N4987

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 690 OF 2011

BETWEEN:

WORKERS MUTUAL INSURANCE
(PNG) LIMITED (in Liq)
Plaintiff

AND:

SATHASIVAM SIVAKUMARAN
Defendant

Waigani: Hartshorn J.
2012: 21st December
2013: 29th January

Application for disqualification of a Judge – apprehension of bias – principles – indemnity costs – when appropriate to be awarded

Facts:

The defendant sought to disqualify Hartshorn J. from presiding in the substantive hearing of this matter. The defendant contended that there is an apprehension of bias by Hartshorn J. against him as the firm of which Hartshorn J. was the Resident Managing Partner, acted in an arbitration against a company of which the defendant was the Managing Director. The application was opposed by the plaintiff who argued, among others, that there was no evidence that suggested that Hartshorn J. gave advice during his practice on an issue that is presently before this court or whether Hartshorn J. was in a position to receive special knowledge or did receive special knowledge concerning the plaintiff or defendant.

Held:

1.	There is no evidence that the subject matter of the arbitration referred to by the plaintiff concerned an issue that is the subject of this proceeding or was related in any way to this proceeding. There is no evidence that Hartshorn J. gave any advice to POSF in the arbitration but if such advice was given, there is no evidence that the advice concerned or was related to an issue in this proceeding. Even if the arbitration concerned an issue in this proceeding or was related to this proceeding and advice was given by Hartshorn J. on such an issue to POSF, there is no evidence that Hartshorn J. was in a position to receive special knowledge or did receive special knowledge concerning an issue or a party in this proceeding.

2.	The defendant has failed to demonstrate a reasonable apprehension of bias by Hartshorn J. against him. This application is without merit and the relief that is sought is refused.

3.	Costs on indemnity basis are awarded to the Plaintiff

Cases cited:

Papua New Guinea Cases

PNG Pipes Pty Ltd and Sankaran Venugopal v. Mujo Sefa & Ors (1998) SC592 
Application by Herman Joseph Leahy (2006) SC981 
Yama v. Bank South Pacific Ltd (2008) SC921 
Pacific Equities & Investments Ltd v. Teup Goledu & Ors (2008) N3400
Rex Paki v. MVIL (2010) SC1015

Overseas Cases

Johnson v. Johnson [2000] HCA 48 
Ebner v. Official Trustee in Bankruptcy [2000] HCA 63 
Smits v. Roach [2006] HCA 36 

Counsel:

Mr. A. Chillion, for the Plaintiff 
Mr. N. K. Magela and Mr. R. Namaliu, for the Defendant

29th January, 2013

1. HARTSHORN J. The defendant seeks that I be disqualified from presiding in the substantive hearing of this matter. He makes application pursuant to Order 12 Rule 1 National Court Rules, s. 155 (4) and s. 158 Constitution. The plaintiff opposes the application.

2. The defendant seeks my disqualification as he contends that there is an apprehension of my bias against him. This is because in or about 2004 and 2005, the law firm Blake Dawson Waldron (BDW), acted for POSF Ltd (POSF) in an arbitration with Workers Mutual Insurance (PNG) Ltd (WMI), the present plaintiff, but not in liquidation. At the time, I was the Resident Managing Partner of BDW and the defendant was the Managing Director of WMI. The defendant submits that there is therefore an apprehension of my bias against him.

3. The plaintiff submits amongst others, that there is no evidence as to whether I acted directly for POSF, whether the arbitration was related to this proceeding or concerned an issue in this proceeding, whether I gave advice to POSF on an issue that is presently before this court or whether I was in a position to receive special knowledge or did receive special knowledge concerning the plaintiff or defendant. Further, given that BDW acted for POSF against WMI, if any complaint of an apprehension of bias were to be made in the context of this case, it would be by WMI and not the defendant.

Law
4. As to an application for the disqualification of a judge for apprehended bias, in PNG Pipes Pty Ltd and Sankaran Venugopal v. Mujo Sefa & Ors (1998) SC592, the Supreme Court held that:

"the test applied in determining whether apprehension of bias was satisfied was whether an objective observer, knowing all surrounding facts, 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."

5. Then in an Application by Herman Joseph Leahy (2006) SC981 the Supreme Court held amongst others, that:

"1) For a Judge to be disqualified from hearing a case on the ground of apprehended bias, the test to be satisfied is: would a reasonable and fair-minded person knowing all the relevant facts have a reasonable suspicion or apprehension that a fair hearing was not possible?

2) The suspicion or apprehension of bias must be based on reasonable, not fanciful, grounds.

3) General knowledge on the part of a Judge, obtained in the course of previous employment, of the subject matter of legal proceedings will not, by itself, give rise to a reasonable suspicion or apprehension of bias in the event that the Judge deals with the subject matter in a judicial capacity.

4) If a Judge's knowledge of the subject matter of legal proceedings is contended to be the basis of a suspicion or apprehension of bias there must be a real connection between the Judge's knowledge and the issues for adjudication in those proceedings, eg if the Judge has expressed a prior opinion on the issues for adjudication ……

7) A party and his counsel have a duty to expeditiously bring an application to disqualify a Judge from dealing with a case, immediately after the facts said to support an alleged suspicion or apprehension of bias are known…….."

