friend or someone, or an organisation that he closely and intimately associates with. And finally, an applicant must establish that the judge has presided over an earlier case involving the same parties, or has been in possession of some prejudicial or inadmissible materials that are likely to influence his mind.

In applying all these principles here, I am of the opinion that there is no basis for my disqualification, and I refuse to disqualify myself from presiding over this matter. The plaintiff’s application is therefore dismissed with costs.

I order the plaintiff to pay the costs of the defendants and the intervener.

Lawyer for plaintiff: Saulep Lawyers.
Lawyer for first and second defendants: Pato Lawyers.
Lawyer for third and fourth defendants: Carter Newell.
Lawyer for intervener: Soi & Associates.