6. As to the hypothetical observer, in Yama v. Bank South Pacific Ltd (2008) SC921, the Supreme Court, of which I was a member, observed that an objective, fair minded, lay observer is to be attributed with having some knowledge of the way in which lawyers and judges work. The Australian High Court in Johnson v. Johnson [2000] HCA 48 explained further that:

"The hypothetical reasonable observer of the judge's conduct is postulated in order to emphasise that the test is objective, is founded in the need for public confidence in the judiciary, and is not based purely upon the assessment by some judges of the capacity or performance of their colleagues. At the same time, two things need to be remembered: the observer is taken to be reasonable; and the person being observed is "a professional judge whose training, tradition and oath or affirmation require the judge to discard the relevant, the immaterial and the prejudicial""

7. To successfully demonstrate a reasonable apprehension of bias by me such that I should be disqualified from hearing this proceeding, the defendant should properly identify the facts, matters and circumstances by reason of which it is said that I might decide this proceeding other than on merit and secondly, demonstrate a logical connection between those facts, matters and circumstances and the apprehended deviation from the course of deciding the proceeding on merit: Peter Yama v. BSP (supra), Pacific Equities & Investments Ltd v. Teup Goledu & Ors (2008) N3400, Ebner v. Official Trustee in Bankruptcy [2000] HCA 63, Smits v. Roach [2006] HCA 36. 

Consideration

8. The facts, matters and circumstances which it is contended, might lead me to decide matters other than on their legal and factual merits are that I was the Resident Managing Partner of BDW at the time that the firm acted for POSF in an arbitration with WMI and although it is not in evidence on this application, I assume from previous hearings in this proceeding, that the defendant was the Managing Director of WMI. 

9. I will proceed on the basis that the above facts, matters and circumstances do arise.

10. If I understand correctly, the defendant contends that the logical connection between these facts, matters and circumstances and the supposed deviation from deciding the case on the merits, is that an objective, fair minded lay observer might think that because I was the Resident Managing Partner of BDW at the time that BDW acted on the arbitration for POSF with WMI, the Managing Director of which was the defendant, I may be predisposed to find against the defendant.

11. As to the contention referred to above, there is no evidence to suggest that I acted directly for POSF. Even if I had so acted, there is no evidence that the subject matter of the arbitration concerned an issue that is the subject of this proceeding or was related in any way to this proceeding. There is no evidence that I gave any advice to POSF in the arbitration but if I did give such advice, there is no evidence that the advice concerned or was related to an issue in this proceeding. Even if the arbitration concerned an issue in this proceeding or was related to this proceeding and I gave advice on such an issue to POSF, there is no evidence that I was in a position to receive special knowledge or did receive special knowledge concerning an issue or a party in this proceeding.

12. Consequently, I reject the contention of the defendant. The defendant has failed to demonstrate a reasonable apprehension of my bias against him. This application is without merit and the relief that is sought is refused.

Costs

13. The plaintiff seeks its costs of this application from the defendant on an indemnity basis. It submits that the defendant has been placed on notice by letter that such costs would be sought. A copy of that letter is in evidence (costs letter). Further, that this application was filed a day before the commencement of the trial on an assessment of damages, amounts to improper and unreasonable conduct and can be construed as conduct engineered towards delaying the trial. The defendant has known that I have been and would be presiding over this matter and has filed an application at the last minute which is not supported by evidence. The actions of the defendant have caused costs to be incurred on behalf of the plaintiff and the defendant should be made accountable for these costs.

14. The defendant submits that the award of costs is discretionary and that the costs letter was only received the day before the hearing of this application. Further, an award of indemnity costs should only be made in exceptional cases and should not be abused.

15. In Rex Paki v. MVIL (2010) SC1015, the Supreme Court, of which I was a member, held that:

"The award of costs on an indemnity basis is discretionary. An order for costs on an indemnity basis may be made where the conduct of a lawyer or a party to the proceedings is so improper, unreasonable or blameworthy that he should be so punished by such an order. The question is whether the conduct of the appellant in this matter is such that it caused the respondent to incur unnecessary costs."

16. In regard to the defendant's submission, as to the costs letter being received the day before the application, the defendant's counsel could have given notice that he was withdrawing the application that afternoon or at the latest on the morning of the application. As to such an award of costs being made only in exceptional cases and that the awarding of such costs should not be abused, as the Supreme Court said in Paki (supra), the question is whether the conduct of a party in the matter is such that it caused another party to incur unnecessary costs.

17. In this instance, the evidence given in support of the application was paltry. Further, that evidence has been available to the defendant and his lawyers since the proceeding commenced as the events relied upon occurred in 2004-2005. Consequently, if the application were to be made, it should have been made soon after the commencement of the proceedings. As referred to previously, in Herman Leahy (supra), it was held amongst others that: 

"…..7) A party and his counsel have a duty to expeditiously bring an application to disqualify a Judge from dealing with a case, immediately after the facts said to support an alleged suspicion or apprehension of bias are known…….."

18. To file an application in such circumstances, that had little merit with minimal evidence, three days (which included Saturday and Sunday) before the hearing of the assessment of damages, given that the proceedings were commenced in June 2011, and that there have been numerous hearings in the commercial track before me since; to my mind has the appearance of conduct attempting to delay the hearing of the assessment of damages and constitutes unreasonable or blameworthy conduct on behalf of the defendant or his counsel, that has caused the plaintiff to incur unnecessary costs.

19. Consequently, I am satisfied that the plaintiff has made out his case for indemnity costs to be awarded.

Orders

20. The formal orders of the Court are:

a)	the relief sought in the notice of motion of the defendant filed 30th November 2012 is refused.

b)	the defendant shall pay the costs of the plaintiff of and incidental to the notice of motion on an indemnity basis.

c)	time is abridged.

__________________________________________________
Allens Arthur Robinson: Lawyers for the Plaintiff 
Nikiuma Lawyers: Lawyers for the Defendant